Answer: $3,250,000
Explanation:
The Current Ratio is used to calculate if the company's current assets can pay off it's current Liabilities.
It is calculated by dividing Current Assets by Current Liabilities.
The company plans to increase it's note payable to enable it but more Inventory. We can therefore assume that the increase in notes Payable (current Liability) will be the same as the increase in inventory (current asset) since the former is funding the latter.
The company does not want the current Ratio dropping below 1.2 so 1.2 is the ideal ratio.
The formula will therefore be;
1.2 = (Current Assets + Change in Notes Payable ) / Current Liabilities + Change in Notes Payable
1.2 = (1,250,000 + Change in Notes Payable) / 500,000 + Change in Notes Payable
600,000 + 1.2(Change in Notes Payable) = 1,250,000 + Change in Notes Payable
1.2( Change in Notes Payable) - Change in Notes Payable = 1,250,000 - 600,000
0.2 (Change in Notes Payable) = 650,000
Change in Notes Payable = $3,250,000
Clemmens Company applies overhead based on direct labor cost. Estimated overhead and direct labor costs for the year were $112,500 and $125,000, respectively. During the year, actual overhead was $107,400 and actual direct labor cost was $120,000. The entry to close the over- or underapplied overhead at year-end, assuming an immaterial amount, would include:
Answer:
Estimated Over head applied = ($112500 / $125000) *100 = 90% of Direct labor cost.
Thus, Actual Over Head applied = 90% of $120000 = $108000
Moreover, Actual Over Head incurred = $107400
Therefore, Overhead Over-applied is to be applied as the Actual Overhead applied is higher than the Actual Overhead Incurred
Overhead Over-applied = $108000 - $107400
Overhead Over-applied = $600
The entry to close the over-applied overhead at year-end would include:
i. Over-head A/c will be debited for $600
ii. Cost of goods sold will to be credited for $600
Cabell Products is a division of a major corporation. Last year the division had total sales of $11,440,000, net operating income of $686,400, and average operating assets of $2,402,400. The company's minimum required rate of return is 13%. The division's residual income is closest to:Cabell Products is a division of a major corporation. Last year the division had total sales of $11,440,000, net operating income of $686,400, and average operating assets of $2,402,400. The company's minimum required rate of return is 13%. The division's residual income is closest to:
Answer:
Residual income=$374,088
Explanation:
Calculation for Cabell Products division's residual income
Formula for Residual income is:
Residual income = Net operating income - ( Average operating assets * Minimum required rate of return )
Residual income= $686,400-($2,402,400*13%)
Residual Income=$686,400-$312,312
Residual income=$374,088
Therefore the division's residual income is closest to:$374,088
Oriole Company had sales of $392000, variable costs of $192000, and direct fixed costs totaling $97000. The company’s operating assets total $809000, and its required return is 10%. How much is the residual income?
Answer:
Residual Income = $ 22,100
Explanation:
Residual income is the excess of the controllable profit over the opportunity cost of capital invested.
It is computed as follows:
Residual income = Controllable profit - (cost of capital× operating assets)
Controllable profit = 392,000 - 192,000- 97,000 = $103,000
Residual income = 103,000 - (10%× 809,000)= 22,100
Residual Income = $ 22,100
If a purchase is a new buy for a manufacturer, the seller should be prepared to act as a consultant to the buyer, expect a long time for a buying decision to be reached, and:__________
a. expect to have to do some favors for the decision makers.
b. anticipate a great deal of conflict.
c. accommodate unlimited specification change before the buy is completed.
d. work with technical personnel.
e. avoid making concessions or compromises.
Answer:
d. work with technical personnel.
Explanation:
In the given scenario a manufacturer is making a new buy from a seller. This is a risky investment for the buyer because of uncertainty on how the product will perform and lack of technical know-how in operating the product.
The buyer therefore will require the seller to act as a consultant in case of issues arising from the use of the product, buying decision will take a long time because the buyer will want a good fit for their operations, and more work will be done with technical personnel to train them on how to use the product
If a company uses a predetermined rate for absorbing manufacturing overhead, the volume variance is the: Group of answer choices a. Underapplied or overapplied variable cost element of overhead. b. Underapplied or overapplied fixed cost element of overhead. c. Difference in budgeted costs and actual costs of fixed overhead items. d. Difference in budgeted costs and actual costs of variable overhead items.
Answer: c. Difference in budgeted costs and actual costs of fixed overhead items.
Explanation:
If a company uses a Predetermined rate for Manufacturing Overhead this means that they have budgeted a certain cost of overhead that they believe will be sufficient for production. This is usually possible for fixed overhead items.
The Variance therefore would be the difference between this budgeted figure and the actual figure for the fixed Overhead items.
