Answer:
In Year 2 Preferred Stockholders were paid $6,000 , whilst Common Stockholders were paid $0.
Explanation:
The Preference Shareholders have preference over the Common Stockholders when it comes to payments of dividends.
Also when the Preference Stocks are cumulative, it means that any dividends in arrears need to be honored before the next dividend distribution.
Preference Stock Dividend is the same per year and is calculated as follows :
Preference Stock Dividend = 7,000 × $10 × 5%
= $3,500
Summary of Dividends Paid are as follows :
Year 1
Preference Stock Dividend Paid = $0
Common Stock Dividend Paid = $0
Preference Stock Dividend in Arrears = $3,500
Year 2
Preference Stock Dividend in Arrears for year 1 paid = $3,500
Preference Stock Dividend Paid for year 2 = $ 2,500
Preference Stock Dividend in Arrears = $1,000
Common Stock Dividend Paid = $0
Conclusion :
In Year 2 Preferred Stockholders were paid $6,000 whilst Common Stockholders were paid nothing.
If a firm raises capital by selling new bonds, it could be called the "issuing firm," and the coupon rate is generally set equal to the required rate on bonds of equal risk.
1. True
2. False
Answer: True
Explanation:
An issuing firm is an organization which registers, and then sells security like bonds and stocks on the primary market.
It should be noted that when a firm raises capital through the sale of new bonds, they can be also referred to a the issuing firm, and the coupon rate is usually set to be equal to the required rate on bonds of equal risk.
Which of the following entries would be made to record $20,800 of labor-80% of which is direct, and 20% of which is indirect-to jobs?
A. Work in Process Inventory 20,800
Wages Payable 20,800
B. Manufacturing Overhead 20,800
Manufacturing Wages 20,800
C. Work in Process Inventory 16,640
Manufacturing Overhead 4,160
Wages Payable 20,800
D. Wages Payable 20,800
16,640
WIP Inventory
Manufacturing Inventory 4,160
Answer:
Option C
Explanation:
Entry: DEBIT CREDIT
Work in Process Inventory 16,640
Manufacturing Overhead(w) 4,160
Wages Payable 20,800
Working: Manufacturing Overhead = 20,800 x 40% = $4,160
Note: In order to find out the work in progress and manufacturing Overhead we will consider sum of all direct cost as Work in progress and allocate the sum of indirect to Manufacturing Overheads.
Ansara Company had the following abbreviated income statement for the year ended December 31, 20Y2:
(in millions)
Sales $25,790
Cost of goods sold $21,920
Selling, administrative, and other expenses 2,320
Total expenses $24,240
Income from operations $1,550
Assume that there were $5,620 million fixed manufacturing costs and $1,280 million fixed selling, administrative, and other costs for the year. The finished goods inventories at the beginning and end of the year from the balance sheet were as follows:
January 1 $3,060 million
December 31 $3,570 million
Assume that 20% of the beginning and ending inventory consists of fixed costs. Assume work in process and materials inventory were unchanged during the period.
Prepare an income statement according to the variable costing concept for Ansara Company for 20Y2.
Ansara Company
Variable Costing Income Statement
For the Year Ended December 31, 20Y2 (in millions)
Sales $ 21,920
Variable cost of goods sold:
Beginning inventory $ 1,841
Variable cost of goods manufactured 12,710
Ending inventory 2,149
Total variable cost of goods sold 18,670
Manufacturing margin $ 3,250
Variable selling and administrative expenses 870
Contribution margin $ 2,380
Fixed costs:
Fixed manufacturing costs $ 4,820
Fixed selling and administrative expenses 1,100
Total fixed costs 5,920
Income from operations $
Answer:
Ansara Company
Variable Costing Income Statement
For the Year Ended December 31, 20Y2 (in millions)
Sales $25,790
Variable cost of goods sold:
Beginning inventory ($3,060 × 80%) $2,448
Variable cost of goods manufactured ($21,920 × 80%) $17,536
Ending inventory ($3,570 × 80%) ($2,856)
Total variable cost of goods sold ($17,128 )
Contribution margin $ 8,662
Less (Period) Expenses :
Fixed manufacturing costs ($5,620)
Selling and administrative expenses :
Fixed selling and administrative expenses ($1,280)
Variable selling and administrative expenses ($1,040)
Income from operations $772
Explanation:
Variable Costing :
Product Cost = Only Variable Manufacturing Cost
= This is 80% of Cost of Goods Sold from our senario.
Period Cost = Fixed Manufacturing Costs + All Non - Manufacturing Cost (Variable and Fixed)
Note : Variable selling and administrative expenses is what remains after fixed selling, administrative, and other costs are removed from the total of selling, administrative, and other costs.
