Answer:
$33,000
Explanation:
Calculation for net value of buying the Cadillac
Using this formula
Net value =Purchase-Resale price of the Cadillac
Let plug in the formula
Net value =$87,000-$54,000
Net value =$33,000
Therefore the net value of buying the Cadillac will be $33,000
The risk-free rate of return is 2.7 percent, the inflation rate is 3.1 percent, and the market risk premium is 6.9 percent. What is the expected rate of return on a stock with a beta of 1.08
Answer:
10.15%
Explanation:
Using the CAPM formula, we can calculate cost of equity or in this case, the expected rate of return:
expected rate of return = risk free rate x [beta x (market rate of return - risk free rate)]
where market rate of return - risk free rate = market risk premium
expected rate of return = 2.7% x (1.08 x 6.9%) = 10.15%
The expected rate of return is 10.15%
The calculation can be done as follows
Risk free rate= 2.7%
Inflation rate= 3.1%
Market risk premium= 6.9%
Beta= 1.08%
Therefore the expected rate of return can be calculated as follows
= Risk free rate of return₊ (Beta × Market risk premium)
= 2.7(1.08 × 6.9)
= 2.7 ₊ 7.452
= 10.15%
Hence the expected rate of return on the stock is 10.15%
https://brainly.com/question/14298019?referrer=searchResults
The business purchased an office rack from Zuhdi Bhd for RM8,000 and
paid cash of RM3,000, the balance is to be paid later. State the journal
entry for this transaction,
Your answer
Answer and Explanation:
The Journal entries are shown below:-
Office equipment Dr, RM8,000
To Cash RM3,000
To Accounts payable RM5,000
(Being purchase of office equipment is recorded)
Here we debited the office equipment as it increased the assets and credited the cash and account payable as it decreased the assets and increased the liabilities
Tunneling Inc. fixed costs are at $100,000. The company has sales of 10,000 units with a price of $84 and variable cost per unit of $40. The depreciation is $50,000 and taxes are 21 percent. What is the degree of operating leverage
Answer:
Tunneling Inc.
Degree of operating leverage
= Contribution Margin divided by Operating Income
= $440,000/$290,000 = 1.52
Explanation:
(a) Data and Calculations:
Sales Revenue = $840,000 (10,000 x $84)
Variable cost = $400,000 (10,000 x $40)
Contribution = $440,000
Fixed costs = $100,000
Depreciation = $50,000
Operating Income = $290,000
Tax (21%) ($60,900)
Net Income = $229,100
(b) The degree of operating leverage for Tunneling Inc. is 1.52. It shows the financial impact of a change in sales revenue on Tunneling Inc.'s earnings. Analysts usually work this ratio out to determine this important effect.
Boatler Used Cadillac Co. requires $890,000 in financing over the next two years. The firm can borrow the funds for two years at 11 percent interest per year. Ms. Boatler decides to do forecasting and predicts that if she utilizes short-term financing instead, she will pay 7.25 percent interest in the first year and 12.55 percent interest in the second year. Assume interest is paid in full at the end of each year.
A. Determine the lot al two-year interest cost under each plan.
Interest Cost
Long term fixed-rate plan
Short term variable-rate
B. Which plan is less costly?
1. Long term fixed-rate plan
2. Short-term variable-rate plan
Answer:
A. Total two-year interest cost under long term fixed-rate plan is $195,800; while total two-year interest cost under short term variable-rate is $176,220.
B. Short-term variable-rate plan is less costly.
Explanation:
A. Determine the total two-year interest cost under each plan.
This can be determined for each of the plan as follows:
For Long term fixed-rate plan
Total two-year interest cost under long term fixed-rate plan = Amount required * Interest rate per year * Number of years = $890,000 * 11% * 2 = $195,800
For Short term variable-rate
First year interest cost under short term variable-rate = Amount required * First year interest rate = $890,000 * 7.25% = $64,525
Second year interest cost under short term variable-rate = Amount required * Second year interest rate = $890,000 * 12.55% = $111,695
Total two-year interest cost under short term variable-rate = First year interest cost + Second year interest cost = $64,525 + $111,695 = $176,220
Therefore, we have:
Interest Cost
Long term fixed-rate plan $195,800
Short term variable-rate $176,220
B. Which plan is less costly?
Since the total two-year interest cost under short term variable-rate of $176,220 is less than $195,8000 total two-year interest cost under long term fixed-rate plan, the Short-term variable-rate plan is therefore less costly.
Assessments of how a diversified company's subsidiaries compare in competitive strength should be based on such factors as:
Complete Question:
Assessments of how a diversified company's subsidiaries compare in competitive strength should be based on such factors as;
A. vulnerability to seasonal and cyclical downturns, vulnerability to driving forces, and vulnerability to fluctuating interest rates and exchange rates.
B. relative market share, the ability to match or beat rivals on key product attributes, brand image and reputation, costs relative to competitors, and the ability to benefit from strategic fits with sister businesses.
C. the appeal of its strategy, the relative number of competitive capabilities, the number of products in each business's product line, which businesses have the highest/lowest market shares, and which businesses earn the highest/lowest profits before taxes.
