Answers
Answer:
$2.25
Explanation:
Please check the attached image for the full question used in answering this question
Breakeven sales is the quantity sold at which net income is equal to zero.
Breakeven sales = fixed cost / (price per unit - variable cost per unit )
$1,215,000 / ($80 - $35) = 27,000
If Highway 55 Studios can reduce fixed expenses by $60,750, variable cost =
27,000 = ($1,215,000 - $60,750) / ($80 - V)
27,000 = 1,154,250 / ($80 - V)
V = $37.25
Variable cost would increase by : $37.25 - $35 = 2.25
Related Questions
A 4-year project has an annual operating cash flow of $54,000. At the beginning of the project, $4,500 in net working capital was required, which will be recovered at the end of the project. The firm also spent $22,900 on equipment to start the project. This equipment will have a book value of $4,860 at the end of the project, but can be sold for $5,820. The tax rate is 40 percent. What is the Year 4 cash flow
Answers
Answer:
$64,704
Explanation:
Year 4 cash flow = operating cash flow + non operating cash flow
non operating cash flow = salvage value + net working capital - tax(Salvage value - book value)
$5,820 + $4,500 - 0.4($5,820 - $4,860) = $10,704
$10,704 + $54,000 = $64,704
Small groups of consumers that interact with products or services and give their feedback based on their experiences are known as?
A. Test subjects
B. Focus group
C. Market research audiences
D. Survey takers
Answers
Answer:
B. Focus group
Explanation:
Use series of elimination on this one.
Test subjects- No
Market Research Audience- Those are people that watch the tests that you will conduct with your focus group.
Survey takers- Too simple.
Hope that I could help you!
Small groups of consumers that interact with products or services and give their feedback based on their experiences are known as Focus group. Option (b) is correct.
What do you mean by Product?Any good or service you offer to satisfy a customer's need or desire is a product. There are both real and virtual ones. Durable things (such as automobiles, furniture, and computers) and nondurable items are examples of physical products (like food and beverages).
A focus group is a market research technique that involves gathering 6–10 individuals in a space to offer input on a certain commodity, concept, or marketing campaign.
Therefore, Option (b) is correct. Small groups of consumers that interact with products or services and give their feedback based on their experiences are known as Focus group.
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Principal-principal conflicts occur within one class of principals, such as a disagreement among certain majority stockholders and other majority stockholders.
a. True
b. False
Answers
Answer: False
Explanation:
The principal to principal conflict typically exists between the two main categories of shareholders, which are the controlling shareholders and the second one which is the minority shareholders
Therefore, the analysis in the question that the principal-principal conflicts occur within one class of principals, such as a disagreement among certain majority stockholders and other majority stockholders is not true.
A machine can be purchased for $140,000 and used for five years, yielding the following net incomes. In projecting net incomes, straight-line depreciation is applied, using a five-year life and a zero salvage value.
Year 1 Year 2 Year 3 Year 4 Year 5
Net income $ 9,500 $ 23,500 $ 64,000 $ 35,500 $ 94,000
Compute the machine’s payback period (ignore taxes). (Round your intermediate calculations to 3 decimal places and round payback period answer to 3 decimal places.)
Year Net Income Depreciation Net Cash Flow Cumulative Cash Flow
0 $ (140,000) $ (140,000)
1 $ 9,500
2 23,500
3 64,000
4 35,500 0
5 94,000 0
Payback period =
Answers
Answer:
2.554 years
Explanation:
Payback period calculates the amount of time it takes to recover the amount invested in a project from its cumulative cash flows.
