ANSWER:- The difference in these policies is while BEE sought to right the wrongs of the past, B-BBEE aims at distributing the wealth of nation across all races and genders.
Which of the following completes the sentence, 'The target audience’s ________ will include the market’s social activities and styles, such as their level of social media participation, the channels they utilize and the communities in which they are active, and their behavior in social communities'?
Answer:
Social profile
Explanation:
The completes sentence is
'The target audience’s Social profile
will include the market’s social activities and styles, such as their level of social media participation, the channels they utilize and the communities in which they are active, and their behavior in social communities''
Social profile gives the description of social characteristics of different individuals which defined them on social media and in communities
The Home and Garden (HG) chain of superstores imports decorative planters from Italy. Demand for the planters is stable and averages at 150/week. Each planter costs $10. HG incurs a holding cost of 30% per year to carry inventory. HG has an opportunity to set up a superstore in the Phoenix region. Each order shipped from Italy incurs a fixed transportation and delivery cost of $5000. Consider 50 weeks in the year. Suppose HG uses the economic order quantity (EOQ) model to make ordering decisions. Then the average inventory that HG carries for the year would be
Answer:
The average inventory which HG should carry during the year is 5,000 units.
Explanation:
Economic Order Quantity is the ideal inventory procurement which minimizes holding and ordering cost. The EOQ is used by businesses in order to determine the best possible inventory holding.
EOQ = [tex]\sqrt{\frac{2*Annual Demand * Ordering Cost}{Annual Holding Cost} }[/tex]
EOQ = [tex]\sqrt\frac{2*7,500*5,000}{10*0.3}[/tex]
EOQ = 5,000 units
For each error below, indicate:
a. Which accounts are affected
b. Which assertions are violated.
1. An inventory purchase is received but not recorded until the company pays for the goods.
2. Certain repair costs that should be expensed are capitalized.
3. No loss is recorded or disclosed for a pending lawsuit against the client that is material, probable, and can be estimated.
4. Sales shipped FOB shipping point are recorded before the balance sheet date but not shipped until after the balance sheet date.
Answer:
1. Inventory account will be affected and assertions of accuracy and valuation will be violated.
2. Assets are overstated and assertion classification is violated.
3. Liability is understated and assertions of accuracy is violated.
4. No impact.
Explanation:
Assertions are certain claims of a business which a business must fulfill in order to make its financial statements reliable. A company has to record the expense when it is incurred in order to provide accuracy in valuation. In the given cases the assertions are violated which impact business accounts.
On March 1, 2019, Rasheed Company assigns $825,000 of its accounts receivable to the Third National Bank as collateral for a $600,000 loan due April 1, 2019. The assignment agreement calls for Rasheed Company to continue to collect the receivables. Third National Bank assesses a finance charge of 2.5% of the accounts receivable, and interest on the loan is 8% (a realistic rate of interest for a note of this type).
Required:
a. Prepare the March 1, 2019, journal entry for Rasheed Company.
b. Prepare the journal entry for Rasheed's collection of $750,000 (need to factor out discounts and sales returns) of the accounts receivable during March of 2019. Sales discounts of $8,000 apply, as well as $22,000 of sales returns.
c. On April 1, 2019, Rasheed paid Third National all that was due from the loan it secured on March 1, 2019. Prepare the journal entry to record this payment.
Answer:
A.Dr Cash 579,375
Dr Finance charge 20,625
Cr Loan payable 600,000
Dr Accounts Receivable Assigned 825,000
Cr Accounts Receivable 825,000
b) Dr Cash 750,000
Cr Sales discounts 8,000
Cr Sales returns 22,000
Cr Accounts Receivable Assigned 720,000
c)Dr Loan Payable 600,000
Cr nterest expense 4,000
Cr Cash 596,000
Explanation:
a. Preparation for March 1, 2019, journal entry for Rasheed Company
March 01,2019
Dr Cash 579,375
(600,000-20,625)
Dr Finance charge (825,000*2.5%) 20,625
Cr Loan payable 600,000
(Loan amount received)
March 01,2019
Dr Accounts Receivable Assigned 825,000
Cr Accounts Receivable 825,000
(Assigning Accounts receivable)
b.Preparation of the journal entry for Rasheed's collection of the amount of $750,000 of the accounts receivable during March of 2019
March, 2019
Dr Cash 750,000
Cr Sales discounts 8,000
Cr Sales returns 22,000
Cr Accounts Receivable Assigned 720,000
(750,000-8,000-22,000)
C.Preparation of the journal entry to record this payment.
