Answer:
$14,434
Explanation:
The question is asking to find the future value of making a payment of $7,000 every year for two years
The formula for finding future value =
FV = A x annuity factor
Annuity factor = {[(1+r) ^N ] - 1} / r
A = amount = $7,000
R = interest rate = 6.2%
N = 2
[(1.062) ^2 - 1 ] / 0.062 = 2.062
2.062 x $7,000 = $14,434
I hope my answer helps you
Answer: $14429
Explanation:
For this question, we will use the annuity formula to solve. The future value of an annuity is given as:
= C × ([(1+i)^n - 1] / i)
where,
C = The Cash flow per period
= $7000
i = the interest rate
= 6.2%
n = number of years
= 2
Future value of annuity will now be:
= 7000 × ([(1+0.062)²- 1]/0.062)
= 7000 × ([1.062)² - 1]/0.062)
= 7000 × [(1.1278 - 1)/0.062)]
= 7000 × (0.1278/ 0.062)
= 7000 × 2.0613
= $14429
The answer is $14429
Coca-Cola has supported numerous health and sporting cause, but to what extent is this genuine CSR.
Answer:
Considerable extent
Explanation:
Note that CSR (Corporate social responsibility) entails that an organization gives back to its community or environment in which it operates in areas such as financing community developmental projects, providing employment etc.
Coca-Cola, therefore, has done what CSR entails although it could still do more by reducing the environmental pollution coming from its factories, reducing the calories found in its drinks etc.
An economy consists of three workers: Kevin, Rajiv, and Yakov. Each works 10 hours a day and can produce two services: mowing lawns and washing cars. In an hour, Kevin can either mow 2 lawns or wash 1 car; Rajiv can either mow 1 lawn or wash 1 car; and Yakov can either mow 1 lawn or wash 2 cars.
For each of the scenarios listed below, determine how many lawns will be mowed and how many cars will be washed per day and enter these values into the corresponding row?
a. All three spend all their time mowing lawns. (A)
b. All three spend all their time washing cars. (B)
c. All three spend half their time on each activity. (C)
d. Kevin spends half his time on each activity, while Rajiv only washes cars and Yakov only mows lawns. (D)
Answer:
1. 40 lawns
2. 40 washed cars
3. 20 lawns, 20 washed cars
4. 25 lawns mowed, 25 washed cars
Explanation:
In the given question,
A) When all three spend all their time mowing lawns that is
Kevin= 2 X 10 hrs = 20
Rajiv = 1 x 10 hrs = 10
Yakov = 1 x10 hrs = 10
Total mowed lawns will be= 20 +10 + 10 = 40 lawns.
B) When all three spend their time washing cars
Kevin = 1 x 10 hrs = 10
Rajiv = 1 x 10 hrs =10
Yakov = 2 x 10 hrs = 20
Total cars washed= 20 +10 + 10
C) when all three people spend their half time on each activity
Kevin = 2 x 5 hours = 10
Rajiv = 1 x 5 hrs = 5
Yakov1 x 5 hrs = 5
Total lawn mowed will be= 10 + 5 + 5 = 20 therefore time spent on car washing will be 20 hrs.
D) Time on the mowing of the lawn will be =
Kevin = 2 x 5 hrs = 10
Rajiv = 0
Yakov = 1 x 10 hours = 10
Time on the washing of the car will be 20 hrs
Kevin = 1 x 5
Rajiv = 1 x 10
Yakov = 0
Total time = 15 hrs
Merck & Company reported the following from its 2016 financial statements. $ millions 2013 2014 2015 2016 Accounts receivable, net $7,184 $6,626 $6,484 $7,018 Allowance for doubtful accounts 146 153 165 195 a. Compute accounts receivable gross for each year. $ millions 2013 2014 2015 2016 Accounts receivable, gross b. Determine the percentage of allowance to gross account receivables for each year. Round answers to two decimal places (ex: 0.02345 = 2.35%). 2013 2014 2015 2016 % allowance c. Assume that we want to reformulate the balance sheet and income statement to reflect a constant percentage of allowance to gross accounts receivables for each year. Compute the four-year average and then reformulate the balance sheet and income statements for each of the four years. Follow the process shown in Analyst Adjustments 5.2 and assume a tax rate of 35%. Four- year average of percentage of allowance to gross accounts receivables. Round answer to two decimal places (ex: 0.02345 = 2.35%)
Answer:
a. Compute accounts receivable gross for each year.
2013 $7,3302014 $6,7792015 $6,6492016 $7,213b. Determine the percentage of allowance to gross account receivables for each year.
2013 1.99%2014 2.26%2015 2.48%2016 2.70%c. 2013 2014 2015 2016
adjusted allowance for $173 $160 $157 $170
doubtful accounts
Balance sheet adjustments:
allowance for doubtful accounts $27 $7 -$8 -$25
accounts receivable net $7,157 $6,633 $6,476 $6,993
deferred tax liability -$9.45 -$2.45 $2.8 $8.75
retained earnings $9.45 $2.45 -$2.8 -$8.75
Income statement adjustments:
bad debt expense $27 $7 -$8 -$25
income tax expense -$9.45 -$2.45 $2.8 $8.75
net income $9.45 $2.45 -$2.8 -$8.75
Explanation:
2013 2014 2015 2016
Accounts receivable, net $7,184 $6,626 $6,484 $7,018
Allowance for doubtful accounts $146 $153 $165 $195
four year average of allowance for doubtful accounts = (1.99 + 2.26 + 2.48 + 2.7) / 4 = 2.36%
g On January 1, our company purchased a truck for $95,000. The estimated useful life of the truck is 5 years. The residual value at the end of 5 years is estimated to be $15,000. What is the depreciation expense for the second year of use if we use the double-declining balance method
Answer:
The depreciation expense for the second year is $22800
Explanation:
The double declining balance method is an accelerated form of allocating the depreciation expense to the asset. This method charges a high depreciation expense in the initial years of the estimated useful life of the asset and lower depreciation in the later years.
The formula to calculate the depreciation expense per year under this method is,
Depreciation expense = 2 * [ (Cost - Accumulated depreciation) / estimated useful life of the asset]
Double Declining Balance Method - Depreciation expense:
Year 1 = 2 * [ (95000 - 0) / 5]
Year 1 = $38000
Year 2 = 2 * [ (95000 - 38000) / 5]
Year 2 = $22800
An engineer has an income that puts him in the 25% federal income tax bracket and at the 10% state incremental tax rate. She has an opportunity to earn extra $500 by doing a small consulting job. What will be his effective tax rate on the additional income
Answer:
The answer is 32.5%
Explanation:
Solution
Recall that:
Engineer income tax =25%
Incremental tax rate =10%
Extra earnings =$500
Now, what ill be his effective tax rate on the additional income
Thus
Federal income tax = 500 * 25 % = $125
The state tax = (500 - 125) * 10 % = $37.50
Effective tax rate = (125 + 37.50) / $500
=162.50 /$ 500
= 0.325 or 32.5% that is (0.325 * 100)
Hence the effective tax rate is 32.5 %
Required information [The following information applies to the questions displayed below.] Following are the transactions of a new company called Pose-for-Pics. Aug. 1 Madison Harris, the owner, invested $8,200 cash and $35,200 of photography equipment in the company in exchange for common stock. 2 The company paid $3,800 cash for an insurance policy covering the next 24 months. 5 The company purchased office supplies for $1,050 cash. 20 The company received $5,031 cash in photography fees earned. 31 The company paid $845 cash for August utilities. Prepare general journal entries for the above transactions.
Answer:
Pose-for-Pics
General Journal Entries:
Aug. 1:
Debit Cash $8,200
Debit Equipment $35,200
Credit Common Stock $43,400
To record the issue of common stock for cash and equipment.
Aug. 2:
Debit Prepaid Insurance $3,800
Credit Cash Account $3,800
To record the payment of insurance covering 24 months.
Aug. 5:
Debit Office Supplies $1,050
Credit Cash Account $1,050
To record the payment for office supplies.
Aug. 20:
Debit Cash Account $5,031
Credit Photography Fees $5,031
To record fees earned.
Aug. 31:
Debit Utilities $845
Credit Cash Account $845
To record payment for August Utilities.
Explanation:
General Journal entries are made to record business transactions as they occur on a daily basis. Journal entries show the General Ledger accounts to be debited and the ones to be credited. They form the initial records of any business transactions.
On January​ 1, 2018, the Prepaid Insurance account of​ Dogwood, Inc. had a beginning balance of $ 1,800. Three months of insurance premiums remain in this beginning balance. On February​ 21, 2018, the company paid an annual insurance premium in the amount of $ 4,100 for the period beginning March 1. On February​ 28, 2018, the balance in Prepaid Insurance is $ 1,200.A. TrueB. False
Answer:
B. False
Explanation:
Beginning balance
-Period of policy= expired 2 months
-Period of unexpired insurance = 1 month (Out of 3 month, Insurance premium for period "Jan 1 to Feb 28" is expired)
Amount in prepaid insurance insurance= $1800 * 1/3 = $600
Current balance
Period = "0" since period of coverage will start from 1 march
Period of unexpired insurance = 12
Amount in prepaid insurance = 4,100
Thus, Total amount in prepaid insurance for the beginning and Current period= $600 + $4,100 = $4,700
The amount in prepaid insurance is $4700, hence the balance as stipulated as Prepaid Insurance = $ 1,200 is false
Midyear on July 31st, the Baldwin Corporation's balance sheet reported: Total Liabilities of $101.255 million Cash of $8.040 million Total Assets of $163.111 million Retained Earnings of $34.226 million. What was the Baldwin Corporation's common stock
Answer:
Stock = 27.629 million
Explanation:
Baldwin Corporation
Balance Sheets
Assets
Cash of $8.040 million
Total Assets $163.111 million
Liabilities and Owner's Equity $163.111 million
Stock 27.629 million
Total Liabilities $101.255 million
Retained Earnings $34.226 million
According to Balance sheet approach total assets must equal total liabilities and Owner's Equity.
Total assets including cash are given which are equal to $163.111 million and when we subtract total liabilities and retained earning from it we get the value of stock.
Stock = Total Assets- Total Liabilities - Retained Earnings
Stock = $163.111 million - $101.255 million-$34.226 million
Stock = 27.629 million
1. A contract calls for a total payment of $800,000 with a guarantee. Essentially the contractor is guaranteed to make at least $200,000 above his costs. If the contractor can demonstrate his costs exceed $600,000, the project will pay the difference, with a $50,000 ceiling on the overage. The contractor demonstrates he spent $623,000. How much (gross) must the project remit to the contractor?
Answer:
The gross which the project has to remit to the contractor is $823,000
Explanation:
There are two things that must be fulfilled for the project to remit to the contractor is the amount .
1) First is the guaranteed payment of $800,000.
2) Second, the contractor's expense is more than $600,000, with a payment cap of up to $ 50,000.
The contractor has demonstrated that the cost incurred is $623,000 which is $23,000 above the limit of $600,000.
As this gap is still below $50,000, this will be handed over to the contractor by the client.
The gross which the project has to remit to the contractor = $800,000 + $23,000 = $823,000
Pizza is a normal good if the demand Group of answer choices
a. for pizza rises when income rises.
b. for pizza rises when the price of pizza falls.
c. curve for pizza slopes upward.
d. curve for pizza shifts to the right when the price of burritos rises, assuming pizza and burritos are substitutes.
Answer:
Option A, For Pizza rise when income rises.
Explanation:
Option A is correct because the income of the consumer and the demand for normal goods are positively related. So when consumer's income increases then the demand for normal goods also increases. If the income falls then the demand for normal goods also falls. Therefore, the movement in the same direction shows that there is a direct relationship between normal goods and the income of the consumer.
Implicit transaction
Answer:
Dear user,
Answer to your query is provided below
Implicit Transaction are like Rent of owned building, Interest of own capital etc.
Explanation:
These transactions deals with the expenditure incurred on the intangible items.
Implicit transaction refers to the opportunity transaction of using firm's own resources.
For each separate case below, follow the three-step process for adjusting the Accumulated Depreciation account at December 31.
1. Determine what the current account balance equals.
2. Determine what the current account balance should equal.
3. Record the December 31 adjusting entry to get from step 1 to step 2.
Assume no other adjusting entries are made during the year.
A. The Krug Company's Accumulated Depreciation account has a $13,500 balance to start the year. A review of depreciation schedules reveals that $14,600 of depreciation expense must be recorded for the year Accumulated depreciation
1. Determine what the current account balance equals.
2. Determine what the current account balance should equal.
3. Record the December 31 adjusting entry to get from step 1 to step.
B. The company has only one fixed asset (truck) that it purchased at the start of this year. That asset had cost $44,000, had an estimated life of five years, and is expected to have zero value at the end of the five years.
1. Determine what the current account balance equals.
2. Determine what the current account balance should equal.
3. Record the December 31 adjusting entry to get from step 1 to step.
The company has only one fixed asset (truck) that it purchased at the start of this year. That asset had cost $44,000, had an estimated life of five years, and is expected to be valuedd at the end of the seven years.
1. Determine what the current account balance equals.
2. Determine what the current account balance should equal.
3. Record the December 31 adjusting entry to get from step 1 to step.
Answer:
The three-step process for adjusting the Accumulated Depreciation account at December 31.
A. The Krug Company's Accumulated Depreciation account has a $13,500 balance to start the year. A review of depreciation schedules reveals that $14,600 of depreciation expense must be recorded for the year Accumulated depreciation
Steps:
1. Determine what the current account balance equals.
The Accumulated Depreciation account has $13,500 credit balance.
2. Determine what the current account balance should equal.
The Accumulated Depreciation account should equal $28,100 ($13,500 + $14,600) = balance + depreciation charge for the year.
3. Record the December 31 adjusting entry to get from step 1 to step 2
Debit Depreciation Expenses $14,600
Credit Accumulated Depreciation $14,600
To record the depreciation charge for the period.
B. The company has only one fixed asset (truck) that it purchased at the start of this year. That asset had cost $44,000, had an estimated life of five years, and is expected to have zero value at the end of the five years.
1. Determine what the current account balance equals.
Accumulated Depreciation account should equal zero.
2. Determine what the current account balance should equal.
The Accumulated Depreciation account, credit balance should equal $8,800.
3. Record the December 31 adjusting entry to get from step 1 to step.
Debit Depreciation Expenses $8,800
Credit Accumulated Depreciation $8,800
To record depreciation charge for the period.
Explanation:
Adjusting entries are prepared at the end of an accounting period to being the accounts to the accrual basis from the state of the cash basis. The purpose is to reflect on transactions that took place instead of emphasizing the receipt and payment of cash. These entries, therefore, agree with the accrual concept which requires that transactions be recognized based on the period to which the expense or revenue is incurred or earned instead of when cash payment or receipt takes place.
Mr. Zeplin wants to make a cash gift to each of his five children, to each of their five spouses, and to each of his 13 grandchildren. Assume the taxable year is 2019. How much total wealth can he transfer to his descendants without making a taxable gift if he is an unmarried individual
Answer:
Total wealth transfer is $345000.
Explanation:
Given the number of children = 5
Total number of spouses = 5
Total number of grandchildren = 13
If the individual is unmarried then below is the calculation of wealth transfer to the descendants with the taxable gifts.
In 2018, an individual unmarried person can transfer wealth without tax or free of gift tax is $15000 per person. So the total number of persons to whom the wealth is to be transferred 5 + 5 + 13 = 23 persons.
Total wealth Mr. Zeplin transfer without tax = 15000 × 23 persons = $345000
Eastern University had the following transactions at the beginning of its academic year: Student tuition and fees were billed in the amount of $7,150,000. Of that amount $4,620,000 was collected in cash. Pell Grants in the amount of $2,012,000 were received by the university. The Pell Grants were applied to student accounts. Student scholarships, for which no services were required, amounted to $570,000. These were applied to student tuition bills at the beginning of each semester. Required: Prepare journal entries to record the above transactions assuming: a. Eastern University is a public university. b. Eastern University is a private university.
Answer:
100
Explanation:
hope this helps
Which of the following events would cause the supply curve to decrease from Upper S 1 to Upper S 2? A. Lower expected future prices. B. An increase in the price of inputs. C. Upper A decrease in the price of inputs. D. An increase in the number of firms in the market.
An increase in the price of inputs supply curve to decrease from Upper to upper and law of supply.
Thus, The cost of production inputs is a significant component in addition to the product price, which is the primary factor according to the Law of Supply.
The cheapest price at which a business may sell a good without going bankrupt is the sum of money required to make it. Taking inputs and applying a procedure to them to produce an inputs constitutes the process of producing a good or service.
The finished good or service is the output, and the inputs are things like raw materials, labor, utilities, licensing costs, and even other goods. These materials are sometimes referred to as production factors. The cost of producing the good rises when input prices rise. And as a result, companies must sell their products at each price.
Thus, An increase in the price of inputs supply curve to decrease from Upper to upper and law of supply.
Learn more about Law of supply, refer to the link:
https://brainly.com/question/30161327
#SPJ2
PortaCom manufactures notebook computers and related equipment. PortaCom's product design group developed a prototype for a new high-quality portable printer. The new printer features an innovative design and has the potential to capture a significant share of the portable printer market. Preliminary marketing and financial analyses provided the following selling price, first-year administrative cost, and first-year advertising cost:
Selling Price $284 per unit
Administrative Cost $500,000
Advertising Cost $700,000
In the simulation model for the PortaCom problem, the preceding values are constants and are referred to as parameters of the model.
(a) An engineer on the product development team believes that first-year sales for the new printer will be 18,500 units. Using estimates of $50 per unit for the direct labor cost and $88 per unit for the parts cost, what is the first-year profit using the engineer's sales estimate?
(b) The financial analyst on the product development team is more conservative, indicating that parts cost may well be $101 per unit. In addition, the analyst suggests that a sales volume of 9,500 units is more realistic. Using the most likely value of $50 per unit for the direct labor cost, what is the first-year profit using the financial analyst's estimates?
Answer:
Instructions are below.
Explanation:
Giving the following information:
Selling Price $284 per unit
Administrative Cost $500,000
Advertising Cost $700,000
(a) Units= 18,500
Direct labor= $50
Direct material= $88
Sales= 18,500*284= 5,254,000
Variable costs= (50 + 88)*18,500= (2,553,000)
Contribution margin= 2,701,000
Administrative Cost= (500,000)
Advertising Cost= (700,000)
Net operating income= 1,501,000
B)Units= 9,500
Direct labor= $51
Direct material= $101
Sales= 9,500*284= 2,698,000
Variable costs= (51 + 101)*9,500= (1,444,000)
Contribution margin= 1,254,000
Administrative Cost= (500,000)
Advertising Cost= (700,000)
Net operating income= 54,000
How much do I need to retire? Here are your assumptions. You are 30. You will retire when you are 65. You want $40,000 a year when you retire. You will be an aggressive investor today and have an average market return of 9%. When you retire, you will be conservative in your investing and get into bonds that have a market return of 4.5%. You expect that inflation will be 3%. You currently have $20,000 you put into the market this morning. You are expecting to live until 85. How much do you need to have saved when you turn 65? (Hint: if you want to work out how much you need to save every year, under PMT, it will be 36 years)
Answer:
The amount to be saved at the age of 65 is $1940755.74
Explanation:
To calculate the amount needed at 65 including inflation = 40000 * 1.0336 = 115931.13
Present Value of Growing Annuity = PMT / (r-g) [ 1 - {(1+g)/(1+r)}n ]
= 115931.13 / (0.045 - 0.03) [ 1 - (1.03/1.045)20 ]
= 7728742.2 * 0.2511089
= 1940755.74
Suppose Ginger deposits $5,000 in cash into her checking account at the Bank of Skidoo. Show this transaction in a T-account for the Bank of Skidoo.
Bank of Skidoo
Assets Liabilities
Reserves$ Deposits $
The Bank of Skidoo has no excess reserves and is subject to a 6 percent required reserve ratio. Assume the Bank of Skidoo makes the maximum loan possible from Ginger's deposit to Thurston. Show this transaction in a new T-account for the Bank of Skidoo.
Bank of Skidoo
Assets Liabilities
Reserves$ Deposits $
Thurston decides to use the money he borrowed to purchase a sail boat. He writes a check for the entire loan amount to âGilligan's Seagoingâ Vessels, which deposits the check in itsâ bank, the Paradise Bank ofâ Kona, Hawaii. When the checkâ clears, the Bank of Skidoo transfers the funds to the Paradise Bank. Show these transactions in a newâ T-account for the Bank of Skidoo.
The maximum amounts of deposits that can be created from Ginger's initial deposit is $_____
The maximum amounts of loans that can be created from Ginger's initial deposit is $_____
Answer:
1) Suppose Ginger deposits $5,000 in cash into her checking account at the Bank of Skidoo. Show this transaction in a T-account for the Bank of Skidoo.
Reserves Checkable deposits
debit credit debit credit
5,000 5,000
2) The Bank of Skidoo has no excess reserves and is subject to a 6 percent required reserve ratio. Assume the Bank of Skidoo makes the maximum loan possible from Ginger's deposit to Thurston. Show this transaction in a new T-account for the Bank of Skidoo.
Reserves Loans
debit credit debit credit
5,000 4,700
4,700
300
3) Thurston decides to use the money he borrowed to purchase a sail boat. He writes a check for the entire loan amount to Gilligan's Seagoing Vessels, which deposits the check in its bank, the Paradise Bank of Kona, Hawaii. When the check clears, the Bank of Skidoo transfers the funds to the Paradise Bank. Show these transactions in a new T-account for the Bank of Skidoo.
Reserves Checkable deposits
debit credit debit credit
5,000 5,000
4,700 4,700
300 300
4,700
4,400
4) The maximum amounts of deposits that can be created from Ginger's initial deposit is $_____
Increase in checkable deposits = change in bank reserves / required reserves = $5,000 / 6% = $83,333.33
The maximum amounts of loans that can be created from Ginger's initial deposit is $_____
the maximum amount of loans that can be created in Ginger's bank is $4,700, but the maximum amount that loans can be created in the whole banking system = $83,333.33 - $5,000 = $78,333.33
The fiscal year-end unadjusted trial balance for Collins Company is found on the trial balance tab. Collins Company uses a perpetual inventory system. It categorizes the following accounts as selling expenses: depreciation expense—store equipment, sales salaries expense, rent expense—selling space, store supplies expense, advertising expense. It categorizes the remaining expenses as general and administrative.
Descriptions of items that require adjusting entries on January 31 follow.
A) Store supplies still available at fiscal year-end amount to $2,950.
B) Expired insurance, an administrative expense, for the fiscal year is $1,880.
C) Depreciation expense on store equipment, a selling expense, is $6,300 for the fiscal year.
D) To estimate shrinkage, a physical count of ending merchandise inventory is taken. It shows $11,560 of inventory is still available at fiscal year-end.
Missing information:
Cash 1,000
Merchandise inventory 12,500
Store supplies 5,800
Prepaid insurance 2,400
Store equipment 42,900
Accumulated depreciation - Store equip. 15,250
Accounts payable 10,000
Common stock 5,000
Dividends 2,200
Retained earnings 27,000
Sales 111,950
Sales discounts 2,000
Sales returns and allowances 2,200
Cost of goods sold 38,400
Salaries expense 35,000
Rent expense 15,000
Advertising expense 9,800
Total 169,200 169,200
Answer:
the closing entries should be:
Dr Sales revenues 107,750
Cr Income summary 107,750
Dr Income summary 110,270
Cr Cost of goods sold 39,340
Cr Salaries expense 35,000
Cr Rent expense 15,000
Cr Advertising expense $9,800
Cr Supplies expense 2,950
Cr Insurance expense 1,880
Cr Depreciation expense 6,300
Dr Retained earnings 2,520
Cr Income summary 2,520
Dr Retained earnings 2,200
Cr Dividends 2,200
Explanation:
A) Store supplies still available at fiscal year-end amount to $2,950.
Dr Supplies expense 2,950
Cr Supplies 2,950
B) Expired insurance, an administrative expense, for the fiscal year is $1,880.
Dr Insurance expense 1,880
Cr Prepaid insurance 1,880
C) Depreciation expense on store equipment, a selling expense, is $6,300 for the fiscal year.
Dr Depreciation expense 6,300
Cr Accumulated depreciation - Store equip. 6,300
D) To estimate shrinkage, a physical count of ending merchandise inventory is taken. It shows $11,560 of inventory is still available at fiscal year-end.
Dr Shrinkage expense or COGS (I prefer to use COGS) 940
Cr Merchandise inventory 940
the adjusted income statement:
Revenues:
Sales $111,950 Sales discounts ($2,000) Sales returns and allowances ($2,200) $107,750Cost of goods sold ($39,340)
Gross profit $68,410
Operating expenses:
Salaries expense ($35,000) Rent expense ($15,000) Advertising expense ($9,800) Supplies expense ($2,950)Insurance expense ($1,880)Depreciation expense ($6,300) ($70,930)Net loss ($2,520)
When the cost method is used to account for an investment, the carrying value of the investment is affected by a.the earnings and dividend distributions of the investee b.the periodic net income of the investee c.the dividend distributions of the investee d.neither the earnings nor the dividends of the investee
At December 31, Folgeys Coffee Company reports the following results for its calendar year. Cash sales $ 901,000 Credit sales 301,000 Its year-end unadjusted trial balance includes the following items. Accounts receivable $ 126,000 debit Allowance for doubtful accounts 5,100 debit Prepare the adjusting entry to record bad debts expense assuming uncollectibles are estimated to be (a) 4% of credit sales, (b) 2% of total sales and (c) 7% of year-end accounts receivable.
Answer:
Please find the detailed answer in the explanation section.
Explanation:
A. 4% of credit sales
Bad Debts Expense is 4% of $301,000
0.04 x $301,000
=$12,040
Adjusting entry
Dec. 31
Dr Bad debt expense $12,040
Cr Allowance for Doubtful allowance $12,040.
B. 2% of total sales
Total sales = cash sales + credit sales
$ 901,000 + $ 301,000
=$1,202,000
Bad Debts Expense is 2% of 1,202,000
0.02x $1,202,000
=$24,040
Adjusting entry
Dec. 31
Dr Bad debt expense $24,040
Cr Allowance for Doubtful allowance $24,040.
C. 7% of year-end accounts receivable.
Unadjusted balance is $5,100
Estimated balance = $8,820(7% of $126,000)
Adjusted balance is $13,920($5,100 + $8,820)
Adjusting entry
Dec. 31
Dr Bad debt expense $8,820
Cr Allowance for Doubtful allowance $8,820
In what ways could prisoners of war earn a profit? What would motivate a prisoner to want profit?In what ways could prisoners of war earn a profit? What would motivate a prisoner to want profit?
Answer:
By working to produce goods for manufacturing companies
By working on prison farms.
Other ways may also include working in construction projects in or outside the prison yard.
Explanation:
In this modern day, prisoners of war are sometimes employed to manufacture good while in prison. They are usually utilized as a cheap labor source in which they are paid less than the normal wage of freemen. Some of the manufacturing jobs done are usually contracted to the prison by outside manufacturing firms, or sometimes by the prison itself; in order to generate additional income. These works keep the prisoners busy and also earn them profit.
In some cases, some of the prisoners are are made to work on the prison farm. The prisoners are paid minimal wages for their services. This types of jobs keep the prisoners occupied and fit and helps feed the prisoners too. The excess income generated fro the sales of the farm products can be used to pay the prisoners. Also, prisoners can participate in construction projects in and outside the prison yard.
One of the biggest motivator for prisoners wanting profit is the fact that they have hope that they will be out some day. This profit is needed as a boost for these prisoners when they come out, prior to being employed. Also, some of these prisoners sometimes need this profit to provide themselves with some necessary stuffs not provided by the prison system.
A consumer household cleaning products company, the Klean Kompany, has multiple products. Each is labeled with the Klean Kompany name, including Klean Kompany Disinfecting Wipes, Klean Kompany Kitchen Shine, and Klean Kompany Toilet Bowl Scrub.Which branding strategy is Klean Kompany using to build its brand?
Answer:
brand extension
Explanation:
Based on the information provided within the question it can be said that Klean Kompany is using the branding strategy known as brand extension. This is the process of using the same brand name that has already been established and is well known, for a variety of different product lines, including new products entering the market. Which is exactly what Klean Kompany is doing by adding their brand name on every single product they release into the market. This is done in order to let people know that the product is from that brand and convince them to buy it.
Suppose a Monopsony facing the following labor supply given by curve L = 10W, where L is the number of workers and W = hourly wage. a) Express the hourly wage in terms of the number of workers (L). b) Provide an expression of total labor cost in terms of the number of workers (L) c) Express the marginal expense of labor (MEL) in terms of the number of workers. d) Suppose the marginal revenue product of labor ((MRPL) = 7 – L. What is the level of workers that maximizes the monophony’s profit? What is the wage paid by the monopsony at the profit maximizing level of labor?
Answer: The answer is given below
Explanation:
a. Express the hourly wage in terms of the number of workers (L).
From the question, the labor supply given by L = 10W, where,
L = number of workers
W = hourly wage
Since L = 10W
Divide both side by 10
L/10 = 10W/10
W = L/10
The hourly wage(W) expressed in terms of the number of workers(L) is L/10.
b. Provide an expression of total labor cost in terms of the number of workers (L).
Total labor cost = L × W
Since W = L/10,
Total labor cost = L × L/10
= L²/10
c. Express the marginal expense of labor (MEL) in terms of the number of workers.
Marginal expense of labor will be gotten when we find the derivative of the total labor cost.
Total labor cost = L²/10
MEL = 2L/10
We can reduce to lowest term
MEL = L/5
d. Suppose the marginal revenue product of labor ((MRPL) = 7 – L. What is the level of workers that maximizes the monophony’s profit? What is the wage paid by the monopsony at the profit maximizing level of labor?
Marginal revenue product of labor (MRPL) = 7 – L
At equilibrium, the marginal revenue product of labor (MRPL) will be equal to the marginal expense of labor(MEL)
MRPL = MEL
7 - L = L/5
Cross multiply
5(7 - L) = L
35 - 5L = L
35 = L + 5L
35 = 6L
L = 35/6
L = 5.83 = 6 Approximately
The level of workers that maximizes the monophony’s profit will be approximately 6.
Wages paid = L/10
= 6/10
= 0.6
The wage paid by the monopsony at the profit maximizing level of labor will be 0.6.
The assets and liabilities of Thompson Computer Services at March 31, the end of the current year, and its revenue and expenses for the year are listed below.
Accounts payable $2,000 Miscellaneous expense $1,030
Accounts receivable 10,340 Office expense 1,240
Cash 21,420 Supplies 1,670
Fees earned 73,450 Wages expense 23,550
Land 47,000 Dividends 16,570
Building 157,630
The common stock was $120,000 and the retained earnings were $60,000 at April 1, the beginning of the current year. During the year, shareholders purchased an additional $25,000 in stock. Use this information to answer the questions that follow.
a. Prepare an income statement for the current year ended March 31.
b. Prepare a statement of retained earnings for the current year ended March 31.
c. Prepare a balance sheet for Thompson's Computer Service.
Answer: Please see explanation column for answers
Explanation: Given Revenue and expenses
Accounts payable $2,000 Miscellaneous expense $1,030, Accounts receivable 10,340 Office expense 1,240
Cash 21,420, Wagesexpense 23,550 Supplies 1,670 Land 47,000, Building 157,630, Dividends 16,570, Fees earned 73,450
a. income statement for the current year ended March 31.
Fees earned = Revenue
Fees earned 73, 450
Expenses Incurred
Wages expense -$23,550
Miscellaneous expense - $1,030
Office expense -$1,240
Total Expenses 25,820
Net income $47,630
Working : Net income = fees earned ( Revenue )- Total expenses =
$73,450 - $25,820 = $47,630
2.statement of retained earnings for the current year ended March 31.
Retained earning at April 1ST $60,000
Net income $47,630
Dividend $16,570
Retained earnings $91,060
Working
Retained earning = Retained earning from april 1st + Net income -- Dividend
$60,000 + $47,630) - $16,570 = $91,060
3.
A balance sheet is a company's financial statement that shows its assets, liabilities and shareholders' equity to illustrate the financial position of the company showing what the company has as its assets, n is owing , and the amount liable to shareholders.at a particular time. In a balance sheet, Assets must equal Liabilities and Shareholders’ Equity..
Balance sheet for Thompson's Computer Service.
Current assets
Cash $21,420
Account receivables $10,340
Supplies $1,670
Total current assets $33,430
Property land and equipment
Land $47,000
Building $ 157,630
Total Property land and equipment $204,630
Total assets $238,060
Liabilities and equity
Accounts payable $2,000
Stock holder's equity
Common stock $145,000
Retained earnings $91,060
Stock holder's equity $236,000
Total Stock holder's equity and Liabilities $ 238,060
we can see in the balance sheet that Stock holder's equity and Liabilities = Total Assets
Vernon is a cash basis taxpayer with a calendar tax year. On October 1, 2019, Vernon entered into a lease to rent a building for use in his business at $3,000 a month. On that day Vernon paid 18 months' rent on the building, a total of $54,000 ($3,000 × 18 months). How much may Vernon deduct for rent expense on his 2019 tax return?
Answer:
$9,000
Explanation:
Calculation of the amount Vernon deduct for rent expense on his 2019 tax return will be :
Rent(lease)×Numbers of months used
Where:
Rent (lease)= 3,000
Numbers of months=3
Hence:
3,000×3=$9,000
Therefore the amount Vernon deduct for rent expense on his 2019 tax return is $9,000 which is 3000×3 month.
The 3 months is from 1st October to 31st December.
Sweet Inc. manufactures cycling equipment. Recently, the vice president of operations of the company has requested construction of a new plant to meet the increasing demand for the company’s bikes. After a careful evaluation of the request, the board of directors has decided to raise funds for the new plant by issuing $3,088,700 of 14% term corporate bonds on March 1, 2020, due on March 1, 2035, with interest payable each March 1 and September 1, with the first interest payment on September 1st, 2020. At the time of issuance, the market interest rate for similar financial instruments is 12%. As the controller of the company, determine the selling price of the bonds.
Answer:
$4,775,565.49
Explanation:
The computation of the selling price of the bond is shown below:
Particulars Amount PV factor 6% Present value
Semi-annual interest $216,209 19.60044 $4,237,791.53
Principal $3,088,700 0.174110131 $537,773.96
Total $4,775,565.49
Working notes
Semi-annual interest $216,209 = $3,088,700 × 14% × 6 ÷ 12
PV factor 3%:
Semi-annual interest 13.76483115 = {(1 - (1.06)^-30) ÷ 0.06 }
Principal 0.174110131 = {1 ÷ 1.03^30}
You have just been hired as a new management trainee by Earrings Unlimited, a distributor of earrings to various retail outlets located in shopping malls across the country. In the past, the company has done very little in the way of budgeting and at certain times of the year has experienced a shortage of cash. Since you are well trained in budgeting, you have decided to prepare a master budget for the upcoming second quarter. To this end, you have worked with accounting and other areas to gather the information assembled below.
The company sells many styles of earrings, but all are sold for the same price- $13 per pair. Actual sales of earrings for the last three months and budgeted sales for the next six months follow (in pairs of earrings):
January (actual)... 20,800 June (budget)... 50,800
February (actual)... 26,800 July (budget)... 30,800
March (actual)... 40,800 August (budget ... 28,800
April (budget)... 65,800 September (budget) 25,800
May (budget)... 100,800
The concentration of sales before and during May is due to Mother's Day. Sufficient inventory should be on hand at the end of each month to supply 40% of the earrings sold in the following month.
Suppliers are paid $7 for a pair of earrings. One-half of a month's purchases are paid for in the month of purchase; the other half is paid for in the following month. All sales are on credit, with no discount, and payable within 15 days. The company has found, however, that only 20% of a month's sales are collected in the month of sale. An additional 70% is collected in the following month, and the remaining 10% is collected in the second month following sale. Bad debts have been negligible.
Monthly operating expenses for the company are given below:
Variable:
Sales commissions..................6% of sales
Fixed:
Advertising.....................$199,200
Rent................................17,200
Salaries........................105,200
Utilities.........................6,200
Insurance......................2,200
depreciation.................13,200
Insurance is paid on an annual basis, in November of each year.
The company plans to purchase $15,400 in new equipment during May and $39,200 in new equipment during June; both purchases will be for cash. The company declares dividends of $11,000 each quarter, payable in the first month of the following quarter.
A listing of the company's ledger accounts as of March 31 is given below:
Assets
Cash.............................................................................$ 130,400
Accounts Receivable($34,840 February sales; $424,320
March Sales)................................. 459,1600
Inventory...................................................................... 184,240
Prepaid insurance......................................................... 21,800
Property and equipment(net)....................................... 861,200
Total Assets................................................................. $1,656,800
Liabilities and Stockholders Equity
Accounts Payable......................................................... $177,800
Dividends Payable......................................................... 11,000
Capital stock................................................................. 880,000
Retained Earnings......................................................... 588,000
Total liabilities and stockholders equity $1,656,800
The company maintains a minimum cash balance of $55,000. All borrowing is done at the beginning of a month; any repayments are made at the end of a month.
The company has an agreement with a bank that allows the company to borrow in increments of $1,000 at the beginning of each month. The interest rate on these loans is 1% per month and for simplicity we will assume that interest is not compounded. At the end of the quarter, the company would pay the bank all of the accumulated interest on the loan and as much of the loan as possible (in increments of $1,000), while still retaining at least $55,000 in cash.
Required
Prepare a master budget for the three-month period ending June 30. Include the following detailed budgets:
a. A sales budget, by month and in total
b. A schedule of expected cash collections from sales, by month and in total.
c. A merchandise purchases budget in units and in dollars. Show the budget by month and in total.
d. A schedule of expected cash disbursements for merchandise purchases, by month and in total.
2. A cash budget. Show the budget by month and in total.
Answer:
Earrings Unlimited1a. Sales Budget
April May June Total
Credit Sales in unit 65,800 100,800 50,800 217,400
Selling Price $13 $13 $13 $13
Sales Value $855,400 $1,310,400 $660,400 $2,826,200
April May June Total
Sales Commission 6% $51,324 $78,624 $39,624 $169,572
1b. Expected Cash Collections:
April May June Total
20% month of sale $171,080 $262,080 $132,080 $565,240
70% following month 371,280 598,780 917,280 1,887,340
10% second month 34,840 53,040 85,540 173,420
Total $577,200 $913,900$1,134,900$2,626,000
1c. Merchandise Purchase Budget
April May June Total
Ending Inventory 40,320 20,320 12,320 12,320
Units Sold 65,800 100,800 50,800 217,400
Units available 106,120 121,120 63,120 229,720
Beginning Inventory 26,320 40,320 20,320 26,320
Purchases (units) 79,800 80,800 42,800 203,400
Beginning Inventory $184,240 $282,240 $142,240 $184,240
Purchase ($) $558,600 $565,600 $299,600 $1,423,800
Cost (goods available)$742,840 $847,840 $441,840 $1,608,040
Less Ending Inventory$282,240 $142,240 $86,240 $86,240
Cost of goods sold $460,600$705,600 $355,600 $1,521,800
1d. Expected Cash Disbursements for Merchandise Purchases:
April May June Total
Purchase ($) $558,600 $565,600 $299,600
50% 1st month $279,300 $282,800 $149,800 $711,900
50% 2nd month $177,870 $279,300 $282,800 $739,970
Total Disbursements$457,170 $562,100 $432,600 $1,451,870
2d. Cash Budget
April May June Total
Beginning Balance $130,400 $55,306 $55,282 $130,400
Cash Collections $577,200 $913,900 $1,134,900 $2,626,000
Cash Disbursements:
Merchandise ($457,170) ($562,100) ($432,600) ($1,451,870)
Sales Commission ($51,324) ($78,624) ($39,624) ($169,572)
Other fixed costs($327,800) ($327,800) ($327,800) ($983,400)*
Equipment purchase ($15,400) ($39,200) ($54,600)
Dividends paid ($11,000) ($11,000)
Bank Loan $195,000 $70,000 ($265,000) $0
Loan Interest ($2,650) ($2,650)
Minimum balance $55,306 $55,282 $83,308 $83,308
Earrings Unlimited INCOME STATEMENT for the quarter to June 30:
Sales $2,826,200
Cost of goods sold 1,521,800
Gross Profit $1,304,400
Less: Expenses:
Sales Commission 169,572
Other fixed costs 983,400
Insurance Expenses 6,600
Bank Loan Interest 2,650
Depreciation 39,600 $1,201,822
Net Income $102,578
Retained Earnings b/f $588,000
Dividends ($11,000)
Retained Earnings c/f $679,578
Earrings Unlimited BALANCE SHEET as of June 30:
Assets:
Current Assets:
Cash $83,308
Accounts Receivable $659,360
Inventory $86,240
Prepaid Insurance $15,200 $844,108
Noncurrent Assets:
Property & Equipment $915,800
Depreciation $39,600 $876,200
Total Assets $1,720,308
Liabilities + Equity:
Liabilities:
Accounts Payable $149,730
Dividends Payable $11,000 $160,730
Capital Stock $880,000
Retained Earnings $679,578 $1,559,578
Total Liabilities + Equity $1,720,308
Explanation:
a) March Purchases:
Ending Inventory in units = 26,320(65,800 x 40%)
Units sold = 40,820
Units available for sale = 67,140 (26,320 + 40,820)
Less Beginning Inventory = 16,320 (40,800 x 40%)
Purchases = 50,820 units
Beginning Inventory = $114,240 (40,800 x $7 x 40%)
Purchases = $355,740 (50,820 x $7)
Cost of goods available $469,980
Less Closing Inventory 184,240 (26,320 x $7)
Cost of goods sold $285,740
b) Accounts Receivable
Beginning Balance $459,160
Sales $2,826,200
Cash Receipts ($2,626,000)
Ending Balance $659,360
c) Accounts Payable
Beginning Balance $177,800
Purchases $1,423,800
Cash Disbursements ($1,451,870)
Ending Balance $149,730
d) Sales Budget January February March
Credit sales in unit 20,800 26,800 40,800
Selling price $13 $13 $13
Sales Value $270,400 $348,400 $530,400
e) A master budget combines other smaller budgets within the business and turns them into one overall budget, which gives a comprehensive overview of the entity's finances. The master budget includes the HR, marketing, and all other departmental budgets to produce an overall single budget.
Clemmens Company applies overhead based on direct labor cost. Estimated overhead and direct labor costs for the year were $120,500 and $124,100, respectively. During the year, actual overhead was $106,500 and actual direct labor cost was $110,800. The entry to close the over- or underapplied overhead at year-end, assuming an immaterial amount, would include
Answer:
Under/over applied overhead= $1,164.48 overapplied
Explanation:
Giving the following information:
Estimated overhead and direct labor costs for the year were $120,500 and $124,100, respectively. During the year, actual overhead was $106,500 and actual direct labor cost was $110,800.
First, we need to calculate the predetermined overhead rate:
Predetermined manufacturing overhead rate= total estimated overhead costs for the period/ total amount of allocation base
Predetermined manufacturing overhead rate= 120,500/124,100
Predetermined manufacturing overhead rate= $0.971
Now, we can allocate overhead:
Allocated MOH= Estimated manufacturing overhead rate* Actual amount of allocation base
Allocated MOH= 0.971*110,880= $107,664.48
Finally, we determine the over/under allocation:
Under/over applied overhead= real overhead - allocated overhead
Under/over applied overhead= 106,500 - 107,664.48
Under/over applied overhead= $1,164.48 overapplied
3. If the average price of an airline ticket on a certain route rises from $200 to $250, the number of tickets sold drop from 800 to 600. Calculate the price elasticity of demand. Is the demand elastic or inelastic?
Answer:
-Price elasticity of demand=0.77
-The demand is inelastic because the elasticity is 0.77 and this number is less than 1.
Explanation:
The formula to calculate the price elasticity of demand is:
Price elasticity of demand=% change in the quantity demanded/% change in the price
To use this formula you have to calculate the % change in the quantity demanded and % change in the price:
% change in the quantity demanded=(Q2-Q1/((Q2+Q1)/2))*100
% change in the quantity demanded=(250-200/((250+200)/2))*100
% change in the quantity demanded=(50/(450/2))*100
% change in the quantity demanded=(50/225)*100
% change in the quantity demanded=22.22%
% change in the price=(P2-P1/((P2+P1)/2))*100
% change in the price=(600-800/((600+800)/2))*100
% change in the price=(-200/(1400/2))*100
% change in the price=(-200/700)*100
% change in the price=-28.57%
Now, you can replace the values in the formula to to calculate the price elasticity of demand:
Price elasticity of demand= 22.22%/-28.57%
Price elasticity of demand=0.77
The price elasticity of the demand is 0.77. An elastic demand is when the elasticity is greater than 1 and an inelastic demand is when the elasticity is less than one. So, according to this, the demand is inelastic because the elasticity is 0.77 and this number is less than 1.