The detailed answer provides the specific journal entries that Gless and Century would make for the issuance of bonds, semi-annual interest payment, and conversion of bonds into common stock.
Explanation:Journal Entries for Issuance, Interest Payment, and ConversionThe following are the responses to your requirements:
For the issuance of the bonds by Gless, the journal entry would be:https://brainly.com/question/31782926
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here are the journal entries for the given transactions:
1. **Issuance of Convertible Bonds by Gless and Purchase of Bond Investment by Century:**
Gless Textiles:
```
Dr Cash $28,280,000 ($28 million * 101%)
Cr Bonds Payable $28,000,000
Cr Premium on Bonds Payable $280,000 (difference between cash received and face value)
```
Century Services (20% of $28 million):
```
Dr Investment in Bonds $5,656,000 (20% * $28 million * 101%)
Cr Cash $5,656,000
```
2. **Interest Payment on June 30, 2025:**
Gless Textiles:
```
Dr Interest Expense $980,000 ($28 million * 7% * 6/12)
Cr Cash $980,000
```
Century Services (20% of interest received):
```
Dr Cash $196,000 (20% * $980,000)
Cr Interest Revenue $196,000
```
3. **Conversion of Bonds on July 1, 2026:**
First, calculate the book value of the bonds to determine the entry:
Book Value per Bond = (Face Value + Premium) / Number of Bonds = ($1,000 + $280) / 1 = $1,280 per bond
Century Services:
```
Dr Bonds Payable $1,120,000 (20% * 40 * $1,280)
Cr Common Stock $800,000 (20% * 40 * $33)
Cr Paid-In Capital in Excess of Par $320,000 (difference between book value and amount credited to common stock)
```
Gless Textiles (eliminating the bonds):
```
Dr Bonds Payable $28,000,000
Cr Common Stock $20,000,000 (40 * $500,000)
Cr Paid-In Capital in Excess of Par $8,000,000 (difference between book value and amount credited to common stock)
```
These journal entries reflect the issuance of the bonds, interest payment, and conversion of bonds for Gless Textiles and Century Services as per the given information.
Hospital decides to redo its kitchen with new flooring, cabinets, counters, and appliances. The hospital compiles a description of the project and then asks sellers to submit bids. After determining the most attractive bids, the hospital will then work with two or three companies to determine who will get the contract. This is an example of using ____ for a purchase decision.
Answer:
Negotiation
Explanation:
Negotiation -
It refers to the conversation between two or more people or parties in order to mutually resolve any conflict or fued , is referred to as negotiation .
The practice is mutually performed by both the parties .
The mutual understanding between the people or parties benefits both the parties in a very fair and equal manner .
Hence , from the given scenario of the question ,
The correct answer is negotiation .
During 2018, its first year of operations, Pave Construction provides services on account of $152,000. By the end of 2018, cash collections on these accounts total $106,000. Pave estimates that 30% of the uncollected accounts will be bad debts. Required: 1. Record the adjustment for uncollectible accounts on December 31, 2018. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)
The adjustment for noncollectable accounts on December 31, 2018:
Debit Bad Debts Expense $13,800
Credit Allowance for Doubtful Account $13,800
Explanation:
In Pave Construction, 2018 is the first year of operations. The company provides services on account of $152,000.
By the end of 2018, cash collections on these accounts total $106,000.
At the end of 2018, Accounts Receivable (the uncollected accounts) has debit balance of $46,000 ($152,000 - $106,000 = $46,000)
Pave estimates that 30% of the uncollected accounts will be bad debts
Bad Debts Expense = 30% x $46,000 = $13,800
The adjusting entry to record the bad debts expense will be:
Debit Bad Debts Expense $13,800
Credit Allowance for Doubtful Account $13,800
Recent financial statements of General Mills, Inc. report net sales of $12,442,000,000. Accounts receivable are $912,000,000 at the beginning of the year and $953,000,000 at the end of the year. Compute General Mills' accounts receivable turnover. (Round answer to 2 decimal places, e.g. 15.25.) Accounts receivable turnover times LINK TO TEXT Compute General Mills' average collection period for accounts receivable in days. (Round answer to 2 decimal places, e.g 15.25.)
Answer:
General Mills' accounts receivable turnover: 13.34 times
General Mills' average collection period for accounts receivable in days: 27.36 days
Explanation:
The accounts receivable turnover is an efficiency ratio that measures how many times a company can collect its receivables or money owed by clients during the year.
Accounts receivable turnover is calculated by following formula:
Accounts Receivable Turnover = Net Credit Sales /Average Accounts Receivable
In there:
Average Accounts Receivable = (The beginning accounts receivable of the year balance + The ending accounts receivable of the year balance)/2
In General Mills, Inc.:
Average Accounts Receivable = ($912,000,000 + $953,000,000)/2 = $932,500,000
General Mills' accounts receivable turnover = $12,442,000,000/$932,500,000 = 13.34 times
General Mills' average collection period for accounts receivable in days = 365/Accounts receivable turnover = 365/13.34 = 27.36 days
To compute General Mills' accounts receivable turnover, we divide their net sales by the average accounts receivable. This gives us a value of 13.34. The average collection period for accounts receivable can be calculated by dividing 365 days by the accounts receivable turnover, resulting in an average collection period of 27.38 days.
