Answer and Explanation:
The computation is shown below:
The formula is
= Amount ÷ (1 + interest rate)^number of years
a) Rate = 11%
Value of $140 in 1 year = $140 ÷ (1 + 11%) = $126.13
Value of $240 in 5 years = $240 ÷ (1 + 11%)^5 = $142.43
Value of $350 in 10 years = $350 ÷ (1 + 11%)^10 = $123.26
Now Ranking
Opotion 2 > Option 3 > Option 1
b) Rate = 1%
Value of $140 in 1 year = $140 ÷ (1 + 1%) = $138.61
Value of $240 in 5 years = $240 ÷ (1 + 1%)^5 = $228.35
Value of $350 in 10 years = $350 ÷ (1 + 1%)^10 = $316.85
Now Ranking
Option 3 > Option 2 > Option 1
c) Rate = 20%
Value of $140 in 1 year = $140 ÷ (1 + 20%) = $116.67
Value of $240 in 5 years = $240 ÷ (1 + 20%)^5 = $96.45
Value of $350 in 10 years = $350 ÷ (1 + 20%)^10 = $56.53
Now Ranking
Option 1 > Option 2 > Option 3
Who is following the law when it comes to protecting investors’ funds?
Answer:
A mutual fund advisor who informs investors about risks is following the law when it comes to protecting investors’ funds
Explanation:
Answer:B (a mutual fund advisor who informs investors about risks)
Explanation:
Which best describes the role the applicants can fill in the company? Applicants 1 and 3 are best suited to work in network systems, while Applicant 2 could work in programming, information support, or interactive media. Applicants 2 and 3 are best suited to work in network systems, while Applicant 1 could work in programming, information support, or interactive media. Applicant 1 is best suited to work in network systems, while Applicants 2 and 3 could work in programming, information support, or interactive media. Applicant 3 is best suited to work in network systems, while Applicants 2 and 3 could work in programming, information support, or interactive media.
Incomplete question, however I made interferences from an employer perspective.
Answer:
Applicant 1 is best suited to work in network systems, while Applicants 2 and 3 could work in programming, information support, or interactive media.
Explanation:
From a performance point of view the programming, information support and interactive media roles of the company would be better handled by more than one individual since this roles involve more responsibilities that could not be handled by one individual.
The network systems role can better be managed by Applicant 1 only as it is a task that could be handled by a single employee.
Answer:
C. Applicant 1 is best suited to work in network systems, while Applicants 2 and 3 could work in programming, information support, or interactive media.
Explanation:
Took The TestOn September 30 the bank statement of Fine Company showed a balance of $7,800. The following information was revealed by comparing the bank statement to the cash balance in Fine's accounting records:
A. Deposits in transit amounted to $3,150
B. Outstanding checks amounted to $6,200
C. A $550 check was incorrectly drawn on Fine's account
D. NSF checks returned by the bank were $750
E. The bank service charge was $29
F. Credit memo for $75 for the collection of one of the company's account receivable
What is the true cash balance?
A) $5,346
B) $5,300
C) $4,596
D) $7,096
Answer:
B) $5,300
Explanation:
The computation of cash balance is shown below:-
True cash balance = Unadjusted bank balance + Deposit in transit + Error in check - Outstanding checks
= $7,800 + $3,150 + $550 - $6,200
= $11,500 - $6,200
= $5,300
Therefore for computing the true cash balance we simply applied the above formula and not considered all other amount as they are not relevant.
The income elasticity for most staple foods, such as wheat, is known to be between zero and one. As incomes rise over time, what will happen to the demand for wheat? What will happen to the quantity of wheat purchased by consumers? What will happen to the percentage of their budgets that consumers spend on wheat? All other things equal, are farmers likely to be relatively better off or relatively worse off in periods of rising incomes?
Answer and Explanation:
a. As it is given that the income elasticity of wheat is between zero and one that reflects inelastic and less than unity condition.
So in this, when the income is increased the demand for wheat is also increased but it would be less proportionally
And, the percentage increase in demand for wheat is lower than the increase in income
b. The quantity of wheat purchased is increased as there is an increase in income which increased the demand for all goods
c. The percentage of their budget will go decline as the income elasticity is between zero and one that results into an increase in income and they can switch more expenditure for other goods
d. The farmer condition does not affect overall as if the income increased the demand for other goods is also increased but it is more than the wheat
A company's production department was experiencing a high defect rate on the assembly line, which was slowing down production and causing wastage of valuable direct materials. The production manager decided to purchase a higher grade of materials that would be more reliable, but he was worried that the cost of the new materials might negatively affect operating income. This would produce a(n) ________.A. unfavorable direct materials cost variance
B. unfavorable direct materials efficiency variance
C. favorable direct labor cost variance
D. favorable direct labor efficiency variance
Answer:
D
Explanation:
Because the higher the quality of materials the more efficient the product will be
At the beginning of Year 2, Oak Consulting had the following normal balances in its accounts:
Account Balance
Cash $29,400
Accounts receivable 21,600
Accounts payable 12,000
Common stock 28,300
Retained earnings 10,700
The following events apply to Oak Consulting for Year 2:
Provided $68,400 of services on account.