The total cost schedule for a competitive firm is given by: OutputTotal Cost 0$10 160 280 3110 4165 5245 If market price is $60, how many units of output will the firm produce
Answer: 4 units.
Explanation:
A firm should produce at the rate where Marginal Cost is equal to Marginal Revenue or at a point where they are at their closest.
From the above question, the Marginal Revenue is the Market Price of $60 because that is the extra amount made per sale.
The closest Marginal Cost to $60 is at 4 units. Here the cost of producing is $165 and the cost of producing 3 units is $110. The cost of producing the 4th unit,
= 165 - 110
= $55
The marginal cost of the 5th unit is $80 so it cannot be here.
At the 4th unit the profit made is,
= (Selling price * units) - cost
= (60 * 4) - 165
= $75
This will be the highest profit the company can make.
The Maybe Pay Life Insurance Co. is trying to sell you an investment policy that will pay you and your heirs $35,000 per year forever. If the required return on this investment is 5.5 percent, how much will you pay for the policy
Answer:
$636,363.63
Explanation:
The computation of the amount paid for the policy is shown below:
As we know that
The Present value of perpetuity = Annual inflows ÷ required rate of return on this investment
where,
Annual inflows is $35,000
And, the required return is 5.5%
Now placing these values to the above formula
So, the amount paid for the policy is
= $35,000 ÷ 5.5%
= $636,363.63
When the U.S. dollar is strong, Select one: a. U.S. manufacturers tend to make more purchases from foreign sources. b. U.S. manufacturers tend to limit purchases from foreign sources. c. U.S. manufacturers do not change standard business practices. d. U.S. manufacturers are more likely to close plants abroad.
Answer:
a. U.S. manufacturers tend to make more purchases from foreign sources
Explanation:
The US dollar is high producers in the US prefer to make more purchases from international sources, according to the provided scenario.
Therefore the correct option is a which indicates that when the US dollar is strong then the manufacturer of the united states prefer to buy as much from international entities in order to capture the market at the maximum level so that they could able to achieve their sales targets
Black Cable Company, an accrual basis taxpayer, allows its customers to pay by the year in advance ($600 per year) or two years in advance ($960). In September 2019, the company collected the following amounts applicable to future services: October 2019 - September 2021 services (200 two-year contracts) $192,000 October 2019 - September 2020 services (200 one-year contracts) 120,000 Total $312,000As a result of this, Black Cable should report gross income for 2020:a. $54,000 b. $78,000 c. $258,000 d. $312.000
Answer:
c. $258,000
Black cable should report $258,000 as gross income for 2020
Explanation:
One-eighth (3/24) of the payments on the two-year contracts were earned (1/8 of $192,000 =24,000)
One-fourth (1/4 of $120,000 = $30,000) of the payment on the one-year contracts were earned in 2019 and is included in 2019 gross income.
The balance of the payment = $312,000 - $24,000-$30,000 = $258,000. $258,000 must be included in 2020 Black Cable gross income
The food and beverage manager should always expect that the fresh produce delivered to his or her establishment will be the same quality and degree of ripeness that they were when first harvested in the field. True or False
Answer:
False.
Explanation:
The food and beverage manager shouldn't always expect that the fresh produce delivered to his or her establishment will be the same quality and degree of ripeness that they were when first harvested in the field.
The produce delivered wouldn't be as fresh, same quality and degree of ripeness that they were when first harvested because of changes in environmental conditions such as temperature and relative humidity. Also, a change in its biochemical composition would go a long way to affect the quality of fresh produce.
Hence, this would result in a change in taste, texture, degree of ripeness, nutritional value, smell etc.
However, the farmer or supplier of this food products could mitigate the change in quality by transporting them as soon as possible after harvesting, transporting at a required cold temperature, humidity and ensuring they're well packaged in a safe container during shipment.
Molen Inc. has an outstanding issue of perpetual preferred stock with an annual dividend yield of 7.50% and a par value of $60. If the market value for the preferred stock is $70, what is the required return on this preferred stock?
Answer:
10.71%
Explanation:
The computation of the required rate of return on this preferred stock is shown below :
The Required return on preferred stock is
= Dividend ÷ market value of preferred stock
= 7.50 ÷ $70
= 10.71%
By dividing the dividend from the market value of preferred stock we can get the Required return on preferred stock and the same is to be considered
therefore we ignored the par value i.e $60 as this is not relevant
Answer:
$61.54
Hope this helps! good luck :)
Projects S and L both have normal cash flows, and the projects have the same risk, hence both are evaluated with the same WACC, 10%. However, S has a higher IRR than L. Which of the following statements is CORRECT?
