Answer:
c. Green Caterpillar’s total notes payable increased by $137 million, while its common stock account increased by $4,265 million.
Explanation:
Short term debt is he amount of the outstanding debt of an entity that will mature within 12 months. Short term debt is also known as current liability and its examples include note payable with one year, accounts payable, wages payable, etc.
Long term debts refers to the amount of the outstanding debt of an entity that will mature after 12 months. Long term debt is also known as non-current liability and its examples include note bank loan, debneture, lease obligation etc.
Therefore, the correct option in the question is option c. Green Caterpillar’s total notes payable increased by $137 million, while its common stock account increased by $4,265 million.
The reason is that total notes payable of $137 million is an example of short term debt financing, while common stock is not a debt financing but an equity financing.
Equity financing a financing that involves selin stock of a company to investors.
On January 1, 2021, a company issues $800,000 of 8% bonds, due in ten years, with interest payable semi annually on June 30 and December 31 each year. Assuming the market interest rate on the issue date is 7%, the bonds will issue at $856,850.
Required:
1. Fill in the blanks in the amortization schedule below: (Round your answers to the nearest dollar amount. Enter all amounts as positive values.)
Interest Change in Carrying Value Carrying Value
Date Cash Paid Expense
01/01/2021
06/30/2021
12/31/2021
2. Record the bond issue on January 1, 2021, and the first two semi-annual interest payments on June 30, 2021, and December 31, 2021. (If no entry is required for a particular transaction/event, select "No Journal Entry Required" in the first account field. Round your answers to the nearest dollar amount.)
Answer:
Date Interest Interest Amortization Bond's
payment expense bond premium book value
Jan. 1, 2021 856,850
June 30, 2021 32,000 29,157.50 2,842.50 854,007.50
Dec. 31, 2021 32,000 29,157.50 2,842.50 851,165
Assuming you are using a straight line amortization of bond premium, then the amortization per coupon payment = $56,850 / 20 = $2,842.50
January 1, 2021, bonds are issued
Dr Cash 856,850
Cr Bonds payable 800,000
Cr Premium on bonds payable 56,850
June 30, 2021, first coupon payment
Dr Interest expense 29,157.50
Dr Premium on bonds payable 2,842.50
Cr Cash 32,000
December 31, 2021, second coupon payment
Dr Interest expense 29,157.50
Dr Premium on bonds payable 2,842.50
Cr Cash 32,000
If the company uses the effective interest method, the numbers vary a little:
amortization of bond premium on first coupon payment:
($856,850 x 3.5%) - ($800,000 x 4%) = $29,989.75 - $32,000 = -$2,010.25 ≈ -$2,010
Journal entry to record first coupon payment:
Dr Interest expense 29,990
Dr Premium on bonds payable 2,010
Cr Cash 32,000
amortization of bond premium on second coupon payment:
($854,840 x 3.5%) - ($800,000 x 4%) = $29,919.40 - $32,000 = -$2,080.60 ≈ -$2,081
Journal entry to record second coupon payment:
Dr Interest expense 29,919
Dr Premium on bonds payable 2,081
Cr Cash 32,000
1. Filling in the blanks of the Amortization Schedule is as follows:
Amortization Schedule (Semi-annual):
Date Interest Interest Amortization Bond's
Payment Expense Bond premium Book value
Jan. 1, 2021 $856,850
June 30, 2021 $32,000 $29,990 2,010 $854,840
Dec. 31, 2021 $32,000 $29,919 2,081 $852,759
2. Journal Entries:
January 1, 2021:
Debit Cash $856,850
Credit Bonds Payable $800,000
Credit Bonds premium $56,850
To record the issuance of bonds at a premium.June 30, 2021:
Interest Expense $29,990
Amortization of Bonds Premium $2,010
Cash $32,000
To record the first interest payment and bonds amortization.December 31, 2021:
Interest Expense $29,919
Amortization of Bonds Premium $2,081
Cash $32,000
To record the second interest payment and bonds amortization.Data and Calculations:
Face value of bonds on January 1, 2021 = $800,000
Bonds proceeds = $856,850
Bonds premium = $56,850 ($856,850 - $800,000)
Coupon interest rate = 8%
Maturity period = 10 years