to derive cash flow from net income, add depreciation back
Straight line depreciation expense = (Cost of asset - Salvage value) / useful life
$140,000 / 5 = $28,000
depreciation expense each year would be $28,000
cash flow in year 1 = $9500 + $28,000 = $37,500
cash flow in year 2= $23,500 + $28,000 =$51,500
cash flow in year 3 =$64,000 + $28,000 = $92,000
cash flow in year 4 =$35,500 + $28,000 = $63,500
cash flow in year 5 =$94,000 + $28,000 = $122,000
in year 1, the amount recovered = $-140,000 + $37,500 = $-102,500
in year 2, the amount recovered = $-102,500 + $51,500 = $-51,000
in year 3, the amount recovered = $-51,000 + $92,000 = $41,000
the amount invested is recovered in 2 years + 51,000 / 92,000 = 2.554 years
In the following example, the proposed debt issue would raise $4,000,000; the interest rate would be 10%. In addition, the EBIT would be $2,000,000. What would be the increase in the Earnings Per Share (EPS) from to current to the proposed structure
Answers
Answer:
$1.67
Explanation:
The computation of the increase in earning per share is shown below:
But before that first we need to find out the current and proposed earning
per share
Particulars Current Proposed
Number of shares $400,000 $240,000 (a)
EBIT $2,000,000 $2,000,000
Less:
Interest $400,000
($4,000,000 ×0.10)
EBT $2,000,000 $1,600,000
Less
Taxes $0 $0
Net income $2,000,000 $1,600,000 (b)
EPS $5 $6.67 (a ÷ b)
Increase in EPS
= $6.67 - $5
= $1.67
Consider the economies of Hermes and Gobbledigook, both of which produce gobs of goo using only tools and workers. Suppose that, during the course of 20 years, the level of physical capital per worker rises by 4 tools per worker in each economy, but the size of each labor force remains the same. Complete the following tables by entering productivity (in terms of output per worker) for each economy in 2016 and 2036.
Year Hermes
Physical Capital Labor Force Output Productivity
(Tools per worker) (Workers) (Gobs of goo) (Gobs per worker)
2016 11 30 3,000
2036 15 30 3,600
Year Gobbledigook
Physical Capital Labor Force Output Productivity
(Tools per worker) (Workers) (Gobs of goo) (Gobs per worker)
2016 8 30 2,400
2036 12 30 3,600
Initially, the number of tools per worker was higher in Hermes than in Gobbledigook. From 2016 to 2036, capital per worker rises by 4 units in each country. The 4-unit change in capital per worker causes productivity in Hermes to rise by a_______ amount than productivity in Gobbledigook. This illustrates the effect_______which makes it______for countries with low output to catch up to those with higher output.
Answers
Answer:
Hermes
Productivity (Gobs per worker)
2016 100
2036 120
Gobbledigook
Productivity
(Gobs per worker)
2016 80
2036 120
Initially, the number of tools per worker was higher in Hermes than in Gobbledigook. From 2016 to 2036, capital per worker rises by 4 units in each country. The 4-unit change in capital per worker causes productivity in Hermes to rise by a SMALLER amount than productivity in Gobbledigook. This illustrates the effect OF CATCH UP which makes it POSSIBLE for countries with low output to catch up to those with higher output.
Explanation:
Hermes
Year Physical Capital Labor Force Output Productivity
(Tools per worker) (Workers) (Gobs of goo) (Gobs per worker)
2016 11 30 3,000 3,000/30=100
2036 15 30 3,600 3,600/30=120
Gobbledigook
Year Physical Capital Labor Force Output Productivity
(Tools per worker) (Workers) (Gobs of goo) (Gobs per worker)
2016 8 30 2,400 2,400/30=80
2036 12 30 3,600 3,600/30=120
Initially, the number of tools per worker was higher in Hermes than in Gobbledigook. From 2016 to 2036, capital per worker rises by 4 units in each country. The 4-unit change in capital per worker causes productivity in Hermes to rise by a SMALLER amount than productivity in Gobbledigook. This illustrates the effect of CATCH UP which makes it POSSIBLE for countries with low output to catch up to those with higher output.
In a duopoly game we observe the following payouts: if the two firms collude they will each earn $50,000. If one firm cheats then he earns $60,000 and the other firm earns -$10,000. If both firms cheat then they each earn zero economic profit. In this game what is the Nash equilibrium?
Answers
Answer:
the Nash equilibrium for both players is to collude
Explanation:
A duopoly is when there are two firms operating in an industry.
Game theory looks at the interactions between participants in a competitive game and calculates the best choice for the player.
Dominant strategy is the best option for a player regardless of what the other player is playing.