A. Project S must have a higher NPV than Project L.
B. If Project S has a positive NPV, Project L must also have a positive NPV.
C. If the WACC falls, each project's IRR will increase.
D. If the WACC increases, each project's IRR will decrease.
E. If Projects S and L have the same NPV at the current WACC, 10%, then Project L, the one with the lower IRR, would have a higher NPV if the WACC used to evaluate the projects declined.
Answer:
E. If Projects S and L have the same NPV at the current WACC, 10%, then Project L, the one with the lower IRR, would have a higher NPV if the WACC used to evaluate the projects declined.
Explanation:
Net present value is the present value of after tax cash flows from an investment less the amount invested.
Internal rate of return is the discount rate that equates the after tax cash flows from an investment to the amount invested
Company expects to sell 500 units during the second quarter and 550 units in the third quarter. Currently, during the second quarter, they have 46 units on hand. If they desire safety stock of 10% of the next quarter's sales, ________ units will need to be produced in the second quarter.
Answer:
509 units
Explanation:
The expected sales in the present quarter is 500 units (for second quarter) and we have 46 units on hand.
We want a reserve of 10% during the next quarter.
The expected sales in next quarter is 550 units so reserve of 10% is
Reserve = 0.10 * 550= 55 units
Balance to produce this quarter= 500 - 46= 454 units
Total to produce= Balance produced + Reserve
Total to produce= 454 + 55= 509 units
Foot Locker, Inc., is a large global retailer of athletic footwear and apparel selling directly to customers and through the Internet. It includes the Foot Locker family of stores, Champs Sports, Footaction, Runners Point, and Sidestep. The following are a few of Foot Locker's investing and financing activities as reflected in a recent annual statement of cash flows.
a. Capital expenditures (for property, plant, and equipment).
b. Repurchases of common stock from investors.
c. Sale of short-term investments.
d. Issuance of common stock.
e. Purchases of short-term investments.
f. Dividends paid on common stock.
Required:
For activities (a) through (f), indicate whether the activity is investing (l) or financing (F) and the direction of the effect on cash flows (+ for increases cash; - for decreases cash).
Answer:
a. Capital expenditures (for property, plant, and equipment) : (l), -
b. Repurchases of common stock from investors : (F), -
c. Sale of short-term investments : (O) +
d. Issuance of common stock : (F) +
e. Purchases of short-term investments : (O) -
f. Dividends paid on common stock : (F) -
Explanation:
The cash flow statement categories the company's transactions in a financial period into 3 groups; these are operating, investing and financing.
The net profit/loss, depreciation, changes in current assets (other than cash) and liabilities are considered as operating activities including income taxes.
The sale of assets, interest received, purchase of investments are examples of investing activities while the issuance of stocks, debt principal deduction (loan settlement), issuance of debt securities etc are examples of financing activities.
An increase in assets other than cash is an outflow while an increase in liabilities is an inflow. Depreciation and other non-cash expenses deducted in the income statements are added back while the non-cash income such gain on asset are deducted from net income.
Larned Corporation recorded the following transactions for the just completed month.
$72,000 in raw materials were purchased on account. $70,000 in raw materials were used in production. Of this amount, $62,000 was for direct materials and the remainder was for indirect materials. Total labor wages of $106,000 were paid in cash. Of this amount, $102,200 was for direct labor and the remainder was for indirect labor. Depreciation of $193,000 was incurred on factory equipment.
Required:
Record the above transactions in journal entries.
Answer:
Larned Corporation
Journal Entries
Sr. No Account Debit Credit
1 Materials $72,000
Accounts Payable $72,000
$72,000 in raw materials were purchased on account.
2 Work in Process $62,000
Materials Inventory $62,000
$70,000 in raw materials were used in production. Of this amount, $62,000 was for direct materials
3 Manufacturing Overheads $8000
Materials Inventory $ 8000
$70,000 in raw materials were used in production. Of this amount, $62,000 was for direct materials and the remainder was for indirect materials.
4 Work In Process $ 102,000
Payroll ( Direct Labor ) $102,000
$102,200 was for direct labor
5 Manufacturing Overheads $3800
Payroll (Indirect Labor) $3800
Total labor wages of $106,000 were paid in cash. Of this amount, $102,200 was for direct labor and the remainder was for indirect labor.
6 Depreciation $193,000
Factory Overhead Control Account $193,000
Depreciation of $193,000 was incurred on factory equipment.
Grayille Financial Consultants, Inc. is planning to reduce the number of days it allows its clients to pay their bills from 45 days to 30 days. Grayille believes that this policy change will have no effect on either sales or costs. Any asset changes resulting from this new policy will be offset by a corresponding and equal change in equity. All else constant, this new collection policy should be expected to (circle all that apply - if the correct answer is a and b and you circle any letter(s) other than a and b, you will receive no credit - that is, no partial credit will be awarded for your answer to this question):
Answer: c. Lower the firm's quick ratio.
d. Lower the firm's current ratio.
