Answer:
On the balance sheet, the inventory would appear as:
Inventory $248,000
Explanation:
In the notes to the accounts, the method of determining the cost and the method of valuing the inventory would be disclosed. It is not disclosed on the balance sheet, but on the notes to the accounts.
It would make the balance sheet appear unorganized to include details that should have been included in the notes. The presentation of information is very important in order to ensure that those reading the information understand it. Understanding is not aided by including information that could be displayed elsewhere.
Answer:
$239,350
Explanation:
The inventory would appear in the current assets section, as follows: Inventory-at lower of cost (first-in, first-out method) or net realizable value $239,350
If all you knew about a production system was that total daily output was 400 units and the total labor necessary to produce the 400 units was 350 hours, and the total materials used were 425 units, what kind of productivity measure could you use to compute productivity?
Answer:
partial measure
Explanation:
Based on the information provided it can be said that the kind of productivity measure that can be used would be a partial measure. Partial Productivity measure relates output to a single input unit. For example, capital productivity deals with output per unit of capital while energy productivity relates output per joule of energy used. In this scenario, we would need labor productivity which is output per hour worked.
The following items appear on the balance sheet of a company with a one-year operating cycle. Identify the proper classification of each item as follows: C if it is a current liability, L if it is a long-term liability, or N if it is not a liability.
Item Classification
1. Notes payable (due in 13 to 24 months)
2. Notes payable (due in 6 to 11 months).
3. Notes payable (mature in five years).
4. Current portion of long-term debt.
5. Notes payable (due in 120 days).
6. FUTA taxes payable.
7. Accounts receivable.
8. Sales taxes payable.
9. Salaries payable.
10. Wages payable.
Answer:
1. Notes payable (due in 13 to 24 months) - Long term Liability
This note will be owed for a period of more than 1 year. When this happens the note is said to be Long term.
2. Notes payable (due in 6 to 11 months). - Current Liability
As this note is due in a period less than a year, it is considered a current Liability.
3. Notes payable (mature in five years). - Long term Liability
This is a note that matures in a period more than a year making it a Long term Liability.
4. Current portion of long-term debt. Current Liability.
The current portion is due to be paid within the period so it is short term and hence a Current Liability.
5. Notes payable (due in 120 days). Current Liability.
Due in less than a year.
6. FUTA taxes payable. Current Liability
Taxes are generally considered a short term Liability until they are paid.
7. Accounts receivable. N (Not a Liability)
Accounts Receivable are Assets.
8. Sales taxes payable. Current Liability.
Taxes are generally considered a short term Liability until they are paid.
9. Salaries payable. Current Liability.
These salaries are owed for the period but have not been paid making them Current.
10. Wages payable. Current Liability.
Same as above. They are owed for the period but not yet paid.
The identification of the following items on the balance sheet of the company are:
Item Classification
1. Notes payable (due in 13 to 24 months) L
2. Notes payable (due in 6 to 11 months) C
3. Notes payable (mature in five years) L
4. Current portion of long-term debt C
5. Notes payable (due in 120 days) C
6. FUTA taxes payable C
7. Accounts receivable C
8. Sales taxes payable C
9. Salaries payable C
10. Wages payable C
Current liabilities are the payables that the company must settle within its operating cycle of 12 months. Long-term liabilities are payables settled after the operating cycle, say, from 13 months and above.
Learn more: https://brainly.com/question/24165866
Alsup Consulting sometimes performs services for which it receives payment at the conclusion of the engagement, up to six months after services commence. Alsup recognizes service revenue for financial reporting purposes when the services are performed. For tax purposes, revenue is reported when fees are collected. Service revenue, collections, and pretax accounting income for 2020–2023 are as follows:
Service Revenue Collections Pretax Accounting Income
2015 $560,000 $545,000 $100,000
2016 660,000 665,000 165,000
2017 625,000 600,000 135,000
2018 610,000 635,000 115,000
There are no differences between accounting income and taxable income other than the temporary difference described above. The enacted tax rate for each year is 40%.
Required:
a. Prepare the appropriate journal entry to record Alsup's 2013 income taxes.
b. Prepare the appropriate journal entry to record Alsup's 2014 income taxes.
c. Prepare the appropriate journal entry to record Alsup's 2015 income taxes.
Answer:
Alsup ConsultingIncome Taxesa. Journal Entries for 2015:
Debit Income Tax Expense $40,000
Credit Income Tax Payable $34,000
Credit Deferred Tax Liability $6,000
To record the income tax for the year.
b. Journal Entries for 2016:
Debit Income Tax Expense $66,000
Debit Deferred Tax Asset $2,000
Credit Income Tax Payable $68,000
To record the income tax for the year.
c. Journal Entries for 2017:
Debit Income Tax Expense $54,000
Credit Income Tax Payable $44,000
Credit Deferred Tax Liability $10,000
To record income tax for the year.
d. Journal Entries for 2018:
Debit Income Tax Expense $46,000
Debit Income Tax Payable $56,000
Credit Deferred Tax Asset $10,000
To record income tax for the year.
