Answer:
asdasdasdsdsFsDFjSDGfoshdf;ocugSBD>Kfhb≈≥˚njc;Ω≈˙c/lHcS?c/kLSDJc
Explanation:
On January 1, Year 1, Missouri Company purchased a truck that cost $56,000. The truck had an expected useful life of 10 years and a $5,000 salvage value. The amount of depreciation expense recognized in Year 2 assuming that Missouri uses the double declining-balance method is:__________
Answer:
Annual depreciation= $8,160
Explanation:
Giving the following information:
Purchase price= $56,000
Useful life= 10 years
Salvage value= $5,000
To calculate the annual depreciation, we need to use the following formula:
Annual depreciation= 2*[(book value)/estimated life (years)]
Year 1:
Annual depreciation= 2*[(56,000 - 5,000) / 10]
Annual depreciation= $10,200
Year 2:
Annual depreciation= 2*[(51,000 - 10,200) / 10]
Annual depreciation= $8,160
Prior to 2021, John Inc. used sum-of-the-years'-digits depreciation on its store equipment. Beginning in 2021, John Inc. decided to use straight-line depreciation for these assets. The equipment cost $3 million when it was purchased at the beginning of 2019, had an estimated useful life of five years and no estimated residual value. To account for the change in 2021, John Inc.:_______
Answer:
Would report depreciation expense of $400,000 in its 2021 income statement
Explanation:
Calculation to determine what John will report as depreciation expense
First step is to calculate the Book value at 1/1/2021
Book value at 1/1/2021= $3,000,000 [(5/15 x $3,000,000) + (4/15 x $3,000,000)
Book value at 1/1/2021= $1,200,000
Now let calculate the New depreciation
New depreciation= $1,200,000 ÷3
New depreciation= $400,000 per year for 2021-2023
Therefore To account for the change in 2021, John Inc.:Would report depreciation expense of $400,000 in its 2021 income statement
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%
Assume that Speedo International received $400,000 cash by signing a long-term promissory note. They are required to make cash interest payments on April 30 and October 31 at an annual rate of 6%. Assuming a 12/31 year end.
Required:
What journal entries would be required at December 31?
Answer:
Dr Interest expense $4,000
Cr Interest payable $4,000
Explanation:
Based on the information given the appropiate
journal entries thatwould be required at December 31 will be to DEBIT INTEREST EXPENSE with the amount of$4,000 and CREDIT INTEREST PAYABLE with the amount of $4,000
December 31
Dr Interest expense $4,000
Cr Interest payable $4,000
(6%*$400,000*2/12)
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.
While on vacation, Kyle Kingston, the president and chief executive officer of Remstat, Inc., is called by the CEO of Viokam Corporation, who asks Kingston if Remstat would be interested in buying 25 percent of the outstanding shares of Viokam. Remstat is a billion dollar conglomerate which has contemplated acquiring Viokam for some time. Kingston tells Viokam's CEO that Remstat is not interested. Kingston tells Viokam’s CEO, however, that KKIM, Inc., would be willing to buy the shares of Viokam. Kingston is the 100 percent shareholder of KKIM. Viokam sells the shares to KKIM for $35 million. A year later, KKIM sells the shares for $55 million to a mutual fund company. When Remstat's directors discover KKIM's purchase and sale of the Viokam shares, they bring an action against Kingston on behalf of Remstat. Which of the following is correct?
1. Kingston may be held liable to Remstat because he usurped a corporate opportunity.
2. Kingston may not be held liable to Remstat because he became aware of this opportunity outside the scope of his duties as an officer of Remstat.
3. Kingston may not be held liable to Remstat because he acted within the discretion afforded him under the business judgment rule.
4. Kingston may be held liable to Remstat because he exceeded his authority to act for the corporation.
Answer: A. Kingston may be held liable to Remstat because he usurped a corporate opportunity.
Explanation:
Based on the information given in the question, the correct option is that Kingston may be held liable to Remstat because he usurped a corporate opportunity.
Usurpation of a corporate opportunity is typically regarded as a form of breach of duty and it arises when a worker in a particular company uses the information that he has for his own personal gain.
In this case, Kingston is the 100 percent shareholder of KKIM and uses the information that he has regarding the sabres to his benefit.
