Answer:
a. $254,000
Explanation:
Jaquelin Corporation
Particulars Amount
Taxable Income $300,000
Add: Net operating loss carry $70,000
forward deducted currently
Interest Income on low state bond $8,000
Depreciation deducted on tax return $40,000
Less: Federal income Tax (-$110,000)
ADS depreciation would have been (-$10,000)
Gain recognized this year on an (-$44,000)
installment sale from a prior year
Current E & P $254,000
On December 31, Jarden Co.'s Allowance for Doubtful Accounts has an unadjusted credit balance of $14,000. Jarden prepares a schedule of its December 31 accounts receivable by age. Accounts Receivable $ 860,000 344,000 68,800 34,400 13,760 Age of Accounts Receivable Not yet due 1 to 30 days past due 31 to 60 days past due 61 to 90 days past due Over 90 days past due Expected Percent Uncollectible 1. 20% 1.95 6.45 32.50 67.00
Required:
1. Compute the required balance of the Allowance for Doubtful Accounts at December 31.
Accounts Receivable Percent Uncollectible (#.##%) Estimated Uncollectible Not due: 1 to 30: 31 to 60: 61 to 90: Over 90: Estimated balance of allowance for uncollectibles
2. Prepare the adjusting entry to record bad debts expense at December 31. (Round percentage answers to nearest whole percent. Do not round intermediate calculations.)
Answer and Explanation:
a. The required balance of allowance for doubtful debts is shown below:
Particulars Account receivable % Estimated uncollectible
Not yet due $860,000 1.20% $10,320
1 to 30 days $344,000 1.95% $6,708
31 to 60 days $68,800 6.45% $4,438
61 to 90 days $34,400 32.50% $11,180
Over 90 days $13,760 67.00% $9,219
Estimated balance $41,865
b. The adjusting entry is
Bad debt expense Dr ($41,865 - $14,000) $27,865
To Allowance for doubtful debts $27,865
(being the bad debt expense is recorded)
For recording this we debited the bad debt expense as it increased the expenses and credited the allowance for doubtful debts as it decreased the assets
Use the following information for the Exercises below. [The following information applies to the questions displayed below.] Hart Company made 3,400 bookshelves using 22,400 board feet of wood costing $315,840. The company's direct materials standards for one bookshelf are 8 board feet of wood at $14.00 per board foot. Exercise 23-14A Recording and closing materials variances LO P6 Hart Company uses a standard costing system.
(1) Prepare the journal entry to charge direct materials costs to Work in Process Inventory and record the materials variances.
(2) Assume that Hart's materials variances are the only variances accumulated in the accounting period and that they are immaterial. Prepare the adjusting journal entry to close the variance accounts at period-end.
Answer and Explanation:
The Journal entries is shown below:-
1. Goods in Process Inventory Dr, (3,400 × 8 × $14) $380,800
Direct Materials Price Variance $2,240
$22,400 × ($14.00 - $315,840 ÷ $22,400))
To Direct Materials Quantity Variance $67,200
$14.00 × ((3,400 × 8) - 22,400)
To Raw Materials Inventory $315,840
(Being direct material charged is recorded)
2. Direct Materials Quantity Variance $67,200
To Direct Materials Price Variance $2,240
To Cost of Goods Sold $64,960
(being the closing is recorded)
Hawar International is a shipping firm with a current share price of $5.50 and 10 million shares outstanding. Suppose Hawar announces plans to lower its corporate taxes by borrowing $20 million and repurchasing shares.
a) With perfect capital markets, what will the share price be after this announcement?
Suppose that Hawar pays a corporate tax rate of 30%, and that shareholders expect the change in debt to be permanent.
b) If the only imperfection is corporate tax rate of 30%, what will the share price be after this announcement?
c) Suppose the only imperfections are corporate taxes and financial distress costs. If the share price rises to $5.75 after this announcement, what is the PV of financial distress costs Hawar will incur as the result of this new debt?
