Answer:
The present worth of aircraft = $29137.82
Explanation:
Given the cost of money (r ) = 10%
The initial cost of small aircraft = $35000
Annual repair and maintenance costs (A) = $20000
Salvage valaue = $10000
Now calculate the present value of aircraft by adding the initial cost of annual maintenance and salvage value and subtracting the initial cost.
[tex]Present worth = initial cost + \frac{A[1-(1+r)^{-n}]}{r} - \frac{Salvage \ value}{(1 + r)^{n}} \\= 35000 + \frac{20000 [1 – (1+ 0.01)^{-2}]}{0.01} - \frac{10000}{(1 + 0.01)^{2}} \\= $29137.82[/tex]
Nick contracts for the sale of this year's strawberry crop to Phoenix, with payment to go to Rural Cooperative Association. The contract reserves to Nick and Phoenix the right to modify its terms. Rural Cooperative's right to payment is
Answer:
Subject to any change That Phoneix and Nick make
Explanation:
Since in the question, it is given that the contracts reserve the right to change or modify the term of the contract between the Nick and Phoenix and the payment is go to Rural Cooperative Association
Therefore the right to payment reflects the changes that made by Phoneix and Nick as the contract allows to make any modification or changes to the contract terms
Oriole Company had sales of $392000, variable costs of $192000, and direct fixed costs totaling $97000. The company’s operating assets total $809000, and its required return is 10%. How much is the residual income?
Answer:
Residual Income = $ 22,100
Explanation:
Residual income is the excess of the controllable profit over the opportunity cost of capital invested.
It is computed as follows:
Residual income = Controllable profit - (cost of capital× operating assets)
Controllable profit = 392,000 - 192,000- 97,000 = $103,000
Residual income = 103,000 - (10%× 809,000)= 22,100
Residual Income = $ 22,100
Tri Fecta, a partnership, had revenues of $364,000 in its first year of operations. The partnership has not collected on $45,100 of its sales and still owes $38,400 on $220,000 of merchandise it purchased. There was no inventory on hand at the end of the year. The partnership paid $28,300 in salaries. The partners invested $46,000 in the business and $25,000 was borrowed on a five-year note. The partnership paid $3,000 in interest that was the amount owed for the year and paid $9,400 for a two-year insurance policy on the first day of business. Ignore income taxes.Compute the cash balance at the end of the first year for Tri Fecta.
a) $ 332,110
b) $ 161,640
c) $ 166,290
d) $ 155,440
Answer:
$167,600
Explanation:
Net income:
Sales revenue $364,000
- COGS $220,000
- Salaries $28,300
- Interest $3,000
- Insurance $4,700
Net Income $108,000
Cash flow from operating activities:
Net income $108,000
adjusting entries:
accounts receivable ($45,100)accounts payable $38,400prepaid insurance ($4,700)Net cash flow from operating activities $96,600
Cash flow from financing activities:
capital invested $46,000
money borrowed $25,000
Net cash flow from financing activities $71,000
Cash balance $167,600
Assume a Cobb-Douglas production function of the form: q equals 10 Upper L Superscript 0.33 Baseline Upper K Superscript 0.75. What type of returns to scaleLOADING... does this production function exhibit?
Answer:
Since 0.33 + 0.75 = 1.08 is greater than one, this production function therefore exhibits increasing returns to scale.
Explanation:
From the question, we have the following restated equation:
[tex]q=10L^{0.33} K^{0.75}[/tex]
Where q is the output, and L and K are inputs
To determine the types of returns to scale, we increase each of L and K inputs by constant amount c as follows:
[tex]q = 10(cL)^{0.33}(cK)^{0.75}[/tex]
We can now solve as follows;
[tex]q = 10c^{0.33+0.75} L^{0.33}K^{0.75}[/tex]
[tex]q=c^{1.08} L^{0.33} K^{0.75}[/tex]
Since 0.33 + 0.75 = 1.08 is greater than one, this production function therefore exhibits increasing returns to scale.
Bodin Company manufactures finger splints for kids who get tendonitis from playing video games. The firm had the following inventories at the beginning and end of the month of January.
January 1 January 31
Finished goods $126,000 $117,000
Work in process 235,000 251,000
Raw material 134,000 124,000
The following additional data pertain to January operations.
Raw material purchased $190,000
Direct labor 400,000
Actual manufacturing overhead 170,000
Actual selling and administrative expenses 115,000
The company applies manufacturing overhead at the rate of 60 percent of direct-labor cost. Any overapplied or underapplied manufacturing overhead is accumulated until the end of the year.
Required:
1. Compute the company's prime cost for January.
2. Compute the total manufacturing cost for January.
3. Compute the cost of goods manufactured for January.
4. Compute the cost of goods sold for January.
5. Compute the balance in the manufacturing overhead account on January 31.
Answer:
1. Prime Costs $ 600,000
2. Total Manufacturing Costs $ 770,000
3. Cost of goods manufactured $ 754,000
4. Cost of Goods Sold $ 763,000
5: Over applied Overhead= $ 70,000
Explanation:
Add ing Direct Materials and Direct Labor gives Prime Costs.
Bodin Company
January 1 Raw material 134,000
Add Raw material purchased $190,000
Less January 31 Raw material 124,000
Direct Materials Used $ 200,000
Direct labor 400,000
1.Prime Costs $ 600,000
Actual manufacturing overhead 170,000
2. Total Manufacturing Costs $ 770,000
Adding Prime Costs to the Actual Manufacturing Overhead gives Total Manufacturing Costs.
