Answer:
years-of-service method or on a straight-line basis over the average remaining service life of active employees
Explanation:
Prior service cost (PSC) is simply defined is an instant hike or increase in PBO that is gotten or as a result of the retroactive application of hike or an increase in profits or benefits for service already given(rendered) the name "prior" service cost is given to it as a result of the service cost of previous years which was increased. An example, a defined benefit pension plan provides benefits equal to 4% of last salary for each year of service rendered. The plan is later worked on to increase the rate 4.23% and
the working on or amendment is is said to be retroactive. The present value of the increased benefits (.23%) earned prior to the adjustment or amendment is PSC. Sometimes, retroactive grant may lower the benefits for service already rendered. Amortization is an accounting technique. It is often used to constantly in a timely or periodic manner to reduce or lower the book value of a loan or intangible asset over a time period that is always set.
The amount to be amortized is gotten by giving equal amount of expense to each future period of service always for employee each and those who is mandated to receive benefits.
Striker Company estimates its expected cash receipts for the period to be $80,000 and its expected cash disbursements to be $70,000. The beginning cash balance for the period was $5,000. The management wants to maintain a minimum cash balance of $40,000. Knowledge Check 01 How much cash will the company need to borrow
Answer:
$25,000
Explanation:
Calculation for How much cash will the company need to borrow
Cash needed to borrow=$40,000 - (($80,000 - $70,000) + $5,000).
Cash needed to borrow=$40,000+$10,000-$5,000
Cash needed to borrow=$25,000
Therefore How much cash will the company need to borrow is $25,000
n the hybrid method is used to record the withdrawal of a partner, the partnershipMultiple Choicerevalues assets and liabilities and records goodwill to the continuing partner but not to the withdrawing partner.revalues liabilities but not assets, and no goodwill is recorded.can recognize goodwill but does not revalue assets and liabilities.revalues assets but not liabilities, and records goodwill to the continuing partner but not to the withdrawing partner.revalues assets and liabilities but does not record good
Answer:
revalues assets and liabilities but does not record goodwill.
Explanation:
A partnership can be defined as a type of business ownership in which two or more individuals come together to start up a business and share the profits made together.
When the hybrid method is used to record the withdrawal of a partner, the partnership revalues assets and liabilities but does not record goodwill.
what is the difference between capital and drawings ?
On June 30, 2021, Georgia-Atlantic, Inc. leased a warehouse equipment from IC Leasing Corporation. The lease agreement calls for Georgia-Atlantic to make semiannual lease payments of $559,946 over a four-year lease term, payable each June 30 and December 31, with the first payment at June 30, 2021. Georgia-Atlantic's incremental borrowing rate is 10%, the same rate IC uses to calculate lease payment amounts. Amortization is recorded on a straight-line basis at the end of each fiscal year. The fair value of the equipment is $3.8 million. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the tables provided.)
Required:
1. Determine the present value of the lease payments at June 30, 2021 that Georgia-Atlantic uses to record the right-of-use asset and lease liability.
2. What pretax amounts related to the lease would Georgia-Atlantic report in its balance sheet at December 31, 2021?
3. What pretax amounts related to the lease would Georgia-Atlantic report in its income statement for the year ended December 31, 2021?
(For all requirements, enter your answers in whole dollars and not in millions. Round your final answers to the nearest whole dollar.)
