Answer:
S/n General journal Debit Credit
1. Cash $90,000
Common stock $90,000
2. Equipment $400,000
Cash $180,000
Notes payable $282,000
3 Supplies $5,500
Account payable $5,500
4. Cash $8,400
Service revenue $8,400
5. Advertising expense $500
Cash $500
6. Account payable $800
Cash $800
7. Dividends $1,600
Cash $1,600
8. Rent expense $1,200
Cash $1,200
9. Cash $2,200
Unearned service revenue $2,200
10. Account receivable $500
Service revenue $500
At the end of 2020, Payne Industries had a deferred tax asset account with a balance of $25 million attributable to a temporary book-tax difference of $100 million in a liability for estimated expenses. At the end of 2021, the temporary difference is $64 million. Payne has no other temporary differences. Taxable income for 2021 is $180 million and the tax rate is 25%. Payne has a valuation allowance of $10 million for the deferred tax asset at the beginning of 2021.
Required:
a. Prepare the journal entry(s) to record Payne’s income taxes for 2021, assuming it is more likely than not that the deferred tax asset will be realized in full.
b. Prepare the journal entry(s) to record Payne’s income taxes for 2021, assuming it is more likely than not that only one-fourth of the deferred tax asset ultimately will be realized.
Answer:
A. Payne Industries
(In Million)
Dr Income tax expense $54
Cr To Deferred Tax Assets $9
Cr To Income Tax Payable $45
No Journal Entry Required
b. Dr Income tax expense Dr $54
Cr To Deferred Tax Assets $9
Cr To Income Tax Payable $45
Dr Income tax expense $12
Cr To Valuation Allowance - Deferred Tax Assets $12
Explanation:
a. Preparation of the journal entry(s) to record Payne’s income taxes for 2021,
Payne Industries
(In Million)
Dr Income tax expense $54
($45+$9)
Cr To Deferred Tax Assets $9
[($100-$64)*25%]
Cr To Income Tax Payable $45
($180*25%)
(To record income tax expense recorded for 2021 and deferred tax assets reversed for temporary differences reversal )
No Journal Entry Required
b. Preparation of the journal entry(s) to record one-fourth of the deferred tax asset ultimately will be realized
Journal Entries
(In Million)
Dr Income tax expense Dr $54
($45+$9)
Cr To Deferred Tax Assets $9
[($100-$64)*25%]
Cr To Income Tax Payable $45
($180*25%)
(Being income tax expense recorded for 2021 and deferred tax assets reversed for temporary differences reversal )
Dr Income tax expense $12
Cr To Valuation Allowance - Deferred Tax Assets $12
[($64*75%)*25%]
(Being to record valuation allowance for deferred tax assets)
What does patriotism mean
Answer:
patriotism is a synonym for Nationalism; a feeling of extreme pride for one's country.
Explanation:
Answer:
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Explanation:
If bad debt expense for the year was $40,000, what was the amount of bad debts written off during the year?
Answer:
$32,000
Explanation:
The computation of the bad debt written off during the year is shown below:
= Opening balance of the allowance account + bad debt expense - required allowance
= $30,000 + $40,000 - $38,000
= $32,000
hence, the amount of bad debts written off during the year is $32,000
We simply applied the above formula so that the correct answer could come
Suppose that, in a competitive market without government regulations, the equilibrium price of milk is $2.50 per gallon, and employees at grocery stores earn $21.50 per hour. Indicate the following whether each of the statements is an example of a price ceiling or a price floor and whether it results in a shortage or a surplus or has no effect on the price and quantity that prevail in the market.
a. There are many teenagers who would like to work at grocery stores, but the minimum-wage law sets the hourly wage at $25.00.
b. The government has instituted a legal minimum price of $2.30 per gallon for milk.
c. The government prohibits grocery stores from selling milk for more than $2.30 per gallon.
Explanation:
at price ceiling we have price set at a maximum level. it cannot be raised beyond this level. At binding price ceiling, price would be set to be lower than what is the equilibrium price level. a non binding price ceiling is set to be higher than equilibrium level.
At price floor, price is set to a particular minimum level. It cannot fall lower than this. At binding price floor, price is higher than equilibrium price' at non binding price floor, it is set to be lower than equilibrium price level.
this expalnation should help us to answer this question.
(a) Many teenagers would like to work but minimum wage is set at 25.00 we have Price floor, Binding
(b) Government instituted legal minimum price of a gallon of milk at $2.30 we have Price floor, Non-binding
(c) if the Government prohibits from selling milk for more than $2.30 per gallon then we have Price ceiling, Binding
What are two cons of using a credit card?
At Davide Corporation, direct materials are added at the beginning of the process and conversions costs are uniformly applied. Other details include:
WIP beginning (60% for conversion) 17,500 units
Units started 114,500 units
Units completed and transferred out 111,700 units
WIP ending (30% for conversion) 20,300 units
Beginning WIP direct materials $22,300
Beginning WIP conversion costs $19,700
Costs of materials added $370,000
Costs of conversion added $280,000
What is the total cost of units completed and transferred out?
