Answer:
In simple words, Inventory risk pooling is the concept that the variability in demand for raw materials is reduced by aggregating demand across multiple products. When properly employed, a business can use risk pooling to maintain lower inventory levels while still avoiding stock out conditions. Although for preventing stock out situation a company need warehouses where they can keep supply sufficient for emergency conditions.
Indicate whether each of the statements below about a perfectly competitive market is true or false. a. In general, the market demand curve in a perfectly competitive market is perfectly elastic. False True b. In general, an individual firm in a perfectly competitive market faces a perfectly elastic demand curve. True False c. An individual firm in a perfectly competitive market can obtain a higher price for its product by reducing output. True False d. An individual firm in a perfectly competitive market must lower its price to sell more of its product. True False f. In a perfectly competitive market, average revenue is equal to the market price. False True e. In a perfectly competitive market, marginal revenue is equal to the market price. False True
Answer:
A. False
B. True
C. False
D. False
E. True
F. True
Explanation:
A perfect competition is characterised by many buyers and sellers of homogenous goods and services. Market prices are set by the forces of demand and supply. There are no barriers to entry or exit of firms into the industry.
In the long run, firms earn zero economic profit. If in the short run firms are earning economic profit, in the long run firms would enter into the industry. This would drive economic profit to zero.
Also, if in the short run, firms are earning economic loss, in the long run, firms would exit the industry until economic profit falls to zero.
If a seller increases her price, her demand would fall to zero because customers woild patronize other suppliers. Also, there is no incentive to reduce price because the firm would be making a loss. This is the reason why the firm's demand curve is perfectly elastic, the firm can only sell at one price. This price is set by the market forces.
The market's demand curve is downward sloping
Price = average revenue = Marginal revenue
I hope my answer helps you
In general, the market demand curve in a perfectly competitive market is perfectly elastic.
A. FalseIn general, an individual firm in a perfectly competitive market faces a perfectly elastic demand curve.
B. TrueAn individual firm in a perfectly competitive market can obtain a higher price for its product by reducing output.
C. FalseAn individual firm in a perfectly competitive market must lower its price to sell more of its product
D. FalseIn a perfectly competitive market, marginal revenue is equal to the market price.
E. Tr ueIn a perfectly competitive market, average revenue is equal to the market price
F. TrueAccording to the principles of economics, we can see that in a perfectly competitive market, the marginal revenue is equal to the market price and the average revenue is equal to the market price.
A perfectly competitive market is a market where there is equal chances for competitors in an ideal scenario
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Platen purchased inventory on August 17 and received an invoice with a list price amount of $5,900 and payment terms of 4/10, n/30. Platen uses the net method to record purchases. For what amount should Platen record the purchase
Answer:
$5,664
Explanation:
Calculation of the amount that Platen should record the purchase.
Using this formula
List price -(Percentage of payment term × list price)
Let plug in the formula
$5,900 -(4%×5,900 )
=$5,900-$236
=$5,664
Therefore Platen should record the purchase on August 17 as a:
Debit to Purchases (periodic system) and a Credit to Accounts Payable for $5,664
Therefore the amount that Platen should record the purchase will be $5,664
Duff Inc. paid a 2.69 dollar dividend today. If the dividend is expected to grow at a constant 3 percent rate and the required rate of return is 5 percent, what would you expect Duff's stock price to be 4 years from now?
Answer:
$155.92
Explanation:
Div₀ = $2.69
Div₁ = $2.7707
Div₂ = $2.8538
Div₃ = $2.9394
Div₄ = $3.0276
Div₅ = $3.1184
we need to calculate the stocks terminal value in year 4, and to do that we will use Div₅ and the growing perpetuity formula:
stock price = $3.1184 / (5% - 3%) = $155.92
if we wanted to calculate the current stock price we would use Div₁ in the same formula.
