Answer:
The correct answer is the option A: Qe decreases; Pe increases.
Explanation:
To begin with, the situation in where the supply of a certain product decreases due to the decrease in its production will implicate that the equilibrium in the market will be changed, so what will happen is that the the supply curve will shift to the left and the price will increase because now there is less of the good in the market and its value is higher because of that and with that the quantity will decrease as well because the price has risen.
The capital accounts of Hawk and Martin have balances of $160,000 and $140,000, respectively, on January 1, the beginning of the current fiscal year. On April 10, Hawk invested an additional $10,000. During the year, Hawk and Martin withdrew $86,000 and $68,000, respectively, and net income for the year was $258,000. The articles of partnership make no reference to the division of net income. Based on this information, the statement of partners' equity would show what amount in the capital account for Martin on December 31?
Answer:
$213,000
Explanation:
We will figure out first Hawk's share of profit to reach the capital account is shown below:-
Hawk's share of profit = $258,000 ÷ 2
= $129,000
Capital account of Hawk as on December 31 = Opening Balance + Capital Introduced + Profit Share - Drawings
= $160,000 + $10,000 + $129,000 - $86,000
= $213,000
So, we have got the answer after solve the below formula.
A company is obligated to pay its creditors $6,100 at the end of the year. If the value of the company's assets equals $5,800 at that time, what is the value of shareholders' equity
Answer:
The value of shareholders' equity is -$300
Explanation:
Shareholders' equity is the corporation's owners' residual claim on assets after debts have been paid.
Total assets= Total liability + shareholders' equity
Shareholders' equity = Total assets - Total liability
Shareholders' equity = $5,800 - $6,100
Shareholders' equity = -$300
Chutes & Co. has interest expense of $ 1.25 million and an operating margin of 10.8 % on total sales of $ 30.7 million. What is Chutes' interest coverage ratio?
Answer:
2.7 times
Explanation:
Chutes and co. has an interest expense of 1.25 million
Operating margin of 10.8%
Total sales of 30.7 million
The first step is to calculate the operating income
Operating income= Sales×operating margin
= $30,700,000×10.8/100
= $30,700,000×0.108
= $3,315,600
Therefore, the interest coverage ratio can be calculated as follows
Interest coverage ratio= Operating income/Interest expense
= $3,315,600/$1,250,000
= 2.65
= 2.7 times
Hence Chutes' interest coverage ratio is 2.7 times
Dusty would like to buy a new car in six years. He currently has $13,500 saved. He’s considering buying a car for around $17,500 but would like to add a Turbo engine to increase the car’s performance. This would increase the price of the car to $21,500.If dusty can earn 9% interest compounded anually will he be able to get a car with a turbo engine in six years?
Answer:
yes he will
Explanation:
with a compund intrest of 9 percent and he didnt put in any money after the 13,500 he will have $22,640.85 in 6 years, so now he can go buy his car and also buy a new exhaust system
Answer: Yes he can
with a compound interest of 9 percent and he didn't put in any money after the $13,500 he will have $22,640.85 in 6 years, so now he can go buy his car and also buy with a turbo engine.
What is an example of compound interest?Compound interest definition
When you add money to a savings account or a similar account, you receive interest based on the amount that you deposited. For example, if you deposit $1,000 in an account that pays 1 percent annual interest, you'd earn $10 in interest after a year.
How do we calculate compound interest?
Compound interest, or 'interest on interest', is calculated using the compound interest formula. The formula for compound interest is A = P(1 + r/n)^nt, where P is the principal balance, r is the interest rate, n is the number of times interest is compounded per time period and t is the number of time periods.
Learn more about Compound Interest at https://brainly.com/question/24924853
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A process capability index of 2 means that the upper and lower specification limits of the process are six standard deviations above and below the mean respectively. True or False? Eliminating variations is always possible. True or False?
