Answer:
1.$1,500,000
2.62.50%
3.13.20%
Explanation:
1.
Using this formula
Total Capital investment *Target return on investment=Target operating income
Hence:
$15,000,000x10%
= $1,500,000
2.
Target revenues$3,900,000
Less Variable costs1,500,000
Contribution margin2,400,000
LessFixed costs 900,000
Target operating income$1,500,000
$13 per case must be charge in order to earn the target operating income.
Markup per unit/Full cost per unit
=Markup on full costs
($5.00/$8.00)= 62.50%
3.
Target revenues$4,320,000
Less Variable costs1,440,000
Contribution margin2,880,000
Less Fixed costs900,000
Target operating income$1,980,000
Return on investment for Zoom−o−liciousis
will be 13.20%
Increasing the selling price will be a good idea reason been that the operating income have increase without increasing invested capital, which lead to a more higher return on the investment.
Lock Division of Morgantown Corp. sells 80,000 units of part Z-25 to the outside market. Part Z-25 sells for $40, has a variable cost of $22, and a fixed cost per unit of $10. The Lock Division has a capacity to produce 100,000 units per period. The Cabinet Division currently purchases 10,000 units of part Z-25 from the Lock Division for $40. The Cabinet Division has been approached by an outside supplier willing to supply the parts for $36. What is the effect on Morgantown's overall profit if the Lock Divisi
Answer:
The effect on Morgantown's overall profit is $140,000 decrease in Morgantown's profits
Explanation:
In order to calculate the effect on Morgantown's overall profit we would have to make the following calculations:
Contribution margin per unit for Lock Division = Selling price – Variable costs = $40 - $22 = $18
Contribution lost by lock division if Cabinet division buys from outside = $18 * 10,000 = $180,000
Cost per unit saved by Cabinet division = $40 - $36 = $4
Total cost saved by cabinet division = $4 * 10,000 = $40,000
Net decrease in profit = Contribution lost – Cost saved = $180,000 - $40,000 = $140,000
Therefore, the effect on Morgantown's overall profit is $140,000 decrease in Morgantown's profits.
McGaha Enterprises expects earnings and dividends to grow at a rate of 28% for the next 4 years, after the growth rate in earnings and dividends will fall to zero, i.e., g = 0. The company's last dividend, D0, was $1.25, its beta is 1.20, the market risk premium is 5.50%, and the risk-free rate is 3.00%. What is the current price of the common stock?
Answer:
The current price of the common stock is $29.05
Explanation:
Cost of Equity = Rf + beta x MRP = 3% + 1.20 × 5.50% = 9.6%
Dividend in the n the year = D₀ × [tex](1+g)^n[/tex]
D₁ = $1.25 × 1.25 = $1.56255
D₂ = $1.5625 × 1.25 = $1.9531
D₃ = $1.9531 × 1.25 = $2.44
D₄ = $2.44 × 1.25 = $3.052
Terminal value = D₄ × [tex](1+g5)/r5-g5[/tex]
= $3.052 x (1+0.0) ÷ (9.60 - 0.0)
= $31.79
Total value in 4th year = $3.052 + $31.79 = $34.8409
Total cash flows = $1.5625, $1.9531, $2.4414, $34.8409
(Present value Cash-flows at 9.60% ) $1.4256, $1.6260, $1.8544, $24.1461
= $29.05
Current price = $29.05
Richard Palm is the accounting clerk of Olive Limited. He uses the source documents such as purchase orders, sales invoices and suppliers’ invoices to prepare journal vouchers for general ledger entries. Each day he posts the journal vouchers to the general ledger and the related subsidiary ledgers. At the end of each month, he reconciles the subsidiary accounts to their control accounts in the general ledger to ensure they balance. Discuss the internal control weaknesses and risks associated with the above proce
Answer:
Lack of segregation of duties.
Explanation:
Internal Controls are set of rules and guidelines that are followed to ensure effectiveness of business operations. The main risk in the business is weak internal controls. There are some organizations with strong internal controls but implementation of such controls is a challenge for organizations. There are human errors, IT security risks, fraud and compliance risk.
The risks associated with Olive limited is that there is no segregation of duties, Richard Palm is preparing journal vouchers, posts the journal vouchers and reconciles the balance himself. If he makes an error in recording a transaction there is no one who reviews his work and can identify an error. Also if Richard is involved in a fraud and collaborates with purchase department or sales department staff, he can pass a transaction without any supervision.
Ayayai Corporation reported net income of $50,700 in 2020. Depreciation expense was $17,900. The following working capital accounts changed. Accounts receivable $12,000 increase Available-for-sale debt securities 17,100 increase Inventory 7,200 increase Nontrade note payable 15,400 decrease Accounts payable 13,600 increase Compute net cash provided by operating activities.
