Answer:
a. General Journal Format:
Accounts Titles Debit Credit
Cash $34,500
Common stock $34,500
To record the issue of common stock for cash.
Inventory $27,600
Cash $27,600
To record the purchase of inventory for cash.
Cash $31,000
Sales revenue $31,000
To record the sale of goods for cash.
Cost of goods sold $15,400
Inventory $15,400
To record the cost of goods sold.
b. T-accounts:
Cash
Accounts Titles Debit Credit
Common stock $34,500
Inventory $27,600
Sales revenue 31,000
Common stock
Accounts Titles Debit Credit
Cash $34,500
Inventory
Accounts Titles Debit Credit
Cash $27,600
Cost of goods sold $15,400
Sales revenue
Accounts Titles Debit Credit
Cash $31,000
Cost of goods sold
Accounts Titles Debit Credit
Inventory $15,400
c. Gross margin:
Sales revenue $31,000
Cost of goods sold 15,400
Gross margin $15,700
d. Net Cash Flow from operating activities for Year 1:
Cash from customers $31,000
Cash paid to suppliers (27,500)
Net cash flow from
operating activities $3,500
Explanation:
a) Data and Analysis of Transactions:
Cash $34,500 Common stock $34,500
Inventory $27,600 Cash $27,600
Cost of goods sold $15,400 Inventory $15,400
Cash $31,000 Sales revenue $31,000
AP* Price discrimination occurs when differences in a product's price reflect differences in marginal costs differences in a product's price reflect differences in marginal costs a products's average cost is greater than its average revenue a products's average cost is greater than its average revenue differences in a product's price do not reflect differences in costs of production differences in a product's price do not reflect differences in costs of production a product's average cost is less than its average revenue a product's average cost is less than its average revenue the supply of the product is elastic
Answer:
differences in a product's price do not reflect differences in costs of production.
Explanation:
Price can be defined as the amount of money that is required to be paid by a buyer (customer) to a seller (producer) in order to acquire goods and services.
In sales and marketing, pricing of products is considered to be an essential element of a business firm's marketing mix because place, promotion and product largely depends on it.
One of the importance associated with the pricing of products is that, it improves the image of a business firm.
Price discrimination refers to the situation in which a business firm sells an identical product to different consumers at different selling price based on reasons that are not in any way associated or related with its manufacturing cost.
This ultimately implies that, price discrimination occurs when differences in a product's price do not reflect differences in costs of production.
The owners of Whitewater rafting are currently contemplating a manufacturing process (Old Process) that will require an investment of $4,000 and a variable cost of $6 per raft vs. a larger (New Process) initial investment of $20,000 with more automated equipment that would reduce their variable cost of manufacture to $2 per raft. Compare the two manufacturing processes proposed here. For what volume demand should each process be chosen?
A. From 0 to 1000 choose Old Process, From 1000 to infinity choose New Process
B. From 0 to 4000 choose New Process, From 4000 to infinity choose Old Process
C. From 0 to 4000 choose Old Process, From 4000 to infinity choose New Process
D. Always use the Old Process and never use the New Process
E Always use the New Process and never use the Old Process
Answer:
C. From 0 to 4000 choose Old Process, From 4000 to infinity choose New Process
Explanation:
Let the number of raft be denoted by Y
We are told that old process requires an investment of $4,000 and a variable cost of $6 per raft
Thus, old process cost is;
C_old = 4000 + 6Y
We are told that the new process has an investment of $20,000 and that the variable cost is $2 per raft..
Thus, new process cost is;
C_new = 20000 + 2Y
To find the volume demand by which each process will be chosen, we will equate both old and new costs to get;
4000 + 6Y = 20000 + 2Y
Rearranging, we have;
6Y - 2Y = 20000 - 4000
4Y = 16000
Y = 16000/4
Y = 4000
Thus, old process should be applied from 0 to 4000 and new process should be applied from 4000 to infinity.
Thus, option C is correct.
Farris Corporation, which has only one product, has provided the following data concerning its most recent month of operations: Selling price $108 Units in beginning inventory 0 Units produced 8,900 Units sold 8,500 Units in ending inventory 400 Variable costs per unit: Direct materials $ 17 Direct labor $ 59 Variable manufacturing overhead $ 5 Variable selling and administrative expense $ 9 Fixed costs: Fixed manufacturing overhead $133,500 Fixed selling and administrative expense $ 8,700 What is the net operating income for the month under absorption costing
Answer:
Net operating profit= 441,800
Explanation:
The absorption costing method includes all costs related to production, both fixed and variable. The unit product cost is calculated using direct material, direct labor, and total unitary manufacturing overhead.
