Suppose the September Eurodollar futures contract has a price of 96.4. You plan to borrow $50m for 3 months in September at LIBOR, and you intend to use the Eurodollar contract to hedge your borrowing rate.
a.What rate can you secure?
b.Will you be long or short the Eurodollar contract?
c.How many contracts will you enter into?
d.Assuming the true 3-month LIBOR is 1% in September, what is the settlement in dollars at expiration of the futures contract? (For purposes of this question, ignore daily marking-to-market on the futures contract.)
Answers
Answer:
Explanation:
Definition of simple terminologies ;
A contractual agreement is an agreement which is made on future exchanges in order to buy or sell goods at a fixed price at a specified time period. LIBOR stands for London interbank offered rate which is the rate at which banks borrow money from other banks in london market. this rate is a fixed term by the british bankers association.a) The implied LIBOR of the September Eurodollar futures of 96.4 is = 100 96.4 /400-=0.9%
(b) As we want to borrow money, it implies buying protection against high interest rates, which means low Eurodollar future prices. We will short the Eurodollar contract.
c) Number of contact to be entered into = One Eurodollar contract which is based on a $1 million 3-month deposit. As such, entering into hedge a loan of $50M, will automatically implies entering into 50 short contracts.
d) A true 3-month LIBOR of 1% means an annualized position (annualized by market conventions) of 1% x 4 = 4%. Therefore, our 50 short contracts will pay: [96.4 − (100 − 4) × 100 × $25] × 50 = $50,000.
The increased interest rate has made the loan more expensive as such, the loss to exposure will be compensated hence we have to pay the following amount ; ($50,000,000 x 0.01) - $50,000
= $450,000
The implied interest rate secured is 3.6%, and a short position in the Eurodollar futures contract is required. For a $50 million loan, this would equate to entering into 50 contracts. If the actual LIBOR is 1% come September, the settlement would be $1,300,000 in favor of the borrower.
Hedging with Eurodollar Futures Contract
If the September Eurodollar futures contract has a price of 96.4, the implied interest rate can be calculated by subtracting the contract price from 100, which would yield 3.6% (100 - 96.4).
This is the rate that can be secured via the hedge.
Since a plan is in place to borrow money, one would take a short position in the Eurodollar contract to hedge against rising interest rates.
To determine the number of contracts to enter into, the calculation would be the amount intended to borrow divided by the contract size. If the contract size is $1 million (standard for Eurodollar contracts), then for borrowing $50 million, one would require 50 contracts.
Assuming the true 3-month LIBOR is 1% in September, the calculation for the settlement would involve the difference between the hedged rate (3.6%) and the actual LIBOR rate (1%).
The payout would be this difference times the contract size times the number of contracts. If LIBOR is lower than the hedged rate, you profit from the short futures position.
In this scenario, for 50 contracts, the settlement in dollars at expiration would be (3.6% - 1%)× $1,000,000 × 50 = $1,300,000.
Related Questions
A work-at-home opportunity is available in which you will receive 2 percent of the sales for customers you refer to the company. The cost of your ""franchise fee"" is $750. How much would your customers have to buy to cover the cost of this fee
Answers
Answer:
$37,500
Explanation:
You receive 2% of the sales.
You have to earn $750 to break even, or cover the franchise cost.
So, if we let Sales be "x", we can say:
2% of x would be 750
What is 2% in decimal?? We divide by 100, so we have:
2% = 2/100 = 0.02
Now, we convert the word equation above to mathematical equation:
0.02 * x = 750
Now, we solve for x, the amount customers have to buy (or sales):
[tex]0.02*x=750\\x=\frac{750}{0.02}\\x=37,500[/tex]
Hence,
Customers would have to buy $37,500 to cover the cost of this fee.
Final answer:
To cover a $750 franchise fee with a 2% commission rate, customers referred by the franchisee would need to make a total of $37,500 in purchases.
Explanation:
How to Calculate the Sales Needed to Cover a Franchise Fee
The question involves finding out how much in sales is needed to cover a franchise fee when earning a commission of 2 percent on the sales from customers you refer. To determine this, you can use the formula: Sales Needed = Franchise Fee / Commission Rate.
Here, the franchise fee is $750 and the commission rate is 2%, or 0.02 when expressed as a decimal. The calculation would then be:
Sales Needed = $750 / 0.02 = $37,500
Therefore, to cover the cost of a $750 franchise fee with a 2% commission rate, your customers would need to make a total of $37,500 in purchases.
Gates Corp. has net income of $172,000, sales of $ 1,453,909, and an accounts receivable balance of $127,100. Assume that 100% percent of sales are on credit. What is the days' sales in receivables?
Answers
Answer:
Days' sales in receivables= 31.91 days
Explanation:
The day's sales in account receivable ratio is also called average collection period. It states the number of days on the average to collect a business's account receivable.
Days sales turnover is calculated by dividing total number of days in a year by the account recievables turnover ratio.
