Answer:
Chan Company
Journal Entries:
December 31:
Debit Bad Debts Expense $6,687
Credit Allowance for Doubtful Accounts $6,687
To record the bad debts expense.
February 1:
Debit Allowance for doubtful accounts $372
Credit Accounts receivable (P. Park) $372
To write-off bad debt.
June 5:
Debit Accounts receivable (P. Park) $372
Credit Allowance for doubtful accounts $372
To reverse previously written-off debt.
Debit Cash $372
Credit Accounts receivable (P. Park) $372
To record the receipt on account.
Explanation:
a) Data and Calculations:
Annual credit sales = $743,000
Estimated bad debts = 0.90% of credit sales
Estimated bad debts = $6,687 ($743,000 * 0.90%)
December 31:
Bad Debts Expense $6,687
Allowance for Doubtful Accounts $6,687
February 1:
Allowance for doubtful accounts $372
Accounts receivable (P. Park) $372
June 5:
Accounts receivable (P. Park) $372
Allowance for doubtful accounts $372
Cash $372
Accounts receivable (P. Park) $372
During the annual Black Friday Sale, The OLX sold a pair of ski boots, regularly priced at $245.00, at a discount of 40%. The boots cost $96.00 and expenses are 26% of the regular selling price. For how much were the ski boots sold?
Answer: $147
Explanation:
First find what 40% of $245.00 is:
= 40% * 245
= $98.00
The boots are sold at a discount of 40%. This means that 40% - which is $98 - was deducted from the value.
The selling price is therefore:
= 245 - 98
= $147
Since World War II, globalization has been driven by two major factors: the decline in barriers to the free flow of goods, services, and capital, and technological change.
a. True
b. False
Answer: True
Explanation:
Globalization, simply refers to the interaction and the integration that takes place among the economic entities worldwide. Since the 18thbcentiry, there's been an acceleration in globalization as a result of the advancement in transportation, communication technology and the reduction in trade barriers.
Therefore, the statement above is true.
When adjusting accrual earnings to obtain cash flows from operations, A. an increase in Accounts Payable is added to determine cash flow from operations. B. it is not necessary to consider any changes to Accounts Payable. C. an increase in Accounts Payable is deducted to determine cash flows from operations. D. a decrease in Accounts Payable is added to determine cash flow from operations.
Answer: A. an increase in Accounts Payable is added to determine cash flow from operations.
Explanation:
We should note that accounts payable refer to the amounts that the company pays to its suppliers, therefore the sum of the the total amount that's owed to the suppliers will be shown on the balance sheet of the company as accounts payable.
Therefore, when adjusting accrual earnings to obtain cash flows from operations, an increase in accounts payable is added to determine cash flow from operations.
Main Street Ice Cream Company uses a plant-wide allocation method to allocate overhead based on direct labor-hours at a rate of $2 per labor-hour.
Strawberry and vanilla flavors are produced in Department SV.
Chocolate is produced in Department C.
Sven manages Department SV and Charlene manages Department C. The product costs (per 1,000 gallons) follow:
Strawberry Vanilla Chocolate
Direct labor $755 $830 $1,130
Raw materials 805 505 605
Required:
a) If the number of hours of labor per 1,000 gallons is 56 for strawberry, 66 for vanilla and 100 for chocolate, compute the total cost of 1,000 gallons of each flavor using plant-wide allocation.
Total Cost
Strawberry
Vanilla
Chocolate
b) Charlene's department uses older, outdated machines. She believes that her department is being allocated some of the overhead of Department SV, which recently bought state-of- the-art machines.
After she requested that overhead costs be broken down by department, the following information was discovered:
Department SV Department C
Overhead $75,750 $14,274
Machine-hours 25,250 36,500
Labor-hours 25,250 18,300
Using machine-hours as the department allocation base for Department SV and labor-hours as the department allocation base for Department C, compute the allocation rate for each.
(Round your answers to 2 decimal places.)
Allocation Rate
Department SV per machine hour
Department C per labor hour
Answer:
Results are below.
