Answer:
Depletion expenses Dr $1,500,000
To Accumlated depletion $1,500,000
(Being the depletion expense is recorded)
Explanation:
The journal entry is shown below:
Depletion expenses Dr $1,500,000
To Accumlated depletion $1,500,000
(Being the depletion expense is recorded)
For recording this we debited the depletion expense as it increased the expense and credited the accumulated depletion as it reduced the assets
The computation is shown below:
The purchase price is
= Aquired value ÷ estimated production
= $18,550,000 ÷ 74,200,000
= $0.25 per gallons
Now depletion allowance is
= current year production × purchase price
= 6,000,000 × $0.25
= $1,500,000
The appropriate journal entry to record the transaction is:
Debit Depletion expense $1,500,000
Credit Accumulated depletion $1,500,000
First step is to calculate the depletion rate
Depletion rate = Cost/Estimated size
Depletion rate = $18,550,000/74,200,000
Depletion rate = $0.25 per gallon
Second step is to calculate the depletion expense
Depletion expense = Depletion rate × Quantity extracted
Depletion expense = $0.25 × 6,000,000 gallons
Depletion expense = $1,500,000
Third step is to prepare the journal entry for Carter Co.
December 31
Debit Depletion expense $1,500,000
Credit Accumulated depletion $1,500,000
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Assume an economy in which there are three securities: Stock A with rA = 10% and σ A = 10%; Stock B with rB = 15% and σ B = 20%; and a riskless asset with r RF = 7%. Stocks A and B are uncorrelated (rAB = 0). Which of the following statements is most correct?
A. The expected return on the investor's portfolio will probably have an expected return that is somewhat below 10%.
B. The expected return on the investor's portfolio will probably have an expected return that is somewhat above 15% and a standard deviation (SD) of approximately 20%.
C. Since the two stocks have a zero correlation coefficient, the investor can form a riskless portfolio whose expected return is in the range of 10% to 15%.
D. The investor's risk/return indifference curve will be tangent to the CML at a point where the expected return is in the range of 7% to 10%.
E. The expected return on the investor's portfolio will probably have an expected return that is somewhat below 15% and a standard deviation (SD) that is between 10% and 20%.
Answer: E. The expected return on the investor's portfolio will probably have an expected return that is somewhat below 15% and a standard deviation (SD) that is between 10% and 20%.
Explanation:
Out of the three securities, the highest return that can be received is 15%. It will therefore be impossible for the entire portfolio to go past 15% in returns because even if a 100% of the portfolio is invested in stock B (Stock with 15%), the highest return will be 15%. With other returns stock added, the return will decrease from the highest return receivable so will be under 15%.
The same logic applies for the standard deviation. The highest standard deviation is 20% so the deviation will not exceed this but it will be lower than this due to the presence of less risky stocks in A and the the riskless asset.
Fit-for-Life Foods reports the following income statement accounts for the year ended December 31
Gain on sale of equipment $ 6,250 Depreciation expense—Office copier $ 500
Office supplies expense 700 Sales discounts 16,000
Insurance expense 1,300 Sales returns and allowances 4,000
Sales 220,000 TV advertising expense 2,000
Office salaries expense 32,500 Interest revenue 750
Rent expense—Selling space 10,000 Cost of goods sold 90,000
Sales staff wages 23,000 Sales commission expense 13,000
Prepare a multiple-step income statement.
Answer:
Fit-for-Life Foods
Multiple-step income statement, for the year ended December 31
Sales 220,000
Less Sales returns and allowances (4,000)
Net Revenue 216,000
Less Cost of goods sold (90,000)
Gross Profit 126,000
Less Operating Expenses :
General and Administrative Expenses
Gain on sale of equipment ( 6,250)
Office supplies expense 700
Depreciation expense—Office copier 500
Insurance expense 1,300
Office salaries expense 32,500 (28,750)
Selling and Distribution Expenses
TV advertising expense 2,000
Sales discounts 16,000
Sales commission expense 13,000
Sales staff wages 23,000
Rent expense—Selling space 10,000 (64,000)
Operating Income / (Loss) 33,250
Less Non - Operating Expenses
Interest revenue 750
Net Income / (Loss) 34,000
Explanation:
A multiple-step income statement shows separately profit generated from Primary Activities of the Company (Operating Profit) and profits that included Secondary Activities of the Company (Net Profit)
The following data have been recorded for recently completed Job 450 on its job cost sheet. Direct materials cost was $2,108. A total of 36 direct labor-hours and 234 machine-hours were worked on the job. The direct labor wage rate is $18 per labor-hour. The Corporation applies manufacturing overhead on the basis of machine-hours. The predetermined overhead rate is $25 per machine-hour. The total cost for the job on its job cost sheet would be:
Answer:
Total cost= $8,606
Explanation:
Giving the following information:
Job 450:
Direct materials= $2,108
A total of 36 direct labor-hours and 234 machine-hours were worked on the job.