Answer:
True
Explanation:
The formula to compute the process capability index is shown below:
Cpk = minimum [(Mean - LSL) ÷ 3σ , (USL – Mean) ÷ 3σ]
Now
If Cpk = 2,
so
(Mean - LSL) ÷ 3σ = 2 or (USL – Mean) ÷ 3σ = 2
Mean – LSL = 6σ or USL – Mean = 6σ
Therefore, if Cpk = 2, the process's USL or LSL is six standard deviations (6σ) up or down mean
Hence, the given statement is true
Carlsbad Corporation's sales are expected to increase from $5 million in 2016 to $6 million in 2017, or by 20%. Its assets totaled $4 million at the end of 2016. Carlsbad is at full capacity, so its assets must grow in proportion to projected sales. At the end of 2016, current liabilities are $1 million, consisting of $250,000 of accounts payable, $500,000 of notes payable, and $250,000 of accrued liabilities. Its profit margin is forecasted to be 6%, and the forecasted retention ratio is 45%. Use the AFN equation to forecast the additional funds Carlsbad will need for the coming year. Write out your answer completely. For example, 5 million should be entered as 5,000,000. Round your answer to the nearest cent.
Answer:
$538,000
Explanation:
EFN = [(assets/sales) x ($ Δ sales)] - [(liabilities/sales) x ($ Δ sales)] - [profit margin x forecasted sales x (1 - dividend payout)]
current sales = $5,000,000
change in sales = $1,000,000
assets $4,000,000
profit margin = 6%
1 - dividend payout = 45%
current liabilities that change in proportion to sales = $500,000
forecasted sales = $6,000,000
EFN = [($4,000,000/$5,000,000) x ($1,000,000)] - [($500,000/$5,000,000) x ($1,000,000)] - (6% x $6,000,000 x 0.45)
EFN = $800,000 - $100,000 - $162,000 = $538,000
Taco Loco is unsure whether the amount of beef that their computer thinks is in inventory is correct. What is the range in values for beef inventory that would not affect the optimal product mix? A) 26 to 38.22 pounds B) 27.55 to 28.45 pounds C) 17.78 to 30 pounds D) 12.22 to 28 pounds
Answer:
C: 17.78-30 pounds
Big-Mouth Frog Corporation had revenues of $200,000, expenses of $120,000, and dividends of $30,000. When Income Summary is closed to Retained Earnings, the amount of the debit or credit to Retained Earnings is a Group of answer choices debit of $50,000. debit of $80,000. credit of $50,000. credit of $80,000.
Answer:
Credit of $80,000
Explanation:
Big-Mouth Frog Corporation Calculation for Retained earnings
Using this formula
Retained earnings =Revenue- Expenses
Where,
Revenue =$200,000
Expenses =$180,000
Let plug in the formula
Retained earnings =$200,000-$180,000
Retained earnings =$80,000
Therefore when the Income Summary is closed to Retained Earnings, the amount of the credit to Retained Earnings will be $80,000
The producer of a downloadable antivirus software program spends exactly $2 comma 650 comma 000 producing the first copy and incurring various costs required to make the software"user-friendly." The firm can produce and distribute additional copies at a per-unit cost of $1.00. If the company sold as many copies as consumers wished to purchase at a price of $1.00 percopy, it would sell 425 comma 000 copies. If the company maximizes its economic profits in the short-run, it sells 225 comma 000 copies at a price of $40. Finally, the company earns zero economic profits when it sells 275 comma 000 copies.What are the firm's economic profits (or losses) if it sells 425 comma 000 copies of the antivirus software program at a $1.00 price per copy? $ -2,650,000 .What are the maximum economic profits that the firm can earn in the short run? $ 6,125,000 . What is marginal revenue when the firm maximizes its short-run economic profits? $ 1.00 .In the long run, after entry of competing firms, to the nearest dollar, and including the correct sign, what amount of economic profits will this firm earn? $ 0 0.