NB: There is confusion with the years in the question. So, I decided to give the journal entries for the four years.
Explanation:
a) Service Collections Pre-tax Tax Temporary
Revenue Accounting Income Differences
Income
2015 $560,000 $545,000 $100,000 $85,000 ($15,000)
2016 660,000 665,000 165,000 170,000 5,000
2017 625,000 600,000 135,000 110,000 (25,000)
2018 610,000 635,000 115,000 140,000 25,000
b) Accounting Tax Temporary Differences
Income Tax Income Tax Income Deferred Tax
2015 $100,000 $40,000 $85,000 $34,000 ($15,000) ($6,000) L
2016 165,000 66,000 170,000 68,000 5,000 2,000 A
2017 135,000 54,000 110,000 44,000 (25,000) (10,000) L
2018 115,000 46,000 140,000 56,000 25,000 (10,000) A
c) The temporary difference between taxes as per accounting income and taxes as per tax regulation is recorded in the books through Deferred tax asset or deferred tax liability. When accounting income is more than tax income it would imply more taxes need to be paid in future, so a deferred tax liability account is created.
d) Tax Computations: The prevalent tax rate of 40% is multiplied with the pre-tax accounting income, the pre-tax taxable income, and the temporary differences in income respectively to obtain their respective taxes. Ordinarily, the differences in the tax amounts of accounting income and taxable income is deferred tax asset/liability. The deferred tax asset and liability can still be obtained separately as we have done in this case. They give the same results.
The owner’s initial investment consists of $38,600 cash and $45,980 in land. The company’s $18,550 equipment purchase is paid in cash. The accounts payable balance of $9,060 consists of the $3,830 office supplies purchase and $5,230 in employee salaries yet to be paid. The company’s rent, telephone, and miscellaneous expenses are paid in cash. No cash has been collected on the $14,620 consulting fees earned. Using the above information prepare an October 31 statement of cash flows for Ernst Consulting. (Cash outflows should be indicated by a minus sign.)
Missing information:
ERNST CONSULTING
Income Statement
October 31. 202x
Revenues:
Consulting fees earned $15,600
Total revenues $15,600
Expenses:
Salaries expense $7,450
Rent expense $4,070
Telephone expense $810
Miscellaneous expenses $630
Total expenses $12,960
Net income $2,640
Cash dividends $2,530
Answer:
Ernst Consulting
Statement of Cash Flows
October 31, 202x
Cash flows from operating activities:
Cash received from customers $0
Cash paid for:
Rent expense -$4,070
Telephone expense -$810
Miscellaneous expenses -$630
Total cash flow from operating activities -$5,510
Cash flows from investing activities:
Cash paid for equipment -$18,550
Total cash flows from investing activities -$18,550
Cash flows from financing activities:
Cash investment from stockholders $38,600
Cash paid for dividends -$2,530
Total cash flows from financing activities $36,070
Net cash increase $12,010
Cash balance October 1, 202x $0
Cash balance October 31, 202x $12,010
ACNielsen conducts weekly surveys of television viewing throughout the United States. The ACNielsen statistical ratings indicate the size of the viewing audience for each major network television program. Rankings of the television programs and of the viewing audience market shares for each network are published each week.
A. What is the ACNielsen organization attempting to measure?
B. What is the population?
C. Why would a sample be used for this situation?
D. What kinds of decisions or actions are based on the ACNielsen studies?
Answer: The answers are given below
Explanation:
A. What is the ACNielsen organization attempting to measure?
ACNielsen organization attempting to measure the Television Rating Point of the major television network. The TRP helps us to know the programmes that the viewers watch the most.
B. What is the population?
The population will have to be the viewers who watch the programmes and the television networks in the United States.
C. Why would a sample be used for this situation?
Sampling is when few people are selected from a larger population in order to carry out an experiment. In this situation, sampling is required because gathering data from the larger population will be time consuming and costly.
D. What kinds of decisions or actions are based on the ACNielsen studies?
A new strategy can be devised by the television networks of they know the number of people or the particular age group who normally watches the programmes, then they can tune their strategy towards that direction.
. Nestle Co. paid $130,000 for a machine used to mill oats. The annual contribution margin from oat sales is $60,000. The machine could be sold for $80,000. The opportunity cost of producing the oats is ________. Question 20 options: $130,000 $0 $80,000 $20,000 $60,000
Answer:$80,000
Explanation:
Opportunity cost refers to an alternative forgone that is the value one could have received but declined to take the next best alternative according to his or her preference.
Here , Nestle has two choices to make, it can decide to produce oats or sell the machine, but taking the option of producing oats leaves the option of selling the machine at $80,000 as the Opportunity cost.