Interest payment = June 30 and December 31
Market interest rate = 7%
June 30, 2021:
Cash payment = $32,000 ($800,000 x 8% x 1/2)
Interest Expense = $29,990 ($856,850 x 7% x 1/2)
Amortization of Premium = $2,010 ($32,000 - $29,990)
Carrying value of bonds = $854,840 ($856,850 - $2,010)
December 31, 2021:
Cash payment = $32,000 ($800,000 x 8% x 1/2)
Interest Expense = $29,919 ($854,840 x 7% x 1/2)
Amortization of Premium = $2,081 ($32,000 - $29,919)
Carrying value of bonds = $852,759 ($854,840 - $2,081)
June 30, 2022:
Cash payment = $32,000 ($800,000 x 8% x 1/2)
Interest Expense = $29,847 ($852,759 x 7% x 1/2)
Amortization of Premium = $2,153 ($32,000 - $29,847)
Carrying value of bonds = $850,606 ($852,759 - $2,153)
Learn more: https://brainly.com/question/13931019
The independent cases are listed below that includes all items relevant to operating activities: Case A Case B Case C Sales revenue $ 65,000 $ 55,000 $ 96,000 Cost of goods sold 35,000 26,000 65,000 Depreciation expense 10,000 2,000 26,000 Salaries and wages expense 5,000 13,000 8,000 Net income (loss) 15,000 14,000 (3,000) Accounts receivable increase (decrease) (1,000) 4,000 3,000 Inventory increase (decrease) 2,000 0 (3,000) Accounts payable increase (decrease) 0 2,500 (1,000) Salaries and wages payable increase (decrease) 1,500 (2,000) 1,000 Compute cash flows from operating activities using the direct method. (Amounts to be deducted should be indicated with a minus sign.) Case A Case B Case C Cash Collected from Customers Cash Payments to Suppliers Cash Payments for Salaries and Wages Net Cash Provided by Operating Activities $ 0 $ 0 $ 0
Answer:
Case A Case B Case C
Cash Collected from Customers $66,000 $51,000 $93,000
Cash Payments to Suppliers ($37,000) ($23,500) ($63,000)
Cash Payments for Salaries and Wages ($3,500) ($15,000) ($7,000)
Net Cash Provided by Operating Activities $25,500 $12,500 $23,000
Explanation:
Case A Case B Case C
Sales revenue 65,000 55,000 96,000
Cost of goods sold 35,000 26,000 65,000
Depreciation expense 10,000 2,000 26,000
Salaries and wages expense 5,000 13,000 8,000
Net income (loss) 15,000 14,000 (3,000)
Accounts receivable increase (decrease) (1,000) 4,000 3,000
Inventory increase (decrease) 2,000 0 (3,000)
Accounts payable increase (decrease) 0 2,500 (1,000)
Salaries and wages payable increase
(decrease) 1,500 (2,000) 1,000
Cash Collected from Customers = Sales revenue - Accounts receivable increase (decrease)
Cash Payments to Suppliers = Cost of goods sold + Inventory increase (decrease) + Accounts payable increase (decrease)
Cash Payments for Salaries and Wages = Salaries and wages expense - Salaries and wages payable increase
(decrease)
On December 31, the end of the first year of operations, Frankenreiter Inc. manufactured 25,600 units and sold 24,000 units. The following income statement was prepared, based on the variable costing concept: Frankenreiter Inc. Variable Costing Income Statement For the Year Ended December 31, 20Y1 1 Sales $9,600,000.00 2 Variable cost of goods sold: 3 Variable cost of goods manufactured $5,376,000.00 4 Inventory, December 31 (336,000.00) 5 Total variable cost of goods sold 5,040,000.00 6 Manufacturing margin $4,560,000.00 7 Total variable selling and administrative expenses 1,150,000.00 8 Contribution margin $3,410,000.00 9 Fixed costs: 10 Fixed manufacturing costs $1,664,000.00 11 Fixed selling and administrative expenses 890,000.00 12 Total fixed costs 2,554,000.00 13 Income from operations $856,000.00 Determine the unit cost of goods manufactured, based on (a) the variable costing concept and (b) the absorption costing concept.
Answer:
Results are below.
Explanation:
Giving the following information:
Production= 25,600 units
Units sold= 24,000
Variable cost of goods sold= $5,376,000
Fixed manufacturing costs= $1,664,000
The absorption costing method includes all costs related to production, both fixed and variable. The unit product cost is calculated using direct material, direct labor, and total unitary manufacturing overhead.
The variable costing method incorporates all variable production costs (direct material, direct labor, and variable overhead).
