Answer:
Period costs
Explanation:
Period costs are Costs that are incurred in generating revenues during the period, but are not involved in the manufacturing process. These cost are not related directly to the production process. These costs cannot be capitalized on the company's balance sheet. They are expensed in the period in which they were incurred and are included in the financial statement during their assigned accounting period.
If Push Company owned 51 percent of the outstanding common stock of Shove Company, which method would be appropriate for financial reporting purposes?
Answer:
Consolidation
Explanation:
Holding method is required for the parent company for financial reporting if the parent company owns 51 percent of more outstanding common stock in the subsidiary.
Here consolidate refers to the combining of total assets and liabilities of two or more entities into one so that it could be maintained as a one firm
Therefore for financial reporting consolidation is appropriate
Filling your individualf ederal tax returns would be best described what type of value chain?
Answer: Government to customer (G2C)
Explanation:
Filing is one of the requirements of any business person to give proper record of what they did in their business and how they delivered to the masses. This is proper for tax clearance and returns. When filing your individual tax returns the value chain is known as government to customer (G2C). This is recommended.
Rank the steps of the (sandwich) ELISA procedure from first step to last step. Do not overlap any steps.
Answer and Explanation:
The ELISA refers to the enzyme-linked immunosorbent assay (ELISA) It is used to determine the existence of an antigen in a sample with the help of antibiotics
The ELISA procedure in sequence form is shown below:
1. The capture antibody is added and then clean it
2. Now adding the blocking buffer and then clean it
3. Now add the samples with controls, Hatch it and clean it
4. Add horseradish peroxidase (HRP) conjugated with the antibody, Hatch it and clean it
5. Add Thymidine monophosphate (TMP)
6. And finally, the last step is to record the results
Fogerty Company makes two products, titanium Hubs and Sprockets. Data regarding the two products follow: Direct Labor-Hours per Unit Annual Production Hubs 0.60 15,000 units Sprockets 0.20 50,000 units Additional information about the company follows:
a. Hubs require $39 in direct materials per unit, and Sprockets require $18.
b. The direct labor wage rate is $12 per hour.
c. Hubs are more complex to manufacture than Sprockets and they require special equipment.
d. The ABC system has the following activity cost pools:
Estimated Activity Activity Cost Pool (Activity Measure) Overhead Cost Hubs Sprockets Total Machine setups (number of setups) $ 28,980 140 112 252 Special processing (machine-hours) $ 92,000 4,600 0 4,600 General factory (organization-sustaining) $ 89,000 NA NA NA
Required:
1. Compute the activity rate for each activity cost pool.
2. Determine the unit product cost of each product according to the ABC system. (Round intermediate calculations and final answers to 2 decimal places.)
Answer:
Fogerty Company
1. Computation of the activity rate for each activity cost pool:
a. Machine setups = Total machine setups overhead costs/total machine setups
= $28,980/252 = $115 per machine set up
b. Special processing = Total special processing overhead costs/total machine hours
= $92,000/4,600 = $20 per machine hour
c. General factory = $89,000/65,000 = $1.369 per unit produced
2. Determination of the unit product cost of each product using ABC system:
Hubs Sprockets
Total production costs $825,640 $1,101,340
Units produced 15,000 50,000
Unit product cost = $55.04 $22.03
Explanation:
a) Data and Calculations:
Activity Cost Pool Overhead Hubs Sprockets Total
(Activity Measure) Costs
Machine setups
(number of setups) $ 28,980 140 112 252
Special processing
(machine-hours) $ 92,000 4,600 0 4,600
General factory
(organization-sustaining) $ 89,000 NA NA NA
Direct labor-hours per unit 0.60 0.20
Total units produced 15,000 50,000 65,000
Direct materials required per unit $39 $18
Direct labor wage rate per hour $12 $12
b) Total direct labor-hours 9,000 10,000 19,000
c) Activity rate for each activity cost pool:
1. Machine setups = Total machine setups overhead costs/total machine setups
= $28,980/252 = $115 per machine set up
2. Special processing = Total special processing overhead costs/total machine hours
= $92,000/4,600 = $20 per machine hour
3. General factory = Total general factory overhead costs divided by total units produced
= $89,000/65,000 = $1.3692 per unit produced
d) Overhead Allocation:
Hubs Sprockets Total
Machine setups $16,100 $12,880 $28,980
Special processing 96,000 0 96,000
General factory 20,540 68,460 89,000
Total overhead costs $132,640 $81,340 $213,980
e) Total costs per product
Hubs Sprockets Total
Direct materials costs $585,000 $900,000 $1,485,000
Direct labor costs $108,000 $120,000 $228,000
Total overhead costs $132,640 $81,340 $213,980
Total production costs $825,640 $1,101,340 $1,926,980
Units produced 15,000 50,000
Unit product cost = $55.04 $22.03
f) Activity based costing system (ABC) is a costing technique that accumulates according to activity pools and allocates costs based on the activities carried out. For example, the general factory overhead costs, could be allocated based on direct labour hours, machine hours, or total units of production. It calculates the allocation rate based on the accepted activity pool.
