Answer:
Shipway Company
A. Journal entries under the direct write-off method:
Apr. 13. Debit Bad Debts Expense $2,330
Credit Accounts receivable (Dean Sheppard) $2,330
To write-off an uncollectible account.
May 15. Debit Cash $1,170
Debit Bad Debts Expense $1,930
Credit Accounts receivable (Dan Pyle) $3,100
To record receipt of cash and write-off of the uncollectible balance.
July 27. Debit Accounts receivable $2,330
Credit Bad Debts Expense $2,330
To reverse the write-off on April 13.
Debit Cash $2,330
Credit Accounts receivable (Dean Sheppard) $2,330
To record the receipt of a previously written-off uncollectible.
Dec. 31 Debit Bad Debts Expense $13,335
Credit Accounts receivable $13,335
To write-off some uncollectible accounts.
B. Journal entries under the allowance method:
Apr. 13. Debit Allowance for Uncollectible Accounts $2,330
Credit Accounts receivable (Dean Sheppard) $2,330
To write an uncollectible account.
May 15. Debit Cash $1,170
Debit Allowance for Uncollectible Accounts $1,930
Credit Accounts receivable (Dan Pyle) $3,100
To record the receipt of cash and write-off the uncollectible portion.
July 27. Debit Accounts receivable $2,330
Credit Allowance for Uncollectible Accounts $2,330
To reverse a previously written-off account.
Debit Cash $2,330
Credit Accounts receivable (Dean Sheppard) $2,330
To record the receipt of a previously written-off account.
Dec. 31 Debit Allowance for Uncollectible Accounts $13,335
Credit Accounts receivable $13,335
To write-off some uncollectible accounts.
C. Shipway Company's net income would have been higher by $27,900 under the direct write-off method than under the allowance method.
Explanation:
a) Data and Transaction Analysis:
Direct write-off method:
Apr. 13. Bad Debts Expense $2,330 Accounts receivable (Dean Sheppard) $2,330.
May 15. Cash $1,170 Bad Debts Expense $1,930 Accounts receivable (Dan Pyle) $3,100
July 27. Cash $2,330 Accounts receivable (Dean Sheppard)
Accounts receivable $2,330 Bad Debts Expense $2,330
Dec. 31 Bad Debts Expense $13,335 Accounts receivable $13,335
Total bad debts expense = $15,265
The uncollectible accounts:
Paul Chapman $2,280
Duane DeRosa 3,535
Teresa Galloway 4,625
Ernie Klatt 1,095
Marty Richey 1,800
Total amount = $13,335
Allowance Method:
Apr. 13. Allowance for Uncollectible Accounts $2,330 Accounts receivable (Dean Sheppard) $2,330.
May 15. Cash $1,170 Allowance for Uncollectible Accounts $1,930 Accounts receivable (Dan Pyle) $3,100
July 27. Cash $2,330 Accounts receivable (Dean Sheppard)
Accounts receivable $2,330 Allowance for Uncollectible Accounts $2,330
Dec. 31 Allowance for Uncollectible Accounts $13,335 Accounts receivable $13,335
Ending balance of Allowance for Uncollectible Accounts $27,900
Credit Sales during the year = $3,720,000
Expected Uncollectible = 0.75% of $3,720,000 = $27,900
Allowance for Uncollectible Accounts
Date Account Titles Debit Credit
Apr. 13. Accounts receivable
(Dean Sheppard) $2,330
May 15. Accounts receivable (Dan Pyle) 1,930
July 27. Accounts receivable $2,330
Dec. 31 Accounts receivable 13,335
Dec. 31 Ending balance 27,900
Dec. 31 Bad Debts Expense 43,165
Total $45,495 $45,495
Difference between the direct write-off method and the allowance method = expenses higher by $27,900 under the allowance method.