Explanation:To compute General Mills' accounts receivable turnover, we use the formula:
Accounts Receivable Turnover = Net Sales / Average Accounts Receivable
Substituting the given values, we have:
Accounts Receivable Turnover = $12,442,000,000 / ((912,000,000 + 953,000,000) / 2)
Calculating the average accounts receivable, we find:
Accounts Receivable Turnover = $12,442,000,000 / 932,500,000 = 13.34 (rounded to 2 decimal places)
To calculate General Mills' average collection period for accounts receivable, we use the formula:
Average Collection Period = 365 days / Accounts Receivable Turnover
Substituting the found value, we have:
Average Collection Period = 365 / 13.34 = 27.38 (rounded to 2 decimal places)
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Based on your readings and any other research, why do you think that women are especially affected by the "glass ceiling" at work? What can HR do to help?
Answer:
The women are especially affected by the glass ceiling at work because they face the promotion and pay gap in comparison to the men.
Explanation: organizations can reduce gender discrimination by focusing on
(a) HR policies (i.e., diversity initiatives and family-friendly policies) and closely related organizational structures, processes, and practices.
(b) HR-related decision-making and enactment.
(c) the organizational decision-makers who engage in such actions.
Another means to reduce gender discrimination in HR-related decision-making and enactment is to focus directly on reducing the hostile and benevolent sexist beliefs of organizational decision makers.
Explanation:
Research on sex generalizations proposes that sex inclination is an imperceptible boundary—the alleged biased based impediment—keeping ladies from breaking into the most elevated levels of the board in business associations. Utilizing information from a state-based proficient HR association, we explored this marvel in the field of HR the executives. Expanding on the absence of fit model of sexual orientation segregation and past research, we tried two speculations: that ladies in HR are bound to be gathered in lower-level managerial situations in associations that underline representative contribution (in view of a related accentuation on characteristically ladylike managerial capacities) and that ladies in HR additionally are bound to be amassed in lower-level managerial situations in associations that underscore vital human asset the board (as a result of a related accentuation on characteristically manly attributes).
An architecture firm earned earned $1520 for architecture services provided with the fee to be paid in the future. No entry was made at the time the service was provided. If the fee has not been paid by the end of the accounting period and no adjusting entry is made, this would cause:
Answer:
Revenue is understated by $1520
Profit is understated by $1520
Accounts receivable is understated by $1520
Retained earnings is understated by $1520
Explanation:
The guideline on recognition of revenue is accrual basis of accounting, which is that revenue is recognized when it has been earned, in other words when the business has discharged its obligation to the other party by a way of delivering goods or services to clients.
Specifically,by not recording an adjusting for the $1520 revenue earned but not yet received,the revenue for the period would be understated by $1520 as well as profit for the year.
Also,asset,accounts receivable would also be understated by $1520 including retained earnings at the end of the year
In May 2005, a 1963 painting by Andy Warhol called Liz was sold in New York for $12.6 million. 1.) Using the line drawing tool, illustrate the supply curve that would be consistent with a price of $12.6 million. Properly label this line.
Answer:
Since there is only one painting by Andy Warhol called liz, the supply is fixed at 1 unit. The demand and supply curve meet at E to determine the price of 12.6 million. The graph is plotted on price and quantity demanded. Therefore the line, illustrate the supply curve is consistent with a price of $12.6 million.
The supply curve for a one-of-a-kind artwork like 'Liz' by Andy Warhol would be a vertical line. The quantity supplied wouldn't increase regardless of the price because there's only one original. So, at the sale price of $12.6 million, the supply curve is a straight vertical line at the quantity of 1.
Explanation:The question relates to the concept of supply curves in economics. A supply curve illustrates the quantity of a good a producer is willing to produce and sell at different price points. In the case of the Andy Warhol painting, given that it was a one-off piece, the supply is completely inelastic which means it is represented by a vertical line on a supply curve diagram.
In a typical supply curve, the x-axis represents the quantity and the y-axis represents a price. However, for the painting 'Liz' by Andy Warhol, since there's only one original in existence, irrespective of price, the quantity supplied wouldn't increase. Therefore, the line illustrating the supply curve for the scenario you provided (the sale of the painting for $12.6 million) would be a straight vertical line at the quantity of 1.
With the price of $12.6 million on the y-axis and the quantity of 1 (representing the single unique painting) on the x-axis, your supplier curve would be a straight vertical line.
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Use the following information to answer the question about BobCat Co. at the end of 2017:
Accounts receivable $44,890
Accounts payable 6,405
Cash 16,070
Common stock 42,500
Long-term notes payable 20,600
Merchandise inventory 28,475
Salary Payable 28,170
Retained earnings 50,465
Prepaid insurance 2,365
Current liabilities are:
A. 6,405
B. 20,600
C. 34,575
D. 36,940
Answer:
c. $34,575
Explanation:
Data provided in the question
Accounts receivable = $44,890
Accounts payable = $6,405
Cash = $16,070
Common stock = $42,500
Long-term notes payable = $20,600
Merchandise inventory = $28,475
Salary Payable = $28,170
Retained earnings = $50,465
Prepaid insurance = $2,365
So, The computation of the current liabilities are as follows
= Accounts payable + salary payable
= $6,405 + $28,170
= $34,575
Therefore, the current liabilities only includes the account payable and the salary payable.
If each unit of output can be sold at a price of $5 and incurs variable costs which are constant at $3 per unit, and if the fixed costs already incurred are $15,000, then the break-even output is:
Answer:
Break-even point= 15,000/ (5 - 3)= 7,500 units
Explanation:
Giving the following information:
Each unit of output can be sold for $5, variable costs are constant at $3 per unit, and if the fixed costs are $15,000.