Explanation:
A) Predetermined overhead rate= $2 per direct labor hour
The product costs (per 1,000 gallons) follow:
Strawberry Vanilla Chocolate
Direct labor $755 $830 $1,130
Raw materials $805 $505 $605
Direct labor hours:
56 for strawberry
66 for vanilla
100 for chocolate
We can calculate the total cost for 1,000 gallons for each flavor:
Strawberry:
Total cost= 755 + 805 + 56*2
Total cost= $1,672
Vanilla:
Total cost= 830 + 505 + 66*2
Total cost= $1,467
Chocolate:
Total cost= 1,130 + 605 + 100*2
Total cost= $1,935
b) To calculate the activities rates, we need to use the following formula:
Predetermined manufacturing overhead rate= total estimated overhead costs for the period/ total amount of allocation base
Department SV:
Activity rate= 75,570 / 25,250= $3 per machine hour
Department C:
Activity rate= 14,274 / 18,300= $0.78 per direct labor hour
Your employer, Pointer Media Group of Columbus, Ohio, has had an excellent year, and the CEO, Jeremy Pointer, would like to reward the troops for their hard work with a rustic yet plush winter retreat. The CEO wants his company to host a four-day combination conference/retreat/vacation for his 55 marketing and media professionals with their spouses or significant others at some spectacular winter resort.
One of the choices is Vail, Colorado, a famous ski resort town with steep slopes and dramatic mountain views. As you investigate the options in Vail, you are captivated by the Four Seasons Resort and Residences Vail, a five-star property with an outdoor pool, indoor and outdoor hot tubs, ski-in/ski-out access, a ski concierge, two acclaimed gourmet restaurants, and an amply equipped gym and fitness center. Other amenities include an on-site spa with massage and treatment rooms, a sauna, and facial and body treatments. Bathrooms feature separate bathtubs and showers, double sinks, and bathrobes. For business travelers, the hotel offers complimentary wired high-speed Internet access, complimentary wireless Internet access, and multiline phones as well as the use of two desktop computers.
The website of the Four Seasons Resort and Residences Vail is not very explicit on the subject of business and event facilities, so you decide to jot down a few key questions. You estimate that your company will require about 50 rooms. You will also need two conference rooms (to A/V equipment in the conference rooms, Internet access, and entertainment options for families. You have two periods that would possible: December 16-20 or January 13-17, You realize that both are peak times, but you wonder whether you can get a discounted accommodate 25 participants or more) for one and a half days. You want to know about room rates, conference facilities, You are interested in entertainment in Vail, and in tours to the nearby national parks. Eagle County Airport is 36 miles away rou and you would like to know whether the hotel operates a shuttle. Also, one evening the CEO will want to host a banquet for about 85 people. Mr. Pointer wants a report from you by September 13.
Your Task: Write a well-organized direct request letter or e-mail to Kiersten Dunn, Sales Manager, Four Seasons Resort and Resi dences Vail, One Vail Road, Vail, Co 81657.
Answer:
Answer is explained in the explanation section below.
Explanation:
Solution:
28 February, 2021
Kiersten Dunn,
Sales Manager,
Four Seasons Resort and Residence Vail,
One Vail Road, Vail,
Co 81657
Subject: Information on 50 rooms and two conference halls that are required for a four-day official retreat.
Dear Kierstenn,
Our Columbus, Ohio-based business, Pointer Media Group, is planning an official retreat in Vail. We liked your property a lot and think it's a good match for our needs. We're looking for dates between December 16 and 20, 2018 and January 13 and 17, 2018. Please share your availability based on our requirements so that we can schedule the retreat.
The retreat will last for four days. There will be some official conference meetings followed by enjoyable activities at the retreat.
Kindly mention the details about your resort as follows:
Availability of 50 rooms and 2 conference halls on the designated date:
Seating capacity of the conference halls:
Room rates and packages offered:
Services offered:
Availability of A/V equipment in conference room:
Access to Internet:
Availability of DVD player/recreation facilities:
Mode of payment accepted:
Toiletries provided:
Corporate discount offered, if any:
We eagerly await your prompt response on this matter. If you need any additional details, please contact us.
Sincerely,
Lily Sethi
HR, Pointer Media Group
Information concerning a product produced by Ender Company appears here: Sales price per unit $ 164 Variable cost per unit $ 94 Total annual fixed manufacturing and operating costs $ 434,000 Required Determine the following: Contribution margin per unit. Number of units that Ender must sell to break even. Sales level in units that Ender must reach to earn a profit of $182,000. Determine the margin of safety in units, sales dollars, and as a percentage.
Answer:
Results are below.
