Oriole Inc. has completed the purchase of new Dell computers. The fair value of the equipment is $890,082. The purchase agreement specifies an immediate down payment of $216,000 and semiannual payments of $83,108 beginning at the end of 6 months for 5 years. What is the interest rate, to the nearest percent, used in discounting this purchase transaction
Answers
Answer:
Annual rate = 8%Semiannual rate = 4%Explanation:
The present value of the amount that is to be paid periodically:
= Fair value - Down payment
= 890,082 - 216,000
= $674,082
This is a semi annual payment so the variables need to be converted as such:
Period = 5 years * 2 = 10 semi annual periods
This payment is constant so it is an annuity.
Present value of annuity = Annuity * Present value interest factor, 10 periods, x percent
674,082 = 83,108 * Present value interest factor, 10 periods, x percent
Present value interest factor, 10 periods, x percent = 674,082 / 83,108
= 8.1109
If checked in the PVIFA Table, 8.1109 at 10 periods corresponds with 4%.
The annual interest rate is therefore:
= 4% * 2
= 8%
Related Questions
Before year-end adjusting entries, Dunn Company's account balances at December 31, 2010, for accounts receivable and the related allowance for uncollectible accounts were $600,000 and $45,000, respectively. An aging of accounts receivable indicated that $62,500 of the December 31 receivables are expected to be uncollectible. The net realizable value of accounts receivable after adjustment is
Answers
Answer: $537500
Explanation:
The net realizable value of accounts receivable after adjustment will be the difference between the account receivable at December 31st and the expected uncollectible. This will be:
= $600,000 - $62,500
= $537500
Therefore, the answer is $537500
A. You can distinguish the various types of bonds by their terms of contract, pledge of collateral, and so on. Identify the type of bond based on each description given in the table that follows:
Description Type of Bond
These bonds are collateralized securities with first claims in the event of bankruptcy.
These bonds are not backed by any physical collateral. They are backed by the reputation and creditworthiness of the issuing company.
These bonds are considered the riskiest of all corporate bonds and thus offer the highest interest rates.
B. Based on your understanding of bond ratings and bond-rating criteria, which of the following statements is true?
a. An indenture is a legal document that details the rights of bondholders. If the indenture includes a sinking funds provision, the bond will have more default risk.
b. An indenture is a legal document that details the rights of bondholders. If the indenture includes a sinking funds provision, the bond will have less default risk.
c. In 2008, the United States began to witness one of the worst recessions since the 1930s. The collapse of the housing bubble in 2006 led to a massive decline in real estate prices, affecting consumers and institutions, especially banking and financial entities. Severe liquidity shortfalls in the United States as well as other global markets led to a serious credit crisis. During the credit crisis of 2008–2009, several banks and other businesses went through a reorganization process or were forced to liquidate. Consider the following example:
C. In January 2009, American electronics retailer Circuit City Inc. closed all of its stores and sold all of its merchandise.
This is an example of:_______.
a. Liquidation
b. Reorganization
Answers
Air Tampa has just been incorporated, and its board of directors is grappling with the question of optimal capital structure. The company plans to offer commuter air services between Tampa and smaller surrounding cities. Air Tampa believes it would have the same business risk as Jaxair, which is an airline that has been around for a few years and that has had zero growth. Jaxair's market-determined beta is 1.8, and it has a current market value debt ratio (total debt to total assets) of 45% and a federal-plus-state tax rate of 25%. Air Tampa expects to have investment tax credits when it begins business, which reduces its federal-plus-state tax rate to 15%. Air Tampa's owners expect that the total book and market value of the firm's stock, if it uses zero debt, would be $14 million. Air Tampa's CFO believes that the MM and Hamada formulas for the value of a levered firm and the levered firm's cost of capital should be used because zero growth is expected.
Required:
a. Estimate the beta of an unlevered firm in the commuter airline business based on Jaxair's market-determined beta.
b. Now assume that rd= rRF= 10% and that the market risk premium RPM for an unlevered commuter airline. 5%. Find the required rate of return on equity
c. Air Tampa is considering three capital structures: (1) $2 million debt, (2) $4 million debt, and (3) $6 million debt. Estimate Air Tampa's rs for these debt levels.