The direct labor wage rate is $18 per labor-hour.
The predetermined overhead rate is $25 per machine-hour.
We need to calculate the total cost for Job 450:
Direct materials= 2,108
Direct labor= 36*18= 648
Overhead= 234*25= 5,850
Total cost= $8,606
Bolster Soda had an accounts receivable turnover ratio of 9.9 this year and 11.0 last year. Castor Soda had a turnover ratio of 9.3 this year and 9.3 last year. This implies:
Answer:
This implies Bolster Soda collects receivables more effectively and quickly than Castor Soda in the two years.
Explanation:
The accounts receivable turnover ratio refers to an accounting ratio that is used to show the how effective a firm is in collecting the receivables or money its clients are owing it.
This implies that accounts receivable turnover ratio is used to determine the extent to which a firm ie effectively managing the credit it gives to customers and how quickly the firm collects that that short-term debt.
The formula for calculating the accounts receivable turnover ratio is as follows:
Accounts receivable turnover ratio = Net credit sales / Average accounts receivable
When the accounts receivable turnover ratio is high, it implies that the company is efficient is collecting debt and a high percentage of its cutomers are paying up their debts.
The account receivable turnover ratios in the question therefore imply Bolster Soda collects receivables more effectively and quickly than Castor Soda in the two years.
Lassen Corporation sold a machine to a machine dealer for $37,250. Lassen bought the machine for $68,000 and has claimed $22,500 of depreciation expense on the machine. What gain or loss does Lassen realize on the transaction
Answer:
Loss of $8,250
Explanation:
Lassen corporation sold a machine to a machine dealer at a price of $37,250
Lassen bought the machine for $68,000
He claimed $22,500 of depreciated expenses on the machine
Therefore, the gain or loss realized on the transaction can be calculated as follows
Gain/loss= Cash received-book value
Book value= Original basis-accumulated depreciation
= $68,000-$22,500
= $45,500
Gain/loss= $37,250-$45,500
= $8,250
Hence Lassen realized a loss of $8,250 on the transaction
debits to Work in Process—Roasting Department for Morning Brew Coffee Company for August, together with information concerning production, are as follows: Work in process, August 1, 1,000 pounds, 20% completed $2,800* *Direct materials (1,000 X $2.6) $2,600 Conversion (1,000 X 20% X $1) 200 $2,800 Coffee beans added during August, 31,000 pounds 79,050 Conversion costs during August 33,748 Work in process, August 31, 1,600 pounds, 30% completed ? Goods finished during August, 30,400 pounds ? All direct materials are placed in process at the beginning of production. a. Prepare a cost of production report, presenting the following computations: Direct materials and conversion equivalent units of production for August. Direct materials and conversion costs per equivalent unit for August. Cost of goods finished during August. Cost of work in process at August 31.
Answer:
Costs per Equivalent Unit Materials 2.5515 Conversion 1.1576
Cost of goods finished during August. $ 112759.83
Work In Process Ending Costs $ 4638.05
Explanation:
The equivalent units are found by adding the percent of ending WIP to the completed units.
Equivalent Units
Particulars Units % of Completion Equivalent Units
Materials Conversion Materials Conversion
End. WIP 1600 100 30 1600 480
Completed 30400 100 100 30400 30400
Equivalent Units 32000 30880
Costs Accounted For:
Costs Materials Conversion
Beg. WIP $2600 200
Costs Added 79050 33748
Total Costs 81650 35748
Equivalent Units 32000 30880
Costs per Equivalent 81650/32000 35748/30880
Unit = 2.5515 1.1576
Cost of goods finished during August. $ 112759.83
Materials = 2.5515 * 30400= 77567.5
Conversion = 1.1576 * 30400= 35192.33
Total Costs of finished Goods = 112759.83
Work In Process Ending Costs $ 4638.05
Materials = 2.5515 * 1600= 4082.4
Conversion = 1.1576 * 480= 555.648
Total Costs :
Finished Goods + Work In Process Ending Costs = 112759.83+4638.05
= 117 397.88 ≅117398.0
Costs Accounted For
Materials Costs + Conversion Costs = (81650 +35748) 117398.0
Note: The CPR is correct when both the total costs calculated and accounted for are equal.