Explanation:
Reducing the amount of time that clients have to pay will reduce the amount of Account Receivables as clients will no longer have long outstanding due dates. This reduction in Accounts Receivables will be felt by the Quick and Current ratios.
Quick Ratio formula
= [tex]\frac{Current Assets - Inventory}{Current Liabilities}[/tex]
Current Ratio Formula
= [tex]\frac{Current Assets}{Current Liabilties}[/tex]
As is evident from the formulas, Current Assets are integral to both ratios and as Accounts Receivables is a current asset that will be reduced, the current assets will be reduced and by extension both the Current and Quick Ratios will be reduced as well.
DasGute, a not-for-profit (NFP) organization located in Frankfurt, Germany, directly solicited CoolSchool, an NFP university located in Westport, CT, to enter into an agreement to establish a branch campus of CoolSchool in Frankfurt called CoolNewSchool. CoolNewSchool is not a separate legal entity and will operate as adegree-granting branch campus of CoolSchool in Frankfurt with the intent to provide students the same level of undergraduate education that it provides to students enrolled at its main campus in Westport. DasGute has entered into similar agreements with other U.S. universities in fulfillment of its mission to develop human resources through highquality education and research in Frankfurt. The boards of directors for both DasGute and CoolSchool require that CoolNewSchool prepare stand-alone financial statements in accordance with U.S. GAAP to demonstrate that revenue and expenses of CoolNewSchool have been generated and incurred inaccordance with the operating budgets described below.Eddie V., the new controller of CoolNewSchool isn’t sure how to account for its formation under U.S. GAAP but has knowledge of NFP accounting principles, specifically whether an agreement should be accounted for as an exchange transaction or a contribution within the stand-alone financial statements.Case FactsResponsibilities of CoolSchoolThe agreement requires that CoolSchool be responsible for the following activities:(1) hiring and terminating of personnel (including the dean, who will function as the CEO of CoolNewSchool) (2) recruiting, admitting, and enrolling students; (3) designing and delivering the academic curriculum; (4) establishing and implementing operational policies and procedures (including compensation for employees and tuition rates for students); and (5) authorizing expenditures once a budget is approved.Responsibilities of DasGuteThe agreement requires that DasGute be responsible to (1) construct, own, furnish, and maintain the site; (2) bear the costs of the joint advisory board; and (3) fund all necessary expenditures for CoolNewSchool, as stipulated by the annual budget.Shared Responsibilities of CoolSchool and DasGuteA nine-member joint advisory board will be established, consisting of three appointed members by CoolSchool, three appointed members by DasGute, and three jointly appointed members. The joint advisory board does not have decision-making authority but will provide guidance on CoolNewSchool’s operations and final approval of the annual budget.Operating BudgetEach year, CoolNewSchool will develop an operating budget that is subject to approval by the joint advisory board. If an agreement is not reached on a proposed budget, the operating budget for the fiscal year in question will be based on the previous year’s budget. Any unresolved issue, whether related to the budget or any other matter, will be settled by arbitration.• Once the annual budget has been approved, CoolSchool has full expenditure authority for CoolNewSchool’s operating expenses. DasGute will reimburseCoolSchool for all expenditures incurred in accordance with the annual budget. In addition, DasGute will pay an annual management fee to CoolSchool.• While CoolSchool is responsible for tuition billing, DasGute is required to fundany shortfall between the tuition rates established for CoolNewSchool and theactual amounts paid by the students, to cover the annual budgeted operatingexpenses.Required:1. Determine whether CoolNewSchool represents an extension of DasGute orCoolSchool by identifying which entity exercises control of CoolNewSchool(analogous to the idea of control if consolidated financial statements wererequired) and from whose perspective (DasGute or CoolSchool) the controllingentity’s agreement should be analyzed as either an exchange transaction or acontribution.2. Does the agreement represent an exchange transaction (and therefore all tuitionamounts should be recorded as "Tuition Revenue") or a contribution (andtherefore the amounts received from DasGute in the form of tuition subsidiesshould be recorded as "Cont?
Answer:
DasGute, a not-for-profit (NFP), Frankfurt / CoolSchool, Westport, CT, and CoolNewSchool, Frankfurt
1. Determination of Control:
DasGute exercises control over CoolNewSchool. CoolSchool is just in a management consultancy position.
It is from DasGute's perspective that the controlling entity's agreement should be analyzed as a contribution transaction. It is not an exchange transaction.
2. Determination of Exchange and Consideration Transactions: In an exchange transaction, there will be consideration for the parties, especially DasGute and CoolSchool. The facts do not support an exchange transaction. The IFAC definition do not support an exchange transaction. The FASB ASC 958-605 rules and FASB ASU 2018-08 update do not support an exchange transaction.
3. Therefore, the amount received from DasGute in the form of tuition subsidies should be recorded as "Contribution Revenue."
Explanation:
a) International Federation of Accountants (IFAC) define exchange transactions, thus: "Exchange transactions are transactions in which one entity receives assets or services, or has liabilities extinguished, and directly gives approximately equal value (primarily in the form of cash, goods, services, or use of assets) to another entity in exchange."
b) The FASB ASC 958-605 provides guidance for contribution and exchange transactions. "The indicators to use to determine whether a contribution should be recorded as a contribution transaction or an exchange transaction are:
1. What is the recipient nonprofit’s intent in soliciting the asset?
a) Soliciting the asset as a contribution – contribution transaction
b) Seeking resources in exchange for specified benefits – exchange transaction
2. What is the resource provider’s expressed intent about the purpose of the asset to be provided by the recipient nonprofit?
a) Provider is making a donation to support the nonprofit’s programs – contribution
b) Provider is transferring resources in exchange for specific benefits – exchange
3. What is the method of delivery by recipient nonprofit to third-party recipients?
a) At the discretion of the recipient nonprofit – contribution
b) Specified by the resource provider – exchange
4. What is the method of determining the amount of the contribution?
a) Resource provider determines amount – contribution
b) Amount contributed equals the value of the assets to be provided by the recipient nonprofit, or the assets’ cost plus markup – exchange
5. Are there penalties assessed if the nonprofit fails to make timely delivery of assets?
a) Recipient nonprofit not penalized for nonperformance – contribution
b) Recipient nonprofit penalized for nonperformance – exchange
6. To whom will the recipient nonprofit deliver the assets?
a) Delivered to individuals or organizations other than the resource provider – contribution
b) Delivered to the resource provider or to individuals or organizations closely connected to the resource provider – exchange"
c) FASB ASU 2018-08 update, Clarifying the Scope and the Accounting Guidance for Contributions Received and Contributions Made, explains clearly when revenue is exchange versus contribution:
"The first step in determining the accounting is determining who is paying the money and who, if anyone, is getting goods or services from the transaction.
If the nonprofit gets funds from a payor and provides that payor direct, commensurate value in return, that is an exchange transaction. An example would be when you purchase a training class from your membership organization; you are paying the value of what you are receiving.
If the nonprofit gets funds from a payor and no value is paid out to anyone at that time, that is clearly a contribution.
If the nonprofit gets funds from a payor, such as the federal government, with the purpose of the nonprofit providing the goods and services to a third party, the general public or a subsegment thereof, that is also a contribution. When the general public, or someone other than the payor, receives the goods or services, it is a contribution."
The following data were selected from the records of Sykes Company for the year ended December 31, 2014.
Balances January 1, 2014
Accounts receivable (various customers) $ 122,000
Allowance for doubtful accounts 8,000
In the following order, except for cash sales, the company sold merchandise and made collections on credit terms 5/10, n/30 (assume a unit sales price of $900 in all transactions and use the gross method to record sales revenue).
Transactions during 2014
a. Sold merchandise for cash, $248,000.
b. Sold merchandise to R. Smith; invoice price, $11,500.
c. Sold merchandise to K. Miller; invoice price, $29,000.
d.
Two days after purchase date, R. Smith returned one of the units purchased in (b) and received account credit.
e. Sold merchandise to B. Sears; invoice price, $23,000.
f. R. Smith paid his account in full within the discount period.
g. Collected $92,000 cash from customer sales on credit in prior year, all within the discount periods.
h. K. Miller paid the invoice in (c) within the discount period.
i. Sold merchandise to R. Roy; invoice price, $18,500.
j.
Three days after paying the account in full, K. Miller returned seven defective units and received a cash refund.
k. After the discount period, collected $6,000 cash on an account receivable on sales in a prior year.
l. Wrote off a 2013 account of $5,000 after deciding that the amount would never be collected.
m. The estimated bad debt rate used by the company was 1.0 percent of credit sales net of returns.
Required:
1. Using the following categories, indicate the effect of each listed transaction, including the write-off of the uncollectible account and the adjusting entry for estimated bad debts (ignore cost of goods sold). The first transaction is used as an example. (Round your answers to the nearest whole dollar amount. Amounts to be deducted should be indicated by a minus sign.)
Transactions | Sales Revenue | Sales discounts | Sales Returns and Allowances | Bad Debt
a
b
c
d
e
f
g
h
i
j
k
l
m
Show how the accounts related to the preceding sale and collection activities should be reported on the 2014 income statement. (Treat sales discounts as a contra-revenue.)
Sales renenue
Less: Sales and return
Sales discounts
Net sales revenue
Operating expenses
Bad debt expenses
Answer:
Sales Revenue: 316,000
Sales Discounts Taken: 2680
Sales Returns and Allowances: 4000
Bad Debt Expense: 1155
Explanation:
A. Sales Revenue- 235,000
B. Sales Revenue- 11,500
C. Sales Revenue- 26,500
D. Sales Returns and Allowances- 500
E. Sales Revenue- 24,000
F. Sales Discounts (Taken)- 220
G. Sales Discounts (Taken)
(Sales discounts (taken) $98,000 ÷ (1 - 0.02) = $100,000 gross sales; $100,000 × 0.02 = $2,000)
H. Sales Discounts (Taken)- 530
I. Sales Revenue- 19,000
J. Sales Discounts (Taken) - (70)
Sales Returns and Allownaces- 3500
K.
L.
M. Bad Debt Expense
Credit sales ($11,500 + $26,500 + $24,000 + $19,000) =$81,000
Less: Sales returns ($500 + $3,500)= 4,000
______________________________
Net sales revenue
77,000
Estimated bad debt rate
× 1.5 %
_____________________________
Bad debt expense
+$1,155
Hank Itzek manufactures and sells homemade wine, and he wants to develop a standard cost per gallon. The following are required for production of a 50-gallon batch.
2,400 ounces of grape concentrate at $0.01 per ounce
54 pounds of granulated sugar at $0.50 per pound
60 lemons at $0.80 each
100 yeast tablets at $0.21 each
100 nutrient tablets at $0.14 each
3,700 ounces of water at $0.005 per ounce
Hank estimates that 4% of the grape concentrate is wasted, 10% of the sugar is lost, and 25% of the lemons cannot be used.
Compute the standard cost of the ingredients for one gallon of wine.
Answer:
total $3.36
Explanation:
required for producing 50 gallons of wine:
2,400 ounces of grape concentrate at $0.01 per ounce = $24 / 50 = $0.48 x 1.04 = $0.50
54 pounds of granulated sugar at $0.50 per pound = $27 / 50 = $0.54 x 1.1 = $0.59
60 lemons at $0.80 each = $48 / 50 = $0.96 x 1.25 = $1.20
100 yeast tablets at $0.21 each = $21 / 50 = $0.42
100 nutrient tablets at $0.14 each = $14 / 50 = $0.28
3,700 ounces of water at $0.005 per ounce = $18.50 / 50 = $0.37
Hank estimates that 4% of the grape concentrate is wasted, 10% of the sugar is lost, and 25% of the lemons cannot be used.
total standard cost per gallon:
grape concentrate = $0.50granulated sugar = $0.59lemons = $1.20yeast tablets = $0.42nutrient tablets = $0.28water = $0.37total $3.36Moss County Bank agrees to lend the Ivanhoe Company $365000 on January 1. Ivanhoe Company signs a $365000, 6%, 9-month note. The entry made by Ivanhoe Company on January 1 to record the proceeds and issuance of the note is
Answer:
Ivanhoe Company on January 1 would record the proceeds and issuance of the note as follows:
Debit Cash $365,000
Credit Notes payable $365,000
(To recognize notes payable to Moss County Bank)
Explanation:
Note payable is a promissory note with a written promise made by the borrower to the lender (payee) to pay a certain, definite sum at a specified date.
Interest expense on the notes is calculated as: Principal x Interest Rate x Time
In this case, the total interest expense to Ivanhoe Company is $365,000 x 6%/12 x 9 months = $16,425.
Monthly interest expense to the Company over the 9-month period is therefore $16,425 / 9 months = $1,825.
All of the following would cause a shift in the aggregate supply curve except:________.
a. a change in the price level.
b. an increase in the real wages of workers.
c. a decrease in productivity.
d. the emergence of a new production technology.
e. a tax on all manufactured goods.
Answer: a change in the price level.
Explanation:
A shift in the aggregate supply curve is caused by non-price changes such as real wages of the workers, tax, technological innovation, productivity level etc.
The change in price will only result in the movement along the supply curve, which is also referred to as the change in quantity supplied. A change in price will not cause a shift on the aggregate supply curve.
Therefore, option A is the correct answer.
What is the age distribution of promotion-sensitive shoppers? A supermarket super shopper is defined as a shopper for whom at least 70% of the items purchased were on sale or purchased with a coupon.
Answer:
The distribution of probability is valid if sum of all the probabilities equals to 1.
Explanation:
Age Range Midpoint Percent of super shopper
18-28 23 7%
29-39 34 44%
40-50 45 24%
51-61 56 14%
61 and over 67 11%
∑p(x) = P (x1)
The distribution of the shoppers is valid as the sum of all the probabilities equals to 1.
