Answer:
The market rate of interest is the same as the contract rate of interest.
Explanation:
A bond can be defined as a fixed income instrument that firms use as a source of longer-term funding or loans.
The par value of a bond is its face value and it comprises of its total dollar amount as well as its maturity value. Also, the par value of a bond gives the basis on which periodic interest is paid.
A bond is issued at par value when the market rate of interest is the same as the contract rate of interest. This simply means that, a bond would be issued at par (face) value when the bond's stated rated is significantly equal to the effective or market interest rate on the specific date it was issued.
In Economics, bonds could either be issued at discount or premium.
Hence, a bond that is being issued at a discount has its stated rate lower than the market interest rate, on the specific date of issuance. Also, a bond that is being issued at a premium, has its stated rate higher than the market interest rate on the specific date of issuance.
Generally, bond price is inversely proportional to its interest rate, thus, when interest rates are high, bond prices would be low and when interest rates are low, bond prices are high.
Determining whether a firm's financial position is improving or deteriorating requires analyzing more than the ratios for a given year. Trend analysis is one method of examining changes in a firm's performance over time.
a. True
b. False
Answer:
The answer is true.
Explanation:
It is true. Trend analysis can be used to examine changes in a firm's performance over time.
Trend analysis is a method adopted in technical analysis which tends to predict the future stock price movements based on recently observed trend data. Trend analysis is based on past occurrences. And traders or investors used this past experience to predict the future price
Mark writes a check to Sally, intending to use it to pay Sally for babysitting Mark's daughter next week. Sally arrives at Mark's house for a visit, and while Mark is in the bathroom, Sally discovers the check on Mark's desk and takes it. She endorses the check over to Bob in exchange for a used tennis racket. Mark ends up not hiring Sally to babysit. When he discovers the check is missing, he stops payment on it. Bob sues Mark to enforce payment of the check. Which of the following statements is true? a. Mark must pay Bob the amount of the check b. Mark could assert the defense of fraud in the inducement against Bob c. Mark can assert the defense of lack of delivery against Bob d. Mark can assert the defense of failure of consideration against Bob
Answer:
Bob sues Mark to enforce payment of the check
d. Mark can assert the defense of failure of consideration against Bob.
Explanation:
Failure of consideration means that there was no consideration since intended contract between Mark and Sally which would have established the consideration upon Sally's performance was frustrated. The contract did not take effect. It is an established point in contract law that there must be consideration for a contract to be valid and enforceable. Since the contract was not finalized and no performance of consideration was carried out by Sally, she had no legal right to collect Mark's check and endorse it to Bob.
Moreover, any potential contract would have been between Bob and Sally and not Mark. So, Mark can plead failure of consideration in the relationship between him and Sally, thus rendering the check's endorsement to a third party, null and void.
The Acme Aircraft Seat Company produces aircraft seats and is able to assemble 10 seats in 30 minutes using four workers. The single-factor productivity of the firm is ____ seats per labor hour.
Answer:
The productivity of the firm = 5
Explanation:
Total number of seats that is assembled in 30 min = 10 seats
Therefore total number of seats assembled in 1 hr = 10 x (60/30) = 20 seats
Total labor hours required for 20 seats = 4 workers x 1hr = 4hrs
The Single-factor productivity = output / labor hours
The Single-factor productivity = 20 seats / 4 hrs
The Single-factor productivity = 5 seats per labor hr
A drought decreases the supply of agricultural products, which means that at any given price a lower quantity will be supplied; conversely, especially good weather would shift the __________________ . Group of answer choices
Answer:
supply curve to the right.
Explanation:
A drought decreases the supply of agricultural products, which means that at any given price a lower quantity will be supplied; conversely, especially good weather would shift the supply curve to the right. Drought refers to a period characterized by little or no rainfall in a geographical location over a specific period of time. When there's a drought, the production of agricultural products will be very much affected, thereby causing a decrease in the quantity of farm products.
On the other hand, a good weather would cause an increase in the quantity of farm products and as a result of this, the supply curve would shift rightward because there's enough product to meet the customer's demands or needs.