Total bad debts expense under allowance = $43,165
Total bad debts expense under direct write-off $15,265
Difference = $27,900
what is a market failure
Bovine Corporation has two divisions: televisions and mobile phones. The mobile phone division has a contribution margin of $600,000. The company's common fixed costs and total traceable fixed costs are $100,000 and $500,000 respectively. Assuming the traceable fixed costs of the television division are $300,000, what is the segment margin of the mobile phone division
Answer:
Segment margin= $300,000
Explanation:
Giving the following formula:
Mobile phone:
Contribution margin= $600,000
Traceable fixed cost= $100,000
Common fixed costs= $500,000
First, we need to calculate the traceable fixed cost to mobile phone:
Traceable fixed cost= 500,000 - 300,000= $200,000
Now, the segment margin of mobile phone:
Segment margin= 600,000 - 100,000 - 200,000
Segment margin= $300,000
The following labor standards have been established for a particular product: Standard labor hours per unit of output 4.3 hours Standard labor rate $ 17.80 per hour The following data pertain to operations concerning the product for the last month: Actual hours worked 6,300 hours Actual total labor cost $ 112,770 Actual output 1,400 units Required: a. What is the labor rate variance for the month
Answer:
See below
Explanation:
With regards to the above, labor rate variance is computed as;
Direct labor rate variance = (Standard rate - Actual rate) × Actual quantity
Given that;
Standard labor rate per hour = $17.8
Actual hours worked = 6,300
Actual total labor cost = $112,770
Actual rate = $112,770/6,300 = $17.9
Therefore,
Direct labor rate variance = ($17.8 - $17.9) × 6,300
= $630 unfavourable
After successfully completing your corporate finance class, you feel the next challenge ahead is to serve on the board of directors of Schenkel Enterprises. Unfortunately, you will be the only individual voting for you. a.If the company has 430,000 shares outstanding and the stock currently sells for $45, how much will it cost you to buy a seat if the company uses straight voting
Answer:
$9,675,045
Explanation:
In order to win the election of the board of directors, voting powers should have half a of the voting power and one vote.
Calculating the cost incurred to buy the voting power:
Total cost = [Number of shares / 2 + 1] * Stock price
Total cost = [430,000/2 + 1] * $45
Total cost = 215,001 * $45
Total cost = $9,675,045
So, it will cost one $9,675,045 to buy a seat if the company uses straight voting.
Drew Chow has an annual salary of $110,250. He is married with no dependents. The married exemption for his state is $4,000. He pays $2.656.25 in state income taxes. What is the state income tax rate?
Answer: 2.5%
Explanation:
Drew salary is $110,250 and he gets a married exception of $4,000.
This reduces the taxable income to:
= 110,250 - 4,000
= $106,250
He pays $2,656.25 in taxes on that taxable income so the income tax rate can be found as:
106,250 * tax rate = 2,656.25
Tax rate = 2,656.25 / 106,250
= 2.5%
After a major earthquake, the San Francisco Opera Company is offering zero coupon bonds to fund the needed structural repairs to its historic building. Buster Norton is considering the purchase of several of these bonds. The bonds have a face value of $2,000 and are scheduled to mature in 10 years. Similar bonds in the market have an annual YTM of 12 percent. If Mr. Norton purchases three of these bonds today, how much money will he receive 10 years from today at maturity
Answer:
Buster Norton and the Bonds of San Francisco Opera Company
If Mr. Norton purchases three of these bonds today, in 10 years from today at maturity, he will receive:
= $6,000.
Explanation:
a) Data and Calculations:
Face value of each zero coupon bond purchased = $2,000
Number of bonds purchased by Norton = 3
Value of bond investments at maturity = $6,000 ($2,000 * 3)
Maturity period of the San Francisco Opera Company bonds = 10 years
Annual Yield to Maturity of similar bonds in the market = 12%
From an online financial calculator:
Present value of bonds = $1,932 (with each as $644 ($1,932/3))
N (# of periods) 10
I/Y (Interest per year) 12
PMT (Periodic Payment) 0
FV (Future Value) -6000
Results
PV = $1,931.84
Total Interest $4,068.16
Forsyth Company manufactures one product, it does not maintain any beginning or ending inventories, and its uses a standard cost system. During the year, the company produced and sold 10,000 units at a price of $135 per unit. Its standard cost per unit produced is $105 and its selling and administrative expenses totaled $235,000. Forsyth does not have any variable manufacturing overhead costs and it recorded the following variances during the year:
Materials price variance . . . . . . . . . . . . . . . . . . . . . . . . . . . . $6,500 F
Materials quantity variance . . . . . . . . . . . . . . . . . . . . . . . . $10,200 U
Labor rate variance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $3,500 U
Labor efficiency variance . . . . . . . . . . . . . . . . . . . . . . . . . . $4,400 F
Fixed overhead budget variance . . . . . . . . . . . . . . . . . . . . . $2,500 F
Fixed overhead volume variance . . . . . . . . . . . . . . . . . . . . $12,000 F
Required:
1. When Forsyth closes its standard cost variances, the cost of goods sold will increase (decrease) by how much?
2. Prepare an income statement for the year.
Answer:
See below
Explanation:
1. Computation of cost of goods sold
Particulars Amount
Materials Price Variance
$6,500F
Materials Quantity Variance
$10,200U
Labor Rate Variance
$3,500U
Labour Efficiency Variance
$4,400F
Fixed overhead budget variance $2,500F
Fixed overhead volume variance $12,000F
Cost of goods sold
$11,700
Cost of goods sold would increase by $11,700
2. Income statement for the year
Particulars
Sales
($135 × 10,000) $1,350,000
Less:
Cost of goods sold
Cost of goods sold at standard
($105 × 10,000)
$1,050,000
Add:
Variance adjustment
$11,700
Cost of goods sold
$1,061,700
Gross profit
$288,300
Less:
Selling and administrative expenses
($235,000)
Net operating income
$53,300
Aqua Company produces two products−Alpha and Beta. Alpha has a high market share and is produced in bulk. Production of Beta is based on customer orders and is custom designed. Also, 55% of Beta's cost is shared between design and setup costs, while Alpha's major portions of costs are direct costs. Alpha is using a single cost pool to allocate indirect costs. Which of the following statements is true of Aqua?
A. Aqua will overcost Beta's direct costs as it is using a single cost pool to allocate indirect costs.
B. Aqua will undercost Alpha's indirect costs because alpha has high direct costs.
C. Aqua will overcost Alpha's indirect costs as it is using a single cost pool to allocate indirect costs.
D. Aqua will overcost Beta's indirect costs because beta has high indirect costs.
Answer: C. Aqua will overcost Alpha's indirect costs as it is using a single cost pool to allocate indirect costs.
Explanation:
Aqua is using a single cost pool to allocate indirect costs which means that the indirect costs of both Alpha and Beta will be included in this cost pool.
This will overcost Alpha because Alpha only has minor portions of indirect costs while Beta has significant indirect costs. Putting both products together means that a lot of indirect costs assigned to Alpha will be from Beta which would mean that Alpha is overcosted.
Dobler Company uses a periodic inventory system. Details for the inventory account for the month of January 2022 are as follows: Units Per unit price Total Balance, 1/1/2022 300 $5 $1500 Purchase, 1/15/2022 150 ..5.3 795 Purchase, 1/28/2022 150 ..5.5 825 An end of the month (1/31/2022) inventory showed that 240 units were on hand. If the company uses LIFO, what is the value of the ending inventory
Answer:
$2,405
Explanation:
LIFO assumes that the units to arrive last will be sold first. Therefore the value of ending inventory is based on the earlier (old) prices.
Ending Inventory = 240 units x $5 = $2,405
If, at the present output level, marginal revenue is $50 and marginal cost is $35, the purely competitive firm Group of answer choices should increase output to maximize its profit or minimize its loss. should reduce output to maximize its profit or minimize its loss. should increase its price to maximize its profit or minimize its loss. should stay at its current output to maximize its profit or minimize its loss.
Answer: should reduce output to maximize its profit or minimize its loss
Explanation:
Since we are given the information that at the present output level, the marginal revenue is $50 and the marginal cost is $35, this implies that the marginal revenue is more than the marginal cost, which simply means that there'll be a positive marginal profit.
In such scenario, therefore, the purely competitive firm should reduce output to maximize its profit or minimize its loss.
