Answer:
$12,200
Explanation:
Calculation to determine the amount of interest expense was recorded for the period of January 1 to April 30, 2018
Interest expense=$305,000*12%*4/12
Interest expense=$12,200
Therefore the amount of interest expense was recorded for the period of January 1 to April 30, 2018 is $12,200
Which of the following is NOT an identified criterion of a good brand name? Group of answer choices distinctive or unique easily pronounceable extendable all of the above
Answer: All of the above
Explanation:
Brand name refers to the brand element through which a customer can be able to identify and differentiate a particular product from the other products.
A good brand name should be unique, easy to pronounce, extendable, give an idea about the qualities and benefits of the product, capable of registration and legal protection, should not give a bad image etc.
Therefore, the correct option is "All of the above".
Last year "ABC" Company had $121646 of assets, $76058 of sales, $19170 of net income, and an equity multiplier of 1.81369. The new CFO believes the firm has excessive fixed assets and inventory that could be sold, enabling it to reduce its total assets to $99391, Sales, costs and net income would not be affected, and the firm would maintain the equity multiplier at the same level (1.81369). By how much would the reduction in assets will change the ROE value?
Answer:
ABC Company
The reduction in assets will change the ROE value by 6% increase, from 29% to 35%.
Explanation:
a) Data and Calculations:
Equity multiplier = total assets divided by stockholders equity
Last year's figures:
Assets = $121,646
Sales = $76,058
Net income = $19,170
Equity multiplier = 1.81369
Equity = Assets/Equity multiplier
= $67,071 ($121,646/1.81369)
Return on equity = $19,170/$67,071 * 100
= 28.6%
= 29%
New figures:
Assets reduced to $99,391
Sales = $76,058
Net income = $19,170
Equity multiplier = 1.81369
Equity = $54,800 ($99,391/1.81369)
Return on equity = $19,170/$54,800 * 100
= 35%
b) The reduction in assets changes the ROE value from 29% to 35%.
Knowledge Check 01 Feline Watch Company makes wrist watches out of silver metal sheets. Feline sold 200 watches in the month of June. It projects July and August sales to be 400 and 600 respectively. The company`s policy is to have 50% of next month`s sales in inventory. If the June ending inventory of watches is 200, how many watches must be produced in July
Answer:
the number of watches to be produced in July is 500
Explanation:
The calculation of the number of watches to be produced in July is given below;
Units Expected to be sale 400
Add: Desired ending inventory 300 (50% of 600)
Total available 700
Less: Beginning Inventory -200
Units to be produced 500
Hence, the number of watches to be produced in July is 500
Home Bepot Inc. has a cost of equity of 11.3 percent. The company has an aftertax cost of debt of 4.9 percent, and the tax rate is 40 percent. If the company's debt–equity ratio is .73, what is the weighted average cost of capital?
Answer: 8.60%
Explanation:
Weighted Average cost of capital = (Cost of equity * Weight of equity) + (After tax cost of debt * Weight of debt)
Weight of debt = Debt-equity ratio / (1 + Debt-equity ratio)
= 73% / (1 + 73%)
= 42.1965%
Weight of Equity = 1 / (1 + Debt - equity ratio)
= 1 / 1.73
= 57.8035%
WACC = (11.3% * 57.8035%) + (4.9% * 42.1965%)
= 8.60%
Flow Company has provided the following information for the year ended December 31, 2019: Cash paid for interest, $22,500 Cash paid for dividends, $6,500 Cash dividends received, $4,500 Cash proceeds from bank loan, $34,000 Cash purchase of treasury stock, $13,500 Cash paid for equipment purchase, $29,500 Cash received from issuance of common stock, $39,500 Cash received from sale of land with a $34,500 book value, $27,000 Acquisition of land costing $53,500 in exchange for preferred stock issuance. Payment of $125,000 note payable by exchanging used machinery with a $79,500 book value and $125,000 fair value How much was Flow's net cash flow from investing activities
Answer:
$2,500
Explanation:
Net Cash flow from investing activities
Particulars Amount
Cash proceeds from sale of Land $27,000
Cash Paid for Equipment Purchase -$29,500
Net Outflow from investing activities ($2,500)
a. A new operating system for an existing machine is expected to cost $616,000 and have a useful life of six years. The system yields an incremental after-tax income of $180,000 each year after deducting its straight-line depreciation. The predicted salvage value of the system is $40,000.
