Answer:
2.49
Explanation:
The division’s turnover is computed using the formula of turnover ratio. Divide the total sales portion of the division with the average operating assets that gives the division’s turnover.
Division Turnover= Sales / Average Operating Cost
DT= $10,333,500 / $4,150,000
DT= 2.49
The division's turnover is closest to 2.49
Company C set up a Reserve for Bad Debts in 2013. Although there were no account balances written off, it was considered prudent to acknowledge that some of the Accounts Receivable would not be collectable. The IRS does not allow a deduction until the accounts are written off. As a result, the Taxable Income was greater than the Income Before Taxes.
This is a timing difference and will reverse in future years so it means that Taxable Income will be less than Income Before Taxes in some future years when the accounts written off will be greater than the increase in the Reserve for Bad Debts. What will be the entry required in 2013 to record this difference?
Answer:
Company C
Journal Entry to record the Difference in Taxable Income and Income before Taxes in 2013:
Debit Deferred Tax Asset $
Credit Income Tax Payable $
To record the deferred tax asset.
Explanation:
Since the taxable income is higher than the Income before Taxes, there is a deferred tax asset.
The amount is the tax rate multiplied by the difference in the two incomes.
A deferred tax asset results from overpayment or advance payment of taxes due to timing differences. It is the opposite of a deferred tax liability, which represents income taxes owed or underpayment of taxes as a result of the timing of transactions.
Timing differences arise from the treatment of Taxable Income by the tax authorities and the different treatment of Income before Taxes recognized in GAAP accounting.
Elite Company had originally expected to earn operating income of $140,000 in the coming year. Elite's degree of operating leverage is 2.6. Recently, Elite revised its plans and now expects to increase sales by 25% next year. What is the percent change in operating income expected by Elite in the coming year
Answer:
65%
Explanation:
The computation of the percentage change in operating income is shown below:
Degree of Operating leverage = Percentage change in operating income ÷ Percentage change in sales
2.6 = Percentage change in operating income ÷ 25%
So,
Percentage change in operating income is
= 2.6 × 25%
= 65%
We simply multiplied the degree of operating leverage with the percentage in sales so that the percentage change in operating income could come
The management of Unter Corporation, an architectural design firm, is considering an investment with the following cash flows: Year Investment Cash Inflow 1 $15,000 $1,000 2 $ 8,000 $2,000 3 $2,500 4 $4,000 5 $5,000 6 $6,000 7 $5,000 8 $4,000 9 $3,000 10 $2,000 Required: 1. Determine the payback period of the investment. (Round your answer to 1 decimal place.)
Answer:
The payback period of the investment is 6.5 years
Explanation:
1. In order to calculate the payback period of the investment we would have to make the following calculation:
payback period of the investment=Year before full recovery+(Unrecovered cost at the start/cash flow during the year )
payback period of the investment=6+ ($23,000−$20,500) /$5,000
payback period of the investment=6.5 Years
The payback period of the investment is 6.5 years
Gall Manufacturing sells a product for $50 per unit. The fixed costs are $840,000, and the variable costs are 60 percent of the selling price. As a result of new automated equipment, it is anticipated that fixed costs will increase by $200,000 and variable costs will be 50 percent of the selling price. The new break-even point in units is
Answer:
41,600 units
Explanation:
The computation of the break even point in unit is shown below:
As we know that
Break Even Point:
= Fixed Cost ÷ Contribution margin per unit
where,
Fixed Cost = $840,000 + $200,000
= $1,040,000
And,
Variable cost per unit is
= 50% 0f selling price
= $50 × 50%
= $25
So, the break even point in units is
= $1,040,000 ÷ $25
= 41,600 units
Investment X offers to pay you $4,700 per year for 9 years, whereas Investment Y offers to pay you $6,400 per year for 5 years.
Requirement 1:
A. If the discount rate is 8 percent, what is the present value of these cash flows?
B. Which of these cash flow streams has the higher present value at 8 percent?
Requirement 2:
A) If the discount rate is 20 percent, what is the present value of these cash flows?
