Answer:
The effective annual cost to yourfirm if it chooses not to take advantage of the trade discount offered is:
= 18.25%.
Explanation:
a) Data and Calculations:
Terms 1/22, net 42: This effectively provides a discount of 1% if the firm pays its supplier within 22 days from the date of purchase. After the 22 days up to 42 days, the firm pays the full amount. This means that the cost of this discount can be annualized as 1% * 365/20 = 18.25%.
This means that if the firm chooses not to take advantage of the trade discount offered, it is actually losing 18.25%. per annum.
If a company has two projects of equal value to selected from how would they decide which one to choose for their budget?
Net income was $503,000 in 2020, $473,000 in 2021, and $521,000 in 2022. What is the percentage of change from (a) 2020 to 2021, and (b) from 2021 to 2022
Answer and Explanation:
The computation of the percentage of change is as follows;
a. For 2020 to 2021
= (Net income in 2021 - net income is 2020) ÷ (net income in 2020)
= ($473,000 - $503,000) ÷ ($503,000)
= -5.96% decrease
b .For 2021 to 2022
= (Net income in 2022 - net income is 2021) ÷ (net income in 2021)
= ($521,000 - $473,000) ÷ ($473,000)
= 10.15% increase
In this way it is calculated
Japan has been one of China's largest sources of imports, along with South Korea and the United States. Because there is still political enmity between China and Japan due to the Japanese occupation of parts of China during World War II, the best explanation for the present Japanese trade relationship with China is
Answer: c. geographical proximity
Explanation:
The Japanese and the Chinese have not been on the best of terms for centuries and this became worse in the 20th century with Japanese attacks on the Chinese and then after those ended with the second world war, Japan was and still is firmly in the U.S. camp which China does not appreciate.
This hasn't stopped Japan and China from trading however because they are so close to each other and so logistical benefits ensure that they are some of each others' biggest trading partners.
The Bronco Corporation exchanged land for equipment. The land had a book value of $126,000 and a fair value of $162,000. Bronco paid the owner of the equipment $16,000 to complete the exchange which has commercial substance. Required: 1. What is the fair value of the equipment
Answer:
$178,000
Explanation:
When a transaction has commercial substance :
Fair value of Asset = Fair Value of Asset given up + Cash paid
therefore,
Fair value of the equipment = $162,000 + $16,000
= $178,000
thus,
the fair value of the equipment is $178,000
oetz Corporation has gathered the following data on a proposed investment project (Ignore income taxes.): Investment required in equipment $ 30,000 Annual cash inflows $ 6,000 Salvage value of equipment $ 0 Life of the investment 15 years Required rate of return 10 % The company uses straight-line depreciation on all equipment. Assume cash flows occur uniformly throughout a year except for the initial investment. Refer to Exhibit 12B-1 and Exhibit 12B-2, to determine the appropriate discount factor(s) using the tables provided. The internal rate of return of the investment is closest to:
Answer:
10.25%
Explanation:
Internal rate of return is the discount rate that equates the after-tax cash flows from an investment to the amount invested
IRR can be calculated with a financial calculator
Cash flow = cash inflow - cash outflow
cash outflow = depreciation expense
Straight line depreciation expense = (Cost of asset - Salvage value) / useful life
$30,000 / 15 = $2000
Cash flow = $6000 - 2000 = $4000
Cash flow in year 0 = $-30,000
Cash flow in year 1 to 15 = 4,000
IRR = 10.24%
To find the IRR using a financial calculator:
1. Input the cash flow values by pressing the CF button. After inputting the value, press enter and the arrow facing a downward direction.
2. After inputting all the cash flows, press the IRR button and then press the compute button.
Inventory records for Marvin Company revealed the following: Date Transaction Number of Units Unit Cost Mar. 1 Beginning inventory 900 $ 7.26 Mar. 10 Purchase 520 7.76 Mar. 16 Purchase 452 8.36 Mar. 23 Purchase 510 9.06 Marvin sold 1,760 units of inventory during the month. Ending inventory assuming FIFO would be: (Do not round your intermediate calculations. Round your answer to the nearest dollar amount.)