Ergo industries, which manufactures automotive parts, had taken carious measures to improve the quality of the products. The product-line mangers at the company had the authority to stop production if they found the components to be defective without the approval of the senior management in the company and to take measures to resolve the issue. This authority motivated the mangers to perform their jobs better. According to hackman and oldham work design model, which of the following core job characteristics is influencing the performance of managers in the above scenario?
a. Skill variety
b. Autonomy
c. Task identity
d. Task significance
Answer:
b. Autonomy
Explanation:
Since in the question it is mentioned that the industries would take measures so that the products quality could be improved. The product line managers has the authority to stop the production in the case when there is a defective components without taking the approval of the senior management
So here the characteristics that impact the performance of the manager is autonomy as it means the freedom of an employee to finish the work so that they are able to do better work
Multiple Choice Question Mahan Corporation expects total sales to increase by 20% over the next year. The corporation has no spare capacity and must increase plant and equipment by 20%. The corporation currently has $100,000 in assets, $40,000 in debt, and $60,000 in equity. The corporation desires to maintain the debt-equity ratio. The corporation's debt will be _____. Multiple choice question. $72,000 $40,000 $60,000 $48,000
Answer:
$48,000
Explanation:
The computation of the corporation debt is shown below:
Since the asset is increased by 20%
The present asset is $100,000
ANd, the increased assets is
= $100,000 + $100,000 × 0.20
= $100,000 + $20,000
= $120,000
Now the debt is
= $120,000 × 0.4
= $48,000
hence, the last option is correct
Is a business cycle a type of recession?
yes or no?
Answer:
The Answer is gonna be Yes
If a bank that desires to hold no excess reserves and has just enough reserves to meet the required reserve ratio of 15 percent receives a deposit of $600, it has a a. $600 increase in excess reserves and no increase in required reserves. b. $600 increase in required reserves and no increase in excess reserves. c. $510 increase in excess reserves and a $90 increase in required reserves. d. $90 increase in excess reserves and a $510 increase in required reserves.
Answer:
c
Explanation:
Required reserves is the percentage of deposits required of banks to keep as reserves by the central bank
Required reserves = reserve requirement x deposits
0.2 x $100,000 = $20,000
Excess reserves is the difference between reserves and required reserves
Required reserves = 0.15 x 600 = 90
Excess reserves = 600 - 90 = 510
Which do you feel is the best organization form for a political speech and why?
Answer:
is there any options
Explanation:
Heavy Products, Inc. (HPI) developed standard costs for direct material and direct labor. In 2020, HPI estimated the following standard costs for one of their major products, the 10-gallon plastic container.
Budgeted quantity Budgeted price
Direct materials 0.1 pounds $90 per pound
Direct labor 0.2 hours $30 per hour
During June, Heavy Products produced and sold 21,000 containers using 2,400 pounds of direct materials at an average cost per pound of $93 and 2,100 direct manufacturing labor-hours at an average wage of $30.50 per hour. June's direct material flexible-budget variance is:_____.
A) $18,720 favorable.
B) $880,000 unfavorable.
C) $100,000 favorable.
D) $60,000 unfavorable.
Answer:
$34,200
Explanation:
Calculation to determine what June's direct material flexible-budget variance is
Flexible-budget variance = (2,400 × $93) − (21,000 × 0.1 × $90)
Flexible-budget variance =$223,200-$189,000
Flexible-budget variance =$34,200 U
Fees earned $942,135 Office expense 216,690 Miscellaneous expense 18,845 Wages expense 452,225 Accounts payable 23,555 Accounts receivable 65,950 Cash 252,875 Common stock 135,000 Land 301,000 Supplies 11,305 Cash dividends of $35,800 were paid during the year. Retained earnings as of June 1, 20Y5, were $254,000. Prepare the balance sheet as of May 31, 20Y6. When entering assets, enter them in order of liquidity.
