Answer:
a. Riflebird Company is a SOLE proprietorship (Roger did not make any withdrawals from the business). Roger reports $45,000 net operating profit and $10,000 long-term capital loss on his tax return.
Sole proprietorships are not taxed directly ,they are pass through entities. Their sole proprietor is taxed, and since individuals get taxed differently for ordinary income than capital income, they must segregate them.
b. Riflebird Company is a C corporation (no dividends were paid during the year). Roger reports $35,000 net operating profit and $0 long-term capital loss on his tax return.
Corporations do not segregate capital gains from ordinary income, so they must include them together in their income taxes.
What are the portfolio weights for a portfolio that has 115 shares of Stock A that sell for $43 per share and 180 shares of Stock B that sell for $19 per share
Answer:
The answer is:
Stock A: 0.5912
Stock B: 0.4088
Explanation:
The amount invested in stock A:
Number of shares x price per share
115 sharesx $43
= $4,945
The amount invested in stock B:
Number of shares x price per share
180 shares x $19
$3,420
Total amount invested
$4,945 + $3,420
=$8,365
The portfolio weight for A:
$4,945/$8,365
= 0.5912
The portfolio weight for B:
$3,420 /$8,365
= 0.4088
Corporation has the following equity investments held throughout 2021–2022: Fair Value Cost 12/31/21 12/31/22 $600,000 $800,000 $760,000 What amount would be reported as accumulated other comprehensive income related to investments on the balance sheet at December 31, 2022?
Answer: $40,000 loss
Explanation:
A balance sheet is also referred to as the statement of financial position and it is a summary of financial balances of an economic agent i.e individual or organization.
The amount that would be reported as accumulated other comprehensive income related to investments on the balance sheet at December 31, 2022 will be:
= 800,000 - $760,000
= $40,000
There will be a $40,000 loss because the fair value on 12/31/21 of $800,000 is higher than the fair value of $760,000 on 12/31/22.
Gullett Corporation had $32,000 of raw materials on hand on November 1. During the month, the Corporation purchased an additional $81,000 of raw materials. The journal entry to record the purchase of raw materials would include a:
Answer:
Dr Raw materials $81, 000
Cr Accounts payable $81,000
Explanation:
Preparation of the journal entry to record the purchase of raw materials for Gullett Corporation
Since we were told that the Corporation already had the amount of $32,000 of raw materials on hand in which they later purchased an additional amount of $81,000 of the raw materials this means we are going to record the Journal entry by Debiting Raw materials with the amount of $81, 000 which is the additional amount of the raw materials purchased and to Credit Accounts payable with the same amount of $81,000.
Dr Raw materials $81, 000
Cr Accounts payable $81,000
(To record purchase of raw materials)
In the context of project management, a task duration is always the same as the amount of work (effort) it takes to finish the task. true or false?
Answer:
False
Explanation:
The statement that says that in the context of project management, a task duration is always the same as the amount of work (effort) it takes to finish the task is false because the effort is the time a person needs to finish a task while the duration is the period of time that a person has to finish it. For example, an employee has a task that takes forty hours of work to finish it but he has a month to do it. In this case, the effort is forty hours but the task duration is one month.
You are an analyst working for a mutual fund. Your job is to select stocks for the fund. You want to select only one of the following tech stocks to add into your current portfolio: Appscale, Bitwise, and Carbivore. All three stocks are similar along many metrics. They are all in the technology space and have been growing very fast over the past few years. However, it is hard to get all the information for those three stocks, and so far you have collected only the following relevant information to help you make the decision: Appscale is a tech firm that focuses on developing and integrating mobile apps. Reading through analyst reports and based on your own judgement, you think the cost of equity for Appscale is 12%. Appscale estimated earnings per share next year are $10. It pays all its earnings as dividends. Bitwise is a fintech company that is involved in Bitcoin and blockchain technology. Currently, Bitwise stock is trading at $100/share, with estimated earnings next year of $10/share. You read from their management disclosure and financial report that Bitwise retains 40% of their earnings for investments. Its reinvestment rate of return is 10%. Carbivore is a biotech firm that promotes and advocates sustainable food choices. The one period holding return is 10%.
