Budgeted Income Statement for the Quarter Ended March 31, 2019:
Gross Profit: $121,600 (Total Sales - Cost of Goods Sold)
Selling and Administrative Expenses:
Commissions Expense: $6,080
Salaries Expense: $5,500
Rent Expense: $4,500
Depreciation Expense: $500
Insurance Expense: $200
Total Selling and Administrative Expenses: $16,780
Operating Income (Loss): Gross Profit - Total Selling and Administrative Expenses
Net Income (Loss): Operating Income (Loss) - Budgeted Income Tax Expense
Budgeted Balance Sheet as of March 31, 2019:
Assets:
Cash: $25,000
Accounts Receivable: $24,000
Merchandise Inventory: $13,000
Prepaid Insurance: $1,700
Equipment and Fixtures: $50,000
Total Assets: Sum of the above amounts
Liabilities and Equity:
Accounts Payable: $12,000
Salaries and Commissions Payable: $17,000
Common Stock: Total common stock balance from the post-closing trial balance
Retained Earnings: Total retained earnings balance from the post-closing trial balance
Total Liabilities and Equity: Sum of the above amounts
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In one page: List and explain the four steps followed in the
accounting process.
The accounting process involves four steps: recording, classifying, summarizing, and interpreting financial transactions. These steps ensure accurate and meaningful financial information for decision-making.
1. Recording: The first step in the accounting process is to record financial transactions. This involves identifying and documenting relevant information, such as the date, amount, and nature of the transaction, in the appropriate accounting journals or ledgers. This step ensures that all financial activities are accurately captured.
2. Classifying: After recording transactions, the next step is to classify them into relevant categories. This involves organizing transactions based on their nature (e.g., revenue, expense, asset, liability) and assigning them to specific accounts. Classifying transactions enables easier analysis and reporting of financial information.
3. Summarizing: Once transactions are recorded and classified, they are summarized in financial statements. This step involves preparing the balance sheet, income statement, and cash flow statement. Summarizing financial data allows stakeholders to understand the financial position, performance, and cash flows of an entity.
4. Interpreting: The final step is to interpret the financial information presented in the financial statements. This involves analyzing the data, identifying trends, comparing performance against benchmarks or prior periods, and drawing meaningful conclusions. Interpreting financial information helps stakeholders make informed decisions, evaluate the financial health of an entity, and assess its future prospects.
In conclusion, the accounting process comprises recording, classifying, summarizing, and interpreting financial transactions. These steps ensure accurate and meaningful financial information that is vital for decision-making and evaluating the financial performance of an entity.
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On December 31, 2013, Bravo Co. paid $$$20,000 to acquire the whole business of Rukab's Ice Cream Co., which became a division of Bravo. Rukab reported the following balance sheet at the time of the acquisition, and in the last column the related FMV amounts to each account. Assets Cost $100,000 FMV $100,000 Cash Receivables 60,000 60,000 Merchandise Inventory 80,000 100,000 Land 100,000 250,000 Equipment (net) 70,000 30,000 Patent 25,000 Total Assets $410.000 $65,000 Liabilities & S.H.E Cost FMV Payables 50,000 50,000 Mortgage payable 90,000 70,000 100,000 110,000 Bonds payable Common Stock 70,000 ROORO Retained Earnings Total Liabilities & S.H.E 100.000 410,000 nei 235 nob Soodwill 185,00 Over the first year of operations, the newly purchased division experienced operating insses. In addition, it now appears that it will generate substantial losses for the foreseeable future. Presented below is net assets information related to Rukab Division of Bravo Co. on December 31,2014. fu 2015 је Rukat Division Net Assets December 31, 2014 Cash Receivables $50,000 So 000 40,000 30000 60,000 Co 250,000 30000 Merchandise Inventory Land- Equipment (net) 25,000 28000 20,000 22030 Patent 120 Goodwill Payables (40000) Mortgage payables 1600. Bonds payable 25 (40,000) (135,000) 8000) ape (155,000) 172002 n 12p00 300,000 1 it is determined that the fair value of Rukab Division is $250,000. The recorded amounts for Bravo's net assets (excluding goodwill) is the same as fair value, except for land which has a fair RS p value of $50,000 above carrying value, equipment which has a fair value of $5,000 below carrying value, receivables which has a fair value of $10,000 below carrying value, mortgage payable, which has a fair value of $25,000 above carrying value and bonds payable which has a fair value of $15,000 above carrying value. Required a) Compute the amount of goodwill for Bravo Corporation on the purchase of Rukab's Ice Cream Company (if any) on December 31, 2013. (6 points) b) Prepare the journal entry (if any) to record impairment of goodwill at December 31, 2014. (8points) Test 1 het identiiugly Asset on Dec 21, 2014 = 300.000 relentlingly c) At December 31, 2015, it is estimated that the division's fair value increased to $100,000. Prepare the journal (if any) to record this increase in fair value.
On December 31, 2013, Bravo Co. acquired Rukab's Ice Cream Co. for $20,000. The goodwill amount resulting from the acquisition is $185,000.
To calculate the goodwill, we need to compare the fair value of Rukab Division at the time of acquisition with the fair value of its identifiable net assets. The fair value of Rukab Division is given as $250,000. The fair value adjustments for various assets and liabilities are as follows:
- Land: Fair value ($250,000) - Carrying value ($100,000) = $150,000 (increase)
- Equipment: Carrying value ($30,000) - Fair value ($25,000) = $5,000 (decrease)
- Receivables: Carrying value ($60,000) - Fair value ($50,000) = $10,000 (decrease)
- Mortgage payable: Fair value ($70,000) - Carrying value ($90,000) = ($20,000) (decrease)
- Bonds payable: Fair value ($110,000) - Carrying value ($100,000) = $10,000 (increase)
Now, we can calculate the goodwill by subtracting the fair value of identifiable net assets from the purchase price:
Goodwill = Purchase price ($20,000) - Fair value of identifiable net assets ($65,000) = $185,000.
