Answer:
The values for Blue Sky Drone’s debt management ratio is 0.35
Explanation:
In order to calculate the values for Blue Sky Drone’s debt management ratios we would have to make the following calculation:
debt management ratio=Total Debt / Total Assets
According to the given we have that it reported total debt of $2.50 million.
To calculate the total assets we would have to use the following formula:
Total Asset Turnover Ratio = Net Sales / Total Assets
3.50=$25,000,000/Total Assets
Total Assets=$25,000,000/3.50
Total Assets=$7,142,857
Therefore, debt management ratio=$2,500,000/$7,142,857
debt management ratio=0.35
The values for Blue Sky Drone’s debt management ratio is 0.35
Firm L has debt with a market value of $200,000 and a yield of 9%. The firm's equity has a market value of $300,000, its earnings are growing at a rate of 5%, and its tax rate is 40%. A similar firm with no debt has a cost of equity of 12%. Under the MM extension with growth, what is Firm L's cost of equity?
Answer:
Firm L's cost of equity is 13.2%
Explanation:
In order to calculate Firm L's cost of equity we would have to calculate the following formula:
Firm L's cost of equity=Unlevered cost of equity+D/E*( Unlevered cost of equity-cost of debt)*(1-tax rate)
D/E = debt/equity
D/E = $200,000/$300,000
D/E=0.6666
Therefore, Firm L's cost of equity= 12%+0.6666*(12%-9%)*(1-0.4)
Firm L's cost of equity=13.2%
Firm L's cost of equity is 13.2%
Formaggio Vecchio announced its regular quarterly cash dividend of $0.20 per share. Currently there are one million shares outstanding.
Declaration date: October 24, 2006
Ex-dividend date: November 20, 2006
Record date: November 22, 2006
Payment date: December 15, 2006
On ____ will the stock price change to reflect the value of the dividend;
Formaggioâs stock price at the end of November is expected to be $20. The dividend yield is ____;
Suppose that the marginal tax rate on dividend is 15% and the marginal tax rate on capital gain is 10%, the stock price will fall by _____ after the ex-dividend date;
Suppose that the company decides to use the same amount of cash to buy back shares rather than to issue cash dividends. The company will buy back shares at the market price at the end of November. You currently hold 10000 shares, and you decide to sell 1000 shares during the repurchase. The percentage ownership after the repurchase is ____ ;
Suppose that the company decides to issue a 10% stock dividend instead of a cash dividend. The stock price will fall by ___ due to the dilution
Answer:
A.On Ex-dividend date: November 20, 2006
B.1%
C.$0.19
D. $1.82
Explanation:
1.On Ex-dividend date: November 20, 2006
will the stock price change to reflect the value of the dividend
b. Calculation for Formaggio’s dividend yield
Using this formula
Dividend yield = dividend/share price
Let plug in the formula
= .20/20 = 1%
c. Calculation of how much the stock price is likely to fall
0.20*(1 – 15%) = P*(1 – 10%)
Solve for P = $0.19
d. Calculation of How much is the stock price likely to fall Suppose that the company decides to issue a 10% stock dividend instead of a cash dividend.
$1,000,000 + (1,000,000 * 10%)
$1,000,00+$100,000
= 1,100,000 total shares
Hence,
$20,000,000 / 1,100,000 = $18.18 per share
$20 – 18.18 = $1.82 fall
Your firm (an Australian firm) makes a sale to a Japanese customer. The sale price is 200 million Japanese Yen payable in exactly three months from today. The current exchange rate is AUD/JPY = 90 (i.e., 1 Australian Dollar (AUD) is worth 90 Japanese Yen (JPY)). The current interest rates in Australia and Japan are 3% p.a. and 0.5% p.a., respectively.Given this information, please answer the following questions. Please label your answers according to parts.(a) Given that Australian Dollar is the domestic currency, what is the direct quote of the exchange rate between Australian Dollar and Japanese Yen ? Please round the final answer to five decimal places.(b) What is the theoretical current forward exchange rate quoted directly in terms of Australian Dollar (i.e. JPY/AUD) for delivery three months from today ? Show your input to the formula to arrive at the final answer. Please round the final answer to five decimal places.(c) How can the firm take advantage of any decreases in the exchange rate and also ensure that it receives at least Australian $2 million ? (Hint: Which derivative instrument can be used to achieve this objective?(d) Ignoring the cost of the derivative instrument to be used in part (c), what would be the outcome from hedging if the spot exchange rate in 3 month’s time is (i) AUD/JPY=150 and (ii) AUD/JPY = 50?