To retain high-performing engineers, a large semiconductor company provides corporate stock as part of the compensation package. In one particular year, the company offered 1000 shares of either class A or class B stock. The class A stock was selling for $30 per share at the time, and stock market analysts predicted that it would increase at a rate of 6% per year for the next 5 years. The class B stock was selling for $20 per share, but its price was expected to increase by 12% per year. At an interest rate of 8% per year, which stock should the engineers select on the basis of present worth analysis and a 5-year planning horizon?
Answer:
class A stocks
Explanation:
in 5 years, class A stock will be worth = $30 x (1 + 6%)⁵ = $40.15
in 5 years, class B stock will be worth = $20 x (1 + 12%)⁵ = $35.25
now we need to determine the present value if each stock:
class A stock present value = $40.15 / (1 + 8%)⁵ = $27.33
class B stock present value = $35.25 / (1 + 8%)⁵ = $23.99
since the present value of class A stock is higher, then the engineers should select that type of stocks.
A 20-year, $1,000 par value bond has a 6.5% annual payment coupon. The bond currently sells for $950. If the yield to maturity remains at its current rate, what will the price be 5 years from now
Answer:
Explanation:
First we need the calculate the YTM
Use following Following formula
Price of the bond = C x ( 1 - ( 1 + r )^-n / r + F / ( 1 + r )
Where
C = Coupoon Payment = $1,000 x 6.5% = $65
n = numbers of periods = 20
F =Face value = $1,000
Priec of the bond = $950
r = YTM = ?
Placing values in the formula
$950 = $65 x ( 1 - ( 1 + r )^-20 / r + $1,000 / ( 1 + r )
r = 6.971%
Now calculte the price after 5 years
n = numbers of periods = 20 - 5 = 15 years
r = Yield to maturity = 6.971%
Placing values in the formula
Price of the bond = $65 x ( 1 - ( 1 + 6.971% )^-15 / 6.971% + $1,000 / ( 1 + 6.971% )
Price of the bond = $957.02
Suppose the economy was experiencing a negative real shock and high unemployment and high inflation at the same time. Furthermore suppose the Federal Reserve decided to address the problem by decreasing the money supply money. Assuming the policy is effective what can we expect to occur as a result (in the short run)
Answer: b. We should expect less inflation but more unemployment
Explanation:
A high supply of money leads to higher inflation. This is because the citizens will have more money to spend on goods and services and so will demand more of them. As a result, the increased demand pulls prices upward. Reducing the money supply therefore will have the effect of reducing the amount of money that people have on hand. This will reduce their demand for goods and services which will then see their prices decrease as a result.
High money supply in the market however means that loans are easier to get because there is more money to give. This means that companies can embark on more projects. With a lower money supply, companies as well as individuals will reduce their borrowing. This will mean less capital projects which create employment. Lowering the money supply will therefore lead to higher unemployment.
You purchased a bond 69 days ago for $891.26. You received an interest payment of $24.00 56 days ago. Today the bond’s price is $884.89. What is the holding period return (HPR) on the bond as of today?
Answer:
1.97%
Explanation:
The formula to calculate the holding period return is:
HPR=(Income generated+(ending value-initial value)/Initial value)*100
Income generated= $24
Ending value= $884.89
Initial value= $891.26
HPR=(24+(884.89-891.26)/891.26)*100
HPR=(24+(-6.37)/891.26)*100
HPR=(17.63/891.26)*100
HPR=0.0197*100
HPR= 1.97%
According to this, the holding period return (HPR) on the bond as of today is 1.97%.
During lunch time, customers arrive at a postal office at a rate of lambda equals 36 per hour. The interarrival time of the arrival process can be approximated with an exponential distribution. Customers can be served by the postal office at a rate of mu equals 45 per hour. The service time for the customers can also be approximated with an exponential distribution. For each of the following questions, show your work and use the right notation. Determine the utilization factor.
a. po = 4/5
b. po = 5/4
c. po = 1/5
d. po = 1/9
e. none of these
Answer:
a. po = 4/5
Explanation:
Customer arrives at the rate of λ equal 36 per hour
Customers can be served by the postal office at a rate of μ equals 45 per hour
λ = 36 / hour
μ = 45 / hour
P = λ / μ
P= 36 / 45
P= 4/5
Thus, the utilization factor is 4/5
The relationship between financial leverage and profitability Pelican Paper, Inc., and Timberland Forest, Inc., are rivals in the manufacture of craft papers. Some financial statement values for each company follow. Use them in a ratio analysis that compares the firms' financial leverage and profitability.
