Answer:
The excess of par increase as a result of this transaction of $860000
Explanation:
The excess of Lewelling's paid-in capital over par value can be computed by first of all ascertaining the fees charged by the law firm, which is then compared with the value of shares given in lieu.
Excess of paid-in capital=law firm fees-par value of firm
Law firm fees=4000*$240
=$960000
The par value of shares=100000*$1
=$100000
Excess of paid-in capital=$960000-$100000
=$860000
The journal entry to record the transaction is shown below:
Dr Professional fees $960000
Cr Treasury stock $100000
Cr Additional paid-in capital $860000
Under IFRS, the credit would $100000 share capital and $860000 in share premium account
The excess of par increase as a result of this transaction of $860000.
Calculation of the excess amount:Since
we know that
Excess of paid-in capital = law firm fees - par value of firm
Here,
Law firm fees = 4000*$240
=$960000
And,
The par value of shares = 100000 * $1
= $100000
So,
Excess of paid-in capital = $960000 - $100000
= $860000
hence, The excess of par increase as a result of this transaction of $860000.
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Metropolitan Water Utility is planning to upgrade its SCADA system for controlling well pumps,booster pumps, and disinfection equipment so that everything can be controlled from one site. Thefirst phase will reduce labor and travel costs by an estimated $31,000 per year. The second phase will reduce costs by an estimated $20,000 per year. If phase I will occur in years 1 through 3 and phase II in years 4 through 8,
what is
(a) the present worth of the savings, and
(b) the equivalent annual worth for years 1 through 8 of the savings? Use an interest rate of 8% per year.
Answer:
net wortht -143,280.85
equivalent annual cost $ 24,932.98
Explanation:
We sovle for the present value of each annuity:
The first three years:
[tex]C \times \frac{1-(1+r)^{-time} }{rate} = PV\\[/tex]
C 31,000.00
time 3
rate 0.08
[tex]31000 \times \frac{1-(1+0.08)^{-3} }{0.08} = PV\\[/tex]
PV $79,890.0066
Then the second phase annuity:
[tex]C \times \frac{1-(1+r)^{-time} }{rate} = PV\\[/tex]
C 20,000.00
time 5
rate 0.08
[tex]20000 \times \frac{1-(1+0.08)^{-5} }{0.08} = PV\\[/tex]
PV $79,854.2007
NOw, we discount this as it is three years into the future
[tex]\frac{Maturity}{(1 + rate)^{time} } = PV[/tex]
Maturity $79,854.2007
time 3.00
rate 0.08000
[tex]\frac{79854.2007415617}{(1 + 0.08)^{3} } = PV[/tex]
PV 63,390.8391
Total net worth:
79,890.0066 - 63,390.8391 = -143,280.85
The EAC will be the annuity which makes the Present work
[tex]PV \div \frac{1-(1+r)^{-time} }{rate} = C\\[/tex]
PV 143,280.85
rate 0.08
time 8
[tex]143280.85 \div \frac{1-(1+0.08)^{-8} }{0.08} = C\\[/tex]
C $ 24,932.983
At the beginning of the year, Saratoga Dress Co. had an inventory of $300,000. During the year, the company purchased merchandise costing $850,000. Net sales for the year totaled $1,200,000, and the gross profit rate was 45%. The cost of goods sold and the ending inventory, respectively, were:
Answer:
The cost of goods sold and the ending inventory, respectively, were: $660,000 and $490,000
Explanation:
Saratoga Dress Co. had gross profit rate of 45%
Gross profit rate = (Gross Profit/ Sales)x 100%
Gross Profit = (Gross profit rate x Sales)/100% = (45% x $1,200,000)/100% = $540,000
Cost of Goods Sold = Sales - Gross Profit = $1,200,000 - $540,000 = $660,000
The ending inventory = the beginning inventory + purchasing merchandise - Cost of Goods Sold = $300,000 + $850,000 - $660,000 = $490,000
If the fictitious country of Islandia puts all of its production resources into fish, it can produce 60 units of fish. If it puts all of its production resources into coconuts, it can produce 30 units of coconuts. If the fictitious country of Mountania puts all of its production resources into fish, it can produce 15 units of fish. If it puts all of its production resources into coconuts, it can produce 45 units of coconuts. Assume that both countries have constant cost functions for both products. nstructions: Round your answers to 2 decimal places. a. What is the opportunity cost of producing 1 unit of fish in Islandia? unit(s) of coconuts b. What is the opportunity cost of producing 1 unit of coconuts in Islandia? unit(s) of fisih c. What is the opportunity cost of producing 1 unit of fish in Mountania? unit(s) of coconuts d. What is the opportunity cost of producing 1 unit of coconuts in Mountania? unitis) of fish e. (Click to select)has a comparative advantage in the production of fish. ck to select) has a comparative advantage in the production of coconuts. f. What will be the terms of trade for fish? Betweena andunits) of coconuts . What will be the terms of trade for coconuts? and?
