Answer:
1. A. 315,550 or more
2. B. B
Explanation:
Number of boats is 115
Alternative A :
New location cost are
Fixed cost $250,000
Transportation cost increase is $5200
Variable cost is $700 per boat
Total cost per boat is (250,000 + 5200 ) / 115 + 700 = 2,919 per boat.
Alternative B :
Subcontract costs are
Transportation cost increase is $28,000
cost per boat is $3,100 per boat
Total cost per boat is 28,000 / 115 + 3,100 = 3,343 per boat.
Alternative C :
New location cost are
Fixed cost $60,000
Transportation cost increase is $81,000
Variable cost is $1,700 per boat
Total cost per boat is (60,000 + 81,000 ) / 115 + 1,700 = 2,926 per boat.
Best alternative is A ( New Location ) which results in lowest total cost per boat.
Answer:
315,550 or more.
Explanation:
Which statement about natural resources is NOT true?
A)
Natural resources can be processed to make goods.
B)
The amount of natural resources available to a society has little effect on its
economy
C)
Synthetic materials such as nylon can be made from natural resources.
D)
Countries that have scarce natural resources must get them from somewhere else.

Answer:
C is wrong
the rest are correct
Answer:
B.
The amount of natural resources has a big effect on its economy.
Vaughn uses the periodic inventory system. For the current month, the beginning inventory consisted of 7200 units that cost $14.00 each. During the month, the company made two purchases: 3000 units at $15.00 each and 12200 units at $15.50 each. Vaughn also sold 13100 units during the month. Using the FIFO method, what is the ending inventory?
Answer:
Ending inventory= $144,150
Explanation:
Giving the following information:
Beginning inventory consisted of 7200 units that cost $14.00 each.
Purchase:
3000 units at $15.00 each
12,200 units at $15.50 each.
Vaughn also sold 13,100 units during the month.
To calculate the ending inventory using the FIFO (first-in, first-out) method, we need to use the cost of the lasts units incorporated into inventory:
Ending inventory= 9,300*15.5
Ending inventory= $144,150
Presented is basic financial information (in millions) from the annual reports of Nike Nike Sales revenue $18,627 Allowance for doubtful accounts, Jan. 1 71.5 Allowance for doubtful accounts, Dec. 31 78.4 Accounts receivable balance (gross), Jan 1 2,566.2 Accounts receivable balance (gross), Dec. 31 2,873.7 Instructions: Calculate the average collection period (DAYS) for Nike. Only record the number and round to one decimal.
Answer:
See below
Explanation:
Average collection period is computed as
= [Average accounts receivables / Net sales] × 365
Average accounts receivables = [(2,566.2 + 2,873.7)/2] = 2,720
Net sales = 18,627
Average collection period = [2,720/18627] × 365
= 53 days
Select the correct statement below regarding Manufacturing Overhead: Multiple Choice Manufacturing overhead is always an estimated cost. Manufacturing overhead is a clearing account and is neither shown on the balance sheet or income statement in published financial statements. Manufacturing overhead is an inventory account that is shown on the balance sheet. Manufacturing overhead is an expense account for all factory costs that are neither direct materials or direct labor.
Answer:
D) Expense account for all factory costs, except direct material or labour
Explanation:
Manufacturing Overhead refers to indirect costs, incurred during the process of production. This is charged as cost - to the units produced, during a reporting period. Example : Depreciation of asset, cost of asset is spread to all the useful years (& corresponding period output)
Variable production costs Plastic for casing $ 171,500 Wages of assembly workers 490,000 Drum stands 215,600 Variable selling costs Sales commissions 161,700 Fixed manufacturing costs Taxes on factory 6,000 Factory maintenance 12,000 Factory machinery depreciation 72,000 Fixed selling and administrative costs Lease of equipment for sales staff 12,000 Accounting staff salaries 62,000 Administrative management salaries 142,000 Required: 1. Prepare a contribution margin income statement for the year. 2. Compute its contribution margin per unit and its contribution margin ratio. 3. For each dollar of sales, how much is left to cover fixed costs and contribute to operating income
Answer:
Part 1.
Contribution margin income statement for the year.
