Answer:
a. Realized gain of $80,000 on involuntary conversion of building ($10,000 of gain is recognized).
Taxable Income INCREASE BY $10,000E & P Increase NO EFFECTb. Mining exploration costs incurred on May 1 of current year; $24,000 is deductible from current-year taxable income.
Taxable Income DECREASE BY $20,000E & P Increase INCREASE BY $24,000c. Sale of equipment to unrelated third party for $240,000; basis is $120,000 (no election out of installment method; no payments are received in current year).
Taxable Income NO EFFECTE & P INCREASE BY $120,000d. Dividends of $20,000 received from 5% owned corporation, together with dividends received deduction (assume that taxable income limit does not apply).
Taxable Income INCREASE BY $6,000E & P INCREASE BY $14,000e. Domestic production activities deduction of $45,000 claimed in current year.
Taxable Income DECREASE BY $45,000E & P INCREASE BY $45,000f. Section 179 expense deduction of $100,000 in current year.
Taxable Income DECREASE BY $100,000E & P INCREASE BY $80,000g. Impact of current-year section 179 expense deduction in succeeding year.
Taxable Income NO EFFECTE & P DECREASE BY $20,000h. MACRS depreciation of $80,000. ADS depreciation would have been $90,000.
Taxable Income DECREASE BY $10,000E & P INCREASE BY $10,000i. Federal income taxes of $80,000 paid in current year.
Taxable Income NO EFFECTE & P Increase NO EFFECTOak Outdoor Furniture manufactures wood patio furniture. If the company reports the following costs for June 2018,Wood $ 270,000Nails, glue, stain 18,000Depreciation on saws 5,300Indirect manufacturing labor 45,000Depreciation on delivery truck 1,700Assemblyline workers' wages 51,000What is the balance in the Manufacturing Overhead account before overhead is allocated to jobs? Assume that the labor has beenincurred, but not yet paid. Prepare journal entries for overhead costs incurred in June. What is the balance in the Manufacturing Overhead account before overhead is allocated to jobs?1. First, prepare an entry for the overhead costs for materials used.2. Next, prepare an entry for the overhead costs for labor incurred.3. Finally, prepare an entry for all other overhead costs.
Answer:
0. Manufacturing Overhead account balance before allocation.
Every expense incurred that is not directly linked to manufacturing of wood patio furniture goes here.
Oak Outdoor Furniture Manufacturing Overhead June 30
Nails, Glue, Stain 18,000
Depreciation on Saws 5,300
Indirect Manufacturing Labour 45,000
Balance $68,300
1. Journal entry for the overhead costs for materials used.
DR Manufacturing Overhead $18,000
CR Raw material Inventory $18,000
(To record cost of indirect materials used)
2. Journal entry for the overhead costs for labor incurred.
DR Manufacturing Overhead $45,000
CR Wages Payable $45,000
(To record cost of overhead labor costs incurred)
3. Journal entry for all other overhead costs.
DR Manufacturing Overhead $5,300
CR Accumulated Depreciation $5,300
(To record depreciation on saws)
Sprint allocates general plant management costs on the basis of the number of production employees and plant security costs on the basis of space occupied by the production departments. In November, the following overhead costs were recorded:
Melting Department direct overhead $110,000
Molding Department direct overhead 400,000
General plant management 100,000
Plant security 50,000
Other pertinent data follow:
Melting Molding
Number of employees 35 40
Space occupied (square feet) 10,000 20,000
Machine hours 10,000 2,000
Direct labor hours 4,000 20,000
Required:
a. Prepare a schedule allocating general plant management costs and plant security costs to the Melting and Molding Departments.
b. Determine the total departmental overhead costs for the Melting and Molding Departments.
Answer:
a.
General Plant Management Costs
Cost is $100,000
These costs are allocated on the basis of number of production employees.
Melting Department employs 35 workers and Molding employs 40 for a total of 75.
Melting Department = [tex]\frac{35}{75} * 100,000[/tex]
Melting Department = $46,666,67
Molding Department = [tex]\frac{40}{75} * 100,000[/tex]
Molding Department = $53,333.33
Plant Security Costs
Cost is $50,000
These costs are allocated on the basis of space occupied by the production departments.
Melting Department occupies 10,000ft² and Molding occupies 20,000 ft² for a total of 30,000 ft²
Melting Department = [tex]\frac{10,000}{30,000} * 50,000[/tex]
Melting Department = $16,666,67
Molding Department = [tex]\frac{20,000}{30,000} * 50,000[/tex]
Molding Department = $33,333.33
2. Melting Department
= 110.000 + 46,666.67 + 16,666.67
= $173,333.34
Molding Department
= 400,000 + 53,333.33 + 33,333.33
= $486,666.66
Spiro Hospital is investigating the possibility of investing in new dialysis equipment. Two local manufacturers of this equipment are being considered as sources of the equipment. After-tax cash inflows for the two competing projects are as follows: Year Puro Equipment Briggs Equipment 1 $320,000 $120,000 2 280,000 120,000 3 240,000 320,000 4 160,000 400,000 5 120,000 440,000 Both projects require an initial investment of $560,000. In both cases, assume that the equipment has a life of 5 years with no salvage value. Required: Round present value calculations and your final answers to the nearest dollar. 1. Assuming a discount rate of 12%, compute the net present value of each piece of equipment.