Answer:
What are the firm's economic profits (or losses) if it sells 425 comma 000 copies of the antivirus software program at a $1.00 price per copy?
economic profit = revenue - total costs = $425,000 - $3,075,000 = ($2,650,000)What are the maximum economic profits that the firm can earn in the short run?
maximum economic profit = (225,000 x $40) - $2,875,000 = $6,125,000What is marginal revenue when the firm maximizes its short-run economic profits?
$40Marginal revenue refers to the revenue generated by selling 1 more unit.
In the long run, after entry of competing firms, to the nearest dollar, and including the correct sign, what amount of economic profits will this firm earn?
$0On the long run, economic profit will always = 0
Explanation:
price per copy units sold total revenue
$1 425,000 $425,000
$40 225,000 $9,000,000
total cost to produce and sell 425,000 copies = (425,000 x $1) + $2,650,000 = $3,075,000
total cost to produce and sell 275,000 copies = (275,000 x $1) + $2,650,000 = $2,925,000
total cost to produce and sell 225,000 copies = (225,000 x $1) + $2,650,000 = $2,875,000
This year, Nancy, a single taxpayer, paid $12,300 of real estate taxes on her personal residence and $7,500 of state income taxes. Assuming Nancy itemizes her deductions, what amout can she deduct for taxes this year
Answer:
$12,500
Explanation:
Nancy can deduct both her real estate taxes and state income taxes from her gross income. This way, she will end up paying less federal income taxes. The exact amount that she saves depends on her tax bracket, which is not given.
Assuming Nancy doesn't take the standard deduction, she can deduct 100% of her state income taxes ($7,500) and up to $5,000 in real estate taxes since she is a single taxpayer. Her total deduction on these two items will be $12,500.
Below are amounts (in millions) from three companies' annual reports. Beginning Accounts Receivable Ending Accounts Receivable Net SalesWalCo $1,795 $2,742 $320,427 TarMart 6,066 6,594 65,878 CostGet 609 645 66,963 Required:1. Calculate the receivables turnover ratio and the average collection period for WalCo, TarMart and CostGet. (Do not round intermediate calculations. Enter your answers in millions. Round your "Average accounts receivable" and "Receivables turnover ratio" answers to one decimal place.)2.Which company appears most efficient in collecting cash from sales?a) WalCob) TarMartc) CostGetWalCo TarMart CostGet WalCo TarMart CostGet Net sales Receivables Turnover Ratio Average accounts receivable Receivables turnover ratio times times times Average Collection Period Average collection period days days days
Answer:
1. Calculate the receivables turnover ratio and the average collection period for WalCo, TarMart and CostGet.
WalCo = 70.63TarMart = 10.41CostGet = 106.802.Which company appears most efficient in collecting cash from sales?
CostGet because its average collection period is shortestExplanation:
Beginning Accounts Ending Accounts Net Sales
Receivable Receivable
WalCo $1,795 $2,742 $320,427
TarMart $6,066 $6,594 $65,878
CostGet $609 $645 $66,963
accounts receivable turnover ratio = net sales / average accounts receivable
WalCo = $320,427 / [($1,795 + $2,742)/2] = 70.63
TarMart = $65,878 / [($6,066 + $6,594)/2] = 10.41
CostGet = $66,963 / [($609 + $645)/2] = 106.80
average collection period = 365 / accounts receivable turnover ratio
WalCo = 365 / 70.63 = 5.17 days
TarMart = 365 / 10.41 = 35.06 days
CostGet = 365 / 106.80 = 3.42 days
Determine which type of merger has occurred for this scenario. GrillerTech manufactures propane grills for cooking. It wants to form a merger with Tinseltech, a party favor manufacturing company. This would be a __________ merger.
Answer:
Vertical merger
Explanation:
A vertical merger occurs between firms in the same industry but they are usually in different stages of the supply chain.
In this case, Tinseltech wants to merge with a company that produces raw materials needed by Tinseltech
I hope my answer helps you
Answer:
vertical
Explanation:
A vertical merger is when two or more companies that are part of the same industry but that have different products in the supply chain merge. According to that, the answer is that this would be a vertical merger because the two companies have products that are used in the same industry and the merge allows them to increase the synergies and have control of the supply chain.