Incurred $3,100 of operating expenses on account.
Collected $47,400 of accounts receivable.
Paid $31,100 cash for salaries expense.
Paid $13,590 cash as a partial payment on accounts payable.
Paid a $8,500 cash dividend to the stockholders.
Required:
a. What is the amount of net income for the year?
b. What is the amount of change in retained earnings for the year?
Answer:
a. What is the amount of net income for the year?
$34,190b. What is the amount of change in retained earnings for the year?
increased by $25,690Explanation:
net income:
total service revenue $68,400salaries expense -$31,100operating expenses -$3,100net income = $34,190change in retained earnings = net income - dividends = $34,190 - $8,500 = $25,690
Revenue and expenses are recorded on the periods that they occur, regardless of when they are collected or paid respectively.
An engineering firm measures its output in standard service hours (SSH) per unit, which is a function of the skill levels of its engineers (skill levels range from an engineering intern to an engineering scientist). The variable cost is $60 per SSH and the fixed cost is $2,000,000 per year. The firm charges $100 for each service per hour. Assume the maximum hours the firm operates (that is the output) is 170,000 per year. a) Compute the break-even point in SSH.b) At what percentage does the break-even occur as compared to the maximum hours the firm operates? c) What is the percentage reduction in the break-even point if the fixed cost can be reduced by 20%? d) Does the break-even point increase or decrease if the charges per service are increased by 10%? e) What is your recommendation? Should the firm reduce the fixed cost or increase the price?
Answer:
Instructions are below.
Explanation:
Giving the following information:
The variable cost is $60 per SSH and the fixed cost is $2,000,000 per year. The firm charges $100 for each service per hour. Assume the maximum hours the firm operates (that is the output) is 170,000 per year.
1) To calculate the break-even point, we need to use the following formula:
Break-even point in units= fixed costs/ contribution margin per unit
Break-even point in units= 2,000,000/ (100 - 60)
Break-even point in units= 50,000 hours
2) %of hours= (50,000/170,000)*100= 29.41%
3) Fixed costs= $1,800,000
Break-even point in units= 1,800,000/40
Break-even point in units= 45,000 hours
The number of units required to cover for fixed costs diminished by 10%.
4) Selling price= $110
Break-even point in units= 2,000,000/(110 - 60)
Break-even point in units= 40,000 hours
The number of units required to cover for fixed costs diminished by 20%.
5) In generals terms, it is easier to increase the selling price compared to decreasing fixed costs. In this case, the best option is to increase the selling price. The effect on income and the break-even analysis is higher than decreasing fixed costs.
Clark Company estimated the net realizable value of its accounts receivable as of December 31, 2019, to be $178,000, based on an aging schedule of accounts receivable. Clark has also provided the following information: The accounts receivable balance on December 31, 2019 was $190,600. Uncollectible accounts receivable written off during 2019 totaled $13,300. The allowance for doubtful accounts balance on January 1, 2019 was $17,600. How much is Clark's 2019 bad debt expense
Answer: $8,300
Explanation:
Clark Company estimates that the net realizable value of their Accounts Receivable is $178,000. This is while their Accounts Receivable balance on the same date is $190,600.
This would infer that out of $190,600, they only intend on recovering $178,000.
The difference in these figures will be the Allowance for Doubtful Accounts balance at the end of the year because that is the amount that they do not believe they'll receive.
= 190,600 - 178,000
= $12,600
When the year started, the Allowance Balance was $17,600. Uncollectible Amount written off was $13,300. This amount would be written off from this account which would supposedly leave the balance to be,
= 17,600 - 13,300
= $4,300
The balance on the Allowance account is supposed be $12,600 yet the amount written off brings it to $4,300. The bad debts Expense for the year therefore, is the difference between these 2 figures because it is the bad debt expense that was written off from the $12,600 to bring it to $4,300.
= 12,600 - 4,300
= $8,300
Clark's 2019 Bad Debt expense is $8,300
Answer:
2017
Explanation:
You have recently been hired as the vice president for human resource in an advertising agency. One problem that has been brought to your attention is the fact that the creative departments at the agency have dysfunctionally high levels of conflict. You have spoken with members of each of these departments, and in each one it seems that a few members of the department are creating all the problems. All these individuals are valued contributors how have many creative ad campaigns to their credit. The high levels of conflict are creating problems in the departments, and negative moods and emotions are much more prevalent than positive feelings. What are you going to do to both retain valued employees and alleviate the excessive conflict and negative feelings in these departments?