Answer a:
The opportunity cost of producing 1 unit of fish in Islandia:
Given Data: It can produce 60 units of fish or 30 units of coconuts
Opportunity cost of producing 1 unit of fish 30 coconuts/60 fish Opportunity cost of producing 1 unit of fish = 0.5 unit of coconuts.Thus,1 unit of fish has an opportunity cost of 0.5 units of coconuts.
Answer b :
The opportunity cost of producing 1 unit of coconuts:
Given Data: It can produce 60 units of fish or 30 units of coconuts
Opportunity cost = 60 fish/30 coconut Opportunity cost= 2 unit of fish.Thus,1 unit of coconut has an opportunity cost of 2 unit of coconut.
Answer c:
The opportunity cost of producing 1 unit of fish in Mountania:
Given Data:it can produce 15 units of fish or 45 units of coconuts.
Opportunity cost =45 coconuts/15 fishOpportunity cost = 3 units of coconutThus,1 unit of fish has an opportunity cost of 2 unit of fish.
Answer d;
The opportunity cost of producing 1 unit of coconuts in Mountania:
Given Data: it can produce 15 units of fish or 45 units of coconuts.
Opportunity cost =15 fish/45 coconut Opportunity cost= 0.33 unit of fishThus,1 unit of coconut has an opportunity cost of 0.33 unit of coconut.
Answer e:
The comparative advantage in the production of fish whereas the production of coconuts.
Islandia produces 60 units of fish or 30 units of coconuts and Mountania produces 15 units of fish or 45 units of coconuts.Thus,the Islandia has a comparative advantage in fish production because it can produce 45 more fish given same resources
Answer f:
Part 1 :
The terms of trade for fish :
Multiply the Opportunity Cost of Fish in Mountania (3 coconuts) by the Opportunity Cost of Fish in Icelandia (0.5 Coconuts) to get 1.5 units of coconut as a replacement standard. With 1.5 units of coconut per fish, both countries will be happy because they will be more than the benefits that Icelandia would have received and less than the costs that Mountainia would have incurred.
Part 2:
The terms of trade for coconuts:
By multiplying the Opportunity Cost of Islandia's Coconut (2) by the Opportunity Cost of Mountainia's Coconut (0.33 Coconut), you can derive 0.66 units of fish as the basis for the exchange. Both countries will be satisfied with 0.66 units of fish per coconut, which is lower than the cost that Icelandia will bear and higher than the profit that Mountainia will receive.Learn more :
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Your company expects to receive 5,000,000 Japanese yen 60 days from now. You decide to hedge your position by selling Japanese yen forward. The current spot rate of the yen is $.0089, while the forward rate is $.0095. You expect the spot rate in 60 days to be $.0090. How many dollars will you receive for the 5,000,000 yen 60 days from now if you sell yen forward
Answer:
$ 47,500
Explanation:
The 60 day Forward rate is USD 0.0095 per JPY
5,000,000 JPY x 0.0095USD = 47,500 USD
The company would receive $ 47,500 at the maturity date.
Answer:
$47,500
Explanation:
A hedge is an investment position that is a strategic technique of employing financial instruments (such as a forward contract) or market techniques to offset or guide against all possible losses or gains that may result from a particular investment.
Since the position is hedged by selling Japanese yen forward, the relevant rate to use to calculate the number of dollars to receive for the 5,000,000 yen 60 days from now is the forward rate of $.0095. We therefore have:
The dollar amount to receive = 5,000,000 Japanese yen × $0.0095 forward rate = $47,500
Therefore, $47,500 will be received for the 5,000,000 yen 60 days from now if the company sells yen forward.
Sometimes word of mouth and expert recommendations cause a product to become more popular. However, the firm that produces this product may find it difficult to get parts to increase production, and it might have to pay higher prices to receive an adequate supply of parts. In this case, what will happen to the future price of the product?
Answer:
Invariably, the cost of the product will rise. A relatively increase in supply parts directly influences the price of a product.
Answer:
B. The equilibrium price should rise as the supply curve shifts to the left and the demand curve shifts to the right.
Explanation:
nternational trade generally results in ____ exposure to international political risk and ____ exposure to international economic conditions, when compared to other methods of international business.
International trade generally results in Lower exposure to international political risk and Lower exposure to international economic conditions, when compared to other methods of international business.
Explanation:
The term International trade refers to the exchange of capital, goods, and services across international boundaries /territories.
The international Trade represents a significant share of gross domestic product (GDP) of a country
Below mentioned are few Advantages of International Trade
It helps in increasing the revenues oof a nationSince the international market has a big size so the competition gets DecreasedIn international trade the countries benefit from from currency exchange. .International market serve as a disposal ground for the Disposal of surplus goods.Ballard Company uses the perpetual inventory system. The company purchased $9,700 of merchandise from Andes Company under the terms 3/10, net/30. Ballard paid for the merchandise within 10 days and also paid $420 freight to obtain the goods under terms FOB shipping point. All of the merchandise purchased was sold for $18,400 cash. The amount of gross margin for this merchandise is:a. $8,280. b. $9,700. c. $8,571.d. $8,700.
