Answer:
If the part is bought, the company will save $50,400. In other terms, net income will increase by $50,400.
Explanation:
Giving the following information:
Talbot's costs to produce 210,000 wheels annually are:
Direct materials $42,000
Direct labor $63,000
Variable manufacturing overhead $31,500
Avoidable fixed manufacturing overhead= 24,000
An outside supplier has offered to sell Talbot similar wheels for $0.80 per wheel.
If the wheels are purchased from the outside supplier, $24,000 of annual fixed overhead could be avoided and the facilities now being used could be rented to another company for $57,900 per year.
First, we need to calculate the total cost of production:
Total cost= 42,000 + 63,000 + 31,500 + 24,000= $160,500
Now, the total cost of buying:
Total cost= 210,000*0.80 - 57,900= $110,100
If the part is bought, the company will save $50,400.
The inventory was destroyed by fire on December 31. The following data were obtained from the accounting records: Jan. 1 Inventory $ 360,000 Jan. 1 to Dec. 31 Purchases (net) 2,870,000 Sales 4,470,000 Estimated gross profit rate 30% A. Estimate the cost of the inventory destroyed. Refer to the Amount Descriptions list provided for the exact wording of the answer choices for text entries. B. In which situations would the gross profit method be useful
Answer:
A. Estimate the cost of the inventory destroyed is $101,000
B. Gross profit method would be useful in estimating the cost of merchandise destroyed by the fire.
Explanation:
Particulars Debit ($) Credit ($)
Beginning merchandise inventory 360,000
Add: Net purchase 2,870,000
Merchandise available for sale 3,230,000
Less: Net sales 4,470,000
Estimated gross profit (30%) (1,341,000)
Estimated cost of merchandise sold 3,129,000
Estimate the cost of the inventory destroyed 101,000
Hewlett and Martin are partners. Hewlett's capital balance in the partnership is $61,000. and Martin's capital balance $58,000. Hewlett and Martin have agreed to share equally in income or loss. The existing partners agree to accept Black with a 20% interest. Black will invest $35,600 in the partnership. The bonus that is granted to Hewlett and Martin equals:___________ a) $2,340 each b) $3,560 each. c) $0, because Hewlett and Martin actually grant a bonus to Black d) 1,825 to Hewlett; $1,780 to Martin. e) $1,825 each.
Answer:
The bonus hat is granted to Hewlett and Martin equals is $2340
Explanation:
Solution
Given that:
Hewlett's capital balance = $61,000
Martin's capital balance = $58,000
The existing partners agrees ti accept black with =20% interest
Black invest the amount of =$35,600
Now,
The equity after admitting black or allowing black is given below:
$61,000 + $58,000 +$35,600 = $154,600
The share of black in equity is given as,
$154, 600 * 20% = $30,920
The Bonus that is present for Hewlett and Martin is = $35,600 - $30,920
=$4,680
Thus,
When shared equally it is = $2340 for both partners
When we express the value of a cash flow or series of cash flows in terms of dollars today, we call it the ________ of the investment. If we express it in terms of dollars in the future, we call it the
Answer:
Present value
Future value
Explanation:
Present value is the value of cashflows discounted at interest rate at arrive at its value today.
Future value is the value of cashflows discounted at interest rate at arrive at its value at some given time in the future.
I hope my answer helps you
Answer:
Present value, future value
Explanation:
Cash flows can be expressed in present value or as future value. The present value of cash flows is the current value of cash.
Future value is the projected value of money at some point in the future. The future value of money is usually higher than the present value.
For example $1 in the present will appreciate in value over the next 5 years to a higher value of let's say $1.50. The $1 is the present value while $1.50 is the future value
A company applies overhead at a rate of 150% of direct labor cost. Actual overhead cost for the current period is $1,150,000, and direct labor cost is $565,000. Determine whether there is over- or underapplied overhead using the T-account below. Factory OverheadActual Overhead 950,000 Overapplied overhead 950,000
Answer:
Under applied overheads= $302,500
Explanation:
Overheads are charged to units produced by the means of an estimated overhead absorption rate. This rate is computed using budgeted overhead and budgeted activity level.
As a result of this, overhead charged to total units product might be over or under absorbed compared to the actual amount incurred.