April 01,2019
Dr Loan Payable 600,000
Cr nterest expense (600,000*8%*1/12) 4,000
Cr Cash 596,000)
(600,000-4,000)
(Loan settled along with interest)
Job interviews can change your life. They can also be stressful, but if you learn about the process and prepare yourself ahead of time, you will feel more relaxed. Adequately understanding the interview process, its purpose, and its types will help you prepare for an interview. Preparing for an interview can greatly improve your chances of getting the job.
An interview helps__________
Answer:
Employment interviews will persuade almost every applicant of client potential. A further description is provided below.
Explanation:
A dialogue somewhere between a prospective employer and a somewhat job seeker or is considered as a Job interview. A career interesting interview to further decide however if a candidate or a job seeker is eligible for a corporate job or not.It could perhaps become an influential tactic if the person interviewed anything other than that doesn't have reliable details.Scenario 29-1. The Monetary Policy of Tazi is controlled by the country's central bank known as the Bank of Tazi. The local unit of currency is the Tazian dollar. Aggregate banking statistics show that collectively the banks of Tazi hold $300 million of required reserves, $75 million of excess reserves, have issued $7,500 million of deposits, and hold $225 million of Tazian Treasury bonds. Tazians prefer to use only demand deposits and so all money is on deposit at the bank. Refer to Scenario 29-1. Suppose the Bank of Tazi loaned the banks of Tazi $10 million. Suppose also that both the reserve requirement and the percentage of deposits held as excess reserves stay the same. By how much would the money supply change
Answer:
$200 million
Explanation:
Required reserve = 300 million
Excess reserve = 75 million
Deposit = 7,500 million
In hold is 225 million
Loan amount is 10 million
Total reserve = m*Demand deposit
300 + 75 = m*7500
m = 375/7500
m = 0.05
The reserve requirement ratio is 0.05
Change in money supply = Loan amount/Reserve requirement ratio
Change in money supply = 10/0.05
Change in money supply = 200
So, the change in money supply is $200 million
Answer the below case problem, giving the legal issue, the governing law and the rationale in support of your conclusion.
Arthur Jensen, Inc., was a corporation engaged in the housing construction business.
Arthur Jensen set up and was the sole owner and president of the corporation. Alaska Valuation Service [AVS] conducted housing appraisals for Jensen on numerous occasions over the years. When AVS took the orders for appraisals, it was not aware that it was dealing with a corporation. It believed that it was dealing directly with Jensen [i.e., as a sole proprietor]. Jensen never specifically informed AVS of his status as the president of Arthur Jensen, Inc. When AVS was not paid for appraisal services that it had performed, AVS sued Arthur Jensen, attempting to hold him personally liable for the unpaid appraisals.
Arthur Jensen argued that he could not be personally liable because he had acted on behalf of his corporation.
1. Decide the case based on the above stated facts.
2. Assuming Arthur Jensen could be held personally liable, how could Arthur
Jensen have better protected himself? [we discussed this in class]
Answer:
1. Decide the case based on the above stated facts.
Corporations provide limited liability to their owners, and one person corporations are legal in all states. Depending on how Arthur handled his business, the corporate veil might or not be lifted. If he separated the corporate account and managed the corporation separately for his other assets, then he is not liable.
On the other hand, if he paid the bills using his personal account, or used the corporation's assets as his own, then the outcome might change. We are not given enough details.
2. Assuming Arthur Jensen could be held personally liable, how could Arthur Jensen have better protected himself?
Simple, he should sign as the president of the corporation and pay using the corporation's account.
A firm's value added is a. the revenue it receives for its output, minus the cost of all the intermediate goods it buys b. the revenue it receives for its output, minus the taxes that it pays c. the revenue it receives by selling its output d. usually not included in GDP e. the revenue it receives for its output, plus the cost of all the intermediate goods it buys g
Answer:
a. the revenue it receives for its output, minus the cost of all the intermediate goods it buys.
