Answer:
$27,220
Explanation:
Cost of the truck includes : Cash price + sales tax + motor vehicle license + painting and lettering
accident insurance would not be added because its a revenue expenditure as it will reoccur after a year.
$23,030 + $670 + $2,140 + $1,380 = $27,220
I hope my answer helps you
Answer:
$27,220
Explanation:
From the question above Crane company incurs the following expenditures in purchasing a truck
Cash price = $23,030
Accident insurance during use= $1,690
Sales tax= $1,380
Motor vehicle license= $670
Painting and lettering= $2,140
Therefore, the cost of the truck can be calculated as follows
= $23,030+$1,380+$670+$2,140
= $27,220
The accident insurance is not added to find the cost of the truck because it doesn't add any value and can happen again the following year.
Hence the cost of the truck is $27,220
The government establishes an effective price ceiling for a gallon of milk. What will be the result of this ceiling? a) It will create a surplus b) It will create a shortage c) It will have no effect d) It will cause an increase in demand e) it will cause an increase in supply
Answer:
D
Explanation:
Because price ceiling is put by the government so that certain commodities could still be available at a reasonable price for many
Answer: D
Explanation:
E-Eyes just issued some new preferred stock. The issue will pay an annual dividend of $14 in perpetuity, beginning 19 years from now. If the market requires a return of 4.4 percent on this investment, how much does a share of preferred stock cost today
Answer:
Price of stock = $181.78
Explanation:
PV of dividend in year 13
PV =A×(1- (1+r)^(-n)/r )
PV of dividend in (year 13) = 14/(0.044=318.18
PV of dividend in year 0
PV = Div× (1+r)^(-n)
Dividend in year 13, r-interest rate, n- number of years
PV in year 0 = 318.1818182 × 1.044^(-13)= 181.78
Price of stock = $181.78
Prepare a multiple-step income statement through the calculation of gross profit.
For each transaction, indicate the impact each item had on income and the dollar amount of the change in income, if any. Input decreases to net income as negative values. Upon completion, compare the gross profit with the amount reported on the partial income statement.
Jul. 1 Purchased merchandise from Boden Company for $6,000 under credit terms of 1/15, n/30,
FOB shipping point, invoice dated July 1.
Jul. 2 Sold merchandise to Creek Co. for $900 under credit terms of 2/10, n/60, FOB shipping point,
invoice dated July 2. The merchandise had cost $500.
Jul. 3 Paid $125 cash for freight charges on the purchase of July 1.
Jul. 8 Sold merchandise that had cost $1,300 for $1,700 cash.
Jul. 9 Purchased merchandise from Leight Co. for $2,200 under credit terms of 2/15, n/60, FOB
destination, invoice dated July 9.
Jul. 11 Received a $200 credit memorandum from Leight Co. for the return of part of the merchandise
purchased on July 9.
Jul. 12 Received the balance due from Creek Co. for the invoice dated July 2, net of the discount.
Jul. 16 Paid the balance due to Boden Company within the discount period.
Jul. 19 Sold merchandise that cost $800 to Art Co. for $1,200 under credit terms of 2/15, n/60, FOB
shipping point, invoice dated July 19.
Jul. 21 Issued a $200 credit memorandum to Art Co. for an allowance on goods sold on July 19.
Jul. 24 Paid Leight Co. the balance due after deducting the discount.
Jul. 30 Received the balance due from Art Co. for the invoice dated July 19, net of discount.
Jul. 31 Sold merchandise that cost $4,800 to Creek Co. for $7,000 under credit terms of 2/10, n/60,
FOB shipping point, invoice dated July 31.
Answer:
inventory 6,000 debit
account payable 6,000 credit
--to record July 1st--
Acc Rec 900 debit
Sales Revenues 900 credit (+900 income)
--to record sale--
COGS 500 debit (-500 expense)
Inventory 500 credit
--to record cost of sale--
Delivery expense 125 debit (-125 expense)
Cash 125 credit
--to record freight-out --
Cash 1,700 debit
Sales Revenues 1,700 credit (+1,700 income)
--to record sale--
COGS 1,300 debit (-1,300 expense)
Inventory 1,300 credit
--to record cost of sale--
Inventory 2,200 debit
Account Payable 2,200 credit
--to record purchase--
Account Payable 200 debit
Inventory 200 credit
--to record return of goods--
Cash 882 debit
Sales DIscount 18 debit
Accounts Receivables 900 credit
--to record payment from customer--
Account Payable 6,000 debit
Cash 5,940 credit
Inventory 60 credit
--to record payment to supplier--
Cash 1,200 debit
Sales Revenues 1,200 credit (+1,200 income)
--to record sale--
COGS 800 debit (-800 expense)
Inventory 800 credit
--to record cost of sale--
Sales Returns 200 debit
Account Receivables 200 credit
-- to record return from customer--
Account Payable 2,000 debit
Cash 1,960 credit
Inventory 40 credit
--to record payment to supplier--
Cash 980 debit
Sales DIscount 20 debit
Accounts Receivables 1,000 credit
--to record payment from customer--
Cash 7,000 debit
Sales Revenues 7,000 credit (+7,000 income)
--to record sale--
COGS 4,800 debit (-4,800 expense)
Inventory 4,800 credit
--to record cost of sale--
Explanation:
Cheek
900 x 2% = 18
net of discount 900 - 18 = 882
Boden:
6,000 x 1% = 60
Net of discount 6,000 - 60 = 5,940
Leight:
2,200 - 2,000 = 2,000 balance due
2,000 x 2% = 40
net of discount 1,960
Art Co:
1,200 - 200 = 1,000 balance due
1,000 x 2% = 20 discount
net = 1,000 - 20 = 980
Sub Sandwiches of America made the following expenditures related to its restaurant.