D. the ability to hurdle barriers to entry, value chain attractiveness, and business risk.
E. cost reduction potential, customer satisfaction potential, and comparisons of annual cash flows from operations.
Answer:
B. relative market share, the ability to match or beat rivals on key product attributes, brand image and reputation, costs relative to competitors, and the ability to benefit from strategic fits with sister businesses.
Explanation:
Assessments of how a diversified company's subsidiaries compare in competitive strength should be based on such factors as;
1. Relative market share: this measures the subsidiaries position in a market in relation to its competitors in the same industry. It is a measure of the percentage of the market they control.
2. The ability to match or beat rivals on key product attributes: this is really important in the assessment of competitive strengths because it represents the level of acceptance of their products by consumers in comparison with rivals.
3. Brand image and reputation: if the subsidiary is well accepted by the consumers, it simply suggests that they have a good brand image and reputation in the market. A good brand image and reputation is competitive strength.
4. Costs relative to competitors: the higher the price a company is selling its products relative to rival companies, the lesser its sales would be because consumers would naturally go for cheaper products or lower prices.
5. The ability to benefit from strategic fits with sister businesses: companies should be able to achieve their set goals and objectives from opportunities presented by their sister company.
Hence, the competitive strength of a diversified company and its subsidiaries should be assessed based on the aforementioned factors.
Daris Corporation is authorized to issue 1,000,000 shares of $5 par value common stock
During 2018. its first year of operation, the company has the following stock transactions
per share
Jan 1 Paid the state RM2,000 for incorporation fees
Jan 15 Issued 500.000 shares of stock at RM7
Jan
30 Attorneys for the company accepted 500 shares of common stock as payment for
legal services rendered in helping the company incorporate. The legal services are
estimated to have a value of RM8.000
July 2 Issued 100,000 shares of stock for land. The land had an asking price of
RM900.000. The stock is currently selling on a national exchange at RMS per
share
Sept 5 Purchased 15,000 shares of common stock for the treasury at RM10 per share
Dec 6 Sold 11,000 shares of the treasury stock at RM11 per share
Required:
Journalize the transactions for Daris Corporation
Answer:
Daris Corporation
General Journal:
Jan. 1:
Debit Incorporation fees RM2,000
Credit Cash Account RM2,000
To record the payment of incorporation fees to the state.
Jan. 15:
Debit Issue of Shares RM3,500,000
Credit Common Stock RM3,500,000
To record issue of 500,000 shares at RM7 per share.
Jan. 30
Debit Legal Fees RM8,000
Credit Issue of Shares RM3,500
Credit Additional Paid-in Capital RM4,500
To record the issue of 500 shares to settle legals fees of RM8,000
July 2:
Debit Land RM900,000
Credit Issue of Share RM700,000
Credit Additional Paid-in Capital RM200,000
To record the issue of 100,000 shares of stock for land.
Sept. 5:
Debit Treasury Stock RM105,000
Debit Additional Paid-in Capital RM45,000
Credit Cash Account RM150,000
To record the repurchase of 15,000 shares of common stock at RM10 per share.
Dec. 6:
Debit Cash Account RM121,000
Credit Treasury Stock RM77,000
Credit Additional Paid-in Capital RM44,000
To record the resale of 11,000 shares of the treasury stock at RM11 per share.
Explanation:
The Additional Paid-in Capital (APIC) or sometimes referred to as Excess Capital over Par Value is an equity account where the above and below par value of the sale and repurchase of stock is recorded. This makes the Stock account to maintain a stable figure. This implies that the changes caused by above and below par value is taken care in this account. It also takes care of treasury stock above and below par value sale.
Treasury stock is a common stock contra account. It means that the value of the treasury stock reduces the value of the common stock. There are two methods for treating the above and below par value in treasury stock. One method is the costing method which records the changes in the treasury stock account. The other method is the par value method. With this method, only the par value of treasury stock is recorded in the account. The above and below par value changes are recorded in the Additional Paid-in Capital account.
if the only factor driving the 20y2 level of accounts receivable is the volume of sales what should the 20y2 accounts receivable be
Answer:
^2+y^2=20 y=*4
Explanation:
you add 2 + y =20 and y=4 sorry i could not do the times thing
The following transactions relate to the General Fund of the City of Buffalo Falls for the year ended December 31, 2020: Beginning balances were: Cash, $93,000; Taxes Receivable, $189,500; Accounts Payable, $52,250; and Fund Balance, $230,250. The budget was passed. Estimated revenues amounted to $1,230,000 and appropriations totaled $1,227,400. All expenditures are classified as General Government. Property taxes were levied in the amount of $915,000. All of the taxes are expected to be collected before February 2021. Cash receipts totaled $885,000 for property taxes and $297,500 from other revenue. Contracts were issued for contracted services in the amount of $95,250. Contracted services were performed relating to $85,500 of the contracts with invoices amounting to $83,900. Other expenditures amounted to $963,500. Accounts payable were paid in the amount of $1,092,500. The books were closed. Required: a. Prepare journal entries for the above transactions. b. Prepare a Statement of Revenues, Expenditures, and Changes in Fund Balance for the General Fund. c. Prepare a Balance Sheet for the General Fund assuming there are no restricted or assigned net resources and outstanding encumbrances are committed by contractual obligation.
