Answer: The following journal entries apply in each of the scenarios:
(a) If the furniture was sold for $509,000 cash,
Debit ($) Credit ($)
Accumulated depreciation 5,551,000
Furniture (cost) 6,060,000
Cash (sale proceeds) 509,000
(Being entries to record disposal of furniture at the net book value)
(b) If the furniture was sold for $1,619,000 cash,
Debit ($) Credit ($)
Accumulated depreciation 5,551,000
Furniture (cost) 6,060,000
Gain on disposal of asset 1,110,000
Cash (sale proceeds) 1,619,000
(Being entries to record disposal of furniture)
(c) If the furniture was sold for $407,000 cash,
Debit ($) Credit ($)
Accumulated depreciation 5,551,000
Furniture (cost) 6,060,000
Loss on disposal of asset 102,000
Cash (sale proceeds) 407,000
(Being entries to record disposal of furniture)
Explanation: Normally, most organizations dispose their assets using the net book value (cost minus the accumulated depreciation) to determine the price to sell the assets. So, most of them do not intend to sell below the NBV, they usually add margins to make profit except in certain other considerations. To recognize the disposal, the cost (asset account) has to be credited while the accumulated depreciation has to be debited. Of course the sales proceed goes into your cash account as receipt (debit), then the difference between the sales proceed and the NBV is either a gain on disposal or loss.
A 16-year, 4.5 percent coupon bond pays interest annually. The bond has a face value of $1,000. What is the percentage change in the price of this bond if the market yield to maturity rises to 5.7 percent from the current rate of 5.5 percent?
Answer:
2.2% change in the price of this bond if the market yield to maturity rises to 5.7 percent from the current rate of 5.5 percent.
Explanation:
Face Value = $1,000
Coupon payment = 1000 x 4.5% = $45 annually
Number of periods = n = 16 years
Price of bond is the present value of future cash flows, to calculate Price of the bond use following formula
Price of the Bond = C x [ ( 1 - ( 1 + r )^-n ) / r ] + [ F / ( 1 + r )^n ]
Yield to maturity = 5.7%
Price of the Bond = $45 x [ ( 1 - ( 1 + 5.7% )^-16 ) / 5.7% ] + [ $1,000 / ( 1 + 5.7% )^16 ]
Price of the Bond = $876.18
Yield to maturity = 5.5%
Price of the Bond = $45 x [ ( 1 - ( 1 + 5.5% )^-16 ) / 5.5% ] + [ $1,000 / ( 1 + 5.5% )^16 ]
Price of the Bond = $895.38
Percentage Change = ( $895.38 - $876.18 ) / $876.18 = 2.2%
2.2% modification in the price of this bond if the market yield to maturity rises to 5.7 percent from the current rate of 5.5 percent.
Calculation of Percentage change
The Face Value is = $1,000
Then the Coupon payment is = 1000 x 4.5% = $45 annually
After that Number of periods = n is = 16 years
When the Price of bond is the present value of future cash flows, Then to calculate Price of the bond use following formula are:
Price of the Bond is = C x [ ( 1 - ( 1 + r )^-n ) / r ] + [ F / ( 1 + r )^n ]
Then Yield to maturity = 5.7%
The Price of the Bond is = $45 x [ ( 1 - ( 1 + 5.7% )^-16 ) / 5.7% ] + [ $1,000 / ( 1 + 5.7% )^16 ]
The Price of the Bond is = $876.18
Then Yield to maturity is = 5.5%
After that Price of the Bond is = $45 x [ ( 1 - ( 1 + 5.5% )^-16 ) / 5.5% ] + [ $1,000 / ( 1 + 5.5% )^16 ]
Then Price of the Bond = $895.38
Therefore, the Percentage Change is = ( $895.38 - $876.18 ) / $876.18 = 2.2%
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On January 1, 2016, Culver Corporation granted 9,300 options to key executives. Each option allows the executive to purchase one share of Culver’s $5 par value common stock at a price of $20 per share. The options were exercisable within a 2-year period beginning January 1, 2018, if the grantee is still employed by the company at the time of the exercise. On the grant date, Culver’s stock was trading at $25 per share, and a fair value option-pricing model determines total compensation to be $409,000.
On May 1, 2018, 7,440 options were exercised when the market price of Culver’s stock was $30 per share. The remaining options lapsed in 2020 because executives decided not to exercise their options.
Prepare the necessary journal entries related to the stock option plan for the years 2016 through 2020.
Answer:
Explanation:
Jan.1 2016 No entry
Dec.31 2016
Dr Compensation expense [$409,000/2] $204,500
Cr Paid in capital - Stock options $204,500
Dec. 31 2017
Dr Compensation expense [$409,000/2] $204,500
Cr Paid in capital - Stock options $204,500
Dec. 31 2018
Dr Cash [7440*$20] $148,800
Dr Paid in capital - Stock options [$409,000*(7440/9300)] $327,200
Cr Common stock [7440*$5] $37,200
Cr Paid in capital in excess of par [148,800+327,200-37,200] $438,800
Jan. 1 2020
Dr Paid in capital - Stock options [409,000-327,200] $81,800
Cr Paid in capital from expired stock $81,800
internal control of cash receipts , Jodi rostad works at the drive-through window of mamma's burgers. Occasionally, when a drive-through customer orders, jodi fills the order and pockets the customer's money. she does not ring up the order on the cash register. If mamma's burgers cannot hire more people to prevent this theft, the most effective internal control to implement would be:
Answer:
To implement and advertise a policy that any customer who does not receive a reciept is entitled to a free burger.
Explanation:
Internal control is the process by which an organisation's objectives are met by ensuring efficiency of operational procedures, reliable financial reporting, and compliance with regulations and policies.
The normal procedure in Mamma's burgers is for Jodi to ring up customer orders on the cash register. Since she is taking the money and pocketing it occasionally, the best internal control policy is to advertise that any customer who did not receive a receipt will be entitled to a free burger.
