Answer:
Dr Bonus expense $50,000
Cr Bonus payable $50,000
Explanation:
Preparation of Bayer, Inc., Journal entry
Since we were told that on December 31, Bayer, Inc agrees to provide a bonus of $50,000 to its employees this means we have to Debit bonus expenses with the amount of $50,000 and Credit Bonus payable with the same amount.
Dec. 31
Dr Bonus expense $50,000
Cr Bonus payable $50,000
Matt's Machine Company has borrowed $10 million for four months at 5.5% APR, using inventory stored in a field warehouse as collateral. The warehouse fee is 0.5%, payable at the beginning of the loan. What is Matt's EAR?
Answer:
The Matt's EAR is 7.24%
Explanation:
The money borrowed by the company (L) = $10 million
Time period for the loan (T) = 4 months
Rate given (APR) = 5.5%
Per Month rate R=5.5%/12=0.46%
The fee of warehouse that is paid at the starting of the loan = 0.5%
Now we have to calculate the Matt’s EAR.
Warehouse fees =0.5%
So Fees F= 0.5% × L = 0.5% × $10 = $0.05 millions
Therefore, the Net amount we get N = L – F = 10 - 0.5 = $9.95 millions
Assume r be the per month EAR
N*(1+r)^4 = L*(1+R)^4
9.95*(1+r)^4 = 10*(1+0.46%)^4
r=0.58%
EAR =(1+r)^12-1= (1+0.58%)^12-1 = 7.24%
A corporation that uses the equity method of accounting for its investment in a 40%-owned investee (that earned $20,000 and paid $5,000 in dividends) made the following entries: Investment in investee $8,000 Investment Income $8,000 Investment in investee $2,000 Cash $2,000 What effect will these entries have on the investor’s statement of financial position?
Answer:
Investment in the investee will be overstated, retained earnings will be overstated.
Explanation:
The effect on the investor’s statement of financial position is shown below:-
Because the investor owns more than 30 percent of the equity approach has to be used. This will result in overestimated investments of $8,000 which comes from $20,000 × 40 percent in investee, which will also result in overestimated retained earnings of $8,000 which comes from $20,000 × 40 percent
In a long-run equilibrium where firms have identical costs, it is possible that some firms in a competitive market are making a positive economic profit. True or False
Answer: False
Explanation:
In the long run, if there are still firms making an Economic profit, this would encourage other firms to enter the market. Once this happens the firms would stop making an Economic profit. Should they start making an economic loss, some firms would leave the market which would then bring the Economic losses to zero.
Arrange six departments into a 2 x 3 grid so that these conditions are satisfied: 1 close to 2, 5 close to 2 and 6, 2 close to 5, and 3 not close to 1 or 2.
Answer:
1?3
256
Explanation:
If one is close to 2, then but so is five, and 6 is near five then they all have to be on there own row. Seeing as 3 is close not close to 1, or 2, it has to be the furthest away from them as it can be, and the questionmark is there because you only have five numbers, (1,2,3,5,6) so there isn't enough info for the question mark to have an answer.
What is the relationship between organizational needs analysis and strategic planning? How can tying HRD programs to an organization’s strategicplan make it easier to justify requests for resources to develop and deliver HRD programs?
Explanation:
An organization's strategic planning comprises the organizational values, its mission, vision and objectives and defines a company's strategic action plans in detail so that its long-term objectives and goals are achieved.
To be effective, strategic planning must understand each system in the organization and correctly allocate the use of resources according to the needs of the company.
The analysis of organizational needs will help the company to monitor its resources and its influence on the internal and external environment, developing ideal alternatives in a market where there are changes in consumer behavior, innovation, new technologies, etc.
The programs of the human resources department must therefore be linked to the strategic plan of an organization, to facilitate requests for resources to develop and provide HRD programs, since the needs of personnel directly impact the way in which the strategic actions foreseen by the planning are developed. Organizational culture should be based on positive values that seek to motivate employees to be productive and perform their duties with dedication and excellence, so HRD programs must be considered as an essential part of the development of the internal forces that will lead an organization to success.