1. Replaced the heating equipment at a cost of $250,000.
2. Covered the patio area with a clear plastic dome and enclosed it with glass for use during the winter months. The total cost of the project was $750,000.
3. Performed annual building maintenance at a cost of $24,000.
4. Paid for annual insurance for the facility at $8,800.
5. Built a new sign above the restaurant, putting the company name in bright neon lights, for 9,900.
6. Paved a gravel parking lot at a cost of $65,000.
Required:
Sub Sandwiches of America credits cash for each of these expenditures. Select the account it debits for each.
Answer:
1. Heating Equipment
2. Premises
3. Maintenance Expense
4. Prepaid Insurance
5. Intangible Asset ; Logo
6. Premises
Explanation:
1. Replacement of heating equipment is substantial hence it is capitalized to the Heating Equipment Account.
2. The project is capitalized to the Premises Account as it form part of premises.
3. Annual Building maintenance is a revenue expenditure not capitalized.
4. An Asset Insurance Prepaid for future economic benefits to be realized is recognized.
5. The new sign would result in inflow of economic benefit and is non-tangible hence Intangible Asset is recognized.
6. Work done is capitalized in the Premises Account
You work for a marketing agency advising a client considering whether to drop prices during an economic downturn. The client, a manufacturer of children's outdoor swing sets, believes that reducing prices would lead to more sales. The client is aware that lower prices would yield less revenue per sale. However, the client is unaware of any other possible negative consequences of dropping prices.
1. Advise the client of some of those possible consequences. Include a description of the psychological issues at play in dropping a brand's price.
2. Identify and evaluate price-adjustment strategies beyond a straightforward reduction in retail price that the client should consider.
Explanation:
1- One of the pieces of advice I could give the customer about lowering the balance sheet price is that this could generate different interpretations for the potential consumer, as there may be a perception that the price reduction of the product occurred due to the loss of product quality in relation to competing products.
2- There are other effective strategies for managing an economic crisis in addition to a direct reduction in the retail price, such as the psychological price strategy, which are the marketing techniques used by salespeople so that consumers respond emotionally to the product, and not a logical way, which generates a perception of greater benefit for the consumer, which can lead to increased sales without having to lower the price of the product.
The duration of copyright protection for works not made for hire is: Select one: a. 20 years from the date of filing. b. Generally perpetually as long as the works are in print. c. One year if no registration has been f
Answer:
Life of the author plus 70 years
Explanation:
Copyright can be defined as the legal ways of protecting an author's work. It is a type of intellectual property right that protect authors from unauthorized individuals from publishing their work.
It is the right to copy given by an author to anyone to copy their work. Content that can be protected by copyright includes; books, poems, plays, songs, films, and artwork and website.
Fifteen years ago, Mr. Fairhold paid $50,000 for a single-premium annuity contract. This year, he began receiving a $1,300 monthly payment that will continue for his life. On the basis of his age, he can expect to receive $312,000. How much of each monthly payment is taxable income to Mr. Fairhold
Answer: $1091.61
Explanation:
From the question, we are told that fifteen years ago, Mr. Fairhold paid $50,000 for a single-premium annuity contract and that this year, he began receiving a $1,300 monthly payment that will continue for his life and based on his age, he can expect to receive $312,000. The amount of each monthly payment is taxable income to Mr. Fairhold goes thus:
Based on the question, Mr Fairhold will have a tax free return of the $50,000 paid. The exclusion ratio will be the investment divided by the expected return. This will be:
= $50,000/$312,000
= 0.1603
Since he received monthly payment of $1,300 and exclusion ratio is 0.1603, the tax free return on investment will be:
= $1,300 × 0.1603
= $208.39
Taxable annuity payment will now be:
= $1300 - $208.39
= $1091.61
The Hudson Corporation makes an investment of $24,000 that provides the following cash flow: Use Appendix B and Appendix D for an approximate answer but calculate your final answer using the formula and financial calculator methods.Year Cash Flow
1 $ 13,000
2 13,000
3 4,000a. What is the net present value at an 8 percent discount rate? (Do not round intermediate calculations and round your answer to 2 decimal places.)b. What is the internal rate of return? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.)
Answer:
NPV = $2,357.77
IRR = 14.31%
Explanation:
Net present value is the present value of after tax cash flows from an investment less the amount invested.
Internal rate of return is the discount rate that equates the after tax cash flows from an investment to the amount invested.
NPV and IRR can be calculated using a financial calculator.
Cash flow in year 0 = $-24,000
Cash flow each year in year 1 and 2 = $13,000
Cash flow in year 3 = 4,000
I = 8%
NPV = $2,357.77
IRR = 14.31%
To find the NPV using a financial calacutor:
1. Input the cash flow values by pressing the CF button. After inputting the value, press enter and the arrow facing a downward direction.
2. After inputting all the cash flows, press the NPV button, input the value for I, press enter and the arrow facing a downward direction.
3. Press compute
To find the IRR using a financial calacutor:
1. Input the cash flow values by pressing the CF button. After inputting the value, press enter and the arrow facing a downward direction.
2. After inputting all the cash flows, press the IRR button and then press the compute button.
I hope my answer helps you
Bill Phillips is developing a Monte Carlo simulation to value a complex and thinly traded security. Phillips wants to model one input variable to have negative skewness and a second input variable to have positive excess kurtosis. In a Monte Carlo simulation, Phillips can appropriately use:_________
Answer: Both of them
Explanation:
The Monte Carlo Simulation is a forecasting technique that allows one to find out the probability of occurence of different outcomes which may be difficult to come up with because there are multiple random variables involved.
