Answer:
The answer is $98,500
Explanation:
There are two ways to cash provided or used by operating activities - Direct method and indirect method. In direct method, the first line item is Net income or net loss.
Net income------------------------ $87,100
Depreciation expense---------- 13,800
Gain on sale of land------------ ($6,500)
Increase in merchandise inventory-------------------------------------------------($3,850)
Increase in accounts payable $7,950
Net cash provided or used by operating activities---------------$98,500
Which of the following represented a business unit that shows rapid growth but poor profit margins?
a. Star.
b. Cash cow.
c. Problem child.
d. Loss leader.
e. Dog.
Answer:
Option B
Explanation:
In simple words, A cash cow refers to one of the 4 dimensions (quadrants) throughout the growth-share vector, BCG matrix describing a business, line of products, or enterprise with significant market share inside a mature field.
A cash cow is described as a reference to a company, commodity, or asset that will generate continuous investment returns throughout its lifetime until it is purchased and paying off.
The term refers to a company that is equally low-maintenance too. Modern days cash cows need minimal capital investment to have consistently sufficient cash flow that can be distributed within a company to other departments. They 're lower - risk projects, potentially high profits.
Fallen Company commonly issues long-term notes payable to its various lenders. Fallen has had a pretty good credit rating such that its effective borrowing rate is quite low (less than 8% on an annual basis). Fallen has elected to use the fair value option for the long-term notes issued to Barclay's Bank and has the following data related to the carrying and fair value for these notes.
Carrying Value Fair Value
December 31,2014 54,000 54,000
December 31,2015 44,000 42,500
December 31,2016 36,000 38,000
A. Prepare the journal entry at December 31 (Fallen's year end) for 2014, 2015, and 2016 to record the fair value option for these notes.B. At what amount will the note be reported on Fallen's 2015 balance sheet?C. What is the effect of recording the fair value option on these notes on Fallen's 2016 income?D. Assuming that general market interest rates have been stable ove the period, does the fair value data for the notes indicate that Fallen's credit-worthiness has improved or declined in 2016? Explain.
Answer:
A) Journal entries
Date Account Titles Debit Credit
Dec 31, 2014 No Journal Entry
Dec 31,2015 Notes Payable $1,500
(44,000 – 42,500)
Unrealized Holding Gain/Loss $1,500
(Net Income)
Dec 31,2016 Unrealized Holding Gain/Loss $3,500
(Net Income)
Notes Payable $3,500
(38,000 – 36,000 + 1,500)
B) The note will be reported at the fair value of notes payable as on 31 December 2015. Therefore, the note will get reported at $42,500 in the Fallen's 2015 balance sheet.
C) Fallen's 2016 net income will get reduced by $3,500 (refer to journal entry 3) as any change in fair value will be reported as an adjustment to the net income for the respective year.
D) Since, the general market interest rates have been stable over the period and similar risk investment in the year 2016, the changes in fair value indicate that Fallen's creditworthiness has improved.
Brinker accepts all major bank credit cards, including First Savings Bank's, which assesses a 2.5% charge on sales for using its card. On May 26, Brinker had $6,400 in First Savings Bank Card credit sales. What entry should Brinker make on May 26 to record the deposit? Multiple Choice Debit Cash $6,240; debit Credit Card Expense $160; credit Sales $6,400. Debit Cash $6,400; credit Sales $6,400. Debit Cash $6,560; credit Credit Card Expense $160; credit Sales $6,400. Debit Accounts Receivable $6,240; debit Credit Card Expense $160; credit Sales $6,400. Debit Accounts Receivable $6,400; credit Sales $6,400.
Answer:Debit Cash $6,240; debit Credit Card Expense $160
Explanation:
Working
6,400 x 2.5% = $160 as the credit card expense
Credit sales - credit card expense= Cash
6400 - 160 = $6,240 --- cash
Account Debit Credit
Cash $6,240
Credit Card Expense $160
Credit Sales $6,400
If P represents the price of goods and services measured in money, then 1/P is the value of money measured in terms of goods and services True False
Answer:
The answer is True
Explanation:
There is an inverse relationship between the price level and value of money (also known as purchasing power). An increase in the price level is the same as an decrease in the value of money.
