Answer:
$88,000
Explanation:
Calculation to determine how much will Clark report as interest expense in year 8
First step is to calculate the total interest expense for the year
Total interest expense = ($1,500,000 x 6%) + ($1,000,000 x 7%)
Total interest expense = $90,000 + $70,000
Total interest expense=$160,000
Second step is to calculate the weighted average costs
Weighted average costs = $2,400,000 / 2
Weighted average costs= $1,200,000
Third step is to calculate the capitalize interests
Capitalize interests =$1,200,000 x 6%
Capitalize interests= $72,000
Now let calculate the interest expense in year 8 using this formula
Year 8 Interest expense=Total interests - Capitalized interests
Let plug in the formula
Year 8 Interest expense= $160,000 - $72,000
Year 8 Interest expense= $88,000
Therefore The amount that Clark will report as interest expense in year 8 is $88,000
The annual inventory of The Bike Shop Inc. shows the following information for mountain bikes: DATE QUANTITY COST TOTAL January 15 Beginning Inventory 80 $126 $10,080 March 20 Purchase 30 120 3,600 June 21 Purchase 20 126 2,520 October 12 Purchase 15 122 1,830 December 29 Purchase 10 122 1,220 Total available for sale 155 $19,250 If 36 mountain bikes were on hand on December 31, what is the value of the ending inventory using the LIFO method of inventory pricing
Answer:
$4,536
Explanation:
LIFO assumes that the units to arrive last will be sold first. Hence inventory valuation is based on the prices of earlier units.
Ending Inventory = 36 x $126 = $4,536
The value of the ending inventory using the LIFO method of inventory pricing is $4,536.
projects variable labor costs of $21,500 in March when 8,600 units are produced. If production is expected to drop to 8,000 units in April, what is the expected labor cost in April
Answer:
Total direct labor cost=$20,000
Explanation:
First, we need to calculate the direct labor cost per unit:
Direct labor cost per unit= total cost / number of units
Direct labor cost per unit= 21,500 / 8,600
Direct labor cost per unit= $2.5
Now, the total cost for 8,000 units:
Total direct labor cost= 2.5*8,000
Total direct labor cost=$20,000
Waterway Industries Recorded operating data for its Cheap division for the year. Waterway requires its return to be 10%. Sales $1600000 Controllable margin 88000 Total average assets 4400000 Fixed costs 100000 What is the ROI for the year
Answer:
See below
Explanation:
Given the above information, first we need to get the value of contribution margin , which is computed as;
Controllable margin = Contribution margin - Total direct fixed cost
$88,000 = Contribution margin - $100,000
Contribution margin = $88,000 + $100,000
Contribution margin = $188,000
Also,
Net income = Contribution margin - Total fixed expense
Net income = $188,000 - $100,000
Net income = $88,000
Return on investment = Net income ÷ Average operating assets
Return on investment = $88,000 ÷ $4,400,000
Return on investment = 2%
Therefore, the ROI for the year is 2%
When 24,000 units are produced, variable costs are $12.00 per unit. Therefore, when 18,000 units are produced ________. Group of answer choices variable unit costs will increase to $16.00 per unit variable costs will remain at $12.00 per unit variable costs will total $288,000 variable unit costs will decrease to $9.00 per unit
Answer: variable costs will remain at $12.00 per unit
Explanation:
Variable costs refers to the costs that change when there's a change in the quantity of the good that's produced.
Since when 24,000 units are produced, the variable costs are $12.00 per unit. It should be noted that even when 18,000 units are produced, the variable cost will still remain $12.00 per unit.