Retirement Investment Advisors, Inc., has just offered you an annual interest rate of 4.1 percent until you retire in 45 years. You believe that interest rates will increase over the next year and you would be offered 4.7 percent per year one year from today. If you plan to deposit $11,500 into the account either this year or next year, how much more will you have when you retire if you wait one year to make your deposit
Answer:
If you wait one year, in 45 years you will have $16,624.04 more than investing today.
Explanation:
Giving the following information:
Option 1:
Initial investment= $11,500
Number of years= 45
Interest rate= 4.1%
Option 2:
Initial investment= $11,500
Number of years= 44
Interest rate= 4.7%
To calculate the future value for both options, we need to use the following formula:
FV= PV*(1+i)^n
Option 1:
FV= 11,500*(1.041^45)= $70,142.41
Option 2:
FV= 11,500*(1.047^44)
FV= $86,766.45
If you wait one year, in 45 years you will have $16,624.04 more than investing today.
Under absorption costing, a company had the following unit costs when 18,000 units were produced.
Direct labor $2
Direct material 3
Variable overhead 4
Total variable cost 9
Fixed overhead ($50,000/10,000 units) 5
Total production cost per unit $14
Required:
Compute the company's total production cost per unit if 12,500 units had been produced. Total production cost per unit.
Answer:
Total unitary cost= $13
Explanation:
Giving the following information:
Direct labor $2
Direct material 3
Variable overhead 4
Total variable cost= 9
Fixed overhead= $50,000
Units produed= 12,500
To calculate the total cost per unit, first, we need to calculate the unitary fixed overhead.
Unitary fixed overhead= 50,000/12,500= $4
Total unitary cost= 9 + 4= $13
Garcia Company has 10,400 units of its product that were produced last year at a total cost of $156,000. The units were damaged in a rainstorm because the warehouse where they were stored developed a leak in the roof. Garcia can sell the units as is for $3 each or it can repair the units at a total cost of $18,400 and then sell them for $7 each. Calculate the incremental net income if the units are repaired
Answer:
$23,200
Explanation:
Alternative 1 Alternative 2 Incremental
no repairs repair units revenue
sales revenue $31,200 $0 ($31,200)
repair costs $0 -$18,400 ($18,400)
revenue from $0 $72,800 $72,800
selling repaired units
total $23,200
Incremental revenues refer to the extra or additional revenues generated by a business activity or transaction. In this case, repairing and then selling the damaged units would increase income by $23,200.
"A production line is currently organized so that all parts go through an initial tuning" process. Each part that exits the tuning process goes to either inspector A or inspector B. Currently 50 parts per hour goes into the tuning station, 40% of which will later be sent to inspector A and 60% will be sent to inspector B. Each inspected part exits the inspection process either with a "pass" or "fail" result. Both inspectors reject about 30% of all units inspected.
On average there are 30 units at the tuning station, 20 units at inspector A’s station, and 25 units at inspector B’ station. Assume that we have a stable process throughout.
a. What is the process flow time?
b. What is the average flow time of parts that go through inspector B?
c. What is the average flow time of parts that will pass the inspection?
d. Assume that the company above competes in an industry where high volume is an order qualifier. Use little’s law to explain specifically what the firm should focus on if it wants to have better flow time performance.
