Answer:
$108,500
Explanation:
The preparation of the operating activities section is presented below
Cash flow from operating activities
Net income $62,000
Add: depreciation expense $77,000
Add: Increase in account payable $10,000
Add: Increase in income tax payable $16,500
Less: Increase in prepaid rent -$57,000
Cash flow from operating activities $108,500
The negative amount shows cash outflow and the positive amount shows the cash inflow
When the United States imports more than it exports, then the balance of payments would record a negative entry in the financial account. record a negative entry in the current account. record a positive entry in the financial account. record a positive entry in the current account. remain the same.
Answer:
The answer is B a negative entry in the current account.
Explanation:
Balance of payments accounts of a country is the recording economic transactions (the payments and receipts) of the residents of the country with residents of other countries during a period of time.
Balance of Payments is in deficit or negative if imports are more than the exports and it is in surplus or positive if exports are more than imports during a period of time.
We have three categories of Balance of Payments:.
1. The current account which records the inflow and outflow of goods and services.
2. The Financial account which records
monetary flow like investment in real estates, fixed income(bonds), stocks etc.
3. The capital account which records the investments in fixed assets like land.
A corporate bond has 22 years to maturity, a face value of $1,000, a coupon rate of 4.6% and pays interest semiannually. The annual market interest rate for similar bonds is 3.3%.
Required:
a. What is the price of the bond Intro A bond has an annual coupon rate of 3.4%, a face value of $1,000, a price of $883.61, and matures in 10 years.
b. What is the bond's YTM?
c. What is the current yield?
Answer:
a. The answer is: $1,008.40
b. The bond's YTM is 3.343%
c. The current yield is 3.826%
Explanation:
a. Bond price formula: ∑(C* / (1+YTM)[tex]n[/tex] )
The price of the bond Intro A with i=1,2...10 is:
∑($1,000 x 3.4% / (1 + 3.3%)[tex]i[/tex] ) = $1,008.40
b. The price of the corporate bond which has 22 years to maturity is: $1,202.20
Given that the bond is trading at par value, the bond's YTM is:
[Annual Interest Payment + ((Face Value – Current Price) / (Years to Maturity))] / ( ( Face Value + Current Price ) / 2 )
= [$1,000 x 4.6% + (($1,000 - $1,202.20) / 22)] / (($1,000 + $1,202.20) /2)
= 3.343%
c. The bond's current yield is:
Annual Interest Payment / Current Price = $46 / $1,202.2 = 3.826%
Problem 7-4A Accounts receivable transactions and bad debts adjustments LO C1, P2, P3Liang Company began operations in Year 1. During its first two years, the company completed a number of transactions involving sales on credit, accounts receivable collections, and bad debts. These transactions are summarized as follows.Year 1Sold $1,351,000 of merchandise (that had cost $976,900) on credit, terms n/30.Wrote off $20,300 of uncollectible accounts receivable.Received $671,700 cash in payment of accounts receivable.In adjusting the accounts on December 31, the company estimated that 1.40% of accounts receivable would be uncollectible.Year 2Sold $1,525,600 of merchandise (that had cost $1,329,200) on credit, terms n/30.Wrote off $31,700 of uncollectible accounts receivable.Received $1,354,800 cash in payment of accounts receivable.In adjusting the accounts on December 31, the company estimated that 1.40% of accounts receivable would be uncollectible.Required:Prepare journal entries to record Liang’s Year 1 and Year 2 summarized transactions and its year-end adjustments to record bad debts expense. (The company uses the perpetual inventory system and it applies the allowance method for its accounts receivable.) (Round your intermediate calculations to the nearest dollar.)
Answer:
Liang CompanyGeneral Journal:
Year 1
Debit Accounts Receivable $1,351,000
Credit Sales Revenue $1,351,000
To record sales on credit, terms n/30.
Debit Uncollectible Accounts Expenses $20,300
Credit Accounts Receivable $20,300
To write off uncollectibles.
