Answers
Answer: c. Enter into an alliance with a large European pharmaceutical firm. The products would be manufactured in Europe by the 50-50 joint venture and marketed by the European firm.
Explanation:
Reasons why it should enter into business with a European firm;
As mentioned in the text, the company is a small one in the an industry that is dominated and trusted by big names such as GSK and Pfizer. It would do the company a world of good to get into business with a large European firm and use the opportunity to increase their brand popularity and grow in size.The Canadian firm might not know much about how to go about conducting business in the European union and this can be detrimental to its business. Getting involved with the European firm will ensure that their product is properly marketed by an entity that knows how to do business in the target market.It will be cheaper to engage with the European firm than to begin anew and go alone at penetrating the European market. The Marketing cost alone will be significant because they will be going up against well established names. By partnering with the European firm, the Canadian firm will gain access to the European firm's already established distribution network even if all that they handle is marketing because they will market to their connections first. The Canadian will stand to gain knowledge on marketing techniques in the European Union that they can then use to their advantage for other products that they might have.
Related Questions
Rank the steps of the (sandwich) ELISA procedure from first step to last step. Do not overlap any steps.
Answers
Answer and Explanation:
The ELISA refers to the enzyme-linked immunosorbent assay (ELISA) It is used to determine the existence of an antigen in a sample with the help of antibiotics
The ELISA procedure in sequence form is shown below:
1. The capture antibody is added and then clean it
2. Now adding the blocking buffer and then clean it
3. Now add the samples with controls, Hatch it and clean it
4. Add horseradish peroxidase (HRP) conjugated with the antibody, Hatch it and clean it
5. Add Thymidine monophosphate (TMP)
6. And finally, the last step is to record the results
Given on the balance sheets given for Just dew It, calculate the following financial ratios for each year:_________.
a. Current ratio.
b. Quick ratio.
c. Cash ratio.
d. NWC to total assets ratio.
e. Deb-equity ratio and equity multiplier.
f. Total debt ratio and long-term debt ratio.
Answers
Answer:
a. Current ratio = current assets / current liabilities
2014 = $90,717 / $62,939 = 1.442015 = $100,617 / $66,442 = 1.51b. Quick ratio = (current assets - inventory) / current liabilities
2014 = ($90,717 - $51,163)/ $62,939 = 0.632015 = ($100,617 - $56,295)/ $66,442 = 0.67c. Cash ratio = (cash + cash equivalents) / current liabilities
2014 = $11,135 / $62,939 = 0.182015 = $13,407 / $66,442 = 0.20d. NWC to total assets ratio = net working capital / total assets
2014 = $27,778 / $417,173 = 0.072015 = $34,175 / $458,177 = 0.07e. Debt-equity ratio = total debt / total equity
2014 = $106,939 / $310,234 = 0.342015 = $105,442 / $352,735 = 0.30equity multiplier = total assets / total equity
2014 = $417,173 / $310,234 = 1.342015 = $458,177 / $352,735 = 1.30f. Total debt ratio = liabilities / assets
2014 = $106,939 / $417,173 = 0.26
2015 = $105,442 / $458,177 = 0.23
long-term debt ratio = long term liabilities / assets
2014 = $44,000 / $417,173 = 0.112015 = $39,000 / $458,177 = 0.09O'Brian's Department Stores allocates the costs of the Personnel and Payroll departments to three retail sales departments, Housewares, Clothing, and Furniture. In addition to providing services to the operating departments, Personnel and Payroll provide services to each other. O'Brian's allocates Personnel Department costs on the basis of the number of employees and Payroll Department costs on the basis of gross payroll. Cost and allocation information for June is as follows:
Personel Payroll Housewares Clothing Furniture
Direct department cost $6,500 $3,300 $11,900 $20,000 $16,350
Number of employees 5 3 9 15 3
Gross payroll $6,400 $3,400 $11,400 $17,800 $8,000
Required:
a. Determine the percentage of total Personnel Department services that was provided to the Payroll Department.
b. Determine the percentage of total Payroll Department services that was provided to the Personnel Department.
c. Prepare a schedule showing Personnel Department and Payroll Department cost allocations to the operating departments, assuming O'Brian's uses the step method.
Answers
Answer:
O'Brian's Department Storesa. Determination of the percentage of total Personnel Department services provided to the Payroll Department:
= No. of payroll department employees/Total number of employees x 100
= 3/35 x 100 = 8.57%
b. Determination of the percentage of total Payroll Department services provided to the Personnel Department:
= No. of personnel department employees/Total number of employees x 100
= 5/35 x 100 = 14.29%
c. Schedule showing Personnel Department and Payroll Department Cost Allocations to the Operating Departments, using the step method:
Personnel Payroll House Clothing Furniture Total
Wares
Number of
employees 5 3 9 15 3 35
Direct department
cost $6,500 $3,300 $11,900 $20,000 $16,350 $58,050
Gross payroll $6,400 $3,400 $11,400 $17,800 $8,000 $47,000
Personnel -12,900 1,290 3,870 6,450 1,290 12,900
Payroll 0 -7,990 2,449 3,823 1,718 7,990
Total allocated 0 0 $29,619 $48,073 $27,358 $105,050
Explanation:
a) Data:
1. Personnel and Payroll departments' cost to Housewares, Clothing, and Furniture
2. Personnel and Payroll provide services to each other.
3. Basis of Service Departments' Cost Allocation:
Personnel Department: Number of employees
Payroll Department: Gross Payroll
4. Cost and Allocation Information for June:
Personnel Payroll House Clothing Furniture Total
Wares
Direct department
cost $6,500 $3,300 $11,900 $20,000 $16,350 $58,050
Number of
employees 5 3 9 15 3 35
Gross payroll $6,400 $3,400 $11,400 $17,800 $8,000 $47,000
Personnel -12,900 1,290 3,870 6,450 1,290 12,900
Payroll 0 -7,990 2,449 3,823 1,718 7,990
Total allocated 0 0 $29,619 $48,073 $27,358 $105,050
b) Cost Allocation Calculations:
Personal cost = Personal Cost divided by the number of employees in the other departments
= $12,900/30 = $430 per employee
Payroll cost = Payroll cost divided by the total gross payroll in the other departments, excluding personnel and payroll departments
= $7,990/37,200 = $0.21478
c) Allocation of service departments' costs is a method of apportioning costs incurred by service departments to the production departments so that the costs could be captured in the production costs. There are three methods for allocating service departments' costs to the production departments. The first and the simplest is the direct method, whereby the costs of service departments are allocated directly to each production department based on the consumption of the service department's services.
The second method is the step method. With this method, the costs of one service department with the highest cost are allocated to all other departments, including production and other service departments following a stepping methodology. The costs of the next service department are allocated to the remaining departments. This step is continued until all the service departments' costs have been allocated. Note that a service department whose costs have been completely allocated would not be allocated any other cost.
The third method is the reciprocal method. This establishes the relationship among the service departments and uses the established relationship in a linear equation to allocate the costs of service departments. While it is more accurate, it is also the most complicated. Three steps are followed as follows: determine allocation bases, set up the formula, which shows the relationships, and finally add up the allocated costs to the production departments. Details cannot be discussed here.
The user of a(n) ________ conflict style assertively attempts to resolve conflict by working together with the other person to find an acceptable solution.
a. Avoiding
b. Accommodating
c. Negotiating
d. Collaborating
Answers
Answer:
d. Collaborating
Explanation:
The user of a collaborating conflict style assertively attempts to resolve conflict by working together with the other person to find an acceptable solution. It is one of the most commonly used conflict resolving styles, reason why it is also referred to as the problem solving style.
Individuals engaging in a collaborating conflict style are usually very cooperative and assertive in the process of resolving the problem.
This ultimately implies that, it usually leads to a peaceful resolution and arguably the best conflict resolving method. Also, individuals participating are availed the best opportunity.
The December 31, 2014 balance sheet of Barone Company had Accounts Receivable of $400,000 and a credit balance in Allowance for Doubtful Accounts of $32,000. During 2015, the following transactions occurred: sales on account $1,500,000; sales returns and allowances, $50,000; collections from customers, $1,250,000; accounts written off $36,000; previously written off accounts of $6,000 were collected.A. Journalize the 2015 transactions.B. If the company uses the percentage-of-sales basis to estimate bad debt expense and anticipates 3% of net sales to be uncollectible, what is the adjusting entry at December 31, 2015?C. If the company uses the percentage of receivables basis to estimate bad debt expense and determines that uncollectible accounts are expected to be 8% of accounts receivable, what is the adjusting entry at December 31, 2015?D. Which basis would produce a higher net income for 2015 and by how much?
Answers
Answer:
Barone Company
General Journal for 2015 transactions:
Debit Accounts Receivable $1,500,000
Credit Sales Revenue $1,500,000
To record sales on account.
Debit Sales Returns $50,000
Credit Accounts Receivable $50,000
To record sales returns and allowances.
Debit Cash Account $1,250,000
Credit Accounts Receivable $1,250,000
To record cash collections from customers.
Debit Allowance for Doubtful Accounts $36,000
Credit Accounts Receivable $36,000
To record uncollectible written-off.
Debit Accounts Receivable $6,000
Credit Allowance for Doubtful Accounts $6,000
To reinstate previously written off accounts.
Debit Cash Account $6,000
Credit Accounts Receivable $6,000
To record collection of previous write-off.
Adjusting Entry at December 31, 2015:
B. Using 3% of net sales:
Debit Bad Debt Expense $41,500
Credit Allowance for Doubtful Accounts $41,500
To record bad debt expense.
C. Using 8% of Receivables:
Debit Bad Debt Expense $43,120
Credit Allowance for Doubtful Accounts $43,1`20
To record bad debt expense.
