Answer:
1. Reorganization
Explanation:
The reorganization is the position where the firm wants to restructure its business so that the company could able to improve its profitability by making good decisions, proper working in the organization, resource utilization, etc
While at the same time the liquidation is the winding up of the company or shut down of the company due to high losses suffered in the business
Therefore in the given case, since the Hawaiian telecom took an action for better off the balancing sheet by decreasing debt that represents the reorganization example
Adjusting Entry for Merchandise Inventory Shrinkage Paragon Tire Co.'s perpetual inventory records indicate that $787,690 of merchandise should be on hand on March 31, 2019. The physical inventory indicates that $764,060 of merchandise is actually on hand. Journalize the adjusting entry for the normal inventory shrinkage for Paragon Tire Co. for the year ended March 31, 2019.
Answer:
Dr. Cost of Goods Sold $23,630
Cr. Inventory $23,630
Explanation:
The difference in the physical inventory available and the inventory in the accounting records should be adjusted and recorded. The cost of Inventory loss should be adjusted in the cost of goods sold account and Inventory level in the system should be reconciled with the physical count of the inventory.
Inventory according to record = $787,690
Physical Inventory = $764,060
Adjustment = $787,690 - $764,060 = $23,630
Nathan’s Athletic Apparel has 2,000 shares of 5%, $100 par value preferred stock the company issued at the beginning of 2017. All remaining shares are common stock. The company was not able to pay dividends in 2017, but plans to pay dividends of $22,000 in 2018.Required: 1. & 2. Assuming the preferred stock is cumulative and noncumulative, how much of the $22,000 dividend will be paid to preferred stockholders and how much will be paid to common stockholders in 2018? Cumlative Non Cumlativepreferred Dividends for 2018 preferred Dividends in arrears for 2017 Remaining Dividends to common stockholders Total Dividens:
Answer:
1.
Preferred stock dividends to be paid in 2018 = $20000
Common stock dividends to be paid in 2018 = $2000
2.
Preferred stock dividends to be paid in 2018 = $10000
Common stock dividends to be paid in 2018 = $12000
Explanation:
The preferred stock dividends are always paid before the common stock dividends.
Cumulative preferred stock is the stock which accumulates or accrues dividends if the dividends are partially paid or not paid at all in a particular year. These dividends are accrued and are required to be paid by the company whenever it declares dividends.
Non cumulative preferred stock does not accrue or accumulates dividends. Thus, if dividends are not paid in a particular year, the company has no obligation to pay these dividends ever in the future.
1.
If the preferred stock is assumed to be cumulative, then the dividends in arrears for 2017 will be paid in 2018 along with dividends for 2018 on preferred stock before paying the common stock holders.
Preferred stock dividend per year = 2000 * 100 * 0.05
Preferred stock dividend per year = $10000
Preferred stock dividends to be paid in 2018 = 10000 + 10000 = $20000
Common stock dividends to be paid in 2018 = 22000 - 20000 = $2000
2.
If the preferred stock is assumed to be non cumulative, then the dividends in arrears for 2017 will not be paid in 2018. Only the dividends for 2018 on preferred stock will be paid before paying the common stock holders.
Preferred stock dividend per year = 2000 * 100 * 0.05
Preferred stock dividend per year = $10000
Preferred stock dividends to be paid in 2018 = $10000
Common stock dividends to be paid in 2018 = 22000 - 10000 = $12000
Consider the following transactions for Partytime Toys:
October 8 Partytime Toys buys $141,800 worth of MegoBloack toys on account with credit terms of 2/10, n/30
October 11 Partytime Toys returns $14,100 of the merchandise to MegoBlock due to damage during shipment.
October 15 Partytime Toys paid the amount due, less the return and discount.
Required
1. Journalize the purchase transactions. Explanations are not required.
2. In the final analysis, how much did the inventory cost Partytime Toys?
Answer:
1. Journalize the entries:
October 8:
Dr Purchases $141,800
Cr Account Payable $141,800
October 11:
Dr Accounts Payable $ 14,100
Cr Purchase Return $ 14.100
October 15:
Dr Accounts Payable $114,930 (141,800-14,100)*90%
Cr Cash $ 114,930.
2. The inventory cost $114,930 to Party Time Toys.
Explanation:
First, we have to Journalize the entries;
October 8:
Dr. Purchases $141,800
Cr Account Payable $141,800
October 11:
Dr Accounts Payable $ 14,100
Cr Purchase Return $ 14.100
October 15:
Dr Accounts Payable $114,930 (141,800-14,100)*90%
Cr Cash $ 114,930.
so, The inventory cost $114,930 to Party Time Toys.
What is a Transaction?A transaction is a business event that has a monetary impact on an entity's financial statements and is recorded as an entry in its accounting records. Examples of transactions are as follows:
Paying a supplier for services rendered or goods delivered.
What is a transaction in a bank?A bank transaction is any money that moves in or out of your bank account. Types of bank transactions include cash withdrawals or deposits, checks, online payments, debit card charges, wire transfers, and loan payments.