A put on XYZ stock with a strike price of $40 is priced at $2.00 per share, while a call with a strike price of $40 is priced at $3.50. What is the maximum per-share loss to the writer of the uncovered put and the maximum per-share gain to the writer of the uncovered call
Answer:
Loss = $38
Gain = $3.5
Explanation:
The calculation of maximum per-share loss and maximum per-share gain is shown below:-
Maximum loss = Exercise price - Premium received
= $40 - $2
= $38
So, the maximum per share loss is $38
Maximum gain = Premium received
= $3.5
So, the maximum per share gain is $3.5
We simply applied the above formulas to determine each part
The Mixing Department of Complete Foods had 62,000 units to account for in October. Of the 62,000 units, 38,000 units were completed and transferred to the next department, and 24,000 units were 20% complete. All of the materials are added at the beginning of the process. Conversion costs arc added evenly throughout the mixing process and the company uses the weighted-average method.
Required:
Compute the total equivalent units of production for direct materials and conversion costs for October.
Answer:
Equivalent units
Material 62,000
Conversion cost 24,000
Explanation:
Under the weighted average method of valuation, to account for completed units, it is assumed that the entire degree of work required is done in the period under consideration. So there is no separation of the completed units into opening inventory and fully worked.
Equivalent units = Degree of completion (%) × Number of units
Equivalent unit for Material
Item unit Equivalent units
Transferred out 38,000 × 100% = 38,000
Closing WIP 24,000× 100% = 24,000
Equivalent unit of material 62,000
The degree of completion for WIP is taken to be 100% because materials are always added at the beginning, therefore all the amount of raw material required is already imputed.
Equivalent unit for Conversion cost
Item unit Equivalent units
Transferred out 38,000 × 100% = 38,000
Closing WIP 24,000× 20% = 4800
Equivalent unit of conversion 42,800
Equivalent units
Material 62,000
Conversion cost 24,000
On July 1 Olive Co. paid $7,500 cash for management services to be performed over a two-year period. Olive follows a policy of recording all prepaid expenses to asset accounts at the time of cash payment. On July 1 Olive should record:
Answer:
The journal entry to record this should be:;
July 1, Year 202x, cash received as deferred revenue
Dr Cash 7,500
Cr Deferred revenue 7,500
Explanation:
Accrual accounting states that both revenues and expenses must be recorded during the periods that they actually occur, and not necessarily when any cash transfer is associated to them.
In this case, the adjusting entry for accrued revenue on December 31 should be:
December 31, year 202x, accrued revenue
Dr Deferred revenue 1,875
Cr Service revenue 1,875
Estimating Allowance for Doubtful Accounts
Evers Industries has a past history of uncollectible accounts, as follows.
Age Class Percent Uncollectible
Not past due 1%
1-30 days past due 3
31-60 days past due 12
61-90 days past due 30
Over 90 days past due 75
Estimate the allowance for doubtful accounts, based on the aging of receivables information provided in the chart below. Evers Industries Estimate of Allowance for Doubtful Accounts Total recelvables Percentage uncollectible Allowance for doubtful accounts Balance 1,124,500 Not Past Due 607,400 196 Days Past Due 1-30 Days Past Due 31-60 Days Past Due 61-90 Days Past Due Over 90 233,000 121600 12% 96500 30% 66000 75%
Answer:
Allowance for doubtful accounts $ 106106 using the aging method
Explanation:
Evers Industries
Estimate of Allowance for Doubtful Accounts
Balance Not Past Past Due (days)
Due (1-30) (31-60) (61-90) (Over 90)
Total
Receivables 1,124,500 607,400 233,000 121600 96500 66000
Percentage
Uncollectible 1% 3% 12% 30% 75%
Allowance for 6074 6990 14592 28950 49500
doubtful accounts 106106
We multiply each percent with the amount given and then add them all to get the total which is $106106 based on aging method.
The estimation of the Allowance for doubtful accounts should be $106,106 using the aging method.
Calculation of the estimation of the Allowance for doubtful accounts:Balance Not Past Past Due (days)
Due (1-30) (31-60) (61-90) (Over 90)
Total
Receivables 1,124,500 607,400 233,000 121600 96500 66000
Percentage
Uncollectible 1% 3% 12% 30% 75%
Allowance for 6074 6990 14592 28950 49500
doubtful accounts 106106
We multiply each percent by the amount given and then add them all to get the total which is $106106 based on aging method.
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Oldhat Financial starts its first day of operations with $11 million in capital.A total of $120 million in checkable deposits are received. The bank makesa $30 million commercial loan and another $40 million in mortgages with thefollowing terms: 200 standard, 30- year, fixed-rate mortgages with a nominalannual rate of 5.25%, each for $200,000. Assume that required reserves are 8.
a. What does the bank balance sheet look like?
b. How well capitalized is the bank?
c. Calculate the risk weighted assets and risk weighted capital ratio after Oldhat's first day.
Answer:
a.
