Answer:
May deduct 100,000 in year 2 because the amount weren’t fixed at end of year 1 reason been that the employees are tend to be eligible to receive the bonuses only in a situation where they are employed on date that bonuses were been paid.
Explanation:
Calculation of How much of the accrued bonuses can Jorgensen deduct in year 1
March 1 of Year 2
Ken 40,000
Jayne30,000
Jill20,000
Justin 10,000
Total 100,000
In March 1 of year 2 the amount of $ 100,000 may
likely be deducted reason been that it was paid within 2 and a half months of year end.
Since we were told that Jorgensen paid the bonuses to employees on March 1 of year 2 and was as well told that the employee remain employed with Jorgensen on the date of the payment in order to receive the bonus this means that May deduct 100,000 in year 2 because the amount weren’t fixed at end of year 1 reason been that the employees are tend to be eligible to receive the bonuses only in a situation where they are employed on date that bonuses were been paid.
Dartford Company reported the following financial data for one of its divisions for the year; average investment center total assets of $4,100,000; investment center income $700,000; a target income of 12% of average invested assets. The residual income for the division is:
Answer:
$208,000
Explanation:
Calculation for Dartford Company residual income
Using this formula
Residual income=Investment center income -(Target income percentage of average invested assets ×Average investment center total assets)
Let plug in the formula
Residual income =$700,000-(12%×$4,100,000)
Residual income =$700,000 - $492,000
Residual income =$208,000
Therefore The residual income for the division is: $208,000
Cash received from customers includes all $139,000 of the accounts receivable that were outstanding at November 30, 2017. Accounts receivable at December 31, 2017 totaled $141,000. Accounts payable (to suppliers of inventory) decreased by $19,000 from November 30, 2017 to December 31, 2017. The balance in the inventory account decreased by $39,000 over the same period. Required: What is gross profit for the month of December under accrual accounting
Answer:
Gross profit from the month of December is $238000
Explanation:
Question is incomplete but the missing part is:
Cash received from customer during december 2017 - 387,000
Cash paid to supplier for inventory during december 2017 - 131,000
Accrual basis revenues
Particulars Amount $
Cash received from customer 387000
during December 2017
Cash received in December for -139000
November accounts receivable
December sales made on account 141000
collected in January
Accrual basis revenues 389000
Accrual basis expenses
Particulars Amount $
Cash paid to suppliers for inventory 131000
during December 2017
Payments for inventory purchased -19000
and used in November
Inventory purchased in November 39000
but not used in December
Accrual basis expenses 151000
Gross profit from the month of December= Accrual basis revenues - Accrual basis expenses
Gross profit = 389000 - 151000
Gross profit = $238000
1. Which of the following measures is an evaluation of a firm's ability to pay current liabilities?
A. Acid-test ratio.
C. Both (a) and (b).
B. Current ratio.
D. None of the above
Answer:
B. Current ratio
Current ratio is a comparison of current assets to current liabilities, calculated by dividing your current assets by your current liabilities.
Current ratio is an evaluation of a firm's ability to pay current liabilities. Thus, the correct answer is option B.
What is an current ratio?The current ratio is a liquidity ratio that measures a company's ability to pay short-term or one-year obligations. It explains to investors and analysts how a company can maximise its current assets on its balance sheet in order to pay off its current debt and other payables.
A current ratio that is comparable to or slightly higher than the industry average is generally regarded as acceptable. A lower current ratio than the industry average may indicate a greater risk of distress or default. Similarly, if a company's current ratio is very high in comparison to its peer group, it indicates that management may not be utilising its assets efficiently.
Therefore, current ratio is the correct answer.
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Suppose the government taxes the wealthy at a higher rate than it taxes the poor and then develops programs to redistribute the tax revenue from the wealthy to the poor. This redistribution of wealth is a. is more efficient and more equal for society. b. is more efficient but less equal for society. c. is more equal but less efficient for society. is less equal and less efficient for society.
Bridget drinks three soda during a particular day. The marginal benefits she enjoys from drinking the third soda. a. can be thought of as the total benefit Bridget enjoys by drinking three sodas minus the total benefit she would have enjoyed by drinking just two sodas. b. determines Bridget's willingness to pay for the third soda. c. is likely different from the marginal benefit provided to Bridget by the second soda.
Answer:
1. c. is more equal but less efficient for society
2. All of the above
Explanation:
1. When taxes reduce the income going to the wealthy and instead redistributes it to the poorer members of society, it increases equality because the poorer members will have some form of income to bridge the gap between them and the rich. However, this may not be good for the efficiency of the society. This is because increasing the income on the wealthier will both reduce the income they have for investment as well as their willingness to work knowing that they will lose some of their rewards to taxes. These 2 things will reduce the output of the society thereby hurting its efficiency.
