Answer:
$470,000
Explanation:
Calculation to determine the total amount of avoidable cost
Salaries for Barbecue Division workers $128,000
Add Direct material $342,000
Avoidable Cost $470,000
($128,000+$342,000)
Therefore the total amount of avoidable cost will be $470,000
elisa Corporation has two divisions: Division L and Division Q. Data from the most recent month appear below: Total Company Division L Division Q Sales $528,000 $142,000 $386,000 Variable expenses 319,460 72,420 247,040 Contribution margin 208,540 69,580 138,960 Traceable fixed expenses 109,920 29,400 80,520 Segment margin 98,620 $ 40,180 $ 58,440 Common fixed expenses 55,370 Net operating income $ 43,250 The break-even in sales dollars for Division Q is closest to:
Answer:
the break even point in sales dollars is $223,667
Explanation:
The computation of the break even point in sales dollars is shown below:
= Fixed cost ÷ contribution margin ratio
= $80,520 ÷ ($138,960 ÷ $386,000)
= $80,520 ÷ 36%
= $223,667
Hence, the break even point in sales dollars is $223,667
You are interested in valuing a 2-year semi-annual corporate coupon bond using spot rates but there are no liquid strips available. However, you do find the following 4 comparable semi-annual bonds (below) maturing over the next 2 years. Using the bootstrap approach, calculate the 12-month spot rate.
Time remaining to maturity Coupon Bond price
6 months 0.000% 99.000
1 year 1.250% 98.000
18 months 1.500% 97.000
2 years 1.250% 96.000
a. 1.668%
b. 3.335%
c. 4.167%
d. 4.189%
e. 4.204%
Answer:
Following are the solution to this question:
Explanation:
Assume that [tex]r_1[/tex] will be a 12-month for the spot rate:
[tex]\to 1.25 \% \times \frac{100}{2} \times 0.99 + \frac{(1.25\% \times \frac{100}{2}+100)}{(1+\frac{r_1}{2})^2}=98\\\\\to \frac{1.25}{100} \times \frac{100}{2} \times 0.99 + \frac{(\frac{1.25}{100} \times \frac{100}{2}+100)}{(1+\frac{r_1}{2})^2}=98\\\\\to \frac{1.25}{2} \times 0.99 + \frac{(\frac{1.25}{2} +100)}{(1+\frac{r_1}{2})^2}=98\\\\\to 0.61875 + \frac{( 0.625 +100)}{(\frac{2+r_1}{2})^2}=98\\\\\to 0.61875 + \frac{( 100.625)}{(\frac{2+r_1}{2})^2}=98\\\\\to 0.61875 + \frac{402.5}{(2+r_1)^2}=98\\\\[/tex]
[tex]\to 0.61875 + \frac{402.5}{(2+r_1)^2}=98\\\\\to 0.61875 -98 = \frac{402.5}{(2+r_1)^2}\\\\\to -97.38125= \frac{402.5}{(2+r_1)^2}\\\\\to (2+r_1)^2= \frac{402.5}{ -97.38125}\\\\\to (2+r_1)^2= -4.13\\\\ \to r_1=3.304\%[/tex]
Assume that [tex]r_2[/tex] will be a 18-month for the spot rate:
[tex]\to 1.5\% \times \frac{100}{2} \times 0.99+1.5\% \times \frac{100}{2} \times \frac{1}{(1+ \frac{3.300\%}{2})^2}+\frac{(1.5\% \times \frac{100}{2}+100)}{(1+\frac{r_2}{2})^3}=97\\\\\to \frac{1.5}{100} \times \frac{100}{2} \times 0.99+\frac{1.5}{100} \times \frac{100}{2} \times \frac{1}{(1+ \frac{\frac{3.300}{100}}{2})^2}+\frac{(\frac{1.5}{100} \times \frac{100}{2}+100)}{(1+\frac{r_2}{2})^3}=97\\\\[/tex]
[tex]\to \frac{1.5}{2} \times 0.99+\frac{1.5}{2}\times \frac{1}{(1+ \frac{\frac{3.300}{100}}{2})^2}+\frac{(\frac{1.5}{2} +100)}{(1+\frac{r_2}{2})^3}=97\\\\\to 0.7425+0.75 \times \frac{1}{(1+ \frac{\frac{3.300}{100}}{2})^2}+\frac{(0.75 +100)}{(1+\frac{r_2}{2})^3}=97\\\\\to 1.4925 \times \frac{1}{(1+0.0165)^2}+\frac{(100.75 )}{(1+\frac{r_2}{2})^3}=97\\\\\to 1.4925 \times \frac{1}{(1.033)}+\frac{(100.75 )}{(1+\frac{r_2}{2})^3}=97\\\\[/tex]
[tex]\to 1.4925 \times 0.96+\frac{(100.75 )}{(1+\frac{r_2}{2})^3}=97\\\\\to 1.4328+\frac{(100.75 )}{(1+\frac{r_2}{2})^3}=97\\\\\to 1.4328-97= \frac{(100.75 )}{(1+\frac{r_2}{2})^3}\\\\\to -95.5672= \frac{(100.75 )}{(1+\frac{r_2}{2})^3}\\\\\to (1+\frac{r_2}{2})^3= -1.054\\\\\to r_2=3.577\%[/tex]
Assume that [tex]r_3[/tex] will be a 18-month for the spot rate:
[tex]\to 1.25\% \times \frac{100}{2} \times 0.99+1.25\% \times \frac{100}{2} \times \frac{1}{(1+\frac{3.300\%}{2})^2}+1.25\%\times\frac{100}{2} \times \frac{1}{(1+\frac{3.577\%}{2})^3}+(1.25\% \times \frac{\frac{100}{2}+100}{(1+\frac{r_3}{2})^4})=96\\\\[/tex]
to solve this we get [tex]r_3=3.335\%[/tex]
makes a product with the following standards for direct labor and variable overhead: Standard Quantity or Hours Standard Price or Rate Standard Cost Per Unit Direct labor 0.20 hours $ 26.00 per hour $ 5.20 Variable overhead 0.20 hours $ 6.20 per hour $ 1.24 In November the company's budgeted production was 6500 units, but the actual production was 6300 units. The company used 1550 direct labor-hours to produce this output. The actual variable overhead cost was $8990. The company applies variable overhead on the basis of direct labor-hours. The variable overhead rate variance for November is:
Answer:
See
Explanation:
Given that;
