Final answer:
The portion of the retained earnings assigned to the noncontrolling interest can be calculated by multiplying the book value of the company by the non-controlling interest percentage.
Explanation:
The portion of the retained earnings reported in the consolidated balance sheet that is assigned to the noncontrolling interest can be calculated by multiplying the book value of Star Company by the non-controlling interest percentage. In this case, the noncontrolling interest percentage is 15% of the book value of Star. Since the fair value of the noncontrolling interest was determined to be 15% of the book value, we can assign the same percentage to the retained earnings. Therefore, 15% of the retained earnings will be assigned to the noncontrolling interest.
Thatcher Corporation’s bonds will mature in 10 years. The bonds have a face value of $1,000 and an 8% coupon rate, paid semiannually. The price of the bonds is $1,100. The bonds are callable in 5 years at a call price of $1,050. What is their yield to maturity? What is their yield to call?
To calculate the yield to maturity and yield to call of Thatcher Corporation's bonds, we need to use the present value formula. YTM refers to the rate of return an investor will earn if they hold the bond until it matures, while YTC calculates the rate of return if the bond is called by the issuer.
To calculate the yield to maturity (YTM) and yield to call (YTC) of Thatcher Corporation's bonds, we need to use the present value formula. YTM refers to the rate of return an investor will earn if they hold the bond until it matures and receive all the coupon payments as well as the face value of the bond. YTC, on the other hand, calculates the rate of return if the bond is called by the issuer.
The formula to calculate the present value of the bond is:
PV = (C/r) * (1 - (1+r)^(-n)) + (F/(1+r)^n)
Where:
PV = Present value of the bondC = Coupon paymentr = Yield to maturity or yield to calln = Number of periods (in this case, number of semiannual periods)F = Face value of the bondBy plugging in the given values, we can solve for YTM and YTC.
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The YTM is approximately 6.68% annually, and the YTC is approximately 5.78% annually.
Thatcher Corporation's bonds will mature in 10 years, have a face value of $1,000, an 8% coupon rate paid semiannually, and a current price of $1,100. The bonds are callable in 5 years at a call price of $1,050.
Calculating Yield to Maturity (YTM)
The formula for yield to maturity involves solving for the interest rate that equates the present value of all future cash flows from the bond (coupon payments and face value) to the current price of the bond.
The semiannual coupon payment is $40 ($1,000 × 8% / 2). Let's denote the number of periods (N) as 20 (10 years × 2) and the current bond price as $1,100. The yield to maturity must be calculated iteratively or using a financial calculator:
YTM ≈ 3.34% per semiannual period, which translates into a YTM of approximately 6.68% annually.Calculating Yield to Call (YTC)
For the yield to call, we must find the rate that matches the present value of the bond being called in 5 years:
Semiannual coupon payment: $40Number of periods till call: 10 (5 years × 2)Call price: $1,050Current bond price: $1,100YTC ≈ 2.89% per semiannual period, meaning the YTC is approximately 5.78% annually.
Dan's Independent Book Store is trying to decide on how many copies of a book to purchase at the start of the upcoming selling season. The book retails at $28.00. The publisher sells the book to Dan at $20.00. Dan will dispose of all of the unsold copies of the book at 50% off the retail price, at the end of the season. Dan estimates that demand for this book during the season is Normal with a mean of 1000 and a standard deviation of 250. How many copies should Dan order so as to maximize expected profit?
a. 1340
b. 1045
c. 1020
d. 1000
e. 1125
f. 1375
Answer:
The answer is b as he should order 1045 copies to maximize his profits.
Explanation:
As
[tex]CR=\frac{C_{u} }{C_{o}+C_{u} }[/tex]
So,
Given :
[tex]C_{o} =20-14=6[/tex]
[tex]C_{u} =28-20=8[/tex]
Thus
[tex]CR=\frac{8 }{6+8 }[/tex]
[tex]=57.14\%[/tex]
thus [tex]Q^{*} =Norm.inu(0.5714,1000,250)[/tex]
[tex]=1045.0032[/tex]
≈ [tex]1045[/tex]
Which is option b.
Using the Newsvendor model, Dan should order 1045 copies of the book to maximize expected profit. thus the correct answer is b.
To determine the optimal number of copies Dan should order to maximize expected profit, we use the Newsvendor model. The critical ratio in this model helps in finding the order quantity that balances the cost of understocking and overstocking.
Step 1: Calculate the overstocking cost (Co) and understocking cost (Cu).
Overstocking Cost (Co): The difference between the cost price and the discounted selling price: Co = $20 - ($28 * 0.50) = $20 - $14 = $6Understocking Cost (Cu): The difference between the retail price and the cost price: Cu = $28 - $20 = $8Step 2: Find the critical ratio (CR): CR = Cu / (Co + Cu) = $8 / ($6 + $8) = $8 / $14 = 0.5714
Step 3: Use the critical ratio to find the Z-score corresponding to 0.5714, which is approximately 0.19.
Step 4: Calculate the optimal order quantity (Q*) using the Z-score, mean, and standard deviation of the demand distribution:
Q* = μ + Z * σ = 1000 + 0.19 * 250 = 1000 + 47.5 = 1047.5Since we cannot order a fraction of a book, we'll round to the nearest whole number, 1048. However, the closest option given is 1045.
Therefore, Dan should order 1045 copies to maximize his expected profit.