∑p(x) : 0.7 + 0.44 + 0.24 + 0.14 + 0.11 = 1
If a gain of $221000 is realized in the cash sale of a building having a book value of $882000, the total amount reported in the cash flows from investing activities section of the statement of cash flows is
Answer:
$1,103,000
Explanation:
The cash flow statement categories the company's transactions in a financial period into 3 groups; these are operating, investing and financing.
The net profit/loss, depreciation, changes in current assets (other than cash) and liabilities are considered as operating activities including income taxes.
The sale of assets, interest received, purchase of investments are examples of investing activities while the issuance of stocks, debt principal deduction (loan settlement), issuance of debt securities etc are examples of financing activities.
For assets disposed, the amount received from the disposal is the amount recorded as an investing activity.
Amount received - Book value of asset = Gain on disposal
Amount received = $221000 + $882000
= $1,103,000
Jackson Manufacturing Company had a beginning inventory of $30,000. During the year, the company recorded inventory purchases of $90,000 and cost of goods sold of $100,000. The ending inventory must equal:
Answer:
The answer is $20,000
Explanation:
Solution
Given that:
Jackson Manufacturing Beginning inventory = 30,000
Inventory purchases recorded = $90,000
Cost of goods sold = $100,000
Then
We find the ending inventory which is given below:
Now
The inventory (ending) is = beginning inventory + purchases - cost of goods sold
= $30,000 + $90,000 - $100,000
=$20,000
Hence, the ending inventory must equal the amount of $20,000
Orion Flour Mills purchased a new machine and made the following expenditures: Purchase price $60,000 Sales tax 5,250 Shipment of machine 850 Insurance on the machine for the first year 550 Installation of machine 1,700The machine, including sales tax, was purchased on account, with payment due in 30 days. The other expenditures listed above were paid in cash. Required: Record the above expenditures for the new machine.
Answer:
Debit Equipment 67,800
Debit Prepaid Insurance 550
Credit Cash 3,100
Credit Accounts Payable 65,250
Explanation:
Orion Flour Mills Record of expenditure for the new machine.
Purchase price$60,000
Sales tax 5,250
Shipping 850
Installation 1,700
Total cost$ 67,800
Theb annual insurance of 550 was not included.
Therefore each of the expenditures which is been listed above are important to help bring the machine to its conditions as well as the location for use.
Since Orion will initially report the $550 of the insurance amount as the prepaid insurance and expense over the first year of coverage will have to:
Debit Equipment 67,800
Debit Prepaid Insurance 550
Credit Cash 3,100
Credit Accounts Payable 65,250
( To record Purchase of equipment)
Calculation for Cash
Shipment of machine 850
Insurance on the machine for the first year 550
Installation of machine 1,700
Total =3,100
Choose the correct answers :
1. If the demand for product A displays high and postitive cross-price elasticity with respect to the price of product B, then:
a. the demand for product A is likely to have a low price elasticity
b. product A and B are subtitutes
c. products A and B are complements
d. the demand for product B is likely to have a low price elasticity
2. Fast food is believed to be an inferior good. This means that:
a. the quantity of fast food consumed decreases as income increases
b. the income elasticity of demand for fast food is positive
c. The quantity of fast food consumed will always be high
d. fast food is really not quality food
Answer:
b. product A and B are subtitutes
a. the quantity of fast food consumed decreases as income increases
Explanation:
Cross price elasticity of demand measures the responsiveness of quantity demanded of good A to changes in price of good B.
Cross price elasticity = percentage change in quantity demanded of good A / percentage change in price of good B.
The cross price elasticity of substitute goods are always positive because if the price of good B increases, the Quanitity demanded of good A rises.
Substitute goods are goods that can be used in place of another good.
Complement goods are goods that are used together. E.g. car and gas
Inferior goods are goods whose demand increases when income falls and whose demand falls when income rises.
I hope my answer helps you
1. At year-end, Harris Co. had shipped $12,500 of merchandise FOB destination to Harlow Co. Which company should include the $12,500 of merchandise in transit as part of its year-end inventory?
2. Harris Company has shipped $20,000 of goods to Harlow Co., and Harlow Co. has arranged to sell the goods for Harris. Identify the consignor and the consignee. Which company should include any unsold goods as part of its inventory?
Answer:
1. Harris company
2. The Consignor should be Harris Company
The Consignee should be Harlow Company
Explanation:
1.Harris company should include the amount of $12,500 as part of their year end inventory because based on the information given we were told that Harris Company was the company which at year-end shipped $12,500 of merchandise FOB destination to Harlow Co.
2.
