Answer:
D. there is not enough information to determine the change in the overall price level.
Explanation:
A price level is the average of current prices across the entire spectrum of goods and services produced in the economy. To determine the price level, information about current and past period's prices of a basket of goods and services is needed to be compared.
It is only the availability of two or more sets of such information that will enable a comparison to be made and for conclusions to be drawn.
Magnolia, Inc. has budgeted sales for the first quarter of the next year to be 45,000 units. The inventory on hand at the beginning of quarter is 5,000 units. The desired ending inventory is 3,000 units. Calculate the budgeted production for the first quarter.
Answer:
Production= 43,000 units
Explanation:
Giving the following information:
Sales= 45,000 units
Beginning inventory= 5,000 units
The desired ending inventory is 3,000 units.
To calculate the budgeted production, we need to use the following formula:
Production= sales + desired ending inventory - beginning inventory
Production= 45,000 + 3,000 - 5,000
Production= 43,000 units
When a GEM Manufacturing experienced a slowdown in sales, it laid off the two employees with the poorest attendance. One of the employees sued the company, saying it should have laid off the most recently hired workers. What defense should GRM Manufacturing most likely offer
Answer:
the layoffs were instances of employment at will
Explanation:
GEM Manufacturing's defense would most likely be that the layoffs were instances of employment at will.
Employment at will is a situation where a worker may be dismissed by an employer for any reason that may not be illegal and at anytime.
The Employers, in this question for example, terminated the relationship because of slowdown in sales. And this action affected the two employees with poorest attendance.
he following information was drawn from the accounting records of Chapin Company. On January 1, Year 1, Chapin paid $56,000 cash to purchase a truck. The truck had a five-year useful life and a $6,000 salvage value. As of December 31, Year 1, Chapin Company had a $68,000 balance in its Accounts Receivable account and a zero balance in its Allowance for Doubtful Accounts account. Sales on account for Year 1 amounted to $320,000. Chapin estimates that 5 percent of credit sales will be uncollectible. Required a. Record the year-end adjusting entry for depreciation expense on the truck in T-accounts. b. Determine the book value of the truck that will appear on the December 31, Year 1, balance sheet. c. Record the year-end adjusting entry of uncollectible accounts expense. d. Determine the net realizable value of receivables that will appear on the December 31, Year 1, balance sheet.
Answer:
a. Record the year-end adjusting entry for depreciation expense on the truck in T-accounts.
December 31, 202x, accrued depreciation expense on truck
Dr Depreciation expense 10,000
Cr Accumulated depreciation - truck 10,000
b. Determine the book value of the truck that will appear on the December 31, Year 1, balance sheet.
Truck $46,000
c. Record the year-end adjusting entry of uncollectible accounts expense.
December 31, 202x, allowance for doubtful accounts
Dr Bad debt expense 16,000
Cr Allowance for doubtful accounts 16,000
d. Determine the net realizable value of receivables that will appear on the December 31, Year 1, balance sheet.
Accounts receivable $52,000
Explanation:
truck's depreciation expense straight depreciation = ($56,000 - $6,000) / 5 years = $10,000 per year
accounts receivable balance December 31 = $68,000
allowance for doubtful accounts = $0
total sales on account = $320,000
5% of credit sales are uncollectible
accounts receivable = $68,000 - $16,000 = $52,000
A new American graduate is contemplating buying a
Japanese, German, or an American car. No matter the type of car, he
plans to buy a new one at the end of 8 years.
The Japanese cars will cost $30,000 and have a fuel
usage of 23 Miles Per gallon (mpg) for the first 2 years and will
decrease by 3% per year thereafter. The repair cost will start at $700
per year, and increase by 3% per year. At the end of year 8, the
car can be sold for $5000. Insurance cost will be $700 for the
first year, increasing by 2% per year thereafter.
A German car will cost $45,000 and have fuel usage
of 21mpg for the first 5 years, and decrease by 1% thereafter to
year 8. The repair cost will start at $1000 in year 1 and increase by
4% per year. It will have a salvage value of $7000 at the end of
year 8. Insurance cost will be $850 the first year, increasing by
2% per year thereafter.
The American car will cost $35,000 and have fuel
usage of 20mpg for the first 3 years and will decrease by 3% per
year thereafter. The repair cost will be $800 in year 1, increasing by
4% per year thereafter. Being an American, the graduate will price
the pride of owning an American car at $0.4 for every 20 miles
driven, increasing by 2% per year. Insurance costs will be $800 per
year increasing by 2.2% per year. The car can be sold for $5500 at
the end of year 8.
If the graduate anticipates driving 150000 miles by
the end of year 8 and the average interest rate is expected to
remain at 5% per year, which car is economically affordable based
on present worth analysis? Assume fuel cost will be $3 per gallon
in year 1 and increase by an average of 2% per year. Show all your
workings.
Answer:
The best option is to buy Japanese Car.