Some studies done by economists have found that the original inventor receives _________________________________________________ from innovations, while other businesses and new product users receive the rest of the benefit.
Answer:
one-third to one-half of the total economic benefits
Explanation:
It has been found that although most inventors put in a lot of time, money, energy, and intellect into discovering new products, they most times do not make much gains from their discoveries. The rate at which other competing firms copy the new innovations, make it such that the innovative company might lose the sole right to market the product and make any gains from the sale.
Economists from their own research have also found that the original inventor just makes one-third to one-half of the total economic benefits from the new product, while other businesses receive the remaining benefits because of their ability to copy the original. Sometimes the innovators go through legal battles to secure patent rights, and even after this, they may not make enough money to cover all the expenses.
Peroni Corporation sold a parcel of land valued at $300,000. Its basis in the land was $250,000. For the land, Peroni received $75,000 in cash in the current year and a note providing Peroni with $225,000 in the subsequent year. What is Peroni's recognized gain in the current and subsequent year, respectively
Answer:
Peroni's recognized gain in the current and subsequent year is $12,502 and $37,507
Explanation:
In order to calculate Peroni's recognized gain in the current and subsequent year we would have to calculate first the Gross profit on sale with the following formula:
Gross profit on sale=(parcel of land sold-land basis)/parcel of land sold
Gross profit on sale=($300,000-$250,000)/$300,000
Gross profit on sale=16.67%
Hence, Peroni's recognized gain in the current and subsequent year would be as follows:
current year=amount received in cash*Gross profit on sale
current year=$75,000*16.67%
current year=$12,502
subsequent year=$225,000*16.67%
subsequent year=$37,507
Peroni's recognized gain in the current and subsequent year is $12,502 and $37,507
2014 ending inventory was overstated by $25,000, but it was too late to correct the financial statements. Which of the following describes the effect of the inventory error on the 2014 financial statements?A. Net income and stockholders' equity are both understated.
B. Net income is understated and stockholders' equity is correct.
C. Net income and stockholders' equity are both overstated.
D. Net income and stockholders' equity are both unaffected.
Answer:
C. Net income and stockholders' equity are both overstated.
Explanation:
In the income statement , ending inventory is deducted from the addition of the beginning inventory and net purchases to arrive at the cost of goods sold. Therefore, the cost of goods can be stated as an equation stated as follows:
Cost of goods sold = Beginning inventory + Net purchases - Ending inventory
From the above equation, it can be observed that if the ending inventory is overstated, cost of goods sold will be understated by that amount.
Since gross income is determined by deducting cost of goods sold from the net sales, an understated cost of goods sold will result in an overstated gross income and subsequently overstated net income.
Since net income is one of the components of the stockholders' equity, an overstated net income will leads to an overstated stockholders' equity.
Therefore, the correct option is C. Net income and stockholders' equity are both overstated.
Nieman Company purchased merchandise on account from Springhill Company for $5,400, terms 1/10, n/30. Nieman returned merchandise with an invoice amount of $900 and received full credit. a. If Nieman Company pays the invoice within the discount period, what is the amount of cash required for the payment? If required, round the answer to the nearest dollar.
Answer:
The amount of cash required for the payment is $4,455.
Explanation:
When Nieman Company purchased merchandise the entries will be :
Merchandise $5,400 (debit)
Account Payable : Springhill Company $5,400 (credit)
When Nieman Company returned some merchandise and received full credit, the entries will be:
Account Payable : Springhill Company $900 (debit)
Merchandise $900 (credit)
When Nieman Company finally pays the invoice within the discount period.
1. They are granted a cash discount of 1%
2. Pay 99% of amount owing less the credit previously granted on returned merchandise.
Entries will be :
Account Payable : Springhill Company $4,500 (debit)
Discount received $45 (credit)
Cash $4,455 (credit)
Conclusion :
The amount of cash required for the payment is $4,455.