First, we need to calculate the unitary production cost:
Unitary production cost= 17 + 9 + 5 + (133,500/8,900)
unitary production cost= $46
Now, the income statement:
Sales= 8,500*108= 918,000
COGS= (391,000)
Gross profit= 527,000
Total selling and administrative expense= (8,700 + 9*8,500)= (85,200)
Net operating profit= 441,800
The following information applies to the questions displayed below Over a four-year period, Jackie Corporation reported the following series of gross profits 2018 2019 2020 2021 $60,000 $66,000 $74,000 $90,000 Cost of goods sold32,000 46,00028,000 48,000 $28,000 $20,000 $46,000 $42,000 Net sales Cross profit In 2021, the company performed a comprehensive review of its inventory accounting procedures. Based on this review company records reveal that ending inventory was understated by $11,000 in 2019. Inventory in all other years is correct. Problem 6-10A Part 1
Required:
1. Calculate the gross profit ratio for each of the four years based on amounts originally reported. (Round your answers to the nearest whole percent.) Gross Profit Ratio 2018 2019 2020 2021 The following information applies to the questions displayed below Over a four-year period, Jackie Corporation reported the following series of gross profits 2021 Net sales Cost of goods sold Gross profit $60,000 $66,000 $74,000 $90,000 $28,000 $20,000 46,000 $42,000 In 2021, the company performed a comprehensive review of its inventory accounting procedures. Based on this review, company records reveal that ending inventory was understated by $11,000 in 2019. Inventory in all other years is correct
2. Calculate the gross profit ratio for each of the four years based on corrected amounts. (Round your answers to the nearest whole percent.) Gross Ratio 2018 2019 2020 2021
Answer:
1. Gross Profit ratio
2018 47%
2019 30%
2020 62%
2021 47%
2. Gross Profit ratio
2018 47%
2019 47%
2020 47%
2021 47%
Explanation:
1. Calculation for the gross profit ratio for each of the four years based on amounts originally reported.
2018 2019 2020 2021
Net sales $60,000 $66,000 $74,000 $90,000
Less Cost of goods sold $32,000 $46,000 $28,000 $48,000
=Gross profit$ 28,000 $20,000 $46,000 $42,000
Gross Profit ratio
2018 47% =$28,000/$60,000
2019 30% =$20,000/$66,000
2020 62% =$46,000/$74,000
2021 47% =$42,000/$90,000
2. Calculation for the gross profit ratio for each of the four years based on corrected amounts.
Cost of goods sold 2019=$46,000-$11,000
Cost of goods sold 2019=$35,000
Cost of goods sold 2020=$28,000+$11,000
Cost of goods sold 2020=$39,000
2018 2019 2020 2021
Net sales $60,000 $66,000 $74,000 $90,000
Less Cost of goods sold $32,000 $35,000 $39,000 $48,000
=Gross profit $28,000 $31,000 $35,000 $42,000
Gross Profit ratio
2018 47% =$28,000/$60,000
2019 47% =$31,000/$66,000
2020 47% =$35,000/$74,000
2021 47% =$42,000/$90,000
Economic costs of unemployment
Consider a hypothetical economy in which potential output is $200 billion and the natural rate of unemployment is 4%. The current unemployment rate is 5.6%. Since the unemployment rate is greater than the natural rate of unemployment, the economy's actual GDP will be______ potential GDP.
According to Okun's law, the economy's GDP gap is billion. The burden of an increase in the economy-wide unemployment rate can differ widely across regions and across different groups of people. For example, in the United States, the jobless rate among workers with only a high school diploma has tended to be________ than the jobless rate among college graduates.
Answer: less than; higher
Explanation:
Since the unemployment rate is greater than the natural rate of unemployment, the economy's actual GDP will be less than potential GDP.
...the jobless rate among workers with only a high school diploma has tended to be higher than the jobless rate among college graduates.
When the economy is at its natural rate of unemployment, it means that the economy is producing at potential GDP. If however, the unemployment rate is more than this natural rate, it means that the economy is facing a downturn which is causing companies to not employ as much labor. Actual GDP is therefore lower than Potential GDP.
Workers with more specialized skills will usually feel the impact of an increase in unemployment less those with more general skills will. For this reason, college graduates will see less unemployment than those with only a high school diploma.
Robert, a highly experienced software engineer, joins a new company as the manager of a large group of employees. In his first meeting with the employees of the new organization, he explains his expectations on the behavior of employees. He also lets the employees know that noncompliance with his norms will result in withholding the rewards that they receive. Which of the following types of power is Robert using here?
a. reward
b. transformational
c. referent
d. coercive
Answer:
reward, maybe even referent
Explanation:
Robert is using rewarding to let people know that they need to work or they won't be rewarded.