Pocahontas School District, an independent public school district, financed the acquisition of a new school bus by signing a note for $90,000 plus interest on the unpaid balance at 6%. Annual principal payments of $30,000, plus interest, are due each July 1. Assuming that the District maintains its books and records in a manner that facilitates the preparation of the fund financial statements, the appropriate entry in the General Fund at the date of acquisition is:_________.
A) Debit Expenditures $90,000; Credit Notes Payable $90,000.
B) Debit Fixed Assets $90,000; Credit Notes Payable $90,000.
C) Debit Expenditures $90,000; Credit Other Financing Sources $90,000.
D) Debit Fixed Assets $90,000; Credit Other Financing Sources $90,000.
Answer:
C) Debit Expenditures $90,000; Credit Other Financing Sources $90,000
Explanation:
A General fund can be defined as the primary fund which are often used by a government entity and they are used to help record all inflows and outflows of resources that are not associated with funds which are for special purpose.
Therefore ,the entry in the General Fund at the date of acquisition will be :
Debit Expenditures $90,000
Credit Other Financing Sources $90,000
Reason been that the acquisition of the new school bus was been financed by signing a note for $90,000 in which the $90,000 is an expenditure which was debited while Other Financing Sources of $90,000 was been credited.
1. A complaint of sexual harassment by a part-time worker in a hardware business was upheld when the Tribunal found that the employer had failed to take sufficient action in relation to the employee's report of inappropriate behaviour. The alleged sexual harassment included kissing, touching her breasts and leg, persistent requests to have a drink outside work hours despite an ongoing refusal, asking for cuddles, telephoning her at home and making repeated unsolicited sexual remarks. Based on any four ethical theories, explain how these acts constitute unethical behaviours at the workplace
Answer:
Sexual harassment is an unethical behavior both at or outside workplace and this can be explained using these ethical theories; DEONTOLOGY, UTILITARIANISM, INDIVIDUAL CHARACTER ETHICS, WORKPLACE INDIVIDUAL ETHICS
1. DEONTOLOGY: This ethical theory states that a person's actions are either bad or good depending on sets of rules, actions are morally right if it is in accordance with the rules, rights et cetera. in this case the behavior does not follow any rules and there is no right given to anybody to harass a woman. This theory shows that these acts were unethical.
2. UTILITARIANISM: this theory supports actions and behaviors that brings happiness and joy to others and frowns at actions that brings sadness and unhappiness to people around us. In this case the employee is harassed which makes her unhappy so this theory labels sexual harassment as an unethical behavior.
3. INDIVIDUAL CHARACTER ETHICS: It says that there are certain qualities of a person that determine their ethics, this includes; gratitude, benevolence, respect but in this case the individual has no such traits present in him because of his disrespect towards a woman, so this theory shows how unethical those acts were.
4. WORKPLACE INDIVIDUAL ETHICS: It says that the development or presence of certain traits show the work ethics of an individual and the traits are honor, work pride, trustworthiness but in this case he has proved that there is no such trait present in him so it constitute unethical behavior at workplace.
a coupon is an example of:
-inflation
-an incentive
-consumerism
-macroeconomics
Answer:
an incentive
Explanation:
A coupon is an example of an incentive. A coupon is usually a piece of paper that states a costumer can get a discount on a certain product. When someone finds a coupon that allows them to save money on a desired product, they will be encouraged to buy it. Therefore, the coupon acts as incentive to get costumers to buy more products.
Based on the information provided, what rental rates would you include in your forecast/proforma model from the tenants?
Select the answer and briefly explain your rationale
Contract rental rates
Market rental rates
A blend of contract and market rental rates
Insufficient information to determine
Answer:
Insufficient information to determine
Explanation:
The question makes reference to information provided as a basis for making a decision. But, there is no information provided. This makes it impossible to select any rental rates, whether Contract rental rates, Market rental rates, or a blend of contract and market rental rates, to include in the forecast or proforma model from the tenants. So, the conclusion is that there is insufficient information to determine.