D. 3% of net sales produces a higher net income and by $1,620
Explanation:
1. Accounts Receivable
Beginning balance (debit) = $400,000
Sales 1,500,000
Sales Returns & allowances (50,000)
Cash Collections (1,250,000)
Uncollectible write-off (36,000)
Reinstatement of write-off 6,000
Cash Collection (6,000)
Ending balance $564,000
2. Allowance for Doubtful Accounts
Beginning balance (Credit) $32,000
Uncollectible write-off (36,000)
Reinstatement of write-off 6,000
Balance pre-year adjustment $2,000
Using 3% of net sales
Bad debt expense $41,500
Ending balance (credit) $43,500
Balance pre-year adjustment $2,000
Using 8% of receivable balance
Bad debt expense $43,120
Ending balance (credit) $45,120
3. Allowance for Doubtful Accounts (Ending balance)
3% of net sales = $1,450,000 x 3% = $43,500
8% of receivables = $564,000 x8% = $45,120
If the December 31, 2014 balance sheet of Barone Company had Accounts Receivable of $400,000 and a credit balance in Allowance for Doubtful Accounts of $32,000. The journal entries will be:
A. Journalize the 2015 transactions.
Debit Accounts Receivable $1,500,000
Credit Sales Revenue $1,500,000
(To record credit sales)
Debit Sales Returns and Allowances $50,000
Credit Accounts Receivable $50,000
(To record credit to customers)
Debit Cash $1,250,000
Credit Accounts Receivable $1,250,000
(To records collection of receivables)
Debit Allowance for Doubtful Accounts $36,000
Credit Accounts Receivable $36,000
(To record write of specific account)
Debit Accounts Receivable $6,000
Credit Allowance for Doubtful Accounts $6,000
(To record written off accounts)
Debit Cash Account $6,000
Credit Accounts Receivable $6,000
(To record collection of previous write-off)
B. Preparation of the journal entry using the percentage-of-sales basis
Percentage-of-sales basis:
Sales revenue $1,500,000
Less: Sales Returns and Allowances $50,000
Net Sales $1,450,000
($1,500,000-$50,000)
Bad debt percentage 3%
Bad debt provision $43,500
(3%×$1,450,000)
Journal entry
Dec. 31
Debit Bad Debt Expense $43,500
Credit Allowance for Doubtful Account $43,500
C. Preparation of the journal entry using the percentage of receivables basis
Percentage of receivables basis
Account receivable
Dr Cr
$400,000 $50,000
$1,500,000 $1,250,000
$6,000 $36,000
$6.000
Bal. $564,000
Allowance for Doubtful Accounts
Dr Cr
$36,000 $32,000
$6,000
Bal. $2,000
Required balance $45,120
($564,000 × .08)
Less Balance before adjustment $2,000
Adjustment required $43,120
($45,120-$2,000)
Journal entry
Dec. 31
Debit Bad Debt Expense $43,120
Credit Allowance for Doubtful Account $43,120
D. Calculation to determine the basis that would produce a higher net income for 2015 and by how much?
Percentage-of-sales basis $43,500
(3%×$1,450,000)
Percentage of receivables basis $43,120
[($564,000 × .08) -$2,000]
Difference $380
Percentage-of-sales basis will produce a higher net income for 2015 by $380
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Ennis, Inc. has 35,000 common shares issued at a $2.25 par value of which 22,000 are outstanding. If Ennis has no other outstanding stock, what size dividend must be paid such that each share receives $3.20
Answers
Answer:
$70,400
Explanation:
The company has:
Number of Shares = 35,000
Par value = $2.25
Outstanding = 22,000
The question requires that we find the size of dividend that must be paid if each share receives $3.20:
Only Outstanding shares are included in dividends contribution.
So to pay 22,000 shares at $3.20
= 22,000 x $3.20
= $70,400
Lifeline, Inc., has sales of $603,000, costs of $255,000, depreciation expense of $62,000, interest expense of $29,000, and a tax rate of 30 percent. The firm paid out $45,000 in cash dividends. What is the net income for this firm?
Answers
Answer:
The net income of this firm is $179,900.
Explanation:
Net income of firm refers to sales of the firm minus cost of goods, operating expenses, selling and administrative expenses, depreciation, interest expense, taxes, and among others.
Net income is also referred to as net earnings and investors usually employ it as a metric to determine the amount by which a firm's revenue is greater than its expenses.
For this question, net income can be determined by preparing the firm's income statement as follows:
Lifeline, Inc.
Income Statement
For the Year ...
Particular Amount ($)
Sales 603,000
Cost of sales (255,000)
Gross profit 348,000
Depreciation expense (62,000)
Interest expense (29,000)
Income bore tax 257,000
Tax (30% * 257,000) (77,100)
Net income 179,900
Dividends (45,000)
Retained earnings 134,900
From the income statement above, the net income of this firm is $179,900.
_____ affects the perceptual process because employees are more likely to remember information that is consistent with their self-concept and nonconsciously screen out information (particularly negative information) that seems inconsistent with it.