During the period, labor costs incurred on account amounted to $175,000, including $150,000 for production orders and $25,000 for general factory use. In addition, factory overhead charged to production was $32,000. The entry to record the direct labor costs is a. Work in Process150,000 Wages Payable150,000 b. Wages Payable150,000 Work in Process150,000 c. Wages Payable175,000 Work in Process175,000 d. Work in Process175,000 Wages Payable175,000
Answer:
d. Work in Process 175,000 Wages Payable 175,000
Explanation:
Production Orders and General factory expenses are all manufacturing costs and are included in Work In Process Cost for Inventory Valuation. Since the wages have not been paid yet, a Liability account - Wages Payable has to be credited in total of amount due.
On January 1, 2019, Brooks, Inc., borrows $90,000 from a bank to purchase machinery. Brooks signs a 5 percent installment note requiring four annual payments of principal plus interest.
Required:
Complete the necessary journal entry
Answer:
A Journal entry for Brooks Incorporation on January 1, 2019 which is shown below
Explanation:
Solution
Given that:
JOURNAL ENTRY FOR BROOKS INCORPORATION
Date General Journal Debit Credit
Jan 01 2019 Cash 90000
Notes Payable 90000
Thus
A Journal entry was recorded for Brooks Incorporation.
Here, the cash of $90,000 was recorded at the debit side of the Journal.
While the notes payable of $90,000 was also recorded on the credit side
Laurel, Inc., and Hardy Corp. both have 7 percent coupon bonds outstanding, with semiannual interest payments, and both are priced at par value. The Laurel, Inc., bond has four years to maturity, whereas the Hardy Corp. bond has 15 years to maturity. If interest rates suddenly rise by 2 percent, what is the percentage change in the price of these bonds
Answer:
Laurel bond % change = -6.6%
Hardy bond % change = -16.3%
Explanation:
current bond price $1,000
interest rate 7%
Laurel bond matures in 4 years, 8 semiannual payments
Hardy bonds matures in 15 years, 30 semiannual payments
if market interest increases to 9%
Laurel bond:
$1,000 / (1 + 4.5%)⁸ = $703.19
$35 x 6.59589 (annuity factor, 4.5%, 8 periods) = $230.86
market price = $934.05
% change = -6.6%
Hardy bond:
$1,000 / (1 + 4.5%)³⁰ = $267.00
$35 x 16.28889(annuity factor, 4.5%, 30 periods) = $570.11
market price = $837.11
% change = -16.3%
Brand managers know that increasing promotional budgets eventually result in diminishing returns. The first one million dollars typically results in a 26% increase in awareness, while the second million results in adding another 18% and the third million in a 5% increase. Andrews’s product Adam currently has an awareness level of 80% . While an important product for Andrews, Adam’s promotion budget will be reduced to one million dollars for the upcoming year. Assuming that Adam loses one-third of its awareness each year, what will Adam’s awareness level be next year?
Answer:
52.88%
Explanation:
The computation of the awareness level for next year is shown below
But before that we need to find out the ending awareness i.e Y which is
= 80% × (1 - 1 ÷ 3)
= 53.33%
Now awareness after the promotion is
= 53.33% + 26%
= 79.33%
Now the ending awareness i.e (Y +1) is
= 79.33% × 2 ÷ 3
= 52.88%
Hence, the awareness level next year is 52.88%
Matt is passionate about Hollister. It is the only place he'll buy his clothes. He hasn't shopped anywhere else in the last few years and will often write positive reviews on his blog about Hollister's merchandise. From a strictly marketing perspective, Matt's positive reviews reflect
Answer:
Bias
Explanation:
Bias is a preference towards something do to ignorance. he is being biased becuase he never goes to other stores to see if they are better
Intricate Wiring Corp., based in Ohio, creates a brand new high-tech product. The demand for the product in the United States is high but very low or non-existent elsewhere. The company decides not to locate manufacturing facilities elsewhere and will simply meet the small foreign demand via exports. The theory that best explains the company's policy is
Answer:a. product life cycle theory.