Explanation:
There are two problems that need to be solved in the scenario above: the increase in team conflicts and the retention of valuable employees who are the cause of conflicts. In these two situations, as recently hired as vice president of human resources for an advertising agency, the ideal would be to try to understand how the people management process that occurred before his arrival at the company was carried out, and from there, find strategies for resolve the two main types of conflicts that occur at the advertising agency.
Some solutions arise from the principle of revising the HR policy and establishing a more direct and facilitated communication with employees, in order to increase the employees' perception of a management focused on the employee's well-being and open to feedbacks.
Another solution for reducing conflicts in teams is the assessment and analysis of the profile of each member individually and in a group, in order to monitor the individual and collective performance of each and define assignments according to their skills, generating greater integration between teams and appreciation of each employee, which increases engagement and motivation at work, reducing conflicts and turnover.
Nutall Corporation is considering dropping product N28X. Data from the company's accounting system appear below:
Sales $ 660,000
Variable expense $ 285,000
Fixed manufacturing expenses $ 244,000
Fixed selling and administrative expense $ 192,000
All fixed expenses of the company are fully allocated to products in the company's accounting system. Further investigation has revealed that $195,500 of the fixed manufacturing expenses and $110,500 of the fixed selling and administrative expenses are avoidable if product N28X is discontinued.
Required:
According to the company's accounting system, what is the net operating income earned by product N28X? (Input the amount as a positive value.)
Answer:
net operating income earned by product N28X is $ 69,000.
Explanation:
Only the avoidable costs will be accounted for in determining net income earned by N28X for its decision.
Sales $ 660,000
Less Variable expense ($ 285,000 )
Contribution $ 375,000
Fixed manufacturing expenses ($195,500 )
Fixed selling and administrative expense ($110,500)
Net Income / (loss) $ 69,000
Therefore, net operating income earned by product N28X is $ 69,000.
Initially, you produce 100 boxes of jelly beans per time period. Then a new customer calls and places an additional order for jelly beans, requiring you to increase your output to 101 boxes. She offers you $1.75 for the additional box. Should you produce it?
Answer:
You should produce as long as the marginal cost per additional box is lower than the marginal revenue obtained by the additional box.
In other words, if the marginal cost of producing the 101th box is lower than $1.75, then, you should continue to produce, because revenue will be higher than cost, and a profit will be made as a result.
A new American graduate is contemplating buying a
Japanese, German, or an American car. No matter the type of car, he
plans to buy a new one at the end of 8 years.
The Japanese cars will cost $30,000 and have a fuel
usage of 23 Miles Per gallon (mpg) for the first 2 years and will
decrease by 3% per year thereafter. The repair cost will start at $700
per year, and increase by 3% per year. At the end of year 8, the
car can be sold for $5000. Insurance cost will be $700 for the
first year, increasing by 2% per year thereafter.
A German car will cost $45,000 and have fuel usage
of 21mpg for the first 5 years, and decrease by 1% thereafter to
year 8. The repair cost will start at $1000 in year 1 and increase by
4% per year. It will have a salvage value of $7000 at the end of
year 8. Insurance cost will be $850 the first year, increasing by
2% per year thereafter.
The American car will cost $35,000 and have fuel
usage of 20mpg for the first 3 years and will decrease by 3% per
year thereafter. The repair cost will be $800 in year 1, increasing by
4% per year thereafter. Being an American, the graduate will price
the pride of owning an American car at $0.4 for every 20 miles
driven, increasing by 2% per year. Insurance costs will be $800 per
year increasing by 2.2% per year. The car can be sold for $5500 at
the end of year 8.
If the graduate anticipates driving 150000 miles by
the end of year 8 and the average interest rate is expected to
remain at 5% per year, which car is economically affordable based
on present worth analysis? Assume fuel cost will be $3 per gallon
in year 1 and increase by an average of 2% per year. Show all your
workings.
Answer:
The best option is to buy Japanese Car.
Explanation:
Fuel usage per year is 150000/ 8 = 18750 miles per year
Fuel cost (year 1 -8) = $3.0, $3.06, $3.12, $3.18, $3.25, $3.312, $3.38, $3.5
Japanese Car:
Fuel usage 18750 / 23 = 815 * $3 = $2446
Fuel charges (year 1 -8) = $2445, $2494, $2623, $2758. $2900, $3050, $3207, $3372
Repair Cost (year 1 - 8) = $700, $721, $742, $764, $787, $811, $835, $860
Insurance cost (Year 1 - 8) = $700, $714, $728, $742, $757, $772, $788, $804
Present value of cost at 5% = 24674.07
Cost of car is $30,000
Total cost = $54674.07
American Car:
Cost $35,000
Fuel usage 18750/20 = 937.5 * $3 per gallon = $2812.5.