Answer:
Ayayai Corporation
Statement of Cash Flows
For the Year Ended December 31, 202x
Cash flows from operating activities:
Net income $50,700
Adjustments to reconcile net income:
Depreciation expense $17,900Increase in accounts payable $13,600Increase in accounts receivable ($12,000)Increase in AFS securities ($17,100)Increase in inventory ($7,200) ($4,800)Net cash flow provided by operating activities $45,900
Notes payable are part of the financing activities of the company, they are not part of the operating activities. So any change in the value of notes payable must be included in the cash flows from financing activities.
Who is following the law when it comes to protecting investors’ funds?
Answer:
A mutual fund advisor who informs investors about risks is following the law when it comes to protecting investors’ funds
Explanation:
Answer:B (a mutual fund advisor who informs investors about risks)
Explanation:
5.Greek Peak is a ski resort in upstate New York. The company sells lift tickets, ski lessons, and ski equipment. It operates several restaurants and rents townhouses to vacationing skiers. The following hypothetical December 2013 transactions are typical of those that occur at the resort.a)Borrowed $500,000 from the bank on December 1, signing a note payable, due in six months.b)Purchased a new snowplow for $20,000 cash on December 31.c)Purchased ski supplies for $10,000 on account.d)Incurred $22,000 in routine maintenance expenses for the chairlifts; paid cash.e)Received $72,000 for season passes (beginning in the new year).f)Daily lift passes were sold this month for a total of $76,000 cash.g)Received a $320 deposit on a townhouse to be rented for five days in January
Answer and Explanation:
The journal entries are shown below:
a. Cash Dr $500,000
To Short term Note payable $500,000
(Being the borrowed amount is recorded)
Cash is assets and short term note payable is liabilities
b. Equipment Dr $20,000
To cash $20,000
(Being the equipment purchased for cash is recorded)
Equipment and cash both are assets
c. Supplies Dr $10,000
To Account payable $10,000
(Being the purchase of supplies on the account is recorded)
Supplies are assets and account payable is liabilities
d. Repairs and maintenance expense Dr $22,000
To Cash $22,000
(Being the routine maintenance expenses paid for cash is recorded)
Repair and maintenance expense is an expense and cash is assets
e. Cash Dr $72,000
To Unearned revenue $72,000
(Being cash received is recorded)
Cash is assets and unearned revenue is liabilities
f. Cash Dr $76,000
To Service revenue $76,000
(Being cash received is recorded)
cash is assets and service revenue is revenue
g. Cash Dr $320
To Unearned revenue $320
(Being cash received is recorded)
Cash is assets and unearned revenue is liabilities
History of management thought (Connect, Perform)
Management of organizations has a long history. Consider why the study of this history is important as you answer the question below.
Medifast, a company that makes weight-loss products, recently transitioned from owning weight-loss centers to operating them as franchises, a new business model for the firm. What benefit could CEO Michael C. MacDonald gain from an awareness of the history of management?
1. By studying patterns that recur in different eras, he can see what management tools will work best in his company's environment.
2. He can document other companies' successes, especially as they have recovered from adversity, and show his managers there is no excuse for failure.
3. Through understanding how organizations have worked in the past, he can ensure that Medifast does not repeat past practices, instead adopting an entirely innovative approach.
Millennials (workers who were born from roughly 1982 to 2002) have different values than members of previous generations. They are especially motivated by managers who are friendly and give them lots of feedback. They also want opportunities to learn new skills and be entrepreneurial. This is an example of ______ change that impacts how managers can best achieve organizational objectives.
Answer: 1. 1. By studying patterns that recur in different eras, he can see what management tools will work best in his company's environment.
2. Social
Explanation:
1. It is often said that without knowing where we've been, we cannot know where we are going. This is why History in a general sense is important, it enables us know how things were done in the past so that we may know how to do things now. Specifically to Management, when the CEO studies the history of Management, he can see where Management has been, he can see what strategies have worked and which happens and in what conditions those strategies worked. After studying these patterns and strategies, he can then figure out how best to manage his current Environment based on those.
2. Social change refers to how the Environment of a Variable has changed in terms of what is expected of the people in it. What new norms or Cultural practices are now held in high regard as opposed to previous times.
Millennials have different values from those of the previous generations which means that there has been a Social Change that managers have to adapt to in order to be able to best achieve Organizational goals.
Entry for Issuing Materials Materials issued for the current month are as follows: Requisition No. Material Job No. Amount 103 Plastic 400 $ 2,800 104 Steel 402 24,000 105 Glue Indirect 1,620 106 Rubber 403 3,200 107 Titanium 404 31,600 Journalize the entry to record the issuance of materials. For a compound transaction, if an amount box does not require an entry, leave it blank.