Answer:
An Australian Firm Selling to a Japanese Customer
a) Direct Quote of the Exchange Rate between Australian Dollar and Japanese Yen:
A$ 1 = ¥90
Meaning 1 Australian Dollar = 90 Japanese Yen.
Therefore, the price of the goods would be A$ 2,222,222.22222 (¥200 million)/ ¥90
b)Theoretical Current Forward Exchange Rate, quoted in terms of JPY/AUD for delivery in three months:
= Spot Rate x (1 + Japanese Interest Rate) / (1 + Australian Interest Rate) x 360/90
= ¥90 x (1 +0.005) / (1 +0.03) x 360/90 = ¥90 x 1.005/1.03 x 360/90
= ¥351.26214 =A$1
c) The Australian firm can take advantage of any decreases in the exchange rate and also ensure that it receives at least Australian $2 million by entering into a Currency Forwards Contract.
d) If the spot exchange rate in 3 month's time is:
(i) AUD/JPY=150, the outcome of the hedging with a Currency Forwards Contract to get at least A$ 2 million would be the gain of:
Forward Exchange outcome in Australian Dollars = ¥200 million/ ¥150 =
A$ 1,333,333.33333
Hedging outcome minus Forward Exchange outcome
A$2 million - A$ 1,333,333.33333 = A$666,666.66667
(ii) AUD/JPY = 50, the outcome of the hedging with a Currency Forwards Contract to get at least A$ 2 million would be the loss of:
Forward Exchange outcome = in Australian Dollars = ¥200 million/ ¥50 =
A$4 million
Hedging outcome minus Forward Exchange outcome
A$2 million - $4 million = -A$2million
Explanation:
a) Currency forwards contracts and future contracts are used to hedge the currency risk. For example, a company expecting to receive ¥200 million in 90 days, can enter into a forward contract to deliver the ¥200 million and receive equivalent Australian dollars in 90 days at an exchange rate specified today.
b) If A$ 1 = ¥90
Therefore, the price of the goods would be A$ 2,222,222.22222 (¥200 million)/ ¥90 in Australian Dollars.
When the end-of-period spreadsheet is complete, the adjustment columns should have:_________. a) total debits greater than total credits if a net income was earned b) total debits greater than total credits if a net loss was incurred c) total debits are equal to total credits d) total credits greater than total debits if a net income was earned
Answer:
C. Total debits are equal to total credits
Explanation:
When the end-of-period spreadsheet is complete, the adjustment columns should have:
Total debits equal to total credits.
When this happens, the trial balance is considered to be balanced.
If revenues are greater than expenses, then income statement will give a credit balance. If expenses are bigger than revenues, your income statement will show a debit balance.
On October 10, the stockholders’ equity of Sherman Systems appears as follows. Common stock–$10 par value, 74,000 shares authorized, issued, and outstanding $ 740,000 Paid-in capital in excess of par value, common stock 226,000 Retained earnings 880,000 Total stockholders’ equity $ 1,846,000 1. Prepare journal entries to record the following transactions for Sherman Systems. Purchased 5,200 shares of its own common stock at $27 per share on October 11. Sold 1,050 treasury shares on November 1 for $33 cash per share. Sold all remaining treasury shares on November 25 for $22 cash per share. 2. Prepare the stockholders' equity section after the October 11 treasury stock purchase.