2. Total Manufacturing Costs $ 770,000
Add January 1 Work in process 235,000
Cost of Goods Available for Manufacture $ 1005,000
Less January 31 Work in process 251,000
3. Cost of goods manufactured $ 754,000
Adding Opening Work in Process to Total Manufacturing Costs and Subtracting Closing Work in Process from Total Manufacturing Costs the gives Cost of goods manufactured .
3. Cost of goods manufactured $ 754,000
Add January 1 Finished goods $126,000
Cost of Goods Available for Sale $ 880,000
Less January 31 Finished goods $117,000
4. Cost of Goods Sold $ 763,000
Adding Opening Finished goods to Cost of Goods Manufactured and Subtracting Closing Finished goods from Cost of Goods Manufactured the gives Cost of goods sold .
Applied Manufacturing Overhead= 60% of 400,000= $ 240,000
Actual Overhead $ 170,000
5: Over applied Overhead= Applied Overhead Less Actual Overhead
= 240,000- 170,000= $ 70,000
Overheads Debit Credit
Actual Applied $240,000
$ 170,000
Over Applied
$ 70,000
$ 240,000 $ 240,000
Pratt Corp. started the Year 2 accounting period with total assets of $37,000 cash, $15,500 of liabilities, and $12,000 of retained earnings. During the Year 2 accounting period, the Retained Earnings account increased by $14,550. The bookkeeper reported that Pratt paid cash expenses of $29,500 and paid a $2,700 cash dividend to stockholders, but she could not find a record of the amount of cash revenue that Pratt received for performing services. Pratt also paid $10,000 cash to reduce the liability owed to a bank, and the business acquired $8,500 of additional cash from the issue of common stock. Assume all transactions are cash transactions.Requried:a. Prepare an income statement for the 2018 accounting period.b. Prepare a statement of changes in stockholders’ equity for the 2018 accounting period.c. Prepare a period-end balance sheet for the 2018 accounting period.d. Prepare a statement of cash flows for the 2018 accounting period.
Answer:
a) Revenue = $46,750
b) Stockholder's equity $35,050
c) Net Total Assets = Stockholder's equity = $35,050
d) Net cash generated for the year is $13,050; and Ending cash balance is $50,050
Explanation:
a. Prepare an income statement for the 2018 accounting period
To prepare this, cash revenue is first determined as follows:
Revenue = Retained earning for the year + Expenses + dividend = $46,750
The income statement can now be prepared as follows:
Pratt Corp.
Income statement
For the 2018 accounting period
Particulars $
Revenue 46,750
Expenses (29,500)
Net income 17,250
Dividend paid (2,700)
Retained Earnings for the year 14,550
b. Prepare a statement of changes in stockholder's equity for the 2018 accounting period
Pratt Corp.
Statement of changes in stockholder's equity
For the 2018 accounting period
Particulars $
Issue of common stock 8,500
Beginning retained earnings 12,000
Retained Earnings for the year 14,550
Stockholder's equity 35,050
c. Prepare a period-end balance sheet for the 2018 accounting period
Pratt Corp.
Balance Sheet
For the 2018 accounting period
Particulars $
Total Assets
Ending cash balance 50,050
Total Liability
Liability (15,500)
Net Total Assets 35,050
Financed By:
Issue of common stock 8,500
Beginning retained earnings 12,000
Retained Earnings for the year 14,550
Stockholder's equity 35,050
Note: Since both the Net Total Assets and Stockholder's equity are both equal to $35,050 as normally require, it shows the balance sheet is accrurately prepared.
d. Prepare a statement of cash flows for the 2018 accounting period
Pratt Corp.
Statement of Cash Flows
For the 2018 accounting period
Particulars $ $
Net income 17,250
Cash flow from operating activities 17,250
Changes in Financing Activities:
Decrease in liability (10,000)
Issue of common stock 8,500
Dividend paid (2,700)
Cash flow from financing activities (4,200)
Net cash generated for the year 13,050
Beginning cash balance 37,000
Ending cash balance 50,050
Quality Timber Pty Ltd is a well-established logging company. With below-average performance, their packaging department is consistently behind schedule. Employees often take long lunch breaks and frequently stop to chat with co-workers. However, the employees get along very well and frequently spend time together, even outside work. In this scenario, the performance norms are _____ and cohesiveness is _____, so productivity is ____.
Answer:
Quality Timber Pty Ltd
In this scenario, the performance norms are _below-average____ and cohesiveness is _ high____, so productivity is _low___.
Explanation:
It has been established that group norms influence individual behavior and group performance. Performance Norms refer to how a person should work in a given group and what his or her output should be.
Cohesion, according to wikipedia.com, "can be more specifically defined as the tendency for a group to be in unity while working towards a goal or to satisfy the emotional needs of its members." Employees of the packaging department tend to be enjoying so much group cohesiveness. But, they need to break some habits to focus on achieving corporate goals by increasing their productivity.
According to Paul Krugman of the Organization for Economic Co-operation and Development, "Productivity is commonly defined as a ratio between the output volume and the volume of inputs. In other words, it measures how efficiently production inputs, such as labour and capital, are being used in an economy to produce a given level of output." A rough assessment of the packaging department employees' performance shows low productivity, as they are "consistently behind schedule and take long lunch breaks, and frequently chat with co-workers," instead of concentrating on their jobs.
Clay Earth Company sells ceramic pottery at a wholesale price of $ 5.00 per unit. The variable cost of manufacture is $ 1.25 per unit. The fixed costs are $ 6 comma 700 per month. It sold 4 comma 200 units during this month. Calculate Clay Earth's operating income (loss) for this month. A. $ 9 comma 050 B. $ 14 comma 300 C. ($ 6 comma 700) D. ($ 9 comma 050)
Answer:
A. $ 9 comma 050
Explanation:
The operating income(loss) of a business is the result of the sales less operating costs. The operating cost is made up of the fixed cost and the variable cost.
If the Sales is more than the operating cost, the business makes an income otherwise, a loss.
Sales = $5 * 4200
= $21,000
Operating cost = $1.25 * 4200 + $6,700
= $11,950
Operating income(loss) = $21,000 - $11,950
= $9,050
The assets and liabilities of Thompson Computer Services at March 31, the end of the current year, and its revenue and expenses for the year are listed below. The capital of the owner was $190,000 at April 1, the beginning of the current year. Mr. Thompson invested an additional $25,000 in the business during the year. Accounts payable $1,200 Miscellaneous expense $370 Accounts receivable 12,340 Office expense 560 Cash 32,990 Supplies 1,670 Fees earned 68,980 Wages expense 25,580 Land 65,000 Drawing 3,000 Building 143,670 Prepare an income statement for the current year ended March 31. Thompson Computer Services Income Statement For the Year Ended March 31
Answer:
Thompson Computer Services
Income statement for the current year ended March 31.
Particulars Amount
Fees Earned $68,980
Expenses
Miscellaneous expense $370
Office expense $560
Wages expense $25,580
Total Expenses $26,510
NET INCOME $42.470
Robyn's Retail had 500 units of inventory on hand at the end of the year. These were recorded at a cost of $19 each using the last-in, first-out (LIFO) method. The current replacement cost is $17 per unit. The selling price charged by Robyn's Retail for each finished product is $27. In order to record the adjusting entry needed under the lower-of-cost-or-market rule, the Merchandise Inventory will be ________. Group of answer choices debited by $8,500 credited by $8,500 debited by $1,000 credited by $1,000
Answer:
Credit inventory 1000 and debit COGS 1000
Explanation:
19*500=9500 <price it is recorded at currently
The rule requires lower cost - market vs. price. Since market cost is lower, you have to find out how much the ending inventory balance should be
17*500=8500
9500-8500=1000
The inventory booked should be lowered, thus requiring credit entry of 1000. Since it is a merchandise loss, it is counted towards cost of goods sold expense, thus debit
Preferred stock valuation TXS Manufacturing has an outstanding preferred stock issue with a par value of $68 per share. The preferred shares pay dividends annually at a rate of 9%. a. What is the annual dividend on TXS preferred stock? b. If investors require a return of 4% on this stock and the next dividend is payable one year from now, what is the price of TXS preferred stock? c. Suppose that TXS has not paid dividends on its preferred shares in the past two years, but investors believe that it will start paying dividends again in one year. What is the value of TXS preferred stock if it is cumulative and if investors require a(n) 4% rate of return?
Answer:
a. Annual dividend on TXS preferred stock is $6.12 per share.
b. The price of TXS preferred stock is $153 per share.
c. The value of TXS preferred stock if it is cumulative and if investors require a(n) 4% rate of return is $164.77 per share.
Explanation:
These can be calculated as follows:
a. What is the annual dividend on TXS preferred stock?
The formula for calculating the annual dividend on preferred stock is given as follows:
Annual dividend on preferred stock = Par value of preferred stock * annual dividend rate
Since we have the following for TXS:
Par value of preferred stock = $68 per share
Annual dividend rate = 9%
Therefore, we have:
Annual dividend on preferred stock = $68 * 9% = $6.12 per share
Therefore, annual dividend on TXS preferred stock is $6.12 per share.
b. If investors require a return of 4% on this stock and the next dividend is payable one year from now, what is the price of TXS preferred stock?
The formula for calculating the price of preferred stock is given as follows:
Price of preferred stock = Dividend per share / Preferred stock required rate of return
Since for TXS, we have
Dividend per share = $6.12 per share
Preferred stock required rate of return = 4%, or 0.04
Therefore, we have:
Price of preferred stock = $6.12 / 0.04 = $153 per share
Therefore, the price of TXS preferred stock is $153 per share.
c. Suppose that TXS has not paid dividends on its preferred shares in the past two years, but investors believe that it will start paying dividends again in one year. What is the value of TXS preferred stock if it is cumulative and if investors require a(n) 4% rate of return?
Cumulative preferred stock implies that unpaid previous dividends can be carried forward as arrears to when the dividend is paid.
Since TXS has not paid dividends on its cumulative preferred shares in the past two years, but will start paying dividends again in one year implies that preferred stockholders will receive the dividends in arrears of one year together with the next dividend payment.
Based on this, we have
TXS preferred stock value = PV of two dividends + Preferred stock price
PV of two dividends = Present value of two dividends in arrears to paid now = M / (1 + r)^n
Where,
M = 2 * Annual dividend on TXS preferred stock = 2 * $6.12 = $12.24
r = 4%, or 0.04
n = 1 year
Therefore, we have:
PV of two dividends = $12.24 / (1 + 0.04)^1 = $11.77
Since from part b. preferred stock price is $153 per share, we therefore have:
TXS preferred stock value = $11.77 + 153 = $164.77 per share
Therefore, the value of TXS preferred stock if it is cumulative and if investors require a(n) 4% rate of return is $164.77 per share.
