When a famous painting becomes available for sale, it is often known which museum or collector will be the likely winner. Yet, the auctioneer actively woos representatives of other museums that have no chance of winning to attend anyway.
Suppose a piece of art has recently become available for sale and will be auctioned off to the highest bidder, with the winner paying an amount equal to the second highest bid. Assume that most collectors know that Janet places a value of $125,000 on the art piece and that she values this art piece more than any other collector. Suppose that if no one else shows up, Janet simply bids $125,000/2 = $5,000 and wins the piece of art.
The expected price paid by Kenji, with no other bidders present, is $:_________
Suppose the owner Of the artwork manages to recruit another bidder, Manuel, to the auction. Manuel is known to value the art piece at $8,000.
The expected price paid by Kenji, given the presence of the second bidder Manuel, is $:_________
Answers
Please find attached
Answer and Explanation:
1. If there are no other bidders present as from question them we can conclude that Kenji would buy the art piece for $5000. See question
2. If there is a bidder present in the name of Manuel who would bid for $8000 then Kenji would bid at $8000 and win the bid for the art piece. See question. Kenji would bid at price of 2nd highest bidder to win the bid for art piece
Related Questions
At December 31, 2013, Weiss Imports reported this information on its balance sheet.
Accounts receivable $600,000
Less: Allowance for doubtful accounts 37,000
During 2014, the company had the following transactions related to receivables.
1. Sales on account $2,500,000
2. Sales returns and allowances 50,000
3. Collections of accounts receivable 2,200,000
4. Write-offs of accounts receivable deemed uncollectible 41,000
5. Recovery of bad debts previously written off as uncollectible 15,000
To do;
1. Prepare the journal entries to record each of these five transactions. Assume that no cash discounts were taken on the collections of accounts receivable. (Credit account titles are automatically indented when amount is entered. Do not indent manually.)
2. Enter the January 1, 2014, balances in Accounts Receivable and Allowance for Doubtful Accounts, post the entries to the two accounts and determine the balances. (Post entries in the order of journal entries posted in the previous part)
3. Prepare the journal entry to record bad debt expense for 2014, assuming that aging the accounts receivable indicates that estimated bad debts are $46,000. (Credit account titles are automatically indented when amount is entered. Do not indent manually.)
4. Compute the accounts receivable turnover. (Round answer to 1 decimal place, e.g. 12.5.)
Accounts receivable turnover
Image for At December 31, 2013, Weiss Imports reported this information on its balance sheet. During 2014, the company
times
Compute the average collection period. (Round answer to 1 decimal place, e.g. 12.5.)
Average collection period
Image for At December 31, 2013, Weiss Imports reported this information on its balance sheet. During 2014, the company
days
Answers
Answer:
account receivables 2,500,000 debit
sales revenue 2,500,000 credit
--to record sales on account--
sales returns and allowances 50,000 debit
account receivables 50,000 credit
--to record return and allowances--
cash 2,200,000 debit
account receivables 2,200,000 credit
--to record collections--
Allowance for doubtful accounts 41,000 debit
Account receivables 41,000 credit
--to record write-off of receivables--
Account receivables 15,000 credit
Allowance for doubtful accounts 15,000 debit
cash 15,000 debit
account receivables 15,000 credit
--to record recovery of write-off account--
Balance:
Account Receivalbes 809,000
Allowance (before adjustment) 11,000
adjusting entry:
bad debt expense 35,000 debit
Allowance for doubtful accounts 35,000 credit
Allowance after adjustment: 46,000
Account receivables TO: 3.75
Explanation:
Account Receivables:
DEBIT CREDIT
600,000
2,500,000
50,000
2,200,000
41,000
15,000
809,000
Allowance:
DEBIT CREDIT
37,000
41,000
15,000
11,000
Aging: 46,000
Adjustment 35,000
Acc Rec TO
[tex]$$ net sales / net receivables \\\\(sales - returns) / (acc rec - allowance)[/tex]
beginning A/R 600,000 - 37,000 = 543,000
ending A/R 809,000 - 46,000 = 763,000
average: (763,000 + 543,000 ) / 2 = 653,000
(2,500,000 - 50,000) / 653,000 = 3,75191 = 3.75
Landhill Corporation is authorized to issue 49,000 shares of $5 par value common stock. During 2020, Sandhill took part in the following selected transactions.
1. Issued 4,500 shares of stock at $45 per share, less costs related to the issuance of the stock totaling $7,900.
2. Issued 1,100 shares of stock for land appraised at $49,000. The stock was actively traded on a national stock exchange at approximately $46 per share on the date of issuance.
3. Purchased 470 shares of treasury stock at $41 per share. The treasury shares purchased were issued in 2016 at $38 per share.
Required:
a. Prepare the journal entry to record item 1.
b. Prepare the journal entry to record item 2.
c. Prepare the journal entry to record item 3 using the cost metho
Answers
Answer: Please see answer in explanation column
Explanation:
1. Journal to record common stock issued
Account title Debit Credit
Cash $210,400
Common stock $22,500
Paid in capital in excess of par $187,900
common stock
Calculation:
Cash = 4,500 x $45 + $7900= $210,400
Common stock =4,500 x $5=$22,500
Paid in capital in excess of par common stock = Cash - Common stock =$210,400-$22,500=$187,900
2) To reccord Land purchased in exchange of common stock
Account title Debit Credit
Land $50,600
Common stock $ 5,500
Paid in capital in excess of par $45,100
common stock
Calculation:
Land= 1,100 x $46 = $50,600
Common stock =1,100 x $5=$5,500
Paid in capital in excess of par common stock = 1100 x (46-5)$41=45,100
3) To record purchase of treasury stock
Account title Debit Credit
Treasury stock $19,270
Cash $19,270
Calculation:
Treasury stock = 470 shares x$41= $19,270
The transactions of Spade Company:
a. Kacy Spade, owner, invested $16,750 cash in the company in exchange for common stock.
b. The company purchased office supplies for $486 cash.
c. The company purchased $9,263 of office equipment on credit.
d. The company received $1,977 cash as fees for services provided to a customer.
e. The company paid $9,263 cash to settle the payable for the office equipment purchased in transaction c.
f. The company billed a customer $3,551 as fees for services provided.
g. The company paid $520 cash for the monthly rent.
h. The company collected $1,491 cash as partial payment for the account receivable created in transaction f.
g. The company paid a $800 cash dividend to the owner (sole shareholder).
Required:
Prepare the Trial Balance. Use May 31 as its report date.
Answers
Answer:
Please see attached trial balance as requested.
Explanation:
Please find attached solved trial balance for Spade Company as at May 31.
What aspect does line weight represent? A. angle of a line B. color of a line C. length of a line D. thickness of a line
Answers
Answer:
D
Explanation:
Megan McCoy has a Bachelor's degree in business management and human resources. She has 5 years of HR experience as an HR assistant with her current employer. Megan thinks that with her education and experience, she is qualified for the position of HR manager. After observing her own boss, she feels confident that she could do that job. However, Megan knows that she does not see everything that her boss does, and may not be aware of all the tasks, duties, and responsibilities (TDRs) of the job, and the knowledge, skills, abilities, and other characteristics (KSAOs) necessary to do the job. To get more information about the occupation of an HR Manager, Megan did some research using the Occupational Information Network.
The general description of the job of HR manager includes
a. supervising and coordinating the activities of clerical and administrative support workers.
b. maintaining record of assets, liabilities, tax liability, and other financial activities.
c. maintaining functions such as employee compensation, recruitment, and personnel policies.
d. interacting with customers and handling and resolving customer complaints.
e. providing high-level administrative support by conducting research and preparing reports.
Answers
Answer:
c. maintaining functions such as employee compensation, recruitment, and personnel policies.
Explanation:
The human resources department in a company is increasingly important, since HR is the area where the company's human capital is managed, and more and more people must be valued in an organization, which currently assume the role promoters of human development both internally and externally.
The general job description of the HR manager includes maintaining roles such as employee compensation, recruitment and personnel policies.
To be an effective manager, there must be an understanding that employees have specific needs that must be met in the company, there must be policies that protect and value the employee according to the law, as well as the establishment of positions and fair remuneration and consistent with the function performed, preparation of training and development, etc.
Organizations are composed of people, therefore they are not rigid entities, it is necessary that the manager has flexibility to deal with people and their demands, always seeking to build positive professional relationships that contribute to an organizational culture favorable to the development of the skills and competences of the people.
You are invested in two hedge funds. The probability that hedge fund Alpha generates positive returns in any given year is 60%. The probability that hedge fund Omega generates positive returns in any given year is 70%. Assume the returns are independent. What is the probability that both funds generate positive returns in a given year? What is the probability that both funds lose money?
Answers
Answer:
42% and 12%
Explanation:
The computation is shown below:
For Alpha Fund
Positive return = 60%
Lose money is
= 1 - 0.60
= 40%
For Omega Fund
Positive return = 70%
Lose money is
= 1 - 0.70
= 0.30
Also the returns are non-dependent
Now the positive return is
= 60% × 70
= 42%
And, the probability of lose money is
= 40% × 30%
= 12%
Major League Bat Company manufactures baseball bats. In addition to its work in process inventories, the company maintains inventories of raw materials and finished goods. It uses raw materials as direct materials in production and as indirect materials. Its factory payroll costs include direct labor for production and indirect labor. All materials are added at the beginning of the process, and conversion costs are applied uniformly throughout the production process. Required: You are to maintain records and produce measures of inventories to reflect the July events of this company. The June 30 balances: Raw Materials Inventory, $22,000; Work in Process Inventory, $9,690 ($2,810 of direct materials and $6,880 of conversion); Finished Goods Inventory, $140,000; Sales, $0; Cost of Goods Sold, $0; Factory Payroll Payable, $0; and Factory Overhead, $0. 1. Prepare journal entries to record the following July transactions and events. Purchased raw materials for $130,000 cash (the company uses a perpetual inventory system). Used raw materials as follows: direct materials, $52,540; and indirect materials, $11,500. Recorded factory payroll payable costs as follows: direct labor, $206,000; and indirect labor, $26,500. Paid factory payroll cost of $232,500 with cash (ignore taxes). Incurred additional factory overhead costs of $83,000 paid in cash. Allocated factory overhead to production at 50% of direct labor costs. 2. Information about the July inventories follows. Use this information with that from part 1 to prepare a process cost summary, assuming the weighted-average method is used. (Round "Cost per EUP" to 2 decimal places.) Units Beginning inventory 6,500 units Started 14,000 units Ending inventory 8,000 units Beginning inventory Materials—Percent complete 100 % Conversion—Percent complete 80 % Ending inventory Materials—Percent complete 100 % Conversion—Percent complete 30 % 3.
