Answer:
1. Interest Rate Risk ⇒ Risk associated with price fluctuations caused by interest rate changes.
2. Reinvestment Risk ⇒ This is the risk that a firm's cost of debt will fall and as a result reinvested coupon payments will earn less yield moving forward.
3. Default Risk ⇒ Risk that the Borrower will not make payments on time or in full.
4. Floating rate bond ⇒ Coupon Payments typically follow a benchmark market rate.
5. Zero Coupon Bond ⇒ All of the yield is determined by the difference in the price of the bond and the par value.
6. Consol Bond ⇒ Can be assessed using the perpetuity formula.
Check my workCheck My Work button is now enabledItem 15 Time Remaining 2 hours 27 minutes 1 second02:27:01 Exercise 8-16 Direct Materials and Direct Labor Budgets [LO8-4, LO8-5] The production department of Zan Corporation has submitted the following forecast of units to be produced by quarter for the upcoming fiscal year: 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter Units to be produced 5,000 8,000 7,000 6,000 In addition, 6,000 grams of raw materials inventory is on hand at the start of the 1st Quarter and the beginning accounts payable for the 1st Quarter is $2,880. Each unit requires 8 grams of raw material that costs $1.20 per gram. Management desires to end each quarter with an inventory of raw materials equal to 25% of the following quarter’s production needs. The desired ending inventory for the 4th Quarter is 8,000 grams. Management plans to pay for 60% of raw material purchases in the quarter acquired and 40% in the following quarter. Each unit requires 0.20 direct labor-hours and direct laborers are paid $11.50 per hour. Required: 1.&2. Calculate the estimated grams of raw material that need to be purchased and the cost of raw material purchases for each quarter and for the year as a whole. 3. Calculate the expected cash disbursements for purchases of materials for each quarter and for the year as a whole. 4. Calculate the estimated direct labor cost for each quarter and for the year as a whole
Answer:
Zan Corporation
Production Department
Quarters 1st 2nd 3rd 4th Total
1. Raw materials 50,000g 62,000g 54,000g 44,000g 210,000g
Purchased
2. Cost of purchases $60,000 $74,400 $64,800 $52,800 $252,000
3. Total disbursement $38,880 $68,640 $68,640 $57,520 $233,680
4. Direct labor costs $11,500 $18,400 $16,100 $13,800 $59,800
Explanation:
a) Data and Calculations:
Forecast Production
Quarters 1st 2nd 3rd 4th Total
Units to be produced 5,000 8,000 7,000 6,000 26,000
Grams required 40,000g 64,000g 56,000g 48,000g 208,000
Beginning Inventory 6,000g 16,000g 14,000g 12,000g 6,000g
Raw materials purchase 50,000g 62,000g 54,000g 44,000g 210,000g
Ending Inventory 19,200g 16,800g 14,400g 9,600g
Cost of purchases $60,000 $74,400 $64,800 $52,800 $252,000
Beginning Inventory cost 7,200 19,200 16,800 14,400
Total Cost of materials $67,200 $93,600 $81,600 $67,200
Cost of materials used $48,000 $76,800 $67,200 $57,600
Grams required by 1 unit 8 gm
Cost of 1 gm = $1.20
Ending Raw materials
25% of next quarter's 16,000gm 14,000gm 12,000gm 8,000gm
Accounts Payable
Beginning balance $2,880
Cost of purchases $60,000 $74,400 $64,800 $52,800 $252,000
Cash Disbursement for purchases of materials:
Cash Payment: 1st 2nd 3rd 4th Total
60% quarter acquired 36,000 44,640 38,880 31,600
40% in ffg quarter 2,880 24,000 29,760 25,920
Total disbursement $38,880 $68,640 $68,640 $57,520 $233,680
Cost of direct labor:
Each unit requires 0.20 direct labor-hours at $11.50 per hour
Quarters 1st 2nd 3rd 4th Total
Units to be produced 5,000 8,000 7,000 6,000 26,000
Total direct labor-hours 1,000 1,600 1,400 1,200 5,200
Direct labor costs $11,500 $18,400 $16,100 $13,800 $59,800
A company had the following partial list of account balances at year-end: Sales returns and allowances $ 500 Account Receivables 9,000 Sales Discount 700 Sales Revenue 57, 200 Selling and Administrative Expense 300 The amount of net sales reported on the income statement would be:
Answer:
$56,000
Explanation:
The computation of net sales is shown below.