Direct labor hours used to produce this output = 1,550
Actual variable overhead cost = $8,990
Variable overhead per hour = $6.2
The variable overhead rate variance for July is;
= Direct labor hours used to produce this out put × (Actual variable overhead rate per hour - Variable overhead per hour)
= 1,550 × ($8,990/1,550 - $6.2)
= 1,550 × ($5.8 - $6.2)
= 1,550 × (-$0.4)
= $620 favorable
A company is forecasted to generate free cash flows of $25 million next year and $29 million the year after. After that, cash flows are projected to grow at a stable rate in perpetuity. The company's cost of capital is 12.0%. The company has $34 million in debt, $19 million of cash, and 23 million shares outstanding. Using an exit multiple for the company's free cash flows (EV/FCFF) of 17, what's your estimate of the company's stock price
Answer:
$18.41
Explanation:
Equity value = FCF next year / (1 + cost of capital) + FCF in year 2 / (1 + cost of capital)^2 + 1 / (1 + cost of capital)^2 * [ (FCF in year 2 * exit multiple)]
= $25 million/1.12 + $29 million/1.12^2 + 1 / 1.12^2*[($29 million*17)]
= $25 million/1.12 + $29 million/1.12^2 + $493 million/1.12^2
= $25 million / 1.12 + $522 million / 1.12^2
= $438.4566327 million
The stock price = ($438.4566327 million - Debt + Cash) / Number of shares outstanding
= ($438.4566327 million - $34 million + $19 million) / 23 million shares
= $423.4566327 million / 23 million shares
= 18.4111579435
= $18.41
Prior to May 1, Fortune Company has never had any treasury stock transactions. A company repurchased 130 shares of its common stock on May 1 for $6,500. On July 1, it reissued 65 of these shares at $53 per share. On August 1, it reissued the remaining treasury shares at $48 per share. What is the balance in the Paid-in Capital, Treasury Stock account on August 2
Answer:
Fortune Company
There is a balance of ($65) in the Paid-in Capital, Treasury Stock account on August 2.
However, this balance will be transferred to the Additional Paid-in Capital account at year-end, since there are no outstanding shares for the Treasury Stock account.
Explanation:
a) Data and Calculations:
May 1 Repurchase of 130 shares (Treasury Stock) = $6,500
July 1 Reissue of 65 shares at $53 per share = (3,445)
August 1 Reissue of 65 shares at $48 per share = (3,120)
August 2, Balance in the Paid-in Capital = ($65)
b) The Treasury Stock account is a contra Paid-in Capital account which records transactions involving the repurchase and reissue of treasury shares. Treasury shares represent the company's own shares which are repurchased from its investors.
Three accuracy problems with the consumer price index (CPI) are Group of answer choices price confusion, substitution, and quality changes. substitution, quality changes, and the money illusion. substitution, quality changes, and the availability of new goods and services. the availability of new goods and services, substitution, and traditional bundle bias. the income effect, substitution effect, and money illusion.
Answer:
Option b (Substitution.....services) is the appropriate choice.
Explanation:
The above leads to calculating difficulties as well as the failure throughout the Index to identify better products and services contributing to less precise inflation outcomes.It does not take account of the replacement facilities, which arise when an increase throughout the price of one promising recommendation to a replacement including its good by another, which often increases the costs of one quality.The other options are not related to the given scenario. So the above is the correct choice.
Grant Industries, a manufacturer of electronic parts, has recently received an invitation to bid on a special order for 20,500 units of one of its most popular products. Grant currently manufactures 41,000 units of this product in its Loveland, Ohio, plant. The plant is operating at 50% capacity. There will be no marketing costs on the special order. The sales manager of Grant wants to set the bid at $13 because she is sure that Grant will get the business at that price. Others on the executive committee of the firm object, saying that Grant would lose money on the special order at that price.
Units 41,000 61,500
Manufacturing costs:
Direct materials $123,000 $184,500
Direct labor 164,000 246,000
Factory overhead 328,000 430,500
Total manufacturing costs$615,000 $861,000
Unit cost $15 $14
Required:
1. What is the relevant cost per unit and the bid price?
2. What would the total opportunity cost be if by accepting the special order the company lost sales of 6,500 units to its regular customers?