Debit Cash Account $671,700
Credit Accounts Receivable $671,700
To record the receipt of cash on account.
Year 2:
Debit Accounts Receivable $1,525,600
Credit Sales Revenue $1,525,600
To record the sales of goods on credit, terms n/30.
Debit Uncollectible Expenses $31,700
Credit Accounts Receivable $31,700
To write off uncollectibles.
Debit Cash Account $1,354,800
Credit Accounts Receivable $1,354,800
To record the receipt of cash on account.
Adjusting Journal:
Year 1
Dec. 31
Debit Uncollectible Expenses $3,988.60
Credit Allowance for Uncollectible Accounts $3,988.60
To record the 1.4% estimated allowance for collectibles.
Year 2:
Dec. 31
Debit Allowance for Uncollectible Accounts $802.20
Credit Uncollectible Expense $802.20
To bring the balance of Allowance for Uncollectible Accounts to 1.4% accounts receivables
Explanation:
Dec. 31, Year 1:
i) Accounts Receivable Balance:
Sales = $976,900
Uncollectible $20,300
Cash receipts $671,700
Balance = $284,900
ii) Allowance for Uncollectible Accounts = $3,988.60 ($284,900 x 1.4%)
Year 2:
Dec. 31, Year 2:
i) Accounts Receivable Balance:
Beginning balance = $284,900
Sales = $1,329,200
Uncollectible $31,700
Cash receipts $1,354,800
Balance = $227,600
ii) Allowance for Uncollectible Accounts:
Beginning balance = $3,988.60
Reduction Difference = $802.20 ($3,186.40 - $3,988.60)
Year 2 Allowance = $3,186.40 (($227,600 x 1.4%)
Kitchens Sales Inc. is approached by Mr. Louis Cifer, a new customer, to fulfill a large one-time-only special order for a product similar to one offered to regular customers. The following per unit data apply for sales to regular customers: Direct materials $554 Direct labor 364 Variable manufacturing support 56 Fixed manufacturing support 120 Total manufacturing costs 1,094 Markup (50%) 547 Targeted selling price $1,641 Kitchens Sales inc. has excess capacity. Mr. Cifer wants the cabinets in cherry rather than oak, so direct material costs will increase by $66 per unit. The average marketing cost of Kitchens Sales product is $173 per order. Other than price, what other items should Kitchens Sales consider before accepting this one-time-only special order
Answer:
1. Is it an order outside normal market.
2.other orders at the going price.
Explanation:
Decision making in managerial accounting should focus on both the quantitative (dollars) and qualitative (other factors) effects of a decision.
Kitchens Sales Inc. should also consider if it is an order outside the normal market for cherry cabinets.Reducing prices in Normal Market in an attempt to unload spare capacity may lead to a fall in market price.
Also they should consider if accepting the special order may prevent company from accepting other orders that may be obtained during the period at the going price.
The following information should be considered:
Costs not considered to calculate the minimum acceptable price of a one-time-only special order are fixed manufacturing support of $120 per unit and marketing cost of $173 per order. The reason behind this is that there is excess capacity available to Kitchens Sales Inc.Hence, fixed mfg. support cost would continue to incur even if the special order from Louis Cifer is not accepted by Kitchens Sales Inc.Similarly, since the order from Cifer is a one time special order,Therefore, there is no need to incur any marketing cost separately.Both these above costs are not relevant while arriving at the decision of computing minimum price of this order.Learn more: brainly.com/question/17429689
A company struggling to finish the required accounting work for Its year -end. The employees are unwilling to stay late to complet the work . If the company does not complete work , It will be in serious trouble . So , the managers decide to pay the staff a bonus for every hour they stay during this period . After the employees worked extra hours for a few days , the work was completed and everyone was happy What was the Incentive for the employees this scenario ?
Answer: The hourly bonus is the incentive
Explanation:
Answer:
B. Money
Hope this helps!