As the price level decreases money is able to buy more goods and services and as the price level increases, money is able to buy less goods and services. inflation decrease the value of money or consumers' purchasing power.
Assume the total cost of a college education will be $395,000 when your child enters college in 18 years. You presently have $65,000 to invest. What annual rate of interest must you earn on your investment to cover the cost of your child’s college education?
Answer:
8.87%
Explanation:
Calculation for the annual rate of interest you must earn on your investment to cover the cost of your child’s college education
Using this formula
FV = PV(1 + r)t
Based on the information we were told to calculate for annual rate of return, this means we would be Solving for r
r = (FV / PV)1 / t– 1
Where,
FV =$300,000
PV=$65,000
=1 / t =1/18 years
Let plug in the formula
r = ($300,000 / $65,000)1/18– 1
r=(4.6153846)^0.055555 -1
r=1.08867-1
r= 0.0887 *100
r=8.87%
Therefore the annual rate of interest you must earn on your investment to cover the cost of your child’s college education will be 8.87%
g Last year, Adventure Enterprises reported revenues of $24 million while its total expenses were $10 million. Based on this information, Adventure reported:
Answer:
The answer is ' a profit of $14 million
Explanation:
Revenue = $24 million
Total expenses = $10 million
Profit(loss) = Revenue minus total expenses
$24 million - $10 million
Profit = $14 million.
It is a profit because revenue is greater than total expenses. Adventure Enterprises will report a loss if reported total expenses was greater than reported revenue
Below is a list of activities for Jayhawk Corporation. Required: Select from the activities of Jayhawk Corporation whether the transaction increases, decreases, or has no effect on assets, liabilities, and stockholders' equity. The first item is provided as an example.
Transaction Assets = Liabilities+ Stockholders' Equity
1. Issue common stock in exchange for cash. Increase= No effect+ Increase
2. Purchase business supplies on account. = +
3. Pay for legal services for the current month. = +
4. Provide services to customers on account. = +
5. Pay employee salaries for the current month. = +
6. Provide services to customers for cash. = +
7. Pay for advertising for the current month. = +
8. Repay loan from the bank. = +
9. Pay dividends to stockholders. = +
10. Receive cash from customers in (4) above. = +
11. Pay for supplies purchased in (2) above. = +
Answer:
Jayhawk Corporation
Transaction Assets = Liabilities Stockholders' Equity
1. Issue common stock in exchange for cash. Increase= No effect + Increase
2. Purchase business supplies on account. Increase = Increase + No effect
3. Pay for legal services for the current month. Decrease = No effect + Decrease
4. Provide services to customers on account. Increase = No effect + Increase
5. Pay employee salaries for the current month. Decrease = No effect + Decrease
6. Provide services to customers for cash. Increase = No effect + Increase
7. Pay for advertising for the current month. Decrease = No effect + Decrease
8. Repay loan from the bank. Decrease = Decrease + No effect
9. Pay dividends to stockholders. Decrease = No effect + Decrease
10. Receive cash from customers in (4) above. Increase + Decrease = No effect + No effect
11. Pay for supplies purchased in (2) above. Decrease = Decrease + No effect
Explanation:
The accounting equation states that Assets are equal to Liabilities Plus Equity. This equation remains true for every business transaction, which affects two accounts on either side of the equation. This keeps the equation in equilibrium or balance with each given transaction. It is from this equation that the double entry system of accounting was developed and is based.
The impact whether the transaction increases, decreases, or has no effect on assets, liabilities, and stockholders' equity is explained below:
1. Issue common stock in exchange for cash. Increase= No effect + Increase
2. Purchase business supplies on account. Increase = Increase + No effect
3. Pay for legal services for the current month. Decrease = No effect + Decrease
4. Provide services to customers on account. Increase = No effect + Increase
5. Pay employee salaries for the current month. Decrease = No effect + Decrease
6. Provide services to customers for cash. Increase = No effect + Increase
7. Pay for advertising for the current month. Decrease = No effect + Decrease
8. Repay loan from the bank. Decrease = Decrease + No effect
9. Pay dividends to stockholders. Decrease = No effect + Decrease
10. Receive cash from customers in (4) above. Increase + Decrease = No effect + No effect
11. Pay for supplies purchased in (2) above. Decrease = Decrease + No effect
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Warner Company purchases $50,500 of raw materials on account, and it incurs $65,000 of factory labor costs. Supporting records show that:_______. A) the Assembly Department used $31,700 of raw materials and $38,300 of the factory labor.B) the Finishing Department used the remainder.