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In a persuasive message, an effective introduction of a product, service, or idea: a. describes an anecdote that is likely familiar to the audience. b. is written using a deductive outline. c. is cohesive and action centered. d. uses abstract nouns and passive verbs.
Answer:
d. uses abstract nouns and passive verbs.
Explanation:
A persuasive text can be defined as one written in order to convince someone of something. This text is prepared using some specific techniques and structures to achieve the objective. In a persuasive marketing text, techniques are used that affirm and support a favorable position to convince consumers to purchase a product, for example, supported by facts, evidence, statistics, etc.
Therefore, one of the techniques used in the introduction for a persuasive text to be effective, is to carry out an indirect approach, using resources from abstract nouns and passive verbs, which convey states, qualities, actions and feelings, so that the text is understood generating reciprocity, empathy , commitment, scarcity and several factors that make the consumer be encouraged to purchase a certain product or service.
Part E14 is used by M Corporation to make one of its products. A total of 22,000 units of this part are produced and used every year. The company's Accounting Department reports the following costs of producing the part at this level of activity: Per Unit Direct materials$4.70 Direct labor$9.30 Variable manufacturing overhead$9.80 Supervisor's salary$5.20 Depreciation of special equipment$3.60 Allocated general overhead$8.80 An outside supplier has offered to make the part and sell it to the company for $31.90 each. If this offer is accepted, the supervisor's salary and all of the variable costs, including the direct labor, can be avoided. The special equipment used to make the part was purchased many years ago and has no salvage value or other use. The allocated general overhead represents fixed costs of the entire company, none of which would be avoided if the part were purchased instead of produced internally. In addition, the space used to make part E14 could be used to make more of one of the company's other products, generating an additional segment margin of $34,000 per year for that product. The annual financial advantage (disadvantage) for the company as a result of buying part E14 from the outside supplier should be:
Answer:
(29,800)
Explanation:
The computation of the financial advantage or disadvantage is shown below:
As we know that
Financial disadvantage = Cost of making - Cost of buying
where,
Cost of making is
= [(Direct material per unit + direct labor per unit + variable manufacturing overhead per unit) × units produced] + additional segment margin
= [($4.7 + $9.30 + $9.80 + $5.20) × 22,000 units] + $34,000
= ($29 × 22,000 units ) + $34,000
= $672,000
And, the Cost of buying is
= Units produced × offered price
= 22,000 units × $31.90
= $701,800
So,
Financial disadvantage is
= Cost of making - Cost of buying
= $672,000 - $701,800
= (29,800)
g Using the Multiplier Model (and assuming the price level is fixed), if the economy is operating at $3,000 billion and the government policymakers have determined that the target level of income to reach is $3,500 billion, by how much must they increase government spending by to eliminate the recessionary gap if the mpe
Answer: a. $200 billion
Explanation:
The Multiplier Effect (MPE) is used to calculate the Multiplier which then shows how much the GDP of the country will increase if a certain amount of money is induced into it.
The formula is;
Multiplier = 1 / ( 1 - MPE)
= 1 / ( 1 - 0.6)
= 2.5
The economy is now operating at $3,000 billion but they would want it to operate at $3,500 billion.
The difference of $500 billion is the amount that policy makers would like to add to the economy.
The Multiplier of 2.5 means that for every $1 spent, $2.5 will be added to the economy.
To get a $500 billion increase therefore, they would need to spend;
= 500 / 2.5
= $200 billion.
If they spend $200 billion, $500 billion will be added to the economy by the Multiplier Effect.
Transactions Units Amount
Inventory, January 1 600 $1800
Purchase, January 12 580 2900
Purchase, January 26 180 1260
Sale (460)
Sale (460)
Required:
a. Compute Cost of Goods Sold under each method of inventory: average cost, FIFO, LIFO, and specific identification. For specific identification, assume that the first sale was selected from the beginning inventory and the second sale was selected from the January 12 purchase. Assume that the company uses periodic inventory system.
b. Prepare a partial income statement under each method of inventory: (a) average cost, (b) FIFO, (c) LIFO, and (d) specific identification. For specific identification, assume that the first sale was selected from the beginning inventory and the second sale was selected from the January 12 purchase Assume that the company uses periodic inventory system.
