Answer:
a.Department D = $0.80 per direct labor cost, Department E = $14 per direct labor hour, Department K = $9 per machine hour.
b.Department D = $96,000, Department E = $154,000, Department K = $93,600
c.Department D = $ 3,000 Under-applied, Department E = $30,000 Over-applied, Department K = $14,600 Over-applied
Explanation:
Predetermined Overhead Rate is used to apportion Factory Overheads to Jobs or Products.
Predetermined Overhead Rate = Budgeted Overheads / Budgeted Activity
Department D = $990,000 / $1,237,500
= $0.80 per direct labor cost
Department E = $1,750,000 / 125,000
= $14 per direct labor hour
Department K = $1,080,000 / 120,000
= $9 per machine hour
Overheads Assigned to Jobs = Predetermined Overhead Rate × Actual Activity.
Department D = $0.80 × $120,000
= $96,000
Department E = $14 × 11,000
= $154,000
Department K = $9 × 10,400
= $93,600
If, Actual Overheads > Assigned Overheads = Under-applied
If, Actual Overheads < Assigned Overheads = Over-applied
Department D = $ 99,000 - $96,000
= $ 3,000 Under-applied
Department E = $154,000 - $124,000
= $30,000 Over-applied
Department K = $93,600 - $79,000
= $14,600 Over-applied
Calculate the effective annual interest rate for the following: a. A 3-month T-bill selling at $97,270 with par value $100,000. (Round your answers to 2 decimal places.) b. A 13% coupon bond selling at par and paying coupons semiannually. (Round your answers to 2 decimal places.)
Answer:
(a) The effective annual interest rate for a 3-month T-bill selling at $97,270 with par value $100,000 is 11.71%
(b) The effective annual interest rate for a 13% coupon bond selling at par and paying coupons semiannually is 13.42%
Explanation:
(a) A 3-month T-bill selling at $97,270 with par value $100,000
EAR =[tex][par value /price]^n-1}[/tex]
n = 3 months or 12/3 = 4 times in a year
= [tex][100,000/97,270]^4 - 1[/tex]
=[tex][1.028066]^4 -1[/tex]
= 1.1171 - 1
= .1171 or 11.71%
b) EAR(coupon bond) = [tex][1+.13/2]^2 -1[/tex]
=[tex][1+.065]^2 -1[/tex]
= [tex][1.065]^2 -1[/tex]
= 1.1342 - 1
= .1342 or 13.42%
Required: Prepare journal entries to record the December transactions in the General Journal Tab in the excel template file "Accounting Cycle Excel Template.xlsx". Use the following accounts as appropriate: Cash, Accounts Receivable, Supplies, Prepaid Insurance, Equipment, Accumulated Depreciation, Accounts Payable, Wages Payable, Common Stock, Retained Earnings, Dividends, Service Revenue, Depreciation Expense, Wages Expense, Supplies Expense, Rent Expense, and Insurance Expense. 1-Dec Began business by depositing $10500 in a bank account in the name of the company in exchange for 1050 shares of $10 per share common stock. 1-Dec Paid the rent for the current month, $950 . 1-Dec Paid the premium on a one-year insurance policy, $600 . 1-Dec Purchased Equipment for $3600 cash. 5-Dec Purchased office supplies from XYZ Company on account, $300 . 15-Dec Provided services to customers for $7200 cash. 16-Dec Provided service to customers ABC Inc. on account, $5200 . 21-Dec Received $2400 cash from ABC Inc., customer on account. 23-Dec Paid $170 to XYZ company for supplies purchased on account on December 5 . 28-Dec Paid wages for the period December 1 through December 28, $4480 . 30-Dec Declared and paid dividend to stockholders $200 .
Answer:
journal entries to record the December transactions
1-Dec
Cash $10500 (debit)
Common Stock $10500 (credit)
1-Dec
Rent Expense $950 (debit)
Cash $950 (credit)
1-Dec
Prepaid Insurance $600 (debit)
Cash $600 (credit)
1-Dec
Equipment $3600 (debit)
Cash $3600 (credit)
5-Dec
Supplies Expense $300 (debit)
Accounts Payable $300 (credit)
15-Dec
Cash $7200 (debit)
Service Revenue $7200 (credit)
16-Dec
Accounts Receivable $5200 (debit)
Service Revenue $5200 (credit)
21-Dec
Cash $2400 (debit)
Accounts Receivable $2400 (credit)
23-Dec
Accounts Payable $170 (debit)
Cash $170 (credit)
28-Dec
Wages Expense $4480 (debit)
Cash $4480 (credit)
30-Dec
Dividends $200 (debit)
Cash $200 (credit)
Explanation:
The General Journal consists of Entries of Expenses, Capital Expenditures and Receipts and Payments in Cash.
Alex expects to incur personal costs of $3,800 in Year 1, and $4,300, $5,200 and $4,600 in costs over the following three years, respectively. What is the present value of these costs at 7 percent
Answer:
$15,061.26
Explanation:
The computation of the present value for these costs are shown below:
Year Expected cash flow Discount factor at 7% Present value
1 $3,800 0.9345794393 $3,551.40
2 $4,300 0.8734387283 $3,755.79
3 $5,200 0.8162978769 $4,244.75
4 $4,600 0.762895212 $3,509.32
Total $15,061.26
Refer to the discount factor table
Oriole Company had sales of $392000, variable costs of $192000, and direct fixed costs totaling $97000. The company’s operating assets total $809000, and its required return is 10%. How much is the residual income?
Answer:
Residual Income = $ 22,100
Explanation:
Residual income is the excess of the controllable profit over the opportunity cost of capital invested.
It is computed as follows:
Residual income = Controllable profit - (cost of capital× operating assets)
Controllable profit = 392,000 - 192,000- 97,000 = $103,000
Residual income = 103,000 - (10%× 809,000)= 22,100
Residual Income = $ 22,100
Use the minimax method to find all of the pure-startegy Nash equilibria for the following zero-sum games. Then, check your answer by using the iterated elimination of strictly dominated strategies method.
a.
