Answer:
1.Net Realizable value $530,500
2.$19,500
Explanation:
1. Calculation for Determining the net realizable value of accounts receivable after adjustment will be
Ending Account receivable $550,000- $19,500
Net Realizable value=$530,500
2. Calculation to determine the amount of the adjusting entry for bad debt expense and the adjusted balance of Allowance for Doubtful Accounts
The Allowance for Doubtful Accounts = $25,000
Using this formula
Bad debts expense = Ending Allowance for Doubtful Accounts - Beginning Allowance for Doubtful Accounts
Let plug in the formula
= 25,000 - 5,500
= $19,500
Frantic Fast Foods had earnings after taxes of $900,000 in 20X1 with 301,000 shares outstanding. On January 1, 20X2, the firm issued 32,000 new shares. Because of the proceeds from these new shares and other operating improvements, earnings after taxes increased by 28 percent. a. Compute earnings per share for the year 20X1. (Round your answer to 2 decimal places.) b. Compute earnings per share for the year 20X2. (Round your answer to 2 decimal places.)
Answer:
A.$2.99
B.$1.15
Explanation:
Frantic Fast Foods
A.Computation of the earnings per share for the year 20X
Using this formula
Earnings per Share=Earnings after Taxes/Shares Outstanding
Let plug in the formula
900,000/301,000
=$2.99
The earnings per share for 20X1 will be $2.99
B. Computation of the earnings per share for the year 201X
Earnings after Taxes= 301,000 * 1.28 = 385,280
Shares Outstanding=301,000 + 32,000 = 333,000
Hence,
Earnings after Taxes/Shares Outstanding
385,280 / 333,000 = $1.15
Therefore the earnings per share for 20X1 will
be $1.15 .
Applying the Cost of Goods Sold Model The following amounts were obtained from the accounting records of Enderle Company: 2019 2020 2021 Beginning inventory $38,900 (b) (d) Net purchases (a) $71,200 $91,820 Ending inventory 42,100 (c) 42,350 Cost of goods sold 83,500 90,800 (e) Required: Compute the missing amounts.
Answer:
Find below a properly aligned details of the question:
The following amounts were obtained from the accounting records of Enderle Company:
2016 2017 2018
Beginning inventory $38,900 (b (d)
Net purchases (a) $71,200 $91,820
Ending inventory 42,100 (c) 42,350
Cost of goods sold 83,500 90,800 (e)
Find all the answers and computations below
Explanation:
In the year 2016, net purchases can be computed using the cost of sales formula below:
cost of sales=beginning inventory+purchases-ending inventory
purchases=cost of sales+ending inventory-beginning inventory
purchases=$83,500+$42,100-$38,900=$ 86,700.00
Ending inventory in 2016=beginning inventory in 2017=$42,100
Ending inventory in 2017=beginning inventory+purchases-cost of sales
Ending inventory in 2017=$42,100+$72,100-$90,800=$ 23,400.00
ending inventory in 2017=beginning inventory in 2018=$23,400.00
cost of sales in 2018=beginning inventory+purchases-ending inventory
cost of sales in 2018=$23,400+$91,820 -$42,350 =$72,870
Rogers Inc. has provided the following data for the month of June. There were no beginning inventories; consequently, the direct materials, direct labor, and manufacturing overhead applied listed below are all for the current month.
Work in process Finished goods Cost of goods sold Total
Direct materials $2,380 16790 43930 $63,100
Direct labor 1710 16060 42020 $59,790
Manufacturing overhead applied 1520 9880 26600 $38,000
Total $5,610 $42,730 $112,550 $160,890
Manufacturing overhead for the month was underapplied by $1,000. The company allocates any underapplied or overapplied manufacturing overhead among work in process, finished goods, and cost of goods sold at the end of the month on the basis of the overhead applied during the month in those accounts. The work in process inventory at the end of June after allocation of any underapplied or overapplied manufacturing overhead for the month is closest to:
a. $5,570
b. $5,575
c. $5,645
d.$5,650
Answer:
d.$5,650
Explanation:
Rogers Inc.