Explanation:
An asset can be defined as an resources owned and controlled by an individual or organization, which is capable of providing future economic benefits or has the potential to produce positive economic value. Assets can be used to generate revenue in the future or even in its present state depending on the choice of the owner.
On the other hand, an expense is a term used to describe money spent or cost incurred by an individual or organization.
Hence, a firm's value added is the revenue it receives for its output, minus the cost of all the intermediate goods it buys.
This ultimately implies that, a firm's value added is the sum of its revenue from the sales of its goods and services, minus the expenses on purchase or inventory.
Day Company has the following sales budget: July August September $105,000 $211,000 $134,000 Credit sales represent 80 percent of budgeted sales. Of the credit sales, 20 percent is collected in the month of the sale, 60 percent in the month after the sale, and the remaining 15 percent is collected two months after the sale. Five percent of all sales are uncollectible and written-off. In September, total cash receipts from sales amount to
Answer:
Day Company
In September, total cash receipts from sales amount to:
= $162,080.
Explanation:
a) Data and Calculations:
sales budget: Credit (80%) Cash (20%)
July $105,000 $84,000 $21,000
August $211,000 $168,800 $42,200
September $134,000 $107,200 $26,800
July August September
Sales $105,000 $211,000 $134,000
Credit sales 84,000 168,800 107,200
Cash sales 21,000 42,200 $26,800
20% 16,800 33,750 21,400
60% after sales 50,400 101,280
15% after 2 months 12,600
Total cash receipts from sales $162,080
How have technological Innovations Increased risks in business organizations!
Answer:
Businesses are more susceptible to information leakages as a result of technological inventions.
They also have to spend more money in the purchase of technologies that might be expensive to maintain.
Explanation:
1. Business organizations carry out a lot of activities that center on information sharing. The advent of technologies comes with risks from hackers who might want to intrude in the information of the company. When the system is compromised, customers can be disappointed and important and sensitive information may be lost to attackers or competing organizations that might fund such attacks. This will impose an information risk to the company.
2. The purchase of new technologies come at a high price. Personnel conversant with the use and operation of these technologies may be hard to find and might require training to be effective in the use of these machines. These machines can easily fall into disuse when they are not properly maintained. This will impose a financial risk to the company.
Answer:
Businesses are more susceptible to information leakages as a result of technological inventions.
They also have to spend more money in the purchase of technologies that might be expensive to maintain.
Explanation:
Hope this helps
A prospective MBA student earns $45,000 per year in her current job and expects that amount to increase by 12% per year. She is considering leaving her job to attend business school for two years at a cost of $35,000 per year. She has been told that her starting salary after business school is likely to be $115,000 and that amount will increase by 11% per year. Consider a time horizon of 10 years, use a discount rate of 12%, and ignore all considerations not explicitly mentioned here. Assume all cash flows occur at the start of each year (i.e., immediate, one year from now, two years from now,..., nine years from now). Also assume that the choice can be implemented immediately so that for the MBA alternative the current year is the first year of business school. What is the net present value of the more attractive choice? Please round your answer to the nearest dollar.
Answer:
She is considering leaving her job to attend business school for two years at a cost of $35,000 per year. She has been told that her starting salary after business school is likely to be $115,000 a day
Explanation:
QS 8-7 Computing revised depreciation LO C2 On January 1, the Matthews Band pays $65,200 for sound equipment. The band estimates it will use this equipment for five years and after five years it can sell the equipment for $2,000. Matthews Band uses straight-line depreciation but realizes at the start of the second year that this equipment will last only a total of three years. The salvage value is not changed. Compute the revised depreciation for both the second and third years.