Ms. Jones, the CEO of First Bank, is hoping that her employees will buy into a new performance review system. Which of the following statements would be most likely to help Ms. Jones achieve buy-in?
1. I would like the new performance system im plemented by Monday. Please see that it is done.
2. The new performance system starts on Tuesday of next week. Be prepared to use it.
3. We are implementing a new performance system effective Monday.
4. We will have a meeting Friday with HR to learn how to use it We need to continue to work on the new performance system.
Answer:
The correct answer is the option 4: We will have a meeting Friday with HR to learn how to use it. We need to continue to work on the new performance system.
Explanation:
To begin with, if Ms. Jones is looking forward to get her employees to buy the new system then she must tell them that they are going to use and it is important for the company and even more for them to have it in order to use it later because that will bring more benefits for everyone. Therefore that when she tells them that there is a meeting soon that will focus in the fact of learning how to use it and that it will show the importance of using it, the employees will feel the necessity of acquiring it for that reason.
Prepare the journal entry for the issuance of these bonds. Assume the bonds are issued for cash on January 1, 2017. Garcia Company issues 9.00%, 15-year bonds with a par value of $400,000 and semiannual interest payments. On the issue date, the annual market rate for these bonds is 7.00%, which implies a selling price of 115 3/4.
Answer:
Journal Entries for jan 1, 2017
Explanation:
Face value of bond = 400,000
Proceeds = 400,000 X 1.1575 = 463,000
Premium = 463,000 - 400,000 = 63,000
Jan 1, 2017
Debit Credit
Cash 463,000
Premium 63,000
Bond payable 400,000
When inventory declines in value below original (historical) cost, and this decline is considered other than temporary, what is the maximum amount that the inventory can be valued at
Answer:
Net realizable value
Explanation:
Net realizable value is the value gotten after taken out purchases from the estimated selling price of an inventory. This means that the net realizable value on an inventory at disposal is higher than the cost when it was originally purchased. It is to be noted that an increase in the value of inventory are recognized at the point of sale.
However, with regards to the above, inventory may be recorded at net realizable value if there are no tangible costs associated with disposal, there exist a controlled market with a price that is already quoted or the inventory is made up of gold, silver or general precious metals and agricultural products.
Which of the following is a substantive culture-changing action that a company's managers can undertake to alter a problem culture?
A. Identify aspects of the present culture that pose problems.
B. Revise policies and procedures in ways that will help drive cultural change and replace senior executives who are resisting and obstructing needed organizational and cultural changes.
C. Shift from decentralized to centralized decision-making so as to give senior executives more authority and control in driving cultural change.
D. Make a concerted effort to turn the company's core competencies into distinctive competencies.
E. Empower employees to adopt whatever new work practices they believe will be an improvement.
Answer:
B. Revise policies and procedures in ways that will help drive cultural change and replace senior executives who are resisting and obstructing needed organizational and cultural changes.
Explanation:
Culture of a company are the accepted ways of doing things on a daily basis with a view of achieving organisational goals. It includes the way employees interact with one another and their customers, procedures carrying out tasks, and so on.
The management of the company are the drivers of company culture, so a substantiative culture-changing action that can be taken to solve a problem culture will include replacing senior executives who are resisting and obstructing needed organizational and cultural changes, and revising policies and procedures in a way that will drive culture change
Pro forma income statement
Austin Grocers recently reported the following 2016 income statement (in millions of dollars):
Sales $700
Operating costs including depreciation 500
EBIT $200
Interest 40
EBT $160
Taxes (40%) 64
Net income $96
Dividends $32
Addition to retained earnings $64
For the coming year, the company is forecasting a 20% increase in sales, and it expects that its year-end operating costs, including depreciation, will equal 75% of sales. Austin's tax rate, interest expense, and dividend payout ratio are all expected to remain constant.
What is Austin's projected 2017 net income? Enter your answer in millions. For example, an answer of $13,000,000 should be entered as 13. Round your answer to two decimal places.
