Answer:
Current assets = $34,700.
Explanation:
We know,
Total assets = Current assets + Non current assets ( property, plan and equipment).
Again, total assets = Liabilities + Owners equity
Again,
Liabilities = Current liabilities + Long term liabilities.
Finally, net working capital = Current assets - Current liabilities
Given,
Total assets = $74,300
net working capital = $22,900
owners' equity = $38,600
long-term debt = $23,900
Putting the values into the formulas,
Total assets = Liabilities + Owners equity
or, $74,300 = Liabilities + $38,600
or, Liabilities = $74,300 - $38,600
Liabilities = $35,700.
Again,
Liabilities = Current liabilities + Long term liabilities.
or, $35,700 = Current liabilities + $23,900
or, Current liabilities = $35,700 - $23,900
Current liabilities = $11,800.
Therefore, Net working capital = Current assets - Current liabilities
or, $22,900 = Current assets - $11,800
or, Current assets = $22,900 + $11,800
Current assets = $34,700.
The dangers of using slang in business writing include Group of answer choices obscuring meaning. using language that is too informal. using words that quickly go out of fashion. All answer choices are correct.
Answer:
The correct answer is letter "D": All answer choices are correct.
Explanation:
Slang should be avoided in business writing and any other formal writing. By using slang a writer shows a lack of professionalism. The message tends to be ambiguous with terms that could be appealing verbally but do not cover the same function written.
Business writing must be objective, straight-to-the-point, use unburied verbs, and avoid exuberance.
The dangers of using slang in business writing include the potential to obscure meaning, appear too informal, and use transient terms. Business writing demands formal, clear, and direct language, avoiding slang, unnecessary jargon, and misspellings to ensure professional and effective communication.
Explanation:The dangers of using slang in business writing include obscuring meaning, adopting language that is too informal, and employing terms that may quickly become outdated. It's important to use clear and direct words in business communications to maintain professionalism and clarity. Business writing should adhere to a formal style, avoiding contractions, colloquialisms, and slang, all of which can make the writing seem less professional and can be confusing to an international or diverse audience. Additionally, specific technical expressions that are used among experts in a field can be perplexing to non-experts and should be simplified when the target audience is broader.
It's crucial for business writers to frequently check their word choice to avoid misspellings that can change the intended meaning and to be cautious with word usage, making sure that terms are current and appropriate for the reader. While language is constantly evolving, and new technology-related terms frequently enter our lexicon, in a business context, it is essential to ensure that language remains accessible and professional to all readers.
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1. A parent company acquires all of a subsidiary's voting stock at the beginning of 2018. At the date of acquisition, the subsidiary's equipment had a book value of $40 million and a fair value of $15 million. The equipment had a 10-year remaining life, straight-line. Consolidation eliminating entry (O), on the consolidation working paper for 2021, has what effect on consolidated depreciation expense? A. Credit for $10 million B. Debit for $2.5 million C. Debit for $10 million D. Credit for $2.5 million
Answer:
D. Credit for $2.5 million
Explanation:
The depreciation expense to be recorded in the subsidiary individual accounts in respect of equipment is given below:
Depreciation expense to recorded in subsidiary accounts=$40 million/10
=$4 million
Since for the consolidated accounts we consider the fair value of the assets of the subsidiary and not the book values of assets, so for the purpose of consolidation, the depreciation expense of the equipment shall be recorded based on its fair value and not its book value in the following manner:
Depreciation expense to recorded in consolidated accounts=$15 million/10
=$1.5 million
Effect on consolidated depreciation expense= depreciation expense recorded in subsidiary accounts-depreciation expense recorded in consolidated accounts
Effect on consolidated depreciation expense=$4 million-$1.5 million
=$2.5 million
So based on the above calculation, the answer is D. Credit for $2.5 million
Answer:
B Debit for $2.5 million
Explanation:
Taking the book value and subtracting the fair value we get $25 mil
$40 MIL -$15 MIL=$25 MIL
So the depreciation expense over the ten years is
$25 mil/10 years= $2.5 mil
Welcome to the final week. For this week's discussion, please apply your knowledge from chapter 14 to answering the following questions. Acknowledging the push towards centralized purchasing and that BCI is a global firm, what purchasing related issues should Marc Biron consider in creating his supply plan for BCI's marketing group? For a few items on your list, provide some additional depth and detail in your posting.
Answer:
The Chapter referenced in the question speaks to Global Supply Management.
