Answer:
A. July 1, 2021
Dr Investment in bonds755,000
Cr Discount on bondinvestment80,000
Cr Cash 675,000
B. December 31, 2021
Dr Cash 25,100
Cr Discount on bond investment 1,775
Cr Interest revenue16,875
Explanation:
A. Preparation of the journal entries to record Lance Brothers' investment in the bonds on July 1, 2021,
July 1, 2021
Dr Investment in bonds755,000
Cr Discount on bondinvestment80,000
(755,00-675,000)
Cr Cash 675,000
(To record Lance Brothers' investment in the bonds)
B. Preparation of the journal entries to record interest on December 31, 2021, at the effective (market) rate
December 31, 2021
Dr Cash 25,100
(4.00%/2 × $755,000)
Cr Discount on bond investment 1,775
(25,100-16,875)
Cr Interest revenue16,875
(5%2 × $675,000)
(To record interest at the effective)
During Year 1, Hardy Merchandising Company purchased $20,000 of inventory on account. Hardy sold inventory on account that cost $15,000 for $22,500. Cash payments on accounts payable were $12,500. There was $20,000 cash collected from accounts receivable. Hardy also paid $4,000 cash for operating expenses. Assume that Hardy started the accounting period with $18,000 in both cash and common stock.
Required:
a. Identify the events described in the preceding paragraph and show them in a horizontal statements model. The first event is recorded as an example.
b. What is the balance of accounts receivable at the end of Year 1?
c. What is the balance of accounts payable at the end of Year 1?
d. What are the amounts of gross margin and net income for Year 1?
e. Determine the amount of net cash flow from operating activities.
Answer and Explanation:
a. The events described should be shown in the attachment below;
b. The balance of account receivable at the end of year 1 is $2,500
c. The balance of account payable at the end of year 1 is $7,500
d. The amount of gross margin and net income is
Gross margin = $22,500 - $15,000 = $7,500
Net Income = $7,500 - $4,000 = $3,500
e. The amount of net cash flow from operating activities is $3500
Juanita Cash, the operations planner for the First State Savings and Loan, is planning the next quarter's level of deposits. She suspects that First State's level of deposits is directly related to the interest rate paid. The recent historical data are as follows.
Regression Statistics
Multiple R 0.995047482
R Square 0.990119491
Adjusted R Square 0.987649363
Standard Error 0.503701313
Observations 6
ANOVA
df SS MS
Regression 1 101.6984733 101.7
Residual 4 1.014860051 0.2537
Total 5 102.7133333
Coefficients Standard Error t Stat
Intercept -39.5559796 2.749298366 -14.39
Interest Rate % X 11.14503817 0.556669499 20.021
For each one percent increase in the interest rate, by how much do the deposits increase?
Answer:
For each one percent increase in the interest rate, amount of deposit increases by 11.145%
Explanation:
To obtain the amount rate at which deposit increase per percentage increase in interest rate ;
We obtain the slope Coefficient of the regression equation between the amoub of deposit and interest rate paid.
From the result of the analysis given ;
The slope Coefficient of X, interest rate % is 11.145
Hence, For each one percent increase in the interest rate, amount of deposit increases by 11.145%
ack owns a local trucking company. With fuel costs being expensive, Jack wants to evaluate how much fuel, on average, he should store in his 10,000 gallon fuel tank. Each year Jack uses 185,000 gallons of diesel (usage is spread evenly throughout the year). Jack knows with certainly that he can have a load of fuel delivered in 5 days. The price of fuel is $1.93 per gallon and there is a separate $100 ordering fee per order. Jack thinks his holding cost per unit is 25%. What is Jack's economic order quantity (EOQ) of fuel in gallons using the information above
Answer:
8,756.94 gallons
Explanation:
The computation of the economic order quantity is shown below:
As we know that
Economic order quantity is
[tex]= \sqrt{\frac{2\times A\times O}{C} } \\\\= \sqrt{\frac{2\times 185,000\times \$100}{\$1.93\times 25\%} } \\\\= \sqrt{\frac{37,000,000}{0.4825} }[/tex]
= 8,756.94 gallons
Here A represent annual demand
O represent ordering cost
C denotes carrying cost
Indicate which of the following has an effect on financing cash flows. (Amounts that decrease cash should be indicated with a minus sign.)
a. Notes payable with a carrying value of $15,000 are retired for $16,000 cash, resulting in a $1,000 loss.
b. Paid cash dividends of $11,000 to common stockholders.
c. Acquired $20,000 worth of machinery in exchange for common stock.