Answer and Explanation:
For materials
Equivalent completed units = Completed units + WIP ending
= 111,700 + 20,300
= 132,000 units
Cost of materials = Beginning WIP + Cost of materials added
= 22,300 + 370,000
= $392,300
Cost of material per units = 392,300 ÷ 132,000
= $2.97197
For conversions
Equivalent completed units = Completed units + WIP ending
= 111,700 + 20,300 × 30%
= 117,790 units
Cost of Conversion = Beginning WIP + Cost of conversion added
= 19,700 + 280,000
= $299,700
Cost of conversion per units = 299,700 ÷ 117,790
= $2.54436
Total cost of units completed and transferred out
= 111,700 × (2.97197 + 2.54436)
= $616,174
Jane is planning to go on a camping trip. She purchases a bottle of mineral water, a pack of biscuits, a small tube of toothpaste, and a toothbrush from the supermarket near her house. The items that Jane has purchased from the supermarket are _____.
franchise
Explanation:
right granted to an individual or group to the market for a business goods or services within a certain area
Jane is planning to go on a camping trip. The items that Jane has purchased from the supermarket are non durable goods.
What do you mean by the non durable goods?The lifespan of consumer nondurable items, which are bought for immediate or nearly immediate consumption, ranges from minutes to three years. These frequently include things like meals, drinks, clothes, shoes, and gasoline.
Non-durable commodities are typically produced, delivered, and sold to consumers quickly.
These products are frequently used very rapidly as well, thus consumers require a constant supply in order to keep stocking up.
Therefore, Jane is planning to go on a camping trip. She purchases a bottle of mineral water, a pack of biscuits, a small tube of toothpaste, and a toothbrush from the supermarket near her house. The items that Jane has purchased from the supermarket are non durable goods.
To know more about the non durable goods, visit:
https://brainly.com/question/28606276
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Help me please thank you
Answer:
You have to be intelligent, risk taking and you haver to care about your people.
Explanation:
Consider an economy that produces only chocolate bars. In year 1, the quantity produced is 3 bars and the price is $2. In year 2, the quantity produced is 5 bars and the price is $4. In year 3, the quantity produced is 7 bars and the price is $6.
Required:
Using year 1 as the base year, compute nominal GDP, real GDP, and the GDP deflator for each year.
Answer:
Nominal GDP in year 1 = $6
Nominal GDP in year 2 = $20
Nominal GDP in year 3 = $42
Real GDP in year 1 = $6
Real GDP in year 2 = $10
Real GDP in year 3 = $14
GDP deflator in year 1 = 100
GDP deflator in year 2 = 200
GDP deflator in year 3 = 300
Explanation:
Gross domestic product is the total sum of final goods and services produced in an economy within a given period which is usually a year
GDP calculated using the expenditure approach = Consumption spending by households + Investment spending by businesses + Government spending + Net export
Nominal GDP is GDP calculated using current year prices while Real GDP is GDP calculated using base year prices. Real GDP has been adjusted for inflation.
Nominal GDP = quantity produced x current year price
Nominal GDP in year 1 = (3 x $2) = $6
Nominal GDP in year 2 = 5 x $4 = $20
Nominal GDP in year 3 = 7 x $6 = $42
Real GDP = quantity produced x base year price
Real GDP in year 1 = (3 x $2) = $6
Real GDP in year 2 = 5 x $2 = $10
Real GDP in year 3 = 7 x $2 = $14
GDP deflator = nominal GDP / Real GDP x 100
GDP deflator in year 1 = $6 / $6 x 100 = 100
GDP deflator in year 2 = $20 / $10 x 100= 200
GDP deflator in year 3 = $42 / 14 x 100 = 300
What is considered revenue recognition?
Answer:
revenue is recognized and determines how to account for it. Typically, revenue is recognized when a critical event has occurred, and the dollar amount is easily measurable to the company
Explanation:
examples:Sales Basis Method. With the sales basis revenue recognition methods, revenue is recorded at the time of sale.
Percentage of Completion Method
Completed Contract Method
Seiko’s current salary is $85,000. Her marginal tax rate is 32 percent and she fancies European sports cars. She purchases a new auto each year. Seiko is currently a manager for an Idaho Office Supply. Her friend, knowing of her interest in sports cars, tells her about a manager position at the local BMW and Porsche dealer. The new position pays only $75,000 per year, but it allows employees to purchase one new car per year at a discount of $15,000. This discount qualifies as a nontaxable fringe benefit. In an effort to keep Seiko as an employee, Idaho Office Supply offers her a $10,000 raise. Answer the following questions about this analysis.
Problem 12-41
Part a a. Assuming it has a 21 percent marginal tax rate, what is the annual after-tax cost to Idaho Office Supply to provide Seiko with the $10,000 increase in salary?
Answer:
$7,900
Explanation:
Calculation for the annual after-tax cost
Additional salary = $ 10,000
Marginal tax rate=21%
First step is to find the income tax benefit
Income tax benefit = $ 10,000 x 21%
Income tax benefit= $ 2,100
Second step is to find the Annual after tax cost of additional salary
Annual after tax cost of additional salary = $ 10,000 - $2,100
Annual after tax cost of additional salary = $7,900
Therefore the annual after-tax cost will be $7,900
Bird Corp.'s trademark was licensed to Brian Co. for royalties of 15% of the sales of the trademarked items. Royalties are payable semiannually on March 15 for sales in July through December of the prior year, and on September 15 for sales in January through June of the same year. Bird received the following royalties from Brian:
March 15 September 15
20X4 $5,000 $7,500
20X5 6,000 8,500
Brian estimated that the sales of the trademarked items would total $30,000 for July through December 20X5. In Bird's 20X5 Income Statement, the royalty revenue should be:______.
a. $13,000.
b. $14,500.
c. $19,000.
d. $20,500.