$ million
What is the expected growth rate in Austin's dividends? Do not round your intermediate calculations. Round your answer to two decimal places.
%
Answer:
Austin Grocers
1. Projected 2017 Net Income
= $102 million
2. Expected Growth Rate in Dividends
= 6.25% (2/32 x 100)
Explanation:
a) Income statement (in millions of dollars):
2016 2017
$'millions $'millions
Sales $700 $840
Operating costs
including depreciation 500 630
EBIT $200 $210
Interest 40 40
EBT $160 $170
Taxes (40%) 64 68
Net income $96 $102
Dividends $32 $34
Addition to
retained earnings $64 $68
b) Sales for 2017 = $840 million ($700 x 1.2)
c) Operating costs for 2017 = $630 million ($840 x75%)
d) Taxes for 2017 = $68million ($170 x 40%)
e) Dividend payout ratio = Dividend/Net Income = 33.33%
f) Growth Rate in Dividends = Dividend Increase/Previous year's dividend x 100 = 6.25% (2/32 x 100)
There is demand for and supply of dollars and a demand for and supply of pesos. Under a flexible exchange rate system, if income growth in the United States is greater than income growth in Mexico, then the
Answer:
There is demand for and supply of dollars and a demand for and supply of pesos. Under a flexible exchange rate system, if income growth in the United States is greater than income growth in Mexico, then the dollar would increase its value over the peso.
Explanation:
Given that in the situation in question the quantities supplied and demanded of both currencies remain stable, in principle there should be no valuation of one over the other for reasons of supply and demand.
Now, since the economic growth in the United States that sustains the value of the dollar is greater than that growth in Mexico that sustains the value of the peso, the greater the value of the dollar in international markets. This will necessarily imply a higher valuation of the American currency, which will widen the gap in the exchange rate with respect to the peso, which instead will remain stable in global markets.
g Dybala Corporation produces and sells a single product. Data concerning that product appear below: Per Unit Percent of Sales Selling price $ 110 100 % Variable expenses 66 60 % Contribution margin 44 40 % The company is currently selling 5,060 units per month. Fixed expenses are $180,000 per month. The marketing manager believes that a $6,300 increase in the monthly advertising budget would result in a 200 unit increase in monthly sales. What should be the overall effect on the company's monthly net operating income of this change
Answer:
Effect on income= $2,500 increase
Explanation:
Giving the following information:
Contribution margin= $44
The marketing manager believes that a $6,300 increase in the monthly advertising budget would result in a 200 unit increase in monthly sales.
To calculate the effect on income, we need to use the following formula:
Effect on income= increase in total contribution margin - increase in fixed costs
Effect on income= 200*44 - 6,300
Effect on income= $2,500 increase
Target profit a.are when sales and costs are exactly equal. b.can be calculated by modifying the break-even equation. c.equals differential costs. d.cannot be calculated in cost-volume-profit analysis.
Answer:
b. can be calculated by modifying the break-even equation.
Explanation:
As the name implies, target profit can be explained to be the certain amount a business enterprise or a business organisation targets to hit at the end of its sales or at the end of her business dealings.
It can be easily seen in a cash flow planning as it is once modified to approximate cash flow, and also used for revealing expected results to investors and lenders. In all that it is been used for, in the scenario above, it also can be calculated by modifying the break-even equation, and deriving more conservative budgeting packages in business development too.
Adjust the contribution margin per unit and units sold based on an expected sales promotion.
Alter the fixed cost total and the contribution margin per unit for the effects of outsourcing production.
Alter the contribution margin for the effects of changing to a just-in-time production system.
If there is continually a large unfavorable variance between the target and actual profit, it may be necessary to examine the system used to derive the target profit,
Assume that taxes are constant. If the government borrows $17 billion in new funds and has a budget deficit of $35 billion, then the central bank has to:
Answer:
increase the money supply by $18 billion.
