Answer:
Instructions are below.
Explanation:
Giving the following information:
Machine-hours required to support estimated production 155,000
Fixed manufacturing overhead cost $ 653,000
Variable manufacturing overhead cost per machine hour $ 4.70
First, we need to calculate the predetermined overhead rate.
Predetermined manufacturing overhead rate= total estimated overhead costs for the period/ total amount of allocation base
Predetermined manufacturing overhead rate= (653,000/155,000) + 4.7
Predetermined manufacturing overhead rate= $8.91 per machine hour
Job 400:
Direct materials $ 390
Direct labor cost $ 220
Machine-hours used 37
To allocate overhead, we need to use the following formula:
Allocated MOH= Estimated manufacturing overhead rate* Actual amount of allocation base
Allocated MOH= 8.91*37= $329.67
Now, we can calculate the total cost and unitary cost:
Total cost= 390 + 220 + 329.67= 939.67
Unitary cost= 939.67/60= $15.66
Finally, the selling price for Job 400:
Selling price0 939.67*1.2= $1,127.6
When the Fed acts as a "lender of last resort," like it did in the financial crisis of 2007-2008, it is performing its role of
Answer:
The answer is Banker's bank
Explanation:
The Fed is performing its role as a banker's bank. The Fed is the U.S or the central bank in most countries are referred to banker's bank. It acts a commercial bank for all banks in the country.
Commercial banks in all countries have an account with the central bank. Commercial banks also have access to very short-term loans when it is in the distress. Banker's bank(The Fed) has the sole authority for the money supply in the economy.
g "6. Financially, why would a company: (a) increase its dividend; (b) buy back some of its common stock shares; (c) pay down some of its debt; (d) increase its use of internal financing; (e) take the public firm private?"
Answer:
(a) increase its dividend;
dividends are increased for two reasons:
the company has excess cash and it doesn't have any possible investments on handthe board and upper management want to increase the stock price and higher dividends always result in higher stock prices, even if it is only in the short run.(b) buy back some of its common stock shares;
the company has excess cash and the board and upper management believe that the stock price is too low.(c) pay down some of its debt;
the company has excess cash and it considers that the cost of its debt is too high and it can get cheaper financing from other sources if needed.(d) increase its use of internal financing;
the board and upper management considers that the company needs to invest in new or existing projects and they consider that the financing costs are too high. Also, on the long run if things work well, the stock price should increase.(e) take the public firm private
the company has excess cash and the board and upper management believe that the stock price is too low. It is similar to (b) only on an extreme situation.The University Store, Inc. is the major bookseller for four nearby colleges. An income statement for the first quarter of the year is presented below: University Store, Inc. Income Statement For the Quarter Ended March 31 Sales $ 800,000 Cost of goods sold 560,000 Gross margin 240,000 Selling and administrative expenses Selling $ 100,000 Administrative 110,000 210,000 Net operating income $ 30,000 On average, a book sells for $40.00. Variable selling expenses are $3.00 per book; the remaining selling expenses are fixed. The variable administrative expenses are 5% of sales; the remainder of the administrative expenses are fixed. The net operating income computed using the contribution approach for the first quarter is:
Answer: $30,000
Explanation:
Sales are $800,000 and the average price is $40. Number of units sold is;
= 800,000/40
= 20,000 units
Sales $ 800,000
Less: Cost of Goods Sold ($560,000)
Gross Margin $240,000
Less : Variable Costing
Selling Expenses (20,000 units X $3.00) ($60,000)
Administrative Expenses (5% of $ 800,000) ($40,000)
Contribution Margin $140,000
Less: Fixed Cost
Selling Expenses ($100,000 - $60,000) ($40,000)
Administrative Expenses ($110,000 -$40,000) ($70,000)
Net Operating Income $30,000
Arctica manufactures snowmobiles and ATVs. These products are made in different departments, and each department has its own manager. Each responsibility performance report only includes those costs that the particular department manager can control: raw materials, wages, supplies used, and equipment depreciation.
