Answer:
See below
Explanation:
Given the above data,
Preferred shares = 6,000 shares × $100 = $600,000
Dividend on preference shares = $600,000 × 5% = $30,000 per year
Dividend declared in 2019
= $55,800
Preferred dividend in 2019 = $30,000 × 2 = $60,000
Dividend declared in 2020 =$55,800
Preferred dividend declared in 2020 = $30,000 + $4,200 = $34,200
Dividend paid to common stock holders = $55,800 - $34,200 = $21,600
Required information The Foundational 15 (Static) [LO13-2, LO13-3, LO13-4, LO13-5, LO13-6] Skip to question [The following information applies to the questions displayed below.] Cane Company manufactures two products called Alpha and Beta that sell for $120 and $80, respectively. Each product uses only one type of raw material that costs $6 per pound. The company has the capacity to annually produce 100,000 units of each product. Its average cost per unit for each product at this level of activity are given below: Alpha Beta Direct materials $ 30 $ 12 Direct labor 20 15 Variable manufacturing overhead 7 5 Traceable fixed manufacturing overhead 16 18 Variable selling expenses 12 8 Common fixed expenses 15 10 Total cost per unit $ 100 $ 68 The company considers its traceable fixed manufacturing overhead to be avoidable, whereas its common fixed expenses are unavoidable and have been allocated to products based on sales dollars. Foundational 13-1 (Static) Required: 1. What is the total amount of traceable fixed manufacturing overhead for each of the two products
Answer:
Cane Company
Total traceable fixed manufacturing overhead:
Alpha = $1,600,000
Beta = $1,800,000
Explanation:
a) Data and Calculations:
Alpha Beta
Selling price per unit $120 $80
Direct materials $ 30 $ 12
Direct labor 20 15
Variable manufacturing overhead 7 5
Traceable fixed manufacturing overhead 16 18
Variable selling expenses 12 8
Common fixed expenses 15 10
Total cost per unit $ 100 $ 68
Total traceable fixed manufacturing overhead:
Alpha = $1,600,000 ($16 * 100,000)
Beta = $1,800,000 ($18 * 100,000)
The statement of cash flows (as well as the balance sheet) includes within cash the notion of cash equivalents. The FASB Accounting Standards Codification represents the single source of authoritative U.S. generally accepted accounting principles. Required: 1. Obtain the relevant authoritative literature on cash equivalents using the FASB Accounting Standards Codification at the FASB website (www.fasb.org). What is the specific seven-digit Codification citation (XXX-XX-XX) that describes the guidelines for determining what items should be deemed cash equivalents
Answer: FASB ACS 305-10-20
Explanation:
The FASB Accounting Standards Codification simply refers to the source with regards to accounting principles that are generally accepted.
It should be noted that the specific seven-digit Codification citation that describes the guidelines for determining the items that should be deemed cash equivalents is FASB ACS 305-10-20. The main guideline contained here is that cash equivalents can be changes easily to cash.
Birch Corp., a calendar-year corporation, was formed three years ago by its sole shareholder, James, who has operated it as an S corporation since its inception. Last year, James made a direct loan to Birch Corp. in the amount of $6,650. Birch Corp. has paid the interest on the loan but has not yet paid any principal. (Assume the loan qualifies as debt for tax purposes.) For the year, Birch experienced a $32,000 business loss.
What amount of the loss clears the tax basis limitation, and what is James?s basis in his Birch Corp. stock and Birch Corp. debt in each of the following alternative scenarios?
a. At the beginning of the year, James's basis in his Birch Corp. stock was $46,100 and his basis in his Birch Corp. debt was $6,600.
b. At the beginning of the year, James's basis in his Birch Corp. stock was $10,300 and his basis in his Birch Corp. debt was $6,600.
c. At the beginning of the year, James's basis in his Birch Corp. stock was $0 and his basis in his Birch Corp. debt was $6,600.
Answer:
A. $32,000 clears the tax basis limitation
$14,100 basis in his Birch Corp. stock
$6,600 Birch Corp. debt
B. $16,900 clears the tax basis limitation
$0 basis in his Birch Corp. stock
$0 Birch Corp. debt
$15,000 suspended loss
C. $6,600 clears the tax basis limitation
$0 basis in his Birch Corp. stock
$0 Birch Corp. debt
$25,400 suspended loss
Explanation:
A. Based on the information given All the $32,000 amount of the loss will clear up the tax basis limitation which means that James’s stock basis will be reduced to $14,100 ($46,100 – $32,000 loss) while His debt basis on the other hand remains at $6,600.
Therefore:
$32,000 clears the tax basis limitation
$14,100 basis in his Birch Corp. stock
$6,600 Birch Corp. debt
B. Based on the information given of the $32,000 loss, $16,900($10,300+$6,600) will clear up the tax basis limitation, While his stock basis will be reduced from $10,300 to $0, and his debt basis will be reduced from $6,600 to $0. Which means that he has a suspended loss of $15,100 ($32,000 - $16,900)
Therefore:
$16,900 clears the tax basis limitation
$0 basis in his Birch Corp. stock
$0 Birch Corp. debt
$15,000 suspended loss
C. Based on the information given the amount of $6,600 will clear up the tax basis limitation. His stock basis will remains at $0, while his debt basis will be reduced from $6,600 to $0. Which means that he has a suspended loss of $25,400 ($32,000 – $6,600)
Therefore:
$6,600 clears the tax basis limitation
$0 basis in his Birch Corp. stock
$0 Birch Corp. debt
$25,400 suspended loss
BAK Corp. is considering purchasing one of two new diagnostic machines. Either machine would make it possible for the company to bid on jobs that it currently isn’t equipped to do. Estimates regarding each machine are provided below.