1. Present value
2. Pretax amount for liability Pretax amount for right-of-use asset
3. Pretax amount for interest expense Pretax amount for amortization expense
Answer:
1. $3,800,001
2. Pretax amount of liability $2,842,112
Pre tax amount of right to use asset $3,325,000
3. Pre tax amount of interest expense $162,003
Pre tax amount of amortization expenses $475,000
Explanation:
1. Calculation for the Present value
Using this formula
PV of minimum lease payments used to record right to use assets = Semi Annual lease payments * Cumulative PV Factor of annuity due for 8 periods at 5%
Where,
Semiannual lease payment = $559,946
Total semiannual payments = 4*2 = 8
Incremental borrowing rate = 10%, 5% semiannual
Let plug in the formula
PV of minimum lease payments used to record right to use assets= $559,946 * 6.78637
PV of minimum lease payments used to record right to use assets= $3,800,001
Therefore the Present value will be $3,800,001
2. Calculation for the Pretax amount for liability and Pretax amount for right-of-use asset
Calculation for Pretax amount of liability
First step is to calculate the Pretax amount of liability on 30.06.2021
Pretax amount of liability on 30.06.2021 = ($3,800,001 - $559,946)
Pretax amount of liability on 30.06.2021= $3,240,055
Second step is to calculate the Interest expense for 31.12.2021
Interest expense for 31.12.2021 = $3,240,055 * 5%
Interest expense for 31.12.2021= $162,003
Now let calculate the Pre tax amount for liability December 31, 2021
Pre tax amount for liability December 31, 2021 = $3,240,055 + $162,003 - $559,946
Pre tax amount for liability December 31, 2021= $2,842,112
Therefore The Pre tax amount for liability December 31, 2021 will be $2,842,112
Calculation for Pre tax amount of right to use asset
First step is to calculate the Depreciation on right to use assets for 2021
Depreciation on right to use assets for 2021 = $3,800,000 / 4 * 6/12
Depreciation on right to use assets for 2021 = $475,000
Now let calculate the Pre tax amount of right to use asset to be reported for 2021
Pre tax amount of right to use asset to be reported for 2021 = $3,800,000 - $475,000
Pre tax amount of right to use asset to be reported for 2021 = $3,325,000
Therefore Pre tax amount of right to use asset to be reported for 2021 will be $3,325,000
3. Calculation for Pretax amount for interest expense Pretax amount for amortization expense
Calculation for Pretax amount for interest expense
Pre tax amount of interest expense = $3,240,054 * 5%
Pre tax amount of interest expense= $162,003
Therefore the Pre tax amount of interest expense will be $162,003
Calculation for Pre tax amount of amortization expenses
Pre tax amount of amortization expenses = $3,800,000 / 4 * 6/12
Pre tax amount of amortization expenses = $475,000
Therefore The Pre tax amount of amortization expenses will be $475,000
Selected transactions for Therow Corporation during its first month in business are presented below.
Sept. 1 Issued common stock in exchange for $20,000 cash received from investors.
5 Purchased equipment for $9,000, paying $3,000 in cash and the balance on account.
8 Performed services on account for $18,000.
14 Paid salaries of $1,200.
25 Paid $4,000 cash on balance owed for equipment.
30 Paid $500 cash dividend.
Required:
a. Prepare a tabular analysis of the transactions.
b. Journalize the transactions. Do not provide explanations.
c. Post the transactions to T-accounts.
Answer:
Therow Corporation
a) Tabular Analysis of Transactions:
Assets = Liabilities + Equity
1. Cash $20,000 = + Common Stock $20,000
2. Cash -$3,000
Equipment $9,000 = $6,000
3. Accounts
Receivable $18,000 = + Retained Earnings $18,000
4. Cash -$1,200 + Retained Earnings -$1,200
5. Cash -$4,000 -$4,000
6. Cash -$500 + Retained Earnings -$500
b. Sept. 1:
Debit Cash $20,000
Credit Common Stock $20,000
Sept. 5:
Debit Equipment $9,000
Credit Cash $3,000
Credit Accounts Payable $6,000
Sept. 8:
Debit Accounts Receivable $18,000
Credit Service Revenue $18,000
Sept. 14:
Debit Salaries Expense $1,200
Credit Cash $1,200
Sept. 25:
Debit Accounts Payable $4,000
Credit Cash $4,000
Sept. 30:
Debit Dividends $500
Credit Cash $500
c. T-accounts:
Cash
Account Titles Debit Credit
Common Stock $20,000
Equipment $3,000
Salaries Expense 1,200
Accounts payable 4,000
Dividends 500
Accounts Receivable
Account Titles Debit Credit
Service Revenue $18,000
Common Stock
Account Titles Debit Credit
Cash $20,000
Equipment
Account Titles Debit Credit
Cash $3,000
Accounts payable 6,000
Accounts Payable
Account Titles Debit Credit
Equipment $6,000
Cash $4,000
Service Revenue
Account Titles Debit Credit
Accounts receivable $18,000
Salaries Expense
Account Titles Debit Credit
Cash $1,200
Dividends
Account Titles Debit Credit
Cash $500
Explanation:
a) Data and Analysis:
Sept. 1: Cash $20,000 Common Stock $20,000
Sept. 5: Equipment $9,000 Cash $3,000 Accounts Payable $6,000
Sept. 8: Accounts Receivable $18,000 Service Revenue $18,000
Sept. 14: Salaries Expense $1,200 Cash $1,200
Sept. 25: Accounts Payable $4,000 Cash $4,000
Sept. 30: Dividends $500 Cash $500
Presented below is information related to Shamrock Corp., which sells merchandise with terms 2/10, net 60. Shamrock Corp. records its sales and receivables net. July 1 Shamrock Corp. sold to Warren Harding Co. merchandise having a sales price of $15,000. 5 Accounts receivable of $14,300 (gross) are factored with Andrew Jackson Credit Corp. without recourse at a financing charge of 9%. Cash is received for the proceeds; collections are handled by the finance company. (These accounts were all past the discount period.) 9 Specific accounts receivable of $14,300 (gross) are pledged to Alf Landon Credit Corp. as security for a loan of $6,500 at a finance charge of 6% of the amount of the loan. The finance company will make the collections. (All the accounts receivable are past the discount period.) Dec. 29 Warren Harding Co. notifies Shamrock that it is bankrupt and will pay only 10% of its account. Give the entry to write off the uncollectible balance using the allowance method. (Note: First record the increase in the receivable on July 11 when the discount period passed.)