This will give the customers incentive to report cases where reciepts are not given. The measure will act as a deterrent to Jodi.
Suppose that consumers' preferences are well behaved in that properties 4-1 to 4-4 are satisfied. Furthermore, assume goods X and Y are normal goods and the price of good X decreases. Then the substitution effect will lead consumer to consume:
a. More of good X and more of good Y
b. Less of good X and more of good Y
c. Less of good X and less of good Y
d. More of good X and less of good Y
Answer:
d. More of good X and less of good Y
Explanation:
Normal goods are goods whose demands vary directly with income. If income rises, demand increases and if income falls, demand falls.
When the price of good X reduces, good X becomes cheaper and rational consumers would demand more of good X because it is cheaper and less of good Y which is now more expensive. This is known as the substitution effect.
I hope my answer helps you
Final answer:
The substitution effect will cause a consumer to consume more of good X and less of good Y when the price of good X decreases and both goods are normal goods.
Explanation:
When the price of good X decreases and assuming goods X and Y are normal goods, the substitution effect will lead a consumer to consume more of good X and less of good Y. The substitution effect, based on consumer's behavior with well-behaved preferences, dictates that as the price of a product decreases, consumers will substitute more of this now-cheaper good in place of others. Therefore, the consumer will buy more of good X because it has become relatively cheaper compared to good Y. However, since both X and Y are normal goods, we are not discussing the income effect here, which could potentially increase the consumption of both goods due to the extra purchasing power from the price decrease of good X.
Considering the options provided:
a. More of good X and more of good Y – Incorrect, substitution effect considers only one good becoming relatively cheaper.b. Less of good X and more of good Y – Incorrect, substitution effect dictates more of the cheaper good, not less.c. Less of good X and less of good Y – Incorrect, the price decrease leads to more consumption of the cheaper good due to the substitution effect.d. More of good X and less of good Y – Correct, as the substitution effect will generally cause consumers to purchase more of the relatively cheaper good and less of the relatively more expensive good.Commodity money is
A.backed by gold.
B.the principal type of money in use today.
C.money with intrinsic value.
D.receipts created in international trade that are used as a medium of exchange.
Answer:
The correct answer is letter "C": money with intrinsic value.
Explanation:
Commodity money refers to the value items have themselves (intrinsic) and the value they have to purchase other goods. Commodity money opposes fiat money which is a currency issued by governments with a value imposed that does not represent the actual value of the paper or coin it is. In such a case, fiat money is only used as a medium of exchange.
You are terminating an employee.You need to congratulate your coworker on his recent promotion.You need to inform your boss that she has made a significant error in her data calculations.You need to inform your boss of a new lead.You want to schedule a meeting to update your boss on a client meeting.Which of the following is a situation that might call for an indirect strategy? Check all that apply.
You need to congratulate your coworker on his recent promotion.
You need to inform your boss that she has made a significant error in her data calculations.
You want to schedule a meeting to update your boss on a client meeting.
You need to inform your boss of a new lead.
You are terminating an employee.
Answer:
You are terminating an employee.You need to congratulate your coworker on his recent promotion.You need to inform your boss that she has made a significant error in her data calculations.You need to inform your boss of a new lead.You want to schedule a meeting to update your boss on a client meeting. The following are the situation that might call for an indirect strategy:
You need to congratulate your coworker on his recent promotion.You are terminating an employee.You need to inform your boss that she has made a significant error in her data calculations.An indirect strategy in business communication is used when delivering negative news or when the audience may resist the message. Thus, the situations that might need an indirect approach include informing your boss about a significant error in her data calculations, and terminating an employee.
Explanation:An indirect strategy in business communication is typically utilized when delivering negative news or when the audience may resist the message. Hence, the situations that might call for an indirect approach from the options provided are: 'You need to inform your boss that she has made a significant error in her data calculations' and 'You are terminating an employee'. The indirect approach can help soften the blow of these potentially contentious topics, by beginning with a neutral or positive statement before delivering the negative news.
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Southwest Pediatrics has the following balances on December 31, 2021, before any adjustment: Accounts Receivable = $130,000; Allowance for Uncollectible Accounts = $2,100 (debit). On December 31, 2021, Southwest estimates uncollectible accounts to be 20% of accounts receivable.
Answer:
Bed debts expenses = $28,100
Explanation:
Given:
Accounts Receivable = $130,000
Allowance for Uncollected Accounts = $2,100 (debit)
Uncollected accounts = 20% of accounts receivable
Computation of Uncollected accounts :
= 20% x Accounts receivable
= 20% x $130,000
= $26,000
Total Bed debts = $26,000 + $2,100
= $28,100
Journal Entries
Date Accounts Debit Credit
Bed Debts Expenses A/c Dr $28,100
To Allowance for Uncollected Accounts $28,100
Cavy Company accumulated 580 hours of direct labor on Job 456 and 850 hours on Job 777. The direct labor was incurred at a rate of $15 per direct labor hour for Job 456 and $26 per direct labor for Job 777. Journalize the entry to record the flow of labor costs into production. If an amount box does not require an entry, leave it blank.
Answer:
$30,800
Explanation:
Dr Work in progress 30,800
Cr Wages payable 30,800
Direct labour hours × Per direct labour hour
Job 456
580×15 = 8700
Job 777
850×26= 22100
22,100 + 8,700 = 30,800
The journal entries to record the flow of labor costs into production for Job 456 and Job 777 at Cavy Company involve debiting the work in process for each job for the calculated labor costs and crediting Wages Payable for the total labor cost incurred.
The question asks to journalize the entry for the labor costs incurred on Job 456 and Job 777 at Cavy Company, incorporating direct labor hours and the rate per hour for each job. Thus, to record these transactions, we would use the information provided to calculate the total labor costs for each job. For Job 456, 580 hours of direct labor were incurred at a rate of $15 per hour. Calculating the total, 580 hours × $15/hour = $8,700. Similarly, for Job 777, 850 hours were incurred at $26 per hour, resulting in a total of 850 hours × $26/hour = $22,100.
