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.
I have $65,000 that I need to invest but I want to make more than the bank is offering. Where can I get a high return on a short-term investment with limited risk?
Answer:
Several low-risk portfolios With the higher returns:
Municipal Bonds. Credit Card Rewards. Annuities. Savings Bonds. Cash Value Life Insurance.Bank Bonuses.Explanation:
Municipal Bonds: Municipal bonds are loans made to local authorities by the creditors. Cities, territories, districts, or other municipalities.Credit card rewards: Point incentives are given based on each amount you invest-one point per dollar, for example. Usually, points can be exchanged for products in the online shopping store of the incentive scheme.Annuities: Annuities are insurance contracts that pledge either instantly or in the future to pay you a steady income. You may purchase a lump sum annuity or a sequence of installments.Saving bonds: Savings Bonds are US circulated treasury tools. Treasury Department to help pay for the spending requirements of the U.S. government. They are priced at face value.Cash-value life insurance: Cash value protection is long term life insurance since it provides cover for the existence of the policyholder. Cash value insurance historically has lower premiums than term life insurance because of the cash value factor.Bank Bonuses: Bank rewards are monetary incentives anytime you opening a new deposit or checking account. You would have to set up paper checks with the bank to hold the profile up for at least a couple of years to apply for this one-time bonus.Short-term investments with limited risk can include mutual funds, high-yield savings accounts, CDs, or short-term bond funds. The selection depends on the investor's risk tolerance and life stage, with younger individuals able to take on more risk with stock investments for long-term growth.
Explanation:When considering short-term investments with limited risk, it's crucial to understand the tradeoff between risk and return. While the stock market may offer high returns, these are generally associated with a longer investment horizon and come with considerable risk in the short term. For an investor seeking higher returns than bank offers but with limited risk, mutual funds may be a favorable option. Mutual funds provide the benefit of professional management and diversification, potentially reducing risk and transaction costs. However, for short-term investments, individuals may also consider certificates of deposit (CDs), high-yield savings accounts, or short-term bond funds, which offer better returns than traditional savings accounts with relatively low risk.
One must carefully consider their position in life and how much risk they are willing to take on. Young investors, with time to ride out market volatility, may find stocks suitable for long-term growth. Conversely, those nearing retirement might prioritize preserving capital and might lean towards less volatile investments.
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_____ combine the inputs in the production of goods and services for what are intended to be profitable ventures.A. PrivateersB. MarketersC. EconomistsD. CooperatorsE. Entrepreneurs
Answer:
The correct answer is letter "E": Entrepreneurs.
Explanation:
Entrepreneurs are individuals with special sights for investments. They tend to look for new ways of doing typical activities and by innovation set a business plan for a potential good or service to be offered to the public or a specific market. They find ways to use factors of productions to achieve the venture's goal.
Entrepreneurs are the individuals who combine inputs to produce goods and services in hopes of earning a profit, playing a key role in organizing factors of production in a market economy. Option E is correct.
The individuals who combine the inputs in the production of goods and services for what are intended to be profitable ventures are known as entrepreneurs. Entrepreneurs are crucial in a market economy, as they are responsible for hiring workers, buying resources, producing goods and services, and speculating on future market trends.
They take on the risk with the hope of earning profits by creating products or services that consumers desire. Their role is to initiate, manage, and take on the risks of a business or enterprise.
Entrepreneurs are the ones who see potential in the 'smorgasbord' of existing goods and services and rearrange them to meet future needs and demands. They are constantly on the lookout for opportunities to innovate and serve the market more effectively. In a market economy, the reward to workers for their labor comes through employers, who are essentially entrepreneurs - the idea men, decision makers, and risk takers.
As the manager of Margarita Mexican Restaurant, you must deal with a variety of business transactions. Provide an explanation for the following transactions: (Click the icon to view the transactions.) a. b. C. d. e. f. 9- More Info a. Debit Equipment and credit Cash. b. Debit Dividends and credit Cash. c. Debit Wages Payable and credit Cash. d. Debit Equipment and credit Common Stock e. Debit Cash and credit Unearned Revenue f. Debit Advertising Expense and credit Cash g. Debit Cash and credit Service Revenue.
Answer:
Explanation:
The explanation of the following transactions is given
a. Debit Equipment and credit Cash.
In this transaction, the equipment is purchased for cash so the equipment account is debited and the cash account is credited.
b. Debit Dividends and credit Cash.