Answer:
Shamrock Corp.
Entry to write off the uncollectible balance of Warren Harding Co.:
Debit Allowance for Uncollectible accounts $13,500
Credit Accounts Receivable $13,500
To write off the uncollectible account.
Explanation:
a) Data and Calculations:
Credit terms = 2/10, net 60. This means that 2% discount is allowed to each customer for making payment within 10 days and the longest credit is 60 days.
Sales to Warren Harding Co = $15,000
Amount debited to Accounts Receivable = 14,700 ($15,000 * 98%)
Amount paid by Warren (10%) = $1,500
Amount to be written off as uncollectible = $13,500
Discount of $300 will be reversed with a debit to the Accounts Receivable and a credit to Discount Allowed (since the Shamrock Corp. records its sales and receivables net.)
Cash of $1,500 will be debited and Accounts Receivable credited to record the 10% of $15,000 cash receipt from Warren Harding Co. The remaining amount, which is $13,500 will be written off with a debit to Allowance for Uncollectible accounts and a credit to Accounts Receivable.
Bramble Corp. had 165 units in beginning inventory at a total cost of $19,800. The company purchased 330 units at a total cost of $44,550. At the end of the year, Bramble had 90 units in ending inventory. Compute the cost of the ending inventory and the cost of goods sold under FIFO, LIFO, and average-cost. (Round average-cost per unit and final answers to 0 decimal places, e.g. 1,250.) FIFO LIFO Average-cost The cost of the ending inventory $enter a dollar amount rounded to 0 decimal places $enter a dollar amount rounded to 0 decimal places $enter a dollar amount rounded to 0 decimal places The cost of goods sold $enter a dollar amount rounded to 0 decimal places $enter a dollar amount rounded to 0 decimal places $enter a dollar amount rounded to 0 decimal places eTextbook and Media Which cost flow method would result in the highest net income
Answer:
A. FIFO
Cost of the ending inventory $12,150
Cost of goods sold $52,200
B. LIFO
Cost of the ending inventory $10,800
Cost of goods sold $53,550
C. AVERAGE COST
Cost of the ending inventory $11,700
Cost of goods sold $52,650
Explanation:
A. Computation for the cost of the ending inventory and the cost of goods sold under FIFO
Cost of the ending inventory = 90 units*($44,550/330 units)
Cost of the ending inventory=90 units**135
Cost of the ending inventory=$12,150
Cost of goods sold =($44,550+$19,800)-$12,150
Cost of goods sold =$64,350-$12,150
Cost of goods sold =$52,200
2.Computation for the cost of the ending inventory and the cost of goods sold under LIFO
Cost of the ending inventory = 90 units*($19,800/165)
Cost of the ending inventory =90 units*$120
Cost of the ending inventory = $10,800
Cost of goods sold =($44,550+$19,800)-$10,800
Cost of goods sold =$64,350-$10,800
Cost of goods sold =$53,550
3.Computation for the cost of the ending inventory and the cost of goods sold under Average-cost
Cost of the ending inventory = 90 units*($44,550+$19,800)/(330 units+165 units)
Cost of the ending inventory = 90 units*($64,350/495 units)
Cost of the ending inventory = 90 units*$130
Cost of the ending inventory = $11,700
Cost of goods sold =($44,550+$19,800)-$11,700
Cost of goods sold =$64,350-$11,700
Cost of goods sold =$52,650
Joe Corporation produces and sells two products. In the most recent month, Product C90B had sales of $19,950 and variable expenses of $5,985. Product Y45E had sales of $26,190 and variable expenses of $10,476. The fixed expenses of the entire company were $17,000. If the sales mix were to shift toward Product C90B with total dollar sales remaining constant, the overall break-even point for the entire company:
Answer:
Decrease
Explanation:
Calculation to determine overall break-even point for the entire company
Contribution margin for C90B = ($19,950-
$5,985)/$19,950
Contribution margin for C90B = 70%
Contribution margin for Y45E =( $26,190- $10,476)/$26,190
Contribution margin for Y45E= 60%
Therefore Based on the above calculation if the sales mix were to shift toward Product C90B with total dollar sales remaining constant, the overall break-even point for the entire company
Would DECREASE reason been that C90B have more contribution margin ratio of 70% compare to Y45E which had contribution margin ratio of 60%
On January 1, the company purchased equipment that cost $10,000. The equipment is expected to be worth about (or has a salvage value of) $1,000 at the end of its useful life in five years. The company uses straight-line depreciation. It has not recorded any adjustments relating to this equipment during the current year.
