Answer:
Open a new "deposit-only" bank account and link it to QuickBooks Online
Explanation:
To set up instant deposits, a QuickBooks payment account will be needed first. The debit card of the customer is used by the QuickBooks to deposit money into his or her checking account.
To begin, the customer signs into QuickBooks online. At the sales menu, the deposits tab is selected. The customer selects the Get Set Up option, enters his debit card details , a confirmation code and then verifies the newly set up account.
Tom Johnson Manufacturing intends to increase capacity through the addition of new equipment. Two vendors have presented proposals. The fixed costs for proposal A are $50,000, and for proposal B, $70,000. The variable cost for A is $12.00, and forB, $10.00. The revenue generated by each unit is $20.00.a) If the expected volume is 8,500 units, _______(proposal A or proposal
b) with a total profit = $______ should be chosen(enter your response as a whole number).
Answer:
For 8,500 units, proposal A provides a higher income ($3,000).
Explanation:
Giving the following information:
Proposal A:
Fixed cost= $50,000
Unitary cost= $12
Proposal B:
Fixed cost= $70,000
Unitary cost= $10
We need to choose the proposal with the higher income if 8,500 units are produced.
Proposal A:
Net income= 8,500*(20 - 12) - 50,000
Net income= $18,000
Proposal B:
Net income= 8,500*(20 - 10) - 70,000
Net income= $15,000
For 8,500 units, proposal A provides a higher income ($3,000).
The 2020 accounting records of Skysong, Inc. reveal these transactions and events.
Payment of interest $10,800 Collection of accounts receivable $189,200
Cash sales 50,900 Payment of salaries and wages 56,900
Receipt of dividend revenue 19,000 Depreciation expense 16,100
Payment of income taxes 15,700 Proceeds from sale of vehicles 12,100
Net income 38,000 Purchase of equipment for cash 21,900
Payment of accounts payable Loss on sale of vehicles 3,100
For merchandise 115,600 Payment of dividends 14,700
Payment for land 73,700 Payment of operating expenses 27,600
Required:
Prepare the cash flows from operating activities section using the direct method.
Answer:
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Adams Company has two products: A and B. The annual production and sales of Product A is 2,300 units and of Product B is 1,700 units. The company has traditionally used direct labor-hours as the basis for applying all manufacturing overhead to products. Product A requires 0.3 direct labor-hours per unit and Product B requires 0.6 direct labor-hours per unit. The total estimated overhead for next period is $105,475.
The company is considering switching to an activity-based costing system for the purpose of computing unit product costs for external reports. The new activity-based costing system would have three overhead activity cost pools--Activity 1, Activity 2, and General Factory--with estimated overhead costs and expected activity as follows:
Total Estimated
Overhead
Costs Expected Activity
Product A Product B Total
Activity 1 $32,592 1,600 1,200 2,800
Activity 2 18,564 2,300 800 3,100
General Factory54,319 690 1,020 1,710
Total $105,475
(Note: The General Factory activity cost pool's costs are allocated on the basis of direct labor-hours.)
The overhead cost per unit of Product B under the traditional costing system is closest to:________.
a. $20.30
b. $14.62
c. $16.71
d. $37.01
Answer:
The correct answer is D.
Explanation:
To calculate the predetermined manufacturing overhead rate we need to use the following formula:
Predetermined manufacturing overhead rate= total estimated overhead costs for the period/ total amount of allocation base
Total estimated overhead= $105,475
Total direct labor hours= (2,300*0-3) + (1,700*0.6)
Total direct labor hours= 1,710
Predetermined manufacturing overhead rate= 105,475 / 1,710
Predetermined manufacturing overhead rate= $61.68 per direct labor hour
Now, we can allocate overhead to Product B:
Allocated MOH= Estimated manufacturing overhead rate* Actual amount of allocation base
Allocated MOH= 61.68*(0.6*1,700)
Allocated MOH= $62,913.6
Finally, the cost per unit:
Cost per unit= 62,913.6/1,700
Cost per unit= $37
Two different manufacturing processes are being considered for making a new product. The first process is less capital-intensive, with fixed costs of only per year and variable costs of per unit. The second process has fixed costs of but variable costs of only per unit.