Work in process Finished goods Cost of goods sold Total
Direct materials $2,380 16790 43930 $63,100
Direct labor 1710 16060 42020 $59,790
Manufacturing overhead
Applied 1520 9880 26600 $38,000
% OF OH Applied 1520/38000 9880/38000 26600 /38000
4% 26% 70%
Total $5,610 $42,730 $112,550 $160,890
Under applied 4% of 1000 26% of 1000 70% of 1000
Under applied 40 260 700
Total $ 5650 42990 113250
We find the percentage of the manufacturing overhead applied and multiply it with the under applied amount. Then we add the underapplied amount to the total to get the actual amount.
Webster's Discount Appliances expects sales of $12,000, $15,000, and $25,000 during April, May, and June (big sale in June). To build business, Webster let's all customers buy on credit, and all do so. In the past, 20% of Webster's Discount Appliances sales have been collected during the month of sale, 65% are collected the following month, and 15% the month after that. If this trend continues, what will be Webster's total cash collections in the month of June
Answer:
$16,550
Explanation:
The computation of total cash collections in the month of June is shown below:-
Total cash collections in the month of June = (June sales × Percentage of collection) + (May sales × Percentage) + (April × Percentage)
= ($25,000 × 20%) + ($15,000 × 65%) + ($12,000 × 15%)
= $5,000 + $9,750 + $1,800
= $16,550
So, for computing the total cash collections in the month of June we simply applied the above formula.
An Indifference curve shows:
a. the one most desirable portfolio for a particular investor
b. all combinations of portfolios that are equally desirable to a particular investor
c. all combinations of portfolios that are equally desirable to all investors.
d. the one most desirable portfolio for all investor
Answer:
The correct answer to the question is option B (all combinations of portfolios that are equally desirable to a particular investor).
Explanation:
An indifference curve is a downward sloping graph that cannot Intersect showing two products that a consumer has no preference. Depends on the level of that consumer's income, the consumer chooses two products that give similar utility. The consumer shows no preference for any of the two products because if the products are close substitutes, it will be easier for the consumer to show no preference as they both give similar satisfaction, that is, the difference in the products is not obvious because they both serve a similar purpose to a consumer.
An investor would consider the indifference curve of any portfolio with a good utility score considering risk and finances as the combination of portfolios which would give the most satisfaction.
The law of demand is based on the observation that:________.
a. people buy less of a product when the product becomes less fashionable.
b. stores go out of business if they lower prices.
c. people buy more of a product when the price falls.
d. people are indifferent to price changes.
Answer:
C
Explanation:
its C because if the price goes down for a product then you buy more of something you wanted to get more out of.
Fill in the blank that completes the statement. Alonzo’s Crooked Cake Shop has had workers attempting to unionize in order to be able to work fewer hours per week. Alonzo’s argues in court that because there is only one other cake shop in the region, a strike and other union activities would disrupt competition in the cake business. Alonzo’s is using __________ to prevent union activities.
Answer:
Antitrust law
Explanation:
Alonzo is using antitrust law by arguing in the court that there is only one other cake shop in the region and a strike or union activities would disrupt competition in the cake business.
In antitrust laws, These laws promote vigorous competition and protect consumers from anticompetitive mergers and business practices.
Clothing Emporium was organized on January 1, 2021. The firm was authorized to issue 100,000 shares of $5 par value common stock. During 2021, Clothing Emporium had the following transactions relating to stockholders’ equity: Issued 30,000 shares of common stock at $7 per share. Issued 20,000 shares of common stock at $8 per share. Reported a net income of $100,000. Paid dividends of $50,000. What is the total stockholders' equity at the end of 2021?