Answer:
Missing word "What would the total opportunity cost be if by accepting the special order the company lost sales of 6,500 units to its regular customers? Assume the above facts plus a normal selling price of $24 per unit."
Variable factory overhead per unit = (430,500 - 328,000) / 20,500 = $5
Direct materials per unit = $123,000 / 41,000 = $3
Direct labor per unit = 164,000 / 41,000 = $4
1. Relevant cost per unit = Direct materials per unit + Direct labor per unit + Variable factory overhead
Relevant cost per unit = $5 + $4 + $3
Relevant cost per unit = $12
So, the bid price should be above $10 per unit
2. Total opportunity cost would be the total contribution margin lost for the lost sales to the regular customer
Total opportunity cost = Loss of regular sales revenue - Total relevant cost for lost sales
Total opportunity cost = (6,500*$24) - (6,500*$12)
Total opportunity cost = $156,000 - $78,000
Total opportunity cost = $78,000
1. The relevant cost per unit for Grant Industries is $7.00 ($123,000 + $164,000)/41,000 or ($184,500 + $246,000)/61,500.
2. The total opportunity cost of accepting the special order when the company lost sales of 6,500 units from its regular customers is $12,500.
What are the relevant costs and opportunity costs?The relevant costs describe the avoidable costs that could be stopped if a decision is taken.
For example, if Grant Industries decides to take the special order, the relevant decision-making cost is $7 per unit and not $14 per unit.
The opportunity costs are costs that are not incurred based on taking an alternative decision. It also describes the lost revenue when some sales are lost for the special order.
For example, the total opportunity costs incurred by Grant Industries for taking the special order instead of attending to the regular customers with 6,500 units demand is $12,500.
Data and Calculations:Special order = 20,500 units
Current production = 41,000 units
Current operational capacity = 50%
Total capacity = 82,000 (41,000/50%)
Bid price = $13 per unit
New production based on special order = 61,500 (41,000 + 20,500)
Production Data Per Unit Per Bid
Units 41,000 61,500
Manufacturing costs:
Direct materials $123,000 $184,500
Direct labor 164,000 246,000
Factory overhead 328,000 430,500
Total manufacturing costs $615,000 $861,000
Unit cost $15 $14
Question 2 Completion:Assume the above facts plus a normal selling price of $24 per unit."
The opportunity cost of lost sales:Lost sales units = 6,500
Contribution per unit = $17 ($24 - $7)
Total contribution margin = $110,500 ($6,500 x $17)
Contribution margin from special order = $123,000 ($13 - $7 x 20,500)
Thus, the opportunity cost of lost sales is $12,500 ($123,000 - $110,500).
Learn more about relevant and opportunity costs at https://brainly.com/question/14184614 and https://brainly.com/question/8846809
Plant-wide, department, and activity-cost rates. Acclaim Inc. makes two styles of trophies, basic and deluxe, and operates at capacity. Acclaim does large custom orders. Acclaim budgets to produce 10,000 basic trophies and 5,000 deluxe trophies. Manufacturing takes place in two production departments: forming and assembly. In the forming department, indirect manufacturing costs are accumulated in two cost pools, setup and general overhead. In the assembly department, all indirect manufacturing costs are accumulated in one general overhead cost pool. The basic trophies are formed in batches of 200 but be-cause of the more intricate detail of the deluxe trophies, they are formed in batches of 50.
The controller has asked you to compare plant-wide, department, and activity-based cost allocation.
Forming Department Basic Delux Total
$60,000 $35,000 $95,000
Direct manufacturing labor $30,000 $20,000 $50,000
Overhead costs Setup $48,000
General overhead $32,000
Assembly Department Basic Delux Total
Direct materials $50,000 $10,000 $15,000
Direct manufacturing labor 15,000 25,000 40,000
Overhead costs Setup
General overhead 40,000
Required:
a. Calculate the budgeted unit cost of basic and deluxe trophies based on a single plant-wide overhead rate, if total overhead is allocated based on total direct (Don't forget to include direct material and direct manufacturing labor cost in your unit cost calculation.)
b. Calculate the budgeted unit cost of basic and deluxe trophies based on departmental overhead rates, where forming department overhead costs are allocated based on direct manufacturing labor costs of the forming department and assembly department overhead costs are allocated based on total direct manufacturing labor costs of the assembly department
c. Calculate the budgeted unit cost of basic and deluxe trophies if Acclaim allocates overhead costs in each department using activity-based costing, where setup costs are allocated based on number of batches and general overhead costs for each department are allocated based on direct manufacturing labor costs of each department.
d. Explain briefly why plant-wide, department, and activity-based costing systems show different costs for the basic and deluxe trophies. Which system would you recommend and why?
Answer:
Acclaim Inc.
Basic Trophies Deluxe Trophies
Budgeted unit cost:
a. using single-plant o/h rate $17.60 $28.80
b. using departmental rates $17.42 $29.16
c. using ABC $18.26 $27.48
d. They show different costs because the overhead rates are based on different parameters.
I recommend ABC system. It is more fair because the overhead rates are based on product line's activity usage instead of an arbitrary figure.
