On January 1, 2020, Jacobs Company sells land financed through an $80,000 note, issued by Andress Company. The note is an $80,000, 8%, annual interest-bearing note. Andress agrees to repay the $80,000 proceeds on December 31, 2021. The prevailing interest rate on similar notes is 11%. Assume that the cost of the land is equal to the fair value of the note.
Required:
Prepare all entries for Jacobs over the note term, including any year-end adjustments. Use the effective interest method to amortize the discount.
Answer:
Entries are shown below.
Explanation:
To record the journal entries, we first need to calculate interest payment and principal as per the present value. This is done below:
PV Factor Present Value
Interest Payment $6,400 1.7125 $10,960
Principal $80,000 0.8116 $64,928
$75,888
Journal Entries
Date Particular Debit ($) Credit ($) Working
Jan 1, 2020 Note Receivable 80,000
Discount on Receivable 4,112
Land 75,888
Dec 31, 2020 Cash 6,400
Discount on Receivable 1,948 (8348-6400)
Interest Revenue 8,348 (75888*11%)
Dec 31, 2021 Cash 6,400
Discount on Receivable 2,162 (4279-3600)
Interest Revenue 8,562
(75888+1,948)*11%
Dec 31, 2021 Cash 80,000
Notes Receivable 80,000
Which of the following is the most profitable investment for a candy shop that earns $1 profit per pound of candy? (5 points) Group of answer choices:
Worker at $10 per hour, producing eight pounds of candy per hour
Worker at $12 per hour, producing 16 pounds of candy per hour
Machine with $5 per hour operating cost, producing 10 pounds of candy per hour Machine with $8 per hour operating cost, producing 14 pounds of candy per hour
Worker at $12 per hour, producing 16 pounds of candy per hour
Answer:
Worker at $12 per hour, producing 16 pounds of candy per hour
Explanation:
Presented below are selected ledger accounts of Whispering Corporation as of December 31, 2020.
Cash $65,000
Administrative expenses 130,000
Selling expenses 104,000
Net sales 702,000
Cost of goods sold 273,000
Cash dividends declared (2020) 26,000
Cash dividends paid (2020) 19,500
Discontinued operations (loss before income taxes) 52,000
Depreciation expense, not recorded in 2019 39,000
Retained earnings, December 31, 2019 117,000
Effective tax rate 20%
Required:
a. Compute net income for 2020.
b. Prepare a partial income statement beginning with income from continuing operations before income tax, and including appropriate earnings per share information.
Answer:
Part a
Whispering Corporation
Income Statement for the year ended December 31, 2020.
Net Sales 702,000
Less Cost of Sales (273,000)
Gross Profit 429,000
Less Expenses
Administrative expenses (130,000)
Selling expenses (104,000)
Depreciation expense (39,000)
Net Income 195,000
Part b
Whispering Corporation
Partial income statement for the year ended December 31, 2020.
Continuing Activities 195,000
Less Discontinued operations ( 52,000
Total Comprehensive income 143,000
Explanation:
Income Statement only includes incomes and expenses.
Earnings per share is what shareholders expect to receive per share out of profits earned.
An airplane is about to leave the jetway and take off with 50 empty seats. The regular coach fare is $400 for a seat, and the marginal cost of carrying an extra passenger is $30. Forty standby passengers are hoping to get on the flight. If 10 of those seats can be filled for $200, 25 seats can be filled for $100, and 40 seats can be filled at $40, what is the socially optimal fare to charge standby passengers waiting to fill those seats
Answer:
the ariplane should sell the tickets at $100
Explanation:
the socially optimal fare maximizes the sum of consumer and supplier surplus:
total surplus at $200 = ($200 - $30) x 10 = $1,700
total surplus at $100 = ($100 - $30) x 25 = $1,750
total surplus at $40 = ($40 - $30) x 40 = $400
What is Quantitative method
Answer:
Quantitative methods emphasize objective measurements and the statistical, mathematical, or numerical analysis of data collected through polls, questionnaires, and surveys, or by manipulating pre-existing statistical data using computational techniques.