Items Amount Effect on financing cash flows
a. Notes payable (1,000) Decrease
b. Dividends (11,000) Decrease
c. Machinery $ 20,000 No effect
Answer:
Effect on financing cash flows.
a. $16,000 Decrease
b. $11,000 Decrease
c. No Effect
Explanation:
Only consider cash transactions on the financing activities. Financing Activities involve the acquisition and repayment of capital and debt finance.
Managers need to understand how information flows within the organization, how their organization interacts with other organizations, and how the various parts of the organization interact with one another.
True
False
Consider this data for Marston Manufacturing Company and use it to complete the table:
Selected Financial Data for
Marston Manufacturing Company
Average cash $57,813
Average accounts payable $320,000
Average accounts receivable $1,387,500
Average inventories $693,750
Average cash sales $4,625,000
Average credit sales $13,875,000
Average cost of goods sold $8,325,000
Average number of days per year 365 days
Inventory conversion period 30.42 days
Payables deferral period days
Receivables conversion period
Operating cycle 66.92 days
Cash conversion cycle 52.89 days
Answer and Explanation:
The computation is shown below:
Payable Deferral Period = 365 ÷ Payable turnove ratio
where,
Payables Turnover Ratio = Average Cost of Goods Sold ÷ Average Accounts Payable
= ($8,325,000 ÷ $320,000)
= 26.02
Now payable deferral period is
= 365 ÷ 26.02
= 14.02 days
And, the receivables conversion period is
= 365 ÷ receivable turnover ratio
where
Receivables Turnover Ratio = Average credit sales ÷ Average Accounts receivable
= ($13,875,000 ÷ $1,387,500)
= 10
Now receivable turnover period is
= 365 ÷ 10
= 36.50 days
Hardwig Inc. is considering whether to pursue a restricted or relaxed current asset investment policy. The firm's annual sales are expected to total $3,600,000, its fixed assets turnover ratio equals 4.0, and its debt and common equity are each 50% of total assets. EBIT is $150,000, the interest rate on the firm's debt is 10%, and the tax rate is 40%. If the company follows a restricted policy, its total assets turnover will be 2.5. Under a relaxed policy its total assets turnover will be 2.2.-Refer to the data for Hardwig Inc. If the firm adopts a restricted policy, how much lower would its interest expense be than under the relaxed policy?A) $8,418B) $8,861C) $9,327D) $9,818E) $10,309
Answer:
D) $9,818
Explanation:
This can be determined using the following 3 steps.
Step 1. Calculation of interest expense under a restricted policy
Sales = $3,600,000
Asset turnover = Sales/ Total assets = 2.5 .................. (1)
Substituting sales into equation (1) and solve for Total assets, we have:
$3,600,000/ Total assets = 2.5
Total assets = $3,600,000 / 2.5
Total assets = $1,440,000
Since Debt is 50% of Total assets, we therefore have:
Debt = 50% * Total assets = 50% * $1,440,000 = $720,000
Since the interest rate on the firm's debt is 10%, we have:
Interest expense under a restricted policy = 10% * Debt = 10% * $720,000 = $72,000
Step 2. Calculation of interest expense under a relaxed policy
Sales = $3,600,000
Asset turnover = Sales/ Total assets = 2.2 .................. (1)
Substituting sales into equation (1) and solve for Total assets, we have:
$3,600,000/ Total assets = 2.2
Total assets = $3,600,000 / 2.2
Total assets = $1,636,363.64
Since Debt is 50% of Total assets, we therefore have:
Debt = 50% * Total assets = 50% * $1,636,363.64 = 818,181.82
Since the interest rate on the firm's debt is 10%, we have:
Interest expense under a restricted policy = 10% * Debt = 10% * 818,181.82 = $81,818
Step 3. Calculation of difference between interest expense under a restricted policy and a relaxed policy
Difference between interest expenses = Interest expense under a restricted policy - Interest expense under a relaxed policy = $81,818 - $72,000 = $9,818
Therefore, the interest expense under a relaxed policy would be $9,818 lower than interest expense under the relaxed policy.
explain why the income tax graph has different slopes. what is the meaning of each slope?
