Answer:
a. Net income for 2021 $1,600,000
Less: Preferred dividends $120,000 (40000*$3)
Net income for Common Stockholders $1,480,000
Divide by Common Shares outstanding 600,000
Basic Earnings per share for 2021 $2.47
b. If company's preferred stock were convertible into common stock, diluted earnings per shares will also have to be calculated.
1. A manager uses the following equation to predict monthly receipts: Y=450+10t time in weeks and y = receipts.) What is the forecast for July 14th if t=4 is the fourth week in January and t = 6 is February 14th of the same year (assume there are 4 weeks in each month)?
a. 690
b. 710
c. 730
d. 750
2. A major reason that decision making is often not such a rational process is that there are: Suppose we have H0:µ1= µ2 versus HA: µ1 ≠ µ2, with level of significance of α =.05 and critical values of zα/2 = ± 1.96, and the computed Test Statistics value of Z = -1.07. What is our decision?
Answer:
1. 690
2. Do not reject the null hypothesis.
Explanation:
1. Month t
At the end of Feb 6
March 4
April 4
May 4
June 2
14th of July 2
Total 24
Therefore on 14th July, t = 24
Forecast: Y = 450+10t = 450 + 10*24 = 450+240 = 690
2. Options are "a. Reject the null hypothesis. b. Do not reject the null hypothesis. c. Take a larger sample. d. Reserve judgment"
In general, if test statistic is more extreme than the critical values at given level of significance then we reject the null hypothesis otherwise we do not reject the null hypothesis.
Here, test statistic for the given two tailed test is Z = -1.07 and critical value at level of significance α = 0.5 is ± 1.96 . Since -1.96<Z<1.96, we can say that we do not reject Null Hypothesis as the test statistic is not extreme than the critical value at given level of significance.
Indigo Company exchanged equipment used in its manufacturing operations plus $3,960 in cash for similar equipment used in the operations of Sweet Company. The following information pertains to the exchange.
Indigo Co. Sweet Co.
Equipment (cost) $36,960 $36,960
Accumulated depreciation 25,080 13,200
Fair value of equipment 16,500 20,460
Cash given up 3,960
Required:
a. Prepare the journal entries to record the exchange on the books of both companies. Assume that the exchange lacks commercial substance.
b. Prepare the journal entries to record the exchange on the books of both companies. Assume that the exchange has commercial substance.
Answer:
A. Indigo Co
Dr Accumulated depreciation 25,080
Dr Equipment 15,840
Dr Equipment $36,960
Cr Cash 3,960
Sweet Co.
Dr Equipment 16,500
Dr Accumulated depreciation 13,200
Dr Cash 3960
Dr Loss on disposal of equipment 3,300
Cr Equipment $36,960
B. Indigo Complete
Dr Accumulated department 25,080
Dr Equiipment 20,460
Cr Equiipment $36,960
Cr Gain on disposal of equipment 78,540
Cr Cash 3,960
Sweet Co.
Dr Equiipment 16500
Dr Accumulated department 13200
Dr Cash 3960
Dr Loss on disposal of equipment 5660
Cr Equiipment 28,000
Explanation:
a. Preparation of the journal entries to record the exchange on the books of both companies. Assume that the exchange lacks commercial substance.
Indigo Co
Dr Accumulated depreciation 25,080
Dr Equipment 15,840
[$36,960+3,960-25,080]
Dr Equipment $36,960
Cr Cash 3,960
Sweet Co.
Dr Equipment 16,500
Dr Accumulated depreciation 13,200
Dr Cash 3960
Dr Loss on disposal of equipment 3,300
[$36,960-(16,500+13,200+3960)
Cr Equipment $36,960
b. Preparation of the journal entries to record the exchange on the books of both companies. Assume that the exchange has commercial substance.
Indigo Complete
Dr Accumulated department 25,080
Dr Equiipment 20,460
Cr Equiipment $36,960
Cr Gain on disposal of equipment 78,540
[(25,080+20,460+$36,960)-3,960]
Cr Cash 3,960
Sweet Co.
Dr Equiipment 16500
Dr Accumulated department 13200
Dr Cash 3960
Dr Loss on disposal of equipment 5660
(16500+13200+3960-28,000)
Cr Equiipment 28,000
Lincoln, Inc., which uses a volume-based cost system, produces cat condos that sell for $140 each. Direct materials cost $22 per unit, and direct labor costs $15 per unit. Manufacturing overhead is applied at a rate of 280% of direct labor cost. Nonmanufacturing costs are $34 per unit. What is the gross profit margin for the cat condos
Answer:
43.57 %
Explanation:
The computation of the gross margin for the cat condos is given below:
Total Manufacturing Cost per unit is
= Direct materials + Direct labor + Manufacturing overhead
= $22 + $15 + ( 280% of $15)
= $79
Now
Gross Profit is
= Selling price per unit - Total Manufacturing Cost per unit
= $140 - $79
= $61
And finally
Gross Profit Margin is
= (Gross Profit ÷ Selling Price ) × 100
= ($61 ÷ $140) × 100
= 43.57 %
The account balances of Paradise Travel Service for the year ended May 31, 20Y6, follow:
Fees earned $900,000
Office expense 300,000
Miscellaneous expense 15,000
Wages expense 450,000
Accounts payable 18,000
Accounts receivable 38,000
Cash 52,000
Common Stock 100,000
Land 450,000
Supplies 3,000
$10,000 of dividends were paid during the year. Retained earnings as of June 1, 20Y5, were $300,000. Prepare a balance sheet as of May 31, 20Y6. When entering assets, enter them in order of liquidity.