Explanation:
a) Data and Calculations:
Basic Trophies Deluxe Trophies Total
Budgeted production 10,000 5,000 15,000
Batches 200 50 250
Basic Trophies Deluxe Trophies Total
Forming Department $60,000 $35,000 $95,000
Direct manufacturing labor $30,000 $20,000 $50,000
Assembly
Direct materials $5,000 $10,000 $15,000
Direct manufacturing labor 15,000 25,000 40,000
Total direct costs $110,000 $90,000 $200,000
Overhead costs 66,000 54,000 120,000
Total production costs $176,000 $144,000 $320,000
Budgeted production 10,000 5,000
Budget unit costs $17.60 $28.80
Overhead rate
Total overhead/total direct costs = $120,000/$200,000 = $0.60
Basic Deluxe Total
Trophies Trophies
Forming department:
Overhead costs Setup $48,000
General overhead $32,000
Total overhead costs $80,000
Overhead rate = $80,000/$145,000 = $552
Assembly department
General overhead $40,000/$55,000 = $0.727
Basic Trophies Deluxe Trophies Total
Forming Department $60,000 $35,000 $95,000
Direct manufacturing labor $30,000 $20,000 $50,000
Total direct costs $90,000 $55,000 $145,000
Overhead costs 49,680 30,360 80,040
Total departmental costs $139,680 $85,360 $225,040
Assembly
Direct materials $5,000 $10,000 $15,000
Direct manufacturing labor 15,000 25,000 40,000
Total direct costs $20,000 $35,000 $55,000
Overhead costs 14,540 25,445 39,985
Total departmental costs $34,540 $60,445 $94,985
Total production costs $174,220 $145,805 $320,025
Budgeted production 10,000 5,000
Budget unit costs $17.42 $29.16
Basic Trophies Deluxe Trophies Total
Forming Department $60,000 $35,000 $95,000
Direct manufacturing labor $30,000 $20,000 $50,000
Assembly
Direct materials $5,000 $10,000 $15,000
Direct manufacturing labor 15,000 25,000 40,000
Total overhead allocated $72,600 $47,400 $120,000
Total production costs $182,600 $137,400 $320,000
Budgeted production 10,000 5,000
Budget unit costs $18.26 $27.48
Overhead costs allocation:
Basic Deluxe Total
Trophies Trophies
Forming department:
Overhead costs Setup $48,000/250 $38,400 $9,600 $48,000
General overhead $32,000/$50,000 19,200 12,800 32,000
Assembly department
General overhead $40,000/$40,000 15,000 25,000 40,000
Total overhead allocated $72,600 $47,400 $120,000
Crowding-out is the notion that:_________
a. Since tax revenues vary directly with GDP, a rise in the level of GDP will increase the budget surplus and limit expansion
b. Deficit financing will increase the demand for money, increase the interest rate, and reduce the level of investment spending in the economy
c. The standardized budget is the best indicator of whether a budget deficit crowds out investment
d. The actual budget is the best indicator of whether a budget deficit crowds out saving
Answer:
B
Explanation:
The theory of crowding out is that as government spending and borrowing increases, the demand for money would increase. This would lead to an increase in interest rate. As a result, the level of investment spending would decline. The theory submits that increased government spending would drive down private spending
When the equity method of accounting for investments is used by the investor, the amortization of additional depreciation due to differences between book values and fair values of investee assets on the date of acquisition: Group of answer choices Increases the investment account and reduces investment revenue. Increases the investment account and increases investment revenue. Reduces the investment account and increases investment revenue. Reduces the investment account and reduces investment revenue.
Answer:
d. Reduces the investment account and reduces investment revenue.
Explanation:
When the equity method of accounting for investments is used by the investor, the amortization of additional depreciation due to differences between book values and fair values of investee assets on the date of acquisition reduces the investment account and reduces investment revenue.
The amortization of additional depreciation reduces the investment account in the investee as well as reduces the income recognized from investee.
In the equity method, an investor amortizes, or expenses, the additional over book value paid for its portion of the investee's tangible non current assets. For non current assets, book value is purchase price minus accumulated depreciation. The investor amortizes the amount above book value it allocates to investee assets.
Mark Brandt, an employee of Mueller Corp., earned 3 weeks of compensated vacation time during the current year, but only took 2 weeks of vacation. His employer permits that 1 week of vacation can be carried forward to the following year. Mark fully intends to remain at his current employer and plans to take his vacation during the following year. His current weekly salary is $2,000. Mueller Corp. expects to grant a general salary increase of 5% effective at the beginning of the next year. What amount should Mueller accrue during the current year relating to Mark Brandt's carried-forward vacation
Answer:
Mark Brandt of Mueller Corporation
The amount that Mueller should accrue during the current year relating to Mark Brandt's carried-forward vacation is:
= $2,100
Explanation:
a) Data and Calculations:
Current weekly salary = $2,000
Expected general salary increase = 5%
The amount that Mueller should accrue during the current year relating to Mark Brandt's carried-forward vacation is:
= $2,000 * 1.05
= $2,100
b) $2,100 is the amount that will be paid in cash for cash settlement of Mark Brandt's carried-forward vacation, assuming he does not take it the following year.
Hull Company reported the following income statement information for the current year: Sales $ 423,000 Cost of goods sold: Beginning inventory $ 151,500 Cost of goods purchased 286,000 Cost of goods available for sale 437,500 Ending inventory 157,000 Cost of goods sold 280,500 Gross profit $ 142,500 The beginning inventory balance is correct. However, the ending inventory figure was overstated by $33,000. Given this information, the correct gross profit would be:
Answer:
$109,500
Explanation:
Calculation to determine the correct gross profit would be:
Sales $ 423,000
Less: Corrected Cost of goods sold:($313,500)
(280,500 + $33,000)
Gross Profit $109,500
Therefore the correct gross profit would be:$109,500
Adams Company manufactures two products. The budgeted per-unit contribution margin for each product follows: Super Supreme Sales price $ 95 $ 124 Variable cost per unit (58 ) (74 ) Contribution margin per unit $ 37 $ 50 Adams expects to incur annual fixed costs of $227,880. The relative sales mix of the products is 60 percent for Super and 40 percent for Supreme. Required Determine the total number of products (units of Super and Supreme combined) Adams must sell to break even. How many units each of Super and Supreme must Adams sell to break even
Answer:
Expected contribution as per sales mix = $37*0.60 + $50*0.40
= $22.20 + $20
= $42.20 per unit
Total number of products in total at break even point = Total fixed cost / Contribution per unit
= $227,880 / $42.20 per unit
= 5,400 units
How many units each of Super and Supreme must Adams sell to break even?
According to sales mix:
Super = 5,400 * 60% = 3,240 units
Supreme = 5,400 * 40% = 2,160 units.
A-Rod Manufacturing Company is trying to calculate its cost of capital for use in making a capital budgeting decision. Mr. Jeter, the vice-president of finance, has given you the following information and has asked you to compute the weighted average cost of capital.
The company currently has outstanding a bond with a 10.6 percent coupon rate and another bond with an 8.2 percent rate. The firm has been informed by its investment banker that bonds of equal risk and credit rating are now selling to yield 11.5 percent. The common stock has a price of $60 and an expected dividend (D1) of $1.80 per share. The historical growth pattern (g) for dividends is as follows:
1.35
1.49
1.64
1.80
The preferred stock is selling at $80 per share and pays a dividend of $7.60 per share. The corporate tax rate is 30 percent. The flotation cost is 2.5 percent of the selling price for preferred stock. The optimum capital structure for the firm is 25 percent debt, 10 percent preferred stock, and 65 percent common equity in the form of retained earnings.
(a) Compute the historical growth rate. (Round your intermediate calculations to 2 decimal places and final answer to the nearest whole percent. Omit the "%" sign in your response.)
Growth rate %
(b) Compute the cost of capital for the individual components in the capital structure. (Round growth rate to nearest whole percent. Round your answers to 2 decimal places. Omit the "%" sign in your response.)
Cost of capital
Debt (Kd) %
Preferred stock (Kp)
Common equity (Ke)
(c) Calculate the weighted cost of each source of capital and the weighted average cost of capital. (Round your intermediate calculations and final answers to 2 decimal places. Omit the "%" sign in your response.)
Weighted cost
Debt (Kd) %
Preferred stock (Kp)
Common equity (Ke)
Weighted average cost of capital (Ka) %
Answer:
PV = 1.35
FV = 1.8
n = 3
a. Growth rate = Rate(N, -PV, FV)
Growth rate = Rate(3, -1.35, 1.8)
Growth rate = 0.10
Growth rate = 10%
B. Cost of debt Kd (After tax) = 11.5%*(1-0.30) = 8.05%
Cost of preference share Kp = Dividend/Price = 7.6 /[80*(1 - 0.025)] = 9.74%
Cost of equity Ke = D1/P0+g = 1.8/60 + 0.1 = 0.03+0.1 = 0.13 = 13%
c. Source Weight A COC(%)(B) Weight cost of capital(A*B)
Debt 25% 8.05% 2.01%
Preferred stock 10% 9.74% 0.97%
Common stock 65% 13.00% 8.45%
Weighted average cost of capital 11.44%
Seth Erkenbeck, a recent college graduate, has just completed the basic format to be used in preparing the statement of cash flows (indirect method) for ATM Software Developers. All amounts are in thousands (000s).
ATM SOFTWARE DEVELOPERS Statement of Cash Flows For the year ended December 31, 2021
Cash Flows from Operating Activities
Net income
Adjustments to reconcile net income to net cash flows from operating activities:
Net cash flows from operating activities
Cash Flows from Investing Activities
Net cash flows from investing activities
Cash Flows from Financing Activities
Net cash flows from financing activities
Net increase (decrease) in cash $1,725
Cash at the beginning of the period 8,215
Cash at the end of the period $9,940
Listed below in random order are line items to be included in the statement of cash flows.
Cash received from the sale of land $8,590
Issuance of common stock 12,925
Depreciation expense 5,435
Increase in account receivable 4,030
Decrease in account payable 1,730
Issuance of long-term notes payable 16,345
Purchase of equipment 39,715
Decrease in inventory 1,445
Decrease in prepaid rent 875
Payment of divivdends 6,310
Net income 11,800
Purchase of treasury stock 2,585
Required:
Prepare the statement of cash flows for ATM software developers using the indirect method. List cash outflows and any decrease in cash as negative amounts. Enter the answer in thousands.
Answer:
See below
Explanation:
Statement of cash flow for ATM SOFTWARE
• The figures seems to be in thousands already.
Cash flow from operating activities
Net income
$11,800
Increase in Account receivable
($4,030)
Decrease in Account payable
($1,730)
Depreciation expense
$5,435
Decrease in inventory
$1,445
Decrease in prepaid rent
$875
Net cash flow from operating activities
$13,795
Cash flow from investing activities
Sale of land
$8,590
Purchase of equipment
($39,715 )
Net cash flow from financing activities
($31,125)
Cash flow from financing activities
Issuance of stock
$12,925
Long term note payable
$16,345
Purchase of treasury stock
($2,585 )
Payments of dividends
($6,310)
Net cash flow from financing activities
$20,375
Net increase in cash
$1,725
Cash at the beginning
$8,215
Cash at the end
$9,940
On March 10, 2017, Steele Company sold to Barr Hardware 200 tool sets at a price of $50 each (cost $30 per set) with terms of n/60, f.o.b. shipping point. Steele allows Barr to return any unused tool sets within 60 days of purchase. Steele estimates that (1) 10 sets will be returned, (2) the cost of recovering the products will be immaterial, and (3) the returned tools sets can be resold at a profit. On March 25, 2017, Barr returned 6 tool sets and received a credit to its account.
Prepare journal entries for Steele to record (1) the sale on March 10, 2017, (2) the return on March 25, 2017, and (3) any adjusting entries required on March 31, 2017 (when Steele prepares financial statements). Steele believes the original estimate of returns is correct. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No entry" for the account titles and enter 0 for the amounts.)
Answer:
Date Account Titles Debit Credit
March, 10 Accounts Receivables $10,000
Sales Revenue $10,000
Cost of Good sold $6,000
Inventory $6,000
Working
Receivables = 200 tool sets * 50 = $10,000
COGS = 200 * 30 = $6,000
Date Account Titles Debit Credit
March, 25 Sales Returns and Allowances $300
Accounts Receivable $300
Returned Inventory $180
Cost of Goods sold $180
Working:
Sales returns = 6 * 50 = $300
Cost of goods = 6 * 30 = $180
Estimated that 10 sets would be returned but only 6 were.
Date Account Titles Debit Credit
March, 25 Sales Returns and Allowances $200
Allowance for Sales Returns $200
and Allowances
Returned Inventory $120
Cost of goods sold $120
Working:
Sales returns = 4 * 50 = $200
COGS = 4 * 30 = $120
Capital using technological process results in ____?
Capital-driven technological processes lead to creating new and innovative capital goods.
What are capital goods?Capital goods are the assets utilized by a production company while engaging in the manufacturing of goods.
When the technological process is driven by capital funds, then the company starts manufacturing innovative capital products which further increase its worth. This leads to a decline in the worth of capital goods that are already been present in the consumer market.
Therefore, the emergence of new capital products is being produced due to technological processes.
Learn more about the capital goods in the related link:
https://brainly.com/question/18849286
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At December 31, 2020, the available-for-sale debt portfolio for Blossom, Inc. is as follows.
Security Cost Fair Value Unrealized Gain (Loss)
A $17,900 $15,200 $(2,700)
B 11,000 15,000 4,000
C 24,000 26,500 2,500
Total $52,900 $56,700 3,800
Previous fair value adjustment balance—Dr. 400
Fair value adjustment—Dr. $3,400
On January 20, 2021, Blossom, Inc. sold security A for $15,300. The sale proceeds are net of brokerage fees. Blossom, Inc. reports net income in 2020 of $123,000 and in 2021 of $142,000. Total holding gains (including any realized holding gain or loss) equal $41,000 in 2021.
Prepare a statement of comprehensive income for 2020, starting with net income.
Prepare a statement of comprehensive income for 2021, starting with net income.
Answer:
a. Blossom Inc
Statement of Comprehensive Income
For the Year Ended December 31, 2020
Particulars Amount
Net income $123,000
Other comprehensive income:
Add: Unrealized holding gain $3,400
Comprehensive income $126,400
b. Blossom Inc
Statement of Comprehensive Income
For the Year Ended December 31, 2021
Particulars Amount
Net income $142,000
Other comprehensive income:
Total holding gains in 2021 $41,000
Add: Reclassification adjustment- $2,700
for loss included in net income $38,300
Comprehensive income $180,300
Note:
Particulars Amount
Net amount received from the sale of Security A $17,900
Less: Cost of Security A $15,200
Loss on the sale of Security A ($2,700)
Why does operations managers need to get involved into planning?
Answer:
See below
Explanation:
The reason is that he oversees the entire operations of an organization, hence must know what the planning entails at the beginning.
Again, if the operating manager is involved in planning at the early stage, he would be able to contribute meaningfully towards the success of the plan
Rinehart Corporation purchased from its stockholders 5,000 shares of its own previously issued stock for $255,000. It later resold 2,000 shares for $54 per share, then 2,000 more shares for $49 per share, and finally 1,000 shares for $43 per share.
Prepare journal entries for the purchase of the treasury stock and the three sales of treasury stock.
Answer:
Dr Treasury Stock $255,000
Cr Cash $255,000
Dr Cash $108,000
Cr Treasury Stock $98,000
Cr Additional paid-in-capital (treasury stock)$10,000
Dr Cash $98,000
Cr Additional paid-in-capital (treasury stock)$10,000
Cr Treasury Stock $88,000
Dr Cash $43,000
Cr Common Stock $43,000
Explanation:
Preparation of the journal entries for the purchase of the treasury stock and the three sales of treasury stock.
Purchase
Dr Treasury Stock $255,000
Cr Cash $255,000
(Being to record purchase from stockholders)
Sale 1
Dr Cash $108,000
(2000*54)
Cr Treasury Stock $98,000
(2000*49)
Cr Additional paid-in-capital (treasury stock)$10,000
($108,000-$98,000
(Being To record sales of shares at $54 per share.)
Sale 2
Dr Cash $98,000
Cr Additional paid-in-capital (treasury stock)$10,000
Cr Treasury Stock $88,000
($98,000-$10,000)
(Being to record sale of shares at 49 per share )
(2000*49)
Sale 3
Dr Cash $43,000
Cr Common Stock $43,000
(1,000 shares for $43 per share)
Organizations exchange information internally and externally. External messages go to customers, vendors, the government, and other business partners. Internal messages travel upward to supervisors, downward to employees, and horizontally among workers. Understanding the different types of business messages and following the 3-x-3 writing process will help you write more effective professional messages.
Match the message content area with the correct types of messages.
a. Sales pitches, requests for favors
b. Replies, goodwill messages, direct claims
c. Bad news, refusals
1. persuasive
2. positive
3. negative
Answer:
1. persuasive: a. Sales pitches, requests for favors
2. positive: b. Replies, goodwill messages, direct claims
3. negative: c. Bad news, refusals
Explanation:
a) A persuasive speech is one whose goal is to convince someone of something, so it is correct to say that in an organizational message where there are sales speeches and requests for favors, there is a need for a persuasive speech, whose message seeks to convince the sender of the benefits of make a sale for example.
b) A positive speech is one whose intention is to motivate, give praise, offer positive feedback, etc. Therefore, in responses, messages of goodwill, direct claims, positive speech will help in better understanding of the sender and in the positive positioning of the company.
c) A negative discourse occurs when there is bad news to be shared, it is necessary that this message is written in a soft way, with damping words and indirectly, because this way the acceptability can be greater.
On September 12, Vander Company sold merchandise in the amount of $3,950 to Jepson Company, with credit terms of 2/10, n/30. The cost of the items sold is $2,725. Vander uses the periodic inventory system and the gross method of accounting for sales. On September 14, Jepson returns some of the merchandise. The selling price of the merchandise is $340 and the cost of the merchandise returned is $240. Jepson pays the invoice on September 18, and takes the appropriate discount. The journal entry that Vander makes on September 18 is:
Answer:
Date Account Debit Credit
September 18 Cash $3,537.80
Sales discount $ 72.20
Accounts Receivable $3,610
Explanation:
Net merchandise sold = 3,950 - 340
= $3,610
Sales discount is 2% if paid in 10 days which Jepson did.
= 2% * 3,610
= $72.20
Cash = Net sales - discount
= 3,610 - 72.20
= $3,537.80
Forsyth Company manufactures one product, it does not maintain any beginning or ending inventories, and its uses a standard cost system. During the year, the company produced and sold 10,000 units at a price of $135 per unit. Its standard cost per unit produced is $105 and its selling and administrative expenses totaled $235,000. Forsyth does not have any variable manufacturing overhead costs and it recorded the following variances during the year:
Materials price variance . . . . . . . . . . . . . . . . . . . . . . . . . . . . $6,500 F
Materials quantity variance . . . . . . . . . . . . . . . . . . . . . . . . $10,200 U
Labor rate variance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $3,500 U
Labor efficiency variance . . . . . . . . . . . . . . . . . . . . . . . . . . $4,400 F
Fixed overhead budget variance . . . . . . . . . . . . . . . . . . . . . $2,500 F
Fixed overhead volume variance . . . . . . . . . . . . . . . . . . . . $12,000 F
Required:
1. When Forsyth closes its standard cost variances, the cost of goods sold will increase (decrease) by how much?
2. Using Exhibit 10B-5 as a guide, prepare an income statement for the year.
Dylan Corporation
Income Statement
For the year ended 12/31/xx
dollars in thousands
Sales 5270
Cost of goods sold at stanadard 4335
Total variance adustments 36
Cost of goods sold 4371
Gross margin 899
Selling and administrative expenses 450
Net operating income 449
Answer:
See below
Explanation:
1. Computation of cost of goods sold
Materials Price Variance
$6,500 F
Materials Quantity Variance
$10,200 U
Labor Rate Variance
$3,500 U
Labor Efficiency Variance
$4,400 F
Fixed Overhead budget variance
$2,500 F
Fixed Overhead volume variance
$12,000 F
Cost of goods sold
$11,700
2. Net operating statement
Sales[$153 × 10,000]
$1,530,000
Less: Cost of goods sold
Cost of goods sold at standard [$105 × 10,000]
$1,050,000
Cost of good sold adjusted
($11,700)
Variance adjustment Balance
$1,038,300
Gross profit
$491,700
Less selling and administrative expenses
($235,000)
Net operating income
$256,700
Continent Construction Company is a building contractor specializing in small commercial buildings. The company has the opportunity to accept one of two jobs; it cannot accept both because they must be performed at the same time and Continent does not have the necessary labor force for both jobs. Indeed, it will be necessary to hire a new supervisor if either job is accepted. Furthermore, additional insurance will be required if either job is accepted. The revenue and costs associated with each job follow.
Cost Category Job A Job B
Contract price $800,000 $750,000
Unit—level materials 250,000 220,000
Unit—level labor 260,000 310,000
Unit—level overhead 40,000 30,000
Supervisor's salary 70,000 70,000
Rental equipment costs 26,000 29,000
Depreciation on tools (zero market value) 19,900 19,900
Allocated portion of companywide facility—sustaining costs 10,400 8,600
Insurance cost for job 18,200 18,200
Required
a. Assume that Continent has decided to accept one of the two jobs. Fill in the information relevant to selecting one job versus the other. Recommend which job to accept.
b. Assume that Job A is no longer available. Continent's choice is to accept or reject Job B alone. Fill in the information relevant to this decision. Recommend whether to accept or reject Job B.
Answer:
1. Job A is considered for recommendation
2. Accept B
Explanation:
1. We calculate contribution for A and B
For job A
$(800000-250000-260000-40000-26000)
= $224000
For job B
$(750000-220000-310000-30000-29000)
= $161000
We compare the costs of both jobs. A has more contribution compared to B so we consider A.
2. A is no longer available
We add supervisors salary as well as insurance as additional costs
$(750000-220000-310000-30000-29000-70000-18200)
= 72800
The contribution from b is positive so the decision is to accept it.
A company received 500 applications for a specific position.30 were given an assignment test. Only 15 were invited to an interview. The yield ratio of passing the interview is
a.
75%
b.
20%
c.
50%
d.
25%
Selected information from Peridot Corporation's accounting records and financial statements for 2021 is as follows ($ in millions): Cash paid to acquire machinery $ 35 Reacquired Peridot common stock 56 Proceeds from sale of land 97 Gain from the sale of land 55 Investment revenue received 72 Cash paid to acquire office equipment 84 In its statement of cash flows, Peridot should report net cash outflows from investing activities of:
Answer:
Peridot should report net cash outflows from investing activities of $22 million.
Explanation:
Peridot corporation
Statement of cash flows
$ in millions
Purchase of machinery
($35)
Proceeds from sale of land
$97
Cash paid to acquire office
($84)
Net cash outflows from investing activities
($22)
• We ignored required common stock because it belongs to financing activities section of cash outflows. Gain from sale of land and investment revenue is for operating activities section of the cash flow
Rusty has been experiencing serious financial problems. His annual salary was $100,000, but a creditor garnished his salary for $20,000; so the employer paid the creditor (rather than Rusty) the $20,000. To prevent creditors from attaching his investments, Rusty gave his investments to his 21-year-old daughter, Rebecca. Rebecca received $5,000 in dividends and interest from the investments during the year. Rusty transferred some cash to a Swiss bank account that paid him $6,000 interest during the year. Rusty did not withdraw the interest from the Swiss bank account. Rusty also hid some of his assets in his wholly owned corporation that received $150,000 rent income but had $160,000 in related expenses, including a $20,000 salary paid to Rusty. Rusty reasons that his gross income should be computed as follows:
Salary received $80,000
Loss from rental property ($150,000-$160,000) (10,000)
Gross income $70,000
Compute rustys correct gross income for the year, and explain any differences between your calculation and rusty
Answer:
Rusty annual salary was $100,000.
Rusty will not be taxed on the interest and dividend amount of $5,000 as Rebecca is the owner of the assets that is producing this income.
Secondly, Rusty will also need to report the $6,000 interest income. This has to be reported even though it has not been withdrawn.
Thirdly, he received $20,000 as salary from his wholly owned corporation.
Salary from employer $100,000
Salary from wholly owned corporation $20,000
Dividends and interest from the investments $0
Interest from Swiss bank account $6,000
Rental loss incurred $0
Gross income $126,000
these are the choices fill in the blanks.
asset backed security.
bank run
credit default swap.
capital
bond.
credit
common stock.
credit crunch
mortgage-backed securities.
debt
mutual fund.
default
option.
equity
futures contract.
foreclosure
subprime mortgage.
leverage
central bank.
liquidity
commercial bank.
liquidity risk
hedge fund.
moral hazard
investment bank.
mortgage
fannie mae/ freddie mac.
nationalization
federal deposit insurance corporation.
regulation
federal reserve system.
return
private equity fund
risk
securitization
Ann lives in Princeton, New Jersey, and commutes by train each day to her job in New York City (20 round trips per month). When the price of a round trip goes up from $10 to $20, she responds by consuming exactly the same number of trips as before, while spending $200 per month less on restaurant meals. Does the fact that her quantity of train travel is completely unresponsive to the price increase imply that Ann is not a rational consumer
Answer:
Yes
Explanation:
Hughes Co. is growing quickly. Dividends are expected to grow at a rate of 22 percent for the next three years, with the growth rate falling off to a constant 5 percent thereafter. If the required return is 12 percent and the company just paid a $2.35 dividend, what is the current share price? (Do not round intermediate calculations and round your final answer to 2 decimal places. (e.g., 32.16))
Answer: $53.94
Explanation:
Current share price is the present value of the dividends for the next 3 years and the terminal value in year 3.
Terminal value = D₄ / ( required return - growth rate)
= (2.35 * 1.22³ * 1.05) / (12 % - 5%)
= $64
D₁ = 2.35 * 1.22 = $2.867
D₂ = 2.867 * 1.22 = $3.49774
D₃ = 3.49774 * 1.22 = $4.2672428
Share price = (2.867 / (1 + 12%)) + (3.49774 / 1.12²) + (4.2672428 / 1.12³) + (64/1.12³)
= $53.94