Berkshire Inc. uses a periodic inventory system. At the end of 2017, it missed counting some inventory items, resulting in an inventory understatement by $610,000. Assume that Berkshire has a 30% income tax rate and that this was the only error it made. If undetected, what is the effect of this error on Berkshire's December 31,2017 balance sheet

Solution :

It is given : loan amount = $12,000

Time to repay = 12 months

Finance charge = $ 632

AT the interest rate, outflow = inflow

The present value of the loan amounts = loan amount

[tex]$1000+632+[1000 \times (PVAF (r ,11))]=12000$[/tex]

[tex]$1000 \times PVAF(r,11)=12000-1632$[/tex]

[tex]$PVAF(r,11)=\frac{10368}{1000}$[/tex]

[tex]$PVAF(r,11)=10.368$[/tex]

Now using the annuity table we get

PVAF(1%, 11)=10.9676

This is equal to 10.368 (approximately)

∴ [tex]$r=1$[/tex] % per month of compounded monthly

So the annual interest rate is :

[tex]$=[(1+0.01)^{12}]-1$[/tex]

[tex]$r=[(1.01)^{12}]-1$[/tex]

[tex]$r = 12.68$[/tex] %

  = 12.70 %

Hence the correct option is (a).

[tex]\text{It is given : loan amount} = $12,000\\\text{Time to repay} = 12 months\text{Finance charge} = $ 632\\\text{At the interest rate, outflow = inflow}\\\text{The present value of the loan amounts = loan amount}[/tex]

[tex]1000 + 632 + [ (P.V (r.11))] = 12,000\\\\1000 \text { x } P.V (r,11) = 12,000 - 1,632\\\\P.V (r.11) = \frac{10,368}{1000}\\\\P.V (r,11) = 10.368[/tex]

[tex]\text{Now using the annuity table we get} \\P.V (0.01, 11) =10.9676\\\text{This is equal to 10.368 (approximately)}[/tex]

[tex]r = 0.01 \text{ per month}\\\text{ Annual Interest rate}:\\r= [(1+0.01}^{12}] - 1\\r= [(1.01}^{12}] - 1\\r= 12.68\\[/tex]

Therefore, the closest option among the following choices is an option (a), i.e., 12.7%

For more information about the annual interest rate, refer below

https://brainly.com/question/16544946

Answer A

Explanation:

Answer:

a. costs to purchase

c. shipping costs

d. costs to prepare for sale

Explanation:

Merchandise inventory is a commodity offered for sale. It is the cost of goods that is readily available at hand which is ready for sale From the options; the Merchandise inventory includes: costs to purchase, shipping costs and costs to prepare for sale.

The remaining options are addressed in the income statement.

Answer:

$242,000

Explanation:

Calculation of the total amount of manufacturing overhead actually incurred:

Particulars                                                    Amount

Indirect Materials                                         $42,000

Indirect labor                                                $101,000

Depreciation On factory equipment           $42,000

Additional Manufacturing Overhead          $57,000

Total Manufacturing Overhead incurred $242,000

Answer:

The function/formula for PV is PV(Rate,Nper,PMT,FV) where Rate = YTM, Nper = Period, PMT = Coupon Payment and FV = Face Value of Bonds.

a. Miller Bond  

Here, Rate = 6%/2 = 3%, Nper = 18*2 = 36, PMT = 1,000*8%*1/2 = $40 and FV = $1,000 [we use 2 since the bond is semi-annual]  

Bond Price = PV(3%,36,40,1000)

Bond Price = $1,218.32

Modigliani Bond

Here, Rate = 8%/2 = 4%, Nper = 18*2 = 36, PMT = 1,000*6%*1/2 = 30 and FV = $1,000 [we use 2 since the bond is semi-annual]

Bond Price = PV(4%,36,30,1000)

Bond Price = $810.92

b.   1 Year from Now

Miller Bond

Here, Rate = 6%/2 = 3%, Nper = 18*2 = 34, PMT = 1,000*8%*1/2 = $40 and FV = $1,000 [we use 2 since the bond is semi-annual]  

