Answer:
Residual income=$374,088
Explanation:
Calculation for Cabell Products division's residual income
Formula for Residual income is:
Residual income = Net operating income - ( Average operating assets * Minimum required rate of return )
Residual income= $686,400-($2,402,400*13%)
Residual Income=$686,400-$312,312
Residual income=$374,088
Therefore the division's residual income is closest to:$374,088
Determine the difference in the present worth of the following two commodity contracts at an interest rate of 8% per year. Contract 1 has a cost of $10,000 in year 1; this cost will escalate at a rate of 4% per year for ten years. Contract 2 has a present cost of $80,520.
Answer:
Difference = 4418.64
Explanation:
We first need to determine the present value of the contract 1. We already have the present value of contract 2.
The present value of contract 1 will be,
Present value = 10000/(1.08) + 10000*(1.04)/(1.08)^2 +
10000*(1.04)^2/(1.08)^3 + 10000*(1.04)^3/(1.08)^4 + 10000*(1.04)^4/(1.08)^5 + 10000*(1.04)^5/(1.08)^6 + 10000*(1.04)^6/(1.08)^7 + 10000*(1.04)^7/(1.08)^8 + 10000*(1.04)^8/(1.08)^9 + 10000*(1.04)^9/(1.08)^10 +
10000*(1.04)^10/(1.08)^11
Present Value-Contract 1 = 84938.63563 rounded off to 84938.64
Difference = 84938.64 - 80520 = $4418.64
1 as follows: February 3, year 1 April 15, year 1 May 28, year 1 July 5, year 1 September 30, year 1 Number of shares Purchased (sold) 1,100 2,500 (750) 1,400 (4,000) Price per share $11 9 13 12 15 Janson traded stock in Flax Co. held as trading securities during year No other transactions took place for Flax during the remainder of the year. At December 31, year 1, Flax is trading at $10 per share. Janson trades securities on a last in, first out basis. What amount is the net value of the investment in Flax at year end
Answer: The net value of the investment in Flax at year end = $2,500
Explanation: Given from the question
Year 1 Number of shares Purchased (sold) Price per share
February 3, 1,100 $11
April 15, 2,500 $9
May 28, (750) $13
July 5, 1,400 $12
September 30, (4,000) #15
From the given values above, we can see that
Total number of shares purchased for the year 1 = 1,100 + 2500 +1400= $5000
Total number of shares sold for the year 1 = 4000 + 750 = $4,750
Share Balance = $5000 - $4,750 = $ 250
but flax is trading at $10 per share
Therefore the amount of net value of investment = $250 x $10 = $2,500
Monica discovered that she can bake five pies in three hours without giving up production of any cakes. If she were operating on the production possibilities curve, this would be an example of increasing opportunity cost. decreasing opportunity cost. constant opportunity cost. zero opportunity cost. static opportunity coss.
Answer:
Zero opportunity cost
Explanation:
Opportunity cost in business is defined as the value of an alternative forgone to arrive at a more favorably valued option in the course of making a decision. Opportunity cost is necessary as every alternative is considered to have alternative usages.
However , in a situation where no alternative option is given up in arriving at a particular decision , or the given up alternatives have no value to you, it is said that the selected decision comes with no opportunity cost , that is it has a zero opportunity cost.
As Monica could still afford to bake five pies in three hours without giving up the production of any cakes , the production of pies had zero opportunity cost.
Assume that households consume only hot dogs and soda; the average household consumes 12 hotdogs and 20 bottles of soda. In 1995, a hot dog was $0.90 each and soda $0.50 each. In 2003, hotdog price went up to $1.25, and soda price went up to $1.00. If 2003 is the base year, then the price index in 1995 would be:
Answer:
The price index in 1995 would be $59.4
Explanation:
In order to calculate the price index in 1995 we would have to calculate the following formula:
price index in 1995=(Market basket at current year prices/ Market basket at base year prices)*100
Market basket at current year prices=12 hotdogs*price each hotdog+20 bottles of soda*price each bottes of soda
Market basket at current year prices=12 hotdogs*0.9+20 bottles of soda*0.5
Market basket at current year prices=$20.8
Market basket at base year prices =12*1.25+20*1
Market basket at base year prices=$35
Therefore, price index in 1995=($20.8/$35)*100
price index in 1995=$59.4
The price index in 1995 would be $59.4
How do you find the value of a bond, and why do bond prices change
Answer:
Explanation:
as the discount rate gets larger, the price of the bond will decrease. as the coupon rate increases, the bond price will increase. bond prices are calculated by taking the present value of the coupons and face value of bonds. If the coupons are larger, the present value of the coupons will also be larger.
