Answer:
$7.5 million
Explanation:
Calculation to determine What amount should Harvey Hotels report as pension expense in its income statement for the year
Service cost $6.2 million
Add Interest cost $1.4 million
Less Expected return on plan assets($1.2 million)
Add Amortization of prior service cost $1.1 million
Pension expense $7.5 million
Therefore the amount that Harvey Hotels should report as pension expense in its income statement for the year is $7.5 million
What is an example of goods?
O a hotel room
O a good haircut
O a car wash
O a hard cover book
Answer:
Hotel Room
Explanation:
a
An example of goods in the case is a hard cover book.
What is a goods?Most time, this are often tangible product that are felt and seen, unlike the service which are rendered and often intangible product
An example of service includes a hotel room, a good haircut and a car wash.
Therefore, the Option D is correct.
Read more about goods
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Chahana acquired and placed in service $1,185,000 of equipment on August 1, 2019 for use in her sole proprietorship. The equipment is 5-year recovery property. No other acquisitions are made during the year. Chahana elects to expense the maximum amount under Sec. 179, and bonus depreciation is not applied. Chahana's total deductions for 2019 (including Sec. 179 and depreciation) are:___________.
A) $1,020,000.
B) $237,000.
C) $1.185,000.
D) $1,053,000
Answer:
D) $1,053,000
Explanation:
Calculation to determine what Chahana's total deductions for 2019 (including Sec. 179 and depreciation) are
Sec 179 immediate expensing $1,020,000
MACRS depreciation:
Add Basis for depreciation $33,000
[($1,185,000 - $1,020,000 Sec. 179) × .20]
Total depreciation $1,053,000
($1,020,000+$33,000)
Therefore Chahana's total deductions for 2019 (including Sec. 179 and depreciation) are:$1,053,000
Cooper Company currently uses the FIFO method to account for its inventory but is considering a switch to LIFO before the books are closed for the year. Selected data for the year are:
Merchandise inventory, January 1 $1,430,000
Current assets 3,603,600
Total assets (operating) 5,720,000
Cost of goods sold (FIFO) 2,230,800
Merchandise inventory, December 31 (LIFO) 1,544,400
Merchandise inventory, December 31 (FIFO) 1,887,600
Current liabilities 1,144,000
Net sales 3,832,400
Operating expenses 915,200
1. Compute the current ratio, inventory turnover ratio, and rate of return on operating assets assuming the company continues using FIFO.
2. Repeat part (a) assuming the company adjusts its accounts to the LIFO inventory method.
Answer:
Cooper Company
1. FIFO:
Current ratio
= 3.15
Inventory turnover ratio
= 1.34
Rate of return on operating assets
= 12%
2. LIFO:
Current ratio
= 2.85
Inventory turnover ratio
= 1.73
Rate of return on operating assets
= 12.8%
Explanation:
a) Data and Calculations:
Merchandise inventory, January 1 $1,430,000
Current assets 3,603,600
Total assets (operating) 5,720,000
Cost of goods sold (FIFO) 2,230,800
Merchandise inventory, December 31 (LIFO) 1,544,400
Merchandise inventory, December 31 (FIFO) 1,887,600
Current liabilities 1,144,000
Net sales 3,832,400
Operating expenses 915,200
FIFO
Merchandise inventory, December 31 (FIFO) $1,887,600
Cost of goods sold (FIFO) 2,230,800
Goods available for sale $4,118,400
Merchandise inventory, January 1 1,430,000
Purchases $2,688,400
LIFO:
Goods available for sale $4,118,400
Merchandise inventory, December 31 (LIFO) 1,544,400
Cost of goods sold (LIFO) $2,574,000
Income Statements FIFO LIFO
Net sales $3,832,400 $3,832,400
Cost of goods sold (FIFO) 2,230,800 2,574,000
Gross profit $1,601,600 $1,258,400
Operating expenses 915,200 915,200
Net income $686,400 $343,200
Merchandise inventory, December 31 (LIFO) 1,544,400
Merchandise inventory, December 31 (FIFO) 1,887,600
Difference between FIFO and LIFO = 343,200
FIFO Difference LIFO
Current assets 3,603,600 343,200 3,260,400
Total assets (operating) 5,720,000 343,200 5,376,800
Cost of goods sold (FIFO) 2,230,800 2,574,000
Merchandise inventory, January 1 1,430,000 1,430,000
Merchandise inventory, December 31 1,887,600 1,544,400
Current liabilities 1,144,000 1,144,000
Average inventory 1,658,800 1,487,200
FIFO:
Current ratio = current assets/current liabilities
= $3,603,600/$1,144,000 = 3.15
Inventory turnover ratio = Cost of goods sold/Average Inventory
= $2,230,800/$1,658,800
= 1.34
Rate of return on operating assets = Net income/Total assets * 100
= $686,400/$5,720,000 * 100
= 12%
LIFO:
Current ratio = $3,260,400/$1,144,000
= 2.85
Inventory turnover ratio = $2,574,000/$1,487,200
= 1.73
Rate of return on operating assets = $686,400/$5,376,800 * 100
= 12.8%
Kierofree Air Tours has the following payroll data for its November 5 pay date:
Nov 5 Wages and salaries expense 522 $199,023.00
Federal withholding tax payable 220 $33,833.91
Social Security tax payable 221 11,442.35
Medicare tax payable 222 2,676.03
401(k) contributions payable 223 6,965.81
Health Insurance payable 224 14,468.97
Union Dues payable 227 4,975.58
Wages and salaries payable 226 ???