Kansas Company acquired a building valued at $151,000 for property tax purposes in exchange for 12,000 shares of its $3 par common stock. The stock is widely traded and selling for $18 per share. At what amount should the building be recorded by Kansas Company
Answer:
The building would be recorded by Kansas Company for an amount of $216,000
Explanation:
In order to calculate the amount should the building be recorded by Kansas Company we would have to calculate the value of the building with the following formula:
value of the building= shares exchanged*Market value per share
shares exchanged=12,000 shares
Market value per share=$18
Therefore, value of the building=12,000*$18
value of the building=$216,000
The building would be recorded by Kansas Company for an amount of $216,000
Which of the following is not descriptive of external environmental scanning? used as a tool for corporations to avoid strategic surprise used to monitor, evaluate, and disseminate information relevant to the organizational development of strategy used to identify major stockholders used to determine a firm's competitive advantage used as a tool to ensure a corporation's long-term health
Answer:
used to identify major stockholders
Explanation:
Environmental scanning is a management strategy that focuses on systematically acquiring informations about occasions, trends, events or patterns through surveys and analysis of these information in an organisation's external and internal environment. The informations acquired through environmental scanning is then used by the executive management in strategically planning the organisation's future and exploitation of available opportunities for the success of the organization.
The internal environmental scanning offers an organization strength and weakness while the external environmental scanning provides information about opportunities and threats.
Generally, the external environmental scanning gives an overview of the opportunities in the market as well as potential threats to an organization.
Hence, the following are descriptive of an external environmental scanning;
1. Used as a tool for corporations to avoid strategic surprise.
2. Used to monitor, evaluate, and disseminate information relevant to the organizational development of strategy.
3. Used to determine a firm's competitive advantage.
4. Used as a tool to ensure a corporation's long-term health.
Which Sunshine Apartment rental policy is considered legal under the 1968 federal fair housing laws? A) The lease of any tenant who regularly entertains guests of a race different from that of the tenant is canceled. B) Owners can refuse to rent to prospects who have long hair and ride motorcycles. C) Higher deposits are required from single males than from single females who are prospective tenants. D) Advertise exclusively by encouraging the existing tenants, predominately white, to solicit prospects from among friends and associates.
Answer: B) Owners can refuse to rent to prospects who have long hair and ride motorcycles.
Explanation:
The 1968 Federal Fair Housing Laws established that it is illegal to discriminate or refuse housing to a person based on race or color; religion; national origin; familial status or age—includes families with children under the age of 18 and pregnant women; disability or handicap, or sex.
Option A would be considered as a violation of the no discrimination based on race stipulation of the law.
Option C would be a violation of the no discrimination based on sex stipulation of the law.
And Option D would be a subtle violation but nonetheless a violation of the no discrimination based on race stipulation.
Option B is the only option that doesn't seem to break any of the stipulations of the 1968 act.
The inventory was destroyed by fire on December 31. The following data were obtained from the accounting records: Jan. 1 Inventory $ 360,000 Jan. 1 to Dec. 31 Purchases (net) 2,870,000 Sales 4,470,000 Estimated gross profit rate 30% A. Estimate the cost of the inventory destroyed. Refer to the Amount Descriptions list provided for the exact wording of the answer choices for text entries. B. In which situations would the gross profit method be useful
Answer:
A. Estimate the cost of the inventory destroyed is $101,000
B. Gross profit method would be useful in estimating the cost of merchandise destroyed by the fire.
Explanation:
Particulars Debit ($) Credit ($)
Beginning merchandise inventory 360,000
Add: Net purchase 2,870,000
Merchandise available for sale 3,230,000
Less: Net sales 4,470,000
Estimated gross profit (30%) (1,341,000)
Estimated cost of merchandise sold 3,129,000
Estimate the cost of the inventory destroyed 101,000
A supermarket displays featured items at the ends of aisles. These displays
are called
Answer:
These are the options for the question:
A. exteriors
B. endcaps
C. merchandisers
D. props.
And this is the correct answer:
B. endcaps
Explanation:
The small billboards that display items at the end of aisles are called endcaps.
They are usually used to display items that are on discount. Other times, they are simply used to sign the category of products that can be found in the respective aisle.
Answer:
endcaps
Explanation:
When we express the value of a cash flow or series of cash flows in terms of dollars today, we call it the ________ of the investment. If we express it in terms of dollars in the future, we call it the
Answer:
Present value
Future value
Explanation:
Present value is the value of cashflows discounted at interest rate at arrive at its value today.