Global Supply Management: The objective of this practice is to distribute goods and services throughout a trans-national companies' global network n order to maximize profit and minimize waste.
Marc Biron who does not have any experience in Marketing was asked by his CEO to come up with a supply plan for the company's Marketing Group.
Marc's brief was to add value to the global Marketing Spend of a multinational Finance company by centralising the process as his boss had done with the IT Supply process with the objective of maximizing the companies profit, whilst eliminating or minimizing waste.
Some of the purchases related issues which Marc Biron would consider in creating his plan for BCI's Marketing are:
Source of Service Location and EvaluationLead Time and DeliveryExpedition of Services/Shipment/DeliveriesRisk of Supply Interruption due to Political, Labor, and Security ProblemsQualityExplanation:
1. Source of Service Location and Evaluation:
Marc in his plan would have to detail how he would go about electing responsive and responsible suppliers of marketing services. This is key given that BCI is a global business.
He would therefore require the services of a company that has the capacity to deliver the at that level.
He must first evaluate the capacity of the company. If information about potential companies are unavailable online such as their team, years of experience, financial capacity and similar projects executed, he may have to travel down to the Headquarters of such company.
Traveling down to such a may not be very cheap and as such needs to be properly planned.
2. Lead Time and Delivery
This concern would apply where the transaction involves the purchase of physical or tangible goods. Lead time is the latency between the initiation and completion of a process. For example, the lead time between the placement of an order and delivery of new cars by a given manufacturer might be between 2 weeks and 6 months, depending on various particularities.
In this case, Marc wants to ensure that the lead time for the purchase and delivery of any service is highly minimized.
3. Expedition of Services/Shipment/Deliveries
To expedite means to make (an action or process) happen sooner or be accomplished more quickly.
Because of distance, expediting an offshore supplier’s production/shipment is more difficult. This places a premium on knowing a supplier’s personnel and ensuring that they are responsive. Some firms also arrange to have an expediter on contract in the offshore country or to use personnel from a company-owned subsidiary closer to the supplier to assist with expediting problems. March would have to consider this very seriously given that his company operates in the financial services sector.
4. Risk of Supply Interruption due to Political, Labor, and Security Problems
The heightened risk of supply chain disruptions from terrorist acts, counterfeit goods, or unsafe products increases the time and cost of offshore sourcing. Marc must have and or acquire the knowledge and records about its products, where they were sourced, and how they were transported, because governments continue to increase their requirements for safety standards and compliance reporting.
The cost of correction for a product recall or scandal, including the cost of brand or image degradation, can be huge.
Risk management strategies and contingency planning are of even greater importance in the global economy. Marc must assess risks, establish a monitoring system, and communicate in time to implement a contingency plan.
Finally in this regard, Marc would have to demonstrate preference for a company that has business continuity contingencies as in the Marketing Service Provider selection process.
5. Quality
It is extremely important that there be a clear understanding between buyer and seller of the quality specifications. Misunderstandings can be quite costly, due to the distances and lead times involved. Also, there could be a problem in interpretation of drawings and specifications.
In addition, it is important that both buyer and seller agree on what quality control/acceptance procedures are to be used.
As more services are off-shored, all the challenges of defining and assuring quality services are increased by distance, language, and cultural diversity.
Marc must request a clear and unambiguous statement of work (SOW) from the elected service provider.
Cheers!
Martinez Manufacturing incurred $ 4 comma 000 for indirect labor in Department III. The journal entry to record indirect labor utilized, but not paid is ________. Process costing is used.
Answer:
debit Manufacturing Overhead, $4,000; credit Wages Payable
Explanation:
Remember that indirect labor expenses are added to the Factory Overhead account, therefore Martinez Manufacturing journal entry to record is to debit Manufacturing Overhead $4,000 and then credit Wages Payable since the expenses was not paid.
It is important to note that in any case a manufacturing company is to list the direct labor expense separately from its indirect labor and wages paid to other employees.
Martinez Manufacturing incurred $4,000 for indirect labor in Department III. The journal entry to record indirect labor utilized, but not paid is Debit Manufacturing Overhead; Credit Indirect Labor Payable. Process costing is used. So, the correct answer is c.
Here's an explanation:
Indirect labor refers to labor costs that cannot be traced directly to a specific product but are necessary for the production process.When indirect labor costs are incurred but not paid, they are recorded in the Manufacturing Overhead account.This overhead is considered a liability until paid, hence recorded as Indirect Labor Payable.This ensures proper tracking of expenses and liabilities in manufacturing accounting systems.Complete Question:
Martinez Manufacturing incurred $4,000 for indirect labor in Department III. The journal entry to record indirect labor utilized, but not paid is ________. Process costing is used.
a) Debit Work in Process Inventory; Credit Indirect Labor Payable
b) Debit Indirect Labor Payable; Credit Work in Process Inventory
c) Debit Manufacturing Overhead; Credit Indirect Labor Payable
d) Debit Indirect Labor Payable; Credit Manufacturing Overhead
Grand Gimmicks Company produces a single product with a current selling price of $170. Variable costs are $130 per unit, and fixed costs per month average $6,240. Management is considering increasing the selling price to $190 per unit. Assume that the cost of the product and monthly fixed expenses will not change as a result of the proposed increase in selling price. At the proposed increased selling price of $190 per unit, what dollar volume of sales per month is required to break-even? (Rounded)
Answer:
Break Even Sales Volume in Dollars= $ 19500
Explanation:
Break Even Sales Volume in Dollars= Fixed Costs/ Contribution Margin Ratio
Break Even Sales Volume in Dollars= Fixed Costs/ 1- (variable Costs/ Sales)
Break Even Sales Volume in Units = Fixed Costs/ Contribution Margin per Unit
Break Even Sales Volume in Dollars= Fixed Costs/ 1- (variable Costs/ Sales)
Break Even Sales Volume in Dollars= $6,240/1-(130/190)
Break Even Sales Volume in Dollars= $6,240/1-0.68
Break Even Sales Volume in Dollars= $6,240/0.32
Break Even Sales Volume in Dollars= $ 19500
Answer:
$19,760
Explanation:
The Net/operating income is the difference between the total sales and total costs, Total cost is made up of the fixed and variable cost.
Like the total sales, the total variable cost is also affected by the level of activities or units produced/sold.
Mathematically,
Net income = Total sales - variable cost - fixed cost
At breakeven point, the net income is zero as the total sales is equal to the total cost.
Let the number of units to be sold to break even be b
190b - 130b - $6,240 = 0
60b = $6,240
b = 6240/60
= 104 units
Dollar volume of sales per month is required to break-even
= 104 * 190
= $19,760
Brower is a holder of a promissory note obtained from AMCO Credit Union, Inc.
Regarding the defenses against payment of the note to which AMCO is subject, Brower, as an ordinary holder, is subject to _______.
Answer:
The same defenses
Explanation:
All actions on promissory notes, other contracts or bonds, whether express or implied, that the payment of money are subject to the kind of defense the payor, obligor, or debtor had against the payee, creditor or obligee. Based on the notice of transfer or assignment.
Final answer:
Brower, as the holder of a promissory note, is subject to the same universal defenses against payment as AMCO, including fraud and illegality, but not personal defenses specific to AMCO.
Explanation:
Brower, as an ordinary holder of a promissory note from AMCO Credit Union, Inc., is subject to the same defenses against payment of the note to which AMCO is subject. This generally includes any real defenses applicable universally, such as fraud, duress, illegality, or incapacity. However, as an ordinary holder, Brower would not be subject to personal defenses that could be raised against AMCO, were AMCO the one attempting to enforce the note.
You are considering moving your money to new bank offering a one-year CD that pays an 5 %5% APR with monthly compounding. Your current bank's manager offers to match the rate you have been offered. The account at your current bank would pay interest every six months. How much interest will you need to earn every six months to match the CD?
To match the interest rate of the new bank's CD with monthly compounding, we need to calculate the interest earned every six months at the current bank.
Explanation:To match the interest rate of the new bank offering a one-year CD with monthly compounding, we need to calculate the interest earned every six months. Let's assume the principal amount is $1000. To find the interest earned every six months at the current bank, we can use the formula for compound interest: A = P(1 + r/n)^(nt), where A is the future value, P is the principal, r is the annual interest rate, n is the compounding frequency per year, and t is the number of years.
Since interest is paid every six months, n would be 2. Plugging in the values, we have: A = 1000(1 + r/2)^(2*(1/2)), where r is in decimal form. We can solve for the interest earned every six months and compare it to the interest earned from the CD to see if they match.
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A company advertises that its products are environmentally friendly in order to sell to climate-conscious consumers at a higher price. What is this practice called?
Answer: Greenwashing
Explanation:
Greenwashing is the process of giving out a false impression or misleading the public about how the product of a company are more environmentally friendly. Companies have used greenwashing in commercials and press releases emphasizing their pollution minimization efforts and clean energy but in reality, the firm may not have a genuine commitment to environmental friendliness. Companies that make such claims are embroiled in greenwashing.
For example, a company might claim that their goods are made from recycled materials and this may be false. This is greenwashing.
John bought 1,000 shares of Intel stock on October 18, 2015, for $30 per share plus a $750 commission he paid to his broker. On December 12, 2019, he sells the shares for $42.50 per share. He also incurs a $1,000 fee for this transaction.a.) What is John's adjusted basis in the 1000 shares of Intel stock? b.) What amount does John realize when he sells the 1000 shares? c.) What is the gain/loss for John on the sale of his Intel stock? What is the character of the gain/loss?
Answer
A. $30,750
B.$41,500
C.$10,750
Explanation:
a.30×1,000= $30,000
30,000+750=$ 30,750
Therefore John’s basis in the 1,000 shares of Intel stock is $30,750.
b.1,000× 42.50= $42,500
42,500- 1,000= $41,500
Therefore John realizes $41,500
c.41,500- 30,750= $10,750
John’s gain on the sale of the Intel stock is
$10,750
M. Sunland Corporation has 20,000 shares of 8%, $100 par value, cumulative preferred stock outstanding at December 31, 2020. No dividends were declared in 2018 or 2019. If M. Sunland wants to pay $500,000 of dividends in 2020, what amount of dividends will common stockholders receive
The common stockholders of M. Sunland Corporation will receive $340,000 in dividends.
Explanation:The preferred stockholders of M. Sunland Corporation will receive dividends before the common stockholders.
Cumulative preferred stockholders have the right to receive any missed dividends in the future, in addition to the current year's dividends.
In this case, the preferred stockholders will receive $160,000 ($100 par value * 0.08 dividend rate * 20,000 shares) in dividends for 2020.
The remaining amount of $340,000 ($500,000 - $160,000) will then be distributed to the common stockholders.
You receive a regular quarterly bonus of $800 at work, and deposit it in a bank account with interest of 12%, compounded monthly. How much money will you have in your bank account after 3 years?
Answer:
$11,372.99
Explanation:
Since in the question, he interest is compounded monthly while the payments are made on quarterly basis. To balance these two first we find out the EAR which is shown below:
The EAR is
= (1 + APR ÷ number of years)^number of years - 1
= (1 + 12% ÷ 12)^12 - 1
= 12.68%
Now in quarterly it is
= {(1 + EAR)^(1 ÷ 4) - 1} × 4
= {(1 + 12.68% ÷ 4)^(1 ÷4) - 1} × 4
= 12.12%
Now we use the future value formula that is shown in the attachment
Present value = $0
Rate of interest = 12.12% ÷ 4 = 3.03%
NPER = 3 years × 4 quarters = 12
PMT = $800
The formula is shown below:
= -FV(Rate;NPER;PMT;PV;type)
So, after solving this, the future value is $11,372.99
Exercise 13-11 The following stockholders’ equity accounts, arranged alphabetically, are in the ledger of Eudaley Corporation at December 31, 2017. Common Stock ($6 stated value) $2,028,000 Paid-in Capital in Excess of Par—Preferred Stock 280,000 Paid-in Capital in Excess of Stated Value—Common Stock 851,000 Preferred Stock (8%, $100 par) 550,000 Retained Earnings 1,170,000 Treasury Stock (10,000 common shares) 120,000 Prepare the stockholders’ equity section of the balance sheet at December 31, 2017.
Answer:
EQUITY
Common stock $2,028,000
Preferred stock $550,000
Paid-in Capital excess of stated value- common stock $851,000
Paid-in excess of par - Preferred stock $280,000
Retained Earnings $1,170,000
Treasury stock -$120,000
Total Equity $4,759,000
Explanation:
The following information relates to Bramble Corp. for the year 2022.
Retained earnings, January 1, 2022 $47,040
Advertising expense $1,760
Dividends during 2022 4,900
Rent expense 10,190
Service revenue 61,250
Utilities expense 3,040
Salaries and wages expense 27,440
Other comprehensive income (net of tax) 390
Compute the net income.
Answer:
$18,810
Explanation:
The computation of the net income is shown below:
Net income = Service revenue - advertising expenses - rent expenses - utilities expense - Salaries and wages expense
= $61,250 - $1,760 - $10,190 - $3,050 - $27,440
= $18,810
We simply deduct the all expenses incurred from the service revenue so that the net income could be come
Net Income for Bramble Corp. in 2022 is calculated by subtracting all the expenses from total revenue. The result is $18,820. Other comprehensive income is not included in this calculation.
Explanation:To compute the net income for Bramble Corp., we first subtract the company's total expenses from its total revenues in the year 2022. Here's the calculation: Start with Service Revenue: $61,250. From this, we subtract the expenses: Advertising Expense $1,760, Rent Expense $10,190, Utilities Expense $3,040, and Salaries and Wages Expense $27,440. This gives us:
$61,250 - $1,760 - $10,190 - $3,040 - $27,440 = $18,820.
This is the Net Income before Other Comprehensive Income (OCI). Other Comprehensive Income is $390 and it isn't included in the calculation of net income. However, it is reported separately in the equity section of the Balance Sheet. So the Net Income for Bramble Corp. in 2022 is $18,820.
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On January 1, 2020, Hat Trick Manufacturing exchanged some equipment for a $750,000 zero-interest-bearing note due on January 1, 2023. The prevailing rate of interest for a note of this type at January 1, 2020 was 10%. The present value of $1 at 10% for three periods is 0.75. Hat Trick Manufacturing included __ as interest revenue on the 2021 income statement.
Answer:
61,198.47
Explanation:
First we solve for the present value of the note receivables at January 1st, 2021 As we are asked for the interest revenue on the 2021 incoem statment
[tex]\frac{Maturity}{(1 + rate)^{time} } = PV[/tex]
Maturity $750,000.00
time 2.00
rate 0.10000
[tex]\frac{750000}{(1 + 0.1)^{2} } = PV[/tex]
PV 619,834.7107
now, we calcualte the interest considering the 10% implicit interest
619,834.7107 x 0.10 = 61,198.47
This will be the interest revenu for the year 2021
If there is a sudden influx of various technology formats for the same type of product, consumers may delay their purchase as a result of the confusion. Companies try to avoid this occurrence by:
Answer:
The correct answer is letter "A": cooperating with one another.
Explanation:
In front of consumer hesitation about technology being introduced in the market, companies selling those products should join forces to keep buyers updated. They can achieve that by providing their sales team with flyers where the main attractive features of the new technology can be outlined promoting customers to request additional information to clerks in an attempt to have them close sales.
Besides, companies can organize events where all of them show consumers their products using the new technology introduced where customers can interact with it and learn more about how it works.
Peter owns 100 shares of a company. He receives a fixed rate of dividend from these shares. Which type of share has Peter purchased?
A.
equity shares
B.
preference shares
C.
ordinary shares
D.
priority shares
E.
investment security
Peter owns preference shares, which provide dividends at a fixed rate. In general, a shareholder can garner returns on stocks in two ways: dividends and capital gains.
Explanation:Peter has purchased
B. preference shares
. Preference shares, often used by corporations, offer dividends that are paid prior to common stock dividends and are fixed, which means they do not fluctuate with the company's fortunes. Shareholders, like Peter, who own these shares receive dividends at a fixed rate. Similar to owning any stock of a firm, as a shareholder, Peter possesses a partial ownership claim on the company, subject to the number of shares he owns.
It's crucial to understand the two ways a shareholder might receive rate of return on stocks: dividends and capital gains. A dividend represents a direct payment from the firm to its shareholders. A capital gain, meanwhile, is the increase in the stock value between when one buys and sells it.
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A competitive strategy to be the low-cost provider in an industry works well a. when price competition among rival sellers is especially sluggish. b. there are numerous ways to achieve product differentiation that have no value to buyers. c. buyers incur high costs in switching their purchases from one seller/brand to another. d. industry newcomers use introductory low prices to attract buyers and build a customer base. e. industry newcomers use high introductory prices to let buyers know they have a superior product to build a customer base.
Answer:
d. industry newcomers use introductory low prices to attract buyers and build a customer base
Explanation:
Competitive strategy of a low-cost provider seeks to create prices that are low so that competitors can not meet or exceed consumer savings for good or service of the same quality. A competitive strategy to be the low-cost provider in an industry works well when:
Industry newcomers use introductory low prices to attract buyers and build a customer base
When buyers incur low costs in switching their purchase from one seller or brand to another or when commodity based products prevails and minimal differential exists
Economics: a. studies human behavior when scarcity exists and choices must be made. b. does not accurately explain any human behavior since it is based on the assumption of rationality. c. is the only social science that can explain the existence and behavior of public institutions. d. is better at showing the way things ought to be than the other social sciences. e. does not provide a reasonable explanation of how people make decisions.
Answer: Economics studies the behaviour of human beings when there is scarcity and choices have to be made.
Explanation:
Economics is a social science i.e study of human behavior in relation to the manufacturing, distribution and consumption of products. Economics focal point is the interaction and behaviour of economic agents (households, firms and governments) and how economies work.
Economics is divided into microeconomics and macroeconomics. Microeconomics deals with the small elements in the economy such as interaction of markets and prices of certain products. Macroeconomics deals with the whole economy and issues discussed include unemployment, economic growth, inflation etc.
suppose that a commercial bank wants to buy treasury bills. these instruments pay $500 in one year and are currently selling for 5012. what is the the yield to maturity
Answer:
9.98%
Explanation:
YTM is the estimated return expected from an investment held until its maturity. it is a long term yield which is expressed in annual term
Annual Payment = $500
Current price = $5,012
Yield to maturity = ( Annual payment / Current price ) x 100
Yield to maturity = ( $500 / $5,012 ) x 100
Yield to maturity = 0.0998
Yield to maturity = 9.98%
To calculate the yield to maturity, we need to solve for the interest rate that equates the present value of the Treasury bills to the purchase price.
Explanation:The yield to maturity (YTM) is the annual rate of return anticipated on a bond if it is held until it matures. To calculate the yield to maturity, we need to solve for the interest rate that equates the present value of the Treasury bills to the purchase price. In this case, the Treasury bill pays $500 in one year and is currently selling for $5012.
We can start by setting up an equation:
5012 = 500/(1+r)
Where 'r' is the interest rate or the yield to maturity.
To solve for 'r', we can rearrange the equation:
(1+r) = 500/5012
Now, we can divide both sides by 5012 and subtract 1 to isolate 'r':
r = 500/5012 - 1
By calculating the value of 'r', we can determine the yield to maturity for these Treasury bills.
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The income statement for the year 2018 of Fugazi Co. contains the following information: Revenues $70000 Expenses: Salaries and Wages Expense $45000 Rent Expense 12000 Advertising Expense 10000 Supplies Expense 6000 Utilities Expense 2500 Insurance Expense 2000 Total expenses 77500 Net income (loss) $ (7500) After the revenue and expense accounts have been closed, the balance in Income Summary will be Entry field with incorrect answer a credit balance of $7500. a credit balance of $70000. $0. a debit balance of $7500.
Answer:
Explanation:
incorrect answer
a credit balance of $7500
correct answer
a debit balance of $7500.
Answer:
a credit balance of $7500
Explanation:
The income summary is where the elements of the income statement are closed. Revenue account is closed by crediting the income summary and debiting revenue. For expenses, credit expense and debit income summary.
For net loss, credit net loss and debit income summary. Where a profit or income was made, credit income summary and debit net income.
Hence the incorrect entry here is credit balance of $7500.
Heritage, Inc., had a cost of goods sold of $68,314. At the end of the year, the accounts payable balance was $15,486. How long on average did it take the company to pay off its suppliers during the year
Answer:
Heritage Inc. takes on average 83 days to pay off its suppliers during the years.
Explanation:
Trade payable days are the number of days in which company pays to its suppliers.
Use following formula to calculate number of days:
Trade Payable Days = ( Trade Payable / Cost of goods sold ) x 365
Trade Payable Days = ( $15,486 / $68,314 ) x 365
Trade payable days = 82.74 days = 83 days (Rounded off to whole number)
Heritage Inc. takes on average 83 days to pay off its suppliers during the years.
Jerome, Inc., paid $8,850 to make a debt investment in trading securities of Tedesco, Inc. On December 30, (within the same fiscal year), Jerome sold some of these debt securities that had a cost of $6,500 for $7,000 cash. Complete the necessary adjusting entry by selecting the account names from the pull-down menus and entering dollar amounts in the debit and credit columns.
Answer:
Date General Journal Debit Credit
Debt investment 8850
Cash 8850
Dec 30 Cash 7000
Debt investment 6500
Gain on sale of investment 500
Explanation:
It costs Homer's Manufacturing $0.45 to produce baseballs and Homer sells them for $6.00 a piece. Homer pays a sales commission of 5% of sales revenue to his sales staff. Homer also pays $12,000 a month rent for his factory and store, and also pays $79,000 a month to his staff in addition to the commissions. Homer sold 71,500 baseballs in June. If Homer prepares a contribution margin income statement for the month of June, what would be his operating income?
Explanation:
The preparation of the contribution margin income statement is presented below:
Sales (71,500 × $6) $429,000
Less: Variable cost
Commission of 5% of sales ($21,450)
Manufacturing cost (71,500 × $0.45) ($32,175)
Contribution margin $375,375
Less: Fixed cost
Monthly rent ($12,000)
Payment to staff ($79,000)
Net income $284,375
A marketing manager is attempting to decide whether a new product launch decision should be postponed until some additional marketing research can be conducted. Which question should this manager ask himself or herself?
Answer:
The correct answer is letter "C": Will the payoff from the research be worth the dollar expenditures for research?
Explanation:
Postponing the launch of a product implies losing sales opportunities. If the reason why the launch will be postponed is additional marketing research -whether necessary or not, the research itself implies expenditures. Thus, if choosing the research instead of the launch, the results of the study must bring good enough profits for the company after the launch to offset the delayed expenses of the additional study.
The common stock of Securetech Corporation consistently sells at a market price of 20 times earnings, i.e., at a p/e ratio of 20. What would be the most likely effect of a 10 cent increase in Securetech's basic EPS
Answer:An increase in market price of approximately $2 per share.
Explanation: A common stock is the stock of a company which entitles the owner certain right to ownership of a company, such as the ability to vote during annual general meetings and are also known to be popular to the population more than other types of stocks.
A TEN(10) PERCENT RISE IN SECURETECH'S BASIC EARNINGS PER SHARE WILL MOST LIKELY LEAD TO APPROXIMATELY $2 RISE IN THE MARKET PRICE OF
SECURETECH'S BASIC EARNINGS .
Mathematical calculations
10% increase= (10÷100)*20dollars
= 0.1*$20
=$2 increase in earning per share.
Managers should select the capital structure that A. maximizes the value of the firm. B. has no debt. C. is fully levered. D. minimizes taxes. E. produces the highest current level of net income.
Answer:
A. maximizes the value of the firm.
Explanation:
Managers should select the capital structure that "A", maximizes the value of the firm. He may select a capital structure with full debt or no debt, based on certain fact and conditions.
Capital Structure may result in Minimum taxes and generate Current level of Income but the most important is to maximize the value of the firm.
Beginners Run Ski Shop sells a pair of skis to Crystal. When Crystal first uses the skis, theysnap in two. The cause is something that Beginners Run did not know about and could not have discovered. Beginners Run breacheda. the merchant’s implied duty of inspection.b. the implied warranty of merchantability.c. no duty or warranty because Beginners Run knew nothing about the defect that madethe goods unsafe.d. no duty or warranty because consumers should reasonably expect to occasionally find a product that does not work as warranted.
Answer:
b. the implied warranty of merchantability
Explanation:
Implied warranty of merchantability refers to an implied assurance, in every sales transaction that the seller's goods are safe and fit for intended purpose of usage.
It represents an unspoken guarantee on the part of the seller that his goods conform to the acceptable standards and properly packaged and labeled and abide by the promises conveyed on their label.
The motive behind such a warranty being, the seller must properly inspect and test the quality of his goods before releasing them or making them available for sale in the market.
In the given case, the seller sold skis to the customer which cracked into two upon usage. The seller isn't aware of the cause of the consequence. Thus, the seller breached the principle of implied warranty of merchantabilty as per which, it should've first checked and inspected the skis before making them available for sale.
Beginners Run Ski Shop breached the implied warranty of merchantability when they sold skis to Crystal that broke due to an unknown defect. This warranty ensures that goods sold are fit for their general purpose. Sellers can be held liable even if they were unaware of the defect.
Explanation:The question deals with whether Beginners Run Ski Shop breached a duty or warranty when selling skis to Crystal that later snapped in two due to a defect the shop could not have known about. In such a scenario, Beginners Run would have breached the implied warranty of merchantability. This warranty is an implicit guarantee by the seller that the goods sold are fit for their general purpose and are of average quality and reliability within the industry. Since the skis broken during their first use, a time when any reasonable person would expect them to function correctly, they are not fit for their general purpose.
Even if a seller is unaware of a specific defect, they can still be held liable if the product is unsafe for its intended use, as sellers are expected to provide goods that are at least of average quality and reliability. In this case, the defect in the skis would make them unsafe for skiing, which is a breach of the implied warranty of merchantability, regardless of the seller's knowledge.
Safety standards and mechanisms can reduce the risks associated with imperfect information, and governments may impose these to ensure that goods meet certain levels of quality and safety, which also supports the expectation that goods should be fit for their general purpose when sold.
Talarczyk Company sold 10,000 Super-Spreaders on December 31, 2017, at a total price of $1,000,000 cash, with a warranty guarantee that the product was free of any defects. The cost of the spreaders sold is $550,000. The assurance warranties extend for a 2-year period and are estimated to cost $40,000. Talarczyk also sold extended warranties (service-type warranties) related to 2,000 spreaders for 2 years beyond the 2-year period for $12,000 cash. Given this information, determine the amounts to report for the following at December 31, 2017: sales revenue, warranty expense, unearned warranty revenue, warranty liability, and cash.
Answer:
Explanation:
Sales revenue to be reported - $1,000,000
Warranty expense - $40,000
Unearned warranty revenue - $12,000
Cash = 1,000,000+12,000 = $1,012,000
Warranty liability - $40,000
Here is a simplified balance sheet for Locust Farming: Locust Farming Balance Sheet ($ in millions) Current assets $ 42,524 Current liabilities $ 29,755 Long-term assets 46,832 Long-term debt 27,752 Other liabilities 14,317 Equity 17,532 Total $ 89,356 Total $ 89,356 Locust has 657 million shares outstanding with a market price of $83 a share. a. Calculate the company’s market value added. (Enter your answers in millions.) b. Calculate the market-to-book ratio. (Round your answer to 2 decimal places.) c. How much value has the company created for its shareholders as a percent of the investment of the equity holders?
Answer:
The market value added is $36,999 million
The market-to-book ratio 311.04%
The valued created as percentage of investment in equity is 211.04%
Explanation:
The company's market value added is the difference between market value of a company and amount of finance contributed by the providers of funds, both equity and debt-holders
It is denoted with below formula:
MVA=V-K
where V is the market valuation and K the book value
Since the debt market value is the same as book value, it implies that it is the same on both sides,the MVA can be taken as the difference market value of equity and book value of equity
Market value of equity=657*$83=$54531
Book value of equity$17532
MVA=$54531-$17532=$36,999
Market to book ratio=54531/17532=311.04%
The company has created for its shareholders the excess of market value of equity over book value, which $36,999 ($54531-$17532)
The value created as percentage of the investment of shareholders is
36999/17532=211.04%
The market value added for Locust Farming is -$4,698 million, the market-to-book ratio is 0.92, and the value created for shareholders is -26.79% of the investment of the equity holders.
Explanation:To calculate the market value added for Locust Farming, we need to find the difference between the company's market value and its book value. The market value can be calculated by multiplying the number of shares outstanding by the market price per share. In this case, the market value is $54,381 million (657 million shares * $83/share). The book value can be calculated by subtracting the total liabilities from the total assets. In this case, the book value is $59,079 million ($42,524 million + $46,832 million - $29,755 million - $27,752 million - $14,317 million). The market value added is the difference between the market value and the book value, which is -$4,698 million ($54,381 million - $59,079 million).
The market-to-book ratio can be calculated by dividing the market value by the book value. In this case, the market-to-book ratio is 0.92 ($54,381 million / $59,079 million).
To calculate the value created for shareholders as a percentage of the investment of the equity holders, we need to find the return on equity. The return on equity can be calculated by dividing the net income by the equity. In this case, the net income is the market value added (-$4,698 million) and the equity is $17,532 million. The return on equity is -26.79% (-$4,698 million / $17,532 million) or -0.2679 as a decimal.
Suppose the expected export demand for the US goods has fallen (say due to potentially intensifying trade war). What are the implications of this expected future change on the current exchange rate? Draw the diagram and explain.
Answer:
The export supply curve would shift upward as the demand for the exported goods will decrease, the supply of goods will decrease and the price of goods will increase (become more expensive to export). As a result of the trade war intensifying, the future of the exchange rate will increase as the market for exporting goods will become more volatile in trade. When the supply of goods decrease, it pushes up the price to purchase the export goods and will have a negative impact on the rate at which the exported goods are exchanged at. That means the exchange rate (like taxes and levies on export) will increase in price.
Explanation:
To understand this concept, you have to understand the definition of an export supply curve. An export supply curve is the value of the difference of the quantity to supplied (produced) to export less the the quantity demanded by consumers (who want imported goods).
Refer to the illustrated graph attached to understand the above information.