Bob lives in San Diego and runs a business that sells boats. In an average year, he receives $793,000 from selling boats. Of this sales revenue, he must pay the manufacturer a wholesale cost of $430,000; he also pays wages and utility bills totaling $301,000. He owns his showroom; if he chooses to rent it out, he will receive $15,000 in rent per year. Assume that the value of this showroom does not depreciate over the year. Also, if Bob does not operate this boat business, he can work as a financial advisor, receive an annual salary of $50,000 with no additional monetary costs, and rent out his showroom at the $15,000 per year rate. No other costs are incurred in running this boat business.

Identify each of Charles's costs in the following table as either an implicit cost or an explicit cost of selling guitars.

a. The wages and utility bills that Charles pays
b. The wholesale cost for the guitars that Charles pays the manufacturer
c. The rental income Charles could receive if he chose to rent out his showroom
d. The salary Charles could earn if he worked as a financial advisor

Answer:

Explanation:

Explicit Costs refers to costs that involve an immediate outlay of cash from the business and it is recorded and reported to the management.

Implicit Cost refer to the cost which the company had foregone while employing the alternative course of action and is neither recorded nor reported to the management of the company.

a. The wages and utility bills that Charles pays

Identification: Explicit Cost

b. The wholesale cost for the guitars that Charles pays the manufacturer

Identification: Explicit Cost

c. The rental income Charles could receive if he chose to rent out his showroom

Identification:  Implicit Cost

d. The salary Charles could earn if he worked as a financial advisor

Identification:  Implicit Cost

When the government imposes an excise tax in a market with a downward-sloping demand curve and an upward-sloping supply curve: _________.
a. consumer surplus falls, producer surplus falls, and a deadweight loss occurs.
b. consumer surplus falls.
c. producer surplus falls.
d. a deadweight loss occurs.

A(n) _____ is a situation in which moral implications shape an individual’s decisions.
ethical issue
revelatory issue
moral dilemma
situational imperative

Lilliput is a country that has closed borders and does not import or export any goods or services; hence, they do not worry about trade with other countries. Total spending for the federal government of Lilliput for the last fiscal year was $24.19 billion. The country collected $22.9 billion in taxes during this same fiscal year. Assume government transfers were zero. Based on this information, what is Lilliput's budget balance?

A bank currently has $150 million in "hot money" deposits against which it wants to hold an 80 percent reserve and $90 million in vulnerable deposits against which it wants to hold a 30 percent reserve. It also has $45 million in stable deposits against which it wants to hold a 5 percent reserve. Legal reserves for the bank are 5 percent of all deposits. What is the bank's liability liquidity reserve?

Chelsea’s goal is to someday have her own restaurant. Taking cooking classes in high school would help prepare Chelsea for her future career.

A.
True

B.
False

On May 7, Bergan Company purchased on account 10,000 units of raw materials at $8 per unit. During May, raw materials were requisitioned for production as follows: 7,500 units for Job 200 at $8 per unit and 1,480 units for Job 305 at $5 per unit.

Required:
Journalize the entry on May 7 to record the purchase

A building with an appraisal value of $136,787 is made available at an offer price of $157,859. The purchaser acquires the property for $34,148 in cash, a 90-day note payable for $27,610, and a mortgage amounting to $58,126. The cost basis recorded in the buyer's accounting records to recognize this purchase is

A sales manager, Dev, is facing an ethical situation wherein his bicycle company that specializes in mountain bikes sold a bicycle with a defective component. If he informs the customer and issues a recall, it would cost him a substantial amount of money. If the bike malfunctions, there is a very small chance that it could cause serious injury to a cyclist who might use it on rough terrain. He decides to use the egoism approach to decision making and remain silent about the defect, because he:________.
A) is motivated by self-interest.
B) is looking to accomplish the greatest good for the greatest number of people.
C) wants to first consult with his insurer.
D) is motivated to protect the interests of his employees.
E) wants to first consult with others whom he respects.

A sole proprietor in the 37% tax bracket pays her 16-year-old son a reasonable salary of $14,000 for services performed for the proprietorship. Compute the family's income tax savings if the son has no other income and takes a $12,400 standard deduction.

Consider two $10,000 face value corporate bonds. Bond A is currently selling for $9,980 and matures in 15 years. The Bond B sells for $9,350 and matures in 3 years. a) Calculate the current yield as a percentage to 2 decimal places for both bonds if both have a coupon rate equal to 5%. Bond A % Bond B % b) Calculate the yield to maturity as a percentage to 2 decimal places for both bonds if both have a coupon rate equal to 5%. Bond A % Bond B % Which current yield is a better approximation of the yield to maturity, A or B

Longview Manufacturing Company manufactures two products (I and II). The overhead costs ($60,500) have been divided into three cost pools that use the following activity drivers:
Number of Labor
Product Number of Orders Transactions Labor Hours
I 15 50 500
II 10 150 2,000
Cost per pool $12,500 $8,000 $40,000
If the number of labor hours is used to assign labor costs from the cost pool, determine the amount of overhead cost to be assigned to Product I.
a. $8,000.
b. $58,000.
c. $9,600.
d. $32,000.