Overhead absorption rate
=budgeted Overhead/Budgeted labour cost × 100
This already given in the question as 150% of the direct labour rate
= 150% of direct labour cost
Applied overhead= OAR× actual labour cost
= 150% × $565,000=$847,500
Under applied overhead = is the difference between actual overhead and applied overhead
$1,150,000 - $847,500 = $302,500
Under applied overheads= $302,500
Here it is under applied because the applied is less than the actual overhead cost
For each of the following transactions of JonesSpa Corporation, for the month of January, identify each as an investing activity or financing activity on the statement of cash flows for January. (If the activity does not affect the statement of cash flows, select No Effect.)
Answer:
1. Paid cash to purchase inventory
OPERATING ACTIVITY, DECREASES CASH FLOW STATEMENT
2. Purchased land by issuing common stock
NON CASH INVESTING AND FINANCING ACTIVITY, DOES NOT AFFECT CASH FLOW STATEMENT
3. Accounts receivable decreased in the year
OPERATING ACTIVITY, INCREASES CASH FLOW STATEMENT
4. Sold equipment for cash
INVESTING ACTIVITY, INCREASES CASH FLOW STATEMENT
5. Recorded depreciation expense
OPERATING ACTIVITY, INCREASES CASH FLOW STATEMENT
6. Income taxes payable increased in the year
OPERATING ACTIVITY, INCREASES CASH FLOW STATEMENT
7. Declared and paid a cash dividend
FINANCING ACTIVITY, DECREASES CASH FLOW STATEMENT
8. Accounts payable decreased in the year
OPERATING ACTIVITY, DECREASES CASH FLOW STATEMENT
9. Paid cash to settle notes payable
FINANCING ACTIVITY, DECREASES CASH FLOW STATEMENT
10. Prepaid expenses increased in the year
OPERATING ACTIVITY, DECREASES CASH FLOW STATEMENT
11. Sold inventory for cash
OPERATING ACTIVITY, INCREASES CASH FLOW STATEMENT
12. Paid cash to acquire treasury stock
FINANCING ACTIVITY, DECREASES CASH FLOW STATEMENT
13. Net income
OPERATING ACTIVITY, INCREASES CASH FLOW STATEMENT
14. Decrease in accrued liabilities
OPERATING ACTIVITY, DECREASES CASH FLOW STATEMENT
15. Increase in prepaid expenses
OPERATING ACTIVITY, DECREASES CASH FLOW STATEMENT
When a monopolistically competitive market opens up to international trade, each firm produces a greater quantity of output than it did before. Explain why this is
Answer:
The correct answer is the increase in the amount of buyers.
Explanation:
To begin with, due to the fact that the company is now selling internationally then the market is wide more open for them to increase the portfolio of clients and moreover to increase the amount of sales that the company is having. Therefore that when the company starts to trade internationally it will increase its amount of consumers that will be able to buy from them and also the amount of resellers that can buy from them to buy to final consumers. Primarily, the improvement in the increase of buyers will tend to increase the amount of production that the company is producing and so also the amount of sales so therefore that the company will produce a greater quantity of output than it did before.
United Apparel has the following balances in its stockholders' equity accounts on December 31, 2021: Treasury Stock, $850,000; Common Stock, $600,000; Preferred Stock, $3,600,000; Retained Earnings, $2,200,000; and Additional Paid-in Capital, $8,800,000.
Required:
Prepare the stockholders' equity section of the balance sheet for United Apparel as of December 31, 2021. (Amounts to be deducted should be indicated by a minus sign.)
Answer:
The answer is $14,350,000
Explanation:
UNITED CAPITAL
BALANCE SHEET
(STOCKHOLDERS' EQUITY SECTION)
DECEMBER 31, 2021
Preferred Stock $3,600,000
Common Stock. $600,000
Additional Paid-in Capital $8,800,000
Total Paid-in Capital. $13,000,000
Retained Earnings $2,200,000
Treasury Stock,. -$850,000
Total Stockholders'equity $14,350,000
Bolton Tire Manufacturing and the union came to an impasse during negotiation of the collective bargaining agreement. Specifically, they could not agree on the wage increase for the employees. The union representative reported this information to the employees, and they staged a strike without the union's authorization.
A. The employees have engaged in an unfair labor practice strike.
B. The employees have engaged in an economic strike.
C. The employees have engaged in a sitdown strike.
D. None of the choices are correct.
Answer:
The correct answer is the option A: the employees have engaged in an unfair labor practice strike.