We need to use the following formula:
Break-even point= fixed costs/ contribution margin
Break-even point= 15,000/ (5 - 3)= 7,500 units
Answer:
the break-even output is 5,000 units
Explanation:
Total cost = fixed cost + variable cost = $15,000 + number of units * $3
Sales = number of units * price = number of unit * $5
Break-even output is number of output which generate sales equals to total cost
Sales = Total cost
⇔ number of unit * $5 = $15,000 + number of units * $3
⇔ number of unit* (5-3) = 15,000
⇒ number of unit = 15000/3 = 5,000
You are appointed secretary of the treasury of a recently independent country called Rugaria. The currency of Rugaria is the lav. The new nation began fiscal operations this year and the budget situation is that the government will spend 10 million lavs and taxes will be 9 million lavs. The 1-million-lav difference will be borrowed from the public by selling 10 year government bonds paying 5 percent interest. The interest on the outstanding bonds must be added to spending each year, and we assume that additional taxes are raised to cover that interest. Assuming that the budget stays the same except for the interest on the debt for 10 years, what will be the accumulated debt? What will size of the budget be after 10 years?
Answer:
A) The accumulated debt will be = lav 1 million
B) The size of the budget be after 10years = lav 10.63million
Explanation:
The government will spend 10 million lav and tax collection will be 9 million lav in the new nation budget situation.
accumulated debt is the deficit in the budget.
Budget deficit = Government Spending - Taxes
= lav 10,000,000 - lav 9,000,000
= lav 1,000,000
Government plans to borrow 1,000,000 by issuing 10yrs bond with 5% interest. The 5% Interest will be part of government spending each year.
Interest amount to be paid ===> (5/100)*1,000,000 = 0.05 milion lav
Future Value = PV* [tex]( 1 + interest )^{years}[/tex]
= [tex]1 (1 + 0.05)^{10}[/tex]
= 1.63 million
∵ after 10yrs, 1 million bonds will become 1.63 million and interest is collected in form of taxes. additional tax:
Additional Tax = 1.63 - 1.00
= 0.63 million (paid to tax holder).
Calculate the total budget size:
Total Budget Size = 10 + 0.63
= 10.63 million
To address the fiscal operations challenge in Rugaria, an analysis was conducted to determine the accumulated debt and budget size after 10 years, considering a fixed budget with the inclusion of compounded annual interest on borrowed funds. The accumulated debt was calculated to be approximately 1.63 million lavs after 10 years, and the budget size after 10 years would be slightly higher than 10 million lavs due to the interest.
Explanation:To calculate the total accumulated debt after 10 years, we apply the formula for the future value of an annuity, which in this simplified example, due to raising taxes to cover interest, effectively compounds the interest on the initial debt:
Debt accumulation after Year 1 = 1 million lavsAnnual Interest = 5% of total debt (compounded annually)Accumulated debt after 10 years = Principal * (1 + rate)^n, where n is the number of years and rate is the annual interest rate as a decimal.Thus, after 10 years, the accumulated debt would be 1 million * (1 + 0.05)^10 = 1.63 million lavs. Therefore, the accumulated debt after 10 years is approximately 1.63 million lavs. Adding the annual interest for the 10th year to the base spending gives the budget size after 10 years, which would be slightly higher than 10 million lavs due to the ongoing interest payments.
statement. Credit sales $678,000 Bad debt expense as a percentage of sales 2% Write-off of accounts receivable $1,000 Tax rate 30% Estimated tax payment $31,000 Incorrect income statement, for the year ended December 31 Sales $678,000 Expenses 549,200 Bad debt expense 1,000 Pretax income 127,800 Tax expense 38,340 Net income 89,460 1) What is the allowance for doubtful accounts in 20X1?
Answer:
12,560 allowancwe for doubtful accounts
Explanation:
The company will recognize an allowance for 2% of the credit saleS:
678,000 x 2% = 13,560
Now, we write-off for 1,000 this decrease the allowance
Thhs, the balance will be for the difference
13,560 - 1,000 = 12,560
After saving money in her piggy bank for 3 years, Beverly decided to deposit $5,000 of the money in the Millertown Bank. If the bank were fully "loaned out" and the required reserve ratio were 20%, then the maximum change in the money supply due to this deposit would be $25,000. $20,000. $5,000. $4,000. $1,000.
Answer:
$25,000
Explanation:
The computation of the maximum change in money supply is shown below:
= Deposit amount × money multiplier
= $5,000 × 5
= $25,000
Where, money multiplier is
= 1 ÷ required reserve ratio
= 1 ÷ 20%
= 5
So by multiplying with the deposit amount with the money multiplier we can get the maximum change in the money supply
Use your newly found knowledge to explain credit card disclosure statements to someone who has never received one. Write a one to two paragraph explanation that teaches how to read a credit card disclosure statement. Include a minimum of four of the terms from lesson 4.08 in your explanation
Answer:
Credit card disclosure statements include almost everything you need to know about credit cards. The statements include the APR rates, Annual Fee, Late Fees, and Introductory Rates. Annual Percentage Rates are one of the most important things to do with credit cards. They are the costs of the loan each year expressed as a percentage. Loans are used for pretty much everything nowadays. Most people only use them for things like buying cars or buying a house. Lenders for loans often check your credit score, years of employment and other things. Having credit card debt affects your ability to get loans. That is why it’s important to pay off credit cards on time rather then late. Disclosure statements help everyone figure out the information on their credit card and their payments.