Snowmobile ATV Combined SnowmobileATV Combined
(Budget) (Budget) (Budget) (Actual) (Actual) (Actual)
Raw materials $19,990 $28,000 $47,990 $19,920 $29,320 $49,240
Employee wages10,900 21,000 31,900 11,210 21,740 32,950
Dept. manager 4,800 5,700 10,500 4,900 4,900 9,800
salary
Supplies used 3,850 1,400 5,250 3,670 1,420 5,090
Depreciation- Equip.6,500 13,000 19,500 6,500 13,000 19,500
Utilities 410 590 1,000 380 550 930
Rent 6,200 6,800 13,000 5,800 6,800 12,600
Totals $52,650 $76,490 $129,148 $52,380 $77,730$130,110
Prepare a responsibility accounting report for the snowmobile department.
Answer:
ArcticaSnowmobile DepartmentResponsibility Accounting Report
Budget Actual Variance
Raw materials $19,990 $19,920 $70 Favorable
Employee wages 10,900 11,210 310 Unfavorable
Dept. manager 4,800 4,900 100 Unfavorable
Supplies used 3,850 3,670 180 Favorable
Depreciation- Equip. 6,500 6,500 0 0
Utilities 410 380 30 Favorable
Rent 6,200 5,800 400 Favorable
Totals $52,650 $52,380 $270 Favorable
Explanation:
a) Data
Snowmobile ATV Combined Snowmobile ATV Combined
(Budget) (Budget) (Budget) (Actual) (Actual) (Actual)
Raw materials $19,990 $28,000 $47,990 $19,920 $29,320 $49,240
Employee wages 10,900 21,000 31,900 11,210 21,740 32,950
Dept. manager 4,800 5,700 10,500 4,900 4,900 9,800
salary
Supplies used 3,850 1,400 5,250 3,670 1,420 5,090
Depreciation- Equip.6,500 13,000 19,500 6,500 13,000 19,500
Utilities 410 590 1,000 380 550 930
Rent 6,200 6,800 13,000 5,800 6,800 12,600
Totals $52,650 $76,490 $129,148 $52,380 $77,730 $130,110
b) The responsibility accounting report is a performance report that presents a comparison of the actual and budgeted amounts of controllable costs for a department and its manager, showing the variances, and indicating whether each cost element is favorable or unfavorable.
Corporation has the following data as of December 31, 2018:
Total Current Liabilities $38,420 Total Stockholders' Equity$ ?
Total Current Assets 62,100 Other Assets 36,800
Long-term Liabilities 179,530 Property, Plant, and Equipment, Net 264,350
Compute the debt to equity ratio at December 31, 2018. (Round your answer to two decimal places, X XX)
Total liabilities Total stockholders' equity Debt to equity ratio
Answer: 1.5
Explanation:
The debt to equity ratio will be calculated as total liabilities divided by the total equities.
The total liabilities is the sum of the total current liabilities and the long term liabilities. This will be:
= 38420 + 179,530
= $217950
Total equities will be the difference between the total assets and total liabilities. This will be:
Total asset = 264,350 + 36,800 + 62,100
= $363,250
Total equity = total asset - total liability
= $363,250 - $217,950
= $145,300
Debt to equity ratio = total liabilities/total equity
= 217950/145,300
= 1.5
The calculated cost of trade credit for a firm that buys on terms of 2/10, net 30, is lower (other things held constant) if the firm plans to pay in 40 days than in 30 days.
A. True
B. False
Answer:
A. True
Explanation:
The terms of 2/10, net 30 implies that the firm is entitled to receive a 2 percent discount if it makes payment within 10 days for the goods it bought on term but the seller expects to pay full amount of the amount due in 30 days if it fails to pay within 10 days.
However, since there will be no more discount after the discount period, the cost of trade credit will continue to fall longer the payment is extended. For this question this can be demonstrated using the formula for calculating the cost of trade discount as follows:
Cost of trade discount = {[1 + (discount rate / (1 - discount rate))]^(365/days after discount)} - 1 ................... (1)
We can now applying equation (1) as follows:
For payment in 40 days
Cost of trade credit (payment in 40 days)= {[1 + (0.02 / (1 - 0.02))]^(365/40)} - 1 = 0.202436246672765, or 20%
For payment in 30 days
Cost of trade credit (payment in 30 days) = {[1 + (0.02 / (1 - 0.02))]^(365/30)} - 1 = 0.278643315029666, or 28%
Conclusion
Since the 20% calculated cost of trade credit for payment in 40 days is lower than 28% calculated cost of trade credit for payment in 30 days, the correct option is A. True. That is, the calculated cost of trade credit for a firm that buys on terms of 2/10, net 30, is lower (other things held constant) if the firm plans to pay in 40 days than in 30 days.
Suppose you're in charge of establishing economic policy for this small island country. Which of the following policies would lead to greater productivity in the weaving industry? Check all that apply. Sharply increasing the interest rate on student loans to people pursuing advanced degrees in weaving Imposing restrictions on foreign ownership of domestic capital Encouraging saving by allowing workers to set aside a portion of their earnings in tax-free retirement accounts Imposing a tax on looms
Answer:
Encouraging saving by allowing workers to set aside a portion of their earnings in tax-free retirement
Imposing restrictions on foreign ownership of domestic capital
Explanation:
The fiscal year-end unadjusted trial balance for Nelson Company is found on the trial balance tab. Rent expense and salaries expense are equally divided between selling activities and the general and administrative activities. Nelson Company uses a perpetual inventory system. Descriptions of items that require adjusting entries on January 31, 2016, follow.
a. Store supplies still available at fiscal year-end amount to $1,750.
b. Expired insurance, an administrative expense, for the fiscal year is $1,400.
c. Depreciation expense on store equipment, a selling expense, is $1,525 for the fiscal year.
d. To estimate shrinkage, a physical count of ending merchandise inventory is taken. It shows $10,900 of inventory is still available at fiscal year-end.
Multiple Step IS- Begin by selecting "Adjusted" from the drop-down below. Then, use the adjusted trial balance to prepare a multiple-step income statement. Rent expense and salaries expense are equally divided between selling activities and the general and administrative activities. For operating expenses, you must enter both the account title and the dollar amount.
Answer:
Nelson company
Income Statement
For the Month Ended January 31, 2016
Sales $111,950
- Sales discounts $2,000- Sales returns and allowances $2,200Net sales $107,750
- Cost of goods sold $40,000
Gross profit $67,750
Operating expenses:
Selling expenses:
Salaries expense $17,500Rent expense $7,500Advertising expense $9,800Depreciation expense $1,525Store supplies expense $4,050 $40,375Administrative expenses:
Salaries expense $17,500Rent expense $7,500Insurance expense $1,400 $26,400Total operating expenses $66,775
Net income ($975)
Explanation:
a. Store supplies still available at fiscal year-end amount to $1,750.
Dr Supplies expense 4,050
Cr Supplies 4,050
b. Expired insurance, an administrative expense, for the fiscal year is $1,400.
Dr Insurance expense 1,400
Cr Prepaid insurance 1,400
c. Depreciation expense on store equipment, a selling expense, is $1,525 for the fiscal year.
Dr Depreciation expense 1,525
Cr Accumulated depreciation - store equipment 1,525
d. To estimate shrinkage, a physical count of ending merchandise inventory is taken. It shows $10,900 of inventory is still available at fiscal year-end.
