Answer:
Cost of goods sold = overstated : $24,265
Current assets = understated : $24,265
Gross profit = understated : $24,265
Inventory = understated : $24,265
Net income = understated : $24,265
Stockholders' equity = understated : $24,265
Total assets = understated : $24,265
Explanation:
Inventory was understated by $24,265 ($327,560 - $303,295). Since inventory is an Asset, also it is a Income Statement element and consequently affects Retained Earnings (Distributions to Shareholders) , the effect is shown above.
Baj Corporation uses a predetermined overhead rate base on machine-hours that it recalculates at the beginning of each year. The company has provided the following data for the most recent year. Estimated total fixed manufacturing overhead from the beginning of the year $ 534,000 Estimated activity level from the beginning of the year 30,000machine-hours Actual total fixed manufacturing overhead $ 487,000 Actual activity level 27,400machine-hours The predetermined overhead rate per machine-hour would be closest to:__________
A) $17.80
B) $19.49
C) $16.23
D) $17.77
Answer:
A) $17.80
Explanation:
The computation of the predetermined overhead rate per machine hour is shown below:
= Estimated total fixed manufacturing overhead from the beginning of the year ÷ estimated activity level from the beginning year machine hours
= $534,000 ÷30,000 machine hours
= $17.80
We simply applied the above formula so that the predetermined overhead rate could come
Northern Communications has the following stockholders' equity on December 31, 2018:
Stockholders' Equity
Paid-In Capital:
Preferred Stock—5%, $11 Par Value; 150,000
shares authorized, 20,000
shares issued and outstanding $220,000
Common Stock—$2 Par Value; 575,000 s
hares authorized, 380,000
shares issued and outstanding 760,000
Paid-In Capital in Excess of Par—Common 680,000
Total Paid-In Capital 1,660,000
Retained Earnings 200,000
Total Stockholders' Equit $1,860,000
Requirement 1. Assuming the preferred stock is cumulative, compute the amount of dividends to preferred stockholders and to common stockholders for 2018 and 2019 if total dividends are $9,000 in 2018 and $45,000 in 2019. Assume no changes in preferred stock and common stock in 2019.
2. Record journal entries for 2018 assuming Northern communication declared dividend on Dec 31.
Answer:
2018
Preferred Stock Dividend Paid = $9,000
Common Stock Dividend = $0
2019
Preferred Stock Dividend Paid = $13,000
Common Stock Dividend = $32,000
Journal Entry
Dec 31
Dividend : Preference Stock $11,000 (debit)
Cash $9,000 (credit)
Shareholders for dividends $2,000 (credit)
Explanation:
Preference Stockholders have preference over Common Stockholders when it comes to payments of dividends.
That means preference dividends are paid first then the remainder belongs to the Common Stockholders.
If Preference Stocks are cumulative, dividends in arrears not paid in previous years are carried over to the next year and these have to be paid up before any distributions for that year are made.
Calculation of Stock Dividend
Stock Dividend gives a fixed dividend to Preference Stockholders every year.
Stock Dividend = ( $220,000 × 5%) = $11,000
2018
Preferred Stock Dividend Paid = $9,000
Preferred Stock Dividend in Arrears = $2,000
Common Stock Dividend = $0
2019
Preferred Stock Dividend Paid = ($2,000 - In-arrears + $11,000 - Current Year) = $13,000
Preferred Stock Dividend in Arrears = $0
Common Stock Dividend = ($45,000 - $13,000) = $32,000
A $200,000 loan amortized over 12 years at an interest rate of 10% per year requires payments of $21,215.85 to completely remove the loan when interest is charged on the unrecovered balance of the principal. If interest is charged on the original principal instead of the unrecovered balance, what is the loan balance after 12 years provided the same $21,215.85 payments are made each year?
Answer:
loan balance after 12 years = $185409.8
Explanation:
Loan principal = $200000
interest = 10% of principal
amount paid yearly = $21215.85
For 1st year
principal for the first year = $200000
required interest to be paid = 10% of 200000 = $20000
amount paid = $21215.85
Loan Balance after first year = (principal for first year) - (amount paid - 10% of principal ) = $198,784.15
For 2nd year
principal for the 2nd year = Loan balance after first year = $198,784.15
loan balance after 2nd year = 198784.15 - ( 21215.85 - 10% of 198784.15)
= $197568.30
same applies for the different years until the 12th year
using this formula :
Loan Balance after Nth year = [ Loan balance after (n-1) year - ( amount paid - 10% of loan balance after (n-1) year ) ]
When __________________, a firm will supply a higher quantity at any given price for its output, and the supply curve will shift to the right.