Left Right
1 4
2 3
b.
Left Middle Right
5 3 2
6 4 3
1 6 2
Sides are:______
a. Up Down
b. Up Middle Down
Answer:
b
Explanation:
i dont really know,can someone explain to mee
Pratt Corp. started the Year 2 accounting period with total assets of $37,000 cash, $15,500 of liabilities, and $12,000 of retained earnings. During the Year 2 accounting period, the Retained Earnings account increased by $14,550. The bookkeeper reported that Pratt paid cash expenses of $29,500 and paid a $2,700 cash dividend to stockholders, but she could not find a record of the amount of cash revenue that Pratt received for performing services. Pratt also paid $10,000 cash to reduce the liability owed to a bank, and the business acquired $8,500 of additional cash from the issue of common stock. Assume all transactions are cash transactions.Requried:a. Prepare an income statement for the 2018 accounting period.b. Prepare a statement of changes in stockholders’ equity for the 2018 accounting period.c. Prepare a period-end balance sheet for the 2018 accounting period.d. Prepare a statement of cash flows for the 2018 accounting period.
Answer:
a) Revenue = $46,750
b) Stockholder's equity $35,050
c) Net Total Assets = Stockholder's equity = $35,050
d) Net cash generated for the year is $13,050; and Ending cash balance is $50,050
Explanation:
a. Prepare an income statement for the 2018 accounting period
To prepare this, cash revenue is first determined as follows:
Revenue = Retained earning for the year + Expenses + dividend = $46,750
The income statement can now be prepared as follows:
Pratt Corp.
Income statement
For the 2018 accounting period
Particulars $
Revenue 46,750
Expenses (29,500)
Net income 17,250
Dividend paid (2,700)
Retained Earnings for the year 14,550
b. Prepare a statement of changes in stockholder's equity for the 2018 accounting period
Pratt Corp.
Statement of changes in stockholder's equity
For the 2018 accounting period
Particulars $
Issue of common stock 8,500
Beginning retained earnings 12,000
Retained Earnings for the year 14,550
Stockholder's equity 35,050
c. Prepare a period-end balance sheet for the 2018 accounting period
Pratt Corp.
Balance Sheet
For the 2018 accounting period
Particulars $
Total Assets
Ending cash balance 50,050
Total Liability
Liability (15,500)
Net Total Assets 35,050
Financed By:
Issue of common stock 8,500
Beginning retained earnings 12,000
Retained Earnings for the year 14,550
Stockholder's equity 35,050
Note: Since both the Net Total Assets and Stockholder's equity are both equal to $35,050 as normally require, it shows the balance sheet is accrurately prepared.
d. Prepare a statement of cash flows for the 2018 accounting period
Pratt Corp.
Statement of Cash Flows
For the 2018 accounting period
Particulars $ $
Net income 17,250
Cash flow from operating activities 17,250
Changes in Financing Activities:
Decrease in liability (10,000)
Issue of common stock 8,500
Dividend paid (2,700)
Cash flow from financing activities (4,200)
Net cash generated for the year 13,050
Beginning cash balance 37,000
Ending cash balance 50,050
On 12/31/X4, Zoom, LLC, reported a $55,500 loss on its books. The items included in the loss computation were $27,000 in sales revenue, $12,000 in qualified dividends, $19,000 in cost of goods sold, $47,000 in charitable contributions, $17,000 in employee wages, and $11,500 of rent expense. How much ordinary business income (loss) will Zoom report on its X4 return
Answer:Ordinary Business income loss =-$20,500.
Explanation:
Ordinary business Expenses are the expenses generally accepted according to the industry standards associated with running of a business.
Here, the ordinary business expenses for Zoom include
cost of good sold= $19,-000
employee wages= $17,000
rent expense = $11,500 and therefore will be deducted from its sales revenue.
charitable contributions and qualified dividends, do not cut across all industries and so are not classified under Ordinary Buisness expences.
Ordinary Business income loss = Sales revenue - cost of good sold, -employee wages- rent expense.
$27,000- $19,000-$`17,000-$11,500= -$20,500. to be reported on its X4 return
ABC Corporation has E & P of $240,000. It distributes land with a fair market value of $70,000 (adjusted basis of $25,000) to its sole shareholder, Paul. The land is subject to a liability of $55,000 that Paul assumes. Paul has: A
a. Taxable dividend of $15,000.
b. A taxable dividend of $25,000.
c. A taxable dividend of $45,000.
d. A taxable dividend of $70,000.
e. A basis in the machinery of $55,000
Answer: Paul has a taxable dividend of $15,000.
Explanation:
From the question, we are informed that ABC Corporation has E & P of $240,000 and distributes land with a fair market value of $70,000 (adjusted basis of $25,000) to its sole shareholder, Paul. We are further informed that the land is subject to a liability of $55,000.
The taxable dividend will be the difference between the fair market value of land and the liability on the land. This will be:
= $70,000 - $55,000
= $15,000
Therefore, Paul has a taxable dividend of $15,000.
Preferred stock valuation TXS Manufacturing has an outstanding preferred stock issue with a par value of $68 per share. The preferred shares pay dividends annually at a rate of 9%. a. What is the annual dividend on TXS preferred stock? b. If investors require a return of 4% on this stock and the next dividend is payable one year from now, what is the price of TXS preferred stock? c. Suppose that TXS has not paid dividends on its preferred shares in the past two years, but investors believe that it will start paying dividends again in one year. What is the value of TXS preferred stock if it is cumulative and if investors require a(n) 4% rate of return?
Answer:
a. Annual dividend on TXS preferred stock is $6.12 per share.
b. The price of TXS preferred stock is $153 per share.
c. The value of TXS preferred stock if it is cumulative and if investors require a(n) 4% rate of return is $164.77 per share.