Future value is the value of cashflows discounted at interest rate at arrive at its value at some given time in the future.
I hope my answer helps you
Answer:
Present value, future value
Explanation:
Cash flows can be expressed in present value or as future value. The present value of cash flows is the current value of cash.
Future value is the projected value of money at some point in the future. The future value of money is usually higher than the present value.
For example $1 in the present will appreciate in value over the next 5 years to a higher value of let's say $1.50. The $1 is the present value while $1.50 is the future value
The fair values of all of Sirius's assets and liabilities were equal to their book values except for inventory that had a fair value of $85,000, land that had a fair value of $60,000, and buildings and equipment that had a fair value of $250,000. Buildings and equipment have a remaining useful life of 10 years with zero salvage value. Paradox Company decided to employ push-down accounting for the acquisition. Subsequent to the combination, Sirius continued to operate as a separate company. Based on the preceding information, what amount will be present in the revaluation capital account, when consolidating entries are prepared?
Answer:
$0
Explanation:
The fair value is the value above the book value. The financial statements are prepared at historic cost and when the value of assets rises a revaluation account is created to present financial statements accurate. The fair values of Sirius's assets are equal to book value and all assets are presented at cost or book value. There will be no revaluation charged to the consolidated statement.
sadik inch's bonds currently sell for $1,300 and have a par value of $1,000. They pay a $105 annual coupon and have a 15-year maturity, but they can be called in 5 years at $1,100. What is their yield to call
Answer:
5.31%
Explanation:
For computing the yield to call we need to use the RATE formula i.e shown in the attachment below:
Given that,
Present value = $1,300
Future value or Face value = $1,100
PMT = 105
NPER = 5 years
The formula is shown below:
= Rate(NPER;PMT;-PV;FV;type)
The present value come in negative
So, after applying the above formula, the yield to call is 5.31%
COO, Scott Lawton, discusses Barcelona’s philosophy on allowing restaurant managers to make their own decisions. They hire and train managers that they believe have the "creativity and brain power" to be successful. Scott is performing a(n) informational role.
Answer: Interpersonal Role
Explanation:
In this scenario, Scott Lawton is not performing an Informational role but rather an Interpersonal one.
There are three (3) roles of a manager that involve Interpersonal skills. This includes, Figurehead, Liaison and Leader.
The role of Leader is the relevant role here. Under this role for instance, Managers are supposed to exercise leadership and one way to do that is to hire and train staff to the best of their ability. By hiring Managers and training them, Scott plays the Interpersonal role of Leader to the managers who they then hope will be successful.
Cole Corporation was organized on January 1, Year 1. The company was authorized to issue 100,000 shares of $1 par value common stock. During the year, the company had the following transactions relating to stockholders’ equity: Issued 40,000 shares of common stock at $8 per share. Reported a net income of $60,000. Paid dividends of $30,000. Purchased 5,000 shares of treasury stock at $10 per share. What is total stockholders’ equity at the end of Year 1? Multiple Choice a) $300,000 b) $350,000 c) $400,000 d) $460,000
Answer: a)$300,000
Explanation:
Stockholders Equity shows just how much of the company is being financed by the shareholders. It is calculated by,
Total Stockholders Equity for the Year = Issued and Outstanding Shares + Retained Earnings - Treasury Stock
Retained Earnings = Opening Retained Earnings + Net Income - Dividends
First year of operation so no Opening Retained Earnings.
= $0 + 60,000 - $30,000
= $30,000
Total Stockholders Equity for the Year = (40,000* $8) + $30,000 - (5,000 * 10)
= 320,000 + 30,000 - 50,000
= $300,000
A factory worker really wants to move up in the corporation. He does his work, stays late, and is always looking for extra ways to help. He gets passed up for promotion after promotion. This will MOST LIKELY affect his ________. equity instrumentality expectancy valence
Answer:
instrumentality
Explanation:
Based on the information provided within the question it seems that this will most likely affect his instrumentality. Meaning his quality of serving as a means to an end. This is because the worker is working hard in order to progress in the company and not have to work so hard in the future. If this does not happen then he will begin to become discouraged and not work as hard anymore.
