Answer:
defects per hour = 0.04
units inspected per hour = 50
inspector's salary per hour = $9
cost per undetected defects = $10
a. If the inspector position is eliminated, what will the hourly cost of defects be?
number of defects per hour = 0.04 x 50 = 2
cost of defects = 2 x $10 = $20
b. Should this inspection position be eliminated?
no, because the cost of eliminating the position is higher than the cost of hiring the inspector
c. What is the cost to inspect each unit?
cost to inspect each unit = $9 / 50 = $0.18 per unit
d. Is there benefit (or loss) from the current inspection process? How much?
the benefit of the inspection process = $20 - $9 = $11 per hour, or $11 / 50 = $0.22 per unit
functions of a property manager
A manager is trying to decide whether to purchase a certain part or to have it produced internally. Internal production could use either of two processes. One would entail a variable cost of $17 per unit and an annual fixed cost of $200,000; the other would entail a variable cost of $14 per unit and an annual fixed cost of $240,000. Three vendors are willing to provide the part. Vendor A has a price of $20 per unit for any volume up to 30,000 units. Vendor B has a price of $22 per unit for demand of 1,000 units or less, and $18 per unit for larger quantities. Vendor C offers a price of $21 per unit for the first 1,000 units, and $19 per unit for additional units.
A. If the manager anticipates an annual volume of 10,000 units, which alternative would be best from a cost standpoint? For 20,000 units, which alternative would be best?
B. Determine the range for which each alternative is best. Are there any alternatives that are never best? Which?
TC for 10,000 units TC for 20,000 units
Int. 1: $ Int. 1: $
Int. 2: $ Int. 2: $
Vend A $ Vend A $
Vend B $ Vend B $
Vend C $ Vend C $
Answer:
A. If the manager anticipates an annual volume of 10,000 units, the alternative that would be best from a cost standpoint is Vendor B.
Again, for annual volume of 20,000 units, Vendor B is the best choice.
B. For Process I, it is best within the range of 20,555 and 200,000
For Process 2, the best range is 200,000 and above
Vender A, there is no best range
Vender B, the best range is 1 to 20,555
Vender C, there is no best range
Explanation:
a) Data and Calculations:
Internal Process 1 = $17Q + $200,000
Internal Process 2 = $14Q + $240,000
Vendor A = $20Q up to 30,000 units
Vender B = $18Q
Vender C = $21*1,000 + $19(Q-1,000)
Calculation of total cost under each alternative:
Internal Vender A Vender B Vender C
Process 1 Process 2
Cost of production:
Variable cost per unit $17 $14 $20 $18 $19
For 10,000 Units:
Fixed costs $200,000 $240,000 0 0 $21,000
Variable cost 170,000 140,000 $200,000 $180,000 $171,000
Total cost $370,000 $380,000 $200,000 $180,000 $192,000
For 20,000 units:
Fixed costs $200,000 $240,000 0 0 $21,000
Variable cost 340,000 280,000 $400,000 $360,000 $361,000
Total cost $540,000 $520,000 $400,000 $360,000 $382,000
Grahame, Inc. has a fiscal year-end of September 30th. On March 1, 2015, Grahame authorized $800,000 in bonds payable; the bonds carry a stated interest rate of 6%, interest to be paid semi-annually on February 28, and August 31st with a term of 12 years. On August 1, 2016, Grahame issued hree-quarters of the bonds at a premium of $25,400.
Prepare the journal entries that would be required relating to the bonds over period March 1, 2015 through September 30, 2016.
Answer:
Grahame, Inc.
Journal Entries:
March 1, 2015:
No journal entry. A memorandum record is made to recognize that $800,000 bonds payable were authorized to be issued, at an interest rate of 6% with a maturity period of 12 years.
August 1, 2016:
Debit Cash $625,400
Credit Bonds Payable $600,000
Credit Bonds Premium $25,400
To record the issue of 3/4 of the $800,000 bonds payable at a premium of $25,400.
September 30, 2016:
Debit Interest Expense $5,647
Credit Interest Payable $5,647
To accrue interest on bonds payable.
Explanation:
a) Data and Calculations:
Authorized bonds payable = $800,000
Rate of interest = 6%
Bonds maturity period = 12 years
Interest payable on the bonds on February 28 and August 31st.