The Consignor should be Harris Company
The Consignee should be Harlow Company
Because Harris Company was the company which shipped the goods worth $20,000 to Harlow Co Which means HARRIS COMPANY is the CONSIGNOR in which Harlow Co. has as well arranged to sell the goods for Harris which means HARLOW COMPANY is the CONSIGNEE because they are the buyer of the goods
Therefore Harris company should tend to include any goods which are unsold as part of the inventory.
On November 1. Bahama Cruise Lines borrows $2.6 million and issues a six-month. 6% note payable. Interest is payable at maturity. Record the issuance of the note and the appropriate adjustment for interest expense at December 31, the end of the reporting period.
Answer and Explanation:
The journal entries are shown below:
1. Cash Dr $2,600,000
To Note payable $2,600,000
(Being the issuance of the note is recorded)
For recording this we debited the cash as it increased the assets and credited the note payable as it also increased the liabilities
2. Interest expense $26,000
To interest payable $26,000
(Being the interest expense is recorded)
For recording this we debited the interest expense as it increased the expenses and credited the note payable as it also increased the liabilities
The computation is shown below:
= $2,600,000 × 6% × 2 months ÷ 12 months
= $26,000
Greenville Cabinets received a contract to produce speaker cabinets for a major speaker manufacturer. The contract calls for the production of "4,700" bookshelf speakers and "5,500" floor speakers over the next two months, with the following delivery schedule:
Model Month 1 Month 2
Bookshelf 2,800 1,900
Floor 2,200 3,300
Greenville estimates that the production time for each bookshelf model is 0.8 hour and the production time for each floor model is 1 hour. The raw material costs are $17 for each bookshelf model and $19 for each floor model. Labor costs are $29 per hour using regular production time and $40 using overtime. Greenville has up to 3,100 hours of regular production time available each month and up to 1,700 additional hours of overtime available each month. If production for either cabinet exceeds demand in month 1, the cabinets can be stored at a cost of $12 per cabinet.
Required:
For each product, determine the number of units that should be manufactured each month on regular time and on overtime to minimize total production and storage costs. If required, round your answers to the nearest whole number.
Answer:
see attached
Explanation:
The total hours required to produce each month's order are ...
Month 1: 0.8(2800) +1(2200) = 4440
Month 2: 0.8(1900) +1(3300) = 4820
That is, orders for Month 2 require 20 more hours than are available. Both months require significant overtime.
__
From this brief analysis, we learn that we must store a minimum of 20 hours worth of labor. We can minimize the storage cost by maximizing the hours of labor in each item stored. Floor models require 1 hour each, which is more than the labor requirement of a Bookshelf model. So, we should store 20 Floor models.
__
Overtime is required in both months to fulfill the orders, so it doesn't really matter how the regular hours are spent. We can, for example, produce one entire order on regular time, and the other on overtime; or, we can split the hours so the product mix approximates the order mix. Either way, the labor cost will be the same.
We choose to spend the 3100 regular hours producing 1575 Bookshelf models, and 1840 Floor models.
Then the overtime hours can be spent making up the difference from the total for the month.
The attachment shows the allocation of quantities, hours, and labor dollars. The total (minimized) production and storage cost is shown at lower right.
Depreciation for Partial Periods Hathaway Company purchased a copying machine for $8,700 on October 1, 2019. The machine's residual value was $500 and its expected service life was 5 years. Hathaway computes depreciation expense to the nearest whole month. Required: Compute depreciation expense for 2019 and 2020 using the following methods: (Round your answers to the nearest dollar.) Straight-line method 2019 $ 2020 $ Sum-of-the-years'-digits method 2019 $ 2020 $ Double-declining-balance method 2019 $ 2020 $ Next Level Which method produces the highest book value at the end of 2020
Answer:
straight line method
2019: $4102020: $1,640sum of digits method
2019: $683.332020: $2,596.67double declining method
2019: $8702020: $3,134Which method produces the highest book value at the end of 2020?
the straight line method because the deprecation expense is lowest, book value at Dec. 31, 2020 = $6,650Explanation:
copying machine purchased October 1, 2019 at $8,700
residual value $500
expected life 5 years
depreciation using straight line method:
depreciation expense per year: ($8,700 - $500) / 5 = $1,640
2019: $1,640 x 3/12 = $410
2020: $1,640
sum of digits method:
depreciation first year = 5/15 x $8,200 = $2,733.33
2019: $2,733.33 x 3/12 = $683.33
2020: $2,733.33 x 9/12 = $2,050
$8,200 x 4/15 x 3/12 = $546.67
total 2020: $2,596.67
double declining balance:
depreciation year 1 = 2 x 20% x $8,700 = $3,480
2019: $3,480 x 3/12 = $870
2020: $3,480 - $870 = $2,610
2 x 20% x ($8,700 - $3,460) x 3/12 = $524
total 2020 = $2,610 + $524 = $3,134