Hall Corporation uses the weighted-average method in its process costing system. Data concerning the first processing department for the most recent month are listed below:
Beginning work in process inventory:
Units in beginning work in process inventory 1,000
Materials costs $7,100
Conversion costs $6,400
Percent complete with respect to materials 65%
Percent complete with respect to conversion 30%
Units started into production during the month 13,600
Units transferred to the next department during the month 12,300
Materials costs added during the month $137,224
Conversion costs added during the month $215,050
Ending work in process inventory:
Units in ending work in process inventory 2,300
Percent complete with respect to materials 60%
Percent complete with respect to conversion 25%
The total cost transferred from the first processing department to the next processing department during the month is closest to:______
a. $356,256
b. $380,435
c. $341,325
d. $349,856
Answer:
c. $341,325
Explanation:
First determine the Equivalent Units of Production
Materials
Units completed and transferred (12,300 × 100%) = 12,300
Units in Ending Work In Process Inventory ( 2,300 ×60%) = 1,380
Equivalent Units of Production = 13,680
Conversion
Units completed and transferred (12,300 × 100%) = 12,300
Units in Ending Work In Process Inventory ( 2,300 ×25%) = 575
Equivalent Units of Production = 12,875
Next Determine the Total Cost Incurred during the period
Materials
Cost in Units of Opening Work In Process = $7,100
Incurred during the period = $137,224
Total Cost = $144,324
Conversion
Cost in Units of Opening Work In Process = $6,400
Incurred during the period = $215,050
Total Cost = $221,450
Then Determine the Total Cost per Equivalent unit of Production
Cost per Equivalent unit = Total Cost / Total Equivalent Units
Materials = $144,324 / 13,680
= $10.54
Conversion = $221,450 / 12,875
= $17.20
Total = $10.54 + $17.20 = $27.74
Finally calculate total cost transferred from the first processing department to the next processing department
total cost transferred = Units transferred × Total cost per equivalent unit of production.
= 12,300 × $27.74
= $341,202
Conclusion :
The total cost transferred from the first processing department to the next processing department during the month is closest to $341,325
Star Corp. has a rate of return on assets of 10% and a debt/equity ratio of 2 to 1 before entering into an operating lease. Not including any indirect effects on earnings, when Star Corp. records the operating lease, the immediate impact on these ratios is a(an):
Answer:
The return on assets and debt/equity ratio does not change
Explanation:
An operating lease does not affect assets and liabilities. From the formula:
Equity = Assets - Liabilities, since both assets and liabilities are not affected (they remain unchanged) therefore the equity is also the same.
The debt/ equity ratio = total liabilities/total equity. Since liabilities and equity remain unchanged, therefore The debt/ equity ratio is the same.
Also the return of assets (earnings/assets) remain the same
Suppose that Boeing and Rolls-Royce Holdings are the sole producers of a particular turbo engine. The two firms currently charge the same price for their products. If neither firm reduces the price of its turbo engine, each firm earns $50 million in profit. If both firms reduce their prices, then each firm will earn $10 million in profit. If one firm reduces its price and the other does not, then the firm that reduces price will earn a profit of $70 million while the other firm will earn a profit of $5 million. If the firms can operate as a cartel, what will they do
Answer:
The two firms will manipulate the market in unison, to maintain the same price, which guarantees the optimum benefit for both firms, as opposed to if one or both of them reduces its price.
Explanation:
A cartel is a group of independent market participants that collude with each other in order to improve their profits and dominate the market. Cartels are usually in the same line of business, and they form a type of alliance as competitors. Cartel use price fixing, bid rigging, and reductions in output, to dominate the market and to maximize their profit. They are usually frowned upon in a free market system.
In this case, if the the two firms Boeing and Rolls-Royce operates as a cartel, they will bend the market rules by fixing their prices, instead of letting market drivers like demand and supply to determine their selling price, they might also reduce their output so that they both have the same level of output, or do any other form of manipulation in unison to maintain the same price. This is because both companies will benefit equally if they maintain the same price, as opposed to if one or both of them reduces price.