Explanation:
These can be calculated as follows:
a. What is the annual dividend on TXS preferred stock?
The formula for calculating the annual dividend on preferred stock is given as follows:
Annual dividend on preferred stock = Par value of preferred stock * annual dividend rate
Since we have the following for TXS:
Par value of preferred stock = $68 per share
Annual dividend rate = 9%
Therefore, we have:
Annual dividend on preferred stock = $68 * 9% = $6.12 per share
Therefore, annual dividend on TXS preferred stock is $6.12 per share.
b. If investors require a return of 4% on this stock and the next dividend is payable one year from now, what is the price of TXS preferred stock?
The formula for calculating the price of preferred stock is given as follows:
Price of preferred stock = Dividend per share / Preferred stock required rate of return
Since for TXS, we have
Dividend per share = $6.12 per share
Preferred stock required rate of return = 4%, or 0.04
Therefore, we have:
Price of preferred stock = $6.12 / 0.04 = $153 per share
Therefore, the price of TXS preferred stock is $153 per share.
c. Suppose that TXS has not paid dividends on its preferred shares in the past two years, but investors believe that it will start paying dividends again in one year. What is the value of TXS preferred stock if it is cumulative and if investors require a(n) 4% rate of return?
Cumulative preferred stock implies that unpaid previous dividends can be carried forward as arrears to when the dividend is paid.
Since TXS has not paid dividends on its cumulative preferred shares in the past two years, but will start paying dividends again in one year implies that preferred stockholders will receive the dividends in arrears of one year together with the next dividend payment.
Based on this, we have
TXS preferred stock value = PV of two dividends + Preferred stock price
PV of two dividends = Present value of two dividends in arrears to paid now = M / (1 + r)^n
Where,
M = 2 * Annual dividend on TXS preferred stock = 2 * $6.12 = $12.24
r = 4%, or 0.04
n = 1 year
Therefore, we have:
PV of two dividends = $12.24 / (1 + 0.04)^1 = $11.77
Since from part b. preferred stock price is $153 per share, we therefore have:
TXS preferred stock value = $11.77 + 153 = $164.77 per share
Therefore, the value of TXS preferred stock if it is cumulative and if investors require a(n) 4% rate of return is $164.77 per share.
As per the question, the TXS company has outstanding preferred stock issues with a value that is parred USD 68 per share and prefers to pay the dividend at an annual rate of 9%.
Thus the yearly dividend of the TXS on preferred stock is a. total dividend on TXS stock is of $6.12 per share. If the investors gained four percent on this stock and next is made payable 1 year from now, then the prices of TXS stock will be $153/share. If the TXS is not being paid then the preferred share for the two-year period is total and if investors require at 4% rate of return which is at $164.77 per share.Learn more about the TXS Manufacturing has an outstanding.
brainly.com/question/13739586.
Hank Itzek manufactures and sells homemade wine, and he wants to develop a standard cost per gallon. The following are required for production of a 50-gallon batch.
2,400 ounces of grape concentrate at $0.01 per ounce
54 pounds of granulated sugar at $0.50 per pound
60 lemons at $0.80 each
100 yeast tablets at $0.21 each
100 nutrient tablets at $0.14 each
3,700 ounces of water at $0.005 per ounce
Hank estimates that 4% of the grape concentrate is wasted, 10% of the sugar is lost, and 25% of the lemons cannot be used.
Compute the standard cost of the ingredients for one gallon of wine.
Answer:
total $3.36
Explanation:
required for producing 50 gallons of wine:
2,400 ounces of grape concentrate at $0.01 per ounce = $24 / 50 = $0.48 x 1.04 = $0.50
54 pounds of granulated sugar at $0.50 per pound = $27 / 50 = $0.54 x 1.1 = $0.59
60 lemons at $0.80 each = $48 / 50 = $0.96 x 1.25 = $1.20
100 yeast tablets at $0.21 each = $21 / 50 = $0.42
100 nutrient tablets at $0.14 each = $14 / 50 = $0.28
3,700 ounces of water at $0.005 per ounce = $18.50 / 50 = $0.37
Hank estimates that 4% of the grape concentrate is wasted, 10% of the sugar is lost, and 25% of the lemons cannot be used.
total standard cost per gallon:
grape concentrate = $0.50granulated sugar = $0.59lemons = $1.20yeast tablets = $0.42nutrient tablets = $0.28water = $0.37total $3.36You are the project manager for a cable service provider. Your project team is researching a new service offering. They have been working together for quite sometime and are in the performing stage of Team Development. A new member has been introduced to the team. Which of the following is true?
A. The team will start all over again at the storming stage but quickly progress to the performing stage.
B. The team will continue in the performing stage.
C. The team will start all over again with the storming stage.
D. The team will start all over again with the forming stage.
Answer:
D. The team will start all over again with the forming stage.
Explanation:
Stages of team development are the various stages through which a group passes from formation to dissolution. These stages are important because it helps a manager identify the unique challenges his team is facing per time and various solutions to them.
The stages of team development are:
- Forming
- Storming
- Norming
- Performing
- Adjourning
If a team member joins a team, the team will start over from the forming phase because he will have to get used to his new team mates. He will undergo storming when there will be conflict between coworkers.
Next he will undergo norming when team members accept one another.
Performing when team works optimally to achieve set goals.
Finally the adjourning phase where team is disbanded
Choose the correct answers :
1. If the demand for product A displays high and postitive cross-price elasticity with respect to the price of product B, then:
a. the demand for product A is likely to have a low price elasticity
b. product A and B are subtitutes
c. products A and B are complements
d. the demand for product B is likely to have a low price elasticity
2. Fast food is believed to be an inferior good. This means that:
a. the quantity of fast food consumed decreases as income increases
b. the income elasticity of demand for fast food is positive
c. The quantity of fast food consumed will always be high
d. fast food is really not quality food
Answer:
b. product A and B are subtitutes
a. the quantity of fast food consumed decreases as income increases
Explanation:
Cross price elasticity of demand measures the responsiveness of quantity demanded of good A to changes in price of good B.