B) Which of these cash flow streams has the higher present value at 20 percent?
Answer:
Instructions are below.
Explanation:
Giving the following information:
Investment X offers to pay you $4,700 per year for 9 years
Investment Y offers to pay you $6,400 per year for 5 years.
Requirement 1:
First, we need to calculate the final value, using the following formula:
FV= {A*[(1+i)^n-1]}/i
A= annual cash flow
Investment X:
FV= {4,700*[(1.08^9)-1]} / 0.08
FV= $58,691.52
Investment Y:
FV= {6,400*[(1.08^5)-1]} / 0.08
FV= $37,546.25
Now, the present value:
PV= FV/(1+i)^n
Investment X:
PV= 58,691.52/(1.08^9)
PV= $29,360.37
Investment Y:
PV= 37,546.25/(1.08^5)
PV= $25,553.35
Investment X provides the higher present value, therefore, it should be the one to choose.
Requirement 2:
First, we need to calculate the final value, using the following formula:
FV= {A*[(1+i)^n-1]}/i
A= annual cash flow
Investment X:
FV= {4,700*[(1.20^9)-1]} / 0.20
FV= $97,754.84
Investment Y:
FV= {6,400*[(1.20^5)-1]} / 0.20
FV= $47,626.24
Now, the present value:
PV= FV/(1+i)^n
Investment X:
PV= 97,754.84/(1.20^9)
PV= $18,945.54
Investment Y:
PV= 47,626.24/(1.20^5)
PV= $19,139.92
Investment Y provides the higher present value, therefore, it should be the one to choose.
Weber Company purchased a mining site for $659,964 on July 1. The company expects to mine ore for the next 10 years and anticipates that a total of 96,740 tons will be recovered. The estimated residual value of the property is $55,169. During the first year, the company extracted 6,682 tons of ore. The depletion expense is
Answer:
$41,774
Explanation:
the depletion expense is calculated below
Depletion expense reffered to the charge against profits for the use of natural resources.To calculate the depletion per unit we will need to calculate the total cost less salvage value then divide it by the total number of estimated units.
The expense is calculated by multiplying the depletion per unit by the number of natural resources units consumed current period.
Original cost= $659,964
residual value = $55,169
estimated units or tons= 96,740 tons
number of tons extracted in a given year = 6,682 tons of ore.
depletion expense =?
We will need to find the difference between the residual value and the original cost first. Which is
= (Original cost - residual value) = )$659,964 - $55,169)/96,740 tons
= 6.25
(6.25* 6,682 tons )= $41774
Hence,The depletion expense =$41774
Wanda is in charge of acquisitions for her company. Realizing that water is important to company operations, Wanda buys a plant site on a river, and the company builds a plant that uses all of the river water. Downstream owners bring suit to stop the company from using any water. What is the result
Answer:
This is a very unlikely situation, since the plant must be really large and the river probably didn't carry a lot of water in the first place. But even if this was possible, it would be illegal for a company to use 100% of the natural resources available. No law or regulation (municipal, state or federal) would allow such thing to happen and assuming it got to court, the court would rule against the company.
Since you need an environmental impact report before you start building a factory, then it would be unlikely that the factory or plant was legally authorized to operate in the first place. The only option is that they built a dam and that is highly regulated.
On January 1, 2021, Perez Co. issued at par $10,000 of 6% bonds convertible in total into 1,000 shares of Perez's common stock. No bonds were converted during 2021. Throughout 2021, Perez had 1,000 shares of common stock outstanding. Perez's 2021 net income was $4,500, and its income tax rate is 30%. No potentially dilutive securities other than the convertible bonds were outstanding during 2021. Perez's diluted earnings per share for 2021 would be:_________.a. $5.00.
b. $4.54.
c. $4.50.
d. $4.72.
Answer:
EPS = $4.50
diluted EPS = $2.46
Explanation:
no option is correct since EPS = $4.50, and the rest of the options are all higher amounts. Diluted EPS are always smaller than EPS.
common stock outstanding = 1,000 stocks
bonds shares (diluted) = 1,000 stocks
net income = $4,500
bond interest = $10,000 x 6% x (1 - 30%) = $420
diluted earnings per share = ($4,500 + $420) / (1,000 shares + 1,000 shares) = $4,920 / 2,000 shares = $2.46
McHale Company does business in two customer segments, Retail and Wholesale. The following annual revenue information was determined from the accounting system's invoice information:
20Y5 20Y4
Retail $126,000 $120,000
Wholesale 150,000 164,000
Total revenue $276,000 $284,000
Prepare a horizontal analysis of the segments. Round percentages to one decimal place.
Answer:
Horizontal Analysis
For the years 20Y4 and 20Y5
20Y5 20Y4 Difference amount Difference Percent
Retail 126000 120000 6000 5.0%
Wholesale 150000 164000 -14000 -8.5%
Total revenue 276000 284000 -8000 -2.8%
Workings
Retail= 126000 - 120000 = 6000
6000/120000* 100 = 5.0%
Wholesale= 150000 - 164000 = -14000
-14000/164000 * 100 = 8.53%
Total revenue= 276000 - 284000 = -8000
-8000/284000 * 100 =2.82%
Suppose you have a production technology that can be characterized by a learning curve. Every time you increase production by one unit, your marginal cost decreases by $6. There are no fixed costs, and the first unit costs you $76 to produce. Use the given information to fill in the marginal cost of each unit, as well as the total cost and average cost of each level of output. Quantity Marginal Cost Total Cost Average Cost (Units) ($) ($) ($/unit) 1 $76 $76 $76 2 $ $ $ 3 $ $ $ 4 $ $ $ 5 $ $ $ 6 $ $ $ Suppose you receive a request for proposal (RFP) on a project for two units. Your break-even price for two units is $ . Suppose that if you get the contract, you estimate that you can win another project for two more units. The break-even price for those next two units alone is $ .
Answer:
a) Learning Costs Curve:
Quantity Marginal Total Cost ($) Average Cost (Units)
Cost ($) ($/unit)
1 $76 $76 $76
2 $70 $146 $73
3 $64 $210 $70
4 $58 $268 $67
5 $52 $320 $64
6 $46 $366 $61
b) For a request for proposal for two units, the break-even price for the two units is $146 ($73 per unit).
c) For two more units, the break-even price for them alone is $122 ($268 - $146). Each unit's break-even price will be $61 ($122/2).
Explanation:
a) A break-even price is a price that is equal to the total cost. At break-even, there is no profit and there is no loss. The total cost equals total revenue.
b) The learning cost curve shows how the "marginal cost decreases as a result of an increase in production by one unit." This curve can be illustrated graphically to show how the marginal and average costs reduce as a result of the increase in the quantity produced.
Tetious Dimensions is introducing a new product and has an expected change in net operating income of $790,000. Tetious Dimensions has a 30 percent marginal tax rate. This project will also produce $190,000 of depreciation per year. In addition, this project will cause the following changes in year 1: Without the Project With the Project Accounts receivable $5,000 $84,000 Inventory 98,000 184,000 Accounts payable 75,000 117,000 What is the project's free cash flow in year 1? The free cash flow of the project in year 1 is $ 701000. (Round to the nearest dollar.)
Answer:
$620,000
Explanation:
to determine the net cash flow generated by the project, we can use the indirect method to determine cash flows:
net income = $790,000 x (1 - 30%) = $553,000
net income adjustments:
depreciation expense $190,000increase in accounts payable $42,000increase in accounts receivable ($79,000)increase in inventory ($86,000)Project's cash flow $620,000
Without the With the change
project project
Accounts receivable $5,000 $84,000 $79,000
Inventory $98,000 $184,000 $86,000
Accounts payable $75,000 $117,000 $42,000
Average fixed cost is equal to a.total fixed cost divided by quantity. b.marginal cost minus average total cost. c.quantity divided by total fixed cost. d.the difference between average total cost and average variable cost. e.a and d
Answer:
e.a and d
Explanation:
Average fixed cost = Total fixed cost / quantity
Total cost is cost that does not vary with production e.g. rent
Average fixed cost is fixed cost per unit produced.
Average fixed cost = average total cost - average variable cost
I hope my answer helps you
You buy a 7 percent, 25-year, $1,000 par value floating rate bond in 1999. By the year 2004, rates on bonds of similar risk are up to 9 percent. What is your one best guess as to the value of the bond
Answer:
The best guess to the value of bond is $1000.
Explanation:
The best guess to the value of a bond is $1000 because the flotation rate bonds are those bonds where coupon rate varies according to the market situation. Therefore, we can say that the coupon rate in the case of flotation bonds is based upon the rate of LIBOR, etc. Generally, the bond value remains the same and there will be no capital gain or loss to the investor.
The best guess to the value of a bond is $1000
The following information should be considered:
The floation rate bond is the bond where the coupon rate should be changed and it should be changed as per the market condition. So here the price of the bond remains the same or we can say it should be constant.Therefore we can conclude that The best guess to the value of a bond is $1000
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Marcus is a self-employed marketing consultant. He is good at helping his clients with their marketing challenges; however, he is not keeping up with billing his clients regularly or keeping track of his hours. He feels like the time he spends on these functions is taking him away from activities where he has more talent and ability. His small business needs to bill clients quickly to keep the business running. What would you recommend that Marcus do
Answer:
outsource the accounting function to another firm
Explanation:
Based on this information regarding Marcus' situation, the best advice would be for him to outsource the accounting function to another firm. This is something that many individuals/companies do and will allow Marcus to focus all of his time and energy on what he is best at (which is helping his clients with their marketing challenges.) while at the same time making sure that the accounting tasks such as billing the clients are done quickly and correctly.
Last year, Rotterdam, Inc. had sales revenue of $980,000. Costs other than depreciation and interest expense were 20 percent of sales. Depreciation expense was $50,000, interest expense was $95,000, and dividends paid were $23,000. The company also received dividends of $8,000 from a company in which it had 30% ownership stake. Which of the following statements is most CORRECT?a. The firm's taxable income was $637,400. b. The firm's after-tax income was $405,564. c. The firm's marginal tax rate was 39 percent. d. The firm's tax for the year was $113,900. e. None of the above
Answer:
e. None of the above
Explanation:
total revenue $980,000
- operating costs $196,000
- depreciation $50,000
- interests $95,000
income $639,000
+ dividends from outside corporation = $8,000 x (1 - 80% DRD) = $1,600
total taxable income = $639,000 + $1,600 = $640,600
current corporate tax is 21%, so the company's marginal tax rate would be 21%
income taxes for the year = $640,600 x 21% = $134,526
the company's after tax income = $640,600 - $134,526 = $506,074
The manager of a certain division at Alpha Manufacturing is evaluated on how efficiently the division uses equipment, buildings, and other assets to generate profits. This division is considered a(n):
Answer:
Investment center
Explanation:
Investment center is a section of an organization that make use of the amount of capital at their disposal to earn more profit for the company. Their main aim is to generate more revenue for the organization.
This section of the company is solely responsible for the amount of money generated, the costs incurred during the production process and the various benefits realized.
They are accessed according to the amount of money brought into the company through various investments.
In the scenario described above, the manager of a particular section of Alpha manufacturing was evaluated on how the equipments, building and other assets were used to generate profit because they were considered as an investment center.
The manager of a particular section of Alpha manufacturing was evaluated on how the equipment, building, and other assets were used to generate profit because they were considered an investment center.
What is an investment center?An investment center is part of an organization that uses its proceeds to maximize profits for a company. Their main goal is to make more money for the organization.
This category of the company is solely responsible for the amount of revenue generated, the costs incurred during the production process and the various benefits derived.
Thus, the division where the different assets are being used to generate profits is called the investment center.
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Typically, the firms' lowest cost source of financing is ____________ as its cost is tax deductible and it also tends to offer the least amount of risk for investors. Group of answer choices Debt Preferred Equity Derivatives Common Equity Equity
Answer:
Debt
Explanation:
Debt is the lowest cost source of financing because the interest return given to holders of debt has a tax shield (tax deductible) that is provided by the Section 11j of the Income tax Act.
The other sources of finance give a return in form of dividends. Dividends are are not tax deductible hence they attract a huge cost.
If a Starbucks tall latte cost $3.20 in the United States and 3 euros in the Euro area, then purchasing-power parity implies the nominal exchange rate is how many euros per dollar?
a. .938 If the exchange rate is less than this, it costs more dollars to buy a tall latte in the U.S. than in the Euro area.
b. .938 If the exchange rate is less than this, it costs fewer dollars to buy a tall latte in the U.S. then in the Euro area.
c. 1.067 If the exchange rate is less than this, it costs more dollars to buy a tall latte in the U.S. than in the Euro area.
d. 1.067 If the exchange rate is less than this, it costs fewer dollars to buy a tall latte in the U.S. than in the Euro area.
Answer:
a. .938 If the exchange rate is less than this, it costs more dollars to buy a tall latte in the U.S. than in the Euro area.
Explanation:
We can see in the example that the Euro is cheaper than the dollar in purchasing-power parity. More specifically, the exchange rate is .938 euros per dollar.
This is why it is more expensive to buy a tall latte in the U.S. than in Europe. The Euro is cheaper.
Go Fly A Kite is considering making and selling custom kites in two sizes. The small kites would be priced at $12.60 and the large kites would be $25.60. The variable cost per unit is $6.10 and $13.20, respectively. Jill, the owner, feels that she can sell 3,650 of the small kites and 2,015 of the large kites each year. The fixed costs would be $2,120 a year and the depreciation expense is $1,950. The tax rate is 34 percent. What is the annual operating cash flow
Answer:
Operating cash flow= $31,413.06
Explanation:
Giving the following information:
Small kites:
Selling price= $12.6
Unitary variable cost= $6.10
Sales= 3,650 units
Large kites:
Selling price= $25.6
Unitary variable cost= $13.2
Sales= 2,015 units
The fixed costs would be $2,120 a year and the depreciation expense is $1,950. The tax rate is 34 percent.
Sales= (3,650*12.6 + 2,015*25.6)= 97,574
Variable cost= (3,650*6.1 + 2,015*13.2)= (48,863)
Contribution margin= 48,711
Fixed costs= (2,120)
Depreciation= (1,950)
EBIT= 44,641
Tax= (44,641*0.34)= (15,177.94)
Depreciation= 1,950
Operating cash flow= $31,413.06
Athena Company's salaried employees earn two weeks of vacation per year. It pays $858,000 in total employee salaries for 52 weeks but its employees work only 50. Record Athena Company's weekly journal entry to record the vacation expense:
Answer:
Answer is Debit Vacation Benefits Expense $660 Credit Vacation Benefits Payable $660
Explanation:
Athena Company's salaried employees earn two weeks of vacation per year. It pays $858,000 in total employee salaries for 52 weeks but its employees work only 50. Record Athena Company's weekly journal entry to record the vacation expense:
Annual salary is $858,000 in total
The total no of weeks is 52 weeks
858,000 wages per year / 52 weeks per year = 16,500 per week
So per week salary is
The weekly wages for our employees are 16,500 dollars
For each of the two weeks of vacations , will be $ 16500 x 2
= $33,000
For weekly vacation expense
sice its for 50 weeks
= $33000 / 50
= $660
Therefore, Debit Vacation Benefits Expense $660 Credit Vacation Benefits Payable $660
Built-Tight is preparing its master budget for the quarter ended September 30. Budgeted sales and cash payments for product costs for the quarter follow.
July August September
Budgeted sales $54,000 $70,000 $58,000
Budgeted cash payments for
Direct material 15,160 12,440 12,760
Direct labor 3,040 2,360 2,440
Factory overhead 19,200 15,800 16,200
Sales are 15% cash and 85% on credit. All credit sales are collected in the month following the sale. The June 30 balance sheet includes balances of $15,000 in cash: $44,000 in accounts receivable; $3,500 in accounts payable; and a $4,000 balance in loans payable. A minimum cash balance of $15,000 is required. Loans are obtained at the end of any month when a cash shortage occurs. Interest is 1% per month based on the beginning-of-the-month loan balance and is paid at each month-end. If an excess balance of cash exists, loans are repaid at the end of the month. Operating expenses are paid in the month incurred and consist of sales commissions (10% of sales), office salaries ($3,000 per month), and rent ($5,500 per month).
Required:
a. Prepare a cash receipts budget for July, August, and September.
b. Prepare a cash budget for each of the months of July, August, and September.
Answer:
Built-Tight
a) Cash Budget for July, August, and September:
July August September Total
Beginning balance $15,000 $16,900 $28,700 $15,000
Cash collections: 52,100 56,400 68,200 176,700
Cash Expenses:
Direct materials (15,160) (12,440) (12,760 ) (40,360)
Direct labor (3,040) (2,360) (2,440) (7,840)
Factory overhead (19,200) (15,800) (16,200) (51,200)
Operating expenses:
Sales Commission (5,400) (7,000) (5,800) (18,200)
Rent Expense (3,000) (3,000) (3,000) (9,000)
Accounts Payable (4,000) (4,000)
Interest expense (400) (400)
Loan repayment (4,000) (4,000)
Minimum Balance 15,000 15,000 15,000
Excess Cash $1,900 $13,700 $41,700 $56,700
Explanation:
a) Cash Collections:
July August September Total
Cash sales 15% $8,100 $10,500 $8,700 $27,300
85% a month after 44,000 45,900 59,500 149,400
Total collections $52,100 $56,400 $68,200 $176,700
b) It is assumed that the balance in accounts payable was paid in August when the company had enough balance to offset it. Any other assumption could have been made.
c) A cash budget shows the cash receipts and payments made during the budget period. As a budget, it shows the forecast for cash receipts and payments, which will help management to make decisions to avoid liquidity problems which can ruin a business. Management is able to plan ahead for the business' expenditures and investments. It also warns management to negotiate for loans to smoothen periods of cash shortages.
On June 1, 2018, Herbal Co. received $21,600 for the rent of land for 12 months. Journalize the adjusting entry required for unearned rent on December 31, 2018.
Date Account Name Debit Credit
Answer and Explanation:
The Journal entry is shown below:-
On December 31, 2018
Unearned rent revenue Dr, $12,600 ($21,600 × 7 months ÷ 12 months)
To Rent Revenue $12,600
(Being unearned rent is recorded)
Here for recording unearned rent, we debited the unearned rent revenue as it decreased the liabilities and we credited the rent revenue as it increased the revenue and the same is to be considered
Tamarisk Corporation had income from continuing operations of $10,763,000 in 2020. During 2020, it disposed of its restaurant division at an after-tax loss of $201,600. Prior to disposal, the division operated at a loss of $324,000 (net of tax) in 2020. Tamarisk had 10,000,000 shares of common stock outstanding during 2020. Prepare a partial income statement for Tamarisk beginning with income from continuing operations.
Answer:
$1.02
Explanation:
Preparation of the partial income statement for Tamarisk beginning with income from continuing operations.
Income from continuing operations $10,763,000
Less Discontinued operations:
Loss from operation of discontinued restaurant division (net of tax) ($324,000)
Loss from disposal of restaurant division(net of tax) (201,600)
Net income$10,237,400
Earnings per share:
Income from continuing operations$1.07
($10,763,000÷$10,000,000)
Discontinued operations, net of tax(0.05)
(324,000+201,600= 525,600
Net income $1.02
Calculation for Discontinued operations,
(324,000+201,600)= 525,600
525,600÷$10,237,400
=0.05
Therefore the Net income is $1.02
Using $3040000 as the cost of goods manufactured, compute the cost of goods sold using the following information
Raw materials inventory, January 1 $ 20000
Raw materials inventory, December 31 40000
Work in process, January 1 18000
Work in process, December 31 12000
Finished goods, January 1 40000
Finished goods, December 31 32000
Raw materials purchases 1700000
Direct labor 760000
Factory utilities 150000
Indirect labor 50000
Factory depreciation 400000
Operating expenses 420000
a) $3046000.
b) $3048000.
c) $3032000.
d) $3008000.
Answer:
b) $3,048,000
The cost of goods sold is $3,048,000
Explanation:
Particulars Amount
Finished goods inventory (Jan 1) 40,000
Add: Cost of goods manufactured 3,040,000
Cost of goods available for sale 3,080,000
Less: Finished goods inventory (Dec 31) 32,000
Cost of goods sold 3,048,000
Assume that ABC had a retained earnings balance of $10,000 on April 1, and that the company had the following transactions during April. Issued common stock for cash, $5,000. Provided services to customers on account, $2,000. Provided services to customers in exchange for cash, $900. Purchased equipment and paid cash, $4,300. Paid April rent, $800. Paid employees' salaries for April, $700. What was ABC's retained earnings balance at the end of April
Answer:
ABC's retained earnings balance at the end of April is $11,400
Explanation:
The addition to retained earnings in the current month is revenue derived from providing services to customers minus the expenses such as rent and employee salaries
Net income for the month=$2,000+$900-$800-$700=$1400
Retained earnings at month end=opening retained earnings+net income
Retained earnings at month end=$10,000+$1,400=$11,400
The retained earnings balance at the end of April will be $11,400.
What are retained earnings?Retained earnings are the part of the company's profits that the company sets aside for future requirements. The additions in retained earnings are the net profits for the relevant period.
The balance of retained earnings can be calculated as:
[tex]\rm Retained\:earnings = Beginning\:balance + Net\:income[/tex]
The net income is the difference between income and payments:
[tex]\rm Net\:Income = \$2,000+ \$900 - -\$800 - \$700\\\\\rm Net\:Income = \$1,400[/tex]
Therefore the retained earnings will be:
[tex]\rm Retained\:earnings = Beginning\:balance + Net\:income\\\\\rm Retained\:earnings = \$10,000 + \$1,400\\\\\rm Retained\:earnings = \$11,400[/tex]
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Jason just joined a new gym and signed up for a one-year membership. Membership fees can be paid in 12 monthly payments of $50, due at the beginning of each month or in one payment today. If the appropriate interest rate is 11%,.How much should he pay today for the annual membership?
Answer:
$570.91
Explanation:
For computing, the amount pay today for the annual membership we just need to apply the present value formula i.e to be shown in the attachment
Provided that
Future value = $0
Rate of interest = 11% ÷ 12 months = 0.916666%
NPER = 12 months
PMT = $50
The formula is shown below:
= PV(Rate;NPER;PMT;FV;type)
So, after applying the above formula, the amount paid today for the membership is $570.91
Tory invested $600 a year for three years, then $700 a year for an additional four years. In year 9, she withdrew $1,500. She withdrew the entire investment in year 11. Which statement correctly applies to the time line for this problem
Answer:
Cash flows for the first 7 years are negative
Explanation:
When considering cash flows in a business activity or a transaction, it can either be positive or negative cash flow.
Negative cash flow is when the individual or business entity gives out cash to fund a business activity.
Positive cash flow is when cash flows inward from a business activity.
In this scenario Tory invested $600 in the first 3 years and an additional $700 for four years. Cash is going out so this is a negative cash flow within 7 years.
Tory withdrew $1,500 in year 9 and the rest of the investment in year 11. This is a positive cash flow.
