Answer:
Vera Incorporated
Change in annual operating income from discontinued business:
Annual Operating Income would reduce by $78,000.
Explanation:
a) Calculation of the Net Income Lost:
Loss of Contribution ($99,000)
Avoidable fixed cost $21,000
Reduction of Income ($78,000)
b) The line of purses contributes $80,000 towards the company's fixed cost. Therefore, discontinuing this line of business would lead to the loss of this steam of income. The amount of reduced operating income will be $78,000 ($80,000 - 2,000).
As a financial advisor, what will you tell your client, Ryan, he should be willing to pay for an investment property that he plans to buy today and hold for 5 years and then sell, given the following cash flows and the fact that he expects 9% on any investment he makes?
Inflows Outflows Net
InitialOutlay $0
Year 1 $45,000 $55,000 10,000
Year 2 55,000 20,000 35,000
Year 3 55,000 20,000 35,000
Year 4 255,000 235,00 220,000
A. $189, 910.29.
B. $194, 589.33.
C. $178, 656, 73.
D. $191, 231, 57.
Answer:
The option (A) $189, 910.29 is correct
Explanation:
Solution
Given that
Years Net Cash flow Discount Factor at 11% Present Value
1 $ (10,000.00) 0.901 $(9,009.01)
2 $ 35,000.00 0.812 $ 28,406.79
3 $ 35,000.00 0.731 $ 25,591.70
4 $ 220,000.00 0.65 $ 144,920.81
Now,
The Net Present Value $189,910.29
Thus
After carrying out the financial analysis, it has been seen that if we go ahead to buy the Investment Property, then today we have Net present Value of $ 189,910.29.
So, i will inform my client to buy the Investment Property.
Massage Envy offers massage services on a subscription basis, so it targets consumers that desire to get multiple treatments per month. Massage Envy likely segments its market by
Answer:
C. usage rate.
Explanation:
As in the question, it is mentioned that Massage Envy offers massage services based on a subscription basis with a view to targeting the consumers that they get more or multiple treatments per month
So Massage Envy target the market segment via usage rate as it depicts the average sales per day so that they get to know how much they earned the revenue by offering multiple treatments to clients
hence, the correct option is C. usage rate
Built-Tight is preparing its master budget for the quarter ended September 30. Budgeted sales and cash payments for product costs for the quarter follow.
July August September
Budgeted sales $54,000 $70,000 $58,000
Budgeted cash payments for
Direct material 15,160 12,440 12,760
Direct labor 3,040 2,360 2,440
Factory overhead 19,200 15,800 16,200
Sales are 15% cash and 85% on credit. All credit sales are collected in the month following the sale. The June 30 balance sheet includes balances of $15,000 in cash: $44,000 in accounts receivable; $3,500 in accounts payable; and a $4,000 balance in loans payable. A minimum cash balance of $15,000 is required. Loans are obtained at the end of any month when a cash shortage occurs. Interest is 1% per month based on the beginning-of-the-month loan balance and is paid at each month-end. If an excess balance of cash exists, loans are repaid at the end of the month. Operating expenses are paid in the month incurred and consist of sales commissions (10% of sales), office salaries ($3,000 per month), and rent ($5,500 per month).
Required:
a. Prepare a cash receipts budget for July, August, and September.
b. Prepare a cash budget for each of the months of July, August, and September.
Answer:
Built-Tight
a) Cash Budget for July, August, and September:
July August September Total
Beginning balance $15,000 $16,900 $28,700 $15,000
Cash collections: 52,100 56,400 68,200 176,700
Cash Expenses:
Direct materials (15,160) (12,440) (12,760 ) (40,360)
Direct labor (3,040) (2,360) (2,440) (7,840)
Factory overhead (19,200) (15,800) (16,200) (51,200)
Operating expenses:
Sales Commission (5,400) (7,000) (5,800) (18,200)
Rent Expense (3,000) (3,000) (3,000) (9,000)
Accounts Payable (4,000) (4,000)
Interest expense (400) (400)
Loan repayment (4,000) (4,000)
Minimum Balance 15,000 15,000 15,000
Excess Cash $1,900 $13,700 $41,700 $56,700
Explanation:
a) Cash Collections:
July August September Total
Cash sales 15% $8,100 $10,500 $8,700 $27,300
85% a month after 44,000 45,900 59,500 149,400
Total collections $52,100 $56,400 $68,200 $176,700
b) It is assumed that the balance in accounts payable was paid in August when the company had enough balance to offset it. Any other assumption could have been made.
c) A cash budget shows the cash receipts and payments made during the budget period. As a budget, it shows the forecast for cash receipts and payments, which will help management to make decisions to avoid liquidity problems which can ruin a business. Management is able to plan ahead for the business' expenditures and investments. It also warns management to negotiate for loans to smoothen periods of cash shortages.