Answer:
City of Buffalo Falls
a. Journal Entries:
Beginning balances:
Jan.1, 2020 :
Description Debit Credit
Cash $93,000
Taxes Receivable $189,500
Accounts Payable $52,250
Fund Balance $230,250
To record opening balances of the General Fund.
Transactions during the year:
Description Debit Credit
Taxes Receivable $1,230,000
Estimated Revenue $1,230,000
To record the estimated revenue for the year.
General Government $1,227,400
Accounts Payable $1,227,400
To record the estimated appropriations for the year.
Property taxes receivable $915,000
Other revenue receivable $315,000
Estimated revenue $1,230,000
Cash Account $1,182,500
Property taxes receivable $885,000
Other revenue receivable $297,500
To record the cash receipts.
Contracts $95,250
Accounts Payable $95,250
To record contracts for services.
Debit General Government $963,500
Credit Accounts Payable $963,500
To record the other expenditures.
Debit Accounts Payable $1,092,500
Credit Cash Account $1,092,500
To record payment on account.
b. Statement of Revenues, Expenditures, and Changes in Fund Balance for the General Fund:
Estimated Revenue $1,230,000
less Expenditure:
Contracts 95,250
Other expenditures 963,500
Change in fund $171,250
Fund balance b/f 230,250
Fund balance c/f $401,500
c. Balance Sheet for the General Fund:
Cash $183,000
Taxes Receivable 237,000
Total assets $420,000
Accounts Payable $18,750
Fund balance 401,500
Total liabilities + Fund $420,250
Explanation:
a) Cash Account:
Beginning balance $93,000
Property taxes 885,000
Other revenue 297,500
less Accounts payable 1,092,500
Ending balance $183,000
b) Taxes Receivable
Beginning balance $189,500
Estimated Revenue 1,230,000
less Receipts:
Property taxes 885,000
Other revenue 297,500
Ending balance $237,000
c) Accounts Payable
Beginning balance $52,500
Other expenditure 963,500
Contracts 95,250
Less payments 1,092,500
Ending balance $18,750
Use the following information to answer questions 4a.1-4a.5 Gerrell Corp. is comparing two different capital structures. Plan I would result in 18,000 shares of stock and $95,000 in debt. Plan II would result in 14,000 shares of stock and $190,000 in debt. The interest rate on the debt is 5 percent. Compare both of these plans to an all-equity plan assuming that EBIT will be $90,000. The all-equity plan would result in 22,000 shares of stock outstanding. Assuming that the corporate tax rate is 40 percent, what is the EPS for each of these plans
Answer:
Gerrel Corp.
EPS (Earnings per share) = Earnings after Tax/Number of outstanding shares
Plan I:
EBIT = $90,000
Interest = $4,750 ($95,000 x 5%)
Pre-Tax Income = $85,250
Income Tax Exp. 34,100 ($85,250 x 40%)
After Tax Income $51,150
EPS = $51,150/18,000 = $2.84 per share
Plan II:
EBIT = $90,000
Interest = $9,500 ($190,000 x 5%)
Pre-Tax Income = $80,500
Income Tax Exp. 32,200 ($80,500 x 40%)
After Tax Income $48,300
EPS = $48,300/14,000 = $3.45 per share
Plan III:
EBIT = $90,000
Pre-Tax Income = $90,000
Income Tax Exp. 36,000 ($90,000 x 40%)
After Tax Income $54,000
EPS = $54,000/22,000 = $2.45 per share
Explanation:
a) Data and Calculations:
Plan I = 18,000 shares + $95,000 debt
Plan II = 14,000 shares + $190,000 debt
Difference = 4,000 shares + $95,000 debt
Share price = $95,000/4,000 = $23.75
EBIT = $90,000
Interest Rate = 5%
Corporate Tax Rate = 40%
b) Capital Structure:
Plan I: (Equity and Debt)
Shares of 18,000 x $23.75 + $95,000 debt = $522,500 in total capital
Plan II: (Equity and Debt)
Shares of 14,000 x $23.75 + $190,000 debt = $522,500 in total capital
Plan III: (All-equity plan):
Shares of 22,000 x $23.75 = $522,500 in total capital
c) The Earnings per share is the measurement of the Net Income to stockholders divided by the number of outstanding shares. It gives an idea about the profitability of the entity, especially with regard to the profit made for common stockholders. The EPS is also one of the metrics used in the calculation of the P/E ratio to indicate whether a company's shares are undervalued or overvalued.
At December 3 2018, Waco Travel Agency has an Accounts Receivable balance of $93,000. Allowance for Uncollectible Accounts has a credit balance of $870 before the year-end adjustment. Service revenue (all on account) for 2018 was $800,000. Waco estimates that its uncollectible-account expense for the year is 1% of service revenue.
Make the year-end entry to record uncollectible- account e are reported on the balance sheet at December 31,2018.
Show how Accounts Receivable and Allowance for Uncollectible Accounts.