As per the question, the TXS company has outstanding preferred stock issues with a value that is parred USD 68 per share and prefers to pay the dividend at an annual rate of 9%.
Thus the yearly dividend of the TXS on preferred stock is a. total dividend on TXS stock is of $6.12 per share. If the investors gained four percent on this stock and next is made payable 1 year from now, then the prices of TXS stock will be $153/share. If the TXS is not being paid then the preferred share for the two-year period is total and if investors require at 4% rate of return which is at $164.77 per share.Learn more about the TXS Manufacturing has an outstanding.
brainly.com/question/13739586.
Witt Oil issued 100,000 shares of cumulative, nonparticipating preferred stock with a par value of $100 and a stated dividend of 7%. The shares sold for $96 per share. The journal record for this transaction would be
Answer:
Dr Cash$9,600,000
Dr Paid-in Capital in Excess of Par -Preferred Stock$400,000
Cr Preferred Stock$10,000,000
Explanation:
Since Witt Oil issued 100,000 shares and preferred stock with a par value of $100 in which the shares sold for $96 per share this means we have to Debit Cash with $9,600,000, Debit Paid-in Capital in Excess of Par -Preferred Stock $400,000 and Credit Preferred Stock$10,000,000
Dr Cash$9,600,000
(100,000 Shares × $96 per shares)
Dr Paid-in Capital in Excess of Par -Preferred Stock$400,000
(10,000,000 -$9,600,000)
Cr Preferred Stock$10,000,000
($100,000× per value 100)
Answer:
Dr Cash$9,600,000
Dr Paid-in Capital in Excess of Par -Preferred Stock$400,000
Cr Preferred Stock$10,000,000
Explanation:
Harry has a Personal Auto Policy (PAP) with liability limits of 100/$300/$50 and medical payments limits of $5,000 insuring his SUV. Harry also has other than collision and collision coverages with deductibles of $250 and $500, respectively. The local taxicab drivers are on strike and Harry decides to capitalize on the situation by transporting persons in his SUV for a fee. While transporting a businessman, Harry loses control of his SUV and hits a parked car. The damages are as follows:
Harry's medical costs - $2,000The businessman's medical costs - $1,000Damage to the parked car - $14,000Damage to Harry's car - $12,000How much, if any, will Harry's PAP insurer pay for damages under Part A—Liability Coverage?A. $0B. $14,000C. $17,000D. $29,000
Answer:
A) $0
Explanation:
The personal automobile policy (PAP) is an automobile insurance contract which most people purchase in order to protect their automobile from costs that may arise due to auto accidents.
Under the Part A—Liability Coverage, there are exclusions whereby the insurer won't pay for any damage, and one of the exclusions states that "for that “insured’s” liability arising out of the ownership or operation of a vehicle while it is being used as a public or livery conveyance, no liability coverage would be provided."
In this case, since Harry used his SUV to transport people for a fee, Harry's PAP insurer won't pay for damages under Part A—Liability Coverage because he used his SUV for livery conveyance.
Some quotes were stated from "Types of Automobile Policies and the Personal Automobile Policy"
A group of investors has formed SandInn Corporation to purchase a small hotel. The price is $200,000 for the land and $800,000 for the hotel building. If the purchase takes place in June, com- pute the MACRS depreciation for the first three calendar years. Then assume the hotel is sold in June of the fourth year, and compute the MACRS depreciation in that year also.
Answer:
1. Land is not to be depreciated under the Modified Accelerated Cost Recovery System (MACRS) depreciation schedule.
The Building however will be depreciated over a period of 39 years as it is considered an place of business and not a residential property.
The depreciation for such assets is 1.3% in year 1 and 40, and 2.6% for the years in-between.
Year 1 = 1.3% * 800,000
= $10,400
Year 2 = 2.6% * 800,000
= $20,800
Year 3 = 2.6% * 800,000
= $20,800
The total for the first 3 years is,
= 10,400 + 20,800 + 20,800
= $52,000
2. Depreciation in Year 4
= 800,000 * 2.6%
= $20,800
An investor is considering the purchase of a residential rental property that has an asking price of $400,000. The property has four rental units that are expected to rent for $1,200 each per month. Operating expenses and vacancy allowances are expected to be 45% of gross income. An 5% interest only mortgage loan is available for 5 years at 100% of the purchase price. How much cash income will the investor receive each month of the first year after paying the monthly mortgage payment
Answer:
The answer is $973
Explanation:
Solution
Given that:
A residential rental property asking price = $400,000
Property expected to rent = $1200
Operating expenses expected = 45%
Interest =5%
Mortgage loan available for =5 years
Purchase price =100%
Now, we find out the cash income the investor receive each month of the first year after paying the monthly mortgage payment
Thus
Rental income (1200*4 units)=$4800
Less: operating expenses (4800*45%)=$2160
The Net income per month=$2640
So,
Less:Monthly mortgage interest payment=$1667 [(400000*5%)
=20000/12=1667]
The Cash income =$973
Therefore the investor will receive $973 each month of the first year.
