Answer:
Financial statements are linked within and across periods in that
d) All of the above.
Explanation:
The linkage of all the financial statements can be traced to how they share interconnected information about the financial position and performance of an entity. The three more prominent financial statements include the income statement for the period, the statement of cash flows, and the balance sheet. While the income statement shows the financial performance by determining the profitability, the statement of cash flows concentrates on the inflow and outflow of cash, and the balance sheet shows the financial position, disclosing the assets, liabilities, and equity balances.
John's House of Pancakes uses a weighted moving average method to forecast pancake sales. It assigns a weight of 5 to the previous month's demand, 3 to demand two months ago, and 1 to demand three months ago. If sales amounted to 992 pancakes in May, 2,222 pancakes in June, and 2,907 pancakes in July, what should be the forecast for August
Answer:
2,466
Explanation:
Calculation to determine what should be the forecast for August
August Forecast =[992 pancakes +(2,222 pancakes x3)+(2,907 pancakes x5)]/(5+3+1) =
August Forecast =(992 pancakes+6,666 pancakes+14,535 pancakes)/9
August Forecast =22,193 pancakes/9
August Forecast =2,466
Therefore should be the forecast for August is 2,466
He5-B9q Company operates two departments, the handling department and the packaging department. During May, the handling department reported the following information: % complete % complete units DM conversion work in process, May 1 113,000 33% 48% units started during May 201,000 work in process, May 31 169,000 74% 28% The cost of beginning work in process and the costs added during May were as follows: DM Conversion work in process, May 1 $ 94,128 $ 59,904 costs added during May $418,986 $372,816 Calculate the total cost of the 113,000 units in beginning work in process using the FIFO process costing method.
Answer:
Total cost of the 113,000 units in beginning work in process is $282,628.58.
Explanation:
Note: The data in the question are merged together. They are therefore sorted before answering question by presenting the complete question as follows:
He5-B9q Company operates two departments, the handling department and the packaging department. During May, the handling department reported the following information:
% complete % complete
units DM conversion
work in process, May 1 113,000 33% 48%
units started during May 201,000
work in process, May 31 169,000 74% 28%
The cost of beginning work in process and the costs added during May were as follows:
DM Conversion
work in process, May 1 $94,128 $59,904
costs added during May $418,986 $372,816
Calculate the total cost of the 113,000 units in beginning work in process using the FIFO process costing method.
Explanation of the answer is now provided as follows:
This total cost of the 113,000 units in beginning work in process using the FIFO process costing method calculated using the following 4 steps:
Step 1: Calculation of equivalent units
Particulars DM Conversion
To complete work in process, May 1:
113000*(1-33%) 75,710
113000*(1-48%) 58,760
Units started and completed (w.1) 88,000 88,000
Work in process, May 31:
169000*74% 125,060
169000*28% 47,320
Equivalent units 288,770 194,080
Step 2: Calculation of cost per equivalent units
Cost per Equivalent unit = Costs incurred during May / Equivalent units ....... (1)
Using equation (1), we have:
DM Cost per Equivalent unit = $418,986 / 288,770 = $1.45
Conversion Cost per Equivalent unit = $288,770 / 194,080 = $1.92
Step 3: Calculation of Total Cost to complete work in process, May 1
Cost to complete work in process, May 1 = To complete work in process, May 1 * Cost per Equivalent unit ................ (2)
Using equation (1), we have:
DM Cost to complete work in process, May 1 = 75,710.00 * $1.45 = $109,850.16
Conversion Cost to complete work in process, May 1 = 58,760 * $1.92 = $112,874.42
Total Cost to complete work in process, May 1 = DM Cost to complete work in process, May 1 + Conversion Cost to complete work in process, May 1 = $109,850.16 + $112,874.42 + $222,724.58
Step 4: Calculation of Total cost of the 113,000 units in beginning work in process
Total cost of the 113,000 units in beginning work in process = Work in process, May 1 + Cost to complete work in process, May 1 = $59,904 + $222,724.58 + $282,628.58
Workings:
w.1: Units started and completed = Units started during May - Work in process, May 1 = 201,000 - 113,000 = 88,000
g Sparky Corporation uses the weighted-average method of process costing. The following information is available for February in its Molding Department: Units: Beginning Inventory: 27,000 units, 100% complete as to materials and 55% complete as to conversion. Units started and completed: 114,000. Units completed and transferred out: 141,000. Ending Inventory: 31,000 units, 100% complete as to materials and 30% complete as to conversion. Costs: Costs in beginning Work in Process - Direct Materials: $45,000. Costs in beginning Work in Process - Conversion: $50,850. Costs incurred in February - Direct Materials: $311,160. Costs incurred in February - Conversion: $601,150. Calculate the cost per equivalent unit of conversion. Group of answer choices $4.76 $3.96 $5.29 $4.34 $5.69
Answer:
Conversion cost per equivalent unit = $4.76
Explanation:
Conversion cost per equivalent unit = Total conversion cost / Equivalent units
Conversion cost is the sum of the direct labour cost and the factory overhead cost.
