Answer:
b
Explanation:
The formula used to calculate the fixed monthly payment (P) required to fully amortize a loan of L dollars over a term of n months at a monthly interest rate of r is P = L [r(1 +r)n]/[(1 + r)n- 1]
Blossom Chemicals Company acquires a delivery truck at a cost of $31,200 on January 1, 2022. The truck is expected to have a salvage value of $4,200 at the end of its 4-year useful life. Compute annual depreciation for the first and second years using the straight-line method.
Answer:
$6,750
Explanation:
The computation of the annual depreciation using the straight line method for the first and second year is shown below:
= (Original cost - residual value) ÷ (useful life)
= ($31,200 - $4,200) ÷ (4 years)
= ($27,000) ÷ (4 years)
= $6,750
In this method, the depreciation is the same for all the remaining useful life
So in the given case, the first year and the second year depreciation is $6,750 respectively and the same is to be charged every year
Total revenue equals the price multiplied by the quantity. The relative change price and quantity is given by the concept of ________________.
Answer: elasticity
Explanation:
Elasticity has to do with how the changes in price affects the quantity I goods and services that are demanded by the consumers in the market.
Sometimes, a change in price may lead to either a larger change in the quantity demand or it ma lead to a minimal effect on the quantity of good demanded. This is the concept of elastic and inelastic demand.
Berning Company purchased a tractor at a cost of $180,000. The tractor has an estimated salvage value of $20,000 and an estimated life of 8 years, or 10,000 hours of operation. The tractor was purchased on January 1, 2016 and was used 2,400 hours in 2016 and 2,100 hours in 2017. On January 1, 2018, the company decided to sell the tractor for $70,000. Berning uses the units-of-production method to account for the depreciation on the tractor.
Based on this information, the entry to record the sale of the tractor will show:
Select one:
A. A loss of $38,000
B. A gain of $70,000
C. A loss of $70,000
D. No gain or loss on the sale
Answer:
A. A loss of $38,000
Explanation:
Total depreciation on the tractor = (180,000 - 20,000) * (2,400 + 2,100) / 10,000 = $72,000
Net book value on January 1, 2018 = 180,000 - 72,000 = $108,000
Loss on sale = 70,000 - 108,000 = $38,000
Which of the following is a disadvantage of using variable costing? Select one: A. Two sets of accounting records must be maintained. B. Inventory values tend to be overstated. C. CVP relationships are more difficult to determine than under absorption costing. D. Per-customer or per-product contribution margin is obscured.
Answer:
Two sets of accounting records must be maintained.
Explanation:
Variable costing is the costing in which only variable cost is considered i.e direct material cost, direct labor cost, variable manufacturing overhead cost therefore no fixed cost could be considered
Under this the disadvantage is that it recognized two accounting records sets which are to be maintained
Hence, the first option is correct
Employee benefits constitute:_________.a) about 43 percent of the total payroll costs to employers.b) a direct form of compensation intended to improve the quality of the work lives and the personal lives of employees.c) a cost for which employers expect nothing in return.
Answer:
Option A, about 43 percent of the total payroll costs to employers, is the right answer.
Explanation:
The term employee benefits used to refer to the various types of compensation that are given to the employee in addition to their salaries. Such employee benefits are intended to increase the economic security of the employee. The four major types of employee benefits include the medical, life disability insurance and retirement plans. Moreover, it constitutes about 43% of the total payroll costs to employers.
Suppose a stock had an initial price of $70 per share, paid a dividend of $2.30 per share during the year, and had an ending share price of $82.
Requried:
a. Compute the percentage total return.
b. What was the dividend yield and the capital gains yield?
Answer:
Stock, Dividend, and Yield:
a) Computation of the percentage total return:
Total return = Dividend + Capital appreciation = $14.30 ($2.30 + $12)
Percentage of total return = $14.30/$70 x 100 = 20.43%
b1) Dividend yield = Dividend per share / price per share = $2.30/$70 = 0.032857 or 3.29%
b2) Capital gains yield = (Current price - initial investment)/ initial investment = ($82 - $70)/$70 = 0.1714 or 17%
Explanation:
a) The Dividend yield is a financial ratio (dividend/price) that shows how much a company pays out in dividends each year relative to its stock price.
b) Capital gains yield is the percentage price appreciation on an investment. It is calculated as the increase in the price of an investment, divided by its original acquisition cost. For instance, an equity security that is purchased for $700 and later sold for $825, the capital gains yield is 17.86%.
c) The total return from an investment is the sum of the dividend or interest received plus capital gains.