Fuel charges (year 1 -8) = $2812, $2913, $2986, $3011. $3098, $3124, $3176, $3208
Repair Cost (year 1 - 8) = $800, $894, $921, $978, $1109, $1176, $1207, $1301
Insurance cost (Year 1 - 8) = $800, $827, $876, $898, $908, $932, $954, $934
Present value of cost at 5% = 25302.18
Cost of car is $35,000
Total cost = $60302.
German Car:
Cost = $45,000
Fuel usage 18750 / 21 = 892 * $3 = $2678
Fuel charges (year 1 -8) = $2679, $2732, $2786, $2842. $2899, $2987, $3077, $3171
Repair Cost (year 1 - 8) = $1000, $1040, $1081, $1124, $1169, $1216, $1265, $1316
Insurance cost (Year 1 - 8) = $850, $867, $884, $902, $920, $938, $957, $976
Present value of cost at 5% = 27105.73
Cost of car is $45,000
Total cost = $72105.
Prepare Journal Entries in a Revenue Journal Horizon Consulting Company had the following transactions during the month of October: Oct. 2 Oct. 3 Oct. 14. Oct. 24 Oct. 29 Issued Invoice No. 321 to Pryor Corp. for services rendered on account, $380 Issued Invoice No. 322 to Armor Inc. for services rendered on account, $540. Issued Invoice No. 323 to Pryor Corp. for services rendered on account, $190. Issued Invoice No. 324 to Rose Co. for services rendered on account, $790 Collected Invoice No. 321 from Pryor Corp.
a. Record the October revenue transactions for Horizon Consulting Company in the following revenue journal format revenue journal Accounts Rec. Dr DATE Invoice No. Account Debited Post. Ref Fees Earned Cr Oct. 2 Oct. 3 Oct. 14 Oct. 24 Oct. 31
b. What is the total amount posted to the accounts receivable and fees earned accounts from the revenue journal for October? Accounts receivable Fees earned c. What is the October 31 balance of the Pryor Corp, customer account assuming a zero balance on October 1?
Answer and Explanation:
The recording and the computations are as follows
a. The recording of the October revenue transactions are shown below:
DATE INVOICE NO. ACCOUNT DEBITED POST.REF.
ACCOUNT REC. DR. FEES EARNED CR.
Oct 2 321 Pryor Co.
380
Oct 3 322 Armor Co.
540
Oct 14 323 Pryor co.
190
Oct 24 324 Rose co.
790
Oct 31 1900
b) Now the total amount for account receivable and fees earned is
Account receivable = 1900
Fees earned = 1900
c) The October 31 balance is
October 31 balance
= $380 + $190 - $380
= $190
A company just starting in business purchased three merchandise inventory items at the following prices. First purchase $60; Second purchase $67; Third purchase $64. If the company sold two units for a total of $209 and used FIFO costing, the gross profit for the period would be
Answer:
$82
Explanation:
As company Uses FIFO system, it will sell first two products
The cost price =($60 + $67 = 127).
So Gross profit = Selling Price-Cost Price
Gross Profit = 209-127
= $82
The gross profit for the period is $82
Categories the following into Market economy and Non-market economy.
1. Prices are set by government agencies.
2. The invisible hand guides resources to their highest valued uses
3. Buyers and sellers are motivated by government directives.
4. Prices are set by supply and demand
5. Buyers and sellers are motivated by a sense of communal well- being.
6. Buyers and sellers are motivated by self-interest.
Answer:
Market economy:
2. The invisible hand guides resources to their highest valued uses
4. Prices are sey by supply and demand
6. Buyers and sellers are motivated by self-interest
Non-market economy:
1. Prices are set by government agencies
3. Buyers and sellers are motivated by government directives
5. Buyers and sellers are motivated by a sense of communal well-being
Explanation:
On the one hand, the concept of market economy refers to a type of economy system that basically indicates that the market will find the equilibrium and work properly without the help of the government and therefore it establishes that the economy does not need from the figure of the government and that this last one must worry only about the other issues that do not include the economy.
On the other hand, a non-market economy like its name indicates, it refers to the type of system that do consider that the presence of the government is very important for the correct system of the economy and all of its factors regarding the market. Therefore that this type of system approves the planning of the economy from the government without discussions.
2. Jill would like to plan for her son’s college education. She would like for her son, who was born today, to attend college for 5 years, beginning at age 18. Tuition is currently $12,000 per year and tuition inflation is 6%. Jill can earn an after-tax rate of return of 8%. How much must Jill save at the end of each year, if she wants to make the last payment at the beginning of her son’s first year of college?
Answer:
$4,531.50
Explanation:
first we must determine the cost of tuition in 18 years (2038):
$12,000 x (1 + 6%)¹⁸ = $34,252 per year
to calculate the total value of college tuition (5 years) in 2038 we can use the annuity due factor (6% and 5 years) 4.4651:
total college tuition = $34,252 x 4.4651 = $152,939
this means that Jill needs to have $152,939 for the moment her son starts college:
we have to calculate the payment:
to calculate the future value of an annuity (since she starts to save at end of the year, it is an ordinary annuity, not annuity due) we use the following formula:
future value = payment x ordinary annuity factor (8% and 17 years)
we know future value ($152,939) and the annuity factor = 33.7502
payment = future value / annuity factor
payment = $152,939 / 33.7502 = $4,531.50
Consider the market for meekers in the imaginary economy of Meekertown. In the absence of international trade, the domestic price of a meeker is $30. Suppose that the world price for a meeker is $40. Assume that Meekertown is too small to influence the world price for meekers once they enter the international market.
If Meekertown allows free trade, then it will (import/export?) meekers.
Given current economic conditions in Meekertown, complete the following table by indicating whether each of the statements is true or false.
Statement True False
Meekertownian consumers are worse off under free trade than they were before.
Meekertownian producers were better off without free trade than they are with it.
True or False: When a country is too small to affect the world price, allowing for free trade will always increase total surplus in that country, regardless of whether it imports or exports as a result of international trade.
Answer:
Export
True
False
True
Explanation:
Free trade is a form of trade policy where there are no restrictions to imports or exports of goods and services.
The price of meekers is $30 in Meekertown and $40 In the world. Because meeker's are cheaper in Meekertown, it means that Meekertown is efficient in the production of meekers. As a result, they would export meekers to the rest of the world. It would be cost efficient for the rest of the world to import from Meekertown.
Consumers in Meekertown are worse of because of the trade because the price of Meekers would rise.
Producers are better off because they would earn more profits from the sale of Meekers at the world price.
Free trade increases total surplus because of efficient production. If a country is inefficient in production, it would import . This would increase consumer surplus and if it is efficient in production, it would export increasing producer surplus.
I hope my answer helps you
During the year, TRC Corporation has the following inventory transactions. Date Transaction Number of Units Unit Cost Total Cost Jan. 1 Beginning inventory 44 $ 36 $ 1,584 Apr. 7 Purchase 124 38 4,712 Jul. 16 Purchase 194 41 7,954 Oct. 6 Purchase 104 42 4,368 466 $ 18,618 For the entire year, the company sells 413 units of inventory for $54 each. Required: 1. Using FIFO, calculate ending inventory, cost of goods sold, sales revenue, and gross profit.
Answer:
TRC Corporation
Calculations, using FIFO:
a) Ending Inventory:
Ending Inventory in units = Units available for sale minus Units sold
Ending Inventory in units = 466 - 413 = 53 units
Ending Inventory value = Units x FIFO cost of last purchase = 53 x $42 = $2,226
b) Cost of goods sold:
Cost of goods sold = Beginning Inventory + Purchases - Ending Inventory
Cost of goods sold = $1,584 + 17,034 - 2,226 = $16,392
c) Sales Revenue:
Sales Revenue = Units sold x Selling price = 414 x $54 = $22,302
d) Gross Profit:
Gross Profit = Sales Revenue minus Cost of goods sold
Gross Profit = $22,302 - $16,392 = $5,910
Explanation:
a) Summary of Inventory Transactions:
Date Transaction Number of Units Unit Cost Total Cost
Jan. 1 Beginning inventory 44 $ 36 $ 1,584
Apr. 7 Purchase 124 38 4,712
Jul. 16 Purchase 194 41 7,954
Oct. 6 Purchase 104 42 4,368
b) Cost of goods available 466 $ 18,618
c) Sales 413 $ 54 $ 22,302
d) Dec. 31 Ending Inventory 53 42 $ 2,226
e) The FIFO (First-in, First-out) inventory method assumes that goods sold are from earlier inventory units, unlike Last-in, First-out (LIFO). This means that beginning and earlier purchased inventory units are sold first before the latest purchases. Using the FIFO method, the ending inventory is valued at the cost of the most recent inventory purchases.
Suppose the market for pizzas is unregulated. That is, pizza prices are free to adjust based on the forces of supply and demand.
If a shortage exists in the pizza market, then the current price must be.............than the equilibrium price. For the market to reach equilibrium, you would expect................
Answer:
Lower
Buyers would offer higher prices
Explanation:
When a shortage occurs when Demand exceeds supply. Excess demand occurs when price is below equilibrium price and as a result suppliers reduce quantity supplied.