Therefore, the goodwill amount for Bravo Corporation on the purchase of Rukab's Ice Cream Company on December 31, 2013, is $185,000.
Regarding the impairment of goodwill at December 31, 2014, we need to compare the carrying amount of goodwill with its implied fair value. The net assets of Rukab Division on December 31, 2014, amounted to $300,000. Since the implied fair value ($100,000) is lower than the carrying amount of goodwill ($185,000), an impairment loss needs to be recognized. The journal entry to record the impairment of goodwill would be as follows:
Impairment Loss (Income Statement) $85,000
Goodwill (Balance Sheet) $85,000
Finally, if the division's fair value is estimated to have increased to $100,000 at December 31, 2015, no journal entry is required as it does not affect goodwill. Goodwill is only recognized at the time of acquisition and is not adjusted for subsequent changes in fair value.
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Q2. Explain the steps of the development process of a new product. Analyze and give examples of the step "Commercialization". (3 points)
Commercialization of a product is a significant step in the development process as it defines the success of a product. It is a process of introducing a product to the target audience. It includes promotion, sales, and distribution strategies. The following are some examples of the step Commercialization:Launch a social media campaign to generate awareness about the product. Conduct public relations events to attract interest in the product. Arrange in-store product demos to encourage customers to try out the product.Create packaging that reflects the quality of the product.
Product development is the process of creating new products, services, and processes to satisfy consumer needs. A development process of a new product consists of six steps. They are as follows:1. Idea generation - A new product idea should be created through consumer feedback, market research, and internal R&D.2. Concept Development and testing - The idea is tested by converting it into a concept, which is evaluated by consumers to check its feasibility.3. Business Analysis - At this stage, the product is evaluated for its potential contribution to the company’s profitability, competition, and demand.4. Product Development - After analyzing the business, the actual product development takes place. In this stage, the product design, development, and production takes place.5. Test marketing - It involves launching the product in a small market or a test market to determine its acceptance rate.6. Commercialization - If the product passes the test marketing stage, it is introduced to the full market. The marketing strategy is implemented, and the product is made available to the consumers. The process of Commercialization is the final stage of the product development process. It refers to the process of introducing a new product into the market for sale to consumers.
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Which of the following random number assignments could be used for an event that has a 32% chance of occurrence? O 00-0.32 inclusive 0.67-0.99 inclusive O 0.25-0.75 inclusive O 00-0.31 inclusive
the event is considered to have occurred. Since the range covers 32% of the total probability space (0.00 to 1.00), it aligns with the desired probability of occurrence.
Given the s provided:
00-0.32 inclusive
0.67-0.99 inclusive
0.25-0.75 inclusive
00-0.31 inclusive
Out of these s, the range "00-0.31 inclusive" is the most suitable for an event with a 32% chance of occurrence.
In this range, the numbers span from 0.00 to 0.31.
range, the event is considered to have occurred. Since the range covers 32% of the total probability space (0.00 to 1.00), it aligns with the desired probability of occurrence.
It's important to note that the random number assignment should be uniform, meaning each value within the range has an equal chance of being selected. This ensures fairness and accuracy in representing the probability of the event.
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Which of the following $1000 face-value securities has the lowest yield to maturity? a. A 15 percent coupon bond selling for $900 Ob. A 15 percent coupon bond selling for $800 O c. A 15 percent coupon
To determine the lowest yield to maturity among the given securities, we need to compare their prices relative to their face values and coupon rates.
Yield to maturity (YTM) represents the total return an investor would receive if they hold the bond until maturity. It is influenced by the bond's price, coupon rate, and time to maturity.
In this case, we have three $1000 face-value securities with a 15 percent coupon rate. Let's analyze each option:
a. A 15 percent coupon bond selling for $900:
This bond is selling below its face value, indicating a discount. The price is lower than the face value, which increases the yield to maturity.
b. A 15 percent coupon bond selling for $800:
Similar to the previous bond, this bond is also selling below its face value. With a lower price, the yield to maturity will be higher.
c. A 15 percent coupon bond selling for $1000:
This bond is selling at its face value, indicating no premium or discount. The price matches the face value, resulting in a yield to maturity equal to the coupon rate of 15 percent.
Comparing the options, the bond with the lowest yield to maturity is option c, which is a 15 percent coupon bond selling for $1000. Since its price matches the face value, the yield to maturity is equal to the coupon rate.
Therefore, the correct answer is option c.
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Question Completion Status: QUESTION 2 Which of the following statements is incorrect? O A. Cash expenses are the total cash outflows within a given month B. The cash receipts and cash expenses are an
The incorrect statement is:
A. Cash expenses are the total cash outflows within a given month.
The correct statement is:
B. The cash receipts and cash expenses are an integral part of the cash flow statement.
Cash expenses refer to the cash outflows or payments made by a company during a specific period, which can include expenses such as salaries, rent, utilities, and other operating expenses. These expenses are recorded on the income statement and are an integral part of calculating the net income.