Answer:
1, Journal entries
Date Account and explanation Debi$ Credit$
Treasury stock (5200*27) 140,400
Cash 140,400
(To record purchase treasury stock)
Cash (1,050*33) 34,650
Paid in capital from sale of treasury stock 6,300
Treasury stock (1,050*27) 28,350
(To record sale of treasury stock)
Cash (4,150*22) 91,300
Paid in capital from sale of 6,300
treasury stock
Retained earnings 14,450
Treasury stock (4,150*27) 112,050
(To record sale of treasury stock)
2. Revised equity section
Contributed capital
Common Stock 740,000
Paid in capital in excess of 226,000
par value-Common Stock
Total paid in capital 966,000
Retained earnings 880,000
Total 1,846,000
Less: Treasury stock (140,400)
Total Stockholder's equity $1,705,600
True or False: If a firm changes its credit policy and allows customers to pay in 90 days instead of 60 days, and everything else remains the same, the net cash flow in the next quarter is likely to decrease.
Answer:
True
Explanation:
by increasing the time customers can pay to 90 days, the amount of cash inflows is likely to reduce. thus, the net cash flow in the next quarter is likely to decrease.
If a small electric automobile manufacturer is able to gain the social return generated by its electric motor, its demand for financial capital would
Answer: shift to the left
Explanation:
The social return helps in comparing the value of benefits and the costs to achieving the benefits. The social return is the ratio of net present value of the benefits in comparison to the net present value of the investment or the costs to getting the benefits.
In this case, if a small electric automobile manufacturer is able to gain the social return generated by its electric motor, it would decrease the demand for financial capital which simply means that the demand for financial capital will shift to the left. This shift to the left is as a result of the gain in its social return gotten by the electric motor.
You will pay $7,000 now to purchase a perpetuity which will pay you and your heirs $340 at the end of each year, forever. What is the rate of return on this perpetuity?
Answer:
4.86%
Explanation:
Interest rate of a perpetuity = amount / present value
$340 / $7,000 = 0.048571 = 4.86%
I hope my answer helps you
Answer:
4.86%
Explanation:
Interest rate of a perpetuity = amount / present value
$340 / $7,000 = 0.048571 = 4.86%
Sheboygan Co. purchased a new vehicle at a cost of $42,000 on July 1. The vehicle is estimated to have a useful life of 6 years and a salvage value of $3,000. The company uses the straight-line method of depreciation. How much depreciation expense will be recorded for the vehicle during the first year ended December 31?
Answer:
The depreciation at the end of first year = $3250
Explanation:
The cost of a new vehicle on July 1st = $42000
The estimated useful life of vehicle = 6 years
The salvage value of vehicle = $3000
It is given that the company uses the straight-line method for depreciation so we have to calculate the depreciation by subtracting the salvage value from its cost and dividing by years.
Depreciation = ($42000 – $3000) / 6 = $6500
So annual depreciation is $6500.
Therefore depreciation at the end of the first yThe depreciation at the end of first year = $3250ear that is for 6 months = $3250
An estimate of the money and paperwork spent complying with environmental regulations could be compared to the advantages of cleaning up pollution. This method of determining the value of the environment is known as __________.
Answer:
Contingent valuation.
Explanation:
An estimate of the money and paperwork spent complying with environmental regulations could be compared to the advantages of cleaning up pollution. This method of determining the value of the environment is known as contingent valuation.
Contingent valuation can be defined as a survey based method which is typically used to determine the economic value of a non-market resource such as the impact of pollution and preservation of the environment.
This ultimately implies that, contingent valuation is used for the valuation of resources and goods that are not being traded in marketplaces. Therefore, it is mostly related to the environmental and natural resources found around us on planet Earth.
Generally, this environmental and natural resources usually do not have a market price but various individuals derive utility or satisfaction from them.
Hence, the contingent valuation method is aimed at seeking people's opinions by asking questions on how much money they're willing to pay or receive for the preservation of an environmental resource.
For instance, many people derive pleasure from visiting tourist attractions sites such as zoo, recreational facilities, parks etc and would be willing to pay for this natural resources.