Using the results from part 2 and the available information, make computations and prepare journal entries to record the following: Total costs transferred to finished goods for July. Sale of finished goods costing $273,200 for $640,000 in cash.Using the results from part 2 and the available information, make computations and prepare journal entries to record the following: Total costs transferred to finished goods for July. Sale of finished goods costing $273,200 for $640,000 in cash. Using the results from part 2 and the available information, make computations and prepare journal entries to record the following: Total costs transferred to finished goods for July. Sale of finished goods costing $273,200 for $640,000 in cash.
Answers
Answer:
Major League Bat Company
1. Journal Entries:
a. Debit Raw Materials Inventory $130,000
Credit Cash Account $130,000
To record the purchase of raw materials.
b. Debit Work in Process $52,540
Debit Manufacturing Overhead $11,500
Credit Raw Materials $64,040
To record materials used.
c. Debit Factory Wages $232,500
Credit Cash Account $232,500
To record factory payroll paid in cash.
d. Debit Work in Process $206,000
Debit Manufacturing Overhead $26,500
Credit Factory Wages $232,500
To record factory payroll costs.
e. Debit Manufacturing Overhead $83,000
Credit Cash Account $83,000
To record additional factory overhead costs.
f. Debit Work In Process $103,000
Credit Manufacturing Overhead $103,000
To allocate factory overhead to production at 50% of direct labor costs.
2. Computation of Equivalent Units of Production:
Materials Conversion Total
Beginning inventory 6,500 units 6,500 5,200
Started 14,000 units 14,000 14,000
Ending inventory 8,000 units 8,000 2,400
Total equivalent unit 22,000 16,400
3. Costs of Production:
Beginning Inventory $2,810 $6,880
Raw materials 52,540 309,000
Total costs $55,350 $315,880
Total equivalent unit 22,000 16,400
Cost per equivalent unit $2.52 $19.26
Total costs:
Started 14,000 $35,280 14,000 $269,640 $304,920
Ending inventory 8,000 20,160 2,400 46,224 $66,384
Total 22,000 $55,440 16,400 $315,864 $371,304
4. Journal Entries:
Debit Finished Goods Inventory $304,920
Credit Work In Process $ 304,920
To record the transfer of goods.
Debit Cost of Goods Sold $273,200
Credit Finished Goods Inventory $273,200
To record the cost of goods sold.
Debit Cash Account $640,000
Credit Sales Revenue $640,000
To record the sale of goods for cash.
5. Ledger accounts:
Raw Materials Inventory
Accounts Titles Debit Credit
Balance $22,000
Cash Account 130,000
Work in Process $52,540
Manufacturing Overhead 11,500
Work In Process
Accounts Titles Debit Credit
Balance $9,690
Raw materials 52,540
Factory Wages 206,000
Manufacturing
Overhead 103,000
Finished Goods Inventory $ 304,920
Balance 66,384
Manufacturing Overhead
Accounts Titles Debit Credit
Raw materials $11,500
Factory wages 26,500
Other overheads 83,000
Work in Process applied $103,000
Underapplied overhead 18,000
6. Income Statement:
For July
Sales Revenue $640,000
Cost of goods sold 273,200
Underapplied overhead 18,000 $291,200
Gross profit $348,800
Explanation:
a) Data and Calculations:
June 30 Balances:
Raw Materials Inventory, $22,000;
Work in Process Inventory, $9,690 ($2,810 of direct materials and $6,880 of conversion);
Finished Goods Inventory, $140,000;
Sales, $0;
Cost of Goods Sold, $0;
Factory Payroll Payable, $0; and
Factory Overhead, $0. 1.
Joni Metlock Inc. has the following amounts reported in its general ledger at the end of the current year.
Organization costs $22,300
Trademarks 12,700
Discount on bonds payable 35,300
Deposits with advertising
agency for ads to promote
goodwill of company 10,300
Excess of cost over fair
value of net identifiable
assets of acquired subsidiary 75,300
Cost of equipment acquired for
research and development projects;
the equipment has an alternative future use 85,300
Costs of developing a secret formula for a
product that is expected to be marketed for
at least 20 years 79,600
On the basis of this information, compute the total amount to be reported by Metlock for intangible assets on its balance sheet at year-end.
Answers
Answer:
Joni Metlock Inc.
Computation of the total amount of Intangible Assets on the Balance Sheet at year-end:
Organization costs $22,300
Trademarks 12,700
Goodwill acquired 75,300
Secret formula Development cost 79,600
Total amount of intangibles $189,900
Explanation:
Data:
Organization costs $22,300
Trademarks 12,700
Discount on bonds payable 35,300
Deposits with advertising
agency for ads to promote
goodwill of company 10,300
Excess of cost over fair
value of net identifiable
assets of acquired subsidiary 75,300
Cost of equipment acquired for
research and development projects;
the equipment has an alternative future use 85,300
Costs of developing a secret formula for a
product that is expected to be marketed for
at least 20 years 79,600
b) Metlock's intangible assets are the non-physical assets like Goodwill, brand recognition and intellectual property, such as patents, trademarks, and copyrights.
Determine the selling price PV, per $1,000 maturity value, of the bond. HINT [See Example 8.] (Assume twice-yearly interest payments. Do not round those payments to the nearest cent. Round your selling price PV to the nearest cent.) 20-year, 4.225% bond, with a yield of 4.23%
Answers
Answer:
$999.60
Explanation:
For computing the selling price i.e. present value we have to use the present value function i.e. shown below:
Given that
NPER = 20 × 2 = 40
PMT = $1,000 × 4.225% ÷ 2 = $21.125
RATE = 4.23% ÷ 2 = 2.115%
FV = $1,000
the formula is shown below:
PV =-PV(RATE;NPER;PMTFV;TYPE)
After applying the above formula, the present value is $999.60
Mcmurtry Corporation sells a product for $250 per unit. The product's current sales are 13,600 units and its break-even sales are 10,608 units. The margin of safety as a percentage of sales is closest to:
Answers
Answer:
22%
Explanation:
Margin of Safety is the amount by which sales can fall before making a loss.
Margin of Safety = Expected Sales - Break-even Sales ÷ Expected Sales
= (13,600 - 10,608) ÷ 13,600
= 0.22 or 22%
A check register shows a balance of $152.34. The bank statement shows that a check for $75.00 deposited by the account owner was drawn against insufficient funds and was returned. A charge for $2.00 was also deducted by the bank because of the return. Compute the adjusted cash balance of the check register.
Answers
Answer:
$150.34
Explanation:
The $75 check has been drawn against insufficient funds and has been returned so this check won't be included in the adjusted cash balance of the check register.
A charge for $2.0 will be deducted from the balance shown by the cash register above to calculate the adjusted cash balance of the check register.
Adjusted cash balance of the check register = $152.34 - $2
Adjusted cash balance of the check register = $150.34
Suppose you receive at the end of each year for the next three years. a. If the interest rate is , what is the present value of these cash flows? b. What is the future value in three years of the present value you computed in (a)? c. Suppose you deposit the cash flows in a bank account that pays interest per year. What is the balance in the account at the end of each of the next three years (after your deposit is made)? How does the final bank balance compare with your answer in (b)?
Answers
Answer:
the question is missing the numbers, so I looked for a similar question:
Suppose you receive $100 at the end of each year for the next three years. a. If the interest rate is 8%, what is the present value of these cash flows? (Answer: $257) b. What is the future value in three years of the present value you computed in (a)? (Answer: $324.61) c. Suppose you deposit the cash flows in a bank account that pays 8% interest per year. What is the balance in the account at the end of each of the next three years (after your deposit is made)? How does the final bank balance compare with your answer in (b)?
a) PV = $100/1.08 + $100/1.08² + $100/1.08³ = $257.71
b) FV = $257.71 x (1 + 8%)³ = $324.64
c) FV = ($100 x 1.08²) + ($100 x 1.08) + $100 = $324.64
it is exactly the same as the answer for (b)
Your classmates from the University of Chicago are planning to go to Miami for spring break, and you are undecided about whether you should go with them. The round-trip airfare is $600, but you have a frequent-flyer coupon worth $500 that you could use to pay part of the airfare. All other costs for the vacation are exactly $900. The most you would be willing to pay for the trip is $1,400. Your only alternative use for your frequent-flyer coupon is for your trip to Atlanta two weeks after the break to attend your sister's graduation, which your parents are forcing you to attend. The Chicago-Atlanta round-trip airfare is $450. If the Chicago-Atlanta round-trip air fare were $350, should you use the coupon to go to Miami?
Answers
Answer:
You should use the discount coupon to pay for the Chicago-Miami trip. Not considering the personal motivations for the trip, the coupon is worth $500. The cost of flying is $600, so you will only pay $100 yourself. You will be spending $900 + $1000 = $1,000 in total.
The opportunity cost of using the coupon is $350 (the cost of the round trip to Atlanta). Even if you add the $350 to the $1,000 expense, the total is $1,350, less than your $1,400 maximum budget.
On September 1, Boylan Office Supply had an inventory of 30 calculators at a cost of $18 each. The company uses a perpetual inventory system. During September, the following transactions occurred.
Sept. 6 Purchased with cash 80 calculators at $20 each from Guthrie Co.
Sept. 9 Paid freight of $80 on calculators purchased from Guthrie Co.
Sept. 10 Returned 3 calculators to Guthrie Co. for $63 cash (including freight) because they did not meet specifications.
Sept. 12 Sold 26 calculators costing $21 (including freight) for $31 each on account to Lee Book Store, terms n/30.
Sept. 14 Granted credit of $31 to Lee Book Store for the return of one calculator that was not ordered.
Sept. 20 Sold 30 calculators costing $21 for $32 each on account to Orr's Card Shop, terms n/30.
Journalize the September transactions.
Answers
Answer:
Sept 6. DR Inventory (80 * 20) 1,600
CR Accounts Payable $1,600
Sept 9. DR Inventory 80
CR Cash 80
Sept 10. DR Accounts Payable 63
CR Inventory 63
Sept 12. DR Accounts Receivable (26 * 31) 806
CR Sales Revenue 806
DR Cost of Goods Sold (21 * 26) 546
CR Inventory 546
Sept 14. DR Sales Returns and Allowances 31
CR Accounts Receivable 31
DR Inventory 21
CR Cost of Goods Sold 21
Sept. 20 DR Accounts Receivable (30 * 32) 960
CR Sales Revenue 960
DR Cost of Goods Sold (30 * 21) 630
CR Inventory 630
In its first year of business, Borden Corporation had sales of $2,020,000 and cost of goods sold of $1,210,000. Borden expects returns in the following year to equal 6% of sales. The adjusting entry or entries to record the expected sales returns is (are):
Answers
Answer: Please see answers in explanation column
Explanation:
Accounts title and explanation Debit Credit
Sales returns and allowances $121,200
Sales refund payable $121,200
Calculation
Expected Sales returns and allowances = sales x expected percentage
= 2,020,000 x 6%= $121,200
Accounts title and explanation Debit Credit
Inventory returns estimated $72,600
Cost of goods sold $72,600
Calculation
expected Cost of goods sold = Cost of goods soldx expected percentage
= 1,210,000 x6%=$72,600
What is a sum of money that is borrowed and is expected to be paid back with interest?