The formula for accounts receivable turnover ratio= Current credit sales received/ Accounts receivable balance
Accounts receivable turnover= 1,453,909/127,100
Accounts receivable turnover= 11.439
Assume a 365 day year
Days' sales in receivables= 365/Account receivable turnover
Days' sales in receivables= 365/11.439
Days' sales in receivables= 31.908~ 31.91 days
Suppose that a mechanic owns a building and is renting part of the building's space to a spa. Further suppose that because the mechanic is the owner, he has the right to make noise during the day while he fixes cars. While the spa cannot insist on a quiet environment, it could move to a quieter building. However, rent in the next best building is $350/month more than rent in the noisy building. The mechanic can adopt a new technology that eliminates the noise for $275/month. Given this situation, can the spa find a private solution with the mechanic that will make both better off
Answers
Answer:
The correct answer is letter "B": Yes, but there is only a range of payments that the spa will pay the mechanic to make them both better off.
Explanation:
The spa must analyze the benefit-cost of the possible solution for the noise problem. A spa itself cannot provide a noisy atmosphere to its clients. Moving the spa to the next best building implies spending $350 monthly more for rent. However, the mechanic can eliminate the noise with a device that costs $275 per month. Thus, the spa should share the expenses with the mechanic for the noise-elimination device to reduce the costs of having a noise-free environment obtaining the benefit desired.
"Come out of the fog, young man. And remember you don't have to be a complete fool in order to succeed. Play the game, but don't believe in it--that much you owe yourself." *
Answers
Answer:
Quoted from"The Invisible Man" by Ralph Ellison, these lines are spoken by the vet who had mocked the narrator's college and Mr. Norton.
Explanation:
Ralph Ellison's "The Invisible Man" tells the story of the narrator/ protagonist who had been accustomed to being "invisible", meaning he was unnoticed by people. Amidst the racial prejudice of the blacks by the whites, the young narrator finds it hard to fully comprehend the situation. And things turn for the worse when he showed the reality of life for the blacks to one of the college's benefactors which resulted in him getting expelled from the college.
But despite all that, he calmly accepted his mistake and asked for recommendation from the man. The letters did not endorse him but rather cheated him from any form of employment. The given quote is from Chapter 7, spoken by the vet who was his co-passenger in the bus for New York. He told the young man to "come out of the fog". He advised him to try to "learn to look beneath the surface", be more conscious of the events around him so as not to be a victim.
The question pertains to themes of self-awareness, personal growth, and skepticism in societal participation, typically discussed in college-level English literature or philosophy classes.
Explanation:The passage provided appears to be about self-awareness, personal development, and the dichotomy between participating in life's games and maintaining a distance from fully believing in them. This topic falls under the category of English, specifically in the field of literature or philosophical discussion often found in novels, essays, or similar texts. The passage suggests that in order to improve oneself, a person may need to accept being perceived as foolish by others. This idea is mirrored across other quotes provided, which reflect themes of self-knowledge, the importance of maintaining a level of skepticism about one's perceived importance, and the acknowledgement of life's deeper questions and challenges.
One particular emphasis is on the concept that success doesn't require complete buy-in into societal games, but rather a strategic participation with a level of detachment. This philosophical viewpoint can lead to a more authentic path of personal growth and self-discovery. Such profound reflections are typical of college-level English literature or philosophy courses, where students are encouraged to engage with complex ideas and analyze texts deeply.
"Sherry says, "All the paperwork is filled out wrong. We have to do everything over again." June replies, "No, I see at least three forms that are filled out correctly. We won't have to do it all again. Just most of it, probably." Which of the following statements are know to be true from what is presented above:"
a. Sherry advances a sound deductive argument.
b. Sherry does not advance an argument.
c. Sherry is right and June is wrong.
d. June advances an inductive argument.
e. June advances a deductive argument.
Answers
This statement June advances an inductive argument is know to be true from what is presented above
Explanation:
A strong argument is an inductive reasoning that is meant to be strong enough to make it impossible for the conclusion to have been false whether the premises were correct.
Therefore, success or effectiveness of an inductive argument is, unlike deductive argument, a matter of perspective.
Inductive arguments should take vast forms. Some people have the form of making claims on a population or only based on information from either a sample, a subset. Some mediated arguments draw conclusions through an appeal, authority or causal relationship.
Suppose that consumers' preferences are well behaved in that properties 4-1 to 4-4 are satisfied. Furthermore, assume goods X and Y are normal goods and the price of good X decreases. Then the substitution effect will lead consumer to consume:
a. More of good X and more of good Y
b. Less of good X and more of good Y
c. Less of good X and less of good Y
d. More of good X and less of good Y
Answers
Answer:
d. More of good X and less of good Y
Explanation:
Normal goods are goods whose demands vary directly with income. If income rises, demand increases and if income falls, demand falls.
When the price of good X reduces, good X becomes cheaper and rational consumers would demand more of good X because it is cheaper and less of good Y which is now more expensive. This is known as the substitution effect.