Answer: costs of production fall
Explanation:
When the costs of production fall, a firm will supply a higher quantity at any given price for its output, and the supply curve will shift to the right.
This is because when there is a reduction in the costs of production, there will be more money and hence, the producer can supply more goods thereby shifting the supply curve to the right.
Jackpot Mining Company operates a copper mine in central Montana. The company paid $1,150,000 in 2021 for the mining site and spent an additional $630,000 to prepare the mine for extraction of the copper. After the copper is extracted in approximately four years, the company is required to restore the land to its original condition, including repaving of roads and replacing a greenbelt. The company has provided the following three cash flow possibilities for the restoration costs: (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1)
Cash flow Probability
1 $330,000 25%
2 430,000 40%
3 630,000 35%
To aid extraction, Jackpot purchased some new equipment on July 1, 2021, for $150,000. After the copper is removed from this mine, the equipment will be sold. The credit-adjusted, risk-free rate of interest is 10%.
Required:
a. Determine the cost of the copper mine.
b. Prepare the journal entries to record the acquisition costs.
Answer:
a. Determine the cost of the copper mine.
$2,104,430b. Prepare the journal entries to record the acquisition costs.
Date X, 2021, acquisition of copper mine
Dr Copper mine 2,104,430
Cr Cash 1,780,000
Cr Asset retirement liability 324,430
July 1, 2021, acquisition of mining equipment
Dr Equipment 150,000
Cr Cash 150,000
Explanation:
estimated restoration costs = ($330,000 x .25) + ($430,000 x .4) + ($630,000 x .35) = $475,000
now we must adjust the restoration cost and determine its present value = $475,000 x 0.68301 (present value factor, 10%, 4 periods) = $324,430
total cost of copper mine = purchase cost + preparation costs + restoration costs = $1,150,000 + $630,000 + $324,430 = $2,104,430
Raymond Autobody Shop has the following accounts
Accounts Payable Service Revenue
Cash Equipment
Utilities Expense Common Stock
Automotive Supplies Advertising Expense
Dividends Unearned Revenue
Retained Earnings
Create a chart of accounts for Raymond Autobody Shop using the standard numbering system.
Each account is separated by a factor of 10. For example, the fist asset account be 100 and the net asset account will 110. Use the first available under each section, Asset Liabilities, etc, when selecting the accounts.
Answer and Explanation:
The creation of the chart of the account by applying the standard numbering system is presented below:
For the assets it would be started by 100
For the liabilities it would be started by 200
For the owner equity it would be started by 300
For the revenue it would be started by 400
And, for the expenses it would be started by 500
Now the creation is as follows
Balance sheet
Assets Liabilities Stockholder equity
100 Cash 200 Account payable 300 R. capital
110 Automotive supplied 210 unearned revenue 300 R. withdrawal
120 equipment
Income statement
Revenue Expenses
400 service revenue 500 utilities expense
510 advertising expense
Emmitt had the following final balances after the first year of operations: assets, $55,000; stockholders' equity, $25,000; dividends, $3,000; and net income, $10,000. What is the amount of Emmitt's liabilities
Answer:
$30,000
Explanation:
Calculation for Emmitt amount of liabilities
Using this formula
Liabilities =Assets -Stockholders's equity
Let plug in the formula
Liabilities =$55,000-$30,000
Liabilities =$30,000
Therefore the amount of Emmitt liabilities will be $30,000
The standard deviation of return on investment A is 25%, while the standard deviation of return on investment B is 20%. If the correlation coefficient between the returns on A and B is −0.260, the covariance of returns on A and B is _________. Multiple Choice –0.2080 –0.0130 0.0130 0.2080
Answer: –0.0130
Explanation:
Correlation given the variance and the standard deviation of the two returns can be calculated by;
Correlation coefficient = Covariance of returns on investment A and B / (Standard deviation of return on investment A * Standard deviation of return on investment B).