Answer and Explanation:
The preparation of the balance sheet as on May 31, 20Y6 is as follows:
Assets
Cash $252,875
Accounts receivable $65,950
Supplies $11,305
Land $301,000
Total Assets $631,130
Liabilities
Accounts payable $23,555
Common Stock $135,000
Retained earnings (see working below) $472,575
Total Liabilities $631,130
Working note
For retained earnings first determine the net loss or net income as the case may be
= Fees earned - office expense - miscellaneous expense - wages expense
= $942,135 - $216,690 - $18,845 - $452,225
= $254,375
Now the ending retained earning balance is
= opening retained earning balance + net income - dividend paid
= $254,000 + $254,375 - $35,800
= $472,575
Bogart Company is considering two alternatives. Alternative A will have revenues of $160,000 and costs of $100,000. Alternative B will have revenues of $180,000 and costs of $125,000. Compare Alternative A to Alternative B showing incremental revenues, costs, and net income. What is the net income increase or decrease if you chose Alternative B instead of Alternative A
Answer and Explanation:
The computation of the increase or decrease in the net income when Alternative B should be selected rather Alternative A is given below:
Particulars Alternative A Alternative B
Revenue $160,000 $180,000
Less cost -$100,000 $125,000
Net income $60,000 $55,000
If we choose alternative B so there would be decrease in the net income by $5,000
Briefly discuss the advantages of place departmentalisation
Answer:
Places responsibility at a lower level Places emphasis on local markets and problems. Improves coordination in a region Takes advantage of the economics of local operations. Face-to-face communication with local interests.
Black Co. acquired 100% of Blue, Inc. on January 1, 2020. On that date, Blue had land with a book value of $38,000 and a fair value of $49,000. Also, on the date of acquisition, Blue had a building with a book value of $250,000 and a fair value of $460,000. Blue had equipment with a book value of $340,000 and a fair value of $280,000. The building had a 10-year remaining useful life and the equipment had a 5-year remaining useful life. How much total expense will be in the consolidated financial statements for the year ended December 31, 2020 related to the acquisition allocations of Blue
Answer:
Black Co.
Total expenses for the year ended December 31, 2020 related to the acquisition allocations of Blue are:
= $102,000
Explanation:
a) Data and Calculations:
Assets of Blue Corporation:
Book Value Fair Value Depreciation Expense
Land $38,000 $49,000 $0
Building 250,000 460,000 46,000
Equipment 340,000 280,000 56,000
Total $628,000 $789,000 $102,000
Remaining useful life:
Building = 10 years
Equipment = 5 years
Straight-line Depreciation:
Building = $46,000 ($460,000/10)
Equipment = $56,000 ($280,000/5)
what are the marketing strategies of netflix please help!
Answer:7 Modern Marketing Strategy Lessons from the Netflix Business Model
Use Multi-channel Marketing to Connect with People Online and Offline.
Make Emails Memorable and People Will Talk.
Offer Personalized Content to Keep People Hooked.
Let Data Show You the Secrets to Better Customer Service.
Explanation:
Lexigraphic Printing Company is considering replacing a machine that has been used in its factory for four years. Relevant data associated with the operations of the old machine and the new machine, neither of which has any estimated residual value, are as follows:
Old Machine
Cost of machine, 10-year life $89,000
Annual depreciation (straight-line) 8,900
Annual manufacturing costs, excluding depreciation 23,600
Annual nonmanufacturing operating expenses 6,100
Annual revenue 74,200
Current estimated selling price of machine 29,700
New Machine
Purchase price of machine, six-year life $119,700
Annual depreciation (straight-line) 19,950
Estimated annual manufacturing costs, excluding depreciation 6,900
Annual non-manufacturing operating expenses and revenue are not expected to be affected by purchase of the new machine.
Required:
1. Prepare a differential analysis as of April 30 comparing operations using the present machine (Alternative 1) with operations using the new machine (Alternative 2). The analysis should indicate the total differential income that would result over the six-year period if the new machine is acquired.
2. Choices of what other factors should be considered
A. Was the purchase price of the old machine too high?
B. What effect does the federal income tax have on the decision?
C. What opportunities are available for the use of the $90,000 of funds ($119,700 less $29,700 proceeds from the old machine) that are required to purchase the new machine?