ABC stock is currently trading at an all-time high price of $150 per share. Your client contacts you about the stock, stating that he believes that the stock is ripe for a sell off after its next quarterly news announcement. He has $10,000 to use for a trade, but does not want to lose more than this amount. The BEST recommendation to the client is to:
Answer:
Buy ABC Puts
Explanation:
Based on the information provided within the question it can be said that the best recommendation to the client is to Buy ABC Puts. This is mainly due to the fact that the client specifically stated that he does not want to lose more than this investment. Therefore Puts are the best option since they are purchased as a speculation on a market price decline, and the customer can only lose the premium paid if the market does the opposite and ends up rising. While other options like shorting or selling can lead to unlimited loss potential.
The effect of a transaction between two individuals on a third party who has not consented to or played any role in the carrying out of that transaction. This is called an ______________.
Answer:
Externality
Explanation:
An externality is a loss or benefit generated by a producer not caused or earned directly by the producer. An externality may be positive or negative , and may result whether from the production or consumption of a product or service
Therefore in the given situation, it is mentioned that the two transaction effect between the person with respect to the third party that is not agreed for the transaction i.e to carrying out So this situation describes externality
The next dividend payment by Savitz, Inc., will be $1.68 per share. The dividends are anticipated to maintain a growth rate of 6 percent forever. If the stock currently sells for $32 per share, what is the required return
Answer:
The answer is 11.25%
Explanation:
Solution
Given that:
The next step to take is to calculate the required rate of return which is shown below:
The required rate = D₁/P₀₀ + g
Thus,
$1.68/$32 + 0.06%
=0.0525 + 0.06
=0.1125 or 11.25%
Therefore, the required rate of return is 11.25%
Bob wants to help his daughter, Violet, upgrade her home. Bob buys a new refrigerator and oven for Violet on credit from a home supply store. He instructs the home supply store to deliver the new appliances to Violet's home for installation. Which of the following is true with regard to this scenario?
a. Bob's promise to pay the home supply store must be in writing.
b. Bob's promise to pay the home supply store can be oral.
c. Bob's liability to the home supply store is quasi-contractual in nature.
d. Bob's promise to pay the home supply store is void.
Answer:
A
Explanation:
must be in writing
hope it helps
Five years ago you took out a 30-year mortgage with an APR of 6.5% for $200,000. If you were to refinance the mortgage today for 20 years at an APR of 4.25%, how much would your monthly payment change by?
Answer:
-$104.79
Explanation:
Current Mortgage Payment:
P/Y = 12,
N = 360,
I/Y = 6.5,
PV = $200,000,
Solve
for PMT = $1,264.14
Current Mortgage Balance:
P/Y = 12,
N = 300,
I/Y = 6.5,
PMT = $1,264.14,
Solve
for PV = $187,221.9
New Mortgage Payment:
P/Y = 12,
N = 240,
I/Y = 4.25,
PV = $187,222.54,
Solve
for PMT = $1,159.35
Current Payment - New Payment
= $1,159.35- $1,264.14
= -$104.79
Remsco has taxable income of $64,000 and a charitable contribution limit modified taxable income of $74,000. Its charitable contributions for the year were $7,660. What is Remsco's current-year charitable contribution deduction and contribution carryover
Answer: $7400 ; $260
Explanation:
From the question, we are given the information that Remsco has taxable income of $64,000 and a charitable contribution limit modified taxable income of $74,000 and that its charitable contributions for the year were $7,660.
It should be noted that the charitable contribution is 10% of $74,000 which is the charitable contribution limit modified taxable income given in the question. So, this will be:
= 10% of $74,000
= 10/100 × $74,000
= 0.1 × $74,000
= $7400
Therefore, Remsco's current-year charitable contribution deduction is $7400.
Remsco's contribution carryover will be the difference between his charitable contributions for the year which is $7,660 and his current-year charitable contribution deduction is $7400. This will be:
= $7660 - $7400
= $260
OTR Trucking Company runs a fleet of long-haul trucks and has recently expanded into the Midwest, where it has decided to build a maintenance facility. This project will require an initial cash outlay of $ 21.5 million and will generate annual cash inflows of $4.4 million per year for Years 1 through 3. In Year 4, the project will provide a net negative cash flow of $5.4 million due to anticipated expansion of and repairs to the facility. During Years 5 through 10, the project will provide cash inflows of $ 2.3 million per year.a. Calculate the project's NPV and IRR where the discount rate is 11 percent. Is the project a worthwhile investment based on these two measures? Why or why not? b. Calculate the project's MIRR. Is the project a worthwhile investment based on this measure? Why or why not? a. The project's NPV where the discount rate is 11% is $____ million. (Round to two decimal places.)
Answer:
year cash flows
0 -$21,500,000
1 $4,400,000
2 $4,400,000
3 $4,400,000
4 -$5,400,000
5 $2,300,000
6 $2,300,000
7 $2,300,000
8 $2,300,000
9 $2,300,000
10 $2,300,000
I used an excel spreadsheet to calculate the project's NPV, IRR and MIRR.
a. Calculate the project's NPV and IRR where the discount rate is 11 percent. Is the project a worthwhile investment based on these two measures? Why or why not?
