Answer:
Reserves = $52,500
Required Reserves = $15,000
Excess Reserves = $37,500
Explanation:
Reserves of a bank refers to deposits held by the bank that have not be given out as loan. It is deposits minus loan. Reserves of the Best National Bank can therefore be calculated as follows:
Reserves = Demand deposits - Outstanding loans = $150,000 - $97,500 = $52,500
Required Reserves refers to the portion of the deposits of a bank that is legally required by the regulatory to be kept as reserves that cannot be loaned out by the bank. Required Reserves of Best National Bank can be calculated as follows:
Required Reserves = Demand deposits * Reserve requirement = $150,000 * 10% = $15,000
Excess Reserves refers to the reserves held by a bank in excess of its required required reserves. Therefore, excess reserves can be given out as loan by the bank. It is can be calculated as reserve minus required reserve for Best National Bank as follows:
Excess Reserves = Reserves - Required Reserves = $52,500 - $15,000 = $37,500
Based on the above, we have the following for Best National Bank:
Reserves = $52,500
Required Reserves = $15,000
Excess Reserves = $37,500
you want to borrow $89000 from your local bank to buy a new sailboat. You can afford to make monthly payments of $1850, but no more. Assuming monthly compounding, what is the highest rate you can afford on a 60 month APR loan?
Answer:
9.06%
Explanation:
Given that :
The amount to be borrowed = $89000
Monthly payment PMT = $1850
Period = 60 month
The highest rate that can be afforded on the 60 month APR loan is determined by using the EXCEL Spreadsheet to compute the solution to this question. The spreadsheet screenshot can be seen below for better understanding.
The decision to accept an additional volume of business should be based on a comparison of the revenue from the additional business with the sunk costs of producing that revenue.
a) true
b) false
Answer:
false
Explanation:
Sunk cost is cost that has already been incurred and cannot be recovered. it should not be considered when making future decisions
Blossom Company issued 3,000 shares of common stock. Prepare the entry for the issuance under the following assumptions. (Credit account titles are automatically indented when amount is entered. Do not indent manually. Round answers to 0 decimal places, e.g. 5,675. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.) (a) The stock had a par value of $9.25 per share and was issued for a total of $51,500. (b) The stock had a stated value of $9.25 per share and was issued for a total of $51,500. (c) The stock had no par or stated value and was issued for a total of $51,500. (d) The stock had a par value of $9.25 per share and was issued to attorneys for services during incorporation valued at $51,500. (e) The stock had a par value of $9.25 per share and was issued for land worth $51,500.
Answer:
Blossom Company
Issue of 3,000 Common Stock Shares on the following assumptions:
(a) The stock had a par value of $9.25 per share and was issued for a total of $51,500:
Debit Cash Account $51,500
Credit Common Stock $27,750
Credit Paid-in In Excess of Par $23,750
To record the issue of 3,000 shares of $9.25 par value.
(b) The stock had a stated value of $9.25 per share and was issued for a total of $51,500:
Debit Cash Account $51,500
Credit Common Stock $27,750
Credit Additional Paid-in Capital $23,750
To record the issue of 3,000 shares of $9.25 stated value.
(c) The stock had no par or stated value and was issued for a total of $51,500:
Debit Cash Account $51,500
Credit Common Stock $51,500
To record the issue of 3,000 shares.
(d) The stock had a par value of $9.25 per share and was issued to attorneys for services during incorporation valued at $51,500:
Debit Incorporation Cost (Attorneys Fees) $51,500
Credit Common Stock $51,500
To record the issue of 3,000 shares for attorneys' services
(e) The stock had a par value of $9.25 per share and was issued for land worth $51,500.
Debit Land $51,500
Credit Common Stock $51,500
To record the issue of 3,000 shares for land.
Explanation:
Shares of Blossom Company can be issued to settle debts or expenses or in exchange for other assets than cash. They can also be issued at par value, above par value, or below par value, depending on prevailing circumstances. Some shares have a par value, which is the nominal value of the shares as authorized. Some are issued at a stated value without par. Others have no par or stated values. Their different accounting treatments are indicated above for Blossom Company.