Answer:
c. $ 8,571
Explanation:
Computation of gross margin
Purchase cost $ 9,700
Less: Discount availed 3 % $ ( 291)
Net purchases $ 9,409
Add: Freight $ 420
Total cost of merchandise $ 9,829
Sales value $ 18,400
Gross margin on merchandise sales $ 8,571
Kimberley, a manager at a large company, tends to assign group members to particular tasks, expects workers to maintain definite standards of performance, and emphasizes the meeting of deadlines. In the light of the Ohio State Studies, this indicates that Kimberley, as a leader, is ________.
Answer:
Kimberly, as a leader, is HIGH IN INITIATING STRUCTURE.
Explanation:
Consideration and initiating structures are two dimensions of leader behavior identified in 1945 as a result of the Ohio State Leadership Studies.
According to this studies:
Consideration (people-oriented) is the extent to which a leader exhibits concern for the welfare of the members of the group.
Initiating structure is the extent to which a leader defines leader and group member roles, initiates actions, organizes group activities and defines how tasks are to be accomplished by the group. This leadership style is task-oriented.
Since Kimberly tends to assign group members to particular tasks, expects workers to maintain definite standards of performance, and emphasizes the meeting of deadlines, this means that she is TASK-ORIENTED.
Therefore, In the light of the Ohio State Studies, this indicates that Kimberley, as a leader, is HIGH IN INITIATING STRUCTURE.
Provide a real-world organization that is an example of each level of risk tolerance. Include the company name and industry for each. Include an explanation of whether the company is risk-averse, risk-neutral, or risk-seeking.
Final answer:
Companies exhibit varying levels of risk tolerance: Insurance Companies like State Farm are risk-averse, preferring certain outcomes; Finance Companies such as J.P. Morgan demonstrate risk neutrality, focusing on expected values; and Technology Start-Ups like SpaceX are risk-seeking, embracing high-risk opportunities for potential high rewards.
Explanation:
Identifying organizations based on their level of risk tolerance provides clear examples of how companies employ different strategies in the face of uncertainty. Businesses can generally be categorized as risk-averse, risk-neutral, or risk-seeking based on their approach to risk and decision-making.
Risk-Averse: Insurance Companies, such as State Farm in the insurance industry, exhibit risk aversion by preferentially offering guaranteed outcomes over gambles with similar expected values. Their strategy revolves around minimizing risks through diversification and careful risk assessment.Risk-Neutral: Many Finance Companies, for example, J.P. Morgan Chase & Co., operate with a risk-neutral perspective, focusing purely on the expected value of investments and decisions rather than showing a preference for or against risk.Risk-Seeking: Technology Start-Ups, such as SpaceX, often display a risk-seeking behavior, embracing high-risk, high-reward projects and innovations with the potential for substantial market disruption and growth.Each of these companies illustrates a distinct approach to handling risk, influenced by industry standards, market conditions, and corporate philosophy, impacting their operations, strategies, and investment decisions.
2. You want to form a portfolio of stock A and stock B. Stock A has a beta of .85 and stock B has a beta of 1.6. If you invest $6,000 in stock A and $4,000 in stock B, what is the portfolio beta
Answer:
Given: Investment in Stock A = $6000 and in Stock B = $4000
Particulars weights beta
Stock A 60 percent 0.85
Stock B 40 percent 1.6
The following is the calculation of the portfolio beta
Portfolio Beta = (0.6 multiply with 0.85) + (0.4 multiply with 1.6)
Solving the equation:
= 0.51 + 0.64
Thus, after solving we get, 1.15
Thus, the portfolio beta = 1.15
Based on the portfolio beta being a weighted average of individual betas, the portfolio beta here is 1.15.
As mentioned, the portfolio beta is a weighted average of the betas of the individual stocks.
It is therefore calculated as:
= (Weight of stock A x Beta of stock A) + (Weight of stock B x Beta of stock B)
Solving gives:
= ( 6,000 / (6,000 + 4,000) x 0.85) + (4,000 / (6,000 + 4,000) x 1.6)
= 0.51 + 0.64
= 1.15
In conclusion, the portfolio beta is 1.15.
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The following information is available for a company's utility cost for operating its machines over the last four months.
Month Machine hours Utility cost
January 1,020 $6,570
February 1,920 $7,140
March 2,640 $8,100
April 720 $4,500
Using the high-low method, the estimated variable cost per machine hour for utilities is:_______
Answer:
Using the high-low method, the estimated variable cost per machine hour for utilities is $1.875/ machine hour
Explanation:
High Low Method is a method used to separate Fixed and Variable Costs Components of a semi-variable cost/overhead.
Step 1 : Establish 2 points - The Highest and The Lowest
High - March 2,640 hrs : $8,100
Low - April 720 hrs : $ 4,500
Step 2 Calculate the variable Cost Component
Variable Costs = Overhead Cost difference /Activity difference
= ($8,100-$4,500)/(2,640hrs-720hrs)
= $3,600/1,920hrs
= $1.875/hr
A movie theater substantially decreases the price of its soda during the same week that a heavily advertised new movie is being released to theaters. Assuming consumers like to enjoy movies, soda, and popcorn together, how does this impact the equilibrium price and quantity of popcorn?