What is the current price of Appscale?
a. $120/share
b. $83/share
c. Not enough information
Answer:
a. $120/share
Explanation:
The market value of a company is total value of a business. It is calculated by multiplying number of outstanding share with market value per share. This is also known as Market Capitalization. Cost of equity is the rate of return required by the equity holders of the company. The company decides its cost of equity based on the risk level of its business. The market price for Appscale will be:
Ke 12%
EPS $10
Market value is $120/share
(12% * $10 per share)
Suppose that a firm in a competitive market faces the following revenues and costs: At which level of production will the firm maximize profit
Answer:
Inventar (no copiar de internet) un microcuento fantástico con alguno de los siguientes hechos sobrenaturales o inverosímiles: fantasmas, transformaciones, poderes increíbles, etc.
Explanation:
Answer:
Profit max in com P = MR = MC
Explanation:
Profit max in com P = MR = MC
Raise MR>MC
Lower MR<MC
Suppose the U.S. dollar-euro exchange rate is 1.11.1 dollars per euro, and the U.S. dollar-Mexican peso rate is 0.10.1 dollars per peso. What is the euro-peso rate? nothing euros per Mexican peso. (Enter your response rounded to three decimal places.)
Answer:
Explanation:
According to the given data we have the following:
1 euro=1.11 dollars
1 peso=0.10 dollars
Hence, 11.10 peso=1.11 dollares
So, 1 euro=11.10 peso
Therefore, 1/11.10 euro=1 peso
0.09009 euro=1 peso
The euro-peso rate is 0.09009 euro=1 peso
Tiago makes three models of camera lens. Its product mix and contribution margin per unit follow: Percentage of Unit sales Contribution Margin per unit Lens A 25 % $ 38 Lens B 40 30 Lens C 35 43 Required: 1. Determine the weighted-average contribution margin per unit. 2. Determine the number of units of each product that Tiago must sell to break even if fixed costs are $187,000. 3. Determine how many units of each product must be sold to generate a profit of $73,000.
Answer:
A. $36.55
B. 5116 units
C. 7114 units
Explanation:
Requirement 1: Weighted average contribution margin per unit
Lens A = $38 x 25% = $9.5
Lens B = $30 x 40% = $12
Lens C = $43 x 35% = $15.05
Total Contribution margin per unit = $36.55
Requirement 2: Breakeven if fixed cost is $187,000
Break even point (units) = Fixed cost / Contribution per unit
Break even point (units) = 187,000/36.55
Break even point (units) = 5116 units
Lens A = 5116 x 25% = 1279 units
Lens B = 5116 x 40% = 2046 units
Lens C = 5116 x 35% = 1791 units
Requirement 3: How many units to be sold to generate $73,000 profit
Required units = Fixed cost - required profit / contribution per unit
Required units = ($187,000-$73,000)/$36.55
Required units = 7114 units
Lens A = 7114 x 25% = 1779 units
Lens B = 7114 x 40% = 2846 units
Lens C = 7114 x 35% = 2489 units
Hudson Corporation will pay a dividend of $3.60 per share next year. The company pledges to increase its dividend by 4.60 percent per year indefinitely. If you require a return of 7.00 percent on your investment, how much will you pay for the company's stock today
Answer:
The maximum that should be paid for the stock of the company today is $146.64
Explanation:
The current price of the stock can be calculated using the constant growth model of DDM. The DDM values the stock based on the present value of the expected future dividends from the stock.
The formula for the price of the stock today under the constant growth model is,
P0 = D0 * (1+g) / (r - g)
Where,
D0 is the most recent dividend paid
D0 * (1+g) is the dividend expected to be paid next period
r is the required rate of return
g is the growth rate in dividends
As we don't have a D0 but instead are given a D1, the constant growth rate will be applied from year 2 and we will calculate the price of the stock at year 1 using the constant growth model and discount is back one year to calculate the price of the stock today.
