Answer:
a. $8,000 gain
Explanation:
The face value of the bonds purchased by Pluto Corporation are $120,000. The bonds are purchased at discount of $1,980. The bonds have carrying value of $126,019 at the time of purchase. The net gain or loss is calculated by the difference between two values.
$120,000 - $126,019 - $6,019
The discount amount of the bond was $1,980.
Total gain on the bonds approximately ($6,019 + $1,980) = $8,000
Tyler Hawes and Piper Albright formed a partnership, investing $210,000 and $70,000, respectively. Determine their participation in the year's net income of $104,000 under each of the following independent assumptions. No agreement concerning division of net income. Divided in the ratio of original capital investment. Interest at the rate of 5% allowed on original investments and the remainder divided in the ratio of 2:3. Salary allowances of $36,000 and $45,000, respectively, and the balance divided equally. Allowance of interest at the rate of 5% on original investments, salary allowances of $36,000 and $45,000, respectively, and the remainder divided equally.
Hawes Albright
(a) $ $
(b) $ $
(c) $ $
(d) $ $
(e) $ $
Answer:
No agreement concerning division of net income.
Hawes = $52,000
Albright = $52,000
Divided in the ratio of original capital investment.
Hawes = (210/280) x $104,000 = $78,000
Albright = (70/280) x $104,000 = $26,000
Interest at the rate of 5% allowed on original investments and the remainder divided in the ratio of 2:3.
Hawes = ($210,000 x 5%) + $36,000 = $46,500
Albright = ($70,000 x 5%) + $54,000 = $57,500
Salary allowances of $36,000 and $45,000, respectively, and the balance divided equally.
Hawes = $36,000 + $11,500 = $47,500
Albright = $45,000 + $11,500 = $56,500
Allowance of interest at the rate of 5% on original investments, salary allowances of $36,000 and $45,000, respectively, and the remainder divided equally.
Hawes = ($210,000 x 5%) + $36,000 + $4,500 = $51,000
Albright = ($70,000 x 5%) + $45,000 + $4,500 = $53,000
Question 5 of 10
When should a writer establish common ground before the bottom-line
statement?
A. When the report does not have an executive summary
O B. When the document is minutes of a meeting
Ο Ο Ο Ο
C. When the reader may disagree with the bottom-line statement
O D. When the details are arranged in order of importance
SUBMIT
Answer:
C. When the reader may disagree with the bottom-line statement
Explanation:
A common ground can be regarded as an area of shared interests which is been held number of people or groups. It is a point at which opinions and interest is been agreed upon by parties. A bottom-line statement can be regarded as a likely closing statement made after an agreement has been reached, it's just like a conclusion after the whole statement. Hence, it is necessary for the writer to establish a common ground first before he/she will establish bottom line statement "when the reader may disagree with the bottom-line statement''
arrange the scrambled letter
utsbetiust
icevers
pecitionmto
imcltea
ntertsan
Answer:
below
Explanation:
substitute
service
competition
climate
entrants
There are only two consumers in a market, Harry and Hermione. Harry is willing to buy 12 magic wands when the price is $20 per wand and 8 magic wands when the price is $30 per wand. Hermione is willing to buy 15 magic wands when the price is $20 per wand and 10 magic wands when the price is $30 per wand. Given that these are the only two individuals in the market, what is the market demand for wands when the price of wands is $30
Answer:
The answer is 14
Explanation:
Market demand is the certain product need that is required by the consumers at a specific price. The market demand, when the price of the wand is $30, is 18.
What is market demand?Market demand is a specific number of services or products that customers or the consumer purchase at a fixed specific value in the market.
As in the above case in the market, only two consumers are present and the formula for the market demand is given by adding the demands all together sold at the specific price.
At the price, $30, Harry is willing to buy 8 magic wands and Hermione is willing to buy 10 magic wands. Form this the two demands can be added as there are only two consumers, resulting in the market demand being 18.
Therefore, the market demand at $30 is 18.
Learn more about market demand here:
https://brainly.com/question/3331860
Stallion Corporation sold $190,000 par value, 10-year first mortgage bonds to Pony Corporation on January 1, 20X5. The bonds, which bear a nominal interest rate of 10 percent, pay interest semiannually on January 1 and July 1. The entry to record interest income by Pony Corporation on December 31, 20X7, was as follows:
Note: Assume using straight-line amortization of bond discount or premium.