As a result of the shortage, buyers would offer higher prices. As a result of the higher prices, the quantity supplied would increase and equilibrium would be restored.
I hope my answer helps you
Pekoe sold stock to his sister Rose for $12,000, its fair market value. Pekoe bought the stock 5 years ago for $16,000. Also, Pekoe sold Earl (an unrelated party) stock for $6,500 that he bought 3 years ago for $9,500. What is Pekoe's recognized gain or loss?
Answer:
The answer is $3000
Explanation:
Solution
Given that:
Pekoe sold stock to his sister rose for the amount = $12,000
The stock cost 5 years ago for Pekoe = $16,000
Pekoe sold earl stock for =$6,500
Previous stock for earl 3 years ago = $9,500
Now we have to find the recognized loss of Pekoe
THus,
The sale of stock to rose will be a loss of $ 4000
which is
($12,000 -$16,000) =$4000 loss
Thus,
The sale of stock to Earl will result to the following loss which is state below:
$6,500 - $9,500 = a loss of $3000
Therefore the recognized loss of pekoe is $3000 or -$3000
Note: A loss was recognized here, no gain earned
Answer:
Pekoe would recognize the loss of $3,000.
Explanation:
The sale of stock to Rose would result in a loss of $3,000 ($12,000 (FMV) - $16,000 (cost) = $4,000 loss).
Under the tax law, "losses from sale or exchange of property ... directly or indirectly" are disallowed between related parties. When the property is later sold to an unrelated party, any disallowed loss may be used to offset gain on that transaction.
The sale of stock to Earl (an unrelated party) also results in a loss ($6,500 (FMV) - $9,500 (cost) = $3,000 loss). This is considered an arms-length transaction.
Pekoe would recognize the loss of $3,000.
Hank, a calendar-year taxpayer, uses the cash method of accounting for his sole proprietorship. In late December, he performed $20,000 of legal services for a client. Hank typically requires his clients to pay his bills immediately upon receipt. Assume his marginal tax rate is 30 percent this year and will be 33 percent next year, and that he can earn an after-tax rate of return of 12 percent on his investments.a. What is the after-tax income if Hank sends his client the bill in December?After- tax income ?b. What is the after-tax income if Hank sends his client the bill in January? (Do not round intermediate calculations. Round "PV Factor" to 3 decimal places. Round your answer to 2 decimal places.)after-tax income ?c. Should Hank send his client the bill in December or January?DecemberJanuaryd. What is the after-tax income if Hank expects his marginal tax rate to be 25 percent next year and sends his client the bill in January? (Round "PV Factor" to 3 decimal places. Round your answer to 2 decimal places.)
Answer: a. $14,000
b. $14,106
c. January
2. $15,535
Explanation:
a. If Hank sends the bill in December.
Tax rate is 30% this year.
Amount is $20,000
After Tax Income = 20,000 * (1 - tax)
= 20,000 ( 1 - 30%)
= $14,000
b. If Hank pays Next year
Tax rate is 33%
After tax return rate of 12%
Amount is 20,000
Tax = 20,000 * 33%
= $6,600.
Because this is next year, the present value of the tax needs to be computed for better comparison.
With an after tax return of 12%, the PV will be,
= 6,600 * PV factor ( 12%, 1 period)
= 6,600 * 0.893
= $5,894
The income therefore will be,
= $20,000 - 5,894
= $14,106
c. Hank should pay in January as he would make more income.
2. Tax rate is 25% next year and income is to be received next year.
Tax = 20,000 * 25%
= $5,000
PV of $5,000 = 5,000 * PV Factor (12%, 1 period)
= 5,000 * 0.893
= $4,465
After tax income = 20,000 - 4,465
= $15,535
53. To determine how to crash activity times a. normal activity costs and costs under maximum crashing must be known. b. shortest times with crashing must be known. c. realize that new paths may become critical. d. All of the alternatives are true.
Answer:
D. All of the alternatives are true.
Explanation:
Crash activity time are been used in the in different organisations for different reasons. In the case, above the mentioned conditions in all options are been put to consideration. Because in its determination, one has to analyze thoroughly its critical path method in its first step; here the tasks are been shortened before being tackled. Secondly, you identify the newer critical ways in dealing of the things.
Also, normal activity costs and costs under maximum crashing are been made known. Therefore, all options above appear to be one of the steps in critical ways of determining crash activity time.
Reese, a calendar-year taxpayer, uses the cash method of accounting for her sole proprietorship. In late December, she received a $31,000 bill from her accountant for consulting services related to her small business. Reese can pay the $31,000 bill anytime before January 30 of next year without penalty. Assume Reese’s marginal tax rate is 30 percent this year and will be 40 percent next year, and that she can earn an after-tax rate of return of 6 percent on her investments.a. What is the after-tax cost if she pays the $31,000 bill in December?b. What is the after-tax cost if she pays the $31,000 bill in January?