Answer:
a) Cost of Goods Sold under each method of inventory:
1) Average Cost:
Beginning Inventory 600 units $1,800
Purchases: January 12, 580 units 2,900
Purchases: January 26, 180 units 1,260
Cost of goods available for sale, 1,360 units $5,960
Less ending Inventory, 440 units $1,927.20
Cost of goods sold, 920 units $4,032.80
a2) FIFO:
Beginning Inventory 600 units $1,800
Purchases: January 12, 580 units 2,900
Purchases: January 26, 180 units 1,260
Cost of goods available for sale, 1,360 units $5,960
Less ending Inventory, 440 units $2,560
Cost of goods sold, 920 units $3,400
a3) LIFO
Beginning Inventory 600 units $1,800
Purchases: January 12, 580 units 2,900
Purchases: January 26, 180 units 1,260
Cost of goods available for sale, 1,360 units $5,960
Less ending Inventory, 440 units $1,320
Cost of goods sold, 920 units $4,640
a4) Specific Identification:
Beginning Inventory 600 units $1,800
Purchases: January 12, 580 units 2,900
Purchases: January 26, 180 units 1,260
Cost of goods available for sale, 1,360 units $5,960
Less ending Inventory, 440 units $2,280
Cost of goods sold, 920 units $3,680
B. Partial Income Statement under:
Average cost FIFO LIFO Specific Identification
Beginning Inventory $1,800 $1,800 $1,800 $1,800
Purchases 4,160 4,160 4,160 4,160
Cost of goods for sale $5,960 $5,960 $5,960 $5,960
Less ending Inventory 1,927.20 2,560 1,320 2,280
Cost of goods sold $4,032.80 $3,400 $4,640 $3,680
Explanation:
a) The average cost per unit under Average Method =
Average cost per unit =$4.38 (5,960/1,360)
Ending Inventory, 440 x $4.38 = $1,927.20
b) Ending Inventory under FIFO: 440 units
Cost of 180 units = $1,260
Cost of 260 units = 1,300 (260 x $5)
Total cost = $2,560
c) Ending Inventory under LIFO: 440 units
Cost of 440 units from beginning inventory = 440 x $3 = $1,320
d) Ending Inventory under Specific Identification: 440 units
Remaining opening inventory 140 units at $3 = $420
Remaining Jan 12, 120 units at $5 = $600
Remaining Jan 26, 180 units at $7 = $1,260
Total cost of ending inventory = $2,280
e) These are various inventory costing methods which present different results in their cost of goods sold and the ending inventory.
On June 15, Oakley Inc. sells inventory on account to Sunglass Hut (SH) for $1,000, terms 2/10, n/30. On June 20, SH returns to Oakley inventory that SH had purchased for $300. On June 24, SH completely fulfills its obligation to Oakley by making a cash payment. What is the amount of cash paid by SH to Oakley
Answer:
$686
Explanation:
the journal entries necessary to record the sale:
June 15, inventory sold on account to Sunglass Hut, terms 2/10, n/30
Dr Accounts receivable 1,000
Cr Sales revenue 1,000
June 20, partial return of purchase from Sunglass Hut
Dr Sales returns and allowances 300
Cr Accounts receivable 300
June 24, invoice is paid within discount period
Dr Cash 686
Dr Sales discounts 14
Cr Accounts receivable 700
Identify the key elements to incorporate when making a request for a claim or adjustment. Check all that apply. Communicating feelings politely Excessive detail Chronology of details Moderate tone Logical case Sincere praise
Answer:
1. Communicating feelings politely
2. Moderate tone
3. Logical case
4. Sincere praise
Explanation:
In the quest of engaging in business transactions between individuals and businesses, the business might sometimes not meet up to the customer's needs. When customers want to make their claims or request for an adjustment, it is vital that they communicate their feelings in a polite manner, use a moderate tone, build their case logically, and offer sincere praise to the organization in question. In so doing, their claims can be addressed in a civil manner and they would be more likely to get a positive result.
Offering excessive details and bombarding the organization with the chronology of details might lead to confusion as to the real problems to be addressed.
Think of an organization with which you are familiar, perhaps one you have worked for— such as a store, restaurant, office, church, or school. Then answer the following questions. 1. Which contingencies are most important in explaining how the organization is organized? Do you think it is organized in the best way?
Answer:
I considered an Automobile manufacturer of cars in Japan in this case. the company is famous for manufacturing small and medium sized affordable cars in the market in a small lead time of introduction.
The contingencies that are most crucial for the company are the scarcity of low cost labor in its home country Japan, the increased competition in the same segment that is low cost of cars, in every country where the company operates.
The company is organised in the best form because it has a particular custom that has a strong hierarchical structure with little room to flexibility. it is a functional structure.
Explanation:
Solution
Let us consider a major automobile manufacturer of Japan in this context. the company is well established in Japan as well as in global automobile market in the last 30 years.
The company is known for manufacturing small and medium sized affordable cars in the market in a small lead time of introduction. the success of the company is primary on the efficiency improvement, lean operations and economics of scale.
Thus
The contingencies that are most important for this company is shown below:
Scarcity of low cost labor in its home country Japan.The lack of competitive advantages and unique resources to retain the same.The increased competition in the same segment that is low cost of cars, in every country where the company operates.The company has followed a particular custom that has a strong hierarchical structure with little room to flexibility. it is a functional structure.
With the present expansion in different market the functional structure may not be efficient and effective for the company.