Equivalent units are notional whole units which represent incomplete work and are used to apportion cost between work progress and completed work. These units are determined as follows:
Equivalent units = Degree of work done(%) × units of inventory
Equivalent units
Item Unit Equivalent unit
Completed unit 140,000 140000× 100% 140,000
Closing inventory 31,000 31,000× 30% 9,300
Total equivalent unit 149,300
Completed units = opening inventory + units started in the period - closing inventory
Completed units = 27000 + 114,000 - 31,000 = 140,000
The conversion cost = 50,850 + 601,150 = 652,000
conversion cost per equivalent unit = 652,000 /140,000 = 4.65
Conversion cost per equivalent unit = $4.76
Frozen Ice-cream Corporation (FICC) has the following items for the month of December 2020. Please use this information to answer the following questions. Utilities expense $6,000 Accounts payable $40,000 Prepaid Insurance $3,000 Revenue - Ice-cream sales $180,000 Cash $9,000 Dividends $1,000 Unearned revenue $2,000 Note payable (payable in 5 years) $60,000 Ice-cream inventory $8,500 Retained earnings (December 1, 2018) $17,000 Salaries expense $160,000 Rent expense $12,000 Accounts receivable $4,500 Common stock $500 Equipment $95,000 Income tax rate 25% Question A - FICK's Income Statement (A1): What is FICK's total revenue
Question Completion:
Unearned revenue is assumed to be $1,500 and not $2,000.
Answer:
Frozen Ice-cream Corporation (FICC)
Income Statement for the month of December 2020:
Revenue - Ice-cream sales $180,000
Salaries expense $160,000
Rent expense $12,000
Utilities expense $6,000 178,000
Income before tax $2,000
Income tax (25%) 500
Net Income $1,500
Retained earnings (December 1, 2018) $17,000
Net income $1,500
Dividends $1,000
Retained earnings (December 31, 2018) $17,500
FICC's total revenue is $180,000.
Explanation:
a) Data and Calculations:
Trial Balance
Account Titles Debit Credit
Cash $9,000
Accounts receivable $4,500
Ice-cream inventory $8,500
Prepaid Insurance $3,000
Equipment $95,000
Accounts payable $40,000
Unearned revenue $1,500
Note payable (payable in 5 years) $60,000
Common stock $500
Retained earnings (December 1, 2018) $17,000
Revenue - Ice-cream sales $180,000
Salaries expense $160,000
Rent expense $12,000
Utilities expense $6,000
Dividends $1,000
Totals $299,000 $299,000
Income tax rate 25%
On January 1, 2021, Calloway Company leased a machine to Zone Corporation. The lease qualifies as a sales-type lease. Calloway paid $290,000 for the machine and is leasing it to Zone for $37,000 per year, an amount that will return 7% to Calloway. The present value of the lease payments is $290,000. The lease payments are due each January 1, beginning in 2021. What is the appropriate interest entry on December 31, 2021
Answer and Explanation:
The appropriate interest entry on December 31, 2021 is presented below
Interest receivable $17,710 (($290,000 - $37,000) × 0.07)
To Interest revenue $17,710
(Being interest is recorded)
Here the interest receivable is debited as it increased the assets and credited the interest revenue as it also increased the revenue
Huron Company produces a commercial cleaning compound known as Zoom. The direct materials and direct labor standards for one unit of Zoom are given below:
Standard Quantity or Hours Standard Price or Rate Standard Cost
Direct materials 4.6 pounds $2.50 per pound $11.50
Direct labor 0.2 hours $18.00 per hour $3.60
During the most recent month, the following activity was recorded:
a. Twenty thousand pounds of material were purchased at a cost of $2.35 per pound.
b. All of the material purchased was used to produce 4,000 units of Zoom.
c. 750 hours of direct labor time were recorded at a total labor cost of $14,925.
Required:
Compute the materials price and quantity variances for the month.
Answer:
AQ = Actual quantity = 20,000 pounds
AP = Actual price = $2.35 per pound.
SQ = Standard quantity = 4,000 units*4.6 pounds per unit = 18,400 pounds
SP = Standard price = $2.50 per unit
AH = Actual hours = 750 hours.
AR = Actual rate = Total actual cost/Actual hours = $14,925/750 hours = $19.90.
SH= Standard hours = 0.2 hours per unit*4,000 units = 800 hours.