General Journal Debit Credit
Interest Receivable 9,500
Interest Income 9,025
Investment in Stallion Corporation Bonds 475
Pony Corporation owns 65 percent of the voting stock of Stallion Corporation, and consolidated statements are prepared on December 31, 20X7.
Required:
A. What was the original purchase price of the bonds to Stallion Corporation?
B. What is the balance in Pony's bond investment account on December 31, 20X7?
C. Prepare the worksheet elimination entry or entries needed to remove the effects of the intercompany ownership of bonds in preparing consolidated financial statements for 20x7.
• Record the entry to eliminate the effects of the intercompany ownership in the bonds.
• Record the entry to eliminate the intercompany interest receivables/payables.
Answer:
a. Amortization of Bond Premium semi-annual = $475
Amortization of Bond Premium annual = $475*2 = $950
Bond Premium = $950*10 years = $9,500
Par value of Bonds $190,000
Premium on Bonds $9,500
Original Price of Bonds $199,500
b. Original Purchase Price = $199,500
Semi-annual periods from Jan 1,20X5 - Dec 31,20X7 = 3 yrs*2 = 6 periods
Premium amortization till Dec 31, 20X7 = $475*6 = $2,850
Balance in Bond Investment account = $199,500 - $2,850
Balance in Bond Investment account = $196,650
c. Event Accounts & Explanation Debit Credit
1. Bonds Payable $190,000
Bond Premium ($9,500 - $2,850) $6,650
Interest Income ($9,025*2) $18,050
Investment in Stallion Corporation Bonds $196,650
Interest Expense $18,050
(To record the entry to eliminate the effects of the
inter-company ownership in the bonds)
2. Interest Payable $9,500
Interest Receivable $9,500
(To record the entry to eliminate the inter-company
interest receivables/payable)
You own your own business and you need to interview 2 person to have a specific job.(BE CREATIVE)
Write 10 question for your interview...
The difference between a car's original cost and its selling price is called the markup. A. True or B. False
XYZ Corporation is contemplating the replacement of an existing asset used in the operation of its business. The original cost of this asset was $28,000; since date of acquisition, the company has taken a total of $20,000 of depreciation expense on this asset. The current disposal (market) value of this asset is estimated as $18,000. XYZ is subject to a combined income tax rate, t, of 34%. What is the projected after-tax cash flow associated with the sale of the existing asset, rounded to nearest hundred dollars
Answer:
The projected after-tax cash flow associated with the sale of the existing asset is $14,600.
Explanation:
The projected after-tax cash flow can be calculated as follows:
Net book value of the asset = Original cost - Accumulated depreciation expense = $28,000 - $20,000 = $8,000
Capital gains = Estimated current disposal (market) value of the asset - Net book value of the asset = $18,000 - $8,000 = $10,000
Capital gains tax = Capital gains * Tax rate = $10,000 * 34% = $3,400
Projected after-tax cash flow = Estimated current disposal (market) value of the asset - Capital gains tax = $18,000 - $3,400 = $14,600
Therefore, the projected after-tax cash flow associated with the sale of the existing asset is $14,600.
N Force, a U.S. car manufacturing company, has expanded its business operations to China. Unlike their U.S. colleagues, many Chinese employees are reluctant to address senior colleagues by their first names because Chinese culture emphasizes respect for elders. To create an organizational culture that is common for all its employees, management at N Force headquarters has decided to assign titles to the senior staff. Which of the following methods would be best suited in China's top-down hierarchical culture to spread the message of the new organizational culture?
a. Assigning a team of junior staff to conduct a presentation on a list of code names for senior employees
b. Requesting employees to spread the message to peers
c. Requesting leaders to impart the message to employees
d. Creating a video starring junior staff to create awareness about the new organizational culture
Answer:
c. Requesting leaders to impart the message to employees
Explanation:
As the culture of an organization that suits to china in terms of elders here the best way to pass the message i.e. from the leaders to the employees
The option c would represent the same and considered to be best suited in China with respect to the top-down hierarchical culture so that the message could be spreaded
A non-current asset was depreciated at the end of the first year of ownership using the straight-line method based on the following information. Cost $20 000 Working life 4 years Residual value $4000 It was then found that the reducing balance method at 30% per annum should have been used. What was the effect on the profit for the year of correcting this error?