Required:
Complete the necessary December 31 journal entry.
Answer:
December 31
Debit : Depreciation $1,800
Credit : Accumulated Depreciation $1,800
Explanation:
Straight line method charges a fixed amount of depreciation based on the formula :
Depreciation Expense = Cost - Salvage Value ÷ Estimated Useful Life
Depreciation Expense = ($10,000 - $1,000) ÷ 5 = $1,800
Deviations from informational efficiency would result in a large cost that will be borne by all participants, namely inefficient resource allocation. Corporations with overpriced securities, for example, would be able to obtain capital too expensively while undervalued companies might forgo investment opportunities because the cost of raising capital would be too low.
a. True
b. False
Answer: False
Explanation:
Deviations from informational efficiency does in fact result in a large cost for all participants however the effects given in the question are false.
If there is a deviation from informational efficiency, overpriced companies would be viewed as performing well enough to get capital at a cheaper rate because they would be viewed as less of a risk.
Undervalued companies would get capital at a higher cost because they would be viewed as less likely to pay back the capital when in fact they are not valued at their proper value which would have shown that they would be able to pay off the capital acquired.
Elana's Traveling Veterinary Services, Inc., completed its first year of operations on December 31. All of the year's entries have been recorded except for the following:
On March 1 of the current year, the company borrowed $60,000 at a 10 percent interest rate to be repaid in five years.
On the last day of the current year, the company received a $360 utility bill for utilities used in December. The bill will be paid in January of next year.
1. Prepare the required adjusting entry for transactions
2. Record the interest accrued at year-end.
3. Record the utilities incurred at year-end.
Answer:
A. Dr Interest expense $5,000
Cr Interest payable $5,000
B. Dr Utilities expense $360
Cr Utilities payable$360
Explanation:
A. Preparation of the Journal entry to Record the interest accrued at year-end.
Dec 31
Dr Interest expense $5,000
Cr Interest payable $5,000
($60,000 principal × .10 rate × 10 months/12 months = $5,000)
(To record interest accrued at year-end)
B. Preparation of the Journal entry to Record the utilities incurred at year-end.
Dec 31
Dr Utilities expense $360
Cr Utilities payable$360
(To record utilities incurred at year-end)
Financial analysis Group of answer choices uses historical financial statements and is thus useful only to assess past performance uses historical financial statements and is thus useful only to assess past performance uses historical financial statements to measure a company's performance and in making financial projections of future performance. is accounting record-keeping using generally accepted accounting principles
Answer:
uses historical financial statements to measure a company's performance and in making financial projections of future performance.
Explanation:
Financial accounting is an accounting technique used for analyzing, summarizing and reporting of financial transactions like sales costs, purchase costs, payables and receivables of an organization using standard financial guidelines such as Generally Accepted Accounting Principles (GAAP) and financial accounting standards board (FASB).
Financial analysis uses historical financial statements to measure a company's performance and in making financial projections of future performance.
In Financial accounting, the horizontal financial analysis can be defined as an analysis and evaluation of a financial statement which illustrates or gives information about changes in the amount of corresponding financial statement items, benchmarks or financial ratio over a specific period of time. It is one of the most important technique that is used to measure how a business is doing financially. Hence, it is also referred to as the trend analysis.
Under the horizontal analysis of financial statement, we use the financial statements of two or more periods; earliest and latter periods.
Generally, the earliest is chosen as the base period while all other items on the statement for a latter period will be compared with the items on the statement of the base period.
On June 30, 2021, the High Five Surfboard Company had outstanding accounts receivable of $720,000. On July 1, 2021, the company borrowed $570,000 from the Equitable Finance Corporation and signed a promissory note. Interest at 10% is payable monthly. The company assigned specific receivables totaling $720,000 as collateral for the loan. Equitable Finance charges a finance fee equal to 1.2% of the accounts receivable assigned.