Machine A Machine B
Original cost $78,200 $182,000
Estimated life 8 years 8 years
Salvage value 0 0
Estimated annual cash inflows $19,800 $39,600
Estimated annual cash outflows $5,130 $10,180
Calculate the net present value and profitability index of each machine. Assume a 9% discount rate. (If the net present value is negative, use either a negative sign preceding the number eg -45 or parentheses eg (45). Round answer for present value to 0 decimal places, e.g. 125 and profitability index to 2 decimal places, e.g. 10.50. For calculation purposes, use 5 decimal places as displayed in the factor table provided.)
Machine A Machine B
Net present value
Profitablitly index
Machine A Machine B Net present value Profitability index Which machine should be purchased?
Answer:
1. Machine A
Net present value $2,996
Profitability index 1.04
Machine B
Net present value($19,166)
Profitability index = 0.89
B. Machine A
Explanation:
Calculation for the net present value and profitability index of each machine
MACHINE A
NET PRESENT VALUE
Cash Flows×9% Discount Factor=Present value
Present value of net annual cash flows($19,800-$5,130)×5.53482 =$81,196
Present value of salvage value$0 ×0.50187 =$0 $81,196
Capital investment $78,200
Net present value $2,996
($81,196-$78,200)
MACHINE APROFITABILITY INDEX
Profitability index = $81,196 / $78,200
Profitability index = 1.04
MACHINE A
NET PRESENT VALUE
Cash Flows×9% Discount Factor=Present value
Present value of net annual cash flows ($39,600-$10,180) ×5.53482 =$162,834
Present value of salvage value$0 ×0.50187 =$0 $162,834
Capital investment $182,000
Net present value($19,166)
Profitability index = $162,834 / $182,000
Profitability index = 0.89
Therefore the net present value and profitability index of each machine are :
Machine A
Net present value $2,996
Profitability index 1.04
Machine B
Net present value($19,166)
Profitability index = 0.89
2. Based on the above calculation for both Machine And Machine B we can see that Machine B net present value is negative while, profitability index is also low which means that Machine B should not be Purchased and MACHINE A SHOULD BE PURCHASED.
Andy derives utility from two goods, potato chips (Qp) and Cola (Qc). Andy receives zero utility unless he consumes some of at least one good. The marginal utility that he receives from the two goods is given as follows:
Qp MUp Qc MUc
1 12 1 24
2 10 2 22
3 8 3 20
4 6 4 18
5 4 5 16
6 2 6 14
7 -2 7 12
8 4 8 10
Refer to Scenario, what is the total utility that Andy will receive if he consumes 5 units of potato chips (Qp) and no Cola drink (Qc)?
Answer:
TU = 40
Explanation:
Total utility is the sum of marginal utility obtained by consuming different units of the good. So at 5 units of potato chips (Qp) and 0 units of Cola drink (Qc) , we can find total utility by adding marginal utility till 5th unit of Qp.
[tex]Total utility = 12 + 10 + 8 + 6 + 4 \\ = 40[/tex]
Thus, total utility from 5 units of potato chips and no cola is 40 utils.
The total utility that Andy will receive if he consumes 5 units of potato chips (Qp) and no Cola drink (Qc) is 40.
The calculation is as follows:= 12 + 10 + 8 + 6 + 4
= 40 utils
Therefore we can conclude that The total utility that Andy will receive if he consumes 5 units of potato chips (Qp) and no Cola drink (Qc) is 40.
Learn more: brainly.com/question/16911495
Differential Analysis for a Lease or Buy Decision
Laredo Corporation is considering new equipment. The equipment can be purchased from an overseas supplier for $120,000. The freight and installation costs for the equipment are $1,500. If purchased, annual repairs and maintenance are estimated to be $2,200 per year over the six-year useful life of the equipment. Alternatively, Laredo Corporation can lease the equipment from a domestic supplier for $25,000 per year for six years, with no additional costs.
Prepare a differential analysis dated March 15 to determine whether Laredo Corporation should lease (Alternative 1) or purchase (Alternative 2) the equipment. (Hint: This is a "lease or buy" decision, which must be analyzed from the perspective of the equipment user, as opposed to the equipment owner). If an amount is zero, enter "0".
Differential Analysis
Lease (Alt. 1) or Buy (Alt. 2) Equipment
March 15
Lease
Equipment
(Alternative 1) Buy
Equipment
(Alternative 2) Differential
Effects
(Alternative 2)
Costs:
Purchase price $ $ $
Freight and installation
Repair and maintenance (6 years)
Lease (6 years)
Total costs $ $ $
Answer:
Lease Equipment $150,000
BUY EQUIPMENT$134,700
Differential Effects-$15,300
The company should choose BUY EQUIPMENT which is Alternative 2
Explanation:
Preparation of the differential analysis dated March 15 to determine whether Laredo Corporation should lease (Alternative 1) or purchase (Alternative 2) the equipment
Differential Analysis
Lease (Alt. 1) or Buy (Alt. 2) Equipment
March 15
Lease Equipment (Alternative 1); Buy Equipment
(Alternative 2); Differential Effects (Alternative 2)
Costs:
Purchase price $0 $120,000 $120,000
Freight and installation $0 $1,500 $1,500
Repair and maintenance (6 years) $0 $13,200.$13,200
($2,200*6=$13,200)
Lease (6 years) $150,000 $0 -$150,000
($25,000*6)
Total costs $150,000 $134,700 -$15,300
Based on the above calculation the company should choose BUY EQUIPMENT which is Alternative 2
Tamarisk Corporation had the following activities in 2020. 1. Payment of accounts payable $711,000 4. Collection of note receivable $93,000 2. Issuance of common stock $247,000 5. Issuance of bonds payable $522,000 3. Payment of dividends $335,000 6. Purchase of treasury stock $49,000 Compute the amount Tamarisk should report as net cash provided (used) by financing activities in its 2020 statement of cash flows. (Show amounts that decrease cash flow with either a - sign e.g. -15,000 or in parenthesis e.g. (15,000).) Net cash select an option by financing activities $enter a dollar amount
Answer:
the Net Cash flow provided by financing activities is $385,000
Explanation:
The computation of the amount that should be reported as net cash provided or used by financing activities is shown below:
Cash flow from financing activities
Issuance of common stock $247,000
Issuance of bonds payable $522,000
Less: Payment of dividends -$335,000
Less: Purchase of treasury stock -$49,000
Net Cash flow provided by financing activities $385,000
Hence, the Net Cash flow provided by financing activities is $385,000
Forever Ready Company expects to operate at 88% of productive capacity during May. The total manufacturing costs for May for the production of 29,040 batteries are budgeted as follows:
Direct materials $225,100
Direct labor 82,800
Variable factory overhead 23,156
Fixed factory overhead 46,000
Total manufacturing costs $377,056
The company has an opportunity to submit a bid for 2,000 batteries to be delivered by May 31 to a government agency. If the contract is obtained, it is anticipated that the additional activity will not interfere with normal production during May or increase the selling or administrative expenses.