In this transaction, the dividend is paid for cash so the dividend account is debited and the cash account is credited.
c. Debit Wages Payable and credit Cash.
In this transaction, the Accrued wages are paid for cash so the wages payable account is debited and cash account is credited.
d. Debit Equipment and credit Common Stock
In this transaction, the equipment is purchased for exchange of the common stock so the equipment account is debited and common stock is credited.
e. Debit Cash and credit Unearned Revenue
In this transaction, the cash is received for service rendered in the future so the cash account is debited and Unearned Revenue is credited.
f. Debit Advertising Expense and credit Cash
In this transaction, the advertising expense is paid for cash so the advertising expense account is debited and cash is credited.
g. Debit Cash and credit Service Revenue.
In this transaction, the cash is received for service performed so the cash account is debited and service Revenue is credited.
Lauren often travels to other grocery stores in the marketplace to observe how much they charge for the same products she stocks at her store. Sue is engaging in _________.
Answer:
market intelligence
Explanation:
Market intelligence -
It refers to the information or the knowledge which is necessary for the company like the latest trends , customers ratings , competitors etc. , is referred to as market intelligence.
The process of market intelligence require collecting data from various upcoming sources like internet , social media , news etc .
The method enable to be up to date with their products or services in the competitive world.
Hence, from the given scenario of the question,
Sue is performing market intelligence.
A function related to public relations that includes creating sales literature, meeting displays and promotions is
Answer:
The correct answer is: marketing communications.
Explanation:
Public Relations and the Marketing department of an organization work hand by hand. While one of them is in charge of promoting the firm's good or service the best way possible to earn a profit, the other is in charge of taking that image portrayed and publishing it personally to competitors and potential consumers through different marketing communications.
What are five groups of people to whom business communication might write letters of appreciation?
Answer:
expressing thanks for a gift, sending thanks for a favor, extending thanks for hospitality, and recognizing employees for their contribution, to answer a congratulatory note.
Final answer:
In the realm of business communication, letters of appreciation are written to customers, employees, suppliers, business partners, and community organizations or volunteers, aimed at acknowledging their support and fostering strong relationships.
Explanation:
In business communications, letters of appreciation are often sent to various groups of people to acknowledge their contributions or express gratitude for a positive action or relationship. Here are five groups that might receive such letters:
Customers: To thank them for their loyalty or feedback that helps the company to improve its services or products.Employees: To recognize their hard work, dedication, or to celebrate work anniversaries and other achievements.Suppliers and vendors: To appreciate their reliable service, quality products, or to acknowledge a successful collaboration.Business partners: To show gratitude for their part in joint ventures or continued support throughout business endeavors.Community organizations or volunteers: To thank them for their contribution to community events or corporate social responsibility activities that the business has been involved in.These letters not only convey thanks but also help to strengthen relationships, which can be vital for continued business success.
The profit that the vendor makes per day by selling x pretzels is given by the function. P(x) = -0.002x2 + 1.4x - 400. Find the number of pretzels that must be sold to maximize profit.
Answer:
350 the number of pretzels that must be sold to maximize profit.
Explanation:
P(x) = -0.002x2 + 1.4x - 400
Differentiating P(x) with respect to dx:
[tex]P(x)'=\frac{d(-0.002x2 + 1.4x - 400)}{dx}[/tex]
[tex]P(x)'=-2\times 0.002x+1.4[/tex]
Putting , P(x)' =0
[tex]0=-0.004x+1.4[/tex]
[tex]x=\frac{1.4}{0.004}=350[/tex]
we get , x = 350
Differentiating P(x)' with respect to dx:
[tex]P(x)''=-0.004[/tex]
P(x)''<0 (maxima)
350 the number of pretzels that must be sold to maximize profit.
To maximize profit, the vendor should sell 350 pretzels, which will yield a maximum profit of $45.
To find the number of pretzels that must be sold to maximize profit, we need to determine the maximum point of the profit function P(x) = -0.002x² + 1.4x - 400.