Rearranging the formula, Covariance becomes;
Covariance of returns on investment A and B = Correlation coefficient * (Standard deviation of return on investment A * Standard deviation of return on investment B)
Covariance of returns on investment A and B = -0.260 * 0.25 * 0.20
Covariance of returns on investment A and B = –0.0130
Using the lower of cost or market, what should the total inventory value be for the following items: Item Quantity Unit Cost Price Unit Market Price Total Cost Price Total Market Price Lower of Cost or Market A 201 $7 $11 $1,407 $2,211 $ B 98 17 15 1,666 1,470 C 71 23 26 1,633 1,846 $
Answer:
$4,706
Explanation:
The computation is shown below:
As we know that the inventory should be valued at lower of cost or market value which is shown below:
Tota cost price for all markets is
= Market A + Market B + market C
= $1,407 + $1,666 + $1,633
= $4,706
And, the total market price for all markets is
= Market A + Market B + market C
= $2,211 + $1,470 + $1,846
= $5,527
So based on the above calculation, the cost price should be lower off and the same is to be considered
Opunui Corporation has two manufacturing departments--Molding and Finishing. The company used the following data at the beginning of the year to calculate predetermined overhead rates: Molding Finishing Total Estimated total machine-hours (MHs) 3,250 1,750 5,000 Estimated total fixed manufacturing overhead cost $ 20,000 $ 5,600 $ 25,600 Estimated variable manufacturing overhead cost per MH $ 1.00 $ 2.00 During the most recent month, the company started and completed two jobs--Job A and Job M. There were no beginning inventories. Data concerning those two jobs follow: Job A Job M Direct materials $ 17,000 $ 10,700 Direct labor cost $ 23,800 $ 10,400 Molding machine-hours 1,250 2,000 Finishing machine-hours 1,250 500 Assume that the company uses a plantwide predetermined manufacturing overhead rate based on machine-hours and uses a markup of 40% on manufacturing cost to establish selling prices. The calculated selling price for Job A is closest to: (Round "Predetermined overhead rate" to 2 decimal places.)
Answer:
The calculated selling price for Job A is closest to: $80,290
Explanation:
Predetermined Overhead Rate = Budgeted Fixed Overheads / Budgeted Activity
= $ 25,600 / 5,000
= $5.12 per machine hour.
Manufacturing Cost Statement for Job A
Direct materials $17,000
Direct labor cost $23,800
Variable manufacturing overhead :
Molding ($ 1.00 × 1,250) $1,250
Finishing ($ 2.00 × 1,250) $2,500
Fixed Manufacturing Overheads
Molding ($5.12 × 1,250) $6,400
Finishing ($5.12 × 1,250) $6,400
Total Manufacturing Cost $57,350
Calculation of Selling Price
Total Manufacturing Cost $57,350
Add Mark -up ($57,350 × 40%) $22,940
Selling Price $80,290
Chinawa, a major processor of cheese sold throughout the United States, employs one hundred workers at its principal processing plant. The plant is located in Heartland Corners, which has a population that is 50 percent white and 25 percent African American, with the balance Hispanic American, Asian American, and others. Chinawa requires a high school diploma as a condition of employment for its cleaning crew. Three-fourths of the white population complete high school, compared with only one-fourth of those in the minority groups. Chinawa has an all-white cleaning crew. Has Chinawa violated Title VII of the Civil Rights Act of 1964?
Answer:
Chinawa has violated Title VII of the Civil Rights Act of 1964
Explanation:
Title VII of the Civil Rights Act of 1964 states that:
It will be unlawful employment practice for an employer -
(1) to fail or refuse to hire or to discharge any individual, or otherwise to discriminate against any individual with respect to his compensation, terms, conditions, or privileges of employment, because of such individual's race, color, religion, sex, or national origin; or
(2) to limit, segregate, or classify his employees or applicants for employment in any way which would deprive or tend to deprive any individual of employment opportunities or otherwise adversely affect his status as an employee, because of such individual's race, color, religion, sex, or national origin.
Since one-fourth of those in minority group complete high school, it is expected of him to hire from those group in-order to balance his cleaning crew.
Assume that you are on the financial staff of Vanderheiden Inc., and you have collected the following data: The yield on the company's outstanding bonds is 7.75%; its tax rate is 40%; the next expected dividend is $0.65 a share; the dividend is expected to grow at a constant rate of 6.00% a year; the price of the stock is $15.00 per share; the flotation cost for selling new shares is F
Answer: 7.48%
Explanation:
Weighted Average Cost of capital is simply the weighted average of the costs of equity and debt.