Explanation:
The Product Life Cycle Theory was created to explain the International trade pattern of a new product. The theory attempts to show that when a product is first invented, its demand and production inputs such as capital and labor, come from the area it was invented in. As the product starts getting more recognised and it's demand increases elsewhere, it will start to export and then continue until it starts manufacturing in other areas to feed the demand of those areas as well.
Intricate Wiring Corp's new high-tech product is following this theory because it has just started out and so its demand is based in its country of origin being the United States. For as long as this is the case, the company should focus on producing in the United States until demand picks up substantially enough to produce elsewhere.
Travelwell manufactures and sells luggage and briefcases. Their marketing research indicates that durability is the attribute that consumers most desire in their luggage and briefcases. Travelwell now emphasizes durability in all of their promotional efforts. This strategy is intended to build brand equity.
a) true
b) false
Answer:
a) true
Explanation:
When we are talking about building brand equity, we are talking about increasing our customers' perception and value of our brand or company's name. Building brand equity emphasizes the brand itself over any specific product or service that our company offers. E.g. Rolls Royce is the most luxurious car manufacturer in the world, and they built brand equity upon luxury in all its vehicles, not one specific car.
In this case, Travelwell is emphasizing a characteristic that should apply to all its product line, not just one specific type of luggage.
If a monopolist raises its price:________
a) the quantity demanded decreases.
b) it raises the barriers to entry.
c) the quantity demanded increases.
d) the quantity demanded remains the same.
Answer:
a) the quantity demanded decreases
Explanation:
As we know that'
A monopolist creates a monopoly in the market as the firm is a sole producer for the entire market due to which it charges high prices plus it is a price taker that means it offers cheap quality products at a lesser price
But if monopolist increased its price so the quantity demanded declines as the purchasing power reduced
Therefore option a is correct
Laurel inc and Hardy corp both have 10 percent coupon bonds outstanding, with semiannual interest payments, and both are currently priced at the par value of $1,000. The Laurel, Inc., bond has five years to maturity, whereas the Hardy Corp. bond has 16 years to maturity. If interest rates suddenly rise by 2 percent, what is the percentage change in the price of these bonds? If the interest rates fall by 2 percent?
Answer:
current bond price $1,000
interest rate 10%
Laurel bond matures in 5 years, 10 semiannual payments
Hardy bonds matures in 16 years, 32 semiannual payments
if market interest increases to 12%
Laurel bond:
$1,000 / (1 + 6%)¹⁰ = $558.39
$50 x 7.36009 (annuity factor, 6%, 10 periods) = $368.00
market price = $926.39
% change = -7.36%
Hardy bond:
$1,000 / (1 + 6%)³² = $154.96
$50 x 14.08404 (annuity factor, 6%, 32 periods) = $704.20
market price = $859.16
% change = -14.08%
current bond price $1,000
interest rate 10%
Laurel bond matures in 5 years, 10 semiannual payments
Hardy bonds matures in 16 years, 32 semiannual payments
if market interest decreases to 8%
Laurel bond:
$1,000 / (1 + 4%)¹⁰ = $675.56
$50 x 8.1109 (annuity factor, 4%, 10 periods) = $405.55
market price = $1,081.11
% change = 8.11%
Hardy bond:
$1,000 / (1 + 4%)³² = $285.06
$50 x 14.08404 (annuity factor, 4%, 32 periods) = $704.20
market price = $1,178.74
% change = 17.87%
Prepare a cost of goods manufactured schedule and a partial income statement based off the following information.
Cepeda Corporation has the following cost records for June 2017.
Indirect factory labor $4500 Factory utilities $400
Direct materials used $20,000 Depreciation, factory equipment $1,400
Work in process, 6/1/17 3,000 Direct labor $40,000
Work in process, 6/30/17 3,800 Maintenance, factory equipment $1,800
Finished goods, 6/1/17 5, 000 Indirect materials $2,200
Finished goods, 6/30/17 7,500 Factory manager’s salary $3,000
Instructions:
A) Prepare a cost of goods manufactured schedule for June 2017
B) Prepare an income statement through gross profit for June 2017 assuming sales revenue is $92,100.