b. b. A machine costs $440,000, has a $32,000 salvage value, is expected to last eight years, and will generate an after-tax income of $90,000 per year after straight-line depreciation. Assume the company requires a 12% rate of return on its investments.
Required:
Compute the net present value of each potential investment.
Answer:
a. Net present value = $539,013.67
b. Net present value = $273,361.47
Explanation:
a. A new operating system for an existing machine is expected to cost $616,000 and have a useful life of six years. The system yields an incremental after-tax income of $180,000 each year after deducting its straight-line depreciation. The predicted salvage value of the system is $40,000.
Annual depreciation = (Expected machine cost – Predicted salvage value) / Number of useful life = ($616,000 - $40,000) / 6 = $96,000
Annual cash inflows = Annual incremental after-tax income + annual depreciation = $180,000 + $96,000 = $276,000
Present value of the annual cash inflow = Annual cash inflows * ((1 - [1 / (1 + required rate of return)]^Number of years) / required rate of return) = $276,000 * ((1 - [1 / (1 + 0.12)]^6) / 0.12) = $276,000 * 4.11140732352233 = $1,134,748.42
Present value of predicted salvage value = Predicted salvage value / (1 + required rate of return)^Number of years = $40,000 / (1 + 0.12)^6 = $20,265.24
Net present value = Present value of the annual cash inflow + Present value of predicted salvage value - Expected machine cost) = $1,134,748.42 + $20,265.24 - $616,000 = $539,013.67
b. A machine costs $440,000, has a $32,000 salvage value, is expected to last eight years, and will generate an after-tax income of $90,000 per year after straight-line depreciation.
Annual depreciation = (Machine cost – Salvage value) / Number of useful life = ($440,000 - $32,000) / 8 = $51,000
Annual cash inflows = Annual incremental after-tax income + annual depreciation = $90,000 + $51,000 = $141,000
Present value of the annual cash inflow = Annual cash inflows * ((1 - [1 / (1 + required rate of return)]^Number of years) / required rate of return) = $141,000 * ((1 - [1 / (1 + 0.12)]^8) / 0.12) = $141,000 * 4.96763976683859 = $700,437.21
Present value of salvage value = Salvage value / (1 + required rate of return)^Number of years = $32,000 / (1 + 0.12)^8 = $12,924.26
Net present value = Present value of the annual cash inflow + Present value of salvage value - Machine cost) = $700,437.21 + $12,924.26 - $440,000 = $273,361.47
Assume a $1,000 Treasury bill is quoted to pay 8% and matures in 3 months. 1. How much interest would an investor receive? (10 pts)
Answer:
i dont know
Explanation:
Alyssa finds a job description for an interesting retail position. The job description indicates exactly what department of the store she would be responsible for and what her duties would be. The ad describes good opportunities for advancement within the retail area, so she could become the managing retail director for her department. However, she would not be able to move into finance or production. This is an example of which organizational strategy?
Answer:
Work specialization
Explanation:
From the question, we are informed about Alyssa who finds a job description for an interesting retail position. The job description indicates exactly what department of the store she would be responsible for and what her duties would be. The ad describes good opportunities for advancement within the retail area, so she could become the managing retail director for her department. However, she would not be able to move into finance or production. This is an example of Work specialization organizational strategy. Work specialization can as well be regarded as division of labor, it can be explained as the degree to which individual tasks is divided into separate jobs by an organization.The advantages of work specialization is that it helps Employees to become
expert to some extent of degree as regards their specific task, another one is Higher levels of productivity.