P1 = D1 * (1+g) / r - g
P1 = 3.6 * (1+0.046) / (0.07 - 0.046)
P1 = $156.9
Price of the stock today is,
P0 = P1 / (1+r)
P0 = 156.9 / (1+0.07)
P0 = $146.635514 rounded off to $146.64
Allowance for Doubtful Accounts has a debit balance of $800 at the end of the year (before adjustment), and bad debt expense is estimated at 3% of credit sales. If credit sales are $556,000, the amount of the adjusting entry to record the estimate of the uncollectible accounts
Answer:
$15,880
Explanation:
The Bad Debt Expense = $16,680 ($556,000 x 3%)
This will be credited to the Allowance for Doubtful Accounts and debited to the Bad Debt Expense account. When balancing the Allowance for Doubtful Accounts (the Uncollectible Accounts), the $800 debit balance will be netted off to arrive at $15,880 as the balance.
Allowance for Doubtful Accounts is a contra asset (Accounts Receivable) account. It is a way for prudently providing for credit losses. The Bad Debt Expense account is the account where the expense for uncollectibles for the period is charged.
"Total revenue equals the price multiplied by the quantity. The relative change price and quantity is given by the concept of ________________."
Answer:
Elasticity
Explanation:
Price elasticity of demand measures the responsiveness of quantity demanded to changes in price of the good.
If the absolute value of price elasticity is greater than one, it means demand is elastic. Elastic demand means that quantity demanded is sensitive to price changes.
Demand is inelastic if a small change in price has little or no effect on quantity demanded.
Demand is unit elastic if a small change in price has an equal and proportionate effect on quantity demanded.
I hope my answer helps you
"Suppose a firm wants to take advantage of an upward-sloping yield curve. If the firm believes that interest rates will stay constant and it wants to use the current yield curve to bolster profits, which approach should the firm follow?"a. Conservative approach b. Aggressive approach c. Maturity matching approach
Answer: b. Aggressive approach
Explanation:
The Aggressive approach refers to using short term finance to finance temporary working capital and some of permanent working capital.
When facing an upward sloping yield curve which means that interest rates are expected to.rise in future, it is better to use the current rates to bolster profit. By engaging in an Aggressive approach, the company can borrow now to fund their operations as the Aggressive approach involves using short term financing to cater for working capital. This will keep interest costs at a minimum because they will.not be calculated based on the impending increase in interest rates but rather on current short term rates.
Skolits Corp. issued 15-year bonds 2 years ago at a coupon rate of 7.3 percent. The bonds make semiannual payments. If these bonds currently sell for 103 percent of par value, what is the YTM?
Answer:
6.94%
Explanation:
The yield to maturity can be computed using excel rate function found below:
=rate(nper,pmt,-pv,fv)
nper is the coupons that bond has left to pay i.e 26 semiannual coupons in 13 years
pmt is the semiannual coupon amount i.e $1000*7.3%*6/12=36.5
pv is the current market price i.e 103%*$1000=$1030
fv is the face value of $1000
=rate(26,36.5,-1030,1000)=3.47%
semiannual yield =3.47%
annual yield =3.47% *2=6.94%
If the total debt ratio is 36%, and the allowable mortgage debt ratio is 28%, which of the following debt ratios would a loan applicant qualify for if:
a. The loan applicant's gross monthly income is $2,500, with a mortgage payment of $600
b. A car payment of $250, and minimum monthly credit card payment of $75
Answer:
The loan applicant would qualify for the mortgage debt ratio in option a because his mortgage debt ratio is 24% and the allowable mortgage debt ratio is 28%.
