Answer:
[tex]\left[\begin{array}{ccc}&Q1&Q2\\beginning&30,900&25,750\\receipts&254,410&398,610\\disbursement&-272,950&-372,806\\interest&0&-206\\subtotal&12,360&50,892.3\\minimun&25,750&25,750\\Financing&&\\beginning&0&13,390\\payment/loan&13,390&-13,390\\ending&13,390&0\\&&\\ending cash&25750&37502.3\\\end{array}\right][/tex]
Explanation:
Q1
proceeds from disposal of equipment 12360
sales 242050
outlay:
salaries 144200
overhead cost 79310
S&A cost 51500
depreciation (2060)
Q2
interest revenue from investment 7210
sales 391400
outlay:
salaries 144200
overhead cost 103000
S&A cost 72100
depreciation (2060)
purchase of equipment 51500
interest payment 206
To prepare the cash budget for the first two quarters of 2020, calculate the cash inflows and outflows for each period. The cash inflows include collections from clients and sale of equipment. The cash outflows include professional salaries, overhead costs, selling and administrative costs, income tax payment, and purchase of equipment.
Explanation:To prepare the cash budget for each of the first two quarters of 2020, we need to calculate the cash inflows and outflows for each period. For the first quarter, the cash inflows include collections from clients of $242,050 and the sale of equipment for $12,360. The cash outflows include professional salaries of $144,200, overhead costs of $79,310, selling and administrative costs of $51,500, and income tax payment of $0. The ending cash balance for the first quarter would be calculated by adding the beginning cash balance of $30,900 to the cash inflows and subtracting the cash outflows.
For the second quarter, the cash inflows include collections from clients of $391,400 and interest from investments of $7,210. The cash outflows include professional salaries of $144,200, overhead costs of $103,000, selling and administrative costs of $72,100, income tax payment of $4,120, and purchase of equipment for $51,500. The ending cash balance for the second quarter would be calculated by adding the beginning cash balance of $30,900 to the cash inflows and subtracting the cash outflows.
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Consolidation Eliminating Entries, Date of Acquisition and Two Years Later Plaza Hotels acquired a 90 percent interest in Stardust Casinos on January 1, 2020 for $51,100,000. The fair value of the 10 percent noncontrolling interest at the date of acquisition was $2,900,000. Stardust’s date-ofacquisition reported net assets were carried at amounts approximating fair value, except for these items: • Plant and equipment, 10-year life, straight-line, is overvalued by $6,000,000. • Previously unrecorded limited-life identifiable intangibles, 4-year life, straight-line, were valued at $8,000,000. Stardust’s equity accounts at the date of acquisition were as follows: Capital stock $300,000 Retained earnings 1,650,000 Accumulated other comprehensive income 50,000 Total $2,000,000 Stardust reports net income of $4,000,000 and other comprehensive loss of $10,000 for 2021. Stardust reported net income of $2,800,000 and other comprehensive income of $25,000 in 2020. Stardust did not declare any dividends in either year. Goodwill from this acquisition is impaired by $200,000 during 2021, but was not impaired in 2020. Required a. Calculate the original goodwill for this acquisition and its allocation to controlling and noncontrolling interests. In what ratio is goodwill allocated between controlling and noncontrolling interests? Enter your answers in thousands ($51,100,000 equals $51,100 in thousands). Enter your ratio answers in percentages.
Answer:
a. AT ACQUISITION DATE TOTAL Parent NCI
Capital stock 300 270 30
retained earnings 1650 1485 1650
goodwill 52050 46845 5205
investment 54000 51100 29000
b.Goodwill is allocated at 9:1 ratio
90% ; 10% given
Explanation:
The difference in these amounts is big, suspicions of error in typing amounts in the question. Even after the answer is in thousands
Original goodwill is calculated using the fair value of the consideration transferred plus the fair value of the noncontrolling interest, less the adjusted net assets at acquisition. It amounted to $50,000,000 for the Plaza Hotels acquisition of Stardust Casinos, with allocations of $45,000,000 to the controlling interest and $5,000,000 to the noncontrolling interest, following a ratio of 90:10.
Calculation of Original Goodwill and Its Allocation
The calculation of original goodwill in the context of a business combination, such as an acquisition, takes into account the fair value of the consideration transferred, the fair value of the noncontrolling interest, and the fair value adjustments for identifiable net assets of the acquire.
When Plaza Hotels acquired a 90 percent interest in Stardust Casinos, the goodwill was calculated based on the acquisition price, the fair value of the noncontrolling interest, and fair value adjustments.
The original purchase price for the 90% interest was $51,100,000, and the fair value of the noncontrolling interest for the remaining 10% was $2,900,000, leading to a total fair value of the business of $54,000,000 ($51,100,000 + $2,900,000).
The book value of Stardust's equity was $2,000,000, but adjustments were needed for items not reflected at fair value.
Plant and equipment were overvalued by $6,000,000 and needed to be reduced, while the previously unrecorded intangible assets valued at $8,000,000 were added.
Adjusted net assets of Stardust at acquisition were:
Book value of equity: $2,000,000
Less overvaluation of plant and equipment: $6,000,000
Addition for intangibles not previously recorded: $8,000,000
Adjusted net assets = $4,000,000 ($2,000,000 - $6,000,000 + $8,000,000). Original goodwill can then be calculated as follows:
Total fair value of Stardust ($54,000,000) - Adjusted net assets ($4,000,000) = $50,000,000.
This total goodwill is then allocated between the controlling and noncontrolling interests based on their ownership percentages:
Goodwill attributed to controlling interest (Plaza Hotels): 90% x $50,000,000 = $45,000,000
Goodwill attributed to noncontrolling interest: 10% x $50,000,000 = $5,000,000
The ratio of goodwill allocation between controlling and noncontrolling interests is 90:10.