The cash flow statement, on the other hand, provides information about the cash inflows and outflows of a company during a specific period. It includes cash receipts from sales, loans, investments, as well as cash payments for expenses, investments, and financing activities. The cash flow statement helps analyze the company's ability to generate cash and manage its liquidity.
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Sources of funds to help pay for education expenses would
not include:
Group of answer choices
a.A home equity line of credit.
b.A federal student loan.
c.A Small Business Administration loan.
d. Qual
The source of funds that would not include paying for education expenses is a Small Business Administration loan. Other options, such as a home equity line of credit and federal student loans, can be used to help cover education expenses.
A Small Business Administration (SBA) loan is not typically used as a source of funds for education expenses. SBA loans are designed to provide financial assistance to small businesses, helping them with startup costs, working capital, or expansion efforts. These loans are not intended for personal use or education-related expenses.
On the other hand, a home equity line of credit (HELOC) can be used to finance education expenses. HELOCs allow homeowners to borrow against the equity in their homes, providing them with a flexible source of funds. This option can be advantageous as the interest rates on HELOCs are often lower than other types of loans.
Federal student loans are specifically designed to help students cover their education costs. These loans are offered by the government and typically come with favorable interest rates and flexible repayment options. They are a common source of funding for students pursuing higher education.
In summary, while a Small Business Administration loan is not suitable for education expenses, options like a home equity line of credit and federal student loans can be utilized to help pay for educational costs.
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What was the total amount of cash received during the year by Alpha? O The correct answer is not listed. O $144,000 O $136,000 O $170,000 O $153,000
In order to calculate the total amount of cash received during the year by Alpha, we need to add up the cash inflows from various sources. The statement of cash flows is the financial statement that provides information about the cash inflows and outflows of a company during a particular period of time.
Here is the statement of cash flows for Alpha Company: Alpha Company Statement of Cash Flows For the year ended December 31, 20X8Cash flows from operating activities: Net income$100,000Adjustments to reconcile net income to net cash provided by operating activities: Depreciation expense20,000Increase in accounts receivable10,000Decrease in accounts payable(4,000)Net cash provided by operating activities$126,000Cash flows from investing activities.
Purchases of property, plant, and equipment(35,000)Net cash used in investing activities(35,000)Cash flows from financing activities: Issuance of common stock20,000Payment of cash dividends(7,000)Net cash provided by financing activities13,000Net increase in cash61,000Cash, January 1, 20X8$75,000Cash, December 31, 20X8$136,000The total amount of cash received during the year by Alpha was $136,000. Answer: $136,000
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please explain atleast more than 1000 words.
What important factors do retailers need to consider before expanding into a new market?
Expanding into a new market requires careful consideration of various factors before making a decision.
Market demand and potential First and foremost, retailers need to assess the potential demand for their products or services in the new market. To do this, they need to carry out market research to understand the market and identify opportunities.2. Competition Retailers need to analyze the competition in the new market to understand the competitive landscape. They need to understand who the main players are and their market share.
Market entry barriers Retailers need to identify market entry barriers and the cost of overcoming them. They also need to understand the legal and regulatory environment in the new market.4. Culture and customs Retailers need to consider the cultural differences between the new market and their home market.
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37. At a lump-sum cost of $69,000, Pratt Company recently purchased the following items for resale: Item No. of Items Purchased Resale Price Per Unit $3.75 M 4,000 12.00 N 2,000 6.00 O 6,000 The appro
The appropriate cost per unit of inventory is: M: $3.38, N: $10.80, O: $5.52
To determine the appropriate cost per unit of inventory, we need to calculate the weighted average cost based on the lump-sum cost and the quantity of each item purchased.
Total cost of items purchased = $69,000
Total quantity of items purchased:
M: 4,000
N: 2,000
O: 6,000
Percentage of total cost for each item:
M: (4,000 x $3.75) / $69,000 ≈ 0.2174
N: (2,000 x $12.00) / $69,000 ≈ 0.3478
O: (6,000 x $6.00) / $69,000 ≈ 0.4348
Weighted average cost per unit:
M: $69,000 x 0.2174 / 4,000 ≈ $3.38
N: $69,000 x 0.3478 / 2,000 ≈ $10.80
O: $69,000 x 0.4348 / 6,000 ≈ $5.52
Therefore, the appropriate cost per unit of inventory is:
M: $3.38
N: $10.80
O: $5.52
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The complete question is: At a lump-sum cost of $69,000, Pratt Company recently purchased the following items for resale
Item No. of Items Purchased Resale Price Per Unit
M 4,000 $3.75
N 2,000 $12.00
O 6,000 $6.00
The appropriate cost per unit of inventory is:
M N O
$3.75 $12.00 $6.00
$3.38 $10.80 $5.40
$3.45 $11.04 $5.52
$5.75 $5.75 $5.75
please show solution and how you come up with percentages
when stocks are trading at prices above their actual worth, the resulting situation is called a(n):
The term that is used to describe the situation where stocks are trading at prices that are higher than their real worth or value is known as a bubble. In this scenario, stocks' prices increase drastically due to a rise in demand, regardless of the company's fundamental value or performance.
The phenomenon of a bubble can occur due to several reasons. One of the most common causes is a sudden increase in the demand for shares. When investors expect to get a quick return on their investments, they purchase stocks, and as a result, the prices rise. The detail answer is that bubbles usually end in a crash or a sharp decrease in prices. When the bubble bursts, the price falls rapidly, leaving investors with stocks that are worth less than they paid for. The market's demand for shares in such a situation is limited, so sellers find it challenging to sell their shares. Many investors suffer significant losses during this period, which can have a significant impact on the economy and the stock market. The rise and fall of bubbles is a common phenomenon in the stock market. Bubbles come and go, and their effects on investors are always significant. Therefore, it is crucial to be aware of the potential for bubbles and their risks. In summary, bubbles are a situation where stocks trade at prices higher than their actual worth and often end in a crash or a sharp decrease in prices. They occur due to various reasons such as a sudden increase in demand for shares, and they can have significant effects on investors and the economy.