2. Marginal benefit in terms of production for instance is the extra benefit gained from producing one extra good. It can therefore be calculated by subtracting the total benefit of all the other produced goods from the total benefits of all produced goods including the additional one. In the same way, the marginal benefit of Bridget drinking the third soda can be thought of as the total benefit Bridget enjoys by drinking three sodas minus the total benefit she would have enjoyed by drinking just two sodas.
The marginal benefit that Bridget will get from drinking the third soda will indeed determine what she will pay for it. If she feels that it costs more to her than what she will benefit, she will not buy.
As more of a good is consumed, the marginal benefit decreases in general and is almost never the same. For Bridget therefore, the marginal benefit of the third soda is likely different from the marginal benefit provided to Bridget by the second soda.
Suppose the most you would be willing to pay to have a freshly washed car before going out on a date is $8.00. The smallest amount for which you would be willing to wash someone else's car is $5.50. You are going out this evening and your car is dirty. How much economic surplus would you receive from washing it
Answer:
1. The most you would be willing to pay for having a freshly washed car before going out on a
date is $6. The smallest amount for which you would be willing to wash someone else's car is
$3.50. You are going out this evening, and your car is dirty. How much economic surplus
would you receive from washing it?
The economic surplus from washing your dirty car is the benefit you receive from doing so ($6)
minus your cost of doing the job ($3.50), or $2.50.
2. To earn extra money in the summer, you grow tomatoes and sell them at the farmers' market
for 30 cents per pound. By adding compost to your garden, you can increase your yield as
shown in the table below. If compost costs 50 cents per pound and your goal is to make as much
money as possible, how many pounds of compost should you add?
Pounds
of
compost
Pounds
of
tomatoes
Marginal
Cost
($)
Marginal
Benefit
(pounds)
Marginal
Benefit
($)
Net
Benefits
Marginal
Net
Benefits
0 100 ---- 0 --- 0 ---
1 120 0.50 20 6.00 5.50 5.50
2 125 0.50 5 1.50 6.50 1.00
3 128 0.50 3 0.90 6.90 0.40
4 130 0.50 2 0.60 7.00 0.10
5 131 0.50 1 0.30 6.80 - 0.20
6 131.5 0.50 0.5 0.15 6.45 - 0.35
The benefit of adding a pound of compost is the extra revenue you’ll get from the extra tomatoes
that result. The cost of adding a pound of compost is 50 cents. By adding the fourth pound of
compost you’ll get 2 extra pounds of tomatoes, or 60 cents in extra revenue, which more than
covers the 50-cent cost of the extra pound of compost. But adding the fifth pound of compost
gives only 1 extra pound of tomatoes, so the corresponding revenue increase (30 cents) is less than
the cost of the compost. You should add 4 pounds of compost and no more.
3. Residents of your city are charged a fixed weekly fee of $6 for garbage collection. They are
allowed to put out as many cans as they wish. The average household disposes of three cans of
garbage per week under this plan. Now suppose that your city changes to a "tag" system. Each
can of refuse to be collected must have a tag affixed to it. The tags cost $2 each and are not
reusable. What effect do you think the introduction of the tag system will have on the total
quantity of garbage collected in your city? Explain briefly.
In the first case, the cost is $6/week no matter how many cans you put out, so the cost of
disposing of an extra can of garbage is $0. Under the tag system, the cost of putting out an extra
can is $2, regardless of the number of the cans. Since the relevant costs are higher under the tag
system, we would expect this system to reduce the number of cans collected.
Explanation:
Which of the following statements is CORRECT?a. Because of their simplified organization, it is easier for proprietors and partnerships to raise large amounts of outside capital than it is for corporations. b. Bond covenants are an effective way to resolve conflicts between shareholders and managers. c. One advantage to forming a corporation is that the owners of the firm have limited liability. d. Corporations face few regulations and more favorable tax treatment than do proprietorships and partnerships. e. Managers who face the threat of hostile takeovers are less likely to pursue policies that maximize shareholder value compared to managers who do not face the threat of hostile takeovers.
Answer:
c. One advantage to forming a corporation is that the owners of the firm have limited liability.
Explanation:
A company is characterized as a business entity owned by shareholders and regulated by the appointed board of directors bodies. A company is a legal entity that implies it can sue and be taken to court. It can be entered into a contractual agreement, too.