A Decrease by $2000
B Increase by $2000
C Decrease by $6000
D Increase by $6000
Answer:
Correcting the error, the residual value of the product would increase by $802.
Explanation:
Since a non-current asset was depreciated at the end of the first year of ownership using the straight-line method based on the following information: Cost $ 20,000 Working life 4 years Residual value $ 4000; and it was then found that the reducing balance method at 30% per annum should have been used, to determine what was the effect on the profit for the year of correcting this error the following calculation should be performed:
100 - 30 = 70
Year 0: 20,000
Year 1: 20,000 x 0.7 = 14,000
Year 2: 14,000 x 0.7 = 9,800
Year 3: 9,800 x 0.7 = 6,860
Year 4: 6,860 x 0.7 = 4,802
Thus, correcting this error, the residual value of the product would increase by $ 802.
A company deposits all cash receipts on the day they are received and makes all cash payments by check. The company's June bank statement shows $24,861 on deposit in the bank. The comparison of the bank statement to its cash account revealed the following: Deposit in transit 2,750 Outstanding checks 1,188 Additionally, a $35 check written and recorded by the company was incorrectly recorded by the bank as a $53 deduction. The adjusted cash balance per the bank records should be:
Answer: $26441
Explanation:
Balance As per bank statement = $24861
Add: deposit in transit = $2750
Less: Outstanding checks = $1188
Add: Recording error = ($53 - $35) = $18
Adjusted cash balance = $26441
The CFO of Gabe Corp. suspects that an employee has been stealing cash from the company. The employee is responsible for receiving cash from customers and posting the payments to the customer accounts, as well as preparing the bank reconciliation and managing the cash account. To check up on the employee, the CFO prepares his own bank reconciliation and comes up with the following: Gabe Differences Bank $3,900 Beginning balance $4,000 (50) Service charges Outstanding checks (800) (100) NSF Check from Customer Deposits in transit 250 25 Interest earned --------- $3,775 Total $3,450 Do you think the employee has stolen from the company
Answer:
Yes
Explanation:
To come in any conclusion first do the following calculations
Updated cash book
Closing Balance as per Gabe = $3,775
Less: Outstanding cheque -$800
Add: Cheque Deposited $250
Updated closing balance is $3,225
Bank reconcilliation statement
Closing balance as per Bank $3450
Less: NSF check from the customer -$100
Less: Service Charges -$50
Add: Interest earned $25
Reconciled Balance as per Bank $3,325
As from the above calculations we can see that there is a difference of $100 so it is cleared that the employee has stolen from the company
The two main sources of stockholders' equity are Question 4 options: investments by stockholders and net income retained in the business investments by stockholders and dividends paid net income retained in the business and dividends paid investments by stockholders and purchases of assets
Answer:
investments by stockholders and net income retained in the business.
Explanation:
Retained earnings also known as accumulated earnings, can be defined as the total amount of net income held by a corporation for its future use after paying out dividends to its shareholders.
The retained earnings statement refers to a financial statement that enumerate changes in retained earnings for an organization over a specific period of time. The retained earnings statement is the statement of owner's equity that outlines details of changes in the amount of retained earnings (profits) over a specified period in an organization.
The main purpose of preparing a retained earnings statement is to boost investor's confidence and improve market value.
Generally, retained earnings are used to pay off debts, used for capital expenditures and working capitals.
Retained earnings represents the total stockholders' equity reinvested back into the company.
This ultimately implies that, Retained Earnings statement refers to the changes in the retained earnings account of an organization or business firm, which occurred during the accounting period and typically comprises of net income arising from the income statement.
Thus, the Retained Earnings statement is based upon;
Retained Earnings + Net Income – Dividends.
Retained Earnings statement can be defined as a financial statement that enumerate changes in retained earnings for an organization over a specific period of time. The retained earnings statement is the statement of owner's equity that outlines details of changes in the amount of retained earnings (profits) over a specified period in an organization.
Hence, the two main sources of stockholders' equity are investments by stockholders and net income retained in the business.