Buffalo Corporation is authorized to issue 45,000 shares of $5 par value common stock. During 2020, Buffalo took part in the following selected transactions.
1. Issued 4,500 shares of stock at $48 per share, less costs related to the issuance of the stock totaling $6,300.
2. Issued 1,100 shares of stock for land appraised at $45,000. The stock was actively traded on a national stock exchange at approximately $49 per share on the date of issuance.
3. Purchased 530 shares of treasury stock at $46 per share. The treasury shares purchased were issued in 2016 at $43 per share.
Instructions:(a) Prepare the journal entry to record item 1.(b) Prepare the journal entry to record item 2.(c) Prepare the journal entry to record item 3 using the cost method.
Answer:
A
Dr Cash $209,700
Cr Paid-In-Capital in excess of par-common stock $187,200
Cr Common Stock $22,500
B. Dr Land $53,900
Cr Common Stock $5,500
Cr Paid-In-Capital in excess of par-common stock $48,400
C. Dr Treasury Stock $24,380
Cr Cash $24,380
Explanation:
A. Preparation of the journal entry to record item1
Dr Cash (4,500*$48-6,300) $209,700
Cr Paid-In-Capital in excess of par-common stock $187,200
($209,700-$22,500)
Cr Common Stock $22,500
(4,500*$5)
(Being to record common stock issued)
B. Preparation of the journal entry to record item 2
Dr Land (1,100*$49) $53,900
Cr Common Stock $5,500
(1,100*$5)
Cr Paid-In-Capital in excess of par-common stock $48,400
($53,900-$5,500)
(Being to record land puchased in exchange for common stock)
C. Preparation of the journal entry to record item 3 using the cost method
Dr Treasury Stock $24,380
(530*$46)
Cr Cash $24,380
(Being to record purchase of treasury stock)
The carrying value of bonds at maturity always equals: Group of answer choices the amount of cash originally received in exchange for the bonds plus any unamortized discount or less any premium. $0. the amount of cash originally received in exchange for the bonds. the amount of discount or premium. the par value of the bond.
Answer:
d. the par value of the bond.
Explanation:
All the discount or premium would have been amortized at the time of maturity. Only the par value of the bond will be leftover which should be repaid. Hence, the correct answer is option d "par value of the bond"
The carrying value of bonds at maturity is the amount of cash originally received in exchange for the bonds plus any unamortized discount or less any premium.
To understand this, let's break it down. When a company issues bonds, it receives a certain amount of cash from investors in exchange for the bonds. This initial cash received is an important component of the carrying value. Additionally, if the bonds were initially sold at a discount (below their face value), the discount is amortized over the life of the bond and must be accounted for.
The unamortized discount is added to the initial cash received to calculate the carrying value. On the other hand, if the bonds were sold at a premium (above their face value), the premium is amortized over time and subtracted from the initial cash received to determine the carrying value.
So, the correct answer is option (b). The amount of cash originally received in exchange for the bonds plus any unamortized discount or less any premium.
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Home Furnishings reports inventory using the lower of cost and net realizable value (NRV). Below is information for its year ended December 31, 2020. Inventory Quantity Unit Cost Unit NRV Furniture 200 $85 $100 Electronics 50 $400 $300 Calculate the value of Home Furnishings ending inventory using their methodology described above.
