Answer:
The present value of the relevant net cash outflows of the operating lease is $434,416.50.
Explanation:
Salvage value after tax = Salvage value * (100% - Tax rate) = $15,000 * (100% - 30%) = $10,500
Present value of salvage value after tax = Salvage value after tax * Present value of 1 at 6% in 5 years = $10,500 * 0.747 = $7,843.50
Present value of a Year annual operating lease = Annual operating * Present value of 1 at 6% in the years ………… (1)
Using equation (1), we have:
Present value of Year 1 annual operating lease = $105,000 * 0.943 = $99,015
Present value of Year 2 annual operating lease = $105,000 * 0.890 = $93,450
Present value of Year 3 annual operating lease = $105,000 * 0.840 = $88,200
Present value of Year 4 annual operating lease = $105,000 * 0.792 = $83,160
Present value of Year 5 annual operating lease = $105,000 * 0.747 = $78,435
Therefore, we have:
Present value of net cash outflows of the operating lease = Present value of Year 1 annual operating lease + Present value of Year 2 annual operating lease + Present value of Year 3 annual operating lease + Present value of Year 4 annual operating lease + Present value of Year 5 annual operating lease - Present value of salvage value after tax = $99,015 + $93,450 + $88,200 + $83,160 + $78,435 - $7,843.50 = $434,416.50
Therefore, the present value of the relevant net cash outflows of the operating lease is $434,416.50.
During January, its first month of operations, Dieker Company accumulated the following manufacturing costs: raw materials $5,500 on account, factory labor $6,400 of which $5,800 relates to factory wages payable and $600 relates to payroll taxes payable, and factory utilities payable $3,100.
Prepare journal entries for each type of manufacturing cost.
Answer: See explanation
Explanation:
The journal entries for each type of manufacturing cost is prepared below:
Dr Raw material inventory $5500
Cr Account payable $5500
(To record purchase of raw material on account)
Dr Factory labor $6400
Cr Factory wages payable $5800
Cr Payroll taxes payable $600
(To record factory labor costs)
Dr Manufacturing overhead $3100
Cr Utilities payable $3100
(To record entry for utilities payable)
On December 31, 2021, Larry's Used Cars had balances in Accounts Receivable and Allowance for Uncollectible Accounts of $67,000 and $1,075, respectively. During 2022, Larry's wrote off $2,200 in accounts receivable and determined that there should be an allowance for uncollectible accounts of $5,300 at December 31, 2022. Bad debt expense for 2022 would be
Answer:
$6,425
Explanation:
The computation of the bad debt expense for the year 2022 is given below;
Given that
Beginning allowance for uncollectible accounts = $1,075
Accounts written-off = $2,200
Now
Unadjusted balance of allowance for uncollectible accounts is
= Beginning allowance for uncollectible accounts - Accounts written-off
= $1,075 - $2,200
= -$1,125
And, the Ending balance of allowance for uncollectible accounts is $5,300
So,
Bad debt expense is
= Ending balance of allowance for uncollectible accounts - Unadjusted balance of allowance for uncollectible accounts
= $5,300 - (-$1,125)
= $6,425
If the Federal Reserve conducts a $10 million open-market sale and the reserve requirement is 20%, the maximum change in the money supply is: a decrease of $10 million. a decrease of $8 million. an increase of $10 million. a decrease of $50 million.
Answer:
a decrease of $50 million.
Explanation:
Calculation to determine what the maximum change in the money supply is:
Using this formula
Maximum change in the money supply=Federal Reserve /Reserve requirement
Let plug in the formula
Maximum change in the money supply=$10/20%
Maximum change in the money supply=$50 million Decrease
Therefore the maximum change in the money supply is: a decrease of $50 million.
Byrde Company purchased a truck. The seller asked for $11,000, but Byrde paid only $10,000 after negotiation. The owner of Byrde Company believes he got a great deal and the truck is really worth $15,000. What amount does Byrde record on its financial statements for the truck
Answer:
Byrde Company
The amount that Byrde should record on its financial statements for the truck is:
= $10,000.
Explanation:
a) Data and Calculations:
Seller's asking price = $11,000
Amount paid after negotiation = $10,000
Fair price for the truck = $15,000
b) The amount to be recognized or recorded by Byrde on its financial statements for the truck is the cost price, that is, the amount that Byrde paid actually for the truck. The fair price cannot be recognized, since GAAP does not allow for noncurrent assets to be recognized at their fair prices. The historical cost is objective and verifiable, unlike the $15,000 fair price or the seller's asking price.
The amount that should be recorded on the financial statement for the truck is $10,000.
Given that,
The asked value is $11,000.The Company paid the amount of $10,000.The great deal amount should be $15,000.Since the truck was purchased for $10,000 so the same amount should be recorded on the financial statements.
Therefore we can conclude that the amount that should be recorded on the financial statement for the truck is $10,000.
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Sally has a credit card balance of $500 . The credit card company charges a nominal interest rate of 16 percent a year on unpaid balances. The inflation rate is 5 percent a year. Calculate the real interest rate that Sally pays the credit card company.
Answer:
10.48%
Explanation:
Real interest rate = (1 + nominal interest rate) / (1 + inflation rate) - 1
1.16/1.05 - 1 = 10.48
Nominal interest rate is real interest rate plus inflation rate
Real interest rate is interest rate that has been adjusted for inflation
Brodrick Company expects to produce 21,000 units for the year ending December 31. A flexible budget for 21,000 units of production reflects sales of $504,000; variable costs of $63,000; and fixed costs of $141,000. Assume that actual sales for the year are $595,600 (26,900 units), actual variable costs for the year are $114,000, and actual fixed costs for the year are $133,000. Prepare a flexible budget performance report for the year.
Answer:
Brodrick Company
Flexible Budget Performance Report for the year ended December 31
Flexible Actual Variance
Budget Budget
Sales unit 21,000 26,900 5,900 units F
Sales revenue $645,600 $595,600 $50,000 U
Variable costs 80,700 114,000 33,300 U
Fixed costs 141,000 133,000 8,000 F
Total costs $221,700 $247,000 $25,300 U
Profit $423,900 $348,600 $75,300 U
Explanation:
a) Data and Calculations:
Flexible Budget for 21,000 units
Sales revenue = $504,000
Variable cost = $63,000
Fixed costs = $141,000
Flexing the budget with 26,900 units:
Sales revenue = $645,600 ($504,000/21,000 * 26,900)
Variable costs = $80,700 ($63,000/21,000 * 26,900)
why is price discrimination not possible under perfect market conditions
Price discrimination is not possible under perfect market conditions due to availability of many firms in the market which restrict to capture of the market.
What is Price discrimination?Price discrimination is a technique to maximize the profit of the organization. In price discrimination, a similar product will be sold in different markets, in this case, the consumer will move to the lowest price or either with the quality and tries to negotiate.
In perfect market competition, there is a large number of firms are available so sellers can not discriminate the prices of products and services as many options or alternatives are available to Buyers who sell similar products.
This market structure provides easy entry and exit to the market as they are having no barriers due to having the least competition.
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Assume the two countries specialize based on their comparative advantage. If the two countries engage in trade and one unit of food is exchanged for 5 units of clothing, will these terms of trade be mutually beneficial?
Answer:
None of the country have comparative advantage in producing food.
Explanation:
Marland and Teckana are the two countries who produces food and clothing. Marland can produce 20 units of food or 120 units of clothing while Teckana can produce 20 units of food or 80 units of clothing. Since both countries can produce same units of food neither country has comparative advantage in producing food. If the countries engage in exchange for 1 unit of food for 5 units of clothing Teckana country can benefit from the trade because it will get 100 units of clothing for 20 units of food.
makes their first monthly payment (including principal and interest), what amount will they record into their interest expense account
Answer:
The amount Highest Cost Contractors will record into their interest expense account is $60.
Explanation:
Note: This question is not complete. The complete question is therefore provided before answering the question as follows:
The Highest Cost Contractors, Inc. took out an installment loan on 11/1 in the amount of $12,000 for 61 months with an annual interest rate of 6%. On 11/31 when Highest Cost Contractors makes their first monthly payment (including principal and interest), what amount will they record into their interest expense account?
The explanation of the answer is now provided as follows:
The amount of interest can be calculated as follows:
Amount of interest to record = Amount of installment loan * (Annual interest rate / Number of months in a year)
Amount of interest to record = $12,000 * (6% / 12)
Amount of interest to record = $60
Therefore, the amount Highest Cost Contractors will record into their interest expense account is $60.
Use this information for Train Corporation to answer the question that follow. The following financial information was summarized from the accounting records of Train Corporation for the current year ended December 31: Rails Division Locomotive Division Corporate Total Cost of goods sold $46,100 $29,000 Direct operating expenses 27,200 20,600 Sales 94,500 67,500 Interest expense $2,200 General overhead 19,400 Income tax 4,200 The net income for Train Corporation is:__________.
a. $13,300
b. $86,900
c. $70,900
d. $39,100
Answer:
a. $13,300
Explanation:
The computation of the net income for train corporation is given below:
= Sales - cost of goods sold - direct operating expense - interest expense - general overhead - income tax
= $94,500 + $67,500 - $46,100 - $29,000 - $27,200 - $20,600 - $2,200 - $19,400 - $4,200
= $13,300
Hence, the correct option is a.
Projected free cash flows should be discounted at the firm's weighted average cost of capital to find the value of its operations. True False
Answer:
True
Explanation:
Projected free cash flows should be discounted at the firm's weighted average cost of capital to find the value of its operations.
Free Cash flow is refereed to all cash available for distributions after all obligations are taken into account.
So free cash flow from the planning period and representative period should be discounted back using firm's weighted average cost of capital to find the value of its operations.
Why would anyone in their right mind buy a brand new car in the spring when they know that new car models will appear in late summer and early fall and the dealers will use?
A) markdowns to move that old inventory
B) information systems to move that old inventory
C) pull systems to move that old inventory
D) lost sales to move that old inventory
Answer:
A) markdowns to move that old inventory
Explanation:
An inventory is an accounting term used to describe a list of finished goods, goods still in the production line and raw materials that would be used for the manufacturing of more goods in a bid to meet the unending consumer demands.
When new car models appear in late summer and early fall, the dealers will use markdowns to move the old inventory.
A markdown price can be defined as the reduction in the original selling price of a good or service, in order to increase the level of sales. Also, it's used to describe a fall in the value of an asset.
Basically, a markdown is commonly used by businesses to stimulate the demand for their goods and services at a reduced price.
On the other hand, a mark-up price is simply the difference between the cost price of a good (product) or service and its selling price.
Entreprenewship is a process of
to
birth
to
an
entreprise. Discuss
Answer:
Entrepreneurship is a process of giving birth to an enterprise with example. ... “An entrepreneur is a person who is willing and able to convert a new idea or invention into a successful innovation.” -Joseph Schumpeter Entrepreneur is the person responsible for setting up a business or an enterprise.
Explanation:
thank me later
To avoid potential liability for misconduct in corporate operations, directors can refrain from reasonable supervision of work delegated to a. none of the choices. b. corporate employees. c. corporate officers. d. board committees.
Answer:
c. corporate officers.
Explanation:
In the case when the potential obligation is to be avoided for any misconduct while having operations in the corporate so the directors could refrain from the supervision of the delegated work to the corporate officers so that the work could not harm that result in help in attains the goals & objectives
Therefore the option c is correct
The idea that an organization should strive to satisfy the needs of consumers while also trying to achieve the organization's goals reflects the
Answer:
The idea that an organization should strive to satisfy the needs of consumers while also trying to achieve the organization's goals reflects the marketing concept.
Explanation:
The marketing concept is fascinated with the idea of satisfying the customer's wants by producing goods to solve the customer's problem.
The marketing notion states that a business should attempt to meet client wants while pursuing its objectives.
This implies that the marketing concept is the idea that an organization should strive to satisfy customer needs while trying to achieve its goals.
Therefore, the idea that an organization should strive to satisfy the needs of consumers while also trying to achieve the organization's goals reflects the marketing concept.
Metlock, Inc. uses a periodic inventory system. Details for the inventory account for the month of January 2017 are as follows: Units Per unit price Total Balance, 1/1/2017 270 $5.0 $1350 Purchase, 1/15/2017 140 ..5 672 Purchase, 1/28/2017 140 ..5 700 An end of the month (1/31/2017) inventory showed that 220 units were on hand. How many units did the company sell during January 2017?
Answer:
330 units
Explanation:
Particulars Units
Opening 270 Units
Add: Purchases 140 Units
Add :Purchases 140 Units
Total 550 Units
Less: Closing 220 Units
Sales 330 Units
So, the total units the company sold during January 2017 is 330 units.
Fill in the missing numbers for the following income statement. (Input all amounts as positive values. Do not round intermediate calculations.) a.Calculate the OCF. (Do not round intermediate calculations.) b.What is the depreciation tax shield
Full question:
Fill in the missing numbers for the following income statement. (Input all amounts as positive values. Do not round intermediate calculations.)
Sales $ 687,900
Costs $442,800
Depreciation $115,400
EBIT $
Taxes (30%)
Net income $
OCF
What is the depreciation tax shield?
Answer:
Operating Cash Flow(OCF)= $206190
Depreciation tax shield = $34620
Explanation:
To calculate Depreciation tax shield:
Depreciation×tax rate= $115400×0.30=$34620
Operating Cash flow(OCF)= Earnings before interest and taxes(EBIT)+depreciation - income tax expense
So we calculate EBIT and Income tax expense
EBIT= Sales - cost of good sold - depreciation expense
= $ 687,900-$442,800-$115,400= $129,700
Income tax expense= (Sales - cost of goods sold - depreciation expense) × tax rate
=($687900-$442800-$115400)×0.30
=$38910
Therefore, Operating Cash flow(OCF)= $129,700+$$115,400-$38910= $206190
The supplies account had a balance of $880 at the beginning of the year and was debited during the year for $3,846, representing the total of supplies purchased during the year. If $2,797 of supplies are on hand at the end of the year, the supplies expense to be reported on the income statement for the year is
Answer:
the supplies expense to be reported on the income statement for the year is $1,929
Explanation:
The computation of the supplies expense to be reported on the income statement for the year is as follows:
= Beginning supplies account balance + purchase of supplies - closing supplies
= $880 + $3,846 - $2,797
= $1,929
Hence, the supplies expense to be reported on the income statement for the year is $1,929
Both the Government and the contractor have the option of going to court to resolve disputes between them. True False
Answer:
True
Explanation:
A contract can be defined as an agreement between two or more parties (group of people) which gives rise to a mutual legal obligation or enforceable by law.
A contractor can be defined as a self employed individual or business entity that provides services or work for another for an agreed fee.
This ultimately implies that, a contractor is a non-employee of the organization he provides services or work for. Some examples of a contractor are consultants, engineers, lawyers, accountants, auditors, doctors etc.
Basically, the government of a country usually employs the services of contractors for the execution of public projects and works.
Hence, both the Government and the contractor have the option of going to court to resolve disputes between them.
Work to be performed can come from the work package level of the work breakdown structure as well as other sources. Which of these is NOT a source of authorized work to be performed?
Answer: scope creep
Explanation:
Work breakdown structure is a method that's used for completing a project that's complex, such that the project is broken down into smaller bits which brings about easier project management and better team productivity.