Explanation:
Fuel usage per year is 150000/ 8 = 18750 miles per year
Fuel cost (year 1 -8) = $3.0, $3.06, $3.12, $3.18, $3.25, $3.312, $3.38, $3.5
Japanese Car:
Fuel usage 18750 / 23 = 815 * $3 = $2446
Fuel charges (year 1 -8) = $2445, $2494, $2623, $2758. $2900, $3050, $3207, $3372
Repair Cost (year 1 - 8) = $700, $721, $742, $764, $787, $811, $835, $860
Insurance cost (Year 1 - 8) = $700, $714, $728, $742, $757, $772, $788, $804
Present value of cost at 5% = 24674.07
Cost of car is $30,000
Total cost = $54674.07
American Car:
Cost $35,000
Fuel usage 18750/20 = 937.5 * $3 per gallon = $2812.5.
Fuel charges (year 1 -8) = $2812, $2913, $2986, $3011. $3098, $3124, $3176, $3208
Repair Cost (year 1 - 8) = $800, $894, $921, $978, $1109, $1176, $1207, $1301
Insurance cost (Year 1 - 8) = $800, $827, $876, $898, $908, $932, $954, $934
Present value of cost at 5% = 25302.18
Cost of car is $35,000
Total cost = $60302.
German Car:
Cost = $45,000
Fuel usage 18750 / 21 = 892 * $3 = $2678
Fuel charges (year 1 -8) = $2679, $2732, $2786, $2842. $2899, $2987, $3077, $3171
Repair Cost (year 1 - 8) = $1000, $1040, $1081, $1124, $1169, $1216, $1265, $1316
Insurance cost (Year 1 - 8) = $850, $867, $884, $902, $920, $938, $957, $976
Present value of cost at 5% = 27105.73
Cost of car is $45,000
Total cost = $72105.
Categories the following into Market economy and Non-market economy.
1. Prices are set by government agencies.
2. The invisible hand guides resources to their highest valued uses
3. Buyers and sellers are motivated by government directives.
4. Prices are set by supply and demand
5. Buyers and sellers are motivated by a sense of communal well- being.
6. Buyers and sellers are motivated by self-interest.
Answer:
Market economy:
2. The invisible hand guides resources to their highest valued uses
4. Prices are sey by supply and demand
6. Buyers and sellers are motivated by self-interest
Non-market economy:
1. Prices are set by government agencies
3. Buyers and sellers are motivated by government directives
5. Buyers and sellers are motivated by a sense of communal well-being
Explanation:
On the one hand, the concept of market economy refers to a type of economy system that basically indicates that the market will find the equilibrium and work properly without the help of the government and therefore it establishes that the economy does not need from the figure of the government and that this last one must worry only about the other issues that do not include the economy.
On the other hand, a non-market economy like its name indicates, it refers to the type of system that do consider that the presence of the government is very important for the correct system of the economy and all of its factors regarding the market. Therefore that this type of system approves the planning of the economy from the government without discussions.
TerraLoc competes in the market for global positioning devices and services. The company manufactures its own GPS units, which are smaller than those of any other competitor and include a proprietary battery that lasts 200% longer than any other competitor's battery and that TerraLoc manufacturers on-site. TerraLoc also has developed proprietary software that is much faster and more precise than that of any competitor. When developing the proprietary battery, TerraLoc decided to manufacturer the battery in-house to reduce the possibility that the company it outsourced the battery manufacturing to might reverse engineer the battery and sell a similar product to competitors. This possibility was especially troubling given that the company expected a significant increase in demand due to the improved battery life. Additionally, TerraLoc sells its products and services through its own direct sales force to ensure that its representatives highlight the longer battery life of TerraLoc's units.
TerraLoc's decsion to manufacture the battery in-house is most consistent with which theory(s) of vertical integration?
a. Firm capability-based explanations
b. Alliance-based explanation
c. Opportunism-based explanations
d. Flexibility-based explanations
Answer:
The correct answer is the option A: firm capability-based explanations.
Explanation:
To begin with, given the fact that the company decided to manufactured the battery in-house in order to reduce the possibility of helping other competitors when using an outsourced manufacturer then the company is using its firm capability in order to achieve the goal of manufacturing that component of the final product. Therefore that if the company would not have the resources and capability of doing it then it would necessary outsourced the manufactured of it.
Rhys Hoskins is the president of RH Corporation (RHC). RHC has provided the following partial listing of costs incurred during August: Marketing salaries $ 45,300 Utilities, factory $ 11,400 Administrative travel $ 102,300 Sales commissions $ 54,800 Indirect materials $ 39,500 Direct materials $ 166,400 Advertising $ 147,800 Depreciation of production equipment $ 47,000 Direct labor $ 91,700 Required: a. What is the total amount of manufacturing cost listed above?
Answer:
$306,000
Explanation:
To determine manufacturing costs, consider only those cost that can be directly traced to the product manufactured and plant related costs.
Total Manufacturing Cost Calculation :
Factory Utilities $11,400
Indirect Materials $39,500
Direct Materials $166,400
Equipment Depreciation $47,000
Direct labor $91,700
Total Manufacturing Cost $306,000
The income elasticity for most staple foods, such as wheat, is known to be between zero and one. As incomes rise over time, what will happen to the demand for wheat? What will happen to the quantity of wheat purchased by consumers? What will happen to the percentage of their budgets that consumers spend on wheat? All other things equal, are farmers likely to be relatively better off or relatively worse off in periods of rising incomes?
Answer and Explanation:
a. As it is given that the income elasticity of wheat is between zero and one that reflects inelastic and less than unity condition.
So in this, when the income is increased the demand for wheat is also increased but it would be less proportionally
And, the percentage increase in demand for wheat is lower than the increase in income
b. The quantity of wheat purchased is increased as there is an increase in income which increased the demand for all goods
c. The percentage of their budget will go decline as the income elasticity is between zero and one that results into an increase in income and they can switch more expenditure for other goods
d. The farmer condition does not affect overall as if the income increased the demand for other goods is also increased but it is more than the wheat
Corporation is a rapidly growing biotech company that has a required rate of return of 14%. It plans to build a new facility in Santa Clara County. The building will take 2 years to complete. The building contractor offered New Pharm a choice of three payment plans, as follows:
Plan I: Payment of $ 325,000 at the time of signing the contract and $ 4,825,000 upon completion of the building. The end of the second year is the completion date.
Plan II: Payment of $ 1,675,000 at the time of signing the contract and $ 1,675,000 at the end of each of the 2 succeeding years.
Plan III: Payment of $ 425,000 at the time of signing the contract and $ 1,650,000 at the end of each of the 3 succeeding years.
Required
1. Using the net present value method, calculate the comparative cost of each of the three payment plans being considered by New Tech.
2. Which payment plan should New Tech choose? Explain.
3. Discuss the financial factors, other than the cost of the plan, and the non-financial factors that should be considered in selecting an appropriate payment plan.
Answer:
NPV = $4,037,680.83
NPV = $4,433,156.36
NPV = $4,255,692.85
The first payment plan would be chosen because it has the lowest NPV. If chosen, the lowest amount would be paid.
Expected inflation: if inflation is expected to rise higher than expected in subsequent years , payment plans that differ payment to later year might be more suitable . Inflation causes the value of money to fall so if payment is made in later years , less money would be paid.
Conversely, if inflation is expected to fall, payment plan that makes payments in earlier years would be more suitable.
Also, the effect of payment on other projects should be considered. For example, if the company has other projects they want to undertake now but do not have enough capital required to start, the company might want to choose a payment plan that differs payment especially if the other project doesn't have a flexible payment plan.
Explanation:
Net present value is the present value of after tax cash flows from an investment less the amount invested.
NPV can be calculated using a financial calculator
Plan 1
Cash flow in year 0 = $ 325,000
Cash flow in year 1 = 0
Cash flow in year 2 = $ 4,825,000
I = 14%
NPV = $4,037,680.83
Plan 2
Cash flow each year from year 0 to 2 = $1,675,000
I = 14%
NPV = $4,433,156.36
Plan 3 :
Cash flow in year 0 = $ 425,000
Cash flow each year from 1 to 3 = $ 1,650,000
I = 14%
NPV = $4,255,692.85
To find the NPV using a financial calacutor:
1. Input the cash flow values by pressing the CF button. After inputting the value, press enter and the arrow facing a downward direction.
2. After inputting all the cash flows, press the NPV button, input the value for I, press enter and the arrow facing a downward direction.
3. Press compute
I hope my answer helps you
Consider the market for meekers in the imaginary economy of Meekertown. In the absence of international trade, the domestic price of a meeker is $30. Suppose that the world price for a meeker is $40. Assume that Meekertown is too small to influence the world price for meekers once they enter the international market.
If Meekertown allows free trade, then it will (import/export?) meekers.
Given current economic conditions in Meekertown, complete the following table by indicating whether each of the statements is true or false.
Statement True False
Meekertownian consumers are worse off under free trade than they were before.
Meekertownian producers were better off without free trade than they are with it.
True or False: When a country is too small to affect the world price, allowing for free trade will always increase total surplus in that country, regardless of whether it imports or exports as a result of international trade.
Answer:
Export
True
False
True
Explanation:
Free trade is a form of trade policy where there are no restrictions to imports or exports of goods and services.
The price of meekers is $30 in Meekertown and $40 In the world. Because meeker's are cheaper in Meekertown, it means that Meekertown is efficient in the production of meekers. As a result, they would export meekers to the rest of the world. It would be cost efficient for the rest of the world to import from Meekertown.
Consumers in Meekertown are worse of because of the trade because the price of Meekers would rise.
Producers are better off because they would earn more profits from the sale of Meekers at the world price.
Free trade increases total surplus because of efficient production. If a country is inefficient in production, it would import . This would increase consumer surplus and if it is efficient in production, it would export increasing producer surplus.
I hope my answer helps you
A company's production department was experiencing a high defect rate on the assembly line, which was slowing down production and causing wastage of valuable direct materials. The production manager decided to purchase a higher grade of materials that would be more reliable, but he was worried that the cost of the new materials might negatively affect operating income. This would produce a(n) ________.A. unfavorable direct materials cost variance
B. unfavorable direct materials efficiency variance
C. favorable direct labor cost variance
D. favorable direct labor efficiency variance
Answer:
D
Explanation:
Because the higher the quality of materials the more efficient the product will be
On September 1, Shawn Dahl established Whitewater Rentals, a canoe and kayak rental business. The following transactions occurred in the month of September and affected the following accounts:
Cash Accounts Payable
Accounts Receivable Shawn Dahl, Capital
Office Equipment Revenue
Canoe and Kayak Equipment Expenses
Following are the transactions:
1. Shawn Dahl invested $44,400 in cash to open the business
2. Paid $12,100 in cash for the purchase of kayak and canoe equipment
3. Paid $1,850 in cash for rent expense
4. Purchased additional kayak and canoe equipment for $4,600 on credit
5. Received $4,700 in cash for kayak rentals
6. Rented canoes and kayaks for $2,000 on account
7. Purchased office equipment for $205 in cash
8. Received $1,200 in cash from credit clients
9. Shawn Dahl withdrew $2,300 in cash for personal expenses
Based on the information shown above, what is the balance of Accounts Receivable for Whitewater Rentals at the end of September?
Answer:
what is the balance of Accounts Receivable for Whitewater Rentals at the end of September?
$800
Explanation:
We can seen in the transactions in the question that Whitewater Rentals first obtained $2,000 from rented canoes on account. These $2,000 represent the initial balance of accounts receivable.
Later, credit clients paid $1,200 cash. This reduced accounts receivable by the same amount.
Therefore, the balance of Accounts Receivable for Whitewater Rentals at the end of September is = $2,000 - $1,200 = 800
At the beginning of Year 2, Oak Consulting had the following normal balances in its accounts:
Account Balance
Cash $29,400
Accounts receivable 21,600
Accounts payable 12,000
Common stock 28,300
Retained earnings 10,700
The following events apply to Oak Consulting for Year 2:
Provided $68,400 of services on account.
Incurred $3,100 of operating expenses on account.
Collected $47,400 of accounts receivable.
Paid $31,100 cash for salaries expense.
Paid $13,590 cash as a partial payment on accounts payable.
Paid a $8,500 cash dividend to the stockholders.
Required:
a. What is the amount of net income for the year?
b. What is the amount of change in retained earnings for the year?
Answer:
a. What is the amount of net income for the year?
$34,190b. What is the amount of change in retained earnings for the year?
increased by $25,690Explanation:
net income:
total service revenue $68,400salaries expense -$31,100operating expenses -$3,100net income = $34,190change in retained earnings = net income - dividends = $34,190 - $8,500 = $25,690
Revenue and expenses are recorded on the periods that they occur, regardless of when they are collected or paid respectively.
On January 1, Wei company begins the accounting period with a $42,000 credit balance in Allowance for Doubtful Accounts.
A. On February 1, the company determined that $9,200 in customer accounts was uncollectible; specifically, $2,100 for Oakley Co. and $7,100 for Brookes Co. Prepare the journal entry to write off those two accounts.
B. On June 5, the company unexpectedly received a $2,100 payment on a customer account, Oakley Company, that had previously been written off in part a. Prepare the entries to reinstate the account and record the cash received.
Answer:
Wei company General Journal
Feb 01
Dr Allowance for doubtful accounts $9,200
Cr Accounts receivable—Oakley Co. $2,100
Cr Accounts receivable—Brookes Co. $7,100
June 05
Dr Accounts receivable—Oakley Co. $2,100
Cr Allowance for doubtful accounts $2,100
June 05
Dr Cash $2,100
Cr Accounts receivable—Oakley Co. $2,100
Explanation:
Feb 01
(To record write off accounts receivables)
June 05
(To record reinstatement accounts receivable)
June 05
(To record receipt from accounts receivable)
In contrasting equity and efficiency, why do high-tech firms seem to treat their employees better (better wages, benefits, working environments, vacations, etc.) compared to how landscaping or fast-food franchises treat their employees
Answer:
High-tech firms are hiring expensive, sophisticated people who are in high demand compared to fast food franchises and treat them better to avoid losing them to other companies
Explanation:
High-tech firms are hiring expensive, sophisticated people who are in high demand. This brings about a better treatment of their employees because if they do not offer these amenities to employees, they would become employees of other high-tech companies. Individuals with low skill levels do not get high salaries or benefits. They are not in as high demand as highly skilled workers. It is efficient, but many would argue that it is not fair.
2. Jill would like to plan for her son’s college education. She would like for her son, who was born today, to attend college for 5 years, beginning at age 18. Tuition is currently $12,000 per year and tuition inflation is 6%. Jill can earn an after-tax rate of return of 8%. How much must Jill save at the end of each year, if she wants to make the last payment at the beginning of her son’s first year of college?
Answer:
$4,531.50
Explanation:
first we must determine the cost of tuition in 18 years (2038):
$12,000 x (1 + 6%)¹⁸ = $34,252 per year
to calculate the total value of college tuition (5 years) in 2038 we can use the annuity due factor (6% and 5 years) 4.4651:
total college tuition = $34,252 x 4.4651 = $152,939
this means that Jill needs to have $152,939 for the moment her son starts college:
we have to calculate the payment:
to calculate the future value of an annuity (since she starts to save at end of the year, it is an ordinary annuity, not annuity due) we use the following formula:
future value = payment x ordinary annuity factor (8% and 17 years)
we know future value ($152,939) and the annuity factor = 33.7502
payment = future value / annuity factor
payment = $152,939 / 33.7502 = $4,531.50
Sheffield Corp. has 285,000 shares of $8 par value common stock outstanding. It declares a 13% stock dividend on December 1 when the market price per share is $16. The dividend shares are issued on December 31. Prepare the entries for the declaration and distribution of the stock dividend. (Record journal entries in the order presented in the problem. Credit account titles are automatically indented when 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:
285,000 common stock outstanding with a $8 par value
it declares 13% stock dividend
market price at $16
since the stock dividend is considered small (less than 20%), we use the market price to record it
December 1, 202x stock dividends are declared (37,050 stocks)
Dr Retained earnings 592,800
Cr Common stock dividends distributable 296,400
Cr Additional paid in capital 296,400
December 31, 202x, distribution of stock dividends
Dr Common stock dividends distributable 296,400
Cr Common stock 296,400
Present and future value
PV of $1 FV of $1 PVA of $1 FVAD of $1 FVA of $1
1 0.91743 1.09000 0.91743 1.0900 1.0000
2 0.84168 1.18810 1.75911 2.2781 2.0900
3 0.77218 1.29503 2.53129 3.5731 3.2781
4 0.70843 1.41158 3.23972 4.9847 4.5731
5 0.64993 1.53862 3.88965 6.5233 5.9847
6 0.59627 1.67710 4.48592 8.2004 7.5233
How much must be invested now at 9% interest to accumulate to $24,000 in four years?
a) $1,753.b) $1,965.c) $2,652.d) $2,317.
Answer:
$ 17,002.21 (none of the options is correct)
Explanation:
The formula for determining the present value ,which is the actual amount invested to give a future value is given below:
PV=FV*(1+r)^-n
The PV is the present value which is unknown
FV is the future worth of the investment which is $24,000
r is the rate of return which is 9% per year
n is the duration of investment which is 4 years
PV=$24,000*(1+9%)^-4
PV=$24,000*(1.09)^-4
PV=$24,000*0.708425211 =$ 17,002.21
Newton Inc. uses a calendar year for financial reporting. The company is authorized to issue 9,053,000 shares of $10 par common stock. At no time has Newton issued any potentially dilutive securities. Listed below is a summary of Newton’s common stock activities.
1. Number of common shares issued and outstanding at December 31, 2012
2,413,000
2. Shares issued as a result of a 10% stock dividend on September 30, 2013
241,300
3. Shares issued for cash on March 31, 2014
2,136,000
Number of common shares issued and outstanding at December 31, 2014
4,790,300
4. A 2-for-1 stock split of Newton’s common stock took place on March 31, 2015
Compute the weighted-average number of common shares used in computing earnings per common share for 2013 on the 2014 comparative income statement
Compute the weighted-average number of common shares used in computing earnings per common share for 2014 on the 2014 comparative income statement
Compute the weighted-average number of common shares to be used in computing earnings per common share for 2014 on the 2015 comparative income statement.
Compute the weighted-average number of common shares to be used in computing earnings per common share for 2015 on the 2015 comparative income statement.
Answer:
1. The weighted-average number of common shares to be used in computing earnings per common share for 2014 on the 2015 is 2,654,300 shares.
2. The weighted-average number of common shares to be used in computing earnings per common share for 2014 on the 2014 is 4,256,300 shares
3. The weighted-average number of common shares to be used in computing earnings per common share for 2014 on the 2015 is 8,512,600 shares
4. The weighted-average number of common shares to be used in computing earnings per common share for 2015 on the 2015 is 9,580,600 shares.
Explanation:
1. To calculate the weighted-average number of common shares used in computing earnings per common share for 2013 on the 2014 comparative income statement we would have to ake the following calculation:
Jan1.2013-Sep30.2013(2,413,000*9/12)=1,809,750
retroactive adjustment for stock dividend ×1.10
Jan1.2013-Sep30.2013 adjusted= 1,990,725
Oct.2013-Dec31.2013(2,654,300*3/12)= 663,575
Therefore, the weighted-average number of common shares to be used in computing earnings per common share for 2014 on the 2015 is 2,654,300 shares.
2. To calculate the weighted-average number of common shares used in computing earnings per common share for 2014 on the 2014 comparative income statement we would have to make the following calculation:
Jan1.2014 -Mar31.2014(2654300*3/12) 663575
April1.2014 -Dec31.2014 (4790300*9/12) 3592725
Therefore, the weighted-average number of common shares to be used in computing earnings per common share for 2014 on the 2014 is 4,256,300 shares
3. To calculate the weighted-average number of common shares to be used in computing earnings per common share for 2014 on the 2015 comparative income statement we would have to make the following calculation:
2014 weighted average no of shares 4256300
Retroactive adjustment for stock split ×2 =8512600
Therefore, the weighted-average number of common shares to be used in computing earnings per common share for 2014 on the 2015 is 8,512,600 shares
4. To calculate the weighted-average number of common shares to be used in computing earnings per common share for 2015 on the 2015 comparative income statement we would have to make the following calculation:
Jan1.2015-Mar31.2015 (4790300*3/12)=1197575
Retroactive adjustment for stock split ×2
Jan1-Mar31.2015 adjusted. 2395150
Mar1.-Dec31.2015 (9580600*9/12)= 7185450
Therefore, the weighted-average number of common shares to be used in computing earnings per common share for 2015 on the 2015 is 9,580,600 shares.
Riverbed Corporation was organized on January 1, 2020. It is authorized to issue 14,500 shares of 8%, $100 par value preferred stock, and 475,000 shares of no-par common stock with a stated value of $2 per share. The following stock transactions were completed during the first year.
Jan. 10 Issued 84,500 shares of common stock for cash at $4 per share.
Mar. 1 Issued 4,050 shares of preferred stock for cash at $110 per share.
Apr. 1 Issued 24,000 shares of common stock for land. The asking price of the land was $88,500. The fair value of the land was $83,500.
May 1 Issued 83,000 shares of common stock for cash at $5.25 per share.
Aug. 1 Issued 12,000 shares of common stock to attorneys in payment of their bill of $40,500 for services performed in helping the company organize.
Sept. 1 Issued 11,500 shares of common stock for cash at $5 per share.
Nov. 1 Issued 2,500 shares of preferred stock for cash at $111 per share
Required:
Journalize the transactions.
Answer:
Jan. 10
Cash $338,000 (debit)
Common Stock $338,000 (credit)
Mar. 1
Cash $445,500 (debit)
Common Stock $445,500 (credit)
Apr. 1
Land $88,500 (debit)
Common Stock $88,500 (credit)
May 1
Cash $435,750 (debit)
Common Stock $435,750 (credit)
Aug 1
Organizing Costs : attorneys $40,500 (debit)
Common Stock $40,500 (credit)
Sept. 1
Cash $57,500 (debit)
Common Stock $57,500 (credit)
Nov. 1
Cash (debit) $277,500
Share Premium ; Preference Stock (credit) $27,500
Preference Stock (credit) $250,000
Explanation:
The Common Stocks are classified as no-par common stock. This means there is no premium account recognized for this classification of stock. The stocks will be presented at their respective value at date of issuance.
With the Preference Stock, this is different. A par value of $100 has been established. Any payment made in excess of the par value will end up in Share Premium Account.
During the year, TRC Corporation has the following inventory transactions. Date Transaction Number of Units Unit Cost Total Cost Jan. 1 Beginning inventory 44 $ 36 $ 1,584 Apr. 7 Purchase 124 38 4,712 Jul. 16 Purchase 194 41 7,954 Oct. 6 Purchase 104 42 4,368 466 $ 18,618 For the entire year, the company sells 413 units of inventory for $54 each. Required: 1. Using FIFO, calculate ending inventory, cost of goods sold, sales revenue, and gross profit.
Answer:
TRC Corporation
Calculations, using FIFO:
a) Ending Inventory:
Ending Inventory in units = Units available for sale minus Units sold
Ending Inventory in units = 466 - 413 = 53 units
Ending Inventory value = Units x FIFO cost of last purchase = 53 x $42 = $2,226
b) Cost of goods sold:
Cost of goods sold = Beginning Inventory + Purchases - Ending Inventory
Cost of goods sold = $1,584 + 17,034 - 2,226 = $16,392
c) Sales Revenue:
Sales Revenue = Units sold x Selling price = 414 x $54 = $22,302
d) Gross Profit:
Gross Profit = Sales Revenue minus Cost of goods sold
Gross Profit = $22,302 - $16,392 = $5,910
Explanation:
a) Summary of Inventory Transactions:
Date Transaction Number of Units Unit Cost Total Cost
Jan. 1 Beginning inventory 44 $ 36 $ 1,584
Apr. 7 Purchase 124 38 4,712
Jul. 16 Purchase 194 41 7,954
Oct. 6 Purchase 104 42 4,368
b) Cost of goods available 466 $ 18,618
c) Sales 413 $ 54 $ 22,302
d) Dec. 31 Ending Inventory 53 42 $ 2,226
e) The FIFO (First-in, First-out) inventory method assumes that goods sold are from earlier inventory units, unlike Last-in, First-out (LIFO). This means that beginning and earlier purchased inventory units are sold first before the latest purchases. Using the FIFO method, the ending inventory is valued at the cost of the most recent inventory purchases.
A C corporation earns $ 9.20 per share before taxes and the company pays a dividend of $ 4.00 per share. The corporate tax rate is 39%, the personal tax rate on dividends is 15%, and the personal tax rate on non-dividend income is 36%. What is the after-tax amount an individual would receive from the dividend?
Answer:
The answer is $4.27
Explanation:
Solution
Given that:
AC corporation earns = $9.2 per share
Pays a dividend of =$4.00
The tax rate (Corporate ) is =39%
The tax rate on personal dividends is= 15%
The tax rate for non-dividend personal income is = 36%
Now,
We must find the after tax rate amount of after tax rate an individual or a person would earn from the dividend
Thus,
The corporate tax =$9.40 * 39% = 3.67
Personal tax = $4.00 * 15% = 0.6
Now we find the total for the after tax rate
Total = $3.67 + $0.6
= $4.27
Therefore, the after tax rate an individual or a person would earn from the said divided is $4.27
The debate on the effects of raising the minimum wage is ongoing. A few years ago, Seattle, Los Angeles, and San Francisco passed laws to gradually raise the minimum wage to $15/hour. Beaudry, Paul, David A. Green, and Ben M. Sand (investigated the possible effects of these laws on the labor market and concluded that "...for workers below $10 per hour in Seattle, the employment rate declines by over 10 percent in response to raising the minimum wage to $15. Meanwhile, for the larger group with wages at or below $15, the decline is approximately 7 percent." The authors' conclusion is consistent with the specific economic theory discussed in the course that
Answer:
The findings are consistent with the specific economic theory about minimum wage that is held by mainstream, neoclassical theories.
According to this theory, a minimum wage is essentially a binding price floor: a minimum price (in this case, the price of labor, which is the wage) set by the government that is above the market rate.
what happens when imposing this binding price floor is that the supply of labor (workers) becomes higher than the demand (the firms that hire the workers), leading to oversupply. In other words, some workers are left unemployed because there is no demand for them at the price set by the government.
The findings are consistent with this economic theory.
Two investment advisers are comparing performance. One averaged a 19% return and the other a 16% return. However, the beta for the first adviser was 1.5, while that of the second was 1.
Required:
a. If the T-bill rate was 6% and the market return during the period was 14%, which adviser would be the superior stock selector.
b. Can you tell which adviser was a better selector of individual stocks (aside from the issue of general movements in the market)?
c. What if the T-bill rate were 3% and the market return 15%?
Answer: Adviser B is the superior stock selector.
Explanation:
For the comparision between the two investment advisers, the Jenson's Alpha will be utilized.
Jenson's Alpha:
= Portfolio Actual Return - CAPM(Benchmark Portfolio Return)
T Bill Rate(Risk free rate) = 6%
Market return(E(Em) = 14%
Beta of Investment Adviser A = 1.5
Beta of Investment Adviser B = 1
For Adviser A:
CAPM = Risk free return + Beta ( E(Rm) - Risk free return)
CAPM(Benchmark Portfolio) = 6 + 1.5 (14-6)
= 6 + 12
= 18%
Actual Return = 19%
Jenson's Alpha = 19% - 18% = 1%
For Adviser B:
CAPM = Risk free return + Beta ( E(Rm) - Risk free return)
CAPM(Benchmark Portfolio) = 6 + 1(14-6) = 6 + 1(8) = 14%
Actual Return = 16%
Jenson's Alpha = 16% - 14% = 2%
Adviser B is a better selector because he has a larger alpha of 2% compared to Adviser A who has 1%.
T Bill Rate(Risk free rate) = 3%
Market return(E(Rm) = 15%
Beta of Investment Adviser A = 1.5
Beta of Investment Adviser B = 1
For Adviser A:
CAPM = Risk free return + Beta ( E(Rm) - Risk free return)
CAPM(Benchmark Portfolio) = 3 + 1.5 (15-3)
= 3 + 18
= 21%
Actual Return = 19%
Jenson's Alpha = 19% - 21% = -2%
For Adviser B:
CAPM = Risk free return + Beta ( E(Rm) - Risk free return)
CAPM(Benchmark Portfolio) = 3 + 1(15-3) = 3 + 1(12) = 15%
Actual Return = 16%
Jenson's Alpha = 16% - 15% = 1%
Given the changes, Adviser B is still the better selector because he has a larger alpha of 1% compared to Adviser A who has -2%.
Entry for Issuing Materials Materials issued for the current month are as follows: Requisition No. Material Job No. Amount 103 Plastic 400 $ 2,800 104 Steel 402 24,000 105 Glue Indirect 1,620 106 Rubber 403 3,200 107 Titanium 404 31,600 Journalize the entry to record the issuance of materials. For a compound transaction, if an amount box does not require an entry, leave it blank.
Answer:
Details below
Explanation:
For issuance of an entry a single transaction is recorded that is work in process account is debited and materials inventory account is credited. In subsidiary ledgers job numbers are debited. For indirect Materials factory overhead is debited.
The given data is as follows.
Requisition No. Material Job No. Amount
103 Plastic 400 $ 2,800
104 Steel 402 24,000
105 Glue Indirect 1,620
106 Rubber 403 3,200
107 Titanium 404 31,600
The entry for materials requisitioned will be
A compound entry can be passed. In this the subsidiary ledger is not included.
Sr. No Particulars Debit Credit
Work In Process 61600
Factory Overhead 1620
Materials Inventory 63200
The one with a subsidiary ledger would look like this.
Sr. No Particulars Debit Credit
(Subsidiary)
1 Work In Process 61600
( Job No 400) 2800
( Job No 402) 24000
( Job No 403) 3200
( Job No 404) 31600
Factory Overhead 1620
Materials Inventory 63200
This is combined entry but separate entries can be passed as well .
Sr. No Particulars Debit Credit
Work In Process 61600
Materials Inventory 61600
Sr. No Particulars Debit Credit
Factory Overhead 1620
Materials Inventory 1620
Sr. No Particulars Debit Credit
(Subsidiary ledger)
( Job No 400) 2800
( Job No 402) 24000
( Job No 403) 3200
( Job No 404) 31600
Materials Inventory Plastic 2800
Materials Inventory Steel 24000
Materials Inventory Titanium 3200
Materials Inventory Rubber 31600
In each of the entries above materials inventory is credited.
Consider a market characterized by a Herfindahl-Hirschman index of 5,000. One of the firms in this market has a Lerner index of 0.89 and is considering a horizontal merger with a competing firm. Based on this information, it is likely that the U.S. Department of Justice will:
Answer:
reject the merger
Explanation:
Seeing since the market is highly concentrated and the firm's lerner index is also very high, meaning they have a large measure of market power in that industry then it is safe to assume that the U.S. Department of Justice will most likely reject the merger due to this high concentration and the significant power that the proposing firm already has in the market.
As a student in the Principles of Management class of Ama Ghana University, you are expected to have experiential knowledge so that you can be able to solve real life business problems after graduation. To achieve this objective, the 2020 class has been divided into ten groups; and each team works in a management capacity with ten management consulting companies in the Greater Accra Region. San Consulting - the firm that your group works with is a project management company that is into Real Estate construction and management consulting. This firm which has twenty years’ experience in this business is the first choice for all individuals and companies that want quality service. You have on the contrary, observed that many of the management practices have not developed precipitously as situations in the business environment warrant. The accountant confirmed this by saying in the last general meeting that a certain percentage of San’s profit margin is being lost because of this situation. She gave the example that the surveying department spent eight labor hours generating data that had been generated two weeks ago by another unit. Due to the fact that the surveying department did not know that the data had already been created, a substantial effort was wasted and this has been a recurrent problem. In addition, the increase in demand of the services of San’s Consulting has placed significant pressures on the five managers whose duties are not clearly defined. For instance, you have observed that any of these managers perform duties in the operations department as well as any other unit within the firm. They are not able to perform all the functions required of them due to the ineffectiveness of the organizational structure. You and the members of your group are expected to write a report to the top-level management team regarding your analysis of the situation in the firm.
Answer:
Top level management is the most senior executives of the company. To write a report to them about the organizational structure, we mention the summary of the situation and then ask them for their measures.
Explanation:
Ineffectiveness of Organizational Structure
Summary:
The organization structure is not clearly defined, Managers are performing duties in various departments at a time.
Details:
San Consulting is one of the finest consulting firm in the Greater Accra Region. The firm is always a first choice for individuals who want to pursue their career in business. The Organizational structure of San Consulting is not clearly defined. San's profits are falling because management practices are not according to the other competitive organizations. The managers working at San are facing excess workload and pressure for their work. Their job description is not clearly defined and they are forced to work in multiple departments at the same time due to which they are losing focus on their own work.
Conclusion:
The organizational structure needs to be set and every employee should have their defined job role so they are able to complete work with efficiency.
Suppose the market for pizzas is unregulated. That is, pizza prices are free to adjust based on the forces of supply and demand.
If a shortage exists in the pizza market, then the current price must be.............than the equilibrium price. For the market to reach equilibrium, you would expect................
Answer:
Lower
Buyers would offer higher prices
Explanation:
When a shortage occurs when Demand exceeds supply. Excess demand occurs when price is below equilibrium price and as a result suppliers reduce quantity supplied.
As a result of the shortage, buyers would offer higher prices. As a result of the higher prices, the quantity supplied would increase and equilibrium would be restored.
I hope my answer helps you
You want to invite one of the authors of your textbook to come to your school and speak. Name two persuasive points you would include in your letter in order to persuade them to say “yes.”
Initially, you produce 100 boxes of jelly beans per time period. Then a new customer calls and places an additional order for jelly beans, requiring you to increase your output to 101 boxes. She offers you $1.75 for the additional box. Should you produce it?
Answer:
You should produce as long as the marginal cost per additional box is lower than the marginal revenue obtained by the additional box.
In other words, if the marginal cost of producing the 101th box is lower than $1.75, then, you should continue to produce, because revenue will be higher than cost, and a profit will be made as a result.