You are the project manager for a cable service provider. Your project team is researching a new service offering. They have been working together for quite sometime and are in the performing stage of Team Development. A new member has been introduced to the team. Which of the following is true?
A. The team will start all over again at the storming stage but quickly progress to the performing stage.
B. The team will continue in the performing stage.
C. The team will start all over again with the storming stage.
D. The team will start all over again with the forming stage.
Answer:
D. The team will start all over again with the forming stage.
Explanation:
Stages of team development are the various stages through which a group passes from formation to dissolution. These stages are important because it helps a manager identify the unique challenges his team is facing per time and various solutions to them.
The stages of team development are:
- Forming
- Storming
- Norming
- Performing
- Adjourning
If a team member joins a team, the team will start over from the forming phase because he will have to get used to his new team mates. He will undergo storming when there will be conflict between coworkers.
Next he will undergo norming when team members accept one another.
Performing when team works optimally to achieve set goals.
Finally the adjourning phase where team is disbanded
The January 1, Year 1 trial balance for the Tyrell Company is found on the trial balance tab. The beginning balances are assumed. Tyrell Co. entered into the following transactions involving short-term liabilities in Year 1 and Year 2.
Year 1
Apr. 20 Purchased $40,250 of merchandise on credit from Locust, terms n/30.
May 19 Replaced the April 20 account payable to Locust with a 90-day, 10%, $35,000 note payable along with paying $5,250 in cash.
July 8 Borrowed $80,000 cash from NBR Bank by signing a 120-day, 9%, $80,000 note payable.
Aug. 17 Paid the amount due on the note to Locust at the maturity date.
Nov. 5 Paid the amount due on the note to NBR Bank at the maturity date.
Nov. 28 Borrowed $42,000 cash from Fargo Bank by signing a 60-day, 8%, $42,000 note payable.
Dec. 31 Recorded an adjusting entry for accrued interest on the note to Fargo Bank.
Year 2
Jan. 27 Paid the amount due on the note to Fargo Bank at the maturity date.
Requirement General General Trial Schedule of Calculation of Year 2
Journal Ledger Balance Payables Interest Payment
1. General Journal tab- Prepare the 2016 journal entries related to the notes and accounts payable of Tyrell Co
2. Calculation of interest tab - Use the interest formula (P x Rx T) to verify the amount of interest recorded in your entries. Verify that total interest expense agrees with the trial balance.
3. Year 2 payment tab - Prepare the January 27, 2017 entry to record the re-payment of the note at maturity
Answer: Please see explanatory column
Explanation:
Tyrell Company for 2016
Journal to record the purchase of merchandise inventory
Date Account Title Debit Credit
April 20 Merchandise inventory $40,250
2016 Accounts payable - Locust $40250
Journal to record the replacement of account with 10% notes payable
Date Account Title Debit Credit
March 19 Accounts payable - Locust $40,250
2016 10%notes payable $35,000
Cash $5,250
Journal to record the Borrowing of $80,000 cash in 120-days at 9%,
Date Account Title Debit Credit
July 8 Cash $80,000
2016 9%notes payable $80,000
Journal to record the 10%, notes payable at maturity date
Date Account Title Debit Credit
Aug 17 10% notes payable $35,000
2016 interest expense $875
Cash $35,875
Using Interest = P X R X T
= 35,000 X 10% X 90/360=$875
Journal to record the 9%, notes payable at maturity date
Date Account Title Debit Credit
Nov 5 9% notes payable $80,000
2016 interest expense $2,400
Cash $82,400
Using Interest = P X R X T
= 80,000 X 9% X 120/360=$2,400
Journal to borrowing of 42,000 for 60 days at 8% interest payable at maturity date
Date Account Title Debit Credit
Nov 28 Cash $42,000
2016 8% notes payable $42,000
Journal to record the interst accrued on the notes payable
Date Account Title Debit Credit
Dec 31 Interest expense $308
2016 interest payable $308
Using Interest = P X R X T
= 42,,000 X 8% X 33/360=$308
33 days because the note payable was issued on November 28 but interest was accrued on December 31 making the accrued interest expense to be calculated for 33 days
Tyrell Company for 2017
Journal to record the payment of 8% payable at maturity date
Date Account Title Debit Credit
Jan 31 8%notes payable $42,000
2017 interest payable $308
Interest expense $252
Cash $42,560
Using Interest = P X R X T
= 42,,000 X 8% X 27/360=$252
27 days because from december to january 27th,
Finer Company uses a sales journal, purchases journal, cash receipts journal, cash payments journal, and general journal. Journalize the following transactions that should be recorded in the sales journal.
May:
2 Sold merchandise costing $280 to B. Facer for $420 cash, invoice no. 5703.
5 Purchased $2,750 of merchandise on credit from Marchant Corp.
7 Sold merchandise costing $756 to J. Dryer for $1,096, terms 2/10, n/30, invoice no. 5704.
8 Borrowed $8,000 cash by signing a note payable to the bank.
12 Sold merchandise costing $189 to R. Lamb for $302, terms n/30, invoice no. 5705.
16 Received $1,074 cash from J. Dryer to pay for the purchase of May 7.
19 Sold used store equipment (noninventory) for $900 cash to Golf, Inc.
25 Sold merchandise costing $330 to T. Taylor for $518, terms n/30, invoice no. 5706.
Required:
Journalize the May transactions that should be recorded in the sales journal assuming the perpetual inventory system is used.