Step by step painting prepares and packages paint products. Step by Step painting has two departments: Blending and Packaging. Direct materials are added at the beginning of the blending process (dyes) and at the end of the packaging process (cans). Conversion costs are added evenly throughout each process. Data from the month of May for the Blending Department are as follows:Gallons Beginning Work-in-Process Inventory 0 gallonsStarted in production 9,500 gallonsCompleted and transferred out to Packaging in May 6,000 gallonsEnding Work-in-Process Inventory (20% of the way through the blending process) 3,500 gallonsCosts Beginning Work-in-Process Inventory $0Costs added during May: Direct materials 5,700Direct labor 2,085Manufacturing overhead allocated 2,004Total costs added during May $9,789Required:What are the following conversion costs:1. Completed and transferred out2. Ending work-in-process3. Total units accounted for
Answer:
1. Completed Units Conversion Costs= $ 3661.8
2. Ending work-in-process Conversion Costs $ 427
3.Total Units Accounted For 9500
Explanation:
Given Data
Beginning Work-in-Process Inventory 0 gallons
Started in production 9,500 gallons
Completed and transferred out in May 6,000 gallons
Ending Work-in-Process Inventory (20% of the way through the blending process) 3,500 gallons
Costs Beginning Work-in-Process Inventory $0
Costs added during May:
Direct materials 5,700
Direct labor 2,085
Manufacturing overhead allocated 2,004
Conversion Costs = 4089
Total costs added during May $9,789
Completed and transferred out:
Materials 9500 Units
Conversion 7050 Units
Particulars Units % of Completion Equivalent Units
Materials Conversion Materials Conversion
Completed &
Transferred out 6,000 100 100 6000 6000
Ending WIP 3500 100 20 3500 700
Total Equivalent Units 9500 6700
First we find the Equivalent units and then Cost per equivalent unit.
Conversion Costs Per Equivalent Units = Total Conversion Costs / Conversion EUP
Conversion Costs Per Equivalent Units = 2,085+2,004/ 6700
= $ 0.61 per equivalent unit
Now we multiply the Cost PER EUP to find the costs accounted for
Conversion Costs Accounted For :
1. Completed Units= 6000* 0.61= $ 3661.8
In Process = 700* 0.61= $ 427
Total Conversion Costs = $ 4088.8
Now these costs are equal to the conversion costs given in the data = 2085+ 2004= $ 4089. The difference is due to rounding off decimal numbers.
2. Ending work-in-process
In Process = 700* 0.61= $ 427
3. Total Units Accounted For
Beginning Work-in-Process Inventory 0 gallons
Started in production 9,500
Total Units 9500
Completed and transferred out 6,000 gallons
Ending Work-in-Process Inventory 3,500 gallons
Total Units Accounted For 9500
why Estonia is so highly technologically advanced country?
Answer:
in fact, despite its size, Estonia has become one of the world's most technologically advanced countries.
Explanation:
This is largely due to the efforts the Estonian Government made in the 1990s to reform the country and turn it into a digital society, a movement now known as 'e-Estonia'. hope this helps you :)
A parent holding company sells shares in its subsidiary such that the parent now owns only 65% of the subsidiary and, thus, the tax returns of the parent and its subsidiary can't be consolidated. The parent receives annual dividends from the subsidiary of $2,500,000. If the parent's marginal tax rate is 34% and if the exclusion on intercompany dividends is 70%, what is the effective tax rate on the intercompany dividends, and how much net dividends are received?
Answer:
10.2%
Explanation:
Total annual dividends $2,500,000
the actual dividends received deduction is 80%, but since the question states that it is 70%, we must subtract 70% of $2,500,000 = $750,000
the company will be taxed only on $750,000 of dividends that it received:
total taxes paid = $750,000 x 34% = $255,000
effective tax rate = total taxes paid / total dividends received = $255,000 / $2,500,000 = 10.2%
Samantha and Adam own a gardening business together. They each pull weeds from flower beds and rake up leaves for their neighbors. If each decides to specialize in what they are best at, Samantha will
Answer:
Samantha and Adam
Gardening Business:
If each decides to specialize in what they are best at, Samantha will be specializing in either pulling weeds or raking up leaves and benefiting from the principle of Division of Labor.
Explanation:
According to britannica.org, division of labour is "the separation of a work process into a number of tasks, with each task performed by a separate person or group of persons. It is most often applied to systems of mass production."
Division of labor facilitates the deployment of machinery and technology to complete simple tasks, thereby reducing costs of production, developing specialized talents, and increasing profits. It also makes possible the invention of tools and other forms of innovations. This is because workers who are focused on the same task can learn the tasks in details and develop better solutions from their learning experiences.
A company enters into a short futures contract to sell 25,000 units of a commodity for 950 cents per unit. The initial margin is $4,500 and the maintenance margin is $3,750. Calculate the futures price per unit that will allow $2,000 to be withdrawn from the margin account.
Answer:
$958
Explanation:
The amount that is excess in the initial margin account can be withdrawn. So we calculate the price increase that will result in a $2000 increase in initial margin.
