Answer:
Net income for Cawley Company is $65,300.
Explanation:
Stunner and Shocker income will be proportionate to Cawley company since these production lines produce net income more than the minimum threshold. Tingler production line has net income less than minimum threshold and the company may think of shutting this production line.
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
. 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.
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.
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:
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%
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
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:
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
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.What are the benefits of multiple marketing channels? Are there any disadvantages?
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
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
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)
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.
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.
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.
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.
Farmer Owens has an apple orchard that must be pollinated by bees in order to bear fruit. Farmer Owens's neighbor, Maude, owns beehives with bees that can pollinate the apple trees. Suppose the benefit of the bees to Farmer Owens is $ per year. Suppose the bees provide no benefit to Maude but she must pay $ per year to maintain the hives. If Farmer Owens and Maude engage in Coase bargaining, what would likely result?
Answer: A. Farmer Owens would pay Maude between $3,000 and $5,000 to maintain the hives.
Explanation:
Coarse bargaining refers to a scenario where parties involved in a conflict over property rights can reach an efficient agreement that would reflect the costs and values of the property in question.
In this scenario, Farmer Owens is making a benefit of $5,000. Owens would therefore be willing to pay a maximum of $5,000 for the benefit and no more.
Maude spends $3,000 on the hives which means that she needs a minimum of $3,000 to cover those costs.
They should therefore reach an agreement where Farmer Owens would pay between $3,000 and $5,000 to Maude so that she can maintain the hives.
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
describe the role of the public sector
Answer:
The public sector includes all sorts of government (central, state, and local). It provides basic goods or services that are either not, or cannot be, provided by the private sector, for example, schools, roads, etc.
Explanation:
hope this helps!! please mark brainliest :))
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
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
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.
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
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%
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.
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
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
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)
(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