To journalize these amounts into the production process:
Work in Process - Job 456 ............................ $8,700
Work in Process - Job 777 ............................ $22,100
Wages Payable .............................................. $30,800
This entry increases the work in process for each job, indicating that labor costs have been allocated to these jobs. The corresponding credit to Wages Payable reflects the obligation to pay for the direct labor used.
"Come out of the fog, young man. And remember you don't have to be a complete fool in order to succeed. Play the game, but don't believe in it--that much you owe yourself." *
Answer:
Quoted from"The Invisible Man" by Ralph Ellison, these lines are spoken by the vet who had mocked the narrator's college and Mr. Norton.
Explanation:
Ralph Ellison's "The Invisible Man" tells the story of the narrator/ protagonist who had been accustomed to being "invisible", meaning he was unnoticed by people. Amidst the racial prejudice of the blacks by the whites, the young narrator finds it hard to fully comprehend the situation. And things turn for the worse when he showed the reality of life for the blacks to one of the college's benefactors which resulted in him getting expelled from the college.
But despite all that, he calmly accepted his mistake and asked for recommendation from the man. The letters did not endorse him but rather cheated him from any form of employment. The given quote is from Chapter 7, spoken by the vet who was his co-passenger in the bus for New York. He told the young man to "come out of the fog". He advised him to try to "learn to look beneath the surface", be more conscious of the events around him so as not to be a victim.
The question pertains to themes of self-awareness, personal growth, and skepticism in societal participation, typically discussed in college-level English literature or philosophy classes.
Explanation:The passage provided appears to be about self-awareness, personal development, and the dichotomy between participating in life's games and maintaining a distance from fully believing in them. This topic falls under the category of English, specifically in the field of literature or philosophical discussion often found in novels, essays, or similar texts. The passage suggests that in order to improve oneself, a person may need to accept being perceived as foolish by others. This idea is mirrored across other quotes provided, which reflect themes of self-knowledge, the importance of maintaining a level of skepticism about one's perceived importance, and the acknowledgement of life's deeper questions and challenges.
One particular emphasis is on the concept that success doesn't require complete buy-in into societal games, but rather a strategic participation with a level of detachment. This philosophical viewpoint can lead to a more authentic path of personal growth and self-discovery. Such profound reflections are typical of college-level English literature or philosophy courses, where students are encouraged to engage with complex ideas and analyze texts deeply.
The free cash flow hypothesis supports A. decreasing stockholder dividends to retain more cash within the firm. B. reducing a firm's level of debt to reduce the amount of cash used to pay interest. C. increasing the debt portion of a firm's capital structure to increase firm value. D. hiring managers with little or no stock ownership in the firm. E. the idea that firms with high levels of free cash flow are more apt to make good acquisitions than firms with low levels. Reset Selection\
Answer:
The correct answer is C
Explanation:
Free cash flow hypothesis is the one which is defined as the increase in the cash flow, which the agency costs of the firms or business with the opportunities of the poor investment. The management which exhausted the positive projects of NPV (Net Present Value), it proceeds in order to invest in negative NPV projects instead paying out the funds to the shareholders.
So, this hypothesis supports, in increasing or rising the portion of debt of the capital structure of the firm so that could increase the value of the firm.
An operation operates with a variable cost percentage of 72%. The owner wants to increase sales revenue by an amount necessary to provide for an additional operating income of $800 a month, or $9,600 a year. What is the additional increase in sales revenue required
Answer:
The answer is $2,857.14
Explanation:
Let us assume Sales be $500 per month
Monthly
Sales $500
Less: Variable Cost(72%) $360
Contribution(will be 28%) $140
Less: Fixed Cost(Assume) 0
Operating Income $140
If there should be an increase of $800 per month in the operating Income
Revised Operating Income $140 + $800 = $940
Therefore Contribution is equal to $ 940
If Contribution is $940 equal to 28%, then Sales be 100%
$940 ÷ 28%
$3,357.14
Therefore additional increase in Sales revenue required per month
$3,357.14 - $500
$2,857.14
To calculate the additional increase in sales revenue required, divide the desired operating income by the variable cost percentage. The result is the additional increase in sales revenue needed.
Explanation:To calculate the additional increase in sales revenue required, we need to determine the operating income that corresponds to the desired increase of $800 per month or $9,600 per year. The variable cost percentage of 72% means that 72% of the sales revenue goes towards covering variable costs. We can set up an equation to find the additional increase in sales revenue:
Additional increase in sales revenue = Desired operating income / Variable cost percentage
Substituting the values for the desired operating income and variable cost percentage:
Additional increase in sales revenue = $9,600 / 0.72 = $13,333.33
Therefore, the additional increase in sales revenue required is $13,333.33.