Explanation:
First, you have to calculate the debt ratio in each case. It is calculated by dividing the total debt by the income.
a. Debt= $600
Income= $2,500
Mortgage debt ratio=600/2,500= 0.24→24%
b. Debt=$600+$250+$75=$925
Income=$2,500
Total Debt ratio=925/2,500= 0.37→37%
The loan applicant would qualify for the mortgage debt ratio because his mortgage debt ratio is 24% and the allowable mortgage debt ratio is 28%. The loan applicant would not qualify for the total debt ratio because his ratio is 37% and the allowable total debt ratio is 36%.
Bases on the following information calculate the sustainable growth rate for Southern Light.
Profit margin = 8.4 %
Capital intensity ratio =0.45
Debt-equity ratio =0.60
Net income = $95,000
Dividends = $ 40,000
Answer:
20.91%
Explanation:
The following values is the details of a report gotten from Southern Light
Profit margin= 8.4%
Capital intensity ratio= 0.45
Debt to equity ratio= 0.60
Net income= $95,000
Dividend= $40,000
The first step is to calculate the return on equity
ROE= Profit margin×Total assets turnover×equity multiplier
= 8.4/100×1/0.45×(1+0.60)
= 0.084×2.222×1.6
= 0.2987×100
= 29.87%
The next step is to calculate the Plowback ratio
Plowback ratio= 1-(dividend/net income)
= 1-($40,000/$95,000)
= 1-0.421
= 0.579
Therefore, the sustainable growth rate can be calculated as follows
= ROE×Plowback ratio/1-ROE(Plowback ratio)
= 0.2987×0.579/1-0.2987(0.579)
= 0.17295/1-0.17295
= 0.17295/0.8271
= 0.2091×100
= 20.91%
Hence the sustainable growth rate for southern light is 20.91%
Sydney Retailing (buyer) and Troy Wholesalers (seller) enter into the following transactions. May 11 Sydney accepts delivery of $39,500 of merchandise it purchases for resale from Troy: invoice dated May 11; terms 3/10, n/90; FOB shipping point. The goods cost Troy $26,465. Sydney pays $470 cash to Express Shipping for delivery charges on the merchandise. 12 Sydney returns $1,100 of the $39,500 of goods to Troy, who receives them the same day and restores them to its inventory. The returned goods had cost Troy $737. 20 Sydney pays Troy for the amount owed. Troy receives the cash immediately. (Both Sydney and Troy use a perpetual inventory system and the gross method.) 1. Prepare journal entries that Sydney Retailing (buyer) records for these three transactions. 2. Prepare journal entries that Troy Wholesalers (seller) records for these three transactions g g
Answer:
1. Prepare journal entries that Sydney Retailing (buyer) records for these three transactions.
May 11 Sydney accepts delivery of $39,500 of merchandise it purchases for resale from Troy: invoice dated May 11; terms 3/10, n/90; FOB shipping point. The goods cost Troy $26,465. Sydney pays $470 cash to Express Shipping for delivery charges on the merchandise.
May 11, merchandise purchased on account, terms 3/10, n/90
Dr Merchandise inventory 39,500
Cr Accounts payable 39,500
May 11, freight costs
Dr Merchandise inventory 470
Cr Cash 470
12 Sydney returns $1,100 of the $39,500 of goods to Troy, who receives them the same day and restores them to its inventory. The returned goods had cost Troy $737.
May 12, merchandise is returned
Dr Accounts payable 1,100
Cr Merchandise inventory 1,100
20 Sydney pays Troy for the amount owed. Troy receives the cash immediately.
May 20, invoice is paid
Dr Accounts payable 38,400
Cr Cash 37,248
Cr Purchase discounts 1,152
2. Prepare journal entries that Troy Wholesalers (seller) records for these three transactions.
May 11 Sydney accepts delivery of $39,500 of merchandise it purchases for resale from Troy: invoice dated May 11; terms 3/10, n/90; FOB shipping point. The goods cost Troy $26,465. Sydney pays $470 cash to Express Shipping for delivery charges on the merchandise.