Explanation:
To calculate the unitary contribution margin, we need to use the following formula:
Contribution margin= selling price - unitary variable cost
Contribution margin= 164 - 94
Contribution margin= $70
Now, to determine the break-even point in units and sales dollars, we need to use the following formulas:
Break-even point in units= fixed costs/ contribution margin per unit
Break-even point in units= 434,000 / 70
Break-even point in units= 6,200
Break-even point (dollars)= fixed costs/ contribution margin ratio
Break-even point (dollars)= 434,000 / (70 / 164)
Break-even point (dollars)= $1,016,800
The desired profit is $182,000:
Break-even point in units= (fixed costs + desired profit) / contribution margin per unit
Break-even point in units= (434,000 + 182,000) / 70
Break-even point in units= 8,800
Finally, the margin of safety in units, sales dollars, and as a percentage:
Margin of safety (units)= (current sales level - break-even point)
Margin of safety (units)= 8,800 - 6,200
Margin of safety (units)= 2,600
Margin of safety (dollars)= (8,800*164) - 1,016,800
Margin of safety (dollars)= $426,400
Margin of safety ratio= (current sales level - break-even point)/current sales level
Margin of safety ratio= 426,400 / 1,443,200
Margin of safety ratio= 0.295
Describe good cash management practices involving inventory purchases. (Check all that apply.) Multiple select question. Buyers should take advantage of early payment discounts. Inventory should be purchased with cash whenever possible. Invoices should be paid on the last day of the discount period. Invoices should be paid on the first day of the discount period.
Answer:
Invoices should be paid on the last day of the discount period.
Buyers should take advantage of early payment discounts.
Explanation:
Cash management can be regarded as
process involvinh collection and management of cash flows. Cash management is very crucial for individuals as well as companies as far as financial stability is concerned. It should be noted that good cash management practices involving inventory purchases;
✓Invoices should be paid on the last day of the discount period.
✓Buyers should take advantage of early payment discounts.
Good cash management practices involving inventory purchases include taking advantage of early payment discounts, negotiating payment terms with suppliers, purchasing inventory in bulk, tracking your inventory levels closely, and using a cash flow management tool.
Here are the specific practices that you should do:
Take advantage of early payment discounts. This is a great way to save money on inventory purchases. If you can pay your invoices within the discount period, you can usually save 1% to 3% on the purchase price.
Negotiate payment terms with suppliers. You may be able to get better payment terms from your suppliers, such as longer payment periods or discounts for paying early. This can help you improve your cash flow and save money on inventory purchases.
Track your inventory levels closely. This will help you avoid overstocking or understocking inventory. Overstocking can lead to wasted cash while understocking can lead to lost sales.
Use a cash flow management tool. This can help you track your cash flow and identify areas where you can improve. There are many different cash flow management tools available, so you can find one that fits your needs.
By following these good cash management practices, you can improve your cash flow and save money on inventory purchases. This can help you improve your business's bottom line and make it more successful.
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36) All of the following are true of the number of days' sales uncollected ratio except: A) Can be used for comparisons between current and prior periods. B) Reflects the liquidity of receivables. C) Is most effective in evaluating the cash sales of a company. D) Measures how much time is likely to pass before the current amount of accounts receivable is received in cash. E) Can be used for comparisons to other companies in the same industry.
Answer:
C) Is most effective in evaluating the cash sales of a company.
Explanation:
A number of days' sales uncollected ratio can be defined as a liquidity ratio that is typically used by investors and creditors to determine or ascertain the number of days left to obtain all account receivable. Thus, it measures the amount of days left for a debtor to pay a credit.
All of the following are true of the number of days' sales uncollected ratio;
I. Can be used for comparisons between current and prior periods.
II. Reflects the liquidity of receivables.
III. Measures how much time is likely to pass before the current amount of accounts receivable is received in cash.
IV. Can be used for comparisons to other companies in the same industry.
A company produces a product with variable costs of $2.50 per unit. The product sells for $5.00 per unit. The company has fixed costs of $3,000 and desires a target income of $10,000. The sales level in dollars to achieve the desired target income is $ .
Answer:Break-even point (dollars)= $26,000
Explanation:
Answer:
3000 esta es la respuesta
"Dan Druff Shampoo has 1,000,000 shares of common stock authorized with a par of $1 per share, of which 500,000 shares are outstanding. When the market value was $9 per share, Druff issued a stock dividend by which for each ten shares held, one share was issued as a stock dividend. The par per share did not change. What entry did Druff record for this transaction?"
