Answer: See explanation
Explanation:
a. Let the break even sales be represented by x.
Firstly, we will calculate the total fixed cost which will be:
Investment = $4.5million/30 = $150,000
Add: Annual labor cost = $140,000
Add: Interest = 8% × $4.5million = $360,000
Total Fixed cost = $650000
The total variable cost will be: = 0.60 × x = 0.60x
Therefore, total cost:
= fixed cost + variable cost
= 650000 + 0.60x
Total revenue = Selling price × sales
= 3.20 × x = 3.20x
Break even point will now be:
Total revenue = Total cost
3.20x = 650000 + 0.60x
3.20x - 0.60x = 650000
2.60x = 650000
x = 650000/2.60
x = 250000
Therefore, number of cars that would have to park in the lot on an annual basis to pay off the project is 250000.
b. The approximate number of cars that would have to park in the lot on a daily basis will be:
= 250000/365 days
= 684.91
=685 cars
THESE ARE TRUE OR FALSE!! PLEASE HELP ASAP!!
1. A letter of application is just a general business letter.
- 2. Getting a position interview is the main purpose of a letter of application.
3. It is important that a letter of application be businesslike and courteous.
– 4. It is not necessary to include a personal data sheet if you have a well-written and complete
letter of application.
5. It is a good idea to restrict yourself to just one good source of job leads.
6. Completing the position application form is not very important in the job-search process.
7. Some employers use ability tests to find out how well job applicants can do certain job
tasks.
8. Being dressed very informally for a position interview lets the employer know that you are
"cool" and will get along well with everybody.
9. A positive attitude toward work has many benefits.
10. When you leave a job, you should exit as soon as possible.
how to vote correctly? explain your answer
On January 1, 2019, Woodstock, Inc. purchased a machine costing $40,600. Woodstock also paid $1,300 for transportation and installation. The expected useful life of the machine is 6 years and the residual value is $5,300. If Woodstock uses the straight-line depreciation method, which of the following statements is incorrect?
a. The annual depreciation expense is $6.100.
b. The December 31, 2019 book value is $35,800
c. The December 31, 2020 book value is $24,400
d. The December 31, 2021 accumulated depreciation balance is $18,300
Answer:
Book value (2020)= $29,700
Explanation:
Giving the following information:
Total purchase price= 40,600 +´1,300= $41,900
Useful life= 6 years
Residual value= $5,300
To determine which option is incorrect, we are going to calculate the annual depreciation, book value, and accumulated depreciation:
Annual depreciation= (Total purchase price - salvage value)/estimated life (years)
Annual depreciation= (41,900 - 5,300) / 6
Annual depreciation= $6,100
Accumulated depreciation (2021)= 6,100*3= $18,300
Book value (2019)= 41,900 - 6,100= $35,800
Book value (2020)= 35,800 - 6,100= $29,700
The following are Hibiscus Company's cost of making and selling an item:
Description Amount per unit
Direct materials $9
Direct labor $4
Variable manufacturing overhead $2
Fixed manufacturing overhead $5
Variable selling and administrative $2
Fixed selling and administrative $8
A one-time only special order has been received for 600 units. The company has capacity to accept the oder and it would not affect regular sales. The sales price for the special order is 26 per unit. Total fixed costs would not be affected by this order. The variable selling and administrative costs would have to be incurred for this special order. The order would require an additional $3 per unit for specialized materials and a new machine that costs $2,000. What is the financial advantage or disadvantage of accepting the special order?
Answer:
$2,800 financial advantage
Explanation:
We consider incremental costs and revenues in our analysis for the effects of accepting the special order.
Analysis of effects of accepting the special order :
Sales - Incremental (600 units x $26) $15,600
Less Incremental Costs :
Direct materials ($9 x 600 units) ($5,400)
Direct labor ($4 x 600 units) ($2,400)
Variable manufacturing overhead ($2 x 600 units) ($1,200)
Specialized materials ($3 x 600 units) ($1,800)
Machine Cost ($2,000)
Financial Advantage / (Disadvantage) $2,800
therefore,
the financial advantage of accepting the special order is $2,800
Discuss, what international business is, why and how it differs from domestic business, why it is important, and its historical development?
Answer:
An international business can be understood as the expansion of business beyond your country. Organizations look for economic opportunities in other countries, to achieve competitive and profitable advantages, to increase their value and their market strength.
