Answer:
The answer is A.
Explanation:
A perfectly competitive factor market can be defined as a perfectly competitive market where all the products produced by different manufacturers are the same, the product cost and the price of the product are known to all parties etc.
Imperfect information in economics refers to a situation where the information among different parties such as manufacturer, consumer etc is not equal and balanced.
The correct answer among the given options is A, hiring workers that have earned good grades in college to make up for the information imbalance and overcome the imperfect information problem.
I hope this answer helps.
To overcome imperfect information in factor markets, firms may rely on academic achievements as indicators of productivity or promote from within to assess worker capabilities based on observed performance.
Explanation:The marginal productivity theory suggests that firms operating in a perfectly competitive factor market pay each factor of production its marginal revenue product. However, when these markets are not perfectly competitive, firms may face imperfect information, resulting in various strategies to overcome this issue.
Firms seek to overcome information problems through different methods, such as:
Only hiring workers who have earned good grades in college as a signal of their potential productivity.Promoting workers from within the company who have proven their productivity, rather than hiring from outside, which can also help to reduce the imperfect information about worker capabilities.These strategies help firms to approximate the marginal productivity of potential and current employees, thereby assisting in making informed hiring and promotion decisions.
Hoi Chong Transport, Ltd., operates a fleet of delivery trucks in Singapore. The company has determined that if a truck is driven 114,000 kilometers during a year, the average operating cost is 12.7 cents per kilometer. If a truck is driven only 76,000 kilometers during a year, the average operating cost increases to 14.8 cents per kilometer.
Required:
1.Using the high-low method, estimate the variable and fixed cost elements of the annual cost of the truck operation. (Do not round your intermediate calculations. Round the Variable cost per kilometer to 3 decimal places and Fixed cost answer to nearest whole dollar amount.)
2. Express the variable and fixed costs in the form Y = a + bX. (Do not round your intermediate calculations. Round the Variable cost per kilometer to 3 decimal places.)
3. If a truck were driven 95,000 kilometers during a year, what total cost would you expect to be incurred? (Do not round intermediate calculations.)
Explanation:
The computation of the fixed cost and the variable cost per hour by using high low method is shown below:
Variable cost per hour = (High Operating cost - low operating cost) ÷ (High driven in kilometers - Low driven in kilometers)
where,
High operating cost = 114,000 km × 12.7%
= $14,478
Low operating cost = 76,000 km × 14.8%
= $11,248
So,
= ($14,478 - $11,248) ÷ (114,000 km - 76,000 km)
= $3,230 ÷ 38,000 km
= $0.085 per km
Now the fixed cost equal to
= High operating cost - (High driven in kilometers × Variable cost per km)
= $14,478 - (114,000 km × $0.085)
= $14,478 - $9,690
= $4,7882
2. The equation is as follows
Y = a + bx
So,
Total cost = $4,788 + 0.085X
3.
Y = a + bx
= $4,788 + 0.085 × 95,000
= $4,788 + $8,075
= $12,863
1. Variable Cost per Kilometer is $0.085 and Fixed Cost is $4,788 2. Cost Formula is [tex]\( Y = 4,788 + 0.085X \)[/tex]. 3.Total Cost for 95,000 Kilometers is $12,863.
To solve this problem, we'll use the high-low method to estimate the variable and fixed cost elements of the annual cost of truck operation.
Step 1: Determine Variable and Fixed Costs
Given Data:
High activity level: 114,000 kilometers, cost: 12.7 cents/km
Low activity level: 76,000 kilometers, cost: 14.8 cents/km
Total Costs at High and Low Activity Levels:
High activity total cost: [tex]\(114,000 \times 0.127 = 14,478\)[/tex] dollars
Low activity total cost: [tex]\(76,000 \times 0.148 = 11,248\)[/tex] dollars
Variable Cost per Kilometer:
[tex]\[ \text{Variable Cost per Kilometer} = \frac{\text{Cost at High Activity} - \text{Cost at Low Activity}}{\text{High Activity Kilometers} - \text{Low Activity Kilometers}} \][/tex]
[tex]\[ \text{Variable Cost per Kilometer} = \frac{14,478 - 11,248}{114,000 - 76,000} \][/tex]
[tex]\[ \text{Variable Cost per Kilometer} = \frac{3,230}{38,000} \][/tex]
[tex]\[ \text{Variable Cost per Kilometer} = 0.085 \text{ dollars} \][/tex]
Fixed Costs:
Using the variable cost per kilometer, we can calculate the fixed cost using the total cost equation for either the high or low point.
Let's use the high point:
[tex]\[ \text{Total Cost} = \text{Fixed Cost} + (\text{Variable Cost per Kilometer} \times \text{Kilometers Driven}) \][/tex]
[tex]\[ 14,478 = \text{Fixed Cost} + (0.085 \times 114,000) \][/tex]
[tex]\[ 14,478 = \text{Fixed Cost} + 9,690 \][/tex]
[tex]\[ \text{Fixed Cost} = 14,478 - 9,690 \][/tex]
[tex]\[ \text{Fixed Cost} = 4,788 \text{ dollars} \][/tex]
Step 2: Express the Costs in the Form [tex]\(Y = a + bX\)[/tex]
Where:
\(Y\) = Total Cost
\(a\) = Fixed Cost = $4,788
\(b\) = Variable Cost per Kilometer = $0.085
\(X\) = Number of Kilometers Driven
[tex]\[ Y = 4,788 + 0.085X \][/tex]
Step 3: Predict the Total Cost for 95,000 Kilometers
Using the cost formula:
[tex]\[ Y = 4,788 + 0.085 \times 95,000 \][/tex]
[tex]\[ Y = 4,788 + 8,075 \][/tex]
[tex]\[ Y = 12,863 \text{ dollars} \][/tex]
Your firm needs to invest in a new delivery truck. The life expectancy of the delivery truck is five years. You can purchase a new delivery truck for an upfront cost of $200,000, or you can lease a truck from the manufacturer for five years for a monthly lease payment of $4000 (paid at the end of each month). Your firm can borrow at 6% APR with quarterly compounding.
The present value of the lease payments for the delivery truck is closest to $____.
Answer:
The present value of the lease payments for the delivery truck is closest to $207,050.
Explanation:
First we need to calculate the monthly discount rate for the lease arrangement.
EAR = (1 + APR / k) [tex]^{k}[/tex]- 1
= (1 + 0.06 / 4)[tex]^{4}[/tex] - 1 = 0.06136 or 6.14%
Monthly rate = (1 + EAR)([tex]\frac{1}{12}[/tex]) - 1
= (1.06136)[tex]^{\frac{1}{12}}[/tex] - 1 = 0.004975 = 0.4975%
Now we can apply the PVA formula in excel or calculate the PV of the lease or by a calculator:
I = 0.4975
N = 60 (5 years × 12 months/yr)
FV = 0
PMT = $4000
PV = 207,051.61.
