Answer:
$162.5
Explanation:
Amount of perpetuity = Annual Payment / Return earned
We need to solve for Annual payment
Hence, Annual payment = Amount of Perpetuity * Return earned
=$2,500 * 6.5 %
=$162.5
The annual cash payment that you must receive is $162.5
Suppose you purchased 100 shares of stock in 2010 for $20 a share, and the price now is $30 a share. If you sell the stock, then your capital gain is:__________.A. $3,000.B. $1,500.C. $1,000.D. indeterminate without knowing the inflation rate.
Answer:
Option D is correct
Explanation:
The cost of purchasing the 100 shares was $20 per share, in other words, the total amount paid for the stock acquisition is $2,000($20*100).
However, the later shares were sold for $3,000($30*100), which means that capital gain is the difference between the sales value and the acquisition value.
Capital gain=$3,000-$2,000=$1000
The correct option is D
For each of the following situations, select the best answer that applies to consolidating financial information subsequent to the acquisition date:
(A) Initial value method.
(B) Partial equity method.
(C) Equity method.
(D) Initial value method and partial equity method but not equity method.
(E) Partial equity method and equity method but not initial value method.
(F) Initial value method, partial equity method, and equity method.
_____1. Method(s) available to the parent for internal record-keeping.
_____2. Easiest internal record-keeping method to apply.
_____3. Income of the subsidiary is recorded by the parent when earned.
_____4. Designed to create a parallel between the parent's investment accounts and changes in the underlying equity of the acquired company.
_____5. For years subsequent to acquisition, requires the *C entry.
_____6. Uses the cash basis for income recognition.
_____7. Investment account remains at initially recorded amount.
_____8. Dividends received by the parent from the subsidiary reduce the parent's investment account.
_____9. Often referred to in accounting as a single-line consolidation.
_____10. Increases the investment account for subsidiary earnings, but does not decrease the subsidiary account for equity adjustments such as amortizations.
Answer:
1. Method(s) available to the parent for internal record-keeping - (A) Initial value method
2. Easiest internal record-keeping method to apply. - (F) Initial value method, partial equity method, and equity method.
3. Income of the subsidiary is recorded by the parent when earned. - (E) Partial equity method and equity method but not initial value method.
4. Designed to create a parallel between the parent's investment accounts and changes in the underlying equity of the acquired company. - (C) Equity method.
5. For years subsequent to acquisition, requires the *C entry. - (B) Partial equity method.
6. Uses the cash basis for income recognition. - (D) Initial value method and partial equity method but not equity method
7. Investment account remains at initially recorded amount. - (C) Equity method.
8. Dividends received by the parent from the subsidiary reduce the parent's investment account. - (E) Partial equity method and equity method but not initial value method.
9. Often referred to in accounting as a single-line consolidation. - (A) Initial value method
10. Increases the investment account for subsidiary earnings, but does not decrease the subsidiary account for equity adjustments such as amortizations - (A) Initial value method
You have the following information for Bridgeport Corp. for the month ended October 31, 2017. Bridgeport Corp. uses a periodic method for inventory.
Date Description Units Unit Cost or Selling Price
Oct. 1 Beginning inventory 60 $24
Oct. 9 Purchase 125 26
Oct. 11 Sale 107 37
Oct. 17 Purchase 94 27
Oct. 22 Sale 64 42
Oct. 25 Purchase 71 29
Oct. 29 Sale 104 42
Required:
a. Calculate the weighted-average cost.
b. Calculate ending inventory, cost of goods sold, gross profit under each of the following methods.
1. LIFO
2. FIFO
3. Avergae Cost
Answer:
Bridgeport Corp.
a. Weighted-average cost:
Weighted average cost = Cost of goods available for sale = $9,287
b. Ending inventory, cost of goods sold, gross profit under:
1. LIFO:
a) Ending Inventory = 75 units
Oct. 1 Beginning inventory 60 at $24 = $1,440
Oct. 9 Purchase 15 at $26 = 390
Total 75 = $1,830
b) Cost of goods sold = Cost of goods available for sale minus the ending inventory
= $9,287 - $1,830
= $7,457
c) Gross profit = Sales minus Cost of goods sold
= $11,015 - $7,457
= $3,558
2. FIFO:
a) Ending Inventory = 75 units
Oct. 17 Purchase 4 at $27 = $108
Oct. 25 Purchase 71 at $29 = 2,059
Ending Inventory 75 $2,167
b) Cost of goods sold = Cost of goods available for minus Ending Inventory
= $9,287 - $2,167
= $7,120
c) Gross profit = Sales minus Cost of goods sold
= $11,015 - $7,120
= $3,895
3. Average Cost:
a) Ending Inventory = 75 units
= Ending Inventory units x Weighted-Average cost
= 75 x $26.53 = $1,989.75
b) Cost of goods sold = units sold x weighted-average cost
= 275 x $26.53
= $7,295.75
c) Gross profit = Sales minus Cost of goods sold
= $11,015 - $7,295.75
= $3,719.25
Explanation:
a) Data and calculations:
Date Description Units Unit Cost Selling Price Total
Oct. 1 Beginning inventory 60 $24 $1,440
Oct. 9 Purchase 125 26 3,250
Oct. 11 Sale (107) $37 $3,959
Oct. 17 Purchase 94 27 2,538
Oct. 22 Sale (64) 42 2,688
Oct. 25 Purchase 71 29 2,059
Oct. 29 Sale (104) 42 4,368
Total 350 (275) $9,287 $11,015
Ending inventory in units = 350 - 275 = 75
Weighted average cost = $9,287
Weighted average cost per unit = $9,287/350 = $26.53
b) The LIFO is the Last-in, First-Out method of inventory costing which assumes that units bought last are the units to be sold first.
c) FIFO means the First-in, First-Out method of inventory costing. This takes the assumption that units bought first are the units to be sold first in that chronological order.
d) Weighted average method of inventory costing takes the weighted average cost and uses this to value the ending inventory and the cost of goods sold.
e) The periodic inventory system does not alter the value of inventory until at the end of the accounting period when the inventory count is done, reconciled, and valued.
The company offered Gwendolyn a(n) _____ for living in an unfamiliar country isolated from her family, dealing with a new culture and language, and adapting to new work habits and practices. She received this as a percentage of her base salary.
Answer:
Hardship allowance.
Explanation:
The company offered Gwendolyn a hardship allowance for living in an unfamiliar country isolated from her family, dealing with a new culture and language, and adapting to new work habits and practices. She received this as a percentage of her base salary.
A hardship allowance can be defined as an extra amount of money being paid by an employer to an employee for working in difficult or tedious conditions. Also, when an employee works in an unfamiliar environment, potentially dangerous territory, and deal with risks in living in isolation from his or family members, they are entitled to a hardship allowance from their employer.
Hardship allowance is usually calculated as a percentage of an employee's monthly salary.
For instance, Gwendolyn works for an oil company and he's given an assignment to go work at a rig in a warzone, he is entitled to a hardship allowance from his employer.
You decide to use your department store charge card .. a lot! After seven weeks you have racked up $1,400 of debt. Your minimum monthly payment is $45, and is paid at the end of each month. If the APR is 16.80%, how long will it take you to pay the loan off? (Assume that you make the minimum payment until the debt is entirely paid off.)
Answer:
41 months
Explanation:
For computing the time period we have to use the NPER formula i.e shown in the attachment
Given that,
Present value = $0
Future value = $1,400
Rate of interest = 16.80% ÷ 12 months = 1.4%
PMT = $45
The formula is shown below:
= NPER(Rate;PMT;PV;-FV;type)
The future value come in negative
So, after applying the above formula, the time period is 41 months
Find the present worth in year 0 of $60,000 in year 3 and amounts increasing by 15% per year through year 10 at an interest rate of 11% per year. g
Answer:
Present worth is 398,577
Explanation:
First we need to grow the payment by 15% each year after year 4. Then we need to discount the amounts using the interest rate of 11% each year.
All the workings are done in the pdf file attached with this answer, please find it.
The following is the adjusted trial balance of Wilson Trucking Company.
Account Title Debit Credit
Cash $8,000
Accounts receivable 17,500
Office supplies 3,000
Trucks 172,000
Accumulated
depreciation—Trucks $36,000
Land 85,000
Accounts payable 12,000
Interest payable 4,000
Long-term notes payable 53,000
Common stock 20,000
Retained earnings 155,000
Dividends 20,000
Trucking fees earned 130,000
Depreciation
expense—Trucks 23,500
Salaries expense 61,000
Office supplies expense 8,000
Repairs expense—Trucks12,000
Totals $410,000 $410,000
The Retained Earnings account balance is $155,000 at December 31, 2016.
(1) Prepare the income statement for the year ended December 31, 2017.
(2) Prepare the statement of retained earnings for the year ended December 31, 2017.
Answer:
1. Wilson Trucking Company
Income Statement
Revenues:
Trucking fees earned $130,000
Expenses:
Depreciation expense - Trucks $23,500
Salaries expense $61,000
Office Supplies expense $8,000
Repairs Expense - Trucks $12,000
Total Expenses $104,500
Net Income $25,500
2. Statement of Retained earnings
Beginning balance 1 Jan 17 $155,000
Add: Net Income $25,500
Less: Dividends $20,000
Ending Balance 31 Dec 2017 $160,500
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) = $2,385According to ComScore's U.S. total video report, which of the following statements is TRUE? Group of answer choices Younger audiences are more likely to consume news content on smartphones than traditional news platforms. Millennials are less likely to watch TV from an internetconnected TV device (e.g. Roku, Apple TV, Google Chromecast) as well as via a gaming console (e.g. Xbox, PlayStation, etc.) or Blu-Ray Player. Millennials spend one-third of their original TV series consumption time watching on digital platforms, with computers driving the majority of that activity. Generally speaking, the younger the viewer the greater percentage of time spent watching on "traditional" TV sets.
Answer: Millennials spend one-third of their original TV series consumption time watching on digital platforms, with computers driving the majority of that activity.
Explanation:
The report showed that Millennials who are loosely defined as those who were born between the years 1981 and 1996, preferred to watch TV series on digital platforms and when they do watch TV, they do it time-shifted or with a computer connected to the Television and simply projecting what the computer is showing.
This trend by Millennials towards digital platforms was put down to the Millennials' need to watch videos on their own time and these digital platforms offer that by simply putting videos there and leaving you to click on them whenever you want.
Block transactions are transactions for more than _______ shares, and they account for about _____ percent of all trading on the NYSE. Group of answer choices 500; 10 5,000; 23 100,000; 50 10,000; 30 1,000; 5
Answer:
10,000; 30.
Explanation:
Block transactions is also known as block trade and can be defined as transactions that deals with the sales or purchases of high-volume or large amounts of securities (bond or equity).
Under block transactions, securities are usually negotiated privately and traded at an agreed price rate between the buyer and the trader. Also, block trade of a security is mostly executed by the parties outside of the open market so as to mitigate the impact on its rate.
Basically, block transactions are transactions for more than 10,000 shares, and they account for about 30 percent of all trading on the New York Stock Exchange (NYSE). Generally, a block trade as defined by the New York Stock Exchange (NYSE) is one having a total market value of $200,000 or more.
The New York Stock Exchange (NYSE) is an American stock exchange founded on the 17th of May, 1792. NYSE by virtue of its market capitalization, is the world's largest stock exchange.
Equipment maintenance costs for manufacturing explosion-proof pressure switches are projected to be $125,000 in year 1 and increase by 4% each year through year 5. What is the equivalent uniform annual worth of the maintenance costs at an interest rate of 10% per year, compounded semiannually
Answer:
The equivalent uniform annual worth of the maintenance costs at an interest rate of 10% per year, compounded semiannually is $127,432
Explanation:
In order to calculate the equivalent uniform annual worth of the maintenance costs at an interest rate of 10% per year, compounded semiannually we would have to calculate the following formula:
equivalent uniform annual worth of the maintenance costs= P(i(1+i)∧n/(1+i)∧n-1
The rate of interest i would be as follows:
rate of interest i=(1+10%/2)-1
rate of interest i=0.1025*100
rate of interest i=10.25%
The present value P would be calculated as follows:
present value P=$125,000(1-(1+1/100)∧5 (1+10.25/100)∧-5/(10.25/100-1/100)
present value P=$125,000*3.84
present value P=$480,000
Therefore,
equivalent uniform annual worth of the maintenance costs=$480,000*(10.25/100 (1+10.25/100)∧5/(1+10.25/100)∧5-1)
equivalent uniform annual worth of the maintenance costs=$480,000*0.2654
equivalent uniform annual worth of the maintenance costs=$127,432
The equivalent uniform annual worth of the maintenance costs at an interest rate of 10% per year, compounded semiannually is $127,432
Exhibit 27-5 Units of Labor Quantity of Output Marginal Revenue 0 0 $6 1 100 6 2 180 6 3 250 6 4 310 6 5 330 6 Refer to Exhibit 27-5. The marginal revenue product of the second unit of labor is
Answer:
$480
Explanation:
marginal revenue is the increase in revenue as a result of selling one extra unit of output.
(180 - 100)x $6 = $480
please find attached a clear image of Exhibit 27-5
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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If Megan Roberts were given total marketing responsibility over Diet Cherry 7Up, she would hold the position of ____ manager.
Answer: Brand
Explanation:
Brand managers are the ones in charge of how a product is perceived by the public, especially their niche. They do this through Marketing which is publicizing the product.
They are therefore in charge of marketing the product to their niche so that the product can be bought and by being given total marketing responsibility over Diet Cherry 7Up, Ms Roberts is now most definitely, the Brand Manager.
Tax rates other than the current tax rate may be used to calculate the deferred income tax amount on the balance sheet if
Answer:
(A.) the future tax rates have been enacted into law.
Explanation:
In case when the rate of tax instead of the current tax rate used to compute the deferred amount related to income tax for the balance sheet if the rate of future tax is enacted in law i.e means when the future tax rate imposed under the taxation rules and regulations
Therefore option A is correct and the other options are incorrect
Ionic Charge, is a newly organized manufacturing business that plans to manufacture and sell 60,000 units per year of a new product. The following estimates have been made of the company’s costs and expenses (other than income taxes).
Fixed Variable per Unit
Manufacturing costs:
Direct materials $25
Direct labor $15
Manufacturing overhead $500,000 $8
Period costs:
Selling expenses $2
Administrative expenses $300,000
Totals $800,000 $50
Required:
a. What should the company establish as the sales price per unit if it sets a target of earning an operating income of $700,000 by producing and selling 60,000 units during the first year of operations? (Hint: First compute the required contribution margin per unit.)
b. At the unit sales price computed in part a, how many units must the company produce and sell to break even? (Assume all units produced are sold.)
c. What will be the margin of safety (in dollars) if the company produces and sells 60,000 units at the sales price computed in part a?
Answer:
a. What should the company establish as the sales price per unit if it sets a target of earning an operating income of $700,000 by producing and selling 60,000 units during the first year of operations?
$64.50b. At the unit sales price computed in part a, how many units must the company produce and sell to break even?
55,173 unitsc. What will be the margin of safety (in dollars) if the company produces and sells 60,000 units at the sales price computed in part a?
$311,341.50Explanation:
variable costs per unit:
direct materials $25
direct labor $15
manufacturing overhead $8
selling expenses $2
total $50
fixed costs per unit:
manufacturing overhead $500,000
administrative expenses $300,000
total $800,000
assuming the company actually produces and sells the 60,000 units
units sold = (fixed costs + expected profits) / contribution margin
60,000 = $870,000 / contribution margin
contribution margin = $870,000 / 60,000 = $14.50
contribution margin = sales price - variable costs
$14.50 = sales price - $50
sales price = $50 + $14.50 = $64.50
break even point = fixed costs / contribution margin = $800,000 / $14.50 = 55,172.41 ≈ 55,173 units
margin of safety = current sales - break even point = (60,000 x $64.50) - (55,173 x $64.50) = $311,341.50
When any two firms have both a high degree of market commonality and highly similar resources, a ______________ threat is present.
Answer: stronger, competitive
Explanation:
When there is a high identical resources base and and a high degree of market commonality between two firms ,this show that there is a stronger and competitive threat. It should be noted that despite this threat, there may be no competitive action.
A rival in the market may not want to attack a company that shares identical resources base because it can result into an intense battle. Also, attacking them can lead to more motivation and thereby produce a better quality product.
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.
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.
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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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.
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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You are given a loan on which interest is charged over a 4-year period, as follows: an effective rate of discount of 6% for first year; a nominal rate of discount of 5% compounded every 2 years for the second year; a nominal rate of interest of 5% compounded semiannually for the third year; and a force of interest of 5% for the fourth year. Calculate the annual effective rate of interest over the 4-year period.
Answer:
The annual effective rate of interest over the 4-year period is 0.0549
Explanation:
In order to calculate the annual effective rate of interest over the 4-year period we would have to make the following calculation:
(1+i)∧4=(1-nominal rate discount)∧-1*(1-nominal rate discount/1/2)∧-1/2*(1+nominal rate discount/2)∧e∧0.05
(1+i)∧4=(1-0.06)∧-1*(1-0.05/1/2)∧-1/2*(1+0.05/2)∧e∧0.05
(1+i)∧4=1.2385
Therefore, if (1+i)∧4=1.2385, i=0.0549
The annual effective rate of interest over the 4-year period is 0.0549
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.
On January 1, 2014, Brenner Company purchased at face value, a $1,000, 6% bond that pays interest on January 1 Brenner Company has a calendar year end. The entry for the receipt of interest on January 1, 2015 is
Answer:
Dr Cash 30
Cr Interest revenue 30
Explanation:
Preparation of te entry for the receipt of interest on January 1, 2015 for Brenner Company
Since we were told that On January 1, 2014, Brenner Company was said to have purchased at a face value, the amount of $1,000 with 6% bond that pays the interest in January 1 this means we have to record the transaction by Debiting Cash with $30 and Crediting Interest revenue with the same amount. The $30 is been calculated as:
1,000 *.06 *1/2 =$30
Therefore the entry for the receipt of interest on January 1, 2015 is:
Dr Cash 30
Cr Interest revenue 30
Which of the following accounting concepts states that an accounting transaction should be supported by sufficient evidence to allow two or more qualified individuals to arrive at similar measures
a. Matching
b. Stable monetary unit
c. Verifiability
d. Periodicty
Answer:
The correct answer is the option C: Verifiability.
Explanation:
To begin with, the accounting concept of "Verifiability" indicates that the accounts of a company are verifiable in the cases when those accounts are reproducible so that indicates that given the same data and assumpitions it is understandable that an independent accountant can produce the same result the company actually did. Therefore that the verifiability is the concept that states that an accounting transaction should be supported by sufficient evidence to allow two or more qualified accountants to arrive at similar measures as it said before.
The accounting concepts states that an accounting transaction should be option c. Verifiability
What is Verifiability?It represents that the accounts of a company are verifiable at the time when those accounts are produced again in order to provide the same data and assumption. So, that verifiability is the concept that states that an accounting transaction should be supported by enough evidence to permit two or more qualified accountants.
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Suppose that XTel currently is selling at $40 per share. You buy 500 shares using $15,000 of your own money, borrowing the remainder of the purchase price from your broker. The rate on the margin loan is 8%. a. What is the percentage increase in the net worth of your brokerage account if the price of XTel immediately changes to (a) $44; (b) $40; (c) $36? (Leave no cells blank - be certain to enter "0" wherever required. Negative values should be indicated by a minus sign. Round your answers to 2 decimal places.)
Answer:
Explanation:
a. What is the percentage increase in the net worth of your brokerage account if the price of XTel immediately changes to $44?
Total investment will be:
= 500 shares x $40 = $20,000
The Initial Net Worth =$15,000
Borrowed Amount = $20,000 - $15,000 = $5,000
New Net worth will be:
= $44 x 500 shares - 5000
= $22,000 - $5000
= $17,000
Percentage increase will be:
= [($17,000 - $15,000)/$15,000] × 100
= $2000/$15000 × 100
= 13.33%
b. What is the percentage increase in the net worth of your brokerage account if the price of XTel immediately changes to $40?
Total investment will be:
= 500 shares x $40 = $20,000
The Initial Net Worth =$15,000
Borrowed Amount = $20,000 - $15,000 = $5,000
New Net worth will be:
= $40 x 500 shares - 5000
= $20,000 - $5000
= $15,000
Percentage increase will be:
= [($15,000 - $15,000)/$15,000] × 100
= 0/$15000 × 100
= 0
c. What is the percentage increase in the net worth of your brokerage account if the price of XTel immediately changes to $36?
Total investment will be:
= 500 shares x $40 = $20,000
The Initial Net Worth =$15,000
Borrowed Amount = $20,000 - $15,000 = $5,000
New Net worth will be:
= $36 x 500 shares - 5000
= $18,000 - $5000
= $13,000
Percentage increase will be:
= [($13,000 - $15,000)/$15,000] × 100
= -$2000/$15000 × 100
= -13.33%
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
Alfarsi Industries uses the net present value method to make investment decisions and requires a 15% annual return on all investments. The company is considering two different investments. Each require an initial investment of $14,500 and will produce cash flows as follows: End of Year Investment A B 1 $9,500 $0 2 9,500 0 3 9,500 28,500 The present value factors of $1 each year at 15% are: 1 0.8696 2 0.7561 3 0.6575 The present value of an annuity of $1 for 3 years at 15% is 2.2832 The net present value of Investment A is: A. $18,739. B. $(14,500). C. $14,000. D. $(21,691). E. $7,190.
Answer:
E. $7,190
Explanation:
Net present value is the present value of after tax cash flows from an investment less the amount invested.
NPV can be calculated using a financial calculator
For project A,
Cash flow in year 0 = $-14,500
Cash flow in year 1 = $9,500
Cash flow in year 2 = $9,500
Cash flow in year 3 = $9,500
I = 15%
NPV = $7190.64
To find the NPV using a financial calacutor:
1. Input the cash flow values by pressing the CF button. After inputting the value, press enter and the arrow facing a downward direction.
2. After inputting all the cash flows, press the NPV button, input the value for I, press enter and the arrow facing a downward direction.
3. Press compute
I hope my answer helps you
_____ 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