Cost of Equity
= [tex]\frac{Next dividend}{Stock Price ( 1 - flotation Costs)} + growth rate[/tex]
= [tex]\frac{0.65}{19(1 -0.1)} + 0.06[/tex]
= 9.80%
Cost of debt
= Interest ( 1 - Tax)
= 0.075 (1 - 0.40)
= 4.65%
WACC = 9.80% * 0.55 + 4.65% * 0.45
= 7.48%
Mars Inc. has a defined benefit pension plan. On December 31 (the end of the fiscal year), the company received the PBO report from the actuary. The following information was included in the report: ending PBO, $110,000; benefits paid to retirees, $10,000; interest cost, $7,200. The discount rate applied by the actuary was 8%. What was the beginning PBO
Answer:
Beginning projected benefit obligation = $90,000
Explanation:
Beginning projected benefit obligation = Interest cost / Discount rate
=$7,200 / 8%
=$7,200 / 0.08
=$90,000
Algoma Co. borrows $250,000 cash on November 1, 2013, by signing a 120-day, 9% note with a face value of $250,000. 2. & 3. What is the amount of interest expense in 2013 and 2014 from this note? (Use 360 days a year. Do not round intermediate calculations.)
Answer:
The amount of interest expense in 2013 and 2014 are $3,750 and $3,625 respectively.
Explanation:
Interest expense would be in
2013;
= Principal × rate of interest × number of days ÷ ( total number of days in a year)
= $250,000 × 9% × (60 ÷ 360)
= $3,750
( 29 days in November + 31 days in December
In 2014,
= Principal × interest rates × number of days ÷ ( number of days in a year)
= $250,000 × 9% × ( 58 ÷ 360)
= $3,625
(30 days in January + 28 days in February)
Product X used the following quantity of activity drivers to produce 100 units of final product: 25 setups, 40 material moves and 75 machine hours What is the total indirect manufacturing cost per unit for product X based on an ABC system? g
Answer:
$137.50 per unit
Explanation:
The computation of the total indirect manufacturing cost per unit is shown below:
Machine setups 15000 ÷ 100 × 25 = $3750
Material moves 22500 ÷ 225 × 40 = $4000
M/c. Operations 14000 ÷ 175 × 75 = $6000
Total Cost for 100 units $13,750
And since there is 100 units
So, the total indirect manufcturing cost per unit is
= $13,750 ÷100 units
= $137.50
A physical count of supplies on hand at the end of May for Masters, Inc. indicated $1,250 of supplies on hand. The general ledger balance before any adjustment is $2,100. What is the adjusting entry for office supplies that should be recorded on May 31?
Answer:
Dr Supplies expense $850
Cr Supplies $850
Explanation:
Preparation of the adjusting entry for office supplies that should be recorded on May 31
Based on the information given we were told that the physical count of the supplies on hand for Masters, Inc. Shows the amount of $1,250 while the general ledger balance was the amount of $2,100, this means that the adjusting entry for office supplies on May 31 will be:
Dr Supplies expense $850
Cr Supplies $850
($2,100 -$1,250)
2. The current price of a stock is $50. In 1 year, the price will be either $65 or $35. The annual risk-free rate is 10%. Find the price of a call option on the stock that has an exercise price of $55 and that expires in 1 year. (Hint: Use daily compounding.)
A perfectly competitive firm sells 15 units of output at the going market price of $10. Suppose its average fixed cost is $15 and its average variable cost is $8. Its contribution margin (i.e., contribution to fixed cost) is
Answer:
$30
Explanation:
The computation of the contribution margin is shown below:
Contribution margin = Sales - Variable cost
where,
Sales = Units sold × Market price
= 15 units × $10
= $150
And,
Variable cost = Units sold × AVC
= 15 units × $8
= $120
Now placing these values to the above formula
= $150 - $120
= $30
We simply applied the above formula
On September 1, the company acquired five acres of land with a building that will be used as a warehouse. Tristar paid $120,000 in cash for the property. According to appraisals, the land had a fair value of $85,400 and the building had a fair value of $54,600. On September 1, Tristar signed a $42,000 noninterest-bearing note to purchase equipment. The $42,000 payment is due on September 1, 2022. Assume that 9% is a reasonable interest rate. On September 15, a truck was donated to the corporation. Similar trucks were selling for $2,700. On September 18, the company paid its lawyer $4,000 for organizing the corporation. On October 10, Tristar purchased maintenance equipment for cash. The purchase price was $17,000 and $600 in freight charges also were paid. On December 2, Tristar acquired various items of office equipment. The company was short of cash and could not pay the $5,700 normal cash price. The supplier agreed to accept 200 shares of the company's no-par common stock in exchange for the equipment. The fair value of the stock is not readily determinable. On December 10, the company acquired a tract of land at a cost of $22,000. It paid $3,000 down and signed a 11% note with both principal and interest due in one year. Eleven percent is an appropriate rate of interest for this note.
Required:
Prepare journal entries to record each of the above transactions.
Answer and Explanation:
The Journal entries is shown below:-
1. Land Dr, $73,200 (($85,400 ÷ (85,400 + 54,600)) × $120,000)
Building Dr, $46,800 ($54,600 ÷ (85,400 + 54,600)) × $120,000
To Cash $120,000
(Being cash paid is recorded)
2. Equipment Dr, $38,532.06 ($42,000 × 0.91743)
Discount on Note Payable Dr, $3,4687.94 ($3,780 × 0.91743)
To Note Payable $42,000
(Being equipment is recorded)
3. Truck Dr, $2,700
To Sales revenue $2,700
(Being truck is recorded)
4. Organisation cost Exp enses Dr, $4,000
To Cash $4,000
(Being cash paid is recorded)
5. Maintenance Equipment Dr, $17,600
To Cash $17,600
(Being cash paid is recorded)
6. Office Equipment Dr, $5,700
To Common Stock $5,700
(Being office equipment is recorded)
7. Land Dr, $22,000
To Cash $3,000
To Note Payable $19,000
(Being cash paid is recorded)
Wheat Inc. produces and sells a single product. The selling price of the product is $235.00 per unit and its variable cost is $86.95 per unit. The fixed expense is $373,653 per month. The break-even in monthly dollar sales is closest to: (Round your intermediate calculations to 2 decimal places.)
Answer:
Break-even point (dollars)= $593,100
Explanation:
Giving the following information:
The selling price of the product is $235.00 per unit and its variable cost is $86.95 per unit. The fixed expense is $373,653 per month.
To calculate the break-even point in dollars, we need to use the following formula:
Break-even point (dollars)= fixed costs/ contribution margin ratio
Break-even point (dollars)= 373,653 / [(235 - 86.95)/235]
Break-even point (dollars)= $593,100
Mountain High Ice Cream Company transferred $65,000 of accounts receivable to the Prudential Bank. The transfer was made with recourse. Prudential remits 90% of the factored amount to Mountain High and retains 10% to cover sales returns and allowances. When the bank collects the receivables, it will remit to Mountain High the retained amount (which Mountain estimates has a fair value of $5,500). Mountain High anticipates a $3,500 recourse obligation. The bank charges a 3% fee (3% of $65,000), and requires that amount to be paid at the start of the factoring arrangement.
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 56,550
Dr Receivable from factor 5,500
Dr Loss on sale of receivables 6,450
Cr Accounts receivables 65,000
Cr Recourse liability 3,500
Explanation:
cash = ($65,000 x 90%) - factoring fees = $58,500 - $1,950 = $56,550
factoring fees = $65,000 x 3% = $1,950
loss on sale of receivables (includes factoring fees) = (accounts receivables + recourse liability) - (cash + receivable from factor) = ($65,000 + $3,500) - ($56,550 + $5,500) = $68,500 - $62,050 = $6,450
Which of the following is an advantage of a partnership?
A.ease of starting and ending the business
B. Shared management and pooled skills
C. Unlimited liability
D. Little time commitment
Answer:
B
Explanation:
as if u share a business then the time and management is also shared
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The corporate office of Novartis, formerly Ciba-Geigy, acts to improve many key activities, including resource allocation and reward and evaluation systems. This is an example of creating value by using
Options:
A. related diversification to achieve value by leveraging pooled negotiating power to attain economies of scope.
B. related diversification to acquire market power by leveraging pooled negotiating power.
C. unrelated diversification to acquire financial synergies through portfolio management.
D. related diversification to acquire parenting, restructuring, and financial synergies through corporate restructuring and parenting.
Answer:
C. unrelated diversification to acquire financial synergies through portfolio management.
Explanation:
Such a strategy employed by Novartis is meant to create value for the organization in particular and other stakeholders through unrelated diversification from company objectives.
By so doing Novartis creates and acquires financial synergies through it's portfolio management.
Job 910 was recently completed. The following data have been recorded on its job cost sheet: Direct materials $ 2,429 Direct labor-hours 74 labor-hours Direct labor wage rate $ 17 per labor-hour Machine-hours 135 machine-hours The Corporation applies manufacturing overhead on the basis of machine-hours. The predetermined overhead rate is $18 per machine-hour. The total cost that would be recorded on the job cost sheet for Job 910 would be:
Answer:
Total Job Cost is $6,117
Explanation:
The total cost of the Job 910 is as under:
Direct Material Cost $2,429
Direct Labor Cost (74 Labor Hrs * $17 per Labor Hour) $1,258
Applied overhead (135 Machine Hrs * $18 per Machine Hr) $2,430
Total Job Cost $6,117
Alternative price indexes
Because there isn't one single measure of inflation, the government and researchers use a variety of methods to get the most balanced picture of how prices fluctuate in the economy. Two of the most commonly used price indexes are the consumer price index (CPI) and the GDP deflator.