Cost of Preferred Stock Torch Industries can issue perpetual preferred stock at a price of $57.00 a share. The stock would pay a constant annual dividend of $6.00 a share. What is the company’s cost of preferred stock, ?
Answer:
the company’s cost of preferred stock is 10.53%.
Explanation:
given information:
perpetual preferred stock = $57.00
a constant annual dividend = $6.00
to determine the company’s cost of preferred stock we can use the following formula
[tex]cost of preferred stock = \frac{ annual dividend}{preferred stock}[/tex]
[tex]= \frac{6.00}{57.00}[/tex]
[tex]=10.53[/tex]%
therefore, the company’s cost of preferred stock is 10.53%.
An improvement in a firm's technology that improves productivity results in a(n): Group of answer choices downward movement along the supply curve. leftward shift of the supply curve. upward movement along the supply curve. willingness to supply a larger quantity than before at any given price.
Answer:
The correct answer is letter "D": willingness to supply a larger quantity than before at any given price.
Explanation:
As a result of an increase in productivity as a result of introducing new technology, a company will be able to supply more units to the market. The price will vary according to supply and demand flows and the investment needed for the introduction and maintenance of the new technology.
Increases in productivity can be caused by technological progress, capital investment or human capital development.
Below are amounts (in millions) from three companies' annual reports. Beginning Accounts Receivable Ending Accounts Receivable Net Sales WalCo $1,735 $2,682 $314,427 TarMart 5,766 6,294 59,878 CostGet 549 585 60,963 Required: 1. Calculate the receivables turnover ratio and the average collection period for WalCo, TarMart and CostGet. (Do not round intermediate calculations. Enter your answers in millions. Round your "Average accounts receivable" and "Receivables turnover ratio" answers to one decimal place.)
Answer:
(1) 142.37; 2.56 days
(2) 9.93; 36.76 days
(3) 107.52; 3.39 days
Explanation:
(1) For WalCo,
Average accounts receivables:
= (Opening AR + Closing AR) ÷ 2
= ($1,735 + $2,682) ÷ 2
= 2,208.5
Receivables turnover ratio:
= Net Sales ÷ Average accounts receivable
= $314,427 ÷ 2,208.5
= 142.37
Average collection period:
= 365 ÷ Receivables turnover ratio
= 365 ÷ 142.37
= 2.56 days
(2) For TarMart,
Average accounts receivables:
= (Opening AR + Closing AR) ÷ 2
= ($5,766 + $6,294) ÷ 2
= 6,030
Receivables turnover ratio:
= Net Sales ÷ Average accounts receivable
= $59,878 ÷ 6,030
= 9.93
Average collection period:
= 365 ÷ Receivables turnover ratio
= 365 ÷ 9.93
= 36.76 days
(3) For CostGet,
Average accounts receivables:
= (Opening AR + Closing AR) ÷ 2
= ($549 + $585) ÷ 2
= 567
Receivables turnover ratio:
= Net Sales ÷ Average accounts receivable
= $60,963 ÷ 567
= 107.52
Average collection period:
= 365 ÷ Receivables turnover ratio
= 365 ÷ 107.52
= 3.39 days
Twinte Cars, a California corporation, has internal corporate requirements that stipulate a three-year payroll document retention period. They enter into a contract with an international company that mandates a six-year payroll document retention requirement. How should Twinte Cars balance these requirements?
a) the shorter period is more cost effective
b) the period for retention could be up to 8 years depending upon the circumstances.
c) the benefits and records may be called to evidence
Answer:
b) the period for retention could be up to 8 years depending upon the circumstances.
Explanation:
Retention of payroll documents is an extremely important practice within a company. This is because it is registered evidence of all monetary movements related to employees, in addition to paying all fees, expenses and taxes, which prove that the company is in compliance with labor rights.
Because of this importance, Twinte Cars decided to keep these documents for 3 years, however, Twinte Cars signed a contract with a company that requires these documents to be kept for 6 years. To balance the requirements between the two companies, Twinte Cars must modify its policy and establish that the retention period can be up to 8 years, depending on the circumstances.
A technical analyst has been charting the price movements of ABC stock. The stock has been fluctuating in price between $41 and $46 per share for the past 3 months. If the analyst expects a breakout through the resistance level, which order should be placed?(A) Buy ABC @ $40 Stop GTC(B) Buy ABC @ $41 Stop GTC(C) Buy ABC @ $46 Stop GTC(D) Buy ABC @ $47 Stop GTC
Answer:
Buy ABC @ $47 Stop GTC
Explanation:
Since he expects a breakout through the resistance, that means above $46.
The order to be placed is a pending order, since he places the trade in anticipation of price break above. The type of pending order will be a Buy stop order.
See the attached diagram for clear explanation
The guidance system of a ship is controlled by a computer that has three major modules. In order for the computer to function properly, all three modules must function. Two of the modules have reliabilities of .97, and the other has a reliability of .99.
a. What is the reliability of the computer?
b. A backup computer identical to the one being used will be installed to improve overall reli- ability. Assuming the new computer automatically functions if the main one fails, determine the resulting reliability.
c. If the backup computer must be activated by a switch in the event that the first computer fails, and the switch has a reliability of .98, what is the overall reliability of the system? (Both the switch and the backup computer must function in order for the backup to take over.)
