Answer:
$25,680
Explanation:
For the computation of revised depreciation for both the second and third years first we need to follow some steps which are shown below:-
Depreciation cost = Cost - Salvage value
= $66,200 - $2,000
= $64,200
Annual depreciation under SLM method = Depreciable cost ÷ Useful life
= $64,200 ÷ 5
= $12,840
Book value of the equipment = Cost - Annual depreciation
= $66,200 - $12,840
= $53,360
Remaining depreciable cost = Book value at point of division - Salvage value
= $53,360 - $2,000
= $51,360
Annual depreciation for year 2 and year 3 = Remaining depriciable cost ÷ Remaining useful life
= $51,360 ÷ (3 - 1)
= $51,360 ÷ 2
= $25,680
The fair value of net identifiable assets of a reporting unit of Y Company is $270,000. The carrying value of the reporting unit's net assets on Y Company's books is $320,000, including $50,000 of goodwill before any impairment. If the reported goodwill impairment for the unit is $10,000, what would be the fair value of the entire reporting unit?
Answer: $310,000
Explanation:
From the question, we are informed that the fair value of net identifiable assets of a reporting unit of Y Company is $270,000 and that the carrying value of the reporting unit's net assets on Y Company's books is $320,000, including $50,000 of goodwill before any impairment. We are further told that the reported goodwill impairment for the unit is $10,000.
To calculate the fair value of the entire reporting unit, we deduct the goodwill impairment for the unit which is $10,000 from the carrying value of the reporting unit's net assets on Y Company's books which is $320,000. This will be:
= $320,000 - $10,000
= $310,000
12. A company has an EPS of $2.00, a book value per share of $20, and a market/book ratio of 1.2x. what is its P/E ratio
Answer:
P/E Ratio = 12x or 12 times
Explanation:
We know that the P/E ratio is calculated by dividing the price per share by the earnings per share or EPS.
P/E = Price per share / Earnings per share
We already have EPS. We need to calculate the price per share.
It is given that book value per share is $20 and the market to book ratio is 1.2x or 1.2 times. Using the formula for market to book ratio, we calculate the market price per share to be,
M/B = Market price per share / Book value per share
1.2 = Market price per share / 20
20 * 1.2 = Market price per share
Market price per share = $24
So, P/E ratio = 24 / 2
P/E Ratio = 12x or 12 times
On December 31, 2017, Jerome Company has an accounts receivable balance of $316,000 before any year-end adjustments.
The Allowance for Doubtful Accounts has a $1,000 credit balance. The company prepares the following aging schedule for accounts receivable:
Total Balance 1-30 days 31-60 days 61-90 days over 90 days
$316,000 $152,000 $87,000 $50,000 $27,000
Percent uncollectible 1% 2% 3% 21%
What is the Allowance for Uncollectible Accounts at December 31, 2017?
A. $1,000
B. $11,430
C. $9,430
D. $10,43
Answer:
The Allowance for Uncollectible Accounts at December 31, 2017 is $10,430
Explanation:
In order to calculate the Allowance for Uncollectible Accounts at December 31, 2017 we would have to make the following calculation:
Allowance for Uncollectible Accounts at December 31, 2017=Estimated Allowance 1-30 days+Estimated Allowance 31-60 days+Estimated Allowance 61-90 days+Estimated Allowance over 90 days
Estimated Allowance 1-30 days=Balance*% Uncollectible
Estimated Allowance 1-30 days=$152,000*1%=$1,520
Estimated Allowance 31-60 days=$87,000*2%=$1,740
Estimated Allowance 61-90 days=$50,000*3%=$1,500
Estimated Allowance over 90 days=$27,000*21%=$5,670
Allowance for Uncollectible Accounts at December 31, 2017=$1,520+$1,740+$1,500+$5,670
Allowance for Uncollectible Accounts at December 31, 2017=$10,430
The journal entry to record the transfer of 1,600 units of part number 1177 with a value of $2.50 each, to work in process is Group of answer choices Work in Process 4,000 Materials 4,000 Work in Process 4,000 Factory Overhead 4,000 Work in Process 4,000 Cash 4,000 Materials 4,000 Work in Process 4,000
Answer:
The correct option is:
Work in Process 4,000 Materials 4,000
Explanation:
The total cost of the part= $2.50*1,600 units
The total cost of the part=$4,000
Going by the rule of the double which requires receiving account to debited while giving account is credited, we debit work-in-process with $4,000 while materials(inventory in the balance sheet) is credited with the same amount of $4,000.
