According to the five forces of the Porter's model, the organization of an industry can be analyzed in terms of its structure, conduct and performance. Discuss

The law firm is transmitting their organizational culture by differentiating how it addresses the attorney and other employees, this is done through the use of language.

By referring to the attorney by his title but calling other employees by their first names, the law firm is transmitting its organizational culture through language. This use of language is a clear example of how an organization communicates its hierarchical structure, esteem for roles, and expectations for professionalism. Just like rituals, artifacts, or symbols, language is a key component that helps shape and convey an organization's culture to its members and those interacting with it. Therefore, it is highly important to use language appropriately in an organizational context.

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The law firm is transmitting their organizational culture through the use of language, which reflects their values and beliefs.

By referring to the attorney by his title but calling other employees by their first names, the law firm is transmitting their organizational culture through language. This aspect of communication is a way culture manifests itself within an organization. Language, part of nonmaterial culture, includes the values, beliefs, symbols, and language that define a society. Given the context described, using titles for certain employees can convey values such as respect for hierarchy, formality, or professionalism, while first names suggest a more casual or personable approach to others. These practices contribute to the cultural makeup and social environment of the firm.

Answer:

Other characteristics of oligopolistic market are

Explanation:

Firms act in collaboration with others they can not act independently.

Firms can collude with one another and by doing so they maximize industry profits.

Barrier to entry and exist firms are nor free to enter and exit from market.

Final answer:

Starbucks Reserve aims to attract millennials by offering a luxury coffee experience that includes exclusive selections, upscale service, and a sophisticated environment. Millennials are likely targets due to their desire for experiences and tendency to spend more time in coffee shops.

Explanation:

Starbucks' decision to launch luxury coffee shops known as Starbucks Reserve is strategically aimed at attracting a specific demographic, most likely the millennials (ages 13 to 32). This generation is known for valuing experiences over products and may be more willing to pay a premium for a high-end coffee experience that emphasizes quality, exclusivity, and social status. Furthermore, millennials have a stronger tendency to integrate café culture into their lifestyle, seeing coffee shops as places to socialize, work, and relax, rather than just locations to get a quick caffeine fix.

To ensure success, Starbucks Reserve must differentiate itself from standard Starbucks coffee shops. This can be achieved by offering an exclusive selection of single-origin coffees, providing a more personalized and upscale service, and designing a sophisticated and comfortable environment that enhances the overall customer experience. The emphasis should be on luxury, uniqueness, and a heightened level of customer engagement.

Answer:

Ke = 15.35%

cost of debt: pretax 7.84%

after tax rate of 40% = 4.704%

Equity weight = 0.784313725

Debt Weight   = 0.215686275

WACC 13.05380%

Explanation:

With the CAPM we solve for the cost of equity:

[tex]Ke= r_f + \beta (r_m-r_f)[/tex]

risk free = 0.05

premium market = (market rate - risk free) 0.09

beta(non diversifiable risk) = 1.15

[tex]Ke= 0.05 + 1.15 (0.09)[/tex]

Ke 0.15350

The cost of debt will be detrmiante by solve for the rate which makes the debt worth 110 of their value

[tex]C \times \frac{1-(1+r)^{-time} }{rate} = PV\\[/tex]

C          4.50 (100 x 9% / 2 payment per year)

time 30 ( 15 years x 2)

rate           0.039268264

[tex]4.5 \times \frac{1-(1+0.039268)^{-30}}{0.039268} = PV\\[/tex]

PV $78.5102

110.00

[tex]\frac{Maturity}{(1 + rate)^{time} } = PV[/tex]  

Maturity  100.00

time  30.00

rate  0.03927

[tex]\frac{100}{(1 + 0.039268)^{30} } = PV[/tex]  

PV   31.4898

PV c $78.5102

PV m  $31.4898

Total $110.0000

(the debt is quoted 110 so we need to solve for that amount)

we get 0.0392 semiannual rate using excel we multiply by 2 to get the annual costof debt:

0.0392 x 2 = 0,0784‬

after tax:

0.0784 x (1 - 0.4) =0.04704

the weights are calcualte with the market values

D  1,100,000,000 (1 billon x 110/100)

E  4,000,000,000 (50,000,000 x $80)

V  5,100,000,000

Now, we plug all the data and sovle for the WACC

[tex]WACC = 0.1535(0.784313725490196) + 0.0784(1-0.4)(0.215686274509804)[/tex]

WACC 13.05380%

Answer:

accounts payable    15 debit

      merchandise inventory      15 credit

Explanation:

the price deduction will reduce the amount due to the supplier. Also this will represent the decrease in the value of the merchandise so the merchandise inventory account should decrease in the magnitude.