Answer:
NPV for puro = $289,529.95
NPV for briggs = $374,450.85
Explanation:
Net present value is the present value of after tax cash flows from an investment less the amount invested.
net present value can be calcuated using a financal calcuatopr
Puro Equipment
cash flow in year 0 = $-560,000
cash flow in year 1= $320,000
cash flow in year 2 = $280,000
cash flow in year 3 = $240,000
cash flow in year 4 = 160,000
cash flow in year 5 = 120,000
I = 12%
NPV = $289,529.95
Briggs Equipment
cash flow in year 0 = $-560,000
cash flow in year 1= $120,000
cash flow in year 2= $120,000
cash flow in year 3= $320,000
cash flow in year 4= 400,000
cash flow in year 5= 440,000
I = 12%
NPV = $374,450.85
To find the NPV using a financial calculator:
1. Input the cash flow values by pressing the CF button. After inputting the value, press enter and the arrow facing a downward direction.
2. after inputting all the cash flows, press the NPV button, input the value for I, press enter and the arrow facing a downward direction.
3. Press compute
The computation of the net present values of the two equipment are as follows:
Puro Equipment Briggs Equipment
Initial investment ($560,000) ($560,000)
Present value of cash inflows $849,600 $934,520
Net present value $289,600 $374,520
Data and Calculations:
Estimated useful life = 5 years
Discount factor = 12%
Initial cash outlay in each equipment = $560,000
Year Puro Equipment
Cash Flows PV Factor Present Value
0 ($560,000) 1 ($560,000)
1 $320,000 0.893 285,760
2 280,000 0.797 223,160
3 240,000 0.712 170,880
4 160,000 0.636 101,760
5 120,000 0.567 68,040
Total present value of cash inflows $849,600
Net present value = $289,600
Year Briggs Equipment
Cash Flows PV Factor Present Value
0 ($560,000) 1 ($560,000)
1 $120,000 0.893 107,160
2 120,000 0.797 95,640
3 320,000 0.712 227,840
4 400,000 0.636 254,400
5 440,000 0.567 249,480
Total present value of cash inflows $934,520
Net present value = $374,520
Thus, the net present value of Puro Equipment is $289,600 while that of Briggs Equipment is $374,520.
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A stock has an expected return of 12.6 percent, the risk-free rate is 7 percent, and the market risk premium is 10 percent. What must the beta of this stock be
Answer:
0.56
Explanation:
In this question we used the Capital Asset Pricing Model formula i.e shown below:
As we know that
Expected rate of return = Risk free rate of return + Beta × market risk premium
12.6% = 7% + Beta × 10%
12.6% - 7% = Beta × 10%
5.6% = Beta × 10%
So, the beta is
= 5.6% ÷ 10%
= 0.56
Hence, the beta of the stock is 0.56
Owners of a local restaurant are concerned about their ability to provide quality service as they continue to grow and attract more customers. They have collected data from Friday and Saturday nights, their busiest times of the week. During these time periods about 106 customers arrive per hour for service. Given number of tables and chairs, and the typical time it takes to serve a customer, they the owners estimate they can serve on average about 162 customers per hour. Use Exhibit 5.6.During these nights, are they in the zone of service, the critical zone, or the zone of nonservice?Critical zoneZone of serviceZone of nonservice
Answer:
Zone of service
Explanation:
Zone of service is the period where there is intensive service to be rendered to customers because of the number present per hour. Since they can serve 162 customers per hour, one can estimate that they would be serving about a thousand customers per night within a six-hour period. In the zone of service, every hand would usually be on deck and the tables and chairs would be fully occupied with customers making their food and drink demands.
Suppose you're in charge of establishing economic policy for this small island country. Which of the following policies would lead to greater productivity in the weaving industry? Check all that apply. Sharply increasing the interest rate on student loans to people pursuing advanced degrees in weaving Imposing restrictions on foreign ownership of domestic capital Encouraging saving by allowing workers to set aside a portion of their earnings in tax-free retirement accounts Imposing a tax on looms
Answer:
Encouraging saving by allowing workers to set aside a portion of their earnings in tax-free retirement
Imposing restrictions on foreign ownership of domestic capital
Explanation:
One of the limitations of aggregate accounting is that: Multiple Choice it includes market transactions that should be excluded. it doesn't take depreciation into account. it measures market activity, not social welfare. there isn't enough data available in most developed countries to have national income accounts.