Answer:
a. $13,000
Explanation:
Calculation for what royalty revenue should be
First step is to find the estimated amount for the second half of the year
Royalties for the second half =
15%*$30,000
Royalties for the second half= $4,500
Now let Compute for the total royalty revenue
Total royalty revenue for 20X5=$8,500+$4,500
Total royalty revenue for 20X5=$13,000
Therefore the royalty revenue should be $13,000
MotorCar, a major automobile company headquartered in Detroit, is concerned about being left behind in the race to produce autonomous vehicles. There remains much uncertainty regarding the future of autonomous vehicle technology. Some industry experts say fully self-driving cars could be brought to market within a couple of years. Others believe the technology could take decades to develop. And still others are skeptical that the technology will ever be safe enough to bring to the automobile mass market. Further, in addition to safety and technological hurdles, there are regulatory obstacles as well. However, MotorCar has decided that it needs to innovate.
The company is considering (1) increasing funding to its existing R&D department to expand to the development of AI (artificial intelligence) technology, needed for self-driving vehicles; (2) launching a fully owned subsidiary (a new company that it owns and controls) focused exclusively on AI; or (3) partnering with a major Silicon Valley tech company that has already made considerable progress on AI technology.
Required:
What do you see as some of the potential benefits and risks of these different organizational approaches?
Answer:
(1) increasing funding to its existing R&D department to expand to the development of AI (artificial intelligence) technology, needed for self-driving vehicles
This strategy would produce the benefit of puttinig the company on the edge of the development of AI in order to produce driverless vehicles.
The risk is that the investment could be too high for the initial benefit, since there is no certainty that driveless cars will be in the market in the short-term.
(2) launching a fully owned subsidiary (a new company that it owns and controls) focused exclusively on AI
This strategy would produce a similar benefit as the strategy above. However, it could also benefit from a little bit less administrative control because in this case, the AI development would be in charge of a subsidiary, not a division.
The risk is the same as above: initial investments may be too high for the initial benefits.
(3) partnering with a major Silicon Valley tech company that has already made considerable progress on AI technology.
This strategy produces the benefit of requiring less investment while still putting the company on the edge of AI research. However, the risk lies in loss of control over the thecnology, and possible future conflicts with the partner company.
Consider the experiments. Experiment 1: A study is done to determine which of two fuel mixtures allows a rocket to travel farther over a period of time. Rocket A, which requires additional equipment to keep it stable, is used to test one fuel mixture, and rocket B is used to test the other. Both rockets are identical aside from their mass. The results indicate that rocket B traveled farther than rocket A over the same period of time. Experiment 2: A double-blind experiment is performed to test whether a new drug is effective in lowering blood pressure. A random sample of subjects with high blood pressure is assigned to two groups. One group receives the new drug and the other group does not. Neither group is permitted to take any other medications during the experiment or to change their lifestyles in any way. The results of the experiment show that the drug is effective in lowering blood pressure.
Identify the experiment in which confounding occurs and the reason for its occurrence.
a. Neither experiment has a confounding variable.
b. Experiment 1 has a confounding variable related to the fuel mixtures. Varying the fuel mixture could skew the results of the study and should be kept constant.
c. Experiment 2 has a confounding variable related to the type of experiment. A double-blind experiment may increase the risk of the placebo effect and possibly skew the results.
d. Experiment 1 has a confounding variable related to the mass of the rockets. Any variation in mass may cause a discrepancy in the distance traveled.
e. Experiment 2 has a confounding variable related to the subjects used. Choosing a sample of subjects with high blood pressure instead of individuals with different blood pressure levels may confuse the results.
Answer:
d. Experiment 1 has a confounding variable related to the mass of the rockets. Any variation in mass may cause a discrepancy in the distance traveled.
Explanation:
Both experiments have confounding variables. But the reasons given for the occurrence of the confounder in experiment 2 do not justify (c) and (e) as correct answers. By definition, confounders are factors other than the independent variable that cause differences in outcome. For experiment 1, the different masses of the two rockets affect the independent variable (fuel mixture) being studied, and actually cause the discrepancy in the distance traveled as indicated in answer (d). Other examples of confounders are placebo, weather, age, and experimenter bias which a double-blind can eliminate.
Deferral adjustments are needed when the business:
a. Pays cash after the expense has been incurred.
b. Unanswered pays cash before the expense has been incurred.
c. Unanswered receives cash after the revenue has been generated.
d. Unanswered receives cash before the revenue has been generated.
Answer:
The correct answers are the options B and D: Pays cash before the expense has been incurred. And receives cash before the revenue has been generated.
Explanation:
To begin with, in the accounting field the term of "Deferral Adjustments" refers to those that the accountant does when they postpone the report of it in the income statement until a later period, so that means that when an event happens they might decide to postpone the report of that particular transaction doing what it is called "defer". Moreover, the two most common cases when the accountants use this technique are the ones choosen from the options, the cases B and D.