The following note transactions occurred during the year for Towell Company: Nov. 10 Towell issued a 90-day, 9% note payable for $8,000 to Hyatt Company for merchandise. Dec. 1 Towell signed a 120-day, 10% note at the bank for $12,000. Dec. 20 Towell gave Barr, Inc., a 60-day, 10%, $12,000 note for payment of account. Prepare the general journal entries necessary to adjust the interest accounts at December 31. Use 360 days for calculations and round to the nearest dollar.
Answer: See explanation
Explanation:
The general journal entries necessary to adjust the interest accounts at December 31 will be:
1. December 31:
Debit: Interest Expenses = $8,000 × 9% × 51/ 360 = $102
Credit: Interest payable = $102
(To accrue interest expenses for the note issued on November 10).
2. December 31:
Debit: Interest Expenses = $12,000 × 10% ×30/360 = $120
Credit: Interest payable = $120
(To accrue interest expenses for the note issued on December 1)
3. December 31:
Debit: Interest Expenses = $12,000 × 10% × 11/360 = $36.67
Credit: Interest payable = $36.67
(To accrue interest expenses for the note issued on December 20).
Both __________ and __________ affect the awareness and motivation of a firm to undertake actions and responses. a. first-mover advantages; corporate size b. market commonality; resource similarity c. management capabilities; competitive analysis d. speed of management decisions; management actions
Answer:
b. market commonality; resource similarity
Explanation:
The two things that can impact the awareness and the motivation so that the firm could take the actions and responses is that the market commodity where the company deals with and the similarity of the resources. These two things would be required that can impact the awareness and the motivation level of the firm
hence, the option b is correct
Road Gripper Tire Co. manufactures automobile tires. Standard costs and actual costs for direct materials, direct labor, and factory overhead incurred for the manufacture of 4,160 tires were as follows:
Standard Costs Actual Costs
Direct materials 100,000 lbs. at $6.40 101,000 lbs. at $6.50
Direct labor 2,080 hrs. at $15.75 2,000 hrs. at $15.40
Factory overhead Rates per direct labor hr.,
based on 100% of normal capacity of 2,000 direct
labor hrs.:
Variable cost, $4.00 $8,200 variable cost
Fixed cost, $6.00 $12,000 fixed cost
Each tire requires 0.5 hour of direct labor.
Required:
a. Determine the direct materials price variance, direct materials quantity variance, and total direct materials cost variance.
b. Determine the direct labor rate variance, direct labor time variance, and total direct labor cost variance.
c. Determine the variable factory overhead controllable variance, fixed factory overhead volume variance, and total factory overhead cost variance.
Answer:
Answer is explained in the explanation section below.
Explanation:
Solution:
a.
In part a, we need to find the following 3 requirements:
1. Direct Materials Price Variance
2. Direct Materials Quantity Variance
3. Total Direct Materials Cost Variance
Direct Materials Price Variance:
It can be calculated by using the following formula:
DMPV = AQ multiplied by (AP minus the SP)
Where,
DMPV = Direct Materials Price Variance
AQ = Actual Quantity
AP = Actual Price
SP = Standard Price
We do have all the data, so just plug in the values into the above equation to get the DMPV.
AQ = 101,000
AP = 6.50 USD
SP = 6.40 USD
So,
DMPV = 101,000 ( 6.50 - 6.40)
DMPV = 10,100 USD
Direct Materials Quantity Variance:
DMQV = SP ( AQ - SQ )
Where,
DMQV = Direct Materials Quantity Variance = ?
SP = Standard Price = 6.40 USD
AQ = Actual Quantity = 101,000
SQ = Standard Quantity = 100,000
Plugging in the values:
DMQV = 6.40 ( 101,000 - 100,000)
DMQV = 6400 USD
Total Direct Materials Cost Variance:
DMCV = SMC - AMC
Where,
DMCV = Direct Materials Cost Variance = ?
SMC = Standard Market Cost = 6.40 USD x 100,000
AMC = Actual market Cost = 6.50 USD x 101,000
DMCV = (6.40 USD x 100,000) - (6.50 USD x 101,000)
DMCV = 640,000 - 656,500
DMCV = 16,500 USD
b.
