Answer:
A. Vogue $125,800
Beauty $199,800
Glamour $340,400
B. Vogue $144,000
Beauty $246,000
Glamour $276,000
Explanation:
A. Computation for the allocation rate and the budgeted overhead cost for each product Using direct labor hours as the cost driver
First step is to calculate the Product Allocation rate
Product Allocation rate =$666,000/18,000
Product Allocation rate=$37.00
Now let calculate the allocation rate and the budgeted overhead cost for each product
Using this formula
Allocated Cost=Product Allocation rate * Weight of Base
Let plug in the formula
Vogue= $37.00 * 3400
Vogue = $125,800
Beauty= $37.00 * 5400
Beauty= $199,800
Glamour=$37.00 * 9200
Glamour = $340,400
Total $666,000.00
($125,800+$199,800+$340,400)
Therefore the allocation rate and the budgeted overhead cost for each product Using direct labor hours as the cost driver will be :
Vogue $125,800
Beauty $199,800
Glamour $340,400
B. Computation for the allocation rate and the budgeted overhead cost for each product Using
Use machine hours as the cost driver
First step is to calculate the Product Allocation rate
Product Allocation rate =$666,000/5,550
Product Allocation rate=$120.00
Now let calculate the allocation rate and the budgeted overhead cost for each product
Using this formula
Allocated Cost=Product Allocation rate * Weight of Base
Vogue=$120.00 * 1200
Vogue = $144,000
Beauty= $120.00 * 2050
Beauty = $246,000
Glamour= $120.00 * 2300
Glamour = $276,000
Total $666,000
($144,000+$246,000+$276,000)
Therefore the allocation rate and the budgeted overhead cost for each product Using
Use machine hours as the cost driver will be:
Vogue $144,000
Beauty $246,000
Glamour $276,000
A company incurred the following quality costs in the last month. Evaluating finished product $113,000 Quality Management training $8,000 Responding to customer complaints $4,000 Repairing finished product $19,000 Developing Voice of Customer Surveys $11,000 How much did the company spend on prevention costs
Answer:
The company spent $8,000 on prevention costs.
Explanation:
a) Data and Analysis:
Quality Costs incurred in the last month:
Evaluating finished product $113,000
Quality Management training $8,000
Responding to customer complaints $4,000
Repairing finished product $19,000
Developing Voice of Customer Surveys $11,000
b) The only prevention costs incurred was the $8,000 spent on Quality Management training. Other costs incurred were for detection and correction of quality problems.
describe the role of the public sector
Answer:
The public sector includes all sorts of government (central, state, and local). It provides basic goods or services that are either not, or cannot be, provided by the private sector, for example, schools, roads, etc.
Explanation:
hope this helps!! please mark brainliest :))
Pedro, not a dealer, sold real property that he owned with an adjusted basis of $120,000 and encumbered by a mortgage for $56,000 to Pat in 2018. The terms of the sale required Pat to pay $28,000 cash, assume the $56,000 mortgage, and give Pedro 11 notes for $12,000 each (plus interest at the Federal rate). The first note was payable two years from the date of sale, and each succeeding note became due at two-year intervals. Pedro did not elect out of the installment method for reporting the transaction. If Pat pays the 2020 note as promised, what is the recognized gain to Pedro in 2020 (exclusive of interest)
Answer:
$64,000
Explanation:
Calculation for the recognized gain to Pedro in 2020
First step is to calculate the Realized gain
Realized gain=($120,000+$12,000+$28,000+$56,000-$120,000)
Realized gain=$96,000
Second step is to calculate the Contract Price
Contract Price=$216,000-$56,000
Contract Price=$160,000
Now let calculate the recognized gain to Pedro in 2020
Recognized gain=$160,000-$96,000
Recognized gain=$64,000
Therefore the recognized gain to Pedro in 2020 is $64,000
Before making month-end adjustments, net income of Bobwhite Company was $232,500 for March. Adjusting entries are necessary for the following items:
Depreciation for the month of March: $4,400.
Rental income accrued during March, tenant to pay in April: $910.
Supplies used in March: $310.