What is the break-even quantity, beyond which the second process becomes more attractive than the first?
the volume at which the second process becomes more attractive is ..... units
Answer:
Hello your question is incomplete below is the complete question
Two different manufacturing processes are being considered for making a new product. The first process is less capital-intensive, with fixed costs of only $49,700 per year and variable costs of $740 per unit. The second process has fixed costs of $391,000 but variable costs of only $160 per unit. a. What is the break-even quantity, beyond which the second process becomes more attractive than the first? the volume at which the second process becomes more attractive is ..... units
answer : At ≥ 589 units the second process becomes more attractive
Explanation:
A) Determine the breakeven quantity that makes the second process more attractive
the second process has a higher fixed cost of $391000
x = volume of sales that makes process 1 as profitable as process 2
sales = fixed cost + Total variable cost
profit = (( selling price ) * X ) - (variable cost * X ) - fixed cost
Assuming the profit made from process 1 = process 2
((selling price * X ) - ( variable cost of process 1 * X ) - fixed cost of process 1 =((selling price * X ) - ( variable cost of process 2 * X ) - fixed cost of process 2
hence ;
x = ( fixed cost of process 2 - fixed cost of process 1 ) / ((variable cost of process 1) - (variable cost of process 2 ))
= ( 391000 - 49700 ) / ( 740 - 160 )
= 588.44 units ≈ 588 units ( both process will yield same profitability
At ≥ 589 units the second process becomes more attractive
Piekos Corporation incurred $90,000 of actual Manufacturing Overhead costs during June. During the same period, the Manufacturing Overhead applied to Work in Process was $92,000. The journal entry to record the application of Manufacturing Overhead to Work in Process would include a:
Answer:
C. credit to Manufacturing Overhead of $92,000
Explanation:
The journal entry for the application of Manufacturing to Work in Process amounting to $92,000 would be as follows:
Dr. ($) Cr. ($)
Work in Process 92,000
Manufacturing Overhead 92,000
The other options are incorrect either due to wrong particular used or due to incorrect amount such as in option (b) where the Debit to Work in Process is correct but the amount $90,000 is wrong. Hence, the option (c) Credit to Manufacturing Overhead of $92,000 is the correct answer.
Smart Watch Company reported the following income statement data for a 2-year period.
2019 2020
Sales revenue $220,000 $250,000
Cost of goods sold
Beginning inventory 32,000 44,000
Costs of goods purchased 173,000 202,000
Cost of goods available for sale 205,000 246,000
Ending inventory 44,000 52,000
Cost of goods sold 161,000 194,000
Gross profit $59,000 $56,000
Smart uses a periodic inventory system. The inventories at January 1, 2019, and December 31, 2020, are correct. However, the ending inventory at December 31, 2019, was overstated $6,000.
Required:
a. Prepare correct income statement data the 2 years.
b. What is the cumulative effect of the inventory error on total gross profit for the 2 years?
Answer and Explanation:
a. The preparation of the correct income statement is as follows:
Year 2019 2020
Sales revenue $220,000 $250,000
Cost of goods sold
Beginning inventory $32,000 $38,000
Add: Costs of goods
purchased $173,000 $202,000
Cost of goods available for sale $205,000 $240,000
Less: Ending inventory -$38,000 -$52,000
($44,000 - $6,000 )
Cost of goods sold $167,000 $188,000
Gross profit $53,000 $62,000
b. The cumulative effect is
Incorrect gross profit = $59,000 + $56,000 = $115,000
Correct gross profit = $53,000 + $62,000 = $115,000
Net effect would be zero
Healy Corporation recorded service revenues of $200,000 in 2014, of which $80,000 were on credit and $120,000 were for cash. Moreover, of the $80,000 credit sales for 2014, Healy collected $20,000 cash on those receivables before year-end 2014. The company also paid $40,000 cash for 2014 wages. Its employees also earned another $20,000 in wages for 2014, which were not yet paid at year-end 2014.
Compute the company’s net income for 2014.
Answer:
$140,000
Explanation:
Computation of the company’s net income for 2014.
Using this formula
Net income=Revenue – Expenses
Let plug in the formula
Net income=$200,000 - $40,000+$20,000
Net income= $140,000
Therefore the company’s net income for 2014 will be $140,000
Answer:
$140,000
Explanation:
Name at least 4 of the sources of ethical issues
Answer:
Religion:
Culture:
Law:
Corresponds to Basic Human Needs:
Credibility in the Public:
Credibility with the Employees:
Better Decision Making:
Profitability:
Answer:
Religion:
Culture:
Law:
Basic Human Needs
Explanation:
Ethical challenges and their attendant dilemmas may be caused by failure of personal mentality problems with personal values and organizational goals; organizational goals versus social values and harmful, but popular products.
What Does Ethical Issues Mean?
Ethical issues happen when a given decision, scenario or activity creates a problem with a society's moral principles These conflicts occasionally legally dangerous, since some of the possible ways to solve the issue might breach a particular law.
hope this helps!
-Tobie
Sprinkle Inc. has outstanding 10,000 shares of $10 par value common stock. On July 1, 2020, Sprinkle reacquired 200 shares at $91 per share. On September 1, Sprinkle reissued 80 shares at $102 per share. On November 1, Sprinkle reissued 120 shares at $70 per share. Prepare Sprinkle's journal entries to record these transactions using the cost method.
Answer:
7/1/20
Dr Treasury Stock $18,200
Cr Cash $18,200
9/1/20
Dr Cash $8,160
Cr Treasury Stock $7,280
Cr Paid-in Capital - Treasury Stock $880
1/1/20
Dr Cash $8,400
Dr Paid-in Capital - Treasury Stock $2,520
Cr Treasury Stock
Explanation:
Preparation of Sprinkle's journal entries to record these transactions using the cost method.
7/1/20
Dr Treasury Stock $18,200
(200 shares * $91 per share)
Cr Cash $18,200
(Being To record the reacquired 200 shares)
9/1/20
Dr Cash $8,160
(80 shares * $102 per share)
Cr Treasury Stock $7,280
(80 shares * 91 per share)
Cr Paid-in Capital - Treasury Stock $880
($8,160-$7,280)
(Being To record the reissue of treasury stock)
1/1/20
Dr Cash $8,400
(120 shares * $70per share)
Dr Paid-in Capital - Treasury Stock $2,520
($91- $70 = $21* 120 shares)
Cr Treasury Stock
(120 shares * $91 per share) $10,920
(Being To record the reissue of treasury stock)
On July 1, 2020, Splish Brothers Inc. pays $24,900 to Kalter Insurance Co. for a 3-year insurance contract. Both companies have fiscal years ending December 31. For Splish Brothers Inc., journalize and post the entry on July 1 and the annual adjusting entry on December 31. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. Record journal entries in the order presented in the problem.)
Answer and Explanation:
The journal entries are shown below:
On July 1
Prepaid Insurance $24,900
To Cash $24,900
(being the prepaid insurance is recorded)
Here prepaid insurance is debited as it increased the assets and cash is credited as it decreased the assets
On Dec 31
Insurance expense $4,150 ($24,900 ×6 ÷ 36)
To Prepaid Insurance $4,150
(being insurance expense is recorded)
The insurance expense is debited as it increased the expenses and credited the prepaid insurance as it decreased the assets
functions of a property manager
Doug works as the Heavy Haul Manager for Lone Star Transportation. He is currently working on a wind farm project and deciding which drivers of his team will work on the project and which field supervisors will work on communicating with GE who is building the wind farm. He is also assigning drivers certain sections of the wind turbines to ensure that the parts are delivered in the correct order for the project. Which of the following management functions is Doug undertaking?
A. Scrutinizing.
B. Planning.
C. Organizing.
D. Envisioning.
E. Controlling.
Answer:
C
Explanation:
A firm must choose between two investment alternatives, each costing $105,000. The first alternative generates $35,000 a year for four years. The second pays one large lump sum of $152,500 at the end of the fourth year. If the firm can raise the required funds to make the investment at an annual cost of 9 percent, what are the present values of two investment alternatives
Answer:
Present Value of first option:
= -105,000 + 35,000/ (1 + 9%) + 35,000/(1 + 9%)² + 35,000/(1 + 9%)³ + 35,000/(1 + 9%)⁴
= -105,000 + 113,390.19
= $8,390.20
Present Value of second option:
= -105,000 + 152,500/ (1 + 9%)⁴
= -105,000 + 108,034.84
= $3,034.84
Automation Inc. is a company that provides wireless telecommunications network in several cities in the Midwest region, and the company plans to know more about its customers. The company found that one of his customers has a short customer history of 35, an above-average purchase amount of 75, a low repurchase desirability of 25, a weak product preference of 20, and the customer does not recommend the company's services to potential customers.
Required:
Based on the values provided, what is this customer's loyalty index?
Answer:
2,625
Explanation:
The customer's loyalty index is calculated by multiplying the customer's average purchase amount by the average purchasing frequency. Since both of these values are provided to us in the question we can simply go ahead and multiply them together to get his/her loyalty index.
35 * 75 = 2,625
Finally, we can see that the loyalty index of the customer in question is 2,625
Organization Weighs Use of Open Source Software. You began operating a small general electric contracting company two years ago. Originally, it was just you and your cousin, but it has grown to five licensed electricians, plus one office manager who takes calls from customers, schedules the work, and orders parts and supplies. Your company handles a wide range of work, including installing new circuit breaker panels, rewiring existing electrical systems for renovations and additions, and installing residential light fixtures, security lighting systems, swimming pool lighting, and ceiling fans. Business has really taken off, and your current manual systems and procedures can no longer keep pace. The office manager has been exploring several options and has identified three different software packages designed for small contractors. Each one of the packages includes software designed for managing parts and supplies inventory, scheduling jobs, and invoicing customers. One of the packages also provides the capability to perform accounts receivable and accounts payable functions. Two of the software packages are from large, well-known companies, and both have an initial licensing cost of roughly $550 plus $100 per year for software support. The other software package is open-source software, with no initial cost and no support cost. The office manager is unsure how to proceed, but has your agreement to spend up to $1000 on new software.
Which one of the following should be your next step?
a. Define the basic business functions that you need the software to be able perform.
b. Determine the date by which you need the new software installed and operational.
c. Talk to your cousin Vinnie who is an accountant in a large manufacturing firm.
d. Set an exact limit on how much you are willing to spend on office software.
Answer:
a. Define the basic business functions that you need the software to be able to perform.
Explanation:
The main function of a business needs to be determined so that business strategy can be formulated. The office manager has made an agreement to spend up to $1000 on the new software. It is now required to determine the basic functions which are needed in the new software for business functioning.
Patterson Corporation expects to incur $70,000 of factory overhead and $60,000 of general and administrative costs next year. Direct labor costs at $5 per hour are expected to total $50,000. If factory overhead is to be applied per direct labor hour, how much overhead will be applied to a job incurring 20 hours of direct labor
Answer:
$140
Explanation:
With regards to the above, since the factory overhead is to be applied per direct labor hour
= [$70,000 ÷ ($50,000 ÷ $5) 20 hours]
= $70,000 ÷ 10,000 × 20 hours
= $7 × 20 hours
= $140
Therefore, $120 will be applied to job incurring 20 hours of direct labor
As diversity grows in both society and the workplace, interacting and communicating with your coworkers will present specific challenges and rewards. It is important to be sensitive to the diverse backgrounds of your coworkers and to understand how to navigate an increasingly diverse workplace. Which of the following are appropriate strategies for communication in diverse workplaces?
A. Understand the value of difference.
B. Seek training.
C. Use stereotypes to understand others.
D. Focus on cultural differences.
E. Practice ethnocentrism.
F. Develop healthy bias.
G. Build on similarities.
Answer:
A)Understand the value of difference.
B)Seek training.
G)Build on similarities.
Explanation:
A)When one find his/ her self in a diverse work environment, one should understand that people are created differently with different behavior, understanding this differences will enable individual to work together to achieve high productivity.
B) by seeking training, ways to relate with coworkers can be learnt therefore enabling unity in the organization and team work would be easier.
C) Building similarities will lead to a acceptance of differences that exist between co-workers then this will enable good relationship s.
Air United, Inc. manufactures two products: missile range instruments and space pressure gauges. During April, 50 range instruments and 200 pressure gauges were produced, and overhead costs of $97,045 were estimated. An analysis of estimated overhead costs reveals the following activities.
Activities Cost Drivers Total Cost
1. Materials handling Number of requisitions $40,000
2. Machine setups Number of setups 21,500
3. Quality inspections Number of inspections 33,000
$94,500
The cost driver volume for each product was as follows:
Cost Drivers Instruments Gauges Total
Number of requisitions 400 600 1,000
Number of setups 200 300 500
Number of inspections 200 400 600
Required:
a. Determine the overhead rate for each activity.
b. Assign the manufacturing overhead costs for April to the two products, using activity-based costing.