Assets Side
Required Reserves $10 million
Excess Reserves $51 million
Loans $70 million
Total $131 million
Liabilities Side
Checkable Deposits $120 million
Bank Capital $11 million
Total $131 million
b. Bank capitalization can be measured with bank Leverage Ratio.
= Capital/Assets
= 11/131
= 8.40%
Bank is considered well capitalized if ratio is above 5% so Oldhat Financial is well capitalized.
c. Risk Weighted Assets = $50 million
Risk weighted capital ratio = 22%
Commercial loans are 100% risk weighted = $ 30 million
Residential mortgages are 50% risk weighted = $ 20 millions
Total = $50 million.
Risk weighted Capital Ratio = Bank capital / Total risk weighted assets
= 11/50
= 22%
9. The risk-free rate and the expected market rate of return are 5.6% and 12.5%, respectively. According to the capital asset pricing model (CAPM), the expected rate of return on a security with a beta of 1.25 is equal to
Answer:
21.2%
Explanation:
CAPM = risk free rate +( beta x expected market return)
5.6% + (1.25 x 12.5%) = 21.2%
Match the transactions below with the journal or ledger in which it would be entered. Monthly adjustment for supplies used Cash receipt posting to an individual customer account Record sale on account to customer Record purchase on account from vendor Record payment received from customer Record payment made to vendor Cash payment posting to an individual vendor account General journal Accounts receivable subsidiary ledger Revenue journal Purchases journal Cash receipts journal Cash payments journal Accounts payable subsidiary ledger Group of answer choices Monthly adjustment for supplies used
Answer:
Matching transactions to journal or ledger:
1. Monthly adjustment for supplies used = General Journal
2. Cash receipt posting to an individual customer account = Accounts Receivable subsidiary ledger
3. Record sale on account to customer = Revenue Journal
4. Record purchase on account from vendor = Purchases journal
5. Record payment received from customer = Cash Receipts Journal
6. Record payment made to vendor = Cash Payments Journal
7. Cash payment posting to an individual vendor account = Accounts Payable subsidiary ledger
Explanation:
a. The general journal is used to record all kinds of transactions that occur on a daily, especially if the entity does not operate specialized journals like the Cash receipts, cash payments, purchases, and revenue journals. It records both adjusting and non-adjusting entries.
b. Accounts receivable and payable subsidiary ledgers are used to record individual customers and suppliers transactions which had been recorded in total to the Accounts Receivable and Accounts Payable accounts (as controls) respectively and then enable individual records to be kept.
c. Revenue journal is a specialized journal for recording revenue on account for customers who buy on credit from the entity. As a specialized journal, it usually have one amount column while the total is periodically posted to a control account in the general ledger with individual transactions posted to the subsidiary accounts receivable ledger.
d. Cash Receipts and Payments Journals are also specialized journals for recording receipts from customers and payments to suppliers of merchandise and services. They are similar in outlook like the Revenue Journal.
e. Accounts Payable subsidiary ledger is a secondary ledger for recording individual suppliers' transactions, with their totals already posted to the general ledger (control account). This ledger ensures the maintenance of individual suppliers' records in order to extract their individual balances.
The matching of the transactions with the journal or ledger is shown below.
Matching is as follows:1. Monthly adjustment for supplies used = General Journal
2. Cash receipt posting to an individual customer account = Accounts Receivable subsidiary ledger
3. Record sale on account to customer = Revenue Journal
4. Record purchase on account from vendor = Purchases journal
5. Record payment received from customer = Cash Receipts Journal
6. Record payment made to vendor = Cash Payments Journal
7. Cash payment posting to an individual vendor account = Accounts Payable subsidiary ledger
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The rate of return on the common stock of Lancaster Woolens is expected to be 18 percent in a boom economy, 8 percent in a normal economy, and only 2 percent in a recessionary economy. The probabilities of these economic states are 12 percent for a boom and 10 percent for a recession. What is the variance of the returns on this common stock
Answer:
Variance of the return on this common stock is 0.15%
Explanation:
Note: See the attached excel file for the calculation of the variance of the returns on this common stock.
Note that the probability of a normal economy can be obtained as follows:
Probability of normal economy = 100% - Probability of a boom - Probability of a recession = 100% - 12% - 10% = 78%
These probabilities are used in the attached excel file.
cost $24,000 with a six-year life and no salvage value. The company expects to sell the machine's output of 3,000 units evenly throughout each year. A projected income statement for each year of the asset's life appears below. What is the payback period for this machine?
Answer:
4 years
Explanation:
The computation of the payback period is shown below:
Payback period is
= Cost of a Machine ÷ Annual cash flow
where,
Cost of a machine = $24,000
And, the annual cash flow is
= Net Income + Depreciation expense
= $2,000 + $4,000
= $6,000
Now placing these values to the above formula
So, the payback period is
= $24,000 ÷ $6,000
= 4 years
A financial asset is liquid: Group of answer choices if it can be readily exchanged for another asset or good. if it is held by the public and earning interest. only if it takes the form of cash. if it can be carried easily from one place to another.