Therefore the correct option is c. as it says that in the corporation the business owners have the limited liability and i.e true statement
The company that you manage has invested $5 million in developing a new product, but the development is not quite finished. At a recent meeting, your salespeople report that the introduction of competing products has reduced the expected sales of your new product to $1.5 million. If it would cost $2 million to finish development and make the product, you go ahead and do so. The most you should pay to complete development is $_______million.
Answer:
You should pay "$3" million to complete the development.
Explanation:
The possibility you've already plunged $5 million is therefore no longer important to either calculation, although this money disappears. All counts now would be the small chance of gaining money. When you are investing around $1 million and are able to produce $3 million in funding, users earn $2 million in gross income, so clients will.You seem entitled to say that perhaps a gross of $3 million has indeed been wasted to the venture, and you really should not even have begun it. That would be real, however, if you ever don't invest about $1 million extra you apparently can't have any profits and total damages will have been $5 million.And therefore what counts has never been the overall income, but the incremental benefit that you will receive. In reality, you'd pay approximately $3 million to feel a sense of achievement, not much more, and towards the bottom, you won't increase income.
Haag Corp.'s 2021 income statement showed pretax accounting income of $2,500,000. To compute the federal income tax liability, the following 2021 data are provided:
Income from exempt municipal bonds $ 100,000
Depreciation deducted for tax purposes in excess of depreciation deducted for financial statement purposes 200,000
Enacted corporate income tax rate 20%
Required:
Compute the amount that Haag should record for income tax payable.
Answer:
$440,000
Explanation:
The first is to calculate the taxable profits and taxable profit can be calculated as under:
Taxable Profit = Pre-Tax Accounting Profit - Tax allowable expenses not deducted + Tax disallowed expenses deducted previously - Tax disallowed Income added previously - Tax allowed income not added in accounting profits
Here
Pre-Tax Accounting Income is $2,500,000
Municipal Bond Income is the Tax Disallowed Income added previously to accounting profits and must be eliminated from it at $100,000
Depreciation for tax purposes which is in excess of the book depreciation allowed is $200,000 and is Tax allowed Expenses not deducted.
By putting the values, we have:
Taxable Profit = $2,500,000 - $200,000 - $100,000
Taxable Profit = $2,200,000
Now we will compute the income tax payable at 20%
Tax Payable = 20% * $2,200,000 = $440,000
Income tax payable is the compulsory charge to be paid by the individual or company earning incomes over the exempt slab rates. Tax payable is computed on the taxable income, which is computed by deducting the deductible expenses and incomes from the net profit earned during a particular financial period.
The amount of income tax payable by Haag is $440,000
Computation:
The taxable income and the income tax payable are shown in the image attached below.
The procedure to compute the tax liability is:
1. Determine the pre-tax accounting income that is given $2,500,000.
2. Deductions like tax allowable expenses, tax allowed incomes, etc. In this case, the deductions are the exempt income from municipal bonds and the deduction of depreciation amount as it was recorded in the financial statement.
3. The amount determined is taxable income over which the 20% income tax rate will be charged.
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Regarding partnering in cooperative alliances, entrepreneurial new companies may seek_____________ while more established companies may need__________.
Answer:
Investment capital; new technological knowledge.
Explanation:
Regarding partnering in cooperative alliances, entrepreneurial new companies may seek investment capital while more established companies may need new technological knowledge.
Cooperative alliances are self-governing and independent association of individuals who voluntarily come together, in order to solve their common cultural, social and economical challenges and aspirations via the jointly owned entity.
When entrepreneurial new companies they would require an investment capital in order to float their respective businesses and as such would request for such capital from the cooperative alliance they belong to.
On the other hand, more established companies would be very much interested in seeking for new technological knowledge since they're well grounded in the business financially. The new technological knowledge would help them to operate efficiently and achieve their organizational goals, aims and objectives.
An entrepreneur is looking to open a restaurant in a town with only one other restaurant. The incumbent restaurant is very successful with high profits. Which of the following business strategies are most likely to allow the entrepreneur to start a profitable restaurant? Select all that apply. Offer the most popular dish served by the incumbent restaurant. Open the restaurant location near the incumbent restaurant. Use new technology and business practices to cut variable costs lower than the incumbent restaurant. Specialize in a type of cuisine not served by other restaurants in the region.
Answer:
Options C and D would be the correct options.
Explanation:
The technological innovation will decrease costs and raise income, even though the other establishment launches a trade dispute, it seems to be profitable. Specializing in some other quality of diet creates significant consumers and that could stick to something like a restaurant that will boost the product revenue and profit.Fining the least expensive could begin price competition and that it's necessary to play on quality to make costing fewer costly. The upscale steakhouse may have cheaper price capacities than that of the new ones. Specializing in almost the same product will boost rivalry, although with the old store, that the very first leading benefit is.Many alternatives have no relation to the given instance. Therefore the answer to the above seems to be the right one.
