Answer:
Kaizen Philosophy
Explanation:
Kaizen philosophy refers to good change. It is a Japanese term in which the companies are required to improve their processes continuously. The companies which offer low cost car vehicles are overlooking Kaizen principle because they are contributing to environment pollution. Kaizen principle focuses on new improvements and abolishes old concepts.
On June 1, Carla Vista Co. Ltd. borrows $108,000 from Acme Bank on a 6-month, $108,000, 4% note. The note matures on December 1.
1. Prepare the entry on June 1.
2. Prepare the adjusting entry on June 30.
3. Prepare the entry at maturity (December 10)
4. What was the total fancing (interest expence)?
Answer:
a) Journal entry
Date Account and explanation Debit Credit
June 1 Cash $108,000
Notes payable $108,000
b) Adjusting entry
Date Account and explanation Debit Credit
June 30 Interest expense $360
(108,000*4%*1/12)
Interest payable $360
c) Journal entry
Date Account and explanation Debit Credit
Dec 10 Notes payable $108,000
Interest payable (360*6) $2,160
Cash $110,160
d) Total (interest expenses)
Interest payable = $360 * 6
= $2160
Altoona Corporation has two divisions, Hinges and Doors, which are both organized as profit centers; the Hinge Division produces and sells hinges to the Door Division and to outside customers. The Hinge Division has total costs of $43, $26 of which are variable. The Hinge Division is operating significantly below capacity and sells the hinges for $58.The Door Division has received an offer from an outsider vendor to supply all the hinges it needs (32,000 hinges) at a cost of $53. The manager of the Door Division is considering the offer but wants to approach the Hinge Division first.What would be the profit impact to Altoona Corporation as a whole if the Door Division purchased the 32,000 hinges it needs from the outside vendor for $53?a. No change in profit to Altoona.b. $160,000 increase in profits.c. $160,000 decrease in profits.d. $864,000 decrease in profits.
Answer:
d. $864,000 decrease in profits.
Explanation:
Hinge Division's total cost per unit:
variable $26
fixed $17
total $43
sales price $58
contribution margin $32
profit margin $15
Alternative A Alternative B Differential
intercompany outside amount
money paid to $0 $1,696,000 ($1,696,000)
outside vendor
variable costs $832,000 $0 $832,000
fixed costs $544,000 $544,000 $0
total costs $1,376,000 $2,240,000 ($864,000)
If the hinges are purchased form an outside vendor, the corporation's total profits will decrease by $864,000.
Clayborn Company deposits all cash receipts on the day they are received and makes all cash payments by check. At the close of business on May 31, its Cash account shows a debit balance of $28,525. Clayborn's May bank statement shows $25,000 on deposit in the bank. Determine the adjusted cash balance using the following information:Deposit in transit $5,200Outstanding checks $4,600Bank service fees, not yet recorded by company $25A NSF check from a customer, not yet recorded by the company $600Required:What should be the adjusted cash balance?
Answer:
$27,900
Explanation:
The computation of adjusted cash balance is shown below:-
Adjusted cash balance = Balance at May 31 - bank service fees - NSF check
= $28,525 - $25 - $600
= $27,900
Therefore for computing the adjusted cash balance we simply deduct the bank service fee and NSF check from balance at may 31
Hence, the adjusted cash balance is $27,900
Assume that you are 30 years old today, and that you are planning on retirement at age 65. You expect your salary to be $42,000 one year from now and you also expect your salary to increase at a rate of 5% per year as long as you work. To save for your retirement, you plan on making annual contributions to a retirement account. Your first contribution will be made on your 31st birthday and will be 8% of this year's salary. Likewise, you expect to deposit 8% of your salary each year until you reach age 65. Assume that the rate of interest is 9%. The present value (PV) (at age 30) of your retirement savings is closest to
Answer:
$50,855.62
Explanation:
I prepared an excel spreadsheet to determine the yearly contributions to the plan and their future value.
once you reach 65 years, your retirement account should have $1,038,165. Now we need to determine the present value = $1,038,165 / (1 + 9%)³⁵ = $50,855.62
On January 1, the Matthews Band pays $66,600 for sound equipment. The band estimates it will use this equipment for five years and perform 200 concerts. It estimates that after five years it can sell the equipment for $2,000. During the first year, the band performs 55 concerts. Compute the first-year depreciation using the units-of-production method.