Fees earned in March that had been collected in advance: $3,700.
After recording these adjustments, net income for March is:_________
a. $112,400.
b. $113,620.
c. $117,000.
d. $110,800.
Answer:
Net income after adjustment $225,000
Explanation:
The various adjustments are effected below:
$ Note
Net income before adjustment 232,500
Depreciation (4,400) 1
Rental income 910 2
Supplies (310) 3
Fees earned (3,700) 4
Net income after adjustment 225,000
Notes
1 Depreciation represents a consumption of asset hence it is an expense which reduces profit .So, it deducted
2. Rental income accrued implies income earned but not received. So we need to record it for the period it was earned, hence we add it.
3. Supplies used represents consumption of assets, i.e an expense. So, we deduct it from the income.
4. The income received in advance represents unearned income . This would be deducted from the net income
Assume the firms operating in an oligopolistic market experience a relatively small change in marginal costs. According to the kinked demand curve model this would: A) cause a large change in the profit-maximizing level of output. B) leave the equilibrium price unchanged. C) cause the profit-maximizing level of output to change by the same amount and in the same direction. D) cause the profit-maximizing price to change by the same amount but in the opposite direction.
Answer:
B) Leave the equilibrium price unchanged.
Explanation:
Oligopolistic market is the arrangement where few companies offer same product to the customers. There is very less competition in the market so every supplier has fair chance for operating their business successfully. The kinked demand model curve in oligopolistic market would leave the equilibrium price unchanged.
A lender is considering what terms to allow on a loan. Current market terms are 8 percent interest for 25 years for a fully amortizing loan. The borrower, Rich, has requested a $100,000 loan. The lender believes that extra credit analysis and careful loan control will have to be exercised because Rich has never borrowed such a large sum before. In addition, the lender expects that market rates will move upward very soon, perhaps even before the loan is closed. To be on the safe side, the lender decides to extend Rich a fixed rate, constant payment mortgage (CPM) loan commitment of $95,000 at 9 percent interest for 25 years. However, the lender wants to charge a loan origination fee to make the mortgage loan yield 10%. What origination fee should the lender charge? What fee should be charged if it is expected that the loan will be repaid after 10 years?
Answer:
1. The origination fee that the lender should charge if Rich will repay the loan after 25 years = $20,000 approximately.
2. The origination fee that the lender should charge if Rich will repay the loan after 10 years = $6,600 approximately.
Explanation:
a) Data and Calculations:
Amount requested by Rich = $100,000
Amount the bank is willing to lend Rich = $95,000
Interest rate = 9%
Period of loan = 25 years or 10 years
From an online finance calculator:
At 10% interest rate:
PMT = $-10,465.97
Sum of all periodic payments = $-261,649.17
Total Interest = $166,649.17
At 9% interest rate:
PMT = $-9,671.59
Sum of all periodic payments = $-241,789.84
Total Interest = $146,789.84
Expected Origination Fee:
Interest at 10% = $166,649.17
Interest at 9% = $146,789.84
Required origination fee = $19,859.32 ($166,649.17 - $146,789.84)
This is equivalent to $20,000
Payment after 10 years:
At 10% interest rate:
PMT = $-15,460.81
Sum of all periodic payments = $-154,608.13
Total Interest = $59,608.13
At 9% interest rate:
PMT = $-14,802.91
Sum of all periodic payments = $-148,029.09
Total Interest = $53,029.09
Expected Origination Fee:
Interest at 10% = $59,608.13
Interest at 9% = $53,029.09
Required origination fee = $6,579.04 or $6,600 ($59,608.13 - $53,029.09)
A prospective MBA student earns $45,000 per year in her current job and expects that amount to increase by 12% per year. She is considering leaving her job to attend business school for two years at a cost of $35,000 per year. She has been told that her starting salary after business school is likely to be $115,000 and that amount will increase by 11% per year. Consider a time horizon of 10 years, use a discount rate of 12%, and ignore all considerations not explicitly mentioned here. Assume all cash flows occur at the start of each year (i.e., immediate, one year from now, two years from now,..., nine years from now). Also assume that the choice can be implemented immediately so that for the MBA alternative the current year is the first year of business school. What is the net present value of the more attractive choice? Please round your answer to the nearest dollar.