SR = Standard rate = $18 per hour
Materials price variance = (AQ *AP) - (AQ *SP) =
Materials price variance = (20,000*$2.35) - (20,000 *$2.50)
Materials price variance = $47,000 - $50,000
Materials price variance = $3,000 (F)
Material quantity variance = (AQ*SP) - (SQ*SP)
Material quantity variance = (20,000*$2.50) - (18,400*$2.50)
Material quantity variance = $50,000 - $46,000
Material quantity variance = $4,000 (U)
On January 1, Wei company begins the accounting period with a $43,000 credit balance in Allowance for Doubtful Accounts. On February 1, the company determined that $9,400 in customer accounts was uncollectible; specifically, $2,200 for Oakley Co. and $7,200 for Brookes Co. Prepare the journal entry to write off those two accounts. On June 5, the company unexpectedly received a $2,200 payment on a customer account, Oakley Company, that had previously been written off in part a. Prepare the entries to reinstate the account and record the cash received.
Answer:
1.
Date Account Title Debit Credit
February 1 Allowance for Doubtful accounts $9,400
Oakley Co. - Accounts Receivable $2,200
Brookes Co. - Accounts Receivable $7,200
2.
Date Account Title Debit Credit
June 5 Oakley Co. - Accounts Receivable $2,200
Allowance for Doubtful Accounts $2,200
June 5 Cash $2,200
Oakley Co. - Accounts Receivable $2,200
usiness Solutions sells upscale modular desk units and office chairs in the ratio of 3:2 (desk unit:chair). The selling prices are $1,250 per desk unit and $500 per chair. The variable costs are $750 per desk unit and $250 per chair. Fixed costs are $120,000. Required: 1. Compute the selling price per composite unit. 2. Compute the variable costs per composite unit. 3. Compute the break-even point in composite units. 4. Compute the number of units of each product that w
Answer:
1. Selling price per composite unit = Price of desk unit * (Ratio of desk unit) + Price of chair * (Ratio of chair)
= $1250*(3) + $500*(2)
= $3,750 + $1,000
= $4,750
2. Variable costs per composite unit = Variable cost per desk unit * (Ratio of desk unit) + Variable cost per chair * (Ratio of chair)
= $750*(3) + $250*(2)
= $2,250 + $500
= $2,750
3. Break even point in composite units = Fixed costs / (Composite selling price - Composite variable cost)
= $120,000 / ($4750 - $2750)
= $120,000 / $2000
= 60 units
4. Number desk units sold at break even point = 60 composite units* 3 per composite unit = 180 units
Number of chairs sold at break even point = 60 composite units * 2 per composite unit = 120 units
[The following information applies to the questions displayed below.] Tracy Company, a manufacturer of air conditioners, sold 100 units to Thomas Company on November 17, 2021. The units have a list price of $500 each, but Thomas was given a 30% trade discount. The terms of the sale were 2/10, n/30. Thomas uses a perpetual inventory system. Required: 1. Prepare the journal entries to record the (a) purchase by Thomas on November 17 and (b) payment on November 26, 2021. Thomas uses the gross method of accounting for purchase discounts. 2. Prepare the journal entry for the payment, assuming instead that it was made on December 15, 2021.
Answer:
1A. November 17
Dr Purchases 35,000
Cr Accounts payable 35,000
1B. November 26
Dr Accounts payable 35,000
Cr Purchase discounts 700
Cr Cash 34,300
2. December 15, 2021
Dr Accounts payable 35,000
Cr Cash 35,000
Explanation:
1A Preparation of the journal entries to record the (a) purchase by Thomas on November 17
November 17
Dr Purchases 35,000
Cr Accounts payable 35,000
[(100*$500)-(100*500*30%)]
=50,000-15,000
=35,000
B.Preparation of the journal entries to record the purchase by Thomas on November 26
November 26
Dr Accounts payable 35,000
Cr Purchase discounts 700
(2%*35,000)
Cr Cash 34,300
(35,000-700)
2. Preparation of the journal entry for the payment, assuming instead that it was made on December 15, 2021.
December 15, 2021
Dr Accounts payable 35,000
Cr Cash 35,000
[(100*$500)-(100*500*30%)]
Help please !!!
Thanks in advance.
The purchase of equity securities is classified as an investing activity.
True? or false ?
You are asked to study the causal effect of hours spent on employee trainingâ (measured in hours per worker perâ week) in a manufacturing plant on the productivity of its workersâ (output per worker perâ hour). Required:a. Choose a random group of employees to receive ten hours per week in additional training for a period of four weeks.â Then, estimate the difference in productivity between workers who received the additional training and those that did not. Option _______ best describes this statement.b. Data on hours spent on training a group of ten different employees in a certain day. Option __________ best describes this statement. c. Data on hours spent on training the same employee for seven consecutive days. Option________ best describes this d. Data on hours spent training for a group of ten individual employees for seven consecutive days. Option________ best describes this statement. 1. an observational time series data set. 2. an observational cross â sectional data set. 3. an ideal randomized controlled experiment. 4. an observational panel data set.
Answer:
a. - 3. an ideal randomized controlled experiment
b. - 2. an observational cross a sectional data set.
c. - 1. an observational time series data set.
d. - 4. an observational panel data set.
Explanation:
a. Choose a random group of employees to receive ten hours per week in additional training for a period of four weeks. Then, estimate the difference in productivity between workers who received the additional training and those that did not.
Option 3. an ideal randomized controlled experiment best describes this statement.
b. Data on hours spent on training a group of ten different employees in a certain day.
Option 2. an observational cross â sectional data set best describes this statement.
c. Data on hours spent on training the same employee for seven consecutive days.
Option 1. an observational time series data set best describes this
d. Data on hours spent training for a group of ten individual employees for seven consecutive days.
Option 4. an observational panel data set best describes this statement.
TVs and VCRs are:
A. needs
B. wants
C. resources
D. markets
Answer:
I believe I is B-wants
Explanation:
Answer:
A
Explanation:
It's really obvious that we need a TV :-)
Laura goes to a bank and opens a new account.
• She deposits $5,500.
• The bank pays 1.6% interest compounded annually on this account.
• Laura makes no additional deposits or withdrawals.
Which amount is the closest to the account balance at the end of 4 years?
A) $5,852.00
B) $5.860.53
C)$5.940.00
D)$5.954.31
Answer:
B) $5.860.53
Explanation:
The computation of the future value is shown below:
= Principal amount × (1 + rate of interest)^number of years
= $5,500 × (1 + 0.016)^4
= $5,500 × 1.016^4
= $5.860.53
Hence, the second option is correct
Suppose you win on a scratch‑off lottery ticket and you decide to put all of your $3,500 winnings in the bank. The reserve requirement is 10%. What is the maximum possible increase in the money supply as a result of your bank deposit? Which events could cause the increase in the money supply to be less than its potential?
A. Banks decide to keep some excess reserves on hand.
B. Banks choose to loan out all excess reserves.
C. All money loaned out is deposited back into the banking system.
D. Some loan recipients choose to hold some cash instead of depositing all of it in banks.
Answer:
35000
A, d
Explanation:
Reserve requirement is the portion of deposit received by banks that the central bank requires to be kept as deposit.
If $3500 is deposited and reserve requirement is 10%
reserves would increase by $3500 x 0.10 = $350
Increase in the total value of checkable deposit is determined by the money multiplier
Money multiplier = amount deposited / reserve requirement
3500 / 0.1 = 35000
If the banks keep excess reserves, the amount of money available to be loaned out would reduce and this would reduce the increase in money supply.
Also, if individuals keep the money at home, it would reduce the amount of money that can be loaned out by banks
2. Which group listed below can be used to set indents and
spacing?
Explanation:
nothing is listed below
Mr. Renaldo purchased 30 acres of undeveloped ranch land 10 years ago for $935,000. He is considering subdividing the land into one-third-acre lots and improving the land by adding streets, sidewalks, and utilities. He plans to advertise the 90 lots for sale in a local real estate magazine. Mr. Renaldo projects that the improvements will cost $275,000 and that he can sell the lots for $20,000 each. He is also considering an offer from a local corporation to purchase the 30-acre tract in its undeveloped state for $1.35 million. Assume that Mr. Renaldo makes no other property dispositions during the year and has a 35 percent tax rate on ordinary income and a 15 percent tax rate on capital gain. Required: Compute the after-tax cash flow if Mr. Renaldo develops the land. Compute the after-tax cash flow if Mr. Renaldo sells the land.
Answer is in the photo. I can only upload it to a file hosting service. link below!
tinyurl.com/wtjfavyw
Victory Company uses weighted-average process costing to account for its production costs. Conversion cost is added evenly throughout the process. Direct materials are added at the beginning of the process. During November, the company transferred 700,000 units of product to finished goods. At the end of November, the work in process inventory consists of 180,000 units that are 30% complete with respect to conversion. Beginning inventory had $420,000 of direct materials and $139,000 of conversion cost. The direct material cost added in November is $2,220,000, and the conversion cost added is $3,254,000. Beginning work in process consisted of 60,000 units that were 100% complete with respect to direct materials and 80% complete with respect to conversion. Of the units completed, 60,000 were from beginning work in process and 640,000 units were started and completed during the period.
Required:
a. Determine the equivalent units of production with respect to direct materials and conversion.
b. Compute both the direct material cost and the conversion cost per equivalent unit.
c. Compute the direct material cost and the conversion cost assigned to units completed and transferred out and ending work in process inventory.
Answer:
Victory Company
Materials Conversion Total
a. Equivalent units of production: 880,000 754,000
b. Cost per equivalent unit $3.00 $4.50
c. Total cost transferred out $2,100,000 $3,150,000 $5,250,000
Ending Work in Process 540,000 243,000 783,000
Explanation:
a) Data and Calculations:
Units transferred out = 700,000
Ending Work in process = 180,000
Total equivalent units:
Materials Conversion
Units transferred out 700,000 (100%) 700,000 (100%)
Ending Work-in-Process 180,000 (100%) 54,000 (30%)
Total equivalent units 880,000 754,000
Cost of production:
Materials Conversion Total
Beginning Inventory $420,000 $139,000 $559,000
Added in November 2,220,000 3,254,000 5,474,000
Total production costs $2,640,000 $3,393,000 $6,033,000
Cost per equivalent unit:
Materials Conversion
Total production costs $2,640,000 $3,393,000
Total equivalent units 880,000 754,000
Cost per equivalent unit $3.00 $4.50
Cost assigned:
Materials Conversion Total
Units transferred out 700,000 700,000
Cost per equivalent unit $3.00 $4.50
Total cost transferred out $2,100,000 $3,150,000 $5,250,000
Ending Work in Process 540,000 243,000 783,000
Total cost $2,640,000 $3,393,000 $6,033,000
The process of earning compound interest allows a depositor or investor to earn interest on any interest earned in prior periods.
a. True
b. False
Answer:
A) true
Explanation:
Compound interest can be regarded as
adding of interest gotten to the principal sum of a deposit or the principal sum of a loan. It's one that is gotten after reinvesting of ones interest instead of paying it out, as a result of this the interest that comes in
next period will be earned on the principal sum along with those interests accumulated before. It should be noted the process of earning compound interest allows a depositor or investor to earn interest on any interest earned in prior periods.
Rediger Inc., a manufacturing Corporation, has provided the following data for the month of June. The balance in the Work in Process inventory account was $31,000 at the beginning of the month and $21,500 at the end of the month. During the month, the Corporation incurred direct materials cost of $56,800 and direct labor cost of $30,700. The actual manufacturing overhead cost incurred was $53,900. The manufacturing overhead cost applied to Work in Process was $52,800. The cost of goods manufactured for June was:
Answer:
$150,900
Explanation:
Calculation for what The cost of goods manufactured for June was:
Direct materials $56,800
Direct labor $30,700
Manufacturing overhead applied to work in process $53,900
Total manufacturing costs $141,400
Add: Beginning work in process inventory $31,000
$172,400
Less: Ending work in process inventory $21,500
Cost of goods manufactured $150,900
($172,400-$21,500)
Therefore The cost of goods manufactured for June was:$150,900
Conifer Craft is a furniture firm that specializes in creating customized furniture for the commercial market. The firm has recently acquired a large amount of funds from investors and is looking to diversify by introducing customized products for the industrial market. The firm has completed a complete situation analysis for the purpose and the results are favorable. According to the market segmentation process model, the firm must next:_________
Answer:
implement a portfolio strategy
Explanation:
According to information regarding the company Conifer Craft, it is possible to identify that the company is diversifying its portfolio by launching customized products for the industrial market. Therefore, after this market segmentation process, it is recommended that the company develops and implements a portfolio strategy, which aims to reduce the aggregate risks of the diversification of new product lines, improving the decision-making process, identifying the potential for value of each product line according to a strategic vision, so that the company remains competitive and well positioned in the market.
Mr. and Mrs. FB, a retired couple, decided to open a family restaurant. During March and April, they incurred the following expenses: Prepaid rent on commercial real estate ($2,100 per month from April through December) $ 18,900 Prepaid rent on restaurant equipment ($990 per month from April through December) 8,910 Advertising of upcoming grand opening 900 Staff hiring and training 11,500 $ 40,210 Mr. and Mrs. FB served their first meal to a customer on May 1. Determine the tax treatment of the given expenses on their tax return.
Answer:
$7,920 for rent on the equipment
$16,800 for rent on the commercial real estate
Explanation:
Calculation to Determine the tax treatment of the given expenses on their tax return.
First step is to calculate the Start Up Expenditure
Rent for April:
Commercial real estate $2,100
Equipment $990
Advertising during pre-operating phase $900
Staff hiring and training during pre-operating phase 11,500
Start Up Expenditure $15,490
Second step is to calculate the amount capitalized over 180 months
Amount capitalized over 180 months=$15,490 - $5,000 = $10,490
Amount capitalized over 180 months=$10,490 / 180 months
Amount capitalized over 180 months=$58.28 per month
Third step is to calculate the amortization deducted from this year’s tax return
Amortization deducted from this year’s tax return=(April – December = 8 months) ($58.28 x 8 months
Amortization deducted from this year’s tax return = $466.24
Now let Determine the tax treatment of the given expenses on their tax return
They can deduct ($990 x 8 months)$7,920 for rent on the equipment from May-December*
They can deduct ($2,100 x 8 months)$16,800 for rent on the commercial real estate fromMay-December
Galen started a new job by showing up fifteen minutes before the official start time, taking a short lunch, and leaving approximately fifteen minutes after the official quitting time. During the first week Galen's supervisor takes him aside and tells him that he is really impressed with the fact that Galen is so punctual and dedicated to the work. The next week Galen supervisor once again compliments Galen on his punctuality and hard work. Galen continues this behavior while he works under this supervisor.
Required:
What type of conditioning has occurred here?
Answer:
Operant conditioning
Explanation:
Operant conditioning is a form of learning wherein consequences or rewards are attached to behaviors. When an individual demonstrates positive behavior, he is rewarded for such an action. Displaying bad behavior also results in punishments or negative consequences.
This type of learning is evident in the compliment Galen received from her supervisor because of her punctuality. Here a positive reward is attached to the good behavior and this will encourage Galen to keep displaying the good behavior. This type of conditioning is also known as instrumental conditioning.
All of the following regarding accounting for Treasury Stock are true except: Multiple Choice Corporations do not record gains or losses on transactions involving their own stock. Treasury Stock receives cash dividends but not stock dividends. Purchasing Treasury Stock reduces the corporation’s assets and equity by equal amounts. Treasury Stock is presented on the balance sheet as a contra equity account. Treasury Stock does not have voting rights.
Answer:
Treasury Stock receives cash dividends but not stock dividends.
Explanation:
Shares owned by the issuing company itself are considered as Treasury Stock. Prime reason company buys their own stock to reduce dividend expense and save cash. So, it does not make any sense to pay dividends to Treasury stock.
According to the theory of comparative advantage, consumers in all nations can consume more if there are
Answer:
no restrictions on trade
Explanation:
Comparative advantage in economics is the ability of an individual or country to produce a specific good or service at a lower opportunity cost better than another individual or country.
The comparative advantage gives a country a stronger sales margin than their competitors as they are able to sell their specific products or render their peculiar services at a lower opportunity cost.
In 1817, David Ricardo who is an english political economist talked about the law of comparative advantage in his book “On the Principles of Political Economy and Taxation." where he asserted that countries can become better off by specializing in what they do or produce best and eliminate trade barriers (restrictions).
This simply means that, any country applying the principle of comparative advantage, would enjoy an increase in output and consequently, a boost in their Gross Domestic Products (GDP).
Hence, according to the theory of comparative advantage, consumers in all nations can consume more if there are no restrictions on trade.
The Sunland Inc., a manufacturer of low-sugar, low-sodium, low-cholesterol TV dinners, would like to increase its market share in the Sunbelt. In order to do so, Sunland has decided to locate a new factory in the Panama City area. Sunland will either buy or lease a site depending upon which is more advantageous. The site location committee has narrowed down the available sites to the following three very similar buildings that will meet their needs. Building A: Purchase for a cash price of $612,100, useful life 26 years. Building B: Lease for 26 years with annual lease payments of $71,490 being made at the beginning of the year. Building C: Purchase for $655,200 cash. This building is larger than needed; however, the excess space can be sublet for 26 years at a net annual rental of $6,850. Rental payments will be received at the end of each year. The Sunland Inc. has no aversion to being a landlord.
Instructions:
In which building would you recommend that Brubaker Inc. locate, assuming a 12% cost of funds?
Answer:
Building C
Explanation:
To solve this, we find the present value of each of the buildings.
Building A: We are told that it is to be Purchased for a cash price of $612,100, useful life 26 years. Thus;
PV = $612000
Building B: PV = 71490 + (71490 × ((1+r)ⁿ - 1)/(r(1+r)ⁿ)
Where,
r = 12% = 0.12
n = 26 - 1 = 25
Thus;
PV = 71490 + (71490 × (1 + 0.12)^(25) -1)/(0.12(1 + 0.12)^25)
PV = = $632196
Building C:
PV = 655200 - 6850 × ((1+r)ⁿ - 1)/(r(1+r)ⁿ)
Where;
r = 12% = 0.12
n=26
Thus;
PV = 655200 - (6850 × (1 + 0.12)^(25) -1)/(0.12(1 + 0.12)^25)
PV = $601474
Thus, the minimum PV is building C and therefore it is the one I will recommend that Brubaker Inc. locate
Mr.fernando jose witches to put -up an Php85 million sports complex within the vicinity of the intramuros are.What advice will you give?
all I can advise is to be careful with those we should first get to know the people we trust and we should make sure if you are sure of what you want to be careful and not complacent because there are so many witches that will never go away
Exercise caution when dealing with people. We should first get to know the individuals we can trust. If you are certain of what you want, you should exercise caution and avoid becoming complacent since there are so many witches who will never go away.
What is the meaning of a sports complex?A sports complex is a sizable, open space with a number of fields or courts devoted to a single sport or group of sports. These kinds of sports facilities are frequently utilized for leagues and tournaments since they can accommodate a sizable crowd to watch the teams compete.
This includes, but is not limited to, ice skating rinks, baseball diamonds, basketball courts, and soccer fields. "That portion of a room or place where the play or practice of a sport occurs" is the "area of sport activity." Boundary lines, for instance, are used to delineate football fields.
a huge structure with a grandstand surrounding it on all sides and a field utilized for sporting events inside.
Thus, Exercise caution when dealing with people.
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Advisors, an international pension fund manager, uses the concepts of purchasing power parity(PPP) and the International Fisher Effect (IFE) to forecast spot exchange rates. Omni gathers the financial information as follows:
Base price level 100
Current U.S. price level 105
Current South African price level 111
Base rand spot exchange rate $0.175
Current rand spot exchange rate $0.158
Expected annual U.S. inflation 7%
Expected annual South African inflation 5%
Expected U.S. one-year interest rate 10%
Expected South African one-year interest rate 8%
Required:
Calculate the following exchange rates (ZAR and USD refer to the South African rand and U.S. dollar, respectively)
a. The current ZAR spot rate in USD that would been forecast by PPP.
b. Using the IFE, the expected ZAR spot rate in USD one year from now.
c. Using PPP, the expected ZAR spot rate in USD four years from now.
Answer:
a. Current spot rate / Base spot rate = Price level in home country / Price level in foreign country
CSR / 0.175 =105 / 111
CSR = (105/ 111) * 0.175
= $0.1655 / ZAR
b. Expected ZAR spot rate / Current ZAR spot rate = (1 + interest rate in home country) / (1 + interest rate in foreign country)
Expected ZAR spot rate / 0.158 = (1 + 10%) / ( 1 + 8%)
Expected ZAR spot rate = (1.1/1.08) * 0.158
= $0.1609 / ZAR
c. Expected ZAR spot rate / Current ZAR spot rate = (1 + inflation rate in home country) / (1 + inflation rate in foreign country)
Expected ZAR spot rate / 0.158 = (1 + 7%) / ( 1 + 5%)
= 1.07/1.05 * 0.158
= $0.1610 / ZAR
Define the term petty cash book and how is it prepared?
A petty cash book is a ledger kept with the petty cash fund to record amounts that are added to or subtracted from its balance. Petty cash should be part of an overall business accounting system that documents how your business moves funds between one account and another and how it spends its money.
Ignacio and Perla are married and both are government employees. They contribute 22) money to various organizations each year and file a joint return. Their adjusted gross income for 2018 is $100,000. They contributed to the following organizations in 2018:
$3,500 to the World Wildlife Foundation
$10,000 to the Salvation Army
$2,000 to a local city council candidate
$11,000 to a breast cancer research hospital
Donated clothing to Goodwill. (Ignacio purchased the items for $375, but the thrift shop value of the same items at a local second-hand store is equal to S60.)
How much can Ignacio and Perla deduct as charitable contributions for the year 2018?
A) $26,560.
B) $25,710
C) $26,500.
D) S24,560.
Answer: D. $24,560
Explanation:
The contributions to charity and the clothing to Goodwill can be considered charitable deductions but the goodwill clothing must be value at second-hand value.
= Donation to WWF + Salvation Army + Breast Cancer research + Goodwill
= 3,500 + 10,000 + 11,000 + 60
= $24,560
Using FIFO for Multiproduct Inventory Transactions (Chapters 6 and 7) [LO 6-3, LO 6-4, LO 7-3] Skip to question [The following information applies to the questions displayed below.] FindMe Inc., (FI) has developed a coin-sized tracking tag that attaches to key rings, wallets, and other items and can be prompted to emit a signal using a smartphone app. FI sells these tags, as well as water-resistant cases for the tags, with terms FOB shipping point. Assume FI has no inventory at the beginning of the month, and it has outsourced the production of its tags and cases. FI uses FIFO and has entered into the following transactions:
Jan. 2: FI purchased and received 260 tags from Xioasi Manufacturing (XM) at a cost of $7 per tag, n/15.
Jan. 4: FI purchased and received 60 cases from Bachittar Products (BP) at a cost of $2 per case, n/20.
Jan. 6: FI paid cash for the tags purchased from XM on Jan. 2.
Jan. 8: FI mailed 160 tags via the U.S. Postal Service (USPS) to customers at a price of $30 per tag, on account.
Jan. 11: FI purchased and received 360 tags from XM at a cost of $10 per tag, n/15.
Jan. 14: FI purchased and received 160 cases from BP at a cost of $3 per case, n/20.
Jan. 16: FI paid cash for the cases purchased from BP on Jan. 4.
Jan. 19: FI mailed 120 cases via the USPS to customers at a price of $15 per case, on account.
Jan. 21: FI mailed 260 tags to customers at a price of $30 per tag.
1. Calculate the dollars of gross profit and the gross profit percentage from selling tags and cases.
2. Which product line yields more dollars of profit? - Which product line yields more profit per dollar of sales?
3. Calculate the dollars of gross profit and the gross profit percentage from selling tags and cases. (Round your "Gross Profit Percentage" answers to 2 decimal places.)
Answer:
1-a. Dollars of gross profit from selling tags = $9,180
1-b. Dollars of gross profit from selling cases = $1,500
1-c. Gross profit percentage from selling tags = 72.86%
1.d. Gross profit percentage from selling cases = 83.33%
2-a. Tag yields more dollars of profit.
2-b. Tag yields more profit per dollar of sales.
Explanation:
Note: The requirements for this question are two not three as erroneously stated. This is because, the first and the third question are the same. Therefore, the two relevant requirements of the question are:
1. Calculate the dollars of gross profit and the gross profit percentage from selling tags and cases.
2. Which product line yields more dollars of profit? - Which product line yields more profit per dollar of sales?
The explanation of the answers is now given as follows:
1. Calculate the dollars of gross profit and the gross profit percentage from selling tags and cases.
Sales revenue from tags = Sales value of 160 tags mailed to customers on Jan. 8 at a price of $30 per tag + Sales value of 260 tags mailed to customers on Jan. 21 at a price of $30 per tag = (160 * $30) + (260 * $30) = $12,600
Sales revenue from cases = Sales value of 120 cases mailed to customers on Jan. 19 at a price of $15 per case = 120 * $15 = $1,800
Total number of tags sold = 160 tags mailed to customers + 260 tags mailed to customers on Jan. 21 = 420
Total number of cases sold = 120 cases mailed to customers on Jan. 19 at a price of $15 per case = 120
Using FIFO, we have:
Cost of tags sold = Value of 260 tags purchased on Jan.2 from Xioasi Manufacturing (XM) at a cost of $7 per tag + Value of the remaining 160 (i.e. 420 – 260 = 160) tags sold based on the 360 tags purchased on Jan. 11 from XM at a cost of $10 per tag = (260 * $7) + (160 * $10) = $3,420
Cost of cases sold = Value of 60 cases purchased on Jan.4 from Bachittar Products (BP) at a cost of $2 per case + Value of the remaining 60 cases sold based on the 160 cases purchased on Jan. 14 from BP at a cost of $3 per case = (60 * $2) + (60 * $3) = $300
Therefore, we have:
1-a. Dollars of gross profit from selling tags = Sales revenue from tags - Cost of tags sold = $12,600 - $3,420 = $9,180
1-b. Dollars of gross profit from selling cases = Sales revenue from cases - Cost of cases sold = $1,800 - $300 = $1,500
1-c. Gross profit percentage from selling tags = (Dollars of gross profit from selling tags / Sales revenue from tags) * 100 = ($9,180 / $12,600) * 100 = 72.86%
1.d. Gross profit percentage from selling cases = (Dollars of gross profit from selling cases / Sales revenue from cases) * 100 = 83.33%
2. Which product line yields more dollars of profit? - Which product line yields more profit per dollar of sales?
2-a. Which product line yields more dollars of profit?
From part 1 above, we have:
Dollars of gross profit from selling tags = $9,180
Dollars of gross profit from selling cases = $1,500
Since the dollars of gross profit from selling tags of $9,180 is greater than the dollars of gross profit from selling cases of $1,500, this implies that Tag yields more dollars of profit.
2-b. Which product line yields more profit per dollar of sales?
From part 1 above, we have:
Total number of tags sold = 420
Total number of cases sold = 120
Therefore, we have:
Tag's profit per dollar of sales = Dollars of gross profit from selling tags / Total number of tags sold = $9,180 / 420 = $21.86
Case's profit per dollar of sales = Dollars of gross profit from selling cases / Total number of cases sold = $1,500 / 120 = $12.50
Since Tag's profit per dollar of sales of $21.86 is greater than Case's profit per dollar of sales of $12.50, this implies that Tag yields more profit per dollar of sales.