Answer:
1.$37,000
2.$32,000/
Explanation:
1. Calculation to the Cost of ending inventory before any adjustment
Inventory Quantity Unit Cost Total cost
Furniture 200* $85 = $17,000
Electronics 50* $400= $20,000
Cost of ending inventory before any adjustment =$37,000
Therefore the Cost of ending inventory before any adjustment will be $37,000
2. Calculation to determine the ending inventory using the lower of cost and net realizable value.
Inventory Quantity Unit NRV
Furniture 200* $100 =$20,000
Electronics 50* $300= $15,000
Total cost of ending inventory using lower of cost and net realizable value (NRV) $32,000
Therefore the ending inventory using the lower of cost and net realizable value will be $32,000
Alvis Construction Supply Company has a department that manufactures wood trusses (wood frames used in the construction industry). The following information is for the production of these trusses for the month of February:
Work-in-Process Inventory, February 1...........................................4,000 trusses
Direct materials: 100% complete.................................................$10,480
Conversion: 20% complete..........................................................$15,258
Units started during February........................................................18,000 trusses
Units completed during February and transferred out..................17,000 trusses
Work-in-Process Inventory, February 29
Direct materials: 100% complete
Conversion cost: 40% complete
Costs incurred during February
Direct materials.....................................................................................$ 59,040
Conversion............................................................................................$ 92,092
Required:
Using the weighted-average method, calculate the following:
1. a. Costs per equivalent unit.
b. Cost of goods completed and transferred out.
c. Costs remaining in the Work-in-Process Inventory account.
2. Assume that you are the company’s controller. The production department’s February equivalent unit cost is higher than expected. If the manager of the first department asks you to do him a favor by increasing the ending inventory completion percentage from 40 to 60% to lower the unit costs, what should you do? How much would unit cost be affected by this request?
Answer:
1-a. Weighted average cost per unit = $8.81
1-b. Cost of goods completed and transferred out = $149,770
1-c. Costs remaining in the Work-in-Process Inventory account = $27,100
2-a. The request of the manager of the first department should not be granted as an accountant.
2-b. This request has made the unit cost to reduce by $0.28.
Explanation:
1-a. Calculate costs per equivalent unit.
Note: See number 1-a in the attached excel file for the calculation of costs per equivalent unit for materials and conversion.
From the attached excel file, cost per equivalent units of production (EUP) are as follows:
Material's cost per EUP = Total costs of material / Material's EUP = $69,520 / 22,000 = $3.16
Conversion's cost per EUP = Total costs of conversion / Conversion's EUP = $107,350 / 19,000 = $5.65
Weighted average cost per unit = Material's cost per EUP + Conversion's cost per EUP = $3.16 + $5.65 = $8.81
1.-b. Calculate cost of goods completed and transferred out.
Note: See number 1-b in the attached excel file for the calculation of costs of goods completed and transferred out.
From the attached excel file, we have:
Direct Materials' Total Cost transferred Out = $53,720
Conversion's Total Cost transferred Out = $53,720
Cost of goods completed and transferred out = Direct Materials' Total Cost transferred Out + Conversion's Total Cost transferred Out = $53,720 + $96,050 = $149,770
1-c. Calculate costs remaining in the Work-in-Process Inventory account.
Note: See number 1-c in the attached excel file for the calculation of costs remaining in the Work-in-Process Inventory account.
From the attached excel file, we have:
Costs remaining in the Work-in-Process Inventory account = Total cost of ending WIP = $27,100
2. Assume that you are the company’s controller. The production department’s February equivalent unit cost is higher than expected. If the manager of the first department asks you to do him a favor by increasing the ending inventory completion percentage from 40 to 60% to lower the unit costs, what should you do? How much would unit cost be affected by this request?
2-a. What should you do?
The request of the manager of the first department should not be granted as an accountant. This is because granting his request will a negative effect on the integrity of the accountant and the accounts prepared may not show a true and fair view that may be detected by the external auditor.
2-b. How much would unit cost be affected by this request?
Note: See number 2 in the attached excel file for the calculation of costs per equivalent unit for materials and conversion.
Initial weighted average cost per unit from part 1-a = $8.81
From part 2 of the attached excel file, cost per equivalent units of production (EUP) are as follows:
New material's cost per EUP = Total costs of material / Material's EUP = $69,520 / 22,000 = $3.16
New conversion's cost per EUP = Total costs of conversion / Conversion's EUP = $107,350 / 20,000 = $5.37
New weighted average cost per unit = Material's cost per EUP + Conversion's cost per EUP = $3.16 + $5.37 = $8.53
Initial weighted average cost per unit from part 1-a = $8.81
Effect on unit cost = New conversion's cost per EUP - Initial weighted average cost per unit from part 1-a = $8.53 - $8.81 = -$0.28
The negative sign in effect on unit cost of -$0.28 indicates that this request has made the unit cost to reduce by $0.28.
Workings:
w.1: Units of ending WIP = Work-in-Process Inventory, February 1 + Units started during February - Units completed during February and transferred out = 4,000 + 18,000 – 17,000 = 5,000
Peter and Michelle are recent business school graduates with very few resources. They decided to start a business as partners. Michelle was a much better negotiator than Peter (because she had taken a MOOC called "Successful Negotiation"!). She persuaded Peter to sign a partnership agreement that was extremely unfair to him. He should be able to back out of the agreement because (select one):
Answer: The agreement is unconscionable because it is only favouring Michelle
Explanation:
Based on the information provided in the question, Peter should be able to back out of the agreement because in this case, the agreement is unconscionable. In this case, the agreement only favours Michelle and not both of them.
In this case, since the contract is unfair, it is said to be unconscionable and Peter may not enforce it.
Dowlen, Inc., is considering the purchase of a machine that would cost $150,000 and would last for 6 years. At the end of 6 years, the machine would have a salvage value of $23,000. The machine would reduce labor and other costs by $36,000 per year. Additional working capital of $6,000 would be needed immediately. All of this working capital would be recovered at the end of the life of the machine. The company requires a minimum pretax return of 12% on all investment projects. The net present value of the proposed project is closest to (Ignore income taxes.):
Answer:
$3,663.17
Explanation:
Net present value is the present value of after-tax cash flows from an investment less the amount invested.
NPV can be calculated using a financial calculator
Cash flow in year 0 = $150,000 + $6,000 = $156,000
Cash flow in year 1 to 5 = $36,000
Cash flow in year 6 = $36,000 + $23,000 = 59,000
i = 12%
NPV = $3,663.17
To find the NPV using a financial calculator:
1. Input the cash flow values by pressing the CF button. After inputting the value, press enter and the arrow facing a downward direction.
2. after inputting all the cash flows, press the NPV button, input the value for I, press enter and the arrow facing a downward direction.
3. Press compute
What are the benefits of the DG PickUp
program? (Select all that apply.)
Drives sales
Maintains Dollar General's competitiveness
Decreases shrink
Adds value and convenience for our customers
Limits customer interactions
PLEASE HELP
Answer:
Drives sales
Maintains Dollar General's competitiveness
Adds value and convenience for our customers
Explanation:
Dollar General Buy is a program which enables customers to shop online from the store and discount coupons can be used with the purchase. It drives sales of the store as it provides convenience to the customers and maintains their records.
Refer to SM1 Q2. Thomas has a ticket to go to a movie this Saturday. He was willing to pay $20, but he only paid $15 for it. After he bought the movie ticket his friend offered to take him out to dinner Saturday evening. Thomas has to choose between going for the movie or a free dinner. He can resell the ticket for $10. What is the lowest value that Thomas should place on the free dinner to make him choose the free dinner rather than the movie.
Answer:
$5 is the value for dinner.
Explanation:
Thomas has bought the movie ticket for $15. The movie ticket can be resell at a price of $10. His friend has asked him for free dinner but the dinner will cost him $5 since he will incur a loss of $5 on the movie ticket. The lowest value is the $5 for the dinner and the maximum value is $15 for the movie. Thomas can choose between two alternatives but will go towards the lowest value.
Which speaker most supports the ideals of a command economy?
Speaker 1: Economies today are too complicated. People should have simple
lives and just do the jobs their families have done for generations.
Speaker 2: Private corporations care only about profits, not about people. The
government should take over the corporations and put the workers in charge.
Speaker 3: The government needs to stop interfering with the economy.
Big companies are rich because they do a good job providing the goods
everyone needs.
Speaker 4: People are too extreme in their economic viewpoints. There should
be a middle ground between total corporate freedom and the government
running the economy.
A. Speaker 3
B. Speaker 4
C. Speaker 2
O
o
D. Speaker 1
Answer: SPEAKER 2
Explanation:
Speaker 2: Private corporations care only about profits, not about people. This is the correct option.
