Answer:
The correct answers are the following:
a - 4 Sunk
b - 5 Opportunity
c - 3 Fixed
d - 2 Variable
e - 6 Incremental
f - 1 Recurring
g - 7 Direct
h - 8 Non-recurring
Explanation:
a) Sunk costs are those that have already occurred in the past and they can not be recovered again so therefore that they are not relevant at the time of taking decisions regarding the futue.
b) Opportunity costs are those that try to measure and show the sacrifice done at the time of making a decision when that sacrifice represents the best second option that the person could have done.
c) Fixed costs are those that are always the same amount and do not change with the activity level of the production of the company.
d) Variable costs are those that do change with the amount of activity level that the company has during the production process.
e) Incremental costs are those that increase the cost level of the production while the output level increases as well, so they are a concept on the margin.
f) Recurring costs are those that tend to repete continously in the production process so the company already know how much the amount of the cost is.
g) Direct costs are those that the company associates with the production process regarding the commodities and all the primary sources that are needed to produce the good and therefore that they impact directly in the production and in the cost of the final product.
h) Non-recurring costs are those that the company are not familiar with due to the fact that they do not repete often and therefore tend to happen once in a while.
Ashley transfers property with a tax basis of $8,180 and a fair market value of $4,660 to a corporation in exchange for stock with a fair market value of $3,520 and $445 in cash in a transaction that qualifies for deferral under section 351. The corporation assumed a liability of $695 on the property transferred. What is Ashley's tax basis in the stock received in the exchange
Answer:
$3,720
Explanation:
Since the shareholder's tax basis will be to his tax basis in the property transferred of the amount of $8,180 which is a substituted basis minus the amount of $695 which is the liability assumed by the corporation then less the fair market value of boot received.
Therefore if Ashely decide to sells the stock for $3,520, the loss she will recognized will be $3,720($8,180-$4,460) which is an amount equal to the loss deferred of $3,720
Hence ,Ashley's tax basis in the stock received in the exchange will be $3,720
A company that makes shopping carts for supermarkets and other stores recently purchased some new equipment that reduces the labor content of the jobs needed to produce the shopping carts. Prior to buying the new equipment, the company used 5 workers, who together produced an average of 100 carts per hour. Workers receive $20 per hour, and machine cost was $40 per hour. With the new equipment, it was possible to transfer one of the workers to another department, and equipment cost increased by $11 per hour while output increased by 5 carts per hour.
Required:
a. Compute the multifactor productivity(MFP) (labor plus equipment) under the Prior to buying the new equipment. (Round to 4 decimal places)
b. Compute the % growth in productivity between the Prior and after buying the new equipment. (Round to 2 decimal places)
Answer:
a. The multifactor productivity(MFP)Prior to buying the new equipment=0.71 carts
b. The % growth in productivity between the Prior and after buying the new equipment=12.81%
Explanation:
a. In order to calculate the multifactor productivity(MFP) (labor plus equipment) under the Prior to buying the new equipment we would have to make the following calculation:
multifactor productivity(MFP)Prior to buying the new equipment=Carts produced / [(Number of workers x Worker wage) + Equipment cost)
According to given data we have the following:
Carts produced=100 per hour
(Number of workers= 5
Worker wage=$20
Equipment cost=$40
Therefore, multifactor productivity(MFP)Prior to buying the new equipment=100 / [(5 x $20) + $40
multifactor productivity(MFP)Prior to buying the new equipment=0.71 carts
b. In order to calculate the % growth in productivity between the Prior and after buying the new equipment we would have to make the following calculation:
% growth in productivity between the Prior and after buying the new equipment=(New productivity - Old productivity) / Old productivity] x 100
multifactor productivity(MFP after buying the new equipment=105 / [(4 x $20) + $51
multifactor productivity(MFP after buying the new equipment=0.801
Therefore, % growth in productivity between the Prior and after buying the new equipment=0.801 - 0.71) / 0.71] x 100
% growth in productivity between the Prior and after buying the new equipment=12.81%
g "Seidman Company manufactures and sells 30,000 units of product X per month. Each unit of product X sells for $16 and has a contribution margin of $7. If product X is discontinued, $85,000 in fixed monthly overhead costs would be eliminated and there would be no effect on the sales volume of Seidman Company's other products. If product X is discontinued, Seidman Company's monthly income before taxes should:"
Answer:
Decreased by $125,000
Explanation:
Calculation for Seidman Company's monthly income before taxes should:"
First step is to find the loss in contribution margin using this formula
Loss in contribution margin = Sales unit× contribution margin
Let plug in the formula
Loss on contribution margin=30,000 × $ 7
= ($210,000)
Second step
Fixed monthly overhead = $85,000
Monthly income before taxes =Loss in contribution margin - Fixed monthly overhead
Monthly income before taxes= ($210,000) - $85,000
Monthly income before taxes= $125,000
Thereforre in a situation where product X is discontinued, this means that Seidman Company's monthly income before taxes would get decreased by $125,000
Brian Lee is 30 years and wants to retire when he is 65. So far he has saved (1) $5,850 in an IRA account in which his money is earning 8.3 percent annually and (2) $4,320 in a money market account in which he is earning 5.25 percent annually. Brian wants to have $1 million when he retires. Starting next year, he plans to invest the same amount of money every year until he retires in a mutual fund in which he expects to earn 8.22 percent annually. How much will Brian have to invest every year to achieve his savings goal?