Answer:
1. The Journal Entry for the above will be as follows;
a.
DR Work in Progress - Assembly $31,700
DR Work in Progress - Finishing $ 18,800
CR Raw Materials $50,500
Working
Finishing Department used remainder = 50,500 - 31,700
= $18,800
b.
DR Work in Progress - Assembly $38,300
DR Work in Progress - Finishing $ 26,700
CR Factory Wages $65,000
Working
Finishing Department used remainder = 65,000 - 38,300
= $65,000
Scampini Technologies is expected to generate $125 million in free cash flow next year, and FCF is expected to grow at a constant rate of 3% per year indefinitely. Scampini has no debt or preferred stock, and its WACC is 12%. If Scampini has 65 million shares of stock outstanding, what is the stock's value per share
Answer:
$21.37
Explanation:
Firm value = FCF1 / (WACC – g)
Firm value = $125,000,000/(0.12 – 0.03)
Firm value = $1,388,888,888.89
Equity value per share = Equity value / Shares outstanding
Equity value per share = $1,388,888,888.89 / 65,000,000
Equity value per share = $21.37
Suppose the reserve requirement ratio is 20 percent. Assuming no bank holds excess reserves and nobody withdraws cash, a $10,000 injection of new reserves by the Fed can create (in the entire mult-banking system), a maximum of:
Answer:
The maximum money created is $50000
Explanation:
The given reserve requirement ratio is = 20 percent
The injection of cash = $10000
So, first, we have to find the money multiplier and then multiply with the injected amount.
Since the reserve requirement is 20 percent so the money multiplier = 1/ 20 = 0.5 or 5.
The Fed can create the maximum money = 10,000 x 5 = 50,000
On August 15, it sold 30 units. Using the FIFO perpetual inventory method, what is the value of the inventory at August 15 after the sale?
Answer: $210
Explanation:
When using the First In First Out (FIFO) method of Inventory Valuation, the company sells the goods that it acquired earliest first and then sells the goods acquired later last.
This company sold 30 units on August 15.
That would mean that using FIFO, the company sold all of its August opening inventory of 15 units. It also sold all 10 units purchased on August 5th and then sold 5 units from the August 12th purchase of 20 units.
= 15 + 10 + 5
= 30 units
This means that the only units left are;
= 20 - 5
= 15 units of the August 12th purchase are left.
Units cost $14 each.
Value of Inventory after sale = 15 units * 14
= $210
What is the annual percentage rate on a loan with a stated rate of 2.75 percent per quarter?A. 11.00 percentB. 11.09 percentC. 11.18 percentD. 11.27 percentE. 11.31 percent
Answer:
A. 11.00 percent
Explanation:
The computation of the annual percentage rate is shown below:-
Annual percentage rate = Percentage of stated rate × Number of quarters per year
= 2.75% × 4
= 11%
Therefore for computing the annual percentage rate we simply applied the above formula i.e multiplying the percentage of the stated rate with the number of quarters in a year
So, the correct option is A.
The annual percentage rate on a loan with a stated rate of 2.75 percent per quarter is 11.27 percent.
To calculate the annual percentage rate (APR) on a loan with a stated rate of 2.75 percent per quarter, we need to use the following formula: APR = (1 + periodic interest rate)^n - 1. Here, the periodic interest rate is 2.75 percent, and n is the number of compounding periods in a year, which is 4. Substituting these values into the formula, we get: APR = (1 + 0.0275)^4 - 1 = 0.1127 or 11.27%. Therefore, the annual percentage rate on the loan is 11.27 percent.
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In the classical model of decision making, the most appropriate decision possible in light of what is believed to be the most desirable consequences for the organization is known as the _______ decision. intuitive creative heuristic subjective optimum
Answer:
Optimum
Explanation:
The Classical approach to decision making is specific on making decisions to achieve required outcome. Under this approach, decisions are rationl and geared towards one stable and sustainable goal. The most appropriate decision possible in light of what is believed to be the most desirable consequences for the organization is the Optimum. The decision maker always makes decisions based on what is the best interests of that organization.