Answer:
if it can be readily exchanged for another asset or good
Explanation:
An asset is liquid if it can be easily be exchanged for another asset or good or converted to cash. cash ( currency) is the most liquid asset.
an house for example is less liquid when compared to cash. this is because before it can be converted to cash or exchanged for another asset, it must first be valued, then we have to find a buyer and this process can range from days to years. this makes a house less liquid when compared with a house.
Sullivan Equipment Company
Variable Costing Income Statement
For the Month Ended March 31
Sales (14,200 units) $653,200
Variable cost of goods sold:
Variable cost of goods manufactured $288,000
Inventory, March 31 (1,800 units) (32,400)
Total variable cost of goods sold 255,600
Manufacturing margin $397,600
Variable selling and administrative expenses 170,400
Contribution margin $227,200
Fixed costs:
Fixed manufacturing costs $64,000
Fixed selling and administrative expenses 42,600
Total fixed costs 106,600
Income from operations $120,600
Prepare in income statement under absorption costing.
Answer:
Income statement under absorption costing
Sales (14,200 units) $653,200
Less Cost of Goods Sold
Opening Inventory $0
Add Cost of Goods Manufactured $352,000
Less Closing Inventory (1,800 units × $22.00) ($39,600) ($312,400)
Gross Profit $340,800
Less Expenses :
Variable selling and administrative expenses ($170,400)
Fixed selling and administrative expenses ($42,600)
Net Operating Income / (Loss) $127,800
Explanation:
Manufacturing Cost Schedule :
Variable cost of goods manufactured $288,000
Add Fixed manufacturing costs $64,000
Total Manufacturing Cost $352,000
Units Manufactured :
Units Sold 14,200
Add Closing Stock 1,800
Less Opening Stock 0
Units Manufactured 16,000
Cost per unit manufactured = $352,000 / 16,000
= $22.00
produces sports socks. The company has fixed expenses of $ 75 comma 000$75,000 and variable expenses of $ 0.75$0.75 per package. Each package sells for $ 1.50$1.50. Read the requirementsLOADING.... Requirement 1. Compute the contribution margin per package and the contribution margin ratio. Begin by identifying the formula to compute the contribution margin per package. Then compute the contribution margin per package. (Enter the amount to the nearest cent.) – = Contribution margin per unit
Answer:
Results are below.
Explanation:
Giving the following information:
Selling price= $1.5
Unitary variable cost= $0.75
First, we need to calculate the unitary contribution margin:
Contribution margin= selling price - unitary variable cost
Contribution margin= 1.5 - 0.75
Contribution margin= $0.75
Now, we can calculate the contribution margin ratio:
contribution margin ratio= contribution margin/selling price
contribution margin ratio= 0.75/1.5
contribution margin ratio= 0.5
Direct Materials and Direct Labor Variances At the beginning of June, Bezco Toy Company budgeted 24,000 toy action figures to be manufactured in June at standard direct materials and direct labor costs as follows: Direct materials $36,000 Direct labor 8,640 Total $44,640 The standard materials price is $0.6 per pound. The standard direct labor rate is $9 per hour. At the end of June, the actual direct materials and direct labor costs were as follows: Actual direct materials $33,400 Actual direct labor 8,000 Total $41,400 There were no direct materials price or direct labor rate variances for June. In addition, assume no changes in the direct materials inventory balances in June. Bezco Toy Company actually produced 21,600 units during June. Determine the direct materials quantity and direct labor time variances. Round your per unit computations to two decimal places, if required. Enter a favorable variance as a negative number using a minus sign and an unfavorable variance as a positive number. Direct materials quantity variance $ 2.5 Favorable Direct labor time variance
Answer:
$1,000 unfavorable and $224 unfavorable
Explanation:
The computation of the direct material quantity variance and the direct labor time variance is shown below:
For direct material quantity variance:
= (Standard direct materials ÷ bugeted toy × actually produced) - actual direct materials
= ($36,000 ÷ $24,000 × 21,600 units) - $33,400
= $32,400 - $33,400
= $1,000 unfavorable
For direct labor time variance
= (Standard direct labor ÷ bugeted toy × actually produced) - actual direct labor
= ($8,640 ÷ $24,000 × 21,600 units) - $8,000
= $7,776 - $8,000
= $224 unfavorable
Gladstone Company issues 200,000 shares of preferred stock for $40 a share. The stock has fixed annual dividend rate of 5% and a par value of $3 per share. If sufficient dividends are declared, preferred stockholders can anticipate receiving dividends of:
Answer: $30,000
Explanation:
Preferred Dividends are paid at a fixed rate based on the par value and the dividend rate.