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The following information is available for Splish Brothers Inc. for three recent fiscal years. 2022 2021 2020Inventory $580,000 $590,000 $320,000Net sales 1,950,000 1,750,000 1,350,000Cost of goods sold 1,462,500 1,228,500 938,000Calculate the inventory turnover, days in inventory, and gross profit rate for 2022 and 2021. 2022 2021Inventory Turnover times timesDays in Inventory days daysGross Profit Rate % %
Answer:
In 2021:
Inventory Turnover for 2021: 2.7 times
Days in inventory: 135.19 days
Gross Profit Rate: 29.8%
In 2022:
Inventory Turnover for 2022: 2.5 times
Days in inventory: 146 days
Gross Profit Rate: 25%
Explanation:
Inventory turnover ratio is calculated by using following formula:
Inventory turnover ratio = Cost of Goods Sold/Average Inventory
Average Inventory = (Inventory beginning of year + Inventory end of year )/2
In the company:
Average Inventory for 2021 = ($590,000 + $320,000)/2 = $455,000
Average Inventory for 2022 = ($580,000 + $590,000)/2 = $585,000
In 2021:
Inventory Turnover for 2021 = $1,228,500/$455,000 = 2.7 times
Days in inventory = 365/Inventory Turnover = 365/2.7 = 135.19 days
Gross Profit Rate = Gross profit/net sales = (Net Sales - Cost of goods sold)/Net Sales = ($1,750,000 - $1,228,500)/$1,750,000 = 0.298 = 29.8%
In 2022:
Inventory Turnover for 2022 = $1,462,500/$585,000 = 2.5 times
Days in inventory = 365/Inventory Turnover = 365/2.5 = 146 days
Gross Profit Rate = Gross profit/net sales = (Net Sales - Cost of goods sold)/Net Sales = ($1,950,000 - $1,462,500)/$1,950,000 = 0.25 = 25%
The following transactions took place at Fine Fashions Outlet during July 2019. Fine Fashions Outlet uses a perpetual inventory system. DATE TRANSACTIONS July 1 Purchased dresses for $4,400 plus a freight charge of $700 from Fashion Expo, Invoice 101, dated July 1; the terms are 2/10, n/30. 5 Sold two dresses on account to Alice Chu, terms 1/10, n/30; issued Sales Slip 788 for $900. The cost of the dresses sold was $720. 7 Received Credit Memorandum 210 for $850 from Fashion Expo for damaged dresses returned; the goods were purchased on Invoice 101 dated July 1. 9 Accepted a return of a dress from Alice Chu; the dress was originally sold on Sales Slip 788 of July 5; issued Credit Memorandum 89 for $400. The cost of the returned dress was $240. 10 Issued Check 1255 to pay the amount due to Fashion Expo for Invoice 101, dated July 1, less the return of July 7 and less the cash discount. 15 Received payment from Alice Chu for the sale of July 5, less the return of July 9 and less the cash discount. 15 Recorded sales on credit cards for the two-week period ended July 15, $13,000; the bank charges a 3 percent fee on all credit card sales. The cost of merchandise sold was $10,400. 17 Purchased merchandise on account from Fashion Wholesalers for $5,000, subject to trade discounts of 40 percent and 10 percent, terms 1/10, n/30, Invoice 2078. 26 Paid amount owed to Fashion Wholesalers for the purchase of July 17, Check 1285. Record the transactions in a general journal.
Answer:
July 1 Debit inventory 5100 credit Accounts payable 5100
5 July Debit Accounts receivables 900 credit sales 900
debit cost of sales 720 credit inventory 720
7 July Debit Accounts payable 850, credit inventory 850
9 July Debit sales allowance 400, credit Accounts receivables 400
debit inventory 240 credit cost of sales 240
10 July Debit Accounts payable 4165 credit bank 4165
15. July Debit Bank 13000 credit sales 13000
debit cost of sales 10400 credit inventory 10400
debit bank charges 390 credit bank 390
17 debit merchandise 5000 credit Accounts payable 5000
26 Debit Accounts payable 4950 credit bank 4950
Explanation:
1 july inventory is the total of purchases plus freight charges.
10 july the discount is on the remaining amount after the goods returned because goods returned had decreased the amount owing.
26 july the trade discounts are for when buying and paying same day when it it is on account there can only be settlement discount
Final answer:
Fine Fashions Outlet's transactions from July 2019 must be correctly recorded in a general journal, following the details and terms provided for each transaction within the perpetual inventory system.
Explanation:
For Fine Fashions Outlet, which uses a perpetual inventory system, the transactions from July 2019 must be properly recorded in the general journal. Each transaction involves different aspects of business operation such as purchases, sales, returns, and payments. Detailed entries including dates, amounts, and terms are crucial for accurate financial accounting and inventory management.
Purchase of dresses and payment of freight with terms.
Sales of dresses on account with terms and cost of goods sold.
Receipt of a credit memorandum for returned damaged dresses.
Acceptance of a return from a customer and issuance of a credit memorandum considering the cost.
Issuance of a check to Fashion Expo considering returns and cash discounts.
Collection of payment from customer considering returns and discounts.
Recording credit card sales and associated bank charges along with the cost of goods sold.
Purchase of merchandise considering trade discounts and payment terms.
Payment made to Fashion Wholesalers for prior purchases.
Each entry should reflect the specific details of the transaction – the date, the parties involved, the nature of the transaction (e.g., purchase, sale, return), and the terms of the transactions (discounts, due dates, and so on).
You are planning to make monthly deposits of $370 into a retirement account that pays 9 percent interest compounded monthly. If your first deposit will be made one month from now, how large will your retirement account be in 35 years?
Answer:
Future value = $1,088,460.26
Explanation:
Given:
Periodic payment (PMT) = $370
Internet rate (r) = 9% / 12 = 0.75% per month = 0.75 /100 =0.0075
Number of period (n) = 35 years x 12 months = 420
Future value = ?
Computation of future value:
[tex]Future \ value = Pmt[\frac{(1+r)^n-1}{r} ]\\\\Future \ value = 370[\frac{(1+0.0075)^{420}-1}{0.0075} ]\\\\Future \ value = 370[\frac{(1.0075)^{420}-1}{0.0075} ]\\\\Future \ value = 370[\frac{23.0633836-1}{0.0075} ]\\\\Future \ value = 370[\frac{22.0633836}{0.0075} ]\\\\Future \ value = 370[2,941.78448]\\\\Future \ value = 1,088,460.26\\\\[/tex]
Future value = $1,088,460.26
Quackenbush Widgets has developed a new type of widget that whistles, sings, and plays the accordion—making it unlike any other widget ever produced. Quackenbush wishes to grab a hold in the musical widget market before its competitors create similar products, so when it releases its new widget it prices it at only $250—even though most of its other widgets start at $350. Which pricing strategy does this example show?