An office building owned by Milo was destroyed by Hurricane Mel on September 25, Year 4. On October 2, Year 4, the President of the United States declared the area where the office building was located a federal disaster area. Milo received settlement of his insurance claim for the destruction of his building on January 2, Year 5. In order to qualify for nonrecognition of gain on this involuntary conversion, what is the last date for Milo to acquire qualified replacement property
Answer:
December 31, year 9
Explanation:
Here, we want to state that date that is possible for Milo to acquire qualified replacement property.
In order to avoid being taxed on a gain resulting from an involuntary conversion, the property subject to the conversion must be replaced within a specified time, measured from the end of the calendar year in which the proceeds are received.
Generally, the period is 2 years, but it is 3 years when the involuntary conversion results from government condemnation or eminent domain and is extended to 4 years when the loss is in connection with a declared federal disaster area.
We are told from the question that Milo received the recovery on January 2, Year 5, the property would have to be replaced within 4 years from the end of Year 5 or by December 31, Year 9
CoolBreeze Manufacturing produces a single product, a tabletop fan. They reported the following information from their operations last period:___________.
Cost of Direct Materials used in production: $50,000
Cost of Direct Labor wages: $37,500
Variable Manufacturing Overhead: $25,000
Fixed Manufacturing Overhead: $125,000
Total units produced: 10,000
Under absorption costing what was the per-unit cost of the units produced?
a. None of the above
b. $23.75
c. $12.50
d. $11.25
e. $8.75
Answer:
The correct answer is B.
Explanation:
Giving the following information:
Cost of Direct Materials used in production: $50,000
Cost of Direct Labor wages: $37,500
Variable Manufacturing Overhead: $25,000
Fixed Manufacturing Overhead: $125,000
Total units produced: 10,000
The absorption costing method includes all costs related to production, both fixed and variable. The unit product cost is calculated using direct material, direct labor, and total unitary manufacturing overhead.
First, we need to calculate the total cost:
Total cost= 50,000 + 37,500 + 25,000 + 125,000
Total cost= $237,500
Now, the unitary cost:
Unitary cost= 237,500/10,000= $23.75
A publishing company sells 450 comma 000 copies of certain books each year. It costs the company $ 1 to store each book for a year. Each time it must print additional copies, it costs the company $ 1 comma 000 to set up the presses. How many books should the company produce during each printing in order to minimize its total storage and setup costs?
Answer:
The company produce 30,000 books during each printing in order to minimize its total storage and setup costs.
Explanation:
The quantity that minimizes total storage and setup costs is known as Economic Order Quantity, in this case it is called the Optimum Batch Quantity.
Optimum Batch Quantity = √((2 × Annual demand × Setup cost per process) / Holding Cost per book.)
= √( (2 × 450,000 × $1,000) / $1)
= 30,000
Conclusion :
The company produce 30,000 books during each printing in order to minimize its total storage and setup costs.
imhoff company leases a new building form noble construction, inc. The present value of the lease payments is $700000. The lease is a finance lease. Prepare the journal entry that the lesse should make to record this transaction.
Answer:
Dr right-of-use asset $700,000
Cr lease liability $700,000
Explanation:
The company upon entering into the finance lease would have to show the lease as an asset(right-of-use asset) as well as the lease liability(present value of lease obligations owed to the lessor).
As a result, the company would debit right-of-use asset with $700,000 while lease liability is also credited with the same amount
Examples of cash equivalents include all of the following except:
a. U.S. Treasury bills.
b. notes issued by major corporations (referred to as commercial paper).
c. currency and coins.
d. long-term notes receivable.
Answer:
d. Long-term Notes Receivable.
Explanation:
Cash and cash equivalent are those financial instruments which can be converted into cash easily and within a short period of time. Cash and cash equivalent includes the treasury bills, commercial papers( notes issued by major corporation), bills, currencies and coins but it does not include the long term notes receivable.