Therefore, the correct option is A.
Marigold Corp. and its divisions are engaged solely in manufacturing operations. The following data pertain to the segments in which operations were conducted for the year ended December 31, 2021.
Assets
Industry Revenue Profit 12/31/21
A $8010000 $1315000 $15920000
B 6740000 1122000 13840000
C 5010000 960000 10110000
D 2300000 440000 52100
In its segment information for 2018, how many reportable segments does Marigold have?
a. Three
b. Four
c. Five
d. Six
Answer: b. Four
Explanation:
A reportable segment needs to satisfy at least one of the following criteria:
Its revenues need to be 10% or more of total revenue.Its profit or less has to be 10% or more of total profit or lossIts assets have to be 10% or more of total combined assetsTotal revenue:
= 8,010,000 + 6,740,000 + 5,010,000 + 2,300,000
= $22,060,000
Total profit:
= 1,315,000 + 1,122,000 + 960,000 + 440,000
= $3,837,000
Total assets
= 15,920,000 + 13,840,000 + 10,110,000 + 5,210,000
= $45,080,000
Industry A proportion of total revenue:
= 8,010,000 / 22,060,000
= 36.3%
Qualifies as reportable segment
Industry B proportion of total revenue:
= 6,740,000 / 22,060,000
= 31%
Qualifies as reportable segment
Industry C proportion of total revenue:
= 5,010,000 / 22,060,000
= 23%
Qualifies as reportable segment
Industry D proportion of total revenue:
= 2,300,000 / 22,060,000
= 10.4%
Qualifies as reportable segment
Winslow Company expects sales of its financial calculators to be $192,000 in the first quarter and $248,000 in the second quarter. Its variable overhead is approximately 15 percent of sales, and fixed overhead costs are $49,000 per quarter.
Required:
Compute Winslow's manufacturing overhead budget for the first two quarters.
Answer:
Budgeted manufacturing overhead for 1st Quarter = [$192,000*15%] + $49,000
= $28,800 + $49,000
= $77,800
Budgeted manufacturing overhead for 2nd Quarter = [$248,000*15%] + $49,000
= $37,200 + $49,000
= $86,200
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
Which of the following is not an accurate description of the Allowance for Doubtful Accounts?
a. An estimate of the amount of accounts receivable that will not be collected,
b. An income statement account,
c. A contra account,
d. A balance sheet account.
Answer:
b. An income statement account,
Explanation:
The allowance for doubtful debts accounts is not an income statement account because it has not yet been regarded as a bad debt expense which would be shown in the income statement as an expense.
It is a contra asset account that would be deducted from the asset it relates to in the balance sheet(the accounts receivable)
So also, it is an estimate of the uncollectible portion of the accounts receivable.
Finally, the fact it is reflected in the balance sheet means it is a balance sheet account.
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
Choose the sentence that uses correct punctuation.
A. Data may be illustrated in many forms: tables, bar charts, line charts, pie charts, flowcharts, organizational charts, or photographs.
B. Data may be illustrated in many forms: tables: bar charts: line charts: pie charts: flowcharts: organizational charts: or photographs.
C. When he arrived we began the presentation. When he arrived, we began the presentation. Alex, is not attending, the sales meeting.
D. Alex is not attending the sales meeting.
Answer: A
Explanation:
"Data may be illustrated in many forms: tables, bar charts, line charts, pie charts, flowcharts, organizational charts, or photographs." uses correct punctuation. Option (a) is correct.
What do you mean by Data?Data are pieces of information that have been converted into a format that can be moved or processed quickly.
Punctuation, also known as interpunction, is the use of white space, traditional signs (also known as punctuation marks), and specific typographical methods to help readers understand and interpret written material correctly, whether they are reading it silently or loudly. "It is the practice, action, or system of adding points or other small marks into texts to facilitate understanding; segmentation of text into phrases, clauses, etc., by means of such marks," is another definition.
Therefore, Option (a) is correct. "Data may be illustrated in many forms: tables, bar charts, line charts, pie charts, flowcharts, organizational charts, or photographs." uses correct punctuation.
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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
Gloria attended a job interview. The purpose of the interview was to assess how well she performs in a discussion with six other candidates. Which type of interview did Gloria attend?
Gloria attended a [blank] interview.
Answer:
she attended a job interview.
Explanation:
Answer:
Group
Explanation:
Multiple
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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Tupperware offers a complete line of kitchen containers for storing items of all sizes. Tupperware consultants identify people who can host a party and see the latest Tupperware products. The party can be in-person in a home or online. Tupperware is an example of _______.
a. self-service technologies
b. automatic vending
c. microtargeting
d. direct retailing
Tupperware offers a complete line of kitchen containers for storing items of all sizes. Hence Tupperware is an example of direct retailing hence option D is correct .
What is Direct Retailing ?A person appointed by Amway on a principal-to-principal basis through the Direct Retailer/Seller Contract, along with any co-applicant, to carry out the sale, distribution, and marketing of Amway goods and services and to register Preferred Customers in accordance with Section 3, is referred to as a "DIRECT RETAILER."
Direct Retailers must meet a predetermined sales goal within a given time frame. Direct Retailers are not granted the authority to sponsor the appointment of individuals to their teams as Direct Retailers. Model 1 according to 1 papers.
Both single-level marketing (where a direct seller makes money by purchasing goods from a parent company and selling them directly to customers) and multi-level marketing (where the direct seller may make money from both direct sales to customers) fall under the category of direct selling.
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A small town has 1,000 people, 600 of whom are healthy and 400 of whom are sick. The annual expected medical claims of the healthy and sick are $500 and $9,000, respectively. If the insurance company cannot determine who is healthy and who is sick prior to the purchase of insurance, the annual premium must be at least $____________.
a. 3,900
b. 9,000
c. 2,000
d. 4,750
Answer:
a. 3,900
Explanation:
We find the probability of healthy persons & the weak out of the total population in the town.
Probability of healthy persons
P(h) = 600/1000
P(h) = 0.6
Probability of weak persons
P(w) = 400/1000
P(w) = 0.4
We find the pay off for both the healthy and the weak, then add up to get the expected value or the minimal annual premium
Expected Value = 0.6*$500 + 0.4*$9000
Expected Value = $300 + $9000
Expected Value = $3,900
So, the annual premium must be at least $3,900.
Phelan Systems Corporation is estimating activity costs associated with producing disk drives, tapes drives, and
wire drives. The indirect labor can be traced to four separate activity pools. The budgeted activity cost and activity
base information, along with the estimated activity-base information, is provided below.
Answer:
below
Explanation:
Panamint Systems Corporation is estimating activity costs associated with producing disk drives, tapes drives, and wire drives. The indirect labor can be traced to four separate activity pools. The budgeted activity cost and activity base data by product are provided below.
Activity Cost Activity Base
Procurement $383,000 Number of purchase orders
Scheduling 211,000 Number of production orders
Materials handling 425,500 Number of moves
Product development 710,900 Number of engineering changes
Production 1,420,000 Machine hours
Number of Purchase Orders Number of Production Orders Number of Moves Number of Engineering Changes Machine Hours Number of Units
Disk drives 4,200 450 1,260 11 2,500 2,100
Tape drives 1,600 125 500 6 8,000 4,200
Wire drives 12,200 800 4,200 20 11,100 2,500
Acct. Optimistic Likely Activity Variance
ID Description Predecessor Mosta a Pessimistic Time (te) [(b - a)/6]2 Critical 7
(a) (m) (b)
1 Design package None 6 12 24 13 9 x
2 Design product 1 18 19 28 20.33 2.78 x
3 Build package 1 4 7 10 7 1
4 Secure patent 2 21 30 39 30 9 x
5 Build product 2 17 29 47 30 25 x
6 Paint 3,4,5 4 7 12 7.3 1.78 x
7 Test market 6 13 18 19 16 1 x
(m) (b) Time (te) 1 Design package
The Variance for the activity Secure patent equals to:_____.
Answer thats dificult
Explanation: thats dificult
Current Attempt in Progress
Wildhorse Company uses a periodic inventory system. For April, when the company sold 570 units, the following information is
available.
Units
Unit Cost
$28
April 1 inventory
April 15 purchase
April 23 purchase
250
350
400
1,000
34
36
Total Cost
$7,000
11,900
14,400
$33,300
Compute the April 30 inventory and the April cost of goods sold using the LIFO method.