Explanation:
On December 1, 2021, Coronado Industries exchanged 48000 shares of its $10 par value common stock held in treasury for a used machine. The treasury shares were acquired by Coronado at a cost of $45 per share, and are accounted for under the cost method. On the date of the exchange, the common stock had a fair value of $60 per share (the shares were originally issued at $35 per share). As a result of this exchange, Coronado's total stockholders' equity will increase by
Answer:
$2,880,000
Explanation:
Calculation to determine what Coronado's total stockholders' equity will increase by
Increase in total stockholders' equity =[(48000*45)-(48000 * (60-45))]
Increase in total stockholders' equity =$2,160,000+$720,000
Increase in total stockholders' equity =$2,880,000
Therefore the total stockholders' equity will increase by $2,880,000
On January 2, 2013 Dyson purchased a utility patent for a new consumer product and paid $180,000. At the time of purchase the patent was valid for 15 years. However the patents useful life was estimated to be only 10 years due to the competitive nature of the product with no residual value. On December 31, 2016, the product was permanently withdrawn from sale under government order because of a potential health hazard. Thus no future positive cash flows will result from use of the patent and its fair value is zero. What amount should Dyson charge against income in 2016 assuming straight-line amortization is appropriately recorded at the end of each year
Answer:
Dyson
The amount that Dyson should charge against the income in 2016 is:
= $126,000.
Explanation:
a) Data and Calculations:
Purchase price of a utility patent on January 2, 2013 = $180,000
Estimated useful life = 10 years
Residual value = $0
Amortization amount = $180,000
Annual amortization expense = $18,000
Accumulated Amortization from 2013 to Dec. 2015 (3 years) = $54,000 ($18,000 * 3)
Remaining book value = $126,000 ($180,000 - $54,000)
b) The amount that Dyson should charge against the income in 2016 is $126,000. This amount write-off the remaining value of the patent since it is no longer in use.
Which of the following is recorded in a country’s balance of payments accounts?
Answer:
Considering there are no options to pick from, the following accounts are recorded in a country’s balance of payments accounts:
1. the current account
2. the capital account
3. the financial account.
Explanation:
Therefore;
1. The current account is part of the country’s balance of payments accounts to define the inflow and outflow of goods and services into a particular country.
2. The capital account is also a country’s balance of payments account that documents all the international capital transfers of a country.
3. The financial account is part of the country’s balance of payments accounts where the international monetary flows concerning the investment in the business, real estate, bonds, and stocks are fully recordsd.
A plant manager wants to know how much she should be willing to pay for perfect market research. Currently there are two states of nature facing her decision to expand or do nothing. Under favorable market conditions the manager would make $100,000 for the large plant and $5,000 for the small plant. Under unfavorable market conditions the large plant would lose $80,000 and the small plant would make $0. If the two states of nature are equally likely, how much should she pay for perfect information
Answer:
She should pay $25,000 for perfect information.
Explanation:
Since it is assumed that the two states of nature are equally likely, we therefore have:
P1 = Probability favorable market condition = 50%, or 0.5
P2 = Probability of unfavorable market condition = 50%, or 0.5
For large plant, we have:
Amount to make under favorable market condition = $100,000
Amount to make unfavorable market condition = -$50,000
Therefore, we have:
Expected value of the amount to make from large plant = (P1 * $100,000) + (P2 * (-$50,000)) = (0.5 * $100,000) + (0.5 * (-$50,000)) = $25,000
For small plant, we have:
Amount to make under favorable market condition = $5,000
Amount to make unfavorable market condition = $0
Therefore, we have:
Expected value of the amount to make from small plant = (P1 * $5,000) + (P2 * $0) = (0.5 * $5,000) + (0.5 * $0) = $2,500
Decision
Expected value of the amount to make from large plant = $25,000
Expected value of the amount to make from small plant = $2,500
Since the expected value of the amount to make from large plant of $25,000 is larger than the expected value of the amount to make from small plant of $2,500, this implies that the maximum the plant manager can make is $25,000.
Therefore, she should pay $25,000 for perfect information.