The GDP deflator for this year is calculated by dividing the
______________ using _____________ by the
______________ using_____________ and multiplying by 100. However, the CPI reflects only the prices of all goods and services _________
Indicate whether the price change described in each scenario may affect the GDP deflator or the CPI for the United States.
Scenario Show up in the..
GDP Deflator CPI
An increase in the price of a Japanese-made phone that is popular
among U.S. consumers
A decrease in the price of a Fisher King deep-water reel, a popular
recreational fishing product built in Rarington, Indiana
Answer:
-value of all goods and services produced in the economy this year
-this year's prices
-value of all goods and services produced in the economy this year
-the base year's prices
-bought by consumers
-the first scenario would have effect on the GDP deflator
-the second scenario would have effect on the GDP deflator
Explanation:
The GDP deflator is used in measuring inflation in the economy by measuring changes in prices of goods in the economy. It is used together with other indices such as consumer price index in arriving at a more accurate or balanced measurement of inflation I'm the economy. The GDP deflator would be affected above because it is more comprehensive in it's calculation or measurement as it doesn't take into account only a basket of goods and services like the Consumer price index does
Which of the following are functions of the Federal Reserve? Check all that apply. Maintaining federal government checking accounts and gold Maintaining and circulating currency Ensuring all banks make a profit Making a profit for the federal government Being the lender of last resort for banks
Answer:
1. Maintaining federal government checking accounts and gold.
2. Maintaining and circulating currency.
3. Being the lender of last resort for banks
Explanation:
The Federal Reserve System (the 'Fed) was created by the Federal Reserve Act, passed by Congress in 1913. The Fed began operations in 1914. It was founded by President Woodrow Wilson under the Federal Reserve Act, which was aimed at backing each banks in order to put a definitive end to the bank panics of the 1800s.
The following are functions of the Federal Reserve;
1. Maintaining federal government checking accounts and gold.
2. Maintaining and circulating currency.
3. Being the lender of last resort for banks.
Additionally, it comprises of twelve (12) Federal Reserve Bank regionally across the United States of America and seven (7) board of governors.
A "tariff" on imported products is an example of a trade barrier that is always preferred to the free trade, because it generates government revenues in addition to restricting the amounts of imports.
A. True
B. False
Answer:
The answer is true
Explanation:
One of the most common trade barriers is a tariff. Tariff is a tax imposed by the government on imported goods and services. Imposing tariffs on imported goods and services raise their prices.
Imposing tariff on imported goods can either be done to raise government revenue or to protect indigenous companies.
Prepare journal entries to record these transactions:
A) Morrell Corporation disposed of two computers at the end of their useful lives. The computers had cost $4,800 and their Accumulated Depreciation was $4,800. No residual value was received.
B) Assume the same information as (a), except that Accumulated Depreciation, updated to the date of disposal, was $3,600.
Answer:
Cost of Computer= 4,800
Annual depreciation = 4,800
No residual value
a) Need to assume depreciation is 3,600 at the date of disposal
b) same information
Recording the Disposal of a Long-lived Asset
DEBIT CREDIT
a. Accumulated Depreciation $4,800
Computer Account $4,800
b. Accumulated Depreciation $3,600
Loss on disposal $1,200
Computer $4,800
When a negative amount is in the base period and a positive amount is in the analysis period (or vice versa), a meaningful percent change cannot be calculated.
A. True
B. False
Answer:
false
Explanation:
for example, the base year has a value of -10 and the period of analysis as a value of 5, percentage change is -1.5 or 150%
the base year has a value of 5 and the period of analysis as a value of -10 percentage change is -300%
The inflation rate over the past year was 1.8 percent. If an investment had a real return of 7.2 percent, what was the nominal return on the investment
Answer:
9.13%
Explanation:
The computation of the nominal return on the investment is shown below:
As we know that
Nominal interest rate = {(1 + real interest rate) × (1 + inflation rate)} - 1
= {(1 + 0.072) × (1 + 0.018)} - 1
= (1.072 × 1.018) - 1
= 9.13%
Hence, the nominal interest rate could be find out by applying the above formula i.e by considering the real interest rate and the inflation rate