Sales (4,900 x 340) 1,666,000
Less Variable Costs
Plastic for casing 171,500
Wages of assembly workers 490,000
Drum stands 215,600
Sales commissions 161,700 (1,038,800)
Contribution 627,200
Less Fixed Costs
Taxes on factory 6,000
Factory maintenance 12,000
Factory machinery depreciation 72,000
Lease of equipment for sales staff 12,000
Accounting staff salaries 62,000
Administrative management salaries 142,000 (306,000)
Net Income 321,200
Part 2.
Contribution margin per unit = $627,200 / 4,900 = $128.00
Contribution margin ratio = $627,200/ $1,666,000 = 37.65 %
Explanation:
The Contribution Margin Income Statement calculates separately the contribution and net income as shown above.
Molson Beer was produced in Canada. Coors was manufactured in the United States. A merger of the two breweries gave each brand access to a significantly larger market. To effectively reach both markets, the merged company needed to coordinate its promotional mix to produce a consistent, unified, and customer-focused message. In other words, the brewery needed to use
Answer:
Integrated marketing communication.
Explanation:
Integrated Marketing Communication (IMC) is a process through which organizations create seamless branding and coordination of their marketing and communication objectives with its business goals and target audience or consumers. The communication tools used in IMC are both digital and traditional media such as billboards, search engine optimization, magazines, television, blog, radio, webinars etc.
The receiver is any individual who is able to read, hear or see and process the message being sent or communicated in the IMC communication process. Any interference the IMC communication process is known as noise.
An organization can analyze and measure the effectiveness of the IMC communication process by considering market share, sales, and customer loyalty.
In this scenario, Molson Beer was produced in Canada. Coors was manufactured in the United States. A merger of the two breweries gave each brand access to a significantly larger market. To effectively reach both markets, the merged company needed to coordinate its promotional mix to produce a consistent, unified, and customer-focused message. In other words, the brewery needed to use integrated marketing communication.
During September at Renfro Corporation, $65,000 of raw materials were requisitioned from the storeroom for use in production. These raw materials included both direct and indirect materials. The indirect materials totaled $8,000. The journal entry to accurately record this requisition would be: Multiple Choice Dr. MOH $57,000 Dr. WIP $8,000 Cr. Raw Materials $65,000 Dr. WIP $65,000 Cr. MOH $8,000 Cr. Raw Materials $57,000 Dr. WIP $57,000 Dr. MOH $8,000 Cr. Raw Materials $65,000 Dr. WIP $57,000 Dr. MOH $8,000 Cr. Direct Materials $65,000
Answer:
Debit WIP $57,000
Debit MOH $8,000
Credit raw materials $65,000
Explanation:
With regards to the above,
Indirect material used = $8,000 will be debited to manufacturing overhead [MOH]
Direct materials used =$65,000 - $8,000 = $57,000 hence will be debited to work in process account [WIP]
Raw materials will be credited by $65,000
The correct answer would therefore be;
Dr WIP $57,000
Dr MOH $8,000
Cr raw materials $65,000
On December 31, 2020, Swifty Corporation sold for $152000 an old machine having an original cost of $265000 and a book value of $113000. The terms of the sale were as follows: $39000 down payment $56500 payable on December 31 each of the next two years The agreement of sale made no mention of interest; however, 8% would be a fair rate for this type of transaction. What should be the amount of the notes receivable net of the unamortized discount on December 31, 2020 rounded to the nearest dollar
Answer:
the amount of the note receivable net of the unamortized discount is $100,754
Explanation:
The computation of the amount of the note receivable net of the unamortized discount is shown below:
= $56,500 × present value of an ordinary annuity for 2 years at 8%
= $56,500 × 1.783265
= $100,754
hence, the amount of the note receivable net of the unamortized discount is $100,754
Bonita Industries had the following bank reconciliation at March 31, 2020: Balance per bank statement, 3/31/20 $74600 Add: Deposit in transit 20400 95000 Less: Outstanding checks 25300 Balance per books, 3/31/20 $69700 Data per bank for the month of April 2020 follow: Deposits $87600 Disbursements 99300 All reconciling items at March 31, 2020 cleared the bank in April. Outstanding checks at April 30, 2020 totaled $12500. There were no deposits in transit at April 30, 2020. What is the cash balance per books at April 30, 2020
Answer:
$50,400
Explanation:
Cash Balance as per bank statement $62,900
[$69700+$25300-$20400+$87600-$99300]
Less: Outstanding checks at April 30, 2020 $12,500
Adjusted Cash balance per bank $50,400
So, the cash balance per books at April 30, 2020 is $50,400
Blake doesn't much care about cars but is engaging in a substantial amount of information search about cars since he is about to buy a new car. In terms of involvement, Blake is Multiple Choice high in product involvement; low in purchase involvement. low in product involvement; low in purchase involvement. high in product involvement; high in purchase involvement. low in product involvement; high in purchase involvement. high in value-expressive involvement; low in product involvement.