For the net sales reported, we'll add the sales revenue and deduct the sales return and allowances with sales discount
Net sales reported = Sales revenue - sales return and allowance - sales discount
= $57,200 - $500 - $700
= $56,000
Echota Corporation has the following capital stock outstanding at December 31, 2020: 7% Preferred stock, $100 par value, cumulative 15,000 shares issued and outstanding $1,500,000 Common stock, no par, $10 stated value, 500,000 shares authorized, 350,000 shares issued and outstanding 3,500,000 The preferred stock was issued at $120 per share. The common stock was issued at an average per share price of $14. Prepare the paid-in capital section of the balance sheet at December 31, 2020. (Enter the account name only and do not provide the descriptive information provided in the question.)
Answer:
$6,700,000
Explanation:
Preparation of the paid-in capital section of the balance sheet at December 31, 2020.
Paid-in capital section of the balance sheet at December 31, 2020
7% Preferred stock, $100 par value, cumulative15,000 shares issued and outstanding $1,500,000
Add Common stock, no par, $10 stated value, 500,000 shares authorized, 350,000 shares issued andoutstanding 3,500,000
Total capital stock5,000,000
($1,500,000+3,500,000)
Add Additional paid-in capitalIn excess of par—preferred stock$ 300,000
(15,000 shares × $20 )
Add In excess of stated value—common stock1,400,000
(350,000 shares × $4)
Total paid-in capital$6,700,000
Therefore the paid-in capital section of the balance sheet at December 31, 2020 is $6,700,000
asset- backed security definition.
Answer:
"asset-backed security is an investment security a bond or note which is collateralized by a pool of assets, such as loans, leases, credit card debt, royalties, or receivables. An is similar to mortgage-backed security, except that the underlying securities are not mortgage-based."
Crane Company adopted the dollar-value LIFO method of inventory valuation on December 31, 2019. Its inventory at that date was $1120000 and the relevant price index was 100. Information regarding inventory for subsequent years is as follows: Date Inventory at Current Prices Current Price Index December 31, 2020 $1271000 108 December 31, 2021 1417000 126 December 31, 2022 1623000 131 What is the cost of the ending inventory at December 31, 2020 under dollar-value LIFO
Answer:
See below
Explanation:
Crane corporation
Ending inventory
2019 $1,120,000
2020 $1,271,000/1.08 = $1,176,852
Ending inventory [$1,120,000+ (1,176,852 - $1,120,000)× 1.08]
= [$1,120,000 + $61,400]
= $1,181,400
2021 $1,417,000/1.26 = $1,124,603
2022 $1,623,000/1.31 = $1,238,931
Ending inventory [$1,124,603 + ($114,328 × 1.31)]
= $1,124,603 + $149,770
= $1,274,373
Therefore, the cost of the ending inventory at December 31, 2020 under dollar value LIFO would be $1,274,373
Which organization would you work best in, an organically or mechanistically structured one, and why?
Answer:
i dont know
Explanation:
During 2019, equipment with a book value of $49,000 and an original cost of $255,000 was sold at a loss of $4,800. 1. How much cash did Anders receive from the sale of equipment? 2. How much depreciation expense was recorded on equipment during 2019? 3. What was the cost of new equipment purchased by Anders during 2019?
Answer:
1) 44200
2) & 3) Balancing figure of provision for depreciation account, equipment account give depreciation on equipment sold, new equipment purchased.
Explanation:
1) Cash received for sale of equipment = Current Book Value - Loss at sale
49000 - 4800 = 44200
2) 'Depreciation on equipment for current year' can be solved by making - equipment ac & provision for depreciation account.
Equipment opening balance at dr side, closing balance at cr side ; & provision opening balance cr side, closing balance dr side. Provision for depreciation ac dr balancing figure, is the depreciation on sold asset upto 2015, transferred to asset account cr side.3) Depreciation (transferred), Loss on sale, & sale amount credited to equipment ac. Balancing figure on dr side of equipment ac shows new equipment purchased during the year.
For each of the following transactions that occur in their lives, identify whether it is included in the calculation of U.S. GDP as part of consumption (C), investment (I), government purchases (G), exports (X), or imports (M).
a. Kevin buys a bottle of Italian wine.
b. The state of Pennsylvania repaves highway PA 320, which goes through the center of Swarthmore.
c. Maria's father in Sweden orders a bottle of Vermont maple syrup from the producer's website.
d. Kevin's employer upgrades all of its computer systems using U.S.-made parts.