Answer:
A. Cost of goods manufactured schedule for June 2017
Indirect factory labor $4,500
Factory utilities $400
Direct materials used $20,000
Depreciation, factory equipment $1,400
Maintenance, factory equipment $1,800
Factory manager’s salary $3,000
Indirect materials $2,200
Add Opening Work in Process Inventory $3,000
Less Closing Work in Process Inventory ($3,800)
Cost of goods manufactured $32,500
B. Income statement for June 2017
Sales Revenue $92,100
Less Cost of Sales
Opening Finished Goods Inventory $5,000
Add Cost of goods manufactured $32,500
Less Closing Finished Goods Inventory ($7,500) ($30,000)
Gross Profit $62,100
Explanation:
The cost of goods manufactured schedule include all manufacturing costs for the production period.
Income statement calculates the gross profit as Sales less Cost of Goods Sold.
The company had a net income of $248,462, and depreciation expenses were equal to $72,487. What is the firm's cash flow from financing activities?
Complete Question:
The complete question can be seen the in the attachment at the end of the solution of the question.
Answer:
Option B. -$182,057
Explanation:
The Cash flow from financing activities can be calculated by using the following formula:
Cash flow from financing activities = Changes in the equity finance
+ Changes in long term borrowings + Changes in short term borrowings
- Interest paid - Dividends paid
Here
Changes in the equity = $175,000 common stock in year 2008
- $125,000 common stock in year 2008 = $50,000
Changes in long term Borrowings = $61,290 - $78,445 = - $17,155
Changes in short term Borrowings = $16,753 - $12,004 = $4749
Interest paid is $0 because interest rate is not given hence we can't calculate it.
Dividends paid = $190,568 Opening Retained Earnings + $248,462 Net Profit for the year - $219,379 Closing Retained Earnings = $219,651
Now, by putting values in the above equations, we have:
Cash flow from financing activities = $50,000 - $17,155 + $4749 - 0 - $219,651 = -$182,057
_____ uses an iterative process that repeats the design, development, and testing steps as needed, based on feedback from users.
Answer: Rapid Application Development (RAD)
Explanation:
Rapid Application Development (RAD) is a method of developing software that tries more to develop a working model first and then adjusts as it receives feedback from users. It essentially is evolving every time because instead of planning for what is needed ahead of time, it simply makes a product and changes it as needed to fit the actual needs of the customers.
Answer: Rapid Application Development
Explanation: got it right on edgen
Zapper has beginning equity of $279,000, net income of $62,000, dividends paid of $51,000 and stockholder investments of $17,000. Its ending equity is:
Answer:
$307,000
Explanation:
Equity is the remaining value of the owner;s interest in a company after all liabilities have been settled.
It can also be defined as the capital contributed by the owners and the attributable profit or losses after a trading period that is retained in the entity.
The net income and the stockholder investment , being an inflow ,will be added to the beginning equity while the dividends paid being an outflow is deducted.
Workings
Ending equity = Beginning equity + net income +Stockholder investment - Dividends paid
=279,000+62,000+17,000-51,000
307,000
2. Think about the pros and cons associated with the concept of market pricing. What have your personal experiences been in relation to fairness and equity of your own compensation where you have worked
Explanation:
The market pricing system is an approach that differs from the formal salary structure because it is not an organizational process where the levels of remuneration are assigned according to a certain function.
In this wage definition strategy, the remuneration is calculated according to a present value, determined by the market itself and defined by conducting surveys whose objective is to analyze the service pricing strategies practiced by competitors.
This strategy can guarantee several significant advantages for an organization, such as increasing competitiveness by establishing a remuneration structure based on market value.
However, if this strategy is not duly reviewed periodically, what can happen is that there are flaws in the calculation of the current value, which generates an outdated salary system for employees and the company.
The capital expansion will cost 320,000. they are planning on receiving a revenue of 3.00 per unit and a varible cost of 1.20 per unit. How many units are needed to break even?