Answer:
Annual depreciation= $17,765
Explanation:
Giving the following information:
Original cost= $66,600
Number of units= 200
Salvage value= $2,000
During the first year, the band performs 55 concerts.
To calculate the annual depreciation under the units-of- production method, we need to use the following formula:
Annual depreciation= [(original cost - salvage value)/useful life of production in units]*units operated
Annual depreciation= [(66,600 - 2,000)/200]*55
Annual depreciation= $17,765
Due to use, wear and tear, the monetary worth of an object decreases with time. Depreciation is the term used to describe this reduction.
Annual depreciation= $17,765
Giving the following data:
Original cost= $66,600Number of units= 200Salvage value= $2,000During the first year, the band performs 55 concerts.
To calculate the annual depreciation under the units-of- production method, we need to use the following formula:-Annual depreciation= [(original cost - salvage value)/useful life of production in units]*units operated
Annual depreciation= [(66,600 - 2,000)/200]*55
Annual depreciation= $17,765
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Max, an employee at HiFi LLC, is responsible for performing the job analysis process in her organization. She is currently planning the job analysis. Which of the following should typically be Max's next step?
a. Preparing for and introducing job analysis
b. Developing job descriptions and job specifications
c. Conducting the job analysis
d. Maintaining and updating job descriptions
Answer:
The correct answer is the option C: Conducting the job analysis.
Explanation:
To begin with, the term of "Job Analysis" refers to a method used in the organizations with the purpose of generating job descriptions and specifications in order to establish a better communication inside the organization and also to know better who the best candidates will be for future jobs. Therefore that this analysis focus on the correct comprehension from the analyst regarding the job that is being under analysis. When the analysis has began the person in charge of it will have to planned carafully the way that she will get the information for later transform it into the job description and that is why that once that the planning has been done the person needs to conduct the job analysis in order to obtain the results expect that are the proper description of the job and all of its specifications for future employees.
Suppose a company will issue new 20-year debt with a par value of $1,000 and a coupon rate of 9%, paid annually. The issue price will be $1,000. The tax rate is 25%. If the flotation cost is 2% of the issue proceeds, then what is the after-tax cost of debt
Answer:
After cost of debt for a floatation cost of 2% is 6.62%
Explanation:
After tax cost of debt = Market interest × (1- tax rate)
We will get the cost of debt using the time value of money principle.
PV = -$1,000
Pmt = $1,000 × 9%
=$90
P/yr = 1
N = 20
FV =1,000
Tax rate = 25%
YTM
The market interest rate is 9% using financial calculator hence;
After-tax cost of debt = Market interest × (1-tax rate)
= 0.09 × (1 - 0.25)
= 0.0675 or 6.75%
If floatation cost is 2%, then
Net receipts after floatation cost = Cost × (1 - floatation rate)
= 0.0675 × (1- 0.02)
= 0.06615 or 6.62%
If he wanted the cash award of each of the five prizes to be $45,000 and his estate could earn 7% per year, how much would he need to fund his prizes
Answer:
The answer is $3,214,285.71
Explanation:
Price of each award is $45,000
And there are 5
Therefore, we have 5 x $45,000
=$225,000.
So, $225,000 is the future value.
Rate of return(r) in 7% and it is being assumed that it is forever.
So, so how much will be needed to fund his prizes(present value)?:
PV = FV/r
= $225,000/0.07
=$3,214,285.71
On October 10, the stockholders’ equity of Sherman Systems appears as follows. Common stock–$10 par value, 74,000 shares authorized, issued, and outstanding $ 740,000 Paid-in capital in excess of par value, common stock 226,000 Retained earnings 880,000 Total stockholders’ equity $ 1,846,000 1. Prepare journal entries to record the following transactions for Sherman Systems. Purchased 5,200 shares of its own common stock at $27 per share on October 11. Sold 1,050 treasury shares on November 1 for $33 cash per share. Sold all remaining treasury shares on November 25 for $22 cash per share. 2. Prepare the stockholders' equity section after the October 11 treasury stock purchase.