Required: Prepare the journal entry to record the borrowing on the books of High Five Surfboard. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)
Answer:
Dr Cash$561,360
Dr Finance charge expense $8,640
Cr Finance arrangement $570,000
Explanation:
Preparation of the journal entry to record the borrowing on the books of High Five Surfboard.
Dr Cash$561,360
[$570,000-($720,000*1.2%)]
$570,000-$8,640
=$561,360
Dr Finance charge expense $8,640
($720,000*1.2%)
Cr Finance arrangement $570,000
(Being to record the borrowing on the books of High Five Surfboard )
The 2017 balance sheet of Kerber's Tennis Shop, Inc., showed long-term debt of $6.4 million, and the 2018 balance sheet showed long-term debt of $6.6 million. The 2018 income statement showed an interest expense of $225,000. During 2018, the company had a cash flow to creditors of $25,000 and the cash flow to stockholders for the year was $80,000. Suppose you also know that the firm’s net capital spending for 2018 was $1,490,000, and that the firm reduced its net working capital investment by $93,000. What was the firm’s 2018 operating cash flow, or OCF? (Enter your answer in dollars, not millions of dollars, e.g., 1,234,567.)
Answer:
$1,452,000
Explanation:
Calculation for the firm’s 2018 operating cash flow
First step is to calculate the Cash flow from assets using this formula
Cash flow from assets= Cash flow to creditors + Cash flow to stockholders
Let plug in the morning
Cash flow from assets=-$25,000 + $80,000= $55,000
Now let calculate Cash flow from assets using this formula
Cash flow from assets = OCF capital - Net capital spending-Change in Net Capital spending
Let plug in the formula
$55,000=OCF-$1,490,000-($93,000)
OCF=$1,490,000+$55,000-$93,000
OCF=$1,452,000
Therefore the firm’s 2018 operating cash flow is $1,452,000
Santana Rey receives the March bank statement for Business Solutions on April 11, 2018. The March 31 bank statement shows an ending cash balance of $67,666. A comparison of the bank statement with the general ledger Cash account, No. 101, reveals the following.
S. Rey notices that the bank erroneously cleared a $530 check against her account in March that she did not issue. The check documentation included with the bank statement shows that this check was actually issued by a company named Business Systems.
On March 25, the bank lists a $59 charge for the safety deposit box expense that Business Solutions agreed to rent from the bank beginning March 25.
On March 26, the bank lists a $103 charge for printed checks that Business Solutions ordered from the bank.
On March 31, the bank lists $31 interest earned on Business Solutions’s checking account for the month of March.
S. Rey notices that the check she issued for $138 on March 31, 2018, has not yet cleared the bank.
S. Rey verifies that all deposits made in March do appear on the March bank statement.
The general ledger Cash account, No. 101, shows an ending cash balance per books of $68,189 as of March 31 (prior to any reconciliation).
Required:
1. Prepare a bank reconciliation for Business Solutions for the month ended March 31, 2018.
BUSINESS SOLUTIONS
Bank Reconciliation
March 31, 2018
Bank statement balance Book balance
Add: Add:
Deduct: Deduct:
Adjusted bank balance Adjusted book balance
2. Prepare any necessary adjusting entries. Use Miscellaneous Expenses, for any bank charges. Use Interest Revenue, for any interest earned on the checking account for the month of March. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)
Record journal entry related to the $530 check charged erroneously to Business Solutions' account, if any.
Record the journal entry related to the $59 debit memorandum, if any.
Record the journal entry related to the $103 debit memorandum for printed checks.
Record the journal entry for the $31 interest earned.
S. Rey verifies that all deposits made in March do appear on the March bank statement.
Answer:
See below
Explanation:
Bank reconciliation statement
1.
Bank balance statement
$67,666
Add:
Bank error
$530
Deduct:
Outstanding check
($138)
Adjusted bank balance
$68,058
Cash book balance
$68,189
Add:
Bank interest
$31
Deduct:
Safety deposit rental
($59)
Charge for checks
($103)
Adjusted cash balance
$68,058
2. Journal entries
March-31 Cash a/c Dr $530
To Bank errors Cr $530
March-31 Outstanding checks a/c Dr $138
To Cash Cr $138
March-31 Miscellaneous expense a/c Dr $162
To Cash Cr $162
March-31 Cash a/c Dr $31
To Interest revenue Cr $31
Ursula, a conventional advertising manager, allocates a sizeable amount of funds toward advertising budgets. She is primarily concerned with the sales figures at the end of every quarter and calculates return on investment for her company's product portfolio. Based on these characteristics, which of the following approaches to advertising does Ursula follow?
a. The marketing management approach
b. The generalist viewpoint
c. The specialist viewpoint
d. The consumer attrition perspective
Answer:
b. The generalist viewpoint
Explanation:
From the question we are informed about Ursula, a conventional advertising manager, allocates a sizeable amount of funds toward advertising budgets. She is primarily concerned with the sales figures at the end of every quarter and calculates return on investment for her company's product portfolio. Based on these characteristics, the approaches to advertising Ursula followed was the generalist viewpoint. Generalist can be regarded as social workers which view problems from context, and they combine some practice techniques that are best fit the situation, so some implement skills needed to intervene can be made available. They are available for well being of the clients since they knows problems can develop at any level of daily living.