Monte Carlo simulations are used in many diverse fields such as Finance, Engineering and Science.
As earlier mentioned, this simulation allows for multiple random variables so Phillips can use it to model both the variables to have different characteristics.
A company is considering constructing a plant to manufacture a proposed new product. The land costs $300,000, the building costs $600,000, the equipment costs $250,000, and $100,000 additional working capital is required. It is expected that the product will result in sales of $750,000 per year for 10 years, at which time the land can be sold for $400,000, the building for $350,000, and the equipment for $50,000. All of the working capital would be recovered at the EOY 10. The annual expenses for labor, materials, and all other items are estimated to total $475,000. If the company requires a MARR of 15% per year on projects of comparable risk, determine if it should invest in the new product line. Use the AW method. (Sullivan, 20180327, p. 234) Sullivan, W. G., Wicks, E. M., Koelling, C. P. (20180327). Engineering Economy, 17th Edition. [[VitalSource Bookshelf version]]. Retrieved from vbk://9780134838229 Always check citation for accuracy before use.
Answer:
$327,909.14
Explanation:
Calculation to determine if it should invest in the new product line.
First step
The Investment cost will be:
Land costs $300,000
Building costs $600,000
Equipment costs $250,000
Additional working capital $100,000
=$1,250,000
Annual revenue $750,000
Annual expenses$475,000
Market value:
$400,000 +$350,000 + $50,000 = $80,0000
N: 10 year
MARR: 15% per year
Using PW method
-$1250000 + ($750,000 – $475,000) (P/A, 15%, 10) +$ 80000(P/F, 15%, 10)
-$1250000-$275,000((1+15)^¹⁰−1/15(1+15)^¹⁰+$3000
Hence,
=-$1,250,000 – $275,000(5.0188) + $3000(0.2472)
= $327,909.14
Assume the following data for Lusk Inc. before its year-end adjustments: Debit CreditSales $3,600,000 Cost of Merchandise Sold $2,100,000Estimated Returns Inventory 1800Customer Refunds Payable 900Estimated cost of merchandise that Will be returned in the next year 15,000Estimated percent of refunds for current year sales 0.8%Journalize the adjusting entries for the following: a. Estimated customer allowances b. Estimated customer returns
Answer:
a. Estimated customer allowances
December 31, 202x. estimated customer allowance
Dr Sales 27,900
Cr Customer refunds payable 27,900
total estimated refunds payable = $3,600,000 x 0.8% = $28,800 - $900 (account balance) = $27,900
b. Estimated customer returns
December 31, 202x. estimated customer returns
Dr Estimated returns inventory 13,200
Cr Cost of merchandise sold 13,200
total estimated returns $15,000 - $1,800 = $13,200
Explanation:
Sales $3,600,000
Cost of Merchandise Sold $2,100,000
Estimated Returns Inventory $1800
Customer Refunds Payable $900
Estimated cost of merchandise that Will be returned in the next year $15,000
Estimated percent of refunds for current year sales 0.8%
Suddeth Corporation has entered into a 6 year lease for a building it will use as a warehouse. The annual payment under the lease will be $2,468. The first payment will be at the end of the current year and all subsequent payments will be made at year-ends. If the discount rate is 5%, the present value of the lease payments is closest to (Ignore income taxes.):
Answer:
$13,153.15
Explanation:
Present value is the sum of discounted cash flows.
Present value can be calculated using a financial calculator
Cash flow each year from year 0 to 5 = $2,468
I = 5%
PV = $13,153.15
To find the PV using a financial calacutor:
1. Input the cash flow values by pressing the CF button. After inputting the value, press enter and the arrow facing a downward direction.
2. After inputting all the cash flows, press the NPV button, input the value for I, press enter and the arrow facing a downward direction.
3. Press compute
I hope my answer helps you
Change all of the numbers in the data area of your worksheet so that it looks like this:
Data
4 Unit sales 10,000 units
5 Selling price per unit $20 per unit
6 Variable expenses per unit $8 per unit
7 Fixed expenses $90,000
A) What is the break-even in dollar sales?
B) What is the margin of safety percentage?
C) What is the degree of operating leverage?
1. Using the degree of operating leverage and without changing anything in your worksheet, calculate the percentage change in net operating income if unit sales increase by 20%.
2. Confirm your calculations in Requirement 3 above by increasing the unit sales in your worksheet by 20% so that the Data area looks like this:
Data
4 Unit sales 12,000 units
5 Selling price per unit $20 per unit
6 Variable expenses per unit $8 per unit
7 Fixed expenses $90,000
1. Using the degree of operating leverage and without changing anything in your worksheet, calculate the percentage change in net operating income if unit sales increase by 20%.
2. Confirm your calculations in Requirement 3 above by increasing the unit sales in your worksheet by 20% so that the Data area looks like this:
A. What is net operating income?
B. By what percentage did the net operating income increase?
Answer:
A) What is the break-even in dollar sales?
$150,000B) What is the margin of safety percentage?
25%C) What is the degree of operating leverage?
