Answer:
Without cafeteria plan Karen taxable income is 2250 dollars and with cafeteria plan the taxable income is $2135.
Without cafeteria plan Katie taxable income is 2075 dollars and with cafeteria plan the taxable income is $1960.
Explanation:
A married women Karen earns = $2250
Katie single women earn = $2075
Employee contribution to health care = $115
If the Karen decline to participate in the cafeteria then her taxable income is $2250 (wages).
If the Karen accept to participate in the cafeteria then her taxable income is $2250 - $115 (contribution) = $2135
If Katie declined to participate in the cafeteria then her taxable income is $2075 (wages).
If Katie accept to participate in the cafeteria then her taxable income is $2075 - $115 (contribution) = $1960
The expected average rate of return for a proposed investment of $636,800 in a fixed asset with a useful life of 4 years, straight-line depreciation, no residual value, and an expected total net income of $191,560 for the 4 years is (round to two decimal points)
Answer: 15.96
Explanation:
The expected rate of return will be the Average income divided by the average cost.
It is stated that the asset has a useful life of 4 years with no residual value so at the end of 4 years it will be worth $0.
The Average Cost/ Value of the Asset is calculated as;
= (Beginning Asset value - Ending Asset Value) / 2
= (600,000 - 0) /2
= 300,000
Total Income of $191,560 for the 4 years so Average income will be,
= 191,560/4
= $47,890
Expected Average Rate of Return = 47,890/300,000
= 15.96%
Samantha and Adam own a gardening business together. They each pull weeds from flower beds and rake up leaves for their neighbors. If each decides to specialize in what they are best at, Samantha will
Answer:
Samantha and Adam
Gardening Business:
If each decides to specialize in what they are best at, Samantha will be specializing in either pulling weeds or raking up leaves and benefiting from the principle of Division of Labor.
Explanation:
According to britannica.org, division of labour is "the separation of a work process into a number of tasks, with each task performed by a separate person or group of persons. It is most often applied to systems of mass production."
Division of labor facilitates the deployment of machinery and technology to complete simple tasks, thereby reducing costs of production, developing specialized talents, and increasing profits. It also makes possible the invention of tools and other forms of innovations. This is because workers who are focused on the same task can learn the tasks in details and develop better solutions from their learning experiences.
GroundCover Pools, Inc., agrees to build a swimming pool for Franci, but fails to complete the job. Franci hires EquiAqua, Inc., to finish the project. Candy may recover from GroundCover:___________.
a. the contract price less costs of materials and labor.
b. the contract price.
c. the costs needed to complete construction.
d. profits plus the costs incurred up to the time of the breach.
From the dropdown box beside each numbered balance sheet item, select of its balance sheet classification.
Account Title Classification
1. Prepaid rent (2 months of Rent) 11. Mortgages payable (due in 6 years)
2. Equipment 12. Automobiles
3. Repairs expense 13. Notes payable (due in 3 years)
4. Land (used in operations) 14. Land held for future expansion
5. Depreciation expense -Building 15. Notes payable (due in 2 months)
6. Office equipment 16. Notes receivable (due in 2 years)
7. Common stock 17. Interest paya ble (due in 1 week)
8. Buildings 18. Long-term investment in stock
9 Bonds payable (due in 10 years) 19. Wages payable
10. Accumulated depreciation-Trucks 20. Office supplies
A. Current assets
B. Long-term investments
C. Plant assets
D. Intangible assets
E. Current liabilities
F. Long-term liabilities
G. Equity
Answer:
Balance Sheet Classifications:
Account Title Classification
1. Prepaid Rent Prepaid Rent Current Assets
2. Equipment Property, Plant, & Equipment Plant Assets
4. Land Land Long-term assets
5. Land Land Long-term assets
6. Office Equipment Property, Plant & Equipment Plant Assets
7. Common Stock Common Stock Equity
8. Buildings Property, Plant & Equipment Plant Assets
9. Bonds Payable 10-year Bonds Payable Long-term Liabilities
10. Accumulated Depreciation -Truck Contra account to Long-term assets
11. Mortgages Payable 6-year Mortgages Long-term liabilities
12. Automobiles Automobiles Long-term assets
13. Notes payable 3-year Notes Payable Long-term liabilities
14. Land Land Long-term assets
15. Notes payable 2-month Notes Payable Current liabilities
16. Notes Receivable 2-year Notes Receivable Long-term assets
17. Interest Payable Interest Payable Current liabilities
18. Long-term investment in stock Long-term investments
19. Wages Payable Wages Payable Current liabilities
20. Office Supplies Office Supplies Current assets
Explanation:
a) Current assets are short-term financial resources owned by the entity from which economic benefits will accrue. They are mainly used as working capital to generate more revenue.