Answer:
a) The after-tax cost if she pays the bill in December is $21,700
b) The after-tax cost if she pays the bill in January is $19,306.80
Explanation:
a) If she pays the $31,000 bill in December
Present value tax savings = amount × marginal tax rate
= $31,000 × 30%
= $9,300
After-tax cost = Pre-tax cost - present value tax
= $31,000 - $9,300
= $ 21,700
b) If she pays the $31,000 bill in January
Present value tax savings = amount × marginal tax rate
= $31,000 × 40%
= $12,400
Calculation of discount factor = Present value = [tex]\frac{FutureValue}{(1+r)^{n} }[/tex]
= [tex]\frac{1}{(1+0.06)^{1} }[/tex]
= 0.943
Present value tax savings = amount × discount factor
= $ 12,400 × 0.943
= $11,693.20
After-tax cost = Pre-tax cost - present value tax
= $31,000 - $11,693.20
= $ 19,306.80
Riverbed Corporation was organized on January 1, 2020. It is authorized to issue 14,500 shares of 8%, $100 par value preferred stock, and 475,000 shares of no-par common stock with a stated value of $2 per share. The following stock transactions were completed during the first year.
Jan. 10 Issued 84,500 shares of common stock for cash at $4 per share.
Mar. 1 Issued 4,050 shares of preferred stock for cash at $110 per share.
Apr. 1 Issued 24,000 shares of common stock for land. The asking price of the land was $88,500. The fair value of the land was $83,500.
May 1 Issued 83,000 shares of common stock for cash at $5.25 per share.
Aug. 1 Issued 12,000 shares of common stock to attorneys in payment of their bill of $40,500 for services performed in helping the company organize.
Sept. 1 Issued 11,500 shares of common stock for cash at $5 per share.
Nov. 1 Issued 2,500 shares of preferred stock for cash at $111 per share
Required:
Journalize the transactions.
Answer:
Jan. 10
Cash $338,000 (debit)
Common Stock $338,000 (credit)
Mar. 1
Cash $445,500 (debit)
Common Stock $445,500 (credit)
Apr. 1
Land $88,500 (debit)
Common Stock $88,500 (credit)
May 1
Cash $435,750 (debit)
Common Stock $435,750 (credit)
Aug 1
Organizing Costs : attorneys $40,500 (debit)
Common Stock $40,500 (credit)
Sept. 1
Cash $57,500 (debit)
Common Stock $57,500 (credit)
Nov. 1
Cash (debit) $277,500
Share Premium ; Preference Stock (credit) $27,500
Preference Stock (credit) $250,000
Explanation:
The Common Stocks are classified as no-par common stock. This means there is no premium account recognized for this classification of stock. The stocks will be presented at their respective value at date of issuance.
With the Preference Stock, this is different. A par value of $100 has been established. Any payment made in excess of the par value will end up in Share Premium Account.
Magnolia, Inc. has budgeted sales for the first quarter of the next year to be 45,000 units. The inventory on hand at the beginning of quarter is 5,000 units. The desired ending inventory is 3,000 units. Calculate the budgeted production for the first quarter.
Answer:
Production= 43,000 units
Explanation:
Giving the following information:
Sales= 45,000 units
Beginning inventory= 5,000 units
The desired ending inventory is 3,000 units.
To calculate the budgeted production, we need to use the following formula:
Production= sales + desired ending inventory - beginning inventory
Production= 45,000 + 3,000 - 5,000
Production= 43,000 units
TerraLoc competes in the market for global positioning devices and services. The company manufactures its own GPS units, which are smaller than those of any other competitor and include a proprietary battery that lasts 200% longer than any other competitor's battery and that TerraLoc manufacturers on-site. TerraLoc also has developed proprietary software that is much faster and more precise than that of any competitor. When developing the proprietary battery, TerraLoc decided to manufacturer the battery in-house to reduce the possibility that the company it outsourced the battery manufacturing to might reverse engineer the battery and sell a similar product to competitors. This possibility was especially troubling given that the company expected a significant increase in demand due to the improved battery life. Additionally, TerraLoc sells its products and services through its own direct sales force to ensure that its representatives highlight the longer battery life of TerraLoc's units.
TerraLoc's decsion to manufacture the battery in-house is most consistent with which theory(s) of vertical integration?
a. Firm capability-based explanations
b. Alliance-based explanation
c. Opportunism-based explanations
d. Flexibility-based explanations
Answer:
The correct answer is the option A: firm capability-based explanations.