Variable costing method:
Unitary product cost= 5,376,000/25,600= $210
Absorption costing:
Unitary product cost= 210 + (1,664,000/25,600)= $275
Your friend, Jonathon Fain, is an engineering major with an entrepreneurial spirit. He wants to start his own corporation and needs your accounting expertise. He has no idea what the following definitions mean:
1. Authorized stock.
2. Issued stock.
3. Outstanding stock.
4. Preferred stock.
5. Treasury stock.
Required:
Write a note to Jonathon carefully explaining what each term means and how they are different from each other.
Answer:
Please find the detailed explanation below.
Explanation:
1. Authorized stock:
This is the total(maximum) number of shares a corporation can issue. This can be found in its articles of incorporation or memorandum of association.
2. Issued stock:. This is the summation of all company's shares that have been sold and are held by shareholders.
3. Outstanding stock:
Outstanding stock or shares are all shares of a corporation that have been authorized, issued and purchased by shareholders and are held by them.
4. Preferred stock:
This share is an hybrid stock i.e it has a feature of both the equity and debt in it. Holders of this shares are entitled to fixed dividend payment and are usually paid before common shareholders if the company liquidates.
5. Treasury stock.:
Treasury shares are the shares that are repurchased by the corporation issuing them and thereby, reducing the total number of outstanding shares.
Horgen Corporation manufactures two products: Product M68B and Product H27T. The company is considering implementing an activity-based costing (ABC) system that allocates its manufacturing overhead to four cost pools. The following additional information is available for the company as a whole and for Products M68B and H27T.
Activity Cost Pool Activity Measure Total Cost Total Activity
Machining Machine-hours $299,000 13,000 MHs
Machine setups Number of setups $240,000 400 setups
Product design Number of products $80,000 2 products
Order size Direct labor-hours $290,000 10,000 DLHs
Activity Measure Product Product
Machine-hours M68B H27T
Number of setups 6,000 7,000
Number of products 250 150
Direct labor-hours 4,000 6,000
Using the ABC system, how much total manufacturing overhead cost would be assigned to Product H27T?
a. $291,000
b. $174,000
c. S465,000
d. $454,500
Answer: $465,000
Explanation:
The activity-based costing (ABC) is used to know the total cost of activities that is vital to make a product. In ABC system, for every activity which goes into production, a cost will be assigned.
Based on the figures in the question, the following can be deduced:
Machining:
= 299,000/13,000 × 7,000
= 23 × 7,000
= $161,000
Machine set up:
= 240,000/400 × 150
= 600 × 150
= $90000
Product design:
= 80,000/2
= $40,000
Order size:
= 290,000/10,000 × 6,000
= 29 × 6,000
= $174,000
Total = $161,000 + $90,000 + $40,000 + $174,000
= $465,000
The total manufacturing overhead cost that would be assigned to Product H27T is $465,000.
The total manufacturing overhead cost that would be assigned to Product H27T is $465,000.
Product H27T Machining = $299,000/13,000 × 7,000
Product H27T Machining = $23 × 7,000
Product H27T Machining = $161,000
Product H27T Machine set up = $240,000/400 × 150
Product H27T Machine set up = $600 × 150
Product H27T Machine set up = $90000
Product H27T Product design = $80,000/2
Product H27T Product design = $40,000
Product H27T Order size = $290,000/10,000 × 6,000
Product H27T Order size = $29 × 6,000
Product H27T Order size = $174,000
Total manufacturing overhead cost = $161,000 + $90,000 + $40,000 + $174,000
Total manufacturing overhead cost = $465,000
In conclusion, the total manufacturing overhead cost that would be assigned to Product H27T is $465,000.
Read more about this here
brainly.com/question/15451616
The systematic process of selecting, supporting, and managing a firm's collection of projects is called: Profile management. Heavyweight project management. Project portfolio management. Matrix project organization.
Answer:
Project portfolio management
Explanation:
Project portfolio management refers to managing the portfolios of the project i,e used by the project managers and the management who manages the project.
This is useful to analyze the risk and return in each project
Moreover, it is a process of choosing, supporting and managing the collection of firm projects in a systematic way
Hence, the third option is correct
Alpha and Beta are partners who share income in the ratio of 1:2 and have capital balances of $42,600 and $88,200, respectively, at the time they decide to terminate the partnership. After all noncash assets are sold and all liabilities are paid, there is a cash balance of $77,700. What amount of loss on realization should be allocated to Alpha
Answer:
The amount of loss to Alpha is $17700.
Explanation:
Given income sharing ratio = 1:2
The capital balance of Alpha = $42600
The capital balance of Beta = $88200
Total capital balance (Alpha + Beta) [tex]= $42600 + $88200 = $130800[/tex]
The cash balance available = $77700
Loss = 130800 – 77700 = $ 53100
The share of loss allocated to Alpha:
[tex]= 53100 \times \frac{1}{3} \\= $17700[/tex]
Therefore, the amount of loss to Alpha is $17700.