Answers
Answer:
a. Unlevered beta = 1.12
b. Required rate of return on equity = 15.60%
c-1. rs = 16.37%
c-2. rs = 17.40%
c-2. rs = 18.81%
Explanation:
a. Estimate the beta of an unlevered firm in the commuter airline business based on Jaxair's market-determined beta.
Levered beta = Unlevered beta * (1 + (D/S)(1 - T))
Therefore, we have:
Unlevered beta = Levered beta / (1 + (D/S)(1 - T)) .............. (1)
Where:
Levered beta = Jaxair's market-determined beta = 1.8
D = Debt ratio = 45%, or 0.45
S = Equity ratio = 1 - D = 1 - 0.45 = 0.55
T = Federal-plus-state tax rate = 25%, or 0.25
Substituting the values into equation (1), we have:
Unlevered beta = 1.8 / (1 + (0.45/0.55)(1 - 0.25)) = 1.12
b. Now assume that rd= rRF= 10% and that the market risk premium RPM for an unlevered commuter airline. 5%. Find the required rate of return on equity
Required rate of return on equity = ro = Rf + beta(Rm - Rf) .............. (2)
Where;
rd = Rf = 10%, or 0.10
beta = Unlevered beta = 1.12
(Rm - Rf) = market risk premium = RPM for an unlevered commuter airline = 5%, or 0.05
Substituting the values into equation (2), we have:
Required rate of return on equity = ro = 10% + 1.12(5%) = 10% + (1.12 * 5%) = 15.60%
c. Air Tampa is considering three capital structures: (1) $2 million debt, (2) $4 million debt, and (3) $6 million debt. Estimate Air Tampa's rs for these debt levels.
c-1. $2 million debt
D = Debt = $2 million
Value of unlevered firm = $14 million
T = Tax rate at start-up = 15%, or 0.15
Value of lerevered firm = Value of unlevered firm + (Debt * T) = $14 + ($2 * 15%) = $14.30 million
S = Value of equity = Value of lerevered firm - Debt = $14.30 - $2 = $12.30 million
rs = ro + ((ro - rd) * (D / S) * (1 - T)) ................... (3)
Where;
ro = 15.60%
rd = Rf = 10%, or 0.10
D = Debt = $2 million
S = Value of equity = $12.30 million
T = Tax rate at start-up = 15%, or 0.15
Substituting the values into equation (3), we have:
rs = 15.60% + ((15.60% - 10%) * (2 / 12.30) * (1 - 0.15)) = 16.37%
c-2. $4 million debt
D = Debt = $4 million
Value of unlevered firm = $14 million
T = Tax rate at start-up = 15%, or 0.15
Value of lerevered firm = Value of unlevered firm + (Debt * T) = $14 + ($4 * 15%) = $14.60 million
S = Value of equity = Value of lerevered firm - Debt = $14.60 - $4 = $10.60 million
Substituting all the relevant values into equation (3), we have:
rs = 15.60% + ((15.60% - 10%) * (4 / 10.60) * (1 - 0.15)) = 17.40%
c-3. $6 million debt
D = Debt = $6 million
Value of unlevered firm = $14 million
T = Tax rate at start-up = 15%, or 0.15
Value of lerevered firm = Value of unlevered firm + (Debt * T) = $14 + ($6 * 15%) = $14.90 million
S = Value of equity = Value of lerevered firm - Debt = $14.90 - $6 = $8.90 million
Substituting all the relevant values into equation (3), we have:
rs = 15.60% + ((15.60% - 10%) * (6 / 8.90) * (1 - 0.15)) = 18.81%
This picture of gas stations BEST illustrates which aspect of a market economy?