How much is the net pay?
a) $199,023.00
b) $185,216.26
c) $142,578.94
d) $124,660.35
Answer:
a probably as far as I can solve
Analysis of Transactions Charles Chadwick opened a business called Charlie's Detective Service in January 20--. Set up T accounts for the following accounts: Cash; Accounts Receivable; Office Supplies; Computer Equipment; Office Furniture; Accounts Payable; Charles Chadwick, Capital; Charles Chadwick, Drawing; Professional Fees; Rent Expense; and Utilities Expense. The following transactions occurred during the first month of business. Record these transactions in T accounts. After all transactions are recorded, foot and balance the accounts if necessary. (a) Invested cash in the business, $30,369. (b) Bought office supplies for cash, $379. (c) Bought office furniture for cash, $5,320. (d) Purchased computer and printer on account, $8,118. (e) Received cash from clients for services, $2,850. (f) Paid cash on account for computer and printer purchased in transaction (d), $3,615. (g) Earned professional fees on account during the month, $9,322. (h) Paid cash for office rent for January, $1,303. (i) Paid utility bills for the month, $889. (j) Received cash from clients billed in transaction (g), $6,442. (k) Withdrew cash for personal use, $2,823.
Answer:
Charlie's Detective Service
T-accounts:
Cash
Account Titles Debit Credit
Charles Chadwick, Capital $30,369
Office supplies $379
Office furniture 5,320
Professional Fees 2,850
Accounts Payable 3,615
Rent Expense 1,303
Utilities Expense 889
Accounts Receivable 6,442
Charles Chadwick, Drawing 2,823
Balance $25,332
Totals $39,661 $39,661
Accounts Receivable
Account Titles Debit Credit
Professional Fees $9,322
Cash $6,442
Balance $2,880
Office Supplies
Account Titles Debit Credit
Cash $379
Computer Equipment
Account Titles Debit Credit
Accounts Payable $8,118
Office Furniture
Account Titles Debit Credit
Cash $5,320
Accounts Payable
Account Titles Debit Credit
Computer and printer $8,118
Cash $3,615
Balance $4,503
Charles Chadwick, Capital
Account Titles Debit Credit
Cash $30,369
Charles Chadwick, Drawing
Account Titles Debit Credit
Cash $2,823
Professional Fees
Account Titles Debit Credit
Cash $2,850
Accounts Receivable 9,322
Balance $12,172
Rent Expense
Account Titles Debit Credit
Cash $1,303
Utilities Expense
Account Titles Debit Credit
Cash $889
Explanation:
a) Data and Analysis:
(a) Cash $30,369 Charles Chadwick, Capital $30,369
(b) Office supplies $379 Cash $379
(c) Office furniture $5,320 Cash $5,320
(d) Computer and printer $8,118 Accounts Payable $8,118
(e) Cash $2,850 Professional Fees $2,850
(f) Accounts Payable $3,615 Cash $3,615
(g) Accounts Receivable $9,322 Professional Fees $9,322
(h) Rent Expense $1,303 Cash $1,303
(i) Utilities Expense $889 Cash $889
(j) Cash $6,442 Accounts Receivable $6,442
(k) Charles Chadwick, Drawing $2,823 Cash $2,823
At 60,000 machine hours, Boris Company static budget for variable overhead costs is $180,000. At 60,000 machine hours, the company's static budget for fixed overhead costs is $300,000. Machine hours are the cost driver of all overhead costs. The static budget is based on 60,000 machine hours. At 60,000 machine hours, the company produces 40,000 units. The following data is available:
Actual units produced and sold 42,000
Actual machine hours 64,000
Actual variable overhead costs $185,600
Actual fixed overhead costs $302,400
What is the fixed overhead spending variance?