Explanation:
Turk Manufacturing is considering purchasing two machines. Each machine costs $9,000 and will produce cash flows as follows:_________.End of Machine A Machine BYear1 $5,000 $1,0002 $4,000 $2,0003 $2,000 $11,000Turk Manufacturing uses the net present value method to make the decision, and it requires a 15% annual return on its investments. The present value factors of 1 at 15% are: 1 year, 0.8696; 2 years, 0.7561; 3 years, 0.6575. Which machine should Turk purchase and why? Hint: This is a two-part question. Part 1. Make sure you calculate the NPV for both machines and Part 2. Which machine should the company invest in and why? .Check: The NPV for one of the two machines will be a negative number. (3 points)Respond to both parts of this problem on the next page.Part 1. Use the tables below to calculate the Net Present Value for each machine.Machine A Net Cash Flows PV Factor PV of Net Cash FlowsYear 1Year 2Year 3Total -------------------------Less: Initial Investment -------------------------Net Present Value ===============Machine B Net Cash Flows PV Factor PV of Net Cash FlowsYear 1Year 2Year 3Total -------------------------Less: Initial Investment -------------------------
Net Present Value ===============
Part 2. Which machine should the company invest in and why?
Answer:
The second machine should be chosen because the NPV is higher and it has a positive NPV
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
For machine A
Cash flow in year 0 = $-9,000
Cash flow in year 1 = $5,000
Cash flow in year 2 = $4,000
Cash flow in year 3 = $2,000
I = 15%
NPV = $-312.57
For machine b
Cash flow in year 0 = $-9,000
Cash flow in year 1 = $1,000
Cash flow in year 2 = $2,000
Cash flow in year 3 = $11,000
I = 15%
NPV = $614.531
The second machine should be chosen because the NPV is higher.
To find the NPV using a financial calacutor:
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
I hope my answer helps you
You are a certified fraud examiner, and a local community group, the Silver Years Senior Squad, has requested that you give a presentation about consumer fraud. They want to hear about examples of recent scams that have happened to people and how they can avoid being scammed. Use the Internet to research current scams, and determine the main points you would cover in your presentation. A good place to start would be:__________
Answer: Snopes Website
Explanation:
The Snopes website is what some would call a godsent in this day and age of fraudulent and fake news articles, promotions and claims circulating the internet.
They investigate claims and engage in extensive fact-checking with the results then corroborated by verified sources which are also listed in case independent researchers want to look into things for themselves.
Snopes would be a great place for you to start on the internet to look for recent scams.
Jeremiah Restoration Company completed the following selected transactions during January: Jan. 1. Established a petty cash fund of $900. 12. The cash sales for the day, according to the cash register records, totaled $6,148. The actual cash received from cash sales was $6,180. 31. Petty cash on hand was $75. Replenished the petty cash fund for the following disbursements, each evidenced by a petty cash receipt: Jan. 3. Store supplies, $470. 7. Express charges on merchandise sold, $55 (Delivery Expense). 9. Office supplies, $30. 13. Office supplies, $11. 19. Postage stamps, $55 (Office Supplies). 21. Repair to office file cabinet lock, $60 (Miscellaneous Administrative Expense). 22. Postage due on special delivery letter, $30 (Miscellaneous Administrative Expense). 24. Express charges on merchandise sold, $85 (Delivery Expense). 30. Office supplies, $14. Jan. 31. The cash sales for the day, according to the cash register records, totaled $4,550. The actual cash received from cash sales was $4,536. 31. Decreased the petty cash fund by $200. Journalize the transactions. Refer to the Chart of Accounts for exact wording of account titles.
Answer:
Jeremiah Restoration Company
Journal Entries:
Jan. 1:
Debit Petty Cash Fund $900
Credit Cash Account $900
To record the establishment of a petty cash fund.
Jan. 12:
Debit Cash Account $6,180
Credit Sales $6,148
Credit Suspense $32
To record cash sales and excess cash received.