Answer:
The correct answer is: it measures market activity, not social welfare.
Explanation:
Aggregate accounting is the process of collecting different data from almost all financial accounts of a family or individual in a single location.
Therefore, although this is an efficient indicator for measuring a country's economic activity, it cannot be used as a measure of social well-being, as it does not understand essential aspects that promote human well-being. One of its limitations is that the index does not include non-market transactions, the degree of social income inequality, environmental degradation, the negative externalities of the productive system, etc.
What is the value of zero-coupon bond with a par value of $1,000 and a yield to maturity of 5.20%? The bond has 12 years to maturity.
Answer:
$544.265
Explanation:
Given:
FV = $1,000
Yield to maturity = 5.2%
N = 12 years
Required:
Find the value of the zero coupon bond.
Use the formula:
PV = FV * PVIF(I/Y, N)
Thus,
PV = 1000 * PVIF(5.2%, 12)
= 1000 * 0.544265
= $544.265
The value of the zero coupon bond is $544.3
Assume that the following data characterize the hypothetical economy of Trance: money supply = $200 billion; quantity of money demanded for transactions = $160 billion; quantity of money demanded as an asset = $10 billion at 12 percent interest, increasing by $10 billion for each 2-percentage-point fall in the interest rate.
a. What is the equilibrium interest rate in Trance? _____ percent.
b. At the equilibrium interest rate, what is the quantity of money supplied, the money demanded, the amount of money demanded for transaction, and the amount of money demanded as an asset in trace?
Quantity of money supplied = $ _____ billion
Quantity of money demanded = $ _____ billion
Amount of money demanded for transactions = $ _____ billion
Amount of money demanded as an asset = $_____ billion
Answer:
a. What is the equilibrium interest rate in Trance?
The equilibrium interest rate is 6%, because it is the interest rate that brings the money supply and the money demand to equilibrium.
At 12% interest rate, the quantity of money demanded is 170 billion, while the money supply is 200 billion.
The quantity of moned demanded as an asset increases by 10 billion if the interest rate falls by two percentage points. Thus, if the interest rate falls 6 percentage points, the quantity of money demanded as an asset will increase by 30 billion, reaching 40 billion.
At this point, money demand is:
$160 billion (money demanded for transactions) + $40 billion (money demanded as an asset) = $200 billion.
Which is the same as the money supply.
b. At the equilibrium interest rate, what is the quantity of money supplied, the money demanded, the amount of money demanded for transaction, and the amount of money demanded as an asset in trace?
The quantity of money supplied is still 200 billion.
The quantity of money demanded is 200 billion.
The amount of money demanded for transactions is 160 billion.
And the amount of money demanded as an asset is 40 billion.
Compared to _____% in 1977, the labor force participation rate for men is now approximately ______% and is expected to decrease through 2024 to _____%
Answer: 59; 53; 52
Explanation: Compared to 59% in 1977, the labor force participation rate for men is now approximately 53% and is expected to decrease through 2024 to 52%.
When Joe was working in finance, he bought all of his suits at Macy’s, a department store. Once Macy’s finds out about Joe’s plans to return to business school, what customer-centric approach would Professor Fader recommend that Macy’s takes with Joe?
Answer:
Show Joe that he's still important to them by extending a store discount to him that will apply during his time as a student.
Explanation:
Customer-centric approach is a business strategy in which the focus in on customer demand. The customer is given special attention by the organization to help them retain a long term relationship with the business. In such approach customer is put at core of business. This helps organization to better understand customer needs and fulfill them so the customer remains loyal to them. Macy is also focusing on Joe and has expressed that he is an important person. She is supporting her views by offering Joe extension in discounts that were applicable to him as a student.
Determine the ending inventory using the periodic inventory system and the weighted average cost method (rounded to the nearest cent), assuming that 18 units were sold at a price of $14. Date Item Units Cost Total June 1 Beginning inventory 6 $5 $30 June 12 Purchase 10 6 60 June 18 Purchase 8 7 56 Totals 24 — $146 a.$36.48 b.$109.44 c.$145.92 d.$56.00
Answer:
The ending inventory using the periodic inventory system and the weighted average cost method is $36.48
Explanation:
Weighted Average Method.
The average cost of goods held is recalculated each time a new delivery of goods is received. Issues are then priced out at this weighted average cost.