Indicate whether each scenario wll affect the GDP deflator or the CPI for the United States,
Shows up in the.
GDP Scenario
A decrease in the price of a Treewood Equipment feller buncher, which is a commercial forestry machine made in the U.S. but not bought by U.S. consumers
An increase in the price of a German-made phone that is popular among U.S. consumers Deflator CPI.
Answer:
1st scenario shows the GDP deflator and second shows the CPI.
Explanation:
The consumer price index (CPI) is determined by dividing the market price of commodities (basket) with the base year prices of that basket or commodity and then multiply with a hundred. The CPI reflects only the price of goods and services brought by the consumer.
Therefore, the first scenario price of a treewood is the GDP deflator and the second scenario is CPI.
g "A company with an operating income of $88,000 and a contribution margin ratio of 70% has a margin of safety of: "
Answer:
$125,714
Explanation:
Calculation for A company margin of safety
Using this formula
Margin of safety =Operating net income ÷contribution margin ratio
Let plug in the formula
Margin of safety =$88,000 ÷ 0.70
Margin of safety= $125,714
Therefore A company margin of safety will be $125,714
Libby Company manufactures a single product by a continuous process, involving the production departments. The records indicate that direct materials, direct labor, and applied factory overhead for Department 1 were $160,000, $125,000, and $150,000, respectively. The journal entry to record applied factory overhead is
Answer:
Work In Process Account $150,000 (debit)
Overheads $150,000 (credit)
Explanation:
Overheads are included in Work In Process Account at their Applied Amounts .Thus a Debit in Work In Process Account and a Credit in Overheads Account is required for this entry.
Diego owns 30 % of Azul Corporation. Azul Corporation owns 50 % of Verde Corporation. Under the attribution rules applying to stock redemptions, Diego is treated as owning 15 % of Verde Corporation.
A. True
B. Flase
Answer:
Option A,true is correct
Explanation:
The indirect interest of Diego in Verde Corporation is the percentage holding in Azul Corporation multiplied by percentage holding that Azul Corporation owns in Verde Corporation as further illustrated below:
Holding in Verde Corporation=30%*50%
Holding in Verde Corporation=15.00%
In other words, the statement that Diego is treated as owning 15 % of Verde Corporation is true
Which of the following is NOT an element of organizational structure? A) Well-articulated mission, vision, and value statements. B) Formal reporting relationships. C) Grouping together of individuals into departments. D) Systems designed to ensure effective communication
Answer:
A) Well-articulated mission, vision, and value statements.
Explanation:
An organizational structure can be defined as a system that states how business activities such as standard rules, task allocation or roles of employees, coordination, responsibilities and supervision of these activities are directed so as to enhance the achievement of the goals, aims and objectives of the organization.
Simply stated, an organizational structure usually defines a hierarchy, which is used to determine how information, roles and responsibilities flow from one level to another in an organization. Generally, the flow of information are usually from top to bottom.
Furthermore, the organizational structure can be divided into four (4) distinct categories and these are;
1. Matrix organizational structure.
2. Functional organizational structure.
3. Divisional organizational structure.
4. Flat organizational structure.
The following are the elements of organizational structure;
A. Formal reporting relationships. This is enhanced by assigning a hierarchy, where informations are reported to the right individual and in a timely manner as well.
B. Grouping together of individuals into departments. This is to increase the level of output and enhance building good, coordinated development through division of labor.