The maximum point of a quadratic function of this form occurs at the vertex of the parabola, which can be found using the formula for the x-coordinate of the vertex, [tex]x_v = -\frac{b}{2a}.[/tex]
Let's calculate the x-coordinate of the vertex:
[tex]x_v = -\frac{b}{2a} = -\frac{1.4}{2 \cdot (-0.002)} = -\frac{1.4}{-0.004} = \frac{1.4}{0.004} = 350.[/tex]
Therefore, the number of pretzels that must be sold to maximize profit is 350
The maximum profit can be found by substituting [tex]x_v[/tex] back into the profit function:
P(350) = -0.002(350)² + 1.4(350) - 400 = -0.002(122500) + 490 - 400 = -245 + 490 - 400 = 45.
So, the maximum profit is $45 when 350 pretzels are sold.
In conclusion, to maximize profit, the vendor should sell 350 pretzels, which will yield a maximum profit of $45."
In a Bring Your Own Device (BYOD) policy, the user acceptance component may include separation of private data from business data.A. TrueB. False
Answer:
A. True
Explanation:
When saying data we can be referring to both private information of the owner of the Smartphone as well as information of the organization since the user uses the phone to connect to services provided by it, which refers to the name of BYOD. The “Bring Your Own Device” (BYOD) phenomenon is based on the modality in which members of an organization are authorized to use their own personal mobile devices (smartphones, tablets, notebooks, etc.) in the activities of the organization where they work connected to the organizational network. The use of their devices to perform their work tasks in the organization causes what was a personal device to become part of the organizational network, with the problems that this could lead to.
The idea that nominal variables, such as the money stock, do not affect real variables in the long run, such as real output, is referred to asA. the velocity conceptB. the Mankiw effectC. price effectD. monetary neutrality
Answer:
The correct answer is letter "D": monetary neutrality.
Explanation:
Austrian economist Friedrich A. Hayek (1899-1992) referred to Monetary Neutrality as a theory that states that only nominal variables and not real variables affect money supply. At the same time, the money supply will affect prices and wages in the market but will not influence the output of the overall economy.
Determine how each of the following would affect the U.S. Production Possibilities Frontier (PPF).
Scenario Shift Outward Shift Inward Movement to a Point Closer to the Frontier Movement to a Point Inside the Frontier
1. An increase in the number of illegal immigrants
2. A war that takes place on U.S. soil
3. A decrease in the unemployment rate
4. The discovery of a new oil field
5. A law that requires individuals to enter lines of work for which they are not suited
Answer:
1. shift outward
2. shift inward
3. movement to a point closer to the frontier
4. shift outward
5. movement to a point inside the frontier
Explanation:
1. An increase in the number of illegal immigrants - shift outward
Causing the increase the number of cheap labor which can produce more goods in the economy.
2. A war that takes place on U.S. soil - shift inward
The war destroys the capital of the country which means that less can be produced.
3. A decrease in the unemployment rate - movement to a point closer to the frontier
The decrease in unemployment rate means more efficient utilization of resources.
4. The discovery of a new oil field - shift outward
The New oil field means that cheaper oil which will increase the production of goods in the economy .
5. A law that requires individuals to enter lines of work for which they are not suited - movement to a point inside the frontier
The Law that requires individuals to jobs for which they are not suites will lead to inefficient use of resources.
You just won the TVM Lottery. You will receive $1 million today plus another 10 annual payments that increase by $375,000 per year. Thus, in one year, you receive $1.375 million. In two years, you get $1.75 million, and so on. If the appropriate interest rate is 6.5 percent, what is the value of your winnings today?
Answer:
Total Present value (Sum of all PVs $21,624,467.720
Explanation:
The question is asking for the calculation or computation of the total PV of all the payments . This can be derived by summing up the Present Value (PV) of individual cash received.