The present price per unit of the commodity is 950 cents for 25,000 units
A unit increase of the price (which is in cents) will be 1/100= 0.01
Therefore an increase in price of 0.01 will lead to gain of 0.01 * 25,000= $250
Let's get price increase that will result in $2,000 gain
$250 = 1 unit price increase
$2,000 = x
x= (2000 * 1) ÷ 250= 8 units increase
Therefore the price at which $2,000 can be withdrawn is 950 + 8= 958 cents
A small grocery store sells fresh produce, which it obtains from a local farmer. During the strawberry season, demand for fresh strawberries can be reasonably approximated using a normal distribution with a mean of 40 quarts per day and a standard deviation of 6 quarts per day. Excess costs run 35 cents per quart. The grocer orders 49 quarts per day.
a. What is the implied cost of shortage per quart?
b.Why might this be a reasonable figure?
Answer:
(a)The implied cost of shortage per quart is = $4.75
(b) This could be viewed as reasonable figure, because is (approximately) equal to the loss per quart of strawberry.
Explanation:
Solution
Given that:
Mean =μ = 40
Standard deviation =σ = 6
Excess cost= Ce =$0.35
The amount ordered =S₀= 49
Thus
Z =(49 -40)/6
=1.5
Now
From the Table Z, we have the service level which is,
P(X <49 ) = P(Z < 1.5)
= 0.9332
Since we know that,
Service level (SL) =Cs/Cs+Ce
So,
0,9332 =Cs/Cs+0.35
Thus
0.9332Cs + 0.35* 0.9332 =Cs
0.0668Cs =0.32662
Hence
Cs = $4.75
(a) The implied cost of shortage per quart is = $4.75
(b) Therefore,this could be regarded as reasonable figure, because is (approximately) equal to the loss per quart of strawberry.
(a) "$4.75" would be the implied cost of shortage per quart.
(b) Just because is equivalent to the loss of strawberry, this could be the reasonable figure.
According to the question,
Mean,
[tex]\mu = 40[/tex]Standard deviation,
[tex]\sigma = 6[/tex]Excess cost,
[tex]C_e = 0.35[/tex]Amount ordered,
[tex]S_o = 49[/tex]Now,
→ [tex]Z = \frac{S_o-\mu}{\sigma}[/tex]
[tex]= \frac{49-40}{6}[/tex]
[tex]= 1.5[/tex]
With the help of Z-table, we get
→ [tex]P(X < 49) = P(Z < 1.5)[/tex]
[tex]= 0.9332[/tex]
As we know,
→ Service level, [tex]SL = \frac{C_s}{C_s+C_e}[/tex]
By substituting the values, we get
[tex]0.9332 = \frac{C_s}{C_s+0.35}[/tex]
[tex]0.9332 C_s +0.35\times 0.9332 = C_s[/tex]
[tex]0.0668 C_s = 0.32662[/tex]
[tex]C_s = \frac{0.32662}{0.0668}[/tex]
[tex]= 4.75[/tex] ($)
Thus the above response is correct.
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Blake and Ryan each invest $30,000 in a business and are given shares of stock in Jones Industries as evidence of their ownership interests. For this transaction, identify the effect on the accounting equation.
Answer:
Both asset and equity increases
Explanation:
As we are accepting investments from Blake and Ryan in the form of cash and offering our shares in exchange. This will result in our cash(asset) will increase by the value of $60,000 and Equity is also raising by issuing shares of $60,000 value to both Blake and Ryan equally.
Suppose disposable income increases by $2,000 . As a result, consumption increases by $1,500 . Answer the questions based on this information. Where appropriate, enter your answer as a decimal rather than as a percentage.
The increase in savings resulting directly from this change in income is:_______
The marginal propensity to save (MPS) is:_________
Answer:
The increase in savings resulting directly from this change in income is $500
The marginal propensity to save (MPS) is 0.25
Explanation:
In order to calculate The increase in savings resulting directly from this change in income we would have to make the following calculation:
increase in savings resulting directly from this change in income= increase in income - increase in consumption
increase in savings resulting directly from this change in income= $2,000 - $1,500
increase in savings resulting directly from this change in income=$500
The Marginal propensity to save = increase in savings/increase in income =
Marginal propensity to save = $500/$2.000
Marginal propensity to save =0.25
Postage Corporation acquired 75 percent of Stamp Corporation's common stock on December 31, 20X8, for $300,000. The fair value of the noncontrolling interest at that date was determined to be S100,000. Stamp's balance sheet immediately before the combination reflected the following balances:__________. Cash and Receivables $ 40,000Inventory 70,000Land 90,000Buildings and Equipment (net) 250,000Total Assets $ 450,000 Accounts Payable $ 30,000Income Taxes Payable 40,000Bonds Payable 100,000Common Stock 100,000Retained Earnings 180,000Total Liabilities and Stockholders' Equity $ 450,000 A careful review of the fair value of Stamp's assets and liabilities indicated that inventory, land, and buildings and equipment (net) had fair values of $65,000, $100,000, and, $300,000 respectively. Goodwill is assigned proportionately to Postage and the noncontrolling shareholders. 1) Based on the preceding information, what amount of Stamp's inventory will be included in the consolidated balance sheet immediately following the acquisition? A) $0 B) S65,000 C) $70,000 D) $60,000 2) Based on the preceding information, what amount of Stamp's land will be included in the consolidated balance sheet immediately following the acquisition? A) $0 B) $10,000 C) $90,000 D) $100,000 3) Based on the preceding information, what amount of Stamp's buildings and equipment (net) will be included in the consolidated balance sheet immediately following the acquisition? A) $0 B) $50,000
Answer:
LOL i can't read that. pls reformat.