A sales associate moves from Jacksonville, Florida, to Atlanta, Georgia. The associate continues to be employed by the same broker, who has an office in Atlanta. Which statement is TRUE
Answer: The sales associate must notify the DBPR in writing within 60 days regarding her change in residency
Explanation:
The options are:
a. The states associate broker is required to file the change of address on her behalf.
b. The sales associate broker is not required to notify DBPR because she did not change employers.
c. The sales associate must notify the DBPR in writing within 60 days regarding her change in residency.
d. The sales associate must file an application for Georgia real estate license.
From the question, we are informed that a sales associate moves from Jacksonville, Florida, to Atlanta, Georgia. The associate continues to be employed by the same broker, who has an office in Atlanta.
Based on the scenario, the sales associate should let the DBPR be aware that he or she has moved from
Jacksonville, Florida, to Atlanta, Georgia by writing to them within 60 days regarding her change in residency.
Consider a firm with an annual net income of $30 million, revenue of $70 million and cost of goods sold of $35 million. If the balance sheet amounts show $3.5 million of inventory and $800,000 of property, plant & equipment, what is the inventory turnover?
a. 12.50
b. 4.44
c. 17.50
d. 5.00
e. 10.00
Answer:
The answer is 5.2 million
Explanation:
Solution
Given that:
The cost of good sold is =$35 million
Inventory = $3.5 million
Thus we compute for the Inventory turnover which is given below:
Inventory turn over ratio (ITR)
=Cost of goods sold/Inventory
=35$million/$3.5 million
=$10 million
So,
The weekly supply = The number of week in a year /ITR
= 52 Weeks/$10 million
=5.2
Therefore the turnover of inventory is 5.2 million which is close to option (d) 5.00
Cotton On Ltd. currently has the following capital structure: Debt: $3,500,000 par value of outstanding bond that pays annually 10% coupon rate with an annual before-tax yield to maturity of 12%. The bond issue has face value of $1,000 and will mature in 20 years.
Answer and Explanation:
This question is incomplete. Kindly find the incomplete question here
Ordinary shares: $5,500,000 book value of outstanding ordinary shares. Nominal value of each share is $100. The firm plan just paid a $8.50 dividend per share. The firm is maintaining 4% annual growth rate in dividends, which is expected to continue indefinitely.
Preferred shares: 45,000 outstanding preferred shares with face value of $100, paying fixed dividend rate of 12%
The firm's marginal tax rate is 30%.
Required:
a) Calculate the current price of the corporate bond?
b)Calculate the current price of the ordinary share if the average return of the shares in the same industry is 9%?
c) Calculate the current price of the preferred share if the average return of the shares in the same industry is 10%
The computation is shown below:
a. For the current price of the corporate bond
Before that first we have to determine the after tax yield to maturity i.e
After tax YTM = Before tax YTM × (1 - tax rate)
= 12% × ( 1 - 30%)
= 12% × (1 - 0.3)
= 12% × (0.7)
= 8.4%
Now
Price of bond = Interest × PVIFA(YTM%,n) + Redemption value × PVIF(YTM%,n)
Interest = 1000 × 10% = $100
YTM% = 8.4%
n = 20
PVIFA(YTM%,n) = [1 - (1 ÷ (1 + r)^n ÷ r ]
PVIFA(8.4%,20) = [1 - (1 ÷ (1 + 8.4%)^20 ÷ 8.4%]
= [1 - (1 ÷ (1 + 0.084)^20 ÷ 0.084]
= [1-(1 ÷ (1.084)^20 ÷ 0.084]
= [1 - 0.1993 ÷ 0.084]
= 0.8007 ÷ 0.084
= 9.5327
PVIF(8.4%,20) = 1 ÷ (1 + 8.4%)^20
= 1 ÷ (1.084)^20
= 0.19926
So, the price of bond is
= $100 × 9.5327 + $1000 × 0.19926
= $953.27 + $199.26
= $1,152.52
b)Price of stock = Dividend of next year ÷ (Required rate of return - growth rate )
where,
Growth rate = 4%
Required rate of return = 9%
The Dividend of next year = Dividend paid × (1 + growth rate)
= 8.50 × (1 + 4%)
= 8.50 × (1 + 0.04)
= 8.50 × (1.04)
= $8.84
Thus the price of the stock is
= $8.84 ÷ (9% - 4%)
= $8.84 ÷ 5%
= $176.80
c) Price of preference shares is
= Dividend ÷ Required rate of return
where,
Dividend = 100 × 12% = $12
And, the Required rate of return = 10%
So, the price of preference shares is
= 12 ÷ 10%
= $120
The adjusted trial balance of Ryan Financial Planners appears below.