Answer:
Details below
Explanation:
For issuance of an entry a single transaction is recorded that is work in process account is debited and materials inventory account is credited. In subsidiary ledgers job numbers are debited. For indirect Materials factory overhead is debited.
The given data is as follows.
Requisition No. Material Job No. Amount
103 Plastic 400 $ 2,800
104 Steel 402 24,000
105 Glue Indirect 1,620
106 Rubber 403 3,200
107 Titanium 404 31,600
The entry for materials requisitioned will be
A compound entry can be passed. In this the subsidiary ledger is not included.
Sr. No Particulars Debit Credit
Work In Process 61600
Factory Overhead 1620
Materials Inventory 63200
The one with a subsidiary ledger would look like this.
Sr. No Particulars Debit Credit
(Subsidiary)
1 Work In Process 61600
( Job No 400) 2800
( Job No 402) 24000
( Job No 403) 3200
( Job No 404) 31600
Factory Overhead 1620
Materials Inventory 63200
This is combined entry but separate entries can be passed as well .
Sr. No Particulars Debit Credit
Work In Process 61600
Materials Inventory 61600
Sr. No Particulars Debit Credit
Factory Overhead 1620
Materials Inventory 1620
Sr. No Particulars Debit Credit
(Subsidiary ledger)
( Job No 400) 2800
( Job No 402) 24000
( Job No 403) 3200
( Job No 404) 31600
Materials Inventory Plastic 2800
Materials Inventory Steel 24000
Materials Inventory Titanium 3200
Materials Inventory Rubber 31600
In each of the entries above materials inventory is credited.
You observe the following term structure: Effective Annual YTM 1-year zero-coupon bond 5.2 % 2-year zero-coupon bond 5.3 3-year zero-coupon bond 5.4 4-year zero-coupon bond 5.5 a. If you believe that the term structure next year will be the same as today’s, calculate the return on (i) the 1-year zero and (ii) the 4-year zero.
Answer:
Explanation:
a. If you believe that the term structure next year will be the same as today’s, calculate the return on (i) the 1-year zero and (ii) the 4-year zero.
b. Which bond provides a greater expected 1-year return? O 1-year zero-coupon bond O 4-year zero-coupon bond
The return on one year bond is = 5.2%
The price of 4 year bond today
[tex]=\frac{ 1000}{ (1.055)^4}[/tex]
Price of 4 year bond today = 807.22
If yield curves is unchanged, the bond will have 3-year maturity and price will be
[tex]=\frac{ 1000}{(1.054)^3}[/tex]
If yield curves is unchanged, the bond will have 3-year maturity and price will be = 854.04
Return
[tex]=\frac{ (854.04 - 807.22)}{807.22}[/tex]
Return = 5.8%
The longer term bond has given the higher return in this case at it's YTM fell during the holding period(4 -year)
A company just starting in business purchased three merchandise inventory items at the following prices. First purchase $60; Second purchase $67; Third purchase $64. If the company sold two units for a total of $209 and used FIFO costing, the gross profit for the period would be
Answer:
$82
Explanation:
As company Uses FIFO system, it will sell first two products
The cost price =($60 + $67 = 127).
So Gross profit = Selling Price-Cost Price
Gross Profit = 209-127
= $82
The gross profit for the period is $82
Based on this information, you can say that the overall "price level" ___________. A. remained unchanged during the year since the average price for the three goods stayed the same at $ 7.33. B. increased since cashews are now more expensive than almonds and pecans. C. stayed the same since the price of cashews increased but the price of almonds fell. D. there is not enough information to determine the change in the overall price level.
Answer:
D. there is not enough information to determine the change in the overall price level.
Explanation:
A price level is the average of current prices across the entire spectrum of goods and services produced in the economy. To determine the price level, information about current and past period's prices of a basket of goods and services is needed to be compared.
It is only the availability of two or more sets of such information that will enable a comparison to be made and for conclusions to be drawn.
You are an intern to the editor of a small-town newspaper in Mallsburg, Pennsylvania. Your boss, the editor, asks you to write the first draft of an editorial for this week's paper. Your assignment is to describe the costs and the benefits of building a new bridge across the railroad tracks in the center of town. Currently, most people who live in this town must drive 2 miles through thickly congested traffic to the existing bridge to get to the main shopping and employment center. The bridge will cost the citizens of Mallsburg $25 million, which will be paid for with a tax on their incomes over the next 20 years.
Required:
a.What are the opportunity costs of building this bridge?
b. What are the benefits that citizens will likely receive if the bridge is built?
c. What other factors might you consider in writing this editorial?
Roadside Markets has 6 percent coupon bonds outstanding that mature in 10 years. The bonds pay interest semiannually. What is the market price of the bond if the face value is $1,000 and the yield to maturity is 8 percent? Group of answer choices $1077.22 $864.10 $1071.06 $928.94
Answer:
The price of the bonds = $864.10
Explanation:
The value of the bond is the present value (PV) of the future cash receipts expected from the bond. The value is equal to present values of interest payment plus the redemption value (RV) discounted at the yield rate
Value of Bond = PV of interest + PV of RV
The PV of interest payment
A ×(1- (1+r)^(-n))/r
A- interest payment, r- interest rate, n- number of years
Interest payment = 6%× 1000 1/2=$30
Semi- interest yield = 8%/2 = 4%
PV = 30 × (1- 1.04^(-10×2))/0.04= 407.7
PV of redemption value
PV = RV× (1+r)^(-n)
RV- Redemption value - 1,000, r- interest rate, number of years, number of years- 3
PV = 1000× 1.04^(-10×2) = 456.3869462
The value of bond = 407.709 + 456.38 = 864.09
The price of the bonds = $864.10
Pekoe sold stock to his sister Rose for $12,000, its fair market value. Pekoe bought the stock 5 years ago for $16,000. Also, Pekoe sold Earl (an unrelated party) stock for $6,500 that he bought 3 years ago for $9,500. What is Pekoe's recognized gain or loss?
Answer:
The answer is $3000
Explanation:
Solution
Given that:
Pekoe sold stock to his sister rose for the amount = $12,000
The stock cost 5 years ago for Pekoe = $16,000
Pekoe sold earl stock for =$6,500
Previous stock for earl 3 years ago = $9,500
Now we have to find the recognized loss of Pekoe
THus,
The sale of stock to rose will be a loss of $ 4000
which is
($12,000 -$16,000) =$4000 loss
Thus,
The sale of stock to Earl will result to the following loss which is state below:
$6,500 - $9,500 = a loss of $3000
Therefore the recognized loss of pekoe is $3000 or -$3000
Note: A loss was recognized here, no gain earned
Answer:
Pekoe would recognize the loss of $3,000.
Explanation:
The sale of stock to Rose would result in a loss of $3,000 ($12,000 (FMV) - $16,000 (cost) = $4,000 loss).
Under the tax law, "losses from sale or exchange of property ... directly or indirectly" are disallowed between related parties. When the property is later sold to an unrelated party, any disallowed loss may be used to offset gain on that transaction.
The sale of stock to Earl (an unrelated party) also results in a loss ($6,500 (FMV) - $9,500 (cost) = $3,000 loss). This is considered an arms-length transaction.
Pekoe would recognize the loss of $3,000.
During the year, TRC Corporation has the following inventory transactions. Date Transaction Number of Units Unit Cost Total Cost Jan. 1 Beginning inventory 44 $ 36 $ 1,584 Apr. 7 Purchase 124 38 4,712 Jul. 16 Purchase 194 41 7,954 Oct. 6 Purchase 104 42 4,368 466 $ 18,618 For the entire year, the company sells 413 units of inventory for $54 each. Required: 1. Using FIFO, calculate ending inventory, cost of goods sold, sales revenue, and gross profit.
Answer:
TRC Corporation
Calculations, using FIFO:
a) Ending Inventory:
Ending Inventory in units = Units available for sale minus Units sold
Ending Inventory in units = 466 - 413 = 53 units
Ending Inventory value = Units x FIFO cost of last purchase = 53 x $42 = $2,226
b) Cost of goods sold:
Cost of goods sold = Beginning Inventory + Purchases - Ending Inventory
Cost of goods sold = $1,584 + 17,034 - 2,226 = $16,392
c) Sales Revenue:
Sales Revenue = Units sold x Selling price = 414 x $54 = $22,302
d) Gross Profit:
Gross Profit = Sales Revenue minus Cost of goods sold
Gross Profit = $22,302 - $16,392 = $5,910
Explanation:
a) Summary of Inventory Transactions:
Date Transaction Number of Units Unit Cost Total Cost
Jan. 1 Beginning inventory 44 $ 36 $ 1,584
Apr. 7 Purchase 124 38 4,712
Jul. 16 Purchase 194 41 7,954
Oct. 6 Purchase 104 42 4,368
b) Cost of goods available 466 $ 18,618
c) Sales 413 $ 54 $ 22,302
d) Dec. 31 Ending Inventory 53 42 $ 2,226
e) The FIFO (First-in, First-out) inventory method assumes that goods sold are from earlier inventory units, unlike Last-in, First-out (LIFO). This means that beginning and earlier purchased inventory units are sold first before the latest purchases. Using the FIFO method, the ending inventory is valued at the cost of the most recent inventory purchases.
The balance sheet and income statement shown below are for Koski Inc. Note that the firm has no amortization charges, it does not lease any assets, none of its debt must be retired during the next 5 years, and the notes payable will be rolled over.
Balance Sheet (Millions of $)
Assets 2016
Cash and securities $2,145
Accounts receivable 8,970
Inventories 12,480
Total current assets $23,595
Net plant and equipment $15,405
Total assets $39,000
Liabilities and Equity Accounts payable $7,410
Accruals 4,290
Notes payable 5,460
Total current liabilities $17,160
Long-term bonds $7,800
Total liabilities $24,960
Common stock $5,460
Retained earnings 8,580
Total common equity $14,040
Total liabilities and equity $39,000
Income Statement (Millions of $) 2016
Net sales $58,500
Operating costs except depreciation 54,698
Depreciation 1,024
Earnings before interest and taxes (EBIT) $2,779
Less interest 829
Earnings before taxes (EBT) $1,950
Taxes 683
Net income $1,268
Other data: Shares outstanding (millions) 500.00
Common dividends (millions of $) $443.63
Int rate on notes payable & L-T bonds 6.25%Federal plus state income tax rate 35%Year-end stock price $23.77A. What is the firm's current ratio?B. What is the firm's quick ratio?C. What is the firm's days sales outstanding? Assume a 365-day year for this calculation.D. What is the firm's total assets turnover?E. What is the firm's inventory turnover ratio?F. What is the firm's TIE?G. What is the firm's debt/assets ratio?H. What is the firm's ROA?I. What is the firm's ROE?
Answer:
A. 1.375
B. 0.648
C. 77.87 days
D. 1.5 times
E. 4.69 times
F. 3.35 times
G. 34 %
H. 4.63 %
I. 23.22%
Explanation:
A. What is the firm's current ratio
current ratio = current assets / current liabilities
= $23,595 / $17,160
= 1.375
B. What is the firm's quick ratio
quick ratio = (current assets - inventory) / current liabilities
= ($23,595 - $12,480) / $17,160
= 0.648
C. What is the firm's days sales outstanding Assume a 365-day year for this calculation.
days sales outstanding = Inventory / (Sales / 365)
= $12,480 / ($58,500 /365)
= 77.87 days
D. What is the firm's total assets turnover
total assets turnover = Sales / Total Assets
= $58,500 / $39,000
= 1.5 times
E. What is the firm's inventory turnover ratio?
inventory turnover ratio = Sales / Inventory
= $58,500 / $12,480
= 4.69 times
F. What is the firm's TIE?
Total Interest Expense (TIE) = Earnings before interest and taxes (EBIT) / Total Interest Expense
= $2,779 / $829
= 3.35 times
G. What is the firm's debt/assets ratio?
debt/assets ratio = Total Debt / Total Assets × 100
= ($5,460 + $ $7,800) / $39,000 × 100
= 34 %
H. What is the firm's ROA?
Return on Assets (ROA) = Earnings Before Interest After Tax (EBIAT) / Total Assets × 100
= ($1,268 + ($829 × 65%)) / $39,000 × 100
= 4.63 %
I. What is the firm's ROE?
Return on Equity (ROE) = Net Income / Total Shareholders Funds
= $1,268 / $5,460 × 100
= 23.22%
If the price of a six-pack of Pepsi falls from $4 to$3 and the quantity purchased increases 80 percent, then demand is
Answer:
low
Explanation:
If the price decreases and the quantity increases, the demand is low.
If the price increases and the quantity decreases, the demand is high.
Hope this helps!!! PLZ MARK BRAINLIEST!!!
The Biltmore Trust is a simple trust. Crawford is its sole beneficiary. In thecurrent year, the trust earns $3,200 in taxable interest and $8,000 in tax-exempt interest. In addition, the trust recognizes a $2,500 long-term capital gain.The trustee assesses a fee of $1,800 for the year.
a. Compute trust accounting income, where the trust agreement allocates fees andcapital gains to corpus.
b. Same as (a), except that fees are allocated to income.
Answer:
A. Trust agreement allocates fees and capital gains to corpus.
Particulars Amount
Taxable interest $3,200
Tax-exempt interest $8,000
Trust accounting income $11,200
B. When fees are allocated to income.
Particulars Amount
Taxable interest $3,200
Tax-exempt interest $8,000
Less: Fees ($-1,800)
Trust accounting income $9,400
If the current price of a market basket of goods is $850, the current year GDP deflator is 170, and the base year price index is 100, what is the price of the basket in real terms
Answer:
$500
Explanation:
DATA
The current price of the market basket of goods = $850
Current year GDP deflator = 170
In order to find the GDP in real terms, we should amend the GDP deflates formula
Formula: GDP deflator = [tex]\frac{NominalGDP}{RealGDP}[/tex] x 100
Lets put the values and amend the formula in order to find real GDP
170 = [tex]\frac{850}{RealGDP}[/tex] x 100
Real GDP = $500
Which best describes the role the applicants can fill in the company? Applicants 1 and 3 are best suited to work in network systems, while Applicant 2 could work in programming, information support, or interactive media. Applicants 2 and 3 are best suited to work in network systems, while Applicant 1 could work in programming, information support, or interactive media. Applicant 1 is best suited to work in network systems, while Applicants 2 and 3 could work in programming, information support, or interactive media. Applicant 3 is best suited to work in network systems, while Applicants 2 and 3 could work in programming, information support, or interactive media.
Incomplete question, however I made interferences from an employer perspective.
Answer:
Applicant 1 is best suited to work in network systems, while Applicants 2 and 3 could work in programming, information support, or interactive media.
Explanation:
From a performance point of view the programming, information support and interactive media roles of the company would be better handled by more than one individual since this roles involve more responsibilities that could not be handled by one individual.
The network systems role can better be managed by Applicant 1 only as it is a task that could be handled by a single employee.
Answer:
C. Applicant 1 is best suited to work in network systems, while Applicants 2 and 3 could work in programming, information support, or interactive media.
Explanation:
Took The TestThe following extract was taken from the worksheet of Special Events Bakers for the year 2019.
Special Events Bakers
Worksheet
December 31, 2019
Unadjusted Trial Balance Adjusted Trial Balance
Account Names Debit Credit Debit Credit
Cash $ 6,300 $6,300
Equipment 15,600 15,600
Accumulated Depreciation - Equipment $7,700 $ 9,400
For the above information, determine the amount of Depreciation Expense for the equipment used in the business.
Answer:
The amount of Depreciation Expense for the equipment used in the business is $1,700
Explanation:
In order to calculate the amount of Depreciation Expense for the equipment used in the business we would have to make the following calculation:
amount of Depreciation Expense for the equipment used in the business= Adjusted Trial Balance-Unadjusted Trial Balance
amount of Depreciation Expense for the equipment used in the business= $ 9,400-$7,700
amount of Depreciation Expense for the equipment used in the business= $1,700
The amount of Depreciation Expense for the equipment used in the business is $1,700
Prepare Journal Entries in a Revenue Journal Horizon Consulting Company had the following transactions during the month of October: Oct. 2 Oct. 3 Oct. 14. Oct. 24 Oct. 29 Issued Invoice No. 321 to Pryor Corp. for services rendered on account, $380 Issued Invoice No. 322 to Armor Inc. for services rendered on account, $540. Issued Invoice No. 323 to Pryor Corp. for services rendered on account, $190. Issued Invoice No. 324 to Rose Co. for services rendered on account, $790 Collected Invoice No. 321 from Pryor Corp.
a. Record the October revenue transactions for Horizon Consulting Company in the following revenue journal format revenue journal Accounts Rec. Dr DATE Invoice No. Account Debited Post. Ref Fees Earned Cr Oct. 2 Oct. 3 Oct. 14 Oct. 24 Oct. 31
b. What is the total amount posted to the accounts receivable and fees earned accounts from the revenue journal for October? Accounts receivable Fees earned c. What is the October 31 balance of the Pryor Corp, customer account assuming a zero balance on October 1?
Answer and Explanation:
The recording and the computations are as follows
a. The recording of the October revenue transactions are shown below:
DATE INVOICE NO. ACCOUNT DEBITED POST.REF.
ACCOUNT REC. DR. FEES EARNED CR.
Oct 2 321 Pryor Co.
380
Oct 3 322 Armor Co.
540
Oct 14 323 Pryor co.
190
Oct 24 324 Rose co.
790
Oct 31 1900
b) Now the total amount for account receivable and fees earned is
Account receivable = 1900
Fees earned = 1900
c) The October 31 balance is
October 31 balance
= $380 + $190 - $380
= $190
Your uncle just won the weekly lottery, receiving $375,000, which he invested at a 7.5% annual rate. He now has decided to retire, and he wants to withdraw $35,000 at the end of each year, starting at the end of this year. What is the maximum number of whole payments that can be withdrawn before the account is exhausted, i.e., before the account balance would become negative
Answer:
22
Explanation:
Calculation for the maximum number of whole payments that can be withdrawn before the account is exhausted
Using financial calculator
PV -375000
PMT 35000
I 7.50%
FV 0
Compute N
= 22.50
Approximately 22
Hence,maximum number of whole payment will be 22
Present value is the current value of a future sum of money or stream of cash flows. The discount rate determines the present value of future cash flows.
Answer:-19.03158647
Present value (PV): $375,000 Rate: 7.5% per annual Payment (PMT) : $35,000 per year
We can use excel to calculate the maximum number of whole payments that can be withdrawn before the account is exhausted.
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George is 73 years old and retired. He was told that he should withdraw $15,000 from his 401(k) to meet his required minimum distribution. George does not feel like he needs the money, so he decides not to take his withdrawal. Which of the following describes the taxable consequence of his decision?A : If George can prove to the IRS that he does not need to take a required minimum distribution to pay his bill, he will not have to pay taxes.B : George will have to pay $15,000 in taxes because when it comes to required minimum distributions if you do not use it, you will use it.C : George will have to pay $1,500, which is the 10% penalty for failing to take the required minimum distribution.D : George will have to pay $7,500, which is the 50% tax on the amount that he should have taken for his required minimum distribution.
Answer:
D : George will have to pay $7,500, which is the 50% tax on the amount that he should have taken for his required minimum distribution.
Explanation:
Currently, Required Minimum Distributions (RMDs) have been suspended for the entire 2020 due to CARES Act. But under normal circumstances, Roger would be penalized and 50% of the RMD not retired would be withheld by the IRS. That is why people generally withdraw the RMDs even if they do not need them.
A project consists of three activities: A, B, and C. Activities A and B can begin at time 0 (start of the project), but activity C can only start after B is completed. The project ends when all activities are completed. The durations of the activities were simulated 10 times and the following values were obtained: Run A Duration B Duration C Duration 1 51 48 17 2 60 48 19 3 30 39 19 4 31 48 22 5 30 31 14 6 41 16 17 7 44 12 6 8 44 12 10 9 45 43 9 10 60 41 10 Based on the simulated numbers given above, what is the average completion time of the whole project?
Answer:
Explanation:
Run A Duration B Duration C Duration 1 51 48 17 2 60 48 19 3 30 39 19 4 31 48 22 5 30 31 14 6 41 16 17 7 44 12 6 8 44 12 10 9 45 43 9 10 60 41 10 Based on the simulated numbers given above, what is the average completion time of the whole project?
Since B is the predecessor of C.
Project completion time for each run will be calculated as Maximum (Duration of A, Duration of B +Duration of C).
Represent
Run = R
Duration of A = DA
Duration of B = DB
Duration of C = DC
Project Completion time = PT
R DA DB DC PT
1 51 48 17 48 + 17 = 65
2 60 48 19 48 + 19 = 67
4 31 48 22 48 + 22 = 70
5 30 31 14 31 + 14 = 45
6 41 16 17 41
7 44 12 6 44
8 44 12 10 44
9 45 43 9 43 + 9 = 52
10 60 41 10 60
Total = 546
Total Project completion time in 10 Stimulations = 546
Average project Completion time = 546/10 = 54.6
Therefore, average Project completion time is between 53 and 56 days.
At the beginning of Year 2, Oak Consulting had the following normal balances in its accounts:
Account Balance
Cash $29,400
Accounts receivable 21,600
Accounts payable 12,000
Common stock 28,300
Retained earnings 10,700
The following events apply to Oak Consulting for Year 2:
Provided $68,400 of services on account.
Incurred $3,100 of operating expenses on account.
Collected $47,400 of accounts receivable.
Paid $31,100 cash for salaries expense.
Paid $13,590 cash as a partial payment on accounts payable.
Paid a $8,500 cash dividend to the stockholders.
Required:
a. What is the amount of net income for the year?
b. What is the amount of change in retained earnings for the year?
Answer:
a. What is the amount of net income for the year?
$34,190b. What is the amount of change in retained earnings for the year?
increased by $25,690Explanation:
net income:
total service revenue $68,400salaries expense -$31,100operating expenses -$3,100net income = $34,190change in retained earnings = net income - dividends = $34,190 - $8,500 = $25,690
Revenue and expenses are recorded on the periods that they occur, regardless of when they are collected or paid respectively.
You are considering buying a piece of industrial equipment to automate a part of your production process. This automation will save labor costs by $35,000 per year over 8 years. The equipment costs $200,000. Should you purchase the equipment if your interest rate is 10%?
Answer:
No, you should not purchase the equipment if your interest rate is 10% because you would spent more money on the equipment than what you would save in labor costs.
Explanation:
First, you have to calculate the total amount that you would save in 8 years which is the result of multiplying the amount you save per year for the number of years:
$35,000*8=$280,000
Second, you have to calculate the total amount you would have to pay to purchase the equipment if your interest rate is 10% using the following formula:
A= P(1+rt)
A= accrued amount
P= principal amount: $200,000
r= rate: 0.1
t= time period: 8
A= 200,000*(1+(0.1*8))
A= 200,000*1.8
A= 360.000
According to this, in 8 years you would save $280,000 in labor costs but you would have to pay $360,000 for the equipment which means that you will pay more for the machine than what you would save in costs. Because of this, you should not purchase the equipment if your interest rate is 10%.
Bell expects to produce 1 comma 800 units in January and 2 comma 155 units in February. The company budgets 3 pounds per unit of direct materials at a cost of $ 10 per pound. Indirect materials are insignificant and not considered for budgeting purposes. The balance in the Raw Materials Inventory account (all direct materials) on January 1 is 4 comma 950 pounds. Bell desires the ending balance in Raw Materials Inventory to be 20% of the next month's direct materials needed for production. Desired ending balance for February is 4 comma 860 pounds. Prepare Bell's direct materials budget for January and February.
Answer:
Instructions are below.
Explanation:
Giving the following information:
Production:
January= 1,800 units
February= 2,155 units
The company budgets 3 pounds per unit of direct materials at a cost of $ 10 per pound.
Beginning inventory= 4,950 pounds.
Desired ending inventory= 20% of the next month's direct materials needed for production.
Desired ending balance for February is 4,860 pounds.
To calculate purchases, we need to use the following formula:
Purchases= production + desired ending inventory - beginning inventory
January (in pounds):
Production= 1,800*3= 5,400
Desired ending inventory= (2,155*3)*0.2= 1,293
Beginning inventory= (4,950)
Total= 1,743
Total cost= 1,743*10= $17,430
February (in pounds):
Production= 2,155*3= 6,465
Desired ending inventory= 4,860
Beginning inventory= (1,293)
Total= 10,032
Total cost= 10,032*10= $100,320
Bobby Jones, an accountant for ABC Corporation, has been suspected of committing fraud. Some information already gathered about the fraud points to Bobby Jones as the most likely perpetrator. In his scheme, Bobby supposedly stole more than $5 million over the past three years. Due to the magnitude of the fraud and to set an example in the company, ABC decides to prosecute Bobby both civilly and criminally.
Describe What will happen to bobby jones during the civil litigation,including the stages of civil litigation that he and ABC will go through.
Answer:
In the civil litigation process what will happen to Bobby Jones are in four stages which are Inquiry and Pleading, Discovery, Motion Practice and Negotiation and Trial and Appeal.
Explanation:
Four steps are involved in the process of civil litigation stated as follows:
In this staged a complaint is first issued against Bobby Jones by the ABC Corporation which elaborates on the offence and also points out the financial compensation for the damaged or problems caused.
Inquiry and Pleading: The first step or phase is the inquiry and pleading.
In this staged a complaint is first issued against Bobby Jones by the ABC Corporation which elaborates on the offence and also points out the financial compensation for the damaged or problems caused.
(2) Discovery: This is where the various parties gives an effort to get more information as possible
(3) Motion Practice and Negotiation: This occurs prior to trial when bobby files motion to challenge the complaint issued against him.
(4)Trial and Appeal: The last stage is the trial and appeal. this occurs when the previous steps has failed.
In this step the trial is held, both Bobby and ABC Corporations seeks judgement from the judge and the judge issues the jury to put in the final verdict. If both parties are not satisfied with judgement received, they can appeal to a higher court to review the verdict or decision.
"Lizard National Bank purchases a three-year interest rate cap for a fee of 2 percent of notional principal valued at $50 million, with an interest rate ceiling of 11 percent and LIBOR as the index representing the market interest rate. LIBOR is 9 percent, 12 percent, and 13 percent at the end of each of the next three years, respectively. The total payments received (or paid) by Lizard, including the initial fee, are $____."
Answer: $500,000
Explanation:
An Interest Rate Cap is a Derivative Financial Instrument that works by paying the buyer for every year that the interest rate ceiling is exceeded.
Using the scenario above this is how it's works,
There is an Interest Rate Ceiling of 11%.
Any year that index which is this case is the London Interbank Official Rate (LIBOR) exceeds the 11%, the seller will pay the buyer the difference between the LIBOR and the Interest Rate Ceiling.
The Notional Principal is the amount on which the interest is based.
That means that in Year 1 with a LIBOR of 9 percent, the seller does not pay.
Second year LIBOR is 12 percent, the seller will pay 1% (12% - 11%)
Third year LIBOR is 13 percent, the seller will pay 2% (13% - 11%)
Lizard National Bank had to pay 2% of the notional Principal as a fee.
The amount that Lizard Receives from the seller is therefore,
= Total Received - Fees
= (1% + 2% - 2%) * 50,000,000
= 1% * 50,000,000
= $500,000
The total payments received by Lizard, including the initial fee, are $500,000.