Answer and Explanation:
The Preparation of the sales journal is prepared below:-
Finer Company
Sales Journal
Date Account Invoice Accounts Cost of goods
Debited Number Receivable Dr. Sold Dr.
Credit sales Credit inventory
May 7 J. Dryer 5704 $1,096 $756
May 12 R. Lamb 5705 $302 $189
May 25 T. Taylor 5706 $518 $330
Agency conflicts between managers and shareholders An agency relationship can degenerate into an agency conflict when an agent acts in a manner that is not in the best interest of his or her principal. In business, these conflicts most frequently involve the enrichment of the firm's executives or managers (in the form of money and perquisites or power and prestige) at the expense of the shareholders. This usurping of shareholder wealth is most likely to occur when shareholders do not have sufficient information about the decisions and actions being made by the firm's management. Consider the following scenario and determine whether an agency conflict exists: Daniel owns Daniel's Tantalizing Tees, a T-shirt shop in a small college town in Kansas. With a staff of three part-time employees, Daniel operates the business in accordance with his personal goals, dreams, and capabilities.
Does Daniel have an agency conflict to deal with?
A. No; by having part-time, as opposed to full-time, employees, Daniel is prevented from experiencing an agency conflict.
B. Yes; as both the owner and operator of Daniel's Tantalizing Tees, Daniel has created the necessary agency relationship through which an agency conflict can exist.
C. No; as both the owner and operator of Daniel's Tantalizing Tees, Daniel has not created the necessary agency relationship through which an agency conflict can exist.
D. Yes; there is always an inherent conflict of interest between owners and operators (managers). Consider the following scenario and determine whether an agency conflict exists: Five years ago, Li created a plant-care business that grew, stocked, and maintained fresh plants in office buildings throughout Denver. Over time, The Green Zone Inc. (TGZ) has grown from a proprietorship into a corporation, now reaching far beyond Denver. To finance and support this growth, TGZ issued shares that were sold to TGZ employees, Li's family members, and selected outsiders. Li is TGZ's chairman of the board of directors and CEO, but he is no longer the largest shareholder. At the latest annual meeting, two mutually exclusive proposals were placed on the ballot for discussion and vote. The first was put forth by Li and TGZ's management team, and the second was proposed by a small group of other shareholders. Both groups are adamantly opposed to the other group's proposal, even though both proposals would likely have the same effect on TGZ's value and riskiness.
Does an agency conflict exist between TGZ's management and the small group of opposing shareholders?
A. Yes; an agency relationship exists, and an agency relationship always gives rise to agency conflicts, regardless of the actual behavior of the participants.
B. Yes; any conflict or disagreement between the firm's managers and its shareholders constitutes an agency conflict.
C. No; although an agency relationship exists between TGZ's management-including Li as TGZ's chairman and CEO and the firm's shareholders-there is no agency conflict, because no expropriation or wasting of the shareholders' wealth has occurred.
D. No; Li was the original owner of TGZ, so he would always be sensitive to the concerns of the firm's current owners (shareholders) and would not engage in an agency conflict. For the past 40 years, companies have attempted to attract, retain, and encourage managers by developing attractive compensation packages. These compensation packages have also been intended to reduce potential agency conflicts between these managers and the firm's shareholders. In the best interest of shareholders, compensation packages should be structured in a way such that managers have an incentive to maximize the____value of the company's common stock price. Great Fortunes Baking Company's stockholders are mostly individual investors, and there is relatively little institutional ownership. If several pension and mutual funds were to take large positions in Great Fortunes Baking Company's stock, direct shareholder intervention would be likely to motivate the firm's management. Katz Investment Group's stock price is currently trading at $20 per share. The consensus among market analysts is that the stock should trade for $27.5 per share, given the amount, timing, and riskiness of the company's dividends. Is Katz Investment Group more or less likely to receive a hostile takeover bid?
1. Less likely
2. More likely
Answer:
1. C. No; as both the owner and operator of Daniel's Tantalizing Tees, Daniel has not created the necessary agency relationship through which an agency conflict can exist.
For an agency problem to exist, the owners and the managers must be two different sets of people. If they are the same person, then practically speaking, they cannot usurp their own wealth.
2. C. No; although an agency relationship exists between TGZ's management-including Li as TGZ's chairman and CEO and the firm's shareholders-there is no agency conflict, because no expropriation or wasting of the shareholders' wealth has occurred.
Indeed there is an Agency relationship in effect because some shareholders are not in management. However, it cannot be said that there is a agency conflict because there is no evidence shown that shareholder wealth is being expropriated.
3. Intrinsic
The Intrinsic value of a stock is the value that an investor believes the stock is worth. A Manager should therefore get incentives that will inspire them to take investor perception of stock high. When this happens it increases shareholder wealth primarily through capital gain.
4 ... direct shareholder intervention would be more likely to motivate the firm's management.
Institutional Investors such as Pension and Mutual funds usually have more say in a company as they represent several shareholders and have expertise in the field. Should they get involved, their direct intervention would motivate the firm's management.
5. More likely
If investors believe that the stock should be trading for higher than it actually is, this is incentive to try to lay their hands on the stock to take advantage of this undervaluation. They would be able to offer the current shareholders more money than what it is currently worth which will most likely get them the shares they want. This is classified as a Hostile takeover.
