Answer:
the potential for a central bank to increase the money supply and therefore real GDP to help the incumbent get re-elected.
Explanation:
A political business cycle can be defined as a business cycle that typically arises from the manipulation and tweaking of economic policy tools such as fiscal policy and monetary policy by incumbent (serving) politicians, in order to stimulate and enhance the economy of a particular country before an election. Thus, this would go a long way to boost the chances of the candidate representing the particular political party and reelection into office by the people.
Hence, the political business cycle refers to the potential for a central bank to increase the money supply and therefore real GDP to help the incumbent get re-elected.
The Gross Domestic Products (GDP) is a measure of the total market value of all finished goods and services made within a country during a specific period.
Simply stated, GDP is a measure of the total income of all individuals in an economy and the total expenses incurred on the economy's output of goods and services in a particular country.
Basically, the four (4) major expenditure categories of GDP are consumption (C), investment (I), government purchases (G), and net exports (N).
Additionally, Gross Domestic Products (GDP) of a country's economy gives an insight to it's social well-being such as Real GDP.
Beacon Company is considering automating its production facility. The initial investment in automation would be $15 million, and the equipment has a useful life of 10 years with a residual value of $500,000. The company will use straight-line depreciation. Beacon could expect a production increase of 40,000 units per year and a reduction of 20 percent in the labor cost per unit.
Determine the project's accounting rate of return. (Round your answer to 2 decimal places.)
Accounting Rate of Return____________
Determine the project's payback period. (Round your answer to 2 decimal places.)
Payback Period _______________years
Using a discount rate of 15 percent, calculate the net present value (NPV) of the proposed investment. (Future Value of $1, Present Value of $1, Future Value Annuity of $1, Present Value Annuity of $1.) (Use appropriate factor(s) from the tables provided. Negative amount should be indicated by a minus sign.)
Net Present Value ______________
Recalculate the NPV using a 10% discount rate. (Future Value of $1, Present Value of $1, Future Value Annuity of $1, Present Value Annuity of $1.) (Use appropriate factor(s) from the tables provided. Negative amount should be indicated by a minus sign.)
Net Present Value_________
Question Completion:
Current Proposed
no automation with automation
Production and Sales Volume 80,000 units 120,000 units
Per unit Per unit
Sales revenue $90 $7,200,000 $90 $10,800,000
Variable costs
Direct materials 18 18
Direct labor 25 20
Variable overhead 10 10
Total variable costs 53 48
Contribution per unit $37 2,960,000 $42 5,040,000
Fixed costs 1,250,000 2,350,000
Net operating income $1,710,000 $2,690,000
Answer:
Beacon Company
a. The project's accounting rate of return = Net operating income/Initial investment * 100
= $2,690,000/$15,000,000 * 100
= 17.93%
b. The project's payback period =
Initial investment/Net Annual Cash inflow
= $15,000,000/$4,140,000
= 3.62 years
c. NPV (PV factor at 15% for 10 years)
Cash flows Amount PV factor PV
Cash outflows = $15,000,000 1 -$15,000,000
Cash inflows = 4,140,000 5.019 20,778,660
Salvage value 500,000 0.247 123,500
NPV = $5,902,160
c. NPV (PV factor at 10% for 10 years)
Cash flows Amount PV factor PV
Cash outflows = $15,000,000 1 -$15,000,000
Cash inflows = 4,140,000 6.145 25,440,300
Salvage value 500,000 0.386 193,000
NPV = $10,633,300
Explanation:
a) Data and Calculations:
Initial investment cost of production facility = $15 million
Estimated useful life of equipment = 10 years
Residual value = $500,000
Annual depreciation expense = $1,450,000 ($15m - $500,000)/10
Net Annual Cash inflows = Net operating income + Depreciation
= $2,690,000 + $1,450,000 = $4,140,000
The ABC Company has recognized the following demand for the next four quarters:
Quarter Demand
1 3000 units
2 4000 units
3 4500 units
4 3500 units
ABC has traditionally used the hiring and firing of workers to accommodate the changes in demand for their products but is considering maintaining a stable workforce and subcontracting production when demand exceeds the capability of the workforce. They currently have 30 workers, each capable of producing 100 units per quarter. It costs them $3000 to hire a worker and $5000 to fire a worker.
If they subcontract the work, it will cost them $30 per unit above their normal production cost. Given this information, should they continue their current practice or move to subcontracting the production over what their current workforce can produce?
Answer: Subcontracting production
Explanation:
It is cheaper for ABC Company to subcontract the jobs than to hire and fire workers as needed. Even though the cost is similar when it comes to hiring permanent workers and training them vs subcontracting them, when the company needs to produce less goods, the cost of firing the permanent employees is simply too much.
For instance, 1,000 units out of the 4,000 units in the second quarter cannot be covered by the 30 workers they have. They will need to hire 10 additional workers and training them would cost $30,000. That is the same cost they would incur if they subcontracted (30 * 1,000 units = $30,000).
What happens in quarter 4 however, when they have to let go of 10 employees because production dropped by 1,000 units? They will have to pay $50,000. If they were subcontracting, they would not have to pay a dime. It is therefore better to subcontract.