First Calculate the average cost per unit
average cost per unit = Total cost / total units
= ($30 + $60 + $56) / 24
= $6.08
Then calculate ending inventory cost
ending inventory cost = units at hand × average cost per unit
= 6 units × $6.08333
= $36.48
Conclusion :
The ending inventory using the periodic inventory system and the weighted average cost method is $36.48
Problem 1 16 points Total Prepare the Budgets given the following information Budgeted sales are expected to be: January 200 Units February 300 Units March 400 Units April 300 Units May 400 Units Selling Price $10 Per unit A. Prepare the sales Budget (5 points) Sales Budget January February March Quarter Budgeted sales in units 200 300 400 900 Times selling price per unit $10 $10 $10 $10 Budgeted sells in dollars $2,000 $3,000 $4,000 $9,000 B. Prepare the Production Budget (5 points)
Answer:
Sales Budget for January, February and March
January February March
Budgeted Sales Units 200 300 400
Budgeted Selling Price $10 $10 $10
Budgeted Sales Revenue $2,000 $3,000 $4,000
Production Budget for January, February and March.
January February March
Budgeted Sales Units 200 300 400
Budgeted Production Units 200 300 400
Explanation:
Sales Budget
This is the first budget that a company prepares from which all other budgets are created.
Production Budget
Since there are no closing or opening inventory targets, Budgeted Sales units equal budgeted production units.
In Japan, the _____ helps small companies identify potential export opportunities.
a. MITI
b. IMF
c. WTO
d. ITA
e. USEAC
Answer:
a. MITI
Explanation:
In Japan, the MITI helps small companies identify potential export opportunities
The full meaning of MITI his Ministry of International Trade and Industry which is the ministry which is responsible for always on the lookout for export opportunities and they are as well responsible for industry, investment, productivity as well as small and medium enterprise.
Lastly MITI also help in controlling Japan's foreign trade as well as helping to supervise the international commerce and ensuring the smooth flow of goods and service in the national economy.
Suppose that a firm makes two products, A and B. The sales mix in units for the period is 70% for A and 30 % for B. If the unit contribution margin for A is $8.04 and the unit contribution margin for B is $5.92, then the weighted-average unit contribution margin is:
Answer:
The weighted-average unit contribution margin is $7.40
Explanation:
The weighted average unit contribution margin is given by the below formula:
weighted-average unit contribution margin=Wa*Margin of A+Wb*Margin of B
Wa is the weight of product A=70% or 0.70
Margin of product A is $8.04
Wb is the weight of product B =30% or 0.30
Margin of product B is $5.92
weighted-average unit contribution margin=(0.70*$8.04)+(0.30*$5.92)
weighted-average unit contribution margin=$ 7.40
The weighted-average unit contribution margin is $7.40
What is the weighted-average unit?Although, The weighted average unit contribution margin is given by the below formula:
weighted-average unit contribution margin=Wa*Margin of A+Wb*Margin of B Wa is that the weight of product A=70% or 0.70
The margin of product A is $8.04
Wb is that the weight of product B =30% or 0.30
The margin of product B is $5.92
weighted-average unit contribution margin=(0.70*$8.04)+(0.30*$5.92)
weighted-average unit contribution margin=$ 7.40
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Tyrell recently noticed that he was receiving several catalogs and direct mail advertisements than he had in the past even though he had not requested any of them. Which of the following best explains why this is happening?
A. Tyrell was a victim of online theft.
B. Tyrell gave his personal information to a business, which then traded it to other companies and these companies then began sending him catalogs.
C. All businesses routinely have all customers' personal information.
D. Tyrell's accountant gave his information to the direct mail marketers.
Answer:
B.
Explanation:
In this particular scenario, the most likely occurrence is that Tyrell gave his personal information to a business, which then traded it to other companies and these companies then began sending him catalogs. Most companies online tend to gather as much private information from their customers and eventually sell that information to larger corporations that use it in order to increase their sales. This is done in many forms such as finding out what a client population likes and dislikes, how much money they spend, day to day activities, etc. All this information allows corporations to target specific individuals, and advertise directly to them in order to make sales.
Hiram’s Lakeside is a popular restaurant located on Lake Washington in Seattle. The owner of the restaurant has been trying to better understand costs at the restaurant and has hired a student intern to conduct an activity-based costing study. The intern, in consultation with the owner, identified three major activities and then completed the first-stage allocations of costs to the activity cost pools. The results appear below: Activity Cost Pool Activity Measure Total Cost Total Activity Serving a party of diners Number of parties served $ 33,000 6,000 parties Serving a diner Number of diners served $ 138,000 15,000 diners Serving a drink Number of drinks ordered $ 24,000 10,000 drinks The above costs include all of the costs of the restaurant except for organization-sustaining costs such as rent, property taxes, and top-management salaries. Some costs, such as the cost of cleaning the linens that cover the restaurant's tables, vary with the number of parties served. Other costs, such as washing plates and glasses, depends on the number of diners served or the number of drinks served. Prior to the activity-based costing study, the owner knew very little about the costs of the restaurant. She knew that the total cost for the month (including organization-sustaining costs) was $240,000 and that 15,000 diners had been served. Therefore, the average cost per diner was $16.