Dr Cost of goods sold 1,600
Cr Merchandise inventory 1,600
Consolidated net income may include the parent's separate operating income plus the parent's share of the subsidiary's reported net income plus/ minus: ________
a. the unrealized profit on upstream intercompany sales of inventory made during the current year.
b. the profit realized this year from upstream intercompany sales of inventory made last year.
c. unrealized profit on downstream intercompany sales of inventory made during the current year.
d. the parent's share of profit realized this year from upstream intercompany sales of inventory made last year.
Answer:
b. the profit realized this year from upstream intercompany sales of inventory made last year
Explanation:
Consolidated net income can be defined as the amount of the net income of the parent company and it has well exclude any of the income from the subsidiaries that was recognized in its individual financial statements in addition with the net income of its subsidiaries that was determined after excluding unrealized gain in inventories as well as the income from the intra-group transactions which is why CONSOLIDATED NET INCOME is often reported on the consolidated income statement for periods after the acquisition has occured.
Therefore CONSOLIDATED NET INCOME may tend to include the parent's separate operating income in addition with the parent's share of the subsidiary's reported net income plus/ minus the profit that was realized this year from the upstream intercompany sales of the inventory that was made last year
Discuss the logic underlying the use of three-sigma limits on Shewhart control charts. How will the chart respond if narrower limits are chosen
Answer:
The Shewhart control charts are charts used to monitor processes and behaviours in businesses statistically to ensure they are under control. They have been known to produce superb results especially with the use of the 3-sigma limits. The use of narrower limits provides practicality in testing more scenarios, the investigation of more causes and detection of more false causes.
Explanation:
The use of the 3 sigma limits in the Shewhart control charts using narrow limits provides for better control of business enterprises by ensuring that more investigations and detection of false causes are conducted. Thes gives a much more specific range of results in practice compared to the wide range approach.
The use of three-sigma limits on Shewhart control charts is simply used as an economic guide to minimize economic loss.
It should be noted that three-sigma points are used as a rational and economic guide to minimum economic loss.
It typically sets a range for the process parameter at a control limit of 0.27%. The three-sigma control limits are used for checking data from a process. These are vital to monitor behaviors and processes in business.
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You own a portfolio of two stocks, A and B. Stock A is valued at $6,124 and has an expected return of 14.5 percent. Stock B has an expected return of 7.8 percent. What is the expected return (in percent) on the portfolio if the portfolio value is $10,375
Answer:
The expected return (in percent) on the portfolio is 11.8 percent.
Explanation:
The expected return on a portfolio refers to the addition of the products of weight in the portfolio and expected return of all the investment in the portfolio.
For this question, the expected return (in percent) on the portfolio can be calculated as follows:
Portfolio value = $10,375
Value of Stock A = $6,124
Value of stock B = Portfolio value - Value of stock A = $10,375 - $6,124 = $4,251
WA = Weight of stock A in the portfolio = Value of stock A / Portfolio value = $6,124 / $10,375 = 0.59, or 59%
WB = Weight of stock B in the portfolio = Value of stock B / Portfolio value = $4,251 / $10,375 = 0.41, or 41%
EA = Expected return of Stock A = 14.5%
EB = Expected return of Stock B = 7.8%
Therefore, we have:
Expected return on the portfolio = (WA * EA) + (WB * EB) = (59% * 14.5%) + (41% * 7.8%) = 11.8 percent
Therefore, the expected return (in percent) on the portfolio is 11.8 percent.
Stocks X and Y have the following data. Assuming the stock market is efficient and the stocks are in equilibrium, which of the following statements is CORRECT? X Y Price $25 $25 Expected dividend yield 5% 3% Required return 12% 10% a. Stock X pays a higher dividend per share than Stock Y. b. Stock Y pays a higher dividend per share than Stock X. c. Stock Y has a lower expected growth rate than Stock X. d. One year from now, Stock X should have the higher price. e. Stock Y has the higher expected capital gains yield.
Answer:
a. Stock X pays a higher dividend per share than Stock Y.