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Assume that a bond will make payments every six months as shown on the following timeline (using six-month periods): Period 2 Cash Flows $19.98 $19.98 $19.98 $19.98+$1,000 a. What is the maturity of the bond (in years)? b. What is the coupon rate (as a percentage)? c. What is the face value? a. uyuyo The maturity is years. (Round to the nearest integer.) b. What is the coupon rate (as a percentage)? The coupon rate is%. (Round to two decimal places.) c. What is the face value? The face value is $- (Round to the nearest dollar.) Time Remaining: 01:2
a. The maturity of the bond is 1 year.
b. The coupon rate cannot be determined with the given information.
c. The face value of the bond cannot be determined with the given information.
The maturity of the bond can be calculated by multiplying the number of cash flows by the length of each period. In this case, there are four cash flows, each occurring every six months. Therefore, the maturity of the bond is 2 years.
The coupon rate can be calculated by dividing the annual coupon payment (which is the sum of all the cash flows) by the face value of the bond. In this case, the annual coupon payment is $19.98 * 4 + $1,000 = $1,079.92. To convert it to a percentage, we divide it by the face value and multiply by 100. However, the face value is not provided in the question, so we cannot calculate the coupon rate.
The face value of the bond is not provided in the question, so it cannot be determined without additional information.
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Q1:
The general manager is recognizing the exceptionally good contribution of employee by choosing the best employee of the month and issuing a recognition certificate.
Specify the source of power that this manager has?.
The source of power that the general manager has in recognizing the employee of the month and issuing a recognition certificate is reward power.
Reward power is a type of power that comes from the ability to provide incentives or rewards to individuals or groups in exchange for achieving desired outcomes. In this case, the general manager is providing recognition and a certificate as a reward for exceptional contributions made by an employee. By using this type of power, the manager is motivating employees to work harder and achieve better outcomes for the company. This can lead to improved productivity, job satisfaction, and overall success for the organization.
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an oligopoly is a market structure with many buyers
and only a small number of firms selling a differentiated or
homogeneous product
An oligopoly is a market structure characterized by a small number of firms and many buyers. These firms sell either differentiated or homogeneous products, creating competition within the market.
An oligopoly is a market structure where a few large firms dominate the industry, and there are numerous buyers. These firms have significant market power, which allows them to influence prices and control a substantial portion of the market.
Oligopolies can arise in industries where there are barriers to entry, such as high capital requirements or economies of scale. The products sold by these firms can be either differentiated, meaning they have unique features or branding, or homogeneous, where products are essentially identical.
In an oligopoly, firms compete with each other through various strategies, including pricing, advertising, and product differentiation, while considering the reactions of their competitors.
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What is the minimum lease payment that would make purchasing a precision manufacturing machine and writing a 4-year lease contract on it? The price of the machine is $175,000, it is a three-year asset for depreciation purposes, it has a residual value of $7,000, it requires $500 maintenance per year, the cost of capital is 10%, and the corporate tax rate is 40%.
The minimum annual lease payment that would make purchasing a precision manufacturing machine and writing a 4-year lease contract on it is approximately $47,141.
To determine the minimum lease payment for a precision manufacturing machine, we need to calculate the present value of all cash flows associated with the lease and set it equal to the cost of the machine. Here are the steps to do this:
Calculate the annual depreciation expense using the straight-line method: (Cost - Residual Value) / Useful life = ($175,000 - $7,000) / 3 years = $56,000 per year.
Calculate the after-tax depreciation expense by multiplying the annual depreciation expense by (1 - tax rate): $56,000 x (1 - 0.4) = $33,600 per year.
Calculate the annual maintenance expense: $500 per year.
Calculate the total cash outflows each year: lease payment = after-tax depreciation expense + maintenance expense = $33,600 + $500 = $34,100 per year.
Calculate the present value of the cash outflows using the cost of capital of 10% and a three-year lease term. We can use the present value of an annuity formula to do this: PV = lease payment x [1 - 1 / (1 + r)^n] / r, where r is the cost of capital and n is the number of periods. Plugging in the numbers, we get PV = $34,100 x [1 - 1 / (1 + 0.1)^3] / 0.1 = $87,399.
Add the residual value of $7,000 to the present value of the cash outflows to get the total present value of the lease: $87,399 + $7,000 = $94,399.
Set the total present value of the lease equal to the cost of the machine: $94,399 = $175,000.
Solve for the lease payment: lease payment = $94,399 / [1 - 1 / (1 + 0.1)^3] = $47,141 per year.
Therefore, the minimum annual lease payment that would make purchasing a precision manufacturing machine and writing a 4-year lease contract on it is approximately $47,141.
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On December 31, 2015, Hidd Corporation leased a ship from Fort Company for an eight-year period expiring December 30, 2023. Equal annual payments of $200,000 are due on December 31 of each year, beginning with December 31, 2015. The lease is properly classified as a finance lease on Hidd 's books. The present value at December 31, 2015 of the eight lease payments over the lease term discounted at 10% is $1,173,685. Assuming all payments are made on time, the amount that should be reported by Hidd Corporation as the total lease liability on its December 31, 2016 statement of financial position. A $871,054 B. $1,000,159 c. $1,091,054 D. $1,200,000
Hidd Corporation should report a total lease liability of $1,091,054 on its December 31, 2016 statement of financial position.