Answers
Answer:
Self-Verification
Explanation:
Self-verification refers to verify themselves by other peoples. How other people understand them based on their feelings, beliefs, etc. In other words we can say self views that also includes self concepts and self esteem
In the given situation, since it affects the perceptual process as we recognized that the employees have a good memory with respect to self concept and especially negative information
On the first day of the fiscal year, a company issues $65,000, 6%, five-year installment notes that have annual payments of $15,431. The first note payment consists of $3,900 of interest and $11,531 of principal repayment. Journalize the following transactions. Be sure to include the year in the date for both entries. Refer to the Chart of Accounts for exact wording of account titles.
2016
Jan. 1 Installment notes are issued
2017
Jan. 1 First annual note payment is made
Answers
Answer: Please see explanation column for answer.
Explanation:
a) Journal to record issuance of Installment notes
Date Account Debit Credit
Jan. 1, 2016 Cash $65,000
Notes payable $65,000
b) Journal to record First annual note payment
Date Account Debit Credit
Jan. 1, 2017 Interest expense $3,900
Notes payable $11, 531
Cash $15,431
The primary thing that this more sophisticated measure of ROA better captures that the simpler version, defined as ROA* = Net Income / Total Assets, is:
Answers
Answer:
The question is incomplete, the options are missing. The options are the following:
a) It better measures how we did with our assets, irrespective of the mix of debt and equity used to finance those assets
b) It adjusts for non-recurring items in net income
c) It takes out non-cash charges that are in net income
d) It gives a higher number, so it makes the firm look better
And the correct answer is the option A: It better measures how we did with our assets, irrespective of the mix of debt and equity used to finance those assets.
Explanation:
To begin with, the term of "Return on Assets" refers to the measure that is used in the companies and in the financial world in order to understand how the company is doing with the relationship between the net income and the assets so in that way the company can be more certain about what percentage of the assets are more profitable in getting revenue back after the sales.
Intricate Wiring Corp., based in Ohio, creates a brand new high-tech product. The demand for the product in the United States is high but very low or non-existent elsewhere. The company decides not to locate manufacturing facilities elsewhere and will simply meet the small foreign demand via exports. The theory that best explains the company's policy is
Answers
Answer:a. product life cycle theory.
Explanation:
The Product Life Cycle Theory was created to explain the International trade pattern of a new product. The theory attempts to show that when a product is first invented, its demand and production inputs such as capital and labor, come from the area it was invented in. As the product starts getting more recognised and it's demand increases elsewhere, it will start to export and then continue until it starts manufacturing in other areas to feed the demand of those areas as well.
Intricate Wiring Corp's new high-tech product is following this theory because it has just started out and so its demand is based in its country of origin being the United States. For as long as this is the case, the company should focus on producing in the United States until demand picks up substantially enough to produce elsewhere.
Millitech is a sports equipment manufacturer. It wants to form a merger with an athletic wear company. This would be a
Answers
Answer:
Market extension merger.
Explanation:
If a sports equipment manufacturer wants to form a merger with an athletic wear company this would be known as a market extension merger. To further understand what a market extension merger is, here is a brief explanation.
A market extension merger has to do with when two companies that are involved in similar products, either in production or sales come together to combine their different markets. Both companies would benefit from this merger because through this they would reach a bigger customer base.
Bibby Auto Shop uses a normal job-costing system to allocate overhead on the basis of labour hours. For the current year, Bibby estimated that the total overhead costs would be $72,000 and that the total labour hours would be 2,400. At the end of the year, Bibby obtained the actual overhead costs from the ledger and found that the shop had incurred $65,800 and had worked 2,350 labour hours.
1. Compute the redetermined (budgeted) overhead rate.
Overhead Rate:__________.
2. Compute the overhead amount that was applied for the year.Was overhead under applies or over applied?
3. Prepare the journal entry to close the overhead account. Assume that the underapplied and overapplied overhead was not material.
Answers
Answer:
Answer:
1.) Overhead Absorption rate= $30 per hour
2) Absorbed overhead= $70,500
Over-absorbed overhead=$4700
3) Journal entry:
Debit Manufacturing overhead expense $4,700
Credit Cost of goods sold $4,700
Explanation:
Overhead Absorption rate = Budgeted overhead /Budgeted labour hours
= 72,000 /2,400 hours = $30 per hour
Absorbed overhead = OAR × Actual labour hours
=$30 × 2350 = $70,500
Over-absorbed overhead = Absorbed overhead - Actual overhead
= $70,500 - $65,800 = $4700
Journal entry:
Debit Manufacturing overhead expense $4,700
Credit Cost of goods sold $4,700
Answer:
Overhead Absorption rate= $30 per hour
Absorbed overhead= $70,500
Over-absorbed overhead=$4700
Journal entry:
Debit Manufacturing overhead expense $4,700
Credit Cost of goods sold $4,700
Suppose that the risk free rate is 5 and the market portfolio has an expected return of 13 with a volatility of 18 Monsters Inc has a 24 volatility and a correlation with the market of 60 while California Gold Mining has a 32 volatility and a correlation with the market of 7 Assume the CAPM assumptions hold. Monsters' required return is closest to:
a. 15.5%
b. 11.5%
c. 13.0%
d. 10.0%
Answers
Answer:
The answer is option (b) 11.5 %
Explanation:
Solution
Given that
Risk free rate =Rf
= 5%
The market portfolio expected return is = E[Rm]
= 13%
Volatility or standard deviation of market return=σm
=18%
Volatility or standard deviation of Monsters' Inc. return =σi
=24%
The correlation of Monsters' Inc. return with the market = 0.6
Thus
Beta of Monsters' Inc. is computed by applying the formula shown below:
βi =Cov (i,M)/σ²m =ρ * σi *σm/σ²m
= ρ * σi/ σm
Here,
Cov(i,m) is the Covariance between the stick and the market return which is given by the formula below:
Cov(i,m) = ρ* σi*σm
ρ refers to the correlation between the stock i return and Market return
Hence, Beta of Monsters' Inc. becomes:
βi = (0.6*24%)/18% = 0.8
Now we compute the required return on Monsters Inc we will use the CAPM Equation given as:
CAPM Equation:
E[Ri] = Rf + βi*(E[Rm]-Rf)
So,
The Required return on Monsters' Inc. stock = E[Ri] =5% + 0.8*(13% - 5%)
= 5%+6.4%
=11.4%
Therefore Monsters' required return is nearest to: 11.4 % or 11.5%
Filling your individualf ederal tax returns would be best described what type of value chain?
