Answer:
23,125 shares
Explanation:
The computation of the number of outstanding common stock shares is shown below:
= (Common stock ÷ Par value per share) - (Treasury stock ÷ cost per share)
where,
Common stock is $232,000
Par value per share is $10
Treasury stock is $975
And, the cost per share is $15
Now placing these values to the above formula
So, the number of common stock outstanding shares is
= ($232,000 ÷ $10) - ($975 ÷ $15)
= $23,200 - $65
= 23,135 shares
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.
Jackson Manufacturing Company had a beginning inventory of $30,000. During the year, the company recorded inventory purchases of $90,000 and cost of goods sold of $100,000. The ending inventory must equal:
Answer:
The answer is $20,000
Explanation:
Solution
Given that:
Jackson Manufacturing Beginning inventory = 30,000
Inventory purchases recorded = $90,000
Cost of goods sold = $100,000
Then
We find the ending inventory which is given below:
Now
The inventory (ending) is = beginning inventory + purchases - cost of goods sold
= $30,000 + $90,000 - $100,000
=$20,000
Hence, the ending inventory must equal the amount of $20,000
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
If a gain of $221000 is realized in the cash sale of a building having a book value of $882000, the total amount reported in the cash flows from investing activities section of the statement of cash flows is
Answer:
$1,103,000
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.
For assets disposed, the amount received from the disposal is the amount recorded as an investing activity.
Amount received - Book value of asset = Gain on disposal
Amount received = $221000 + $882000
= $1,103,000
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
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
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.
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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Clemmens Company applies overhead based on direct labor cost. Estimated overhead and direct labor costs for the year were $112,500 and $125,000, respectively. During the year, actual overhead was $107,400 and actual direct labor cost was $120,000. The entry to close the over- or underapplied overhead at year-end, assuming an immaterial amount, would include:
Answer:
Estimated Over head applied = ($112500 / $125000) *100 = 90% of Direct labor cost.
Thus, Actual Over Head applied = 90% of $120000 = $108000
Moreover, Actual Over Head incurred = $107400
Therefore, Overhead Over-applied is to be applied as the Actual Overhead applied is higher than the Actual Overhead Incurred
Overhead Over-applied = $108000 - $107400
Overhead Over-applied = $600
The entry to close the over-applied overhead at year-end would include:
i. Over-head A/c will be debited for $600
ii. Cost of goods sold will to be credited for $600
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
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.
Choose the correct answers :
1. If the demand for product A displays high and postitive cross-price elasticity with respect to the price of product B, then:
a. the demand for product A is likely to have a low price elasticity
b. product A and B are subtitutes
c. products A and B are complements
d. the demand for product B is likely to have a low price elasticity
2. Fast food is believed to be an inferior good. This means that:
a. the quantity of fast food consumed decreases as income increases
b. the income elasticity of demand for fast food is positive
c. The quantity of fast food consumed will always be high
d. fast food is really not quality food
Answer:
b. product A and B are subtitutes
a. the quantity of fast food consumed decreases as income increases
Explanation:
Cross price elasticity of demand measures the responsiveness of quantity demanded of good A to changes in price of good B.
Cross price elasticity = percentage change in quantity demanded of good A / percentage change in price of good B.
The cross price elasticity of substitute goods are always positive because if the price of good B increases, the Quanitity demanded of good A rises.
Substitute goods are goods that can be used in place of another good.
Complement goods are goods that are used together. E.g. car and gas
Inferior goods are goods whose demand increases when income falls and whose demand falls when income rises.
I hope my answer helps you
When the U.S. dollar is strong, Select one: a. U.S. manufacturers tend to make more purchases from foreign sources. b. U.S. manufacturers tend to limit purchases from foreign sources. c. U.S. manufacturers do not change standard business practices. d. U.S. manufacturers are more likely to close plants abroad.
Answer:
a. U.S. manufacturers tend to make more purchases from foreign sources
Explanation:
The US dollar is high producers in the US prefer to make more purchases from international sources, according to the provided scenario.
Therefore the correct option is a which indicates that when the US dollar is strong then the manufacturer of the united states prefer to buy as much from international entities in order to capture the market at the maximum level so that they could able to achieve their sales targets
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
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%
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 :)
Tri Fecta, a partnership, had revenues of $364,000 in its first year of operations. The partnership has not collected on $45,100 of its sales and still owes $38,400 on $220,000 of merchandise it purchased. There was no inventory on hand at the end of the year. The partnership paid $28,300 in salaries. The partners invested $46,000 in the business and $25,000 was borrowed on a five-year note. The partnership paid $3,000 in interest that was the amount owed for the year and paid $9,400 for a two-year insurance policy on the first day of business. Ignore income taxes.Compute the cash balance at the end of the first year for Tri Fecta.
a) $ 332,110
b) $ 161,640
c) $ 166,290
d) $ 155,440
Answer:
$167,600
Explanation:
Net income:
Sales revenue $364,000
- COGS $220,000
- Salaries $28,300
- Interest $3,000
- Insurance $4,700
Net Income $108,000
Cash flow from operating activities:
Net income $108,000
adjusting entries:
accounts receivable ($45,100)accounts payable $38,400prepaid insurance ($4,700)Net cash flow from operating activities $96,600
Cash flow from financing activities:
capital invested $46,000
money borrowed $25,000
Net cash flow from financing activities $71,000
Cash balance $167,600
Grayille Financial Consultants, Inc. is planning to reduce the number of days it allows its clients to pay their bills from 45 days to 30 days. Grayille believes that this policy change will have no effect on either sales or costs. Any asset changes resulting from this new policy will be offset by a corresponding and equal change in equity. All else constant, this new collection policy should be expected to (circle all that apply - if the correct answer is a and b and you circle any letter(s) other than a and b, you will receive no credit - that is, no partial credit will be awarded for your answer to this question):
Answer: c. Lower the firm's quick ratio.
d. Lower the firm's current ratio.
Explanation:
Reducing the amount of time that clients have to pay will reduce the amount of Account Receivables as clients will no longer have long outstanding due dates. This reduction in Accounts Receivables will be felt by the Quick and Current ratios.
Quick Ratio formula
= [tex]\frac{Current Assets - Inventory}{Current Liabilities}[/tex]
Current Ratio Formula
= [tex]\frac{Current Assets}{Current Liabilties}[/tex]
As is evident from the formulas, Current Assets are integral to both ratios and as Accounts Receivables is a current asset that will be reduced, the current assets will be reduced and by extension both the Current and Quick Ratios will be reduced as well.
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
Williamson Industries has $7 billion in sales and $2 billion in fixed assets. Currently, the company's fixed assets are operating at 90% of capacity. What level of sales could Williamson Industries have obtained if it had been operating at full capacity
Answer: Williamson industries would have obtained $7.78 billion in sales
Explanation: According to the question, the company is having a total of $2 billion in fixed assets. The fixed assets are currently operating at 90% (0.9) of its total capacity. At his level, the company is able to achieve a sales figure of $7 billion. The implication is as follows;
Fixed assets (at 100%) = 2 billion
Fixed assets (at 90%) = 2 * 0.9
Fixed assets (at 90%) = 1.8
If the company utilizes $1.8 billion to achieve a $7 billion sales figure, then operating at full capacity (100%) would yield the following;
7/x = 90/100
(Where x equals sales level at 100% capacity)
7/x = 0.9
Cross multiply
x = 7/0.9
x = 7.7777...
x ≈ 7.78
Therefore, if Williamson Industries had been operating at full capacity, it would have obtained a sales level of $7.78 billion
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
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
Larned Corporation recorded the following transactions for the just completed month.
$72,000 in raw materials were purchased on account. $70,000 in raw materials were used in production. Of this amount, $62,000 was for direct materials and the remainder was for indirect materials. Total labor wages of $106,000 were paid in cash. Of this amount, $102,200 was for direct labor and the remainder was for indirect labor. Depreciation of $193,000 was incurred on factory equipment.
Required:
Record the above transactions in journal entries.
Answer:
Larned Corporation
Journal Entries
Sr. No Account Debit Credit
1 Materials $72,000
Accounts Payable $72,000
$72,000 in raw materials were purchased on account.
2 Work in Process $62,000
Materials Inventory $62,000
$70,000 in raw materials were used in production. Of this amount, $62,000 was for direct materials
3 Manufacturing Overheads $8000
Materials Inventory $ 8000
$70,000 in raw materials were used in production. Of this amount, $62,000 was for direct materials and the remainder was for indirect materials.
4 Work In Process $ 102,000
Payroll ( Direct Labor ) $102,000
$102,200 was for direct labor
5 Manufacturing Overheads $3800
Payroll (Indirect Labor) $3800
Total labor wages of $106,000 were paid in cash. Of this amount, $102,200 was for direct labor and the remainder was for indirect labor.
6 Depreciation $193,000
Factory Overhead Control Account $193,000
Depreciation of $193,000 was incurred on factory equipment.
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.
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.
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
1. At year-end, Harris Co. had shipped $12,500 of merchandise FOB destination to Harlow Co. Which company should include the $12,500 of merchandise in transit as part of its year-end inventory?
2. Harris Company has shipped $20,000 of goods to Harlow Co., and Harlow Co. has arranged to sell the goods for Harris. Identify the consignor and the consignee. Which company should include any unsold goods as part of its inventory?
Answer:
1. Harris company
2. The Consignor should be Harris Company
The Consignee should be Harlow Company
Explanation:
1.Harris company should include the amount of $12,500 as part of their year end inventory because based on the information given we were told that Harris Company was the company which at year-end shipped $12,500 of merchandise FOB destination to Harlow Co.
2.
The Consignor should be Harris Company
The Consignee should be Harlow Company
Because Harris Company was the company which shipped the goods worth $20,000 to Harlow Co Which means HARRIS COMPANY is the CONSIGNOR in which Harlow Co. has as well arranged to sell the goods for Harris which means HARLOW COMPANY is the CONSIGNEE because they are the buyer of the goods
Therefore Harris company should tend to include any goods which are unsold as part of the inventory.
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
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.
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