Five hundred small almond growers operate in areas with plentiful rainfall. The marginal cost of producing almonds in these locations is given by MC = 0.02Q, where Q is the number of crates produced in a growing season. Three hundred almond growers operate in drier areas where costly irrigation is required. The marginal cost of growing almonds in these locations is given by MC = 0.04Q.A. What is the individual supply curve for each type of almond grower? (Hint: remember that supply is the relationship between the quantity supplied and price). b. Using the individual supply curves from part a), derive the market supply curve.c) If the market demand for almonds is Qd = 105,000 - 2,500P, what will the equilibrium price of almonds be? The equilibrium quantity?
d) How many almonds will each type of almond grower produce at that price?
e) Verify that the total production of all almond growers equals the equilibrium quantity you found in part (c).
Answer:
Explanation:
a. The almonds growers will supply the quantity at which price is equal to the marginal cost. For growers with plentiful rainfall, MC = 0.02Q.
P = 0.02Q
Q = 50P
For almond growers that operate in drier areas, MC = 0.04Q
P = 0.04Q
Q = 1/0.04 × P
Q = 25P
b. Market supply curve will be the number total supply multiplied by the growers.
Qs = 500(50p) + 300(25p)
= 25000p + 7500p
= 32500p
c. To find the equilibrium price, quantity demanded must equate the quantity supplied.
Qd = 105,000 - 2,500P
Qs = 32500p
Qd = Qs
105,000 - 2500p = 32500p
32500p + 2500p = 105000
35000p = 105000
p = 105000/35000
p= 3
Equilibrium Price = 3
Since Q = 32500p
Q = 32500 × 3
Equilibrium quantity = 97500
d. For growers with plentiful rainfall
Q = 25000p
= 25000 × 3
= 75000
For almond growers that operate in drier areas, they will produce:
Q = 7500p
= 7500 × 3
= 22500
e. To verify that the total production of all almond growers equals the equilibrium quantity you found in part (c) will be:
75000 + 22500 = 97500
97500 = 97500
It has been verified. It is correct.
Comparing the expenditure and resource cost-income approachesfor calculating GDP The expenditure and resource cost-income approaches to calculating GDP arrive at the same final number, but they calculate that number in different ways. To illustrate, consider the possible effects of the following transactions on GDP:
1. Alex pays Awesome Foods Market $1,000 to cater his daughter's engagement party. He's attracted by Awesome Foods Market's guarantee that he'll be happy with the catering, or he'll get his money back.
2. Awesome Foods Market pays JoAnn's Catering $900 to cater the party. 3. JoAnn's Catering buys plasticware worth $150 from Kostko.
3. Al's Lawn Care buys grass seed worth $200 from Green Center Nursery.
Compute contributions to GDP, using the expenditure approach. Assume that Green Center Nursery receives the grass seed at no charge and that other costs are zero.
Hint: Add the amount of money spent by buyers of final goods and services.
Which of the following would be included in the expenditure method of calculating GDP? Check all that apply.
a. The Home Station spends $850.
b. Ralph spends $1,200.
c. Al's Lawn Care spends $200.
The total contribution to GDP, measured by the expenditure method, is $______
Now use the following table to compute contributions to GDP, employing the resource cost-income approach. In particular, indicate the costs of intermediate goods and the value added at each stage of production.
Stage of Production Sale Value Cost of Intermediate Goods Resource Cost-Income
Green Center Nursery $200 __________ ______________
Al's Lawn Care $850 __________ __________
The Home Station $1,200 __________ __________
The contribution to GDP that you found using the expenditure approach corresponds to the sum of the___________ at each stage of production.
Answer:
Comparing the expenditure and resource cost-income approaches for calculating GDP
1. Computation of contributions to GDP, using the expenditure approach
1. Alex spends for catering his daughter's party $1,000
3. Al's Lawn Care buys grass seed $200
Total GDP = $1,200
2. Expenditure included in calculating GDP:
b. Ralph spends $1,200.