A) $2,400 Favorable
B) $2,400 Unfavorable
C) $1,000 Unfavorable
D) $1,000 Favorable
Answer:
$2,400 unfavorable
Explanation:
The computation of the fixed overhead spending variance is shown below;
We know that
fixed overhead spending variance = actual fixed overhead - budgeted fixed overhead
= $302,400 - $300,000
= $2,400 unfavorable
As actual fixed overhead is more than the standard fixed overhead so it should be unfavorable else it is favorable
Every good speaker adapts to the audience. When adapting presentations for intercultural audiences, most people understand that they must make the basic language adaptations; however, more fundamental sensitivity is sometimes needed in relation to organization, speaking conventions, values, and nonverbal communication. When addressing cross-cultural audiences:__________.
a. use first names
b. anticipate differing expectations
c. deliver your main point first
What should you do when adjusting multimedia slides to intercultural audiences?
a. Progress through your slides rapidly.
b. Use a little more text than usual in your slides.
c. Put very little information in your slides.
Answer: 1. anticipate differing expectations
2. Use a little more text than usual in your slides.
Explanation:
1. Based on the fact that the presentation is for intercultural audiences, it is important for the speaker to anticipate differing expectations. The audience have different values, languages etc and their opinions and expectations may be quite different.
2. During the adjustment of multimedia slides to intercultural audiences, it's important to use a little more text than usual in your slides. This is vital so that the audience can comprehend the message that's being passed across. Progressing through the slides rapidly isn't ideal and there should be detailed information in the slides.
Twix Dots Skor
Net income $4,200 $106,000 $76,800
Depreciation expense 31,600 8,400 25,600
Accounts receivable increase (decrease) 42,200 21,000 (4,200 )
Inventory increase (decrease) (21,200 ) (10,600 ) 10,600
Accounts payable increase (decrease) 25,400 (23,400 ) 14,800
Accrued liabilities increase (decrease) (46,600 ) 12,800 (8,400 )
Required:
For each separate company, compute cash flows from operations using the indirect method. (Amounts to be deducted should be indicated by a minus sign.)
Answer:
Twix, Dots, and Skor
Twix Dots Skor
Net income $4,200 $106,000 $76,800
Depreciation expense 31,600 8,400 25,600
Accounts receivable increase (decrease) 42,200 21,000 (4,200 )
Inventory increase (decrease) (21,200 ) (10,600 ) 10,600
Accounts payable increase (decrease) 25,400 (23,400 ) 14,800
Accrued liabilities increase (decrease) (46,600 ) 12,800 (8,400 )
Cash flows from operations ($6,400) $93,400 $102,400
Explanation:
a) Data and Calculations:
Twix Dots Skor
Net income $4,200 $106,000 $76,800
Depreciation expense 31,600 8,400 25,600
Accounts receivable increase (decrease) 42,200 21,000 (4,200 )
Inventory increase (decrease) (21,200 ) (10,600 ) 10,600
Accounts payable increase (decrease) 25,400 (23,400 ) 14,800
Accrued liabilities increase (decrease) (46,600 ) 12,800 (8,400 )
b) Depreciation is added back to the net income. Increases in current assets are cash outflows, reducing cash flows, while decreases are cash inflows, increasing cash flows. On the other hand, increases in current liabilities are cash inflows, increasing cash flows, while decreases are cash outflows, reducing cash flows.
Jasmine owned rental real estate that she sold to her tenant in an installment sale. Jasmine acquired the property in 2008 for $1,840,000; took $644,000 of depreciation on it; and sold it for $1,012,000, receiving $101,200 immediately and the balance (plus interest at a market rate) in equal payments of $91,080 for 10 years. What is the nature of the recognized gain or loss from this transaction?
Answer:
The nature of recognized gain or loss from this transaction is known as capital gain or loss and its important for the computation of individual income taxes
Explanation:
Given the above information, the gain or loss on sale of real estate is computed as;
Original cost
$1,840,000
Less:
Depreciation
($644,000)
Current value of property
$1,196,000
Less:
Sales value
($1,012,000)
Loss on sale
$184,000
Here, there is loss on sale because sales is less than the present value of the property taken into consideration, hence a capital loss is recognized.
Ralph has decided to put $2,400 a year (at the end of each year) into an IRA over his 40 year working life and then retire. What will Ralph have at retirement if the account earns 10 percent compounded annually
Answer:
$1,062,222.13
Explanation:
Calculation to determine What will Ralph have at retirement if the account earns 10 percent compounded annually
Annuity =$2,400
n = 40 years
r = 10%
FVOA=2400*(1+0.1)^40-1/0.1
FVOA=2400∗442.5925557
FVOA=$1,062,222.13
Ralph will have $1,062,223 at retirement
How micro and macro economics are interdependent to each other?
You need to earn 6% annul real rate of return and, in addition, you need to keep up with the annual inflation rate. Exactly 4 years ago, the expected inflation rate was 2% per year. At that time, you decided to invest in a 7-year annuity with $20,000 deposited at the end of each year. Now, right after you made the 4th deposit, the expected annual inflation rate for the next 3 years is 3% per year. To keep your investment goal of 6% real annual return and keeping up with the new inflation rate, how much more each year for the last 3 years you will need to deposit in addition to the $20,000 per year to reach that goal?
Answer:
"4,000" is the appropriate option.