The Yum and Yee food truck near the business school serves customers during lunch hour by taking orders and making fresh batches of stir-fry. Customers have only one choice during the lunch hour so that Y&Y can maximize the number of customers served. Assume that each customer places just one lunch order, and all lunch orders are the same size: one unit of stir-fry. The stir-fry cooking works in this manner. First, one person cooks a batch of orders in a wok. The cooking depends upon the number of orders in the batch. The time to cook just one order is 3 minutes. For each additional order in the batch, it takes 0.5 minute more to cook. Thus, cooking two orders in a batch takes 3.5 minutes, cooking three orders takes 4 minutes, and so on. The other process is bagging and accepting payments (done by a separate person), which takes 0.80 minute per order.
a.What is the setup time of this process?
b.If Y&Y operates with batch sizes of 6 units, what is their process capacity (in orders per minute)?
c.If Yum and Yee operates with batch sizes of 10 units, what is the utilization of the wok?
d.Calculate the batch size (in orders) that maximizes the overall flow rate (assume there is ample demand)?
Answer:
Setup time = 2.5 min. per order
Process capacity = 1.09 units/minute
Utilization = 7.5 minutes
Explanation:
The time to cook just one order = 3 minutes
Cooking two orders in a batch = 3.5 minutes
cooking three orders = 4 minutes
bagging and accepting payments = 0.80 minutes
a) Setup time:
Setup time = 3 - 0.5
= 2.5 min. per order
b) Process capacity:
Production = Setup time + ( Processing time * Batch size )
= 2.5 + (0.5 * 6)
= 5.5 minutes
Process capacity = Batch size / Production
= 6 / 5.5
= 1.09 units/minute
c) Utilization:
Batch size = 10
Production = Setup time + (Processing time * Batch size)
= 2.5 + (0.5 * 10)
= 7.5 minutes
The base time for setting up the cooking process is 3 minutes. If Y&Y operates with 6 units, the capacity is approximately 1.09 orders per minute, and if they run 10 units, the utilization of the wok is 12.5%. To maximize the flow rate, smaller batch sizes or even single orders should be the strategy due to the incremental nature of cooking time.
Explanation:a. The setup time for preparing a batch of stir-fry is 3 minutes. This is the base time without counting any additional orders in the batch. b. If Y&Y operates with batch sizes of 6 units, the total time required to prepare a batch is 3 (for the first unit) + 0.5*(6-1) = 5.5 minutes. The capacity is 6 units / 5.5 minutes = 1.09 orders per minute.
c. If Yum and Yee operates with batch sizes of 10 units, the total time required to cook is 3 (for the first unit) + 0.5*(10-1) = 7.5 minutes. To calculate the utilization, we also need the available time. If the wok may be operated continuously, then the utilization is 7.5/60 = 12.5%.
d. The batch size that maximizes the flow rate can be found by dividing the time available for cooking (in minutes) by the cooking time per order (in minutes/order). Since the cooking time per order could vary depending on the batch size, this calculation could be complex. However, by given information, we know cooking time 'increases' with batch size, implying smaller batch sizes or even single orders should optimize the flows.
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Mustard Corporation (a C corporation) owns 15% of the stock of Burgundy Corporation (a C corporation), which pays an annual dividend to its shareholders. Mustard is considering the purchase of additional shares of Burgundy stock. Would this stock purchase affect the amount of dividends received deduction that Mustard can claim
Answer:
Yes, it will affect it.
Explanation:
The dividends received deduction (DRD) refers to a US federal tax law that allows some corporation that are paid dividend by related entities to deduct certain percentage of the dividend received from their income tax depending on their percentage of ownership of the related entity that paid the dividend.
The three criteria or tiers that determines how much to deduct as DRD are as follows:
1. Generally, the DRD a corporation is qualified for is 70% of the dividend received.
2. A DRD equals to 80% of the dividend received can be deducted if the corporation holds more than 20% but less than 80% shareholding of the company that paid the dividend.
3. If the corporation holds more than 80% shareholding of the company that paid the dividend, a DRD of 100% of the dividend applies.
Therefore, additional stock purchase will affect the amount of dividends received deduction that Mustard can claim.
Final answer:
Purchasing additional shares of Burgundy Corporation could affect Mustard Corporation's dividends received deduction (DRD). The impact depends on whether the additional shares purchased increase Mustard's ownership stake to reach certain thresholds, which would allow a higher percentage of the dividends to be deducted from taxable income.
Explanation:
The purchase of additional shares of Burgundy Corporation stock by Mustard Corporation would affect the dividends received deduction (DRD) that Mustard can claim for tax purposes. The DRD allows a corporation that receives a dividend from another corporation in which it has an ownership stake to deduct a portion of that dividend from its taxable income. Notably, the amount of deduction depends on the percentage of ownership. Owning more shares typically entitles the shareholder to a larger deduction. Under U.S. tax law, corporations that own less than 20% of another corporation can deduct 50% of dividends received, those owning between 20% to 80% can deduct 65%, and those owning more than 80% can deduct 100%. If Mustard Corporation purchases additional shares and its ownership stake in Burgundy Corporation increases to meet one of these thresholds, the DRD percentage that Mustard Corporation can claim may increase, leading to a potentially more favorable tax treatment of the received dividends.
On July 1, 2019, Major Co. pays $15,120 to Mesa Insurance Co. for a 4- year insurance contract. Both companies have fiscal years ending December 31 Journalize and post the entry on July 1 and the adjusting entry on December 31 for Mesa Insurance Co. Mesa uses the accounts Unearned Service Revenue and Service Revenue. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. Record journal entries in the order presented in the problem. Round answers to O decimal places,e.g. 5,275.) Date Account Titles and Explanation Debit Credit Unearned Service Revenue Service Revenue
Answer:
Debit Cash account $15,120
Credit Unearned Service Revenue $15,120
Being entries to record cash collected for service to be rendered.
Debit Unearned Service revenue $1,890
Credit Service Revenue $1,890
Being entries to recognize revenue earned as at 31 December
Explanation:
When an amount is collected in advance for a service yet to be rendered, the company recognizes and asset in form of cash and a liability in form of Unearned Service Revenue.
When the service for which cash was collected is performed, revenue is said to have been earned. Entries required then are debit Unearned Service Revenue Credit Service revenue.
For Mesa, on 1 July , entries required are
Debit Cash account $15,120
Credit Unearned Service Revenue $15,120
Being entries to record cash collected for service to be rendered.
As at 31 December, revenue earned
= 1/2 × $15120/4
= $1890
Entries required
Debit Unearned Service revenue $1,890
Credit Service Revenue $1,890
Being entries to recognize revenue earned as at 31 December
The journal entries and adjusting entries should be shown below.
Journal entries:Cash account $15,120
Unearned Service Revenue $15,120
(Being entries to record cash collected for service to be rendered)
Unearned Service revenue $1,890 ( 1/2 × $15120/4)
Service Revenue $1,890
( to recognize revenue earned as at 31 December)
These journal entries should be recorded.
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In 1958, a first-class postage stamp for a 1-ounce envelope was $0.04. In 2012, a first-class postage stamp for the same envelope is $0.45. What was the annual compound increase in the cost of the first-class postage during the 54 year period
Answer:
The annual increase was approximately $0.002
Explanation:
In order to know the annual compound increase in the cost of the first-class postage during the 54 year period, we need to know the rate at which the compound interest was calculated. We can know that using the following compound interest formula:
[tex]A = P(1 + \frac{r}{100})^{t}[/tex]
P = principal amount (the initial amount for the envelope)
r = annual rate of increase
t = number of years the amount is increased.
A = amount of money accumulated after n years, including the increase.
Now, we have our Amount at the 54th year to be 0.45dollars, when the principal is 0.04dollars.
Therefore, we have
A = $0.45
P = $0.04
r = unknown (that's what we are looking for)
t = 54
Substituting these into the formula, we have:
[tex]0.45 = 0.04(1 + \frac{r}{100})^{54}[/tex]
Dividing both sides by 0.04 we have:
[tex]11.25 = (1 + \frac{r}{100})^{54}[/tex]
Taking the 54th root of both sides we have(approximately):
[tex]1.05 = (1 + \frac{r}{100})[/tex]
The above gives:
[tex]0.05 = \frac{r}{100}[/tex]
This gives:
[tex]r = 5%[/tex]
Therefore, the money increased annually at the rate of 5% approximately, and that would be
[tex]\frac{5}{100} \times 0.04[/tex]
Which is $0.002 approximately.
Final answer:
The annual compound increase in the cost of a first-class postage stamp from 1958 to 2012 over 54 years is approximately 5.46%.
Explanation:
To calculate the annual compound increase in the cost of a first-class postage stamp from $0.04 in 1958 to $0.45 in 2012 over a period of 54 years, we use the formula for compound interest:
Final amount = Initial amount * (1 + rate)^number of years
Here, the final amount is $0.45, the initial amount is $0.04, and the number of years is 54. Plugging these values into our equation gives us:
$0.45 = $0.04 * (1 + rate)^54
To find the rate, we rearrange the formula to solve for the rate:
rate = ((Final amount / Initial amount)^(1/number of years)) - 1
rate = (($0.45 / $0.04)^(1/54)) - 1
Calculating this gives us an annual compound increase rate of approximately 5.46%.
Understanding the annual compound increase is crucial for comprehending economic inflation rates and the changing costs of goods and services over time.
A day care program frequently has a few parents picking up their children late. In an attempt to curb this, the daycare decides to charge a fine to parents who are more than 10 minutes late. However, after the fine was implemented, the number of late parents increased. Which of these conclusions can be true?
a. The fine eliminated the non-financial incentives to be on time
b. The fine was not high enough to discourage being late
c. The fine was perceived as a price
d. All of the above
Answer:
correct option is d. All of the above
Explanation:
given data
charge a fine for late = 10 minute
solution
The number of late parents has increased because their late opportunity cost is not high and they can afford it. There is no non-financial incentive to arrive any other time without paying a fine
so that here All the option is true
correct option is d. All of the above
An accounting clerk for Chesner Co. prepared the following bank reconciliation:
Chesner Co. Bank Reconciliation July 31, 2016
1. Cash balance according to company's records $11,100.00
2. Add: Outstanding checks $3,585.00
3. Error by Chesner Co. in recording Check No. 1056 as $950 instead of $590 360.00
4. Note for $12,000 collected by bank, including interest 12,480.00 16,425.00
5. $27,525.00
6. Deduct: Deposit in transit on July 31 $7,200.00
7. Deduct: Bank service charges 25.00 7,225.00
8. Cash balance according to bank statement $20,300.00
A. From the data prepared by the accounting clerk, prepare a new bank reconciliation for Chesner Co., using the format shown in the illustrative problem in the text. Refer to the Amount Descriptions list provided for the exact wording of the answer choices for text entries.
B. If a balance sheet were prepared for Chesner Co. on July 31, 2016, what amount should be reported for cash?
Amount Descriptions - Adjusted balance - Bank error in charging Check No. 1056 as $590 instead of $950 - Bank error in charging Check No. 1056 as $950 instead of $590 - Bank service charges - Deposit in transit on July 31 - Error in recording Check No. 1056 as $590 instead of $950 - Error in recording Check No. 1056 as $950 instead of $590 - Note for $12,000 collected by bank, including interest - Outstanding checks
Answer:
Explanation:
Bank reconciliation
Chesner Co.
July 31,2016
Cash balance according to bank statement $20,300
Adjustments:
Add:Deposit in transit on July 31 7200
Less:Outstanding checks -3585
Adjusted balance as per bank $23,915
Cash balance according to company’s records 11,100
Adjustments:
Add:Note for $12,000 collected by bank, including interest 12,480
Less:Bank service Charges -25
Add:Error in recording Check No. 1056 as $950 instead of $590 360
Adjusted balance as per Books 23,915
B. $23,915 should be reported to cash
In 2016, Chaya Corporation, an accrual basis, calendar year taxpayer, provided services to clients andearned $25,000. The clients signed notes receivable to Chaya that have a fair market value of$22,000 at year-end. In addition, Chaya sold a 36-month service contract on June 1, 2016, and received payment in full of $12,000.
How much income does Chaya report from these transactions in 2016?
Answer:
$27,333.33
Explanation:
The computation of the amount of income reported is shown below:
= Provided services to the customer + Payment received × number of months ÷ given number of months
= $25,000 + $12,000 × 7 months ÷ 36 months
= $25,000 + $2,333.33
= $27,333.33
The seven months is calculated from the June 1 to December 31. We assume the books are closed on December 31
Chaya Corporation reports a total income of $27,333.33 for 2016, which includes $25,000 from services provided and $2,333.33 from the service contract sold on June 1, 2016.
For Chaya Corporation, which is an accrual basis, calendar year taxpayer, the income reported for 2016 from the transactions mentioned can be determined as follows:
1. Services Provided: Chaya earned $25,000 from providing services. Under the accrual basis of accounting, income is recognized when services are performed, regardless of when cash is received. Thus, Chaya reports the full amount of $25,000 as income.
2. Fair Market Value of Notes Receivable: Chaya received notes receivable with a fair market value of $22,000 for the services. However, for accrual accounting, the income is recorded based on the amount earned, not the lower fair market value of the note receivable. Therefore, the $22,000 is not considered.
3. Service Contract: Chaya sold a 36-month service contract on June 1, 2016, and received $12,000. For accrual purposes, income must be allocated over the period the service is provided. For 2016, Chaya should report ($12,000 / 36 months) * 7 months = $2,333.33 as income earned from the service contract in 2016.
$25,000 from services provided$2,333.33 from the service contractTotal income reported for 2016: $25,000 + $2,333.33 = $27,333.33
A piece of equipment is purchased for $110,000 and has an estimated salvage value of $10,000 at the end of the recovery period. (a) Prepare a depreciation schedule for the piece of equipment using the straight-line method with a recovery period of seven years. (b) Prepare a depreciation schedule for the piece of equipment using the sum-of the-years method. (c) Prepare a depreciation schedule using the 200% declining balance method. (d) Prepare a depreciation schedule using the 150% declining balance method.
Answer:
Year //dep expense //ac dep //book value
- $110,000.00
1 $14,285.71 $14,285.71 $95,714.29
2 $14,285.71 $28,571.43 $81,428.57
3 $14,285.71 $42,857.14 $67,142.86
4 $14,285.71 $57,142.86 $52,857.14
5 $14,285.71 $71,428.57 $38,571.43
6 $14,285.71 $85,714.29 $24,285.71
7 $14,285.71 $100,000.00 $10,000.00
SUM OF YEARS
Year //factor// dep expense //ac dep //book value
- $110,000.00
1 0.25 $25,000.00 $25,000.00 $85,000.00
2 0.21 $21,428.57 $46,428.57 $63,571.43
3 0.18 $17,857.14 $64,285.71 $45,714.29
4 0.14 $14,285.71 $78,571.43 $31,428.57
5 0.11 $10,714.29 $89,285.71 $20,714.29
6 0.07 $7,142.86 $96,428.57 $13,571.43
7 0.04 $3,571.43 $100,000.00 $10,000.00
200% double declining:
[tex]\left[\begin{array}{ccccc}Year&Beginning&Dep-Expense&Acc. \: Dep&Ending\\0&-&-&-&110000\\1&110000&31428.57&31428.57&78571.43\\2&78571.43&22448.98&53877.55&56122.45\\3&56122.45&16034.99&69912.54&40087.46\\4&40087.46&11453.56&81366.1&28633.9\\5&28633.9&8181.11&89547.21&20452.79\\6&20452.79&5843.65&95390.86&14609.14\\7&14609.14&4609.14&100000&10000\\\end{array}\right][/tex]
150% accelerated depreaciation:
[tex]\left[\begin{array}{cccccc}Year&Beginning&Dep-Expense&Acc. \: Dep&Ending\\0&-&-&-&110000\\1&110000&23571.43&23571.43&86428.57\\2&86428.57&18520.41&42091.84&67908.16\\3&67908.16&14551.75&56643.59&53356.41\\4&53356.41&11433.52&68077.11&41922.89\\5&41922.89&8983.48&77060.59&32939.41\\6&32939.41&7058.45&84119.04&25880.96\\7&25880.96&15880.96&100000&10000\\\end{array}\right][/tex]
Explanation:
Straight Line:
Acquisition Value 110,000
Salvage Value 10,000
ammount subject to depreciation 100000
Useful Life 7
depreciation per year:
depreciable amount divided by useful life 14285.71
This amount is repeatead throughout the life of the equipment.
SUM OF YEARS FACTORS:
sum of year: 7*8/2 = 28
remaining years over sum of year
1st 7/28
2nd 6/28
3rd 5/28
4th 4/28
5th 3/28
6th 2/28
7th 1/28
Double declining 200%
we have to multiply 1/useful life by the double declining facot
in this case as it is 200% it will be 2.
threfore the carrying vlue is multiplied by 2/7 each year to determinatethe depreciation expense
declining 150%
here we multiply by 1.5 resulting in a factor of 3/14 to obtain the depreciation expense
Answer:
Depreciation schedule using Straight Line Method
Straight Sum of 200 % declining 150 % declining
Line the years balance balance
Method Method Method Method
Year 1 $ 14,285 $ 25,000 $ 31,427 $ 23,570
Year 2 $ 14,285 $ 21,429 $ 22,448 $ 18,520
Year 3 $ 14,285 $ 17,857 $ 16,035 $ 14,551
Year 4 $ 14,285 $ 14,286 $ 11,454 $ 11,433
Year 5 $ 14,285 $ 10,714 $ 8,181 $ 8,984
Year 6 $ 14,285 $ 7,143 $ 5,844 $ 7,059
Year 7 $ 14,285 $ 3,571` $ 4,174 $ 5,546
Explanation:
Computation of Depreciation under the straight Line Method
Cost of equipment $ 110,000
Salvage Value $( 10,000)
Depreciable Basis $ 100,000
Estimated Useful Life 7 years
Depreciation % per year 14.285%
Depreciation per year for each year $ 14,285
Computation of Depreciation under the Sum of the years method
In a sum of the years balance method the no of years recovery life is added together as a denominator and the first year the highest depreciation is charged. The salvage value is considered and the depreciable basis is the same as the Straight Line Method
Sum of the years ( 7 + 6 + 5 + 4 + 3 + 2 + 1) = 28
Depreciable basis $ 100,000
Depreciation Year 1 7/28 * $ 100,000 $ 25,000
Depreciation Year 2 6/28 * $ 100,000 $ 21,429
Depreciation Year 3 5/28 * $ 100,000 $ 17,857
Depreciation Year 4 4/28 * $ 100,000 $ 14,286
Depreciation Year 5 3/28 * $ 100,000 $ 10,714
Depreciation Year 6 2/28 * $ 100,000 $ 7,143
Depreciation Year 6 1/28 * $ 100,000 $ 3,571
Computation of Depreciation under 200 % declining balance method
In a declining balance method the salvage value is not considered and the depreciation is applied on a declining balance on double the straight line method depreciation %
Depreciable Basis - same as cost $ 110,000
Depreciation Rate - 14.285 % * 2 = 28,57 %
Depreciation for Year 1 - $ 110,000 * 28.57 % = $ 31,427
Depreciation Basis for Year 2 $ 78,573
Depreciation for Year 2 - $ 78,573 * 28.57 % = $ 22,448
Depreciation Basis for Year 3 $ 56, 125
Depreciation for Year 3 - $ 56,125 * 28.57 % $ 16,035
Depreciation Basis for Year 4 $ 40,090
Depreciation for Year 4 - $ 40,090 * 28.57 % $ 11,454
Depreciation Basis for Year 5 $ 28,636
Depreciation for Year 5 - $ 28,636 * 28.57 % $ 8,181
Depreciation Basis for Year 6 $ 20,455
Depreciation for Year 6 - $ 20,455 * 28.57 % $ 5,844
Depreciation Basis for Year 7 $ 14,611
Depreciation for Year 7 - $ 14,611 * 28.57 % $ 4,174
Computation of Depreciation under 150 % declining balance method
In a declining balance method the salvage value is not considered and the depreciation is applied on a declining balance on one and half times the straight line method depreciation %
Depreciable Basis - same as cost $ 110,000
Depreciation Rate - 14.285 % * 1.50 = 21,4275 %
Depreciation for Year 1 - $ 110,000 * 21.4275 % = $ 23,570
Depreciation Basis for Year 2 $ 86,430
Depreciation for Year 2 - $ 86,430 * 21.4275 % = $ 18,520
Depreciation Basis for Year 3 $ 67,910
Depreciation for Year 3 - $ 67,910 * 21..4275 % $ 14,551
Depreciation Basis for Year 4 $ 53,359
Depreciation for Year 4 - $ 53,359 * 21.4275 % $ 11,433
Depreciation Basis for Year 5 $ 41,925
Depreciation for Year 5 - $ 41,925 * 21.4275 % $ 8,984
Depreciation Basis for Year 6 $ 32,942
Depreciation for Year 6 - $ 32,944 * 21.4275 % $ 7,059
Depreciation Basis for Year 7 $ 25,883
Depreciation for Year 7 - $ 25,883 * 21.4275 % $ 5,546
Dumphy and Funke are rival tattoo artists in the small town of Feline. There are no other tattoo artists in town. It costs $30 to produce a Tweety Bird tattoo. Assume for simplicity that fixed costs are zero and that Dumphy and Funke perform identical work. For a while, there was too much demand for Funke and Dumphy to handle and they both charged $200 for a tatoo. But recently, demand has dropped significantly and there isn't enough work for both to fill their days at any price. However, there is some demand at all prices.a. What will be the equilabrium price that Dumphy and Funke will charge?b. What are the profits for Dumphy and Funke at the equilibrium price?c. What type of competition would Funke and Dumphy likely engage in after the decrease in demand?
Answer:
Part a: What will be the equilabrium price that Dumphy and Funke will charge?
Answer: Price charged = $30
Part b: What are the profits for Dumphy and Funke at the equilibrium price?
Answer: Profit on equilibrium price = $0
Part c: What type of competition would Funke and Dumphy likely engage in after the decrease in demand?
Answer: Price competition
Explanation:
Part a: What will be the equilabrium price that Dumphy and Funke will charge?
Answer:
Price charged by each of the artists will be equal to their marginal cost.
Thus, equilibrium P = MC = $30.
Part b: What are the profits for Dumphy and Funke at the equilibrium price?
Answer:
Equilibrium profits will be 0 at the equilibrium because price charged is equal to MC, leading to no profits.
Part c: What type of competition would Funke and Dumphy likely engage in after the decrease in demand?
Answer:
Price competition - as changes in price will lead to changes in demand and thus sales
In this limited market with two providers, the equilibrium price and profits cannot be decisively calculated without specific demand and supply information. However, the decline in demand will likely bring about price competition or differentiation in services or products.
Explanation:In this scenario, tattoo artists Dumphy and Funke operate in a duopoly market as there are no other competitors. As they perform identical work and have similar costs, they will likely end up charging the same price to remain competitive.
a) Equilibrium Price: The equilibrium price is determined by market forces - supply and demand. Given that demand has dropped, the equilibrium price would likely be lower than $200. However, the exact equilibrium price can't be determined without specific demand and supply information.
b) Profits: To calculate the profit, subtract the total cost of producing the service from the total revenue (price x quantity). As the cost of production for each tattoo is $30, anything above this would be profit. However, in a scenario of reduced demand, both artists might not have enough work to optimize their profits. Exact profits can't be determined without knowing how many tattoos they sell at the equilibrium price.
c) Type of Competition: After the decrease in demand, Dumphy and Funke could engage in price competition, where each attempts to undercut the other's price. Alternatively, they might differentiate their services by offering additional services or unique tattoo designs.
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If a genuine change of employer exists but the employing industry remains substantially the same, the successor employer ________. a is required to recognize the existing collective bargaining unit but not its representative, and is bound by the agreement b is required to recognize both the existing collective bargaining unit and its representative, and is bound by the agreement c is required to recognize the existing collective bargaining unit and its representative, but is not bound by the agreement d is not required to recognize the existing collective bargaining unit or its representative, and is not bound by the agreement
Answer:
Is required to recognize the existing collective bargaining unit and its representative but is not bound by the agreement.
Explanation:
If a genuine change of employer exists but the employing industry remains substantially the same, the successor employer is required to recognize the existing collective bargaining unit and its representative but is not bound by the agreement.
Collective Bargaining: It is a process to negotiate on demand for rights of employees, working conditions, compensation, etc by a representative of employee and employer sign an agreement with the employer on the agreed term on negotiation.
In 2018, DFS Medical Supply collected rent revenue for 2019 tenant occupancy. For income tax reporting, the rent is taxed when collected. For financial statement reporting, the rent is recorded as deferred revenue and then recognized as income in the period tenants occupy the rental property. The deferred portion of the rent collected in 2018 amounted to $460,000 at December 31, 2018. DFS had no temporary differences at the beginning of the year.
Required:
Assuming an income tax rate of 40% and 2018 income tax payable of $940,000, prepare the journal entry to record income taxes for 2018. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)
Answer:
income tax expense 756,000 debit
deferred tax assets 184,000 debit
income tax payable 940,000 credit
Explanation:
As we are taxes as we collect but, for accounting reasons we reocngize gains under accrual method we have a portion of unearned reveneu which generates a deffered tax assets as next year this amount will not generate a tax payable:
unearned revenue 460,000
deferred tax assets: 460,000 x 40% = 184,000
income tax payable 940,000
- deferred tax assets 184,000
income tax expense 756,000
A monopolistic seller of rare oriental rugs discovers that 60% of the population is willing to pay $1,000 for a rug. The remaining 40% of the population is willing to pay $2000. Each rug costs $600 to produce. How much should the monopolist charge for each rug?a. $600
b. $1000
c. $1500
d. $2000
Answer:
Option "D" is the correct answer to the following statement.
Explanation:
In this situation seller is a monopolist, he would charge the highest amount for his Goods or service, 40% of the total population will pay $2,000 for particular goods and services.
He is a monopolistic seller, so people will have to buy and Consume particular goods from him.
Profit For each beg should be highest if he sells his item at $2,000 each
Total Profit = Sales price - Cost
= $2,000 - $600
= $1,400
In a net lease, the tenant is responsible for paying a clearly defined portion of the property's operating expenses. Based on your understanding of the standard definitions of "netness" in commercial leases, the tenant is responsible for which of the following in a net-net lease?
A) both property taxes and insurance
B) no operating expenses
C) all operating expenses
D) only property taxes
Answer:
A
Explanation:
net-net refers to 2 of the operating expenses in Commerical property. Triple Net refers to all of the taxes, maintenance and insurance or TMI
A significant improvement in auto technology will: A. Shift the supply of cars out and to right, decreasing the equilibrium price of cars, but increasing the equilibrium quantity. B. Shift the demand for cars in and to the left, lowering the equilibrium price and quantity of cars. C. Shift the supply of cars in and to the left, increasing the equilibrium price of cars, but lowering the equilibrium quantity. D. Shift the supply of cars in and to the left, raising the equilibrium price and quantity of cars. E. Shift the demand for cars in and to the left, raising the equilibrium price of cars, but lowering the equilibrium price.
Answer:
A. Shift the supply of cars out and to right, decreasing the equilibrium price of cars, but increasing the equilibrium quantity.
Explanation:
The effect of technology on supply is that it will shift supply to the right. As cost of production reduces, producers can have more output at the same cost.
There will be excess supply (surplus), so customers will pay less for the product.
The equilibrium quantity will also increase as more cars are available in the market.
This is illustrated in the attached diagram. Equillibrum price reduces from P1 to P2. The equillibrum quantity increases from Q1 to Q2.
Government can influence cost of production through taxes, regulations and subsidies. Therefore they also influence shift of supply curve.
A significant advancement in auto technology will shift the supply curve for cars outward and to the right, which will decrease the equilibrium price but increase the equilibrium quantity of cars, aligning with option A.
Explanation:An improvement in auto technology, such as more fuel-efficient cars, will lead to a change in the market for cars. This improvement is typically viewed as a positive change in production technology, which makes it cheaper to produce cars or allows more cars to be produced with the same resources. Consequently, the supply curve for cars shifts outward and to the right, indicating that manufacturers are willing and able to supply more cars at each price level. This shift will lead to a decrease in the equilibrium price of cars, as the increased supply puts downward pressure on prices. However, the equilibrium quantity of cars will increase because more cars are available at lower prices, which can boost sales. This scenario matches option A: A significant improvement in auto technology will: Shift the supply of cars out and to right, decreasing the equilibrium price of cars, but increasing the equilibrium quantity.
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"Farley Frozen Yogurt is a perfectly competitive firm. The market price of a frozen yogurt cake is $7. Farley sells 200 frozen yogurt cakes. Its AVC is $6, and its AFC is $4."
Suppose the marginal cost for frozen yoghurt cake is $7. In this case, Farley frozen youghurt should:
(A) produce less.
(B) produce the same quantity
(C) produce more.
(D) non produce
Answer:
B. Produce the same quantity
Explanation:
Perfect Competition is market form with many buyers & sellers, where identical goods are sold at uniform prices .
In this market : Marginal Revenue (MR) = Average Revenue (AR) = Price (P) , as a horizontal curve parallel to X axis.
Producer is at profit maximising equilibrium where : MR = MC (Marginal Cost). Producer tends to stay at this production point.
So, by above 2 equations : MC = [ MR = P ] is the equilibrium for Farley Frozen Yogurt .
As given : Price = $7 & MC = $7 satisfies above equilibrium equality condition. Hence , this is Farley Frozen Yogurt's Producer Equilibrium & it would tend to produce the same quantity.
Final answer:
Farley Frozen Yogurt should continue to produce the same quantity of frozen yogurt cakes as the market price equals the marginal cost, and therefore the firm operates at the point where Price = MR = MC, contributing towards fixed costs despite incurring losses.
Explanation:
In a perfectly competitive market, the firm's decision regarding the quantity to produce is based on the equality of price, marginal revenue (MR), and marginal cost (MC). Given that Farley Frozen Yogurt sells its product at a market price of $7, which equals its marginal cost, the firm is currently operating at the point where Price = MR = MC and therefore should produce the same quantity of frozen yogurt cakes. Producing more would increase the average total cost (ATC), which is $10 (AVC + AFC), while producing less would not maximize profits. As long as the price covers the average variable cost (AVC) and contributes to fixed costs, the firm should continue to produce the same amount.
By following the pricing rule where Price = MR = MC, we must also consider the firm's profitability. If price equals MC but is less than ATC, the firm is incurring losses. In this scenario with Farley Frozen Yogurt, because the sale price ($7) is lower than the ATC ($10), each unit sold contributes to a loss. However, since the price is higher than AVC ($6), the firm is covering its variable costs and contributing $1 towards its fixed costs with each unit sold. Therefore, the best option for Farley Frozen Yogurt is to maintain production, hoping that market conditions will improve, or until fixed costs change the calculation.
This analysis is consistent with the example given where the price of frozen raspberries falls to the break even point, at which the firm's price received is exactly equal to its average cost of production. In such a scenario, the firm would also continue to produce the quantity where Price = MR = MC, to meet the condition for maximizing profits or in the worst case, minimizing losses.
On September 30, Silver Corporation, a calendar year taxpayer, sold a parcel of land (basis of $400,000) for a $1 million note. The note is payable in five installments, with the first payment due next year. Because Silver did not elect out of the installment method, none of the $600,000 gain is taxed this year. Silver Corporation had a $300,000 deficit in accumulated E&P at the beginning of the year. Before considering the effect of the land sale, Silver had a deficit in current E&P of $50,000. Sam, the sole shareholder of Silver, has a basis of $200,000 in his stock. If silver distributes $900,000 to Sam on December 31,
how much income must he report for tax purposes?
Answer: Sam must report $700,000($900,000 - $200,000) for tax purposes.
Explanation:
Because Sam is the sole shareholder of Silver, and has a basis of $200,000 in his stock. Once Silber distributes $900,00to Sam on December 31
Exercise 189 Hu, Marcos, and Letterman share income on a 6:3:1 basis. They have capital balances of $80,000, $60,000, and $45,000, respectively, when Buffett is admitted to the partnership. Prepare the journal entry to record the admission of Buffett into the partnership if Buffett purchases one-half of Hu’s equity for $45,000; one-half of Marcos’s equity for $22,000; and one-third of Letterman’s equity for $18,000. (Credit account titles are automatically indented when the amount is entered. Do not indent manually.)
Answer:
Debit Hu, 40,000, Marcos, 30,000 and Letterman 15,000 and credit Buffet, 85,000
Explanation:
The question is to journalize the entry of admitting Buffet into the partnership
First, we know that Buffet bought 1/2 of Hu, 1/2 of Marcos and 1/3 of Letterman.
Has such Buffet bought the following number of shares
Hu = 1/2 x $80,000 = $40,000
Marcos = 1/2 of $60,000 = $30,000
Letterman = 1/3 of $45,000 = $15,000
Buffet= 85,000
Jounal Entry
Description Debit($) Credit($)
Hu, Capital 40,000
Marco, Capital 30,000
Letterman, Capital 15,000
Buffet, Capital $85,000
Being the admission of Buffet in to partnership.
A company had 158 million shares outstanding at the beginning of the year 2012. On February 2, 2012, the company issued an additional 30 million shares to the market at a price of $50, while the market price per share was $50. The resulting price per share after new issuance will be____________.
The resulting price per share after new issuance will be $50
Solution:
Values:
Company shares = 158 million shares
Additional shares = 30 million shares
Market price = $50 per share
Evaluating:
Total value of equity prior to issue = Company shares * Market price
= 158 million * 50
= $7.9 billion
Value of share issue = Additional shares * Market price
= 30 million * 50
= $1.5 billion
Total value of equity after share issue = Total value of equity prior to issue + Value of share issue
= 7.9 billion + 1.5 billion
= $9.4 billion
Shares outstanding after share issue = Company shares + Additional shares
= 158 million + 30 million
= 188 million
Price per share after issue = [tex]\frac{Total value of equity after share issue}{Shares outstanding after share issue}[/tex]
= [tex]\frac{9.4 billion}{188 million}[/tex]
= $50
You have been hired by bizcom, a business communications consultancy that services many clients in different industries throughout the united states, to it improve its profit margin. bizcom provides customized recommendations for the best use of a client's existing resources for improving internal communications, typically delivered via documentation in different media. the company has approximately 50 consultants, all of whom are located in its central headquarters in alexandria, virginia. what type of system do you recommend that bizcom install to improve its business processes and increase its profit margin?
I recommend Bizcom to install an extranet, to enable quick collaboration over the Internet, minimize the time spent communicating with the client, and minimize the amount of paperwork needed.
Explanation:
Extranet is a kind of private network that helps organizations to exchange the information securely over Internet. The extranet can be used by vendors, suppliers and authorized set of customers to enable communication.
Internet helps in enabling quick collaboration and also reduces the paperwork. As all the information can be confidentially shared and stored using the Internet, the use of paper can be reduced. The time spent for communicating with the client can also be reduced.
In the above scenario, Bizcom has its consultants from various places. It is difficult to travel to every place and organize meeting. So installing an extranet can help them in keeping connected.
The company you work for is a programming services contractor that consults with businesses in the United States requiring assistance in creating software in compliance with the Health Insurance Portability and Accountability Act (HIPAA). Your company advertises a proven track record in providing secure code that meets regulatory and compliance recommendations that include the protection of all Personally Identifiable Information (PII).
Answer:
Explanation:
Find attached The compliance act policy for coding that talk about the various source code for diifrent organization
Answer:
Question:
The company you work for is a programming services contractor that consults with businesses in the United States requiring assistance in creating software in compliance with the Health Insurance Portability and Accountability Act (HIPAA). Your company advertises a proven track record in providing secure code that meets regulatory and compliance recommendations that include the protection of all Personally Identifiable Information (PII).
Your client is a small hospital and surgery center that requires a program that will calculate the bill for a patient's hospital stay, including charges for the surgery, daily hospital fees, and pharmacy. The hospital only performs five types of surgeries, limits the patient stay to three days, and has a limited pharmacy offering of ten prescription drugs. The hospital employees who will use the program should be able to enter the patient information, including name, hospital ID number, diagnosis, surgery type, length of stay, and prescriptions. The program will then produce a final billing statement. The client would like the program completed in six months.
Using the file provided and referencing the scenario above, complete the 2- to 3-page System Development Life Cycle Table. The table is designed to help you see how to apply the SDLC to an actual program.
Explanation:
SDLC: Software Development life cycle model is a complete systematic process which is followed to develop a high quality product which meets the customer expectations. It generally including below phases which is followed to develop software:
Requirements Gathering and Analysis
Architecture Design
Implementation
Testing
Deploy/Maintenance
Please find below the Software Development Life Cycle Table:
Download the attached file for further solution and table
A company had calculated net income to be $77,850 based on the unadjusted trial balance. The following adjusting entries were then made for: Salaries and wages owed but not yet paid of $820 Interest earned but not received from investments of $780 Prepaid insurance premiums amounting to $580 have expired Unearned revenue in the amount of $780 has now been earned.
Answer:
Adjusted net income will be $78,010
Explanation:
According to the Accrual concept all the accrued expenses should be recognized and deducted from the unadjusted net income and all the earned revenues should be recognized and added to unadjusted net Income.
Salaries and wages owed but not yet paid of $820 is an expense which is accrued but not been paid it should be recorded and deducted from the unadjusted net income as earlier expenses were understated.
Interest earned but not received from investments of $780 is the revenue recognized but not been received until now. Accrual Concept requires that when revenue is realized it should be recognized into the accounting records. So it should be added to the net income.
Prepaid insurance premiums amounting to $580 have expired is actually an accrued expense which previously recorded as prepaid expense. It should be deducted from the net income as it is a expense which need to be recognized.
Unearned revenue in the amount of $780 has now been earned. Now it should be added to the net income because it is a revenue item that should be recognized as it is recorded as unearned revenue earlier.
Net income to be $77,850 based on the unadjusted trial balance.
Adjusted Net Income = $77,850 - $820 + $780 - 580 + 780 = $78,010
Final answer:
Adjusted net income is calculated by considering the effects of adjusting entries for unpaid salaries and wages, interest earned, expired insurance premiums, and now-earned unearned revenue on the net income previously based on the unadjusted trial balance. The adjusted net income is $78,010 after accounting for these changes.
Explanation:
The question involves making adjusting entries to a company's financial records to reflect events that have occurred but are not yet recorded in the accounts. This process is a key part of the accounting cycle, ensuring that the financial statements reflect the true financial position of the company at the end of the accounting period. Adjusting entries for salaries and wages, interest, prepaid insurance, and unearned revenue will affect both the company's balance sheet and income statement.
To calculate the adjusted net income, we need to consider the effect of these adjustments on the originally calculated net income:
Interest earned (revenue increases, increasing net income): $780
Expired insurance premiums (expense increases, reducing net income): $580
$77,030 + $780 (increase in accounts receivable - interest)
$77,230 + $780 (decrease in deferred revenue)
Adjusted net income: $78,010
Synovec Co. is growing quickly. Dividends are expected to grow at a rate of 24 percent for the next three years, with the growth rate falling off to a constant 6 percent thereafter. If the required return is 14 percent, and the company just paid a dividend of $3.40, what is the current share price?
Answer;
$ 70.07
Explanation:
The price of the stock when the dividends level off at a constant growth rate, we then find the PV of the future stock price, including the PV of all dividends during the super normal growth period. The stock start it constant growth in Year 4, so that we can be able to find the price of the stock in Year 3, which is the year before the constant dividend growth begins as:
P3= D3(1 + g) / (R− g) = D0(1 + g1)3(1 + g2) / (R− g)
P3= $3.40(1.24)3(1.06) / (.14 − .06)
P3= $85.89
Therefore the price of the stock today is the PV of the first three dividends, we then add it with the PV of the Year 3 stock price.
Hence the price of the stock today will be:
P0= $3.40(1.24) / 1.14 + $3.40(1.24)2/ 1.142+ $3.40(1.24)3/ 1.143+ $85.89 / 1.143
P0= $70.07
The current shape price is $70.07
Boston Cycles started October with 12 bicycles that cost $42 each. On October 16, Boston bought 40 bicycles at $68 each. On October 31, when the average cost per unit was $62.00, Boston sold 34 bicycles for $100 each. Boston's cost of goods sold under the FIFO, LIFO and weighted-average methods is summarized as follows: FIFO LIFO Weighted-average bicy Cost of Goods Sold $2,000 $ 2,312 $ 2,108 Which inventory costing method produced the lowest cost of goods sold?
Answer:
FIFO method of inventory valuation produced the lowest of goods sold at $2000
Explanation:
The implication of FIFO producing the lowest costs of good sold is that profit under FIFO method will be much higher since a lower costs of good sold is deducted from sales revenue to arrive at gross profit for the period
In addition, higher gross profit is also a pointer to higher net income and higher tax expense overall.
In order to manage tax exposure effectively,the LIFO method of valuation would be the best option as it has the highest costs of good sold,hence lower profit figure and lower tax liability
Sunland Company had 1570000 shares of common stock issued and outstanding at December 31, 2020. On July 1, 2021 an additional 1259000 shares were issued for cash. Sunland also had stock options outstanding at the beginning and end of 2021 which allow the holders to purchase 373000 shares of common stock at $15 per share. The average market price of Sunland's common stock was $20 during 2021. What is the number of shares that should be used in computing diluted earnings per share for the year ended December 31, 2021?
Answer:
3,202,000 shares.
Explanation:
Diluted earning per share (EPS) is an EPS that is calculated using both the common stock and all convertible securities like convertible preferred stock, convertible debt, equity options, warrants, or convertible bonds which are converted into common stock or equity.
Diluted EPS is different from an EPS that is calculated using only the common stock.
From the common stock, the number of shares that should be used in computing diluted earnings per share for the year ended December 31, 2021 are the addition of all the shares obtained as follows:
Number of shares for diluted EPS = 1,570,000 + 1,259,000 + 373,000
= 3,202,000 shares.
Therefore, the number of shares that should be used in computing diluted earnings per share for the year ended December 31, 2021 is 3,202,000 shares.
While living in her home country of Tanzania, Sophia Kiwanuka signed an employment contract with Anne Margareth Bakilana, a Tanzanian living in Washington, D.C. Kiwanuka traveled to the United States to work as a babysitter and maid in Bakilana’s house. When Kiwanuka arrived, Bakilana confiscated her passport, held her in isolation, and forced her to work long hours under threat of having her deported. Kiwanuka worked seven days a week without breaks and was subjected to regular verbal and psychological abuse by Bakilana. Kiwanuka filed a complaint against Bakilana for intentional infliction of emotional distress, among other claims. Bakilana argued that Kiwanuka’s complaint should be dismissed because the allegations were insufficient to show outrageous intentional conduct that resulted in severe emotional distress. If you were the judge, in whose favor would you rule? Why? [Kiwanuka v. Bakilana, 844 F.Supp.2d 107 Miller, Roger LeRoy. Business Law: Text & Cases - The First Course - Summarized Case Edition (p. 123). Cengage Learning. Kindle Edition.
In this example, Kiwanuka is suing for intentional infliction of emotional distress. This can be defined as extreme and outrageous conduct which results in severe emotional distress to another person. This act must be severely extreme, to an extent that is not normally tolerated by society. In such cases, threatening conduct coupled with repeated annoyances can be enough to offer support to a claim of intentional infliction of emotional distress.
If I were the judge, I would rule in favor of Kiwanuka, as I the fact that Bakilana held Kiwanuka in isolation and confiscated her passport is evidence of extreme emotional distress.
For direct price discrimination to work a. The firm need not be able to identify the members of the low-value group b. The firm be able to charge the low-value customers a lower price than the higher-value customers c. The firm need not worry about any arbitrage since all its customers are charged the same price d. It needs to be too complicated for the customers to understand
Answer:
The correct answer is letter "B": The firm be able to charge the low-value customers a lower price than the higher-value customers.
Explanation:
Price discrimination is the practice by which producers charge different prices to different consumers based on factors such as age, income or location to mention a few. This differentiation in prices is always justified by producers with one of those factors otherwise the approach would be considered illegal.
Direct price discrimination is carried out when the firm charges lower prices to an unfavored sector of the market keeping the regular price in sectors where income is higher.
On July 1, 2016, Farm Fresh Industries purchased a specialized delivery truck for $126,000. At the time, Farm Fresh estimated the truck to have a useful life of eight years and a residual value of $30,000. On March 1, 2021, the truck was sold for $58,000. Farm Fresh uses the straight-line depreciation method for all of its plant and equipment. Partial-year depreciation is calculated based on the number of months the asset is in service. Required:1. Prepare the journal entry to update depreciation in 2021.2. Prepare the journal entry to record the sale of the truck.3. Assuming that the truck was instead sold for $80,000, prepare the journal entry to record the sale.
Answer:
Part 1. Prepare the journal entry to update depreciation in 2021.
Depreciation Expense $ 2,000 (debit)
Accumulated Depreciation $ 2,000 (credit)
Part 2. Prepare the journal entry to record the sale of the truck.
Cash $58,000 (debit)
Accumulated Depreciation $ 56,000 (debit)
Loss on Sale of Delivery Truck $12,000 (debit)
Delivery Truck $ 126,000 (credit)
Part 3. Assuming that the truck was instead sold for $80,000
Cash $80,000 (debit)
Accumulated Depreciation $ 56,000 (debit)
Profit on Sale of Delivery Truck $10,000 (credit)
Delivery Truck $ 126,000 (credit)
Explanation:
Part 1. Prepare the journal entry to update depreciation in 2021.
Depreciation Expense 2021 = ( 126000-30000)/8×2/12
= 2000
Part 2. Prepare the journal entry to record the sale of the truck.
Accumulated Depreciation
2016= (126000-30000)/8×1/2 =6000
2017 to 2020 = (126000-30000)/8×4=48000
2021= ( 126000-30000)/8×2/12 = 2000
Total Depreciation = 56000
Loss on Sale = Selling Price less Carrying Amount
= $58,000-($126,000-$56,000)
= - $12,000
Part 3. Assuming that the truck was instead sold for $80,000
Profit on Sale = Selling Price less Carrying Amount
= $80,000-($126,000-$56,000)
= $10,000
Note; Carrying Amount of an Asset = Cost less Accumulated Depreciation
The calculated annual depreciation of the truck is $12,000. The journal entries have been illustrated based on the scenarios of actual sale price being $58,000 and alternative price $80,000, resulting in a loss and a gain respectively.
Explanation:The first step is to determine the amount of annual depreciation using the straight-line method. The truck was purchased for $126,000 and estimated to have a residual value of $30,000 after 8 years. So, the total depreciation over the lifespan of the truck is $126,000 - $30,000 = $96,000. This depreciation is spread over 8 years, resulting in $12,000 annual depreciation.
To update the depreciation for 2021, since the truck was sold on March 1, two out of twelve months of depreciation need be recorded. Therefore, the journal entry would be: Debit Depreciation Expense $2,000 (=$12,000/12*2) and Credit Accumulated Depreciation $2,000.To record the sale of the truck, you need to account for the book value at the time of the sale. This would be the original cost minus the accumulated depreciation, which is $126,000 - ($12,000*4.17 [$12,000 is the annual depreciation and 4.17 is the number of years from July 1, 2016, to March 1, 2021]) = $76,040. Since the truck was sold for $58,000, this means Farm Fresh incurred a loss of $18,040 ($76,040 - $58,000). The journal entry would be: Debit Cash $58,000, Debit Accumulated Depreciation $50,040, Debit Loss on Sale of Plant Asset $18,040, and Credit Truck (asset) $126,000.Assuming that the truck was instead sold for $80,000, Farm Fresh would now have gained $3,960 ($76,040 - $80,000). The journal entry would be: Debit Cash $80,000, Debit Accumulated Depreciation $50,040, Credit Truck (asset) $126,000, and Credit Gain on Sale of Plant Asset $3,960.Learn more about Depreciation and Asset Sale here:https://brainly.com/question/32766641
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Ayayai Corporation engaged in the following cash transactions during 2020. Sale of land and building $194,800 Purchase of treasury stock 46,900 Purchase of land 44,700 Payment of cash dividend 91,800 Purchase of equipment 58,200 Issuance of common stock 157,000 Retirement of bonds 102,900
Compute the net cash provided (used) by investing activities
Answer:
$91,900 (provided)
Explanation:
The cashflow statement shows how much cash has been used up or generated by the company's activities which are classified into 3 groups;
Operating, investing and,Financing.The sale of land and building, purchase of land and equipment are investing activities. Others are financing activities as they relate to owner's equity and long term debts.
The net cash provided (used) by investing activities
= $194,800 - $44,700 - $58,200
= $91,900