Answer:
$25,280 per year
Explanation:
The computation of the revised depreciation for both the second and third years is shown below:
But before that following calculations need to be done
Depreciation for year 1 = [Cost – Salvage Value] ÷Useful Life
= [$65,200 - 2,000] ÷ 5 Years
= $12,640
Now Book Value at point of revision is
= Cost - First year depreciation
= $65,200 - $12,640
= $52,560
Now
Remaining Depreciable Cost = Book Value at the point of revision - Salvage Value
= $52,560 – 2,000
= $50,560
And, finally Depreciation per year for Year 2 and 3 is
= Depreciable cost / Remaining useful life
= $50,560 ÷ 2 Year
= $25,280 per year
. Explain factors which may cause the demand curve to shift outward
Answer:
Answer is below
Explanation:
Factors that may cause the demand curve to shift outward are:
1. changes in tastes and preference: when there is a change in taste for example commodity A, whereby people tend to enjoy its taste, the will be an outward shift in the demand curve of commodity A
2. income of the consumers: when the income of consumers increases, they tend to buy more of a certain commodity they enjoy, hence there will be an outward shift in that commodity's demand curve
3. prices of substitute or complement goods: for example, an increase in the price of a substitute will cause consumers to demand more for a particular commodity, hence, outward in demand shift curve occurs
4. expectations about future conditions and prices: when there is speculation about an increase in the price of an essential commodity or goods consumers enjoy, people tend to buy more in a given moment, hence there exists an outward shift in the demand curve
5. Population of consumers in the market: increase in the population of consumers of a certain commodity is directly proportional to an increase in demand of that commodity, hence there exists an outwards shift in the demand curve.
A lender is considering what terms to allow on a loan. Current market terms are 8 percent interest for 25 years for a fully amortizing loan. The borrower, Rich, has requested a $100,000 loan. The lender believes that extra credit analysis and careful loan control will have to be exercised because Rich has never borrowed such a large sum before. In addition, the lender expects that market rates will move upward very soon, perhaps even before the loan is closed. To be on the safe side, the lender decides to extend Rich a fixed rate, constant payment mortgage (CPM) loan commitment of $95,000 at 9 percent interest for 25 years. However, the lender wants to charge a loan origination fee to make the mortgage loan yield 10%. What origination fee should the lender charge? What fee should be charged if it is expected that the loan will be repaid after 10 years?
Answer:
1. The origination fee that the lender should charge if Rich will repay the loan after 25 years = $20,000 approximately.
2. The origination fee that the lender should charge if Rich will repay the loan after 10 years = $6,600 approximately.
Explanation:
a) Data and Calculations:
Amount requested by Rich = $100,000
Amount the bank is willing to lend Rich = $95,000
Interest rate = 9%
Period of loan = 25 years or 10 years
From an online finance calculator:
At 10% interest rate:
PMT = $-10,465.97
Sum of all periodic payments = $-261,649.17
Total Interest = $166,649.17
At 9% interest rate:
PMT = $-9,671.59
Sum of all periodic payments = $-241,789.84
Total Interest = $146,789.84
Expected Origination Fee:
Interest at 10% = $166,649.17
Interest at 9% = $146,789.84
Required origination fee = $19,859.32 ($166,649.17 - $146,789.84)
This is equivalent to $20,000
Payment after 10 years:
At 10% interest rate:
PMT = $-15,460.81
Sum of all periodic payments = $-154,608.13
Total Interest = $59,608.13
At 9% interest rate:
PMT = $-14,802.91
Sum of all periodic payments = $-148,029.09
Total Interest = $53,029.09
Expected Origination Fee:
Interest at 10% = $59,608.13
Interest at 9% = $53,029.09
Required origination fee = $6,579.04 or $6,600 ($59,608.13 - $53,029.09)
Gibson Hats Corporation manufactures three different models of hats: Vogue, Beauty, and Glamour. Gibson expects to incur $666,000 of overhead cost during the next fiscal year. Other budget information follows. Vogue Beauty Glamour Total Direct labor hours 3,400 5,400 9,200 18,000 Machine hours 1,200 2,050 2,300 5,550 Required Use direct labor hours as the cost driver to compute the allocation rate and the budgeted overhead cost for each product. Use machine hours as the cost driver to compute the allocation rate and the budgeted overhead cost for each product.
