Answer:
amount borrowed = $54,000
Explanation:
in order to solve this, let us calculate the net cash balance as a result of the transaction activities first, and this is calculated as follows:
beginning cash balance = $135,000
cash receipts = $ 130,000
cash disbursements = $ 184,000
Net cash = beginning cash balance + cash receipt - Cash disbursement = 135,000 + 130,000 - 184,000 = $81,000
Next, we are told that there was an ending cash balance of $135,000, therefore, amount borrowed is calculated as follows:
ending cash balance = net cash balance from activities + borrowed cash
135,000 = 81,000 + borrowed cash
∴ borrowed cash = 135,000 - 81,000 = $ 54,000
Therefore, the amount borrowed = $54,000
Find the future values of these ordinary annuities. Compounding occurs once a year. Do not round intermediate calculations. Round your answers to the nearest cent. $900 per year for 16 years at 4%. $ $450 per year for 8 years at 2%. $ $300 per year for 8 years at 0%. $ Rework parts a, b, and c assuming they are annuities due. Future value of $900 per year for 16 years at 4%: $ Future value of $450 per year for 8 years at 2%: $ Future value of $300 per year for 8 years at 0%: $
Answer:
Ordinary annuities:
$19,642.08
$3,862.34
$2400
Annuities due:
$20,427.76
$3,939.58
$2400
Explanation:
The future values of the annuities can be computed using excel future value formula:
=fv(rate,nper,-pmt,pv,type)
rate is the interest rate
nper is the period of investment stated in years
pmt is the regular investment amount
pv is present worth of each investment which is unknown and taken as zero
type could either be 0 or 1
1 is for annuity due
0 is for ordinary annuity
Ordinary annuities:
$900 per year for 16 years at 4%
=fv(4%,16,-900,0,0)=$19,642.08
$450 per year for 8 years at 2%
=fv(2%,8,-450,0,0)=$3,862.34
$300 per year for 8 years at 0%
=fv(0%,8,-300,0,0)=$2400
annuities due:
$900 per year for 16 years at 4%
=fv(4%,16,-900,0,1)=$20,427.76
$450 per year for 8 years at 2%
=fv(2%,8,-450,0,1)=$3,939.58
$300 per year for 8 years at 0%
=fv(0%,8,-300,0,1)=$2400
A process produces 5000 units of output that yield $6 per unit. Resources contributed to this output are 200 hours of labor at $15 per hour, materials at $700 and overhead at $300. What is the labor productivity? (assuming that the output is measured by its unit)
Answer:
Labor productivity = 25 units per hour
Explanation:
The labor productivity per hour is the number of output units , per unit of labor input.
Number of units produced = 5,000 units
Number of hours of labor input = 200 hours
∴ Labor productivity = units produced ÷ labor input in hours
Labor productivity = 5,000 ÷ 200 = 25
∴ Labor productivity = 25 units per hour
A company is planning to purchase a machine that will cost $54,000 with a six-year life and no salvage value. The company expects to sell the machine's output of 3,000 units evenly throughout each year. A projected income statement for each year of the asset's life appears below. What is the payback period for this machine?
Answer: 3.63 years.
Explanation:
The Payback period of a machine refers to how long it will take to repay it's initial investment. In this case, how long it will take to repay $54,000.
The Net Income is given in the income statement. The Depreciation needs to be added back to this income though because it is a non-cash expense so failing to add it back understates the actual amount of money that the company is getting from the machine.
Total Annual Payback = Net Income + Depreciation
= 5,850 + 9,000
= $14,850
Payback Period is,
= Initial Cost / Annual Inflow
= 54,000 / 14,850
= 3.63 years
Radison Inc. sells a product for $55 per unit. The variable cost is $35 per unit, while fixed costs are $43,200. Determine (a) the break-even point in sales units and (b) the break-even point if the selling price were increased to $62 per unit. a. Break-even point in sales units units b. Break-even point if the selling price were increased to $62 per unit units
Answer:
Results are below.
Explanation:
Giving the following information:
Selling price= $55 per unit
Unitary variable cost= $35
Fixed costs= $43,200
A.
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= 43,200 / (55 - 35)
Break-even point in units= 2,160 units
B. Selling price= $62
Break-even point in units= 43,200 / (62 - 35)
Break-even point in units= 1,600 units
Answer:
2160 units
1600 units
Explanation:
Break-even point is the fixed cost of $43,200 divided by the contribution margin per unit.
Contribution margin per unit is the selling price per unit minus variable cost per unit.
When price is $55,contribution margin is $20 ($55-$35),hence breakeven point is shown thus:
breakeven point in sales units=$43,200/$20=2,160 units
When price is increased to $62 per unit,contribution margin is $27 ($62-$35)
Breakeven point in sales unit=$43,200/$27=1,600 units
On January 1, Frederic Manufacturing had a beginning balance in WorkminusinminusProcess Inventory of $ 163,000 and a beginning balance in Finished Goods Inventory of $ 23,000. During the year, Frederic incurred manufacturing costs of $ 200,000.
During the year, the following transactions occurred:
Job C- 62 was completed for a total cost of $143,000 and was sold for $158,000.
Job C - 63 was completed for a total cost of $183,000 and was sold for $214,000.
Job C - 64 was completed for a total cost $84,000 but was not sold as of year - end.
The Manufacturing Overhead account had an unadjusted credit balance of $24,000 and was adjusted to zero at year - end. What was the final balance in the Cost of Goods Sold account?
a. $302,000 credit balance
b. $302,000 debit balance
c. $350,000 debit balance
d. $350,000 credit balance
Answer:
$317,000 debit balance
Explanation :
Frederic Manufacturing final balance in the Cost of Goods Sold account:
Cost of Job C 62 158,000
Cost of Job C 63 183,000
Less manufacturing overhead over allocated to production (24,000)
Cost of goods sold 317,000
158,000+183,000
=341,000-24,000
=$317,000
Aborkian Co. is forecasting sales of 75,000 units of product for November. To make one unit of finished product, seven pounds of raw materials are required. Actual beginning and desired ending inventories of raw materials and finished goods are:
Questions
Aborkian Co. is forecasting sales of 75,000 units of product for November. To make one unit of finished product, seven pounds of raw materials are required. Actual beginning and desired ending inventories of raw materials and finished goods are:
November 1 November 30
(Actual) (Desired)
Raw materials (pounds) 91,400 86,400
Finished goods 8,500 9,600
(a.) Calculate the number of units of product to be produced during November.
(b.) Calculate the number of pounds of raw materials to be purchased during November
Answer:
Number of units to be produced= 76,100 units
Raw materials to be purchased= 527,700 pounds
Explanation:
Units to be produced
Number of units to be produced = sales budget + closing inventory - opening inventory
= 75,000 + 9,600 - 8,500 = 76,100 units
Number of units to be produced= 76,100 units
Raw materials purchase budget
Raw materials to be purchased = Raw materials to be used + closing inventory of raw materials - opening inventory of raw materials
Raw material usage = production units × standard pounds per unit
= 76,100× 7 =532700 pounds
Raw materials to be purchased = 532,700 +86,400 - 91,400=527700
Raw materials to be purchased= 527,700 pounds
Exercise 10-4 Scrap or rework LO P2 A company with excess capacity must decide between scrapping or reworking units that do not pass inspection. The company has 22,000 defective units that cost $6 per unit to manufacture. The units can be a) sold as is for $2.00 each, or b) reworked for $4.50 each and then sold for the full price of $8.50 each. What is the incremental income from selling the units as scrap and reworking and selling the units
Answer:
Sales as scrap $44,000
Rework $88,000
Explanation:
Sale as Scrap Rework
Sales of scrap units(22,000×$2.00)
44,000
Sales of Rework units (22,000×$8.50) 187,000
Costs to Rework units(22,000×$4.50) 99,000
Incremental income/loss
44,000 88,000
The company should should REWORK because it has incremental income of 88,000(187,000-99,000) which is higher than that of SCRAP $44,000
"A registered representative makes it a regular practice to check in with his actively trading customers at least once a week and with his inactively trading customers at least once a month. Some of his less active customers are senior citizens who are getting on in years. He calls one of these elderly clients as part of his regular monthly contacting and finds that the customer does not recognize who he is and appears to be disoriented. The FIRST thing the representative should do is:"
Answer:
contact the firm's compliance department
Explanation:
the first thing the representative should do is to contact the firms compliance department for guidance on how to handle the situation.
The SEC and the FNRA are bodies that have concerns about investors who are old/aging. These people may easily fall prey to scams due to their failing mental capacities. To protect someone like this firms have the responsibility of training their employees to identify diminished mental capacity. FINRA requires that firms have internal process to permit representatives to seek advise from others on what step they are to take.
Coal Train Mines paid $435000 for the right to extract ore from a 225000-ton mineral deposit. In addition to the purchase price, Coal Train Mines also paid a $115 filing fee to the country recorder, a $2000 license fee to the state of Colorado, and $69135 for a geologic survey. Because the company purchased the rights to the minerals only, it expects this mineral rights asset to have a residual value of zero when it is fully depleted. During the first year of production, Coal Train Mines removed 48000 tons of ore, of which it sold 45000 tons.
Requirement:
Make journal entries to record (a) purchase of the mineral rights, (b) payment of fees and other costs, (c) depletion for first-year production, and (d) sales of ore.
A) Record the purchase of the mineral rights.
Journal
Date Accounts Debit Credit
B) Record the payment of fees and other costs.
Journal
Date Accounts Debit Credit
C) Record the depletion for first-year production.
Journal
Date Accounts Debit Credit
D) Record the sales of ore.
Journal
Date Accounts Debit Credit
Answer:
Coal Train Mines
Journal Entries:
A) Record the purchase of the mineral rights.
Date Accounts Debit Credit
Mineral Rights $435,000
Cash Account $435,000
To record the purchase of the mineral rights.
B) Record the payment of fees and other costs.
Journal
Date Accounts Debit Credit
Fees and other costs $71,250
Cash Account $71,250
To record $115 filing fee, $2,000 license fee, and $69,135 for geological survey.
C) Record the depletion for first-year production.
Journal
Date Accounts Debit Credit
Dec 31 Depletion Expense $101,250
Accumulated Depletion $101,250
To record the depletion charge for the year.
D) Record the sales of ore.
Journal
Date Accounts Debit Credit
Cash $
Sales Revenue $
To record the sale of 45,000 tons of ore
Explanation:
a) Depletion is an accrual accounting technique. It allocates the cost of extracting natural resources such as timber, minerals, and oil from the earth by using the percentage of extracted resources over the total resources. Depletion is a non-cash expense, like depreciation and amortization, that lowers the cost value of an asset incrementally through scheduled charges to the income statement. While depletion is for natural resources, depreciation is for property, plant, and equipment, while amortization is used for intangible assets.
b) The total cost to be capitalized = $506,250 ($435,000 + $71,250)
c) Depletion charge for the first year = $101,250 (45,000/225,000 * $506,250). Depletion per unit is $2.25
d) The selling price was not indicated, so no sales value was calculated.
e) Ending Inventory = $6,750 (48,000 - 45,000 * $2.25)
Janus Coat Company purchased a delivery truck on June 1 for $30,000, paying $10,000 cash and signing a 6%, 2-month note for the remaining balance. The truck is expected to depreciate $6,000 each year. Janus Coat Company prepares monthly financial statements. Prepare the general journal entry to record the acquisition of the delivery truck on June 1st. (Credit account titles are automatically indented when the amount is entered. Do not indent manually.)
Answer:
Dr delivery truck $30,000
Cr cash $10,000
Cr notes payable $20,000
Explanation:
The acquisition of the truck was consummated partly in cash of $10,000 and notes payable was signed for the remainder of $20,000,hence the appropriate would be to debit delivery truck account with the total cost of $30,000 while the cash account and notes payable are credited with $10,000 and $20,000 respectively.
The interest would be due and recognized later on,not when the truck is freshly acquired.
Exercise 13-12 Ivanhoe Company includes one coupon in each box of soap powder that it packs, and 10 coupons are redeemable for a premium (a kitchen utensil). In 2020, Ivanhoe Company purchased 9,000 premiums at 85 cents each and sold 109,000 boxes of soap powder at $3.10 per box; 48,000 coupons were presented for redemption in 2020. It is estimated that 60% of the coupons will eventually be presented for redemption. Prepare all the entries that would be made relative to sales of soap powder and to the premium plan in 2020. (If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually.) Account Titles and Explanation Debit Credit (To record the premium inventory) (To record the sales) (To record the expense associated with the sale) (To record the premium liability)
Answer: Please see below
Explanation:
1) Journal to record the purchase of 9000 premiums at 85 cents
Year Account Title and explanations Debit Credit
2020 n Inventory of premium $7,650
Cash $7,650
working
Purchase price= Number of units purchased x price per unit
9000 x 0.85= $7,650
2) Journal to record the sale of 109,000 boxes at $3.10
Year Account Title and explanations Debit Credit
2020 Cash $337,900
Sales Revenue $337,900
working
Sale price= Number of units sold x price sold per unit
109,000 boxes x $3.10= $337,900
3) Journal to record the premium expenses
Year Account Title and explanations Debit Credit
2020 Premium Expenses $4,080
Inventory on premium $4080
working
Premium expenses= coupons presented for redemption / number of coupons to redeem premium x price per premium
= 48,000/10 x 0.85 = $4,080
4) Journal to record the premium liability
year Account Title and explanations Debit Credit
2020 Premium Expenses $1,479
Premium liability $1,479
working
Estimated redemption on number of boxes sold = number of boxes sold x probability of redemption= 109,000 x 60 %= $65,400
premium liability of coupons = estimated redemption of premiums - number of coupons already redeemed
= 65,400- 48,000 = 17,400
Cost of premium liabilty = premium liability of coupons /number of coupons per premium x rate per premium
17,400/10 x 0.85 ==$1,479
The graph shows unemployment rates in the United States in recent years.
Which statement is the most accurate explanation of the information on the graph?
* Unemployment rates rise and fall in predictable patterns.
* Unemployment will never again be as high as it was in 2010.
* The United States suffered an economic downturn starting in 2009.
*The United States does not have to worry about unemployment.
The correct answer is C. The United States suffered an economic downturn starting in 2009.
Explanation:
The graph shows the percentage of unemployment in the U.S. from 2006 to 2012. In this, you can see the unemployment rate was between 4% and 5% during 2006, 2007 and 2008; however, after this year the rate suddenly increased. Indeed in 2009, the rate was 6% and in 2010 it was 10%, which is evidently higher than in previous years. This situation suggests there was an economic recession or downturn that began in 2009 and continued during the following years, this explains why the number of unemployed people increased as an economical recession usually leads to fewer jobs. Thus, the most accurate statement is "The United States suffered an economic downturn starting in 2009".
Franklin Corporation issues $88,000, 10%, five-year bonds on January 1 for $92,000. Interest is paid semiannually on January 1 and July 1. If Franklin uses the straight-line method of amortization of bond premium, the amount of bond interest expense to be recognized on July 1 is
Answer:
$4,000
Explanation:
The computation of interest expense to be recognized on July 1 is shown below:-
Here the interest is paid in semi-annually,
so, the interest rate per period= 10% ÷ 2 = 5%
and the number of periods = 5 × 2 = 10
Bond premium = Five year bonds - Issued amount
= $92,000 - $88,000
= $4,000
Bond premium amortization per period = Bond premium ÷ Number of periods
= $4,000 ÷ 10
= $400
Interest expense to be recognized on July 1 = Issued amount × Interest rate per period) - Bond premium amortization per period
= ($88,000 × 5%) - $400
= $4,000
Sam and Amanda moved from Hawaii to Iowa. Their grocery budget has remained at $100 per month, but the price of their groceries has dramatically gone down due to cost of living! They used to pay $10 for a dozen organic eggs (let Q1 represent the number of dozens of eggs) but now they pay $5. For frozen pizza (Q2) they paid $15 but now they are paying $10. What is Sam and Amanda's new budget constraint?
Answer:
A budget constraint is the amount of goods and service that a person or firm can purchase given their income.
In this case, the budget constraint of Sam and Amanda is determined by their income: that is to say, their monthly grocery budget, which is $100 per month.
Because a dozen organic egg costs $5, and a frozen pizza costs $10, if we suppose that Sam Amanda will spend half their income on each item, their budget constraint will allow them to buy the following amounts:
$50 / $5 = 10 dozen organic eggs
$50 / $10 = 5 frozen pizzas.
The following information has been gathered for the GHI Manufacturing Company for its fiscal year ending December 31: Actual manufacturing overhead costs $ 212,500 Actual direct labor hours 54,900 Actual direct labor costs $ 445,000 Estimated manufacturing overhead costs $ 210,000 Estimated direct labor $ 434,000 Estimated direct labor hours 56,000 What is the predetermined manufacturing overhead rate per direct labor hour?
Answer:
The predetermined manufacturing overhead rate per direct labor hour is $3.75 per direct labor hour
Explanation:
Actual manufacturing overhead costs = $ 212,500
Actual direct labor hours = 54,900 hours
Actual direct labor costs = $ 445,000
Estimated manufacturing overhead costs = $210,000
Estimated direct labor hours = 56,000 hours
Predetermined Overhead Rate = Estimated manufacturing overhead costs ÷ Estimated direct labor hours
Predetermined Overhead Rate = $210,000 ÷ 56,000
Predetermined Overhead Rate = $3.75 per direct labor hour
Suppose that from a new checkable deposit, First National Bank holds 4 million dollars in vault cash, 16 million dollars on deposit with the Federal Reserve, and 18 million dollars in excess reserves. Given this information, we can say First National Bank has ________ million dollars in required reserves.
Answer:
We can say First National Bank has 2 million dollars in required reserves
Explanation:
In order to calculate the required reserves we would have to make the following calculation:
Required reserves = Total reserves - excess reserves = vault cash + deposits with Federal Reserve - excess reserves
vault cash= 4 million dollars
deposits with Federal Reserve= 16 million dollars
excess reserves=18 million dollars
Therefore, Required reserves=4 million dollars+ 16 million dollars-=18 million dollars
Required reserves= 2 million dollars
We can say First National Bank has 2 million dollars in required reserves
1. A business incurs the following costs:
• Labor: $105/unit
• Materials: $35/unit
• Rent: $400,000/month
Assume the firm produces 1 million units per month.
The total variable cost, per month, is_______million. The total fixed cost, per month, is $______million. The total cost is $_______million.
2. A local coffee shop is hoping to make use of its excess restaurant capacity in the evenings by experimenting with selling beer and wine. It speculates that the only additional costs are hiring more of the same sort of workers to cover the additional hours and costs of the new line of beverages. Which of the following are examples of hidden costs that are likely to emerge from this decision?
A. Training costs for new and existing employees on beer and wine serving procedures.
B. Increased insurance premiums due to the presence of alcohol at the coffee shop.
C. The cost of maintaining the machines that make the coffee.
D. The monthly rent paid for the building.
E. The forgone revenues that could be earned by renting the coffee shop out for other events during evening hours.
3. Students doing poorly in courses often consider dropping the courses. Many universities will offer a refund if the student drops a course before a deadline.
A. True
B. False
Prior to the deadline, students should not take this refund option into account when deciding to drop the course.
A. True
B. False
Long-Term Solvency Analysis The following information was taken from Station Company's balance sheet: Fixed assets (net) $940,500 Long-term liabilities 209,000 Total liabilities 658,350 Total stockholders' equity 731,500 Determine the company's (a) ratio of fixed assets to long-term liabilities and (b) ratio of liabilities to stockholders' equity. If required, round your answers to one decimal place. a. Ratio of fixed assets to long-term liabilities b. Ratio of liabilities to stockholders' equity
Answer:
a. Fixed Assets to long liability ratio is 4.5 times
b. Liabilities to stockholders equity is 0.9 times
Explanation:
(a)
Fixed Assets to long liability determines that how much the fixed asset of the company is as compared to long term liabilities.
Fixed Assets to long liability = Fixed Asset / Long Term Liabilities
Fixed Assets to long liability = $940,500 / $209,000 = 4.5 times
(b)
Ratio of Liabilities to stockholders equity determines the ratio of all the liabilities of the company as compared to stockholders equity.
Liabilities to stockholders equity = Liabilities / stockholders equity
Liabilities to stockholders equity = 658,350 / 731,500 = 0.9 times
Blossom Company sells office equipment on July 31, 2022, for $23,730 cash. The office equipment originally cost $79,700 and as of January 1, 2022, had accumulated depreciation of $36,130. Depreciation for the first 7 months of 2022 is $4,970.
Prepare the journal entries to (a) update depreciation to July 31, 2014, and (b) record the sale of the equipment. (Credit account titles are automatically indented when amount is entered. Do not indent manually.)
Answer:
a. The entries are:
Debit Depreciation expenses for $4,920;
Credit Accumulated depreciation for $4,920.
b. The entries are:
Debit Cash for $23,730
Debit Accumulated depreciation for $41,100
Debit Loss on disposal of equipment for $14,870
Credit Equipment for $79,700
Explanation:
(a) Prepare the journal entries to update depreciation to July 31, 2022.
Note: the correct date to update to is July 31, 2022 not the wrongly stated July 31, 2014 in the question.
The journal entries will look as as follows:
Date Particulars Dr ($) Cr ($)
July 31 Depreciation expenses 4,920
Accumulated depreciation 4,920
To record the updating of depreciation to July 31, 2022.
(a) Prepare the journal entries to record the sale of the equipment.
To prepare this, we need to first calculate the gain or loss on disposal as follows:
Accumulated depreciation till date = $36,130 + $4,970 = $41,100
Net book value = Equipment cost - Accumulated depreciation till date = $79,700 - $41,100 = $38,600
Gain or loss on disposal = Sales proceed - Net book value = $23,730 - $38,600 = $14,870 loss
The journal entries will be as follows:
Date Particulars Dr ($) Cr ($)
July 31 Cash 23,730
Accumulated depreciation 41,100
Loss on disposal of equipment 14,870
Equipment 79,700
(To record disposal of equipment.)
To recruit new executive and professional, company should mainly depend on_____ *
Answer:
Body physic, skills, and mental capacity.
Power Corporation acquired 100 percent ownership of Scrub Company on February 12, 20X9. At the date of acquisition, Scrub Company reported assets and liabilities with book values of $436,000 and $171,000, respectively, common stock outstanding of $80,000, and retained earnings of $185,000. The book values and fair values of Scrub’s assets and liabilities were identical except for land, which had increased in value by $21,000, and inventories, which had decreased by $6,000.
Required:
Prepare the following consolidation entries required to prepare a consolidated balance sheet immediately after the business combination assuming Power acquired its ownership of Scrub for $266,000.
Answer:
Journal Entry at Acquisition Date:
Debits :
Assets $409,000
Goodwill $28,000
Credit :
Liabilities $171,000
Investment in Subsidiary : Scrub Company $266,000
Explanation:
Power Corporation now has control over Scrub Company after acquiring 100% ownership of Scrub Company. Power Corporation is therefore required to consolidated Financial Statements in terms of IFRS 3.
Assets and Liabilities are Consolidated at their Acquisition Date Fair Values Not Book Values.
The Excess of the Purchase Consideration over the Net Assets Identified at Fair Value is called Goodwill.
Journal Entry at Acquisition Date:
Debits :
Assets ($436,000 + $21,000 - $6,000) $409,000
Goodwill (Balancing figure) $28,000
Credit :
Investment in Subsidiary : Scrub Company $266,000
Kilt Company had the following information for the year: Direct materials used $ 119,300 Direct labor incurred (5,750 hours) $ 159,700 Actual manufacturing overhead incurred $ 167,500 Kilt Company used a predetermined overhead rate of $41 per direct labor hour for the year and estimated that direct labor hours would total 5,750 hours. Assume the only inventory balance is an ending Work in Process balance of $17,500. How much overhead was applied during the year?
Answer:17
Explanation:
g Which of the following statements is correct? Multiple Choice If supply declines and demand remains constant, equilibrium price will fall. If demand increases and supply decreases, equilibrium price will fall. If demand decreases and supply increases, equilibrium price will rise. If supply increases and demand decreases, equilibrium price will fall.
Answer:
If supply increases and demand decreases, equilibrium price will fall.
Explanation:
Equilibrium price is the price at which the price the price a buyer is willing to pay for a good is equal to the price the seller wishes to sell. On a demand-supply graph, it is the point of intersection of demand price and supply price. The quantity at which this happens is the equilibrium quantity.
A decrease in demand will result in the shift of the demand curve inward to the left, at the same time, an increase in supply will result in a shift of the supply curve outward to the right. The resultant effect on the demand-supply curve is decrease in the equilibrium price.
"In January, 20XX a customer buys 100 shares of ABC stock at $30 per share and pays a $2 commission per share. The customer receives $1 in cash dividends during the year. The customer's cost basis in the stock is:"
Answer:
$32 per share
Explanation:
Calculation for ABC Stock customer's cost basis
In a situation where the stock is been purchased, any commission paid out is not deductible because it is part of the cost basis of the shares.
Therefore , the cost basis for tax purposes will be:
$30 per share + $2 commission
= $32 per share
Hence the $1 dividend received will be included in taxable income for this year, and would not be part of the stock's cost basis.
Two features of internal control are presented in the following sections. Each is followed by a list of four irregularities that occurred in processing data. Identify the one irregularity from each list that would be discovered or prevented by the feature of internal control described.
a. The sum of the balances of the accounts in the customer's ledger is compared at the end of each month with the balance of the accounts receivable account in the general ledger by a person who has no responsibility for maintaining either the general ledger or the customers ledger.
Five hours of services were rendered but the customer was only billed for four hours.
A cash receipt of $750 was recorded correctly in the accounts receivable controlling account but was posted to the customer's ledger as $75.
A bill for services rendered to Cole Co. was erroneously posted to the account of Coleman Co. in the customer's ledger.
No entry was made in the accounting records for services rendered to a customer.
The irregularity that would be discovered or prevented by the feature of internal control described is: ________
b. Both cash and credit charges for services rendered are recorded on prenumbered invoices. At the end of the day, all invoices are accounted for before the duplicate copies of the invoices are routed to the Accounting Department for entry into the accounts and the cash is sent to the Cashier's Department for deposit.
Some charge customers complained that the monthly statements of account did not add all amounts correctly.
Some clerks used incorrect hourly rates in preparing invoices.
Some clerks destroyed duplicate copies of cash invoices and misappropriated the cash.
Some charge customers complained that the monthly statement of account did not indicate credits for payments made.
The irregularity that would be discovered or prevented by the feature of internal control described is: _____________.
Answer: a. A cash receipt of $750 was recorded correctly in the accounts receivable controlling account but was posted to the customer's ledger as $75.
b. Some clerks destroyed duplicate copies of cash invoices and misappropriated the cash.
Explanation:
a. When the person (who not handled this account before) is crosschecking the balance on accounts in the Customers Ledger against the accounts receivable account in the general ledger, they will discover that $750 was recorded correctly in the Accounts Receivables Control Accounts in the General ledger but was recorded at only $75 in the Customers Ledger.
b. The sales clerks would have destroyed only duplicates whilst the originals were still there. Worse still for them is that these duplicates have been accounted for with the Originals. This way when they destroy the duplicates, the company can still confirm with the originals that that cash was indeed paid.
Suppose Ms. Smith sells her 2018 Honda Fit next year. The original cost of the vehicle was $10,000. During the time she has owned the car she has taken $3,000 dollars of deprecation on it. Ms. Williams sells the car for $9,000. What is resul
The question is incomplete. Here is the complete question
Suppose Ms. Smith sells her 2018 Honda Fit next year. The original cost of the
vehicle was $10,000. During the time she has owned the car she has taken $3,000 dollars
of deprecation on it. Ms. Williams sells the car for $9,000. What is result of the transaction?
A. An ordinary loss of $1,000
B. Long-term capital gain of $2,000
C. An ordinary gain of $2,000
D. An ordinary gain of $6,000
Answer:
An ordinary gain of $2,000
Explanation:
Ms. Smith wants to sell her 2018 Honda fit car next year
The original cost of the car is $10,000
She has incurred $3,000 worth of depreciation on it during the period that she has used the car
She sells the car for $9,000
Her transaction rate can be calculated as follows:
Net value of the car= $10,000-$3,000
= $7,000
Amount of gain realized while selling the car= $9,000-$7,000
= $2,000
Hence Ms. Smith has an ordinary gain of $2,000 after selling her car
Suppose that a worker in Radioland can produce either 4 radios or 1 television per year, and a worker in Teeveeland can produce either 2 radios or 4 televisions per year. Each nation has 100 workers. Also suppose that each country completely specializes in producing the good in which it has a comparative advantage. If Radioland trades 100 radios to Teeveeland in exchange for 100 televisions each year, then each country's maximum consumption of new radios and televisions per year will be
Answer:
300 radios, 100 televisions in Radioland and 100 radios, 300 televisions in Teeveeland
Explanation:
This question has been answered by in two parts
1. Radioland
Each worker can produce either 4 radios or 1 television
The country has a total of 100 workers
Radioland specializes in radio production because it has comparative advantage in this good, therefore Radioland will only produce radios.
Therefore, the total number of radios it will produce per year
= 4 radios per worker * 100 workers
= 400 radios.
If Radioland trades 100 radios to Teeveeland in exchange for 100 televisions each year, Radioland will end up with
= 400 radios - 100 radios (to Teeveeland) + 100 televisions (from Teeveeland)
= 300 radios + 100 televisions in Radioland.
2. Teeveeland
Each worker can produce either 2 radios or 4 televisions
The country has a total of 100 workers
Teeveeland specializes in television production because it has comparative advantage in this good, therefore teeveeland will only produce television.
Therefore, the total number of televisions it will produce per year
= 4 televisions per worker * 100 workers
= 400 televisions.
If Teeveeland trades 100 televisions to Radioland in exchange for 100 radios each year, Teeveeland will end up with
= 400 televisions - 100 televisions (to Radioland) + 100 radios (from Radioland)
= 300 televisions + 100 radios in Teeveeland.
The Japan Airlines CEO's behavior has been unordinary according to usual industry practices. He doesn't have a corporate jet, as many CEO's do. He also knocked down his office walls and takes a bus to work. What device is Haruka Nishimatsu trying to exemplify and mold
Answer:
Organizational culture
Explanation:
Remember, the CEO holds a leadership role in which he could influence the culture of the organization.
Therefore, by removing the lavish lifestyle common among other CEOs from himself, Japan Airlines CEO is acting as a role model for other employees, so as to mould an organizational culture where workers avoid excessive spending of company money on personal nonessential things.
Joe and Rich are both considering investing in a project that costs $25,500 and is expected to produce cash inflows of $15,800 in Year 1 and $15,300 in Year 2. Joe has a required return of 8.5 percent but Rich demands a return of 12.5 percent. Who, if either, should accept this project?
Answer:
Both Joe and Rich should accept the project.
Explanation:
The investment amount for project = $25500
First year cash inflow (C1) = $15800
Second year cash inflow (C2) = $15300
Interest rate for Joe (r1) = 8.5 percent or 0.085
Interest rate for rich (r2) = 12.5 percent or 0.125
Now we have to find the present value of future inflow and then subtract the initial investment amount.
Net present value in the case of Joe:
Net present value = Present value of cash inflows – initial investment
[tex]\text{ Net present value } = \frac{C1}{(1+ r1)^{n}} + \frac{C2}{(1+ r2)^{n}} – 25500 \\= \frac{15800}{(1+ 0.085)^{1}} + \frac{15300}{(1+ 0.085)^{2}} – 25500 \\= 2058.88 \\\text{ Net present value in the case of rich.} \\\text{ Net present value } = \frac{C1}{(1+ r1)^{n}} + \frac{C2}{(1+ r2)^{n}} – 25500 \\= \frac{15800}{(1+ 0.125)^{1}} + \frac{15300}{(1+ 0.125)^{2}} – 25500 \\= 633.33[/tex]
Since the net present value of Joe and Rich is positive so both project should be considered.
The Donut Stop acquired equipment for $23,000. The company uses straight-line depreciation and estimates a residual value of $3,400 and a four-year service life. At the end of the second year, the company estimates that the equipment will be useful for four additional years, for a total service life of six years rather than the original four. At the same time, the company also changed the estimated residual value to $2,000 from the original estimate of $3,400.Required:Calculate how much The Donut Stop should record each year for depreciation in years 3 to 6.Cost of the equipment:Less: accumulated depreciation (year 1 & 2):Book value, end of year 2:Less: new residual value:New depreciable cost:Remaining service life:Annual depreciation in years 3 to 6
Answer:
$2,400
Explanation:
Cost of equipment = $23,000
Residual value = $3,400
Useful life = 4 year
Formula for Annual Depreciation will be:
Annual depreciation = (Cost price - Residual value)/Useful life
Hence,
= (23,000 - 3,400)/4
= 19,600/4
= $4,900
The Accumulated depreciation for year 1 and year 2 will be
= 4,900 x 2
= $9,800
Cost of equipment 23,000
Less : Accumulated depreciation for year 1 and year 2 (9,800)
Book value, end of year 2 13,200
Less : Residual value (2,000)
New depreciable cost 11,200
Remaining service life 4
Annual depreciation in year 3 to 6 (11,200/4) $2,400