For part b, we need following particulars:
1. Direct Labor Rate Variance (DLRV)
2. Direct Labor Time Variance (DLTV)
3. Direct Labor Cost Variance (DLCV)
Direct Labor Rate Variance (DLRV) :
DLRV = (ADLR - SDLR) x ADLH
Where,
ADLR = Actual Direct Labor Rate = 15.40 USD
SDLR = Standard Direct Labor Rate = 15.75 USD
ADLH = Actual Direct Labor Hour = 2000
So,
DLRV = (ADLR - SDLR) x ADLH
DLRV = (15.40 USD - 15.75 USD ) x 2000
DLRV = 700 USD
Direct Labor Time Variance (DLTV):
DLTV = ( ADLH - SDLH ) x SDLR
SDLH = Standard Direct Labor Hour = 2080
DLTV = ( 2000 - 2080 ) x 15.75 USD
DLTV = 1260 USD
Direct Labor Cost Variance (DLCV)
DLCV = SDLC - ADLC
SDLC = Standard Direct Labor Cost
ADLC = Actual Direct Labor Cost
DLCV = (1540 x 2000) - (15.75 x 2080)
DLCV = 1960 USD
c.
For Part c, we need following:
1. variable factory overhead controllable variance (VFOCV)
2. fixed factory overhead volume variance (FFOVV)
3. Total factory overhead cost variance (TFOCV)
variable factory overhead controllable variance (VFOCV):
VFOCV = AFO - B
Where,
AFO = Actual Factory Overhead = 8200
B = Budgeted Allowance Based on Standard Hours Allowed = 4160x0.5x4
B = 8320 USD
VFOCV = 8200 - 8320
VFOCV = 120 USD
fixed factory overhead volume variance (FFOVV) :
FFOVV = (S - BH ) x SOR
Where,
S = Standard Hours for actual output = 4160 x 0.5
BH = Budgeted Hours = 2080
SOR = Standard Overhead Rate = 6 USD
FFOVV = (4160 x 0.5 - 2080) x 6
FFOVV = 0 USD
Total factory overhead cost variance (TFOCV):
TFOCV = AFO - SO
Where,
AFO = Actual Factory Overhead = 20,200
SO = Standard Overhead = 2080 x 10
TFOCV = 20,200 - ( 2080 x 10 )
TFOCV = 600 USD
Data on the level of support for corporate sustainability (measured on a quantitative scale ranging from 0 to 160 points) for each of 992 senior managers at CPA firms are saved in CORSUS.txt
a) Construct a histogram for the data and use it to evaluate the validity of the normality assumption.
b) Obtain the mean and standard deviation for the data and use these statistics to evaluate the validity of the normality assumption.
c) Obtain the interquartile rage for the data and use these statistics to evaluate the validity of the normality assumption
Answer:
A) attached below
B) mean value = 67.755, std = 26.871
C) IQR( interquartile range ) = 37
Explanation:
A) Construct a histogram for the data and use it to evaluate the validity of normality assumption
Using Minitab to construct the Histogram from the shape of the Histogram we can see that the Normality assumption is valid because the shape is fairly symmetric
screenshot of Histogram is attached below
B) Obtain the mean and standard deviation for the data and use these statistics to evaluate the validity of the normality assumption.
still using Minitab to determine the std and mean values
mean value = 67.755, std = 26.871
Next : find the percentage of the observation that lie within 1,2 and 3 std from the mean
For one(1) std from the mean the interval = ( 40.884, 94.626 )
percentage of observation = 665 / 992 = 67.04
For two(2) std from the mean; The interval = ( 14.013 , 121.497 )
percentage of observation = 946 / 992 = 95.36%
For three(3) std from the mean ; The interval = ( -12.858, 148.368 )
percentage of observations = 991 / 992 = 99.90%
The percentages from the above calculations indicates the validity of the normality assumption
C) Obtain the interquartile rage for the data and use these statistics to evaluate the validity of the normality assumption
using MINITAB
since the data are assumed Normal; Ratio = [tex]\frac{IQR}{S} = 1.3[/tex]
std (s) = 26.871, IQR( interquartile range ) = 37
Next check if IQR / S will be = 1.3
= 37 / 26.871 = 1.377 ( This validates the normality assumption )
6.
Jane's Juice Bar has the following cost schedules:
Quantity
Variable Cost
Total Cost
O vats of juice
1
2.
3
4
5
$ 0
10
25
45
70
100
135
$ 30
40
55
75
100
130
165
6
a. Calculate average variable cost, average total
cost, and marginal cost for each quantity.
b. Graph all three curves. What is the
relationship between the marginal-cost
curve and the average-total-cost curve?
Between the marginal-cost curve and the
average-variable-cost curve? Explain.
Answer:
This may help you to solve it
Zeus, Inc. produces a product that has a variable cost of $9.50 per unit. The company's fixed costs are $40,000. The product sells for $12.00 a unit and the company desires to earn a $20,000 profit. What is the volume of sales in units required to achieve the target profit? (Do not round intermediate calculations.)
Answer:
Break-even point in units= 26,087
Explanation:
Giving the following information:
Selling price= $12
Unitary variable cost= 9.7
Fixed costs= $40,000
Desired profit= $20,000
To calculate the number of units to be sold, we need to use the following formula:
Break-even point in units= (fixed costs + desired profit) / contribution margin per unit
Break-even point in units= (40,000 + 20,000) / (12 - 9.7)
Break-even point in units= 26,087
In January, Prahbu purchased a new machine for use in an existing production line of his manufacturing business for $98,000. Assume that the machine is a unit of property and is not a material or supply. Prahbu pays $3,925 to install the machine, and after the machine is installed, he pays $2,250 to perform a critical test on the machine to ensure that it will operate in accordance with quality standards. On November 1, the critical test is complete, and Prahbu places the machine in service on the production line. On December 3, Prahbu pays another $5,200 to perform periodic quality control testing after the machine is placed in service. How much will Prahbu be required to capitalize as the cost of the machine
Answer:
$104,175
Explanation:
Calculation to determine How much will Prahbu be required to capitalize as the cost of the machine
Purchase price $98,000
Add Installation cost $3,925
Add Critical test cost $2,250
Machine Capitalize cost $104,175
($98,000+$3,925+$2,250)
Therefore How much will Prahbu be required to capitalize as the cost of the machine is $104,175
Swifty Corporation had a 1/1/20 balance in the Allowance for Doubtful Accounts of $35500. During 2020, it wrote off $23000 of accounts and collected $8000 on accounts previously written off. The balance in Accounts Receivable was $780000 at 1/1 and $960000 at 12/31. At 12/31/20, Swifty estimates that 5% of accounts receivable will prove to be uncollectible. What should Swifty report as its Allowance for Doubtful Accounts at 12/31/20
Answer:
$48,000
Explanation:
What should Swifty report as its Allowance for Doubtful Accounts at 12/31/20?
Allowance for Doubtful Accounts 12/31/20 = Accounts receivable at 12/31 * Uncollectible percentage of Accounts receivable
Allowance for Doubtful Accounts 12/31/20 = $960,000 * 5%
Allowance for Doubtful Accounts 12/31/20 = $48,000
8. Zelda owns a 50% general interest in YZ Partnership. At the beginning of the current year, the adjusted basis in her partnership interest was $95,000. In the current year, YZ generated a $110,000 business loss, earned $15,000 dividend and interest income on its investments and recognized a $7,000 capital gain. YZ also made a $5,000 distribution to Zelda. Compute Zelda’s adjusted basis in the partnership at the end of the year.
Answer:
$52,500
Explanation:
Computation for Zelda’s adjusted basis in the partnership at the end of the year.
Zelda’s adjusted basis=$95,000-(50%*$110,000)+(50%*$15,000)+$5,000
Zelda’s adjusted basis=$95,000-$55,000+$7,500+$5,000
Zelda’s adjusted basis= $52,500
Based on the information given we assumed 50% because Zelda is a 50% partner.
Therefore Zelda’s adjusted basis in the partnership at the end of the year will be $52,500
Lionel is an unmarried law student at State University Law School, a qualified educational institution. This year Lionel borrowed $30,000 from County Bank and paid interest of $1,800. Lionel used the loan proceeds to pay his law school tuition. Calculate the amounts Lionel can deduct for higher education expenses and interest on higher-education loans under the following circumstances:
Answer:
Deductible interest expense of $1440 and deductible education expense of $4000.
Explanation:
There are certain tax laws which allows a tax payer to deduct his expenses from the taxable amount. The tax payer can deduct interest expense from the taxable amount since it is a tax shield. Lionel can deduct an interest expense of $1440 from the taxable amount and he can deduct $4000 for his education from the taxable amount.
Perry Investments bought 2,000 shares of Able, Inc. common stock on January 1, 20X1, for $20,000 and 2,000 shares of Baker, Inc. common stock on July 1, 20X1 for $24,000. Baker paid $2,400 of previously declared dividends to Perry on December 31, 20X1. At the end of 20X1, the fair value of the Able stock was $18,000 and the fair value of the Baker stock was $28,000. The stocks were purchased for short-term speculation prior to the effective date of the change in accounting rules for equity investments. Perry owns 10% of each company.