All the equivalents are easy to convert to cash easily except the Long term notes receivables because it requires to wait for some long period before such note can be converted into money.
The number of support staff needed to handle the volume of incidents in a help desk operation is a similar problem to the number of cashiers a grocery store needs to keep checkout lines from getting too long.
a. True
b. False
Answer:
a. True
Explanation:
The number of support staff needed to handle the volume of incidents in a help desk operation depends on the amount of calls that are received at different times and according to that a number of staff is defined to handle the calls without having customers waiting for a long time on the phone which is the same that happens with the number cashiers at a grocery store which is determined based on the amount of people in the store to avoid long lines and we can see that the stores have more cash registers open when they are full of people.
Billy Thornton borrowed $20,000 at a rate of 7.25%, simple interest, with interest paid at the end of each month. The bank uses a 360-day year. How much interest would Billy have to pay in a 30-day month
Answer:
Interest for a 30 day month = $120.83
Explanation:
Interest rate rate is the price paid by a borrower for the use of money and the return earned by a lender for postponing his consumption in favour of investment.
Interest is computed in two ways; Simple interest and compound interest
Simple interest: This is the interest paid on the principal invested or borrowed. To calculate simple interest, we use the formula below:
Annual Simple interest= Principal × interest Rate (%) × Time.
Monthly simple interest =Principal ×interest Rate (%)× 30/360
= 20,000 × 7.25% × 30/360= 120.833
Interest for a 30 day month = $120.83
The US dollar/euro exchange rate is $1.6/€ while the Canadian dollar/US dollar exchange rate is C$1.25/$. You also observe that the actual euro/Canadian dollar cross exchange rate is €.65/C$. Find the triangular arbitrage profit (in USD) available to someone that has access to $1,000,000. Round intermediate steps to four decimals and your final answer to two decimals. Do not use the dollar sign when entering your answer.
Answer:
$300,000
Explanation:
I have $1,000,000 which I can use to buy C$1,250,000 (C$ = $1,000,000 x 1.25). Then I would use my C$1,250,000 to buy €812,500 (€ = C$1,250,000 x 0.65). Finally, if you use your €812,500 you can purchase $1,300,000 ($ = €812,500 x 1.6).
We started with $1,000,000 and ended up with $1,300,000 by purchasing Canadian dollars first and then Euros.
What is the market value of a stock that paid a dividend of $3.80 last year if the dividend is increasing at 10% annually and the required rate of return on the stock is 20%
Answer:
The market value of the stock is $41.8
Explanation:
Div 1 = Div 0 (1+r)
=3.80 (1+0.10)
=3.80(1.10)
=4.18
Market value of the stock= Dividend 1 / (r-g)
= 4.18 / 0.2 - 0.1
= 4.18 / 0.1
= $41.8
The market value of the stock is $41.8
A stock has an expected return of 10.2 percent, the risk-free rate is 3.9 percent, and the market risk premium is 7.2 percent. What must the beta of this stock be? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)
Answer:
Beta= 0.88
Explanation:
The Capital Asset pricing Model (CAPM) can be used to determined the beta.
According to the Capital Asset pricing Model 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. The magnitude by which a stock is affected by systematic risk is measured by beta.
Under CAPM, Ke= Rf + β(Rm-Rf)
Rf-risk-free rate (treasury bill rate), β= Beta, Rm= Return on market.
Ke- expected return.
Note that (Rm-Rf) is known as equity risk premium
Using this model,
10.2%= 3.9% + β× (7.2%)
0.102=0.039 + 0.072β
collect like terms
0.072β = 0.102 -0.039
0.072β = 0.063
Divide both sides by 0.072
β = 0.063 /0.072
β= 0.875
Beta= 0.88
The following is an example of the reasoning of a rule utilitarian:
"If the practice of stealing is bad, then one ought not to steal now, even if in this case to steal would actually bring about better consequences."
a. True
b. False
Answer:
The correct answer is the option B: False.