I hope my answer helps you
Final answer:
The substitution effect will cause a consumer to consume more of good X and less of good Y when the price of good X decreases and both goods are normal goods.
Explanation:
When the price of good X decreases and assuming goods X and Y are normal goods, the substitution effect will lead a consumer to consume more of good X and less of good Y. The substitution effect, based on consumer's behavior with well-behaved preferences, dictates that as the price of a product decreases, consumers will substitute more of this now-cheaper good in place of others. Therefore, the consumer will buy more of good X because it has become relatively cheaper compared to good Y. However, since both X and Y are normal goods, we are not discussing the income effect here, which could potentially increase the consumption of both goods due to the extra purchasing power from the price decrease of good X.
Considering the options provided:
a. More of good X and more of good Y – Incorrect, substitution effect considers only one good becoming relatively cheaper.b. Less of good X and more of good Y – Incorrect, substitution effect dictates more of the cheaper good, not less.c. Less of good X and less of good Y – Incorrect, the price decrease leads to more consumption of the cheaper good due to the substitution effect.d. More of good X and less of good Y – Correct, as the substitution effect will generally cause consumers to purchase more of the relatively cheaper good and less of the relatively more expensive good.The Best Manufacturing Company is considering a new investment. Financial projections for the investment are tabulated here. The corporate tax rate is 40 percent. Assume all sales revenue is received in cash, all operating costs and income taxes are paid in cash, and all cash flows occur at the end of the year. All net working capital is recovered at the end of the project.
Year 0 Year 1 Year 2 Year 3 Year 4
Investment $ 43,000
Sales revenue $ 22,000 $ 22,500 $ 23,000 $ 20,000
Operating costs 4,600 4,700 4,800 4,000
Depreciation 10,750 10,750 10,750 10,750
Net working capital spending 490 540 590 490 ?
Compute the incremental net income of the investment for each year. (Do not round intermediate calculations.)
Year 1 Year 2 Year 3 Year 4
Net income $ $ $ $
b.
Compute the incremental cash flows of the investment for each year. (Do not round intermediate calculations. Negative amounts should be indicated by a minus sign.)
Year 0 Year 1 Year 2 Year 3 Year 4
Cash flow $ $ $ $ $
c.
Suppose the appropriate discount rate is 11 percent. What is the NPV of the project? (Do not round intermediate calculations and round your final answer to 2 decimal places. (e.g., 32.16))
NPV $
Answers
Answer:
The solution is presented in the attached excel sheets.
Explanation:
Part a
For the first part the for the calculation of increment, the income is calculated as follows
The income is calculated using following
Gross Income=Sales Revenue-Operating Cost-Depreciation
Net Income is given as Gross Income-Tax Rate *Gross Income
Now the increment is given by finding the difference between two year's income.
Part b
The incremental cash flow is calculated as indicated in the attached sheet.
Part c
The present value at 11 percent is calculated as using the formula indicated in the attached sheets.
To evaluate the financial projections of the investment, we first determine the incremental net income for each year, then calculate the incremental cash flows, and lastly compute the Net Present Value (NPV) of these cash flows based on a discount rate of 11%.
Explanation:The first step is to calculate the incremental net income for each year. This is done by subtracting both the operating costs and the depreciation from the sales revenue and then deducting 40% tax. For example, in Year 1, this would look like: (22,000 - 4,600 - 10,750) * (1 - 0.4) = $4080.
Then we can calculate incremental cash flows. This means adding back the depreciation to the net income calculated in the first step, and considering changes in working capital. The calculation for Year 1 is: 4080 + 10750 - (540-490) = $14,790. Cash flow in Year 0 is -43000 because it's the investment year.
Finally, we calculate the Net Present Value (NPV). This involves the sum of present value of each year's cash flow, discounted at a rate of 11%. NPV is calculated as follows: (-43000/(1+11%)^0) + (14790/(1+11%)^1) + [similar terms for the subsequent years].
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Financial accounting: Multiple Choice Provides information primarily for external decision makers. Provides information primarily for a company's employees. Provides information primarily for the use of managers of the company. Is primarily used to compute a company's tax obligation. g
Answers
Answer:
The correct answer is letter "A": Provides information primarily for external decision makers.
Explanation:
Financial Accounting is the method of gathering, recording, summarizing and publishing financial data on a company that is useful to investors and creditors. The ultimate goal is to accurately report a business' financial picture and results at a given point in time and over a specified period.
Financial accounting output is a financial report containing different statements and explanatory notes.
The following information is available for Splish Brothers Inc. for three recent fiscal years. 2022 2021 2020Inventory $580,000 $590,000 $320,000Net sales 1,950,000 1,750,000 1,350,000Cost of goods sold 1,462,500 1,228,500 938,000Calculate the inventory turnover, days in inventory, and gross profit rate for 2022 and 2021. 2022 2021Inventory Turnover times timesDays in Inventory days daysGross Profit Rate % %
Answers
Answer:
In 2021:
Inventory Turnover for 2021: 2.7 times
Days in inventory: 135.19 days
Gross Profit Rate: 29.8%
In 2022:
Inventory Turnover for 2022: 2.5 times
Days in inventory: 146 days
Gross Profit Rate: 25%
Explanation:
Inventory turnover ratio is calculated by using following formula:
Inventory turnover ratio = Cost of Goods Sold/Average Inventory
Average Inventory = (Inventory beginning of year + Inventory end of year )/2
In the company:
Average Inventory for 2021 = ($590,000 + $320,000)/2 = $455,000
Average Inventory for 2022 = ($580,000 + $590,000)/2 = $585,000
In 2021:
Inventory Turnover for 2021 = $1,228,500/$455,000 = 2.7 times
Days in inventory = 365/Inventory Turnover = 365/2.7 = 135.19 days
Gross Profit Rate = Gross profit/net sales = (Net Sales - Cost of goods sold)/Net Sales = ($1,750,000 - $1,228,500)/$1,750,000 = 0.298 = 29.8%
In 2022:
Inventory Turnover for 2022 = $1,462,500/$585,000 = 2.5 times
Days in inventory = 365/Inventory Turnover = 365/2.5 = 146 days
Gross Profit Rate = Gross profit/net sales = (Net Sales - Cost of goods sold)/Net Sales = ($1,950,000 - $1,462,500)/$1,950,000 = 0.25 = 25%
A bank can decrease the degree of moral hazard if it a. Monitors the borrowers behaviors b. Placing covenants on the loan c. Both of the above d. None of the above
Answers
Answer:
C. Both of the above
Explanation:
Answer:
The correct answer is letter "C": Both of the above.
Explanation:
In banking, moral hazard represents all of those negative behaviors consumers have that could lead to incurring in debt. There are several reasons why borrowers can fall into dent but banks can reduce the losses risk by checking their credit reports to find out if borrowers are incurring much debt they can handle.
Besides, by setting clear loan terms, banks make sure borrowers are subject to penalties in case of not fulfilling their repayment obligations.
"Makers Corp. had additions to retained earnings for the year just ended of $213,000. The firm paid out $183,000 in cash dividends, and it has ending total equity of $4.88 million. The company currently has 110,000 shares of common stock outstanding."What are earnings per share?What are dividends per share?What is the book value per share?If the stock currently sells for $63 per share, what is the market-to-book ratio?What is the price-earnings ratio?If the company had sales of $3.52 million, what is the price-sales ratio?
Answers
Answer:
Dividends per share is $1.66
Book value per share is $44.36
Market-to-book ratio is 1.42
Price-earnings ratio is 32.54
Price-sales ratio is 1.97
Explanation:
1 ) What are dividends per share?
Dividends per share = cash dividends/ number of shares = $183,000/ 110,000 = $1.66
2) What is the book value per share?
Book value per share = total equity/ number of shares = $4,880,000 / 110,000 = $44.36
3) If the stock currently sells for $63 per share, what is the market-to-book ratio?
Market-to-book ratio = $63/ $44.36 = 1.42
4) What is the price-earnings ratio?
The price of Makers Corp. = market price * number of shares = $63* 110,000 = $6,930,000
Price-earnings ratio = $693,000/ $213,000 = 32.54
5) If the company had sales of $3.52 million, what is the price-sales ratio?
Price-sales ratio = market price/ sales = $6,930,000/ $3,520,000 = 1.97
A worksheet A. is an internal document that helps summarize data for the preparation of financial statements. B. is a journal used to record transactions. C. is a ledger listing the account balances and changes in those accounts.
Answers
Answer:
A. is an internal document that helps summarize data for the preparation of financial statements.
Explanation:
A worksheet is an internal document used to prepare accounting information and different reports. It used to calculate the adjusted values from unadjusted values. In include unadjusted trial balance, adjusting journal entries, adjusted trial balance, equity section, Income statement section and balance sheet section. It provide information for the preparation of financial statements.
Find the amount of money accrued at the end of 5 years when $5000 is deposited in a savings account drawing 5 1 4 % annual interest compounded continuously. (Round your answer to the nearest cent.)
Answers
Answer:
$6,424 .06
Explanation:
Present value (PV): $5,000
Rate: 5.14% per annual
Tenor: 5 years
The amount of money accrued at the end of 5 years is the future value (FV) of investment
FV = PV * (1+rate)^tenor
= $5,000 *(1+5.14%)^5
= $6,424 .06
You are terminating an employee.You need to congratulate your coworker on his recent promotion.You need to inform your boss that she has made a significant error in her data calculations.You need to inform your boss of a new lead.You want to schedule a meeting to update your boss on a client meeting.Which of the following is a situation that might call for an indirect strategy? Check all that apply.
You need to congratulate your coworker on his recent promotion.
You need to inform your boss that she has made a significant error in her data calculations.
You want to schedule a meeting to update your boss on a client meeting.
You need to inform your boss of a new lead.
You are terminating an employee.
Answers
Answer:
You are terminating an employee.You need to congratulate your coworker on his recent promotion.You need to inform your boss that she has made a significant error in her data calculations.You need to inform your boss of a new lead.You want to schedule a meeting to update your boss on a client meeting. The following are the situation that might call for an indirect strategy:
You need to congratulate your coworker on his recent promotion.You are terminating an employee.You need to inform your boss that she has made a significant error in her data calculations.An indirect strategy in business communication is used when delivering negative news or when the audience may resist the message. Thus, the situations that might need an indirect approach include informing your boss about a significant error in her data calculations, and terminating an employee.
Explanation:An indirect strategy in business communication is typically utilized when delivering negative news or when the audience may resist the message. Hence, the situations that might call for an indirect approach from the options provided are: 'You need to inform your boss that she has made a significant error in her data calculations' and 'You are terminating an employee'. The indirect approach can help soften the blow of these potentially contentious topics, by beginning with a neutral or positive statement before delivering the negative news.
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You are planning to make monthly deposits of $370 into a retirement account that pays 9 percent interest compounded monthly. If your first deposit will be made one month from now, how large will your retirement account be in 35 years?
Answers
Answer:
Future value = $1,088,460.26
Explanation:
Given:
Periodic payment (PMT) = $370
Internet rate (r) = 9% / 12 = 0.75% per month = 0.75 /100 =0.0075
Number of period (n) = 35 years x 12 months = 420
Future value = ?
Computation of future value:
[tex]Future \ value = Pmt[\frac{(1+r)^n-1}{r} ]\\\\Future \ value = 370[\frac{(1+0.0075)^{420}-1}{0.0075} ]\\\\Future \ value = 370[\frac{(1.0075)^{420}-1}{0.0075} ]\\\\Future \ value = 370[\frac{23.0633836-1}{0.0075} ]\\\\Future \ value = 370[\frac{22.0633836}{0.0075} ]\\\\Future \ value = 370[2,941.78448]\\\\Future \ value = 1,088,460.26\\\\[/tex]
Future value = $1,088,460.26
On August 1, 2018, Towson Corp., declared a 10% stock dividend on its common stock when the market value of the common stock was $17 per share. The balance in the common stock account, before the stock dividend was declared, was $800,000. The par value of all common stock is $10. What is the total dollar amount credited to additional paid in capital - common stock on August 1, 2018?
Answers
The dollar amount credited to common stock is $40,000
The dollar amount credited to additional paid in capital - common stock is $36,000
Solution:
Before stock dividend is declared, there is 80,000 stocks outstanding ( that is, Common stock account balance/par value per stock = 800,000/10)
=> Stock to be distributed as dividend = 80,000 * 5% = 4,000 stocks
As the stock dividend is 5%, this is a small stock dividend => stock dividend is to be recorded at market value.
We have the entries:
Dr Retained Earnings 76,000
Cr Common stock dividend distributed 40,000
Cr Additional paid-in capital - common stock 36,000
The dollar amount credited to common stock is $40,000
The dollar amount credited to additional paid in capital - common stock is $36,000
The following units of an inventory item were available for sale during the year: Beginning inventory 10 units at $50 First purchase 17 units at $52 Second purchase 27 units at $53 Third purchase 19 units at $55 The firm uses the periodic inventory system. During the year, 26 units of the item were sold. The value of ending inventory rounded to the nearest dollar using average cost is (Round average cost per unit to three decimal place.) a.$1,300 b.$1,332 c.$2,485 d.$1,416
Answers
Answer:
The correct answer is C
Explanation:
The formula for computing the ending inventory through using the average cost is as:
Ending Inventory = Beginning Inventory + Purchases - COGS (Cost of goods sold)
where
Beginning inventory = Units × Price
= 10 × $50
= $500
Purchases = First Purchase + Second Purchase + Third Purchases
Purchases = Units × Price + Units × Price + Units × Price
Purchases = 17 × $52 + 27 × $53 + 19 × $55
Purchases = $884 + $1,431 + $1,045
Purchases = $3,360
COGS = Units × Price
COGS = 26 × Price
COGS = 26 × $53
COGS = $1,378
Price is computed as:
Price = $50 + $52 + $53 + $55 / 4
Price = $52.5
Putting the values above:
Ending Inventory = $500 + $3,360 - $1,378
Ending Inventory = $2,485
Widmer Watercraft’s predetermined overhead rate for the year 2017 is 200% of direct labor. Information on the company’s production activities during May 2017 follows. Purchased raw materials on credit, $220,000. Materials requisitions record use of the following materials for the month. Job 136 $ 50,000 Job 137 33,000 Job 138 19,400 Job 139 23,200 Job 140 7,200 Total direct materials 132,800 Indirect materials 20,500 Total materials used $ 153,300 Paid $15,500 cash to a computer consultant to reprogram factory equipment. Time tickets record use of the following labor for the month. These wages were paid in cash. Job 136 $ 12,100 Job 137 10,500 Job 138 37,500 Job 139 39,200 Job 140 3,200 Total direct labor 102,500 Indirect labor 25,500 Total $ 128,000 Applied overhead to Jobs 136, 138, and 139. Transferred Jobs 136, 138, and 139 to Finished Goods. Sold Jobs 136 and 138 on credit at a total price of $525,000. The company incurred the following overhead costs during the month (credit Prepaid Insurance for expired factory insurance). Depreciation of factory building $ 68,000 Depreciation of factory equipment 36,500 Expired factory insurance 12,000 Accrued property taxes payable 35,000 Applied overhead at month-end to the Work in Process Inventory account (Jobs 137 and 140) using the predetermined overhead rate of 200% of direct labor cost. Required: 1. Prepare a job cost sheet for each job worked on during the month.
Answers
Job cost sheets for Widmer Watercraft's May 2017 production activities were prepared, accounting for materials, labor, and overhead (200% of labor cost) for each job handled in the month.
Explanation:The preparation of job cost sheets plays a vital role in accounting and financial tasks, specifically in cost accounting where it allows companies to estimate the costs associated with each job. Below are the job cost sheets you asked for:
Job 136
Materials: $50,000Labor: $12,100Overhead: $24,200 (200% of $12,100)
Job 137
Materials: $33,000Labor: $10,500Overhead: $21,000 (200% of $10,500)
Job 138
Materials: $19,400Labor: $37,500Overhead: $75,000 (200% of $37,500)
Job 139
Materials: $23,200Labor: $39,200Overhead: $78,400 (200% of $39,200)
Job 140
Materials: $7,200Labor: $3,200Overhead: $6,400 (200% of $3,200)Learn more about Job Cost Sheet here:
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Each job cost sheet outlines the direct materials, direct labor, and applied overhead costs incurred for each respective job during May 2017. Direct materials and labor costs are recorded based on actual expenditures, while applied overhead is calculated at 200% of direct labor cost, as per the predetermined overhead rate. Total costs for each job are calculated by summing up the direct materials, direct labor, and applied overhead costs.
Explanation:Job Cost Sheets for each job worked on during May 2017 are as follows:
Job 136:
Direct Materials: $50,000
Direct Labor: $12,100
Applied Overhead (200% of direct labor): $24,200
Total Cost: $86,300
Job 137:
Direct Materials: $33,000
Direct Labor: $10,500
Applied Overhead (200% of direct labor): $21,000
Total Cost: $64,500
Job 138:
Direct Materials: $19,400
Direct Labor: $37,500
Applied Overhead (200% of direct labor): $75,000
Total Cost: $131,900
Job 139:
Direct Materials: $23,200
Direct Labor: $39,200
Applied Overhead (200% of direct labor): $78,400
Total Cost: $140,800
Job 140:
Direct Materials: $7,200
Direct Labor: $3,200
Applied Overhead (200% of direct labor): $6,400
Total Cost: $16,800
Terri, age 16, is a dependent of her parents. During 2018, Terri earned $5,000 in interest income and $3,000 from part-time jobs. Click here to access the 2018 tax rate schedule and 2018 Estate and Trust Tax Rate Schedule. a. What is Terri's taxable income
Answers
Terri's taxable income is the part of her interest income that exceeds the tax-free limit of $1,050. So, her taxable income would be $3,950.
Explanation:Terri's taxable income is calculated based on her interest income and the income from her part-time jobs. Since she is a dependent, she can earn a certain amount of income without having to pay taxes. In 2018, a dependent could earn up to $1,050 in unearned income, like interest, before taxes. Interest income beyond $1,050 is taxable. Therefore, out of $5,000 interest income, $3,950 ($5,000 - $1,050) is taxable.
For earned income, like wages from part-time jobs, the amount a dependent can earn without owing taxes is higher. In 2018, this amount was $12,000. Since Terri earned only $3,000 from her jobs, none of this income is taxable.
In summary, Terri's taxable income for the year 2018 would be the taxable portion of her interest income, which is $3,950.
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Cavy Company accumulated 580 hours of direct labor on Job 456 and 850 hours on Job 777. The direct labor was incurred at a rate of $15 per direct labor hour for Job 456 and $26 per direct labor for Job 777. Journalize the entry to record the flow of labor costs into production. If an amount box does not require an entry, leave it blank.
Answers
Answer:
$30,800
Explanation:
Dr Work in progress 30,800
Cr Wages payable 30,800
Direct labour hours × Per direct labour hour
Job 456
580×15 = 8700
Job 777
850×26= 22100
22,100 + 8,700 = 30,800
The journal entries to record the flow of labor costs into production for Job 456 and Job 777 at Cavy Company involve debiting the work in process for each job for the calculated labor costs and crediting Wages Payable for the total labor cost incurred.
The question asks to journalize the entry for the labor costs incurred on Job 456 and Job 777 at Cavy Company, incorporating direct labor hours and the rate per hour for each job. Thus, to record these transactions, we would use the information provided to calculate the total labor costs for each job. For Job 456, 580 hours of direct labor were incurred at a rate of $15 per hour. Calculating the total, 580 hours × $15/hour = $8,700. Similarly, for Job 777, 850 hours were incurred at $26 per hour, resulting in a total of 850 hours × $26/hour = $22,100.
To journalize these amounts into the production process:
Work in Process - Job 456 ............................ $8,700
Work in Process - Job 777 ............................ $22,100
Wages Payable .............................................. $30,800
This entry increases the work in process for each job, indicating that labor costs have been allocated to these jobs. The corresponding credit to Wages Payable reflects the obligation to pay for the direct labor used.
Henry, a freelance driver, finds customers using various platforms such as Uber and Grubhub. He is single and has no other sources of income. In 2019, Henry's qualified business income from driving totals $61,200. Assume Henry takes the standard deduction of $12,200.Click here to access the 2019 individual tax rate schedule to use for this problem.Assume the QBI amount is net of the self-employment tax deduction.Compute Henry's QBI deduction and his Federal income tax liability.QBI deduction: $Tax liability (round to the nearest dollar): $
Answers
Answer:
Henry's QBI is $9,760
Tax liability = $4,510
Explanation:
The question is to determine Henry's QBI deductions as well as his Federal Income Tax Liability
First we determine his MTI = His net income - His standard deduction
= $61,200 - $12,200
= $49,000
QBI(Qualified Busines Income) Deduction
This will represent the lesser of the following
First = 20% of his Net Income = 0.2 x $61,200 = $12,240
Second= 20% of his MTI = 0.2 x $48,800= $9,800
Henry's QBI is $9,800
Tax Liability Computation
Based on the tax rate for individuals in 2019,
His income tax is as follows
= $970 + (12% x ($49,000-$9,800)- $9,700)
= $970 + $3,540
= $4,510
Commodity money is
A.backed by gold.
B.the principal type of money in use today.
C.money with intrinsic value.
D.receipts created in international trade that are used as a medium of exchange.
Answers
Answer:
The correct answer is letter "C": money with intrinsic value.
Explanation:
Commodity money refers to the value items have themselves (intrinsic) and the value they have to purchase other goods. Commodity money opposes fiat money which is a currency issued by governments with a value imposed that does not represent the actual value of the paper or coin it is. In such a case, fiat money is only used as a medium of exchange.
According to a book by a Harvard Business School professor, some organizational cultures simply cannot meet the challenges posed by innovation and must respond to threats from new technologies by building outside ventures. Digital Equipment is described as having one of those organizational cultures. The company squandered the opportunities presented by the PC revolution even though it was well equipped to build cheap PCs. The company did not have ____.
(A) adaptability
(B) synergy
(C) a formula for success laddering
(D) knowledge management
(E) comprehension
Answers
Answer:
A) Adaptability
Explanation:
The company could not adapt to the current trends in the market. organizational adaptability is concerned with how firms could quickly adjust their business processes to changes that enhances their growth and make give them the ability to compete with rivals.
Many advantages are embedded in adjusting to the trend in the market, one of which is:
1. They value their employees
2. They have a well defined goals
3. They become more creative
Answer:
(A) adaptability
Explanation:
Adaptability refers to the ability of changing in order to meet new challenges and opportunities. When a company is adaptable, it knows how to take advantage of the new opportunities that come its way. It also knows how to recover effectively when facing problems. It can also be understood as the ability to notice and respond to changes in an organizational environment.
Branch managers at First National Bank report to both a retail banking manager and a central operations officer. One of the managers is focused on sales and the other on control measures. What type of organizational structure does this most closely resemble
Answers
The organizational structure of branch managers at First National Bank resembles a matrix structure, where they report to both a retail banking manager and a central operations officer.
Explanation:The organizational structure of branch managers at First National Bank, where they report to both a retail banking manager and a central operations officer, resembles a matrix structure. In a matrix structure, employees report to multiple managers based on different aspects of their roles or functions. In this case, one manager focuses on sales and the other on control measures, allowing for a balance between achieving sales targets and implementing control measures to ensure compliance and risk management.
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Complements stimulate the incentive to buy the original product because customers then will have a limited, exclusive supply to use in conjunction with the main product. b. Complements stimulate the incentive to buy the original product because customers will then have a large supply of complements to use in conjunction with the main product. c. Complements tend to be of more importance than the product itself. d. Complements are not as important as the original product.
Answers
Answer:
Complements stimulate the incentive to buy the original product because customers then will have a limited, exclusive supply to use in conjunction with the main product.
Explanation:
Complementary goods are goods that are consumed together, so increase in demand for one results in increase in sand for the other. For example sugar and tea are complimentary goods.
It is found that compliments stimulate increased demand of the original product. Let's say we have a lot of sugar we can use with tea and tea level is low at home. The fact that I have a lot of sugar I can use with tea will motivate me to buy more tea, since I already have sugar I can use with it.
To determine how to crash activity times:
A. normal activity costs and costs under maximum crashing must be known.
B. shortest times with crashing must be known.
C. realize that new paths may become critical.
D. All of these are correct.
Answers
Answer:
D. All of these are correct.
Explanation:
It is the method used to reduce the time duration required for a project by spending less time on on the important activities. This will be achieved by committing more resources to the project thus leading to increase in the cost of project.
The Filzinger Corporation’s December 31, 2021 year-end trial balance contained the following income statement items:
Account Title Debits Credits Sales revenue 6,675,000
Interest revenue 69,000
Gain on sale of investments 51,000
Cost of goods sold 4,250,000
Selling expense 330,000
General and administrative expense 943,000
Interest expense 29,000
Research and development expense 580,000
Income tax expense 144,000
Required:
Calculate the company’s operating income for the year using a single-step income statement format.
Answers
Answer:
$548 000
Explanation:
Income Statement for Filzinger Corporation as at 31 December 2021
Sales 6 675 000
Cost of sales (4 250 000)
Gross Income 2 425 000
Other Income 120 000
Interest Revenue 69 000
Gain on sale of investment 51 000
Net income (2 425 000 + 120 000) 2 545 000
Expenses (330 000 + 943 000 + 580000) (1 853 000)
Selling expense 330 000
General and administrative expense 943 000
Research and Development expense 580 000
Net Profit before tax (2 545 000 – 1 853 000) 692 000
Income Tax expense (144 000)
Net Operating Profit 548 000
To calculate the operating income for Filzinger Corporation, add up the relevant revenues and subtract the relevant expenses using a single-step income statement format.
Explanation:A single-step income statement format adds up all the relevant revenues and subtracts relevant expenses to arrive at the operating income. To calculate the operating income for Filzinger Corporation, we need to sum up all the revenues (sales revenue, interest revenue, gain on sale of investments) and subtract all the expenses (cost of goods sold, selling expense, general and administrative expense, interest expense, research and development expense, income tax expense).
In this case, the operating income can be calculated as follows:
Sales revenue + Interest revenue + Gain on sale of investments - Cost of goods sold - Selling expense - General and administrative expense - Interest expense - Research and development expense - Income tax expense
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By the start of ____, global growth slipped. The post-World War II boom in advanced industrial nations lost momentum. The need existed for a new set of advanced technologies. Select one: a. 1970 b. 1980 c. 1960 d. 1990
Answers
By the start of 1970, global growth slipped. The post-World War II boom in advanced industrial nations lost momentum. The need existed for a new set of advanced technologies.
Explanation:
By the start of 1970, global growth slipped. The post-World War II boom in advanced industrial nations lost momentum. The need existed for a new set of advanced technologies. Technological changes, are like a series of explosions with innovations uplifting in specific sectors, or the leading industries that provide the momentum for future prosperity.the process of technological transformation should be called “creative destruction", as it becomes dominant at expenses.Southwest Pediatrics has the following balances on December 31, 2021, before any adjustment: Accounts Receivable = $130,000; Allowance for Uncollectible Accounts = $2,100 (debit). On December 31, 2021, Southwest estimates uncollectible accounts to be 20% of accounts receivable.
Answers
Answer:
Bed debts expenses = $28,100
Explanation:
Given:
Accounts Receivable = $130,000
Allowance for Uncollected Accounts = $2,100 (debit)
Uncollected accounts = 20% of accounts receivable
Computation of Uncollected accounts :
= 20% x Accounts receivable
= 20% x $130,000
= $26,000
Total Bed debts = $26,000 + $2,100
= $28,100
Journal Entries
Date Accounts Debit Credit
Bed Debts Expenses A/c Dr $28,100
To Allowance for Uncollected Accounts $28,100
Which of these projects is likely to have the higher asset beta, other things equal? Why? a. The sales force for project A is paid a fixed annual salary. Project B’s sales force is paid by commissions only.b. Project C is a first-class-only airline. Project D is a well-established line of breakfast cereals.
Answers
Project A and Project C are likely to have higher asset betas due to their specific characteristics.
Explanation:The asset beta of a project depends on various factors, including the risk profile of the project. In the given scenarios, the project with a higher asset beta would be:
Option a: Project A, where the sales force is paid a fixed annual salary, is likely to have a higher asset beta compared to project B. This is because fixed salaries are a fixed cost for the project, which means that any changes in sales revenue would directly impact the project's profitability and risk.Option b: Project C, which is a first-class-only airline, is likely to have a higher asset beta compared to project D, which is a well-established line of breakfast cereals. This is because the airline industry is generally more volatile and exposed to economic fluctuations compared to the stable and established breakfast cereal industry.Learn more about Asset beta here:https://brainly.com/question/31649303
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