Required:
What is the unit cost which Forever Ready Company should not go in bidding on the government contract? Round your answer to two decimal places.
Answer:
$11.40
Explanation:
Calculation to determine the unit cost which Forever Ready Company should not go in bidding on the government contract
FOREVER READY COMPANY UNIT COST
Direct materials $7.75
($225,100/29,040)
Direct labor $2.85
($82,800/ 29,040)
Variable factory overhead $0.80
($23,156/ 29,040)
Total Per unit cost $11.40
($7.75+$2.85+$0.80)
Therefore the unit cost which Forever Ready Company should not go in bidding on the government contract is $11.40
Sunland Company uses the FIFO method for internal reporting purposes and LIFO for external reporting purposes. The balance in the LIFO Reserve account at the end of 2020 was $277000. The balance in the same account at the end of 2021 is $419000. Sunland’s Cost of Goods Sold account has a balance of $2110000 from sales transactions recorded during the year. What amount should Sunland report as Cost of Goods Sold in the 2021 income statement?
Answer:
$2,252,000
Explanation:
Calculation to determine what amount should Sunland report as Cost of Goods Sold in the 2021 income statement
Using this formula
2021 income statement Cost of Goods Sold =Cost of Goods Sold account+(2021 LIFO Reserve account ending balance-2020 LIFO Reserve account ending balance)
Let Plug in the formula
2021 income statement Cost of Goods Sold =$2110000+($419000-$277000)
2021 income statement Cost of Goods Sold =$2110000+$142,000
2021 income statement Cost of Goods Sold =$2,252,000
Therefore The amount that Sunland should report as Cost of Goods Sold in the 2021 income statement is $2,252,000
Chelsea, Inc. uses the job costing method and uses direct labor hours as the allocation base. In 2016, the company estimated that they would incur 250,000 direct labor hours and total overhead costs of $2,500,000. Actual overhead costs for Job 3489 were $275,000 and actual direct labor hours were 28,000. Which of the following represents the MOH allocated to Job 3489?
a. Predetermined MOH rate= total estimated manufacturing overhead costs/ total estimated amount of the allocation base
b. $250,000/ 25,000 DLH= $10
c. MOH allocated to job= predetermined MOH rate * actual amount of allocation base used by the job
d. $10 * 28,000 DLH= $280,000
Answer:
Allocated MOH= 10*28,000
Explanation:
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= 2,500,000 / 250,000
Predetermined manufacturing overhead rate= $10 per direct labor hour
Now, we can allocate overhead:
Allocated MOH= Estimated manufacturing overhead rate* Actual amount of allocation base
Allocated MOH= 10*28,000
Allocated MOH= $280,000
Gibson Guitar Corporation has chosen to build instruments one at a time, by hand. Gibson's century-old tradition of creating investment-quality instruments represents the highest standards of imaginative design and masterful craftsmanship. Gibson's CEO has found an inverse price-demand relationship exists. He states, "the more we charged, the more guitars we sold." Thus, consumers think that higher prices mean more quality in the case of _____.
Answer:
product
Explanation:
You are the price manager at a restaurant that, for customer relations reasons, can reset its prices (reprint menus) no more than once every two years. Because you want prices that are competitive but cover costs with as much of a profit margin to spare as possible, you require as accurate a prediction of inflation over the next two years as possible.
What would be your best method of predicting inflation?
a. Take the forecast of the economist with the best track record of predicting inflation.
b. Look to the yields of inflation swaps.
c. Consult the University of Michigan survey of inflation expectations among the public.
d. Take the average inflation forecast across many professional economists.
Answer:
My best method of predicting inflation as the price manager at a restaurant is:
b. Look to the yields of inflation swaps.
Explanation:
An inflation swap is a financial derivative contract that transfers inflation risk between two parties. Inflation swap yields can provide a more accurate estimation of the future inflation rates than relying on the predictions of individual economists. This method is widely used by finance professionals to hedge or reduce inflation risk and set long-term prices.
The following selected transactions relate to liabilities of Rocky Mountain Adventures. Rocky Mountain's fiscal year ends on December 31.
January 13: Negotiate a revolving credit agreement with First Bank that can be renewed annually upon bank approval. The amount available under the line of credit is $10 million at the bank's prime rate.