Scope creep isn't a source of authorized work to be performed. Scope creep refers to the changes, and the continuous growth for the scope of a project.
A convertible bond is selling for $967, matures in 15 years, has a $1,000 face value, pays interest semiannually, and has a coupon rate of 8 percent. Similar non-convertible bonds are priced to yield 4.25 percent per six months. The conversion ratio is 20. The stock currently sells for $47.50 a share. Calculate the convertible bond's option value.
a. $2.92.
b. $7.27.
c. $1.48.
d. $2.03.
Answer:
D) $8.95
Explanation:
Calculation to determine the convertible bond's option value.
First step is to calculate the Straight bond value
Straight bond value = [.08($1,000)/2]PVIFA4.25%, 30 + $1,000/1.042530
Straight bond value = $958.05
Second step is to calculate the Conversion value
Conversion value = 20($47.50)
Conversion value = $950
Now let determine the convertible bond's option value using this formula
Bonds Option value = Bond value – MAX[Straight bond value, Conversion value]
Let plug in the formula
Bond Option value = $967 − MAX[$958.05, 950]
Bond Option value =$967-$958.05
Bond Option value = $8.95
Therefore the convertible bond's option value is $8.95
How should you ideally start a negotiation discussion?
A.
displaying how sharp and aggressive you can be in negotiations
B.
being unbiased and open-minded
C.
revealing your interest in the product
D.
revealing your budget and the highest price you can pay
Answer:
the answer is c
Explanation:
to get the convo started you should pin point what it is exactly what you like
Những nhân tố ảnh hưởng đến hành vi mua hàng của người tiêu dùng là gì
Nhận thức, động cơ, học tập, niềm tin và thái độ là tất cả các yếu tố tâm lý ảnh hưởng đến việc mua hàng của người tiêu dùng. Quá trình mọi người lựa chọn và giải thích thông tin để đưa ra quyết định mua hàng được gọi là nhận thức.
Companies HD and LD have identical tax rates, total assets, and return on invested capital (ROIC), and their ROIC exceeds their after-tax cost of debt, (1-T) r d. However, Company HD has a higher debt ratio and thus more interest expense than Company LD. Which of the following statements is correct?
A) company hd has a lower roa than company ld.
B) company hd has a lower roe than company ld.
C) the two companies have the same roa.
D) the two companies have the same roe.
E) company hd has a higher net income than company ld.
Answer: A) company hd has a lower ROA than company ld.
Explanation:
Company HD has more debt than Company LD which is why they have a higher interest expense. Interest expense is deducted from revenue to reach net profit so Company HD will have a lower profit than Company LD.
Return on Assets is calculated by dividing Net Income by Total assets. With Company HD having a lower net income, it will also have a lower ROA as a result seeing as the numerator will be lower than that of company LD.
When they act as a profit-maximizing cartel, the total industry profit in the flowers market is per day. Suppose the flowers each company produces are regarded as perfect substitutes, such that if either company charged a price lower than the other, that company would receive all the business and profits in the industry. If both firms attempt to undercut each other, however, the result would be pricing at marginal cost and zero profit for both firms. The two firms intend to operate together in this market indefinitely, and at the beginning of each day, both firms individually choose whether to continue charging the collusive price. A firm that undercuts in a given month will receive (almost) the entire monopoly profit in that period, but no profit in any future periods. If the probability that both firms will continue operating and charging the collusive price in the next period is 0.60, then the expected stream of profits for one firm in the collusive equilibrium is . Tacit collusion is therefore in this scenario. Suppose a third firm with the exact same costs and similarly substitutable flowers enters the market. If this firm joins the cartel, the expected stream of profits for an individual firm is now (again assuming a probability of 0.60 that production occurs in the next period). In this case, a tacit collusive agreement is
Answer:
Total industry profit is $32 per day.
Tacit collusion is better in this situation
Expected profit in collusive equilibrium is $23.7
Tacit collusive agreement is not beneficial.