Required:
1. According to the activity-based costing system, what is the total cost of serving each of the following parties of diners? (Round your intermediate calculations and final answers to 2 decimal places.)
a. A party of four dinners who order three drinks-?
b. A party of two dinners who do not order any drinks-?
c. A party of one dinner who order two drinks-?
2. Convert the total costs you computed in (1) above to costs per diner. In other words, what is the average cost per diner for serving each of the following parties? (Round your intermediate calculations to 2 decimal places and final answers to 3 decimal places.)
a. A party of four dinners who order three drinks-?
b. A party of two dinners who do not order any drinks-?
c. A party of one dinner who order two drinks-?
Answer:
Kindly check attached picture
Explanation:
Required:
1. According to the activity-based costing system, what is the total cost of serving each of the following parties of diners? (Round your intermediate calculations and final answers to 2 decimal places.)
a. A party of four dinners who order three drinks-?
b. A party of two dinners who do not order any drinks-?
c. A party of one dinner who order two drinks-?
2. Convert the total costs you computed in (1) above to costs per diner. In other words, what is the average cost per diner for serving each of the following parties? (Round your intermediate calculations to 2 decimal places and final answers to 3 decimal places.)
a. A party of four dinners who order three drinks-?
b. A party of two dinners who do not order any drinks-?
c. A party of one dinner who order two drinks-?
Kindly check attached picture for detailed explanation.
Average cost per dinner is $12.375, $11.95, $19.50 respectively
Average cost based problem:Computation:
1.A.
Activity pool Activity rate Activity Activity cost
Parties $5.5 1 $5.5
Dinners $9.2 4 $36.8
Drinks $2.4 3 $7.2
Total $49.50
1.B.
Activity pool Activity rate Activity Activity cost
Parties $5.5 1 $5.5
Dinners $9.2 2 $18.4
Drinks $2.4 0 0
Total $23.9
1.C.
Activity pool Activity rate Activity Activity cost
Parties $5.5 1 $5.5
Dinners $9.2 1 $9.2
Drinks $2.4 2 $4.8
Total $19.50
2. Average cost per dinner
A = 49.50 / 4 = $12.375 per dinner
B =23.9 / 2 = $11.95 per dinner
C = 19.50 / 1 = $19.50 per dinner
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On April 1, 10,000 shares of $20 par common stock were issued at $24.
Required:
Illustrate the effects on the accounts and the financial statements.
Answer:
The journal entry to record this transaction would be:
April 1, 10,000 shares issued
Dr Cash 240,000
Cr Common stock 200,000
Cr Additional paid in capital 40,000
The balance sheet is affected:
Assets = Liabilities + Stockholders' equity
Cash = NA Common stock APIC
$240,000 $200,000 + $40,000
increases increases increases
The cash flow statement is also affected since cash from financing activities increases by $240,000. The statement of shareholders' equity is also affected because equity increases by $240,000.
The income statement is not affected.
Consider the following income statement for the Heir Jordan Corporation:
HEIR JORDAN CORPORATION
Income Statement
Sales $ 46,200
Costs 34,200
Taxable income $ 12,000
Taxes (30%) 3,600
Net income $ 8,400
Dividends $ 2,800
Addition to retained earnings 5,600
The balance sheet for the Heir Jordan Corporation follows. Based on this information and the income statement, supply the missing information using the percentage of sales approach. Assume that accounts payable vary with sales, whereas notes payable do not. (Leave no cells blank - be certain to enter "0" whenever the item is not a constant percentage of sales. Enter each answer as a percent rounded 2 decimal places, e.g., 32.16.)