The daily cost of producing pizza in New Haven is C(Q) = 4Q + (Q2/40); the marginal cost is MC = 4 + (Q/20). There are no avoidable fixed costs. What is the market supply function if there are 10 firms making pizza? If 20 firms are making pizza? What is the market supply curve under free entry? [HINT: As the first step, find the AC and show that AC is at its minimum when Q = 0.]
Answer:
[tex]q_{10}[/tex] = 200P - 800
[tex]q_{20}[/tex] = 400P - 1600
Explanation:
let the supply function be : P = MC
P = 4 + Q/20
therefore Q = 20P - 80 ( supply function )
For 10 firms
Q = 10( 20P - 80 ) = 200P - 800
for 20 firms
Q = 20(20P - 80 ) = 400P - 1600
next determine market supply curve under free entry
AC = 4 + Q/40
Hence ; when Q = 0 , AC = 4 and this is for unlimited number of firms
he following items appeared on the Year 6 year-end trial balance for the Brown Coffee Company:DebitsCreditsRevenues$600,000Operating expenses420,000Gain from disposal of component200,000Restructuring costs100,000Interest expense20,000Unrealized gain on AFS Debt Investment10,000Gain on sale of operating assets30,000Income tax expense has not yet been accrued. The company's income tax rate is 20% on all items. What amount should be reported in the company's year Year 6 income statement as income from continuing operations
Answer:
net income $72,000
Explanation:
The computation of the amount that should be reported is shown below:
Revenue $600,000
less:
operating expense -$420,000
restructing costs -$100,000
interest expense -$20,000
Add: gain on sale of investments $30,000
EBIT $90,000
less income tax at 20% - $18,000
net income $72,000
The optimal risky portfolio can be identified by finding ____________. I. the minimum variance point on the efficient frontier II. the maximum return point on the efficient frontier the minimum variance point on the efficient frontier III. the tangency point of the capital market line and the efficient frontier IV. the line with the steepest slope that connects the risk free rate to the efficient frontier A. I and II only B. II and III only C. I and IV only D. III and IV only
Answer:
D. III and IV only.
Explanation:
Portfolio variance can be defined as the measurement of risk or dispersion of returns of a set of securities that makes up a portfolio fluctuate over a period of time.
Simply stated, portfolio variance is typically the total returns of the portfolio over a specific period of time.
In order to calculate the portfolio variance, the standard deviations of each security in the portfolio with their respective correlations security pair in the portfolio would be used. Portfolio variance is the square of standard deviation.
A two-asset portfolio with a standard deviation of zero can be formed when the assets have a correlation coefficient equal to negative one (-1) because this defines the efficiency frontier. In Economical portfolio theory, the efficient frontier is a group of optimal portfolios that offers an investor the highest expected return for a specific risk level or offers the lowest risk for a defined level of expected return.
A common risk can be defined as a type of risk that affects the entirety of a business firm or company and as such can't be diversified.
Generally, the optimal risky portfolio can be identified by finding the tangency point of the capital market line and the efficient frontier and the line with the steepest slope that connects the risk free rate to the efficient frontier.
a) Why is ethical relativism considered to be self-contradictory?
b) Explain conceptual muddles with an example.
Answer:
El relativismo no puede ser contradictorio porque no afirma ni niega nada. La expresión de una actitud moral consiste en valorar la diversidad.
Explanation:
El relativismo no puede ser contradictorio porque no afirma ni niega nada. La expresión de una actitud moral consiste en valorar la diversidad.
Suppose that the U.S. government decides to charge wine consumers a tax. Before the tax, 35 billion bottles of wine were sold every year at a price of $7 per bottle. After the tax, 29 billion bottles of wine are sold every year; consumers pay $8 per bottle (including the tax), and producers receive $4 per bottle. The amount of the tax on a bottle of wine is $1 per bottle. Of this amount, the burden that falls on consumers is $ per bottle, and the burden that falls on producers is $ per bottle. True or False: The effect of the tax on the quantity sold would have been smaller if the tax had been levied on producers.
Answer:
1. The amount of tax on a bottle of wine is $4.
2. The tax burden on consumers is $1.
3. The tax burden on producers is $3.
4. The effect on the tax on the quantity sold would have been smaller if the tax had been levied on producers.
False.