Perry should record the receipt of the Baker dividend as:______
a. DR Cash 2,400 CR Investment in Baker 2,400
b. DR Cash 240 CR Dividend income 240
c. DR Cash 2,400 CR Dividends receivable 2,400
d. DR Dividends receivable 2,400 CR Dividend income 2,400
Answer:
Perry Investments
Perry should record the receipt of the Baker dividend as:______
c. DR Cash 2,400 CR Dividends receivable 2,400
Explanation:
a) Data and Calculations:
Investment in Able, Inc common stock = 2,000 on January 1, 20X1, at a cost of $20,000; December 31, 20X1 fair value = $18,000
Investment in Baker, Inc. common stock = 2,000 on July 1, 20X1, at a cost of $24,000; December 31, 20X1 fair value = $28,000.
Baker's previously declared dividends on December 31, 20X1 = $2,400
b) Since Baker declared the dividends previously, Perry must have debited its Dividends Receivable account. Now that payment had been made by Baker, the Dividends Receivable will be credited while the Cash account is debited.
Setrakian Industries needs to raise $48.5 million to fund a new project. The company will sell bonds that have a coupon rate of 5.56 percent paid semiannually and that mature in 10 years. The bonds will be sold at an initial YTM of 6.13 percent and have a par value of $2,000. How many bonds must be sold to raise the necessary funds
Answer:
25,317 unit
Explanation:
Current price of bond = PV(Rate, Nper, Pmt, Fv)
Current price of bond = PV(6.13%/2, 10*2 ,5.56%/2*2000, 2000)
Current price of bond = $1,915.71
Number of bonds to issue = $48,500,000 / $1,915.71
Number of bonds to issue = 25316.98430
Number of bonds to issue = 25,317 unit
Sage Company began operations at the beginning of 2021. The following information pertains to this company.
1. Pretax financial income for 2021 is $87,000.
2. The tax rate enacted for 2021 and future years is 20%.
3. Differences between the 2021 income statement and tax return are listed below:
a. Warranty expense accrued for financial reporting purposes amounts to $6,600. Warranty deductions per the tax return amount to $1,900.
b. Gross profit on construction contracts using the percentage-of-completion method per books amounts to $84,500. Gross profit on construction contracts for tax purposes amounts to $66,300.
c. Depreciation of property, plant, and equipment for financial reporting purposes amounts to $57,900. Depreciation of these assets amounts to $84,300 for the tax return.
d. A $3,200 fine paid for violation of pollution laws was deducted in computing pretax financial income.
e. Interest revenue recognized on an investment in tax-exempt municipal bonds amounts to $1,500.
4. Taxable income is expected for the next few years. (Assume (a) is short-term in nature; assume (b) and (c) are long-term in nature.)
Required:
a. Compute taxable income for 2021.
b. Compute the deferred taxes at December 31, 2021, that relate to the temporary differences described above.
c. Prepare the journal entry to record income tax expense
Answer:
Answer is explained in the explanation section below.
Explanation:
Solution:
a. Taxable income for 2021.
Sage Company:
Computation of Taxable income and income tax for 2021
Pretax financial Income = $87000
Permanent differences:
Fine for Pollution = $3200
Interest revenue on municipal bonds = -$1500
Temporary differences:
Less: Excess of depreciation as per tax over books = -$26400
Add: Warranty expense in books higher than as per tax = $4700
Less: Gross profit as per books higher than as per tax on construction contracts = -$18200
Taxable Income = $48800
Income Tax (20%) = $9760
b. Deferred Taxes:
Deferred tax assets = $4700*20% = $940
Deferred tax liability = ($26,400 + $18,200) * 20% = $8920
c. Note: Journal Entries are attached in the attachment below.
If The Wall Street Journal lists a stock's dividend as $1, then it is most likely the case that the stock: Multiple Choice pays $1 per share per quarter. paid $.25 per share per quarter for the past year. paid $1 during the past quarter, with no future dividends forecast. is expected to pay a dividend of $1 per share at the end of next year.
Answer:
paid $.25 per share per quarter for the past year
Explanation:
A stock is ownership rights purchased by investors in a public company. Holders of stock are called stockholders and they are regarded as owners of the company.
Stockholders are paid dividends. Dividends are a proportion of a company's profits paid to shareholders.
If the stock's dividend is $1, it means it either paid $1 the past year or paid $.25 per share per quarter for the past year
Jamarcus was his collegiate chapter's delegate at a national conference of a professional business fraternity, Phi Chi Theta, in which he is a member. When the business meeting was conducted, parliamentary procedure was used, and Jamarcus was not familiar with this. Thus, he looked to the others to learn how he should behave in this situation. What type of influence does this reference group exhibit? procedural transient substantive informational legal
Answer:
informational
Explanation:
Informational influence is defined as a new concept or information that occurs within a group and leads to change in group member attitudes, behaviour, and belief.