Answer:
Results are below.
Explanation:
First, we need to calculate the activities predetermined overhead rate:
Predetermined manufacturing overhead rate= total estimated overhead costs for the period/ total amount of allocation base
Materials handling= 40,000 / 1,000= $40 per requisition
Machine setups= 21,500 / 500= $43 per setup
Quality inspections= 33,000 / 600= $55 per inspection
Now, we can allocate overhead costs to each product:
Allocated MOH= Estimated manufacturing overhead rate* Actual amount of allocation base
Instruments:
Materials handling= 40*400= $16,000
Machine setups= 43*200= $8,600
Quality inspections= 55*200= $11,000
Total overhead= $35,600
Gauges:
Materials handling= 40*600= $24,000
Machine setups= 43*300= $12,900
Quality inspections= 55*400= $22,000
Total overhead= $58,900
Waterway Industries provided the following information on selected transactions during 2021: Dividends paid to preferred stockholders $ 510000 Loans made to affiliated corporations 1400000 Proceeds from issuing bonds 1550000 Proceeds from issuing preferred stock 2090000 Proceeds from sale of equipment 795000 Purchases of inventories 2350000 Purchase of land by issuing bonds 590000 Purchases of treasury stock 1180000 The net cash provided (used) by financing activities during 2021 is
Answer:
Net cash provided by financing activities $1,195,000
Explanation:
The computation of the net cash provided by financing activities are as follows:
Cash flows from financing activities
Issue bonds $2,090,000
Issue preferred stock $795,000
Less: Purchase of treasury stock -$1,180,000
Less: Dividend paid to preferred stockholders -$510,000
Net cash provided by financing activities $1,195,000
An increase in which of the following will increase the return on equity, all else constant I. Total asset turnover. II. Net income. III. Total assets. IV. Debt-equity ratio. I only. I, II, and III only. I and II only. I, II, and IV only. I, II, III, and IV.
Answer:
I and II only.
Explanation:
Return on equity (ROE) is an example of a profitability ratio.
Profitability ratios measures the ability of a company to earn profits from its assets.
ROE = Net income / Average total equity
If ROE increases, it means that net income increases more than average total equity
Total asset turnover = Revenue / average total assets
(Net Income/ Net profit margin) / Total Assets
All else remaining constant, if ROE increases, it means that revenue also increases more than average total asset
Since Net income is the numerator in ROE, it means it would also increase
Total asset and debt equity ratio is not a component of ROE, so the effect of ROE on them can't be determined
Ikerd Company applies manufacturing overhead to jobs on the basis of machine hours used. Overhead costs are estimated to total $347,325 for the year, and machine usage is estimated at 126,300 hours.For the year, $375,125 of overhead costs are incurred and 132,700 hours are used.
Required:1. Compute the manufacturing overhead rate for the year. (Round answer to 2 decimal places, e.g. 1.25.)2. What is the amount of under- or overapplied overhead at December 31?3. Prepare the adjusting entry to assign the under- or overapplied overhead for the year to cost of goods sold.
Answer:
See below
Explanation:
1. Manufacturing overhead rate
= Total estimated manufacturing overhead ÷ Estimated direct labor hour
= $347,325 ÷ 126,300
= $2.75
2. $132,700 × 2.75 = $364,925
Insurance company A and B both are life insurance companies that pay claims to a designated beneficiary upon death of an insured life. Company A insures 10,000 lives and expects to receive 525 claims this year. Company B insures 8,700 lives and expects to receive 410 claims this year. The actual number of claims for company A will range 500 < 550. The actual number of claims for company B will range from 369 < 451. Who faces the most objective risk
Answer:
Company B will faces the most objective risk
Explanation:
Company A: As Company A, insures 10,000 lives and expects to receive 525 claims this year.
They will end up saving 947,500,000 and paying 52,500,000 (525 claims*100,000), considering each claim value to be 100,000. Here goes the calculation:
10,000 x 100,000 = 1,000,000,000
1,000,000,000 - 52,500,000 = 947,500,000.
Company B: As Company B, insures 8,700 lives and expects 410 claims this year.
They will end up saving 829,000,000 and paying 41,000,000 (410 claims x 100,000), considering each claim value to be 100,000. Here goes the calculation:
8700 x 100,000 = 870,000,000
870,000,000 - 41,000,000 = 829,000,000.
Hence, the margin of profit is good for company A. Company B will have the face the risk more.
19) Which of the following best describes horizontal analysis? A) calculating key ratios to evaluate performance B) comparing a company's financial statements with other companies C) comparing financial statement amounts from year to year for the same company D) expressing each financial statement amount as a percentage of a budgeted amount
Answer:
C) comparing financial statement amounts from year to year for the same company
Explanation:
Horizontal analysis refers to an analysis of the items in the financial statements that should be compared for a period of time. It basically used to see the situation of the trends how it goes whether it is increase or decrease. For using this, the two or more periods financial statements are required
Therefore according to the given options, the option c is correct
Which of the following best describes a problem driven approach to a business opportunity decision process?
O A. An entrepreneur has an idea for a product and searches for a market
O B. An entrepreneur has brainstormed a variety of ideas and prioritized concepts based on industry trends
O C. An entrepreneur has identified a growth area for business
OD. An entrepreneur has found research on a potential hot business trend
O E. An entrepreneur has determined a business to pursue based on industry research
Answer:
I think the answer would be B
Explanation:
because it says An entrepreneur has brainstormed a variety of ideas and prioritized concepts based on industry trends. hope this helps
You are the director of marketing. Your department has been doing well, but the company as a whole has been losing revenue steadily each quarter. In an effort to stay in business, the company is reducing the salaries of all employees by 15 percent. You need to inform your employees. Your employees are expecting that there will be a pay reduction and unanimously voted to reduce salaries rather than fire employees to balance the budget.
Which outline would be most appropriate in this situation?
I. Thank employees for being willing to make a sacrifice for the good of the company
II. Inform the employees they will receive a 15% pay cut
III. Restate the facts of the company's financial situation
IV. Explain
A. The reasons why the company needs to take drastic action
B. The benefits of the company's strategy
V. Close with a forward-looking statement.
I. State the facts of the company's financial situation
II. Explain
A. The reasons the company needs to take drastic action
B. The benefits of the company's strategy
III. Inform the employees they will receive a 15% pay cut
IV. Close with a forward-looking statement
I. State the facts of the company's financial situation
II. Provide alternatives the company considered
A. Unemployment
B. Bankruptcy
III. Inform the employees they will receive a 15% pay cut
Answer:
I. Thank employees for being willing to make a sacrifice for the good of the company.
II. State the facts of the company's financial situation.
III. Inform employees that they will receive a 15% pay cut.
IV. Close with forward looking statement.
Explanation:
The company's financial situation has led the managers to decide for a pay cut instead of lay off to improve the financial position of the company and stay in the budget. The company should appraise employees that they understand the company's situation and are willing to accept the pay cut. The director should inform employees about the current financial situation and provide details about the pay cut plan. The email should close with a forward looking statement and a statement that as soon as the situation of company gets better the employees will receive full salaries as always.
If the government places a $2 tax per bag of potato chips on the producers, what would the consumers of potato chips observe? a. There would be no change in price and the consumer would not notice. b. The government would tax individuals who bought too many potato chips. c. Consumers would pay the full $2 tax in the form of a price increase. d. The price of potato chips would rise by some amount, but by less than $2.
Answer
d. the price of potato hips would rise by some amount
Explanation:
If the government places a $2 tax per bag of potato chips on the producers, then the price of potato chips would rise by some amount, but by less than $2. Option (d) is correct.
What do you mean by Tax?In order to pay for general government services, goods, and activities, local, state, and federal governments must collect mandated payments or charges from citizens and corporations.
While taxes cause deadweight loss, the exact amount depends on a number of factors. The ability of a provider to deliver the desired goods to the customer and the amount that a consumer is ready to spend on a product are two of the most crucial factors. This is an illustration of the economic principle of supply and demand.
The supply curve shows an upward tendency when the price of potatoes rises by $2 tax because more potatoes are supplied. If a non-price element changes, the supply curve shifts to the right.
Therefore, Option (d) is correct.