Find the cost of building a new fabrication plant that will be 33% bigger than a similar plant that cost $8 million to build. The appropriate capacity exponent is 0.90.
Solution:
Let the size of old plant be x
New plant is 33% bigger than the old plant.
So,
Size of the new plant [tex]=x+(0.33 * x)[/tex]
= x + 0.33x = 1.33x
Cost of the old plant = $8 million
Capacity exponent = 0.90
Calculate the cost of new plant -
Cost of new plant = Cost of old plant * (Size of new plant/Size of old plant)capacity exponent
Cost of new plant =[tex]=\$ 8 \text { million } *(1.33 \mathrm{x} / \mathrm{x})^{0.90}[/tex]
Cost of new plant =[tex]\text { S8 million } *(1.33)^{0.90}[/tex] = $10.34 million
Thus,
The cost of building new plant is $10.34 million.
Final answer:
To find the cost for a fabrication plant 33% larger than a plant costing $8 million, the new plant capacity is calculated as $10.64 million. Due to the capacity exponent of 0.90, the cost increase is less than the capacity increase, resulting in a new cost of $10.248 million.
Explanation:
To find the cost of building a new fabrication plant that is 33% bigger than a similar plant that cost $8 million to build, we start by recognizing that this is a math problem involving economies of scale and the specific capacity exponent, which is 0.90 in this case. The capacity exponent is often used to determine how costs scale with production capacity.
First, we calculate the new size of the plant by increasing the similar plant size by 33%. Since the original plant cost $8 million, we find the increased capacity:
New Capacity = Original Capacity x (1 + Percentage Increase)
New Capacity = $8 million x (1 + 0.33)
New Capacity = $8 million x 1.33
New Capacity = $10.64 million
However, due to the capacity exponent of 0.90, the cost increase will be less than proportional to the increase in capacity:
New Cost = Original Cost x (New Capacity / Original Capacity) ^ Capacity Exponent
New Cost = $8 million x (1.33) ^ 0.90
New Cost = $8 million x 1.281
New Cost = $10.248 million
One of the Gestalt principles, _____, refers to drawing connections between things that occur in sequence.
Answer:
Continuity
Explanation:
One of the Gestalt principles, Continuity, refers to drawing connections between things that occur in sequence.
Gestalt principle are group principle of psychology that define about how human brain percieve objects when it see group of element or sequence or certain patterns.
Gestalt has certain principle of visual perception to undertand how human brain create structure of an object:
SimilarityProximityCommon regionContinuity.Closure.Focal point.Figure ground.In the given case, It talk about continuity principles that refer human brain percieve element to be more related to each other if it is arranged in line or curve than which are not arranged.
The process for converting present values into future values is called compounding. This process requires knowledge of the values of three of four time-value-of-money variables. Which of the following is not one of these variables?
a. The trend between the present and future values of an investment
b. The interest rate (I) that could be earned by deposited funds
c. The duration of the deposit (N)
d. The present value (PV) of the amount deposited
Answer:
The correct answer is letter "A": The trend between the present and future values of an investment.
Explanation:
Compounding is the process in which earnings of an investment are reinvested to earn more profits in a determined period of time. In other words, present values are used to convert them into future values expecting they will be higher. Compounding can also be defined as interest on interest.
To compute compounding figures it is necessary the interest rate that could be earned out of an investment and its duration and the present value of the investment in dollars quantity.
Thus, the trend between the present and future value of the investment remains useless for compounding.
A company has determined that its optimal capital structure consists of 43 percent debt and the rest is equity. Given the following information, calculate the firm's weighted average cost of capital.kd = 7.0 %Tax rate = 35 %P0 = $ 28.86 Growth = 4.9 %D1 = $ 0.94 Show your answer to the nearest .1%
Answer:
31.5%
Explanation:
Given from the question kd = 7.0 %
Tax rate = 35 %
P0 = $ 28.86
Growth g = 4.9 %
D1 = $ 0.94
First find the cost of common stock by
rS = D1/P0 + g
=0.94/$28.86 + 0.49
=0.523
= 52.3%
Finally, calculate the weighted average cost of capital WACC,
using rs= 0.523,
Tax rate =43% =0.43
Equity E 100% - 43% = 57% =0.57 and
kd=7.0 % = 0.07
so WACC = (D/A)(1 - Tax rate)kd+(E/A)rs
= 0.43(1 - 0.43)(0.07) + 0.57(0.523)
0.0172 + 0.298
= 0.315
= 31.5%
When a company has become proficient in modifying, upgrading, or deepening the company's resources and capabilities in response to its changing environment and market opportunities, it is called a______________.a. core competence. b. dynamic capability.c. strategic assessment.d. competitive strength matrix.e. distinct competence.
Answer:
b. dynamic capability
Explanation:
The competence described in the question is a company's dynamic capability because it represents the company's ability to change its internal functions according to the dynamics of external enviroment.
A company with a high dynamic capability is able to assess the changes that the market is going through, and adpat itself to those changes. A company that lacks dynamic capability can easily be swayed by market changes, and lose market share, or even, disappear completely.
Suppose on January 1 Austin's Tavern prepaid rent of $ 13 comma 200 for the full year. At May 31, how much rent expense should be recorded for the period January 1 through May 31? At May 31, Austin's Tavern should record $ 3,300 of rent expense.
Answer:
Austin's Tavern should record $5,500 as rent expense at May 31.
Explanation:
When an amount is prepaid, it is recorded in the books by debiting prepaid expense (rent in this case) and crediting cash account. When the expense is incurred, the required entries are debit rent expense and credit prepaid rent.
If $13,200 was prepaid for the full year as at 1 January, as at May 31, expense incurred
= 5/12 × $13,200
= $5,500
Hence Austin's Tavern should record $5,500 as rent expense at May 31.
[The following information applies to the questions displayed below.] Raner, Harris & Chan is a consulting firm that specializes in information systems for medical and dental clinics. The firm has two offices—one in Chicago and one in Minneapolis. The firm classifies the direct costs of consulting jobs as variable costs. A contribution format segmented income statement for the company’s most recent year is given: Office Total Company Chicago Minneapolis Sales $ 450,000 100.0 % $ 90,000 100 % $ 360,000 100 % Variable expenses 243,000 54.0 % 27,000 30 % 216,000 60 % Contribution margin 207,000 46.0 % 63,000 70 % 144,000 40 % Traceable fixed expenses 100,800 22.4 % 46,800 52 % 54,000 15 % Office segment margin 106,200 23.6 % $ 16,200 18 % $ 90,000 25 % Common fixed expenses not traceable to offices 72,000 16.0 % Net operating income $ 34,200 7.6 % Required:
1-a. Compute the companywide break-even point in dollar sales.
1-b. Compute the break-even point for the Chicago office and for the Minneapolis office.
1-c. Is the companywide break-even point greater than, less than, or equal to the sum of the Chicago and Minneapolis break-even points?
Answer:
Part 1-a: The breakeven of the complete company is $375652.17
Part 1-b: The breakeven for the Chicago Office is $66857.14 while that of the Minneapolis office is $135000.
Part 1-c: The value of breakeven for the company is more than that of the Chicago and Minneapolis office.
Explanation:
Part 1-a
For the whole company
[tex]Contribution \,Ratio=\dfrac{Contribution\, Margin \times 100}{Sales}[/tex]
Here the Contribution Margin is $207,000
Sales is $450,000
So the contribution ratio is given as
[tex]Contribution \,Ratio=\dfrac{207000 \times 100}{450000}\\Contribution \,Ratio=46\%[/tex]
Now Fixed cost of the company is given as sum of the traceable fixed expenses and non-traceable expenses which are given as
[tex]Fixed \,Cost=Traceable\, Fixed\, Expenses+Non-traceable\, Fixed\, Expenses[/tex]
Here
Traceable fixed expenses are $100,800
Non traceable fixed expenses are 72,000
[tex]Fixed \,Cost=Traceable\, Fixed\, Expenses+Non-traceable\, Fixed\, Expenses\\Fixed \,Cost=100800+72000\\Fixed \,Cost=172800[/tex]
Now the Breakeven is given as
[tex]Breakeven=\dfrac{Fixed\,Cost}{Contribution\,Ratio}\\Breakeven=\dfrac{172800}{46\%}\\Breakeven=\dfrac{172800}{0.46}\\Breakeven=\$375652.17[/tex]
So the breakeven of the complete company is $375652.17
Part 1-b
ChicagoFor the Chicago office
[tex]Contribution \,Ratio=\dfrac{Contribution\, Margin \times 100}{Sales}[/tex]
Here the Contribution Margin is $63,000
Sales is $90,000
So the contribution ratio is given as
[tex]Contribution \,Ratio=\dfrac{63000 \times 100}{90000}\\Contribution \,Ratio=70\%[/tex]
Traceable fixed cost for Chicago are $46,800
Now the Breakeven is given as
[tex]Breakeven=\dfrac{Fixed\,Cost}{Contribution\,Ratio}\\Breakeven=\dfrac{46800}{70\%}\\Breakeven=\dfrac{46800}{0.70}\\Breakeven=\$66857.14[/tex]
So the breakeven of the Chicago office is $66857.14
MinneapolisFor the Minneapolis office
[tex]Contribution \,Ratio=\dfrac{Contribution\, Margin \times 100}{Sales}[/tex]
Here the Contribution Margin is $144,000
Sales is $360,000
So the contribution ratio is given as
[tex]Contribution \,Ratio=\dfrac{144000 \times 100}{360000}\\Contribution \,Ratio=40\%[/tex]
Traceable fixed cost for Chicago are $54,000
Now the Breakeven is given as
[tex]Breakeven=\dfrac{Fixed\,Cost}{Contribution\,Ratio}\\Breakeven=\dfrac{54000}{40\%}\\Breakeven=\dfrac{54000}{0.40}\\Breakeven=\$135000[/tex]
So the breakeven of the Minneapolis office is $135000
Part 1-c
The sum of the breakeven for the Chicago and Minneapolis office is $66857.14+$135000=$201857.14
The value of breakeven for the company is $375652.17
As the value of breakeven for the company is more than that of the Chicago and Minneapolis office.
Final answer:
The companywide break-even point is $375,750, calculated by dividing total fixed costs by the contribution margin ratio. The Chicago office's break-even point is $66,861, and the Minneapolis office's break-even point is $135,000. The companywide break-even point is not equal to the sum of both offices' break-even points.
Explanation:
To calculate the companywide break-even point in dollar sales, we use the formula Break-even Point (BEP) = Total Fixed Costs / (Total Sales - Variable Costs). From the given information, total fixed costs are the sum of traceable fixed expenses and common fixed expenses not traceable to offices, which equals $100,800 + $72,000 = $172,800.
The total sales and variable costs are given as $450,000 and $243,000 respectively. Therefore:
BEP = $172,800 / ($450,000 - $243,000)BEP = $172,800 / $207,000BEP = 0.835To find the dollar amount of the break-even point, we multiply the BEP ratio by total sales:
BEP in dollars = 0.835 * $450,000BEP in dollars = $375,750The break-even point for each office is calculated separately using the same formula, including only the fixed costs traceable to that office.
For the Chicago office:
BEP = $46,800 / ($90,000 - $27,000)BEP = $46,800 / $63,000BEP = 0.7429BEP in dollars = 0.7429 * $90,000BEP in dollars = $66,861For the Minneapolis office:
BEP = $54,000 / ($360,000 - $216,000)BEP = $54,000 / $144,000BEP = 0.375BEP in dollars = 0.375 * $360,000BEP in dollars = $135,000The companywide break-even point is not equal to the sum of the Chicago and Minneapolis break-even points. When adding up the break-even points of both offices, we get $66,861 (Chicago) + $135,000 (Minneapolis) = $201,861, which is less than the companywide break-even point of $375,750.
The estimated total manufacturing overhead cost is $200,000. The estimated total amount of the allocation base is 40,000 direct labor-hours. The actual total manufacturing overhead cost for the period is $220,000 and the actual direct labor hours worked on all jobs during the period is 41,000 hours. The total under-applied (over-applied) overhead for the period is:a. $20,000 under-appliedb. $20,000 over-appliedc. $15,000 under-appliedd. $15,000 over-applied
Answer:
$15,000 under applied
Actual overhead of $220,000 minus applied overhead of $205,000 (200,000/40,000 direct labor hours • 41,000 actual hours worked) equals 15,000 under applied
Explanation:
Bonds often pay a coupon twice a year. For the valuation of bonds that make semiannual payments, the number of periods doubles, whereas the amount of cash flow decreases by half. Using the values of cash flows and number of periods, the valuation model is adjusted accordingly. Assume that a $1,000,000 par value, semiannual coupon US Treasury note with three years to maturity has a coupon rate of 3%. The yield to maturity (YTM) of the bond is 7.70%. Using this information and ignoring the other costs involved, calculate the value of the Treasury note:
Answer:
The value of the treasury note is $ 876,205.93
Explanation:
I simply discounted all relevant cash flows using the discount factor formula 1/(1+r)^N,where r is the yield to maturity divided by 2 as the interest is paid twice a year and N is the number of years of the bond 3, multiplied by number of interest payments in a year,2.
Find attached for details.
On February 1, 2021, Arrow Construction Company entered into a three-year construction contract to build a bridge for a price of $8,510,000. During 2021, costs of $2,170,000 were incurred with estimated costs of $4,170,000 yet to be incurred. Billings of $2,670,000 were sent, and cash collected was $2,420,000.
In 2022, costs incurred were $2,670,000 with remaining costs estimated to be $3,855,000. 2022 billings were $2,920,000 and $2,645,000 cash was collected. The project was completed in 2023 after additional costs of $3,970,000 were incurred. The company’s fiscal year-end is December 31. Arrow recognizes revenue over time according to the percentage of completion.
Required:
1. Compute the amount of revenue and gross profit or loss to be recognized in 2021, 2022, and 2023 using the percentage of completion method.
2a. Prepare journal entries for 2021 to record the transactions described (credit "various accounts" for construction costs incurred).
2b. Prepare journal entries for 2022 to record the transactions described (credit "various accounts" for construction costs incurred).
3a. Prepare a partial balance sheet to show the presentation of the project as of December 31, 2021.
3b. Prepare a partial balance sheet to show the presentation of the project as of December 31, 2022.
Revenue and gross profit or loss are calculated using the percentage of completion method based on costs incurred and estimated total costs for each of Arrow Construction Company's fiscal years (2021, 2022, 2023). Journal entries would reflect the progression of the construction costs, billings, and revenue recognition.
Explanation:Calculation of Revenue and Gross Profit/Loss
Using the percentage of completion method, the recognized revenue and gross profit or loss for each year would be calculated based on the costs incurred and the total estimated costs. Here's how to calculate it for each year:
2021:
Total costs incurred to date: $2,170,000
Total estimated costs: $2,170,000 + $4,170,000 = $6,340,000
Percentage of completion: $2,170,000 / $6,340,000 = 34.22%
Revenue recognized: 34.22% of $8,510,000 = $2,910,467
Gross profit: Revenue recognized - Costs incurred = $2,910,467 - $2,170,000 = $740,467
2022:
Total costs incurred to date: $2,170,000 + $2,670,000 = $4,840,000
Total estimated costs: $4,840,000 + $3,855,000 = $8,695,000
Percentage of completion: $4,840,000 / $8,695,000 = 55.68%
Revenue recognized: 55.68% of $8,510,000 = $4,736,028
Gross profit: Revenue recognized - Costs incurred to date = $4,736,028 - $4,840,000 = ($103,972) (loss)
2023:
Total costs incurred: $8,810,000
Total contract price: $8,510,000
Revenue recognized: $8,510,000 (full contract price as project is completed)
Gross profit: Revenue recognized - Costs incurred to date = $8,510,000 - $8,810,000 = ($300,000) (loss)
Journals entries for transactions and partial balance sheet presentations would follow the standard accounting format showing construction in progress, billings on construction contract, and construction costs, among other accounts.
1) Amount of Revenue and Gross profit or loss (2021,2022, and 2023) is $744,624, -$845,305 (Gross Loss), -$199,319 (Gross Loss)
2a) Journal entries for 2021 is (Record construction costs $2,170,000 , Record Billings $2,670,000 , Record cash collected $2,420,000)
2b) Journal entries for 2022 is (Record construction costs $2,670,000 , Record Billings $2,920,000, Record cash collected $2,645,000)
3a) Partial balance sheet for December 31, 2021 is $244,624
3b) Partial balance sheet for December 31, 2022 is $850,681
Percentage of Completion Method for Construction Contract:
Let's calculate the revenue and gross profit to be recognized in each year using the percentage of completion method:
1. Revenue and Gross Profit Calculation:
2021:
Cost Incurred to Date (2021) = $2,170,000Total Estimated Costs (incurred + yet to incur) = $2,170,000 + $4,170,000 = $6,340,000Percentage of Completion = $2,170,000 / $6,340,000 ≈ 34.24%Revenue Recognized = 34.24% of $8,510,000 ≈ $2,914,624Gross Profit = Revenue - Cost Incurred = $2,914,624 - $2,170,000 = $744,6242022:
Cost Incurred to Date (2021 + 2022) = $2,170,000 + $2,670,000 = $4,840,000Total Estimated Costs (updated) = $4,840,000 + $3,855,000 = $8,695,000Percentage of Completion = $4,840,000 / $8,695,000 ≈ 55.69%Revenue Recognized = 55.69% of $8,510,000 ≈ $4,739,319Revenue to be Recognized in 2022 = $4,739,319 - $2,914,624 ≈ $1,824,695Gross Profit = Revenue - Cost Incurred = $1,824,695 - $2,670,000 = -$845,305 (Gross Loss)2023:
Cost Incurred to Date (2021 + 2022 + 2023) = $4,840,000 + $3,970,000 = $8,810,000Total Estimated Costs (final) = $8,810,000Percentage of Completion = $8,810,000 / $8,810,000 = 100%Revenue Recognized = 100% of $8,510,000 = $8,510,000Revenue to be Recognized in 2023 = $8,510,000 - $4,739,319 ≈ $3,770,681Gross Profit = Revenue - Cost Incurred = $3,770,681 - $3,970,000 ≈ -$199,319 (Gross Loss)2. Journal Entries:
2021 Entries:
To record costs incurred:Construction in Progress $2,170,000Various Accounts $2,170,000To record billings:Accounts Receivable $2,670,000Billings on Construction Contract $2,670,000To record collections:Cash $2,420,000Accounts Receivable $2,420,000To recognize revenue and gross profit:Construction Expenses $2,170,000Construction in Progress $744,624Construction Revenue $2,914,6242022 Entries:
To record costs incurred:Construction in Progress $2,670,000Various Accounts $2,670,000To record billings:Accounts Receivable $2,920,000Billings on Construction Contract $2,920,000To record collections:Cash $2,645,000Accounts Receivable $2,645,000To recognize revenue and gross profit:Construction Expenses $2,670,000Construction in Progress -$845,305Construction Revenue $1,824,6953. Balance Sheet Presentation:
As of December 31, 2021:
Accounts Receivable: $250,000 ($2,670,000 - $2,420,000)Construction in Progress: $2,170,000 + $744,624 = $2,914,624Less: Billings on Construction Contract: ($2,670,000)Net: $244,624As of December 31, 2022:
Accounts Receivable: $525,000 ($2,670,000 + $2,920,000 - $2,420,000 - $2,645,000)Construction in Progress: $2,914,624 - $845,305 + $2,670,000 = $4,739,319Less: Billings on Construction Contract: ($2,670,000 + $2,920,000 = $5,590,000)Net: ($850,681)Suppose Susan is an avid reader and buys only comic books. Susan deposits $1,000 in a bank account that pays an annual nominal interest rate of 5%. Assume this interest rate is fixed—that is, it won't change over time. At the time of her deposit, a comic book is priced at $10.00. Initially, the purchasing power of Susan's $1,000 deposit is _________comic books.
Final answer:
The initial purchasing power of Susan's $1,000 deposit is the ability to purchase 100 comic books, since each comic book costs $10.00.
Explanation:
The question you've asked is about how to calculate the initial purchasing power of Susan's $1,000 deposit in a bank with a nominal interest rate of 5%. Since Susan only buys comic books priced at $10.00 each, the purchasing power of her deposit is simply the number of comic books she can buy with $1,000.
If one comic book costs $10.00, then Susan can buy $1,000 / $10.00 = 100 comic books. This calculation does not require considering the interest rate because it asks for the initial purchasing power, meaning how much Susan can buy at the time of her deposit before any interest accrues.
A firm's net working capital and all of its expenses vary directly with sales. The firm is operating currently at 96 percent of capacity. The firm wants no additional external financing of any kind.
1. Which one of the following statements related to the firm's pro forma statements for next year must be correct?
A. the firm cannot exceed its internal rate of growth.
B. The maximum rate of sales increase is 4 percent.C. The projected owners' equity will equal this year's ending equity balanceD. Total liabilities will remain constant at this year's value.E. Fixed assets must remain constant at the current level.
Answer:
A. the firm cannot exceed its internal rate of growth.
Explanation:
The internal growth rate is the highest level of growth that a business can achieve without any external financing. It is the level of business operations that the business can maintain on its own, and without issuing equity to gain funding.
The firm's working capital and expenses will vary directly with sales revenue.
This is a good measure of how start-ups can survive without outside funding.
Internal growth is used by businesses to maximise output from use of their processes. For example increasing efficiency of a companie's machinery to increase output.
A country's overall level of interest rates should have an impact on the financial account of the BOP. Relatively low real interest rates should normally stimulate an outflow of capital seeking higher interest rates in other country currencies.a.True.b. False.
Answer:True
Explanation:
A country over all level of interest rate should have impact on the financial account of balance of payment because the BOP is the sources and the use of foreign exchange.
Teenage Fanclub Printings sold annual subscriptions to their magazine for $30,000 in December 2017. The magazine is published monthly. The new subscribers received their first magazine in January 2018. 19. Show the adjusting entry should be made in January if the subscriptions were originally recorded as a liability? 0. What amount will be reported on the January 2018 balance sheet for Unearned Subscription Revenue?
Answer: Debit Unearned revenue (liability) $2,500, Credit Revenue $2,500.
Balance in unearned revenue as at 31 January 2018 is $30,000 - $2,500 = $27,500.
Explanation: In the answer above, it was assumed that the sale of the annual subscriptions took place at the end of December 2017. If it had taken place at the beginning of December 2017, the balance in the unearned revenue would reduce by 2 months.
The subscriptions were recorded as a liability because the total amount was not earned when the sale transaction took place. Unwinding of the unearned revenue to revenue takes place at the time the subscribers get their magazine.
Therefore, monthly unwinding of unearned revenue to revenue would be $30,000 / 12 = $2,500. The adjusting entries Teenage Fanclub Printings would have raised when the initial sale took place would be: Debit Account receivable / Cash $30,000, Credit Unearned revenue $30,000. Monthly unwinding of unearned revenue will therefore be Debit Unearned revenue $2,500 Credit Revenue $2,500 till the revenue is fully recognized and the unearned revenue becomes nil.
The adjusting entry should be
Unearned revenue (liability) $2,500
Revenue $2,500.
The Balance in unearned revenue should be $27,500
Adjusting entry & the balance in unearned revenue:The adjusting entry is
Unearned revenue (liability) $2,500 ($30,000 / 12 months)
Revenue $2,500
(being the adjusting entry is recorded)
here the liability is debited as it decreased while the revenue is credited as it increased.
Now the balance in the unearned revenue should be
= $30,000 - $2,500
= $27,500
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Dave's Duds reported cost of goods sold of $1,600,000 this year. The inventory account increased by $210,000 during the year to an ending balance of $455,000. What was the cost of merchandise that Dave's purchased during the year? Multiple Choice $1,810,000. $1,390,000. $1,145,000. $2,055,000.
Answer:
$1,810,000
Explanation:
Given that,
Cost of goods sold = $1,600,000
Inventory increases by = $210,000
Ending balance in inventory = $455,000
Opening Balance of Inventory:
= Ending balance in inventory - Inventory account increased Compare to Beginning
= $455,000 - $210,000
= $245,000
Cost of Inventory purchased:
= Cost of Goods Sold + Ending Balance of Inventory - Opening Balance of Inventory
= $1,600,000 + $455,000 - $245,000
= $1,810,000
Hazardous Materials (HazMat) are regulated by several different government agencies. The five main federal agencies involved in HazMat regulation are the Pipeline and Hazardous Materials Safety Administration (PHMSA), Occupational Health and Safety Administration (OSHA), Nuclear Regulatory Commission (NRC), Environmental Protection Agency (EPA), and ___________.
Answer:
Department of transportation (DOT)
Explanation:
HazMat(hazardous materials) are hazardous substances in quantities that may pose a high risk to health, property, and the environment. HAZMATs include substances such as as toxic chemicals, fuels, nuclear waste products, and biological, chemical, and radiological agents.
HazMat is a substance that may pose serious threat to property, life or the environment if such substances are not well stored, shipped or handled.
On April 1, Moloney Meat Distributors sold merchandise on account to Fronke’s Franks for $1,600 on Invoice 1001, terms 3/10, n/30. Payment was received in full from Fronke’s Franks, less discount, on April 10. Required: Record the transactions on April 1 and April 10.
Answer:
April 1
Dr. Account receivable $1,600
Cr. Sales $1,600
April 10
Dr. Cash $1,552
Dr. Sales Discount $48
Cr. Account receivable $1,600
Explanation:
Term 3/10, n/30 means there is a discount of 3% is available on payment of due amount within discount period of 10 days after sale and net credit period of 30 days.
According to given data
Sales = $1,600
As the payment is made within discount period, so discount will be availed
Discount = $1,600 x 3% = $48
Payment = $1,600 - $48 = $1,552
Discount of $48 is an expense.
Members of a general partnership have a _______________ relationship to each other; that is, each owes the other due care in actions associated with the partnership.
Answer:
Fiduciary.
Explanation:
A fiduciary is known as a person or organization that acts on behalf of another person or persons to manage assets. Essentially, a fiduciary owes to that other entity the duties of good faith and trust. The highest legal duty of one party to another, being a fiduciary requires being bound ethically to act in the other's best interests.
A fiduciary might also be responsible for general well-being, but often the task involves finances, managing the assets of another person, or of a group of people, for example. Money managers, financial advisors, bankers, accountants, executors, board members, and corporate officers all have fiduciary responsibility.
Which of the following is an element of related and supporting industries? media exposure of products existence of supplier clusters sophistication of consumers intensity of competition aggregation of markets
Answer:
Existence of supplier clusters
Explanation:
Clusters increase productivity. This is because clusters include companies in the same industry or technology areas that share suppliers and distribution network. Meaning that companies withing their sphere can compete.
Several clusters serve as a driving force in regional economies. This clustering concept was popularized by Micheal Porter. A strong cluster can include the suppliers of raw materials and distributors and also primary producers, specialized services in finance, marketing, education, trade associations etc. Clusters can result in a lot of benefits such as increased productivity, rapid innovation and new business formation.
Assume that the Assembly Department allocates overhead using a plantwide overhead rate based on machine hours. How much total overhead will be assigned to a product that requires 1 direct labor hour and 2.5 machine hours in the Assembly Department, and 3.5 direct labor hours and 0.5 machine hours in the Finishing Department?
Answer:
Instructions are listed below.
Explanation:
Giving the following information:
Assume that the Assembly Department allocates overhead using a plantwide overhead rate based on machine hours.