Answer:
a. Imports (M), b. Government Expenditure (G), c. Exports (X), d. Investment 'I'
Explanation:
a) 'Kevin buys a bottle of Italian wine' is a part of US Imports (M)
b) 'The state of Pennsylvania repaves highway PA 320' is a part of US Government Expenditure (G)
c) 'Maria's father in Sweden orders a bottle of Vermont maple syrup from the producer's website' is a part of US Exports (X)
d) 'Kevin's employer upgrades all of its computer systems using U.S.-made parts' is a part of US Investment 'I'
Flexible Budget for Selling and Administrative Expenses for a Service Company Cloud Productivity Inc. uses flexible budgets that are based on the following data: Sales commissions 14% of sales Advertising expense 18% of sales Miscellaneous administrative expense $6,500 per month plus 12% of sales Office salaries expense $28,000 per month Customer support expenses $12,000 per month plus 20% of sales Research and development expense $30,000 per month Prepare a flexible selling and administrative expenses budget for March for sales volumes of $400,000, $500,000, and $600,000. (Use Exhibit 5 as a model.)
Answer:
Selling and administrative expenses budget for March
Sales Volume $400,000 $500,000 $600,000
Sales commissions at 14 % $56,000 $70,000 $84,000
Advertising expense at 18% $72,000 $90,000 $108,000
Miscellaneous at $6,500 + 12% $54,500 $66,500 $78,500
Office salaries at $28,000 $28,000 $28,000
Customer support at $12,000 + 20% $92,000 $112,000 $132,000
Research and development at $30,000 $30,000 $30,000
Total $332,500 $396,500 $460,500
Explanation:
A flexible is a budget that is adjusted to the actual activity. Thus, adjust the costs items to the appropriate Sales Volumes.
Southwestern Edison Company leased equipment from Hi-Tech Leasing on January 1, 2018. Hi-Tech manufactured the equipment at a cost of $85,500.
Other information:
Lease term 4 years
Annual payments $31,000 on January 1 each year
Life of asset 4 years
Fair value of asset $110,890
Implicit interest rate 8%
Incremental rate 8%
There is no expected residual value.
Required:
Prepare appropriate journal entries for Hi-Tech Leasing for 2018. Assume a December 31 year-end. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Round your answers to the nearest whole dollar amounts.)
1.Record the lease.
2.Record the cash received
3.Record the interest revenue
The appropriate journal entries for Hi-Tech Leasing for 2018 will be :-
January 1, 2018
Debit Lease receivable $124,000
Credit Unearned interest revenue $38,500
Credit Equipment inventory $85,500
Debit Cash $31,000
Credit Lease receivable $31,000
December 31, 2018
Debit Unearned interest revenue $4,360
Credit Interest revenue $4,360
What is a journal entry?A journal entry is used to record a business transaction in a company's accounting records. A journal entry is typically recorded in the general ledger. However, it may also be recorded in a subsidiary ledger before being summarized and rolled forward into the general ledger.
Preparation of Journal entries for Hi-Tech Leasing for 2018:-
1. To record the lease on January 1, 2018
Debit Lease receivable $124,000
($31,000 x 4)
Credit Unearned interest revenue $38,500
(124,000-85,500)
Credit Equipment inventory $85,500
2. To record the cash received:-
Debit Cash $31,000
Credit Lease receivable $31,000
3. To record the interest revenue on December 31, 2018
Debit Unearned interest revenue $4,360
[($85,500- $31,000) x 8%]
Credit Interest revenue $4,360
Therefore, the necessary journal entries for Hi-Tech Leasing for 2018 is prepared.
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Michelle Hamilton and Bill Rossi decide to form a partnership. Hamilton invests $35,000 cash and accounts receivable of $30,000 less allowance for doubtful accounts of $2,000. Rossi contributes $25,000 cash and equipment having a $6,000 book value. It is agreed that the allowance account should be $3,000 and the fair value of the equipment is $10,000. Prepare the necessary journal entry to record the formation of the partnership.
Answer:
Dr Cash $60,000
Dr Accounts Receivable$30,000
Dr Equipment $10,000
Cr Allowance for Doubtful Accounts $3,000
Cr Hamiltion, Capital $62,000
Cr Rossi, Capital $35,000
Explanation:
Preparation to record the necessary journal entry to record the formation of the partnership.