Answers
Explanation: when someone borrows money from someone else or even from the bank it is done on the condition that the money would eventually be paid back in a certain period of time with an interest payment
a. What is the total cash outflow for buying and for leasing a motor vehicle with a cash price of $33,000
Answers
Answer:
For buying = $32,640
For leasing = $31,800
Explanation:
The computation is shown below:
For buying
Total cash outflow = Down payment + Loan repayment - Value of vehicle at the end of loan
= $5,600 + (780 × 48) - $10,400
= $32,640
For Leasing
Total cash outflow = Down payment + Loan repayment - Value of vehicle at the end of loan
= $2,000 + (600 × 48) - $1,000
= $31,800
Blight Financial has an investment in bonds issued by Searing Industries that are classified as trading securities. At December 31, Year 2, the Investment in Searing bonds account had a debit balance of $500,000, and the bonds were purchased at par so the $500,000 equals amortized cost. The Fair Value Adjustment account had a debit balance of $20,000. On December 31, Year 3, the amortized cost of those bonds has not changed, but the fair value of those bonds was $515,000. Which of the following will be included in the related journal entry dated December 31, Year 3?
a. Debit to Fair value adjustment for $5,000.
b. Credit to Fair value adjustment for $5,000.
c. Debit to Fair value adjustment for $25,000.
d. Credit to Fair value adjustment for $25,000.
Answers
Answer:
b. Credit to Fair value adjustment for $5,000.
Explanation:
Particulars Amount
Beginning balance of fair value adjustment $20,000
Less: Unrealized gain on Dec 31 $15,000
(515,000 - 500,000)
Credit to fair value adjustment $5,000
The lowest amount a manufacturer can pay factory workers is an example of
an incentive.
a price floor.
a price ceiling.
an elastic service.
Answers
Answer:
The answer to this question is given below in the explanation section.
Explanation:
The correct answer to this question is the price floor.
The Price floor is the lowest amount that is imposed by the government or group-imposed lowest price limit for a product or service. The government uses the price floor to keep prices at a certain level from going to low. So price floors for workers set by the government that the employer should not pay less than the set amount.
while other options are not correct because::
The price ceiling is the high amount set by the government or the by other groups for a product or service.
An incentive is an amount or something that can be given to employees or someone for motivation or encouraging them to do something.
An elastic service is given by amazon to develop and run the application with different tools etc.
Answer:price floor
Explanation:
A common step in the testing for accounts payable is to test subsequent disbursements for improper/proper inclusion/exclusion in year-end accounts payable CONCEPT REVIEW A common way to test accounts payable is to examine the check register after period end and make selections for testing. Items are selected and then examined for detail. A determination is then made to conclude whether the amount should have been a liability as of year-end and, if so, if it was recorded as such
1. When searching for unrecorded liabilities, the auditors consider transactions recorded__________year end.
2. Accounts payable __________can be mailed to vendors from whom substantial purchases have been made.
3. To gain overall assurance as to the reasonableness of accounts payable, the auditor may consider _________.
4. When auditors find unrecorded liabilities, before adjusting they must consider __________.
5 Auditiors need to consider_______ terms for determining ownership and whether a liability should be recorded.
Answers
Answer:
1. When searching for unrecorded liabilities, the auditors consider transactions recorded after year end.
Auditors consider transactions recorded after year end to determine if it was supposed to be recorded in the current period.
2. Accounts payable confirmation can be mailed to vendors from whom substantial purchases have been made.
As a way to keep a document trail, creditors from whom substantial goods were bought from can be mailed a confirmation.
3. To gain overall assurance as to the reasonableness of accounts payable, the auditor may consider ratios.
Ratios such as the Payables turnover can be used to evaluate the reasonableness of Accounts payable.
4. When auditors find unrecorded liabilities, before adjusting they must consider materiality.
They must consider if the adjustment is material or significant enough to record.
5 Auditiors need to consider shipping terms terms for determining ownership and whether a liability should be recorded.
Shipping terms need to be considered because they can tell who owns goods in transit and therefore if a liability is needed for them. Shipping terms such as FOB Shipping point mean that the business incurs the liability as soon as the seller ships the goods.
The following costs and inventory data were taken from the accounts of Simon Company for 2010:
January 1, 2011 December 31, 2011
Inventories:
Raw materials $ 8,000 $ 7,000
Work in process 15,000 13,000
Finished goods 16,000 12,000
Costs incurred at the end of December 31, 2011:-
Raw materials purchases $83,000
Direct labor 42,000
Factory rent 8,000
Factory utilities 10,000
Indirect materials 4,000
Indirect labor 6,000
Operating expenses 17,000
Instructions
a. Prepare a schedule showing the amount of direct materials used in production during the year.
b. Compute the amount of manufacturing overhead incurred during the year.
c. Prepare a schedule of Cost of Goods Manufactured for Simon Company for the year ended December 31, 2011 in good form.
d. Prepare the Cost of Goods Sold section of the Income Statement for Simon Company for the year ended December 31, 2011 in good form.