A
credit
B
competition
с
interest rates
D
opportunity cost
Answers
Answer:
B. Competition is the answer for E2020
Explanation:
Poehling Medical Center has a single operating room that is used by local physicians to perform surgical procedures. The cost of using the operating room is accumulated by each patient procedure and includes the direct materials costs (drugs and medical devices), physician surgical time, and operating room overhead. On January 1 of the current year, the annual operating room overhead is estimated to be: Disposable supplies $278,900 Depreciation expense 69,800 Utilities 29,800 Nurse salaries 259,300 Technician wages 118,200 Total operating room overhead $756,000 The overhead costs will be assigned to procedures, based on the number of surgical room hours. Poehling Medical Center expects to use the operating room an average of eight hours per day, seven days per week. In addition, the operating room will be shut down two weeks per year for general repairs. This information has been collected in the Microsoft Excel Online file. Open the spreadsheet, perform the required analysis, and input your answers in the questions below.1. Determine the predetermined operating room overhead rate for the year.
2. Bill Harris has a five-hours procedure on Jan 22. How much operating room overhead would be charged to his procedure, using the rate determined in part 1?
3. During January, the operating room was used 240 hours. The actual overhead costs incurred for January were $67,250. Determine the overhead under or over applied for the period.
Answers
Answer:
Results are below.
Explanation:
To calculate the predetermined manufacturing overhead rate we need to use the following formula:
Predetermined manufacturing overhead rate= total estimated overhead costs for the period/ total amount of allocation base
Total number of surgical room hours= (8*7)*52= 2,912 hours
Predetermined manufacturing overhead rate= 756,000 / 2,912
Predetermined manufacturing overhead rate= $259.61 per surgical room hour
Now, we can allocate costs using the following formula:
Allocated MOH= Estimated manufacturing overhead rate* Actual amount of allocation base
Allocated MOH= 259.61*5
Allocated MOH= $1,298.05
Finally, the under/over allocation for January:
Under/over applied overhead= real overhead - allocated overhead
Allocated overhead= 259.61*240= $62,306.4
Under/over applied overhead= 67,250 - 62,306.4
Underapplied overhead= $4,943.6
The Change Corporation has two different bonds currently outstanding. Bond M has a face value of $30,000 and matures in 20 years. The bond makes no payments for the first six years, then pays $3,100 every six months over the subsequent eight years, and finally pays $3,400 every six months over the last six years. Bond N also has a face value of $30,000 and a maturity of 20 years; it makes no coupon payments over the life of the bond. The required return on both these bonds is 12% compounded semi-annually. What is the current price of Bond M and Bond N?
Answers
Answer:
a. Current price of Bond M = $24,062.31
b. Current price of Bond N = $2,916.67
Explanation:
a. Calculation of current price of Bond M
Note: See the attached excel file for the calculation of current price of Bond M (in bold red color).
In the attached excel file, the following are used:
r = required return = 12%
s = number of semiannuals in a year = 2
From the attached excel file, we have:
Current price of Bond M = $24,062.31
b. Calculation of current price of Bond N
This can be calculated using the following formula:
Current price of Bond N = Face value of bond N / (100% + Semiannual required return)^n ............................ (1)
Where;
Face value of bond N = $30,000
Semiannual required return = Required return / Number of semiannual in a year = 12% / 2 = 6%
n = Number of semiannuals = Number of years of maturity * Number of semiannual in a year = 20 * 2 = 40
Substituting the above into equation (1), we have:
Current price of Bond N = $30,000 / (100% + 6%)^40 = $2,916.67
the Hsu Manufacturing Company has two service departments: Maintenance and Accounting. The Maintenance Department's costs of $300,000 are allocated on the basis of machine hours. The Accounting Department's costs of $120,000 are allocated on the basis of the number of employees within a specific department. The direct departmental costs for A and B are $300,000 and $500,000, respectively. Maint Acctg A B Machine hours 480 20 2,300 200 Number of employees 2 2 8 4What is the Accounting Department's cost allocated to Department B using the direct method
Answers
Answer:
$34,286
Explanation:
Step 1
Total number of employees :
Maintenance 2
Department A 8
Department B 4
Total 14
Step 2
Allocation to Department B :
Department B = 4 / 14 x $120,000
= $34,286
Conclusion :
Accounting Department's cost allocated to Department B using the direct method is $34,286
Which of the following is an example of an ethical standard you may find in
other countries but not in the United States?