Explanation:
Types of bonds
Bonds are debt securities in which a borrower promises to pay a specified interest rate and principal at a future date.
1. Which of the following statements about Treasury bonds is the most accurate?
A. Treasury bonds are not completely riskless, since their prices will decline when interest rates rise.
B. Treasury bonds are completely riskless.
C. Treasury bonds have a very small amount of default risk, so they are not completely riskless.
Based on the information given in the following statement, answer the questions that follow:
New York City issued a general obligation bond for a canal in 1812. It was the first formal debt instrument with a fixed repayment schedule issued by a city.
2. Who is the issuer of the bonds?
A. The New York City government
B. Bank of New York
C. Federal Reserve Bank of New York
3. What type of bonds are these?
A. Treasury bonds
B. Municipal bonds
C. Corporate bonds
4. Which of the following statements is true about bonds?
A. An investor from Kansas that invests in a municipal bond issued by the State of Kansas will pay neither state nor federal taxes on the bond’s coupon payments.
B. An investor from Kansas that invests in a municipal bond issued by the State of Kansas will pay federal—but not state—taxes on the bond’s coupon payments.
5. Which of the following types of bonds has the least default risk?
A. Corporate bonds
B. Treasury bonds
C. Municipal bonds
Answer: 1. A . Treasury bonds are not completely riskless, since their prices will decline when interest rates rise.
2. A. The New York City government
3. B. Municipal bonds
4. A. An investor from Kansas that invests in a municipal bond issued by the State of Kansas will pay neither state nor federal taxes on the bond’s coupon payments
5. B. Treasury bonds
Explanation:
1. Treasury Bonds are known as the safest bonds in the world and so are generally considered risk-less. However this is not so as they still fall victim to Interest rate risk which is the risk that their prices will decline when interest rates rise because bond prices are inversely related to price.
2. The City of New York issued to bonds in question so it is a New York City Government bond.
3. Municipal Bonds are issued by a state, county or a municipality so the above is a Municipal bond as it was issued by the City of New York.
4. Municipal Bonds attract no Federal taxes and when buying a Municipal bond as a resident of the Municipality you are in, you will.not get charged the Municipal taxes either on the bond coupon payments.
5. Default risk is the risk that the issuer will not pay back. US Treasury Bonds are known as the safest in the world and have not been defaulted on in over a century. They therefore have the lowest default risk.
While on a hike with a tour group in the mountains, Derek gets mauled by a bear. No previous reports of bears in the area had been made. Derek wants to hold the tour company liable for his injury. Which of the following is most likely true?
A. Derek cannot hold the tour company liable because there is no way to prepare for or avoid a bear attack.
B. The company is not at fault because it does not owe Derek a duty of care.
C. Because most people would not expect something as dangerous as a bear encounter while on a hike, an assumption of risk defense will probably not protect the tour company.
D. Derek assumed the risk of a bear attack by joining the tour group, so he cannot hold the tour company liable.
Answer: D. Derek assumed the risk of a bear attack by joining the tour group, so he cannot hold the tour company liable
Explanation:
Derek has to accept that by joining the tour group, he assumed some the risk of some elements of danger amongst them the bear attack.
Even though there had been no prior attack by bears in the mountain, a mountain hike still has some inherent danger in it and this includes bears. He cannot hold the tour company liable using this reason alone.
Selected financial data regarding current assets and current liabilities for two competing companies, Simon and Garfunkel, are provided as follows:
($ in millions) Simon Garfunkel
Current assets
Cash and cash equivalents $ 620 $ 2,920
Short-term investments 3,690 0
Net receivables 992 1,330
Inventory 510 203
Other current assets 335 477
Total current assets $ 6,147 $ 4,930
Current liabilities
Accounts payable $ 7,220 $ 4,285
Short-term debt 1,270 1,028
Other current liabilities 0 1,306
Total current liabilities $ 8,490 $ 6,619
1-a. Calculate the current ratio for Simon. Then calculate the current ratio for Garfunkel. (Round your answers to 2 decimal places.)
1-b. Which of the two companies has the best current ratio?
Simon
Garfunkel
2-a. Calculate the acid-test (quick) ratio for Simon. Then calculate the acid-test (quick) ratio for Garfunkel. (Round your answers to 2 decimal places.)
2-b. Which of the two companies has the best acid-test ratio?