b) Long-term investments are investments in securities like bonds and stock held by the entity to generate interests and dividends.
c) Plant assets are property, plants, and equipment which are non current assets being used for the long-term in the running of the business, e.g. building.
d) Intangible assets are assets which are not physical in nature. Examples of intangible assets are patents and copyrights, mining rights, and intellectual property.
e) Current liabilities are financial obligations of the entity which must be settled with financial resources within a calendar year or less. Examples: Wages Payable, Accounts Payable, and Unearned Revenue.
f) Long-term liabilities are liabilities (financial obligations) which an entity settles with financial resources that can last for more than a calendar year. Examples included Bonds, Notes, and other payables which are not current.
g) Equity refers to the ownership interest in an entity. This is what the owners of the business are entitled when other creditors have been settled. It is made of contributed capital and retained earnings.
Computing unit and inventory costs under absorption costing LO P1
Trio Company reports the following information for the current year, which is its first year of operations.
Direct materials $ 13 per unit
Direct labor $ 17 per unit
Overhead costs for the year $100,000 per year
Variable overhead 200,000 per year
Fixed overhead Units produced this year 25,000 units
Units sold this year 19,000 units
Ending finished goods inventory in units 6,000 units
Compute the cost per unit using absorption costing Cost per unit of finished goods using: Absorption costing Cost per unit of finished goods
Determine the cost of ending finished goods inventory using absorption costing
Answer:
Unitary production cost= $42
Ending inventory= $252,000
Explanation:
Giving the following information:
Direct materials $ 13 per unit
Direct labor $ 17 per unit
Fixed overhead costs for the year= $100,000 per year
Variable overhead= 200,000 per year
Units produced this year 25,000 units
Ending finished goods inventory in units 6,000 units
The absorption costing method includes all costs related to production, both fixed and variable. The unit product cost is calculated using direct material, direct labor, and total unitary manufacturing overhead.
First, we need to calculate the unitary fixed and variable cost:
Unitary overhead= (100,000 + 200,000)/25,000= $12
Unitary production cost= 13 + 17 + 12= $42
COGS= 19,000*42= $798,000
Ending inventory= 6,000*42= $252,000
Debbie and Alan open a web-based bookstore together. They have been friends for so long that they start their business on a handshake after discussing how they will share both work and profits or losses from the business. Have Debbie and Alan formed a real partnership given that they have signed no written partnership agreement?
Answer:
Yes
Explanation:
Debbie and Alan have formed a real partnership even though they have signed no written partnership agreement because partnership does not require legal Documentation.
Many partnerships are formed naturally because the people who are involved in the business share similar goals, so their partnerships don't need formation documents to exist.
Consider the simple leisure model in which the individual chooses between leisure (L) and money income (M). The marginal utility of leisure (MUL) is 15 and the marginal utility of money (MUM) is 3. At the optimum, the wage rate:_______
a. $45
b. $0.20
c. $5
d. $15
Answer:
Wage rate is $5
Explanation:
The marginal utility of money=marginal utility of leisure/wage rate
When the formula is rearranged,wage rate is given thus:
wage rate=marginal utility of leisure/marginal utility of money
wage rate=15/3
wage rate =$5
In other words, the correct option is C,wage rate is $5
Option D would have been correct if the requirement was to calculate marinal utility of leisure
Sherry and John Enterprises are using the kaizen approach to budgeting for 2018. The budgeted income statement for January 2018 is as follows: Sales (168,000 units) $1,010,000 Less: Cost of goods sold 690,000 Gross margin 320,000 Operating expenses 400,000 (includes $55,000 of fixed costs) Operating income -$80,000 Under the kaizen approach, cost of goods sold and variable operating expenses are budgeted to decline by 1% per month. What is the budgeted operating income for March 2018
Answer:
February Kaizen Budgeted Operating income -$ 69,650
March Kaizen Budgeted Operating income-$ 59,405.5
Explanation:
The Kaizen costing primarily focuses on production processes and in it the cost reductions are obtained through increasing efficiency.
Sales (168,000 units) $1,010,000
Less: Cost of goods sold 690,000
Gross margin 320,000
Operating expenses 400,000 (includes $55,000 of fixed costs)
Operating income -$80,000
Calculations For February
Decrease by 1% of COGS $ 690,000= $ 690,000-$6900=$ 683,100
Decrease by 1% of Variable Expenses $ 345000= $ 345000-3450= $ 341550
Budgeted Operating Income Under Kaizen Costing For February
Sales (168,000 units) $1,010,000
Less: Cost of goods sold 683,100
Gross margin 326,900
Operating expenses
Variable Expenses $ 341550
Fixed Costs $55,000
Operating income -$ 69,650
Calculations For March
Decrease by 1% of COGS $ 683,100= $ 683,100-$6831=$ 676,269
Decrease by 1% of Variable Expenses $ 341 550= $ 341550-3415.5= $ 338134.5
Budgeted Operating Income Under Kaizen Costing For March
Sales (168,000 units) $1,010,000
Less: Cost of goods sold $ 676,269
Gross margin 333,731
Operating expenses
Variable Expenses $ 338134.5
Fixed Costs $55,000
Operating income -$ 59,405.5
Nathan’s Athletic Apparel has 2,000 shares of 5%, $100 par value preferred stock the company issued at the beginning of 2017. All remaining shares are common stock. The company was not able to pay dividends in 2017, but plans to pay dividends of $22,000 in 2018.Required: 1. & 2. Assuming the preferred stock is cumulative and noncumulative, how much of the $22,000 dividend will be paid to preferred stockholders and how much will be paid to common stockholders in 2018? Cumlative Non Cumlativepreferred Dividends for 2018 preferred Dividends in arrears for 2017 Remaining Dividends to common stockholders Total Dividens:
Answer:
1.
Preferred stock dividends to be paid in 2018 = $20000
Common stock dividends to be paid in 2018 = $2000
2.
Preferred stock dividends to be paid in 2018 = $10000
Common stock dividends to be paid in 2018 = $12000
Explanation:
The preferred stock dividends are always paid before the common stock dividends.
Cumulative preferred stock is the stock which accumulates or accrues dividends if the dividends are partially paid or not paid at all in a particular year. These dividends are accrued and are required to be paid by the company whenever it declares dividends.
Non cumulative preferred stock does not accrue or accumulates dividends. Thus, if dividends are not paid in a particular year, the company has no obligation to pay these dividends ever in the future.
1.
If the preferred stock is assumed to be cumulative, then the dividends in arrears for 2017 will be paid in 2018 along with dividends for 2018 on preferred stock before paying the common stock holders.
Preferred stock dividend per year = 2000 * 100 * 0.05
Preferred stock dividend per year = $10000
Preferred stock dividends to be paid in 2018 = 10000 + 10000 = $20000
Common stock dividends to be paid in 2018 = 22000 - 20000 = $2000
2.
If the preferred stock is assumed to be non cumulative, then the dividends in arrears for 2017 will not be paid in 2018. Only the dividends for 2018 on preferred stock will be paid before paying the common stock holders.
Preferred stock dividend per year = 2000 * 100 * 0.05
Preferred stock dividend per year = $10000
Preferred stock dividends to be paid in 2018 = $10000
Common stock dividends to be paid in 2018 = 22000 - 10000 = $12000
Assume the following cost of goods sold data for a company: 2018$1417000 20171204000 20161018000 If 2016 is the base year, what is the percentage increase in cost of goods sold from 2016 to 2018
Answer:
39.19%
Explanation:
2018 $1,417,000
2017 $1,204,000
2016 $1,018,000
if 2016 was the base year, then the % from 2016 to 2018 = ($1,417,000 - $1,018,000) / $1,018,100 = 39.19%
we can also calculate the % increase from 2016 - 2017 and from 2017 - 2018 in a similar manner:
2016 to 2017 increase = ($1,204,000 - $1,018,000) / $1,018,100 = 18.27%
2017 to 2018 increase = ($1,417,000 - $1,204,000) / $1,204,100 = 17.69%
Consider the following transactions for Partytime Toys:
October 8 Partytime Toys buys $141,800 worth of MegoBloack toys on account with credit terms of 2/10, n/30
October 11 Partytime Toys returns $14,100 of the merchandise to MegoBlock due to damage during shipment.