41. Using the degree of operating leverage and without changing anything in your worksheet, calculate the percentage change in net operating income if unit sales increase by 20%.
if unit sales increase by 20%, then profits should increase by 80%2. Confirm your calculations in Requirement 3 above by increasing the unit sales in your worksheet by 20%
A. What is net operating income?
(10,000 x 1.2 x $20) - (10,000 x 1.2 x $8) - $90,000 = $240,000 - $96,000 - $90,000 = $54,000B. By what percentage did the net operating income increase?
net operating income increased from $30,000 to $54,000 (an 80% increase)Explanation:
selling price $20
variable costs $8
contribution margin $12
break even point = $90,000 / $12 = 7,500 x $20 = $150,000
margin of safety = (current sales - break even) / current sales = $50,000 / $200,000 = 25%
degree of operating leverage = (quantity x contribution margin) / [(quantity x contribution margin) - fixed costs] = (10,000 x $12) / ($120,000 - $90,000) = $120,000 / $30,000 = 4
or contribution margin / net profits = $120,000 / $30,00 = 4
Jolene hired Lacy to find a buyer for her house. Adam was interested in buying the house. If both Jolene and Adam agree, Lacy, a real estate agent, may represent both parties.
A. True
B. False
Answer:
True
Explanation:
Lacy can represent both parties. If Lacy represents both parties this is known as dual agency.
As the “dual” agent Lacy handles all of the communications, paperwork, and negotiations between both parties, that is the buyer and seller who happens to be Jolene and Adam. She is supposed to remain neutral as the facilitator of the deal with no fiduciary duty to either side. Fiduciary duty is to uphold a client's interest in good faith an trust.
Jake, a pharmaceutical sales representative, often takes lunch to doctors' offices. Over lunch with the doctors and their staffs, he reviews his company's products. Jake does not try to close a sale during these lunches. What type of personal selling does this describe
Answer:
The correct answer is: order-creaters.
Explanation:
To begin with, the area of personal selling there are three types of different approaches regarding the sales person and his proper way of selling. According to this theory, one of those types is the one named "order-creaters" and that concept comprehends the type of sellers that primarily focos on not to close the sale, but to persuade the regular customer to promote the product to other clients from the same audience. Therefore that Jake, when goes to have launch in the same place as the doctors, even though he does not want to make a sale, he is looking forward to establish a relationship that later favoured him in promoting the product.
Jayne Butterfield, a single mother with three children, lived in Sacramento, California. Sarah Huckleberry also lived in California until she moved to New York City to open and operate an art gallery. Huckleberry asked Butterfield to manage the gallery under a one-year contract for an annual salary of $90,000. To begin work, Butterfield relocated to New York. As part of the move, Butterfield transferred custody of her children to her husband, who lived in London, England. In accepting the job, Butterfield also forfeited her husband's alimony and child-support payments, including unpaid amounts of nearly $45,000. Before Butterfield started work, Huckleberry repudiated the contract. Unable to find employment for more than an annual salary of $30,000, Butterfield moved to London to be near her children. She filed a suit in an California state court against Huckleberry, seeking damages for breach of contract. Should the court hold, as Huckleberry argued, that Butterfield did not take reasonable steps to mitigate her damages? Why or why not?
Answer:
No, the court should not hold in favor of Huckleberry.
Explanation:
The rule of mitigation that Huckleberry tries to use in her favor states that the non-breaching party (Butterfield) should have taken all the necessary steps to reduce her loss, e.g. take a job in New York. She probably argued that Butterfield leaving for England to meet with her children made things worse.
But in this case, Butterfield relied on Huckleberry's promise to organize her life and the well being of her children. Butterfield made a lot of changes and sacrifices in her life because of this, e.g. forfeiting unpaid alimony, transferring custody of her children , etc.
Moving to a different city or country requires a lot of work, expat life is not easy and not everyone can handle it. Butterfield took decisions that affected the lives of many people and she is not responsible for Huckleberry's breaching, the only party responsible for all this mess is Huckleberry and it is normal that Butterfield would want to go to where her children are.
An example of an inventory accounting policy that should be disclosed in Summary of Significant Accounting Policies is the:_________ . a. amount of income resulting from the involuntary liquidation of LIFO b. major backlogs of inventory orders. c. method used for pricing inventory. d. division of inventory by raw materials, work-in-process, finished goods.
Answer:
Option C
Explanation:
The overview of important accounting rules is a portion of the end notes that accompanies the financial statements of an company, outlining the key policies that the finance department is following. The policy overview is prescribed by the accounting system in force (like the GAAP or IFRS).
The approach a corporation uses to assess the inventory expense (inventory valuation) affects the financial reports explicitly. Thus, it should be depicted in summary of accounting policies.
The one that exemplifies an inventory accounting policy would be:
C). method used for pricing inventory.
Inventory PolicyThe financial statement at the end of the accounting books exemplifies one of the significant rules of accounting.
This highlights the major policies to be followed by the company and its finance team.
The outline of policies acting are provided through this and hence, they will help in offering the method for pricing of inventory in the firm.
Thus, option C is the correct answer.
Learn more about "Inventory" here:
brainly.com/question/14184995
Strawberry Fields purchased a tractor at a cost of $40,000 and sold it two years later for $25,000. Strawberry Fields recorded depreciation using the straight-line method, a five-year service life, and an $6,000 residual value.