Mountain Top Markets has total assets of $48,700, net working capital of $1,100, and retained earnings of $21,200. The firm has 12,500 shares of stock outstanding with a par value of $1 per share and a market value of $7.10 per share. The stock was originally issued to the firm's founders at par value. What is the market-to-book ratio
Answer: 2.63
Explanation:
The Market to Book ratio is also referred to as the price to book ratio. It is a financial evaluation of the market value of a company relative to its book value. It should be noted that the market value is current stock price of every outstanding shares that the company has while the book value is the amount that the company will have left after its assets have been liquidated and all liabilities have been repaid.
The market-to-book ratio will be the market price per share divided by the book value. It should be noted that the book value per share is the net worth of the business divided by the number of outstanding shares. The book value will be:
= [(12500 ×1) + $21200]/12500
= ($12500 + $21200)/$12500
= $33700/12500
=$2.70
The market-to-book ratio will now be:
= $7.10/$2.70
=2.63
1Discuss how the examples in the opening case show how the choices facing a firm making a longrun decision on plant location are much greater than those for a firm with a plant already in operation. Why is the long run considered to be a planning horizon
Answer with its Explanation:
The decision on plant location of immense importance for the organization as it would play important role in cost controls and increased sales due to greater access of customer to company's products. There are also other aspects that matters a lot and few of these are as under:
Labor Cost. If the labor cost is far much below in the other countries that it will help to decrease most of the product cost to compete in the international market.Free Trade Agreements. The country in which the company wants to operate must have free trade agreements with the country where there are potential customers who will like to buy the product. The country with free trade agreements doesn't imposes custom duties on import of a particular product and similarly the other country also doesn't imposes custom duties on the other country's exports.The country's infrastructure, political stability, Ease of business in the country, Justice, Potential customers, potential competitors in those areas, etc, are all key factors that must be consideredThe plant location also plays important role in reducing the distribution expenses.The level of skills the country possesses for the effective running of the operations of the company, etc.The planning horizon is the future time period for which the company is looking into to make sure that the business grows and future benefits will flow towards the organization.
Sunland Company had a balance in the Accounts Receivable account of $801000 at the beginning of the year and a balance of $901000 at the end of the year. Net credit sales during the year amounted to $8049000. The average collection period of the receivables in terms of days was:_______
a) 4 days.
b) 36.5 days.
c) 37 days.
d) 38.4 days.
Answer:
d) 38.4 days
Explanation:
Accounts receivable = 801,000 + 901,000 = 1,702,000
Average Account receivables = 1,702,000 / 2 = 851,000
Net credit sales = $8,049,000 / 851,000 = 9.5
The average collection period of the receivables in terms of days = 365 days / 9.5 =38.4 days
Accounts receivable days = 38.4 days
Mr. Hudson notes that if he produces 10 pairs of shoes per day, his average fixed cost (AFC) is $14 and his marginal cost is $8; if he produces 20 pairs of shoes per day, his MC is $15. What is his AFC when output is 20 pairs of shoes per day
Answer:
Average fixed cost for 20 units = $7
Explanation:
The fixed costs are cost are expenditures that do not vary with the activity level within a given range. Unlike variable costs, fixed costs are tend to be unaffected in the short run by amount of production work done or service rendered.
The units produced will not have an impact on the total fixed costs but rather on the average fixed cost. The average fixed cost would become lower as the units produced increases.
Average fixed cost = Total fixed cost / Total units produced.
Hence , Total fixed cost = Average fixed cost × units produced
DATA
AFC - $14
Units - 10 units
Total fixed cost = 10 × 14 = $140
Average fixed cost for 20 units =Total fixed cost / Number of units
140/20 = $7
Average fixed cost for 20 units = $7
Ridley Company estimates that overhead costs for the next year will be $4,057,500 for indirect labor and $600,000 for factory utilities. The company uses machine hours as its overhead allocation base. If 115,000 machine hours are planned for this next year, what is the company's plantwide overhead rate
Answer:
Predetermined manufacturing overhead rate= $40.5 per machine-hours
Explanation:
Giving the following information:
Estimated overhead:
Indirect labor= $4,057,500
Factory utilities= $600,000
Total overhead= $4,657,500
Estimated machine-hours= 115,000
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= 4,657,500/115,000
Predetermined manufacturing overhead rate= $40.5 per machine-hours
Worldwide Logistics provides the following information: Operating income $ 1 comma 550 comma 000 Net sales $ 14 comma 000 comma 000 Average total assets $ 2 comma 000 comma 000 Management's target rate of return 30% What is the company's residual income?