HEIR JORDAN CORPORATION
Balance Sheet
Percentage of Sales Percentage of Sales
Assets Liabilities and Owners’ Equity
Current assets Current liabilities
Cash $ 2,450 Accounts payable $ 4,000
Accounts receivable 4,000 Notes payable 8,400
Inventory 9,000
Total $ 15,450 Total $ 12,400
Long-term debt $ 21,000
Owners’ equity
Common stock and paid-in surplus $ 14,000
Retained earnings 5,650
Fixed assets
Net plant and equipment $ 37,600 Total $ 19,650
Total assets $ 53,050 Total liabilities and owners’ equity $ 53,050
Answer and Explanation:
The preparation of the balance sheet is prepared below:-
Assets Amount Percentage Liabilities Amount Percentage
Cash 2,450 5.30% Payable 4,000 8.66%
Receivables 4,000 8.66% Notes 8,400 0
Inventory 9,000 19.48% Total Current 12,400 0
Total 15,450 33.44% Debt 21,000 0
Fixed
Assets 37,600 81.39% Common Stock 14,000 0
Total 53,050 114.83% Retained Earnings 5,650 0
Total Equity 19,650 0
Total Liabilities & OE 53,050 0
In this question, the total assets and the account payable are varied with the sales while on the other hand there is no requirement for liabilities and equity
Moreover, we divided all assets and account payable with sales of $46,200 and in other columns we put 0 as shown above
The University Store, Inc. is the major bookseller for four nearby colleges. An income statement for the first quarter of the year is presented below: University Store, Inc. Income Statement For the Quarter Ended March 31 Sales $ 800,000 Cost of goods sold 560,000 Gross margin 240,000 Selling and administrative expenses Selling $ 100,000 Administrative 110,000 210,000 Net operating income $ 30,000 On average, a book sells for $40.00. Variable selling expenses are $3.00 per book; the remaining selling expenses are fixed. The variable administrative expenses are 5% of sales; the remainder of the administrative expenses are fixed. The net operating income computed using the contribution approach for the first quarter is:
Answer: $30,000
Explanation:
Sales are $800,000 and the average price is $40. Number of units sold is;
= 800,000/40
= 20,000 units
Sales $ 800,000
Less: Cost of Goods Sold ($560,000)
Gross Margin $240,000
Less : Variable Costing
Selling Expenses (20,000 units X $3.00) ($60,000)
Administrative Expenses (5% of $ 800,000) ($40,000)
Contribution Margin $140,000
Less: Fixed Cost
Selling Expenses ($100,000 - $60,000) ($40,000)
Administrative Expenses ($110,000 -$40,000) ($70,000)
Net Operating Income $30,000
Corporation had net income for 2016 of $ 42 comma 000. GAZ had 16 comma 000 shares of common stock outstanding at the beginning of the year and 14 comma 000 shares of common stock outstanding as of December 31, 2016. During the year, GAZ declared and paid preferred dividends of $ 4 comma 500. Therefore, GAZ's earnings per share for 2016 is $ 2.50. Assume the market price of GAZ's common stock is $ 12 per share. Compute GAZ's price/earnings ratio. Select the formula, then enter the amounts to calculate the company's price/earnings ratio as of December 31, 2016. (Abbreviations used: Ave. = average, OS = outstanding, SE = stockholders' equity, shrs = shares. Round the ratio to two decimal places.) / = Price/earnings ratio / =
Answer:
GAZ's price/earnings ratio is 4.8
Explanation:
In order to calculate GAZ's price/earnings ratio we would have to calculate the following formula:
GAZ's price/earnings ratio=market value per share/earnings per share
market value per share= $ 12
earnings per share=net income- preferred dividend/Average number of common shares
earnings per share=$42,000-$4,500/(16,000+14,000)/2
earnings per share=$2.50
Therefore, GAZ's price/earnings ratio= $ 12/$2.50
GAZ's price/earnings ratio=4.8
GAZ's price/earnings ratio is 4.8
n January, Marigold company requisitions raw materials for production as follows: Job 1 $920, Job 2 $1,600, Job 3 $720, and general factory use (indirect materials) $700. Prepare a summary journal entry to record raw materials used. (Credit account titles are automatically indented when amount is entered. Do not indent manually.)
Answer and Explanation:
The summarized journal entry for using the raw material is shown below:
Work in process inventory $3,240 ($920 + $1,600 + $720) Dr
Manufacturing overhead 700 Dr
To Raw material inventory $3,940
(Being the raw material used is recorded)
For recording this we debited the work in process and factory overhead as it increased the assets and expenses and credited the raw material inventory as it decreased the assets
The calculated cost of trade credit for a firm that buys on terms of 2/10, net 30, is lower (other things held constant) if the firm plans to pay in 40 days than in 30 days.
A. True
B. False
Answer:
A. True
Explanation:
The terms of 2/10, net 30 implies that the firm is entitled to receive a 2 percent discount if it makes payment within 10 days for the goods it bought on term but the seller expects to pay full amount of the amount due in 30 days if it fails to pay within 10 days.
However, since there will be no more discount after the discount period, the cost of trade credit will continue to fall longer the payment is extended. For this question this can be demonstrated using the formula for calculating the cost of trade discount as follows:
Cost of trade discount = {[1 + (discount rate / (1 - discount rate))]^(365/days after discount)} - 1 ................... (1)
We can now applying equation (1) as follows:
For payment in 40 days
Cost of trade credit (payment in 40 days)= {[1 + (0.02 / (1 - 0.02))]^(365/40)} - 1 = 0.202436246672765, or 20%
For payment in 30 days
Cost of trade credit (payment in 30 days) = {[1 + (0.02 / (1 - 0.02))]^(365/30)} - 1 = 0.278643315029666, or 28%
Conclusion
Since the 20% calculated cost of trade credit for payment in 40 days is lower than 28% calculated cost of trade credit for payment in 30 days, the correct option is A. True. That is, the calculated cost of trade credit for a firm that buys on terms of 2/10, net 30, is lower (other things held constant) if the firm plans to pay in 40 days than in 30 days.