Answer:
Paradise Travel Service
Balance Sheet as of May 31, 20Y6:
Assets:
Cash $52,000
Accounts receivable 38,000
Supplies 3,000
Land 450,000
Total assets $543,000
Liabilities and Equity:
Accounts payable 18,000
Common Stock 100,000
Retained Earnings 425,000
Total liabilities and
equity $543,000
Explanation:
a) Data and Calculations:
Paradise Travel Service
Income Statement for the year ended May 31, 20Y6:
Fees earned $900,000
Office expense 300,000
Miscellaneous expense 15,000
Wages expense 450,000
Total expenses 765,000
Net Income $135,000
Statement of Retained Earnings for the year ended May 31, 20Y6:
Retained Earnings, June 1, 20Y5 $300,000
Net Income 135,000
Dividends 10,000
Retained Earnings, May 31, 20Y6 $425,000
b) The balance sheet shows the balances of assets, liabilities and equity at the end of an accounting period. It derives its name from the accounting equation, which states that assets = liabilities + equity. This equation implies that the two sides always balance each other.
A rational buyer will: buy a product until the marginal benefit of consuming the product is less than the price of the product. buy the product only when the marginal benefit of consuming the product is twice as much as the price of the product. not consider costs versus benefits when purchasing a product. keep buying a product until marginal benefit equals price.
Answer:
keep buying a product until marginal benefit equals price
Explanation:
A rational consumer would continue to consume a product until the marginal benefit of the last unit consumed equal marginal cost. At this point, utility is maximised.
For example, if the price of a bottle of water is $4. The utility you derive from the first bottle is 6. So you consume one more bottle, the utility you derive from the second bottle is 5. you buy a third bottle. The utility you derive from the 3rd bottle is 4. At this point utility is maximised and you should stop consuming more water
If you consume a 4th bottle, the utility you would derive from it would be 3 utils. This doesn't make sense because you are paying more for the bottle when compared to the utility you would derive from it
Match each of the following terms A through F with the appropriate definitions 1 through 6.
A. Maker of a note
B. Interest
C. Promissory note
D. Payee of a note
E. Principal of a note
F. Dishonoring a note _____
1. A written promise to pay a specified amount either on demand or at a definite future date. _____
2. The cost of borrowing money for a borrower, alternatively the profit from, lending money for a lender. _____
3. One who signs a note and promises to pay it at maturity. _____
4. The one to whom the promissory note is made payable. _____
5. Refers to a note maker's inability or refusal to pay the note at maturity. _____
6. The amount that the signer of a note agrees to pay back when the note matures, not including interest. Defining promissory notes.
Solution :
A. Maker of a note: 3. It is the person who signs the note and promises to pay.
The maker puts his signature and promises to pay the bearer the amount of the value of the note.
B. Interest: 2. It is the cost of borrowing money and profit for lender.
It is the extra money that the borrower pays to the lender. It is like an income to the lender.
C. Promissory note: 1. It is a promise to pay the signed sum.
It is a note that promises to pay the amount of the value.
D. Payee of a note: 5. It is the person to which the note is payable.
Payee is the individual who is the owner of the note.
E. Principal of a note: E. It is the amount signed to be paid back excluding interest.
It is the basic amount signed to be paid to the bearer.
F. Dishonoring a note: 5. It is inability to pay the signed sum.
Dishonoring is refusal to pay or the inability to pay the value for the signed amount.
PROJECT FOCUS: One day, a sophisticated business man walks into the cafe and asks to speak to the owner. He introduces himself as Brawner Smith and says that he would like to talk to you in private. Brawner has just opened a local record store down the street and would like to purchase your customer lists from music events. Brawner is offering you a rather large sum of money for the e-mail addresses and phone numbers for all of the customers who have attended concerts at the cafe over the past five years. What do you do
Answer:
Explanation:
Solution
At first, we will determine that whether we have communicated to our customers in a past that we will keep their information confidential and never be sold to any other person or business for any future marketing. If we have made such communication, then we should take information confidential and do not give to others.Similarly, if there is no confidentiality communication made in a past, then we can put an offer towards Brawner. We offer him that instead of providing phone numbers and email to him, pay tome, we will email and call the customers and let them know about Brawner and local record store. So in case any customers want something, they will contact directly to you (Brawner) or his shop.
If there is a communication to customers or from customers that the data should be kept private and not shared with anyone, the café owner should not share it.