Cross price elasticity = percentage change in quantity demanded of good A / percentage change in price of good B.
The cross price elasticity of substitute goods are always positive because if the price of good B increases, the Quanitity demanded of good A rises.
Substitute goods are goods that can be used in place of another good.
Complement goods are goods that are used together. E.g. car and gas
Inferior goods are goods whose demand increases when income falls and whose demand falls when income rises.
I hope my answer helps you
Molen Inc. has an outstanding issue of perpetual preferred stock with an annual dividend yield of 7.50% and a par value of $60. If the market value for the preferred stock is $70, what is the required return on this preferred stock?
Answer:
10.71%
Explanation:
The computation of the required rate of return on this preferred stock is shown below :
The Required return on preferred stock is
= Dividend ÷ market value of preferred stock
= 7.50 ÷ $70
= 10.71%
By dividing the dividend from the market value of preferred stock we can get the Required return on preferred stock and the same is to be considered
therefore we ignored the par value i.e $60 as this is not relevant
Answer:
$61.54
Hope this helps! good luck :)
Company expects to sell 500 units during the second quarter and 550 units in the third quarter. Currently, during the second quarter, they have 46 units on hand. If they desire safety stock of 10% of the next quarter's sales, ________ units will need to be produced in the second quarter.
Answer:
509 units
Explanation:
The expected sales in the present quarter is 500 units (for second quarter) and we have 46 units on hand.
We want a reserve of 10% during the next quarter.
The expected sales in next quarter is 550 units so reserve of 10% is
Reserve = 0.10 * 550= 55 units
Balance to produce this quarter= 500 - 46= 454 units
Total to produce= Balance produced + Reserve
Total to produce= 454 + 55= 509 units
A government has the following liabilities at the end of the year: General obligation bonds Compensated absences Salaries payable $1,500,00 120,000 40,000 What amount of liabilities should be reported in the governmental activities column of the government-wide statement of net position
Answer:
What should be reported is $1660000
Explanation:
Solution
Given that:
Thus
General obligation bonds=$1,500000
Compensated absences=$120,000
Total liabilities in the governmental activities column=$1660000
Therefore, the amount $1660000 should be reported in the governmental activities column of the government-wide statement of net position.
DasGute, a not-for-profit (NFP) organization located in Frankfurt, Germany, directly solicited CoolSchool, an NFP university located in Westport, CT, to enter into an agreement to establish a branch campus of CoolSchool in Frankfurt called CoolNewSchool. CoolNewSchool is not a separate legal entity and will operate as adegree-granting branch campus of CoolSchool in Frankfurt with the intent to provide students the same level of undergraduate education that it provides to students enrolled at its main campus in Westport. DasGute has entered into similar agreements with other U.S. universities in fulfillment of its mission to develop human resources through highquality education and research in Frankfurt. The boards of directors for both DasGute and CoolSchool require that CoolNewSchool prepare stand-alone financial statements in accordance with U.S. GAAP to demonstrate that revenue and expenses of CoolNewSchool have been generated and incurred inaccordance with the operating budgets described below.Eddie V., the new controller of CoolNewSchool isn’t sure how to account for its formation under U.S. GAAP but has knowledge of NFP accounting principles, specifically whether an agreement should be accounted for as an exchange transaction or a contribution within the stand-alone financial statements.Case FactsResponsibilities of CoolSchoolThe agreement requires that CoolSchool be responsible for the following activities:(1) hiring and terminating of personnel (including the dean, who will function as the CEO of CoolNewSchool) (2) recruiting, admitting, and enrolling students; (3) designing and delivering the academic curriculum; (4) establishing and implementing operational policies and procedures (including compensation for employees and tuition rates for students); and (5) authorizing expenditures once a budget is approved.Responsibilities of DasGuteThe agreement requires that DasGute be responsible to (1) construct, own, furnish, and maintain the site; (2) bear the costs of the joint advisory board; and (3) fund all necessary expenditures for CoolNewSchool, as stipulated by the annual budget.Shared Responsibilities of CoolSchool and DasGuteA nine-member joint advisory board will be established, consisting of three appointed members by CoolSchool, three appointed members by DasGute, and three jointly appointed members. The joint advisory board does not have decision-making authority but will provide guidance on CoolNewSchool’s operations and final approval of the annual budget.Operating BudgetEach year, CoolNewSchool will develop an operating budget that is subject to approval by the joint advisory board. If an agreement is not reached on a proposed budget, the operating budget for the fiscal year in question will be based on the previous year’s budget. Any unresolved issue, whether related to the budget or any other matter, will be settled by arbitration.• Once the annual budget has been approved, CoolSchool has full expenditure authority for CoolNewSchool’s operating expenses. DasGute will reimburseCoolSchool for all expenditures incurred in accordance with the annual budget. In addition, DasGute will pay an annual management fee to CoolSchool.• While CoolSchool is responsible for tuition billing, DasGute is required to fundany shortfall between the tuition rates established for CoolNewSchool and theactual amounts paid by the students, to cover the annual budgeted operatingexpenses.Required:1. Determine whether CoolNewSchool represents an extension of DasGute orCoolSchool by identifying which entity exercises control of CoolNewSchool(analogous to the idea of control if consolidated financial statements wererequired) and from whose perspective (DasGute or CoolSchool) the controllingentity’s agreement should be analyzed as either an exchange transaction or acontribution.2. Does the agreement represent an exchange transaction (and therefore all tuitionamounts should be recorded as "Tuition Revenue") or a contribution (andtherefore the amounts received from DasGute in the form of tuition subsidiesshould be recorded as "Cont?