Nash equilibrium is the best outcome for players where no player has an incentive to change their decisions.
the Nash equilibrium for both players is to collude because it is the best outcome for both players. if, a player cheats, there is a chance that the other player would cheat and both firms would end up earning a zero economic profit
Based on the various payoffs to be made, the Nash Equilibrium for this game would be that both firms should collude.
The Nash Equilibrium is the outcome that would be most beneficial for both firms to stay in. If either of them leave, they would incur losses.
If both firms decide to collude and one cheats, the other firm would cheat as well to avoid making a loss which would lead to both of them making zero economic profit.
Both firms will therefore collude so as to make $50,000 a piece.
In conclusion, the Nash Equilibrium is collusion between the two firms.
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On January 1, 20X7, Pisa Company acquired 80 percent of Siena Company by purchasing 40,000 shares of Siena's common stock. There was no differential related to this transaction. The noncontrolling interest had a fair value equal to 20 percent of book value. The book value of Siena on December 31, 20X7 was as follows:
On January 1, 20X8, Pisa purchased an additional 12,500 shares directly from Siena for $25 per share. The elimination entry to prepare the consolidated financial statements on December 31, 20X7 would include one of the following answers:
a. credit to common stock for $625,000
b. debit to retained earnings for $37,500
c. credit to Investment in Siena Co. for $976,500
d. credit to NCI in the net assets of Siena Co. for $232,500
Answers
Answer:
a. credit to common stock for $625,000
Explanation:
When a company acquires more than 75% of holding in any company along with significant control then it is known as subsidiary. The company Is then able to record investment in subsidiary as debit balance in its statement of financial position. The cash consideration paid for acquiring the stock is recorded as investment in subsidiary. When the Pisa Company acquired Siena Company it has recorded the investment in Siena but when additional share are purchased Pisa will raise its stock capital.
When group investors become aware of overseas investment opportunities and are willing to diversify their portfolios internationally, __________.
Answers
Answer:
they benefit from an expanded opportunity set.
Explanation:
As most of the business organizations focused on grabbing the investment opportunities which leads to diversify their business in terms of expanding the business in various locations, maximize the market share etc
This can be done with the help of opportunity set i.e. to expanded through which the firm could get the benefit of it
Hence, this would be the answer
Hillside issues $2,000,000 of 6%, 15-year bonds dated January 1, 2017, that pay interest semiannually on June 30 and December 31. The bonds are issued at a price of $2,447,990.Required:a. Prepare the January 1, 2013, journal entry to record the bonds issuance.b. Prepare the first two years of an amortization table using the straight-line method.c. Prepare the journal entries to record the first two interest payments.
Answers
Answer:
a.
Cash $2,447,990 (debit)
Investment in Bonds $2,447,990 (credit)
b.
Amortization Table for the first two years will be :
2013
Capital $22.307
Interest $97.693
Balance $2,425,683
2014
Capital $34,472
Interest $145,528
Balance $2,402,475
c.
First Payment : June 30, 2013
Interest Expense $48,957 (debit)
Investment in Bonds $11,043 (debit)
Cash $60,000 (credit)
Second Payment : December 31, 2013
Interest Expense $48,736 (debit)
Investment in Bonds $11,264 (debit)
Cash $60,000 (credit)
Explanation:
On the day of issuance of the Bonds, the entries will be :
Cash $2,447,990 (debit)
Investment in Bonds $2,447,990 (credit)
Use the data given to prepare an amortization schedule
Hint : First find the YTM as follows :
n = 15 × 2 = 30
FV = - $2,000,000
PV = $2,447,990
PMT = ($2,000,000 × 6%)/2 = $60,000
P/ yr = 2
YTM = ? 3.998
Using a financial calculator, the YTM is 3.998 or 4 %
Amortization Table for the first two years will be :
2013
Capital $22.307
Interest $97.693
Balance $2,425,683
2014
Capital $34,472
Interest $145,528
Balance $2,402,475
Journal Entries for the Payment of Interest :
First Payment : June 30, 2013
Interest Expense $48,957 (debit)
Investment in Bonds $11,043 (debit)
Cash $60,000 (credit)
Second Payment : December 31, 2013
Interest Expense $48,736 (debit)
Investment in Bonds $11,264 (debit)
Cash $60,000 (credit)
George bought the following amounts of Stock A over the years: (Loss amounts should be indicated with a minus sign.) Date Purchased Number of Shares Adjusted Basis Stock A 11/21/1993 1,100 $ 26,400 Stock A 3/18/1999 550 9,900 Stock A 5/22/2008 850 30,600 On October 12, 2019, he sold 1,350 of his shares of Stock A for $38 per share. a. How much gain/loss will George have to recognize if he uses the FIFO method of accounting for the shares sold
Answers
Answer:
George
Using the FIFO method of accounting for the shares sold, the gain to be recognized is $20,400.