Often in business the greater the risk, the __________.
Answer:
greater the potential reward
Explanation:
On October 1, Vaughn's Carpet Service borrows $349000 from First National Bank on a 4-month, $349000, 9% note. What entry must Vaughn's Carpet Service make on December 31 before financial statements are prepared
Answer:
Dr Notes Payable 349,000
Dr Interest Payable 10,470
Cr Cash 359,470
Explanation:
Preparation of Vaughn's Carpet Service Journal entry
Since we were told that Vaughn's Carpet Service borrows the amount of $349,000 on 1st October from First National Bank based on a 4-month, $349,000, 9% note the transaction will be recorded as :
Dr Notes Payable 349,000
Dr Interest Payable 10,470
Cr Cash 359,470
$349,000 +($349,000 *.09* 4/12)
=$349,000+10,470
=$359,,470
addresses unknown parameters in the real world that parallel descriptive measures of very large population? A. The sample mean / B. Statistic Inference C. The central Limit Theorem
Answer:
The answer is "Option B".
Explanation:
Inferential statistics was its process through which data collection is used to conclude the property or even an implicit wave function. Its analysis infers these same features of inhabitants. Its purpose is to use statistical strategies to determine important assumptions regarding sample size, and other choices were wrong which can be defined as follows:
In option A, it defines the average of the given values, that's why it is wrong.In option C, It is used to0 describes a number of samples that's why it is wrong.The specific identification method (select all that apply): matches each unit of inventory with its actual cost is not an acceptable method of accounting would be beneficial to a company that makes inexpensive products with high sales volume would be beneficial to a company that makes fine jewelry
Answer:
The specific identification methoda) matches each unit of inventory with its actual cost
d) would be beneficial to a company that makes fine jewelry
Explanation:
The specific identification inventory valuation method is one of the inventory valuation method allowed by U.S. GAAP. The other allowed methods are weighted average; and first in, first out (FIFO). The specific identification method identifies every item kept in inventory and its price and tracks it from purchase to resale. Some types of businesses that use the specific identification method are jewelry companies and stores, car dealerships, art galleries, and furniture stores, who can easily identify each item and track the cost and price respectively.
The specific identification method of costing inventories is used when finding out the cost of the ending inventory.
Correct option is A and D.
The specific identification method is "matches each unit of inventory with its actual cost and would be beneficial to a company that makes fine jewelry."
One of the inventory methods permitted by US GAAP is the particular identification inventory valuation method. Weighted average and first in, first out are two alternative strategies that can be used. Every item in inventory, as well as its price, is identified and tracked using this system, from purchase through resale.
Jewelry companies and stores, auto dealerships, art galleries, and furniture stores are just a few examples of enterprises that use the particular identification method to quickly identify each item and track the cost and pricing.
To know more about specific identification method, refer to the link:
https://brainly.com/question/25056275
Determine the missing 2022 change percentages for (a) Intangible assets and (b) Total assets in the horizontal analysis for Mort Company
Answer:
The information that the question is referring to is this:
Assets 2017 2016 Amount Percent
Current Assets $900,000 $800,000 $100,000 12.50%
Plant Assets $475,000 $550,000 ($75,000) (13.6%)
Intangible Assets $300,000 $225,000 $75,000
Total Assets $1,675,000 $1,575,000 $100,000
Explanation:
Change in intangible assets
75,000 x 100 / 225,000 = 33.3%
Change in total assets
100,000 x 100 / 1,575,000 = 6.3%
If the factory overhead is underapplied, then the adjusting journal entry to close the factory overhead account includes a: (Check all that apply.)\
Answer:
Debit to cost of goods sold and credit to factory overhead
Explanation:
Here we are interested in knowing the appropriate journal entry when the factory overhead is under applied.
What happens to the factory overhead journal in this case is that the we should have an adjusting journal entry.