Explanation:
stock x, dividend = $1.25
$25 = $1.25 / (12% - g)
12% - g = $1.25 / $25
12% - g = 5%
g = 7%
stock y, dividend = $0.75
$25 = $0.75 / (10% - g)
10% - g = $0.75 / $25
10% - g = 3%
g = 7%
both growth rates are equal, what varies are the dividends that the stocks yield and the required rates of return
A stock has an expected return of 12.6 percent, the risk-free rate is 7 percent, and the market risk premium is 10 percent. What must the beta of this stock be
Answer:
0.56
Explanation:
In this question we used the Capital Asset Pricing Model formula i.e shown below:
As we know that
Expected rate of return = Risk free rate of return + Beta × market risk premium
12.6% = 7% + Beta × 10%
12.6% - 7% = Beta × 10%
5.6% = Beta × 10%
So, the beta is
= 5.6% ÷ 10%
= 0.56
Hence, the beta of the stock is 0.56
To develop the sales budget, companies must estimate both unit sales and the production cost per unit. true or false
Answer:
False
Explanation:
The sales budget is a budget that indicates the amount of goods or services that the company expects to sell in a specific period of time. In order to make the sales budget, you have estimate the amount of units you plan to sell and multiply this for the selling price per unit to get the total sells. According to this, the statement that says that to develop the sales budget, companies must estimate both unit sales and the production cost per unit is false because to develop the sales budget, companies must estimate unit sales and selling price per unit.
Using the information below for Singing Dolls, Inc., determine the total manufacturing costs incurred during the year:Work in Process, January 1 $53,000Work in Process, December 31 38,500Direct materials used 14,000Total Factory overhead 7,000Direct labor used 28,000a- $49,000.b- $95,000.c- $102,000.d- $63,500.e- $14,500.
Answer:
The correct answer is D.
Explanation:
Giving the following information:
Work in Process, January 1 $53,000
Work in Process, December 31 38,500
Direct materials used 14,000
Total Factory overhead 7,000
Direct labor used 28,000
To calculate the total manufacturing costs, we need to use the following formula:
cost of goods manufactured= beginning WIP + direct materials + direct labor + allocated manufacturing overhead - Ending WIP
cost of goods manufactured= 53,000 + 14,000 + 28,000 + 7,000 - 38,500
cost of goods manufactured= $63,500
A total asset turnover ratio of 5.1 indicates that: Multiple Choice For every $1 in sales, the firm acquired $5.1 in assets during the period. For every $1 in assets, the firm produced $5.1 in net sales during the period. For every $1 in assets, the firm earned gross profit of $5.1 during the period. For every $1 in assets, the firm earned $5.1 in net income. For every $1 in assets, the firm paid $5.1 in expenses during the period.
Answer:
For every $1 in assets, the firm produced $5.1 in net sales during the period.
Explanation:
The formula to compute the total asset turnover ratio is shown below:
Total Asset turnover ratio = Net Sales ÷ Average Total Asset
where,
Net sales come after deducting the sales discounts, and other expenses
And, the average total assets could be computed by taking an average of opening and closing total assets
So, the total asset turnover shows that for every $1 of assets would create $5.1 of sales
Hence, the first option is correct
A 10% coupon bond, $1,000 par value, annual payments, 10 years to maturity is callable in 3 years at a call price of $1,100. If the bond is selling today for $975, the yield to call is _________.
Answer:
13.98%.
FV = 1100, n = 3, PMT = 100, PV = -975, i = 13.98%.
XYZ stock is trading at $25.75 and XYZ Jul 25 calls are trading at a premium of $2. What is the time value of the Jul 25 calls
Answer:
$125
Explanation:
Time value = Premium - Intrinsic value
Premium. = 2 or $200 i.e 2×100
Intrinsic value = 75
= $200 - $75
= $125
The time value of the Jul 25 calls will be $125.