This is a strategy that includes greater responsibilities than managing a national business, due to the fact that an international business includes adapting to a different culture, legislation and preferences, which means greater challenges and greater capacity for the organization to adapt its values, products and services the culture and local rules, in order to be well accepted and well positioned in the international market.
International business was only possible due to new technologies, which allowed individuals to move and communicate more quickly, which enabled this international expansion in a more dynamic way and management in real time, regardless of geographic distance.
Currently we live in the era of globalization, where there is a great economic interaction between the countries of the world, in an ultra-competitive environment where each organization seeks the best way to generate value and economic results.
A non-governmental not-for-profit university in California charges its students tuition of $10,000,000. However, financial aid grants total $2,200,000. In addition, the school receives a $1,000,000 grant restricted for faculty salaries. Of this amount, $300,000 is spent appropriately this year. On the statement of activities, the school reports three categories: (1) revenues and support, (2) net assets released from restrictions, and (3) expenses. Which of the following is not true?
A. In the unrestricted net assets, the revenues and support should total $1.14 million.
B. Unrestricted net assets shows the $160,000 as a direct reduction to the tuition revenue balance.
C. Unrestricted net assets should recognize expenses of $24,000.
D. Unrestricted net assets should show an increase of $24,000 for net assets reclassified.
Answer:
b. In the unrestricted net assets, the revenues and support should total $10,000,000.
Explanation:
Based on the information given the statements that is NOT true will be "IN THE UNRESTRICTED NET ASSETS, THE REVENUES AND SUPPORT SHOULD TOTAL $10,000,000 reason been that in a non-governmental not-for-profit school the the financial grant that was provided by the school will reduce the tuition revenue which therefore means that the FINANCIAL SUPPORT OR GRANTS REVENUES AND SUPPORT should total only the amount of $7,800,000 calculated as ($10,000,000-$2,200,000).
Aztec Company sells its product for $160 per unit. Its actual and budgeted sales follow
Units Dollars
April (actual) 4,500 720,000
May (actual) 2,200 352,000
June (budgeted) 5,000 800,000
July (budgeted) 4,000 799,000
August (budgeted) 3,000 600,000
All sales are on credit. Recent experience shows that 28% of credit sales are collected in the month of the sale, 42% in the month after the sale, 27% in the second month after the sale, and 3% prove to be uncollectible. The product's purchase price is $110 per unit, 60% of purchases made in a month is paid in that month and the other 40% is paid in the next month. The company has the policy to maintain an ending monthly inventory of 18% of the next month's unit sales plus a safety stock of 180 units. The April 30 and May 31 actual Inventory levels are consistent with this policy. Selling and administrative expenses for the year are $1,584,000 and are paid evenly throughout the year In cash. The company's minimum cash balance at the month-end is $120,000. This minimum is maintained, If necessary, by borrowing cash from the bank. If the balance exceeds $120,000, the company repays as much of the loan as It can without going below the minimum. This type of loan carries an annual 13% interest rate. On May 31, the loan balance is $39,500, and the company's cash balance Is $120,000
Required:
a. Prepare a schedule that shows the computation of cash collections of its credit sales (accounts receivable) in each of the months of June and July.
b. Prepare a schedule that shows the computation of budgeted ending inventories (in units) for April, May, June, and July.
c. Prepare the merchandise purchases budget for May, June, and July. Report calculations in units and then show the dollar amount of purchases for each month.
d. Prepare a schedule showing the computation of cash payments for product purchases for June and July.
e. Prepare a cash budget for June and July, including any loan activity and interest expense. Compute the loan balance at the end of each month.
Answer:
a. Total cash collections are as follows:
June = $605,760
July = $715,580
b. Ending units are as follows:
April = 623 units
May = 1,295 units
June = 1,055 units
July = 815 units
c-1. Units purchased are as follows:
May = 2,872 units
June = 4,760 units
July = 2,130 units
c-2. Purchases amount are as follows:
May = $315,920
June = $523,600
July = $234,300
d. Cash payments for product purchases are as follows:
June = $440,528
July = $350,020
e. Loan Balance End of Month are as follows:
June = $1,324,163
July = $2,226,541
Explanation:
Note: See the attached excel file for requirements a, b, c, d, and e.
