Answer:
The adjusted bank balance is $5,293
Explanation:
In order to calculate the adjusted bank balance we would have to make the following calculation:
adjusted bank balance=Bank balance as per bank statement+Deposit in transit+Bank Service Charge+Interest revenue-Outstanding Checks-Error made by book keeper
adjusted bank balance=$6,000+$250+$21+$22-$700-$300
adjusted bank balance=$5,293
The adjusted bank balance is $5,293
Clemmens Company applies overhead based on direct labor cost. Estimated overhead and direct labor costs for the year were $112,500 and $125,000, respectively. During the year, actual overhead was $107,400 and actual direct labor cost was $120,000. The entry to close the over- or underapplied overhead at year-end, assuming an immaterial amount, would include:
Answer:
Estimated Over head applied = ($112500 / $125000) *100 = 90% of Direct labor cost.
Thus, Actual Over Head applied = 90% of $120000 = $108000
Moreover, Actual Over Head incurred = $107400
Therefore, Overhead Over-applied is to be applied as the Actual Overhead applied is higher than the Actual Overhead Incurred
Overhead Over-applied = $108000 - $107400
Overhead Over-applied = $600
The entry to close the over-applied overhead at year-end would include:
i. Over-head A/c will be debited for $600
ii. Cost of goods sold will to be credited for $600
The Village of Seaside Pines prepared the following enterprise fund Trial Balance as of December 31, 2020, the last day of its fiscal year. The enterprise fund was established this year through a transfer from the General Fund. Prepare the reconciliation of operating income to net cash provided by operating activities that would appear at the bottom of the December 31 Statement of Cash Flows. Recall that the beginning balance of all assets and liabilities is zero. (Deductions should be entered as a negative amount.)
Answer:
Hello your question lacks some details and attached to the answer is the missing parts of the question although the year is slightly different ( 2017 ) and yours is 2020 but the General idea of what you want is contained in it
ANSWER: Net cash provided by operating activities = 93000
Explanation:
Before preparing the reconciliation of operating income to net cash provided by operating activities we will have to calculate the operating income form the given table
Charge for sales = 555,000
Less: Cost of goods = -497,000
Administrative and selling expenses = -49,000
Depreciation expense = -47,000
Operating Income = (charge for sales + cost of goods + admin and selling expenses + depreciation expenses ) = -38000
Note : interest income and interest expenses are not considered when calculating operating income
Note : when calculating the net cash provided, Increase in current liabilities is been added and increase in current assets is been subtracted while depreciation is been added to the operating income
ATTACHED TO THIS ANSWER IS THE TABLES SHOWING THE COMPLETE ANSWER AND THE COMPLETE QUESTION
Black Cable Company, an accrual basis taxpayer, allows its customers to pay by the year in advance ($600 per year) or two years in advance ($960). In September 2019, the company collected the following amounts applicable to future services: October 2019 - September 2021 services (200 two-year contracts) $192,000 October 2019 - September 2020 services (200 one-year contracts) 120,000 Total $312,000As a result of this, Black Cable should report gross income for 2020:a. $54,000 b. $78,000 c. $258,000 d. $312.000
Answer:
c. $258,000
Black cable should report $258,000 as gross income for 2020
Explanation:
One-eighth (3/24) of the payments on the two-year contracts were earned (1/8 of $192,000 =24,000)
One-fourth (1/4 of $120,000 = $30,000) of the payment on the one-year contracts were earned in 2019 and is included in 2019 gross income.
The balance of the payment = $312,000 - $24,000-$30,000 = $258,000. $258,000 must be included in 2020 Black Cable gross income
On November 1. Bahama Cruise Lines borrows $2.6 million and issues a six-month. 6% note payable. Interest is payable at maturity. Record the issuance of the note and the appropriate adjustment for interest expense at December 31, the end of the reporting period.