Explanation:
Data provided in the question
The Borrowed amount by the Government = $17 billion
Budget deficit = $35 million
Based on the above information
The central bank has to raise the money supply by $18 million i.e come form
= Budget deficit - the borrowed amount
= $35 million - $17 million
= $18 million
Hence, the supply is increased by $18 million
The Supplies account had a balance at the beginning of year 3 of $8,000 (before the reversing entry). Payments for purchases of supplies during year 3 amounted to $50,000 and were recorded as expense. A physical count at the end of year 3 revealed supplies costing $14,500 were on hand. Reversing entries are used by this company. The required adjusting entry at the end of year 3 will include a debit to:
Answer:
The required adjusting entry at the end of year 3 will include a debit to:
Supplies Expenses Account of $43,500 ($8,000 + 50,000 - 14,500), and a credit to Supplies Account in the sum of $43,500.
Explanation:
Adjusting entries are made at the end of an accounting period to bring the accounts in line with the accrual concept, which requires that expenses and revenue should be recognized in the period they are incurred or earned.
This implies that transactions should not be based solely on when cash is received or payment made. Expenses incurred but not yet paid should be recognized in the accounts of the period. Revenue earned but not yet received in cash should be accounted for in the period when the revenue is earned. Expenses paid in advance should not be recognized in determining net income. Revenue collected but not yet earned should not be included in the period's accounts for determining net income. Finally, non-cash expenses (depreciation) should be recognized in the period they are incurred.
Which of these countries has a command economy?
A. Cuba
B. France
C. United States
D. India
Answer:
A. Cuba
Explanation: Command economy , simply means planned economy
Some other countries with command economies are;
North KoreaThe former Soviet UnionA Production Facility has produced 515,000 products and would like to allocate these products to their customers. Given the following requested customer demand, calculate how much of the EXCESS product should be sent to Customer 1.
Customer 1 Demand 115,000
Customer 2 Demand 110,000
Customer 3 Demand - 95,000
Customer 4 Demand - 170,000
Customer 5 Demande 10.000
A. 2.300
B. 400.000
C. 25.000
D. 3,450
E. 15.000
Answer:
D
Explanation:
To allocate the excess , a ratio formula shall be used to allow fairness and accuracy .
Workings
Customer 1 demand - 115,000
Customer 2 demand- 110,000
Customer 3 demand - 95,000
Customer 4 demand- 170,000
Customer 5 demand- 10,000
Total 500,000
Excess production = (515000 -500000) = 15,000
Share allocated to customer 1 = Customer 1 demand / total demand * Excess production
115,000/500000*15000= 3,450
The number of Excess product that should be sent to Customer 1 is 3,450 product.
Here, we are to calculate the number of Excess product that should be sent to Customer 1.
Now, to be able to allocate the excess to Customer 1, we will use a ratio formula allow fairness and accuracy .
Details
Customer 1 Demand - 115,000
Customer 2 Demand - 110,000
Customer 3 Demand - 95,000
Customer 4 Demand- 170,000
Customer 5 Demand - 10,000
Total 500,000
The excess production = 515,000 - 500,000
The excess production = 15,000
Calculation of shares to be allocated to Customer 1
Share allocated to customer 1 = (Customer 1 demand / Total demand) * Excess production
Share allocated to customer 1 = (115,000/500,000) * 15,000
Share allocated to customer 1 = 0.23 * 15,000
Share allocated to customer 1 = 3,450
Therefore, the number of Excess product that should be sent to Customer 1 is 3,450 product.
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Sheridan Corp.’s sales slumped badly in 2020. For the first time in its history, it operated at a loss. The company’s income statement showed the following results from selling 550,500 units of product: sales $2,752,500, total costs and expenses $2,855,400, and net loss $102,900. Costs and expenses consisted of the amounts shown below.
Total Variable Fixed
Cost of goods sold $2,140,000 $1,590,000 $550,000
Selling expenses 250,000 92,000 158,000
Administrative expenses 210,000 68,000 142,000
$2,600,000 $1,750,000 $850,000
Management is considering the following independent alternatives for 2018.
1. Increase unit selling price 20% with no change in costs, expenses, and sales volume.
2. Change the compensation of salespersons from fixed annual salaries totaling $150,000 to total salaries of $60,000 plus a 5% commission on sales.