In the attached excel file under requirement e, the following calculations is made:
June additional loan = Minimum required cash balance - June Preliminary cash balance = $110,000 - (-$1,169,663) = $110,000 + $1,169,663 = $1,279,663
July additional loan = Minimum required cash balance - July Preliminary cash balance = $110,000 - (-$792,378) = $110,000 + $792,378 = $902,378
Grouper Company purchased an electric wax melter on April 30, 2020, by trading in its old gas model and paying the balance in cash. The following data relate to the purchase.
List price of new melter $21,804
Cash paid 13,800
Cost of old melter (5-year life, $966 salvage value) 15,456
Accumulated Depreciation-old melter (straight-line) 8,694
Secondhand fair value of old melter 7,176
Required:
Prepare the journal entries necessary to record this exchange, assuming that the exchange (a) has commercial substance, and (b) lacks commercial substance. Sage’s fiscal year ends on December 31, and depreciation has been recorded through December 31, 2020.
Answer and Explanation:
The journal entries are shown below;
a. the exchange has commercial substance
Depreciation expense (($15,456 - $966) ÷ 5 × 4 ÷ 12 ) $966
To Accumulate depreciation $966
(being depreciation expense is recorded)
New Melter ($13,800 + $7,176) $20,976
accumulated depreciation ($8,694 + $966) $9,660
To loss on sale of melter $1,380
To old melter $15,456
To cash $13,800
(being equipment exchange is recorded)
b. The exchange lacks commercial substance
Depreciation expense (($15,456 - $966) ÷ 5 × 4 ÷ 12 ) $966
To Accumulate depreciation $966
(being current depreciation expense is recorded)
New Melter ($13,800 + $7,176) $20,976
accumulated depreciation ($8,694 + $966) $9,660
To loss on sale of melter $1,380
To old melter $15,456
To cash $13,800
(being equipment exchange is recorded)
accounting is the language of business
You are evaluatig an equity investment in a public company called Corona Corp (ticker: COR). You expect the company will pay a $2.00 dividend per share at the end of next year and that dividends will grow at a constant rate of 5% annually in the future. You require a 13% return on investments in equity. Based on these assumptions, what is the fair value of a share of COR stock today?
Answer:
$25
Explanation:
according to the constant dividend growth model
price = d1 / (r - g)
d1 = next dividend to be paid
r = cost of equity
g = growth rate
2/ 0.13 - 0.08 = $25
On May 13, 2020, Otto, Parker and Quentin bought a parcel of land as tenants in common. The deed provided that Otto owned 1/2 the property and Parker and Quentin each owned 1/4 each. If Quentin dies, the property will be divided as follows:
a. Otto 1/2. Parker 1/2
b. Otto 5/8, Parker 3/8
c. Otto 1/3, Parker 1/3, Quentin's heirs 1/3
d. Otto 1/2. Parker 1/4, Quentin's heirs 1/4
Answer:D. Otto 1/2. Parker 1/4, Quentin's heirs 1/4
Explanation:
Based on the information given in the question, if Quentin dies, the property will be divided as Otto 1/2. Parker 1/4, Quentin's heirs 1/4.
When a tenant in common dies, it should be noted that their share of a property will be passed to their legal heir and thesame percentage of ownership will be shared by the co-owners. Hence the correct option is D
In the trade-off theory, debt levels chosen to balance interest tax shield against the costs of financial distress imply:________
a. an interior optimum (firm value maximizing) debt ratio
b. that investors are irrational, since they require lower returns the hgher the risk
c. that a firm would use little to no debt
d. that a firm would borrow as much as possible
Answer:
a) an interior optimum (firm value maximizing) debt ratio
Explanation:
Trade off Theory is about capital structure of an economic unit. It mentions about the benefit of debt - ie tax saving, as interest on debt is tax deductible; & cost of debt - bankruptcy & insolvency risk, due to fix interest cost.
The theory depicts the debt level, which is best to - balance interest tax shield against the costs of financial distress imply, which implies that it seeks a balance between benefit & cost of debt.
So, the theory finds the best interior optimum (firm value maximising) debt equity ratio.
Carts Corporation
is trying to determine how long it takes for one product to pass through the production process. The following information was gathered regarding how many days the product spent in various production activities:
Activity Number of Days
Inspection . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Storage . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Assembly . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Handling . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Painting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Packaging . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
a. Which of the above activities are value-added?
b. What is Carts' total cycle time?
c. Determine Carts' manufacturing efficiency ratio.
d. If Carts implements a total quality management program and a just-in-time inventory system, which of the above activities could be eliminated? What would be the change in Carts' manufacturing efficiency ratio?
Answer:
Following are the solution to the given points:
Explanation:
For point a:
[tex]\text{Value added activities = Assembly and Paintings}[/tex]
For point b:
[tex]Activity \ \ \ \ \ \ \ \ \ \ \ \ \ Number \ of \ days \\\\[/tex]
[tex]Inspection \ \ \ \ \ \ \ \ \ \ \ \ \ 4 \\\\ Storage\ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ 3\\\\ Assembly\ \ \ \ \ \ \ \ \ \ \ \ \ \ \ 5\\\\ Handling \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ 2\\\\ Painting \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ 3\\\\ Packaging \ \ \ \ \ \ \ \ \ \ \ \ \ 1\\\\ Total \ cycle\ time \ \ \ \ \ 18\ days[/tex]
For point c:
[tex]\text{Efficiency ratio of production} = \frac{\text{time added value}}{\text{total cycle time}} \\\\[/tex]
[tex]\text{VAT = 5 days assembled + 3 days in paint = 8 days in painting}[/tex]
[tex]= \frac{8}{18} \\\\ = 44.44\%[/tex]
For point d:
In inspection, TQM will cut back 4 days
JIT reduces storage time by 3 days.
Reduction total = 7 days
Retrofiled The total time of the cycle[tex]= 18 \ days - 7 \ days = 11\ days[/tex]
Revised efficiency of production [tex]=\frac{8 \ days}{ 11\ days} =72.73\%[/tex]
The value added activities are assembly and paintings, the total chart's time is 18 days, the manufacturing ratio is 44.44% and the revised value of efficiency is 72.73%.
For point A:
What are value added activities?Value Added Activities are those activities that modify the product from raw material into finished goods that the customer is willing to pay for.
Hence, the value added activities are assembly and paintings.
For point B:
The chart of the total cycle time is given in the image below:
For option C:
[tex]\text{Production Efficiency Ratio}=\dfrac{\text{Time Value Added}}{\text{Sum of Time Cycle}}\\\\\text{Value Added Time(VAT)}= \text{Assembled 5 Days}+\text{Days in Paint}\\\\=8\text{Days}\\\\=\dfrac{8}{18}= 44.44\%.[/tex]
For option D:
Time Quantity Management = 4 days,
Just-in-time Inventory Shortage Time= 3 days,
Reduction Total = 7 days,
[tex]\text{Total Time of cycle}=\text{18 days - 7 days}\\\\=11\text{days}[/tex]
[tex]\text{Revised Efficiency Production}=\frac{\text{8 days}}{\text{11 days}}\\\\\\=72.73\%.[/tex]
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Select the correct answer from each drop-down menu.
Jerry's company has launched a new product following the market penetration pricing. What rates would his products have and on what would he
spend a lot on?
Jerry's company has launched a new product following the market penetration pricing. Thus, his products have____
and he is spending a lot on
____the product.
price
First blank:
A.) a high
B.) a low
C.) an above average
Second blank:
A.) packaging
B.) manufacturing
C.) advertising
Jerry's company has launched a new product following the market penetration pricing. Thus, his products have a low price and he is spending a lot on the advertising product price.
Using a lower price during the initial offering of a new product or service, firms utilize penetration pricing as a marketing approach to draw clients to the new offering.
A new product or service can more easily enter the market and draw clients away from rivals thanks to a reduced price. Pricing for market penetration is based on the principle of initially offering a new product at low rates to attract the attention of as many consumers as possible.
A price penetration strategy seeks to increase market share by luring consumers to test new products in the hopes that they would remain loyal after prices return to normal. An online news site that offers a trial month of a subscription-based service is an example of penetration pricing.
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Complete the following sentence.
Today, marketing strategies are generally divided into two sectors: inbound and
Answer:
Today, marketing strategies are generally divided into two sectors: inbound and
outbound.
Explanation:
Marketing strategies are broadly divided into two. One is inbound marketing strategy, which aims to attract customers, who have already indicated interest in an entity's products and services. They are already out there trying to reach out to the entity in order to satisfy their needs. As a marketing strategy category, it utilizes pull marketing activities to create brand awareness and attract willing new customers, including content, blogs, events, search engine optimization (SEO), and social media marketing. Outbound marketing strategy uses push marketing activities to chase customers. For example, it uses TV, radio, and other media ads, trade shows, cold calling, and cold emails.
The following transactions occurred during July:
a. Received $1,090 cash for services provided to a customer during July.
b. Issued common stock for $5,800 cash.
c. Received $940 from a customer in partial payment of his account receivable which arose from sales in June.
d. Provided services to a customer on credit, $565.
e. Borrowed $7,900 from the bank by signing a promissory note.
f. Received $1,440 cash from a customer for services to be performed next year.
Required:
What was the amount of revenue for July?
Answer:
$1,655
Explanation:
Revenue results from transactions with customers. We recognize revenue when services or goods have been transferred to customers not as when they are paid.
Calculation of Revenue for July :
Transaction a $1,090
Transaction d $565
Total Revenue $1,655
therefore,
The amount of revenue for July is $1,655.
a.) Suppose that South Pangean debt is $100 million and the interest rate it pays on that debt is 4 percent. That means its interest payments must be $ million.
b.) If South Pangean expenditures are $30 million without interest payments, that means its expenditures with interest payments are $ million.
Answer:
a
$4 million
b.
expenditures with interest payments
Explanation:
a.
The interest payment is the value of debt taken multiplied by the interest rate on the debt.
In other words, the interest payment is computed using the below formula:
annual interest payment=value of debt*interest rate
value of debt=$100 million
interest rate=4%
annual interest payment=$100 million*4%
annual interest payment=$4 million
b.
The expenditures with interest payments are is the expenditures without interest payments plus interest payments determined as $4million above
expenditures with interest payments=expenditures without interest payments+interest payments
expenditures without interest payments=$30 million
interest payments=$4 million
expenditures with interest payments=$30million+$4million
expenditures with interest payments=$34million
The interest amount for the $ 100 million at 4% interest rate has been $4 million. The expenditure of South Pangean with interest has been $34 million.
(a) Interest has been the amount paid to the sum principal amount based on the interest rate.
Annual interest can be calculated as:
Interest = Interest rate [tex]\times[/tex] Principal sum
Interest = 4% [tex]\times[/tex] $100 Million
Interest = [tex]\rm \dfrac{4}{100}[/tex] [tex]\times[/tex] $100 Million
Interest = $ 4 Million.
(b) The expenditures with interest have been the sum of expenditure and the interest amount.
Expenditure with interest = Expenditure + Interest
Expenditure with interest = $ 30 + $ 4 million
Expenditure with interest = $ 34 million.
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You are considering an investment that costs $152,000 and has projected cash flows of $71,800, $86,900, and -$11,200 for years 1 to 3, respectively. If the required rate of return is 15.5 percent, should you accept the investment based solely on the internal rate of return rule? Why or why not?
a. Yes; The IRR exceeds the required return.
b. No; The IRR exceeds the required return.
c. You cannot apply the IRR rule in this case.
d. Yes; The IRR is less than the required return.
Answer:
c
Explanation:
Internal rate of return is the discount rate that equates the after-tax cash flows from an investment to the amount invested
The IRR would give conflicting answers in this case because a stream of positive cash flows is followed by negative cash flow
IRR can only be used when a negative cash flow is followed by positive cash flows
In this question there are two negative cash flows in year 0 and year 3
On July 1, Lopez Company paid $1,500 for six months of insurance coverage. No adjustments have been made to the Prepaid Insurance account, and it is now December 31. Zim Company has a Supplies account balance of $5,600 at the beginning of the year. During the year, it purchased $2,300 of supplies. As of December 31, a physical count of supplies shows $950 of supplies available.
Required:
Prepare the adjusting journal entry to correctly report the balance of the Supplies account and the Supplies Expense account as of December 31, 2017.
Answer:
Dr Supplies expense $6,950
Cr Supplies $6,950
Explanation:
Preparation of the adjusting journal entry to correctly report the balance of the Supplies account and the Supplies Expense account as of December 31, 2017.
Dr Supplies expense $6,950
Cr Supplies $6,950
($5,600+$2,300-$950)
(To record the balance of the Supplies account and the Supplies Expense account)
Beginning Supplies account balance $5,600
Add purchased $2,300
Less physical count of supplies $950
=$6,950
Speedy has net income of $30,955, and assets at the beginning of the year of $212,000. Assets at the end of the year total $258,000. Compute its return on assets.
Answer:
13.17%
Explanation:
Given that;
Net income = $30,955
Asset at the beginning of the year = $212,000
Asset at the end of the year = $258,000
Return on assets = Net income / Average total assets
But,
Average total assets = (Assets at the beginning of the year + Assets at the end of the year ) / 2
Average total assets = ($212,000 + $258,000) / 2
Average total assets = $235,000
Therefore,
Return on assets = ($30,955 / $235,000) × 100
Return on assets = 13.17%
A company is considering the purchase of new equipment for $480,000. The projected after-tax net income is $80,000 per year after deducting $160,000 of annual depreciation expense. The equipment has a useful life of 3 years and no salvage value. What is the payback period for the new equipment?
a. 2 years.
b. 3 years.
c. 4 years.
d. 5 years.
e. 6 years.
Answer:
a. 2 years.
Explanation:
Annual cash flow = After-tax net income + Depreciation
Annual cash flow = $80,000 + $160,000
Annual cash flow = $240,000
Payback Period = Cost of Project / Annual cash Flow
Payback Period = $480,000 / $240,000
Payback Period = 2 years
So, the payback period for the new equipment is 2 years.
Money is neutral in:___________
A. the short run, since it cannot alter the real aggregate output or price level in the short run.
B. both the short and long run, since it cannot alter price levels or aggregate output in the long and short run.
C. the long run, since it only affects the price level, but not aggregate output or interest rates.
D. the short run, since it cannot alter the price levels or interest rate in the short run.
Answer:
C
Explanation:
Money neutrality is a theory which submits that money supply only affect nominal variable and not real variables.
Nominal variables include price, wages and exchange rate
real variables include employment and real GDP
Money is only neutral in the long run and not in the short run because of money illusion. Money illusion causes economic agents to respond to money supply changes.
Money is neutral only in the long run
During 2016, its first year of operations, Baginski Steel Corporation reported a net operating loss of $375,000 for financial reporting and tax purposes. The enacted tax rate is 40%.
Required:
1. Prepare the journal entry to recognize the income tax benefit of the net operating loss. Assume the weight of available evidence suggests future taxable income sufficient to benefit from future deductible amounts from the net operating loss carryforward.
2. Show the lower portion of the 2016 income statement that reports the income tax benefit of the net operating loss.
Answer:
1. Debit Deferred Tax Liability for $150,000; and Credit Income Tax Benefit -Operating Loss for $150,000.
2. See part 2 below for how it is shown.
Explanation:
1. Prepare the journal entry to recognize the income tax benefit of the net operating loss.
Income tax benefit = Net operating loss * Tax rate = $375,000 * 40% = $150,000
The journal entry will look as follows:
Particulars Debit ($) Credit ($)
Deferred Tax Liability 150,000
Income Tax Benefit - Operating Loss 150,000
(To record the income tax benefit)
2. Show the lower portion of the 2016 income statement that reports the income tax benefit of the net operating loss.
This can be shown as follows:
Baginski Steel Corporation
Income Statement
For the Year Ended 2016
Details $
Net operating loss (375,000)
Income tax benefit 150,000
Net loss (225,000)
Choose the term that best matches the description given.
Goals that include some details are called
specific goals
realistic goals
planning goals
Biopure is a company that manufactures and markets oxygen therapeutics. Its products are Hemopure for human use and Oxyglobin for animal use. Both have been developed as alternatives to red blood cell transfusions. Which of the following would be part of Biopure's internal environment?
a. approval by the U.S.Food and Drug Administration to allow veterinarians to use Oxyglobin.
b. the global market for the raw materials needed to make Hemopure and Oxyglobin
c. the patented manufacturing process that Biopure uses to produce Hemopure and Oxyglobin
d. a competitor developing a similar product
e. changes in patent law
Answer: c. the patented manufacturing process that Biopure uses to produce Hemopure and Oxyglobin
Explanation:
The internal environment of a company refers to those actions and activities that have to do with the way the company is running from within the country such as corporate culture and management.
In patenting, the Patent that was received will be company propriety and as no one outside the company can access it, it is part of the internal environment that works to ensure that that the company is ran smoothly.
home trade helps in proper utilization of local resources how
1. Higher trade volumes
2. Greater opportunities to capitalize on comparative advantages
3. More efficient use of raw materials
4. Stronger economic growth
Sabrina, Kris, and Kelly are the only three residents of the small town of Charleston. They are considering whether to hire a police officer to patrol the town. Sabrina values the police officer at $610 per week, Kris values the police officer at $230 per week, and Kelly values the police officer at $150 per week. The competitive wage for a police officer is $900 per week.
a. If the protection provided by the police officer to one resident does not diminish the protection provided to the other residents, then the police officer is ____________
1. a commons
2. an excludable
3. a rival
4. a nonrival
5. a nonexcludable good.
b. Suppose Sabrina proposes a tax whereby all three residents split the cost of the police officer equally.