The following lots of Commodity Z were available for sale during the year.
Beginning inventory 11 units at $48
First purchase 16 units at $51
Second purchase 20 units at $56
Third purchase 19 units at $58
The firm uses the periodic system, and there are 23 units of the commodity on hand at the end of the year. What is the ending inventory balance at the end of the year according to the FIFO method?
a.$1,326
b.$3,566
c.$3,543
d.$1,104
Etxuck327 Inc. sells a particular textbook for $39. Variable expenses are $28 per book. At the current volume of 49,000 books sold per year the company is just breaking even. Given these data, the annual fixed expenses associated with the textbook total:
Answer:
539,000.00
Explanation:
As per the contribution margin analysis concept, the break-even point is obtained by dividing fixed cost by contribution margin per unit.
For Etuck327,
The selling price is $39
Variable expense is $28
Break-even in units is 49,000 books.
Contribution margin per unit = selling price - variable costs
=$39- $28
=$11
if Break-even = fixed cost/ contribution margin per unit, then
49,000= fixed cost / 11
fixed costs = 11 x 49000
Fixed costs = 539,000.00
Question 3
20 pts
Solve the problem
A normal distribution has a limited range and can be skewed in either direction.
True
0 False
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The following transactions relate to the General Fund of the City of Buffalo Falls for the year ended December 31, 2020:
a. Beginning balances were: Cash, $98,000; Taxes Receivable, $197,000; Accounts Payable, $56,000; and Fund Balance, $239,000.
b. The budget was passed. Estimated revenues amounted to $1,280,000 and appropriations totaled $1,276,400. All expenditures are classified as General Government.
c. Property taxes were levied in the amount of $940,000. All of the taxes are expected to be collected before February 2021.
d. Cash receipts totaled $910,000 for property taxes and $310,000 from other revenue.
e. Contracts were issued for contracted services in the amount of $104,000.
f. Contracted services were performed relating to $93,000 of the contracts with invoices amounting to $90,400.
g. Other expenditures amounted to $986,000.
h. Accounts payable were paid in the amount of $1,130,000.
i. The books were closed.
Required:
a. Prepare journal entries for the above transactions.
b. Prepare a Statement of Revenues, Expenditures, and Changes in Fund Balance for the General Fund.
c. Prepare a Balance Sheet for the General Fund assuming there are no restricted or assigned net resources and outstanding encumbrances are committed by contractual obligation.
Answer:
Please see attached for the detailed solution.
Explanation:
a. Prepare Journal
b. Prepare statement
c. Prepare balance sheet
Please find attached solution to the above questions.
Darby Company, operating at full capacity, sold 500,000 units at a price of $94 per unit during the current year. Its income statement is as follows:
Sales $47,000,000
Cost of goods sold 25,000,000
Gross profit $22,000,000
Expenses:
Selling expenses $4,000,000
Administrative expenses 3,000,000
Total expenses 7,000,000
Income from operations $15,000,000
The division of costs between variable and fixed is as follows:
Variable Fixed
Cost of goods sold 70% 30%
Selling expenses 75% 25%
Administrative expenses50% 50%
Management is considering a plant expansion program for the following year that will permit an increase of $3,760,000 in yearly sales. The expansion will increase fixed costs by $1,800,000 but will not affect the relationship between sales and variable costs.
Required:
1. Determine the total variable costs and the total fixed costs for the current year.
Total variable costs $_____
Total fixed costs $_____
2. Determine (a) the unit variable cost and (b) the unit contribution margin for the current year.
Unit variable cost $_____
Unit contribution margin $_____
3. Compute the break-even sales (units) for the current year.
4. Compute the break-even sales (units) under the proposed program for the following year.
5. Determine the amount of sales (units) that would be necessary under the proposed program to realize the $15,000,000 of income from operations that were earned in the current year.
6. Determine the maximum income from operations possible with the expanded plant.
7. If the proposal is accepted and sales remain at the current level, what will the income or loss from operations be for the following year?
8. Based on the data given, would you recommend accepting the proposal?
a. In favor of the proposal because of the reduction in break-even point.
b. In favor of the proposal because of the possibility of increasing income from operations.
c. In favor of the proposal because of the increase in break-even point.
d. Reject the proposal because if future sales remain at the current level, the income from operations will increase.
e. Reject the proposal because the sales necessary to maintain the current income from operations would be below the current year sales.
Answer:
Darby Company
1. Determination of the total variable costs and the total fixed costs for the current year.
Total variable costs $_____22,000,000
Total fixed costs $_____10,000,000
2. Determination of (a) the unit variable cost and (b) the unit contribution margin for the current year.
Unit variable cost $_____44 ($22,000,000/500,000)
Unit contribution margin $_____50 ($94 - $44)
3. Compute the break-even sales (units) for the current year:
Break-even sales (units) = Fixed Costs/Contribution per unit
= $10,000,000/$50 = 200,000 units
4. Compute the break-even sales (units) under the proposed program for the following year.
Break-even sales (units) = Fixed costs/Contribution per unit
= $11,800,000/$50 = 236,000
5. Determine the amount of sales (units) that would be necessary under the proposed program to realize the $15,000,000 of income from operations that were earned in the current year
Break-even sales (units) to achieve income target = (Fixed costs + Income target)/Contribution per unit
= ($11,800,000 + 15,000,000)/$50
= 536,000
6. Determine the maximum income from operations possible with the expanded plant.
Income Statement for the current year
Next Year's Financials:
Total
Sales $50,760,000 ($94 * 540,000)
Expenses:
Total variable 23,760,000 ($44 * 540,000)
Fixed costs 11,800,000 ($10,000,000 + $1,800,000)
Income from operations $15,200,000
7. If the proposal is accepted and sales remain at the current level, what will the income or loss from operations be for the following year?