Answer:
Waco Travel Agency
Journal entry
Date Account and explanation Debit Credit
Dec 31 Bad debt expense (800,000 * 1%) $8,000
Allowance for uncollectible accounts $8,000
(To record uncollectible account expense)
Waco Travel Agency
Balance Sheet
Current assets
Account receivable $93,000
Less: Allowance for uncollectible account ($8,870) ---- ($8,000 + $870)
$84,130
Which of the following is NOT an element of organizational structure? A) Well-articulated mission, vision, and value statements. B) Formal reporting relationships. C) Grouping together of individuals into departments. D) Systems designed to ensure effective communication
Answer:
A) Well-articulated mission, vision, and value statements.
Explanation:
An organizational structure can be defined as a system that states how business activities such as standard rules, task allocation or roles of employees, coordination, responsibilities and supervision of these activities are directed so as to enhance the achievement of the goals, aims and objectives of the organization.
Simply stated, an organizational structure usually defines a hierarchy, which is used to determine how information, roles and responsibilities flow from one level to another in an organization. Generally, the flow of information are usually from top to bottom.
Furthermore, the organizational structure can be divided into four (4) distinct categories and these are;
1. Matrix organizational structure.
2. Functional organizational structure.
3. Divisional organizational structure.
4. Flat organizational structure.
The following are the elements of organizational structure;
A. Formal reporting relationships. This is enhanced by assigning a hierarchy, where informations are reported to the right individual and in a timely manner as well.
B. Grouping together of individuals into departments. This is to increase the level of output and enhance building good, coordinated development through division of labor.
C. Systems designed to ensure effective communication.
Hence, a well-articulated mission, vision, and value statements isn't an element of organizational structure. It could be regarded as an organization's center of gravity.
An organizational structure is a system that specifies how business operations, such as standard norms, task distribution or personnel roles, coordination, responsibilities, and supervision, are directed in order to help the organization achieve its goals, aims, and objectives.
So, Option A is the correct option which is not true about organizational structure.
The other options are incorrect as:
Option B is incorrect as Relationships of formal reporting. This is aided by establishing a hierarchy in which information is reported to the appropriate person and in a timely manner.
Option C is incorrect as Individuals are organized into departments. This is to raise output and improve the development of good, coordinated development by dividing labor.
Option D is incorrect as yes designing system to ensure effective communication is element of organizational structure.
Thus option A isn't a part of the company's structure. It's possible to think of it as the organization's center of gravity.
For more information about organizational structure refer to the link:
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You just opened a brokerage account, depositing $4,500. You expect the account to earn an interest rate of 8.57%. You also plan on depositing $3,000 at the end of years 5 through 10. What will be the value of the account at the end of 20 years, assuming you earn your expected rate of return?
Answer:
$74108
Explanation:
Solution
Given that:
Deposit = $4,500
Interest rate =8.57%
Plan to deposit =$3000 at the end of 5 years through 1
n= 20 years
Now
We apply the formula given below:
A=P(1+r/100)^n
Here
A=future value
P=present value
r=rate of interest
n=time period.
Thus
=4500(1.0857)^20+3000(1.0857)^15+3000(1.0857)^14+3000(1.0857)^13+3000(1.0857)^12+3000(1.0857)^11+3000(1.0857)^10
=$74108
Therefore the account value at 20 years (ending) is $74108
QS 8-8 Bank reconciliation LO P3 Nolan Company's cash account shows a $21,268 debit balance and its bank statement shows $19,711 on deposit at the close of business on June 30. Outstanding checks as of June 30 total $2,231. The June 30 bank statement lists $27 in bank service charges; the company has not yet recorded the cost of these services. In reviewing the bank statement, a $50 check written by the company was mistakenly recorded in the company’s books as $59. June 30 cash receipts of $3,801 were placed in the bank’s night depository after banking hours and were not recorded on the June 30 bank statement. The bank statement included a $31 credit for interest earned on the company’s cash in the bank. The company has not yet recorded interest earned. Prepare a bank reconciliation using the above information.
Answer: Please see explanation column for ansswer
Explanation:
A bank reconciliation is a document that reconciles or tallies the cash balance on the company's books to the corresponding amount on its bank statement which helps a company or business check and monitor unauthorized cash transactions and rectify any inconsistency.
Bank Reconciliation for Nolan Company in June 30
Bank Statement Balance $19, 711
Add:
Deposit made $3, 801
$23,512
Deduct:
Outstanding checks - $2,231
Adjusted Bank Balance $21,281
Cash Balance per Company's Records $21,268
Add:
Interest earned $31
Error in recording check (59-50) $9
$21,304
Deduct:
Service charges -$27
Adjusted Bank Balance $21,281
All organizations have a collective sense of purpose, whether it's producing oil or creating the fastest Internet search engine.
A. True
B. False
Answer:
true
Explanation:
sorry if im wrong
Historically, money has not always been of uniform quality. For example, diamonds were often used as a form of money, but every diamond is different. What problem occurs when money is not of a uniform quality?
Answer:
People will hoard high-quality money and spend low-quality money. As a result, the money used in transactions will be of inferior quality.