Answer:
DasGute, a not-for-profit (NFP), Frankfurt / CoolSchool, Westport, CT, and CoolNewSchool, Frankfurt
1. Determination of Control:
DasGute exercises control over CoolNewSchool. CoolSchool is just in a management consultancy position.
It is from DasGute's perspective that the controlling entity's agreement should be analyzed as a contribution transaction. It is not an exchange transaction.
2. Determination of Exchange and Consideration Transactions: In an exchange transaction, there will be consideration for the parties, especially DasGute and CoolSchool. The facts do not support an exchange transaction. The IFAC definition do not support an exchange transaction. The FASB ASC 958-605 rules and FASB ASU 2018-08 update do not support an exchange transaction.
3. Therefore, the amount received from DasGute in the form of tuition subsidies should be recorded as "Contribution Revenue."
Explanation:
a) International Federation of Accountants (IFAC) define exchange transactions, thus: "Exchange transactions are transactions in which one entity receives assets or services, or has liabilities extinguished, and directly gives approximately equal value (primarily in the form of cash, goods, services, or use of assets) to another entity in exchange."
b) The FASB ASC 958-605 provides guidance for contribution and exchange transactions. "The indicators to use to determine whether a contribution should be recorded as a contribution transaction or an exchange transaction are:
1. What is the recipient nonprofit’s intent in soliciting the asset?
a) Soliciting the asset as a contribution – contribution transaction
b) Seeking resources in exchange for specified benefits – exchange transaction
2. What is the resource provider’s expressed intent about the purpose of the asset to be provided by the recipient nonprofit?
a) Provider is making a donation to support the nonprofit’s programs – contribution
b) Provider is transferring resources in exchange for specific benefits – exchange
3. What is the method of delivery by recipient nonprofit to third-party recipients?
a) At the discretion of the recipient nonprofit – contribution
b) Specified by the resource provider – exchange
4. What is the method of determining the amount of the contribution?
a) Resource provider determines amount – contribution
b) Amount contributed equals the value of the assets to be provided by the recipient nonprofit, or the assets’ cost plus markup – exchange
5. Are there penalties assessed if the nonprofit fails to make timely delivery of assets?
a) Recipient nonprofit not penalized for nonperformance – contribution
b) Recipient nonprofit penalized for nonperformance – exchange
6. To whom will the recipient nonprofit deliver the assets?
a) Delivered to individuals or organizations other than the resource provider – contribution
b) Delivered to the resource provider or to individuals or organizations closely connected to the resource provider – exchange"
c) FASB ASU 2018-08 update, Clarifying the Scope and the Accounting Guidance for Contributions Received and Contributions Made, explains clearly when revenue is exchange versus contribution:
"The first step in determining the accounting is determining who is paying the money and who, if anyone, is getting goods or services from the transaction.
If the nonprofit gets funds from a payor and provides that payor direct, commensurate value in return, that is an exchange transaction. An example would be when you purchase a training class from your membership organization; you are paying the value of what you are receiving.
If the nonprofit gets funds from a payor and no value is paid out to anyone at that time, that is clearly a contribution.
If the nonprofit gets funds from a payor, such as the federal government, with the purpose of the nonprofit providing the goods and services to a third party, the general public or a subsegment thereof, that is also a contribution. When the general public, or someone other than the payor, receives the goods or services, it is a contribution."
Clemmens Company applies overhead based on direct labor cost. Estimated overhead and direct labor costs for the year were $112,500 and $125,000, respectively. During the year, actual overhead was $107,400 and actual direct labor cost was $120,000. The entry to close the over- or underapplied overhead at year-end, assuming an immaterial amount, would include:
Answer:
Estimated Over head applied = ($112500 / $125000) *100 = 90% of Direct labor cost.
Thus, Actual Over Head applied = 90% of $120000 = $108000
Moreover, Actual Over Head incurred = $107400
Therefore, Overhead Over-applied is to be applied as the Actual Overhead applied is higher than the Actual Overhead Incurred
Overhead Over-applied = $108000 - $107400
Overhead Over-applied = $600
The entry to close the over-applied overhead at year-end would include:
i. Over-head A/c will be debited for $600
ii. Cost of goods sold will to be credited for $600
Assume a Cobb-Douglas production function of the form: q equals 10 Upper L Superscript 0.33 Baseline Upper K Superscript 0.75. What type of returns to scaleLOADING... does this production function exhibit?
Answer:
Since 0.33 + 0.75 = 1.08 is greater than one, this production function therefore exhibits increasing returns to scale.
Explanation:
From the question, we have the following restated equation:
[tex]q=10L^{0.33} K^{0.75}[/tex]
Where q is the output, and L and K are inputs
To determine the types of returns to scale, we increase each of L and K inputs by constant amount c as follows:
[tex]q = 10(cL)^{0.33}(cK)^{0.75}[/tex]
We can now solve as follows;
[tex]q = 10c^{0.33+0.75} L^{0.33}K^{0.75}[/tex]
[tex]q=c^{1.08} L^{0.33} K^{0.75}[/tex]
Since 0.33 + 0.75 = 1.08 is greater than one, this production function therefore exhibits increasing returns to scale.
Larned Corporation recorded the following transactions for the just completed month.
$72,000 in raw materials were purchased on account. $70,000 in raw materials were used in production. Of this amount, $62,000 was for direct materials and the remainder was for indirect materials. Total labor wages of $106,000 were paid in cash. Of this amount, $102,200 was for direct labor and the remainder was for indirect labor. Depreciation of $193,000 was incurred on factory equipment.
Required:
Record the above transactions in journal entries.
Answer:
Larned Corporation
Journal Entries
Sr. No Account Debit Credit
1 Materials $72,000
Accounts Payable $72,000
$72,000 in raw materials were purchased on account.