Computing first-year depreciation and book value
At the beginning of the year, Austin Airlines purchased a used airplane for $33,500,000. Austin Airlines expects the plane to remain useful for five years (4,000,000 miles) and to have a residual value of $5,500,000. The company expects the plane to be flown 1,100,000 miles during the first year.
Requirements
1. Compute Austin Airlinesâs first-year depreciation expense on the plane using the following methods:
a. Straight-line
b. Units-of-production
c. Double-declining-balance
2. Show the airplaneâs book value at the end of the first year for all three methods.
Answer:
1. Compute Austin Airlines' first-year depreciation expense on the plane using the following methods:
a. Straight-line
depreciation expense for first year = ($33,500,000 - $5,500,000) / 5 = $5,600,000 per year
b. Units-of-production
depreciation per mile = ($33,500,000 - $5,500,000) / 4,000,000 = $7 per mile
depreciation expense for first year = $7 x 1,100,000 = $7,700,000
c. Double-declining-balance
depreciation expense for first year = 2 x 1/5 x $33,500,000 = $13,400,000
2. Show the airplane's book value at the end of the first year for all three methods.
a. Straight-line
book value at end of first year = $27,900,000
b. Units-of-production
book value at end of first year = $25,800,000
c. Double-declining-balance
book value at end of first year = $20,100,000
Explanation:
Purchase cost = $33,500,000
useful life of 5 years (or 4,000,000 miles) and residual value of $5,500,000
expected use during first year of 1,100,000 miles
On June 30, 2021, the Esquire Company sold merchandise to a customer and accepted a noninterest-bearing note in exchange. The note requires payment of $40,000 on March 31, 2022. The fair value of the merchandise exchanged is $37,600. Esquire views the financing component of this contract as significant. Required: 1. Prepare journal entries to record the sale of merchandise (omit any entry that might be required for the cost of the goods sold), any December 31, 2021 interest accrual, and the March 31, 2022 collection. 2. What is the effective interest rate on the note
Answer:
1. Prepare journal entries to record the sale of merchandise (omit any entry that might be required for the cost of the goods sold), any December 31, 2021 interest accrual, and the March 31, 2022 collection.
June 30, 2021, merchandise sold in exchange for note receivable
Dr Notes receivable 40,000
Cr Sales revenue 37,600
Cr Unearned interest revenue 2,400
December 31, 2021, accrued interests (= $2,400 x 6/9)
Dr Unearned interest revenue 1,600
Cr Interest revenue 1,600
March 31, 2022, note receivable is collected
Dr Cash 40,000
Cr Note receivable 40,000
Dr Unearned interest revenue 800
Cr Interest revenue 800
2. What is the effective interest rate on the note
effective period rate = $2,400 / $37,600 = 6.3829% (for 9 months)
annual rate = 6.3829% x 12/9 = 8.51%
At the organizational level, the Team Leadership Model (TLM) suggests that leaders examine the ________ that may be impacting their team.
Answer:
Reward systems
Explanation:
The Team Leadership is a model that provides a Working environment where members are accountable to the coach and also to the team as a whole.
Team-based reward systems can help increase motivation and collaboration among members of a team, this would help the team goals to be better integrated with better objectives and also serve as a way of getting the whole team to improve
10) Financial intermediaries can substantially reduce transaction costs per dollar of transactions
because their large size allows them to take advantage of
Answer: D) economies of scale.
Explanation:
Economies of scale refers to when an entity is able to reduce its total costs as quantities of the good causing the costs increase.
Financial Intermediaries such as Commercial banks, Mutual funds, Investment banks etcetera have a lot of funds available for trade which they use to execute large trades. As a result, the costs on average are lower or them per transaction as opposed to traders executing with lower volumes. For example, when purchasing shares they will be able to negotiate better fees with stockbrokers because they are buying a lot of shares as opposed a single buyer trading.
Transactions for Jayne Company for the month of June are presented below.
June
1 Issues common stock to investors in exchange for $5,000 cash.
2 Buys equipment on account for $1,100.
3 Pays $740 to landlord for June rent.
12 Sends Wil Wheaton a bill for $700 after completing welding work.
Identify the accounts to be debited and credited for each transaction.
