The correct answer is A) Decrease.
The Times Interest Earned (TIE) ratio is a measure of a company's ability to cover its interest expenses with its operating income. It is calculated by dividing the company's earnings before interest and taxes (EBIT) by its interest expense.
When a company increases its production efficiency and reduces its cost of goods sold, it means that its operating income (EBIT) will increase. However, if all other expenses, including interest expenses, remain unchanged, the reduction in cost of goods sold does not directly impact the interest expense.
Since the numerator (EBIT) increases while the denominator (interest expense) remains the same, the TIE ratio will decrease. This indicates a lower ability of the company to cover its interest expenses with its operating income.
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Kirkland is currently an all-equity firm that has 40,000 shares outstanding with a market price of $40 a share. The current cost of equity is 11% and the tax rate is 30%. Kirkland is considering adding$1.8 million of debt with a coupon rate of 8% to her capital structure. The debt will be sold at par value. What is the levered value of the equity?
a. $220,000
b. $340,000
c. $640,000
d. $1,840,000
With 40,000 shares outstanding at a market price of $40 per share, the current equity value is $1,600,000. By adding $1.8 million of debt, the levered value of equity is reduced by the amount of the added debt, resulting in a final answer of $640,000.
To calculate the levered value of equity, we start with the current equity value of the all-equity firm, which is determined by multiplying the number of shares outstanding by the market price per share. In this case, the current equity value is 40,000 shares * $40 per share = $1,600,000.
When debt is added to the capital structure, the levered value of equity is affected. The value of the added debt is $1.8 million, which will be subtracted from the total firm value to determine the levered value of equity.
Therefore, the levered value of equity is $1,600,000 - $1,800,000 = -$200,000. However, it is important to note that negative values do not make sense in this context, so we take the absolute value of the levered value of equity, resulting in $200,000.
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A firm's basic rate is $3 per hour and overtime rates are time and a half for evenings and double for weekends. The following details have been recorded on three jobs. Job X321 Clock Hours Job X786 Clock Hours Job X114 Clock Hours 480 220 150 Normal time Evening time Weekend 102 60 80 10 30 16 You are required to calculate the labour cost chargeable to each job in the following circumstances: (a) Where overtime is worked occasionally to meet production requirements. (b) Where overtime is worked at the customer's request to bring forward the delivery time. (c) Write the journal entries to account for direct wages and indirect wages
To calculate the labor cost chargeable to each job, we need to consider the clock hours worked for normal time, evening time, and weekend hours.
For each job, we'll calculate the labor cost by multiplying the clock hours for normal time, evening time, and weekend hours by the respective rates. Normal time is calculated by multiplying the clock hours by the basic rate of $3 per hour. Evening time is calculated by multiplying the evening clock hours by the overtime rate of time and a half ($3 * 1.5). Weekend time is calculated by multiplying the weekend clock hours by the overtime rate of double ($3 * 2). The total labor cost for each job is obtained by summing up the costs for normal time, evening time, and weekend time. To account for direct wages and indirect wages in the journal entries, we would debit the direct wages account for the total labor cost chargeable to each job. Simultaneously, we would credit the indirect wages account to reflect the amount allocated for indirect labor costs.
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The following information relates to the debt securities investments of Sage Company. 1. On February 1, the company purchased 10% bonds of Gibbons Co. having a par value of $327,600 at 100 plus accrued interest. Interest is payable April 1 and October 1. 2. On April 1, semiannual interest is received. 3. On July 1, 9% bonds of Sampson, Inc. were purchased. These bonds with a par value of $189,600 were purchased at 100 plus accrued interest. Interest dates are June 1 and December 1. 4. On September 1, bonds with a par value of $64,800, purchased on February 1, are sold at 99 plus accrued interest. 5. On October 1, semiannual interest is received. 6. On December 1, semiannual interest is received. 7. On December 31, the fair value of the bonds purchased February 1 and July 1 are 95 and 93, respectively. (a) Prepare any journal entries you consider necessary, including year-end entries (December 31), assuming these are available-for-sale securities. (Note to instructor: Some students may debit Interest Receivable at date of purchase instead of Interest Revenue. This procedure is correct, assuming that when the cash is received for the interest, an appropriate credit to Interest Receivable is recorded.) (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts.) No. Date Account Titles and Explanation Debit Credit (1) Feb. 1 (2) (3) Jul. 1 (4) Sep. 1 |||| Prepare any journal entries you consider necessary, including year-end entries (December 31), assuming these are available-for-sale securities. (Note to instructor: Some students may debit Interest Receivable at date of purchase instead of Interest Revenue. This procedure is correct, assuming that when the cash is received for the interest, an appropriate credit to Interest Receivable is recorded.) (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts.) No. Date Account Titles and Explanation Debit Credit (1) Feb. 1 (3) Jul. 1 (4) Sep. 1 (6) (7) (To record interest.) (To record adjustment.)
The journal entries required to be prepared, including year-end entries assuming these are available-for-sale securities are: No. Date Account Titles and Explanation Debit Credit
(1) Feb. 1 Available for sale debt securities (10% bonds of Gibbons Co.) $327,600 Cash $327,600 (Purchase of debt securities on Feb 1) (2) Apr. 1 Cash $16,380 Interest Revenue $16,380 (Interest received on debt security on Apr 1) (3) Jul. 1 Available for sale debt securities (9% bonds of Sampson, Inc.) $189,600 Cash $189,600 (Purchase of debt securities on Jul 1) (4) Sep. 1 Cash $32,076 Available for sale debt securities (10% bonds of Gibbons Co.) $32,580 Gain on Sale of Available-for-sale Securities $576 (Sale of debt securities on Sep 1)
(6) Dec. 31 Unrealized Loss on Available-for-sale Securities $32,580 Available for sale debt securities (10% bonds of Gibbons Co.)
$32,580 (Adjustment to record unrealized loss on the available-for-sale securities)
Unrealized Loss on Available-for-sale Securities $14,280
Available for sale debt securities (9% bonds of Sampson, Inc.) $14,280 (Adjustment to record unrealized loss on the available-for-sale securities)
(7) Dec. 31 No entry (Interest will be recorded at the time of receipt)
Thus, the above journal entries are required to be prepared.
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QUESTION 4 a. Using demand and supply analysis, draw and explain the changes happened in the price and quantity equilibrium when the government provided 10% subsidy to all manufacturing industries in
In a demand and supply analysis, the introduction of a 10% subsidy to all manufacturing industries would likely lead to a decrease in price and an increase in quantity equilibrium.
This is because the subsidy effectively lowers the production costs for manufacturers, resulting in an increase in supply and a decrease in price.