Answer:
a. The process flow time is 1.50 hours
b. The average flow time of parts that go through inspector B is 1.433 hours
c. The average flow time of parts that will pass the inspection=1.5 hours
d. To have a better flow time performance the ideal thing would be to have more quantity produced
Explanation:
a. In order to calculate the process flow time we would have to calculate the following formula:
process flow time=percentage of parts which will later be sent to inspector A*(tunning flow time+1)+percentage of parts which will later be sent to inspector B*(tunning flow time+B flow time)
process flow time=40%*(0.6+1) + 60%*(0.6+0.833)
process flow time= 1.50 hours
The process flow time is 1.50 hours
b. In order to calculate the average flow time of parts that go through inspector B we would have to calculate the following formula:
average flow time of parts that go through inspector B=flow time tunning+flow time B
average flow time of parts that go through inspector B=0.60+0.833
average flow time of parts that go through inspector B= 1.433 hours
c. In order to calculate the average flow time of parts that will pass the inspection we would have to calculate the following formula:
average flow time of parts that will pass the inspection=number will pass of A*(tunning flow time+1)+number will pass of B*(tunning flow time+ flow time B)
average flow time of parts that will pass the inspection=(14/35)*(0.6+1) + (21/35)*(0.6+0.833)
average flow time of parts that will pass the inspection=1.5 hours
d. To have a better flow time performance the ideal thing would be to have more quantity produced
g Donald’s employer fires Donald after only four months on the job, a clear breach of Donald’s written twelve-month employment contract. Donald is entitled to recover as damages:
Answer:
Compensatory Damages
Explanation:
Based on this scenario it can be said that Donald is entitled to Compensatory Damages. This is a lawsuit that covers the loss that the non-breaching party incurred as a result of the breach of contract. In this scenario, Donald's employer breached the contract by firing Donald before the twelve months. Therefore Donald can sue for compensatory damages which would be the amount of money that he would have made in the rest of the twelve months.
Luana sells Beta Corporation stock with an adjusted basis of $58,000 and a fair market value of $70,000 for $64,000.
Luana has a realized of ________________ $ .
Answer:
Gain of $6,000
Explanation:
Since we were told that Luana sells Beta Corporation stock with an adjusted basis amount of $58,000 and a fair market value of the amount of $70,000 for $64,000 this means we have to less $64,000 from $70,000 which will give us a gain of $6,000
$70,000 -$64,000
=$6,000
This means that Luana has realized a Gain of $6,000
Joe has a full-time construction job and also does odd jobs for people on the weekends. You have purchased the materials needed to construct a fence at your house and you pay Joe $500 to build the fence. Does the payment to Joe count toward the value of GDP?
a. No, if this income is not likely to be reported to the government.
b. Yes, all income earned counts in GDP.
c. Yes, the fence increases the value of your house.
d. No, his is a non-market activity.
e. No, this is a leisure activity.
Answer:
a. No, if this income is not likely to be reported to the government.
Explanation:
The GDP refers to the gross domestic product which refers to the finalized value of the goods and services that are produced in the domestic country
In the given case since the job is done on an odd basis and the payment is made without any bill or evidence which is treated as an ineligible for the tax payment
Therefore the correct option is a.
Two cities are identical in all respects except City A has an assessment ratio of 100% and City B (in another state) has an assessment ratio of 25%. Both cities need to raise $1,000,000 in property tax revenues. The statutory tax rates on property are
Available Options are:
A. higher in City A than City B.
B. higher in City B than City A.
C. identical in both cities.
D. dependent on non-property tax revenues in each.
Answer:
Option B. Higher in the city B than in city A.
Explanation:
If we talk about the assessment ration, then it is calculated as under:
Assessment ratio = Value of property assessed by municipality / Fair Market value of the property
This ratio helps in calculating the property tax for each year and if the ratio is higher then the property tax rate will be set higher to collect the target property tax revenue and vice versa.
As in this case, the assessment ratio of company B is 100% which is higher than city A, which means that the city B will require higher tax rates to collect the target property tax revenue.
Hence the property tax rate in city B will be higher than City A to collect the same target property tax revenue.
Wickland Company installs a manufacturing machine in its production facility at the beginning of the year at a cost of $117,000. The machine's useful life is estimated to be 10 years, or 130,000 units of product, with a $3,000 salvage value. During its second year, the machine produces 10,400 units of product. Determine the machines' second year depreciation under the straight-line method.