Account Debited Account Credited
june 1
june 2
june 3
june 12
Answer:
June 1 , common stocks are issued
Dr Cash 5,000
Cr Common stock 5,000
June 2 , equipment purchased on account
Dr Equipment 1,100
Cr Accounts payable 1,100
June 3 , monthly rent paid
Dr Rent expense 740
Cr Cash 740
June 12, service revenue
Dr Accounts receivable 700
Cr Service revenue 700
"The gross earnings of factory workers for Dinkel Company during the month of January are $400,000. The employer's payroll taxes for the factory payroll are $80,000. Of the total accumulated cost of factory labor, 75% is related to direct labor and 25% is attributable to indirect labor. Prepare the entry to record the factory labor costs for the month of January"
Answer and Explanation:
The Journal entry is shown below:-
Factory labor Dr, $480,000
To Factory wages payable $400,000
To Employee payroll taxes payable $80,000
(Being factory labor cost is recorded)
Here we debited the factory labor as it increased the expenses and we credited the factory wages payable and employee payroll taxes payable as it also increased the liabilities
What is the current price for a bond worth $4,000 that has a price quote of 50?
Answer:
$ 2,500 as far as i know.
Explanation:
Required information Going on a Business Trip to China Business professionals who are high in cultural intelligence possess skills and attributes to work effectively with members of other cultures. They respect, recognize, and appreciate cultural differences; possess curiosity and interest in other cultures; avoid inappropriate stereotypes; adjust conceptions of time and show patience; manage language differences to achieve shared meaning; understand cultural dimensions; establish trust and show empathy across cultures; approach cross-cultural work relationships with a learner mind-set; and build co-cultures of cooperation and innovation. In this exercise, you evaluate the experiences of an operations manager going to China to examine factories and potentially take bids for some of your company's operations. You will notice differences in communication across cultures and analyze the interactions in terms of cultural intelligence and the following cultural dimensions: individualism and collectivism, egalitarianism and hierarchy, future orientation, assertiveness, and humane orientation. Read the case below and answer the questions that follow. Recently, senior managers at Judith Carey's company concluded that some of the company's operations needed to be produced in lower-wage locations for the company to stay profitable. They placed Judith in charge of learning about options in China, a country she had never visited. After several months of making contacts via phone and email, Judith traveled to China to meet some potential manufacturers. She brought two of her staff members along with her on the trip. She also asked Mei, one of the company's sales representatives in China, to join the group and act as an interpreter. Mei had joined the company's sales department in China two years ago. Because she gained a marketing degree in a Canadian university, Mei's English was excellent. The first stop on the trip would be with representatives of the Shunde Manufacturing (SDM) Company, a potential manufacturer for the company's line of dolls. After a long plane trip and a sleepless night at a hotel in Shanghai, Judith started the first day of work in China tired and slightly disoriented. Her team first met the company's president, Bo Chen, and seven other men from SDM for lunch. Judith was seated next to the company's president for the duration of the two-hour lunch, which included course after course of foods Judith had never seen or eaten before. Judith sampled most of the dishes but was clearly uncomfortable. During the meal, the company president asked Judith, "Ms. Carey, what are your impressions of China?" Judith replied, "Well, Bo, I don't really know too much. I'm not quite used to the air here, with all of the pollution. Of course, I've always known about the one-child policy, but not much else. Do you think the policy is fair?" Bo stated, "China and America must solve their problems in their own ways." Then, he talked about the final dish for the meal—a fish. He explained that ending the meal with the fish had special symbolism in China and signaled a prosperous future for their relationship. Near the end of lunch, Bo told Judith, "We'll meet for dinner and a reception later at 6 p.m. I've arranged a tour for you this afternoon. Several of our staff members will take you for a walk along the river, to some beautiful Chinese gardens, and to the Shanghai Museum." Judith was a bit dismayed. She wasn't really in the mood for touring. Rather, she wanted to get down to business, but she obliged for the afternoon tour. During the tour, Judith asked Mei, her interpreter, "What should I do this evening to make sure we can talk about business?" Mei replied, "Tonight, you should make friends with President Chen. Give him a nice toast in front of his employees. Enjoy the wonderful food. Tomorrow you can talk about business." That evening, Judith and her team were taken to a large private room at a restaurant. The SDM Company was now represented by more than 20 employees. Judith and Bo spent most of the dinner discussing family and professional experiences. Judith enjoyed the food, gave a toast mentioning "future cooperation" and thanking "President Chen for his hospitality," and even sang karaoke when invited. The next day, Judith arrived at the company's headquarters. She and her team discussed options for a partnership with SDM representatives for the duration of the day. At the end of the day, both parties agreed to continue their conversations in approximately one month. The first day of the visit is largely spent with lavish banquets and events. Which of the following cultural dimensions can best explain this situation? A-future orientation B-assertiveness C-egalitarianism and hierarchy D-individualism and collectivism
Answer:
The answer is D. individualism and collectivism
Explanation:
Individualism and collectivism looks at the relationship the individual has with others. In high individual ranking, individuality and individual rights are paramount within the society. Judith is from the US where society appreciates a more individualistic attitude and relatively loose bonds with others. On the other hand, Bo is from China where people are integrated from birth into strong cohesive in-groups and the extended family – grandparents, uncles and aunts – is protected in exchange for unquestioned loyalty.
Presented here are long-term liability items for Skysong, Inc. on December 31, 2017.
Bonds payable (due 2021) $920,000
Notes payable (due 2019) 84,000
Discount on bonds payable 23,000
Prepare the long-term liabilities section of the balance sheet for Skysong, Inc.
Answer:
Skysong, Inc.
Balance Sheet (Partial)
As on December 31, 2017.
Liabilities
Long Term Liabilities
Bonds payable (due 2021) $920,000
Notes payable (due 2019) $84,000
Discount on bonds payable ($23,000)
Total Long Term Liabilities $981,000
Explanation:
Long term liabilities are all those liabilities that will be paid after one year's time. As Bond Payable is due in 2021 and needs to be paid after 4 years it is classified as long term liabilities. Note Payable is also due in 2019 and needs to be paid after 2 years it is also classified as long term liabilities.
The rest of the world sees problems; Martin sees opportunity. He made money in real estate and lost it when the recession hit. But soon he found another way to earn a living and has become wealthy again. Martin is high in ________.
Answer:
Resilience
Explanation:
In psychology, the term resilience refers to the process of coping with trauma, tragedy or adversity and adapt to it. But it doesn't only refer to the process of adaptation but actually it involves personal growth. In other words, the person grows thanks to the adversity, the person also sees problems as an opportunity to learn and become a better person.
In this example, Martin sees opportunity where the rest of the world sees problems, he made money and lost it but he's wealthy again. We can see that Marty has coped with adversity (the recession) but he adapted to it and he found a way to go through that and earn a living and become wealthy again, thus, this is an example of high resilience.
Prescott Football Manufacturing had the following operating results for 2019: sales = $30,174; cost of goods sold = $21,740; depreciation expense = $3,512; interest expense = $544; dividends paid = $849. At the beginning of the year, net fixed assets were $20,046, current assets were $3,029, and current liabilities were $3,776. At the end of the year, net fixed assets were $23,077, current assets were $4,447, and current liabilities were $3,077. The tax rate for 2019 was 21 percent.
a. What is net income for 2016? (Do not round intermediate calculations and round your answer to the nearest whole number, e.g., 32.)Net income $b. What is the operating cash flow for 2016? (Do not round intermediate calculations and round your answer to the nearest whole number, e.g., 32.)Operating cash flow $c. What is the cash flow from assets for 2016? (A negative answer should be indicated by a minus sign. Do not round intermediate calculations and round your answer to the nearest whole number, e.g., 32.)Cash flow from assets $Assume no new debt was issued during the year.d. What is the cash flow to creditors for 2016? (Do not round intermediate calculations and round your answer to the nearest whole number, e.g., 32.)Cash flow to creditors $e. What is the cash flow to stockholders for 2016? (A negative answer should be indicated by a minus sign. Do not round intermediate calculations and round your answer to the nearest whole number, e.g., 32.)Cash flow to stockholders $
Answer:
Prescott Football Manufacturing
a. Net Income for 2019:
2019: sales = $30,174
cost of goods sold = $21,740
depreciation expense = $3,512
interest expense = $544
Pre-tax Income = $4,378
21% Tax = 919-38
Net Income = $3,459
b) Operating cash flow
Net Income = $3,459
Non-cash:
Depreciation Expense 3512
Increase in current assets -1,418
Decrease in current liabilities -699
Net operating cash flow $4,854
c) Cash flow from assets:
Increase in Assets -$3,031`
d) Cash flow to creditors:
Decrease in liabilities -$699
e) Cash flows to stockholders:
Dividends paid = -$849
Explanation:
a) 2019: sales = $30,174
cost of goods sold = $21,740
depreciation expense = $3,512
interest expense = $544
Pre-tax Income = $4,378
21% Tax = 919
Net Income = $3,459
dividends paid = $849.
b) Balance Sheet:
At the beginning of the year,
net fixed assets were $20,046,
current assets were $3,029, and
current liabilities were $3,776.
c) Balance at the end of the year,
At the end of the year,
net fixed assets were $23,077,
current assets were $4,447, and
current liabilities were $3,077.