May 11, merchandise sold on account, terms 3/10, n/90
Dr Accounts receivable 39,500
Cr Sales revenue 39,500
Dr Cost of goods sold 26,465
Cr Merchandise inventory 26,465
12 Sydney returns $1,100 of the $39,500 of goods to Troy, who receives them the same day and restores them to its inventory. The returned goods had cost Troy $737.
May 12, merchandise is returned
Dr Sales revenue 1,100
Cr Accounts receivable 1,100
Dr Merchandise inventory 737
Cr Accounts receivable 737
20 Sydney pays Troy for the amount owed. Troy receives the cash immediately.
May 20, invoice is paid
Dr Cash 37,248
Dr Sales discounts 1,152
Cr Accounts receivable 38,400
Ace Industries has current assets equal to $3 million. The company's current ratio is 1.5, and its quick ratio is 1.1. What is the firm's level of current liabilities? What is the firm's level of inventories? Do not round intermediate calculations. Round your answers to the nearest dollar. Current liabilities: $ 2000000 Inventories:
Answer:
Current Liabilities = $2000000
Inventories = $800000
Explanation:
The current ratio and quick ratios both are measures to assess the liquidity position of businesses. These are useful indicators of how well the business is equipped to meet its current obligations using its most liquid assets.
The current ratio is calculated as follows,
Current Ratio = Current Assets / Current Liabilities
The quick ratio is calculated as follows,
Quick Ratio = (Current Assets - Inventories) / Current Liabilities
To calculate the inventory level, we must first determine the value of current liabilities using the current ratio.
1.5 = 3000000 / Current Liabilities
Current Liabilities = 3000000 / 1.5
Current Liabilities = $2000000
Using the quick ratio, we can calculate the level of inventories.
1.1 = (3000000 - Inventories) / 2000000
1.1 * 2000000 = 3000000 - Inventories
2200000 = 3000000 - Inventories
Inventories = 3000000 - 2200000
Inventories = $800000
Given the following data for Glennon Company, compute (A) total manufacturing costs and (B) costs of goods manufactured:
A B
Direct materials used $270,000 Beginning work in process $40,000
Direct labor 200,000 Ending work in process 20,000
Manufacturing overhead 300,000 Beginning finished goods 50,000
Operating expenses 350,000 Ending finished goods 30,000
A) $750,000 $790,000
B) $770,000 $750,000
C) $790,000 $810,000
D) $770,000 $790,000
2) Carr Company is considering two capital investment proposals. Estimates regarding each project are provided below:
Project Soup Project Nuts
Initial investment $400,000 $600,000
Annual net income 30,000 46,000
Net annual cash inflow 110,000 146,000
Estimated useful life 5 years 6 years
Salvage value -0- -0-
The company requires a 10% rate of return on all new investments.
Present Value of an Annuity of 1
Periods 9% 10% 11% 12%
5 3.890 3.791 3.696 3.605
6 4.486 4.355 4.231 4.111
The annual rate of return for Project Soup is:
A) 55%.
B) 7.5%.
C) 27.5%.
D) 15.0%.
Answer:
1. Glennon Company
Total manufacturing costs and costs of goods sold:
C) $790,000 $810,000
2. Carr Company
Annual Rate of Return for Project Soup:
B) 7.5%.
Explanation:
1A) Total Manufacturing costs
Direct materials used $270,000
Beginning work in process 40,000
Direct labor 200,000
Ending work in process (20,000 )
Manufacturing overhead 300,000
Total manufacturing costs $790,000
1B) Costs of goods sold:
Beginning finished goods 50,000
Costs of goods manufactured 790,000
less Ending finished goods (30,000)
Cost of goods sold $810,000
2) Project Soup Project Nuts
Initial investment $400,000 $600,000
Annual net income 30,000 46,000
Net annual cash inflow 110,000 146,000
Annual Rate of Return = Annual net income/Initial Investment
= $30,000/$400,000 x 100 = 7.5%
When deleting a check all of the following is true except: Multiple Choice It is better to delete the check than void the check in order to erase all records of the transaction The deleted check no longer appears in the check register QuickBooks changes the amount deducted in the check register to zero All of the choices are correct
Answer: It is better to delete the check than void the check in order to erase all records of the transaction
Explanation:
When a check is deleted, it should be noted that such check is being removed entirely from the system and also the transaction of the check will no longer be visible anywhere in the system.