Answer:
he must invest $4,855.64 during each of the following 35 years
Explanation:
years until retiring = 65 - 30 = 35 periods
desired future value $1,000,000
first we must find the future value of his current investments:
$5,850 x (1 + 0.083)³⁵ = $95,312.94
$4,320 x (1 + 0.0525)³⁵ = $25,897.47
total future value = $121,210.41
this means that he needs to save $1,000,000 - $121,210.41 = $878,789.59 more by the time he reaches 65 years of age
we need to use the formula to calculate future value of an annuity:
FV = payment x annuity factor (FV annuity, 8.22%, 35 periods)
FV = $878,789.59 annuity factor (FV annuity, 8.22%, 35 periods) = 180.98322$878,789.59 = payment x 180.98322
payment = $878,789.59 / 180.98322 = $4,855.64
he must invest $4,855.64 during each of the following 35 years
Complements are products or services that have a potential impact on the _________ of the products or services of that company.
Answer:
Value
Explanation:
Hope this helps :)
Colgate reported Diluted EPS of $2.38 in accordance with GAAP. How much higher would EPS be if Colgate ignored the impact of restructuring and other one-time charges during the period? Please provide your answer with 2 decimal places, but without $ sign (Ex: 0.50)
Answer:
EPS will be higher than $2.38
Explanation:
The earnings per share are the income that is accessible to the company's shareholders after all the costs and taxes are deducted. Restructuring costs are one-time costs that are recorded in the income statement as other operating expenses.
The presence of restructuring and other one-time costs in the Revenue Statement leads to lower pre-tax earnings and cause decrease in net profit. When these expenses are excluded, the Earning would increase, resulting in the company's EPS.
The following information describes a product expected to be produced and sold by Hadley Company:selling price.......................$80 per unit
variable costs....................$32 per unit
Toatal fixed costs...............$ 630,000
Required:
(a) calculate the contribution margin in units.
(b) calculate the break-even point in units and in dollar sales.
(c) What dollar amount of sales would be necessary to achieve an income of $120,000?
Answer:
a. Contribution margin per unit is $48 per unit
b. Break-even point in units is 13,125 units; and Break-even point in dollar sales is $1,050,000
c. Dollar amount of sales to achieve $120,000 income is $1,250,000.
Explanation:
These can be determined as follows:
(a) calculate the contribution margin in units.
Contribution margin in units is the selling price per unit minus the variable cost per unit that produces incremental earning for each unit sold. This can be calculated as follows:
Contribution margin per unit = Selling price per unit - Variable cost per unit = $80 - $32 = $48 per unit
b) Calculate the break-even point in units and in dollar sales.
Break even point is the point at which there is no net loss or gain, i.e. where total revenue is equal to to cost. This can be calculated both in units and dollar sales as follows:
Break-even point in units = Total fixed costs / Contribution margin in units = $630,000 / $48 = 13,125 units
Break-even point in dollar sales = Selling price * Break-even point in units = $80 * 13,125 = $1,050,000
(c) What dollar amount of sales would be necessary to achieve an income of $120,000?