Step 1: Calculate the Present Value of each cash payment
Formula= PV= C0 + C1/ (1+r) 1 + C2/ (1+r) 2 + …+ C n/ (1+r) n
C0, C1...Cn= Cash payments for each year for the 10 years
r= The rate each period.... in the question this is 6.5%
Step 2: Use the Formula to calculate annual cash payment
Year Cash payment
0 $1,000,000
1 $1,000,000 + $ 375,000 = $1,375,000
2 $1,375,000 + $ 375000 = $1,750,000
3 $1,750,000 + $ 375000 = $2,125,000
4 $2,125,000 + $ 375000 = $2,500,000
5 $2,500,000 + $ 375000 = $2,875,000
6 $2,875,000 + $ 375000 = $3,250,000
7 3,250,000 + $ 375000 = $3,625,000
8 $3,625,000 + $ 375000 = $4,000,000
9 4,000,000 + $ 375000 = $4,375,000
10 $4,375,000 + $ 375000 = $4,750,000
Step 3: Use the calculated annual cash payments and the formula in step 1 to compute the Total Present Value
Computation of PV:
Yr Cash (C) PV Factor PV Factor @ 6.5 % (F) PV( C x F)
0 1,000,000 1/(1+0.065)^0 1 1,000,000
1 1,375,000 1/(1+0.065)^1 0.939 $1,291,079.812
2 1,750,000 1/(1+0.065)^2 0.882 $1,542,903.745
3 2,125,000 1/(1+0.065)^3 0.828 $1,759,179.320
4 2,500,000 1/(1+0.065)^4 0.777 $1,943,307.727
5 2,875,000 1/(1+0.065)^5 0.730 $2,098,407.405
6 3,250,000 1/(1+0.065)^6 0.685 $2,227,335.886
7 3,625,000 1/(1+0.065)^7 0.644 $2,332,710.029
8 4,000,000 1/(1+0.065)^8 0.604 $2,416,924.751
9 4,375,000 1/(1+0.065)^9 0.567 $2,482,170.372
10 4,750,000 1/(1+0.065)^10 0.533 $2,530,448.669
Total Present value (Sum of all PVs) $21,624,467.720
Answer:
21,624,467.720
Explanation:
An investment of $10,000 has an investment/inflow ratio of 6.2 and a useful life of12 years. What are the annual cash inflow and internal rate of return?
Answer:
Annual cash flow = $1, 613
Internal rate of return = 12%
Explanation:
The internal rate of return ( I.R.R) is the discount rate that makes the present value of cash inflows to be equal to the present value of cash inflow.
The investment to inflow ratio = Investment
Annual cash inflow
6.2 = 10,000
y
6.2 × y = 10,000
y = 10,000/6.2
= 1,613
Annual cash inflow = $1,613
The internal rate of return,for this question, is the discount rate that equates the present value (PV) of $1, 613 for 12 years to 10,000
Present Value of Annuity = Annual cash flow × Annuity factor
10,000 = 1 612.9 × 6.2.
Note that the annuity factor is given as 6.2
To determine the rate that produces an annuity factor of 6.2, we use the Present Value of Annuity table.
Using the table,
We locate 12 under column labeled " n " - i.e no of periods, we look up for the figure 6.2 in the row opposite 12. The closest figure found is 6. 1944. Finally, we look up ( look upward )to find the rate that produces this figure, and it is 12%.
Note : Using the table, the intersection of 12% and 12 years gives the annuity factor 6.2
Annual cash flow = $1, 613
Internal rate of return = 12%
Network cooperative strategies among Silicon Valley firms have been successful, in part, because they are geographically close together.
O True O False
If 14,700 units are produced, the total amount of manufacturing overhead cost is closest to:
Fixed manufacturing overhead per unit (a) = $ 3.10
Number of units budgeted (b) = 12,200
Total fixed manufacturing cost (a) × (b) = $ 37,820
Variable overhead per unit (a) = $ 1.60
Number of units produced (b) = 14,700
Total variable overhead cost (a) × (b) = $ 23,520
Answer:
Total manufacturing overhead cost will be closest to 61,340
Explanation:
As we can see there is not step-up fixed cost that is no additional fixed cost will incurred upon producing extra units, therefore fixed cost will remain same that is 37,820.
Variable overhead cost will increase with increase in units therefore, variable cost for producing 14,700 units will be 1.6 x 14,700 = 23,520.
To find total overhead cost we will simply add fixed and variable overhead cost:
Total overhead cost = fixed overhead cost + variable overhead cost
Total overhead cost = 37,820 + 23,520
Total overhead cost = 61,340
During a risk assessment, it was discovered the location where the company would like to build a data center in subject to a large number of hurricanes. Management decided to purchase an insurance policy which will pay out in the event the data center is destroyed by a hurricane. This is an example of:
Answer:
risk transfer
Explanation:
Risk transfer is a risk management and control strategy that involves the contractual shifting of a pure risk from one party to another. One example is the purchase of an insurance policy, by which a specified risk of loss is passed from the policyholder to the insurer.
On January 1, 2017, Eagle borrows $17,000 cash by signing a four-year, 6% installment note. The note requires four equal payments of $4,906, consisting of accrued interest and principal on December 31 of each year from 2017 through 2020. (Round your intermediate calculations and final answers to the nearest dollar amount.)