You are the head of HR at an organic foods manufacturer. Your goal is to enable HR to transform the functioning of the company to a dramatically higher level of productivity, quality, and efficiency through HRX—your HR excellence program. In mapping out the design of HRX, you know that having a good action plan for implementation will be key to the long-term success of the program as well. Which of the following actions would be critical to the successful implementation of HRX?
a. Implement a 10% increase in the base salary of all employees.
b. Allocate sufficient resources and support for the HRX initiative.
c. Make sure to keep track of total expenditures on the HRX initiative.
d. Do not institute the use of teams with this initiative.
Answer:
Allocate sufficient resources and support for the HRX initiative ( B )
Explanation:
Allocating sufficient resources and support for the HRX initiative is a very good step in the right direction as the HR Manger in trying to implement the HRX initiative and also for the long term success of this Initiative as well.
since The main goal of the Head of the Human resources department is to transform the company's production level to a higher level of productivity in a quicker timer frame, dedicating more resources and support to the initiative will help to speed up activities and the company will start producing at a very fast rate. having to increase salary will not help because the workers can only do what they can do they can't go beyond their limit hence there will be health emergencies.
The Manufacturing Overhead account shows debits of $30,000, $24,000, and $28,000 and one credit for $86,000. Based on this information, manufacturing overhead Select one: a. has been overapplied b. has been underapplied c. has not been applied d. shows a zero balance
Answer:a) has been over applied
hope this helps
Explanation:
Answer:A. has been overapplied.
Explanation:An overapplied Manufacturing overhead means that the net credit to the Manufacturing overhead account is more than the net debits as seen in this case where there were debits as follows;
$30,000,$24,000 and $28,000 which is equal to a total net debit of $82,000.
The total net credit in the Manufacturing overhead was $86,000.
THE EXCESS APPLIED TO OVERHEAD IS TOTAL CREDIT MINUS TOTAL DEBITS
=$86,000-82,000
=$4,000.
THIS MEANS THAT THE MANUFACTURING OVERHEAD HAS BEEN OVERAPPLIED WITH A VALUE OF $4,000.
Find a journal article online about a company that recently added or dropped a product or service, or a company that decided to outsource. In the subject line of your post, include the name of the article that you read. Post a link to that article with your initial post, and provide a summary and a reaction to the article. The summary should be approximately 250 words, and the reaction should be approximately 150 words. The summary should describe the major points of the article, and the reaction should demonstrate your interpretation of the article and how you can apply that knowledge. Do not choose an article that one of your classmates has already posted. To participate in follow-up discussion, choose one of the articles that a classmate has posted and provide your own reaction to it.
Although we cannot perform the research for you, and the reaction is a personal question that only you can answer, we can provide an example of a company that recently dropped a product or service.
An example of this is the lingerie company Victoria's Secret. Victoria's Secret has decided to drop its annual fashion show. This was an iconic part of the company, and the move came after the company argued that it wanted to revitalize and modernize its approach to the current market.
During the period, Sanchez Company sold some excess equipment at a loss. The following information was collected from the company’s accounting records:
From the Income Statement
Depreciation expense $ 870
Loss on sale of equipment 2,900
From the Balance Sheet
Beginning equipment 20,300
Ending equipment 11,000
Beginning accumulated depreciation 1,980
Ending accumulated depreciation 1,750
No new equipment was bought during the period.
Required:
1. For the equipment that was sold, determine its original cost, its accumulated depreciation, and the cash received from the sale. (Use the equipment and accumulated depreciation T-accounts to infer the book value of the equipment sold.)
2. Sanchez Company uses the indirect method for the Operating Activities section of the cash flow statement. What amount related to the sale would be added or subtracted in the computation of Net Cash Flows from Operating Activities? (Input the amount as positive value.)
3. What amount related to the sale would be added or subtracted in the computation of Net Cash Flows from Investing Activities? (Input the amount as positive value.)
Answer:
Part 1
Cost of Equipment Sold = $9300
Accumulated Depreciation of Equipment Sold = $ 1100
Cash received from Sale = $5300
Part 2
Net Cash Flows from Operating Activities
Add Back (Positive) to Operating Profit for the year : Loss on sale of equipment $ 2900
Part 3
Net Cash flows from Investing Activities
Add (Positive) Proceeds from Sale of Equipment $ 5300
Explanation:
Part 1
Cost of Equipment Sold:
The figure is obtained from Equipment At Cost Account.
Open the Account as follows:
Beginning Balance $ 20300 (debit), Ending Equipment $ 11000, Balancing figure $ 9300 (20300-11000) is the cost of equipment sold.
Accumulated Depreciation of Equipment Sold
The figure is obtained from Accumulated Depreciation.
Open the Account as follows:
Beginning Balance $ 1980 (credit), Profit and loss - Depreciation $ 870 (credit), Ending Balance $ 1750 (debit), Balancing figure $ 1100 (1980+870-1750) is the Accumulated Depreciation on Equipment Sold
Cash Received on Sale
This figure is figure is obtained from Equipment Disposal Account.
Open the Account as follows:
Cost of Equipment Sold $ 9300 (debit), Accumulated depreciation on equipment sold $1100(credit),Loss on Sale of Equipment $2900(credit),the Balancing figure $5300 (9300-1100-2900)
Part 2
Loss on sale of Equipment is the only Income Statement Item affecting the Operating Activity of the Cash Flow Statement.
Add back to Operating profit since this is a non-cash item and was initially deducted in the calculation of Operating Profit.
Part 3
Sale of Equipment results in Cash Inflow and affects the Cash Flows from Investing Activities Section of Cash Flow Statement.
Hence a positive amount should be added to reflect this inflow.
The original cost of the equipment is $9,300, its accumulated depreciation is $1,100 and the cash received from the sale is $11,100. In the Operating Activities section of the cash flow statement, $870 (depreciation expense) would be added. In Investing Activities, $11,100 (cash inflow from the sale) is added.
Explanation:1. The original cost of the equipment can be determined by comparing the beginning and ending balances of the equipment. Here, the beginning equipment <>20,300, and the ending is $11,000, so: $20,300 - $11,000 = $9,300 (original cost).
The accumulated depreciation can be calculated by adding the depreciation expense for the period to the decrease in the accumulated depreciation on the balance sheet. Here, the depreciation expense is $870 and the decrease in accumulated depreciation is $1,980 - $1,750 = $230, so: $870 + $230 = $1,100. The cash received from the sale can be found by adding the loss on the sale to the book value of the equipment (original cost - accumulated depreciation): $9,300 - $1,100 + $2,900 = $11,100.
2. For the operating activities section, only the depreciation expense ($870) is added back to the Net Cash Flows as it is a non-cash expense. The loss on the sale of equipment is not absorbed here as it is taken into account in the investing activities section.
3. In the investing activities section, the cash inflow from the sale of the equipment ($11,100) would be added to the net cash flows. This reflects the company's generation of cash from selling its long-term assets.
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has sales of $15 million, total assets of $9 million, and total debt of $3.7 million. If the profit margin is 7 percent what is net income? What is ROE? What is ROA?
Answer:
Net Income = $ 1.05 million; you can calculate the amount using the profit margin which will be the 7% from the sales.
ROE = 19.8%, the formula is Net Income/Owners Equity. To obtain the amount for Owners Equity you can use the information provided using the Assets and the Total Debt, the difference will be the amount for Owners Equity $ 5.3million.
ROA = 11.7% , the formula is Net Income/Assets.
Sicora Inc. reported installment sales totaling $670,000 in its income statement for Year 1, its first year of operations. Sicora is not required to report installment sales income on its tax return until the cash is collected. Sicora will make the collections on these installment sales as follows: Year 1 $ 70,000 Year 2 130,000 Year 3 140,000 Year 4 160,000 Year 5 170,000 Total $ 670,000 The enacted tax rate is 30% in each of these years. What is the ending balance in the deferred tax liability account related to these installment sales at the end of Year 1?
The ending balance in the deferred tax liability account related to installment sales for Sicora Inc. at the end of Year 1 is $180,000, calculated by applying the 30% tax rate to the deferred income amount of $600,000.
Explanation:To calculate the ending balance in the deferred tax liability account for Sicora Inc. at the end of Year 1, we first identify the total installment sales which are not recognized for tax purposes in Year 1 because Sicora only recognizes income on cash received. The total installment sales are $670,000, but only $70,000 of that is collected in Year 1. Therefore, the deferred income on which taxes have not been paid is $670,000 - $70,000 = $600,000.
The deferred tax liability for Year 1 is then calculated based on the tax rate of 30% applied to the $600,000 of income that is deferred, which gives us a total deferred tax liability of $600,000 * 30% = $180,000.
This calculation is critical for understanding how installment sales and tax treatments influence a company's financial reporting and tax liability. Recognizing the deferred tax helps in aligning the tax expenses with the actual cash flow from sales, providing a more accurate financial position of the company.
Hitzu Co. sold a copier costing $4,800 with a two-year parts warranty to a customer on August 16, 2018, for $6,000 cash. Hitzu uses the perpetual inventory system. On November 22, 2019, the copier requires on-site repairs that are completed the same day. The repairs cost $209 for materials taken from the repair parts inventory. These are the only repairs required in 2019 for this copier. Based on experience, Hitzu expects to incur warranty costs equal to 4% of dollar sales. It records warranty expense with an adjusting entry at the end of each year.
1. How much warranty expense does the company report in 2018 for this copier?
2. How much is the estimated warranty liability for this copier as of December 31, 2018?
3. How much warranty expense does the company report in 2019 for this copier?
4. How much is the estimated warranty liability for this copier as of December 31, 2019?
5. Prepare journal entries to record (a) the copier’s sale; (b) the adjustment on December 31, 2018, to recognize the warranty expense; and (c) the repairs that occur in November 2018.
Answer:
1) $240 warranty expense
2) $240 warranty liaiblity
3) zero as decreases the warranty laibility
4) 240 beginning - 209 used = 31 ending
5)
cash 6,000 debit
sales revenues 6,000 credit
--to record sale--
warranty expense 240 debit
warranty liability 240 credit
--to record prevision for warranty expenses--
warranty liability 209 debit
inventory 209 credit
--to record use of the warranty from the customer--
Explanation:
1) sales x expected warranty = 6,000 x 0.04 = 240
2) it will be for the 240 as the accounting works with double-entry
1. In 2018, the company reports $240 as warranty expense for this copier. , 2. The estimated warranty liability for this copier as of December 31, 2018, is also $240. , 3. In 2019, the company reports $240 as warranty expense for this copier., 4. The estimated warranty liability for this copier as of December 31, 2019, is $480.
Explanation:1. The warranty expense that the company reports in 2018 for this copier is calculated by multiplying the dollar sales by the expected warranty cost percentage. In this case, the dollar sales is $6,000 and the expected warranty cost percentage is 4%. So, the warranty expense would be $6,000 x 4% = $240.