1. What was the gain or loss on the sale?2. Record the sale using a general journal entry.
Answer:
1.Loss on sale 1,400
2.Dr Cash 25,000
Dr Accumulated Depreciation 13,600
Dr Loss on sale 1,400
Cr Equipment - Tractor 40,000
Explanation:
1.Calculation of the gain or loss on the sale of Strawberry Fields
Using this formula
Depreciation per year = (Cost - Salvage value)/Useful life
= (40,000-6,000)/5
=34,000/5
= 6,800 per year
The Book value after two years will be:
40,000 - (6,800*2)
=40,000-13,600
=26,400
Gain(Loss) = Cash received - Book value
= 25,000 - 26,400
Loss on sale 1,400
2.Record of the sale using a general journal entry
Dr Cash 25,000
Dr Accumulated Depreciation 13,600
Dr Loss on sale 1,400
Cr Equipment - Tractor 40,000
Russell Co. received a $680 utility bill for the current month's electricity. It is not due until the end of the next month which is when they intend to pay it. Which of the following general journal entries will Russell Co. make to record the receipt of the bill?
a. Utilities Expense 400
Accounts Payable 400
b. Accounts Payable 400
Utilities Expense 400
c. No journal entry is required.
d. Cash 400
Utilities Expense 400
e. Utilities Expense 400
Accounts Receivable 400
The correct options are :
a. Utilities Expense 680
Accounts Payable 680
b. Accounts Payable 680
Utilities Expense 680
c. No journal entry is required.
d. Cash 680
Utilities Expense 680
e. Utilities Expense 680
Accounts Receivable 680
Answer:
a. Debit Utilities Expense $680
Credit Accounts Payable $680
Explanation:
Russel Co has received a utility bill for the current month but they intend to pay next month.
Since the expense is for this month it must be recognised now. So there will be a debit to the Utilities Expense account for $680.
The payment is not being made now but in the next month. This is an amount the business owes so it will be recorded as a credit to Accounts Payable of $680
Accounts payable is used to record monies that the business owes its creditors. Payments are due at a future date.
Answer:
Debit Utilities Expense 680
Credit Accounts Payable 680
Explanation:
Russell Co. Journal entry to record the receipt of the bill will be:
Debit Utilities Expense 680
Credit Accounts Payable 680
Since Russell Co. received a $680 utility bill which is not yet due until the end of the next month which means we have to Debit Utilities Expense with 680 which is the amount not yet due and Credit Accounts Payable with the same amount .
Pastina Company sells various types of pasta to grocery chains as private label brands. The company's reporting year-end is December 31. The unadjusted trial balance as of December 31, 2021, appears below.
Account Title Debits Credits
Cash 32,000
Accounts receivable 40,600
Supplies 1,800
Inventory 60,600
Notes receivable 20,600
Interest receivable 0
Prepaid rent 1,200
Prepaid insurance 6,600
Office equipment 82,400
Accumulated depreciation 30,900
Accounts payable 31,600
Salaries payable 0
Notes payable 50,600
Interest payable 0
Deferred sales revenue 2,300
Common stock 64,200
Retained earnings 30,000
Dividends 4,600
Sales revenue 149,000
Interest revenue 0
Cost of goods sold 73,000
Salaries expense 19,200
Rent expense 11,300
Depreciation expense 0
Interest expense 0
Supplies expense 1,400
Insurance expense 0
Advertising expense 3,300
Totals 358,600 358,600
Information necessary to prepare the year-end adjusting entries appears below.
Depreciation on the office equipment for the year is $10,300.
Employee salaries are paid twice a month, on the 22nd for salaries earned from the 1st through the 15th, and on the 7th of the following month for salaries earned from the 16th through the end of the month. Salaries earned from December 16 through December 31, 2021, were $900.
On October 1, 2021, Pastina borrowed $50,600 from a local bank and signed a note. The note requires interest to be paid annually on September 30 at 12%. The principal is due in 10 years.
On March 1, 2021, the company lent a supplier $20,600 and a note was signed requiring principal and interest at 8% to be paid on February 28, 2022.
On April 1, 2021, the company paid an insurance company $6,600 for a two-year fire insurance policy. The entire $6,600 was debited to prepaid insurance.
$560 of supplies remained on hand at December 31, 2021.
A customer paid Pastina $2,300 in December for 900 pounds of spaghetti to be delivered in January 2022. Pastina credited deferred sales revenue.
On December 1, 2021, $1,200 rent was paid to the owner of the building. The payment represented rent for December 2021 and January 2022 at $600 per month. The entire amount was debited to prepaid rent.
Required:
1. Prepare an income statement and a statement of shareholders’ equity for the year ended December 31, 2021, and a classified balance sheet as of December 31, 2021. Assume that no common stock was issued during the year and that $4,600 in cash dividends were paid to shareholders during the year.
2. Prepare the statement of shareholders' equity for the year ended December 31, 2021.
3. Prepare the classified balance sheet for the year ended December 31, 2021. (Amounts to be deducted should be indicated by a minus sign.)
Answer:
Adjusting entries
Depreciation on the office equipment for the year is $10,300.
Dr Depreciation expense 10,300
Cr Accumulated depreciation 10,300
Employee salaries are paid twice a month, on the 22nd for salaries earned from the 1st through the 15th, and on the 7th of the following month for salaries earned from the 16th through the end of the month. Salaries earned from December 16 through December 31, 2021, were $900.
Dr Wages expense 900
Cr Wages payable 900
On October 1, 2021, Pastina borrowed $50,600 from a local bank and signed a note. The note requires interest to be paid annually on September 30 at 12%. The principal is due in 10 years.
Dr Interest expense 1,518
Cr Interest payable 1,518
On March 1, 2021, the company lent a supplier $20,600 and a note was signed requiring principal and interest at 8% to be paid on February 28, 2022.
Dr Interest receivable 1,373
Cr Interest revenue 1,373
On April 1, 2021, the company paid an insurance company $6,600 for a two-year fire insurance policy. The entire $6,600 was debited to prepaid insurance.
Dr Insurance expense 2,475
Cr Prepaid insurance 2,475
$560 of supplies remained on hand at December 31, 2021.