Answer and Explanation:
The journal entries are shown below:
1. Cash Dr $2,600,000
To Note payable $2,600,000
(Being the issuance of the note is recorded)
For recording this we debited the cash as it increased the assets and credited the note payable as it also increased the liabilities
2. Interest expense $26,000
To interest payable $26,000
(Being the interest expense is recorded)
For recording this we debited the interest expense as it increased the expenses and credited the note payable as it also increased the liabilities
The computation is shown below:
= $2,600,000 × 6% × 2 months ÷ 12 months
= $26,000
At December 31, Hawke Company reports the following results for its calendar year. Cash sales $ 1,269,730 Credit sales $ 3,913,000 In addition, its unadjusted trial balance includes the following items. Accounts receivable $ 1,185,639 debit Allowance for doubtful accounts $ 17,990 debit Required: 1. Prepare the adjusting entry to record bad debts under each separate assumption. Bad debts are estimated to be 3% of credit sales. Bad debts are estimated to be 2% of total sales. An aging analysis estimates that 6% of year-end accounts receivable are uncollectible
Answer:
Hawke Company
1. Adjusting Journal Entries to record bad debts under:
a) Bad debts are estimated to be 3% of credit sales:
Debit Bad Debts Expense $135,380
Credit Allowance for Doubtful Accounts $135,380
To record the bad debt expense for the period.
b) Bad debts are estimated to be 2% of total sales:
Debit Bad Debts Expense $121,645
Credit Allowance for Doubtful Accounts $121,645
To record the bad debt expense for the period.
c) An ageing analysis estimates that 6% of year-end accounts receivable are uncollectible:
Debit Bad Debts Expense $89,128
Credit Allowance for Doubtful Accounts $89,128
To record bad debt expense for the period.
Explanation:
a) Allowance for doubtful accounts should have a credit balance of $117,390 ($3,913,000 * 3%). Since there was a debit balance in the unadjusted trial balance of $17,990, the two are added to arrive at what should be expensed.
b) Allowance for doubtful accounts will have a credit balance of $103,655 ($5,182,730 * 2%). With a debit balance in the unadjusted trial balance of $17,990, the sum of $121,645 (amount expensed) will bring the balance to a credit balance of $103,655.
c) Allowance for doubtful accounts will have a credit balance of $71,138 ($ 1,185,639 * 6%). With a debit balance in the unadjusted trial balance of $17,990, the sum of $89,128 will be expensed to bring the balance to a credit balance of $71,138.
If a gain of $221000 is realized in the cash sale of a building having a book value of $882000, the total amount reported in the cash flows from investing activities section of the statement of cash flows is
Answer:
$1,103,000
Explanation:
The cash flow statement categories the company's transactions in a financial period into 3 groups; these are operating, investing and financing.
The net profit/loss, depreciation, changes in current assets (other than cash) and liabilities are considered as operating activities including income taxes.
The sale of assets, interest received, purchase of investments are examples of investing activities while the issuance of stocks, debt principal deduction (loan settlement), issuance of debt securities etc are examples of financing activities.
For assets disposed, the amount received from the disposal is the amount recorded as an investing activity.
Amount received - Book value of asset = Gain on disposal
Amount received = $221000 + $882000
= $1,103,000
Choose the correct answers :
1. If the demand for product A displays high and postitive cross-price elasticity with respect to the price of product B, then:
a. the demand for product A is likely to have a low price elasticity
b. product A and B are subtitutes
c. products A and B are complements
d. the demand for product B is likely to have a low price elasticity
2. Fast food is believed to be an inferior good. This means that:
a. the quantity of fast food consumed decreases as income increases
b. the income elasticity of demand for fast food is positive
c. The quantity of fast food consumed will always be high
d. fast food is really not quality food
Answer:
b. product A and B are subtitutes
a. the quantity of fast food consumed decreases as income increases
Explanation:
Cross price elasticity of demand measures the responsiveness of quantity demanded of good A to changes in price of good B.
Cross price elasticity = percentage change in quantity demanded of good A / percentage change in price of good B.
The cross price elasticity of substitute goods are always positive because if the price of good B increases, the Quanitity demanded of good A rises.
Substitute goods are goods that can be used in place of another good.
Complement goods are goods that are used together. E.g. car and gas
Inferior goods are goods whose demand increases when income falls and whose demand falls when income rises.