Slipper Company sold a productive asset, a machine, for cash. It originally cost Slipper $29,000. The accumulated depreciation at the date of disposal was $24,000. A gain on the disposal of $2,900 was reported. What was the asset's selling price
Answer:
$7,900 = selling price
Explanation:
Giving the following information:
Original cost= $29,000
Accumulated depreciation= $24,000
Gain= $2,900
First, we will determine the book value:
Book value= original cost - accumulated depreciation
Book value= 29,000 - 24,000 = $5,000
Now, the selling price:
Gain/loss= selling price - book value
2,900= selling price - 5,000
$7,900 = selling price
A T-bill has a discount Ask quote of 4.80 with 150 days to maturity and sells for $9800. The bill has a face value of $10,000. What is its Ask yield
Answer: 4.97%
Explanation:
Yield = (Face value / Purchase price - 1) * 365 days / Days to maturity
= (10,000 / 9,800 - 1) * 365 / 150
= 0.0204081632653 * 365/150
= 4.97%
MacGyver Company bought equipment on January 3, 20X1, for $34,100. At the time of purchase, the equipment was estimated to have a useful life of 6 years and a salvage value of $620. Using the straight-line method, the amount of one year's depreciation is
Answer:
$5,580
Explanation:
Straight line method charges a fixed amount of depreciation for each and every year the asset is in use in the business.
Depreciation expense = (Cost - Salvage Amount) ÷ Estimated useful life
therefore,
Depreciation expense = ($34,100 - $620) ÷ 6
= $5,580
Using the straight-line method, the amount of one year's depreciation is $5,580.
Rate of Return if State Occurs Stock State of Economy Probability of State of Economy Stock A Stock B C Boom
Answer:
mmmmmmmmmmmmmmmmmmm?
Martin's coin collection contains hundred 1960 silver dollars. Her grandparents purchased them at their face value ($50 each) in 1960. These coins have appreciated by 3.2 percent annually. How much will the collection be worth in 2020
Answer:
FV= $33,094.2
Explanation:
Giving the following information:
Present value (PV)= 50*100= $5,000
Number of periods (n)= 2020 - 1960= 60 years
Apreciation rate (g)= 3.2% = 0.032
To calculate the value of the collection in 2020, we need to use the following formula:
Future value= PV*(1 + g)^n
FV= 5,000*(1.032^60)
FV= $33,094.2
Riemer, Inc. has four departments. Information about these departments is listed below. Maintenance is a service department. If allocated maintenance cost is based on floor space occupied by each of the other departments, compute the amount of maintenance cost allocated to the Cutting Department.
Maintenance Cutting Assembly Packaging
Direct costs $20,000 $32,000 $72,000 $47,000
Sq. ft. of space 600 1,100 2,100 3,050
No. of employees 4 4 18 6
a. $3,520.
b. $5,000.
c. $20,000.
d. $3,874.
Answer:
a. $3,520.
Explanation:
The computation of the amount of maintenance cost allocated to the Cutting Department is given below:
= maintenance cost ÷ total floor space excluding maintenance cost
= $20,000 ÷ 6,250 × 1,100
= $3,520.
hence, the option is A.$3,520.
The 6,250 comes from
= 1,100 + 2,100 + 3,050
= 6,250
If a firm sells 6 units at a price of $6 with a total cost of $7, what is the firm's profit from selling 6 units
Answer:
$6 (loss)
Explanation:
Profit per unit = Selling Price - Cost Price
= $6 - $7
= - $1
Total profit / (loss) = - $1 x 6 = ($6)
Conclusion
The result is a loss simply because the Cost is higher than the Selling Price
Company FIN3610-FTRA has a six-year project that requires an initial investment of $30,000. Every year, the project will pay fixed costs of $20,000 to produce the product. Also, we know that the variable costs per unit will be $36, and the price per unit will be $58. The required return is 10%. Please calculate the financial break-even quantity for this project. (Do not round intermediate calculations and round your answer to 3 decimal places, e.g., 32.161.)
Answer:
909.09
Explanation:
Breakeven quantity are the number of units produced and sold at which net income is zero
Breakeven quantity = fixed cost / price – variable cost per unit
$20,000 / 58 - 36 = 909.09
Granger Printing currently uses a manufacturing facility costing $560,000 per year; 90% of the facility's capacity is currently being used. A start-up business has proposed a plan that would utilize the other 10% of the facility and increase the overall costs of maintaining the space by 11%. If the incremental method were used, what amount of cost would be allocated to the start-up business
Answer:
the amount of cost that allocated is $61,600
Explanation:
The computation of the amount of cost that allocated is shown below;
= The costing of the manufacturing facility × increase percentage of the overall cost for maintaining the space
= $560,000 × 11%
= $61,600
hence, the amount of cost that allocated is $61,600
he appropriate discount rate for the following cash flows is 8 percent compounded quarterly. Year Cash Flow 1 $700 2 700 3 0 4 1,100 What is the present value of the cash flows
Answer:
Thus, the present value is $2045.52.