The currency in Macroland is called econs. In Macroland, the public holds 2,000 econs in currency; commercial bank reserves are 300 econs; and the desired reserve-to-deposit ratio of the commercial banks is 10%. If the Central Bank of Macroland prints an additional 200 econs and uses this new currency to buy government bonds from the public, the money supply in Macroland will ____, assuming that the public does not wish to change the amount of currency it holds from before.
Answer:
D)5,000; 7,000
Explanation:
The computation is shown below:
The total bank deposit would be
= (300 ÷ 0.10) + 2,000
= 3,000 + 2,000
= 5,000
In the case when the reserve ratio is 10% so the money multiplier would be 10
Since there is extra inflow of currency so by having the multiplier effect it would be 2000 econs
Now first it is 5,000 econ than it would become 7,000 econ
If there is an additional inflow of currency because of printing 200 econs by central bank then because of multiplier effect it will be 2000 econs.
Money supply from earlier 5000 econs will become 7000 econs.
Autoliv produces air bag systems that it sells to automobile manufacturers throughout the world. Assume the company has a capacity of 50 million units per year, it is currently producing at an annual rate of 40 million units. Autoliv has received an order from a Japanese manufacturer to purchase 100,000 units at $65 each. Budgeted costs for 40 million and 45 million units are as follows:
(in thousands, except costs per unit) 40 Million Units 45 Million Units
Manufacturing costs
Direct materials $ 560,000 $ 630,000
Direct labor 220,000 247,500
Factory overhead 1,780,000 1,822,500
Total 2,560,000 2,700,000
Selling and administrative 1,120,000 1,125,000
Total $ 3,680,000 $ 3,825,000
Costs per unit
Manufacturing $ 64.00 $ 60.00
Selling and administrative 28.00 25.00
Total $ 92.00 $ 85.00
Sales to auto manufacturers are priced at $120 per unit, but the sales manager believes the company should aggressively seek the Japanese business even if it results in a loss of $20 per unit. She believes obtaining this order would open up several new markets for the company's product. The general manager commented that the company cannot tighten its belt to absorb the $2,000,000 loss ($20 × 100,000) it would incur if the order is accepted.
(a) Determine the financial implications of accepting the order. (Hint: Use the high-low method to determine variable costs per unit.)
Accepting the offer will Answerdecreaseincrease
profits by $________
(b) How would your analysis differ if the company were operating at capacity? Determine the advantage or disadvantage of accepting the order under full-capacity circumstances.
Answer: See explanation
Explanation:
a. The variable cost per unit will be:
= (3,825,000 - 3,680,000) / (45million - 40 million)
= 0.029
Then, the financial order of accepting the order will be:
Contribution margin = Unit selling price - Unit
= 65 - 29
= 36
Since the size of the order is 100,000, the financial impact of accepting the order will be:
= 36 × 100,000
= 3,600,000
b. The differential analysis will be:
Contribution from special order = 3,600,000
Opportunity cost {100,000 = 120,000,000 - 29,000,000 = 9,100,000
Net disadvantage of accepting order will then be:
= 3600000 - 9100000
= 5,500,000
The U.S. has expected inflation of 2%, while Country A, Country B, and Country C have expected inflation of 7%. Country A engages in much international trade with the U.S. The products that are traded between Country A and the U.S. can easily be produced by either country. Country B engages in much international trade with the U.S. The products that are traded between Country B and the U.S. are important health products, and there are not substitutes for these products that are exported from the U.S. to Country B or from Country B to the U.S. Country C engages in much international financial flows with the U.S. but very little trade. If you were to use purchasing power parity (PPP) to predict the future exchange rate over the next year for the local currency of each country against the dollar, PPP would provide the most accurate forecast for the currency of: _________
Answer:
If you were to use purchasing power parity (PPP) to predict the future exchange rate over the next year for the local currency of each country against the dollar, PPP would provide the most accurate forecast for the currency of: _________
Country A.
Explanation:
The U.S. and Country A have Purchasing Power Parity (PPP) if an exchange rate can be determined between these two countries' currencies when their purchasing power is in equilibrium. This parity can only be established by comparing a basket of goods in the two countries. This basket of goods is not possible to compare with Country B or Country C that has no similar goods with the U.S.
Conclusions and recommendations are the most widely read sections of any report. Conclusions summarize and explain your findings and are the heart of your report. The ability to draw sound conclusions and make clear recommendations from your research is crucial to business success. Companies value employees who can analyze data and use it to help answer questions and solve problems.
1. When drawing conclusions, make sure you (use consistent evaluation criteria / are open to sensationalization or exaggeration / avoid relating them to the initial report problem).
Consider the scenario, and then answer the question.
You are making recommendations after researching and writing a report on sports club discounts and employee health.
2. What should you remember about your reader before preparing your recommendations?
A. Readers prefer specific, practical recommendations.
B. Readers may want to know how to implement the suggestions.
C. Readers should have no influence on how your recommendations are developed.
D. Readers prefer that your recommendations be shared indirectly.
E. Readers want to know how your data relate to the problem being studied.
Determine whether each of the following statements is the finding, the conclusion, or the recommendation.
Employee attrition rate after four years with our company is 35 percent, which is 17 percent higher than that of our aspirational peers. Typical employee promotions occur after five years in our company and after four years in competitive firms.
3. This is the (conclusion / finding / recommendation) .
We are losing trained and promising employees more often than our competition due to slow promotion practices within our company.