3. The total contribution to GDP, measure by the expenditure method, is $1,200.
4. Computation of Contributions to GDP, using the resource cost-income approach:
Stage of Sales Value Cost of Resource Cost-Income
Production Intermediate Goods
Primary $200 $0 $200
Intermediate $850 $200 $650
Final $1,200 $850 $350
The contribution to GDP that you found using the expenditure approach corresponds to the sum of the___$1,200________ at each stage of production.
Explanation:
Three different methods can be used to measure a country's GDP (Expenditure, Income and Production), which produce the same amount.
The expenditure method is calculated by adding total amount spent on total consumption, government purchases, net exports and investments by firms, households and government.To compute GDP under this method, all of the expenditures made on final goods and services are added up. It is widely used to estimate GDP.
The income approach calculates GDP by adding income from various production factors, including such income components as interest on capital, rent, wages, profit and salaries.
The production approach (output approach), measures GDP as the difference between value of output less the value of goods and services used in producing these outputs during an accounting period.
The Monster Truck operates several specialty vehicles that provide hot food and beverages for firms that have workers employed in outlying regions. The company has annual sales of $627,200. Cost of goods sold average 38 percent of sales and the profit margin is 5.1 percent. The average accounts receivable balance is $35,300. On average, how long does it take the company to collect payment for its services
Answer:
The answer is 20.55 days
Explanation:
Solution
Given that:
Annual sales =$627,200
Average accounts receivable =$35,300
Now
The accounts turnover ratio (receivable) = Sales/Average accounts receivable
Accounts receivable turnover ratio = $627,200/$35.300
=17.76 times
Thus
Number of days payment receives = 365/ Accounts receivable turnover ratio =365 days/17.76 times
=20.55 days
Therefore The company takes 20.55 days to get payment for its services
The nation of Cranolia used to prohibit international trade, but now trade is allowed, and Cranolia is exporting furniture. Relative to the previous no-trade situation, buyers of furniture in Cranolia are now better off.
a. True
b. False
Answer:
if im correct its true but please check or make sure from someone else but im positive its true
Explanation:
Definition of economic costs Raphael lives in San Diego and runs a business that sells guitars. In an average year, he receives $722,000 from selling guitars. Of this sales revenue, he must pay the manufacturer a wholesale cost of $422,000; he also pays wages and utility bills totaling $268,000. He owns his showroom; if he chooses to rent it out, he will receive $2,000 in rent per year. Assume that the value of this showroom does not depreciate over the year. Also, if Raphael does not operate this guitar business, he can work as a paralegal, receive an annual salary of $21,000 with no additional monetary costs, and rent out his showroom at the $2,000 per year rate. No other costs are incurred in running this guitar business.
Identify each of Felix’s costs as either an implicit cost or an explicit cost of selling guitars.
a. The wholesale cost for the guitars that Felix pays the manufacturer
b. The rental income Felix could receive if he chose to rent out his showroom
c. The salary Felix could earn if he worked as a paralegal
d. The wages and utility bills that Felix pays
Complete the following table by determining Felix’s accounting and economic profit of his guitar business.
Profit (Dollars)
Accounting Profit
Economic Profit
Answer:
a. The wholesale cost for the guitars that Felix pays the manufacturer
explicit cost (or accounting cost)b. The rental income Felix could receive if he chose to rent out his showroom
implicit cost (or opportunity cost)c. The salary Felix could earn if he worked as a paralegal
implicit cost (or opportunity cost)d. The wages and utility bills that Felix pays
explicit cost (or accounting cost)Felix's accounting profit = $722,000 - $422,000 - $268,000 = $32,000
Felix's economic profit = accounting profit - implicit costs = $32,000 - ($21,000 + $2,000) = $32,000 - $23,000 = $9,000
Opportunity costs are the extra costs or benefits lost from choosing one activity or investment over another alternative.
Vaughn Manufacturing purchased office supplies costing $7140 and debited Supplies for the full amount. At the end of the accounting period, a physical count of office supplies revealed $2550 still on hand. The appropriate adjusting journal entry to be made at the end of the period would be:
Answer:Debit supplies expense $4,590; Credit supplies 4,590
Explanation:
office supplies cost and debited = $7140
Amount still on hand = $2550
Supplies expense = $7140 -$2550=$4, 590
An adjusting journal entry is an entry in financial reporting that records income expenses not noticed so as to adjust the amount before financial statement are made at the end of a reporting period.