A. Having mandatory retirement for people over 65
B. Bribing government officials
C. Respecting lines of authority
O D. Keeping your word
Answers
Which of the following statements is correct concerning liability when a partner in a general partnership commits a tort while engaged in partnership business? A. The partner committing the tort is the only party liable. B. The partnership is the only party liable. C. Each partner is jointly and severally liable. D. Each partner is liable to pay an equal share of any judgment.
Answers
The statement is correct concerning liability when a partner in a general partnership commits a tort while engaged in partnership business that is "each partner is jointly and severally liable". The correct option is C.
In a general partnership, each partner shares joint and several liability for the actions and liabilities of the partnership.
If a partner commits a tort while engaged in partnership business, the injured party can hold the partnership and all individual partners personally liable for any resulting damages.
This means that the injured party can choose to pursue a claim against the partnership as a whole or against any individual partner or a combination of partners, depending on their preference or ability to satisfy the judgment.
Therefore, the correct option is C.
To know more about partnership here,
https://brainly.com/question/33558718
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On July 1, 2016, Farm Fresh Industries purchased a specialized delivery truck for $175,600. At the time, Farm Fresh estimated the truck to have a useful life of eight years and a residual value of $22,000. On March 1, 2021, the truck was sold for $72,000. Farm Fresh uses the straight-line depreciation method for all of its plant and equipment. Partial-year depreciation is calculated based on the number of months the asset is in service. Required: 1. Prepare the journal entry to update depreciation in 2021. 2. Prepare the journal entry to record the sale of the truck. 3. Assuming that the truck was instead sold for $97,000, prepare the journal entry to record the sale.
Answers
Answer:
Part 1
Debit : Depreciation Expense $11,200
Credit : Accumulated Depreciation $11,200
Part 2
Debit : Cash $72,000
Debit : Accumulated Depreciation $88,000
Debit : P & L $15,600
Credit : Cost $175,600
Part 3
Debit : Cash $97,000
Debit : Accumulated Depreciation $88,000
Credit : P & L $9,400
Credit : Cost $175,600
Explanation:
Depreciation = (Cost - Residual Value) / Useful Life
Annual Depreciation = $19,200
to update depreciation in 2021 = $11,200
Accumulated Depreciation = $88,000
The income statement of Kimbrough Community Clinic for the year ended December 31, 2017, is provided below.
Kimbrough Community Clinic Income Statement For the year ended 12/31/2017
Revenues:
Net patient service revenue $774,000
Operating Expenses:
Medical services $361,000
Support services 253,000
General services 95,000
Depreciation 33,000 (742,000)
Operating Income 32,000
Other Income and Expenses:
Interest income 34,000
Interest expense 12,000 22,000
Net Income $54,000
Assuming a maximum annual debt service of $68,000, calculate the organization's debt service coverage ratio.
a. 1.46
b. 1.78
c. 0.79
d. 0.13
Answers
Answer:
0.47
Explanation:
Debt service coverage ratio = Net Operating Income ÷ Total Debt Service
where,
Net Operating Income = Revenue - Certain Operating Expenses
Total Debt Service = Current Debt Obligations
therefore,
debt service coverage ratio = $32,000 ÷ $68,000 = 0.47
When we grow in relationship with ______________, we grow in relationship with God.
Answers
Answer:
Explanation:
knowledge? Sorry if this dosent help! <3
Strong brand names: multiple choice 1 are easy to create. guarantee brand loyalty. guarantee product quality. act as a signal of quality. A negative impact of branding is that: multiple choice 2 it makes firms with no reputation more competitive. it may create false perceptions about product differences. it provides additional information to buyers. it may encourage firms to create quality products.
Answers
Answer:
1. Strong brand names:
guarantee brand loyalty.
2. A negative impact of branding is that:
it may create false perceptions about product differences.
Explanation:
Brand names differentiate the products and services of competitors providing similar goods and services. It is usually represented as a logo. To make the brand name strong, the brand should reflect the style of customer services, marketing materials, and advertising chosen by a particular company in a competitive market.