If there are 200,000 preferred shares, the amount that is to be paid to them in dividends every year would be;
= 200,000 * 5% * 3
= $30,000
This amount will be paid to them if sufficient dividends are declared to cover this amount. If the shares are Cumulative, they will receive this dividend in totality eventually even if it is not the year the dividends are announced in because these kind of shares accrue the dividends.
The widget market is competitive and includes no transaction costs. Five suppliers are willing to sell one widget at the following prices: $20, $12, $8, $4, and $2 (one seller at each price). Five buyers are willing to buy one widget at the following prices: $8, $12, $20, $32, and $44 (one buyer at each price). For each price shown in the following table, use the given information to enter the quantity demanded and quantity supplied.
Price Quantity Demanded Quantity Supplied
($ per widget) (widgets) (widgets)
$2
$4
$8
$12
$20
$32
$44
In this market, the equilibrium price will beper widget, and the equilibrium quantity will be______widgets.
Answer:
4
Explanation:
The completion of the table is shown below;
Price Quantity Demanded Quantity Supplied
($ per widget) (widgets) (widgets)
$2 5 1
$4 5 2
$8 5 3
$12 4 4
$20 3 5
$32 2 5
$44 1 5
As we can see that at the price of $12 the quantity demanded is equivalent to the quantity supplied i.e 4 so here the equilibrium quantity is 4 for the widgets
Wren Pork Company uses the relative market value method/Value basis method of allocating joint costs in its production of pork products. Relevant information for the current period follows:
Product Pounds Price/lb.
Loin chops 3,080 $5.40
Ground 10,200 2.20
Ribs 4,120 5.05
Bacon 6,160 3.70
The total joint cost for the current period was $45,400. How much of this cost should Wren Pork allocate to Loin chops?
A. $0.
B. $6,443.
C. $9,134.
D. $11,350.
E. $45,400.
Answer:
C. $9,134
Explanation:
Product Pounds Price/Ib Total Value
Loin chops 3,080 $5.40 $16,632
Ground 10,200 $2.20 $22,440
Ribs 4,120 $5.05 $20,806
Bacon 6,160 $3.70 $22,792
$82,670
The Total Joint cost = $45,400
Hence Joint cost to Lopin chops = $45,400 * $16,632 / $82,670
Joint cost to Lopin chops = $9,134
Under a job-order costing system, the dollar amount transferred from Work in Process to Finished Goods is the sum of the costs charged to all jobs:___________.
A) started in process during the period.
B) in process during the period.
C) completed and sold during the period.
D) completed during the period.
Answer:
D) completed during the period.
Explanation:
The jobs that have been completed are transferred from Work In Process Account to the Finished Goods Inventory Account.
It is from this Finished Goods Inventory that the Cost of Sales would be determined for those jobs sold.
Many companies secure financing from various sources with various payback periods. Not all funding sources are the same, and in fact, some can come with a pretty high cost to the firm. These costs could include high interest rates, long payback periods, and increased ownership in the firm which could result in lost control.
Please analyze the funding options listed, and determine if the option is usually a short-term or long-term strategy.
a. Line of credit
b. Commercial paper
c. Trade credit Bank loan of 10 months
d. Bond
e. Stock
f. Bank loan of 20 months
Answer:
a. Line of credit - Long-term strategy
A line of credit is a long-term strategy because businesses obtain lines of credit for their use over long periods of time. The particular characteristic is that a line of credit is only used when the business decides to do so, so it works almost like a credit card.
b. Commercial paper - Short-term strategy
Commercial paper is a short-term debt that is issued by firms when they have problems to pay operating expenses. They are unsecured, and pay a specific amount of interest.
c. Trade credit Bank loan of 10 months - Short-term strategy
In financial accounting, loans that last for less than a year are categorized as short-term liabilities, therefore, a trade credit bank loan of 10 months is a short-term strategy.
d. Bond - Long-term strategy
While some bonds are issued for the short-term, the majority of them are issued for the long-term, with some of them lasting 10 years or more.
e. Stock - Long-term strategy
Buying or issuing stock is also a long-term strategy, specially because the dividend of the stock is only paid out once every year, unlike other debt instruments that pay interest immediately.
f. Bank loan of 20 months - Long-term strategy
A bank loan of more than 1 years is considered a long-term liability in financial accounting, therefore, a bank loan of 20 months is part of a long-term strategy.