Explanation:
Use the below formula to find the present value:
Present value = FV ÷ (1 + r/4)^(n*4)
Present value :
[tex]=\frac{700}{(1 + \frac{0.08}{4} )^{1 \times 4} } + \frac{700}{(1 + \frac{0.08}{4} )^{2 \times 4} } + \frac{0}{(1 + \frac{0.08}{4} )^{3 \times 4} } +\frac{1100}{(1 + \frac{0.08}{4} )^{4 \times 4} } \\ \\= \frac{700}{1.0824}+\frac{700}{1.1716} +0+\frac{1100}{1.3727} \\= 2045.52[/tex]
Thus, the present value is $2045.52.
The Get Well Health Care Company directors noticed a significant drop in the company’s customer service ratings. It was determined that an Agile Lean approach to improving the methods for receiving, processing, and resolving customer questions and complaints as needed. The CEO of the company is anxious to get the effort underway. You have been appointed to lead this effort. You are told by the CEO when she appoints you that the employees of the customer service unit are unaware of the change that is to occur, nor are they aware of the drop in the customer service ratings. You decide to use the ADKAR Model to assist the employees in this unit address the change.
In this assignment, you are to list and explain each step of the ADKAR Model. You are to then describe what action(s) you would take under each of these steps to help the employees of the customer service unit navigate this change.
Answer:
ADKAR is
A : is the awareness to need a change
D : is the desire to change
K : is the knowledge of how to change
A : is the ability to change
R : is the reinforcement to change
Explanation:
In order to improve methods of customer service a change is required in the Get Well Health Care Company and I will be using ADKAR model to implement this change.
ADKAR is
A : is the awareness to need a change
D : is the desire to change
K : is the knowledge of how to change
A : is the ability to change
R : is the reinforcement to change
Firstly the change is required in Get Well Heath Care Company because there is a significant drop in customer service ratings which will make the company lose business.The change is desired because the company and its employees wants to continue to provide better health care to its customers.The employees needs to understand how to satisfy the customer with their service to get a better customer service rating.Are the employees able to implement this change? are they enough motivated to provide a better customer service?Are the employees going to reinforce the change implemented or will they go back to their old practices of customer service?The margin of safety ratio is computed as actual sales divided by break-even sales. is used to determine the break-even point. indicates what percent decline in sales could be sustained before the company would operate at a loss. measures the ratio of fixed costs to variable costs.
Answer:
indicates what percent decline in sales could be sustained before the company would operate at a loss.
Explanation:
Since, Margin of safety ratio = Expected Sales - Break even sales
therefore,
The correct statement is : The margin of safety ratio indicates what percent decline in sales could be sustained before the company would operate at a loss.
Weekly News, Inc., publishes a weekly newspaper 52 weeks out of the year. The company sells one-year subscriptions to its newspaper for $52 collected in advance. During its first year of operations, the company sold subscriptions to 1,000 customers. By the end of that first year, on average, customers had received 13 weekly copies. What is the amount of subscription revenue that should be reported on the income statement for that first year of operations
Answer:
13000
Explanation:
13*1000
Allocating Joint Costs Using the Net Realizable Value Method
A company manufactures three products, L-Ten, Triol, and Pioze, from a joint process. Each production run costs $12,300. None of the products can be sold at split-off, but must be processed further. Information on one batch of the three products is as follows:
Product Gallons Further Processing
Cost per Gallon Eventual Market
Price per Gallon
L-Ten 3,200 $0.70 $2.10
Triol 3,700 1.10 5.40
Pioze 2,000 1.50 6.20
Required:
1. Allocate the joint cost to L-Ten, Triol, and Pioze using the net realizable value method. Round your allocation percentages to four decimal places and round the allocated costs to the nearest dollar.
Joint Cost
Grades Allocation
L-Ten $
Triol
Pioze
Total $
2. What if it cost $2.10 to process each gallon of Triol beyond the split-off point? How would that affect the allocation of joint cost to the three products? Round your allocation percentages to four decimal places and round the allocated costs to the nearest dollar.
Joint Cost
Grades Allocation
L-Ten $
Triol
Pioze
Total $
Answer:
Allocating Joint Costs Using the Net Realizable Value Method
1. Joint Cost
Grades Allocation
L-Ten $1,850
Triol 6,569
Pioze 3,881
Total $12,300
2. Joint Cost
Grades Allocation
L-Ten $2,112
Triol 5,756
Pioze 4,432
Total $12,300
Explanation:
a) Data and Calculations:
Cost of each production run = $12,300
Product Gallons Further Processing Eventual Market Net Realizable
Cost per Gallon Price per Gallon Value
L-Ten 3,200 $0.70 $2.10 $4,480
Triol 3,700 1.10 5.40 15,910
Pioze 2,000 1.50 6.20 9,400
Total 8,900 $29,790
Allocation of join cost:
L-Ten = $4,480/$29,790 * $12,300 = $1,850
Triol = $15,910/$29,790 * $12,300 = $6,569
Pioze = $9,400/$29,790 * $12,300 = $3,881
Product Gallons Further Processing Eventual Market Net Realizable
Cost per Gallon Price per Gallon Value
L-Ten 3,200 $0.70 $2.10 $4,480
Triol 3,700 2.10 5.40 12,210
Pioze 2,000 1.50 6.20 9,400
Total 8,900 $26,090
Allocation of join cost:
L-Ten = $4,480/$26,090 * $12,300 = $2,112
Triol = $12,210/$26,090 * $12,300 = $5,756
Pioze = $9,400/$26,090 * $12,300 = $4,432
You are deciding where to eat dinner tonight. Eating at Soup Plantation costs $15 and it gives you $20 worth of benefit. Eating at Del Taco costs $5 and gives you $7 worth of value. What is the opportunity cost of eating at Soup Plantation
Answer: $7
Explanation:
Due to scarcity of resources, economic agents have to make choices and the real cost of the forgone alternative when a choice is made is referred to as the opportunity cost.
Based on the information given, the opportunity cost of eating at Soup Plantation will be the $7 worth of value that will be gotten when one eats at Del Taco.
Date Transaction Number of Units Unit Cost Apr. 1 Beginning inventory 500 $2.40 Apr. 20 Purchase 400 2.50 700 units of inventory were sold during the month. Ending inventory assuming FIFO would be:
Answer:
Ending inventory= $500
Explanation:
Giving the following information:
Apr. 1 Beginning inventory 500 $2.40
Apr. 20 Purchase 400 2.50
700 units of inventory were sold during the month
First, we need to determine the number of units in ending inventory:
Ending inventory in units= 900 - 700= 200
Under the FIFO (first-in, first-out) method, the ending inventory is calculated using the cost of the last units incorporated into the inventory.
Ending inventory= 200*2.5
Ending inventory= $500
Helen Ming receives a travel allowance of $120 each week from her company for time away from home. If this allowance is taxable and she has a 28 percent income tax rate, what amount will she have to pay in taxes for this employee benefit
Answer:
$1,747.2
Explanation:
Calculation to determine what amount will she have to pay in taxes for this employee benefit
First step is to determine the Annual travel allowance
Using this formula
Annual travel allowance=Weekly allowance × 52 weeks
Let plug in the formula
Annual travel allowance=$120 × 52 weeks
Annual travel allowance=$6,240
Now let determine the Annual tax
Using this formula
Annual tax=Annual travel allowance × Tax rate
Let plug in the formula
Annual tax=$6,240 × 0.28
Annual tax=$1,747.2
Therefore the amount that she will have to pay in taxes for this employee benefit is $1,747.2
Mary runs over a deer with her car. The ACV of her vehicle is $7,250. To repair the damages caused in the accident, it will cost $4,375. What will the insurer likely pay Mary for this claim, assuming that her COLLISION deductible is $500, and her OTHER THAN COLLISION deductible is $200
Answer: $4175
Explanation:
The Other Than Collision coverage is the payment to repair a vehicle when the damage caused isn't when one collides with another vehicle.