February 1: Arrange a three-month bank loan of $4.3 million with First Bank under the line of credit agreement. Interest at the prime rate of
7% is payable at maturity.
May 1: Pay the 7% note at maturity.
Record the appropriate entries, if any, on January 13, February 1, and May 1.
Answer: See explanation
Explanation:
The appropriate entries will be recorded thus:
13 Jan No entry
1 Feb Debit Cash account $4,300,000
Credit Note payable $4,300,000
(For note issued on borrowing)
1 May Debit Interest Expense $4,300,000 × 7% × 3/12 = $75250
Debit Notes payable $4,300,000
Credit Cash account $4,375,250
(For amount paid on maturity)
When you begin a new job, you might be assigned to a _____, who will provide much of the new employee training.
mentor
team leader
another new employee
manager
On January 1, 2021, Farmer Fabrication issued stock options for 420,000 shares to a division manager. The options have an estimated fair value of $9 each. To provide additional incentive for managerial achievement, the options are not exercisable unless divisional revenue increases by 5% in five years. Suppose that after one year, Farmer estimates that it is not probable that divisional revenue will increase by 5% in five years.
Required:
1. What is the revised estimate of the total compensation?
2. What action will be taken to account for the options in 2022?
3. What journal entry will be needed to account for the options in 2022?
Answer and Explanation:
The computation and the journal entry is
1 The revised estimated total compensation = 0
2 The Farmer will able to reverse the 2021 recorded compensation
3 The journal entry is
Paid in capital-stock options $756,000 ($420,000 × 9)/5
Compensation expense $756,000
(Being the journal entry for the option is recorded)
Here the paid in capital would be debited as it decreased the equity and the compensation expense is credited as it decreased the liability
1. Prepare general journal entries for the transactions.
Mitchell Parts Co. had the following plant asset transactions during the year:
1. Assets discarded or sold:
Jan. 1 Motor #12, which had a cost of $2,890 and accumulated depreciation of
$2,890, was discarded.
8 Motor #8, which had a cost of $4,440 and accumulated depreciation of
$4,020, was sold for $260.
14 Motor #16, which had a cost of $5,730 and accumulated depreciation of
$5,490, was sold for $470.
2. Assets exchanged or traded in:
Feb. 1 Motor #6, which had a cost of $5,860 and accumulated depreciation of
$4,590, was traded in for a new motor (#22) with a fair market value of
$6,800. The old motor and $5,300 in cash were given for the new motor.
9 Motor #9, which had a cost of $5,420 and accumulated depreciation of
$4,940, was traded in for a new motor (#23) with a fair market value of
$6,450. The old motor and $6,170 in cash were given for the new motor.
Answer:
1. Accumulated Depreciation (Dr.) $2,890
Motor #12 (Cr.) $2,890
2. Cash (Dr.) $260
Accumulated Depreciation (Dr.) $4,020
Loss on Sale (Dr.) $160
Motor #8 (Cr.) $4,440
3. Cash (Dr.) $470
Accumulated Depreciation (Dr.) $5,490
Gain on Sale (Cr.) $230
Motor #16 (Cr.) $5,730
Explanation:
1. New Motor #22 (Dr.) $6,800
Accumulated Depreciation (Dr.) $4,590
Gain on Sale (Cr.) $230
Motor #6 (Cr.) $5,860
Cash (Cr.) $5,300
2. New Motor #23 (Dr.) $6,450
Accumulated Depreciation (Dr.) $4,940
Loss on Sale (Dr.) $200
Motor #9 (Cr.) $5,420
Cash (Cr.) $6,170
Why do they say Accounting Equation is the basis for the preparation of statement of financial position in accordance to IFRS financial statement presentation ?
Answer:
The Statement of Financial Position (SFP) or Balance Sheet, shows the assets of the company on one side and then the way the funding that enabled these assets to be acquired on the other.
This is the basis of the Accounting equation which is:
Assets = Equity + Liability
One one side of the (SFP), you have the assets shown. These assets are added up to find the Net Total Assets.
The other side of the (SFP) will have the Equity and the liabilities listed. These are then added up too and they are to be equivalent to the amount of Assets.
This would therefore prove the equation that when you add up Equity and Liabilities, you get Assets.
Skyler Manufacturing recorded operating data for its shoe division for the year. Sales $4,500,000 Contribution margin 500,000 Controllable fixed costs 200,000 Average total operating assets 900,000 How much is controllable margin for the year
Answer:
Controllable margin= $300,000
Controllable margin in %= 33.3%
Explanation:
Controllable margin is sales revenue less controllable variable costs and fixed cost.
Controllable margin= Sales revenue - controllable variable cost - controllable fixed costs
Controllable margin= contribution margin - fixed costs
= 500,000 - 200,000= 300,000
Controllable margin in %= 300,000/900,000 × 100 =33.3%
Controllable margin in %= 33.3
The market research department of the National Real Estate Company conducted a survey among 500 prospective buyers in a suburb of a large metropolitan area to determine the maximum price a prospective buyer would be willing to pay for a house. From the data collected, the distribution that follows was obtained.
Maximum Price Considered, x P(X = x)
(in thousands of dollars)
480 10
500
490 20
500
500 75
500
510 85
500
520 70
500
550 95
500
580 95
500
600 45
500
650 5
500
Required:
Compute the mean, variance, and standard deviation of the maximum price x that these buyers were willing to pay for a house.
