Answer:
Margin of safety as a percentage of sales=0.25=25%
Option C is correct (25%)
Explanation:
Given Data:
Sale price per unit=$280
Current Sales=13,900 units
Break Even sales=10,425 units
Required:
Margin of safety as a percentage of sales=?
Solution:
Margin of safety in Dollars= Total Current Sales- Break even sales
Total Current sales=Sale price per unit*Current Sales
Total Current sales=$280*13,900
Total Current sales=$3,892,000
Break Even Sales=$280*10,425
Break Even Sales=$2,919,000
Margin of safety in Dollars= $3,892,000-$2,919,000
Margin of safety in Dollars= $973,000
Margin of safety as a percentage of sales=[tex]\frac{Margin\ of\ safety\ in\ Dollars}{Total\ current\ Sales}[/tex]
Margin of safety as a percentage of sales=[tex]\frac{\$973,000}{\$3,892,000}[/tex]
Margin of safety as a percentage of sales=0.25=25%
Option C is correct (25%)
Bradley's Copiers sells and repairs photocopy machines. The manager needs weekly forecasts of service calls so that he can schedule service personnel. Use the actual demand in the first period for the forecast for the first week so error measurement begins in the second week. The manager uses exponential smoothing with alpha = 0.5. Forecast the number of calls for week 6, which is next week. Week Actual Service Calls 1 26 2 32 3 40 4 27 5 30
Answer:
Explanation:
exponential smoothing alpha = 0.5
formula = Previous demand x Alpha + previous forecast x (1 - alpha)
26 32 40 27 30
26 26 29 34.5 30.75
week 2 forecast
26x0.5 + 26x0.5 = 26.
week 3 forecast
32x0.5 + 26x0.5 = 29
use the same procedure for week 4 and week 5
week 6
30x0.5 + 30.75x0.5 = 30.375
Demand Forecast for week 6 = 30.38
Pro Corp., a U.S.-based MNC, uses purchasing power parity to forecast the value of the Thai baht (THB), which has a current exchange rate of $o.o22. Inflation in the United States is expected to be scenario, Pro Corp. would forecast the value of the baht at the end of the year to be:
a. $0.023.
b. $0.021
c. $0.020.
d. None of the above
Answer:
Option "B" is the correct answer to the following statement.
Explanation:
Given:
Exchange rate of 1 Baht= $0.022
Expected inflation in united states (Assume) = 3% = 0.03
Expected inflation in Thailand (Assume) = 10% = 0.10
Computation:
After 1 year rate of 1 Baht in Dollar
The price in US = 1 × (1+0.03) = $1.03
The price in Thailand = 1 × (1+0.10) = 1.10 baht
1 baht = 1.03×0.022÷1.1 = $0.0206
Therefore, 1 baht = $0.21 (approx)
Bloom Company management predicts that it will incur fixed costs of $160,000 and earn pretax income of $164,000 in the next period. Its expected contribution margin ratio is 25%. Required: 1. Compute the amount of total dollar sales. 2. Compute the amount of total variable costs.
Answer:
1. $1,296,000
2. $972,000
Explanation:
Pretax income is the difference between the total sales and the total expenses. The total expense is made up of the fixed cost and variable cost. The variable cost is dependent on the level of activities. Contribution margin is the net of total sales and total variable cost. The ratio is the ratio of contribution margin to sales.
As such, contribution less fixed cost gives the pretax income.
Contribution margin = $164,000 + $160,000
= $324,000
25% = $324,000/total sales
Total sales = $1,296,000
Total variable costs = $1,296,000 - $324,000
= $972,000
Wildhorse Company has the following information available for September 2020. Unit selling price of video game consoles $570 Unit variable costs $456 Total fixed costs $38,760 Units sold 600 Compute the unit contribution margin. Unit contribution margin Prepare a CVP income statement that shows both total and per unit amounts. WILDHORSE COMPANY CVP Income Statement For the Month Ended September 30, 2020 Total Per Unit $ $ $ $ Compute Wildhorse’ break-even point in units. Break-even point in units units Prepare a CVP income statement for the break-even point that shows both total and per unit amounts. WILDHORSE COMPANY CVP Income Statement For the Month Ended September 30, 2020 Total Per Unit $ $ $ $ Click if you would like to Show Work for this question: Open Show Work
Answer:
BEP 340 units or $193,800 of sales
Income Statment :
Sales revenue 340 units x $570 193,800
Variable Cost 340 units x $456 (155,040)
Contribution 38,760
Fixed cost (38,760)
Operating Income 0
Explanation:
The break even points is the point at whch operating income is zero.
[tex]Sales \: Revenue - Variable \: Cost = Contribution \: Margin[/tex]
570 - 456 = 114 each units generates 114 dollar to aford the fixed cost and make a gain
[tex]\frac{Fixed\:Cost}{Contribution \:Margin} = Break\: Even\: Point_{units}[/tex]
[tex]\frac{38,760}{114} = Break\: Even\: Point_{units}[/tex]
BEP 340 units
In dollars 340 x $570 each = 193,800
Answer:please refer to the explanation section
Explanation:
Unit contribution Margin = selling price per unit - Variable cost per unit
Unit contribution Margin = $ 570 - $ 456 = $ 114
Cost Volume Profit income statement
VOLUME UNIT COST ($) TOTAL ($)
Sales 600 units $570 342000
Variable costs 600 units $ 456 -273600
Contribution margin 600 units $114 68400
Total Fixed Costs -38760
Net income 29640
Break Even Point (units) = Fixed Costs/(Selling price - variable cost)
Break Even Point (units) = 38760/(570 - 456) = 340 units
Variable Costing: Compare and contrast variable costing with absorption costing, highlighting the differences between operating income. Discuss the use of variable costing for decision making in a manufacturing company and a service company.