Answer:
Debit : Dividends $50,000
Credit : Cash $50,000
Explanation:
Dividend calculation = 500,000 shares x $1 x 1/10 = $50,000
To record the dividend, the following entry is made :
Debit : Dividends $50,000
Credit : Cash $50,000
On January 1, 2020, Castaway Corp. issued 5,000 shares of preferred stock ($15 par value) at $45 per share. Each share of preferred stock is redeemable at the option of the stockholder at $45 per share. On September 1, 2020, preferred shareholders holding 1,000 shares of preferred stock redeemed their stock.
The entry recorded by Castaway Corp. on September 1, 2020, would include the following:
A. No net change to stockholdersâ equity.
B. A decrease to retained earnings for $5,000.
C. A decrease to assets for $45,000.
D. No net change to preferred stock outstanding.
Answer: C. A decrease to assets for $45,000.
Explanation:
When shareholders redeem their stock, the company pays them for the redeemed stock at a certain price which in this case is $45.
The total cost of redemption is therefore:
= 45 * 1,000
= $45,000
The company uses cash to pay for this which is an asset. Assets will therefore reduce by $45,000 which is the amount of cash paid.
Diz Co. is a U.S.-based MNC with net cash inflows of euros and net cash inflows of Swiss francs. These two currencies are highly correlated in their movements against the dollar. Yanta Co. is a U.S.-based MNC that has the same level of net cash flows in these currencies as Diz Co. except that its euros represent net cash outflows. Yanta Co has a higher exposure to exchange rate risk than Diz Co.
Required:
Which firm has a higher exposure to exchange rate risk? Why?
Answer:
Yanta Co. has a higher exposure to exchange rate risk than Diz Co.
The reason is that Yanta Co. does not have net inflows of euros. Instead, its euro transactions yield net outflows.
It will always be in need of euros to settle its foreign debts or obligations, unlike Diz Co. with foreign assets.
Explanation:
a) Data and Analysis:
Diz Co. has net cash inflows of euros and net cash inflows of swiss francs
Yanta Co. has net cash outflows of euros and net cash inflows of swiss francs
b) Exposure to exchange rate risk or currency risk is the financial risk arising from fluctuations in the value of the US dollars against the Euro or Swiss Francs in which Diz Co. has some foreign assets while Yanta Co. has foreign obligations.
Harvey Hotels has provided a defined benefit pension plan for its employees for several years. At the end of the most recent year, the following information was available with regard to the plan: service cost: $6.4 million, expected return on plan assets: $1.4 million, actual return on plan assets: $1.2 million, interest cost: $1.6 million, payments to retired employees: $2.2 million, and amortization of prior service cost (created when the pension plan was amended causing a drop in the projected benefit obligation): $1.3 million. What amount should Harvey Hotels report as pension expense in its income statement for the year
Answer:
$7.9 million
Explanation:
Calculation to determine What amount should Harvey Hotels report as pension expense in its income statement for the year
Service cost $6.4 million
Interest cost $1.6million
Expected return on plan assets($1.4million)
Amortization of prior service cost $1.3million
Pension expense $7.9million
Therefore The amount that Harvey Hotels Should report as pension expense in its income statement for the year is $7.9million
the path a product takes from product to final user is called what?
Answer:
distribution channel
Explanation:
A marketing channel consists of the people, organizations, and activities necessary to transfer the ownership of goods from the point of production to the point of consumption. It is the way products get to the end-user, the consumer; and is also known as a distribution channel.
A privately owned summer camp for youngsters has the following data for a 12-week session: Charge per camper Fixed costs Variable cost per camper Capacity $480 per week $192,000 per session $320 per week 200campers (a) Develop the mathematical relationships for total cost and total revenue. (b) What is the total number of campers that will allow the camp to just break even
Answer:
Results are below.
Explanation:
Giving the following information:
Fixed costs= $192,000
Unitary variable cost= $320 per week
Selling price per unit= $480 per week
To calculate the total cost, we need to use the following formula:
Total cost= fixed costs + unitary variable cost*number of units
Total cost= 192,000 + 320*number of weeks
Now, the total revenue:
Total revenue= selling price per week*Number of weeks
Total revenue= 480*x
Finally, the break-even point in units:
Break-even point in units= fixed costs/ contribution margin per unit
Break-even point in units= 192,000 / (480 - 320)
Break-even point in units= 1,200 campers
"Coffee Klatch is an espresso stand in a downton office building. The average selling price of a cup of coffee is $1.49 and the avergage variable expense per cup is $0.36. The avergage fixed expense per month is $1,300. How many cups of coffee would have to be sold to attain target profits of $2,500 per month?"