Depreciation by Three Methods; Partial Years Perdue Company purchased equipment on April 1 for $86,670. The equlpment was expected to have a useful life of three years, or 6,480 operating hours, and a residual value of $2,430. The equipment was used for 1,200 hours during Year 1, 2,300 hours in Year 2, 1,900 hours in Year 3, and 1,080 hours in Year 4 Required:Determine the amount of depreciation expense for the years ended December 31, Year 1, Year 2, Year 3, and Year 4, by (a) the straight-line method, (b) units-of-output method, and (c) the double-declining-balance method. r A. Straight-line method Year AmountYear 1 21,060 Year 2 28,080Year 3 28,080Year 4 7,020 B. Units-of-output method Year Amount Year 1 15,600Year 2 29,900Year 3 24,700
Answer:
purchase cost $86,670
useful life 3 years, 6,480 operating hours
residual value $2,430
a. the straight-line method
depreciation expense per year = ($86,670 - $2,430) / 3 = $28,080
depreciation year 1 = $28,080 x 9/12 = $21,060 depreciation year 2 = $28,080 depreciation year 3 = $28,080 depreciation year 4 = $28,080 x 3/12 = $7,020b. units-of-output method.
depreciation per hour = ($86,670 - $2,430) / 6,480 = $13
depreciation year 1 = 1,200 x $13 = $15,600 depreciation year 2 = 2,300 x $13 = $29,900 depreciation year 3 = 1,900 x $13 = $24,700 depreciation year 4 = 1,080 x $13 = $14,040c. the double-declining-balance method.
depreciation year 1 = 2 x 1/3 x $86,670 x 9/12 = $43,335 depreciation year 2 = $14,445 + (2 x 1/3 x $28,890 x 9/12) = $28,090 depreciation year 3 = $4,815 + (2 x 1/3 x $9,630 x 9/12) = $9,630 depreciation year 4 = $1,605 + ($3,210 - $2,430) = $2,385Rollins Corporation is estimating its WACC. Its target capital structure is 20 percent debt, 20 percent preferred stock, and 60 percent common equity. Its bonds have a 12 percent coupon, paid semiannually, a current maturity of 20 years, and sell for $1,000. The firm could sell, at par, $100 preferred stock which pays a 12 percent annual dividend, but flotation costs of 5 percent would be incurred. Rollins' beta is 1.2, the risk-free rate is 10 percent, and the market risk premium is 5 percent. Rollins is a constant-growth firm which just paid a dividend of $2.00, sells for $27.00 per share, and has a growth rate of 8 percent. The firm's policy is to use a risk premium of 4 percentage points when using the bond-yield-plus-risk-premium method to find rs. The firm's marginal tax rate is 40 percent. What is Rollins' cost of preferred stock? Select one: a. 10.0% b. 11.0% c. 12.0% d. 12.6% e. 13.2%
Answer:
d. 12.6%
Explanation:
Rollins Corporation will receive $100 - ($100 x 5% flotation costs) = $100 - $5 = $95 net for each preferred stock issued
Since it will have to pay $12 on preferred dividends, the cost of preferred stocks = preferred dividend per preferred stock / net amount received per preferred stock = $12 / $95 = 0.1263 = 12.6%
Flotation costs are costs that a corporation incurs when issuing new stocks or bonds, and they include legal fees, underwriting fees, etc.
Answer:
d. 12.6
Explanation:
_____ occurs when a creditor obtains a court order that directs an employer to set aside a portion of an employee's wages to pay a debt owed to the creditor.
Answer:
Garnishment
Explanation:
Garnishment refers to an order in which a person directs a third party with respect to seize assets i.e salary earned from employment or money in a bank account so that the unpaid debt amount could be settled out
In the given case, the same situation occurs so this is a case of garnishment and the same is to be considered
ZNet co. is a web based retail company. The company reports the following for the past year. The company's CEO believes that sales for next year will increase by 10% and both profit margin and the level of average invested assets will be the same as for the past year
1. Compute return on investment for 20172. Compute profit margin for 20173. If the CEO's forecast is correct, what will return on investment equal for 2018?4. If the CEO's forecast is correct, what will investment turnover equal for 2018?
Answer:
1. 17%
2. 42.5%
3. $2,748,900
4. 44%
Explanation:
1. Return on Investment for 2017
= [tex]\frac{Operating Income}{Average Invested Assets}[/tex]
= [tex]\frac{2,499,000}{14,700,000}[/tex]
= 17%
2. Profit Margin 2017
= [tex]\frac{Operating Income}{Sales}[/tex]
= [tex]\frac{2,499,000}{5,880,000}[/tex]
= 42.50%
3. Should the sales increase by 10% in 2018 then the new sales figure will be;
= $5,880,000 + ($5,880,000 *10%)
= $6,468,000
Profit = Sales * Profit Margin
= 6,468,000 * 42.5%
= $2,748,900
Return on Investment for 2018
= [tex]\frac{Operating Income}{Average Invested Assets}[/tex]
= [tex]\frac{2,748,900}{14,700,000}[/tex]
= 18.7%
4. Investment turnover equal for 2018
= [tex]\frac{ Sales}{Average Invested Assets}[/tex]
= [tex]\frac{6,468,000}{14,700,000}[/tex]
= 44%
Assume that the U.S. one-year interest rate is 3 percent and the one-year interest rate on Australian dollars is 6 percent. The U.S. expected annual inflation is 5 percent, while the Australian inflation is expected to be 7 percent. You have $100,000 to invest for one year and you believe that PPP holds. The spot exchange rate of an Australian dollar is $0.689. What will be the yield on your investment if you invest in the Australian market
Answer:
4%
Explanation:
you invest $100,000 today and purchase A$145,137.88
in one year, you will have A$152,394.78
since the PPP stands, the spot rate in one year should be:
0.703 US$ per A$ (since Australia's inflation rate is 2% higher than the US inflation rate, the Australian dollar will depreciate by 2%)
with your A$152,394.78, you can purchase $107,133.53
if you invested in the US instead, you would have $103,000
this means that your Australian investment yielded ($107,133.53 / $103,000) - 1 = 0.04 or 4%
Bach Instruments Inc. makes three musical instruments: flutes, clarinets, and oboes. The budgeted factory overhead cost is $2,948,125. Overhead is allocated to the three products on the basis of direct labor hours. The products have the following budgeted production volume and direct labor hours per unit: Budgeted Production Volume Direct Labor Hours Per Unit Flutes 2,000 units 2.0 Clarinets 1,500 3.0 Oboes 1,750 1.5 a. Determine the single plantwide overhead rate.
Answer:
Predetermined manufacturing overhead rate= $391.78 per direct labor hour
Explanation:
Giving the following information:
Budgeted factory overhead= $2,948,125.
Direct labor hours:
Flutes= 2,000*2= 4,000
Clarinets= 1,500*3= 4,500
Oboes= 1,750*1.5= 2,625
Total direct labor hours= 7,525
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
Predetermined manufacturing overhead rate= 2,948,125/7,525
Predetermined manufacturing overhead rate= $391.78 per direct labor hour
A customer wishes to place a buy order for a security that has not been registered with the SEC. The security may be purchased if the security:
Complete Question:
A customer wishes to place a buy order for a security that has not been registered with the SEC. The purchase order can be filled if the security:
A. is exempt from SEC registration
B. is traded by at least 2 market makers
C. has been trading in the market for at least 1 year
D. is sold to professional investors
Answer:
Is exempt from SEC registration
Explanation:
The Securities and Exchange Commission (SEC) is a regulatory agency that is saddled with the responsibility of regulating the capital market and ensuring investors are well protected by making sure standard rules are followed.
If a customer wishes to place a buy order for a security that has not been registered with the Securities and Exchange Commission (SEC). The security may be purchased if the security is exempt from SEC registration.
By standard, the SEC states and implore investors to purchase only securities that are registered with the securities and exchange commission (SEC) or only when an exemption is made available. If securities have been trading for about a year or is being traded by a minimum of two companies, no exemption would be given by the SEC.
Also, there isn't any exemption for securities that is sold only to professional investors.
However, investors can purchase municipal and government securities even without it being registered with the securities and exchange commission.
In a nutshell, the customer can only purchase a security that has not been registered only if it is exempted from SEC registration.