Answer:
Differences among Absorption and Variable Costing:
In Absorption costing item cost is higher than the cost determined under factor costing. Variable costing changes just direct cost (material, work, overhead) into cost of an item though Absorption Costing Charges all the assembling costs into cost of item. In factor costing benefit of Closing Inventory is lower than an incentive under Absorption Costing. In factor costing fixed assembling costs are considered as occasional expenses and charged from the Gross Profit though in Absorption it has taken in item cost just as shutting Inventory. In factor costing fixed assembling costs are not charged to Inventory.Contrasts in overall gain happens because of distinction in treatment of fixed overhead under over two costing draws near.
Preferences of variable costing in dynamic:-
Under factor costing commitment edge Income Statement give significant data (s) to the Managers. It is valuable in inward dynamic and increasingly compelling in cost-volume-benefit (CVP) examination. It empowers to distinguish CM Ratio, BEP in units and dollar, target benefit focuses and in affectability examination. It aware and helps the administration in taking choice identified with increment the creation for increment in benefits, use of overabundance limit or to meet stockpile of extra requests. It likewise prompts in purchase or decide.Ford Motor Company has issued 8% convertible debentures, convertible at a 25:1 ratio. Currently the debenture is trading at 110. The stock is trading at 38. What is the conversion price of the stock?
25
38
44
40
Answer:
Conversion price of the stock = 40
so correct option is (d) 40
Explanation:
given data
convertible ratio = 25:1
convertible debentures = 8%
stock is trading = 38
debenture trading = 110
solution
we get here Conversion price of the stock that is express as
Conversion price of the stock = Par value of the bond ÷ Conversion ratio ............1
Conversion price is price paid per equity share to acquire it through conversion
and Conversion ratio is 25 shares per bond if converted
put here value and we get
Conversion price of the stock = [tex]\frac{1000}{25}[/tex]
Conversion price of the stock = 40
so correct option is (d) 40
The variance of an investment's returns is a measure of the:
A. probability of a negative return.
B. historic return over long time periods.
C. average value of the investment.
D. volatility of the rates of return.
Answer:
B. historic return over long time periods.
Explanation:
Variance is a metric applied in statistics to determine the squared deviation of a random variable from its mean value.
The variance of a return of investment is a measure of the historic return over large time periods. The historical return approach is more commonly used in the exercise of investing. It follows the data which is a finite set of historical returns of investment and assumes that each possible result has an equal probability.
Journalizing reversing entries
Ocean Breeze Associates accrued $8,500 of Service Revenue on December 31. Ocean Breeze Associates received $14,500 on January 15, including the accrued revenue recorded on December 31.
Requirements
Record the adjusting entry to accrue Service Revenue.
Record the reversing entry.
Journalize the cash receipt.
Answer:
Dr. Cr.
Adjusting Entry
December 31
Account Receivable $8,500
Revenue $8,500
Reversing Entry
January 1
Revenue $8,500
Account Receivable $8,500
Cash Receipt
January 15
Cash $14,500
Revenue $14,500
Explanation:
On December 31 the accrued revenue is recording to comply with the accrual principle by debiting account receivable and crediting revenue account.
A reverse entry of accrued revenue was made on January 1 to eliminate its effect. it does not mean that company has negative revenue it is made to adjust the the cash receipt event of the transaction when its effect will be nil by a credit entry with.
Cash received on January 15 is recorded against the revenue.
To journalize reversing entries for Ocean Breeze Associates, an adjusting entry is first made on December 31 to record the accrued revenue of $8,500. Then, a reversing entry is made on January 1st to cancel this. Lastly, on January 15, when the cash is received, it's divided and recorded between Accounts Receivable for $8,500 and Service Revenue for $6,000.
Explanation:Here are the steps for journalizing reversing entries for Ocean Breeze Associates:
Record the adjusting entry to accrue Service Revenue: At the end of December 31, the accrued revenue of $8,500 from services is recorded with a debit to Accounts Receivable and a credit to Service Revenue.Record the reversing entry: On January 1st, a reversing entry is made to cancel out the accrual entry. This is done by debiting Service Revenue and crediting Accounts Receivable.Journalize the cash receipt: On January 15, when Ocean Breeze Associates receives $14,500 including the accrued revenue, it is recorded as a debit to Cash and a credit to Accounts Receivable for $8,500 (the accrued amount) and to Service Revenue for $6,000 (the rest of the amount).Learn more about Journalizing reversing entries here:https://brainly.com/question/32462928
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Given the list of assets below, which is the most liquid? $500 worth of General Motors common stock A $500 travelers check A one-ounce gold coin $500 worth of General Motors bonds
Answer:
A $500 travelers check
Explanation:
A $500 travelers check is the most liquid asset because it can be directly exchanged for currency. In fact, travelers checks are so liquid that they are included in the money aggregate M1, the money supply measure that is the most liquid.
A mine is for sale for $800,000. It is believed the mine will produce a profit of $250,000 the first year, but the profit will decline $25,000 a year after that, eventually reaching zero, whereupon the mine will be worthless. What rate of return would be earned on the mine
Answer:
[tex]r=-60.8\%[/tex]
Explanation:
Rate of Return
The rate of return RoR is the net gain or loss on an investment over a time period, expressed as a percentage of the investment's initial cost.
If C1, C2, ..., Cn are the net cash flows at each period of investment, then the actual value of each one of them is
[tex]A_i=C_i(1+r)^{-i}[/tex]
where r is the rate of interest assumed for the investment.