Answers
Answer:
Part a
Direct Materials Schedule
Beginning Materials $ 8,000
Add Purchases $83,000
Less Ending Materials ($ 7,000)
Less Indirect materials ($4,000)
Direct Materials Used in Production $80,000
Part b
Overheads Incurred during the year
$
Factory rent 8,000
Factory utilities 10,000
Indirect materials 4,000
Indirect labor 6,000
Total Overheads $28,000
Part c
Cost of Goods Manufactured Schedule
Direct Materials $80,000
Direct labor $42,000
Overheads $28,000
Add Opening Work In Process $15,000
Less Closing Work In Process ($13,000)
Cost of Goods Manufactured $152,000
Part d
Cost of Goods Sold
Beginning Finished goods Inventory $16,000
Add Cost of Goods Manufactured $152,000
Less Ending Finished Goods Inventory ($12,000)
Cost of Goods Sold $156,000
Explanation:
The following steps must be done to reach the cost of goods sold :
Use the Manufacturing Cost Schedule to calculate the Cost of Goods ManufacturedUse the Finished Goods Inventory Account to calculate the Cost of Goods Sold.See the calculations and schedules prepared above.
Maria Boyd has been hired by Barnum Hotels to manage staffing for the regional hotel chain. Barnum intends to open two new hotels within the next three years and will have many job positions to fill. Historically, employee turnover is high at Barnum as employees remain with the company for one or two years before quitting. Maria realizes that Barnum needs to make significant changes in its personnel strategy in order to meet the company's goals for the future and improve employee retention rates. All of the following questions are relevant to Mari's decision to fill top positions at the new hotels with internal candidates EXCEPT::_______
a. What are the key managerial positions that are available at the new hotels?
b. What percentage of employers in the service industry use succession planning?
c. What skills, education, and training have been provided to potential candidates?
d. What is the designated procedure for assessing and selecting potential candidates?
Answers
Answer:
b. What percentage of employers in the service industry use succession planning?
Explanation:
The answer choice number B would not be relevant for Maria Boyd strategy. Succession planning is related to the passing of ownership of the business. and Maria is not in charge of devising ownership schemes, but in charge of implementing a corporate policy in order to improve employee retetion, and reduce in this way, employee turnover.
Answer:
b. What percentage of employers in the service industry use succession planning
Explanation:
GOT IT RIGHT ON TEST 2020
Managers who establish effective goals can enhance the performance of their employees and of their company. The manager in the scenario presented next realizes that goals are essential to improving performance. Goal setting helps motivate employees by clarifying their roles at work and establishing performance objectives. Effective goal setting is more than just asking employees to do their best or to try harder. It requires attention to key goal characteristics that increase intensity and persistence, and ultimately improve performance. The goal of this exercise is to demonstrate your understanding of goal setting by matching each employee’s goal with his or her goal characteristic. Match each employee’s goal with his or her goal characteristic.
1. Achievable Goals
2. Measurable Goals
3. Relevant Goals
4. Time-Frame Goals
5. Specific Goals
6. Reviewed Goals
Match each of the options above to the items below.
Carlos’ goal is to reduce average loan processing by fifteen percent within the next 6 months.
Michelle is a salesperson. Her goal is to increase the number of sales calls made to potential customers.
Sam has been reviewing customer accounts at a rate of two per day. His goal is to double that rate. That is possible, but he’ll have to work hard and be creative to reach this goal.
Chen has been given a project, and his manager clearly communicated the quantity and quality expectations to him.
Elizabeth has just been given a project which needs to be completed within 6 weeks.
Kelly is most excited about adopting goals because it means she’ll finally have a clear measure of how well she is doing.
Answers
Answer: See explanation
Explanation:
a. Carlos’ goal is to reduce average loan processing by fifteen percent within the next 6 months. - Reviewed goal.
Reviewed goals has to do with the goals set by an individual when the individual takes into consideration the previously set goals and he or she reviews them. This is used by Carlos as he takes into consideration his previous average loan processing.
b. Michelle is a salesperson. Her goal is to increase the number of sales calls made to potential customers. - Relevant goal.
Relevant goal simply means that the goal must be realistic and also reasonable. In this scenario, Michelle wants to increase the number of calls regarding sales made to customers. This is reasonable.
c. Sam has been reviewing customer accounts at a rate of two per day. His goal is to double that rate. That is possible, but he’ll have to work hard and be creative to reach this goal. - Achievable goals.
Achievable goal simply means a goal that it's possible for an individual to achieve and it's attainable.
d. Chen has been given a project, and his manager clearly communicated the quantity and quality expectations to him. - Specific goals
A specific goal is a goal that is well defined and also clear. This can be seen in the above example.
e. Elizabeth has just been given a project which needs to be completed within 6 weeks. - Time frame goal.
Time frame goal is a goal that has a deadline and is expected to be finished within a set date. In this scenario, Elizabeth has six weeks to complete the said project.
f. Kelly is most excited about adopting goals because it means she’ll finally have a clear measure of how well she is doing. - Measurable goal.
A measurable goal is a goal that one tracks his or her progress as one continues the project. Kelly has a clear measure of how well she's doing. This is a measurable goal.
In early 2016, the same Germany machinery company has interest from four prospective clients from emerging markets: Indonesia, Brazil, Russia, and South Africa. They all want to buy ten machines, but the factory can only produce ten in time. Therefore, the company has to choose only one client. Given the volatility of the domestic currencies of the four prospective clients, the CFO would like to choose the client which is least likely to cancel the order due to currency volatility. The invoice comes due on June 30, 2016. According to volatility alone, which prospective client would be most likely to cancel the order?
Answers
Answer:
Brazil
Explanation:
According to the picture below, Brazilian real is the currency that has the lowers currency volatility, its spot is 4.0685, and its forward is 4.1820. These values are way lower than the values of the other three currencies, and for this reason, the CFO should choose the Brazilian client, clearly.
Indonesia is the country that is most likely to cancel this order. This is due to its high volatility.
Following the volatility chart that is attached to this question we can clearly spot that Indonesia has the most likelihood to cancel the order.
The volatility of the currency of the country Indonesia is shown to be high and this high volatility is very much going to have an impact on trade.
When there is a weakness in the currency of a nation, the cost of import would go up.
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On September 1, 2018, Evansville Lumber Company issued $80 million in 20-year, 10 percent bonds payable. Interest is payable semiannually on March 1 and September 1. Bond discounts and premiums are amortized at each interest payment date and at year-end. g The company’s fiscal year ends at December 31.
Required:
A-1. Prepare the necessary adjusting entries at December 31, 2018, and the journal entry to record the payment of bond interest on March 1, 2019, under the assumption that the bonds were issued at 98.
A-2. Prepare the necessary adjusting entries at December 31, 2018, and the journal entry to record the payment of bond interest on March 1, 2019, under the assumption that the bonds were issued at 101.
B. Compute the net bond liability at December 31, 2019, under assumptions A-1 and A-2 above.
C. Under which of these assumptions, 1 or 2, would the investor's effective rate of interest be higher? Explain.
Answers
Answer:
A-1
interest payable 2,693,334 debit
Interest payable 2,666,667 credit
discount on bond payable 26,667 credit
--to record Dec 31st adjusting entry--
interest expense 1,346,666 debit
interest payable 2,666,667 debit
discount on bond payable 13,333 credit
cash 4,000,000 credit
--to record March 1st Payment
A-2
interest expense 2,653,334 debit
premium on bond payable 13,333 debit
Interest payable 2,666,667 credit
--to record Dec 31st adjusting entry--
interest expense 1.326.666 debit
interest payable 2,666,667 debit
premium on bond payable 6,667 debit
cash 4,000,000 credit
--to record March 1st Payment
B)
A-1
78,400,000 + 26,667 = 78,426,667
A-2
80,800,000 - 13,333 = 80,786,667
C)
the effective interest rate is higher under A-1 as the company is paying the same nominal amount of $4,000,000 every six months but, received less cash for the bonds in A-1 case making the effective rate higher .
Explanation:
A-1 issued at 98 points
cash received:
80,000,000 x 98/100 = 78,400,000
discount on bonds: 80,000,000 - 78,400,000 = 1,600,000
On Dec 31st we solve for accrued discoutn and interest:
amortization
1,600,000 / 40 payment = 40,000 per payment
proportional amortization: 40,000 x 4/6 (month accrued) = 26,667
interest paid
principal x rate x time
80,000,000 x 10% x 4/12 = 2,666,667
payment:
8,000,000 x 10% x 6/12 = 4,000,000
proportional amortization: 40,000 x 2/6 (month accrued) = 13,333
accrued interest 8,000,000 x 10% x 2/12 = 1,333,333
A-2 we issue a 101 point
cash received:
80,000,000 x 101/100 = 80,800,000
premuim on bonds: 800,000
On Dec 31st we solve for accrued discount and interest:
amortization
800,000 / 40 payment = 20,000 per payment
proportional amortization: 20,000 x 4/6 (month accrued) = 13,333
interest paid
principal x rate x time
80,000,000 x 10% x 4/12 = 2,666,667
payment:
8,000,000 x 10% x 6/12 = 4,000,000
proportional amortization: 40,000 x 2/6 (month accrued) = 6,667
accrued interest 8,000,000 x 10% x 2/12 = 1,333,333
Fields Company has two manufacturing departments, forming and painting. The company uses the weighted-average method of process costing. At the beginning of the month, the forming department has 36,000 units in inventory, 70% complete as to materials and 30% complete as to conversion costs. The beginning inventory cost of $82,100 consisted of $58,000 of direct materials costs and $24,100 of conversion costs.
During the month, the forming department started 520,000 units. At the end of the month, the forming department had 40,000 units in ending inventory, 85% complete as to materials and 35% complete as to conversion. Units completed in the forming department are transferred to the painting department. Cost information for the forming department is as follows:
Beginning work in process inventory $82,100
Direct materials added during the month 1,942,930
Conversion added during the month 1,359,730
1A. Calculate the equivalent units of production for the forming department.
1B. Calculate the costs per equivalent unit of production for the forming department.
1C. Using the weighted-average method, assign costs to the forming department’s output—specifically, its units transferred to painting and its ending work in process inventory.
Answers
Answer:
Please see attached detailed solution
Explanation:
1a. Direct material 550,000
Conversion 530,000
1b. Direct materials $3.64 per EUP
Conversion $2.61 per EUP
1c. Costs assigned to the forming department's output
• Total cost of ending work in process $160,300
• Total costs assigned $3,384,760
Please see attached detailed solution to the above questions and answers.
