Answer:
Alvear Corp.'s Operating Income for the year ended 12/31/2015 after correcting the mistakes is $0.
Explanation:
Note: This question is not complete. The complete question is therefore provided before answering the question. See the attached pdf file file for the complete question.
The explanation of the answer is now provided as follows:
Operating income refers to the amount of profit that a business realized from its operations after operating expenses have been deducted.
Operating expenses are cost incurred by a business in its normal business operations.
The following two mistakes are prominent in the income statement in this question:
1. Gain on sale of equipment is included as part of Total Revenue instead of including under Other Income.
2. Interest Expense is included as part of operating expenses instead of including it under Interest income (expenses).
To correct this mistake, the income statement is prepared again appropriately using a Multi-step income statement format that shows gross profit and the detailed of each category of expenses and incomes to arrive at the net income.
Note: See the attached excel file for the new multi-step income statement that shows Alvear Corp.'s Operating Income for the year ended 12/31/2015 after correcting the mistakes.
In the attached excel file, Alvear Corp.'s Operating Income for the year ended 12/31/2015 after correcting the mistakes is $0 (see red color).
Ragland Corp. purchases supplies on account for $1,000 and appropriately records the transaction in an asset account. A count of inventory at year-end indicates that $300 of supplies are remaining. The adjusting journal entry required at year-end includes:_____.
Answer and Explanation:
The adjusting entry is shown below:
Supplies Expense A/c $700
To Supplies A/c $700
(Being the supplies expense is recorded)
The supplies expense is computed below
= Supplies purchased made - supplies on hand
= $1,000 - $300
= $700
For recording this we debited the supplies expense as it increased the expenses and credited the supplies as it decreased the assets
Temple Company has $500,000 of 9% bonds that pay interest on June 30 and December 31 and have an authorization date of January 1, 2019. The company issues the bonds on March 1, 2019, at par, plus accrued interest.Prepare the journal entry to record the issuance of the bonds.
Answer:
Dr Cash ($500,000 * $103 / $100) $507,500
Cr Bond Payable $507,500
Cr Bond premium $7,500
Explanation:
The bond was issued at 1st March and the interest due is at 31st of December which means that first 2 month interest has been accrued and thus requires journal entry to record:
Dr Interest Expense ($500,000 * 9% * 2/12) $7,500
Cr Interest Payable $7,500
At the issuance date, the price of the bond is $103 and this is the price that was received when the bond was issued, hence the cash collected would be:
Cash Collected = ($500,000 * $103 / $100) = $515,000
$7,500 would be the interest accrued which means:
Cash collected for bond = $515,000 - $7,500 = $575,000
Now the entry would be:
Dr Cash ($500,000 * $103 / $100) $507,500
Cr Bond Payable $507,500
Cr Bond premium $7,500
Reasons why estimating time and cost are important include all of the following EXCEPT:_________
A) To schedule work.
B) To determine how long the project should take and cost.
C) To develop cash flow needs.
D) To determine how well the project is progressing.
E) To help establish a project selection process.
Answer:
E) To help establish a project selection process.
Explanation: Estimating the time and cost of a project or a business activity is very important as it will to schedule the work, determine the financial requirements of a project,to determine how well the project is performing or progressing etc.
Time and cost of a project are very important to an organisation as they are part of the factors to be analysed and put into consideration when carry or choosing a project.
________ refers to a subset of expatriates who are citizens of a foreign country working in the home country of their multinational employer.
Answer:
Inpatriates
Explanation:
Inpatriates is an employee most known as specialist or a professionals of a multinational company who is from a foreign country, but is moved or posted from a foreign subsidiary to the corporation’s headquarters which is located in the home country of the multinational employer.
Jen agrees to buy Kev's Dirt Bike business on the express condition that Valley Credit Union approves the financing. This approval is:______.
A) a concurrent condition.
B) a condition precedent.
C) a condition subsequent.
D) an implied condition.
Answer:
B) a condition precedent.
Explanation:
A condition precedent is an event or state of affairs that is required before something else will occur. It is a condition precedent because, without the approval of the loan which should come first, Jen would not be interested in buying the Dirt Bike business owned by Kev.
Chik’s Chickens has accounts receivable of $6,333. Sales for the year were $9,800. What is its average collection period?
Answer:
235.5 days
Explanation:
Chik's chicken has accounts receivables of $6,333
The sales for the year for Chik's chicken is $9,800
The first step is to calculate the receivables turnover
= $9,800/$6,333
= 1.55
Therefore the average collection period for Chik's chicken can be calculated as follows
= 365/1.55
= 235.5 days
Hence the average collection period for Chik's chicken is 235.5 days
A military organization is very structured. Ranks are very clear, defining who can give and who must take orders. This is an example of
Answer:
vertical management
Explanation:
The flow of information that takes flows from the top management to the subordinates is said to be vertical management. The information is passed from the managers to the employees at the lower levels. Primarily the feedback are communicated in this form of management. The control of the higher authority is high and strong.
The given excerpt is an example of vertical management that flows in the military organization.
Explain how accrual accounting differs from cash basis accounting if:A. Prepaid insurance beginning $400B. Payments for insurance during the period $1,200C. Prepaid insurance ending $700
Answer:
Difference between accrual accounting and cash basis accounting:
The insurance expense for the period will be $900 under the accrual accounting basis. But with the cash basis of accounting, the insurance expense for the period will be $1,200 being the amount of insurance paid during the period.
Explanation:
a) Data:
A. Prepaid insurance beginning $400
B. Payments for insurance during the period $1,200
C. Prepaid insurance ending $700
With accrual basis, the insurance prepaid of $400 at the beginning will be accounted as expense in the current year when the services are consumed. The amount would be debited to the Prepaid Insurance account as a current asset. The payments for insurance during the period of $1,200 are also added to the beginning prepayment. Then the prepaid insurance ending of $700 is deducted (credited) to the insurance account to arrive at the insurance expense for the period.
The cash basis accounting will charge the sum of $1,200 as the insurance expense for the period with no regard for the beginning and ending balances of prepayments.
What is the present value of $9,500 payable at the end of 7 years? Use a nominal rate (monthly compounding) of 8.25%.
Answer:
PV= $5,342.89
Explanation:
Giving the following information:
Future value (FV)= $9,500
First, we need to calculate the monthly interest rate (i) and the number of periods (n):
i= 0.0825/12= 0.006875
n= 7*12= 84
To calculate the present value, we need to use the following formula:
PV= FV/(1+i)^n
PV= 9,500/(1.006875^84)
PV= $5,342.89
Granite Enterprises acquired a patent from Southern Research Corporation on January 1, 2021, for $3.7 million. The patent will be used for five years, even though its legal life is 20 years. Rocky Corporation has made a commitment to purchase the patent from Granite for $170,000 at the end of five years. Compute Granite's patent amortization for 2021, assuming the straight-line method is used.
Answer:
$706,000
Explanation:
Amortisation is a method used in expensing the cost of a natural resource
Straight line depreciation expense = (Cost of asset - Salvage value) / useful life
Useful life = 5
cost of the asset = $3.7 million.
Salvage value = $170,000
($3.7 million - $170,000 ) / 5 = $706,000
Kouba Corporation is working on its direct labor budget for the next two months. Each unit of output requires 0.52 direct labor-hours. The direct labor rate is $9.00 per direct labor-hour. The production budget calls for producing 1,700 units in April and 1,600 units in May. The company guarantees its direct labor workers a 40-hour paid work week. With the number of workers currently employed, that means that the company is committed to paying its direct labor work force for at least 960 hours in total each month even if there is not enough work to keep them busy.Required Construct the direct labor budget for the next two months. (Round your answers to 2 decimal places.) April May Required production in units Direct labor-hours per unit Total direct labor-hours needed Total direct labor-hours paid Total direct labor cost
Answer:
Kouba Corporation
Direct labor budget for April and May:
April May
Production in units 1,700 1,600
Direct labor-hours per unit 0.52 0.52
Total direct labor-hours needed 884 832
Total direct labor-hours paid 960 960
Direct labor rate $9.00 $9.00
Total direct labor cost $8,640 $8,640
Explanation:
a) Data and Calculations:
April May
Production in units 1,700 1,600
Direct labor-hours per unit 0.52 0.52
Total direct labor-hours needed 884 832
Total direct labor-hours paid 960 960
Direct labor rate $9.00 $9.00
Total direct labor cost $8,640 $8,640
Idle hours paid for 76 128
Cost for idle hours $684 $1,152
b) The Kouba Corporation pays its workers for a total of 204 idle hours with a total cost of $1,836 for the two months period. This amount is substantial, about 10% of the total amount paid for the two months.
Juan and Rita are having trouble with new employees Peters and Jackson, indicating which of the four targeted areas of change is most needed?
Answer:
people
Explanation:
There are four areas that are subject to change as the organization frequently tries to adjust to internal and external pressures. These four areas includes:
1. Strategy
2. People
3. Structure
4. Technology
However, in this case, it has been established that, Juan and Rita are having trouble with new employees Peters and Jackson, this is implies or indicates that areas of change is most needed is PEOPLE, because in this case, the problem is between people.
Number the following activities from 1 to 3 in the order corresponding to the typical flow of cost in a CPA firm.
Record the time worked on a client project by professional staff.
Record the completion of a client project.
Record the application of office overhead.
Answer:
1. Record the time worked on a client project by professional staff.
The first thing is do is to record the time the client was worked on by a professional staff because CPAs should be charging by the hour.
2. Record the completion of a client project.
The record the completion of a client project so that the project can be considered finished. The total hours worked will be totalized here.
3. Record the application of office overhead.
After the completion of the project the overhead costs are now apportioned and recorded.
What are the five key things you must know in order to identify opportunities in your area of work?
Answer:
The answer is below
Explanation:
Five key things you must know in order to identify opportunities in your area of work are:
1. Study industry trends and insights, by checking the latest or current infographics on your industry.
2. Study top executives in the industry, through interviews, magazines profiles, and their company websites.
3. Pay attention to both existing and potential clients' needs.
4. Understand the present challenges in the industry and think the solution
5. Attend conferences and seminars relating to your industry.
For the past six years, the stock price of Slippery Rock Mining has been increasing at a rate of 6.6 percent per year. Currently, the stock is selling for $73 per share and has a required return of 9.1 percent. What is the dividend yield?
Answer:
2.50%
Explanation:
The dividend yield can be computed by dividing annual dividend by share price. As the dividend is not given in the question, we will find the dividend first by the required return formula and then divide it by share price in order to calculate the yield.
DATA
Annual dividend =?
Growth rate = 6.6%
Share price = $73
Required return = 0.1%
Solution
Required return = (D1/price) + growth rate
0.091 = (D1 / 73) + 0.066
0.025 = D1 / 73
D1 = 1.825
Dividend yield = (D1 / price) * 100
Dividend yield = (1.825 / 73) * 100
Dividend yield = 2.50%
On January 2, 20X4, West Co. issued 9% bonds in the amount of $500,000, which mature on January 2, 20X24. The bonds were issued for $469,500 to yield 10%. Interest is payable annually on December 31. West uses the interest method of amortizing bond discount. In its June 30, 20X4, balance sheet, what amount should West report as bonds payable?
Answer:
$470,425
Explanation:
The computation of the amount reported as bond payable is shown below:
Particulars Interest at 4.5% Interest at 5% Amortized UnAmortized CV
discount discount
Starting value $30,500 $469,500
($500,000 - $469,500)
June 30 $22,500 $23,475 $975 $29,525 $470,425
($500,000 × 4.5%) ($469500 × 5%)
The six months rate would be the half of the rates given in the question
After the USA introduces a tariff in the market for gigastraps, the price of gigastraps in the USA will:
Answer:
I'm not sure what a gigastrap is or if it is just a some term made up for this question, but whenever an import tariff is set, the price of the product will increase. It doesn't matter if it is something simple as sugar, microchips, diamonds, cars, etc. It doesn't even matter if the product can be produced domestically or not, the price will still increase since the domestic producers will increase their price to match the increase in price of foreign goods. This is the reason why sugar is so expensive in the US, since the domestic producers charge extremely high prices because they know there is no way foreign sugar producers can compete with them due to the import tariffs and quotas.
[The following information applies to the questions displayed below.]
The following financial statement information is from five separate companies.
Company A Company B Company C Company D Company E
December
31, 2018
Assets $ 44,000 $ 34,320 $ 28,160 $ 78,320 $ 120,120
Liabilities 36,080 24,024 15,206 54,040 ?
December
31, 2019
Assets 49,000 35,280 ? 89,180 135,240
Liabilities ? 23,990 16,086 42,806 106,839
During
year 2019
Stock
issuances 6,000 1,400 9,750 ? 6,500
Net income
(loss) 11,630 ? 7,900 15,094 8,877
Cash
dividends 3,500 2,000 5,875 0 11,000
Compute the amount of assets for Company C on December 31, 2019. (Enter losses amount with a minus sign, wherever required.)