Answer:
1, Journal entries
Date Account and explanation Debi$ Credit$
Treasury stock (5200*27) 140,400
Cash 140,400
(To record purchase treasury stock)
Cash (1,050*33) 34,650
Paid in capital from sale of treasury stock 6,300
Treasury stock (1,050*27) 28,350
(To record sale of treasury stock)
Cash (4,150*22) 91,300
Paid in capital from sale of 6,300
treasury stock
Retained earnings 14,450
Treasury stock (4,150*27) 112,050
(To record sale of treasury stock)
2. Revised equity section
Contributed capital
Common Stock 740,000
Paid in capital in excess of 226,000
par value-Common Stock
Total paid in capital 966,000
Retained earnings 880,000
Total 1,846,000
Less: Treasury stock (140,400)
Total Stockholder's equity $1,705,600
Determine the missing 2022 change percentages for (a) Intangible assets and (b) Total assets in the horizontal analysis for Mort Company
Answer:
The information that the question is referring to is this:
Assets 2017 2016 Amount Percent
Current Assets $900,000 $800,000 $100,000 12.50%
Plant Assets $475,000 $550,000 ($75,000) (13.6%)
Intangible Assets $300,000 $225,000 $75,000
Total Assets $1,675,000 $1,575,000 $100,000
Explanation:
Change in intangible assets
75,000 x 100 / 225,000 = 33.3%
Change in total assets
100,000 x 100 / 1,575,000 = 6.3%
Gold standard required countries to A. keep the supply of foreign exchange less than their domestic money supply. B. restrict the demand for foreign goods. C. keep the supply of their domestic money constant. D. keep the supply of their domestic money fixed in proportion to their gold holdings.
Answer:
D.) Keep the supply of there domestic money fixed in proportion to their gold holdings.
Explanation:
The Gold Standard was a monetary system under which countries fixed the value of their money in terms of a specified amount of gold. With the gold standard, countries agreed to convert the paper money into a fixed amount of gold.
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Rascal Corp. borrows $500,000 by signing on a 1-year, 12% promissory note from General Finance Company and assigns $600,000 of its accounts receivable as collateral for the loan. General Finance charges a financing fee of 1% of the receivables assigned. The journal entry for Rascal to record the borrowing will include a
Answer:
Dr Cash 494,000
Dr Finance Charge expense6,000
Cr Liability - Financing arrangement 500,000
Explanation:
The journal entry for Rascal to record the borrowing
Since Rascal Corp was said to borrow $500,000 from the General Finance Company in which $600,000 of its accounts receivable as collateral for the loan was been assigned and the General Finance charges a financing fee of 1% of the receivables assigned which mean the transaction will be recorded as:
DrCash 494,000
(500,000-6,000)
Dr Finance Charge expense6,000
Cr Liability - Financing arrangement 500,000
Calculation for Cash (difference)
Account receivable $600,000 ×General Finance charges of 1% =Finance Charge expense 6,000
When the end-of-period spreadsheet is complete, the adjustment columns should have:_________. a) total debits greater than total credits if a net income was earned b) total debits greater than total credits if a net loss was incurred c) total debits are equal to total credits d) total credits greater than total debits if a net income was earned
Answer:
C. Total debits are equal to total credits
Explanation:
When the end-of-period spreadsheet is complete, the adjustment columns should have:
Total debits equal to total credits.
When this happens, the trial balance is considered to be balanced.
If revenues are greater than expenses, then income statement will give a credit balance. If expenses are bigger than revenues, your income statement will show a debit balance.