Answers
Answer: Government to customer (G2C)
Explanation:
Filing is one of the requirements of any business person to give proper record of what they did in their business and how they delivered to the masses. This is proper for tax clearance and returns. When filing your individual tax returns the value chain is known as government to customer (G2C). This is recommended.
Darin has a tax basis of $7,000 and an at-risk amount of $5,000 in a partnership where he is a 25% owner. The partnership incurred a loss of $40,000 in the current year. How much of the loss will be allocated to Darin and how much will he be able to deduct in the current year assuming he materially participates in the business
Answers
Answer:
Darin will have a $10000 and also he will be able to deduct $5,000.
Explanation:
Solution
Recall that:
Darin tax basis =$7000
Risk amount = $5000
Loss incurred = 40,000 (current year)
Ownership =25%
Now
With regards to his share the loss will be 25% of $40000, that is $10000 and he will be able to deduct only $5000 because of his at-risk amount is this and as per Sec. 465.
Or
40000 * 25% = $10000
He will deduct $5000 from $10000 only
Hence $10,000 of the loss will flow-through to Darin, and he will be able to deduct $5,000.
Hillyard Company, an office supplies specialty store, prepares its master budget on a quarterly basis. The following data have been assembled to assist in preparing the master budget for the first quarter:
a. As of December 31 (the end of the prior quarter), the company’s general ledger showed the following account balances:
Debits Credits
Cash $ 48,000
Accounts receivable 224,000
Inventory 60,000
Buildings and equipment (net) 370,000
Accounts payable $ 93,000
Common stock 500,000
Retained earnings 109,000
$ 702,000 $ 702,000
b. Actual sales for December and budgeted sales for the next four months are as follows:
December(actual) $ 280,000
January $ 400,000
February $ 600,000
March $ 300,000
April $ 200,000
c. Sales are 20% for cash and 80% on credit. All payments on credit sales are collected in the month following sale. The accounts receivable at December 31 are a result of December credit sales.
d. The company’s gross margin is 40% of sales. (In other words, cost of goods sold is 60% of sales.)
e. Monthly expenses are budgeted as follows: salaries and wages, $27,000 per month: advertising, $70,000 per month; shipping, 5% of sales; other expenses, 3% of sales. Depreciation, including depreciation on new assets acquired during the quarter, will be $42,000 for the quarter.
f. Each month’s ending inventory should equal 25% of the following month’s cost of goods sold.
g. One-half of a month’s inventory purchases is paid for in the month of purchase; the other half is paid in the following month.
h. During February, the company will purchase a new copy machine for $1,700 cash. During March, other equipment will be purchased for cash at a cost of $84,500.
i. During January, the company will declare and pay $45,000 in cash dividends.
j. Management wants to maintain a minimum cash balance of $30,000. The company has an agreement with a local bank that allows the company to borrow in increments of $1,000 at the beginning of each month. The interest rate on these loans is 1% per month and for simplicity we will assume that interest is not compounded. The company would, as far as it is able, repay the loan plus accumulated interest at the end of the quarter.