D. Should management have purchased a different model of the old machine?
E. Are there any improvements in the quality of work turned out by the new machine?
Answer:
Lexigraphic Printing Company
1. Differential Analysis as of April 30:
Old Machine New Machine Difference
Annual revenue $74,200 $74,200
Annual depreciation (straight-line) 8,900 19,950
Annual manufacturing
costs, excluding depreciation 23,600 6,900
Annual nonmanufacturing
operating expenses 6,100 6,100
Total expenses $38,600 $32,950
Annual net income $35,600 $41,250 $5,650
Net income for 6 six years $213,600 $247,500 $33,900
2. Other factors that should be considered are:
B. What effect does the federal income tax have on the decision?
C. What opportunities are available for the use of the $90,000 of funds ($119,700 less $29,700 proceeds from the old machine) that are required to purchase the new machine?
E. Are there any improvements in the quality of work turned out by the new machine?
Explanation:
a) Dat and Calculations:
Old Machine
Cost of machine, 10-year life $89,000
Annual depreciation (straight-line) 8,900
Annual manufacturing costs, excluding depreciation 23,600
Annual nonmanufacturing operating expenses 6,100
Annual revenue 74,200
Current estimated selling price of machine 29,700
New Machine
Purchase price of machine, six-year life $119,700
Annual depreciation (straight-line) 19,950
Estimated annual manufacturing costs, excluding depreciation 6,900
Annual nonmanufacturing operating expenses 6,100
Annual revenue 74,200
Differential Analysis as of April 30:
Old Machine New Machine Difference
Annual revenue $74,200 $74,200
Annual depreciation (straight-line) 8,900 19,950
Annual manufacturing
costs, excluding depreciation 23,600 6,900
Annual nonmanufacturing
operating expenses 6,100 6,100
Total expenses $38,600 $32,950
Annual net income $35,600 $41,250 $5,650
Net income for 6 six years $213,600 $247,500 $33,900
You are a lobbyist hired by a less developed country to try to prevent a developed country from increasing trade barriers against labor-intensive manufactured imports such as textiles. Make your case, arguing from both developed and developing country perspectives, in terms of who gains and who loses.
Answer:
The answer is explained below in separate headings.
Explanation:
Resources available such as land, labour, capital and entrepreneurship are different for each country. Some may have more while others might have less. The large (developed) countries tend to be more resourceful than those small (developing) countries.
Developed Country
In this case, the capital available at the developed country's disposal helps them export manufactured goods and import labour-intensive goods from developing country with relative ease in order to produce and profit from the market.
Developing Country
From their point of view, the potential to trade outward results in the enhancement in the country's growth and efficiency. This ultimately creates an opportunity for the consumers to benefit from the variety of goods available to choose from and workers of higher incomes.
Hence, if the trade barriers are increased then it would affect both the country's in terms of profit. However, the effect would be more adverse for developing country rather than for a developed country.
Consider a hypothetical economy where there are no taxes and no international trade. Households spend $0.50 of each additional dollar they earn and save the remaining $0.50. If there are no taxes and no international trade, the oversimplified multiplier for this economy is __________
Suppose that the price level in our economy remains the same and that there is still no international trade. Now, however, the government decides to implement an income tax of 5% on each dollar of income. The MPC and MPS, however, remain the same as before. In this case, after accounting for the impact of taxes, the multiplier in this economy is ___________, and a $200 billion decrease in investment spending will lead to a billion in output.
Answer:
i) 2
ii) 1.9
iii) $200 billion decrease in investment will lead to a $380 billion decrease in output
Explanation:
i) Determine the oversimplified multiplier for this economy
MPC value of the economy = 0.5
spending multiplier = 1 - / 1 - MPC VALUE )
∴ oversimplified multiplier = 1 / 0.5 = 2
ii) Given that the Government implement an income tax of 5%
The Multiplier of the economy = 1 / [ 1 - MPC (1-t) ]
= 1 / [ 1 - 0.5(1-0.05 )]
= 1 / ( 1 - 0.475 ) = 1.9
iii) $200 billion decrease in investment will lead to a $380 billion decrease in output
total change in output = 1.9 * 200 =$ 380
Rooney Company, which sells electric razors, had $350,000 of cost of goods sold during the month of June. The company projects a 5 percent increase in cost of goods sold during July. The inventory balance as of June 30 is $28,000, and the desired ending inventory balance for July is $29,000. Rooney pays cash to settle 75 percent of its purchases on account during the month of purchase and pays the remaining 25 percent in the month following the purchase. The accounts payable balance as of June 30 was $39,000.
Required:
a. Determine the amount of purchases budgeted for July.
b. Determine the amount of cash payments budgeted for inventory purchases in July.
Answer:
A. $368,500
B. $276,375
Explanation:
A. Calculation to determine the amount of purchases budgeted for July
Using this formula
Budgeted purchase = Cost of goods sold + Ending inventory - Beginning inventory
Let plug in the formula
Budgeted purchase=$350*000*1.05 + $29,000 - $28,000
Budgeted purchase=$367,500+$29,000-$28,000
Budgeted purchase=$368,500
Therefore the amount of purchases budgeted for July is $368,500
b. Calculation to Determine the amount of cash payments budgeted for inventory
Cash payment = $368,500*75%
Cash payment= $276,375
Therefore the amount of cash payments budgeted for inventory is $276,375
Cullumber Company buys merchandise on account from Bramble Company. The selling price of the goods is $790, and the cost of the goods is $470. Both companies use perpetual inventory systems. Journalize the transaction on the books of both companies. (Credit account titles are automatically indented when amount is entered. Do not indent manually.)
Account Titles and Explanation Debit Credit
Cullumber Company
(To record credit purchase of inventory)
Bramble Company
(To record credit sale)
(To record cost of merchandise sold)
Answer:
Cullumber Company
Dr Inventory $790
Cr Accounts Pay $790
Bramble Company
Dr Account receivable $790
Cr Sales Revenue $790
Dr Cost of goods sold $470
Cr Inventory $470
Explanation:
Preparation of the journal entries on the books of both companies
CULLUMBER COMPANY
Dr Inventory $790
Cr Accounts Pay $790
(To record credit purchase of inventory)
BRAMBLE COMPANY
Dr Account receivable $790
Cr Sales Revenue $790
(To record credit sale)
Dr Cost of goods sold $470
Cr Inventory $470
(To record cost of merchandise sold)
The following is a partially completed lower section of a departmental expense allocation spreadsheet for Brickland. It reports the total amounts of direct and indirect expenses for the four departments. Purchasing department expenses are allocated to the operating departments on the basis of purchase orders. Maintenance department expenses are allocated based on square footage. Compute the amount of Purchasing department expense to be allocated to Fabrication. Purchasing Maintenance Fabrication Assembly Operating costs $ 42,000 $ 24,000 $ 106,000 $ 72,000 No. of purchase orders 15 5 Sq. ft. of space 3,800 2,200
Answer:
The amount of Purchasing department expense to be allocated to Fabrication is $31,500.
Explanation:
Note: The data in this question are merged together. They are therefore sorted before answering the question as follows:
Purchasing Maintenance Fabrication Assembly
Operating costs $42,000 $24,000 $106,000 $72,000
No. of purchase orders 15 5
Sq. ft. of space 3,800 2,200
The explanation of the answer is now given as follows:
Amount allocated to Fabrication = Purchasing department expense * (No. of purchase orders by Fabrication / (No. of purchase orders by Fabrication + No. of purchase orders by Assembly)) = $42,000 * (15 / (15 + 5)) = $31,500
Therefore, the amount of Purchasing department expense to be allocated to Fabrication is $31,500.
Assume that as of August 1, 3,000 units of flat panel displays have been produced and sold during the current year. Analysis of the domestic market indicates that 2,000 additional units are expected to be sold during the remainder of the year at the normal product price determined under the product cost method. On August 3, Crystal Displays Inc. received an offer from Maple Leaf Visual Inc. for 800 units of flat panel displays at $225 each. Maple Leaf Visual Inc. will market the units in Canada under its own brand name, and no variable selling and administrative expenses associated with the sale will be incurred by Crystal Displays Inc. The additional business is not expected to affect the domestic sales of flat panel displays, and the additional units could be produced using existing factory, selling, and administrative capacity.