2 Work in Process $62,000
Materials Inventory $62,000
$70,000 in raw materials were used in production. Of this amount, $62,000 was for direct materials
3 Manufacturing Overheads $8000
Materials Inventory $ 8000
$70,000 in raw materials were used in production. Of this amount, $62,000 was for direct materials and the remainder was for indirect materials.
4 Work In Process $ 102,000
Payroll ( Direct Labor ) $102,000
$102,200 was for direct labor
5 Manufacturing Overheads $3800
Payroll (Indirect Labor) $3800
Total labor wages of $106,000 were paid in cash. Of this amount, $102,200 was for direct labor and the remainder was for indirect labor.
6 Depreciation $193,000
Factory Overhead Control Account $193,000
Depreciation of $193,000 was incurred on factory equipment.
Finer Company uses a sales journal, purchases journal, cash receipts journal, cash payments journal, and general journal. Journalize the following transactions that should be recorded in the sales journal.
May:
2 Sold merchandise costing $280 to B. Facer for $420 cash, invoice no. 5703.
5 Purchased $2,750 of merchandise on credit from Marchant Corp.
7 Sold merchandise costing $756 to J. Dryer for $1,096, terms 2/10, n/30, invoice no. 5704.
8 Borrowed $8,000 cash by signing a note payable to the bank.
12 Sold merchandise costing $189 to R. Lamb for $302, terms n/30, invoice no. 5705.
16 Received $1,074 cash from J. Dryer to pay for the purchase of May 7.
19 Sold used store equipment (noninventory) for $900 cash to Golf, Inc.
25 Sold merchandise costing $330 to T. Taylor for $518, terms n/30, invoice no. 5706.
Required:
Journalize the May transactions that should be recorded in the sales journal assuming the perpetual inventory system is used.
Answer and Explanation:
The Preparation of the sales journal is prepared below:-
Finer Company
Sales Journal
Date Account Invoice Accounts Cost of goods
Debited Number Receivable Dr. Sold Dr.
Credit sales Credit inventory
May 7 J. Dryer 5704 $1,096 $756
May 12 R. Lamb 5705 $302 $189
May 25 T. Taylor 5706 $518 $330
Roman Mfg.'s July production involved actual direct labor costs of $41,514 for 3,400 direct labor hours. The budget for the July level of production called for 3,500 direct labor hours at $12.20 per hour, using a standard cost system.
1. Roman's labor rate variance for July is ____________
2. Roman's labor efficiency variance for July is _______________
Answer:
Instructions are below.
Explanation:
Giving the following information:
Roman Mfg.'s July production involved actual direct labor costs of $41,514 for 3,400 direct labor hours. The budget for the July level of production called for 3,500 direct labor hours at $12.20 per hour.
To calculate the direct labor efficiency and rate variance, we need to use the following formulas:
Direct labor time (efficiency) variance= (Standard Quantity - Actual Quantity)*standard rate
Direct labor time (efficiency) variance= (3,500 - 3,400)*12.2
Direct labor time (efficiency) variance= $1,220 favorable
Direct labor rate variance= (Standard Rate - Actual Rate)*Actual Quantity
Actual rate= 41,514/3,400= $12.21
Direct labor rate variance= (12.20 - 12.21)*3,400
Direct labor rate variance= $34 unfavorable
Agency conflicts between managers and shareholders An agency relationship can degenerate into an agency conflict when an agent acts in a manner that is not in the best interest of his or her principal. In business, these conflicts most frequently involve the enrichment of the firm's executives or managers (in the form of money and perquisites or power and prestige) at the expense of the shareholders. This usurping of shareholder wealth is most likely to occur when shareholders do not have sufficient information about the decisions and actions being made by the firm's management. Consider the following scenario and determine whether an agency conflict exists: Daniel owns Daniel's Tantalizing Tees, a T-shirt shop in a small college town in Kansas. With a staff of three part-time employees, Daniel operates the business in accordance with his personal goals, dreams, and capabilities.
Does Daniel have an agency conflict to deal with?
A. No; by having part-time, as opposed to full-time, employees, Daniel is prevented from experiencing an agency conflict.
B. Yes; as both the owner and operator of Daniel's Tantalizing Tees, Daniel has created the necessary agency relationship through which an agency conflict can exist.
C. No; as both the owner and operator of Daniel's Tantalizing Tees, Daniel has not created the necessary agency relationship through which an agency conflict can exist.
D. Yes; there is always an inherent conflict of interest between owners and operators (managers). Consider the following scenario and determine whether an agency conflict exists: Five years ago, Li created a plant-care business that grew, stocked, and maintained fresh plants in office buildings throughout Denver. Over time, The Green Zone Inc. (TGZ) has grown from a proprietorship into a corporation, now reaching far beyond Denver. To finance and support this growth, TGZ issued shares that were sold to TGZ employees, Li's family members, and selected outsiders. Li is TGZ's chairman of the board of directors and CEO, but he is no longer the largest shareholder. At the latest annual meeting, two mutually exclusive proposals were placed on the ballot for discussion and vote. The first was put forth by Li and TGZ's management team, and the second was proposed by a small group of other shareholders. Both groups are adamantly opposed to the other group's proposal, even though both proposals would likely have the same effect on TGZ's value and riskiness.
Does an agency conflict exist between TGZ's management and the small group of opposing shareholders?
A. Yes; an agency relationship exists, and an agency relationship always gives rise to agency conflicts, regardless of the actual behavior of the participants.
B. Yes; any conflict or disagreement between the firm's managers and its shareholders constitutes an agency conflict.
C. No; although an agency relationship exists between TGZ's management-including Li as TGZ's chairman and CEO and the firm's shareholders-there is no agency conflict, because no expropriation or wasting of the shareholders' wealth has occurred.