October 15 Partytime Toys paid the amount due, less the return and discount.
Required
1. Journalize the purchase transactions. Explanations are not required.
2. In the final analysis, how much did the inventory cost Partytime Toys?
Answer:
1. Journalize the entries:
October 8:
Dr Purchases $141,800
Cr Account Payable $141,800
October 11:
Dr Accounts Payable $ 14,100
Cr Purchase Return $ 14.100
October 15:
Dr Accounts Payable $114,930 (141,800-14,100)*90%
Cr Cash $ 114,930.
2. The inventory cost $114,930 to Party Time Toys.
Explanation:
First, we have to Journalize the entries;
October 8:
Dr. Purchases $141,800
Cr Account Payable $141,800
October 11:
Dr Accounts Payable $ 14,100
Cr Purchase Return $ 14.100
October 15:
Dr Accounts Payable $114,930 (141,800-14,100)*90%
Cr Cash $ 114,930.
so, The inventory cost $114,930 to Party Time Toys.
What is a Transaction?A transaction is a business event that has a monetary impact on an entity's financial statements and is recorded as an entry in its accounting records. Examples of transactions are as follows:
Paying a supplier for services rendered or goods delivered.
What is a transaction in a bank?A bank transaction is any money that moves in or out of your bank account. Types of bank transactions include cash withdrawals or deposits, checks, online payments, debit card charges, wire transfers, and loan payments.
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In the business gift-giving world, if a company gives a gift to a potential client for the purpose of influencing their behavior in their favor, it is unethical. What are the three criteria and dimensions of evaluating a business gift? Multiple Choice Question
Answer:
Context, culture and content
Explanation:
Gift giving in business is common and also contentious. Business gifts are often for advertising, sales promotion, and marketing communication medium.
These kind of gifts are for the following reasons:
1. In appreciation.
2. In the hopes of creating a positive first impression.
3. Returning a favor or expecting a favor in return for something.
When it comes to considering appropriate business gifts it is helpful for one to think about the content of the gift, the context of the gift, and the culture in which it will be received.
Giving a gift to a potential client for the purpose of influencing their behavior is a form of Bribery.
When a grocery store makes sure they always have 10 extra dozen eggs in the back storage area "just in case" they are needed, this type of inventory is typically called: A. Cycle Stock B. Safety Stock C. Anticipation Inventory D. Transportation Inventory E. Smoothing Inventory
Answer: Safety Stock
Explanation:
Safety stock is the additional quantity of a product that is kept by a company on its inventory so to reduce the risk of running out of the item in stock. The safety stock can be used when the sales of the product is more than the planned sales.
Regarding the question, when a grocery store makes sure they always have 10 extra dozen eggs in the back storage area "just in case" they are needed, this type of inventory is typically called the safety stock.
Taco Hut purchased equipment on May 1, 2021, for $12,000. Residual value at the end of an estimated eight-year service life is expected to be $3,000. Calculate depreciation expense using the straight-line method for 2021 and 2022, assuming a December 31 year-end. (Do not round your intermediate calculations. Round your final answers to the nearest whole dollar.)
Answer:
Depreciation expense in 2021 = $750
Depreciation expense in 2021 = $1125
Explanation:
Straight line depreciation expense = (Cost of asset - Salvage value) / useful life
($12,000 - $3,000) / 8 = $1125
Depreciation expense each year would be $1125.
Depreciation expense in 2021
There are 12 months in a year, so the depreciation expense each month would be $1125 / 12 = $93.75
Number of months in 2021 for which asset is used ( May to December) = 8 months
$93.75 x 8 = $750
Depreciation expense in 2022 would be $1125 since the machine was used for a full year.
I hope my answer helps you
The cost of production of completed and transferred goods during the period amounted to $540,000, and the finished products shipped to customers had total production costs of $375,000. The journal entry to record the transfer of costs from work in process to finished goods is
Answer:
Finished Goods $540,000 Debit
Work In Process $540,000 Credit
Explanation:
The journal entry to record the transfer of costs from work in process to finished goods is
Finished Goods $540,000 Debit
Work In Process $540,000 Credit
This means that finished goods have been debited with the amount $ 540,000 and work in process has credited an amount $ 540,000. In other words work in process has been transferred to the finished goods account.
The amount which was sold and shipped to customers was $ 375,000. It is related to sales .It means sales of goods costing $375,000 had been shipped.
On March 31. 2019, Home Decorating Pavilion received a bank statement showing a balance of $9,810. The balance in the firm's checkbook and Cash account on the same date was $10,276. The difference between the two balances is caused by the items listed below.
a. A $2,935 deposit made on March 30 does not appear on the bank statement.
b. Check 358 for $515 issued on March 29 and Check 359 for $1,710 published on March 30 have not yet been paid by the bank.
c. A credit memorandum shows that the bank has collected a $1,200 note receivable and interest of $120 for the firm.
d. A service charge of $31 appears on the bank statement.
e. A debit memorandum shows an NSF check for $555. The check was Issued by Dane Jarls, a credit customer.)
f. The firm's records indicate that Check 341 of March 1 was issued for $900 to pay the month's rent. However, the canceled check and the listing on the bank statement show that the actual amount of the check was $800.
g. The bank made an error by deducting a check for $590 issued by another business from the balance of Home Decorating Pavilion's account.
Required:
1. Prepare a bank reconciliation statement for the firm as of March 31, 2019.
2. Prepare a bank reconciliation statement for the firm as of March 31, 2019. (Enter all amounts as positive values.)
Answer:
Both requirements 1 and 2 are the same, but I guess one refers to a bank reconciliation statement and the other one to a cash account reconciliation.
Bank account reconciliation:
bank balance $9,810
+ deposits in transit $2,935
- outstanding checks 358 and 359 ($2,225)
+ check deducted by mistake $590
reconciled bank account $11,110
Cash account reconciliation:
Cash account balance $10,276
+ note and interest collected $1,320
- bank fees ($31)
- NSF check Dane Jarls ($555)
+ error on check 341 $100
reconciled cash account $11,110
Suppose a consumer has the following utility function defined over the 2 goods X and Y: a. If this consumer originally consumed 10 units of X and 24 units of Y, and if the consumption of X were increased to 12 units, how much Y would be would the consumer be willing to give up and maintain the initial level of satisfaction
Answer:
Y = 22 units (Approx)
Explanation:
Note:
The utility function is not given, the utility function is as follows.
U(X ,Y) = 2X + [tex]16Y^{1/2}[/tex]
So,
U(X ,Y) = 2X + [tex]16Y^{1/2}[/tex]
When X = 10 and Y = 24 units
U(10 ,24) = 2(10) + [tex]16(24)^{1/2}[/tex]
U(10 ,24) = 98.4
U(10 ,24) = 99 Units (Approx)
So,
U(X ,Y) = 2X + [tex]16Y^{1/2}[/tex]
When X = 12 Find Y
99 units = 2(12) + [tex]16Y^{1/2}[/tex]
75 = [tex]16Y^{1/2}[/tex]
Y = 21.97
Y = 22 units (Approx)
AllCity, Inc., is financed 36 % with debt, 14 % with preferred stock, and 50 % with common stock. Its cost of debt is 5.7 %, its preferred stock pays an annual dividend of $ 2.45 and is priced at $ 29. It has an equity beta of 1.13. Assume the risk-free rate is 2.4 %, the market risk premium is 7.3 % and AllCity's tax rate is 35 %. What is its after-tax WACC? g
Answer:
WACC is 7.84%
Explanation:
First we need to calculate the after-tax cost of debt
Cost of Debt (after Tax) = Pre-tax cost of debt ( 1 - Tax rate )
Cost of Debt (after Tax) = 5.7% x ( 1 - 35% ) = 3.705%
Now calculate the cost of preferred share
Cost of preferred share = Dividend on Preferred share / Market value of preferred share
Cost of preferred share = $2.45 / $29 = 0.0845 = 8.45%
Now calculate the cost f equity
Cost of equity = Rf + Beta x Market risk premium
Cost of equity = 2.4% + 1.13 x 7.3%
Cost of equity = 2.4% + 8.249%
Cost of equity = 10.649%
Now use following formula to calclulate the WACC
WACC = ( Cost of Equity x Weight of common stock ) + ( Cost of Debt x Weight of Debt ) + ( Cost of preferred share x weight of preferred share )
WACC = ( 10.649% x 50% ) + ( 3.705% x 36% ) + ( 8.45% x 14% )
WACC = 5.3245% + 1.3338% + 1.183%
WACC = 7.8413%
A Project Engineer at the Michigan office is excited about an engineering software change to improve the reliability of the central processing unit. Unfortunately, the change involves some conflicting proprietary rights due to the Chief Designer's past work ties to Bridgeway's major competitor. Even though the Project Engineer was warned of this issue, she really wants to be the first to market with this change. There may be future financial rewards for her and the company that may be too good to pass up. As the Chief Liaison Officer, should you suggest the Project Engineer go forward with this engineering change
Answer:
9 76
Explanation:
9
A portfolio consists of $13,600 in Stock M and $19,400 invested in Stock N. The expected return on these stocks is 8.10 percent and 11.70 percent, respectively. What is the expected return on the portfolio
Answer:
Portfolio return is 10.22%
Explanation:
The expected return of a portfolio is the function of the weighted average of the individual stock returns that form up the portfolio. The formula to calculate the expected return of the portfolio is as follows,
Portfolio Return = wA * rA + wB * rB + ... + wN * rN
Where,
w is the weightage of each asset/stock in the portfolior is the return of each stockThe weightage of each stock can be calculated by dividing the investment in the stock by the total investment in the portfolio.
Total investment - portfolio = 13600 + 19400 = $33000
Portfolio Return = 13600/33000 * 0.0810 + 19400/33000 * 0.1170
Portfolio Return = 0.10216 or 10.216% rounded off to 10.22%
QS 9-8 Percent of sales method LO P3 Warner Company’s year-end unadjusted trial balance shows accounts receivable of $105,000, allowance for doubtful accounts of $660 (credit), and sales of $340,000. Uncollectibles are estimated to be 1% of sales. Prepare the December 31 year-end adjusting entry for uncollectibles.
Answer:
Bad Debts Expense $ 2740 Debit
Allowance for doubtful accounts $ 2740 Credit
Explanation:
Warner Company
Accounts receivable $105,000,
Allowance for doubtful accounts $660 (credit),
Sales $340,000
Uncollectibles are estimated to be 1% of sales.
Uncollectibles of 1% of sales means that after adjusting entry is passed the uncollectible amount must be $3400 ( 1% of $340,000) .
We have a credit balance of $ 660
The debit balance in the Allowance for doubtful accounts must be $ 3400.
The adjustment will be = $3400- $660= $ 2740
The Adjusting Entry will be
Bad Debts Expense $ 2740 Debit
Allowance for doubtful accounts $ 2740 Credit
Kathryn is looking for ideas on how best to grow her small business. She and her three partners sit down to brainstorm suggestions. Which of the following rules will help ensure a positive brainstorming session?
A. Let everyone jump in to the conversation.
B. Offer criticisms of ideas right away so you don't waste time.
C. Don't be too focused…let your mind wander.
D. Focus on the quality of the ideas…not the quantity.
E. Encourage wild ideas.
Answer:
B
Explanation:
So you dont waste ur time
Encouraging wild ideas of the following rules will help ensure a positive brainstorming session. Thus, option D is correct.
What is brainstorming suggestions?Various teams often employ brainstorming to come up with solutions to definite design issues. Teams address a topic using techniques, and inquiries in a supervised condition and a free-thinking atmosphere.
They generate a wide range of concepts and connect them to identify probable answers. As there is a group in which there are small businesses that is present. Therefore it is important that every idea is validated and looked for.
Also encouraging ideas will help to gain more perspective of the employees and the business as well as the consumer. Therefore, option D is the correct option.
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Sunshine LLC sold furniture for $75,650. Sunshine bought the furniture for $89,870 several years ago and has claimed $24,935 of depreciation expense on the machine. What is the amount and character of Sunshine's gain or loss
Answer:
The gain is $10,715
Explanation:
Solution
Given that:
The cost of furniture =$89,870
Accumulation of depreciation = $24,935
Thus
The book value of furniture= $89,870 - $24,935
=$64,935
The sale value of the furniture = $75,650
Now,'
The gain on sale of the furniture is given below:
Gain on sale of furniture = sale price - book value
= $75,650 - $64,935
=$10,715
The gain is The long term capital gain on sale of furniture is $10,715
Orange Corporation has gathered the following data on a proposed investment project: Investment in depreciable equipment $ 620,000 Annual net cash flows $ 86,000 Life of the equipment 10 years Salvage value $ 0 Discount rate 6 % The company uses straight-line depreciation on all equipment. Assume cash flows occur uniformly throughout a year except for the initial investment. The payback period for the investment would be:
Answer:
7.2 years
Explanation:
Payback period calculates the amount of the time it takes to recover the amount invested in a project from its cumulative cash flows.
Amount invested = $620,000
Cash flow = $86,000
Payback period = $620,000 / $86,000 = 7.2 years
I hope my answer helps you
Torque Manufacturing forecasts that its production will require 600,000 tons of bauxite over its planning period. Demand for Torque's products is stable over time. Ordering costs amount to an average of $15.00 per order. Holding costs are estimated at $1.25 per ton of bauxite. If Torque uses an inventory quantity of 3,000 tons, what will be the total annual cost of inventory
Answer:
Total annual cost of inventory is 4875.
Explanation:
The demand for bauxite by Torque manufacturing (A) = 600000 tons.
It is given that the demand is stable.
The average ordering cost of bauxite (O) = $15 per order.
The cost of holding to bauxite (CP) = $1.25 per ton.
The economics order quantity (EOQ) = 3000
The total annual cost of inventory = ordering cost + inventory cost
[tex]\text{Total annual cost} = \frac{A}{EOQ} \times O + \frac{EOQ}{2} \times CP \\[/tex]
[tex]\text{Total annual cost} = \frac{600000}{3000} \times 15 + \frac{3000}{2} \times 1.25 = 4875[/tex]
Hannah and Ellen rely on consistent messages received via word of mouth and are older and more conservative than other customers of Product X. Hannah and Ellen most likely fall into which of the following categories?a. late majority
b. early majority
c. laggards
d. innovators
Answer:
they fall into early majority
Identify the key elements to incorporate when making a request for a claim or adjustment. Check all that apply. Communicating feelings politely Excessive detail Chronology of details Moderate tone Logical case Sincere praise
Answer:
1. Communicating feelings politely
2. Moderate tone
3. Logical case
4. Sincere praise
Explanation:
In the quest of engaging in business transactions between individuals and businesses, the business might sometimes not meet up to the customer's needs. When customers want to make their claims or request for an adjustment, it is vital that they communicate their feelings in a polite manner, use a moderate tone, build their case logically, and offer sincere praise to the organization in question. In so doing, their claims can be addressed in a civil manner and they would be more likely to get a positive result.
Offering excessive details and bombarding the organization with the chronology of details might lead to confusion as to the real problems to be addressed.
Grouper Company follows the practice of pricing its inventory at the lower-of-cost-or-market, on an individual-item basis. Item Quantity Cost Cost to Estimated Cost Of Normal NO. Per Replace Selling Completion Profit Unit Price and Disposal 1,320 1,500 $3.87 $3.63 $5.45 $0.421333 1,200 3.27 2.78 4.24 0.61 1426 1,100 5.45 4.48 6.05 0.48 1437 1,300 4.36 3.75 3.87 0.30 1510 1,000 2.72 2.42 3.93 0.97 1522 1,200 3.63 3.27 4.60 0.48 1573 3,300 2.18 1.94 3.03 0.91 1626 1,300 5.69 6.29 7.26 0.61 From the information above, determine the amount of Grouper Company inventory.
Answer:
Normal profit was missing, so I looked for it:
Item Q Cost Cost to Estimated Cost Normal*
No. p/ unit replace selling price of Completion profit
and Disposal
1320 1,500 $3.87 $3.63 $5.45 $0.42 $1.38
1333 1,200 $3.27 $2.78 $4.24 $0.61 $0.67
1426 1,100 $5.45 $4.48 $6.05 $0.48 $0.47
1437 1,300 $4.36 $3.75 $3.87 $0.30 $0.25
1510 1,000 $2.72 $2.42 $3.93 $0.97 $1.18
1522 1,200 $3.63 $3.27 $4.60 $0.48 $0.84
1573 3,300 $2.18 $1.94 $3.03 $0.91 $0.93
1626 1,300 $5.69 $6.29 $7.26 $0.61 $1.56
we have to first determine the ceiling NRV and floor NRV
Item Cost to Estimated Cost NRV NRV
No. replace selling price of Completion ceiling floor
and Disposal
1320 $3.63 $5.45 $0.42 $5.03 $3.65
1333 $2.78 $4.24 $0.61 $3.63 $2.96
1426 $4.48 $6.05 $0.48 $5.57 $5.10
1437 $3.75 $3.87 $0.30 $3.57 $3.32
1510 $2.42 $3.93 $0.97 $2.96 $1.78
1522 $3.27 $4.60 $0.48 $4.12 $3.28
1573 $1.94 $3.03 $0.91 $2.12 $1.19
1626 $6.29 $7.26 $0.61 $6.65 $5.09
we have to determine the market value:
Item Cost to NRV NRV Market value
No. replace ceiling floor (middle of the 3)
1320 $3.63 $5.03 $3.65 $3.63
1333 $2.78 $3.63 $2.96 $2.96
1426 $4.48 $5.57 $5.10 $5.10
1437 $3.75 $3.57 $3.32 $3.57
1510 $2.42 $2.96 $1.78 $2.42
1522 $3.27 $4.12 $3.28 $3.28
1573 $1.94 $2.12 $1.19 $1.94
1626 $6.29 $6.65 $5.09 $6.29
Item Market value Cost Quantity Inventory
No. per unit value
1320 $3.63 $3.87 1,500 $5,445
1333 $2.96 $3.27 1,200 $3,552
1426 $5.10 $5.45 1,100 $5,610
1437 $3.57 $4.36 1,300 $4,641
1510 $2.42 $2.72 1,000 $2,420
1522 $3.28 $3.63 1,200 $3,939
1573 $1.94 $2.18 3,300 $6,402
1626 $6.29 $5.69 1,300 $7,397
total $39,406
A well-known industrial firm has issued $1,000 bonds that carry a 4% coupon interest rate paid semiannually. The bonds mature 20 years from now, at which time the industrial firm will redeem them from $1,000 plus the terminal semiannual interest payment. From the financial pages of your newspaper you learn that the bonds may be purchased for $715 each ($710 for the bond plus a $5 sales commission). What nominal annual rate of return would you receive if you purchased the bond now and held it to maturity 20 years from now
Answer:
5.59%
Explanation:
$1,000 bonds carrying a 4% coupon rate, semiannual coupon $20, matures in 20 years
if you purchase the bonds at $715, the nominal annual rate of return = coupon payments / bond price = ($20 + $20) / $715 = $40 / $715 = 5.59%
The nominal annual rate of return is calculated by dividing the revenue generated by an investment by the cost of the investment.
A seller uses a perpetual inventory system, and on April 4, it sells $5,000 in merchandise (its cost is $2,400) to a customer on credit terms of 3/10, n/30. Complete the two journal entries (the first for the revenue part of the transaction and the second for the cost part) to record the sales transaction by selecting the account names and dollar amounts from the drop-down menus. Date Account Title Debit Credit April 4 select select select select select select select select select select select select Slide 3
Answer:
1. Dr Account receivable 5,000
Cr Sales 5,000
2.Cost of goods sold 2,400
Cr Merchandise inventory 2,400
Explanation:
Preparation of the two journal entries
1. The record of the revenue part of the transaction
Since we were told that the seller on April 4, sells $5,000 in merchandise using perpetual inventory system this means we have to record the transaction as :
Dr Account receivable 5,000
Cr Sales 5,000
2.The record of the cost part of the transaction
Since we were told the merchandise cost $2,400 this means we have to record the transaction as:
Cost of goods sold 2,400
Cr Merchandise inventory 2,400