Income statement format; single step and multiple step [LO4-1, 4-3, 4-5] The following is a partial trial balance for General Lighting Corporation as of December 31, 2021: Account Title Debits Credits Sales revenue 3,350,000 Interest revenue 100,000 Loss on sale of investments 32,500 Cost of goods sold 1,390,000 Loss on inventory write-down (obsolescence) 400,000 Selling expense 500,000 General and administrative expense 250,000 Interest expense 99,000 There were 300,000 shares of common stock outstanding throughout 2021. Income tax expense has not yet been recorded. The income tax rate is 25%.Required Prepare a single-step income statement for 2018, including EPS disclosures
Answer:
Net income = $583,875
Earning Per Share (EPS) = $1.95 per share.
Explanation:
A single step income statement can be described as a financial statement that do not break revenues and expenses into there respective different categories, but only use one column each for revenue and expenses.
For this question, a single-step income statement for 2021 can be prepared as follows:
Note: Year 2021 is used as the correct year since it is metioned twice in the question against 2018 that was erroneously mentioned once.
General Lighting Corporation
Income Statement for December 31, 2021
Details $
Revenues:
Sales revenue 3,350,000
Interest revenue 100,000
Total revenue (A) 3,450,000
Expenses:
Cost of goods sold 1,390,000
Selling expense 500,000
General and administrative expense 250,000
Interest expense 99,000
Loss on sale of investments 32,500
Loss on inventory write-down (obsol.) 400,000
Total expenses (B) 2,671,500
Income before tax (A - B) 778,500
Tax (25% * $778,500) (194,625)
Net income 583,875
EPS (583,875 / 300,000) 1.95
Thad is worried about the selling price. Rumors are circulating that other retro brands of cycles may be revived. If so, the selling price for the Western Hombre would have to be reduced to $9,500 to compete effectively. In that event, Thad would also reduce fixed expenses to $670,000 by reducing advertising expenses, but he still hopes to sell 400 units per year. d. What would the net operating income be in this situation
Answer:
$3,130,000
Explanation:
Net operating income = Total revenue - Total cost
Total revenue = price x quantity = $9,500 x 400 = $3,800,000
Total cost = $670,000
Net operating income = $3,800,000 - $670,000 = $3,130,000
I hope my answer helps you
The Assembly Department of Nitz Company has the following production and cost data at the end of May, 2020. Production: 30,000 units started into production; 25,000 units transferred out and 5,000 units 100% completed as to materials and 40% completed as to conversion costs. Manufacturing Costs: Materials added at beginning of process, $90,000; labor, $75,000; overhead $60,000.Prepare a production cost report for the month of May.
Answer:
Explanation:
The objective of this question is to prepare a production cost report for the month of May for Nitz Company.
Nitz Company
Assembly Department Production Cost Report
For The Month Ended May, 2020
Equivalent Units
Quantities Physical units Materials Conversion costs
Units to be
accounted for 0
Work in process,
May 1
Started into 30000
Production
Total Units 30000
Units Accounted for:
Transferred out 25000 25000 25000
Work in process,
May 31 5000 5000 2000
Total Units
Accounted for 30000 30000 27000
Costs Material Conversion Total
Costs
Unit Costs
Costs in May 90,000 135,000 225,000
Equivalent Units 30000 27000
Unit Costs 3 5 8
Costs to be accounted for:
Work in Process, May 1 -
Started into Production 225,000
Total Costs 225,000
Cost Reconciliation Statement:
Transferred out 200,000
Work in Process, May 31: 0
Materials 15000
Conversion Costs 10,000 25,000
Total Costs 225,000
NOTE:
The process by which we determine the Conversion Costs is by the relation:
Conversion Costs which is = Labor + Overhead
Conversion Costs = 75000 + 60000
Conversion Costs = $135000
And for the Total Costs ; we have:
Total Costs = Material + Conversion Costs
Total Costs = 90000 + 135000
Total Costs = $225000
Work in Process, May 31 = 225,000-225,000 = 0