What are Private corporations?Private corporations, also known as privately-held companies, are businesses that are owned by a small group of individuals or entities and are not publicly traded on stock exchanges.
Private corporations are not required to disclose their financial information to the public, which allows them to maintain greater control over their operations and strategic decisions.
Some examples of private corporations include family-owned businesses, small and medium-sized enterprises, and startups. Private corporations can operate in a variety of industries, including manufacturing, retail, services, and technology.
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c
You gain health benefits from exercising for a minimum of
a. 10 minutes three times a week
b. 10 minutes two times a week
C. 20 minutes three times a week
d. 20 minutes two times a week
Please select the best answer from the choices provided
A
B
Ο Ο Ο Ο
D
Answer:
I believe its C. hope this helps<3333
King Company leased equipment from Mann Industries. The lease agreement qualifies as a finance lease and requires annual lease payments of $52,538 over a six-year lease term (also the asset's useful life), with the first payment at January 1, the beginning of the lease. The interest rate is 5%. The asset being leased cost Mann $230,000 to produce.
1. Determine the price at which the lessor is "selling the asset (present value of the lease payments).
2. What would be the amounts related to the lease that the lessor would report in its income statement for the year ended December 312(Ignore taxes)?
Answer:
1. The price at which the lessor is "selling the asset is $280,000.05.
2. These are the following:
Sales revenue = $280,000.05
Cost of goods sold = $230,000
Interest revenue = $11,373.10
Explanation:
1. Determine the price at which the lessor is "selling the asset (present value of the lease payments).
Since the first payment is at the beginning of the lease, this can be determined using the formula for calculating the present value of an annuity due as follows:
PV = P * ((1 - (1 / (1 + r))^n) / r) * (1 + r) …………………………………. (1)
Where;
PV = Present value of the lease payments or the price at which the lessor is "selling the asset = ?
P = Annual lease payments = $52,538
r = Interest rate = 5%, or 0.05
n = number of years of the lease term = 6
Substitute the values into equation (1), we have:
PV = $52,538 * ((1 - (1 / (1 + 0.05))^6) / 0.05) * (1 + 0.05)
PV = $280,000.05
Therefore, the price at which the lessor is selling the asset is $280,000.05.
2. What would be the amounts related to the lease that the lessor would report in its income statement for the year ended December 312(Ignore taxes)?
These are the following:
Sales revenue = The price at which the lessor is selling the asset = $280,000.05
Cost of goods sold = $230,000
Interest revenue = (Sales revenue - First annual lease payments) * Interest rate = ($280,000.05 - $52,538) * 5% = $11,373.10
Hyde Boats purchased machinery on January 1 at a list price of $295,000, with credit terms 3/10, n/30. Payment was made within the discount period. Hyde Boats paid $17,700 sales tax on the machinery, and paid installation charges of $3,900. Hyde Boats also paid $15,900 to pour a concrete base that was necessary to place the machinery in service.
What is the total cost of the new machinery?
A. $332.500
B. $323.650
C. $307.750
D. $319.750
Answer:
Total purchase price= $323,650
Explanation:
Giving the following information:
Purchase price= $295,000
Installation= $3,900
Concrete for installation= $15,900
The total cost of the machine includes the purchase price and all costs required to put it into operation. Taxes are part of the purchase cost.
First, we need to calculate the net cash discount:
Net discount= 295,000 * 0.03= $8,850
Now, the total purchase price:
Total purchase price= (295,000 - 8,850) + 17,700 + 3,900 + 15,900
Total purchase price= $323,650
andy Bank, Inc., makes one model of wooden canoe. and, the information for it follows: Number of canoes produced and sold 450 650 800 Total costs Variable costs $ 63,000 $ 91,000 $ 112,000 Fixed costs $ 187,200 $ 187,200 $ 187,200 Total costs $ 250,200 $ 278,200 $ 299,200 Cost per unit Variable cost per unit $ 140.00 $ 140.00 $ 140.00 Fixed cost per unit 416.00 288.00 234.00 Total cost per unit $ 556.00 $ 428.00 $ 374.00 Sandy Bank sells its canoes for $375 each. Required: 1. Suppose that Sandy Bank raises its selling price to $500 per canoe. Calculate its new break-even point in units and in sales dollars. 2. If Sandy Bank sells 700 canoes, compute its margin of safety in dollars and as a percentage of sales. (Use the new sales price of $500.) 3. Calculate the number of canoes that Sandy Bank must sell at $500 each to generate $110,000 profit.