The first thing that we need is the predetermined overhead rate. We weren't provided with this information, but I will give the formula and a small example to guide an answer:
To calculate the estimated manufacturing overhead rate we need to use the following formula:
Estimated manufacturing overhead rate= total estimated overhead costs for the period/ total amount of allocation base
For example:
Estimated overhead= $200,000
Estimated machine hours= 35,000
Estimated manufacturing overhead rate= 200,000/35,000= $5.71 per machine hour
Now, we can allocate overhead:
Allocated MOH= Estimated manufacturing overhead rate* Actual amount of allocation base
Because it is a plantwide overhead rate, we need to sum the total machine hours required:
Machine hours= 2.5 + 0.5= 3 machine hours
Allocated MOH= 5.71*3= $17.13 per unit
Final answer:
To calculate the total overhead assigned to the product, the overhead rates for the Assembly and Finishing Departments are determined based on their respective allocation bases. These rates are then applied to the product's usage of machine hours and labor hours, resulting in a total overhead of $13.985.
Explanation:
To calculate the total overhead assigned to the product, we need to determine the overhead rates for both the Assembly and Finishing Departments and then apply these rates to the product's resource usage.
The Assembly Department allocates overhead based on machine hours (MH), while the Finishing Department allocates based on direct labor hours (DLH).
First, we calculate the overhead rates:
Assembly Department overhead rate = Overhead costs / Machine hours = $330,000 / 300,000 MH = $1.10 per MHFinishing Department overhead rate = Overhead costs / Direct labor hours = $450,000 / 140,000 DLH = $3.21 per DLHNext, we apply these rates to the product's use of department resources:
Assembly Department overhead for the product = 2.5 MH x $1.10 per MH = $2.75Finishing Department overhead for the product = 3.5 DLH x $3.21 per DLH = $11.235The total overhead assigned to the product is the sum of the overheads from both departments.
Therefore, Total Overhead = Assembly Overhead + Finishing Overhead = $2.75 + $11.235 = $13.985.
The managerial accountant at XYZ Company told her friend that the company expects to announce a major recall in a few weeks. The friend promptly sells all her stock in XYZ. The accountant violated which IMA Statement of Ethical Professional Practice standards?
Answer: The managerial accountant at XYZ Company told her friend that the company expects to announce a major recall in a few weeks. The friend promptly sells all her stock in XYZ. The accountant violated IMA statement of ethical professional practice standards of Competence.
Explanation:
The IMA statement of ethical professional practice standards of Competence states that each member has the responsibility to provide information that supports the decision and recommend something accurate, clear and timely.
The managerial accountant at XYZ company provided information that was not very accurate. Based on that information, his friend immediately sells his stock in XYZ company. So, in this case, the manager has not helped his friend in taking a viable decision.
Mildred has two children, Aaron and Irving, who are qualifying persons for the Child and Dependent Care Credit. Aaron has $4,000 in dependent care expenses, and Irving has none. All other tests are met. Mildred's credit is based on __________ of expenses. A) $2,000 B)$3,000 C)$4,000 D)$6,000
Answer:
$4,000
Explanation: the Child and Dependent Care Credit will be paid based on the $4,000 expenses incurred for Aaron.
Jefferson's recently paid an annual dividend of $1.31 per share. The dividend is expected to decrease by 4% each year. How much should you pay for this stock today if your required return is 16%?
Answer:
$6.29
Explanation:
Dividend is $1.31 per share
Decreased by 4%
Required return is 16%
Therefore:
Price = [$1.31 × (1 - .04)]/[.16 - (-.04)] = $6.29
Answer:
I should pay $10.92 per share for the stock today as shown below
Explanation:
The maximum price a rational investor could pay for a share is given by the formula:
Po=Div/rate of return-growth rate
Po is the price to paid
Rate of return here is 16%,which is similar to return on equity
The growth rate of the share of the dividend is 4%
Po=$1.31/(0.16-0.04)
Po =$10.92
The price has factored in both the dividend yield and gains yield of the share.
dividend yield is the return earned by share through dividends
gains yield is another return earned by share through appreciation in its price in the market place-stock exchange
Total return on return on share is the sum of both.
A good that has a lot of substitutes, that is a luxury and is relatively inexpensive will most likely have a price elasticity of demand that is a. a little higher than 1 b. closer to 10 c. a little lower than 1 d. exactly 1
Answer:
The answer is A.
Explanation:
The price elasticity of demand is a little higher than 1.
This means it is price elastic. That is, the demand is sensitive to price. Why? -
1. The good has a lot of substitutes, meaning the bargaining power of buyers is high. Any increase in the price of the good will lead to customers switching to the substitutes.
2. Also, the good is also a luxury good and not a necessity. Luxury goods, unlike necessity goods are not essential. So an increase in price might see customers moving away.
If a demand is inelastic to price, price elasticity of demand will be less than one.
Under a job order cost system, costs are accumulated for: Multiple Choice Each individual unit produced. Each job supervisor. Each batch of production, known as a job or lot. Each department in the production cycle.
Answer:
The correct answer is letter "C": Each batch of production, known as a job or lot.
Explanation:
Job order cost systems are used to accumulate the cost per unit of items that are different enough, each one having significant costs. Under this costing system each item produced is given its direct material costs, labor costs, and overhead. Clothing, food, and aircraft manufacturing companies use the job order cost system.
Unitary costs are accumulated per batch of productions under this type of costing system.
Final answer:
Costs in a job order cost system are accumulated for each job or lot, with total costs determined by the sum of all inputs multiplied by their factor payments. This system is suitable for tracking production costs of distinctive batches. Understanding economies of scale and the difference between fixed and variable costs is crucial in this context.
Explanation:
Under a job order cost system, costs are accumulated for each batch of production, known as a job or lot. This method is used to track the costs associated with producing a specific batch of products, rather than unit-by-unit or for entire departments. Each job may consist of a single item or a small batch of items, designed to be distinct from other jobs by its particular set of production requirements.
For every input, such as labor or materials, there's an associated factor payment, like wages or material costs. The total cost for producing a job is the sum of the amounts of each input required to produce that quantity of output multiplied by the respective factor payments.
In this context, understanding economies of scale is also necessary. As the quantity of output increases, the cost per unit typically goes down, which means larger production scales can be more cost-efficient.
When assessing costs, it's important to recognize the distinction between fixed costs, which are independent of output levels, and variable costs, which vary based on the production quantity.
Given the following financial statements for GM, the return on assets is ______ percent? (Write your answer as a percentage, rounding to the nearest 100ths place value—e.g., 5.25. Omit the percent sign in your answer.)
Final answer:
The return on assets can be calculated by dividing the net income by the average total assets and expressing it as a percentage.
Explanation:
The return on assets can be calculated by dividing the net income by the average total assets and expressing it as a percentage.
Return on Assets (ROA) = Net Income / Average Total Assets
For General Motors (GM), to calculate the return on assets, you would need the net income and average total assets data from their financial statements.
At December 31, John Photography Supplies estimated that approximately 5 % of merchandise sold will be returned. Sales Revenue for the year was $ 90 comma 000 with a cost of $ 58 comma 000 . Journalize the adjusting entries needed to account for the estimated returns.
Answer:
Date Description Debit Credit
31st Dec Sales Revenue $4,500
Refunds Payable $4,500
31st Dec Inventory Estimated Returns $2,900
Cost of Goods Sold $2,900
Explanation:
First, the obvious facts about the question
Estate of returned merchandise = 5%
Sales revenue for the year = $90,000
Cost of goods sold = $59,000
Step 1: Sales Revenue is already $90,000 Credit entry (it is an income) and as such any return will have a debit entry to reduce the revenue as follows
Return = 0.05 x $90,000 = $4,500
This same refunds will also go into the refunds payable account as a current liability (credit entry)
Step 2: The returns will also affect the inventory and cost of sales as follows
0.05 x $58,000 = $2,900
This will increase the inventory 9debit side and reduce cost of sales credit side.
Journal Entries
Date Description Debit Credit
31st Dec Sales Revenue $4,500
Refunds Payable $4,500
31st Dec Inventory Estimated Returns $2,900
Cost of Goods Sold $2,900
The entry in the Journal to account for estimated returns from sales of merchandise will require adjustments of Sales Returns and Allowances and the Cost of Goods Sold. This is done by estimating 5% of the sales and 5% of the COGS which result to $4,500 and $2,550 respectively.
Explanation:At the end of the year, John Photography Supplies estimated that 5% of the $90,000 worth of sold merchandise will be returned. This implies that the return is expected to be $4,500 (5% of $90,000). The Cost of Goods Sold (COGS) is $58,000 for the year. When accounting for the estimated returns, we would have two adjusting entries:
Sales Returns and Allowances: Debit $4,500, and Credit Sales Revenue: $4,500Inventory: Debit $2,550 (5% of COGS), and Credit COGS: $2,550This adjust the sales revenue and the COGS downwards, thereby estimating the impact of the goods that are expected to be returned.
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Peter Company has gross property, plant and equipment totaling $1.5 million, depreciation expense this year of $250,000, and accumulated depreciation last year of $550,000. What is Peter's net property, plant and equipment?
Answer:
Peter's net property, plant and equipment is $700,000.
Explanation:
Net Property, plant, and equipment is the Carrying value of PPE. It is also known as the Book value of PPE. This is the value at which PPE is stated on the face of Statement of Financial Position.
The formula to calculate it as follows:
Cost - Accumulated Depreciation = Carrying Value
Simply put values:
1,500,000 - (250,000 + 550,000) = $700,000.
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Vistakon, the maker of Acuvue brand contact lenses, is working on a new product launch. They are best known for their Acuvue 2 contact lenses, but are planning to launch Acuvue 3, which will provide 40% more moisture than Acuvue 2. The extra moisture will make the lenses more comfortable and cause less irritation. Vistakon has been in the new product planning process for a year. Currently, they are trying to determine the cannibalization rate of Acuvue 3. They believe that 30% of Acuvue 3 sales will come from Acuvue 2. Which stage of the new product planning process are they in?
a. Business Analysis
b. Concept Testing
c. Sales Strategy
d. Feasibility Screen
e. New Product Strategy
Answer:
a. Business Analysis
Explanation:
Business analysis is the fourth stage a business undertakes when they are developing a product. It is at this stage that financial projections are made to see how feasible the product will be in the market. Marketing strategies are developed to effectively drive sales of the new product.
In this stage there is definition of the different requirements that needs to be met to achieve business goals and objectives.
Vistakon, the maker of Acuvue brand contact lenses, is working on a new product launch of Acuvue 3, which will provide 40% more moisture than Acuvue 2. They are projecting that 30% of Acuvue 3 sales will come from Acuvue 2.
Answer:
a. Business Analysis
Explanation:
Business analysis is a step in the different steps of a new product development process where the business attractiveness of the product is evaluated. This involves reviewing the sales, costs and profit projections for the new product.
Vistakon is trying trying to determine the cannibalization rate of Acuvue 3, this means they are trying to determine the percentage of acuvue 3's sales that represents a loss of sales of Acuvue. This therefore indicates they are reviewing the sales projections of Acuvue 3, which is a process of Business analysis.