Garfunkel
Simon
Answer:
Please find the detailed answer in the explanation section
Explanation:
1. Current ratio = Curren assets / Curren liabilities.
For Simon:
Current assets are:
Cash and cash equivalents $ 620
Short-term investments $3,690
Net receivables $992
Inventory $510
Other current assets $335
Total current assets $6,147
Current liabilities are:
Accounts payable $7,220
Short-term debt $1,270
Other current liabilities. $0
Total current liabilities $8,490
So current asset is $6,147/$8,490
0.72:1
For Garfunkel:
Current assets are:
Cash and cash equivalents $2,920
Short-term investments $0
Net receivables $1,330
Inventory $203
Other current assets $477
Total current assets $4,930
Current liabilities are:
Accounts payable $4,285
Short-term debt $1,028
Other current liabilities. $1,306
Total current liabilities $6,619
So current asset is $4,930/$6,619
0.74:1
1b Simon current asset is 0.72 while Garfunkel's own is 0.74
Therefore Garfunkel with 0.74 has a better current ratio
2a. Acid-test ratio = total current assets minus Inventory / total current liabilities
For Simon:
($6,147 - $510) / $8,490
=0.66:1
For Garfunkel:
($4,930 - $203) / $6,619
=0.71:1
2b. Garfunkel with 0.71 has a better acid-test ratio
Q-mart failed to include inventory that was kept in a separate warehouse in its 12/31 end-of-the-period inventory count. Consequently, the ending inventory on 12/31 was understated on the balance sheet. Explain how this error will effect the income statement.Asset understatedEquity understated
Answer:
a. The gross profit. net income and retained earnings at the end of year will be overstated.
b. Assets will be understated especially the current assets.
c. Equity will be overstated.
Explanation:
a. Explain how this error will effect the income statement income statement
When the income statement is being prepared, cost of goods sold must be computed and then deducted from the net sales revenue to arrive at the gross profit. The formula for calculating the cost of goods sold and gross profit is as follows:
Cost of goods sold = Beginning inventory + Net purchases - Ending inventory
Gross profit = Net sales revenue - Cost of goods sold
From the cost of goods sold, it can be seen that ending inventory is a deduction. Also, cost of goods sold is a deduction from the gross profit equation.
As a result these, the failure of Q-mart to include inventory that was kept in a separate warehouse in its 12/31 end-of-the-period inventory count will make the cost of goods sold to be understated, while the gross profit and the net income for the year as well as retained earnings at the end of the year will be be overstated by the amount of the omitted ending inventory.
b. Explain how this error will effect the Asset
Ending inventory is a component of the current assets in the balance sheet. As a result of this, the failure of Q-mart to include inventory that was kept in a separate warehouse in its 12/31 end-of-the-period inventory count will make the asset to be understated by the amount of the omitted ending inventory.
c. Explain how this error will effect the Equity
From part a. above, it can be seen that retained earnings at the end of the year will be be overstated by the amount of the omitted ending inventory.
Since the retained earnings for the year is a component of the stockholders equity in the balance sheet, equity will therefore be overstated by the amount of the omitted ending inventory as the gross profit and the net income for the year as well as retained earnings for the year were already overstated in the income statetement.
The efficient market hypothesis would support which of the following: The market price of securities on average equals the price that would be computed using all public information. The price of securities is reflective of the information available. Mutual fund managers cannot earn more return unless they have "special/private" information. All of the above. None of the above
Answer:
All of the above.
Explanation:
The hypothesis of an efficient market can be defined as the statement that financial markets are efficient in relation to information, that is, the prices of securities must reflect all available information. This hypothesis holds that the expected return on a security is equal to the return on equilibrium, which means that an agent is not able to achieve returns above the market average, as his returns would be consistent with the public information that must be available at the time that the investment is made.
So all of the above are true.
Consider two projects with returns in various states of nature that have the following relationship; knowing how one project performs gives no information about how the other project performs. In this case, what can we expect the covariance between the two projects to be
Answer:
Equal to zero
Explanation:
Covariance gives the joint relationship between two random variables.
If covariance is positive, it means that the variables move together. If it is negative, it means the variables don't move together.
If covariance is zero, it shows there's no relationship between the variables.
I hope my answer helps you
In the early 1980's, 7 people in the Chicago area were poisoned by Tylenol capsules laced with cyanide. Although the company's investigation showed that the tainted capsules had not been tampered with at the factories where they were produced, Johnson & Johnson took immediate action through a massive recall and offered a $100,000 reward for information leading to the arrest of the person or people responsible. Industry experts believe that this led to the brand's ability to recover from the negative publicity surrounding the "Tylenol Murders". Johnson & Johnson's actions illustrate:a) The power of the Food and Drug Administrationb) How managing negative publicity is impossiblec) The importance of sacrificing short-term profits for long-term credibilityd) The need to combat negative publicity with facts in order to maintain sales levelse) The importance of sustainability on public perception and the bottom line
Answer: c) The importance of sacrificing short-term profits for long-term credibility.
Explanation:
The Chicago Tylenol Murders of September–October 1982 shocked the United States and claimed the lives of 7 people and was due to a poisoned Tylenol capsules which is produced under a Johnson and Johnson subsidiary.
Johnson & Johnson have been hailed as heroes for their response to the issue because even though the facts showed that they were in the clear, they still not only sacrificed huge short term profits by recalling thousands of tablets but by also offering a massive reward for anyone who would come forward with information that would lead to the arrest of perpetrators.