Jan. 31:
Debit Petty Cash Fund $825
Credit Cash Account $825
To record the replenishment of the petty cash fund.
Jan. 3:
Debit Store Supplies $470
Credit Petty Cash Fund $470
To record payment for store supplies.
Jan. 7:
Debit Delivery Expenses $55
Credit Petty Cash Fund $55
To record payment for merchandise delivery.
Jan. 9:
Debit Office Supplies $30
Credit Petty Cash Fund $30
To record payment for office supplies.
Jan. 13:
Debit Office Supplies $11
Credit Petty Cash Fund $11
To record payment for office supplies.
Jan. 19:
Debit Office Supplies $55
Credit Petty Cash Fund $55
To record payment for postage stamps.
Jan. 21:
Debit Miscellaneous Administrative Expense $60
Credit Petty Cash Fund $60
To record the payment for repair of office file cabinet lock.
Jan. 22:
Debit Miscellaneous Administrative Expense $30
Credit Petty Cash Fund $30
To record payment for postage due on special delivery letter.
Jan. 24:
Debit Delivery Expense $85
Credit Petty Cash Fund $85
To record payment for express charges on merchandise sold.
Jan. 30:
Debit Office Supplies $14
Credit Petty Cash Fund $85
To record payment for office supplies.
Jan. 31:
Debit Cash Account $4,536
Debit Suspense Account $14
Credit Sales $4,550
To record collections from cash sales.
Debit Cash Account $200
Credit Petty Cash Fund $200
To decrease the petty cash fund.
Explanation:
Journal entries are generally the first recording of business transactions. They are used to debit and credit the affected accounts for each transaction.
Based on the information given the appropriate journal entries to record the transactions are:
Jeremiah Restoration Company journal entries
Jan 1
Debit Petty Cash Fund $900
Credit Cash $900
Jan 12
Debit Cash $6,180
Credit Cash short and over $32
($6,180-$6,148)
Credit Sales $6,148
Jan 31
Debit Store Supplies $470
Debit Delivery Expenses $140
($55+$85)
Debit Office Supplies $110
($30+$11+$14+$55)
Debit Miscellaneous Administrative expense $90
($60+$30)
Debit Cash short and over $15
[($470+$140+$110+$90)-$825]
Credit Cash $825
($900-$75)
Jan 31
Debit Cash $4,536
Credit Cash short and over $14
($4,550-$4,536)
Credit Sales $4,550
Jan 31
Debit Cash $200
Credit Petty cash $200
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You are the marketing manager for a U.S. manufacturer of disposable diapers. Your firm is considering entering the Brazilian market. Your CEO believes the advertising message used in the U.S. will suffice in Brazil. Outline some possible objections to this strategy. g
Answer: If the CEO decides to go with same advertising message which was effective for the USA in Brazil, this my be a wrong decision. The products technical standards may be similar for both countries but the way people would react to same advertisement would differ for both countries.
Explanation:
This would lead to the advertising messages changing so as to achieve the desired results, factors that would affect this decision are
1. The message
2. Pricing
The message been passed from the advertisement has to be in such a way that it shows the Brazilian culture which differs from America.
Pricing of the product would also play an important role as there would already be existing competitors for diapers in Brazil. Your price should match or compete with the prices been offered by your competitors.
Answer: If the CEO decides to go with same advertising message which was effective for the USA in Brazil, this my be a wrong decision. The products technical standards may be similar for both countries but the way people would react to same advertisement would differ for both countries.
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.
Last year, Alfred's Automotive had a price-earnings ratio of 15 and earnings per share of $1.20. This year, the price earnings ratio is 18 and the earnings per share is $1.20. Based on this information, it can be stated with certainty that:
Answer:
Investors’ outlook for the firm has improved.
Explanation:
Computation of Market price.
