Debit Accounts Receivable, Credit Service Revenue for $200. Debit Depreciation Expense, Credit Accumulated Depreciation for $250. Debit Insurance Expense, Credit Prepaid Insurance for one-sixth of the total insurance amount.
This adjustment records the revenue earned but not yet billed or collected. By debiting Accounts Receivable, we increase the amount owed to the company, and by crediting Service Revenue, we recognize the revenue earned. Depreciation is the systematic allocation of the cost of an asset over its useful life. Here, we debit Depreciation Expense to recognize the expense and credit Accumulated Depreciation to reduce the asset's carrying value. As one-sixth of the insurance has expired, we need to recognize the portion that has been used up as an expense. Debit Insurance Expense to record the expense and credit Prepaid Insurance to reduce the prepaid amount.
The adjustment recognizes the value of cleaning supplies on hand at the end of the period. Debit Cleaning Supplies Expense to record the expense and credit Cleaning Supplies to reduce the value of supplies. Accrued salaries represent the wages owed to employees but not yet paid. Debit Salaries Expense to recognize the expense and credit Salaries Payable to record the liability. When a prepaid expense expires, it needs to be recognized as an expense. Debit Rent Expense to record the expense and credit Prepaid Rent to reduce the prepaid amount. By journalizing these adjustments, the accounts will reflect the correct balances for the end of the accounting period.
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In summary, we journalize these adjustments by maintaining balance within each entry and identifying when it implies an expense or a revenue. We debit Accounts Receivable and credit Service Revenue for services performed but unbilled, debit Depreciation Expense and credit Accumulated Depreciation for depreciation on equipment, debit insurance or rent Expense and credit Prepaid Insurance or Prepaid Rent as they expire, adjust inventory manually and track unpaid employee salary and interest expense.
Explanation:To journalize these transactions, you will create entries for each adjustment.
Services performed but unbilled and uncollected: Debit Accounts Receivable $200, Credit Service Revenue $200. Depreciation on equipment: Debit Depreciation Expense $250, Credit Accumulated Depreciation $250. For the insurance expiration, you will need to know the total value of the insurance policy and debit Insurance Expense for one-sixth of this amount, while crediting Prepaid Insurance. With the cleaning supplies inventory, debit Cleaning Supplies Expense for the difference between the initial balance and the $280 remaining, and credit Cleaning Supplies. Accrued but unpaid salaries: Debit Salary Expense $1,080, Credit Salary Payable $1,080. For the prepaid rent expiration, debit Rent Expense for the monthly rent amount, and credit Prepaid Rent. For the accrued interest, debit Interest Expense for the monthly interest amount, and credit Interest Payable. Learn more about Journalizing Adjustments here:
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if a gain of $8,903 is realized in selling (for cash) office equipment having a book value of $53,248, the total amount reported in the cash flows from investing activities section of the statement of cash flows is a.$62,151 b.$53,248 c.$8,903 d.$44,345
The total amount reported in the cash flows from investing activities section of the statement of cash flows is $53,248. Hence, option B is the correct answer.
In the statement of cash flows, the cash flows from investing activities section reports the cash inflows and outflows related to the acquisition and sale of long-term assets, such as property, plant, and equipment.
In this case, the gain realized from selling office equipment is $8,903. However, the gain is not included in the cash flows from investing activities. The gain represents a non-cash item and is typically reported separately in the income statement.
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Wireless Technologies reports sales of $50 million. Accounts receivable at the beginning and end of the year are $5 million and $7 million, respectively. What is the amount of cash received from customers? 52 MILLION B 50 MILLION 55 MILLION 48 MILLION (1) You're not able to go back to the previous question in this assessment
To calculate the amount of cash received from customers, we need to consider the changes in accounts receivable during the year.
The formula to calculate cash received from customers is:
Cash received from customers = Sales + Decrease in accounts receivable
Given:
Sales = $50 million
Accounts receivable at the beginning of the year = $5 million
Accounts receivable at the end of the year = $7 million
To calculate the decrease in accounts receivable, we subtract the ending accounts receivable from the beginning accounts receivable:
Decrease in accounts receivable = Beginning accounts receivable - Ending accounts receivable
Decrease in accounts receivable = $5 million - $7 million = -$2 million
Now, we can calculate the cash received from customers:
Cash received from customers = Sales + Decrease in accounts receivable
Cash received from customers = $50 million + (-$2 million)
Cash received from customers = $48 million
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ACME Incorporated redeemed $150,000 face value, 12% bonds on July 31 at 102 . The bond's amortized cost at the redemption was $127,500. Required: Prepare the journal entry to record the redemption of the bonds assuming the interest for the period has already been paid.
The redemption of bonds refers to the issuer's purchase of outstanding bonds from bondholders before maturity.
A redemption price is usually paid to bondholders to retire the bonds. The redemption price is typically greater than the face value of the bond, indicating that bondholders receive a premium for redeeming the bonds.
The journal entry to record the redemption of the bonds assuming the interest for the period has already been paid is as follows:
Dr. Bonds Payable (Face Value) $150,000
Dr. Premium on Bonds Payable (102% * $150,000 - $150,000) $3,000
Cr. Cash ($150,000 * 102%) $153,000
Cr. Loss on Redemption of Bonds ($153,000 - $127,500) $25,500
The Bonds Payable account is debited with the face value of the bond, which is $150,000. The Premium on Bonds Payable account is debited with $3,000, which is the difference between the redemption price and the face value of the bond. Cash account is credited with $153,000, which is the redemption price of the bond.