Decision making based theory:It's crucial to know how the data will be utilised and whether or not it will be shared with the owner of the record store.
Customers should be consulted before the data is shared, and the store owner's details and interest in them should be disclosed.
It makes good commercial sense to provide the data in exchange for money because the café owner has invested a significant amount of time, effort, and money in gathering the information.
An agreement can be reached with the store owner for the sharing of data with other businesses, limiting data usage and avoiding rivalry.
Find out more information about 'Agreement'.
https://brainly.com/question/9110522?referrer=searchResults
Isabel, a calendar-year taxpayer, uses the cash method of accounting for her sole proprietorship. In late December she received a $20,000 bill from her accountant for consulting services related to her small business. Isabel can pay the $20,000 bill anytime before January 30 of next year without penalty. Assume her marginal tax rate is 37 percent this year and next year, and that she can earn an after-tax rate of return of 8 percent on her investments
Required:
a. What is the after-tax cost if Isabel pays the $19,000 bill in December?
b. What is the after-tax cost if Isabel pays the $19,000 bill in January?
c. Based on requirement a and b, should Isabel pay the $19,000 bill in December or January?
Answer:
A. $11,970
B. $11,890
C. January
Explanation:
a. Calculation for the after-tax cost if Isabel pays the $19,000 bill in December
After-tax cost=$19,000 - ($19,000 x 37%)
After-tax cost= $19,000 - $7,030
After-tax cost= $11,970
Therefore the after-tax cost if Isabel pays the $19,000 bill in December will be $11,970
b. Calculation for the after-tax cost if Isabel pays the $19,000 bill in January
First step is to calculate the cost before taxes
Cost before taxes = $19,000 - ($19,000 x 8%/12) Cost before taxes= $19,000 - $127
Cost before taxes= $18,873
Now let calculate the After-tax cost
After-tax cost = $18,873 - ($18,873 x 37%)
After-tax cost= $18,873 - $6,983
After-tax cost = $11,890
Therefore the after-tax cost if Isabel pays the $19,000 bill in January will be $11,890
c. Based on the above calculation for both a and b, Isabel should pay the amount of $19,000 bill in January reason that it has the lowest cost of debt of the amount of $11,890 compare to December which has the cost of debt of the amount of $11,970.
The following information is available for Barnes Company for the fiscal year ended December 31: Beginning finished goods inventory in units 0 Units produced 7,800 Units sold 5,500 Sales $ 1,100,000 Materials cost $ 156,000 Variable conversion cost used $ 78,000 Fixed manufacturing cost $ 702,000 Indirect operating costs (fixed) $ 110,000 The absorption costing operating income is:
Answer:
See below
Explanation:
Material cost
$156,000
Add:
Variable conversion cost used
$78,000
Add:
Fixed manufacturing cost
$702,000
Total manufacturing cost
$936,000
Unit product cost
= Total manufacturing cost / Units produced
= $936,000/7,800
= $120
Ending inventory in unit produced
= Units produced - Units sold
= 7,800 - 5,500
= 2,300 units
Ending inventory under absorption costing
= 2,300 units × $120
= $276,000
By convention, a swap buyer on an interest rate swap agrees to act as the dealer in the swap agreement. hold both principal and interest to contract maturity. periodically pay a fixed rate of interest and receive a floating rate of interest. back both sides of the swap agreement. periodically pay a floating rate of interest and receive a fixed rate of interest.
Answer:
periodically pay a fixed rate of interest and receive a floating rate of interest.
Explanation:
The interest rate (rate of return) can be defined as the percentage of interest or dividends earned on money that is invested.
In Financial accounting, a return refers to the amount of profit generated by an investor on an investment over a specific period of time.
Basically, the interest rate which is typically expressed as a percentage of the initial costs of an investment can either be a gain or a loss on an investment. Therefore, a positive rate of return on an investment over a specific period of time, simply means that an investor is making a profit (gains) while a negative rate of return on an investment over a specific period of time, indicates that the investor is running at a loss.
By convention, a swap buyer on an interest rate swap agrees to periodically pay a fixed rate of interest and receive a floating rate of interest.
Everlast Co. manufactures a variety of drill bits. The company's plant is partially automated. The budget for the year includes $432,000 payroll for 4,800 direct labor-hours. Listed below is cost driver information used in the product-costing system:
Overhead Cost Pool Budgeted Overhead Cost Driver Estimated Cost Driver Level
Machine setups $120,000 # of setups 120 setups
Materials handling 104,400 # of barrels 8,700 barrels
Quality control 264,000 # of inspections 1,100 inspections
Other overhead cost 144,000 # of machine hours 12,000 machine hours
Total overhead $632,400
A current product order has the following requirements:
Machine setups 8 setups
Materials handling 606 barrels
Quality inspections 80 inspections
Machine hours 830 machine hours
Direct labor hour 336 hours
Using ABC, how much other overhead is assigned to the order?
a. $9,960.
b. $8,000.
c. $11,108.
d. $45,992.
e. $19,200.