Voiding a check mean that the amount of the transaction on the check will be changed to zero but it should be ited that a record of such transaction will still be kept in QuickBooks but deleting it will help remove the transaction in QuickBooks.
When a check is voided, the check details like the check number, account, payee, memo and date will be unchanged, even though the amount will change to zero.
Therefore, the option that says that it is better to delete the check than void the check in order to erase all records of the transaction isn't true.
In large organizations, the potential exists for different parts of an organization to pursue its own goals rather than the overall company goals. Proper _______ can help to resolve conflicts when they arise
Answer:
Objectives
Explanation:
Generally, organizations are required to set short or medium-term objectives to ensure there's an effective customer relationships management, improve worker's efficiency or productivity and more importantly to increase their revenues and profits. These objectives are usually drafted by the executive or top management of an organization and it's mandatory that all the employees are diligently working towards achieving this set goals.
In large organizations, the potential exists for different parts of an organization to pursue its own goals rather than the overall company goals. Proper objectives can help to resolve conflicts when they arise.
For instance, the sales department in a bid to meet daily or monthly targets may result to unauthorized marketing channels and procedures which may be in contrast to the objectives of the human resources department.
With proper objectives such as policies and guidelines, conflicts of goals would be mitigated as various departments would ensure their activities are in tandem with the overall company goals. This can be easily achieved by appointing functional managers who have an oversight function of supervising the employees in their departments at all times.
Exercise 10-6 Direct Materials and Direct Labor Variances [LO10-1, LO10-2] Huron Company produces a commercial cleaning compound known as Zoom. The direct materials and direct labor standards for one unit of Zoom are given below: Standard Quantity or Hours Standard Price or Rate Standard Cost Direct materials 7.30 pounds $ 2.25 per pound $ 16.43 Direct labor 0.65 hours $ 6.50 per hour $ 4.22 During the most recent month, the following activity was recorded: 16,600.00 pounds of material were purchased at a cost of $2.05 per pound. All of the material purchased was used to produce 2,000 units of Zoom. 1,200 hours of direct labor time were recorded at a total labor cost of $11,400. Required: 1. Compute the materials price and quantity variances for the month.
Answer:
Instructions are below.
Explanation:
Giving the following information:
Standard:
Direct materials 7.30 pounds $ 2.25 per pound $16.43
Actual:
16,600 pounds of material was purchased for $2.05 per pound. All of the material purchased was used to produce 2,000 units of Zoom.
To calculate the direct material price and quantity variance, we need to use the following formula:
Direct material price variance= (standard price - actual price)*actual quantity
Direct material price variance= (2.25 - 2.05)*16,600
Direct material price variance= $3,320 favorable
Direct material quantity variance= (standard quantity - actual quantity)*standard price
Standard quantity= 2,000*7.3= 14,600
Direct material quantity variance= (14,600 - 16,600)*2.25
Direct material quantity variance= $4,500 unfavorable
Misty, Ibtihaj, and Taraji, all African Americans, work in the advertising department of a large cosmetics company with a multi-cultural employee base. One day, while eating lunch with Misty and Ibtihaj, Taraji noted that most of the counter displays and advertisements for the company’s products featured light-brown-skinned women. The women discussed the problems with this approach to advertising and decided that the major problem was that women of other skin tones had no way to know what the product would look like on their skin. They developed an advertising campaign that included women of a wide spectrum of skin tones. How has diversity awareness most benefited this company? Group of answer choices It has provided a narrower range of perspectives for more critical analysis of the issues. It has given the company an edge in hiring by allowing it to attract and retain the best personnel. It has provided less conformity to norms of the past and improved the level of creativity. It has broadened the marketing efforts to include a wider customer base which could improve sales.