Dr Cash $60,000
($35,000 + $25,000)
Dr Accounts Receivable$30,000
Dr Equipment $10,000
Cr Allowance for Doubtful Accounts $3,000
Cr Hamiltion, Capital $62,000
($35,000 + $30,000 – $3,000)
Cr Rossi, Capital $35,000
($25,000 + $10,000)
For the coming year, Cleves Company anticipates a unit selling price of $100, a unit variable cost of $60, and fixed costs of $480,000.
Required:
1. Compute the anticipated break-even sales in units.
2. Compute the sales (units) required to realize a target profit of $240,000.
3. Construct a cost-volume-profit chart, assuming maximum sales of 20,000 units within the relevant range. From your chart, indicate whether each of the following sales levels would produce a profit, a loss, or break-even.
$1,200,000 SelectBreak-evenLossProfitItem 3
$1,000,000 SelectBreak-evenLossProfitItem 4
$800,000 SelectBreak-evenLossProfitItem 5
$400,000 SelectBreak-evenLossProfitItem 6
$200,000 SelectBreak-evenLossProfitItem 7
4. Determine the probable income (loss) from operations if sales total 16,000 units.
Solution :
1. The break even sales in units is given by :
Break even sales in units = [tex]$\frac{\text{fixed cost}}{\text{contribution per unit}}$[/tex]
Where, contribution per unit = selling price per unit - variable cost per unit
The anticipated break even sales in units of Cleaves company in the coming year is :
Break even sales in units = [tex]$\frac{480,000}{40}$[/tex]
Contribution per unit = $ 100 - $ 60
= $ 40
So the company anticipates its breakeven sales at 12,000 units.
2. In order tot earn profit the sales generated should overcome the breakeven point. The desired profit is $240,000, the sales required to earn the desired profit can be computed using the formula :
Desired sales in units = [tex]$\frac{\text{fixed cost + desired cost}}{\text{contribution per unit}}$[/tex]
[tex]$=\frac{480,000+240,000}{40}$[/tex]
= 18,000 units
Thus, the sales in units required to earn a profit of $ 240,000 are 18,000 units.
3. The sales in excess of the breakeven point would yield a profit on the contrary the sales below the breakeven point would result in a loss.
In the given sales in dollar = breakeven sales in units x selling price per unit
= 12,000 x 100
= $ 1,200,000
∴ the sales above $1,200,000 would result in a profit whereas the sales below $1,200,000 would result in loss.
The cost volume profit chart below indicates the profit, loss, breakeven at different sales levels :
Sales levels Result
1,200,000 Breakeven
1,000,000 Loss
800,000 Loss
400,000 Loss
200,000 Loss
4. The income on sale of 16,000 units is computed below :
Particulars Amount is $
Sales 1,600,000
Less : variable cost 960,000
Contribution 640,000
Less : Fixed cost 480,000
Profit 160,000
The break-even sales in units are calculated as follows:
What is Break Even Point ?Breakeven unit sales =
In this case, contribution per unit equals selling price per unit minus variable cost per unit.
The Cleaves Company's estimated break-even unit sales for the upcoming year are:
Breakeven unit sales =
Contribution per unit equals $100 minus $60.
= $ 40
The business therefore projects 12,000 units as its breakeven sales.
(2) 2. Sales must exceed the breakeven point in order to create a profit. The sales needed to achieve the desired profit, which is $240,000, can be calculated using the formula:
Ideally, sales would equal
= 18,000 units
Thus, the sales in units required to earn a profit of $ 240,000 are 18,000 units.
(3) 3. Sales beyond the breakeven threshold would result in a profit; sales below the breakeven point, on the other hand, would result in a loss.
Sales in dollars for the given period equal breakeven sales in units times selling price per unit.
= 12,000 x 100
= $ 1,200,000
Sales that exceed $1,200,000 generate a profit, whilst sales that go below that threshold generate a loss.
The following cost volume profit chart shows the profit, loss, and breakeven points at various sales levels:
Resulting sales levels
Breakeven is 1,000,000
1,000,000 Loss
800,000 Loss
400,000 Loss
200,000 Loss
4. The earnings from the sale of 16,000 units are calculated as follows:
Particulars The amount is $
Sales 1,600,000
Variable cost is 960,000 less.
640,000 dollars were contributed.
Less: 480,000 in fixed costs.
Gain of 160,000
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Why do you look like dababy?