Answer:
a) 0.97 b) 0.9991 c) 0.008518
Explanation:
a) for the computer to work all modules must work so the lowest probsabiltiy of any one of the modules will determine the reliability of the computer.
b) Probabiltiy that 1st computer works+ Probability that 1st computer fails × Probability that back-up works
= 0.97+ 0.97×0.03
=0.9991
c) Probabiltiy that 1st computer works+ Probability that 1st computer fails× Probability that switch works× Probability that back-up computer works
=0.97+0.03×0.98×0.97
=0.998518
The system's reliability is calculated by multiplying the reliabilities of each module in the system. The reliability of a backup computer is calculated by considering the likelihood of one or the other working. If a switch is included, its reliability is considered as a component in a series system with the backup computer.
Explanation:This question pertains to system reliability. In essence, you are dealing with a series-parallel system. For a. the first step is to compute the reliability of the computer. To do this, simply multiply the reliabilities of each module together because for a system to be reliable, all the modules must work:
Reliability = 0.97 * 0.97 * 0.99 = 0.931129
For b. knowing that the backup system will step in if the first computer fails, the total system reliability is the probability that either the first computer works, or it doesn’t, but then the backup works. The reliability of either the primary or backup computer working is calculated by:
R = 1 - (1 - R_primary) * (1 - R_backup)
This is a simple equation derived from probability theory and we can plug in the computed reliability from part a.:
R = 1 - (1 - 0.931129) * (1 - 0.931129) = 0.996122
For c. if there's a switch to activate the backup, both the switch and the backup computer must function. This is another series system, so you'll multiply them together to get the overall reliability:
Overall reliability = 0.98 * 0.996122 = 0.97636
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produces deluxe razors that compete with Gillette's Mach line of razors. Total manufacturing costs are $ 170 comma 000 when 20 comma 000 packages are produced. Of this amount, total variable costs are $ 80 comma 000. What are the total production costs when 25 comma 000 packages of razors are produced? Assume the same relevant range
Answer:
Total cost= $190,000
Explanation:
Giving the following information:
Total manufacturing costs are $170,000 when 20,000 packages are produced.
The total variable costs are $80,000 at 20,000 units.
First, we need to determine the unitary variable cost and total fixed costs.
Unitary variable cost= total variable cost/ number of units
Unitary variable cost= 80,000/20,000= $4 per unit
Total fixed costs= total cost - total variable cost
Total fixed costs= 170,000 - 80,000= $90,000
Now, we need to determine the total cost of 25,000 units.
Total cost= 90,000 + 4*25,000= $190,000
5. Olivia Kelly has just won the Beawinner Lottery and can elect one of two options for her payments. She can either receive $500,000 today or she can receive three annual payments as follows: $100,000 at the end of the first year, $200,000 at the end of the second year, and $300,000 at the end of the third year. If she believes she can make an investment that will pay a 9% compounded annually interest rate, should she take the $500,000 or the three payments?
Answer:
It is better to receive the $500,000 now.
Explanation:
Giving the following information:
Option 1:
Receive $500,000 today.
Option 2:
Three annual payments of $100,000, $200,000 and $300,000 at the end of each year.
Annual interest of 9%.
There are two different ways of determining which option is the best. We can calculate the present value of the three payments and compare them to $500,000, or calculate the final value at an interest rate of 9% compounded annually.
Present value:
PV= FV/(1+i)^n
The present value of the second option:
PV= 300,000/1.09^3 + 200,000/1.09^2 + 100,000/1.09= $491,734.17
Final value:
FV= PV*(1+i)^n
Option 1:
FV= 500,000*(1.09)^3= $647,514.5
Option 2:
FV= 100,000*1.09^2 + 200,000*1.09 + 300,000= $636,810
In both ways, option 1 is better.
Your firm is a U.K.-based importer of bicycles. You have placed an order with an Italian firm for €1,000,000 worth of bicycles. Payment (in euro) is due in 12 months.
Detail a strategy using futures contracts that will hedge your exchange rate risk. Have an estimate of how many contracts of what type and maturity.
Complete question:
Your firm is a U.K.-based importer of bicycles. You have placed an order with an Italian firm for €1,000,000 worth of bicycles. Payment (in euro) is due in 12 months. Detail a strategy using futures contracts that will hedge your exchange rate risk. Have an estimate of how many contracts of what type and maturity
A. Go short 100 12-month euro futures contracts; and short 80 12-month pound futures contracts.
B. Go long 100 12-month euro futures contracts; and long 80 12-month pound futures contracts.
C.Go long 100 12-month euro futures contracts; and short 80 12-month pound futures contracts.
D. Go short 100 12-month euro futures contracts; and long 80 12-month pound futures contracts.E. None of the above
Answer:
Go short 100 , 12-month euro futures contracts; and long 80, 12-month pound futures contracts. Option c is correct.
Explanation:
Buy €1m (a long position) forward using futures contracts, at the 12-month forward rate of $1.60 per €1 pay
$1,600,000 = €1,000,000 ×$1.60/€1.
At the 12-month forward rate of $2/≤this is worth ≤800,000.
Go short pound futures contracts.
so , Go long 100 12-month euro futures contracts; and short 80 12-month pound futures contracts.