Explanation:
Given:
Real interest rate,
= 6%
Inflation rate,
= 2%
Annual deposit,
= $20,000
Now,
The nominal interest rate will be:
= [tex]Real \ interest \ rate+Inflation \ rate[/tex]
= [tex]6+2[/tex]
= [tex]8[/tex] (%)
As per the annual deposit, I was making,
= [tex]20000\times 0.6[/tex]
= [tex]1200 \ every \ year[/tex]
Inflation rate rise 3% i.e.,
= [tex]2+3[/tex]
= [tex]5[/tex] (%)
Just to earn 1200, I have to:
= [tex]\frac{1200}{0.05}[/tex]
= [tex]24,000[/tex]
Thus the above is the appropriate answer.
Prepare a Pareto chart of the possible causes for a student to fail a final examination in a university course.
Vehicles are identified by RFID tags in order to collect bridge tolls. The project manager is considering two different technologies for RFID readers. By sampling two different options, the following data are collected about the accuracy of the readers:
Option 1: 99, 98, 99, 94, 92, 99, 98, 99, 94, 90 Option 2: 98, 97, 97, 97, 98, 98, 97, 97, 98
Calculate the mean, mode, and standard deviation of the two options.
Answer:
Option 1
[tex]\bar x_1 = 96.2[/tex]
[tex]Mode = 99[/tex]
[tex]\sigma_1 = 3.22[/tex]
Option 2
[tex]\bar x_2 = 97.4[/tex]
[tex]Mode = 97[/tex]
[tex]\sigma_2 = 0.499[/tex]
Explanation:
Given
[tex]Option\ 1: 99, 98, 99, 94, 92, 99, 98, 99, 94, 90[/tex]
[tex]Option\ 2: 98, 97, 97, 97, 98, 98, 97, 97, 98[/tex]
Required
The mean, mode and standard deviation of both options
Option 1
Calculate mean
[tex]\bar x = \frac{\sum x}{n}[/tex]
[tex]\bar x_1 = \frac{99+ 98+ 99+ 94+ 92+ 99+ 98+ 99+ 94+ 90}{10}[/tex]
[tex]\bar x_1 = \frac{962}{10}[/tex]
[tex]\bar x_1 = 96.2[/tex]
Calculate mode
[tex]Mode = 99[/tex]
Because it has a frequency of 4 (more than other element of the dataset)
Calculate standard deviation
[tex]\sigma = \sqrt{\frac{\sum(x - \bar x)^2}{n}}[/tex]
[tex]\sigma_1 = \sqrt{\frac{(99-96.2)^2 +.............+(90-96.2)^2}{10}}[/tex]
[tex]\sigma_1 = \sqrt{\frac{103.6}{10}}[/tex]
[tex]\sigma_1 = \sqrt{10.36}[/tex]
[tex]\sigma_1 = 3.22[/tex]
Option 2
Calculate mean
[tex]\bar x = \frac{\sum x}{n}[/tex]
[tex]\bar x_2 = \frac{98+ 97+ 97+ 97+ 98+ 98+ 97+ 97+ 98}{9}[/tex]
[tex]\bar x_2 = \frac{877}{9}[/tex]
[tex]\bar x_2 = 97.4[/tex]
Calculate mode
[tex]Mode = 97[/tex]
Because it has a frequency of 5 (more than other element of the dataset)
Calculate standard deviation
[tex]\sigma_2 = \sqrt{\frac{(98-97.4)^2+..............+ (98-97.4)^2}{9}}[/tex]
[tex]\sigma_2 = \sqrt{\frac{2.24}{9}}[/tex]
[tex]\sigma_2 = \sqrt{0.2489}[/tex]
[tex]\sigma_2 = 0.499[/tex]
Nash Company purchased a computer for $8,160 on January 1, 2019. Straight-line depreciation is used, based on a 5-year life and a $1,020 salvage value. On January 1, 2021, the estimates are revised. Nash now feels the computer will be used until December 31, 2022, when it can be sold for $510. Compute the 2021 depreciation. (Round answer to 0 decimal places, e.g. 45,892.) Depreciation expense, 2021 $
Answer:
$2,397
Explanation:
Straight line method charges a fixed amount of depreciation
Depreciation Charge = (Cost - Residual Value) ÷ Estimated useful life
therefore,
Annual depreciation charge
2019
Depreciation Charge = $1,428
2020
Depreciation Charge = $1,428
2021
Depreciation Charge = ($8,160 - $1,428 - $1,428 - $510) ÷ 2
= $2,397
therefore,
Depreciation expense, 2021 is $2,397
On January 1, 2021, Ellison Company granted Sam Wine, an employee, an option to buy 1,000 shares of Ellison Co. stock for $30 per share, the option exercisable for 5 years from date of grant. Using a fair value option pricing model, total compensation expense is determined to be $6,000. Wine exercised his option on October 1, 2021 and sold his 1,000 shares on December 1, 2021. Quoted market prices of Ellison Co. stock in 2021 were:
July 1 $30 per share
October 1 $36 per share
December 1 $40 per share
The service period is for three years beginning January 1, 2021. As a result of the option granted to Wine, using the fair value method, Ellison should recognize compensation expense for 2021 on its books in the amount of:________
a. $6,000 21
b. $2,000
c. $1,500
d. $0
Answer:
b. $2,000
Explanation:
Using a fair value option pricing model, total compensation expense is determined to be $6,000.