Answer:
177,777.78
Explanation:
Breakeven point is the number of units produced and sold at which net income is equal to zero
Break even point = fixed cost / price - variable cost
320,000 / 3 - 1.2 = 177,777.78
____________ has been at the center of the changes taking place that affect the supply chain. Group of answer choices logistics warehousing technology customer power
Answer:
technology
Explanation:
Technology has changed the mode of supply of products to customers.
It has increased the efficiency of supply chain and has also increased the speed of supply
For example, due to technology one can now track ones orders. This is an example of how technology has increased the efficiency of supply chain.. It has made it easier for customers to monitor their orders and has also reduced loss of goods.
I hope my answer helps you
Paper Clip Company sells office supplies. The following information summarizes the company's operating activities for the year: Utilities for the store $ 9 comma 600 Sales commissions 10 comma 100 Sales revenue 164 comma 800 Purchases of merchandise 89 comma 900 January 1 inventory 27 comma 000 Rent for store 13 comma 800 December 31 inventory 23 comma 500 What is operating income?
Answer:
$41,400
Explanation:
Calculation for Paper Clip Company Operating income
OPERATING NET INCOME for Paper Clip Company
Sales revenue 164,800
Less: Purchases of merchandise (89,900)
Utilities for the store (9,600)
Sales commission (10,100)
Rent for store (13,800)
Operating net income $41,400
Therefore the Operating net income will be $41,400
The Cash account of Gate City Security Systems reported a balance of $2,530 at December 31, 2018. There were outstanding checks totaling $ 500 and a December 31 deposit in transit of $ 400. The bank statement, which came from Park Cities Bank, listed the December 31 balance of $3,120. Included in the bank balance was a collection of $ 500 on account from Jane Lindsey, a Gate City customer who pays the bank directly. The bank statement also shows a $20 service charge and $ 10 of interest revenue that Gate City earned on its bank balance.
Requried:
Prepare Gate City's bank reconciliation at December 31.
Answer:
Gate City Security Systems
Bank Reconciliation at December 31, 2018
Book:
Balance , December 31, 2018 $2,530
Add:
Collection from Jane Lindsey $500
Interest revenue $10
Less:
Service charges $20
Adjusted book balance December 31, 2018 $3,020
Bank:
Balance , December 31,2018 $3,120
Add:
Deposit in transit $400
Less:
Outstanding cheque $500
Adjusted bank balance December 31, 2018 $3,020
The open-ended question post-project evaluation meeting should contain an opportunity to talk about possible additional projects and assume permission to use the customer as a reference with potential customers.
a. True
b. False
Answer:
B. False.
Explanation:
In the rightful manner, this meeting type is said to typically happen in different formats though most of it happens to appear in different video calls, conference or zoom which is popular in recent times. This meeting should contain or entertain the ability for opportunity talks which could yield possibilities in adding works that can benefit the parties involved. But in the case above, assuming the permission to use the customer as a reference with potential customers is totally out of the line so it is said to not totally fall in as post project evaluation.
Martin transfers real estate with an adjusted basis of $260,000 and fair market value of $350,000 to a newly formed corporation in exchange for 100% of the stock. The corporation assumes the liability on the transferred real estate in the amount of $300,000. Determine Martin’s recognized gain on the transfer and the basis for his stock.
Answer:
$40,000
Explanation:
We can calculate recognized gain on the transfer and basis for his stock just by deducting adjusted basis value from liability on the transfered real estate.
Calcuation
iability on the transfered real estate $300,000
less: adjusted basis value ($260,000)
Gain recognized $40,000
Answer:
Therefore, the gain on the transfer is $40,000
Explanation:
Calculation of Martins gain
Particulars Amount
Liability on the transferred real estate $300,000
Less: adjusted real basis value $260,000
Recognized gain $40,000
Therefore, the gain on the transfer is $40,000
Andrews Company manufactures a line of office chairs. Each chair takes $14 of direct materials and uses 1.9 direct labor hours at $16 per direct labor hour. The variable overhead rate is $1.10 per direct labor hour and the fixed overhead rate is $1.50 per direct labor hour. Andrews expects to have 620 chairs in ending inventory. There is no beginning inventory of office chairs.
Required:
1. Calculate the unit product cost. (Note: Round to the nearest cent.)$
2. Calculate the cost of budgeted ending inventory. (Note: Round to the nearest dollar.)$
Answer:
Instructions are below.
Explanation:
Giving the following information:
Direct material= $14
Direct labor= 1.9 direct labor hours at $16 per direct labor hour.