Typical quality improvements include: a. All of the answers are correct b. product redesign c. alteration of organizational architecture to increase local responsiveness to customer needs d. purchase of robotic manufacturing systems e. electronic defect detection
Answer:
a. All of the answers are correct
Explanation:
Typical quality improvements include electronic defect detection which will bring about efficiency in the service delivery to the customers, alteration of organizational architecture to increase local responsiveness to customer needs, purchase of robotic manufacturing systems which will more efficiency to the work being done in the organization and product redesign to meet the needs of the customers
Suppose the price elasticity of demand is relatively elastic and the price elasticity of supply is relatively inelastic in a specific market. If an excise tax is imposed on this good, who will bear the greater burden of the tax?
a. government
b. consumers
c. producers
d. both consumers and producers equally
Answer:
c. producers
Explanation:
Since it is given in the question that the price elasticity of demand is relatively elastic but the price elastic of supply is relatively inelastic but if the excise tax is imposed on the goods so the greater burden of the tax would be on the producers as the supply is inelastic so the producers could not changed much but if we compare to the consumers, the consumer could change the demand more than before due to the elastic in demand.
So, the correct option is c.
Mazeppa Corporation sells relays at a selling price of $28 per unit. The company's cost per unit, based on full capacity of 160,000 units, is as follows:
Direct materials $8
Direct Labor $6
Overhead (2/3 of which is variable) $9
Mazeppa has been approached by a distributor in Montana offering to buy a special order consisting of 30,000 relays. Mazeppa has the capacity to fill the order. However, it will incur an additional shipping cost of $2 for each relay it sells to the distributor.
a.
Assume that Mazeppa is currently operating at a level of 100,000 units. What unit price should it charge the distributor if it wishes to increase operating income by $5 for each unit included in the special order?(Do not round intermediate calculations.)
At a current operating level of 100,000 units, the company will not have to turn away any of its regular customers in order to fill the special order. If it wishes to increase operating income by_____ per unit included in the special order, it only needs to generate a contribution margin per unit of ______. Thus, the selling price per unit included in the special order is ________, as shown below:
Selling price: credit ________
Less: Direct labor________ Debit
Variable overhead _________ Debit
Additional Shipping Costs __________ Debit
Contribution Margin per unit _________
b.
Assume that Mazeppa is currently operating at full capacity. To fill the special order, regular customers will have to be turned away. Now what unit price should it charge the distributor if it wishes to increase total operating income by $60,000 more than it would be without accepting the special order? (Do not round intermediate calculations.)
In order for the company to increase its operating income $60,000 above what it would be without the order the contribution margin per unit included with the special order must be $2 per unit more ($2x30,000 units= $60,000) than the normal contribution margin. The normal contribution margin is the sales price, $28, less all variable costs [ ______ +______ +(2/3x________)], or $8. Thus, the selling price of the special order must cover the additional shipping costs, and still result in a contribution margin of _______ (_____ normal +$2 additional requirement).Therefore, a selling price of _______ is required, as shown belwo:
Selling price credit ___________
Less: Direct materials __________ debit
Variable overhead _________ debit
Additional Shipping costs __________ debit
Contribution margin per unit ____________
Solution and explanantion:
Answer A
The Relevant cost of special order
Direct material 6
Direct Labor 4
Overhead (9*2/3) 6
Shipping Cost 2
Total cost 18
Add: Profit Increase in operating Income 3
Therefore, the Price to be charged 21
Answer B
The relevant total cost (18*30000) 540000
The loss of contribution magin (28-18)*30000 300000
The desired Increase in operating Income 60000
The total price 900000
The No.of Units 30000
Therefore, the Price to be charged per unit 30
Regal Health Plans issued a ten-year, 12 percent annual coupon bond a few years ago. The bond now sells for $1,100. The bond has a call provision that allows Regal to call the bond in four years at a call price of $1,060. The bond has a cell provision that allows Regal to call the bond in four years at the call price of $1,060.
a. What is the bond's yield to maturity?
b. What is the bond's yield to call?
Answer:
The solution to the given problem is done in excel and an image of the solution is attached.
What is the bond's yield to maturity?
10.35%
What is the bond's yield to call?
10.13%
please find the attached for the solution
Do you believe that the $785,000 amount at the center of the Overstock-Grant Thornton dispute was material? Defend your answer. What factors other than quantitative considerations should have been considered in deciding whether the $785,000 amount was material?
Answer: Yes
Explanation:
The $785,000 was material because it meets both the quantitative and qualitative factors for materiality. Quantitatively, it is more than 10% of the net income of the company ($7.7million) and qualitatively, it showed a relaxed attitude of management towards accounting misstatements.
Some factors other than quantitative considerations that can be used to determine the materiality of the amount in question are:
Effect on changing loss to profit or profit into loss .Effect of management’s compensation .Effect on the public/shareholders/share prices .Possibility of fraud or conflict of interest .Attitude of management to accounting misstatements .Computing Revenues under Long-Term ContractsCamden Corporations agreed to build a warehouse for a client at an agreed contract price of $ 900,000. Expected (and actual) costs for the warehouse follow: 2016, $202,500; 2017, $337,500; and 2018, $135,000. The company completed the warehouse in 2015. Compute revenues, expenses, and income for each year 2016 through 2018, and for all three years combined, using the cost-to-cost method.Cost-to-Cost Method% of total Costs expected Revenue Year incurred costs recognized Income2016 $Answer Answer% $Answer $Answer2017 Answer Answer% Answer Answer2018 Answer Answer% Answer AnswerTotal $Answer $Answer $Answer
Answer and Explanation:
Computation:
Cost-to-cost method
Year Cost cost(%) Revenue Income
2016 $202,500 30% $270,000 $67,500
2017 $337,500 50% $450,000 $112,500
2018 $135,000 20% $180,000 $45,000
Total $675,000 100% $900,000 $225,000
Cost % = Cost of particular year / Total cost
Revenue:
Year 2016 =$900,000 × 30% = $270,000
Year 2017 = $900,000 × 50% = $450,000
Year 2018 = $900,000 × 20% = $180,000.