Explanation:
To begin with, due to the fact that the union was already establishing the area for the negotiation and they might have planeed obviously to keep trying to increase the situation in their favour then the action taken by the employees was a bit hurry and was obvious that was not thought very well with calm minds and therefore that they engaged in an unfair labor practice strike because they had to be patience and wait for the union to improve the situation for them, because their are the representatives and if the company sees that the workers do not obey to the representatives then the union will lose negotiation power and the situation will get worse for them.
A company purchased equipment and signed a 5-year installment loan at 10% annual interest. The annual payments equal $11,600. The present value of an annuity factor for 5 years at 10% is 3.7908. The present value of a single sum factor for 5 years at 10% is .6209. The present value of the loan is:
Answer:
The present value of the loan is $43,973.98
Explanation:
In order to calculate the present value of the loan we would have to make the following calculation:
Present value of the loan=annual payments*present value of an annuity factor for 5 years at 10%
annual payments=$11,600
present value of an annuity factor for 5 years at 10%=3.7908
Therefore, Present value of the loan=$11,600*3.7908
Present value of the loan=$43,973.98
The present value of the loan is $43,973.98
Deborah Lewis, general manager of the Northwest Division of Berkshire Co., has significant authority over pricing decisions as well as programs that involve cost reduction/control. The data that follow relate to upcoming divisional operations:
Average invested capital: $15,000,000
Annual total fixed costs: $3,900,000
Variable cost per unit: $80
Number of units expected to be sold: 120,000
Assume the unit selling price is $132 and that Berkshire has a 16% imputed interest charge.
Top management will promote Deborah to corporate headquarters if her division can generate $200,000 of residual income (RI). If Deborah desires to move to corporate, what adjustment must the division do to the amount of annual total fixed costs?
Answer:
The revised fixed costs = $3,640,000
Explanation:
Calculation of Residual Income:
Residual Income = Net income - (Invested capital * Minimum required rate of return)
Net Income = Sales - Variable costs - Fixed costs
Net Income = (120,000*132) - (120,000*80) - 3,900,000
Net Income = $2,340,000
Invested capital = $15,000,000
Minimum required rate of return = 16%
Therefore, residual income = $2,340,000 - ($15,000,000 * 16%)
= -$60,000
Hence, adjustment to be made to the amount of fixed costs so that residual income becomes $200,000 = $200,000+$60,000 = $260,000
Therefore, revised fixed costs = $3,900,000 - $260,000 = $3,640,000
CMS Corporation's balance sheet as of today is as follows: Long-term debt (bonds, at par) $10,000,000 Preferred stock 2,000,000 Common stock ($10 par) 10,000,000 Retained earnings 4,000,000 Total debt and equity $26,000,000 The bonds have a 4.0% coupon rate, payable semiannually, and a par value of $1,000. They mature exactly 10 years from today. The yield to maturity is 12%, so the bonds now sell below par. What is the current market value of the firm's debt
Answer:
$5,412,000
Explanation:
Given:
Long-term debt (bonds, at par):$10,000,000
Preferred stock :2,000,000
Common stock ($10 par): 10,000,000
Retained earnings: 4,000,000
Total debt and equity :$26,000,000
Coupon rate = 4%(semi annually)
Par value = $1000
YTM = 12%
Required:
Find the current market value of the firm's debt.
Find the bond price:
Bond price [tex] = (C * (\frac{1 - (\frac{1}{(1+i)^n})}{i}) + (\frac{m}{(1+i)^n}) [/tex]
[tex] = (C * (\frac{1 - (\frac{1}{(1+0.06)^2^0})}{0.06}) + (\frac{1000}{(1+0.06)^2^0}) [/tex]
[tex] = 541.20 [/tex]
Bond price = $541.20
Find number of bonds:
Number of bonds [tex] = \frac{10,000,000}{1,000} = 10,000[/tex]
Now, to find the current market value of the firm's debt, use:
Current market value of debt = number of bonds × bond price
= 10,000 × 541.20
= $5,412,000
Current market value of the firm's debt = $5,412,000
A sales associate moves from Jacksonville, Florida, to Atlanta, Georgia. The associate continues to be employed by the same broker, who has an office in Atlanta. Which statement is TRUE
Answer: The sales associate must notify the DBPR in writing within 60 days regarding her change in residency
Explanation:
The options are:
a. The states associate broker is required to file the change of address on her behalf.
b. The sales associate broker is not required to notify DBPR because she did not change employers.
c. The sales associate must notify the DBPR in writing within 60 days regarding her change in residency.
d. The sales associate must file an application for Georgia real estate license.
From the question, we are informed that a sales associate moves from Jacksonville, Florida, to Atlanta, Georgia. The associate continues to be employed by the same broker, who has an office in Atlanta.
Based on the scenario, the sales associate should let the DBPR be aware that he or she has moved from
Jacksonville, Florida, to Atlanta, Georgia by writing to them within 60 days regarding her change in residency.
Duff Inc. paid a 2.69 dollar dividend today. If the dividend is expected to grow at a constant 3 percent rate and the required rate of return is 5 percent, what would you expect Duff's stock price to be 4 years from now?
Answer:
$155.92
Explanation:
Div₀ = $2.69
Div₁ = $2.7707
Div₂ = $2.8538
Div₃ = $2.9394
Div₄ = $3.0276
Div₅ = $3.1184
we need to calculate the stocks terminal value in year 4, and to do that we will use Div₅ and the growing perpetuity formula:
stock price = $3.1184 / (5% - 3%) = $155.92
if we wanted to calculate the current stock price we would use Div₁ in the same formula.
Suppose that in the rice market demand shifts greatly due to a new rice diet that is being marketed heavily in the U.S. as a cure for cancer. Simultaneously the supply curve shifts slightly due to a healthy rainy season that positively affects the rice crop in California. What is the most likely outcome in this situation?
Answer:
the equilibrium price increases, albeit by a negligible amount
Explanation:
Here are the options to this question :
the supply curve will shift again after demand meets supply
the equilibrium price increases
the equilibrium price increases, albeit by a negligible amount
the demand curve will shift back to its original level
The new rice diet that is being marketed heavily in the U.S. as a cure for cancer would increase the demand for rice. This would shift the demand curve rightward. This shift of the demand curve would increase demand and price
The hw healthy rainy season that positively affects the rice crop in California woild increase the supply of rice and as a result the supply curve would shift to the right. The rightward shift of the supply curve would cause quantity to rise and price to fall.
This combined effect would lead to a rise in quantity and a rise in price by only a negligible amount.
I hope my answer helps you
Zoe, who is risk averse, purchased flight cancellation insurance which will cover the cost of her non-refundable $500 airline ticket if she is unable to travel due to illness. Zoe faces a 10 percent probability of becoming ill and then using the insurance.a) The fair insurance premium (i.e., selling price) for this insurance is $450.b) Zoe’s maximum willingness to pay for the insurance is $50.c) Zoe’s personal risk premium must exceed the actuarially fair price.d) None of the above.
Answer: Zoe’s maximum willingness to pay for the insurance is $50
Explanation:
From the question, we are informed that Zoe, who is risk averse, bought flight cancellation insurance which will cover the cost of her non-refundable $500 airline ticket if she is unable to travel due to illness wnd also that Zoe faces a 10 percent probability of becoming ill and then using the insurance.
The expected value of the insurance will be the cost of the airline ticket multiplied by the probability of her becoming ill. This will be:
= $500 × 10%
= $500 × 0.1
= $50
Based on the calculation, it can be concluded that Zoe’s maximum willingness to pay for the insurance is $50.
You come across different kinds businesses every day. The following sentences describes some businesses. Using the description of each business, classify it as a sole proprietorship, a partnership, a corporation, or a Limited liability company/limited liability partnership.
a. Anthony started a tutoring website. After a few months, a publishing company filed a lawsuit against his company for copyright infringement. Anthony had to shut down his business and lost all his personal assets in the process.
b. Willie started a business, based in a different state, with his unde. Due to the business's underperformance, they had to dose the business. Willie, however, ended up losing his house due to a litigation claim.
c. James, the CEO of a beverage company, is required to certify the accuracy of information provided in the company's quarterly reports.
Answer:
The correct answers are:
A - Sole propietorship
B - Partnership
C - Corporation
Explanation:
A) The name of "Sole Propietorship" is refered to a type of enterprise whose main characteristics reside in the fact that the ownership belongs to one person only and that person receives all the profits and is also fully unlimited liable for the debts of the business. Therefore that in that case Anthony started a sole propietorship
B) The name of "Partnership" is refered to a type of enterprise that is characterized for the fact of being a business that is operated and managed by two or more parties that have made a formal arregenment in order to work together and both obtain profits equally and also share the responsibility of the debts and its liability together equally. Therefore that in that case Willie has started a partnership.
C) The name of "Corporation" is refered to a type of enterprise that basically is characterized by the fact of being a different legal person that itw owners and therefore that the ones that own the business do not take unlimited responsibility for the actions of the company and its debts. The most common in this type of companies is that the owners hire many employees, among them, CEOs.
Which of the following is not descriptive of external environmental scanning? used as a tool for corporations to avoid strategic surprise used to monitor, evaluate, and disseminate information relevant to the organizational development of strategy used to identify major stockholders used to determine a firm's competitive advantage used as a tool to ensure a corporation's long-term health
Answer:
used to identify major stockholders
Explanation:
Environmental scanning is a management strategy that focuses on systematically acquiring informations about occasions, trends, events or patterns through surveys and analysis of these information in an organisation's external and internal environment. The informations acquired through environmental scanning is then used by the executive management in strategically planning the organisation's future and exploitation of available opportunities for the success of the organization.
The internal environmental scanning offers an organization strength and weakness while the external environmental scanning provides information about opportunities and threats.
Generally, the external environmental scanning gives an overview of the opportunities in the market as well as potential threats to an organization.
Hence, the following are descriptive of an external environmental scanning;
1. Used as a tool for corporations to avoid strategic surprise.
2. Used to monitor, evaluate, and disseminate information relevant to the organizational development of strategy.
3. Used to determine a firm's competitive advantage.
4. Used as a tool to ensure a corporation's long-term health.
Indicate whether each of the statements below about a perfectly competitive market is true or false. a. In general, the market demand curve in a perfectly competitive market is perfectly elastic. False True b. In general, an individual firm in a perfectly competitive market faces a perfectly elastic demand curve. True False c. An individual firm in a perfectly competitive market can obtain a higher price for its product by reducing output. True False d. An individual firm in a perfectly competitive market must lower its price to sell more of its product. True False f. In a perfectly competitive market, average revenue is equal to the market price. False True e. In a perfectly competitive market, marginal revenue is equal to the market price. False True
Answer:
A. False
B. True
C. False
D. False
E. True
F. True
Explanation:
A perfect competition is characterised by many buyers and sellers of homogenous goods and services. Market prices are set by the forces of demand and supply. There are no barriers to entry or exit of firms into the industry.
In the long run, firms earn zero economic profit. If in the short run firms are earning economic profit, in the long run firms would enter into the industry. This would drive economic profit to zero.
Also, if in the short run, firms are earning economic loss, in the long run, firms would exit the industry until economic profit falls to zero.
If a seller increases her price, her demand would fall to zero because customers woild patronize other suppliers. Also, there is no incentive to reduce price because the firm would be making a loss. This is the reason why the firm's demand curve is perfectly elastic, the firm can only sell at one price. This price is set by the market forces.
The market's demand curve is downward sloping
Price = average revenue = Marginal revenue
I hope my answer helps you
In general, the market demand curve in a perfectly competitive market is perfectly elastic.
A. FalseIn general, an individual firm in a perfectly competitive market faces a perfectly elastic demand curve.
B. TrueAn individual firm in a perfectly competitive market can obtain a higher price for its product by reducing output.
C. FalseAn individual firm in a perfectly competitive market must lower its price to sell more of its product
D. FalseIn a perfectly competitive market, marginal revenue is equal to the market price.
E. Tr ueIn a perfectly competitive market, average revenue is equal to the market price
F. TrueAccording to the principles of economics, we can see that in a perfectly competitive market, the marginal revenue is equal to the market price and the average revenue is equal to the market price.
A perfectly competitive market is a market where there is equal chances for competitors in an ideal scenario
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The fair values of all of Sirius's assets and liabilities were equal to their book values except for inventory that had a fair value of $85,000, land that had a fair value of $60,000, and buildings and equipment that had a fair value of $250,000. Buildings and equipment have a remaining useful life of 10 years with zero salvage value. Paradox Company decided to employ push-down accounting for the acquisition. Subsequent to the combination, Sirius continued to operate as a separate company. Based on the preceding information, what amount will be present in the revaluation capital account, when consolidating entries are prepared?
Answer:
$0
Explanation:
The fair value is the value above the book value. The financial statements are prepared at historic cost and when the value of assets rises a revaluation account is created to present financial statements accurate. The fair values of Sirius's assets are equal to book value and all assets are presented at cost or book value. There will be no revaluation charged to the consolidated statement.
If the government began providing free textbooks to college students who would otherwise have bought their books from the private sector, the government's action would result in:_______
A) a Ricardian dilemma.
B) a direct expenditure offset.
C) an increase in real Gross Domestic Product (GDP).
D) a reduction of the government deficit.
Answer:
Option (B) is the correct answer to this question.
Explanation:
As the government spends more money, businesses within the private sector typically spend less.
Specific budget offsets refer to the private-sector expenditures through which compensation was generated as a result of expansionary budgetary policy decisions becoming implemented. The private sector activities in investment profits that counter government spending behavior by the state. Some income from federal spending in an environment competing with corporate companies must be offset by any government expenditure.
Other options are incorrect because they are not related to the given scenario.
In May direct labor was 40% of conversion cost. If the manufacturing overhead for the month was $120,600 and the direct materials cost was $29,200, the direct labor cost was:
Answer:
direct labor= $80,400
Explanation:
Giving the following information:
In May direct labor was 40% of conversion cost. The manufacturing overhead for the month was $120,600.
The conversion costs are the sum of direct labor and manufacturing overhead.
Conversion costs= 120,600/0.6= 201,000
direct labor= 210,000*0.4= 80,400
Suppose that Boeing and Rolls-Royce Holdings are the sole producers of a particular turbo engine. The two firms currently charge the same price for their products. If neither firm reduces the price of its turbo engine, each firm earns $50 million in profit. If both firms reduce their prices, then each firm will earn $10 million in profit. If one firm reduces its price and the other does not, then the firm that reduces price will earn a profit of $70 million while the other firm will earn a profit of $5 million. If the firms can operate as a cartel, what will they do
Answer:
The two firms will manipulate the market in unison, to maintain the same price, which guarantees the optimum benefit for both firms, as opposed to if one or both of them reduces its price.
Explanation:
A cartel is a group of independent market participants that collude with each other in order to improve their profits and dominate the market. Cartels are usually in the same line of business, and they form a type of alliance as competitors. Cartel use price fixing, bid rigging, and reductions in output, to dominate the market and to maximize their profit. They are usually frowned upon in a free market system.
In this case, if the the two firms Boeing and Rolls-Royce operates as a cartel, they will bend the market rules by fixing their prices, instead of letting market drivers like demand and supply to determine their selling price, they might also reduce their output so that they both have the same level of output, or do any other form of manipulation in unison to maintain the same price. This is because both companies will benefit equally if they maintain the same price, as opposed to if one or both of them reduces price.
T. Boone Pickens football stadium at Oklahoma State University has a seating capacity of about 40,000. Assume the stadium sells out all six home games before the season begins and the athletic department collects $31 million in ticket sales.
Required:
a. What was the average price per season ticket and average price per individual game ticket sold?
b. Record the advance collection of $29 million in ticket sales.
c. Record the revenue earned after the first home game was completed.
Answer:
Total collection of ticket sales is $31 million
Seating capacity is 40,000 tickets
Average price per season ticket = Total collection / Seating capacity
=$31,000,000 / 40,000
=$775
Therefore, the average price per season ticket is $775
Average price per individual game ticket sold = Average price per ticket / Number of games
= 775 / 6
= $129
Therefore, the average price per individual game sold is $129 and the number of games is 6
2. Journal entry to record advance collection of $31 million in ticket sales
Account Title and Explanation Debit$ Credit$
Cash $31,000,000
Unearned Ticket Revenue $31,000,000
(To record entry for advance received)
3. Journal entry to record revenue earned after the first home game was completed
Account Title and Explanation Debit$ Credit$
Unearned Ticket Revenue 5,160,000
($129 per individual game * 40,000 tickets)
Service Revenue 5,160,000
(To record unearned ticket revenue)
Platen purchased inventory on August 17 and received an invoice with a list price amount of $5,900 and payment terms of 4/10, n/30. Platen uses the net method to record purchases. For what amount should Platen record the purchase
Answer:
$5,664
Explanation:
Calculation of the amount that Platen should record the purchase.
Using this formula
List price -(Percentage of payment term × list price)
Let plug in the formula
$5,900 -(4%×5,900 )
=$5,900-$236
=$5,664
Therefore Platen should record the purchase on August 17 as a:
Debit to Purchases (periodic system) and a Credit to Accounts Payable for $5,664
Therefore the amount that Platen should record the purchase will be $5,664
Scorpion Company has net credit sales of $5,400,000 for the year and it estimates that doubtful accounts will be 2% of sales. If its Allowance for Doubtful Accounts has a credit balance of $18,000 prior to adjustment, its balance after adjustment will be a credit of:
Answer:
Balance after adjustment will be a credit of $90,000
Explanation:
Particulars Amount
Non-collectible accounts $108,000
Credit balance $18,000
Balance Adjustment $90,000
Balance after adjustment will be a credit of $90,000
Note: Non-collectible accounts = 2% * $5,400,000 =$108000
Kansas Company acquired a building valued at $151,000 for property tax purposes in exchange for 12,000 shares of its $3 par common stock. The stock is widely traded and selling for $18 per share. At what amount should the building be recorded by Kansas Company
Answer:
The building would be recorded by Kansas Company for an amount of $216,000
Explanation:
In order to calculate the amount should the building be recorded by Kansas Company we would have to calculate the value of the building with the following formula:
value of the building= shares exchanged*Market value per share
shares exchanged=12,000 shares
Market value per share=$18
Therefore, value of the building=12,000*$18
value of the building=$216,000
The building would be recorded by Kansas Company for an amount of $216,000
The adjusted trial balance of Ryan Financial Planners appears below.
RYAN FINANCIAL PLANNERS
Adjusted Trial Balance
December 31, 2014
Debit Credit
Cash $2,660
Accounts Receivable 2,140
Supplies 1,850
Equipment 15,900
Accumulated Depreciation-Equipment $3,975
Accounts Payable 3,310
Unearned Service Revenue 3,205
Common Stock 10,000
Retained Earnings 4,510
Dividends 1,000
Service Revenue 4,300
Supplies Expense 410
Depreciation Expense 2,420
Rent Expense 2,920
$29,300 $29,300
Using the information from the adjusted trial balance, you are to prepare for the month ending December 31:
1. An income statement. (Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).)
Dividends Expenses Net Income / (Loss) Retained earnings, December 1 Retained earnings, December 31 Revenues Total Expenses Total Revenues
RYAN FINANCIAL PLANNERS
Income Statement
For the Month Ended December 31, 2014
Dividends Expenses Net Income / (Loss) Retained earnings, December 1 Retained earnings, December 31 Revenues Total Expenses Total Revenues
2. A retained earnings statement.
RYAN FINANCIAL PLANNERS
Retained Earnings Statement
For the Month Ended December 31, 2014
3. A balance sheet. (List Assets in order of liquidity.)
RYAN FINANCIAL PLANNERS
Balance Sheet
December 31, 2014
Dividends Expenses Net Income / (Loss) Retained earnings, December 1 Retained earnings, December 31 Revenues Total Expenses Total Revenues
less
Assets
Liabilities and Stockholders' Equity
Current AssetsLiabilitiesIntangible AssetsLong-term InvestmentsLong-term LiabilitiesProperty, Plant and EquipmentStockholders' EquityTotal AssetsTotal Current AssetsTotal Current LiabilitiesTotal Intangible AssetsTotal LiabilitiesShort-term InvestmentsTotal Long-term InvestmentsTotal Long-term LiabilitiesTotal Property, Plant and EquipmentTotal Liabilities and Stockholders
Answer and Explanation:
The preparation is presented below:
1. For income statement
Particulars (in dollars)
Service Revenue 4,300
Less: Supplies Expense 410
Gross Income 3,890
Less: Depreciation Expense 2,420
Less: Rent Expense 2,920
Income Statement ($1,450) i.e net loss
It records expenses incurred and revenues earned
3. For retained earnings statement
Retained Earnings Statement $
Beginning Retained Earnings 4,510
Less: Dividend Paid (1,000)
Less: Net Loss for the year (1,450)
Ending Retained earning 2,060
It records the dividend paid and the net loss for the year
2. For Balance Sheet
Assets $
Non-Current Asset
Equipment (15,900 - 3,975) 11,925
Current Asset
Cash 2,660
Accounts Receivable 2,140
Supplies 1,850
Total current assets 6,650
Total Asset 18,575 (11,925 + 6,650)
Common Stock 10,000
Add: Retained Earnings 2,060
Liabilities
Current Liabilities
Unearned Service Revenue 3,205
Accounts Payable 3,310
Total current liabilities 6,515
Total Equity and Liability 18,575 ($10,000 + $2,060 + $6,515)
It shows the financial position, performance of the company
On January 1, 20X6, Plus Corporation acquired 90 percent of Side Corporation for $180,000 cash. Side reported net income of $30,000 and dividends of $10,000 for 20X6, 20X7, and 20X8. On January 1, 20X6, Side reported common stock outstanding of $100,000 and retained earnings of $60,000, and the fair value of the noncontrolling interest was $20,000. It held land with a book value of $30,000 and a market value of $35,000 and equipment with a book value of $50,000 and a market value of $60,000 at the date of combination. The remainder of the differential at acquisition was attributable to an increase in the value of patents, which had a remaining useful life of five years. All depreciable assets held by Side at the date of acquisition had a remaining economic life of five years. Plus uses the equity method in accounting for its investment in Side. Based on the preceding information, the increase in the fair value of patents held by Side is:
Answer:
$25,000
Explanation:
Plus corporation acquired 90% of Side Corporation for $180,000 cash.
Net income = $30,000
Dividend for 3 years = $10,000
Common stock outstanding = $100,000
Retained earnings = $60,000
Fair value = $20,000
Book value of land = $30,000
Market value of land = $35,000
Book value of equipment = $50,000
Market value of equipment = $60,000
Required:
Find the increase in the fair value of patents held by Side Corporation.
To find the increase in the fair value of patents, use:
Increase in fair value = Fair value of corporation - Total value without patent.
Where
Fair value = $180,000 + $20,000 = $200,000
Total value without patent = common stoc(100,000) + retained earnings(60,000) + equipment adjustment($60,000 - $50,000 = $10,000) + land adjustment($35,000 - $30,000= $5,000) =
$100,000 + $60,000 + $10,000 + $5,000 = $175,000
Therefore,
Increase = Fair value of corporation($200,000) - Total value without patent($175,000) = $25,000
The increase in the fair value of patents held by Side Corporation is $25,000
A supermarket displays featured items at the ends of aisles. These displays
are called
Answer:
These are the options for the question:
A. exteriors
B. endcaps
C. merchandisers
D. props.
And this is the correct answer:
B. endcaps
Explanation:
The small billboards that display items at the end of aisles are called endcaps.
They are usually used to display items that are on discount. Other times, they are simply used to sign the category of products that can be found in the respective aisle.
Answer:
endcaps
Explanation:
For each event listed below, identify the accounts that should be used to record the economic event and the dollar amount for that account. You should enter the letters that correspond to the accounts that should be used, along with the related dollar amounts. Your answers will be evaluated based on whether you have included every account and the related dollar amount that is needed and not included any account that is not needed. An account can be used in analyzing more than one event.A. additional paid-in capitalB. bonds payableC. cashD. common stockE. discount on bonds payableF. equipmentG. interest expenseH. interest payableI. preferred stockJ. premium on bonds payableK. treasury stock(Example:Event: The company purchased equipment, paying cash of $15,0001,) The company issued bonds in the amount of $10,000,000, receiving cash of $9,400,000 at the time of issuance.
Answer: C $9,400,000 E $600,000; B $10,000,000
Explanation:
The Company Issued bonds worth $10,000,000 but only received $9,400,000 in cash.
This means that they issued the Bonds at a discount. With the discount being the difference between how much was issued and how much was received.
This discount will be sent to the Discount on Bonds Payable account.
The Cash received of $9,400,000 will be sent to the cash account.
The company will still have to pay the entire figure of $10,000,000 in bonds so the full amount will go to the Bonds Payable account.
The Journal Entry is thus,
DR Cash $9,400,000
DR Discount on Bonds Payable $600,000
CR Bonds Payable $10,000,000