1. Will the majority of them support this tax?
2. No, they will not support the tax.
3. Yes, they will support the tax.
4. Is this outcome socially efficient?
5. This outcome is not socially efficent.
6. This outcome is socially efficient.
Answer:
a. 4. a nonrival
b. 1. a. No, they will not support the tax.
2. b. This outcome is socially efficient.
Explanation:
When the services provided by a good to one person does not diminish the good's ability to provide those same services for another, the good is said to be non-rival in nature.
If an equal tax is proposed, not everyone would be in support of it because some would be paying more than they value the policeman. An equal tax would be:
= 900 salary / 3 = $300
This is more than the value that both Kris($230) and Kelly ($150) value the police officer at.
This outcome however, is socially efficient because when costs are split evenly, a socially optimal and efficient outcome often results.
Which of the following allows an individual to gain from unexpected inflation?
On January 1, 2018, Splash City issues $340,000 of 9% bonds, due in 20 years, with interest payable semiannually on June 30 and December 31 each year. Assuming the market interest rate on the issue date is 8%, the bonds will issue at $373,648.
Required:
1. Complete the first three rows of an amortization table.
Date Cash Paid Interest Expense Decrease in Carrying Value Carrying Value
1/1/18
6/30/18
12/31/18
On January 1, 2018, Splash City issues $340,000 of 9% bonds, due in 20 years, with interest payable semiannually on June 30 and December 31 each year. Assuming the market interest rate on the issue date is 8%, the bonds will issue at $373,648.
2. Record the bond issue on January 1, 2018, and the first two semiannual interest payments on June 30, 2018, and December 31, 2018.
Answer:
Splash City
1. 1. The first three rows of an amortization table.
Date Cash Paid Interest Expense Decrease in Carrying Value
Carrying Value
1/1/18 $0 $373,648
6/30/18 $15,300 $14,946 $354 373,294
12/31/18 $15,300 14,932 368 372,926
2. Journal Entries:
January 1, 2018L:
Debit Cash $373,648
Credit 9% Bonds Payable $340,000
Credit Bonds Premium $33,648
To record the proceeds from the bond issue, including the premium.
June 30, 2018:
Debit Interest Expense $14,946
Debit Amortization of Bonds Premium $354
Credit Cash $15,300
To record the first semiannual interest payment.
December 31, 2018:
Debit Interest Expense $14,932
Debit Amortization of Bonds Premium $368
Credit Cash $15,300
To record the second semiannual interest payment.
Explanation:
a) Data and Calculations:
January 1, 2018:
Face value of 9% bonds issued = $340,000
Proceeds from issue of bonds = 373,648
Premium on issue of bonds = $33,648
Coupon Interest rate = 9%
Payment = Semiannually on June 30 and December 31
Market interest rate = 8%
June 30:
Interest expense = $14,946 ($373,648 * 4%)
Cash payment = 15,300 ($340,000 * 4.5%)
Amortized premium $354
Fair value of bonds = $373,294 ($373,648 - $354)
December 31:
Interest expense = $14,932 ($373,294 * 4%)
Cash payment = 15,300 ($340,000 * 4.5%)
Amortized premium $368
Fair value of bonds = $372,926 ($373,294 - $368)
On September 30, 2018, Corso Steel acquired a patent from Thermo Steel. The agreement specified that Corso will pay Thermo $1,000,000 immediately and then another $1,000,000 on September 30, 2020. An interest rate of 8% reflects the time value of money for this type of loan agreement.
What amount of interest expense, if any, would Corso record on December 31, 2019, the company’s fiscal year end?
a. $68,687.
b. $80,000.
c. $60,000.
d. $69,959.
Answer: $69,959
Explanation:
The amount of interest expense, that Corso will record on December 31, 2019, the company’s fiscal year end will be calculated thus:
First, we calculate the present value of payment which will be made on September 30,2020 and this will be:
= $1000000 × 0.857339
= $857339
Then, the interest expense on December 31,2018 will be:
= $857339 × 8%/12 × 3
= $17147
Therefore, the Interest expense on December 31,2019 will be:
= ($857339 + $17147) × 8%
= $874486 × 0.08
= $69959