The adjusting journal entry here is that we debit cost of goods sold and credit factory overhead
Initially, Eleanor earns a salary of $200 per year and Darnell earns a salary of $100 per year. Eleanor lends Darnell $50 for one year at an annual interest rate of 16% with the expectation that the rate of inflation will be 5% during the one-year life of the loan. At the end of the year, Darnell makes good on the loan by paying Eleanor $58. Consider how the loan repayment affects Eleanor and Darnell under the following scenarios. Scenario 1: Suppose all prices and salaries rise by 5% (as expected) over the course of the year. In the following table, find Eleanor's and Darnell's new salaries after the 5% increase, and then calculate the $58 payment as a percentage of their new salaries. (Hint: Remember that Eleanor's salary is her income from work and that it does not include the loan payment from Darnell.) Value of Eleanor's new salary after one year The $58 payment as a percentage of Eleanor's new salary Value of Darnell's new salary after one year The $58 payment as a percentage of Darnell's new salary Scenario 2: Consider an unanticipated increase in the rate of inflation. The rise in prices and salaries turns out to be 14% over the course of the year rather than 5%. In the following table, find Eleanor's and Darnell's new salaries after the 14% increase, and then calculate the $58 payment as a percentage of their new salaries. Value of Eleanor's new salary after one year The $58 payment as a percentage of Eleanor's new salary Value of Darnell's new salary after one year The $58 payment as a percentage of Darnell's new salary An unanticipated increase in the rate of inflation benefits______ and harms_____ .
Answer:
Scenario 1: Suppose all prices and salaries rise by 5% (as expected) over the course of the year. In the following table, find Eleanor's and Darnell's new salaries after the 5% increase, and then calculate the $58 payment as a percentage of their new salaries.
Eleanor's new salary = $200 x 1.05 = $210
Darnell's new salary = $100 x 1.05 = $105
the $58 payment represents:
$58 / $210 = 27.62% of Eleanor's new salary
$58 / $105 = 55.24% of Darnell's new salary
Scenario 2: Consider an unanticipated increase in the rate of inflation. The rise in prices and salaries turns out to be 14% over the course of the year rather than 5%. In the following table, find Eleanor's and Darnell's new salaries after the 14% increase, and then calculate the $58 payment as a percentage of their new salaries.
Eleanor's new salary = $200 x 1.14 = $228
Darnell's new salary = $100 x 1.14 = $114
the $58 payment represents:
$58 / $228 = 25.44% of Eleanor's new salary
$58 / $114 = 50.88% of Darnell's new salary
An unanticipated increase in the rate of inflation benefits Darnell and harms Eleanor.
Gold standard required countries to A. keep the supply of foreign exchange less than their domestic money supply. B. restrict the demand for foreign goods. C. keep the supply of their domestic money constant. D. keep the supply of their domestic money fixed in proportion to their gold holdings.
Answer:
D.) Keep the supply of there domestic money fixed in proportion to their gold holdings.
Explanation:
The Gold Standard was a monetary system under which countries fixed the value of their money in terms of a specified amount of gold. With the gold standard, countries agreed to convert the paper money into a fixed amount of gold.
Hope this helps you out! : )
Julie Whiteweiler made $930 this week. Only social security (fully taxable) and federal income taxes attach to her pay. Whiteweiler contributes $100 each week to her company's 401(k) plan and has $25 put into her health savings account (nonqualified) each week. Her employer matches this $25 each week.
Required:
Determine Whiteweiler's take-home pay if she is single and claims 4 allowances (use the wage-bracket method).
Answer:
Step 1: Calculate FICA (OASDI & HI):
Total wage subjected to FICA is $930. Why? Contributions to 401K is only exempted from Fed. Income Tax Withholding (FIT) not FICA. As for HSA contrib., it is exempted for both FICA and FIT. However, the plan is non-qualified, which means that $25 contributed by employee is taxable for both. The $25 matching from employer for HSA is excluded from income and income taxes.