Variable overhead= $1.10 per direct labor hour
Fixed overhead rate= $1.50 per direct labor hour.
Ending inventory (units)= 620
We can calculate the unitary product cost using the absorption or variable costing method. The first one includes the unitary fixed overhead to the unitary product cost.
Absorption costing:
Unitary cost= 14 + 1.9*16 + (1.1+1.5)*1.9= $49.34
Ending inventory= 49.34*620= $30,590.8
Variable costing:
Unitary cost= 14 + 1.9*16 + 1.1*1.9= $46.49
Ending inventory= 46.49*620= $28,823.8
You short-sell 200 shares of Rock Creek Fly Fishing Co. today at $50 per share. If you want to limit your loss to $2,500, $ Blank 1. Fill in the blank, read surrounding text. is the maximum price per share you should place when you close your position
Answer:
So, the maximum price per share that should place is $62.5
Explanation:
As per given data
Current Price of stock = $50
Numbers of share = 200 shares
Limit of loss = $2,500
We will use the following formula to calculate the Maximum price of stock
Total Maximum loss possible = [ ( Prefix Price of share - Current price of share ) x Numbers of shares of stock ]
$2,500 = [ ( Prefix Price of share - $50 ) x 200 ]
$2500 / 200 = Prefix Price of share - $50
$12.5 + $50 = Prefix Price of share
$62.5 = Prefix Price of share
Therefore, thee order will be stopped at $62.50
The December 31, 2014 balance sheet of Barone Company had Accounts Receivable of $400,000 and a credit balance in Allowance for Doubtful Accounts of $32,000. During 2015, the following transactions occurred: sales on account $1,500,000; sales returns and allowances, $50,000; collections from customers, $1,250,000; accounts written off $36,000; previously written off accounts of $6,000 were collected.A. Journalize the 2015 transactions.B. If the company uses the percentage-of-sales basis to estimate bad debt expense and anticipates 3% of net sales to be uncollectible, what is the adjusting entry at December 31, 2015?C. If the company uses the percentage of receivables basis to estimate bad debt expense and determines that uncollectible accounts are expected to be 8% of accounts receivable, what is the adjusting entry at December 31, 2015?D. Which basis would produce a higher net income for 2015 and by how much?
Answer:
Barone Company
General Journal for 2015 transactions:
Debit Accounts Receivable $1,500,000
Credit Sales Revenue $1,500,000
To record sales on account.
Debit Sales Returns $50,000
Credit Accounts Receivable $50,000
To record sales returns and allowances.
Debit Cash Account $1,250,000
Credit Accounts Receivable $1,250,000
To record cash collections from customers.
Debit Allowance for Doubtful Accounts $36,000
Credit Accounts Receivable $36,000
To record uncollectible written-off.
Debit Accounts Receivable $6,000
Credit Allowance for Doubtful Accounts $6,000
To reinstate previously written off accounts.
Debit Cash Account $6,000
Credit Accounts Receivable $6,000
To record collection of previous write-off.
Adjusting Entry at December 31, 2015:
B. Using 3% of net sales:
Debit Bad Debt Expense $41,500
Credit Allowance for Doubtful Accounts $41,500
To record bad debt expense.
C. Using 8% of Receivables:
Debit Bad Debt Expense $43,120
Credit Allowance for Doubtful Accounts $43,1`20
To record bad debt expense.
D. 3% of net sales produces a higher net income and by $1,620
Explanation:
1. Accounts Receivable
Beginning balance (debit) = $400,000
Sales 1,500,000
Sales Returns & allowances (50,000)
Cash Collections (1,250,000)
Uncollectible write-off (36,000)
Reinstatement of write-off 6,000
Cash Collection (6,000)
Ending balance $564,000
2. Allowance for Doubtful Accounts
Beginning balance (Credit) $32,000
Uncollectible write-off (36,000)
Reinstatement of write-off 6,000
Balance pre-year adjustment $2,000
Using 3% of net sales
Bad debt expense $41,500
Ending balance (credit) $43,500
Balance pre-year adjustment $2,000
Using 8% of receivable balance
Bad debt expense $43,120
Ending balance (credit) $45,120
3. Allowance for Doubtful Accounts (Ending balance)
3% of net sales = $1,450,000 x 3% = $43,500
8% of receivables = $564,000 x8% = $45,120
If the December 31, 2014 balance sheet of Barone Company had Accounts Receivable of $400,000 and a credit balance in Allowance for Doubtful Accounts of $32,000. The journal entries will be:
A. Journalize the 2015 transactions.
Debit Accounts Receivable $1,500,000
Credit Sales Revenue $1,500,000
(To record credit sales)
Debit Sales Returns and Allowances $50,000
Credit Accounts Receivable $50,000
(To record credit to customers)
Debit Cash $1,250,000
Credit Accounts Receivable $1,250,000
(To records collection of receivables)
Debit Allowance for Doubtful Accounts $36,000
Credit Accounts Receivable $36,000
(To record write of specific account)
Debit Accounts Receivable $6,000
Credit Allowance for Doubtful Accounts $6,000
(To record written off accounts)
Debit Cash Account $6,000
Credit Accounts Receivable $6,000
(To record collection of previous write-off)
B. Preparation of the journal entry using the percentage-of-sales basis
Percentage-of-sales basis:
Sales revenue $1,500,000
Less: Sales Returns and Allowances $50,000
Net Sales $1,450,000
($1,500,000-$50,000)
Bad debt percentage 3%
Bad debt provision $43,500
(3%×$1,450,000)
Journal entry
Dec. 31
Debit Bad Debt Expense $43,500
Credit Allowance for Doubtful Account $43,500
C. Preparation of the journal entry using the percentage of receivables basis
Percentage of receivables basis
Account receivable
Dr Cr
$400,000 $50,000
$1,500,000 $1,250,000
$6,000 $36,000
$6.000
Bal. $564,000
Allowance for Doubtful Accounts
Dr Cr
$36,000 $32,000
$6,000
Bal. $2,000
Required balance $45,120
($564,000 × .08)
Less Balance before adjustment $2,000
Adjustment required $43,120
($45,120-$2,000)
Journal entry
Dec. 31
Debit Bad Debt Expense $43,120
Credit Allowance for Doubtful Account $43,120
D. Calculation to determine the basis that would produce a higher net income for 2015 and by how much?
Percentage-of-sales basis $43,500
(3%×$1,450,000)
Percentage of receivables basis $43,120
[($564,000 × .08) -$2,000]
Difference $380
Percentage-of-sales basis will produce a higher net income for 2015 by $380
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Creighton Construction ordered $200,000 worth of steel beams for a new project. The invoice listed trade discounts of 30/20/15. The Net Price = $95,200
A. True
B. False
Answer:
A. True
Explanation:
The trade discounts of 30/20/15 indicate that the discounts are deducted one after the other from the list price.
First, you calculate the price after the 30% discount from $200,000:
200,000*(1-0.3)=200,000*0.7= $140,000
Now, you have to calculate the new value after the 20% discount from $140,000:
140,000*(1-0.2)=140,000*0.8= $112,000
Then, you have to calculate the new value after the 15% discount from $1112,000:
112,000*(1-0.15)=112,000*0.85=$95,200
According to this, the Net Price is $95,200 and the statement is true.
What is the nominal interest rate (k) of a 5-year U.S. Treasury bond with a real risk-free rate of interest of 1% and inflation expected to be at 3.5% per year
Answer:
The nominal interest rate is 4.50%
Explanation:
Nominal interest=real interest rate+inflation rate
The real interest rate is the return earned by an investor without considering the inflation rate in the economy which is 1%
inflation rate is the movement in prices of goods and services in the economy i.e 3.5%
nominal interest rate=1%+3.5%
nominal interest rate=4.5%
A corporation produces a single product and has the following cost structure
Number of units produced each year 7000
Variable costs per unit
Direct materials 51
Direct labor 12
Variable manufacturing overhead 2
Variable selling and administrative expense 5
Fixed costs per year
Fixed manufacturing overhead.. 441000
Fixed selling expense 112000
The absorption costing unit product cost is:______.
A) $149 per unit
B) $65 per unit
C) $63 per unit
D) $128 per unit
Answer:
D) $128 per unit
Explanation:
The computation of the unit product cost using the absorption costing is shown below:
= Direct materials per unit + direct labor per unit + Variable manufacturing overhead per unit + fixed manufacturing overhead per unit
= $51 + $12 + $2 + ($441,000 ÷ 7,000 units)
= $128
We simply added the direct material, direct labor, variable manufacturing overhead per unit, and the fixed manufacturing overhead per unit