Answer:
3363 cups of coffee
Explanation:
Given that the average selling price of a cup of coffee is $1.49 and the avergage variable expense per cup is $0.36 and average fixed expense per month is $1,300
The target profit is the difference between the total selling price and the total cost.
Let the number of units to be sold to make a target profits of $2,500 be T
The total cost will be
= 0.36T + 1300
The total sales
= 1.49T
Hence
1.49T - 0.36T - 1300 = 2500
1.13T = 2500 + 1300
1.13T = 3800
T = 3800/1.13
= 3362.83
Hence the company must sell about 3363 cups of coffee to make the target profit
If a clothing manufacturer purchased a computerized sewing machine from an American company, then consumer spending and GDP both increase. investment and GDP both increase. consumer spending increases and GDP decreases. investment increases and GDP decreases. consumer spending and investment both increase.
Answer:
Investment and GDP both increase.
Explanation:
GDP(Gross Domestic Product)can be regarded as the overall value of goods/services that is been manufactured arround geographic boundaries of a particular country at a particular period of time ( year). It gives indication of economics performance. Invest can be regarded as item/asste gotten with hope of giving income to the owner. Hence, from the question, If a clothing manufacturer purchased a computerized sewing machine from an American company, then Investment and GDP both increase.
Leslie's Unique Clothing Stores offers a common stock that pays an annual dividend of $3.00 a share. The company has promised to maintain a constant dividend. How much are you willing to pay for one share of this stock if you want to earn a return of 15.80 percent on your equity investments
Answer:
You are willing to pay $18.99 for one share of this stock.
Explanation:
This can be calculated using the following formula:
P = d / r .............................. (1)
Where;
P = price per share = ?
d = annual dividend per share = $3.00
r = equity investments return = 15.80%, or 0.1580
Substituting the values into equation (1), we have:
P = $3.00 / 0.1580
P = $18.99
Therefore, you willing to pay $18.99 for one share of this stock.
Find the sum of the series 2 + 5 + 8 + ... + 182
Answer:
first term(a)=2
common diff.(d)=5-2=3
lqst term(l)=182
sum of terms (sn)=?
Explanation:
we have,
l=a+(n-1)d
182=2+(n-1)×3
182-2=3n-3
180=3n-3
180-3=3n
177=3n
177÷3=n
59=n
n=59
i hope this solve help you
Practice Brief Exercise 02 Swifty Corporation has 44,000 shares of $10 par value common stock outstanding. It declares a 10% stock dividend on December 1 when the market price per share is $19. The dividend shares are issued on December 31. Prepare the entries for the declaration and issuance of the stock dividend.
Answer:
Dec-31
Dr Stock Dividend $83,600
Cr Stock Dividend Distributable $44,000
Cr Paid - in - capital in excess of Par (44,000 * m
Dec-31
Dr Stock Dividend Distributable $44,000
Cr Common stock $44,000
Explanation:
Preparation of the entries for the declaration and issuance of the stock dividend
Dec-31
Stock Dividend $83,600
(44,000* 10% * $19)
Cr Stock Dividend Distributable $44,000
($44,000 *10% *$10)
Cr Paid - in - capital in excess of Par (44,000 * 10% *$9) $39,600
($19+$10=$9)
(Being to record Stock dividend declared)
Dec-31
Dr Stock Dividend Distributable $44,000
Cr Common stock $44,000
(Being to record issuance of the stock dividend)
Orion Iron Corp. tracks the number of units purchased and sold throughout each year but applies its inventory costing method at the end of the year, as if it uses a periodic inventory system. Assume its accounting records provided the following information at the end of the annual accounting period, December 31. Transactions Units Unit Cost a. Inventory, Beginning 350 $ 14 For the year: b. Purchase, April 11 950 12 c. Purchase, June 1 700 15 d. Sale, May 1 (sold for $42 per unit) 350 e. Sale, July 3 (sold for $42 per unit) 610 f. Operating expenses (excluding income tax expense), $18,000 Required: 1. Calculate the number and cost of goods available for sale. 2. Calculate the number of units in ending inventory. 3. Compute the cost of ending inventory and cost of goods sold under (a) FIFO, (b) LIFO, and (c) weighted average cost. 4. Prepare an income statement that shows under the FIFO method, LIFO method and weighted average method. 6. Which inventory costing method minimizes income taxes
Answer:
Part 1.
Number = 2,000 units and Cost = $26,800
Part 2.
1,040 units
Part 3.
a. FIFO
Ending Inventory = $14,580
Cost of Goods Sold = $12,220
b. LIFO
Ending Inventory = $13,180
Cost of Goods Sold = $13,620
c. Weighted Average Cost
Ending Inventory = $13,936
Cost of Goods Sold = $12,864
Part 4.
Orion Iron Corp.
Income Statement
FIFO LIFO Weighted Average
Sales (960 x $42) $40,320 $40,320 $40,320
Less Cost of Sales ($12,220) ($13,620) ($12,864)
Gross Profit $28,100 $26,700 $27,456
Less Expenses
Operating Expenses ($18,000) ($18,000) ($18,000)
Net Income $10,100 $8,700 $9,456
Part 6.
Weighted Average method minimizes Income taxes as it provides lowest profits than the rest of the methods.
Explanation:
Periodic Inventory method ensures that Cost of Sales and Inventory Value are determined at the end of the period.
Cost of Goods Available for Sale = Beginning Inventory + Purchases
therefore,
Number = 350 + 950 + 700 = 2,000 units
Cost = 350 x $14 + 950 x $12 + 700 x $15 = $26,800
Units in Ending Inventory = Units available for sale - Units sold
therefore,
Units in Ending Inventory = 2,000 - ( 350 + 610 ) = 1,040
FIFO
This method assumes that the units to arrive first, will be sold first.
Ending Inventory = 340 x $12 + 700 x $15 = $14,580
Cost of Goods Sold = 350 x $14 + 610 x $12 = $12,220
LIFO
This method assumes that the units to arrive last, will be sold first.
Ending Inventory = 690 x $12 + 350 x $14 = $13,180
Cost of Goods Sold = 700 x $15 + 260 x $12 = $13,620
Weighted Average Cost
This method calculates a new unit cost based on units available for sale after each and every purchase. This unit cost is then used to determine the cost of sales and inventory value.
Unit Cost = Total Cost ÷ Units available for sale
= $26,800 ÷ 2,000 units
= $13.40
Ending Inventory = Units in Inventory x Unit Cost
= 1,040 x $13.40
= $13,936
Cost of Goods Sold = Units Sold x Unit Cost
= 960 x $13.40
= $12,864
A company retires its bonds at 105. The face value is $100,000 and the carrying value of the bonds at the retirement date is $103,745. The issuer's journal entry to record the retirement will include a: Group of answer choices Credit to Premium on Bonds. Credit to Bonds Payable. Debit to Premium on Bonds. Credit to Gain on Bond Retirement. Debit to Discount on Bonds.
Answer: Debit to Premium on Bonds.
Explanation:
Face value of bond = $100000
Carrying value of bond = $103745
The issuer's journal entry to record the retirement will include a Debit to Premium on Bonds which will be in the value of ($103745 - $100000) = $3745.
Consider this data for Marston Manufacturing Company and use it to complete the table:
Selected Financial Data for
Marston Manufacturing Company
Average cash $57,813
Average accounts payable $320,000
Average accounts receivable $1,387,500
Average inventories $693,750
Average cash sales $4,625,000
Average credit sales $13,875,000
Average cost of goods sold $8,325,000
Average number of days per year 365 days
Inventory conversion period 30.42 days
Payables deferral period days
Receivables conversion period
Operating cycle 66.92 days
Cash conversion cycle 52.89 days
Answer and Explanation:
The computation is shown below:
Payable Deferral Period = 365 ÷ Payable turnove ratio
where,
Payables Turnover Ratio = Average Cost of Goods Sold ÷ Average Accounts Payable
= ($8,325,000 ÷ $320,000)
= 26.02
Now payable deferral period is
= 365 ÷ 26.02
= 14.02 days
And, the receivables conversion period is
= 365 ÷ receivable turnover ratio
where
Receivables Turnover Ratio = Average credit sales ÷ Average Accounts receivable
= ($13,875,000 ÷ $1,387,500)
= 10
Now receivable turnover period is
= 365 ÷ 10
= 36.50 days
Waupaca Company establishes a $420 petty cash fund on September 9. On September 30, the fund shows $166 in cash along with receipts for the following expenditures: transportation-in, $53; postage expenses, $70; and miscellaneous expenses, $123. The petty cashier could not account for a $8 shortage in the fund. The company uses the perpetual system in accounting for merchandise inventory.
Prepare:
1) the September 9 entry to establish the fund.
2) the September 30 entry to reimburse the fund.
3) an October 1 entry to increase the fund to $450.
Answer:
Date Account Debit Credit
Sep 9 Petty cash $420
Cash $420
Sep 30 Merchandise inventory $53
Postage expense $70
Miscellaneous expense $123
Cash shortage $8
Cash $254
Oct 1 Petty cash $30
Cash [450-420] $30
Curtiss Construction Company, Inc., entered into a fixed-price contract with Axelrod Associates on July 1, 2021, to construct a four-story office building. At that time, Curtiss estimated that it would take between two and three years to complete the project. The total contract price for construction of the building is $4,660,000. The building was completed on December 31, 2023. Estimated percentage of completion, accumulated contract costs incurred, estimated costs to complete the contract, and accumulated billings to Axelrod under the contract were as follows:
At 12-31-2021 At 12-31-2022 At 12-31-2023
Percentage of completion 10% 60% 100%
Costs incurred to date $370,000 $2,982,000 $5,031,000
Estimated costs to complete 3,330,000 1,988,000 0
Billings to Axelrod, to date 731,000 2,390,000 4,660,000
Required:
a. Compute gross profit or loss to be recognized as a result of this contract for each of the three years.
b. Assuming Curtiss recognizes revenue over time according to percentage of completion, compute gross profit or loss to be recognized in each of the three years.
c. Assuming Curtiss recognizes revenue over time according to percentage of completion, compute the amount to be shown in the balance sheet at the end of 2021 and 2022 as either cost in excess of billings or billings in excess of costs.
Answer:
Explanation:
Curtiss Construction Company, Inc., entered into a fixed-price contract with Axelrod Associates on July 1, 2021, to construct a four-story office building. At that time, Curtiss estimated that it would take between two and three years to complete the project. The total contract price for construction of the building is $4,420,000. Curtiss concludes that the contract does not qualify for revenue recognition over time. The building was completed on December 31, 2023. Estimated percentage of completion, accumulated contract costs incurred, estimated costs to complete the contract, and accumulated billings to Axelrod under the contract were as follows: Percentage of completion Costs incurred to date Estimated costs to complete Billings to Axelrod, to date At 12-31-2021 At 12-31-2022 At 12-31-2023 10% 60% 100% $ 366,000 $2,814,000 $4,747,000 3, 294,000 1,876,000 727,000 2,310,000 4,420,000
Required:
1. Compute gross profit or loss to be recognized as a result of this contract for each of the three years.
2. Assuming Curtiss recognizes revenue over time according to percentage of completion, compute gross profit or loss to be recognized in each of the three years.
3. Assuming Curtiss recognizes revenue over time according to percentage of completion, compute the amount to be shown in the balance sheet at the end of 2021 and 2022 as either cost in excess of billings or billings in excess of costs.
Match the cause for the negatively sloped aggregate demand curve with the correct term.
1. As prices rise, the cost for businesses to finance new equipment increases, causing a drop in quantity demanded of real GDP.
2. The purchasing power of money held in savings accounts falls as prices rise.
3. As prices rise in the United States, foreigners purchase fewer U.S. goods.
OPTIONS:
a. The Aggregate Demand Effect
b. The Wealth Effect
c. The Interest Rate Effect
d. The Export Effect
Answer:
1. C
2. B
3. D
Explanation:
Gross Domestic Products (GDP) is a measure of the total market value of all finished goods and services made within a country during a specific period.
Simply stated, GDP is a measure of the total income of all individuals in an economy and the total expenses incurred on the economy's output of goods and services in a particular country.
Basically, the four (4) major expenditure categories of GDP are consumption (C), investment (I), government purchases (G), and net exports (N).
The various factors that have an effect on the GDP of a country's economy are;
1. The Interest Rate Effect: As prices rise, the cost for businesses to finance new equipment increases, causing a drop in quantity demanded of real GDP.