Reporting Net Sales with Credit Sales, Sales Discounts, and Credit Card Sales
The following transactions were selected from the records of Ocean View Company:
July 12 Sold merchandise to Customer R, who charge d the $3,000 purchase on his
Visa creditCard. Visa charges OceanView a 2 percent credit card fee.
15. Sold merchandise to Customer S at an invoice price of $9,000; terms 3/10, n/30.
20. Sold merchandise to Customer T at an invoice price of $4,000; terms 3/10, n/30.
23 Collected payment from Customer S from July 15sale.
Aug. 25 Collected payment from Customer T from July 20 sale.
Required:
Assuming that Sales Discounts und Credit Card Discount s arc treated as contra-
revenues. compute net sales for the two months ended August 31.
Answer:
Net sales $15,670
Explanation:
Computation of thenet sales for the two months ended August 31.
Sales revenue:
Sales Revenue
July 12 Merchandise Sold to Customer R $3,000
July 20 Merchandise Sold to Customer S $4,000
July 15 Merchandise Sold to Customer T $9,000
Total ($3,000+$4,000+$9,000) $16,000
Less:Sales discounts (270)
($9,000 collected from S x 3%)
Credit card fee ($60)
($3,000 from R x 2%)
Net sales $15,670
Therefore the net sales for the two months ended August 31 will be $15,670
Burt has come across an excellent recipe for a new beer, and he and 20 college friends decide to go into business. They form a corporation named New Brew Inc., issuing stock only to the 21 of them and not selling any stock outside the group. The beer is a huge success, and they soon need to expand. They decide to sell stock to members of the public to raise capital. What type of corporation is New Brew before the sale of stock to the public
Answer: Private Limited Company
Explanation:
From the question, we are informed that Burt has come across an excellent recipe for a new beer, and he and 20 college friends decide to go into business and they form a corporation named New Brew Inc., issuing stock only to the 21 of them and not selling any stock outside the group.
We are further told that the beer is a huge success, and they soon need to expand and decide to sell stock to members of the public to raise capital.
Before the sale of stock to the public, the corporation is a private limited company. The limited number of shareholders in this type of business is 50 and it does not trade its shares publicly.
3. Problems and Applications Q3 This chapter discusses companies that are oligopolists in the market for the goods they sell. Many of the same ideas apply to companies that are oligopolists in the market for the inputs they buy. If sellers who are oligopolists try to increase the price of goods they sell, the goal of buyers who are oligopolists is to try to decrease the prices of goods they buy. Major league baseball team owners have an oligopoly in the market for baseball players. The owners' goal is to keep players' salaries . True or False: This goal is difficult to achieve because teams can attract better players with higher salaries. True False Baseball players went on strike in 1994 because they would not accept the salary cap that the owners wanted to impose. True or False: The owners felt the need for a salary cap to dissolve collusive behavior over salaries. True False
Answer:
Oligopolistic Companies:
a) The owners' goal is to keep players' salaries capped. TRUE
b) Goal is difficult to achieve: TRUE
c) 1994 Baseball players' strike: TRUE
d) Owners needed salary cap to dissolve collusive behavior over salaries: TRUE.
Explanation:
a) According to the Economist, Oligopoly is "a market situation in which each of a few producers affects but does not control the market. Each producer must consider the effect of a price change on the actions of the other producers." There is little competition among the players as each tries to control the market with price cuts and quantity reductions. For example, a cut in price by one may lead to an equal reduction by the others, with the result that each firm will retain approximately the same share of the market as before but at a lowered profit level.
b) According to wikipedia.com, "The 1994–95 Major League Baseball strike was the eighth work stoppage in baseball history, as well as the fourth in-season work stoppage in 22 years. Due to the strike, both the 1994 and 1995 seasons were not played to a complete 162 games; the strike was called after most teams had played at least 113 games in 1994." The strike ended the next April, after 232 days, when the players had successfully resisted the salary cap.
As an economist working at the International Monetary Fund, you are given the following data for Burundi: observed per capita GDP, relative to the United States, is 0.01; predicted per capita GDP, given by , is 0.18. What is total factor productivity
Answer: 0.056
Explanation:
Total factor productivity is the ratio of the aggregate that is, the total output to the aggregate inputs. Total factor productivity is used to measure economic efficiency of a country.