Answer:
The answer "low in product involvement; high in purchase involvement".
Explanation:
In this question, Blake doesn't care a great deal about vehicles and is looking for something like a lot of information about cars when he's about to install a separate vehicle. Blake's involvement throughout the product is low; he is quite involved in purchasing because Low-involvement products were normally inexpensive, so if the customer makes an error by purchasing these they present a low risk. This same customer is related to excessive participation products if their fail, are complex, and are due to greater sticker prices. Somewhere in the middle of minimal participation products were falling.
Last year, Rocket Inc. earned a % return. Farmer's Corp. earned %. The overall market return last year was %, and the risk-free rate was %. If Rocket stock has a beta of and Farmer's has a beta of , which stock performed better once you take risk into account? 19 12 16 3 1.9 0.5 Click the icon to see the Worked Solution. Rocket's expected return is %. (Enter as a percentage and round to one decimal place.) Farmer's expected return is %. (Enter as a percentage and round to one decimal place.) Which stock performed better once you take risk into account? (Select the best answer below.)
Answer:
a) Expected Return for Rocket Inc. = 27.7 %
b) Expected Return for Farmer's Corp. = 9.5 %
c) The Stock performed better once you take risk into account = Rocket Inc.
Explanation:
Given - Last year, Rocket Inc. earned a 19 % return. Farmer's Corp. earned 12 %. The overall market return last year was 16 %, and the risk-free rate was 3 %. If Rocket stock has a beta of 1.9 and Farmer's has a beta of 0.5.
To find - (a) Rocket's expected return is ... ?
(b) Farmer's expected return is ... ?
(c) Which stock performed better once you take risk into account ?
Solution -
The formula for Expected return is -
Expected Return = Risk-free rate + Systematic Risk ( Market Return - Risk-free rate )
a)
Now,
For Rocket Inc. -
Expected Return = 3% + 1.9 ( 16% - 3% )
= 3% + 1.9 (13 %)
= 3% + 24.7 %
= 27.7 %
⇒Expected Return for Rocket Inc. = 27.7 %
b)
For Farmer's Corp. -
Expected Return = 3% + 0.5 ( 16% - 3% )
= 3% + 0.5 (13 %)
= 3% + 6.5 %
= 9.5 %
⇒Expected Return for Farmer's Corp. = 9.5 %
c)
Now,
Given that,
Actual Return of Rocket Inc. = 19 %
Expected Return of Rocket Inc. = 27.7 %
⇒ Performance is better
Now,
Actual Return of Farmer's Corp. = 12 %
Expected Return of Farmer's Corp. = 9.5 %
⇒ Performance is worst
∴ we get
The Stock performed better once you take risk into account = Rocket Inc.
Based on the segment income statement below, Chips, Inc. is considering eliminating its Barbecue Division line. Revenue from Barbecue Division sales $ 528,000 Salaries for Barbecue Division workers (128,000 ) Direct material (342,000 ) Sunk costs (equipment depreciation) (82,000 ) Allocated company-wide facility-sustaining costs (64,000 ) Net loss $ (88,000 ) If the Division is eliminated, what is the total amount of avoidable cost?