Consider the following limit order book for a share of stock. The last trade in the stock occurred at a price of $130. Limit Buy Orders Limit Sell OrdersPriceShares PriceShares$129.75400 $129.80150129.70700 129.85150129.65400 129.90300129.60200 129.95150128.65500 a. If a market buy order for 150 shares comes in, at what price will it be filled
Answers
Answer:
a. If a market buy order for 150 shares comes in, it will be filled at
= $128.65500 per share ($19,298.25 in total).
Explanation:
a) Data and Calculations:
Limit Buy Orders Limit Sell Orders
Price Shares $129.75400 $129.80150
Price Shares 129.70700 129.85150
Price Shares 129.65400 129.90300
Price Shares 129.60200 129.95150
Price Shares 128.65500 130.00000
The total purchase price for 150 shares = $19,298.25 ($128.65500 * 150)
b) An investor's Limit Buy Orders give the limit above which the shares cannot be exchanged for cash. But below and at the limit amount, the shares can be bought in exchange for cash. The investor's Limit Sell Orders give the limit below which the shares should not be sold in exchange for cash. In other words, the shares can be sold at a price above the limit.
Ds games recommendation give me some :D
Thanks
Answers
If business property or property held for the production of income is destroyed, the loss is equal to the adjusted basis of the property at the time of destruction.
a. True
b. False
Answers
Answer:
A) true
Explanation:
Business property could be of different types such as Real property(real estate) which comprises building as well as land. As regards to business real property could be property such as warehouses, offices as well as factories which is been owned by the business. If these properties are been held for income production, the loss can be attributed to adjusted basis during the destruction of the property. It should be noted If business property or property held for the production of income is completely destroyed, the loss is equal to the adjusted basis of the property at the time of destruction.
Are you smart first to reply gets braaaaaiiiiiiiinnnliest
Answers
Answer:
Hello
Explanation:
This is a homie checkpoint and i would just like to ask if you are ok? And if you do not answer that is fine. But just know there is always someone here for you.
;)
Match each term with its definition.
a. accelerated depreciation method
b. amortization
c. book value
d. boot
e. capital expenditures
f. capital leases
g. copyright
h. declining-balance method
i. depletion
j. depreciation
k. fixed assets
l. goodwill
1. Long-term or relatively permanent tangible assets that are used in the normal business operations.
2. The systematic periodic transfer of the cost of a fixed asset to an expense account during its expected useful life.
3. The estimated value of a fixed asset at the end of its useful life.
4. A method of depreciation that provides tor equal peri0dic depreciation expense over the estimated life of a fixed asset.
5. A method of depreciation that provides tor depreciation expense based on the expected productive capacity Of a fixed asset.
6. A method of depreciation that provides periodic depreciation expense based on the declining
book value of a fixed asset over its estimated life.
7. The cost of a fixed asset minus accumulated depreciation on the asset.
8. A depreciation method that provides for a higher depreciation amount in the first year of the assets use, t0110wed by a gradually declining amount of depreciation.
9. The costs of acquiring fixed assets, adding to a fixed asset, improving a fixed asset, or extending a fixed assets useful lite.
10. Costs that benefit only the current period or costs incurred for normal maintenance and repairs
Answers
Answer:
Definition Item
1. fixed assets
2. depreciation
3. amortization
4. copyright
5. depletion
6. declining-balance method
7. book value
8. accelerated depreciation method
9. capital expenditures
10. boot
Explanation:
The Definition has been matched to the items as above.
During April, Cavy Company incurred factory overhead as follows:Indirect materials $10,500Factory supervision labor 4,000Utilities 500Depreciation (factory) 620Small tools 370Equipment rental 730Journalize the entry to record the factory overhead incurred during April. If an amount box does not require an entry, leave it blank.
Answers
Answer:
Date Account Title Debit Credit
April Factory Overhead $16,720
Indirect materials $10,500
Wages payable $4,000
Utilities payable $ 500
Accumulated Depreciation $ 620
Small tools $ 370
Equipment rental $ 730
Cost of goods sold for a manufacturer equals cost of goods manufactured plus a. beginning finished goods inventory less ending finished goods inventory b. beginning work in process inventory less ending work in process inventory c. ending work in process inventory less beginning work in process inventory d. ending finished goods inventory less beginning finished goods inventory
Answers
Answer:
a. beginning finished goods inventory less ending finished goods inventory
Explanation:
Cost of goods sold for a manufacturer equals cost of goods manufactured plus beginning finished goods inventory less ending finished goods inventory.
