Answer: $543
Explanation:
The portfolio beta is a weighted average of the individual stock betas.
Portfolio beta = (Weight of stock A * Stock A beta) + (Weight of stock B * Stock B beta)
0.9 = (400/1,000 * 1.3) + (w * 0.70)
0.9 = 0.52 + 0.7w
0.7w = 0.9 - 0.52
0.7w = 0.38
w = 0.38/0.7
w = 0.543
The portfolio value is $1,000 so the dollars would be:
= 0.543 * 1,000
= $543
The amount of dollars that is needed to be invested in stock B if you want a portfolio beta of 0.90 is $543.
Let x represent the amount of dollars
Hence:
Beta Portfolio= .90 = ($400÷$1,000 ×1.3) + ($x ÷$1,000×.7) + [(($1,000-$400)–x) ÷$1,000 ×0]
Beta Portfolio= .90 = ($400÷$1,000 ×1.3) + ($x ÷$1,000×.7) + (($600–x) ÷$1,000 ×0)
.90 = .52 + .7x + 0
.7x=.90-.52
Divide both side by .7x
.7x = .38
x=.38/.7
x = $542.86
x= $543 (Approximately)
Inconclusion the amount of dollars that is needed to be invested in stock B if you want a portfolio beta of 0.90 is $543.
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Which scenarios provided would cause a change in demand for grape jelly?
A)
The price of grape jelly increases considerably.
B)
Grape jelly is placed on sale at a local supermarket.
The prices of peanut butter and bread increase substantially.
D)
Summer is approaching and more people prefer sandwiches for lunch.
E)
The federal government releases a report on the positive health benefits of
grape jelly
Answer:C d and e
Explanation:there different scenarios
Kapono Farms exchanged an old tractor for a newer model. The old tractor had a book value of $15,000 (original cost of $34,000 less accumulated depreciation of $19,000) and a fair value of $9,600. Kapono paid $26,000 cash to complete the exchange. The exchange has commercial substance. Case B. Kapono Farms exchanged 100 acres of farmland for similar land. The farmland given had a book value of $530,000 and a fair value of $760,000. Kapono paid $56,000 cash to complete the exchange. The exchange has commercial substance.
Required:
a. What is the amount of gain or loss that Kapono would recognize on the exchange of the land?
b. What is the amount of gain or loss that Kapono would recognize on the exchange of the tractor?
c. Assume the fair value of the old tractor is $20,000 instead of $9,600. What is the amount of gain or loss that Kapono would recognize on the exchange? What is the initial value of the new tractor?
Answer:
a. Gain on sale of land = $230,000
b. Loss on the exchange of the tractor = $5,400
c-1. Gain on Exchange of the tractor = $5,000
c-2. Initial value of new tractor = $35,600
Explanation:
a. What is the amount of gain or loss that Kapono would recognize on the exchange of the land?
This can be determined as follows:
Details Amount $
Fair value of land 760,000
Book value of land (530,000)
Gain (loss) on sale of land 230,000
b. What is the amount of gain or loss that Kapono would recognize on the exchange of the tractor?
This can be determined as follows:
Details Amount $
Original Cost of Tractor 34,000
Accumulated Depreciation (19,000)
Book Value of Tractor 15,000
Therefore, we have:
Loss on Exchange of the tractor = Fair value - Book Value of Tractor = $9,600 - $15,000 = $5,400
c. Assume the fair value of the old tractor is $20,000 instead of $9,600. What is the amount of gain or loss that Kapono would recognize on the exchange? What is the initial value of the new tractor?
c-1. Calculation of the amount of gain or loss that Kapono would recognize on the exchange
From part b, we have:
Book Value of Tractor = $15,000
And, we have:
Fair Value = $20,000
Therefore, we have:
Gain on Exchange of the tractor = Fair value - Book Value of Tractor = $20,000 - $15,000 = $5,000
c-2. Calculation of the initial value of the new tractor
This can be determined as follows:
Initial value of new tractor = Fair Value of tractor given + Cash paid = $9,600 + $26,000 = $35,600
An income statement for Sam's Bookstore for the first quarter of the year is presented below: Sam's Bookstore Income Statement For Quarter Ended March 31 Sales $ 930,000 Cost of goods sold 655,000 Gross margin 275,000 Selling and administrative expenses Selling $ 105,000 Administrative 114,000 219,000 Net operating income $ 56,000 On average, a book sells for $60. Variable selling expenses are $5 per book with the remaining selling expenses being fixed. The variable administrative expenses are 4% of sales with the remainder being fixed. The contribution margin for Sam's Bookstore for the first quarter is:
Answer:
$160,300
Explanation:
Calculation for what The contribution margin for Sam's Bookstore for the first quarter is:
Sales revenue $ 930,000
Less: Variable costs
Cost of goods sold $ 655,000
Variable selling expenses ( 930000/60)*5 $ 77,500
Variable administrative expenses (930,000*4%) $ 37,200
Total variable expenses $769,700
Contribution margin $160,300
($930,000-$769,700)
Therefore The contribution margin for Sam's Bookstore for the first quarter is:$160,300
Sheen Co. manufactures laser printers. It has outlined the following overhead cost drivers. Overhead Costs Pool Cost Driver Overhead Cost Budgeted cost driver Quality control Number of inspections $ 64,800 1,080 Machine operation Machine hours 132,000 1,100 Materials handling Number of batches 900 30 Miscellaneous overhead cost Direct labor hours 48,000 4,000 Sheen Co. has an order for 1,000 laser printers that has the following production requirements: Number of Inspections 175 Machine Hours 180 Number of Batches 5 Direct Labor Hours 650 Use activity-based costing to determine a unit cost for the laser printers
Answer:
Sheen Co.
The overhead unit cost for the laser printers is:
= $40.05
Explanation:
a) Data and Calculations:
Overhead Costs Pool Cost Driver Overhead Budgeted
Cost cost driver
Quality control Number of inspections $ 64,800 1,080
Machine operation Machine hours 132,000 1,100
Materials handling Number of batches 900 30
Miscellaneous Direct labor hours 48,000 4,000
Overhead Rates:
Quality control = $60 ($64,800/1,080)
Machine operation = $120 ($132,000/1,100)
Materials handling = $30 ($900/30)
Miscellaneous overhead costs = $12 ($48,000/4,000)
Quantity of order = 1,000 laser printers
Requirements of the order: Overhead Rate Total
Number of Inspections 175 $60 (175*$60) $10,500
Machine Hours 180 $120 (180*$120) 21,600
Number of Batches 5 $30 (5*$30) 150
Direct Labor Hours 650 $12 (650*$12) 7,800
Total overhead allocated to 1,000 laser printers = $40,050
Unit overhead cost for the printers = $40.05 ($40,050/1,000)
The following information applies to the questions displayed below.]
Selected comparative financial statements of Korbin Company follow.
KORBIN COMPANY
Comparative Income Statements
For Years Ended December 31, 2017, 2016, and 2015
2017 2016 2015
Sales $ 555,000 $340,000 $278,000
Cost of goods sold 283,500 212,500 153,900
Gross profit 271,500 127,500 124,100
Selling expenses 102,900 46,920 50,800
Administrative expenses 50,668 29,920 22,800
Total expenses 153,568 76,840 73,600
Income before taxes 117,932 50,660 50,500
Income taxes 40,800 10,370 15,670
Net income $ 77,132 $40,290 $34,830
KORBIN COMPANY
Comparative Balance Sheets
December 31, 2017, 2016, and 2015
2017 2016 2015
Assets
Current assets $ 52,390 $37,924 $51,748
Long-term investments 0 500 3,950
Plant assets, net 100,000 96,000 60,000
Total assets $152,390 $134,424 $115,698
Liabilities and Equity
Current liabilities $22,800 $19,960 $20,300
Common stock 72,000 72,000 60,000
Other paid-in capital 9,000 9,000 6,000
Retained earnings 48,590 33,464 29,398
Total liabilities and equity 152,390 $134,424 $115,698
Complete the table below to calculate income statement datain common size percents.
Korbin company
common size comparative income statement
For year ended December 31 2017,2016,2015
2017 2016 2015
Sales
Cost of goods sold
Gross profit
Selling expenses
Administrative expenses
Total expenses
Income before taxes
Income tax expense
Net income
Answer:
KORBIN COMPANY
Common Size Comparative Income Statements
For Years Ended December 31, 2017, 2016, and 2015
2017 % 2016 % 2015 %
Sales $ 555,000 100 $340,000 100 $278,000 100
Cost of goods sold 283,500 51.1 212,500 62.5 153,900 55.4
Gross profit 271,500 48.9 127,500 37.5 124,100 44.6
Selling expenses 102,900 18.5 46,920 13.8 50,800 18.3
Administrative expenses 50,668 9.1 29,920 8.8 22,800 6.0
Total expenses 153,568 27.7 76,840 22.6 73,600 26.5
Income before taxes 117,932 21.2 50,660 14.9 50,500 18.2
Income taxes 40,800 7.4 10,370 3.1 15,670 5.6
Net income $ 77,132 13.9 $40,290 11.9 $34,830 12.5
Explanation:
a) Data and Calculations:
KORBIN COMPANY
Common Size Comparative Income Statements
For Years Ended December 31, 2017, 2016, and 2015
2017 % 2016 % 2015 %
Sales $ 555,000 100 $340,000 100 $278,000 100
Cost of goods sold 283,500 51.1 212,500 62.5 153,900 55.4
Gross profit 271,500 48.9 127,500 37.5 124,100 44.6
Selling expenses 102,900 18.5 46,920 13.8 50,800 18.3
Administrative expenses 50,668 9.1 29,920 8.8 22,800 6.0
Total expenses 153,568 27.7 76,840 22.6 73,600 26.5
Income before taxes 117,932 21.2 50,660 14.9 50,500 18.2
Income taxes 40,800 7.4 10,370 3.1 15,670 5.6
Net income $ 77,132 13.9 $40,290 11.9 $34,830 12.5
KORBIN COMPANY
Comparative Balance Sheets
December 31, 2017, 2016, and 2015
2017 2016 2015
Assets
Current assets $ 52,390 $37,924 $51,748
Long-term investments 0 500 3,950
Plant assets, net 100,000 96,000 60,000
Total assets $152,390 $134,424 $115,698
Liabilities and Equity
Current liabilities $22,800 $19,960 $20,300
Common stock 72,000 72,000 60,000
Other paid-in capital 9,000 9,000 6,000
Retained earnings 48,590 33,464 29,398
Total liabilities and equity $152,390 $134,424 $115,698
b) Korbin's common size income statement shows each line item expressed as a percentage of the revenue or sales value. This analysis of individual financial statement items is also known as a vertical analysis of the financial statement, making line items comparison to a common base easy.
The expected average rate of return for a proposed investment of $5,330,000 in a fixed asset, using straight-line depreciation, with a useful life of 20 years, no residual value, and an expected total net income of $15,990,000 over the 20 years is (round to two decimal points). a.1.50% b.15.00% c.60.00% d.30.00%
Answer:
The Expected Average Rate of Return for the proposed investment is 30%.
Explanation:
This can be calculated as follows:
Average Investment = (Initial Cost + Residual Value) / 2 = ($5,330,000 + $0) / 2 = $2,665,000
Expected average annual income = Expected total net income / Useful life = $15,990,000 / 20 = $799,500
Expected Average Rate of Return = Estimated Average Annual Income / Average Investment = $799,500 / $2,665,000 = 0.30, or 30%
Marsha is 23 years old and single. She cannot be claimed as a dependent by another taxpayer. Marsha earned wages of $18,500 and had $1,500 of federal income tax withholding in tax year 2020. Marsha gave birth to Shelby on November 10, 2020. Marsha paid all the cost of keeping up a home and support for Shelby. Shelby and Marsha are U.S. citizens and have valid Social Security numbers. Marsha filed Single with no dependents on her 2019 tax return and received a $1,200 Economic Impact Payment in May 2020.
1. Which of the following statements is true?
a. Marsha is required to file a tax return.
b. Marsha is not required to file a tax return, but should file a tax return to claim a
refund of her federal income tax withholding.
c. Marsha does not qualify for the earned income credit because she is under the
age of 25.
d. Both a and c.
2. Marsha qualifies for the recovery rebate credit of $500 for Shelby.
Note: Congress may have enacted additional legislation that will affect taxpayers
after this publication went to print. Please answer questions based on the information
provided in Publication 4491, VITA/TCE Training Guide and Publication 4012, VITA/
TCE Resource Guide.
a. True
b. False
Answer:
1. d. Both a and c.
2. True.
Explanation:
Marsha and Shelby both are U.S. citizen. Marsha can claim Income credit once she is 25 years older up to 65 years of age. The individual below 25 years of age cannot claim income credit according to the tax law prevailing in U.S.
The manager at the Overton Hotel in Lubbock believes that the success of the Texas Tech Red Raider Basketball team has an impact on the occupancy rate at the hotel during the first quarter of every year. Below are the number of victories for the Red Raiders in during the last three seasons and the hotel occupancy rate. This year, (year 4) the Red Raiders Basketball Team is expected to have another phenomenal season and win 31 games and the manager at the Overton has asked you to determine their first quarter occupancy rate for the upcoming year (year 4) using associative forecasting, given that the SLOPE = 0.0474 and the INTERCEPT =0.4743
Year Wins First Quarter Occupancy Rate
1 15 60%
2 28 90%
3 31 93%
a. 93.4%
b. 88.1%
c. 91.7%
d. 36.9%
e. 90.0%
Answer: 99.51%
Explanation:
This is a linear regression problem.
The relationship between the success of the team and the occupancy rate is in the form:
y = mx + c
y = occupancy rate
m = slope
x = number of games
c = slope
Intercept is supposed to be negative in question:
= 0.0474 * 31 + (-0.4743)
= 99.51%
Options are most probably for a variant of this question.
Lowell Corporation paid $80,000 to acquire all of Boston Company's net assets. Boston reported assets with a book value of $60,000 and fair value of $98,000 and liabilities with a book value and fair value of $23,000 on the date of combination. Lowell also paid $3,000 to a search firm for finder's fees related to the acquisition. What amount will be recorded as goodwill by Lowell Corporation while recording its investment in Boston
Answer:
Lowell Corporation
The amount that will be recorded as goodwill by Lowell Corporation to record its investment in Boston is:
= $5,000.
Explanation:
a) Data and Calculations:
Investment in Boston Company = $83,000
Fair value of assets = $98,000
Fair value of liabilities 23,000
Net value of assets = $75,000
Goodwill = $5,000 ($80,000 - $75,000)
b) Acquired Goodwill is the difference between the cost of purchasing Boston Company ($80,000) and the net identifiable assets of Boston Company ($75,000). The net identifiable assets are calculated by subtracting the fair value of the liabilities from the fair value of the assets.
makes a product with the following standard costs: Standard Quantity or Hours Standard Price or Rate Standard Cost Per Unit Direct materials 6.7 pounds $ 7.20 per pound $ 48.24 Direct labor 0.6 hours $ 26.00 per hour $ 15.60 Variable overhead 0.6 hours $ 4.20 per hour $ 2.52 In June the company's budgeted production was 3600 units but the actual production was 3700 units. The company used 22,350 pounds of the direct material and 2310 direct labor-hours to produce this output. During the month, the company purchased 25,600 pounds of the direct material at a cost of $172,180. The actual direct labor cost was $57,221 and the actual variable overhead cost was $9531. The company applies variable overhead on the basis of direct labor-hours. The direct materials purchases variance is computed when the materials are purchased. The variable overhead rate variance for June is:
Answer:
$171 Favorable
Explanation:
Actual Variable Overhead Rate = Actual variable overhead cost / Actual direct labor-hours used
Actual Variable Overhead Rate = $9,531 / 2,310
Actual Variable Overhead Rate = $4.125974
Variable overhead rate variance = (Standard rate - Actual rate) * Actual Direct labor hours
Variable overhead rate variance = ($4.20 - $4.125974) * 2310
Variable overhead rate variance = $0.074026 * 2310
Variable overhead rate variance = $171 Favorable
A semiprofessional baseball team near your town plays two home games each month at the local baseball park. The team splits the concessions 50/50 with the city but keeps all the revenue from ticket sales. The city charges the team $500 each month for the three-month season. The team pays the players and manager a total of $2500 each month. The team charges $10 for each ticket, and the average customer spends $6 at the concession stand. Attendance averages 100 people at each home game.
The team earns an average of $_________ in revenue for each game and $_____________ of revenue each season. With total costs of $___________ each season, the team finishes the season with $____________ of profit.
Answer: See explanation
Explanation:
Amount charges for each ticket = $10
The average customer spends $6 at the concession stand but the team splits the concessions 50/50 with the city. Therefore, the team gets $6/2 = $3 from concession.
Revenue gotten per customer = $10 + $3 = $13
Average attendance = 100
Total revenue per game = $13 × 100 = $1300
Since there are 2 matches every months and it's a three months season, the number of home matches player will be: = 2 × 3 = 6. Therefore, total revenue will be:
= $1300 × 6
= $7800
The city charges the team $500 each month for the three-month season. The team pays the players and manager a total of $2500 each month. Therefore, Total cost = (500 × 3) + (2500 × 3)
= 1500 + 7500
= 9000
Profit/Loss = Revenue - Cost
= 7800 - 900
= 1200
Loss of $1200
The team earns an average of ($1300) in revenue for each game and ($7800) of revenue each season. With total costs of ($9000) each season, the team finishes the season with ($1200) as loss.
Peyton Manufacturing has the following data:
Work-in-process inventory, January 1, 20x8 $ 57,000
Work-in-process inventory, December 31, 20x8 62,500
Conversion costs during the year 429,000
If direct materials used during the year were $149,000, what was cost of goods manufactured?
a. $572,500.
b. $154,500.
c. $567,000.
d. $423,500.
e. None of the answers is correct.
Answer:
a. $572,500
Explanation:
With regards to the above information, cost of goods manufactured is computed as;
= Conversion cost + Direct materials used - (Change in WIP balances)
= $429,000 + $149,000 - ($62,500 - $57,000)
= $429,000 + $149,000 - $5,500
= $572,500
Based on the direct materials, conversion and other costs, the cost of goods manufactured was $572,500.
Cost of goods manufactured is calculated as:
= Beginning work in process + Total manufacturing cost - Ending Work in process
Total manufacturing cost:
= Conversion cost + Direct material
= 429,000 + 149,000
= $578,000
Cost of goods manufactured is therefore:
= 57,000 + 578,000 - 62,500
= $572,500
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Trade credit and discounts are important strategies used by firms in the daily operations of their business. Calculate the cost of a firm's trade credit in each of the following situations (answers should be carried out to 2 decimal points, e.g. 35.78%, not 35% or 36% !) a) 2/12, Net 32 b) 3/15, Net 36 c) 2.5/18, Net 35 d) 2.25/20, Net 38
Answer:
When a discount is given as 2/12, Net 32, it means that the customer is allowed a 2% discount if they pay off their purchase in 12 days. If they don't, they would have to pay off the full amount in 32 days.
The Cost of a firm's credit is calculated by the formula:
= Discount %/ ( 100% - Discount %) * (360/Allowed payment days - Discount days)
a. 2 / 12, Net 32
= (2%/ (100 - 2% )) * (360 / (32 - 12))
= 36.73%
b) 3/15, Net 36
= (3%/ (100 - 3% )) * (360 / (36 - 15))
= 53.02%
c) 2.5/18, Net 35
= (2.5%/ (100 - 2.5% )) * (360 / (35 - 18))
= 54.30%
d) 2.25/20, Net 38
= (2.25%/ (100 - 2.25% )) * (360 / (38 - 20))
= 46.04%
WILL MARK BRAINLY!
Serena is a sales representative for a soda company. What would be one task that Serena might perform as part of her job?
Writing a new commercial for the company
Managing the sales staff for the entire company
Analyzing what markets like diet soda
Calling on restaurants and bars to sell soda contracts
Answer:
Calling on restaurants and bars to sell soda contracts
Explanation:
Analyzing the information above, it is correct to say that the task that Serena could perform as part of her job as a sales representative would be to visit restaurants and bars to sell soda contracts, as this is the main function of the sales representative, to negotiate on behalf of consequently gain new customers.
It is necessary for a sales representative to have communication skills, be a good speaker and have a deep knowledge of the company and its products and services, so that it can pass all information correctly to potential customers about the benefits of the products.
Answer:
calling on restaurants and bars to sell soda contracts
Explanation:
k12 quiz
On October 29, 2012, Lobo Co. began operations by purchasing razors for resale. Lobo uses the perpetual inventory method. The razors have a 90-day warranty that requires the company to replace any nonworking razor. When a razor is returned, the company discards it and mails a new one from Merchandise Inventory to the customer. The company's cost per new razor is S20 and its retail selling price is S75 in both 2012 and 2013. The manufacturer has advised the company to expect warranty costs to equal 8% of dollar sales. The following transactions and events occurred.
2012
Nov. 11 Sold 105 razors for S7,875 cash.
30 Recognized warranty expense related to November sales with an adjusting entry.
Dec. 9 Replaced 15 razors that were returned under the warranty.
16 Sold 220 razors for S16,500 cash.
29 Replaced 30 razors that were returned under the warranty.
31 Recognized warranty expense related to December sales with an adjusting entry.
2013
Jan. 5 Sold 150 razors for S11,250 cash.
17 Replaced 50 razors that were returned under the warranty.
31 Recognized warranty expense related to January sales with an adjusting entry.
Required:
a. Prepare journal entries to record these transactions and adjustments for 2012 and 2013.
b. How much warranty expense is reported for November 2012 and for December 2012?
c. How much warranty expense is reported for January 2013?
d. What is the balance of the Estimated Warranty Liability account as of December 31, 2012?
Answer:
a. See the attached excel file for the journal entries for 2012 and 2013.
b. We have the following:
Warranty Expense reported for November 2012 = $630
Warranty Expense reported for December 2012 = $1,320
Total Warranty Expense reported for 2012 = $1,950
c. Warranty Expense reported for January 2013 = $900
d. Balance of the Estimated Warranty Liability account as of December 31, 2012 = $1,050
Explanation:
a. Prepare journal entries to record these transactions and adjustments for 2012 and 2013.
Note: See the attached excel file for the journal entries for 2012 and 2013.
In the attached excel, the following workings are used:
w.1: Cost of Goods Sold = Units sold * Cost per unit = 105 * $20 = $2,100
w.2: Warranty Expense = Sales * 8% = $7,875 * 8% = $630
w.3: Estimated Warranty Liability = Units replaced * Cost per unit = 15 * $20 = $300
w.4: Cost of Goods Sold = Units sold * Cost per unit = 220 * $20 = $4,400
w.5: Estimated Warranty Liability = Units replaced * Cost per unit = 30 * $20 = $600
w.6: Warranty Expense = Sales * 8% = $16,500 * 8% = $1,320
w.7: Cost of Goods Sold = Units sold * Cost per unit = 150 * $20 = $3,000
w.8: Estimated Warranty Liability = Units replaced * Cost per unit = 50 * $20 = $1,000
w.9: Warranty Expense = Sales * 8% = $11,250 * 8% = $900
b. How much warranty expense is reported for November 2012 and for December 2012?
Warranty Expense reported for November 2012 = Sales for November 2012 * 8% = $7,875 * 8% = $630
Warranty Expense reported for December 2012 = Sales for December 2012 * 8% = $16,500 * 8% = $1,320
Total Warranty Expense reported for 2012 = Reported Warranty Expense for November 2012 + Reported Warranty Expense for December 2012 = $630 + $1,320 = $1,950
c. How much warranty expense is reported for January 2013?
Warranty Expense reported for January 2013 = Sales for January 2013 * 8% = $11,250 * 8% = $900
d. What is the balance of the Estimated Warranty Liability account as of December 31, 2012?
Total Warranty Expense reported for 2012 = $1,950
Value of returned 15 razors replaced on Dec. 9, 2012 = Units replaced * Cost per unit = 15 * $20 = $300
Value of returned 30 razors replaced on Dec. 29, 2012 = Units replaced * Cost per unit = 30 * $20 = $600
Total value of returned razors replaced in 2012 = Value of returned 15 razors replaced on Dec. 9, 2012 + Value of returned 30 razors replaced on Dec. 29, 2012 = $300 + $600 = $900
Therefore, we have:
Balance of the Estimated Warranty Liability account as of December 31, 2012 = Total Warranty Expense reported for 2012 - Total value of returned razors replaced in 2012 = $1,950 - $900 = $1,050
Brown Cow Dairy uses the aging approach to estimate bad debt expense. The ending balance of each account receivable is aged on the basis of three time periods as follows:
(1) not yet due, $13,000;
(2) up to 120 days past due, $6,000; and
(3) more than 120 days past due, $5,500. Experience has shown that for each age group, the average loss rate on the amount of the receivables at year-end due to uncollectibility is
(1) 2 percent,
(2) 12 percent, and
(3) 30 percent, respectively.
At December 31 (end of the current year), the Allowance for Doubtful Accounts balance is $710 (credit) before the end-of-period adjusting entry is made. Data during the current year follow:
a. During December, an Account Receivable (Patty's Bake Shop) of $660 from a prior sale was determined to be uncollectible; therefore, it was written off immediately as a bad debt.
b. On December 31, the appropriate adjusting entry for the year was recorded.
Required:
1. Give the required journal entries for the two items listed above.
2. Show how the amounts related to Accounts Receivable and Bad Debt Expense would be reported on the income statement and balance sheet for the current year. Disregard income tax considerations.
Answer:
1. Journal Entries :
a. Bad Debt Expense (Dr.) $660
Accounts Receivable (Cr.) $660
2. Accounts receivable Ending Balance :
Not yet due $13,000 * 98% = 12,740
Up to 120 days $6000 * 88% = 5280
More than 120 days $5500 * 70% = 3850
Totals = 21,870
Bad debt expense Ending balance :
Not yet due $13,000 * 2% = $260
Up to 120 days $6000 * 12% = $720
More than 120 days $5500 * 30% = $1,650
Totals = 2630
Explanation:
Bad debt expense is the expected uncollectible amount from accounts receivable. Usually company maintains an allowance for doubtful debt. Brown cow dairy uses aging approach for estimating bad debts of the company. The uncollectible amount is expensed out in Income Statement and asset is decreased in Balance Sheet.
On October 28, 2018, Mercedes Company committed to a plan to sell a division that qualified as a component of the entity according to GAAP regarding discontinued operations and was properly classified as held for sale on December 31, 2018, the end of the company's fiscal year.
The division's loss from operations for 2018 was $2,000,000. The division's book value and fair value less cost to sell on December 31 were $3,000,000 and $2,500,000, respectively. What before-tax amount(s) should Mercedes report as loss on discontinued operations in its 2018 income statement?
Answer:
$2,500,000
Explanation:
Calculation for What before-tax amount(s) should Mercedes report as loss on discontinued operations in its 2018 income statement
Division's loss from operations for 2018 $2,000,000
Add division's book value and fair value less cost to sell $500,000
($3,000,000- $2,500,000)
Loss on discontinued operations in 2018 $2,500,000
Therefore what before-tax amount(s) should Mercedes report as loss on discontinued operations in its 2018 income statement is $2,500,000
The Young Company has gathered the following information for a unit of its most popular product: Direct materials $ 12 Direct labor 6 Overhead (40% variable) 10 Cost to manufacture 28 Desired markup (50%) 14 Target selling price $ 42 The above cost information is based on 10,000 units. A distributor has offered to buy 2,000 units at a price of $32 per unit. This special order would not disturb regular sales. Special packaging and other selling expenses would be an additional $0.50 per unit for the special order. If the special order is accepted, Young's operating profits will increase by:
Answer:
$19,000
Explanation :
Results from Special Order :
Sales (2,000 x $32) $64,000
Less Variable Costs ($22.50 x 2,000) ($45,000)
Contribution $19,000
Therefore,
Young's operating profits will increase by $19,000
Natalia needs to create a subreport to provide information about suppliers for a particular category of item in a table. What should she do?
Choose from a list.
Define a list.
Show suppliers for each record using foreign/primary key relationship.
Create a data report that shows the entire list of suppliers.
Answer:
C
Explanation:
Just took it
Answer:
Show suppliers for each record using foreign/primary key relationship.
Explanation:
A company produces a single product. Variable production costs are $13.20 per unit and variable selling and administrative expenses are $4.20 per unit. Fixed manufacturing overhead totals $48,000 and fixed selling and administration expenses total $52,000. Assuming a beginning inventory of zero, production of 5,200 units and sales of 4,200 units, the dollar value of the ending inventory under variable costing would be:
Answer:
the ending inventory is $13,200
Explanation:
The computation of the dollar value of the ending inventory under variable costing is shown below:
= Variable production cost per unit × difference in units
= $13.20 per unit × (5,200 units - 4,200 units)
= $13.20 per unit × 1,000 units
= $13,200
hence, the ending inventory is $13,200
At Eady Corporation, maintenance is a variable overhead cost that is based on machine-hours. The performance report for July showed that actual maintenance costs totaled $10,110 and that the associated rate variance was $310 unfavorable. If 5,600 machine-hours were actually worked during July, the standard maintenance cost per machine-hour was:
Answer:
"$1.75" is the appropriate approach.
Explanation:
The given values are:
Rate variance
= $310 (unfavorable)
Actual maintenance costs
= $10,110
Machine hours
= 5,600
Now,
⇒ [tex]Rate \ variance=(5600\times Standard \ maintenance \ cost \ per \ machine \ hour)-(Actual \ maintenance \ cost)[/tex]
On substituting the values, we get
⇒ [tex]-310=(5600\times Standard \ maintenance \ cost \ per \ machine \ hour)-10110[/tex]
⇒ [tex]Standard \ maintenance \ cost \ per \ machine \ hour=\frac{10110-310}{5600}[/tex]
⇒ [tex]=\frac{9,800}{5600}[/tex]
⇒ [tex]=1.75[/tex] ($)
Sheridan Enterprises reported cost of goods sold for 2020 of $1,322,900 and retained earnings of $4,854,000 at December 31, 2020. Sheridan later discovered that its ending inventories at December 31, 2019 and 2020, were overstated by $106,470 and $36,820, respectively. Determine the corrected amounts for 2020 cost of goods sold and December 31, 2020, retained earnings. Corrected cost of goods sold $enter a dollar amount Corrected 12/31/20 retained earnings $enter a dollar amount
Answer:
See below
Explanation:
With regard to the above information,
1. Corrected cost of goods sold is computed as
= Cost of goods sold + Overstated ending inventories 2019 - overstated ending inventories 2020
= $1,322,900 + $106,470 - $36,820
= $1,253,250
2. Corrected 12/31/2020 retained earnings is computed as
= Retained earnings DEC 2020 - overstated ending inventories 2020
= $4,854,000 - $36,820
= $4,817,180
Gibson Cinemas is considering a contract to rent a movie for $2,200 per day. The contract requires a minimum one-week rental period. Estimated attendance is as follows: Monday Tuesday Wednesday Thursday Friday Saturday Sunday 420 340 190 570 1,030 1,030 490 Required Determine the average cost per person of the movie rental contract separately for each day. Suppose that Gibson chooses to price movie tickets at cost as computed in Requirement a plus $2.00. What price would it charge per ticket on each day of the week
Answer:
$5.78
Explanation:
Reasonable price = [(Contract cost per day*Number of days) / (Total tickets sold)] + Profit
Reasonable price = [$2,200 * 7 / (420+340+190+570+1,030+1,030+490)] + $2
Reasonable price = [$15,400/4070} + $2
Reasonable price = $3.7838 + $2
Reasonable price = $5.7838
Reasonable price = $5.78
Jennifer couldn't believe her bad luck. The business planning cycle at Allworld Insurance was almost over. The only thing her boss had asked her to do was to make copies of four sets of final plans. Each set contained a different level of planning and each was supposed to be delivered to a different manager for review. But now those documents are all over the floor. Everything has to be back in the right order as quickly as possible. Knowing that you are a planning expert, Jennifer asks for your help. She tells you that Allworld Insurance uses an aligned, or cascading, goal system. You can expect to see each set of plans now in a logical way throughout the company.
Chose the best plan for each of the following statement:
(1) We are known for our operating efficiency and for reducing insurance costs for our customers.
(2) The Human Resource Division will reduce the overall cost of fulfilling employment requisitions by eliminating the use of outside recruiting agencies.
(3) We will eliminate redundancies throughout the corporation to decrease our overall expenses by 20%.
(4) Each human resource employee will use advertisements and personal networking to attract at least 10 qualified applicants per open position.
(A) Tactical
(B) Mission statement
(C) Operational
(D) Strategic
Answer:
Allworld Insurance
1. Mission Statement
2. Tactical
3. Strategic
4. Operational
Explanation:
(A) Tactical plans include specific actions to enable the achievement of company-wide strategies.
(B) Mission statement describes the goal of an entity. For example, a mission statement can describe an entity as renowned for its efficiency and cost reduction for its customers.
(C) Operational plans cover daily and routine activities at the individual level of the organization.
(D) Strategic plans embrace the whole organization and establishes how organizational goals will be achieved.
Which of the following typically occurs during an expansionary phase of a business cycle?
A. Nominal interest rates decrease.
B. Income taxes decrease.
C. The price level decreases.
D. Government transfer payments increase.
E. Employment increases.
Answer:
E. Employment increases.
Explanation:
The correct answer is - E. Employment increases.
Virginia Enterprises makes all purchases on account, subject to the following payment pattern: Paid in the month of purchase: 30% Paid in the first month following purchase: 65% Paid in the second month following purchase: 5% If purchases for April, May, and June were $200,000, $160,000, and $250,000, respectively, what was the firm's budgeted payables balance on June 30
Answer:
$18,000
Explanation:
Prepare an Accounts Payables Budget
The firm's budgeted payables balance on June is $18,000
Kentucky Lumber and MillWork Company contracted to supply Rommell Company millwork for use in the construction of a school building. While the work was in progress the Kentucky Lumber mill was destroyed by fire. For two months thereafter, Kentucky Lumber and Millwork Company supplied Rommell with mill work purchased by it from a third party. The Kentucky Lumber mill did not wish to continue this plan and declared that the contract was ended. Rommell Company brought an action against Kentucky Lumber to enforce the contract. How will the court decide?
Answer:
Kentucky can gain advantage since it has not breached any terms of the contract.
Explanation:
Kentucky Lumber will be beneficiary of the decision since it is Rommel company who is ending up the contract but Kentucky Lumber is willing to continue the service according to the terms of the contract. Kentucky mill work was destroyed but it bought the equipment from a third party to continue providing the service according to the contract terms.
Answer:
Kentucky Lumber and MillWork Company Vs Rommell Company
Most likely, the court will decide that Kentucky should continue to perform its contract obligations. We note that following the destruction of the mill by fire, Kentucky never invoked the clause of force majeure. It continued to fulfill its obligations for a period of two months.
Before the case comes to the court, Kentucky should have requested for a renegotiation of the contract price with Rommell if it had discovered that the cost of buying from third-party suppliers could prevent it from continuing with the contract. Note that the fulfilment of a contract is not based on mere wishes but on facts, supported by the prevailing circumstances.
Explanation:
The court will decide to answer Rommell's prayers for an equitable relief by forcing Kentucky Mill to continue with the specific performance of the contract or to pay damages to Rommell for losses arising from the failure of Kentucky to fulfil the contract.
Richards Corporation uses the weighted-average method of process costing. The following information is available for October in its Fabricating Department:
Units:
Beginning Inventory: 94,000 units, 80% complete as to materials and 25% complete as to conversion.
Units started and completed: 278,000.
Units completed and transferred out: 372,000.
Ending Inventory: 37,000 units, 40% complete as to materials and 15% complete as to conversion.
Costs:
Costs in beginning Work in Process - Direct Materials: $47,200.
Costs in beginning Work in Process - Conversion: $89,700.
Costs incurred in October - Direct Materials: $759,920.
Costs incurred in October - Conversion: $929,300.
Required:
Calculate the cost per equivalent unit of materials.
Answer:
386,800 units
Explanation:
Note that, Richards Corporation uses the weighted-average method of process costing.
This method focuses on units completed and units in ending work in process.
therefore,
Equivalent units calculation
Materials = 372,000 x 100 % + 37,000 x 40 % = 386,800 units
Therefore, the cost per equivalent unit of materials is 386,800 units.
A nation's GDP at purchasing power parity (PPP) exchange rates refers to:_____.
a. the value of the GDP divided by the population of the country.
b. the value of all the goods and services produced by a country in a single year.
c. the value of the GDP adjusted for purchasing power.
d. a country's average achievements in health, knowledge, and standard of living.
e. the sum value of all goods and services produced in the country valued at prices prevailing in the United States.
Answer:
c
Explanation:
You just won a lottery that promises to pay you $1 million exactly 10 years from today. Because the $1 million payment is guaranteed by the state in which you live, opportunities exist to sell the claim today for an immediate lump-sum cash payment. What is the least you will sell your claim for if you could earn 8.73 % on similar-risk investments during the 10-year period
Answer:
The minimum price is $434,214.74.
Explanation:
Giving the following information:
Future Value= $1,000,000
Number of periods= 10 years
Discount rate= 8.73%
The minimum price of the prize is the present value of the payment. To calculate the present value, we need to use the following formula:
PV= FV /(1 + i)^n
PV= 1,000,000 / (1.087^10)
PV= $434,214.74
The minimum price is $434,214.74.