Explanation:
a) Data and Calculations:
Before the tax, the number of bottles of wine sold every year at $7 per bottle = 35 billion bottles
After the tax, the number of bottles of wine sold every year at $8 per bottle = 29 billion bottles
Therefore, there is a reduction of 6 billion bottles as a result of the increased price of $1 per bottle (from $7 to $8).
The price received by producers = $4 per bottle
Therefore, there is a total tax of $4 ($8 - $4)
Consumers bear $1 ($8 - $7)
Producers bear $3 ($7 - $4)
The effect of the tax would have still increased the price to $8 or more. Thus, if the tax had been levied on producers, the quantity of bottles sold would have reduced drastically.
Corbel Corporation has two divisions: Division A and Division B. Last month, the company reported a contribution margin of $42,100 for Division A. Division B had a contribution margin ratio of 35% and its sales were $220,000. Net operating income for the company was $34,200 and traceable fixed expenses were $50,100. Corbel Corporation's common fixed expenses were:
Answer:
Common fixed costs= $34,800
Explanation:
First, we need to calculate the contribution margin for Division B:
Contribution margin Division B= slaes*contribution margin ratio
Contribution margin Division B= 220,000*0.35
Contribution margin Division B= $77,000
Now, the segmented margin for both Divisions:
Segmented margin= (42,100 + 77,000) - 50,100
Segmented margin= $69,000
Finally, the common fixed costs:
Common fixed costs= segmented margin - net income
Common fixed costs= 69,000 - 34,200
Common fixed costs= $34,800
Three professors at George Washington University did an experiment to determine if economists are more selfish than other people. They dropped 122 stamped, addressed envelopes with $20 cash in two different classrooms (one economics, one not) on the George Washington campus. Of these, 42% were returned overall. From the economics class 51% of the envelopes were returned. From the other class 36% were returned.
From
the business, psychology, and history classes 31% were returned.
Let: R = money returned; E = economics classes; O = other classes
a. Write a probability statement for the overall percent of money returned.
b. Write a probability statement for the percent of money returned out of the economics classes.
c. Write a probability statement for the percent of money returned out of the other classes.
d. Is money being returned independent of the class? Justify your answer numerically and explain it.
e. Based upon this study, do you think that economists are more selfish than other people? Explain why or why not. Include numbers to justify your answer.
Solution :
It is given that :
At George Washington University, three professors wanted to do an experiment to find out if the economist people are more selfish than the other people.
They dropped 122 stamped addressed envelopes filled with 20 dollar cash at a economics classroom and the other at the other subjects classroom.
It is given that --
money returned = R
economics classes = E
other classes = O
a). the probability statement of the overall percent of the money returned is given by : 100.P(R)
b). the statement of probability that the percent of money returned out of the economics classes is 100.P(R|E)
c). the statement of probability that shows the percent of the money returned out of the other classes is 100.P(R|O)
d). No, the money returned is not independent of the classes as the P(R) is not equal to P(R|E)
e). No, based on the study, the economist are not selfish than other classes' people as the percent of the envelops returned from the economics classes is 51% and that from other classes is 36%.
Organizers of an outdoor summer concert in Toronto are concerned about the weather conditions on the day of the concert. They will make a profit of $42,000 on a clear day and $12,000 on a cloudy day. They will make a loss of $6,000 if it rains. The weather channel has predicted a 52% chance of rain on the day of the concert. Calculate the expected profit from the concert if the likelihood is 11% that it will be sunny and 37% that it will be cloudy.
Answer:
$5,940
Explanation:
Calculation for the expected profit
Expected profit= (42,000*0.11)+(12,000*0.37)+(-6,000*0.52)
Expected profit=4,620+4,440+(-3,120)
Expected profit=$5,940
Therefore Expected profit will be $5,940
A company begins a review of ordering policies for its continuous review system by checking the current policies for a sample of SKUs. Following are the characteristics of one item:
Demand (D) = 72 units/week (Assume 48 weeks per year)
Ordering and setup cost (S) = $55 /order
Holding cost (H) = $18 /unit/year
Lead time (L) = 3 week(s)
Standard deviation of weekly demand = 18 units
Cycle-service level = 90 percent
EOQ = 145 units
Under the same information as above, develop the best policies for a periodic review system.
1. The value of P that gives the same approximate number of orders per year as the EOQ is weeks (Hint: please round your answer to the nearest positive integer number).