If the French bank Société Générale reported its 2019 net income was 23,561 million euros and its operating expenses totaled 16,016
million euros, what was its gross profit? (Enter your answer in millions of euros.)
Gross Profit
million euros
Answer:
39,577 million euros
Explanation:
Calculation to determine the what was its gross profit
Using this formula
Gross profit=Net income+Operating expenses
Let plug in the formula
Gross profit=23,561 million +16,016 million
Gross profit=39,577 million euros
Therefore gross profit will be 39,577 million euros
Vaughn Manufacturing has a materials price standard of $2.00 per pound. 4900 pounds of materials were purchased at $2.20 a pound. The actual quantity of materials used was 4900 pounds, although the standard quantity allowed for the output was 3700 pounds. Vaughn Manufacturing's materials quantity variance is
Answer:
$2,400 Unfavourable
Explanation:
Direct material quantity variance = (Standard quantity - Actual quantity) × Standard cost
Given that:
Standard quantity = 3,700 pounds
Actual quantity = 4,900 pounds
Standard cost = $2
Therefore,
Direct materials quantity variance
= (3,700 - 4,900) × 2
= - $2,400
= $2,400 Unfavourable
The difference between the standard and actual quantity is negative. We used more pounds than expected, hence variance will be unfavourable.
Crane Company has 900 shares of 4%, $100 par cumulative preferred stock outstanding at December 31, 2018. No dividends have been paid on this stock for 2017 or 2018. Dividends in arrears at December 31, 2018 totala) $400.b) $3600.c) $7200.d) $0.
Answer:
c) $7200
Explanation:
Preference dividends have preference when it comes to payment of dividends.
This means that we pay the Preference Stock holders their dividend (which is fixed) and there after the remainder is paid up to the Common Stockholders
Preference dividend = 900 shares x $100 x 4 % = $3600
When Preference Stock is Cumulative, it means that all previous dividends in arrears have to be paid up before any current year distributions are made.
2018
Cumulative Preference dividend = $3600 (2017) + $3600 (2018) = $7200
therefore,
Dividends in arrears at December 31, 2018 total $7200
Crestfield leases office space. On January 3, the company incurs $12,000 to improve the leased office space. These improvements are expected to yield benefits for 10 years. Crestfield has 4 years remaining on its lease. What journal entry would be needed to record the expense for the first year related to the improvements
Answer:
Debit Amortization Expense $3,000; credit Accumulated Amortization $3,000.
Explanation:
Based on the information given the appropiate journal entry that would be needed to record the expense for the first year related to the improvements will be
Debit Amortization Expense $3000
Credit Accumulated Amortization-Leasehold Improvements $3000
(Amortization Expense = 12000/4 = $3000)
(To record the expense for the first year)
The competitive industry of children's pajamas is in long-run equilibrium when a new government safety regulation raises the average cost of children's pajamas by $2 per pair. If this is a constant cost industry, then what happens to the price of children's pajamas in the long run?
Answer:
Long-run profits will remain the same.
Explanation:
A perfect competition is characterized by many buyers and sellers of homogenous goods and services. Market prices are set by the forces of demand and supply. There are no barriers to entry or exit of firms into the industry.
In the long run, firms earn zero economic profit. If in the short run firms are earning economic profit, in the long run firms would enter into the industry. This would drive economic profit to zero.
Also, if in the short run, firms are earning economic loss, in the long run, firms would exit the industry until economic profit falls to zero.