You have a tax basis of ​$ and a useful life of five years and no salvage value. Provide a depreciation schedule ​(dk for k1​5) for ​% declining balance with switchover to straight line. Specify the year to switchover. Determine the depreciation amounts using the ​% declining balance and​ straight-line methods and BV amounts for each year
Answers
Answer:
the numbers are missing, so I will use another question as an example:
the asset's cost is $100,000useful life is 5 yearsno salvage value150% declining balancestraight line depreciation = $100,000 / 5 = $20,000
150% declining balance depreciation year 1 = 1.5 x $100,000 x 1/5 = $30,000, since it is higher than straight line we will use declining balance
book value at end of year 1 = $100,000 - $30,000 = $70,000
straight line deprecation = $70,000 / 4 = $17,500
150% declining balance depreciation year 2 = 1.5 x $70,000 x 1/5 = $28,000, since it is higher than straight line we will use declining balance
book value at end of year 2 = $70,000 - $28,000 = $42,000
straight line depreciation = $42,000 / 3 = $14,000, since it is higher than declining balance we will use straight line ⇒ switchover year
150% declining balance depreciation year 3 = 1.5 x $42,000 x 1/5 = $12,600
book value at end of year 3 = $42,000 - $14,000 = $28,000
depreciation year 4 = $14,000 (straight line)
book value at end of year 4 = $28,000 - $14,000 = $14,000
depreciation year 5 = $14,000 (straight line)
book value at end of year 5 = $14,000 - $14,000 = $0
Larkspur Incorporated factored $124,300 of accounts receivable with Cullumber Factors Inc. on a without-recourse basis. Cullumber assesses a 2% finance charge of the amount of accounts receivable and retains an amount equal to 5% of accounts receivable for possible adjustments.
Required:
Prepare the journal entry for Larkspur Incorporated and Cullumber Factors to record the factoring of the accounts receivable to Cullumber.
Answers
DR Cash 115,599
Due from Factor (Cullumber) 6,215
Loss on Sale of Receivables 2,486
CR Accounts Receivable 124,300
Working
Due from Factor = 5% * 124,300
= $6,215
Loss on sale of receivables = 2% * 124,300
= $2,486
Cash = 124,300 - 6,215 - 2,486
= $115,599
Cullumber Factors Inc.DR Accounts Receivable 124,300
CR Due to Larkspur 6,215
Financing Revenue 2,486
Cash 115,599
The following table reports real income per person for several different economies in the years 1960 and 2010. It also gives each economy's average annual growth rate during this period. For example, real income per person in Niger was $945 in 1960, and it actually declined to $570 by 2010. Niger's average annual growth rate during this period was -1.01%, and it was the poorest economy in the table in the year 2010. The real income-per-person figures are denominated in U.S. dollars with a base year of 2005. The following exercises will help you to understand the different growth experiences of these economies.
Economy Real Income per Person in 1960 Real Income per Person in 2010 Annual Growth Rate
(Dollars) (Dollars) (Percent)
Canada 12,946 35,810 2.06
United Kingdom 11,884 32,034 2.00
Korea 1,610 28,702 5.93
Hong Kong 4,518 44,070 4.66
Guatemala 1,985 3,859 1.34
Indicate which economy satisfies each of the following statements.
Statement Canada Guatemala Hong Kong Korea Niger United Kingdom
This economy had the highest level of real income per person in the year 2010.
This economy experienced the fastest rate of growth in real income per person from 1960 to 2010.
Consider the following list of four economies. Which economy began with a level of real income per person in 1960 that was well below that of the United Kingdom and grew fast enough to catch up with and surpass the United Kingdom's real income per person by 2010?
a. Canada
b. Guatemala
c. Hong Kong
d. Korea
Answers
The economy began with a level of real income per person in 1960 that was well below that of the United Kingdom and grew fast enough to catch up with and surpass the United Kingdom's real income per person by 2010 is Korea. Thus the correct option is D.
What is the Economy?The economy of any country is determined by the ratio of production and consumption that takes place within a year and evaluates the flow of funds in the market by analyzing the purchasing parity of an individual.
In the given report one can observe that the real income per person in the year 1960 in the United Kingdom was 11,884 with the Real Income per Person in 2010 being 32,034.
Based on the information from the table, it is concluded that Korea is the economy that grew fast enough to catch up with and surpass the United Kingdom's real income per person by 2010.
As of 1960, Korea has Real Income per Person was 1,610 which grew to 28,702 in 2010 showing quick development.
Therefore, option D is appropriate.
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Hart Attorney at Law experienced the follwoing transactions in 2016, the first year of operations:
1. Accepted $36,000 on 4/1/16, as a retainer for services to be performed evenly over the next 12 months.
2. Performed legal services for cash of $54,000.
3. Purchased $2,800 of office suppies on account.
4. Paid $2,400 of the amount due on accounts payable.
5. Paid a cahs dividend to the stockholders of $5,000.
6. Paid cash for operationg expenses of $31,000.
7. Determined that at the end of the accounting period $200 of office supplies remained on hand.
8. On 12/31/16, recognized the revenue that had been earned for services performed in accordance with Transaction 1
Required:
Show the effects of the events on the fianncial statements using a horizontal statement model.
Answers
Answer:
I used an excel spreadsheet since there is not enough room here.
Explanation: