Answer:
The correct answer is:
$20,000 (b.)
Explanation:
In order order to calculate the poverty line for Dismal, we will first of all calculate the total number of families in Dismal as follows:
from lowest to high income = 1,000 + 2,000 + 2,000 + 800 + 200 = 6,000
Next, we are told that the poverty rate = 50% = 0.05
Since the Total families = 6000
Therefore, number of poor families = 50% of 6,000 = 0.05 × 6000 = 3,000
Therefore 3,000 families are poor in Dismal
To determine the poverty line, we will count from the lowest earning families upwards until the 3,000th family. The highest income of the 3,000 families counted forms the poverty line. This is done as follows:
1,000 families = $10,000
2,000 families = $10,000 to $20,000
These two groups make up the first 3000 families, and the highest income in the group is $20,000.
Hence the poverty line of Dismal = $20,000
Nick contracts for the sale of this year's strawberry crop to Phoenix, with payment to go to Rural Cooperative Association. The contract reserves to Nick and Phoenix the right to modify its terms. Rural Cooperative's right to payment is
Answer:
Subject to any change That Phoneix and Nick make
Explanation:
Since in the question, it is given that the contracts reserve the right to change or modify the term of the contract between the Nick and Phoenix and the payment is go to Rural Cooperative Association
Therefore the right to payment reflects the changes that made by Phoneix and Nick as the contract allows to make any modification or changes to the contract terms
A government has the following liabilities at the end of the year: General obligation bonds Compensated absences Salaries payable $1,500,00 120,000 40,000 What amount of liabilities should be reported in the governmental activities column of the government-wide statement of net position
Answer:
What should be reported is $1660000
Explanation:
Solution
Given that:
Thus
General obligation bonds=$1,500000
Compensated absences=$120,000
Total liabilities in the governmental activities column=$1660000
Therefore, the amount $1660000 should be reported in the governmental activities column of the government-wide statement of net position.
An entrepreneur is investigating starting a company that provides tax advice to small companies. In order to position his company differently from the existing competitors, the entrepreneur must:
Answer:
b. provide tax advice either in a different manner or provide a different kind of tax service than competitors.
Explanation:
When the company's objective is to position itself in the market differently from competitors, the focus should be on offering a product or service that has different attributes than the competitor.
A differentiated product or service can be defined by presenting innovative features or functions in the market, which generates the desire for the purchase in the customer.
Investing in different attributes for a good or service generates value for the brand and helps to achieve strategic advantages that competitors are unable to achieve.
Therefore, the most suitable alternative for this issue is the letter b, because to position your company differently from existing competitors, the entrepreneur must provide tax advice differently or provide a different type of tax service than competitors.
Finer Company uses a sales journal, purchases journal, cash receipts journal, cash payments journal, and general journal. Journalize the following transactions that should be recorded in the sales journal.
May:
2 Sold merchandise costing $280 to B. Facer for $420 cash, invoice no. 5703.
5 Purchased $2,750 of merchandise on credit from Marchant Corp.
7 Sold merchandise costing $756 to J. Dryer for $1,096, terms 2/10, n/30, invoice no. 5704.
8 Borrowed $8,000 cash by signing a note payable to the bank.
12 Sold merchandise costing $189 to R. Lamb for $302, terms n/30, invoice no. 5705.
16 Received $1,074 cash from J. Dryer to pay for the purchase of May 7.
19 Sold used store equipment (noninventory) for $900 cash to Golf, Inc.
25 Sold merchandise costing $330 to T. Taylor for $518, terms n/30, invoice no. 5706.
Required:
Journalize the May transactions that should be recorded in the sales journal assuming the perpetual inventory system is used.
Answer and Explanation:
The Preparation of the sales journal is prepared below:-
Finer Company
Sales Journal
Date Account Invoice Accounts Cost of goods
Debited Number Receivable Dr. Sold Dr.
Credit sales Credit inventory
May 7 J. Dryer 5704 $1,096 $756
May 12 R. Lamb 5705 $302 $189
May 25 T. Taylor 5706 $518 $330
Oriole Company had sales of $392000, variable costs of $192000, and direct fixed costs totaling $97000. The company’s operating assets total $809000, and its required return is 10%. How much is the residual income?
Answer:
Residual Income = $ 22,100
Explanation:
Residual income is the excess of the controllable profit over the opportunity cost of capital invested.
It is computed as follows:
Residual income = Controllable profit - (cost of capital× operating assets)
Controllable profit = 392,000 - 192,000- 97,000 = $103,000
Residual income = 103,000 - (10%× 809,000)= 22,100
Residual Income = $ 22,100
Fill in the following table by calculating the official unemployment rate and the U-4 measure of labor underutilization.
9.05 9.05
9.64 9.64
9.70 9.70
9.95 9.95
13.91 13.91
14.60 14.60
The official unemployment rate and the U-4 measure of labor underutilization are two different measures of joblessness in the economy.
Excluding discouraged workers from the official unemployment rate may cause the official rate to (overstate/understate) the true extent of underemployment.
Answer and Explanation:
The computation of the official unemployment rate is shown below:
Official unemployment rate is
= Unemployed workers ÷ (Unemployed + employed) × 100
= 13,863,000 ÷ (13,863,000 + 139,323,000) × 100
= 9.05%
Now for the U-4 is
= (Unemployed workers + discouraged workers) ÷ (Unemployed + employed + discouraged workers) × 100
= (13,863,000 + $993,000) ÷ (13,863,000 + 139,323,000 + $993,000) × 100
= 9.64%
Therefore for exclduing the discouraged workers it may cause the offical rate to understate the underemployment true extent
Assume a Cobb-Douglas production function of the form: q equals 10 Upper L Superscript 0.33 Baseline Upper K Superscript 0.75. What type of returns to scaleLOADING... does this production function exhibit?
Answer:
Since 0.33 + 0.75 = 1.08 is greater than one, this production function therefore exhibits increasing returns to scale.
Explanation:
From the question, we have the following restated equation:
[tex]q=10L^{0.33} K^{0.75}[/tex]
Where q is the output, and L and K are inputs
To determine the types of returns to scale, we increase each of L and K inputs by constant amount c as follows:
[tex]q = 10(cL)^{0.33}(cK)^{0.75}[/tex]
We can now solve as follows;
[tex]q = 10c^{0.33+0.75} L^{0.33}K^{0.75}[/tex]
[tex]q=c^{1.08} L^{0.33} K^{0.75}[/tex]
Since 0.33 + 0.75 = 1.08 is greater than one, this production function therefore exhibits increasing returns to scale.
Required: Prepare journal entries to record the December transactions in the General Journal Tab in the excel template file "Accounting Cycle Excel Template.xlsx". Use the following accounts as appropriate: Cash, Accounts Receivable, Supplies, Prepaid Insurance, Equipment, Accumulated Depreciation, Accounts Payable, Wages Payable, Common Stock, Retained Earnings, Dividends, Service Revenue, Depreciation Expense, Wages Expense, Supplies Expense, Rent Expense, and Insurance Expense. 1-Dec Began business by depositing $10500 in a bank account in the name of the company in exchange for 1050 shares of $10 per share common stock. 1-Dec Paid the rent for the current month, $950 . 1-Dec Paid the premium on a one-year insurance policy, $600 . 1-Dec Purchased Equipment for $3600 cash. 5-Dec Purchased office supplies from XYZ Company on account, $300 . 15-Dec Provided services to customers for $7200 cash. 16-Dec Provided service to customers ABC Inc. on account, $5200 . 21-Dec Received $2400 cash from ABC Inc., customer on account. 23-Dec Paid $170 to XYZ company for supplies purchased on account on December 5 . 28-Dec Paid wages for the period December 1 through December 28, $4480 . 30-Dec Declared and paid dividend to stockholders $200 .
Answer:
journal entries to record the December transactions
1-Dec
Cash $10500 (debit)
Common Stock $10500 (credit)
1-Dec
Rent Expense $950 (debit)
Cash $950 (credit)
1-Dec
Prepaid Insurance $600 (debit)
Cash $600 (credit)
1-Dec
Equipment $3600 (debit)
Cash $3600 (credit)
5-Dec
Supplies Expense $300 (debit)
Accounts Payable $300 (credit)
15-Dec
Cash $7200 (debit)
Service Revenue $7200 (credit)
16-Dec
Accounts Receivable $5200 (debit)
Service Revenue $5200 (credit)
21-Dec
Cash $2400 (debit)
Accounts Receivable $2400 (credit)
23-Dec
Accounts Payable $170 (debit)
Cash $170 (credit)
28-Dec
Wages Expense $4480 (debit)
Cash $4480 (credit)
30-Dec
Dividends $200 (debit)
Cash $200 (credit)
Explanation:
The General Journal consists of Entries of Expenses, Capital Expenditures and Receipts and Payments in Cash.
Bay City uses the purchases method to account for supplies. At the beginning of the year the City had no supplies on hand. During the year the City purchased $600,000 of supplies for use by activities accounted for in the General Fund. The City used $400,000 of those supplies during the year. Assuming that the city maintains its books and records in a manner that facilitates the preparation of the fund financial statements, at fiscal year-end the appropriate account balances related to supplies expenditures and supplies inventory would be
Answer:
Supplies Expenditure $600,000
Supplies Inventory $200,000
Explanation:
Calculation for the appropriate account balances related to supplies expenditures and supplies inventory :
Supplies Expenditure will be $600,000 because during the year purchased of $600,000 supplies were made.
Therefore Supplies Expenditure will be $600,000
Supplies Inventory will be:
Purchased supplies $600,000
Less used supplies $400,000
Balance =$200,000
Therefore Supplies Inventory will be $200,000
A group of investors has formed SandInn Corporation to purchase a small hotel. The price is $200,000 for the land and $800,000 for the hotel building. If the purchase takes place in June, com- pute the MACRS depreciation for the first three calendar years. Then assume the hotel is sold in June of the fourth year, and compute the MACRS depreciation in that year also.
Answer:
1. Land is not to be depreciated under the Modified Accelerated Cost Recovery System (MACRS) depreciation schedule.
The Building however will be depreciated over a period of 39 years as it is considered an place of business and not a residential property.
The depreciation for such assets is 1.3% in year 1 and 40, and 2.6% for the years in-between.
Year 1 = 1.3% * 800,000
= $10,400
Year 2 = 2.6% * 800,000
= $20,800
Year 3 = 2.6% * 800,000
= $20,800
The total for the first 3 years is,
= 10,400 + 20,800 + 20,800
= $52,000
2. Depreciation in Year 4
= 800,000 * 2.6%
= $20,800
The following data were selected from the records of Sykes Company for the year ended December 31, 2014.
Balances January 1, 2014
Accounts receivable (various customers) $ 122,000
Allowance for doubtful accounts 8,000
In the following order, except for cash sales, the company sold merchandise and made collections on credit terms 5/10, n/30 (assume a unit sales price of $900 in all transactions and use the gross method to record sales revenue).
Transactions during 2014
a. Sold merchandise for cash, $248,000.
b. Sold merchandise to R. Smith; invoice price, $11,500.
c. Sold merchandise to K. Miller; invoice price, $29,000.
d.
Two days after purchase date, R. Smith returned one of the units purchased in (b) and received account credit.
e. Sold merchandise to B. Sears; invoice price, $23,000.
f. R. Smith paid his account in full within the discount period.
g. Collected $92,000 cash from customer sales on credit in prior year, all within the discount periods.
h. K. Miller paid the invoice in (c) within the discount period.
i. Sold merchandise to R. Roy; invoice price, $18,500.
j.
Three days after paying the account in full, K. Miller returned seven defective units and received a cash refund.
k. After the discount period, collected $6,000 cash on an account receivable on sales in a prior year.
l. Wrote off a 2013 account of $5,000 after deciding that the amount would never be collected.
m. The estimated bad debt rate used by the company was 1.0 percent of credit sales net of returns.
Required:
1. Using the following categories, indicate the effect of each listed transaction, including the write-off of the uncollectible account and the adjusting entry for estimated bad debts (ignore cost of goods sold). The first transaction is used as an example. (Round your answers to the nearest whole dollar amount. Amounts to be deducted should be indicated by a minus sign.)
Transactions | Sales Revenue | Sales discounts | Sales Returns and Allowances | Bad Debt
a
b
c
d
e
f
g
h
i
j
k
l
m
Show how the accounts related to the preceding sale and collection activities should be reported on the 2014 income statement. (Treat sales discounts as a contra-revenue.)
Sales renenue
Less: Sales and return
Sales discounts
Net sales revenue
Operating expenses
Bad debt expenses
Answer:
Sales Revenue: 316,000
Sales Discounts Taken: 2680
Sales Returns and Allowances: 4000
Bad Debt Expense: 1155
Explanation:
A. Sales Revenue- 235,000
B. Sales Revenue- 11,500
C. Sales Revenue- 26,500
D. Sales Returns and Allowances- 500
E. Sales Revenue- 24,000
F. Sales Discounts (Taken)- 220
G. Sales Discounts (Taken)
(Sales discounts (taken) $98,000 ÷ (1 - 0.02) = $100,000 gross sales; $100,000 × 0.02 = $2,000)
H. Sales Discounts (Taken)- 530
I. Sales Revenue- 19,000
J. Sales Discounts (Taken) - (70)
Sales Returns and Allownaces- 3500
K.
L.
M. Bad Debt Expense
Credit sales ($11,500 + $26,500 + $24,000 + $19,000) =$81,000
Less: Sales returns ($500 + $3,500)= 4,000
______________________________
Net sales revenue
77,000
Estimated bad debt rate
× 1.5 %
_____________________________
Bad debt expense
+$1,155
Andrew Industries purchased $165,000 of raw materials on account during the month of March. The beginning Raw Materials Inventory balance was $22,000, and the materials used to complete jobs during the month were $141,000 of direct materials and $13,000 of indirect materials. What amount will Andrew debit to Work in Process Inventory for the month of March
Answer:
Journal entry for raw material used will be :
Dr. Work in process Inventory $141,000
Cr. Raw materials Inventory $141,000
Explanation:
The beginning Raw Materials Inventory balance = $22,000
The materials used to complete jobs during the month = $141,000 of direct materials and $13,000 of indirect materials
Journal entry for raw material used will be :
Dr. Work in process Inventory $141,000
Cr. Raw materials Inventory $141,000
The form of inventory is modified but the company's assets remain in the form of Work in Process. Assets are debited at all times.
Beth Caldwell is in the payroll accounting department of Acerill Films. An independent contractor of the company requests that Social Security and Medicare taxes be withheld from future compensation. What advice should Beth offer
Answer: b. These would not be withheld by the company.
c. As an independent contractor they would be responsible for their own payments
Explanation:
Here is the complete question:
Beth Caldwell is in the payroll accounting department of Acerill Films. An independent contractor of the company requests that Social Security and Medicare taxes be withheld from future compensation. What advice should Beth offer?(You may select more than one answer).
a. The independent contractor should complete Form W-4 to authorize FICA tax withholding.
b. These would not be withheld by the company.
c. As an independent contractor they would be responsible for their own payments.
An independent contractor is someone that has his or her won personal business but still does work for other organizations or businesses. Is should be noted that independent contractors should not be considered to be part of the workers in the organization they work for.
Beth Caldwell should not take taxes out of the payments that will be paid to the person because he is responsible for his or her won payment and normally, they pay the self employment tax which is just like paying for social security and Medicare taxes.
You are the project manager for a cable service provider. Your project team is researching a new service offering. They have been working together for quite sometime and are in the performing stage of Team Development. A new member has been introduced to the team. Which of the following is true?
A. The team will start all over again at the storming stage but quickly progress to the performing stage.
B. The team will continue in the performing stage.
C. The team will start all over again with the storming stage.
D. The team will start all over again with the forming stage.
Answer:
D. The team will start all over again with the forming stage.
Explanation:
Stages of team development are the various stages through which a group passes from formation to dissolution. These stages are important because it helps a manager identify the unique challenges his team is facing per time and various solutions to them.
The stages of team development are:
- Forming
- Storming
- Norming
- Performing
- Adjourning
If a team member joins a team, the team will start over from the forming phase because he will have to get used to his new team mates. He will undergo storming when there will be conflict between coworkers.
Next he will undergo norming when team members accept one another.
Performing when team works optimally to achieve set goals.
Finally the adjourning phase where team is disbanded
Roman Mfg.'s July production involved actual direct labor costs of $41,514 for 3,400 direct labor hours. The budget for the July level of production called for 3,500 direct labor hours at $12.20 per hour, using a standard cost system.
1. Roman's labor rate variance for July is ____________
2. Roman's labor efficiency variance for July is _______________
Answer:
Instructions are below.
Explanation:
Giving the following information:
Roman Mfg.'s July production involved actual direct labor costs of $41,514 for 3,400 direct labor hours. The budget for the July level of production called for 3,500 direct labor hours at $12.20 per hour.
To calculate the direct labor efficiency and rate variance, we need to use the following formulas:
Direct labor time (efficiency) variance= (Standard Quantity - Actual Quantity)*standard rate
Direct labor time (efficiency) variance= (3,500 - 3,400)*12.2
Direct labor time (efficiency) variance= $1,220 favorable
Direct labor rate variance= (Standard Rate - Actual Rate)*Actual Quantity
Actual rate= 41,514/3,400= $12.21
Direct labor rate variance= (12.20 - 12.21)*3,400
Direct labor rate variance= $34 unfavorable
At December 31, Hawke Company reports the following results for its calendar year. Cash sales $ 1,269,730 Credit sales $ 3,913,000 In addition, its unadjusted trial balance includes the following items. Accounts receivable $ 1,185,639 debit Allowance for doubtful accounts $ 17,990 debit Required: 1. Prepare the adjusting entry to record bad debts under each separate assumption. Bad debts are estimated to be 3% of credit sales. Bad debts are estimated to be 2% of total sales. An aging analysis estimates that 6% of year-end accounts receivable are uncollectible
Answer:
Hawke Company
1. Adjusting Journal Entries to record bad debts under:
a) Bad debts are estimated to be 3% of credit sales:
Debit Bad Debts Expense $135,380
Credit Allowance for Doubtful Accounts $135,380
To record the bad debt expense for the period.
b) Bad debts are estimated to be 2% of total sales:
Debit Bad Debts Expense $121,645
Credit Allowance for Doubtful Accounts $121,645
To record the bad debt expense for the period.
c) An ageing analysis estimates that 6% of year-end accounts receivable are uncollectible:
Debit Bad Debts Expense $89,128
Credit Allowance for Doubtful Accounts $89,128
To record bad debt expense for the period.
Explanation:
a) Allowance for doubtful accounts should have a credit balance of $117,390 ($3,913,000 * 3%). Since there was a debit balance in the unadjusted trial balance of $17,990, the two are added to arrive at what should be expensed.
b) Allowance for doubtful accounts will have a credit balance of $103,655 ($5,182,730 * 2%). With a debit balance in the unadjusted trial balance of $17,990, the sum of $121,645 (amount expensed) will bring the balance to a credit balance of $103,655.
c) Allowance for doubtful accounts will have a credit balance of $71,138 ($ 1,185,639 * 6%). With a debit balance in the unadjusted trial balance of $17,990, the sum of $89,128 will be expensed to bring the balance to a credit balance of $71,138.
On January 1, 2021, Gundy Enterprises purchases an office building for $360,000, paying $60,000 down and borrowing the remaining $300,000, signing a 7%, 10-year mortgage. Installment payments of $3,483.25 are due at the end of each month, with the first payment due on January 31, 2021.
Required:
a. Record the purchase of the building on January 1, 2015.
b. Record the first monthly mortgage payment on January 31, 2015. How much of the first payment goes to interest expense and how much goes to reducing the carrying value of the loan?
c. Total payments over the 10 years are $417,990 ($3,483.25 x 120 monthly payments). How much of this is interest expense and how much is actual payment of the loan?
Answer:
A.Dr Building $360,000
Cr Cash $60,000
Cr Notes Payable $300,000
B.Dr Interest Expense $1,750
Dr Notes Payable $1,733.25
Cr Cash $3,483.25
C.$117,990
Explanation:
Grundy Enterprises
1/1/18
Cash Paid/monthly payment
Interest Expense/carrying value
Decrease in Carrying Value
Carrying Value/prior carrying value- $300,000
1/31/18
Cash Paid/Monthly Payment - $3,483.25
Interest Expense/Carrying Value - $1,750.00
Decrease in Carrying Value - $1,733.25
Carrying Value/Prior Carrying Value - (300,000- 1,733.25) $298,266.75
2/28/18
Cash Paid/Monthly Payment - $3,483.25
Interest Expense/Carrying Value - $1,739.89
Decrease in Carrying Value - $1,743.36
Carrying Value/Prior Carrying Value - $296,523.39
A. Preparation of the entry to record the purchase of the building on January 1, 2015.
Dr Building $360,000
Cr Cash $60,000
Cr Notes Payable $300,000
B. Preparation to Record the first monthly mortgage payment on January 31, 2015 and How much of the first payment goes to interest expense and the carrying value of the loan
Dr Interest Expense $1,750
Dr Notes Payable $1,733.25
Cr Cash $3,483.25
C. Calculation of How much of this is interest expense and how much is actual payment of the loan.
Total Paid: $417,990
Less: Principal Balance: ($300,000)
Amount of Interest Paid: $117,990
a.) The purchase of the building on January 1, 2015 is $300000
b.) The amount that goes to interest expense is $1750 and $1733.25 goes towards reducing the carrying value.
c.) The total actual payment on this loan is $300000 and the interest expense = $1733.25
a. Asset = Liability + Equity
asset = 360000 building
Liability = 300000
Equity = - 60000
360000 = liability + 60000
Liability = 360000 - 60000
= $300000
The purchase of the building on January 1 2015 is $300000
b. Interest expense calculation
value = 300000
Interest rate = 7%
time = 1 month out of 12 months
Interest = 0.07*300000*1/12
= $1750
The fall in the carrying value
Payment in the month = 3483.25
Interest = $1750
Decrease = 3483.25-1750
= $1733.25
The carrying at Jan 31st
= 300000-1733.25
= $298266.75
Interest = 298266.75*0.07*1/12
= $1739.89
c. Total loan = $417990
Actual payment = 300000
difference = 417990-300000
= $117990
The total actual payment on this loan is $300000 and the interest expense = $1733.25
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Economists believe that many or even most mergers (or acquisitions) between two purely vertically related firms will not have negative impacts on consumers and may benefit consumers. Other than economies of scale or scope that is also present with horizontal mergers, what might explain this often-favorable view of vertical mergers
Answer:
The answer is below
Explanation:
Vertical merger is a business term, that describes the acquisition of one or more firms by another firm, in which the firms involved are not in direct competition.
In other words, it is a situation where by, a firm acquires a supplier or distributor. A vertical merger, is considered to result to reduced cost and increment in productivity of the firm that acquires other firm.
Benefits of Vertical Merger.
1. Operational Improvements: one of the benefits vertical mergers, is in operational improvements, such that, as the reduction in cost, the delay in delivery of supplies will be greatly reduced or outrightly eliminated. It could also created avenue or marketing opportunity in supplying materials to competitors or other firms
2. Financial Synergies: this implies that, vertical merger could increase the company access to capital, funds, or credit facility from banks, which can be used in smooth running of the firm.
3. Management Efficiencies: vertical merger can leads to reduction in the cost and running of executives, such that, the inefficient personnels are removed and at the same time, increase the overall operations and commun of the excutives.
Novak Corp. issued 24400 shares of $1 par common stock for $40 per share during 2022. The company paid dividends of $59000 and issued long-term notes payable of $537000 during the year. What amount of cash flows from financing activities will be reported on the statement of cash flows
Answer:
The amount of cash flow that will be reported from Financing activities is $1,454,000 Net cash Inflow
Explanation:
Computation of Novak Corporation cash flows from Financing Activities.
Particulars Amount
Cash Inflow from issue of Common stock $976,000
(24,400 * $40)
Cash Inflow from issue of Notes Payable $537,000
$1,513,000
Less: Dividends Paid (-$59,000)
Net cash Inflow from Financing Activities $1,454,000
The Village of Seaside Pines prepared the following enterprise fund Trial Balance as of December 31, 2020, the last day of its fiscal year. The enterprise fund was established this year through a transfer from the General Fund. Prepare the reconciliation of operating income to net cash provided by operating activities that would appear at the bottom of the December 31 Statement of Cash Flows. Recall that the beginning balance of all assets and liabilities is zero. (Deductions should be entered as a negative amount.)
Answer:
Hello your question lacks some details and attached to the answer is the missing parts of the question although the year is slightly different ( 2017 ) and yours is 2020 but the General idea of what you want is contained in it
ANSWER: Net cash provided by operating activities = 93000
Explanation:
Before preparing the reconciliation of operating income to net cash provided by operating activities we will have to calculate the operating income form the given table
Charge for sales = 555,000
Less: Cost of goods = -497,000
Administrative and selling expenses = -49,000
Depreciation expense = -47,000
Operating Income = (charge for sales + cost of goods + admin and selling expenses + depreciation expenses ) = -38000
Note : interest income and interest expenses are not considered when calculating operating income
Note : when calculating the net cash provided, Increase in current liabilities is been added and increase in current assets is been subtracted while depreciation is been added to the operating income
ATTACHED TO THIS ANSWER IS THE TABLES SHOWING THE COMPLETE ANSWER AND THE COMPLETE QUESTION
Foot Locker, Inc., is a large global retailer of athletic footwear and apparel selling directly to customers and through the Internet. It includes the Foot Locker family of stores, Champs Sports, Footaction, Runners Point, and Sidestep. The following are a few of Foot Locker's investing and financing activities as reflected in a recent annual statement of cash flows.
a. Capital expenditures (for property, plant, and equipment).
b. Repurchases of common stock from investors.
c. Sale of short-term investments.
d. Issuance of common stock.
e. Purchases of short-term investments.
f. Dividends paid on common stock.
Required:
For activities (a) through (f), indicate whether the activity is investing (l) or financing (F) and the direction of the effect on cash flows (+ for increases cash; - for decreases cash).
Answer:
a. Capital expenditures (for property, plant, and equipment) : (l), -
b. Repurchases of common stock from investors : (F), -
c. Sale of short-term investments : (O) +
d. Issuance of common stock : (F) +
e. Purchases of short-term investments : (O) -
f. Dividends paid on common stock : (F) -
Explanation:
The cash flow statement categories the company's transactions in a financial period into 3 groups; these are operating, investing and financing.
The net profit/loss, depreciation, changes in current assets (other than cash) and liabilities are considered as operating activities including income taxes.
The sale of assets, interest received, purchase of investments are examples of investing activities while the issuance of stocks, debt principal deduction (loan settlement), issuance of debt securities etc are examples of financing activities.
An increase in assets other than cash is an outflow while an increase in liabilities is an inflow. Depreciation and other non-cash expenses deducted in the income statements are added back while the non-cash income such gain on asset are deducted from net income.
Molen Inc. has an outstanding issue of perpetual preferred stock with an annual dividend yield of 7.50% and a par value of $60. If the market value for the preferred stock is $70, what is the required return on this preferred stock?
Answer:
10.71%
Explanation:
The computation of the required rate of return on this preferred stock is shown below :
The Required return on preferred stock is
= Dividend ÷ market value of preferred stock
= 7.50 ÷ $70
= 10.71%
By dividing the dividend from the market value of preferred stock we can get the Required return on preferred stock and the same is to be considered
therefore we ignored the par value i.e $60 as this is not relevant
Answer:
$61.54
Hope this helps! good luck :)
Ajax common stock is expected to return 17 percent in a boom economy, 11 percent in a normal economy, and 2 percent in a recession. The probability of a boom is 25 percent, of a normal economy is 70 percent, and of a recession is 5 percent. What is the expected return on this stock?
Answer:
Expected Value of the return = 12.1%
Explanation:
The expected rate of return is the weighted average of all the possible returns associated with an investment decision. The returns are weighted using the probability associated with their outcomes.
Expected return = WaRa + Wb+Rb + Wn+Rn
W- weight of the outcome, R - return of the outcome
W- Probability of the expected outcome, R- expected return under a circumstance
Expected Value of the return
(0.25× 17%) + (0.7× 11%) + (0.05 × 2%) = 0.1205
=0.1205 × 100
= 12.1%
Expected Value of the return = 12.1%
If two different fuel sources (e.g., coal and natural gas) are perfect substitutes in the long-run production of energy. How will a profit maximizing firm choose between these two inputs
Answer:
The firm would choose the input with the lower cost.
Explanation:
Perfect subsituites are goods that can be used in place of one another. If the price of one good rises, the demand for the other good increases.
A profit maximising firm would aim to use the cheapest input available, so in the long run when all inputs of production are variable, the firm would choose the less expensive input.
I hope my answer helps you
Use the minimax method to find all of the pure-startegy Nash equilibria for the following zero-sum games. Then, check your answer by using the iterated elimination of strictly dominated strategies method.
a.
Left Right
1 4
2 3
b.
Left Middle Right
5 3 2
6 4 3
1 6 2
Sides are:______
a. Up Down
b. Up Middle Down
Answer:
b
Explanation:
i dont really know,can someone explain to mee
Four roommates are planning to spend the weekend in their dorm room watching old movies, and they are debating how many to watch. Here is their willingness to pay for each film:
Willingness to Pay (Dollars)
Musashi Sean Bob Eric
First film 10 9 8 3
Second film 8 7 6 2
Third film 6 5 4 1
Fourth film 4 3 2 0
Fifth film 2 1 0 0
Within the dorm room, the showing of a movie ( IS OR IS NOT ) a public good.
If it costs $8 to rent a movie, the roommates should rent__________movies in order to maximize the total surplus.
Suppose the roommates choose to rent the optimal number of movies you just indicated and then split the cost of renting equally.
This means that each roommate will pay $__________.
Answer:
1. Inside the dorm room, the movies are Non-Rival which means that one person can watch the movie and it will not diminish the ability of others to watch as well.
Also as they are all in the same dorm, the showing of the movie is Non-Excludable as well because no one can stop the other from watching.
Public good is both Non-Rival and Non-Excludable so the showing of a movie IS a public good.
2.
Musashi Sean Bob Eric Total Willingness to pay
10 9 8 3 30
8 7 6 2 23
6 5 4 1 16
4 3 2 0 9
2 1 0 0 3
The optimal number of movies that can be rented is dependent on their total willingness to pay. If their Total willingness to pay for the movie is above $8 which is the cost of a movie, then they will get it. From the table, the fifth movie is below the price of $8 so they should rent 4 movies.
3. If they rent 4 movies and there are 4 of them then the cost per person is;
= (8 *4)/4 people
= 24/4
= $8
This means that each roommate will pay $8.
A working capital managers role is to manage: Select one: a. accounts receivable and payable only. b. cash, inventory, accounts receivable, accounts payable and risk management. c. cash and inventory only. d. inventory and accounts receivable only.
Answer:
b. cash , inventory, accounts receivable, accounts payable and risk management
Explanation:
Working capital is defined as a measure that shows how a company is operating efficiently and it's ability to meet the short term financial obligations.
When a business working capital is properly managed, then the business will be healthy financially hence operate successfully and able to meet up with it's daily obligations.
A good working capital manager must be able to make use of working capital management to maintain balance between profitability, growth and liquidity. The role of working capital manager is also to manage cash, inventory, accounts receivable and payable and risk management.
A working capital manager must be able to manage cash that will be used for a business daily operation, must ensure the business inventories are properly managed and accounted for. It's duty also include risk management as he is responsible for making decisions regarding day to day finance of a business operation; the success or failure in terms of meeting up with short term financial obligation depends on him.
Pratt Corp. started the Year 2 accounting period with total assets of $37,000 cash, $15,500 of liabilities, and $12,000 of retained earnings. During the Year 2 accounting period, the Retained Earnings account increased by $14,550. The bookkeeper reported that Pratt paid cash expenses of $29,500 and paid a $2,700 cash dividend to stockholders, but she could not find a record of the amount of cash revenue that Pratt received for performing services. Pratt also paid $10,000 cash to reduce the liability owed to a bank, and the business acquired $8,500 of additional cash from the issue of common stock. Assume all transactions are cash transactions.Requried:a. Prepare an income statement for the 2018 accounting period.b. Prepare a statement of changes in stockholders’ equity for the 2018 accounting period.c. Prepare a period-end balance sheet for the 2018 accounting period.d. Prepare a statement of cash flows for the 2018 accounting period.
Answer:
a) Revenue = $46,750
b) Stockholder's equity $35,050
c) Net Total Assets = Stockholder's equity = $35,050
d) Net cash generated for the year is $13,050; and Ending cash balance is $50,050
Explanation:
a. Prepare an income statement for the 2018 accounting period
To prepare this, cash revenue is first determined as follows:
Revenue = Retained earning for the year + Expenses + dividend = $46,750
The income statement can now be prepared as follows:
Pratt Corp.
Income statement
For the 2018 accounting period
Particulars $
Revenue 46,750
Expenses (29,500)
Net income 17,250
Dividend paid (2,700)
Retained Earnings for the year 14,550
b. Prepare a statement of changes in stockholder's equity for the 2018 accounting period
Pratt Corp.
Statement of changes in stockholder's equity
For the 2018 accounting period
Particulars $
Issue of common stock 8,500
Beginning retained earnings 12,000
Retained Earnings for the year 14,550
Stockholder's equity 35,050
c. Prepare a period-end balance sheet for the 2018 accounting period
Pratt Corp.
Balance Sheet
For the 2018 accounting period
Particulars $
Total Assets
Ending cash balance 50,050
Total Liability
Liability (15,500)
Net Total Assets 35,050
Financed By:
Issue of common stock 8,500
Beginning retained earnings 12,000
Retained Earnings for the year 14,550
Stockholder's equity 35,050
Note: Since both the Net Total Assets and Stockholder's equity are both equal to $35,050 as normally require, it shows the balance sheet is accrurately prepared.
d. Prepare a statement of cash flows for the 2018 accounting period
Pratt Corp.
Statement of Cash Flows
For the 2018 accounting period
Particulars $ $
Net income 17,250
Cash flow from operating activities 17,250
Changes in Financing Activities:
Decrease in liability (10,000)
Issue of common stock 8,500
Dividend paid (2,700)
Cash flow from financing activities (4,200)
Net cash generated for the year 13,050
Beginning cash balance 37,000
Ending cash balance 50,050
ABC Corporation has E & P of $240,000. It distributes land with a fair market value of $70,000 (adjusted basis of $25,000) to its sole shareholder, Paul. The land is subject to a liability of $55,000 that Paul assumes. Paul has: A
a. Taxable dividend of $15,000.
b. A taxable dividend of $25,000.
c. A taxable dividend of $45,000.
d. A taxable dividend of $70,000.
e. A basis in the machinery of $55,000
Answer: Paul has a taxable dividend of $15,000.
Explanation:
From the question, we are informed that ABC Corporation has E & P of $240,000 and distributes land with a fair market value of $70,000 (adjusted basis of $25,000) to its sole shareholder, Paul. We are further informed that the land is subject to a liability of $55,000.
The taxable dividend will be the difference between the fair market value of land and the liability on the land. This will be:
= $70,000 - $55,000
= $15,000
Therefore, Paul has a taxable dividend of $15,000.
2. (20 points) A couple plans to purchase a home for $320,000. Property taxes are expected to be $1,200 per year while insurance premiums are estimated to be $1400 per year. Annual repair and maintenance are estimated at $1,950. An alternative is to rent a house of about the same size for $2,150 per month [approximate using $25,800 per year]. If an 8.0% return before-taxes is the couple's minimum rate of return, what must the resale value be 10 years from today for the cost of ownership to equal the cost of renting
Answer:
$371,200
Explanation:
For the computation of annual price escalation first we need to follow some steps which are shown below:-
Future value of payment if the property purchased is
= Property taxes + Insurance premium + Annual repair and maintenance
= $1,200 + $1,400 + $1,950
= $4,550
Future value = (1 + K)^n
= (1 + 0.08)^10
= 2.158924997
or
= 2.16
Future value of annuity factor = (1 + K)^n -1 ÷ K
= ((1 + 0.08)^10 - 1) ÷ 0.08
= 1.158924997
÷ 0.08
= 14.487
Future value of the cost of property = Purchase amount of a home × Future value
= $320,000 × 2.16
= $691,200
Future value of recurring cost = Future value of payment if property purchased × Future value of annuity factor
= $4,550 × 14.487
= $65,915.85
Total value of payment = Future value of the cost of property + Future value of recurring cost
= $691,200
+ $65,915.85
= $75,7115.85
Future value of the payment in property taken on rent
The Total value of the payment in 10 year when the property taken on rent = Amount using per year × Future value of annuity factor
= $25,800 × 14.487
= $373,764.6
The amount incurred in both the methods will be the same if the property can be sold = Total value of payment - Total value of the payment in 10 year when the property was taken on rent
= $75,7115.85 - $373,764.6 0
= 383351.25
finally,
The annual price escalation = Future value of the cost of the property - Purchase amount of home
= $691,200 - $320,000
= $371,200