Answer:
A. Vogue $125,800
Beauty $199,800
Glamour $340,400
B. Vogue $144,000
Beauty $246,000
Glamour $276,000
Explanation:
A. Computation for the allocation rate and the budgeted overhead cost for each product Using direct labor hours as the cost driver
First step is to calculate the Product Allocation rate
Product Allocation rate =$666,000/18,000
Product Allocation rate=$37.00
Now let calculate the allocation rate and the budgeted overhead cost for each product
Using this formula
Allocated Cost=Product Allocation rate * Weight of Base
Let plug in the formula
Vogue= $37.00 * 3400
Vogue = $125,800
Beauty= $37.00 * 5400
Beauty= $199,800
Glamour=$37.00 * 9200
Glamour = $340,400
Total $666,000.00
($125,800+$199,800+$340,400)
Therefore the allocation rate and the budgeted overhead cost for each product Using direct labor hours as the cost driver will be :
Vogue $125,800
Beauty $199,800
Glamour $340,400
B. Computation for the allocation rate and the budgeted overhead cost for each product Using
Use machine hours as the cost driver
First step is to calculate the Product Allocation rate
Product Allocation rate =$666,000/5,550
Product Allocation rate=$120.00
Now let calculate the allocation rate and the budgeted overhead cost for each product
Using this formula
Allocated Cost=Product Allocation rate * Weight of Base
Vogue=$120.00 * 1200
Vogue = $144,000
Beauty= $120.00 * 2050
Beauty = $246,000
Glamour= $120.00 * 2300
Glamour = $276,000
Total $666,000
($144,000+$246,000+$276,000)
Therefore the allocation rate and the budgeted overhead cost for each product Using
Use machine hours as the cost driver will be:
Vogue $144,000
Beauty $246,000
Glamour $276,000
The first step in creating a service blueprint is to identify the activities that are necessary to complete the project and their sequence of order.
False
True
Answer:
verdadeiro
Explanation:
verdadeiro
20. (EFM12c) How are market prices set?
a. By the government,
b. By the interaction of producers and sellers,
c. By the interaction of consumers and buyers,
d. By the interaction of producers and consumers.
D) By the interaction of producers and consumers
(Ratio Computation and Analysis; Liquidity) As loan analyst for Utrillo Bank, you have been presented the following information.
Each of these companies has requested a loan of $50,000 for 6 months with no collateral offered. Because your bank has reached its quota for loans of this type, only one of these requests is to be granted.
Instructions
Which of the two companies, as judged by the information given above, would you recommend as the better risk and why? Assume that the ending account balances are representative of the entire year.
Toulouse Co. Lautrec Co.
Assets
Cash $120,000 $320,000
Receivables 220,000 302,000
Inventories 570,000 518,000
Total current assets9 10,000 1,140,000
Other assets 500,000 612,000
Total assets $1,410,000 $1,752,000
Liabilities and Stockholders
Current liabilities $301,600 $350,600
Long-term liabilities 404,300 499,300
Capital stock and retained earnings
713,600 904,200
Total liabilities and stockholders' Equity
$1,419,500 $1,754,100
Annual sales $ 931,300 $1,506,700
Rate of gross profit on sales30% 40%
Answer:
Utrillo Bank
Ratio Computation and Analysis: Liquidity Ratios:
Based on the computed liquidity ratios below, the loan should be advanced to Lautrec Co. It has better performing liquidity ratios than Toulouse Co.
Explanation:
a) Data and Calculations:
Loan request = $50,000
Period of loan = 6 months with no collateral
Account balances:
Toulouse Co. Lautrec Co.
Assets
Cash $120,000 $320,000
Receivables 220,000 302,000
Inventories 570,000 518,000
Total current assets 9 10,000 1,140,000
Other assets 500,000 612,000
Total assets $1,410,000 $1,752,000
Liabilities and Stockholders
Current liabilities $301,600 $350,600
Long-term liabilities 404,300 499,300
Capital stock and
retained earnings 713,600 904,200
Total liabilities and
stockholders' Equity $1,419,500 $1,754,100
Annual sales $ 931,300 $1,506,700
Rate of gross profit on sales 30% 40%
Current Ratio = Current assets/Current liabilities
Toulouse Co. Lautrec Co.
Current Ratio $910,000/$301,600 $1,140,000/$350,600
= 3.02 3.25
Quick Ratio = (Current assets - Inventory)/Current liabilities
Toulouse Co. Lautrec Co.
Quick Ratio $910,000-570,000/$301,600 $1,140,000-518,000/$350,600
= 1.13 1.77
Operating Cash Flow Ratio = Cash/Current liabilities
Toulouse Co. Lautrec Co.
Operating Cash Flow Ratio = $120,000/$301,600 $320,000/$350,600
= 0.39 0.91
Days Receivable outstanding = Average receivables/Sales * 365
Toulouse Co. Lautrec Co.
Days Receivable Outstanding $220,000/$931,300 $302,000/$1,506,700
* 365 days
= 86 days 73 days
Pedro, not a dealer, sold real property that he owned with an adjusted basis of $120,000 and encumbered by a mortgage for $56,000 to Pat in 2018. The terms of the sale required Pat to pay $28,000 cash, assume the $56,000 mortgage, and give Pedro 11 notes for $12,000 each (plus interest at the Federal rate). The first note was payable two years from the date of sale, and each succeeding note became due at two-year intervals. Pedro did not elect out of the installment method for reporting the transaction. If Pat pays the 2020 note as promised, what is the recognized gain to Pedro in 2020 (exclusive of interest)
Answer:
$64,000
Explanation:
Calculation for the recognized gain to Pedro in 2020
First step is to calculate the Realized gain
Realized gain=($120,000+$12,000+$28,000+$56,000-$120,000)
Realized gain=$96,000
Second step is to calculate the Contract Price
Contract Price=$216,000-$56,000
Contract Price=$160,000
Now let calculate the recognized gain to Pedro in 2020
Recognized gain=$160,000-$96,000
Recognized gain=$64,000
Therefore the recognized gain to Pedro in 2020 is $64,000
Nadine Chelesvig has patented her invention. She is offering a patent manufacturer two contracts for the exclusive right to manufacture and market her product. Plan A calls for an immediate single lump payment to her of $35,000. Plan B calls for an annual payment of $1,200 plus a royalty of $0.40 per unit sold. The remaining life of the patent is 10 years. Nadine uses a MARR of 7 %/year.
a. What must be the uniform annual sales volume of the product for Nadine to be indifferent between the contracts, based on a present worth analysis?
b. If the sales volume is below the volume determined in (a), which contract would the manufacturer prefer?
Answer:
A) 9458 units
B) She would prefer the one with the single lump payment of $35,000 because the present value of the other one would increase with an increase in the units sold.
Explanation:
A) To calculate the uniform annual sales volume based on a present worth analysis, we will make use of the formula for present value of annuity.
Thus;
P = PMT × (1 - ((1/(1 - rⁿ))/r
From the question, we are given;
P = $35,000
PMT = (1200 + 0.4x)
r = 7% = 0.07
n = 10
Thus, Plugging in the relevant values, we have;
(1200 + 0.4x)((1 - (1/(1 + 0.07)^10))/0.07 = 35000
This gives;
(1200 + 0.4x) × 7.0236 = 35000
(1200 + 0.4x) = 35000/7.0236
(1200 + 0.4x) = 4983.2
0.4x = 4983.2 - 1200
0.4x = 3783.2
x = 3783.2/0.4
x = 9458 units
B) She would prefer the one with the single lump payment of $35,000 because the present value of the other one would increase with an increase in the units sold.
The accountant for Bellows Corp. was preparing a bank reconciliation as of April 30. The following items were identified:
Bellows' book balance $28,750
Outstanding checks 900
Interest earned on checking account 80
Customer's NSF check returned by the bank 381
In addition, Bellows made an error in recording a customer's check; the amount was recorded in cash receipts as $370; the bank recorded the amount correctly as $730.
Required:
What amount will Bellows report as its adjusted cash balance at April 30, 2013?
Answer:
$27,909
Explanation:
Bellows Corp.
Bank Reconciliation as at April 30, 2013
Unadjusted book balance $28,750
Less:
Outstanding checks $900
NSF checks $381
Add:
Interest earned on checking account $80
Error correction[$730 - $370] $360
Adjusted book balance $27,909
Bob is a farmer and is required to use the accrual method. At the beginning of the year, Bob has inventory, including livestock held for resale, amounting to $10,000. During the year, Bob purchased livestock totaling $3,000. Bob's ending inventory was $4,000. Bob's net sales for the year totaled $17,000. What is Bob's gross profit for the current year
Answer:
$3,000
Explanation:
Gross Profit = Sales - Cost of Sales
Prepare a Trading Account for Bob to determine gross profit.