Required:
a. Compute the break-even point in dollars for 2017. (Round final answer to 0 decimal places.)
b. Compute the contribution margin under each of the alternative courses of action. (Round final answer to 0 decimal places.)
Answer and Explanation:
a. Here we will follow some steps to reach break-even point in dollars for 2017 is shown below:-
Step 1
Selling price per unit = Sales ÷ Number of units
= $2,752,500 ÷ $550,500
= $5
Step 2
Variable cost per unit = Total of variable ÷ Number of units
= $1,750,000 ÷ $550,500
= $3
Step 3
Contribution margin ratio = (Selling price per unit - Variable cost per unit) ÷ Selling price per unit
= ($5 - 3) ÷ $5
= 0.4
and finally
Break even point in dollars = Fixed cost ÷ Contribution margin ratio
= $850,000 ÷ 0.4
= $2,125,000
b. As per the situation the solution of contribution margin under each of the alternative courses of action is below:-
According to the 1 alternative
Selling price per unit = $5 × 1.20
= $6
Contribution margin ratio = (Selling price per unit - Variable cost per unit) ÷ Selling price per unit
= ($6 - 3) ÷ $6
= 0.5
or
= 50%
According to the 2 alternative
Variable cost per unit = $3 + $5 × 5%
= $3.25
Contribution margin ratio = (Selling price per unit - Variable cost per unit) ÷ Selling price per unit
= ($5 - $3.25) ÷ $5
= 0.35
or
= 35%
For each of the following, compute the future value (Do not round intermediate calculations and round your final answers to 2 decimal places. (e.g., 32.16)): Present Value Years Interest Rate Future Value $ 2,250 11 13 % $ 8,752 7 9 76,355 14 12 183,796 8 6
Answer:
1. $8,630.69
2. $15,999
3. $373,155.46
4. $292.942.90
Explanation:
The formula for calculating future value = P(1 + r)^n
P = Present value
R = interest rate
N = number of years
1. $ 2,250 (1 + 0.13)^11 = $8,630.69
2. 8,752 (1 + 0.09)^7 = $15,999
3. 76,355 (1 + 0.12)^14 = $373,155.46
4. 183,796(1 + 0.06)^8 = $292.942.90
I hope my answer helps you
For each of the following, the future value can be computed as:
1. $8,630.69
2. $15,999
3. $373,155.46
4. $292.942.90
The worth of a present asset at some point in the future based on an estimated rate of growth is known as future value (FV). For investors as well as financial planners, the future value is crucial because they use it to predict the amount an investment made now is going to be worth throughout the future. Investors may make wise investment choices based on their projected demands by knowing the future worth.
future value = P(1 + r)^n
P = Present value
R = interest rate
N = number of years
1. $ 2,250 (1 + 0.13)^11 = $8,630.69
2. 8,752 (1 + 0.09)^7 = $15,999
3. 76,355 (1 + 0.12)^14 = $373,155.46
4. 183,796(1 + 0.06)^8 = $292.942.90
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The information related to interest expense of classic music, inc. is given below:
Net Income $265,000
Income tax expense 105,000
Interest expense 66,000
Based on the above data, which of the following is the times- interest- earned ratio? (round the final answer to two decimal places)
A) 6.61 times
B) 4.15 times
C) 5.02 times
D) 4.02 times
Answer:
The times- interest- earned ratio is 6.61 times. The right answer is A.
Explanation:
In order to calculate the times- interest- earned ratio we would have to make the following calculation:
times- interest- earned ratio=Income before interest and taxes/Interest expense
According to given data
Income before interest and taxes=Net Income+Income tax expense +Interest expense
Income before interest and taxes=$265,000+$105,000+$66,000
Income before interest and taxes=$436,000
Therefore, times- interest- earned ratio=$436,000/$66,000
times- interest- earned ratio= 6.61 times
Q 7.39: In a small-town retail store, the sales clerk is responsible for counting the cash in the cash register and comparing it to the cash register tape. The clerk then takes the cash and tape to the accountant, who verifies the count, prepares the deposit slip for the bank, and records the entry in the journal. Which cash receipt control is the company most in violation of with their current system
Answer: b.segregation of duties
Explanation:
Segregation of duties as an internal control ensures that there are multiple people doing activities that if left to one person can leave the company at the risk of fraudulent activity. It also helps to reduce the incidence of errors in reporting because more than one person will be cross-checking transactions.
There should be more segregation of duties in this small-town retail store. For instance, the sales clerk should not be responsible for both the counting and comparison to the cash register tape because they could have omitted sales from the machine and then simply taken the money from the cash when counting. A different person should count the cash to see if it tallies with the cash register tape.
Which of the following generate the type of externality described? Check all that apply. Your roommate, Kate, has bought a puppy that barks all day while you are trying to study economics. A leading software company has decided to increase its research budget for inventing new open-source technologies. Clancy has planted several trees in his backyard that increase the beauty of the neighborhood, especially during the autumn foliage season. The local airport has doubled the number of runways, causing additional noise pollution for the surrounding residents.
Answer:
A negative externality is a cost that a third party incurs from someone else's economic activity. When the third party experiences a beneficial effect, it is called a positive externality.
Requires the government to impose a tax.
EX:
Your roommate, Dmitri, has bought a bird that keeps you up at night with its chirping.
The local airport has doubled the number of runways, causing additional noise pollution for the surrounding residents.
Explanation:
The balance in Discount on Bonds Payable
a. would be added to the related bonds payable to determine the carrying amount of the bonds.
b. would be subtracted from the related bonds payable on the balance sheet.
c. should be reported on the balance sheet as an asset because it has a debit balance.
d. should be allocated to the remaining periods for the life of the bonds by the straight-line method, if the results obtained by that method materially differ from the results that would be obtained by the interest method.
Answer:
b. would be subtracted from the related bonds payable on the balance sheet.
Explanation:
A bond is a fixed income instrument that represents the indebtedness of the borrower to the investor or creditor (bond issuer). They're basically loans that are given to large organizations or government.
This ultimately implies that, when an investor or creditor purchases a bond, an agreed amount of money is being borrowed to the issuer as a loan. Consequently, the bond issuer is expected to pay an interest with a return of principal at maturity to the holder (investor or creditor) of the bond.
Hence, bonds payable only arises when a company issues bonds so as to generate cash for its business and plans. Thus, the company is a borrower as the bond issuer while the holder of the bond is a debt-holder (investor or creditor). This further would mean that, the company becomes liable to the investor. Therefore, bonds payable should be recorded on the long-term liability side of the balance sheet being used by the company.
Bonds are issued at par or premium or discount and as such bond issuer records the face value of the bond as bonds payable.
Additionally, the balance in discount on bonds payable would be subtracted from the related bonds payable on the balance sheet because it decreases the value of the bonds.
If the straight-line depreciation method is used, the annual average investment amount used in calculating the accounting rate of return is calculated as (beginning book value + ending book value)/2.
a. True
b. False
Answer:
The answer is true
Explanation:
Accounting Rate of Return is a financial ratio used in capital budgeting decision making. It is the ratio of estimated accounting profit(net income) of a project to the average investment made in the project.
And average investment is calculated as the sum of the beginning and ending book value of the project/investment divided by 2
Depreciation is termed as the phase of the value of the assets when they keep on decreasing year by year or monthly. It is caused due to the overutilization of the assets for the production function of the firm.
The correct answer is true
An Accounting Rate of Return (ARR) is a financial ratio that is used to make capital budgeting decisions. It is the ratio of a project's estimated retained earnings (retained earnings) to a project's average investment.
Investment is equal to the sum of the project/initial investments and ending book values divided by two.