Explanation:
a) Data:
Date Purchased Number of Shares Adjusted Basis Cost/unt
Stock A 11/21/1993 1,100 $ 26,400 $24
Stock A 3/18/1999 550 9,900 $18
Stock A 5/22/2008 850 30,600 $36
On October 12, 2019, he sold 1,350, $38 per share
Stock A remaining 1,150
Stock A:
Cost of sales = 1,100 x $24 = $26,400
plus 250 x $18 = $4,500
Total cost of sales $30,900
Sales revenue 1,350 x $38 = $51,300
Gain on sale $20,400
b) The FIFO (First-In, First-Out) method is an inventory method of recognizing the cost of goods sold and the ending inventory based on the assumption that the items that were first brought into inventory are the the ones to be sold. With this method, the cost of sales will be determined by the earlier purchases of inventory while the cost of ending inventory will be calculated based on the later purchases of inventory. Other methods in use in inventory costing are the Last-In, First-Out, the Weighted-Average, and Specific Identification Methods.
You will require $700 in 5 years. If you earn 5% interest on your funds, how much will you need to invest today in order to reach your savings goal
Answers
Answer:
PV= $548.47
Explanation:
Giving the following information:
You will require $700 in 5 years. You earn 5% interest on your funds.
To calculate the initial investment, we need to use the following formula:
PV= FV/(1+i)^n
PV= present value
FV= future value
n= number of years
i= interest rate
PV= 700/(1.05^5)
PV= $548.47
Barb Campbell owns an entertainment company which has increased both its profits and revenues over an extended period of time. Barb's firm is experiencing:
Answers
Answer:
sustained growth
Explanation:
Based on this information it seems that Barb's firm is experiencing sustained growth. This term refers to the realistically attainable amount of growth that a company can have without running into problems. If a business grows way too fast it will not be able to fund that growth, but if they do not grow enough then they will amass debt and fail. Sustainable Growth is usually the goal for new companies.
Suppose a Roasted Olive restaurant is considering whether to (1) bake bread for its restaurant in-house or (2) buy the bread from a local bakery. The chef estimates that variable costs of making each loaf include $.52 of ingredients, $.24 of variable overhead (electricity to run the oven), and $.70 of direct labor for kneading and forming the loaves. Allocating fixed overhead (depreciation on the kitchen equipment and building) based on direct labor assigns $.96 of fixed overhead per loaf. None of the fixed costs are avoidable. The local bakery would charge $1.75 per loaf.
a. What is the unit cost of making the bread in-house (use absorption costing)?
b. Should Roasted Olive bake the bread in-house or buy from the local bakery? Why?
Answers
Answer:
Roasted Olive should bake the bread in-house.
Because, It is cheaper to bake the bread in-house than to purchase as this saves $0.29 per loaf of bread.
Explanation:
Cost of Making
Unit Cost (Absorption Costing) = All Manufacturing Cost (Fixed and Variable)
= $0.52 + $0.24 + $0.70 + $0.96
= $2.42
Cost of Buying from Local Bakery
Note that the fixed costs are note avoidable, meaning that they would be incurred whether or not the bread is made internally or purchased from local Bakery
Cost of Purchase Option per unit :
Purchase Price $1.75
Add Fixed Overhead per loaf $0.96
Total unit cost $2.71
Conclusion :
It is cheaper to bake the bread in-house than to purchase as this saves ( $2.71 - $2.42) $0.29 per loaf of bread.
Therefore, Roasted Olive should bake the bread in-house.