Answer:
The company's residual income is $950,000.
Explanation:
Residual Income is calculated as Operating Income less Cost of Investment.
Calculation of Residual Income :
Operating income $1,550,000
Less Cost of Investment ($2,000,000 × 30%) ($600,000)
Residual Income $950,000
Conclusion :
The company's residual income is $950,000.
In response to the financial crisis that began in 2007, the government began to bail out banks deemed "too big to fail." Critics of this action argued that this would create the prospect of future bailouts and encourage banks to be fiscally irresponsible in the future. This illustrates
Answer:
The moral hazard problem
Explanation:
Moral hazard problem is defined as a situation where a party gets involved in a risky venture knowing that another party will incur the cost of failure.
For example if a borrower knows that he can take borrowed funds and default easily, he will tend to not pay back because the lender will bear the loss.
During the the financial crisis that began in 2007, the government began to bail out banks deemed "too big to fail."
This created fiscal irresponsibility in banks that knew if they are at risk of failing they will be bailed out by the government.
Andrea Apple opened Apple Photography on January 1 of the current year. During January, the following transactions occurred and were recorded in the company's books:
1. Andrea invested $13,500 cash in the business.
2. Andrea contributed $20,000 of photography equipment to the business.
3. The company paid $2,100 cash for an insurance policy covering the next 24 months.
4. The company received $5,700 cash for services provided during January.
5. The company purchased $6,200 of office equipment on credit.
6. The company provided $2,750 of services to customers on account.
7. The company paid cash of $1,500 for monthly rent.
8. The company paid $3,100 on the office equipment purchased in transaction #5 above.
9. Paid $275 cash for January utilities.
Based on this information, the balance in the A. Apple, Capital account reported on the Statement of Owner's Equity at the end of the month would be:__________.
a. $31,400.
b. $39,200.
c. $31,150.
d. $40,175.
e. $30,875.
Answer:
2356
Explanation:
3546478967654322 321
On January 1, 2010, the balance in Tabor Co.'s Allowance for Bad Debts account was $13,085. During the first 11 months of the year, bad debts expense of $21,937 was recognized. The balance in the Allowance for Bad Debts account at November 30, 2010, was $9,919.Required:(a) What was the total of accounts written off during the first 11 months? (Hint: Make a T-account for the Allowance for Bad Debts account.)Bad debt write offs $(b) As the result of a comprehensive analysis, it is determined that the December 31, 2010, balance of the Allowance for Bad Debts account should be $9,450. Show the adjustment required in the journal entry format.Allowance for bad debt Debit $Bad debt expenses Credit $
Answer:
(a) What was the total of accounts written off during the first 11 months?
bad debts written for the first 11 months = allowance for bad debt accounts January 1 balance + bad debt expense - allowance for bad debt accounts November 30 balance = $13,085 + $21,937 - $9,919 = $25,103
(b) As the result of a comprehensive analysis, it is determined that the December 31, 2010, balance of the Allowance for Bad Debts account should be $9,450. Show the adjustment required in the journal entry format.Allowance for bad debt Debit $Bad debt expenses Credit $
to determine the amount of bad debt expense that must be adjusted, we must subtract the estimated balance in December 31 from the balance in November 30 = $9,919 - $9,450 = $469. Since the November 30 amount is larger, it means that we over estimated our bad debt expense and it must be reduced:
Dr Allowance for doubtful accounts 469
Cr Accounts receivable 469
Shelton Co. purchased a parcel of land six years ago for $871,500. At that time, the firm invested $143,000 in grading the site so that it would be usable. Since the firm wasn't ready to use the site itself at that time, it decided to lease the land for $53,000 a year. The company is now considering building a warehouse on the site as the rental lease is expiring. The current value of the land is $923,000. What value should be included in the initial cost of the warehouse project for the use of this land
Answer:
$923,000
Explanation:
In order to determine the value included in the initial investment of a new project, we must use the opportunity cost of the land. In this case, the opportunity cost of using the land equals its current market value = $923,000.
When considering and evaluating this new project, all prior costs are considered sunk costs because they cannot be recovered.
Cantrell Company is required by law to collect and remit sales taxes to the state. If Cantrell has $4,500 of cash sales that are subject to an 6% sales tax, what is the journal entry to record the cash sales
Answer:
Debit Cash $4,770
Credit Sales $4,500
Credit Sales Taxes Payable 270
Explanation:
Preparation of the journal entry to record the cash sales for Cantrell Company
Debit Cash $4,770
Credit Sales $4,500
Credit Sales Taxes Payable 270
Explanation:
Since Cantrell Company is been required to receive and remit the sales taxes in which If Cantrell has $4,500 of cash sales that are subject to an 6% sales tax this means we have to Debit Cash $4,770, Credit Sales $4,500 and Credit Sales Taxes Payable 270.
The Sales Taxes Payable will be :
Sales × Sales Tax Rate
Sales Taxes Payable = $4,500 × 0.06= $270
( A Credit to Sales Taxes Payable)
The Cash Received will be:
Sales + Sales Taxes Payable
Cash Received = $4,500 + $270 = $4,770
( A Debit to Cash)
Production Department 1 Production Department 2 Production Department 3 Support Department 1 cost driver 1,400 100 500 Support Department 1’s costs total $142,000. Using the direct method of support department cost allocation, determine the costs from Support Department 1 that should be allocated to each production department.
Answer:
Department 1 cost Allocation =$99,400
Department 2 cost Allocation=$7,100
Department 3 cost Allocation=$35,500
Explanation:
Calculation for determining the costs from Support Department 1 that should be allocated to each production department using the direct method of support department cost allocation,
The first step is to find the Support department total cost drivers
Using this formula
Support department total cost drivers = Production Department 1 + Production Department 2 + Production Department 3
Let plug in the formula
Support department total cost drivers= 1,400+100+500
Support department total cost drivers = 2,000
Second step is to determine the costs from Support Department 1 that should be allocated to each production department.
Production Department 1
Support Department 1 Allocation
142,000* 1,400/2,000= $99,400
Production Department 2
Support Department 1 Allocation
142,000 * 100/2,000= $7,100
Production Department 3
Support Department 1 Allocation
142,000* 500/2,000= $35,500
Therefore the costs from Support Department 1 that should be allocated to each production department will be :
Department 1 cost Allocation =$99,400
Department 2 cost Allocation=$7,100
Department 3 cost Allocation=$35,500
Mary makes monthly deposits of $450 at the end of each month over 25 consecutive years to support her retirement. If the account earns an interest rate of 7.5%, which amount comes closest to the value of the deposits at the end?
a. $120,938
b. $343,343
c. $382,667
d. $394,767
e. $367,100
Answer:
d. $394,767
Explanation:
For computing the amount of deposit at the end we need to apply the future value formula i.e to be shown in the attachment
Given that,
Present value = $0
Rate of interest = 7.5% ÷ 12 months = 0.625%
NPER = 25 years × 12 months = 300 months
PMT = $450
The formula is shown below:
= -FV(Rate;NPER;PMT;PV;type)
So, after applying the above formula, the future value is $394,767
The financial statement effects of the budgeting process are summarized on the cash budget and the capital expenditures budget. true or false
Answer:
true
Explanation:
Tamar Co. manufactures a single product in one department. All direct materials are added at the beginning of the manufacturing process. Conversion costs are added evenly throughout the process. During May, the company completed and transferred 25,200 units of product to finished goods inventory. Its 3,600 units of beginning work in process consisted of $20,400 of direct materials and $248,940 of conversion costs. It has 2,700 units (100% complete with respect to direct materials and 80% complete with respect to conversion) in process at month-end. During the month, $677,100 of direct material costs and $2,350,260 of conversion costs were charged to production.
1. Prepare the company’s process cost summary for May using the weighted-average method.
2. Prepare the journal entry dated May 31 to transfer the cost of completed units to finished goods inventory. (Do not round intermediate calculations.)