Sue and Andrew form SA general partnership. Each person receives an equal interest in the newly created partnership. Sue contributes $18,000 of cash and land with an FMV of $63,000. Her basis in the land is $28,000. Andrew contributes equipment with an FMV of $20,000 and a building with an FMV of $41,000. His basis in the equipment is $16,000, and his basis in the building is $28,000. How much gain must the SA general partnership recognize on the transfer of these assets from Sue and Andrew
Answer:
$0
Explanation:
Given that
Sue contributed amount = $18,000
FMV of land = $63,000
Basis in land = $28,000
Andrew contributed amount = $20,000
FMV of Building = $41,000
Basis in equipment = $16,000
Basis in building = $28,000
Based on the above information, the gain that would be recognized is $0 as Partnerships recognize no gain on receiving contributed valued property. At the disposal of the asset, the constructed-in benefit or constructed-in loss will be revealed. For this, the partnership basis property i.e being acquired should be based on a carryover basis.
The following information is available for a company's maintenance cost over the last seven months.
Month Maintenance Hours Maintenance Cost
June 9 $5,200
July 18 $6,650
August 12 4,850
September 15 5,750
October 21 6,650
November 24 6,950
December 6 3,350
Using the high-low method, estimate both the fixed and variable components of its maintenance cost.
High-Low method Calculation of variable cost per unit
Total cost at the high point ____
Variable costs at the high point
Volume at the high point: ____
Variable cost per unit ____
Total variable costs at the high point ____
Total fixed costs ____
Total cost at the low point ____
Variable costs at the low point
Volume at the low point ____
Variable cost per unit
Total variable costs at the low point
Total fixed costs ____
Answer:
Variable cost per unit= $240
Fixed costs= $1,910
Explanation:
Giving the following information:
June 9 $5,200
July 18 $6,650
August 12 4,850
September 15 5,750
October 21 6,650
November 24 6,950
December 6 3,350
To calculate the variable and fixed costs under the high-low method, we need to use the following formulas:
Variable cost per unit= (Highest activity cost - Lowest activity cost)/ (Highest activity units - Lowest activity units)
Variable cost per unit= (6,950 - 3,350) / (21 - 6)
Variable cost per unit= $240
Fixed costs= Highest activity cost - (Variable cost per unit * HAU)
Fixed costs= 6,950 - (240*21)
Fixed costs= $1,910
Fixed costs= LAC - (Variable cost per unit* LAU)
Fixed costs= 3,350 - (240*6)
Fixed costs= $1,910
Legal Forces Legal forces are important external forces that international managers need to understand. They are developed at the national level, so international ventures should take care to build relationships with local-level lawyers.
Identify each of the legal characteristics by matching to the correct characteristic.
a. U.S. Product Liability Law
b. EU Competition Law
c. US and EU
d. U.S. Tort Law
e. U.S. Competition Law
f. France
1. per se application
2. misuse of activity
3. extraterritoriality
4. trade obstacle, nontariff
5. strict liability
6. punitive damages
Answer:
1. per se application
U.S. Competition Law
This law checks whether certain parts of a contract or agreement have violated US antitrust laws.
2. Misuse of activity
EU Competition Law
This is part of the European Union's competition law that prohibits the use of activity to try to gain unfair advantges.
3. Extraterritoriality
US and EU
This is a provision in both US and EU anti-competition and anti-trust laws that states that the activities of foreign companies fall under the law if these activities influence the people within the jurisdiction of the US or the EU.
4. Trade obstacle, nontariff
France
These are a part of the French system.
5. Strict liability
U.S. Tort Law
A concept in US Tort law that states that a person is liable for an offence they committed and their state of mind or intent when they committed said offence is irrelevant.
6. Punitive damages
U.S. Product Liability Law
A concept in the US that allows for the extra punishment of the party in the wrong to dissuade others from doing so and to reward the party in the right more justly.