Answer:
$11,400
Explanation:
Straight line depreciation expense = (Cost of asset - Salvage value) / useful life
( $117,000 - $3,000) / 10 = $11,400
the straight line depreciation method allocates the same depreciation expense for each year. so, the depreciation expense would be $11,400
Tomas is a manager at a frozen food company and wants to understand the way people in different countries think and act so that the company can respond to their needs appropriately. What is the best aid he can use to accomplish this?
Answer:
The best aid to accomplish this is a knowledge of the foreign country's history
Explanation:
If Tomas wants to understand the way people in different countries think and act then he has to have a knowledge of the history of these people from different countries so that the company can serve them appropriately. This would help to foster better customer service delivery and also aid in effective communication. This is a great step towards success for the company.
A market maker faces the following demand and supply for widgets. Eleven buyers are willing to buy at the following prices: $15, $14, $13, $12, $11, $10, $9, $8, $7, $6, $5. Eleven sellers are also willing to sell at the same prices. How many transactions must the market maker make if he wants to maximize his profits?
Answer:
maximum profit ($30 in total) is obtained by selling 5 units
Explanation:
if the market maker buys and sells one unit, his/her profit = $15 - $5 = $10 if the market maker buys and sells two units, his/her profit = $10 + ($14 - $6) = $18 if the market maker buys and sells three units, his/her profit = $18 + ($13 - $7) = $24 if the market maker buys and sells four units, his/her profit = $24 + ($12 - $8) = $28 if the market maker buys and sells five unit, his/her profit = $28 + ($11 - $9) = $30the maximum profit per unit is obtained by selling only 1 unit, but the total maximum profit is obtained by selling 5 units.
Time Remaining 1 hour 48 minutes 56 seconds01:48:56 Item 5Item 5 Time Remaining 1 hour 48 minutes 56 seconds01:48:56 Accounts payable are: Multiple Choice Amounts received in advance from customers for future services. Always payable within 30 days. Estimated liabilities. Amounts owed to suppliers for products and/or services purchased on credit.
Answer:
Amounts owed to suppliers for products and/or services purchased on credit.
Explanation:
Accounts payable are basically short term debts that a company has with its suppliers. E.g. a retailer purchases goods from a wholesaler on terms n/30. In this case, the accounts payable would be the amount of money owed to the retailer. There is no specific time frame for an accounts payable, since it varies depending on the credit that the supplier gives. E.g. sometimes a supplier will sell on a 45 day credit period, or even 60 day period.
Chamberlain Co. wants to issue new 20-year bonds for some much-needed expansion projects. The company currently has 6 percent coupon bonds on the market that sell for $1,083, make semiannual payments, and mature in 20 years. What coupon rate should the company set on its new bonds if it wants them to sell at par?
Answer:
5.36%
Explanation:
We would need to calculate the yield to maturity of the current bonds:
YTM = {coupon + [(face value - market value)/n]} / [(face value + market value)/2]
coupon = $1,000 x 6% x 1/2 = $30face value = $1,000market value = $1,083n = 20 x 2 = 40YTM = {$30 + [($1,000 - $1,083)/40]} / [($1,000 + $1,083)/2] = $27.925 / $1,041.50 = 0.026812 x 2 = 0.05362 = 5.36%
Since the bond's coupon rate is higher than the market rate, the bonds are sold at a premium. In order to sell bonds at the par value, you must lower the coupon rate.
A customer recently wrote your bakery a letter complaining that the cherry scones were too crumbly and dry. Although the customer already ate all the scones, he is demanding a full refund. Your company does not honor refunds on food that has been consumed What could you include in the closing of your response to restore confidence?
1. A statement of company policy regarding refunds
2. A freebie or promotional discount
3. A defensive remark
4. An alternative product
Answer:
1. A statement of company policy regarding refunds
Explanation:
A statement of company policy regarding refunds would give clarity to the customer on the reason why the request for refund was denied.