I hope my answer helps you
A government has the following liabilities at the end of the year: General obligation bonds Compensated absences Salaries payable $1,500,00 120,000 40,000 What amount of liabilities should be reported in the governmental activities column of the government-wide statement of net position
Answer:
What should be reported is $1660000
Explanation:
Solution
Given that:
Thus
General obligation bonds=$1,500000
Compensated absences=$120,000
Total liabilities in the governmental activities column=$1660000
Therefore, the amount $1660000 should be reported in the governmental activities column of the government-wide statement of net position.
Hank Itzek manufactures and sells homemade wine, and he wants to develop a standard cost per gallon. The following are required for production of a 50-gallon batch.
2,400 ounces of grape concentrate at $0.01 per ounce
54 pounds of granulated sugar at $0.50 per pound
60 lemons at $0.80 each
100 yeast tablets at $0.21 each
100 nutrient tablets at $0.14 each
3,700 ounces of water at $0.005 per ounce
Hank estimates that 4% of the grape concentrate is wasted, 10% of the sugar is lost, and 25% of the lemons cannot be used.
Compute the standard cost of the ingredients for one gallon of wine.
Answer:
total $3.36
Explanation:
required for producing 50 gallons of wine:
2,400 ounces of grape concentrate at $0.01 per ounce = $24 / 50 = $0.48 x 1.04 = $0.50
54 pounds of granulated sugar at $0.50 per pound = $27 / 50 = $0.54 x 1.1 = $0.59
60 lemons at $0.80 each = $48 / 50 = $0.96 x 1.25 = $1.20
100 yeast tablets at $0.21 each = $21 / 50 = $0.42
100 nutrient tablets at $0.14 each = $14 / 50 = $0.28
3,700 ounces of water at $0.005 per ounce = $18.50 / 50 = $0.37
Hank estimates that 4% of the grape concentrate is wasted, 10% of the sugar is lost, and 25% of the lemons cannot be used.
total standard cost per gallon:
grape concentrate = $0.50granulated sugar = $0.59lemons = $1.20yeast tablets = $0.42nutrient tablets = $0.28water = $0.37total $3.36Ajax common stock is expected to return 17 percent in a boom economy, 11 percent in a normal economy, and 2 percent in a recession. The probability of a boom is 25 percent, of a normal economy is 70 percent, and of a recession is 5 percent. What is the expected return on this stock?
Answer:
Expected Value of the return = 12.1%
Explanation:
The expected rate of return is the weighted average of all the possible returns associated with an investment decision. The returns are weighted using the probability associated with their outcomes.
Expected return = WaRa + Wb+Rb + Wn+Rn
W- weight of the outcome, R - return of the outcome
W- Probability of the expected outcome, R- expected return under a circumstance
Expected Value of the return
(0.25× 17%) + (0.7× 11%) + (0.05 × 2%) = 0.1205
=0.1205 × 100
= 12.1%
Expected Value of the return = 12.1%
Depreciation for Partial Periods Hathaway Company purchased a copying machine for $8,700 on October 1, 2019. The machine's residual value was $500 and its expected service life was 5 years. Hathaway computes depreciation expense to the nearest whole month. Required: Compute depreciation expense for 2019 and 2020 using the following methods: (Round your answers to the nearest dollar.) Straight-line method 2019 $ 2020 $ Sum-of-the-years'-digits method 2019 $ 2020 $ Double-declining-balance method 2019 $ 2020 $ Next Level Which method produces the highest book value at the end of 2020
Answer:
straight line method
2019: $4102020: $1,640sum of digits method
2019: $683.332020: $2,596.67double declining method
2019: $8702020: $3,134Which method produces the highest book value at the end of 2020?