Analyzing the given funding options and placing them in their right categories would be:
A. Line of credit - Long-term strategy B. Commercial paper - Short-term strategy C. Trade credit Bank loan of 10 months - Short-term strategy D. Bond - Long-term strategy E. Stock - Long-term strategy F. Bank loan of 20 months - Long-term strategyA long term strategy is one which financial institutions use to secure their assets for the foreseeable future while a short term strategy is used for short term gains on stocks and finances.
With this in mind, we can see that there are different funding options which are short or long term as the case may be, which depends on the amount of profit which the business wants to accrue.
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A firm contemplating foreign expansion must make three basic decisions: which markets to enter, when to enter those markets, and on what scale. Once a firm decides to enter a foreign market, the question arises as to the best mode of entry. Firms can use six different modes to enter foreign markets: exporting, turnkey projects, licensing, franchising, establishing joint ventures with a host-country firm, or setting up a new wholly owned subsidiary in the host country. Each entry mode has advantages and disadvantages.
Read each advantage and disadvantage listed below and then match it to corresponding mode.
a. Development cost and operational Strategy
b. Costs, risks, and profits
c. Manufacturing and transportation costs
d. Host country and controls
e. FDI and foreign country
f. Risks and capital investment
1. Exporting
2. Turnkey Contracts
3. Licensing
4. Franchising
5. Joint Ventures
6. Who Ply-own
7. Subsidiaries
Answer:
1. Exporting - c. Manufacturing and transportation costs
2. Turnkey Contracts e. FDI and foreign country
3. Licensing f. Risk and Capital investment
4. Franchising d. Host country and controls
5. Joint Venture - a. Development cost and Operational Strategy
6. Who Ply-own - Risks and profits
7. Subsidiaries - b. Costs, risks and profits
Explanation:
Exporting is beneficial for a country as it brings money to the country but it has many disadvantages. There is high manufacturing and transportation cost. There can be trade barriers in some countries which will restrict the trade benefit. Owing a subsidiary is beneficial when it is profitable but when subsidiary incurs loss the parent has to bear it. It involves high risk investment.
The advantage and disadvantage listed below and their matches in their corresponding mode.
Exporting- Manufacturing and transportation costs Turnkey Contracts- FDI and foreign country Licensing - Risk and Capital investment Franchising- Host country and controls Joint Venture - Development cost and Operational Strategy Who Ply-own (wholly owned subsidiary)- Risks and profits Subsidiaries - Costs, risks and profitsFirms can often use different modes to enter foreign markets. They can use exporting, turnkey projects, licensing, franchising, establishing joint ventures with a host-country firm etc.
Turnkey project : the contractor is in good terms and agrees to handle every detail of the project for a foreign client.
Licensing agreement : licensor often gives the rights to intangible property to another entity for time period under a fee. Franchising is involve longer-term commitments than licensing.
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A company’s dividend policy refers to the manner in which a firm distributes its earnings to shareholders. Georia Industries Inc. recently paid a dividend to its shareholders. The following table offers a timeline of events surrounding the dividend.
Date Event
January 12 Declaration date
February 12 With-dividened date
February 13 Ex-dividened date
February 15 Holder-of-record date
March 24 Payment date
Based on this information:
1. The date on which investors are aware of the size and timing of a future dividend payment is_____.
2. The last day that an investor can buy a share of Sonaiya Development Group.'s stock and still be entitled to the dividend is_____.
3. The day when Sonaiya Development Group. will actually pay the dividend is If Victor buys 10 shares of Sonaiya Development Group. will actually pay the dividend is_____.
If Victor buys 10 shares of Sonaiya Development Group. stock from Susan, by what business date must Victor inform the company that he owns the shares so that he is eligible to receive the recently announced dividend payment?
A. March 24.
B. February 12.
C. February 15.
D. January 12.
Answer:
Dividend Policy at Georia Industries Inc.
1. The date on which investors are aware of the size and timing of a future dividend payment is_____. January 12 Declaration date
2. The last day that an investor can buy a share of Sonaiya Development Group.'s stock and still be entitled to the dividend is_____. February 12 With-dividend date
3. The day when Sonaiya Development Group. will actually pay the dividend is If Victor buys 10 shares of Sonaiya Development Group. will actually pay the dividend is_____. March 24 Payment date
If Victor buys 10 shares of Sonaiya Development Group. stock from Susan, by what business date must Victor inform the company that he owns the shares so that he is eligible to receive the recently announced dividend payment? February 12 With-dividend date
B. February 12.
Explanation:
The most important dates for dividends at Georia are the declaration date, The holder-of-record date, and the payment date. The declaration date is the date that the company's directors decide to announce that dividend will be paid to stockholders of record. The holder-of-record date is the date that a stockholders will know if he or she will receive dividend for that period, because only holders of record are paid dividends. If a stockholder's share is not registered before that date, then the stockholder is not entitled to dividends. The last date is, of course, the payment date. However, in accounting for the dividend transaction, only two dates are important: the declaration date and the payment date.