Look at the tables below, which show, respectively, the willingness to pay and willingness to accept of buyers and sellers of bags of oranges. For the following questions, assume that the equilibrium price and quantity will depend on the indicated changes in supply and demand. Assume that the only market participants are those listed by name in the two tables.
Person Max Actual
bob 13 8
barly 12 8
bill 11 8
bart 10 8
brent 9 8
betty 8 8
Person Minimum Actual
carlos 3 8
courtney 4 8
chunk 5 8
cindy 6 8
craig 7 8
chad 8 8
Required:
a. Given that the equilibrium price is $8, what is the equilibrium quantity given the data displayed in the two tables?
b. What if, instead of bags of oranges, the data in the two tables dealt with a public good like fireworks displays? If all the buyers free ride, what will be the quantity supplied by private sellers?
c. Assume that we are back to talking about bags of oranges (a private good), but that the government has decided that tossed orange peels impose a negative externality on the public that must be rectified by imposing a $2-per-bag tax on sellers. What is the new equilibrium price?
Answer and Explanation:
a. The equilibrium quantity for the given two tables is
As if the equilibrium price is $8 so the six consumers i.e bob, barly,bill,bart, brent, betty) are paying more than the equilibrium price and on the other hand six producers (carlos, courtney, chunk, cindy, craig, chad) are accepted the price as the equilibrium price is more than the accepted price
Hence, the equilibrium quantity is 6
b. Now if all the buyers are free to ride so the quantity supplied by private sellers is 0 as the minimum accepted price is more than the willingness price as producers is not able to produced
c. At imposing $2 per bag tax on sellers, the new equilibrium price is $9 as the price rise to $9
It is based on perceived characteristics such as style, fashion or peer acceptance.
Answer:
Consumer buying behavior
Explanation:
Due to various factors that affect consumer's purchase decision, crucial among them is emotional factors.Thus, many consumer marketing put more efforts in creating a stimulating discretionary buying behavior through catchy and enticing advertisement to create and increase demand.
Hence, considering that often times consumer goods are discretionary products people may want but don’t necessarily need, such as entertainment services and vacation travel, it can be concluded that CONSUMER BUYING BEHAVIOR is based on perceived characteristics such as style, fashion or peer acceptance.
Accounts Receivable has a balance of $6,000, and the Allowance for Bad Debts has a credit balance of $400. The allowance method is used. What is the net realizable value of Accounts Receivable after a $150 account receivable is written off
Answer:
Net realizable value of accounts receivable is $5,600
Explanation:
Balance in allowance for uncollectible account = Balance before write off - Account written off
= $400 - $150
= $250
Net realizable value of accounts receivable is therefore;
Accounts receivable balance
$6,000
Less: Account written off
$150
Balance after write off
$5,850
Less : Allowance for uncollectible account
$250
Net realizable value
$5,600
A paint manufacturing company produces three paint bases of differing quality. Due to throughput limitations (measured in gallons) at their facility, they are unable to meet total demand for their products. In determining which of their products they should produce, what should they consider?
a. The gross profit per unit for each product
b. The operating margin per unit for each product
c. The contribution margin per gallon of throughput for each product
d. None of the above
Answer:
c. The contribution margin per gallon of throughput for each product
Explanation:
contribution margin per gallon = Revenue per gallon - variable cost per gallon.
Contribution margin would enable the company to know the amount each product earns in excess after variable cost has been subtracted from revenue.
the product with the highest contribution margin should be considered.
What's the term for the illegal practice of nudging buyers away from or toward a specific area based on the presence or absence of protected class members
Answer: steering
Explanation:
Steering is an illegal practice whereby people that are looking for homes are channeled towards particular areas based on their social status or race.
In such scenarios, the choice of the person looking for a home is being influenced by the person's gender, color, race, status, religion, disability, or national origin.
At the beginning of the current year, Penguin Corporation (a calendar year taxpayer) has accumulated E & P of $55,000. During the year, Penguin incurs a $36,000 loss from operations that accrues ratably. On October 1, Penguin distributes $40,000 in cash to Holly, its sole shareholder.
How is Holly taxed on the distribution?
Of the $40,000 distribution, ...........................$ is taxed as a dividend and $ ....................represents a return of capital.