Answer:
Required 1
Process cost summary for May
Inputs
Units Dollars
Beginning Work In Process 3,600 $269,340
Started 24,300 $3,027,360
Totals 27,900 $3,296,700
Output
Units Dollars
Transfer to Finished Goods 25,200 $3,024,000
Closing Work In Process 2,700 $272,700
Total 27,900 $3,296,700
Required 2
May 31
Finished Goods Inventory 3,024,000 (debit)
Work In Process 3,024,000 (credit)
Explanation:
Equivalent Units of Production Calculation
Materials
Units Completed and Transferred ( 25,200 × 100%) = 25,200
Units in Closing Work In Process ( 2,700 × 100%) = 2,700
Total Equivalent Units of Production = 27,900
Conversion Cost
Units Completed and Transferred ( 25,200 × 100%) = 25,200
Units in Closing Work In Process ( 2,700 × 80%) = 2,160
Total Equivalent Units of Production = 27,360
Calculation of Cost per Equivalent Unit of Production
Cost per Equivalent Unit = Total Cost / Total Equivalent Units of Production
Materials = ( $20,400 + $677,100) / 27,900
= $25.00
Conversion Cost = ( $248,940 + $2,350,260) / 27,360
= $95.00
Total Cost per Equivalent Unit = $120.00
The cost of completed units to finished goods inventory = 25,200 × $120.00 = $3,024,000.
the government believes that the equilibrium price is too low and tries to help almond growers by settinga price floor at Pf. What are represents the portion of consumer surplus that have been transsferred to produce surplus as a result of the price floor.
Answer: D) B
Explanation:
The Producer Surplus refers to the area below the Price Floor but above the Supply Curve and left of the new Quantity supplied. It comprises of areas B and E.
Before the Price Floor was introduced, area A, B and C were the Consumer Surplus as they were above the price but below the Demand Curve.
After the Price Floor was introduced however, area B has become a Producer Surplus.
Suppose that Italy and Germany both produce rye and cheese. Italy's opportunity cost of producing a pound of cheese is 5 bushels of rye while Germany's opportunity cost of producing a pound of cheese is 10 bushels of rye.
By comparing the opportunity cost of producing cheese in the two countries, you can tell that ? ( Italy OR Germany? ) has a comparative advantage in the production of cheese and ? ( Italy OR Germany? ) has a comparative advantage in the production of rye.
Suppose that Italy and Germany consider trading cheese and rye with each other. Italy can gain from specialization and trade as long as it receives more than ? (1 bushel , 1/10 bushel,1/5 bushel,5 bushel,10 bushel ?) of rye for each pound of cheese it exports to Germany. Similarly, Germany can gain from trade as long as it receives more than ? (1 pound , 1/10 pound ,1/5 pound ,5 pound ,10 pound ?) of cheese for each bushel of rye it exports to Italy.
Based on your answer to the last question, which of the following prices of trade (that is, price of cheese in terms of rye) would allow both Germany and Italy to gain from trade? Check all that apply.
6 bushels of rye per pound of cheese
7 bushels of rye per pound of cheese
4 bushels of rye per pound of cheese
1 bushel of rye per pound of cheese
Answer:
Italy has a comparative advantage in the production of cheese.
Germany has a comparative advantage in the production of rye.
5 bushels of rye
1/10 pound of cheese
6 bushels of rye per pound of cheese
7 bushels of rye per pound of cheese
Explanation:
Italy: 1 pound of cheese = 5 bushels of rye
Germany: 1 pound of cheese = 10 bushels of rye
Therefore, the opportunity cost of producing one pound of cheese in Italy is lower than the cost of producing one pound of cheese in Germany, which means that Italy has a comparative advantage in the production of cheese. The opposite can be said about rye since it costs the Germans only half a pound of cheese to produce 5 bushels of rye, while it costs the Italians a whole pound. Therefore, Germany has a comparative advantage in the production of rye.
This means that Italy can gain from specialization if it gains more than 5 bushels of rye for each pound of cheese.
As for Germany, can gain from specialization if it gains more than 1/10 pound of cheese for each bushel of rye.
Therefore, from the alternatives presented, the following would represent a gain from trade for both countries:
6 bushels of rye per pound of cheese
7 bushels of rye per pound of cheese
Simko Company issued $750,000, 8-year, 6 percent bonds on January 1, 2018. The bonds were issued for $710,000. Interest is payable annually on December 31. Using straight-line amortization, prepare journal entries to record (a) the bond issuance on January 1, 2018, and (b) the payment of interest on December 31, 2018.
Answer:
Bond issuance:
Dr cash $710,000
Dr discount on bonds payable $40,000
Cr bonds payable $750,000
The payment of interest on December 31, 2018:
Dr interest expense $50,000
Cr discount on bonds payable $5000
Cr cash $45,000
Explanation:
The bonds were issued at a discount to their face value, as a result, the discount on bonds payable is computed thus:
discount on bonds payable=$750,000-$710,000=$40,000
Bonds payable would be credited with $750,000 while cash and discount on bonds payable would be debited with $710,000 and $40,000 respectively
annual discount amortization=$40,000/8=$5000
annual coupon=$750,000*6%=$45000
Charlie’s Furniture Store has been in business for several years. The firm's owners have described the store as a "high-price, high-service" operation that provides lots of assistance to its customers. Margin has averaged a relatively high 34% per year for several years, but turnover has been a relatively low 0.4 based on average total assets of $800,000. A discount furniture Store is about to open in the area served by Charlie's, and management is considering lowering prices to compete effectively.Required:a. Calculate current sales and ROI for Charlie’s Furniture Store. (Round your "ROI" to 1 decimal place.)b. Assuming that the new strategy would reduce margin to 20%, and assuming that average total assets would stay the same, calculate the sales that would be required to have the same ROI as Charlie’s currently earns. (Do not round intermediate calculations.)c. Suppose you presented the results of your analysis in parts a and b of this problem to Charlie, and he replied, "What are you telling me? If I reduce my prices as planned, then I have to practically double my sales volume to earn the same return?" Given the results of your analysis, what is the actual amount of increase in sales required? (Do not round intermediate calculations.)d. Now suppose Charlie says, "You know, I'm not convinced that lowering prices is my only option in staying competitive. What if I were to increase my marketing effort? I'm thinking about kicking off a new advertising campaign after conducting more extensive market research to better identify who my target customer groups are." In general, explain to Charlie what the likely impact of a successful strategy of this nature would be on margin, turnover, and ROI.
Answer:
a. Calculate current sales and ROI for Charlie’s Furniture Store.
asset turnover formula = net sales / average assets
0.4 = net sales / $800,000
net sales = $320,000
ROI = net income / investment
net income = $320,000 x 34% = $108,800
ROI = $108,800 / $800,000 = 13.6%
b. Assuming that the new strategy would reduce margin to 20%, and assuming that average total assets would stay the same, calculate the sales that would be required to have the same ROI as Charlie’s currently earns.
net income = net sales x 20% (new margin)
net sales = $108,800 / 20% = $544,000
c. Suppose you presented the results of your analysis in parts a and b of this problem to Charlie, and he replied, "What are you telling me? If I reduce my prices as planned, then I have to practically double my sales volume to earn the same return?" Given the results of your analysis, what is the actual amount of increase in sales required?
sales increase = ($544,000 - $320,000) / $320,000 = 70% increase
d. Now suppose Charlie says, "You know, I'm not convinced that lowering prices is my only option in staying competitive. What if I were to increase my marketing effort? I'm thinking about kicking off a new advertising campaign after conducting more extensive market research to better identify who my target customer groups are." In general, explain to Charlie what the likely impact of a successful strategy of this nature would be on margin, turnover, and ROI.
An extensive market research and a "successful" marketing campaign are generally expensive. Even if the marketing campaign is really successful in increasing sales, costs would also increase. So the equation may or may not change, depending if the contribution margin of the additional units sold will be able to cover the expenses of a complex marketing campaign. If you spend $100 to earn $100 more, your situation hasn't changed at all. Which means that net income may or may not increase, therefore, the profit margin, ROI and asset turnover may not change.
Lakeside Components wishes to purchase parts in one month for sale in the next. On June 1, the company has 12,000 parts in stock, although sales for June are estimated to total 12,900 parts. Total sales of parts are expected to be 10,500 in July and 11,100 in August.
Parts are purchased at a wholesale price of $15. The supplier has a financing arrangement by which Lakeside Components pays 60 percent of the purchase price in the month when the parts are delivered and 40 percent in the following month. Lakeside purchased 15,000 parts in May.
Required:
a. Estimate purchases (in units) for June and July.
June July
Merchandise to be purchased in units: ? units ? units
b. Estimate the cash required to make purchases in June and July.
Month of payment
June:
July:
Answer:
a. Estimate purchases (in units) for June and July.
June = 11,400 partsJuly = 11,100 partsb. Estimate the cash required to make purchases in June and July.
June = $192,600July = $168,300Explanation:
Beginning stock June 1 = 12,000 parts
June's expected sales = 12,900 parts
July's expected sales = 10,500 parts
August's expected sales = 11,100 parts
purchase price $15 per part
60% paid in current month and 40% paid in the next month
15,000 parts were purchased in May at $225,000 ($90,000 to be paid in June)
estimated purchases June = estimated sales June + estimated sales July - beginning inventory = 12,900 + 10,500 - 12,000 = 11,400
estimated purchases July = estimated sales July + estimated sales August - beginning inventory = 10,500 + 11,100 - 10,500 = 11,100
cash payments June = (May's purchases x 40%) + (June's purchases x 60%) = (15,000 x $15 x 40%) + (11,400 x $15 x 60%) = $90,000 + $102,600 = $192,600
cash payments July = (June's purchases x 40%) + (July's purchases x 60%) = (11,400 x $15 x 40%) + (11,100 x $15 x 60%) = $68,400 + $99,900 = $168,300
A stock is expected to maintain a constant dividend growth rate of 4.4 percent indefinitely. If the stock has a dividend yield of 5.7 percent, what is the required return on the stock
Answer: 10.1%
Explanation:
The required rate of return on a stock is the minimum return on a stock that an investor is going to accept for owning that particular stock, as compensation for the risk that is associated with the stock.
From the question, we are told that a stock is expected to maintain a constant dividend growth rate of 4.4 percent indefinitely and that the stock has a dividend yield of 5.7 percent. The required return on the stock will be the addition of the growth and. The dividend yield. This will be:
= 4.4% + 5.7%
= 10.1%
Grandiose Growth has a dividend growth rate of 10%. The discount rate is 8%. The end-of-year dividend will be $5 per share.
What is the present value of the dividend to be paid in year 1? Year 2? Year 3?
Answer:
Year 1 2 3
Present value 5.09 5.19 5.28
Explanation:
The Present Value of a future sum is the worth today where the sum is discounted at a particular rate of return.
The formula below would be of help to work out the Present Value
Present Value = FV× (1+r)^(-n)
FV - Future Value, r- rate of return, n- number of years
Present value = $5× 1.10× 1.08^(-1)= 5.092
Present Value = $5× 1.10^2×1.08^(-2)= 5.186
Present Value in year 3 = $5× 1.10^3×1.08^(-3)= 5.28
Year 1 2 3
Present value = 5.092 5.186 5.28
Suppose Waterman Cable Company lent $125,000 to Comcast. On December 31, 2015, Comcast paid back the $125,000 and also paid $3,000 interest to Waterman Cable Company. Under U.S.GAAP, what would be the impact of the repayment on Waterman Cable Company's statement of cash flows using the direct method
Answer:
The $125,000 which is the amount received should be an increase in the Investing Section and, under U.S.Generally Accepted Accounting Principles, the $3,000 interest received should be included in the Operating Section.
Explanation:
Based on the information in the question above what would be the impact of the repayment on Waterman Cable Company's statement of cash flows using the direct method is that the $125,000 which Waterman Cable Company lent to Comcas in which Compas paid back will be the amount received which should be an increase in the Investing Section While , under U.S.Generally Accepted Accounting Principles, the $3,000 interest received should be included in the Operating Section.
You have been a BCBA for over 5 years and decide to take on some additional work in the evening, supervising students seeking hours toward their BCBA fieldwork. You feel that your competence and experience will allow you to provide excellent supervision to your 16 clients and 6 new supervisees because you will only be providing supervision at night. You might violate:
Answer:
Performing dual roles
Explanation:
There are few ethical principles for any business that needs to be followed for the successful business. If an individual takes on more duties apart from his routine work he will not be able to focus on both. The additional work in the evening will make feel tired in the morning. The additional duties of supervision at night will effect the competency.