Answer:
$ 358,063
Explanation:
Calculation for the amount that Ruby's IRA will be worth when she needs to start withdrawing money from it when she retires.
Ruby's IRA worth when she retires at age of 65
First step
Using this formula to find how many years until Ruby retires
Time period= Retired age (-) current age
Let plug in the formula
65-25=40 years
Second step is to find the future value of IRA when she retires
Using this formula
Future value of IRA when she retires
= Present value(1+r)t
Let plug in the formula
$ 11,400 (1+0.09) ^40
=$11,400 (1.09) ^40
=$ 11,400 (31.409)
= $ 358,063
Therefore the amout that Ruby's IRA will be worth when she needs to start withdrawing money from it when she retires will be $358,063
Holdup Bank has an issue of preferred stock with a $6 stated dividend that just sold for $93 per share. What is the bank's cost of preferred stock
Answer:
6.45%
Explanation:
Calculation for bank's cost of preferred stock
Using this formula
Cost of preferred stock = Dividend / Price of Stock * 100
Where,
Dividend $6
Price of Stock 93 per share
Let plug in the formula
Cost of preferred stock =6/93*100
Cost of preferred stock= 0.0645*100
Cost of preferred stock=6.45 %
Therefore the bank's cost of preferred stock will be 6.45%
You are hoping to have $10,000 in your account 7 years from today in order to go on a reindeer expedition in Lapland. If your current balance is $6,000, what APR (compounded monthly) would be required if you are to have $10,000 in your account in 7 years?
Answer:
APR= 7.32%
Explanation:
The APR is computed as shown below:
Future value = Present value (1 + r/ m)^nm
Future value = 10,000
Present value= 6,000
n=7
m=12
$ 10,000 = $ 6,000 (1 + r / 12 )^12 x 7
$ 10,000 = $ 6,000 (1 + r / 12 )^84
($ 10,000 / $ 6,000)^ 1 / 84 - 1 = r / 12
1.006099786 - 1 = r / 12
0.006099786 x 12 = r
r=0.006099786 x 12
r = 7.32%
APR= 7.32%
For the past year, Momsen, Ltd., had sales of $46,967, interest expense of $4,088, cost of goods sold of $17,184, selling and administrative expense of $12,051, and depreciation of $6,850. If the tax rate was 35 percent, what was the company's net income
Answer:
The Net Income is $4416.1
Explanation:
The net income is calculated as follows,
Sales $46967
Less:Cost of sales (17184)
Gross Profit 29783
Less:Expenses
Selling & Admin exp (12051)
Depreciation exp (6850)
Interest exp (4088)
Net income before ta 6794
tax expense (2377.9)
Net Income 4416.1
Kiddie World uses a periodic inventory system and the retail inventory method to estimate ending inventory and cost of goods sold. The following data are available for the quarter ending September 30, 2016: Cost Retail Beginning inventory $ 460,000 $ 590,000 Net purchases 940,000 1,370,000 Freight-in 52,700 Net markups 64,000 Net markdowns 34,000 Net sales 1,280,000 Estimate ending inventory and cost of goods sold (LIFO)
2.
Kiddie World uses a periodic inventory system and the retail inventory method to estimate ending inventory and cost of goods sold. The following data are available for the quarter ending September 30, 2016:
Cost Retail
Beginning inventory $ 310,000 $ 455,000
Net purchases 858,000 1,220,000
Freight-in 25,500
Net markups 49,000
Net markdowns 19,000
Net sales 1,205,000
Estimate ending inventory and cost of goods sold using the conventional method. (Round ratio calculation to 2 decimal places (i.e., 0.1234 should be entered as 12.34%.))
3.
On January 1, 2016, Sanderson Variety Store adopted the dollar-value LIFO retail inventory method. Accounting records provided the following information:
Cost Retail
Beginning inventory $ 56,000 $ 80,000
Net purchases 223,040 330,000
Net markups 6,000
Net markdowns 8,000
Net sales 307,000
Retail price index, end of year 1.02
Calculate the inventory value at the end of the year using the dollar-value LIFO retail method. (Round your intermediate calculations to the nearest whole dollar.)
Answer:
The ending inventory value using LIFO retail method is $710,000
Explanation:
Beginning inventory $590,000
Purchases $1,370,000
Net Markups ($64,000)
Net Markdowns ($34,000)
Goods Available For Sale $1,990,000
Cost to retail percentage = 70.91%
Net sales $1,280,000
Ending Inventory = $710,000
X sells a house to Y for $300,000. Before selling the house, X forgets to tell Y about a leakyfaucet in a little-used sink in the basement (which would cost about $10 to fix). Y inspected the house, but just didn't notice the faucet. Later, Y wants to rescind the deal on the basis of fraud or misrepresentation because of the leaky faucet. Which of the following is the best reason why Y cannot rescind? a. Because Y didn't make an express misstatement regarding the faucet, but merely said nothing.b. Because Y's failure to notice the leaky faucet means that he did not justifiably rely on X's "misstatement."c. Because X's failure to disclose the condition of the faucet is not material.d. Because X didn't do anything to actively hide the leaky faucet.21
Answer:
c. Because X's failure to disclose the condition of the faucet is not material.
Explanation:
In order to consider X's failure as material and therefore allowing Y to rescind the contract, the failure to disclose must involve an element of the contract that is in such a bad condition that it would make the contract as "irreparably broken".
In this case, contract law provides other remedies that Y can use to try to make X pay for the repairs, but Y cannot unilaterally rescind the contract.
Denny Co. sells major household appliance service contracts for cash. The service contracts are for a one-year, two-year, or three-year period. Cash receipts from contracts are credited to Unearned Service Revenues. This account had a balance of $900,000 at December 31, 2011 before year-end adjustment. Service contracts still outstanding at December 31, 2011 expire as follows:
Service contracts still outstanding at December 31, 2011 expire as follows:
During 2012 $190,000
During 2013 $285,000
During 2014 $125,000
What amount should be reported as Unearned Service Revenues in Denny's December 31, 2011 balance sheet?
a. $900,000
b. $600,000
c. $1,500,000
d. $300,000
Answer:
b. $600,000
Explanation:
Amount to be reported = Outstanding service contracts for 2012, 2013 and 2014
=$190,000 + $285,000 + $125,000
=$600,000
$600,000 should be reported as unearned service revenues in Denny's Co. December 31, 2015 balance sheet.
Information related to Harwick Co. is presented below.
1. On April 5, purchased merchandise on account from Botham Company for $23,000, terms 2/10, net/30, FOB shipping point.
2. On April 6, paid freight costs of $900 on merchandise purchased from Botham.
3. On April 7, purchased equipment on account for $26,000.
4. On April 8, returned damaged merchandise to Botham Company and was granted a $3,000 credit for returned merchandise.
5. On April 15, paid the amount due to Botham Company in full.
Required:
Prepare the journal entries to record these transactions on the books of Harwick Co. under a perpetual inventory system.
No. Date Account Titles and Explanation Debit Credit
1.
2.
3.
4.
5.
Answer:
1.
Apr 5
DR Merchandise inventory $23,000
CR Account payable $23,000
(To record Merchandise Purchased)
2.
Apr 6
DR Merchandise inventory $900
CR Cash $900
(To record payment of Freight Costs for Purchases)
3.
Apr 7
DR Equipment $26,000
CR Account payable $26,000
(To record purchase of Equipment)
4.
Apr 8
DR Account payable $3,000
CR Merchandise inventory $3,000
(To record return of damaged Merchandise)
5.
Apr 15
DR Account payable $20,000
CR Cash $19,600
CR Merchandise inventory $200
(To record payment for Merchandise bought on account)
Working
Terms of purchase 2/10 indicate that discount of 2% is warranted if goods paid for in 10 days which they were;
= 20,000 * ( 1 - 2%)
= $19,600
Knowledge Check 01 On March 15, Viking Office Supply agrees to accept $1,200 in cash along with a $2,800, 60-day, 15 percent note from one of its customers to settle his $4,000 past-due account. Prepare the March 15 entry for Viking Office Supply by selecting the account names from the drop-down menus and entering the dollar amounts in the debit or credit columns.
Answer:
Viking Office Supply
Debit Accounts Receivable $4,000
Credit Allowance for Uncollectible Accounts $4,000
To revise the write-off of past-due account.
Debit Cash Account $1,200
Debit 15% Notes Receivable $2,800
Credit Accounts Receivable $4,000
To record the cash receipt and notes settlement.
Explanation:
Since the account is past-due, it must have been written off as uncollectible expense. To revise this entry, a credit is made to the Allowance for Uncollectible Accounts and a debit to the Accounts Receivable.
Then a debit to the Cash Account in the sum of $1,200 and a debit to the Notes Receivable account for $2,800 and a credit to the Accounts Receivable.
Alpha Company has assets of $610,000, liabilities of $255,000, and equity of $355,000. It buys office equipment on credit for $80,000. What would be the effects of this transaction on the accounting equation
Answer:
Both assets and liabilities increase by $80,000
Explanation:
To start with, it is imperative to show the equation before and after the purchase of equipment on credit
Assets =Equity + liabilities
$610,000 =$255,0000 +$355,000
The equipment's purchase would increase the value of assets and liabilities by $80,000
Assets =Equity + liabilities
$610,000+$80,000=$255,000 +($355,000+$80,000)
$690,000 =$255,000 +$435,000
On January 1, James Industries leased equipment to a customer for a four-year period, at which time possession of the leased asset will revert back to James. The equipment cost James $700,000 and has an expected useful life of six years. Its normal sales price is $700,000. The residual value after four years, guaranteed by the lessee, is $100,000. Lease payments are due on December 31 of each year, beginning with the first payment at the end of the first year. Collectibility of the remaining lease payments is reasonably assured, and there are no material cost uncertainties. The interest rate is 5%. (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.)
Calculate the amount of the annual lease payments
Guaranteed Residual Value
Table or calculator function: n=?, i=?
Amount ot be recovered (fair value) $?
Guaranteed residual value $?
Amount to be recovered through periodic lease payments $?
Lease Payment
Table or calculator function: PVAD of $1 ?
n=?, i=?
Amount of fair value recovered each lease payment (Lease Payments $?)
* I would like to make sure the answer is correct. Please provide step by step calculate and explain.
Answer:
- $700,000
- 82,270
- $617,730
- present value of $1: n=4, i=5%
- the present value of an ordinary annuity of $1: n=4, i=5%
Explanation:
Amount to be recovered (fair value): $700,000
Less: Present value of the residual value ($100,000 x .82270*): 82,270
Amount to be recovered through periodic lease payments: $617,730
Lease payments -: end of each of the next four years: ($617,730 ÷ 3.54595**) $174,207
* present value of $1: n=4, i=5%
** present value of an ordinary annuity of $1: n=4, i=5%
Consider the everyday task of getting to work on time or arriving at your first class on time in the morning. Complete a fish-bone chart detailing reasons why you might arrive late in the morning. Identify each possible source of error.Material ________▼
Methods _______ ▼
Machinery ______▼
Complete the fish-bone chart by matching each number in the chart with the corresponding reason.
Answer:
Part 1.
Material - The road
Reason: due to the road is a part of the material or resource that is used in the driving process)
Method - Driving
Reason: driving itself is the method)
Machinery - The car
Reason: the car is the primary equipment for the driving process)
Manpower - Family or me
reason: the family or the owner is the manpower involved in the driving process)
Part 2. the correct chart is with reason and the possible source is attached.
Part 1. Reason: thanks to the road could be a part of the fabric or resource that's utilized in the driving process)
Fish-bone chartMaterial - The road
Method - Driving
Part-2 -Reason: driving itself is that the method)
Machinery - The car
Part-3 Reason: the car is that the primary equipment for the driving process)
Manpower - Family or me
Part-4 Reason: the family or the owner is that the manpower involved within the driving process)
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A stock just paid a dividend of $3. The stock is expected to increase its dividend payment by 30% per year for the next 3 years. After that, dividends will grow at a rate of 8% forever. If the required rate of return is 10%, what is the price of the stock today?
Answer:
Price of stock today = $334.56
Explanation:
The Dividend Valuation Model(DVM) is a technique used to value the worth of an asset. According to this model, the value of an asset is the sum of the present values of the future cash flows would that arise from the asset discounted at the required rate of return.
This model would be applied as follows:
Year Present Value ( PV)
1 3 × 1.3 × 1.1^(-1) = 3.5454
2 3 × 1.3^2 × 1.1^(-2) = 4.1900
3 3 × 1.3^3 × 1.1^(-3) = 4.9519
Total 12.6874
Year 4 and beyond
This will be done in two steps
Step 1
D× (1+g)/k-g
3 × 1.3^4/(0.1-0.08)
=428.415
Step 2
Present Value in year 0
=428.415 × 1.1^(-3) = 321.87
Total present value = 12.6874 + 321.87 = 334.56
Price of stock today = $334.56
The specifications for a plastic liner for a concrete highway project calls for thickness of 4.0 mmplus or minus0.08 mm. The standard deviation of the process is estimated to be 0.02 mm.
a) The standard deviation of the process is estimated to be 0.02 mm.
b) The upper specification limit for this product = ? mm (round your response to three decimal places).
c) The lower specification limit for this product = ? mm (round to three decimal places)
d) The process capability index (CPk) = ? (round to three decimal places)
e) The upper specification lies about ? standard deviations from the centerline (mean thickness)
Answer and Explanation:
The computation is shown below:
b. The upper specification limit is
= 4 + 0.08
= 4.080 mm
c. The Lower specification limit is
= 4 - 0.08
= 3.920 mm
d. The process capability index is
= min ((Upper specification limit - Mean) ÷ (3 × Standard deviation)), ((Mean - Lower specification limit)÷ (3 × Standard deviation))
= min (0.08 ÷ (3 × 0.02)), (0.08 ÷ (3 × 0.02))
= min (1.333, 1.333)
So it would be 1.333
e. Upper specification = 4.08 mm
Mean line = 4.0 mm
Now,
The upper specification lies at a distance = Upper specification - Mean line
= 4.08 mm - 4.0 mm
= 0.08 mm
upper specification =Upper specification lies ÷ One standard deviation
= 0.08 mm ÷ 0.02 mm
= 4 mm which is standard deviations from the mean
During the week ended May 15, 2019, Scott Fairchild worked 40 hours. His regular hourly rate is $15. Assume that all of his earnings are subject to social security tax at a rate of 6.2 percent and Medicare tax at a rate of 1.45 percent. He also has deductions of $32 for federal income tax and $22 for health insurance. What is his gross pay for the week? What is the total of his deductions for the week? What is his net pay for the week?
Answer:
Gross pay = 600
Deductions = 99.9
Net Pay = 500.1
Explanation:
Requirement A:
Gross Pay = 40 hours x $15/hour
Gross Pay = $600
Requirement B:
Security Tax ( 600 x 6.2%) = $37.2
Medicare tax ( 600 x 1.45%) = $8.7
Federal Income = $32
Health Insurance = $22
Total deductions = $99.9
Requirement C :
Net Pay = Gross pay - all deductions
Net Pay = $600 - 99.9
Net Pay = 500.1
According to Debra, the vice president of Theo Chocolate, the most important marketing vehicle the company has is: a.the fair trade certification. b.free product giveaways. c.tours of its factories. d.the unique varieties of chocolates it offers.
Answer:
The correct answer is the option C: Tours of its factories.
Explanation:
To begin with, the most important marketing vehicle the company has is the tours of its factories due to the fact that it is quite known that the showdown of the product and its current production to the customers increase the amount of desire that they have for them. Moreover, the fact of showing to the clients how well the products are made, with the greatest quality and all the correct process, the clients only feel more amaze for the products of the company and that is why that its demand increase as well as its sales, due to the tours.
Answer:
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Explanation:sqoakifthan yoikwp
The journal entry to record the $500 of work in process ending inventory that consists of $300 of direct materials, $50 of manufacturing overhead, and $150 of direct labor is which of the following?
A. Work in Process Inventory 500
Accounts Payable 500
B. Accounts Payable 500
Work in Process Inventory 500
C. Work in Process Inventory 500
Materials Inventory 300
Wages Payable 150
Manufacturing Overhead 50
D. Cost of Goods Sold 500
Work in Process Inventory 500
Answer:
C. Work in Process Inventory 500; Materials Inventory 300; Wages Payable 150; Manufacturing Overhead 50
Explanation:
The journal entry will definitely be as follows
Account Title Debit Credit
Work in Process Inventory $500
Raw materials inventory $300
Wages payable $150
Manufacturing overhead $50
The people in an economy have $10 million in money. There is only one bank that all the people deposit their money in and it holds 5% of the deposits as reserves. What is the money multiplier in this economy?
Answer:
The answer is 20
Explanation:
The money multiplier show us how an initial deposit can lead to a higher final increase in the total money supply or it relates to the maximum amount of bank money that can be created, given a certain amount of money from central bank money.
Money multplier = 1 / reserve requirement
Reserve requirement is 5% of the deposits
Therefore, money multiplier is
1 / 0.05
20
High-Low Cost Estimation and Profit Planning Comparative 2007 and 2008 income statements for Dakota Products Inc. follow: DAKOTA PRODUCTS INC. Comparative Income Statements For Years Ending December 31, 2007 and 2008 2007 2008 Unit sales 5,000 8,000 Sales revenue $60,000 $96,000 Expenses (64,000) (76,000) Profit (loss) $(4,000) $20,000 (a) Determine the break-even point in units. Answer units (b) Determine the unit sales volume required to earn a profit of $5,000. Answer
Answer:
(a)
5,500 units
(b)
6,125 units
Explanation:
First, we need to calculate the per unit selling price.
2007 2008
Unit sales 5,000 8,000
Sales revenue $60,000 $96,000
Selling Price $12 $12
Now we need th separate the vairbale and fixed cost from total expense using high low method
Variable cost = ( Higher activity Expense - Lower activity Expense ) / ( Higher activity - Lower activity )
Variable cost = ( $76,000 - $64,000 ) / ( 8,000 units - 5,000 units )
Variable cost = $12,000 / 3,000 units = $4 per unit
Fixed cost = $76,000 - ( $4 x 8,000 units ) = $44,000
Contribution Margin = Selling Price - Variable cost = $12 - $4 = $8
(a)
Breakeven Point = Fixed Cost / Contributin margin per unit
Breakeven Point = $44,000 / $8 = 5,500 units
(b)
Target sales = ( Fixed cost + Desired Profit ) / Contribution margin per unit
Target sales = ( $44,000 + $5,000 ) / $8 = 6,125 units
Suppose a bond issued by the European Central Bank and denominated in euros pays 44% per year. Today the exchange rate is 1.521.52 dollars per euro. It is expected that the exchange rate in one year will be 1.671.67 dollars per euro. What is the annual dollar return on this bond? A. negative 5−5 percent B. 1919 percent C. 44 percent D. 1414 percent
Answer:
D. 14 percent
Explanation:
The computation of the annual dollar return is shown below:
But before that we need to do following calculation
Let us assume the par value be $100
So, the bond par value is
= $100 × $1.52
= $152
The interest rate is
= $100 × 4%
= 4 euros
Future interest rate in dollars is
= 4 euros × 1.67
= $6.68
Now par value in the future is
= $100 × 1.67
= $167
Now the annual dollar return on this bond is
= (Future par value + Future interest rate in dollars - bond par value) ÷ (bond par value)
= ($167 + $6.68 - $152) ÷ ($152)
= 14.26%
hence, the correct option is d.
Future Value At age 20 you invest $1,000 that earns 7 percent each year. At age 30 you invest $1,000 that earns 10 percent per year. In which case would you have more money at age 60?
Answer:
In the case of age 30, there will be more money at the age of 60
Explanation:
When person start investing at the age of 20 then total year till 60 years age is = 40 years.
Interest rate (r ) = 7 percent or 0.07.
Investment amount (Present value) = $1000
Now the total amount at the age of 60 years is calculated below.
[tex]Total \ amount = Present \ value (1 + r)^{n} \\= 1000 ( 1 + 0.07 ) ^{40}\\= 14974.4578 \ dollars[/tex]
Now calculate the total amount at the age of 60 years when he invest at the age of 30 and earns interest rate 10 percent. Now the number of years is 30.
[tex]Total \ amount = Present \ value (1 + r)^{n} \\= 1000 ( 1 + 0.1 ) ^{30}\\= 17449.4023 \ dollars[/tex]
A customer enters your facility and discusses their most recent hunt. This was strictly a friendly, non-
professional conversation. According to your book, which of the following would you consider this use of
time in your business environment as?
1
Answer: Time spent
Explanation:
From the question, we are informed that a customer enters a facility and discusses their most recent hunt. We are further informed that it was strictly a friendly, non-professional conversation.
This will be consider as time spent in a business environment. Good customers relationship is needed for the success of every organization. Therefore, in this case, it'll be termed time spent.
Cox Media Corporation pays a coupon rate of 10 percent on debentures that are due in 15 years. The current yield to maturity on bonds of similar risk is 8 percent. The bonds are currently callable at $1,100. The theoretical value of the bonds will be equal to the present value of the expected cash flow from the bonds. Use Appendix B and Appendix D for an approximate answer but calculate your final answer using the formula and financial calculator methods.a. Find the market value of the bonds using semiannual analysis. (Ignore the call price in your answer. Do not round intermediate calculations and round your answer to 2 decimal places.)b. Do you think the bonds will sell for the price you arrived at in part a?
Answer:
a. Find the market value of the bonds using semiannual analysis.
bond's price = PV of maturity value + PV of coupon payments
PV of maturity value = $1,000 / (1 + 4%)³⁰ = $308.32PV of coupon payments = $50 x 17.292 (annuity factor 4%, n = 30) = $864.60bond's price = $1,172.92
b. Do you think the bonds will sell for the price you arrived at in part a?
No, since they are currently callable at $1,100, their market price will be the call price. No investor will risk to pay more for a bond that can be called at a much lower price.
A business issues 20-year bonds payable in exchange for preferred stock. This transaction would be reported on the statement of cash flows in a.a separate schedule. b.the cash flows from operating activities section. c.the cash flows from financing activities section. d.the cash flows from investing activities section.
Answer:
A. a separate schedule.
Explanation:
This is explained to be cash flow schedule or also cash flow statement. It is explained to be on out of the three financial statement which used generally to report for cash which been generated and how this money has been totally been spent within a period or interval which could be a week, month, quarter or even probably a year.
In the statement of cash flows, the cash flows are known to be generated from investing activities section while inclusion of receipts from the sale of investments. This is why in the stated 20 year payable bond, it is known to have been recorded in statement of cash flows in a separate schedule.
When comparing the weighted-average and FIFO methods of process costing, which items are the same in both methods? (
Answer:
Objectives, Concepts and Journal Entry Accounts
Explanation:
The reason is that the objective of the FIFO and Weighted average methods is the same which is to assign the costs that were incurred to convert the raw inventory into finished goods.
The underlying concept in both of the method is cost flow assumption which is the transfer of the cost that was assigned to finished goods, to cost of goods sold.
The journal entry accounts are the same accounts used for weighted average method, LIFO and FIFO methods.
So these are the similarities which are found while comparing FIFO, LIFO and weighted average methods of process costing.
"According to the law of demand, with everything else being equal, the quantity demanded for a good or service will _____________ as the price increases."
Answer: Decrease
Explanation:
According to the Law of Demand, The quantity demanded for purchase of a commodity inversely varies with the price.
That is to say that "ceteris paribus" ( with everything being equal),When the prices of a particular good go higher, people will buy less of such commodity but will buy more, if the prices of the goods reduces.
We can say demand is elastic if quantity demanded for a commodity decreases with increase in price which will make people choose another lower substitute good eg, detergent, ice cream
Also if quantity demanded does not change much with increase in price , then it is referred to as Inelastic Demand for example necessity commodity such as gasoline.
The following transactions are for Kingbird Company.1. On December 3, Kingbird Company sold $450,000 of merchandise to Blossom Co., on account, terms 1/10, n/30. The cost of the merchandise sold was $310,000.2. On December 8, Blossom Co. was granted an allowance of $22,000 for merchandise purchased on December 3.3. On December 13, Kingbird Company received the balance due from Blossom Co.Instruction:Prepare the journal entries to record these transactions on the books of Mack Company. Mack uses a perpetual inventory system.
Answer:
Kingbird Company or Mack Company
Journal Entries:
Dec. 3:
Debit Accounts Receivable (Blossom Co.) $450,000
Credit Sales Revenue $450,000
To record the sale of goods on account, terms 1/10, n/30.
Debit Cost of Goods Sold $310,000
Credit Inventory Account $310,000
To record the cost of goods sold.
Dec. 8:
Debit Sales Allowance $22,000
Credit Accounts Receivable (Blossom Co.) $22,000
To record the allowance granted.
Dec. 13:
Debit Cash Account $423,720
Debit Cash Discount $4,280
Credit Accounts Receivable (Blossom Co.) $428,000
To record the settlement of account.
Explanation:
Journal entries are used to record transactions that occur on a daily basis. They are usually the first set of records made in the accounting books. They show the accounts to be debited and the accounts to be credited. Each transaction is usually debited in one account and credited in another to reflect the double entry system of accounting and to keep the accounting equation in balance.
[The following information applies to the questions displayed below.]
Widmer Watercraft’s predetermined overhead rate for year 2015 is 200% of direct labor. Information on the company’s production activities during May 2015 follows.
a. Purchased raw materials on credit, $200,000.
b. Materials requisitions record use of the following materials for the month.
Job 136 $48,000
Job 137 32,000
Job 138 19,200
Job 139 22,400
Job 140 6,400
Total direct materials 128,000
Indirect materials 19,500
Total materials used $147,500
c. Paid $15,000 cash to a computer consultant to reprogram factory equipment.
d. Time tickets record use of the following labor for the month. These wages were paid in cash.
Job 136 $12,000
Job 137 10,500
Job 138 37,500
Job 139 39,000
Job 140 3,000
Total direct labor 102,000
Indirect labor 24,000
Total $126,000
e. Applied overhead to Jobs 136, 138, and 139.
f. Transferred Jobs 136, 138, and 139 to Finished Goods.
g. Sold Jobs 136 and 138 on credit at a total price of $525,000.
h. The company incurred the following overhead costs during the month (credit Prepaid Insurance for expired factory insurance).
Depreciation of factory building $68,000
Depreciation of factory equipment 36,500
Expired factory insurance 10,000
Accrued property taxes payable 35,000
i. Applied overhead at month-end to the Work in Process Inventory account (Jobs 137 and 140) using the predetermined overhead rate of 200% of direct labor cost.
REQUIRED.
Prepare journal entries to record the events and transactions a through i. REQUIRED
Answer:
Widmer Watercraft
Journal Entries
Sr No Particulars Debit Credit
a. Materials $200,000
Accounts Payable $ 200,000
Purchased raw materials on credit, $200,000.
b. Work in Process Job 136 $ 48,000
Work in Process Job 137 32,000
Work in Process Job 138 19,200
Work in Process Job 139 22,400
Work in Process Job 140 6,400
Materials $ 128,000
Total direct materials 128,000 issued.
Factory Overhead Control Account 19,500
Materials $ 19,500
Indirect materials 19,500 issued.
c. Factory Overhead- Equip 15,000
Cash 15000
Paid $15,000 cash to a computer consultant to reprogram factory equipment.
d. Work in Process Job 136 $12,000
Work in Process Job 137 10,500
Work in Process Job 138 37,500
Work in Process Job 139 39,000
Work in Process Job 140 3,000
Factory Overhead Control Account 24,000
Wages Control Account $ 126,000
Total direct labor 102,000 charged to production, Indirect labor 24,000 Charged to Factory Overhead.
e. Work In Process Job 136 $24,000
Work in Process Job 138 75,000
Work in Process Job 139 78,000
Applied Overhead 255,000
Applied overhead to Jobs 136, 138, and 139 at 200% of Direct Labor Cost.
Applied Overhead Control Account $ 255,000
Factory Overhead Control Account $ 255,000
Applied Overhead Closed To Actual Overhead Account.
f. Finished Goods Control Account $ 355,100
Work in Process Job 136 84000
Work in Process Job 138 131,700
Work in Process Job 139 139,400
Transferred Jobs 136, 138, and 139 to Finished Goods.
g. Cost of Goods Sold 215,700
Finished Goods 215,700
Sold Jobs 136 and 138 on credit at a total price of $525,000.
Accounts Receivable $525,000
Sales $525,000
h. Factory Overhead Control Account $ 149,500
Provision For Depreciation Account $68,000
Prepaid Insurance Expense $ 10,000
Accumulated Depreciation Factory Equip. 36,500
Property Taxes Payable Account 35,000
The company incurred the above overhead costs during the month.
i. Work in Process Job 136 21,000
Work in Process Job 140 6,000
Factory Overhead Control Account 27,000
Applied overhead at month-end to the Work in Process Inventory account (Jobs 137 and 140) using the predetermined overhead rate of 200% .
A store will give you a 2% discount on the cost of your purchase if you pay cash today. Otherwise, you will be billed the full price with payment due in 1 month. What is the implicit borrowing rate (EAR) being paid by customers who choose to defer payment for the month? Show your calcuation steps. If you use the financial calculator, tell me your inputs and output (i.e. pv,fv,n, i/Y, pmt).
Answer:
The implicit borrowing rate (EAR) being paid by customers who choose to defer payment for the month is 24.48%
Explanation:
In order to calculate the implicit borrowing rate we would have to calculate the following formula:
implicit borrowing rate=Discount%/(1-Discount%) *12/( payment months - discount month)
According to the given data we have the following:
Discount % =2
Payment days = 1 month
Therefore, implicit borrowing rate=2%/(1-2%)*12/1
implicit borrowing rate=(0.02/0.98)*12
implicit borrowing rate=24.48%
The implicit borrowing rate (EAR) being paid by customers who choose to defer payment for the month is 24.48%
An accountant has debited an asset account for $5,000 and credited a revenue account for $10,000. What can be done to complete the recording of the transaction?a) Nothing further can be doneb) Credit a shareholders equity account for $5,000c) Debit another asset account for $5,000d) Credit an asset account for $5,000
c) Debit another asset account for $5,000
The calculation is as follows:Since the asset is debited for $5,000 and the revenue account is credited for $10,000
So we have to equal both the amount
Asset Dr $5,000
Asset Dr $5,000
To Revenue $10,000
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Sarasota Corporation had the following activities in 2017
1. Payment of accounts payable $817,000
2. Issuance of common stock $230,000
3. Payment of dividends $377,000
4. Collection of note receivable $97,000
5. Issuance of bonds payable $545,000
6. Purchase of treasury stock $42,000
Compute the amount Sarasota should report as net cash provided (used) by financing activities in its 2017 statement of cash flows. (Show amounts that decrease cash flow with either a -sign e.g.-15,000 or in parenthesis e.g. (15,000).,)
Net cash __________ by financing activitiess _________.
Answer:
Net Cash provided in financing activities is $356,000
Explanation:
The cash flow from financing activities are the funds that the business took in or paid to finance its activities. These involve long term liability, issuance of stock, short term borrowing etc.
The financing activities in Sarasota Corporation report include; Issuance of common stock, Issuance of bonds payable, Payment of dividends, Purchase of treasury stock.
Cash provided by financing activities for the year 2017
Issuance of common stock = $230,000
Issuance of bonds payable. = $545,000
Payment of dividends = - $377,000
Purchase of treasury stock = -$42,000
Net Cash provided in financing activities = $356000