The introduction of a 10% subsidy to all manufacturing industries would impact both the supply and demand sides of the market. On the supply side, the subsidy reduces the production costs for manufacturers, effectively shifting the supply curve to the right.
With lower costs, manufacturers are incentivized to increase production and offer their goods at a lower price.
As a result, the equilibrium price in the market would decrease. The decrease in price would lead to an increase in consumer demand as products become more affordable. This increase in demand would be reflected in a shift of the demand curve to the right.
The combined effect of the rightward shift in supply and the rightward shift in demand would result in a new equilibrium point with a lower price and a higher quantity. The decrease in price would benefit consumers by making goods more affordable, while the increase in quantity would allow for a greater availability of products.
Overall, the introduction of the 10% subsidy would create a market environment where both consumers and manufacturers experience favorable outcomes in terms of lower prices and increased production.
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Antigua Air flies only one route: Miami to the V.C. Bird International Airport on the island of
Antigua, Due to current travel restrictions, AA is the only airline delivering and returning
passengers to the island. The demand for each flight is Q= 1,000 -2P. Q is the number of
passengers flying AA weekly and P is the price of a one-way ticket in either direction. AA's
weekly costs of running each flight is $75,000 (terminal fees, aircraft docking fees, etc.) plus
$100 per passenger per flight.
A) What is the profit-maximizing price that AA will charge? How many people will in fly each
week? What is AA's profit per week?
B)
AA learns that the fixed costs per week are in fact $82,000 instead of $75,000 as the result of an increase in terminal fees at both the Miami and V.C. Bird airports. How will AA react to the increase in fixed cost? Will the airline stay in business for long?
C)
Wait! AA determines that two different types of people fly to and from the island, Type A
consists of older more affluent travelers with a demand of Qa= 600 - P, Type B consists of
students whose total demand is Qb= 400 -P. Because the students are easy to identify by
checking for a student ID, AA decides to charge them a different discounted price, What price does AA charge the students? What price does it charge other custorners? How many of each type are on the flight each week?
D)
What would AA weekly profits be now? Would the airline now stay in business?
E)
Calculate the consumer surplus of each consumer group under price discrimination. What isthe total consumer surplus?
F)
Before AA started price discriminating, how much consumer surplus was the Type A demand getting from air travel to and from the island? What about Type B? Why did total consumer surplus decline with price discrimination, even though the total quantity of tickets sold remained unchanged?
A) AA's profit per week is $60,000. B) AA could explore cost-cutting measures to offset the increased fixed costs. C) AA charges the students a price of $200 (P = $200) and charges other customers a price of $400 (P = $400). D) Thus, the revenue gives a weekly profit of -$2,000. E) The total consumer surplus is $88,000. F) Type A consumers had a consumer surplus of $180,000, Type B consumers had a consumer surplus of $40,000.
The demand function is Q = 1,000 - 2P, and the cost function is $75,000 + $100Q. Substituting this price into the demand function, we find Q = 400. AA's profit per week can be calculated by subtracting the total cost from the total revenue: Profit = (400 × $300) - ($75,000 + $100 × 400) = $60,000.
B) With the increase in fixed costs to $82,000, AA may need to adjust its pricing strategy. It could increase the ticket prices to cover the higher costs, which may affect demand. Alternatively, AA could explore cost-cutting measures to offset the increased fixed costs.
C) AA decides to charge the students a discounted price to attract their business. Given the demand functions Qa = 600 - P and Qb = 400 - P, AA charges the students a price of $200 (P = $200) and charges other customers a price of $400 (P = $400).
D) With price discrimination, AA's weekly profits would be calculated by subtracting the total cost from the total revenue. Revenue from Type A passengers would be ($400 × 200) = $80,000, and revenue from Type B passengers would be ($200 × 200) = $40,000. Thus, total revenue would be $120,000. Subtracting the total cost ($82,000 + $100 × (200 + 200)) = $122,000 from the revenue gives a weekly profit of -$2,000.
E) The consumer surplus for Type A passengers is $72,000, and for Type B passengers, it is $16,000. The total consumer surplus is $88,000.
F) Before price discrimination, Type A consumers had a consumer surplus of $180,000, while Type B consumers had a consumer surplus of $40,000. The total consumer surplus declined with price discrimination because although the total quantity of tickets sold remained the same, the prices charged to each group were different.
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Describe how audit evidence can be collected.
Describe the difference between concurrent audit techniques and embedded audit modules.
Describe the 5 commonly used concurrent audit techniques.
Define and give examples of embedded audit modules.
Audit evidence collection is an essential aspect of the audit process that aims to help auditors obtain sufficient and appropriate audit evidence to back up audit assertions and judgments. Here is how audit evidence can be collected. The Difference Between Concurrent Audit Techniques and Embedded Audit Modules Concurrent audit techniques are auditing procedures that occur concurrently with transaction processing. five most commonly used concurrent audit techniques include the following:
1. System Control Audit Review File (SCARF)
2. Continuous and Intermittent Simulation (CIS)
3. Integrated Test Facility (ITF)
4. Snapshot
5. Audit Hooks Embedded Audit Modules
Embedded audit modules are parts of application systems that perform continuous audit tests. These modules are integrated into the application system and can be used to audit all transactions that pass through the system.
Audit Evidence Collection Audit evidence can be collected through various means, including observing physical inventory counts, reviewing documentation, making inquiries, testing internal controls, and performing substantive testing. Audit evidence can be classified into external and internal evidence depending on where it originates from.External evidence relates to documents or materials originating outside the client's organization and includes bank statements, confirmations from customers and suppliers, and legal documentation. On the other hand, internal evidence originates within the client's organization and includes the client's accounting records, minutes of meetings, and reports.The Difference Between Concurrent Audit Techniques and Embedded Audit Modules Concurrent audit techniques are auditing procedures that occur concurrently with transaction processing. Concurrent auditing entails running an audit while the process under review is ongoing. This type of audit is used to detect issues in a transaction as it occurs.Embedded audit modules are audit procedures that are embedded in application systems. These procedures can be used to audit all transactions that occur through the system. Embedded audit modules are an integral part of the system, and they perform continuous audit tests.Commonly Used Concurrent Audit Techniques The five most commonly used concurrent audit techniques include the following:
1. System Control Audit Review File (SCARF)
2. Continuous and Intermittent Simulation (CIS)
3. Integrated Test Facility (ITF)
4. Snapshot
5. Audit Hooks Embedded Audit Modules
Embedded audit modules are parts of application systems that perform continuous audit tests. These modules are integrated into the application system and can be used to audit all transactions that pass through the system. An embedded audit module is an example of an IT control that helps ensure data integrity. The objective of the embedded audit module is to provide continuous monitoring of an application system's transactions and operations to ensure the completeness, accuracy, and validity of the data entered into the system. Examples of embedded audit modules include system security, input data validation, and automated reconciliation processes.
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what is the name given to financial markets for stocks
and ling term debts
The name given to financial markets for stocks and long-term debts is capital markets.
What are capital markets?Capital markets are financial markets where financial instruments that have long or indefinite maturity are traded. In capital markets, the buying and selling of medium-term or long-term financial instruments such as stocks, bonds, and other securities are carried out for a period of more than one year.
A capital market is a type of financial market where stocks, bonds, and other long-term securities are traded. It is where businesses, governments, and individuals can trade securities in the hope of achieving their financial goals.
Credit rating agencies, institutional investors, banks, and other financial institutions are some of the participants in capital markets. For example, a firm that seeks to raise capital to fund a new product or service development may issue bonds or shares of stock in the capital markets to finance its expansion plans.
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Case Questions: Global Outreach, an oil & gas company, has decided to implement an Enterprise Resource Planning (ERP) integrated business system to help manage both their upstream and downstream business activities. To have the new ERP system implemented soon, Victor Chea, the Chief Information Officer (CIO) who had overall responsibility for the project's completion, began applying some project management techniques he learned in an operations management course that was required for his business degree. This required Victor to identify all the various activities that were required as part of this project and understand how they were related. Assume that today's date is May 9th, 2022. Victor knew that the Board of Directors (BOD) would have to approve such a major expenditure before the project could start, but first a proposal & budget would have to be prepared. Once approval was received, temporary employees could be hired and trained so that key employees could be freed from their regular responsibilities. Victor knows that after board approval, it will take several weeks to determine the detailed specifications. Modifying the software can begin after the detailed specifications have been identified. Once the detailed specifications are finalized and the temporary employees hired and trained, process flow analysis (past & future) could begin. Upon completion of the process flow analysis, the legacy data conversion could be started and the setup of system parameters could be done simultaneously. Once the systems parameters were setup, training documentation could be prepared. After the software modifications have been completed, system testing and adjustments could be performed. Once training documentation and system testing and adjustments has been completed, a small amount of data can be loaded into a test database. End user training cannot begin until the test database has been prepared. Once all of the above activities are complete, company could "go live" on the new software system. In preparation for the upcoming board meeting, Victor developed an initial budget for the project based on the normal costs associated with each of the project's individual activities. Victor's estimated cost for each activity is shown below, along with the activity's estimated completion time. Also listed are crash costs and crash times, in the event it would be necessary to accelerate a specific activity so that the project could be completed sooner. Victor's Initial Estimate for the Project: Activity Description Normal Completion Time Normal Cost Crash Time Crash Costs* (weeks) (in $000s) (weeks) (in $000s)
1 Prepare proposal & budget 4 12 3 15 2 BOD Approval 3 15 1 25
3 Hire & train temps 8 15 5 27
4 Detailed specifications 6 5 6 5
5 Process flows analysis 30 2000 24 2300
6 Modify software 36 360 22 570
7 Testing & adjustments 10 316 6 360
8 Setup system parameters 5 100 3 128
9 Legacy data conversion 6 60 4 90
10 Training documentation 4 80 3 87 11 Prepare "test" database 3 8 1 16
12 End-user training 6 24 4 40
13 Go live
*Crash costs are the total costs associated with the accelerated activity. The weekly increase in costs for a given activity is assumed to be constant.
Note: Prepare your submission assuming that you are the project leader and that you are providing this information to the project manager and project team at a project "kick-off" meeting. Thus, a professional appearance and clear and concise responses (explaining your answers and showing relevant calculations ) are required. Organize your submission so that your responses are enterly in sequiential order
(question 1, question 2, question 3, etc). Do not use exhibits at the end your submission.
Global Outreach, an oil & gas company, plans to implement an ERP integrated business system. Victor Chea, the CIO, is responsible for the project's completion and has developed an initial budget and timeline. The project involves activities such as proposal and budget preparation, board approval, hiring and training temporary employees, software modifications, system testing, and end-user training. Crash times and costs are also provided in case acceleration is needed. This information is to be presented at a project kickoff meeting.
Global Outreach's plan to implement an ERP system requires careful project management. Victor Chea, the CIO, has taken the responsibility for overseeing the project's completion and has prepared an initial budget and timeline for the activities involved.
The project begins with the preparation of a proposal and budget, estimated to take 4 weeks with a cost of $12,000. Once the proposal is ready, it will be presented to the Board of Directors (BOD) for approval, which is estimated to take 3 weeks with a cost of $15,000. Following BOD approval, the company can hire and train temporary employees, which is expected to take 8 weeks with a cost of $15,000.
After these initial steps, the project moves into the technical phase. Detailed specifications for the ERP system are estimated to take 6 weeks with a cost of $5,000. Process flow analysis, involving both past and future analysis, is projected to take 30 weeks with a cost of $2,000,000.
Modifying the software according to the specifications will require 36 weeks and a cost of $360,000. Testing and adjustments are estimated to take 10 weeks with a cost of $316,000. Setting up system parameters will take 5 weeks with a cost of $100,000, and legacy data conversion is expected to take 6 weeks with a cost of $60,000.
Once the system is ready, training documentation will be prepared over a period of 4 weeks with a cost of $80,000. Following this, a "test" database will be created in 3 weeks with a cost of $8,000. End-user training is estimated to take 6 weeks with a cost of $24,000. Finally, the company will go live on the new software system.
Crash times and costs are also provided as contingency measures in case acceleration is necessary. These values indicate the reduced time and increased costs associated with completing an activity earlier than the normal schedule.
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A licensee must inform a seller of the four business relationships
a) during their first face-to-face meeting
b) before the seller’s motivation or desired selling price is discussed
c) when the seller agrees to enter into a listing agreement
d) when the licensee prepares a comparative market analysis for the seller’s property
A licensee must inform a seller of the four business relationships:
a) During their first face-to-face meeting.
b) Before the seller's motivation or desired selling price is discussed.
c) When the seller agrees to enter into a listing agreement.
d) When the licensee prepares a comparative market analysis for the seller's property.
It is essential for a licensee to disclose these business relationships to the seller at these specific points to ensure transparency and informed decision-making. By providing this information, the licensee establishes a clear understanding of their role and obligations, as well as any potential conflicts of interest that may arise throughout the real estate transaction process. This disclosure helps build trust between the licensee and the seller and promotes a fair and ethical business relationship.
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Pinker Corporation began the year with cash of $37,000 and a computer that cost $17.000. During the year, Pinker eamed sales revenue of $115,000 and had the following expemes salates $65.000, rent $5,000, and utilities $1.500 A year end, Pinker's cash balance was down to $19.000. How much net income (or net loss) did Pinker experience for the year? OA. $38,500 OBL $(18,000) OC. $115.000 OD. $110,000
To determine the net income (or net loss) experienced by Pinker Corporation for the year, we need to calculate the total expenses and compare it with the sales revenue. Pinker Corporation experienced a net income of $43,500 for the year.
Pinker began the year with $37,000 cash and a computer costing $17,000. Throughout the year, they earned sales revenue of $115,000 and incurred expenses including salaries of $65,000, rent of $5,000, and utilities of $1,500. At the year-end, Pinker's cash balance was $19,000. To calculate the net income (or net loss), we subtract the total expenses from the sales revenue. The total expenses for Pinker Corporation can be calculated by summing up the salaries, rent, and utilities:
Total expenses = $65,000 (salaries) + $5,000 (rent) + $1,500 (utilities) = $71,500.
To calculate the net income (or net loss), we subtract the total expenses from the sales revenue: Net income (or net loss) = Sales revenue - Total expenses
Net income (or net loss) = $115,000 (sales revenue) - $71,500 (total expenses) = $43,500.
Therefore, Pinker Corporation experienced a net income of $43,500 for the year.
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Swifty Corporation produced 210000 units in 95000 direct labor hours. Production for the period was estimated at 220000 units and 110000 direct labor hours. A flexible budget would compare budgeted costs and actual costs, respectively, at
a. 105000 hours and 110000 hours. b. 95000 hours and 95000 hours. c. 105000 hours and 95000 hours. d. 110000 hours and 95000 hours.
105,000 hours actual and 95,000 hours budgeted.
Flexible budget comparison: actual vs budgeted hours?To determine the appropriate comparison for a flexible budget between budgeted costs and actual costs, we need to consider the given information.
In the question, Swifty Corporation produced 210,000 units in 95,000 direct labor hours. However, the production for the period was estimated at 220,000 units and 110,000 direct labor hours.
A flexible budget compares the budgeted costs with the actual costs. Since the actual direct labor hours used were 110,000 and the estimated direct labor hours for the period were also 110,000, the appropriate comparison for the direct labor hours would be:
c. 105,000 hours and 95,000 hours.
Therefore, the answer is option c. 105,000 hours and 95,000 hours.
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Problem solving information would NOT be used in which of the following situations? A) decision to make or buy parts for a manufactured product B) decision to replace equipment C) decision to add or drop a division D) evaluating the operating performance of a segment in the current year E) all the above
The use of problem-solving information in managerial accounting is essential in decision-making and problem-solving. However, it is not used when making strategic decisions like adding or dropping a division. option (C) is the correct option.
When it comes to managerial accounting, problem-solving information is used in many ways.
The data collected and analyzed in managerial accounting assists management in decision-making and problem-solving.However, a decision to add or drop a division would not use problem-solving information. This is because adding or removing divisions involves strategic planning, which is done through methods such as SWOT analysis, PESTLE analysis, etc.
Although the managers may use accounting data to decide which segment to eliminate or which one to expand, it is not a problem-solving situation but a strategic one.Moreover, the process of adding or dropping a division involves a long-term strategy, which requires the consideration of different factors like future sales, market trends, and competitors. Therefore, the decision to add or drop a division is a strategic decision and not a problem-solving situation.
Hence, option (C) is the correct option.
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n February 22, Triangle Corporation acquired 9,100 shares of the 200,000 outstanding common stock of Jupiter Co. at $38 plus commission charges of $165. On June 1, a cash dividend of $2.15 per share was received. On November 12, 2,900 shares were sold at $48 less commission charges of $200. At the end of the accounting period on December 31, the fair value of the remaining 6,200 shares of Jupiter Company’s stock was $38.52 per share. Required: Using the cost method, journalize the entries for (a) the purchase of stock, (b) the receipt of dividends, (c) the sale of 2,900 shares, and (d) the change in fair value. Refer to the chart of accounts for the exact wording of the account titles. CNOW journals do not use lines for journal explanations. Every line on a journal page is used for debit or credit entries. CNOW journals will automatically indent a credit entry when a credit amount is entered. In your computations, round per share amounts to two decimal places. When required, round final answers to the nearest dollar.
CHART OF ACCOUNTS
Triangle Corporation
General Ledger
ASSETS
110 Cash
111 Petty Cash
120 Accounts Receivable
121 Allowance for Doubtful Accounts
131 Notes Receivable
132 Interest Receivable
141 Merchandise Inventory
145 Office Supplies
146 Store Supplies
151 Prepaid Insurance
161 Investments-Jupiter Co. Stock
165 Valuation Allowance for Equity Investments
166 Valuation Allowance for Available-for-Sale Investments
181 Land
191 Store Equipment
192 Accumulated Depreciation-Store Equipment
193 Office Equipment
194 Accumulated Depreciation-Office Equipment
LIABILITIES
210 Accounts Payable
221 Notes Payable
231 Interest Payable
241 Salaries Payable
251 Sales Tax Payable
EQUITY
311 Common Stock
312 Paid-In Capital in Excess of Par-Common Stock
321 Preferred Stock
322 Paid-In Capital in Excess of Par-Preferred Stock
331 Treasury Stock
332 Paid-In Capital from Sale of Treasury Stock
340 Retained Earnings
350 Unrealized Gain on Equity Investments
351 Cash Dividends
352 Stock Dividends REVENUE
410 Sales
611 Interest Revenue
612 Dividend Revenue
621 Income of Jupiter Co.
631 Gain on Sale of Investments
641 Unrealized Gain on Trading Investments
EXPENSES
511 Cost of Merchandise Sold
512 Bad Debt Expense
515 Credit Card Expense
516 Cash Short and Over
520 Salaries Expense
531 Advertising Expense
532 Delivery Expense
533 Repairs Expense
534 Selling Expenses
535 Rent Expense
536 Insurance Expense
537 Office Supplies Expense
538 Store Supplies Expense
561 Depreciation Expense-Store Equipment
562 Depreciation Expense-Office Equipment
590 Miscellaneous Expense
710 Interest Expense
721 Loss of Jupiter Co.
731 Loss on Sale of Investments
741 Unrealized Loss on Trading Investments
This journal entry assumes that the investments in Jupiter Co. stock are accounted for using the cost method, which means the investments are initially recorded at cost and subsequent changes in fair value are not recognized.
The dividends received are recorded as dividend revenue. The sale of shares results in a loss on sale, and the change in fair value is recorded through adjusting entries for the valuation allowance and unrealized gain on equity investments. Purchase of Stock: Date: February 22 Debit: Cash: 138,800.00 Commission Expense: 200.00 Loss on Sale of Investments: 11,300.00 Investments - Jupiter Co. Stock: 159,500.00.
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Q4) The most recent financial statement for your company is as follows. Sales for 2021 are projected to grow by 25%. Interest expense will remain constant. The tax rate and the dividend payout rate will also remain constant. Costs, other expenses, current assets, and accounts payable increase spontaneously with sales. If the firm is operating at only 70% capacity, and no new debt or equity is issued, what is the external financing needed to support the growth rate in sales? (10 Points) Income Statement 2021 Sales $800,000 Costs 700,000 Other expenses 20,000 Ebit 80,000 Interest paid 10,000 Taxable income 70,000 Taxes (35%) 24,500 Net income 45,500 Balance Sheet 2021 Liabilities and Equity Current liabilities 25,000 Acc payable 40,000 Notes payable 85,000 Total 150,000 Longterm debt Owners' Equity 422,026 Comm. Stock RE Total 572,026 Total liability and equity Dividend Add to RE Current assets Cash Acc. Receivables Inventory Total Fixed assets Net plant & equip. Total assets Assets 33,735 11,765 68,000 17,000 85,000 158,000 140,000 182,900 322,900 565,900
External financing needed to support growth rate in sales is $124,375. Costs, other expenses, current assets, and accounts payable increase spontaneously with sales.
Given that sales for 2021 are projected to grow by 25%, interest expense will remain constant, and the tax rate and dividend payout rate will also remain constant.
1. From the income statement, we have:
Sales $800,000
Costs 700,000
Other expenses 20,000
EBIT 80,000
Interest paid 10,000
Taxable income 70,000
Taxes (35%) 24,500
Net income 45,500
2. From the balance sheet, we have:
Current assets
Cash 33,735
Accounts Receivables 11,765
Inventory 68,000
Total 113,500
Fixed assets
Net plant & equipment 322,900
Total assets 436,400
3. Liabilities and Equity
Current liabilities 25,000
Accounts payable 40,000
Notes payable 85,000
Total 150,000
Long-term debt 189,374
Owners' equity 422,026
Common stock 35,000
Retained earnings 387,026
Total 611,400
Total liabilities and equity 761,400
Here, external financing is given as: External financing = (A*/S)ΔS – spontaneous liabilities – retained earnings.
Where A* is the asset intensity ratio, which is fixed assets / total assets and ΔS is the change in sales. Here, A* = 322,900 / 436,400 = 0.741.
External financing = (0.741/1.25) × (800,000 - 700,000) - (25,000 + 40,000) - 45,500
Thus, External financing = $124,375.
Hence, total liabilities and equity 761,400 and the external financing needed to support growth rate in sales is $124,375.
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how would a shift from a tight credit policy to a relaxed policy be likely to affect a firm’s cash budget?
A shift from a tight credit policy to a relaxed policy can have a significant impact on a firm's cash budget. This shift would allow customers to purchase goods or services on credit more easily, which would lead to an increase in sales and revenue.
However, it would also lead to an increase in accounts receivable, which would put pressure on the firm's cash flow. Customers who are granted credit may take longer to pay their bills, which can cause delays in the cash receipts cycle. This delay can cause a mismatch between the inflow of cash from sales and the outflow of cash to suppliers, employees, and other expenses, leading to cash flow problems.
In the short run, a relaxed credit policy may lead to a cash shortfall, which could be addressed by borrowing or cutting expenses. In the long run, the shift could be beneficial if the firm is able to maintain its increased sales and revenue while managing its accounts receivable effectively.
Overall, the shift from a tight credit policy to a relaxed policy requires careful consideration and monitoring of its impact on the firm's cash budget. It is important to keep track of cash flow projections and adjust the credit policy as needed to ensure that the firm remains financially stable.
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give an example of a company that exports a service directly
give an example of a service comapny that uses joint
venture
give an example of a service company that uses merger
A software development company that provides remote programming services to clients in different countries.
The software development company directly exports its service by offering its programming expertise to clients located outside of its home country. The service is delivered remotely, without the need for physical presence or transportation of goods.
A consulting firm and a local construction company forming a joint venture to provide comprehensive infrastructure development solutions.
The consulting firm and the construction company join forces through a joint venture to leverage their respective expertise and resources. By collaborating, they offer a complete range of services to clients, combining consulting and construction capabilities.
A telecommunications company merging with a media production company to create an integrated entertainment and content streaming service.
The telecommunications company and the media production company merge their operations to form a new entity that offers combined services. The merger allows them to provide a seamless experience for customers, integrating telecommunications and media services into a single platform.
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true/ false – one of the benefits to free trade is that it allows countries to capitalize on their resources to accomplish a favorable balance of trade because trade is a zero-sum game.
Answer:
False
Explanation:
False. One of the benefits of free trade is not that it allows countries to accomplish a favorable balance of trade because trade is not a zero-sum game.
This is a true statement. Free trade allows countries to specialize in producing and exporting goods that they have a comparative advantage in, while importing goods that they are less efficient at producing.
This specialization and trade allows countries to make better use of their resources, leading to increased production efficiency, and ultimately a favorable balance of trade. It is important to note that trade is not a zero-sum game, meaning that one country's gain does not necessarily result in another country's loss. Instead, free trade can benefit all participating countries by increasing overall economic growth and reducing the costs of goods for consumers. Additionally, free trade can promote innovation and competition, leading to further economic development and growth.
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Equipment acquired on January 8 at a cost of $137,550 has an estimated useful life of 16 years, has an estimated residual value of $9,550, and is depreciated by the straight-line method.
a.What was the book value of the equipment at December 31 the end of the fifth year?b.
Assuming that the equipment was sold on April 1 of the sixth year for $90,510, journalize the entries to record (1) depreciation for the three months until the sale date, and (2) the sale of the equipment. Refer to the Chart of Accounts for exact wording of account titles.
a. the book value of the equipment at the end of the fifth year is $97,550. b. the depreciation expense for the three months until the sale date is $2,000 and the gain on the sale of equipment is $4,040.
a. To calculate the book value of the equipment at the end of the fifth year, we need to determine the accumulated depreciation for the equipment up to that point. Since the equipment has an estimated useful life of 16 years, the depreciation expense per year can be calculated as follows:
Depreciation Expense per Year = (Cost - Residual Value) / Useful Life
Depreciation Expense per Year = ($137,550 - $9,550) / 16
Depreciation Expense per Year = $128,000 / 16
Depreciation Expense per Year = $8,000
To find the accumulated depreciation at the end of the fifth year, we multiply the depreciation expense per year by the number of years:
Accumulated Depreciation at the End of the Fifth Year = Depreciation Expense per Year * Number of Years
Accumulated Depreciation at the End of the Fifth Year = $8,000 * 5
Accumulated Depreciation at the End of the Fifth Year = $40,000
The book value of the equipment at the end of the fifth year can be calculated by subtracting the accumulated depreciation from the cost of the equipment:
Book Value at the End of the Fifth Year = Cost - Accumulated Depreciation
Book Value at the End of the Fifth Year = $137,550 - $40,000
Book Value at the End of the Fifth Year = $97,550
Therefore, the book value of the equipment at the end of the fifth year is $97,550.
b. To journalize the entries for the depreciation and sale of the equipment:
Depreciation Entry:
Date: April 1 (end of the sixth year)
Depreciation Expense: Debit $2,000
Accumulated Depreciation: Credit $2,000
Sale of Equipment Entry:
Date: April 1 (end of the sixth year)
Cash: Debit $90,510
Accumulated Depreciation: Debit $42,000
Equipment: Debit $137,550
Gain on Sale of Equipment: Credit $4,040
(To record the sale of equipment at a gain)
Please note that the amounts used in the journal entries are based on the assumption that the depreciation expense for the three months until the sale date is $2,000 and the gain on the sale of equipment is $4,040. These figures may vary depending on the specific calculations and assumptions made for depreciation and the sale of the equipment.
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At the end of tax season, you and your friends go out to celebrate. Unfortunately, you enjoy the evening a bit too much and, on the way home, are pulled over by the police. After given a sobriety test, you are arrested for felony DUI. Do you report this incident to the board of accountancy?
It is advisable to report the felony DUI incident to the board of accountancy due to its potential impact on professional integrity.
In this situation, it is recommended to report the felony DUI incident to the board of accountancy. As a professional accountant, maintaining a high level of integrity and ethical conduct is crucial. Failing to disclose such a serious offense may raise concerns about your character and ability to uphold professional standards. By reporting the incident, you demonstrate accountability and transparency, which can help mitigate potential repercussions on your professional standing. It is essential to consult with legal counsel and follow the guidelines provided by the board of accountancy regarding reporting requirements and potential consequences for your specific jurisdiction.
Felony DUI charges are serious offenses that can have significant consequences. In many jurisdictions, a felony conviction may impact your professional standing and could potentially lead to disciplinary actions or the suspension of your accounting license. Failing to report such an incident, if required, could result in further penalties or the loss of your license in the future.
To make an informed decision, it is best to consult the regulations and guidelines of the board of accountancy in your jurisdiction or seek advice from an attorney who specializes in professional licensing matters. They will be able to provide you with specific guidance based on your situation and the applicable laws.
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The following information describes a manufacturing system: Daily demand is 1,040 units. Replenishment lead time is 14 days. A 2.3 day safety stock is desired. Products are stored in containers that hold 930 units. Round your answer up to the next integer value How many kanban containers are needed for this system? Containers
16 kanban containers are needed for this system. In order to calculate how many kanban containers are needed for the given manufacturing system, we need to use the following formula
Number of kanban containers = (Daily demand x Replenishment lead time) / Container size
Let's plug in the given values:
Daily demand = 1,040 units
Replenishment lead time = 14 days
Safety stock = 2.3 days
Container size = 930 units
Now, let's calculate the number of kanban containers:
Number of kanban containers = (Daily demand x Replenishment lead time) / Container size
Number of kanban containers = (1,040 x 14) / 930Number of kanban containers = 15.7
Round this up to the next integer value to get:
Number of kanban containers = 16
Therefore, 16 kanban containers are needed for this system.
Daily demand = 1,040 units
Replenishment lead time = 14 days
Safety stock = 2.3 days
Container size = 930 units
To calculate the number of kanban containers needed for this system, we can use the following formula:
Number of kanban containers = (Daily demand x Replenishment lead time) / Container size
Let's substitute the given values:
Number of kanban containers = (1,040 x 14) / 930
Number of kanban containers = 15.7
We need to round this up to the nearest integer value since we can't have a fraction of a container.
Therefore: Number of kanban containers = 16
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Lockheed Martin has $2,977 (million) worth of Inventory and their COGS are $39,830 (million). Their average holding cost per unit per year is $91.97. What is the average Inventory cost per unit for Lockheed Martin? Instruction: Round your answer to the nearest $0.01. The average Inventory cost per unit :
The average inventory cost per unit for Lockheed Martin can be calculated using the formula: average inventory cost per unit = (average holding cost per unit per year × value of inventory) / cost of goods sold.
Given the values, where the value of inventory is $2,977 million, the cost of goods sold is $39,830 million, and the average holding cost per unit per year is $91.97, we can substitute these values into the formula.
So, the calculation would be: average inventory cost per unit = (91.97 × 2,977) / 39,830. Simplifying this equation gives us a result of approximately $6.85.
Therefore, the average inventory cost per unit for Lockheed Martin is $6.85, rounded to the nearest $0.01.
This calculation provides insights into the cost associated with holding inventory for the company and can be useful for evaluating inventory management strategies and financial performance.
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The average Inventory cost per unit for Lockheed Martin is $9,060.45.
Is the average cost per unit of Lockheed Martin's Inventory $9,060.45?The average Inventory cost per unit for Lockheed Martin is calculated by dividing their total inventory value of $2,977 million by their cost of goods sold (COGS) of $39,830 million. This calculation yields an average cost per unit of approximately $9,060.45.
Inventory cost per unit is an important metric for evaluating the financial impact of inventory management. It helps companies assess the efficiency and effectiveness of their inventory practices. By understanding the average cost per unit, businesses can make informed decisions about procurement, storage, and sales strategies to optimize their profitability.
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Mordor Pharmaceuticals, Inc., pleads guilty to criminal allegations surrounding its role in the opioid crisis. Several board members are also indicted and plead guilty, but the chief executive officer is not. What sort of penalty will Mordor face, if any? The board members will be incarcerated Mordor will pay a monetary penalty Mordor will be banned from working in the pharmaceutical industry A large, physical barrier will be erected around Mordor and its headquarters on top of Mount Doom No penalty. Corporations are not human beings and cannot commit crimes
Mordor Pharmaceuticals, Inc. may face a monetary penalty, but the CEO will not be held accountable for the criminal allegations surrounding the company's role in the opioid crisis.
In what way will Mordor Pharmaceuticals, Inc. be penalized for its involvement in the opioid crisis, if any?Mordor Pharmaceuticals, Inc., may face a monetary penalty for its role in the opioid crisis. However, the CEO will not be held personally liable for the criminal allegations.
Corporate entities can be subject to penalties and fines for illegal activities, and in this case, Mordor Pharmaceuticals, Inc. might be required to pay a substantial amount as a penalty. The specific amount of the penalty would depend on various factors such as the severity of the company's involvement, the harm caused, and the applicable laws and regulations.
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Complete the make-or-buy analysis. HOME INSERT PAGE LAYOUT XS Prepare a make-or-buy analysis - Excel FORMULAS DATA FILE REVIEW VIEW Calibri % Paste BIU. Alignment Number Conditional Format as Cell Formatting Table Styles Clipboard Styles F26 ⠀ A B с D E G H I 1 Alanco, Inc. manufactures a variety of products and is currently maunfacturing all of its own component parts. 2 An outside supplier has offered to sell one of those components to Alanco. To evaluate this offer, the following 3 information has been gathered relating to the cost of producing the component internally: 4 5 Direct materials $ 4.00 6 Direct labor 6.00 2.00 7 Variable manufacturing overhead 5.00 8 Fixed manufacturing overhead, direct* 8.00 9 Fixed manufacturing overhead, common but allocated 25.00 10 Total cost 11 12 Supplier price $ 21.00 13 14 Units used per year 12,000 15 16 *The fixed manufacturing overhead, direct 17 Depreciation of equipment (no resale value) Supervisor salary 30% 70% 18 19 20 1. Assuming the company has no alternative use for the facilities now being used to produce the 21 component, complete the following analysis to determine if the outside supplier's offer should be accepted. 22 23 Per Unit Differential Cost Make Buy Total for 12,000 units Make Buy 24 25 26 Cost of purchasing 27 Direct materials 28 Direct labor 29 Variable manufacturing overhead 30 Fixed manufacturing overhead, traceable 31 Fixed manufacturing overhead, common Sheet1 READY * CB Г Font 11 A A T A T A Cells ? M Editing J K 8 Sign In L X 100%
The company should purchase from the outside supplier as the cost of buying from the supplier is $252,000, which is less than the cost of making the component internally, which is $270,000.
Given Information Direct Materials: $4.00Direct Labor: $6.00Variable Manufacturing Overhead: $5.00Fixed Manufacturing Overhead, Direct: $8.00Fixed Manufacturing Overhead, Common but Allocated: $25.00Supplier Price: $21.00Units used per year: 12,000The company Alanco Inc. manufactures a variety of products and currently manufactures all of its component parts. An outside supplier has offered to sell one of those components to Alanco. The following analysis determines whether the outside supplier's offer should be accepted or not. To find out, we must calculate the make or buy cost and then compare it with the supplier's offer price. Calculation Make Cost per unit: Direct materials + Direct labor + Variable manufacturing overhead + Fixed manufacturing overhead, direct+ Fixed manufacturing overhead, common but allocated= $4 + $6 + $5 + $8 + $25 = $48 Buy Cost per unit: Supplier price = $21 Differential cost per unit: $48 – $21 = $27 Total cost of manufacturing 12,000 units: $27*12,000 = $324,000Total cost of buying 12,000 units: $21*12,000 = $252,000. The above table shows the calculation of make-or-buy analysis. Make Cost per unit is calculated by adding Direct Materials, Direct Labor, Variable Manufacturing Overhead, Fixed Manufacturing Overhead, Direct, and Fixed Manufacturing Overhead, Common but Allocated. Similarly, Buy Cost per unit is given as $21, and the Differential cost per unit is the difference between the Make Cost per unit and Buy Cost per unit. The Total cost of manufacturing 12,000 units can be calculated by multiplying the Differential Cost per unit by the number of units used per year. Similarly, the Total cost of buying 12,000 units can be calculated by multiplying the Supplier Price by the number of units used per year.
Therefore, the Total cost of manufacturing 12,000 units = 27 * 12,000 = $324,000, and the Total cost of buying 12,000 units = 21 * 12,000 = $252,000. Since the cost of buying is less than the cost of making, Alanco should purchase from the outside supplier.
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Table Manufacturing Company produces one style of tables the following data pertain to producing one table Planned production/month units (one table) SO Piece of woods (M) 19 Estimated M price $20 Actual production Quantity purchased (OP) from M 20 Actual price (AP) $19 Material price variance? $19, Favorable $19, Unfavorable 520, Favorable $20, Unfavorable Question 2017
Material price variance: Favorable $19, Unfavorable $19, 520 Favorable, $20 Unfavorable. Table Manufacturing Company is a company that produces only one style of tables.
The given data pertain to producing one table: Planned production per month: 1 unit SO piece of woods (M): 19Estimated M price: $20Actual production quantity purchased from M (OP): 20Actual price (AP): $19We need to find the Material price variance: Firstly, we will calculate the Standard Cost = Standard Quantity (SQ) × Standard Price (SP)Standard Quantity (SQ) = 19Standard Price (SP) = $20Standard Cost = SQ × SP= 19 × $20= $380Actual Cost = Actual Quantity (AQ) × Actual Price (AP)Actual Quantity (AQ) = 20Actual Price (AP) = $19Actual Cost = AQ × AP= 20 × $19= $380The formula for Material price variance is as follows:MPV = (SP - AP) x AQWhere, SP is Standard PriceAP is Actual PriceAQ is Actual QuantityMPV = ($20 - $19) x 20= $1 x 20= $20Here, the Actual Cost is equal to the Standard Cost, hence the Material price variance is zero.
Favorable or unfavorable variance is determined by comparing the actual cost to the standard cost. If the actual cost is less than the standard cost, it is a favorable variance, and if it is greater, it is an unfavorable variance. In this case, the Material price variance is zero, which means there is neither favorable nor unfavorable variance.
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1) a.
Current ratio = Current assets / Current liabilities
= 460/395 = 1.16
Working capital = current assets - current liabilities = 460 -
395 = 65
Net profit margin = Net income / Revenue
= Net prof
Consolidated statements of financial position (in millions of Canadian dollars) ASSETS Cash and cash equivalents Restricted cash Trade and other receivables Other current financial assets Other curren
The current ratio is calculated by dividing current assets by current liabilities, resulting in a ratio of 1.16. The working capital is $65 million. The net profit margin is determined by dividing net income by revenue.
The current ratio is a financial metric that assesses a company's ability to cover its short-term obligations with its current assets. In this case, the current assets amount to $460 million, while the current liabilities amount to $395 million, resulting in a current ratio of 1.16. This indicates that the company has $1.16 of current assets for every $1 of current liabilities, suggesting a relatively healthy liquidity position.
Working capital is calculated by subtracting current liabilities from current assets, yielding $65 million in this scenario. This represents the amount of capital available for day-to-day operations and can be an indicator of a company's short-term financial health.
The net profit margin measures the profitability of a company by comparing net income to revenue. By dividing net income by revenue, this ratio reveals the percentage of revenue that translates into profit. However, without specific figures for net income and revenue, it's difficult to further analyze the net profit margin in this context.
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Current ratio = Current assets / Current liabilities
= 460/395 = 1.16
Working capital = current assets - current liabilities = 460 - 395 = 65
Net profit margin = Net income / Revenue
= Net profit / sales * 100
Debt to assets ratio = Total debt / Total assets = 220/ 5,751 = 0.03
b. For each of the ratios calculated in Part a, calculate the percentage change from prior year. Have they improved or declined?
c. Calculate the following ratios for your company using the financial statements for the current year only: - Fixed Asset Turnover - Return on Equity SHOW ALL WORK and include an analysis for each calculation (explained in Part a).
d. Are net cash flows from operating activities considered healthy or unhealthy in the current year? Why?
e. Briefly skim the annual report provided to you (do not read the entire report – simply skim through the material) and state ONE interesting fact that you learned about the company from the annual report.
XYZ, Inc. manufactures a part that it uses in its main product. The company annually manufactures 30,000 units of this piece. A supplier has offered to sell the pre-made part to XYZ management for $50. The company is operating with idle capacity ("Idle capacity"). The unit cost of manufacturing the part in-house is as follows: Materials $14 direct labor Variable indirect costs Fixed indirect costs Total $49 *They will be incurred even if the company decides not to accept the offer. The relevant costs ("relevant costs") of manufacturing a unit of the part amount to: 12 10 13 Multiple Choice O. $36 O $22 $49 $26
The relevant cost of manufacturing a unit of the part amounts to $36. The unit cost of manufacturing the part in-house is $49.
In this scenario, XYZ, Inc. has the option to either manufacture the part in-house or purchase it from a supplier for $50 per unit. The relevant costs refer to the costs that are specifically associated with manufacturing the part and are relevant to the decision-making process.
The unit cost of manufacturing the part in-house is $49, which includes the cost of materials, direct labor, variable indirect costs, and fixed indirect costs. However, the fixed indirect costs are considered irrelevant in this decision because they would be incurred even if the company decides not to manufacture the part in-house.
To determine the relevant cost of manufacturing a unit of the part, we exclude the fixed indirect costs from the unit cost. Therefore, the relevant cost of manufacturing a unit of the part is $49 - $13 (fixed indirect costs) = $36.
Hence, the relevant cost of manufacturing a unit of the part is $36.
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CD Corp. acquired some special equipment for € 646000 on August 1, 2014. The useful life of the equipment was estimated to be 7 years and its residual value was assumed to be zero. The company uses the linear method and calculates the annual depreciation charges according to the number of months used. The depreciation is recorded indirectly. On November 30, 2015, the equipment was sold for € 597000 cash.
Requirement: Post all necessary entries for 2015 (including any adjusting entries) related to the sale of the equipment to the corresponding ledger accounts. There are no closing entries required.
To record the necessary entries for the sale of the equipment in 2015, we need to account for the depreciation expense and the sale transaction. Here are the entries:
Depreciation Expense:
Debit: Depreciation Expense (Income Statement) - € (646,000 / 7 years * 16 months)
Credit: Accumulated Depreciation (Balance Sheet) - € (646,000 / 7 years * 16 months)
Explanation: The equipment was used for 16 months in 2015 (from January 1 to November 30), so we need to record the depreciation expense for that period.
Sale of Equipment:
Debit: Cash (Asset) - € 597,000
Debit: Accumulated Depreciation (Balance Sheet) - (Amount equal to the total accumulated depreciation up to the date of sale)
Debit: Loss on Sale of Equipment (Income Statement) - (Difference between the carrying amount and the sale proceeds)
Credit: Equipment (Asset) - € 646,000
Explanation: The equipment was sold for € 597,000, which is less than its carrying amount. Therefore, a loss on the sale is recorded.
Please note that the specific amount of accumulated depreciation and loss on sale needs to be calculated based on the information provided. Also, ensure that the ledger accounts are updated with the corresponding amounts and dates for these entries.
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classify the following as either current assets or non-current
assets
cash and balances at central banks
balances
at banks and financial institutions
deposits
at banks and financial institutio
Based on the provided information, the classification of the following items as either current assets or non-current assets is as follows:
Cash and balances at central banks - Current asset
Balances at banks and financial institutions - Current asset
Deposits at banks and financial institutions - Current asset
All three items listed are considered current assets because they are expected to be converted into cash or used up within a relatively short period, usually within one year or the operating cycle of the business, whichever is longer.
Current assets are assets that are either cash or assets that are expected to be converted into cash, sold, or consumed within a short period of time. They are typically used in the day-to-day operations of the business.
It's important to note that the classification of assets can vary based on specific circumstances and accounting standards followed by the company. Therefore, it is advisable to refer to the company's financial statements or consult with a financial professional for precise asset classification.
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there is a market supply curve in a: perfectly competitive market
In a perfectly competitive market, the market supply curve is the summation of the individual supply curves of all producers who offer homogeneous goods to the market. Each producer in this market can sell as much as they want at the current market price and can also choose not to participate in the market if they feel the price is too low.
As a result of the unrestricted entry of new producers, the supply of goods in the market increases as the price rises, and the supply decreases as the price falls. The market supply curve is thus upward-sloping, implying that as the price increases, more and more producers join the market, increasing supply, and vice versa. In a perfectly competitive market, producers are price takers, which means they do not have the power to influence the price of goods in the market. The price is determined by the intersection of the market demand and market supply curves. In conclusion, the market supply curve in a perfectly competitive market is an upward-sloping curve, which is the sum of the individual supply curves of all the producers.
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what is consolidated net income for the parent and subsidiary for the year ended december 31, 2021?
The consolidated net income is the sum of the net income of a parent company and its subsidiaries. When a parent company has a controlling interest in one or more subsidiaries, it is required to prepare consolidated financial statements that reflect the financial performance of the entire group rather than just the parent company.
This process involves combining the financial statements of the parent and subsidiaries and eliminating any intercompany transactions to avoid double-counting. The resulting financial statements show the overall financial health of the entire group, including the consolidated net income for the year.
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