Total
Sales $47,000,000 ($94 * 500,000)
Expenses:
Total variable 22,000,000 ($44 * 500,000)
Fixed costs 11,800,000 ($10,000,000 + $1,800,000)
Income from operations $13,200,000
8. Based on the data given, would you recommend accepting the proposal?
Unless the proposal results to an increase in the units sold, it is not acceptable as can be seen from (7) above. However, it is very acceptable if sales unit will increase by 40,000 units as illustrated in (6) above.
b. In favor of the proposal because of the possibility of increasing income from operations.
Explanation:
a) Data and Calculations:
Income Statement for the current year
Sales $47,000,000
Cost of goods sold 25,000,000
Gross profit $22,000,000
Expenses:
Selling expenses $4,000,000
Administrative expenses 3,000,000
Total expenses 7,000,000
Income from operations $15,000,000
Sales volume = 500,000 units
Selling price = $94
Division of costs between variable and fixed is as follows:
Variable Fixed Variable Fixed Total
Sales $47,000,000
Cost of goods sold 70% 30% $17,500,00 7,500,000 25,000,000
Gross profit $22,000,000
Expenses:
Selling expenses 75% 25% 3,000,000 1,000,000 4,000,000
Administrative exp. 50% 50% 1,500,000 1,500,000 3,000,000
Total expenses 4,500,000 2,500,000 7,000,000
Total variable and fixed costs 22,000,000 10,000,000 32,000,000
Income from operations $15,000,000
Next Year's Financials:
Variable Fixed Variable Fixed Total
Sales $50,760,000
Cost of goods sold 70% 30% $17,500,00 7,500,000 25,000,000
Gross profit $22,000,000
Expenses:
Total variable and fixed costs 22,000,000 11,800,000
Income from operations $15,000,000
For each of the procedures described in the table below, identify the audit procedure per formed and classification of the audit procedure using the following:
Audit Procedures: Classification of Audit Procedure
(I) Analytical procedure (9) Substantive procedures
(2) Confirmation (I0) Test of controls
(3) Inquiry
(4) Inspection of recordsordocuments
(5) Inspection of tangible assets
(6) Observation
(7) Recalculation
(8) Reperformance
Procedure Audit Procedure Classification of Audit Procedure
a. Requested responses directly from customers as to amounts due.
b. Compared total bad debts this year with the totals for the previous two years.
c. Questioned management about likely total uncollectible accounts.
d. Watched the accounting clerk record the daily deposit of cash receipts.
e. Examined invoice to obtain evidence in support of the ending recorded balance of a customer.
f. Compared a sample of sales invoices to credit files to determine whether the customers were on the approved customer list.
g. Examined a sample of sales invoices to see if they were initialized by the credit manager indicating credit approval.
Answer:
a. Requested responses directly from customers as to amounts due.
Audit Procedure: Confirmation
Classification of Audit Procedure: Substantive procedures
b. Compared total bad debts this year with the totals for the previous two years.
Audit Procedure: Analytical procedure
Classification of Audit Procedure: Substantive procedures
c. Questioned management about likely total uncollectible accounts.
Audit Procedure: Inquiry
Classification of Audit Procedure: Substantive procedures
d. Watched the accounting clerk record the daily deposit of cash receipts.
Audit Procedure: Observation
Classification of Audit Procedure: Test of controls
e. Examined invoice to obtain evidence in support of the ending recorded balance of a customer.
Audit Procedure: Inspection of records or documents
Classification of Audit Procedure: Substantive procedures
f. Compared a sample of sales invoices to credit files to determine whether the customers were on the approved customer list.
Audit Procedure: Reperformance
Classification of Audit Procedure: Test of controls
g. Examined a sample of sales invoices to see if they were initialized by the credit manager indicating credit approval.
Audit Procedure: Inspection of records or documents
Classification of Audit Procedure: Test of controls
The following summary transactions occurred during 2021 for Bluebonnet Bakers:
Cash Received from:
Collections from customers $490,000
Interest on notes receivable 11,500
Collection of notes receivable 54,000
Sale of investments 34,000
Issuance of notes payable 175,000
Cash Paid for:
Purchase of inventory 235,000
Interest on notes payable 7,500
Purchase of equipment 90,000
Salaries to employees 95,000
Payment of notes payable 40,000
Dividends to shareholders 35,000
The balance of cash and cash equivalents at the beginning of 2021 was $26,000.
Required:
Prepare a statement of cash flows for 2021 for Bluebonnet Bakers. Use the direct method for reporting operating activities
Answer and Explanation:
The preparation of the statement of cash flows is presented below:
Bluebonnet Bakers
Cash flow statement
For the year 2021
Cash flow from operating activities
Collections from customers $490,000
Interest on notes receivable 11,500
Less: Interest on notes payable 7,500
Less: Purchase of inventory 235,000
Less: Salaries to employees 95,000
Net cash flow from operating activities $164,000
Cash flow from investing activities
Collection of notes receivable 54,000
Sale of investments 34,000
Less: Purchase of equipment 90,000
Net cash flow from investing activities -$2,000
Cash flow from financing activities
Issuance of notes payable 175,000
Less: Payment of notes payable 40,000
Less: Dividends to shareholders 35,000
Net cash flow from financing activities $100,000
Net increase or decrease in cash $262,000
Add: Opening cash balance $26,000
Ending cash balance $288,000
A remotely located air sampling station can be powered by solar cells or by running an electric line to the site and using conventional power. Solar cells will cost $12,600 to install and will have a useful life of 4 years with no salvage value. Annual costs for inspection, cleaning, etc. are expected to be $1,400. A new power line will cost $11,000 to install, with power costs expected to be $800 per year. Since the air sampling project will end in 4 years, the salvage value of the line is considered to be zero. At an interest rate of 10% per year, which alternative should be selected on the basis of a future worth analysis?
Answer:
Since the total future worth of running an electric line of $19,353.42 is less than the total future worth of solar cells is $24,132.22, it implies that it will be cheaper to run an electric line than to use solar cells. Therefore, running an electric line should be selected.
Explanation:
The future worth analysis refers to an act of determining what the the worth of present amount of money or stream of money invested at an interest rate will after in some period or years to come.
To determine which one to select between solar cells and running an electric line, the we need to calculate the future worth of both and compared as follows:
a. Calculation of future value of solar cells
Calculation of future worth of $12,600 installation cost
FW of $12,600 = PW of $12,600 * (1 + r)^n ................ (1)
Where;
FW of $12,600 = Future worth of $12,600 installation cost = ?
PW of $12,600 = Present worth of $12,600 installation cost = $12,600
r = interest rate = 10%, or 0.10
n = number of years = 4
Substitute the values into equation (1), we have:
FW of $12,600 = $12,600 * (1 + 0.10)^4
FW of $12,600 = $12,600 * 1.4641
FW of $12,600 = $18,447.66
Calculation of future worth of annual costs for inspection, cleaning, etc. of $1,400
The future worth of annual costs for inspection, cleaning, etc. of $1,400 can also be calculated using the formula for calculating the Future Value (FV) of an Ordinary Annuity as follows:
FW of $1,400 = M * (((1 + r)^n - 1) / r) ................................. (2)
Where,
FW of $1,400 = Future value of Annual costs for inspection, cleaning, etc. of $1,400 =?
M = Annual costs for inspection, cleaning, etc. = $1,400
r = interest rate = 10%, or 0.10
n = number of years = 4
Substitute the values into equation (2), we have:
FW of $1,400 = $1,400 * (((1 + 0.01)^4 - 1) / 0.01)
FW of $1,400 = $1,400 * 4.060401
FW of $1,400 = $5,684.56
Calculation of total future worth of solar cells
This is calculated by simply adding the FW of $12,600 and FW of $1,400 as follows:
Total future worth of solar cells = FW of $12,600 + FW of $1,400 = $18,447.66 + $5,684.56 = $24,132.22
Therefore, the total future worth of solar cells is $24,132.22.
b. Calculation of future value of running an electric line
Calculation of future worth of $11,000 installation cost
FW of $11,000 = PW of $11,000 * (1 + r)^n ................ (3)
Where;
FW of $11,000 = Future worth of $11,000 installation cost = ?
PW of $11,000 = Present worth of $11,000 installation cost = $11,000
r = interest rate = 10%, or 0.10
n = number of years = 4
Substitute the values into equation (3), we have:
FW of $11,000 = $11,000 * (1 + 0.10)^4
FW of $11,000 = $11,000 * 1.4641
FW of $11,000 = $16,105.10
Calculation of future worth of expected annual power costs of $800
The future worth of expected annual power costs of $800 can also be calculated using the formula for calculating the Future Value (FV) of an Ordinary Annuity as follows:
FW of $800 = M * (((1 + r)^n - 1) / r) ................................. (4)
Where,
FW of $800 = Future value of expected annual power costs of $800 =?
M = Expected annual power costs = $800
r = interest rate = 10%, or 0.10
n = number of years = 4
Substitute the values into equation (4), we have:
FW of $800 = $800 * (((1 + 0.01)^4 - 1) / 0.01)
FW of $800 = $800 * 4.060401
FW of $800 = $3,248.32
Calculation of total future worth of running an electric line
This is calculated by simply adding the FW of $11,000 and FW of $800 as follows:
Total future worth of running an electric line = FW of $11,000 + FW of $800 = $16,105.10 + $3,248.32 = $19,353.42
Therefore, the total future worth of running an electric line is $19,353.42.
c. Conclusion
Since the total future worth of running an electric line of $19,353.42 is less than the total future worth of solar cells is $24,132.22, it implies that it will be cheaper to run an electric line than to use solar cells. Therefore, running an electric line should be selected.
f Europe has a real GDP growth rate of 5%, and the United States has a real GDP growth rate of 6%, while money growth in Europe is 7%, and money growth in the United States is 5%, what would the monetary exchange rate model predict for exchange rates in the long run
Answer:
the dollar will appreciate by 3% against the euro
Explanation:
long run change in the exchange rate = (growth rate money supply Europe - growth rate money supply US) - (growth rate real GDP Europe - growth rate real GDP US) = (7% - 5%) - (5% - 6%) = 2% - (-1%) = 2% + 1% = 3%
This is a very simplistic approach to the monetary exchange rate model, but since we are given only this information, it's all that we can use.