An accrual system of accounting prescribes;
A. recording all expenses when payment is made.
B. Recording assets when controlled
C. Overstating the expenses
TB MC Qu. 10-63 (Static) ABC Corporation makes a product that uses a ... ABC Corporation makes a product that uses a material with the following direct material standards: Standard quantity 3.8 pounds per unit Standard price $4.00 per pound The company produced 7,300 units in November using 28,710 pounds of the material. During the month, the company purchased 30,800 pounds of the direct material at a total cost of $117,040. The direct materials purchases variance is computed when the materials are purchased. The materials quantity variance for November is:
Answer:
the materials quantity variance for November is $3,880 unfavorable
Explanation:
The computation of the materials quantity variance for November is shown below:
As we know that
Material Quantity variance is
= Standard Price × (Actual Quantity used - Standard Quantity)
= $4 × (28,710 - (7,300 units × $3.8 per pound))
= $4 × (28,710 - 27,740)
= $3,880 unfavorable
hence, the materials quantity variance for November is $3,880 unfavorable
Stork Associates paid $65,400 for a 20-seat skybox at Veterans Stadium for eight professional football games. Regular seats to these games range from $55 to $165 each. At one game, an employee of Stork entertained 18 clients. Stork furnished food and beverages for the event at a cost of $2,200. The game was preceded by a bona fide business discussion, and all expenses are adequately substantiated.
a. Stork can deduct $ for this event.
b. If there was no bona fide business discussion either preceding or after the event, there is and the deduction would be $.
Answer: a. $1100
b. $0
Explanation:
It should be noted that according to IRS, 50% of the expenses on business meals will be deducted by tax payers when some conditions are met such as:
• Expenses incurred shouldn't be costly or extravagant.
• Expenses are necessary.
• Expenses on meal were incurred separately from expenses on entertainment.
• The taxpayer was present there when the expenses were incurred.
Based on the above,
a. The amount that Stork can deduct will be:
= 50% × $2200
= 0.5 × $2200
= $1100
b. If there was no bona fide business discussion either preceding or after the event, the deduction will be $0 because in such case, no expenses were incurred on food or entertainment.
There are assumptions that currently and in the past alcohol and cigarettes advertisements were responsible for a very large percentage of sports bill boards in Namibia. What explanation can you offer for why these products are used to dominate the sports bill boards medium. Discuss with clear examples
Answer:
The advertisements make both drinking and smoking appear like casual and ordinary activities. The adverts function as a superpower by negligibly pressuring sports prayers and fans to consume alcohol and cigarettes. For instance, the adverts have messages to encourage viewers to us beer and switch to become champions like a winning football club.
Explanation:
When price is $5 per unit, quantity demanded is 12 units. When price is $8 per unit, quantity demanded is 6 units. The value of the price elasticity of demand is approximately (before taking absolute value by employing midpoint method) Group of answer choices
Answer:
-13 ÷ 9
Explanation:
The computation of the price elasticity of demand is given below:
As we know that
Price elasticity of demand = % change in quantity demanded ÷ % change in price
So,
% change in quantity demanded is
= (6 units - 12 units) ÷ (6 units + 12 units) ÷ 2
= -6 units ÷ 9 units
= -2 ÷ 3
And,
% change in the price is
= ($8 - $5) ÷ ($8 + $5) ÷ 2
= $3 ÷ $6.5
Now the price elasticity of demand is
= ( -2 ÷ 3 ) ÷ (3 ÷ 6.5)
= -13 ÷ 9
Silver Corporation, which operates a department store, sells a television to a store employee for $300. The regular customer price is $500, and the gross profit rate is 25%. The corporation also sells the employee a service contract for $120. The regular customer price for the contract is $150. How much must the employee include in income from both these transactions in total
Answer:
$75
Explanation:
Calculation to determine How much must the employee include in income from both these transactions in total
Customer price for property $500
Less: Gross profit (25%*$500) ($125)
($500-$125=$375)
Employee price ($300)
INCOME $75
($375-$300)
Customer price for service $150
Less: (20%*$150)max exclusion (30)
($150-$30=$120)
Employee price 120
INCOME 0
($120-$120=$0)
Therefore the amount that the employee must include in income from both these transactions in total is $75
I dont have much time, answer ASAP! Carol works as a manager in her company. The vice president of finance occasionally advises her about her work, although she doesn't directly report to him. What kind of organizational structure does Carol's company follow?
