Answer:
C) Partners may only decrease the basis in inventory distributed in a liquidating distribution.
Explanation:
Liquidating distribution refers to the absence of dividend distribution that is to be allocated to the shareholders in case of the partial or complete liquidation. In this, the whole equity is allocated along with the profit-sharing
In case fo inventory received based on a partner basis, the partners are only eligible to decrease the inventory basis
hence, the option c is correct
During the current month, Grey Company transferred 60,000 units of finished production out of the Mixing Department at a cost of $6 each. They were transferred to finished goods. The journal entry to record the transfer would be which of the following?
a. Finished Goods 360,000
Work in Process 360,000
b. Finished Goods 360,000
Cost of Goods Sold 360,000
c. Work in Process 600,000
Finished Goods 600,000
d. Work in Process 600,000
Cost of Goods Sold 600,000
Answer:
a. Finished Goods 360,000
Work in Process 360,000
Explanation:
During transfer, de-recognize the cost of finished and transferred production from the Work In Process Account of the Mixing Department (Credit) and accumulate the cost in the Finished Goods Account (Debit).
When the units are finally sold, Cost of Goods Sold is recognized (Debit) and the Finished Goods Account is De-recognized (Credit).
A company's flexible budget for 13,200 units of production showed sales, $54,120; variable costs, $21,120; and fixed costs, $18,000. The operating income expected if the company produces and sells 19,600 units is:
Answer:
Net income= $31,000
Explanation:
Giving the following information:
Production= 13,200
Sales= 54,120
Variable costs= $21,120
Fixed costs= $18,000
First, we need to calculate the unitary contribution margin:
Unitary contribution margin= total contribution margin/number of units
Unitary contribution margin= (54,120 - 21,120) / 13,200
Unitary contribution margin= $2.5
Now, for 19,600 units:
Total contribution margin= 2.5*19,600= 49,000
Fixed costs= (18,000)
Net income= 31,000
Q3) At an output level of 45,000 units, you calculate that the degree of operating leverage is 2.79. If output rises to 48,000 units, what will the percentage change in operating cash flow be
Answer: 18.6%
Explanation:
Degree of operating leverage = % change in Operating cash flow / % change in output
% change in Output
= [tex]\frac{48,000 - 45,000}{45,000}[/tex]
= 6.7%
Degree of operating leverage = % change in Operating cash flow / % change in output
2.79 = % change in Operating cash flow/ 6.7%
% change in Operating cash flow = 2.79 * 6.7%
% change in Operating cash flow = 18.6%
Blossom Company sells equipment on September 30, 2020, for $20,100 cash. The equipment originally cost $72,800 and as of January 1, 2020, had accumulated depreciation of $42,100. Depreciation for the first 9 months of 2020 is $5,45. Prepare the journal entries to (a) update depreciation to September 30, 2015, and (b) record the sale of the equipment.
Answer:
Date Account titles and explanation Debit Credit
30/09/2020 Depreciation expense $5,450
Accumulated depreciation $5,480
(To record depreciation expense)
30/09/2020 Accumulated depreciation $47,550
Cash $20,100
Loss on sale of equipment $5,230
Equipment $72,880
(To record sale of equipment)
International trade promotes economic growth when it allows any two countries to grow (in their combined production) beyond (above) their pre-trade production possibilities curve (PPC).
a. True
b. False
Answer: True
Explanation:
The Production Possibilities Curve (PPC) is meant to illustrate how a country produces goods and services given the limited resources it has. The curve represents the various amounts that have to be traded off of 2 goods to produce more or less of one good.
The Curve shows that it is best that a country produces those goods that is good at producing so that it can produce more of it and then trade with the rest of the world for the goods it isn't too efficient at producing. If both countries involved in the trade are able to grow beyond (above) their pre-trade production possibilities curve then the trade would have promoted economic growth.
Consider a service company that provides carpet cleaning and uses straight-line depreciation. Classify the cost of the depreciation on the carpet cleaning machines.
a. Fixed
b. Indirect
Answer:
Both :
a. Fixed and,
b. Indirect
Explanation:
The depreciation expense on production machinery form part of the product or service cost.