Required:
Prepare a differential analysis of the proposed sale to Maple Leaf Visual Inc.
Question Completion:
Crystal Displays Inc. recently began production of a new product, flat panel displays, which required the investment of $1,500,000 in assets. The costs of producing and selling 5,000 units of flat panel displays are estimated as follows:
Variable costs per unit:
Direct materials $120
Direct labor 30
Factory overhead 50
Selling and administrative expenses 35
Total variable cost per unit $235
Fixed costs:
Factory overhead $250,000
Selling and administrative expenses 150,000
Selling price is determined as $360 per unit under the product cost method.
Answer:
Crystal Displays Inc.
Differential Analysis of Special Order:
Normal Special Order Differential
Production Alternative 2 Analysis
Sales revenue $1,800,000 $288,000 $288,000
Variable costs 1,175,000 188,000 188,000
Contribution margin $625,000 $100,000 $100,000
Fixed costs:
Factory overhead $250,000 $0 $0
Selling and admin.
expenses 150,000 0 0
Total fixed costs $400,000 $0 $0
Net income $225,000 $100,000 $100,000
Explanation:
a) Data and Calculations:
Investment in assets = $1,500,000
Normal Production and sales units = 5,000
Cost of production and sales:
Variable costs per unit:
Direct materials $120
Direct labor 30
Factory overhead 50
Selling and
administrative expenses 35
Total variable cost per unit $235
Fixed costs:
Factory overhead $250,000
Selling and administrative expenses 150,000
Total fixed costs $400,000
Special order from Maple Leaf Visual Inc.
Quantity ordered = 800 units
Offer price per unit = $225
Selling price per unit = $360
Identify which are goals of monetary policy, and which are not. Goals of monetary policy Not goals of monetary policy Answer Bank financial market stability increasing the size of the financial sector economic growth high inflation improving banks' profits high employment price stability Which two goals are often called the dual mandate of the Federal Reserve
Answer:
goals of monetary policy
financial market stability
economic growth
high employment
price stability
Not goals of monetary policy
increasing the size of the financial market
high inflation
improving banks' profits
Dual mandate : high employment
price stability
Explanation:
Monetary policy are policies taken by the central bank of a country to increase or reduce aggregate demand.
There are two types of monetary policy :
Expansionary monetary policy : these are polices taken in order to increase money supply. When money supply increases, aggregate demand increases. reducing interest rate and open market purchase are ways of carrying out expansionary monetary policy
Contractionary monetary policy : these are policies taken to reduce money supply. When money supply decreases, aggregate demand falls. Increasing interest rate and open market sales are ways of carrying out contractionary monetary policy
Goals of monetary policy include
financial market stability economic growth high employment price stabilityThe dual mandate of the Federal Reserve was birthed as a result of the stagflation of the 1970s. Stagflation is a period of high unemployment and high inflation levels
The dual mandate are : high employment, stable prices and moderate long-term interest rates.
You are considering two different methods for constructing a new warehouse site. The first method would use prefabricated building segments, would have an initial cost of $6.5 million, would have annual maintenance costs of $150,000, and would last for 25 years. The second alternative would employ a new carbon-fibre panel technology, would have an initial cost of $8.2 million, would have maintenance costs of $650,000 every ten years, and is expected to last 40 years. Both buildings would be in CCA Class 1 (at a rate of 4 percent) and it is expected that each would have a salvage value equivalent to 25 percent of its construction cost at the end of its useful life. The discount rate the firm uses in evaluating projects is 11 percent. The tax rate is 35 percent. What is the annual cost for each option? (Enter the answers in dollars. Do not round your intermediate calculations. Round the final answers to 2 decimal places. Negative answers should be indicated by a minus sign.)
Answer:
The first method would use prefabricated building segments, would have an initial cost of $6.5 million.