Answer:
See below
Explanation:
Given the above information
Payroll = $432,000 ÷ 4,800 = $90 per hour
Setup = $120,000 / 120 = $1,000 per setup
Material handling barrel = $104,400 / 8,700 = $11.95 per barrel
Quality control inspection = $264,000 / 1,100 = $240 per inspection
Overhead = $144,000 / 12,000 = $12 per machine hour
Details of the current product requirement
8 setup = 8 × $1,000 = $8,000
606 barrels = 606 × $11.95 = $7,242
80 inspections = 80 × $240 = $19,200
830 machine hours = 830 × $12 = $9,960
336 labor hours = 336 × $90 = $30,240
Total overhead assigned to order = $74,642
As part of its commitment to quality, the J. J. Borden manufacturing company is proposing to introduce just-in-time (JIT) production methods. Managers of the company have an intuitive feel regarding the financial benefits associated with a change to JIT, but they would like to have some data to inform their decision making in this regard. You are provided with the following data:
Item ExistingSituation AfterAdopting JIT
Manufacturing costs as percentage of sales:
Product-level support 15 % 4 %
Variable manufacturing overhead 28 10
Direct materials 30 20
Direct manufacturing labor 20 13
Other financial data:
Sales revenue $ 1,430,000 $ 1,810,000
Inventory of WIP 260,000 46,000
Other data:
Manufacturing cycle time 60 days 30 days
Inventory financing costs (per annum) 10 % 10 %
Required:
As the management accountant for the company, prepare an estimate the financial benefits associated with the adoption of JIT. Specifically, what is the estimated change in annual operating income attributable to the JIT implementation?
Answer:
A. $74,100 $954,700
B. $880,600
Explanation:
A. Preparation to estimate the financial benefits associated with the adoption of JIT
Current situation After JIT
Sales 1,430,000 1,810,000
Less costs
Production level support 214,500 72,400
(15%*1,430,000=214,500)
(4%*1,810,000=72,400)
Variable manufacturing overhead 400,400 181,000
(28%*1,430,000=400,400)
(10%*1,810,000=181,000)
Direct material 429,000 362,000
(30%*1,430,000=429,000)
(20%*1,810,000=362,000)
Direct manufacturing labor 286,000 235,300
(20%*1,430,000=286,000)
(13%*1,810,000=235,300)
Inventory financing costs 26,000 4,600
(10%*260,000=26,000)
(10%*46,000=4,600)
Total costs 1,355,900 855,300
Operating profits $74,100 $954,700
(1,430,000-1,355,900)
(1,810,000-855,300)
Therefore the the financial benefits associated with the adoption of JIT will be $74,100 $954,700
B. Preparation for the estimated change in annual operating income attributable to the JIT implementation
Current situation After JIT Change
Sales 1,430,000-1,810,000=-380,000
Less costs
Production level support 214,500-72,400 =142,100
Variable manufacturing overhead 400,400 -181,000=219,400
Direct material 429,000-362,000=67,000
Direct manufacturing labor 286,000- 235,300= 50,700
Inventory financing costs 26,000-4,600 =21,400
Total costs 1,355,900-855,300=500,600
Operating profits 74,100-954,700=880,600
Therefore the estimated change in annual operating income attributable to the JIT implementation will be 880,600
Washtenaw Corporation uses a job-order costing system. The following data are for last year: Estimated Direct Labor Hours 14,000 Estimated Machine Hours 12,000 Estimated Manufacturing Overhead Cost $42,600 Actual Direct Labor Hours 11,000 Actual Machine Hours 13,000 Actual Manufacturing Overhead Cost $39,000 Washtenaw applies overhead using a predetermined rate based on direct labor-hours. What predetermined overhead rate was used last year
Answer:
$3.25 per direct labor-hour
Explanation:
Calculation for predetermined overhead rate was used last year
Predetermined overhead rate = $39,000 ÷ 12,000 direct labor-hours
Predetermined overhead rate= $3.25 per direct labor-hour
Therefore the predetermined overhead rate was used last year was $3.25 per direct labor-hour
The gross domestic product (GDP) of the United States is defined as the market value of allfinal goods and services produced within the United States in a given period of time. Based on this definition, indicate which of the following transactions will be included in (that is, directly increase) the GDP of the United States in 2018.
a. An accountant starts a client's 2018 tax return on April 14, 2019, finishing it just before midnight on April 15, 2019. Chocolate Express, a Swiss chocolate company, produces a chocolate bar at a plant in Illinois on December 5, 2018.
b. An elementary school student buys the chocolate bar on December 24. Rotato, a U.S. tire company, produces a set of tires at a plant in Michigan on September 13, 2018. It sells the set of tires to Speedmaster for use in the production of a two-door coupe that will be made in the United States in 2018. (Note: Focus exclusively on whether production of the set of tires increases GDP directly, and ignore the effect of production of the two-door coupe on GDP.)
c. Zippycar, a U.S. automobile company, produces a convertible at a manufacturing plant in Minneapolis on January 9, 2018. It sells the car at a dealership in San Diego on February 24, 2018.
d. Athleticus, a U.S. shoe company, produces a pair of sneakers at a plant in Vietnam on March 17, 2018. Athleticus imports the pair of sneakers into the United States on May 21, 2018.