Answer:
= $40,815
Explanation:
For computing the assets first determine the equity for the year 2018 which is shown below:
Equity is
= Total assets - total liabilities
= $28,160 - $15,206
= $12,954
Now the total assets for the year 2019 is
= total liabilities + total equity
= $16,086 + $12,954 + $9750 + $7,900 - $5,875
= $16,086 + $24,729
= $40,815
You are CEO of Eastco, and you recently paid $58,000 or about 2x revenue (well under industry average) to purchase Westco, which makes a product nearly identical to yours. This move will allow you to operate in both regions (East and West) of the country. If you combine the markets, the total Fixed Cost would be $11,000 per month, and your larger purchase size will allow you to advantageous terms for your raw materials, meaning VC will be $4 per unit. Demand and MR in the combined market is as follows:
Qd = 600 - 6P
MR = 100 - 0.333Q
A) Compute your profit in the combined market. Additional analysis shows that demand and fixed costs are different in the 2 regions. The West has the following demand and Mg:
Qd = 300 - 4P
MR = 75 - 0.5Q
Fixed costs associated with operating in the West are $5000/month. While the East is a less price sensitive market:
Qd = 300 - 2P
MR = 150 - Q
Fixed costs associated with operating in the East are $6000/month. The area manager from the East suggests you use a strategy that charges each market a separate price. If you operate in separate markets, the VC associated with each unit is $5.
B) Calculate your profits using this strategy. What is this strategy called?
C) What strategy do you suggest in the Long Run?
Answer:
Profit in the combined market OR Combined profit is
π = -0.1665Q² + 96Q - 11,000 dollars
Explanation:
NOTE: The second or B part of the question is incomplete hence only answers to A part are provided
(A) The data given are:
TFC = $11,000 /month
TVC = $4 /unit = $4Q
QD = 600 - 6P
MR = 100 - 0.333Q
The data derived from this are:
TC = TFC + TVC = 11,000 + 4Q
PROFIT = TR - TC
TR = ∫MR = ∫(100 - 0.333Q) = 100Q - 0.1665Q²
PROFIT = 100Q - 0.1665Q² - 11,000 - 4Q
PROFIT = -0.1665Q² + 96Q - 11,000 dollars
If the money used to purchase WestCo is factored in, then you'll subtract it from this profit. That will be;
PROFIT = -0.1665Q² + 96Q - 69,000 dollars
High-End Fashions, Inc., bought a production line of ankle-length skirts last year at a cost of $500,000. This year, however, miniskirts are hot in the market and ankle-length skirts are completely out of fashion. High-End has the option to rebuild the production line and use it to produce miniskirts with a cost of $300,000 and expected revenue of $700,000. How should the company treat the cost of $500,000 of the old production line in evaluating the rebuilding plan
Answer:
the $500,000 that the old production line costed must be treated as a sunk cost. Sunk costs are costs that have already been incurred and the firm cannot recover them no matter what they do. in this case, since ankle-length skirts are out of fashion, the production is useless and is worth $0.
Explanation:
Corporation has the following data as of December 31, : Total Current Liabilities $36,210 Total Stockholders' Equity $ ? Total Current Assets 58,200 Other Assets 36,800 Long-term Liabilities 139,630 Property, Plant, and Equipment, Net 206,440 Compute the debt to equity ratio at December 31, . (Round your answer to two decimal places, X.XX.)
Answer:Debt Equity ratio= 1.40
Explanation:
Assets
Current Assets $ 58,200
Other Assets $36,800
Property Plant & Equipment (net) =$ 206,440
Total Assets =$301,440
Liabilities
Current Liabilities =$ 36,210
Long Term Liabilities =$139,630
Total Liabilities=$175,840
Total Stockholder's Equity= Total assets - total liabilities
=$301,440-$175,840
=$125,600
Debt Equity ratio = Total liabilities/ Total Stockholder’s Equity
= $175,840/$125,600
= 1.40
A loss on sale of equipment is added to net income in determining cash provided by operations under the indirect method.
A. True
B. False
Answer: A. True
Explanation: In creating a statement of cashflow, the direct or Indirect method may be employed. The Indirect method simply starts from the net income or loss by making necessary adjustment to the net income before arivubg at cash made from operating activities. Hence, Indirect methods starts calculation from the net income. This is the opposite in direct method whereby cash inflows and outflows from operating activities are used to arrive at the net income or cashflow.
Consider the following sentence: In order to swim for an hour, Paolo must take time away from work, where he earns $11 per hour. This is in addition to paying a $4 entrance fee for the pool. Which basic principle of individual choice do these statements best illustrate?
Answer: The cost of something is what you give up to get it
Explanation:
The options to the question are:
1.) The cost of something is what you give up to get it
2) Markets are usually a good way to organize economic activity
3) People usually exploit opportunities to make themselves better off.
4) Trade can make everyone better off
This has to do with opportunity cost whereby there's always a trradeoff between two goods. One has to make a choice and leave out one economic decision in order to make another decision.
This can be seen in the question where we were told that In order to swim for an hour, Paolo must take time away from work, where he earns $11 per hour. This is in addition to paying a $4 entrance fee for the pool.
What is the amount of equity on December 31, 2011?
Company
A Company
December 31, 2010
Assets $ 35,000
Liabilities 28,700
December 31, 2011
Assets 38,000
Liabilities ?
During year 2011
Owner investments 6,000
Net income (loss) 8,300
Owner cash
withdrawals 3,500
Answer:
$17,100
Explanation:
For computing the ending equity first we have to determine the beginning equity which is shown below:
As we know that
Accounting equation comprise of
Total assets = Total liabilities + stockholder equity
$35,000 = $28,700 + stockholder equity
So, the stockholder equity is
= $35,000 - $28,700
= $6,300
Now the ending equity is
= beginning equity + owner investments + net income - withdrawls
= $6,300 + $6,000 + $8,300 - $3,500
= $17,100
Briefly explain whether each of the following is primarily a microeconomic issue or a macroeconomic issue.
a. The effect of higher cigarette taxes on the quantity of cigarettes sold
b. The effect of higher income taxes on the total amount of consumer spending
c. The reasons for the economies of East Asian countries growing faster than the economies of sub-Saharan African countries
d. The reasons for low rates of profit in the airline industry
Answer: Micro; Macro; Macro; Micro.
Explanation:
Economics is divided into two main segments which are microeconomics and macroeconomics. It should be noted that microeconomics deals with study of individuals and the firms while macroeconomics studies the while economy and looks at decisions that are made by governments and countries.
a. The effect of higher cigarette taxes on the quantity of cigarettes sold.
This is a microeconomic issue as one entity is being discussed which is cigarette and the issue is related to just one particular industry.
b. The effect of higher income taxes on the total amount of consumer spending.
This is a macroeconomic issue as taxes affects the whole economy. The whole nation is affected by this decision.
c. The reasons for the economies of East Asian countries growing faster than the economies of sub-Saharan African countries.
This is a macroeconomic issue as it relates to different countries.
d. The reasons for low rates of profit in the airline industry.
This is a microeconomic issue as the issue affects just the airline industry.
different types of products and services
Answer:
Classification of Products and Services.
Convenience Goods. These are products that consumers purchase often and habitually, without much thought given.
Shopping Goods. In contrast, consumers looking to purchase shopping goods are more willing to do research and compare different product options....
Specialty GoodsUnsought Goods.ᐛ
W02_06.
is the popular name for a free-market economy in which business people make most of the
decisions about what products to produce, how many workers to hire, and what prices to charge for goods
and services.
Select one:
a. Communism
b. Marginalism
ec. Capitalism
d. Socialism
Answer:
it is capitalism
Explanation:
This is so becauae , capitalism is a free market economy where the individual business people do most in the economy by deciding what to produce , workers to hire etc than the government
In a statement of cash flows, the sale of a long-term investment would ordinarily be classified as:_____.a. an operating activity.
b. a financing activity.
c. an investing activity.
d. a lending activity.
Answer:
c. an investing activity.
Explanation:
The sale and acquisition of items of Property, Plant and Equipment is classified under investing activities in the cash flow statement.
Therefore, the sale proceeds following the sale of a long-term investment would ordinarily be classified as a cash inflow from investing activity.
determine the present value of 15000 is to be received at the end of eight years and the discount rate is 9%
Answer:
PV= $7,528
Explanation:
Giving the following information:
Future value= $15,000
Number of periods= 8 years
Interest rate= 9% compounded annually
To calculate the present value, we need to use the following formula:
PV= FV/(1+i)^n
PV= 15,000/(1.09^8)
PV= $7,528
ABC Inc. manufactures bedding sets. The budgeted production is for 55,000 comforters in 2012. Each comforter requires 7 yards of material. So 385,000 yards will be needed. The estimated January 1, 2012, beginning inventory is $124,000 in material. The desired ending balance is $120,000 in material. If the material costs $4.00 per yard, determine the direct materials budget for 2012.
Answer:
Total direct material cost= $1,536,000
Explanation:
Giving the following information:
So 385,000 yards will be needed.
The estimated January 1, 2012, beginning inventory is $124,000.
The desired ending balance is $120,000.
The material costs $4.00 per yard.
To determine the direct material budget, we need to use the following formula:
Purchases= production + desired ending inventory - beginning inventory
Direct material budget:
Production= 385,000*4= 1,540,000
Desired ending inventory= 120,000
Beginning inventory= (124,000)
Total direct material cost= $1,536,000