Parramore Corp has $17 million of sales, $3 million of inventories, $4 million of receivables, and $3 million of payables. Its cost of goods sold is 65% of sales, and it finances working capital with bank loans at an 6% rate. Assume 365 days in year for your calculations. Do not round intermediate steps.
What is Parramore's cash conversion cycle (CCC)? Do not round intermediate calculations. Round your answer to two decimal places.
days
Answer:
Parramore's cash conversion cycle (CCC) is 85.88 days.
Explanation:
The cash conversion cycle (CCC) refers to a metric that is used to express the time or number of days a firm takes to convert its inventory and other investments resources into cash flows from sales.
CCC has three components: Days Inventory Outstanding (DIO), Days Sales Outstanding (DSO), and Days Payable Outstanding (DPO). CCC can therefore be calculated using these three components as follows:
CCC = DIO + DSO - DPO ........................... (1)
We need to calculate each of these components first as follows:
DIO = (Inventories / Cost of good sold) * 365 = [3 / (65% * 17)] * 365 = 99.0950226244344
DSO = (Receivables / Sales) * 365 = (4 / 17) * 365 = 85.8823529411765
DPO = (Payable / Cost of good sold) * 365 = [3 / (65% * 17)] * 365 = 99.0950226244344
Substituting all the values into equation (1), we have:
CCC = 99.0950226244344 + 85.8823529411765 + 99.0950226244344 = 85.88 days.
Therefore, Parramore's cash conversion cycle (CCC) is 85.88 days. That is, it takes Parramore Corp 85.88 days to convert its inventory and other investments resources into cash flows from sales.
Suppose that the presidents of two auto manufacturing companies exchange text messages in which they discuss jointly raising prices on their new lines of hybrid SUVs. Which law does this illegal communication violate?
Answer:
Sherman Antitrust Act of 1890
Explanation:
Based on the information provided within the question it can be said that this communication is violating the Sherman Antitrust Act of 1890. This Act was passed prohibiting any contract, trust, or conspiracy in restraint of interstate or foreign trade in order to prevent oppressive business practices and monopolies. This is what the two companies are doing by agreeing to jointly raise the price they are able to control the entire markets price thus creating a monopoly in the automotive industry, which forces consumers to pay a lot more than what the vehicles are actually worth.
A company purchased a commercial dishwasher by paying cash of $5,300. The dishwasher's fair value on the date of the purchase was $5,700. The company incurred $320 in transportation costs, $210 installation fees, and paid a $230 fine for illegal parking while the dishwasher was being delivered. For what amount will the company record the dishwasher
Answer:
$5,830
Explanation:
Relevant data provided
Cash paid = $5,300
Transportation cost = $320
Installation fees = $210
The computation of the amount that will record the dishwasher is shown below:-
Total cost = Cash paid + Transportation cost + Installation fees
= $5,300 + $320 + $210
= $5,830
Therefore for computing the total cost we simply applied the above formula and ignore all other values as they are not relevant.
According to the definition of profit, if a profit-maximizing firm will always attempt to produce its desired level of output at the lowest possible cost, then it will Group of answer choices
Complete Question:
According to the definition of profit, if a profit-maximizing firm will always attempt to produce its desired level of output at the lowest possible cost, then it will
Group of answer choices;
A. do so regardless of what type of competition exists in a market.
B. take a long-run perspective on costs, when such costs cannot be adjusted.
C. take a short-run perspective on labor costs which cannot be immediately changed.
D. breakdown its cost structure according to short-run adjustments.
Answer:
A. do so regardless of what type of competition exists in a market.
Explanation:
According to the definition of profit, if a profit-maximizing firm will always attempt to produce its desired level of output at the lowest possible cost, then it will do so regardless of what type of competition exists in a market.