Use the minimax method to find all of the pure-startegy Nash equilibria for the following zero-sum games. Then, check your answer by using the iterated elimination of strictly dominated strategies method.
a.
Left Right
1 4
2 3
b.
Left Middle Right
5 3 2
6 4 3
1 6 2
Sides are:______
a. Up Down
b. Up Middle Down
Answer:
b
Explanation:
i dont really know,can someone explain to mee
Sexton Corp. has current liabilities of $510,000, a quick ratio of .93, inventory turnover of 6.9, and a current ratio of 1.5. What is the cost of goods sold for the company?
Answer:
The cost of goods sold for the company is $2,005,830.
Explanation:
This can be calculated from the available information using the following steps:
Step 1: Calculation of Current Assets
To do this, we use the current ratio formula as follows:
Current ratio = Current Assets / Current Liabilities
Substituting the values in the question into the equation above and solve for Current Assets, we have:
1.5 = Current Assets / $510,000
Current Assets = $510,000 * 1.5 = $765,000
Step 2: Calculation of Inventory
To do this, we use the Quick Ratio formula as follows:
Quick ratio = (Current Assets - Inventory) / Current Liabilities
Substituting the values in the question and from Step 1 into the equation above and solve for Inventory, we have:
0.93 = ($765,000 - Inventory) / $510,000
0.93 * $510,000 = $765,000 - Inventory
$474,300 = $765,000 - Inventory
$474,300 + Inventory = $765,000
Inventory = $765,000 - 474,300 = $290,700
Note that this inventory of $290,700 is the ending inventory.
Step 3: Calculation of Cost of Goods Sold
To do this, we use the Inventory Turnover formula as follows:
Inventory turnover = Cost of goods sold / Average Inventory
Note that average Average Inventory is the addition of the beginning and closing inventory divided by 2. But since the beginning inventory is not available, the practice is to use the ending inventory in place of the average inventory. This is what we do here below.
Substituting the values in the question and from Step 2 into the equation above and solve for Cost of goods sold, we have:
6.9 = Cost of goods sold / $290,700
Cost of goods sold = 6.9 * $290,7000 = $2,005,830
Therefore, the cost of goods sold for the company is $2,005,830.
On 12/31/X4, Zoom, LLC, reported a $55,500 loss on its books. The items included in the loss computation were $27,000 in sales revenue, $12,000 in qualified dividends, $19,000 in cost of goods sold, $47,000 in charitable contributions, $17,000 in employee wages, and $11,500 of rent expense. How much ordinary business income (loss) will Zoom report on its X4 return
Answer:Ordinary Business income loss =-$20,500.
Explanation:
Ordinary business Expenses are the expenses generally accepted according to the industry standards associated with running of a business.
Here, the ordinary business expenses for Zoom include
cost of good sold= $19,-000
employee wages= $17,000
rent expense = $11,500 and therefore will be deducted from its sales revenue.
charitable contributions and qualified dividends, do not cut across all industries and so are not classified under Ordinary Buisness expences.
Ordinary Business income loss = Sales revenue - cost of good sold, -employee wages- rent expense.
$27,000- $19,000-$`17,000-$11,500= -$20,500. to be reported on its X4 return
ABC Corporation has E & P of $240,000. It distributes land with a fair market value of $70,000 (adjusted basis of $25,000) to its sole shareholder, Paul. The land is subject to a liability of $55,000 that Paul assumes. Paul has: A
a. Taxable dividend of $15,000.
b. A taxable dividend of $25,000.
c. A taxable dividend of $45,000.
d. A taxable dividend of $70,000.
e. A basis in the machinery of $55,000
Answer: Paul has a taxable dividend of $15,000.
Explanation:
From the question, we are informed that ABC Corporation has E & P of $240,000 and distributes land with a fair market value of $70,000 (adjusted basis of $25,000) to its sole shareholder, Paul. We are further informed that the land is subject to a liability of $55,000.
The taxable dividend will be the difference between the fair market value of land and the liability on the land. This will be:
= $70,000 - $55,000
= $15,000
Therefore, Paul has a taxable dividend of $15,000.
A business received an offer from an exporter for 10,000 units of product at $13.50 per unit. The acceptance of the offer will not affect normal production or domestic sales prices. The following data are available: Domestic unit sales price $21 Unit manufacturing costs: Variable 12 Fixed 5 What is the amount of the gain or loss from acceptance of the offer
Answer:
Effect on income= $15,000 increase
Explanation:
Giving the following information:
A business received an offer from an exporter for 10,000 units for $13.50 per unit.
Unit manufacturing costs:
Variable 12
Because it is a special offer and there is unused capacity, we will not take into account the fixed costs.
Effect on income= number of units*unitary contribution margin
Effect on income= 10,000*(13.5 - 12)
Effect on income= $15,000 increase
Roman Mfg.'s July production involved actual direct labor costs of $41,514 for 3,400 direct labor hours. The budget for the July level of production called for 3,500 direct labor hours at $12.20 per hour, using a standard cost system.
1. Roman's labor rate variance for July is ____________
2. Roman's labor efficiency variance for July is _______________
Answer:
Instructions are below.
Explanation:
Giving the following information:
Roman Mfg.'s July production involved actual direct labor costs of $41,514 for 3,400 direct labor hours. The budget for the July level of production called for 3,500 direct labor hours at $12.20 per hour.