An important tool in predicting the volume of activity, the costs to be incurred, the sales to be made, and the profit to be earned is:
Answer:
Cost-volume-profit analysis.
Explanation:
An important tool in predicting the volume of activity, the costs to be incurred, the sales to be made, and the profit to be earned is cost-volume-profit analysis. It is an important tool in accounting that is used to determine how changes in differing levels of activities such as costs and volume affect a company's operating financial statements, both income and net income. It is also an accounting concept known as the break even analysis.
In order to use this cost-volume-profit analysis, accountants usually make some assumptions and these are;
1. Sales price per unit product is kept constant.
2. Variable costs per unit product are kept constant.
3. Total fixed costs of production are kept constant.
4. All the units produced are sold.
5. The costs accrued are as a result of change in business activities.
6. A company selling more than a product should simply sell in the same mix.
The charter of a corporation provides for the issuance of 100,000 shares of common stock. Assume that 30,000 shares were originally issued and 5,000 were later reacquired. what is the number of shares outstanding?
Answer:
The answer is 25,000 shares.
Explanation:
The 100,000 shares is the authorised shares which is the maximum number of shares an entity is permittee to issue to investors as being stipukated in its articles of incorporation.
The 30,000 shares is the outstanding shares which is the total number of shares issued to existing shareholders.
The 5,000 shares reacquired is known as treasury stock. Companies repurchased the shares.
So total number of outstanding shares is:
30,000 shares - 5,000 shares
= 25,000 shares
The number of shares outstanding is 25,000.
The calculation is as follows:
= Originally issued - reacquired shares
= 30,000 - 5,000
= 25,000
Therefore we can conclude that The number of shares outstanding is 25,000.
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Pooler Corporation is working on its direct labor budget for the next two months. Each unit of output requires 0.15 direct labor-hours. The direct labor rate is $7.00 per direct labor-hour. The production budget calls for producing 6,500 units in April and 6,200 units in May. If the direct labor work force is fully adjusted to the total direct labor-hours needed each month, what would be the total combined direct labor cost for the two months?
Answer:
$13,335
Explanation:
Required production in units for April and May are 6,500 units and 6,200 units respectively.
Direct labor hours needed is 0.15 for both months.
Total direct labor hours needed for each month would be;
April
= 6,500 units × 0.15
= 975
May
=6,200 units × 0.15
= 930
Direct labor rate per hour for each months is $7
Total direct labor cost for April would be;
= $7 × 975
= $6,825
Total direct labor cost for May would be;
= $7 × 930
= $6,510
Therefore, total direct labor cost for both months April and May would be;
= $6,825 + $6,510
= $13,335
1. Pure monopoly: a. has never existed b. is an economic model c. is the best option for capitalism d. is the best option for socialism 2. the prices producers charge to cover the cost of supply may be seen on a: a. television economic update b. trade journal c. index table of interest rates d. supply curve 3. in a competitive free market (i.e., perfect market) buyers and sellers do not have to: a. pay for things that others enjoy b. sell goods cheap c. feel tax oppression from the government d. do their own taxes 4. One of the most significant disadvantages of a monopoly is: a. oligarch capitalization b. no competition from international markets c. price wars d. high prices charged 5. D Ram prices in the U.S. were _____ in Dec-01 a. close to $1 b. better than those in potato sales c. not comparable to those of Vietnamese markets d. fixed 6. Pressure, rationalization, and opportunity help indicate issues that lead to: a. NYPD law investigation b. forensic dissecting of butterflies c. price fixing d. background checks 7. The U.S. has an extensive history of a. successful battles b. ethics in every industry c. ethics in India d. legislation dealing with antitrust 8. mixed economies rely on _______ to help with their deficiencies : a. governmental policy b. their citizens c. good business practices d. ethical behavior 9. which is a main view on how to address monopoly issues: a. regulation b. government war c. move to a different place d. competition above all. 10. Monopoly hinders: a. incentives to come up with new technology. b. all things true of a commercial enterprise c. governmental accounting efficiency d. socialism and Marxism.
Answer:
1. b. is an economic model
2. d. supply curve
3. a. pay for things that others enjoy
4. d. high prices charged
5. a. close to $1
6. c. price fixing
7. d. legislation dealing with antitrust
8. a. governmental policy
9. a. regulation
10. b. all things true of a commercial enterprise
Explanation:
Monopoly is a market structure that exists where there is a single seller, selling a single product or service to many buyers with complete control of the market. This situation confers on the seller an economic advantage to the detriment of the overall economy, including market inefficiencies due to the absence of competition. There are many variants to monopoly, including pure monopoly, natural, and monopolistic competition.