Profit maximization is considered by economists as either a short run or long run process that ultimately influences a firm's price, investment or input costs and level of production that would result in the highest profit.
Hence, a firm makes profit when the total cost used for the production of a product is subtracted from the total revenue generated from the sales of that product.
Mathematically, [tex]Profit = Total Revenue - Total cost.[/tex]
Regardless of what competition exists in the market, a firm is only very much concerned with knowing the quantity of goods that it should produce in order to make profits. Having the answer to the above question would help a profit-maximizing firm to produce its desired level of output at the lowest possible cost.
Hence, as the firm sells more of its products, the total revenue is also increasing and thus making more profits with respect to the price level in the market.
Willow Creek Company purchased and installed carpet in its new general offices on April 30 for a total cost of $18,000. The carpet is estimated to have a 15-year useful life and no residual value.A. Prepare the journal entry necessary for recording the purchase of the new carpet.B. Record the December 31 adjusting entry for the partial-year depreciation expense for the carpet, assuming that Willow Creek Company uses the straight-line method.
Answer:
Entries are given below
Explanation:
Requirement A: Purchase of New Carpet on April 30
DEBIT CREDIT
Carpet $18,000
Cash 18,000
Requirement B: Depreciation Entry
Calculation
Annual Depreciation = 18000/15years = 1200
8 Monthths Depreciation = 1200 x 8/12 = 800
8 months = 1 May to Dec 31
DEBIT CREDIT
Depreciation Expense $800
Accumulated Depreciation $800
Marigold Corporation acquires a coal mine at a cost of $420,000. Intangible development costs total $105,000. After extraction has occurred, Marigold must restore the property (estimated fair value of the obligation is $84,000), after which it can be sold for $168,000. Marigold estimates that 4,200 tons of coal can be extracted.
Required:
If 735 tons are extracted the first year, prepare the journal entry to record depletion.
Answer:
Inventory Dr $77,175
To Accumulated depletion $77,175
(being the depletion is recorded)
Explanation:
The journal entry is shown below:
Inventory Dr $77,175
To Accumulated depletion $77,175
(being the depletion is recorded)
For recording this we debited the inventory as it increased the assets and credited the accumulated depletion as it decreased the assets
The computation is shown below:
= (Cost of coal mine + intangible development cost + estimated fair value of the obligation - sales value) ÷ (extracted estimated tons) × (extracted tons for the first year)
= ($420,000 + $105,000 + $84,000 - $168,000) ÷ (4,200 tons) × (735 tons)
= $77,175
Epsilon Co. can produce a unit of product for the following costs:
Direct material $8.40
Direct labor 24.40
Overhead 42.00
Total costs per unit $74.80
An outside supplier offers to provide Epsilon with all the units it needs at $66.20 per unit. If Epsilon buys from the supplier, the company will still incur 30% of its overhead. Epsilon should choose to:
Buy since the relevant cost to make it is $74.80.
Make since the relevant cost to make it is $62.20.
Buy since the relevant cost to make it is $45.40.
Make since the relevant cost to make it is $45.40.
Buy since the relevant cost to make it is $62.20.
Answer:
The correct answer is B.
Explanation:
Giving the following information:
Direct material $8.40
Direct labor 24.40
Overhead 42.00
Total costs per unit $74.80
Purchasing price= $66.20 per unit.
First, we need to determine the real production cost per unit. If 30% of overhead is not avoidable, we will take into account only 70% of overhead.
Total production cost per unit= 8.4 + 24.4 + (42*0.7)= $62.2
It is cheaper to make the unit. If the unit is produced, the company will save $4 per unit.
The annual demand of an appliance company is 8000 units. The production capacity is 200 units per day. Each time production starts, it costs the company $120 to move materials into place, reset the assembly line, and clean the equipment. The holding cost of a refrigerator is $50 per year. The current production plan calls for 400 refrigerators to be produced in each production run. Assume 250 working days per year. a) Compute the daily demand of this product. b) If the company were to continue to produce 400 units each time production starts, how many days would production continue? c) How many production runs per year would be required? What would the annual cost be? d) how many refrigerators would be in the inventory when production stops? What would be the average inventory level in this case? e) If the company produced 400 refrigerators at a time, what would the total annual set up cost and holding cost be?