Kahn of Portland Oregon sent a letter to Lischner of Los Angeles inquiring whether Kushner’s property in Humboldt County was for sale. Lischner replied that he was interested in selling and asked Kahn about the fair market value. Kahn wrote that it was difficult to make an offer without a legal description of the property and asked for it and the annual taxes. These were provided by Lischner. Subsequently, Kahn wrote, "I hesitate to place a value on someone else’s property, but I can tell you that I have been offered a similar track of property for $2,000. Since your property is closer to mine, I would prefer to buy yours, and offer a four-year term contract at a total price of $2,500." The two parties ultimately agreed on a cash price of $2,500. Shortly after contracting with Kahn, Lischner went to Humboldt county and readily learned, upon the most superficial inquiry that the property was worth more than $2,500. He sold the property to Pacoima Lumber Sales, Inc. for $7,500. Thereupon, Kahn sued Lischner for $5,000. Lischner responded that he had been induced to contract by a fraudulent misrepresentation as to the value of the property by Kahn and therefore could rescind their contract of sale.What are the elements that must be present for fraudulent misrepresentation? Did Kahn commit fraud? Why, or why not.
Answer:
Misrepresentation & Fraud:
a) Elements for Fraudulent Misrepresentation:
1) A representation was in fact made: This means that it was not just a mere opinion expressed by the party misrepresenting.
2) That particular representation was false: The statement made was untrue.
3) The defendant had knowledge that the representation was false: The misrepresentation was intentional on the party of the defendant.
4) The statement was made with the intention that the other party rely on it and enter into a contract or agreement: The defendant was out to induce the other party to enter the contract.
b) Kahn committed a fraud since he intentionally induced Lischner to contract on the basis of fraudulent misrepresentation. The remedy available for Lischner is to rescind the contract.
Explanation:
a) Fraudulent misrepresentation is the presentation of false facts by someone who attempts to persuade another into action with the intent to deceive. The remedy available to the deceived party is to rescind the contract or to plea for damages.
b) According to the britannica.com, "Fraud, in law, is the deliberate misrepresentation of fact for the purpose of depriving someone of a valuable possession."
The Viper retires a $49.4 million bond issue when the carrying value of the bonds is $53.1 million, but the market value of the bonds is $46.5 million. The entry to record the retirement will include: Multiple Choice A debit of $6.6 million to a loss account. No gain or loss on retirement. A credit to cash for $53.1 million. A credit of $6.6 million to a gain account.
Answer:
A debit of $6.6 million to a loss account
Explanation:
The entry to record the retirement Viper retires
Carrying value of the bonds $53.1 million
Less the market value of the bonds is $46.5 million
=$6.6 million loss
The answer is a debit of $6.6 million to a loss account because the carrying value of the bonds was $53.1 million while the market value of the bonds was $46.5 million which means we have to deduct the carrying value from the market value which gave us a loss of $6.6 million .
Agent Jennings makes a presentation on Medicare advertised as an educational event. Agent Jennings distributes materials that are solely educational in nature. However, she gives a brief presentation that mentions plan-specific premiums. Is this a prohibited activity at an event that has been advertised as educational?
Answer:
Yes it is
Explanation:
Yes. When an event has been advertised as educational, going ahead to discuss plan-specific premiums is impermissible
The event for which Mary made the presentation is clearly an educational event so she should have concentrated fully on only educational contents that pertains to the event. Giving a presentation that mentions plan-specific premiums no matter how brief is a deviation from the main focus of the event. Therefore it is impermissible for her to do so.
Use the 2012 segment information provided by BMW and Volkswagen to an- swer the following questions: a. Which company is more multinational? b. Which company is more internationally diversified? c. In which region(s) of the world did each company experience the greatest growth from 2011–2012? the greatest decline?
Answer with its Explanation:
a). The total revenue of Volkswagen and BMW in the 2012 segment given shows that the revenue is $192,676 and BMW which is $76,848. As the revenue of Volkswagen is more than the BMW hence Volkswagen is more multinational.
b). The regional sales section shows that the Volkswagen is more internationally recognized as per the regional sales which is substantially higher than the regional sales of BMW. So its crystal clear that Volkswagen is the one which more internationally diversified.
c). The 2012 segment information shows that the BMW greatest growth was in China then in USA and then greatest growth was in Rest of the Europe and the greatest decline was in Rest of the America.
For Volkswagen, the greatest growth was in North America then in Asia and then in South America. The greatest decline wasn't seen in the segment information but lowest increase was seen in Germany and then in the European countries.
Price ceilings may be imposed if: A. suppliers can make strong moral or political arguments for higher prices. B. demanders can make strong moral or political arguments for higher prices. C. demanders can make strong moral or political arguments for lower prices. D. suppliers can make strong moral or political arguments for lower prices.
Answer:
C. Demanders can make strong moral or political arguments for lower prices.
Explanation:
This explained as a legal price limit set by the government on the sellers in a way to be a protection means to the buyers. This will general control some serial hike and outrageous price on some goods and services.
Its effects are of different types; firstly, price ceiling can create huge market efficiencies in a long run and also causes hoarding of products and springing up of black markets and other hook and crook forms of marketing and this is known to cause unrest in the supply side. When these keeps pulling on, it has a negative effect on the economy of the said nation.
Suppose the following selected condensed data are taken from a recent balance sheet of Bob Evans Farms (in millions of dollars).
Cash $ 31.9
Accounts receivable 21.0
Inventory 28.1
Other current assets 23.0
Total current assets $104.0
Total current liabilities $200.0
Answer:
The answer is
1. -$96 million
2. 0.52:1
Explanation:
1. Working capital = total current assets - total current liabilities
Current assets:
Cash. $ 31.9 million
Accounts receivable $21.0 million
Inventory $28.1 million
Other current assets. $23.0 milllion
Total current assets $104.0 million
And current liabilities is$200.0 million
Therefore, working capital is:
$104 - $200
= -$96 million
2. Current ratio = current assets/current liabilities
$104 million / 200 miliion
=0.52:1
Nuzum Corporation has two divisions: Division M and Division N. Data from the most recent month appear below: Total Company Division M Division N Sales $557,000 $254,000 $303,000 Variable expenses 144,910 81,280 63,630 Contribution margin 412,090 172,720 239,370 Traceable fixed expenses 273,000 128,000 145,000 Segment margin 139,090 44,720 94,370 Common fixed expenses 94,690 43,180 51,510 Net operating income $ 44,400 $ 1,540 $ 42,860 Management has allocated common fixed expenses to the Divisions based on their sales. The break-even in sales dollars for Division N is closest to:
Answer:
$ 183,544.30 = $ 183,544
Explanation:
Nuzum Corporation
Total Division M Division N
Sales $557,000 $254,000 $303,000
Variable expenses 144,910 81,280 63,630
Contribution margin 412,090 172,720 239,370
Traceable fixed expenses 273,000 128,000 145,000
Segment margin 139,090 44,720 94,370
Common fixed expenses 94,690 43,180 51,510
Net operating income $ 44,400 $ 1,540 $ 42,860
First we find the Segment CM ratio by the following formula:
Segment Contribution Margin Ratio= Segment Sales- Segment Variable Expenses/ Sales
Segment Contribution Margin Ratio= 303,000 -63630/303000
Segment Contribution Margin Ratio= 239370/303000=0.79
Then we find the break even sales in dollars.
Break Even Sales in Dollars= Traceable Fixed Expense/ Segment Contribution Margin Ratio
Break Even Sales in Dollars =145,000/0.79= $ 183,544.303
Assume that you have a company that assembles final products from a large variety of components that are supplied by factories located in various parts of the world. In the past you have experienced disruptions in the flow of your supply of components as the result of bad weather, such as a strong El Niño phenomenon, as well as other uncontrollable events. You have back-up suppliers, but each have different capacities and delivery schedules. So you created a model that includes sets of assumptions about changes in suppliers and delivery times in the event of unusual disruptive events. The Excel tool specifically designed for your use in this case is:________
Answer:
Sensitivity analysis
Explanation:
The excel tool that is fit for this task is a sensitivity analysis
Sensitivity analysis is a financial modelling tool that illustrates how a set of input variables impacts the dependent output variable under a certain specific condition , useful for making predictions concerning a range of variables.
It helps in identifying key variables that are of high influence on a project to facilitate a more precise forecasting , and also to help in ranking projects.
Other key benefits are that it considers the time value of money and cash flow.
Assume that the cost of money is 10% per year. The initial cost of a small personal aircraft is $35,000, the annual repair and maintenance cost is $20,000 and the salvage value is $10,000. The aircraft is kept for 2 years. The present worth of the aircraft is :__________
Answer:
The present worth of aircraft = $29137.82
Explanation:
Given the cost of money (r ) = 10%
The initial cost of small aircraft = $35000
Annual repair and maintenance costs (A) = $20000
Salvage valaue = $10000
Now calculate the present value of aircraft by adding the initial cost of annual maintenance and salvage value and subtracting the initial cost.
[tex]Present worth = initial cost + \frac{A[1-(1+r)^{-n}]}{r} - \frac{Salvage \ value}{(1 + r)^{n}} \\= 35000 + \frac{20000 [1 – (1+ 0.01)^{-2}]}{0.01} - \frac{10000}{(1 + 0.01)^{2}} \\= $29137.82[/tex]
An uninterruptible power system used in a small production facility at Acme Manufacturing has a basis of $56,000 and is expected to have $5750 salvage value after 125,000 hours of use. Calculate the depreciation rate per hour of use and the book value after 77,000 hours of operation.