It should be noted that the time value is simply the difference that exist between the premium and the intrinsic value. In this case, the time value will be:
= $200 - $75
= $125
The premium is gotten as 2 × 100 = $200.
Therefore, the time value of the Jul 25 calls will be $125.
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Oak Outdoor Furniture manufactures wood patio furniture. If the company reports the following costs for June 2018,Wood $ 270,000Nails, glue, stain 18,000Depreciation on saws 5,300Indirect manufacturing labor 45,000Depreciation on delivery truck 1,700Assemblyline workers' wages 51,000What is the balance in the Manufacturing Overhead account before overhead is allocated to jobs? Assume that the labor has beenincurred, but not yet paid. Prepare journal entries for overhead costs incurred in June. What is the balance in the Manufacturing Overhead account before overhead is allocated to jobs?1. First, prepare an entry for the overhead costs for materials used.2. Next, prepare an entry for the overhead costs for labor incurred.3. Finally, prepare an entry for all other overhead costs.
Answer:
0. Manufacturing Overhead account balance before allocation.
Every expense incurred that is not directly linked to manufacturing of wood patio furniture goes here.
Oak Outdoor Furniture Manufacturing Overhead June 30
Nails, Glue, Stain 18,000
Depreciation on Saws 5,300
Indirect Manufacturing Labour 45,000
Balance $68,300
1. Journal entry for the overhead costs for materials used.
DR Manufacturing Overhead $18,000
CR Raw material Inventory $18,000
(To record cost of indirect materials used)
2. Journal entry for the overhead costs for labor incurred.
DR Manufacturing Overhead $45,000
CR Wages Payable $45,000
(To record cost of overhead labor costs incurred)
3. Journal entry for all other overhead costs.
DR Manufacturing Overhead $5,300
CR Accumulated Depreciation $5,300
(To record depreciation on saws)
The managers in Julio's company sponsor monthly brainstorming sessions and reward employees with gift cards and recognition when an out-of-the box idea leads to organizational improvements. Julio's company is an example of a(n) _______ organization.
Answer:
Learning.
Explanation:
In this scenario, the managers in Julio's company sponsor monthly brainstorming sessions and reward employees with gift cards and recognition when an out-of-the box idea leads to organizational improvements.
Hence, Julio's company is an example of a learning organization.
A learning organization is one which is typically characterized by creating an enabling environment for growth, training, and development of its employees. This opportunity and incentives help employees to engage in critical and creative thinking, research, and development. Consequently, employees would become more confident, brilliant, intelligent, knowledgeable and professionals in their assigned positions or roles, thus helping the organization to achieve its aim, goals and objectives.
In a nutshell, this ultimately implies that it's very important and necessary that organizations sponsor brainstorming sessions and reward employees awesomely, when an out-of-the box idea leads to organizational improvements.
Question 3 (2 points)
Which of the following is NOT a way to balance a project?
..
O At the Enterprise Level
At the Business Case Level
.
O At the Program Level
At the Project Level
Answer:
1
Explanation:
at the bisiness casel level
Assume that the following data characterize the hypothetical economy of Trance: money supply = $200 billion; quantity of money demanded for transactions = $160 billion; quantity of money demanded as an asset = $10 billion at 12 percent interest, increasing by $10 billion for each 2-percentage-point fall in the interest rate.
a. What is the equilibrium interest rate in Trance? _____ percent.
b. At the equilibrium interest rate, what is the quantity of money supplied, the money demanded, the amount of money demanded for transaction, and the amount of money demanded as an asset in trace?
Quantity of money supplied = $ _____ billion
Quantity of money demanded = $ _____ billion
Amount of money demanded for transactions = $ _____ billion
Amount of money demanded as an asset = $_____ billion
Answer:
a. What is the equilibrium interest rate in Trance?
The equilibrium interest rate is 6%, because it is the interest rate that brings the money supply and the money demand to equilibrium.
At 12% interest rate, the quantity of money demanded is 170 billion, while the money supply is 200 billion.