Items Pelican Paper, INC Timberland Forest, INC
Total assets $10,000,000 $10,000,000
Total equity 9,000,000 5,000,000
Total Debt 1,000,000 5,000,000
Annual Interest 100,000 500,000
Total Sales 25,000,000 25,000,000
EBIT 6,250,000 6,250,000
Earnings available for
common stockholders
3,690,000 3,450,000
A) Calculate the following debt and coverage ratios for the two companies. Discuss their financial risk and ability to cover the costs in relation to each other.
1. debt ratio
2. times interest earned ratio
B) Calculate the following profitability ratios for the two companies. Disuss their profitability relative to one another.
1. Operating profit margin
2. Net profit margin
3. Return on total assets
4. Return on common equity
C) In what way has the larger debt of Timberland Forest made it more profitable than Pelican Paper? What are the risks that Timberland's inestors undertake when they choose to purchase its stock instead of Pelicans?
Answer:
Pelican Paper, Inc., and Timberland Forest, Inc.
Financial leverage and profitability Ratio Analysis
A. Computation of debt and coverage ratios:
1. debt ratio = Total debt to Total assets x 100
Pelican = $1,000,000/$10,000,000 x 100
= 10%
Timberland =v$5,000,000/$10,000,000 x 100
= 50%
2. times interest earned ratio = EBIT/Interests
Pelican = $6,250,000/$100,000
= 62.5 times
Timberland = $6,250,000/$500,000
= 12.5 times
A discussion of their financial risk and ability to cover the costs:
Pelican Paper's financial leverage is 10% compared to Timberland's 50%, showing that debt creditors finance and lay claim to half of the company's assets. This is very high and not attractive to potential investors and creditors. Timberland has already hampered its ability to borrow more as it is highly leveraged. Whereas Pelican Paper can meet its debt obligations and pay its interest expenses 62.5 times from current earnings, these pale in comparison with Timberland's 12.5 times, further jeopardizing its opportunities for more debt financing.
B. Calculation of the profitability ratios:
1. Operating profit margin = EBIT/Sales x 100
Pelican Paper = $6,250,000/$25,000,000 x 100 = 25%
Timberland = $6,250,000/$25,000,000 x 100 = 25%
2. Net profit margin = (EBIT less Interest)/Sales x 100
Pelican Paper = ($6,250,000 - $100,000)/$25,000,000 x 100
= $6,150,000/$25,000,000 x 100 = 24.6%
Timberland = ($6,250,000 - $500,000)/$25,000,000 x 100
= $5,750,000/$25,000,000 x 100 = 23%
3. Return on total assets = EBIT/Total Assets x 100
Pelican Paper = $6,250,000/$10,000,000 x 100
= 62.5%
Timberland = $6,250,000/$10,000,000 x 100
= 62.5%
4. Return on common equity = Earnings available to Common Stockholders/Equity x 100
Pelican = $3,690,000/$9,000,000 x 100
= 41%
Timberland = $3,450,000/$5,000,000 x 100
= 69%
A discussion of their profitability relative to one another:
The two companies make the same level of operating profit margin at 25%, but Pelican's net profit margin of 24.6% is better than Timberland's 23%. They show that Pelican's management has better ability to control expenses than Timberland's.
The returns on assets are similar for both companies, but Timberland performed better than Pelican Paper in terms of the return on equity. This shows that Timberland with ROE of 69% is making larger returns for its common stockholders than Pelican because it is leveraging debts, whose interests are tax-deductible, and also using less equity in generating the returns.
C. The larger debt of Timberland has made it more profitable than Pelican Paper because the debt interests are deductible from EBIT before tax expense is computed and it reduces the tax burden for the company, thus making it to pay less tax and saving more profits for distribution to its stockholders.
However, this higher return to the investors in Timberland also comes with higher risks, as the investors are exposed to debt risks, higher pressure to satisfy debt creditors, heightened interference and oversight from creditors since they own half of the assets of the company, and an increased threat of business takeover in case of debt default.
Explanation:
a) Data:
Items Pelican Paper, INC Timberland Forest, INC
Total assets $10,000,000 $10,000,000
Total equity 9,000,000 5,000,000
Total Debt 1,000,000 5,000,000
Annual Interest 100,000 500,000
Total Sales 25,000,000 25,000,000
EBIT 6,250,000 6,250,000
Earnings available for common
stockholders 3,690,000 3,450,000
b) Ratio computation and analysis help companies to compare their performances and positions with competitors. They can spot risks facing a company and even point out ways to address such business risks.