Explanation:
Since in the question it is given that the money is not always been of the same quality or uniform quality. Just take an example - like diamond most often used as a money form but if we compare the diamonds so it is different
The problem in the case when money does not have the same quality is of inferior goods as many people want to buy high quality money while other people spend on cheaper quality money
Hence, the first option is correct
During 2018, its first year of operations, Pave Construction provides services on account of $142,000. By the end of 2018, cash collections on these accounts total $101,000. Pave estimates that 25% of the uncollected accounts will be bad debts.
Required:
Record the adjustment for uncollectible accounts on December 31, 2018.
Answer:
Dr Bad Debt Expense 10,250
Cr Allowance for Uncollectible Accounts 10,250
Explanation:
Preparation of the Journal entry to Record the adjustment for uncollectible accounts on for Pave Construction
Since we were told that the company provides services on account of the amount of $142,000 in which by the end of the year 2018, the cash collections total the amount of $101,000 which means we have to less $101,000 from $142,000 which gave us $41,000.
We were as told that Pave estimates that 25% of the uncollected accounts will be bad debts this means we have to find the 25% of $41,000 which gave us $10,250.
Therefore the transaction will be recorded as:
Dr Bad Debt Expense 10,250
Cr Allowance for Uncollectible Accounts 10,250
($41,000 x 25%)
Service provided $142,000- Cash collection $101,000=$41,000
Easier access to talent, markets, and sources of supply globally, forces companies to focus less on the overall worldwide operations system and more on country-specific aspects.
a. True
b. False
When preparing the cash budget, all the following should be considered except
cash payments to suppliers
cash receipts from customers
depreciation expense
cash payments for equipment
Part 2:
Woodpecker Co. has $296,000 in accounts receivable on January 1. Budgeted sales for January are $860,000. Woodpecker Co. expects to sell 20% of its merchandise for cash. Of the remaining 80% of sales on account, 75% are expected to be collected in the month of sale and the remainder the following month. The January cash collections from sales are
$984,000
$688,000
$468,000
$812,000
Part 3:
If budgeted beginning inventory is $8,000, budgeted ending inventory is $9,400, and budgeted cost of goods sold is $10,260, budgeted production should be
a. $11,550
b. $11,660
c. $1,400
d. $9,600
Answer:
Instructions are below.
Explanation:
Giving the following information:
Accounts receivable= $296,000
Sales on January= $860,000
First, we need to determine the cash collection for January:
Sales on account from previous months= 296,000
Sales on account January= (860,000*0.8)*0.75= 516,000
Sales in cash January= 860,000*0.2= 172,000
Total cash collection= $984,000
Beginning inventory= $8,000
Ending inventory= $9,400
Cost of goods sold= $10,260
To calculate the budgeted production, we need to use the following formula:
Production= sales + desired ending inventory - beginning inventory
Production= 10,260 + 9,400 - 8,000= $11,660
You want to have $18,000 in 9 years for a dream vacation. If you can earn an interest rate of .5 percent per month, how much will you have to deposit today
Answer:
$10,503.59
Explanation:
This question requires us to find how much you have to deposit today if:
Fv = 18,000
Time = 9 years
PV= fv/(1 + i)^n
N = 9 X 12 = 108
I/y = 0.5%
PV = $18,000 / 1.005^108
= $10,503.59
Therefore what you have to deposit today is $10,503.59
If the population of a country is 1,000,000 people, its labor force consists of 600,000, and 60,000 people are unemployed, the unemployment rate is:
Answer:
Unemployment rate= 10%
Explanation:
Giving the following information:
Population= 1,000,000 people
Labor force= 600,000
Unemployed= 60,000 people
To calculate the unemployment rate, we need to use the labor force, not the total population. It only considers people working and actively looking for a job.
Unemployment rate= unemployed population / labor force
Unemployment rate= 60,000 / 600,000
Unemployment rate= 0.1= 10%
Breakin Away Company has three employees—a consultant, a computer programmer, and an administrator. The following payroll information is available for each employee:
Consultant Computer Programmer Administrator
Regular earnings rate $4,000 per week $60 per hour $50 per hour
Overtime earnings rate* Not applicable 1.5 times hourly rate 2 times hourly rate
Number of withholding allowances 2 1 2
* For hourly employees, overtime is paid for hours worked in excess of 40 hours per week.
For the current pay period, the computer programmer worked 50 hours and the administrator worked 48 hours. The federal income tax withheld for all three employees, who are single, can be determined from the wage bracket withholding table in Exhibit 2. Assume further that the social security tax rate was 6.0%, the Medicare tax rate was 1.5%, and one withholding allowance is $75.
Determine the gross pay and the net pay for each of the three employees for the current pay period. If required, round your answers to two decimal places.
Consultant Computer Programmer Administrator
Gross pay $ $ $
Net pay $ $ $
Answer:
Gross pay:
consultant $4,000 computer programmer $3,300 administrator $2,800Net pay:
consultant $2,767.98 computer programmer $2,295.48 administrator $1,993.98Explanation:
regular earnings overtime withholding
allowances
Consultant $4,000 per week N/A 2
Computer programmer $60 per hour 1.5 1
Administrator $50 per hour 2 2
computer programmer worked 50 hours = ($60 x 40) + ($60 x 10 x 1.5) = $3,300
administrator worked 48 hours = ($50 x 40) + ($50 x 8 x 2) = $2,800
Social security taxes:
Consultant = 6% x $4,000 = $240 Computer programmer = 6% x $3,300 = $198 Administrator = 6% x $2,800 = $168Medicare taxes:
Consultant = 1.5% x $4,000 = $60 Computer programmer = 1.5% x $3,300 = $49.50 Administrator = 1.5% x $2,800 = $42Federal income taxes:
Consultant: amount subject to withholding = $4,000 - (2 x $75) = $3,850. Federal income taxes = $356.90 + [28% x ($3,850 - $1,796) = $932.02 Computer programmer = amount subject to withholding = $3,300 - (1 x $75) = $3,225. Federal income taxes = $356.90 + [28% x ($3,225 - $1,796) = $757.02 Administrator = amount subject to withholding = $2,800 - (2 x $75) = $2,650. Federal income taxes = $356.90 + [28% x ($2,650 - $1,796) = $596.02Gross pay:
consultant $4,000 computer programmer $3,300 administrator $2,800Net pay:
consultant $4,000 - ($240 + $60 + $932.02) = $2,767.98 computer programmer $3,300 - ($198 + $49.50 + $757.02) = $2,295.48 administrator $2,800 - ($168 + $42 + $596.02) = $1,993.98Square Hammer Corp. shows the following information on its 2018 income statement: Sales = $264,000; Costs = $170,000; Other expenses = $7,900; Depreciation expense = $14,500; Interest expense = $13,300; Taxes = $20,405; Dividends = $10,000. In addition, you’re told that the firm issued $4,800 in new equity during 2018 and redeemed $3,300 in outstanding long-term debt. a. What is the 2018 operating cash flow
Answer:
The 2018 operating cash flow is $86,100.
Explanation:
Operating Cash flow is different from Income as it only involves movement in cash.
Thus our first step is to find the Operating Income then adjust it with non-cash items to reach an Operating Cash flow amount.
Sales = $264,000
Less Costs = ($170,000)
Less Other expenses = ($7,900)
Depreciation expense = ($14,500)
Operating Income = $71,600
Adjust for non-cash item - depreciation
Operating Income = $71,600
Add back depreciation = $14,500
Operating Cash flow = $86,100
Interest expenses and taxes are not part of operating income as they arise out of secondary activities of the company.
Conclusion :
The 2018 operating cash flow is $86,100.
In the past year, TVG had revenues of $2.95 million, cost of goods sold of $2.45 million, and depreciation expense of $178,000. The firm has a single issue of debt outstanding with book value of $1.15 million on which it pays an interest rate of 8%. What is the firm’s times interest earned ratio? (Do not round intermediate calculations. Round your answer to 2 decimal places.)
Answer:
3.5
Explanation:
Computation for the firm’s times interest earned ratio
Revenues$ 2.95 million
Cost of goods sold$ 2.45 million
Depreciation expense$ 178,000.00
Book values of Debt outstanding$ 1.15 million
Interest rate8.00
First step is to calculate for the EBIT
Using this formula
EBIT= Revenues -(Cost of goods sold +Depreciation expense$ 178,000.00)
EBIT=$2,950,000-($2,450,000+$178,000)
EBIT=$2,950,000- $2,628,000
EBIT=$322,000
Second step is to find the Interest
Using this formula
Interest =Debt outstanding with book value ×Interest rate
Let plug in the formula
Interest =$1,150,000×8%
Interest =$92,000
Now let find the firm’s times interest earned ratio
Using this formula
Firm’s times interest earned ratio=EBIT/INTEREST
Where,
EBIT=$322,000
INTEREST=$92,000
Let plug in the formula
Firm’s times interest earned ratio=$322,000/$92,000
Firm’s times interest earned ratio =3.5
Therefore the firm’s times interest earned ratio will be 3.5
The Thomlin Company forecasts that total overhead for the current year will be $11,420,000 with 157,000 total machine hours. Year to date, the actual overhead is $7,958,000 and the actual machine hours are 83,000 hours. If the Thomlin Company uses a predetermined overhead rate based on machine hours for applying overhead, as of this point in time (year to date), the overhead is Round the factory overhead rate to the nearest dollar before multiplying by the number of hours. a.$2,848,500 underapplied b.$1,899,000 underapplied c.$1,899,000 overapplied d.$2,848,500 overapplied
Answer:
Under/over applied overhead= $1,899,000 underallocated
Explanation:
Giving the following information:
Estimated overhead= $11,420,000
Estimated machine-hours= 157,000
Actual overhead is $7,958,000 and the actual machine hours are 83,000 hours.