Answer:
nah i am dababy if you try to be me again i will turn you into a convertible
Explanation:
Inventory records for Dunbar Incorporated revealed the following:
Date Transaction Number Unit
of Units Cost
Apr. 1 Beginning inventory 550 $2.33
Apr. 20 Purchase 310 2.68
Dunbar sold 560 units of inventory during the month. Ending inventory assuming weighted-average cost would be:__________.
a. $737.
b. $694.
c. $817.
d. $752.
Answer:
a. $737.
Explanation:
The computation of the ending inventory using weighted average cost is shown below:
But before that first determine the average cost per unit
= (Beginning cost + purchase cost) ÷ (Beginning units + purchased units)
= (550 × $2.33 + 310 × $2.68) ÷ (550 units + 310 units)
= ($1,281.5 + $830.8) ÷ (860 units)
= $2.46
Now the ending inventory is
= (860 units - 560 units) × $2.46
= $737
Wattan Company reports beginning inventory of 14 units at $42 each. Every week for four weeks it purchases an additional 14 units at respective costs of $43, $44, $47, and $52 per unit for weeks 1 through 4. Compute the cost of goods available for sale and the units available for sale for this four-week period. Assume that no sales occur during those four weeks.
Answer:
$3192
70
Explanation:
the cost of goods available for sale = (14 X 42) + (14 X 43) + (14 X 44) (14 X 47) + (14 X 52) = $3192
14 X 5 = 70
A school realizes that they need a new copy machine for their main office. The copy machine costs $4,500. After speaking with the financial advisor, they decide to pay 10% of the cost of the machine in cash and finance the rest through their credit union. How much is their monthly payment if the credit union will charge 2% per year compounded monthly for 2 years
Answer:
The monthly payment is $172.29
Explanation:
The computation of the monthly payment is shown below:
Given that
NPER = 2 × 12 = 24
RATE = 2% ÷ 12 = 0.1666%
PV = $4,500 - $4500 × 10% = $4,050
FV = 0
The formula is given below:
= PMT(RATE,NPER,PV,FV,TYPE)
After applying the above formula
The monthly payment is $172.29
An investor purchased a "par bond" for $300 with the principal $300. Over n = 5 years the bond will pay 8% coupon annually. Find the IRR of the cash flow stream (also called Yield to Maturity).
Answer:
8%
Explanation:
Internal rate of return is the discount rate that equates the after-tax cash flows from an investment to the amount invested
IRR can be calculated with a financial calculator
Cash flow in year 0 = $-300
Cash flow each year from year 1 to 4 = [tex]\frac{8}{100}[/tex] × $300 = $24
Cash flow in year 5 = $300 + 24 = $324
IRR = 8%
To find the IRR using a financial calculator:
1. Input the cash flow values by pressing the CF button. After inputting the value, press enter and the arrow facing a downward direction.
2. After inputting all the cash flows, press the IRR button and then press the compute button.
Theodora attended an interview for a job with a manufacturing firm. As she met all the minimum requirements for the post, she was not surprised when she received a formal job offer. However, a few days later, the firm informed her that the job offer had been revoked because the manager in that department felt that women should not work in a manufacturing environment. The firm assured her that the matter was nothing personal and wished her luck for her career.
Which of the following laws has the manufacturing firm violated?
A. Title VII of the 1964 Civil Rights Act
B. Americans with Disabilities Act
C. Worker Adjustment and Retraining Notification Act
D. Age Discrimination in Employment Act
E. Fair Labor Standards Act
Answer:
A. Title VII of the 1964 Civil Rights Act
Explanation:
Title VII of the Civil Rights Act of 1964 can be regarded as a federal law which offer protection to employees from discrimination from some particular characteristics such as race, national origin as well as color, even religion.
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Pronghorn Corporation shipped $20,800 of merchandise on consignment to Gooch Company. Pronghorn paid freight costs of $2,200. Gooch Company paid $550 for local advertising, which is reimbursable from Pronghorn. By year-end, 57% of the merchandise had been sold for $22,300. Gooch notified Pronghorn, retained a 10% commission, and remitted the cash due to Pronghorn.Prepare Pronghorn's entry when the cash is received. (Round answers to 0 decimal places, e.g. 1,525. Credit account titles are automatically indented when amount is entered. Do not indent manually.)