ProBuilder reports merchandise sales of $80,000 and cost of merchandise sales of $20,000 in its first year of operations ending June 30, 2016. It makes fiscal-year-end adjusting entries for estimated future returns and allowances equal to 3% of sales, or $2,400, and 3% of cost of sales, or $600.Required:a. Prepare the June 30, 2016, fiscal-year-end adjusting journal entry for future returns and allowances related to sales. b. Prepare the June 30, 2016, fiscal-year-end adjusting journal entry for future returns and allowances related to cost of sales.
Answer and Explanation:
The adjusting entries are as follows:
1. Sales returns and allowances $2,400
To Sales refund payable $2,400
(Being the returns and allowance is recorded)
For recording this we debited the sales returns as it increased the sales return and credited the sales refund payable as it increased the liabilities
2. Inventory returns estimated $600
To Cost of goods sold $600
(Being the cost of sales is recorded)
For recording this we debited the inventory returns as it increased the returns inventory and credited the cost of goods sold as it decrease the expenses
On 12/31/X4, Zoom, LLC, reported a $55,500 loss on its books. The items included in the loss computation were $27,000 in sales revenue, $12,000 in qualified dividends, $19,000 in cost of goods sold, $47,000 in charitable contributions, $17,000 in employee wages, and $11,500 of rent expense. How much ordinary business income (loss) will Zoom report on its X4 return
Answer:Ordinary Business income loss =-$20,500.
Explanation:
Ordinary business Expenses are the expenses generally accepted according to the industry standards associated with running of a business.
Here, the ordinary business expenses for Zoom include
cost of good sold= $19,-000
employee wages= $17,000
rent expense = $11,500 and therefore will be deducted from its sales revenue.
charitable contributions and qualified dividends, do not cut across all industries and so are not classified under Ordinary Buisness expences.
Ordinary Business income loss = Sales revenue - cost of good sold, -employee wages- rent expense.
$27,000- $19,000-$`17,000-$11,500= -$20,500. to be reported on its X4 return
Sexton Corp. has current liabilities of $510,000, a quick ratio of .93, inventory turnover of 6.9, and a current ratio of 1.5. What is the cost of goods sold for the company?
Answer:
The cost of goods sold for the company is $2,005,830.
Explanation:
This can be calculated from the available information using the following steps:
Step 1: Calculation of Current Assets
To do this, we use the current ratio formula as follows:
Current ratio = Current Assets / Current Liabilities
Substituting the values in the question into the equation above and solve for Current Assets, we have:
1.5 = Current Assets / $510,000
Current Assets = $510,000 * 1.5 = $765,000
Step 2: Calculation of Inventory
To do this, we use the Quick Ratio formula as follows:
Quick ratio = (Current Assets - Inventory) / Current Liabilities
Substituting the values in the question and from Step 1 into the equation above and solve for Inventory, we have:
0.93 = ($765,000 - Inventory) / $510,000
0.93 * $510,000 = $765,000 - Inventory
$474,300 = $765,000 - Inventory
$474,300 + Inventory = $765,000
Inventory = $765,000 - 474,300 = $290,700
Note that this inventory of $290,700 is the ending inventory.
Step 3: Calculation of Cost of Goods Sold
To do this, we use the Inventory Turnover formula as follows:
Inventory turnover = Cost of goods sold / Average Inventory
Note that average Average Inventory is the addition of the beginning and closing inventory divided by 2. But since the beginning inventory is not available, the practice is to use the ending inventory in place of the average inventory. This is what we do here below.
Substituting the values in the question and from Step 2 into the equation above and solve for Cost of goods sold, we have:
6.9 = Cost of goods sold / $290,700
Cost of goods sold = 6.9 * $290,7000 = $2,005,830
Therefore, the cost of goods sold for the company is $2,005,830.
Johnson Company calculates its allowance for uncollectible accounts as 10% of its ending balance in gross accounts receivable. The allowance for uncollectible accounts had a credit balance of $28,000 at the beginning of 2021. No previously written-off accounts receivable were reinstated during 2021. At 12/31/2021, gross accounts receivable totaled $466,700, and prior to recording the adjusting entry to recognize bad debts expense for 2021, the allowance for uncollectible accounts had a debit balance of 51,300. Required: 1. What was the balance in gross accounts receivable as of 12/31/2020? 2. What journal entry should Johnson record to recognize bad debt expense for 2021? 3. Assume Johnson made no other adjustment of the allowance for uncollectible accounts during 2021. Determine the amount of accounts receivable written off during 2021. 4. If Johnson instead used the direct write-off method, what wou
Answer:
1. What was the balance in gross accounts receivable as of 12/31/2020?
= allowance for doubtful accounts 2020 / 10% = $28,000 / 10% = $280,000
2. What journal entry should Johnson record to recognize bad debt expense for 2021?
Dr Bad debt expense (= 46,670 + 51,300) 97,970
Cr Allowance for doubtful accounts 97,970
3. Assume Johnson made no other adjustment of the allowance for uncollectible accounts during 2021. Determine the amount of accounts receivable written off during 2021.
= credit balance allowance for doubtful accounts January 1 + debit balance allowance for doubtful accounts December 31 = $28,000 + $51,300 = $79,300
4. If Johnson instead used the direct write-off method, what would the bad debt expense be
The bad debt expense would equal $79,300. The allowance for doubtful accounts is used as an estimate of future bad debt expense, while the direct write off method directly writes off bad debt as they occur.
Explanation:
beginning balance of allowance for doubtful accounts $28,000
gross accounts receivable $466,700 x 10% = $46,670 bad debt
before adjustments, the allowance for doubtful accounts had a debit balance of $51,300
In Ricci v. DeStefano, Ricci, a white firefighter, took and passed the City of New Haven firefighter's test, required of all applicants for promotion in the city's fire department. The test was thrown out when it was discovered that minorities scored poorly and the city feared a disparate impact-based lawsuit. How did the court rule?
A) An employer may not simply disregard a test based on unwanted results unless the test is shown to be biased or deficient.
B) Even though the test was prepared by a professional testing organization, the city has the right to reject the test results if minorities do not score adequately
C) Deliberately oversampling minorities to seek to create a fair test is irrelevant if the test results show that minorities still scored poorly
D) Ricci, as a member of the white majority, had no grounds to sue when the city was seeking the legitimate aim of nondiscrimination
Answer:
The correct answer is A. In Ricci v. DeStefano, the Supreme Court ruled that an employer may not simply disregard a test based on unwanted results unless the test is shown to be biased or deficient.
Explanation:
Ricci v. DeStefano is a Supreme Court ruling of 2009, after a lawsuit by nineteen firefighters who claimed to have been discriminated against in terms of career development. They denounced that they had been discriminated after having passed the admission tests and still had not been promoted, since no African-American candidate had passed the tests. They also denounced that they had not been promoted because the Fire Department did not want to promote a group of new recruits without including within it any member of racial minorities.
Finally, the Supreme Court established that said procedure violated Title VII of the Civil Rights Act of 1964, since in the case equal access to employment was not guaranteed (in this case, favoring minorities over white firefighters), for set different demands for purely racial reasons.
onceptual Connection: For each situation, identify the possible root cause(s) of the activity cost (such as plant layout, process design, and product design). a. A manual insertion process takes 30 minutes and 8 pounds of material to produce a product. Automating the insertion process requires 15 minutes of machine time and 7.5 pounds of material. The cost per labor hour is $12, the cost per machine hour is $8, and the cost per pound of materials is $10. b. With its original design, a gear requires 8 hours of setup time. By redesigning the gear so that the number of different grooves needed is reduced by 50%, the setup time is reduced by 75%. The cost per setup hour is $50. c. A product currently requires 6 moves. By redesigning the manufacturing layout, the number of moves can be reduced from 6 to 0. The cost per move is
Answer:
Explanation:
For each situation, identify the possible root cause or causes of activity cost, among these:
1. Plant Layout
2. Process design
3. Product design
(A) PROCESS DESIGN
The design of the process of production is the root cause of activity cost here. From the rates given, it's clear that the manual method of production costs more time and money than the mechanical production method.
A minor cause of activity cost here is the PRODUCT DESIGN; the cost of which varies with the use of labour and the use of machine.
(B) PRODUCT DESIGN
Change in design of the gear (removal of some component parts) reduces set up time and cost.
(C) PLANT LAYOUT
Redesign of manufacturing plant saves the time and cost of moves.
A package delivery service uses vans and employees to deliver the maximum number of packages given a fixed budget. The last van added 600 packages to total output, while the last employee added 500 packages. If vans cost exist400 per week and employees earn exist300 per firm:________.
a. could deliver more packages with the same budget by using more employees and fewer Vans
b. could deliver more packages the same budget by using more vans and fewer with employees
c. use more vans and fewer employees because the last dollars spent on vans added more to total output than the last dollar spent on employees
d. is delivering the maximum number of packages given the fixed budget
e. both b and c
Answer: e. both b and c
Explanation:
Van delivered 600 per week and cost $400.
The cost per package for the Van is;
= 600/400
= $1.5 per package
Employees delivered 500 and cost $300 which means the cost per package is;
= 500/300
= $1.67 per package.
The results show that it costs more to deliver with Employees ($1.67) than with the Vans ($1.5). Using more Vans will therefore allow for more packages to be delivered using a fixed budget as the last dollar spent on Vans gave more output than the last dollar spent on Employees.
Typically, the firms' lowest cost source of financing is ____________ as its cost is tax deductible and it also tends to offer the least amount of risk for investors. Group of answer choices Debt Preferred Equity Derivatives Common Equity Equity
Answer:
Debt
Explanation:
Debt is the lowest cost source of financing because the interest return given to holders of debt has a tax shield (tax deductible) that is provided by the Section 11j of the Income tax Act.
The other sources of finance give a return in form of dividends. Dividends are are not tax deductible hence they attract a huge cost.
Why are adjustments made to the accounting records at the end of the period? (You may select more than one answer. Single click the box with the question mark to produce a check mark for a correct answer and double click the box with the question mark to empty the box for a wrong answer. Any boxes left with a question mark will be automatically graded as incorrect.)
Answer: a. To ensure assets and liabilities are reported at appropriate amounts.
b. To ensure the related revenues and expenses are reported in the proper period.
Explanation:
Adjustments must be made at the end of the period to make sure that the figures in the books are the proper and true reflection of the transactions that took place. That way records are neither overstated or understated thereby giving the users of the Accounting records a proper and accurate opportunity to assess the company's financial standing.
Records must also be adjusted to abide by the Accrual basis in accounting which posits that revenues and expenses should be recorded only in the periods when they occured regardless of if money has been received or paid for them. This way it is easier to match Expenses as well as Revenue to their respective periods.
Gilbert Company generated sales revenues of $1,800,000 in 2017. Its cost of goods sold amounted to $990,000. Calculate Gilbert's gross profit percentage. Supporting Materials Cost of goods sold / Group of answer choices 55% 45% 222% 182%
Answer:
45%
Explanation:
The computation of the gross profit percentage is shown below:
As we know that
Gross profit percentage = Gross profit ÷ Sale revenue × 100
where,
Gross profit is
= Sales revenue - the cost of goods sold
= $1,800,000 - $990,000
= $810,000
And, the sales revenue is $1,800,000
So, the gross profit percentage is
= $810,000 ÷ $1,800,000
= 45%
Hence, the gross profit percentage is 45%
Sally is employed as a computer programmer for the Ellis Corporation. She has a savings account of $15,000 and owns a few shares of Ellis stock. She thinks of herself as an investor rather than as a worker. Marx would maintain that Sally has __________. Group of answer choices
Answer:
She is experiencing false class consciousness
Explanation:
False class consciousness was introduced by Karl Marx.
False Class consciousness refers to an unawareness by a social or economic class like Sally of her position and interests within the structure of the economic order and social system in which she lives. By thinking herself to be an investor instead of worker, Sally has a misguided or false view of her own position in Ellis corporation.
The assets and liabilities of Thompson Computer Services at March 31, the end of the current year, and its revenue and expenses for the year are listed below. The capital of the owner was $190,000 at April 1, the beginning of the current year. Mr. Thompson invested an additional $25,000 in the business during the year. Accounts payable $1,200 Miscellaneous expense $370 Accounts receivable 12,340 Office expense 560 Cash 32,990 Supplies 1,670 Fees earned 68,980 Wages expense 25,580 Land 65,000 Drawing 3,000 Building 143,670 Prepare an income statement for the current year ended March 31. Thompson Computer Services Income Statement For the Year Ended March 31
Answer:
Thompson Computer Services
Income statement for the current year ended March 31.
Particulars Amount
Fees Earned $68,980
Expenses
Miscellaneous expense $370
Office expense $560
Wages expense $25,580
Total Expenses $26,510
NET INCOME $42.470
Nielson Motors is considering an opportunity that requires an investment of $1,000,000 today and will provide $250,000 one year from now, $450,000 two years from now, and $650,000 three years from now. If the appropriate interest rate is 15%, then Nielson Motors should
Answer:
The NPV is - $14958.49 . The opportunity should not be pursued as the NPV of the project discounted at the interest rate of 15% comes out to be negative . Thus, Nielson Motors should not proceed with the project.
Explanation:
To determine whether the project should be accepted or not, we need to calculate the NPV or Net Present Value of the project. If the NPV is positive, the project should be accepted.
The formula to calculate the NPV is attached.
NPV = - 1000000 + 250000 / (1 + 0.15) + 450000 / (1 + 0.15)² +
650000 / (1 + 0.15)³
NPV = - $14958.49429
The opportunity should not be pursued as the NPV of the project discounted at the interest rate of 15% comes out to be negative. Thus, Nielson Motors should not proceed with the project.
g n a certain economy, when income is $100, consumer spending is $60. The value of the multiplier for this economy is 4. It follows that, when income is $101, consumer spending is a. $60.25. b. $60.75. c. $61.33. d. $64.00.
Answer:
The answer is option (b) $60.75
Explanation:
Solution
Given that
A certain economy, Income is =$100
Consumer spending is =$60
The value of multiplier is =4
Now we need to know when the income is $101, consumer spending, the customer spending will be what?
Now,
Multiplier (k)= 1/1-MPC (marginal propensity to consume)
4=1/1-MPC
Thus
MPC= 1-1/4
MPC=3/4
MPC=.75
So,
MPC= Change in consumption/change in income.
.75=Change in C/101-100
Change in C=.75*1
Change in C=.75
Hence
The new consumption =60+.75=60.75
Therefore, when the income is $101, the consumer spending is $60.75
Based on the income and the amount of money spent from it, the consumer spending at that amount will be b. $60.75
The question can be answered with the Marginal Propensity to Consume (MPC) which is calculated as:
Multiplier = 1 / (1 - MPC)
4 = 1 / (1 - MPC)
MPC = 0.75
If the income is $101, the amount that will be spent is:
= Income + (Increase in income x Marginal Propensity to Consume)
= 100 + (1 x 0.75)
= $60.75
In conclusion, $60.75 will be the consumer spending.
Find out more at https://brainly.com/question/15245341.
Suppose the demand for macaroni is inelastic, the supply of macaroni is elastic, the demand for cigarettes is inelastic, and the supply of cigarettes is elastic. If a tax were levied on the sellers of both of these commodities, we would expect that the burden of
Answer:
both taxes would fall more heavily on the buyers than on the sellers
Explanation:
Here are the options:
a. both taxes would fall more heavily on the buyers than on the sellers. b. the macaroni tax would fall more heavily on the sellers than on the buyers, and the burden of the cigarette tax would fall more heavily on the buyers than on the sellers c. the macaroni tax would fall more heavily on the buyers than on the sellers, and the burden of the cigarette tax would fall more heavily on the sellers than on the buyers O d. both taxes would fall more heavily on the sellers than on the buyers.
Tax is a compulsory sum levied on goods and services. Taxes increases the price of goods and services
Supply is elastic if a small change in price leads to a greater change in the quantity supplied.
Demand is inelastic if there's little or no change in demand when price is increased.
More burden of tax should fall on the consumers because their demand is inelastic. So, if prices rise as a result of the tax, there would be little or no change in quantity demanded.
But in the case of suppliers, they are sensitive to price and a rise in price would cause quantity supplied to fall and revenue would fall.
I hope my answer helps you
If a Starbucks tall latte cost $3.20 in the United States and 3 euros in the Euro area, then purchasing-power parity implies the nominal exchange rate is how many euros per dollar?
a. .938 If the exchange rate is less than this, it costs more dollars to buy a tall latte in the U.S. than in the Euro area.
b. .938 If the exchange rate is less than this, it costs fewer dollars to buy a tall latte in the U.S. then in the Euro area.
c. 1.067 If the exchange rate is less than this, it costs more dollars to buy a tall latte in the U.S. than in the Euro area.
d. 1.067 If the exchange rate is less than this, it costs fewer dollars to buy a tall latte in the U.S. than in the Euro area.
Answer:
a. .938 If the exchange rate is less than this, it costs more dollars to buy a tall latte in the U.S. than in the Euro area.
Explanation:
We can see in the example that the Euro is cheaper than the dollar in purchasing-power parity. More specifically, the exchange rate is .938 euros per dollar.
This is why it is more expensive to buy a tall latte in the U.S. than in Europe. The Euro is cheaper.
When reading a research report on an automobile company, a registered representative's use of fundamental analysis determines that the stock is a good investment. When attempting to determine the best time to execute orders to buy the stock, the registered representative could refer to:
Answer:
Explanation:
In this situation, the registered representative could refer to a chart showing a recent history of the market price of the stock. The chart provides all the price movements of the stock during a certain period of time as well as different time intervals. This allows the individual to point out key levels of support and resistance as well as any trend that may be occurring. These indications allow the individual to make a more educated decision on the best time to execute orders to buy the stock.
Which of the following is a community lifeline
Answer:
Safety and security
food, water, and shelter
health and medical
power and fuel
communications and transport
Explanation:
A lifeline allows business and government structures to continue to operate and is beneficial to human health and financial stability. Lifelines are perhaps the most important resources in the community that allow all other facets of society to work when balanced. The interconnected network of resources, services, and securities ( food, water, and shelter, medical care, communications facilities, etc) that provide lifeline services is used on a daily basis to facilitate the community's regularly occurring needs and give all other elements of society to perform efficiently.
Communications are the Community's lifeline. Safety and security, health and medical care, communications, hazardous materials, food, water, shelter, energy (power & fuel), and transportation are the seven community lifelines that FEMA has defined. Thus, option C is correct.
The Community Lifelines idea from the Federal Emergency Management Agency (FEMA) is a framework for event management that gives emergency managers a reporting system to swiftly stabilize a community after a disaster.
Safety and security, health and medical care, communications, hazardous materials, food, water, shelter, energy (power & fuel), and transportation are the seven community lifelines that FEMA has defined. It is a sign that lives are in danger, and daily routines and food chains are disturbed, if any of these Lifelines go down due to a disaster or emergency.
Learn more about FEMA community lifelines here:
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Your question seems to be incomplete, but most probably the complete question was:
Which of the following is a community lifeline?
a. schools and churches
b. lumber and hardware
c. grocery and fast food
d. communications
Last year, Rotterdam, Inc. had sales revenue of $980,000. Costs other than depreciation and interest expense were 20 percent of sales. Depreciation expense was $50,000, interest expense was $95,000, and dividends paid were $23,000. The company also received dividends of $8,000 from a company in which it had 30% ownership stake. Which of the following statements is most CORRECT?a. The firm's taxable income was $637,400. b. The firm's after-tax income was $405,564. c. The firm's marginal tax rate was 39 percent. d. The firm's tax for the year was $113,900. e. None of the above
Answer:
e. None of the above
Explanation:
total revenue $980,000
- operating costs $196,000
- depreciation $50,000
- interests $95,000
income $639,000
+ dividends from outside corporation = $8,000 x (1 - 80% DRD) = $1,600
total taxable income = $639,000 + $1,600 = $640,600
current corporate tax is 21%, so the company's marginal tax rate would be 21%
income taxes for the year = $640,600 x 21% = $134,526
the company's after tax income = $640,600 - $134,526 = $506,074
Hubert: Demand decreased, but it was perfectly inelastic. Kate: Demand decreased, but supply was perfectly inelastic. Manuel: Demand decreased, but supply increased at the same time. Poornima: Supply increased, but demand was perfectly inelastic. Shen: Supply increased, but demand was unit elastic. Who could possibly be right
The complete part of the question.
The price of coffee fell sharply last month, while the quantity sold remained the same. Five people suggest various explanations
Answer:
Kate, Manuel and Poornima
Explanation:
Given that, the price of coffee fell but the quantity sold remained the same.
1. Hubert: Demand decreased, but it was perfectly inelastic.
If an elastic demand shifts the demand curve will move to the left. This would cause both prices as well as quantity to decline. So HUBERT's statement is not correct.
2. Kate: Demand decreased, but supply was perfectly inelastic.
This can be true, because of the inelastic supply curve. If the supply curve is an inelastic vertical line then a fall in demand will not affect quantity while the price will fall. So, KATE's statement can be right.
3. Manuel: Demand decreased, but supply increased at the same time.
If there is a decrease in the demand curve, it will shift to the left. Now, if there is an increase in the supply by the same amount the price will fall but quantity will remain the same. So, MANUEL's statement is right.
4. Poornima: Supply increased, but demand was perfectly inelastic.
Here, the rightward shift in the supply curve will cause the price to fall but quantity will remain the same. So, POORNIMA's statement is right.
5. Shen: Supply increased, but demand was unit elastic.
if the demand curve is unitary elastic, an increase in supply will cause the price to fall and quantity to increase. So, SHEN's statement is not correct.
Snap Dragon Photo reported the following figures on its December 31, 2016, income statement and balance sheet:Net Sales $440,000 Dec 31 2016 Dec 31 2015Cash $26,000 $28,000Accounts Receivable 56,000 58,000Merchandise Inventory 79,000 76,000Prepaid Expenses 8,000 14,000Property, plant and equipment, net 180,000 11,000Compute the asset turnover ratio for 2016.
Answer:
Assets turnover ratio= 1.64 times
Explanation:
The asset turnover is the he amount of sales generated by one dollar invested in asset. it measures how efficient the business is in generating sales using assets
Assets turnover ratio = net sales / Average assets
Asset at the beginning of year 2016
=26,000 + 56,000 + 79,000 + 8,000 + 180,000 = 349 ,000
Asset at the end of year 2016
$28,000 + 58,000 + 76,000 + 14,000 + 11,000= 187 ,000
Average assets = Opening value of asset+ closing value of assets/2
= 349 ,000 + 187 ,000= 268 ,000
Assets turnover ratio = net sales / Average assets
=440000/268,000= 1.64 times
Assets turnover ratio= 1.64 times
Total assets =
Hannah Roberts owns and operates Hannah's Pool Service Company. On January 1, Hannah Roberts, Capital had a balance of $309,170. During the year, Hannah invested an additional $22,040 and withdrew $39,010. For the year ended December 31, Hannah's Pool Service Company reported a net income of $55,080.
Prepare a statement of owner's equity for the year ended December 31. Hannah's Pool Service Company Statement of Owner's Equity For the Year Ended December 31.
Answer:
Hannah's Pool Service Company
Statement of owner equity for the year ended December 31
Particulars Amount
Capital (January 1) $309,170
Investment during the year $22,040
Net Income $55,080
Withdrawals during the year (-$39,010)
Increase in the owner equity $38,110
Capital (December 31) $347.280
Workings
a. Increase in the owner equity = Investment during the year + Net income - withdrawal during the year
=$22040+$55080 -$39010
=$38110
b. Capital (December 31) = Capital on January 1 + Increase in owner equity
=$309170 +$38110
=$347280
"On January 1, MM Co. borrows $360,000 cash from a bank and in return signs an 8% installment note for five annual payments of $90,164 each. 1. Prepare the journal entry to record issuance of the note. 2. For the first $90,164 annual payment at December 31, what amount goes toward interest expense
Answer:
1.Jan 01 Dr Cash 360,000
Cr Notes payable 340,000
2.Interest expense 28,800
Principal Reduction 61,364
Explanation:
MM Co.
1 . Journal entry
Since MM Co. borrows $360,000 cash on January 1 from a bank this means we have to
Debit Cash with the amounts of money he borrowed which is $360,000 and Credit Notes Payable with the same amount.
Jan 01 Dr Cash 360,000
Cr Notes payable 340,000
2. Calculation of the amount goes toward interest expense and Principal reduction
Interest expense 28,800
(360,000*8%)
Principal Reduction 61,364
(90,164-28,800)
An investor is considering the purchase of a residential rental property that has an asking price of $400,000. The property has four rental units that are expected to rent for $1,200 each per month. Operating expenses and vacancy allowances are expected to be 45% of gross income. An 5% interest only mortgage loan is available for 5 years at 100% of the purchase price. How much cash income will the investor receive each month of the first year after paying the monthly mortgage payment
Answer:
The answer is $973
Explanation:
Solution
Given that:
A residential rental property asking price = $400,000
Property expected to rent = $1200
Operating expenses expected = 45%
Interest =5%
Mortgage loan available for =5 years
Purchase price =100%
Now, we find out the cash income the investor receive each month of the first year after paying the monthly mortgage payment
Thus
Rental income (1200*4 units)=$4800
Less: operating expenses (4800*45%)=$2160
The Net income per month=$2640
So,
Less:Monthly mortgage interest payment=$1667 [(400000*5%)
=20000/12=1667]
The Cash income =$973
Therefore the investor will receive $973 each month of the first year.
A sinking fund is established by a working couple so that they will have $60,000 to pay for part of their daughter's education when she enters college. If they make deposits at the end of each 3-month period for 8 years, and if interest is paid at 10%, compounded quarterly, what size deposits must they make
Answer:
quarterly deposit= $12,460.99
Explanation:
Giving the following information:
FV= $60,000
Number of periods= 4*8= 32
i= 0.10/4= 0.025
To calculate the quarterly deposit required, we need to use the following formula:
FV= {A*[(1+i)^n-1]}/i
A= quarterly deposit
Isolating A:
A= (FV*i)/{[(1+i)^n]-1}
A= (60,000*0.025) / [(1.025^32) - 1]
A= 12,460.99
Jason just joined a new gym and signed up for a one-year membership. Membership fees can be paid in 12 monthly payments of $50, due at the beginning of each month or in one payment today. If the appropriate interest rate is 11%,.How much should he pay today for the annual membership?
Answer:
$570.91
Explanation:
For computing, the amount pay today for the annual membership we just need to apply the present value formula i.e to be shown in the attachment
Provided that
Future value = $0
Rate of interest = 11% ÷ 12 months = 0.916666%
NPER = 12 months
PMT = $50
The formula is shown below:
= PV(Rate;NPER;PMT;FV;type)
So, after applying the above formula, the amount paid today for the membership is $570.91
The receiving department has three activities: unloading, counting goods, and inspecting. Unloading uses a forklift that is leased for $15,000 per year. The forklift is used only for unloading. The fuel for the forklift is $3,600 per year. Other operating costs (maintenance) for the forklift total $1,500 per year. Inspection uses some special testing equipment that has depreciation of $1,200 per year and an operating cost of $750. Receiving has three employees who have an average salary of $50,000 per year. The work distribution matrix for the receiving personnel is as follows:
Activity Percentage of Time on Each Activity
Unloading 40%
Counting 25
Inspecting 35
No other resources are used for these activities.
Required:
Calculate the cost of each activity.
Unloading $
Counting $
Inspecting $
Answer:
Calculating the cost of each activity,
Unloading = $ 80,100
Counting = $ 37,500
Inspecting = $54,450
Explanation:
Given:
Unloading lease = $15,000 per year
Fuel for the forklift = $3,600 per year
Maintenance for the forklift = $1,500 per year
Inspection uses some special testing equipment that has depreciation of $1,200 per year
Operating cost = $750.
Receiving employees average salary = $50,000 per year
Salaries; 3 × 50,000 = 150,000
Unloading salary = 40% × 150,000 = 60,000
Counting salary = 25% × 150,000 = 37,500
Inspecting salary = 35% × 150,000 = 52,500
Unloading Counting Inspection
Equipment 15,000 1,200
Fuel 3,600
Operation cost 1,500 750
Labor 60,000 37,500 52,500
Total cost 80,100 37,500 54,450