4. This is the (conclusion / finding / recommendation) .
Implement a leadership development program for promising new employees, and decrease the time before employees are eligible for promotion in order to retain the most promising employees.
5. This is the (conclusion / finding / recommendation) .
Answer:
Conclusions and Recommendations
1. When drawing conclusions, make sure to:
use consistent evaluation criteria
2. What to remember about the reader before preparing recommendations:
A. Readers prefer specific, practical recommendations.
3. This is the finding.
4. This is the conclusion.
5. This is the recommendation.
Explanation:
Findings in a report are the discoveries made about the subject. Conclusions are evidence-based summaries of the findings. They are the results of the research effort. Convincing conclusions always relate to the initial report problems. Recommendations are action points that should be followed to resolve the prevailing problems.
Metlock Mining Company purchased land on February 1, 2020, at a cost of $1,101,100. It estimated that a total of 58,200 tons of mineral was available for mining. After it has removed all the natural resources, the company will be required to restore the property to its previous state because of strict environmental protection laws. It estimates the fair value of this restoration obligation at $112,500. It believes it will be able to sell the property afterwards for $125,000. It incurred developmental costs of $250,000 before it was able to do any mining. In 2020, resources removed totaled 29,100 tons. The company sold 21,340 tons.
Compute the following information for 2020.
(a) Per unit mineral cost: _______
(b) Total material cost of December 31, 2020, inventory:_______
(c) Total material cost in cost of goods sold at December 31, 2020:_______
Answer and Explanation:
The computation is shown below;
(a)
Purchase price of Land $1,101,100
Add: Fair value of restoration $112,500
Less: residual value -$125,000
Developmental costs $250,000
Total $1,388,600
Divided by Tons available for mining 58,200
Per unit Material cost $23.00
(b) Inventory $178,480 (29100 - 21340) × $23
(c ) Cost of goods sold $490,820 (21340 × $23)
The Fortise Corporation manufactures two types of vacuum cleaners, the Victor for commercial building use and the House-Mate for residences. Budgeted and actual operating data for the year 2017 were as follows: Static Budget Victor House-Mate Total Number sold 20,000 80,000 100,000 Contribution margin $4,600,000 $15,200,000 $19,800,000 Actual Results Victor House-Mate Total Number sold 21,500 64,500 86,000 Contribution margin $6,665,000 $14,190,000 $20,855,000 What is the total sales-mix variance closest to in terms of the contribution margin
Answer:
The Fortise Corporation
The total sales-mix variance closest to $1,055,000 in terms of the contribution margin.
Explanation:
a) Data and Calculations:
Static Budget Victor House-Mate Total
Total Number sold 20,000 80,000 100,000
Contribution margin $4,600,000 $15,200,000 $19,800,000
Actual Results Victor House-Mate Total
Number sold 21,500 64,500 86,000
Contribution margin $6,665,000 $14,190,000 $20,855,000
Variance
Number sold 1,500 F 15,500 U 14,000 U
Contribution margin $2,065,000 F $1,010,000 U $1,055,000 F
Discuss how work plays part in the work situation?
Answer:
Why is work important?
The status of work in contemporary societies is the result of a long historical process. It is not only an indispensable means of enhancing individual senses of usefulness and belonging, but also of providing financial means. Work is also central in several other dimensions, namely in its role as a socialising mechanism, as a source of social exchanges, and individual identities. Thus, work can be seen as the pillar of social organisation, but also, to a large extent, as an important pillar of the existential organisation of individuals. It is a fundamental feature in many dimensions of social integration, such as health, housing, and interpersonal networks. Hence, the relevance of Work Integration Programmes (WIP) aimed at improving the condition of vulnerable groups.
Let's summarise the importance of work both at the individual and the societal level:
For individuals, work is an important feature in structuring: personal and social identity; family and social bonds; ways of making money, and thereby accessing a number of essential and non-essential goods, services and activities; daily routines; level of activity; physical and mental well-being; self-confidence and self-esteem; a sense of self-worth provided by the feeling of contributing to society or the common good
For societies, work is an important feature in: promoting community cohesion and safety; increasing civic participation; reducing public spending in a range of welfare benefits (provided, of course, that work is performed in a decently paid job); promoting social and economic development; organising social life at a macro level
When success in these dimensions is challenged WIPs become more important. The relevance of WIPs is made even more acute when both macro and microstructural conditions create obstacles to the positive role of work. These must be carefully considered:
Macrostructural conditions: the current European crisis, reflected in the rise of unemployment and job precariousness; the transformation of work ethics that has been going on over the past few decades: as jobs become increasingly precarious, subject to sudden change or elimination, individuals have a decreased sense of security, commitment and loyalty towards their jobs and each other (see: Public Policy).
Microstructural conditions: work is not, by itself, synonym with integration. Indeed, precarious, unappealing, dangerous, low-paid and low-status jobs relegate individuals to the margins of society.
Yet, despite these current conditions, work is still a central piece in our societies, and a crucial factor in the social integration of vulnerable groups.
Eva Company sells one product at a price of $25 per unit. Variable expenses are 40 percent of sales, and fixed expenses are $25,000. What is the sales dollars level required to break even
Answer:
$41,667
Explanation:
Break even (Sales dollars) = Fixed Cost ÷ Contribution margin ratio
therefore
the sales dollars level required to break even is $41,667
The following information relates to the only product sold by Harper Company. Sales price per unit $ 45 Variable cost per unit 27 Fixed costs per year 247,000 a. Compute the contribution margin ratio and the dollar sales volume required to break even. b. Assuming that the company sells 20,000 units during the current year, compute the margin of safety (in dollars).
Answer and Explanation:
The computation is shown below
a.
For Contribution Margin ratio
We know that
Contribution margin per unit = Sale price per unit - Variable cost per unit
= $45 - $27
= $18
Now
Contribution margin ratio = Contibution Margin per unit ÷ Sale price per unit
= $18 ÷ $45
= 0.4
Now
Break even sales dollar
Break even sales = Fixed Cost ÷ Contribution margin ratio
= $247,000 ÷ 0.4
= $617,500
b.
For Margin of Safety
The Margin of safety = Actual sales - Break Even Sales
where,
Actual sales(in $) = 20000 × 45
= $900,000
So, Margin of safety is
= $900,000 - $617,500
= $282,500
Partnership XYZ distributed a piece of land in a nonliquidating distribution to Bob, a 50% partner, during the current taxable year. The land had an adjusted basis of $50,000 and a FMV at the date of the distribution of $180,000. Bob has been a partner for 10 years. He had contributed the land to the partnership at formation when its FMV and basis were both equal. He has a basis in the partnership of $40,000 at year end, without taking into consideration the effects of the distribution. Calculate items 1-4 using the information above. Enter the appropriate amounts in the designated cells below. Indicate negative numbers by using a leading minus (-) sign. If no entry is necessary, enter a zero (0). Item Amount
1. Partnership XYZ's recognized gain (loss)
2. Bob's taxable gain (income)
3. Bob's basis in the property
4. Bob's basis in the partnership
Answer:
Partnership XYZ
Item Amount
1. Partnership XYZ's recognized gain (loss) $130,000
2. Bob's taxable gain (income) $65,000
3. Bob's basis in the property $90,000
4. Bob's basis in the partnership $105,000
Explanation:
a) Data and Calculations:
Bob's partnership interest = 50%
Adjusted basis of land = $50,000
Fair market value (FMV) = $180,000
Bob's basis in the partnership at year end = $40,000
Item Amount
1. Partnership XYZ's recognized gain (loss) $130,000 ($180,000 - $50,000)
2. Bob's taxable gain (income) $65,000 ($130,000 * 50%)
3. Bob's basis in the property $90,000 ($180,000 * 50%)
4. Bob's basis in the partnership $105,000 ($65,000 + $40,000)
2. Discuss innovation as an entrepreneurial trait and the role of innovation in Wow Momo's
success.
Hearne Company has a number of potential capital investments. Because these projects vary in nature, initial investment, and time horizon, management is finding it difficult to compare them. Assume straight line depreciation method is used. (Future Value of $1, Present Value of $1, Future Value Annuity of $1, Present Value Annuity of $1.) (Use appropriate factor(s) from the tables provided.)
Project 1: Retooling Manufacturing Facility This project would require an initial investment of $4,850,000. It would generate $865,000 in additional net cash flow each year. The new machinery has a useful life of eight years and a salvage value of $1,000,000.
Project 2: Purchase Patent for New Product The patent would cost $3,400,000, which would be fully amortized over five years. Production of this product would generate $425,000 additional annual net income for Hearne.
Project 3: Purchase a New Fleet of Delivery Trucks Hearne could purchase 25 new delivery trucks at a cost of $115,000 each. The fleet would have a useful life of 10 years, and each truck would have a salvage value of $5,000. Purchasing the fleet would allow Hearne to expand its customer territory resulting in $200,000 of additional net income per year.
Required:
a. Determine each project's accounting rate of return. (Round your answers to 2 decimal places.)
b. Determine each project's payback period. (Round your answers to 2 decimal places.)
c. Using a discount rate of 10 percent, calculate the net present value of each project. (Future Value of $1, Present Value of $1, Future Value Annuity of $1, Present Value Annuity of $1.) (Use appropriate factor(s) from the tables provided. Round your final answersto 2 decimal places.)
d. Determine the profitability index of each project and prioritize the projects for Hearne. (Round your intermediate calculations to 2 decimal places. Round your final answers to 4 decimal places.)
Answer:
Hearne Company
Project 1 Project 2 Project 3
Initial investment cost $4,850,000 $3,400,000 $2,875,000
Annual cash inflows 865,000 1,105,000 475,000
PV annuity (5.335/3.791/6.145) 4,614,775 4,189,055 $2,918,875
Useful life 8 years 5 years 10 years
Salvage Value 1,000,000 0 125,000
PV (0.467/0/0.386 467,000 0 48,250
Depreciable/Amortization amount $3,850,000 $3,400,000 $2,750,000
Annual depreciation/amortization 481,250 680,000 275,000
Annual Returns 383,750 425,000 200,000
Average annual investment cost 606,250 680,000 287,500
a. Accounting rate of return 63.30% 62.50% 69.57%
b. Payback period 5.61 years 3.08 years 6.05 years
Total PV of cash inflows 5,081,775 4,189,055 2,967,125
c. NPV $231,775 $789,055 $92,125
d. Profitability Index 1.0478 1.2321 1.0320
Prioritization of Projects:
Project 2
Project 1
Project 3
Based on NPV, Profitability Index, and Payback Period.
Explanation:
a) Data and Calculations:
Project 1 Project 2 Project 3
Initial investment cost $4,850,000 $3,400,000 $2,875,000
Annual cash inflows 865,000 1,105,000 475,000
PV annuity (5.335/3.791/6.145) 4,614,775 4,189,055 $2,918,875
Useful life 8 years 5 years 10 years
Salvage Value 1,000,000 0 125,000
PV (0.467/0/0.386 467,000 0 48,250
Depreciable/Amortization amount $3,850,000 $3,400,000 $2,750,000
Annual depreciation/amortization 481,250 680,000 275,000
Annual Returns 383,750 425,000 200,000
Average annual investment cost 606,250 680,000 287,500
Accounting rate of return 63.30% 62.50% 69.57%
Payback period 5.61 years 3.08 years 6.05 years
Total PV of cash inflows 5,081,775 4,189,055 2,967,125
NPV $231,775 $789,055 $92,125
Profitability Index 1.0478 1.2321 1.0320
Key Calculation Formulas:
Annual cash flows = Annual Depreciation Plus Annual Net Income
Present of annual cash flows = Annuity factor * Annual cash flows
PV of Salvage value = Salvage value * Discount Factor
The Depreciable or Amortization amount = Initial investment cost Minus Salvage value
Annual Returns = Annual Cash inflow Minus Depreciation
Average annual investment cost = Initial investment cost/useful life
Accounting rate of return = average annual returns/average annual investment cost
Payback period = Initial investment/Annual cash inflows
Total PV of cash flows = PV of annual cash inflows + PV of Salvage value
NPV = Total PV of cash flows Minus Initial Investment Cost
Profitability Index = Total PV of cash flows/Initial Investment Cost
Which of the following is a firm's cash cycle?
a. the average length of time between when a firm originally purchases its inventory and when it receives the cash back from selling its product
b. the average length of time between when a firm pays cash to purchase its initial inventory and when it receives cash from the sale of the product produced from that inventory
c. the average length of time between when a firm pays cash to purchase its initial inventory and when it sells that product
d. the average length of time between when a firm originally purchases its inventory and when it sells the product produced from that inventory
Answer:
he average length of time between when a firm pays cash to purchase its initial inventory and when it receives cash from the sale of the product produced from that inventory
Explanation:
A firm's cash cycle measure the time required for a company to go from cash paid (used in its operations) to cash received (as a result of operations)
It is an example of a liquidity ratio
Liquidity ratios measure the ability of a firm to meet its short term obligations
Cash cycle = days of inventory on hand + days of sales outstanding - number of days of payable
the shorter the cash cycle, the more liquid the firm is and the better for the firm
Whirlwind mowers manufacturers and sells power lawnmower still public and distributes the products through its own dealers. Andrew is a homeowner who has purchased a power mower from an authorized dealer on the basis of the dealer's recommendation that the mower is the best one available to the job. Andrew was cutting his lawn when the mower blade flew off and seriously injured his leg.
Required:
a. Andrew sues Whirlwind Mowers and asks for damages based on negligence in producing the power mower. Is Whirlwind Mowers guilty of negligence? Explain your answer.
b. The doctrine of res ipsa loquitur can often be applied to cases of this type. Show how this doctrine can be applied to this case. Your answer must include a definition of res ipsa loquitur .
c. Explain the various types of damages that Andrew might receive if Whirlwind Mowers is found guilty of negligence.
Answer:
A) Yes Whirlwind mowers are guilty
B) If
The negligence causes an injury event occurred due to the negligence applicant/defendant has an exclusive ownership of the equipmentC) Compensative damages : special and general
Explanation:
A)
Andrew can sue whirlwind mowers and claim damages for production negligence ( i.e. not following the standard of care ) as enshrined in the doctrine of " res ipsa loquitur " hence Whirlwind mowers are guilty
B)
"res ipsa loquitur ." means the thing speaks for itself and this doctrine can be applied to this case following that the:
The negligence causes an injury event occurred due to the negligence applicant/defendant has an exclusive ownership of the equipmentc) The various types of damages
Compensative damages ( divided into 2 )
i) special damages which includes hospital expenses and other properly documented damages ii) general damages : includes damages that are non-measurable damages
Huron has provided the following year-end balances: Cash, $29,000 Patents, $7,400 Accounts receivable, $9,400 Property, plant, and equipment, $98,400 Prepaid insurance, $4,100 Accumulated depreciation, $15,000 Inventory, $39,000 Retained earnings, 15,500 Trademarks, $13,100 Accounts payable, $8,000 Goodwill, $16,000 How much are Huron's current assets
Answer:
$81,500
Explanation:
Given the information above, Hurron's current asset will be computed using the formula below.
= Cash + Accounts receivables + Prepaid insurance + Inventory
= $29,000 + $9,400 + $4,100 + $39,000
= $81,500
Therefore, Hurron's current assets is $81,500.
Identify whether each of the following statements is or is not a provision of Occupational Safety and Health Act (OSHA).
a. Employers can be cited and fined for not complying with OSHA workplace standards.
b. OSHA is authorized to enter, after a one-month delay, any factory, plant, establishment, construction site or other areas, workplace, or environment where work is performed by an employee of an employer to inspect or investigate.
c. OSHA is authorized to inspect and investigate during work hours at any place of employment and all pertinent conditions and to question privately any employer, owner, operator, agent, or employee.
Answer:
a. PROVISION.
Under OSHA, an employee can be cited, fined or docked pay if they refuse to comply with the standards as these are to help save lives and maintain an accident free workplace.
b. NOT A PROVISION.
OSHA is authorized to act immediately and enter without any delay, into any workplace in order to investigate to see if they are enforcing OSHA provisions.
c. PROVISION.
In order to be as effective as possible. OSHA is allowed to inspect and investigate during work hours as well as off work hours in order to ensure that regulations are followed at all times.
The average height of members of the high school basketball team is six feet, three inches. Jerry is on the high school basketball team, so Jerry must be taller than six feet. The argument above is flawed because it confuses:_________
Answer:
The argument is confusing an average for the individuals who make up that average.
Explanation:
The argument assumes that the height of all members of the team is above 6 ft. this is flawed because it assumes that the average height is equal to the height of the members of the team
for example, there are two members in the team
assume that the height of each member is 6 ft 3 inches. the average height is 6 ft 3 inches
Assume that the height of one member is 10.6 in and jerry's height is 2.0. the average height is 6 ft 3 inches. Here Jerry's height is less than 6ft
ABC Company rents its extra office space to XYZ Company for $600 per month. On November 1, 2020, ABC Company received $3,600 rent in advance from XYZ Company for the months of November 2020, December 2020, January 2021, February 2021, March 2021, and April 2021. The adjusting entry on December 31, 2020 (the end of the fiscal year) would include:
Answer:
Debit : Rent Paid in Advance $1,200
Credit : Rent Income $1,200
Explanation:
The adjusting entry on December 31, 2020 would include:
Debit : Rent Paid in Advance $1,200
Credit : Rent Income $1,200
The master budget of Marigold Corp. shows that the planned activity level for next year is expected to be 50000 machine hours. At this level of activity, the following manufacturing overhead costs are expected:
Indirect labor $800000
Machine supplies 250000
Indirect materials 250000
Depreciation on factory building 70000
Total manufacturing overhead $1370000
A flexible budget for a level of activity of 60000 machine hours would show total manufacturing overhead costs of :_________.
a. $1630000
b. $1370000.
c. $1644000.
d. $1574000.
Answer:
The correct answer is A.
Explanation:
First, we need to separate the fixed costs and calculate the unitary variable costs:
Fixed costs:
Depreciation on factory building= 70,000
Total unitary varaible cost:
Total cost= 800,000 + 250,000 + 250,000= $1,300,000
Unitary cost per hour= 1,300,000 / 50,000= $26
Now, the total cost for 60,000 hours:
Total cost= 26*60,000 + 70,000
Total cost= $1,630,000
At December 31, 2021, Sunland Company had a credit balance of $15,300 in Allowance for Doubtful Accounts. During 2022, Sunland wrote off accounts totaling $12,800. One of those accounts of $1,700 was later collected. At December 31, 2022, an aging schedule indicated that the balance in Allowance for Doubtful Accounts should be $26,800. Prepare journal entries to record the 2022 transactions of Sunland Company.
Answer:
See below
Explanation:
During 2022, Sunland Company wrote off accounts totalling $12,800
Entry
Allowance for doubtful account Dr $12,800
---------- To Accounts receivable Cr $12,800
(Being entries to write off accounts initially provided for)
Only one of those accounts ($1,700) was later collected
Entry
Cash account Dr $1,700
----------- To Bad debt expense Cr $1,700
(Being entries to record receipt of cash from account previously written off)
At December 31, 2022 an aging schedule indicated that the balance in Allowance for Doubtful accounts should be $26,800
Entry
Bad debt expense Dr $24,300
---------------- To Allowance for doubtful debt Cr $24,300
(Being entries to recognize bad debt expense at year end based on aging schedule)
Workings
Adjustment required for doubtful accounts
= $26,800 - ($15,300 - $12,800)
= $24,300
Garth is best friends with Wayne, the CEO of Great Pharma, Incorporated (GPI), a publicly traded corporation. GPI had just made an important discovery: the cure for cancer. The information has been kept secret by GPI. Before the news was made public in a press conference, Wayne told Garth about it on May 1 and that day Garth bought 10,000 shares of GPI stock. The press conference was on May 2 and after the announcement, GPI stock went up $50 a share. Garth immediately sold his stock and made $500,000. Garth is known in the law of insider trading as a/an
Answer:
Garth is known in the law of insider trading as a
secondary insider.
Explanation:
Garth's contact with inside information in GPI is not primary since he does not have the direct privileged information, unlike Wayne, his friend, who is also the CEO of GPI. However, he has benefited from secondary information through Wayne. His conduct is also a violation of the Securities Act as amended. He used non-publicly available information to trade on the stock of GPI and made huge profits.
Eagle Company uses a standard cost system that has provided the following data: Units of output manufactured 90 Direct labor Standard hours allowed 2 hours per unit of product Standard wage rate $ 15.60 per hour Actual direct labor 200 hours, total cost of $3,520 The direct labor rate variance for the period was: Multiple Choice $712 favorable. $400 favorable. $400 unfavorable. $712 unfavorable.\
Answer:
Direct labor rate variance= $400 unfavorable
Explanation:
To calculate the direct labor rate variance, we need to use the following formula:
Direct labor rate variance= (Standard Rate - Actual Rate)*Actual Quantity
Direct labor rate variance= (15.6 - 17.6)*200
Direct labor rate variance= $400 unfavorable
Actual rate= 3,520 / 200= $17.6
Durable goods $3,000 Services 6,000 Business purchases of capital goods 400 Fixed investment 850 Exports 600 Imports 800 Nondurable goods 700 Inventory investment 200 Government transfer payments 100 Purchases of new residential housing 450 Government purchases 900 Refer to Exhibit 7-3. Consumption is equal to
Answer:
$9,700
Explanation:
The computation of the consumption is shown below;
= Durable goods + Services + Non-durable goods
= $3,000 + $6,000 + $700
= $9,700
We simply added the durable goods, services and the non-durable goods so that the consumption could be come
Hence, the consumption is $9,700
Therefore the same is to be considered
At the beginning of June, 6,000 diamonds were in process. During June, an additional 9,000 diamonds were started. 7,000 diamonds were completed and transferred to finished goods. As of the beginning of the month, work in process was 80% complete with respect to materials and 60% complete with respect to conversion costs. As of the end of the month, work in process was 50% complete with respect to materials and 30% complete with respect to conversion costs. Calculate the equivalent units of direct labor for June.
Answer:
9,400 units
Explanation:
Equivalent units are physical units expressed as a percentage of work done on then. In this case we express the physical outputs as percentage of direct labor.
Step 1: Ending Work in Process units calculation :
Ending Work in Process units = 6,000 + 9,000 - 7,000
= 8,000
Step 2 : Equivalent units of direct labor for June calculation:
Completed and transferred (7,000 x 100%) 7,000
Ending Work in Process (8,000 x 30%) 2,400
Equivalent units of production 9,400
On January 1, 2021, the general ledger of Dynamite Fireworks includes the following account balances:
Accounts Debit Credit
Cash $ 24,300
Accounts Receivable 5,700
Supplies 3,600
Land 55,000
Accounts Payable $ 3,700
Common Stock 70,000
Retained Earnings 14,900
Totals $ 88,600 $88,600
During January 2021, the following transactions occur:
January 2 Purchase rental space for one year in advance, $7,500 ($625/month).
January 9 Purchase additional supplies on account, $4,000.
January 13 Provide services to customers on account, $26,000.
January 17 Receive cash in advance from customers for services to be provided in the future, $4,200.
January 20 Pay cash for salaries, $12,000.
January 22 Receive cash on accounts receivable, $24,600.
January 29 Pay cash on accounts payable, $4,500.
The following information is available on January 31.
Rent for the month of January has expired.
Supplies remaining at the end of January total $3,300.
By the end of January, $3,575 of services has been provided to customers who paid in advance on January 17.
Unpaid salaries at the end of January are $5,450.
1. Record the purchase of rental space for one year in advance, $7,500 ($625/month).
2. Record the purchase of additional supplies on account, $4,000.
3. Record the providing of services to customers on account, $26,000.
4. Record the receipt of cash in advance from customers for services to be provided in the future, $4,200.
5. Record the payment of cash for salaries, $12,000.
6. Record the receipt of cash on accounts receivable, $24,600.
7. Record the payment of cash on accounts payable, $4,500.
8. Record the adjusting entry for rent. Rent for the month of January has expired.
9. Record the adjusting entry for supplies. Supplies remaining at the end of January total $3,300.
10. Record the adjusting entry for services provided to customers who paid in advance. By the end of January, $3,575 of services has been provided to customers who paid in advance on January 17.
11. Record the adjusting entry for salaries payable. Unpaid salaries at the end of January are $5,450.
12. Record the entry to close the revenue accounts.
13. Record the entry to close the expense accounts
Answer:
Dynamite Fireworks
1. January 2
Debit Prepaid Rent $7,500
Credit Cash $7,500
To record the purchase of rental space in advance ($625/month).
2. January 9
Debit Supplies $4,000
Credit Accounts Payable $4,000
To record the purchase of additional supplies on account.
3. January 13
Debit Accounts Receivable $26,000
Credit Service Revenue $26,000
To record the provision of services to customers on account.
4. January 17
Debit Cash $4,200
Credit Deferred Revenue $4,200
To record the receipt of cash in advance for future services.
5. January 20
Debit Salaries Expense $12,000
Credit Cash $12,000
To record the payment of salaries.
6. January 22
Debit Cash $24,600
Credit Accounts Receivable, $24,600
To record the receipt of cash on account.
7. January 29
Debit Accounts Payable, $4,500
Credit Cash $4,500
To record the payment on account.
Adjustments on January 31.
8. Debit Rent Expense $625
Credit Prepaid Rent $625
To record the rent expense for January.
9. Debit Supplies Expense $4,300
Credit Supplies $4,300
To record the supplies expense for January.
10. Debit Deferred Revenue $3,575
Credit Service Revenue $3,575
To record revenue for services provided.
11. Debit Salaries Expense $5,450
Credit Salaries Payable $5,450
To accrue unpaid salaries at the end of January.
12. Debit Service Revenue $29,575
Credit Income Summary $29,575
To close the revenue account to the income summary.
13. Debit Income Summary $22,375
Credit:
Salaries Expense $17,450
Rent Expense $625
Supplies Expense $4,300
To close the expense accounts to the income summary.
Explanation:
a) Data and Calculations:
Accounts Debit Credit
Cash $ 24,300
Accounts Receivable 5,700
Supplies 3,600
Land 55,000
Accounts Payable $ 3,700
Common Stock 70,000
Retained Earnings 14,900
Totals $ 88,600 $88,600
Transactions and Analysis:
January 2 Prepaid Rent $7,500 Cash $7,500 ($625/month).
January 9 Supplies $4,000 Accounts Payable $4,000
January 13 Accounts Receivable $26,000 Service Revenue $26,000
January 17 Cash $4,200 Deferred Revenue $4,200
January 20 Salaries Expense $12,000 Cash $12,000
January 22 Cash $24,600 Accounts Receivable, $24,600
January 29 Accounts Payable, $4,500 Cash $4,500
Adjustments on January 31.
Rent Expense $625 Prepaid Rent $625
Supplies Expense $4,300 Supplies $4,300
Deferred Revenue $3,575 Sales Revenue $3,575
Salaries Expense $5,450 Salaries Payable $5,450
Select the correct answer.
At the end of the year, Clean123 Inc. has a service revenue of $193,750, an accounts payable of $500, a notes payable of $ 17,800, a salaries
expense of $26,900, and a rent expense of $14,640. What is Clean123 Inc.'s net income?
ОА.
$134,410
OB.
$152,210
OC. $161,310
OD. $166,850
Reset
Next
Answer: $152,210
Explanation:
The net income is the income that remains after the expenses has been deducted from the revenue.
Clean123 Inc.'s net income will be calculated as:
Service revenue = $193,750
Less: Salaries expense = $26,900
Less: rent expense = $14,640.
Net income = $152,210
Therefore, the net income is $152210
Superior has provided the following information for its recent year of operation: The common stock account balance at the beginning of the year was $11,000 and the year-end balance was $15,500. The additional paid-in capital account balance increased $3,600 during the year. The retained earnings balance at the beginning of the year was $65,000 and the year-end balance was $90,000. Net income was $37,000. How much were Superior's dividend declarations during its recent year of operation
Answer:
$12,000
Explanation:
Given the above information, we will apply the formula below:
The ending balance of retained earnings = Beginning balance of retained earnings + Net income - Dividend paid
$90,000 = $65,000 + $37,000 - Dividend paid
Dividend paid = $65,000 + $37,000 - $90,000
Dividend paid = $12,000
Therefore, the above balance of $12,000 would be displayed in the retained earnings statment
Portions of the financial statements for Clear Transmissions Company are provided below.
CLEAR TRANSMISSIONS COMPANY
Income Statement
For the Year Ended December 31, 2021 ($ in thousands)
Sales $ 2,160
Cost of goods sold 864
Gross margin 1,296
Salaries expense $ 388
Depreciation expense 250
Amortization expense 38
Interest expense 96
Loss on sale of cash equivalents 20 792
Income before taxes 504
Income tax expense 252
Net Income 252
CLEAR TRANSMISSIONS COMPANY
Selected Accounts from Comparative Balance Sheets
December 31, 2021 and 2020 ($ in 000s)
Year
2021 2020 Change
Cash 135 128 7
Accounts receivable 259 274 (15 )
Inventory 464 478 (14 )
Accounts payable 198 190 8
Salaries payable 106 114 (8)
Interest payable 54 48 6
Income tax payable 45 38 7
Required:
Prepare the cash flows from operating activities section of the statement of cash flows for Clear Transmissions Company using the indirect method. (Enter your answers in thousands (i.e., 5,000 should be entered as 5). Amounts to be deducted should be indicated with a minus sign.)
Answer:
Clear Transmissions Company
Clear Transmissions Company
Statement of Cash Flows for the year ended December 31, 2021
Operating activities: ($ in 000s)
Net Income $252
Depreciation expense 250
Amortization expense 38
Loss on sale of cash equivalents 20
Changes in working capital:
Accounts receivable 15
Inventory 14
Accounts payable 8
Salaries payable (8)
Interest payable 6
Income tax payable 7
Cash flow operations $602
Explanation:
a) Data and Calculations:
CLEAR TRANSMISSIONS COMPANY
Income Statement
For the Year Ended December 31, 2021 ($ in thousands)
Sales $ 2,160
Cost of goods sold 864
Gross margin 1,296
Salaries expense $ 388
Depreciation expense 250
Amortization expense 38
Interest expense 96
Loss on sale of cash equivalents 20 792
Income before taxes 504
Income tax expense 252
Net Income 252
CLEAR TRANSMISSIONS COMPANY
Selected Accounts from Comparative Balance Sheets
December 31, 2021 and 2020 ($ in 000s)
Year 2021 2020 Change
Cash 135 128 7
Accounts receivable 259 274 (15 )
Inventory 464 478 (14 )
Accounts payable 198 190 8
Salaries payable 106 114 (8)
Interest payable 54 48 6
Income tax payable 45 38 7