Carol's company follows the _____.
According to the above situation, Carol's company follows the decentralized organizational structure.
What is Organizational Structure?An organizational structure is a framework that describes how specific activities are directed in order to achieve the goals of an organization. Such activities include rules, positions, and responsibilities. The organizational structure also influences the flow of information inside the company.
Employees are empowered to make decisions in a decentralized company, allowing for speedy issue resolution and consideration of employee opinion. The more decision-making authority lower-level employees have, the more decentralized an organization is.
Carol's firm has a decentralized organizational structure, based on the circumstances described above.
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Sunland Company reports the following operating results for the month of August: sales $300,000 (units 5,000); variable costs $223,000; and fixed costs $70,800. Management is considering the following independent courses of action to increase net income. Compute the net income to be earned under each alternative. 1. Increase selling price by 10% with no change in total variable costs or sales volume. Net income $enter a net income if the selling price is increased by 10% 2. Reduce variable costs to 56% of sales. Net income $enter a net income if the variable costs are reduced to 56% of sales 3. Reduce fixed costs by $18,000. Net income $enter a net income if the fixed costs are reduced by $18,000
Answer:
See below
Explanation:
Given selling price per unit = $300,000/5,000 units = $60
1. Increase selling price by 10% with no change in total variable costs or sales volume
Selling price = $60 × 1.1 = $66
Sales revenue = $66 × 5,000 units = $330,000
Increase in sales revenue = $330,000 - $300,000 = $30,000
Here, as costs remains the same, Net income will increase as much as the increase as sales revenue which is $30,000
2. Reduce variable cost to 56% of sales
New variable cost = $330,000 × 56% = $184,800
Saving in variable cost = $223,000 - $184,800 = $38,200
Here, as the fixed cost and sales revenue remains the same, net income will increase as much as the saving in variable cost which is $38,200
3. Reduce fixed cost by $18,000
As the variable cost and sales revenue remains the same, net income will increase as much as the savings in fixed cost which is $18,000
What does "opting out" enable people to do?
A. It allows them to sue companies who use deceptive advertising
techniques.
B. It allows them to let companies know that they do not want them
to share certain information with third parties.
C. It allows them to safeguard their children against hazardous
products.
D. It allows them to rest assured that they won't be discriminated
against when applying for employment.
Answer:
It allows them to let companies know that they do not want them to share certain information with third parties.
Explanation:
"Opting-out" allows people to let companies know that they do not want them to share certain information with third parties. Thus, the correct answer is option (B).
What is opting-out?A person must actively take steps to withdraw their consent for something in order to opt-out. For instance: The user must consciously check the boxes above if they do not want to receive any additional communications. They can opt-in by doing nothing.
There are a number of ways for people to opt out of getting unwanted information about goods or services. This choice is frequently connected to direct marketing initiatives like e-mail or direct mail marketing.
Therefore, people can let companies know that they do not want them to share certain information with third parties by opting out .
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A disadvantage of the corporate form of business ownership is that:
a) shareholders receive dividends.
b) most shareholders have little direct control over how the company is managed.
shareholders are not personally liable for the debts
of the corporation except to
the extent of their investment.
c)the life of the corporation is ongoing even after the death of a shareholder.
Answer:
b) most shareholders have little direct control over how the company is managed.
Software Distributors reports net income of $48,000. Included in that number is depreciation expense of $6,500 and a loss on the sale of land of $4,300. A comparison of this year's and last year's balance sheets reveals a decrease in accounts receivable of $18,000, a decrease in inventory of $11,500, and an increase in accounts payable of $38,000. Required: Prepare the operating activities section of the statement of cash flows using the indirect method. (List cash outflows and any decrease in cash as negative amounts.)
Answer:
Operating Activities Section
Net Income $48,000
Adjust for non -cash items :
Depreciation expense $6,500
Loss on the sale of land $4,300
Adjust for changes in working capital :
Decrease in accounts receivable $18,000
Decrease in inventory $11,500
Increase in accounts payable $38,000
Net Cash Provided by Operating Activities $126,000
Explanation:
The Indirect Method of preparing the cash flow from operating activities section reconciles the Net Income for the Year to Operating Cash flow amount.
This reconciliation adjusts non cash items previously included in net income and changes in working capital to arrive at Operating Cash flow amount as shown above.
Paxton Company can produce a component of its product that incurs the following costs per unit: direct materials, $9.10; direct labor, $13.10, variable overhead $2.10 and fixed overhead, $7.10. An outside supplier has offered to sell the product to Paxton for $31.40. Compute the net incremental cost or savings of buying the component.Multiple Choice$2.10 cost per unit.$7.10 savings per unit.$0 cost or savings per unit.$7.10 cost per unit.$2.10 savings per unit.
Answer:
$0 cost or savings per unit
Explanation:
Cost to Buy
Purchase Price $31.40
and,
Costs to Make
Direct materials $9.10
Direct labor $13.10
Variable overhead $2.10
Fixed Overheads $7.10
Total $31.40
therefore
The net incremental cost or savings of buying the component is $0 cost or savings per unit
Bunker Hill Mining Company has two competing proposals: a processing mill and an electric shovel. Both pieces of equipment have an initial investment of $750,000. The net cash flows estimated for the two proposals are as follows:
The estimated residual value of the processing mill at the end of Year 4 is $280,000.
Present Value of $1 at Compound Interest
Year 6% 10% 12% 15% 20%
1 0.943 0.909 0.893 0.870 0.833
2 0.890 0.826 0.797 0.756 0.694
3 0.840 0.751 0.712 0.658 0.579
4 0.792 0.683 0.636 0.572 0.482
5 0.747 0.621 0.567 0.497 0.402
6 0.705 0.564 0.507 0.432 0.335
7 0.665 0.513 0.452 0.376 0.279
8 0.627 0.467 0.404 0.327 0.233
9 0.592 0.424 0.361 0.284 0.194
10 0.558 0.386 0.322 0.247 0.162
Determine which equipment should be favored, comparing the net present values of the two proposals and assuming a minimum rate of return of 15%. Use the present value table appearing above. If required, round to the nearest dollar.
Processing Mill Electric Shovel
Present value of net cash flow total $ $
Less amount to be invested $ $
Net present value $ $
Answer:
the processing mill h as a higher NPV and it would be more preferred
Explanation:
Here are the cash flows
Net Cash Flow
Year Processing mill Electric Shovel
1 310000 330000
2 260000 325000
3 260000 325000
4 260000 320000
5 180000
6 130000
7 120000
8 120000
Net present value is the present value of after-tax cash flows from an investment less the amount invested.
NPV can be calculated using a financial calculator
Only projects with a positive NPV should be accepted. A project with a negative NPV should not be chosen because it isn't profitable.
When choosing between positive NPV projects, choose the project with the highest NPV first because it is the most profitable
Processing Mill
Cash flow in year 0 = $-750,000.
Cash flow in year 1 = 310000
Cash flow in year 2 = 260000
Cash flow in year 3 = 260000
Cash flow in year 4 = 260000
Cash flow in year 5 = 180000
Cash flow in year 6 = 130000
Cash flow in year 7 = 120000
Cash flow in year 8 = 120000
I = 10 %
NPV = 265,807.69
Electric shovel
Cash flow in year 0 = $-750,000.
Cash flow in year 1 = 330,000
Cash flow in year 2 = 325,000
Cash flow in year 3 = 325,000
Cash flow in year 4 = 320,000
I = 10%
NPV = 179,357.03
The NPV of the processing mill is higher and would be more preferred
To find the NPV using a financial calculator:
1. Input the cash flow values by pressing the CF button. After inputting the value, press enter and the arrow facing a downward direction.
2. after inputting all the cash flows, press the NPV button, input the value for I, press enter and the arrow facing a downward direction.