Answer:Of the $40,000 distribution, ....$28,000....................... is taxed as a dividend and $12,000...................represents a return of capital.
Explanation:
we will first compute dividend income for Holly
Loss from operations in the year =$36,000
Loss accrued till October 1st, since it accrues ratably
January - September= 9 months
36,000 x 9/12 = $27,000
But E&P at start of the year = $55,000
Therefore, E&P at October 1st = $55,000- $27,000 = $28,000
The remaining balance. $28,000 after the losses accrued have been deducted will be treated as dividend income
From the statement, the total cash distributed to Holly is $40,000,
$28,000 as calculated from above Is taxed as a dividend and $12,000 ( $40,000- $28,000) represents a return of capital.
On September 1, a company established a petty cash fund of $230. On September 10, the petty cash fund was replenished when there was $81 remaining and there were petty cash receipts for supplies, $53, and postage, $80. On September 15, the petty cash fund was increased to $320.
Required:
Prepare the journal entries, if any, required on September 1, September 10, and September 15. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)
Answer:
September 1, petty cash fund is established
Dr Petty cash fund 230
Cr Cash 230
September 10, petty cash expenses
Dr Supplies expense 53
Dr Postage expense 80
Dr Cash short and over 16
Cr Petty cash fund 149
September 10, petty cash is replenished
Dr Petty cash fund 149
Cr Cash 149
September 15, petty cash fund in increased
Dr Petty cash fund 90
Cr Cash 90
Indicate whether the following actions would increase, decrease, or not affect Indigo Inc.'s total assets, liabilities, and stockholders' equity:
Question Assets Liabilities Stockholders Equity
1. Authorizing and issuing stock certificates in a stock split
2. Declaring a stock dividend
3. Issuing stock certificates for the stock dividend declared in (2)
4. Declaring a cash dividend
5. Paying the cash dividend declared in (4)
Answer:
Assets Liabilities Stockholder's Equity
1. Authorizing and issuing Not affect Not affect Not affect
stock certificates in a
stock split
2. Declaring a stock Not affect Not affect Not affect
dividend
3. Issuing stock certificates Not affect Not affect Not affect
for the stock dividend
declared in (2)
4. Declaring a cash dividend Not affect Increase Decrease
5. Paying the cash dividend Decrease Decrease Not affect
declared in (4)
Determine the market price that Firm A receives for its product. Assume the price is constant because the firm is a price taker in a perfectly competitive market.
Answer: $28
Explanation:
In a Perfectly Competitive Market, firms are price takers in that the price is set by the market. As a result, the Price is equal to the Average Revenue as well as the Marginal Revenue. P = AR = MR
In the table, the Marginal Revenue (increase in revenue when an additional unit is sold) is $28 for all quantities and the Average Revenue at the fifth (and all units) is;
= 140/5
= $28
With both the Average and Marginal Revenues being $28, the price that Firm A receives is $28 as well.
A plan that reports the units or costs of merchandise to be purchased by a merchandising company during the budget period is called a:
Answer:
Merchandise purchases budget.
Explanation:
The Merchandise purchases budget is a plan that reports the units or costs of merchandise to be purchased by a merchandising company during the budget period.
It is prepared by a retail company to make sure it has sufficient inventory on hand. It uses the budgeted sales figures from the Sales Budget to decide the quantity of inventory to be bought at each period
The correct statement is that a plan that reports the units or costs of merchandise to be purchased by merchandising company is called a
It denotes and helps in understanding the formulation of inventories and free cash flows in the hands of the company as on the date of preparation of budgets by a merchandising company.
The requirement of the merchandising company to purchases can be estimated by addition of cost of goods sold and the desired ending cost of inventory which is to be subtracted with opening stock.The formula to calculate the merchandise purchases budget by a merchandising company can be stated as below,[tex]\rm Merchandise\ Purchases\ Budget= \ Costs\ of\ Goods\ sold\ + Desired\ Inventory\ - Stock[/tex]The formula stated above is effective in analyzing how much units are to be produced and the costs that can be reduced or born, if any by such merchandising company.Hence, the correct statement is that a report which suggests merchandise to be purchased by a company for a given accounting period is known as merchandise purchase budgeting report.
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