Issued bonds payable = $600,000 ($800,000 * 3/4)
Date of issue = August 1, 2016
Interest Expense = $600,000 * 6% * 2/12 = $6,000
Bonds Premium amortization = $25,400/12 * 2/12 = $353
The interest expense will be reduced by $353 to $5,647 ($6,000 - 353)
Sprinkle Inc. has outstanding 10,000 shares of $10 par value common stock. On July 1, 2020, Sprinkle reacquired 200 shares at $91 per share. On September 1, Sprinkle reissued 80 shares at $102 per share. On November 1, Sprinkle reissued 120 shares at $70 per share. Prepare Sprinkle's journal entries to record these transactions using the cost method.
Answer:
7/1/20
Dr Treasury Stock $18,200
Cr Cash $18,200
9/1/20
Dr Cash $8,160
Cr Treasury Stock $7,280
Cr Paid-in Capital - Treasury Stock $880
1/1/20
Dr Cash $8,400
Dr Paid-in Capital - Treasury Stock $2,520
Cr Treasury Stock
Explanation:
Preparation of Sprinkle's journal entries to record these transactions using the cost method.
7/1/20
Dr Treasury Stock $18,200
(200 shares * $91 per share)
Cr Cash $18,200
(Being To record the reacquired 200 shares)
9/1/20
Dr Cash $8,160
(80 shares * $102 per share)
Cr Treasury Stock $7,280
(80 shares * 91 per share)
Cr Paid-in Capital - Treasury Stock $880
($8,160-$7,280)
(Being To record the reissue of treasury stock)
1/1/20
Dr Cash $8,400
(120 shares * $70per share)
Dr Paid-in Capital - Treasury Stock $2,520
($91- $70 = $21* 120 shares)
Cr Treasury Stock
(120 shares * $91 per share) $10,920
(Being To record the reissue of treasury stock)
Which of the following best describes a problem driven approach to a business opportunity decision process?
O A. An entrepreneur has an idea for a product and searches for a market
O B. An entrepreneur has brainstormed a variety of ideas and prioritized concepts based on industry trends
O C. An entrepreneur has identified a growth area for business
OD. An entrepreneur has found research on a potential hot business trend
O E. An entrepreneur has determined a business to pursue based on industry research
Answer:
I think the answer would be B
Explanation:
because it says An entrepreneur has brainstormed a variety of ideas and prioritized concepts based on industry trends. hope this helps
As a long-term investment at the beginning of the 2018 fiscal year, Florists International purchased 25% of Nursery Supplies Inc.'s 16 million shares for $68 million. The fair value and book value of the shares were the same at that time. During the year, Nursery Supplies earned net income of $52 million and distributed cash dividends of $.75 per share. At the end of the year, the fair value of the shares is $64 million.Required: Prepare the appropriate journal entries from the purchase through the end of the year.
Answer:
1. Dr Investment in Nursery supplies common share $68 million
Cr Cash $68 million
2. Dr Investment in Nursery supplies common share $13 million
Cr Investment Revenue $13 million
3.Dr Cash $3 million
Cr Investment in Nursery supplies common share $3 million
4. No Journal entry
Explanation:
Preparation of the appropriate journal entries from the purchase through the end of the year.
1. Dr Investment in Nursery supplies common share $68 million
Cr Cash $68 million
2. Dr Investment in Nursery supplies common share $13 million
Cr Investment Revenue $13 million
(25%*$52 million )
3.Dr Cash $3 million
Cr Investment in Nursery supplies common share $3 million
(16 million shares *25%*$.75 per share)
4. No Journal entry is required to record the change in fair value
19) Which of the following best describes horizontal analysis? A) calculating key ratios to evaluate performance B) comparing a company's financial statements with other companies C) comparing financial statement amounts from year to year for the same company D) expressing each financial statement amount as a percentage of a budgeted amount
Answer:
C) comparing financial statement amounts from year to year for the same company
Explanation:
Horizontal analysis refers to an analysis of the items in the financial statements that should be compared for a period of time. It basically used to see the situation of the trends how it goes whether it is increase or decrease. For using this, the two or more periods financial statements are required
Therefore according to the given options, the option c is correct
Insurance company A and B both are life insurance companies that pay claims to a designated beneficiary upon death of an insured life. Company A insures 10,000 lives and expects to receive 525 claims this year. Company B insures 8,700 lives and expects to receive 410 claims this year. The actual number of claims for company A will range 500 < 550. The actual number of claims for company B will range from 369 < 451. Who faces the most objective risk
Answer:
Company B will faces the most objective risk
Explanation:
Company A: As Company A, insures 10,000 lives and expects to receive 525 claims this year.