OASDI RATE 2012: 4.2% of $930; therefore, $39.06
HI RATE 2012: 1.45% of $930; therefore, $13.49
TOTAL FICA TAX: $52.55
STEP 2: Calculate FIT:
Total earnings subjected to FIT is ($930-100)= $830. Why? $100 contributions to 401k is exempted from FIT. HSA contrib. is unqualified.; therefore, contributions from employee is taxable. Using Wage Bracket Method 2012, the FIT is $89.
STEP 3: Getting the Take-Home Pay answer:
($930-100(401k))-25(HSA:Employee)-$52.55(FICA)-89(FIT)=$663.45
Explanation:
During the month, merchandise is sold for $80,500 cash and for $119,000 on account. The cost of merchandise sold is $101,500. What is the amount of revenue? a.$199,500 b.$80,500 c.$119,000 d.$101,500
Answer:
Value of revenue = $98,000
Explanation:
Here, we are interested in calculating the revenue.
Firstly, we add the sales on cash with the sales on account.
Mathematically that would be;
80,500 + 119,000 = $199,500
The value of the revenue = Amount in sales - cost of merchandise = 199,500-101,500 = $98,000
Examine the equal opportunity laws of another country, not the United States. Are the laws in other countries as much a concern for HRM specialists as they are in the United States?
Answer:
The equal opportunity laws of another country, not the United States is discussed below in details.
Explanation:
An equal opportunity system is a certificate that declares what measures a company takes to eliminate and stop discrimination in the workplace.
The United Kingdom employment equality law is an organization of law that legislates against prejudice-based activities in the workplace.
The prime legislation is the Equality Act 2010, which condemns discrimination in passage to education, government services, private services, and goods, or assumptions in addition to employment.
True or false: The plantwide overhead rate method uses multiple rates to allocate overhead costs to products.
Answer:
Flase.
Explanation:
The plantwide overhead rate method uses multiple rates to allocate overhead costs to products.
False.
As the name indicates, the plantwide overhead rate uses a single rate to allocate overhead. When the predetermined overhead rate is calculated using the activity base method, you have as many predetermined rates as activities.
To calculate a plant-wide overhead rate, you need to use the following formula:
Predetermined manufacturing overhead rate= total estimated overhead costs for the period/ total amount of allocation base
Explain how the Federal Reserve Board can increase or decrease the money supply using each of the following tools: reserve requirements, open-market activities, and discount rates
Answer:
Reserve requirements – Reserve requirement increases to decrease the money supply or vice versa.
Open-market activities – the Fed sell the securities to reduce money supply or purchase it to increase the money supply.
Discount rates – Decrease the discount rate to increase the money supply or vice versa.
Explanation:
The Federal Reserve increases or decreases the money supply by using various tools. So in the case of the reserve requirement, the bank increases the percentage of reserve requirement if the Fed wants to decrease the money supply and to increase the money supply it reduces the reserve requirements. In the case of open market operations, the Fed sells securities and bonds in the market in order to reduce the supply of money or to decrease the supply of money it buys the securities from the market.
In the case of a discount rate, the Fed reduces the discount rate to increase the money supply because reducing the discount rate will induce the banks to give more loans. But to decrease the money supply, the Fed increases the discount rate because an increase in the discount rate reduces the ability of banks to give loans.
3. Problems and Applications Q3 This chapter discusses companies that are oligopolists in the market for the goods they sell. Many of the same ideas apply to companies that are oligopolists in the market for the inputs they buy. If sellers who are oligopolists try to increase the price of goods they sell, the goal of buyers who are oligopolists is to try to decrease the prices of goods they buy. Major league baseball team owners have an oligopoly in the market for baseball players. The owners' goal is to keep players' salaries . True or False: This goal is difficult to achieve because teams can attract better players with higher salaries. True False Baseball players went on strike in 1994 because they would not accept the salary cap that the owners wanted to impose. True or False: The owners felt the need for a salary cap to dissolve collusive behavior over salaries. True False
Answer:
Oligopolistic Companies:
a) The owners' goal is to keep players' salaries capped. TRUE
b) Goal is difficult to achieve: TRUE
c) 1994 Baseball players' strike: TRUE
d) Owners needed salary cap to dissolve collusive behavior over salaries: TRUE.