The account payable is a liability to make it decrease we post on debit

while, the merchandise is an asset therefore it should be credited.

Answer - Sales Returns and allowances debit 15

Cash credit 15

Explanation:

its ocrrect

The correct answer is C. public relations.

The correct answer is C. public relations. By inviting representatives of the news media to the event, National Geographic Magazine was using public relations as an element of the promotional mix. Public relations involves building and maintaining relationships with the public, including the media, to enhance the organization's image and reputation. In this case, National Geographic Magazine used the event to promote their magazine and generate positive publicity.

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The National Geographic Magazine used option C) public relations element of the promotional mix through their interaction with news media to promote their park's cover story.

The National Geographic Magazine, in sending invitations to representatives of the news media for an event promoting their parks cover story, was utilizing the option C)  public relations element of the promotional mix. Public relations refers to activities aimed at promoting goodwill and a positive image between an organisation and its public. In this case, by inviting news media, the magazine likely sought positive coverage of their event, which serves to influence public opinion and create a favourable image.

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Answer:

Amount after 12 year will be 1006.098

Explanation:

We have given present value of the investment, that is present value P = $500

Rate of interest r = 6 %

Time period is given n = 12 years

We have to fond the total investment after 12 years

Future value is given by

[tex]A=P(1+\frac{r}{100})^n[/tex], here A is future value P is principal amount r is rate of interest and n is time period

So future value will be equal to

[tex]A=500\times (1+\frac{6}{100})^{12}[/tex]

[tex]A=500\times1.06^{12}[/tex]

[tex]A=500\times2.012=1006.098[/tex]

So amount after 12 years will be $1006.098

Answer:

The correct answers are explained below.

Explanation:

In the case of A, the household is providing the service and the transactions is taking place in an input market due to the fact that the service given by the particular person is used inside the court to provide a complete service to the community.

In the case of B, the firm is providing the service that is being demanded by the household and the transactions is taking place in an output market due to the fact that the complete service is already being purchased and demanded.

In the case of C, the household is providing the service and the firm is demanding the service of labor force and the transaction is taking place in an input market due to the fact that the firm needs the labor force to produce a new product to deliver to the output market as a finished product.

In the case of D, the household is providing the good and the firm is demanding the good and the transactions is taking place in an input market due to the fact that the firm is buying the good in order to establish a new building that will provide a finishied service to the customers in the future.  

In the provided scenarios, when individuals are providing their labor or properties for firms to produce goods or services, like Anderson's job or the Greyson's property sale, these transactions are taking place in the input market. When an individual is acquiring a good or service from a firm, like Mei Lin's cruise purchase, this transaction is occurring in the output market.

a. Anderson works 37 hours each week as a clerk at the county courthouse. This transaction takes place in the input market, where labor (Anderson's work hours) is being supplied by a household member (Anderson) to a firm (the county courthouse).

b. Mei Lin purchases a 3-week Mediterranean cruise vacation for her parents. This transaction occurs in the output market, where goods and services (the cruise) are being demanded by households (Mei Lin).

c. Caterpillar doubles employment at its Huntsville, Alabama factory. This is an example of an interaction in the input market, as the firm (Caterpillar) is demanding labor for its factory.

d. The Greyson family sells their 250-acre ranch to Marriott so it can build a new resort and golf course. This transaction occurs in the input market as a real estate (input) is being supplied by households (The Greyson family) to a firm (Marriott).

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Answer:i dont know

Explanation:

Answer:

$4,200

Explanation:

Data provided in the question:

Revenue earned = $5,000

Amount collected from a customer for service = $6,000

Repair expense = $800

Rent paid = $600

Now,

we know

Net income = Revenue earned - Expense incurred

or

Net income = Revenue earned - Repair expense

Net income = $5,000 - $800

Net income = $4,200

To calculate the net income in August for Springer Corporation, we need to consider the revenues and expenses during that month. The net income is calculated by subtracting the total expenses from the total revenues. In this case, the net income in August is $9,600.

To calculate the net income in August, we need to consider the revenues and expenses during that month. From the information given, we know that Springer Corporation earned $5,000 of revenues on account and collected $6,000 from a customer for services provided last month. These are both revenues. On the expense side, Springer incurred $800 of repair expense and paid cash, and also paid $600 for rent owed from the previous month. The net income is calculated by subtracting the total expenses from the total revenues: (Revenues - Expenses).

In this case, the total revenues are $5,000 + $6,000 = $11,000. The total expenses are $800 + $600 = $1,400. Therefore, the net income in August is $11,000 - $1,400 = $9,600.

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Answer:

16.091%

Explanation:

The computation of the WACC is shown below:

= (Weightage of debt × cost of debt) × ( 1- tax rate) + (Weightage of preferred stock) × (cost of preferred stock) + (Weightage of  common stock) × (cost of common stock)

= (0.3 × 9%) × ( 1 - 21%) +  (0.07 × 9.5%) +  (0.63 × 11.60%)

= 2.133% + 6.65% + 7.308%

= 16.091%

Basically we multiplied the weightage with its cost

Answer:

The Journal entry is as follows:

D. Hopkins, Capital A/c  Dr. $210,000

          To cash A/c                                   $200,000

          To M. Hammer's Capital A/c        $5,000

          To P. Houghton's capital A/c       $5,000

(To record the amount of Hopkins Capital balance)

Workings:

Income = D. Hopkins, Capital - Cash payment after his death

             = $210,000 - $200,000

             = $10,000

$10,000 is divided equally among M. Hammer and P. Houghton.

The journal entry for Hopkins' withdrawal from the partnership would involve a debit of $210,000 to Hopkins' capital, credits of $200,000 to cash, and $5,000 each to Hammel's and Houghton's capital accounts to balance the difference.

When a partner withdraws from a partnership, it is necessary to settle their capital account. In this case, D. Hopkins withdraws with a capital balance of $210,000. The partnership and Hopkins' estate have agreed on a withdrawal payment of $200,000. These transactions would result in the following journal entry:

The division of the remaining $10,000 ($210,000 - $200,000) between Hammel and Houghton is equitable because they share profits and losses equally. This means with Hopkins' exit, the $10,000 difference is divided between the two, resulting in a $5,000 credit each to Hammel's and Houghton's capital accounts.

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Answer:

Gasoline market

D. higher equilibrium prices and lower equilibrium quantity

Car market

A. higher equilibrium prices and lower equilibrium quantity

Explanation:

As the demand supplies decreases, the equilibrium quantity will decrease while the price increase Assuming everything else remains constant.

The car market from which gasoline plays a lead cost of the automobile industry will also suffer a decrease in the supply as higher input cost makes the price go up.

Higher input cost makes supply decrease as well.

Also the demand for car will decreaase as the maintenance cost associate with a car may decrease the demand

This will defenetively decrease the quatity and make the price go up.

Increased tensions in the Middle East resulting in a 5 percent reduction in the world's supply of crude oil would likely lead to higher equilibrium prices and lower equilibrium quantity in the gasoline market, and lower equilibrium prices and higher equilibrium quantity in the small car market.

The likely impact of a 5 percent reduction in the world's supply of crude oil due to increased tensions in the Middle East would result in higher equilibrium prices and lower equilibrium quantity in the gasoline market. This is because a decrease in oil production would lead to a decrease in gasoline supply, which in turn would increase the price of gasoline.

In the small car market, the impact would result in lower equilibrium prices and higher equilibrium quantity. This is because with higher gasoline prices, consumers would likely shift towards smaller, more fuel-efficient cars, increasing the demand for small cars and decreasing their prices.

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Answer:

The answer is -0.8704%= -0.9%

Explanation:

A real rate of return is the annual percentage return realized on an investment, which is adjusted for changes in prices due to inflation or other external factors.

Real rate of return=[ (1+nominal rate) / (1+ inflation rate) - 1]

Real rate of return = (1.025/1.034) -1= -0.0087* 100= -0.087%

Final answer:

The approximate annual real rate of return on the $2,500 investment, with a nominal interest rate of 2.5% and an inflation rate of 3.4%, is -0.9%, indicating a decrease in value when considering inflation.

Explanation:

To calculate the approximate annual real rate of return on an investment when there is inflation, you subtract the inflation rate from the nominal interest rate earned on the investment. In this case, you invested $2,500 at an interest rate of 2.5%, and the inflation rate was 3.4% over the year. Therefore, the real rate of return would be calculated as follows:

Nominal interest rate - Inflation rate = Real rate of return

2.5% - 3.4% = -0.9%

Your real rate of return is approximately -0.9%, meaning your investment lost value when adjusted for inflation.

Explanation:

be motivated to learn : This would be right choice. The reason is that, the gap is because we need to learn some more to reach the expectation of employer. So learning should be life long.

share diverse experiences: Sharing experience does not fill the gap, only proving fills it.

have a high level of energy and an orientation toward action: This seems to be closer, but learning stands first and then putting into action.

believe in personal control of destiny: Self-belief is always essential, but only learning can fill the gap.

seek high levels of achievement: High level of achievement can be done only through learning.

Closing skill gaps involves being motivated to learn, sharing diverse experiences and maintaining a high level of energy and action orientation. It also means believing in your personal control over destiny, and seeking high levels of achievement.

Closing skill gaps between what you perceive you possess and what employers think you have involves a multi-faceted approach. The key components are self-motivation to learn, understanding and acknowledging the need for diverse experiences, and maintaining a high level of energy with an action-oriented approach.

Firstly, be motivated to learn. Constant learning and adapting to new skills is crucial. Find resources and training to improve in areas you feel deficient. Consider online courses, books, and seminars that can help you learn and refine your skills.

Secondly, share diverse experiences. This can be achieved by taking up different roles, responsibilities or projects that not only build your skills but also enhance your ability to adapt and innovate.

Thirdly, maintain a high energy level and an orientation towards action. This essentially means being proactive and showing your eagerness to put your skills to use. Employers appreciate individuals who are action-oriented and ready to contribute.

Furthermore, believing in your personal control of destiny and seeking high levels of achievement will also help to bridge this gap. It's about being accountable and showing a commitment to achieving results.

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Answer:

Alternating treatments

Explanation:

Alternating treatment design involves a single participant where there is random or semi random alternation between treatments. The change in treatment is done as frequently as possible to obtain behavioural results from the subject.

Millie switching between behavioural checklist strategy and checklist strategy bis an example of alternating treatment.

Millie is using an alternating-treatments design to compare the effectiveness of a behavior checklist and prompted praise strategy by alternating between them and recording the on-task behavior of her student, Kent.

Millie is employing an alternating-treatments design. This design is utilized when two or more interventions are alternated to determine their effectiveness on a subject's behavior. In Millie's case, she is recording Kent's on-task behavior while alternating between a behavior checklist and a prompted praise strategy. By comparing the on-task behaviors during these different strategies, she can assess which one is more effective for managing Kent's behavior.

This is in contrast to other experimental designs such as static group comparison, which compares different groups, a multiple baseline design, which observes behavior across different settings or behaviors over time, and a control group time series, which would involve repeated measures over time with a control group for comparison.

Answer:

The answer is $500

Explanation:

a: 1,000,000 the amount of the loan

r: 0.06 (6% expressed as 0.06)

n: 120 (based on monthly payments * 10 years)

monthly payment = (amount * r )/ 12

monthly payment = ($1,000,000* 0.06) /120 = $500

Answer:

The correct answer is letter "A": increasing the design time for new products and services.

Explanation:

Many steps can be taken to effectively design a product before its release. Those steps could imply studying the client in brief, make market research, brainstorming potential product ideas, sketching the most feasible, developing a concept, revision, and completion.

Increasing more time designing new products or services is counterproductive to finish the design product on time.

Characteristics of an effective design process include meeting customer demands cost-effectively, aligning product features with those demands, and minimizing necessary revisions, but not intentionally increasing the design time.

All of the following are characteristics of an effective design process except increasing the design time for new products and services. The elements that contribute to a successful design process include meeting customer requirements in a cost-effective manner, ensuring the product or service traits match customer expectations, and minimizing the revisions required to make a design practical and functional.

Efficient design processes are crucial for crafting products that satisfy the end-user's needs while also being economically viable for the company. These processes entail iterative testing, prototyping, and refinement steps that often lead to multiple versions before reaching the final product. However, an effective design process should not purposefully extend the design timeframe; instead, it should seek to be as timely and resource-efficient as possible, keeping in mind the constraints of budget and project deadlines. Notably, the engineering design process should be flexible and adaptable, subject to continuous improvement to meet the changing dynamics of both the market and project-specific objectives.

Hence,  The characteristics of an effective design process except is Increasing the design time for new products and services are

Answer:

E. None of the above

Explanation:

The marginal benefit from the next unit decreases but the consumption goes on up to full satisfaction.

Eric wanted to watch the game and brought the replacement ticket is rational.

Emily choose to go to a social event is her rational choice

The last ticket has no marginal cost so the ticket selling below ATC is not the concern, profit is maximum at MR = MC and MC = 0 for the passenger at last minute.

None of the above statements describes the actions which could be regarded as rational from an economic point of view.

The rational economic view states that decision-making by customers is led by their rational choices granting them the highest utility. Thus, the statements given are not rational for economics as no event is causing any harm to economic welfare.

Thus, as per rationality in economics individuals are seen as making decisions in a certain manner, which is predictive that would be generating the greatest satisfaction to them.

Learn more about rational economic views here:

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Answer:

a. $23,790 ; $23,790

b. $42,000 ; 21,260

Explanation:

The computation is shown below:

a. For the first case

EBIT $42000

Less interest expense -$11,500

Earnings before taxes $30,500

Less: tax rate  -$6,710   (22% of $30,500)

Earning after taxes $23,790

Less preferred dividend $0

Earnings available for common stockholders $23,790

b. For the second case

EBIT $42000

Less interest expense $0

Earnings before taxes $42,000

Less: tax rate  -$9,240   (22% of $42,000)

Earning after taxes $32,760

Less preferred dividend $0-$11,500

Earnings available for common stockholders $21,260

Answer:

c) 11%

Explanation:

The question is to determine the rate of return on Groupong Inc's

The rate of return represents an investment's net gain or net loss calculated over a period of time and usually expressed in terms of the percentage of the initial cost of investment.

The rate of return in this question is calculated as follows:

Rate of Return = (The Dividend for the next year/ the current price of the share) + The Growth rate

The dividend for the next year = current year dividend x (1+r), where r is 3.5

= 2.78 x (1+0.035)

=2.78 x 1.035

= (2.8773/38.3) + 0.035

=0.1101 or 11%

Answer:

The journal entries are as follows:

(i) On January 1, 2018

Equipment A/c Dr. $10,000

        To cash A/c                  $10,000

(To record the purchase of equipment)

(ii) On December 31st,

Depreciation expense A/c Dr. $1,800

              To Accumulated depreciation - equipment   $1,800

(To record the accumulated depreciation on equipment for the year 2018 under the straight line method)

Workings:

Depreciation:

= (Cost of the equipment - Salvage value) ÷ Useful life

= ($10,000 - $1,000) ÷ 5

= $9,000 ÷ 5

= $1,800

Final answer:

To complete the journal entry for straight-line depreciation on equipment costing $10,000 with a salvage value of $1,000 over 5 years, you would debit Depreciation Expense and credit Accumulated Depreciation for $1,800.

Explanation:

The question involves calculating the straight-line depreciation expense for a piece of equipment based on its cost, salvage value, and useful life.

For the given equipment which cost $10,000 and has a salvage value of $1,000 after its 5-year useful life, the annual depreciation expense would be calculated as follows:

(Cost of the Equipment - Salvage Value) / Useful Life in Years = Annual Depreciation Expense
($10,000 - $1,000) / 5 years = $1,800 per year

The journal entry on December 31, 2018, to record the annual depreciation would be:

Debit Depreciation Expense: $1,800

Credit Accumulated Depreciation: $1,8000

This entry reduces the net book value of the equipment on the balance sheet and recognizes the expense on the income statement.

Answer:

did not rely on foreign oil

Explanation:

An electric car is considered as the latest advancement in the field of the automobile industry. The main focus behind introducing the electric car is pollution and dependency on foreign oil.

Both the above factors are important for any developing country. The pollution is  main cause of polluting the environment globally hence it is a vital need to introduce something that produce less pollution. As we know when the oil burns it releases the carbon monoxide in the atmosphere which is the main cause behind raising the average temperature of earth atmosphere

On the other side, we have a dependency on foreign oil. We know that the government pays a huge amount of money in purchasing oil from foreign land thus by introducing an electric car we can save this amount of money and can be used for a different purpose

Answer:

The correct answer is letter "B": did not rely on foreign oil.

Explanation:

Nowadays, electric cars are in the process of expansion, attempting to reach new markets where infrastructure is still in progress for the massive offerings. Most major carmakers are developing the manufacturing of electric cars as the result of avoiding dealing with changing prices in the foreign oil industry and because oil is a non-renewable natural resource, which implies it will be scarce in the future even if those days are not near yet.

Answer:

b. contingency approach to management.

Explanation:

The Contingency Approach to management tells us that there is no best style of management.

The Employees should in turn push to encourage to adopt situation specific management approach since It gives them an opportunity to explore new things and problem specific solutions.

Answer:

The payback period of DVD is 1.61 years and for base game is 1.537 years.

Explanation:

Payback period is the period of time taken by a project to recover its initial outflow.

BOARD GAME

the initial outflow is $1200,

payback period

= 1 year (to recover $690) + 0.537 years [(1200-690)/950]

= 1.537 years.

DVD

the initial outlay is $2700

period to recover the same

= 1 yr (to recover $1750) + 0.6051 yrs [(2700-1750)/1570]

= 1.6051 years.

Therefore, The payback period of DVD is 1.61 years and for base game is 1.537 years.

Answer:

The correct answer is letter "C": supervisory.

Explanation:

Supervisory management is the type of role executives play when there is little involvement with the direct activities of employees. These types of managers tend to be more worried about making plans to achieve the firm's goals. However, the executive still imposes regulations and enforces corporate norms when necessary.

Pele Arnaz is a supervisory manager, responsible for day-to-day task accomplishment and overseeing the daily activities of the plant he manages.

Pele Arnaz, as a plant foreman for a generator manufacturer who spends his day carrying out operational plans and managing daily activities of the plant, is best described as a supervisory manager. This type of manager falls into the category characterized by focusing on the day-to-day task accomplishment, maintaining establishment, and adhering to the rules and regulations. According to Hersey and Blanchard's situational-leadership model, Arnaz's role involves overseeing the day-to-day tasks of his subordinates, which aligns closely with the supervisory level of management within the organization.

Hence, Pele Arnaz, as a plant foreman for a generator manufacturer who spends his day carrying out operational plans and managing daily activities of the plant, is best described as a supervisory manager.

Answer:

The correct answer is letter "C": multifactor productivity.

Explanation:

Multifactor productivity refers to how the combination of labor and capital is translated in the maximization of manufacturing goods or rendering services. Changes in the factor of multifactor productivity reflect fluctuations in management, adjustment costs, and economies of scale.

Answer: C. multifactor productivity.

Explanation: Multifactor productivity measures the efficiency of all inputs used in the production process, considering multiple factors rather than a single input.

Answer:

The items of cash flows are classified as follows:

1. Acquired $23,400 cash from the issue of common stock. (FA)

2. Performed services for $43,000 cash. (OA)

3. Paid a $27,200 cash advance for a one-year contract to rent equipment. (OA)

4. Recognized $32,200 of accrued salary expense. (NA)

5. Accepted a $1,600 cash advance for services to be performed in the future. (OA)

6. Provided $16,900 of services on account. (NA)

7. Incurred $7,350 of other operating expenses on account. (NA)

8. Collected $5,400 cash from accounts receivable. (OA)

9. Paid a $9,000 cash dividend to the stockholders. (FA)

10. Paid $18,000 cash on accounts payable.(OA)

b.The increase in cash and cash equivalents in the year is $19200 as shown below

Explanation:

Blair Company Statement of Cash Flows:

                                                                      $

Cash Sales                                                43000

Equipment rent                                          -27200

Service Advance Cash                                1600

Accounts receivable                                    5400

Accounts payable                                       -18000

Cash flows from operating activities           4800

Financing activities

Common stock                      23400

Dividends                                -9000

                                                                        14400

                                                                       19200

The present value of the investment, given that the interest rate is 5% per year, is calculated by summing the present value of all future cash flows. In this example, the present value of the investment is approximately $79,230.

The present value (PV) of an investment is calculated using the formula PV = CF / (1 + r)^n, where CF is the cash flow received at the end of each year, r is the interest rate, and n is the number of years. So for this problem, we have a cash flow of $30,000 at the end of this year and a cash flow of $15,000 at the end of each of the four following years with an interest rate of 5%.

The present value of the cash flows received can be calculated as follows:

To get the total present value of the investment, we add all the present values together: $28,571.43 + $13,605.44 + $12,957.56 + $12,341.49 + $11,753.80 = $79,229.72. So, the present value of this investment, given that the interest rate is 5% per year, is approximately $79,230.

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To find the present value of the investment with varying cash flows, use the formula for Present Value of an Annuity to discount each payment back to its present value. The total present value of the investment is $85,676.34.

The present value (PV) of the investment can be calculated by discounting each cash flow back to its present value using the formula for Present Value of an Annuity:

Calculate the PV of $30,000 to be received at the end of the year using the formula: PV = $30,000 / (1 + 0.05)¹ = $28,571.43

Calculate the PV of the annuity payment of $15,000 each year for 4 years using the formula for Present Value of an Annuity: PV = $15,000 ×[(1 - (1 + 0.05)⁻⁴) / 0.05] = $57,104.91

Sum up the PV of the two components to find the total present value of the investment: PV = $28,571.43 + $57,104.91 = $85,676.34

Answer:

Notes Receivables 40,000 debit

     Sales revenue            40,000 credit

-- to record the sale and the accepted promissory note--

interest receivables 1,000 debit

    interest revenue    1,000 credit

--to adjust for interest at year-end ---

Cash             41,500 credit

  Notes Receivables          40,000 credit

  Interest receivables           1,000 credit

 Interest revenue                    500 credit

--to record the maturity and honor of the note--

If we didn't make the adjusting entr. the 2021 income will be understated by 1,000 and the 2022 overstated by 1000

as we assing the 6 month of interest from 2021 into 2022 accounting period.

Explanation:

We record the sales reveneu for the nominal. over time we are going to accrue interest.

principal x rate x time = interest

we should express rate and time in the same metric, in this case as teh rate is annual we express time in portion of a year (X month / 12)

Adjusting entry at year-end

40,000 x 5% x  6 /12 = 1,000 interest revenue

At maturity:

40,000 x 5% x 3/12 = 500 interest revenue

And we have to write-of the note receivable and the interest receivables.

1) Journal Entry to Record Sale of Merchandise on June 30, 2021: Accounts Receivable - 40,000, Sales – 40,000. 2. Journal Entry for December 31, 2021 Interest Accrual: Interest Receivable - 1000, Notes Receivable - 40000 and Cash – 41000. 2) Income before income taxes will be understated by $1,000 in 2021 and there will be no impact on income before income taxes in 2022.

Part 1: Prepare Journal Entries

1. Journal Entry to Record Sale of Merchandise:

[tex]\[ \text{Accounts Receivable} \quad \quad \quad 40,000 \][/tex]

[tex]\[ \text{Sales} \quad \quad \quad \quad \quad \quad \quad 40,000 \][/tex]

To record the sale of merchandise on June 30, 2021.

2. Journal Entry for December 31, 2021 Interest Accrual:

To calculate interest accrued from June 30, 2021, to December 31, 2021:

[tex]\[ \text{Interest} = \text{Principal} \times \text{Annual Interest Rate} \times \text{Time} \][/tex]

Where:

Principal = $40,000

Annual Interest Rate = 5% = 0.05

Time = 6/12 = 0.5 year (from June 30 to December 31)

[tex]\[ \text{Interest Accrued} = 40,000 \times 0.05 \times 0.5 = 1,000 \][/tex]

Journal entry to record the interest accrual:

[tex]\[ \text{Interest Receivable} \quad \quad \quad 1,000 \][/tex]

[tex]\[ \text{Interest Revenue} \quad \quad \quad \quad 1,000 \][/tex]

To accrue interest revenue for the period from June 30, 2021, to December 31, 2021.

3. Journal Entry for March 31, 2022 Collection:

On March 31, 2022, the note plus accrued interest will be collected:

[tex]\[ \text{Accounts Receivable} \quad \quad \quad 41,000 \][/tex]

[tex]\[ \text{Interest Receivable} \quad \quad \quad \quad \quad \quad (1,000) \][/tex]

[tex]\[ \text{Notes Receivable} \quad \quad \quad \quad \quad \quad (40,000) \][/tex]

[tex]\[ \text{Cash} \quad \quad \quad \quad \quad \quad \quad \quad \quad 41,000 \][/tex]

To record the collection of the note and interest on March 31, 2022.

Part 2: Impact on Income Before Income Taxes

If the adjusting entry for the interest accrual on December 31, 2021, is not prepared, the impact on income before income taxes in 2021 and 2022 would be as follows:

2021:

Without the interest accrual entry, interest revenue of $1,000 would not be recognized.

Income before income taxes in 2021 would be understated by $1,000.

2022:

If the interest accrual is not adjusted, there would be no impact on 2022 since the interest would be recognized upon collection.