The quantity of moned demanded as an asset increases by 10 billion if the interest rate falls by two percentage points. Thus, if the interest rate falls 6 percentage points, the quantity of money demanded as an asset will increase by 30 billion, reaching 40 billion.
At this point, money demand is:
$160 billion (money demanded for transactions) + $40 billion (money demanded as an asset) = $200 billion.
Which is the same as the money supply.
b. At the equilibrium interest rate, what is the quantity of money supplied, the money demanded, the amount of money demanded for transaction, and the amount of money demanded as an asset in trace?
The quantity of money supplied is still 200 billion.
The quantity of money demanded is 200 billion.
The amount of money demanded for transactions is 160 billion.
And the amount of money demanded as an asset is 40 billion.
Cold Chiller Corporation (CCC) has annual sales of $10 million, cost of goods sold of 60 percent, average age of inventory of 80 days, average collection period of 35 days, average payment period of 30 days, and purchases that are 60 percent of cost of goods sold. How much does CCC have invested in its cash conversion cycle assuming a 365-day year?
Answer:
Cold Chiller Corporation (CCC)
Investment in cash conversion cycle:
= $10 million x 60% = $6million
which is invested for 145 (80 + 35 + 30) days before being realized as cash.
Explanation:
The cash conversion cycle (CCC) is a metric that expresses the time (measured in days) it takes for a company to convert its investments in inventory and other resources into cash flows from sales. It gives us an indication as to how long it takes a company to collect cash from sales of inventory. Often a company will finance its inventory instead of paying for it with cash up front.
The formula for the Cash Conversion Cycle is:
CCC = Days of Sales Outstanding PLUS Days of Inventory Outstanding MINUS Days of Payables Outstanding.
CCC = DSO + DIO – DPO.
Days of Sales outstanding:
DSO = [(Beginning Accounts Receivable + Ending Account Receivable) / 2] / (Revenue / 365)
Days of Inventory Outstanding:
DIO = [(Beginning Inventory + Ending Inventory / 2)] / (COGS / 365)
Operating Cycle = DSO + DIO.
Days of Payables Outstanding:
DPO = [(Beginning Accounts Payable +Ending Accounts Payable) / 2] / (COGS / 365)
A seller accepts a contingent backup offer from a second buyer and notifies the first buyer under a release clause. The first buyer decides to remove the sale of buyer's property contingency. What happens next
Answer: Completion of transaction and down payment
Explanation:
Contingency backup offer is when the seller has an already potential buyer for a property.
In this scenario, the seller would have to conclude with the first buyer to avoid fractions and disagreement in some factors and to see if the buyer can make a down payment on the propery.
A company issued 8%, 15-year bonds with a par value of $550,000 that pay interest semiannually. The market rate on the date of issuance was 8%. The journal entry to record each semiannual interest payment is:
Answer:
Debit Credit
Bond Interest Expense $22,000
Cash $22,000
Being semi-annual interest payment on bonds
Explanation:
The semi-interest payment on the bonds equals
Coupon rate × par Value × 1/2
Semi-annual interest payment = 8%× 550,000 × 1/2=22,000
Semi- annual payment = $22,000
The accounting entry to record the interest payment each time payment is made would be:
Debit Credit
Bond Interest Expense $22,000
Cash $22,000
Being semi-annual interest payment on bonds
Note that interest payment is an expense, hence to increase an expense the expense account is debit. On the other hand. the interest payment is a cash outflow, which reduces the cash asset, hence the cash account is credited.
Aspin Corporation’s charter authorizes issuance of
2,000,000 shares of common stock. Currently, 1,400,000 shares are outstand-
ing, and 100,000 shares are being held as treasury stock. The firm wishes to
raise $48,000,000 for a plant expansion. Discussions with its investment bankers
indicate that the sale of new common stock will net the firm $60 per share.