Lindon Company is the exclusive distributor for an automotive product that sells for $34.00 per unit and has a CM ratio of 30%. The company’s fixed expenses are $193,800 per year. The company plans to sell 21,600 units this year. Required: 1. What are the variable expenses per unit? (Round your "per unit" answer to 2 decimal places.) 2. What is the break-even point in unit sales and in dollar sales? 3. What amount of unit sales and dollar sales is required to attain a target profit of $91,800 per year? 4. Assume that by using a more efficient shipper, the company is able to reduce its variable expenses by $3.40 per unit. What is the company’s new break-even point in unit sales and in dollar sales? What dollar sales is required to attain a target profit of $91,800?
Answers
Answer:
1. $23.80
2. Break even Point (units) = 19,000 units and Break even Point (dollars) = $646,000
3. Unit sales to attain a target profit = 28,000 units and Dollar sales to attain a target profit = $952,000
4. Break even Point (units) = 28,500 units, Break even Point (dollars) = $969,000 and Dollar sales to attain a target profit = $1,428,000.
Explanation:
Variable Cost % = 100% - 30%
= 70%
Thus, variable expenses per unit = $34.00 × 70%
= $23.80
Break even Point is the level of activity where a firm makes neither a profit nor a loss.
Break even Point (units) = Fixed Cost / Contribution per unit
= $193,800 / ($34.00 ×30%)
= $193,800 / $10.20
= 19,000 units
Break even Point (dollars) = Fixed Cost / CM Ratio
= $193,800 / 0.30
= $646,000
Unit sales to attain a target profit = (Fixed Cost + Target Profit) / Contribution per unit
= ($193,800 + $91,800) / $10.20
= 28,000
Dollar sales to attain a target profit = (Fixed Cost + Target Profit) / CM Ratio
= ($193,800 + $91,800) / 0.30
= $952,000
When variable expenses reduce by $3.40 per unit.
Break even Point (units) = Fixed Cost / Contribution per unit
= $193,800 / ($34.00 - $23.80 - $3.40 )
= $193,800 / $6.80
= 28,500 units
Break even Point (dollars) = Fixed Cost / CM Ratio
= $193,800 / ($6.80/ $34.00)
= $969,000
Dollar sales to attain a target profit = (Fixed Cost + Target Profit) / CM Ratio
= ($193,800 + $91,800) / 0.20
= $1,428,000
A pension plan that promises employees a fixed annual pension benefit, based on years of service and compensation, is called a(n)The journal entry a company uses to record accrued vacation privileges for its employees at the end of the year is
Answers
Answer:
1. Defined Benefit Plan
2. debit Vacation Pay Expense; credit Vacation Pay Payable
Explanation:
1. With a Defined Benefit Plan, employers promise to pay employees a pension based on factors like years of service and salary. The plan will be sponsored by the employer and will be managed by the company.
2. As the Vacation is an expense, it will need to be debited to an expense account being the Vacation Pay Expense account. It will also be credited to the Vacation Pay Payable to reflect that this is a liability that the company must fulfil.
The risk-free rate is 4.5 percent and the market expected return is 10.8 percent. What is the expected return of a stock that has a beta of 1.30
Answers
Answer:
Expected return = 12.69%
Explanation:
The capital asset pricing model is a risk-based model for estimating the return on a stock.. Here, the return on equity is dependent on the level of reaction of the the equity to changes in the return on a market portfolio. These changes are captured as systematic risk. Systematic risks are those which affect all economic actors in the market, they include factors like changes in interest rate, inflation, etc. The magnitude by which a stock is affected by systematic risk is measured by beta.
Under CAPM,
E(r)= Rf + β(Rm-Rf)
E(r)- expected return, Rf-risk-free rate , β= Beta, Rm= Return on market.
Using this model, we can work out the value of beta as follows:
β-1.30, Rf- 4.5%, Rm = 10.8%
E(r) = 4.5% + 1.30 × (10.8 - 4.5)%= 12.69
Expected return = 12.69%
Discuss the requisite skills a person needs to lead change for a chosen organization. How can the organization’s structure accommodate change?
Answers
Explanation:
Organizational changes can create insecurity in workers, often caused by a lack of sufficient information and fear of the unknown.