The total value of the cash flows is
[tex]A=\sum C_i(1+r)^{-i}[/tex]
We have the final value of the investment at the present time
[tex]A=800,000\ ;\ C_1=250,000\ ;\ C_2=25,000[/tex]
We can find the r as the RoR of the investment by setting the equation
[tex]800,000=250,000(1+r)^{-1}+25,000(1+r)^{-2}[/tex]
Simplifying by 25,000 and rearranging
[tex](1+r)^{-2}+10(1+r)^{-1}-32=0[/tex]
This is a second-degree equation for [tex](1+r)^{-1}[/tex]. Solving the equation we get only one positive value:
[tex](1+r)^{-1}=2.5498[/tex]
Or, equivalently
[tex]r=-0.608[/tex]
[tex]r=-60.8\%[/tex]
We get a negative RoR
If TOMS decided to enter the tea business and they purchased part of a foreign tea company to join with them to found TOMS Teas, this would be an example of __________
If TOMS decided to enter the tea business and they purchased part of a foreign tea company to join with them to found TOMS Teas, this would be an example of __________.
a. direct foreign investment
b. contract manufacturing
c. a joint venture
Answer:
This would be an example of a joint venture.
Explanation:
A joint venture (JV) is a corporate agreement in which two or more organisations agree to share money to carry out a specific mission. This role can be a new project or a new enterprise.
Each of the partners shall be liable in a joint venture (JV) for benefit, loss and related costs. The corporation is therefore its own organisation, independent from other corporate interests of the members.
These are alliances, which can carry on some formal system in a conversational context.
The common usage of JVs is to join a global industry partner with such a local company.
This is an example of a joint venture, where TOMS and a foreign tea company are pooling resources to create and distribute TOMS Teas.
Explanation:If the shoe company TOMS decided to enter the tea business and purchased part of a foreign tea company to join with them to launch TOMS Teas, this would be an example of a joint venture. A joint venture is a business arrangement in which two or more parties agree to pool their resources for the purpose of accomplishing a specific task or project. In this case, the specific task would be creating and distributing TOMS Teas. This concept is common in international business and allows for risk sharing, access to local market knowledge, and shared resources and technology.
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A manufacturer estimates that its product can be produced at a total cost of C(x) = 50,000 + 100x + x3 dollars. If the manufacturer's total revenue from the sale of x units is R(x) = 3400x dollars, determine the level of production x that will maximize the profit. (Round your answer to the nearest whole number.)
Answer:
The level of production x that will maximize the profit is: 22,966
Explanation:
C(x) = 50,000 + 100x + x³
R(x) = 3400x
P(x) = R(x) - C(x)
= 3400x - [50,000 + 100x + x³]
= 3400x - 50,000 - 100x - x³
= 3300x - 50,000 - x³ .................... (A)
P'(x) = 3300(1) - 0 - 3x²
= 3300 - 3x²
At a critical point, P'(x) = 0
∴ 0 = 3300 - 3x²
3x² = 3300
x² = 1100
x = ± [tex]\sqrt{1100}[/tex]
P"(x) = -6x
P([tex]\sqrt{1100}[/tex]) = -6 ([tex]\sqrt{1100}[/tex]) < 0
by second derivative, 'P' max at x = [tex]\sqrt{1100}[/tex] = 33.17 (rounds)
since x = [tex]\sqrt{1100}[/tex] ,
recall that P(x) = 3300x - 50,000 - x³ from equation (A)
Therefore, Maximum Profit
P([tex]\sqrt{1100}[/tex]) = 3300[tex]\sqrt{1100}[/tex] - 50000 - [tex]\sqrt{1100} ^{3}[/tex]
= 3300(33.17) - 50,000 - 33.17³
= 109461 -50,000 - 36495.26
= 22,965.74
Maximum profit is 22,966 to the nearest whole number
To find the level of production x that maximizes profit, calculate the profit function by subtracting total cost (C(x)) from total revenue (R(x)). Then, find the value of x that makes marginal revenue equal to marginal cost. This requires knowledge of calculus to differentiate the profit function.
Explanation:To determine the level of production x that will maximize the profit, we first need to calculate the profit function which is the total revenue (R(x)) minus the total cost (C(x)). In this case, the Profit function P(x) is equal to R(x) - C(x) = 3400x - (50,000 + 100x + x3).
Then, to find the level of output that maximizes profit, you would typically differentiate this profit function, set the derivative equal to zero, and then solve for x. This involves calculus, which might not be within the scope of your current studies.
Without using calculus, it is hard to pinpoint the exact value of x that maximizes the profit. However, it is possible to say that the profit-maximizing level of output will occur when marginal revenue (the additional revenue from selling one more unit) equals marginal cost (the additional cost of producing one more unit), which is a fundamental principle in economics. So, you would try to find an x such that the increase in 3400x from increasing x by 1 is equal to the increase in (50,000 + 100x + x3) from increasing x by 1.
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Expected return and standard deviation:
a. Johnson & Johnson (JNJ) is trading at 123.64 (5/12/2017 close). JNJ is a large health care conglomerate. It has done well over the last couple of years and you think it will continue to do well. After careful analysis you conclude that in one year the price will be (90, 105, 125, 155, 175) with associated probabilities of (0.1, 0.2, 0.4, 0.2, 0.1). Looking at the company’s past record you project that JNJ will pay a dividend of 3.40 (four quarterly dividends of 0.85).
(i) What is the expected return of JNJ stock?