The following events occur for The Underwood Corporation during 2021 and 2022, its first two years of operations.
June 12, 2021 Provide services to customers on account for $41,000.
September 17, 2021 Receive $25,000 from customers on account.
December 31, 2021 Estimate that 458 of accounts receivable at the end of the year will not be received.
March 4, 2022 Provide services to customers on account for $56,000.
May 20, 2022 Receive $10,000 from customers for services provided in 2021.
July 2, 2022 Write of the remaining amounts owed from services provided in 2021.
October 19, 2022 Receive $ 45,000 from customers for services provided in 2022.
December 31, 2022 Estimate that 45% of accounts receivable at the end of the year will not be received.
Record transactions for each date. (If no entry is required for a particular transaction/event, select "No Journal Entry Required" in the first account field.) Provide services to customers on account for $35,000.
Answer:
Journal Entries are given below
Explanation:
June 12, 2021
Provide services to customers on account of $41,000.
DEBIT CREDIT
Receivable account $41,000
Services Revenue $41,000
September 17, 2021
Receive $25,000 from customers on account.
DEBIT CREDIT
Cash $25,000
Receivable $25,000
December 31, 2021
Estimate that 45% of accounts receivable at the end of the year will not be received.
DEBIT CREDIT
Bad debt($16,000x45%) $7,200
Allowance for doubtful debt $7,200
March 4, 2022
Provide services to customers on account for $56,000
DEBIT CREDIT
Receivable account $56,000
Services Revenue $56,000
May 20, 2022
Receive $10,000 from customers for services provided in 2021.
DEBIT CREDIT
Cash $10,000
Receivable $10,000
July 2, 2022
Write of the remaining amounts owed from services provided in 2021.
Working: $41,000 - $25,000 - $10,000 = $6,000
DEBIT CREDIT
Allowance for doubtful debt $6,000
Account Receivable $6,000
October 19, 2022
Receive $ 45,000 from customers for services provided in 2022.
DEBIT CREDIT
Cash $45,000
Receivable $45,000
December 31, 2022
Estimate that 45% of accounts receivable at the end of the year will not be received.
DEBIT CREDIT
Bad debt (w) $3,750
Allowance for bad debt $3,750
Working:
($56,000 - $45,000) x45% = $4,950
Balance in Allowance account at 31 dec 2021 = 7,200
Bad debt written off = 6,000
Remaining balance = 1,200
Allowance for doubtful debt at 31 dec 2022 = $4,950 - $1,200
Allowance for doubtful debt at 31 dec 2022 = $3,750
a. Galaxy Sales has sales of $746,700, cost of goods sold of $603,200, and inventory of $94,300. How long on average does it take the firm to sell its inventory
Answer:
days of inventory on hand if 360 days is used = 360 / 6.396607 = 56.28 days
days of inventory on hand if 365 days is used = 365 / 6.396607 = 57.06 days
Explanation:
We are to determine the days of inventory on hand
days of inventory on hand = number of days in a period / inventory turnover
inventory turnover = cost of goods sold / inventory - $603,200 / $94,300 = 6.396607
days of inventory on hand if 360 days is used = 360 / 6.396607 = 56.28 days
days of inventory on hand if 365 days is used = 365 / 6.396607 = 57.06 days
The founder of Alchemy Products, Inc., discovered a way to turn lead into gold and patented this new technology. He then formed a corporation and invested $200,000 in setting up a production plant. He believes that he could sell his patent for $50 million.
a. What are the book value and market value of the firm?
b. If there are 1 million shares of stock in the new corporation, what would be the price per share and the book value per share?
Answer:
Book Value is $0.2 million
Market Value is $50 million
Book Value per share is $0.2 per share
Market Value per share is $50 per share
Explanation:
Part A. The book value of Alchemy Products Inc., is $0.2 million and its market value is $50 million.
Part B.
The Book value per share of Alchemy Products Inc., is calculated as under:
Book Value per share = $0.2 million / 1 Million shares = $0.2 per share
The Market value per share of Alchemy Products Inc., is calculated as under:
Market Value per share = $50 million / 1 Million shares = $50 per share
A $200 petty cash fund has cash of $20 and receipts of $177. The journal entry to replenish the account would include a credit to Group of answer choices Cash for $20 Cash Short and Over for $3 Petty Cash for $190 Cash for $180
Answer: Cash for $180
Explanation:
The Petty Cash balance should be at a certain level necessary to cover petty cash expenses of the company. In this case that amount is $200. $20 is already in cash in the account and so will need to be topped up to get to $200.
= 200 - 20
= $180
$180 will take the balance back to $200. The Cash account would be credited of this $200 and the Petty Cash would be debited.
Neither the payback period nor the accounting rate of return methods of evaluating investments considers the time value of money.
a) True
b) False
Answer:
The answer is true.
Explanation:
Both of payback period and Accounting Rate of Return do not consider the time value of money. And this is one of the big disadvantages in using these methods as a means of valuating capital project.
While payback period is the length of time it takes a firm to recover the cost of an investment, accounting rate of return is annual return(profit) on investment.
Payback period is only interested in when it will get its Investment back. It ignores the value or time after this investment has been realized.
The production manager of Rordan Corporation has submitted the following quarterly production forecast for the upcoming fiscal year: 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter Units to be produced 10,600 8,500 7,000 11,100 Each unit requires 0.35 direct labor-hours, and direct laborers are paid $20.00 per hour. Required: 1. Prepare the company’s direct labor budget for the upcoming fiscal year.
Answer and Explanation:
The preparation of the direct labor budget is presented below:
Particulars Quarter 1 Quarter 2 Quarter 3 Quarter 4 Total
Required
Production 10,600 8,500 7,000 11,100 37,200
Multiply with
Direct labor
hours 0.35 0.35 0.35 0.35
Total
direct labors 3,710 2,975 2,450 3,885 13,020
Multiply with
Direct labor
cost $20 $20 $20 $20 $20
Total
direct labor
cost $74,200 $59,500 $49,000 $77,700 $260,400
Don Wyatt is unable to reconcile the bank balance at January 31. Don?s reconciliation is as follows.
Cash balance per bank $3,800.20
Add: NSF check 570.00
Less: Bank service charge 35.00
Adjusted balance per bank $4,335.20
Cash balance per books $4,115.20
Less: Deposits in transit 650.00
Add: Outstanding checks 940.00
Adjusted balance per books $4,405.20
Prepare a correct bank reconciliation.
Answer and Explanation:
The preparation of the correct bank reconciliation is presented below:
Don Wyatt
Bank reconciliation statement
January 31
Particulars Amount Particulars Amount
Bank cash balance $3,800.20 Company cash balance $4,115.20
Deposits in transit $650 Less: NSF check -$570
Less: Outstanding Less: service fee -$35
Check -$940
Bank balance Company balance
After reconciliation $3,510.20 After reconciliation $3,510.20
We adjust the transactions according to the bank balance and book balance so that the both balance could be matched accordingly
g If the Fed is concerned about a possible recession, it ________ the federal funds rate and, in response, longterm interest rates ________ by a ________ amount than the change in shortterm rates. A. lowers; increase; smaller B. lowers; decrease; smaller C. raises; decrease; larger D. raises; increase; smaller E. raises; increase; larger
Answer:
The Fed
Concern about possible recession:
E. raises; increase; larger
Explanation:
The federal funds rate is a short-term monetary policy tool that the Federal Reserve deploys to control expansionary or recessionary economic conditions. It is the interest rate that Federal Reserve allows banks with excess to charge other banks that need to borrow to shore up their deficits. This interest rate is a short-term rate when compared to the long-term interest rates that banks charge consumers of its products and services. The long-term interest rates are affected by the inflation rates.
Patton Company purchased $400,000 of 10% bonds of Scott Co. on January 1, 2011, paying $376,100. The bonds mature January 1, 2021; interest is payable each July 1 and January 1. The discount of $23,900 provides an effective yield of 11%. Patton Company uses the effectiveinterest method and plans to hold these bonds to maturity. 5. On July 1, 2011, Patton Company should increase its Held-to-Maturity Debt Securities account for the Scott Co. bonds by
Answer:
$685.55
Explanation:
Patton company ;
Bond payments $376,100 × 0.055
= $20,685.55
Less face amount $400,000 × 0.05
= $20,000
Held-to-maturity debt securities $685.55
($20,685.55 - $20,000)
Note:
Effective yield(market rate)
= 11% ÷ 2
= 5.5%
Bonds
= 10% ÷ 2
= 5%
The income from operations and the amount of invested assets in each division of Beck Industries are as follows: Income from Operations Invested Assets Retail Division $138,000 $690,000 Commercial Division 138,600 770,000 Internet Division 64,500 430,000 Assume that management has established a 10% minimum acceptable return for invested assets. a. Determine the residual income for each division. Retail Division Commercial Division Internet Division Income from operations $138,000 $138,600 $64,500 Minimum acceptable income from operations as a percent of invested assets Residual income $ $ $ b. Which division has the most residual income
Answer:
a. Minimum acceptable income from operations as of 10% of invested assets
Retail Division = $690,000 * 10% = $69,000
Commercial Division = $770,000 * 10% = $77,000
Internet Division = $430,000 * 10% = $43,000
Residual Income = Income from Operation - Minimum acceptable income from operations as of 10 percent of invested assets
Retail Division Residual Income = $138,000 - $69,000
= $69,000
Commercial Division Residual Income = $138,600 - $77,000
= $61,600
Internet Division Residual Income = $64,500 - $43,000
= $21,500
b. Retail Division has the most Residual Income with the amount of $69,000
Are there differences in employee retention due to gender, or whether the employee is from the local area in the data in the worksheet Employee Retention?
Answer:
Yes there are differences in employee retention based on gender.
Explanation:
Employee retention refers to the ability of an organization to retain its good performing employees. There may be some market factors affecting the retention rate. There are many factors that affect employee retention. There can be difference in employee retention based on gender. It is found that women work 10% more harder than the men even the women have home care duties they still manage to balance their work and life.
To determine the realized return on an investmen, the investor needs to know:________
1. Income received
2. The cost of an investment
3. The sale price of the investment
a. 2 and 3
b. 2 and 4
c. 1 and 4
d. 1 and 3
Answer:
The correct answer all of the above is missing
Explanation:
In order to determine the realized return on investment, for instance, stock, one needs to the income received(dividend) the initial purchase price as well as the sale price of the investment as shown in the formula below:
return on investment=P1-Po+D/Po
P1 is the sale price of investment
Po is the initial cost of investment
D is the income received
Childress compnay produces three products, K1, S5, and G9. Each product uses the same type of material. K1 uses 4.5 pounds of the material, S5 uses 3 pounds , and G9 uses 5.5 pounds. Demand for all products is strong but only 59900 pounds of material are available. Information about the selling price per unit and variable cost per unit of each product follows.
K1 S5 G9
Selling price $158.38 $114.80 $204.52
Variable costs 86.00 91.00 139.00
Required:
Calculate the contribution margin per pound for each of the three products.
Answer:
Product K1 S5 G9
$ $ $
Contribution per pound 16.08 7.93 11.91
Explanation:
Contribution per pound is equate to contribution per unit divided quantity of material required per unit of product.
Contribution per pound = Contribution per unit/quantity of material
Contribution per unit =selling price - variable cost per unit
Product K1 S5 G9
$ $ $
Selling price 158.38 114.80 204.52
Variable cost (86.00) (91.00) (139.00)
Contribution per unit 72.38 23.8 65.52
Material per unit (pounds) 4.5 3 5.5
Contribution per pound 16.08 7.93 11.91
1. Calculate the growth rate between 2010 and 2014 for a company with the following revenue. Year Revenue 2010 735 2011 985 2012 1152 2013 1347 2014 1658 2015 1895
Answer: 230.75 (units/ year)
Explanation:
To compute the growth rate between 2010 and 2014, we use the following formula :
Growth rate = [(Revenue in 2014) -(Revenue in 2010)]÷ [Difference between 2010 and 2014]
From the table, Revenue in 2010 = 735
Revenue in 2014= 1658
Then, Growth rate = (1658 -735)÷ (2014-2010)
= 923÷ 4
= 230.75
Hence, the growth rate between 2010 and 2014 = 230.75 (units/ year)
The Pennington Corporation issued a new series of bonds on January 1, 1985. The bonds were sold at par ($1,000); had a 12% coupon; and mature in 30 years, on December 31, 2014. Coupon payments are made semiannually (on June 30 and December 31). a. What was the YTM on January 1, 1985?
Answer:
The YTM on January 1, 1985 was 6.00%.
Explanation:
The YTM is the interest rate used to determine the Present Value of Coupons and Principle and can be found as follows :
PV = $1,000
Pmt = ($1,000 × 12 %) / 2 = - $60
P/yr = 1
n = 30 × 2 = 60
Fv = - $1,000
YTM = ?
Using a Financial Calculator, the YTM is 6.00%
Therefore, the YTM on January 1, 1985 was 6.00%.
Marco was an economics major in college until he discovered he could major in strength and conditioning. Then he switched majors. Clearly, learning about this field is important to him. Mike and Bob are addressing
n the video, Marco says he was an economics major in college until he discovered he could major in strength and conditioning. Then he switched majors. Clearly, learning about this field is important to him. Mike and Bob are addressing ............... when they send Marco to seminars instead of, for example, increasing his salary in exchange for his continued high performance at MBSC. They could maintain Marco’s high level of motivation by:........................
A. Sending him on an all-expense-paid Caribbean cruise for two weeks
B. Reimbursing his tuition as he seeks a master’s degree in fitness management
C. Reassuring him that he has a job with MBSC as long as he performs well
D. Setting up an employee discount program at a nearby coffee shop, laundromat, and tasalon
Answer:
Valence
C. Reassuring him that he has a job with MBSC as long as he performs well
Explanation:
By sending Marco to seminars, Mike and Bob are addressing VALENCE; a psychological value an individual put on another person, in relation to the attractiveness of individual whose a psychological value has been placed. In this case, a psychological value placed on Macro by his managers is the valuable rewards they would get from his professional development, rather than increasing his salary in exchange for high performance.
Therefore, they could maintain Marco’s high level of motivation by reassuring him that he has a job with MBSC as long as he performs well.
Suppose that the government imposes a $2 a cup tax on coffee. The rise in the price of a Starbucks coffee will be ______, coffee. The number of cups of coffee bought in coffee shops will _______.
Answer:
increase, decrease
Explanation:
In simple words, when the tax was imposed on the product the company will ultimately bear it to the final consumer which means the price will rise. However when the price of the product rises the demand for that product decreases due to the fact that many individuals would not be able to buy it now from their limited income, this phenomenon is called price elasticity due to income.
Answer:
increasedecreaseExplanation:
Which of the following provisions, if included in a mandatory arbitration agreement, would not likely render it unenforceable?
A. A provision that the employee pay the costs of the arbitrator’s services.
B. A provision that gives the employer the right to choose any arbitrator.
C. A provision that requires the employee to prove his case.
D. All of the above.
Answer:
C. a provision that requires the employee to prove his case.
Explanation:
Arbitration is a form of resolving dispute outside of the court system. Here, the parties involved agrees to have their dispute settled through a third party other than a judge. Mandatory arbitration is a provision that is included in a contract , which requires concerned parties to resolve their contract dispute before an arbitrator instead of the normal court system.
In a situation where one of the parties to a contractual agreement feels cheated or the other party has not performed his term of the agreement, such may seek redress through an arbitrator. For a mandatory arbitration to be enforceable, there must be a provision that the employee pay the cost of the arbitrator's service and also a provision that the employer has the right to choose any arbitrator.
Free Spirit’s marketing and sales director doesn’t think that the firm’s market is big enough for the firm to break even. In fact, she believes that the firm will be able to sell only about 200,000 units. However, she also thinks that the demand for Free Spirit’s product is relatively inelastic (so the firm can increase the sales price without significantly decreasing the volume of product sold). Assuming that the firm can sell 200,000 units, what price must it set to break even? $67.69 per unit $85.50 per unit $78.38 per unit $71.25 per unit
Answer:
$60.75
Explanation:
your question seems incomplete. here is the full question used in answering this question
Free Spirit Industries Inc. is considering a project that will have fixed costs of $10,000,000. The product will be sold for $41.50 per unit, and will incur a variable cost of $10.75 per unit. p na r so Free Spirit's marketing and sales director doesn't think that the firm's market is big enough for the firm to break even. In fact, she believes that the firm will be able to sell only about 200,000 units. However, she also thinks that the demand for Free Spirit's product is relatively inelastic (so the firm can increase the sales price without significantly decreasing the volume of product sold). Assuming that the firm can sell 200,000 units, what price must it set to break even? O $57.71 per unit O $72.90 per unit O $60.75 per unit O $66.83 per unit
Breakeven price = (fixed cost / quantity sold) + variable price per unit
($10,000,000 / 200,000) + $10.75 = $60.75
Stock Y has a beta of .9 and an expected return of 11.2 percent. Stock Z has a beta of .5 and an expected return of 7.2 percent. What would the risk-free rate have to be for the two stocks to be correctly priced
Answer:
Required risk free rate for two stocks to be correctly priced would be 2.20%.
Explanation:
In order to determine this, the Capital Asset Pricing Model (CAPM) formula is used as follows:
Rs = Rf + (Beta * MR) .................................... (1)
Where;
For Stock Y:
Rs = Expected return on stock = 11.2%, or 0.112
Rf = Risk free return = ?
Beta = 0.9
MR = Market risk premium = ?
Substituting the values into equation (1), we have:
0.112 = Rf + (0.9 * MR) ................................. (2)
For Stock Z:
Rs = Expected return on stock = 7.2%, or 0.072
Rf = Risk free return = ?
Beta = 0.5
MR = Market risk premium = ?
Substituting the values into equation (1), we have:
0.072 = Rf + (0.5 * MR) ................................. (3)
If we deduct equation (3) from equation (2) and solve for MR, we have:
(0.112 - 0.072) = (Rf - Rf) + (0.9MR - 0.5MR)
0.04 = 0 + 0.4MR
MR = 0.04 / 0.4
MR = 0.10, or 10%
Substituting MR = 0.01 into equation (2) and solve for Rf, we have:
0.112 = Rf + (0.9 * 0.10)
0.112 = Rf + 0.09
Rf = 0.112 - 0.09
Rf = 0.022, or 2.20%
Therefore, required risk free rate for two stocks to be correctly priced would be 2.20%.
When an individual taxpayer sells depreciable real property at a gain, the lesser of the accumulated depreciation or the recognized gain is taxed at a maximum rate of
Answer:
25%.
Explanation:
When you consider that, Depreciation recapture is a term that describes the actual gain derived from after selling depreciable capital property. It is assessed when the sale price of an asset exceeds the tax basis or adjusted cost basis.
Hence, in this case, the gain due to accumulated depreciation is taxed at a max 25%. However, If the recognized gain is higher than the accumulated depreciation, the remaining gain is taxed at at 0/15/20 %, depending on the taxpayer's income.
If the dividend yield for year one is expected to be 5% based on the current price of $50, what will year three dividend (DIV3) be if dividends grow at a constant 4%
Answer:
Div₃ = $2.81
Explanation:
dividend yield = current dividend / current stock price
0.05 = current dividend / $50
current dividend = $50 x 0.5 = $2.50
Div₀ = $.250
Div₁ = $2.50 x 1.04 = $2.60
Div₂ = $2.60 x 1.04 = $2.704 = $2.70
Div₃ = $2.704 x 1.04 = $2.81
Simon recently received a credit card with an 18% nominal interest rate. With the card, he purchased an Amazon Kindle for $350. The minimum payment on the card is only $10 per month
a. If Simon makes the minimum monthly payment and makes no other charges, how many months will it be before he pays off the card. Round to the nearest month.
b. If Simon makes monthly payment of $30, how many months will it be before he pays off the card. Round to the nearest month.
c. How much more in total payments will Simon make under the $10-a-month plan than under the $30-a-month plan? Make sure you use three decimal places for N.
Answer:
A.50 months
B.12.92 months
C.$112.38
Explanation:
a). Using this formula
PV of Annuity = Monthly Payment * [{1 - (1 + r)-n} / r]
Where,
PV of Annuity =$350
Monthly Payment =$10
r=(0.18/12)
Let plug in the formula
$350 = $10 * [{1 - (1 + 0.18/12)-n} / (0.18/12)]
$350 / $10 = {1 - (1.015)-n} / 0.015
35 * 0.015 = 1 - (1.015)-n
(1.015)-n = 1 - 0.525
-n[log(1.015)] = log(0.475)
-n[0.0149] = -0.7444
n = -0.7444 / -0.0149
n= 50 months
b). Using this formula
PV of Annuity = Monthly Payment * [{1 - (1 + r)-n} / r]
Where,
PV of Annuity =$350
Monthly Payment =$30
r=(0.18/12)
Let plug in the formula
$350 = $30 * [{1 - (1 + 0.18/12)-n} / (0.18/12)]
$350 / $30 = {1 - (1.015)-n} / 0.015
11.67 * 0.015 = 1 - (1.015)-n
(1.015)-n = 1 - 0.175
-n[log(1.015)] = log(0.825)
-n[0.0149] = -0.1924
n = -0.1924 / -0.0149 =
n=12.92 months
c). Calculation for the Total Amount Paid under $10-a-month plan
Using this formula
Total Amount Paid under $10-a-month plan = No. of Payments * Monthly Payment
Where,
No.of Payments =50
Monthly Payment=10
Let plug in the formula
Total Amount Paid under $10-a-month plan= 50 * $10 = $500
Calculation for the Total Amount Paid under $30-a-month plan
Using this formula
Total Amount Paid under $30-a-month plan = No. of Payments * Monthly Payment
Where,
No. of Payments =12.92
Monthly Payment=$30
Let plug in the formula
Total Amount Paid under $30-a-month plan= 12.92 * $30 = $387.62
Hence,
Total Amount Paid under $10-a-month plan -Total Amount Paid under $30-a-month plan
= $500 - $387.62
= $112.38
On February 12, Travis Company purchased merchandise on account from a supplier for $10,300. terms 2/10, net 30.
On February 14. Travis returned $1,550 of the merchandise purchased.
On February 17, Travis Company paid for the merchandise.
Assume Travis Company is using the periodic inventory system, record the journal entries required for the above transactions.
Answer:
February 12
Dr Merchandise Inventory 10,300
Cr Accounts Payabe 10,300
February 14
Dr Accounts Payable 1,550
Cr Merchandise Inventory 1,550
February 17
Dr Accounts Payable 8,750
Cr Cash 8,575
Cr Merchandise Inventory 175
Explanation:
Preparation of the Journal entries for Travis Company using periodic inventory system
A. Based on the information given we were told that the company purchased merchandise on account from a supplier for the amount of $10,300 this means that the transaction will be recorded as:
February 12
Dr Merchandise Inventory 10,300
Cr Accounts Payabe 10,300
B. Since the company returned the amount of $1,550 of the merchandise purchased this means that the transaction will be recorded as:
February 14
Dr Accounts Payable 1,550
Cr Merchandise Inventory 1,550
C. Based on the information given we were told that the company paid for the merchandise, this means that the transaction will be recorded as:
February 17
Dr Accounts Payable 8,750
(10,300-1,550)
Cr Cash 8,575
(98%*8,750)
Cr Merchandise Inventory 175
(2%*8,750)
A company estimates that warranty expense will be 4% of sales. The company's sales for the current period are $185,000. The current period's entry to record the warranty expense is:
The journal entry for recording the warranty expense is
Dr Warranty Expense 7,400
Cr Estimated Warranty Liability 7,400
Journal entry:Dr Warranty Expense 7,400 (185,000 x 0.04)
Cr Estimated Warranty Liability 7,400
(being warranty expense is recorded)
here expense is debited as it increased the expense and liability should be credited as it also increased the liability.
Learn more about journal entry here: https://brainly.com/question/24345471
The entry for the warranty expense would be recorded in the form of the Journal entry by debiting the Warranty Expense and crediting the Estimated Warranty Liability with the amount of $7,400.
What is the Journal entry?Journal entry is defined as the primary books of accounting, it records the financial transactions of the firm as a form of recording the transaction by applying the golden rules of accounting.
This process of recording involves of transactions by giving the debit as well as credit effect of the transaction in such a manner that the transactions are recorded properly.
The Journal entry of the given case is:
Warranty Expense a/c Dr. $7,400
To Estimated Warranty Liability a/c $7,400
(being warranty expense is recorded)
The amount is calculated as:
185,000 × 0.04 = $7,400
Therefore, both the accounts are recorded with the $7,400.
Learn more about the Journal entry, refer to:
https://brainly.com/question/20421012
#SPJ6
Carla Vista Company has the following information available for September 2020.
Unit selling price of video game consoles $410
Unit variable costs $328
Total fixed costs $36,900
Units sold 600
1. Compute the unit contribution margin.
2. Prepare a CVP income statement that shows both total and per unit amounts.
3. Compute Carla Vista’ break-even point in units.
4. Prepare a CVP income statement for the break-even point that shows both total and per unit amounts.
Answer:
Instructions are below.
Explanation:
Giving the following information:
Unit selling price of video game consoles $410
Unit variable costs $328
Total fixed costs $36,900
Units sold 600
First, we need to determine the unitary contribution margin:
Unitary contribution margin= 410 - 328= $82
Contribution margin income statement:
Sales= 600*410= 246,000
Total variable cost= 600*328= (196,800)
Total contribution margin= 49,200
Fixed costs= (36,900)
Net operating income= $12,300
To calculate the break-even point in units, we need to use the following formula:
Break-even point in units= fixed costs/ contribution margin per unit
Break-even point in units= 39,200/82
Break-even point in units= 478 units
Finally, the income statement for the break-even point:
Sales= 478*410= 195,980
Total variable cost= 478*328= (156,784)
Total contribution margin= 39,196
Total fixed costs= (39,200)
Net operating income= (4)
The city of New Orleans has 200 advertising companies, 199 of which employ designers of normal ability at a salary of $100,000 a year. The companies that employ normal designers each collect $500,000 in revenue a year, which is just enough to ensure that each earns exactly a normal profit. The 200th company, however, employs Janus Jacobs, an unusually talented designer. Because of Jacobs's talent, this company collects $1,000,000 in revenue a year.
Required:
a. How much will Jacobs earn?
b. What proportion of his annual salary will be economic rent?
c. Will the advertising company for which Jacobs works be able to earn an economic profit?
Answer:
a. Jacob should earn= $100,000 + ($1,000,000 - $500,000)
= $100,000 + $500,000
=$600,000
Hence, Jacob earns $600,000
b. The economic rent is the amount by which payment of Jacob(600,000) exceed the reservation price of the supplier(100,000)
Thus, the economic rent = 600,000 - 100,000 = $500,000
Proportion of Economic rent = Economy rent / Salary of jacob
= $500,000 / $600,000
= 5/6
Hence, the proportion of the economic rent of Jacob is salary is 5/6
c. The advertising company will not be able to make an economic profit because if they withhold some additional revenue made because of hiring Jacob, then he will switch to another advertising company at a higher salary and that company keep on making profit. The company should bid for Jacob until firm are indifferent on paying $600,000 or hiring someone else for $100,000 . Thus, the bidding of Jacob will continue until the salary of Jacob has bid up to a level where no company can make economic profits