g On January 1, 2019 FirstEnergy Corp issued 19,000 shares of $100 par, 8%, cumulative, preferred stock for $110 per share. No dividends have been paid to preferred or common shareholders. What amount of dividends will a preferred shareholder owning 100 shares receive in 2021 if FirstEnergy pays $1,000,000 in dividends
Answer: $2640
Explanation:
Based in the information given,
Par value of preferred stock = $110
Rate of dividend = 8%
Therefore, the preferred dividend per share will be:
= $110 × 8%
= $110 × 0.08
= $8.80
It should be noted that the cumulative dividend from 2019 to 2021 will be for 3 years. Therefore, the dividend to 100 preferred shareholder in 2021 will be:
= 100 × $8.80 × 3
= $2640
Additional information about the company follows: Hubs require $24 in direct materials per unit, and Sprockets require $17. The direct labor wage rate is $14 per hour. Hubs require special equipment and are more complex to manufacture than Sprockets. The ABC system has the following activity cost pools: Estimated Activity Activity Cost Pool (Activity Measure) Overhead Cost Hubs Sprockets Total Machine setups (number of setups) $ 27,000 125 100 225 Special processing (machine-hours) $ 258,000 4,300 0 4,300 General factory (organization-sustaining) $ 124,800 NA NA NA Required: 1. Compute the activity rate for each activity cost pool. 2. Determine the unit product cost of each product according to the ABC system.
Question Completion:
Fogerty Company makes two products, titanium Hubs and Sprockets. Data regarding the two products follow:
Direct Labor Production
hours per unit Units
Hubs 0.7 27,000
Sprockets 0.3 59,000
Answer:
Fogerty Company
The unit product cost of each product according to the ABC system:
Hubs Sprockets
Unit production cost $46.22 $22.46
Explanation:
a) Data and Calculations:
Hubs Sprockets
Direct materials per unit $24 $17
Direct labor rate per hour $14 $14
Direct labor per unit $9.80 $4.20 ($14 *0.3)
Estimated Activity Activity Cost Pool Overhead Hubs Sprockets Total
(Activity Measure) Cost
Machine setups (number of setups) $ 27,000 125 100 225
Special processing (machine-hours) $ 258,000 4,300 0 4,300
General factory (organization-sustaining) $ 124,800 NA NA NA
Total overhead expenses $409,800
Activity rate:
Machine setups = $120 ($27,000/225)
Special processing = $60 ($258,000/4,300)
General factory = $62,400 ($124,800/2)
2. The unit product cost of each product according to the ABC:
Overhead costs:
Hubs Sprockets Total
Machine setups $15,000 $12,000 $27,000
Special processing 258,000 0 258,000
General factory 62,400 62,400 124,800
Total overhead $335,400 $74,400 $409,800
Units produced 27,000 59,000 86,000
Overhead per unit $12.42 $1.26
Hubs Sprockets
Direct materials per unit $24.00 $17.00
Direct labor per unit $9.80 $4.20
Overhead cost per unit $12.42 $1.26
Unit production cost $46.22 $22.46
Charleston Inc. acquired 75% of Savannah Manufacturing on January 4, 2020. During 2020, Charleston sold Savannah $460,000 of goods, which had cost $380,000. Savannah still owned 20% of the goods at the end of the year. In 2021, Charleston sold goods with a cost of $520,000 to Savannah for $700,000, and Savannah still owned 15% of the goods at year-end. What amount of intra-entity gross profit should be deferred in 2021
Answer:
Amount of profit to be deferred = $27,000Explanation:
The intra-entity gross profit that needs to be deferred can be calculated as follows:
In 2021:
The amount of price on goods sold = $700,000
The actual cost price = $520,000
Less: $180,000
Amount of profit to be deferred = Profit × percentage of goods at the year-end (2021)
Amount of profit to be deferred = $180,000 × 15%
Amount of profit to be deferred = $27,000The Robinson Company reported net income of $90,000 in 2010. Additional information follows:Depreciation expense$18,000Loss on sale of equipment 10,000 Gain on sale of land 17,000 Given just this information, what was the Robinson Company's net cash provided by operating activities in 2010
Answer:
$101,000
Explanation:
With regards to the above information , the net cash provided by operating activities is computed as;
Net income
$90,000
Add:
Depreciation expense
$18,000
Add:
Loss on sale of equipment
$10,000
Less:
Gain on sale of land
($17,000)
Net cash provided by operating activities
$101,000
Therefore, Robinson company's net cash provided by operating activities is 2010 is $101,000
What type of data do traditional AISs generate as part of processing transactions and business events
Sandhill Co. purchased machinery that cost $2800000 on January 4, 2019. The entire cost was recorded as an expense. The machinery has a 9-year life and a $180000 residual value. The error was discovered on December 20, 2021. Ignore income tax considerations.
Before the correction was made, and before the books were closed on December 31, 2013, retained earnings was understated by:____.
Answer:
$2,217,777.78
Explanation:
The computation is shown below:
The accumulated depreciation amount till 31 Dec 2013
= ($2,800,000 - $180,000) ÷ 9 × 2
= $582,222.22
Now the expenses recorded as the purchase is $2,800,000
so,
The Retained earnings understated by
= $2,800,000 - $582,222.22
= $2,217,777.78
Scoring: Your score will be based on the number of correct matches. There is no penalty for incorrect or missing matches. Match the most probable matching method to the costs listed below.
1. Dividends
2. Prepaid Insurance
3. Unearned Rent
4. Fees Earned
5. Patents
A. Stockholders' Equity
B. Revenue
C. Expenses
D. Assets
E. Liabilities
Answer and Explanation:
The matching is as follows:
1. Dividends = A. Stockholders' Equity
2. Prepaid Insurance = D. Assets
3. Unearned Rent = E. Liabilities
4. Fees Earned = B. Revenue
5. Patents = D. Assets
In this way it should be matched
Like the dividend is come under equity so it is shown under stockholder equity
likewise it is applied for the other items
If an American firm opens a production facility in India, the total value of the production will be included in the national income of the United States. consumption of fixed capital for India. gross domestic product of India. gross domestic product of the United States.
Answer:
gross domestic product of India
Explanation:
Gross domestic product is the total sum of final goods and services produced in an economy within a given period which is usually a year
GDP records the final good and services produced within a country's borders
GDP calculated using the expenditure approach = Consumption spending by households + Investment spending by businesses + Government spending + Net export
17. Calculating Future Values Streamsong Credit Bank is offering 4.7 percent compounded daily on its savings accounts. If you deposit $4,750 today, how much will you have in the account in 5 years
Answer:
Future value = $5912.87
Explanation:
Below is the calculation:
Interest rate = 4.7%
Present value of deposit = $4750
Time period, n = 5 years
Future value = Present value ( 1 + interest rate)^n
Future value = 4750 ( 1 + (4.7%/365)^5*365
Future value = 4750 (1 + 0.00012)^1825
Future value = $5912.87
On January 1, a machine with a useful life of 4 years and a salvage value of $20000 was purchased for $84000. What is the depreciation expense for year 2 under straight-line depreciation
Answer:
Annual depreciation (2nd year)= $16,000
Explanation:
Giving the following information:
Purchase price= $84,000
Salvage value= $20,000
Useful life= 4 years
To calculate the annual depreciation, we need to use the following formula:
Annual depreciation= (Purchase price - salvage value)/estimated life (years)
Annual depreciation= (84,000 - 20,000) / 4
Annual depreciation= $16,000
Investing activities do not include the: Multiple Choice Purchase of plant assets. Loaning of money in exchange for notes receivable. Issuance of common stock. Sale of plant assets. Sale of short-term investments other than cash equivalents.
Answer:
Issuance of common stock.
Explanation:
In the fall of 2008, AIG, the largest insurance company in the world at the time, was at risk of defaulting due to the severity of the global financial crisis. As a result, the U.S. government stepped in to support AIG with large capital injections and an ownership stake. How would this affect, if at all, the yield and risk premium on AIG corporate debt before and after U.S. Government support
• Initially default risk increases, yield increases, price of AIG decreases
• After government intervention, default decreases, yield decreases, price of AIG increases
In a Harvard print journal and ejournal article references for a reference list, which elements, if any, are placed in round brackets?
Author and journal title.
Author and issue number.
Year of publication and issue number, if there is one.
Article title and year of publication.
Answer: Year of publication and issue number, if there is one.
Explanation:
There are quite a number of referencing style conventions available in the world today with some of the most prominent being the APA style, MLA and the Chicago style.