Income:
= Revenue - Cost
Year 2016 = $270,000 - $202,500
Year 2017 = $450,000 - $337,500
Year 2018 = $180,000 - $135,000
Final answer:
To calculate revenues, expenses, and income under the cost-to-cost method, we ascertain the percent completed each year to determine the respective revenue to be recognized. This percentage is applied to the total contract price, with the revenue minus the actual costs for each year providing the income.
Explanation:
To compute revenues, expenses, and income for Camden Corporation under the cost-to-cost method, we first add up all the actual costs to determine the percentage of completion each year and apply it to the total contract price. This way, we can figure out how much revenue to recognize each year.
Total expected costs: 2016 costs + 2017 costs + 2018 costs = $675,000Percent complete 2016: 2016 costs / Total expected costs = $202,500 / $675,000 = 30%Revenue recognized 2016: Total contract price * Percent complete 2016 = $900,000 * 30% = $270,000Income 2016: Revenue recognized 2016 - 2016 costs = $270,000 - $202,500 = $67,500Repeat these steps for the subsequent years:
Percent complete 2017: (2016 costs + 2017 costs) / Total expected costs = $540,000 / $675,000 = 80%Revenue recognized by end of 2017: Total contract price * Percent complete 2017 = $900,000 * 80% = $720,000Income 2017: Revenue recognized by end of 2017 - Revenue recognized by end of 2016 - 2017 costs = $720,000 - $270,000 - $337,500 = $112,500Percent complete 2018: (2016 costs + 2017 costs + 2018 costs) / Total expected costs = 100%Revenue recognized 2018: Total contract price * Percent complete 2018 - Revenue recognized by end of 2017 = $900,000 - $720,000 = $180,000Income 2018: Revenue recognized 2018 - 2018 costs = $180,000 - $135,000 = $45,000For all three years combined:
Total Revenue: Contract price = $900,000Total Costs: $675,000Total Income: Total Revenue - Total Costs = $900,000 - $675,000 = $225,000A buyer uses a periodic inventory system, and it purchases $4,000 of merchandise on credit terms of 2/10, n/30 on December 5. On December 15, it pays the invoice in full. Prepare the buyer's necessary journal entry for payment by selecting the account names from the drop-down menus and entering dollar amounts in the Debit and Credit columns. If there are multiple debits or multiple credits, enter the account titles in alphabetical order.
For a merchandise worth $4,000, purchased on credit terms of 2/10, n/30, the buyer records the purchase by debiting Purchases and crediting Accounts Payable by $4,000. When payment is made within 10 days, the Accounts Payable is debited by $4,000 against a credit (decrease in cash) of $3,920 (net of discount) and a credit to Purchase Discounts for $80 (2% of $4,000).
Explanation:Given the scenario, the buyer purchased $4,000 worth of merchandise and paid it fully within the discount period (10 days). This qualifies the buyer for a discount of 2% as per the credit term 2/10, n/30 which stands for a 2% discount if payment is made within 10 days, otherwise, the net payment is due within 30 days. The discount amounts to $80 ($4,000*2%).
The buyer needs to make two separate journal entries: one for the merchandise purchase and one for the payment. Here's how to record the journal entries:
For the merchandise purchase:Debit (increase) Purchases for $4,000Credit (increase) Accounts Payable for $4,000For the payment within the discount period:Debit (decrease) Accounts Payable for $4,000Credit (increase) Cash for $3,920Credit (increase) Purchase Discounts for $80Learn more about the Periodic Inventory System here:https://brainly.com/question/32807813
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Lake Sales had $2,200,000 in sales last month. The contribution margin ratio was 30% and operating profits were $180,000. What sales volume does Lake's need to yield a $240,000 operating profit
Lake Sales needs a sales volume of at least $2,033,333.33 to yield an operating profit of $240,000. This calculation was reached by first identifying the company's fixed costs and then using this information along with the contribution margin ratio and desired operating profit to find the required sales volume.
Explanation:The question first requires us to understand the definition of contribution margin ratio. It is defined as the profit per item or unit sold after variable costs are deducted from the sales price, shown as a percentage. In this case, the contribution margin ratio is 30% which means that 30% of each dollar in sales is contributing to cover the fixed costs and the remaining to profit.
Given that Lake Sales had operating profits of $180,000 on sales of $2,200,000, we can first find the fixed costs. Fixed costs can be calculated as sales - (sales * contribution margin ratio) - operating profits, which equates to $2,200,000 - (0.3 * $2,200,000) - $180,000 = $370,000.