The service period is for three years beginning January 1, 2021.
So, Ellison should recognize compensation expense for 2021 on its books in the amount of:
= $6,000 / 3 years
= $2,000.
As a result of the option granted to Wine, using the fair value method, Ellison should recognize $2,000 as compensation expense.
Lucci Inc. is a retailing firm specializing in high-end merchandise. Each of Lucci's stores uses the retail inventory method by applying the average-LCM alternative. The information below pertains to one department within its Scottsdale, Arizona store. You will use this information to determine ending inventory and cost of goods sold for financial reporting purposes. Assume no inventory shrinkage, and a periodic inventory system.
Beginning inventory of merchandise
Cost, $40,000
Retail, $360,000
Purchases during the period
Cost, $1,000,000
Retail, $10,000,000
Transportation in, $50,000
Transportation out, $32,000
Purchase returns
Cost, $20,000
Retail, $196,000
Net additional markups, $800,000
Net markdowns, $500,000
Sales, $9,800,000
Using the information above, compute the amounts to be reported in the financial statements for ending inventory and cost of goods sold for the department. The spreadsheet below has been started for you. Line items have been entered in column A. In columns B and C, enter appropriate amounts as well as intermediate subtotals directly below the amounts leading to the subtotal. Include the cost to retail calculation as well as your two amounts for financial statement reporting. Round the cost to retail ratio to four decimal places and include the "0" preceding the decimal point. Enter 0 where no other entry is appropriate.
A1 lock copy cut paste
A B C
1 Line Item Description Cost Retail
2 Beginning inventory $40,000
3 Purchases
4 Transportation in
5 Purchases returns
6 Net purchases
7 Net additional markups
8 Cost to retail ratio components
9 Net markdowns
10 Sales
11 Ending inventory, retail
12 Set up Calculation
13 Cost to retail ratio
14 Ending inventory, cost
15 Cost of goods sold
Answer:
1 Line item description Cost Retail
2 Beginning inventory 40000 360000
3 Purchases 1000000 10000000
4 Transportation in 50000
5 Purchase returns -20000 -196000
6 Net purchases(3+4+5) 1030000 9804000
7 Net additional markups 800000
8 Cost to retail ratio 1070000 10964000
component(2+6+7)
9 Net markdowns -500000
10 Sales -9800000
11 Ending inventory,retail(8+9+10) 664000
Setup calculation:
Cost to retail ratio = Cost to retail ratio component at cost/Cost to retail ratio component at retail
= 1070000/10964000
= 0.097592
= 9.76%
Ending inventory,cost = Ending inventory,retail*Cost to retail ratio
= 664000*9.76%
= $64806
Cost of goods sold = Sales*Cost to retail ratio
= 9800000*9.76%
= $956480
Robert is the sole shareholder and CEO of ABC, Inc., an S corporation that is a qualified trade or business. During the current year, ABC has net income of $287,000 after deducting Robert's $86,100 salary. In addition to his compensation, ABC pays Robert dividends of $200,900.
a. What is Robert's qualified business income?
b. Would your answer to part (a) change if you determined that reasonable compensation for someone with Robert's experience and responsibilities is $181,050?
Answer:
A. $287,000
B. $192,050
Explanation:
a. Based on the information givenwe were told that company ABC had net income of the amount of $287,000 after deducting Robert's salary of the amount of $86,100 which therefore means that ROBERT'S QUALIFIED BUSINESS INCOME will be the amount of $287,000.
b. Calculation to determine whether your answer to part (a) would change if you determined that reasonable compensation for someone with Robert's experience and responsibilities is $181,050
Based on the information given the amount of $192,050 will be the additional amount of salary that can be deducted which is Calculated as:
=[$287,000 - ($181,050-$86,100)]
=$287,000-$94,950
=$192,050
Ramses Corporation produces a product that passes through two processes. During April, the first department transferred 19,000 units to the second department. The cost of the units transferred was $30,000. Material are added uniformly in the second process. The following information is provided about the second department's operations during October:
Units: beginning work-in-process, 4,000
Units: ending work-in-process, 5,500
A) Calculate the number of units started in the second department during April.
B) Calculate the number of units completed in the second department during April.
C) Calculate the number of units started and completed in the second department during April.
Answer: See explanation
Explanation:
A. The number of units started in the second department during April will be the number of units that is transferred in from the first department. This will be
= 19000 units
B. The number of units completed in the second department during April will be:
= Beginning units + Started Unit - Ending units
= 4000 + 19000 - 5500
= 17500 units
C. The number of units started and completed in the second department during April will be:
= Completed units - units in beginning WIP
= 17500 – 4000
= 13500 units.
Do It! Review 11-3a Skysong, Inc. has 2,600 shares of 7%, $130 par value preferred stock outstanding at December 31, 2019. At December 31, 2019, the company declared a $132,000 cash dividend. Determine the dividend paid to preferred stockholders and common stockholders under each of the following scenarios.
Answer:
1. We have:
Dividend paid to preferred stockholders = $23,660
Dividend paid to common stockholders = $108,340
2. We have:
Dividend paid to preferred stockholders = $23,660
Dividend paid to common stockholders = $108,340
3. We have:
Dividend paid to preferred stockholders = $70,980
Dividend paid to common stockholders = $61,020
Explanation:
1. The preferred stock is noncumulative, and the company has not missed any dividends in previous years.
Dividend paid to preferred stockholders = Number of preferred stock outstanding * Preferred stock par value * Preferred stock = 2,600 * $130 * 7% = $23,660
Dividend paid to common stockholders = Dividend declared - Dividend paid to preferred stockholders = $132,000 - $23,660 = $108,340
2. The preferred stock is noncumulative, and the company did not pay a dividend in each of the two previous years.
Since the preferred stock is noncumulative, the answers are the as in part 1 as follows:
Dividend paid to preferred stockholders = Number of preferred stock outstanding * Preferred stock par value * Preferred stock = 2,600 * $130 * 7% = $23,660
Dividend paid to common stockholders = Dividend declared - Dividend paid to preferred stockholders = $132,000 - $23,660 = $108,340
3. The preferred stock is cumulative, and the company did not pay a dividend in each of the two previous years.
Since the preferred stock is cumulative, this means that the accrued fixed dividends for the two previous years have to be paid together with the current year’s dividend making 3 fixed dividends as follows:
Dividend paid to preferred stockholders = (Number of preferred stock outstanding * Preferred stock par value * Preferred stock) * 3 = (2,600 * $130 * 7%) * 3 = $70,980
Dividend paid to common stockholders = Dividend declared - Dividend paid to preferred stockholders = $132,000 - $70,980 = $61,020
Although the Fed has very strong influence over the money supply, it does not have complete control a.Because the Fed has no idea how much reserves will change when it buys or sells securities. b.Because of unpredictable changes in the public's desire to hold cash or borrow and banks' desires to hold reserves or lend. c.Because of unpredictable changes in reserve requirements. d.Because the FOMC meets only twice a year.
Answer: b. Because of unpredictable changes in the public's desire to hold cash or borrow and banks' desires to hold reserves or lend.
Explanation:
The Fed is able to embark on monetary policy that influences the entire country - and the world to some extent - because they have very strong influence over the money supply of the US$.
This influence is not absolute however because as the old adage goes, "you can lead a horse to water but you can't make him drink". In other words, the Fed can relax(impose) restrictions to make money more(less) available but they cannot force people to borrow(hold) that money.
They can't force banks either to either hold reserves or lend money out because banks are free to impose their own reserve limits on top of those of the Fed.
Gallatin County Motors Inc. assembles and sells snowmobile engines. The company began operations on July 1 and operated at 100% of capacity during the first month. The following data summarize the results for July: 1 Sales (38,000 units) $9,500,000.00 2 Production costs (44,000 units): 3 Direct materials $4,400,000.00 4 Direct labor 1,760,000.00 5 Variable factory overhead 1,100,000.00 6 Fixed factory overhead 660,000.00 7,920,000.00 7 Selling and administrative expenses: 8 Variable selling and administrative expenses $1,170,000.00 9 Fixed selling and administrative expenses 200,000.00 1,370,000.00 Required: a. Prepare an income statement according to the absorption costing concept\.\* b. Prepare an income statement according to the variable costing concept\.\* c. What is the reason for the difference in the amount of Operating income reported in (a) and (b)
Answer:
a.
income statement according to the absorption costing concept.
Sales $9,500,000.00
Less Cost of Sales ($6,840,000.00)
Gross Profit $2,660,000.00
Less Expenses
Variable selling and administrative expenses ($1,170,000.00)
Fixed selling and administrative expenses ($200,000.00)
Net Income $1,290,000.00
b.
income statement according to the variable costing concept
Sales $9,500,000.00
Less Cost of Sales ($6,270,000.00)
Contribution $3,230,000.00
Less Expenses
Fixed factory overhead ($660,000.00)
Variable selling and administrative expenses ($1,170,000.00)
Fixed selling and administrative expenses ($200,000.00)
Net Income $1,200,000.00
c.
The difference is due to fixed cost included in closing inventory under the absorption costing concept.
Explanation:
Production Cost - Absorption Costing
Direct materials $4,400,000.00
Direct labor $1,760,000.00
Variable factory overhead $1,100,000.00
Fixed factory overhead $660,000.00
Total $7,920,000.00
therefore,
Cost of Sales = 38,000 units/ 44,000 units x $7,920,000.00
= $6,840,000
Production Cost - Variable Costing
Direct materials $4,400,000.00
Direct labor $1,760,000.00
Variable factory overhead $1,100,000.00
Total $7,260,000.00
therefore,
Cost of Sales = 38,000 units/ 44,000 units x $7,260,000.00
= $6,270,000
a. Income Statement according to Absorption Costing Concept:
Sales: $9,500,000.00
Cost of Goods Sold:
Direct Materials: $4,400,000.00
Direct Labor: $1,760,000.00
Variable Factory Overhead: $1,100,000.00
Fixed Factory Overhead: $660,000.00
Total Manufacturing Costs: $7,920,000.00
Gross Profit: $1,580,000.00
Selling and Administrative Expenses:
Variable Selling and Administrative Expenses: $1,170,000.00
Fixed Selling and Administrative Expenses: $200,000.00
Total Selling and Administrative Expenses: $1,370,000.00
Operating Income: $210,000.00
b. Income Statement according to Variable Costing Concept:
Sales: $9,500,000.00
Variable Costs:
Direct Materials: $4,400,000.00
Direct Labor: $1,760,000.00
Variable Factory Overhead: $1,100,000.00
Variable Selling and Administrative Expenses: $1,170,000.00
Total Variable Costs: $8,430,000.00
Contribution Margin: $1,070,000.00
Fixed Costs:
Fixed Factory Overhead: $660,000.00
Fixed Selling and Administrative Expenses: $200,000.00
Total Fixed Costs: $860,000.00
Operating Income: $210,000.00
In absorption costing, fixed manufacturing overhead is treated as a product cost and is included in the cost of goods sold. This means that a portion of fixed overhead is allocated to each unit produced, resulting in higher inventory values and a higher cost of goods sold.
In variable costing, fixed manufacturing overhead is treated as a period cost and is not included in the cost of goods sold. It is instead expensed in the period incurred. This means that fixed overhead is only expensed when it is incurred and is not allocated to units in inventory.
Since the number of units produced (44,000 units) exceeded the number of units sold (38,000 units), the fixed overhead allocated to the 6,000 unsold units under absorption costing contributes to the difference in reported operating income between the two methods. In this case, the absorption costing method reports higher operating income due to the allocation of fixed overhead to units in inventory.
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Compute the payback period for each of these two separate investments: A new operating system for an existing machine is expected to cost $280,000 and have a useful life of five years. The system yields an incremental after-tax income of $80,769 each year after deducting its straight-line depreciation. The predicted salvage value of the system is $11,000. A machine costs $200,000, has a $15,000 salvage value, is expected to last seven years, and will generate an after-tax income of $44,000 per year after straight-line depreciation.
Answer and Explanation:
The computation of the payback period for each investment is shown below;
For Option 1
= Initial Investment ÷ Annual Cash Flow
= $280,000 ÷ $134,569
= 2.081 Year
Here Annual cash inflow is
= Net income + Depreciation
= $80,769 + (($280,000 - $11,000) ÷ 5)
= $134,569
For Option-2
= Initial Investment ÷ Annual Cash Flow
= $200,000 ÷ $70,429
= 2.84 Year
Here Annual cash inflow is
= Net income + Depreciation
= $44,000 + (($200,000 - $15,000) ÷ 7)
= $70,429
Your child is planning attend summer camp for 3 months, starting 12 months from now. The cost for camp is $2,676 per month, each month, for the 3 months she will attend. If your investments earn 2.3% APR (compounded monthly), how much must you invest each month, starting next month, for 3 months such that your investment will grow to just cover the cost of the camp
Answer:
Monthly deposit= $2,625.16
Explanation:
Giving the following information:
Total cost= 2,676*3= $8,028
Monthly interest rate0 0.023/12= 0.00192
First, we need to calculate the nominal value required at the end of the third month:
PV= FV / (1 + i)^n
FV= 8,028
i= 0.00192
n= 9 months
PV= 8,028 / (1.00192^9)
PV= $7,890.6
Now, the monthly investment to reach $7,890.6:
FV= {A*[(1+i)^n-1]}/i
A= monthly deposit
Isolating A:
A= (FV*i)/{[(1+i)^n]-1}
A= (7,890.6*0.00192) / [(1.00192^3) - 1]
A= $2,625.16
One way to support the domestic marketing campaign is through industry participation. List three other pillars of this campaign.