Phoenix Company's 2015 master budget included the following fixed budget report. It is based on an expected production and sales volume of 15,000 units
PHOENIX COMPANY Fixed Budget Report For Year Ended December 31, 2015
Sales $ 3,150,000
Cost of goods sold
Direct materials $975,000
Direct labor 240,000
Machinery repairs (variable cost) 60,000
Depreciation-plant equipment
(straight-line) 315,000
Utilities ($60,000 is variable) 180,000
Plant management salaries 190,000 1,960,000
Gross profit 1,190,000
Selling expenses
Packaging 75,000
Shipping 105,000
Sales salary (fixed annual amount) 235,000 415,000
General and administrative expenses
Advertising expense 100,000
Salaries 230,000
Entertainment expense 80,000 410,000
Income from operations $365,000
1&2. Prepare flexible budgets for the company at sales volumes of 14,000 and 16,000 units and classify all items listed in the fixed budget as variable or fixed.
3. The company's business conditions are improving. One possible result is a sales volume of approximately 18,000 units. The company president is confident that this volume is within the relevant range of existing capacity. How much would operating income increase over the 2015 budgeted amount of $365,000 if this level is reached without increasing capacity?
Answer:
Explanation:
15,000 14,000 16,000 Unit cost
Sales 3,150,000 2,940,000 3,360,000 210
Cost of goods
Direct materials 975,000 910,000 1,040,000 65
Direct labor 240,000 224,000 256,000 16
Machinery repairs 60,000 56,000 64,000 4
Utilities 60,000 56,000 64,000 4
Packaging 75,000 70,000 80,000 5
Shipping 105,000 98,000 112,000 7
Total variable expenses 1,515,000 1,414,000 1,616,000 101
Contribution 1,635,000 1,526,000 1,744,000 109
Fixed cost
Depreciation 315,000 315,000 315,000
Utilities 120,000 120,000 120,000
Plant salary 190,000 190,000 190,000
Sales salary 235,000 235,000 235,000
Advertising 100,000 100,000 100,000
salaries 230,000 230,000 230,000
Entertainment 80,000 80,000 80,000
Total fixed expenses 1,270,000 1,270,000 1,270,000
Profit 365,000 256,000 474,000
For 18,000 units
Sales - 18,000* 210 3,780,000
Variable cost (109*18) = 1,962,000
Fixed cost 1,270,000
Operating income 548,000
Increase over 2015 = 365,000 - 548,000= 183,000
A total asset turnover ratio of 5.1 indicates that: Multiple Choice For every $1 in sales, the firm acquired $5.1 in assets during the period. For every $1 in assets, the firm produced $5.1 in net sales during the period. For every $1 in assets, the firm earned gross profit of $5.1 during the period. For every $1 in assets, the firm earned $5.1 in net income. For every $1 in assets, the firm paid $5.1 in expenses during the period.
Answer:
For every $1 in assets, the firm produced $5.1 in net sales during the period.
Explanation:
The formula to compute the total asset turnover ratio is shown below:
Total Asset turnover ratio = Net Sales ÷ Average Total Asset
where,
Net sales come after deducting the sales discounts, and other expenses
And, the average total assets could be computed by taking an average of opening and closing total assets
So, the total asset turnover shows that for every $1 of assets would create $5.1 of sales
Hence, the first option is correct
Stocks X and Y have the following data. Assuming the stock market is efficient and the stocks are in equilibrium, which of the following statements is CORRECT? X Y Price $25 $25 Expected dividend yield 5% 3% Required return 12% 10% a. Stock X pays a higher dividend per share than Stock Y. b. Stock Y pays a higher dividend per share than Stock X. c. Stock Y has a lower expected growth rate than Stock X. d. One year from now, Stock X should have the higher price. e. Stock Y has the higher expected capital gains yield.
Answer:
a. Stock X pays a higher dividend per share than Stock Y.
Explanation:
stock x, dividend = $1.25
$25 = $1.25 / (12% - g)
12% - g = $1.25 / $25
12% - g = 5%
g = 7%
stock y, dividend = $0.75
$25 = $0.75 / (10% - g)
10% - g = $0.75 / $25
10% - g = 3%
g = 7%
both growth rates are equal, what varies are the dividends that the stocks yield and the required rates of return
What are the three major components of DSSs, and what do they do? How do DSSs help in tax planning? How do DSSs help in website planning and adjustment? Please state your answers in 2-3 page paper in APA format. Include citations and sources in APA style.