Harvard has its own referencing style that may not be as popular as the above but is very well known nonetheless. When referencing using the Harvard style and the year of publication and issue number needs to be included in a print or e-journal reference, it is to be placed in a round bracket. If there isn't any then there is no need.
The beauty of an economic model comes from:______.
a. its ability to represent a complex reality without any simplification.
b. its ability to make clear predictions that are consistent with reality.
c. its simplicity in presenting the essential elements of an otherwise complex reality.
d. b and c.
Answer:
D
Explanation:
An economic model is a simplified abstraction of reality. An economic model aims to present economic reality in a simplified form. it also aims to make accurate prediction consistent with reality.
for example, the law of demand is an example of an economic model.
According to the law of demand, the higher the price, the lower the quantity demanded and the lower the price, the higher the quantity demanded.
this economic model is true because rational human beings tend to purchase more of normal goods when the price is lower than when the price is higher.
Hart Attorney at Law experienced the follwoing transactions in 2016, the first year of operations:
1. Accepted $36,000 on 4/1/16, as a retainer for services to be performed evenly over the next 12 months
(2) Performed legal services for cash of $54,000
(3) Purchased $2,800 of office suppies on account
(4) Paid $2,400 of the amount due on accounts payable
(5) Paid a cahs dividend to the stockholders of $5,000
(6) Paid cash for operationg expenses of $31,000
(7) Determined that at the end of the accounting period $200 of office supplies remained on hand
(8) On 12/31/16, recognized the revenue that had been earned for services performed in accordance with Transaction 1
Problem: Show the effects of the events on the fianncial statements using a horizontal statement model.
Answer:
The accounting equation therefore holds as follows:
Total assets = Total liabilities + Total Stockholders’ Equity = $51,800
Explanation:
Note: See the attached excel file for the horizontal statement model showing the effects of the events on the financial statements.
The following calculations are made in the attached excel:
For Event 7, we have:
Office supplies = Amount of office supplies purchased - Office supplies remained on hand = $2,800 - $200 = $2,600
For Event 8, we have:
Amount of revenue that is recognized = Number of months from April 1 to December 31 * (Amount accepted on April 1 / Number of months in year) = 9 * ($36,000 /12) = 9 * $3,000 = $27,000
Also, the following can be obtained from the attached excel file:
Total assets = $51,600 + $200 = $51,800
Total liabilities = $400 + $9,000 = $9,400
Total Stockholders’ Equity = $42,400
Total liabilities + Total Stockholders’ Equity = $9,400 + $42,400 = $51,800
The accounting equation therefore holds as follows:
Total assets = Total liabilities + Total Stockholders’ Equity = $51,800
On April 19, 2021, Millipede Machinery sold a tractor to Thomas Hartwood, accepting a note promising payment of $120,000 in five years. The applicable effective interest rate is 7%.
Required:
What amount of sales revenue would Millipede recognize on April 19, 2021, for the Hartwood transaction?
Answer:
$85,558.34
Explanation:
The Transaction Price will be the Present Value of the amount to be received in 5 years.
We can simply calculate the Present Value (PV) using a financial calculator as follows :
FV= - $120,000
I = 7 %
N = 5
P/YR = 1
PMT = $0
PV = ?
Entering the data as above gives a Present (PV) as $85,558.34
therefore,
Millipede will recognize an amount of sales revenue of $85,558.34
Which of the following statements are TRUE? A firm's entry/exit decision is about: I. whether profits are positive or negative now. II. whether the stream of future profits is positive or negative. III. government regulations.
Answer: Whether profits are positive or negative now
II. Whether the stream of future profits is positive or negative
Explanation:
It should be noted that In a perfectly competitive industry in the long run, there'll be new firms that will enter the market when the already existing firms are making profit.
In the case of a loss, there'll be an exit. Therefore, the true is that a firm's entry or exit decision is about whether profits are positive or negative now and also whether the stream of future profits is positive or negative.
Therefore, the correct option is and II