Answer:
The sale of the plant assets reported in the Income statement is at profit or loss whereas the asset sold reported in the Statement of Cash flows will show a positive balance of $15,000 from investing activities.
Explanation:
The sale of Non current assets or fixed assets are always the amount that we received after the sale of the fixed asset. So the amount represented in the Statement of Cash Flows must be Total amount which is $15,000.
Aracel Engineering completed the following transactions in the month of June.
a. Jenna Aracel, the owner, invested $100,000 cash, office equipment with a value of $5,000, and $60,000 of drafting equipment to launch the company.
b. The company purchased land worth $49,000 for an office by paying $6,300 cash and signing a long-term note payable for $42,700.
c. The company purchased a portable building with $55,000 cash and moved it onto the land acquired inb.
d. The company paid $3,000 cash for the premium on an 18-month insurance policy.
e. The company completed and delivered a set of plans for a client and collected $6,200 cash.
f. The company purchased $20,000 of additional drafting equipment by paying $9,500 cash and signing a long-term note payable for $10,500.
g. The company completed $14,000 of engineering services for a client. This amount is to be received in 30 days.
h. The company purchased $1,150 of additional office equipment on credit.
i. The company completed engineering services for $22,000 on credit.
j. The company received a bill for rent of equipment that was used on a recently completed job. The $1,333 rent cost must be paid within 30 days.
k. The company collected $7,000 cash in partial payment from the client described in transaction g.
l. The company paid $1,200 cash for wages to a drafting assistant.
m. The company paid $1,150 cash to settle the account payable created in transaction h.
n. The company paid $925 cash for minor maintenance of its drafting equipment.
o. Jenna Aracel withdrew $9,480 cash from the company for personal use.
p. The company paid $1,200 cash for wages to a drafting assistant.
q. The company paid $2,500 cash for advertisements on the Web during June.
Prepare general journal entries to record these transactions
Answer:
Aracel Engineering Ltd.
Journal Entries
Sr. No. Accounts Debit Credit
a. Investments $100,000
Cash $ 100,000
a. Office Equipment $ 5000
Cash $ 5000
Purchase office Equipment
a. Drafting Equipment $ 60,000
Cash $ 60,000
Purchase Drafting Equipment
b. Land $ 49,000
Cash $ 6,300
Note Payable $ 42,700
Purchase Land
c. Building $ 55,000
Cash $ 55,000
Purchase Building
d. Premium for Insurance $ 3000
Cash $ 3000
Paid Cash for Insurance Premium
e. Cash $ 6200
Drafting Services A/c $ 6200
Received Cash for a set of plans (drafts) from a client
f. Drafting Equipment $ 20,000
Cash $ 9500
Notes Payable $ 10,500
Bought equipment for cash and notes payable
g. Account Receivable $ 14,000
Engineering Services $ 14,000
Engineering Services rendered on credit
h. Office Equipment $ 1150
Accounts Payable $ 1150
Office Equipment bought on credit
i. Account Receivable $ 22,000
Engineering Services $ 22,000
Engineering Services rendered on credit
j. Rent Expense $ 1333
Rent Payable $ 1333
Rent to be paid within 30 days
k. Cash $ 7000
Account Receivable $ 7000
Received partial payment as Cash for Engineering services
l. Wages $ 1,200
Cash $ 1,200
Wages Paid
m. Accounts Payable $ 1150
Cash $ 1150
Payment made for office equipment purchased on credit
n. Maintenance ( equipment) $ 925
Cash $ 925
Maintenance charges paid for equipment
o. Drawing Account $ 9,480
Cash $ 9,480
Withdrew cash for personal use
p. Wages $ 1200
Cash $ 1200
Paid wages
q. Advertisements $ 2500
Cash $ 2500
Paid advertisement charges
The journal entries to record these transactions are:
a. Dr Cash $100,000
Dr Office equipment $5,000
Dr Drafting equipment $60,000
Cr Common stock $165,000
($100,000+$5,000+$60,000)
( To record amount Invested in business)
b. Dr Land $49,000
Cr Cash $6,300
Cr Notes payable $42,700
(To record Purchase of land)
c. Dr Building $55,000
Cr Cash $55,000
(To building Purchased )
d. Dr Prepaid insurancye $3,000
Cr Cash $3,000
(To record Purchase of insurance policy)
e. Dr Cash $6,200
Cr Engineering fees earned $6,200
(To record fees received for engineering services)
f. Dr Drafting equipment $20,000
Cr Cash $9,500
Cr Notes payable $10,500
( To record drafting equipment purchased )
g. Dr Accounts receivable $14,000
Cr Engineering fees earned $14,000
(To record engineering services Completed)
h. Dr Office equipment $1,150
Cr Accounts payable $1,150
( To record office equipment purchased)
i. Dr Accounts receivable $22,000
Cr Engineering fees earned $22,000
(To record engineering services Completed)
j. Dr Equipment rental expense $1,333
Cr Accounts payable $1,333
(To record equipment rental expense incurred)
k. Dr Cash $7,000
Cr Accounts receivable $7,000
(To record cash collected on account)
l. Dr Wage expense $1,200
Cr Cash $1,200
(To record wages paid)
m. Dr Accounts payable $1,150
Cr Cash $1,150
( To record cash paid on account)
n . Dr Repairs expense $925
Cr Cash $925
( To record amount paid for repairs of drafting equipment)
o. Dr Dividends $9,480
Cr Cash $9,480
(To record dividends)
p. Dr Wage expense $1,200
Cr Cash $1,200
(To record wages paid )
q. Dr Advertisement expense $2,500
Cr Cash $2,500
(To record amount paid for advertisement)
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Type ________ is designed to precisely represent numbers with decimal points, especially monetary amounts. Group of answer choices
Answer:
The correct answer is letter "B": decimal.
Explanation:
Type decimal is used to represent fractions in the decimal system using commas or decimal points -two numbers after the comma or point- and that tends to round their numeric value to the next numeric value to keep a uniform registry among different quantities.
A firm expands its scale of production and finds that it is able to negotiate better prices with its suppliers.
Which of the curves best applies to this firm?
Answer:
Economies of Scale
Explanation:
If a firm expands its scale of production and finds that it is able to negotiate better prices with its suppliers then the curve that best applies to the firm is 'economies of scale'
Economies of scale is a concept in microeconomics that holds that there are benefits of cost reduction that is due to an enterprise when it increases its scale of operation.
The benefit is better demonstrated in the average cost per unit because as more and more units are produced, lesser and lesser portion of the fixed costs of the overhead fixed costs become attributable to each unit and even the variable cost falls because material price becomes cheaper as a result of quantity discounts, even labour could double their output with overtime payment which is less than doubling wages.
PS.02 A process that utilizes inexpensive general-purpose capital equipment will tend to have higher skilled workers.
True or false?
Answer:
True
Explanation:
There are various manufacturing process some require skilled workers and some operations demand expensive machinery and capital equipment. The process that utilises inexpensive general-purpose capital equipment generally requires skilled workers to operate it. Inexpensive equipment is not easy to handle and require experts to maintain and operate, which is why the above statement is true.
One result of globalization is that countries, businesses, and people become increasingly interdependent. a. True b. False
Answer:
The Given Statement is True
Explanation:
It is true that globalization causes the businesses, countries and people to become increasingly interdependent. Globalization means operating internationally which causes the people, businesses and the countries to depend on each other. Globalization is also used to describe the increasing interdependence of countries, people and businesses.
Small Company was liquidated in the current year by Parent Company, its sole shareholder. Parent received the following assets on June 15 pursuant to the liquidation: Basis to Fair Small Market Value Cash $100,00o$100,000 Accounts receivable 40,000 40,000 Plant assets (net) 70,000 90,000 Land (mortgage on land $40,000)90,000 110.000 Total $300,00o$340,000 Also pursuant to the liquidation, Parent assumed the mortgage of $40,000 on the land. Parent Corporation's basis in Small common stock is $205,00O. What are the amount and the character of the gain or loss Parent must recognize from the liquidation? $95.000 capital gain. KE $135.000 capital gain. IN $340.000 dividend
Answer:
$95,000 Capital Gain
Explanation:
First, note that during liquidation, the fair market value should be used for the valuation of assets
Step 1: Calculate the Net Assets taken over at Fair Market Value
Total Assets at the Market Value = $340,000
Subtact: Liabilities (land Mortgage) = ($40,000)
The Net Asset at Fair market value = $300,000
Step 2: Calculate the Capital Gain or loss from the Liquidation
fair Value of Net Assets Taken Over = $300,000 (from step 1)
Subtract: The Common stock of Small Com. = ($205,000)
The Capital Gain = $95,000
Question:
The equity section of Cyril Corporation's balance sheet shows the following:
Preferred stock: 4% cumulative, $25 par value, $30 call price, 10,000 shares issued and outstanding $250,000
Common stock: $10 par value, 35,000 shares issued and outstanding 350,000
Retained earnings 267,500
Total stockholders' equity $867,500
Determine the book value per share of the preferred and common stock under two separate situations:
1. No preferred dividends are in arrears.
2. Three years of preferred dividends are in arrears.
Answer:
Part 1:
[tex]Book\ value\ per\ share\ of\ the\ preferred=\$25[/tex]
[tex]Book\ value\ per\ share\ of\ the\ common\ stock=\$17.6428[/tex]
Part 2:
[tex]Book\ value\ per\ share\ of\ the\ preferred=\$28[/tex]
[tex]Book\ value\ per\ share\ of\ the\ common\ stock=\$16.7857[/tex]
Explanation:
Part 1: (the book value per share of the preferred and common stock under No preferred dividends are in arrears)
Book value per share of the preferred :
[tex]Book\ value\ per\ share\ of\ the\ preferred=\frac{(Preferred\ Stock+Cumulative\ dividends)}{Number\ of\ shares\ of\ preferred\ stock}[/tex]
In our case Cumulative dividends=0
[tex]Book\ value\ per\ share\ of\ the\ preferred=\frac{\$250000+0}{10000} \\Book\ value\ per\ share\ of\ the\ preferred=\$25[/tex]
Book value per share of the common stock:[tex]Book\ value\ per\ share\ ofthecommonstock=\frac{Stockholder\ equity-Preferred\ Stock-Cumulative\ dividends}{Number\ of\ shares\ of\ preferred\ stock}[/tex]In our case Cumulative dividends=0
[tex]Book\ value\ per\ share\ of\ the\ common\ stock=\frac{\$867500-\$250000-\$0}{35000} \\Book\ value\ per\ share\ of\ the\ common\ stock=\$17.6428[/tex]
Part 2:
Annual Preferred Dividend=4%*$25*10,000=$10,000
Three years of preferred dividends are in arrears= 3*Annual Preferred Dividend
Three years of preferred dividends are in arrears= 3*$10000=$30,000
Formula for the book value per share of the preferred is same as above,so we will direct calculate:
In our case Cumulative dividends=$30,000
Book value per share of the preferred :
[tex]Book\ value\ per\ share\ of\ the\ preferred=\frac{\$250000+\$30000}{10000} \\Book\ value\ per\ share\ of\ the\ preferred=\$28[/tex]
Book value per share of the common stock:
Formula for the book value per share of the common stock is same as above,so we will direct calculate:
[tex]Book\ value\ per\ share\ of\ the\ common\ stock=\frac{\$867500-\$250000-\$30000}{35000} \\Book\ value\ per\ share\ of\ the\ common\ stock=\$16.7857[/tex]
Match each of the financial statement users listed to the question they are most likely to ask.1. What is the expected net income for the next quarter?2. Will the company have enough cash to pay dividends? 3. Has the company paid for inventory purchases promptly in the past? 4. Will there be sufficient profits and cash flow to pay bonuses? 5. Will the company have enough cash to repay its loans? Answers can be:banker, company CEO, current shareholders, equity analyst, supplier.
Answer:
1. What is the expected net income for the next quarter? Equity analyst
2. Will the company have enough cash to pay dividends? Current shareholders
3. Has the company paid for inventory purchases promptly in the past?Supplier.
4. Will there be sufficient profits and cash flow to pay bonuses? Company CEO
5. Will the company have enough cash to repay its loans? Banker
Explanation:
1. What is the expected net income for the next quarter?
Asked by equity analyst
An analyst performs financial analysis for interested parties for a fee. In order to prepare a good financial analysis and make informed forecast, he may want to know what to expect from the company in not too distant future.
2. Will the company have enough cash to pay dividends?
Asked by current shareholders
The current shareholders are interest in getting returns on their investment in form of dividends
3. Has the company paid for inventory purchases promptly in the past? supplier.
The potential suppliers or creditors will want this information to be able to decide whether the entity is credit worthy or not. Where it is discovered that the firm has a track record of delaying payment to suppliers, that will influence the potential supplier's decision in extending credit to the firm.
4. Will there be sufficient profits and cash flow to pay bonuses?
Asked by company CEO
This is to know what to tell the staff and mangers who may be interested in knowing the ability of the firm to meet its obligation to the staff.
5. Will the company have enough cash to repay its loans?
Asked by banker
The bankers are interested in knowing the liquidity position of the enterprise, and ability of the firm to service its debt.
âCrabapples, Inc. purchases and sells boxes of dried fruit. The following information summarizes its operating activities for theâ year: Selling Expenses $ 9 comma 100 Merchandise Inventory on December 31 33 comma 500 Merchandise Inventory on January 1 46 comma 400 Purchases of merchandise 82 comma 000 Rent for store 12 comma 600 Sales commissions 7 comma 500 Sales revenue 164 comma 000 What is the cost per box of dry fruits if Crabapples sold 3 comma 000 boxes of dry fruit during theâ year?
Answer:
The cost of each box of dry fruit sold during the year is$18.3
Explanation:
The first step to calculating the cost per box of dry fruits is to determine the Cost of Goods Sold.
Cost of Goods Sold
= Opening Merchandise of Inventory January 1+ Purchases of Merchandise during the year - Ending Merchandise inventory on December 31
=-$46,400 + $42,000- $33,500
= $54,900 is the Cost of Goods sold.
Step 2: Calculate the cost of each box sold as required
The formula is The Cost of Goods Sold determined in step 1 / the number of boxes of dry fruits Crabapples sold during the year
=$54,900/3000 boxes
= $18.3
The cost of each box of dry fruit sold during the year is$18.3
Prepare a balance sheet from the following information. What is the net working capital and debt ratio?
Cash$ 50,000
Accounts receivable 42,700
Accounts payable 23,000
Short-term notes payable 10,500
Inventories 40,000
Gross fixed assets 1,280,000
Other current assets 5,000
Long-term debt 200,000
Common stock 490,000
Other assets 15,000
Accumulated depreciation 312,000
Retained earning ?
Answer:
Net working capital = $104,200
Debt ratio = 0.21
Retained earning = $397,200
Explanation:
The preparation of the balance sheet is presented below:
Assets
Current Assets
Cash$ 50,000
Accounts receivable $42,700
Inventories $40,000
Other current assets $5,000
Total current assets $137,700
Gross fixed assets 1,280,000
Less: Accumulated depreciation -$312,000
Net fixed assets $968,000
Other assets $15,000
Total assets $1,120,700
Liabilities
Current liabilities
Accounts payable $23,000
Short-term notes payable $10,500
Total current liabilities $33,500
Long-term debt 200,000
Total liabilities $233,500
Equity
Common stock 490,000
Retained earning $397,200 (Balancing figure)
Total equity $887,200
Total liabilities and owners equity $1,120,700
The computation is shown below:
Net working capital = Current assets - current liabilities
= $137,700 - $33,500
= $104,200
And, the debt ratio would be
= Total liabilities ÷ Total assets
= $233,500 ÷ $1,120,700
= 0.21
The balance sheet has been prepared with total assets amounting to $1,105,700 and total liabilities amounting to $233,500. The net working capital is calculated as $104,200 and the debt ratio stands at approximately 21.12%.
Explanation:First, we need to prepare the balance sheet. The Current Assets section is composed of Cash ($50,000), Accounts Receivable ($42,700), Inventories ($40,000) and Other Current Assets ($5,000). Adding these values, the total Current Assets is $137,700.
For the Non-Current Assets section, we have Gross Fixed Assets ($1,280,000) and Other Assets ($15,000), which makes the total Non-Current Assets equal to $1,295,000. Deducting Accumulated Depreciation of $312,000 from Gross Fixed Assets yields a Net Fixed Asset of $968,000. Non-Current Assets and Current Assets together add up to $1,105,700 in Total Assets.
The liabilities part consists of Accounts Payable ($23,000) and Short-Term Notes Payable ($10,500) which make up Current Liabilities equal to $33,500. There is also Long-Term Debt of $200,000. Current Liabilities and Long-Term Debt together make up Total Liabilities equal to $233,500.
Net Working Capital (NWC) is calculated by subtracting Current Liabilities from Current Assets, therefore NWC equals $137,700 - $33,500, which is $104,200 in this case.
Debt Ratio is calculated by Total Liabilities divided by Total Assets. Therefore, Debt Ratio equals $233,500 / $1,105,700 which is approximately 21.12%.
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Ch14 C1: Explain the purpose and nature of, and the role of ethics in, managerial accounting.
Answer and Explanation:
Purpose of Ethics- Ethical codes are the fundamental principles that accounting professionals choose to abide by to enhance their profession, maintain public trust, and demonstrate honesty and fairness.
Nature of Ethics- Independence and objectivity, Integrity, Confidentiality, professional confidence and professional behaviour.
Role of Ethics:
Understanding the ethical frameworks for independence, integrity, confidentiality and professional competence can help decision-making & enhance reputation of the field of accounting.
Answer:
Managerial accounting is a function of the internal part of a business that manages a company's financial information. Managerial accounting is often used only business to allocate business cost to goods and services
PURPOSE OF MANAGERIAL ACCOUNTING
PLANNING: managerial accounting is used to plan for future needs of the company. They plan budgets and also implement productive strategies to ensure profit
DIRECTING: this is a purpose of managerial accounting. It serves as a cooperation between employees and upper level management to answer questions and help solve problems.
CONTROLLING: the plans developed earlier by the accountants ensures that it is followed
ANALYSING: managerial accounting helps to analyse informations. They look for problematic areas and create ways to correct them to ensure increase in profit
REPORTS: Most of the goals and plans developed by the managerial accountants take the forms of report. This reports help them state clearly the conclusions they have reached and their solution to the problem.
ROLES OF ETHICS IN MANAGERIAL ACCOUNTING
Ethics are important when it comes to managerial accounting and companies usually develop a code of ethics or conduct to set expected ethical behaviour for accountants.
The IMA notes the following as ethics
Competence, Confidentiality, Integrity and Credibility.
Managerial accounting ethics ensures that all financial information is correctly relayed to business owners and managers. It also Ensures that there Is trust amongst each employees when it comes to sensitive business information
At the end of April, Cavy Company had completed Job 766 and 765. According to the individual job cost sheets the information is as follows:Job Direct Materials Direct Labor Machine HoursJob 765 $6,160 $1,848 22Job 766 10,944 3,456 64Job 765 consisted of 132 units, and Job 766 consisted of 192 units.Assuming that the predetermined overhead rate is applied by using machine hours at a rate of $153 per hour.
a. Determine the balance on the job cost sheets for each job.Job 765 $Job 766 $
b. Determine the cost per unit at the end of April. Round to the nearest cent.Job 765 $Job 766 $
Answer:
a)
Job Direct Materials Direct Labor overhead Total Job cost
Job 765 $6,160 $1,848 $3,366 $11,374
Job 766 $10,944 $3,456 $9,792 $24,192
b)
For Job 765 = $86.167
For Job 765 = $126
Explanation:
Data provided in the question:
Job Direct Materials Direct Labor Machine Hours
Job 765 $6,160 $1,848 22
Job 766 $10,944 $3,456 64
Overhead rate = $153 per hour
Job 765 consisted = 132 units
766 consisted = 192 units
now,
Overhead = Machine Hours × Overhead rate
For Job 765 = 22 × 153
= $3366
For Job 766 = 64 × 153
= $9792
Total job cost i.e balance on the job cost sheets
= Direct Materials + Direct Labor + overhead
a)
Job Direct Materials Direct Labor overhead Total Job cost
Job 765 $6,160 $1,848 $3,366 $11,374
Job 766 $10,944 $3,456 $9,792 $24,192
b)
Cost per unit = [ Total job cost ] ÷ Total units
For Job 765 = $11,374 ÷ 132
= $86.167
For Job 765 = $24,192 ÷ 192
= $126
Brand loyalty, usage rate, and perceived risk are studied with which possible base of market segmentation?
Answer:
Explained below:
Explanation:
Brand loyalty, usage rate, and perceived risk are studied under the behavioral base of segmentation which means that consumers show distinct levels of loyalty to the brands so consumed market could also be segmented on the basis of loyalty status of a particular brand. Consumers of the market must be divided on the basis of usage rate also so that we are able to identify the rough demand of the particular product to minimize the risk regarding product selling.
A small company manufactures a certain product. Variable costs are $20 per unit and fixed costs are $10,875. The price-demand relationship for this product is P= -0.25D + 250, where P is the unit sales price of the product and D is the annual demand. Use the data (and helpful hints) that follow to work out answers.
- Total cost = Fixed cost + Variable Cost
- Revenue = Demand X Price
- Profit = Revenue - Total Cost
Set up your graph with dollars on the y axis (between 0 and $70,000) and, on the x axis, demand D: (units produced or sold), between 0 and 1000 units.
a) Develop the equations for total cost and total revenue.
b) Find the breakeven quantity (in terms of profit and loss) for the product.
c) Find the profit that the company would obtain by maximizing it's total revenue and neatly graph the solutions
The equations for total cost and total revenue can be developed. The breakeven quantity can be found by setting the profit equation to zero. The profit that the company would obtain by maximizing its total revenue can also be calculated.
Explanation:a) The equation for total cost is TC = FC + (VC * D), where TC is the total cost, FC is the fixed cost, VC is the variable cost per unit, and D is the demand.
b) The breakeven quantity can be found by setting the profit equation to zero and solving for D. In this case, the breakeven quantity is the value of D for which Profit = 0.
c) To find the profit that the company would obtain by maximizing its total revenue, we can find the value of D that maximizes the revenue equation: Revenue = D * (P * D). This can be done by finding the maximum point of the revenue function.
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On January 1, 2012, Mehan, Incorporated purchased 15,000 shares of Cook Company for $150,000 giving Mehan a 15% ownership of Cook. On January 1, 2013 Mehan purchased an additional 25,000 shares (25%) of Cook for $300,000. This last purchase gave Mehan the ability to apply significant influence over Cook. The book value of Cook on January 1, 2012, was $1,000,000. The book value of Cook on January 1, 2013, was $1,150,000. Any excess of cost over book value for this second transaction is assigned to a database and amortized over five years. Cook reports net income and dividends as follows. These amounts are assumed to have occurred evenly throughout the years: On April 1, 2014, just after its first dividend receipt, Mehan sells 10,000 shares of its investment. What was the balance in the investment account at December 31, 2013?
Answer:
$447,500
Explanation:
1. On January 1, 2012, Mehan, Incorporated purchased 15,000 shares of Cook Company for $150,000 giving Mehan a 15% ownership of Cook
Therefore Balance on investment account as at 31 December, 2012. - $150,000
2. On January 1, 2013 Mehan purchased an additional 25,000 shares (25%) of Cook for $300,000.
Therefore:
Book value of 25% of $1,150,000 = 287,500
Excess of cost over book value = 300,000 - 287,500 = 12,500
Yearly amortization of excess = 12500/5 = 2500
Therefore balance in investment account at the end of 2013 will be:
150,000+300,000 - 2500 = $447,500
For each of the following items, identify whether they would most likely be reported in the balance sheet (B) or income statement (I).
a. Net income
b. Retained earnings
c. Depreciation expense
d. Accumulated depreciation
e. Wages expense
f. Wages payable
g. Interest expense
h. Interest payable
i. Sales
Answer:
Explanation:
The statement of income records all sales revenues general and expenditure incurred during a particular period.
The balance sheet reports the assets and the liabilities of the company
So, the classification is as follows
a. Net income = income statement (I)
b. Retained earnings = balance sheet (B)
c. Depreciation expense = income statement (I)
d. Accumulated depreciation = balance sheet (B). It is deducted from the value of the respective fixed assets
e. Wages expense = income statement (I). It is shown on the debit side of the income statement
f. Wages payable = balance sheet (B). It is a current liabilities
g. Interest expense = income statement (I) It is shown on the debit side of the income statement
h. Interest payable = balance sheet (B). It is a current liabilities
i. Sales = income statement (I)
a. Net income - I (Income Statement) b. Retained earnings - B (Balance Sheet) c. Depreciation expense - I (Income Statement) d. Accumulated depreciation - B (Balance Sheet) e. Wages expense - I (Income Statement) f. Wages payable - B (Balance Sheet) g. Interest expense - I (Income Statement) h. Interest payable - B (Balance Sheet) i. Sales - I (Income Statement)
Explanation:a. Net income - I (Income Statement)
b. Retained earnings - B (Balance Sheet)
c. Depreciation expense - I (Income Statement)
d. Accumulated depreciation - B (Balance Sheet)
e. Wages expense - I (Income Statement)
f. Wages payable - B (Balance Sheet)
g. Interest expense - I (Income Statement)
h. Interest payable - B (Balance Sheet)
i. Sales - I (Income Statement)
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Farmer Brian has 3 acres of land which he farms efficiently. Each acre can support 10 apple trees. However the 3 acres differ in their ability to support orange trees. He can grow 30 orange trees on the best land, 20 orange trees on the ok land, and 10 orange trees on the bad land. If he initially has all is land growing apples, what would be the opportunity cost of growing an orange tree
Final answer:
The opportunity cost of planting one orange tree for Farmer Brian is the loss of about 3.33 apple trees that could have been planted on the same land.
Explanation:
Farmer Brian's opportunity cost of growing an orange tree instead of apple trees is essentially the apples that he will no longer harvest because the land is being used for orange trees. The opportunity cost can be calculated based on the number of apple trees that could have been planted on the land used for one orange tree. As one acre can support 10 apple trees, and the best land can support 30 orange trees, it would mean that one orange tree is equivalent to 1/3 of an acre. Therefore, the opportunity cost for one orange tree is approximately 3.33 apple trees (10 apple trees per acre divided by 3).
PRISM Marketing received $100,000 from a customer on January 2nd, 2022 to be on retainer for the next two years. The appropriate journal entry to illustrate earned revenue at PRISM's fiscal year-end on December 31st, 2022 would be ____________. In the choices below, as per convention, debits are listed first followed by credits.
Final answer:
The appropriate journal entry to illustrate earned revenue for PRISM Marketing is to debit Unearned Revenue and credit Service Revenue by $50,000, which is half of the retainer fee received for one year out of the two-year service period.
Explanation:
The appropriate journal entry for PRISM Marketing to illustrate earned revenue at the end of the fiscal year on December 31st, 2022, for the retainer fee received is a debit to an asset account called "Unearned Revenue" and a credit to a revenue account, probably called "Service Revenue". Since the retainer covers two years and assuming a straight-line recognition of revenue, half of the $100,000 would be recognized as of December 31st, 2022, which is $50,000. The journal entry would be:
Debit Unearned Revenue: $50,000
Credit Service Revenue: $50,000
This entry moves the portion of the retainer that has been earned during the year from a liability to a revenue account, reflecting that the money is no longer unearned since services have been provided for one year out of the two-year agreement. It is important for the accountants to recognize this revenue according to the appropriate accounting principles to accurately reflect the financial state of the company.
Green, a calendar-year taxpayer, is preparing a personal statement of financial condition as of April 30, Year 4. Green’s Year 3 income tax liability was paid in full on April 15, Year 4. Green’s tax on income earned between January and April Year 4 is estimated at $20,000. In addition, $40,000 is estimated for income tax on the differences between the estimated current values and current amounts of Green’s assets and liabilities and their tax bases at April 30, Year 4. No withholdings or payments have been made towards the Year 4 income tax liability. In Green’s April 30, Year 4, statement of financial condition, what amount should be reported for income taxes?
A $40,000
B $20,000
C $0
D $60,000
Answer:
In Green's April 30, Year 4, statement of financial condition, the amount which should be reported for income taxes:
A $40,000
Explanation:
The option A is correct as only the estimated amount of income taxes on the differences between the estimated current values and current amounts of assets and liabilities is presented between liabilities and net worth.The option B is also incorrect as the $20,000 current tax liability would be presented as a liability. The option C is also incorrect as the $40,000 estimated income taxes on the differences between the estimated current values and current amounts of assets and liabilities is presented between liabilities and net worth.The option D is also incorrect as the $20,000 current tax liability would be presented as a liability while the $40,000 amount would be presented between liabilities and net worth.A receivable classified as current on the statement of financial position is expected to be collected within:________a. The current operating cycle.b. 1 year.c. The current operating cycle or1 year, whichever is longer.d. The current operating cycle or1 year, whichever is shorter.
Answer:
c. The current operating cycle or 1 year, whichever is longer.
Explanation:
As we know that
Current assets are comprised of cash & cash equivalents, inventory, account receivable, prepaid insurance, short term investment, and other current asset. These current asset is also known as the liquid asset that determines that these item would be converted into cash within one year
And the operating cycle would be the time between the material purchase and actual cash received.
So, The operating cycle = Days inventory outstanding + days sale outstanding
where,
Day inventory outstanding = (Beginning inventory + ending inventory) ÷ cost of goods sold × number of days in a year
Day sale outstanding = (Beginning Accounts receivable + ending Accounts receivable) ÷ Net sales × number of days in a year
Therefore, The collection period would be the maximum of the current operating cycle or 1 year.
The following transactions occurred during 2014. Assume that depreciation of 10% per year is charged on all machinery and 5% per year on buildings, on a straight-line basis, with no estimated salvage value. Depreciation is charged for a full year on all fixed assets acquired during the year, and no depreciation is charged on fixed assets disposed of during the year. Jan. 30 A building that cost $132,000 in 1997 is torn down to make room for a new building. The wrecking contractor was paid $5,100 and was permitted to keep all materials salvaged. Mar. 10 Machinery that was purchased in 2007 for $16,000 is sold for $2,900 cash, f.o.b. purchaser's plant. Freight of $300 is paid on the sale of this machinery. Mar. 20 A gear breaks on a machine that cost $9,000 in 2009. The gear is replaced at a cost of $2,000. The replacement does not extend the useful life of the machine but does make the machine more efficient May 18 A special base installed for a machine in 2008 when the machine was purchased has to be replaced at a cost of $5,500 because of defective workmanship on the original base. The cost of the machinery was $14,200 in 2008. The cost of the base was $3,500, and this amount was charged to the Machinery account in 2008. June 23 One of the buildings is repainted at a cost of $6,900. It had not been painted since it was constructed in 2010. Instructions Round to the nearest dollar.) Prepare general journal entries for the transactions.
Answer:
Here are your general entries:)
Profit and loss account $19,800
Accumulated depreciation $112,200
To Building $132,000
( Building torn down recorded)
Building torn down expense $5,100
To cash $5,100
(paid to contractor)
Cash $2,100
Accumulated depreciation $11,200
Profit and loss account $1,900
To machinery $16,000
(disposal of machine recorded)
Freight expense $300
To cash $300
(freight paid recorded)
Repairs of machinery $2,000
To cash $2,000
(New gear brake added to machinery)
Profit and loss account $1,400
Accumulated depreciation $2,100
To old base $3,500
(old base expensed out)
Machinery account $5,500
To cash $5,500
(New base constructed)
Depreciation of base $550
To accumulated depreciation $550
Paint of building expense $6,900
To cash $6,900
Explanation:
Addition of gear brake not added to cost of machinery because it does not extend the useful life of machine.
How can a system administrator meet this requirement?
Sales representatives at Universal Containers perform the initial steps in the lead qualification process and sales managers complete the final qualification steps. Universal Containers' requirements include those listed below.Sales managers can access all lead status values.Sales representatives can only access the first three lead status values.Sales representatives cannot access the final two lead status values.
A. Create two separate lead page layouts.
B. Create two separate lead processes and record types.
C. Use field-level security to restrict access to the lead status values.
D. Create a validation rule to prevent lead conversion.
Create two separate lead page layouts
Explanation:
Lead page layout can be created by using design manager and then choose a page layout and then the create page layout then we must select the master page select the content type and then choose and continue
Layout defines the fields in which the user can view and edit the fields give the description about the objects they can create and edit the fields accordingly. It contains the visual force page the buttons and the related lists
Star Repairs Co. does all the repair work for a medium-sized manufacturer of handheld computer games. The games are sent directly to Star, and after the games are repaired, Star bills the game manufacturer for cost plus a 20 percent markup. In the month of February, purchases of parts (replacement parts) by Star amounted to $97,000, the beginning inventory of parts was $38,500, and the ending inventory of parts was $15,250. Payments to repair technicians during the month of February totaled $52,500. Overhead incurred was $121,000. a. What was the cost of materials used for repair work during the month of February? b. What was the prime cost for February? c. What was the conversion cost for February? d. What was the total repair cost for February?
Answer:
a. What was the cost of materials used for repair work during the month of February?
To find this figure, we add the purchased replacement parts value with the beginning inventory parts value, and substract the ending inventory parts.
Cost of materials = $97,000 + $38,500 - $15,250
= $120,250
b. What was the prime cost for February?
The prime cost is the sum of cost of materials and cost of labor.
Prime cost = $120,250 + $52,500
= $172,750
c. What was the conversion cost for February?
Conversion cost is the sum of the cost of labor and overhead.
Conversion cost = $52,500 + $121,000
= $173,500
d. What was the total repair cost for February?
The total repair cost is the sum of parts cost, labor costs, and overhead.
Total repair cost = $120,250 + $52,500 + $121,000
= $293,750
High-Low Cost Estimation The Stone Company has observed that its utility cost is $5,000 when operating at a level of 20,000 machine hours per period. The utility cost drops to $4,000 when the operating level drops to 15,000 machine hours. Required: Estimate the utility cost for an operating level of 18,000 machine hours.
Answer:
$4,600
Explanation:
High-Low cost estimation is used to split a mixed cost into variable cost and fixed cost.
The first step is to determine the variable cost per unit with this formula
= High Activity cost - Low Activity Level cost
_____________________________________
High Activity Level (units) - Low Activity Level (units)
In this case, we can slot in the appropriate figure using this formula
= $5,000 - $4,000
__________________
20,000hrs - 15,000hrs
= $,1000
______
5000hrs
= $0.2hr
Using high-low cost estimation, the variable cost per machine hour is $0.2.
Now since total cost equals fixed plus variable cost, we can get our fixed cost by multiplying variable cost per machine hour with activity level and deducting the result from total cost given.
Using the high activity level (20,000), our fixed cost will be:
Fixed cost = Total cost - variable cost per machine hr (activity level)
Fixed cost= $5,000 - $0.2(20,000hr)
Fixed cost = $5,000- $4,000
Fixed cost =$1,000
Having gotten our fixed cost and variable cost per machine hour, we can estimate the total utility cost for 18,000 machine hours by using this formula:
y = a + b(x)
Where y is the total cost, a the fixed cost, b the variable cost per unit and x the activity level.
y = $1,000 + $0.2(18,000)
y = $1,000 + 3,600
y = $4,600.
Many business people believe that marketing should focus on factors other than financial goals, such as ___.
Answer:
Corporate citizenry
Explanation:
Many business people believe that marketing should focus on factors other than financial goals, such as Corporate citizenry
Marketing's focus should not be solely on financial goals. Other important factors can include brand reputation, customer satisfaction, sustainability, and social impact. These elements help establish a positive image, customer loyalty, and contribute to societal good.
Explanation:Many business people believe that marketing should focus on a variety of factors beyond just financial goals. These alternative focal points can include elements such as brand reputation, customer satisfaction, sustainability efforts, and social impact. For example, a business can focus on increasing its brand reputation by ensuring high-quality services or products or good team processes. Customer satisfaction is another vital aspect. Businesses may focus on customer feedback and experiences to improve and meet their needs. Sustainability efforts are another focus area, with businesses emphasizing environmentally friendly practices. Lastly, many businesses aim to have a positive social impact by contributing to the community or society at large.
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Apex Fitness Club uses straight-line depreciation for a machine costing $23,860, with an estimated four-year life and a $2,400 salvage value. At the beginning of the third year, Apex determines that the machine has three more years of remaining useful life, after which it will have an estimated $2,000 salvage value.
Compute (1) the machineâs book value at the end of its second year and (2) the amount of depreciation for each of the final three years given the revised estimates.
The book value of the machine at the end of the second year is $12,630. The amount of depreciation for each of the final three years is $3,876.67.
Explanation:To compute the book value at the end of the second year, we need to calculate the depreciation expense for the first two years and subtract it from the initial cost of the machine. The depreciation expense per year is calculated by subtracting the salvage value from the initial cost and dividing by the estimated life of the machine. In this case, the depreciation expense per year is ($23,860 - $2,400) / 4 = $5,615. The depreciation expense for the first two years is $5,615 * 2 = $11,230. Therefore, the book value at the end of the second year is $23,860 - $11,230 = $12,630.
To calculate the amount of depreciation for each of the final three years using the revised estimates, we need to calculate the new depreciation expense per year for the remaining useful life of the machine. The new salvage value is $2,000, and the remaining useful life is three years. Therefore, the new depreciation expense per year is ($12,630 - $2,000) / 3 = $3,876.67. The amount of depreciation for each of the final three years is $3,876.67.
Struggling with this one
Job-specific human capital. In this problem, based on a simplified
version of the model in Bhattacharya and Sood (2006), we will explore how linking employment and health insurance provision can (partially) solve the adverse selection problem if the labor market is competitive. Suppose that there are two types of workers - sickly workers with probability ps of falling ill over the course of the next year, and robust workers with probability pr < ps of falling ill. Employers cannot observe whether a worker is sickly or robust, and because of U.S. law they can only decide to offer health insurance to allof their workers, or none at all. We will assume that a just-hired employee is less productive than an employee who has more experience; let MPn be the marginal value product of new employees, and MPe > MPn be the marginal value product of experienced employees. In this simple model, marginal value product depends only on experience, not on whether a worker is sickly or robust.
(a) Consider an employer deciding whether to hire a new employee who will produce a marginal value product of MP. If the employer offers income and no health insurance, what wage, w, will the employer have to pay the employee in a competitive labor market? What would happen if the employer offered the employee less? What would happen if the employer offered the employee more?
Answer:
The wage of the marginal employee is related wiht the marginal productivity of this employee
Explanation:
If the employer offer less, the employer can hire more employees, an the marginal productivity of the employees will decreases, and the employer will fire the employees and hire new ones, but if the employer offer more, it will cause losses, and the employer will fire this marginal employee and hire a new one. The wage it is determined by the average productivity, if there are to much sickly workers, the average productivy will be low, also the wage that the employer will offer.
Final answer:
In a competitive labor market, an employer must pay a competitive wage if not offering health insurance, balancing the risk of paying too much or too little based on their capacity to attract skilled workers while managing adverse selection in health insurance.
Explanation:
In a competitive labor market, an employer deciding to hire a new employee and offer a marginal value product of MP without health insurance must pay a wage, w, that reflects the going market rate for the job, skill level, and conditions, including the lack of health insurance benefits. If the employer offers less than this market rate, potential employees might choose to work elsewhere where they can get a better package, leading to the employer not being able to attract enough skilled workers. Conversely, if the employer offers more, they might attract a higher caliber of applicants, but it might also lead to increased labor costs that are not sustainable in the long run. Given the complexities of the health insurance market, employers are faced with the decisions of either offering health insurance to all employees or none, due to U.S. law restrictions, which plays a significant role in their ability to manage adverse selection problems and compete for talent in cases where job-specific human capital is inherently intertwined with employees' health status.
e) List and describe six reasons why information systems are so important for business today.
Answer:
operational Excellence
New Product, Services & Business models
Customer & Supplier Intimacy
Operational excellence
Improved decision making
Competitive advantage
Survival
Explanation:
1) Operational Excellence – Information systems are essential tools available to managers in order to achieve optimum levels of efficiency and productivity in business operations thereby higher profitability.
2) New product services and business models – They play a vital role in the creation of new products and services. New business models help to create,describe how a company produce, create and sell the products for profitability.
3) Customer and Supplier intimacy – Information system provide the foundation of customer satisfaction. they make sure a business serves its customers well, thereby improving customer satisfaction that will enable customer to purchase more and generate revenue
4) Improved decision making – they generate real time data from the marketplace when making decision
5) Competitive advantage – Information System help in doing things better than competitors, charging less for superior products, and responding to customers and suppliers in real time all add up to higher sales, and higher profits
6) Day to Day survival – Information System help to provide ease in business
information systems are so important for business today. Information systems are crucial instruments managers have at their disposal for achieving the highest levels
What is business?An innovative company or group that engages in professional activities is referred to as a business. They could be industrial, commercial, or something else. Businesses that are for-profit operate to make a profit, whereas those that are nonprofit do so to further a philanthropic cause.
1) Operational Excellence - Information systems are crucial instruments managers have at their disposal for achieving the highest levels of productivity and efficiency in business operations, which leads to increased profitability.
2) New product, service, and business model development - These factors are crucial in the development of new goods and services. In order to design, explain, create, and sell items profitably, new business models are helpful.
3) Closeness between customers and suppliers - Information systems serve as the cornerstone of client happiness. They ensure a company provides excellent customer service, increasing client happiness and encouraging increased sales and revenue.
4) Better decision-making: They obtain real-time market data when making decisions.
5) Competitive advantage: Information systems facilitate greater performance.
Therefore, In today's commercial world, information systems are crucial. Information systems are important tools for managers.
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You are giving a tour of businesses to several classical musicians from China. One of the Chinese in the tour group has asked you to define the purpose of business. How should you answer this question?
Answer:
Purpose of business is to increase general well being of people by selling goods and services.
Explanation:
The main purpose of business is to increase well being of people, make profits for its stakeholders and offering value for money to its customers or clients through products and or services. The products and services provided by the company should not harm its customers and clients instead these products and services should provide benefits to its users and satisfy their needs. While making profits a company should keep scarce resources in mind so the needs of the future generation is not compromised also it does not harm the environment by its poisonous wastage. Every business requires some form of investment as an input though which quality output can be provided to its customers and clients.
Economists who asset that the AS curve is vertical believe that changes in Real GDP originate only on the _____________of the economy; so government policy that is intended to impact the ____________________ of the economy will change only ______________, not ________________.a. demand side; supply side; Real GDP; pricesb. demand side; supply side; prices; Real GDPc. supply side; demand side; Real GDP; pricesd. supply side; demand side; prices; Real GDP
Answer:
D. Supply side, Demand side, Prices, Real GDP
Explanation:
Economists who asset that the AS curve is vertical believe that changes in Real GDP originate only on the Supply side of the economy; so government policy that is intended to impact the Demand side of the economy will change only Prices, not Real GDP.
Answer:
D
Explanation:
Economists who asset that the AS curve is vertical believe that changes in Real GDP originate only on the supply side of the economy; so government policy that is intended to impact the demand side of the economy will change only prices, not Real GDP.