Answer:
She is considering leaving her job to attend business school for two years at a cost of $35,000 per year. She has been told that her starting salary after business school is likely to be $115,000 a day
Explanation:
Trendy Toes produces sports socks. The company has fixed expenses of $85,000 and variable expenses of $1.20 per package. Each package sells for $2.00.
Requirements:
1. Compute the contribution margin per package and the contribution margin ratio.
2. Find the breakeven point in units and in dollars.
3. Find the number of packages Trendy Toes needs to sell to earn a $26,000 operating income.
Answer:
Results are below.
Explanation:
To calculate the contribution margin and contribution margin ratio we need to use the following formulas:
contribution margin= selling price - unitary variable cost
contribution margin= 2 - 1.2= 0.8
contribution margin ratio= contribution margin / selling price
contribution margin ratio= 0.8 / 2
contribution margin ratio= 0.4
Now, we can calculate the break-even point in units and dollars:
Break-even point in units= fixed costs/ contribution margin per unit
Break-even point in units= 85,000 / 0.8
Break-even point in units= 106,250
Break-even point (dollars)= fixed costs/ contribution margin ratio
Break-even point (dollars)= 85,000 / 0.4
Break-even point (dollars)= $212,500
Finally, the desired profit is $26,000:
Break-even point in units= (fixed costs + desired profit) / contribution margin per unit
Break-even point in units= 111,000 / 0.8
Break-even point in units= 138,750
. Explain factors which may cause the demand curve to shift outward
Answer:
Answer is below
Explanation:
Factors that may cause the demand curve to shift outward are:
1. changes in tastes and preference: when there is a change in taste for example commodity A, whereby people tend to enjoy its taste, the will be an outward shift in the demand curve of commodity A
2. income of the consumers: when the income of consumers increases, they tend to buy more of a certain commodity they enjoy, hence there will be an outward shift in that commodity's demand curve
3. prices of substitute or complement goods: for example, an increase in the price of a substitute will cause consumers to demand more for a particular commodity, hence, outward in demand shift curve occurs
4. expectations about future conditions and prices: when there is speculation about an increase in the price of an essential commodity or goods consumers enjoy, people tend to buy more in a given moment, hence there exists an outward shift in the demand curve
5. Population of consumers in the market: increase in the population of consumers of a certain commodity is directly proportional to an increase in demand of that commodity, hence there exists an outwards shift in the demand curve.
Job interviews can change your life. They can also be stressful, but if you learn about the process and prepare yourself ahead of time, you will feel more relaxed. Adequately understanding the interview process, its purpose, and its types will help you prepare for an interview. Preparing for an interview can greatly improve your chances of getting the job.
An interview helps__________
Answer:
Employment interviews will persuade almost every applicant of client potential. A further description is provided below.
Explanation:
A dialogue somewhere between a prospective employer and a somewhat job seeker or is considered as a Job interview. A career interesting interview to further decide however if a candidate or a job seeker is eligible for a corporate job or not.It could perhaps become an influential tactic if the person interviewed anything other than that doesn't have reliable details.Suppose two factors are identified for the U.S. economy: the growth rate of industrial production, IP, and the inflation rate, IR. IP is expected to be 4% and IR 6%. A stock with a beta of 1 on IP and 0.7 on IT currently is expected to provide a rate of return of 12%. If industrial production actually grows by 5%, while the inflation rate turns out to be 8%, what will be your expected rate of return on the stock, given the new information about the industrial production rate and the inflation rate
Answer:
14.4%
Explanation:
Calculation for what will be your expected rate of return on the stock.
Expected rate of return on the stock=12% + 1(5%-4%) + .7(8%-6%)
Expected rate of return on the stock=12%+1(1%)+.7(2%)
Expected rate of return on the stock=12%+1%+1.4%
Expected rate of return on the stock=14.4%
Therefore your expected rate of return on the stock is 14.4%
Bob is a farmer and is required to use the accrual method. At the beginning of the year, Bob has inventory, including livestock held for resale, amounting to $10,000. During the year, Bob purchased livestock totaling $3,000. Bob's ending inventory was $4,000. Bob's net sales for the year totaled $17,000. What is Bob's gross profit for the current year
Answer:
$3,000
Explanation:
Gross Profit = Sales - Cost of Sales
Prepare a Trading Account for Bob to determine gross profit.
You are offered an investment that will pay you $250 in one year, $520 the next year, and $750 at the end of the third year. How much is this investment worth if the interest rate is 11%?
Answer: $1,196
Explanation:
Based on the information and the values that are provided in the question, the worth of the investment of the rate of interest is 11% will be calculated as:
=(250 / 1.11) + (520 / 1.11²) + (750 / 1.11³)
= 225.23 + 422.04 + 548.39
= $1,195.66
= $1196 approximately
The worth of the investment will be $1196.
For each error below, indicate:
a. Which accounts are affected
b. Which assertions are violated.
1. An inventory purchase is received but not recorded until the company pays for the goods.
2. Certain repair costs that should be expensed are capitalized.
3. No loss is recorded or disclosed for a pending lawsuit against the client that is material, probable, and can be estimated.
4. Sales shipped FOB shipping point are recorded before the balance sheet date but not shipped until after the balance sheet date.
Answer:
1. Inventory account will be affected and assertions of accuracy and valuation will be violated.
2. Assets are overstated and assertion classification is violated.
3. Liability is understated and assertions of accuracy is violated.
4. No impact.
Explanation:
Assertions are certain claims of a business which a business must fulfill in order to make its financial statements reliable. A company has to record the expense when it is incurred in order to provide accuracy in valuation. In the given cases the assertions are violated which impact business accounts.
LUVFINANCE, Inc. is estimating its WACC. It is operating at its optimal capital structure. Its outstanding bonds have a 12 percent coupon, paid semiannually, a current maturity of 17 years, and sell for $1,162. It has 100,000 bonds outstanding. The firm can issue new 20-year maturity semiannual bonds at par but will incur flotation costs of $50 per bond. The firm could sell, at par, $100 preferred stock that pays a 12 percent annual dividend that is currently selling for $120. The firm currently has 1,000,000 shares of preferred stock outstanding. Rollins' beta is 0.94, the risk-free rate is 3.72 percent, and the market risk premium is 6 percent. The common stock currently sells for $100 a share and there are 5,000,000 shares outstanding. The firm's marginal tax rate is 40 percent.
Required:
What is the WACC?
Solution :
Given :
The cost of the debt is yield to the maturity of the bonds.
The yield on the bond is 10%
The tax rate is 40%
After the tax cost of the debt = 10 ( 1- 0.4 )
= 6 %
Add floatation cost at the rate of 5% = 11%
Cost of the preferred stock = [tex]$\frac{\text{dividend}}{\text{price}}$[/tex]
= [tex]$\frac{120}{12}$[/tex] = 10%
The cost of equity = risk free rate + β x market risk premium
= 3.72 + 0.94 x 6
= 9.36%
WACC is weighted average of the individual securities :
Particulars Value per No. of Market value Weight Cost of Product
security securities security
Bonds 1162 100,000 116,200,000 0.1578 11 1.73621298
Preferred 120 1,000,000 120,000,000 0.1629 10 1.6299918
stocks
Equity 100 5,000,000 500,000,000 0.6791 9.36 6.356968
736,200,000 1 WACC 9.7231730
Therefore, WACC of the firm is 9.72%
Find the following values. Compounding/discounting occurs annually. Do not round intermediate calculations. Round your answers to the nearest cent. a. An initial $400 compounded for 10 years at 5%. $ b. An initial $400 compounded for 10 years at 10%. $ c. The present value of $400 due in 10 years at 5%. $ d. The present value of $2,515 due in 10 years at 10% and 5%. Present value at 10%: $ Present value at 5%: $
Answer:
$651.56
$1037.50
$245.57
$969.64
$1543.99
Explanation:
The formula for calculating future value:
FV = P (1 + r)^n
FV = Future value
P = Present value
R = interest rate
N = number of years
a. 400 x (1.05)^10 = $651.56
b. 400 x (1.1)^10 = $1037.50
formula for determining present value is
PV = f / (1 + r)^n
$400/ (1.05)^10 = $245.57
d. $2515 / (1.1)^10 = $969,64
$2515 / (1.05)^10 = $1543.99
Farmer Owens has an apple orchard that must be pollinated by bees in order to bear fruit. Farmer Owens's neighbor, Maude, owns beehives with bees that can pollinate the apple trees. Suppose the benefit of the bees to Farmer Owens is $ per year. Suppose the bees provide no benefit to Maude but she must pay $ per year to maintain the hives. If Farmer Owens and Maude engage in Coase bargaining, what would likely result?
Answer: A. Farmer Owens would pay Maude between $3,000 and $5,000 to maintain the hives.
Explanation:
Coarse bargaining refers to a scenario where parties involved in a conflict over property rights can reach an efficient agreement that would reflect the costs and values of the property in question.
In this scenario, Farmer Owens is making a benefit of $5,000. Owens would therefore be willing to pay a maximum of $5,000 for the benefit and no more.
Maude spends $3,000 on the hives which means that she needs a minimum of $3,000 to cover those costs.
They should therefore reach an agreement where Farmer Owens would pay between $3,000 and $5,000 to Maude so that she can maintain the hives.
An environmental consultant is considering the installation of a water storage tank for a client. The tank is estimated to have an initial cost of $309,000, and annual maintenance costs are estimated to be $7,100 per year. As an alternative, a holding pond can be provided a short distance away at an initial cost of $225,000 for the pond plus $90,000 for pumps and piping. Annual operating and maintenance costs for the pumps and holding pond are estimated to be $16,000. The planning horizon is 20 years, and at that time, neither alternative has any salvage value.
Required:
Determine the preferred alternative based on a present worth analysis with a MARR of 20 percent/year.
Answer:
The preferred alternative based on a present worth analysis with a MARR of 20% per year is:
the Installation of a water Storage Tank
Explanation:
a) Data and Calculations:
MARR = 20% per year
Time period or planning horizon = 20 years
Alternatives
Tank Pond
Initial costs $309,000 $315,000 ($225,000 + $90,000)
Annual maintenance costs 7,100 16,000
PV annuity factor 4.870 4.870
Total PV: maintenance cost $34,577 $77,920 ($16,000 * 4.870)
Total PW costs $343,577 $392,920 ($315,000 + $77,920)
Present worth is the same as the present value (PV) of a future amount, discounted to the present using a specified rate.
Which of the following completes the sentence, 'The target audience’s ________ will include the market’s social activities and styles, such as their level of social media participation, the channels they utilize and the communities in which they are active, and their behavior in social communities'?
Answer:
Social profile
Explanation:
The completes sentence is
'The target audience’s Social profile
will include the market’s social activities and styles, such as their level of social media participation, the channels they utilize and the communities in which they are active, and their behavior in social communities''
Social profile gives the description of social characteristics of different individuals which defined them on social media and in communities
(Ratio Computation and Analysis; Liquidity) As loan analyst for Utrillo Bank, you have been presented the following information.
Each of these companies has requested a loan of $50,000 for 6 months with no collateral offered. Because your bank has reached its quota for loans of this type, only one of these requests is to be granted.
Instructions
Which of the two companies, as judged by the information given above, would you recommend as the better risk and why? Assume that the ending account balances are representative of the entire year.
Toulouse Co. Lautrec Co.
Assets
Cash $120,000 $320,000
Receivables 220,000 302,000
Inventories 570,000 518,000
Total current assets9 10,000 1,140,000
Other assets 500,000 612,000
Total assets $1,410,000 $1,752,000
Liabilities and Stockholders
Current liabilities $301,600 $350,600
Long-term liabilities 404,300 499,300
Capital stock and retained earnings
713,600 904,200
Total liabilities and stockholders' Equity
$1,419,500 $1,754,100
Annual sales $ 931,300 $1,506,700
Rate of gross profit on sales30% 40%
Answer:
Utrillo Bank
Ratio Computation and Analysis: Liquidity Ratios:
Based on the computed liquidity ratios below, the loan should be advanced to Lautrec Co. It has better performing liquidity ratios than Toulouse Co.
Explanation:
a) Data and Calculations:
Loan request = $50,000
Period of loan = 6 months with no collateral
Account balances:
Toulouse Co. Lautrec Co.
Assets
Cash $120,000 $320,000
Receivables 220,000 302,000
Inventories 570,000 518,000
Total current assets 9 10,000 1,140,000
Other assets 500,000 612,000
Total assets $1,410,000 $1,752,000
Liabilities and Stockholders
Current liabilities $301,600 $350,600
Long-term liabilities 404,300 499,300
Capital stock and
retained earnings 713,600 904,200
Total liabilities and
stockholders' Equity $1,419,500 $1,754,100
Annual sales $ 931,300 $1,506,700
Rate of gross profit on sales 30% 40%
Current Ratio = Current assets/Current liabilities
Toulouse Co. Lautrec Co.
Current Ratio $910,000/$301,600 $1,140,000/$350,600
= 3.02 3.25
Quick Ratio = (Current assets - Inventory)/Current liabilities
Toulouse Co. Lautrec Co.
Quick Ratio $910,000-570,000/$301,600 $1,140,000-518,000/$350,600
= 1.13 1.77
Operating Cash Flow Ratio = Cash/Current liabilities
Toulouse Co. Lautrec Co.
Operating Cash Flow Ratio = $120,000/$301,600 $320,000/$350,600
= 0.39 0.91
Days Receivable outstanding = Average receivables/Sales * 365
Toulouse Co. Lautrec Co.
Days Receivable Outstanding $220,000/$931,300 $302,000/$1,506,700
* 365 days
= 86 days 73 days
Income Statement Wayne Corporation had the following revenue and expense account balances (in millions) for a recent year ending May 31:
Depreciation Expense $925
Fuel Expense 3,228
Maintenance and Repairs Expense 1,573
Other Expense 4,995
Provision for Income Taxes 805
Purchased Transportation 1,203
Rentals and Landing Fees 1,748
Revenues 24,698
Salaries and Employee Benefits 8,815
Prepare an income statement.
Answer:
Income Statement
Revenue $24,698
Expenses
Salaries and employee benefits $8,815
Purchased Transportation $1,203
Fuel Expense $3,228
Rental and landing fees $1,748
Depreciation Expense $925
Maintenance and repairs expense $1,573
Provision for income taxes $805
Other expense (revenue) net $4,995
Total Expenses $23,292
Net Income $1,406
I have learned that the tools and equipment in preparing sandwich are important because
Answer the below case problem, giving the legal issue, the governing law and the rationale in support of your conclusion.
Arthur Jensen, Inc., was a corporation engaged in the housing construction business.
Arthur Jensen set up and was the sole owner and president of the corporation. Alaska Valuation Service [AVS] conducted housing appraisals for Jensen on numerous occasions over the years. When AVS took the orders for appraisals, it was not aware that it was dealing with a corporation. It believed that it was dealing directly with Jensen [i.e., as a sole proprietor]. Jensen never specifically informed AVS of his status as the president of Arthur Jensen, Inc. When AVS was not paid for appraisal services that it had performed, AVS sued Arthur Jensen, attempting to hold him personally liable for the unpaid appraisals.
Arthur Jensen argued that he could not be personally liable because he had acted on behalf of his corporation.
1. Decide the case based on the above stated facts.
2. Assuming Arthur Jensen could be held personally liable, how could Arthur
Jensen have better protected himself? [we discussed this in class]
Answer:
1. Decide the case based on the above stated facts.
Corporations provide limited liability to their owners, and one person corporations are legal in all states. Depending on how Arthur handled his business, the corporate veil might or not be lifted. If he separated the corporate account and managed the corporation separately for his other assets, then he is not liable.
On the other hand, if he paid the bills using his personal account, or used the corporation's assets as his own, then the outcome might change. We are not given enough details.
2. Assuming Arthur Jensen could be held personally liable, how could Arthur Jensen have better protected himself?
Simple, he should sign as the president of the corporation and pay using the corporation's account.
How have technological Innovations Increased risks in business organizations!
Answer:
Businesses are more susceptible to information leakages as a result of technological inventions.
They also have to spend more money in the purchase of technologies that might be expensive to maintain.
Explanation:
1. Business organizations carry out a lot of activities that center on information sharing. The advent of technologies comes with risks from hackers who might want to intrude in the information of the company. When the system is compromised, customers can be disappointed and important and sensitive information may be lost to attackers or competing organizations that might fund such attacks. This will impose an information risk to the company.
2. The purchase of new technologies come at a high price. Personnel conversant with the use and operation of these technologies may be hard to find and might require training to be effective in the use of these machines. These machines can easily fall into disuse when they are not properly maintained. This will impose a financial risk to the company.
Answer:
Businesses are more susceptible to information leakages as a result of technological inventions.
They also have to spend more money in the purchase of technologies that might be expensive to maintain.
Explanation:
Hope this helps
What other information do i need to help me make a career decision?
Answer:
How to make a decision
Here are some steps you can take to help you make a decision that involves your career:
Identify and investigate the decision.
Set aside time to think.
Consider your options.
Remember your values.
Ask for a different perspective.
Evaluate your plan.
Explanation:
The accountant for Bellows Corp. was preparing a bank reconciliation as of April 30. The following items were identified:
Bellows' book balance $28,750
Outstanding checks 900
Interest earned on checking account 80
Customer's NSF check returned by the bank 381
In addition, Bellows made an error in recording a customer's check; the amount was recorded in cash receipts as $370; the bank recorded the amount correctly as $730.
Required:
What amount will Bellows report as its adjusted cash balance at April 30, 2013?
Answer:
$27,909
Explanation:
Bellows Corp.
Bank Reconciliation as at April 30, 2013
Unadjusted book balance $28,750
Less:
Outstanding checks $900
NSF checks $381
Add:
Interest earned on checking account $80
Error correction[$730 - $370] $360
Adjusted book balance $27,909
Day Company has the following sales budget: July August September $105,000 $211,000 $134,000 Credit sales represent 80 percent of budgeted sales. Of the credit sales, 20 percent is collected in the month of the sale, 60 percent in the month after the sale, and the remaining 15 percent is collected two months after the sale. Five percent of all sales are uncollectible and written-off. In September, total cash receipts from sales amount to
Answer:
Day Company
In September, total cash receipts from sales amount to:
= $162,080.
Explanation:
a) Data and Calculations:
sales budget: Credit (80%) Cash (20%)
July $105,000 $84,000 $21,000
August $211,000 $168,800 $42,200
September $134,000 $107,200 $26,800
July August September
Sales $105,000 $211,000 $134,000
Credit sales 84,000 168,800 107,200
Cash sales 21,000 42,200 $26,800
20% 16,800 33,750 21,400
60% after sales 50,400 101,280
15% after 2 months 12,600
Total cash receipts from sales $162,080
Nadine Chelesvig has patented her invention. She is offering a patent manufacturer two contracts for the exclusive right to manufacture and market her product. Plan A calls for an immediate single lump payment to her of $35,000. Plan B calls for an annual payment of $1,200 plus a royalty of $0.40 per unit sold. The remaining life of the patent is 10 years. Nadine uses a MARR of 7 %/year.
a. What must be the uniform annual sales volume of the product for Nadine to be indifferent between the contracts, based on a present worth analysis?
b. If the sales volume is below the volume determined in (a), which contract would the manufacturer prefer?
Answer:
A) 9458 units
B) She would prefer the one with the single lump payment of $35,000 because the present value of the other one would increase with an increase in the units sold.
Explanation:
A) To calculate the uniform annual sales volume based on a present worth analysis, we will make use of the formula for present value of annuity.
Thus;
P = PMT × (1 - ((1/(1 - rⁿ))/r
From the question, we are given;
P = $35,000
PMT = (1200 + 0.4x)
r = 7% = 0.07
n = 10
Thus, Plugging in the relevant values, we have;
(1200 + 0.4x)((1 - (1/(1 + 0.07)^10))/0.07 = 35000
This gives;
(1200 + 0.4x) × 7.0236 = 35000
(1200 + 0.4x) = 35000/7.0236
(1200 + 0.4x) = 4983.2
0.4x = 4983.2 - 1200
0.4x = 3783.2
x = 3783.2/0.4
x = 9458 units
B) She would prefer the one with the single lump payment of $35,000 because the present value of the other one would increase with an increase in the units sold.
On March 1, 2019, Rasheed Company assigns $825,000 of its accounts receivable to the Third National Bank as collateral for a $600,000 loan due April 1, 2019. The assignment agreement calls for Rasheed Company to continue to collect the receivables. Third National Bank assesses a finance charge of 2.5% of the accounts receivable, and interest on the loan is 8% (a realistic rate of interest for a note of this type).
Required:
a. Prepare the March 1, 2019, journal entry for Rasheed Company.
b. Prepare the journal entry for Rasheed's collection of $750,000 (need to factor out discounts and sales returns) of the accounts receivable during March of 2019. Sales discounts of $8,000 apply, as well as $22,000 of sales returns.
c. On April 1, 2019, Rasheed paid Third National all that was due from the loan it secured on March 1, 2019. Prepare the journal entry to record this payment.
Answer:
A.Dr Cash 579,375
Dr Finance charge 20,625
Cr Loan payable 600,000
Dr Accounts Receivable Assigned 825,000
Cr Accounts Receivable 825,000
b) Dr Cash 750,000
Cr Sales discounts 8,000
Cr Sales returns 22,000
Cr Accounts Receivable Assigned 720,000
c)Dr Loan Payable 600,000
Cr nterest expense 4,000
Cr Cash 596,000
Explanation:
a. Preparation for March 1, 2019, journal entry for Rasheed Company
March 01,2019
Dr Cash 579,375
(600,000-20,625)
Dr Finance charge (825,000*2.5%) 20,625
Cr Loan payable 600,000
(Loan amount received)
March 01,2019
Dr Accounts Receivable Assigned 825,000
Cr Accounts Receivable 825,000
(Assigning Accounts receivable)
b.Preparation of the journal entry for Rasheed's collection of the amount of $750,000 of the accounts receivable during March of 2019
March, 2019
Dr Cash 750,000
Cr Sales discounts 8,000
Cr Sales returns 22,000
Cr Accounts Receivable Assigned 720,000
(750,000-8,000-22,000)
C.Preparation of the journal entry to record this payment.
April 01,2019
Dr Loan Payable 600,000
Cr nterest expense (600,000*8%*1/12) 4,000
Cr Cash 596,000)
(600,000-4,000)
(Loan settled along with interest)
QS 8-7 Computing revised depreciation LO C2 On January 1, the Matthews Band pays $65,200 for sound equipment. The band estimates it will use this equipment for five years and after five years it can sell the equipment for $2,000. Matthews Band uses straight-line depreciation but realizes at the start of the second year that this equipment will last only a total of three years. The salvage value is not changed. Compute the revised depreciation for both the second and third years.
Answer:
$25,280 per year
Explanation:
The computation of the revised depreciation for both the second and third years is shown below:
But before that following calculations need to be done
Depreciation for year 1 = [Cost – Salvage Value] ÷Useful Life
= [$65,200 - 2,000] ÷ 5 Years
= $12,640
Now Book Value at point of revision is
= Cost - First year depreciation
= $65,200 - $12,640
= $52,560
Now
Remaining Depreciable Cost = Book Value at the point of revision - Salvage Value
= $52,560 – 2,000
= $50,560
And, finally Depreciation per year for Year 2 and 3 is
= Depreciable cost / Remaining useful life
= $50,560 ÷ 2 Year
= $25,280 per year