First, we need to calculate the predetermined overhead rate:
Predetermined manufacturing overhead rate= total estimated overhead costs for the period/ total amount of allocation base
Predetermined manufacturing overhead rate= 11,420,000/157,000
Predetermined manufacturing overhead rate= $73 per machine hour
Now, we can allocate overhead:
Allocated MOH= Estimated manufacturing overhead rate* Actual amount of allocation base
Allocated MOH= 73*83,000= $6,059,000
Finally, we can determine the under/over allocation:
Under/over applied overhead= real overhead - allocated overhead
Under/over applied overhead= 7,958,000 - 6,059,000
Under/over applied overhead= $1,899,000 underallocated
A bond with a par value of $5,000 is quoted at 103.936. What is the dollar price of the bond?
a) $4,828.95
b) $5.231.45
c) $5,196.80
d) $5.147.31
e) $5,16710
Answer:
C. $5,196.80
Explanation:
Calculation for the dollar price of the bonds
Let find the dollar price of the bonds using this formula
Dollar price=Per value bond amount × The Per value quoted percentage 103.936/100=1.03936
Dollar price =$5,000×1.03936
Dollar price =$5,196.80
Therefore the dollar price of the bonds will be $5,196.80
Interdepartment Services: Step Method
O'Brian's Department Stores allocates the costs of the Personnel and Payroll departments to three retail sales departments, Housewares, Clothing, and Furniture. In addition to providing services to the operating departments, Personnel and Payroll provide services to each other. O'Brian's allocates Personnel Department costs on the basis of the number of employees and Payroll Department costs on the basis of gross payroll. Cost and allocation information for June is as follows:
Personnel Payroll Housewares Clothing Furniture
Direct department cost $ 7,800 $ 3,200 $ 12,200 $ 20,000 $ 16,750
Number of employees 5 4 8 16 4
Gross payroll $ 6,000 $ 3,300 $ 10,600 $ 17,400 $ 8,100
(a) Determine the percentage of total Personnel Department services that was provided to the Payroll Department. (Round your answer to one decimal place.)
Answer %
(b) Determine the percentage of total Payroll Department services that was provided to the Personnel Department. (Round your answer one decimal place.)
Answer %
(c) Prepare a schedule showing Personnel Department and Payroll Department cost allocations to the operating departments, assuming O'Brian's uses the step method.
Do not round until your final answers. Round answers to the nearest dollar.
Service Departments Producing Departments
Payroll Personnel Housewares Clothing Furniture
Total costs $Answer $Answer $Answer $Answer $Answe
Answer:
O'Brian's Department Stores
a) Determination of the percentage of total personnel department services that was provided to the Payroll department
Since allocation of the personnel department services is based on the number of employees, we can use this to calculate the percentage. The personnel employees are not included in this calculation.
= 4/32 x 100 = 12.5%
b) Percentage of total payroll department services provided to the personnel department. Since the basis is the gross payroll, we can use this to calculate the percentage. The gross payroll of the Payroll department is not included in the calculation.
= $6,000/$42,100 x 100 = 14.3%
c) Personnel Payroll House- Clothing Furniture Total
Ware
Direct department
cost $ 7,800 $ 3,200 $ 12,200 $ 20,000 $ 16,750 $59,950
Number of
employees 5 4 8 16 4 37
Gross payroll $ 6,000 $ 3,300 $ 10,600 $ 17,400 $ 8,100 $45,400
Total cost $13,800 $6,500 $22,800 $37,400 $24,850 $105,350
Allocation of service departments costs, using the step method:
Personnel -13,800 1,725 3,450 6,900 1,725 13,800
Payroll 0 -8,225 2,415 3,965 1,845 8,225
Total allocated 0 0 $28,665 $48,265 $28,420 $105,350
Explanation:
a) Data:
Personnel Payroll House- Clothing Furniture Total
Ware
Direct department
cost $ 7,800 $ 3,200 $ 12,200 $ 20,000 $ 16,750 $59,950
Number of
employees 5 4 8 16 4 37
Gross payroll $ 6,000 $ 3,300 $ 10,600 $ 17,400 $ 8,100 $45,400
b) Cost allocation & Calculations:
Personnel (based on the number of employees)
Rate = $13,800/32 = $431.25 per employee
Payroll (based on gross payroll)
Rate = Payroll cost = Payroll cost divided by the total gross payroll in the other departments, excluding personnel and payroll departments
= $8,225/$36,100 = $0.2278 per gross payroll
c) Allocation of service departments' costs is a method of apportioning costs incurred by service departments to the production departments in order to include all the costs in the product costs. Three methods exist for allocating service departments' costs to the production departments. The first, which is the simplest, is the direct method. With this method, the costs of service departments are allocated directly to each production department based on the consumption of the service department's services. They are not allocated to other service departments.
The second method is the step method. Here, the costs of one service department with the highest cost are allocated to all other departments first, including production and other service departments following a step. The costs of the next service department with the highest costs are allocated to the remaining departments. This step is continued until all the service departments' costs have been allocated. Once the costs of a service department have been completely allocated, that department would not be allocated any other cost.
The Reciprocal method, which is the last method, is the most accurate and complicated method. This method first establishes the relationship among the service departments in equation form and uses the established equations to allocate the costs of service departments. We may not discuss it further than this.
The following transactions and events occurred during the year. Assuming that this company uses the indirect method to report cash provided by operating activities, indicate where each item would appear on its statement of cash flows by placing an X in the appropriate column.