1. Cost-plus pricing
2. Price penetration
3. Price skimming
4. Value pricing
Answer:
The answer to this question is 2. Price penetration
Explanation:
price penetration is a method of pricing that involves setting a very low price to attract customers to buy a new product. It is a pricing strategy that is used to gain market share and customer base most especially for new product.
The price is set low with the view to entice consumer and gain more market share for new product.
Hence the action of Quackenbush Widgets setting the price of its new widgets at only $250 even though others widgets starts from $350 is an example of a price penetration
A bond’s is generally $1,000 and represents the amount borrowed from the bond’s first purchase. • A bond issuer is said to be in if it does not pay the interest or the principal in accordance with the terms of the indenture agreement or if it violates one or more of the issues restrictive covenants. • The contract that describes the terms of a borrowing arrangement between a firm that sells a bond issue and the investors who purchase the bonds is called . • A bond’s gives the issuer the right to call, or redeem, a bond at specific times and under specific conditions. What is the coupon interest rate of this bond?
Explanation:
1. A bond's face or maturity value is generally $1,000 and represents the amount borrowed from the bond's first purchaser.
2. A bond issuer is said to be in default if it does not pay the interest or the principal in accordance with the terms of the indenture agreement or if it violates one or more of the issue's restrictive covenants.
3. A bond contract feature that requires the issuer to retire a specified portion of the bond issue each year is called a singing fund provision.
4. A bond's call provision gives the issuer the right to call, or redeem, a bond at specific time and under specific conditions.
SecuriCorp operates a fleet of armored cars that make scheduled pickups and deliveries in the Los Angeles area. The company is implementing an activity-based costing system that has four activity cost pools: Travel, Pickup and Delivery, Customer Service, and Other. The activity measures are miles for the Travel cost pool, number of pickups and deliveries for the Pickup and Delivery cost pool, and number of customers for the Customer Service cost pool. The Other cost pool has no activity measure because it is an organization-sustaining activity. The following costs will be assigned using the activity-based costing system: Driver and guard wages $ 960,000 Vehicle operating expense 390,000 Vehicle depreciation 270,000 Customer representative salaries and expenses 300,000 Office expenses 160,000 Administrative expenses 460,000 Total cost $ 2,540,000 The distribution of resource consumption across the activity cost pools is as follows: Travel Pickup and Delivery Customer Service Other Totals Driver and guard wages 50 % 35 % 10 % 5 % 100 % Vehicle operating expense 70 % 5 % 0 % 25 % 100 % Vehicle depreciation 60 % 15 % 0 % 25 % 100 % Customer representative salaries and expenses 0 % 0 % 90 % 10 % 100 % Office expenses 0 % 20 % 30 % 50 % 100 % Administrative expenses 0 % 5 % 60 % 35 % 100 % Required: Complete the first stage allocations of costs to activity cost pools.
Answer:
SecuriCorp
The First level Allocations will be:
Of a total cost of $2,540,000
Travel allocated costs is $915,000
Pick Up and Delivery is $451,000
Customer Service is $690,000
Others is $484,000
Explanation:
the next level of allocation will be to determine the cost rate based on the Activity Measures, however these were not provided in the question
Activity Based Costing is a costing technique that allocates costs based on the activity level of certain pre-determined cost drivers.
Instead of taking the pool of costs and dividing it by Volume to arrive at an Average Costs, Activity Based Costing believes all components leading to the cost generated should bear the burden of the cost by determining the Driver rate per activity.
If from the example we have worked above, we are told the number of miles covered is 20,000 miles and the actual Cost we worked out for Travels was $960,000. This implies we have an activity rate of $48 Per mile covered as travels costs.
The same would apply to Customer Services if for example 3,000 customers were attended to in the period, the Rate Per Customer will become $690,000 divided by 3,000 = $230 Per Customer
With these indices, it is easy to then allocate costs on the basis of miles traveled + Customers Attended to etc
To allocate costs to the activity cost pools, multiply the total costs by the resource consumption percentages provided for each activity.
Explanation:In order to allocate costs to the activity cost pools, we need to use the distribution of resource consumption percentages provided. Let's calculate the cost allocation for each activity cost pool:
Travel cost pool: Multiply total costs by 50% for driver and guard wages, 70% for vehicle operating expense, and 60% for vehicle depreciation.Pickup and Delivery cost pool: Multiply total costs by 35% for driver and guard wages, 5% for vehicle operating expense, and 15% for vehicle depreciation.Customer Service cost pool: Multiply total costs by 10% for driver and guard wages, 0% for vehicle operating expense, and 0% for vehicle depreciation, and 90% for customer representative salaries and expenses.Other cost pool: Multiply total costs by 5% for driver and guard wages, 25% for vehicle operating expense, and 25% for vehicle depreciation, and 10% for customer representative salaries and expenses, and 50% for office expenses, and 35% for administrative expenses.Learn more about Cost allocation here:https://brainly.com/question/34659373
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The debits and credits for four related entries for a sale of $15,000, terms 1/10, n/30, are presented in the following T accounts. Cash (5) 13,860 Accounts Receivable (1) 14,850 (3) 990 (5) 13,860 Merchandise Inventory (4) 575 (2) 8,800 Estimated Returns Inventory (4) 575 Customer Refunds Payable (3) 990 Sales (1) 14,850 Cost of Merchandise Sold (2) 8,800 Describe each transaction. 1. Sold merchandise on account. 2. Recorded the cost of the merchandise sold and reduced the merchandise inventory account. 3. 4. 5. Check My Work5 more Check My Work uses remaining.
please finThe debits and credits for four related entries for a sale of $15,000, terms 1/10, n/30, are presented in the following T accounts. EXPLANATIONS for these accounts are given below in an attachment
Mauro Products distributes a single product, a woven basket whose selling price is $12 per unit and whose variable expense is $9 per unit. The company’s monthly fixed expense is $6,300. Required: 1. Calculate the company’s break-even point in unit sales. 2. Calculate the company’s break-even point in dollar sales. (Do not round intermediate calculations.) 3. If the company's fixed expenses increase by $600, what would become the new break-even point in unit sales? In dollar sales? (Do not round intermediate calculations.)