Answer:
It has broadened the marketing efforts to include a wider customer base which could improve sales.
Explanation:
Advertising to a broader customer base will both convince that larger customer base that the company has something to offer. For many, the obvious diversity awareness of the company will be an additional factor attracting increased sales and a more diverse hiring pool.
A company issued 6-year, 8% bonds with a par value of $450,000. The market rate when the bonds were issued was 7.5%. The company received $454,500 cash for the bonds. Using the straight-line method, the amount of recorded interest expense for the first semiannual interest period is:
Answer:
$17,667
Explanation:
Premium on bonds
= $454,000 - $450,000
= $4,000
Cash interest paid
= $450,000 × 8% × 6/12
= $18,000
Amortization of premium for each period
= $4,000 ÷ 12
= $333
Therefore,
Interest expense
= $18,000 - $333
= $17,667
You are given the following information for Ted’s Dread Co.: sales = $82,000; costs = $57,700; addition to retained earnings = $7,500; dividends paid = $3,320; interest expense = $3,030; tax rate = 25 percent. Calculate the depreciation expense for the company.
Answer:$6,843.33=Depreciation
Explanation:
To Calculate the depreciation expense for the company
Net income = Dividends + Addition to retained earnings
Net income = $3,320 + 7,500
Net income = $10,820
Also,
Net income = Taxable income - (Taxable income)(Tax rate)
Net income = Taxable income(1 - Tax rate)
Therefore,
Taxable income = Net income / (1 - Tax rate)
Taxable income = $10,820 / (1 - 0.25
Taxable income = $10,820/0.75 =14,426.67
But
EBIT -interest = taxable income,So
EBIT = Taxable income + Interest
EBIT = $14,426.67+3,030
EBIT = 17,456.67
EBIT = Sales - Costs - Depreciation
$17,456.67 = $82000 - 57,700 - Depreciation
$17,456.67= 24,300-Deprecistion
Depreciation =24,300-17456.67 =
$6,843.33
On December 31, 2020, McDaniel Company had $1,200,000 of short-term debt in the form of notes payable due February 2, 2021. On January 21, 2021, the company issued 25,000 shares of its common stock for $38 per share, receiving $950,000 proceeds after brokerage fees and other costs of issuance. On February 2, 2021, the proceeds from the stock sale, supplemented by
Answer and Explanation:
The preparation is presented below:
McDaniel Company
Partial balance sheet
Particulars Amount
Current liabilities
Note payable $250,000
Long term debt
Note payable refinance $950,000
Total liabilities $1,200,000
We simply added the long term debt and the current liabilities so that the total liabilities could come
The tests of whether a diversified company's businesses exhibit resource fit do not include whether:
a. the corporate parent has sufficient cash to fund the needs of its individual businesses and pay dividends to shareholders without having to borrow money.
b. the excess cash flows generated by cash cow businesses are sufficient to cover the negative cash flows of its cash hog businesses.
c. the company has adequate financial strength to fund its different businesses and maintain a healthy credit rating.
d. a business adequately contributes to achieving the corporate parent's performance targets.
e. the corporate parent has or can develop sufficient resource strengths and competitive capabilities to be successful in each of the businesses it has diversified into.
Answer: a. the corporate parent has sufficient cash to fund the needs of its individual businesses and pay dividends to shareholders without having to borrow money.
Explanation:
Resource fit refers to a situation where the various businesses under a company have adequate access to resources from the parent company to enable them to be successful and that the parent company should not only be able to fund these businesses but also have the skills required to run them.
All the options exhibit this except option A. This is because the company should be able to fund its businesses regardless of if it is by debt or otherwise. They just need to be able to fund the businesses should the need arise.
The first step in writing a report is to ________. a. prepare a work plan b. determine your research strategy c. understand the problem or assignment clearly d. compose the first draft
Answer:
understand the problem or assignment clearly
Explanation:
It is important to understand what one is asked to do clearly. If one doesn't understand the assignment clearly, it would negatively affect the project and one would end up doing the wrong thing.