Answer:
The depreciation rate per hour is 0.402
The Book value is $25,046
Explanation:
In order to calculate the depreciation rate per hour of use we would have to calculate the following:
depreciation rate per hour=(basis- salvage value)/hours of use
depreciation rate per hour=($56,000-$5750)/125,000
depreciation rate per hour=0.402
To calculate the book value we would have to make the following calculation:
Book value=basis-(depreciation rate per hour*77,000 hours of operation)
Book value=$56,000-(0.402*77,000)
Book value=$25,046
On January 1 of the current year, Barton Corporation issued 11% bonds with a face value of $105,000. The bonds are sold for $99,750. The bonds pay interest semiannually on June 30 and December 31, and the maturity date is December 31, five years from now. Barton records straight-line amortization of the bond discount. The bond interest expense for the year ended December 31 is a.$13,125 b.$12,600 c.$5,775 d.$525
Answer:
b.$12,600
The bond effective interest expense for the year ended December 31 is $12,600
Explanation:
We need to get the computation of the discount value of the bond using the straight-line method first and Interest Earned
Discount Value= (Face Value - Sales Value) / Years
D.V= $105,000 - $99,750 / 5
D.V= $1,050 Per year
Interest Expenses= Face Value * Bond issued
=$105,000 * 11%
=$11,550
We need to Compute the interest expense of the bond as well
Bond Interest Expenses = Interest Expense + Discount Value
=$11,550 + $1,050
=$12,600
The bond effective interest expense for the year ended December 31 is $12,600
Jaxon Furnishings Company is considering logging opportunities in Alaska to obtain wood for their products. The market analysis team is busy comparing the benefits of increased wood production to the costs of deforestation and resulting environmental conditions. The company is using the _____ approach to make this ethical decision.
Answer:
Jaxon Furnishings Company Vs Logging Opportunities in Alaska
Comparison of the benefits of increased wood production to the costs of deforestation:
The company is using the __environmental sustainability___ approach to make this ethical decision.
Explanation:
According to brittanica.com, environmental "sustainability is understood as a form of intergenerational ethics in which the environmental and economic actions taken by present persons do not diminish the opportunities of future persons to enjoy similar levels of wealth, utility, or welfare."
An approach to an ethical decision is sustainable when it considers the long-term benefits and costs associated with the decision, instead of concentrating on the short-term benefits as some business transactions are done. Short-termism selfishly considers the immediate gains from a transaction. It lacks a futuristic appetite for the good of future generations.
A truck was purchased 3 years ago for $50,000 and can be sold today for $25,000. The operating costs are $9,000 per year, and it is expected to last 4 more years with a $5,000 salvage value. A new truck, which will perform that same service, can be purchased for $55,000, and it will have a life of 10 years with operating costs of $28,000 per year and a $10,000 salvage value. What is the value that should be used as P for the presently owned vehicle in a replacement study
Answer:
P = $25,000
Explanation:
Cost price of truck = $50,000
Present value = $25,000
Operating costs = $9,000 per year
Salvage value = $4,000
Find remaining amount for old truck:
Amount remaining = $50,000 - $25,000 = $25,000
Total amount, since it has a salvage value of $5,000:
Total = $25,00 + $5,000 = $30,000
For new truck:
Cost price = $55,000
Operating costs = $28,000 per year
Salvage value = $10,000
To find the value that should be used as P for the presently owned vehicle in a replacement study:
P = Cost of new truck - Total amount remaining from old truck
P = $55,000 - $30,000
P = $25,000
Therefore, the value that should be used as P for the presently owned vehicle in a replacement study is $25,000
Consider a business cycle theory that combines the classical âIS-LM model with the assumption that temporary changes in government purchases are the main source of cyclical fluctuations. According to thisâ theory, what happens after a temporary increase in government purchases to each of the followingâ variables?
a. Employment
b. The real wage
c. Average labor productivity
d. Investment
e. The price level
Answer: The answer is given below
Explanation:
The IS-LM model, simply is an acronym which represents "investment-savings" and the "liquidity preference of money supply". The model indicates the interaction between market for economic goods and the loanable funds market which is also called the money market.