Finally, the Loss on Redemption of Bonds account is credited with $25,500, which is the difference between the redemption price of $153,000 and the bond's amortized cost of $127,500.
Thus, the journal entry to record the redemption of the bonds assuming the interest for the period has already been paid is as follows:
Dr. Bonds Payable $150,000
Dr. Premium on Bonds Payable $3,000
Cr. Cash $153,000
Cr. Loss on Redemption of Bonds $25,500
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The financial statements of Ayayai Corporation for fiscal 2018 to fiscal 2020 are as follows (in thousands): Calculate Ayayai's (1) inventory turnover and (2) average days to sell inventory for each of the two years ending in 2020 and 2019 . (Round inventory turnover ratio to 2 decimal places, e.g. 52.75 and average days to 0 decimal places, e.g. 527. Use 365 days for calculation.) Calculate Ayayai's gross profit percentage and percentage markup on cost for each fiscal year. (Round answers to 2 decimal places, e.g. 52.75. ) Fiscal 2020 Fiscal 2019 Percentage Gross Profit % % Percentage Markup on Cost % %
Based on the provided financial statements for Ayayai Corporation, here are the calculations for inventory turnover, average days to sell inventory, gross profit percentage, and percentage markup on cost for fiscal years 2018 to 2020:
1. Calculation of inventory turnover and average days to sell inventory for the fiscal year ending in 2020:
- Inventory turnover (2020): $7,200 / (($1,900 + $2,200) / 2) = 3.72
- Average days to sell inventory (2020): 365 / 3.72 = 98.11 days (rounded to 0 decimal places)
2. Calculation of inventory turnover and average days to sell inventory for the fiscal year ending in 2019:
- Inventory turnover (2019): $7,840 / (($1,680 + $1,720) / 2) = 4.44
- Average days to sell inventory (2019): 365 / 4.44 = 82.21 days (rounded to 0 decimal places)
3. Calculation of gross profit percentage and percentage markup on cost for fiscal year 2020:
- Gross profit (2020): $12,000 - $7,200 = $4,800
- Gross profit percentage (2020): $4,800 / $12,000 x 100 = 40.00%
- Markup on cost (2020): $4,800 / $7,200 x 100 = 66.67%
4. Calculation of gross profit percentage and percentage markup on cost for fiscal year 2019:
- Gross profit (2019): $13,900 - $7,840 = $6,060
- Gross profit percentage (2019): $6,060 / $13,900 x 100 = 43.60%
- Markup on cost (2019): $6,060 / $7,840 x 100 = 77.32%
The calculations for Ayayai Corporation's inventory turnover, average days to sell inventory, gross profit percentage, and percentage markup on cost for fiscal years 2018 to 2020 have been provided above.
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Based on Paul Krugman's Essay What Do Undergrads Need To Know About Trade? AER 83(2), 1993, describe the driving forces of international trade in the USA. Consider the following aspects: 1. Is international trade essentially different from business within the coun- try? 2. Does competition play a role of in trade? 3. Why is productivity important for the welfare of countries? 4. In the light of comparative advantage, identify the "high-value sector of an economy.
The international trade is a way through which the countries exchange their goods and services with other countries. The main driving forces of international trade in the USA are;
1. Yes, international trade is entirely different from business within the country because it involves more complex procedures. The international trade involves shipping, customs, and currency exchange. The business within the country is comparatively easy and straightforward as it does not require customs or currency exchange.
2. Yes, competition plays a significant role in trade. The competition helps to drive the prices down, and it helps the companies to remain competitive in the global market. Without competition, the firms will lose the opportunity to improve their products and services.
3. Productivity is essential for the welfare of countries because it determines the quality of life for the people living in those countries. The higher the productivity, the better the living standards for the people in those countries. It also increases the economic growth of the countries, which leads to the creation of more job opportunities for the people.
4. In the light of comparative advantage, identify the "high-value sector of an economy. The high-value sector of an economy is the sector that produces the goods and services with higher productivity and comparative advantage. It is the sector that generates more revenues for the country. The comparative advantage is a situation where a country produces goods and services more efficiently than other countries.
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Suppose that, the next day, the Apex Company finds striking
employees of the DYNO Company picketing the Apex Company plant
because it is a supplier of DYNO Company. What are the rights of
Apex Company
If the Apex Company finds striking employees of the DYNO Company picketing the Apex Company plant because it is a supplier of DYNO Company, its rights are as follows:
The rights of Apex Company would be that it cannot be legally liable for the disputes that are between the DYNO company and its employees. DYNO Company does not have the legal right to engage in the secondary boycotts.
The picketing of Apex Company is a way of forcing them to stop doing business with the DYNO Company. However, Apex Company has the legal right to refuse to end business relations with DYNO Company.
They are under no legal obligation to comply with the request that DYNO Company made through its employees.The DYNO Company’s employees are within their legal right to strike against their employer.
Nonetheless, they are breaking the law if they engage in activities such as trying to induce Apex Company to stop doing business with their employer. This is an illegal secondary boycott.
The Apex Company has the legal right to contact the law enforcement agencies to take action against the DYNO Company’s employees.