Answer is given below
Explanation:
Most of the DSS consists of three main components: the Data Management Module, the Model Management Module and the Dialogue Module. These modules help (1) file the request in a user-friendly way, (2) find large amounts of data to focus on relevant facts, (3) process the data through the desired model, and (4) the results. Output in one or several formats is easy to understand. These steps follow the decisive sequence described by Herbert Simon. There are actually some applications that people don't think of as DSS. Turbotax, taxcats and other tax-making applications have been developed over the years to do more than just fill out help forms. With the ultimate goal of paying taxpayers, they come up with sophisticated principles to help taxpayers create the best strategy for choosing options. For example, applications compare filing status and deduction options: which policy is less common taxes, filing as two individuals or filing jointly as spouses? Should deductions be reduced, or standard exemptions taken? Small education loan, or large education exemption? Based on the combination of taxable income and deductions taken, the apps warn customers of the possibility of being audited by the Internal Revenue Service and give them the opportunity to modify the deduction. Apps remind users of optional reductions, tell them what the exception does and make it easier for filers to make decisions. When customers complete their tax preparation for the previous year, they can plan their tax for the coming year based on their total income, type of wages (wages, occupation, capital gains, etc.). And how much the pension funds, which serve as a tax to reduce tax arrears for the coming year, can contribute to earnings and other benefits as most companies use the web as a marketing, sales and customer support tool, the decisions to make websites are very important. Some companies offer DSS designed specifically to analyze the behavior of shoppers on their sites, such as pages viewed, pages viewed, options clicked and page buyers sorted. For example, Datanatics, Inc. The G2 provides an analysis system that analyzes how visitors navigate through a site. Managers can be impressed that 30 percent of shoppers who follow a specific order of web pages are buying an item. However, the software may reveal that another unexpected upside order ends when 90 percent of shoppers buy another item. This can lead to the decision to increase those pages or buy a few pages between the home page and the last page before finishing.Moody Corporation uses a job-order costing system with a plantwide predetermined overhead rate based on machine-hours. At the beginning of the year, the company made the following estimates:
Machine-hours required to support estimated production 155,000
Fixed manufacturing overhead cost $ 653,000
Variable manufacturing overhead cost per machine-hour $ 4.70
Required:
1. Compute the plantwide predetermined overhead rate.
2. During the year, Job 400 was started and completed. The following information was available with respect to this job:
Direct materials $ 390
Direct labor cost $ 220
Machine-hours used 37
Compute the total manufacturing cost assigned to Job 400.
3. If Job 400 includes 60 units, what is the unit product cost for this job?
4. If Moody uses a markup percentage of 120% of its total manufacturing cost, then what selling price per unit would it have established for Job 400?
find- Predetermined overhead rate =
total manufacturing cost=
If Job 400 includes 60 units, what is the unit product cost for this job?
If Moody uses a markup percentage of 120% of its total manufacturing cost, then what selling price per unit would it have established for Job 400?
Answer:
Instructions are below.
Explanation:
Giving the following information:
Machine-hours required to support estimated production 155,000
Fixed manufacturing overhead cost $ 653,000
Variable manufacturing overhead cost per machine hour $ 4.70
First, we need to calculate the predetermined overhead rate.
Predetermined manufacturing overhead rate= total estimated overhead costs for the period/ total amount of allocation base
Predetermined manufacturing overhead rate= (653,000/155,000) + 4.7
Predetermined manufacturing overhead rate= $8.91 per machine hour
Job 400:
Direct materials $ 390
Direct labor cost $ 220
Machine-hours used 37
To allocate overhead, we need to use the following formula:
Allocated MOH= Estimated manufacturing overhead rate* Actual amount of allocation base
Allocated MOH= 8.91*37= $329.67
Now, we can calculate the total cost and unitary cost:
Total cost= 390 + 220 + 329.67= 939.67
Unitary cost= 939.67/60= $15.66
Finally, the selling price for Job 400:
Selling price0 939.67*1.2= $1,127.6
Bond T is a zero coupon bond and has 11 years until maturity. If the yield to maturity is 10%, the Macaulay duration of this bond is
Answer:
11 years
Explanation:
The Macauly duration of a bond is generally calculated for coupon bearing bonds sold either at par or at premium or discount values. When we are asked about the Macauly duration of a zero coupon bond, the answer is simply the time to maturity of the bond, or the bond duration. In this case, the time to maturity is 11 years which equals the Macauly duration.
A seller accepts a contingent backup offer from a second buyer and notifies the first buyer under a release clause. The first buyer decides to remove the sale of buyer's property contingency. What happens next
Answer: Completion of transaction and down payment
Explanation:
Contingency backup offer is when the seller has an already potential buyer for a property.
In this scenario, the seller would have to conclude with the first buyer to avoid fractions and disagreement in some factors and to see if the buyer can make a down payment on the propery.