Helppppp pleaseeee!!!!!!!!!
Adams Manufacturing allocates overhead to production on the basis of direct labor costs. At the beginning of the year, Adams estimated total overhead of $401,400; materials of $413,000 and direct labor of $223,000. During the year Adams incurred $424,000 in materials costs, $418,900 in overhead costs and $227,000 in direct labor costs. Compute the amount of under- or overapplied overhead for the year.
Answer:
an under applied of $10,300
Explanation:
The computation of the over applied or under applied is shown below;
Difference in overhead = Actual overhead - applied overhead
= $418,900 - ($227,000 × ($401,400 ÷ $223,000))
= $418,900 - $408,600
= $10,300
Since actual overhead is more than the applied overhead so it is an under applied of $10,300
A company with various segments (referred to as "divisions") is considering whether to drop its Orange County division. For each the costs described below, indicate whether the cost is avoidable or unavoidable by choosing the related drop-down menu item.
1. Wages paid to the Orange County division employees who work directly for this division and will be discharged if the division is dropped.
2. General administrative expenses allocated to the Orange County division on the basis of sales dollars.
3. Depreciation expense on previously purchased machinery that is used in the Orange County division; the machinery will have no other use or resale value if the division is dropped.
4. Rent paid for the building that houses only the Orange County division.
5. The amount of rent paid to lease a private jet for use by the company's management that is allocated to the Orange County division.
Answer:
1. Avoidable.
These wages are avoidable because they will stop being paid if the division is dropped.
2. Unavoidable.
These are general administrative expenses which means that they will still be incurred regardless of if the division is dropped. They are therefore unavoidable.
3. Unavoidable.
As the machine has no other use or resale value if the division is dropped, the depreciation expense will still be incurred even if the division is dropped so this cost is unavoidable.
4. Avoidable.
Company will no longer have to pay rent if the division is dropped so this expense is an avoidable cost.
5. Unavoidable.
This cost will still be incurred by the company regardless of if the division is dropped because it is an administrative cost at company level. It is therefore unavoidable.
Kelsey's Kleening provides cleaning services for Clinton Inc., a business with four buildings. Kelsey's assigned different cleaning charges for each building based on the amount of square feet to be cleaned. The charges for the four buildings are $35,000, $27,000, $45,000, and $10,000. Clinton secured this amount by signing a note bearing 7% interest on March 1, 2019.
Required:
a. Prepare the journal entry to record the sale on March 1, 2019.
b. Determine how much interest Kelsey will receive if the note is repaid on December 1, 2019.
c. Prepare Kelsey's journal entry to record the cash received to pay off the note and interest on December 1, 2019.
Answer:
A. Dr Note receivable $117,000
Cr Sales revenue $117,000
B. $6,143
C. Dr Cash $123,143
Cr Interest revenue $6,143
Cr Note receivable $117,000
Explanation:
A. Preparation of the journal entry to record the sale on March 1, 2019.
Dr Note receivable $117,000
Cr Sales revenue $117,000
($35,000+ $27,000+ $45,000+$10,000)
B. Calculation to Determine how much interest Kelsey will receive if the note is repaid on December 1, 2019.
Using this formula
Interest = Face value * interest rate *n/12
Note is outstanding for period of 1 March -1Dec 2019 = 9 months
Let plug in the formula
Interest = $117,000 *.07 *9/12
Interest = $6,143
C. Preparation of Kelsey's journal entry to record the cash received to pay off the note and interest on December 1, 2019.
Dr Cash $123,143
($117,000+$6,143)
Cr Interest revenue $6,143
Cr Note receivable $117,000
Suppose the labor force stays constant, and the working age population stays constant, but some people who were unemployed become employed. As a result, the labor force participation rate will A. not change in way that can be predicted. B. remain constant. C. decrease. D. increase.
Answer:
b
Explanation:
Labour force is the sum of the employed and the unemployed in the economy.
Labour force participation rate is
Different compounding periods, are used for different types of investments. In order to properly compare investments or loans with different compounding periods, we need to put them on a common basis. In order to do this, you need to understand the difference between the nominal interest rate (INOM) and the effective annual rate (EAR). The ____________ interest rate is quoted by borrowers and lenders, and it is also called the annual percentage rate (APR). If the compounding periods for different securities is the same, then you -Select- use the APR for comparison. If the securities have different compounding periods, then the __________ must be used for comparison.Here, M is the number of compounding periods per year and INOM/M is equal to the periodic rate (IPER). If a loan or investment uses ____________ compounding, then the nominal interest rate is also its effective annual rate. However, if compounding occurs more than once a year, EAR is _____________ INOM.
Answer:
Nominal
EAR
annual
higher than
Explanation:
The Nominal interest rate is quoted by borrowers and lenders, and it is also called the annual percentage rate (APR).
If the securities have different compounding periods, then the EAR must be used for comparison.
If a loan or investment uses annual compounding, then the nominal interest rate is also its effective annual rate.
However, if compounding occurs more than once a year, EAR is higher than INOM.
You are the beneficiary of a life insurance policy. The insurance company informs you that you have two options for receiving the insurance proceeds. You can receive a one-time cash of $200,000 today or receive payments of $1,400 a month starting at the end of this month for 20 years. Assuming the APR is 6 percent with monthly compounding, which option should you take and why
Answer:
Option 1 PV lumpsum = $200000
Option2 PV of Annuity = $195413.08035 rounded off to $195413.08
Based on the present value of both the options, Option 1 should be chosen as it has a higher present value than option 2.
Explanation:
To decide on the best option to choose among the given two, we need to find the present value of both the options.
As the first option is to receive a lumpsum payment of $200000 today, the present value of this option is also equal to $200000 as it will be received today.
Option two, on the other hand, is an annuity as fixed payments will be received after equal intervals of time and for a limited time period and at the end of the period which satisfies the criteria of annuity ordinary. We will use the formula for the present value of annuity which is,
PV of Annuity = C * [( 1 - (1+r)^-n) / r]
Where,
C is the periodic paymentr is the rate of return of discount raten is the number of periodsThe periodic payment is provided as $1400. We are also provided with and APR of 6% which is the Annual rate. We will have to convert it into monthly rate by dividing it by 12. We are also provided with the number of years which we will need to convert into number of months by multiplying it by 12.
Monthly r = 6%/12 = 0.5%
Number of periods = 20 * 12 = 240
PV of Annuity = 1400 * [( 1 - (1+0.5%)^-240) / 0.5%]
PV of Annuity = $195413.08035 rounded off to $195413.08
Psychologists have observed that: Multiple Choice once investors have made a loss, they become much more willing to take risks. investors tend to place too much faith in their ability to spot mispriced stocks. when forecasting the future, people tend to place too little weight on recent events. investors like stocks of companies whose names begin with letters that occur early in the alphabet.
Answer:
investors tend to place too much faith in their ability to spot mispriced stocks.
Explanation:
Risk management can be defined as the process of identifying, evaluating, analyzing and controlling potential threats or risks present in a business as an obstacle to its capital, revenues and profits. This ultimately implies that, risk management involves prioritizing course of action or potential threats in order to mitigate the risk that are likely to arise from such business decisions.
Psychologists have observed that investors tend to place too much faith in their ability to spot mispriced stocks.
This ultimately implies that, investors usually feel they can tell a mispriced stock caused by the behavior of market participants.
Kendra Enterprises has never paid a dividend. Free cash flow is projected to be $80,000 and $100,000 for the next 2 years, respectively; after the second year, FCF is expected to grow at a constant rate of 5%. The company's weighted average cost of capital is 16%. What is the terminal, or horizon, value of operations? (Hint: Find the value of all free cash flows beyond Year 2 discounted back to Year 2.) Round your answer to the nearest cent. $ Calculate the value of Kendra's operations. Do not round intermediate calculations. Round your answer to the nearest cent. $
Answer:
$856,376.30
Explanation:
What is the terminal, or horizon, value of operations?
2 years, FCF 1 = 80,000, FCFC 2 = 100,000, Growth rate= 5%, WACC = 16%
==> 100,000*(1+0.05)/(0.16-0.05)
==> 100,000*(1.05/0.11)
==> 100,000*(9.545454(
==> 954,545
Calculating the value of Kendra's operations.
Years Cash-flows PVF at 16% Present value
1 800,000 0.86206 68964.80
2 105,000 0.74316 78031.80
2 954,545 0.74316 709379.70
Total value 856,376.30
Sheila and her team members have been allocated a new project. As a team leader, which quality should Sheila demonstrate so that her team members are clear on the team goals they need to achieve?
Sheila needs to demonstrate effective
to be able to convey the team goals to her team members.
Answer:
she needs to demostrate effective leadership and sportsman shop and that all starts with trust. To be clear on the goals they must list their goals 1st and work for them in order to persue them imma athlete and i do that a lot
Explanation:
Answer:
Sheila nerds to demonstrate good communication skittles
Lauer Corporation uses the periodic inventory system and has provided the following information about one of its laptop computers: Date Transaction Number of Units Cost per Unit 1/1 100 $ 800 5/5 Purchase 200 $ 900 8/10 Purchase 300 $ 1,000 10/15 Purchase 200 $ 1,100 During the year, Lauer sold 750 laptop computers. What was cost of goods sold using the LIFO cost flow assumption
Answer:
$740,000
Explanation:
LIFO assumes that the recent goods bought will be sold first. The Cost of Goods Sold is then calculated on the cost of the recent goods bought.
Cost of Goods Sold = 200 x $1,100 + 300 x $1,000 + 200 x $900 + 50 x $800
= $740,000
Therefore,
Cost of goods sold using the LIFO is $740,000.
Identify which situation will lead to a fall in the net exports.
a.
More government spending than taxation
b.
More taxation than government spending
c.
More exports than imports
d.
More imports than exports
Help Fast please
Answer:
Use the drop-down menus to answer the questions.
In this circular flow mode, what does the letter A present?
✔ financial sector
What does the letter B represent?
✔ government sector
What does the letter C represent?
✔ foreign sector
What does the letter D represent?
✔ leakages
Explanation:
got it right on edge
Finch Modems has excess production capacity and is considering the possibility of making and selling paging equipment. The following estimates are based on a production and sales volume of 1,600 pagers. Unit-level manufacturing costs are expected to be $26. Sales commissions will be established at $1.60 per unit. The current facility-level costs, including depreciation on manufacturing equipment ($66,000), rent on the manufacturing facility ($56,000), depreciation on the administrative equipment ($13,800), and other fixed administrative expenses ($74,950), will not be affected by the production of the pagers. The chief accountant has decided to allocate the facility-level costs to the existing product (modems) and to the new product (pagers) on the basis of the number of units of product made (i.e., 5,600 modems and 1,600 pagers). Required a. Determine the per-unit cost of making and selling 1,600 pagers. (Do not round intermediate calculations. Round your answer to 3 decimal places.) b. Assuming the pagers could be sold at a price of $40 each, should Finch make the pagers
Answer:
a). Per unit cost = $ 159.31
b). Yes, Finch Modems should make the pagers.
Explanation:
a). Facility level cost proposed to be allocated to the pager line
[tex]$=\frac{1600}{5600+1600} \times (66,000+56,000+13,800+74,950)$[/tex]
= 0.22 + 210750
= $ 210750.22
Facility cost per unit of pager = [tex]$\frac{210750.22}{1600}$[/tex] = $ 131.71
Cost per unit of pager = $ 26 + $ 1.60 + $ 131.71
= $ 159.31
b). At the selling price of $ 40 per unit, the pager line will result in an operational loss, the profit for the company as a whole will increase if it decides to manufacture the pagers.
Contribution margin per unit of pager = $ 40 - ( $ 26 + $ 1.60)
= $ 15.6
Total contribution margin per unit of pager = 1600 x $ 15.6
= $ 24,960
The net operating income for the company would increase by $ 24.960 if the pagers are added to its product portfolio.
Hence Finch Modems should make the pagers.
On January 2, 2020, Howdy Doody Corporation purchased 18% of Ranger Corporation's common stock for $52,000. Based on its ownership, Howdy Doody Corp. cannot exert significant influence over the operations of Ranger Corp. Ranger's net income for the years ended December 31, 2020, and December 31, 2021, were $11,000 and $52,000, respectively. During 2020, Ranger declared and paid a dividend of $68,000. On December 31, 2020, the fair value of the Ranger stock owned by Howdy Doody had increased to $74,000. How much should Howdy Doody show in the 2020 income statement as income from this investment
Answer:
The Total amount is shown in the income statement $34,240
Explanation:
The computation of the amount that should be presented in the 2020 income statement is shown below:
Dividend collected by Howdy Doody corporation (18% of $68,000) $12,240
rise in Fair value of Stock credited to the income statement ($74,000 - $52,000) $22,000
The Total amount is shown in the income statement $34,240