C. Systems designed to ensure effective communication.
Hence, a well-articulated mission, vision, and value statements isn't an element of organizational structure. It could be regarded as an organization's center of gravity.
An organizational structure is a system that specifies how business operations, such as standard norms, task distribution or personnel roles, coordination, responsibilities, and supervision, are directed in order to help the organization achieve its goals, aims, and objectives.
So, Option A is the correct option which is not true about organizational structure.
The other options are incorrect as:
Option B is incorrect as Relationships of formal reporting. This is aided by establishing a hierarchy in which information is reported to the appropriate person and in a timely manner.
Option C is incorrect as Individuals are organized into departments. This is to raise output and improve the development of good, coordinated development by dividing labor.
Option D is incorrect as yes designing system to ensure effective communication is element of organizational structure.
Thus option A isn't a part of the company's structure. It's possible to think of it as the organization's center of gravity.
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Aspen Ski Resorts has 100 employees, each working 40 hours per week and earning $20 an hour. Although the company does not pay any health or ree tirement benefits, one of the perks of working at Aspen is that employees are allowed freskiing on their days off. Federal income taxes are withheld at 15% and state income taxes at
Answer:
1. a. Total Salary Expense
= No. Of Employees * Hourly rate * Hours worked
= 100 * 20 * 40
= $80,000
b. Total Witholdings from Employee Salaries
This will include all Taxes.
= Federal Income Taxes + FICA Taxes + States Income Taxes
= (80,000 * 15%) + (80,000 * 7.65%) + (80,000 * 5%)
= 12,000 + 6,120 + 4,000
= $22,120
c. Actual Direct Deposit of Payroll.
This refers to the actual amount that will be paid to Employees.
= Total Salary Expense - Taxes
= 80,000 - 22,120
= $57,880
In practice, the gross income (wages or salaries) of an employee is entitled to some compulsory deductions such as States Taxes, Federal Taxes, Federal Payroll tax, Benefit, Insurance Etc.
Here, various information of Tax rate have been given, therefore, the computations of the requirement goes as followsTotal Salary Expense = Number Of Employees * Hourly rate * Hours worked
Total Salary Expense = 100 * $20 * 40
Total Salary Expense = $80,000
Total Withholding from Employee Salaries = Federal Income Taxes + FICA Taxes + States Income Taxes
Total Withholding from Employee Salaries = ($80,000 * 15%) + ($80,000 * 7.65%) + ($80,000 * 5%)
Total Withholding from Employee Salaries = $12,000 + $6,120 + $4,000
Total Withholding from Employee Salaries = $22,120
Actual Direct Deposit of Payroll = Total Salary Expense - Taxes
Actual Direct Deposit of Payroll = $80,000 - $22,120
Actual Direct Deposit of Payroll = $57,880
Missing question includes "Aspen Ski Resorts has 100 employees, each working 40 hours per week and earning $20an hour. Although the company does not pay any health or retirement benefits, one of the perks of working at Aspen is that employees are allowed free skiing on their days off. Federal income taxes are withheld at 15% and state income taxes at 5%. FICA taxes are 7.65% of the first $113,700 earned per employee and 1.45% thereafter. Unemployment taxes are 6.2% of the first $7,000 earned per employee Compute the total salary expense, the total withholdings from employee salaries and the actual direct deposit of payroll for the first week of January"
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Which example best describes reducing risky behavior?
-getting car insurance
-deciding not to buy a car
-only driving during the day
- driving a car at high speeds
Answer: Only driving during the day.
Explanation: This is the correct answer on Edge 2020 (I just took the quiz for it ^-^).
The example that best describes reducing risky behavior is only driving during the day.
What are risky behaviours?Risky behaviours are acts that could bring negative consequences like risks to life, death and injury etc.
Risky behavior can be regarded as behavior that can endanger our life or injure us if we engage in it.
Hence, the example that best describes reducing risky behavior is only driving during the day.