Babcock Company received the following reports of its defined benefit pension plan for the current calendar year: PBO Plan assets Balance, January 1 $ 650,000 Balance, January 1 $ 530,000 Service cost 369,000 Actual return 51,000 Interest cost 74,000 Annual contribution 226,000 Benefits paid (97,000 ) Benefits paid (97,000 ) Balance, December 31 $ 996,000 Balance, December 31 $ 710,000 The long-term expected rate of return on plan assets is 8%. Assuming no other data are relevant, what is the pension expense for the year
Answer:
The pension expense for the year is $400600
Explanation:
From the question; we have:
Babcock Company received the following reports of its defined benefit pension plan for the current calendar year:
PBO Plan assets
Balance, January 1 650,000 Balance, January 1 530,000
Service cost 369,00 Actual return 51,000
Interest cost 74,000 Annual contribution 226,000
Benefits paid (97,000 ) Benefits paid (97,000 )
Balance,December 31 $996,000 Balance, December 31 $710,000
The long-term expected rate of return on plan assets is 8%. Assuming no other data are relevant, what is the pension expense for the year
From the information given;we have the plan assets to be $530000
the expected rate of return on plan assets = 8%
therefore
expected return on the plan assets = 8% × $530000
expected return on the plan assets = 0.08 × $530000
expected return on the plan assets = $42400
The pension expense for the year can be determined by the formula:
pension expense = service cost + interest cost - expected return on plan
assets.
pension expense = $(369000 + 74000 -42400)
pension expense = $(443000 - 42400)
pension expense = $400600
BPO Services is in the business of digitizing information from forms that are filled out by hand. In 2006, a big client gave BPO a distribution of the forms that it digitized in house last year, and BPO estimated how much it would cost to digitize each form. Form Type Mix of Forms Form Cost A 0.5 $3.75 B 0.5 $1.25 The expected cost of digitizing a form is $ . Suppose the client and BPO agree to a deal, whereby the client pays BPO to digitize forms. The price of each form processed is equal to the expected cost of the form that you calculated in the previous part of the problem. Suppose that after the agreement, the client sends only forms of type A. The expected digitization cost per form of the forms sent by the client is $ . This leads to an expected loss of $ per form for BPO. (Hint: Do not round your answers. Enter the loss as a positive number.)
Answer:
BPO Servicesa. The expected cost of digitizing a form is $2.50
b. The expected digitization cost per form of the forms sent by the client is $3.75, without a mix of forms.
c. This leads to an expected loss of $1.25 per form for BPO.
Explanation:
1. Data:
Form Type Mix of Forms Form Cost
A 0.5 $3.75
B 0.5 $1.25
b. Calculation of Expected Cost of digitizing a form:
Form Type Mix of Forms Form Cost Expected Cost
A 0.5 $3.75 $1.875 (0.5 * $3.75)
B 0.5 $1.25 $0.625 (0.5 * $1.25)
Total expected costs $2.50
c. Calculation of Expected cost of Form actually sent by Client without a mix of forms:
A 01 $3.75 $3.75 (1 * $3.75)
Total expected costs $3.75
d. Calculation of Expected Loss:
Expected Price = $2.50
Expected cost = $3.75
Expected loss = $1.25
e. The expected value (cost, price, or gain or loss) from the form digitization is the sum of all possible values from the mix of forms, each multiplied by the probability of its occurrence.
Recently, the Boeing Commercial Airline Group (BCAG) recorded orders for more than 15,000 jetliners and delivered more than 13,000 airplanes. To maintain is output volume, this Boeing division combines efforts of capital and more than 90,000 workers. Suppose the European company, Airbus, enjoys a similar production technology and produces a similar number of air craft, but that labor costs (including fringe benefits) are higher in Europe than in the United states. Would you expect workers at Airbus to have the same marginal product as workers at Boeing? Explain carefully.
Answer: Airbus Employees have a Higher Marginal Product than Boeing
Explanation:
Marginal Product of Labor refers to the extra unit produced by adding an extra unit of labor. For firms to maximise their profits, they produce at a mix of labor and Capital where [tex]\frac{MPK}{r} = \frac{MPL}{w}[/tex] with MPK being Marginal Product of capital and r being cost of capital and w being cost of labor.
Assuming both Boeing and Airbus are producing at the maximising expression. It is said that Airbus has the same [tex]\frac{MPK}{r}[/tex] as Boeing. They however has a higher w than Boeing which means that for it to equal the Capital side of the expression, the w must be dividing a higher Marginal Product of labor which shows that Airbus has a higher Marginal Product of labor.
