In year 1, Heron Corp. has depreciation expense for income statement purposes of $10,000. The depreciation deduction on the tax return was $14,000. The enacted tax rate is 30%. Heron's pretax income for the year was $80,000, and its taxable income was $76,000. If this is the only difference between pretax income and taxable income, the journal entry to record tax expense for the year would include which of the following entries?
a. debit tax expense of $22,800.
b. credit deferred tax liability of $4,000.
c. debit tax expense of $24,000.
d. credit taxes payable of $22,800.
e. credit deferred tax liability of $1,200.
Answer:
The correct options are as follows:
c. debit tax expense of $24,000.
d. credit taxes payable of $22,800.
e. credit deferred tax liability of $1,200.
Explanation:
In the question, we are given the following:
Enacted tax rate = 30%
Pretax income for the year = $80,000
Taxable income = $76,000
The following can now be calculated:
Tax expense = Pretax income for the year * Enacted tax rate = $80,000 * 30% = $24,000
Tax payable = Taxable income * Enacted tax rate = $76,000 * 30% = $22,800
Excess of Tax expense over Tax payable = Tax expense - Tax payable = $24,000 - $22,800 = $1,200
The above will then be recorded as follows:
Debit tax expense of $24,000.
Credit taxes payable of $22,800.
Credit deferred tax liability of $1,200.
Therefore, the correct options are as follows:
c. debit tax expense of $24,000.
d. credit taxes payable of $22,800.
e. credit deferred tax liability of $1,200.
If you purchased a $5000 bond that matures in 2 years and pays a 10% annual coupon, what’s the amount of the check the company will send you at the end of 2 years?
For the same bond mentioned above, what’s the total amount of interest you would have earned after the bond matures?
Answer:
Ha. I have no idea.
Explanation:
Seriously I don't know. This could help but probably not.
Question 7 (4 points)
Saved
Which of the following inestments would be considered the most liquid?
Question 7 options:
Real Estate
A one year CD
A standard savings account
A 401k
Steve's Outdoor Company purchased a new delivery van on January 1 for $47,000 plus $4,000 in sales tax. The company paid $13,000 cash on the van (including the sales tax), with the $38,000 balance on credit at 8 percent interest due in nine months (on September 30). On January 2, the company paid cash of $900 to have the company name and logo painted on the van. On September 30, the company paid the balance due on the van plus the interest. On December 31 (the end of the accounting period), Steve's Outdoor recorded depreciation on the van using the straight-line method with an estimated useful life of 5 years and an estimated residual value of $4,700.
Answer:
Steve's Outdoor Company purchased a new delivery van on January 1 for $47,000 plus $4,000 in sales tax. The company paid $13,000 cash on the van (including the sales tax), with the $38,000 balance on credit at 8 percent interest due in nine months (on September 30).
January 1, 202x, delivery van purchased
Dr Vehicles 51,000
Cr Cash 13,000
Cr Notes payable 38,000
The sales tax increases the asset's historical cost
On January 2, the company paid cash of $900 to have the company name and logo painted on the van.
January 2, 202x, company's logo was painted on the delivery van
Dr Vehicles 900
Cr Cash 900
On September 30, the company paid the balance due on the van plus the interest.
September 30, 202x, notes payable cancelled
Dr Notes payable 38,000
Dr Interest expense 2,280
Cr Cash 40,280
On December 31 (the end of the accounting period), Steve's Outdoor recorded depreciation on the van using the straight-line method with an estimated useful life of 5 years and an estimated residual value of $4,700.
December 31, 202x, depreciation expense
Dr Depreciation expense 9,400
Cr Accumulated depreciation, vehicles 9,400
Depreciable value = $51,700 - $4,700 = $47,000
Depreciation expense per year = $47,000 / 5 = $9,400
Sandhill Corporation was organized on January 1, 2019. During its first year, the corporation issued 1,900 shares of $50 par value preferred stock and 109,000 shares of $10 par value common stock. At December 31, the company declared the following cash dividends: 2019, $5,950; 2020, $13,800; and 2021, $28,000. (a) Show the allocation of dividends to each class of stock, assuming the preferred stock dividend is 7% and noncumulative.