Answer:
$470,000
Explanation:
Calculation to determine the total amount of avoidable cost
Salaries for Barbecue Division workers $128,000
Add Direct material $342,000
Avoidable Cost $470,000
($128,000+$342,000)
Therefore the total amount of avoidable cost will be $470,000
Following are the accounts and balances from the adjusted trial balance of Stark Company. Notes payable $ 11,000 Accumulated depreciation-Buildings $ 15,000 Prepaid insurance 2,500 Accounts receivable 4,000 Interest expense 500 Utilities expense 1,300 Accounts payable 1,500 Interest payable 100 Wages payable 400 Unearned revenue 800 Cash 10,000 Supplies expense 200 Wages expense 7,500 Buildings 40,000 Insurance expense 1,800 Stark, Withdrawals 3,000 Stark, Capital 24,800 Depreciation expense-Buildings 2,000 Services revenue 20,000 Supplies 800 Prepare the (1) income statement and (2) statement of owner's equity for the year ended December 31, and (3) balance sheet at December 31. The Stark, Capital account balance was $24,800 on December 31 of the prior year.
Answer:
STARK COMPANY
INCOME STATEMENT
FOR THE YEAR ENDED DECEMBER 31
PARTICULARS AMOUNT$
Service Revenue 20,000
Less-Expenses
Supplies expense 200
Interest expense 500
Insurance expense 1800
Utilities expense 1300
Depreciation expense 2000
Wages expense 7500
Total expenses 13,300
Net profit $6,700
STARK COMPANY
STATEMENT OF RETAINED EARNINGS
FOR THE YEAR ENDED DECEMBER 31 Amount$
Retained earnings December 31 prior year end 14,800
Add- Net income 6,700
Less- Dividends 3,000
Retained earnings, December 31 Current year end $18,500
The management of Furrow Corporation is considering dropping product L07E. Data from the company's budget for the upcoming year appear below: Sales $ 980,000 Variable expenses $ 383,000 Fixed manufacturing expenses $ 365,000 Fixed selling and administrative expenses $ 245,000 In the company's accounting system all fixed expenses of the company are fully allocated to products. Further investigation has revealed that $223,000 of the fixed manufacturing expenses and $184,000 of the fixed selling and administrative expenses are avoidable if product L07E is discontinued. The financial advantage (disadvantage) for the company of eliminating this product for the upcoming year would be:
Answer:
If product L07E is discontinued, income will decrease by $190,000
Explanation:
Giving the following information:
Current loss= (13,000)
Further investigation has revealed that $223,000 of the fixed manufacturing expenses and $184,000 of the fixed selling and administrative expenses are avoidable if product L07E is discontinued.
To determine whether product L07E should be discontinued or not, we need to use the following formula:
Effect on income= Unavoidable fixed cost - current income
Effect on income= - 203,000 + 13,000
Effect on income= -$190,000
If product L07E is discontinued, income will decrease by $190,000
A college student has been looking for a new tires. The student feels that the warranty period is a good estimate of the tire life and that 10% interest rate is appropriate. Given 4 options find the minimum Equivalent Uniform Monthly Cost. (Note: the student wants to buy 4 tires)
Warranty time (months) | Tire price (all 4 tires)
12 | 31
24 | 51
36 | 69
48 | 94
Answer:
The minimum Equivalent Uniform Monthly Cost = $2.2264
Explanation:
To find the Equivalent Uniform Monthly Cost: EUAC = P(A/P,I,N)
Where i = 10% => 10% / 12 =
N = 12 , 24 , 36 & 48 months
12 months Warranty time = 31(A/P,10%/12,12)
12 months Warranty time = 31 * 0.0879
12 months Warranty time = $2.7254
24 months Warranty time =51(A/P,10%/12,24)
24 months Warranty time = 51 * 0.0461
24 months Warranty time = $2.3534
36 months Warranty time = 69(A/P,10%/12,36)
36 months Warranty time = 69 * 0.0323
36 months Warranty time = $2.2264
48 months Warranty time =94(A/P,10%/12,48)
48 months Warranty time = 94 * 0.0254
48 months Warranty time = $2.3841
You plan to purchase a $340,000 house using either a 25-year mortgage obtained from your local savings bank with a rate of 8.10 percent, or a 10-year mortgage with a rate of 7.10 percent. You will make a down payment of 20 percent of the purchase price.
a. Calculate the amount of interest and, separately, principal paid on each mortgage. What is the difference in interest paid?
b. Calculate your monthly payments on the two mortgages. What is the difference in the monthly payment on the two mortgages?
Answer:
a. Interest under 10 year mortgage = CUMIPMT(7.1%/12, 10*12, 340000*80%, 1, 10*12, 0)
Interest under 10 year mortgage = 108662.44
Interest under 25 year mortgage = CUMIPMT(8.1%/12, 10*12, 340000*80%, 1, 25*12, 0)
Interest under 25 year mortgage = 363217.16
Difference in interest = 363217.16 - 108662.44
Difference in interest = 254554.72
b. Monthly payment under 10 year = PMT(7.1%/12, 10*12, 340000*80%)
Monthly payment under 10 year = 3172.19
Monthly payment under 25 year = PMT(8.1%/12, 25*12, 340000*80%)
Monthly payment under 25 year = 2117.39
Difference in the monthly payment = 3172.19 - 2117.39
Difference in the monthly payment = 1054.80
Daniel, age 38, is single and has the following income and expenses in 2016.
Salary income $60,000
Net rent income 6,000
Dividend income 3,500
Payment of alimony 12,000
Mortgage interest on residence 4,900
Property tax on residence 1,200
Contribution to traditional IRA 5,000
Contribution to United Church 2,100
Loss on the sale of real estate (held for investment) 2,000
Medical expenses 3,250
State income tax 300
Federal income tax 7,000
a. Calculate Daniel's AGI.
b. Should Daniel itemize his deductions from AGI or take the standard deduction? Explain.
Answer: See Explanation
Explanation:
A. Calculate Daniels AGI
To calculate Daniel's AGI, we have to get his gross income first which will be:
=
Salary income + Net rent + Dividend income
= $60,000 + $6000 + $3500
= $69500
His deductions FOR AGI will be calculated as:
Alimony paid = $12,000
Contribution to traditional IRA = $5,000
Loss on sale of real estate = $2,000 Deduction for AGI = ($19,000)
Adjusted gross income will now be:
= $69500 - $19000
= $50,500
b. Should Daniel itemize his deductions from AGI or take the standard deduction? Explain.
The itemized deductions include:
Mortgage interest on residence = $4,900
Add: Property tax on the residence = $1,200
Add: Contribution to United church = $2,100
Add: State income tax = $300
Total itemized deductions = $ 8,500
Since the total itemized deductions is $8,500 and the deduction for AGI is $19000, he should therefore itemize his deductions as it is cheaper.
Partial income statements for Sherwood Company summarized for a four-year period show the following: 1. Restate the partial income statements to reflect the correct amounts, after fixing the inventory error.2-a. Compute the gross profit percentage for each year (a) before the correction and (b) after the correction.2-b. Does the pattern of gross profit percentages lend confidence to your corrected amounts? 29,000.
Answer:
1. The corrected gross profit are as follows:
2015 = $704,000
2016 = $836,000
2017 = $859,000
2018 = $1,024,000
2-a Gross profit percentage before and after correction are as follows:
Particulars 2015 2016 2017 2018
Before correction 32% 33% 31% 32%
After correction 32% 32% 32% 32%
2-b. Yes. This is because the gross profit percentage for the years are approximately the same at 32% after the correction was made.
Explanation:
Note: This question is not complete. The complete question is therefore provided before answering the question as follows:
Partial income statements for Sherwood Company summarized for a four-year period show the following:
2015 2016 2017 2018
Net Sales $2,200,000 $2,600,000 $2,700,000 $3,200,000
COGS 1,496,000 1,742,00 1,863,000 2,176,000
Gross Profit $704,000 $858,000 $837,000 $1,024,000
An audit revealed that in determining these amounts, the ending inventory for 2016 was overstated by $22.000. The inventory balance on December 31, 2017, was accurately stated. The company uses a periodic inventory system.
Required: 1. Restate the partial income statements to reflect the correct amounts, after fixing the inventory error, 2-a. Compute the gross profit percentage for each year (a) before the correction and (b) after the correction 2-b. Does the pattern of gross profit percentages lend confidence to your corrected amounts?
The explanation of the answer is now given as follows:
1. Restate the partial income statements to reflect the correct amounts, after fixing the inventory error
Note: See the attached excel file for the fixing the inventory error and the restated partial income statements to reflect the correct amounts, after fixing the inventory error.
The effect of the overstatement of closing inventory is reducing the 2016 cost of goods sold. To correct this in the attached excel file, the opening balance is reduced by $22,000 and this makes cost of goods sold of 2016 to increase and the cost of goods sold of 2017 to decrease by $22,000.
2-a. Compute the gross profit percentage for each year (a) before the correction and (b) after the correction
Note: See the attached excel file for the computed the gross profit percentage for each year (a) before the correction and (b) after the correction.
In the attached excel file, the following formula is used:
Gross Profit percentage = Gross profit / Net Sales) * 100
2-b. Does the pattern of gross profit percentages lend confidence to your corrected amounts?
Yes. This is because the gross profit percentage for the years are approximately the same at 32% after the correction was made.
volume_upclosed_captiondescriptionfullscreen According to Mikey, the founder of Holden Outerwear, manufacturing products at five different factories in China resulted in: a.increased paperwork at every step of the shipping process. b.streamlined one-time paperwork to clear customs. c.low-cost shipping and distribution of finished products. d.consolidated shipments which had to be sorted and distributed locally.
Answer: a. increased paperwork at every step of the shipping process.
Explanation:
There is no excerpt attached but this should be the answer.
Having five different factories in China means that Holden Outwear would have to transport things to and fro all five factories including raw materials, intermediate goods and finished goods.
This represents a lot of shipping and shipping comes with paperwork. It would therefore be no surprise if the Holden Outwear is having to go through the bane of increased paperwork for manufacturing at five different factories.
Pension data for Fahy Transportation Inc. include the following: ($ in millions) Discount rate, 9% Expected return on plan assets, 12% Actual return on plan assets, 13% Projected benefit obligation, January 1 $ 550 Plan assets (fair value), January 1 500 Plan assets (fair value), December 31 560 Benefit payments to retirees, December 31 68 Required: Assuming cash contributions were made at the end of the year, what was the amount of those contributions
Answer:
the amount of those contributions is $63 million
Explanation:
The computation of the amount of those contributions is shown below:
Plan assets, end of year $560
Less: Plan assets, Starting of the year -$500
Less: Actual return -$65 ($500 × 13%)
Add: Retiree benefits paid $68
Cash contributions $63 million
Hence, the amount of those contributions is $63 million
Regarding internationalization strategies in multinational enterprises (MNEs), in situations in which a company's products face LOW cost AND also HIGH local responsiveness pressures, the company tends to _______ : Group of answer choices serve domestic and international markets from a single (or from very few) production facilities lower the costs of value creation serve international markets from locations as close as possible to local consumers and preferences centralize marketing and product development decisions
Answer:
The answer is "choice b".
Explanation:
Please find the complete question in the attached file.
In the given scenario by Enhanced diversification of commodities including SKU While local reactivity intensity is increased, businesses would be concentrated on producing products that are more appropriate or perhaps more appropriate for local customer needs. Diversifying also would raise consumers and SKU.
Same facts as #16, except that Jessica files her lawsuit outside the US in a country that uses a "loser pays" rule. Instead of hiring her attorney on a contingency fee, she agrees to pay the attorney a fixed fee of 90,000. Based on a decision tree calculation, the value of Jessica’s litigation BATNA based on these revised facts is (select one):
Answer:
so when the cats eats the dog the dogs take the bone
If a country's nominal interest rate is zero, then Group of answer choices the country's economy is in a liquidity trap. monetary policy is likely to be very effective in stimulating the economy. exchange rates with other countries are likely to increase. exchange rates with other countries are likely to decline. the country's economy has achieved monetary equilibrium.
Answer:
the country's economy is in a liquidity trap.
Explanation:
A liquidity trap exists when interest rate are close to or equal to zero.
When there is a liquidity trap, expansionary monetary supply would not work because people would prefer to hold cash due to the believe that a negative economic event is about to occur e.g. deflation
When there is a liquidity trap, individuals prefer to save their monies rather than buy bonds
Liquidity trap was first discovered by John M. Keynes
Solutions to liquidity trap
1. Policies that would make savings less attractive
2, Increased government spending
Liquidity trap occurred in Japan in the 1990s and this led to a deflation
What are human resources that can help you save for a house? What are nonhuman resources that can help you save for a house?
Answer:
Using cash money for the downpayment is the human resource and maintaining a good credit score is the nonhuman resource.
A division earning a positive profit will always increase its return on investment (ROI) if it increases operating expenses and Group of answer choices investment by the same dollar amount. sales by the same percentage. sales by the same dollar amount. investment by the same percentage.
Answer: Sales by the same dollar amount.
Explanation:
Return on Investment is calculated by the formula:
= (Sales - Operating income) / Investment
From the above, you can see that if investment is increased relative to sales and operating expenses are increased as well, ROI will decrease instead of increase.
This formula deals with dollar amounts not percentages so increasing sales by the same percentage is not right.
Only correct option is to increase sales dollar amount as this would lead to a higher numerator which would then give a larger ROI.
A company's income statement showed the following: net income, $134,000; depreciation expense, $30,000; and gain on sale of plant assets, $4,000. An examination of the company's current assets and current liabilities showed the following changes: accounts receivable decreased $9,400; merchandise inventory increased $18,000; prepaid expenses increased $6,200; accounts payable increased $3,400. Calculate the net cash provided or used by operating activities.
Answer:
The net cash provided or used by operating activities is equal to $148,600.
Explanation:
The net cash provided or used by operating activities can be calculated using the indirect method as follows:
XTZ Co,
Calculation of The Net Cash Provided or Used by Operating Activities
(Indirect Method)
For the Year ....
Particular Amount ($)
Net income 134,000
Adjustment to reconcile net income:
Depreciation expense 30,000
Gain on sale of plant assets (4,000)
(Increase) decrease in current assets:
Decrease in accounts receivable 9,400
Increase in merchandise inventory (18,000)
Increase in prepaid expenses (6,200)
Increase (decrease) in current liabilities:
Increase in accounts payable 3,400
Net cash provided or used by operating activities 148,600
Therefore, the net cash provided or used by operating activities is equal to $148,600.
Jorgansen Lighting, Inc., manufactures heavy-duty street lighting systems for municipalities. The company uses variable costing for internal management reports and absorption costing for external reports to shareholders, creditors, and the government. The company has provided the following data:
Year 1 Year 2 Year 3
Inventories:
Beginning (units) 200 170 180
Ending (units) 170 180 220
Variable costing net operating income $1,080,400 $1,032,400 $996,400
The company's fixed manufacturing overhead per unit was constant at $560 for all three years.
Requried:
Determine each yearâs absorption costing net operating income.
The absorption costing net operating income for Year 1, 2 and 3 is $1,063,000, $1,038,000, $1,018,800 respectively.
The absorption costing NOI of Year 1Change in inventory = Beginning Inventory - Ending Inventory
= 200 units - 170 units
= 30 units
Fixed Manufacturing Overhead Beginning = Beginning Inventory units * Fixed manufacturing overhead per unit
= 200 units * $560
= $112,000
Fixed Manufacturing Overhead Ending = Ending Inventory units * Fixed manufacturing overhead per unit
= 170 units * $560
= $95,200
Deferred in/(release) =Fixed Manufacturing Overhead Ending - Fixed Manufacturing overhead Beginning
= $95,200 - $112,00
= -$16,800
Absorption Costing NOI = Variable Costing NOI + Fixed manufacturing overhead from inventory deferred during the period
= $1,012,400 + -$16,800
= $1,063,000
The absorption costing NOI of Year 2Change in inventory = Beginning Inventory - Ending Inventory
= 170 units - 180 units
= -10 units
Fixed Manufacturing Overhead Beginning = Beginning Inventory units * Fixed manufacturing overhead per unit
= 170 units * $560
= $95,200
Fixed Manufacturing Overhead Ending = Ending Inventory units * Fixed manufacturing overhead per unit
= 180 units * $560
= $100,800
Deferred in/(release) =Fixed Manufacturing Overhead Ending - Fixed Manufacturing overhead Beginning
= $100,800 - $95,200
= $5,600
Absorption Costing NOI = Variable Costing NOI + Fixed manufacturing overhead from inventory deferred during the period