Knowing this, we can calculate the sales volume required to reach a certain operating profit. The formula is Fixed costs + Desired operating profit / Contribution margin ratio, substituting gives us the required sales volume as ($370,000 + $240,000) / 0.3 = $2,033,333.33. Therefore, Lake Sales would need a sales volume of at least $2,033,333.33 to yield an operating profit of $240,000.
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Presented below is information related to equipment owned by Vaughn Company at December 31, 2017. Cost $9,360,000 Accumulated depreciation to date 1,040,000 Expected future net cash flows 7,280,000 Fair value 4,992,000 Assume that Vaughn will continue to use this asset in the future. As of December 31, 2017, the equipment has a remaining useful life of 5 years. Collapse question part (a) Prepare the journal entry (if any) to record the impairment of the asset at December 31, 2017. (If no entry is required, select "No entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually.)
Answer:
The double for the impairment is given below
Dr Impairment loss expense(income statement) $3,328,000
Cr Accumulated depreciation $3,328,000
Explanation:
An asset is impaired if its carrying value(net book value) is higher than its recoverable amount.
Recoverable amount is the higher of fair value less costs to sell and value in use.
First of all, identifying the figures above individually would be a good starting point to calculating the impairment on the equipment.
Carrying value is $8320000 (cost less accumulated depreciation to date)
Recoverable amount under IAS 36 is the higher of fair value less costs of disposal and value in use
However,the calculation of impairment under U.S GAAP ,requires that the asset carrying amount is compared to fair value of the asset, as a result impairment is $3,328,000 ($8,320,000-$4,992,000)
Under IFRS the credit is posted directly to equipment account in the balance sheet
No entry is required to record the impairment of the asset at December 31, 2017.
Explanation:An impairment loss is recognized when the carrying amount of an asset exceeds its recoverable amount. The recoverable amount is the higher of an asset's fair value less costs of disposal and its value in use. In this scenario, the fair value of the equipment is $4,992,000, which is less than its carrying amount of $8,320,000 ($9,360,000 - $1,040,000).
Since the fair value is less than the carrying amount, an impairment loss should be recognized. However, because the question states that Vaughn will continue to use the asset in the future, impairment accounting rules dictate that the impairment loss is not recognized as long as the asset is expected to generate sufficient future cash flows to recover its carrying amount. Therefore, no entry is required at December 31, 2017.
enny, Inc., is looking at setting up a new manufacturing plant in South Park. The company bought some land six years ago for $8.2 million in anticipation of using it as a warehouse and distribution site, but the company has since decided to rent facilities elsewhere. The land would net $11 million if it were sold today. The company now wants to build its new manufacturing plant on this land; the plant will cost $22.2 million to build, and the site requires $970,000 worth of grading before it is suitable for construction. What is the proper cash flow amount to use as the initial investment in fixed assets when evaluating this project
Answer:
$3,41,70,000
Explanation:
Data provided as per the question below:-
Net sale Value of land = $1,10,00,000
Cost of grading of land = $9,70,000
Cost of building = $2,22,00,000
The computation of cash flow amount is shown below:-
Relevant cash flows = Net sale Value of land + Cost of grading of land + Cost of building
= $11,000,000 + $9,70,000 + $2,22,00,000
= $3,41,70,000
How should the business be developed in the future? Be specifi c and consider changes related to your supplier, the monogramming subcontractor, target customers, and products.
Answer:
Target customers and products
Explanation:
Businesses should be developed in the future along the line of its target customers and also in consideration of the type of products it produces. the main aim of every business is to meet and solve the needs of its target customers and its development should as well be tailored to always fulfill the need of its target customers.
Business are not developed based on specifics related to the supplier because the suppliers are not the end users of the project but the target customers are.
An investor has a $1,000,000 portfolio that is split evenly between "blue chip" stocks and treasury securities. The current economic environment is characterized by low interest rates and flat stock prices - and this is expected to remain unchanged for a number of years. However, the residential and commercial real estate market is expected to be strong
Answer:
Equity REITs
Explanation:
In an event of financial assets like when the stocks and bonds are not doing well, "hard" assets such as real estate and artwork tend to do better (since investors reallocate their investments away from financial assets into housing, etc.) A way that investors can participate in this is by investing in equity REITs. Since equity REITs own real estate, the share price movement of the REIT parallels the value of the real estate owned. Mortgage REITs invest in mortgages (essentially the same as investing in a bond) and thus are not the best choice when interest rates are low, since the yield is meager. And, if market interest rates rise, the value of the mortgages held drops. The same would be true for investments in mortgage bonds and Fannie Mae Pass-Through certificates.
During a period, 40,200 units were completed and 3,200 units were in ending WIP Inventory. Ending WIP was 95% complete for direct materials and 50% complete for conversion costs. What are the equivalent units for direct materials?
Answer:
The equivalent units for direct materials are 43,240.
Explanation:
Given:
During a period, 40,200 units were completed and 3,200 units were in ending WIP Inventory. Ending WIP was 95% complete for direct materials.
Now, to find the equivalent units for direct materials.
Complete units = 40,200.
Ending WIP (work in progress) Inventory = 3,200.
As, ending WIP was 95% complete for direct materials.
Thus, ending WIP Inventory = 95% of 3,200.