Required:
Using the data above, complete the following statements and schedules for the first quarter:
1. Schedule of expected cash collections:
2-a. Merchandise purchases budget:
2-b. Schedule of expected cash disbursements for merchandise purchases:
3. Cash budget:
4. Prepare an absorption costing income statement for the quarter ending March 31.
5. Prepare a balance sheet as of March 31.
Answers
Answer:
Hillyard Company
1. Schedule of expected cash collections:
January February March April
December(actual) $ 280,000
January $ 400,000 80,000 $320,000
February $ 600,000 120,000 $480,000
March $ 300,000 60,000 $240,000
April $ 200,000 40,000
Total $360,000 $440,000 $540,000
2-a. Merchandise purchases budget:
January February March
Cost of goods sold 240,000 360,000 180,000
Ending Inventory 90,000 45,000 30,000
Goods available 330,000 405,000 210,000
Opening Inventory (60,000) (90,000) (45,000)
Purchases $270,000 $315,000 $165,000
2-b. Schedule of expected cash disbursements for merchandise purchases:
Budgeted Purchases Disbursement:
January February March April
December(actual) $ 93,000
January $270,000 135,000 $ 135,000
February $315,000 157,500 $ 157,500
March $165,000 82,500 $ 82,500
Total $228,000 $292,500 $240,000
3. Cash budget:
January February March Total
Beginning balance $48,000 $30,000 $30,800 $48,000
Cash collections 360,000 440,000 540,000 1,340,000
Total $408,000 $470,000 $570,800 $1,388,000
Disbursements:
Purchases 228,000 292,500 240,000 (760,500)
Salaries & wages 27,000 27,000 27,000 (81,000)
Advertising 70,000 70,000 70,000 (210,000)
Shipping (5% sales) 20,000 30,000 15,000 (65,000)
Other Expense 3% 12,000 18,000 9,000 (39,000)
Equipment 1,700 84,500 (86,200)
Dividend 45,000 (45,000)
Total disbursement $402,000 $439,200 $445,500 (1,286,700)
Loan + Interest 24,000 24,720 ( 720)
Ending balance 6,000 30,800 100,580 100,580
Required
Minimum cash bal. 30,000 30,000 30,000
Interest on loan = $720 ($24,000 x 1% x 3)
4. Prepare an absorption costing income statement for the quarter ending March 31:
Sales $1,300,000
Cost of goods sold 780,000
Gross profit $520,000
Expenses:
Salaries & Wages 81,000
Advertising 210,000
Shipping expense 65,000
Other expenses 39,000
Depreciation 42,000
Interest expense 720 (437,720)
Net Income 82,280
5. Prepare a balance sheet as of March 31:
Assets:
Cash $100,580
Accounts Receivable 240,000
Inventory 30,000
Buildings & Equipment 414,200
Total Assets $
Liabilities + Equity:
Accounts Payable $82,500
Common Stock 500,000
Retained Earnings 146,280
Total $
Explanation:
a) Data:
General Ledger Balances:
Debits Credits
Cash $ 48,000
Accounts receivable 224,000
Inventory 60,000
Buildings and equipment (net) 370,000
Accounts payable $ 93,000
Common stock 500,000
Retained earnings 109,000
$ 702,000 $ 702,000
b) Budgeted Cash Collections
January February March April
December(actual) $ 280,000
January $ 400,000 80,000 $320,000
February $ 600,000 120,000 $480,000
March $ 300,000 60,000 $240,000
April $ 200,000 40,000
Total $360,000 $440,000 $540,000
Ending Accounts Receivable balance = $240,000
c) Cost of goods sold
January February March Total
Sales $400,000 $600,000 $300,000 $1,300,000
Shipping costs 5% 20,000 30,000 15,000 65,000
Other Expense 3% 12,000 18,000 9,000 39,000
Depreciation 42,000
Cost of goods sold 240,000 360,000 180,000 780,000
Ending Inventory 90,000 45,000 30,000
Goods available 330,000 405,000 210,000
Opening Inventory (60,000) (90,000) (45,000)
Purchases 270,000 315,000 165,000
b) Budgeted Purchases Disbursement:
January February March April
December(actual) $ 93,000
January $270,000 135,000 $ 135,000
February $315,000 157,500 $ 157,500
March $165,000 82,500 $ 82,500
Ending Accounts Payable balance = $82,500
c) Retained Earnings:
Beginning $109,000
Net Income 82,280
Dividends (45,000)
Ending $146,280
d) Buildings & Equipment 370,000
New additions: 86,200
Less Depreciation expense (42,000)
Balance, net $414,200
Pearson Motors has a target capital structure of 45% debt and 55% common equity, with no preferred stock. The yield to maturity on the company's outstanding bonds is 10%, and its tax rate is 25%. Pearson's CFO estimates that the company's WACC is 13.00%. What is Pearson's cost of common equity
Answers
Answer:
0.175 or 17.5%
Explanation:
The calculation of the cost of common equity is shown below:-
WACC = Weight of Equity × Cost of Equity + Weight of Debt × ( 1- Tax rate) × Cost of Debt
0.13 = (0.55 × Cost of equity) + ((0.45 × (1 - 0.25) × 0.10)
0.13 = (0.55 × Cost of equity) + 0.045 × 0.75
(0.55 × Cost of equity) = 0.13 - 0.03375
(0.55 × Cost of equity) = 0.09625
Cost of equity = 0.09625 ÷ 0.55
= 0.175
Therefore for computing the cost of equity we simply applied the above formula.
The company had a net income of $248,462, and depreciation expenses were equal to $72,487. What is the firm's cash flow from financing activities?
Answers
Complete Question:
The complete question can be seen the in the attachment at the end of the solution of the question.