In this case, since Mary runs over a deer with her car, we'll deduct the other than collision deductible from her cost of the repair and this will be:
= $4375 - $200
= $4175
The insurer will pay Mary $4175
The stock in Pal-Maine Foods has a beta of .85. The expected return on the market is 11.50 percent and the risk-free rate is 2.85 percent. What is the required return on the company's stock?
Answer:
the required rate of return is 10.20%
Explanation:
The computation of the required rate of return is shown below;
We know that
= risk free rate of return + beta × (market rate of return - risk free rate of return)
= 2.85% + 0.85 × (11.50% - 2.85%)
= 2.85% + 7.3525%
= 10.20%
hence, the required rate of return is 10.20%
A salt mine you inherited will pay you $25,000 per year for 25 years, with the first payment being made today. If you think a fair return on the mine is 7.5%, how much should you ask for it if you decide to sell it
Answer: $299574.17
Explanation:
From the question, we are given the information that a salt mine inherited will pay $25,000 per year for 25 years, with the first payment being made today. If the fair return on the mine is 7.5%, the amount that should be asked for it's to be sold goes thus:
Periodic amount = $25000
Return on mine = 7.5%
Number of years = 25
Selling amount will then be:
= 25000 + [-PV(7.50%,24,25000,0)]
= 25000 + [-PV(0.075,24,25000,0]
= $299574.17
=
On July 1, 2020, Swifty Company purchased for $6,120,000 snow-making equipment having an estimated useful life of 5 years with an estimated salvage value of $255,000. Depreciation is taken for the portion of the year the asset is used. Complete the form below by determining the depreciation expense and year-end book values for 2020 and 2021 using the
1. sum-of-the-years'-digits method.
2. double-declining balance method.
2020 2021
Sum-of-the-Years'-Digits Method
Equipment $6,120,000 $6,120,000
Less: Accumulated Depreciation
Year-End Book Value
Depreciation Expense for the Year
Double-Declining Balance Method
Equipment $6,120,000 $6,120,000
Less: Accumulated Depreciation
Year-End Book Value
Depreciation Expense for the Year
Assume the company had used stright line depreciation during 2020 and 2021. During 2022, the company determined that the equiptment would be useful to the company for only one more year beyond 2022. Salvage value is estimated at 20000. Compute the amount of depreciation expense for the 2022 income statement.
Assume the company had used straight-line depreciation during 2020 and 2021. During 2022, the company determined that the equipment would be useful to the company for only one more year beyond 2022. Salvage value is estimated at $340,000. What is the depreciation base of this asset?
Answer:
Swifty Company
1. Sum-of-the-years'-digits method:
2020 2021
Equipment $6,120,000 $6,120,000
Less: Accumulated Depreciation 977,500 2,541,500
Year-End Book Value $5,143,500 $3,578,500
Depreciation Expense for the Year 977,500 $1,564,000
2. Double-declining balance method:
2020 2021
Equipment $6,120,000 $6,120,000
Less: Accumulated Depreciation 1,224,000 3,182,400
Year-End Book Value $4,896,000 $2,937,600
Depreciation Expense for the Year 1,224,000 $1,958,400
Straight-line Method:
3. The amount of depreciation expense for the 2022 income statement is:
= $2,170,250.