Answer and Explanation:
The calculation of the sale of new common stock is shown below:-
a. Not issued = Authorized shares - Outstanding shares - Treasury stock
= 2,000,000 - 1,400,000 + 100,000
= 500,000
Now
Maximum shares = Not issued + Treasury stock
= 500,000 + 100,000
= 600,000
b. Since if we find out the number of shares that should be issued is
= $48,000,000 ÷ $60 per share
= 800,000
But the maximum shares is 600,000 so this shares would only be issued upto this limit only
Therefore the funds should not be raised
c. Now The firm could also develop extra 200,000 shares together it get amortized also.
Hence, it can sell 800,000 shares and the amount could rise to $48,000,000
Timberline Associates uses the weighted-average method in its process costing system. The following data are for the first processing department for a recent month:
Work in process, beginning:
Units in process 2,400
Percent complete with respect to materials 75%
Percent complete with respect to conversion 50%
Costs in the beginning inventory:
Materials cost $8,400
Conversion cost $7,200
Units started into production during the month 20,800
Units completed and transferred out 22,200
Costs added to production during the month:
Materials cost $97,400
Conversion cost $129,600
Work in process, ending:
Units in process 1,000
Percent complete with respect to materials 80%
Percent complete with respect to conversion 60%
Required:
A. Determine the equivalent units of production.
B. Determine the costs per equivalent unit.
C. Determine the cost of ending work in process inventory.
D. Determine the cost of the units transferred to the next department.
On January 15 of the current year, Henry sold stock with a basis of $7,000 to his grandson Isaac for $4,000, its fair market value on that date. On December 30 of the current year, Isaac sold the same stock for $8,000 to a friend in a bona fide, arms-length transaction. As a result of these transactions, A. Isaac has a recognized gain of $4,000. B. Isaac has a recognized gain of $1,000. C. Henry has a recognized loss of $3,000. D. Neither Henry nor Isaac has a recognized gain or loss.
Answer:
B. Isaac has a recognized gain of $1,000
Explanation:
Issac's basis in computing gain is $7,000
Therefore, Gain = Selling Price - Basis Price
Gain = $8000 - $7,000
= $1,000
Issac has a recognized gain of $1000
Indirect labor includes: (You may select more than one answer. Single click the box with the question mark to produce a check mark for a correct answer and double click the box with the question mark to empty the box for a wrong answer. Any boxes left with a question mark will be automatically graded as incorrect.)
Complete Question:
Options:
a) labor of employees working directly on the product
b) labor of the maintenance employees
c) labor of the clerical staff
Answer:
Indirect labor includes:
b) labor of the maintenance employees
c) labor of the clerical staff (factory)
Explanation:
Indirect labor is the cost of labor for all those who contribute to the production of a product, but indirectly. These include the labor costs of equipment and factory maintenance employees, factory clerical staff, supervisors, and managers, product inspectors and quality controllers, etc. The determining factor is the level of involvement: direct or indirect or outside production. If it is direct or outside production, it is not part of indirect labor.
In November, one of the processing departments at Goodsell Corporation had beginning work in process inventory of $36,000 and ending work in process inventory of $35,000. During the month, $427,000 of costs were added to production and the cost of units transferred out from the department was $428,000. The company uses the FIFO method in its process costing system. In the department's cost reconciliation report for November, the total cost to be accounted for would be:__________.a) $890,000b) $71,000c) $463,000d) $926,000
Answer:
c) $463,000
Explanation:
Goodsell Corporation
FIFO Method
Current Costs
Costs Added $ 427,000
Add Beginning Work in Process Inventory $36,000
Total Current Cost $ 463,000
Cost Transferred Out $ 428,000
Add Ending Work in Process Inventory $35,000
Total Current Cost $ 463,000
FIFO assigns the current period costs to the inventories. Current period costs are obtained by adding the costs transferred out and ending inventories costs or beginning costs and costs added.