Explanation:
a) According to the Economist, Oligopoly is "a market situation in which each of a few producers affects but does not control the market. Each producer must consider the effect of a price change on the actions of the other producers." There is little competition among the players as each tries to control the market with price cuts and quantity reductions. For example, a cut in price by one may lead to an equal reduction by the others, with the result that each firm will retain approximately the same share of the market as before but at a lowered profit level.
b) According to wikipedia.com, "The 1994–95 Major League Baseball strike was the eighth work stoppage in baseball history, as well as the fourth in-season work stoppage in 22 years. Due to the strike, both the 1994 and 1995 seasons were not played to a complete 162 games; the strike was called after most teams had played at least 113 games in 1994." The strike ended the next April, after 232 days, when the players had successfully resisted the salary cap.
Reporting Net Sales with Credit Sales, Sales Discounts, and Credit Card Sales
The following transactions were selected from the records of Ocean View Company:
July 12 Sold merchandise to Customer R, who charge d the $3,000 purchase on his
Visa creditCard. Visa charges OceanView a 2 percent credit card fee.
15. Sold merchandise to Customer S at an invoice price of $9,000; terms 3/10, n/30.
20. Sold merchandise to Customer T at an invoice price of $4,000; terms 3/10, n/30.
23 Collected payment from Customer S from July 15sale.
Aug. 25 Collected payment from Customer T from July 20 sale.
Required:
Assuming that Sales Discounts und Credit Card Discount s arc treated as contra-
revenues. compute net sales for the two months ended August 31.
Answer:
Net sales $15,670
Explanation:
Computation of thenet sales for the two months ended August 31.
Sales revenue:
Sales Revenue
July 12 Merchandise Sold to Customer R $3,000
July 20 Merchandise Sold to Customer S $4,000
July 15 Merchandise Sold to Customer T $9,000
Total ($3,000+$4,000+$9,000) $16,000
Less:Sales discounts (270)
($9,000 collected from S x 3%)
Credit card fee ($60)
($3,000 from R x 2%)
Net sales $15,670
Therefore the net sales for the two months ended August 31 will be $15,670
Trade Mart has recently had lackluster sales. The rate of inventory turnover has? dropped, and the merchandise is gathering dust. At the same time, competition has forced AquariumAquarium's suppliers to lower the prices that Aquarium will pay when it replaces its inventory. It is now December 31, 2016, and the current replacement cost Aquarium's ending inventory is $75,000 below what Aquarium actually paid for the goods, which was $200,000.
Before any adjustments at the end of the? period, the Cost of Goods Sold account has a balance of $$820,000.
Requirements:
a. What accounting action should Aquarium take in this situation?
b. Give any journal entry required.
c. At what amount should Aquarium report Inventory on the balance? sheet?
d. At what amount should the company report Cost of Goods Sold on the income? statement?
e. Discuss the accounting principle or concept that is most relevant to this situation.
Answer:
a. What accounting action should Aquarium take in this situation?
the balance of inventory account should decrease to match the replacement cost.
b. Give any journal entry required.
Dr Cost of goods sold 75,000
Cr Inventory 75,000
c. At what amount should Aquarium report Inventory on the balance? sheet?
Inventory = $200,000 - $75,000 = $125,000
d. At what amount should the company report Cost of Goods Sold on the income statement?
Cost of goods sold = $820,000 + $75,000 = $895,000
e. Discuss the accounting principle or concept that is most relevant to this situation.
US GAAP states that companies must use the lower of cost or market rule, which means that inventory must be recognized at the lowest cost either original purchase cost or market value.
Assume that you are 30 years old today, and that you are planning on retirement at age 65. You expect your salary to be $42,000 one year from now and you also expect your salary to increase at a rate of 5% per year as long as you work. To save for your retirement, you plan on making annual contributions to a retirement account. Your first contribution will be made on your 31st birthday and will be 8% of this year's salary. Likewise, you expect to deposit 8% of your salary each year until you reach age 65. Assume that the rate of interest is 9%. The present value (PV) (at age 30) of your retirement savings is closest to
Answer:
$50,855.62
Explanation:
I prepared an excel spreadsheet to determine the yearly contributions to the plan and their future value.
once you reach 65 years, your retirement account should have $1,038,165. Now we need to determine the present value = $1,038,165 / (1 + 9%)³⁵ = $50,855.62
Altoona Corporation has two divisions, Hinges and Doors, which are both organized as profit centers; the Hinge Division produces and sells hinges to the Door Division and to outside customers. The Hinge Division has total costs of $43, $26 of which are variable. The Hinge Division is operating significantly below capacity and sells the hinges for $58.The Door Division has received an offer from an outsider vendor to supply all the hinges it needs (32,000 hinges) at a cost of $53. The manager of the Door Division is considering the offer but wants to approach the Hinge Division first.What would be the profit impact to Altoona Corporation as a whole if the Door Division purchased the 32,000 hinges it needs from the outside vendor for $53?a. No change in profit to Altoona.b. $160,000 increase in profits.c. $160,000 decrease in profits.d. $864,000 decrease in profits.
Answer:
d. $864,000 decrease in profits.
Explanation:
Hinge Division's total cost per unit:
variable $26
fixed $17
total $43
sales price $58
contribution margin $32
profit margin $15
Alternative A Alternative B Differential
intercompany outside amount
money paid to $0 $1,696,000 ($1,696,000)
outside vendor
variable costs $832,000 $0 $832,000
fixed costs $544,000 $544,000 $0
total costs $1,376,000 $2,240,000 ($864,000)
If the hinges are purchased form an outside vendor, the corporation's total profits will decrease by $864,000.
3. If a balance sheet were prepared for Pala Medical Co. on June 30, 20Y1, what amount should be reported as cash?
Complete Question:
The cash account for Pala Medical Co. at June 30, 20Y1, indicated a balance of $166,436. The bank statement indicated a balance of $195,688 on June 30, 20Y1. Comparing the bank statement and the accompanying canceled checks and memos with the records revealed the following reconciling items:
a. Checks outstanding totaled $19,427.
b. A deposit of $12,300, representing receipts of June 30, had been made too late to appear on the bank statement.
c. The bank collected $26,500 on a $25,000 note, including interest of $1,500.
d. A check for $4,000 returned with the statement had been incorrectly recorded by Pala Medical Co. as $400. The check was for the payment of an obligation to Skyline Supply Co. for a purchase on account.
e. A check drawn for $195 had been erroneously charged by the bank as $915.
f. Bank service charges for June amounted to $55.
Answer:
Pala Medical Co.
Cash amount in the balance sheet = $189,281
Explanation:
a) Calculations:
Adjusted Cash balance at June 30, 20Y1
Cash balance $166,436
c) Note received by bank 25,000
c) Interest on the note 1,500
d) Returned check (3,600)
e) Bank charges (55)
Adjusted cash balance $189,281
b) Balance as per bank statement = $195,688
a. Checks outstanding totaled ($19,427)
b. A deposit of $12,300
e. Overstated cheque 720
Adjusted bank statement balance $189,281
c) Preparing a bank reconciliation helps to identify discrepancies between the cash book balance of Pala Medical Co and the company's bank statement balance. After the necessary adjustments, the two balances always agree and the adjusted figure is taken to the balance sheet.
As an economist working at the International Monetary Fund, you are given the following data for Burundi: observed per capita GDP, relative to the United States, is 0.01; predicted per capita GDP, given by , is 0.18. What is total factor productivity
Answer: 0.056
Explanation:
Total factor productivity is the ratio of the aggregate that is, the total output to the aggregate inputs. Total factor productivity is used to measure economic efficiency of a country.
From the question, we are informed that Burundi's observed per capita GDP, relative to the United States, is 0.01 and the predicted per capita GDP is 0.18. Then, the total factor productivity will be:
= 0.01/0.18
= 0.056