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Mackinaw Inc. processes a base chemical into plastic. Standard costs and actual costs for direct materials, direct labor, and factory overhead incurred for the manufacture of 74,000 units of product were as follows: Standard Costs Actual Costs Direct materials 185,000 lbs. at $6.00 183,200 lbs. at $5.80 Direct labor 18,500 hrs. at $16.50 18,930 hrs. at $16.90 Factory overhead Rates per direct labor hr., based on 100% of normal capacity of 19,310 direct labor hrs.: Variable cost, $3.10 $56,780 variable cost Fixed cost, $4.90 $94,619 fixed cost Each unit requires 0.25 hour of direct labor. Required:
Answer:
You are missing the requirements. I looked them up and found the following:
Determine the direct materials price variance, direct materials quantity variance, and total direct materials cost variance. Enter a favorable variance as a negative number using a minus sign and an unfavorable variance as a positive number.
Standard Costs Actual Costs
Direct materials 185,000 lbs. at $6.00 183,200 lbs. at $5.80
Direct labor 18,500 hrs. at $16.50 18,930 hrs. at $16.90
Factory overhead Rates per direct labor hr., based on 100% of normal capacity of 19,310 direct labor hrs.:
Variable cost, $3.10 $56,780
variable cost Fixed cost, $4.90 $94,619 fixed cost
Each unit requires 0.25 hours of direct labor
direct materials price variance = AQ x (AP - SP) = 183,200 x ($5.80 - $6) = -$36,640 favorable variance
direct materials quantity variance = SP x (AQ - SQ) = $6 x (183,200 - 185,000) = -$10,800 favorable variance
total direct materials cost variance = (AQ X AP) - (SQ X SP) = (183,200 X $5.80) - (185,000 X $6) = $1,062,560 - $1,110,000 = -$47,440 favorable variance
or
total direct materials cost variance = direct materials price variance + direct materials quantity variance = -$36,640 - $10,800 = -$47,440 favorable variance
Assume you are holding a business meeting with five people, each from a different continent (North America, South America, Europe, Africa and Asia), you being one of them. Which steps would you take to ensure that everyone is comfortable and that communication is good between everyone?
Explanation:
Holding a meeting with people from different cultures can be a big challenge, so it is necessary to organize the meeting to ensure that the different approaches and needs of each person are taken into account by the leader who will conduct the business meeting.
It is necessary to think of ideas, decisions and conduct that make all participants comfortable and are not a factor that interferes with the positive flow of the meeting. It is therefore important to develop cultural intelligence, which is an essential skill for leaders of large companies who wish to operate in the globalized market.
Cultural intelligence can be defined as the ability of a person to relate and work between different cultures, adapting and increasingly developing that intelligence (cultural quotient) in motivational, behavioral and metacognitive aspects. Through cultural intelligence it is possible for the individual to get involved efficiently in any environment, in business it is an essential skill for survival in the global market.
On January 1, 2021, Avondale Lumber adopted the dollar-value LIFO inventory method. The inventory value for its one inventory pool on this date was $310,000. An internally generated cost index is used to convert ending inventory to base year. Year-end inventories at year-end costs and cost indexes for its one inventory pool were as follows: Year Ended Inventory Cost Index December 31 Year-End Costs (Relative to Base Year) 2021 $ 408,450 1.05 2022 420,740 1.09 2023 478,500 1.10 2024 513,585 1.13 Required: Calculate inventory amounts at the end of each year
Answer:
Avondale Lumber
Calculation of Inventory Amounts at the end of each year:
= Inventory cost divided by the Index:
2021: = $408,450/1.05 = $389,000
2022: = $420,740/1.09 = $386,000
2023: = $478,500/1.10 = $435,000
2024: = $513,585/1.13 = $454,500
Explanation:
a) Data and Calculations:
Year Ended Inventory Cost Index Year-End Costs
(Relative to Base Year)
2021 $ 408,450 1.05 $389,000 (408,450/1.05)
2022 420,740 1.09 $386,000 (420,740/1.09)
2023 478,500 1.10 $435,000 (478,500/1.10)
2024 513,585 1.13 $454,500 (513,585/1.13)
b) The conversion of the ending inventory cost to the base year with an index is obtained by dividing the inventory cost by the index. This gives a cost that is relative to the base year.