Explanation:
When the firms do not collude the total industry profit is $32 per day whereas if the firms collude the profits will decline to $23. This clearly shows that tacit collusion agreement is not beneficial for both the firms.
Flynn Company's monthly bank statement showed the ending balance of cash of $18,500. The bank reconciliation for the period showed an adjustment for a deposit in transit of $1,500, outstanding checks of $2,000, a NSF check of $700, bank service charges of $30 and the EFT from a customer in payment of the customer's account of $1,500. Use the information above to answer the following question. What journal entry should be recorded by Flynn Company for the EFT
Answer:
Flynn Company
Journal Entry
Account Titles Debit Credit
Cash $1,500
Accounts Receivable $1,500
To record the direct credit through EFT on account.
Explanation:
a) Data and Analysis:
Ending balance according to bank statement = $18,500
Bank reconciliation adjustment for:
Deposit in transit = $1,500
Outstanding checks = $2,000
NSF check = $700
Bank Charges = $30
EFT (Electronic Fund Transfer) = $1,500
Analysis:
Cash $1,500 Accounts Receivable $1,500
Preferred stock has a par (face) value of $80. The annual dividend is $6.00 per share. Investors in this preferred stock have a required rate of return equal to 8%. Compute the current price of a share of the preferred stock.
Round to the second decimal place.
Answer: $75
Explanation:
Using the Gordon Growth Model:
Price of stock = Next year dividend / (Required return - growth rate)
Growth rate is 0% as dividend does not change per year.
Price of stock = 6 / 8%
= $75
A firm has expected EBIT of $910, debt with a face and market value of $2,000 paying an 8.5% annual coupon, and an unlevered cost of capital of 12%. If the tax rate is 21%, what is the value of the equity
Answer: $4410
Explanation:
Firstly, the value of the levered firm will be:
= EBT( 1- Tax) / Unlevered cost of capital + Debt Value ( Tax Rate)
= 910(1 - 21%) / 12% + 2000(21%)
= 910( 1 - 0.21)/0.12 + 2000(0.21)
= 5990 + 420
= 6410
Then, the value of equity will be:
= VAlue of Firm - Value of Debt
= $6410 - $2000
= $4410
The capital budgeting committee of the Caldwell Pipe Corporation is evaluating the possibility of replacing its old pipe-bending machine with a more advanced model. Information on the existing machine and the new model follows: Existing machine New machine Original cost $200,000 $400,000 Market value now 80,000 Market value in year 5 0 20,000 Annual cash operating costs 40,000 10,000 Remaining life 5 yrs 5 yrs Refer to Caldwell Pipe Corporation. If the company buys the new machine and disposes of the existing machine, corporate profit over the five-year life of the new machine will be ________ than the profit that would have been generated had the existing machine been retained for five years. Select one: a. $230,000 lower b. $150,000 lower c. $150,000 higher d. $170,000 lower
Answer:
c. $150,000 higher
Explanation:
Operating cost of old machine = $40,000 per year
For 5 years, $40,000*5 years = $200,000
Operating cost of new machine = $10,000 per year
For 5 years, $10,000*5 = $50,000
Operating cost of new machine ($50,000) < ($200,000) Operating cost of the old machine. Thus, this will have a positive effect of $150,000 ($200,000-$50,000) on the corporate profit.
The accountant for TI Company is preparing the company's statement of cash flows for the fiscal year just ended. The following information is available: Retained earnings balance at the beginning of the year $163,000 Cash dividends declared for the year 50,800 Net income for the year 98,000 What is the ending balance for retained earnings?a. $261,000.
b. $14,200.
c. $210,200.
d. $282,000.
e. $112,200.
Answer:
$210,200
Explanation:
The retained earning at the beginning of the year is $163,000
The cash dividend is $50,800
The net income is $98,000
Therefore the ending balance for retained earning can be calculated as follows
= 163,000+98,000-50,800
= 261,000-50800
= 210,200
Hence the ending balance for retainerd earnings is $210,200