Van Frank Telecommunications has a patent on a cellular transmission process.
1. The company has amortized the $19.80 million cost of the patent on a straight-line basis, since it was acquired at the beginning of 2012.
2. Due to rapid technological advances in the industry, management decided that the patent would benefit the company over a total of six years rather than the nine-year life being used to amortize its cost.
3. The decision was made at the end of 2016 (before adjusting and closing entries).
What is the appropriate adjusting entry for patent amortization in 2016 to reflect the revised estimate.
(If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Enter your answers in millions rounded to 2 decimal places (i.e., 5,500,000 should be entered as 5.50).) Record the adjusting entry for patent amortization in 2016.
Answer:
Dr Amortization expense 5.50
Cr Accumulated Amortization - Patent 5.50
Explanation:
Preparation of Journal entries to Record the adjusting entry for patent amortization in 2016
Van Frank Telecommunications
Dr Amortization expense 5.50
Cr Accumulated Amortization - Patent 5.50
(To record amortization of patent)
Calculation for the Amortized expense
Cost of the asset $19.80
Annual amortization $2.20
($19.80 / 9 years)
Amortization till date (2012-2015) $8.80
($2.20*4)
Unamortized value ($19.80-$8.80) $11.00
Remaining life 2 years
Amortized expense ($11.00/2) $5.50
Debiting $1.65 million from Patent Amortization Expense and crediting $1.65 million from Accumulated Patent Amortization would be the adjusting entry.
After the estimate revision, the yearly amortization will be $3.30 million ($19.80 million cost of the patent x 6 years).
Debiting Patent Amortization Expense by $1.65 million and crediting Accumulated Patent Amortization by $1.65 million would be the adjustment item for 2016. The projected useful life of the patent has changed, necessitating an adjustment entry to the annual amortization expense, which is reflected in this item.
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One-year Treasury securities yield 4.85%. The market anticipates that 1 year from now, 1-year Treasury securities will yield 5.2%. If the pure expectations theory is correct, what is the yield today for 2-year Treasury securities
Answer:
5.025%
Explanation:
When we assume that the pure expectations theory is correct, then we are assuming that there is no risk premium involved. The formula to determine the yield for the 2 year treasury security:
(1 + i)² = (1 + 4.85%) x (1 + 5.2%)
(1 + i)² = 1.0485 x 1.052
(1 + i)² = 1.103022
√(1 + i)² = √1.103022
1 + i = 1.050248542
i = 0.050248542 = 5.025%
The following model is a simplified version of the multiple regression model used by Biddle and Hamermesh (1990) to study the tradeoff between time spent sleeping and working and to look at other factors affecting sleep:
sleep = β0 + β1totwrk + β2educ + β3age + u,
where sleep and totwrk (total work) are measured in minutes per week and educ and age are measured in years. (See also Computer Exercise.)
(i) If adults trade off sleep for work, what is the sign of β1?
(ii) What signs do you think β2 and β3 will have?
(iii) Using the data in SLEEP75.RAW, the estimated equation is
= 3,638.25 - .148 totwrk - 11.13 educ + 2.20 age n = 706, R2 = .113.
If someone works five more hours per week, by how many minutes is sleep predicted to fall? Is this a large tradeoff?
(iv) Discuss the sign and magnitude of the estimated coefficient on educ.
(v) Would you say totwrk, educ, and age explain much of the variation in sleep? What other factors might affect the time spent sleeping? Are these likely to be correlated with totwrk?
Use the data in SLEEP75.RAW from Biddle and Hamermesh (1990) to study whether there is a tradeoff between the time spent sleeping per week and the time spent in paid work. We could use either variable as the dependent variable. For concreteness, estimate the model
sleep =β0+ β1totwrk+u, where sleep is minutes spent sleeping at night per week and totwrk is total minutes worked during the week.
(i) Report your results in equation form along with the number of observations and R2. What does the intercept in this equation mean?
(ii) If totwrk increases by 2 hours, by how much is sleep estimated to fall? Do you find this to be a large effect?
Answer:
1. I²1 will have a negative sign
This is because the more work the adults do, the less sleep they will utilize.
2. The sign of i²2 is likely to be negative. This is because due to the demands placed on them, more educated people are likely to sleep less. Also, general as age increases some people sleep less. While some others sleep more as it increases. So i²3 is a bit complicated to judge.
3. Using the data
^sleep = 3638.24-0.148toteork-11.13educ + 2.20age
N = 706 r² = 0.113
We will convert 5 hours to minutes = 60x5 = 300
Coefficient of totwork = 0.148
O.148x300 = 44.4 minutes
In a week approximately 45 minutes of less sleep is not too much a change.