Answer:
Following are the responses to the given question:
Explanation:
Using formula:
[tex]Mean=\Sigma x \times P(x)\\\\Variance=\Sigma (x-\mu)^2 \times P(x)\\\\Standard \ Deviation=\sqrt{Variance}[/tex]
[tex]x\ \ \ \ \ \ \ P(x)\ \ \ \ \ \ \ x\times P(x)\ \ \ \ \ \ \ (x-\mu)^2\times P(x)\\\\480\ \ \ \ \ \ \ 0.02\ \ \ \ \ \ \ 9.6\ \ \ \ \ \ \ 72.9632\\\\490\ \ \ \ \ \ \ 0.05\ \ \ \ \ \ \ 24.5\ \ \ \ \ \ \ 127.008\\\\500\ \ \ \ \ \ \ 0.14\ \ \ \ \ \ \ 70\ \ \ \ \ \ \ 228.5024\\\\510\ \ \ \ \ \ \ 0.16\ \ \ \ \ \ \ 81.6\ \ \ \ \ \ \ 147.8656\\\\520\ \ \ \ \ \ \ 0.14\ \ \ \ \ \ \ 72.8\ \ \ \ \ \ \ 58.2624\\\\550\ \ \ \ \ \ \ 0.18\ \ \ \ \ \ \ 99\ \ \ \ \ \ \ 16.5888\\\\[/tex]
[tex]580\ \ \ \ \ \ \ 0.18\ \ \ \ \ \ \ 104.4\ \ \ \ \ \ \ 282.2688\\\\600\ \ \ \ \ \ \ 0.12\ \ \ \ \ \ \ 72\ \ \ \ \ \ \ 426.2592\\\\650\ \ \ \ \ \ \ 0.01\ \ \ \ \ \ \ 6.5\ \ \ \ \ \ \ 120.1216\\\\[/tex]
[tex]Total\ \ \ \ \ \ \ \ \ \ 540.4 \ \ \ \ \ \ \ \ \ \ 1479.84\\\\Mean \ \ \ \ \ \ \ \ \ \ 540.4 \ \ \ \ \ \ \ \ \ \ dollars\\\\Variance \ \ \ \ \ \ \ 1479.84 \ \ \ \ \ \ \ \ dollars^2\\\\St \ Dev \ \ \ \ \ \ \ \ \ \ 38 \ \ \ \ \ \ \ \ \ \ dollars[/tex]
Sarasota Corporation sells rock-climbing products and also operates an indoor climbing facility for climbing enthusiasts. During the last part of 2017, Sarasota had the following transactions related to notes payable.
Sept. 1 Issued a $16,800 note to Pippen to purchase inventory. The 3-month note payable bears interest of 9% and is due December 1. (Sarasota uses a perpetual inventory system.)
Sept. 30 Recorded accrued interest for the Pippen note.
Oct. 1 Issued a $22,800, 10%, 4-month note to Prime Bank to finance the purchase of a new climbing wall for advanced climbers. The note is due February 1.
Oct. 31 Recorded accrued interest for the Pippen note and the Prime Bank note.
Nov. 1 Issued a $27,600 note and paid $8,100 cash to purchase a vehicle to transport clients to nearby climbing sites as part of a new series of climbing classes. This note bears interest of 6% and matures in 12 months.
Nov. 30 Recorded accrued interest for the Pippen note, the Prime Bank note, and the vehicle note.
Dec. 1 Paid principal and interest on the Pippen note.
Dec. 31 Recorded accrued interest for the Prime Bank note and the vehicle note.
I was wondering how to do the journal entries for...
1. October 1st
2. November 1st
3. November 30th
4. December 31st
Answer:
Sarasota Corporation
Journal Entries for the following dates:
Oct. 1: Debit Equipment $22,800
Credit 10% Notes Payable (Prime Bank) $22,800
To record the issuance of a 4-month note.
Nov. 1: Debit Vehicle $35,700
Credit Cash $8,100
Credit 6% Notes Payable $27,600
To record the issuance of a 12-month note and cash for purchased vehicle.
Nov. 30: Debit Interest Expense $454
Credit Interest payable $454
To accrue the interests due on the notes.
Dec. 31: Debit Interest Expense $328
Credit Interest payable $328
To accrue the interests due on the outstanding notes.
Explanation:
a) Data and Analysis:
Sept. 1: Inventory $16,800 9% Notes Payable (Pippen) $16,800
3-month note
Sept. 30: Interest Expense $126 Interest payable $126
Oct. 1: Equipment $22,800 10% Notes Payable (Prime Bank) $22,800
4-month note
Oct. 31: Interest Expense $316 Interest payable 316
Nov. 1: Vehicle $35,700 Cash $8,100 6% Notes Payable $27,600
12-month note
Nov. 30: Interest Expense $454 Interest payable $454
Dec. 1: Notes payable (Pippen) $16,800 Interest payable $378 Cash $17,178
Dec. 31: Interest Expense $328 Interest payable $328
Calculate free cash flow for 2017 for Monarch Textiles, Inc., based on the financial information that follows. Assume that all current liabilities are non-interest-bearing liabilities and that no fixed assets were sold or disposed of during 2017. (Enter your answer in 1000s.) Monarch Textiles, Inc. ($ thousands) Income statement Selected balance sheet items 2017 2016 2017 Sales 1,490 Current assets 430 595 Cost of sales 830 Net fixed assets 152 304 Operating expenses 165 Current liabilities 265 345 Depreciation 76 Interest expense 50 Earnings before taxes 369.00 Tax 147.60 Net income 221.40
Answer:
$34.39
Explanation:
EBIT = EBT + Interest Expense
EBIT = 369.00 + 50
EBIT = $419
Tax Rate = Tax / EBT
Tax Rate = 147.60 / 419
Tax Rate = 0.352267
Tax Rate = 35.23%
Working Capital, 2017 = Current Assets, 2017 - Current Liabilities, 2017
Working Capital, 2017 = 595 - 345
Working Capital, 2017 = $250
Working Capital, 2016 = Current Assets, 2017 - Current Liabilities, 2017
Working Capital, 2016 = 430 - 265
Working Capital, 2016 = $165
Change in Working Capital = Working Capital, 2017 - Working Capital, 2016
Change in Working Capital = $250 - $165
Change in Working Capital = $85
Capital Expenditure = Net Fixed Assets, 2017 - Net Fixed Assets, 2016
Capital Expenditure = $304 - $152
Capital Expenditure = $152
Free Cash Flow = EBIT * (1 - Tax Rate) - Change in Working Capital - Capital Expenditure
Free Cash Flow = $419*(1- 35.23%) - $85 - $152
Free Cash Flow = $271.39 - $85 - $152
Free Cash Flow = $34.39
The free cash flow for 2017 for Monarch Textiles, Inc. is $34.39
What is free cash flow?Free cash flow (FCF) is the money a company has left, after paying off its operating expenses and capital expenditures. ·
We will calculate the below to arrive at the free cash flow.
EBIT = EBT + Interest Expense
EBIT = 369.00 + 50
EBIT = $419
Tax Rate = Tax / EBT
Tax Rate = 147.60 / 419
Tax Rate = 0.352267
Tax Rate = 35.23%
Working Capital, 2017 = Current Assets, 2017 - Current Liabilities, 2017
Working Capital, 2017 = 595 - 345
Working Capital, 2017 = $250
Working Capital, 2016 = Current Assets, 2017 - Current Liabilities, 2017
Working Capital, 2016 = 430 - 265
Working Capital, 2016 = $165
Change in Working Capital = Working Capital, 2017 - Working Capital, 2016
Change in Working Capital = $250 - $165
Change in Working Capital = $85
Capital Expenditure = Net Fixed Assets, 2017 - Net Fixed Assets, 2016
Capital Expenditure = $304 - $152
Capital Expenditure = $152
Free Cash Flow = EBIT * (1 - Tax Rate) - Change in Working Capital - Capital Expenditure
Free Cash Flow = $419*(1- 35.23%) - $85 - $152
Free Cash Flow = $271.39 - $85 - $152
Free Cash Flow = $34.39
Learn more about free cash flow here : https://brainly.com/question/24634115
Compute the payback period for each of these two separate investments:
a. A new operating system for an existing machine is expected to cost $250,000 and have a useful life of four years. The system yields an incremental after-tax income of $72,115 each year after deducting its straight-line depreciation. The predicted salvage value of the system is $10,000.
b. A machine costs $200,000, has a $13,000 salvage value, is expected to last eight years, and will generate an after-tax income of $39,000 per year after straight-line depreciation.
Answer:
A. 1.89 years
B. 2.33 years
Explanation:
According to the scenario, computation of the given data are as follows,
(A) After-tax income = $72,115
Expected cost = $250,000
Useful life = 4 years
Salvage value = $10,000
Depreciation Value = ($250,000 - $10,000) ÷ 4 = $60,000
Annual net cashflow = After tax income + Depreciation
= $72,115 + $60,000 = $132,115
Payback Period = Machine expected cost ÷ Annual net cash flow
= $250,000 ÷ $132,115
= 1.89 years
(B) After-tax income = $39,000
Machine cost = $200,000
Useful life = 8 years
Salvage value = $13,000
Depreciation value = ($200,000 - $13,000) ÷ 4 = $46,750
Annual net cashflow = After tax income + Depreciation
= $39,000 + $46,750 = $85,750
Payback Period = Machine expected cost ÷ Annual net cash flow
= $200,000 ÷ $85,750
= 2.33 years
Write a professional 1 page memo that responds to this problem.
Jack Jones is an employee who performs below expected levels. You hired Jack because he was highly qualified for the job, and he used to be an excellent worker. He has a personality that fits well in your company, and you want to keep him. Lately, Jack has been regularly late to work, misses work often, and spends a lot of time away from his desk when he is at work. As the department manager, you are in charge of communicating the news to Jack as well as providing him a feasible plan for improving his work performance.
Solution :
Memo
From : Department Manager
Date : 01 May 2021
Subject : Improvement of Performance
This is to inform you that I have lately noticed that you have not able to meet the goal for the last 6 months and your average is average. I see that you are an excellent worker and have doing good but lately your performance level is not up to the mark. Also you are not punctual at your job which may hamper your appraisal or your incentives.
So going forward, I would like to ask you to be regular to work and work effectively for your overall growth. I would suggest you to be on time at work at complete your daily task for the day to achieve your targets. Your can also seta goal for the day so that your targets are achieved.
You are a true asset to the organization and we believed that your efforts will help you to grow and learn more.
I have attached a file which shows your performance for the last 6 months and also a feedback on how to improve.
Revert if there is any query.
Best Regards
Department Manager
start and explain five importance of HRM
Answer:
Human Resource Management deals with issues related to compensation, performance management, organisation development, safety, wellness and others. HRM plays a role in managing people and the workplace culture and environment
Explanation:
On August 1, Sparky assigned $100,000 of the accounts receivable to B Bank and received 90% of the value of the accounts assigned less a finance fee of $1,000. B Bank charges 1% per month on the outstanding loan balance. Cash collections from assigned accounts are to be remitted monthly to B Bank to cover both principal and interest payments. During August Sparky collected $30,000 in cash of the accounts receivable assigned and also accepted sales returns of $3,000 from assigned accounts. During September, Sparky collected $50,000 in cash on accounts assigned and, in addition, wrote off $2,000 of assigned accounts receivable as uncollectible. As a result of these transactions, determine the ending balance in the Accounts Receivable Assigned and Note Payable.
Answer and Explanation:
The computation of the ending balance in the Accounts Receivable Assigned and Note Payable is shown below:
For account receivable assigned:
Beginning account receivable $100,000
cash collected -$300,000
Sales returns - $3,000
Cash collected during September -$50,000
Uncollectible account receivable -$2,000
Ending balance of the account receivable $15,000
For note payable
Beginning balance (90% of $100,000) $90,000
Interest on the loan (1% of $90,000) $900
Cash paid during the August -$30,000
Beginning balance of September $60,900
Interest paid (1% of $60,900) $609
Cash paid during September -$50,000
Ending balance $11,509
Plantwide Overhead Rate, Activity-Based Costing, Job Costs
Foto-Fast Copy Shop provides a variety of photocopying and printing services. On June 5, the owner invested in some computer-aided photography equipment that enables customers to reproduce a picture or illustration, input it digitally into the computer, enter text into the computer, and then print out a four-color professional quality brochure. Prior to the purchase of this equipment, Foto-Fast Copy Shop's overhead averaged $30,400 per year. After the installation of the new equipment, the total overhead increased to $83,600 per year. Foto-Fast Copy Shop has always costed jobs on the basis of actual materials and labor plus overhead assigned using a predetermined overhead rate based on direct labor hours. Budgeted direct labor hours for the year are 7,600, and the wage rate is $9 per hour.
Required:
1. What was the predetermined overhead rate prior to the purchase of the new equipment?
$ per direct labor hour
2. What was the predetermined overhead rate after the new equipment was purchased?
$ per direct labor hour
3. Suppose Rick Anselm brought in several items he wanted photocopied. The job required 600 sheets of paper at $0.03 each and 36 minutes of direct labor time. What would have been the cost of Rick's job on May 20? On June 20? If required, round your answers to the nearest cent. Round your intermediate computations to two decimals places and final answer to the nearest dollar
Total job cost
May 20 $
June 20 $
4. Suppose that the owner decides to calculate two overhead rates, one for the photocopying area based on direct labor hours as before, and one for the computer-aided printing area based on machine time. Estimated overhead applicable to the computer-aided printing area is $55,440, and forecasted usage of the machines is 2,100 hours. What are the two overhead rates? If required, round your answers to the nearest cent.
Answer:
Foto-FAst Copy Shop
1. Predetermined overhead rate = $4 per direct labor hour
2. Predetermined overhead rate = $11 per direct labor hour
3. Total job cost (Rick Anselm):
May 20 = $26.00
June 20 = $30.00
4. The two overhead rates:
a. $26.40 per machine hour
b. $3.71 per direct labor hour
Explanation:
a) Data and Calculations:
Average overhead per year prior to the purchase of the new equipment = $30,400
Average overhead per year after the installation of new equipment = $83,600
Budgeted direct labor hours for the year = 7,600
Wage rate = $9 per hour
1. Predetermined overhead rate prior to the purchase of the new equipment
= $4 ($30,400/7,600)
2. Predetermined overhead rate after the new equipment was purchased
= $11 ($83,600/7,600)
3. Cost of Rick Anselm's job on May 20:
Materials ($0.03 * 600) $18.00
Labor ($9 * 36/60) 5.40
Overhead applied 2.40 ($4 * 36/60)
Total cost of job = $25.80 = $26
Cost of Rick Anselm's job on June 20:
Materials ($0.03 * 600) $18.00
Labor ($9 * 36/60) 5.40
Overhead applied 6.60 ($11 * 36/60)
Total cost of job = $30.00
4. Overhead Rates Photocopying Computer Printing Total
Overhead cost $55,440 $28,160 $83,600
Machine hours 2,100
Direct labor hours 7,600
Overhead rates $26.40 $3.71
Mr. and Mrs. Kim, married filing jointly, own a principal residence and a vacation home. Each residence is subject to a mortgage that qualifies as acquisition debt, and both mortgages were incurred before December 15, 2017. This year, the mortgage holders provided the following information: Mortgage Interest Paid $ 45,000 26,300 Average Balance of Mortgage $ 969,800 361,000 Principal residence Vacation home
Compute Mr. and Mrs. Kim's qualified residence interest. (Do not round intermediate calculations. Round your final answer to the nearest dollar amount.)
Qualified residence interest________
Answer:
$53,577
Explanation:
Computation for Mr. and Mrs. Kim's qualified residence interest
Using this formula
Qualified residence interest=(Acquisition debt ÷ Total debt) ×Total interest
Where,
Total Acquisition=$ 969,800+ 361,000
Total Acquisition=$1,330,800
Total debt =$ 45,000 +26,300
Total debt=$71,300
Let plug in the formula
Qualified residence interest=(1,000,000÷$1,330,800)×$71,300
Qualified residence interest=$53,577
Therefore the Qualified residence interest is $53,577
The following is a December 31, 2018, post-closing trial balance for Almway Corporation.
Account Title Debits
Credits
Cash 77,000
Investments 142,000
Accounts Receivable 76,000
Investments 216,000
Prepaid insurance (for the next 9 Months) 6,000
Land 122,000
Buildings 436,000
Accumulated Depreciation-Buildings 116,000
Equipment 126,000
Accumulated Depreciation-Equipment 76,000
Patents (net of amortization) 26,000
Accounts Payable 107,000
Notes Payable 178,000
Interest Payable 36,000
Bonds Payable 256,000
Common Stock 348,000
Retained Earnings 110,000
Totals 1,227,000 1,227,000
Additional information:_______.
The investment in equity securities account includes an investment in common stock of another corporation of $36,000 which management intends to hold for at least three years. The balance of these investments is intended to be sold in the coming year. The land account includes land which cost $31,000 that the company has not used and is currently listed for sale. The cash account includes $21,000 restricted in a fund to pay bonds payable that mature in 2024 and $29,000 restricted in a three-month Treasury bill. The notes payable account consists of the following: a $36,000 note due in six months. a $56,000 note due in six years. a $56,000 note due in five annual installments of $11,200 each, with the next installment due February 15, 2022. The $66,000 balance in accounts receivable is net of an allowance for uncollectible accounts of $9,000. The common stock account represents 106,000 shares of no par value common stock issued and outstanding. The corporation has 500,000 shares authorized.
Required:
Prepare a classified balance sheet for the Almway Corporation at December 31, 2018. (Amounts to be deducted should be indicated by a minus sign.)
Answer:
Almway Corporation
Classified Balance Sheet
As of December 31, 2018
Assets
Current Assets:
Cash $27,000
Restricted fund (treasury bill) 29,000
Marketable Investments 142,000
Accounts Receivable 85,000
Allowance for Uncollectibles (9,000)
Short-term investment 180,000
Prepaid insurance
(for the next 9 Months) 6,000 $460,000
Long-term Assets:
Restricted fund (bonds payable) 21,000
Long-term investment 36,000
Land for sale 31,000
Land in use 91,000
Buildings 436,000
Accumulated Depreciation (116,000)
Equipment 126,000
Accumulated Depreciation (76,000)
Patents (net of amortization) 26,000 $575,000
Total assets $1,035,000
Liabilities and Equity
Current Liabilities:
Accounts Payable 107,000
Short-term notes payable 47,500
Interest Payable 36,000 $190,500
Long-term liabilities:
Long-term notes payable 130,500
Bonds Payable 256,000 $386,500
Total liabilities $577,000
Equity:
Common Stock 348,000
Retained Earnings 110,000 $458,000
Total liabilities and equity $1,035,000
Explanation:
a) Data and Calculations:
Almway Corporation
Trial Balance as of December 31, 2018
Account Title Debits Credits
Cash 77,000
Investments 142,000
Accounts Receivable 76,000
Investments 216,000
Prepaid insurance
(for the next 9 Months) 6,000
Land 122,000
Buildings 436,000
Accumulated Depreciation-Buildings 116,000
Equipment 126,000
Accumulated Depreciation-Equipment 76,000
Patents (net of amortization) 26,000
Accounts Payable 107,000
Notes Payable 178,000
Interest Payable 36,000
Bonds Payable 256,000
Common Stock 348,000
Retained Earnings 110,000
Totals 1,227,000 1,227,000
Additional Information and Analysis:
a. Investments in equity 216,000:
Short-term investment 180,000
Long-term investment 36,000
b. Land 122,000:
Land for sale 31,000
Land in use 91,000
c. Cash 77,000:
Restricted fund (bonds payable) 21,000
Restricted fund (treasury bill) 29,000
Cash balance 27,000
d. Notes Payable 178,000:
Short-term notes payable 36,000 + 11,500 = $47,500
Long-term notes payable 130,500
e. Accounts Receivable 76,000:
Allowance for uncollectibles 9,000
Accounts receivable 85,000
f. Common Stock 348,000:
Authorized shares, 500,000
106,000 Issued shares, no par 348,000
Almway Corporation
Adjusted Trial Balance as of December 31, 2018
Account Title Debits Credits
Cash 27,000
Restricted fund (bonds payable) 21,000
Restricted fund (treasury bill) 29,000
Marketable Investments 142,000
Accounts Receivable 85,000
Allowance for Uncollectibles 9,000
Short-term investment 180,000
Long-term investment 36,000
Prepaid insurance
(for the next 9 Months) 6,000
Land for sale 31,000
Land in use 91,000
Buildings 436,000
Accumulated Depreciation-Buildings 116,000
Equipment 126,000
Accumulated Depreciation-Equipment 76,000
Patents (net of amortization) 26,000
Accounts Payable 107,000
Short-term notes payable 47,500
Long-term notes payable 130,500
Interest Payable 36,000
Bonds Payable 256,000
Common Stock 348,000
Retained Earnings 110,000
Totals 1,236,000 1,236,000
Zeffer is a small but growing bottling company that competes with large soft drink heavy-hitters. To set itself apart, Zeffer has decided to develop a line of all-natural soft drinks that are believed to be healthier than typical high-calorie sodas. The company hopes that these soft drinks will become popular in various sectors of the U.S. market. Answer the following question based on the scenario described above. Zeffer executives have decided to focus marketing efforts on the ________ market, since this group is expected to grow more rapidly than
Answer:
Hispanic
Explanation:
In the United States Hispanic population has continued to be responsible for half of the total population growth since 2010 till date.
In this time Hispanics contributed 52% to the 18.9 million population growth in the United States.
Based on this trend Zeffer has decided to develop a line of all-natural soft drinks that are believed to be healthier than typical high-calorie sodas and targeting the Hispanic market will make their product popular rapidly.
Two methods can be used to produce expansion anchors. Method A costs $65,000 initially and will have a $18,000 salvage value after 3 years. The operating cost with this method will be $28,000 in year 1, increasing by $3600 each year. Method B will have a first cost of $108,000, an operating cost of $8000 in year 1, increasing by $8000 each year, and a $38,000 salvage value after its 3-year life. At an interest rate of 8% per year, which method should be used on the basis of a present worth analysis
Answer:
Method B should be used
Explanation:
Note: See the attached excel file for the calculation of the present worth of Method A and Method B.
From the attached excel file, we have:
Present worth of Method A = –$210,889.85
Present worth of Method B = –$118,011.18
Since the present worth of Method A and B above imply Method A costs more than Method B, Method B should be used.