the straight line method because the deprecation expense is lowest, book value at Dec. 31, 2020 = $6,650Explanation:
copying machine purchased October 1, 2019 at $8,700
residual value $500
expected life 5 years
depreciation using straight line method:
depreciation expense per year: ($8,700 - $500) / 5 = $1,640
2019: $1,640 x 3/12 = $410
2020: $1,640
sum of digits method:
depreciation first year = 5/15 x $8,200 = $2,733.33
2019: $2,733.33 x 3/12 = $683.33
2020: $2,733.33 x 9/12 = $2,050
$8,200 x 4/15 x 3/12 = $546.67
total 2020: $2,596.67
double declining balance:
depreciation year 1 = 2 x 20% x $8,700 = $3,480
2019: $3,480 x 3/12 = $870
2020: $3,480 - $870 = $2,610
2 x 20% x ($8,700 - $3,460) x 3/12 = $524
total 2020 = $2,610 + $524 = $3,134
Jackson Manufacturing Company had a beginning inventory of $30,000. During the year, the company recorded inventory purchases of $90,000 and cost of goods sold of $100,000. The ending inventory must equal:
Answer:
The answer is $20,000
Explanation:
Solution
Given that:
Jackson Manufacturing Beginning inventory = 30,000
Inventory purchases recorded = $90,000
Cost of goods sold = $100,000
Then
We find the ending inventory which is given below:
Now
The inventory (ending) is = beginning inventory + purchases - cost of goods sold
= $30,000 + $90,000 - $100,000
=$20,000
Hence, the ending inventory must equal the amount of $20,000
1. At year-end, Harris Co. had shipped $12,500 of merchandise FOB destination to Harlow Co. Which company should include the $12,500 of merchandise in transit as part of its year-end inventory?
2. Harris Company has shipped $20,000 of goods to Harlow Co., and Harlow Co. has arranged to sell the goods for Harris. Identify the consignor and the consignee. Which company should include any unsold goods as part of its inventory?
Answer:
1. Harris company
2. The Consignor should be Harris Company
The Consignee should be Harlow Company
Explanation:
1.Harris company should include the amount of $12,500 as part of their year end inventory because based on the information given we were told that Harris Company was the company which at year-end shipped $12,500 of merchandise FOB destination to Harlow Co.
2.
The Consignor should be Harris Company
The Consignee should be Harlow Company
Because Harris Company was the company which shipped the goods worth $20,000 to Harlow Co Which means HARRIS COMPANY is the CONSIGNOR in which Harlow Co. has as well arranged to sell the goods for Harris which means HARLOW COMPANY is the CONSIGNEE because they are the buyer of the goods
Therefore Harris company should tend to include any goods which are unsold as part of the inventory.
Larned Corporation recorded the following transactions for the just completed month.
$72,000 in raw materials were purchased on account. $70,000 in raw materials were used in production. Of this amount, $62,000 was for direct materials and the remainder was for indirect materials. Total labor wages of $106,000 were paid in cash. Of this amount, $102,200 was for direct labor and the remainder was for indirect labor. Depreciation of $193,000 was incurred on factory equipment.
Required:
Record the above transactions in journal entries.
Answer:
Larned Corporation
Journal Entries
Sr. No Account Debit Credit
1 Materials $72,000
Accounts Payable $72,000
$72,000 in raw materials were purchased on account.
2 Work in Process $62,000
Materials Inventory $62,000
$70,000 in raw materials were used in production. Of this amount, $62,000 was for direct materials
3 Manufacturing Overheads $8000
Materials Inventory $ 8000
$70,000 in raw materials were used in production. Of this amount, $62,000 was for direct materials and the remainder was for indirect materials.
4 Work In Process $ 102,000
Payroll ( Direct Labor ) $102,000
$102,200 was for direct labor
5 Manufacturing Overheads $3800
Payroll (Indirect Labor) $3800
Total labor wages of $106,000 were paid in cash. Of this amount, $102,200 was for direct labor and the remainder was for indirect labor.
6 Depreciation $193,000
Factory Overhead Control Account $193,000
Depreciation of $193,000 was incurred on factory equipment.
Company expects to sell 500 units during the second quarter and 550 units in the third quarter. Currently, during the second quarter, they have 46 units on hand. If they desire safety stock of 10% of the next quarter's sales, ________ units will need to be produced in the second quarter.
Answer:
509 units
Explanation:
The expected sales in the present quarter is 500 units (for second quarter) and we have 46 units on hand.