4. We are to discuss the sign and magnitude of estimated education
More education indicates less sleeping time. This is obvious given the sign of the variable educ. It is negative, but it's effect is quite small. Magnitude is -11.13.
So as education increases by 1 year, expected sleeping time decreases by 11.13 minutes weekly.
5. R² is 0.113. the 3 predictor variables gives us 11.3% of total variations in sleep and rest. 88.7% is unexplained.
Some factors that might also affect it are general health, number and age of children are factors that could correlate with totwork
I WILL GIVE BRAINLIEST
What type of manufacturing employee is usually in charge of creating work schedules?
O Operator
O Operations manager
O Assembly line worker
O Quality manager
Answer:
OB
Explanation:
O Operations manager
All of the current year's entries for Zimmerman Company have been made, except the following adjusting entries. The company's annual accounting year ends on December 31
On September 1 of the current year, Zimmerman collected six months' rent of $8,520 on storage space. At that date, Zimmerman debited Cash and credited Unearned Rent Revenue for $8,520.
On October 1 of the current year, the company borrowed $13,200 from a local bank and signed a one-year, 12 percent note for that amount. The principal and interest are payable on the maturity date.
Depreciation of $3,000 must be recognized on a service truck purchased in July of the current year at a cost of $24,000.
Cash of $3,600 was collected on November of the current year, for services to be rendered evenly over the next year beginning on November 1 of the current year. Unearned Service Revenue was credited when the cash was received.
On November 1 of the current year, Zimmerman paid a one-year premium for property insurance, $9,960, for coverage starting on that date. Cash was credited and Prepaid Insurance was debited for this amount.
The company earned service revenue of $4,200 on a special job that was completed December 29 of the current year. Collection will be made during January of the next year. No entry has been recorded.
At December 31 of the current year, wages earned by employees totaled $13,700. The employees will be paid on the next payroll date in January of the next year.
On December 31 of the current year, the company estimated it owed $490 for this year's property taxes on land. The tax will be paid when the bill is received in January of next year.
2. Using the following headings, indicate the effect of each adjusting entry and the amount of the effect. Use + for increase, − for decrease. (Reminder: Assets = Liabilities + Stockholders’ Equity; Revenues – Expenses = Net Income; and Net Income accounts are closed to Retained Earnings, a part of Stockholders’ Equity.)
Answer:
1) adjusting entries
a. On September 1 of the current year, Zimmerman collected six months' rent of $8,520 on storage space. At that date, Zimmerman debited Cash and credited Unearned Rent Revenue for $8,520.
Dr Unearned rental revenue 5,500
Cr Rental revenue 5,500
b. On October 1 of the current year, the company borrowed $13,200 from a local bank and signed a one-year, 12 percent note for that amount. The principal and interest are payable on the maturity date.
Dr Interest expense 396
Cr Interest payable 396
c. Depreciation of $3,000 must be recognized on a service truck purchased in July of the current year at a cost of $24,000.
Dr Depreciation expense 3,000
Cr Accumulated depreciation 3,000
d. Cash of $3,600 was collected on November of the current year, for services to be rendered evenly over the next year beginning on November 1 of the current year. Unearned Service Revenue was credited when the cash was received.
Dr Unearned service revenue 600
Cr Service revenue 600
e. On November 1 of the current year, Zimmerman paid a one-year premium for property insurance, $9,960, for coverage starting on that date. Cash was credited and Prepaid Insurance was debited for this amount.
Dr Insurance expense 1,660
Cr Prepaid insurance 1,660
f. The company earned service revenue of $4,200 on a special job that was completed December 29 of the current year. Collection will be made during January of the next year. No entry has been recorded.
Dr Accounts receivable 4,200
Cr Service revenue 4,200
g. At December 31 of the current year, wages earned by employees totaled $13,700. The employees will be paid on the next payroll date in January of the next year.
Dr Wages expense 13,700
Cr Wages payable 13,700
h. On December 31 of the current year, the company estimated it owed $490 for this year's property taxes on land. The tax will be paid when the bill is received in January of next year.
Dr Property taxes expense 490
Cr Property taxes payable 490
2) Assets = Liabilities + Stockholders’ Revenues - Expenses = Net
Equity Income
a. na - + + na +
b. na - - na - -
c. - na - na - -
d. na - + + na +
e. - na - na - -
f. + na + + na +
g. na + - na - -
h. na + - na - -
Use the CAFR information for the City of Salem (Illustrations 2-2 through 2-16) to find the following items. in your answer, both indicate which financial statement contained the information and the item and the dollar amount.
Information Item Statement $ Amount
Ex Amounts due from other governments to support
governmental activities Balance Sheet—
Governmental Funds $1,328,448
A. Total capital outlay for the courthouse renovation
B. Total cash paid for capital additions for the solid
waste fund
C. Interest paid (not expense) on general long-term debt
D. Interest paid (not expense) on water department debt
E. Capital asset (net) for the government's component units
F. Contributions received for use by the private-purpose trust
G. Noncurrent liabilities associated with governmental
activities that are due in more than one year
H. Noncash contributions of capital assets for the water
department
Answer:
attached below
Explanation:
using the CAFR information the information required is tabulated as attached below
The net assets statement reports the liability, the net assets account balance for the government activities and also reports the assets