To calculate the total lease liability, we need to consider the lease payments made and the interest expense accrued.
In this case, the lease payments are equal annual payments of $200,000, and the lease term is eight years.
The present value at December 31, 2015, of the eight lease payments, discounted at 10%, is given as $1,173,685. This represents the initial lease liability.
To calculate the lease liability at December 31, 2016, we need to determine the interest expense for the year.
Since the lease is a finance lease, the interest expense is calculated by multiplying the beginning lease liability by the implicit interest rate.
The implicit interest rate can be derived by solving the present value equation. In this case, the present value is $1,173,685, the lease payments are $200,000 per year, and the lease term is eight years.
By solving for the implicit interest rate, we find it to be 10%.
Now, we can calculate the interest expense for the year. The beginning lease liability is $1,173,685, and the implicit interest rate is 10%. Therefore, the interest expense for the year is $1,173,685 * 10% = $117,368.50.
To determine the total lease liability at December 31, 2016, we subtract the lease payments made during the year ($200,000) from the beginning lease liability ($1,173,685) and add the interest expense ($117,368.50). The calculation is as follows:
Beginning lease liability - Lease payments + Interest expense
$1,173,685 - $200,000 + $117,368.50 = $1,091,054
Therefore, Hidd Corporation should report a total lease liability of $1,091,054 on its December 31, 2016 statement of financial position, option C.
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Common measures of a company's profitability include
price-earnings ratio
earnings per share
both a and b
quick ratio
The common measures of a company's profitability include both the price-earnings ratio and earnings per share (option C).
Common measures of a company's profitability include the price-earnings ratio (P/E ratio) and earnings per share (EPS).The price-earnings ratio is a financial metric that compares a company's stock price to its earnings per share. It indicates the market's expectations and valuation of the company's future earnings. A higher P/E ratio suggests that investors have higher expectations for future earnings growth.
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Many argue that it is unfair to ask the CEO to certify f/s that
were prepared by individuals several layers below them? Why?
it is appropriate for a CEO to certify financial statements that were prepared by people many levels beneath him is a contentious one. Many people believe that it is unfair to ask CEOs to certify financial statements that were prepared by people many levels beneath them.
The argument that is commonly made is that the CEO does not have direct knowledge of the financial transactions that are reported in the financial statements. As a result, they are not in a position to make an informed certification of the statements. Because they are not responsible for the preparation of the statements, the CEO may not be able to effectively oversee the preparation of the statements. As a result, they may not be able to provide a meaningful certification of the statements.In addition, the argument is sometimes made that CEOs are not sufficiently knowledgeable about accounting to be able to certify financial statements effectively. This argument is based on the assumption that CEOs are primarily focused on running the business, rather than understanding the intricacies of accounting and financial reporting.
There are also concerns that the certification requirement may create a conflict of interest for the CEO. If the CEO is responsible for certifying financial statements that were prepared by someone else, they may be tempted to certify statements that are not accurate in order to protect their own interests. This could result in inaccurate financial reporting, which could be damaging to the company and its stakeholders.In conclusion, there are valid arguments on both sides of the issue of whether it is appropriate for a CEO to certify financial statements that were prepared by people several levels beneath them. Ultimately, the decision of whether to require certification by the CEO will depend on a number of factors, including the size and complexity of the organization, the nature of its operations, and the level of risk associated with financial reporting.
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Government Provident Fund
Recognised Provident Fund
Unrecognised Provident Fund
Study them prior to the next class.
Government Provident Fund, Recognised Provident Fund, and Unrecognised Provident Fund are different types of savings schemes provided by the government or employers for the benefit of employees.
What are the various types of provident funds?In a nutshell, Government Provident Fund is a fund managed by the government for its employees, Recognised Provident Fund is a fund set up by an employer and approved by the government, and Unrecognised Provident Fund is a fund set up by an employer without government approval.
Government Provident Fund, which is typically available to government employees and offers a secure and regulated savings scheme. It is usually managed by a government body or department, ensuring transparency and compliance with set rules and regulations.
Recognised Provident Fund, on the other hand, is established by an employer in compliance with government regulations. These funds are registered with the appropriate authorities and provide employees with the benefit of tax exemptions on their contributions, subject to certain conditions. Employers also contribute to the fund, making it a valuable long-term savings tool for employees.
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Find an example of a Bertrand Game from the mainstream press.
Clearly identify the players, their strategies, and payoffs. Your
choice may cite an example of a Bertrand Game that was avoided or
one th
One example of a Bertrand game from the mainstream press is the airline industry's pricing competition.
In this game, the players are two or more airlines competing for passengers. The strategies of the airlines involve setting ticket prices for their flights. The payoffs are the profits earned by each airline based on the number of passengers they attract and the prices they charge.
In a Bertrand game, the players simultaneously set their prices, assuming that customers will choose the airline with the lowest price. This creates a competitive environment where airlines aim to undercut each other to attract more passengers. As a result, prices tend to be driven down to the marginal cost of providing the service.
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Todrick Company is a merchandiser that reported the following information based on 1,000 units sold: S
ales $ 465,000 Beginning merchandise inventory $ 31,000
Purchases $ 310,000 Ending merchandise inventory $ 15,500 Fixed selling expense ? Fixed administrative expense $ 18,600 Variable selling expense $ 23,250 Variable administrative expense ?
Contribution margin $ 93,000
Net operating income $ 27,900 Required: 1. Prepare a contribution format income statement. 2. Prepare a traditional format income statement. 3. Calculate the selling price per unit. 4. Calculate the variable cost per unit. 5. Calculate the contribution margin per unit. 6. Which income statement format (traditional format or contribution format) would be more useful to managers in estimating how net operating income will change in response to changes in unit sales?
The answers to all questions are:-
Selling Price per Unit = $465,000 / 1,000 units= $465
Variable Cost per Unit = ($31,000 + $310,000 - $15,500) / 1,000 units =325.5
Contribution Margin per Unit = 139.5
The contribution format income statement would be more useful to managers in estimating how net operating income will change in response to changes in unit sales.
The answers to all questions are:-
1.Contribution Format Income Statement:
Sales Revenue: $465,000
Variable Expenses:
Variable Selling Expense: $23,250
Variable Administrative Expense: ?
Total Variable Expenses: ?
Contribution Margin: ?
Fixed Expenses:
Fixed Selling Expense: ?
Fixed Administrative Expense: $18,600
Total Fixed Expenses: ?
Net Operating Income: $27,900
2.Traditional Format Income Statement:
Sales Revenue: $465,000
Cost of Goods Sold:
Beginning Merchandise Inventory: $31,000
Purchases: $310,000
Ending Merchandise Inventory: $15,500
Total Cost of Goods Sold: ?
Gross Profit: ?
Operating Expenses:
Fixed Selling Expense: ?
Fixed Administrative Expense: $18,600
Total Operating Expenses: ?
Net Operating Income: $27,900
3.Selling Price per Unit:
Selling Price per Unit = Sales Revenue / Number of Units Sold
Selling Price per Unit = $465,000 / 1,000 units
4.Variable Cost per Unit:
Variable Cost per Unit = (Beginning Inventory + Purchases - Ending Inventory) / Number of Units Sold
Variable Cost per Unit = ($31,000 + $310,000 - $15,500) / 1,000 units
5.Contribution Margin per Unit:
Contribution Margin per Unit = Selling Price per Unit - Variable Cost per Unit
6.The contribution format income statement would be more useful to managers in estimating how net operating income will change in response to changes in unit sales. This is because the contribution format separates costs into fixed and variable components, allowing managers to easily identify how changes in unit sales affect the contribution margin and ultimately the net operating income. It provides a clearer picture of the relationship between sales volume and profitability.
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Calculate the number of kanbans needed at the ABC Company for the following two products, produced in a factory that works eight hours per day, five days per week: Product 1 Product 2 300/week 150/day Usage Lead time Container size 1 week 2 weeks 20 units 30 units Safety stock 15 percent 0
Number of units needed per day = 150Lead time in days = 2 Safety stock = 0Container size = 30Number of kanbans = ((150 x 2) + (0 x 150)) / 30= (300 + 0) / 30= 10 kanbans Thus, the number of kanbans needed for Product 2 is 10.
ABC Company is producing two types of products, Product 1 and Product 2. The usage of Product 1 is 300/week and the usage of Product 2 is 150/day. The lead time for Product 1 is 1 week, while it is 2 weeks for Product 2. The container size for Product 1 is 20 units and for Product 2 is 30 units. The safety stock for Product 1 is 15%, whereas, it is 0 for Product 2. The factory works for 8 hours per day and 5 days per week. Kanban is a system used in the just-in-time (JIT) manufacturing process. In the kanban system, the production is based on the actual demand of the customer. The aim of using kanban is to avoid overproduction. It helps in the smooth flow of production. Kanban is a Japanese word that means “signal card”. It is a signal that triggers production. It is a system that uses cards to signal the production of parts from suppliers to the production line. The number of kanbans needed for the production of a product can be calculated by using the following formula:Number of kanbans = ((Demand per day x Lead time in days) + Safety stock) / Container sizeLet’s calculate the number of kanbans needed for Product 1.Number of units needed per day = 300/5 = 60Lead time in days = 1Safety stock = 15%Container size = 20Number of kanbans = ((60 x 1) + (0.15 x 60)) / 20= (60 + 9) / 20= 69 / 20= 3.45 ≈ 4 kanbansThus, the number of kanbans needed for Product 1 is 4.Let’s calculate the number of kanbans needed for Product 2.Number of units needed per day = 150Lead time in days = 2Safety stock = 0Container size = 30Number of kanbans = ((150 x 2) + (0 x 150)) / 30= (300 + 0) / 30= 10 kanbansThus, the number of kanbans needed for Product 2 is 10.
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Consider an Acceptance Sampling plan in which (20+5) items are
randomly inspected in a lot of 200. The lot is accepted if the
defectives found in the sample do not exceed two. The AQL and LTPD
are 2%
Acceptance Sampling plan is considered. The plan has (20+5) items that are randomly inspected in a lot of 200. The lot is accepted if the defectives found in the sample do not exceed two. The probability of accepting the lot is 90.06 percent.
AQL and LTPD are 2%.AQL (Acceptable Quality Limit) is a parameter that refers to the maximum defect percentage considered tolerable. The Acceptable Quality Limit is the maximum percentage of defects that are allowed in a product in order to be considered acceptable for shipment to a customer. The LTPD (Lot Tolerance Percent Defective) is the maximum percentage of defective items that are permitted in the product. The table below shows the values of a Single Sampling Plan, which is based on AQL and LTPD. The lot size is 200, and the sample size is 25 (20+5). Therefore, the values are as follows: Acceptable quality level (AQL) = 2%Lot tolerance percent defective (LTPD) = 2%Lot size = 200Sample size = 25.
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Direct labor variances Bellingham Company produces a product that requires 3 standard direct labor hours per unit at a standard hourly rate of $21.00 per hour. 15,400 units used 65,100 hours at an hou
The direct labor rate variance is $9,900 unfavorable, and the direct labor efficiency variance is $3,900 favorable.
To calculate the direct labor rate variance, we need to compare the actual rate per hour with the standard rate per hour and multiply it by the actual hours worked. (higher than the standard rate). The total variance can be calculated as follows: Direct Labor Rate Variance = ($22.00 - $21.00) * 65,100 hours = $9,900 unfavorable Therefore, the direct labor rate variance is $9,900 unfavorable, indicating that the actual rate per hour was higher than the standard rate. On the other hand, the direct labor efficiency variance is $3,900 favorable, suggesting that the actual hours worked were less than the standard hours allowed.
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Part A
Sometimes a manufacturer wants to promote a particular item or
encourage additional business from a buyer. Also, buyers may
be entitled to additional discounts as a result of buying large
quantities. In such cases, the manufacturer may offer additional
discounts that are deducted one after another from the list price.
Such discounts are called a trade discount series, chain discounts
or successive discounts.
Question:
Why do manufactures use a trade discount series? Why not
just translate the series into a single discount equivalent?
Explain in brief!
Part B
Use the straight-line method to find the yearly depreciation for a
molding machine that has an expected useful life of five years.
The molding machine costs OMR 27,300, its shipping costs
totaled OMR 250, its installation charges came to OMR 450, and
its salvage value is OMR 1,000.
Question:
Prepare the depreciation schedule for the molding machine.
Manufacturers use a trade discount series instead of a single discount equivalent for several reasons.
Part A: Manufacturers use a trade discount series instead of a single discount equivalent because it offers several advantages. Firstly, a trade discount series allows manufacturers to tailor their discounts to different buyers and situations. They can offer customized discounts based on the buyer's purchasing volume, loyalty, or specific promotional goals. This flexibility enables manufacturers to incentivize buyers to increase their order sizes or choose specific products, thereby boosting sales and market share.
Secondly, using a trade discount series provides manufacturers with pricing flexibility. The series can be adjusted based on market conditions, competition, or buyer preferences. Manufacturers can set different discount levels at each stage of the series to respond to changes in demand, adjust pricing strategies, or introduce new promotional campaigns. This adaptability helps manufacturers stay competitive and responsive in a dynamic marketplace.
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Equivalent Units of Production Weighted average method The following information concerns production in the shing Department for May. The Finishing Department uses the weighted average method.
ACCOUNT Work in Process - Finishing Department ACCOUNT NO. Date Item Debit Credit Balance Debit Credit May 1 Bal, 19,700 units, 65% completed 59.100 31 Directorials, 90,500 units 176,595 235,695 31 Direct labor 109,500 345,195
31 Factory overhead 111,300 456,495 31 Goods transferred, 102,400 units 639,290 17,199 31 Bal, 2 units, 30% completed 17,199 a. Determine the number of units in work in process wventory at the end of the month ______ units
b. Determine the number of wholt units to be accounted for and to be assigned costs and the equivalent units of production for My Accome that direct materials are placed in DOCESS during production.
Whole units to be accounted for ________ units Whole units to be assigned costs ________ units
Equivalent units of production _________units
Whole units to be assigned costs = 110,202 units
Equivalent units of production = 102,400.6 units
To determine the number of units in work in process inventory at the end of the month, we need to calculate the equivalent units of production for the units in ending work in process.
a. The number of units in work in process inventory at the end of the month is determined by multiplying the number of units in ending work in process by the percentage of completion.
Number of units in ending work in process = 2 units
Percentage of completion = 30%
Units in ending work in process = 2 units x 30% = 0.6 units
Therefore, the number of units in work in process inventory at the end of the month is 0.6 units.
b. To determine the whole units to be accounted for and to be assigned costs, we sum up the beginning work in process inventory (given), units started and completed during the period, and units in ending work in process.
Whole units to be accounted for = Beginning work in process + Units started and completed + Units in ending work in process
Whole units to be accounted for = 19,700 units + 90,500 units + 2 units
Whole units to be accounted for = 110,202 units
To calculate the equivalent units of production, we consider the percentage of completion for both direct materials and conversion costs (direct labor and factory overhead). Since direct materials are placed in process during production, the equivalent units of production will include both the completed units and the units in ending work in process.
Equivalent units of production = Units completed + (Units in ending work in process x Percentage of completion)
Equivalent units of production = 102,400 units + (2 units x 30%)
Equivalent units of production = 102,400 units + 0.6 units
Equivalent units of production = 102,400.6 units
Therefore:
Whole units to be assigned costs = 110,202 units
Equivalent units of production = 102,400.6 units
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According to "Bigger Than Enron" what caused the accounting scandals in the 1990's?
A) Board of directors supervises management closely.
B) Accounting firms are independent.
c) Management has strong incentives to meet Wall Street analysts' expected earnings.
According to the documentary "Bigger Than Enron," the accounting scandals in the 1990s were primarily caused by management's strong incentives to meet Wall Street analysts' expected earnings.
This answer aligns with option C. During that time, there was a prevailing focus on meeting or exceeding market expectations and analysts' forecasts. Companies were under immense pressure to deliver consistent and impressive financial results to maintain their stock prices and attract investors. This pressure led management to engage in unethical accounting practices to manipulate financial statements and artificially inflate earnings.
The documentary highlights how companies like Enron and WorldCom employed various fraudulent techniques such as aggressive revenue recognition, off-balance-sheet transactions, and accounting loopholes to create an illusion of financial success. These practices allowed them to deceive investors, lenders, and regulators, leading to massive financial losses and the eventual collapse of these companies.
The documentary also raises concerns about the role of board of directors and accounting firms in preventing and detecting these accounting scandals. It suggests that the board of directors failed to provide adequate oversight, and accounting firms, which were supposed to be independent auditors, were compromised due to conflicts of interest and lucrative consulting contracts with the companies they audited.
In summary, the accounting scandals of the 1990s were primarily driven by management's strong incentives to meet Wall Street analysts' expected earnings, which resulted in fraudulent accounting practices and widespread financial misconduct.
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Elaborate on why the provision of basic and essential services
is one of the most important developmental outcomes of local
government I South Africa
The provision of basic and essential services is indeed one of the most important developmental outcomes of local government in South Africa. Here are several reasons why:
Addressing Basic Needs: Basic and essential services, such as water, sanitation, electricity, healthcare, education, and housing, directly address the fundamental needs of the population. By ensuring access to these services, local governments contribute to improving the quality of life and well-being of citizens. Meeting basic needs is crucial for poverty alleviation, social development, and human dignity.
Reducing Inequality: South Africa has a history of significant inequality and socio-economic disparities. The provision of basic services by local governments plays a crucial role in bridging this gap. By ensuring that all communities have access to essential services, regardless of their location or socio-economic status, local governments contribute to reducing inequality and promoting social inclusion.
Stimulating Economic Development: Basic services are foundational for economic development. Access to reliable electricity, proper infrastructure, and quality education are essential for attracting investment, promoting entrepreneurship, and creating job opportunities. Local governments that prioritize the provision of basic services contribute to fostering economic growth and improving the livelihoods of their communities.
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Assume that Smith's Auto Sales paid $45,000 for equipment with a 15-year life and zero expected residual value. After using the equipment for six years, the company determines that the asset will remain useful for only five more years. Read the requirements Requirement 1. Record depreciation expense on the equipment for Year 7 by the straight-line method. First, select the formula to calculate the company's revised depreciation expense on the equipment for Year 7. Then enter the amounts and calculate the depreciation for Year 7. (Enter "0" for items with a zero value) Revised depreciation Record the depreciation on the equipment for Year 7. (Record debits first, then credits. Select the explanation on the last line of the journal entry table.) Date Accounts and Explanation Dobit Credit Requirement 2. What is accumulated depreciation at the end of Year 7? The accumulated depreciation at the end of Year 7 is
The accumulated depreciation at the end of Year 7 is $37,800.
Requirement 1:
To calculate the revised depreciation expense for Year 7 using the straight-line method, we need to determine the remaining useful life of the equipment.
Given:
Original cost of equipment = $45,000
Original useful life = 15 years
Remaining useful life = 5 years (determined after using the equipment for 6 years)
Formula to calculate revised depreciation expense per year:
Revised Depreciation Expense = (Original Cost - Accumulated Depreciation) / Remaining Useful Life
Revised Depreciation Expense for Year 7:
Revised Depreciation Expense = ($45,000 - Accumulated Depreciation) / 5
Please note that the accumulated depreciation at the end of Year 6 would be $45,000 / 15 * 6 = $18,000.
Let's calculate the revised depreciation expense for Year 7:
Revised Depreciation Expense = ($45,000 - $18,000) / 5
Revised Depreciation Expense = $27,000 / 5
Revised Depreciation Expense = $5,400
Journal entry to record depreciation expense on the equipment for Year 7:
Date Accounts and Explanation Debit Credit
Year 7 Depreciation Expense $5,400
Accumulated Depreciation $5,400
Requirement 2:
The accumulated depreciation at the end of Year 7 can be calculated by summing up the depreciation expense for each year until Year 7.
Accumulated Depreciation at the end of Year 7:
Accumulated Depreciation = Depreciation Expense Year 1 + Depreciation Expense Year 2 + ... + Depreciation Expense Year 7
Since we are given the depreciation method as straight-line and the equipment has a zero expected residual value, the annual depreciation expense would be constant.
Accumulated Depreciation at the end of Year 7 = Depreciation Expense Year 1 + Depreciation Expense Year 2 + ... + Depreciation Expense Year 7
Accumulated Depreciation at the end of Year 7 = ($5,400) + ($5,400) + ... + ($5,400) (7 times)
Accumulated Depreciation at the end of Year 7 = $5,400 * 7
Accumulated Depreciation at the end of Year 7 = $37,800
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Question 2 O Mark this questio Mark starts a new job in another state and decides to buy a house rather than renting one. Which of the following is true if Mark buys the house? O He will have to pay city and state taxes on the house. He will have to pay a large security deposit on the house. O He will have limited ability to make improvements to the house. O He will have to pay a fixed monthly cost to his landlord.
If Mark buys the house, he will have to pay city and state taxes on the house.
Explanation: When someone purchases a house, they become responsible for paying property taxes to the city and state in which the house is located. Property taxes are levied based on the assessed value of the property and are used to fund local government services and infrastructure. These taxes are typically paid annually or semi-annually by the homeowner. Therefore, if Mark decides to buy a house instead of renting one, he will be obligated to pay property taxes as a homeowner. This is a common financial responsibility associated with homeownership and helps support local communities and public services.
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