Final answer:
When a movie theater decreases the price of soda during the release of a heavily advertised movie, it may lead to an increase in the equilibrium price and quantity of popcorn.
Explanation:
When a movie theatre decreases the price of its soda during the same week that a heavily advertised new movie is being released, it impacts the equilibrium price and quantity of popcorn in the following way:
The decrease in the soda price may lead more people to buy the soda, which in turn may increase the demand for popcorn as people like to enjoy movies, soda, and popcorn together.This increase in demand for popcorn may result in an increase in the equilibrium price of popcorn due to a higher demand for it.The increase in demand for popcorn will also lead to an increase in the equilibrium quantity of popcorn as more people want to buy it.Piechocki Corporation manufactures and sells a single product. The company uses units as the measure of activity in its budgets and performance reports. During May, the company budgeted for 7,300 units, but its actual level of activity was 7,250 units. The company has provided the following data concerning the formulas used in its budgeting and its actual results for May: Data used in budgeting: The direct labor in the planning budget for May would be closest to:
Answer:
The variance of the direct labour in the planning budget of May is $330 Favorable.
Explanation:
As the data is not given in the question, the data is found online and is attached herewith.
Actual output = 7250 units
Actual cost of direct labor= $48,970
Standard direct labor cost per unit = $6.80
Standard direct labor cost for actual output = Actual output * standard direct materials cost per unit = 7250 units * $6.80 = $49300
Direct Labour Cost variance = Standard cost - Actual cost = $49300 - $48970= $330 F
As the actual cost is less than standard cost, the variance is favorable.
So, the answer is $330 Favorable.
You are the general manager of a full-service FBO. Your company sells a customer a new aircraft, with a bank financing the purchase via a written security agreement on the aircraft, filed with the FAA Aircraft Registry and the International Registry. Later, the customer has your shop install an expensive upgraded avionics suite including the latest "glass cockpit" multifunction displays (MFD) integrating flight, navigation, engine and sensor data.
Does your shop have the right to require the aircraft owner to pay the bill for this upgrade in full before you return the aircraft? Explain.
If, when your shop has completed the upgrade but before the customer has paid the bill and while the FBO still has possession of the aircraft, the aircraft owner files for bankruptcy, who will be paid first from the proceeds of the bankruptcy sale of the aircraft: the FBO or the bank? Explain.
Instead, in initial discussions over the price of the upgrade, the customer indicated that she wanted to buy the avionics package from the FBO and have your shop install it, but she wanted to pay the price of the equipment and installation in three equal monthly payments, instead of one lump sum. She has been a good customer, and the proposal is acceptable to you. How can you release the aircraft to her upon completion of the work while protecting the FBO’s security interest in the aircraft to assure payment?
After completing the transaction described in 3, above, your shop installs the avionics package and returns the aircraft to its owner. Before paying the bill, she files for bankruptcy. Now who will be paid first from the proceeds of the bankruptcy sale of the aircraft: the FBO or the bank? Explain.
Answer:
Answer explained below
Explanation:
1) Yes, as the initial consideration was only for the aircraft. Since this upgrade is additional work performed by the company, the client should be billed.
2) As the consideration for the aircraft is yet to be paid and FBO is still in possession of the aircraft, the ownership has not passed into the hands of the customer yet. Thus, even though he may file for bankruptcy, it doesn't impact anything.
3) A written agreement should be entered into with the customer and the bank which states that the disbursements from the bank should be made in 3 equal monthly instalments to the FBO, post release of the aircraft to the customer. Any delay in these will be construed as default by the bank with the necessary legal implications involved for claiming the requisite amount by the FBO from the bank.
4) In this case, the ownership of the aircraft has passed to the customer prior to it defaulting. Thus, the bank will be paid first from the proceeds of the bankruptcy sale of the aircraft.
Consider two gas stations. One is located at a major intersection used by people commuting from populous neighborhoods to jobs located in the downtown area. The other is located on the outskirts of the city. Both gas stations sell high-grade or premium-grade gas for a higher price than low-grade or regular-grade gas. However, the gas station along the more congested route charges higher gas prices for all grades than the station on the outskirts of town.Product differentiation within and among these gas stations is based on which of the following?a. Styleb. Locationc. Quality
Answer:
Consider two gas stations. One is located at a major intersection used by people commuting from populous neighborhoods to jobs located in the downtown area. The other is located on the outskirts of the city. Both gas stations sell high-grade or premium-grade gas for a higher price than low-grade or regular-grade gas. However, the gas station along the more congested route charges higher gas prices for all grades than the station on the outskirts of town.
Product differentiation within and among these gas stations is based on which of the following Location and Quality.
Explanation:
Location is certainly one of the criteria, this is due to the reason that there is a difference in the price being charged for the same quality of the product.
Quality is also another factor, the reason being that there are two different grades of gasoline. The price of one of them was raised high while the price for the other one was brought low.
Thus, product differentiation within and among these gas stations is based on Location and Quality.
A buyer values a house at $525,000 and a seller values the same house at $485,000. If sales tax is 8% and is levied on the seller, then what would be the lowest price that the seller would be willing to sell at?
Answer:
$523,800
Explanation:
Given parameters:
Cost price by buyer = $525000
Selling price by seller = $485000
Sales tax = 8%
Unknown:
The lowest selling price by the seller = ?
Solution:
To solve this business problem, we must understand that the price the seller would be will to part with will be his selling price and the percentage of sales tax incurred in the procurement.
This will be the minimum and least profitable estimated amount the seller is willing to sell at.
Lowest selling price = selling price by seller + amount of sales tax incurred
Sales tax amount = selling price x sales tax percentage
= $485000 x [tex]\frac{8}{100}[/tex]
= $38800
Lowest selling price = $485000 + $38800 = $523,800
Given a value of $485,000 for the house and a sales tax rate of 8%, the seller pays $38,800 in sales tax. Adding this to the initial value, the lowest sale price for the seller would be $523,800.
Explanation:In this problem, we are calculating the minimum selling price a seller would accept for a house, given a specific sales tax rate. The seller values the house at $485,000, but the 8% sales tax is deducted from this amount - so we need to determine how much exactly the sales tax is, and add it to the seller price.
The formula to calculate the sales tax is: 'Value of the house' x (sales tax rate / 100). Substituting the given values, the seller needs to pay $485,000 * (8 / 100) = $38,800 as sales tax. Adding this tax amount to the seller's value of the house, the lowest price the seller would be willing to sell at would be $485,000 + $38,800 = $523,800.
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"Your sister just deposited $11,500 into an investment account. She believes that she will earn an annual return of 10 percent for the next 7 years. You believe that you will only be able to earn an annual return of 9.2 percent over the same period. How much more must you deposit today in order to have the same amount as your sister in 7 years?"
Answer:
I must deposit $12,103 today in order to have the same amount as your sister in 7 years.
Explanation:
Future value is the sum of principal amount and compounded interest amount invested on a specific rate for a specific period of time.
Use following formula to calculate the future value of invested amount
FV = PV x ( 1+ r )^n
Invested by my sister
FV = $11,500 x ( 1 + 10% )^7
Invested by me
FV = PV x ( 1 + 9.2% )^7
According to given condition
FV of my investment = FV of my sister's investment
PV x ( 1 + 9.2% )^7 = $11,500 x ( 1 + 10% )^7
PV x ( 1.092 )^7 = $11,500 x ( 1.10 )^7
PV x 1.85165 = $11,500 x 1.9487
PV x 1.85165 = $22410.05
PV = $22410.05 / 1.85165
PV = $12,102.75 = $12,103
Brief Exercise 5-9 Included in Sunland Company’s December 31, 2017, trial balance are the following accounts: Accounts Payable $244,000, Pension Liability $383,400, Discount on Bonds Payable $33,800, Unearned Rent Revenue $46,300, Bonds Payable $409,300, Salaries and Wages Payable $31,700, Interest Payable $14,810, and Income Taxes Payable $35,300. Prepare the long-term liabilities section of the balance sheet.
Explanation:
The preparation of the long-term liabilities section of the balance sheet is presented below:
Sunland Company’s
December 31, 2017
Long-term liabilities section
Long term liabilities
Bond payable $409,300
Less: Discount on Bonds Payable -$33,800 $375,500
Pension Liability $383,400
Total long term liabilities $758,900
Whistle Works manufacturers safety whistle keychains. They have the following information available to prepare their master budget: Operating Expenses Variable Operating Costs $.75 per unit sold Fixed Operating Costs $475,000 Other Info: Units produced in 2016 42,000 Units sold in 2016 40,500 Whistle Works sells each whistle for $12. It's been determined that each unit costs $7.25 to manufacture. How much is total budgeted operating expenses for the year ended 2016?
Answer:
Budgeted Operating expense= $505,375
Explanation:
Giving the following information:
Operating Expenses Variable Operating Costs $.75 per unit sold
Fixed Operating Costs $475,000
Other Info: Units sold in 2016 40,500
To determine the budgeted operating expense, we need to use the following formula:
Operating expense= total fixed operating expense + total variable operating expense
Operating expense= 475,000 + 0.75*40,500= $505,375
The total budgeted operating expenses for Whistle Works in 2016 is $505,375.
Explanation:The total budgeted operating expenses for the year ended 2016 can be calculated by multiplying the variable operating costs by the units sold and adding the fixed operating costs.
Variable operating costs per unit sold is $0.75, so for 40,500 units sold, the total variable operating costs would be 40,500 x $0.75 = $30,375.
Fixed operating costs are $475,000.
To calculate the total budgeted operating expenses, we add the variable operating costs and fixed operating costs: $30,375 + $475,000 = $505,375.
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The following information was available for Paul Company at December 31, 2020: beginning inventory $90,000; ending inventory $70,000; cost of goods sold $968,000; and sales $1,360,000. Paul’s inventory turnover in 2020 wasa21.5 days.b.26.4 days.c.30.2 days.d.33.8 days.
Answer:
Option (c) is correct.
Explanation:
Given that,
Beginning inventory = $90,000;
Ending inventory = $70,000;
Cost of goods sold = $968,000
Sales = $1,360,000
Average inventor:
= (Beginning inventory + Ending inventory) ÷ 2
= ($90,000 + $70,000) ÷ 2
= $160,000 ÷ 2
= $80,000
Inventory turnover is the ratio of cost of goods sold and average inventory.
Paul’s inventory turnover in 2020:
= Cost of goods sold ÷ Average Inventory
= $968,000 ÷ $80,000
= 12.1 times
Days in inventory:
= 365 days ÷ Inventory turnover ratio
= 365 days ÷ 12.1
= 30.16 or 30.2 days
If demand for a good is extremely elastic, raising the price of that good typically has what effect on total revenue? radio_button_unchecked No discernible change radio_button_unchecked Increases radio_button_unchecked Decreases SUBMIT
Answer:
Decreases.
Explanation:
The law of demand states that for an elastic good an increase in price results in a decrease in quantity demanded.
Elasticity of demand is the degree of responsiveness of quantity demanded to changes in price.
When a good is highly elastic that means the elasticity is above 1. For example if elasticity is 2, an increase in price by 1 unit will result in a decrease in quantity supplied by 2 units.
As total revenue is equal to price multiplied by units sold, total revenue will also reduce with price increase of a highly elastic good.
You have just received notification that you have won the $2.06 million first prize in the Centennial Lottery. However, the prize will be awarded on your 100th birthday (assuming you’re around to collect), 74 years from now. What is the present value of your windfall if the appropriate discount rate is 10 percent? (Enter your answer in dollars, not millions, e.g., 1,234,567. Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) Present value $
Answer:
$1781.59
Explanation:
The present value is the current value of a future income or stream of money, at a specified interest rate (or discount rate).
The future value is the value of an income at a future date based on a rate of interest or discount rate.
We will use the present value (and future value) formula here to solve this problem. The formula is:
[tex]PV=\frac{FV}{(1+r)^n}[/tex]
Where
PV is the present value
FV is the future value
r is the rate of interest (or discount rate)
n is the time in years
Given in the problem, something that you will win 74 years from now, it will be worth $2.06 million, so this is the future value.
FV = 2,060,000
The rate of interest (discount rate) is 10 percent, which means:
r = 10% = 10/100 = 0.1
The time period in years would be 74 years, because 74 years from now you will get the money, so:
n = 74
Now, we plug these into the equation and get our answer:
[tex]PV=\frac{FV}{(1+r)^n}\\PV=\frac{2060000}{(1+0.1)^{74}}\\PV=\frac{2060000}{1.1^{74}}\\PV=1781.59[/tex]
Hence the present value is $1781.59
Final answer:
The present value of the specified $2.06 million future prize with a 10% discount rate over 74 years is approximately $687.53.
Explanation:
The present value of a future windfall can be determined using the formula for present value (PV), which is the future value (FV) divided by (1 plus the discount rate or interest rate) raised to the power of the number of periods (n). The question asks for the present value of a $2.06 million prize to be received in 74 years with a discount rate of 10%.
Using the formula PV = FV / (1 + r)^n, where FV is $2,060,000, the interest rate r is 10% or 0.10, and the number of periods n is 74, we get:
PV = $2,060,000 / (1 + 0.10)^74
Calculating this, we end up with a present value of:
PV = $2,060,000 / (1.10)^74 = $2,060,000 / 2995.57 ≈ $687.53
Therefore, the present value of the $2.06 million prize to be received in 74 years at a 10% discount rate is approximately $687.53.
As the name suggests, convertible bonds allow the owner the option to convert the bonds into a fixed number of shares of common stock. Innovative Energy LLC is a start-up company that just raised $100,000 to conduct a third-party feasibility study on its business model. the company agreed to treat the $100,000 investment as debt at 10% interest rate; however, the investor has the right to exchange the debt for common stock during the company's next financing round. Which of the following terms best describes the $100,000 investment?
Convertible bond
Warrant
Answer:
The $100,000 investment is a convertible bond.
Explanation:
A convertible bond is an interest-bearing or non-interest bearing loan that a public limited company can borrow from an investor. The terms of the loan will determine whether the investor has the right, at the end of the loan period, to convert all or part of the loan amount into the company's shares according to a predetermined conversion ratio.
The conversion ratio (how many shares a lender receives for a given amount of loan) may be fixed or agreed upon based on the circumstances of the exchange, such as the financial ratios calculated from the company's financial statements. The exchange may take place at a pre-determined time or in certain circumstances. The convertible bond may be targeted to a specific target group so that the subscription right for the shares cannot be transferred.
The convertible bond combines the interest yield of the loan with the option of either repaying the principal loan or taking advantage of the increase in the value of the share. It is therefore an intermediate form of equity and debt. Convertible bonds are a popular form of financing, for example, in situations where a small growth company is being financed by venture capitalists. The option included in the loan to convert the growth company loan into equity at a later date may be extremely valuable to the investor. For this reason, a growth company does not usually have to pay the same interest on a convertible bond as on another loan.
Bakker Corporation applies manufacturing overhead on the basis of direct labor-hours. At the beginning of the most recent year, the company based its predetermined overhead rate on total estimated overhead of $93,960 and 2,900 estimated direct labor-hours. Actual manufacturing overhead for the year amounted to $96,160 and actual direct labor-hours were 2,800.
Answer:
The question is missing the requirement stated below:
The predetermined overhead rate for the year was closest to: (Round your answer to 2 decimal places.)
The predetermined overhead rate is $32.40/ hour
Explanation:
The predetermined overhead rate is given by the below formula:
predetermined overhead rate=total estimated overhead/estimated direct labor hours
From the question,total estimated overhead is $93,960 while estimated direct labor hours is 2900 hours
Predetermined overhead rate=$93960/2900
Predetermined overhead rate=$32.40/hour
However overhead is computed thus:
Actual overhead rate =Actual manufacturing overhead/actual labor hours
Actual overhead rate=$96160/2800
=$34.34/hour
The language of price controls supposes that, in a competitive market without government regulations, the equilibrium price of hamburgers is $7 each.
Indicate whether each of the statements is an example of a price ceiling or a price floor and whether it is binding or nonbinding.
(a) There are many teenagers who would like to work at fast-food restaurants, but they are not hired due to minimum-wage laws.
(b) The government prohibits fast-food restaurants from selling hamburgers for more than $5 each.
(c) The government has instituted a legal minimum price of $8 each for hamburgers.
Answer:
A. Price floor, binding
B. Price ceiling, binding
C. Price ceiling binding
Explanation:
Price ceiling is when the government or an agency of the government sets the maximum price for a good or service. Price ceiling is binding if if is set below equilibrium price. Example of price ceiling is rent controls.
Price floor is the minimum price a good or service can be sold. Price floor is binding if it is set above equilibrium price.
Example of price floor is minimum wage.
In this question, minimum wage is an example of A binding price floor because it sets the minimum price labour should be paid and this has led to a fall in the demand for Labour.
In (b), the government sets a price ceiling because $5 is the maximum price hamburgers can be sold for. It is binding because $5 is below the equilibrium price.
In (c), the government set a price floor because $8 is the minimum price hamburgers can be sold for. It is binding because $8 is above equilibrium price,$7.
I hope my answer helps you
A workbook contains a list of houses and the months that they were sold in Florida. You are interested in determining the average price of sold houses in June in Ft. Lauderdale. What function is best suited for this calculation?
(A) AVERAGEIF(B) AVERAGEIFS (C) SUMIF (D) MAXIFS
Answer:
The correct answer is letter "B": AVERAGEIFS.
Explanation:
In Microsoft Office Excel, AVERAGEIFS is a function that helps to determine the average of cells that follow different criteria. AVERAGEIFS is one of many functions under the "Statistic" category. The criteria for AVERAGEIFS can be words or range of numbers which allows more diverse analysis compared to other average functions.
Lydia loves playing with animals. She is good at math and has taken several business classes that she enjoyed. Which career would be the best match for Lydia?
Answer:
The correct answer is letter "C": Owner of a pet sitting service.
Explanation:
According to the personality described in the case, Lydia would could be the owner of a petting service because she likes playing with animals, thus she likes spending time with pets but, as she has good mathematical skills and enjoys business classes she could be in charge of managing a group of people who just like her, have fun being around animals.
On January 1, 2020, Gottlieb Corporation issued $4,000,000 of 10-year, 8% convertible debentures at 102. Interest is to be paid semiannually on June 30 and December 31. Each $1,000 debenture can be converted into 8 shares of Gottlieb Corporation $100 par value common stock after December 31, 2021. On January 1, 2022, $400,000 of debentures are converted into common stock, which is then selling at $110. An additional $400,000 of debentures are converted on March 31, 2022. The market price of the common stock is then $115. Accrued interest at March 31 will be paid on the next interest date. Bond premium is amortized on a straight-line basis. Make the necessary journal entries for: (a) December 31, 2021. (c) March 31, 2022. (b) January 1, 2022. (d) June 30, 2022
Answer:
(a) December 31, 2021.