Answer: a. $5.50
b. $6.1
c. $3,500,000
Explanation:
a. From the question, we are informed that Hawar International is a shipping firm with a current share price of $5.50 and 10 million shares outstanding and that Hawar announces plans to lower its corporate taxes by borrowing $20 million and repurchasing shares.
We are informed that Hawar announces plans to lower its corporate taxes by borrowing $20 million and repurchasing shares. This is a transaction and therefore, the value if the share won't be changed. So, the value for the share will still be $5.50.
b. If the only imperfection is corporate tax rate of 30%, the share price after this announcement will be:
= [30% × (20million/10million)] + $5.50
= [0.3 × 2] + $5.50
= $0.6 + $5.50
= $6.1
Therefore, the share price be after this announcement will be $6.1.
c. If the share price rises to $5.75 after this announcement, the PV of financial distress costs Hawar will incur as the result of this new debt will be:
= ($6.1 - $5.75) × 10,000,000
= $0.35 × 10,000,000
= $3,500,000
a) With perfect capital markets, the share price of Hawar International, after this announcement will remain at $5.50 per share.
b. If the only imperfection in the capital market is caused by the corporate tax rate of 30%, the share price after this announcement will be $6.10.
c. If the share price increases to $5.75 after this announcement, the PV of financial distress costs that Hawar will incur from the new debt is $3,500,000.
What are the financial distress costs?The financial distress costs are the additional expenses that a firm in financial distress faces as a result of higher cost of capital with debts instead of equity funds.
Data and Calculations:Current share price = $5.50
Outstanding shares = 10 million
Proposed loan for share repurchase = $20 million
Corporate tax rate = 30%
b. This new share price is computed as current share price + (Debt/Equity x 30%).
= $6.10 {$5.50 + ($20/$10 x 30%)}
c. The financial distress costs = $3,500,000 {10,000,000 x ($6.1 - $5.75)}
Learn more about financial distress at https://brainly.com/question/6991251
Charter Company, which uses the perpetual inventory method, purchases different letters for resale. Character had a beginning inventory comprised of nine units at $3 per unit. The company purchased four units at $5 per unit in February, sold seven units in October, and purchased five units at $6 per unit in December. If Charter Company uses the LIFO method, what is the cost of goods sold for the year
Answer:
Cost of Goods sold is $29
Explanation:
Under the perpetual LIFO or Last In First Out method of inventory valuation, we value the Cost of Goods Sold based on the price of the most recently purchased inventory before sale. Thus the units of closing inventory contains the inventory that was purchased first.
The cost of goods sold under LIFO will be,
Beginning Inventory (9* 3) = 27
Feb purchases (4 * 5) = 20
Oct sales (4 * 5 + 3 * 3) = (29)
Dec purchases (5 * 6) = 30
Ending Inventory = 48
So, the cost of goods sold under perpetual LIFO will comprise of the most recently purchased inventory before sale. The most recently purchased inventory before October sale was of February purchases. Thus, out of the 7 units sold, 4 will comprise of the February purchases and the remaining, 3 units, will be from the beginning inventory.
The cost of goods sold is,
COGS = 4 * 5 + 3 * 3
COGS = 29
The servicescape factor that takes into consideration how easy it is for customers to find what they want as they move through a facility is known as:
Answer:
Functionality
Explanation:
Booms and Bitner developed the servicescape model. A servicescape can be defined as the physical surroundings and entire ambience in which a service can take place or occur. Basically, the servicescape emphasizes the importance and impact of the physical surroundings in which services can occur or take place.
The purpose of the servicescape is to evaluate and analyze the environment in which a service is situated and allows both the seller and customer to interact, plus tangible resources which would facilitate business transactions performance and communications.
The servicescape factor that takes into consideration how easy it is for customers to find what they want as they move through a facility is known as functionality.
In the 2020 CARES Act, most Americans received $1,200 stimulus checks (sorry college students). Will people spend most of the money they receive (like in the simple MPC model) or will they save most of it? Why?