4. In 2022, the depreciation base of this asset is:
= $4,020,500
Explanation:
a) Data and Calculations:
July 1, 2020: Cost of snowmaking equipment = $6,120,000
Estimated salvage value of the equipment = 255,000
Depreciable amount of the equipment = $5,865,000
Estimated useful life of the equipment = 5 years
Annual depreciation expense = $1,173,000 ($5,865,000/5)
Sum-of-the-Years'-Digits Method =15 (5+4+3+2+1)
Calculation of depreciation expense:
2020 = $977,500 (5/15 * $5,865,000)/2
2021 = $1,564,000 (4/15 * $5,865,000)
2020 2021
Equipment $6,120,000 $6,120,000
Less: Accumulated Depreciation 977,500 2,541,500
Year-End Book Value $5,143,500 $3,578,500
Depreciation Expense for the Year 977,500 $1,564,000
Double-Declining Balance Method (100/5 * 2) = 40%
Calculation of depreciation expense:
2020 = $1,224,000 (40% * $6,120,000)/2
2021 = $1,958,400 (40% * $4,896,000)
2020 2021
Equipment $6,120,000 $6,120,000
Less: Accumulated Depreciation 1,224,000 3,182,400
Year-End Book Value $4,896,000 $2,937,600
Depreciation Expense for the Year 1,224,000 $1,958,400
Straight-line method:
Annual depreciation expense = $1,173,000
2020: Depreciation expense = $586,500
2021: Depreciation expense = $1,173,000
2022: Depreciable amount = $4,340,500 ($4,360,500 - $20,000)
Depreciation expense = $2,170,250 ($4,340,500/2)
2020 2021 2022
Equipment $6,120,000 $6,120,000 $6,120,000
Less: Accumulated Depreciation 586,500 1,759,500 3,929,750
Year-End Book Value $5,533,500 $4,360,500 $2,190,250
Depreciation Expense for the Year 586,500 1,173,000 2,170,250
Straight-line method:
Annual depreciation expense = $1,173,000
2020: Depreciation expense = $586,500
2021:
Depreciation expense = $1,173,000
Accumulated depreciation = $1,759,500 ($586,500 + $1,173,000)
Year-End Book Value $4,360,500 ($6,120,000 - $1,759,500)
2022 Estimated Salvage Value = $340,000
2022: Depreciation basis = $4,020,500 ($4,360,500 - $340,000)
Depreciation expense = $2,010,250 ($4,020,500/2)
Chester's balance sheet has $77,842,000 in equity. Further, the company is expecting net income of 3,000,000 next year, and also expecting to issue $4,000,000 in new stock. If there are no dividends paid what will beChester's book value
Answer:
$84,842,000
Explanation:
The book value is total assets less total liabilities
Book value = initial equity + equity issued + net income
$77,842,000 + $4,000,000 + $3,000,000 = $84,842,000
When actions by individuals in a organization are directed toward the goal of furthering their own self-interests, it is termed as
Answer:
Organizational politics.
Explanation:
An interest group can be defined as a group of people sharing common aims, ideas and concerns, which seeks to influence government or a public policy.
This ultimately implies that, the interest groups consists of individuals who are only concerned about influencing public policy of the government on the basis of a particular common aim and interest.
Similarly, when actions by individuals in a organization are directed toward the goal of furthering their own self-interests such as being promoted, traveling to get estacodes, training, courses, etc., it is generally termed as organizational politics. Thus, you will see such employees (individuals) getting closer to top the executive management and patronizing them, in order to be in their good books.
The theory of constraints says thatqueues should not be allowed to form in the plant.bottleneck resources should be idle whenever possible.the bottleneck is the most critical resource.labor expense reduction should be the primary goal.
Answer:
the bottleneck is the most critical resource
Explanation:
The constraint theory represent that the bottleneck would be considered as the most critical resources as it decided how much long the process could be delayed and due to this the objectives and the goals of the organization would be highly impacted
Therefore as per the given situation, the above represent the answer
You consider buying a share of stock at a price of $24. The stock is expected to pay a dividend of $1.32 next year, and your advisory service tells you that you can expect to sell the stock in 1 year for $27. The stock's beta is 0.6, rf is 10%, and E[rm] = 20%. What is the stock's abnormal return?
Answer:
2%
Explanation:
Actual return = [(Dividend + Capital gain) / Purchase price] * 100
= [($1.32 + $27 - $24) / $24] * 100
= 18%
Expected return = rf + Beta*(E(rm) - rf)
= 10% + 0.6*(20% - 10%)
= 16%
Abnormal return = Actual return - Expected return
Abnormal return = 18% - 16%
Abnormal return = 2%
The financing of long term assets should be made from
Answer:
The main sources constituting long-term financing are shares, debentures, and debts form banks and financial institutions.