Answer:
1. 2,100 units
2. $25,200
3. 2,300 units and $27,600
Explanation:
The break-even point is the level of sales at which the business incur no profit no loss.Fixed and variable costs are covered at this level of sales.
Contribution Margin = Sale price - variable cost = $12 - $9 = $3
Contribution Margin ratio= Contribution Margin / Sale price = $3 / $12 = 25%
1.
Break-even point = Fixed cost / Contribution margin = $6,300 / $3 = 2,100
2.
Break-even point = Fixed cost / Contribution margin ratio = $6,300 / 25% = $25,200
3.
Fixed Cost = $6,300 + $600 = $6,900
Break-even point = Fixed cost / Contribution margin = $6,900 / $3 = 2,300 units
Break-even point = Fixed cost / Contribution margin ratio = $6,900 / 25% = $27,600
A worksheet A. is an internal document that helps summarize data for the preparation of financial statements. B. is a journal used to record transactions. C. is a ledger listing the account balances and changes in those accounts.
Answer:
A. is an internal document that helps summarize data for the preparation of financial statements.
Explanation:
A worksheet is an internal document used to prepare accounting information and different reports. It used to calculate the adjusted values from unadjusted values. In include unadjusted trial balance, adjusting journal entries, adjusted trial balance, equity section, Income statement section and balance sheet section. It provide information for the preparation of financial statements.
5. Shifts of the aggregate supply curve Which of the following would properly be classified as a favorable supply shock? There is an increase in government spending. There is a technological improvement that allows firms to reduce their costs of production permanently. The world price of oil increases rapidly without warning and is expected to remain at the new high level for many years, making it more expensive for all firms to produce goods and services.
Answer:
There is a technological improvement that allows firms to reduce their costs of production permanently
Explanation:
A favourable supply shock refers to an event that increases supply.
A technological improvement which reduces cost of production is a positive occurrence because supply can increase as cost of production falls.
An increase in the world price of oil is a negative supply shock because if increases cost of production and supply falls as a result.
I hope my answer helps you
A favorable supply shock in the context of the aggregate supply curve would be a technological improvement that allows firms to reduce their costs of production permanently, resulting in a rightward shift of the curve.
Explanation:The question pertains to shifts in the aggregate supply curve and what factors could lead to a favorable supply shock. When we consider the scenarios provided, the one that would be classified as a favorable supply shock is technological improvement that allows firms to permanently reduce their costs of production. A technological advancement can lead to an increase in supply, which is depicted as a shift to the right of the aggregate supply curve. This shift indicates that for any given price level, the economy can produce and supply more goods and services. Conversely, an increase in government spending typically affects aggregate demand, not supply, and an increase in the world price of oil represents an adverse supply shock, causing the aggregate supply curve to shift left, reflecting higher production costs and a decrease in supply.
Exercise 06-5 Absorption costing and variable costing income statements LO P2 Rey Company’s single product sells at a price of $216 per unit. Data for its single product for its first year of operations follow. Direct materials $ 20 per unit Direct labor $ 28 per unit Overhead costs Variable overhead $ 6 per unit Fixed overhead per year $ 160,000 per year Selling and administrative expenses Variable $ 18 per unit Fixed $ 200,000 per year Units produced and sold 20,000 units 1. Prepare an income statement for the year using absorption costing 2. Prepare an income statement for the year using variable costing.
Answer:
1. Income statement for the year
using Absorption Costing
Selling price ( 20,000 x $216 ) $4,320,000
Direct materials ( 20,000 x $20 ) $400,000
Direct labor ( 20,000 x $28 ) $560,000
Variable overhead ( 20,000 x $6 ) $120,000
Fixed overhead $160,000
Total Production Cost ($1,240,000)
Gross Profit $3,080,000
Selling and Admin Expenses
Variable Cost ( 20,000 x $18) $360,000
Fixed Cost $200,000
Total Period Cost ($560,000)
Operating Income $2,520,000
2. Income statement for the year
using Variable Costing
Selling price ( 20,000 x $216 ) $4,320,000
Direct materials ( 20,000 x $20 ) $400,000
Direct labor ( 20,000 x $28 ) $560,000
Variable overhead ( 20,000 x $6 ) $120,000
Variable Cost S&A ( 20,000 x $18) $360,000
Variable Production Cost ($1,440,000)
Contribution Margin $2,880,000
Fixed Cost
Production overhead cost $160,000
Fixed Cost S&A $200,000
($360,000)
Operating Income $2,520,000
Explanation:
Variable and absorption costing income statement have difference of treatment of Variable and Fixed costs as production cost and period cost.
Variable costing consider all variable costs as production cost and Absorption costing consider all the cost incurred in production either variable or fixed as production cost.
Data for January for Bondi Corporation and its two major business segments, North and South, appear below:
Sales revenues, North $ 587,000
Variable expenses, North $ 340,600
Traceable fixed expenses, North $ 70,200
Sales revenues, South $ 453,200
Variable expenses, South $ 258,600
Traceable fixed expenses, South $ 58,600
In addition, common fixed expenses totaled $158,900 and were allocated as follows: $82,500 to the North business segment and $76,400 to the South business segment.
A properly constructed segmented income statement in a contribution format would show that the segment margin of the North business segment is:
a.$93,700
b.$340,600
c.$176,200
d.$163,900
Answer:
c.$176,200
Explanation:
The questionis to determine the segment margin of the North Business Segment
Pitfall to note: the question contains data for both the North and the South Segments, as such, only the data relevant to the North Segment should be used for the calculation as follows:
Sales Revenue = $587,000
Subtract: Variable Exp. ($340,000)
COntribution margin $264,400
Subtract: Traceable Fixed ($70,200)
The Segment Margin $176,200 Option c
The segment margin for the North business segment in a contribution formatted segmented income statement is $176,200. We arrive at this figure by first calculating the contribution margin(discounting the variable expenses from the sales revenue) and then subtracting the traceable fixed expenses from this number.