Explanation:
To begin with, given the fact that the company decided to manufactured the battery in-house in order to reduce the possibility of helping other competitors when using an outsourced manufacturer then the company is using its firm capability in order to achieve the goal of manufacturing that component of the final product. Therefore that if the company would not have the resources and capability of doing it then it would necessary outsourced the manufactured of it.
Suppose that there are three beachfront parcels of land available for sale in Asilomar and six people who would each like to purchase one parcel. Assume that the parcels are essentially identical and that the minimum selling price of each is $595,000. The following table states each person's willingness and ability to purchase a parcel.
Willingness and Ability to Purchase Dollars
Bob 620,000
Cho 570,000
Eric 540,000
Ginny 530,000
Sean 750,000
Yvette 660,000
Which of these people will buy one of the three beachfront parcels?
a. Bob
b. Cho
c. Eric
d. Gianny
e. Sean
f. Yvette
Assume that the three beachfront parcels are sold to the people that you indicated in the previous section. Suppose that a few days after the last of those beachfront is sold, another essentially identical beachfront parcels is sold, another essentially identical beachfront parcel becomes available for sale at a minimum price of $582,500. This fourth parcel _____ be sold, because _____ will purchase it from the seller for at least the minimum price.
Answer:
When the minimum price is 582,500, the forth parcel WILL not be sold because the willingness to pay is LESS and no one will purchase it from the seller for atleast the minimum price.
Explanation:
Bob 620,000
Sean 750,000
Yvette 660,000
The people that will buy one of the three beachfront parcels are Bob, Sean and Yvette because they are the ones willing and has the ability to purchase the beachfront parcel of land available for sale in Asilomar.
Cho, Eric and Gianny may as well have the desire to own the beachfront land in Asilomar, but they do not have the ability to pay the selling price.
Therefore when the minimum price is 582,500, the forth parcel WILL not be sold because the willingness to pay is LESS and no one will purchase it from the seller for atleast the minimum price.
The Stationery Company purchased merchandise on account from a supplier for $9,100, terms 2/10, n/30. The Stationery Company returned merchandise with an invoice amount of $1,100 and received full credit. a. If The Stationery Company pays the invoice within the discount period, what is the amount of cash required for the payment? $
Answer:
$7,840
Explanation:
The terms 2/10, n/30 means that if the amount is paid in maximum 10 days, the client will receive a 2% discount. If he/she doesn't make the payment in this period, the total amount has to be paid within 30 days.
As Stationary Company returned merchandise with an invoice amount of $1,100, you have to subtract this amount from the initial value of the merchandise they purchased:
$9,100-$1,100= $8,000
Then, you have to calculate the 2% discount they will get from the $8,000 for paying the invoice within the discount period:
$8,000*2%= $160
$8,000-$160= $7,840
According to this, the answer is that the amount of cash required for the payment is $7,840.
Robert Necco and Nelson Packard are economists at Economic Research Associates. ERA asks Necco and Packard for their opinions about the effects of fiscal policy on real GDP for an economy currently experiencing a recession. Necco states that real GDP is likely to increase if both government spending and taxes are increased by the same amount. Packard states that if both government spending and taxes are increased by the same amount, there is no expected net effect on real GDP.
Regarding the statements made by Necco and Packard:
Necco Packard
A) Correct Correct
B) Correct Incorrect
C) Incorrect Incorrect
D) Incorrect Correct
Answer: B) Correct Incorrect
Explanation:
Whilst it was generally believed at some point that raising taxes and Government Spending by the same amount would have no effect, research has disproven this thought.
This is because it was shown that an increase in Government Spending leads to a larger increase in GDP than an increase in taxes reduces it.
This is because when the Government spends money, the Multiplier effect of Government Spending is always 1 more than that of the Taxes therefore raising taxes and spending by the same amounts still increases the Real GDP because Government Spending will create more income than taxes will take.
Necco is right, Packard is wrong.
Assume that Cane expects to produce and sell 93,000 Betas during the current year. One of Cane’s sales representatives has found a new customer that is willing to buy 4,000 additional Betas for a price of $42 per unit. If Cane accepts the customer’s offer, how much will its profits increase or decrease?
Note that the total cost per unit of Betas is $47.
Answer:
decrease by -$4,375,000
Explanation:
Since Cane expects to produce and sell 93,000 Betas during the current year, additional 4000 units would make the total cost be
93,000 + 4,000 = 97,000 units
97,000 x $87 = $8,439,000
To find the decrease or increase in profit, we multiply the total sales volume by the price willing to be paid by the new customer
97,000 x $42 = $4,074,000 (This value is a great loss of profit). By substracting the total cost by amount paid we see a decrease of $8,439,000-$4,074,000= $4,375,000.