The appropriate adjusting journal entry to be made at the end of the period would be.
Account and explanation Debit Credit
Supplies expense $4, 590
supplies $4, 590
Check the right boxes in the table below:
Statement Approximate Detailed
Estimates Estimates
A. Requires completed design documents
B. Used for bidding
C. Used for feasibility studies
D. Requires high effort
E. Used for comparing alternative projects or designs
F. Used for project control
G. Quick and has high margin of error
H. Used for making initial financial arrangements
I. Its concept depends on comparing the unit cost to
similar previous projects
J. Its concept depends on actual quantities and estimated
prices for the estimated project
Answer and Explanation:
The approximate estimates refer to the prediction of the nearest value while on the other hand, the detailed estimates refer to the estimation of the project or product that required a detailed analysis
based on the above explanation, the classification is as follows
A. Detailed estimates. As it required completed documents with respect to the design that needs comprehensive analysis
B. Approximate estimates. As the bidding is used so it required only approximation estimates
C. Approximate estimates. As the feasibility studies are used so it required only approximation estimates
D. Detailed estimates. If the project required high effort so detailed analysis should be there.
E. Approximate estimates. For comparing the alternative projects we needed detailed estimates
F. Detailed estimates. For project control, we required nearest value estimates
G. Approximate estimates. Since there is a high margin of error which required only prediction values to the nearest value
H. Detailed estimates. For making initial financial arrangements we need detailed analysis
I.Approximate estimates. For comparing the unit cost with respect to the same last projects we need prediction estimates
J. Detailed estimates. Since the concept based on actual quantities and there is a prediction price for estimating the project so in this we required detailed estimates.
E-Eyes has a new issue of preferred stock it calls 20/20 preferred. The stock will pay a $20 dividend per year, but the first dividend will not be paid until 20 years from today. The required return on the stock is 7.75 percent.
Required:
On this stock, how much should you pay today?
Answer:
$63.27
Explanation:
Calculation of how much should you pay on the stock today
First step
The Price of stock 19 years from now will be:.
20/0.075
= 266.67
Second step
The Price of stock today will be :
The price of stock from 19 years from now which is:
250 / (1.075)^19
=250/3.951489
=$63.27
Therefore how much should you pay on the stock today will be $63.27
In Rooney Company, direct labor is $20 per hour. The company expects to operate S at 10,000 direct labor hours each month. In January 2017, direct labor totaling $206,000 b is incurred in working 10,400 hours. Prepare (a) a static budget report and (b) a flexible P budget report. Evaluate the usefulness of each repor.
Answer and Explanation:
The preparation is presented below;
a. For a static budget report
Product line Budget Actual Difference
Direct labor $200,000 $206,000 $6,000 unfavorable
(10,000 direct labor hours × $20 per hour)
It is unfavorable as the budget is less than the actual
b. For a flexible budget report
Product line Budget Actual Difference
Direct labor $208,000 $206,000 $2,000 favorable
(10,400 direct labor hours × $20 per hour)
It is favorable as the budget is more than the actual
Lindell Co. expects to purchase $19,100 of materials in July and $22,700 of materials in August. 70.00% of all purchases are paid for in the month of purchase, and the remaining 30.00% are paid for in the month following the month of purchase. What will be the company's cash disbursements in August?
A corporation can earn 7.5% if it invests in municipal bonds. The corporation can also earn 8.30% (before-tax) by investing in preferred stock. Assume that the two investments have equal risk. What is the break-even corporate tax rate that makes the corporation indifferent between the two investments? Assume a 70% dividend exclusion for tax on dividends. (Do not round your intermediate answer and round your final answer to two decimal places.)
Answer:
32.13%
Explanation:
The computation of the break-even corporate tax is shown below:
As we know that
Municipal bond return = preferred stock return before tax × [1 - (1 - dividend exclusion) × Break even corporate tax]
7.5 = 8.30 × [1 - ( 1 - 0.70) × Break even corporate tax ]
7.5 ÷ 8.30 = 1 - 0.30 × Break even corporate tax
0.9036 = 1 - 0.30 × Break even corporate tax
0.30 × Break even corporate tax = 1 - 0.9036
So, Break even corporate tax is
= 0.0964 ÷ 0.30
= 32.13%
Basically we applied the above formula
Hulston Appliances Co. wants to introduce a new digital display, laser driven iron to the market. The estimated unit sales price is $44.00. The required investment is $88,000. Unit sales are expected to be 8,800 and the minimum required rate of return on all investments is 10.00%. Compute the target cost per iron.