Answer:
Individuals won't go through the vast majority of the cash as indicated by the MPC fo ordinary occasions. Despite the fact that the $1200 will add to the buying intensity of the individuals and those individuals who have lost positions and are battling to get by will spend on the essential things, the MPC during an emergency or downturn is a lot of lower than ordinary occasions.
It is a result of the vulnerability made by the emergency. Individuals don't have a clue how much their pay can be sooner rather than later and they need to spare as much as could be expected under the circumstances with the goal that they can make sure about their future.
Their longing to spare increments in a monetary emergency. Along these lines, the vast majority of the $1200 will be spared, and generally, just necessities will be expended out of the additional pay.
You know that the assets of a firm BIG are today worth 100mil. You reasonably feel that in a year they will be either worth 110mil or 90mil. You also know that a riskless zero coupon bond maturing in one year is offering today a yield of 5%. The firm has issued a zero-coupon bond that matures in one year and has a face value of 100mil. 1. What should be the value of this corporate bond today? 2. What should be its yield to maturity? 3. What should be the value of the equity of the firm? 4. Can you do a further analysis of this problem?
Answer:
(1) 95.23 (2)5.008% or 5% (3) The value of equity is zero (4)The future value of the firm will be 110 mil. than Firm equity will be 110-100 =10 mil not zero
Explanation:
Solution
Given that:
The worth in good in this example= 110 mil
Worth in bad in this example =90 mil
The future value =( 110+90)/2
=100
Future value = 100
Now
(1) The Present value = F/(1+r)^n
=100/1.05
=95.23
(2) the yield to maturity is given below:
YTM = (FV/PV)^n -1
Here
FV = future value
PV = present value
n=years
Thus
(100/95.23)^1 -1
=5.008% or 5%
Since the bond are zero coupon bond so interest rate is equal to YTM
(3) The total worth =100 mil
Thus
The Debt +equity =100
100+equity =100
Equity =100-100
=0
Hence the value of equity is zero.
The firm BIG is only debt firm. Firm do not have equity.
(4) The future value of the firm will be 110 mil. than Firm equity will be 110-100
=10 mil not zero
The ABC Corporation has the following information. How much is the Cash Flow to Creditors? АВС Coгporation 1,588 Earnings before Interest & taxes Depreciation Beginning net fixed assets Interest paid Net new equity raised Net new borrowing 130 1,650 150 450 110 424 Тахes O$110 O $40 $340 $1,200 $1,650
Answer: $40
Explanation:
Cash-flow to creditors is that amount of cash that the business paid to creditors during a period. It is calculated by removing the net new borrowings from the interest payments for the period to the creditors.
Cash-flow to Creditors = Interest Paid - Net Borrowing
Cash-flow to Creditors = 150 - 110
Cash-flow to Creditors = $40
Rice Corp. recognizes revenue over time to account for long-term contracts and has the following information for the first year of the contract:
Contract price $500,000
Total expected costs on contract 400,000
Costs incurred in current year 60,000
Costs incurred in previous years 0
What is the amount of revenue recognized in year 1?
A.) $100,000
B.) $500,000
C.) $60,000
D.) $75,000
Answer:
D.) $75,000
Explanation:
Amount of revenue recognized = Cost incurred to date / Estimated total cost * Contract price
Cost incurred to date=60,000
Estimated total cost=400,000
Contract price=500,000
Amount of revenue recognized= 60,000/400,000 * 500,000
=0-15 * 500,000
=$75,000
Amount of revenue recognized in year 1 is $75,000
McGaha VIllage operates a sanitation department as part of its general government activities. McGaha Village will acquire new sanitation trucks that will be financed through the issuance of general obligation bonds. McGaha Village uses a Capital Projects Fund and a Debt Service Fund to account for the transactions. Make journal entries to record the following transactions and events and indicate the appropriate fund in which the transactions are recorded.
1. April1. McGaha Village issues bonds for their face amount of $300,000
2. April1. McGaha Village acquires sanitation trucks at a total cost of $300,000 for cash. The trucks have an estimated useful life of 10 years.
3. October 1. McGaha Village records the fund liability and pays the first installment of principal ($15,000) and interest ($7,500) on the long term debt.
Answer:
McGaha Village
Journal Entries:
April 1:
Debit Cash Account $300,000
Credit Bonds Payable $300,000
To record the issue of bonds.
April 1:
Debit Sanitation Trucks $300,000
Credit Cash Account $300,000
To record the acquisition of sanitation trucks for cash.
April 1:
Debit Cash Account $300,000
Credit Debt Service Fund $300,000
To record the transfer of funds.
October 1:
Debit Capital Projects Fund $300,000
Credit Debt Service Fund $300,000
To record the funds liability.
Debit Bonds Payable $15,000
Credit Cash Account $15,000
To record the repayment of the bonds.
Debit Interest Expenses $7,500
Credit Cash Account $7,500
To record the payment of interest on the long-term debt.
Explanation:
Journal entries help to initiate the recording of transactions. They show the accounts to be debited and credited in the General Ledger. They have some short narrations which explain the transaction.
J's Foods is trying to estimate the cash flows in their first year of operation. They project that the firm will have sales of 100,000; operating costs of 50,000; and depreciation of 10,000. If their tax rate is 29% what would the firm's operating cash flow equal?
Answer:
$38,400
Explanation:
The computation of operating cash flow is shown below:-
Operating cash flow = (Sales - operating costs - depreciation) × (1 - tax) + depreciation
= (100,000 - 50,000 - 10,000) × (1 - 0.29) + 10,000
= (40,000) × (0.71) + 10,000
= $38,400
Therefore for computing the operating cash flow we simply applied the above formula.
. [5 pts] A life-saving medicine without any close substitutes will tend to have a. a small elasticity of demand. b. a large elasticity of demand. c. a small elasticity of supply. d. a large elasticity of supply.
Answer:
The correct answer is the option A: a small elasticity of demand.
Explanation:
To begin with, the concept known as "price elasticity of demand" refers to the relationship that shows how much the quantity demanded of a product will change when the price of it changes. And therefore that it indicates the variation that exists between the price and the quantity demanded for the product.
Secondly, when it comes to products that are highly essential to life, like water, the price elasticity of its demand will be inelastic or what is the same as small elastic due to the fact that it does not matter how much the price changes, the amount demanded by the consumers will stay due to the fact that the product is highly needed in their lives.
A summary of selected ledger accounts appears below for Alberto's Plumbing Services for the current calendar year-end.
Common Stock
12/31 8,500 1/1 6,500
12/31 15,000
Retained Earnings
6/30 3,500 12/31 15,000
11/30 5,000
Income Summary
12/31 18,500 12/31 33,500
12/31 15,000
Net income for the period is
a. $15,000
b. $33,500
c. $13,000
d. $18,500
Answer:
a. $15,000
Explanation:
common stock:
12/31 = $8,500 1/1 = $5,500
12/31 = $15,000
retained earnings:
6/30 = $3,500 12/31 = $15,000
11/30 = $5,000
Income Summary
12/31 = $18,500 12/31 = $33,500
12/31 = $15,000
income summary closing accounts:
Dr Revenue 33,500
Cr Income summary 33,500
Dr Income summary 18,500
Cr Expenses 18,500
Dr Retained earnings 15,000
Cr Income summary 15,000
net income = amount of income summary closed against retained earnings = $15,000
Justine has just started a company that makes notebooks and other stationery items out of recycled materials. She has decided to use a profit orientation, and wants to make a 10% profit from all sales. Why is this a bad idea?
Answer:
10% is a high-profit margin
Explanation:
Since Justine is just starting her new business this might actually be a bad idea because 10% is a high-profit margin. In new business, you need to start off with very small profit margins in order to attract customers with low prices and grow a loyal customer base. Once the business begins to grow and sales start kicking up then you may begin increasing your profit margins.
Among the responsibility centres listed, which type of responsibility centre is most likely to use "Growth in Sales" as a performance measure
Answer:
C. Revenue
Explanation:
Growth in sales is an important metric in determining revenue for an organization. It is the ability of an organization or a team within the organization to increase its revenue over a period of time. Most business managers measure the revenue generated through the growth in sales. To achieve growth in sales, sales teams would need to set monthly, quarterly, and yearly targets for themselves.
An increase in sales growth, which is directly proportional to an increase in revenue, assures the stakeholders in a business that there is progress and that the organization is thriving.
Kallard Manufacturing Company produces t-shirts screen-printed with the logos of various sports teams. Each shirt is priced at $13.50 and has a unit variable cost of $9.85. Total fixed cost is $197,600. Required: 1. Compute the break-even point in units. Round your answer to the nearest whole unit. units
Answer:
You would need to sell 54,137 units in order to cover your fixed costs
Explanation:
All of the following statements regarding stock dividends are true except : A. Stock dividends provide evidence of management's confidence that the company is doing well. B. Directors can use stock dividends to keep the market price of the stock affordable. C. Stock dividends decrease the number of shares outstanding. D. Stock dividends do not reduce assets or equity. E. Stock dividends transfer a portion of equity from retained earnings to contributed capital.
Answer: Stock dividends decrease the number of shares outstanding.
Explanation:
A stock dividend does not affect the total equity, but rather the transfer amounts that exists between the components of the equity.
Stock dividends also shows evidence of the confidence of the management that the company is doing well and that the directors can use it to keep market price of stock affordable.
The option that Stock dividends decrease the number of shares outstanding is not true.
The price of a home is $400,000. The mortgage company requires a down payment of 20% and 1 point at the time of closing for a 30-year loan at a rate of 4.25%. The closing costs of $7,500 and the points cannot be included in the loan.
Required:
a. Find the down payment.
b. Find the amount financed.
c. How much must be paid at the time of closing?
d. Find the monthly payment.
e. Find the total cost of interest.
f. How much of the principal was repaid in the first payment?
Answer:
(a) $80,000 (b) $320,000 (c) $10,700 (d) $1,574.21 (e) $246,714.75 (f) $440.87
Explanation:
Solution
Given that:
Now
(a)The price of the house = 400,000
The down payment = 20%
The value of down payment = 20%*400,000
= $80,000
(b) The loan value or amount financed = Purchase Price - Down Payment
= 400,000 - 80,000
= $320,000
(c) Thus
The loan value = $320,000
1 Point has to be paid at the closing time and also, the closing fees of $7,500 has to be paid
So, the amount paid at the time of closing = 1%*320000 + 7500
= 3200 + 7500
= $10,700
(d) To compute the Monthly payment we make use of the PMT function in Excel
Which is given below:
4= PMT(Rate, Nper, PV, FV,Type)
Rate = 4.25%/12
Nper = 30*12
= 360
PV = 320000
FV = 0
Type = 0
=PMT(4.25%/12, 360, -400000,0,0)
= $1,574.21
(e) Now we find the total amount paid over 30 years which is given as :
Total amount paid over 30 years
= 1,574.21*360 = $566,714.75
The loan amount = $320,000
Total interest cost = 566,714.75 - 320,000
= $246,714.75
(f) The Interest paid during first installment is as follows:
= 4.25%*320000/12
= $1,133.33
Monthly installment = $1,574.21
The Principal repayment = Monthly installment - Interest paid during first installment
= 1,574.21 - 1,133.33
= $440.87
Jacob Co. sells merchandise on credit to Isaiah Co. for $9,700. The invoice is dated on May 1 with terms of 1/15, net 45. What is the amount of the discount and up to what date must the invoice be paid in order for the buyer to take advantage of the discount?
Answer:
1% by May 16
Explanation:
The "1/15" part of the terms means there will be a 1% discount if the invoice is paid within 15 days. 15 days from May 1 is May 16.
The discount is 1% if the invoice is paid by May 16.
A company purchased land for $89600 cash. Real estate brokers' commission was $4700 and $7600 was spent for demolishing an old building on the land before construction of a new building could start. Under the historical cost principle, the cost of land would be recorded at
Answer:
$101,900
Explanation:
The computation of the cost of land would be recorded by using the historical cost principle is shown below:
As we know that
According to the historical cost principle the assets should be recorded at the purchase price or historical cost by considering the commission and demolishing value
Here, the cost of land is
= Purchase value of land + real estate broker commission + demolishing value
= $89,600 + $4,700 + $7,600
= $101,900
Given the following selected information on McMillen's Chocolate, Inc., calculate Cash Flow from Operating Activities for 2012. Show your work.
2011 2012
EAT $ 600,000 800,000
Depreciation Exp. 100,000 120,000
Dividends 400,000 550,000
Accounts Receivable 1,500,000 1,000,000
Inventory 3,500,000 4,100,000
Accts. Payable 350,000 350,000
Accruals 250,000 200,000
Long-Term Debt 2,300,000 2,000,000
Common Stock 2,200,000 3,000,000
Interest expenses 50,000 60,000
Retained Earnings 6,150,000 6,400,000
Answer:
Cash flow from operating activities for the Year 2012 = $770000.
Explanation:
Particulars Amount ($)
Earnings after tax (EAT) 800,000
+ Depreciation (Non-cash expenditure) 120,000
Operating profit before working 920,000
capital changes
+ Decrease in accounts receivable 500,000
(1,500,000 - 1,000,000)
- increase in inventory 600,000
(4,100,000 - 3,500,000)
- Decrease in accrual 50,000
(250,000 - 200,000)
Cash flow from operating activities 770,000
Conclusion:- Cash flow from operating activities for the Year 2012 = $770000.
On December 28, 20X3, Stern Corporation and Ram Company established S&R Partnership, with cash contributions of $14,000 and $42,000, respectively. The partnership’s purpose is to purchase from Stern accounts receivable that have an average collection period of 90 days and hold them to collection. The partnership borrows cash from Midtown Bank and purchases the receivables without recourse but at an amount equal to the expected percent to be collected, less a financing fee of 5 percent of the gross receivables. Stern and Ram hold 20 percent and 80 percent of the ownership of the partnership, respectively, and Stern guarantees both the bank loan made to the partnership and a 15 percent annual return on the investment made by Ram. Stern receives any income in excess of the 15 percent return guaranteed to Ram. The partnership agreement provides Stern total control over the partnership’s activities. On December 31, 20X3, Stern sold $8,080,000 of accounts receivable to the partnership. The partnership immediately borrowed $7,580,000 from the bank and paid Stern $7,440,000. Prior to the sale, Stern had established a $414,000 allowance for uncollectibles on the receivables sold to the partnership. The balance sheets of Stern and S&R immediately after the sale of receivables to the partnership contained the following:
Stern Corporation S&R Partnership
Cash $8,036,000 $373,000
Accounts Receivable 4,380,000 8,080,000
Allowance for Uncollectible Accounts (212,000) (414,000)
Other Assets 5,420,000
Prepaid Finance Charges 404,000
Investment in S&R Partnership 11,000
Accounts Payable 942,000
Deferred Revenue 404,000
Bank Notes Payable 7,580,000
Bonds Payable 9,770,000
Common Stock 697,000
Retained Earnings 6,630,000
Capital, Stern Corporation 11,000
Capital, Ram Company 44,000
Required:
Assuming that Stern is S&R's primary beneficiary, prepare a consolidated balance sheet for Stern at January 1, 20X4.
Answer:
Total Assets $25,663,000
Total Liabilities and Stockholders’ Equity $25,663,000
Explanation:
Preparation of the prepare a consolidated balance sheet for Stern at January 1, 20X4
Stern CorporationConsolidated Balance StatementJanuary 1, 20X4
ASSET:
Cash $8,409,000
($8,036,000 +$373,000)
Accounts Receivable $12,460,000
( 4,380,000 +8,080,000)
Allowance for Uncollectible Accounts ($626,000)
[(212,000) (414,000)]
Other Assets 5,420,000
Total Assets $25,663,000
LIABILITIES:
Accounts Payable 942,000
Bank Notes Payable 7,580,000
Bonds Payable 9,770,000
Shareholders’ Equity
Controlling Interest:
Common Stock 697,000
Retained Earnings 6,630,000
Total Controlling interest $7,327,000
(6,630,000+697,000)
Non controlling interest $44,000
Total Liabilities and Stockholders’ Equity $25,663,000
Therefore consolidated balance sheet for Stern at January 1, 20X4 will have a Total Assets of $25,663,000 and a Total Liabilities and Stockholders’ Equity of $25,663,000
Ruiz co. provides the following sales forecast for the next four mounths. The company wants to end each month with ending finished goods inventory equal to 40% of next months forecasted sales. Finished goods inventory on april 1 is 224 units. Prepare a production budget for the months of april may june
Answer:
Some information is missing, estimated sales:
April = 660May = 740June = 690July = 780Ruiz Co.
Production Budget
For the Months of April, May and June
April May June
Forecasted sales 660 740 690
Planned ending inventory 296 276 312
Total production required 956 1,016 1,002
- Beginning inventory -224 -296 -276
Units to be produced 732 720 726
Helen worked for ABC Motors for 25 years. The president of ABC said to her: "In consideration of your past service for 25 years, I promise to give you a new car next week." However, he did not give the car. Is this promise legally enforceable
Answer:
No, legal consideration is absent
Explanation:
According to the given situation, the President of ABC company was promised to Helen to give a new car next week as Helen worked for 25 years. But the president did not give the car as he promised to the Helen.
In this case, there was a promise which was verbal, not in the way of legal consideration, which means there is no proof so that Helen can claim from the president.
Therefore the correct answer is No, legal consideration is absent
Ferris Company began January with 6,000 units of its principal product. The cost of each unit is $5. Merchandise transactions for the month of January are as follows: Purchases Date of Purchase Units Unit Cost* Total Cost Jan. 10 5,000 $ 6 $ 30,000 Jan. 18 6,000 7 42,000 Totals 11,000 72,000 * Includes purchase price and cost of freight. Sales Date of Sale Units Jan. 5 3,000 Jan. 12 2,000 Jan. 20 4,000 Total 9,000 8,000 units were on hand at the end of the month. Required: 1. Calculate January's ending inventory and cost of goods sold for the month using FIFO, periodic system.
Answer:
Cost of goods sold = $210,000
Ending inventory = $54,000
Explanation:
The computation of the ending inventory and the cost of goods sold using the FIFO periodic system is shown in the attachment below
The periodic inventory system is the system in which the inventory is maintained in periodic intervals like monthly, half-yearly, quarterly, yearly. There is no need to update the inventory to the latest date.
While the FIFO method refers to the method in which the inventory that is first purchased should be considered first and then the remaining inventory should be considered on date wise
Suppose at December 31 of a recent year, the following information (in thousands) was available for sunglasses manufacturer Oakley Inc.: ending inventory $156,748; beginning inventory $108,738; cost of goods sold $348,930 and sales revenue $757,813.
Required:
a. Calculate the inventory turnover for Oakley, Inc. (Round inventory turnover to 2 decimal places, e.g. 5.12.)
b. Calculate the days in inventory for Oakley, Inc. (Round days in inventory to 0 decimal places, e.g. 125.)
Answer:
a. 2.63
b. 139 days
Explanation:
a. Inventory Turnover is a ratio that measures how often inventory is replaced by a company. A higher ratio is good because it means that the company is selling more.
Formula;
= [tex]\frac{Cost of Goods Sold}{ \frac{Beginning Inventory + Closing Inventory}{2} }[/tex]
= [tex]\frac{348,930}{ \frac{108,738 + 156,748}{2} }[/tex]
= [tex]\frac{348,930}{132,743}[/tex]
= 2.63
b. Days in Inventory refers to the amount of time that stock remains in the company before it is sold. This is preferred to be lower as opposed to higher.
= [tex]\frac{365}{Inventory Turnover Ratio}[/tex]
= [tex]\frac{365}{2.63}[/tex]
= 138.78
= 139 days
Cainas Cookies purchased a commercial oven on 1/1/14 for a total cost of 35,000. Estimated useful life is 6 years, with a salvage value of 5,000 at the end of that time. Cainas estimates that the equipment will be used for 12,000 baking hours. For the first year of operations, Cainas had 2,500 backing hours. For the second year Cainas had 1,700 hours. Compute the depreciation for YEAR 2. Group of answer choices
Answer:
Units of production = $4250
Straight line depreciation expense = $5,000
Double declining method = $7.777
Explanation:
The depreciation method to he used wasn't stated, so I calculated the depreciation expense using 3 depreciation methods
Straight line depreciation expense = (Cost of asset - Salvage value) / useful life
(35,000 - 5,000) / 6 = $5,000
The depreciation expense each year would be $5000
Depreciation expense using the double declining method = Depreciation factor x cost of the asset
Depreciation factor = 2 x (1/useful life)
2 / 6 = 0.3333
Deprecation expense in year 1 = 0.3333 x $35,000 = $11,666.67
Book value = $35,000 - $11,666.67 = $23,333.33
Depreciation expense in year 2 = $23,333.33 × 0.3333 = $7.777
Depreciation expense using units of production = ( hours used in year / total estimated hours of the machine) x (Cost of asset - Salvage value)
(1,700 / 12,000) x (35,000 - 5,000) = $4250
I hope my answer helps you
The Cainas Cookies' depreciation expense for year 2 is C. $4,250.
The correct choice of answer is not A. $7,292 , B. $6,250 , or D. $4,598.
Data and Calculations:
Cost of commercial oven = $35,000
Salvage value = $5,000
Depreciable amount = $30,000 ($35,000 - $5,000)
Estimated useful life = 12,000 baking hours
Depreciation rate per baking hour = $2.50 ($30,000/12,000)
Depreciation expense for Year 2 = $4,250 ($2.50 x 1,700)
Thus, the depreciation expense for year 2 is $4,250.
Learn more: brainly.com/question/17312012
"What marketing metric determines whether a TV program such as The Big Bang Theory remains on the CBS broadcast TV network
Answer:
It's the rating
Explanation:
The higher the rating the more the network will put it on TV
arton owes $3 million that is due on February 28. The company borrows $2,400,000 on February 25 (5-year note) and uses the proceeds to pay down the $3 million note and uses other cash to pay the balance. How much of the $3 million note is classified as short-term in the December 31 financial statements
Answer:
Barton
$3 million is classified as short-term in the December 31 financial statements.
Explanation:
Note Payable:
The notes payable due on February 28 had only two months to mature by December 31. Therefore, the amount of $3 million is classified as short-term in the December 31 financial statements.
A short-term debt is a debt that is due for payment within the next 12 months. With a notes payable of $3 million that is due for payment on February 28, the whole amount is classified as short-term. The current year's notes payable of $2.4 million would be classified as long-term debt since it would be due in 5 years' time.
An underpinning of all commerce is effective communications, knowledge of where goods and services exit and where they are needed and the ability to communicate instantaneously across vast distances. Facilitation this movement into the future one can observe which shifts in examining world population and telecommunications?
Explanation:
Analyzing the historical context, it is possible to see how the new communication technologies were essential for the development of commerce. We currently live in the digital age, where almost every individual has access to a cell phone with internet and can communicate within seconds with any part of the world.
This technological revolution also had a great economic impact, generating new business models.
Companies have to adapt to this reality and insert themselves in the new market based on the internet, in creating relationships with consumers, in the practice of positive social and environmental attitudes, etc. Some companies needed to reinvent themselves to adapt to the new economic context, or they would lose strength in the market and would cease to exist.
The fact is that the technological revolution has impacted commercial relations around the world, today the consumer seeks the solution to his problems and desires, not being restricted to local consumption, which causes a new redesign of commerce and manages impacts on the economy of the world.