2. The estimated warranty liability for this copier as of December 31, 2018, is the warranty expense recognized in 2018. So, the estimated warranty liability would be $240.
3. The warranty expense that the company reports in 2019 for this copier is calculated in the same way as in 2018. The dollar sales is still $6,000 and the expected warranty cost percentage is still 4%. So, the warranty expense would be $6,000 x 4% = $240.
4. The estimated warranty liability for this copier as of December 31, 2019, would be the sum of the warranty expense recognized in 2018 ($240) and the warranty expense recognized in 2019 ($240). So, the estimated warranty liability would be $240 + $240 = $480.
5. Journal Entries:
(a) Copier Sale:Debit Cash $6,000
Credit Sales Revenue $6,000
(b) Adjustment on December 31, 2018:Debit Warranty Expense $240
Credit Estimated Warranty Liability $240
(c) Repairs in November 2019:Debit Warranty Expense $209
Debit Estimated Warranty Liability $209
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Canton Corp. produces a part using an expensive proprietary machine that can only be leased. The leasing company offers two contracts. The first (unit-rate lease) is one where Canton would pay $4 per unit produced, regardless of the number of units. The second lease option (flat-rate lease) is one where Canton would pay $60,000 per month, regardless of the number produced. The lease will run one year and the lease option chosen cannot be changed during the lease. All other lease terms are the same.
The part sells for $40 per unit and unit variable cost (excluding any machine lease costs) are $20. Monthly fixed costs (excluding any machine lease costs) are $200,000.
a. What is the monthly break-even level assuming:
1. The unit-rate lease?
2. The flat-rate lease?
b. At what volume would the operating profit be the same regardless of the lease option chosen?
c. Assume monthly volume of 20,000 units. What is the operating leverage assuming:
1. The unit-rate lease?
2. The flat-rate lease?
d. Assume monthly volume of 20,000 units. What is the margin of safety percentage assuming:
1. The unit-rate lease?
2. The flat-rate lease?
Answer:
Explanation:
a)
1. Unit rate lease
Unit Contribution margin = Unit Selling price – Unit Variable cost
= 40 - 24 = $16
Break even point (units) = Fixed cost/Contribution margin per unit
= 200,000/16 = 12,500
2. Flat rate lease
Unit Contribution margin = Unit Selling price – Unit Variable cost
= 40 - 20 = $20
Break even point (units) = Fixed cost/Contribution margin per unit
= 260,000/20 = 13,000
b.)
Let at X units produced profit margin is same under both the lease options
40X - 24X - 200,000 = 40X - 20X - 260,000
16X - 200,000 = 20X - 260,000
4X = 60,000
X = 15,000
If 15,000 units are produced, profit margin will be same under both the lease options.
c)
1. Unit rate lease
Contribution margin income statement
Sales (20,000 x 40) 800,000
Variable cost (20,000 x 24) - 480,000
Contribution margin 320,000
Fixed cost - 200,000
Operating income 120,000
Operating leverage = Contribution margin/Operating income
= 320,000/120,000 = 2.67
2. Flat rate lease
Contribution margin income statement
Sales (20,000 x 40) 800,000
Variable cost (20,000 x 20) - 400,000
Contribution margin 400,000
Fixed cost - 260,000
Operating income 140,000
Operating leverage = Contribution margin/Operating income
= 400,000/140,000 = 2.86
d)
1. Unit rate lease
Margin of safety = Actual sales - Break even sales
= 20,000 x 40 - 12,500 x 40
= 800,000 - 500,000
= $300,000
Margin of safety (%) = Margin of safety/Actual sales
= 300,000/800,000 = 37.5%
2. Flat rate lease
Margin of safety = Actual sales - Break even sales
= 20,000 x 40 - 13,000 x 40
= 800,000 - 520,000
= $280,000
Margin of safety (%) = Margin of safety/Actual sales
= 280,000/800,000
= 35%
West Virginia has one of the highest divorce rates in the nation with an annual rate of approximately 5 divorces per 1000 people (Centers for Disease Control and Prevention website, January 12, 2012). The Marital Counseling Center, Inc. (MCC) thinks that the high divorce rate in the state may require them to hire additional staff. Working with a consultant, the management of MCC has developed the following probability distribution for x = the number of new clients for marriage counseling for the next year.
West Virginia has one of the highest divorce rates
a. Is this probability distribution valid?
SelectYesNoItem 1
Explain.
f(x) Selectgreater than or equal to 0less than or equal to 0greater than or equal to 1less than or equal to 1Item 2
?f(x) Selectequal to 1not equal to 1greater than 1less than 1Item 3
b. What is the probability MCC will obtain more than 30 new clients (to 2 decimals)?
c. What is the probability MCC will obtain fewer than 20 new clients(to 2 decimals)?
d. Compute the expected value and variance of x.