Answer:
The total stockholders' equity at the end of 2021 is $250,000
Explanation:
In order to calculate the total stockholders' equity at the end of 2021 we would have to calculate the transactions relating to stockholders’ equity times the $5 par value common stock as follows:
stockholders' equity at the end of 2021=Issue of 30,000 shares*$5+Issue of 20,000 shares*$5
stockholders' equity at the end of 2021=$150,000+$100,000
stockholders' equity at the end of 2021=$250,000
The total stockholders' equity at the end of 2021 is $250,000
The following data is available for Oriole Company at December 31, 2020: Common stock, par $10 (authorized 29000 shares) $232000 Treasury stock (at cost $15 per share) $975 Based on the data, how many shares of common stock are outstanding
Answer:
23,125 shares
Explanation:
The computation of the number of outstanding common stock shares is shown below:
= (Common stock ÷ Par value per share) - (Treasury stock ÷ cost per share)
where,
Common stock is $232,000
Par value per share is $10
Treasury stock is $975
And, the cost per share is $15
Now placing these values to the above formula
So, the number of common stock outstanding shares is
= ($232,000 ÷ $10) - ($975 ÷ $15)
= $23,200 - $65
= 23,135 shares
If the demand for a product is elastic, then a rise in price will a.cause total spending on the good to increase cause total spending on the good to decrease c. keep total spending the same, but reduce the quantity demanded. d. keep total spending the same, but increase the quantity demanded 14 The price elasticity of demand for a linear demand curve follows the pattern (moving from high prices to low prices) a. elastic, unit elastic, inelastic unit elastic, inelastic, elastic inelastic, unit elastic, elastic d. constant (i.e., the price elasticity does not ch
Answer:
cause total spending on the good to decrease
a. elastic, unit elastic, inelastic
Explanation:
Elastic demand means that quantity demanded is sensitive to price changes. a small change in price leads to greater change in the quantity demanded.
If demand is elastic and price rises, the Quanitity demanded would fall and total spending would decrease.
Please check the attached image for elasticity along a linear demand curve.
I hope my answer helps you
A company had the following purchases and sales during its first year of operations:Purchases SalesJanuary: 10 units at $120 6 unitsFebruary: 20 units at $125 5 unitsMay: 15 units at $130 9 unitsSeptember: 12 units at $135 8 unitsNovember: 10 units at $140 13 unitsOn December 31, there were 26 units remaining in ending inventory. Using the perpetual FIFO inventory costing method, what is the cost of the ending inventory? (Assume all sales were made on the last day of the month.)
Answer:
Explanation:
FIFO inventory costing method uses the assumption that the first set of inventory is the first to be sold.
Purchase
Month Unit rate Cost
January 10 120 1200
February 20 125 2500
May 15 130 1950
September 12 135 1620
November 10 140 1400
Total 67
Sales (FIFO)
January 6 120 720
February 4 120 480
1 125 125
May 9 125 1125
September 8 125 1000
November 2 125 250
11 130 1430
Closing Inventory
May 4 130 520
September 12 135 1620
November 10 140 1400
3540
When a company borrows $150 million during the year and also repays $120 million of debt, the company can disclose the $30 million net amount as excess of borrowings over re-payments in the financing activities section of the statement of cash flows.
A. True
B. False
Answer:
B. False
Explanation:
Cash inflows and outflows for borrowing and repayment of debt are reported separately at gross amounts in the financial activities section of the cash flow statement.
When a company borrows $150 million during the year and also repays $120 million of debt. In this scenario, both amount of transaction (borrowing and repayment) will be reported separately at gross amount in the financial activities section of the cash flow statement.
Ibis Paper Company prepared the following static budget for November: Static budget Units/Volume 12,000 Per unit Sales revenue $21.00 $252,000 Variable costs 8.00 96,000 Contribution margin 156,000 Fixed costs 13,000 Operating income/(Loss) $143,000 If a flexible budget is prepared at a volume of 13,300 units, calculate the operating income at 13,300 units of production. The production level is within the relevant range.
Answer:
Net operating income= $159,900
Explanation:
Giving the following information:
Sales revenue= $21.00
Variable costs= $8.00
Fixed costs 13,000
For 13,300 units:
Sales= 21*13,300= 279,300
Total variable costs= 8*13,300= (106,400)
Total contribution margin= 172,900
Fixed costs= (13,000)
Net operating income= 159,900
Condensed financial data of Bonita Company for 2020 and 2019 are presented below. BONITA COMPANY COMPARATIVE BALANCE SHEET AS OF DECEMBER 31, 2020 AND 2019 2020 2019 Cash $1,830 $1,180 Receivables 1,710 1,320 Inventory 1,590 1,920 Plant assets 1,890 1,710 Accumulated depreciation (1,220 ) (1,190 ) Long-term investments (held-to-maturity) 1,320 1,440 $7,120 $6,380 Accounts payable $1,190 $890 Accrued liabilities 210 260 Bonds payable 1,400 1,580 Common stock 1,940 1,660 Retained earnings 2,380 1,990 $7,120 $6,380 BONITA COMPANY INCOME STATEMENT FOR THE YEAR ENDED DECEMBER 31, 2020 Sales revenue $6,720 Cost of goods sold 4,680 Gross margin 2,040 Selling and administrative expenses 920 Income from operations 1,120 Other revenues and gains Gain on sale of investments 80 Income before tax 1,200 Income tax expense 550 Net income 650 Cash dividends 260 Income retained in business $390 Additional information: During the year, $70 of common stock was issued in exchange for plant assets. No plant assets were sold in 2020. Prepare a statement of cash flows using the direct method.