(TYPE 6) Given that beginning inventory level is 660 units, total forecasted demand over the next 12 months is 18,000 units, and desired ending inventory level at the end of the 12th month is 900 units, what is the cost of production per month if a level strategy is used and per unit cost of production is $22
Answers
Answer: $33,440
Explanation:
First find the units to be produced for the year:
= Forecasted demand + Closing inventory - Opening inventory
= 18,000 + 900 - 660
= 18,240 units
Cost of production:
= 18,240 * 22
= $401,280
Cost per month:
= 401,280 / 12
= $33,440
Paparo Corporation has provided the following data from its activity-based costing system: Activity Cost Pool Total Cost Total Activity Assembly $ 794,300 47,000 machine-hours Processing orders $ 61,280 1,600 orders Inspection $ 109,681 1,430 inspection-hours Data concerning the company's product Q79Y appear below: Annual unit production and sales 500 Annual machine-hours 1,130 Annual number of orders 115 Annual inspection hours 20 Direct materials cost $ 42.00 per unit Direct labor cost $ 41.31 per unit According to the activity-based costing system, the average cost of product Q79Y is closest to:
Answers
Answer:
Unitary costs= $133.38
Explanation:
First, we need to calculate the activities rate:
Predetermined manufacturing overhead rate= total estimated overhead costs for the period/ total amount of allocation base
Assembly= 794,300 / 47,000= $16.9 per machine-hour
Processing orders= 61,280 / 1,600= $38.3 per order
Inspection= 109,681 / 1,430= $76.7 per inspection-hour
Now, we can allocate overhead:
Allocated MOH= Estimated manufacturing overhead rate* Actual amount of allocation base
Assembly= 16.9*1,130= 19,097
Processing orders= 38.3*115= 4,404.5
Inspection= 76.7*20= 1,534
Total allocated costs= $25,035.5
Finally, the unitary costs:
Unitary allocated costs= 25,035.5/500= $50.07
Unitary costs= 50.07 + 42 + 41.31
Unitary costs= $133.38
Joe King has an annual income of $240,000. Joe is buying a $400,000 house in a very desirable area, sought after by buyers. He applies for a loan at the bank and is approved for fully amortizing 30-year FRM at an annual rate of 3.40%, with monthly payments, compounded monthly. The bank will not lend more than 80% LTV. The appraisal indicates the house is worth $375,000. Assuming he does not want PMI What is the biggest mortgage Joe can get
Answers
Answer:
Joe King
The biggest mortgage Joe can get $300,000 (80% of $375,000).
Explanation:
a) Data and Calculations:
Joe King's annual income = $240,000
Cost of purchasing a house = $400,000
Bank highest limit = 80% LTV
Appraised worth of house = $375,000
80% of $375,000 = $300,000
b) 80% LTV means 80% of the loan to the property value (LTV). It is essentially the size of the mortgage that the bank is prepared to offer Joe in relation to the value of the property he is purchasing. In this instance, the appraised value of the property is $375,000. The 80% LTV will be equal to $300,000 ($375,000 * 80%).
The Step Company has the following information for the year just ended: Budget Actual Sales in units 15,000 14,000 Sales $ 150,000 $ 147,000 Less: Variable Expenses 90,000 82,600 Contribution Margin $ 60,000 $ 64,400 Less: Fixed Expenses 35,000 40,000 Operating Income $ 25,000 $ 24,400 The Step Company's sales-price variance is: Multiple Choice $7,000 unfavorable. $7,500 unfavorable. $7,500 favorable. $7,000 favorable. $3,000 unfavorable.