2. The Wealth Effect: The purchasing power of money held in savings accounts falls as prices rise.
3. The Export Effect: As prices rise in the United States, foreigners purchase fewer U.S. goods.
Hyde Boats purchased machinery on January 1 at a list price of $295,000, with credit terms 3/10, n/30. Payment was made within the discount period. Hyde Boats paid $17,700 sales tax on the machinery, and paid installation charges of $3,900. Hyde Boats also paid $15,900 to pour a concrete base that was necessary to place the machinery in service.
What is the total cost of the new machinery?
A. $332.500
B. $323.650
C. $307.750
D. $319.750
Answer:
Total purchase price= $323,650
Explanation:
Giving the following information:
Purchase price= $295,000
Installation= $3,900
Concrete for installation= $15,900
The total cost of the machine includes the purchase price and all costs required to put it into operation. Taxes are part of the purchase cost.
First, we need to calculate the net cash discount:
Net discount= 295,000 * 0.03= $8,850
Now, the total purchase price:
Total purchase price= (295,000 - 8,850) + 17,700 + 3,900 + 15,900
Total purchase price= $323,650
andy Bank, Inc., makes one model of wooden canoe. and, the information for it follows: Number of canoes produced and sold 450 650 800 Total costs Variable costs $ 63,000 $ 91,000 $ 112,000 Fixed costs $ 187,200 $ 187,200 $ 187,200 Total costs $ 250,200 $ 278,200 $ 299,200 Cost per unit Variable cost per unit $ 140.00 $ 140.00 $ 140.00 Fixed cost per unit 416.00 288.00 234.00 Total cost per unit $ 556.00 $ 428.00 $ 374.00 Sandy Bank sells its canoes for $375 each. Required: 1. Suppose that Sandy Bank raises its selling price to $500 per canoe. Calculate its new break-even point in units and in sales dollars. 2. If Sandy Bank sells 700 canoes, compute its margin of safety in dollars and as a percentage of sales. (Use the new sales price of $500.) 3. Calculate the number of canoes that Sandy Bank must sell at $500 each to generate $110,000 profit.
Answer:
Results are below.
Explanation:
To calculate the break-even point in units and dollars, we need to use the following formulas:
Break-even point in units= fixed costs/ contribution margin per unit
Break-even point in units= 187,200 / (500 - 140)
Break-even point in units= 520
Break-even point (dollars)= fixed costs/ contribution margin ratio
Break-even point (dollars)= 187,200 / (360 / 500)
Break-even point (dollars)= 187,200 / 0.72
Break-even point (dollars)= $260,000
Now, to calculate the margin of safety for 700 units, we need to use the following formulas:
Margin of safety= (current sales level - break-even point)
Margin of safety= (700*500) - 260,000
Margin of safety= $90,000
Margin of safety ratio= (current sales level - break-even point)/current sales level
Margin of safety ratio= 90,000 / 350,000
Margin of safety ratio= 0.2571
Finally, the desired profit is $110,000:
Break-even point in units= (fixed costs + desired profit) / contribution margin per unit
Break-even point in units= (187,200 + 110,000) / 360
Break-even point in units= 826
Who is more likely to object to a proposed 1 percentage point increase in the city sales tax—the owner of a local liquor store or the owner of a local video rental store? Why?
Answer:
The owner of a local liquor store.
Explanation:
Rentals are not taxed in some places.
Lara uses the standard mileage method for determining auto expenses. During 2020, she used her car as follows: 14,400 miles for business, 2,880 miles for personal use, 4,320 miles for a move to a new job, 1,440 miles for charitable purposes, and 720 miles for medical visits. Presuming that all the mileage expenses are allowable (i.e., not subject to percentage limitations), what is Lara's deduction for:
A. Business?B. Chartible?C. Medical?
Answer:
A. $ 7876.8
B. $ 201.6
C. $ 122.4
Explanation:
As per the Internal revenue Service or the IRS, the standard rates of mileage for the year 2020 is :
Automobile -- 54.5
Charity ---- 14
Medical ---- 17
A. Lara's automobile deduction for business is = 14,400 miles x 0.547
= $ 7876.8
B. Lara's expenses for the charitable contribution deduction is
= 1,440 miles x 0.14
= $ 201.6
C. Lara's expenses for her medical deduction is = 720 miles x 0.17
= $ 122.4