Answer:
Statement of cash flows for the year ended December 31, 2020
Cash flow from Operating Activities
Income before tax 1,200
Adjustments for Non - Cash items :
Depreciation (1,220 - 1,190) 30
Gain on sale of investments (80)
Adjustments to Changes in Working Capital Items :
Increase in Receivables (390)
Decrease in Inventory 330
Increase in Accounts payable 300
Decrease in Accrued liabilities (50)
Cash generated from operations 1340
Income tax paid ( 550)
Net Cash from Financing Activities 790
Cash flow from Investing Activities
Purchase of Plant Assets (180 - 70) (110)
Proceeds from Sale of Investments(1,440 +80 - 1,320) 200
Net Cash from Investing Activities 90
Cash flow from Financing Activities
Repurchase of Bonds (1,580-1,400) (180)
Issue of Common Stock (1940 - 1660 - 70) 210
Net Cash from Financing Activities 30
Movement during the year 650
Cash and Cash Equivalents at Beginning of the year 1,180
Cash and Cash Equivalents at End of the year 1,830
Explanation:
The Direct method has been used : This must show adjustment to the Income before interest and tax.
The Statement of Cash flows is prepared under the following headings :
Cash flow from Operating ActivitiesCash flow from Financing ActivitiesCash flow from Investing ActivitiesA company received a bank statement showing a balance of $78,000. Reconciling items included outstanding checks of $2,400 and a deposit in transit of $9,400. What is the company's adjusted bank balance
Answer:
Adjusted Bank Balance = $85,000
Explanation:
Adjustment of bank balance is a bank reconciliation procedure, that is used to match the amount in the bank statement with the amount in the company's balance sheet.
To adjust the bank balance, particulars that need to be subtracted or added to the bank statement balance has to be identified and treated accordingly.
For this example, the adjusted balance is calculated thus:
Adjusted bank balance = (Bank statement balance) - (outstanding checks) +(deposit in transit)
Adjusted Bank Balance = 78,000 - 2,400 + 9,400 = $85,000
Note:
outstanding checks are subtracted because they are payments to be made made by the company, representing a liability to the company (payer)
deposit in transit is an income to the company that has not been credited yet, but that will be credited.
If the marginal cost of producing the fifth unit of output is higher than the marginal cost of producing the fourth unit of output, then at five units of output, average total cost must be rising.
a. True
b. False
Answer: a. True
Explanation:
Marginal Cost as well known is the cost of producing an extra unit of a good. Average Cost on the other hand is the cost of producing all the goods divided by the number of units that are produced.
It therefore stands to reason that if goods are getting more expensive to produce, the Average Cost will rise.
For example, take 2 scenarios.
Scenario 1.
Cost of producing units 1 to 5 is $2 each.
Average Cost = (2 + 2 + 2 + 2 + 2) / 5
= 10/5
Average Cost = $2
Scenario 2
Cost of Producing Units 1 to 5 are;
Unit 1 - $2
Unit 2 - $2
Unit 3 - $2
Unit 4 - $2
Unit 5 - $4
Average cost at unit 5 = (2 + 2 + 2 + 2 + 4)/5
= 12/5
= $2.40
Average Cost has increased by $0.40
Flagstaff, Inc. uses standard costing for its one product, baseball bats. The standards call for 3 board-feet of wood at $1.40 per board-foot, and 45 minutes of work at $12 per hour per bat. Total manufacturing overhead costs were estimated at $9,450, of which the variable portion was $0.50 per bat and the fixed portion was $1.00 per bat with an estimate of 6,300 bats to be produced. Flagstaff identifies price variances at the earliest possible point in time.During March, the company had the following results:Direct labor used = 4,800 hours at a cost of $56,400Actual manufacturing overhead fixed costs = $6,000Actual manufacturing overhead variable costs = $3,100Bats produced = 6,000InstructionsCompute the following variances for March.1. Labor quantity variance2. Total labor variancea3. Overhead controllable variancea4. Overhead volume variance2. Riggins, Inc. manufactures one product called tybos. The company uses a standard cost system and sells each tybo for $8. At the start of monthly production, Riggins estimated 9,500 tybos would be produced in March. Riggins has established the following material and labor standards to produce one tybo:Standard Quantity Standard PriceDirect materials 2.5 pounds $3 per poundDirect labor 0.6 hours $10 per hourDuring March 2013, the following activity was recorded by the company relating to the production of tybos:
1. The company produced 9,000 units during the month.
2. A total of 24,000 pounds of materials were purchased at a cost of $66,000.
3. A total of 24,000 pounds of materials were used in production.
4. 5,000 hours of labor were incurred during the month at a total wage cost of $55,000.Instructions
Calculate the following variances for March for Riggins, Inc.
(a) Materials price variance
(b) Materials quantity variance
(c) Labor price variance
(d) Labor quantity variance
Answer:
1a. Labour quantity variance =$3,600 Unfavorable
1b.Total labor variance= $2,400 Unfavorable
1c.Overhead controllable variance= $200 Favorable
1d.Overhead volume variance= $299 Unfavorable
2a.Material price variance $6,000 favorable
2b.Materials quality variance =$4,500 unfavorable
2c.Labor price variance $5,000 unfavorable
2d.Labor quantity variance= $4,000 favorable
Step by Step Explanation:
1.Flagstaff, Inc
a. Calculation for Labor quantity variance
Using this formula
Labor quantity variance = (Actual hours × Standard rate) – (Standard hours × Standard rate)
Let plug in the formula
Labor quantity variance= (4,800 × $12) – [(3/4 × 6,000) × $12]
Labour quantity variance= ($57,600-$54,000)
Labour quantity variance =$3,600 Unfavorable
b.Calculation for Total labor variance
Using this formula
Total Labor variance= (Actual hours × Actual rate) – (Standard hours × Standard rate)
Let plug in the formula
Total labor variance= (4,800 × $11.75) – [(3/4 × 6,000) × $12]
Total labor variance=$56,400-$54,000
Total labor variance= $2,400 Unfavorable
c. Calculation for Overhead controllable variance
Using this formula
Overhead controllable variance= Actual overhead – Overhead budgeted
Let plug in the formula
Overhead controllable variance= ($3,100 + $6,000) – [($0.50 × 6,000) + $6,300]
Overhead controllable variance=$9,100-($3,000+$6,300)
Overhead controllable variance =$9,100-$9,300
Overhead controllable variance= $200 Favorable
d. Calculation for Overhead volume variance
Using this formula
Overhead volume variance= (Normal hours – Standard hours) × Fixed overhead rate
Let plug in the formula
Overhead volume variance= [(6,300 × 3/4) – 4,500] × $1.33
Overhead volume variance =($4,725-$4,500)×$1.33
Overhead volume variance =$225×1.33
Overhead volume variance= $299 Unfavorable
2.Riggins, Inc.
a. Calculation for Materials price variance
Using this formula
Materials price variance= (Actual quantity purchased × Actual price) – (Actual quantity purchased × Standard price)
Let plug in the formula
Material price variance= (24,000 × $2.75) – (24,000 × $3)
Material price variance= $66,000-$72,000
Material price variance $6,000 favorable
b.Calaculation for Materials quantity variance
Using this formula
Materials quality variance= (Actual quantity used × Standard price) – (Standard quantity × Standard price)
Let plug in the formula
Materials quality variance= (24,000 × $3) – [(9,000 × 2.5) × $3]
Materials quality variance=$72,000-$67,500
Materials quality variance =$4,500 unfavorable
c.Calculation for Labor price variance
Using this formula
Labor price variance= (Actual hours x Actual rate) – (Actual hours × Standard rate)
Let plug in the formula
Labor price variance= (5,000 × $11) – (5,000 × $10)
Labor price variance=$55,000-$50,000
Labor price variance $5,000 unfavorable
d. Calculation for Labor quantity variance
Using this formula
Labor quantity variance= (Actual hours × Standard rate) – (Standard hours × Standard rate)
Let plug in the formula
Labor quantity variance= (5,000 × $10) – [(0.6 × 9,000) × $10]
Labor quantity variance=$50,000-$54,000
Labor quantity variance= $4,000 favorable
All of the following are functions of the Federal Reserve System EXCEPT:______
a. providing a system of check collection and clearing.
b. lending funds to risky customers denied credit by commercial banks.
c. supplying the economy with fiduciary currency.
d. acting as the government's fiscal agent.
Answer:
D
Explanation:
The others are all bank actions. THe last one talks about spies.
We use 2,000 electric drills per year in our production process. The ordering cost for these is $100 per order and the Holding( carrying) cost is assumed to be 40% of the per unit cost. Each drill costs $78. What is the optimal quantity that would minimize the sum of Holding and Ordering costs.
Answer:
The Optimal Quantity to minimize Holding and Ordering Costs:
This is also known as the Economic Order Quantity (EOQ).
We can work it out using the EOQ formula.
The formula for EOQ is:
Q = √(2DS)/H
where:
Q=EOQ units
D=Demand in units (typically on an annual basis) = 2,000
S=Order cost (per purchase order) = $100
H=Holding costs (per unit, per year) = $31.20 ($78 x 40%)
Formula and Calculation of Economic Order Quantity (EOQ)
Q = √(2x2,000x $100)/$31.2
Q = √12,820.5 = 113.228 or 113 approximately.
Explanation:
EOQ is an important cash flow management tool. The formula assists a company to control the amount of cash tied up in inventory. For many companies, inventory is their largest asset. Companies hold enough inventory to meet customers' demand. Since EOQ minimizes the level of inventory, the cash savings can be used for some other business purposes or investments.
The goal of the EOQ formula is to identify the optimal number of product units to order. If achieved, a company can minimize its costs for buying, delivery, and storing units, including the costs from running out of inventory.
Assume the profit margin is projected to increase to 9 percent while the dividend payout ratio remains constant. If sales increase by 12 percent, what is the projected total retained earnings (hint: add the additional RE onto the current RE)? Currently, the firm’s sales =$4,700, net income is $420, total assets=7890, dividends=125, A/P =790, LTD= 3130, and common stock=2780, and retained earnings =1190.
Answer:
The projected retained earnings are $1538.76
Explanation:
Profit margin=net income/sales
profit margin is 9%
sales growth rate is 12%
9%=net income/($4,700*(1+12%))
9%=net income/5264
9%*5264=net income
net income=$473.76
Projected total retained earnings=$1190+$473.76-$125=$1538.76
Which of the following is true about the leveraging effect? Under economic growth conditions, firms with relatively low financial leverage will have higher expected returns. Under economic growth conditions, firms with relatively more financial leverage will have higher expected returns.
Answer: Under economic growth conditions, firms with relatively more financial leverage will have higher expected returns.
Explanation:
Under economic growth conditions, firms and organizations with more financial muscle usually have higher expected returns.
This Growth, is as a result of the change in the company's earnings, revenue, GDP or some other sources over a period of time (usually a year) to the next. This growth are usually not affected by inflation.
Jerome is shopping for work supplies; he purchases 5 binders, 7 pens, and 3 reams of paper. The binders cost $4.50 each; the pens cost $1.10 each; and the reams of paper cost $4.25 each. The sales tax for his purchase is 7.75%. What is the total cost of Jerome’s purchase?
Answer:
$46.278625
Explanation:
5 blinder = 5 x $4.50 = $22.5
7 pens = 7 x $1.10 = $7.7
3reams =3 x $4.25 = $12.75
Total cost before sales tax= $42.95
Sales tax = $42.95 x 7.75% = $3.328625
Total cost after sales tax = $42.95 + $3.328625
Total cost after sales tax = $46.278625
The following is a list of characteristics that describe a firm operating under monopolistic competition. Indicate whether these characteristics occur in the short run, the long run, or both.
a. The firm produces a differentiated product.
b. The firm maximizes profits.
c. The firm earns zero economic profit.
d. All factors of production (inputs) are variable.
Answer:
a. Both
b. Both
c. Long Run
d. Long Run
Explanation:
a. Differentiating products ensures that a Company's products have an edge in the market that could gain them more customers and hence increase sales. The company therefore will differentiate in both the Short and the long run to ensure that they improve sales and Profitability.
b. The company will always seek to maximize profits regardless of whether it is in the short run or the long run. Maximising profit ensures that the company does not waste resources and remains viable and sustainable.
c. When a company is making Economic profit in the short run it attracts competitors such that in the long run, these competitors will drive down the profit that the firms in the market are making until no firm is making Economic profit.
d. In the long run, all factors of production are variable. This means that even though production capacity could not be changed in the short run, in the long run this is no longer the case. A well known example of this is Facility. In the short run, a company cannot build a new facility to bolster production but in the long run it will be able to.
The charter of Vista West Corporation specifies that it is authorized to issue 214,000 shares of common stock. Since the company was incorporated, it has sold a total of 146,000 shares (at $16 per share) to the public. It has bought back a total of 19,000. The par value of the stock is $5. When the stock was bought back from the public, the market price was $20.
Required:
1. Determine the authorized shares.
2. Determine the issued shares.
3. Determine the outstanding shares.
Answer:
Requirement 1: 214,000
Requirement 2: 146,000
Requirement 3: 127,00
Explanation:
Requirement 1:
Authorized shares: The maximum number of shares a company can issue are called authorized shares.They include both ordinary and preference shares. Here Visa West Corporation can issue 214,000 shares.
Requirement 2:
Issued shares: The number of shares the company has to issue to publicly
Here Visa West issued 146,000 shares to he public
Requirement 3:
Outstanding shares: The number of shares that need to be paid a dividend are Outstanding shares. Here Visa West Corporation has 127000(146000-19000) outstanding shares .
Faucet Company reported the following information for 2008: October November December Budgeted sales $620,000 $580,000 $720,000 All sales are on credit. Customer amounts on account are collected 50% in the month of sale and 50% in the following month. How much cash will Faucet receive in November
Answer:
Cash receipt for the month of November is $600000
Explanation:
The receipt of the cash will be such that the sales made in a particular month will be calculated half in the month of sale and half in the next month. Thus, the cash receipt from the accounts receivables for the month of November will be,
Cash received from the October sales = 620000 * 0.5 = $310000
Cash received from the November sales = 580000 * 0.5 = $290000
Total cash receipt in the month of November will be,
Cash receipt - November = 310000 + 290000
Cash receipt - November = $600000
Required information
Great Adventures Problem
The following information applies to the questions displayed below.
Tony and Suzie see the need for a rugged all-terrain vehicle to transport participants and supplies. They decide to purchase a used Suburban on July 1, 2022, for $13,200. They expect to use the Suburban for five years and then sell the vehicle for $5,100. The following expenditures related to the vehicle were also made on July 1, 2022:
The company pays $2,100 to GEICO for a one-year insurance policy.
The company spends an extra $4,200 to repaint the vehicle, placing the Great Adventures logo on the front hood, back, and both sides.
An additional $2,300 is spent on a deluxe roof rack and a trailer hitch.
The painting, roof rack, and hitch are all expected to increase the future benefits of the vehicle for Great Adventures. In addition, on October 22, 2022, the company pays $1,000 for basic vehicle maintenance related to changing the oil, replacing the windshield wipers, rotating the tires, and inserting a new air filter.
Required:
Record the depreciation expense and any other adjustments related to the vehicle on December 31, 2022.