3. Press compute
Identify each person in the table as structurally, frictionally, or cyclically unemployed.
a. Lorenzo recently lost his job as a dishwasher. Minimum-wage legislation keeps employers from adding more of the low-skill positions for which he qualifies, so he has been unable to find work.
b. Teresa is a real estate agent. House sales in her area have declined because the region has been going through a recession. She has no clients and is currently looking for a new full time job.
c. Neha just graduated from college and is looking for a full- time position with an investment banking firm.
Answer:
a. Structurally unemployed.
b. Cyclically unemployed.
c. Frictionally unemployed.
Explanation:
Unemployment rate refers to the percentage of the total labor force in an economy, who are unemployed but seeking to be gainfully employed. The unemployment rate is divided into various types, these include;
I. Natural Rate of Unemployment (NU).
II. Frictional unemployment rate (FU).
III. Structural unemployment rate (SU).
IV. Actual unemployment rate (AU).
V. Cyclical unemployment rate (CU).
a. Structurally unemployed: Lorenzo recently lost his job as a dishwasher. Minimum-wage legislation keeps employers from adding more of the low-skill positions for which he qualifies, so he has been unable to find work.
b. Cyclically unemployed: Teresa is a real estate agent. House sales in her area have declined because the region has been going through a recession. She has no clients and is currently looking for a new full time job. A cyclical unemployment can be defined as a type of unemployment which is typically related to changes in the business, economy or industry cycle such as recession, governmental policies etc.
c. Frictionally unemployed: Neha just graduated from college and is looking for a full- time position with an investment banking firm.
You own a portfolio that has $1,600 invested in Stock A and $2,700 invested in Stock B. Assume the expected returns on these stocks are 11 percent and 17 percent, respectively. What is the expected return on the portfolio
Answer:
the expected return on the portfolio is 14.77%
Explanation:
The computation of the expected return on the portfolio is shown below:
The expected return is
= ($1,600 ÷ $4,300) × 11% + ($2,700 ÷ $4,300) × 17%
= 14.767 %
= 14.77%
The $4,300 comes from
= $1,600 + $2,700
= $4,300
hence, the expected return on the portfolio is 14.77%
The same is considered
MacKenzie Company sold $680 of merchandise to a customer who used a Regional Bank credit card. Regional Bank deducts a 4.0% service charge for sales on its credit cards. MacKenzie electronically remits the credit card sales receipts to the credit card company and receives payment immediately. The journal entry to record this sale transaction would be:
Answer:
Total Sales value = $680
Service charge percentage = 4%
Credit card expenses = Total Sales Value * Service Charge percentage = $680 * 4% = $27.20
Net amount received from credit card company = Total sales value - Credit card expenses = $680 - $27.20 = $652.80
The Journal entry to record sale transaction would be will be as follows:
Date Particulars Debit Credit
Cash or Bank $652.80
Credit card expenses $27.20
Sales $680
(Being sales made through card)
7 reasons why businesses should be aware of the political legal environment
Answer:
7 reasons why businesses should be aware of the political legal environment are as follows:
1- Businesses do not cease to be part of a much larger environment, which is the nation as a whole, with which what happens in it will affect business to a greater or lesser extent.
2- Many times, the political interests of certain sectors can favor or harm certain businesses, with which businessmen must be attentive to those interests.
3- Politicians are the ones who give confidence in the country to foreign investors, with which their policies can increase or restrict competition from local investors.
4- The generation of employment that arises from a favorable political and legal environment means that businesses have the necessary workforce to maximize their production.
5- The political and economic stability allows the reinvestment of the profits of the entrepreneurs and their businesses.
6- The existence of productive development plans and other subsidies to productive companies can be used by businesses as a government aid to maximize their production.
7- In short, the stability of the nation will make it easier for businesses to prosper, while political stability usually entails economic stability.
Maxwell Machining is considering investing $100,000 in a new piece of machinery that will generate net annual cash flows of $50,000 each year for the next 5 years. The machine has a salvage value of $20,000 at the end of its 5 year useful life. Maxwell's cost of capital and discount rate is 10%. Which of the following tables and criteria should we use to discount the net annual cash flow?
a. PV of annuity table, n=5, i=10%
b. PV of a single sum table, n=5, i=10%
c. PV of a single sum table, n=1, i=10%
d. PV of annuity table, n=1, i=10%
Answer:
Option a is the correct answer.