Answer:
Chocolate Express, a Swiss chocolate company, produces a chocolate bar at a plant in Illinois on December 5, 2018.
b. An elementary school student buys the chocolate bar on December 24..
c. Zippycar, a U.S. automobile company, produces a convertible at a manufacturing plant in Minneapolis on January 9, 2018. It sells the car at a dealership in San Diego on February 24, 2018.
d. Athleticus, a U.S. shoe company, produces a pair of sneakers at a plant in Vietnam on March 17, 2018. Athleticus imports the pair of sneakers into the United States on May 21, 2018.
Explanation:
Gross domestic product is the total sum of final goods and services produced in an economy within a given period which is usually a year
GDP calculated using the expenditure approach = Consumption spending by households + Investment spending by businesses + Government spending + Net export
Net export = exports – imports
When exports exceed import there is a trade deficit and when import exceeds import, there is a trade surplus.
Items not included in the calculation off GDP includes:
1. services not rendered to oneself
2. Activities not reported to the government
3. illegal activities
4. sale or purchase of used products
5. sale or purchase of intermediate products
The accountant's work would be included in 2019's GDP
The chocolate purchase would be included in GDP as part of consumption expenditure
Tire is an intermediate good in this question and would not be included in GDP
The purchase of the shoe from Vietnam would have no effect on GDP because it decreases net export
) It can be supposed that an increase in the importance of fitness and wellness in people's lives prompted Apple to include features like the built-in compass and always-on workout apps. That increased importance in fitness is part of the __________________ societal force. a not selected option a economic b not selected option b natural c selected option c cultural d not selected option d demographic e not selected option e political
Answer:
C. Cultural.
Explanation:
Culture can be defined as the general way of life of a group of people living together in a particular location or society.
Basically, culture comprises of beliefs, values, behaviors, language, dressing, cuisine, music, symbols, arts, social habits, knowledge, customs, laws pertaining to a particular group of people living together in a society.
This ultimately implies that, culture are acquired and passed from one generation to another.
A cultural trait can be defined as the smallest characteristics of human activity (actions) that is mainly acquired socially and transmitted from one generation to another through various modes of communication. Thus, these unique behavioral informations or characteristics and beliefs acquired by people socially are transmitted from one individual or group of people to another.
Basically, cultural traits play a significant role in the way of life of a group of people in that it is a unique collection of various cultural elements that are closely related such as behaviors and beliefs.
Hence, it can be supposed that an increase in the importance of fitness and wellness in people's lives prompted Apple to include features like the built-in compass and always-on workout apps. Thus, that increased importance in fitness is part of the cultural societal force because it is a unique assortment of behaviors that distinguish the people.
M Corp. has an employee benefit plan for compensated absences that gives each employee 15 paid vacation days. Vacation days can be carried over indefinitely. Employees can elect to receive payment in lieu of vacation days. At December 31, 2021, M's unadjusted balance of liability for compensated absences was $35,400. M estimated that there were 200 total vacation days available at December 31, 2021. M's employees earn an average of $177 per day. After recording any necessary adjustment, in its December 31, 2021, balance sheet, what amount of liability for compensated absences is M required to report
Answer:
$35,400
Explanation:
Calculation for what amount of liability for compensated absences is M required to report
Using this formula
Liability for compensated absences=Total vacation days available at December 31, 2021 *Average wage per day
Let plug in the formula
Liability for compensated absences=200*$177 per day
Liability for compensated absences=$35,400
Therefore the Liability for compensated absences at December 31, 2021 will be $35,400
A common error made when solving a future value of an annuity problem is: Multiple Choice Using factor tables to help solve the problem. Dividing the annual deposit by the number of years before calculating the problem. Using a financial calculator to help solve the problem. Multiplying the number of years and the interest rate before calculating the problem. Multiplying the annual deposit and the number of years before calculating the problem.
Answer:
Multiplying the annual deposit and the number of years before calculating the problem.
Explanation:
An annuity can be defined as a sequence of payment that is typically made at equal intervals i.e at specific period of time.
Basically, annuity can be calculated using the compound interest formula. It is given by the mathematical expression;
[tex] A = P(1 + \frac{r}{n})^{nt}[/tex]
Where;
A is the future value.
P is the principal or starting amount.
r is annual interest rate.
n is the number of times the interest is compounded in a year.
t is the number of years for the compound interest.
Additionally, the time period between each payment is called payment period.
The term of an annuity refers to the time from the beginning of the first payment made by an individual to the end of the last payment period.
A common error made when solving a future value of an annuity problem is multiplying the annual deposit and the number of years before calculating the problem.
The Best Manufacturing Company is considering a new investment. Financial projections for the investment are tabulated here. The corporate tax rate is 34%. Assume all sales revenue is received in cash, all operating costs and income taxes are paid in cash, and all cash flows occur at the end of the year. All net working capital is recovered at the end of the project.