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Development status and tasks. b. Challenges and risks. c. Projected development costs. d. Proprietary issues (patents, trademarks, copyrights, licenses, brand names). a. Incorporating the venture. b. Completion of prototypes. c. Rental of facilities. d. Obtaining critical financing. e. Starting production. f. Obtaining the first sale.
Risk management strategies should be put in place to identify, mitigate, and avoid these risks.
Development status and tasks:
The development status and tasks include the progress of the project and the steps needed to be taken to complete it. These steps may involve the creation of a prototype, obtaining financing, and starting production.
Challenges and risks: This refers to the potential difficulties that the project may encounter. These may include economic, legal, or technical challenges.
Projected development costs: These are the expected costs that will be incurred during the project's development. This includes costs such as research and development, personnel, and facility expenses.
Proprietary issues: These are legal matters that need to be addressed. This may include obtaining patents, trademarks, or copyrights. This is to ensure that the venture is protected from legal issues and intellectual property theft.
Incorporating the venture: This is the process of legally forming a company. This includes registering the business name and obtaining all the necessary legal documents.
Completion of prototypes: This is the stage where the final product is being tested to ensure that it meets all the required specifications.
Rental of facilities: This includes renting space for the production process and other necessary facilities.
Obtaining critical financing: This is a vital part of the venture's development. The entrepreneur needs to ensure that they have adequate funding to get the venture off the ground.
Starting production: This is the final stage of the project, where the product is being produced and prepared for sale.
Obtaining the first sale: This is the goal of every venture. Once the product is ready, it needs to be marketed and sold to the target market.
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[insert your responses to the following questions: What impact do policy interventions have on the supply and demand equilibrium for a product? Provide specific examples from the simulation to illustrate. ] [What are the determinants of price elasticity of demand? Identify at least three examples. Based on the outcome of the simulation, explain how price elasticity can impact pricing decisions and total revenue of the firm. ] [Based on the results of the simulation, can policy market interventions cause consumer or producer surplus? Explain why using specific reasoning
Policy market interventions can impact both consumer and producer surplus depending on the specific intervention and its effects on supply and demand dynamics.
Policy interventions can have a significant impact on the supply and demand equilibrium for a product. For example, if the government implements a subsidy for a particular product, it increases the supply by reducing production costs for suppliers. This shifts the supply curve to the right, resulting in a lower equilibrium price and higher quantity demanded.
In the simulation, we can see an example of this when the government provides a subsidy for solar panels. The subsidy reduces the cost of production for suppliers, leading to an increase in the supply of solar panels. As a result, the equilibrium price decreases, and the quantity demanded increases. This intervention encourages the adoption of solar panels by making them more affordable for consumers.
Another example of a policy intervention impacting the equilibrium is a tax imposed on a product. When the government imposes a tax, it increases the cost of production for suppliers. This shifts the supply curve to the left, leading to a higher equilibrium price and lower quantity demanded. In the simulation, we observe this when a tax is levied on gasoline. The tax raises the cost of production for gasoline suppliers, causing a decrease in the supply of gasoline. Consequently, the equilibrium price increases, and the quantity demanded decreases.
The determinants of price elasticity of demand are the availability of substitutes, the proportion of income spent on the product, and the time period under consideration. For example, if a product has close substitutes readily available, consumers are more likely to be sensitive to price changes, resulting in a higher price elasticity of demand. Similarly, if a product represents a significant portion of a consumer's income, price changes are more likely to impact their demand for the product.
In the simulation, we can observe how price elasticity impacts pricing decisions and total revenue for the firm. If a product has a relatively elastic demand (i.e., a large change in quantity demanded in response to a price change), lowering the price can lead to a significant increase in quantity demanded and potentially result in higher total revenue for the firm. On the other hand, if a product has an inelastic demand (i.e., a small change in quantity demanded in response to a price change), raising the price might result in a smaller decrease in quantity demanded, leading to higher total revenue for the firm. Understanding price elasticity helps firms make informed pricing decisions and optimize their total revenue based on consumer responsiveness to price changes.
Policy market interventions can cause both consumer and producer surplus, depending on the nature of the intervention. For example, if the government imposes a price ceiling below the equilibrium price, it can create a consumer surplus by allowing consumers to purchase the product at a lower price than they would in a free market. Conversely, if the government implements a price floor above the equilibrium price, it can generate a producer surplus by ensuring suppliers receive a higher price for their product than they would in a free market.
In the simulation, we can see an example of policy interventions causing consumer and producer surplus when the government implements a subsidy for solar panels. The subsidy reduces the cost for consumers, allowing them to purchase solar panels at a lower price and potentially generating a consumer surplus. At the same time, the subsidy decreases the production costs for suppliers, enabling them to sell at a higher price than they would in a free market, leading to a producer surplus.
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Investment is a vital component of the economy. Define investment and explain what factors determine how much investment will be done in the economy.
Investment is an economic activity that entails the allocation of money to acquire new capital resources for the purpose of generating future returns or profit.
Investment is regarded as a crucial component of the economy because it facilitates economic growth and development by providing businesses with the capital they require to expand, employ more people, and generate higher revenue.
1. When interest rates are low, borrowing becomes less expensive, and businesses can more readily access financing for new investments.
2. Market expectations: Market expectations are the beliefs held by investors regarding the future performance of the economy.
3. Economic growth: Economic growth is an essential determinant of investment because it provides businesses with opportunities to expand and create new jobs. When the economy is growing, businesses are more likely to invest in new projects to capitalize on the growth trend.
4. Government policies: Government policies, particularly tax policies and regulations, have a significant impact on investment levels. Tax incentives and favorable regulations can encourage businesses to invest more, while unfavorable policies can discourage investment.
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1.In the market for real output, the initial effect of an increase in themoney supply is to a.shift aggregate demand to theright.b.shiftaggregate supply to the right.c.shift aggregate demandto the left.d.shift aggregate supply to the left.
The initial effect of an increase in the money supply in the market for real output is to shift aggregate demand to the right.
The increase in the money supply increases the supply of loanable funds, which lowers the interest rate, making it cheaper to borrow. Consumers and businesses tend to borrow more money when it's cheaper, leading to an increase in spending on goods and services. This increase in spending results in a rise in aggregate demand.
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what is the balance, or tradeoff, between a lower deductible and a higher premium?
The tradeoff between a lower deductible and a higher premium is that a lower deductible leads to higher premium payments, while a higher deductible results in lower premium payments.
When choosing an insurance plan, a deductible is the amount the policyholder must pay out of pocket before the insurance coverage kicks in. A lower deductible means the insurance company assumes a larger portion of the risk, resulting in higher premium payments to compensate for that additional coverage. On the other hand, a higher deductible means the policyholder is responsible for a larger portion of the initial costs before insurance coverage applies. Consequently, the insurance company assumes less risk, leading to lower premium payments. Ultimately, the decision between a lower deductible and a higher premium or a higher deductible and a lower premium depends on an individual's financial situation, risk tolerance, and anticipated healthcare needs.
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5) Suppose the Mexican economy skyrockets and many people around the world want to send their wealth into Mexico. Would vacations in Mexico then become more expensive or less expensive for Americans? Explain.
Suppose the Mexican economy skyrockets and many people around the world want to send their wealth into Mexico. Would vacations in Mexico then become more expensive or less expensive for Americans
The Mexican economy is said to have skyrocketed. This means that a lot of people around the world want to send their wealth into Mexico. To answer this question, we must first understand that the economy is a measure of a country's production and consumption of goods and services.
A higher economic growth means more money for the country. With an increase in money comes inflation. This can lead to currency devaluation, causing the price of goods and services to rise. These high prices could make vacationing in Mexico more expensive for Americans because the cost of goods and services, including hotels, transportation, and food, is likely to be higher.
However, the opposite can occur as well. If the economy skyrockets, people around the world will likely invest in Mexico. This investment will increase the country's revenue and exchange rates. When the exchange rates rise, the US dollar can become more valuable.
As a result, the price of Mexican goods and services, including hotels, transportation, and food, can decrease. This could make vacationing in Mexico less expensive for Americans.In conclusion, whether vacations in Mexico become more expensive or less expensive for Americans when the Mexican economy skyrockets depends on the effect of inflation and the exchange rate on the value of the US dollar.
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When the Fed tightens U.S. monetary policy, domestic interest rates ______, making U.S. assets relatively more attractive to foreign investors, and ______ the equilibrium exchange rate.
When the Fed tightens U.S. monetary policy, domestic interest rates rise making U.S. assets relatively more attractive to foreign investors and increasing the equilibrium exchange rate.
How does the tightening of U.S. monetary policy affect the econoomy?When the Federal Reserve (the Fed) tightens U.S. monetary policy, it typically takes actions to reduce the money supply and increase interest rates. This tightening is achieved through measures such as increasing the target federal funds rate or reducing the amount of money in circulation through the sale of Treasury securities.
As a result of these actions, domestic interest rates rise. When interest rates increase, it becomes more expensive for businesses and individuals to borrow money which can have a dampening effect on economic activity.
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good managers must be able to analyze the ________ of each situation and implement the most appropriate leadership style.
Good managers must be able to analyze the "context" of each situation and implement the most appropriate leadership style.
The context refers to the specific circumstances, environment, and factors surrounding a situation. Effective managers understand that different situations require different approaches and leadership styles. By analyzing the context, managers can assess the needs, challenges, and dynamics of a situation and determine the most suitable leadership style to achieve desired outcomes. This may involve adapting their leadership approach, communication style, decision-making process, and management techniques to effectively address the specific context and achieve optimal results.
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E16-17 Various Unrelated Transactions [LO 16-4]
Following are several unrelated transactions involving a hospital.
1. The hospital has a contractual agreement with a lender requiring that $600,000 in cash be set aside to meet its future debt payment.
2. The hospital accrued $1,600,000 in patient service revenues. Charity services of $465,000 were also provided. Contractual adjustments total $585,000.
3. An increase of $55,000 was recorded for bad debts.
4. General services of $200,000 were donated by technicians. Normally, the hospital would have purchased these specialized services.
5. An endowment contribution of $1,600,000 was received.
6. Investments held by the hospital increased in fair value by $42,000.
7. The hospital purchased $847,000 in equipment with resources that had been contributed in prior years for such a purchase.
Required
a. Prepare journal entries to record the foregoing transactions, assuming the hospital is a not-for-profit facility. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field.)
b. Prepare journal entries to record the foregoing transactions, assuming the hospital is a business-type government facility. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field.)
A journal entry is a way of recording any transaction, whether it is economic or not. An accounting diary that displays the credit and debit positions of a corporation lists transactions. Multiple recordings, every one of which can be a type of debit or credit, may be included in the journal entry.
A journal entry acts as a record of a commercial transaction in your company's books. In double-entry bookkeeping, each transaction necessitates the creation of at least two distinct entries. A bookkeeper tracks all the alterations that a transaction might make to a company by noting them in their diary.
Simply enter one debit along with one credit in your journal. Include more than two accounts, or more than one credit alongside a debit, in your diary entries. At the end of a particular accounting month, adjusting journal entry are made to address problems like unpaid invoices and ensure that the books are in balance.
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You have $42,000 to invest in Sophie Shoes, s stock selling for $100 a share. The initial margin reasirement is 75 percent. Do not round intermediate calculations. found your answers to tro decimal places. Use a minus sign to enter negative values, If any. a. Ignoring takes and commissions, calculate your rates of return if the stock rises to $110 a share and if it decines to $40 a share assuming you pay cash for the stock. fate of return if the stock rises to $110 e share! Rate of refurn if the stock declines to $40 a share: b. Ignoring taxes and commissions, calculnte your fates of retum if the stock rises to 1110 a share and a it declines to $40 a share assuming you buy it using nuximum leverage. Mste of return if the stock rives to $110 a share: Rate of return if the stock declines to $40 a share:
With the selling price at $110 per share, the total selling price of the shares [tex]= 420 × $110 = $46,200[/tex]
Total profit = [tex]$46,200 - ($42,000 + $10,500) = $3,700[/tex]
a)Calculating the initial marginInitial margin = 75% of the purchase price of the stock
[tex]= (75/100) × 42,000 = $31,50[/tex]0
b)Using cash for the stock(i) The rate of return if the stock rises to $110 a share
Number of shares that can be purchased = 31,500/100 = 315Since the purchase price is $100 per share, 315 shares can be purchased.
With the selling price at $110 per share, the total selling price of the shares [tex]= 315 × $110 = $34,650[/tex]
Total profit =[tex]$34,650 - $31,500 = $3,150[/tex]
The rate of return = (Profit / Cost of investment) × 100% = (3,150 / 31,500) × 100% = 10%
(ii) The rate of return if the stock declines to $40 a share With the stock price at $40, the total selling price of the shares = 315 × $40 = $12,600
Total loss [tex]= $31,500 - $12,600 = $18,900[/tex]
The rate of return = (Loss / Cost of investment) × 100% = (18,900 / 31,500) × 100% = 60%b)Using maximum leverage(i) The rate of return if the stock rises to $110 a share
Number of shares that can be purchased = $42,000 / $100 = 420 shares
Initial margin = 25% of the purchase price of the stock = (25/100) × ($100 × 420) = $10,500
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a. Are the effects of an increase in aggregate demand in the AD-AS model consistent with the Phillips curve? Explain b. Discuss the factors determining the slope of the short-run Phullips curve, is the lincer sampe appropriate? Why ar why not?
Yes, the effects of an increase in aggregate demand in the AD-AS model are consistent with the Phillips curve.
The AD-AS model helps us understand how changes in aggregate demand can affect output and prices in the short run and long run.
In the short run, when aggregate demand increases, output will increase and prices will rise.
This is because firms can increase output by hiring more workers and increasing production,
but they cannot increase the supply of goods and services immediately, which leads to an increase in prices.
The Phillips curve shows the relationship between inflation and unemployment in the short run.
It suggests that there is an inverse relationship between these two variables.
When unemployment is high, inflation is low, and vice versa.
An increase in aggregate demand will lead to a decrease in unemployment in the short run, which will lead to an increase in inflation.
This is consistent with the Phillips curve, which shows that there is a trade-off between inflation and unemployment in the short run.
The Lincer-Samuelson approach is appropriate in some cases, but it has several limitations.
It assumes that the economy is in equilibrium in the short run,
which may not be the case if there are supply-side shocks or changes in inflation expectations.
It also assumes that the relationship between inflation and unemployment is stable over time, which may not be the case if there are structural changes in the economy.
Overall, while the Lincer-Samuelson approach can provide useful insights into the relationship between inflation and unemployment,
it is important to take into account the limitations and assumptions of the model.
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Trotman Company had three intangible assets at the end of 2019 (end of the accounting year):
Computer software and website development technology purchased on January 1, 2018, for $72,000. The technology is expected to have a four-year useful life to the company with no residual value.
A patent purchased from Ian Zimmer on January 1, 2019, for a cash cost of $24,000. Zimmer had registered the patent with the U.S. Patent and Trademark Office five years ago. Trotman intends to use the patent for its remaining life.
A trademark purchased for $32,000 on November 1, 2019. Management decided the trademark has an indefinite life.
Required:
1. Compute the amortization of each intangible at December 31, 2019. The company does not use contra-accounts.
2a. Show how the expenses related to the three intangible assets should be reported on the income statement for 2019.
2b. Show how the three intangible assets should be reported on the balance sheet for 2019.1. Compute the amortization of each intangible at December 31, 2019. The company does not use contra-accounts. 2a. Show how the expenses related to the three intangible assets should be reported on the income statement for 2019. 2b. Show how the three intangible assets should be reported on the balance sheet for 2019 . Complete this question by entering your answers in the tabs below. Compute the amortization of each intangible at December 31, 2019. The company does not use contra-accounts. Complete this question by entering your answers in the tabs below. Show how the expenses related to the three intangible assets should be reported on the income statement for 2019. Complete this question by entering your answers in the tabs below. Show how the three intangible assets should be reported on the balance sheet for 2019.
1. Amortization of intangible assets at December 31, 2019 is given below: Intangible asset Amortization Amount ($)
Computer software and website development technology ($72,000/4 years) $18,000
Patent ($24,000/20 years) $1,200
Trademark No amortization (since it has an indefinite life)
2 a. The expenses related to the three intangible assets should be reported on the income statement for 2019 as follows:Intangible asset Expense Amount ($)
Computer software and website development technology $18,000
Patent $1,200
Trademark No expense (since it has an indefinite life)
2 b. The three intangible assets should be reported on the balance sheet for 2019 as follows: Intangible asset Amount ($)
Computer software and website development technology $54,000 ($72,000 cost - $18,000 accumulated amortization)
Patent $22,800 ($24,000 cost - $1,200 accumulated amortization)
Trademark $32,000
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A global shipping company –ZECO-ZECO- is working around the world in 100 countries. Three of its ships in South Africa have sunk and ten sailors have killed and other fifteen have injured.
The media has targeted the company for a week asking for closing this branch because of low quality assurance.
The public opinion is against the company and pressured to review all the quality assurance system of the company around the world.
This decision either to close the branch or to review the ships will cost the company a massive amount of money and hurt its reputation.
In addition, it will allow all workers to ask for compensation and wages raise for safety. And legal obligations will be increased for any accident that happened now or at the past. –
If you are the CEO of the company, do you agree or disagree that the company should close the branch and review all the quality assurance regulations? Why? Justify your answer
Give a complete answer, How does the company overcome and mitigate this situation?
If I were the CEO of the company, I would agree that the company should close the branch and review all the quality assurance regulations.
How to explain the informationClosing the branch is the most immediate way to address the public's concerns about safety. It would also send a message to the company's employees and customers that the company is taking the sinkings seriously and is committed to safety.
Reviewing all the quality assurance regulations is also important. It will help to identify any areas where the company can improve its safety standards. This will help to prevent future accidents and protect the company's reputation.
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For each of the following accounts, state its appropriate Income Statement section (Sales Revenue, Cost of Goods Sold, Operating Expenses, or Other Income and Expenses). Question 36 Net Sales Question 37 Sales Returns Question 38 Depreciation Question 39 Income Taxes A.
Question 36: Net Sales is included in Sales Revenue section of Income Statement. Net Sales is the gross amount of revenue that a company earns from sales, minus the deductions such as refunds, discounts, and returns.
Question 37: Sales Returns is included in Cost of Goods Sold section of Income Statement. Sales Returns is the amount of goods returned by customers which are unsatisfactory or damaged. This reduces the amount of revenue, but it is also counted as a cost incurred by the business in order to produce the original product.
Question 38: Depreciation is included in Operating Expenses section of Income Statement. Depreciation is a non-cash expense that reflects the decrease in the value of a company's assets over time.
Question 39: Income Taxes are included in Other Income and Expenses section of Income Statement. Income Taxes are taxes imposed on a company's earnings by the government.
It is recorded as an expense in the Income Statement, as it reduces the net income of the company.
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Quantitative Problem: 5 years ago, Barton Industries issued 25-year noncallable, semiannual bonds with a $1,000 face value and a 9% coupon, semiannual payment (\$45 payment every 6 months). The bonds currently sell for $844.87. If the firm's marginal tax rate is 25%, what is the firm's after-tax cost of debt? Do not round intermediate calculations. Round your answer to two decimal places. %
Barton Industries issued 25-year noncallable, semiannual bonds with a $1,000 face value and a 9% coupon, semiannual payment (\$45 payment every 6 months).
The bonds are currently sold for $844.87. If the firm's marginal tax rate is 25%, then what is the firm's after-tax cost of debt?We know that,Current market price of bond = $844.87.
Face value of bond = $1000
Coupon payment = $45
Coupon rate = 9%
Tax rate = 25%.
[tex]First, let us calculate the YTM of the bond.Using excel function, YTM = 6.3% (approx)[/tex]
[tex]After-tax cost of debt = YTM × (1 - Tax rate) = 6.3% × (1 - 0.25) = 4.725%[/tex]
[tex]Answer: The after-tax cost of debt is 4.725%.[/tex]
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Discuss the effects on the job-finding rate and the expected duration of unemployment from the following (a) An increase in unemployment insurance benefits (b) A technological change that improves the matching of workers and jobs
When there is an increase in unemployment insurance benefits, it leads to a decrease in the incentive for individuals to search for jobs.
They get comfortable in receiving unemployment benefits and therefore stop looking for jobs.
This leads to a decrease in the job-finding rate since the number of job seekers decrease in the labor market, thereby increasing the expected duration of unemployment.
(b) A technological change that improves the matching of workers and jobsWhen there is a technological change that improves the matching of workers and jobs, it leads to an increase in the job-finding rate.
This is because the matching of workers and jobs becomes more efficient and the time taken to find jobs is reduced, which leads to a reduction in the expected duration of unemployment.
Technological changes help in improving the effectiveness of the recruitment process, which leads to a reduction in the expected duration of unemployment.
This is because these changes improve the speed at which job seekers are matched to available job openings.
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mm's proposition ii states that the required return on equity increases as the firm's debt-equity ratio increases.
The firm's optimal capital structure is determined by finding the level of debt that is sufficient to minimize the cost of capital while keeping the financial risk in check.
MM’s Proposition II states that the required return on equity increases as the firm's debt-equity ratio increases. This proposition explains that the value of a firm is not impacted by the financing structure. According to MM, the cost of equity rises due to the increase in the financial risk when the firm increases its debt and thus, its financial leverage.
The formula to calculate the required rate of return is:
Required rate of return on Equity = Risk-free rate of return + Beta × Market risk premium
Here, beta refers to the risk factor of the stock under consideration. According to MM’s Proposition II, the required return on equity is represented by the formula as follows:
Re = Ro + (Ro - Rd) × (D/E)
Where,
Re = Required return on equity,
Ro = Return on assets (ROA),
Rd = Cost of debt, and
D/E = Debt-to-equity ratio.
However, in the real world, taxes and bankruptcy costs affect the value of a firm. Therefore, the MM’s proposition does not work in the practical world as these propositions were designed with a set of unrealistic assumptions.
In conclusion, MM’s Proposition II explains that as the debt-equity ratio increases, the required return on equity also increases, leading to an increased cost of equity. Therefore, the firm's optimal capital structure is determined by finding the level of debt that is sufficient to minimize the cost of capital while keeping the financial risk in check.
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Providen Medical Health Center asks its employees, many of which are members of the American Nurses Association, to apply the utilitarian fheory of ethics. This theory does not require the acquiring of the means of production by workers. a delermination of whom an action will affect. a choice atmong altematives to produce the maximum societal utility. an assessment of the effects of alternatives on those affected.
Employees at Providen Medical Health Center are encouraged to apply , which aims to maximize societal utility and considers the impact of actions on those affected.
The American Nurses Association's employees at Providen Medical Health Centre are encouraged to use the utilitarian philosophy of ethics. The goal of utilitarianism is to increase the overall happiness or utility of society. It places a strong emphasis on making decisions based on an analysis of how various autilitarian ethicslternatives will affect the people who will be impacted. People can choose the course of action that will result in the most overall well-being for the society or community by weighing the advantages and disadvantages of several options. Instead of requiring employees to purchase the means of production, utilitarianism prioritises the assessment of acts based on their potential impact on the wellbeing of all people and tries to maximize utility through deliberate decision-making.
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a Why mant a goyerninent deficit is likely to lead to lower living standards in the future. b. Suppose that the government goes into deficit in order to help local school districts build better schools. Does this action burden future generations? c. Explain how it 15 possible for the government debt to grow forever.
A government deficit is likely to lead to lower living standards in the future because it often requires borrowing money, which accumulates interest and increases the overall debt burden on the government.
This leads to higher taxes or reduced government spending in the future, both of which can lower living standards. yes, going into deficit to help local school districts build better schools can burden future generations. The deficit means the government is borrowing money, which needs to be paid back with interest. Future generations will be responsible for repaying this debt, potentially through increased taxes or reduced government spending on other essential services, thereby impacting their living standards. government debt can grow forever due to various factors. First, governments can continue to borrow money to cover deficits and accumulate debt over time.
Second, economic growth and inflation can increase the overall size of the economy, allowing for a larger debt-to-GDP ratio. Third, as long as there is confidence in a government's ability to repay debt, lenders may continue to provide financing. However, a continuously growing government debt can have negative consequences, such as higher interest payments, increased burden on future generations, and reduced fiscal flexibility. It is important for governments to manage their debt levels and ensure sustainable fiscal policies to avoid long-term negative impacts on the economy and living standards.
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SP 23 Serial Problem Business Solutions (Algo) LO P3
Santana Rey sees that Business Solutions’s line of computer desks and chairs is popular, and she is finding it hard to keep up with demand. Santana only has 791 direct labor hours available. She must determine the best sales mix given her limited hours. Information about the desks and chairs follows.
Desks Chairs Selling price per unit $ 1,031.00 $ 362.00 Variable costs per unit 490.00 200.00 Contribution margin per unit $ 541.00 $ 162.00 Direct labor hours per unit 4 hours 3 hours
Maximum demand per quarter 173 desks 44 chairs
student submitted image, transcription available below
Required:
Determine the best sales mix and the contribution margin the business will earn at that sales mix. (Round per unit amounts to 2 decimal places.)
Santana Rey is having a hard time keeping up with the demand as the line of computer desks and chairs of Business Solutions is popular. Santana only has 791 direct labor hours available.
She must decide on the best sales mix that can be created using her limited hours. Information about the desks and chairs is given in the table below: Desks Chairs Selling price per unit
$ 1,031.00 $ 362.00 Variable costs per unit $ 490.00 $ 200.00
Contribution margin per unit $ 541.00 $ 162.00
Direct labor hours per unit 4 hours 3 hours Maximum demand per quarter 173 desks 44 chairs The best sales mix can be determined through linear programming. The contribution margin per unit can be calculated as follows :
Contribution Margin = Selling price per unit - Variable cost per unit
For desks: Contribution Margin per unit = $1,031 - $490 = $541
For chairs: Contribution Margin per unit = $362 - $200 = $162
Let's assume that the company sells x desks and y chairs. The total number of direct labor hours used can be expressed as follows:4x + 3y ≤ 791The maximum demand per quarter is given as follows
The corner points for the graph are:
(0, 0), (173, 0), and (106.75, 44)
By substituting each of these corner points in the objective function, we get:
Point (0, 0) → Z = $0Point (173, 0) → Z = $93,493Point (106.75, 44) → Z = $76,607
The best sales mix would be 106.75 desks and 44 chairs. At this sales mix, the contribution margin would be $76,607.