Learn more about Tax, here;
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As a long-term investment at the beginning of the 2018 fiscal year, Florists International purchased 25% of Nursery Supplies Inc.'s 16 million shares for $68 million. The fair value and book value of the shares were the same at that time. During the year, Nursery Supplies earned net income of $52 million and distributed cash dividends of $.75 per share. At the end of the year, the fair value of the shares is $64 million.Required: Prepare the appropriate journal entries from the purchase through the end of the year.
Answer:
1. Dr Investment in Nursery supplies common share $68 million
Cr Cash $68 million
2. Dr Investment in Nursery supplies common share $13 million
Cr Investment Revenue $13 million
3.Dr Cash $3 million
Cr Investment in Nursery supplies common share $3 million
4. No Journal entry
Explanation:
Preparation of the appropriate journal entries from the purchase through the end of the year.
1. Dr Investment in Nursery supplies common share $68 million
Cr Cash $68 million
2. Dr Investment in Nursery supplies common share $13 million
Cr Investment Revenue $13 million
(25%*$52 million )
3.Dr Cash $3 million
Cr Investment in Nursery supplies common share $3 million
(16 million shares *25%*$.75 per share)
4. No Journal entry is required to record the change in fair value
Question 2
What was the opening price of Dow Jones Industrial Average on Mar 28, 2019 in the format of XXXXX.XX?
Answer:
21,062.96
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Grahame, Inc. has a fiscal year-end of September 30th. On March 1, 2015, Grahame authorized $800,000 in bonds payable; the bonds carry a stated interest rate of 6%, interest to be paid semi-annually on February 28, and August 31st with a term of 12 years. On August 1, 2016, Grahame issued hree-quarters of the bonds at a premium of $25,400.
Prepare the journal entries that would be required relating to the bonds over period March 1, 2015 through September 30, 2016.
Answer:
Grahame, Inc.
Journal Entries:
March 1, 2015:
No journal entry. A memorandum record is made to recognize that $800,000 bonds payable were authorized to be issued, at an interest rate of 6% with a maturity period of 12 years.
August 1, 2016:
Debit Cash $625,400
Credit Bonds Payable $600,000
Credit Bonds Premium $25,400
To record the issue of 3/4 of the $800,000 bonds payable at a premium of $25,400.
September 30, 2016:
Debit Interest Expense $5,647
Credit Interest Payable $5,647
To accrue interest on bonds payable.
Explanation:
a) Data and Calculations:
Authorized bonds payable = $800,000
Rate of interest = 6%
Bonds maturity period = 12 years
Interest payable on the bonds on February 28 and August 31st.
Issued bonds payable = $600,000 ($800,000 * 3/4)
Date of issue = August 1, 2016
Interest Expense = $600,000 * 6% * 2/12 = $6,000
Bonds Premium amortization = $25,400/12 * 2/12 = $353
The interest expense will be reduced by $353 to $5,647 ($6,000 - 353)
Consider the recorded transactions below.
Debit Credit
1. Accounts Receivable 8,400 Service Revenue 8,400
2. Supplies 2,300 Accounts Payable 2,300
3. Cash 10,200 Accounts Receivable 10,200
4. Advertising Expense 1,000 Cash 1,000
5. Accounts Payable 3,700 Cash 3,700
6. Cash 1,100 Deferred Revenue 1,100
Post each transaction to T-accounts and compute the ending balance of each account. The beginning balance of each account before the transactions is:
Cash, $2,700;
Accounts Receivable, $3,500;
Supplies, $330;
Accounts Payable, $2,800;
Deferred Revenue, $230.
Service Revenue and Advertising Expense each have a beginning balance of zero.
Answer:
The ending balance of each account after the transactions is:
Cash, $9,300;
Accounts Receivable, $1,700;
Supplies, $2,630;
Accounts Payable, $1,400;
Deferred Revenue, $1,330.
Service Revenue and Advertising Expense each have an ending balance of zero.
Explanation:
Note: See the attached excel file for the T-accounts and computation of the ending balance (in red color).
The Service Revenue and Advertising Expense each have an ending balance of zero because they are to bee transferred to the income statement of the period. The income statement as an abridged version can be shown as follows:
Income statement (Abridged)
For the Period ...
Particulars $
Service Revenue 8,400
Advertising Expense (1,000)
Net income 7,400