Answer:
Target cost per unit = $43 per unit
Explanation:
Target cost is the cost at which a product must be produced and sold to achieve a desired profit margin
Target cost =(Sales revenue - (ROI × capital) )/ No of units
Target cost =( (44 × 8,800) - (10%× $88,000 ) )/ 8,800 guns
Target cost per unit = (387200 - 8800 ) / 8,800 units= $43 per unit
Target cost per unit = $43 per unit
On December 1, Novak Corp. has three DVD players left in stock. All are identical, all are priced to sell at $181. One of the three DVD players left in stock, with serial#1012, was purchased on June 1 at a cost of $40. Another, with serial #1045, was purchased on November 1 for $34. The last player, serial #1056, was purchased on November 30 for $33.
(a) Calculate the cost of goods sold using the FIFO periodic inventory method assuming that two of the three players were sold by the end of December, Discount Electronics' year-end.
(b) If Discount Electronics used the specific identification method instead of the FIFO method, what would Bargain's cost of goods sold be if the company wished to minimize earnings?
Answer:
Novak Corp.a) Calculation of the cost of goods sold using FIFO:serial#1012 June 1 $40
serial #1045 November 1 $34
Total cost of goods sold $74
b) Calculation of the cost of goods sold under Specific Identification to minimize earnings:serial#1012 June 1 $40
serial #1045 November 1 $34
Total cost of goods sold $74
Explanation:
a) Inventory Summary:
Serial No. Purchase Date Unit Cost
serial#1012 June 1 $40
serial #1045 November 1 $34
serial #1056 November 30 $33
b) For specification identification and in order to minimize earnings, the company would choose report on products with higher costs.
What provision in an independent contractor agreement states the associate will not hold the broker responsible for claims, demands, suits, costs or expenses based on the associates representation of the agreement
What provision in an independent contractor agreement states the associate will not hold the broker responsible for claims, demands, suits, costs or expenses based on the associates' representation of the agreement?
A) Disputes and Litigation
B) Termination of Agreement
C) Indemnification
D) Regulatory Compliance
Answer:
The correct option is C) Indemnification Clause
Explanation:
This simply means that if the associate is found liable by a third-party due to errors and omissions or any action of tort, the principal or the broker, will not be vicariously held liable.
This clause may seem unfair given that for the most part of the relationship, the associate and the broker are bound by similar interests. However, sometimes one party may become self-focused, and this results in errors which translate to lawsuits.
This clause is a way of protecting the Broker. It is also implied that the associate will also enjoy immunity from any costs and damages which the broke may be held liable to.
Cheers!
A company began its operations on April 1 of the current year. Budgeted sales for the first three months of business are $250,000, $320,000, and $410,000, respectively, for April, May, and June. The company expects to sell 50% of its merchandise for cash. Of sales on account, 60% are expected to be collected in the month of the sale, 40% in the month following the sale. The budgeted cash collections in May are:
Answer:
Total cash collection May= $306,000
Explanation:
Giving the following information:
Sales:
April= $250,000
May= $320,000
June= $410,0000
The company expects to sell 50% of its merchandise for cash. Of sales on account, 60% are expected to be collected in the month of the sale, 40% in the month following the sale.
Cash collection May:
Sales on cash May= 320,000*0.5= 160,000
Sales on Account May= (160,000*0.6)= 96,000
Sales on Account April= (250,000*0.5)*0.4= 50,000
Total cash collection May= $306,000
The accounting department prepares a bank reconciliation at the end of each month. The following Table Dashboard is provided to assist in our reconciliation for the month of November.
Bank Balance is $15000 at 31th Oct.. Bank Balance is $9700 at 15th November. Bank Balance is $16028 at 30th November.
Book Balance is $15000 at 31th Oct. Book Balance is $9100 at 15th November. Book Balance is $16127 at 30th November.
Cash interest received on Bank Balance: Augugst $31, September $24, October $22 November $37.
