Answer:
c. The CPA's tax services will be reviewed by a taxing authority.
Explanation:
The requirement of the commissions and contingent fees rule is that, the CPA is prohibited from accepting such a form of payment when engaged in attest services for a client.
Therefore, The CPA’s tax services will be reviewed by a taxing authority.
A CPA can accept a contingent fee in providing tax services for an attest client if the CPA's tax services will be reviewed by a taxing authority. The correct answer is option C.
According to the AICPA Code of Professional Conduct, contingent fees are generally prohibited for attest clients. However, an exception exists for tax services that are reviewed by a taxing authority. This ensures that the CPA's independence is not compromised, as the fee depends on the outcome of the taxing authority's review rather than the client's preferences.
Contingent fees generally prohibited for attest clients.Exception for tax services reviewed by a taxing authority.Ensures CPA's independence and objectivity.This rule helps maintain the integrity of the CPA's work and adherence to professional standards, particularly when dealing with attest clients.
Whose responsibility is it to determine if all of the questions on an application have been answered?a. The agentb. The Clientc. The ownerd. None of these
Explanation:
Option A: Agent is the mediator who is responsible for answering all questions in the application.
Option B: The clients are not the person who can be taken into account for answering all the question. The client acts according to the agent
Option C: The owner does not have a role to answer question. So he cannot be taken into consideration. This option stands invalid.
Option D: None of these is invalid. Somebody has to be responsible for the said scenario.
The owner is responsible for determining if all of the questions on an application have been answered.
Explanation:The owner is responsible for determining if all of the questions on an application have been answered.
When an application is submitted, it is the owner's role to review it and ensure that all required questions have been answered. They have the authority to request additional information or clarification if needed.
The agent may assist the owner in reviewing the application, but ultimately, the responsibility lies with the owner.
Evan Company reports net income of $140,000 each year and declares an annual cash dividend of $50,000. The company holds net assets of $1,200,000 on January 1, 2017. On that date, Shalina purchases 40 percent of Evan's outstanding common stock for $600,000, which gives it the ability to significantly influence Evan. At the purchase date, the excess of Shalina's cost over its proportionate share of Evan's book value was assigned to goodwill. On December 31, 2019, what is the Investment in Evan Company balance (equity method) in Shalina's cost over its proportionate share of Evan's book value was assigned to goodwill. On December 31st, what was the investment in Evan company balance (equity method) in Shalina's record?a. $600,000b. $660,000c. $690,000d. $708,000
Answer:
D. $708,000
Explanation:
Step 1: Calculate the Value in excess of Cost over book value for the acquistion
a. Shalina Purchased 40% or Evans outstanding stock for $600,000
b. Evan's net assets was $1,200,000 on that same January 1, 2017
To calculate the excess value
Evan's Net Assets $1,200,000
The Book value of Shalina's acquisition ( 40% x $1,200,000) $480,000
Subtract: The Cost of Acquisition by Shalina ($600,000)
Total = Excess of Cost over Book Value for Acquisition $120,000
This excess is Assigned to Goodwill $120,000
Calculate Goodwill Amortization
= Excess of Cost over book value- Goodwill = $0 (since all were assigned to Goodwill)
Step 2: Calculate the Investment of Shalina in Evan's Company as at 31st December, 2019
Investment Cost by Shalina $600,000
Portion of 2017 Income accrued to Shalina (40% of $140,000) $56,000
Subract: Shalina Portion of Dividend declared (40% of $50,000) ($20,000)
Portion of 2018 Income accrued to Shalina (40% of $140,000) $56,000
Subract: Shalina Portion of Dividend declared (40% of $50,000) ($20,000)
Portion of 2019 Income accrued to Shalina (40% of $140,000) $56,000
Subract: Shalina Portion of Dividend declared (40% of $50,000) ($20,000)
Shalina's Investment in Evan as at 31st December, 2019 $708,000
Note: Since, Evans company declares the same profit of $140,000 and dividend of $50,000 yearly, it means Shalina's portion of investment should be calculated based on these same figures for the three years.
Unbiased Expectations Theory The Wall Street Journal reports that the rate on four-year Treasury securities is 1.60 percent and the rate on five-year Treasury securities is 2.15 percent. According to the unbiased expectations theory, what does the market expect the one-year Treasury rate to be four years from today, E(5r1)? (LG6-7)
Answer:
Explanation: Unbiased Expectations Theory states that current long-term interest rates contain an implicit prediction of future short-term interest rates. More specifically, the theory states that an investor should earn the same amount of interest from an investment in a single two-year bond today as that person would with two consecutive investments in one-year bonds.
From the above question:
1 + 1R5= {(1 + 1R4)4(1 + E(5r1))}1/51.0215
= {(1.016)4(1 + E(5r1))}1/5(1.0215)5
= (1.016)4(1 + E(5r1))(1.0215)5 / (1.016)4
= 1 + E(5r1)1 + E(5r1)
= 1.0438E (5r1) = 4.38%
Work teams often assume many activities traditionally reserved for managers. Which of the following is one of the responsibilities of work teams?
selecting new team members
scheduling work
coordinating work with customers and other units of the organization
My choice would be "Coordinating work with customer and other units of the organization".
Explanation:
The given options talk about team work and it purely depends on the responsibility assigned by Team lead to the team under him/her.
Selecting new member: It has to be done by Lead of team because he/ she will be aware of the future works and needs.Scheduling work: This is once again in focus with near future assignments and the Lead would be the right person to schedule work to his/her team.Coordinating work: This can be done by work teams, because they are the actual person who work for the customer and they possess skill to coordinate with minimum guidelines.Work teams in organizations often assume activities traditionally for managers including selecting new team members, scheduling work, and coordinating with customers and other units. This allows organizations to be more responsive to changes and needs while fostering a better understanding amongst team members and their tasks.
Explanation:In modern organizations, work teams often take on many of the activities traditionally managed by managers. Among these responsibilities are selecting new team members, scheduling work, and coordinating work with customers and other units within the organization. This shift allows organizations to be more agile and responsive to changes and needs.
Selecting new team members involves assessing candidates for skills and fit within the team's culture. This can often result in a better match than a manager might achieve because the team members understand their needs and dynamics more intimately.
Scheduling work involves planning and ensuring the jobs and tasks within the team are completed in a timely and effective manner. The team can adjust schedules based on their understanding of the tasks, their complexity, and interdependencies.
Coordinating work with customers and other units requires communication and collaboration skills. Teams may be better placed to understand and respond to the needs of customers and other units, as they are closely involved in the actual work.
Learn more about Work Team Responsibilities here:https://brainly.com/question/31926658
#SPJ3
Suppose that your tuition to attend college is $14,000 per year and you spend $5,000 per year on room and board. If you were working full time, you could earn $26,000 per year. What is your opportunity cost of attending college?
A. $19,000
B. $31,000
C. $40,000
D. $45,000
Answer:
Option (d) is correct.
Explanation:
The opportunity cost refers to the benefit that would be obtained from the next best alternative.
Here, given that
Tuition cost for attending college = $14,000 per year
Room cost = $5,000
Money income could be earned = $26,000
Therefore, the Opportunity cost is as follows:
= $14,000 + $5,000 + $26,000
= $45,000
The Role of Theory in Research, which of these represents the relationship between theory and research:______a. Theory is completed before research b. Research is completed before theory c. Research and theory are independent d. Research and theory are interdependent
Answer:
The correct answer is letter "D": Research and theory are interdependent.
Explanation:
A theory is the conclusion of an idea regarding a certain topic. To support that idea, facts are needed. Those facts are found thanks to research. However, research itself would not have a purpose if the main intention of the study would not be to propose a theory. Thus, both theory and research are interdependent.
Yokam Company is considering two alternative projects. Project 1 requires an initial investment of $520,000 and has a present value of cash flows of $1,300,000. Project 2 requires an initial investment of $5 million and has a present value of cash flows of $6 million.
Compute the profitability index for each project.
Based on the profitability index which project should the company prefer?
Answer:
1. 2.5; 1.2
2. Project A
Explanation:
Given that,
Project 1 requires:
Initial investment = $520,000
Present value of cash flows = $1,300,000
Project 2 requires:
Initial investment = $5,000,000
Present value of cash flows = $6,000,000
1.
Profitability index = Present Value of Cash inflows ÷ Investment
Project A = $1,300,000 ÷ $520,000
= 2.5
Project B = $6,000,000 ÷ $5,000,000
= 1.2
2. Project A will be preferred because it has a higher profitability index than project B.
Final answer:
To determine the preferable project for Yokam Company, the profitability index is calculated for both projects. Project 1 has a profitability index of 2.5, and Project 2 has a profitability index of 1.2. Thus, Project 1 is preferable due to its higher profitability index.
Explanation:
The question asks to compute the profitability index for two projects and determine which project Yokam Company should prefer based on this index. The profitability index (PI) is calculated as the present value of cash flows divided by the initial investment.
For Project 1, PI = $1,300,000 / $520,000 = 2.5.For Project 2, PI = $6,000,000 / $5,000,000 = 1.2.Based on the profitability index, Yokam Company should prefer Project 1 as it has a higher PI, indicating a greater return per dollar invested.
Which of the statement(s) is correct? i. Corporations rarely pay tax on the interest income. ii. Higher tax bracket people tend to buy municipal bond because it is federal tax exempt. iii. Short term capital gain and long-term capital gain are treated differently for individuals. iv. The corporate tax rates in the U.S. is one of the lowest among the developed nations. 6 A. i only B. ii only C. ii and iii D. iii and iv E. All the statements are correct
Answer:
E. All the statements are correct
Explanation:
i. Corporations rarely pay tax on the interest income.
This statement is correct. Some companies do not even pay any income taxes.
ii. Higher tax bracket people tend to buy municipal bond because it is federal tax exempt.
Correct, people who have high incomes, and are subject to a high federal income tax rate often buy municipal bonds because these bonds are exempt from federal income tax.
iii. Short term capital gain and long-term capital gain are treated differently for individuals.
Correct. Short-term capital gains are those obtained from the sale of property that was owned for less than one year. This gains are often treated with the highest tax rate.
Long-term capital gains are those obtained from the sale of property that was owned for more than one year, and are treated with more favorable tax rates.
iv. The corporate tax rates in the U.S. is one of the lowest among the developed nations.
This statement is correct. The corporate tax rate in the U.S. is a nominal 21% (the effective rate can be as low as 0% for some companies). This is one of the lowest rates among developed nations, whose rates hover around 25 to 30% on average.
Leisure Lodge Corporation is expected to pay the following dividends over the next four years: $22.00, $10.00, $8.20 and $2.80. Afterwards, the company pledges to maintain a constant 5 percent growth rate in dividends forever. If the required return on the stock is 16 percent, what is the current share price?
Answer:
The answer is: The current share price is $47.96.
Explanation:
The current share price is equal to the present value of its expected dividend stream discounting at required return rate of 16%.
We have the dividend stream as followed:
Year 1: $22.00; Year 2:$10.00; Year 3: $8.20; Year 4: $2.80; Year 5: $2.80 * 1.05 = $2,94 and will be growing at 5% constantly afterward ( as dividend will be growing at 5% per year from Year 4 afterward).
So, the current share price is equal to:
22/1.16 + 10/1.16^2 + 8.2/1.16^3 + 2.8/1.16^4 + [Present value as at the end of year 4 of growing perpetuity which is dividend payment after year 4] / 1.16^4 = 33.20 + [ 2.94 / ( 16% - 5%) ] /1.16^4 = $47.96.
So, the current share price is $47.96.
The marginal prospensity is to consume 0.75, marginal prospensity to invest is 0.3 and the marginal prospensity to import is 0.2. What is the size of the multiplier
Answer:
1.33
Explanation:
The size of the multiplier is the one which grounded on the marginal decisions of the household for spend, that is called as the MPC (stands for Marginal Propensity to consume), also referred to as the marginal propensity to save (MPS).
The formula to compute the size of the multiplier is as follows:
Size of multiplier = 1 / MPS
where
MPS is 0.75
So,
Size of multiplier = 1 / 0.75
= 1.33
Which of the following is NOT considered when the bank evaluates your loan application?
A. Your high school or college transcript
B. Your employment status and your ability to make payments now and in the future
C. Your credit history report
D. Your savings or other assets
Answer:
A. Your high school or college transcript
Explanation:
The banks will evaluate the loan application considering all factors that are pointers to the person's or entity's ability to repay the loan and in due time.
These factors include employment status and your ability to make payments now and in the future, credit history report, savings or other assets (in case there is a need to recover the loan through asset seizures).
The option not considered is high school or college transcript.
Option A.
Dakota Company experienced the following events during 2018: Acquired $30,000 cash from the issue of common stock. Paid $12,000 cash to purchase land. Borrowed $10,000 cash. Provided services for $20,000 cash. Paid $1,000 cash for utilities expense. Paid $15,000 cash for other operating expenses. Paid a $2,000 cash dividend to the stockholders. Determined that the market value of the land purchased in Event 2 is now $12, 700. Required The January 1, 2018, general ledger account balances are shown in the following accounting equation. Record the eight events in the appropriate general ledger accounts. Record the amounts of revenue, expense, and dividends in the Retained Earnings column. Provide the appropriate titles for these accounts in the last column of the table. The first event is shown as an example. Prepare an income statement for the 2018 accounting period. Prepare a statement of changes in equity for the 2018 accounting period. Prepare a year-end balance sheet for the 2018 accounting period. Prepare a statement of cash flows for the 2018 accounting period. Determine the percentage of assets that were provided by retained earnings. Can you determine the cash in retained earnings?
The question involves recording transactions in general ledger accounts, preparing financial statements, and analyzing a company's financial health. Accounting profit is determined by subtracting explicit costs from total revenues. Shareholders invest in a company typically through the purchase of stock, and a bank's net worth can be calculated by subtracting its liabilities from its assets.
Explanation:The student's question covers several fundamental accounting tasks, including recording transactions, preparing financial statements, and analyzing financial health through ratios. To record the events in the general ledger accounts, each transaction must be categorized and entered according to the principles of double-entry bookkeeping. Subsequently, financial statements such as the income statement, statement of changes in equity, balance sheet, and statement of cash flows can be prepared using the information from the ledger accounts.
For example, to calculate accounting profit, we subtract explicit costs from total revenues. Using the self-check question as a guide:
Accounting profit = total revenues minus explicit costs = $1,000,000 - ($600,000 + $150,000 + $200,000) = $50,000.
To address the question about shareholders and company financing:
A company typically obtains money from its sale through issuing shares which can occur during an IPO or secondary offerings.To create a T-account balance sheet for a bank:
Assets | Liabilities
-----------------------------------------|-------------------
Government Bonds: $70 | Deposits: $400
Loans: $500 |
Reserves: $50 |
-----------------------------------------|-------------------
Net Worth: $220
The bank's net worth is calculated as total assets ($70 + $500 + $50) minus liabilities ($400), which equals to $220.
Lastly, it is not possible to directly determine the cash in retained earnings from the information provided without additional context or a complete set of financial statements.
Durable Plastics Company had the following total assets, liabilities, and equity as of December 31. Total Assets $420,000 Total Liabilities 133,000 Total Equity 287,000 What is the company's debt ratio as of December 31? (Round your percentage answer to two decimal places.)
Answer:
debt ratio = 31.67 %
Explanation:
given data
Total Assets = $420,000
Total Liabilities = 133,000
Total Equity = 287,000
to find out
debt ratio
solution
we get here debt ratio that is express as
debt ratio = [tex]\frac{total\ liability}{total\ assets}[/tex] × 100 ............................1
put here value and we will get
debt ratio = [tex]\frac{133000}{420000}[/tex] × 100
debt ratio = 0.31666 × 100
debt ratio = 31.67 %
The debt ratio of Durable Plastics Company as of December 31 is 31.67%.
Explanation:The debt ratio is a financial ratio that measures the proportion of a company's total debt to its total assets. It indicates the percentage of a company's assets that are financed by debt. To calculate the debt ratio, divide the total liabilities by the total assets and multiply by 100. In this case, the debt ratio for Durable Plastics Company as of December 31 would be:
Debt Ratio = (Total Liabilities / Total Assets) × 100
Debt Ratio = (133,000 / 420,000) × 100
Debt Ratio = 31.67%
Learn more about Debt ratio here:https://brainly.com/question/31576833
#SPJ3
Suppose that many people who earn a living raising cows decide they can make more money selling t-shirts and switch occupations.
How will this change affect the amount of beef supplied by producers?
A. There will be an increase in supply.
B. There will be a decrease in supply.
C. There will be no change in supply.
Answer:
B. There will be a decrease in supply.
Explanation:
The switch would cause the amount of cow rearers to fall. The amount of cow available would fall and there would be a decrease in the supply of beef.
I hope my answer helps you
If people raising cows switch to selling t-shirts, the supply of beef will decrease. Fewer producers in the market mean less quantity of beef produced and supplied. Other variables, such as importation of beef, are ignored.
Explanation:Effect on Beef SupplyIf many people who earn a living raising cows decide to switch occupations and start selling t-shirts, this will lead to a decrease in supply of beef. This is because when these producers exit the beef production market, less beef is produced and supplied. Less producers in the market equates to less quantity of the product (in this case, beef) being supplied. This concept is fundamental in the realm of supply and demand in economics. It's important to note, however, that other variables, such as importation of beef, is ignored in this scenario.
Learn more about Supply and Demand here:https://brainly.com/question/9872367
#SPJ3
Prat Corp. started the 2018 accounting period with $38,000 of assets (all cash), $16,000 of liabilities, and $13,000 of common stock. During the year, the Retained Earnings account increased by $15,050. The bookkeeper reported that Prat paid cash expenses of $30,000 and paid a $2,800 cash dividend to the stockholders, but she could not find a record of the amount of cash that Prat received for performing services. Prat also paid $11,000 cash to reduce the liability owed to the bank, and the business acquired $8,800 of additional cash from the issue of common stock.
Answer:
Revenues = $47,850
Explanation:
To find the revenue, we have to consider some of the things.
1. Increase in retained earnings: Net income increases retained earnings. To get net income, we need more revenues than expenses.
2. Expenses: As we have expenses, we can find the revenues with the help of retained earnings.
3. Dividends: After deducting the dividends, we can get whether retained earnings increase or decrease.
The following formula can be used -
Beginning retained earnings + Net income (current year) (revenues - expenses) - Dividends = Increase in retained earnings
Putting the value in the formula,
$0 + Revenues - $30,000 - $2,800 = $15,050
or, Revenues - $32,800 = $15,050
or, Revenues = $32,800 + $15,050 = $47,850
To establish res ipsa loquitur in most states, the plaintiff must demonstrate all but which of the following?
A direct evidence of the defendant's lack of due care
B the harm ordinarily would not occur in the absence of negligence
C the plaintiff had no role in causing the harm
D the defendant had exclusive control of the thing that caused the harm
Answer:
The correct option is C.
the plaintiff had no role in causing the harm.
Explanation:
red IPSA loquitur is a Latin word that means 'the things speaks for itself.'
It means a situation that occurred due to negligence
Therefore the right option is c.
The plantiff must demonstrate all but ;
the plaintiff had no role in causing the harm.
Final answer:
In establishing res ipsa loquitur, direct evidence of the defendant's lack of due care is not required. This legal doctrine implies negligence from the nature of the accident or injury, under circumstances indicating that the defendant had control, and it would not have occurred without negligence.
Explanation:
To establish res ipsa loquitur in most states, a plaintiff must demonstrate certain elements. These typically include that the harm would not ordinarily occur without negligence, the plaintiff did not contribute to the cause of the harm, and the defendant had exclusive control of the thing that caused the harm. The one element that is not required for res ipsa loquitur is direct evidence of the defendant's lack of due care because res ipsa loquitur is a doctrine used precisely when there is a lack of direct evidence, and the circumstances of the incident imply negligence.
Therefore, the correct answer is A: direct evidence of the defendant's lack of due care is not necessary to establish res ipsa loquitur.
Red Industries began operations on April 11th, 2022. Red purchased $2,100 of supplies, and a physical count showed that $400 of supplies were on hand at year-end. Which is the appropriate journal entry at year-end
Answer:
Explanation:
The journal entry is shown below:
Supplies expense A/c Dr $1,700
To Supplies A/c $1,700
(Being supplies account is adjusted)
The supplies expense is computed below
= Purchase value of supplies - supplies on hand at year end
= $2,100 - $400
= $1,700
For recording, this given transaction we debited the supplies expense account as the remaining balance is transferred to supplies expense and credited the supplies account
Abby consumes only apples. In year1, red apples cost $1 each, green apples cost $2 each, and Abby buys 10 red apples. In year 2, red apples cost $2, green apples cost $1, and Abby buys 10 green apples.a. Compute a consumer price index for apples for each year. Assume that year 1 is the base year in which the consumer basket is fixed. How does your index change from year 1 to year 2?b. Compute Abby’s nominal spending on apples in each year. How does it change from year 1 to year 2?c. Using year 1 as the base year, compute Abby’s real spending on apples in each year. How does it change from year 1 to year 2?d. Defining the implicit price deflator as nominal spending divided by real spending. Compute the deflator for each year. How does the deflator change from year 1 to year 2?e. Suppose that Abby is equally happy eating red or green apples. How much has the true cost of living increased for Abby? Compare this answer to your answers to parts (a) and (d). What does this example tell you about Laspeyres and Passche price indexes?
Answer:
Part A)
Consumer price index is an amount of the average variation over time in the amounts paid by customers for a market basket of customer goods and services.
CPI= (Updated Cost/Base Period Cost) x 100
For multiple products, we have to ruminate the weights or proportion of expenditure of an item
CPI2= (P2Red xQ1Red) + (P2grn x Q1grn) / (P1Red xQ1Red) + (P1grn x Q1grn)
CPI2= (2 x 10) + (1x0)/ (1x10) + (2x0)
CPI2= 2
Based on the CPI in year 2, prices have doubled.
Part B)
Nominal expenditure is the total worth of outcome produced or expended in each year.
In year 1 and year 2, Abby buys
Year 1= $1 x 10= $10
Year 2= $1 x 10= $10
So, nominal expenditure remains constant at $10.
Part C)
Real expenditure is the quantity consumed or the basket in the current year calculated at the base year price.
Base year prices: Red $1& Green $2
Real expenditure in year 1 = (P1rQ1r) + (P1gQ1g)
=$1x10 + X2x0
= $10
Real expenditure in year 2 = (P1rQ2r) + (P1gQ2g)
= (1x 0) + (2 x 10)
= $20
So, real expenditure has increased from $10 to $20
Part D).
Implicit value deflator in year 1, it is the base year so it will be continuously 1 as the actual and nominal amounts are equal.
Implicit price deflator in year = nominal expenditure/real expenditure
Implicit price deflator in year 1 = 10/10
= 1
Implicit price deflator in year2 = 10/20
= 0.5
Thus, the implicit value deflator proposes that prices have dropped by half. The cause for this is that the deflator evaluations how much Abby standards her appeals using prices dominant in year 1.
We can perceive from this perception that the green apples are appreciated more .And when Abby consumes more green apples in year 2, it appears that her consumption has augmented as the price deflator standards green apples more than the red apples.
Part E)
Abby considers that red apples and green apples as perfect alternatives, then the cost of living in this budget has not changed in both year it costs $10 to eat 10 apples.
Permitting to the CPl, however, the cost of living has gathered. This is because it only takes into justification the detail that the red apple price has gathered; the CPl overlooks the fall in the price of green apples as they were not in the consumption package in year 1.
In difference to the CPI, the implicit value deflator approximations the cost of living has shared.
CPI is calculated based on the Laspreyers Index method, where the amount in the numerator is the amount in the base year. Where as in the Passche price index, the numerator is the Recent price calculated for current capacity of consumption.
The Laspeyres index inclines to exaggerate rise (in a cost of living framework), while the Paasche index tends to understate it, because the indices do not account for the fact that consumers typically react to value variations by changing the amounts that they buy. For example, if prices go up for good X then, at ceteris paribus, amounts of that good should go downcast.
a) The consumer price index (CPI) for apples is 100 in Year 1 and 200 in Year 2.
b) Abby’s nominal spending on apples is $10 in both Year 1 and Year 2.
c) Abby’s real spending on apples is $10 in Year 1 and $5 in Year 2.
d) The implicit price deflator is 1 in Year 1 and 2 in Year 2.
Let's go through each part of the problem with detailed step-by-step calculations.
Part (a): Compute a Consumer Price Index (CPI) for Apples
Year 1 (Base Year):
- Red apples: $1 each
- Green apples: $2 each
- Abby buys 10 red apples.
Cost of the basket in Year 1:
[tex]\[ \text{Cost}_{\text{Year 1}} = 10 \times 1 = \$10 \][/tex]
Year 2:
- Red apples: $2 each
- Green apples: $1 each
To calculate the CPI, we use the same basket as in Year 1 (10 red apples):
[tex]\[ \text{Cost}_{\text{Year 2}} = 10 \times 2 = \$20 \][/tex]
CPI Calculation:
[tex]\[ \text{CPI in Year 1} = \frac{\text{Cost of basket in Year 1}}{\text{Cost of basket in Year 1}} \times 100 = \frac{10}{10} \times 100 = 100 \][/tex]
[tex]\[ \text{CPI in Year 2} = \frac{\text{Cost of basket in Year 2}}{\text{Cost of basket in Year 1}} \times 100 = \frac{20}{10} \times 100 = 200 \][/tex]
Part (b): Compute Abby’s Nominal Spending on Apples
Year 1:
[tex]\[ \text{Nominal Spending in Year 1} = 10 \times 1 = \$10 \][/tex]
Year 2:
[tex]\[ \text{Nominal Spending in Year 2} = 10 \times 1 = \$10 \][/tex]
Part (c): Compute Abby’s Real Spending on Apples (Using Year 1 as the Base Year)
Year 1:
[tex]\[ \text{Real Spending in Year 1} = \text{Nominal Spending in Year 1} = \$10 \][/tex]
Year 2:
[tex]\[ \text{Real Spending in Year 2} = \frac{\text{Nominal Spending in Year 2}}{\text{CPI in Year 2}} \times 100 \][/tex]
[tex]\[ \text{Real Spending in Year 2} = \frac{10}{200} \times 100 = \$5 \][/tex]
Part (d): Compute the Implicit Price Deflator
Year 1:
Deflator in Year 1 =Nominal Spending in Year 1 / Real Spending in Year 1 = 10/10 = 1
Year 2:
Deflator in Year 1 =Nominal Spending in Year 2 / Real Spending in Year 2 = 10/5 = 2
Summary
1. CPI Calculation:
- CPI in Year 1: 100
- CPI in Year 2: 200
2. Nominal Spending:
- Nominal Spending in Year 1: $10
- Nominal Spending in Year 2: $10
3. Real Spending:
- Real Spending in Year 1: $10
- Real Spending in Year 2: $5
4. Implicit Price Deflator:
- Deflator in Year 1: 1
- Deflator in Year 2: 2
From Year 1 to Year 2, the CPI for apples increases from 100 to 200, Abby’s nominal spending remains constant at $10, her real spending decreases from $10 to $5, and the implicit price deflator increases from 1 to 2.
Complete question : Abby consumes only apples. In year 1, red apples cost $1 each, green apples cost $2 each, and Abby buys 10 red apples. In year 2, red apples cost $2, green apples cost $1, and Abby buys 10 green apples. a) Compute a consumer price index for apples for each year. Assume that year 1 is the base year in which the consumer basket is fixed. How does your index change from year 1 to year 2? b) Compute Abby’s nominal spending on apples in each year. How does it change from year 1 to year 2? c) Using year 1 as the base year, compute Abby’s real spending on apples in each year. How does it change from year 1 to year 2? d) Defining the implicit price deflator as nominal spending divided by real spending, compute the deflator for each year. How does the deflator change from year 1 to year 2?
The following are responsibilities of the governance team when managing a portfolio system EXCEPT
A. Deciding how they wish to balance the available organizational resources among the different types of projects
B. Publishing the priority of every project and ensuring the process is open and free of power politics
C. Evaluating the progress of the projects in the portfolio
D. Constant scanning of the external environment to determine if organizational selection criteria need to be changed
E. Communicating which projects are approved
Answer:
The correct answer is letter "A": Deciding how they wish to balance the available organizational resources among the different types of projects.
Explanation:
While managing a portfolio system, the governance team has many duties such as assessing the risk the portfolio represents, giving also an overview of all the project management activities and the measure of those projects compared to competitors. How to allocate the company resources for each organizational project of the firm, relies on managers directly.
The responsibilities of the governance team when managing a portfolio system involve tasks such as resource allocation, project prioritization, and progress evaluation.
Explanation:The responsibility of the governance team when managing a portfolio system involves several tasks, including:
Deciding how they wish to balance the available organizational resources among the different types of projects. This involves determining the allocation of resources such as budget, personnel, and equipment.Publishing the priority of every project and ensuring the process is open and free of power politics. This helps in creating transparency and fairness in project selection and execution.Evaluating the progress of the projects in the portfolio. This involves monitoring and tracking project milestones, deliverables, and performance.Therefore, the correct answer is C. Evaluating the progress of the projects in the portfolio.
Learn more about Governance team responsibilities in managing a portfolio system here:https://brainly.com/question/32951433
Dodge, Incorporated acquires 15% of Gates Corporation on January 1, 2013, for $105,000 when the book value of Gates was $600,000. During 2013 Gates reported net income of $150,000 and paid dividends of $50,000. On January 1, 2014, Dodge purchased an additional 25% of Gates for $200,000. Any excess cost over book value is attributable to goodwill with an indefinite life. The fair-value method was used during 2013 but Dodge has deemed it necessary to change to the equity method after the second purchase. During 2014 Gates reported net income of $200,000 and reported dividends of $75,000.
1. Which adjustment would be made to change from the fair-value method to the equity method?
Answer:
Goodwill 35,000 debit
Investment in Gates 25,000 credit
Retained Earnings 10,000 credit
--to adjust for change of method--
Explanation:
600,000 x 15% = 90,000
purchased at 105,000
goodwill of 15,000
+ 150,000 x 15% of net income = 22,500
- 50,000 x 15% dividends = (7,500)
investment at the end of 2013:
90,000 + 22,500 - 7,500 = 105,000
Then we purchase 25%
105,000 represent 15%
thus 25% would be: 105,000 / 0.15 x 0.25 = 175,000
purchased at 200,000
goodwill of 25,000 to be recognized.
So, equity method will be:
105,000 + 175,000 = 280,000 for the proportional equity
and 15,000 + 25,000 = 35,000 goodwill
Total of 315,000
While fair value will not recognize goodwill. and also, the investment is not modified when dividends and the gain for the year are delcared.
It measure at cost unless the market value of the stock decrease so we got:
105,000 1st purchase + 200,000 2nd purchase = 305,000
To adjust we are going to decrease investment by 25,000 and increase goodwill by 35,000 the other will go into retained earnings to balance out.
To switch from the fair-value method to the equity method, an adjustment is needed for the initial investment in Gates Corporation.
Explanation:To change from the fair-value method to the equity method, an adjustment needs to be made for the initial investment in Gates Corporation. The fair-value method recognizes changes in the value of the investment each reporting period, while the equity method only recognizes the investor's share of the net income or loss of the investee. Therefore, the adjustment would involve removing any fair-value adjustments made under the fair-value method and recording the initial investment at its original cost.
Learn more about Fair-value method vs. equity method here:https://brainly.com/question/35917345
#SPJ3
Select the necessary words to complete the following statements.
1. The purpose of an audit conducted in accordance with generally accepted auditing standards is to provide financial statement users with an opinion by the audtor on whether the financial statements are presented fairly in all material respects, in accordance with the applicable ___________.
2. The serially numbered pronouncements issued by the Auditing Standards Board of the AICPA as generally accepted auditing standards are known as ___________.
3. Investors need to compare financial statements of different companies. The standards most frequently followed to prepare financial statements in the United States are ____________.
4. Public company audit reports must be addressed to the board of directors and the ____________.
Answer:
1. Standards
2. Audit and Attest Standards
3. Generally Accepted Accounting Principles (GAAP)
4. Shareholders
Explanation:
1. Financial statements are required to be audited and should be in accordance with all applicable standards followed in the country.
2. AICPA issues, develops and enforces different standards (example code of professional conduct and consulting services standard). Auditing standards board of AICPA pronouncements are also known as Audit and Attest Standards.
3. The standards which are followed in the United States is GAAP Generally Accepted Accounting Principles. It’s a rule based accounting principle which is enforceable in the United States.
4. Audit report is required to be addressed to the Board of Directors and the company shareholders.
Answer:
1. Financial Reporting Framework
2. Statements on Auditing Standards (SASs)
3. Generally Accepted Accounting Principles (GAAP)
4. Shareholders
Explanation:
1. The purpose of an audit conducted in accordance with generally accepted auditing standards is to provide financial statement users with an opinion by the audtor on whether the financial statements are presented fairly in all material respects, in accordance with the applicable Financial Reporting Framework.
2. The serially numbered pronouncements issued by the Auditing Standards Board of the AICPA as generally accepted auditing standards are known as Statements on Auditing Standards (SASs).
3. Investors need to compare financial statements of different companies. The standards most frequently followed to prepare financial statements in the United States are Generally Accepted Accounting Principles (GAAP).
4. Public company audit reports must be addressed to the board of directors and the Shareholders.
Snacknow, a food service firm, is calculating its monthly productivity report. From the following raw data calculate the labor productivity.
Labor rate $10
Units produced 10,000
Labor hours 1,000
Cost of materials $2000
Cost of energy $500
(A) 0.220
(B) 1.000
(C) 0.800
(D) 0.476
Answer:
Explanation:
Labor productivity = Total output/ Total Input
Labor rate = $10. Labor hours = 1,000
So total labour input = 1,000*10= 10,000.
Materials and energy cost input = 2000+500
⇒ total input = 10,000+ 2000+500= 12500
Total output (units produced) = 10,000
Labor productivity= 10,000/12500= 0.80
Beck was the general manager of Chilkoot Lumber Co. Haines sold fuel to the company. To persuade Haines to sell on credit, Beck signed a paper by which he promised to pay any debt the lumber company owed Haines. He signed this paper with his name followed by "general manager." Haines later sued Beck on this promise, and Beck raised the defense that the addition of "general manager" showed that Beck, who was signing on behalf of Chilkoot, was not personally liable and did not intend to be bound by the paper. Was Beck liable on the paper?
Answer:
No
Explanation:
Beck was the general manager of company. By signing the company's document, actually company is liable to pay that amount not individual. The claim that Haines make is incorrect as any liability is supposed to be beared by company. The claim that Beck made is correct. because he wrote general manager which means he is an employee of that company. So, liability falls on company rather than individual.
Beck's liability for the debt of Chilkoot Lumber Co. to Haines depends on whether he signed the promise with the intent to be personally bound or merely in his capacity as general manager. Typically, indicating the role next to the signature aims to avoid personal liability, but the context and wording of the agreement are crucial in determining the actual liability.
The question relates to whether Beck, who was the general manager of Chilkoot Lumber Co., is personally liable for the debt of the company to Haines after signing a paper promising to pay the company’s debt. Beck signed the paper with the addition of “general manager,” which he argues shows his intent not to be personally bound by the agreement. In general, when a representative of a company signs an agreement while clearly indicating their representative capacity, they typically are not personally liable for the debts of the company. The specific facts of the case, however, such as the exact wording of the promise and the context in which it was signed, will ultimately determine Beck's liability. If it can be shown that he intended to assume personal responsibility or that he acted beyond the scope of his authority, he might be held liable.
For the following activity, indicate which of the objectives of managerial accounting activity is involved. In some cases, several objectives may be involved. Developing a bonus reward system for the managers of the various offices of the AAA (American Automobile Association) Travel Agency.a. Providing information for decision making and planning. b. Assisting managers in directing and controlling operational activities. c. Motivating managers and other employees toward the organization's goals. d. Measuring the performance of activities, subunits, managers, and other employees within the organization. e. Assessing the organization's competitive position, and working with other managers to ensure the organization's long-run competitiveness in its industry.
Answer:
c. Motivating managers and other employees toward the organization's goals.
Explanation:
What is the total federal income tax withholding reported on the Matthews’ Form 1040?
a . $2,803
b . $3,974
c . $5,056
d . $6,778
Answer:
correct answer is d . $6,778
Explanation:
we get here total federal income tax that will be
as we know that
federal income tax withholding barbara = $2784
federal income tax withholding mark =$2253
form SSA 1099 = $1721
and form 1099 interest income = $20
we get total federal income tax that is sum of all four
total federal income tax = $2784 + $2253 + $1721 + $20
total federal income tax = $6,778
so correct answer is d . $6,778
Which of the following is true about the studies reported by Norton, Mochon, and Ariely (2012)? (Answer: Labor leads to more love when participants successfully completed the task).
Answer:
Labor leads to more love when participants successfully completed the task.
Explanation:
The answer is already provided in the question.
Suppose that Candonia and Sylvania agree to trade. Each country focuses its resources on producing only the good in which it has a comparative advantage. The countries decide to exchange 8 million pounds of lemons for 8 million pounds of coffee.
This ratio of goods is known as the price of trade between Candonia and Sylvania.
True or False?
Why would government officials need to restore confidence in the coins before people would sue them as money?
Answer:
At the microeconomic level there is confidence in the markets and people increase spending, leaving savings. Officials must demonstrate that they have knowledge of how to handle finances.
Appropriate services must be created in the cities and in this way at the social level, there will be confidence to increase overall spending.
Joe Baker, the runner for a small coffee shop, had a bad habit of helping himself to cash from the deposit on the way to the bank. He covered his tracks by substituting a check from the next day's deposit for the amount he stole from the previous day's deposit. This is an example of what type of concealment?a. Deposits in transitb. Deposit lappingc. Force balancingd. None of the above
Answer:
The correct answer is letter "B": Deposit lapping.
Explanation:
Deposit lapping is the fraudulent act in which an individual alters accounts receivables -typically in the form of checks, to cover transactions for cash that has been stolen. The individual takes the following account receivable to cover the theft over and over for as many times as he wishes.
You have just borrowed $20,000 to buy a new car. The loan agreement calls for 36 monthly payments of $700 each to begin one month from today. If the interest is compounded monthly, what is the effective annual rate on this loan?
Answer:
The effective rate on the loan is 13/18% or 0.722%
Explanation:
36 monthly payments of $700 will give = 700*36=$25200
Amount= $25200
Principal= $20000
Interest= amount - principal
Interest= 25200 -20000
=$5200
Rate= (100* interest)/principal*time
= (100*5200)/(20,000*36)
=13/18 %
= 0.722%
The effective annual rate on the loan is 0.722%