Explanation:To ascertain the segment margin for the North business segment, we first gauge contribution margin which is subtracting the variable expenses from sales revenues. Thus, the contribution margin for North is $587,000 (sales revenues) - $340,600 (variable expenses) = $246,400. Next, we subtract traceable fixed expenses from this to arrive at the segment margin. The segment margin would, therefore, be $246,400 - $70,200 (traceable fixed expenses) = $176,200. Hence, the segment margin for the North segment under a contribution formatted segmented income statement is $176,200.
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Financial accounting: Multiple Choice Provides information primarily for external decision makers. Provides information primarily for a company's employees. Provides information primarily for the use of managers of the company. Is primarily used to compute a company's tax obligation. g
Answer:
The correct answer is letter "A": Provides information primarily for external decision makers.
Explanation:
Financial Accounting is the method of gathering, recording, summarizing and publishing financial data on a company that is useful to investors and creditors. The ultimate goal is to accurately report a business' financial picture and results at a given point in time and over a specified period.
Financial accounting output is a financial report containing different statements and explanatory notes.
Widmer Watercraft’s predetermined overhead rate for the year 2017 is 200% of direct labor. Information on the company’s production activities during May 2017 follows. Purchased raw materials on credit, $220,000. Materials requisitions record use of the following materials for the month. Job 136 $ 50,000 Job 137 33,000 Job 138 19,400 Job 139 23,200 Job 140 7,200 Total direct materials 132,800 Indirect materials 20,500 Total materials used $ 153,300 Paid $15,500 cash to a computer consultant to reprogram factory equipment. Time tickets record use of the following labor for the month. These wages were paid in cash. Job 136 $ 12,100 Job 137 10,500 Job 138 37,500 Job 139 39,200 Job 140 3,200 Total direct labor 102,500 Indirect labor 25,500 Total $ 128,000 Applied overhead to Jobs 136, 138, and 139. Transferred Jobs 136, 138, and 139 to Finished Goods. Sold Jobs 136 and 138 on credit at a total price of $525,000. The company incurred the following overhead costs during the month (credit Prepaid Insurance for expired factory insurance). Depreciation of factory building $ 68,000 Depreciation of factory equipment 36,500 Expired factory insurance 12,000 Accrued property taxes payable 35,000 Applied overhead at month-end to the Work in Process Inventory account (Jobs 137 and 140) using the predetermined overhead rate of 200% of direct labor cost. Required: 1. Prepare a job cost sheet for each job worked on during the month.
Job cost sheets for Widmer Watercraft's May 2017 production activities were prepared, accounting for materials, labor, and overhead (200% of labor cost) for each job handled in the month.
Explanation:The preparation of job cost sheets plays a vital role in accounting and financial tasks, specifically in cost accounting where it allows companies to estimate the costs associated with each job. Below are the job cost sheets you asked for:
Job 136
Materials: $50,000Labor: $12,100Overhead: $24,200 (200% of $12,100)
Job 137
Materials: $33,000Labor: $10,500Overhead: $21,000 (200% of $10,500)
Job 138
Materials: $19,400Labor: $37,500Overhead: $75,000 (200% of $37,500)
Job 139
Materials: $23,200Labor: $39,200Overhead: $78,400 (200% of $39,200)
Job 140
Materials: $7,200Labor: $3,200Overhead: $6,400 (200% of $3,200)Learn more about Job Cost Sheet here:
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Each job cost sheet outlines the direct materials, direct labor, and applied overhead costs incurred for each respective job during May 2017. Direct materials and labor costs are recorded based on actual expenditures, while applied overhead is calculated at 200% of direct labor cost, as per the predetermined overhead rate. Total costs for each job are calculated by summing up the direct materials, direct labor, and applied overhead costs.
Explanation:Job Cost Sheets for each job worked on during May 2017 are as follows:
Job 136:
Direct Materials: $50,000
Direct Labor: $12,100
Applied Overhead (200% of direct labor): $24,200
Total Cost: $86,300
Job 137:
Direct Materials: $33,000
Direct Labor: $10,500
Applied Overhead (200% of direct labor): $21,000
Total Cost: $64,500
Job 138:
Direct Materials: $19,400
Direct Labor: $37,500
Applied Overhead (200% of direct labor): $75,000
Total Cost: $131,900
Job 139:
Direct Materials: $23,200
Direct Labor: $39,200
Applied Overhead (200% of direct labor): $78,400
Total Cost: $140,800
Job 140:
Direct Materials: $7,200
Direct Labor: $3,200
Applied Overhead (200% of direct labor): $6,400
Total Cost: $16,800
A manufacturing facility consists of eight departments (A, B, C, D, E, F, G, and H) and is to produce six components (1, 2, 3, 4, 5, and 6). Following are the product routings and production forecasts: Component Routing Production Forecast (E.U.L. per week)
1 A-B-G-H 20
2 A-C-D-H 25
3 A-D-E-F-H 20
4 A-B-C-E-H 30
5 A-B-C-D-H 15
6 A-E-F-G-H 5
a) Develop the FROM-TO chart [20]
b) Develop the VOLUME-BETWEEN chart [20]
Answer:
The answer is given in the attached file.
Explanation:
Suppose a loan of $38,000 is taken out with an annual interest rate of 8.125%, with interest compounded semiannually. If equal payments are also made semiannually, find the amount of each payment needed to amortize (pay off) the loan in 13 years.