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The following transactions and events occurred during the year. Assuming that this company uses the indirect method to report cash provided by operating activities, indicate where each item would appear on its statement of cash flows by placing an X in the appropriate column.
Statement of Cash Flow Noncash Investing & Financing Activities Not Reported on Statement or in Notes
Operating Activities Investing Activities Financing Activities
a. Declared and paid a cash dividend
b. Recorded depreciation expense
c. Paid cash to settle long-term note payable
d. Prepaid expenses increased in the year
e. Accounts receivable decreased in the year
f. Purchased land by issuing common stock
g. Inventory increased in the year
h. Sold equipment for cash, yielding a loss
i. Accounts payable decreased in the year
j. Income taxes payable increased in the year
Answer: i ii iii iv v
a. Declared and paid a cash dividend X
b. Recorded depreciation expense X
c. Paid cash to settle long-term note payable X
d. Prepaid expenses increased in the year X
e. Accounts receivable decreased in the year X
f. Purchased land by issuing common stock X
g. Inventory increased in the year X
h. Sold equipment for cash, yielding a loss X
i. Accounts payable decreased in the year X
j. Income taxes payable increased in the year X
Note:
i. Operating activities
ii. Investing activities
iii. Financing activities
iv. Non cash Investing & Financing
v. Not reported on statement or Notes
Based on the information given where each item would appear on its statement of cash flows are:
a. Declared and paid a cash dividend.
Statement of cash flow: Financing activities
b. Recorded depreciation expense.
Statement of cash flow: Operating activities
c. Paid cash to settle long-term note payable.
Statement of cash flow: Financing activities
d. Prepaid expenses increased in the year.
Statement of cash flow: Operating activities
e. Accounts receivable decreased in the year.
Statement of cash flow: Operating activities
f. Purchased land by issuing common stock.
Statement of cash flow: Non cash investing and financing activities
g. Inventory increased in the year.
Statement of cash flow: Operating activities
h. Sold equipment for cash, yielding a loss.
Statement of cash flow: Investing activities
i. Accounts payable decreased in the year.
Statement of cash flow: Operating activities
j. Income taxes payable increased in the year.
Statement of cash flow: Operating activities
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Duluth Ranch, Inc. purchased a machine on January 1, 2018. The cost of the machine was $35,000. Its estimated residual value was $11,000 at the end of an estimated 5-year life. The company expects to produce a total of 20,000 units. The company produced 1,300 units in 2018 and 1,750 units in 2019.
Required:
a. Calculate depreciation expense for 2018 and 2019 using the straight-line method.
b. Calculate the depreciation expense for 2018 and 2019 using the units-of-production method.
c. Calculate depreciation expense for 2018 through 2022 using the double-declining balance method.
Answer:
Duluth Ranch, Inc.
a. Depreciation Expense for 2018 and 2019, using the straight-line method:
2018: $24,000/5 = $4,800
2019: $24,000/5 = $4,800
b. Depreciation Expense for 2018 and 2019, using the units-of-production method:
2018 = 1,300 x $1.20 = $1,560
2019 = 1,750 x $1.20 = $2,100
c. Depreciation Expense for 2018 through 2022, using the double-declining balance method:
Depreciation Rate = 100%/5 x 2 = 40%
Beginning Bal. Depreciation Declining balance
2018: $35,000 $14,000 ($35,000 x 40%) $21,000 ($35,000 - 14,000)
2019: $21,000 $8,400 ($21,000 x 40%) $12,600 ($21,000 - $8,400)
2020: $12,600 $1,600 ($12,600 x 40%)* $11,000 ($12,600 - $1,600)
2021: $11,000 $0
2022: $11,000 $0
*NB: The calculated depreciation expense for 2020 is $5,040. But, the balance after depreciation must not be below the residual value. So, only the difference is expensed.