= [tex]\frac{95}{100} \times 3,200[/tex]
[tex]=0.95\times 3,200[/tex]
[tex]=\$3,040.[/tex]
Now, to get the equivalent units for direct materials by adding complete units and ending WIP Inventory:
[tex]Complete\ units\ +\ ending\ WIP\ Inventory[/tex]
[tex]=40,200+3,040[/tex]
[tex]=43,240.[/tex]
Therefore, the equivalent units for direct materials are 43,240.
Final answer:
The equivalent units for direct materials are calculated by adding the fully completed units with the percentage completion of the ending WIP inventory. In this case, with 40,200 units completed and 3,200 units 95% complete for direct materials, the equivalent units for direct materials would be 43,240 units.
Explanation:
To calculate the equivalent units for direct materials, we need to take into account both the units that were completed during the period as well as the units that were in the ending Work-In-Process (WIP) Inventory. The completed units are already 100% complete, so all of those units count towards the equivalent units for direct materials. For the ending WIP inventory, since they are 95% complete for direct materials, we only count 95% of those units.
The formula to calculate the equivalent units for direct materials is as follows:
Equivalent Units for Direct Materials = (Units Completed) + (% Complete of direct materials for Ending WIP Inventory * Units in Ending WIP Inventory).
Using the numbers given:
Equivalent Units for Direct Materials = 40,200 + (0.95 * 3,200).
We then perform the calculation:
Equivalent Units for Direct Materials = 40,200 + 3,040 = 43,240 equivalent units for direct materials.
The sales manager believes at 10% increase in variable unit selling expense well increase sales volume. if the sales volume increases by 28.5% what will be the change in net operating income? Is this a good idea, why or why not?
Answer:
Do not have enough data
Explanation:
It depends on the proportion of the variable and fixed costs. We need more data such as the selling price and the exact variable and fixed costs n order to comment on this proposed idea.
14. The role price plays in a market is: a. they distribute scarce goods to those consumers who value them most highly. b. when prices are in equilibrium, product shortages or surpluses can occur. c. they help eliminate poverty. d. they eliminate scarcity.
Answer:
a. they distribute scarce goods to those consumers who value them most highly.
Explanation:
Price of a commodity is the amount a manufacturer or producer is willing to sell goods and services.
Attaching a price to a commodity is the easiest way to efficiently distribute scarce goods to the consumers that are in dire need of them.
Since resources for production are scare and limited. It takes a particular cost for production resources to be assembled into a finished product. The cost of production often translates to the asking price the producer is willing to sell it. Every commodity produced is aimed at satisfying a particular need for them. Price often brings disparity when consumers are choosing the most important goods they want. This often leads to the sorting of scale of preference usually based on needs and the importance they attach to them. This way scarce goods will reach consumers that place priority to them.Consider a competitive market for which the quantities demanded and supplied (per year) at various prices are given as follows:
Price (dollars) Demand (millions) Supply (millions)
60 22 14
80 20 16
100 18 18
120 16 20
a. Calculate the price elasticity of demand when the price is $80 and when the price is $100.
b. Calculate the price elasticity of supply when the price is $80 and when the
price is $100.
c. What are the equilibrium price and quantity ?
d. Suppose the government sets a price ceiling of $80. Will there be a shortage,
and if so, how large will it be ?
Answer and Explanation:
A. Price elasticity of demand
Price(P0) = $80 , Q0 = 20
Price(P1) = $100 , Q1 = 18
Price elasticity of demand =
[tex]\frac{\frac{Q1-Q0}{\frac{Q1+Q0}{2} } }{\frac{P1-P0}{\frac{P1+P0}{2} } } \\\\\frac{\frac{18-20}{\frac{18+20}{2} } }{\frac{100-80}{\frac{100+80}{2} } }\\\\\frac{\frac{-2}{\frac{38}{2} } }{\frac{20}{\frac{180}{2} } }\\\\\frac{\frac{-2}{19} }{\frac{20}{90} } }\\\\-0.47[/tex]
Price elasticity of demand = 0.47
B. Price elasticity of supply
Price(P0) = $80 , Q0 = 16
Price(P1) = $100 , Q1 = 18
Price elasticity of supply =
[tex]\frac{\frac{Q1-Q0}{\frac{Q1+Q0}{2} } }{\frac{P1-P0}{\frac{P1+P0}{2} } } \\\\\frac{\frac{18-16}{\frac{18+16}{2} } }{\frac{100-80}{\frac{100+80}{2} } }\\\\\frac{\frac{2}{\frac{34}{2} } }{\frac{20}{\frac{180}{2} } }\\\\\frac{\frac{2}{17} }{\frac{20}{90} } }\\\\0.53[/tex]
Price elasticity of supply = 0.53
C. The point , where Demand and supply is equal called equilibrium price
So , $100 is equilibrium price.
D. if market price is less then equilibrium price , it is effective So, shortage (20-16) 4 units
a. The price elasticity of demand when the price is $80 is -0.4 and when the price is $100 is -0.08. b. The price elasticity of supply when the price is $80 and $100 is 0.5. c. The equilibrium price and quantity can be determined from the graph by identifying the point at which the demand and supply curves intersect, and from the table by finding the price where the quantity demanded equals the quantity supplied.