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From a customer service perspective, global markets and strategy have four important characteristics.
Companies want to standardize to reduce complexity, but they recognize that global markets need some customization.
Global competition reduces the product life cycle since products can be copied or re-engineered quickly by competitors.
Traditional organizational structures and related business models frequently change since companies get more involved in outsourcing manufacturing and some logistical activities such as transportation, warehousing, and order fulfillment.
Globalization introduces more volatility (weather, terrorism, strikes, coronavirus, etc).
Select one of the above perspectives to discuss and provide an example. Please identify your selection by showing the perspective #. You are not required to retype the entire statement.
Global competition reduces the product life cycle since products can be copied or re-engineered quickly by competitors.
This is the second important characteristic of global markets and strategy from a customer service perspective. This perspective indicates that global competition reduces the product life cycle since products can be copied or re-engineered quickly by competitors.
The market of each country is different, so every company wants to provide its product according to the need of that country's people.
Due to the global competition in the market, the company has to launch a new product to sustain in the market. Companies need to create innovative products that can overcome the competitors' product.
This perspective is important because global competition has forced companies to develop new products faster and stay ahead of the competition.
The invention of new and innovative products is good for customers, which allows them to choose from a wider range of products and options. By introducing new products faster, companies can also keep their customers happy and satisfied with their services.
An example of this perspective can be seen in the smartphone industry. Companies like Apple, Samsung, and Huawei introduce new models of smartphones every year with updated technology and innovative features to stay ahead of their competitors.
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Assuming a contribution margin of 60 percent, what sales would be necessary to break even (that is, maintain the current total contribution) on the 12 percent across-the-board price reduction? Refer to Financial Analysis of Marketing Tactics: Price Decrease in Appendix 3: Marketing by the Numbers to learn how to perform this analysis. 1-15. What absolute increase and percentage increase in sales does this represent?
To calculate the sales necessary to break even after a 12% across-the-board price reduction, we can use the contribution margin. Assuming a contribution margin of 60%, the break-even sales can be determined. Additionally, we can determine the absolute increase and percentage increase in sales resulting from this break-even point.
To maintain the current total contribution despite a 12% price reduction, the break-even sales volume needs to be calculated. The contribution margin is the ratio of contribution (revenue minus variable costs) to revenue. Assuming a contribution margin of 60%, the break-even sales can be determined by dividing the fixed costs by the contribution margin. This break-even sales volume represents the amount of sales needed to cover all costs and maintain the current total contribution.
To determine the absolute increase and percentage increase in sales resulting from the break-even point, we need to compare it to the initial sales level. The difference between the break-even sales and the initial sales represents the absolute increase, while the percentage increase can be calculated by dividing the absolute increase by the initial sales and multiplying it by 100.
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what is the cap rate if a building sells for $5,000,000 with an noi of $900,000?
The cap rate is a metric utilized to evaluate the profitability of an investment property. It represents the property's net operating income in relation to its market value. The cap rate for this building is 18%
It is calculated as NOI divided by the property's current market value. The formula for cap rate is as follows:
Cap rate = NOI / Market value of the property
For example, if a building sells for $5,000,000 with an NOI of $900,000, the cap rate can be calculated as follows:
Cap rate = $900,000 / $5,000,000 = 0.18 or 18%
Therefore, the cap rate for this building is 18%. This implies that the property generates a rate of return of 18% of the purchase price.
Cap rates are utilized by real estate investors and brokers to evaluate and compare investment opportunities in a given market.
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Livestock is not eligible for coverage on which Farm policy?
A. Livestock Coverage Form
B. Basic Cause of Loss Form
C. Special Cause of Loss Form
D. Broad Cause of Loss Form
Livestock is not eligible for coverage under the Broad Cause of Loss Form in a farm policy. The correct answer is D. Broad Cause of Loss Form.
Farm policies typically offer various coverage forms that protect different types of risks. In this case, livestock, which refers to animals raised for agricultural purposes, is not covered under the Broad Cause of Loss Form.
A. Livestock Coverage Form: This form specifically addresses coverage for livestock and would include protections and provisions tailored to livestock-related risks.
B. Basic Cause of Loss Form: This form provides coverage for specific causes of loss listed in the policy. The coverage may vary depending on the perils included, but it does not exclude livestock.
C. Special Cause of Loss Form: This form offers broader coverage than the Basic Cause of Loss Form, as it typically protects a wider range of risks or perils. However, it does not exclude livestock and may include coverage for them.
D. Broad Cause of Loss Form: While the Broad Cause of Loss Form provides coverage for a wide range of risks, it typically excludes livestock coverage. This means that losses related to livestock, such as illness, accidents, or theft, would not be covered under this form.
So, livestock is not eligible for coverage under the Broad Cause of Loss Form in a farm policy. The correct answer is D. Broad Cause of Loss Form.
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