They will end up saving 947,500,000 and paying 52,500,000 (525 claims*100,000), considering each claim value to be 100,000. Here goes the calculation:
10,000 x 100,000 = 1,000,000,000
1,000,000,000 - 52,500,000 = 947,500,000.
Company B: As Company B, insures 8,700 lives and expects 410 claims this year.
They will end up saving 829,000,000 and paying 41,000,000 (410 claims x 100,000), considering each claim value to be 100,000. Here goes the calculation:
8700 x 100,000 = 870,000,000
870,000,000 - 41,000,000 = 829,000,000.
Hence, the margin of profit is good for company A. Company B will have the face the risk more.
Piekos Corporation incurred $90,000 of actual Manufacturing Overhead costs during June. During the same period, the Manufacturing Overhead applied to Work in Process was $92,000. The journal entry to record the application of Manufacturing Overhead to Work in Process would include a:
Answer:
C. credit to Manufacturing Overhead of $92,000
Explanation:
The journal entry for the application of Manufacturing to Work in Process amounting to $92,000 would be as follows:
Dr. ($) Cr. ($)
Work in Process 92,000
Manufacturing Overhead 92,000
The other options are incorrect either due to wrong particular used or due to incorrect amount such as in option (b) where the Debit to Work in Process is correct but the amount $90,000 is wrong. Hence, the option (c) Credit to Manufacturing Overhead of $92,000 is the correct answer.
Name at least 4 of the sources of ethical issues
Answer:
Religion:
Culture:
Law:
Corresponds to Basic Human Needs:
Credibility in the Public:
Credibility with the Employees:
Better Decision Making:
Profitability:
Answer:
Religion:
Culture:
Law:
Basic Human Needs
Explanation:
Ethical challenges and their attendant dilemmas may be caused by failure of personal mentality problems with personal values and organizational goals; organizational goals versus social values and harmful, but popular products.
What Does Ethical Issues Mean?
Ethical issues happen when a given decision, scenario or activity creates a problem with a society's moral principles These conflicts occasionally legally dangerous, since some of the possible ways to solve the issue might breach a particular law.
hope this helps!
-Tobie
Automation Inc. is a company that provides wireless telecommunications network in several cities in the Midwest region, and the company plans to know more about its customers. The company found that one of his customers has a short customer history of 35, an above-average purchase amount of 75, a low repurchase desirability of 25, a weak product preference of 20, and the customer does not recommend the company's services to potential customers.
Required:
Based on the values provided, what is this customer's loyalty index?
Answer:
2,625
Explanation:
The customer's loyalty index is calculated by multiplying the customer's average purchase amount by the average purchasing frequency. Since both of these values are provided to us in the question we can simply go ahead and multiply them together to get his/her loyalty index.
35 * 75 = 2,625
Finally, we can see that the loyalty index of the customer in question is 2,625
Tom Johnson Manufacturing intends to increase capacity through the addition of new equipment. Two vendors have presented proposals. The fixed costs for proposal A are $50,000, and for proposal B, $70,000. The variable cost for A is $12.00, and forB, $10.00. The revenue generated by each unit is $20.00.a) If the expected volume is 8,500 units, _______(proposal A or proposal
b) with a total profit = $______ should be chosen(enter your response as a whole number).
Answer:
For 8,500 units, proposal A provides a higher income ($3,000).
Explanation:
Giving the following information:
Proposal A:
Fixed cost= $50,000
Unitary cost= $12
Proposal B:
Fixed cost= $70,000
Unitary cost= $10
We need to choose the proposal with the higher income if 8,500 units are produced.
Proposal A:
Net income= 8,500*(20 - 12) - 50,000
Net income= $18,000
Proposal B:
Net income= 8,500*(20 - 10) - 70,000
Net income= $15,000
For 8,500 units, proposal A provides a higher income ($3,000).
Toyna Recruitz is an organization that allows its employees to work from home. Most of the interaction between the employees and the organization takes place through email. Moreover, the organization is able to maintain increased employee performance and satisfaction. Identify the work option offered by Toyna Recruitz to its employees.
Answer:
I DONT KNOW
Explanation:
BRANLIEST PLEASE, THIS ANSWER WORKS
You are the director of marketing. Your department has been doing well, but the company as a whole has been losing revenue steadily each quarter. In an effort to stay in business, the company is reducing the salaries of all employees by 15 percent. You need to inform your employees. Your employees are expecting that there will be a pay reduction and unanimously voted to reduce salaries rather than fire employees to balance the budget.
Which outline would be most appropriate in this situation?
I. Thank employees for being willing to make a sacrifice for the good of the company
II. Inform the employees they will receive a 15% pay cut
III. Restate the facts of the company's financial situation
IV. Explain
A. The reasons why the company needs to take drastic action
B. The benefits of the company's strategy
V. Close with a forward-looking statement.
I. State the facts of the company's financial situation
II. Explain
A. The reasons the company needs to take drastic action
B. The benefits of the company's strategy
III. Inform the employees they will receive a 15% pay cut
IV. Close with a forward-looking statement
I. State the facts of the company's financial situation
II. Provide alternatives the company considered
A. Unemployment
B. Bankruptcy
III. Inform the employees they will receive a 15% pay cut
Answer:
I. Thank employees for being willing to make a sacrifice for the good of the company.
II. State the facts of the company's financial situation.
III. Inform employees that they will receive a 15% pay cut.
IV. Close with forward looking statement.
Explanation:
The company's financial situation has led the managers to decide for a pay cut instead of lay off to improve the financial position of the company and stay in the budget. The company should appraise employees that they understand the company's situation and are willing to accept the pay cut. The director should inform employees about the current financial situation and provide details about the pay cut plan. The email should close with a forward looking statement and a statement that as soon as the situation of company gets better the employees will receive full salaries as always.
Consider the recorded transactions below.
Debit Credit
1. Accounts Receivable 8,400 Service Revenue 8,400
2. Supplies 2,300 Accounts Payable 2,300
3. Cash 10,200 Accounts Receivable 10,200
4. Advertising Expense 1,000 Cash 1,000
5. Accounts Payable 3,700 Cash 3,700
6. Cash 1,100 Deferred Revenue 1,100
Post each transaction to T-accounts and compute the ending balance of each account. The beginning balance of each account before the transactions is:
Cash, $2,700;
Accounts Receivable, $3,500;
Supplies, $330;
Accounts Payable, $2,800;
Deferred Revenue, $230.
Service Revenue and Advertising Expense each have a beginning balance of zero.
Answer:
The ending balance of each account after the transactions is:
Cash, $9,300;
Accounts Receivable, $1,700;
Supplies, $2,630;
Accounts Payable, $1,400;
Deferred Revenue, $1,330.
Service Revenue and Advertising Expense each have an ending balance of zero.
Explanation:
Note: See the attached excel file for the T-accounts and computation of the ending balance (in red color).
The Service Revenue and Advertising Expense each have an ending balance of zero because they are to bee transferred to the income statement of the period. The income statement as an abridged version can be shown as follows:
Income statement (Abridged)
For the Period ...
Particulars $
Service Revenue 8,400
Advertising Expense (1,000)
Net income 7,400
Patterson Corporation expects to incur $70,000 of factory overhead and $60,000 of general and administrative costs next year. Direct labor costs at $5 per hour are expected to total $50,000. If factory overhead is to be applied per direct labor hour, how much overhead will be applied to a job incurring 20 hours of direct labor
Answer:
$140
Explanation:
With regards to the above, since the factory overhead is to be applied per direct labor hour
= [$70,000 ÷ ($50,000 ÷ $5) 20 hours]
= $70,000 ÷ 10,000 × 20 hours
= $7 × 20 hours
= $140
Therefore, $120 will be applied to job incurring 20 hours of direct labor
Question 2
What was the opening price of Dow Jones Industrial Average on Mar 28, 2019 in the format of XXXXX.XX?
Answer:
21,062.96
I believe
jsis9w9w9wowiwjw
The following errors took place in journalizing and posting transactions:
Insurance of $18,800 paid for the current year was recorded as a debit to Insurance Expense and a credit to Prepaid Insurance. Dividends of $18,000 were recorded as a debit to Wages Expense and a credit to Cash. Journalize the entries to correct the errors.
Answer:
Journal 1
Debit : Prepaid Expense $37,600
Credit : Cash $18,800
Credit : Insurance Expense $18,800
Journal 2
Debit : Dividends $18,000
Credit : Wages $18,000
Explanation:
Journal 1
The first error has to be corrected by debiting the Prepaid Expenses by twice the amount paid to cancel the effect of a credit entry made to that account. Cash is credited to show the correct credit entry that was supposed to be made. Insurance expense is credited to cancel the debit entry made to this account in error.
Journal 2
The error made is called error of principle. This is were the transaction is recorded in the wrong class of accounts. Simply, Debit the Dividends and credit the Wages Account to record and reverse the error out of the Wages Account into the Dividends Account.
A firm must choose between two investment alternatives, each costing $105,000. The first alternative generates $35,000 a year for four years. The second pays one large lump sum of $152,500 at the end of the fourth year. If the firm can raise the required funds to make the investment at an annual cost of 9 percent, what are the present values of two investment alternatives
Answer:
Present Value of first option:
= -105,000 + 35,000/ (1 + 9%) + 35,000/(1 + 9%)² + 35,000/(1 + 9%)³ + 35,000/(1 + 9%)⁴
= -105,000 + 113,390.19
= $8,390.20
Present Value of second option:
= -105,000 + 152,500/ (1 + 9%)⁴
= -105,000 + 108,034.84
= $3,034.84
Manufacturing overhead has an underallocated balance of $12,400; raw materials inventory balance is $145,500; work in process inventory is $122,800; finished goods inventory is $140,300; and cost of goods sold is $170,500. After adjusting for the underallocated manufacturing overhead, what is cost of goods sold
Answer:
$182,900
Explanation:
With regards to the above, after adjusting for the under allocated manufacturing overhead, cost of goods sold would be
= Under allocated balance of manufacturing overhead + cost of goods sold
= $ 12,400 + $170,500
= $182,900
Adams Company has two products: A and B. The annual production and sales of Product A is 2,300 units and of Product B is 1,700 units. The company has traditionally used direct labor-hours as the basis for applying all manufacturing overhead to products. Product A requires 0.3 direct labor-hours per unit and Product B requires 0.6 direct labor-hours per unit. The total estimated overhead for next period is $105,475.
The company is considering switching to an activity-based costing system for the purpose of computing unit product costs for external reports. The new activity-based costing system would have three overhead activity cost pools--Activity 1, Activity 2, and General Factory--with estimated overhead costs and expected activity as follows:
Total Estimated
Overhead
Costs Expected Activity
Product A Product B Total
Activity 1 $32,592 1,600 1,200 2,800
Activity 2 18,564 2,300 800 3,100
General Factory54,319 690 1,020 1,710
Total $105,475
(Note: The General Factory activity cost pool's costs are allocated on the basis of direct labor-hours.)
The overhead cost per unit of Product B under the traditional costing system is closest to:________.
a. $20.30
b. $14.62
c. $16.71
d. $37.01
Answer:
The correct answer is D.
Explanation:
To calculate the predetermined manufacturing overhead rate we need to use the following formula:
Predetermined manufacturing overhead rate= total estimated overhead costs for the period/ total amount of allocation base
Total estimated overhead= $105,475
Total direct labor hours= (2,300*0-3) + (1,700*0.6)
Total direct labor hours= 1,710
Predetermined manufacturing overhead rate= 105,475 / 1,710
Predetermined manufacturing overhead rate= $61.68 per direct labor hour
Now, we can allocate overhead to Product B:
Allocated MOH= Estimated manufacturing overhead rate* Actual amount of allocation base
Allocated MOH= 61.68*(0.6*1,700)
Allocated MOH= $62,913.6
Finally, the cost per unit:
Cost per unit= 62,913.6/1,700
Cost per unit= $37
Ikerd Company applies manufacturing overhead to jobs on the basis of machine hours used. Overhead costs are estimated to total $347,325 for the year, and machine usage is estimated at 126,300 hours.For the year, $375,125 of overhead costs are incurred and 132,700 hours are used.
Required:1. Compute the manufacturing overhead rate for the year. (Round answer to 2 decimal places, e.g. 1.25.)2. What is the amount of under- or overapplied overhead at December 31?3. Prepare the adjusting entry to assign the under- or overapplied overhead for the year to cost of goods sold.
Answer:
See below
Explanation:
1. Manufacturing overhead rate
= Total estimated manufacturing overhead ÷ Estimated direct labor hour
= $347,325 ÷ 126,300
= $2.75
2. $132,700 × 2.75 = $364,925
A company's bank statement shows a cash balance of $4,210. Comparing the company's cash records with the monthly bank statement reveals several additional cash transactions such as checks outstanding of $2,100, NSF check of $230, interest earned of $36, service fee of $46, and a check for $180 recorded twice by the company. Calculate the correct balance of cash?
Answer:
Explanation:
Based on the information that have been provided in the question above, the correct balance of cash will be calculated as the difference between the bank balance that was shown in the bank statement and the checks that was outstanding. This will be:
= $4210 - $2100
= $2110
Therefore, the correct balance of cash will be $2110.
Doug works as the Heavy Haul Manager for Lone Star Transportation. He is currently working on a wind farm project and deciding which drivers of his team will work on the project and which field supervisors will work on communicating with GE who is building the wind farm. He is also assigning drivers certain sections of the wind turbines to ensure that the parts are delivered in the correct order for the project. Which of the following management functions is Doug undertaking?
A. Scrutinizing.
B. Planning.
C. Organizing.
D. Envisioning.
E. Controlling.
Answer:
C
Explanation:
Smart Watch Company reported the following income statement data for a 2-year period.
2019 2020
Sales revenue $220,000 $250,000
Cost of goods sold
Beginning inventory 32,000 44,000
Costs of goods purchased 173,000 202,000
Cost of goods available for sale 205,000 246,000
Ending inventory 44,000 52,000
Cost of goods sold 161,000 194,000
Gross profit $59,000 $56,000
Smart uses a periodic inventory system. The inventories at January 1, 2019, and December 31, 2020, are correct. However, the ending inventory at December 31, 2019, was overstated $6,000.
Required:
a. Prepare correct income statement data the 2 years.
b. What is the cumulative effect of the inventory error on total gross profit for the 2 years?
Answer and Explanation:
a. The preparation of the correct income statement is as follows:
Year 2019 2020
Sales revenue $220,000 $250,000
Cost of goods sold
Beginning inventory $32,000 $38,000
Add: Costs of goods
purchased $173,000 $202,000
Cost of goods available for sale $205,000 $240,000
Less: Ending inventory -$38,000 -$52,000
($44,000 - $6,000 )
Cost of goods sold $167,000 $188,000
Gross profit $53,000 $62,000
b. The cumulative effect is
Incorrect gross profit = $59,000 + $56,000 = $115,000
Correct gross profit = $53,000 + $62,000 = $115,000
Net effect would be zero
As diversity grows in both society and the workplace, interacting and communicating with your coworkers will present specific challenges and rewards. It is important to be sensitive to the diverse backgrounds of your coworkers and to understand how to navigate an increasingly diverse workplace. Which of the following are appropriate strategies for communication in diverse workplaces?
A. Understand the value of difference.
B. Seek training.
C. Use stereotypes to understand others.
D. Focus on cultural differences.
E. Practice ethnocentrism.
F. Develop healthy bias.
G. Build on similarities.
Answer:
A)Understand the value of difference.
B)Seek training.
G)Build on similarities.
Explanation:
A)When one find his/ her self in a diverse work environment, one should understand that people are created differently with different behavior, understanding this differences will enable individual to work together to achieve high productivity.