Answer:
Ending inventory cost= $5,556.92
Explanation:
Giving the following information:
Mar. 1 Beginning inventory 900 $ 7.26
Mar. 10 Purchase 520 7.76
Mar. 16 Purchase 452 8.36
Mar. 23 Purchase 510 9.06
Units sold= 1,760
Under the FIFO (first-in, first-out) method, the ending inventory is calculated using the costs of the last units incorporated into inventory:
Units in ending invnetory= 2,382 - 1760= 622
Ending inventory cost= 510*9.06 + 112*8.36
Ending inventory cost= $5,556.92
Quantum Inc. has warrants outstanding that allow the holder to purchase 1.5 shares of stock per warrant at $30 per share (exercise price). Thus, each individual share can be purchased at $30 with the warrant. The common stock is currently selling for $36. The warrant is selling for $12.
Required:
a. What is the intrinsic (minimum) value of this warrant?
b. What is the speculative premium on this warrant?
c. What should happen to the speculative premium as the expiration date approaches?
Answer:
A. $9.00
B. $3.00
C. Decrease
Explanation:
a. Calculation to determine the intrinsic (minimum) value of this warrant
Using this formula
I = (M – E) × N
Where,
I represent Intrinsic value of a warrant
M represent Market value of common stock
E represent Exercise price of a warrant
N represent Number of shares each warrant entitles theholder to purchase
Let plug in the formula
I=($36 – $30) *1.5
I=$6*1.5
I = $9.00
Therefore the intrinsic (minimum) value of this warrant is $9.00
b. Calculation to determine the speculative premium on this warrant
Using this formula
S = W – I
Where,
S representSpeculative premium
W represent Warrant price
I represent Intrinsic value.
Let plug in the formula
S=$12-[($36 – $30) *1.5]
S=$12 – $9
S = $3.00
Therefore the speculative premium on this warrant is $3.00
c.What should happen to the SPECULATIVE PREMIUM as the expiration date approaches is for it to DECREASE and thereby approach $0.
When the general level of prices rises, the economy is experiencing ____.
Larance Detailing's cost formula for its materials and supplies is $1,910 per month plus $10 per vehicle. For the month of November, the company planned for activity of 86 vehicles, but the actual level of activity was 51 vehicles. The actual materials and supplies for the month was $2,430. The materials and supplies in the flexible budget for November would be closest to:
Answer:
$2,420
Explanation:
Calculation to determine what The materials and supplies in the flexible budget for November would be closest to:
Using this formula
Cost = Fixed cost + (Variable cost per unit × q)
Let plug in the formula
Cost= $1,910 + $10 × 51
Cost= $2,420
Therefore The materials and supplies in the flexible budget for November would be closest to:$2,420
Consider a stock with current year dividend equal to $2.00 per share. You believe the dividend will grow 15% per year for 10 years and 4% per year thereafter.The required equity rate of return (and your hurdle rate) is 10%. What is the fair price of the stock? Assuming the market price of the stock is $70, what is the expected return?
Answer:
a. Fair price of the stock = $79.82
b. The expected return is 7.29%
Explanation:
a. What is the fair price of the stock?
Note: See the attached file for the calculation of present values (PV) of dividends for year 1 to 10.
From the attached excel file, we have:
Previous year dividend in year 1 = Current year dividend = $2
Total of dividends from year 1 to year 10 = $25.74793130208810
Year 10 dividend = $8.09111547141582
Therefore, we have:
Year 11 dividend = Year 10 dividend * (100% + Dividend growth rate in year 11) = $8.09111547141582 * (100% + 4%) = $8.41476009027245
Share price at year 10 = Year 11 dividend / (Required equity rate of return - Perpetual dividend growth rate) = $8.41476009027245 / (10% - 4%) = $140.246001504541
PV of share price at year 10 = Price at year 10 / (100% + required equity rate of return)^Number of years = $140.246001504541 / (100% + 10%)^10 = $54.0709047493998
Therefore, we have:
Fair price of the stock = Total of dividends from year 1 to year 10 + PV of share price at year 10 = $25.74793130208810 + $54.0709047493998 = $79.82
b. Assuming the market price of the stock is $70, what is the expected return?
This can be calculated using the dividend discount model formula as follows:
P = D1 / (r - g) ............................ (1)
Where,
P = Market price of the stock = $70
D1 = Next dividend = Current dividend * (100% + Dividend growth rate in perpetuity) = $2 * (100% + 4%) = $2.30
r = Expected return = ?
g = Dividend growth rate in perpetuity = 4%, or 0.04
Substituting the values into equation (1) and solve for r, we have:
70 = 2.30 / (r - 0.04)
70(r - 0.04) = 2.30
70r - 2.80 = 2.30
70r = 2.30 + 2.80
70r = 5.10
r = 5.10 / 70
r = 0.0729, or 7.29%
Therefore, the expected return is 7.29%.
what are the name of the 7 contents
Answer:
Africa, Antartica, Dababy Land
Explanation:
Assume that the Fed increases the money supply when there is substantial unemployment in the economy. According to the quantity theory of money, if velocity is constant, then:
Answer:
Nominal GDP will increase.
Explanation:
Gain contingencies usually are recognized in a company's income statement when: Multiple Choice The gain is reasonably possible and the amount is reasonably estimable. The gain is certain The amount is reasonably estimable. The gain is probable and the amount is reasonably estimable.]
Answer: The gain is certain
Explanation:
A Gain contingency means that the company stands to make a gain in future if a certain event happens such as the company winning a lawsuit that would result in a good settlement figure for them.
According to U.S. GAAP, gain contingencies are not to be recognized unless it is certain that the gain is coming. If the gain is not certain and is recorded, the income is considered overstated.
Too Young, Inc., has a bond outstanding with a coupon rate of 6.7 percent and semiannual payments. The bond currently sells for $948 and matures in 24 years. The par value is $1,000. What is the company's pretax cost of debt
Answer:
4%
Explanation:
The company's pretax cost of debt is 4%
Other than living with your parents, what is another smart way to keep living
expenses down while in college?
Answer:put money in stocks
Explanation:it might be risky but you can strike gold I made 200 in a day and other people can get more, this is a graet way to make money.
Or you can buy caned food that you can save for longer and eat less
ssued 10,800 shares of common stock at $6.00 per share. Issued 20,400 shares of common stock at $8.20 per share. Reported a net income of $108,000. Paid dividends of $59,000. Purchased 3,100 shares of treasury stock at $10.20 (part of the 20,400 shares issued at $8.20). What is total shareholders' equity at the end of 2021
Answer:
$249,460
Explanation:
Calculation to determine total shareholders' equity at the end of 2021
Issued of stock $64,800
( 10,800 shares *$6.00 per share)
Issued of stock $167,280
(20,400 shares *$8.20 per share)
Net income of $108,000
Less Dividends ( $59,000)
Less Treasury stock ($31,620)
( 3,100 shares $10.20)
2021 Ending total shareholders' equity $249,460
Therefore The total shareholders' equity at the end of 2021 is $249,460
The net income reported on the income statement for the current year was $245,000. Depreciation was $40,000. Account receivable and inventories decreased by $12,000 and $35,000, respectively. Prepaid expenses and accounts payable increased, respectively, by $1,000 and $8,000. How much cash was provided by operating activities
Answer:
$339,000
Explanation:
Computation of operating activity as is as seen below;
= Net income + Depreciation + Accounts receivable + Inventories decrease - Prepaid expenses + Accounts payable increase
= $245,000 + $40,000 + $12,000 + $35,000 - $1,000 + $8,000
= $339,000
Therefore, the sum of $339,000 was provided as cash for operating activities.
Question Help At the Wild Cat Group Company, the cost of the library and information center has always been charged to the various departments based upon number of employees. Recently, opinions gathered from the department managers indicate that the number of engineers within a department might be a better predictor of library and information center costs. Total library and information center costs are $213,000. Department A B C Number of employees 145 540 140 Number of engineers 0 85 40 If the number of employees is considered the cost driver, what amount of library and information center costs will be allocated to
Answer:
$37,436.36
Explanation:
The computation of the amount of library and information center costs will be allocated to department A is shown below;
= Total library and information center costs × department A employees ÷ total number of employees
= $213,000 × 145 ÷ (145 + 540 + 140)
= $213,000 × 145 ÷ 825
= $37,436.36
hence, the amount would be $37,436.36
If 10,000 pounds of direct materials are purchased for $9,300 on account and the standard cost is $.90 per pound, the journal entry to record the purchase is Raw Materials Inventory 9,300 Accounts Payable 9,000 Materials Price Variance 300 Raw Materials Inventory 9,000 Materials Price Variance 300 Accounts Payable 9,300 Work In Process Inventory 9,300 Accounts Payable 9,000 Materials Quantity Variance 300 Raw Materials Inventory 9,300 Accounts Payable 9,300
Answer:
Raw Materials Inventory 9,000 Materials Price Variance 300 Accounts Payable 9,300
Explanation:
Based on the information given journal entry to record the purchase is
Dr Raw Materials Inventory $9,000
(10,000 pounds*$.90 per pound)
Dr Materials Price Variance $300
($9,300-$9,000)
Cr Accounts Payable $9,300
(To record purchase)
Lake Incorporated purchased all of the outstanding stock of Huron Company paying $961,000 cash. Lake assumed all of the liabilities of Huron. Book values and fair values of acquired assets and liabilities were: Book Value Fair Value Current assets (net) $ 130,300 $ 124,700 Property, plant, equip. (net) 614,000 769,000 Liabilities 151,800 175,000 Lake would record goodwill of:
Answer:
$242,300
Explanation:
Goodwill = Purchase Price - Net Assets taken over at Fair Value
where,
Purchase Price = $961,000
Net Assets taken over at Fair Value = $ 124,700 + $769,000 - $175,000 = $718,700
therefore,
Goodwill = $961,000 - $718,700 = $242,300
conclusion :
Lake would record goodwill of $242,300
Oriole Choice sells natural supplements to customers with an unconditional sales return if they are not satisfied. The sales returns period extends 60 days. On February 10, 2021, a customer purchases $3100 of products (cost $1550). Assuming that based on prior experience, estimated returns are 30%. The journal entry to record the actual return of $160 of merchandise includes a
Answer: See explanation
Explanation:
The journal entry to record the actual return of $160 of merchandise includes:
Debit Sales return and allowance $160
Credit Account receivable $160
Debit Returned Inventory $80
Credit Cost of goods sold $80
Note:
Returned inventory was calculated as:
= $160 × (1550/3100)
= $160 × 0.5
= $80
Clampett, Incorporated, converted to an S corporation on January 1, 2020. At that time, Clampett, Incorporated, had cash ($40,000), inventory (FMV $60,000, basis $30,000), accounts receivable (FMV $40,000, basis $40,000), and equipment (FMV $60,000, basis $80,000). In 2021, Clampett, Incorporated, sells its entire inventory for $60,000 (basis $30,000). Assume the corporate tax rate is 21 percent. Clampett, Incorporated's taxable income in 2021 would have been $1,000,000 if it had been a C corporation. How much built-in gains tax does Clampett, Incorporated, pay in 2021
Answer:
$2,100
Explanation:
Particulars Fair market value Basis Differences
Inventory $60,000 $30,000 $30,000
Account receivables $40,000 $40,000 $0
Equipment $60,000 $80,000 ($20,000)
Taxable gain $10,000
Tax rate 21%
Built in gains tax $2,100
So therefore, the built-in-gains tax that Clampett (Incorporated) will pay in 2021 is $2,100.
Consumers buy goods or services they want or need.
True
False
Answer:
True
Explanation:
Top Line Electronics has a piece of machinery that costs $600,000 and is expected to have a useful life of 4 years. Residual value is expected to be $100,000. Using the double-declining-balance method, what is depreciation expense for the first year
Answer:
Annual depreciation= $250,000
Explanation:
Giving the following information:
Purchase price= $600,000
Salvage value= $100,000
Useful life= 4 years
To calculate the annual depreciation, we need to use the following formula:
Annual depreciation= 2*[(book value)/estimated life (years)]
Annual depreciation= 2*[(600,000 - 100,000) / 4]
Annual depreciation= $250,000
indirect materials are those used that enter into and become a major part of the finished product true or false
Lore Co. changed from the cash basis to the accrual basis of accounting during 2005. The cumulative effect of this change should be reported in Lore's 2005 financial statements as a Group of answer choices Prior period adjustment resulting from the correction of an error. Prior period adjustment resulting from the change in accounting principle. Adjustment to retained earnings for an accounting principle change. Component of income after extraordinary item.
Answer: Prior period adjustment resulting from the correction of an error.
Explanation:
The Cash basis method is not acceptable under both IFRS and U.S. GAAP accounting principles and these are the principles followed by the majority of the world so Lore Co. was using the cash basis in violation of both conventions which means that their accounting records before the change are considered wrong and full of errors.
In changing to the acceptable principles, they are correcting that error and need to adjust prior periods for that error as well.
A very large company would be most likely to have a(n) ___ at the ahead of its accounting department.
A. Executive vice president
B. Controller
C. Chief financial officer
D. Accounting manager
A very large company would be most likely to have a Chief financial officer as the head of its accounting department.
The Chief Financial Officer (CFO) would most likely be in charge of the accounting division of a very large corporation. A company's Chief Financial Officer (CFO) is in charge of all financial operations, including accounting, budgeting, financial reporting, and forecasting. The day-to-day accounting activities of a corporation are managed by the controller, who holds a mid-level role. The basic duties of the accounting manager include leading a group of accountants and supervising the creation of financial statements and reports. Even though the executive vice president may be in charge of the entire organization, they could not have specific knowledge of accounting and finance.
A Chief Financial Officer (CFO) is a senior executive accountable for directing the financial actions of a firm. Monitoring cash flow, assessing the firm's financial advantages and disadvantages, and creating strategies for financial expansion are all tasks assigned to the CFO. Also, they are in charge of supervising the creation of predictions and current financial reports. In conclusion, the CFO is essential to the efficient management of a company's finances.
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As a marketing term, __________ generally includes not only physical goods, but also services and ideas. Multiple Choice marketing invention merchandise product concept
Answer:
product
Explanation:
The product is an item that the company offer to its customer for buying the product. It is not only the goods that to be kept physically but it also consist of the services and ideas so that it become differentiate with the competitor. The product can be differentiate in terms of cost, quality, quantity, presentable form via having the innovative ideas
So, the 2nd last option is correct
As a general construction contractor, WDF INC. contracted to renovate schools in New York City. WDF subcontracted with JLG Architectural Products, LLC to supply windows for the renovation. Under the subcontract, a company called East Coast Window Installers Inc. was designated to install the windows for the project. The subcontract provided that JLG Architectural Products and East Coast Window Installers would perform and complete the subcontract work together. The subcontract also specifically acknowledged that JLG Architectural Products proposed the work in partnership with East Coat Window Installers. After completion of the project, a dispute over payment and the quality of workmanship arose between the parties. WDT claimed that JLG Architectural Products and East Coast Window Installers should be jointly and severally liable for any liability found against either party, because the two were partners in the window installation project. Was WDF correct
Answer:
WDF Inc. is correct. From the fact that JLG Architectural Products and East Coast Window Installers Inc. were partners in the window installation subcontract, they should be jointly and severally held liable for any liability arising from the window installation project unless they have contrary agreements clearly differentiating their liabilities in the partnership.
Explanation:
WDF Inc. = main contractor
JLG Architectural Products = subcontractor and partner to East Coast
East Coast Window Installers Inc. = subcontractor and partner to JLG
JLG Architectural Products and East Coast Window Installers Inc have formed a partnership when they come together to form a business or execute a business transaction jointly. A joint venture is a kind of partnership.
Black Corporation had a 1/1/17 balance in the Allowance for Doubtful Accounts of $21,000. During 2017, it wrote off $15,120 of accounts and collected $4,410 on accounts previously written off. The balance in Accounts Receivable was $420,000 at 1/1 and $504,000 at 12/31. At 12/31/17, Black estimates that 5% of accounts receivable will prove to be uncollectible. What should Black report as its Allowance for Doubtful Accounts at 12/31/17
Answer:
$25,200
Explanation:
Calculation to determine What should Black report as its Allowance for Doubtful Accounts at 12/31/17
Using this formula
12/31/17 Allowance for Doubtful Accounts=12/31 Accounts Receivable Balance*Estimated Uncollectibles accounts receivable percentage
Let plug in the formula
12/31/17 Allowance for Doubtful Accounts=$504,000*5%
12/31/17 Allowance for Doubtful Accounts=$25,200
Therefore What Black should report as its Allowance for Doubtful Accounts at 12/31/17 is $25,200