Therefore, in the case of any organizational change, however small, it must be properly communicated to all employees, then communication is the essential ability of a leader to promote a transition of some practice or procedure in a rational, objective and clear way.
It is ideal that the leader knows how to communicate the changes using various channels, such as e-mail, panel, meetings, and explain in detail that the change will generate positive results for the work and for the organization, in order to make the workers safe and prepared.
It is also essential to provide adequate training in the event of changes in work, technological innovations, etc. The essential thing is that people management is geared towards the improvement of the employee along with the changes that are necessary and happen in every organization.
In March, Kelly Company had the following unit production costs: materials $11 and conversion costs $8. On March 1, it had no work in process. During March, Kelly transferred out 22,000 units. As of March 31, 4,100 units that were 45% complete as to conversion costs and 100% complete as to materials were in ending work in process.
Required:
a. Compute the total units to be accounted for.
b. Compute the equivalent units of production.
c. Prepare a cost reconciliation schedule, including the costs of materials transferred out and the costs of materials in process.
Answers
Answer:
a. 26,100 units
b. Materials = 26,100 units Conversion Costs = 23,845 units
c.
cost reconciliation schedule
Inputs
Beginning Work In Process $0
Started $477,500
Totals = $477,500
Outputs
Completed and Transferred Out : (22,000 × $19) = $418,000
Ending Work In Process : = $59,500
Materials (4,100 × $11)
Conversion Costs (1,845 × $8)
Totals = $477,500
Explanation:
a.Total units to be accounted for
Units Completed and Transferred Out 22,000
Units in Ending Work In Process 4,100
Total units to be accounted for 26,100
b. Compute the equivalent units of production.
Materials
Units Completed and Transferred Out (22,000 × 100%) = 22,000
Units in Ending Work In Process (4,100 × 100%) = 4,100
Total units to be accounted for = 26,100
Conversion Costs
Units Completed and Transferred Out (22,000 × 100%) = 22,000
Units in Ending Work In Process (4,100 × 45%) = 1,845
Total units to be accounted for = 23,845
Nichols Enterprises has an investment in 31,500 bonds of Elliott Electronics that Nichols accounts for as a security available for sale. Elliott bonds are publicly traded, and The Wall Street Journal quotes a price for those bonds of $10 per bond, but Nichols believes the market has not appreciated the full value of the Elliott bonds and that a more accurate price is $23 per bond. Nichols should carry the Elliott investment on its balance sheet at:
Answers
Answer: $315,000
Explanation:
From the question, we are informed that Nichols Enterprises has an investment in 31,500 bonds of Elliott Electronics that Nichols accounts for as a security available for sale. Elliott bonds are publicly traded, and The Wall Street Journal quotes a price for those bonds of $10 per bond, but Nichols believes the market has not appreciated the full value of the Elliott bonds and that a more accurate price is $23 per bond.
To get the amount that Nichols should carry on the balance sheet as Elliott investment, we multiply the bond invested by the price per bond. This will be:
= 31,500 × $10
= $315,000
You would expect a bond of the U.S. government to pay higher interestrate as compared to a bond of an Eastern European government.
A. True
B. False
Answers
Answer: False
Explanation:
Bond interest is determined in part by the riskiness of the Issuer of the bond. The United States is one of the most trust-worthy countries in the world and this is reflected by the US T-bills being considered a risk-free asset the world over.
The less risky an asset is, the less interest it has to pay as it does not have to compensate its investors for more added risk. A United States Bond is definitely safer than an Eastern European Government bond who are not as developed as the Western Europeans speaking in an unbiased manner. Therefore the US Bond will pay a lower interest relative to a bond of an Eastern European government.
On June 10, 20X8, Playoff Corporation acquired 100 percent of Series Company's common stock. Summarized balance sheet data for the two companies immediately after the stock acquisition are as follows:
Playoff Corp. Series Company
Item Book Value Fair Value
Cash $ 15,000 $ 5,000 $ 5,000
Accounts Receivable 30,000 10,000 10,000
Inventory 80,000 20,000 25,000
Buildings & Equipment (net) 120,000 50,000 70,000
Investment in Series Stock 100,000
Total $ 345,000 $ 85,000 $ 110,000
Accounts Payable $ 25,000 $ 3,000 $ 3,000
Bonds Payable 150,000 25,000 25,000
Common Stock 55,000 20,000
Retained Earnings 115,000 37,000
Total $ 345,000 $ 85,000 $ 28,000
Required:
a. Prepare the consolidating entries required to prepare a consolidated balance sheet immediately after the acquisition of Series Company shares. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)
b. Record the excess value (differential) reclassification entry.
Answers
Answer:
a. Consolidating Journal Entries:
Description Debit Credit
June 10, 20X8:
Cash $5,000
Accounts receivable 10,000
Inventory 25,000
Building & Equipment 70,000
Unrealized Gain on fair value $25,000
Accounts payable 3,000
Bonds payable 25,000
Investment in Series Stock 100,000
Excess Value (differential) 43,000
To record consolidating entries in the consolidated parent.
Goodwill 43,000
Excess Value (differential) 43,000
To record the reclassification of the excess value as Goodwill on acquisition.
Explanation:
a) Summarized balance sheet data
Playoff Corporation Series Company
Item Book Value Fair Value
Cash $ 15,000 $ 5,000 $ 5,000
Accounts Receivable 30,000 10,000 10,000
Inventory 80,000 20,000 25,000
Buildings & Equipment (net) 120,000 50,000 70,000
Investment in Series Stock 100,000
Total $ 345,000 $ 85,000 $ 110,000
Accounts Payable $ 25,000 $ 3,000 $ 3,000
Bonds Payable 150,000 25,000 25,000
Common Stock 55,000 20,000
Retained Earnings 115,000 37,000
Total $ 345,000 $ 85,000 $ 28,000
b) Consolidated entries are made for assets and liabilities acquired of the subsidiary using fair values. An unrealized gain on fair value account is created to account for the differences in fair values. Any excess or differential after consolidation and above the fair values is regarded as Goodwill arising from the acquisition.
Harmony Company sells handminusknit scarves. Each scarf sells for $ 45. The company pays $ 70 to rent vending space for one day. The variable costs are $ 12 per scarf. How many scarves should the company sell each day in order to break even? (Round your answer up to the nearest whole scarf.)
Answers
Answer:
2.12, rounded up to 3
Explanation:
To solve the equation, we first need to set up an equation.
Let x represent the number of scarves. We want one side of the equation to be the amount earned and the other to be the cost
45x is how much they earn since each scarf is $45
70+12x is how much they cost for rent and production
45x=70+12x
Subtract 12x from both sides
33x=70
Divide both sides by 33
x=2.12
It says we should round up so 3 scarves to break even
company's retained earnings have a financing cost associated with them because retained earnings belong to which of the following? a. The common stockholders b. The company's long-term debt holders c. The preferred stockholders d. The company
Answers
Answer:
a. The common stockholders.
Explanation:
A company's retained earnings have a financing cost associated with them because retained earnings belong to the common stockholders.
Retained earnings can be defined as the accumulated profits or net income generated by an organization but are not distributed or given as dividends to the stockholders, rather are reinvested in to the business.
Generally, retained earnings are used to pay off debts, used for capital expenditures and working capitals.
Retained earnings represents the total stockholders' equity reinvested back into the company.
Economist C says all of the following: Expansionary fiscal policy is needed to raise aggregate demand and remove the economy from a recessionary gap. The choice of fiscal policy measures is between ________________ government spending and a _______________ in taxes. Since I am in favor of bigger government, I choose a(n) _________________ in _________________.
Answers
Answer:
The choice of fiscal policy measures is between ___increased_____________ government spending and a ____decrease___________ in taxes. Since I am in favor of bigger government, I choose a(n) ____increase_____________ in ____governmental spending_____________.
Explanation:
Government employ two fiscal measures to drive the economy toward stability. They are taxation and government expenditure. Depending on the desired outcome and the prevailing circumstances, an increase in taxation reduces the propensity to consume, thus fueling increased savings and investments. Increased government expenditure galvanizes the economy to grow and the increased expenditure acts as a stimulus to economic activities. But fiscal policy measures are not used in isolation. They are complemented by monetary policies by the Federal Reserve.
