Answer:
Present value = $5,803.50 (Approx)
Explanation:
Given:
Future value = $10,000
Number of year = 10
Rate of return = 7% = 0.07
Find:
Present value = ?
Computation:
[tex]Present\ value = \frac{Future\ value}{(1+Rate\ of\ return)^{Number\ of\ year}} \\\\Present\ value = \frac{10,000}{(1+0.07)^{10}} \\\\Present\ value = \frac{10,000}{1.96715136} \\\\Present\ value = 5,083.49[/tex]
Present value = $5,803.50 (Approx)
Answer:
$5083.49
Explanation:
Given: future value =$ 10,000
present value = future value/(1+r)^t
= 10000/(1+0.07)^10
= $5083.49
the most you would be willing to pay for this investment today based on this information =$5083.49
Last winter, your service fraternity volunteered at an elementary school in a lower income neighborhood in your city. You noticed many of the children did not have hats or mittens to wear in the cold weather. You decided to start a business that will provide hats and mittens to children in need. You quickly realize you will need help in this venture and set out to find a cofounder. Which of the following characteristics and traits would you like to see in a cofounder?
A) Persistent.
B) Economically motivated.
C) Hard working.
D) Creative.
Answer:
A) Persistent.
C) Hard-working.
D) Creative.
Explanation:
In the given situation, it is mentioned that an individual wants to start a business that deals in hats and mittens so the needs of the children could be fulfilled. But for that, we need to find out a cofounder that should be have following traits and characteristics
a. Persistent: The person should be trying his best o achieve it rather than escape from it
b. he should be hardworking so that every child's need could be fulfillled
c. He should be creative or we can say who bring innovative ideas to the firm so that the people get attracted to the company products so that the sale of the firm could rise up
Your company rents computers to local businesses and schools. You have 1,600 computers with a book value of $163,000. As a result of changing technology, your computers are more difficult to rent so you must drastically reduce your rental price, which causes a decrease in estimated future cash flows. The fair value of the computers is estimated to be $123,500 because of their outdated technology. Your company should report an asset impairment loss of:
Answer:
Your company should report an asset impairment loss of : $39,500
Explanation:
Impairment loss is recognized when the Carrying Amount of an Asset exceed its Recoverable Amount.
Carrying Amount
Carrying Amount is the Cost of Asset less its Accumulated Depreciation
Carrying Asset of Computers = $163,000
Recoverable Amount
Recoverable Amount is the Higher of :
Value in Use of Asset orFair Value less Cost to Sale the AssetIn this case the Recoverable amount is $123,500
Analysis for impairment loss
Carrying Amount : $163,000 > Recoverable Amount : $123,500,
Thus we have an impairment situation.
Impairment loss is $39,500 ($163,000 - $123,500)
Hemming uses a periodic inventory system. Assume that ending inventory is consists of 45 units from the March 14 purchase, 75 units from the July 30 purchase, and all 100 units from the October 26 purchase. Using the specific identification method, calculate the (a) the cost of goods sold and (b) the gross profit.
Question:
Use the following information for the Exercises below.
Hemming CO. reported the following current year purchases and sales for its only product.
Date Activities Units Acquired at Cost Units Sold at Retail
Jan. 1 Beginning inventory 200 units at $10 = $2,000
Jan. 10 Sales 150 units at $40
Mar. 14 Purchase 350 units at $15= 5,250
Mar. 15 Sales 300 units at $40
July. 30 Purchase 450 units at $20 = 9,000
Oct. 5 Sales 430 units at $40
Oct. 26 Purchase 100 units at 25 = 2,500
Totals 1,100 units $18,750
Required:
Hemming uses a periodic inventory system. Assume that ending inventory is consists of 45 nits from the March 14 purchase, 75 units from the July 30 purchase, and all 100 units from the October 26 purchase. Using the specific identification method calculate the (a) cost of goods sold and (b) the gross profit.
Answer:
a) Cost of goods sold = Cost of goods available for sale minus ending inventory = $18,750 - $4,675 = $14,075
b) Gross profit = Sales - Cost of goods sold
= $35,200 - 14,075 = $21,125
Explanation:
a) Sales:
Jan. 10 Sales, 150 units at $40 = $6,000
Mar. 15 Sales, 300 units at $40 = 12,000
Oct. 5 Sales, 430 units at $40 = 17,200
Total sales = $35,200
b) Determination of Ending Inventory:
March 14 purchase 45 units x $15 = $675
July 30 purchase 75 units x $20 = $1,500
October 26 purchase 100 units x $25 = $2,500
Total cost of Ending Inventory $4,675
c) Specific Identification Method:
These inventory costing methods are used to ascertain the cost of goods sold and the ending inventory values. Using periodic inventory, the valuation is done at the end of the period. They are FIFO (First-In-First-Out) method, LIFO (Last-In-First-Out) method, weighted average method, and specific identification method. These methods can be applied under perpetual inventory system or periodic inventory system. The difference is in the timing of the valuation activity.
During the year, RIT Corp. had sales of $565,600. Costs of goods sold, and depreciation expenses were $476,000, and $42,800, respectively. In addition, the company had an interest expense of $112,000 and a tax rate of 22 percent. What is the operating cash flow for the year
Answer:
Cash flows from Operating activities is $30800
Explanation:
The first thing that we will calculate is the Net Profit for the year thereafter we will calculate the operating cash flow for the year.
Step 1: Calculate is the Net Profit for the Year
Sales $5,65,600
Less: Cost of Goods Sold ($4,76,000)
Gross margin $89,600
Less: Admin and Selling expenses ($58800)
Less: Depreciation ($42,800)
Less: Interest expense ($112,000)
Net income before tax (124000)
Less: tax -
Net income after tax ($1,24,000)
Step 2: Now we will calculate the Cash flow from Operating activities
Net income after tax ($1,24,000)
Add: Depreciation $42,800
Add: Interest $1,12,000
Cash flow from Operating activities $30800
A government worker surveys a number of households and comes up with the following information: there were a total of 90 people in the households, 10 of the people were children under 16, 10 of the people were retired but still capable of working, 35 people had full-time jobs, 5 had part-time jobs, 5 were stay-at-home parents, 5 were full-time students over the age of 16, 5 were disabled people who could not work, 10 people had no job but were looking for jobs, and there were 5 people who wanted a job but were not looking for a job.
According to the information in the survey, the unemployment rate is:_______
Answer:
27%
Explanation:
Number of Persons in the Household = 90
Neither Employed Nor Unemployed
Children Under 16 =10Disabled = 5Retired =10Stay at Home Parents = 5Full Time Students over the age of 16= 5Total =35
Unemployed
10 people had no job but were looking for jobs5 people who wanted a job but were not looking for a job.Total =15Employed
35 people had full-time jobs5 had part-time jobsTotal =35+5=40
Total Labour Force = Unemployed +Employed = 40+15 =55
Unemployment Rate = (Unemployed People / Total Labor) x 100
=15/55 X 100
=27%
According to the information in the survey, the unemployment rate is: 27%
Country Furniture Company manufactures furniture at its​ Akron, Ohio, factory. Some of its costs from the past year​ include: Depreciation on sales office: ​ $9,700 Depreciation on factory equipment 16,700 Factory supervisor salary 50,800 Sales commissions 23,900 Lubricants used in factory equipment 3,300 Insurance costs for factory 21,100 Wages paid to maintenance workers 115,900 Fabric used to upholster furniture 10,300 Freightminusin ​(on raw​ materials) 3,300 Costs of delivery to customers 9,100 Wages paid to assemblyminusline workers 115,700 Lumber used to build product 82,900 Utilities in factory 54,600 Utilities in sales office 26,600 Conversion costs for Country Furniture Company totaled:_______ a. $378,100.b. $486,500.c. $526,500.d. $510,500.
Answer:
just asking. is this even a question or a passage for us to read. im confused someone help me out here
Explanation:
Exercise 14-09 (Part Level Submission) On June 30, 2020, Monty Company issued $4,360,000 face value of 13%, 20-year bonds at $4,688,000, a yield of 12%. Monty uses the effective-interest method to amortize bond premium or discount. The bonds pay semiannual interest on June 30 and December 31. Collapse question part (a) Prepare the journal entries to record the following transactions. (Round answer to 0 decimal places, e.g. 38,548. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually.) (1) The issuance of the bonds on June 30, 2020. (2) The payment of interest and the amortization of the premium on December 31, 2020. (3) The payment of interest and the amortization of the premium on June 30, 2021. (4) The payment of interest and the amortization of the premium on December 31, 2021. No. Date Account Titles and Explanation Debit Credit (1) June 30, 2020 (2) December 31, 2020 (3) June 30, 2021 (4) December 31, 2021 Click if you would like to Show Work for this question: Open Show Work
Answer:
1. June 30,2020
Dr Cash $4,688,000
Cr Bonds payable $4,360,000
Cr Premium on Bonds payable 328,000
2. December 31,2020
Dr Interest expense 281,280
Dr Premium on Bonds payable 2,120
Cr Cash 283,400
3. June 30,2021
Dr Interest expense 281,153
Dr Premium on Bonds payable 2,247
Cr Cash 283,400
4. December 31,2021
Dr Interest expense 281,018
Dr Premium on Bonds payable 2,382
Cr Cash 283,400
Explanation:
Preparation of the Journal entries for Monty Company.
1. June 30,2020
Dr Cash $4,688,000
Cr Bonds payable $4,360,000
Cr Premium on Bonds payable 328,000
($4,688,000-$4,360,000)
2. December 31,2020
Dr Interest expense 281,280
(4,688,000*12%/2)
Dr Premium on Bonds payable 2,120
(283,400-281,280)
Cr Cash 283,400
(4,360,000*13%/2)
3. June 30,2021
Dr Interest expense 281,153
(4,688,000-2,120)*12%/2
Dr Premium on Bonds payable 2,247
(283,400-281,153)
Cr Cash 283,400
(4,360,000*13%/2)
4. December 31,2021
Dr Interest expense 281,018
(4,688,000-2,120-2,247)*12%/2
Dr Premium on Bonds payable 2,382
(283,400-281,018)
Cr Cash 283,400
(4,360,000×13%/2)
Vang Enterprises, which is debt-free and finances only with equity from retained earnings, is considering 7 equal-sized capital budgeting projects. Its CFO hired you to assist in deciding whether none, some, or all of the projects should be accepted. You have the following information: rRF= 4.50%; RPM = 5.50%; and b = 0.93. The company adds or subtracts a specified percentage to the corporate WACC when it evaluates projects that have above- or below-average risk. Data on the 7 projects are shown below. If these are the only projects under consideration, how large should the capital budget be?
Project Risk Risk Factor Expected Return Cost (Millions)
1 Very low -2.00% 7.60% $25.00
2 Low -1.00% 9.15% $25.00
3 Average 0.00% 10.10% $25.00
4 High 1.00% 10.40% $25.00
5 Very high 2.00% 10.80% $25.00
6 Very high 2.00% 10.90% $25.00
7 Very high 2.00% 13.00% $25.00
a. $ 125
b. $ 100
c. $ 25
d. $50
e. $75
Answer:
E $75
Explanation:
Using CAMP we solve for the Cost of equity on each and determinate which project are worht to invest on it
A
[tex]Ke= r_f + \beta (r_m-r_f)[/tex]
risk free = 0.045
rate premium market = (market rate - risk free) = 0.055
beta(non diversifiable risk) = 0.93
[tex]Ke= 0.045 + 0.93 (0.055)[/tex]
Ke 0.09615 = 9.615%
A 9.615% - 2.00% = 7.615% As the return is 7.60% we should reject
B 9.615% - 1% = 8.615% return of 9.15% we should Accept
C return of 10.10% while Ke 9.615% Accepted
D 9.615% + 1% = 10.615% return of 10.40% rejected
E 9.615% + 2% = 11.615% against 10.80% yield rejected
F cost of 11.615% ith return of 10.90% rejected
G cost of 11.615% with return of 13.00% Accepted
We accept three projectthus, we require $75
Suppose that you are the manager and sole owner of a highly leveraged company. All the debt will mature in one year. If at that time the value of the company is greater than the face value of the debt, you will pay off the debt. If the value of the company is less than the face value of the debt, you will declare bankruptcy and the debt holders will own the company.
a) Express your position as an option on the value of the company.
b) Express the position of the debt holders in terms of options on the value of the company.
c) What can you do to increase the value of your position?
Answer:
From my position as an option on the value of the company, the stance or view of the owner is a call option on value of company strike face of debt
Secondly, debt holders have systematically sold a put option value of company strike at face of debt.
Now, to be able to increase or raise the value call option it includes he following, In making sure to raise the value of the company, To boost the unpredictability of the company.
Explanation:
Solution
(a) The position of the owner is a call option on value of company strike at face of debt
(b)The debt holders have efficiently sold a put option on value of company strike at face of debt.
(c) To be able to increase the value option call the following are listed below:
Endeavor or make sure to raise the value of the companyBoost the volatility of the company.Skolits Corp. issued 20-year bonds 2 years ago at a coupon rate of 8.9 percent. The bonds make semiannual payments. If these bonds currently sell for 110 percent of par value, what is the YTM
Answer:
The YTM is 7.85%
Explanation:
Since 20 year bonds were issued 2 years ago,
Time to Maturity = 18 years
Coupon Rate = 8.9%
Lets assume that the par value of the bond is $100
The bonds make semi-annual payments,
Therefore, number of periods = 18 × 2 = 36
Semi-annual Coupon =( 8.9% × 100 ) / 2 = $4.45
Current Value of Bond = 110% of par value = 1.1 × 100 = $110
YTM is the discount rate which makes the present value of all the future cash flows equal to the current value of the bond, that is $110 , which means
110 = [tex]4.45/(1+r)^1[/tex] + [tex]4.45/(1+r)^2[/tex] + ... + [tex]4.45/(1+r)^{35[/tex] + [tex]104.45/(1+ r)^{36[/tex]
where, r is YTM/2
r = 3.927%
Therefore, YTM = 3.927 × 2 = 7.85%
Daniel acquires a 30 percent interest in the PPZ Partnership from Paolo, an existing partner, for $48,000 of cash. The PPZ Partnership has borrowed $19,000 of recourse liabilities as of the date Daniel bought the interest. What is Daniel's basis in his partnership interest
Heinz Ketchup holds 54% of the U.S. ketchup market, and nine of every 10 restaurants feature Heinz ketchup. However, Heinz has learned that many restaurant owners simply refill Heinz bottles with cheaper ketchup, thereby capitalizing on the Heinz name without the cost. One restaurant owner explains, "It’s just ketchup. The customers don’t notice." There are no specific health regulations that apply, and owners are not breaking the law by refilling the bottles. Do you think this practice is ethical?
Answer:
No, not at all. The practice is NOT ethical.
Explanation:
So, from the question above let us take each statement one after the other.
(1). "Heinz Ketchup holds 54% of the U.S. ketchup market, and nine of every 10 restaurants feature Heinz ketchup"
DEDUCTION FROM (1): this shows that Heinz Ketchup is a popular brand in the United States of America.
(2). " Heinz has learned that many restaurant owners simply refill Heinz bottles with cheaper ketchup, thereby capitalizing on the Heinz name without the cost. One restaurant owner explains, "It’s just ketchup. The customers don’t notice." There are no specific health regulations that apply, and owners are not breaking the law by refilling the bottles"
DEDUCTION FROM (2): What these other restaurants owners are doing is purely CHEAT that is "refill Heinz bottles with cheaper ketchup". CHEATING IS UNETHICAL!
Polk Software Inc. has a quick ratio of 2.00, $29,475 in cash, $16,375 in accounts receivable, some inventory, total current assets of $65,500, and total current liabilities of $22,925. The company reported annual sales of $500,000, and cost of goods sold equal to 75% of sales in the most recent annual report. Over the past year, how often did Polk Software Inc. sell and replace its inventory?
Answer:
Inventory Turnover = 19.08 times
Inventory Days = 19.13 days
Explanation:
Polk Software Inc.
Quick ratio 2.00,
Cash $29,475
Accounts receivable $16,375
Inventory= ?= $19650
Total current assets $65,500
Total current liabilities $22,925
Annual sales $500,000,
Cost of Goods Sold 75% of sales= $375,000
Quick Ratio = Current Assets - Inventory/Current liabilities
Quick Ratio *Current liabilities= Current Assets - Inventory
2* $22,925= $65,500- Inventory
45850 = $65,500- Inventory
$65,500-45850= Inventory
Inventory = $19650
Inventory Turnover = Cost Of Good Sold/ Average Inventory
We take the current inventory as the average inventory
Inventory Turnover = $ 375,000/ 19650= 19.08 times
Inventory Turnover tells us that how often the inventory is converted to sales.
High inventory turnover means how often inventory is converted to sales .
Inventory Days = 365/inventory Turnover = 365/19.08 = 19.13 days
Inventory days means the average number of days the company holds ints inventory before it is sold.
ABC Appliance offers a warranty requiring an annual fee. The warranty may be purchased at the time of sale or at any time within the first year after the appliance was purchased. The warranty fee after the date of purchase is twice the time-of-purchase fee. When asked why the fee was higher after the date of purchase, ABC's president said, "Buying a warranty is voluntary. We've noted that those who buy the warranty after the purchase date have a greater need for service." Charging the same rate or a lower rate after the date of purchase would expose ABC to what problem that also impacts private insurers?
Answer: adverse selection
Explanation:
Adverse selection is a situation whereby the sellers possesses information that the buyers do not have. It may also be the other way round whereby the buyers have information which the sellers don't have regarding the quality of a product.
There is information failure between both parties; typically, it's usually the sellers who has more information. Therefore, base on the scenario above, charging same rate or lower rate after the date of the purchase would expose ABC to adverse selection problems.
A type of entity that must have one general partner and at least one limited partner. b. A type of entity in which owners are "members". c. A type of entity in which all owners are jointly and severally liable for the entity's debts. d. A type of entity in which there can be only one owner.
Answer: a) Limited Liability Partnership (LLP)
b) Limited Liability Company (LLC)
c) General Partnership
d) Sole Proprietorship
Explanation: Limited Liability Partnership (LLP) - A type of entity that must have one general partner and at least one limited partner.
Limited Liability Company (LLC)- A type of entity in which owners are "members".
General Partnership - A type of entity in which all owners are jointly and severally liable for the entity's debts.
Sole Proprietorship - A type of entity in which there can be only one owner.
Cherokee Spring Mill produces four varieties of corn meal based on how finely the corn is ground. The mill makes long production runs of high volume. Cherokee Spring Mill uses a(n) _____ process.
Answer:
The correct answer is "continuous"
Explanation:
A continuous process is also called continuous production. In a continuous process, materials being processed for example the four varieties of cornmeal used in the question above are undergoing continuous chemical reactions or physical processing which involves mechanical treatment to ensure a final product without any break in time, substance.
A continuous process is a process where the materials to be used are also processed. Here, production is uninterrupted.
A continuous process has advantages such as, it is cheaper making use of concurrent running of production. It is also a simple process with the aim of minimizing wastage. One of the disadvantages is the maintenance cost of the equipment used.
The Fed has decided to expand the money supply, leading to lower interest rates. As the CEO of an energy company, you react to these lower interest rates by deciding to expand your operations and construct a new pipeline across the state of Virginia. What impacts would this decision have on the macroeconomy
Answer:
The answer are:
1. Raising Gross Domestic Product(GDP)
2. Reducing unemployment
C. increasing the investment part of GDP
Explanation:
The impacts would be the following:
1. Raising Gross Domestic Product(GDP): Gross Domestic Product(GDP) is the market value of all final goods and services produced within a country during a specific period (usually a year). By deciding to expand your operations and construct a new pipeline across the state of Virginia, the CEO is adding to the country's GDP
2. Reducing unemployment: Expanding operations and construct a new pipeline across the state of Virginia, the CEO will create new employments because more hands will be needed for the expansion.
C. increasing the investment part of GDP. The components of GDP are Consumers' consumption, firms' investment, government expenditure, exports and imports. The expansion and the new investment (construction new pipeline) will increase the firms' investment component or variable.
Cullumber Company purchased machinery on January 1 at a list price of $320000, with credit terms 4/10, n/30. Payment was made within the discount period. Cullumber paid $21750 sales tax on the machinery and paid installation charges of $5900. Prior to installation, Cullumber paid $11200 to pour a concrete slab on which to place the machinery. What is the total cost of the new machinery
Answer:
the total cost of the new machinery is $302,550
Explanation:
Cost of a Property Plant and Equipment (PPE) item includes Purchase price of asset and other costs directly incurred in bringing the asset in the location and condition required by management for operation excluding taxes that can be claimed.
Thus the Cost of this Machinery Can be Calculated as :
List Price $320,000
Less Cash Discount at 4% ($12,800)
Purchase Price $307,200
Less Sales Tax ($21,750)
$285,450
Add installation charges $5,900
Add Cost of concrete slab $11,200
Total Cost of Machinery $302,550
The internal financial statements of Vera Incorporated show that their beaded purses incurred an operating loss in the most recent year. There were 27 comma 000 purses sold in that year. Selected financial information about the purse line follows. Total sales revenue $ 191 comma 000 Variable costs $ 92 comma 000 Contribution margin $ 99 comma 000 Fixed costs $ 101 comma 000 Net operating loss $( 2 comma 000 ) If the line of purses were to be discontinued, the company would avoid $ 21 comma 000 in fixed costs per year. If Vera Incorporated were to discontinue the line of purses, the change in annual operating income would be
Answer:
Vera Incorporated
Change in annual operating income from discontinued business:
Annual Operating Income would reduce by $78,000.
Explanation:
a) Calculation of the Net Income Lost:
Loss of Contribution ($99,000)
Avoidable fixed cost $21,000
Reduction of Income ($78,000)
b) The line of purses contributes $80,000 towards the company's fixed cost. Therefore, discontinuing this line of business would lead to the loss of this steam of income. The amount of reduced operating income will be $78,000 ($80,000 - 2,000).
Identify whether the following activities Ere examples Of business-level or corporate level strategy.
a. A company's managers ask, "Should we increase the size of our Bluetooth wireless speaker and sell it at a higher cost?"
b. Never previously known as a computer hardware company, Microsoft decides to enter the tablet manufacturing business, producing the Microsoft Surface.
c. Managers for IBM's SPSS statistics software meet to determine how they Will market the product in the upcoming year. Their decision is to show potential clients how effective SPSS is at analyzing extremely large data sets, and how
the "Direct Marketing" part Of the program helps identify which customers will respond to advertisements.
d. The manufacturer of Chobani Yogurt decided to open a flagship store in Soho, where customers can order special yogurt creations, such as fig and walnut or cucumber and olive oil. Though it was in the business of manufacturing
yogurt for 7 years, the company never tried to run a restaurant before.
Answer: A. Business Level.
B. Corporate Level.
C. Business Level.
D. Corporate Level.
Explanation:
Business level strategies are used by a company to engage in transactions that will enable it to sell it's products and bring in profit to the company. It therefore focuses on the customers the business has.
Corporate Level strategies on the other hand are at organizing level of the Organization. In other words they deal with decisions meant to progress the company to make it bigger or more profitable. For example by selling or buying companies/ business units.
A. This is a business level activity as it focuses on the sales of their Bluetooth products.
B. This is a Corporate Level Strategy as it deals with Microsoft as an Organization entering a new market i.e diversifying for growth.
C. This is a Business level strategy as it deals with the product that the company wants to improve sales of which is SPSS.
D. This is a Corporate Level Strategy because as the text shows, the company has never tried to run a restaurant before. They are therefore diversifying and entering into a new market.
The debt ratio is used: Question 23 options: To measure the ratio of equity to expenses. To assess the risk associated with a company's use of liabilities. Only by banks when a business applies for a loan. To determine how much debt a firm should pay off. To determine how much debt a company should borrow.
Answer:
To assess the risk associated with a company's use of liabilities
Explanation:
The formula for debt =total liabilities/equity
It is evident from the formula above that debt ratio does not measure the ratio of equity to expenses, neither does it determine the amount of debt that could be borrowed.
In actual fact, it measures the risk inherent in making use of debt as a source of finance instead of equity.
Three identical units of merchandise were purchased during July, as follows: Date Product Basic H Units Cost July 3 Purchase 1 $35 10 Purchase 1 36 24 Purchase 1 37 Total 3 $108 Average cost per unit $36 Assume one unit sells on July 28 for $45. Determine the gross profit, cost of merchandise sold, and ending inventory on July 31 using the (a) first-in, first-out, (b) last-in, first-out, and (c) average cost flow methods.
Answer and Explanation:
The computation is shown below:
Particulars Gross profit Cost of merchandise sold Ending inventory
a. FIFO $10 $35 $73
($45 - $35) ($108 - $35)
It takes the first cost per unit
b. LIFO $8 $37 $71
($45 - $37) ($108 - $37)
It takes the last cost per unit
c. Average cost $9 $36 $72
($45 - $36) ($45 - $36)
It takes the average cost per unit
Closet Links Clothing Company provided the following manufacturing costs for the month of June. Direct labor cost $ 132 comma 000 Direct materials cost 83 comma 000 Equipment depreciation (straightminusline) 20 comma 000 Factory insurance 18 comma 000 Factory manager's salary 10 comma 000 Janitor's salary 3 comma 000 Packaging costs 19 comma 800 Property taxes 16 comma 000 From the above information, calculate Closet Link's total variable costs.
Answer:
Closet Link's total variable costs is $234,800
Explanation:
Given:
Direct labor cost = $ 132,000
Direct materials cost = $83,000
Equipment depreciation (straight-line) = $20,000
Factory insurance = $18,000
Factory manager's salary = $10,000
Janitor's salary = $3,000
Packaging costs = $19,800
Property taxes = $16,000
Total variable costs = Direct materials cost + Direct labor cost + Packaging costs
= $83,000 + $132,000 + $19,800 = $234,800
QS 9-13 Note receivable interest and maturity LO P4 On December 1, Daw Co. accepts a $12,000, 45-day, 7% note from a customer. (1) Prepare the year-end adjusting entry to record accrued interest revenue on December 31. (2) Prepare the entry required on the note's maturity date assuming it is honored. (Use 360 days a year.)
Answer and Explanation:
The journal entries are shown below;
a. Interest receivable Dr ($12,000 × 7% × 30 days ÷ 360 days) $70
To Interest revenue $70
(Being the interest revenue is recorded)
For recording this we debited the interest receivable as it increased the asset and credited the interest revenue as it also increased the revenue
b. Cash Dr $12,105
To interest receivable $70
To interest revenue ($12,000 × 7% × 15 days ÷ 360 days) $35
To Note receivable $12,000
(being cash received is recorded)
For recording this we debited the cash as it increased the assets and credited the interest receivable, interest revenue and note receivable as it decreased the asset and increased the revenue
Important provisions of the Sarbanes-Oxley Act Multiple Choice encourage the destruction of financial documents. approve corporate loans to directors of the company. encourage outside CPA firms to deliver several services to their clients, including auditing services and consulting services. require the CEO and CFO of corporations to certify the accuracy of financial reports.
Answer: require the CEO and CFO of corporations to certify the accuracy of financial reports.
Explanation:
The Sarbanes-Oxley Act of 2002 was passed by the US Congress in the wake of the devastating crisis that engulfed the financial world as a result of the dodgy accounting practices of Enron, WorldCom and Tyco amongst others to protect the Public from acts by companies that would seek to deceive and mislead the public in terms of Accounting and Corporate disclosures.
One of the provisions was that Top Executives such as the CEO and the CFOs of companies personally certify the accuracy of the Financial reports. By doing this they can take personal responsibility and if they make a false certification willingly, they could be prosecuted and jailed.
A review of the ledger of Remina Company at December 31, 2017, produces the following data pertaining to the preparation of annual adjusting entries.
1. Prepaid Insurance $10,680. The company has separate insurance policies on its buildings and its motor vehicles. Policy B4564 on the building was purchased on April 1, 2016, for $8,640. The policy has a term of 3 years. Policy A2958 on the vehicles was purchased on January 1, 2017, for $4,200. This policy has a term of 2 years.
2. Unearned Rent Revenue $345,600. The company began subleasing office space in its new building on November 1. At December 31, the company had the following rental contracts that are paid in full for the entire term of the lease.
Date Term (in months) Monthly Rent Number of Leases
Nov. 1 9 $5,400 4
Dec. 1 6 $8,400 3
3. Notes Payable $130,000. This balance consists of a note for 9 months at an annual interest rate of 9%, dated November 1.
4. Salaries and Wages Payable $0. There are 9 salaried employees. Salaries are paid every Friday for the current week. 5 employees receive a salary of $750 each per week, and 4 employees earn $500 each per week. Assume December 31 is a Tuesday. Employees do not work weekends. All employees worked the last 2 days of December.
Required:
Prepare the adjusting entries at December 31, 2017.
Answer:
1)
December 31,2017, insurance expense
Dr Insurance expense 2,880
Cr Prepaid insurance - Policy B4564, 2,880
December 31,2017, insurance expense
Dr Insurance expense 2,100
Cr Prepaid insurance - Policy A2958, 2,100
2)
December 31,2017, rental revenue
Dr Unearned revenue 10,800
Cr Rental revenue 10,800
December 31,2017, rental revenue
Dr Unearned revenue 8,400
Cr Rental revenue 8,400
3)
December 31,2017, interest expense
Dr Interest expense 1,950
Cr Interest payable 1,950
4)
December 31,2017, wages expense
Dr Wages expense 2,300
Cr Wages payable 2,300
g Suppose the banking system has $100,000 in outstanding deposits and actual reserves of $50,000. Using the simple money multiplier formula (i.e., individuals hold no cash), if the required reserve ratio is 40%, the maximum possible amount that the banking system can now add to the money supply is:Group of answer choices$15,000$20,000$25,000$40,000
Answer: $25,000
Explanation:
The Money Multiplier allows us to calculate how much money banks can create in an economic given a certain reserve ratio.
The formula is;
Money Multiplier = 1 /reserve ratio
= 1/ 0.4
= 2.5
The reserve ratio is 40% which means the bank should be holding 40% of deposits as reserves.
= 100,000 * 40%
= $40,000
Yet they are holding $50,000. They are holding $10,000 more than required. Should they release that $10,000 then they will create;
= 10,000 * money Multiplier
= 10,000 * 2.5
= $25,000
Which of the following statements is most correct? a. All else equal, if a bond’s yield to maturity increases, its price will fall. b. All else equal, if a bond is down graded by the rating agencies its yield to maturity will increase. c. If a firm has two bond issues that are identical except one is subordinate to the other, the subordinate issue will have a higher yield to maturity than the other issue. d. A B and C are correct. e. None of the above are correct
Answer: d. A B and C are correct.
Explanation:
A bond's price and it's Yield to Maturity (YTM) are inversely related such that when Yield to Maturity rises, the price of the bond falls. This is a because a higher YTM signifies that the bond is riskier so it will compensate by being cheaper.
If a bond is downgraded by Ratings agencies then it means that the bond is now riskier. As it is riskier investors will charge more interest for taking on the risk. The interest is the YTM and so it rises.
A Subordinate bond means that if the company were to go into bankruptcy for instance, the Subordinate bond would only be paid for after the bond that is not Subordinated. This means that there is a chance that Subordinate bond holders will not get anything from the liquidation of the company. Investors will therefore charge a higher YTM to cater for the risk that this happens.
The payroll register for Gamble Company for the week ended April 29 indicated the following: Salaries $1,250,000 Social security tax withheld 75,000 Medicare tax withheld 18,750 Federal income tax withheld 250,000 In addition, state and federal unemployment taxes were calculated at the rate of 5.4% and 0.6%, respectively, on $225,000 of salaries.Required: a. Journalize the entry to record the payroll for the week of April 29. b. Journalize the entry to record the payroll tax expense incurred for the week of April 29.
Answer with its Explanation:
Part A. The with held taxes will adjusted against the salaries which means with held taxes will be credited and the salaries accrued will be debited and the difference of the accrued salary and with held taxes will go to the salaries payables (Credit).
The double entry is given as under:
Dr Salaries Expenses $1,250,000
Cr Social Security Payables $75,000
Cr Medicare Tax Payables $18,750
Cr Federal Income Tax Payables $250,000
Cr Salaries Payables $906,250
Part B. The state and federal unemployment taxes will also result in the increase in the salaries expense just like the with held taxes.
The double entry would be as under:
Dr Salaries Expense $13,500
Cr State Unemployment Taxes $12,150 (225,000 * 5.4%)
Cr Federal Unemployment Taxes $1,350 (225,000 * 0.6%)
On December 2, Coley Corp. acquired 1,800 shares of its $4 par value common stock for $23 each. On December 20, Coley Corp. resold 1,400 shares for $13 each. Which of the following is correct regarding the journal entry for the resold shares?
a. Credit Additional Paid-in Capital $7,000
b. Credit Treasury Stock $20,000
c. Debit Cash $15,400
d. Credit Treasury Stock $11,000
e. None of these
Answer:
b. Credit Treasury Stock $20,000
Explanation:
General Journal
For the reacquisition of shares of common stock
Date Account Titles and Explanation Debit Credit
Dec 2 Treasury stock $28,000
Cash (1,400 shares * $20 each) $28,000 (To record the repurchase of shares of common shares
General Journal
For the reissue of shares treasury stock
Date Account Titles and Explanation Debit Credit
Dec 20 Cash (1,000 shares * $11 each) $11,000
Paid-in-capital in excess of par $9,000
- Treasure stock
Treasury stock $20,000
(1,000 shares * $20 per share)
(To record the reissue of treasury stock)
Conclusion: The journal entry to record the reissue of treasury stock is Credit Treasury Stock $20,000.