To calculate the direct labor efficiency and rate variance, we need to use the following formulas:
Direct labor time (efficiency) variance= (Standard Quantity - Actual Quantity)*standard rate
Direct labor time (efficiency) variance= (3,500 - 3,400)*12.2
Direct labor time (efficiency) variance= $1,220 favorable
Direct labor rate variance= (Standard Rate - Actual Rate)*Actual Quantity
Actual rate= 41,514/3,400= $12.21
Direct labor rate variance= (12.20 - 12.21)*3,400
Direct labor rate variance= $34 unfavorable
If a gain of $221000 is realized in the cash sale of a building having a book value of $882000, the total amount reported in the cash flows from investing activities section of the statement of cash flows is
Answer:
$1,103,000
Explanation:
The cash flow statement categories the company's transactions in a financial period into 3 groups; these are operating, investing and financing.
The net profit/loss, depreciation, changes in current assets (other than cash) and liabilities are considered as operating activities including income taxes.
The sale of assets, interest received, purchase of investments are examples of investing activities while the issuance of stocks, debt principal deduction (loan settlement), issuance of debt securities etc are examples of financing activities.
For assets disposed, the amount received from the disposal is the amount recorded as an investing activity.
Amount received - Book value of asset = Gain on disposal
Amount received = $221000 + $882000
= $1,103,000
A government has the following liabilities at the end of the year: General obligation bonds Compensated absences Salaries payable $1,500,00 120,000 40,000 What amount of liabilities should be reported in the governmental activities column of the government-wide statement of net position
Answer:
What should be reported is $1660000
Explanation:
Solution
Given that:
Thus
General obligation bonds=$1,500000
Compensated absences=$120,000
Total liabilities in the governmental activities column=$1660000
Therefore, the amount $1660000 should be reported in the governmental activities column of the government-wide statement of net position.
Required: Prepare journal entries to record the December transactions in the General Journal Tab in the excel template file "Accounting Cycle Excel Template.xlsx". Use the following accounts as appropriate: Cash, Accounts Receivable, Supplies, Prepaid Insurance, Equipment, Accumulated Depreciation, Accounts Payable, Wages Payable, Common Stock, Retained Earnings, Dividends, Service Revenue, Depreciation Expense, Wages Expense, Supplies Expense, Rent Expense, and Insurance Expense. 1-Dec Began business by depositing $10500 in a bank account in the name of the company in exchange for 1050 shares of $10 per share common stock. 1-Dec Paid the rent for the current month, $950 . 1-Dec Paid the premium on a one-year insurance policy, $600 . 1-Dec Purchased Equipment for $3600 cash. 5-Dec Purchased office supplies from XYZ Company on account, $300 . 15-Dec Provided services to customers for $7200 cash. 16-Dec Provided service to customers ABC Inc. on account, $5200 . 21-Dec Received $2400 cash from ABC Inc., customer on account. 23-Dec Paid $170 to XYZ company for supplies purchased on account on December 5 . 28-Dec Paid wages for the period December 1 through December 28, $4480 . 30-Dec Declared and paid dividend to stockholders $200 .
Answer:
journal entries to record the December transactions
1-Dec
Cash $10500 (debit)
Common Stock $10500 (credit)
1-Dec
Rent Expense $950 (debit)
Cash $950 (credit)
1-Dec
Prepaid Insurance $600 (debit)
Cash $600 (credit)
1-Dec
Equipment $3600 (debit)
Cash $3600 (credit)
5-Dec
Supplies Expense $300 (debit)
Accounts Payable $300 (credit)
15-Dec
Cash $7200 (debit)
Service Revenue $7200 (credit)
16-Dec
Accounts Receivable $5200 (debit)
Service Revenue $5200 (credit)
21-Dec
Cash $2400 (debit)
Accounts Receivable $2400 (credit)
23-Dec
Accounts Payable $170 (debit)
Cash $170 (credit)
28-Dec
Wages Expense $4480 (debit)
Cash $4480 (credit)
30-Dec
Dividends $200 (debit)
Cash $200 (credit)
Explanation:
The General Journal consists of Entries of Expenses, Capital Expenditures and Receipts and Payments in Cash.
Molen Inc. has an outstanding issue of perpetual preferred stock with an annual dividend yield of 7.50% and a par value of $60. If the market value for the preferred stock is $70, what is the required return on this preferred stock?
Answer:
10.71%
Explanation:
The computation of the required rate of return on this preferred stock is shown below :
The Required return on preferred stock is
= Dividend ÷ market value of preferred stock
= 7.50 ÷ $70
= 10.71%
By dividing the dividend from the market value of preferred stock we can get the Required return on preferred stock and the same is to be considered
therefore we ignored the par value i.e $60 as this is not relevant
Answer:
$61.54
Hope this helps! good luck :)
A sinking fund is established by a working couple so that they will have $60,000 to pay for part of their daughter's education when she enters college. If they make deposits at the end of each 3-month period for 8 years, and if interest is paid at 10%, compounded quarterly, what size deposits must they make
Answer:
quarterly deposit= $12,460.99
Explanation:
Giving the following information:
FV= $60,000
Number of periods= 4*8= 32
i= 0.10/4= 0.025
To calculate the quarterly deposit required, we need to use the following formula:
FV= {A*[(1+i)^n-1]}/i
A= quarterly deposit
Isolating A:
A= (FV*i)/{[(1+i)^n]-1}
A= (60,000*0.025) / [(1.025^32) - 1]
A= 12,460.99