Answer:
Results are below.
Explanation:
To calculate the break-even point in units and dollars, we need to use the following formulas:
Break-even point in units= fixed costs/ contribution margin per unit
Break-even point in units= 187,200 / (500 - 140)
Break-even point in units= 520
Break-even point (dollars)= fixed costs/ contribution margin ratio
Break-even point (dollars)= 187,200 / (360 / 500)
Break-even point (dollars)= 187,200 / 0.72
Break-even point (dollars)= $260,000
Now, to calculate the margin of safety for 700 units, we need to use the following formulas:
Margin of safety= (current sales level - break-even point)
Margin of safety= (700*500) - 260,000
Margin of safety= $90,000
Margin of safety ratio= (current sales level - break-even point)/current sales level
Margin of safety ratio= 90,000 / 350,000
Margin of safety ratio= 0.2571
Finally, the desired profit is $110,000:
Break-even point in units= (fixed costs + desired profit) / contribution margin per unit
Break-even point in units= (187,200 + 110,000) / 360
Break-even point in units= 826
Waupaca Company establishes a $420 petty cash fund on September 9. On September 30, the fund shows $166 in cash along with receipts for the following expenditures: transportation-in, $53; postage expenses, $70; and miscellaneous expenses, $123. The petty cashier could not account for a $8 shortage in the fund. The company uses the perpetual system in accounting for merchandise inventory.
Prepare:
1) the September 9 entry to establish the fund.
2) the September 30 entry to reimburse the fund.
3) an October 1 entry to increase the fund to $450.
Answer:
Date Account Debit Credit
Sep 9 Petty cash $420
Cash $420
Sep 30 Merchandise inventory $53
Postage expense $70
Miscellaneous expense $123
Cash shortage $8
Cash $254
Oct 1 Petty cash $30
Cash [450-420] $30
Who is more likely to object to a proposed 1 percentage point increase in the city sales tax—the owner of a local liquor store or the owner of a local video rental store? Why?
Answer:
The owner of a local liquor store.
Explanation:
Rentals are not taxed in some places.
g An investment bank agrees to underwrite an issue of 5 million shares of stock for Longard Corp. (1). If the investment bank underwrites the stock on a firm commitment basis, it agrees to pay $15 per share to Longard Corp. for the 5 million shares of stock. It can then sell those shares to the public for $20 per share. How much money does Longard Corp. receive
Answer:
Longard Corp.
The money that Longard Corp. receives is:
= $75 million.
Explanation:
a) Data and Calculations:
Number of shares issued = 5 million
Investment bank underwriter pays per share to Longard Corp = $15
Stock price to the public = $20 per share
Total amount received from the underwriter = $75 million ($15 * 5 million)
b) The calculations show that the investment bank will eventually receive $100 million ($20 * 5 million) from the public offer. It then charges $5 per share (representing a total underwriting fee of $25 million). This is why it remits only $75 million to Longard Corp.
The following data are given for Stringer Company: Budgeted production 967 units Actual production 1,071 units Materials: Standard price per ounce $1.77 Standard ounces per completed unit 12 Actual ounces purchased and used in production 13,238 Actual price paid for materials $27,138 Labor: Standard hourly labor rate $14.29 per hour Standard hours allowed per completed unit 4.7 Actual labor hours worked 5,515.65 Actual total labor costs $84,114 Overhead: Actual and budgeted fixed overhead $1,091,000 Standard variable overhead rate $27.00 per standard labor hour Actual variable overhead costs $154,438 Overhead is applied on standard labor hours. Do not round interim calculations. Round your final answer to the nearest dollar. The direct materials price variance is
Answer:
Direct material price variance= $3,706.64 unfavorable
Explanation:
Giving the following information:
Standard price per ounce $1.77
Actual ounces purchased and used in production 13,238
Actual price paid for materials $27,138
To calculate the direct material price variance, we need to use the following formula:
Direct material price variance= (standard price - actual price)*actual quantity
Actual price= 27,138 / 13,238= $2.05
Direct material price variance= (1.77 - 2.05)*13,238
Direct material price variance= $3,706.64 unfavorable
On January 1, $300,000 of par value bonds with a carrying value of $310,000 is converted to 50,000 shares of $5 par value common stock. The entry to record the conversion of the bonds includes all of the following entries except: Group of answer choices Credit to Common Stock $250,000. Debit to Bonds Payable $300,000. Debit to Bonds Payable $310,000. Credit to Paid-In Capital in Excess of Par Value, Common Stock $60,000. Debit to Premium on Bonds Payable $10,000.