Ending inventory
$
Cost of goods sold
$
e Textbook and Media
re to search
o
SI
* 5 0
Answer:
units
Explanation:
Units Unit Cost Total Cost
April 1 inventory 250 $28 $ 7,000
April 15 purchase 350 34 11,900
April 23 purchase 400 36 14,400
1,000 $33,300
If the seller has reason to believe that nonconforming goods will be acceptable to the buyer, this could constitute as an exception to the Perfect Tender Rule. In such instances, upon notification of the seller's intent to promplty cure the nonconformity, the seller must be given a reasonable time within which to cure that nonconformity. This prevents the buyer from canceling the contract, and so in this instance, even if the seller has violated the Perfect Tender Rule, the seller will breach the contract only upon failure to cure after a reasonable amount of time.
A. True
B. False
Answer:
Perfect Tender Rule
A. True
Explanation:
The Uniform Commercial Code's Article 2 recognizes the legal right of a buyer of goods to demand precise conformity of the goods to the product description in quality, quantity, and delivery manner. Therefore, the buyer may reject goods offered by the seller which do not conform to the earlier product descriptions. This rule is called the Perfect Tender Rule. An exception to this rule will be if the seller has a reason to believe that non-conforming goods will be acceptable to the buyer.
Given the Production Function Q = 72X + 15X2 - X3, where Q =Output and X=Input
a) What is the Marginal Product (MP) when X = 8?
b) What is the Average Product (AP) when X = 6?
c) At what value of X will Q be at its maximum?
d) At what value of X will Diminishing Returns set in?
Answer:
A. 120
B. 126
C. x=12
D. x=5
Explanation:
A. Calculation to determine the Marginal Product (MP) when X = 8
Production function=Q=72x+15x^2-x^3
Let x be 8
Marginal Product (MP)=dQ/dx
Marginal Product (MP)=72x+15x^2-x^3
Marginal Product (MP)=72+30x-3x^2
Now let plug in X = 8
Marginal Product (MP)=72+30(8)-3(8)^2
Marginal Product (MP)=72+240-192
Marginal Product (MP)=120
Therefore the Marginal Product (MP) when X = 8 will be 120
B. Calculation to determine the Average Product (AP) when X = 6
Average Product (AP)=Q/X
Average Product (AP)=72+15x-x^2
Let plug in x=6
Average Product (AP)=72+15(6)-(6)^2
Average Product (AP)=72+90-36
Average Product (AP)=126
Therefore the Average Product (AP) when X = 6 is 126
C. Calculation to determine at what value of X will Q be at its maximum
Maximizing Q=dQ/dx=0
Maximizing Q=72+30x-3x^2=0
Maximizing Q=3x^2-30x-72=0
Maximizing Q=x^2-10x-24=0
Maximizing Q=x^2-12x+2x-24=0
Maximizing Q=x(x-12)+2(x-12)=0
Hence:
x=12 or (x=-2)
Therefore at what value of X will Q be at its maximum will be at x=12
D. Calculation to determine At what value of X will Diminishing Returns set in
Diminishing returns=dMP/dx=d²Q/dx²
Diminishing returns=30-6x<0
Hence:
x=30/6<0
x=5<0
Therefore at what value of X will Diminishing Returns set in will be at x= 5 or when MP is at a MAXIMUM VALUE.
Apples Oranges
Units Total Utility Units Total Utility
0 0 0 0
1 15 1 22
2 28 2 41
3 39 3 58
4 48 4 73
5 55 5 85
Assume that the price of oranges increases to $2, while the price of apples remains at $1, and Linda allocates $5 of the weekly food budget to purchasing apples and oranges. If Linda wants to maximize her utility, her new consumption bundle will consist of:_______
a. 1 apple and 2 oranges.
b. 3 apples and 1 orange.
c. 5 apples and no oranges.
d. none of the above
Answer:
The correct option is d. none of the above.
Explanation:
Note: See the attached excel file for the calculations of the ratios of the marginal utility to price of each of Apples and Oranges assuming that the price of oranges increases to $2, while the price of apples remains at $1.
For two goods, utility is maximized at a point where the ratios of the marginal utility to price of the two commodities are equal. That is, for this question, Linda will maximize her utility when we have:
Marginal Utility of Apples / Price of Apples = Marginal Utility of Oranges / Price of Oranges ............... (1)
From the attached excel file, it can be observed that equation (1) does NOT hold anywhere. Therefore, the correct option is d. none of the above.
Tanner-UNF Corporation acquired as a long-term investment $300 million of 6% bonds, dated July 1, on July 1, 2021. Company management has classified the bonds as an available-for-sale investment. The market interest rate (yield) was 8% for bonds of similar risk and maturity. Tanner-UNF paid $250 million for the bonds. The company will receive interest semiannually on June 30 and December 31. As a result of changing market conditions, the fair value of the bonds at December 31, 2021, was $260 million.
Required
1.& 2. Prepare the journal entry to record Tanner-UNF's investment in the bonds on July 1, 2018 and interest on December 31, 2018, at the effective (market) rate.
3. Prepare any additional journal entry necessary for Tanner-UNF to report its investment in the December 31, 2018, balance sheet.
4. Suppose Moody's bond rating agency downgraded the risk rating of the bonds motivating Tanner-UNF to sell the investment on January 2, 2019, for $240 mllion. Prepare the journal entries necessary to record the sale, including updating the fair-value adjustment, recording any reclassification adjustment, and recording the sale.
Answer:
See the attached excel file for all the journal entries.
Explanation:
1.& 2. Prepare the journal entry to record Tanner-UNF's investment in the bonds on July 1, 2018 and interest on December 31, 2018, at the effective (market) rate.
Note: See part 1.& 2. of the attached excel file for the journal entries.
In the part part 1.& 2. of the attached excel file, we have:
Discount on bond investment (Bal. Fig) = Bond face value - Amount paid for the bond = $300 million - $250 million = $50 million
Cash interest received = Bond face value * Bond rate * (1 / 2) = $300 million *6% * 1/2 = $9 million
Interest revenue = Amount paid for the bond * Market interest rate * (1 / 2) = $250 million * 8% * (1/2) = $10 million
3. Prepare any additional journal entry necessary for Tanner-UNF to report its investment in the December 31, 2018, balance sheet.
Note: See part 3 of the attached excel file for the journal entries.
In the part part 3 of the attached excel file, we have:
Fair value adjustment = Fair value of the bonds - Amount paid for the investment - (Interest revenue - Cash interest received) = $260 million - $250 million - ($10 million - $9 million) = ($260 million - $250 million - $1 million) = $9 million
4. Suppose Moody's bond rating agency downgraded the risk rating of the bonds motivating Tanner-UNF to sell the investment on January 2, 2019, for $240 million. Prepare the journal entries necessary to record the sale, including updating the fair-value adjustment, recording any reclassification adjustment, and recording the sale.
Note: See part 4 of the attached excel file for the journal entries.
In the part part 4 of the attached excel file, we have:
Discount on bond investment = Discount on bond investment as obtained in part 1.& 2 above - (Interest revenue - Cash interest received) = $50 million - ($10 million - $9 million) = $49 million
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
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.
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.
To learn more about penetration pricing refer to:
https://brainly.com/question/13566527
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A good is non-rivalrous if:____.
A. It is not possible to prevent an individual from using the good.
B. Those who are unwilling or unable to pay for the good do not obtain its benefits.
C. The quantity of the good is affected by the price a consumer pays for the good.
D. One person's benefit from the good does not reduce the benefit available to other people.
Answer:
D. One person's benefit from the good does not reduce the benefit available to other people.
Explanation:
A product (good) can be defined as any physical object or material that typically satisfy and meets the demands, needs or wants of customers. Some examples of a product are mobile phones, television, microphone, microwave oven, bread, pencil, freezer, beverages, soft drinks etc.
According to the economist Philip Kotler in his book titled "Marketing management" he stated that, there are five (5) levels of a product. This includes;
1. Core benefit.
2. Generic product.
3. Expected product.
4. Augmented product.
5. Potential product.
The core benefit of a product can be defined as the basic (fundamental) wants or needs that is being satisfied, met and taken care of when a customer purchase a product.
A non-rivalrous product (good) is one in which a person's (buyer's) benefit from through the purchase of a good does not reduce or annul the benefit available to other people.
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)
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