Answers
Answer:
$7,000 Favourable
Explanation:
Calculation to determine what The Step Company's sales-price variance is:
Using this formula
Sales Price Variance = (Actual Sales Price – Budgeted Sales Price) * Actual Sales Volume
Let plug in the formula
Sales Price Variance=[($ 147,000÷14,000)-(150,000/15,000)]*14000
Sales Price Variance = ($10.5 – $10) * 14000
Sales Price Variance = $7,000 Favorable
Therefore The Step Company's sales-price variance is: $7,000 Favorable
The Step Company has the following information for the year just ended: Budget Actual Sales in units 15,000 14,000 Sales $ 150,000 $ 147,000 Less: Variable Expenses 90,000 82,600 Contribution Margin $ 60,000 $ 64,400 Less: Fixed Expenses 35,000 40,000 Operating Income $ 25,000 $
Knowledge Check 01 Messing Company has an agreement with a third-party credit card company, which calls for cash to be received immediately upon deposit of customers' credit card sales receipts. The credit card company receives 3.5 percent of card sales as its fee. Messing has $4,000 in credit card sales on January 1. Prepare the January 1 journal entry for Messing Company by selecting the account names from the drop-down menus and entering the dollar amounts in the debit or credit columns.
Answers
Answer:
Messing Company
Journal Entry:
January 1:
Debit Cash $3,860
Debit Credit Card Expense $140
Credit Sales Revenue $4,000
To record the cash receipt and card expense for the card sales.
Explanation:
a) Data and Calculations:
Credit card commission = 3.5% of card sales
Credit card sales on January 1 = $4,000
Credit card fees = $140 ($4,000 * 3.5%) Cash received $3,860
Cash $3,860 Credit Card Expense $140 Sales Revenue $4,000
Three identical units of merchandise were purchased during July, as follows: Date Product T Units Cost July 3 Purchase 1 $31 10 Purchase 1 34 24 Purchase 1 37 Total 3 $102 Average cost per unit $34 Assume one unit sells on July 28 for $48. Determine the gross profit, cost of goods sold, and ending inventory on July 31 using (a) first-in, first-out, (b) last-in, first-out, and (c) average cost flow methods.
Answers
Answer:
(a) first-in, first-out,
Cost of Sales = $31
Ending Inventory = $71
Gross Profit = $17
(b) last-in, first-out,
Cost of Sales = $37
Ending Inventory = $65
Gross Profit = $17
(c) average cost flow methods.
Cost of Sales = $48
Ending Inventory = $96
Gross Profit = $0
Explanation:
(a) first-in, first-out,
FIFO method assumes that the units to arrive first, will be sold first. This means cost of sales will be based on earlier (old) prices whilst inventory valuation will be on recent (new) prices.
Cost of Sales = 1 x $31 = $31
Ending Inventory = 1 x $34 + 1 x $37 = $71
Gross Profit = $48 - $31 = $17
(b) last-in, first-out,
LIFO method assumes that the units to arrive last will be sold first. This means cost of sales will be based on recent (new) prices whilst inventory valuation will be on earlier (old) prices.
Cost of Sales = 1 x $37 = $37
Ending Inventory = 1 x $34 + 1 x $31 = $65
Gross Profit = $48 - $37 = $17
(c) average cost flow methods.
This method calculates a new average unit cost with each and every purchase made. This unit cost is used to determine the cost of sales and inventory value.
Cost of Sales = 1 x $48 = $48
Ending Inventory = 2 x $48 = $96
Gross Profit = $48 - $48 = $0
During the next year, sales of Fluoro2211 are expected to be 10,000 units. All costs will remain the same except for fixed manufacturing overhead, which will increase by 20%, and material, which will increase by 10%. The selling price per unit for next year will be $160. Based on these data, Razor Inc.'s total contribution margin for next year will be:
Answers
Answer:
$1,080,000
Explanation:
Calculation to determine what Razor Inc.'s total contribution margin for next year will be:
First step is to calculate the Total cost
Selling price per unit for next year $160
Less Direct Materials ($22)
(110%*20)
Less Direct Labor ($15)
Less Variable Manufacturing Overhead ($12)
Less Variable Selling ($3)
Total $108
Now let calculate the Next year contribution margin
Next year contribution margin=$108*10,000 units
Next year contribution margin= $1,080,000
Therefore Razor Inc.'s total contribution margin for next year will be:$1,080,000
Declining Balance Depreciation Irons Delivery Inc. purchased a new delivery truck for $40,600 on January 1, 2019. The truck is expected to have a $2,000 residual value at the end of its 5-year useful life. Irons uses the double-declining-balance method of depreciation. Required: Prepare the journal entry to record depreciation expense for 2019 and 2020.