Explanation:a. To calculate the price elasticity of demand, we use the formula:
Elasticity of Demand = (% Change in Quantity Demanded) / (% Change in Price)
Using the given information, at a price of $80, the quantity demanded is 20 million and at a price of $100, the quantity demanded is 18 million. The % change in quantity demanded is -10% and the % change in price is 25%. Plugging these values into the formula, we get:
Elasticity of Demand ($80) = (-10%) / (25%) = -0.4
Elasticity of Demand ($100) = (-2%) / (25%) = -0.08
b. To calculate the price elasticity of supply, we use the same formula:
Elasticity of Supply = (% Change in Quantity Supplied) / (% Change in Price)
Using the given information, at a price of $80, the quantity supplied is 16 million and at a price of $100, the quantity supplied is 18 million. The % change in quantity supplied is 12.5% and the % change in price is 25%. Plugging these values into the formula, we get:
Elasticity of Supply ($80) = (12.5%) / (25%) = 0.5
Elasticity of Supply ($100) = (12.5%) / (25%) = 0.5
c. The equilibrium price and quantity can be determined from the graph by identifying the point at which the demand and supply curves intersect. This represents the point where the quantity demanded equals the quantity supplied, and thus the market is in equilibrium. From the table, we can determine the equilibrium price and quantity by finding the price where the quantity demanded equals the quantity supplied.
d. To determine the quantities demanded and supplied at a price of $120, we can use the table. At a price of $120, the quantity demanded is 16 million and the quantity supplied is 20 million. Since the quantity demanded is less than the quantity supplied, there will be a surplus. The size of the surplus is the difference between the quantity supplied and the quantity demanded, which is 20 - 16 = 4 million.
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You are the head of the Health Information Management department at Grady Health System. An FBI agent has arrived at your office with a search warrant in hand. He asks to speak with you about the hospitals health records and HIPAA violations. You start your response with some examples of HIPAA violations. What would you say? Provide a reference to support your thoughts.
I would initially apologize for the violations that are found in the hospital. Although this might not necessarily be my jurisdiction, I would still feel bad if the hospital did not operate as it should.
I would then proceed to name some examples of HIPAA violations. This would be:
Snooping on Healthcare RecordsFailure to Perform an Organization-Wide Risk Analysis.Failure to Manage Security Risks / Lack of a Risk Management ProcessInsufficient ePHI Access ControlsHIPAA violations can occur through unauthorized disclosure of patient information, failure to implement proper privacy measures, and lack of consent for using patient health information.
Explanation:HIPAA violations can occur in various ways. For example, if a healthcare provider discloses a patient's diagnosis to someone who is not authorized to receive that information, it would be a violation. Additionally, if a healthcare organization fails to implement strong privacy and security measures to protect patient records, it would constitute a HIPAA violation. Another example is if a healthcare provider fails to obtain proper consent before using or disclosing a patient's health information.
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In preparing closing entries A. each revenue account will be credited. B. each expense account will be credited. C. the owner’s capital account will be debited if there is net income for the period. D. the owner’s drawings account will be debited.
Explanation:
The closing entries for the following accounts are shown below:
1. Sales Revenue A/c Dr XXXXX
To Income Summary XXXXX
(Being revenue account closed)
2. Income summary A/c Dr XXXXX
To Expenses A/c XXXXX
(Being expenses accounts are closed)
3. Income summary A/c Dr XXXXX
To Owner capital XXXXX
(Being the difference is recorded)
4. Owner capital XXXXX
To Owner Drawing XXXXX
(Being the drawing account is closed)
Prepare a pro forma balance sheet, assuming a sales increase of 15 percent, no new external debt or equity financing, and a constant payout ratio. (Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.)
Answer:
pro forma Balance sheet
old increased
assets
non current assets 37800 43470
net PPE 37800 43470
Current assets 15400 17710
Inventory 9000 10350
Accounts receivable 3900 4485
cash 2500 2875
total assets 53200 61180
Equity & Liabilities
common stock 15000 15000
retained earnings 6800 13930
total 21800 28930
Liabilities
long term debt 24000 24000
Current liabilities 7400 7760
Accounts payable 2400 2760
notes payable 5000 5000
total 53200 60690
EFN = 61180 - 60690 = 490
PAYOUT RATIO = dividends / net income
additions to retained earnings = net income less dividends
Explanation
Retained earnings = old retained earnings plus additions to retained earnings = 6800 + 7130 =13930
Missing parts of the Question
Consider the following income statement for the Heir Jordan Corporation:
HEIR JORDAN CORPORATION
Income Statement
Sales $ 48,500
Costs 34,500
Taxable income $ 14,000
Taxes (35%) 4,900
Net income $ 9,100
Dividends $ 2,900
Addition to retained earnings 6,200
The balance sheet for the Heir Jordan Corporation follows.
HEIR JORDAN CORPORATION
Balance Sheet
Assets Liabilities and Owners’ Equity
Current assets Current liabilities
Cash $ 2,500 Accounts payable $ 2,400
Accounts receivable 3,900 Notes payable 5,000
Inventory 9,000 Total $ 7,400
Total $ 15,400 Long-term debt $ 24,000
Owners’ equity
Fixed assets Common stock and paid-in surplus $ 15,000
Net plant and equipment $ 37,800 Retained earnings 6,800
Total $ 21,800
Total assets $ 53,200 Total liabilities and owners’ equity $ 53,200
1.Prepare a pro forma balance sheet, assuming a 10 percent increase in sales, no new external debt or equity financing, and a constant payout ratio. (Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.)
2.Calculate the EFN. (Negative amount should be indicated by a minus sign. Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)