D. No; Li was the original owner of TGZ, so he would always be sensitive to the concerns of the firm's current owners (shareholders) and would not engage in an agency conflict. For the past 40 years, companies have attempted to attract, retain, and encourage managers by developing attractive compensation packages. These compensation packages have also been intended to reduce potential agency conflicts between these managers and the firm's shareholders. In the best interest of shareholders, compensation packages should be structured in a way such that managers have an incentive to maximize the____value of the company's common stock price. Great Fortunes Baking Company's stockholders are mostly individual investors, and there is relatively little institutional ownership. If several pension and mutual funds were to take large positions in Great Fortunes Baking Company's stock, direct shareholder intervention would be likely to motivate the firm's management. Katz Investment Group's stock price is currently trading at $20 per share. The consensus among market analysts is that the stock should trade for $27.5 per share, given the amount, timing, and riskiness of the company's dividends. Is Katz Investment Group more or less likely to receive a hostile takeover bid?
1. Less likely
2. More likely
Answer:
1. C. No; as both the owner and operator of Daniel's Tantalizing Tees, Daniel has not created the necessary agency relationship through which an agency conflict can exist.
For an agency problem to exist, the owners and the managers must be two different sets of people. If they are the same person, then practically speaking, they cannot usurp their own wealth.
2. C. No; although an agency relationship exists between TGZ's management-including Li as TGZ's chairman and CEO and the firm's shareholders-there is no agency conflict, because no expropriation or wasting of the shareholders' wealth has occurred.
Indeed there is an Agency relationship in effect because some shareholders are not in management. However, it cannot be said that there is a agency conflict because there is no evidence shown that shareholder wealth is being expropriated.
3. Intrinsic
The Intrinsic value of a stock is the value that an investor believes the stock is worth. A Manager should therefore get incentives that will inspire them to take investor perception of stock high. When this happens it increases shareholder wealth primarily through capital gain.
4 ... direct shareholder intervention would be more likely to motivate the firm's management.
Institutional Investors such as Pension and Mutual funds usually have more say in a company as they represent several shareholders and have expertise in the field. Should they get involved, their direct intervention would motivate the firm's management.
5. More likely
If investors believe that the stock should be trading for higher than it actually is, this is incentive to try to lay their hands on the stock to take advantage of this undervaluation. They would be able to offer the current shareholders more money than what it is currently worth which will most likely get them the shares they want. This is classified as a Hostile takeover.
The January 1, Year 1 trial balance for the Tyrell Company is found on the trial balance tab. The beginning balances are assumed. Tyrell Co. entered into the following transactions involving short-term liabilities in Year 1 and Year 2.
Year 1
Apr. 20 Purchased $40,250 of merchandise on credit from Locust, terms n/30.
May 19 Replaced the April 20 account payable to Locust with a 90-day, 10%, $35,000 note payable along with paying $5,250 in cash.
July 8 Borrowed $80,000 cash from NBR Bank by signing a 120-day, 9%, $80,000 note payable.
Aug. 17 Paid the amount due on the note to Locust at the maturity date.
Nov. 5 Paid the amount due on the note to NBR Bank at the maturity date.
Nov. 28 Borrowed $42,000 cash from Fargo Bank by signing a 60-day, 8%, $42,000 note payable.
Dec. 31 Recorded an adjusting entry for accrued interest on the note to Fargo Bank.
Year 2
Jan. 27 Paid the amount due on the note to Fargo Bank at the maturity date.
Requirement General General Trial Schedule of Calculation of Year 2
Journal Ledger Balance Payables Interest Payment
1. General Journal tab- Prepare the 2016 journal entries related to the notes and accounts payable of Tyrell Co
2. Calculation of interest tab - Use the interest formula (P x Rx T) to verify the amount of interest recorded in your entries. Verify that total interest expense agrees with the trial balance.
3. Year 2 payment tab - Prepare the January 27, 2017 entry to record the re-payment of the note at maturity
Answer: Please see explanatory column
Explanation:
Tyrell Company for 2016
Journal to record the purchase of merchandise inventory
Date Account Title Debit Credit
April 20 Merchandise inventory $40,250
2016 Accounts payable - Locust $40250
Journal to record the replacement of account with 10% notes payable
Date Account Title Debit Credit
March 19 Accounts payable - Locust $40,250
2016 10%notes payable $35,000
Cash $5,250
Journal to record the Borrowing of $80,000 cash in 120-days at 9%,
Date Account Title Debit Credit
July 8 Cash $80,000
2016 9%notes payable $80,000
Journal to record the 10%, notes payable at maturity date
Date Account Title Debit Credit
Aug 17 10% notes payable $35,000
2016 interest expense $875
Cash $35,875
Using Interest = P X R X T
= 35,000 X 10% X 90/360=$875
Journal to record the 9%, notes payable at maturity date
Date Account Title Debit Credit
Nov 5 9% notes payable $80,000
2016 interest expense $2,400
Cash $82,400
Using Interest = P X R X T
= 80,000 X 9% X 120/360=$2,400
Journal to borrowing of 42,000 for 60 days at 8% interest payable at maturity date
Date Account Title Debit Credit
Nov 28 Cash $42,000
2016 8% notes payable $42,000
Journal to record the interst accrued on the notes payable
Date Account Title Debit Credit
Dec 31 Interest expense $308
2016 interest payable $308
Using Interest = P X R X T
= 42,,000 X 8% X 33/360=$308
33 days because the note payable was issued on November 28 but interest was accrued on December 31 making the accrued interest expense to be calculated for 33 days
Tyrell Company for 2017
Journal to record the payment of 8% payable at maturity date
Date Account Title Debit Credit
Jan 31 8%notes payable $42,000
2017 interest payable $308
Interest expense $252
Cash $42,560
Using Interest = P X R X T
= 42,,000 X 8% X 27/360=$252
27 days because from december to january 27th,
A business received an offer from an exporter for 10,000 units of product at $13.50 per unit. The acceptance of the offer will not affect normal production or domestic sales prices. The following data are available: Domestic unit sales price $21 Unit manufacturing costs: Variable 12 Fixed 5 What is the amount of the gain or loss from acceptance of the offer
Answer:
Effect on income= $15,000 increase
Explanation:
Giving the following information:
A business received an offer from an exporter for 10,000 units for $13.50 per unit.