Answer and Explanation:
The calculations and computations as per the question requirement are given below
a. Daily demand for this product is
Daily demand = Annual demand ÷ Working days per year
= 8,000 ÷ 250
= 32 units
b. The calculation of the number of days for continuing the production is
= current production plan calls ÷ production capacity
= 400 ÷ 200
= 2 days
c. The production runs per year required is
Number of production runs per year = Annual demand ÷ Production quantity
= 8,000 ÷ 400
= 20
d. In the case of production stops, the number of refrigerators and the average inventory is
But processing this first we have to find out the maximum inventory level which is
= Q × (1 - d ÷ p)
As
Q represents Production quantity
d represents daily demand
p represents production capacity
Therefore, the maximum inventory level is
= 400 × (1 - 32 ÷ 300)
= 400 × (1 - 0.16)
= 400 × 0.84
= 336 refrigerators
Hence, the average inventory is
= Maximyum inventory ÷ 2
= 336 refrigerators ÷ 2
= 168 refrigerators
e. The total annual set up cost and holding cost is
But before this, we need to compute it individually
Annual set up cost = Number of production runs per year × Set up cost
= 20 × $120
= $2,400
Annual holding cost = Average inventory level × Holding cost
= 168 × $50
= $8,400
Total annual set up cost and holding cost is
= $2,400 + $8,400
= $10,800
"The conversion ratio of these convertible debentures is set at issuance at 200:1. The trust indenture for the debentures includes an "anti-dilutive" covenant. The company wants to issue 50,000 additional common shares. The conversion price after the issuance of the additional common shares will be:"
Answer:
$4
Explanation:
The conversion price of the convertible bonds set at issuance was $5 per share ($1000 par/200 conversion ratio). If the company issues more common shares, the market value of outstanding shares will fall. For instance, if the common stock price is trading at $5, Therefore, the bond and the common are at parity. If 25% more share isnissued by the company as it does in the aforementioned example -- there would be $1000000 share of common at $5 par or 200000 shares outstanding and the company intends to share 50000 more shares, or 25% more), the adjusted conversion price of the stock after issuance will now become $5/1.25 = $4 per share.
Nonetheless, i the conversion isn't being adjusted, the convertible security which was "at the money" goes "out the money". The protect convertible security holders, an anti-dilutive covenant is included in the trust indenture. The conversion price is adjusted for these dilutive effects. The new conversion pricewill be $5 original price/1.25 = $4
The cost of units transferred from Work in Process Inventory to Finished Goods Inventory is called the cost of goods manufactured.
1. True
2. False
Answer:
1. True
Explanation:
Work in process inventory is inventory that is still undergoing processing. When the processing is completed, the goods (inventory) become finished goods. And they are transferred to Finished Goods Inventory as cost of goods manufactured. Finished Goods Inventory represents goods that are available for sale. The cost of finished goods inventory also forms part of the cost of goods sold, which is used in determining the gross profit. Accounting for work in process inventory is part of the multi-step system of accumulating and allocating cost of production to finished goods.
Suppose that you just purchased 150 shares of XYZ stock for $60 per share. a. If the initial margin requirement is 71.00%, how much money must you borrow?
Answer:
$2,610
Explanation:
Calculation for how much money you must borrow.
Using this formula
Amount to be borrowed =( Purchased shares* Per share price*(Initial margin requirement percentage)
Let plug in the formula
Amount to be borrowed= 150 shares*$60 per shares *(1-0.71)
Amount to be borrowed=$9,000*(0.29)
Amount to be borrowed=$2,610
Therefore how much money you must borrow will be $2,610