NPV = -$7,895,194IRR = 0.09%Since the NPV is negative, the company should not invest in this project.b. Calculate the project's MIRR. Is the project a worthwhile investment based on this measure? Why or why not?
Since we are not given any financing rate nor WACC, we must assume that the company's discount rate is equal to its financing rate and WACC:
MIRR = 6.88%Since the MIRR is too low (lower than the company's WACC), the company should not invest in this project.When you calculate MIRR, you must assume that the company will invest the cash inflows at their normal WACC while the outflows are financed at a different rate.
For much of the 1990s, the U.S. economy was experiencing long-run economic growth, low unemployment, and a stable inflation rate. Which of the following would give rise to these outcomes?
Choose one:
A. an increase in aggregate demand and short-run aggregate supply
B. a decrease in aggregate demand and short-run aggregate supply
C. a decrease in aggregate demand and an increase in short-run aggregate supply
D. an increase in aggregate demand and a decrease in short-run ag
Answer: A. an increase in aggregate demand and short-run aggregate supply.
Explanation:
An increase in Aggregate Demand is synonymous with an increase in Economic growth as it meant that companies would try to produce more goods and services to match this demand thereby increasing the production capacity of the Economy . In order to do so however, they needed to hire more people and so the unemployment rate decreased. As more people were employed, more people were able to earn an income and then demand more goods and services which led to a sort of Economic growth cycle.
As demand for goods kept rising, so did the cost of those goods as posited by the Law of Demand and this was what led to the stable rate of inflation.
Crane Company incurs these expenditures in purchasing a truck: cash price $23,030, accident insurance (during use) $1,690, sales taxes $1,380, motor vehicle license $670, and painting and lettering $2,140. What is the cost of the truck
Answer:
$27,220
Explanation:
Cost of the truck includes : Cash price + sales tax + motor vehicle license + painting and lettering
accident insurance would not be added because its a revenue expenditure as it will reoccur after a year.
$23,030 + $670 + $2,140 + $1,380 = $27,220
I hope my answer helps you
Answer:
$27,220
Explanation:
From the question above Crane company incurs the following expenditures in purchasing a truck
Cash price = $23,030
Accident insurance during use= $1,690
Sales tax= $1,380
Motor vehicle license= $670
Painting and lettering= $2,140
Therefore, the cost of the truck can be calculated as follows
= $23,030+$1,380+$670+$2,140
= $27,220
The accident insurance is not added to find the cost of the truck because it doesn't add any value and can happen again the following year.
Hence the cost of the truck is $27,220
Justin Co. recently purchased materials from a new supplier at a very attractive price. The materials were found to be of poor quality, and the company's laborers struggled significantly as they shaped the materials into finished product. In a desperation move to make up for some of the time lost, the manufacturing supervisor brought in more-senior employees from another part of the plant. Which of the following variances would have a high probability of arising from this situation?
a. Both Material Price variance, favorable and Labor rate variance, favorable
b. Material price variance, unfavorable.
c .Labor rate variance, unfavorable.
d. Material quantity variance, favorable.
e. Labor efficiency variance, favorable.
Answer:
C
Explanation:
more labor expense bringing in extras workers. Drives down the profits.
There are many distinct characteristics that classify a market as Perfectly Competitive including: Very large number of firms Homogenous products Entry and exit into the market free of barriers Perfect Information Individual firms are price takers Long run economic profits will be zero Instructions Given these characteristics of a perfectly competitive market, select one of the characteristics listed. In your post: Fully explain what that characteristic means and what its importance is to classifying a market as perfectly competitive. If you have noticed this characteristic in a certain market, explain where you have seen it before or provide your own example. Would you see the characteristic you are discussing in any of the other three market structures - monopolistic competition, oligopoly or monopoly
Answer:
Characteristics of a Perfectly Competitive Market
One of the characteristics is the presence of many firms:
In a perfectly competitive market or industry, there is a large number of small firms producing homogeneous, identical, and unbranded products. As they are small in comparison to the overall market size, no single firm is able to exert market control over the price or quantity at which the firms sell to the buyers. In such a market, all the characteristics of a perfectly competitive market are present. Buyers and sellers have perfect knowledge of the product, prices, quantity, information, and technology. Under this scenario, if one firm doubles its production or stops production entirely in order to influence the market indexes, the market remains unaffected. With this, the price remains constant. There is no scarcity or surplus. The demand curve is always in equilibrium. There is no elasticity of price, since there is no change in the price of the product. Unfortunately, there is no market that is perfectly competitive. It is only an ideal situation. A close resemblance to this market is in the market for salt, because of the relatively cheap prices of salt. But, many firms have branded their products so differently that consumers make choices, but firms have not been able to influence the market. Unfortunately, this characteristic of perfectly competitive market is not present in the other three markets: monopolistic competition, oligopoly, or monopoly given their own basic characteristics.
Explanation:
A perfectly competitive market or industry has large number of small firms, with no exit or entry barriers. There is perfect knowledge of the market so that buyers and sellers have equal access to information. The goods in such a market is so identical that firms do not brand their goods to look different from others. As earlier mentioned, this type of market exists in the ideal world. Other market types are monopolistic competition, oligopoly, and monopoly. There are practical examples of the existence of such markets in the world.
To illustrate the law of large numbers (see also Exercise 5.54 on page 172), use the normal approximation to the binomial distribution to determine the probabilities that the proportion of heads will be anywhere from 0.49 to 0.51 when a balanced coin is flipped
(a) 100 times;
(b) 1,000 times;
(c) 10,000 times.
Answer:
(a) 0.1585
(b) 0.4713
(c) 0.9545
Explanation:
The random variable X can be defined as the number of heads.
The coin provided is balanced, i.e. P (H) = P (T) = 0.50
The outcome of tossing the coin are: (H and T). Each of these outcomes are independent of each other.
The random variable X thus follows a Binomial distribution with probability of success as 0.50.
For a large sample a Normal approximation to binomial can be applied to approximate the distribution of p if the following conditions are satisfied:
1. np ≥ 10
2. n(1 - p) ≥ 10
(a)
n = 100
Check the conditions as follows:
[tex]np=100\times 0.50=50>10\\\\n(1-p)=100\times(1-0.50)=50>10[/tex]
Thus, a Normal approximation to binomial can be applied.
So, [tex]p\sim N(0.50,\ 0.05 )[/tex]
Compute the probability hat the proportion of heads will be anywhere from 0.49 to 0.51 as follows:
[tex]P(0.49<p<0.51)=P(\frac{0.49-0.50}{0.05}<\frac{p-\mu}{\sigma}<\frac{0.51-0.50}{0.05})[/tex]
[tex]=P(-0.20<Z<0.20)\\\\=P(Z<0.20)-P(Z<-0.20)\\\\=0.57926-0.42074\\\\=0.15852\\\\\approx 0.1585[/tex]
Thus, the probability hat the proportion of heads will be anywhere from 0.49 to 0.51 when a balanced coin is flipped 100 times is 0.1585.
(b)
n = 1000
Check the conditions as follows:
[tex]np=1000\times 0.50=500>10\\\\n(1-p)=1000\times(1-0.50)=500>10[/tex]
Thus, a Normal approximation to binomial can be applied.
So, [tex]p\sim N(0.50,\ 0.016 )[/tex]
Compute the probability hat the proportion of heads will be anywhere from 0.49 to 0.51 as follows:
[tex]P(0.49<p<0.51)=P(\frac{0.49-0.50}{0.016}<\frac{p-\mu}{\sigma}<\frac{0.51-0.50}{0.016})[/tex]
[tex]=P(-0.63<Z<0.63)\\\\=P(Z<0.63)-P(Z<-0.63)\\\\=0.73565-0.26435\\\\=0.4713[/tex]
Thus, the probability hat the proportion of heads will be anywhere from 0.49 to 0.51 when a balanced coin is flipped 1000 times is 0.4713.
(c)
n = 10,000
Check the conditions as follows:
[tex]np=10000\times 0.50=5000>10\\\\n(1-p)=10000\times(1-0.50)=5000>10[/tex]
Thus, a Normal approximation to binomial can be applied.
So, [tex]p\sim N(0.50,\ 0.005)[/tex]
Compute the probability hat the proportion of heads will be anywhere from 0.49 to 0.51 as follows:
[tex]P(0.49<p<0.51)=P(\frac{0.49-0.50}{0.005}<\frac{p-\mu}{\sigma}<\frac{0.51-0.50}{0.005})[/tex]
[tex]=P(-2<Z<2)\\\\=P(Z<2)-P(Z<-2)\\\\=0.97725-0.02275\\\\=0.9545[/tex]
Thus, the probability hat the proportion of heads will be anywhere from 0.49 to 0.51 when a balanced coin is flipped 10,000 times is 0.9545.
which is extraordinarily large inflation in prices. At the peak of the hyperinflation, prices rose 26 comma 000% per month. At this rate, by what percentage would prices have risen in 1 year? In 1 day? (Assume 30 days per month.) g
Answer:
To identify inflation rates in a monthly hyperinflationary process of 26,000 percent inflation, we must multiply that number by 12 months to obtain annual inflation, and divide it by 30 to obtain daily inflation.
Thus, the annual inflation of the country arises from calculating 26,000 x 12, which results in an annual inflation of 312,000 percent, with which a product that at the beginning of the year would cost $ 1 would cost $ 312,000 a year later.
In turn, to identify daily inflation, you have to divide 26,000 / 30, obtaining a daily inflation of 866.6 percent, which implies that a product with a value of $ 1, a day later would be costing $ 866.6.
ldentify whether each statement in the following statement is true or false.
a. Businesses that do not adopt a differentiation, low-cost leadership, or focus strategy tend to be more successful than businesses that do adopt these strategies.
b. Employee abilities to create innovative products are critical for companies that adopt a low-cost leadership strategy.
c. Companies that use a focus strategy have narrow buyer groups.
Answer:
The answer is (a) False (b) False (c) True
Explanation:
Solution
(a)Businesses that do not acquire a differentiation,focus strategy, or low-cost leadership, is liable to be more successful than businesses that do adopt these strategies - False because Companies or business does not necessarily need to adopt differentiation methods or low cost leadership, they might have their own market strategy to succeed.
(b) Employee abilities to develop innovative products are important for companies that use a low-cost leadership strategy - False .
(c) Companies that use a focus strategy have narrow buyer groups -Focus strategy : This strategy is used when a company knows its segment and has products that can competitively satisfies its needs.In this case it is true.
Revenue and expense data for the current calendar year for Tannenhill Company and for the electronics industry are as follows. The Tannenhill Company data are expressed in dollars. The electronics industry averages are expressed in percentages.
1 Tannenhill Company Electronics Industry Average
2 Sales $4,000,000 100%
3 Cost of goods sold $2,120,000 60%
4 Gross profit $1,888,000 40%
5 Selling expenses $1,080,000 24%
6 Administrative expenses $640,000 14%
7 Total operating expenses $1,720,000 38%
8 Income from operations $160,000 2%
9 Other income $120,000 3%
10 $280,000 5%
11 Other expense $80,000 2%
12 Income before income tax $200,000 3%
13 Income tax expense $80,000 2%
14 Net income $120,000 1%
A. Prepare a common-size income statement comparing the results of operations for Tannenhill Company with the industry average. Enter all amounts as positive numbers.
B. As far as the data permit, comment on significant relationships revealed by the comparisons. As far as the data permit, comment on significant relationships revealed by the comparisons.
Answer:
Explanation:
Tannenhill % Industry
Sales 4,000,000 100 100
Cost of goods 2,120,000 53 60
Gross profit 1,880,000 47 40
Selling Expenses 1,080,000 27 24
Admin Expenses 640,000 16 14
Operating Expenses 1,720,000 43 38
Operating profit 160,000 4 2
Other income 120,000 3 3
Total income 280,000 7 5
Other Expenses 80,000 2 2
Income before tax 200,000 5 3
Income tax 80,000 2 2
Net Income 120,000 3 1
B)
Despite the fact that the selling and admin expenses pf Tannenhill was higher than the industry average , it had a better performance in the cost of goods management which in effect caused Tannenhill to record a greater net income percentage compared to the industry performance.
The other income and expenses was the same with the industry average , hence no impact on the overall performance.
Pronghorn Corp has 3,200 shares of 8%, $103 par value preferred stock outstanding at December 31, 2017. At December 31, 2017, the company declared a $123,000 cash dividend. Determine the dividend paid to preferred stockholders and common stockholders under each of the following scenarios. 1. The preferred stock is noncumulative, and the company has not missed any dividends in previous years. The dividend paid to preferred stockholders $ The dividend paid to common stockholders $ 2. The preferred stock is noncumulative, and the company did not pay a dividend in each of the two previous years. The dividend paid to preferred stockholders $ The dividend paid to common stockholders $ 3. The preferred stock is cumulative, and the company did not pay a dividend in each of the two previous years. The dividend paid to preferred stockholders $ The dividend paid to common stockholders
Answer:
1) The dividend paid to preferred stockholders is $26,368
The dividend paid to Common stockholders is $96,632
2) The dividend paid to preferred stockholders is $26,368
The dividend paid to Common stockholders is $96,632
3) The dividend paid to preferred stockholders is $79,104
The dividend paid to Common stockholders is $43,896
Explanation:
1) The preferred stock is non-cumulative & the company has not missed any dividend in previous years
The dividend paid to preferred stockholders = 3,200 shares × $103 × 8 % = $26,368
The dividend paid to Common stockholders = $123,000 - $26,368 = $96,632
2) The preferred stock is non cumulative & the company did not pay dividend in each of the previous 2 years.
The dividend paid to preferred stockholders = 3,200 shares × $103 × 8 % = $26,368
The dividend paid to Common stockholders = $123,000 - $26,368 = $96,632
3) The preferred stock is cumulative & the company did not pay dividend in each of the previous 2 years.
The dividend paid to preferred stockholders = 3,200 shares × $103 × 8% × 3 years = $79,104
The dividend paid to Common stockholders = $132,000 - $86,400 = $43,896
After examining a planning gap, firms typically attempt to decide if the time horizon should be increased or decreased. perform a SWOT analysis with their major competitor as the focus. use statistical trend analysis to interpret the results. exploit a positive deviation and correct a negative deviation. adopt a product-market focus.
Answer: exploit a positive deviation and correct a negative deviation
Explanation:
A planning gap is the difference that occurs in revenue or profits gap when current strategies are not changed. The gap analysis can help in the identification of gaps in the market. Therefore, when an organization compares its forecast profits to the company's desired profits, the planning gap will be shown.
When the actual results are lesser than the planned result, the organization would have to fill the gap with a marketing program which has been revised and sometime with new goals. Therefore, the firm can then decide whether to exploit wither a positive deviation and correct a negative deviation.
An all-equity firm is considering the following projects:
Project Beta IRR
W .62 9.2 %
X .77 10.3
Y 1.27 14.1
Z 1.42 17.0
The T-bill rate is 5 percent, and the expected return on the market is 12 percent.
A. Compared with the firm's 12 percent cost of capital, Project W has a_______expected return.
a. lower
b. higher
1. Project X has a______expected return.
a. higher
b. lower
2. Project Y has a_______expected return
a. lower
b. higher
3. Project Z has a______expected return.
a. higher
b. lower
B. Project W should be_______.
a. accepted
b. rejected
1. Project X should be______.
a. accepted
b. rejected
2. Project Y should be_______.
a. accepted
b. rejected
3. Project Z should be_______.
a. accepted
b. rejected
c. If the firm's overall cost of capital were used as a hurdle rate, Project W would be_______.
a. correctly accepted
b. incorrectly rejected
c. correctly rejected
d. incorrectly accepted
1. Project X would be______.
a. correctly accepted
b. incorrectly accepted
c. correctly rejected
d. incorrectly rejected
2. Project Y would be_______.
a. correctly rejectedin
b. correctly accepted
c. incorrectly rejected
d. correctly accepted
3. Project Z would be________.
a. incorrectly accepted
b. correctly rejected
c. incorrectly rejected
d. correctly accepted.
Answer:
A. Compared with the firm's 12 percent cost of capital, Project W has a_______expected return.
a. lower1. Project X has a______expected return.
b. lower2. Project Y has a_______expected return
b. higher3. Project Z has a______expected return.
a. higherB. Project W should be_______.
b. rejected1. Project X should be______.
b. rejected2. Project Y should be_______.
a. accepted3. Project Z should be_______.
a. acceptedc. If the firm's overall cost of capital were used as a hurdle rate, Project W would be_______.
c. correctly rejected1. Project X would be______.
c. correctly rejected2. Project Y would be_______.
b. correctly accepted3. Project Z would be________.
b. correctly rejectedExplanation:
Project Beta IRR expected return
W .62 9.2% = 5% + (0.62 x 7%) = 9.34%
X .77 10.3 % = 5% + (0.77 x 7%) = 10.39%
Y 1.27 14.1 % = 5% + (1.27 x 7%) = 13.89%
Z 1.42 17.0% = 5% + (1.42 x 7%) = 14.94%
A. Compared with the firm's 12 percent cost of capital, Project W has a expected lower return 1 is lower, 2 is higher, 3 is higher. B. Project W should be rejected, 1 is rejected, 2 is accepted and 3 is accepted. C. Project W would be correctly rejected, 1 is correctly rejected, 2 is correctly accepted and 3 is correctly rejected. The correct options are A is a, 1 is b, 2 is b, 3 is a, B is b, 1 is b, 2 is a, 3 is a and C is c, 1 is c, 2 is b and 3 is b.
The cost of capital is a company's computation of the minimal return required to justify embarking on a capital budgeting project, like building a new plant.
Analysts and investors use the term cost of capital interchangeably, but it always refers to whether the expense of a proposed choice can be justified. Investors may also use the phrase to describe an assessment of an investment's prospective return in proportion to its cost and hazards.
Learn more about capital, here:
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Which of the following is useful to combine the data of different segments using different software for the purpose of creating companywide budgets? A. budget creation manual B. budget management software C. financial analysis software D. accounting development manual
Answer:
B. budget management software
Explanation:
A budget management software would be the best option to combine different segments of data to create a companywide budget.
This is because one of the specific purposes of budget management software is to merge several budgets (for example, the budgets of a company's divisions) into a single one, larger budget (the companywide budget).
Green Company is planning to introduce a new product with a 75 percent incremental unit-time learning curve for production in batches of 1,500 units. The variable labor costs are $55 per unit for the first 1,500-unit batch. Each batch requires 200 hours. There are $15,000 in fixed costs not subject to learning. What is the cumulative total time (labor hours) to produce 3,000 units
Answer:
210 hours
Explanation:
The learning curve rate can be found by log75%
Ln0.75 = 0.12249
1 batch requires 200 hours
The 1500 units batch will require 200 hours
For 3000 units there will be two batches of 1500 units each
200 hours * 2 batches * 0.12249 * 4.5 = 210 hours
At December 31, Amy Jo's Appliances had account balances in Accounts Receivable of $302,000 and in Allowance for Uncollectible Accounts of $640 (credit) before any adjustments. An analysis of Amy Jo's December 31 accounts receivable suggests that the allowance for uncollectible accounts should be 5% of accounts receivable. Bad debt expense for the year should be:
Answer:
$870
Explanation:
When a company makes sales on account, debit accounts receivable and credit sales. Based on assessment, some or all of the receivables may be uncollectible.
To account for this, debit bad debit expense and credit allowance for doubtful debt. Should the debt become uncollectible (i.e go bad), debit allowance for doubtful debt and credit accounts receivable.
Allowance for uncollectible accounts at 5%
= 5% * $302,000
= $1,510
Since the Allowance for Uncollectible Accounts was $640 (credit) before any adjustments, the bad debt expense for the year
= $1,510 - $640
= $870
Blythe and Cali do business as Diamond Investments. In acting on the firm's behalf,Blythe makes an honest error in overestimating the value of a particular stock purchase. To her firm,Blythe is:__________.
A) liable for breach of the duty of care.
B) liable for breach of the duty of accounting.
C) liable for breach of the duty of accounting.
D) not liable.
Answer:
D) not liable.
Explanation:
Duty of Care is the legal expectation from individuals and businesses in the course of discharging their duties, not to engage in conduct that could be foreseen to predispose others to danger or harm. The Duty of Accounting or accounting responsibility requires an accurate record of transactions. Liability implies being legally answerable. In business transactions, businessmen owe it to their customers to provide their services and products in the best possible way so as to prevent causing harm to them. Employees also owe it to the organization they work for to discharge their duties carefully to avoid causing them loss.
Blythe's honest error in overestimating the value of a particular stock purchase is a mistake that anyone can make and can be easily corrected. Her company would not go the long route of taking her to court over such a mistake. Therefore, Blythe is not liable to her company.
An important application of regression analysis in accounting is in the estimation of cost. By collecting data on volume and cost and using the least squares method to develop an estimated regression equation relating volume and cost, an accountant can estimate the cost associated with a particular manufacturing volume. In the Microsoft Excel Online file below you will find a sample of production volumes and total cost data for a manufacturing operation. Conduct a regression analysis to explore the relationship between total cost and production volume and then answer the questions that follow.Production Volume Total Cost
(Units) ($)
400 4,000
450 5,000
550 5,400
600 5,900
700 6,400
750 7,000
1. Use the data to develop an estimated regression equation that could be used to predict the total cost for a given production volume.
2. What is the variable cost per unit produced
3. Compute the coefficient of determination what percentage of the variation in total cost can be explained by production volume
4. The companys production schedule shows 500 units must be produced next month what is the estimated total cost of this operation.
Answer:
(1) [tex]\text{Total Cost}=1246.67+7.60\ \text{Volume}[/tex]
(2) The variable cost per unit produced is $7.60.
(3) The coefficient of determination is 0.96 or 96%.
(4) The estimated total cost is $5,046.67.
Explanation:
A regression analysis for the provided data is performed on Microsoft Excel.
The output is attached below.
(1)
The estimated regression equation that could be used to predict the total cost for a given production volume is:
[tex]\text{Total Cost}=1246.67+7.60\ \text{Volume}[/tex]
(2)
The variable cost per unit produced is given by the slope of the line.
The slope of a regression line represent the value of the dependent variable for one unit of the independent variable.
So, the variable cost per unit produced is $7.60.
(3)
Consider the regression output attached.
The coefficient of determination is 0.96 or 96%.
This implies that the percentage of the variation in total cost that can be explained by production volume is 96%.
(4)
For Volume = 500 units predict the total cost as follows:
[tex]\text{Total Cost}=1246.67+7.60\ \text{Volume}[/tex]
[tex]=1246.67+(7.60\times 500)\\\\=1246.67+3800\\\\=5046.67[/tex]
Thus, the estimated total cost is $5,046.67.
company is considering the purchase of a new piece of equipment for $90,000. Predicted annual net cash inflows from the investment are $36,000 (Year 1), $30,000 (Year 2), $18,000 (Year 3), $12,000 (Year 4), and $6,000 (Year 5). The average operating income generated from the investment over its 5-year life is $20,400. The cash payback period is 3.5 years true false
Answer:
The cash payback period is 3.5 years. The answer is True.
Explanation:
According to the given data we have the following:
Year Cash flows Cumulative Cash flows
0 (90,000) (90,000)
1 36,000 (54,000)
2 30,000 (24,000)
3 18,000 (6000)
4 12000 6000
5 6000 12,000
To calculate the cash payback period we use the following formula:
Payback period=Last period with a negative cumulative cash flow+(Absolute value of cumulative cash flows at that period/Cash flow after that period).
Payback period=3+($6,000/$12,000)
Payback period=3.5 years
The cash payback period is 3.5 years. True