Answer:
Option B. -$182,057
Explanation:
The Cash flow from financing activities can be calculated by using the following formula:
Cash flow from financing activities = Changes in the equity finance
+ Changes in long term borrowings + Changes in short term borrowings
- Interest paid - Dividends paid
Here
Changes in the equity = $175,000 common stock in year 2008
- $125,000 common stock in year 2008 = $50,000
Changes in long term Borrowings = $61,290 - $78,445 = - $17,155
Changes in short term Borrowings = $16,753 - $12,004 = $4749
Interest paid is $0 because interest rate is not given hence we can't calculate it.
Dividends paid = $190,568 Opening Retained Earnings + $248,462 Net Profit for the year - $219,379 Closing Retained Earnings = $219,651
Now, by putting values in the above equations, we have:
Cash flow from financing activities = $50,000 - $17,155 + $4749 - 0 - $219,651 = -$182,057
If a firm's goal is to maximize its earnings per share, this is the best way to maximize the price of the common stock and thus shareholders' wealth.
Answers
Answer:
False
Explanation:
As maximization of the earnings per share might not be the same thing as the wealth maximization which is the primary goal of the company because the company not only has to generate higher profits but also manage all the risks of the entity which might increase by unethical trading in race to increase earnings per share. Furthermore, to enjoy less costly debt finance which would increase the earnings per share, would result in increase in financial risk, which might again head the company towards disaster if not well managed.
The other solid point against the statement would be that the primary purpose can not be the maximization of earnings per share as it stresses upon spending less on corporate social responsibility and as the result the company stock will be less valued at stock exchange. The less valued stock is because the companies like Dow and S & P Global adds no green value to the stock if the company is not spending on social responsibility programs.
Hence the statement is incorrect.
Starting from a long run steady state equilibrium, significant increase in individual income taxes was announced. In the long run after market adjustments the economy will
A. experience a small deflation but aggregate output returns to the potential output level.
B. experience a small inflation but aggregate output returns to the potential output level.
C. experience a large inflation but aggregate output remains less than the potential output level.
D. experience a large deflation but aggregate output remains less than the potential output level.
Answers
Answer:
A
Explanation:
Here, we want to know what will happen in the long run after market adjustments when we start from a long run steady state equilibrium.
An increase in income taxes will shift the adjustment to the left. This will cause deflation.
After this adjustment, the net effect will be a small deflation, but output returns to potential level.
An 85-year old risk averse investor is not happy about the minimal return she is earning on her current investments. She is stressed about having enough income because her cost of living has been increasing by more than 10% annually. Her current portfolio composition consists of:
Answers
An 85-year old risk averse investor is not happy about the minimal return she is earning on her current investments. She is stressed about having enough income because her cost of living has been increasing by more than 10% annually. Her current portfolio composition consists of:
40% Money Market Fund
50% Bonds
10% Equities
What changes should you suggest to her portfolio?
A. Reduce the Money Market Fund allocation by 10% (to 30%) and put the released funds in commodities such as gold
B. Reduce the Money Market Fund allocation by 30% (to 10%) and put the released funds in AAA-rated corporate bonds
C. Liquidate the entire Money Market Fund allocation and put the released funds in Equities, bringing that allocation up to 50%
D. Liquidate the entire Money Market Fund allocation and put the released funds in U.S. Treasury securities
Answer:
Reduce the Money Market Fund allocation by 30% (to 10%) and put the released funds in AAA-rated corporate bonds
Explanation:
Given that AAA rated bonds are considered to be the highest possible rating that may be assigned to an issuer's bonds by any of the major credit rating agencies, with the smallest risk of default.
Hence, given the situation above with the 85 years old woman, the changes to make to her portfolio is to Reduce the Money Market Fund allocation by 30% (to 10%) and put the released funds in AAA-rated corporate bonds
The capital expansion will cost 320,000. they are planning on receiving a revenue of 3.00 per unit and a varible cost of 1.20 per unit. How many units are needed to break even?
Answers
Answer:
177,777.78
Explanation:
Breakeven point is the number of units produced and sold at which net income is equal to zero
Break even point = fixed cost / price - variable cost
320,000 / 3 - 1.2 = 177,777.78
If Push Company owned 51 percent of the outstanding common stock of Shove Company, which method would be appropriate for financial reporting purposes?
Answers
Answer:
Consolidation
Explanation:
Holding method is required for the parent company for financial reporting if the parent company owns 51 percent of more outstanding common stock in the subsidiary.