We want a reserve of 10% during the next quarter.
The expected sales in next quarter is 550 units so reserve of 10% is
Reserve = 0.10 * 550= 55 units
Balance to produce this quarter= 500 - 46= 454 units
Total to produce= Balance produced + Reserve
Total to produce= 454 + 55= 509 units
Molen Inc. has an outstanding issue of perpetual preferred stock with an annual dividend yield of 7.50% and a par value of $60. If the market value for the preferred stock is $70, what is the required return on this preferred stock?
Answer:
10.71%
Explanation:
The computation of the required rate of return on this preferred stock is shown below :
The Required return on preferred stock is
= Dividend ÷ market value of preferred stock
= 7.50 ÷ $70
= 10.71%
By dividing the dividend from the market value of preferred stock we can get the Required return on preferred stock and the same is to be considered
therefore we ignored the par value i.e $60 as this is not relevant
Answer:
$61.54
Hope this helps! good luck :)
On January 1, 2021, Gundy Enterprises purchases an office building for $360,000, paying $60,000 down and borrowing the remaining $300,000, signing a 7%, 10-year mortgage. Installment payments of $3,483.25 are due at the end of each month, with the first payment due on January 31, 2021.
Required:
a. Record the purchase of the building on January 1, 2015.
b. Record the first monthly mortgage payment on January 31, 2015. How much of the first payment goes to interest expense and how much goes to reducing the carrying value of the loan?
c. Total payments over the 10 years are $417,990 ($3,483.25 x 120 monthly payments). How much of this is interest expense and how much is actual payment of the loan?
Answer:
A.Dr Building $360,000
Cr Cash $60,000
Cr Notes Payable $300,000
B.Dr Interest Expense $1,750
Dr Notes Payable $1,733.25
Cr Cash $3,483.25
C.$117,990
Explanation:
Grundy Enterprises
1/1/18
Cash Paid/monthly payment
Interest Expense/carrying value
Decrease in Carrying Value
Carrying Value/prior carrying value- $300,000
1/31/18
Cash Paid/Monthly Payment - $3,483.25
Interest Expense/Carrying Value - $1,750.00
Decrease in Carrying Value - $1,733.25
Carrying Value/Prior Carrying Value - (300,000- 1,733.25) $298,266.75
2/28/18
Cash Paid/Monthly Payment - $3,483.25
Interest Expense/Carrying Value - $1,739.89
Decrease in Carrying Value - $1,743.36
Carrying Value/Prior Carrying Value - $296,523.39
A. Preparation of the entry to record the purchase of the building on January 1, 2015.
Dr Building $360,000
Cr Cash $60,000
Cr Notes Payable $300,000
B. Preparation to Record the first monthly mortgage payment on January 31, 2015 and How much of the first payment goes to interest expense and the carrying value of the loan
Dr Interest Expense $1,750
Dr Notes Payable $1,733.25
Cr Cash $3,483.25
C. Calculation of How much of this is interest expense and how much is actual payment of the loan.
Total Paid: $417,990
Less: Principal Balance: ($300,000)
Amount of Interest Paid: $117,990
a.) The purchase of the building on January 1, 2015 is $300000
b.) The amount that goes to interest expense is $1750 and $1733.25 goes towards reducing the carrying value.
c.) The total actual payment on this loan is $300000 and the interest expense = $1733.25
a. Asset = Liability + Equity
asset = 360000 building
Liability = 300000
Equity = - 60000
360000 = liability + 60000
Liability = 360000 - 60000
= $300000
The purchase of the building on January 1 2015 is $300000
b. Interest expense calculation
value = 300000
Interest rate = 7%
time = 1 month out of 12 months
Interest = 0.07*300000*1/12
= $1750
The fall in the carrying value
Payment in the month = 3483.25
Interest = $1750
Decrease = 3483.25-1750
= $1733.25
The carrying at Jan 31st
= 300000-1733.25
= $298266.75
Interest = 298266.75*0.07*1/12
= $1739.89
c. Total loan = $417990
Actual payment = 300000
difference = 417990-300000
= $117990
The total actual payment on this loan is $300000 and the interest expense = $1733.25
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Assume a Cobb-Douglas production function of the form: q equals 10 Upper L Superscript 0.33 Baseline Upper K Superscript 0.75. What type of returns to scaleLOADING... does this production function exhibit?