Expected value clients per year
Variance squared clients per year
Answer:
a. Yes. It is a probability density function because \sum f(x) =1
. b. probability MCC will obtain more than 30 new clients=P(40)+P(50)+P(60)= 0.20+0.35+0.20=0.75
c. probability MCC will obtain fewer than 20 new clients= P(10)= 0.05
d.
x f(x) x*f(x) x*x*f(x)
10 0.05 0.5 5
20 0.1 2 40
30 0.1 3 90
40 0.2 8 320
50 0.35 17.5 875
60 0.2 12 720
1 43 2050
expected value = \sum xf(x) = 43
Variance = 2050-43^2= 201
Explanation:
Harte Systems, Inc., a maker of electronic surveillance equipment, is considering selling to a well-known hardware chain the rights to market its home security system. The proposed deal calls for the hardware chain to pay Harte $30,000 and $25,000 at the end of years 1 and 2 and to make annual year- end payments of $15,000 in years 3 through 9. A final payment to Harte of $10,000 would be due at the end of year 10.
a. Lay out the cash flows involved in the offer on a time lin
b. If Harte applies a required rate of return of 12% to them, what is the present value of this series of payments?
c. A second company has offered Harte an immediate one-time payment of $100,000 for the rights to market the home security system. Which offer should harte accept?
Answer:
Instructions are listed below.
Explanation:
Giving the following information:
The proposed deal calls for the hardware chain to pay Harte $30,000 and $25,000 at the end of years 1 and 2 and to make an annual year-end payments of $15,000 in years 3 through 9. The final payment to Harte of $10,000 would be due at the end of year 10.
1)
Cash flows:
Year 1= 30,000
Year 2= 25,000
Year 3= 15,000
Year 4= 15,000
Year 5= 15,000
Year 6= 15,000
Year 7= 15,000
Year 8= 15,000
Year 9= 15,000
Year 10= 10,000
2) To calculate the present value we need to use the following formula for each cash flow:
PV= FV/(1+i)^n
Year 1= 30,000/1.12= 26,785.71
Year 2= 25,000/1.12= 22,321.43
Year 3= 15,000/1.12= 13,392.86
....
Year 10= 10,000/1.12^10= 3,219.73
PV= $104,508.27
3) The present value of cash inflows is higher than $100,000. It is more convenient to decline the $100,000.
Assume that currently banks pay 2% interest on money that customers deposit in savings accounts. As the overall amount of money held in savings accounts increases, in financial markets Group of answer choices both supply and demand are increasing. the supply of savings decreases. the demand for savings increases. the supply of savings increases.
Answer:
The supply of savings increases.
Explanation:
We know that the supply of loanable funds is dependent upon the amount of deposits in the savings account. Supply curve of loanable funds represents the direct relationship between the quantity supplied and the interest rate. It is a upward sloping curve which indicates that an increase in the interest rate will lead to increase the quantity supply of loanable funds.
There is a change in the supply of loanable funds if there is any change in the savings behavior of the customers. If the savings of the customers increases then as a result the supply of savings also increases.
Smith Company reported pretax book income of $419,000. Included in the computation were favorable temporary differences of $53,800, unfavorable temporary differences of $21,900, and favorable permanent differences of $41,900. Smith's deferred income tax expense or benefit would be:
Answer:
Smith’s deferred income tax expense or Benefit would be $10,846
Explanation:
In this question, we are asked to calculate Smith’s deferred income tax expense or benefit. We proceed as follows:
Firstly, we calculate the net favorable temporary difference.
Mathematically, the net favorable temporary difference = Favorable temporary difference - Unfavorable temporary difference.
From the question, we can identify that:
Favorable temporary difference = $53,800
Unfavorable temporary difference = $21,900
Hence, the net favorable temporary difference = $53,800 - $21,900 = $31,900
Now, using a tax rate of 34%, Smith’s deferred income tax expense or Benefit would be 34% of $31,900
= 34/100 * 31,900 = $10,846
Spears Co. will receive SF1,000,000 in 30 days. Use the following information to determine the total dollar amount received (after accounting for the option premium) if the firm purchases and exercises a put option: Exercise price Premium Spot rate Expected spot rate in 30 days 30-day forward rate $.61 $.02 $.60 $.56 $.62
a. $610,000
b. $630,000
c. $590,000
d. $600,000
Answer:
Total dollar amount received=$590,000
Option C is correct ($590,000)
Explanation:
Given Data:
Exercise Price=$0.61
Premium Price=$0.02
Spot Rate=$0.60
Expected spot rate in 30 days=$.56
30-day forward rate =$0.62
Required:
Total dollar amount received=?
Solution:
We have to account for premium:
Total dollar amount received=(Exercise Price-Premium Price)*SF1,000,000
Total dollar amount received=($0.61-$0.02)*SF1,000,000
Total dollar amount received=$590,000
Option C is correct ($590,000)
Answer:
C)$59000
Explanation:
We will use the 30 day forward rate to calculate the amount in dollars and also account for the premium and it is a put option we subtract the premium
Firstly subtract the premium and put uses the exercise price
$0.61-$0.02=$0.59
=SF1000000*($0.59)
=$590000
On January 1, 2017, Doone Corporation acquired 80 percent of the outstanding voting stock of Rockne Company for $688,000 consideration. At the acquisition date, the fair value of the 20 percent noncontrolling interest was $172,000 and Rockne's assets and liabilities had a collective net fair value of $860,000. Doone uses the equity method in its internal records to account for its investment in Rockne. Rockne reports net income of $320,000 in 2018. Since being acquired, Rockne has regularly supplied inventory to Doone at 25 percent more than cost. Sales to Doone amounted to $380,000 in 2017 and $480,000 in 2018. Approximately 30 percent of the inventory purchased during any one year is not used until the following year. What is the noncontrolling interest's share of Rockne's 2018 income? Prepare Doone's 2018 consolidation entries required by the intra-entity inventory transfers.
Final answer:
The noncontrolling interest's share of Rockne's 2018 net income is $64,000. Done needs to prepare consolidation entries to adjust for intra-entity inventory mark-up, which includes a COGS decrease and an increase in Inventory by $28,500 for 2017 inventory used in 2018 and a future $36,000 adjustment for the inventory purchased in 2018 to be used in 2019.
Explanation:
The noncontrolling interest's share of Rockne's 2018 net income can be calculated as follows:
First, we find the total net income for 2018 - which is given as $320,000. The noncontrolling interest owns 20% of Rockne, so we multiply the total net income by 20%:
$320,000 × 20% = $64,000
This is the amount attributed to the noncontrolling interest.
Next, we prepare Doone's 2018 consolidation entries required by the intra-entity inventory transfers. Since Rockne sells inventory to Doone at a markup of 25%, part of the 2018 income from Rockne to Doone is overstated.
The markup from 2017 sales that carried over to 2018 is:
$380,000 × 25% = $95,000
The inventory from 2017 not used until 2018 is 30% of this amount:
$95,000 × 30% = $28,500
Therefore, in 2018, when preparing the consolidation entry, the Cost of Goods Sold (COGS) will be reduced (25% markup adjustment) by $28,500, and the Inventory account will be increased by the same amount.
For the 2018 sales to Doone, the markup is:
$480,000 × 25% = $120,000
And the inventory remaining at the end of 2018 that will be used in 2019 is 30% of the 2018 sales:
$120,000 × 30% = $36,000
This $36,000 will be used to adjust the 2019 COGS and Inventory accounts similarly.
The bank statement _________.A.may show service charges, EFT collections from customers, and EFT withdrawals B.does not include an ending balance of the customer's account because the bank cannot determine which checks have been cashed during the statement periodC.must include physical copies of canceled checksD.must be mailed to customers each month
Answer:
The correct answer is letter "A": may show service charges, EFT collections from customers, and EFT withdrawals.
Explanation:
A bank statement shows account holders' transactions during a certain period of time that tends to be one (1) month. This report shows the current balance in the customers' accounts including charges, Electronic Funds Transfers (EFT) collections, and withdrawals as well as payments representing inflows.
Bank statements are useful for clients so they can have control of the expenditures of their accounts.
A statistical test with a rejection region comprised of both tails of the sampling distribution of the test statistic is called a (an) _________ test. (Choose all that apply)
Answer:
two tailed and non- directional
Explanation:
A statistical test with a rejection region comprised of both tails of the sampling distribution of the test statistic is called a two tailed and a non-directional test.
Final answer:
A statistical test with rejection regions on both tails of the sampling distribution is a two-tailed test, used when the direction of the difference is not specified and is more conservative, requiring a larger difference for rejecting the null hypothesis.
Explanation:
A statistical test with a rejection region comprised of both tails of the sampling distribution of the test statistic is called a two-tailed test. In a two-tailed test, the alternative hypothesis (HA) indicates that the parameter of interest is different from the null hypothesis value but does not specify the direction of the difference. This means we look for evidence that the parameter is either greater than or less than the null hypothesis value, which leads to rejection regions on both ends (or tails) of the sampling distribution curve. For a significance level (a) of 0.05, the rejection regions combined account for 5% of the area under the curve, with 2.5% in each tail. This approach is more conservative because rejecting the null hypothesis requires a larger difference between the observed and expected values, often making it the appropriate choice when we have no prior expectation of the direction of the difference.
The causes of variation in statistical process control are:
A) cycles, trends, seasonality, and random variations.
B) natural causes and assignable causes.
C) producer's causes and consumer's causes.
D) mean and range.
E) Type I and Type II.
Answer:
The correct answer is letter "B": natural causes and assignable causes.
Explanation:
Statistical Process Control or SPC is a quality-control production process for outputs that can be measured. The approach aims to improve the stability and capability of the production process by reducing variables. Those variables could be natural -arise by common causes, and assignable -arise because of special causes.
In statistical process control, variations can be categorized into two types: natural causes and assignable causes. Natural causes are inherent in a process, while assignable causes are identifiable factors causing significant process changes.
Explanation:In statistical process control, the sources of variations can usually be attributed into two categories: natural causes and assignable causes.
Natural causes, also known as common causes, refer to the inherent variation in a process over time. These are normally unavoidable and intrinsic to the process.
Assignable causes, on the other hand, refer to any identifiable factors that cause a significant change in the process. These are not inherently part of the process and therefore can be investigated and potentially eliminated.
So, the answer to your question is option B) natural causes and assignable causes.
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A call option on Brocklehurst Corp. has an exercise price of $30. The current stock price of Brocklehurst Corp. is $32. The call option is _________. at the money in the money out of the money knocked in
Answer:
In the Money.
Explanation:A call option is an option contract for Securities, where the buyer has the right to buy a particular Security at a given amount on or before a given date.
A STOCK IS ALSO KNOWN AS A SHARE WHICH MEANS A PART OF A PUBLIC COMPANY WHICH HAS BEEN BOUGHT BY ANOTHER PERSON OR AN ENTITY IT CAN ALSO BE CALLED AN INVESTMENT MADE INTO ANOTHER ENTITY.
At $30 exercise price and $32 current stock price,the call option is in the money.
Answer: in the money
Explanation: when the strike price (exercise price) is lower than the current market price of the underlying asset. In this scenario, since the exercise price of the call option is $30 and the current stock price is $32, the option is in the money because it allows the holder to buy the stock at a lower price ($30) than the current market price ($32).