= $1,032,400 + $5,600
= $1,038,000
The absorption costing NOI of Year 3Change in inventory = Beginning Inventory - Ending Inventory
= 180 units - 220 units
= -40 units
Fixed Manufacturing Overhead Beginning = Beginning Inventory units * Fixed manufacturing overhead per unit
= 180 units * $560
= $100,800
Fixed Manufacturing Overhead Ending = Ending Inventory units * Fixed manufacturing overhead per unit
= 220 units * $560
= $123,200
Deferred in/(release) =Fixed Manufacturing Overhead Ending - Fixed Manufacturing overhead Beginning
= $123,200 - $100,800
= $22,400
Absorption Costing NOI = Variable Costing NOI + Fixed manufacturing overhead from inventory deferred during the period
= $996,400 + $22,400
= $1,018,800
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The current spot price of WTI Houston Crude Oil Futures, expiring in 1-year, is $43 (per bbl). You can contract storage cost for oil, for one year, at 2% (of the underlying spot price) on a continuously compounded basis. The risk-free rate is 0.5% per annum on a continuously compounded basis. If the current spot price for oil is $40.50, what is the implied convenience yield for this contract?
Answer:
-3.49%
Explanation:
Theoretical price (Ft) = $43
Current spot price (St) = $40.5
Storage cost (u) = 2%
Risk free rate (Rf) = 0.5%
T = 1 year
Let y = Convenience yield
Ft = St e^(Rf + u - y)T
43 = 40.5 e^(0.005 + 0.02 - y)
y = - 3.49%
Hence, convenience yield = -3.49%
Use the following data to determine the total amount of working capital from the Banner Auto Supplies Balance Sheet for December 31, 2020:
Cash $70,000
Accounts payable $130,000
Accounts receivable 100,000
Salaries and wages payable 20,000
Inventory 140,000
Mortgage payable 180,000
Prepaid insurance 80,000
Total liabilities $330,000
Stock investments 180,000
Land 190,000
Buildings $230,000
Common stock $240,000
Accumulated depreciation (60,000)
Retained earnings 500,000
Total stockholders' equity $740,000
Trademarks 140,000
Total assets $1,070,000
Total liabilities and stockholders' equity $1,070,000
a. 260,000
b. 240,000
c. 160,000
d. 420,000
Answer:
b. 240,000
Explanation:
Calculation to determine the total amount of working capital
First step is to calculate the Current assets
Using this formula
Current assets = Cash + Accounts receivable + Inventory + Prepaid insurance
Let plug in the formula
Current assets= $70,000 + 100,000 + 140,000 + 80,000
Current assets= $390000
Second step is to calculate the Current liabilities using this formula
Current liabilities = Accounts payable + Salaries and wages payable
Let plug in the formula
Current liabilities= $130,000 + 20,000
Current liabilities= $75,000
Now let calculate the working capital using this formula
Working capital = Current assets - Current liabilities
Let plug in the formula
Working capital = $390,000 - 150,000
Working capital = $240,000
Therefore the Working capital is $240,000
When a firm declares bankruptcy, Group of answer choices the claims of preferred shareholders are honored before those of the common shareholders. the maximum that shareholders can lose is their original investment in the firm's stock. bond holders have claim to what is left from the liquidation of the firm's assets after paying the shareholders. the maximum that shareholders can lose is their original investment in the firm's stock AND the claims of preferred shareholders are honored before those of the common shareholders. the owners of common stock are the first in line to receive their claims on the firm's assets.
Answer:
the maximum that shareholders can lose is their original investment in the firm's stock AND the claims of preferred shareholders are honored before those of the common shareholders.
Explanation:
Bankruptcy may be defined as the legal proceedings that involves a person or a business where the person or the business firm is not able to repay the debts that are outstanding. When a firm or a person files a bankruptcy, there is an automatic stay put by the court that blocks the debts.
In case of bankruptcy the different shareholders of the firm losses a maximum of their original investment that they have done in the firm while purchasing the stocks. And also the claims of the preferred shareholders are being honored first than those of common shareholders.