Explanation:
a) Data and Calculations:
Cost of machine = $35,000
Residual value = 11,000
Depreciable amount $24,000
Useful life = 5 years
Straight-line depreciation per year = $24,000/5 = $4,800
Expected production unit = 20,000
Depreciation rate per unit = $24,000/20,000 = $1.20
b) The straight-line method of depreciation simply divides the depreciable amount ($24,000) by the useful life of 5 years to determine a straight-line depreciation expense of $4,800 per year.
c) The unit-of-production method calculates the depreciation rate per unit (Depreciable amount divided by total expected production units) and applies this rate, $1.20, to the total units produced in each period to determine the depreciation expense.
d) The double-declining balance method divides 100% by the useful life of the asset and then multiplies this 2, to obtain the depreciation rate. This rate is then applied to the cost and declining balance each year. The double-declining balance method, initially does not take into cognizance the residual value of the asset. It only considers this salvage value towards the end when it adjusts the depreciation charge for the last year so that the declined balance will equal to the residual value.
Rasheed works for Company A, earning $299,000 in salary during 2019. Assuming he is single and has no other sources of income, what amount of FICA tax will Rasheed pay for the year
Answer:
$13,466
Explanation:
For 2019, the wage limit for Social Security tax is $132900
Thus;
Social Security tax $132,900x 6.2% = $8,239.80
Medicare tax = $299,000 x 1.45% = $4335.50
Additional Medicare Tax ($299,000 - $200000) x 0.9% = $891
therefore,
Amount of FICA Tax = $8239.80 + $4335.50 + $891 = $13,466.30 which is approximately $13,466
When delivering bad news to customers, use an indirect strategy as you would with other bad news messages, and maintain a positive tone. Occasionally, companies disappoint their customers. Whenever possible, these problems should be addressed immediately. Choose the best answer for the following question about handling customer problems.
What is the first step you should take when a problem arises?
1. Call the individual customer.
2. Disguise the problem as a "technical error."
3. Explain to the customer what they did that caused the problem
Answer:
1
Explanation:
Well, the focus of an indirect strategy is to create a new peak of satisfaction, when dealing with a disappointing situation. So the key is leaving a positive tone after all. Since maintaining a regular customer is always cheaper than getting a new one.
So, it's important to have an honest conversation with the customer and and offer a good compensation and provide a follow up until the problem is solved, so that the customer be enchanted by the respect shown. In addition to this, make this a turning point. By doing that the customer will regain confidence.
Price Manufacturing assigns overhead based on machine hours. The Milling Department logs 1,800 machine hours and Cutting Department shows 3,000 machine hours for the period. If the overhead rate is $5 per machine hour, the entry to assign overhead will show a:
Answer and Explanation:
The Journal entry is shown below:-
Work in progress Dr, $24,000
To Manufacturing Overhead $24,000
(Being the overhead assigned is recorded)
For recording this we debited the work in process as it increased the assets and credited the manufacturing overhead for assigning the overhead
Working note
Overhead amount = (Milling Department + Cutting department) × Overhead rate
= (1,800 + 3,000) × $5
= $4,800 × $5
= $24,000
Why would bankers need to see the business plan?
Square Hammer Corp. shows the following information on its 2018 income statement: Sales = $264,000; Costs = $170,000; Other expenses = $7,900; Depreciation expense = $14,500; Interest expense = $13,300; Taxes = $20,405; Dividends = $10,000. In addition, you’re told that the firm issued $4,800 in new equity during 2018 and redeemed $3,300 in outstanding long-term debt. a. What is the 2018 operating cash flow
Answer:
The 2018 operating cash flow is $86,100.
Explanation:
Operating Cash flow is different from Income as it only involves movement in cash.
Thus our first step is to find the Operating Income then adjust it with non-cash items to reach an Operating Cash flow amount.
Sales = $264,000
Less Costs = ($170,000)
Less Other expenses = ($7,900)
Depreciation expense = ($14,500)
Operating Income = $71,600
Adjust for non-cash item - depreciation
Operating Income = $71,600
Add back depreciation = $14,500
Operating Cash flow = $86,100
Interest expenses and taxes are not part of operating income as they arise out of secondary activities of the company.
Conclusion :
The 2018 operating cash flow is $86,100.
As a firm buys more capital and less labor, the marginal physical product of capital __________ and the marginal physical product of labor __________, assuming the law of diminishing marginal returns has set in for each factor.
Answer:
As a firm buys more capital and less labor, the marginal physical product of capital ___decreases_______ and the marginal physical product of labor ___increases______, assuming the law of diminishing marginal returns has set in for each factor.
Explanation:
In Economics, the law of diminishing returns states that when one production input is increased while the other input is held constant, the marginal production per the increasing input will decrease relatively to the marginal production of the fixed input.
Effectively, this economic law recognizes that increasing one input while allowing the other inputs to be constant will produce diminishing increase in total output. This law is also called the principle of diminishing marginal productivity. It is very helpful in decision making to enable management balance production inputs in order to achieve maximum outcomes.
Suppose that in 2017, a typical U.S. student attending a state-supported college bought 10 textbooks at a price of $110 per book and enrolled in 30 credit hours of coursework at a price of $350 per credit hour. In 2018, the typical student continued to purchase 10 textbooks and enroll in 30 credit hours, but the price of a textbook rose to $120 per book, and the tuition price increased to $390 per credit hour. The base year for computing a "student price index" using this information is 2017.
Required:
What is the value of the student price index in 2017? In 2018? Show your work.
Answer:
2017 Price Index is 1002018 Price Index is 111Explanation:
The Price Index for any given Base year is always 100. 2017 is staed to be the base year so it's price index is 100.
2018
The Student Price Index can be calculated using the formula;
SPI = [tex]\frac{cost of basket of goods in the year of interest}{Cost of the basket of goods in the base year} * 100[/tex]
= [tex]\frac{(10 * 120) + (30* 390)}{(10 * 110) + (30 * 350)}[/tex] * 100
= [tex]\frac{12,900}{11,600} * 100[/tex]
= 111.21
= 111
You are developing the project charter for a new project. Which of the following
is NOT part of the enterprise environmental factors?
✓
A) Lessons learned from previous projects
B) The work authorization system
C) Government and industry standards that affect your project
D) Knowledge of which departments in your company typically work on projects
Answer: A) Lessons learned from previous projects
Explanation:
Enterprise Environmental Factors (EEF) refers to all environmental factors that have a say in whether a project is successful or not. They include both internal factors such as company infrastructure, knowledge and capability (departments with the knowledge on project design and implementation) and internal project authorization systems as well as external factors such as Government standards and market conditions.
Lessons learned from previous projects, while important, are not included in this list and are not Enterprise Environmental Factors.
Data from the financial statements of Crafty Crafts and Hobbies, Inc. are presented below (in millions): Crafty Crafts Hobbies, Inc. Total liabilities, 2016 $31,957 $25,461 Total liabilities, 2015 36,104 30,046 Total assets, 2016 46,186 32,872 Total assets, 2015 46,514 35,208 Net sales, 2016 161,466 81,702 Net income, 2016 1,040 1,766 To the nearest hundredth of a percent, what is the 2016 return on assets ratio for Crafty Crafts
Answer:
Crafty Crafts:
Return on Assets Ratio = Net Income/Average Assets x 100
= $1,040/46,350 x 100
= 2.2%
Explanation:
a) Data
Crafty Crafts Hobbies, Inc.
Total liabilities, 2016 $31,957 $25,461
Total liabilities, 2015 36,104 30,046
Total assets, 2016 46,186 32,872
Total assets, 2015 46,514 35,208
Net sales, 2016 161,466 81,702
Net income, 2016 1,040 1,766
b) Average Assets:
Crafty Crafts = (2016 + 2015 assets)/2 = ($46,186 + 46,514)/2 = $46,350
c) The Return on Assets Ratio: This financial performance ratio shows how much of the earnings is generated from the assets of the company in a particular period. It shows the efficiency of management to generate profit from the assets. Usually, the average assets value is used to even the variations over the period.
You want to have $18,000 in 9 years for a dream vacation. If you can earn an interest rate of .5 percent per month, how much will you have to deposit today
Answer:
$10,503.59
Explanation:
This question requires us to find how much you have to deposit today if:
Fv = 18,000
Time = 9 years
PV= fv/(1 + i)^n
N = 9 X 12 = 108
I/y = 0.5%
PV = $18,000 / 1.005^108
= $10,503.59
Therefore what you have to deposit today is $10,503.59
During the first month of the year, the Boise plant produced 92,000 belts. Actual leather purchased was 287,500 strips at $3.60 per strip. There were no beginning or ending inventories of leather. Actual direct labor was 78,200 hours at $12.50 per hour. Required: 1. Compute the costs of leather and direct labor that should be incurred for the production of 92,000 leather belts.
Answer:
1. Cost of Leather
Leather strips cost $12 as a standard for labor.
Cost of Leather = $12 * quantity
Cost of Leather = $12 * 92,000
= $1,104,000
2. DIrect Labor Cost
Costs $9 per the amount of time it takes to produce the belts.
Labor Cost = 9 * 92,000
Labor Cost = $828,000
At the beginning of 2016, EZ Tech Company's Accounts Receivable balance was $140,000, and the balance in Allowance for Doubtful Accounts was $2,350 (Cr.). EZ Tech's sales in 2016 were $1,050,000, 80% of which were on credit. Collections on account during the year were $670,000. The company wrote off $4,000 of uncollectible accounts during the year. Prepare summary journal entry related to the (a) sale during 2016.
Answer:
EZ Tech Company
Journal Entries:
Debit Cash Account $210,000
Credit Sales Revenue $210,000
To record sale of goods for cash.
Debit Accounts Receivable $840,000
Credit Sales Revenue $840,000
To record sale of goods on account.
Debit Cash Account $670,000
Credit Accounts Receivable $670,000
To record the receipt of cash on account.
Debit Uncollectible Expense $4,000
Credit Accounts Receivable $4,000
To record direct write-off of uncollectibles.
Explanation:
a) Accounts Receivable:
Beginning balance $140,000
Sales on credit 840,000
Cash receipts -670,000
Uncollectible -4,000
Ending balance $306,000
b) The direct write-off of the uncollectible accounts could have also been treated through the Allowance for Doubtful Accounts by debiting the account before crediting it with the Uncollectible Expense account. Since there is no instruction to the contrary, we have used the direct method instead, for simplicity.
Ward Doering Auto Sales is considering offering a special service contract that will cover the total cost of any service work required on leased vehicles. From experience, the company manager estimates that yearly service costs are approximately normally distributed, with a mean of $150 and a standard deviation of $25.
a. If the company offers the service contract to customers for a yearly charge of $200, what is the probability that any one customer’s service costs will exceed the contract price of $200?
b. What is Ward’s expected profit per service contract?
Answer:
a. The probability that any one customers service costs will exceed the contract price of $200 is 0.0228
b. Warda expected profit per service contract is $50
Explanation:
a. In order to calculate the probability that any one customers service costs will exceed the contract price of $200 we would have to calculate first the z value as follows:
z=x-μ/σ
z=$200-$150/$25
z=2
Therefore, probability that any one customers service costs will exceed the contract price of $200 is p(x>$200)=p(z>2)
=1-p(z≤2)
=1-0.9772
=0.0228
The probability that any one customers service costs will exceed the contract price of $200 is 0.0228
b. To calculate Warda expected profit per service contract we would have to make the following calculation:
Warda expected profit per service contract=service charge per contract-expected cost
Warda expected profit per service contract=$200-$150
Warda expected profit per service contract=$50
Warda expected profit per service contract is $50
Brokers and sales agents who submit required criminal background information and fingerprints to TREC when seeking their original license:________.
Answer: Will Make sane submission when their liscence is expired
Explanation:
Institutions are very careful this days with documents and information they receive from organization, and so advise this organizations to file in their criminal records so they know what they have done and can track whatever sheddy deals they did in the past. This process is also carried out when renewing liscence.
A push strategy is favorable when a company Multiple Choice wants to advertise consumer goods. has long distribution channels. needs to explain complex new products. faces high inflation rates. has sufficient print or electronic media available.
Answer:
wants to advertise consumer goods.
The push strategy of marketing helps if the company is new, or if the company wants to advertise a new consumer good.
The new company or the new consumer good is probably not well-known among consumers, and for this reason, pushing the product to them is likely to be more helpful in obtaining sales than a pull strategy.
Needs to explain complex new products.
Complex products like some consumer electronics often need to be sold under a push strategy in which the salesperson explains the product in detail to the potential customer.
This is done because otherwise, consumers may feel intimidated by the complexity of the product, and desist from acquiring it.
During 2018, its first year of operations, Pave Construction provides services on account of $142,000. By the end of 2018, cash collections on these accounts total $101,000. Pave estimates that 25% of the uncollected accounts will be bad debts.
Required:
Record the adjustment for uncollectible accounts on December 31, 2018.
Answer:
Dr Bad Debt Expense 10,250
Cr Allowance for Uncollectible Accounts 10,250
Explanation:
Preparation of the Journal entry to Record the adjustment for uncollectible accounts on for Pave Construction
Since we were told that the company provides services on account of the amount of $142,000 in which by the end of the year 2018, the cash collections total the amount of $101,000 which means we have to less $101,000 from $142,000 which gave us $41,000.
We were as told that Pave estimates that 25% of the uncollected accounts will be bad debts this means we have to find the 25% of $41,000 which gave us $10,250.
Therefore the transaction will be recorded as:
Dr Bad Debt Expense 10,250
Cr Allowance for Uncollectible Accounts 10,250
($41,000 x 25%)
Service provided $142,000- Cash collection $101,000=$41,000
Boatler Used Cadillac Co. requires $890,000 in financing over the next two years. The firm can borrow the funds for two years at 11 percent interest per year. Ms. Boatler decides to do forecasting and predicts that if she utilizes short-term financing instead, she will pay 7.25 percent interest in the first year and 12.55 percent interest in the second year. Assume interest is paid in full at the end of each year.
A. Determine the lot al two-year interest cost under each plan.
Interest Cost
Long term fixed-rate plan
Short term variable-rate
B. Which plan is less costly?
1. Long term fixed-rate plan
2. Short-term variable-rate plan
Answer:
A. Total two-year interest cost under long term fixed-rate plan is $195,800; while total two-year interest cost under short term variable-rate is $176,220.
B. Short-term variable-rate plan is less costly.
Explanation:
A. Determine the total two-year interest cost under each plan.
This can be determined for each of the plan as follows:
For Long term fixed-rate plan
Total two-year interest cost under long term fixed-rate plan = Amount required * Interest rate per year * Number of years = $890,000 * 11% * 2 = $195,800
For Short term variable-rate
First year interest cost under short term variable-rate = Amount required * First year interest rate = $890,000 * 7.25% = $64,525
Second year interest cost under short term variable-rate = Amount required * Second year interest rate = $890,000 * 12.55% = $111,695
Total two-year interest cost under short term variable-rate = First year interest cost + Second year interest cost = $64,525 + $111,695 = $176,220
Therefore, we have:
Interest Cost
Long term fixed-rate plan $195,800
Short term variable-rate $176,220
B. Which plan is less costly?
Since the total two-year interest cost under short term variable-rate of $176,220 is less than $195,8000 total two-year interest cost under long term fixed-rate plan, the Short-term variable-rate plan is therefore less costly.