(ii) Calculate the standard deviation of the return of JNJ stock (remember that you are using probabilities to do this, not historical data).
b. In the second sheet of the Excel file PS4 you will find historical data for IBM and CVX returns. (i) Calculate the sample expected return and sample standard deviation for both. (ii) What is the standard error of the sample average in each case? What is the +/- 2 standard error confidence interval of the sample average?
Answer:
Expected Return:
Expected Price in one year
= (90x 0.10)+ (105x 0.20)+ (125x 0.40)+ (155x 0.20)+ (175x 0.10)
= 128.5 Expected dividends in one year
= 3.40
Expected Return = 123.64 Expected Return=[ (Expected Price + Expected Dividends)] / Current Price= >[ (128.50 + 3.40)–123.64]/123.64= 0.066806859 or 6.68%
Standard Deviation: To measure the volatility, the estimated return must be determined with each price point.
Expected return = = [(Expected Price + Expected dividends) – Current Price] / Current Price
Current Price Expected Price Dividend Expected Return
123.64 90 3.4 -24.46%
123.64 105 3.4 -12.33%
123.64 125 3.4 3.85%
123.64 155 3.4 28.11%
123.64 175 3.4 44.29%
Variance = [(-0.2446 – 0.0668)^2 x 0.10] + [(-0.1233 – 0.0668)^2 x 0.20] + [(0.0385 – 0.0668)^2 x 0.40] + [(0.2811 – 0.0668)^2 x 0.20] + [(0.4429 – 0.0668)^2 x 0.10] = 0.040574089
Standard Deviation = (0.040574089)1/2 = 0.20143011 or 20.14%
Explanation:
You are planning for your retirement and want to have $1,500,000 by the time you retire 45 years from today. You also want to have $250,000 in 20 years to help fund your children's college education. What annual end of the year deposit would you have to make for 45 years into an account paying 8% compounded annually to meet your future goals?
A. 4,528
B. $3,881
C. $6,906
D. $8,311
Answer:
The correct option is D. $8,311
Explanation:
The steps to reach the deposit ammount of $8,311 are the following:
1) Calculate Future Value of cash flow= 250,000×(1+0.08)∧25=1,712,118.80
2) Calculate the total ammunt to be accumulated by the end of year 45
=1,712,118.80+1,500,000=3,212,118,80
3) Finally you have to calculate the annual deposit to achieve the 3,212,118,80 in 45 years
FV= 3,212,118,80
r=8%
n=45
3,212,118.80= P( (1+0.08)∧45-1 )
0.08
= 8,311. Annual end of the year deposit
The initial equilibrium price in the market for Web pages is $200 per page and 1 created in a month. Many new Web design firms now enter the market. As a result, leftward and the price falls.
A) the supply curve of Web pages shifts l
B) the supply of Web pages increases and the price falls,
C) the supply of web pages increase and the price falls, which then increases the demand for Web pages and the demand curve shifts rightward.
D) the demand for Web pages increases and the price rises.
E) the demand for Web pages increases and the price falls.
Answer:
B) the supply of Web pages increases and the price falls.
Explanation:
The equillibrum price is where demand intersects supply, that is the price at which consumer is willing to buy is the same as the price seller is willing to sell.
If there was only 1 web page created per month at $200, and now more web design firms enter the market. The supply of web pages will increase from 1, as all the companies will want to present their product.
This results in excess supply and will cause price to fall as is illustrated in the attached diagram. As seen the equillibrum price reduces from P1 to P2.
Answer:
The supply of web pages increase and the price falls, which then increases the demand for web pages and the demand curve shifts rightward ( C )
Explanation:
If the equilibrium price of a web page is $200 when fewer web design firms are producing the web pages. the number of web pages will increase when more web design firms enter the market.
As more design firms go into producing more web pages the supply of web pages will be increase and this will lead to lower equilibrium price for the web pages in the market. based on this market factors the demand will increase because buyers would buy more when prices of goods and services fall. the increase in demand will be represented with the demand curve shifting to the right.
Debbie keeps a close eye on her company’s internal and external environment to discover possible opportunities for new products and to discern possible threats from the competition. In which activity is Debbie engaged?
Answer:
The activity Debbie is engaged in is Environmental scanning.
Explanation:
The method of collecting data about the peripheral marketing environment to identify and understand marketing trends is known as environmental scanning. This process involves continuous monitoring of the organization to detect the occurrences of opportunities and threats caused by the internal and external environment.
Environmental scanning identifies and prevents the organization from threats so that her present and future plans doesn't get terminated.
Thus, the activity Debbie is engaged in is Environmental scanning.
Answer: Environmental scanning
Explanation: Debbie is engaged in environmental scanning which is defined as a process of collecting data and information about external and internal events that impacts organization's environments. These factors help determine the decisions a business makes; the future direction of the business and they include: competition, economics, technology, legal issues, and social/demographic factors, market research studies etc.
Dan invested $100,000 to start a company and received 1,000,000 shares of Series A common stock. Since then, the company has been through three additional funding rounds of financing:
Round Price Per Share Number of Shares
Series B $0.75 500,000
Series C $1.25 300,000
Series D $3.50 200,000
Let X be the pre-money valuation for the Series D funding round, Y be the post-money valuation for the Series D funding round, and Z be the percentage of the firm that Dan owns after the last funding round.
Determine X, Y, and Z.
Answer:
X = $6,300,000
Y = $7,000,000
Z = 10%
Explanation:
NB: Investment = Price * Number of shares
For Series A:
Number of shares = 1,000,000
Price = Number of shares/Initial Investment
Price = 1,000,000/100,000 = 10
Investment = 1,000,000 * 10 = $10,000,000
For Series B
Price = $0.75
Number of shares = 500,000
Investment = 500,000 * 0.75 = $375,000
For Series C
Price = $1.25
Number of shares = 300,000
Investment = 300,000 * 1.25 = $375,000
For Series D
Price = $3.50
Number of shares = 200, 000
Investment = 3.50 * 200,000 = $700,000
Total shares = 1,000,000 + 500,000 + 300,000 + 200,000 = 2,000,000
Y = Post-money valuation for the series D funding round
Y = Series D investment * (total post investment share)/(Shares issued for series D)
Y = 700,000 * (2,000,000)/(200,000) = $7,000,000
Y = $7,000,000
X = Pre-money valuation for the series D
X = Post-money valuation - New Investment (Series D)
X = $7,000,000 - $700,000
X = $6,300,000
Z = Percentage of the firm that Dan owns after the last funding round
Z = (Number of shares of series D/ Total number of shares)*100%
Z = (200,000/2,000,000)*100%
Z = 10%
Candy Canes Inc. spends $100,000 to buy sugar and peppermint in April. It produces its candy and sells it to distributors in May for $150,000, but it does not receive payment until June. For each month, find the firm’s sales, net income, and net cash flow.
Answer:
April,
Sales is zero Net income is zeroNet cash flow is an outflow of $100,000 (used in the purchase of raw materials)May,
Sales is $150,000Net income is $500,00Net cash flow is zeroAnd in June;
Sales is zero Net income is zeroNet cash flow is an inflow of $150,000 (amount received from customers)Explanation:
In April, the company purchased raw materials (Sugar and Peppermint) for $100,000. The entries posted are debit to Inventories and Credit to Cash account (both amounting to $100,000 each).
As such in April,
Sales is zero Net income is zeroNet cash flow is an outflow of $100,000 (used in the purchase of raw materials)It produces its candy and sells it to distributors in May for $150,000, but it does not receive payment until June.
When the sale is made in May, the entries required is Debit accounts receivables $150,000 and Credit Sales revenue $150,000. Also, Debit cost of goods sold $100,000 and Credit Inventories $100,000.
Net income is the difference between sales and cost of sales.
As such in May,
Sales is $150,000Net income is $500,00Net cash flow is zeroFor June,
Payment for goods sold in May were received, entries posted are debit to cash account and a credit to accounts receivables (both balance sheet accounts), hence;
Sales is zero Net income is zeroNet cash flow is an inflow of $150,000 (amount received from customers)Candy Canes Inc. incurred expenses in April with no sales, resulting in zero for all values. In May, they made sales but received no money, resulting in positive net income but negative cash flow. In June, they received the payment, resulting in positive cash flow but no change in net income.
Explanation:In April, Candy Canes Inc.'s sales, net income, and net cash flow are all zero because no sales were made, though the company did spend $100,000 on sugar and peppermint.
In May, the firm's sales amounted to $150,000. The net income was $50,000 (which is $150,000 in sales subtracting the $100,000 in expenses). However, the net cash flow was -$100,000 because payment was not received in May, and the company spent $100,000 in April.
In June, there were no new sales or expenditure, but because Candy Canes Inc. received payment for the May sales, its net cash flow was $150,000, while the net income remained zero.
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common stock for $12,900 (Coronado does not have significant influence). During the year, Sherman paid a cash dividend of $3.25 per share. Assume the stock is nonmarketable.Prepare Coronado’s journal entries to record (a) the purchase of the investment, (b) the dividends received, and (c) the fair value adjustment. (Assume a zero balance in the Fair Value Adjustment account.)
Answer:
Detailed solution is given below:
Journal entries are the entries that record the transaction of the company that depicts the inflow and outflow of the cash in the firm. The transactions that come in the firm are termed as the debit and which goes out is credit.
A journal entry is an act of reporting or tracking the progress of any monetary or quasi activity. An accounting journal method utilizes & displays a company's debit and credit amounts. Every recording in the journal entry can be either a deduction or addition.
The Journal entries have been attached below.
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Gina Fox has started her own company, Foxy Shirts, which manufactures imprinted shirts for special oc- casions. Since she has just begun this operation, she rents the equipment from a local printing shop when necessary. The cost of using the equipment is $350. The materials used in one shirt cost $8, and Gina can sell these for $15 each. (a) If Gina sells 20 shirts, what will her total rev- enue be
Answer:
The question is not complete, the complete question is written below:
Gina Fox has started her own company, Foxy Shirts, which manufactures imprinted shirts for special occasions. Since she has just begun this operation, she rents the equipment from a local printing shop when necessary. The cost of using the equipment is $350. The materials used in one shirt cost $8, and Gina can sell these for $15 each.
(a) If Gina sells 20 shirts, what will her total revenue be? What will her total variable cost be?
(b) How many shirts must Gina sell to break even?
What is the total revenue for this?
The answers are:
a.) Total Revenue = $300; Total variable cost = $160
b.) Break even number of shirts to be sold = 34 shirts; Total revenue for this = $510
Explanation:
a.) Total revenue is the total amount realized after the sales of 15 shirts. To calculate this, we are told that she sold 20 shirts for $15 each, therefore total revenue = Number of shirts sold × price of one shirt
∴ Total revenue = 20 × 15 = $300.
The variable cost of production is the cost that changes with the volume of products produced. In this example, the variable cost is the cost of materials used in making shirts, while the rent on equipment is the fixed cost, because its price remains the same irrespective of the volume of production. To calculate the total variable cost, we will multiply the variable cost of one shirt, with the total number of shirts produced;
cost of 1 shirt = $8
∴ cost of 20 shirts = 8 × 20 = $160
b.) The break even point is the point where the total cost equals total revenue. In order to calculate this, we will first of all calculate the total cost, which includes both the variable and fixed costs.
Total cost: Total fixed cost + Total variable cost
Total fixed cost = $350 (cost of renting equipment)
Total variable cost = 8 × 20 = $160 (calculated above)
∴ Total fixed cost + Total variable cost = 350 + 160 = $510
Therefore, to break even, the total revenue must also equal this cost price of $510. Now to calculate the number of shirts sold that equals this amount;
$15 = 1 shirt
∴ $510 = 1/15 × 510 = [tex]\frac{510}{15} = 34[/tex]
Therefore when 34 shirts are sold, total revenue = total cost.
Total revenue for 34 shirts = $510 (calculated and explained above).
Tracy consumes dress shoes (D) and casual Crocs (C). Her marginal utility from consuming casual Crocs is MU Subscript Upper CMUCequals=20DC and her marginal utility from consuming dress shoes is MU Subscript Upper DMUDequals=10Upper C squaredC2. Her annual shoe allowance is $450450, which she spends on only dress shoes and Crocs. If she pays $5050 for a pair of dress shoes and $2525 for a pair of Crocs, what is her optimal consumption bundle?
Answer:
The optimal bundle is 6 pairs of dress shoes and 3 pairs of Crocs.
Explanation:
From the question,
Allowance (M) = $450; Price of dress shoes, Pd = $50; Price of crocs, Pc = $50
Note: MRS-price ratio, MUC- marginal utility from consuming casual Crocs ,MUD- marginal utility from consuming dress shoes
Optimal bundle is determined where MRS = Price ratio
MRS = MUC/MUD = 20DC/10C2 = 2D/C
Price ratio = Pd/Pc = 50/50 = 1
So, 2D/C = 1
Therefore, C = 2D
Budget constraint: M = Pd*D + Pc*C
So, 50D + 50*(2D) = 450
50D + 100D = 150D = 450
So, D = 450/150 = 3
C = 2D = 2*3 = 6
To maximize her utility, Tracy should buy twice as many pairs of casual Crocs as dress shoes. This is found by equalizing the marginal utility per dollar spent on each type of shoe and considering her budget constraint of $450.
Explanation:In economics, consumers aim to maximize their utility given their budget constraints. The optimal consumption bundle is achieved when the marginal utility per dollar spent on each good is equal. Therefore, to find Tracy's optimal consumption bundle, we need to set the marginal utility per dollar spent on dress shoes equal to the marginal utility per dollar spent on casual Crocs.
The marginal utility per dollar spent on dress shoes is MU Subscript Upper D/Price of D = 10Upper C squaredC2/$50. The marginal utility per dollar spent on casual Crocs is MU Subscript Upper C/Price of C = 20DC/$25. Setting these equal to each other, we get (10C2/$50) = (20DC/$25). Simplifying, we find that Tracy should buy twice as many pairs of Crocs as dress shoes to maximize her utility.
However, we also need to take into account her budget constraint of $450. Let D be the number of pairs of dress shoes and C be the number of pairs of casual Crocs. So, we have the equation $50D + $25C = $450. Substituting D = C/2 into this equation, we can solve for the optimal number of dress shoes and Crocs for Tracy.
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Anthony votes in favor of a bill which would prevent people above a certain level of income from being able to purchase subsidized housing. Which philosophy of ethics is applies here?
(A) Kantianism
(B) Virtue Ethics
(C) Social Justice Theory
(D) Utilitarianism
Answer:
Letter C is correct. Social Justice Theory.
Explanation:
The most suitable alternative for this issue is letter c, Theory of Social Justice.
This theory refers to an ethical and political philosophy that states that there is justice beyond those recognized by the economic law of supply and demand, civil and criminal law, and the social and moral rules and structures of society. According to this theory, social justice refers to relationships that must be fair to all groups in society, that is, all people must have equal access to health, well-being, justice, opportunities, etc., regardless of their conditions. political, economic or other.
Social justice theory can punish or favor individuals regardless of their characteristics, choices or actions.
In the above question, we can say that social justice is adequate, because in economic terms, it is able to grant opportunities, redistribution of wealth and income to groups considered oppressed by certain oppressors.
Final answer:
Anthony's vote aligns with Social Justice Theory, which seeks a fair allocation of resources in society and particularly relates to Rawls's theory involving the veil of ignorance.
Explanation:
Anthony's vote aligns with the philosophy of Social Justice Theory, which focuses on the equitable distribution of opportunities, resources, and rights within a community. This theory is concerned with creating a society where there is a fair allocation of community assets, making sure that individuals in higher income brackets do not reduce the availability of subsidized housing meant for those in greater need.
The concept of social justice invokes the “veil of ignorance” in Rawls's theory. It is a method of designing a just society by making decisions without knowledge of one's position within the society, ensuring fair and unbiased policies. Lastly, while utilitarian principles, such as those discussed in the theory of Utilitarianism, are important in many aspects of social policy and ethics, the specifics of the housing bill discussed do not directly pertain to this philosophy which aims to maximize the overall happiness or welfare of the society.
Describe an important benefit of the safe harbor provisions of the DMCA. Describe an important weakness of the safe harbor provisions from the perspective of the entertainment industries. Describe an important weakness from the perspective of the public.
Answer:
A - Insulate the online user from a seeming liability that could arise from using someone's else resources.
B - It is widely acknowledged that the provisions of the DMCA have reduced a large number of legal procedures, instead of stopping copyright infringement.
C - The public believe that some of the DMCA provisions threaten fair use of contents, stifle competition and eventual innovation in public policy participation.
Explanation:
A - Insulate the online user from a seeming liability that could arise from using someone's else resources. The foremost objective of DMCA provisions is to strike a balance between copyright owners and the users of such. Inadvertently, it us expected that there will be attendant cases and issues emanating from such. DMCA seeks to provide adequate guidelines to addressing such.
B - It is widely acknowledged that the provisions of the DMCA have reduced a large number of legal procedures, instead of stopping copyright infringement. As there's tendency to subject the most noblest of initiative to abuse, DMCA is not an exception. The manipulation and selective interpretation of the guidelines have thus stifle many legal proceedings that could otherwise have occasioned. Resultantly, threatening the effectiveness of its foremost objective.
C - The public believe that some of the DMCA provisions threaten fair use of contents, stifle competition and eventual innovation in public policy participation. The manipulation and selective interpretation of the guidelines have thus diluted its pristine mission of establishment. Thus, fair play I'm in the use of contents, robust competition and intellectual innovation are under threat by the constant misapplication of DMCA provisions.
The safe harbor provisions of the DMCA protect ISPs from liability for infringing content uploaded by their users. However, this creates weaknesses from the perspectives of the entertainment industries and the public.
Explanation:The Digital Millennium Copyright Act (DMCA) includes safe harbor provisions that provide benefits and protections for Internet service providers (ISPs). An important benefit of these provisions is that they protect ISPs from being held liable for infringing content uploaded by their users. This encourages ISPs to host user-generated content and allows them to focus on their primary function of providing Internet access.
However, from the perspective of the entertainment industries, a weakness of the safe harbor provisions is that they may limit their ability to hold ISPs accountable for hosting pirated content. This puts the burden of policing and enforcing copyright infringement on the content creators themselves.
From the perspective of the public, an important weakness of the safe harbor provisions is that they may allow ISPs to escape liability even if they are aware of infringing content on their platforms. This can make it challenging for content creators and rights holders to protect their intellectual property rights.
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Indifference curve analysis Select one: A. presumes only that the consumer can say one combination of two goods yields more or less utility than some other combination. B. is in conflict with the idea of a downsloping demand curve. C. presumes, unlike utility analysis, that satisfaction is numerically measurable. D. presumes, as does utility analysis, that satisfaction is numerically measurable
Answer:
A. presumes only that the consumer can say one combination of two goods yields more or less utility than some other combination
Explanation:
An indifference curve is a curve is a graph that shows the combination of two goods that have been given a consumer equilibrium. Along utility and thus they make a consumer difference and are said to be a heuristic device that is used in the contemporary microeconomics to demonstrates the your preferences and the limitations of a budget.16. A price floor represents: a. a maximum price that can be legally charged for a product or service. b. a minimum price that can be legally charged for a good or service. c. a lottery imposed upon producers by the government, d. a first come, first serve mechanism for controlling prices.
Answer:
b. minimum price that can be legally charged for a product or service
Explanation:
A price floor represents a minimum price that can be legally charged for a product or service. A price floor is the lowest legal price that can be paid in markets for goods and services, labor, or financial capital. There are many goods which have price floors imposed by the government; for example agriculture good. In an organizations, unions may also impose price floors which could be the minimum rates for the staff etc.
"The premium on a pound put option is $.04 per unit. The exercise price is $1.60. The break-even point is ____ for the buyer of the put, and ____ for the seller of the put. (Assume zero transaction costs and that the buyer and seller of the put option are speculators." g
Answer:
$1.56, $1.56
Explanation:
Break-even point on a Put option is the Net of premium cost. Your exercise price is $1.60, it includes the premium price paid to the seller. The break-even point for the will be $1.56 ( $1.60 - $0.04 ) and for the seller it will also be $1.56 because there is no transaction cost is involved and the premium received is an income for him.
Final answer:
The break-even point is $1.56 for both the buyer and the seller of a pound put option with a premium of $.04 and an exercise price of $1.60. This point is reached by subtracting the premium from the exercise price. Speculative trading carries risks and potential rewards, depending on market movements.
Explanation:
The break-even point for the buyer of a pound put option with a premium of $.04 per unit and an exercise price of $1.60 is $1.56. This is because the buyer of the put will pay the premium and needs the market price to be low enough to cover the cost of the premium when they exercise the option. To calculate the break-even point for the buyer, you subtract the premium from the exercise price ($1.60 - $.04 = $1.56).
For the seller of the put option, the break-even point is also $1.56 because this is where the seller does not gain or lose money from the premium received after considering the potential obligation to buy the underlying asset at the exercise price if the buyer exercises the option.
It is important to remember that in options trading, speculators can make a profit if their predictions about the market movement are correct, but there are no guarantees, and they can also suffer losses if the market does not move as anticipated.
Sellers typically ask a higher price for an item than buyers are willing to pay. This is called a(n) Group of answer choices Compensatory model Noncompensatory model Endowment effect Elimination by aspect model Lexicographical model
Answer:
Endowment effect
Explanation:
Endowment effect is the effect which is defined as the when the ownership rises or increases the value of the product or the item.
For example, when it is asked to set a price for an item to be exchanged, the sellers usually ask for a much higher price for the product, than the buyers are willing to pay. This effect is called as the endowment effect because the ownership increase the value linked with the product or item.
Exercise 5-17 (Algorithmic) (LO. 4, 8) Rover Corporation would like to transfer excess cash to its sole shareholder, Aleshia, who is also an employee. Aleshia is in the 24% tax bracket, and Rover is subject to a 21% rate. Because Aleshia's contribution to the business is substantial, Rover believes that a $114,000 bonus in the current year is reasonable compensation and should be deductible by the corporation. However, Rover is considering paying Aleshia a $114,000 dividend because the tax rate on dividends is lower than the tax rate on compensation. Answer the following questions to determine whether Rover is correct in believing that a dividend is the better choice. a. Regarding taxes, which would benefit Aleshia the most? The $114,000 dividend because after taxes she would have $ from the dividend and $ 86,640 from the bonus. b. Regarding taxes, which would benefit Rover Corporation the most? The $114,000 bonus because it would save Rover $ 23,940 in taxes. c. Considering the two parties together, which alternative would provide the most overall tax savings? The $114,000 bonus because when the overall effect to both the corporatio
Answer:
The correct answer that a dividend is a better choice is . a. Regarding taxes, which would benefit Aleshia the most? The $114,000 dividend because after taxes she would have $ from the dividend and $ 86,640 from the bonus.
Explanation:
A dividend is a payment made by a corporation to its shareholders, usually as a distribution of profits. When a corporation earns a profit or surplus, the corporation is able to re-invest the profit in the business and pay a proportion of the profit as a dividend to shareholders.
A tax (from the Latin taxo) is a compulsory financial charge or some other type of levy imposed upon a taxpayer (an individual or legal entity) by a governmental organization in order to fund various public expenditures. A failure to pay, along with evasion of or resistance to taxation, is punishable by law.
Bob and Tom are two criminals who have been arrested for burglary. The police put Tom and Bob in separate cells. They offer to let Bob go free if he confesses to the crime and testifies against Tom. Bob is also told that he will serve a 15-year sentence if he remains silent while Tom confesses. If he confesses and Tom also confesses, they will each serve a 10-year sentence. Separately, the police make the same offer to Tom. Assume that if Bob and Tom both remain silent, the police only have enough evidence to convict them of a lesser crime and they will serve 3-year sentences.
a. Use this information to write a payoff matrix for Bob and Tom.
b. Does Bob have a dominant strategy? If so, what is it?
c. Does Tom have a dominant strategy? If so, what is it?
d. What sentences do Bob and Tom serve? How might they have avoided this outcome?
Answer:
A. Check the attached image for the payoff matrix
B. Confess
C. Confess
D. 3 years. They could have avoided this by confessing.
Explanation:
The above question is known as the prisoner's dilemma. It is a form of game theory. It analyses the best option for a player in a game without regard for what the other player does.
The dominant strategy is the best decision for the player without considering what the other player does or without cooperation between the players. The dominant strategy for each of the prisoners is to confess because if one confesses and the other doesn't, the one that confesses goes free. If both prisoners confesses, they get 10 years each. These is a better option than not confessing and getting either 3 years or 15 years of prison sentence.
Because both players don't confess, hence they get 3 years in prison. They could have avoided the sentence by confessing.
I hope my answer helps you
The problem depicts a classic example of the 'prisoner's dilemma' in game theory. Both Bob and Tom's dominant strategy is to confess to reduce their potential sentence, however, if they cooperated and remained silent, they would both face a significantly lesser sentence of 3 years each. The risk, however, lies in trusting each other to remain silent.
Explanation:This problem is a classic example of the prisoner's dilemma in game theory. The payoff matrix for Bob (B) and Tom (T) would look like this:
If B and T both confess (C), then both receive a 10-year sentence.If B confesses (C) and T remains silent (S), then B goes free and T receives a 15-year sentence.If B remains silent (S) and T confesses (C), then B receives a 15-year sentence and T goes free.If B and T both remain silent (S), then both receive a 3-year sentence.To answer the questions:
Bob's dominant strategy is to confess as it either ensures his freedom or reduces his sentence to 10 years rather than face a 15-year sentence if Tom confesses.Tom's dominant strategy also mirrors Bob's - it is better for him to confess.If they were to act on their dominant strategy of confessing, they would both receive a 10-year sentence each. However, this outcome could have been avoided if trust existed between Bob and Tom. Since both would have faced significantly less prison time of 3 years each by remaining silent, it would have been a better overall choice for them cooperation-wise. Yet, the risk taken in trusting the other person to also remain silent is what creates this paradox.Learn more about Prisoner's Dilemma here:https://brainly.com/question/33721898
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DellceCon is considering selling its delicious ice-cream cones using stands along Hot Beach, which is 5 miles long. According to its estimates, there are 1,000 sunbathers evenly spread along the beach and the each sunbather will buy one ice-cream cone per day pro- vided that the price plus any transportation (disutility) cost does not exceed $5. Each sunbather incurs a transportation (disutility) cost of leaving the comfort of their chair and umbrealla to get a cone and return to their spot of 25 cents per 0.25 mile. Each cone costs $0.50 to make and DeliceCon incurs a cost of $40 per day to run one of its stands. We would like to know how many stands DellceCon should operate and the price per cone that it should charge at each stand to maximize its profit.
Answer:
The price per charged should be $2.5
Explanation:
Disutility cost per 0.25 mile is 25 cents. Therefore, the cost per mile is 4x25 cents = $1
The disutility for the entire 5 miles is $5. This implies that 1 stand can easily satisfy the
condition of the disutility not being more than $5.
Thus, the seller should operate 1 stand.
Now, the total transportation cost can be minimized if the stand is set up in the middle of
the beach. In that case, the sunbathers at the farthest two ends would face a cost of $2.5
(2.5 miles x $1)
This means that in order to satisfy the disutility condition, the total of the price charged,
and disutility incurred should be less than $5.
Therefore, $2.5 + Price < $5. This means that Price $2.5
In order to maximize the profits, he would charge the maximum possible price.
Thus, the price per charged should be $2.5