Answer:
Since 0.33 + 0.75 = 1.08 is greater than one, this production function therefore exhibits increasing returns to scale.
Explanation:
From the question, we have the following restated equation:
[tex]q=10L^{0.33} K^{0.75}[/tex]
Where q is the output, and L and K are inputs
To determine the types of returns to scale, we increase each of L and K inputs by constant amount c as follows:
[tex]q = 10(cL)^{0.33}(cK)^{0.75}[/tex]
We can now solve as follows;
[tex]q = 10c^{0.33+0.75} L^{0.33}K^{0.75}[/tex]
[tex]q=c^{1.08} L^{0.33} K^{0.75}[/tex]
Since 0.33 + 0.75 = 1.08 is greater than one, this production function therefore exhibits increasing returns to scale.
Grayille Financial Consultants, Inc. is planning to reduce the number of days it allows its clients to pay their bills from 45 days to 30 days. Grayille believes that this policy change will have no effect on either sales or costs. Any asset changes resulting from this new policy will be offset by a corresponding and equal change in equity. All else constant, this new collection policy should be expected to (circle all that apply - if the correct answer is a and b and you circle any letter(s) other than a and b, you will receive no credit - that is, no partial credit will be awarded for your answer to this question):
Answer: c. Lower the firm's quick ratio.
d. Lower the firm's current ratio.
Explanation:
Reducing the amount of time that clients have to pay will reduce the amount of Account Receivables as clients will no longer have long outstanding due dates. This reduction in Accounts Receivables will be felt by the Quick and Current ratios.
Quick Ratio formula
= [tex]\frac{Current Assets - Inventory}{Current Liabilities}[/tex]
Current Ratio Formula
= [tex]\frac{Current Assets}{Current Liabilties}[/tex]
As is evident from the formulas, Current Assets are integral to both ratios and as Accounts Receivables is a current asset that will be reduced, the current assets will be reduced and by extension both the Current and Quick Ratios will be reduced as well.
The food and beverage manager should always expect that the fresh produce delivered to his or her establishment will be the same quality and degree of ripeness that they were when first harvested in the field. True or False
Answer:
False.
Explanation:
The food and beverage manager shouldn't always expect that the fresh produce delivered to his or her establishment will be the same quality and degree of ripeness that they were when first harvested in the field.
The produce delivered wouldn't be as fresh, same quality and degree of ripeness that they were when first harvested because of changes in environmental conditions such as temperature and relative humidity. Also, a change in its biochemical composition would go a long way to affect the quality of fresh produce.
Hence, this would result in a change in taste, texture, degree of ripeness, nutritional value, smell etc.
However, the farmer or supplier of this food products could mitigate the change in quality by transporting them as soon as possible after harvesting, transporting at a required cold temperature, humidity and ensuring they're well packaged in a safe container during shipment.
Projects S and L both have normal cash flows, and the projects have the same risk, hence both are evaluated with the same WACC, 10%. However, S has a higher IRR than L. Which of the following statements is CORRECT?
A. Project S must have a higher NPV than Project L.
B. If Project S has a positive NPV, Project L must also have a positive NPV.
C. If the WACC falls, each project's IRR will increase.
D. If the WACC increases, each project's IRR will decrease.
E. If Projects S and L have the same NPV at the current WACC, 10%, then Project L, the one with the lower IRR, would have a higher NPV if the WACC used to evaluate the projects declined.
Answer:
E. If Projects S and L have the same NPV at the current WACC, 10%, then Project L, the one with the lower IRR, would have a higher NPV if the WACC used to evaluate the projects declined.
Explanation:
Net present value is the present value of after tax cash flows from an investment less the amount invested.