The variables are explained below:
a. Employment: A rise in the spending expenditure will result into an increase in the current or future taxes which will have an effect on the workers by making them poorer and therefore making them offer their services to the labor market. This will lead to a rise in labor supply.
b. The real wage: Due to the increase in labor supply, the real wage will reduce because the supply of labor will be more than the demand.
c. Average labor productivity: The marginal productivity of labor or production function is not influenced by fiscal policy changes.
d. Investment: There will be a leftward upward shift of the LM curve. Due to increase in price of goods and services, and the fall in real money supply, the interest rate will rise therefore making investment to reduce.
e. The price level: Demand for output is more than the full employment level of output. This will bring about increase in price.
_____ do NOT have the authority to make decisions. a. Self-managing teams b. Semi-autonomous work groups c. Employee involvement teams d. Self-designing teams e. Autonomous work groups
Answer:
C. Employee involvement teams
Explanation:
Employee involvement teams do not have the authority to make decisions but They can offer advice and suggestions to management regarding particular issues.
Employee involvement teams has
employees directly involved in helping an organization achieve its vision and meet its objectives by offering their ideas, skills, support and efforts towards solving problems.
Miller, Inc. estimates the cost of its physical inventory at March 31 for use in an interim financial statement. The rate of markup on cost is 25%. The following account balances are available: Inventory, March 1 $220,000 Purchases 172,000 Purchase returns 8,000 Sales during March 300,000 The estimate of the cost of inventory at March 31 would be
Answer:
$144,000
Explanation:
The computation of the estimation of the inventory cost at the ending is shown below:
As we know that
Ending inventory = Opening inventory + net purchase - cost of goods sold
= opening inventory + purchase - purchase return - cost of goods sold
= $220,000 + $172,000 - $8,000 - ($300,000 ÷ 125%)
= $220,000 + $164,000 - $240,000
= $144,000
We simply applied the above formula to determine the ending inventory cost
Which of the following is used to manage employee performance and to align all employees with the key objectives a firm needs to achieve its strategic goals? Group of answer choices functional planning system annual HR benchmarks high performance work system HR Scorecard
Answer:
HR scorecard
Explanation:
This is all done within a company using an HR scorecard. HR scorecards are used by the human resources department in order to manage individual employee performance as well as making sure all the employees are aligned with the firm's current objective and strategic goals. These scorecards give managers the ability to assign financial and non-financial goals, monitor and assess performances, and even make necessary changes both quickly and effectively.
Which of the following could be considered a cost driver? Select one: a. A service provided by an architecture firm b. A product produced by a manufacturer c. A tax return prepared by a local CPA firm d. All of the above
Answer: d. All of the above
Explanation:
A cost driver refers to the activity that causes an actual change in the cost of a transaction and by extension it's local cost.
For example, cost driver of labor would be the number of people working or cost driver of Electricity paid would be the actual number of units consumed.
In the above, the products and services mentioned are the integral activities for those firms so they are cost drivers to those firms.
On January 1, ABC sold $30,000 in products to a customer on account. Then on January 10, ABC collected the cash on that account. What is the impact on ABC's accounting equation from the collection of cash on January 10?
Answer:
Collection of Cash on January 10
The Impact on ABC's accounting equation:
The Assets (Cash) will increase by $30,000 and another type of Assets (Accounts Receivable) will decrease by $30,000.
The collection of cash on January 10 does not affect the other side of the accounting equation.
Explanation:
The accounting equation shows that for every transaction, the Assets will be equal to the Liabilities + Owners' Equity. The explanation is that the financial resources which an entity owns actually belong to either creditors or equity owners in the form of financial obligations (liabilities) or contributed capital plus some parts of the net income over the years which the entity has reinvested in its business.
The accounting equation is the fulcrum of the double-entry accounting system. On a company's balance sheet, the accounting equation shows that assets equal the sum of the company's liabilities and shareholders' equity.
g On July 1 the Swifty Corporation paid $18240 to Acme Realty for 6 months rent beginning July 1. Prepaid Rent was debited for the full amount. If financial statements are prepared on July 31, the adjusting entry to be made by the Swifty Corporation is:
Answer:
The adjusting entry to be made by the Swifty Corporation is:
Rent Expense $3,040 (debit)
Prepaid Rent $3,040 (credit)
Explanation:
On the day the cash was paid, the entries will be :
Prepaid Rent $18240 (debit)
Cash $18240 (credit)
On the day the financial statements are prepared, rent for one month would have expired, the adjusting entries will be :
Rent Expense $3,040 (debit)
Prepaid Rent $3,040 (credit)
Conclusion :
We are recognizing an Expense ; Rent Expense and de-recognizing an Asset : Rent Prepaid.