Year 0 Year 1 Year 2 Year 3 Year 4
Investment $40,000
Sales revenue $20,500 $21,000 $21,500 $18,500
Operating costs 4,300 4,400 4,500 3,700
Depreciation 10,000 10,000 10,000 10,000
Change in NWC 460 510 560 460 ?
Change in NWC in year 4 will be sum of all the NWC needed in year 0-3.
A. Compute the incremental net income of the investment for each year. Do not intermediate calculations.
Year 1 Year 2 Year 3 Year 4
Net income $ $ $ $
B. Compute the incremental cash flows of the investment for each year. Do not round intermediate calculations. Negative amounts should be indicated by a minus sign.
Year 0 Year 1 Year 2 Year 3 Year 4
Cash Flow $ $ $ $ $
C. Suppose the appropriate discount rate is 12%. What is the NPV of the project? Do not Round intermediate calculations and round your final answer to 2 decimal places.
NPV $____
Answer:
The Best Manufacturing Company
A. Incremental Net Income:
Year 0 Year 1 Year 2 Year 3 Year 4
Sales revenue $20,500 $21,000 $21,500 $18,500
Operating costs 4,300 4,400 4,500 3,700
Depreciation 10,000 10,000 10,000 10,000
Net Income 6,200 6,600 7,000 4,800
Incremental NI 6,200 400 300 -3,200
B. Incremental cash flows:
Investment -$40,000
Sales revenue $20,500 $21,000 $21,500 $18,500
Operating costs -4,300 -4,400 -4,500 -3,700
Change in NWC -460 -510 -560 -460 1,990
Net Cash flows -24,260 $16,090 $16,440 $14,340 1,990
Incremental
cash flows -$24,260 $8,170 $350 -$2,100 -$12,440
C. NPV = $14,686.77
Explanation:
a) Data and Calculations:
Corporate tax rate = 34%
Year 0 Year 1 Year 2 Year 3 Year 4
Investment $40,000
Sales revenue $20,500 $21,000 $21,500 $18,500
Operating costs 4,300 4,400 4,500 3,700
Depreciation 10,000 10,000 10,000 10,000
Net Income 6,200 6,600 7,000 4,800
Incremental NI 6,200 400 300 -3,200
Incremental cash flows:
Investment -$40,000
Sales revenue $20,500 $21,000 $21,500 $18,500
Operating costs -4,300 -4,400 -4,500 -3,700
Change in NWC -460 -510 -560 -460 1,990
Net Cash flows -24,260 $16,090 $16,440 $14,340 1,990
Incremental
cash flows -$24,260 $8,170 $350 -$2,100 -$12,440
Net Present Value of the project:
Net Cash flows Discount PV
Factor
Year 0 -24,260 1 -$24,260.00
Year 1 16,090 0.893 14,368.37
Year 2 16,440 0.797 13,102.68
Year 3 14,340 0.712 10,210.08
Year 4 1,990 0.636 1,265.64
NPV $14,686.77
I have a group of friends. One thing we have in common is that we all want a Tesla Model 3. We can all afford to buy a Tesla Model 3. However, we are all unwilling to pay the current price for a Tesla Model 3. Thus, my group of friends are not this:_______.
a. cool in any sense of the word
b. a market of potential Tesla customers
c. a positioning market group
d. a useful segmenting base
Answer:
b. a market of potential Tesla customers
Explanation:
As given all friend afford to buy a Tesla Model 3 and unwilling to pay the current price so group of friends is a market of potential Tesla customersA potential market is a group of people from the entire population who show some interest in buying a particular product or service. so correct option is b. a market of potential Tesla customersManufacturing overhead for the month was underapplied by $6,000. The company allocates any underapplied or overapplied manufacturing overhead among work in process, finished goods, and cost of goods sold at the end of the month on the basis of the overhead applied during the month in those accounts. The journal entry to record the allocation of any underapplied or overapplied manufacturing overhead for January would include the following:
Work In Process Finished Goods Cost of Goods Sold Total
Direct materials $10,670 $12,000 $81,120 $103,790
Direct labor 11,630 15,000 101,400 128,030
Manufacturing
overhead applied 9,680 9,680 68,640 88,000
Total $31,980 $36,680 $251,160 $319,820
Manufacturing overhead for the month was underapplied by $6,000.
The Corporation allocates any underapplied or overapplied manufacturing overhead among work in process, finished goods, and cost of goods sold at the end of the month on the basis of the manufacturing overhead applied during the month in those accounts.
The journal entry to record the allocation of any underapplied or overapplied manufacturing overhead for May would include the following:
a. credit to Work in Process of $31,980.
b. debit to Work in Process of $660.
c. credit to Work in Process of $660.
d. debit to Work in Process of $31,980.
Answer:
b. debit to Work in Process of $660.
Explanation:
Particulars Work in Finished Cost of Goods Sold Total
Process Goods
Manufacturing
overhead
applied during
the month 9680 9680 68640 88000
Percentage of total 11.0% 11.0% 78.0% 100.0%
Allocation of under-applied
manufacturing overhead 660 660 4680 6000
Tammy, a resident of Virginia, is considering purchasing a $100,000 North Carolina bond that yields 4.6% before tax. She is in the 35% Federal marginal tax bracket and the 5% state marginal tax bracket. She is aware that State of Virginia bonds of comparable risk are yielding 4.5%. However, the Virginia bonds are exempt from Virginia tax, but the North Carolina bond interest is taxable in Virginia. Tammy can deduct any state taxes paid on her Federal income tax return. In your analysis, assume that the bond amount is $100,000.
The question is incomplete. The complete question is :
Tammy, a resident of Virginia, is considering whether to purchase a $100, 000 North Carolina bond that yields 4.6% before tax. She is in the 35% Federal marginal tax bracket and the 5% state marginal tax bracket. Tammy is aware that State of Virginia bonds of comparable risk are yielding 4.5%. Virginia bonds are exempt from Virginia tax, but the North Carolina bond interest is taxable in Virginia. Tammy can deduct all state taxes paid on her Federal income tax return. In your analysis, assume that the bond amount is $100,000.If required, round your computations and answers to the nearest dollar. Determine the after tax income from each bond. Virginia Bond: $ 4, 600 North Carolina Bond: $ 4, 451 Which of the two options will provide the greater after-tax return to Tammy? Virginia bond
Solution :
Assuming that the bond amount is $100,000.
After the tax income from the Virginia bond is given by:
= 100,000 x 4.5%
= $ 4500
After the income tax from the North Carolina bond :
= (100,000 x 4.6%) x (1-5%) + (100,000 x 4.6% x 5% x 0.35)
= $ 4451
Therefore the Virginia bond will give an after tax higher return.
Milea Inc. experienced the following events in Year 1, its first year of operations:
1. Received $13,500 cash from the issue of common stock
2. Performed services on account for $45,000
3. Pald the utility expense of $1,150.
4. Collected $36,540 of the accounts receivable.
5. Recorded $8,100 of accrued salaries at the end of the year
6. Paid a $1,050 cash dividend to the stockholders.
Required
1. Prepare the income statement
2. Prepare the statement of changes in stockholders' equity
3. Prepare the balance sheet as of December 31.
4. Prepare the statement of cash flows for the Year 1 accounting period.
Answer:
1. Net income = $35,750
2. Stockholders' equity = $48,200
3. Total assets = Total Equity and Liabilities = $56,300
4. Net cash generated = $47,840
Explanation:
1. Prepare the income statement
Milea Inc.
Income Statement
For the Year ended 31 December Year 1
Details Amount ($)
Revenue:
Service income 45,000
Expenses:
Utility expense (1,150)
Accrued salaries (8,100)
Net income 35,750
Dividend paid (1,050)
Retained earnings 34,700
2. Prepare the statement of changes in stockholders' equity
Milea Inc.
Statement of changes in stockholders' equity
For the Year ended 31 December Year 1
Details Amount ($)
Common stock 13,500
Retained earnings 34,700
Stockholders' equity 48,200
3. Prepare the balance sheet as of December 31.
Milea Inc.
Balance Sheet
As of 31 December Year 1
Details $
Assets
Current Assets
Ending cash balance 47,840
Accounts receivable ($45,000 - $36,540) 8,460
Total assets 56,300
Equity and Liabilities
Stockholders' equity 48,200
Liabilities
Current liabilities
Accrued salaries 8,100
Total Equity and Liabilities 56,300
4. Prepare the statement of cash flows for the Year 1 accounting period.
Milea Inc.
Statement of Cash Flows
For the Year ended 31 December Year 1
Details $ $
Net income 35,750
Adjustment to reconcile net income:
(Increase) decrease in current assets:
Accounts receivable ($45,000 - $36,540) (8,460)
Increase (decrease) in current liabilities:
Accrued salaries 8,100
Net cash from operating activities 35,390
Cash flow from financing activities:
Common stock 13,500
Dividend paid (1,050)
Net cash from financing activities 12,450
Net cash generated 47,840
Beginning cash balance 0
Ending cash balance 47,840
Starbucks opened its first store in Seoul, Korea in October 2002. The price of a tall vanilla latte is 3,000 Korean Won. In New York City, the price of a tall vanilla latte is $3.00. The exchange rate between Korean Won and U.S. dollars is Won 1,150/$. According to purchasing power parity, is the Korean Won overvalued or undervalued
Answer:
The Korean Won is undervalued
Explanation:
The Korean Won is undervalued if we determine this measure by comparing the prices of the vanilla latte at a Korean Starbucks and at an American Starbucks.
If purchasing power parity was perfectly equal, the latte at the Seoul Starbucks would be priced at $3,450, because the exchange rate is 1,150/$ and $3 x 1,1150 = 3,450, $3 being the price of the latte in New York City.
We can see that the latte in Seoul only costs 3,000 Won, so, under this comparison, the Won is undervalued by 450 Won.
What is the first step in the standard purchasing process practiced by most companies
Answer:
requisition
Explanation:
its correct :D
The first step in the standard purchasing process practised by most companies is requisition.
What do you understand by requisition?Requisition is a request for goods or services made by an employee to the person or department in a company that is responsible for purchasing. If the request is approved, that entity will submit a purchase order to a supplier for the goods or services. In this context, a requisition is also known as a purchase requisition.
Requisitions are usually submitted in a standardized format on paper form or through e-procurement software that automates some of the tasks involved and reduces duplication of effort. A requisition form, whether physical or digital, typically includes the details about the item requested, the date of the request, the individual and department making the request and the location where the goods should be delivered.
Copies of the requisition, the purchase order, the invoice and the packing slip are usually stored together.
Learn more about requisition, here:
https://brainly.com/question/29643606
#SPJ5
A $200,000 loan amortized over 13 years at an interest rate of 10% per year requires payments of $21,215.85 to completely remove the loan when interest is charged on the unrecovered balance of the principal. If interest is charged on the original principal instead of the unrecovered balance, what is the loan balance after 13 years provided the same $21,215.85 payments are made each year
Answer:
Loan amount = $184,193.95
Explanation:
Interest will remain same each year. Interest per year = 200,000*10% = $20,000
Installment $21,215.85
Less: Interest $20,000
Payment to Principal $1,215.85
Total principal repaid in 13 years = $1,215.85 * 13 years = $15,806.05
So, the principal left = $200,000 - $15,806.05 = $184,193.95
If Cho's boss is interested in a graphical representation of the relationship between the price and quantity of televisions demanded, you would advise your coworker to construct_____________ using the data provided. However, if Cho's boss is more interested in the detailed numbers used to construct this visual representation, you would instead advise your coworker that_________ would be more appropriate.
Answer:
supply curve
supply schedule
Explanation:
From the question, we are given an instance that If Cho's boss is interested in a graphical representation of the relationship between the price and quantity of televisions demanded, i would advise your coworker to construct supply curve using the data provided. However, if Cho's boss is more interested in the detailed numbers used to construct this visual representation, you would instead advise your coworker that supply schedule would be more appropriate.
The supply curve can be regarded as
graphic representation that gives the
correlation between quantity supplied and cost of a good for a particular period of time.the left vertical axis con rain the price, the horizontal axis contains the quantity supplied .
Supply schedule can be regarded as table that gives the relationship between quantity supplied and the
price of a good
Problem 4-8 Sales and Growth [LO2] The most recent financial statements for Alexander Co. are shown here: Income Statement Balance Sheet Sales $ 42,950 Current assets $ 17,580 Long-term debt $ 37,070 Costs 35,550 Fixed assets 68,350 Equity 48,860 Taxable income $ 7,400 Total $ 85,930 Total $ 85,930 Taxes (21%) 1,554 Net income $ 5,846 Assets and costs are proportional to sales. The company maintains a constant 35 percent dividend payout ratio and a constant debt-equity ratio. What is the maximum dollar increase in sales that can be sustained assuming no new equity is issued
Answer:
$3,621.96
Explanation:
ROE = Net income/Equity * 100
ROE = 5846/48860*100
ROE = 11.9648%
Dividend payout ratio = 35%
Retention Ratio = 1 - 35% = 65%
Sustainable growth rate = (ROE*b)/(1-ROE*b)
Sustainable growth rate = (11.9648%*0.65)/(1- (11.9648%*0.65%))
Sustainable growth rate = 8.43%
Therefore, Maximum Dollar Increase in sales = Sales * Sustainable growth rate = 42,950 * 8.43% = $3,621.96
A refrigerator costs $800 on an installment plan that requires a down payment of $140 and monthly payments for 12 months. What are the monthly payments of the plan?
When the economy is doing well, the financial market is also guaranteed to do well.
True
False
Skysong Inc., a provider of consulting services, was founded on October 1, 2022. At the end of the first month of operations, the company decided to prepare an income statement, retained earnings statement, and balance sheet using the following information. Accounts payable $ 3,700 Supplies $ 2,650 Interest expense 350 Supplies expense 360 Equipment (net) 48,000 Depreciation expense 260 Salaries and wages expense 2,800 Service revenue 19,540 Bonds payable 21,800 Salaries and wages payable 590 Unearned service revenue 4,190 Common stock 9,900 Accounts receivable 1,450 Interest payable 150 Cash 4,000 Using the information, answer the following questions.
Required:
a. Prepare an income statement for the month of October 2022.
b. Prepare a retained earnings statement for the month of October 2022.
c. Prepare a balance sheet as of October 31, 2022.
Answer:
a. Income Statement for the month of October 2022
Revenue:
Service revenue $19,540
Expenses:
Salaries and Wages $2,800
Supplies Expenses $360
Depreciation Expenses $260
Interest Expenses $350
Total Expenses $3,770
Net Income $15,770
b. Retained earnings statement for the month of October 2022
Retained Earnings, October 1, 2020 $0
Add: Net Income $15,770
Retained Earnings, October 31, 2020 $15,770