Answer: strategic pillars: content, data, and execution
Explanation:
The following information should be used to according to the provisions of GAAP (Statement of Cash Flows) and using the following data. Net income $50,000 Provision for bad debts $2,000 Decrease in inventory $1,000 Decrease in accounts payable $2,000 Purchase of new equipment $35,000 Sale of equipment for $10,000 loss $20,000 Depreciation expense $6,000 Repurchase of common stock $13,000 Payment of dividend $4,000 Interest payment $3,000 What is net cash flow from operations
Answer:
Explanation:
The net cash flow from operations, according to the provisions of GAAP on Statement of Cash Flows, is $77,000.
What is the net cash flow from operations?The net cash flow from operations shows the ability of a firm to generate cash from its core business activities.
The net cash flow from operations is computed as the net income from the income statement and adjustments to modify net income from an accrual accounting basis to a cash accounting basis.
Data and Calculations:Net income $50,000
Non-Cash Expenses:
Loss from sale of equipment $20,000
Provision for bad debts $2,000
Depreciation expense $6,000
Changes in working capital:
Decrease in inventory $1,000
Decrease in accounts payable ($2,000)
Cash from operations $77,000
Thus, the net cash flow from operations, according to the provisions of GAAP on Statement of Cash Flows, is $77,000.
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A natural experiment is a chance occurrence that mimics a randomized controlled trial. In order to analyze causal effects from natural experiments, economists make use of a statistical method known as instrumental variables, in which one variable from a natural experiment is used as an instrument for a particular independent variable of interest. Assume the independent variable of interest is x1 and the dependent variable in a regression is y. Which of the following represent necessary characteristics of a suitable instrument?
a. The instrument has at least 200 observations
b. The instrument is correlated with
c. The instrument has a conditional mean of zero
d. The instrument does not directly influence y, except through
Answer: b. The instrument is correlated with x1.
d. The instrument does not directly influence y, except through x1.
Explanation:
Based on the information given in the question, the necessary characteristics of a suitable instrument include:
• The instrument is correlated with x1.
• The instrument does not directly influence y, except through x1.
Some of the criteria for an instrument variable are the fact that it should have a causal effect on independent variable and also the dependent variable isn't directly affected except through the independent variable which is x1 in this scenario.
Therefore, the correct option are B and D.
Question: According to a Honda press release on October 23, 2006, sales of the fuel-efficient four-cylinder Honda Civic rose by 7.1% from 2005 to 2006. Over the same period, according to data from the U.S. Energy Information Administration, the average price of regular gasoline rose from $2.27 per gallon to $2.57 per gallon. Using the midpoint method, calculate the cross-price elasticity of demand between Honda Civics and regular gasoline. According to your estimate of the cross-price elasticity, are the two goods gross complements or gross substitutes
Explanation:
because im a grade 3Rebecca wants to start her own hair salon as a side business. In order to do so, she needs to buy a professional hair dryer for $700.00 and hair coloring supplies for $232.00. She believes she will be able to schedule 18 clients in per week. If she wants to begin making a profit at the end of two weeks, how much will each client need to pay Rebecca for their hair
Answer:$25.89
Explanation:
The amount that each client need to pay Rebecca for their hair in order to make a profit goes thus:
Total cost = $700 + $232 = $932
Number of clients in 2 weeks = 2 × 18 = 36
Therefore, each client will pay:
= $932/36
= $25.89
Here I Sit Sofas has 6,600 shares of common stock outstanding at a price of $89 per share. There are 950 bonds that mature in 25 years with a coupon rate of 6.3 percent paid semiannually. The bonds have a par value of $1,000 each and sell at 106 percent of par. The company also has 5,500 shares of preferred stock outstanding at a price of $42 per share. What is the capital structure weight of the debt
Answer:
55.17 %
Explanation:
We use the Market Values of Sources of Capital to determine their Weight in Capital Structure.
Weight of the debt = Market Value of Debt / Total Market Value x 100
where,
Market Value of Debt = 950 x $1,000 x 106% = $1,007,000
Market Value of Common Stock = 6,600 x $89 = $587,400
Market Value of Preferred Stock = 5,500 x $42 = $231,000
therefore,
Weight of the debt = $1,007,000 / $1,825,400 x 100
= 55.17 %
thus,
The capital structure weight of the debt is 55.17 %
Jessie purchased land as an investment on January 12, 2015 for $80,000. On January 31, 2020, Jessie sold the land for $33,000 cash. In addition, the purchaser assumed the mortgage of $70,000 on the land. What is the amount of the realized gain or loss on the sale
Answer:
$23,000 gain
Explanation:
In the given scenario the initial cost of purchase of the land by Jessie was $80,000
She finally sold the land for $33,000 cash and the purchaser also assumed a mortgage of $70,000.
That is a total sale price of 33,000 + 70,000 = $103,000
The gain on this transaction will be 103,000 - 80,000 = $23,000
Since part of the payment is in mortgage the gain is a long term capital gain for Jessie