Explanation:
The adjusting journal entry is as follows:
Supplies expense A/c Dr $7,425
To Supplies A/c $7,425
(Being supplies account is adjusted)
The supplies expense is computed by
= Supplies balance before adjustment - supplies on hand
= $9,000 - $1,575
= $7,425
For recording this adjusting entry, we debited the supplies expense account and credited the supplies account
A debit of $7425 is made to the Supplies Expense account and a credit of the same amount is made to the Supplies account to adjust for the consumed supplies. This is necessary to correctly reflect the amount of supplies on hand at the end of the year.
Explanation:The subject of this question is Accounting, specifically about adjusting entries in the ledger. An adjusting journal entry is required when the amount of supplies on hand at the end of the year is different from what is reflected in the account. In this case, the balance in the Supplies account is $9,000, while the actual amount of supplies on hand is $1,575.
To reflect the correct amount, a journal entry must be made to deduct the value of the consumed supplies. This is computed by subtracting the actual remaining supplies from the initial recorded amount (i.e., $9,000 - $1,575 = $7425). Therefore, you need to debit the Supplies Expense account and credit the Supplies account by this difference ($7425).
Here is the journal entry:
Debit Supplies Expense $7425Credit Supplies $7425Learn more about Adjusting Entries here:https://brainly.com/question/33175618
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Which of the following is a nonmanufacturing business where process costing would most likely be used? An auto body shop. A furniture repair shop. A laboratory that tests water samples for lead A tailoring shop. A beauty shop.
All of them are the non-manufacturing business where process costing would most likely be used.
Explanation:
All are non-manufacturing business which are as follows, An auto body shop. A furniture repair shop. A laboratory that tests water samples for lead A tailoring shop. A beauty shop.Non-manufacturing business costs refers to those business where it is incurred outside the factory or production unitNon-manufacturing costs includes,selling expenses general expenses Selling Expenses It is also called as selling and distribution expenses.Non-manufacturing expenses have no impact on the production cost of the company due to their period costs.
Final answer:
Among the nonmanufacturing businesses listed, a laboratory that tests water samples for lead would be the most likely to use process costing because it produces homogeneous outputs in a continuous flow, similar to chemical plants.
Explanation:
Process costing is a method used in manufacturing and nonmanufacturing businesses where products or services are homogeneous and produced in a continuous flow. This makes it suitable for industries like chemical production or water treatment where many units of a similar product are created. Amongst the nonmanufacturing businesses listed such as an auto body shop, a furniture repair shop, a laboratory that tests water samples for lead, a tailoring shop, and a beauty shop, a laboratory that tests water samples for lead is the most likely to use process costing. This is because, similar to the examples of chemical plants and chemistry labs, the laboratory conducts standardized processing experiments and runs, which result in homogeneous outputs allowing for a more accurate product cost determination.
Process costing enables the calculation of the costs per unit of the product by tracking and averaging the direct and indirect costs involved in the production process. This includes both fixed operating costs, such as the cost of maintaining the facility, and variable costs that change with the level of production - all of which are key to understanding and managing costs effectively in businesses with a significant degree of operating leverage or those pursuing economies of scale.
Entries for Bank Reconciliation The following data were accumulated for use in reconciling the bank account of Mathers Co. for July: Cash balance according to the company's records at July 31, $32,110. Cash balance according to the bank statement at July 31, $31,350. Checks outstanding, $2,870. Deposit in transit, not recorded by bank, $4,150. A check for $170 in payment of an account was erroneously recorded in the check register as $710. Bank debit memo for service charges, $20. Journalize the entries that should be made by the company, part (A) Error and part (B) Service Charge
Explanation:
The journal entries are as follows
a. Cash $540
To Account payable $540
(Being the error is recorded)
It is computed below:
= Corrected amount - incorrect amount
= $710 - $170
= $540
b. Bank service charges $20
To Cash $20
(Being the bank services charges are paid in cash is recorded)
All other information is ignored
Final answer:
In reconciling Mathers Co.'s bank account for July, we correct an error in the recorded amount of a check payment and account for bank service charges, making necessary journal entries to adjust the cash balance.
Explanation:
To reconcile Mathers Co.'s bank account for July, we must make entries for an error in recording a check and for bank service charges.
Part (A) Recording Error:
The incorrectly recorded check should be corrected:
Debit Accounts Payable: $540 (to correct the overstatement of $540: $710 - $170)Credit Cash: $540 (to reduce the cash balance)Part (B) Service Charge:
The bank service charges should be recorded:
Debit Bank Charges Expense: $20Credit Cash: $20 (to reduce the cash balance)The reconciliation process is crucial for ensuring that the company's cash records are accurate.
Basile Corporation has budgeted sales of 36,000 units, target ending finished goods inventory of 6,000 units, and beginning finished goods inventory of 1,800 units. How many units should be produced next year
Answer:
40,200 units
Explanation:
Data given in the question
Budgeted sales units = 36,000 units
Ending finished goods inventory units = 6,000 units
Beginning finished goods inventory units = 1,800 units
So by considering the above information, the units produced next year is
= Budgeted sales units + ending finished goods inventory units - beginning finished goods inventory units
= 36,000 units + 6,000 units - 1,800 units
= 40,200 units
An expected sales of company products and services for a budgeted time is called a sales budget. It can be estimated in dollars or units.
The 40,200 units should be produced in next year.
The unit can be estimated by:
Given,
Budgeted sales (BS) units = 36,000 unitsTarget ending finished services (TEFS) units = 6,000 unitsBeginning finished goods (BFG) commodities = 1,800 unitsThe units to be produced next year will be:
[tex]\begin{aligned} \rm BS + TEFS - BFG &= 36,000 \;\rm units + 6,000 \;\rm units - 1,800 \;\rm units\\\\&= 40,200 \;\rm units\end{aligned}[/tex]
Therefore, 40,200 units should be manufactured.
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On January 1, 2017, Taggart Sales issued $18.000 in bonds for $18,800. These are eight - year bonds with a stated iterest rate of 9% that pay semiannual interest. Taggart Sales uses the staight - line method to amortize the bond premium. After the first Interest payment on June 30, 2017, what is the bond carrying amount? (Round your intermediate answers to the nearest dollar.)
A) $18,750
B) $18,800
C) $18,000
D) $18,050
Answer:
Explanation:
Face Value of Bonds = $18,000
Issue Value of Bonds = $18,800
Premium on Bonds = Issue Value of Bonds - Face Value of Bonds
Premium on Bonds = $18,800- $18,000
Premium on Bonds = $800
Time to Maturity = 8 years
Semiannual Period = 16
Semiannual Amortization of Premium = Premium on Bonds / Semiannual Period
Semiannual Amortization of Premium = $800/ 16
Semiannual Amortization of Premium = $50
Carrying Value = Issue Value of Bonds - Semiannual Amortization of Premium
Carrying Value = $18,800- $50
Carrying Value = $18,750
So the correct answer is A) 18,750
When companies adjust their processes to be sure they offer high-quality products and good service at competitive prices they are responding to which external force?
a. The economic environment.
b. The technological environment
c. The competitive environment
Answer:
The correct answer is letter "C": The competitive environment.
Explanation:
Competitive corporate environment refers to the natural rivalry atmosphere companies face while offering a good or service that is similar to one other firm provides. This environment pushes firms to constantly be looking for improvements in product quality, price by reducing their costs, and customer service.
Also, competition is what drives institutions to pursue having a competitive advantage that will allow them to step up.
Michael is considering getting a closed-end lease on a car for 48 months. The car dealer quotes him a monthly payment of $349. If Michael were to buy the car with the same down payment, his monthly payment would be $465 a month. Michael's lease payment is lower because:________.
a) he is not paying for the residual value of the car at the end of four years.b) he is paying finance charges only on the amount of the car that will be depreciated over four years.c) car dealers make a lower profit on leased cars.d) leased cars do not come with a manufacturer's warranty.
Final answer:
The correct answer is A) he is not paying for the residual value of the car at the end of four years. When leasing a car, the monthly payment is lower because you are not responsible for the residual value of the car at the end of the lease term.
Explanation:
The correct answer is A) he is not paying for the residual value of the car at the end of four years.
When leasing a car, the monthly payment is lower because you are not responsible for the residual value of the car at the end of the lease term. The residual value is the estimated value of the car after the lease term is over. With a closed-end lease, you can simply return the car to the dealer at the end of the lease without any further financial obligation.
On the other hand, if Michael were to buy the car with the same down payment, he would have to make larger monthly payments because he would be paying for the full value of the car, including the residual value, which is built into the finance charges.
Consider companies A and B. If A sells a commodity product to B, and the cost of this product makes up a significant portion of B's cost of goods sold (COGS). B is therefore strongly incentivized to be highly informed about A's costs and any alternatives to buying from A. This information can contribute to B having buyer power avoiding the need to "send itself flowers.Do you agree / disagree with the statement above. Why?
Answer:
Agree
Explanation:
The price of the commodity determined by B depends on the buying power and price from A. That is, the cost of goods for B will be determined by the purchasing conditions for A. In order for the situation to be a win-win situation between A and B, B is right to be in a position to know the cost of the price from A and any alternatives of buying from A.
Answer: I strongly agree with the statement.
Explanation: Buyer power also called Buyer Bargaining Power refers to the pressure consumers can exert on businesses to get satisfaction by receiving higher quality products, better customer services and lower prices.
I AGREE that by B being informed of other alternatives, it reduces the hold of A on B. B can easily threaten A to give him satisfaction or he will move to its competitors.
A company is 40% financed by risk-free debt. The interest rate is 10%, the expected market risk premium is 8%, and the beta of the company’s common stock is .5. What is the company cost of capital? What is the after-tax WACC, assuming that the company pays tax at a 35% rate?
Answer:
12.4% ; 11%
Explanation:
The computation is shown below:
Cost of capital = (Weightage of debt × cost of debt) + (Weightage of common stock) × (cost of common stock)
= 0.40 × 0.10 + 0.60 × 0.14
= 0.04 + 0.084
= 12.4%
Now the After tax WACC is
= Weightage of debt × cost of debt × ( 1 - tax rate) + (Weightage of common stock) × (cost of common stock)
= {0.40 × 0.10 × (1 - 0.35)} + {0.60 × 0.14}
= 0.026 + 0.084
= 11%
The weightage of equity is
= 100 - 40%
= 0.60
Answer:
12.4%, 11%
Explanation:
Weighed average cost of capital (WACC) represents total cost of capital which is the summation of individual cost of capital of different sources, calculated as the proportion (weights) in total capital structure multiplied by the respective cost of capital.
Risk free rate of interest = 10%
Market risk premium = 8%
Cost of debt = [tex]I\ (1\ -\ t)[/tex] = 10 (1 - .35) = 6.5%
Cost of Equity = [tex]R_{f}\ +\ B\ (Risk\ Premium)[/tex]
where, [tex]R_{f} =[/tex] Risk Free Rate Of Interest
Risk Premium = [tex]R_{m}\ -\ R_{f}[/tex] = 8%
B = Beta or degree of sensitivity of security return with respect to market return
Cost Of Equity = 10 + 0.5 × 8 = 14%
Cost of capital before considering taxes = 10 × 0.4 + 14 × 0.6 = 4 + 8.4 = 12.4%
(1) (2)
Source Weights Cost of Capital (1) × (2)
Debt 0.4 6.5 2.6%
Equity 0.6 14 8.4%
Weighted Average Cost Of Capital 11 %
Murphy Company produces two products, Regular and Enhanced. Murphy produces 8,000 units of Regular and 2,000 units of Enhanced. The company uses two activity cost pools, with estimated cost and activity as follows: Pool Estimated Cost Regular Enhanced #1 $12,000 500 hours 250 hours #2 $24,000 400 hours 1,200 hours What is the overhead cost per unit of Enhanced under activity-based costing?
Answer:
$11.00 per unit.
Explanation:
We know,
Total overhead cost = Estimated cost for pools × (Expected activity of specific activity ÷ Total expected activity)
Given,
Estimated cost for pool 1 = $12,000
Estimated cost for pool 2 = $24,000
Total expected activity for pool 1 = Regula + Enhanced = 500 + 250 hours = 750 hours
Total expected activity for pool 2 = Regula + Enhanced = 400 + 1,200 hours = 1,600 hours
As we have to find the overhead cost per unit of Enhanced,
Therefore, Total overhead cost = [$12,000 × (250 ÷ 750)] + [$24,000 × (1,200 ÷ 1,600)] = $4,000 + 18,000 = $22,000
Again, we know,
the overhead cost per unit under ABC costing = Total overhead cost ÷ Number of units produced for a specific unit
Cost per unit of Enhanced products = $22,000 ÷ 2,000 units = $11 per unit.
Assume that direct labor is paid at a rate of $ 25 per hour and Job 456 used $ 2 comma 350 of direct materials. What was the total manufacturing cost of Job 456?
Answer:
Total manufacturing cost will be $17,500
Explanation:per hour of direct labour is $25 and
350 of direct materials was used at $2 which is 2*350=700
then to get the total manufacturing cost is $25 multiplied by 700 = $17,500
Answer:
Direct Materials. 2350
Direct labour(25*1) 25
Total Manufacturing cost= 2350+25=2375
Explanation:
Note: In the absence of total working hours, we assume 1hr as working hour.
If Arturo and Dina both spend all of their time producing tacos, then total production is a. 800 tacos and 500 burritos. b. 400 tacos and 250 burritos. c. 800 tacos and 0 burritos. d. 400 tacos and 0 burritos.
Answer: C
800 tacos and 0 burritos
Explanation:
If Arturo and Dina both spend all of their time producing tacos, then total production is 800 tacos and 0 burritos.
Which type of ad agency is most likely to offer its clients an extensive range of marketing, communications, and promotions services, including planning, creating, and producing the advertising; performing research; and selecting media? A. A creative boutiqueB. A full-service agencyC. A media buying serviceD. A collateral agencyE. A switch marketing agency
Answer: B. Full Service Agency
Explanation: The above agency would provide all the necessary services to its clients -an extensive range of marketing, communications, and promotions services, including planning, creating, and producing the advertising; performing research; and selecting media?
Cash is King!Good cash management is an essential job of the financial manager! You own a small auto sales business called King Kars. You stock up on inventory in February, April, June, and September. Your annual cash budget indicates that your MONTHLY NET CASH for the year will be the following:JAN $5,000FEB -$30,000MAR $20,000APRIL -$35,000MAY $25,000JUNE -$10,000JULY $25,000AUG $25,000SEPT -$30,000OCT $15,000NOV $15,000DEC $25,000You begin the year with a cash balance of $50,000, and the minimum cash balance desired must be $50,000 every month. Prepare a cash flow summary and external financing summary as noted in the Excel spreadsheet assigned to this submission.
1. Do you believe that the company needs outside financing?
2. What is the minimum line of credit to request from a lender?
3. Do you think you are a good candidate for the line of credit? Why?
Answer:
The solution to the given problem is given below.
Explanation:
1. Do you believe that the company needs outside financing?
Yes, Company needs outside finance total $ 40,000 as $25,000 in month of Feb and $15,000 in month of Apr il.
2. What is the minimum line of credit to request from a lender?
Minimum line of credit needed is $40,000
3. Do you think you are a good candidate for the line of credit? Why?
Yes, we are good candidate for line of credit because we can start repayment by May and repay by July and after repayment we will have ending March Cash balance $100,000 .
Detailed calculations are attached with the image.
A friend wants to borrow money from you. He states that he will pay you $3,900 every 6 months for 7 years with the first payment exactly 7 years and six months from today. The interest rate is an APR of 6.2 percent with semiannual compounding. What is the value of the payments today
The present value of the annuity payments is determined using the present value formula for an ordinary annuity, adjusted for the delay and the semiannual compounding. The payments are $3,900 every six months, with the first payment starting 7.5 years from today and a semiannual interest rate of 3.1%.
Explanation:The value of the payments today, also known as the present value, can be calculated using the formula for the present value of an ordinary annuity. The formula includes the payment amount, the interest rate per period, and the number of periods.
First, let's determine the number of periods (n) and the interest rate per period (r). Since payments are made every 6 months, and the first payment starts 7 years and 6 months from today, the payments will continue for 7 years after the first payment, resulting in n = 14 periods. The semiannual interest rate is half the APR, so r = 6.2% / 2 = 3.1% per period.
Because the payments start 7.5 years from today, we must also discount the value of the annuity an additional half-year to today's value. To find the present value (PV) we use the formula:
PV of annuity due = PV ordinary annuity × (1 + r)
The formula for the PV of an ordinary annuity is:
PV = PMT × [(1 - (1 + r)^-n) / r]
Where PMT is the payment amount ($3,900). The present value can then be found by substituting the values into the formula and solving for PV. Once obtained, it is multiplied by (1 + r) to adjust for the first payment occurring in 7.5 years rather than 7 years.
Collins Little Company has a staff of 4 employees, each working 8 hours per day at a rate of $20/hour. Their overhead expenses are $200/day. Collins processes and closes on 12 titles each day. They are considering purchasing a computerized title search system that will allow the processing of 20 titles per day. With the new system, they could cut their staff to 2 employees working the same hours at the same pay, but their overhead expenses would double to $400 per day.
a. Compute the labor productivity with the old system (in titles / hour).
b. Compute the labor productivity with the new system (in titles / hour).
c. Compute the multifactor productivity with the old system (in titles / dollar).
d. Compute the multifactor productivity with the new system (in titles / dollar).
Answer:
A. Labor productivity = 12 titles /(4*8)
= 12 /32
0.375 hrs per unit
b. labor productivity = 20 / 16
= 1.25 hrs per unit
c. multi-factor productivity = output/ input
= 12 /( 640 +200)
= 0.0143
d. multi-factor productivity = output/ input
= 20/ (320+400)
= 0.2778
Explanation:
labour =640 = 4*8*20
labour = 320 = 2*8*20
a. Labor productivity with the old system is approximately 0.375 titles per hour, while with the new system, it's approximately 1.25 titles per hour. b. Multifactor productivity with the old system is around 0.015 titles per dollar, and with the new system, it's about 0.03125 titles per dollar.
a. To compute labor productivity with the old system (in titles per hour), you can use the following formula:
Labor Productivity (with old system) = Total Titles Processed / Total Labor Hours
Total Titles Processed = 12 titles per day
Total Labor Hours = 4 employees * 8 hours per day = 32 hours per day
Labor Productivity (with old system) = 12 titles / 32 hours ≈ 0.375 titles per hour
b. To compute labor productivity with the new system (in titles per hour), you can use the same formula:
Labor Productivity (with new system) = Total Titles Processed / Total Labor Hours
Total Titles Processed (with new system) = 20 titles per day
Total Labor Hours (with new system) = 2 employees * 8 hours per day = 16 hours per day
Labor Productivity (with new system) = 20 titles / 16 hours = 1.25 titles per hour
c. To compute multifactor productivity with the old system (in titles per dollar), you can use the following formula:
Multifactor Productivity (with old system) = Total Titles Processed / (Total Labor Cost + Total Overhead Cost)
Total Labor Cost (with old system) = 4 employees * 8 hours per day * $20/hour = $640 per day
Total Overhead Cost (with old system) = $200 per day
Multifactor Productivity (with old system) = 12 titles / ($640 + $200) = 0.015 titles per dollar
d. To compute multifactor productivity with the new system (in titles per dollar), you can use the same formula:
Multifactor Productivity (with new system) = Total Titles Processed / (Total Labor Cost + Total Overhead Cost)
Total Labor Cost (with new system) = 2 employees * 8 hours per day * $20/hour = $320 per day
Total Overhead Cost (with new system) = $400 per day
Multifactor Productivity (with new system) = 20 titles / ($320 + $400) = 0.03125 titles per dollar
So, the labor productivity with the old system is approximately 0.375 titles per hour, and with the new system, it's approximately 1.25 titles per hour. The multifactor productivity with the old system is approximately 0.015 titles per dollar, and with the new system, it's approximately 0.03125 titles per dollar.
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If she spends all of her income on uglifruits and breadfruits, Maria can just afford 11 uglifruits and 4 breadfruits per day. She could also use her entire budget to buy 3 uglifruits and 8 breadfruits per day. The price of uglifruits is 6 pesos each. How much is Maria's income per day?
(a) 115 pesos;
(b) 105 pesos;
(c) 114 pesos;
(d) 119 pesos;
(e) None of the above.
Answer:
(c) 114 pesos;
Explanation:
Let u = price of uglifruits and b = breadfruits
Her budget constraints are :
11u + 4b = income
3u + 8b = income
Equate both equations together since they're both equal to income.
11u + 4b = 3u + 8b
U = 6 pesos
66 +4b = 18 +8b
48 = 4b
b = 12 pesos
Replace the price for and breadfruits into the initial equation to derive income
66 + 48 = 114 pesos
I hope my answer helps you
Which of the following includes managing the movement of raw materials and parts from their sources to production sites; managing the movement of materials, semi-finished, and finished products within and among plants, warehouses, and distribution centers; and the planning and coordinating of the physical distribution of finished goods to intermediaries and final buyers?
a. intermodal transportation
b. contract logistics
c. logistics
d. materials handling
Answer: c. Logistics
Explanation: management of the movement of raw materials and parts from their sources to production sites; the movement of materials, semi-finished, and finished products within and among plants, warehouses, and distribution centers; planning and coordinating of the physical distribution of finished goods to intermediaries and final buyers are all contained in logistics.
Logistics is a part of operations and is defined as the process of planning, implementing, and controlling the efficient, effective flow and storage of raw materials, goods (finished, semi-finished etc), services and related information from their point of origin to point of consumption for the purpose of satisfying customer requirements.
The logistics department is responsible for managing the movement of raw materials from their sources to production sites and other stated functions.
Logistics refers to the process of planning, implementing, and controlling the flow and storage of raw materials, goods and services.
The logistics department is responsible for
managing the movement of raw materials and parts from their sources to production sites.managing the movement of materials, semi-finished, and finished products within and among plants, warehouses, and distribution centers.planning and coordinating of the physical distribution of finished goods to intermediaries and final buyers.Hence, the Option C is correct.
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While the examples in this chapter have focused on a single-employer plan, many states operate statewide plans, referred to as Public Employee Retirement Systems (PERS), to which multiple employers contribute. One of the largest PERS plans in the nation is operated in the State of California. Required To answer the following questions, use the website found at www.calpers.ca.gov . The answers to the questions can be found in CalPERS's annual report and by using the "about," "organization." and "facts at a glance" sections Page 348 provided on the site. a. When was CalPERS established? b. How many employers contribute to CalPERS? c. How many members are served by CalPERS? d. What types of programs are administered by CalPERS? e. For the most recent reporting period, what is the value of total net position as listed in the statement of net position? f For the most recent reporting period, what was the total change in pension fund net position as reported in the statement of changes in net position? &.For the most recent reporting period, what was the funded status of pension programs PERF B and PERF C?
Answer:
a. 1932
b. 2,945 employers
c. Over 1.9 million members
d. They include Health Program, Long Term Care Plan, Deferred Compensation Plan and California Employers' Retiree Benefits Trust Fund for Post Retirement Program.
e. Value of total net position as of 30th June 2017 is $588.868 million
f. The total change in pension fund net position for most recent reporting period 30 June, 2017 is $27,984,457 thousands
g. PERF B is Schools and PERF C is Public Agency
Explanation:
a. CalPERS was established in 1932 as the "State Employees' Retirement System" and this name was changed as California Public Employees' Retirement System" (CalPERS) in the year 1992.
B) 2,945 Employers contribute to CalPERS. It includes 1,578 public agencies, 1,366 school districts and 1 the state of california.
C) 1.9 million members are served by CalPERS.
D) Two types of programs are administered by CalPERS:
1) Health Program
2) Other Programs: It includes-Long terms care plan,Deferred Compensation plan and California Employers' Retiree Benefits Trust Fund for post retirement program.
E) Value of total net position as on 30 June 2017 is $588.868 million (588,868,000) and as of June 30 June 2016 it is USD 572.292 million.
F) The total change in pension fund net position for most recent reporting period 30 June, 2017 is $27,984,457 thousands as added $(20,171,011+ 5,085,422 + 2,538,563 + 8,481+183,146 - 2,166).
G) For Most recent reporting period 30 June, 2017 the funded status of pension programs PERF B is Schools and PERF C is Public agency.
Bryan and Cody each contributed $120,000 to the newly formed BC Partnership in exchange for a 50% interest. The partnership used the available funds to acquire equipment costing $200,000 and to fund current operating expenses. The partnership agreement provides that depreciation will be allocated 80% to Bryan and 20% to Cody. All other items of income and loss will be allocated equally between the partners. Upon liquidation of the partnership, property will be distributed to the partners in accordance with their capital account balances. Any partner with a negative capital account must contribute cash in the amount of the negative balance to restore the capital account to $0. In its first year, the partnership reported an ordinary loss (before depreciation) of $80,000 and depreciation expense of $36,000. In its second year, the partnership reported $40,000 of income from operations (before depreciation), and it reported depreciation expense of $57,600.
a. Calculate the partners’ bases in their partnership interests at the end of the first and second tax years. Are any losses suspended? Explain.
b. Does the allocation provided in the partnership agreement have economic effect? Explain.
Solution:
1. It is given that capital contribution on year 1 is $120,000. Loss allocation is $40,000. It is equal. Depreciation is allocated on the basis of 80:20. Thus, depreciation expense of $36,000 is allocated as $28,800 and $7,200. They all are added. Therefore, basis on the end of year 1 is $51,200 and $72,800. Income allocation on year 2 is $20,000. Depreciation allocation on year 2 is also allocated same with $57,600. It is $46,080 and $11,520. Therefore, basis on the end of year 2 is $25,120 and $81,280. No losses were suspended for any partner. As there is no loss beyond partner’s tax basis it is not suspended.
2. It is true that the allocations on the agreement of partnership have “economic effect”. Given gains, income or any losses are reflected through their allocation in the balance of capital accounts. Capital balances that are deficit must be restored and capital accounts balance on end should be in accordance with liquidating distributions.
Mellon Corporation The data presented below is Mellon Corporation for the year ended December 31, 2015: Sales (100% on credit) $1,500,000 Sales returns 60,000 Accounts Receivable (December 31,2015) 250,000 Allowance for Doubtful Accounts [Credit Balance] (Before adjustment at December 31, 2015) 3,000 Estimated amount of uncollectible accounts based on an aging analysis 31,000 Refer to the data for Mellon Corporation. If Mellon uses the aging of accounts receivable approach to estimate its bad debts, what amount will be reported as bad debt expense for 2015
Answer:
The bad debts expense for 2015 would be $ 28,000
Explanation:
The balance of the allowance for doubtful account should be equal to the amount estimated to be uncollectible based on the ageing analysis
Estimated uncollectible account $ 31,000
Allowance for doubtful accounts prior to adjustment $ 3,000
Bad debts expense for the year to be recorded $ 28,000
The accounting entry to record this is as follows:
Bad debts expense Debit $ 28,000
Allowance for uncollectible accounts Credit $ 28,000
Final answer:
To find the bad debt expense for Mellon Corporation for 2015, subtract the existing allowance for doubtful accounts from the estimated uncollectible accounts. The calculation is $31,000 estimated uncollectibles - $3,000 existing allowance = $28,000 bad debt expense.
Explanation:
The student is asking how to calculate the bad debt expense for Mellon Corporation for the year 2015 using the aging of accounts receivable method. The data shows that the Allowance for Doubtful Accounts has a credit balance of $3,000 before adjustment, and based on an aging analysis, the estimated amount of uncollectible accounts is $31,000. To determine the bad debt expense for 2015, we simply need to adjust the existing allowance to match the estimated uncollectible amount.
The bad debt expense is the difference between the estimated uncollectibles and the existing allowance. We calculate this as follows:
Estimated uncollectible accounts based on aging analysis: $31,000Existing Allowance for Doubtful Accounts credit balance: $3,000Bad debt expense for 2015: $31,000 - $3,000 = $28,000Therefore, Mellon Corporation will report a bad debt expense of $28,000 for the year ended December 31, 2015.
Based on your understanding of bond ratings and bond-rating criteria, which of the following statements is true?a. During an economic recession and in a pessimistic environment, the yield spread between US government bonds and corporate bonds could be higher than during good economic times.b. During a period of economic growth and in an optimistic environment, the yield spread between US government bonds and corporate bonds could be higher than during an economic recession and a pessimistic environment.
Answer:
Statements "A" is true.
Explanation:
During a financial recession and a cynical domain, the yield spread between government securities and corporate securities could be higher than during great monetary occasions. This is because the grounds that during a recession, corporate securities would convey more hazard, (for example, higher default chance) than during great monetary occasions. To make up for this extra hazard, financial specialists would request more returns.
A food company trying to increase its profits by expanding in to the soft drinks business is an example of a. Economies of Scope b. Economies of scale c. Diseconomies of Scale d. Diseconomies of Scope
Option A
A food company trying to increase its profits by expanding in to the soft drinks business is an example of Economies of Scope
Explanation:Economies of scope represent conditions when creating two or more goods or services collectively occurs at a more economical cost than manufacturing them individually. Economies of scope are an industrial concept that the total price to build a product will diminish as the diversity of products raises.
The provocation in seeking economies of scope is the likelihood of reducing what your business was formerly known for. Products that participate in the related inputs or that have equivalent productive manners contribute great possibilities for economies of scope through diversification.
Curly’s Life Insurance Co. is trying to sell you an investment policy that will pay you and your heirs $30,000 per year forever. A representative for Curly’s tells you the policy costs $550,000. At what interest rate would this be a fair deal? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) Interest rate %
Answer:
r = 5.45%
Explanation:
Given that
30,000 is to be paid per year
550,000 is the policy cost
Therefore
Using present value of perpetuity
PV = D/r
550,000 = 30,000/r
Where
r = interest rate
Dividend = 30,000
PV = 550,000
Thus
r = 30,000 ÷ 550,000
r = 5.45%
The interest rate that would make a perpetual payment of $30,000 per year equivalent to a present value of $550,000 is 5.45%. This is determined by using the formula for the present value of a perpetuity and solving for the interest rate.
The question is asking to calculate the interest rate that would make a perpetual payment of $30,000 per year equal to a present value of $550,000. This can be calculated using the formula for the present value of a perpetuity:
PV = PMT / r
Where PV stands for present value, PMT stands for payment (annuity amount), and r is the annual interest rate.
Rearranging the formula to solve for r gives us:
r = PMT / PV
Plugging in the values:
r = $30,000 / $550,000
r = 0.0545454545
Converting this to a percentage and rounding to two decimal places:
Interest rate = 5.45%
Therefore, the interest rate that would make the investment policy a fair deal is 5.45%.
Net credit sales total $ 1 comma 431 comma 000. Beginning and ending accounts receivable are $ 69 comma 000 and $ 37 comma 000, respectively. Calculate the days' sales outstanding. (Round interim calculations to two decimal places, XX.XX and the days' sales outstanding (DSO) up to the next whole day.) A. 11 days B. 20 days C. 14 days D. 9 days
Answer:
The days' sales outstanding: C. 14 days
Explanation:
Average Accounts Receivable = (The beginning accounts receivable balance + The ending accounts receivable balance)/2 = ($69,000 + $37,000)/2 = $53,000.
Accounts Receivable Turnover = Net Credit Sales /Average Accounts Receivable = $1,431,000/$53,000 = 27 times
The days' sales outstanding = 365/Accounts receivable turnover ratio = 365/27 = 14 days
A company distributes college logo sweatshirts and sells them for $55 each. The total cost function is linear, and the total cost for 50 sweatshirts is $4346, whereas the total cost for 240 sweatshirts is $7576. (a) Write the equation for the revenue function R(x).
Answer:
the revenue function is R(Q)=$55/swshrt * Q and the profit function is P(Q)=$3496 - $38/swshrt * Q
Explanation:
since the cost function is linear , then denoting C as cost , Q as quantities of sweatshirts and 1 and 2 as reference points , we get
C= C₁ + (C₂-C₁)/(Q₂-Q₁)*(Q-Q₁)
replacing values
C= $4346 + ($7576- $4346)/(240 -50 )*(Q-50 )= $4346 + $17/swshrt*(Q- 50)
and the revenue function (total sales is )
R= P*Q = $55/swshrt * Q
the profit function is therefore
P = R - C = $55/swshrt * Q - [$4346 + $17/swshrt*(Q- 50)] = $3496 - $38/swshrt * Q
Notes
- Revenue refers to the total income generated , while profit refers to the income after costs and expenses
- We can verify the cost equation for C . For Q=Q₁
C= C₁ + (C₂-C₁)/(Q₂-Q₁)*(Q₁-Q₁) = C₁ + 0 = C₁
and for Q=Q₂
C= C₁ + (C₂-C₁)/(Q₂-Q₁)*(Q₂-Q₁) = C₁ + C₂-C₁ = C₂
thus our equation is correct
Answer:
The revenue equation is TR=55*P
Total cost equation is TC=3496+17Q
Explanation:
The formula for revenue is given quantity multiplied by price
TR=PQ
P is the price per unit ]
Q is the total quantity
since P is $55
TR=55P
The total cost function can also be determined thus:
TC =a+bQ
where a is the fixed cost
b is variable cost per unit
Q is the number of output
when TC is $4346,Q was 50
when TC was $7576 Q was 240
7576=a+240b
4346=a+50b
subtracting the two equations
3230 =190b
b=3230/190
b=$17
by substituting b in any of the equations,fixed cost can be determined
4346=a+(17*50)
4346=a+850
a=4346-850
a=3496
Total cost function
TC=3496+17Q
A news reporter follows an important story from its origins to its ultimate end by digging into every possible corner of the story. This would be an example of ______ journalism.
Answer:Good
Explanation:
When purchasing bulk orders of batteries, a toy manufacturer uses this acceptance sampling plan: Randomly select and test 51 batteries and determine whether each is within specifications. The entire shipment is accepted if at most 2 batteries do not meet specifications. A shipment contains 5000 batteries, and 2% of them do not meet specifications. What is the probability that this whole shipment will be accepted? Will almost all such shipments be accepted, or will many be rejected? The probability that this whole shipment will be accepted is nothing. (Round to four decimal places as needed.) The company will accept nothing% of the shipments and will reject nothing% of the shipments, so many of the shipments will be rejected. almost all of the shipments will be accepted. many of the shipments will be rejected. (Round to two decimal places as needed.)
Answer:
Here, n = 51
Probability of success, p = 0.02
Probability of failure, q = 0.98 (= 1−0.2)
The entire shipment is accepted if at most 2 batteries do not meet specification. That is we have to find P(x ≤ 2).
probability = P(x=0)+p(x+1)+p(x=2)
=(0.02)^0(0.98)^51-0+(0.02)^1(0.98)^51-1+(0.02)^2(0.98)^51-2.
= 0.0071 +0.0073+0.00015
= 0.0145
= 1.45%
According to the concept of organizational demography, if team members have dissimilar experiences, it will lead to ________. higher team efficacy higher employee turnover increased employee satisfaction decreased level of conflicts higher employee motivation
Answer: Higher employee turnover
Explanation:
There are different aspect of organizations. According to the concept of organizational demography, if team members have dissimilar experiences, it will lead to higher employee turnover.
Organizational demography is simply known to be the study of the makeup of a social entity when looking at its members' attributes.
This demography means the act or method which one measures the employee of the organization shares of a common place of work not looking at their caste, sex, religion, etc.
Learn more about Organizational demography from
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Blue Seas Cruiseline offers two types of dinner cruises: Regular and Executive. The contribution margin per ticket sold is $30 for the regular cruise, and $90 for the executive. Fixed costs are $210,000. It expects to sell four regular dinner cruises for every one executive dinner cruise. What is the total number of regular cruises Blue Seas must sell in order to breakeven? A. 1,750 B. 5,000 C. 4,000 D. 1,000
Answer: A - 1,750
Explanation:From the above question, The contribution margin per ticket sold is $30 for the regular cruise and $90 for the executive. Fixed costs are $210,000.
What is the total number of regular cruises Blue Seas must sell in order to breakeven?
BEP in units = fixed cost/ contribution margin.
= $210,000/($30 * 4) = 1,750
Answer:
C. 4,000 regular cruises
Explanation:
The Break-even point is where the operating income is zero that is, the firm pay theri variable and fixed cost related to opperations.
[tex]\frac{Fixed\:Cost}{Contribution \:Margin} = Break\: Even\: Point_{units}[/tex]
Where:
[tex]Sales \: Revenue - Variable \: Cost = Contribution \: Margin[/tex]
As the company has multple product we must solve for the contribution of the mix:
regular: 30
executive: 90
the ratio of sales is 4:1
Thus 30 x 4/5 + 90 x 1/5 = contribution mix
contribution mix:42
At the current sales ratio we expect to make 42 dollar per seat
Now we calcualte for the BEP of the mix:
[tex]\frac{210,000}{42} = Break\: Even\: Point_{units}[/tex]
BEP 5000
Now, we solve for the ratio of sales wich is 4/5 for regular cruises:
5,000 x 4/5 = 4,000
Blue Corporation issued 660 shares of no-par common stock for $8,600.Prepare Blue’s journal entry if (a) the stock has no stated value, and (b) the stock has a stated value of $4 per share
Answer:
(a) Dr Cash $8, 600
Cr common stock – no par value $8, 600
Shares issued at no par value
(b)Dr Cash $8, 600
Cr Common stock $2, 640
Cr Additional paid-in capital $5, 960
Shares issued at no par value
Explanation:
No-Par Value Stock:
No-par value stock is shares that have been issued without a par value.
Par value is the face value of a bond or share. It is the per share amount that will appear on some stock certificate. In the case of common stock (shares), the par value is usually a very small amount such as $0.10. this par value has no connection with the market value of the share.
The reason why shares have par values is because these par values are stated in an organization’s corporate charter; and shares cannot be issued at a value that is less than the par value. The par value or any share or bond is not the face value of the share or bond.
(a) If the share is carried in the organization’s accounts at its issue price i.e. the shares have no stated value, then this is how the journal entry is recorded:
Dr Cash $8, 600
Cr common stock – no par value $8, 600
Shares issued at no par value
(b) If the share is carried in the organization’s accounts at stated value, this is how the journal entry is recorded:
Dr Cash $8, 600
Cr Common stock $2, 640
Cr Additional paid-in capital $5, 960
Shares issued at no par value
This is how we arrived at the answer for (b):
660 shares were issued at $4 per share, therefore 660 x $4 = $2, 640
The balance of $5, 960* is recorded as additional paid-in capital.
*$8, 600 - $2, 640 = $5, 960
Answer and Explanation:
Journal entries Debit Credit
(a) Cash $8,600
Common Stock $8,600
Issuance of 660 shares of no-par common stock
(b) Cash $8,600
Common Stock (W1) $2,640
Paid in Capital in excess of par (W2) $5,960
Issuance of 660 shares at a stated value of $4 per share
Working:
(W1) Common stock = Number of shares issued x Stated value per share
= 660 x $4
= $2,640
(W2) Paid in Capital in excess of par = Cash - Common Stock
= $8,600 - $2,640
= $5,960