Dr Supplies expense 1,240
Cr Supplies 1,240
A customer paid Pastina $2,300 in December for 900 pounds of spaghetti to be delivered in January 2022. Pastina credited deferred sales revenue.
No entry is required
On December 1, 2021, $1,200 rent was paid to the owner of the building. The payment represented rent for December 2021 and January 2022 at $600 per month. The entire amount was debited to prepaid rent.
Dr Rent expense 600
Cr Prepaid rent 600
Pastina Company
Income Statement
For the Year Ended December 31, 2021
Sales revenue $149,000
Interest revenue $1,373
Cost of goods sold -$73,000
Salaries expense -$20,100
Rent expense -$11,900
Depreciation expense -$10,300
Interest expense -$1,518
Supplies expense -$2,640
Insurance expense -$2,475
Advertising expense -$3,300
Net income = $25,140
Pastina Company
Balance Sheet
For the Year Ended December 31, 2021
Assets
Current assets:
Cash $32,000
Accounts receivable $40,600
Supplies $560
Inventory $60,600
Notes receivable $20,600
Interest receivable $1,373
Prepaid rent $600
Prepaid insurance $4,125
Total current assets: $160,458
Non-current assets:
Office equipment $82,400
Accumulated depreciation $41,200
Total non-current assets: $41,200
Total assets: $201,658
Liabilities and stockholders' equity
Current liabilities:
Accounts payable $31,600
Wages payable $900
Interest payable $1,518
Deferred sales revenue $2,300
Total current liabilities: $36,318
Long term debt:
Notes payable $50,600
Total long term debt: $50,600
Total liabilities: $86,918
Stockholders' equity:
Common stock $64,200
Retained earnings $50,540
Total stockholders' equity: $114,740
Total liabilities and stockholders' equity: $201,658
retained earnings = previous balance + net income - dividends = $30,000 + $25,140 - $4,600 = $50,540
Pastina Company
Statement of Shareholders’ Equity
For the Year Ended December 31, 2021
Balance on January 1: Common stock $64,200
Balance on January 1: Retained earnings $30,000
Net income 2021 $25,140
- Dividends ($4,600)
Subtotal $50,540
Balance on December 31: Common stock $64,200
Balance on December 31: Retained earnings $50,540
A team is working on a cutting-edge technology, and does not have a lot of familiarity with the technical environment. As a result, it is struggling to estimate a complex story because the approach itself is not clear. How should the team proceed
Answer:
The answer is "Writing a SPIKE (a non-technical nonstory) as well as the period box until you accept your system planning article".
Explanation:
The working of the team is on state-of-the-art technology and its understanding of the relevant setting, and its main purpose of removing technological complexity is to conduct experiments-this is what a SPIKE tale is about. Whenever a story could not be predicted as the manager wants an experiment, it's indeed best to read a piece before continuing to work on the storyline.
On January 1, 2021, Maywood Hydraulics leased drilling equipment from Aqua Leasing for a four-year period ending December 31, 2024, at which time possession of the leased asset will revert back to Aqua. The equipment cost Aqua $412,184 and has an expected economic life of five years. Aqua expects the residual value at December 31, 2024, to be $50,000. Negotiations led to Maywood guaranteeing a $70,000 residual value. Equal payments under the lease are $100,000 and are due on December 31 of each year with the first payment being made on December 31, 2021. Maywood is aware that Aqua used a 5% interest rate when calculating lease payments.
Required:
1. Prepare the appropriate entry for Maywood on January 1, 2021, to record the lease.
2. Prepare all appropriate entries for Maywood on December 31, 2021, related to the lease.
Answer:
1/1/2021
Dr Right of use Asset 371,049
Dr Lease Payable 371,049
12/31/2021
Dr Interest Expense 18,552
Dr Lease Payable 81,448
Cr Cash 100,000
12/31/2021
Dr Amortization Expense 92,762
Cr Right of use Asset 92,762
Explanation:
Maywood Hydraulics
First step is to Calculate for PMT, FV and PV
N= 4, I= 5, PMT=100,000, FV=20,000, PV= 371,049
1/1/2021
Dr Right of use Asset 371,049
Dr Lease Payable 371,049
12/31/2021
Dr Interest Expense 18,552
(371,049*.05)
Dr Lease Payable 81,448
(100,000-18,552)
Cr Cash 100,000
12/31/2021
Dr Amortization Expense 92,762
Cr Right of use Asset 92,762
[ (371,049-0)/4 years]
1. Determine the inventory on June 30 and the cost of goods sold for the three-month period, using the first-in, first-out method and the periodic inventory system. Inventory, June 30 $ Cost of goods sold $ 2. Determine the inventory on June 30 and the cost of goods sold for the three-month period, using the last-in, first-out method and the periodic inventory system. Inventory, June 30 $ Cost of goods sold $ 3. Determine the inventory on June 30 and the cost of goods sold for the three-month period, using the weighted average cost method and the periodic inventory system. Note: Round the weighted average unit cost to the nearest dollar and final answers to the nearest dollar. Inventory, June 30 $ Cost of goods sold $ 4. Compare the gross profit and June 30 inventories using the following column headings. For those boxes in which you must enter subtracted or negative numbers use a minus sign. FIFO LIFO Weighted Average Sales $ $ $ Cost of goods sold Gross profit $ $ $ Inventory, June 30 $ $ $
Complete Question:
The beginning inventory for Dunne Co. and data on purchases and sales for a three-month period are as follows: Date Transaction Number of Units Per Unit Total Apr. 3 Inventory 25 $1,200 $30,000 8 Purchase 75 1,240 93,000 11 Sale 40 2,000 80,000 30 Sale 30 2,000 60,000 May 8 Purchase 60 1,260 75,600 10 Sale 50 2,000 100,000 19 Sale 20 2,000 40,000 28 Purchase 80 1,260 100,800 June 5 Sale 40 2,250 90,000 16 Sale 25 2,250 56,250 21 Purchase 35 1,264 44,240 28 Sale 44 2,250 99,000
Required: 1. Determine the inventory on June 30 and the cost of goods sold for the three-month period, using the first-in, first-out method and the periodic inventory system. Inventory, June 30 $ Cost of goods sold $
2. Determine the inventory on June 30 and the cost of goods sold for the three-month period, using the last-in, first-out method and the periodic inventory system. Inventory, June 30 $ Cost of goods sold $
3. Determine the inventory on June 30 and the cost of goods sold for the three-month period, using the weighted average cost method and the periodic inventory system. Note: Round the weighted average unit cost to the nearest dollar and final answers to the nearest dollar. Inventory, June 30 $ Cost of goods sold $
4. Compare the gross profit and June 30 inventories using the following column headings. For those boxes in which you must enter subtracted or negative numbers use a minus sign. FIFO LIFO Weighted Average Sales $ $ $ Cost of goods sold Gross profit $ $ $ Inventory, June 30 $ $ $
Answer:
Dunne Co.1. Determine the inventory on June 30 and the cost of goods sold for the three-month period, using the first-in, first-out method and the periodic inventory system:
a) Inventory, June 30 = $32,864 (26 x $1,264)
b) Cost of goods sold = Cost of goods available for sale - Ending Inventory = $310,776 ($343,640 - $32,864)
2. Determine the inventory on June 30 and the cost of goods sold for the three-month period, using the last-in, first-out method and the periodic inventory system:
a) Inventory, June 30 = $31,240
Beginning Inventory 25 units at $1,200 = $30,000
Purchase on April 8, 1 unit at $1,240 1,240
Total Ending Inventory $31,240
b)Cost of goods sold = Cost of goods available for sale - Ending Inventory
= $311,400 ($343,640 - $32,240)
3. Determination of the inventory on June 30 and the cost of goods sold for the three-month period, using the weighted average cost method and the periodic inventory system. Note: Round the weighted average unit cost to the nearest dollar and final answers to the nearest dollar:
a) Inventory, June 30 = $32,500 (26 x $1,250)
b) Cost of goods sold = $311,250 (249 x $1,250)
4. Comparison of the Gross Profit and June 30 inventories using the following column headings:
FIFO LIFO Weighted Average
Sales $525,250 $525,250 $525,250
Cost of goods sold -310,776 -311,400 -311,150
Gross profit $214,474 $213,850 $214,100
Inventory, June 30 $32,864 $31,240 $32,489.60
Explanation:
a) Data on Purchase and Sale Transactions with the Quarter:
Date Transaction Number of Units Per Unit Total
In Out Cost Sales
Apr. 3 Inventory 25 $1,200 $30,000
8 Purchase 75 1,240 93,000
11 Sale 40 2,000 80,000
30 Sale 30 2,000 60,000
May 8 Purchase 60 1,260 75,600
10 Sale 50 2,000 100,000
19 Sale 20 2,000 40,000
28 Purchase 80 1,260 100,800
June 5 Sale 40 2,250 90,000
16 Sale 25 2,250 56,250
21 Purchase 35 1,264 44,240
28 Sale 44 2,250 99,000
b) Goods Available 275 $343,640
Cost of goods sold 249 See calculations
Sales 249 $525,250
Ending Inventory 26 See Calculations
c) Average cost of goods = Cost of goods available for sale/Quantity of goods available for sale = $343,640/275 = $1,249.60
d) Under the periodic inventory system:
1) FIFO assumes that the goods bought first are sold first.
2) LIFO assumes that the goods bought last are sold first
3) Weighted Average takes for granted that the cost of goods available for sale and inventory can be determined with the weighted average.
Using the period inventory system, it is when physical count is taken of inventory that one can estimate its value. Unlike the perpetual inventory system, the periodic inventory system waits till a financial period ends to value stock. The results for ending inventory under the weighted average method, using the perpetual inventory system differs from the results under the same method, using the periodic inventory system.
The required return on the stock of Moe's Pizza is 10.8 percent and aftertax required return on the company's debt is 3.40 percent. The company's market value capital structure consists of 69 percent equity. The company is considering a new project that is less risky than current operations and it feels the risk adjustment factor is minus 1.9 percent. The tax rate is 39 percent. What is the required return for the new project? rev: 12_20_2018_QC_CS-152115 Multiple Choice 10.41% 6.19% 8.51% 9.99% 6.61%
Answer:
The required return for the new project is 6.87%
Explanation:
In order to calculate the required return for the new project we would have to calculate the Weighted Average Cost of Capital (WACC) adjusted by risk adjustment factor .
The Weighted Average Cost of Capital (WACC) = [After Tax Cost of Debt x Weight of Debt] + [Cost of equity x Weight of Equity]
After -tax Cost of Debt = 3.40%
Cost of Equity = 10.80%
Weight of Debt = 0.39
Weight of Equity = 0.69
Therefore, the Weighted Average Cost of Capital (WACC) = [After Tax Cost of Debt x Weight of Debt] + [Cost of equity x Weight of Equity]
= [3.40% x 0.39] + [10.80% x 0.69]
= 1.32% + 7.45%
= 8.77%
The required return for the new project = Weighted Average Cost of Capital – Risk Adjustment Factor
= 8.77% - 1.90%
= 6.87%
The required return for the new project is 6.87%
Small business owners' unique selling points (also known as benefits) that customers can expect from your goods or services, including benefits that differentiate your offering from those of the competition is known as:
Answer: Value proposition
Explanation: Value proposition in business is that service, innovation, or uniqueness about your business that attracts customers. A value proposition also helps answers the question 'why' someone should do business with you. It hells to convince potential customer why they should patronize you, and why your service or product would be of more value to them than what your competitors offering same service would be able to offer them.
For each of the following situations involving annuitities solve for the unknown assume that interest is compounded annually and that all annuity amounts are received at the end of each period. (i = interest rate, and n = number of years) (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1).
Present Value Annuity Amount i = n =
3000 8% 5
242980 75000 4
161214 20000 9%
500000 80518 8
250000 10% 4
Answer:
A) $11,978.10
B) 9%
C) 15 years
D) 6%
E) $78,866.84
Explanation:
Present Value Annuity Amount i = n =
A 3000 8% 5
242980 75000 B 4
161214 20000 9% C
500000 80518 D 8
250000 E 10% 4
A = $3,000 x 3.9927 = $11,978.10
B: annuity factor = $242,980 / $75,000 = 3.23973
using the annuity table, a 9% annuity for 4 years has a factor = 3.2397
C: annuity factor = $161,214 / $20,000 = 8.0607
using the annuity table, a 9% annuity for 15 years has a factor = 8.0607
D: annuity factor = $500,000 / $80,518 = 6.20979
using the annuity table, a 6% annuity for 8 years has a factor = 6.2098
E: annuity payment = present value / annuity factor = $250,000 / 3.1699 (annuity factor 10%, 4 years) = $78,866.84
A company has net credit sales of $ 1 comma 300 comma 000, beginning net accounts receivable of $ 270 comma 000, and ending net accounts receivable of $ 202 comma 000. What is the days' sales in accounts receivable? (Use 365 days in calculations as needed. Round any intermediate calculations to two decimal places, and your final answer to the nearest whole day.)
Answer:
66.36 days
Explanation:
Calculation of the days' sales in accounts receivable .
Using this formula
Accounts Receivable Turnover Ratio = [Net credit sales (Beginning net account receivable +Ending net account receivable)/2)]
Let plug in the formula
[$1,300,000/($270,000 + $202,000)/2)]
$1,300,000/($472,000/2)
=$1,300,000/236,000
=$5.50 Days' sales in receivables
= 365/5.5
= 66.36 days
Therefore the days' sales in accounts receivable will be 66.36 days
Your uncle is about to retire, and he wants to buy an annuity that will provide him with $75,000 of income a year for 20 years, with the first payment coming immediately. The going rate on such annuities is 5.25%. How much would it cost him to buy the annuity today
Answer:
The annuity will cost him $963,212.95.-
Explanation:
Giving the following information:
Cash flow= $75,000
Interest rate= 0.0525
n= 20
First, we need to calculate the final value. We will use the following formula:
FV= {A*[(1+i)^n-1]}/i + {[A*(1+i)^n]-A}
A= annual cash flow
FV= {75,000*[(1.0525^20) - 1]/0.0525} + {[75,000*(1.0525^20)] - 75,000}
FV= 2,546,491.88 + 133,690.82= $2,680,182.70
Now, the present value:
PV= FV/(1+i)^n
PV= 2,680,182.70/(1.0525^20)
PV= $963,212.95
Compute net income for 2019 by comparing total equity amounts for these two years and using the following information: During 2019, the owner invested $33,000 additional cash in the business (in exchange for common stock) and the company paid a $36,000 cash dividend.
Equity, December 31, 2018
Equity, December 31, 2019
The accounting records of Nettle Distribution show the following assets and liabilities as of December 31, 2018 and 2019.
December 31 2018 2019
Cash $55,530 $10,900
Accounts receivable 30,142 23,632
Office Supplies 4,755 3,483
Office equipment 145,958 155,473
Trucks 57, 115 66, 115
Building 0 190, 398
Land 0 47,511
Accounts payable 79,245 39,303
Note payable 0 137,909
Answer:
net income during 2019 = $109,045
Explanation:
total stockholder equity 2018 = assets - liabilities = $293,500 - $79,245 = $214,255
total stockholder equity 2019 = assets - liabilities = $497,512 - $177,212 = $320,300
change in equity from 2018 to 2019 = $106,045
$33,000 can be explained by additional capital invested, and the remaining $73,045 corresponds to change in retained earnings
change in retained earnings = net income - dividends distributed
$73,045 = net income - $36,000
net income = $109,045
The following refers to units processed by a breakfast cereal maker in August. Compute the total equivalent units of production with respect to conversion for August using the weighted-average inventory method. Units of Product Percent of Conversion Added Beginning Work in Process 230,000 60 % Units started 570,000 100 % Units completed 620,000 100 % Ending Work in Process 180,000 70 %
Answer:
Total Equivalent Units Conversion 746,000
Explanation:
Breakfast Cereal Maker
Weighted-Average Inventory Method
Total Equivalent Units
Units Conversion Equivalent Units
Particulars %
Units completed 620,000 100 % 620,000
Add Ending WIP 180,000 70 % 126,000
Total Equivalent Units 746,000
The total Equivalent units are obtained by adding the percent of the units in the ending work in process inventory to the units completed and transferred out. This is the average weighted method of finding the equivalent units.
As only conversion is required we found out the conversion units only.