Closing Entries After the accounts have been adjusted at April 30, the end of the fiscal year, the following balances were taken from the ledger of Twin Trees Landscaping Co.: Oscar Killingsworth, Capital $503,900 Oscar Killingsworth, Drawing 8,200 Fees Earned 279,100 Wages Expense 221,600 Rent Expense 43,800 Supplies Expense 9,000 Miscellaneous Expense 10,200 Journalize the two entries required to close the accounts. If an amount box does not require an entry, leave it blank.

Terrace Corporation makes an industrial cleaner in two sequential departments, Compounding and Drying. All material is added at the beginning of the process in the Compounding Department. Conversion costs are added evenly throughout each process. Terrace uses the weighted average method of process costing. In the Compounding Department, beginning work in process was 3,600 pounds (60% processed), 61,200 pounds were started, 57,600 pounds were transferred out, and ending work in process was 60% processed.
Calculate equivalent units for the Compounding Department for August 2016.
Terrace Corporation
Flow of Units and Equivalent Units Calculation, August 2016
Equivalent Units
% WorkConversion % Work done Direct Materials Done Costs
Complete/Transferred
Ending Inventory
Total

Howard Co.'s 2016 income from continuing operations before income taxes was $280,000. Howard Co. reported before-tax income on discontinued operations of $50,000. All tax items are subject to a 40% tax rate. In its income statement for 2016, Howard Co. would show which of the following line-item amounts for net income and income tax expense:

a. $213,600 and $117,600 respectively.
b. $356,000 and $318,800 respectively.
c. $117,600 and $213,600 respectively.
d. $232,000 and $269,200 respectively.

The following December 31, 2021, fiscal year-end account balance information is available for the Stonebridge Corporation:
Cash and cash equivalents $5,800
Accounts receivable (net) 28,000
Inventory 68,000
Property, plant, and equipment (net) 160,000
Accounts payable 47,000
Salaries payable 19,000
Paid-in capital 140,000
The only asset not listed is short-term investments. The only liabilities not listed are $38,000 notes payable due in two years and related accrued interest of $1,000 due in four months. The current ratio at year-end is 1.6:1.
Required:
Determine the following at December 31, 2021:
1. Total current assets.
2. Short-term investments.
3. Retained earnings.

Two years ago, Kimberly became a 30 percent partner in the KST Partnership with a contribution of investment land with a $12,750 basis and a $19,850 fair market value. On January 2 of this year, Kimberly has a $18,300 basis in her partnership interest, and none of her pre-contribution gain has been recognized. On January 2 Kimberly receives an operating distribution of a tract of land (not the contributed land) with a $15,575 basis and an $22,675 fair market value.
a. What is the amount and character of Kimberly's recognized gain or loss on the distribution?
b. What is Kimberly’s remaining basis in KST after the distribution?
c. What is KST's basis in the land Kimberly contributed after Kimberly recevies the distribution?

Purchases of merchandise on account were $300,000. b. The cost of freight to receive the inventory was $10,000. This was paid in cash. c. Debra returned $5,000 of the merchandise due to an ordering error. Debra received a full credit for the return. d. Debra paid the remaining balance for the merchandise. Calculate the dollar amount that Debra will have in inventory at the end of the month. Assume Debra uses the perpetual inventory system and there were no sales.

Consider the simple 3-station assembly line illustrated below, where the 2 machines at Station 1 are parallel, i.e., the product only needs to go through one of the 2 machines before proceeding to Station 2. Station 1 Machine A has a capacity of 3 units per hour; Station 1 Machine B has a capacity of 3 units per hour; Station 2 has a capacity of 5 units per hour; Station 3 has a capacity of 10 units per hour What is the bottleneck time of this process

Presented below is information for Kingbird Company.
1. Beginning-of-the-year Accounts Receivable balance was $16,600.
2. Net sales (all on account) for the year were $102,400. Kingbird does not offer cash discounts.
3. Collections on accounts receivable during the year were $90,000.
a. Prepare (summary) journal entries to record the items noted above. (If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when the amount is entered. Do not indent manually.) No. Account Titles and Explanation Debit Credit 1. 2. 3. SHOW LIST OF ACCOUNTS
b. Compute Kingbird's accounts receivable turnover and days to collect receivables for the year. The company does not believe it will have any bad debts. (Round answers to 2 decimal places, e.g. 4.57.) Accounts receivable turnover times Days to collect accounts receivable days Use the results to analyze Kingbird's liquidity. The turnover ratio last year was 8.1. This is a trend in liquidity.

Lopez Corporation incurred the following costs while manufacturing its product.

Materials used in product $122,200 Advertising expense $49,900
Depreciation on plant 69,200 Property taxes on plant 17,600
Property taxes on store 8,590 Delivery expense 28,300
Labor costs of assembly-line workers 113,100 Sales commissions 44,400
Factory supplies used 34,000 Salaries paid to sales clerks 51,300

Work in process inventory was $13,300 at January 1 and $17,200 at December 31. Finished goods inventory was $68,800 at January 1 and $47,900 at December 31.