Explanation:
An annuity is a series of payments that are fixed in value, occur after equal intervals of time and are for a finite or limited time period. To calculate the present value of an annuity, we use the annuity table for discount rates.
In the provided question, the cash flows from machine are in the form of an annuity as the amount of cash flows is fixed at $50000, they occur each year which means after equal intervals of time and they are for a finite time period as it is mentioned that the cash flows will occur for 5 years. Thus, it qualifies as an annuity and the number of discounting period is 5 years or 5. The discount rate that will be used is provided as 10%. Thus, the Present value of this annuity can be calculated as,
PV of annuity table = n = 5, i = 10%
The table and criteria to use to discount the net annual cash flow is PV of annuity table, n=5, i=10%.
An annuity is a financial product that pays the benefactor a stream of income over a period of time. The cash flows from this machine can be considered an annuity because it generates a cash flow for a period of five years. Thus, the annuity table would be used.
The appropriate discount rate to use is the cost of capital of the project. The discount rate is the minimum return of a project if it is going to profitable.
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Summit Services Co. offers its services to individuals desiring to improve their personal images. After the accounts have been adjusted at May 31, the end of the fiscal year, the following balances were taken from the ledger of Summit Services:
Fees Earned $243,000
Dividends 33,000
Rent Expense 50,800
Retained Earnings 540,000
Supplies Expense 12,400
Wages Expense 213,300
Miscellaneous Expense 5,900
Required:
Journalize the closing entries required to close the accounts.
Answer:
May-31
Dr Fees earned $243,000
Retained earnings $33,500
Cr Rent expense $50,800
Cr Supplies expense $12,400
Cr Wages expense $213,300
Cr Miscellaneous expense $ 4,300
May-31
Dr Retained Earnings $33,000
Cr Dividends $33,000
Explanation:
Preparation to Journalize the closing entries required to close the accounts.
May-31
Dr Fees earned $243,000
Retained earnings $33,500
($213,300+$12,400+$50,800-$243,000)
Cr Rent expense $50,800
Cr Supplies expense $12,400
Cr Wages expense $213,300
Cr Miscellaneous expense $ 4,300
(To close the Expenses )
May-31
Dr Retained Earnings $33,000
Cr Dividends $33,000
(To close the dividends )
Lopez Corporation incurred the following costs while manufacturing its product.
Materials used in product $124,260 Advertising expense $49,670
Depreciation on plant 69,650 Property taxes on plant 21,750
Property taxes on store 8,290 Delivery expense 27,060
Labor costs of assembly-line 120,570 Sales commissions 43,390
Factory supplies used 25,810 Salaries paid to sales clerks 56,110
Work in process inventory was $13,700 at January 1 and $17,590 at December 31. Finished goods inventory was $66,410 at January 1 and $49,060 at December 31.
Compute the cost of goods manufactured.
Answer:
$358,150
Explanation:
Cost of goods manufactured is calculated in a Schedule of Manufacturing Costs as follows :
Cost of goods manufactured = Beginning Work In Process + Total Manufacturing Costs - Ending Work In Process
where,
Total Manufacturing Costs :
Materials used in product $124,260
Depreciation on plant $69,650
Property taxes on plant $21,750
Labor costs of assembly-line $120,570
Factory supplies used $25,810
Total $362,040
therefore,
Cost of goods manufactured = $13,700 + $362,040 - $17,590 = $358,150
McCanless Co. recently purchased an asset for $2,100,000 that will be used in a 3-year project. The asset is in the 3-year MACRS class. The depreciation percentage each year is 33.33 percent, 44.45 percent, 14.81 percent, and 7.41 percent, respectively. What is the amount of depreciation in Year 2
Answer:
$933,450
Explanation:
Calculation to determine What is the amount of depreciation in Year 2
using this formula
Year 2 depreciation=Year 2 depreciation percentage* Asset purchased
Let plug in the formula
Year 2 depreciation = .4445*$2,100,000
Year 2 depreciation = $933,450
Therefore the amount of depreciation in Year 2 will be $933,450