Explanation:
To begin with, the concept of "Rule Utilitarism" refers to a type of utilitarism in where the main characteristic is in the belief that an action is right when it conforms to a rule that leads to the greatest good. Therefore that under this type of ideology, the utilitarians believe that an action would be right when the amount of good that it brings is greater than the action itself. And that is why that for an utilitarian to steal would not be wrong in the case that a greater good would come afterwards for the majority, so that means, better consequences.
The IRS reports that the mean refund for a particular group of taxpayers was $1,600. The distribution of tax refunds follows a normal distribution with a standard deviation of $850.
Required:
a. What percentage of the refunds are between $1,600 and $2,000?
b. What percentage of the refunds are between $900 and $2,000?
c. What percentage of the refunds are between $1,800 and $2,000?
d. Ninety-five percent of the refunds are for less than what amount?
Answer:
¡saiud Vlaso Bouiid Poolyau as Io Bkaui viaus Zyaau¿
Explanation:
?nuaity Nopla?¿
Consider two bonds, a 3-year bond paying an annual coupon of 6.90% and a 10-year bond also with an annual coupon of 6.90%. Both currently sell at a face value of $1,000. Now suppose interest rates rise to 12%.
Required:
a. What is the new price of the 3-year bonds?
b. What is the new price of the 10-year bonds?
Answer:
a.
$877.51
b.
$711.84
Explanation:
Price of the bond is the present value of all cash flows of the bond. These cash flows include the coupon payment and the maturity payment of the bond. Both of these cash flows discounted and added to calculate the value of the bond.
According to given data
Face value of the bond is $1,000
Coupon payment = C = $1,000 x 6.9% = $69 annually
Market Rate = 12% annually
Price of the bond is calculated by following formula:
Price of the Bond = C x [ ( 1 - ( 1 + r )^-n ) / r ] + [ F / ( 1 + r )^n ]
a.
Numbers of period = 3
Placing values in the formula
Price of the Bond = $69 x [ ( 1 - ( 1 + 12% )^-3 ) / 12% ] + [ $1,000 / ( 1 + 12% )^3 ]
Price of the Bond = $165.73 + $711.78
Price of the Bond = $877.51
b.
Numbers of period = 10
Placing values in the formula
Price of the Bond = $69 x [ ( 1 - ( 1 + 12% )^-10 ) / 12% ] + [ $1,000 / ( 1 + 12% )^10 ]
Price of the Bond = $389.87 + 321.97
Price of the Bond = $711.84
Waterway Company applies manufacturing overhead to jobs on the basis of machine hours used. Overhead costs are estimated to total $346,775 for the year, and machine usage is estimated at 126,100 hours. For the year, $369,500 of overhead costs are incurred and 130,800 hours are used.
Manufacturing overhead rate $ per machine hour
Manufacturing Overhead $
Prepare the adjusting entry to assign the under- or overapplied overhead for the year to cost of goods sold.
Answer:
Waterway Company
Journal entry:
Debit Cost of goods sold $9,800
Credit Manufacturing overhead expense $9,800
To assign the underapplied overhead to cost of goods sold.
Explanation:
a) Data and calculations:
Estimated overhead costs = $346,775
Estimated machine usage = 126,100 hours
Overhead rate applied = $346,775/126,100 = $2.75 per hour
Actual overhead costs = $369,500
Actual machine usage = 130,800 hours
Actual overhead rate = $369,500/130,800 = $2.82
Overhead was underapplied by the difference between actual overhead costs applied and actual overhead.
Actual overhead applied = $2.75 x 130,800 = $359,700
Actual overhead costs = $369,500
Difference (underapplied) is $9,800
When the overhead is underapplied or overapplied because of the rate used based on actual usage, the underapplied overhead is a debit or credit to the cost of goods sold respectively. While underapplied overhead increases the cost of goods sold, overapplied reduces the cost of goods sold by the amount of under- or over-application.