RYAN FINANCIAL PLANNERS
Adjusted Trial Balance
December 31, 2014
Debit Credit
Cash $2,660
Accounts Receivable 2,140
Supplies 1,850
Equipment 15,900
Accumulated Depreciation-Equipment $3,975
Accounts Payable 3,310
Unearned Service Revenue 3,205
Common Stock 10,000
Retained Earnings 4,510
Dividends 1,000
Service Revenue 4,300
Supplies Expense 410
Depreciation Expense 2,420
Rent Expense 2,920
$29,300 $29,300
Using the information from the adjusted trial balance, you are to prepare for the month ending December 31:
1. An income statement. (Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).)
Dividends Expenses Net Income / (Loss) Retained earnings, December 1 Retained earnings, December 31 Revenues Total Expenses Total Revenues
RYAN FINANCIAL PLANNERS
Income Statement
For the Month Ended December 31, 2014
Dividends Expenses Net Income / (Loss) Retained earnings, December 1 Retained earnings, December 31 Revenues Total Expenses Total Revenues
2. A retained earnings statement.
RYAN FINANCIAL PLANNERS
Retained Earnings Statement
For the Month Ended December 31, 2014
3. A balance sheet. (List Assets in order of liquidity.)
RYAN FINANCIAL PLANNERS
Balance Sheet
December 31, 2014
Dividends Expenses Net Income / (Loss) Retained earnings, December 1 Retained earnings, December 31 Revenues Total Expenses Total Revenues
less
Assets
Liabilities and Stockholders' Equity
Current AssetsLiabilitiesIntangible AssetsLong-term InvestmentsLong-term LiabilitiesProperty, Plant and EquipmentStockholders' EquityTotal AssetsTotal Current AssetsTotal Current LiabilitiesTotal Intangible AssetsTotal LiabilitiesShort-term InvestmentsTotal Long-term InvestmentsTotal Long-term LiabilitiesTotal Property, Plant and EquipmentTotal Liabilities and Stockholders
Answer and Explanation:
The preparation is presented below:
1. For income statement
Particulars (in dollars)
Service Revenue 4,300
Less: Supplies Expense 410
Gross Income 3,890
Less: Depreciation Expense 2,420
Less: Rent Expense 2,920
Income Statement ($1,450) i.e net loss
It records expenses incurred and revenues earned
3. For retained earnings statement
Retained Earnings Statement $
Beginning Retained Earnings 4,510
Less: Dividend Paid (1,000)
Less: Net Loss for the year (1,450)
Ending Retained earning 2,060
It records the dividend paid and the net loss for the year
2. For Balance Sheet
Assets $
Non-Current Asset
Equipment (15,900 - 3,975) 11,925
Current Asset
Cash 2,660
Accounts Receivable 2,140
Supplies 1,850
Total current assets 6,650
Total Asset 18,575 (11,925 + 6,650)
Common Stock 10,000
Add: Retained Earnings 2,060
Liabilities
Current Liabilities
Unearned Service Revenue 3,205
Accounts Payable 3,310
Total current liabilities 6,515
Total Equity and Liability 18,575 ($10,000 + $2,060 + $6,515)
It shows the financial position, performance of the company
You come across different kinds businesses every day. The following sentences describes some businesses. Using the description of each business, classify it as a sole proprietorship, a partnership, a corporation, or a Limited liability company/limited liability partnership.
a. Anthony started a tutoring website. After a few months, a publishing company filed a lawsuit against his company for copyright infringement. Anthony had to shut down his business and lost all his personal assets in the process.
b. Willie started a business, based in a different state, with his unde. Due to the business's underperformance, they had to dose the business. Willie, however, ended up losing his house due to a litigation claim.
c. James, the CEO of a beverage company, is required to certify the accuracy of information provided in the company's quarterly reports.