Braynerd Chemicals sells 40 million shares of stock in an SEO—25 million being primary shares issued by the company and 15 million being secondary shares sold by investors in the company. At the time of the sale, Braynerd's stock was selling at $21.00 per share. If the underwriter charges 5% of the gross proceeds as a fee, how much money was raised in the sale?
Answers
Answer: $498.75 million
Explanation:
Of the 40 million shares sold by Braynerd Chemicals, 15 million were sold as secondary shares by investors in the company. The proceeds from these 15 million will therefore not go to the company but to the investors so they are not counted.
Gross total money raised will be;
= 25 million * 21.00
= $525 million
The Underwriter charges 5% of the gross amount as a fee so the Net amount raised will be;
Net Total = 525 * ( 1 - 5%)
Net Total = $498.75 million
Panner, Inc., owns 30 percent of Watkins and applies the equity method. During the current year, Panner buys inventory costing $126,000 and then sells it to Watkins for $180,000. At the end of the year, Watkins still holds only $26,400 of merchandise. What amount of gross profit must Panner defer in reporting this investment using the equity method
Answers
Answer:
The gross profit that will be deferred is $2376
Explanation:
The cost of inventory = $126000
Selling price of inventory (revenue) = $180000
The remaining inventory with Watkins = $26400
Gross profit percentage = (revenue – cost) / revenue
Gross profit percentage = (180000 – 126000) / 180000 = 0.3 or 30%
Remaining value = $26400 × 30% = 7920
Ownership = 7920 × 30% = $2376
The gross profit that will be deferred is $2376
g If the velocity of money triples, while real GDP and money supply remain unchanged, in the long run, the price level:
Answers
Answer:
if velocity triples, then in the long run, price would triple
Explanation:
According to the quantity theory of money
velocity x money supply = output x price
if velocity triples, then in the long run, price would triple
Baxter Company produces Frisbees using a threeminusstep sequential process that includes molding, coloring and finishing. At what stage would the sets be allocated Manufacturing Overhead?
Answers
The options are:
A) When the Frisbees are in WIP InventoryWIP Inventory-Molding
B) When the Frisbees are in WIP InventoryWIP Inventory-Finishing
C) When the Frisbees are in WIP InventoryWIP Inventory-Coloring
D) All of the above
Answer:
D) All of the above
Explanation:
Manufacturing overhead is defined as all manufacturing cost incurred in producing a good that cannot be traced directly to the product in an economically feasible way.
For example processes in Work In Process stage of manufacturing such as labour and utility expenses are manufacturing overhead costs. Work in process is the manufacturing stage where goods are converted from raw goods to partially finished goods.
So all the options given which are on the WIP are correct.
Review the Inquirer to determine Chester’s current strategy. Where will they seek a competitive advantage? From the following list, select the top five sources of competitive advantage that Chester would be most likely to pursue.
Select 5:
a) Increase demand through TQM initiatives
b) Offer attractive credit terms
c) Seek excellent product designs, high awareness, and high accessibility
d) Add additional products
e) Seek the lowest price in their target market while maintaining a competitive contribution margin
f) Accept lower plant utilization and higher capacities to insure sufficient capacity is available to meet demand
g) Reduce labor costs through training and recruitment
h) Seek high automation levels
i) Seek high plant utilization, even if it risks occasional small stockouts
j) Reduce cost of goods through TQM initiatives
Answers
Answer:
a) Increase demand through TQM initiatives
b) Offer attractive credit terms
c) Seek excellent product designs, high awareness, and high accessibility
e) Seek the lowest price in their target market while maintaining a competitive contribution margin
g) Reduce labor costs through training and recruitment
Explanation:
Chester by pursuing the top five targets listed above would Have a competitive advantage among it's competitors. First their total quality management strategy(TQM) would increase customer satisfaction and spiral their demand growth. Secondly attractive credit terms would increase demand by encouraging customers that require credit facilities for their purchases. Excellent product designs and more awareness would increase product quality while also bring more awareness to the business. Reducing price would also increase demand and since they'd be able to keep a competitive contribution margin they would be able to stay ahead in the market. Lastly reduction in labour costs will have a ripple effect on the whole business as costs will be reduced and cost of goods will be reduced to ensure lower prices and high demand