For example,
Boeing MPK = 12
Boeing r = 4
Boeing MPL = 9
Boeing w = 3
Maximising level = 3
Airbus MPK = 12
Airbus r = 4
Airbus w = 6
Airbus MPL = ??
With a labor cost of 6, Airbus MPL will have to be 18 to be able to get to the equilibrium maximising level of 3.
Which of the following is a characteristic of a firm’s optimal dividend policy? It maximizes the firm’s stock price. It maximizes the firm’s return on equity. It maximizes the firm’s earnings per share. It maximizes the firm’s total assets.
Answer:
It maximizes the firm’s stock price.
Explanation:
The correct answer is “it maximizes the firm’s stock price” because the optimal dividend policy allows the variable risk parameters and it maximizes the firm’s value. Moreover, the dividend policy attracts the shareholders and it maintains the firm’s or the company’s worth in the market. Therefore, the optimal payment of dividend increases or maximizes the stock price.
Giannitti Corporation bases its predetermined overhead rate on the estimated machine-hours for the upcoming year. Data for the upcoming year appear below: Estimated machine-hours 72,700 Estimated variable manufacturing overhead $ 3.30 per machine-hour Estimated total fixed manufacturing overhead $ 838,730 The predetermined overhead rate for the recently completed year was closest to:
Answer:
The predetermined overhead rate for the recently completed year was closest to: $11.54 per machine-hour
Explanation:
Predetermined Overheads = Budgeted Fixed Overheads / Budgeted Activity
= $ 838,730 / 72,700
= $11.536864 or $11.54 per machine-hour.
The holder of a promotional permit may:
Provide alcohol to a minor
Serve an intoxicated person
Offer in-store wine and beer samples
Sell alcohol to members in a private club
Answer:
Offer in-store wine and beer samples.
Explanation:
Promotional permit was established to allow a person promote sale of alcoholic beverages on behalf of the manufacturer. Such alcoholic beverage must however be sold on the premises of the licenced holder.
A promotional permit holder, according to the Texas Alcoholic Beverage Commission,which was established in 1935, may involve in the sales of alcoholic beverages in a state or premises of the license holder. It is to be noted that the license holder must qualify enough before being granted the permit and must also pay some fees before carrying on such activities.
As a holder of a promotional permit, you are allowed to offer in-store wine and beer samples.
A person with a promotional permit:
Is allowed to promote the sale of a certain brand of alcohol Must be in a contract with the brand they are promotingIn order to promote the brand of alcohol, the person may use sales strategies such as offering in-store wine and beer samples to people to get them to try out the brand that they are promoting.
In conclusion, a holder of a promotional permit can offer in-store wine and beer samples.
Find out more at https://brainly.com/question/5796198.
Peyton sells an office building and the associated land on May 1 of the current year. Under the terms of the sales contract, Peyton is to receive $1,763,800 in cash. The purchaser is to assume Peyton's mortgage of $1,058,280 on the property. To enable the purchaser to obtain adequate financing, Peyton is to pay the $105,828 in points charged by the lender. The broker's commission on the sale is $70,552. What is Peyton's amount realized? The amount realized by Peyton is $ .
Answer:
$2,645,700
Explanation:
realized amount = cash received + assumed mortgage - points paid by seller - broker's commission = $1,763,800 + $1,058,280 - $105,828 - $70,552 = $2,645,700
The amount realized includes all the money received and any debts assumed by the buyer, minus any expenses paid by the seller that are related to the transaction.
"A technical analyst has identified a resistance level for ABC stock at $81 and a support level at $75. The stock is currently trading at $77 and the analyst expects the stock to break the resistance level. Which order is appropriate to profit if the resistance level is broken?"
Answer:
Buy 100 ABC at $82 Stop
Explanation:
In the financial markets a resistance is an upper limit block on the market moving upward (buy). While the support is the lower limit on the market moving down (sell).
In this scenario we have a support of $75, resistance of $81 and the stock.is currently trading at $77. Just below the resistance.
If the analyst expects the stock to break the resistance of $81 then he should set a trade that is a buy since the market will go above $81.
When the market breaks a resistance it is expected to sky rocket, so the analyst will set a trade stop at $82, so that when the market is coming back down to the resistance level it will stop before it gets to $81.
On the other hand if a support is expected to be broken a sell trade is placed.
If a company produces the same number of units per period over an asset's useful life, each period's depreciation expense using the straight-line method will be the same as that recorded using the units-of-production method.
A. True
B. False
Answer:
The answer is true.