Answer:
The question is:
Prepare the journal entries for Eagle to record the loan on January 1 2017 and the four repayments from 31st December 2017 through 31st December 2020?
The answer is:
1 January 2017
Dr Cash 17,000
Cr Note Payable 17,000
31 December 2017
Dr Interest expenses 1,020
Dr Note Payable 3,886
Cr Cash 4,906
(to record note principal and interest expenses payment)
31 December 2018
Dr Interest expenses 787
Dr Note Payable 4,119
Cr Cash 4,906
(to record note principal and interest expenses payment)
31 December 2019
Dr Interest expenses 540
Dr Note Payable 4,366
Cr Cash 4,906
(to record note principal and interest expenses payment)
31 December 2020
Dr Interest expenses 277
Dr Note Payable 4,629
Cr Cash 4,906
(to record note principal and interest expenses payment)
Explanation:
Working note for the repayment transaction:
- For all the four journal entries regarding the repayment, the Cash account is debited at $4,906 because the note requires four equal payments of $4,906.
The calculations of Principal repayment ( which is recorded as Dr Note Payable and Interest expenses which is recorded as Dr Interest Expense) for each year are as below:
31 December 2017:
Interest Expenses = Outstanding Note Payable * 6% = 17,000 * 6% = $1,020;
Principal repayment = 4,906 - Interest Expenses = 4,906 - 1,020 = $3,886.
31 December 2018:
Interest Expenses = Outstanding Note Payable * 6% = (17,000-3,886) * 6% = $787;
Principal repayment = 4,906 - Interest Expenses = 4,906 - 787 = $4,119.
31 December 2019:
Interest Expenses = Outstanding Note Payable * 6% = (17,000-3,886-4,119) * 6% = $540;
Principal repayment = 4,906 - Interest Expenses = 4,906 - 540 = $4,366.
31 December 2020:
Interest Expenses = Outstanding Note Payable * 6% = (17,000-3,886-4,119-4,366) * 6% = $277;
Principal repayment = 4,906 - Interest Expenses = 4,906 - 277= $4,629.
The question discusses a financial scenario where a company borrows money and repays it in equal yearly installments. These payments feature both principal and accrued interest. Over time, as the principal gets paid off, the amount of accrued interest decreases.
Explanation:On January 1, 2017, Eagle borrowed $17,000 cash by signing a four-year, 6% installment note. The note requires four equal payments consisting of accrued interest and principal on December 31 of each year starting from 2017 through 2020. This question pertains to the concept of installment notes, accrued interest, and loan principal repayment.
In this case, the borrower (Eagle) received $17,000 at the present moment, which is identical to the present value of what will be repaid to the lender over the period of four years. The equal payments of $4,906 include both the principal amount being repaid and the accrued interest on the note.
These annual payments shift money from the borrower's future (when they have presumably put the borrowed funds to profitable use) to the present, essentially paying back the lender for the use of their funds. Each payment reduces the loan balance, meaning that the part of each payment that covers the interest accrued on the note becomes less and less as the principal is gradually paid off.
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In order to remain competitive in the contemporary business environment, several firms have started training their employees to stop viewing problems as strictly functional --a marketing problem, or an accounting problem, for example. What does this trend illustrate about strategic management?
A.There has been a renewed emphasis on integrative thinking and solving problems cross-functionally.
B.Functional barriers are an inherent part of a company's value chain.
C.Firms are increasingly seeing the value of business intelligence.
D.SWOT analysis is designed to break down functional barriers
Answer:
A.There has been a renewed emphasis on integrative thinking and solving problems cross-functionally.
Explanation:
In order to live competing in the present marketing situation, various firms have commenced preparing their employees to hinder viewing obstacles as strictly operative, an accounting problem, or a marketing obstacle, concerning example, there has been a restored emphasis on integrative reasoning as well as working problem cross-functionally this trend explains concerning strategic management. Basically, as we know that strategic management is the ongoing planning, analysis, monitoring as well as evaluation of all that is essential for an association to meet its aims as well as objectives.
Which do you think would be more effective for shaping long-term ethical behavior in an organization: a written code of ethics combined with ethics training or strong ethical leadership? Which would have more impact on you? Why?
Explanation:
A code of ethics can be defined as a set of rules and guidelines that exist in an organization to regulate the behavior and actions of all employees.
Therefore, there is no way to guarantee that only a formal and written code of ethics is necessary for managers and employees to actually practice ethical behavior.
What will define whether the code of ethics is really implemented in the company is its conduct and positioning in the internal and external environment. There is a way for a company to be unethical and have a complete and not exercised code of ethics.
Therefore, for the organizational culture to be based on the values set out in the code of ethics, it is necessary to have strong ethical leadership, as the leader is responsible for motivating and guiding the actions of employees based on their own example, then in the long term , it can be said that an ethical leadership would be more impactful for the formation of the shared values that form the organizational culture.
Bose Company issued $600,000, 14 % bond on January 1
What is the journal entry if they issued it at 100?
What is the journal entry if they issued it at 95?
What is the journal entry if they issued it at 105?
What is the journal entry for interest payment at July 1?
Answer:
1) If bonds are issued as 100 entry will be
Debit Credit
Cash 600,000
Bonds payable 600,000
2) If bonds are issued at 95
Debit Credit
Cash 570,000
Discount 30,000
Bonds payable 600,000
3) If bonds are issued at 105
Cash 630,000
Bonds payable 600,000
Premium 30,000
4)
Debit Credit
Interest payable 42,000
Cash 42,000
Explanation:
1) If the bonds are issued at 100 then the company will receive the same amount of cash as the face value so they will receive 600,000 cash and will owe the bond buyers 600,000 so they will debit 600,000 cash and credit 600,000 bonds payable.
2) If bonds are issued at 95 then the company will receive cash 95% of 600,000 which is 570,000 so they will debit 570,000 cash, 30,000 will debited as discount and 600,000 bonds payable.
3) If bonds are issued at 105 then the company will receive cash 105% of 600,000 which is 630,000 so they will debit 630,000 cash and will credit 600,000 bonds payable and 30,000 as premium.
4) The bonds are issued on January 1 and there is a journal entry of interest payment at July 1 so we assume that the bond has semi annual payments.
14% of 600,000 is 84,000 and we will divide it by 2 to find the semi annual payment which will be 42,000, so we will debit interest payable by 42,000 and credit cash by 42,000.
Both normal and special cause variation add to project cost and need to be considered by project managers
True or false?
Answer:
True
Explanation:
Variations in both common and special circumstances contribute to project costs and need to be weighed by project managers when they want to work more often.
Variability, is the degree to which data deviate differ from the estimated value in a probability distribution or data set, and the extent to which those data points differ from one another. This is most commonly attributed in financial terms to the volatility of the returns on investment.therefore the answer is true for the following.
Which assumption or principle requires that all information significant enough to affect adecision of reasonably informed users should be reported in the financial statements?a.Matching.b.Going concern.c.Historical cost.d.Full disclosure.
Answer:
Letter d is correct. Full disclosure.
Explanation:
The accounting principle of full disclosure can be defined as GAAP requirements for an organization's management to provide all key information about the company's operations to investors and creditors, so that such external users can use the financial statements and notes. relevant footers to assist in the decision-making process.
Therefore, the main objective of the full disclosure principle is that there is a principle of transparency for organizations in the disclosure of financial information capable of influencing the judgment of external users, such as past transactions and future contingent events to third parties.
Over the last 50 years in the US, GDP per person has grown at approximately 1% per year, while capital per person has been accumulating at around 0.5% per year. Assume a capital share of 0.3. What is the growth rate of the Solow residual?
Answer:
Explanation:
Growth rate of GDP per worker = growth rate of technology + capital share X growth rate of capital per worker
0.01 = growth rate of solow residual + 0.3*0.005
growth rate of solow residual = 0.0085 =8.5%
What is the present value of a growing perpetuity that makes a payment of $100 in the first year, which thereafter grows at 3% per year
Answer:
present value = $2500
Explanation:
given data
Dividend D = $100
grows g = 3% per year
solution
we consider here discount rate that is ke = 7%
so now we apply here present value formula that is
present value = [tex]\frac{D}{ke-g}[/tex] ..............................1
put here value and we will get
present value = [tex]\frac{100}{0.07-0.03}[/tex]
solve it and we will get
present value = $2500
During the year, EcoWash Corporation has $ 310 comma 000 in revenues, $ 95 comma 000 in expenses, and $ 6 comma 000 in dividend declarations and payments. Net income for the year was:
Answer:
$215,000
Explanation:
Given that,
EcoWash Corporation has:
Revenues = $310,000
Expenses = $95,000
dividend declarations and payments = $6,000
Hence, the net income is determined by subtracting expenses from the revenues.
Net income:
= Revenues - Expenses
= $310,000 - $95,000
= $215,000
Therefore, the EcoWash Corporation has a net income of $215,000 for the year.
The May transactions of Hanschu Corporation were as follows.May 4 Paid $700 due for supplies previously purchased on account.May 7 Performed advisory services on account for $6,800.May 8 Purchased supplies for $850 on account.May 9 Purchased equipment for $1,000 in cash.May 17 Paid employees $530 in cash.May 22 Received bill for equipment repairs of $900.May 29 Paid $1,200 for 12 months of insurance policy. Coverage begins June 1.Journalize the transactions.
Answer:
The Journal entries are as follows:
(i) On May 4,
Accounts payable A/c Dr. $700
To cash $700
(To record the supplies)
(ii) On May 7,
Accounts receivable A/c Dr. $6,800
To service revenue $6,800
(To record the service revenue)
(iii) On May 8,
Supplies A/c Dr. $850
To accounts payable $850
(To record the purchase of supplies on account)
(iv) On May 9,
Equipment A/c Dr. $1,000
To cash $1,000
(To record the equipment purchased)
(v) On May 17,
Salary expense A/c Dr. $530
To cash $530
(To record the salary expense)
(vi) On May 22,
Repair expense A/c Dr. $900
To accounts payable $900
(To record the repair expense)
(vii) On May 29,
Prepaid Insurance A/c Dr. $1,200
To cash $1,200
(To record the prepaid insurance)
Simons Company purchased land to build a new factory. The following expenditures were made in conjunction with the land purchase:
O Purchase price of the land, $150,000
O Real estate commissions of 7% of the purchase price
O Land survey, $5,000
O Back taxes, $5,000
1. What is the initial value of the land?
Multiple Choice:
a. $160,000 b. $160,500 c. $165,500 d. $170,500
Answer: attached
Explanation:
Final answer:
The initial value of the land purchased by Simons Company is calculated by adding the purchase price with real estate commissions, land survey fees, and back taxes, totaling to $170,500.
Explanation:
The initial value of the land bought by Simons Company for building a new factory would include the purchase price, any fees, and other necessary expenditures directly related to the acquisition of the land. To calculate this value, we sum up the following:
Purchase price of the land: $150,000
Real estate commissions (7% of the purchase price): $150,000 * 0.07 = $10,500
Land survey: $5,000
Back taxes: $5,000
Therefore, the initial value of the land is calculated as follows:
$150,000 + $10,500 + $5,000 + $5,000 = $170,500
So, the correct answer is d. $170,500.
Last year Oliver Inc had a total assets turnover of 1.60 and an equity multiplier of 1.85. Its sales were $200,000 and its net income was $10,000. The CFO believes that the company could have operated more efficiently, lowered its costs, and increased its net income by $5,000 without changing its sales, assets, or capital structure. Had it cut costs and increased its net income in this amount, by how much would the ROE have changed
Answer:
7.4%
Explanation:
As we know that
ROE = Profit margin × Total asset turnover × Equity multiplier
where,
Profit margin = (Net income ÷ Sales) × 100
= ($10,000 ÷ $200,000) × 100
= 5%
So, the ROE would be
= 5% × 1.60 × 1.85
= 14.8%
Now if the net income is increased by $5,000
So, the updated profit margin would be
= (Net income ÷ Sales) × 100
= ($15,000 ÷ $200,000) × 100
= 7.5%
And updated ROE would be
= 7.5% × 1.60 × 1.85
= 22.2%
So, the change in ROE would be
= 22.2% - 14.8%
= 7.4%
Which one of the following statements is true regarding JIT inventory?
A) It exists just in case something goes wrong.
B) It hides variability.
C) It is the minimum inventory necessary to keep a perfect system running.
D) It is minimized with large lot production
Answer:
The correct answer is letter "C": It is the minimum inventory necessary to keep a perfect system running.
Explanation:
Just in Time (JIT) inventory is a system of supplying goods as close as possible to when they are needed. For a company that resells, this means goods arrive just before hitting the shelves for customer purchases. For a manufacturing company, it means part and raw materials arrive just before they are added to the final product.
Keeping less inventory on hand means a company has more available cash and credit for other users.
The true statement about JIT inventory is that it is the minimum inventory necessary to keep a perfect system running. JIT aims to reduce waste and increase efficiency by reducing inventory costs, not hiding variability nor relying on large lot production.
Explanation:The correct statement regarding JIT (Just In Time) inventory is: It is the minimum inventory necessary to keep a perfect system running. This inventory management strategy aims to increase efficiency and decrease waste by receiving goods only as they are needed in the production process, thus reducing inventory costs. JIT inventory ensures that the production system operates with the minimum amount of inventory necessary to maintain a smooth workflow.
JIT inventory is not just there 'just in case' (A), it does not hide variability but rather exposes issues (B), and it is not minimized with large lot production; in fact, the opposite is true as JIT aims to minimize inventory levels (D).
In the 1980s, companies like Honda implemented JIT delivery to improve quality control and efficiency. Quality control is better with JIT because it allows immediate detection of defective parts before they are mass-produced. This leads to suppliers being generally located within one day's drive of the main assembly plant to ensure timely delivery.
Learn more about JIT Inventory here:
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Concord, Inc. has collected the following data for November (there are no beginning inventories): Units produced and sold 500 units Sales price $450 per unit Direct materials 64 per unit Direct labor 68 per unit Variable manufacturing overhead 26 per unit Fixed manufacturing overhead 7,500 per month Variable selling and administrative costs 15 per unit Fixed selling and administrative costs 4,400 per month E21A-47 Computing absorption costing operating income Refer to the information for Concord, Inc.
Requirements
1. Using absorption costing, calculate the unit product cost.
2. Prepare an income statement using the traditional format. Miller-Nobles, Tracie. Horngren's Accounting (p. 1183). Pearson Education. Kindle Edition.
Final answer:
The unit product cost under absorption costing for Concord, Inc. is $173. The income statement using the traditional format shows an operating income of $126,600 for the month of November.
Explanation:
To calculate the unit product cost using absorption costing, we need to add together the direct materials, direct labor, variable manufacturing overhead, and a portion of the fixed manufacturing overhead costs allocated per unit. Given the data:
Direct materials: $64 per unitDirect labor: $68 per unitVariable manufacturing overhead: $26 per unitTotal fixed manufacturing overhead: $7,500 per monthTo find the fixed manufacturing overhead cost per unit, divide the total fixed costs by the number of units produced:
Fixed manufacturing overhead per unit = $7,500 / 500 units = $15 per unit
Now, add all the costs per unit to find the unit product cost:
Unit product cost = Direct materials + Direct labor + Variable manufacturing overhead + Fixed manufacturing overhead per unit = $64 + $68 + $26 + $15 = $173 per unit.
Next, for the traditional format income statement:
Total Sales (500 units × $450) = $225,000Cost of Goods Sold (500 units × $173) = $86,500Gross Margin = Total Sales - Cost of Goods Sold = $225,000 - $86,500 = $138,500Total Variable Selling and Admin Costs (500 units × $15) = $7,500Total Fixed Selling and Admin Costs = $4,400Total Selling and Admin Costs = Total Variable + Total Fixed = $7,500 + $4,400 = $11,900Operating Income = Gross Margin - Total Selling and Admin Costs = $138,500 - $11,900 = $126,600Could I Industries just paid a dividend of $1.35 per share. The dividends are expected to grow at a rate of 19 percent for the next five years and then level off to a growth rate of 7 percent indefinitely. If the required return is 13 percent, what is the value of the stock today?
Answer:
$38.956
Explanation:
According to dividend valuation model, the value of stock today is the present value of all the dividends that it will receive in future.
Based on the above discussion, the value of stock shall be calculated as follows:
Present value of Year 1 dividend= $1.42
1.6065(1+13%)^-1
Present value of Year 2 dividend= $1.496
1.91(1+13%)^-2
Present value of Year 3 dividend= $1.57
2.27(1+13%)^-3
Present value of Year 4 dividend= $1.66
2.7013(1+13%)^-4
Present value of Year 5 dividend= $1.74
3.21(1+13%)^-5
Present value of dividend after Year 5=$31.07
(3.21(1+7%)/(13%-7%))*(1+13%)^-5
Price of share= $38.956