Answers
Answer:
A. Depreciation expense $16240
Cr Accumulated depreciation $16240
B. Dr Depreciation expense $9744
Cr Accumulated depreciation $9744
Explanation:
A. Preparation of the journal entry to record depreciation expense for 2019 and 2020.
Dr Depreciation expense $16240
Cr Accumulated depreciation $16240
(Record double-declining-balance depreciation expense)
Depreciation expense for 2019= $40,600 × (1/5 × 2)
Depreciation expense for 2019= $16240
B. Preparation of the journal entry to record depreciation expense for 2020
Dr Depreciation expense $9744
Cr Accumulated depreciation $9744
[($40,600 –$16,240) × (1/5 × 2) = 9744]
(Record double-declining-balance depreciation expense)Depreciation expense for 2020
During January, Luxury Cruise Lines incurs employee salaries of $1.3 million. Withholdings in January are $99,450 for the employee portion of FICA, $195,000 for federal income tax, $81,250 for state income tax, and $13,000 for the employee portion of health insurance (payable to Blue Cross/Blue Shield). The company incurs an additional $80,600 for federal and state unemployment tax and $39,000 for the employer portion of health insurance.
Required:
Record the necessary journal entries.
Answers
Answer:
Date Account Title Debit Credit
Jan. 31 Salary Expenses $1,300,000
Accounts Payable - Insurance $13,000
FICA Tax Payable $99,450
Income Tax payable $276,250
Salaries Payable $911,300
Working:
Income tax payable = Federal income + State income
= 195,000 + 81,250 = $276,250
Date Account Title Debit Credit
Jan. 31 Salaries Expenses $39,000
Accounts Payable $39,000
Date Account Title Debit Credit
Jan. 31 Payroll Tax expenses $180,005
FICA Tax Payable $99,450
Federal and State Unemployment Tax $80,600
A coffee manufacturer is interested in whether the mean daily consumption of regular-coffee drinkers is less than that of decaffeinated-coffee drinkers. A random sample of 50 regular-coffee drinkers showed a mean of 4.35 cups per day. A sample of 40 decaffeinated-coffee drinkers showed a mean of 5.12 cups per day. Assume the population standard deviation for those drinking regular coffee is 1.20 cups per day and 1.36 cups per day for those drinking decaffeinated coffee. Perform an appropriate test at the 1% level of significance. Use the critical value approach.Compute the p-value.
Answers
Answer:
The P-Value ≅0 (zero).
Explanation:
From the given data we have
Regular coffee drinkers sample size = n1 = 50
Decaffeinated-coffee drinkers sample size = n2= 40
Regular coffee drinkers sample mean= x1 = 4.35
Decaffeinated-coffee drinkers sample mean = x2= 5.12
Regular coffee drinkers population standard deviation = σ1 = 1.2
Decaffeinated-coffee drinkers population standard deviation = σ2= 1.36
1) Formulate null and alternate hypothesis
H0: u1≥ u2 Ha: u1 < u2
The null hypothesis is that the mean of the regular coffee drinkers is greater or equal to the mean of decaffeinated-coffee drinkers
against the claim
the mean daily consumption of regular-coffee drinkers is less than that of decaffeinated-coffee drinkers.
2) The test statistic is
z= x1-x2/ sqrt( σ1 ²/n1 + σ2²/n2)
Putting the values
z = 4.35- 5.12/ sqrt( 1.44/50 + 1.8496/40)
z= -5.44
3) The significance level is 0.01
The critical region is Z < -2.33
4) Since the calculated value of z= -5.44 is less than the z ∝= -2.33 we reject H0.
5) the P-value can be calculated using the calculator.
The P-Value is < 0.00001.
P= 0
Which means that the claim is accepted that the mean of the regular coffee drinkers is less than the mean of decaffeinated-coffee drinkers.