Unit manufacturing costs:
Variable 12
Because it is a special offer and there is unused capacity, we will not take into account the fixed costs.
Effect on income= number of units*unitary contribution margin
Effect on income= 10,000*(13.5 - 12)
Effect on income= $15,000 increase
Tri Fecta, a partnership, had revenues of $364,000 in its first year of operations. The partnership has not collected on $45,100 of its sales and still owes $38,400 on $220,000 of merchandise it purchased. There was no inventory on hand at the end of the year. The partnership paid $28,300 in salaries. The partners invested $46,000 in the business and $25,000 was borrowed on a five-year note. The partnership paid $3,000 in interest that was the amount owed for the year and paid $9,400 for a two-year insurance policy on the first day of business. Ignore income taxes.Compute the cash balance at the end of the first year for Tri Fecta.
a) $ 332,110
b) $ 161,640
c) $ 166,290
d) $ 155,440
Answer:
$167,600
Explanation:
Net income:
Sales revenue $364,000
- COGS $220,000
- Salaries $28,300
- Interest $3,000
- Insurance $4,700
Net Income $108,000
Cash flow from operating activities:
Net income $108,000
adjusting entries:
accounts receivable ($45,100)accounts payable $38,400prepaid insurance ($4,700)Net cash flow from operating activities $96,600
Cash flow from financing activities:
capital invested $46,000
money borrowed $25,000
Net cash flow from financing activities $71,000
Cash balance $167,600
Grayille Financial Consultants, Inc. is planning to reduce the number of days it allows its clients to pay their bills from 45 days to 30 days. Grayille believes that this policy change will have no effect on either sales or costs. Any asset changes resulting from this new policy will be offset by a corresponding and equal change in equity. All else constant, this new collection policy should be expected to (circle all that apply - if the correct answer is a and b and you circle any letter(s) other than a and b, you will receive no credit - that is, no partial credit will be awarded for your answer to this question):
Answer: c. Lower the firm's quick ratio.
d. Lower the firm's current ratio.
Explanation:
Reducing the amount of time that clients have to pay will reduce the amount of Account Receivables as clients will no longer have long outstanding due dates. This reduction in Accounts Receivables will be felt by the Quick and Current ratios.
Quick Ratio formula
= [tex]\frac{Current Assets - Inventory}{Current Liabilities}[/tex]
Current Ratio Formula
= [tex]\frac{Current Assets}{Current Liabilties}[/tex]
As is evident from the formulas, Current Assets are integral to both ratios and as Accounts Receivables is a current asset that will be reduced, the current assets will be reduced and by extension both the Current and Quick Ratios will be reduced as well.
A group of investors has formed SandInn Corporation to purchase a small hotel. The price is $200,000 for the land and $800,000 for the hotel building. If the purchase takes place in June, com- pute the MACRS depreciation for the first three calendar years. Then assume the hotel is sold in June of the fourth year, and compute the MACRS depreciation in that year also.
Answer:
1. Land is not to be depreciated under the Modified Accelerated Cost Recovery System (MACRS) depreciation schedule.
The Building however will be depreciated over a period of 39 years as it is considered an place of business and not a residential property.
The depreciation for such assets is 1.3% in year 1 and 40, and 2.6% for the years in-between.
Year 1 = 1.3% * 800,000
= $10,400
Year 2 = 2.6% * 800,000
= $20,800
Year 3 = 2.6% * 800,000
= $20,800
The total for the first 3 years is,
= 10,400 + 20,800 + 20,800
= $52,000
2. Depreciation in Year 4
= 800,000 * 2.6%
= $20,800
If a gain of $221000 is realized in the cash sale of a building having a book value of $882000, the total amount reported in the cash flows from investing activities section of the statement of cash flows is
Answer:
$1,103,000
Explanation:
The cash flow statement categories the company's transactions in a financial period into 3 groups; these are operating, investing and financing.
The net profit/loss, depreciation, changes in current assets (other than cash) and liabilities are considered as operating activities including income taxes.
The sale of assets, interest received, purchase of investments are examples of investing activities while the issuance of stocks, debt principal deduction (loan settlement), issuance of debt securities etc are examples of financing activities.
For assets disposed, the amount received from the disposal is the amount recorded as an investing activity.
Amount received - Book value of asset = Gain on disposal
Amount received = $221000 + $882000
= $1,103,000
If a company uses a predetermined rate for absorbing manufacturing overhead, the volume variance is the: Group of answer choices a. Underapplied or overapplied variable cost element of overhead. b. Underapplied or overapplied fixed cost element of overhead. c. Difference in budgeted costs and actual costs of fixed overhead items. d. Difference in budgeted costs and actual costs of variable overhead items.
Answer: c. Difference in budgeted costs and actual costs of fixed overhead items.
Explanation:
If a company uses a Predetermined rate for Manufacturing Overhead this means that they have budgeted a certain cost of overhead that they believe will be sufficient for production. This is usually possible for fixed overhead items.
The Variance therefore would be the difference between this budgeted figure and the actual figure for the fixed Overhead items.
Nick contracts for the sale of this year's strawberry crop to Phoenix, with payment to go to Rural Cooperative Association. The contract reserves to Nick and Phoenix the right to modify its terms. Rural Cooperative's right to payment is
Answer:
Subject to any change That Phoneix and Nick make
Explanation:
Since in the question, it is given that the contracts reserve the right to change or modify the term of the contract between the Nick and Phoenix and the payment is go to Rural Cooperative Association
Therefore the right to payment reflects the changes that made by Phoneix and Nick as the contract allows to make any modification or changes to the contract terms