The cost however, can not be traced to the product or service that is why it is an Indirect cost as opposed to the direct costs which can be traced directly on the product or service.
Straight line method charges a fixed amount of depreciation thus the depreciation is a fixed charge.
Smiling Elephant, Inc., has an issue of preferred stock outstanding that pays a $6.10 dividend every year, in perpetuity. If this issue currently sells for $80.65 per share, what is the required return?
Answer:
7.56%
Explanation:
Calculation for the required return for Smiling Elephant
Using this formula
Required return =D/P0
Where,
D=$6.10
P0=$80.65
Let plug in the formula
Required return =$6.10/$80.65
Required return =0.0756×100
Required return =7.56%
Therefore the Required return for Smiling Elephant Inc will be 7.56%
The country of Morson has decided to privatize the state-owned cable television company. How can the country help this newly privatized industry succeed
Answer:
Government Support
Explanation:
Privatization is better for a country. It minimizes the monopoly and encourages healthy competition. Increased competition in the business world is good. There can be variety of services available to the consumers. Government should support privatization by introducing schemes of interest free loan for investors. There will be large number of firms that might want to enter business world but the money is not available to them for startup.
he financial manager at Starbuck Industries is considering an investment that requires an initial outlay of $24,000 and is expected to produce cash inflows of $1,000 at the end of year 1, $5,000 at the end of years 2 and 3, $14,000 at the end of year 4, $9,000 at the end of year 5, and $7,000 at the end of year 6. a. Select the time line option that represents the cash flows associated with Starbuck Industries' proposed investment. b. Which of the approaches—future value or present value—do financial managers rely on most often for decision making? Why?
Answer:
Please check the attached image for the timeline image.
present value. this is because in making the decision of whether to carry out a project, the decision is made at the beginning of of the project and not in the future. so it is important to determine the present value to know if the project is profitable and should be carried out.
Explanation:
Timeline is arranges a series of events in chronological order. cash inflows are recorded as positive while cash outflows have a negative sign in front of the amount.
present value is the sum of discounted cash flows
Bee Inc. is working on its cash budget for March. The budgeted beginning cash balance is $55,000. Budgeted cash receipts total $139,000 and budgeted cash disbursements total $134,000. The desired ending cash balance is $80,000. To attain its desired ending cash balance for March, the company needs to borrow:
Answer:
$20,000
Explanation:
The computation of the borrowed amount is shown below:
As we know that
Ending cash balance = beginning cash balance + cash receipts - cash disbursements + cash borrowings
$80,000 = $55,000 + $139,000 - $134,000 +cash borrowings
$80,000 = $194,000 - $134,000 + cash borrowings
So, the borrowing is $20,000
With an increase in product advertising of $50 million you expect to increase sales by 10,000 units. If unit grow margin is $4,800, will the additional advertising increase product contribution?
Answer:
Income will decrease by $2,000,000.
Explanation:
Giving the following information:
Advertising increase= $50,000,000
Units increase= 10,000 units
Unit contribution margin= $4,800
To calculate the total effect on income, we need to use the following formula:
Effect on income= total contribution margin - increase in fixed costs
Effect on income= 10,000*4,800 - 50,000,000
Effect on income= $2,000,000 decrease
Income will decrease by $2,000,000.
A buyer and a seller enter into a real estate sales contract. Under the contract's terms, the buyer will pay the seller $500 a month for 10 years. The seller will continue to hold legal title, while the buyer will live in the home and pay all real estate taxes, insurance premiums, and regular upkeep costs. What kind of contract do the buyer and seller have
Answer: Land Sales Contract
Explanation:
Land Sales contract are a way to buy a property for people who would otherwise be unable to buy one because they were unable to get a mortgage or are running low in funds.
It works by the buyer paying the seller a certain amount of money for a period of time according to an agreement. During this period of payment, the seller continues to hold the legal rights to the property and then passes it to the buyer when they are finished paying. In this scenario therefore, the seller effectively plays the role of a mortgage bank.
Parton and Sons is a law firm that uses activity-based costing. Classify these activities as value-added or non-value-added:
a. Taking appointments
b. Reception
c. Meeting with clients
d. Bookkeeping
e. Court time
f. Meeting with opposing attorneys
g. Billing
h. Advertising
Answer:
The answer is:
A - Non-value-added
B - Non-value-added
C- Value-added
D- Non-value-added
E - Value-added
F - Value-added
G - Non-value-added
H- Non-value-added
Explanation:
In activity-based costing, Non-value-added activities are activities that add costs to ones product without enhancing the value while value-added is a cost that enhance the quality of a product or service.
A - Non-value-added
B - Non-value-added
C- Value-added
D- Non-value-added
E - Value-added
F - Value-added
G - Non-value-added
H- Non-value-added
Consider Figure 9.2 on page 205 of our textbook. Suppose P0 is $10 and P1 is $11. Suppose a new firm with the same LRAC curve as the incumbent tries to break into the market by selling 4,000 units of output. Estimate from the graph what the new firm's average cost of producing output would be. If the incumbent continues to produce 6,000 units, how much output would be supplied to the market by the two firms? Estimate what would happen to the market price as a result of the supply of both the incumbent firm and the new entrant. Approximately how much profit would each firm earn ?
Answer:
The 10,000 units of output that will be supplied by the two firms to the market.
Profit that each firm would earn will be higher than previous.
Explanation:
The firm selling 4,000 units at the price of $10 per unit. If the output is increased to 6,000 units the price will increase to $11 per unit. If the new 6,000 units are produced along with the previous 4,000 units then the total output supplied by the two firms will be 10,000 units (6,000 + 4,000). The supply of goods in the market will increase so price will fall and the revenue for the firms will decline but they can benefit with sales volume and their profit can increase.
The 10,000 units of output will be supplied by the two firms to the market.
The profit that each firm would earn will be higher than the previous.
Calculation of the number of units and profits:Here the firm sells 4,000 units at the price of $10 per unit. And, in the case when the output is increased to 6,000 units the price will increase to $11 per unit.
And, In the case when the new 6,000 units are produced along with the previous 4,000 units so the total output supplied by the two firms will be 10,000 units.
The supply of goods in the market should increase due to which the price will fall and the revenue for the firms will decline however they can benefit with sales volume and their profit can increase.
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PROBLEM 1:
Equipment A Equipment B
cost $100,000 $63,000
Accumulated depreciation(1/1) $ 42,000 $36,000
Useful life 8 years 5 years
Depreciation method straight line straight line
Date sold 7/1/12 9/1/12
Sales price $ 39,000 $ 20,000
Journalize all entries required to update deprecition and record thesales of the two assets in 2012.accumulated depreciation includes depreciation recorded through 12/31/11.
Answer:
Equipment A
Journal Entry - update depreciation
Depreciation expense $6,250 (debit)
Accumulated depreciation $6,250 (credit)
Journal Entry - to record the sale
Accumulated depreciation ($ 42,000 + $6,250) $48,250 (debit)
Cash $ 39,000 (debit)
Profit and Loss $12,750 (debit)
Equipment $100,000 (credit)
Equipment B
Journal Entry - update depreciation
Depreciation expense $6,300 (debit)
Accumulated depreciation $6,300 (credit)
Journal Entry - to record the sale
Accumulated depreciation ($36,000 + $6,300) $42,300 (debit)
Cash $ 20,000 (debit)
Profit and Loss $700 (debit)
Equipment $63,000 (credit)
Explanation:
Straight line method charges a fixed amount of depreciation for the time the asset is in use in the business.
Depreciation Expense = (Cost - Residual Value) / Estimated Useful Life
Equipment A
Depreciation Expense = $100,000 / 8 years
= $12,500
Depreciation Expense for 2012 = $12,500 × 6/12
= $6,250
Journal Entry - update depreciation
Depreciation expense $6,250 (debit)
Accumulated depreciation $6,250 (credit)
Journal Entry - to record the sale
Accumulated depreciation ($ 42,000 + $6,250) $48,250 (debit)
Cash $ 39,000 (debit)
Profit and Loss $12,750 (debit)
Equipment $100,000 (credit)
Equipment B
Depreciation Expense = $63,000 / 5 years
= $12,600
Depreciation Expense for 2012 = $12,600 × 6/12
= $6,300
Journal Entry - update depreciation
Depreciation expense $6,300 (debit)
Accumulated depreciation $6,300 (credit)
Journal Entry - to record the sale
Accumulated depreciation ($36,000 + $6,300) $42,300 (debit)
Cash $ 20,000 (debit)
Profit and Loss $700 (debit)
Equipment $63,000 (credit)
The Oriole Acres Inn is trying to determine its break-even point during its off-peak season. The inn has 50 rooms that it rents at $100 a night. Operating costs are as follows:
Salaries $7,500 per month
Utilities $1,500 per month
Depreciation $1,300 per month
Maintenance $1,760 per month
Maid service $24 per room
Other costs $46 per room
Determine the inn’s break-even point in number of rented rooms per month.
Answer:
Break-even point in units= 402 rooms a month
Explanation:
Giving the following information:
The inn has 50 rooms that it rents at $100 a night. Operating costs are as follows:
Salaries $7,500 per month
Utilities $1,500 per month
Depreciation $1,300 per month
Maintenance $1,760 per month
Maid service $24 per room
Other costs $46 per room
First, we need to calculate the total fixed costs and the unitary variable cost.
Total fixed costs= salaries + utilities + depreciation + maintenance
Total fixed costs= $12,060
Unitary variable cost= 24 + 46= $70
To calculate the break-even point in units, we need to use the following formula:
Break-even point in units= fixed costs/ contribution margin per unit
Break-even point in units= 12,060/ (100 - 70)
Break-even point in units= 402 rooms a month
Trez Company began operations this year. During this first year, the company produced 100,000 units and sold 80,000 units. The absorption costing income statement for this year follows.
Sales 80,000 units x 45 per unit $3,600,000
Cost of goods sold
- Beginning inventory $__________0
- Cost of goods manufactured (100,000 units x $25 per unit) $2,500,000
- Cost of good available for sale $2,500,000
Ending inventory (20,000 x 25) $500,000
Cost of goods sold $2,000,000
Gross margin $1,600,000
Selling and administrative expenses $580,000
Net income %1,020,000
a. Selling and administrative expenses consist of $400,000 in annual fixed expenses and $2.25 per unit in variable selling and administrative expenses.
b. The company's product cost of $25 per unit is computed as follows:
Direct materials $4 per unit
Direct labor $11 per unit
Variable overhead $4 per unit
Fixed overhead ($600,000/ $100,000 units) $6 per unit
Required:
Prepare an income statement for the company under variable costing.
Answer:
Income statement for the company under variable costing
Sales (80,000 units x $45) $3,600,000
Less Cost of Sales
Beginning inventory $0
Cost of goods manufactured (100,000 units x $19) $1,900,000
Cost of good available for sale $1,900,000
Less Ending inventory (20,000 x $19) ($380,000) ($1,520,000)
Contribution $2,080,000
Less Period Costs
Fixed Manufacturing Overhead ($600,000)
Selling and administrative expenses - Fixed ($400,000)
Selling and administrative expenses - Variable ($180,000)
Net Income / (loss) $900,000
Explanation:
Under Variable Costing.
1.Product cost = Variable Manufacturing Costs Only
Therefore, Product cost = $4 + $11 + $ 4
= $19
2.Period Cost = Fixed Manufacturing Overheads + Non - Manufacturing Costs
You are thinking of building a new machine that will save you $ 4 comma 000$4,000 in the first year. The machine will then begin to wear out so that the savings decline at a rate of 1 %1% per year forever. What is the present value of the savings if the interest rate is 9 %9% per year?
Answer:
The present value of the savings=$37,064.22
Explanation:
The present value of the savings is the amount that it worths today, this would be done in two stages;
The first stage is to determined the present of the first cash savings as follows:
PV of the first payment = 4,000 × (1.09)^(-1)=3,669.72
Second step is to determine the present value of the declining perpetuity
PV of declining perpetuity. A perpetuity is the series of cash flow occurring for the foreseeable future of years.
A- 4,000, g-negative growth rate = 1%,
interest rate = 9%
PV in year 1 = 4,000× (1-0.09)/(0.09+0.01)
= 36,400
PV in year 0 = 36,400 × (1.09)^(-1) = 33,394.49
The present value of the savings = 33,394.49 + 3,669.72= 37,064.22
The present value of the savings=$37,064.22
Exercise 10-6 Direct Materials and Direct Labor Variances [LO10-1, LO10-2] Huron Company produces a commercial cleaning compound known as Zoom. The direct materials and direct labor standards for one unit of Zoom are given below: Standard Quantity or Hours Standard Price or Rate Standard Cost Direct materials 7.40 pounds $ 2.60 per pound $ 19.24 Direct labor 0.45 hours $ 8.00 per hour $ 3.60 During the most recent month, the following activity was recorded: 12,100.00 pounds of material were purchased at a cost of $2.50 per pound. All of the material purchased was used to produce 1,500 units of Zoom. 575 hours of direct labor time were recorded at a total labor cost of $5,750. Required: 1. Compute the materials price and quantity variances for the month. 2. Compute the labor rate and efficiency variances for the month.
Answer:
Instructions are below.
Explanation:
Giving the following information:
Direct material:
Standard= 7.40 pounds $ 2.60 per pound
Actual= 12,100 pounds of material were purchased for $2.50 per pound.
Direct labor:
Standard= 0.45 hours $ 8.00 per hour
Actual= 575 hours of direct labor time were recorded at a total labor cost of $5,750
Units produced= 1,500
To calculate the direct material price and quantity variance, we need to use the following formulas:
Direct material price variance= (standard price - actual price)*actual quantity
Direct material price variance= (2.6 - 2.5)*12,100
Direct material price variance= $1,210 favorable
Direct material quantity variance= (standard quantity - actual quantity)*standard price
standard quantity= 1,500*7.4= 11,100
Direct material quantity variance= (11,100 - 12,100)*2.6
Direct material quantity variance= $2,600 unfavorable
To calculate the direct labor efficiency and rate variance, we need to use the following formulas:
Direct labor time (efficiency) variance= (Standard Quantity - Actual Quantity)*standard rate
Standard quantity= 1,500*0.45= 675
Direct labor time (efficiency) variance= (675 - 575)*8
Direct labor time (efficiency) variance= $800 favorable
Direct labor rate variance= (Standard Rate - Actual Rate)*Actual Quantity
Actual rate= 5,750/575= $10
Direct labor rate variance= (8 - 10)*575
Direct labor rate variance= $1,150 unfavorable
The better-off test for evaluating whether a particular diversification move is likely to generate added value for shareholders involves determining whether the proposed diversification move Group of answer choices provides the company with additional resource strengths. provides additional ways to build the entrepreneurial skills of the company's senior managers. spreads stockholders' risks across a greater number of lines of business. has competitively valuable value chain match-ups with the company's present businesses such that its businesses can perform better together than apart. has good potential for increasing the company's rate of return on invested capital.
Answer: Has competitively valuable value chain match-ups with the company's present businesses such that its businesses can perform better together than apart.
Explanation:
The better-off test of diversification is that the company must gain a return that is higher than incremental growth. Incremental growth is usually defined a 1 + 1 = 2 formula and this test argues that Diversification must provide more than this such that the company achieves synergistic growth ( 1 + 1 = 3) which is what happens when different entities work better together than alone.
Diversification should therefore be into an area that will be able to match-up with the company's present businesses such that its businesses can perform better together than apart and produce even greater returns.
Scenario: Your direct supervisor is interested in a project you are currently working on, and they have asked to increase the scope to increase the department's goals. How would you respond if your supervisor was not the project sponsor?
Scenario: Your direct supervisor is interested in a project you are currently working on, and they have asked to increase the scope to increase the department's goals. How would you respond if your supervisor was not the project sponsor?
ANSWER:
Take down his/her suggestions. The first thing is to show respect. Accept thoughts and contributions towards that project. Most times a project "sponsor" is not someone who is a professional in the field or discipline that the project is about.
If your direct supervisor has the idea of increasing the scope of the project, take note of his/her reasons and if they will truly bring the achievement of more departmental goals, then relay the idea of expansion to the project sponsor.
Answer:
At this point, the important thing is to remain calm and in control. Your supervisor, like everyone else, is likely to get confused and blame people for things that are not their fault, or even find fault that does not exist.
In that case, you should wait for him to finish speaking, ask for permission to speak and explain how you did your job and show how your supervisor is wrong about the conclusion he made. This must be done calmly and politely, always maintaining respect.
Explanation:
On December 31, 2021, Larry's Used Cars had balances in Accounts Receivable and Allowance for Uncollectible Accounts of $66,000 and $900, respectively. During 2022, Larry's wrote off $2,275 in accounts receivable and determined that there should be an allowance for uncollectible accounts of $5,500 at December 31, 2022. Bad debt expense for 2022 would be:
Answer:Bad debts expense = $6,875
Explanation:
A bad debt expense is recognized when a customer cannot pay its financial obligations therefore the account receivable will no longer be collectible
Beginning uncollectible accounts= $900
Ending allowance for uncollectible accounts = $5,500
Amounts written off = $2,275
Ending allowance for uncollectible accounts =Begining uncollectible accounts + current bad debts expense - amounts written off in 2022
$5,500= $900 + bad debts expense - $2,275
current bad debts expense for 2022= $5,500 - $900 + $2,275 = $6,875
Can also be illustrated as
ACCOUNTS
Begining uncollectible accounts $900
Amounts written off (less) - $2,275
Bad debts expense(add) + $6,875
Ending allowance for uncollectible accounts $5,500
The Cell Inc., a microbiology research laboratory headquartered in the United States, has been losing money. The CEO decides to outsource some production to companies in developing countries. This decision to shift functions or processes to less developed countries is most likely due to their
Answer:
ghjkgg 9ycutzts5a64sts64d6ix74s
The decision of the Ceo of Cell Inc. microbilogy research laboratory to outsource some production in developing countries so that maximum output and fast deliveries can be expected to customers and also by the company can focus on various other factors affecting the business.
What is a research laboratory?The scientific lab where the experiments or products research are made so that new products can be made or existing can be replaced in chemical biological or physical aspects.
What is outsourcing?The practice which is done by an individual or an organization by using third party to carry their business activities like performing tasks giving services to customers etc.
What is third party?The company or an individual which comes in between two aspects and try to manage or solve the issue or give solutions
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Two investment advisers are comparing performance. One averaged a 21% rate of return and the other a 18% rate of return. However, the beta of the first investor was 1.4, whereas that of the second investor was 1. a. Can you tell which investor was a better selector of individual stocks (aside from the issue of general movements in the market)? First investor Second investor Cannot determine b. If the T-bill rate was 7% and the market return during the period was 13%, which investor would be considered the superior stock selector? Second investor First investor Cannot determine c. What if the T-bill rate was 4% and the market return was 17%? First investor Second investor Cannot determine
What is the proper preparation sequencing of the following budgets? 1. Budgeted Balance Sheet 2. Sales Budget 3. Selling and Administrative Budget 4. Budgeted Income Statement
Answer:
1. Sales Budget
2. Selling and Administrative Budget
3. Budgeted Income Statement
4. Budgeted Balance Sheet
Explanation:
First of all the sales budget is prepared in which expected sales are shown and then the selling and administrative budget is prepared which shows expenses related to sale.
The income statement budget is prepared which shows the expected income.
Then at last Budgeted Balance Sheet is prepared in which the expected income is transferred.
The order in which they appear is as follows.
1. Sales Budget
2. Selling and Administrative Budget
3. Budgeted Income Statement
4. Budgeted Balance Sheet
The proper preparation sequencing of the budgets includes the Sales Budget, Selling and Administrative Budget, Budgeted Income Statement, and Budgeted Balance Sheet respectively.
The preparation of budgeted statement by business helps them to know how to expend funds in the future and plan for changes as well.
The proper preparation sequencing of the budgets includes:
Sales budget which are prepared to estimate the sales and revenue expected for the periodThe Selling and administrative budget is prepared estimate the cost of operationThe Budgeted Income Statement is prepared like the Conventional Income statement.The Budgeted Balance Sheet is prepared like the Conventional Balance sheet.Learn more about this here
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assuming it is stored safely how long after It was prepared can refrigerated food be sold or served 1-7 days b-10 days c-14 days d-20 days
Answer:
1-7 days
Explanation:
But, ideally 4 days should be the maximum for prepared food to be refrigerated before it is sold or served.
Leaving food refrigerated for a long time makes it to lose its nutrients. Some foods like potatoes, meat, eggs, chicken, etc. can become harmful or poisonous, especially when you reheat them before eating. That is why it is right to adhere to proper routines for refrigerating food and also preparing and serving the food. Some healthy food are better eaten immediately after their preparation.
Sales 22160 units Cash, beginning balance $34000 Selling and administrative (of which depreciation, $5,000) $53000 Required minimum cash balance $66480 If necessary, the company will borrow cash from a bank on the first day of March. Assume that the borrowing can be made in any (exact) amount, but bears interest at 3% per month. The March interest will be paid during subsequent months. Q: What is the closest amount of cash that must be borrowed on March 1 to cover all cash disbursements and to obtain the desired March 31 cash balance
Answer:
Loan taken: 58,320
Explanation:
We add up the beginning cash with the receipts and subtract the expenses.
Then, we compare agaisnt the mnimum required balance
Beginning Cash 34,000
Cash Receipts
Sales 22,160
Total cash form operations: 56,160
Cash disbursements
S&A expense (w/o depreciations) 48,000
Ending Cash from operations 8,160
Minimum Balance: 66,480
Loan taken: 58,320
Jackie notices everyone wearing Converse sneakers on the first day of school. Ever the fashionista, this will likely affect: Multiple Choice Jackie's income, as she now needs to buy Converse and will have less to spend on other goods. Jackie's preferences for shoes, since she feels as though she needs them now. Jackie's expectations of future prices, since the price of Converse will likely go up because they're getting so popular. the prices of related goods, since other shoes will be less popular and cost less now.
Answer:
Jackie's income, as she now needs to buy Converse and will have less to spend on other goods.
Explanation:
Jackie is a fashionista and so she would respond to trends. Since everyone around her is wearing converse, she would want to wear converses too. so her income would be affected as it would be reduced as she would buy the converse.
The rate of return on the common stock of Lancaster Woolens is expected to be 18 percent in a boom economy, 8 percent in a normal economy, and only 2 percent in a recessionary economy. The probabilities of these economic states are 12 percent for a boom and 10 percent for a recession. What is the variance of the returns on this common stock
Answer:
Variance of the return on this common stock is 0.15%
Explanation:
Note: See the attached excel file for the calculation of the variance of the returns on this common stock.
Note that the probability of a normal economy can be obtained as follows:
Probability of normal economy = 100% - Probability of a boom - Probability of a recession = 100% - 12% - 10% = 78%
These probabilities are used in the attached excel file.
Chester Corp. is downsizing the size of their workforce by 10% (to the nearest person) next year from various strategic initiatives. How much will the company pay in separation costs if each worker receives $5,000 when separated?
Answer:
$293,500
Explanation:
The computation of the amount pay in separation cost is shown below:
As there are 587 employees
but 10% are downsized
So, separation cost is
= Current employees × downsized percentage × received amount by workers
= 587 employees × 10% × $5,000
= $293,500
We simply applied the above formula so that the amount pay by the company with respect to the separation cost could arrive