Answer:
Sandhill Corporation
Allocation of dividends to each class of stock:
Year Total Dividends Preferred Stock Common Stock
2019 $5,950 $5,950 $0
2020 $13,800 $6,650 $7,150
2021 $28,000 $6,650 $21,350
Explanation:
a) Data and Calculations:
7% Preferred stock, $50 par value: Issued 1,900 = $95,000
Common stock, $10 par value: Issued 109,000 = $1,090,000
Dividends declared at December 31:
Year Dividends 7% Preferred Common Stock
2019 = $5,950 $6,650 Paid $5,950 $0
2020 = $13,800 $6,650 Paid $6,650 $7,150
2021 = $28,000 $6,650 Paid $6,550 $21,350
b) The preferred stock dividend is fixed at 7% of $95,000 yearly. Since it is noncumulative, the 2019 dividend will be limited to the dividends declared. For other years, the dividend for the preferred stock is fixed at $6,650 annually. Whatever remains after paying the preferred dividends is paid to the common stockholders.
The Assembly Department started the month with 25,300 units in its beginning work in process inventory. An additional 310,300 units were transferred in from the prior department during the month to begin processing in the Assembly Department. There were 30,300 units in the ending work in process inventory of the Assembly Department. How many units were transferred to the next processing department during the month
Answer:
305,300 units
Explanation:
The computation of the number of units that should be transferred to the next processing department is given below:
As we know that
Opening inventory +Transferred in inventory = Transferred out inventory + ending inventory
25,300 units + 310,300 units = Transferred out inventory + 30,300 units
So, the Transferred out inventory is
= 25,300 units + 310,300 units - 30,300 units
= 305,300 units
Materials are added at the beginning of a production process, and ending work in process inventory is 30% complete with respect to conversion costs. Use the information provided to complete a production cost report using the weighted-average method.
Costs to Account For
Beginning inventory: materials $9,000
Beginning inventory: conversion 18,000
Direct material 39,000
Direct labor 75,000
Applied overhead 36,355
Total costs to account for $177,355
Units to Account For
Beginning work in process 6,000
Units started into production 18,000
Transferred out 19,000
Answer:
Production Cost Report
INPUTS
Units Costs
Beginning Inventory 6,000 $27,000
Started 18,000 $150,355
Total 24,000 $204,355
OUTPUTS
Completed and Transferred 19,000 $157,890
Ending Inventory 5,000 $19,465
Total 24,000 $177,355
Explanation:
Step 1 : Units in Ending Work in Progress
Units in Ending Work in Progress = 6,000 + 18,000 - 19,000 = 5,000 units
Step 2 : Equivalent Units
Materials = 19,000 x 100 % + 5,000 x 100% = 24,000 units
Conversion Costs = 19,000 x 100 % + 5,000 x 30% = 20,500 units
Step 3 : Cost per Equivalent units
Materials = ($9,000 + $39,000) ÷ 24,000 units = $2.00
Conversion Costs = ($18,000 + $75,000 + $36,355) ÷ 20,500 units = $6.31
Total = $2.00 + $6.31 = $8.31
Step 4 : Cost of units transferred and units in ending inventory
Cost of units transferred = $8.31 x 19,000 = $157,890
Cost of units in ending inventory = $2.00 x 5,000 + $6.31 x 1,500 = $19,465
Apple Inc. is starting a new project. It plans to manufacture new type of i-Phones that have a 3D screen effect. It expects these phones to be a great success and bring rapidly growing profits in the first few years. After that, it expects the competition from other phone companies to kick in which will reduce the growth of annual profits. The dividends on Apple's shares will be growing accordingly. Here is the exact schedule of expected future dividends: Most recently paid dividend is $3. Expected annual growth rate of dividends for the first 3 years is 50%. Expected annual growth rate of dividends after that is 14%. Discount rate for this company is 16%.
Calculate the price per share of stock of Apple Inc. (Increase decimal places for any intermediate calculations, from the default 2 to 6 or higher. Only round your final answer to TWO decimal places: for example, 100.23. DO NOT put "$" in your answer.)
Answer:
P0 = 385.121878 rounded off to 385.12
Explanation:
To calculate the market price of the stock today, we will use the two stage growth model of DDM. The two stage growth model calculates the values of the stock today based on the present value of the expected future dividends from the stock. The formula for price today under this model is,
P0 = D0 * (1+g1) / (1+r) + D0 * (1+g1)^2 / (1+r)^2 + ... + D0 * (1+g1)^n / (1+r)^n + [(D0 * (1+g1)^n * (1+g2)) / (r - g2)] / (1+r)^n
Where,
D0 is the dividend today g1 is the short term growth rate g2 is the long term or constant growth r is the required rate of return on the stock
P0 = 3 * (1+0.50) / (1+0.16) + 3 * (1+0.50)^2 / (1+0.16)^2 + 3 * (1+0.50)^3 / (1+0.16)^3 + [(3 * (1+0.50)^3 * (1+0.14)) / (0.16 - 0.14)] / (1+0.16)^3
P0 = $385.121878 rounded off to $385.12
LeMay Department Store uses the retail inventory method to estimate ending inventory for its monthly financial statements. The following data pertain to one of its largest departments for the month of March 2021:
Cost Retail Beginning inventory $ 44,000 $ 64,000 Purchases 211,000 404,000 Freight-in 21,396 Purchase returns 6,000 8,000 Net markups 6,200 Net markdowns 3,900 Normal breakage 8,000 Net sales 284,000 Employee discounts 2,200
Sales are recorded net of employee discounts.
Required:
1. Compute estimated ending inventory and cost of goods sold for March applying the conventional retail method.
2. Recompute the cost-to-retail percentage using the average cost method.
Answer:
See below
Explanation:
a. Estimated ending inventory and cost of goods sold for March
Costs Retail
Beginning inventory $44,000 $66,000
Add:
Net purchases $211,000 $404,000
Less:
Purchase return ($6,000) ($8,000)
Freight in $21,396 $0
Net markups $0 $6,200
Goods available for sale $270,396 $468,200
Less:
Net mark down $0 ($3,900)
Goods available for sale( after markup) $270,396 $464,300
b. Cost to retail percentage using average cost method
= [(Goods available for sale at cost(after markup / Goods available for sale at retail (after markup) ] × 100
= [($270,396 / $464,300)] × 100
= 58.24%
Income Statement Wayne Corporation had the following revenue and expense account balances (in millions) for a recent year ending May 31:
Depreciation Expense $925
Fuel Expense 3,228
Maintenance and Repairs Expense 1,573
Other Expense 4,995
Provision for Income Taxes 805
Purchased Transportation 1,203
Rentals and Landing Fees 1,748
Revenues 24,698
Salaries and Employee Benefits 8,815
Prepare an income statement.
Answer:
Income Statement
Revenue $24,698
Expenses
Salaries and employee benefits $8,815
Purchased Transportation $1,203
Fuel Expense $3,228
Rental and landing fees $1,748
Depreciation Expense $925
Maintenance and repairs expense $1,573
Provision for income taxes $805
Other expense (revenue) net $4,995
Total Expenses $23,292
Net Income $1,406
Charles Austin of the controller's office of Thompson Corporation was given the assignment of determining the basic and diluted earnings per share values for the year ending December 31, 2013. Austin has compiled the information listed below.
The company is authorized to issue 8,000,000 shares of $10 par value common stock. As of December 31, 2012, 2,000,000 shares had been issued and were outstanding.
The per share market prices of the common stock on selected dates were as follows.
Price per Share
July 1, 2012 $20.00
January 1, 2013 21.00
April 1, 2013 25.00
July 1, 2013 11.00
August 1, 2013 10.50
November 1, 2013 9.00
December 31, 2013 10.00
A total of 700,000 shares of an authorized 1,200,000 shares of convertible preferred stock had been issued on July 1, 2012. The stock was issued at its par value of $25, and it has a cumulative dividend of $3 per share. The stock is convertible into common stock at the rate of one share of convertible preferred for one share of common. The rate of conversion is to be automatically adjusted for stock splits and stock dividends. Dividends are paid quarterly on September 30, December 31, March 31, and June 30.
Thompson Corporation is subject to a 40% income tax rate.
The after-tax net income for the year ended December 31, 2013 was $11,550,000.
The following specific activities took place during 2013.
January 1–A 5% common stock dividend was issued. The dividend had been declared on December 1, 2012, to all stockholders of record on December 29, 2012.
April 1–A total of 400,000 shares of the $3 convertible preferred stock was converted into common stock. The company issued new common stock and retired the preferred stock. This was the only conversion of the preferred stock during 2013.
July 1–A 2-for-1 split of the common stock became effective on this date. The board of directors had authorized the split on June 1.
August 1–A total of 300,000 shares of common stock were issued to acquire a factory building.
November 1–A total of 24,000 shares of common stock were purchased on the open market at $9 per share. These shares were to be held as treasury stock and were still in the treasury as of December 31, 2013.
Common stock cash dividends–Cash dividends to common stockholders were declared and paid as follows.
April 15–$0.30 per share
October 15–$0.20 per share
Preferred stock cash dividends–Cash dividends to preferred stockholders were declared and paid as scheduled.
Required:
1. Determine the number of shares used to compute basic earnings per share for the year ended December 31, 2013.
shares
2. Determine the number of shares used to compute diluted earnings per share for the year ended December 31, 2013.
shares
3. Compute the adjusted net income to be used as the numerator in the basic earnings per share calculation for the year ended December 31, 2013.
Answer:
Thompson Corporation
1. Number of shares for computing basic earnings per share for the year ended December 31, 2013 is:
= 7,476,000
2. Number of shares used to compute diluted earnings per share for the year ended December 31, 2013 is:
7,776,000
3. Adjusted Net Income to be used as the numerator in the basic earnings per share calculation for the year ended December 31, 2013:
= $10,650,000
Explanation:
a) Data and Calculations:
After-tax net income for 2013 = $11,550,000
July 1, 2012: Convertible preferred stock = 700,000
Cumulative dividend = 12% ($3/$25)
April 1 Converted preferred stock = (400,000)
Outstanding convertible preferred stock 300,000
Common Stock
December 31, 2012 Outstanding = 2,000,000
April 1 Converted preferred stock = 400,000
July 1 2-for-1 split 4,800,000
August 1 Factory building 300,000
November 1 Treasury Stock (24,000)
Outstanding common stock shares 7,476,000
Outstanding convertible preferred stock 300,000
Total shares for diluted earnings per share = 7,776,000
Adjusted Net Income:
After-tax net income for 2013 = $11,550,000
Preferred stock dividends 900,000
Adjusted net income = $10,650,000
Bond X is a premium bond making semiannual payments. The bond has a coupon rate of 9.2%, a YTM of 7.2%, and has 17 years to maturity. Bond Y is a discount bond making semiannual payments. This bond has a coupon rate of 7.2%, a YTM of 9.2%, and also has 17 years to maturity. Assume the interest rates remain unchanged and both bonds have a par value of $1,000.
1. What are the prices of these bonds today?
2. What do you expect the prices of these bonds to be in one year?
3. What do you expect the prices of these bonds to be in three years?
4. What do you expect the prices of these bonds to be in eight years?
5. What do you expect the prices of these bonds to be in 12 years?
6. What do you expect the prices of these bonds to be in 17 years?
Answer:
I used an Excel spreadsheet to calculate the answers (see attached file):
1. What are the prices of these bonds today?
bond X = $1,194
bond Y = $830
2. What do you expect the prices of these bonds to be in one year?
bond X = $1,194
bond Y = $830
3. What do you expect the prices of these bonds to be in three years?
bond X = $1,175
bond Y = $844
4. What do you expect the prices of these bonds to be in eight years?
bond X = $1,131
bond Y = $879
5. What do you expect the prices of these bonds to be in 12 years?
bond X = $1,083
bond Y = $921
6. What do you expect the prices of these bonds to be in 17 years?
bond X = $1,046
bond Y = $1,036
What are the benefits of multiple marketing channels? Are there any disadvantages?
How much time is involved in an electrician?
Answer:
Maintenance electricians usually have regular work which they complete in a typical 40-hour week. Most keep regular business hours on weekdays and don't usually work on weekends, public holidays, or late at night. Some electricians work on-call and put in extra hours to troubleshoot urgent problems.Sep 20, 2017
Explanation:
If the efficient market hypothesis is correct, then a. index funds should typically beat managed funds, and usually do. b. index fund should typically beat managed funds, but usually do not. c. mutual funds should typically beat index funds, and usually do. d. mutual funds should typically beat index funds, but usually do no
Answer:
a. index funds should typically beat managed funds, and usually do.
Explanation:
The efficient market hypothesis is also known as efficient market theory. In financial economics, it is a hypothesis which states that the prices of the assets reflect all the available information. It hypothesizes that the stocks trade at the fair market value on the exchanges. When the efficient market hypothesis is correct, the stock market is informationally efficient and also the index fund usually beat the managed funds.
Campbell Boat Company makes inexpensive aluminum fishing boats. Production is seasonal, with considerable activity occurring in the spring and summer. Sales and production tend to decline in the fall and winter months. During year 2, the high point in activity occurred in June when it produced 201 boats at a total cost of $155,550. The low point in production occurred in January when it produced 36 boats at a total cost of $45,000. Required Use the high-low method to estimate the amount of fixed cost incurred each month by Campbell Boat Company. Determine the total estimated cost if 160 boats are made.
Answer:
Campbell Boat Company
a) The amount of fixed cost incurred each month by Campbell Boat Company is:
= $20,880.
b) The total estimated cost if 160 boats are made is:
= $128,080.
Explanation:
a) Data and Calculations:
June production = 201 boats at a total cost of $155,550
January production = 36 boats at a total cost of $45,000
Differences = 165 boats at $110,550
Variable cost per boat = $670 ($110,550/165)
Fixed cost, at the June production level:
Variable costs = $134,670 ($670 * 201)
Fixed costs = $20,880 ($155,550 - $134,670)
Check at January production level of 36 boats:
Variable costs = $24,120 ($670 * 36)
Fixed costs = 20,880 ($45,000 - $24,120)
At 160 boats production level:
Variable costs = $107,200 ($670 * 160)
Fixed costs = 20,880
Total costs = $128,080
Trendy Toes produces sports socks. The company has fixed expenses of $85,000 and variable expenses of $1.20 per package. Each package sells for $2.00.
Requirements:
1. Compute the contribution margin per package and the contribution margin ratio.
2. Find the breakeven point in units and in dollars.
3. Find the number of packages Trendy Toes needs to sell to earn a $26,000 operating income.
Answer:
Results are below.
Explanation:
To calculate the contribution margin and contribution margin ratio we need to use the following formulas:
contribution margin= selling price - unitary variable cost
contribution margin= 2 - 1.2= 0.8
contribution margin ratio= contribution margin / selling price
contribution margin ratio= 0.8 / 2
contribution margin ratio= 0.4
Now, we can calculate the break-even point in units and dollars:
Break-even point in units= fixed costs/ contribution margin per unit
Break-even point in units= 85,000 / 0.8
Break-even point in units= 106,250
Break-even point (dollars)= fixed costs/ contribution margin ratio
Break-even point (dollars)= 85,000 / 0.4
Break-even point (dollars)= $212,500
Finally, the desired profit is $26,000:
Break-even point in units= (fixed costs + desired profit) / contribution margin per unit
Break-even point in units= 111,000 / 0.8
Break-even point in units= 138,750
describe the advantages and disadvantages of using a certificate of deposit (cd) to save money.
Explanation:
Advantages of a CD
Flexible Terms: The terms and the amounts that can be deposited into a CD are flexible. If you are not willing to tie up your money for a long time, you can easily opt for a shorter term. At the end of a CD term, you can renew that CD or start a new one.
Safety: CDs that are available from a federally insured institution are generally insured up to $250,000. This takes much of the risk out of the investment.
Better Return Than Saving Accounts: Since the CD holder is not allowed to withdraw money freely like savings account holders, a CD is often more valuable to the financial institution. For this reason, the interest rate offered to a CD holder is higher than a traditional savings account.
Wide Selection: You can get a CD at various maturities and terms from different financial institutions. Because of the diversity of CDs, investors can find a CD that meets their individual needs.
Fixed, Predictable Return: The investor can be sure about getting a specific yield at a specific time. Even if the interest rates come down to a broader economy, the CD rate will remain constant. You will be able to easily determine the rate at which your balance will grow, thus making financial planning easy.
Disadvantages of a CD
Limited Liquidity: The owner of a CD cannot access their money as easily as a traditional savings account. To withdrawal money from a CD before the end of the term requires that a penalty has to be paid. This penalty can be in the form of lost interest or a principal penalty. To increase flexibility, the investor can create a CD Ladder, which is composed of CDs with different maturity dates and terms. With a laddering strategy, you have more options to access your CD savings at different intervals of time.
Inflation Risk: CD rates may be lower than the rate of inflation. This means that your money may lose its purchasing power over time if interest gains are outdone by inflation rates.
With these advantages and disadvantages in mind, it is wise to consider that CD advantages usually outweigh the disadvantages. CDs allow you to grow your savings without hassle. You can easily compare different types of CDs with the help of online resources, and you can find one that best suits your needs.
Summary of Certificates of Deposits
Certificates of Deposit (CD) are useful for people looking for a way to save money while earning a relatively high interest. This not only helps you save money, but also earns you interest without requiring any effort on your part. The disadvantages of CD’s are minor and typically outweighed by their
Choose a real or made up example of a company, and describe at least three variable costs the company has.
An environmental consultant is considering the installation of a water storage tank for a client. The tank is estimated to have an initial cost of $309,000, and annual maintenance costs are estimated to be $7,100 per year. As an alternative, a holding pond can be provided a short distance away at an initial cost of $225,000 for the pond plus $90,000 for pumps and piping. Annual operating and maintenance costs for the pumps and holding pond are estimated to be $16,000. The planning horizon is 20 years, and at that time, neither alternative has any salvage value.
Required:
Determine the preferred alternative based on a present worth analysis with a MARR of 20 percent/year.
Answer:
The preferred alternative based on a present worth analysis with a MARR of 20% per year is:
the Installation of a water Storage Tank
Explanation:
a) Data and Calculations:
MARR = 20% per year
Time period or planning horizon = 20 years
Alternatives
Tank Pond
Initial costs $309,000 $315,000 ($225,000 + $90,000)
Annual maintenance costs 7,100 16,000
PV annuity factor 4.870 4.870
Total PV: maintenance cost $34,577 $77,920 ($16,000 * 4.870)
Total PW costs $343,577 $392,920 ($315,000 + $77,920)
Present worth is the same as the present value (PV) of a future amount, discounted to the present using a specified rate.
He ….. enough time to finish the report.
What's the question????This is for school,not nothing else
Assume the firms operating in an oligopolistic market experience a relatively small change in marginal costs. According to the kinked demand curve model this would: A) cause a large change in the profit-maximizing level of output. B) leave the equilibrium price unchanged. C) cause the profit-maximizing level of output to change by the same amount and in the same direction. D) cause the profit-maximizing price to change by the same amount but in the opposite direction.
Answer:
B) Leave the equilibrium price unchanged.
Explanation:
Oligopolistic market is the arrangement where few companies offer same product to the customers. There is very less competition in the market so every supplier has fair chance for operating their business successfully. The kinked demand model curve in oligopolistic market would leave the equilibrium price unchanged.
why do we have a graduated income tax? in your own words.
I think it because the higher salary you get the higher tax you pay ,it the fairest system because it lessens the burden of the poor,it makes it easy for they ones who are unfortunate but it also encourages them to work harder
Explanation:
above
Crazy Mountain Outfitters Co., an outfitter store for fishing treks, prepared the following unadjusted trial balance at the end of its first year of operations:
Crazy Mountain Outfitters Co. Unadjusted Trial Balance April 30, 20Y5
Debit Balances Credit Balances
Cash 12,110
Accounts Receivable 80,410
Supplies 19,380
Equipment 407,380
Accounts Payable 18,890
Unearned Fees 21,310
Common Stock 55,000
Retained Earnings 225,000
Dividends 15,990
Fees Earned 484,400
Wages Expense 112,380
Rent Expense 85,740
Utilities Expense 61,520
Miscellaneous Expense 9,690
804,600 804,600
For preparing the adjusting entries, the following data were assembled:
Required:
Supplies on hand on April 30 were $7,160.
Fees earned but unbilled on April 30 were $8,770.
Depreciation of equipment was estimated to be $12,110 for the year.
Unpaid wages accrued on April 30 were $1,550.
The balance in unearned fees represented the April 1 receipt in advance for services to be provided. Only $16,830 of the services was provided between April 1 and April 30.
a. Determine the revenues, expenses, and net income of Crazy Mountain Outfitters Co. before the adjusting entries.
b. Determine the revenues, expenses, and net income of Crazy Mountain Outfitters Co. after the adjusting entries.
c. Determine the effect of the adjusting entries on Retained Earnings.
Answer:
Crazy Mountain Outfitters Co.
a. Income Statement before Adjusting Entries:
Fees Earned 484,400
Wages Expense 112,380
Rent Expense 85,740
Utilities Expense 61,520
Miscellaneous Expense 9,690 269,330
Net Income 215,070
b. Income Statement after adjustments:
Fees Earned 510,000
Wages Expense 113,930
Rent Expense 85,740
Utilities Expense 61,520
Supplies Expense 12,220
Depreciation expense 12,110
Miscellaneous Expense 9,690 295,210
Net Income 214,790
c. The effect of the adjusting entries on Retained Earnings:
Retained earnings per unadjusted trial balance $225,000
Net income after adjusting entries 214,790
Ending Retained earnings after adjusting entries $439,790
Ending Retained earnings before adjusting entries 440,070 (225,000 + 215,070)
Difference in the Retained earnings = $280
Explanation:
a) Data and Calculations:
Crazy Mountain Outfitters Co.
Unadjusted Trial Balance April 30, 20Y5
Debit Credit
Cash 12,110
Accounts Receivable 80,410
Supplies 19,380
Equipment 407,380
Accounts Payable 18,890
Unearned Fees 21,310
Common Stock 55,000
Retained Earnings 225,000
Dividends 15,990
Fees Earned 484,400
Wages Expense 112,380
Rent Expense 85,740
Utilities Expense 61,520
Miscellaneous Expense 9,690
Totals 804,600 804,600
b) Analysis:
1. Supplies Expense $12,220 Supplies $12,220 ($19,380 - $7,160)
2. Accounts receivable $8,770 Fees earned $8,770
3. Depreciation expense $12,110 Accumulated Depreciation $12,110
4. Wages Expense $1,550 Wages Payable $1,550
5. Unearned Fees $16,830 Fees earned $16,830
After Adjusting Entries:
Fees Earned = 510,000 (484,400 + 8,770 + 16,830)
Wages Expense = 113,930 (112,380 + 1,550)
Rent Expense 85,740
Utilities Expense 61,520
Supplies Expense 12,220 (0 + 12,220)
Depreciation expense 12,110 (0 + 12,110)
Miscellaneous Expense 9,690 295,210
Suppose two factors are identified for the U.S. economy: the growth rate of industrial production, IP, and the inflation rate, IR. IP is expected to be 4% and IR 6%. A stock with a beta of 1 on IP and 0.7 on IT currently is expected to provide a rate of return of 12%. If industrial production actually grows by 5%, while the inflation rate turns out to be 8%, what will be your expected rate of return on the stock, given the new information about the industrial production rate and the inflation rate
Answer:
14.4%
Explanation:
Calculation for what will be your expected rate of return on the stock.
Expected rate of return on the stock=12% + 1(5%-4%) + .7(8%-6%)
Expected rate of return on the stock=12%+1(1%)+.7(2%)
Expected rate of return on the stock=12%+1%+1.4%
Expected rate of return on the stock=14.4%
Therefore your expected rate of return on the stock is 14.4%
On July 1, 2020, Bramble Inc. made two sales.
1. It sold land having a fair value of $905,820 in exchange for a 4-year zero-interest-bearing promissory note in the face amount of $1,425,321. The land is carried on Ayayai's books at a cost of $599,100.
2. It rendered services in exchange for a 3%, 8-year promissory note having a face value of $409,970 (interest payable annually). Ayayai Inc. recently had to pay 8% interest for money that it borrowed from British National Bank. The customers in these two transactions have credit ratings that require them to borrow money at 12% interest.
Required:
Record the two journal entries that should be recorded by Bramble Inc. for the sales transactions above that took place on July 1, 2020.
Answer:
Bramble Inc.
Journal Entries:
July 1, 2020:
1.
Debit Long-term Note Receivable $1,425,321
Credit Land $599,100
Credit Interest Receivable $519,501
Credit Gain from Sale of Land $306,720
To record the sale of land for a 4-year zero-interest-bearing note.
2.
Debit Long-term Note Receivable $409,970
Credit Service Revenue $323,634
Credit Interest Receivable $86,336
To record the rendering of services in exchange for a 3%, 8-year note.
Explanation:
a) Data and Analysis:
1. Long-term Note Receivable $1,425,321
Land $599,100
Interest Receivable $519,501 ($1,425,321 - $905,820)
Gain from Sale of Land $306,720 ($905,820 - $599,100)
2. Long-term Note Receivable $409,970
Service Revenue $323,634
Interest Receivable $86,336
NB: The interest receivable and the present value of the service revenue for 2 were obtained from an online financial calculator, using the future value of $409,970 and 3% interest rate for 8 years.
Mountain High Ice Cream Company transferred $68,000 of accounts receivable to the Prudential Bank. The transfer was made without recourse. Prudential remits 90% of the factored amount to Mountain High and retains 10%. When the bank collects the receivables, it will remit to Mountain High the retained amount (which Mountain estimates has a fair value of $5,800) less a 2% fee (2% of the total factored amount).