This act of Corporate Altruism saved the company's brand because people were humbled by the lengths Johnson & Johnson went to.
This endeared the Johnson & Johnson brand in their hearts as a Credible company and proved infinitely beneficial in the long run.
This proves that sacrificing short term profits for long term credibility is quite beneficial.
To be Lean means:
a. to be able to move quickly without significant penalty
b. to decrease economies of scale
c. to do the same things as Agile but modified just a bit
d. to reduce or eliminate waste from the system
Answer:
d. to reduce or eliminate waste from the system
Explanation:
Lean refers in business to generating more benefits to your clients using less resources and a company using lean principles tries to eliminate all the unecessary things that doesn't add value which are considered waste and increase its efficiency. According to this, the answer is that to be lean means to reduce or eliminate waste from the system.
The other options are not right because Agile and Lean are different methodologies and Lean helps to generate cost reductions that can create economies of scale. Also, to be lean it doesn't matter if you move quickly or slow as long as you eliminate the waste to give more value to customers.
Momber's Flooring Company
2011 2012
Cash 500 800
Accounts receivable 1,400 1,200
Inventory 3,900 4,400
Net fixed assets 8,200 8,200
Land 1,000 2,000
Total Assets 15,000 16,600
Notes payable 1,000 600
Accounts payable 3,000 2,000
Accruals 500 900
Long-term debt 3,600 5,400
Common Stock 2,500 2,200
Retained earnings 4,400 5,500
Total Liabilities and Equity 15,000 16,600
Given the Balance Sheets for Momber's Flooring Company above for the years ending December 31, 2011 and 2012, find Net Cash Flows from Operating Activities for 2012 assuming the following income statement data:
Net income (2012)= $3,382 and Depreciation (2012) = $810
Round your answer as a whole number and record without a dollar sign and without commas. For example, record $3,204.854 as 3205. To show a negative cash flow (i.e., a net cash outflow), place a negative sign before your answer with no space between the negative sign and the number. Thus, record negative 5,432 as -5432.
Answer:
Net Cash Flows from Operating Activities for 2012 will be $2,082
Explanation:
Prepare the Cash flow from Operating Activities Section to determine the Net Cash Flows from Operating Activities.
Cash flow from Operating Activities :
Net income 3,382
Adjustment for Non-Cash items :
Depreciation 810
Adjustment for Changes in Working Capital items :
Decrease in Accounts Receivables 200
Increase in Inventory -500
Decrease in Notes payable -400
Decrease in Accounts payable -1,000
Increase in Accruals 400
Net Cash Flows from Operating Activities 2,082
Conclusion :
Net Cash Flows from Operating Activities for 2012 will be $2,082
In March 2021, the Phillips Tool Company signed two purchase commitments. The first commitment requires Phillips to purchase inventory for $101,000 by June 15, 2021. The second commitment requires the company to purchase inventory for $151,000 by August 20, 2021. The company's fiscal year-end is June 30. Phillips uses a periodic inventory system. The first commitment is exercised on June 15, 2021, when the market price of the inventory purchased was $85,500. The second commitment was exercised on August 20, 2021, when the market price of the inventory purchased was $120,500. Required: Prepare the journal entries required on June 15, June 30, and August 20, 2021, to account for the two purchase commitments. Assume that the market price of the inventory related to the outstanding purchase commitment was $140,400 at June 30. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)
Answer:
Journal entries
Date Account title and explanation PR. No. Debit ($) Credit ($)
June 15,2021 Purchases $85,500
Loss on purchase commitment $15,000
Cash $100,000
(To record the payment for the loss on
purchase commitment)
June 30,2021 Estimated loss on purchase
commitment $10,600
Estimated liability on purchase
commitment $10,600
(To record the loss on purchase commitment)
Aug 30,2021 Purchases $120,500
Loss on purchase commitment $19,900
Estimated liability on purchase
commitment $10,600
Cash $151,000
(To record the payment for the loss on purchase commitment)
Explanation:
For June 15, Loss on purchase commitment = Signed value of inventory - Market value of inventory = $100,000 - $85,500 = $14,500
For June 30, Loss on purchase commitment = Signed value of inventory - Market value of inventory = $151,000 - $140,400 = $10,600
For Aug 30, Loss on purchase commitment = Market price of inventory at June 30 - Market value of inventory at August 30 = $140,400 - $120,500 = $19,900
The Troy Co. has the following information available: Total fixed costs $400,000 Expected sales (units) 100,000 Selling price per unit $10.00 Contribution margin per unit $7.50 Tax rate 30% What is the after-tax net income
Answer:
Net operating income= 245,000
Explanation:
Giving the following information:
Total fixed costs $400,000 Expected sales (units) 100,000 Selling price per unit $10.00 Contribution margin per unit $7.50 Tax rate 30%
We need to determine the after tax income:
Contribution margin= 100,000*7.5= 750,000
Fixed costs= (400,000)
EBIT= 350,000
Tax= 350,000*0.3= (105,000)
Net operating income= 245,000