Required:
a. Compute cost of goods manufactured.
b. Compute cost of goods sold.

Company XYZ forecasts expanding markets, see many opportunities for growth, and adopts a growth strategy. It has invested heavily into a highly efficient production process. Administratively, it has tight control over costs and lots of rules and regulations to promote efficiency. According to the adaptation model of strategy, company XYZ:_________
a. is a strategie failure
b. as prospector
c. as defender
d. as an analyzer

he Coase theorem will apply only if the amount of compensation that must be made to the damaged party is small. an individual who is not affected by the externality can negotiate a settlement between the parties imposing the externality and the parties that are harmed by the externality. the courts can be used to determine the amount of compensation that must be made to the damaged party. the number of people involved is small.

Bluestone Company had three intangible assets at the end of the current year:
a. A patent purchased this year from Miller Co. on January 1 for a cash cost of $3,200. When purchased, the patent had an estimated life of 16 years.
b. A trademark was registered with the federal government for $7,500. Management estimated that the trademark could be worth as much as $190,000 because it has an indefinite life.
c. Computer licensing rights were purchased this year on January 1 for $70,000. The rights are expected to have a five-year useful life to the company.
Required:
1. Compute the acquisition cost of each intangible asset.
Acquisition Cost
Patent
Trademark
0
2. Compute the amortization of each intangible for the current year ended December 31. (Do not round intermediate calculations.)
Amortization Expenses
Patent
Trademark
0
3. Show how these assets and any related expenses should be reported on the balance sheet and income statement for the current year.
BLUESTONE COMPANY
Income Statement (partial)
For the year ending December 31
BLUESTONE COMPANY
Balance sheet (partial)
At December 31
Intangibles:

Isaac Inc. began operations in January 2021. For some property sales, Isaac recognizes income in the period of sale for financial reporting purposes. However, for income tax purposes, Isaac recognizes income when it collects cash from the buyer's installment payments. In 2021, Isaac had $621 million in sales of this type. Scheduled collections for these sales are as follows:
2021 $61 million
2022 121 million
2023 131 million
2024 152 million
2025 156 million
$621 million
Assume that Isaac has a 25% income tax rate and that there were no other differences in income for financial statement and tax purposes. Ignoring operating expenses and additional sales in 2022, what deferred tax liability would Isaac report in its year-end 2022 balance sheet?
a. $128 million.
b. $59 million.
c. $104 milion.
d. $8 million.

Select the correct answer.
In general, how long does it take to accomplish a long-term goal?
OA.
a few days to a week
OB.
a few weeks to a month
OC.
a few months to a year
OD.
more than a year

When a buyer's product is not working properly and they have a warranty, what is the first step the buyer should take to resolve the problem?
A:contact the local or state Consumer Affairs Office


B:contact the product manufacturer

C:sue the retailer who sold the product and/or the manufacturer

D:contact the retailer who sold the product

Florissa's Flowers jointly produces three varieties of flowers in the same garden: tulips, lilies, and daisies. The flowers are all watered via the same irrigation system and all receive the same amount of water; daisies require three times as much as lilies, and the water required for tulips is about halfway between the amounts needed for daisies and lilies. Although the lilies and tulips receive more water than they need due to the joint irrigation process, they are not hurt by the overwatering. The joint production cost of the three varieties of flowers is about $30 per harvest. Every harvest yields 10 tulips, 20 lilies, and 20 daisies

Allocate the joint costs of production to each product using the physical units method.

Joint Product Flowers per Harvest Proportion Joint Costs Allocation
Tulip % $ $
Lily %
Daisy %
Totals $

Which products receive the largest portion of the joint costs?

DriveTrain, Inc. instituted a new process in October 2020. During October, 13,800 units were started in Department A. Of the units started, 8,950 were transferred to Department B, and 4,850 remained in Work-in-Process at October 31, 2020. The Work-in-Process at October 31, 2020, was 100% complete as to material costs and 50% complete as to conversion costs. Material costs of $37,260 and conversion costs of $45,500 were charged to Department A in October. What were the total costs transferred to Department B assuming Department A uses weighted-average process costing

Moonbeam Company manufactures toasters. For the first 8 months of 2020, the company reported the following operating results while operating at 75% of plant capacity:
Sales (350,000 units) $4,375,000
Cost of goods sold 2,600,000
Gross profit 1,775,000
Operating expenses 840,000
Net income $ 935,000
Cost of goods sold was 70% variable and 30% fixed; operating expenses were 80% variable and 20% fixed. In September, Moonbeam receives a special order for 15,000 toasters at $7.60 each from Luna Company. Acceptance of the order would result in an additional $3,000 of shipping costs but no increase in fixed costs.
Instructions
a. Prepare an incremental analysis for the special order.
b. Should Moonbeam accept the special order?

Sarafiny Corporation is in the process of preparing its annual budget. The following beginning and ending inventory levels are planned for the year. Beginning Inventory Ending Inventory Finished goods (units) 30,000 80,000 Raw material (grams) 60,000 50,000 Each unit of finished goods requires 3 grams of raw material. The company plans to sell 770,000 units during the year. How much of the raw material should the company purchase during the year