Answer:
book value = $13,200 (purchase price) + $4,200 (paint) + $2,300 (accessories) = $19,700
useful life 5 years, salvage value $5,100
assuming the company uses straight line depreciation:
depreciation per year = ($19,700 - $5,100) / 5 years = $2,920 per year
the journal entries to record the purchase of the vehicle and the improvements are:
July 1, 2022, vehicle is purchased
Dr Suburban SUV 13,200
Cr Cash 13,200
July 1, 2022, vehicle's paint and accessories
Dr Suburban SUV 6,500
Cr Cash 6,500
the journal entry to record depreciation expense ($2,920 x 6 months)
December 31, 2022, depreciation expense
Dr Depreciation expense 1,460
Cr Accumulated depreciation - Suburban SUV 1,460
the journal entry to record insurance expense ($2,100 x 6 months)
December 31, 2022, insurance expense
Dr Insurance expense 1,050
Cr Prepaid insurance 1,050
1) The depreciation expense is :
Book Value = Purchase price + Paint + Accessories
Book Value = $13,200+ $4,200 + $2,300
Book Value = $19,700
Selling Value after 5 years = $5,100
Assuming :
Straight Line Depreciation:
Depreciation per year = (Book Value-Selling Value )/5 Years
Depreciation per year = ($19,700 - $5,100) / 5 years
Depreciation per year = $2,920 per year
The journal entries to record the purchase of the vehicle and the improvements are:
July 1, 2022, vehicle is purchasedDr Suburban SUV $13,200
Cr Cash $13,200
July 1, 2022, vehicle's paint and accessoriesDr Suburban SUV $6,500
Cr Cash $6,500
Journal entry to record depreciation expense ($2,920 x 6 months)December 31, 2022,
Dr Depreciation expense $1,460
Cr Accumulated depreciation - Suburban SUV $1,460
Record insurance expense ($2,100 x 6 months)Dr Insurance expense $1,050
Cr Prepaid insurance $1,050
Learn more about "Depreciation":
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A person who organizes a business and then runs it is called
Answer:
The answer is a business entrepreneur or just an entrepreneur
Explanation:
Watching shark tank helps you understand what is an entrepreneur
I hope this helps you
Stay safe:)
Bow Chicka Bow Wow
Grand Garden is a luxury hotel with 165 suites. Its regular suite rate is $210 per night per suite. The hotel’s cost per night is $135 per suite and consists of the following.
Variable direct labor and materials cost $ 36
Fixed cost [($5,970,000/165 suites) ÷ 365 days] 99
Total cost per night per suite $ 135
The hotel manager received an offer to hold the local Bikers’ Club annual meeting at the hotel in March, which is the hotel’s low season with an occupancy rate of under 55%. The Bikers’ Club would reserve 45 suites for three nights if the hotel could offer a 55% discount, or a rate of $94 per night. The hotel manager is inclined to reject the offer because the cost per suite per night is $135.
Required:
Prepare an analysis of this offer for the hotel manager.
Answer:
rental price per night $210
variable direct labor and materials $36
fixed costs $5,970,000
assuming 100% occupancy rate during the whole year, fixed cost per unit = $99 per night
total cost per night $135
assuming a 55% occupancy rate = 90.75 rooms per night
fixed costs are equal in both scenarios, so they are not relevant
alternative A alternative B differential
not rent rent to bikers amount
rental revenue $19,057.50 $23,310 ($4,252.50)
per day
variable costs -$3,267 -$4,887 $1,620
total per night $15,790.50 $18,423 ($2,632.50)
x 3 nights $47,371.50 $55,269 ($7,897.50)
By not renting the rooms to the Biker Club, the hotel will be losing $7,897.50 during the 3 nights.
The allocation of fixed costs per night assumes that all the hotel rooms are being rented every night and that is not true, so the total cost per night is not a valid amount. They should allocate fixed costs based on the average occupancy rates per month.
At the beginning of the period, the Cutting Department budgeted direct labor of $136,000, direct materials of $150,000 and fixed factory overhead of $11,900 for 8,000 hours of production. The department actually completed 10,600 hours of production. The appropriate total budget for the department, assuming it uses flexible budgeting, is Round your final answer to the nearest dollar. Do not round interim calculations.
Answer:
Total cost under flexible budgeting is $390,850
Explanation:
Calculation of Standard direct labor Cost
Standard Direct labor Cost=Budgeted Labor cost/Budgeted hour of Production
=$136,000 / 8,000
=$17 per hour
Calculation of Standard material Cost
Standard material Cost = Budgeted material Cost /Budgeted hour of Production
=$150,000 / 8,000
=$18.75 per hour
Calculation of Total cost under flexible budgeting
Direct Material Cost = 10,600 * $18.75 = $198,750
Direct Labour Cost= 10,600 * 17 = $180,200
Fixed factory overhead= $11,900
Total budgeted cost $390,850
If the unit price of inventory is increasing during a period, a company using the LIFO inventory method will show less gross profit for the period, than if it had used the FIFO inventory method.
a. True
b. False
A) I think the answer should be True