B) by seeking training, ways to relate with coworkers can be learnt therefore enabling unity in the organization and team work would be easier.
C) Building similarities will lead to a acceptance of differences that exist between co-workers then this will enable good relationship s.
On January 1, 2021, Bishop Company issued 6% bonds dated January 1, 2021, with a face amount of $33 million. The bonds mature in 2033 (10 years). For bonds of similar risk and maturity, the market yield is 8%. Interest is paid semiannually on June 30 and December 31.
Required:
a. Determine the price of the bonds at January 1, 2021.
b. Prepare the journal entry to record the bond issuance by Bishop on January 1, 2021.
c. Prepare the journal entry to record interest on June 30, 2021, using the effective interest method.
d. Prepare the journal entry to record interest on December 31, 2021, using the effective interest method.
Answer:
a. Determine the price of the bonds at January 1, 2021.
market price:
PV of face value = $33,000,000 / 1.04²⁰ = $15,060,769
PV of coupon payments = $990,000 x 13.590 (PV annuity factor, 4%, 20 periods) = $13,454,100
market price = $28,514,869
b. Prepare the journal entry to record the bond issuance by Bishop on January 1, 2021.
Dr Cash 28,514,869
Dr Discount on bonds payable 4,485,131
Cr Bonds payable 33,000,000
c. Prepare the journal entry to record interest on June 30, 2021, using the effective interest method.
amortization of bond discount = ($28,514,869 x 4%) - $990,000 = $150,595
Dr Interest expense 1,140,595
Cr Cash 990,000
Cr Discount on bonds payable 150,595
d. Prepare the journal entry to record interest on December 31, 2021, using the effective interest method.
amortization of bond discount = ($28,665,464 x 4%) - $990,000 = $156,619
Dr Interest expense 1,146,619
Cr Cash 990,000
Cr Discount on bonds payable 156,619
Healy Corporation recorded service revenues of $200,000 in 2014, of which $80,000 were on credit and $120,000 were for cash. Moreover, of the $80,000 credit sales for 2014, Healy collected $20,000 cash on those receivables before year-end 2014. The company also paid $40,000 cash for 2014 wages. Its employees also earned another $20,000 in wages for 2014, which were not yet paid at year-end 2014.
Compute the company’s net income for 2014.
Answer:
$140,000
Explanation:
Computation of the company’s net income for 2014.
Using this formula
Net income=Revenue – Expenses
Let plug in the formula
Net income=$200,000 - $40,000+$20,000
Net income= $140,000
Therefore the company’s net income for 2014 will be $140,000
Answer:
$140,000
Explanation:
On July 1, 2020, Splish Brothers Inc. pays $24,900 to Kalter Insurance Co. for a 3-year insurance contract. Both companies have fiscal years ending December 31. For Splish Brothers Inc., journalize and post the entry on July 1 and the annual adjusting entry on December 31. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. Record journal entries in the order presented in the problem.)
Answer and Explanation:
The journal entries are shown below:
On July 1
Prepaid Insurance $24,900
To Cash $24,900
(being the prepaid insurance is recorded)
Here prepaid insurance is debited as it increased the assets and cash is credited as it decreased the assets
On Dec 31
Insurance expense $4,150 ($24,900 ×6 ÷ 36)
To Prepaid Insurance $4,150
(being insurance expense is recorded)
The insurance expense is debited as it increased the expenses and credited the prepaid insurance as it decreased the assets
Waterway Industries provided the following information on selected transactions during 2021: Dividends paid to preferred stockholders $ 510000 Loans made to affiliated corporations 1400000 Proceeds from issuing bonds 1550000 Proceeds from issuing preferred stock 2090000 Proceeds from sale of equipment 795000 Purchases of inventories 2350000 Purchase of land by issuing bonds 590000 Purchases of treasury stock 1180000 The net cash provided (used) by financing activities during 2021 is
Answer:
Net cash provided by financing activities $1,195,000
Explanation:
The computation of the net cash provided by financing activities are as follows:
Cash flows from financing activities
Issue bonds $2,090,000
Issue preferred stock $795,000
Less: Purchase of treasury stock -$1,180,000
Less: Dividend paid to preferred stockholders -$510,000
Net cash provided by financing activities $1,195,000