Here consolidate refers to the combining of total assets and liabilities of two or more entities into one so that it could be maintained as a one firm
Therefore for financial reporting consolidation is appropriate
A car dealership spends $140,000 on cars to stock their lot. After a day of sales, they earn a total revenue of $300,000. What is the car dealership's profit
Answers
Answer:
$160,000
Explanation:
Calculation of the car dealership's profit
Using this formula
Profit= Total revenue- Amount Spend
Where,
Total revenue=$300,000
Amount Spend=$140,000
Let plug in the formula
Profit =300,000-140,000
Profit =160,000
Therefore the car dealership's profit will be $160,000
IAS 16. Fixed Assets. We are a graphic arts company, and at the beginning of 2016, we acquired a new printer. The price of this printer was 25,000 euros. The additional expenses of the purchase were as follows:
Answers
Answer:
1.Initial Acquisition cost €24,882.15
2.Amortization fee €1,688.215
3.The costs derived from daily maintenance €30,000
Explanation:
1. Calculation for the initial cost of the acquisition for IAS 16. Fixed Assets.
Using this formula
Initial Acquisition cost = (Purchase price + Additional direct expenses relative to acquisition) - (Depreciation + Amortization + taxes + impairment costs)
Let plug in the formula
Initial Acquisition cost= (25,000+ 3.00+1.150) - (122)
Initial Acquisition cost =25,004.15-122
Initial Acquisition cost = 24,882.15 Euro
Therefore the Initial Acquisition cost will be €24,882.15
2.Calculation for the amortization fees.
Using this formula
Amortization fees = total interest amount/period in the debt's life
Let plug in the formula
Interest amount= 24,882.15-5000- (250*12)
Interest amount =19,882.15-3,000
Interest amount= 16,882.15
Hence, Amortization fee will be :
Interest amount/Period in the debt's life
Where,
Interest amount=16,882.15
Period in the debt's life=10 years
Amortization fee =16,882.15/10 years
Amortization fee= €1,688.215
Therefore the Amortization fee will be €1,688.215
3.Calculation for he costs derived from daily maintenance
The costs derived from daily maintenance will be ;
Using this formula
Costs derived from daily maintenance= Specialised weekly maintenance× 12 month ×Numbers of years
Let plug in the formula
Costs derived from daily maintenance= 250*12*10
Costs derived from daily maintenance=30,000
Therefore the costs derived from daily maintenance will be €30,000
Based on the company’s 2013 10-K, how much long term debt is maturing between 2014 and 2016? Please provide your answer in millions without comma separator or decimal (Ex: 2345).
Answers
Answer:
Colgate Palmolive Company
The company's 2013 10-K Long-term debts maturing between 2014 and 2016:
Maturing: Amount
Year $'millions
2014 895
2015 491
2016 255
Total 1641
Explanation:
The long-term debts of Colgate Palmolive, according to the company's 2013 10-K reports are mainly commercial papers and notes, with various maturity dates. These debts would not be paid off in 2013. However, it looks like there was a misclassification of the long-term debts since the 2014 long-term debts would not take more than 12 months to mature. They should have been classified as current out-right, though there was an acknowledgement and indication that some of these long-term debts were maturing currently.
The Cash account of Gate City Security Systems reported a balance of $2,530 at December 31, 2018. There were outstanding checks totaling $ 500 and a December 31 deposit in transit of $ 400. The bank statement, which came from Park Cities Bank, listed the December 31 balance of $3,120. Included in the bank balance was a collection of $ 500 on account from Jane Lindsey, a Gate City customer who pays the bank directly. The bank statement also shows a $20 service charge and $ 10 of interest revenue that Gate City earned on its bank balance.
Requried:
Prepare Gate City's bank reconciliation at December 31.
Answers
Answer:
Gate City Security Systems
Bank Reconciliation at December 31, 2018
Book:
Balance , December 31, 2018 $2,530
Add:
Collection from Jane Lindsey $500
Interest revenue $10
Less:
Service charges $20
Adjusted book balance December 31, 2018 $3,020
Bank:
Balance , December 31,2018 $3,120
Add:
Deposit in transit $400
Less:
Outstanding cheque $500
Adjusted bank balance December 31, 2018 $3,020
Assume the same data as in Problem 2 for the cost to make a Widget. What if we could sell the widgets we make for $50 to other customers. We receive a special order for 1,000 more widgets but that customer wants to just pay $30. It would not affect our current orders or our fixed costs and we have plenty of plant capacity.
Answers
Answer:
Effect on income= number of units soldünitary contribution margin
Explanation:
Giving the following information:
We receive a special order for 1,000 more widgets but that customer wants to just pay $30.
We weren't provided with enough information regarding variable costs. But, I can provide a small example and formulas.
Because it is a special offer and there is unused capacity, we will not take into account the fixed costs.
Variable cost per unit (materials, labor, variable overhead)= $28
To calculate the effect on income, we need to use the following formula:
Effect on income= number of units soldünitary contribution margin
Effect on income= 1,000*(30 - 28)
Effect on income= $2,000 increase
Top management at Prinze Auto Sales has decided to replace their traditional marketing approach with an approach that emphasizes relationship marketing. Under this new approach, Prinze's salespeople will be expected to devote less time to current customers and a larger share of their time searching for new customers.
1. True2. False
Answers
Answer:
2. False
Explanation:
Relationship management is considered an important part of CRM (customer relationship management) and it emphasizes on building and increasing customer loyalty and long term commitment.
If this company was to replace their traditional marketing approach with relationship marketing, they would devote more time to build a solid relationship with existing customers and less time searching for new customers.