MPS = PE ratio × EPS
⇒ MPS (Previous) = $1.20 × 15
⇒ MPS (Previous) = $18
⇒ MPS (Current) = $1.20 × 18
⇒ MPS (Current) = $21.60
So, we say that the market price has increased.
Investors’ outlook for the firm has improved.
Categories of expenditures
Bob and Cho Iverson live in Swarthmore, PA. Their son, Eric, owns his own plumbing business.
For each of the following transactions that occur in their lives, identify whether it is included in the calculation of U.S. GDP as part of consumption (C), investment (I), government purchases (G), exports (X), or imports (M). Check all that apply.
Transaction
1. Bob buys a sweater made in Guatemala.
2. The state of Pennsylvania repaves highway PA 320, which goes through the center of Swarthmore.
3. Cho gets a new video camera made in the United States.
4. Eric buys a new set of tools to use in his plumbing business.
5. Bob's employer assigns him to provide consulting services to an Australian firm that's opening a manufacturing facility in China.
Answer:
1. Bob buys a sweater made in Guatemala. - it is an import (M), not included in GPD.
Imports are substracted from exports to reach net exports, which are part of GDP. This is an import because Bob lives in the U.S. and the sweater was made in Guatemala.
2. The state of Pennsylvania repaves highway PA 320, which goes through the center of Swarthmore. - Government purchases (G), included in GDP.
It is a government purchase because it is the state authority who is investing the resources in repaving the highway.
3. Cho gets a new video camera made in the United States. - it is consumption (C), included in GDP.
Cho lives in the U.S. and buys a camera made in the U.S., this is private consumption.
4. Eric buys a new set of tools to use in his plumbing business. - it is investment (I), included in GDP.
Investment are the purchases of goods, by private individuals or firms, with the goal of obtaining future economic benefits from their use. In other words, Investment is the purchase of assets. Eric is buying an asset for his business: a set of tools.
5. Bob's employer assigns him to provide consulting services to an Australian firm that's opening a manufacturing facility in China. - it is an export (X), included in GDP.
Exports are goods and services, produced domestically, but sold abroad. Bob is providing a service to a foreign company, and as an person living in the U.S., the value of that service is an export, and included in the GDP calculation.
MV Corporation has debt with market value of $ 101 million, common equity with a book value of $ 100 million, and preferred stock worth $ 20 million outstanding. Its common equity trades at $ 51 per share, and the firm has 5.7 million shares outstanding. What weights should MV Corporation use in its WACC?
Answer:
Weight of debt = 0.2453 or 24.53%
Weight of preferred stock = 0.0486 or 4.86%
Weight of common equity = 0.7061 or 70.61%
Explanation:
The WACC or weighted average cost of capital is the cost of a firm's capital structure. The capital structure of a company can consist of one or more of the following components namely debt, preferred stock and common stock.
To calculate the WACC, we use the market value of each component.
The market value of debt is$101 million.The market value of common equity is 290.7 millionThe value of preferred stock is $20 millionMarket value of common equity = 51 * 5.7 = 290.7 million
The weights to assigned to each components are,
Total weight of all components = 101 + 20 + 290.7 = 411.7 million
Weight of debt = 101 / 411.7 => 0.2453 or 24.53%
Weight of preferred stock = 20 / 411.7 => 0.0486 or 4.86%
Weight of common equity = 290.7 / 411.7 => 0.7061 or 70.61%
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
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%
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
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
Gomez Company uses a sales journal, purchases journal, cash receipts journal, cash payments journal, and general journal. Journalize the following transactions that should be recorded in the purchases journal.
July 1 Purchased $20,500 of merchandise on credit from Hector Co., terms n/15.