To calculate this, we first calculate the contribution margin ratio as follows:
Contribution margin ratio = Contribution margin in units / Selling price = $48 / $80 = 0.60
Therefore, we have:
Dollar amount of sales to achieve $120,000 income = (Targeted income + Total Fixed costs) / Contribution margin ratio = ($120,000 + $630,000) / 0.60 = $1,250,000.
a. The contribution margin in units is $48 per unit.
b. The break-even point in units and in dollar sales is $1,050,000.
c. The dollar amount of sales would be necessary to achieve an income of $120,000 is $1,250,000.
a. Contribution margin per unit
Contribution margin per unit = Selling price per unit - Variable cost per unit Contribution margin per unit= $80 - $32
Contribution margin per unit= $48 per unit
b. Break-even point in units and in dollar sales:
Break-even point in units = Total fixed costs / Contribution margin in units
Break-even point in units= $630,000 / $48
Break-even point in units = 13,125 units
Break-even point in dollar = Selling price × Break-even point in units
Break-even point in dollar= $80×13,125
Break-even point in dollar= $1,050,000
c. Dollar amount of sales:
Contribution margin ratio = Contribution margin in units / Selling price
Contribution margin ratio = $48 / $80
Contribution margin ratio = 0.60
Dollar amount of sales = (Targeted income + Total Fixed costs) / Contribution margin ratio
Dollar amount of sales = ($120,000 + $630,000) / 0.60
Dollar amount of sales=$750,000/0.60
Dollar amount of sales = $1,250,000
Inconclusion the contribution margin in units is $48 per unit, the break-even point in units and in dollar sales is $1,050,000 and the dollar amount of sales would be necessary to achieve an income of $120,000 is $1,250,000.
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Beginning and ending Cash account balances of Rainbow, Inc. were $14,000 and $32,000 respectively. If total cash paid out during the period was $30,000, what amount of cash was received during the period
Answer:
Cash receipts = $48,000
Explanation:
A cash budget is statement that shows the estimated cash receipts and the estimated cash payments for a forth coming accounting period. In addition, it provides information about the expected cash balance for the period to which it relates.
With help of a cash budget, a business can plan ahead for the usage of its surplus funds and how to finance its deficit cash position
Cash balance at the end = Opening cash balance + cash receipts - cash payment
Let represent the cash receipts by " y "
32,000 = 14,000 + y - 30,000
32,000 = y - 16 ,000
32,000 + 16,000 = y
48000 = y
Cash receipts = $48,000
Direct-mail questionnaires should be kept to a maximum of how many pages? A.One B.Two C.Three D.Four
Answer:
One page
Explanation:
Direct mail questionnaires should be kept to a maximum of a single page.
This is because the target audience of these mails which are the respondents will treat this like they treat regular mails and my not be disposed to answering or giving responses.
So an increased number of pages would surely further decrease the attention the questionnaire would receive from these respondents.
Thus, it is best that the questionnaire is restricted to a single page.
Adama Company incurred the following costs. Indicate to which account Adama would debit each of the costs.
Sales tax on factory
1. machinery purchased $5,000 Select the account to be debited
Equipment Prepaid
Insurance Building Land
Land Improvements
2. Painting of and lettering on
truck immediately upon purchase 700 Select the account to be debited
Land Prepaid
Insurance Equipment Building Land
Improvements
3. Installation and testing of
factory machinery 2,000 Select the account to be debited
Prepaid
Insurance Building Land Equipment Land
Improvements
4. Real estate broker’s
commission on land purchased 3,500 Select the account to be debited
Land Land Improvements Prepaid
Insurance Building Equipment
5. Insurance premium paid for
first year’s insurance on new truck 880 Select the account to be debited
Land Equipment Prepaid Insurance Land
Improvements Building
6. Cost of landscaping on
property purchased 7,200 Select the account to be debited
Equipment Land
Improvements Land Building Prepaid
Insurance
7. Cost of paving parking lot for
new building constructed 17,900 Select the account to be debited
Land
Improvements Land Building Prepaid
Insurance Equipment
8. Cost of clearing, draining,
and filling land 13,300 Select the account to be debited
Prepaid Insurance Land Land
Improvements Building Equipment
9. Architect’s fees on self-
constructed building 10,000
Answer:
1. Insurance Equipment Building Land
2.Improvements
3.Insurance Building Land Equipment
4.Land
5.Prepaid Insurance
6.Improvements
7.Improvements
8.Land
9.Insurance Building Land Equipment
Explanation:
1. Machinery purchased is a capital expenditure and is included in cost of Equipment.
2. Painting on truck is an improvement, not included in cost of truck
3. These are costs directly related in placing asset in condition of use intended by management. Include in asset cost.
4.These are costs directly related in placing asset in condition of use intended by management. Include in asset cost.
5.This is an asset and economic benefits will flow in the entity in future.
6. Landscaping costs not included in cost of property. Stand on their own as improvements
7. Paving costs not included in cost of property. Stand on their own as improvements
8.These are costs directly related in placing asset in condition of use intended by management. Include in asset cost.
9.These are costs directly related in placing asset in condition of use intended by management. Include in asset cost.
If any of the customers in the market purchase any item from the shop, it experiences an amount to be deducted, and the shopkeeper experiences an amount to get added and this is known as the debiting and crediting of the amount. The shopkeeper when purchasing any of the raw material or anything experiences the amount to be debited situation.
The classification of various materials to be debited in the respective incurred cost is attached below.
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On January 1, 2019, Brooks Inc. borrows $90,000 from a bank and signs a 5% installment note requiring four annual payments of $25,381 at the end of each year. Complete the necessary journal entry on 12/31 by selecting the account names from the drop-down menus and entering the dollar amounts in the debit or credit columns.
No Date General Journal Debit Credit
1 12/31 Interest expense 4,500
Notes payable 90,000
Answer:
Brooks Inc.
Journal entries
DATE General Journal DEBIT ($) CREDIT ($)
12/31 Interest Expense 4,500.00
(90,000 x 5%)
Notes Payable (Balancing Figure) 20,881.00
Cash 25,381.00
An individual who is not party to the contract between a CPA and the client, but who is known by both and is intended to receive certain benefits from the contract is known as:
Answer:
Third party beneficiary.
Explanation:
This is easily seen in contracts as it is said that a third party beneficiary is a person that benefits from an agreement between two persons or a contract between two persons. This is despite the fact that this said person has no effect or was not in any way a part of the said contract.
A third party beneficiary can be denied the rights to compensation of the contract, especially when contract is not fulfilled.
Rights which makes the third party beneficiary valid and concretely a part of the contact are been attached and solidified if the said contract comes through.
An investor who was not as astute as he believed invested $264,500 into an account 12 years ago. Today, that account is worth $204,000. What was the annual rate of return on this account
Answer:
-19.061%
Explanation:
interest earned= principal x time x interest rate
Interest earned = $264,500 - $204,000 = $-60,500
$-60,500 = $264,500 x 12 x interest rate
interest rate = -0.19061 = -19.061%
Potential GDP is:
a. minimum amount of output that can be produced given the labor force, capital stock, and technology.
b. maximum amount of output that can be produced given the labor force, capital stock, and technology.
c. varies over the business cycle.
d. none of the above.
Answer:
b. maximum amount of output that can be produced given the labor force, capital stock, and technology.
Explanation:
GDP refers to the gross domestic product which reflects the finalized value of the goods and services produced domestically
On the other side, the potential GDP refers to the maximum level of output that can be produced by considering the labor force, capital stock, technology by taking the constant inflation rate
Therefore option b is correct
The annual payment on a house is $18,000. If payments are made for 40years, how much is the house worth assuming
Answer:
The answer is $2,785,715.38
Explanation:
Annual payment(PMT) is $18,000. This periodic payment is called an annuity.
Number of years(N) for the payment is 40 years
Interest rate is 6%
So how much does the house worth after 40 years?
Using a Financial calculator:
N = 40; I/Y = 6; PMT = 18,000 CPT FV =2,785,715.38
After 40 years, the house will worth $2,785,715.38
A company with a decreasing interest expense would see what change to its times interest earned?
a) An increase
b) A decrease
c) No change
d) Cannot be determined
Answer:
a) An increase
Explanation:
The times interest earned ratio is a ratio that measures the portion of the income or earning that can be used to pay for future interest expenses. Times interest earned ratio is also known as the coverage ratio and it can be computed using the following formula:
Times interest earned ratio = EBIT / Interest expense .............. (1)
Where EBIT denotes earning before interest and tax.
From equation, it can be seen that there is a negative relationship between times interest earned and interest expense. That is, as interest expense increases, times interest earned falls. On the other hand, as interest expense falls, times interest earned increases.
Therefore, the correct option is a) An increase, that is a company with a decreasing interest expense would see an increase to its times interest earned.
Morgan Company issues 10%, 20-year bonds with a par value of $760,000 that pay interest semiannually. The current market rate is 9%. The amount paid to the bondholders for each semiannual interest payment is: Multiple Choice $34,200. $380,000. $38,000. $68,400. $76,000.
Answer:
c. $38,000
Explanation:
Bond is issued at i= 10% = 0.10, n=20, m= 2, p= $760,000
The amount of interest owed to the bondholders for each semiannual interest payment is:
= $760,000 × 0.10 × 6/12
= $760,000 x 0.05
= $38,000
g Ryngard Corp's sales last year were $24,000, and its total assets were $16,000. What was its total assets turnover ratio (TATO).
Answer:
1.50
Explanation:
TATO = (net sales)/(total assets)
= (24000/16000) = 1.50
The total asset turnover ratio (TATO) for Ryngard Corp was 1.50 last year.
Compute the Cost of Goods Manufactured and Cost of Goods Sold for Blue Sea Company for the most recent year using the amounts described next. Assume that Raw Materials Inventory contains only direct materials
(Click the icon to view the data )
Start the calculation for cost of goods manufactured by calculating the direct materials used
Blue Sea Company
Calculation of Direct Materials Used
For Current Year
Beginning raw materials inventory $ 27,000
Plus Purchases of direct materials 79,000
Materials available for use 106,000
Less: Ending raw materials iniventory 31,000
Direct materials used 75.000
Calculate the cost of goods manufactured.
Answer:
Calculate the cost of goods manufactured.
$243,800Explanation:
manufacturing overhead = indirect labor ($46,000) + insurance of plant ($8,000) + depreciation of machines and equipment ($12,700) + repairs and maintenance ($4,100) = $70,800
Beginning raw materials = $27,000
+ Purchases of raw materials = $79,000
- Ending raw materials inventory = -$31,000
= Direct materials used in production = $75,000
+ Direct labor = $83,000
+ Manufacturing overhead = $70,800
= Total manufacturing costs = $228,800
+ Beginning work in process = $43,000
- Ending work in process = -$28,000
= Cost of goods manufactured = $243,800
For financial accounting purposes, what is the total amount of product costs incurred to make 24,500 units
Answer:
The product cost for 24,500 units is $497,350.
Explanation:
The reason is that the the product cost always includes all the variable production cost and specific fixed production cost. In this scenario, direct material cost, direct labor cost, variable manufacturing overhead cost are variable production cost whereas the fixed manufacturing cost is specific fixed production cost which will form part of product cost. The remainder of the cost left is period cost.
Direct materials (24,500 * $7.7 per unit) $188,650
Direct labor (24,500 * $4.7 per unit) $115,150
Variable manufacturing overhead (24,500 * $2.2 per unit) $53,900
Fixed manufacturing overhead (24,500 * $5.7 per unit) $139,650
Total product costs $497,350
Miller Company has the following account balances, extracted from its multiple-step income statement for the current year.
Required:
Compute the missing amounts.
Sales $107,800
Sales Returns and Allowances?
Sales Discounts 3,200 Net Sales ?
Cost of Goods Sold 48,200 Gross Profit 51,900 Selling Expenses?
General and Administrative Expenses 10,400 Total Operating Expenses 18,200 Net Income ?
Answer:
Net Sales = $100,100
Sales Return and allowances = $4,500
Net income = $33,700
Explanation:
Cost of goods sold 48,200
Gross Profit 51,900
Net Sales 100100
Sales Return and allowances = Sales - Net sales- Sales discounts = 107800-100100-3200 = 4500
Selling Expenses = Total operating expenses - General and Administrative Expenses = 18200 - 10400 = 7800
Net income = Gross profit - Total operating expenses
=51900-18200
= 33700
According to the classification system for global organizational culture as developed by Hofstede, the degree to which employees are threatened by ambiguity is known as:
Answer:
Uncertainty Avoidance
Explanation:
The term uncertainty avoidance was coined by a man named, Geert Hofstede to explain the extent to which people are willing to remain in a given situation so as to avoid uncomfortable circumstances. It reflects the extent to which people are unwilling to take risks. A low uncertainty avoidance index simply means that the people who have just been studied are willing to accommodate ambiguity and take risks. A high uncertainty avoidance on the other hand means that the people are more comfortable in their given positions and are unwilling to take risks.
So, in the employee situation, the degree to which employees are threatened by ambiguity is known as uncertainty avoidance.
In cell K2 enter a formula using the IF and OR functions, as well as structured references to determine if Alison Simoneau can be a supervisor
A. Tbe IF function should first determine if the staff member's Service Years is greater than 5 OR if the staff member's college graduate status is "Yes". Remember to use a structured reference to the Service Years and the College Graduate columns.
B. The function should return the text Yes if a staff member meets one or both of those criteria.
C. The function should return the text No if a staff member meets neither of those criteria. tsor and have conlelea Academic Technology training.
Answer:
Enter the following formula in a cell K2:
=IF(OR([at[College Graduate]]="Yes",[at[Service Years]]>5),"Yes","No")
Please replace "at" in the formula with its symbol.
Explanation:
The formula has an IF function which checks a condition.
There are two conditions here to be checked:
A) if the staff member's Service Years is greater than 5.
B) if the staff member's college graduate status is "Yes".
According to the given criteria this IF function should return Yes if a staff member meets one OR both of the above mentioned criteria. Otherwise the function should return No.
This means if any one of the criteria evaluates to true then the text Yes is returned. For example if staff member's Service Years is greater than 5, then function returns Yes. For instance if staff member is a college graduate which means that his college graduate status is "Yes", then the function returns Yes.
The function still returns if either of the two criteria is true. For instance if staff member's Service Years is less than 5 but staff member's college graduate status is "Yes" then the function returns Yes.
However if neither the staff member's Service Years is greater than 5 nor the staff member's college graduate status is "Yes" then the function returns No.
So we use OR function here which with IF function so that the IF function returns true if either of the two criteria is met, otherwise returns false. This takes the form:
IF(OR(Argument 1 is True, Argument 2 is True), YES if True, NO if False)
Also there is at symbol used in the formula. Square brackets are used for structured references. They make clear and easier to reference. Structure reference is used if we want to use a table name in a formula such that we used in this IF OR formula, instead of a normal cell reference. "at" is used to refer only the mentioned/current rows or cells in the table. If you do not use this at then all the columns will be selected. For example [at[Service Years]]>5 is a reference to the cell in the Service Years at the current row. But [[Service Year]] is a reference to the entire column. So only those cells are checked where the Service Year is greater than 5.
Please replace the at word in the formula with its symbol.
Exhibit 15.1 Zorn Corporation is deciding whether to pursue a restricted or relaxed working capital investment policy. The firm's annual sales are expected to total $4,400,000, its fixed assets turnover ratio equals 4.0, and its debt and common equity are each 50% of total assets. EBIT is $150,000, the interest rate on the firm's debt is 10%, and the tax rate is 40%. If the company follows a restricted policy, its total assets turnover will be 2.5. Under a relaxed policy its total assets turnover will be 2.2. Refer to Exhibit 15.1. Assume now that the company believes that if it adopts a restricted policy, its sales will fall by 15% and EBIT will fall by 10%, but its total assets turnover, debt ratio, interest rate, and tax rate will all remain the same. In this situation, what's the difference between the projected ROEs under the restricted and relaxed policies
Answer:
difference between ROEs = 10.83% (restricted) - 9% (relaxed) = 1.83%
Explanation:
total annual sales = $4,400,000
EBIT = $150,000
net income = $150,000 x (1 - 40%) = $90,000
restricted policy:
asset turnover = 2.5
sales = $3,740,000
EBIT = $135,000
net income = $81,000
assets = $3,740,000 / 2.5 = $1,496,000
equity = $1,496,000 x 50% = $748,000
ROE = $81,000 / $748,000 = 10.83%
relaxed policy:
asset turnover = 2.2
sales = $4,400,000
EBIT = $150,000
net income = $90,000
assets = $4,400,000 / 2.2 = $2,000,000
equity = $2,000,000 x 50% = $1,000,000
ROE = $90,000 / $1,000,000 = 9%
difference between ROEs = 10.83% - 9% = 1.83%
The annual interest rate on a credit card is 14.99%. If the minimum payment of $30 is made each month, how many months will it take to pay off an unpaid balance of $807.91?
Answer:
30.967 months
Explanation:
We can assume the number of months in which the credit card will be paid off to be x.
Since we are given that the unpaid balance on the credit card is $807.91 with annual interest of 14.99%
We can therefore calculate the amount of interest to be = 14.99/100 × $807.91
= $121.11
Then the total amount to be paid is
= $807.91 + $121.1
= $929.01
Also, since the minimum payment is $30 per month, x would therefore be;
= 929.01/30
= 30.967
It therefore means that the balance in the credit card will be paid off in 30.967 months.
20.Assume that you just graduate and get a job. You will work for 40 years and save each year before you retire. During retirement you plan to receive a pension annuity of $100,000 each year for another 40 years. How much money will you need to have at the moment you retire? How much money do you need to save every year before retirement? Assume the interest rate is always 8%. Before retirement, you deposit your saving at the end of each year. During retirement, you receive the annuity at the beginning of each year
Answer:
How much money will you need to have at the moment you retire?
$1,287,858How much money do you need to save every year before retirement?
$4,971.33Explanation:
we have to first determine the amount of money you need to finance your retirement distributions:
using the annuity due present value formula, PV = annuity payment x annuity due factor (PV, 8%, n = 40)
PV = $100,000 x 12.87858 = $1,287,858
now we must use the ordinary annuity future value formula, FV = annuity payment x annuity factor (FV, 8%, n = 40)
annuity payment = FV / annuity factor = $1,287,858 / 259.057 = $4,971.33
An action for breach of warranty generally must be brought within four years of the breach.
a. True
b. False
Answer:
i The answer is going to be a. true
Fasheh Corporation's relevant range of activity is 7,000 units to 11,000 units. When it produces and sells 9,000 units, its average costs per unit are as follows: Average Cost per Unit Direct materials $ 5.50 Direct labor $ 3.90 Variable manufacturing overhead $ 1.30 Fixed manufacturing overhead $ 13.50 Fixed selling expense $ 2.25 Fixed administrative expense $ 1.80 Sales commissions $ 0.50 Variable administrative expense $ 0.45 If 10,000 units are produced, the total amount of manufacturing overhead cost is closest to:
Answer:
$134,500
Explanation:
Total manufacturing overhead = Variable overhead + Fixed overhead
Variable overhead= $1.3 * 10,000 units= $13000
Fixed overhead = $13.50 * 9000 units = $121,500
Total manufacturing overhead= $13,000+$121,500
= $134,500
Pace corporation acquired 100 percent of spin company's common stock on January 1, 20X9. Balance sheet data for the two companies immediately following the acquisition follow:
Item Pace Corporation Spin Company
Cash $30,000 $25,000
Accounts Receivable 80,000 40,000
Inventory 150,000 55,000
Land 65,000 40,000
Buildings and Equipment 260,000 160,000
Less: Accumulated Depreciation (120,000) (50,000)
Investment in Spin Company Stock 150,000
Total Assets $615,000 $270,000
Accounts Payable $45,000 $33,000
Taxes Payable 20,000 8,000
Bonds Payable 200,000 100,000
Common Stock 50,000 20,000
Retained Earnings 300,000 109,000
Total Liabilities and Stockholders’ Equity $615,000 $270,000
At the date of the business combination, the book values of Spin's net assets and liabilities approximated fair value except for inventory, which had a fair value of $60,000, and land, which had a fair value of $50,000. The fair value of land for Pace Corporation was estimated at $80,000 immediately prior to the acquisition.
1. Based on the preceding information, at what amount should total land be reported in the consolidated balance sheet prepared immediately after the business combination?
a. $130,000
b. $105,000
c. $115,000
d. $120,000
2. Based on the preceding information, what amount of total assets will appear in the consolidated balance sheet prepared immediately after the business combination?
a. $756,000
b. $735,000
c. $750,000
d. $642,000
3. Based on the preceding information, what is the differential associated with the acquisition?
a. $15,000
b. $21,000
c. $6,000
d. $10,000
4. Based on the preceding information, what amount of goodwill will be reported in the consolidated balance sheet prepared immediately after the business combination?
a. $0
b. $21,000
c. $6,000
d. $15,000
5. Based on the preceding information, what amount of liabilities will be reported in the consolidated balance sheet prepared immediately after the business combination?
a. $615,000
b. $406,000
c. $300,000
d. $265,000
Answer:
Pace Corporation and Spin Company
1. Land should be reported in the consolidated balance sheet as
a. $130,000
2. Total assets:
b. $735,000
3. The differential associated with the acquisition:
b. $21,000
4. Goodwill
b. $21,000
5. Amount of liabilities in the consolidated balance sheet:
b. $406,000
Explanation:
a) Data:
Item Pace Spin
Corporation Company
Cash $30,000 $25,000
Accounts Receivable 80,000 40,000
Inventory 150,000 55,000
Land 65,000 40,000
Buildings and Equipment 260,000 160,000
Less: Accumulated Depreciation (120,000) (50,000)
Investment: Spin Company Stock 150,000
Total Assets $615,000 $270,000
Accounts Payable $45,000 $33,000
Taxes Payable 20,000 8,000
Bonds Payable 200,000 100,000
Common Stock 50,000 20,000
Retained Earnings 300,000 109,000
Total Liabilities and Stockholders’
Equity $615,000 $270,000
b) Consolidated Balance Sheets
Item Pace Spin Total
Corporation Company Group
Cash $30,000 $25,000 $55,000
Accounts Receivable 80,000 40,000 120,000
Inventory 150,000 60,000 210,000
Land 80,000 50,000 130,000
Buildings and Equipment 260,000 160,000 420,000
Less: Accumulated
Depreciation (120,000) (50,000) (170,000)
Investment:
Spin Company Stock 150,000 0
Goodwill 21,000
Total Assets $630,000 $285,000 $786,000
Accounts Payable $45,000 $33,000 $78,000
Taxes Payable 20,000 8,000 28,000
Bonds Payable 200,000 100,000 300,000
Common Stock 50,000 20,000 50,000
Retained Earnings 300,000 109,000 300,000
Assets Revaluation 15,000 15,000 30,000
Total Liabilities and Stockholders’
Equity $630,000 $285,000 $786,000
c) Differential on acquisition = investment (of subsidiary) - net assets
= $150,000 - ($270,000 - 141,000) = $21,000
On February 1, a customer's account balance of $2,700 was deemed to be uncollectible. What entry should be recorded on February 1 to record the write-off assuming the company uses the allowance method? Multiple Choice Debit Bad Debts Expense $2,700; credit Accounts Receivable $2,700. Debit Bad Debts Expense $2,700; credit Allowance for Doubtful Accounts $2,700. Debit Accounts Receivable $2,700; credit Allowance for Doubtful Accounts $2,700. Debit Allowance for Doubtful Accounts $2,700; credit Accounts Receivable $2,700. Debit Allowance for Doubtful Accounts $2,700; credit Bad Debts Expense $2,700.
Answer:
On February 1, a customer's account balance of $2,700 was deemed to be uncollectible.
The entry to be recorded on February 1 to record the write-off assuming the company uses the allowance method is:
Debit Allowance for Doubtful Accounts $2,700; credit Accounts Receivable $2,700.
Explanation:
Using the allowance method, every bad debt entry is first reflected in the Allowance for Doubtful Accounts before it is taken to the bad debt expense account.
The entries above reduce the Accounts Receivable account by the amount of the write-off and reduces the Allowance for Doubtful Accounts by the same amount. Any recovery of written off debt is also treated in the Allowance for Doubtful Accounts and the Accounts Receivable account in revised order. This method is unlike the direct write-off method. With the direct write-off method, the Accounts Receivable is credited with the amount of the write-off and the write-off is expensed in the Bad Debts Expense account directly.