Explanation:
Straight-line method of depreciation spreads the depreciation cost evenly over the life of the asset. The amount of depreciation is the same year in year out. It can be calculated as follows:
(Cost of the asset - residual value) ÷ number of useful life of the asset.
While units-of-production method is almost the same as the straight-line method. It is calculated as:
(Cost of the asset - residual value) ÷ expected number of units of production throughout the useful life of the asset.
Since the number of units of production will be same throughout the life span of the asset, the depreciation expense will also be the same
Jacobsen Corporation prepares its financial statements applying U.S. GAAP. During its 2016 fiscal year, the company reported before-tax income of $621,000. This amount does not include the following two items, both of which are considered to be material in amount: Unusual gain $201,000 Loss on discontinued operations (301,000) The company's income tax rate is 30%. In its 2016 income statement, Jacobsen would report income from continuing operations of:
Answer:
Jacobsen Corporation
Income from continuing operations of $621,000 will be reported.
Explanation:
The income from continuing operations is the same thing as the operating income. It is the pre-tax income that is reported on Jacobsen Corporation's income statement for the year ended December 31, 2016. The tax rate of 30% is applied on this figure to obtain the income tax expense for the year. But, for Jacobsen that has other unusual items, these are taken into consideration before the income tax is imputed to obtain the after-tax income.
New Era Cleaning Service, Inc. opened for business on July 1, 2010. During the month of July, the following transactions occurred:
July 1: Issued $18,000 of common stock for $18,000 cash.
July 1: Purchased a truck for $11,000. Paid $4,000 in cash and borrowed the remainder (long term) from the bank.
July 3: Purchased cleaning supplies for $900 on account.
July 5: Paid $1,800 on a one-year insurance policy, effective July 1.
July 12: Billed customers $4,800 for cleaning services.
July 18: Paid $1,500 of the amount owed on the truck.
July 18: Paid $500 of the amount owed on cleaning services.
July 20: Paid $1,700 for employee salaries.
July 21: Collected $1,200 from customers billed on July 12.
July 25: Billed customers $1,900 for cleaning services.
July 31: Paid gas and oil for the month on the truck, $500.
July 31: Paid a $800 dividend.
Please complete the following tasks: Post the July transactions to the general journal and the general ledger "T" account
repare an unadjusted trial balance; Post the following adjustments:
(a) Earned but unbilled fees at July 31 were $1,400
(b) Depreciation for the month was $200
(c ) One-twelfth of the insurance expired
(d) An inventory count showed $300 of cleaning supplies remaining on July 31
Answer:
New Era Cleaning Service, Inc.
a) General Journal:
July 1:
Debit Cash Account $18,000
Credit Common Stock $18,000
To record the issue of common stock for cash.
July 1:
Debit Truck $11,000
Credit Cash $4,000
Credit Bank Loan $7,000
To record the purchase of a truck.
July 3:
Debit Supplies $900
Credit Accounts Payable $900
To record the purchase of cleaning supplies on account.
July 5:
Debit Prepaid Insurance $1,800
Credit Cash Account $1,800
To record the payment of insurance for a year.
July 12:
Debit Accounts Receivable $4,800
Credit Service Revenue $4,800
To record services rendered on account.
July 18:
Debit Bank Loan $1,500
Credit Cash Account $1,500
To record payment on bank loan.
July 18:
Debit Accounts Payable $500
Credit Cash Account $500
To record payment on account.
July 20:
Debit Salaries $1,700
Credit Cash Account $1,700
To record payment of salaries.
July 21:
Debit Cash Account $1,200
Credit Accounts Receivable $1,200
To record receipt of cash on account.
July 25:
Debit Accounts Receivable $1,900
Credit Service Revenue $1,900
To record services rendered on account.
July 31:
Debit Automobile Fuel $500
Credit Cash Account $500
To record payment for gas and oil for the month.
July 31:
Debit Dividends $800
Credit Cash Account $800
To record payment for dividends.
b) General Ledger "T-account":
Cash Account
July 1 Common Stock $18,000 July 1 Truck $4,000
July 21 Accounts Receivable 1,200 July 5 Insurance 1,800
July 18 Bank Loan 1,500
July 18 Accounts Payable 500
July 20 Salaries 1,700
July 31 Automobile Fuel 500
July 31 Dividend 800
July 31 Balance c/d 8,400
19,200 19,200
Balance b/d 8,400
Common Stock
July 1 Cash account $18,000
Bank Loan
July 18 Cash 1,800 July 1 Truck $7,000
July 31 Balance c/d 5,200
7,000 7,000
Balance b/d 5,200
Truck
July 1 Cash $4,000 July 31 Balance c/d $11,000
July 1 Bank loan 7,000
11,000 19,200
Balance b/d 11,000
Supplies
July 3 Cash 900
Accounts Payable
July 18 Cash 500 July 3 Supplies 900
July 31 Balance c/d 400
900 900
Balance b/d 400
Prepaid Insurance
July 5 Cash 1,800
Service Revenue
July 31 Balance c/d 6,700 July 12 Accounts Receivable $4,800
July 25 Accounts Receivable $1,900
6,700 6,700
Balance b/d 6,700
Accounts Receivable
July 12 Service Revenue $4,800 July 21 Cash $1,200
July 25 Service Revenue 1,900 July 31 Balance c/d 5,500
6,700 6,700
Balance b/d 5,500
Salaries
July 20 Cash $1,700
Automobile Fuel
July 31 Cash $500
Dividend
July 31 Cash $800
Trial Balance as of July 31:
Description Debit Credit
Cash $8,400
Common Stock $18,000
Bank Loan 5,200
Truck 11,000
Supplies 900
Accounts Payable 400
Prepaid Insurance 1,800
Service Revenue 6,700
Accounts Receivable 5,500
Salaries 1,700
Automobile Fuel 500
Dividends 800
Total
c) Adjusting Journal Entries at July 31:
a) Debit Accounts Receivable $1,400
Credit Service Revenue $1,400
To record unbilled fees.
b) Debit Depreciation Expense $200
Credit Accumulated Depreciation $200
To record depreciation expense for the month.
c) Debit Insurance Expense $150
Credit Prepaid Insurance $150
To record a month's insurance expense.
d) Debit Supplies Expense $300
Credit Supplies $300
To record supplies expense.
Explanation:
Journal entries initially record transactions on a day-to-day basis. From the journal, the transactions are posted to the ledger accounts (e.g. T-accounts) and a trial balance is extracted to check if the two sides are in agreement. At the end of the accounting period, adjusting entries are recorded in the general journal to ensure that accounts are based on the accrual concept and not on cash basis.
Wikipedia's engagement of readers and the public in developing content, with an emphasis on timeliness and the breadth of content, exemplifies this type of value innovation:
Answer: Raise
Explanation:
The options for the question are:
a. Raise
b. Create
c. Reduce
d. Eliminate
Wikipedia is used by people that are involved in academics or anyone that is seeking information as it gives information regarding different topics and issues.
Wikipedia's engagement of readers and the public in developing content, with an emphasis on timeliness and the breadth of content, exemplifies this type of value innovation raise.
Wikipedia is utilized by academicians and anybody looking for knowledge since it provides information from a wide range of topics and situations.
This form of value innovation raising is shown by Wikipedia's participation of users and the public in producing content, with a concentration on immediacy and breadth of material.
Learn more:
https://brainly.com/question/12102265?referrer=searchResults
Salary expense was 15.5% of sales this year. If sales this year are $1,300,000 and are forecasted to be $1,500,000 next year, what is forecasted salary expense next year if all expenses maintain a constant percent of sales?
Answer:
Salary expense next year=$232,500
Explanation:
The ratio of expense to ales is an important which helps in the management and control overhead.
We can be predict the Salary expense using the information given about the relationship between salary expense and sales .
If salary expense is 15.5% of sales, then Salary expense this year =
15.5% × 1,300,000=$201,500
Salary expense next year = 15.5% × foretasted sales next year
= 15.5% × 1,500,000 = $232,500
We use 15.5% because the relationship between the expenses and the sales in proportion is expected to remain the same
Salary expense next year=$232,500
For a variety of reasons, a bank sometimes will hold more reserves than is legally required. These reserves are known as excess reserves. How does holding excess reserves affect the degree to which the money supply will change
Answer: D. The money supply will decrease as banks loan out less money.
Explanation:
The money supply in the Economy is inversely related to the amount of reserves that a bank holds. This is because the higher the reserves held, the less the banks will have to borrow out and the less new money can be created from the money loaned out. Holding excess reserves therefore results in less money supply.
Lightning Remote Cars manufactures remote control cars for children. Historically, Lightning Remote Cars has manufactured their own tires they sell. However, a tire manufacturer has recently approached Lightning Remote Cars with an offer to produce their tires for them for $1.40 per tire. Lightning Remote Cars anticipates needing 50,000 tires this year to meet the demand for their remote control cars. What would be the total impact on operating income if the tires are purchased from the outside supplier
Answer:
operating income would decrease by $2,500 if tires are purchased
Explanation:
offer from outside vendor = $1.40 per tire
yearly demand = 50,000 tires
production costs:
direct materials $0.25direct labor $0.80variable manufacturing overhead $0.30fixed costs $0.50total costs = $1.85
total avoidable costs = $1.35
make tires buy tires differential amount
produce tires $92,500 $0 $92,500
buy tires $0 $95,000 ($95,000)
total $92,500 $95,000 ($2,500)
operating income would decrease by $2,500 if tires are purchased
Answer:
2,500
Explanation:
Nissan’s all-electric car, the Leaf, has a base price of $32,780 in the United States, but it is eligible for a $7500 federal tax credit. A consulting engineering company wants to evaluate the purchase or lease of one of the vehicles for use by its employees traveling to job sites in the local area. The cost for leasing the vehicle will be $4200 per year (payable at the end of each year) after an initialization charge of $2500 paid now. If the company purchases the vehicle, it will also purchase a home charging station for $2200 that will be partially offset by a 50% tax credit. If the company expects to be able to sell the car and charging station for 40% of the base price of the car alone at the end of 3 years, should the company purchase or lease the car? Use an interest rate of 10% per year and annual worth analysis.
Answer:
Nissan's all-electric car, the Leaf
PV cost of Leaf Purchase = $16,529
PV cost of Leasing = $12,944.78
The company should lease the car.
Explanation:
a) Costs incurred to purchase the Leaf:
Base price $32,780
less Federal tax credit ($7,500)
Charging station 2,200
less 50% tax credit (1,100)
Cash paid $26,380
Sales value after 3 yrs (9,851) ( $26,380 - 40% of base discounted to PV)
Net PV Investment $16,529
b) Calculation of Discounted Present Values of Payments under Leasing, using online financial calculator:
PV (Present Value) $12,944.78
N (Number of Periods) 3.000
I/Y (Interest Rate) 10.000%
PMT (Periodic Payment) $4,200.00
Starting Investment $2,500.00
Total Principal $15,100.00
Total Interest $2,129.50
c) The purchase of the Leaf would involve a present value cost of $26,380 after deducting all the savings from tax. The 40% sales value of the car at the end of 3 years = $13,112 ($32,780 x 40%). When this sales value is discounted to PV of $9,851, the PV of the car investments becomes $16,529 ($26,380 - $9,851). On the other hand, leasing will cost in PV the sum of $12,944.78
.
At the end of the first year of operations, Gaur Manufacturing had gross accounts receivable of $412,000. Gaur's management estimates that 8% of the accounts will prove uncollectible. What journal entry should Gaur record to establish an allowance for uncollectible accounts
Answer:
Dr bad debt 32,960
Cr Allowance for uncollectible account 32,960
Explanation:
Preparation of the journal entry that Gaur should record to establish an allowance for uncollectible accounts
Since we were told that he had gross accounts receivable of the amount of $412,000 in which 8% of the accounts will prove uncollectible this means the transaction will be recorded as:
Dr Bad debt 32,960
Cr Allowance for uncollectible account 32,960
($412,000×8%)
One measure of ____ is the extent to which the work of the department affects the final output of the organization.
Answer:
Centrality
Explanation:
Remember, a less central organization means more freedom. However, when the work of the departments in an organization can adversely affects the final output of the organization it tells us how central the organization is.
This Implies that the organization is following a structured system in which flexibility is not possible, and as a result any issues at other departments might affect output.
OPR finds its cases through all of the following except which one? A. The investigation division of OPR.
Answer:
The investigation division of OPR.
Explanation:
OPR stands for Office of Professional Responsibility. It is a section of department of justice whose task is to monitor any misconduct in the government departments. It is responsibility of OPR to find any allegations that result in misconduct in department of attorney. The OPR finds its cases through all except the own division. There will be chance of familiarity and self review threats in such monitoring.
The following data concerns a proposed equipment purchase: Cost$144,000 Salvage value$4,000 Estimated useful life 4years Annual net cash flows$46,100 Depreciation methodStraight-line Ignoring income taxes, the annual net income amount used to calculate the accounting rate of return is:
Answer: $74,000
Explanation:
The Average Investment refers to the average cash invested into a particular project and is useful in calculating the rate of return. The simple formula is to add the beginning value of the asset to its ending value and divide this by 2.
The ending value in this case would be the salvage value;
Average Investment = [tex]\frac{Beginning Cost of Machine + Salvage Value}{2}[/tex]
= [tex]\frac{144,000 + 4,000}{2}[/tex]
= $74,000
A purchase of land in exchange for a long-term note payable is reported in the investing section of the statement of cash flows.
A. True
B. False
Answer:
false
Explanation: