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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Pace corporation acquired 100 percent of spin company's common stock on January 1, 20X9. Balance sheet data for the two companies immediately following the acquisition follow:
Item Pace Corporation Spin Company
Cash $30,000 $25,000
Accounts Receivable 80,000 40,000
Inventory 150,000 55,000
Land 65,000 40,000
Buildings and Equipment 260,000 160,000
Less: Accumulated Depreciation (120,000) (50,000)
Investment in Spin Company Stock 150,000
Total Assets $615,000 $270,000
Accounts Payable $45,000 $33,000
Taxes Payable 20,000 8,000
Bonds Payable 200,000 100,000
Common Stock 50,000 20,000
Retained Earnings 300,000 109,000
Total Liabilities and Stockholders’ Equity $615,000 $270,000
At the date of the business combination, the book values of Spin's net assets and liabilities approximated fair value except for inventory, which had a fair value of $60,000, and land, which had a fair value of $50,000. The fair value of land for Pace Corporation was estimated at $80,000 immediately prior to the acquisition.
1. Based on the preceding information, at what amount should total land be reported in the consolidated balance sheet prepared immediately after the business combination?
a. $130,000
b. $105,000
c. $115,000
d. $120,000
2. Based on the preceding information, what amount of total assets will appear in the consolidated balance sheet prepared immediately after the business combination?
a. $756,000
b. $735,000
c. $750,000
d. $642,000
3. Based on the preceding information, what is the differential associated with the acquisition?
a. $15,000
b. $21,000
c. $6,000
d. $10,000
4. Based on the preceding information, what amount of goodwill will be reported in the consolidated balance sheet prepared immediately after the business combination?
a. $0
b. $21,000
c. $6,000
d. $15,000
5. Based on the preceding information, what amount of liabilities will be reported in the consolidated balance sheet prepared immediately after the business combination?
a. $615,000
b. $406,000
c. $300,000
d. $265,000
Answer:
Pace Corporation and Spin Company
1. Land should be reported in the consolidated balance sheet as
a. $130,000
2. Total assets:
b. $735,000
3. The differential associated with the acquisition:
b. $21,000
4. Goodwill
b. $21,000
5. Amount of liabilities in the consolidated balance sheet:
b. $406,000
Explanation:
a) Data:
Item Pace Spin
Corporation Company
Cash $30,000 $25,000
Accounts Receivable 80,000 40,000
Inventory 150,000 55,000
Land 65,000 40,000
Buildings and Equipment 260,000 160,000
Less: Accumulated Depreciation (120,000) (50,000)
Investment: Spin Company Stock 150,000
Total Assets $615,000 $270,000
Accounts Payable $45,000 $33,000
Taxes Payable 20,000 8,000
Bonds Payable 200,000 100,000
Common Stock 50,000 20,000
Retained Earnings 300,000 109,000
Total Liabilities and Stockholders’
Equity $615,000 $270,000
b) Consolidated Balance Sheets
Item Pace Spin Total
Corporation Company Group
Cash $30,000 $25,000 $55,000
Accounts Receivable 80,000 40,000 120,000
Inventory 150,000 60,000 210,000
Land 80,000 50,000 130,000
Buildings and Equipment 260,000 160,000 420,000
Less: Accumulated
Depreciation (120,000) (50,000) (170,000)
Investment:
Spin Company Stock 150,000 0
Goodwill 21,000
Total Assets $630,000 $285,000 $786,000
Accounts Payable $45,000 $33,000 $78,000
Taxes Payable 20,000 8,000 28,000
Bonds Payable 200,000 100,000 300,000
Common Stock 50,000 20,000 50,000
Retained Earnings 300,000 109,000 300,000
Assets Revaluation 15,000 15,000 30,000
Total Liabilities and Stockholders’
Equity $630,000 $285,000 $786,000
c) Differential on acquisition = investment (of subsidiary) - net assets
= $150,000 - ($270,000 - 141,000) = $21,000
Financial Statements of a Manufacturing Firm The following events took place for Sorensen Manufacturing Company during January, the first month of its operations as a producer of digital video monitors:
a. Purchased $250,000 of materials.
b. Used $180,000 of direct materials in production.
c. Incurred $450,000 of direct labor wages.
d. Incurred $180,000 of factory overhead.
e. Transferred $760,000 of work in process to finished goods.
f. Sold goods for $1,200,000.
g. Sold goods with a cost of $675,000.
h. Incurred $215,000 of selling expense.
i. Incurred $125,000 of administrative expense.
Required:
a. Prepare the January income statement for Sorensen Manufacturing Company.
b. Determine the inventory balances at the end of the first month of operations.
Answer:
Required a.
January income statement for Sorensen Manufacturing Company
Sales $1,200,000
Less Cost of Sales ($675,000)
Gross Profit $525,000
Less Expenses :
Selling expense ($215,000)
Administrative expense ($125,000)
Net Income / (Loss) $185,000
Required b.
Work In Process Inventory = $120,000
Finished Goods Inventory = $85,000
Explanation:
Manufacturing Cost Schedule (Determination of Work In Process Inventory)
Direct Materials $180,000
Indirect Materials ($250,000 - $180,000) $70,000
Direct Labor $450,000
Factory Overheads $180,000
Total Cost of Goods Manufactured $880,000
Less Transferred to finished goods ($760,000)
Closing Work In Process Inventory $120,000
Finished Goods T- Account (Determination of Finished Goods Inventory)
Debit :
Transferred from Work In Process $760,000
Totals $760,000
Credit:
Trading Account $675,000
Ending Finished Goods Inventory $85,000
Totals $760,000
A car dealership spends $700,000 on cars to stock their lot. After a day of sales, they earn a total revenue of $1,500,000. What is the car dealership's profit? g
Answer:
$800,000
Explanation:
The computation of the car dealership profit is shown below:
Car dealership profit is
= Total revenue earned - total cost spent
where,
Total revenue earned is $1,500,000
And, the total cost spent is $700,000
So, the car dealership profit is
= $1,500,000 - $700,000
= $800,000
We simply deduct the total cost spent from the total revenue earned so that we get to know car dealership profit
Patton Company purchased $1,500,000 of 10% bonds of Scott Company on January 1, 2021, paying $1,410,375. The bonds mature January 1, 2031; interest is payable each July 1 and January 1. The discount of $89,625 provides an effective yield of 11%. Patton Company uses the effective-interest method and plans to hold these bonds to maturity.*USE T ACCOUNTS
On July 1, 2018, Patton Company should increase its Debt Investments account for the Scott Company bonds by?
For the year ended December 31, 2018, Patton Company should report interest revenue from the Scott Company bonds of?
Answer:
On July 1, 2018, Patton Company should increase its Debt Investments account for the Scott Company bonds by?
I will assume that the bonds were purchased on January 2018 and not January 2021.
The journal entry to record the purchase of the bonds was:
January 1, 2018, investment on bonds
Dr Debt Investment 1,500,000
Cr Cash 1,410,375
Cr Discount on Debt Investment 89,625
the journal entry to record the interests received on July 1, 2018 would be:
Dr Cash 75,000
Dr Discount on Debt Investment 2,570.63
Cr Interest revenue 77,570.63
Discount on Debt Investment = ($1,410,375 x 5.5%) - ($1,500,000 x 5%) = $77,570.63 - $75,000 = $2,570.63
Patton company should increase its Debt investment by $2,570.63 (amortized discount).
For the year ended December 31, 2018, Patton Company should report interest revenue from the Scott Company bonds of?
The journal entry to record accrued interests:
Dr Interest receivable 75,000
Dr Discount on Debt Investment 2,712
Cr Interest revenue 77,712
Discount on Debt Investment = ($1,412,945.63 x 5.5%) - ($1,500,000 x 5%) = $77,712 - $75,000 = $2,712
Total interest revenue for 2018 = $77,570.63 + $77,712 = $155,282.63
Fanelli Corporation, a merchandising company, reported the following results for July: Number of units sold 6,100 Selling price per unit $ 590 Unit cost of goods sold $ 413 Variable selling expense per unit $ 50 Total fixed selling expense $ 125,600 Variable administrative expense per unit $ 28 Total fixed administrative expense $ 207,500 Cost of goods sold is a variable cost in this company. Required: a. Prepare a traditional format income statement for July. b. Prepare a contribution format income statement for July.
Answer:
Instructions are below.
Explanation:
The absorption costing method includes all costs related to production, both fixed and variable. The unit product cost is calculated using direct material, direct labor, and total unitary manufacturing overhead.
The variable costing method incorporates all variable production costs (direct material, direct labor, and variable overhead).
I will assume that there is no beginning nor ending inventory.
Absorption costing income statement:
Sales= 6,100*590= 3,599,000
COGS= (6,100*413)= (2,519,300)
Gross profit= 1,079,700
Total selling expense= (6,100*50 + 125,600)= (430,600)
Total administrative expense= (6,100*28 + 207,500)= (378,300)
Net operating income= 270,800
Variable costing income statement:
Sales= 3,599,000
Total variable cost= 6,100*(413 + 50 + 28)= (2,995,100)
Total contribution margin= 603,900
Total fixed selling expense= (125,600)
Total fixed administrative expense= (207,500)
Net operating income= 270,800
Pump prices slide as crude oil falls to six-year low The average price for regular gasoline at U.S. pumps fell almost 4 cents in March to $2.50 a gallon. The price of crude oil dropped to $43.46 per barrel on March 17, the lowest since March 2009. Source: Bloomberg Business, March 23, 2015 Explain the effect of a lower crude oil price on the supply of gasoline. A fall in the price of crude oil will ______.
Answer:
lower the cost of producing gasoline and increase the supply of gasoline
Explanation:
Crude oil is an input needed in the production of gasoline. If the price of crude oil falls, it would become cheaper to make gasoline and therefore the supply of gasoline would increase.
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%
According to the basic quantity equation of money, if price and output fall while velocity increases, then: Group of answer choices
Answer:
The quantity of money will fall as well.
Explanation:
According to the quantity theory of money, money supply (M) and price level (P) in an economy are in direct proportion to one another.
In other words, the percentage change in price level is proportionate to the percentage change in Money Supplied.
The formula is given as:
M*V= P*T
where, V = Velocity of money and T = volume of the transactions.
Cheers!
With perfect price discrimination the monopoly a. charges each customer an amount equal to the monopolist's marginal cost of production. b. eliminates all price discrimination by charging each customer the same price. c. eliminates profits and increases consumer surplus. d. eliminates deadweight loss.
Answer:
Option D, Eliminates the dead-weight loss.
Explanation:
Option D is correct because there is dead-weight loss under monopoly because it produces less as compared to perfect competition. Therefore, a monopolist eliminates this dead-weight loss by producing at the level where the marginal cost curve cuts the marginal revenue curve and charging each consumer their willingness to pay the amount
For each situation, list the assumption, principle, or constraint that has been violated, if any.
A) East Lake Company recognizes revenue at the end of the production cycle but before sale. The price of the product, as well as the amount that can be sold, is not certain.
B) Hilo Company is in its fifth year of operation and has yet to issue financial statements.
C) Gomez, Inc. is carrying inventory at its original cost of $100,000. Inventory has a fair value of $110,000.
D) Bly Hospital Supply Corporation reports only current assets and current liabilities on its balance sheet. Equipment and bonds payable are reported as current assets and current liabilities, respectively. Liquidation of the company is unlikely debited the "Computers" account.
E) Chieu Company has inventory on hand that cost $400,000. Chieu reports inventory on its balance sheet at its current fair value of $425,000.
F) Toxy Syles, president of Classic Music Company, bought a computer for her personal use. She paid for the computer by using company funds debited the "Computers" account.
A. Going concern assumption
B. Periodically Assumption
C. Historial Cost Principle
D. Revenue Recognition Principle
E. Economic Entity Assumption
F. No Violation
Ansewer:
E i think
Explanation:
The following situations are correctly matched with the assumption, principle:
Revenue Recognition Principle: Before the sale but at the conclusion of the production cycle, East Lake Company records revenue. It is uncertain what the product will cost and how much can be sold.Periodically Assumption: Despite being in its fifth year of operation, Hilo Company has not yet released financial results.No Violation: Gomez, Inc. is holding goods at its $100,000 original cost. The fair value of the inventory is $110,000.Going concern assumption: On its balance statement, Bly Hospital Supply Corporation only lists current assets and current liabilities. Current assets and current liabilities are the amounts that are stated for equipment and bonds payable, respectively. It's doubtful that the "Computers" account would be debited during firm liquidation.Historial Cost Principle: Bly Hospital Supply Corporation only lists current assets and current liabilities on its balance sheet. The quantities for equipment and bonds payable are indicated as current assets and current liabilities, respectively. The "Computers" account would probably not be debited during corporate dissolution.Economic Entity Assumption: Toxy Syles, president of Classic Music Company, bought a computer for her personal use. She paid for the computer by using company funds and debited from the "Computers" account.What is the Going concern assumption?According to the going concern principle, any organization's operations will continue for the foreseeable future. According to the guiding principle, every choice made by a company should be made with its continued operation in mind rather than its eventual closure.
Thus, the mention above correctly matched the assumption, and principle.
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Tracy Company, a manufacturer of air conditioners, sold 190 units to Thomas Company on November 17, 2021. The units have a list price of $300 each, but Thomas was given a 20% trade discount. The terms of the sale were 4/10, n/30. Thomas uses a perpetual inventory system. 3. Prepare the journal entries to record the purchase by Thomas on November 17 and payment on November 26, 2021 and December 15, 2021 using the net method of accounting for purchase discounts.
Answer:Please see explanation column for answer.
Explanation:
Net purchase per unit = List price per unit - Trade discount
$300 - ( 300 x 20 %) = 300- (300 x 0.2)= 300 -60= $240
Total purchase amount = Number of units x Net purchase per unit
190 x 240= $45,600
Discount from purchase = Total purchase amount x discount percentage/ 100
=45,600 x 4/100= $1,824
Cash = $45,600
Discount = $1,824
Accounts payable = $43,776
Using the net method of accounting for purchase discounts.
A)Journal entries to record the purchase by Thomas on November 17, 2021
Account Debit Credit
Purchases $43,776
Account Payable $43,776
B)Journal entries to record the payment by Thomas on November 26, 2021
Account Debit Credit
Account Payable $43,776
Cash $43,776
C)Journal entries to record the payment by Thomas on December 15, 2021
Account Debit Credit
Account Payable $43,776
Interest expense $ $1,824
Cash $45,600
The net account payable by Thomas on November 17, 2021, is $43,776. The journal entries to record the purchase by Thomas is attached in the image.
Net purchase per unit = List price per unit - Trade discount
$300 - ( 300 × 20 %) = 300- (300 × 0.2)
= 300 -60
= $240
Total purchase amount = Number of units x Net purchase per unit
190 × 240= $45,600
Discount from purchase = Total purchase amount x discount percentage/ 100
=45,600 × 4/100
= $1,824
Cash = $45,600
Discount = $1,824
Accounts payable = $43,776
The journal entries to record the purchase by Thomas on November 17 and payment on November 26, 2021 and December 15, 2021 attached below in the image.
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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.
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.
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)
A firm in a purely competitive industry is currently producing 1,200 units per day at a total cost of $700. If the firm produced 1,000 units per day, its total cost would be $450, and if it produced 700 units per day, its total cost would be $425. Instructions: Round your answers to 2 decimal places. a. What are the firm's ATC at these three levels of production
Answer:
Explanation:
The average total cost is calculated as the total cost divided by the number of outputs. The firm's ATC at these three levels of production will be:
1. 1,200 units per day at a total cost of $700.
ATC = Total cost/output
ATC = $700/1200
ATC = $0.58
2. If the firm produced 1,000 units per day, its total cost would be $450.
ATC = Total cost/output
ATC = $450/1000
ATC = $0.45
3. If it produced 700 units per day, its total cost would be $425.
ATC = Total cost/output
ATC = $425/700
ATC = $0.61
Consider the following hypothetical data for an open economy (in millions):
Assets owned inside the U.S. by U.S. citizens = $140, 000140,000
Assets owned outside the U.S. by U.S. citizens = $23,35723,357
Assets owned outside the U.S. by foreign citizens = $110,000110,000
Assets owned inside the U.S. by foreign citizens = $22,78622,786
The value of the International Investment Position (IIP) of the U.S. is__________ $ nothing million.
Answer: $571 million
Explanation:
International Investment Position (IIP) is an Economic measure that is calculated to see the assets owned by the citizens of a country outside the country versus the assets owned by foreigners in the country in question. It is informally referred to as a nation's Balance Sheet with other countries.
It is calculated by;
Value of the International Investment Position of the US = Assets owned outside the US by the US citizens - Assets owned inside the US for the foreign citizens
= 23,357 - 22,786
= $571 million
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.
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%
Suppose Hoosiers, a specialty clothing store, rents space at a local mall for one year, paying $13,800 ($1,150/month) in advance on October 1.
Required:
1. Record the adjusting entries on December 31.
2. Record the payment of rent in advance of october 1.
3. Calculate the year-end adjusted balances of prepaid rent and rent expense (assuming the balance of Prepaid Rent at the beginning of the year is $0).
Answer:
1.
Dec 31 Rent expense $3450 Dr
Prepaid Rent $3450 Cr
2.
Oct 1 Prepaid Rent $13800 Dr
Cash $13800 Cr
3.
Year end balances at 31 December:
Rent Expense = $3450
Prepaid Rent = $10350
Explanation:
Assumption: The year end for the business in on 31 December.
1.
The rent is paid in advance thus it is an asset. On 31 December the adjusting entry will be made under the accrual principle to match the current period's rent expense and record it in the period to which it belongs to. Thus we will credit the rent expense for 3 months i.e. October, November and December. We will credit the asset account that is Prepaid Rent.
2.
The prepayment of rent is creating an asset account in the title of prepaid rent. The entry would be to record the asset prepaid rent by the full amount of the rent prepaid and credit the other asset account through which the payment is being made.
3.
The adjusted year end balance for rent expense will be the rent expense paid for this period that is $1150 * 3 = 3450
The balance in the prepaid rent account after adjusting the rent expense will be,
Prepaid rent = 13800 - 3450 = $10350
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.
Suppose you invested $100 in the Ishares High Yield Fund (HYG) a month ago. It paid a dividend of $2 today and then you sold it for $101. What was your dividend yield and capital gains on the investment
Answer:
Dividend yield= 2%
Capital gain = 1$
Explanation:
Capital gain is the difference between the cost of the shares when it was purchased and the price now
Capital gains = Price of the share now - cost of the shares
Capital gain = 101- 100 = 1
Capital gain = 1$
Dividend yield is the dividend earned as a proportion of the price of the share
Dividend yield = Dividend/ price × 100 =
Dividend = 2, Price = 101
Dividend yield = 2/101× 100 = 1.98
Dividend yield= 2%
Kerch Co. had beginning net fixed assets of $216,510, ending net fixed assets of $211,680, and depreciation of $40,435. During the year, the company sold fixed assets with a book value of $7,966. How much did the company purchase in new fixed assets?
Answer:
$43,571
Explanation:
The computation of the purchase in a new fixed asset is shown below:
Beginning net fixed assets $216,510
Less: depreciation expenses -$40,435
Net fixed assets -$176,075
Less: book value of sold assets -$7,966
Net fixed assets $168,109
Closing net fixed assets $211,680
purchases of net assets during the year $43,571 ($211,680 - $168,109)
We simply applied the above format
Which of the following is a true statement based upon the principle of the time value of money?
A. It is always best to receive money at a later point in time rather than an earlier point in time.
B. Money loses value over time if not used.
C. Money increases in value as time passes so long as it is not invested
D. The value of money does not increase or decrease as time passes.
Answer:
D.The value of money does not increase or decrease as time passes.
The value of money does not increase or decrease as time passes is a true statement based upon the principle of the time value of money. Therefore, the option D holds true.
What is the significance of time value of money?The principle of time value of money can be referred to or considered as a principle, which states that the value of money at a later date is lesser than at a present date, as the money has an earning potential in the interval of the due time.
According to this principle, it can easily be concluded that the money does not increase or decrease in its value with the passage of time, rather it is worth more in the present than at a future date because of the earning potent that the money possesses.
Therefore, the option D holds true and states regarding the significance of the time value of money.
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The CAL formed from the optimal risky portfolio will be __________ to the efficient frontier of risky assets.
Answer:
tangent
Explanation:
The Capital Allocation Line refers to a line that measures the assets profile with respect to risk plus reward and can be applied to determine the optimal portfolio.
The optimal portfolio involves both risk-free assets and an efficient portfolio of assets i.e to be riskier.
The optimal portfolio of risky assets should be at that point at which the capital allocation line is tangent to the efficient frontier.
This portfolio is desirable since CAL 's slope is the maximum, implying we get the maximum return for the additional unit added with respect to risk.
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
Which of the following is a typical complaint of host-country competitors (such as GM, Ford etc) against foreign firms (such as KIA in the US)?a) foreign firms burden the host-country with infrastructure requirements.b) foreign firms lure local workers away from host-country businesses.c) foreign firms do not have to obey host-country law and regulations.d) foreign firms receive financial support from host-country governments.
Answer:
Option (d) is the correct answer to this question.
Explanation:
The nation in which those State members or organizations are involved at the request of the state and/or foreign negotiation.
A foreign country 's government, in which a representative and foreign embassies live while on duty. The diplomat and staff serve their own country's values and policies while being host country guests.
Other options are incorrect because they are not related to the given scenario.
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
Bob has saved $315 each month for the last 6 years to make a down payment on a house. The account earned an interest rate of .41 percent per month. How much money is in Bob's account
Answer:
The amount in Bob's account is $26320.516
Explanation:
The total amount saved each month for the down payment (A ) = $315
The interest rate per month (r ) = 0.41 %
Number of years (n ) = 6 years
Below is the calculation to find the total amount in Bob’s account. Here, we will take the number of compounding period as 72 because the interest rate is monthly compounded and there are 72 months in 6 years.
[tex]= A\left [ \frac{\left ( 1+r \right )^{n\times 12}-1}{r} \right ] \\= 315 \left [ \frac{\left ( 1+ 0.0041 \right )^{6\times 12}-1}{0.0041} \right ] \\= 315\left [ \frac{\left ( 1+ 0.0041 \right )^{72}-1}{0.0041} \right ] \\= $ 26320.516[/tex]
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