Answer:
The correct answers are:
A - Sole propietorship
B - Partnership
C - Corporation
Explanation:
A) The name of "Sole Propietorship" is refered to a type of enterprise whose main characteristics reside in the fact that the ownership belongs to one person only and that person receives all the profits and is also fully unlimited liable for the debts of the business. Therefore that in that case Anthony started a sole propietorship
B) The name of "Partnership" is refered to a type of enterprise that is characterized for the fact of being a business that is operated and managed by two or more parties that have made a formal arregenment in order to work together and both obtain profits equally and also share the responsibility of the debts and its liability together equally. Therefore that in that case Willie has started a partnership.
C) The name of "Corporation" is refered to a type of enterprise that basically is characterized by the fact of being a different legal person that itw owners and therefore that the ones that own the business do not take unlimited responsibility for the actions of the company and its debts. The most common in this type of companies is that the owners hire many employees, among them, CEOs.
For each event listed below, identify the accounts that should be used to record the economic event and the dollar amount for that account. You should enter the letters that correspond to the accounts that should be used, along with the related dollar amounts. Your answers will be evaluated based on whether you have included every account and the related dollar amount that is needed and not included any account that is not needed. An account can be used in analyzing more than one event.A. additional paid-in capitalB. bonds payableC. cashD. common stockE. discount on bonds payableF. equipmentG. interest expenseH. interest payableI. preferred stockJ. premium on bonds payableK. treasury stock(Example:Event: The company purchased equipment, paying cash of $15,0001,) The company issued bonds in the amount of $10,000,000, receiving cash of $9,400,000 at the time of issuance.
Answer: C $9,400,000 E $600,000; B $10,000,000
Explanation:
The Company Issued bonds worth $10,000,000 but only received $9,400,000 in cash.
This means that they issued the Bonds at a discount. With the discount being the difference between how much was issued and how much was received.
This discount will be sent to the Discount on Bonds Payable account.
The Cash received of $9,400,000 will be sent to the cash account.
The company will still have to pay the entire figure of $10,000,000 in bonds so the full amount will go to the Bonds Payable account.
The Journal Entry is thus,
DR Cash $9,400,000
DR Discount on Bonds Payable $600,000
CR Bonds Payable $10,000,000
If the government began providing free textbooks to college students who would otherwise have bought their books from the private sector, the government's action would result in:_______
A) a Ricardian dilemma.
B) a direct expenditure offset.
C) an increase in real Gross Domestic Product (GDP).
D) a reduction of the government deficit.
Answer:
Option (B) is the correct answer to this question.
Explanation:
As the government spends more money, businesses within the private sector typically spend less.
Specific budget offsets refer to the private-sector expenditures through which compensation was generated as a result of expansionary budgetary policy decisions becoming implemented. The private sector activities in investment profits that counter government spending behavior by the state. Some income from federal spending in an environment competing with corporate companies must be offset by any government expenditure.
Other options are incorrect because they are not related to the given scenario.
A company applies overhead at a rate of 150% of direct labor cost. Actual overhead cost for the current period is $1,150,000, and direct labor cost is $565,000. Determine whether there is over- or underapplied overhead using the T-account below. Factory OverheadActual Overhead 950,000 Overapplied overhead 950,000
Answer:
Under applied overheads= $302,500
Explanation:
Overheads are charged to units produced by the means of an estimated overhead absorption rate. This rate is computed using budgeted overhead and budgeted activity level.
As a result of this, overhead charged to total units product might be over or under absorbed compared to the actual amount incurred.
Overhead absorption rate
=budgeted Overhead/Budgeted labour cost × 100
This already given in the question as 150% of the direct labour rate
= 150% of direct labour cost
Applied overhead= OAR× actual labour cost
= 150% × $565,000=$847,500
Under applied overhead = is the difference between actual overhead and applied overhead
$1,150,000 - $847,500 = $302,500
Under applied overheads= $302,500
Here it is under applied because the applied is less than the actual overhead cost
Suppose that in the rice market demand shifts greatly due to a new rice diet that is being marketed heavily in the U.S. as a cure for cancer. Simultaneously the supply curve shifts slightly due to a healthy rainy season that positively affects the rice crop in California. What is the most likely outcome in this situation?