Swifty Company has just received the August 31, 2020, bank statement, which is summarized below.
County National Bank Disbursements Receipts Balance
Balance, August 1 $12,939
Deposits during August $44,468 57,407
Note collected for depositor,
including $55 interest 1,436 58,843
Checks cleared during August $47,645 11,198
Bank service charges 28 11,170
Balance, August 31 11,170
The general ledger Cash account contained the following entries for the month of August.
Cash
Balance, August 1 13,879 Disbursements in August 48,208
Receipts during August 48,335
Deposits in transit at August 31 are $5,248, and checks outstanding at August 31 total $1,450. Cash on hand at August 31 is $428. The bookkeeper improperly entered one check in the books at $147 which was written for $165 for supplies (expense); it cleared the bank during the month of August.
Required:
Prepare a bank reconciliation dated August 31, 2020, proceeding to a correct balance and adjusting entries.
Answer:
A. Correct cash balance $15,396
Correct cash balance $15,396
B. Aug 31 2020
Dr Cash $1,436
Cr Notes receivable $1,381
Cr Interest revenue $55
Aug 31, 2020
Dr Bank service charges $28
Cr Cash $28
Aug 31, 2020
Dr Supplies expenses $18
Cr Cash $18
Explanation:
A. Preparation of a bank reconciliation dated August 31, 2020
Bank reconciliation
Balance as per bank statement august 31, 2020 11,170
Add Cash on hand $428
Add Deposit in transit $5,248
Less: Outstanding checks ($1,450)
Correct cash balance $15,396
Balance as per books august 31, 2020 (13,879+48,335-48,208) $14,006
Add: note and interest collected $1,436
Less:Bank service charges ($28)
Less Understated for supplies ($18)
($165+$147)
Correct cash balance $15,396
B. Preparation of the adjusting entries.
Aug 31 2020
Dr Cash $1,436
Cr Notes receivable $1,381
($1,436-$55)
Cr Interest revenue $55
Aug 31, 2020
Dr Bank service charges $28
Cr Cash $28
Aug 31, 2020
Dr Supplies expenses $18
Cr Cash $18
($165+$147)
Before making month-end adjustments, net income of Bobwhite Company was $232,500 for March. Adjusting entries are necessary for the following items:
Depreciation for the month of March: $4,400.
Rental income accrued during March, tenant to pay in April: $910.
Supplies used in March: $310.
Fees earned in March that had been collected in advance: $3,700.
After recording these adjustments, net income for March is:_________
a. $112,400.
b. $113,620.
c. $117,000.
d. $110,800.
Answer:
Net income after adjustment $225,000
Explanation:
The various adjustments are effected below:
$ Note
Net income before adjustment 232,500
Depreciation (4,400) 1
Rental income 910 2
Supplies (310) 3
Fees earned (3,700) 4
Net income after adjustment 225,000
Notes
1 Depreciation represents a consumption of asset hence it is an expense which reduces profit .So, it deducted
2. Rental income accrued implies income earned but not received. So we need to record it for the period it was earned, hence we add it.
3. Supplies used represents consumption of assets, i.e an expense. So, we deduct it from the income.
4. The income received in advance represents unearned income . This would be deducted from the net income
What other information do i need to help me make a career decision?
Answer:
How to make a decision
Here are some steps you can take to help you make a decision that involves your career:
Identify and investigate the decision.
Set aside time to think.
Consider your options.
Remember your values.
Ask for a different perspective.
Evaluate your plan.
Explanation:
The following information applies to the questions displayed below.] McAllister, Inc. employs a normal costing system. The following information pertains to the year just ended.
Total manufacturing costs were $1,310,000.
Cost of goods manufactured was $1,275,500.
Applied manufacturing overhead was 30% of total manufacturing costs.
Manufacturing overhead was applied to production at a rate of 80 percent of direct-labor cost
Work-in-process inventory on January 1 was 75% of work-in-process inventory on December 31.
Requlred:
1. Compute the total direct-labor cost for the year.
2. Calculate the total cost of direct material used during the year
3. Compute the value of the company's work-in-process inventory on December 31.
Answer and Explanation:
The computation is shown below:
Given that
Total manufacturing costs = $1,310,000
Cost of goods manufactured = $1,275,500
Applied manufacturing O.H = 30% of manufacturing costs
= 0.3 of 1,310,000
= $393,000
(1)
The direct labor cost is
80% of direct labor cost = Applied overhead
So direct labor cost = $393,000 ÷ 80%
= $491,250
(2) The total cost of direct material is
As we know that
Total manufacturing costs = Direct materials + Direct labor + Applied Overhead
So,
Direct materials = Total manufacturing costs - Direct labor - Applied overhead
= $1,310,000 - $491,250 - $393,000
= $425,750
(3)
The Ending work in process inventory is
As we know that
Cost of goods manufactured = Beginning work in process + Total manufacturing costs - Ending work in process
Le us s assume X to be ending work in process
Beginning work in process = X × 75% = 0.75X
Now
$1,275,500 = 0.75X + $1,310,000 - X
X = $138,000
I have learned that the tools and equipment in preparing sandwich are important because
You are offered an investment that will pay you $250 in one year, $520 the next year, and $750 at the end of the third year. How much is this investment worth if the interest rate is 11%?
Answer: $1,196
Explanation:
Based on the information and the values that are provided in the question, the worth of the investment of the rate of interest is 11% will be calculated as:
=(250 / 1.11) + (520 / 1.11²) + (750 / 1.11³)
= 225.23 + 422.04 + 548.39
= $1,195.66
= $1196 approximately
The worth of the investment will be $1196.
Find the following values. Compounding/discounting occurs annually. Do not round intermediate calculations. Round your answers to the nearest cent. a. An initial $400 compounded for 10 years at 5%. $ b. An initial $400 compounded for 10 years at 10%. $ c. The present value of $400 due in 10 years at 5%. $ d. The present value of $2,515 due in 10 years at 10% and 5%. Present value at 10%: $ Present value at 5%: $
Answer:
$651.56
$1037.50
$245.57
$969.64
$1543.99
Explanation:
The formula for calculating future value:
FV = P (1 + r)^n
FV = Future value
P = Present value
R = interest rate
N = number of years
a. 400 x (1.05)^10 = $651.56
b. 400 x (1.1)^10 = $1037.50
formula for determining present value is
PV = f / (1 + r)^n
$400/ (1.05)^10 = $245.57
d. $2515 / (1.1)^10 = $969,64
$2515 / (1.05)^10 = $1543.99
LUVFINANCE, Inc. is estimating its WACC. It is operating at its optimal capital structure. Its outstanding bonds have a 12 percent coupon, paid semiannually, a current maturity of 17 years, and sell for $1,162. It has 100,000 bonds outstanding. The firm can issue new 20-year maturity semiannual bonds at par but will incur flotation costs of $50 per bond. The firm could sell, at par, $100 preferred stock that pays a 12 percent annual dividend that is currently selling for $120. The firm currently has 1,000,000 shares of preferred stock outstanding. Rollins' beta is 0.94, the risk-free rate is 3.72 percent, and the market risk premium is 6 percent. The common stock currently sells for $100 a share and there are 5,000,000 shares outstanding. The firm's marginal tax rate is 40 percent.
Required:
What is the WACC?
Solution :
Given :
The cost of the debt is yield to the maturity of the bonds.
The yield on the bond is 10%
The tax rate is 40%
After the tax cost of the debt = 10 ( 1- 0.4 )
= 6 %
Add floatation cost at the rate of 5% = 11%
Cost of the preferred stock = [tex]$\frac{\text{dividend}}{\text{price}}$[/tex]
= [tex]$\frac{120}{12}$[/tex] = 10%
The cost of equity = risk free rate + β x market risk premium
= 3.72 + 0.94 x 6
= 9.36%
WACC is weighted average of the individual securities :
Particulars Value per No. of Market value Weight Cost of Product
security securities security
Bonds 1162 100,000 116,200,000 0.1578 11 1.73621298
Preferred 120 1,000,000 120,000,000 0.1629 10 1.6299918
stocks
Equity 100 5,000,000 500,000,000 0.6791 9.36 6.356968
736,200,000 1 WACC 9.7231730
Therefore, WACC of the firm is 9.72%