Answer:
$2,393.78
Explanation:
In this question we use the PMT formula that is shown in the attachment below:
Data provided in the question
Present value = $38,000
Future value = $0
Rate of interest = 8.125% ÷ 2 = 4.0625%
NPER = 13 years × 2 = 26 years
The formula is shown below:
= PMT(Rate;NPER;-PV;FV;type)
The present value come in negative
So, after solving this, the amount of each payment is $2,393.78
The Best Manufacturing Company is considering a new investment. Financial projections for the investment are tabulated here. The corporate tax rate is 40 percent. Assume all sales revenue is received in cash, all operating costs and income taxes are paid in cash, and all cash flows occur at the end of the year. All net working capital is recovered at the end of the project.
Year 0 Year 1 Year 2 Year 3 Year 4
Investment $ 43,000
Sales revenue $ 22,000 $ 22,500 $ 23,000 $ 20,000
Operating costs 4,600 4,700 4,800 4,000
Depreciation 10,750 10,750 10,750 10,750
Net working capital spending 490 540 590 490 ?
Compute the incremental net income of the investment for each year. (Do not round intermediate calculations.)
Year 1 Year 2 Year 3 Year 4
Net income $ $ $ $
b.
Compute the incremental cash flows of the investment for each year. (Do not round intermediate calculations. Negative amounts should be indicated by a minus sign.)
Year 0 Year 1 Year 2 Year 3 Year 4
Cash flow $ $ $ $ $
c.
Suppose the appropriate discount rate is 11 percent. What is the NPV of the project? (Do not round intermediate calculations and round your final answer to 2 decimal places. (e.g., 32.16))
NPV $
Answer:
The solution is presented in the attached excel sheets.
Explanation:
Part a
For the first part the for the calculation of increment, the income is calculated as follows
The income is calculated using following
Gross Income=Sales Revenue-Operating Cost-Depreciation
Net Income is given as Gross Income-Tax Rate *Gross Income
Now the increment is given by finding the difference between two year's income.
Part b
The incremental cash flow is calculated as indicated in the attached sheet.
Part c
The present value at 11 percent is calculated as using the formula indicated in the attached sheets.
To evaluate the financial projections of the investment, we first determine the incremental net income for each year, then calculate the incremental cash flows, and lastly compute the Net Present Value (NPV) of these cash flows based on a discount rate of 11%.
Explanation:The first step is to calculate the incremental net income for each year. This is done by subtracting both the operating costs and the depreciation from the sales revenue and then deducting 40% tax. For example, in Year 1, this would look like: (22,000 - 4,600 - 10,750) * (1 - 0.4) = $4080.
Then we can calculate incremental cash flows. This means adding back the depreciation to the net income calculated in the first step, and considering changes in working capital. The calculation for Year 1 is: 4080 + 10750 - (540-490) = $14,790. Cash flow in Year 0 is -43000 because it's the investment year.
Finally, we calculate the Net Present Value (NPV). This involves the sum of present value of each year's cash flow, discounted at a rate of 11%. NPV is calculated as follows: (-43000/(1+11%)^0) + (14790/(1+11%)^1) + [similar terms for the subsequent years].
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Applying activity-based costing LO P1, P3, A1, A2, C3 [The following information applies to the questions displayed below.] Craft Pro Machining produces machine tools for the construction industry. The following details about overhead costs were taken from its company records. Production Activity Indirect Labor Indirect Materials Other Overhead Grinding $ 320,000 Polishing $ 135,000 Product modification 600,000 Providing power $ 255,000 System calibration 500,000 Additional information on the drivers for its production activities follows. Grinding 13,000 machine hours Polishing 13,000 machine hours Product modification 1,500 engineering hours Providing power 17,000 direct labor hours System calibration 400 batches Job 3175 Job 4286 Number of units 200 units 2,500 units Machine hours 550 MH 5,500 MH Engineering hours 26 eng.hours 32 eng.hours Batches 30 batches 90 batches Direct labor hours 500 DLH 4,375 DLH. Compute the activity overhead rates using ABC. Form cost pools as appropriate. Determine overhead costs to assign to the following jobs using ABC. What is the overhead cost per unit for Job 3175? What is the overhead cost per unit for Job 4286?
Answer:
Craft Pro Machining
Activity Rate= Activity Cos/ Cost Driver
Production Activities Cost Drivers Activity Rate
Grinding $ 320,000 13,000 machine hours 24.615per machine hour
Polishing $ 135,000 13,000 machine hours 10.38 per ,machine hour
Product modification 600,000 1,500 engineering hours 400 per eng. hour
Providing power $ 255,000 17,000 direct labor hours 15 per DLH
System calibration 500,000 400 batches 1250 per batch
Working:
Job 3175 Job 4286
Number of units 200 units 2,500 units
Machine hours 550 MH 5,500 MH
Engineering hours 26 eng.hours 32 eng.hours
Batches 30 batches 90 batches
Direct labor hours 500 DLH 4,375 DLH
Job 3175 Job 4286
Number of units 200 units 2,500 units
Grinding & Polishing 19247.25 192472.5
Product modification 10400 12800
System calibration 37500 112500
Providing power 7500 65625
Total Costs $ 74,647.25 $ 383,397.5
The overhead cost per unit for Job 3175 = $ 74,647.25 /200=$ 373.24
The overhead cost per unit for Job 4286= $ 383,397.5/2,500= $ 153.36
If a $150,000 balance in Deferred Tax Liability was computed by use of a 30% rate, the underlying cumulative temporary difference amounts to
Answer:
$105,000
Explanation:
Given:
Balance in deferred tax liabilities = $150,000
Rate of computing deferred tax liabilities = 30% = [tex]\frac{30}{100}[/tex] = 0.30
Cumulative temporary difference = ?
Computation of Cumulative temporary difference:
Temporary difference = Balance in deferred tax liabilities - (Balance in deferred tax liabilities × Tax rate)
= $150,000 - ($150,000 × 0.30)
= $150,000 - $45,000
= 105,000