Answer:
the equilibrium price increases, albeit by a negligible amount
Explanation:
Here are the options to this question :
the supply curve will shift again after demand meets supply
the equilibrium price increases
the equilibrium price increases, albeit by a negligible amount
the demand curve will shift back to its original level
The new rice diet that is being marketed heavily in the U.S. as a cure for cancer would increase the demand for rice. This would shift the demand curve rightward. This shift of the demand curve would increase demand and price
The hw healthy rainy season that positively affects the rice crop in California woild increase the supply of rice and as a result the supply curve would shift to the right. The rightward shift of the supply curve would cause quantity to rise and price to fall.
This combined effect would lead to a rise in quantity and a rise in price by only a negligible amount.
I hope my answer helps you
Bolton Tire Manufacturing and the union came to an impasse during negotiation of the collective bargaining agreement. Specifically, they could not agree on the wage increase for the employees. The union representative reported this information to the employees, and they staged a strike without the union's authorization.
A. The employees have engaged in an unfair labor practice strike.
B. The employees have engaged in an economic strike.
C. The employees have engaged in a sitdown strike.
D. None of the choices are correct.
Answer:
The correct answer is the option A: the employees have engaged in an unfair labor practice strike.
Explanation:
To begin with, due to the fact that the union was already establishing the area for the negotiation and they might have planeed obviously to keep trying to increase the situation in their favour then the action taken by the employees was a bit hurry and was obvious that was not thought very well with calm minds and therefore that they engaged in an unfair labor practice strike because they had to be patience and wait for the union to improve the situation for them, because their are the representatives and if the company sees that the workers do not obey to the representatives then the union will lose negotiation power and the situation will get worse for them.
Zoe, who is risk averse, purchased flight cancellation insurance which will cover the cost of her non-refundable $500 airline ticket if she is unable to travel due to illness. Zoe faces a 10 percent probability of becoming ill and then using the insurance.a) The fair insurance premium (i.e., selling price) for this insurance is $450.b) Zoe’s maximum willingness to pay for the insurance is $50.c) Zoe’s personal risk premium must exceed the actuarially fair price.d) None of the above.
Answer: Zoe’s maximum willingness to pay for the insurance is $50
Explanation:
From the question, we are informed that Zoe, who is risk averse, bought flight cancellation insurance which will cover the cost of her non-refundable $500 airline ticket if she is unable to travel due to illness wnd also that Zoe faces a 10 percent probability of becoming ill and then using the insurance.
The expected value of the insurance will be the cost of the airline ticket multiplied by the probability of her becoming ill. This will be:
= $500 × 10%
= $500 × 0.1
= $50
Based on the calculation, it can be concluded that Zoe’s maximum willingness to pay for the insurance is $50.
Scorpion Company has net credit sales of $5,400,000 for the year and it estimates that doubtful accounts will be 2% of sales. If its Allowance for Doubtful Accounts has a credit balance of $18,000 prior to adjustment, its balance after adjustment will be a credit of:
Answer:
Balance after adjustment will be a credit of $90,000
Explanation:
Particulars Amount
Non-collectible accounts $108,000
Credit balance $18,000
Balance Adjustment $90,000
Balance after adjustment will be a credit of $90,000
Note: Non-collectible accounts = 2% * $5,400,000 =$108000
Conroy Copper Mines has $940 million in total liabilities and $620 million in shareholder's equity. It discloses operating lease commitments over the next five years with a present value of $120 million. If the lease commitments are treated as debt, the debt-to-total-capital ratio is closest to:
Answer:
0.63
Explanation:
Total debt = 940 + 120 =1060
Total sharesholder's equity = $620 million
We can find the debt to total capital ratio by dividing debt by total capital
Debt-to-total-capital ratio = Debt / Total capital = 1060 / (1060+620)
Debt-to-total-capital ratio = 0.63