Bond Price = PV(3%,34,40,1000)

Bond Price = $1,211.32

Modigliani Bond  

Here, Rate = 8%/2 = 4%, Nper = 17*2 = 34, PMT = 1,000*6%*1/2 = 30 and FV = $1,000 [we use 2 since the bond is semi-annual]

Bond Price = PV(4%,34,30,1000)

Bond Price = $815.89

9 Years from Now  

Miller Bond

Here, Rate = 6%/2 = 3%, Nper = 9*2 = 18, PMT = 1,000*8%*1/2 = $40 and FV = $1,000 [we use 2 since the bond is semi-annual]  

Bond Price = PV(3%,18,40,1000)

Bond Price = $1,137.54

Modigliani Bond

Here, Rate = 8%/2 = 4%, Nper = 9*2 = 18, PMT = 1,000*6%*1/2 = 30 and FV = $1,000 [we use 2 since the bond is semi-annual]

Bond Price = PV(4%,18,30,1000)

Bond Price = $873.41  

13 Years from Now

Miller Bond

Here, Rate = 6%/2 = 3%, Nper = 5*2 = 10, PMT = 1,000*8%*1/2 = $40 and FV = $1,000 [we use 2 since the bond is semi-annual]  

Bond Price = PV(3%,10,40,1000)

Bond Price = $1,085.30

Modigliani Bond

Here, Rate = 8%/2 = 4%, Nper = 5*2 = 10, PMT = 1,000*6%*1/2 = 30 and FV = $1,000 [we use 2 since the bond is semi-annual]

Bond Price = PV(4%,10,30,1000)

Bond Price = $918.89  

17 Years from Now  

Miller Bond

Here, Rate = 6%/2 = 3%, Nper = 1*2 = 2, PMT = 1,000*8%*1/2 = $40 and FV = $1,000 [we use 2 since the bond is semi-annual]  

Bond Price = PV(3%,2,40,1000)

Bond Price = $1,019.13  

Modigliani Bond  

Here, Rate = 8%/2 = 4%, Nper = 1*2 = 2, PMT = 1,000*6%*1/2 = 30 and FV = $1,000 [we use 2 since the bond is semi-annual]

Bond Price = PV(4%,2,30,1000)

Bond Price = $981.14

18 Years  

Miller Bond

Here, Rate = 6%/2 = 3%, Nper = 1*2 = 2, PMT = 1,000*8%*1/2 = $40 and FV = $1,000 [we use 2 since the bond is semi-annual]  

Bond Price = PV(3%,0,40,1000)

Bond Price = $1,000

Modigliani Bond

Here, Rate = 8%/2 = 4%, Nper = 0, PMT = 1,000*6%*1/2 = 30 and FV = $1,000 [we use 2 since the bond is semi-annual]  

Bond Price = PV(4%,0,30,1000)

Bond Price = $1,000

Answer:

1. $15,500

2. $11,700

Explanation:

Given the following information,

the company sold 1,900 units

Total sales were $152,000

Total variable expenses were $79,800

Total fixed expenses were $56,700

The structure for Contribution income margin format is seen below;

Income statement:

Sales

- Total Variable cost

= Contribution margin

- Fixed costs

= Net Operating income

1. Income statement

Sales = $152,000

Less Total variable cost = ($79,800)

Contribution margin = $72,200

Less Total Fixed costs = ($56,700)

Net operating income = $15,500

2. Here, we need to calculate the unitary selling price and the unitary variable cost

Selling price = $152,000 ÷ 1,900 units = $80

Unitary Variable cost = $79,800 ÷ 1,900 units = $42

Therefore,

Sales = 1,800 units × $80

$144,000

Less total variable cost = 1,800 units × $42

$75,600

Contribution margin

$68,400

Less total fixed costs

$56,700

Net operating income

$11,700