Answer:
Debit bonds payable $310000
Explanation:
Based on the information given The entry to record the conversion of the bonds will includes all of the following entries except Debit bonds payable $310000 reason been that we were told that On January 1, the par value bonds of $300,000 has with a carrying value of the amount of $310,000 which was converted to 50,000 shares of $5 par value common stock, which means that we are supposed to debit the amount, credit it to Equity/common stock.
Suppose Carlos and Deborah are playing a game in which both must simultaneously choose the action Left or Right. The payoff matrix that follows shows the payoff each person will earn as a function of both of their choices. For example, the lower-right cell shows that if Carlos chooses Right and Deborah chooses Right, Carlos will receive a payoff of 7 and Deborah will receive a payoff of 4.
Carlos
Left Right
Deborah Left 6, 6 6, 3
Right 4, 3 5, 5
The only dominant strategy in this game is for _____ to choose _____.
The outcome reflecting the unique Nash equilibrium in this game is as follows:
Deborah chooses _____ and Carlos chooses _____.
A document certifying ownership of part of a corporation is a
O A. charter.
O B. stock certificate.
O C. dividend check.
O D. bond.
Answer:
b
Explanation:
A document certifying ownership of part of a corporation is a. stock certificate. In a retail business, the stock held in reserve is called. inventory.
Naylor Company had $153,300 of net income in 2016 when the selling price per unit was $150, the variable costs per unit were $90, and the fixed costs were $575,800. Management expects per unit data and total fixed costs to remain the same in 2017. The president of Naylor Company is under pressure from stockholders to increase net income by $65,200 in 2017.
1. Compute the number of units sold in 2016. (Round answer to 0 decimal places, e.g. 1,225.)
2. Compute the number of units that would have to be sold in 2017 to reach the stockholders' desired profit level.
3. Assume that Naylor Company sells the same number of units in 2017 as it did in 2016. What would the selling price have to be in order to reach the stockholders? (Round answer to 2 decimal places, e.g. 12.25.)
Answer:
Naylor Company
1. The number of units sold in 2016 is:
= 12,152.
2. The number of units that would have to be sold in 2017 to reach the stockholders' desired profit level is:
= 13,238.
3. Assuming that Naylor Company sells the same number of units in 2017 as it did in 2016, the selling price have to increase to $155.37 in order to reach the stockholders' desired profit level.
Explanation:
a) Data and Calculations:
Net income in 2016 = $153,300
Selling price per unit = $150
Variable costs per unit = $90
Contribution margin per unit = $60
Fixed costs = $575,800
Contribution margin = Fixed costs + Net income
= $575,800 + $153,300
= $729,100
Units sold = $729,100/$60 = 12,152
b) To increase net income by $65,200 in 2017, contribution margin will also increase by the same amount. Therefore, the total contribution margin = $794,300 ($729,100 + $65,200).
Units sold = $794,300/$60 = 13,238
c) The selling price will have to increase by $5.37 ($65,200/12,152) to $155.37.
How is paid wages and outstanding wages treated in accounting equation.
Answer:
Paid wages will reduce the net income as an expense. Net income becomes Retained earnings which are added to Equity. Paid wages will therefore reduce the Equity in the accounting equation.
Outstanding wages however, will be transferred to a liability account to show that the company owes those wages. This will therefore increase the liabilities in the accounting equation.