Statement of Cash Flow Noncash Investing & Financing Activities Not Reported on Statement or in Notes
Operating Activities Investing Activities Financing Activities
a. Declared and paid a cash dividend
b. Recorded depreciation expense
c. Paid cash to settle long-term note payable
d. Prepaid expenses increased in the year
e. Accounts receivable decreased in the year
f. Purchased land by issuing common stock
g. Inventory increased in the year
h. Sold equipment for cash, yielding a loss
i. Accounts payable decreased in the year
j. Income taxes payable increased in the year
Answer: i ii iii iv v
a. Declared and paid a cash dividend X
b. Recorded depreciation expense X
c. Paid cash to settle long-term note payable X
d. Prepaid expenses increased in the year X
e. Accounts receivable decreased in the year X
f. Purchased land by issuing common stock X
g. Inventory increased in the year X
h. Sold equipment for cash, yielding a loss X
i. Accounts payable decreased in the year X
j. Income taxes payable increased in the year X
Note:
i. Operating activities
ii. Investing activities
iii. Financing activities
iv. Non cash Investing & Financing
v. Not reported on statement or Notes
Based on the information given where each item would appear on its statement of cash flows are:
a. Declared and paid a cash dividend.
Statement of cash flow: Financing activities
b. Recorded depreciation expense.
Statement of cash flow: Operating activities
c. Paid cash to settle long-term note payable.
Statement of cash flow: Financing activities
d. Prepaid expenses increased in the year.
Statement of cash flow: Operating activities
e. Accounts receivable decreased in the year.
Statement of cash flow: Operating activities
f. Purchased land by issuing common stock.
Statement of cash flow: Non cash investing and financing activities
g. Inventory increased in the year.
Statement of cash flow: Operating activities
h. Sold equipment for cash, yielding a loss.
Statement of cash flow: Investing activities
i. Accounts payable decreased in the year.
Statement of cash flow: Operating activities
j. Income taxes payable increased in the year.
Statement of cash flow: Operating activities
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When delivering bad news to customers, use an indirect strategy as you would with other bad news messages, and maintain a positive tone. Occasionally, companies disappoint their customers. Whenever possible, these problems should be addressed immediately. Choose the best answer for the following question about handling customer problems.
What is the first step you should take when a problem arises?
1. Call the individual customer.
2. Disguise the problem as a "technical error."
3. Explain to the customer what they did that caused the problem
Answer:
1
Explanation:
Well, the focus of an indirect strategy is to create a new peak of satisfaction, when dealing with a disappointing situation. So the key is leaving a positive tone after all. Since maintaining a regular customer is always cheaper than getting a new one.
So, it's important to have an honest conversation with the customer and and offer a good compensation and provide a follow up until the problem is solved, so that the customer be enchanted by the respect shown. In addition to this, make this a turning point. By doing that the customer will regain confidence.
In a perfectly competitive market, an orange costs $2. If Farmer Joe sells 10 oranges, what is his total revenue? If he decides to sell 1 more orange, what will be the marginal revenue?
Answer:
$20
$2
Explanation:
A perfect competition is characterised by many buyers and sellers of homogenous goods and services. Market prices are set by the forces of demand and supply. There are no barriers to entry or exit of firms into the industry.
In the long run, firms earn zero economic profit. If in the short run firms are earning economic profit, in the long run firms would enter into the industry. This would drive economic profit to zero.
Also, if in the short run, firms are earning economic loss, in the long run, firms would exit the industry until economic profit falls to zero.
Total revenue = price × quantity sold
$2 x 10 = $20
Marginal revenue is the change in revenue from selling one extra unit of orange
It is equal to the price of orange. It is $2.
I hope my answer helps you
In 2016, Saratoga Company had the following financial data: Operating income $320,000 Interest received $50,000 Interest paid $90,000 Dividend received $100,000 Dividend paid $150,000 Dividend of $100,000 was received from Findlay Inc. which is one of the companies that Saratoga company invest. As of the end of 2016, Saratoga Company owns 35% of Findlay, Inc.
In 2016, Saratoga Company had the following financial data: Operating income $320,000 Interest received $50,000 Interest paid $90,000 Dividend received $100,000 Dividend paid $150,000 Dividend of $100,000 was received from Findlay Inc. which is one of the companies that Saratoga company invest. As of the end of 2016, Saratoga Company owns 35% of Findlay, Inc.
Using the corporate tax rate table given below, what was the company’s tax Liability (just federal corporate income tax) for the year 2008?
335,000 - 10,000,000 34% 113,900 + .34x(inc>335,000)
Answer:
$78,200
Explanation:
From the given information:
Operating income = $320,000
Interest received = $50,000
Interest paid = $90000
Dividend received = $100000
Dividend paid = $150,000
Therefore:
Saratoga Company Total Income = Operating income + Interest Received + Dividend Received - Interest Paid - Dividend paid
Saratoga Company Total Income = $320,000 + $50,000 + $100,000 - $90,000 - $ 150,000
Saratoga Company Total Income = $470000 - $ 240000
Saratoga Company Total Income = $230,000
According to the table given ;
The table tax percentage = 34 %
= $230,000 × 0.34
= $78,200