Internal rate of return is the discount rate that equates the after tax cash flows from an investment to the amount invested
Andrew Industries purchased $165,000 of raw materials on account during the month of March. The beginning Raw Materials Inventory balance was $22,000, and the materials used to complete jobs during the month were $141,000 of direct materials and $13,000 of indirect materials. What amount will Andrew debit to Work in Process Inventory for the month of March
Answer:
Journal entry for raw material used will be :
Dr. Work in process Inventory $141,000
Cr. Raw materials Inventory $141,000
Explanation:
The beginning Raw Materials Inventory balance = $22,000
The materials used to complete jobs during the month = $141,000 of direct materials and $13,000 of indirect materials
Journal entry for raw material used will be :
Dr. Work in process Inventory $141,000
Cr. Raw materials Inventory $141,000
The form of inventory is modified but the company's assets remain in the form of Work in Process. Assets are debited at all times.
When the U.S. dollar is strong, Select one: a. U.S. manufacturers tend to make more purchases from foreign sources. b. U.S. manufacturers tend to limit purchases from foreign sources. c. U.S. manufacturers do not change standard business practices. d. U.S. manufacturers are more likely to close plants abroad.
Answer:
a. U.S. manufacturers tend to make more purchases from foreign sources
Explanation:
The US dollar is high producers in the US prefer to make more purchases from international sources, according to the provided scenario.
Therefore the correct option is a which indicates that when the US dollar is strong then the manufacturer of the united states prefer to buy as much from international entities in order to capture the market at the maximum level so that they could able to achieve their sales targets
Oriole Company had sales of $392000, variable costs of $192000, and direct fixed costs totaling $97000. The company’s operating assets total $809000, and its required return is 10%. How much is the residual income?
Answer:
Residual Income = $ 22,100
Explanation:
Residual income is the excess of the controllable profit over the opportunity cost of capital invested.
It is computed as follows:
Residual income = Controllable profit - (cost of capital× operating assets)
Controllable profit = 392,000 - 192,000- 97,000 = $103,000
Residual income = 103,000 - (10%× 809,000)= 22,100
Residual Income = $ 22,100
What is the age distribution of promotion-sensitive shoppers? A supermarket super shopper is defined as a shopper for whom at least 70% of the items purchased were on sale or purchased with a coupon.
Answer:
The distribution of probability is valid if sum of all the probabilities equals to 1.
Explanation:
Age Range Midpoint Percent of super shopper
18-28 23 7%
29-39 34 44%
40-50 45 24%
51-61 56 14%
61 and over 67 11%
∑p(x) = P (x1)
The distribution of the shoppers is valid as the sum of all the probabilities equals to 1.
∑p(x) : 0.7 + 0.44 + 0.24 + 0.14 + 0.11 = 1
Four roommates are planning to spend the weekend in their dorm room watching old movies, and they are debating how many to watch. Here is their willingness to pay for each film:
Willingness to Pay (Dollars)
Musashi Sean Bob Eric
First film 10 9 8 3
Second film 8 7 6 2
Third film 6 5 4 1
Fourth film 4 3 2 0
Fifth film 2 1 0 0
Within the dorm room, the showing of a movie ( IS OR IS NOT ) a public good.
If it costs $8 to rent a movie, the roommates should rent__________movies in order to maximize the total surplus.
Suppose the roommates choose to rent the optimal number of movies you just indicated and then split the cost of renting equally.
This means that each roommate will pay $__________.
Answer:
1. Inside the dorm room, the movies are Non-Rival which means that one person can watch the movie and it will not diminish the ability of others to watch as well.
Also as they are all in the same dorm, the showing of the movie is Non-Excludable as well because no one can stop the other from watching.
Public good is both Non-Rival and Non-Excludable so the showing of a movie IS a public good.
2.
Musashi Sean Bob Eric Total Willingness to pay
10 9 8 3 30
8 7 6 2 23
6 5 4 1 16
4 3 2 0 9
2 1 0 0 3
The optimal number of movies that can be rented is dependent on their total willingness to pay. If their Total willingness to pay for the movie is above $8 which is the cost of a movie, then they will get it. From the table, the fifth movie is below the price of $8 so they should rent 4 movies.
3. If they rent 4 movies and there are 4 of them then the cost per person is;
= (8 *4)/4 people
= 24/4
= $8
This means that each roommate will pay $8.
If a purchase is a new buy for a manufacturer, the seller should be prepared to act as a consultant to the buyer, expect a long time for a buying decision to be reached, and:__________
a. expect to have to do some favors for the decision makers.
b. anticipate a great deal of conflict.
c. accommodate unlimited specification change before the buy is completed.
d. work with technical personnel.
e. avoid making concessions or compromises.
Answer:
d. work with technical personnel.
Explanation:
In the given scenario a manufacturer is making a new buy from a seller. This is a risky investment for the buyer because of uncertainty on how the product will perform and lack of technical know-how in operating the product.
The buyer therefore will require the seller to act as a consultant in case of issues arising from the use of the product, buying decision will take a long time because the buyer will want a good fit for their operations, and more work will be done with technical personnel to train them on how to use the product
The total cost schedule for a competitive firm is given by: OutputTotal Cost 0$10 160 280 3110 4165 5245 If market price is $60, how many units of output will the firm produce
Answer: 4 units.
Explanation:
A firm should produce at the rate where Marginal Cost is equal to Marginal Revenue or at a point where they are at their closest.
From the above question, the Marginal Revenue is the Market Price of $60 because that is the extra amount made per sale.
The closest Marginal Cost to $60 is at 4 units. Here the cost of producing is $165 and the cost of producing 3 units is $110. The cost of producing the 4th unit,
= 165 - 110
= $55
The marginal cost of the 5th unit is $80 so it cannot be here.
At the 4th unit the profit made is,
= (Selling price * units) - cost
= (60 * 4) - 165
= $75
This will be the highest profit the company can make.
Foot Locker, Inc., is a large global retailer of athletic footwear and apparel selling directly to customers and through the Internet. It includes the Foot Locker family of stores, Champs Sports, Footaction, Runners Point, and Sidestep. The following are a few of Foot Locker's investing and financing activities as reflected in a recent annual statement of cash flows.
a. Capital expenditures (for property, plant, and equipment).
b. Repurchases of common stock from investors.
c. Sale of short-term investments.
d. Issuance of common stock.
e. Purchases of short-term investments.
f. Dividends paid on common stock.
Required:
For activities (a) through (f), indicate whether the activity is investing (l) or financing (F) and the direction of the effect on cash flows (+ for increases cash; - for decreases cash).
Answer:
a. Capital expenditures (for property, plant, and equipment) : (l), -
b. Repurchases of common stock from investors : (F), -
c. Sale of short-term investments : (O) +
d. Issuance of common stock : (F) +
e. Purchases of short-term investments : (O) -
f. Dividends paid on common stock : (F) -
Explanation:
The cash flow statement categories the company's transactions in a financial period into 3 groups; these are operating, investing and financing.
The net profit/loss, depreciation, changes in current assets (other than cash) and liabilities are considered as operating activities including income taxes.
The sale of assets, interest received, purchase of investments are examples of investing activities while the issuance of stocks, debt principal deduction (loan settlement), issuance of debt securities etc are examples of financing activities.
An increase in assets other than cash is an outflow while an increase in liabilities is an inflow. Depreciation and other non-cash expenses deducted in the income statements are added back while the non-cash income such gain on asset are deducted from net income.
An entrepreneur is investigating starting a company that provides tax advice to small companies. In order to position his company differently from the existing competitors, the entrepreneur must:
Answer:
b. provide tax advice either in a different manner or provide a different kind of tax service than competitors.
Explanation:
When the company's objective is to position itself in the market differently from competitors, the focus should be on offering a product or service that has different attributes than the competitor.
A differentiated product or service can be defined by presenting innovative features or functions in the market, which generates the desire for the purchase in the customer.
Investing in different attributes for a good or service generates value for the brand and helps to achieve strategic advantages that competitors are unable to achieve.
Therefore, the most suitable alternative for this issue is the letter b, because to position your company differently from existing competitors, the entrepreneur must provide tax advice differently or provide a different type of tax service than competitors.