Answer:
Date Account Title Debit Credit
Year end Cash $19,520
Advertising expenses $550
Commission expenses $2,230
Revenue from Consignment $22,300
Cost of Goods sold $13,110
Inventory on Consignment $13,110
Cash received by Pronghorn:
= Cash - Advertising - Commission
= 22,300 - 550 - (10% * 22,300)
= 22,300 - 550 - 2,230
= $19,520
Cost of Goods sold:
= 57% * (Value of goods + Shipping)
= 57% * (20,800 + 2,200)
= $13,110
common stock definition.
Answer:
Common stock is a security that represents ownership in a corporation.
Explanation:
Holders of common stock elect the board of directors and vote on corporate policies.
Most effective bad-news messages contain a variety of components. Indirect bad-news messages contain the following components in this order: greeting, buffer, rationale for the bad news, the bad news, an expression of concern, an explanation of impacts on the bad-news recipients, possible solutions and a focus on the future, an expression of goodwill, and a closing.
Assume that you manufacture and sell exercise equipment. A customer recently purchased an elliptical from you. He sent a message requesting the replacement of a broken pedal. The parts warranty is for three months. The customer's message was sent to you four months after the purchase, so the warranty is no longer in effect. You will write a message to him denying his claim.
Match each of the options below to the items.
a. Closing
b. Concern
c. Rationale
d. Buffer
e. Bad News
f. Greeting
g. Possible Solutions
h. Focus on the Future
1. Since it's been four months since your purchase. the broken pedal is no longer under warranty.
2. We know it's inconvenient while your elliptical is not in use, and we'd like to help you get your pedal replaced as quickly as possible.
3. Match each of the options above to the items below.
4. Since it's been four months since your purchase, the broken pedal is no longer under warranty.
5. We know it's inconvenient while your elliptical is not in use, and we'd like to help you get your pedal replaced as quickly as possible.
6. Best wishes, Jenny Peterson
Answer:
1. Since it's been four months since your purchase. the broken pedal is no longer under warranty. ⇒ BAD NEWS.
This will fall under the Bad News because it is news that the customer would not want to receive.
2. We know it's inconvenient while your elliptical is not in use, and we'd like to help you get your pedal replaced as quickly as possible.⇒ CONCERN.
Falls under concern because it expresses sympathy at the customer's situation.
6. Best wishes, Jenny Peterson ⇒ CLOSING
This falls under Closing because such salutations are used to end a letter or response.
leases telecommunications equipment from Photon Company. Assume the following data for equipment leased from Photon Company. The lease term is 5 years and requires equal rental payments of $31,000 at the beginning of each year. The equipment has a fair value at the commencement of the lease of $150,000, an estimated useful life of 8 years, and a guaranteed residual value at the end of the lease of $15,500. Photon set the annual rental to earn a rate of return of 6%, and this fact is known to Callaway. The lease does not transfer title or contain a bargain purchase option, and is not a specialized asset.
Required:
How should Callaway classify this lease?
Answer:
Financial lease
Explanation:
The computation is shown below:
The Present value of minimum lease payments is
= Present value of rental payments + Present value of GRV
= $31,000 × Cumulative PV factor at 6% for 5 periods of annuity due + $15,500 × PV Factor at 6% for 5th period
= $31,000 × 4.46511 + $15,500 × 0.79209
= $138,418 + $12,277
= $150,695
Since the lease payments present value would be more than 90% of the fair value so it would be classified as the financial lease
How fast do you guys help students answer questions?
Answer:
it depends on who is answering, what the question is, and what you want in the question. regularly answers come within 5 minutes, but if its really complicated then those questions almost never get answered
The information below pertains to Barkley Company for 2015.
Net income for the year $2,240,000
9% convertible bonds issued at par ($1,000 per bond); each bond is convertible into 30 shares of common stock 2,112,000
6% convertible, cumulative preferred stock, $100 par value; each share is convertible into 3 shares of common stock 4,707,000
Common stock, $10 par value 6,959,000
Tax rate for 2015 45%
Average market price of common stock $25 per share
There were no changes during 2015 in the number of common shares, preferred shares, or convertible bonds outstanding. There is no treasury stock. The company also has common stock options (granted in a prior year) to purchase 75,800 shares of common stock at $15 per share.
(a) Compute basic earnings per share for 2015. (Round answer to 2 decimal places, e.g. $2.55.)
Basic earnings per share
$
(b) Compute diluted earnings per share for 2015. (Round answer to 2 decimal places, e.g. $2.55.)
Diluted earnings per share
$
Blackwater Company has a foreign branch that earns income before income taxes of $500,000. Income taxes paid to the foreign government are $150,000 or 30%. Sales and other taxes paid to the foreign government are $100,000. Blackwater Company must include the $500,000 of foreign branch income in determining its home country taxable income. In determining its taxable income, Blackwater can choose between taking a deduction for all foreign taxes paid or a credit only for foreign income taxes paid. The corporate income tax rate in Blackwater’s’ home country is 40%.
Determine whether Blackwater would be better off taking a deduction of a credit for foreign taxes paid (FTC).
a. If foreign tax rate increased from 30% to 50%, how would it change your answer?
b. If foreign tax rate decreased from 30% to 10%, how would it change your answer?
b. If parent country’s tax rate decreased from 40% to 20%, how would it change your answer?
c. If local taxes were $250,000, how would it change your answer?
Answer:
Blackwater Company
a. It is generally better for Blackwater to take a credit for foreign taxes paid than taking it as a deduction.
A good look at the tables below show that from (a) to (c) there is no change in the above answer.
Explanation:
a) Data and Calculations:
Foreign income before taxes = $500,000
Foreign Taxes a deduction from home taxable income:
Foreign Foreign FTC as a Home Tax
Tax Rates Income Deduction Payable
30% $500,000 $150,000 $140,000 ($500,000 - $150,000*40%)
50% $500,000 $250,000 $100,000 ($500,000-$250,000*40%)
10% $500,000 $50,000 $180,000 ($500,000 - $50,000*40%)
30% $500,000 $150,000 $70,000 ($500,000 - $150,000*20%)
30% $500,000 $150,000 $250,000
Foreign Taxes treated as a credit:
Foreign Foreign FTC as a Home Tax
Tax Rates Income Home Tax (40%) Credit Payable
30% $500,000 $200,000 (40%) $150,000 $50,000
50% $500,000 $200,000 (40%) $250,000 ($50,000)
10% $500,000 $200,000 (40%) $50,000 $150,000
30% $500,000 $100,000 (20%) $150,000 ($50,000)
30% $500,000 $250,000 (0%) $150,000 $100,000
A food worker has prepared a large pot of rice that must be cooled. How should the food worker cool the rice safely?
Answer:
Cover the pot and leave it at room temperature.
Explanation:
That's how a food worker would cool rice safely.
Answer: Cover the pot and leave it at room temperature.
Explanation: took the test
How can creating a customer profile help entrepreneurs identify their target market
Creating a customer profile helps identify markets because the information on it is too persuade the buyer, customer or Purchaser. I'm in 6th grade don't judge x
Bruce Corporation makes four products in a single facility. These products have the following unit product costs:
Products
A B C D
Direct materials $16.10 $20.00 $13.00 $15.70
Direct labor 18.10 21.50 15.90 9.90
Variable manufacturing overhead 4.90 6.10 8.60 5.60
Fixed manufacturing overhead 28.00 14.90 15.00 17.00
Unit product cost 67.10 62.50 52.50 48.20
Additional data concerning these products are listed below.
Products
A B C D
Grinding minutes per unit 2.25 1.35 0.95 0.55
Selling price per unit $81.20 $73.60 $70.40 $65.10
Variable selling cost per unit $3.10 $3.60 $3.30 $4.00
Monthly demand in units 3,500 2,500 2,500 4,500
The grinding machines are potentially the constraint in the production facility. A total of 10,500 minutes are available per month on these machines. Direct labor is a variable cost in this company.
Required:
Which product makes the MOST profitable use of the grinding machines?
Answer:
Product D
Explanation:
Calculation to determine Which product makes the MOST profitable use of the grinding machines
First step is to calculate the Variable cost per unit
Products
A B C D
Direct materials $16.10 $20.00 $13.00 $15.70
Add Direct labor 18.10 21.50 15.90 9.90
Add Variable manufacturing overhead 4.90 6.10 8.60 5.60
Add Variable selling cost per unit $3.10 $3.60 $3.30 $4.00
Variable cost per unit $42.20 $51.60 $40.80 $35.20
Now let calculate the product that makes the MOST profitable use of the grinding machines
Selling price per unit $81.20 $73.60 $70.40 $65.10
Less Variable cost per unit $42.20 $51.60 $40.80 $35.20
=Contribution margin per unit $39 $22 $29.60 $29.90
÷Grinding minutes per unit 2.25 1.35 0.95 0.55
=Contribution per grinding minutes $17.33 $16.30 $31.16 $54.36
Therefore Based on the above calculation the product that makes the MOST profitable use of the grinding machines is PRODUCT D because it has the highest Contribution per grinding minutes of the amount of $54.36
Given the following financial structure for Company S for all of 2016:
Common stock, $1 par value, 800,000 shares issued and outstanding all year.
Convertible preferred stock, 50,000 shares, $100 par value, 6% cumulative dividend, each share convertible into 5 shares of common stock.
Convertible bonds, $500,000 face value, 8% stated rate, each $1,000 bond is convertible into 20 shares of common stock.
Stock options, 100,000 options outstanding, each option convertible for one share of stock at an option price of $60 per share.
Additional information:
1. The convertible bonds were issued at par in 2015.
2. The average market price per share for the common stock was $80 for the year.
3. The income tax rate for Company S is 30 percent.
4. Net income for Company S for 2016 was $$2,600,000.
A. Calculate Basic EPS (carry calculations to 2 decimal places).
B. Show your calculations for the numerator and denominator effect of each of the above convertible securities.
C. From your calculations in Part B, complete the schedule to calculate the dilution index of each convertible security, then indicate the ranking (most dilutive = 1) of each convertible security.
D. Using the indexes above to incrementally evaluate the dilutive effect, calculate diluted earnings per share in the space provided on the answer sheet. Show the DEPS calculation at each incremental stage, and carry the calculation to 2 decimal places. CIRCLE the DEPS number that would be displayed in the financials.
Answer:
Explanation:
A.)
The Basic EPS can be determined by using the formula:
[tex]\mathtt{Basic \ EPS = \dfrac{Net \ income \ attributabe \ to\ common \ stock \ holders }{\text{common stock outstanding throughout the year}} }[/tex]
[tex]\text{Given Net income = \$2,600,000}[/tex]
[tex]\text{Net income available for common stock holders = }[/tex][tex]\text{ Net income given less dividend}[/tex]
[tex]\text{ to preferred holders of stock}[/tex]
[tex]\mathtt{=$2,600,000 - $100 \times 50000\times 6\%}[/tex]
[tex]=\$2,300,000[/tex]
[tex]\text{Common stock} = $800,000[/tex]
∴
[tex]\mathbf{Basic \ EPS = \dfrac{\$2,300,000}{800,000} }[/tex]
[tex]\mathbf{Basic \ EPS = \$2.88 \ per \ common \ stock}[/tex]
B.)
The calculations for the numerator and denominator effect are:
[tex]\text{Calculation of the effect on incremental EPS}[/tex]
Convertible on preferred stock [tex]\mathtt{=\dfrac{500,000 \times 100 \times 6\%}{50000\times 5}}[/tex]
[tex]=1.20[/tex]
Convertible Bond [tex]=\dfrac{500,000 \times 8\%\times 70\%}{\dfrac{500,000}{1000\times 20}}[/tex]
= 2.80
Stock options [tex]= \dfrac{0}{100,000- (100,000\times \dfrac{60}{80})}[/tex]
= 0
Determination of the numerator & denominator effect for each convertible securities shown above are:
Numerator (N) Denominator (D) Dilution index = N/D
Net income $2,600,000
Less: Preferred $300000
Dividend
Common stock A
Net income $2,300,000 800,000 2.875
Add: Stock
Options (B) 0 25000
Total (C) = (A + B) $2300000 825000 2.788
Add: Convertible
Bonds (D) 428000 10000
Total (E) = (C+D) $2328000 835000 2.787
Add: Convertible
Preferred Stock (F) $300000 250000
Total (E) + (F) $2628000 1085000 2.422
C.)
Particulars Dilutive Index Rank (most dilutive is 1.)
Stock Option 2.788 1
Convertible Bonds 2.787 3
Preferred Stock 2.422 2
D.)
From above, the convertibles are diluted EPS (DEPS)
[tex]\text{ DEPS =Net income available common stockholders + net tax dividend on convertible securities}[/tex]÷ [tex]\text{weighted average no. of common shares + effect of convertible stock + convertible stock options}[/tex]
[tex]\text{DEPS (1{st} stage) for only common stock}= \dfrac{2300000}{800000} = \$2.88}[/tex]
[tex]\text{DEPS (2{st} stage)with \ stock \ options}= \dfrac{2300000+0}{800000+25000} = \$2.788}[/tex]
[tex]\text{DEPS (3{st} stage)with \ stock \ options \& preferred \ stock }= \dfrac{2300000+300000+0}{800000+250000+25000} = \$2.42}[/tex]