Required:
Prepare the journal entry to record the transfer on the books of Mountain High assuming that the sale criteria are met.
Answer:
Dr Cash $59,840
Dr Loss on Sale of Receivables $8,160
Dr Recievable from Factor $5,800
Cr Recourse liability $5,800
Cr Accounts Receivable $68,000
Explanation:
Preparation of the journal entry to record the transfer on the books of Mountain High assuming that the sale criteria are met.
Dr Cash $59,840
[(68,000 x .90) - (68,000 x .02)]
Dr Loss on Sale of Receivables $8,160
[(5,800 + 68,000) - ($59,840 + 5,800)]
Dr Recievable from Factor $5,800
Cr Recourse liability $5,800
($59,840+$8,160+5800-68,000)
Cr Accounts Receivable $68,000
(To record the transfer on the books of Mountain High)
Dr Loss on Sale of Rec = (5,800 + 68,000) - ($59,840 + 5,800) = $8,160
73,800-65650
Nancy, the owner of a very successful hotel chain in the Southeast, is exploring the possibility of expanding the chain into a city in the Northeast. She incurs $35,000 of expenses associated with this investigation. Based on the regulatory environment for hotels in the city, she decides not to expand. During the year, she also investigates opening a restaurant that will be part of a national restaurant chain. Her expenses for this are $53,000. The restaurant begins operations on September 1.
Determine the amount Nancy can deduct in the current year for investigating these two businesses.
Answer:
$3,133.
As regard to opening a restaurant, investigation expense = 53,000 - 2000 = $51,000.
Explanation:
Before diving straight into the solution to this problem, let's take out some of the parameters given in the question above.
=> Nancy incurs $35,000 of expenses associated with the investigation of the possibility of expanding the chain into a city in the Northeast.
=> Nancy expenses for investigates opening a restaurant that will be part of a national restaurant chain are $53,000.
The first thing to do right now is to determine the value for the investigation as regard to the opening of a restaurant = [ 2000 × (51,000/180 months) × 4] = $3,133.
The next thing is to determine the value for the deduction which is available. This can be done below as:
The amount Nancy can deduct in the current year for investigating these two businesses = 5000 - [ 53000 - 50000] = $2, 000
As regard to opening a restaurant, investigation expense = 53,000 - 2000 = $51,000.
Climate is based on the way people in the organization view all of the following except _____ .
the organization's formal and informal training programs
the organization's formal and informal policies
the organization's formal and informal practices
the organization's formal and informal procedures
Answer:
the organization's formal and informal practices
Explanation:
Answer:
c: The organization's formal and informal practices
. Prepare a contribution format income statement segmented by divisions. 2-a. The Marketing Department has proposed increasing the West Division's monthly advertising by $28,000 based on the belief that it would increase that division's sales by 19%. Assuming these estimates are accurate, how much would the company's net operating income increase (decrease) if the proposal is implemented
Answer:
1. ($98,560)
2a. Increase by $36,790
2b. Yes
Explanation:
1. Preparation of a contribution format income statement segmented by divisions
CONTRIBUTION FORMAT INCOME STATEMENT
East + Central + West= Total Company
Sales
$351,000 +$650,000+$550,000=$1,551,000
Less Variable expenses $196,560+$156,000+$209,000=$561,560
(56%*$351,000=$196,560)
(24%*$650,000=$156,000)
(38%*$550,000=$209,000)
Contribution margin
$154,440+$494,000+$341,000=$989,440
Traceable fixed expenses $258,000+$331,000+ $205,000=$794,000
Divisional segment margin-$103,560+$163,000 +$136,000=$195,440
($154,440-$258,000=-$103,560)
($494,000-$331,000=$163,000)
($341,000-$205,000=$136,000)
Common fixed expenses not traceable to divisions $294,000
($1,088,000-$794,000)
Net operating loss ($98,560)
($195,440-$294,000)
2a. Calculation for how much would the company's net operating income increase (decrease) if the proposal is implemented
Incremental West Division sales $104,500 ($550,000*19%)
X Contribution margin ratio 62%
(1-38%)
=Incremental contribution margin $64,790
($194,500*62%)
Less incremental advertising expense $28,000
Net operating income will increase by $36,790
($64,790-$28,000)
2b. YES, I Would recommend the increased advertising.