4 Sold merchandise costing $920 to C. Paul for $1,030 cash.
8 Purchased $660 of office supplies from Zhang Co. on credit, terms n/30.
15 Paid Hector $20,500 cash for the merchandise purchased on July 1.
21 Purchased $1,065 of store supplies on credit from Staples, terms n/30.
22 Sold merchandise costing $2,600 to MicroTran for $3,100 on credit, terms n/30.
23 Purchased office supplies from Depot for $365 cash.
25 Purchased $5,400 of merchandise on credit from Alfredo Co., terms n/30.
27 Paid employee salaries of $2,250 in cash.
Answer:
I prepared an excel spreadsheet because there is not enough room here
On a purchase journal you only record entries regarding purchases, you do not record any payments or other expenses.
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
Consider the all-units quantity discount schedule below. Quantity Ordered Price Per Unit EOQ at that Price 1-499 $300 952 500-999 $280 986 1000-1499 $260 1023 1500-1999 $230 1087 2000 and over $200 1166 Which of the following sets of order quantities is guaranteed to contain the optimal solution (i.e., best order quantity)?A. {986, 1023, 1500 B. 1023, 1500, 2000} C. (986, 1000, 1500, 2000) D. {1, 500, 1000, 1500, 2000} E. [952, 986, 1023,1087, 1166]
Answer: B. 1023, 1500, 2000}
Explanation:
The Optimal solution should contain the set of quantities that would require the lowest no. of orders to achieve a discount in a class.
1,023 is quite close to the lowest amount required of 1,000 in the 1,000 to 1,499 range.
So are 1,500 and 2,000.
Option D can also work but it has too many order quantities and will inflate the price.
The Optimal Solution therefore has to be from this option.
Spencer Furness purchased kitchen appliances for $2,419. He makes a down payment of $520 and agrees to 17 monthly payments of $115.36 per month. Find the total finance charge. Question 26 options: $30.59 $62.12 $60.49 $20.9
Answer:
$62.12
Explanation:
The total amount that Furness pays is ...
$520 + 17 × $115.36 = $2481.12
This exceeds the nominal cost of the appliances by ...
$2481.12 -2419 = $62.12
The total finance charge is $62.12.
Alabama and Mississippi each have 9 units of labor. They can use their units of labor for the production of chickens and cotton. Alabama can produce 3 units of chicken for each unit of labor, and 7 units of cotton for each unit of labor. Mississippi can produce 4 units of chicken for each unit of labor, and 6 units of cotton for each unit of labor. Given this information, complete the following problems.Round answers to decimal places where applicable. has the absolute advantage for producing chickens. has the absolute advantage for producing cotton. Alabama's opportunity cost for producing a unit of chicken is units of cotton Alabama's opportunity cost for producing a unit of cotton is units of chicken Mississippi's opportunity costs for producing a unit of chicken is units of cotton Mississippi's opportunity cost for producing a unit of cotton is units of chicken. has the comparative advantage for producing chicken. has the comparative advantage for producing cotton should produce chicken and should produce cotton
Answer and Explanation:
As it is given that
1. For each unit of labor, Alabama will generate 3 units of chicken.
Thus Alabama can produce a maximum of 27 units of chicken with 9 units of labor.
2. With every unit of labor, Alabama will generate 7 units of cotton.
Thus Alabama can produce a maximum of 63 units of cotton with 9 units of labor.
For each unit of labor, Mississippi will generate 4 units of chicken.
Therefore Mississippi can produce a maximum of 36 units of chicken with 9 units of labor.
For each unit of labor, Mississippi will produce 6 units of cotton.
While Mississippi can produce up to 54 units of cotton with 9 units of labor.
Alabama could be seen producing more cotton than Mississippi using all the labor while using all the labor Mississippi can produce more chicken than Alabama.
Hence,
For producing chicken, Mississippi has the absolute advantage
For producing cotton, Alabama has the absolute advantage
Now
Albama's opportunity cost for generating a chicken unit is
= (7 ÷ 3)
= 2.33 units of cotton.
Albama's opportunity cost for generating a cotton unit is
= (3 ÷ 7)
= 0.43 units of chicken.
Mississippi's opportunity cost for generating a chicken unit is
= (6 ÷ 4)
= 1.50 units of cotton.
Mississippi's opportunity cost of generating a cotton unit is
= (4 ÷ 6)
= 0.67 units of chicken
Therefore
Alabama can produce cotton relatively to Mississippi at a lower cost of opportunity.
In comparison with Alabama, Mississippi can produce chicken at lower opportunity costs.
Hence, we can conclude that
Mississippi has a competitive advantage for chicken production.
Alabama has a competitive advantage in cotton production.
Mississippi is supposed to grow chicken and Alabama is supposed to make cotton.
Barkley Company has a piece of equipment that it has been depreciating for 3 years. The equipment originally was estimated to have a useful life of 8 years and at the beginning of the current year, Barkley determines that the equipment's life has been extended to 10 years. When Barkley calculates depreciation for the current year, how many years of life should be used to calculate the depreciation expense
Answer:
Barkley Company
Change of Useful Life of Equipment:
Depreciation calculation should now be based on 7 years (10 - 3).
Explanation:
The useful life of an asset is an accounting estimate of the number of years it is likely to remain in service for the purpose of generating cost-effective revenue for the entity.
As an estimate, it is based on judgement, and can be changed to reflect reality. When a change in the useful life is considered necessary, the new useful life is determined and the number of years the asset had been used is subtracted from the new estimated useful life to determine the remaining useful life of the asset. This remaining useful life is now used to calculate the depreciation expense.
Assuming the entity uses the straight-line method, the book value less salvage value, if any, is divided by the new useful life to determine the depreciation charge for each remaining year.
Cost Flow Methods The following three identical units of Item LO3V are purchased during April: Item Beta Units Cost April 2 Purchase 1 $314 April 15 Purchase 1 317 April 20 Purchase 1 320 Total 3 $951 Average cost per unit $317 ($951 ÷ 3 units) Assume that one unit is sold on April 27 for $403. Determine the gross profit for April and ending inventory on April 30 using the (a) first-in, first-out (FIFO); (b) last-in, first-out (LIFO); and (c) weighted average cost method. Gross Profit Ending Inventory a. First-in, first-out (FIFO) $ $ b. Last-in, first-out (LIFO) $ $ c. Weighted average cost $ $
Answer:
a. Gross Profit =$89, Ending Inventory = $640
b. Gross Profit =$83, Ending Inventory = $631
c. Gross Profit =$86, Ending Inventory = $634
Explanation:
FIFO
a.Gross Profit
Sales ( 1 unit × $403) $403
Less Cost of Sales ( 1 unit × $314) ($314)
Gross Profit $89
b. Ending Inventory
Ending Inventory = Units Left × Earliest Price
= 2 units × $320
= $640
LIFO
a.Gross Profit
Sales ( 1 unit × $403) $403
Less Cost of Sales ( 1 unit × $320) ($320)
Gross Profit $83
b. Ending Inventory
Ending Inventory : 1 unit × $314 = $314
1 unit × $317 = $317
Total = $631
Weighted Average Cost method
a.Gross Profit
Sales ( 1 unit × $403) $403
Less Cost of Sales ( 1 unit × $317) ($317)
Gross Profit $86
b. Ending Inventory
Ending Inventory = Units Left × Average Price
= 2 units × $317
= $634
Crane Company produces two models: Model 24 has sales of 300 units with a contribution margin of $40 each; Model 26 has sales of 150 units with a contribution margin of $50 each. If sales of Model 26 increase by 50 units, how much will profit change
Answer:
Effect on income= 50*50= $2,500 increase
Explanation:
Giving the following information:
Model 26 has sales of 150 units with a contribution margin of $50 each.
To calculate the effect on income, we need to use the following formula:
Effect on income= number of units*unitary contribution margin
Effect on income= 50*50= $2,500 increase
Pretzelmania, Inc., issues 7%, 10-year bonds with a face amount of $70,000 for $70,000 on January 1, 2021. The market interest rate for bonds of similar risk and maturity is 7%. Interest is paid semiannually on June 30 and December 31.