Prescott Football Manufacturing
Part A:
Net Income for 2016:
Sales = $30,174 Cost of goods sold = $21,740 Depreciation expense = $3,512 Interest expense = $544 Pre-tax Income = $4,378 21% Tax = 919-38Net Income = $3,459
Working Notes:
sales = $30,174 cost of goods sold = $21,740 depreciation expense = $3,512 interest expense = $544 Pre-tax Income = $4,378 21% Tax = 919 Net Income = $3,459 dividends paid = $849.Part B:
Operating cash flow
Net Income = $3,459Non-cash:
Depreciation Expense 3512 Increase in current assets -1,418 Decrease in current liabilities -699 Net operating cash flow $4,854
Working Notes :
At the beginning of the year, Net fixed assets were $20,046, Current assets were $3,029, Current liabilities were $3,776.Part C:
Cash flow from assets:
Increase in Assets -$3,031`
Working Notes :
Balance at the end of the year, At the end of the year, net fixed assets were $23,077, current assets were $4,447, current liabilities were $3,077.
Part D :
Cash flow to creditors:
Decrease in liabilities = -$699
Part E :
Cash flows to stockholders:
Dividends paid =-$849
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Which of the following would most directly affect the purchasing power of benefits paid on a fixed annuity?
A) Guaranteed minimum payout.
B) Economic inflation.
C) Interest rates
D) Company investment performance
The purchasing power of benefits on a fixed annuity is directly affected by economic inflation, which reduces the value of money over time. Therefore, option B is correct.
In the context of fixed annuities, inflation refers to the general increase in prices of goods and services over time, leading to a decrease in the purchasing power of money.
Inflation erodes the value of annuity payments, as the fixed benefit amount remains constant while the cost of living rises.
This means that over time, the annuity payments may not be sufficient to meet the same level of expenses. Managing inflation risk becomes crucial in maintaining the long-term purchasing power of annuity benefits, ensuring that they can adequately cover future expenses despite the impact of rising prices.
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A portfolio consists of $15,200 in Stock M and $23,400 invested in Stock N. The expected return on these stocks is 8.90 percent and 12.50 percent, respectively. What is the expected return on the portfolio
Answer:
Portfolio return = 11.08%
Explanation:
The expected return on the portfolio is the weighted average return of all the different stocks making up the portfolio. The weight of the individual stock would be the relative amount invested in each stock as a proportion of the total fund invested.
The expected return can be determined as follows
Weighted of stock A= 15,200/(15200+23400)=0.39
Weight of stock B = 23.400/((15200+23400)= 0.61
Expected return on portfolio = (0.39 ×8.90% ) + (0.61*12.50%)= 11.08 %
The effects of inflation
Suppose Specific Automakers is considering signing a long-term contract with the union representing its workers. Specific Automakers and the union both agree that real wages should increase by 3%. Inflation is expected to be 6%, so they agree on a 9% nominal wage increase.
Now, suppose inflation turns out to be lower than expected, coming in at 5%. This would the _______union and _______ Specific Automakers because the real wage increase would now be _______.
Because of uncertainty about future inflation, the union devotes a large quantity of resources to monitoring inflation indicators in order to maximize its financial position.
This illustrates the fact that:
A. Inflation harms lenders and helps borrowers
B. Inflation obscures relative price changes
C. Variable inflation is associated with high transaction costs
Answer:
Benefit
Harm
Higher
C. Variable inflation is associated with high transaction costs
Explanation:
Inflation is a persistent rise in general price levels.
The increase in income was 9% based on the assumption that inflation would be 6%.
It turns out that inflation was 5%. The increase in income should have been 8% instead of 9%.
The union members end up earning more than they ought to, so they benefit. The company pays more than they ought to to workers, so they are in a disadvantage.
The union members spend a lot to monitor inflation. This is a transaction cost .
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A foundation was endowed with $15,000,000 in July 2010. In July 2014, $5,000,000 was expended for facilities, and it was decided to provide $250,000 at the end of each year forever to cover operating expenses. The first operating expense is in July 2015, and the first replacement expense in July 2014. If all money earns interest at 5% after the time of endowment, what amount would be available for the capital replacements at the end of every fifth year forever
Answer:
$2,274,639.75
Explanation:
Endowment on July 2010 = $15,000,000
Endowment amount on July 2014 = $15,000,000 (1+0.05)^4 - Expenditure on facilities
= $15,000,000 (1.2155) - $5,000,000
= $18,232,500 - $5,000,000
= $13,232,500
Amount to be set aside for operation expenses = $250,000/0.05 = $5,000,000
Amount available for capital replacement = $13,232,500 - $5,000,000 = $8,232,500
5-years effective interest rate = (1+0.05)^5 - 1 = 0.2763
Annual available for capital replacements every fifth year forever = $8,232,500 (0.2763) = $2,274,639.75
The amount that would be available for the capital replacements at the end of every fifth year forever is $2,274,513.93.