Total Deposits in Transit November 30: $250
Outstanding Checks at Nov.30: Check#1203 : $100 Check#1278 : $78.
November Bank Fees: Check Printing Fees: $35, Service Fees: $15, Wire Transfer Fees: $14.
1. Determine the company's (a) bank balance and (b) book balance on November 30 before the bank reconciliation.
2. What is the amount of cash interest received in the month of November?
3. Which of the bank fees is the largest of those charged to the company in November?
Answer: Please see explanation for answer
Explanation:
Bank Reconciliation statement for the month of November
Balance from bank statement $16,028
Deposit in transit +250
Outstanding checks
check1203 -100
check 1278 -78
Total outstanding checks - 178
Adjusted cash balance $16,100
Balance from Company account $16,127
Interest earned $37
Bank fees
Check Printing Fees $35,
Service Fees: $15,
Wire Transfer Fees $14
Total Bank fees -64
Adjusted cash balance $16,100
1.The company's
(a) bank balance on November 30 before the bank reconciliation= $16,028
(b) book balance on November 30 before the bank reconciliation =$16,127
2. Amount of cash interest received in the month of November = $37.
3. Bank fees charged in November is given as
Check Printing Fees: $35, Service Fees: $15, Wire Transfer Fees: $14.
The largest here is the Check Printing Fees at $35
Large private organizational buyers and government agencies make large- volume or large-value purchases through also known as *.reverse auctions viral marketing O online direct marketing O name-your-own-price models O electronic tendering systems
Answer: Electronic tendering system
Explanation:
Electronic tendering system is an internet based method whereby the tendering process is completed. This is typically used.by large organizations or government agencies when they want to make large purchases.
The tendering process from the advertisement to the receiving and submitting of every information that are relating to the tender will be done online.
This method helps in efficiency because it reduces or completely eliminates paper-based transactions which therefore brings about a faster exchange of information.
Rennie Norquist is a recent law school graduate. She is employed at Dillard Dobbs Dooley & Duncan, LLP, a 200 lawyer firm. Rennie is well paid at $98,000 per year. However, she thinks she should be paid overtime for all the hours she works because she spends over 70 hours a week researching the law and writing legal memoranda. Which of the following is a correct statement?
a. Rennie is eligible for overtime under the new FLSA regulations because she makes less than $100,000 per year.
b. Rennie is not eligible for overtime under the new FLSA regulations because, as a professional worker, she is exempt from overtime regulations.
c. Rennie is entitled to overtime because, as a recent graduate, she is in training.
d. None of the above choices is correct.
Answer:
b. Rennie is not eligible for overtime under the new FLSA regulations because, as a professional worker, she is exempt from overtime regulations.
Explanation:
According to the Fair Labor Standards Act (FLSA) certain employees are exempt from overtime regulations:
executives (top management and board of directors)professionals: Rennie falls under this category because she already graduated from law school. administrativecomputerexternal salesAnyone that falls under any of these categories, is exempt from overtime pay and other FLSA regulations.
Peanuts are an input in the production of peanut butter. If a decrease in the supply of peanuts increases the price of peanuts, what will happen to the equilibrium price and quantity in the peanut butter market?
Answer:
Equilibrium price would rise
Equilibrium quantity would fall
Explanation:
If the supply of peanuts falls, it would lead to a rise in the price of peanuts because the demand for peanuts woild exceed its supply.
The rise in price would increase the cost of production of peanut butter because peanut is an input in the production of peanut butter. This rise in cost would discourage suppliers and supply of peanut butter would fall. As a result equilibrium quantity would fall. As a result of a fall in supply of peanut butter, demand would exceed supply and equilibrium price would rise.
I hope my answer helps you
Answer:
^
Explanation:
Flint Company buys merchandise on account from Windsor, Inc.. The selling price of the goods is $1,050, and the cost of the goods is $660. Both companies use perpetual inventory systems.
Required:
Journalize the transaction on the books of both companies.