I hope my answer helps you
The first step in writing a report is to ________ c. understand the problem or assignment clearly.
The Steps to followBefore embarking on the report writing process, it is essential to have a clear understanding of the problem or assignment at hand. This involves carefully analyzing the requirements, objectives, and scope of the report.
By gaining a comprehensive understanding, you can outline the structure, gather relevant information, and establish a coherent approach. It also enables you to identify potential challenges and devise a well-thought-out strategy.
Option C is correct/.
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Vargas, Inc. sold goods with a selling price of $ 54,000 in 2019 and estimated 4%warranty expense for the year. Customers complained of defects, and goods with a cost of $ 3,500 had to be replaced. Which of the following is the correct journal entry for honoring the warranties with goods?
A. Estimated Warranty Payable 1,500 Cash 1,500B. Estimated Warranty Payable 1,500 Warranty Expense 1,500C. Warranty Expense 1,500 Merchandise Inventory 1,500D. Estimated Warranty Payable 1,500 Merchandise Inventory 1,500
Answer:
Estimated Warranty Payable 1,500 Debit
Merchandise Inventory 1,500 Credit
Explanation:
Vargas, Inc.
Sales $ 54,000
Warranty 4%
Defected Items $ 3500
The Estimated Warranty Payable is a deferred liability and is posted in the journal unless paid . It is debited when an equal amount of merchandise inventory is credited . An equal amount of inventory is credited to honor the warranty charges which are a liability of the seller if the deal is not accordingly set. So the correct entry is
Estimated Warranty Payable 3,500 Debit
Merchandise Inventory 3,500 Credit
The amount is equal to the defected items claimed. But from the given choices it is
Estimated Warranty Payable 1,500 Debit
Merchandise Inventory 1,500 Credit
Accounts receivable is classified on the balance sheet as a current asset. current liability. noncurrent asset. long-term liability.
Answer: Current Asset
Explanation:
Accounts receivable is defined as money owed to the company by its customers for goods or services rendered that is to say When a company provides goods or render services to another customer or company but is awaiting payment on a short term basis, then the company documents the accounts receivable on a balance sheet as a current asset.
it is recorded as current asset because under legal obligations, the company will receive cash in due time,usually within a year that is why companies who render credit based goods and services set payment terms and conditions to monitor and ensure payment because this affects the company liquidity.
A North Face retail store in Chicago sells 500 jackets each month. Each jacket costs the store $100 and the company has an annual holding cost of 25 percent. The fixed cost of a replenishment order (including transportation cost) is $100. The store currently places a replenishment order for Q.
1. What is the annual holding and ordering cost?
2. On average, how long does a jacket spend in inventory?
3. If the retail store wants to minimize ordering and holding cost, what order size do you recommend?
4. How much would the optimal order reduce holding and ordering cost relative to the current policy?
Answer:
(1) The annual holding cost is =$6250, The ordering costs is = 500 units
(2) The total cost is = $7450
(3)224 unit
(4) $1,864.30
Explanation:
Solution
Given that:
The annual demand = 520 units * 12
= 6,240 units
The cost per order = $100 per order
The Carrying Cost = 0.25% * $100
= 25 per unit per year
Thus
(1) The Ordering quantity = 500 units every month
The annual holding cost =0.5*quantity ordered*holding cost
The Annual Holding cost = 0.5*500*25
Annual Holding cost =$6250
(2) The ordering (Annual)cost = number of orders *cost per order
Annual ordering cost =(500*12/500)*100
Annual ordering cost =$1200
Total cost = 6250+1200=7450
(3)Thus
EOQ=(2*D*S/h)^0.5
EOQ=(2*6240*100/25^)0.5
EOQ=223.43
=224 unit
(4)The ordering cost =(6240/224)*100=2785.70
Holding cost=0.5*224*25
=2800
Total cost= 2785.70+2800
Total cost=5585.70
Total savings = 7450 - 5585.70
= $1,864.30