In the given scenario parliamentary procedure was used in a business meeting and Jamarcus was not familiar with this.
He looked to other group members to learn how he should behave in this situation.
In this case the group is providing information of proper way of behaving during the meeting.
in managing production worker compensation and expenditures for best practice training, the overriding objective of company managers should be to
Answer:
i am sooooooo sorry im new and i need point and agian i'm so sorry
Explanation:
To attain the lowest possible labor costs per pair produced at each production site, the corporation must minimize labor costs per pair produced at each of its plants.
What is the training objective of production workers?The overarching goal of firm management should be to obtain the lowest possible labor costs per pair produced at each production facility in controlling production worker remuneration and expenditures for best practice training.
For more information about company expenditures, refer below
https://brainly.com/question/15871053
Here is the income statement for Teal Mountain Inc.
TEAL MOUNTAIN INC.
Income Statement
For the Year Ended December 31, 2017
Sales revenue $402,900
Cost of goods sold 256,700
Gross profit 146,200
Expenses (including $ 10,200 interest and $29,600 income taxes) 89,200
Net income $57,000
Additional information:
1. Common stock outstanding January 1, 2017, was 30,000 shares, and 39,000 shares were outstanding at December 31, 2017.
2. The market price of Teal Mountain stock was $15 in 2017.
3. Cash dividends of $24,700 were paid, $ 6,500 of which were to preferred stockholders.
Compute the following measures for 2017.
(a) Earnings per share $_____
(b) Price-earnings ratio _____ times
(c) Payout ratio _____ %
(d) Times interest earned _____ times
Answer:
See below
Explanation:
a. The earnings per share would be calculated as;
Earnings per share = (Net income - Preferred stock dividend) / Average number of common shares outstanding
But
Weighted average number of common shares = (Number of common shares outstanding in the beginning + Number of common shares outstanding at then end) / 2
= (30,000 + 39,000) / 2
= 34,500
Preferred stock dividend = 6,500
Therefore,
Earnings per share = ($57,000 - $6,500) / 34,500
= $50,500 / 34,500
= $1.46
b. Price earnings ratio
= Market price per share / Earning per share
= $15 / $1.46
= 10.27 times
c. The payout ratio
= (Total cash dividends - Preferred stock dividends) / Net income
= ($24,700 - $6,500) / $57,000
= $18,200 / $57,00)
= 31.93%
d. Times interest
= ( Net income + Interest expense + Tax expense) / Interest expense.
= $57,000 + $10,200 + $29,600) / $10,200
= $96,800 / $10,200
= 9.49 times
On December 30, 2017, the Board of Directors of Blue Manufacturing, Inc. committed to a plan to discontinue the operations of its Owl division. Blue estimated that Owl's 2018 operating loss would be $750,000 and that the fair value of Owl's facilities was $450,000 less than their carrying amounts. The estimate for the 2018 operating loss turned out to be correct. Owl's 2017 operating loss was $1,000,000, and the division was actually sold for $400,000 less than its carrying amount in 2018. Blue's effective tax rate is 35%. In its 2017 income statement, what amount should Blue report as loss from discontinued operations
Answer:
$942,500
Explanation:
Calculation to determine what amount should Blue report as loss from discontinued operations
Using this formula
Loss from discontinued operations=[(Operating loss+Fair value)*Tax rate]
Let plug in the formula
Loss from discontinued operations=[($1,000,000+ $450,000)* (100% - 35% tax rate)]
Loss from discontinued operations=$1,450,0000*65%
Loss from discontinued operations= $942,500
Therefore what amount should Blue report as loss from discontinued operations is $942,500
Testbank Multiple Choice Question 81 At the beginning of 2020, Sunland Company issued 8% bonds with a face value of $5700000. These bonds mature in the five years, and interest is paid semiannually on June 30 and December 31. The bonds were sold for $5259870 to yield 10%. Sunland uses a calendar-year reporting period. Using the effective-interest method of amortization, what amount of interest expense should be reported for 2020
Answer:
$527,737
Explanation:
The Bond Payment or Coupon always includes the Interest Portion and the the Capital Potion. The question only requires the Interest Portion of the Bond.
The Bond Parameters can be set as :
PV = - $5,259,870
FV = $5,700,000
PMT = ($5,700,000 x 8%) ÷ 2 = $228,000
N = 5 x 2 = 10
YTM = 10 %
P/YR = 2
Constructing an amortization schedule for 2020 gives :
Date Capital Portion Interest Balance
June 30 $34,994 $262,994 $5,294,864
Dec 30 $36,743 $264,743 $5,331,607
Total $71,737 $527,737 $5,331,607
therefore,
The amount of interest expense to be reported for 2020 is $527,737
Dumphy and Funke are rival tattoo artists in the small town of Feline. There are no other tattoo artists in town. It costs $30 to produce a Tweety Bird tattoo. Assume for simplicity that fixed costs are zero and that Dumphy and Funke perform identical work. For a while, there was too much demand for Funke and Dumphy to handle and they both charged $200 for a tattoo. But recently, demand has dropped significantly and there is not enough work for both to fill their days at any price. However, there is some demand at all prices. What type of competition would Funke and Dumphy likely engage in after the decrease in demand
Answer: price competition
Explanation:
The type of competition would Funke and Dumphy likely engage in after the decrease in demand is price competition.
Price competition simply means when the companies in a particular industry lower their prices afsubst the prices of identical products in order to boost demand and sales.
Since there's a reduction in demand, Dumphy and Funke will engage in price competition to boost sales.
The expected return on a portfolio: Group of answer choices can be greater than the expected return on the best performing security in the portfolio. can be less than the expected return on the worst performing security in the portfolio. is independent of the performance of the overall economy. is limited by the returns on the individual securities within the portfolio. is an arithmetic average of the returns of the individual securities when the weights of those securities are unequal.
Answer:
is limited by the returns on the individual securities within the portfolio
Explanation:
Portfolio is simply defined as a list of securities showing how much is (or will be) invested in each of them.
The expected return on a portfolio is calculated as the weighted average of the expected returns on the securities that the portfolio involves. The weight of each security is the a Portion or a fraction of wealth invested in that security. Expected return on a portfolio of N securities is: rp= sum (Xr).
Expected Return is usually based on anticipated income and anticipated capital appreciation.
Henry Ford is known for the introduction of the assembly line and the Model T. As his manufacturing effort expanded, however, he also adopted an attitude that came to be known as Fordism. What was one of the central tenets in his system?
Answer:
Fordism, a specific stage of economic development in the 20th century. Fordism is a term widely used to describe (1) the system of mass production that was pioneered in the early 20th century by the Ford Motor Company or (2) the typical postwar mode of economic growth and its associated political and social order in advanced capitalism.
Explanation:
Good luck
Apple Inc. just paid a dividend of $3 per share. You expect that Apple's dividend will increase at the rate of 10% per year for the next 10 years. After that, you expect that Apple Inc. will increase its dividend at the rate of 3% per year forever. The required rate of return for Apple is 20%. What is the price of Apple just after the current dividend was paid?
Answer:
The price of Apple just after the current dividend was paid is $26.79.
Explanation:
Note: See the attached file for the calculation of present values for year 1 to 10 dividends.
From the attached excel file, we have:
Previous year dividend in year 1 = Dividend just paid = $3
Total of dividends from year 1 to year 10 = $19.17617169980840
Year 10 dividend = $7.781227380
Therefore, we have:
Year 11 dividend = Year 10 dividend * (100% + Perpetual dividend growth rate) = $7.781227380 * (100% + 3%) = $8.0146642014
Price at year 10 = Year 11 dividend / (Rate of return - Perpetual dividend growth rate) = $8.0146642014 / (20% - 3%) = $47.1450835376471
PV of price at year 10 = Price at year 10 / (100% + Required return)^Number of years = $47.1450835376471 / (100% + 20%)^10 = $7.61419419713817
Price of Apple = Total of dividends from year 1 to year 8 + PV of price at year 10 = $19.17617169980840 + $7.61419419713817 = $26.79
Dream, Inc., has debt outstanding with a face value of $6 million. The value of the firm if it were entirely financed by equity would be $18.25 million. The company also has 440,000 shares of stock outstanding that sell at a price of $32 per share. The corporate tax rate is 35 percent. What is the decrease in the value of the company due to expected bankruptcy costs? (Enter your answer in dollars, not millions of dollars, e.g., 1,234,567. Do not round intermediate calculations and round your answer to the nearest whole number, e.g., 32.)
Answer:
$955,000
Explanation:
According to the Modigliani and Miller theory, we can calculate the value of the levered firm which is denoted by;
VI = Vu + tB
VI = 18.25million + 0.35(6million)
VI = 20.35 million
We can also calculate the total market value of the firm Vt by adding the debt (B) with the total equity (SV)
Vt = B + SV
Vt = 5 million + 440,000(32)
Vt = 5 million + 14.80 million
Vt = 19.80 million
Then the decrease in the value of the company due to bankruptcy is
Vb = VI - Vt
Vb = 20.35 million - 19.80 million
VB = $955,000