Required:
Record the bond issue and first interest payment on June 30, 2021.
Answer:
The bond issue and first interest payment on June 30, 2021 journal entries would be as follows:
January 1, 2021
Debit Credit
Cash $70,000
Bond payable $70,000
June 30, 2021
Debit Credit
Interest Expense $2,450
Cash $2,450
Explanation
The journal entry for the bond issue would be the following:
January 1, 2021
Debit Credit
Cash $70,000
Bond payable $70,000
In order to prepare the journal entry for first interest payment on June 30, 2021 we would have to calculate the interest expense as follows:
interest expense=face value of bonds*interest rate* (6 months/12 months)
interest expense=$70,000*7%* (6 months/12 months)
interest expense=$4,900*(6 months/12 months)
interest expense=$2,450
Therefore, the journal entry for first interest payment on June 30, 2021 would be as follows:
June 30, 2021
Debit Credit
Interest Expense $2,450
Cash $2,450
g If expected inflation equals zero, and currently actual inflation is equal to expected inflation, the short run Phillips Curve will most likely intersect the horizontal axis at:Group of answer choicesa zero (0) percent unemployment rate.a 3% unemployment rate.a 2% unemployment rate.the natural rate of unemployment.
Answer:
the natural rate of unemployment.
Explanation:
In simple words, If inflation expectations is equivalent to 0, and inflation rate is currently equal to expected inflation, the short run Phillips Curve will most likely intersect the horizontal axis at natural unemployment rate.
A point where the Phillips curve intersects the horizontal axis is the rate of unemployment consistent with stable price, known as the Non-accelerating unemployment rate (NAIRU), also known as the 'natural unemployment rate.'
The pre-tax cost of debt is 11%, preferred stock costs 14%, and equity costs 15%. What is the weighted average cost of capital assuming a tax rate of 40% and a target capital structure of 40% debt, 20% preferred stock, and 40% equity
Answer:
WACC is 11.4%
Explanation:
The weighted average cost of capital (WACC) is the average cost of all the various sources of long-term finance used by a business weighted according to the proportion which each source of finance bears to the the entire pool of fund.
To calculate the weighted average cost of capital, follow the steps below:
Step 1: Calculate cost of individual source of finance(this is already given)
Cost of Equity= 15%
After-tax cost of debt:
= (1- T) × before-tax cost of debt
= 11%× (1-0.4)= 6.6%
Cost of preferred stock costs= 14%
Step 2 : calculate the proportion or weight of the individual source of finance . (This already given)
Equity = 40%
Debt= 40%
Preferred stock : 20%
Step 3; Work out weighted average cost of capital (WACC)
WACC = ( 15%× 40%) + ( 6.6%× 40%) + (14%× 20%)= 11.4%
WACC is 11.4%
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
An economy is operating with output $400 billion above its natural level, and fiscal policymakers want to close this expansionary gap. The central bank agrees to adjust the money supply to hold the interest rate constant, so there is no crowding out. The marginal propensity to consume is 4/5, and the price level is completely fixed in the short run. To close the expansionary gap, the government would need to spending by $_________ billion.
Answer: reduced by $80 billion
Explanation:
An expansionary gap is when the actual output is more than the potential output. From the question, we are told that an economy is operating with output $400 billion above its natural level, and fiscal policymakers want to close this expansionary gap and that the central bank agrees to adjust the money supply to hold the interest rate constant, so there is no crowding out.
We are also given the marginal propensity to consume is 4/5, and told that the price level is completely fixed in the short run.
To close the expansionary gap, the government would need to reduce its spending. To solve this, we have to calculate the multiplier. This will be:
Multiplier = 1/(1 - MPC)
= 1/(1 - 4/5)
= 1/1-0.8
= 1/0.2
= 5
Therefore, the government expenditure or spending will be reduced by:
= $400 billion/5
=$80 billion