From the question, we are informed that Burundi's observed per capita GDP, relative to the United States, is 0.01 and the predicted per capita GDP is 0.18. Then, the total factor productivity will be:
= 0.01/0.18
= 0.056
If the factory overhead is underapplied, then the adjusting journal entry to close the factory overhead account includes a: (Check all that apply.)\
Answer:
Debit to cost of goods sold and credit to factory overhead
Explanation:
Here we are interested in knowing the appropriate journal entry when the factory overhead is under applied.
What happens to the factory overhead journal in this case is that the we should have an adjusting journal entry.
The adjusting journal entry here is that we debit cost of goods sold and credit factory overhead
Formaggio Vecchio announced its regular quarterly cash dividend of $0.20 per share. Currently there are one million shares outstanding.
Declaration date: October 24, 2006
Ex-dividend date: November 20, 2006
Record date: November 22, 2006
Payment date: December 15, 2006
On ____ will the stock price change to reflect the value of the dividend;
Formaggioâs stock price at the end of November is expected to be $20. The dividend yield is ____;
Suppose that the marginal tax rate on dividend is 15% and the marginal tax rate on capital gain is 10%, the stock price will fall by _____ after the ex-dividend date;
Suppose that the company decides to use the same amount of cash to buy back shares rather than to issue cash dividends. The company will buy back shares at the market price at the end of November. You currently hold 10000 shares, and you decide to sell 1000 shares during the repurchase. The percentage ownership after the repurchase is ____ ;
Suppose that the company decides to issue a 10% stock dividend instead of a cash dividend. The stock price will fall by ___ due to the dilution
Answer:
A.On Ex-dividend date: November 20, 2006
B.1%
C.$0.19
D. $1.82
Explanation:
1.On Ex-dividend date: November 20, 2006
will the stock price change to reflect the value of the dividend
b. Calculation for Formaggio’s dividend yield
Using this formula
Dividend yield = dividend/share price
Let plug in the formula
= .20/20 = 1%
c. Calculation of how much the stock price is likely to fall
0.20*(1 – 15%) = P*(1 – 10%)
Solve for P = $0.19
d. Calculation of How much is the stock price likely to fall Suppose that the company decides to issue a 10% stock dividend instead of a cash dividend.
$1,000,000 + (1,000,000 * 10%)
$1,000,00+$100,000
= 1,100,000 total shares
Hence,
$20,000,000 / 1,100,000 = $18.18 per share
$20 – 18.18 = $1.82 fall
Explain how the Federal Reserve Board can increase or decrease the money supply using each of the following tools: reserve requirements, open-market activities, and discount rates
Answer:
Reserve requirements – Reserve requirement increases to decrease the money supply or vice versa.
Open-market activities – the Fed sell the securities to reduce money supply or purchase it to increase the money supply.
Discount rates – Decrease the discount rate to increase the money supply or vice versa.
Explanation:
The Federal Reserve increases or decreases the money supply by using various tools. So in the case of the reserve requirement, the bank increases the percentage of reserve requirement if the Fed wants to decrease the money supply and to increase the money supply it reduces the reserve requirements. In the case of open market operations, the Fed sells securities and bonds in the market in order to reduce the supply of money or to decrease the supply of money it buys the securities from the market.
In the case of a discount rate, the Fed reduces the discount rate to increase the money supply because reducing the discount rate will induce the banks to give more loans. But to decrease the money supply, the Fed increases the discount rate because an increase in the discount rate reduces the ability of banks to give loans.
During a Value-Added Flow Analysis, the team studied a process step where they checked the customer's credit. What is the best label for this step?
Answer:
Non-Value-Adding but required.
Explanation:
A Value-Added flow analysis is a graphical visualization tool that is used for identifying non-essential activities or steps within a process. It basically, allows individuals or team to analyze, identify and separate value-adding activities from non-value-adding activities or steps in an organization. This simply means that, it avails an organization or business the ability to separate activities that add value for the user from the activities that are non-value-adding.
The value-adding activities are the steps that adds value to an organization's product or project while the non-value-adding activities are those steps which do not add any value to the organization's product.
In this scenario, during a value-added flow analysis, the team studied a process step where they checked the customer's credit. The best label for this step is Non-value-adding but required.
The process of checking a customer's credit is a necessary task or a required step but in the real sense of lean, it is considered as a non-value-adding activity. This is simply because, it is required to check the customer's credit in order to update the balance sheet and to know the amount that is granted to these customers.
However, it does not add any value to the organization.
Sheboygan Co. purchased a new vehicle at a cost of $42,000 on July 1. The vehicle is estimated to have a useful life of 6 years and a salvage value of $3,000. The company uses the straight-line method of depreciation. How much depreciation expense will be recorded for the vehicle during the first year ended December 31?
Answer:
The depreciation at the end of first year = $3250
Explanation:
The cost of a new vehicle on July 1st = $42000
The estimated useful life of vehicle = 6 years
The salvage value of vehicle = $3000
It is given that the company uses the straight-line method for depreciation so we have to calculate the depreciation by subtracting the salvage value from its cost and dividing by years.
Depreciation = ($42000 – $3000) / 6 = $6500
So annual depreciation is $6500.
Therefore depreciation at the end of the first yThe depreciation at the end of first year = $3250ear that is for 6 months = $3250
The economic situation of Rutenia is characterized by the following facts: GDP. Strong economic growth, of about 4%. Unemployment. Moderate unemployment of around 5% Inflation is very high, around 10% High public deficit.
Answer:
See below
Explanation:
Although a great GDP of 4% gives the impression of a strong economy, as is the case here, the inflation rate is much higher than desired. So, economic policies need to be reviewed in order to determine where the problem lies and what steps can be taken to remedy this situation.
Examine the equal opportunity laws of another country, not the United States. Are the laws in other countries as much a concern for HRM specialists as they are in the United States?
Answer:
The equal opportunity laws of another country, not the United States is discussed below in details.
Explanation:
An equal opportunity system is a certificate that declares what measures a company takes to eliminate and stop discrimination in the workplace.
The United Kingdom employment equality law is an organization of law that legislates against prejudice-based activities in the workplace.
The prime legislation is the Equality Act 2010, which condemns discrimination in passage to education, government services, private services, and goods, or assumptions in addition to employment.
OJ's Orange Juice produces orange juice to sell in a competitive market.Given uncertainty in weather patterns, OJ has to determine how much juice to produce before knowing the competitive price. It is estimated that there is a 10 percent chance the competitive price will be $5 and a 90 percent chance the price will be $2. If the marginal cost of producing orange juice is MC(Q) = 2Q, then to maximize expected profits, OJ should produce:__________.a- 0.25 units. b- 2.5 units. c- 1.15 units. d- 0.9 units.
Answer:
c- 1.15 units.
Explanation:
This can be calculated as follows:
Expected price at 10 percent = $5 * 10% = $0.5
Expected price at 90 percent = $2 * 90% = $1.80
Total expected price (EP) = $0.5 + $1.80 = $2.3
Since profit is maximized when EP = MC, we have:
2.3 = 2Q
Q = 2.3 / 2 = 1.15
Therefore, OJ should produce 1.15 units to maximize expected profit. The correction is therefore c- 1.15 units.
Trade Mart has recently had lackluster sales. The rate of inventory turnover has? dropped, and the merchandise is gathering dust. At the same time, competition has forced AquariumAquarium's suppliers to lower the prices that Aquarium will pay when it replaces its inventory. It is now December 31, 2016, and the current replacement cost Aquarium's ending inventory is $75,000 below what Aquarium actually paid for the goods, which was $200,000.
Before any adjustments at the end of the? period, the Cost of Goods Sold account has a balance of $$820,000.
Requirements:
a. What accounting action should Aquarium take in this situation?
b. Give any journal entry required.
c. At what amount should Aquarium report Inventory on the balance? sheet?
d. At what amount should the company report Cost of Goods Sold on the income? statement?
e. Discuss the accounting principle or concept that is most relevant to this situation.
Answer:
a. What accounting action should Aquarium take in this situation?
the balance of inventory account should decrease to match the replacement cost.
b. Give any journal entry required.
Dr Cost of goods sold 75,000
Cr Inventory 75,000
c. At what amount should Aquarium report Inventory on the balance? sheet?
Inventory = $200,000 - $75,000 = $125,000
d. At what amount should the company report Cost of Goods Sold on the income statement?
Cost of goods sold = $820,000 + $75,000 = $895,000
e. Discuss the accounting principle or concept that is most relevant to this situation.
US GAAP states that companies must use the lower of cost or market rule, which means that inventory must be recognized at the lowest cost either original purchase cost or market value.
Although labor is typically viewed as a variable cost in the very short run, some labor costs may be fixed. Which of the following items represents an example of a fixed labor cost?A) An hourly employee.B) A temporary worker who is paid by the hour.C) A grad student in a NSF project.D) A salaried manager who has a three-year employment contract.
Answer:
D.
Explanation:
If he already has a fixed salary and a three-year employment then the variable is fixed
An example of a fixed labor cost is a salaried manager who has a three-year employment contract.
A VARIABLE cost is a cost that varies with the production. This is quite different from the FIXED COST that is fixed regardless of production.
In this case, since the worker has a three-year employment contract, his salary is fixed for the three years.
In conclusion, the answer is salaried manager who has a three-year employment contract.
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Big Wheel, Inc. collects 25% of its sales on account in the month of the sale and 75% in the month following the sale. Sales on account are budgeted to be $16,300 for March and $32,600 for April. What are the budgeted cash receipts from sales on account for April
Answer:
Total cash collection= $20,375
Explanation:
Giving the following information:
Big Wheel, Inc. collects 25% of its sales on account in the month of the sale and 75% in the month following the sale.
Sales:
March= $16,300
April= $32,600
Cash collection April:
Sales on account from April= 32,600*0.25= 8,150
Sales on account from March= 16,300*0.75= 12,225
Total cash collection= $20,375
The asset, liabilities, and equities of Drought Design Studio have the following balances at December 31, 2018. The retained earnings was $35,000 at the beginning of the year. At year end, common stock was $17,000 and dividends were $61,000.
Notes Payable $14,000
Rent Expense 23,000
Cash 3,200
Office Supplies 5,100
Salaries Expense 65,000
Property Tax Expense 2,200
Office Furniture $48,400
Utilities Expense 7,200
Accounts Payable 3,600
Service Revenue 154,600
Accounts Receivable 9,300
Miscellaneous Expense 3,800
Required:
Prepare the income statement for Drought Design Studio for the year ending December 31, 2018.
Answer:
Drought Design Studio
Income statement for the year ending December 31, 2018.
Revenue
Service Revenue $154,600
Expenses
Rent Expense $23,000
Salary Expense $65,000
Property Tax Expense $2,200
Utilities Expenses $7,200
Miscellaneous Expenses $3,800
Less: Total Expenses $101,200
Net Income $53,400
Firm L has debt with a market value of $200,000 and a yield of 9%. The firm's equity has a market value of $300,000, its earnings are growing at a rate of 5%, and its tax rate is 40%. A similar firm with no debt has a cost of equity of 12%. Under the MM extension with growth, what is Firm L's cost of equity?
Answer:
Firm L's cost of equity is 13.2%
Explanation:
In order to calculate Firm L's cost of equity we would have to calculate the following formula:
Firm L's cost of equity=Unlevered cost of equity+D/E*( Unlevered cost of equity-cost of debt)*(1-tax rate)
D/E = debt/equity
D/E = $200,000/$300,000
D/E=0.6666
Therefore, Firm L's cost of equity= 12%+0.6666*(12%-9%)*(1-0.4)
Firm L's cost of equity=13.2%
Firm L's cost of equity is 13.2%