Answer and Explanation:
The journal entries are shown below:
On the books of Flint Company
Merchandise Inventory $1,050
Accounts payable $10,50
(Being Merchandise purchased on account is recorded)
For recording this we debited the inventory as it increased the assets and credited the account payable as it is also increased the liabilities
On the books of Windsor Inc. Company
Accounts Receivable $1,050
To Sales $1,050
(Being Merchandise sold on account is recorded)
For recording this we debited the account receivable as it increased the assets and credited the sales as it also increased the sales
Cost of goods sold $660
To Merchandise inventory $660
(Being the cost of merchandise is recorded)
For recording this we debited the cost of goods sold as it increased the expenses and credited the inventory as it decreased the assets
A zero-coupon bond is selling at a deep discount price of $450. It matures in 11 years. If the yield to maturity of the bond is 6.2%, what is the duration of the bond (rounded to two places)
Answer:
Duration is 11 years
Explanation:
The Duration of a zero coupon bond is equal to it's maturity. Since it matures at 11 years the duration of the bond is therefore also 11 years.
It is a bond that pays no interest. A zero-coupon bond is a bond where the face value is what is repaid during the time of maturity. There are no periodic interest payments, or have so-called coupons, that is why they are referred to as zero-coupon bond. Investor gets par value when it matures.
Lincoln Company purchased merchandise from Grandville Corp. on September 30, 2018. Payment was made in the form of a noninterest-bearing note requiring Lincoln to make six annual payments of $4,600 on each September 30, beginning on September 30, 2021. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the tables provided.)Required: Calculate the amount at which Lincoln should record the note payable and corresponding purchases on September 30, 2018, assuming that an interest rate of 11% properly reflects the time value of money in this situation. Amount recorded
Answer:
Dr purchases $ 15,794.56
Cr notes payable $ 15,794.56
Explanation:
The present value of the annual payments of $4,600, starting in three years' time is computed as shown below:
PV of annual payments=$4600/(1+11%)^3+$4600/(1+11%)^4+$4600/(1+11%)^5+$4600/(1+11%)^6+$4600/(1+11%)^7+$4600/(1+11%)^8=$ 15,794.56
The amount of purchases and notes payable is $ 15,794.56
Lord Greystroke uses his limited income to purchase fruits and nuts; he is currently buying 10 pounds of fruits at a price of $2 per pound and 5 pounds of nuts at a price of $6 per pound. The last pound of fruits added 10 units to Lord Greystroke's total utility, while the last pound of nuts added 30 units. Lord Greystroke:__________.
1. is making the utility-maximizing choice.
2. should buy more fruits and less nuts because the last pound of fruits cost less than the last pound of nuts.
3. should buy more fruits and less nuts because the last dollar spent on fruits added more to total utility than the last dollar spent on nuts.
4. should buy more nuts and less fruits because the last pound of nuts added more to total utility than the last pound of fruits.
5. should buy more nuts and less fruits because the last dollar spent on nuts added more to total utility than the last dollar spent on fruits.
Answer:
1. Is the answer
Explanation:
the utility-maximizing choice between consumption goods happens where the marginal utility per dollar is the same for both goods, and the consumer has finished his or her budget. By buying 10 pounds of fruits at a price of $2 per pound and 5 pounds of nuts at a price of $6 per pound. The last pound of fruits added 10 units to Lord Greystroke's total utility, while the last pound of nuts added 30 units. Lord Greystroke is utilizing this concept
Trailblazer Company sells a product for $210 per unit. The variable cost is $105 per unit, and fixed costs are $588,000. Determine (a) the break-even point in sales units and (b) the sales units required for the company to achieve a target profit of $223,440.
Answer:
Instructions are below.
Explanation:
Giving the following information:
Trailblazer Company sells a product for $210 per unit. The variable cost is $105 per unit, and fixed costs are $588,000.
To calculate the break-even point in units, we need to use the following formula:
Break-even point in units= fixed costs/ contribution margin per unit
Break-even point in units= 588,000/ (210 - 105)
Break-even point in units= 5,600 units
Desired profit= 223,440
Break-even point in units= (fixed costs + desired profit) / contribution margin per unit
Break-even point in units= (588,000 + 223,440) / 105
Break-even point in units= 7,728 units
Bank fees for check printing are recorded by the bank as: Multiple Choice An increase in the bank’s asset account. A decrease in the bank’s asset account. A decrease in the depositor’s bank account. An increase in the depositor’s bank account.
Answer:
A decrease in the depositor’s bank account
Explanation:
The Bank fees are income to the Banks Financial Statements while they reflect a decrease in the assets of cash in the depositors bank account.
Therefore, Bank fees for check printing are recorded by the bank as a decrease in the depositors bank account.