Endowment amount:
Endowment amount=[$15,000,000 (1+0.05)^4]- $5,000,000
Endowment amount=[$15,000,000 (1.21550625)] - $5,000,000
Endowment amount= $18,232,594- $5,000,000
Endowment amount= $13,232,594
Capital replacement:
Capital replacement = $13,232,594- ($250,000/0.05)
Capital replacement = $13,232,594 - $5,000,000
Capital replacement = $8,232,594
Effective interest rate :
Effective interest rate = (1+0.05)^5 - 1
Effective interest rate = (1.05)^5 - 1
Effective interest rate = 0.2762815625
Every Fifth year Capital replacements:
Every Fifth year Capital replacements= $8,232,594 ( 0.2762815625)
Every Fifth year Capital replacements=$2,274,513.93
Inconclusion the amount that would be available for the capital replacements at the end of every fifth year forever is $2,274,513.93.
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Noma plans to save $4,800 per year for the next 40 years. If she can earn an annual interest rate of 10.6 percent, how much will she have in 40 years
Answer:
Total amount after 40 years = $2502371.012
Explanation:
Annual saving by Noma = $4800 per year
Total time period for saving = 40 years
Interest rate on savings = 10.6 percent
Now we have to find the amount that will be after 40 years if the annual saving is 4800 dollars that earns 10.6 percent interest rate.
[tex]\text{Total amount after 40 years} =Annuity [ \frac{(1+r)^{n} - 1}{r}] \\= 4800[ \frac{(1+ 0.106)^{40} - 1}{0.106}] \\= 2502371.012 \ dollars[/tex]
Total amount after 40 years = $2502371.021
Annual charge per unitWhen the Annual saving by Noma = $4800 annually
Then the Total period for saving is = 40 years
After that charge per unit on savings = 10.6 percent
Now we've to seek out the quantity that may plan40 years if the annual saving is "4800 dollars, 10.64, annuity that earns 10.6 percent charge per unit.
Then the Total amount after 40 year=
Annuity [tex](1+r)n-1/r =4800 (1+0.106)40-1/0.106=250237[/tex]
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Why does e-commerce save businesses money?
O
A. Because warehouses can stock much more inventory than stores.
B. Because they charge more for online purchases.
ОО
C. Because more people shop online than in stores.
D. Because they lower the quality of the product for online
purchases.
Answer:
A. Because warehouses can stock much more inventory than stores.
Explanation:
ACME Inc. has decided on a 10for1 reverse stock split. If the firm currently has 40,000,000 shares outstanding, how many shares will be outstanding after the stock split?
Answer:
$4,000,000 Shares
Explanation:
Calculation for how many shares will be outstanding after the stock split
Using this formula
Outstanding Shares after stock split =Shares outstanding ÷Reverse stock split
Let plug in the formula
Outstanding Shares after stock split =$40,000,000÷10
Outstanding Shares after stock split =$4,000,000 Shares
Therefore the amount of shares that will be outstanding after the stock split will be $4,000,000
You Save Bank has a unique account. If you deposit $8,000 today, the bank will pay you an annual interest rate of 3 percent for 5 years, 3.6 percent for 4 years, and 4.3 percent for 8 years. How much will you have in your account in 17 years
Answer:
Total money after 17 years = $14962
Explanation:
Given present value or mount deposited today = $8000
Annual interest rate for 5 years = 3 %
Annual interest rate for 4 years = 3.6 %
Annual interest rate for 8 years = 4.3 %
Now we have to calculate the total amount after 17 years. Below is the calculation.
[tex]Total \ amount = 8000(1 + 0.03)^{5} (1+ 0.036) ^{4} (1+ 0.043 ) ^{8} \\Total \ amount = $14962[/tex]
Aloha Inc. has 8 percent coupon bonds on the market that have 11 years left to maturity. If the YTM on these bonds is 10.22 percent, what is the current bond price
Answer:
The answer is $85.73
Explanation:
N(Number of periods) = 11years
I/Y(Yield to maturity) = 10.22 percent
PV(present value or market price) = ?
PMT( coupon payment) = $8
FV( Future value or par value) = $10
We are using a Financial calculator for this.
N= 11; I/Y = 10.22 ; PMT = 8; FV= $100; CPT PV= -85.73
Therefore, the market price of the bond is $85.73