Bond Interest Expense 156,000
Premium on Bonds Payable 4,000
($80,000 X 1/20)
Cash ($4,000,000 X 8% X 6/12) 160,000
(b) January 1, 2022
Bonds Payable 400,000
Premium on Bonds Payable 6,400
Common Stock 320,000
[8 X $100 X ($400,000/$1,000)]
Paid-in Capital in Excess of Par 86,400
Total premium
($4,000,000 X .02) $80,000
Premium amortized
($80,000 X 2/10) 16,000
Balance $64,000
Bonds converted
($400,000 ÷ $4,000,000) 10%
Related premium
($64,000 X 10%) 6,400
(c) March 31, 2022
Bond Interest Expense 7,800
Premium on Bonds Payable 200
($6,400 ÷ 8 years) X 3/12
Bond Interest Payable 8,000
($400,000 X 8% X 3/12)
Bonds Payable 400,000
Premium on Bonds Payable 6,200
Common Stock 320,000
Paid-in Capital in Excess of Par 86,200
Premium as of January 1, 2022
for $400,000 of bonds $6,400
$6,400 ÷ 8 years remaining
x 3/12 (200)
Premium as of March 31, 2022
for $400,000 of bonds $6,200
(d) June 30, 2022
Bond Interest Expense 124,800
Premium on Bonds Payable 3,200
Bond Interest Payable 8,000
($400,000 X 8% X 1/4)***
Cash 136,000*
[Premium to be amortized:
($80,000 X 80%) X 1/20 = $3,200, or
$51,200** ÷ 16 (remaining interest and
amortization periods) = $3,200]
***Total to be paid: ($3,200,000 X 8% ÷ 2) + $8,000 = $136,000
***Original premium $80,000
2020 amortization (8,000)
2021 amortization (8,000)
Jan. 1, 2022 write-off (6,400)
Mar. 31, 2022 amortization (200)
Mar. 31, 2022 write-off (6,200)
$51,200
***Assumes interest accrued on March 31. If not, debit Bond Interest
Expense for $132,800.
The accounting process for convertible debentures issued by Gottlieb Corporation involves creating balanced journal entries that reflect the issuance and conversion of these debentures. The entries consider accrued interest, bond premium amortization, and conversion of debentures into stock.
Explanation:The subject of this question is the accounting process for convertible debentures, specifically those issued by Gottlieb Corporation on January 1, 2020. Journal entries are required to reflect the output of these convertible debentures at specified dates. To understand how this type of record is created, we must understand the two major phases involved: the issuance of the convertible debentures and the conversion of the debentures into corporate stock.
Here are the necessary journal entries:
On December 31, 2021, record the accrued interest and bond premium amortization.Interest expense debited (4,000,000 * 4%) = $160,000Payable credited = $160,000Premium on Bonds Payable debited (4,000,000 * 2% / 10 years / 2) = $4,000Interest expense credited = $4,000On January 1, 2022, record the conversion of $400,000 of debentures into stock.Bonds payable debited = $400,000Common Stock credited (400,000 / 1000 * 100) = $320,000Premium on Bonds Payable credited = $8,000Paid-in Capital in Excess of Par credited = $72,000On March 31, 2022, repeat the process for another $400,000 of debentures.On June 30, 2022, record the accrued interest and bond premium amortization again.In each of these steps, the debits and credits must balance, reflecting the fundamental principle of double-entry bookkeeping.
Learn more about Convertible Debentures here:https://brainly.com/question/35495388
Central Industries has three product lines: A, B and C. The following information is available: Product A Product B Product C Sales $100,000 $90,000 $44,000 Variable costs 76,000 48,000 35,000 Contribution margin 24,000 42,000 9,000 Avoidable fixed costs 9,000 18,000 3,000 Unavoidable fixed costs 6,000 9,000 7,700 Operating income(loss) $9,000 $15,000 $(1,700) Central Industries is thinking about dropping Product C because it is reporting a loss. Assume Central Industries drops Product C and does not replace it. What will happen to operating income
Answer:
Operating Income will decrease by $6,000.
Explanation:
The unavoidable Fixed Cost of Product C will continue to incur even if it is dropped. So, Central Industries will still have to Incur $7,700 of Fixed Cost but by dropping Product C, they can save the existing loss of $1,700. This means that:
1,700 - 7,700 = -$6,000.
Thanks!
Answer:
It will decrease by 6,000 which is the operating contribtuion generated for the product before allocation of common fixed cost.
Explanation:
We have to build the segment income statement
[tex]\left[\begin{array}{ccccc}&A&B&C&Total\\$Sales&100000&90000&44000&234000\\$Variable Cost&-76000&-48000&-35000&-159000\\$Contribution&24000&42000&9000&75000\\$Tracable fixed&-9000&-18000&-3000&-30000\\$Operating Income&15000&24000&6000&45000\\$Fixed Cost&&&&-22700\\$Net Income&&&&22300\\\end{array}\right][/tex]
As the Product is generating a positive contribution for 6,000 it would be a financial disadvantage to discontinued. It is making a "loss" because of the common fixed cost allocated to the product not, the product.
The fact that the price of diamonds is higher than the price of water:
A. can be explained as the outcome of a consumer optimum in consumer choice theory.
B. cannot be explained by behavioral economics or consumer choice theory.
C. is an outcome of irrational behavior in consumer choice theory.
D. can be explained only by behavioral economics but not by consumer choice theory.
Answer: D
Explanation:
Behavioral economics studies the impact of cognitive, psychological, cultural, emotional and social factors on individuals economic decisions. Behavioral economics is concerned with the extent of rationality of individuals, firms and governments. The study includes how market choices are made and the components that propel public choices.
Behavioral economics is important because it gives us an idea about how the mind of humans work. The greater the supply of a particular good, the more we use the good, the less we appreciate it. There are oceans of water and we always get water easily but there are fewer diamonds embedded and hidden in rocks which are not cheap and readily available.