2. The target inventory level that provides an 88 percent cycle-service level is units (Hint: please round your answer to the nearest positive integer number).
Answer:
Explanation:
Given that:
weekly demand = 72 units
no of weeks in 1 year = 48
Then; total demand = 72 × 48 = 3456 units
No of orders = [tex]\dfrac{\text{total demand }}{EOQ}[/tex]
= [tex]\dfrac{\text{3456}}{145}[/tex]
∴
The periodic review (P) = [tex]\dfrac{1}{no \ of \ orders}[/tex]
= [tex]\dfrac{1}{\dfrac{3456}{145}}[/tex]
[tex]= \dfrac{145}{3456}[/tex]
= 0.041956 year
≅ 2 weeks
Z score based on 88 percent service level = NORMSINV(0.88) = 1.18
Here;
Lead time = 3 wks
P = 2 weeks
Thus protection interval = ( 3+2) weeks
= 5 weeks
Safety stock = z-score × std dev. of demand at (P+L) days
std dev = [tex]\sqrt{5 } \times 18[/tex] = 2.236 × 18
std dev = 40.248 units
Safety stock = 1.18 × 40.248
safety stock = 47.49 units
Safety stock ≅ 48 units
Average demand during(P + L) = 5 × 72 units
= 360 units
Target inventory level = average demand + safety stock
= 360 units + 48 units
= 408 units
Bakery A sells bread for $2 per loaf that costs $0.50 per loaf to make. Bakery A gives an 80% discount for its bread at the end of the day. Demand for the bread is normally distributed with a mean of 300 and a standard deviation of 30. What order quantity maximizes expected profit for Bakery A
Answer:
324
Explanation:
Calculation to determine What order quantity maximizes expected profit for Bakery A
First step is for the Salvage value
Salvage value = $2 × (1 - 80%)
Salvage value= $0.40
Second step is to calculate the Overage cost
Overage cost = $0.50 - $0.40
Overage cost = $0.10
Second step is to calculate the Underage cost
Underage cost = $2 - $0.50
Underage cost = $1.50
Third step is to calculate the The critical ratio
The critical ratio = 1.5/(1.5 + 0.4) = 0.79. z = 0.8
Now let calculate the Order quantity
Order quantity = 300 + (0.8× 30)
Order quantity= 324
Therefore the order quantity maximizes expected profit for Bakery A is 324
26223-CZ company a job-order costing system with a single plantwide predetermined overhead rate based on machine-hours. The 26223-CZ company based its predetermined overhead rate for the current year on the following data: Total machine-hours 50,000 Total fixed manufacturing overhead cost $ 400,000 Variable manufacturing overhead per machine-hour $ 6 Recently, Job D284 was completed with the following characteristics: Number of units in the job 40 Total machine-hours 100 Direct materials $ 750 Direct labor cost $ 2,750 If the company marks up its unit product costs by 60% then the selling price for a unit in Job D284 is closest to: (Round your intermediate calculations to 2 decimal places.)
Answer:
$4,900
Explanation:
Total variable overhead estimated
= $6 × 50,000
= $300,000
Therefore,
Total overhead estimated = Total variable overhead estimated + Total fixed overhead estimated
= $300,000 + $400,000
= $700,000
Predetermined overhead rate
= $700,000/50,000
= $14 per machine hour
Total overhead applied
= $14 × 100
= $1,400
Therefore,
Total job cost = Direct material + direct labor + total overhead
= $750 + $2,750 + $1,400
= $4,900
Use the following information to answer the next question. Total Asset = $40 million Depreciation = $1.0 million. Basic earning power (BEP) ratio is 20% Lease payments = 0.6 million Times-interest-earned (TIE) ratio is 6.55 Principal payments = 4 million What is the company's EBIT? The company's interest expense? Select one: a. $8.0 million; $1.22 million b. $7.5 million; $0.75 million c. $8.0 million; $0.62 million d. $1.35 million; $0.37 million e. $3.33 million; $0.83 million
Answer:
a. $8.0 million; $1.22 million
Explanation:
The computation is shown below:
As we know that
Basic earnings power = EBIT ÷ total assets
So,
EBIT = Basic earnings power × total assets
= 0.20 × 40 million
= $8 million
Now
Times interest earned = EBIT ÷ interest expense
So,
Interest expense = EBIT ÷ Times interest earned
= $8 million ÷ 6.55
= $1.22 million
Paula Judge owns Judge Creative Designs. The trial balance of the firm for January 31, 2019, the first month of operations, is shown below. End-of-the-month adjustments must account for the following items: Supplies were purchased on January 1, 2019; inventory of supplies on January 31, 2019, is $1,600. The prepaid advertising contract was signed on January 1, 2019, and covers a four-month period. Rent of $2,100 expired during the month. Depreciation is computed using the straight-line method. The equipment has an estimated useful life of 10 years with no salvage value. Required: Complete the worksheet for the month. Prepare an income statement, statement of owner’s equity, and balance sheet. No additional investments were made by the owner during the month. Journalize and post the adjusting entries. Analyze: If the adjusting entries had not been made for the month, would net income be overstated or understated?
Question Completion:
Judge Creative Designs
Trial Balance as of January 31, 2019:
Account Titles Debit Credit
Cash $34,900
Accounts receivable 12,000
Supplies 6,550
Prepaid Advertising 6,000
Prepaid Rent 15,600
Equipment 40,800
Accumulated Depreciation 0
Accounts Payable 14,950
Capital account 59,400
Drawing account 6,400
Fees Income 58,100
Advertising Expense
Depreciation
Expense- Equipment
Rent Expense
Salaries Expense 9,100
Supplies Expense
Utilities Expense 1,100
Totals $132,450 $132,450
Answer:
Judge Creative Designs:
1. Adjusted Trial Balance as of January 31, 2019:
Judge Creative Designs
Trial Balance as of January 31, 2019:
Account Titles Debit Credit
Cash $34,900
Accounts receivable 12,000
Supplies 1,600
Prepaid Advertising 4,500
Prepaid Rent 13,500
Equipment 40,800
Accumulated Depreciation $340
Accounts Payable 14,950
Capital account 59,400
Drawing account 6,400
Fees Income 58,100
Advertising Expense 1,500
Depreciation
Expense- Equipment 340
Rent Expense 2,100
Salaries Expense 9,100
Supplies Expense 4,950
Utilities Expense 1,100
Totals $132,790 $132,790
2. Income Statement for the month ended January 31, 2019:
Fees Income $58,100
Advertising Expense $1,500
Depreciation
Expense- Equipment 340
Rent Expense 2,100
Salaries Expense 9,100
Supplies Expense 4,950
Utilities Expense 1,100
Total expenses 19,090
Net income $39,010
3. Statement of Owners' Equity for the month ended January 31, 2019:
Capital account $59,400
Net income 39,010
Drawing account (6,400)
Equity balance $92,010
4. Balance Sheet as of January 31, 2019:
Assets:
Cash $34,900
Accounts receivable 12,000
Supplies 1,600
Prepaid Advertising 4,500
Prepaid Rent 13,500
Equipment 40,800
Accumulated Depreciation (340)
Total assets $106,960
Liabilities + Equity:
Accounts Payable $14,950
Capital account 92,010
Total liabilities and equity $106,960
5. Adjusting Journal Entries:
1. Debit Supplies Expense $4,950
Credit Supplies $4,950
To record the supplies expense.
2. Debit Advertising Expense $1,500
Credit Prepaid Advertising $1,500
To record the advertising expense.
3. Debit Rent Expense $2,100
Credit Prepaid Rent $2,100
To record rent expense for the month.
4. Debit Depreciation Expense $340
Credit Accumulated Depreciation $340
To record depreciation expense for the month.
6. Total adjusting expenses = $8,890. The net income would have been overstated by $8,890.
Explanation:
a) Data and Adjustments:
1. Supplies Expense $4,950 Supplies $4,950 ($6,550 - $1,600) Balance $1,600
2. Advertising Expense $1,500 Prepaid Advertising $1,500 ($6,000/4) Balance $4,500
3. Rent Expense $2,100 Prepaid Rent $2,100 Balance $13,500 ($15,600 - $2,100)
4. Depreciation Expense $340 Accumulated Depreciation $340 ($40,800 * 10% * 1/12)
Suppose the current price of a good is $167. At this price, the quantity supplied is 170 units, and the quantity demanded is 120 units. For every $1 decrease in price, the quantity supplied decreases by 10 units and the quantity demanded increases by 15 units. At the current price, the quantity demanded is than the quantity supplied. This means that the market is currently experiencing a . In order to adjust, the market price will until the quantity demanded and quantity supplied are equal. The result is an equilibrium quantity of and an equilibrium price of $ .
Answer:
is less than
surplus
fall
$165
150
Explanation:
Wjen demand exceeds supply, there is surplus
This is because price is greater than equilibrium price. Price would fall until equilibrium is restored
On January 1, 2016, Rapid Airlines issued $200 million of its 8% bonds for $184 million. The bonds were priced to yield 10%. Interest is payable semiannually on June 30 and December 31. Rapid Airlines records interest at the effective rate and elected the option to report these bonds at their fair value. On December 31, 2016, the fair value of the bonds was $188 million as determined by their market value in the over-the-counter market. Rapid determined that $1,000,000 of the increase in fair value was due to a decline in general interest rates.
Required:
1. Prepare the journal entry to record interest on June 30, 2016 (the first interest payment).
2. Prepare the journal entry to record interest on December 31, 2016 (the second interest payment).
3. Prepare the journal entry to adjust the bonds to their fair value for presentation in the December 31, 2016, balance sheet.
Answer:
1. June 30, 2016
Dr Interest expense $9.2 million
Cr Discount on bonds payable $1.2million
Cr Cash $8 million
2. December 31, 2016
Dr Interest payment $9.26 million
Cr Discount on bonds payable $1.26million
Cr Cash $8 million
3. December 31, 2016
Dr Unrealized holding loss NI $1,000,000
Dr Unrealized holding loss OCI $5.46
Cr Fair value adjustment $6.46 million
Explanation:
1. Preparation of the journal entry to record interest on June 30, 2016
June 30, 2016
Dr Interest expense $9.2 million
( $184 million*10%2)
Cr Discount on bonds payable $1.2million
($9.2 million-$8 million)
Cr Cash $8 million
($200 million *8% /2)
(Being to record first interest payment)
2. Preparation of the journal entry to record interest on December 31, 2016
December 31, 2016
Dr Interest payment $9.26 million
( $184 million+$1.2million*10%2)
Cr Discount on bonds payable $1.26million
($9.26 million-$8 million)
Cr Cash $8 million
($200 million *8% /2)
(Being to record second interest payment)
3. Preparation of the journal entry to adjust the bonds to their fair value for presentation in the December 31, 2016, balance sheet.
Dr Unrealized holding loss NI $1,000,000
Dr Unrealized holding loss OCI $5.46
($6.46 million-$1,000,000)
Cr Fair value adjustment $6.46 million
($188 million-$184 million+$1.2million+$1.26million)
(Being tl adjust the bonds to fair value)
Information for Hobson Corp. for the current year ($ in millions): Income from continuing operations before tax $ 380 Loss on discontinued operation (pretax) 92 Temporary differences (all related to operating income): Accrued warranty expense in excess of expense included in operating income 85 Depreciation deducted on tax return in excess of depreciation expense 175 Permanent differences (all related to operating income): Nondeductible portion of entertainment expense 20 The applicable enacted tax rate for all periods is 25%. How should Hobson report tax on the discontinued operation
Answer:
$188
Explanation:
Income from continuing operations before tax $380
Less: Income Tax Expenses $100 [($380+$20)/25%]
Income from continuing operations $280
Less: Loss on discontinued operation (pretax) $92
Income from discontinued operations $188
Bedrock Company reported a December 31 ending inventory balance of $414,500. The following additional information is also available: The ending inventory balance of $414,500 included $73,700 of consigned inventory for which Bedrock was the consignor. The ending inventory balance of $414,500 included $25,400 of office supplies that were stored in the warehouse and were to be used by the company's supervisors and managers during the coming year. Based on this information, the correct balance for ending inventory on December 31 is:
Answer:
$389,100
Explanation:
Calculation to determine what the correct balance for ending inventory on December 31 is:
Using this formula
Ending inventory on December 31=Ending inventory balance-Office supplies
Let plug in the formula
Ending inventory on December 31=$414,500- $25,400
Ending inventory on December 31=$389,100
Therefore the correct balance for ending inventory on December 31 is:$389,100