Answer:
e) Credit to Revenue
Explanation:
The services provided to customers will be an increase of revenue and an increase in revenues is a credit transaction.
Since the question does not mention that the services were billed therefore the accounts receivable will not be increased till it is billed and thus option a) is not applicable.
The other options are not relevant since there is no cash collection involved, and no liabilities involved.
When Turkey Corp. provides services on account, it results in a debit to Accounts Receivable and a credit to Revenue reflecting the increase in assets and earnings.
Explanation:This situation involves tracking revenues and their effect on a company's account. When Turkey Corp. provides services on account for $3,000, this transaction would include a debit to Accounts Receivable and a credit to Revenue. A debit to Accounts Receivable indicates an increase in the assets of the company because it represents future cash inflows. Credit to Revenue means the company has earned, even though cash hasn't been received. Hence, options 'a' and 'e' are correct.
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Fill in the missing numbers for the following income statement. (Input all amounts as positive values. Do not round intermediate calculations.)
Sales $ 687,900
Costs 442,800
Depreciation 115,400
EBIT $
Taxes (30%)
Net income $
Calculate the OCF.
What is the depreciation tax shield?
Answer:
OCF = $206,190
Depreciation tax shield = $34,620
Explanation:
The computation of the depreciation tax shield is shown below:
= Depreciation × tax rate
= $115,400 × 30%
= $34,620
And the operating cash flow is
= EBIT + Depreciation - Income tax expense
where,
EBIT = Sales - cost of good sold - depreciation expense
= $687,900 - $442,800 - $115,400
= $129,700
And, the income tax expense is
= (Sales - cost of good sold - depreciation expense) × tax rate
= ($687,900 - $442,800 - $115,400) × 30%
= $129,700 × 30%
= $38,910
So, the OCF is
= $129,700 + $115,400 - $38,910
= $206,190
Consider two countries' situations: Country A can produce either six automobile ror twelve movies with the same amount of resources. Country B, using the same resources, can produce either five automobiles or eight movies. Using Ricardo' Theory of Comparative Advantage, determine which country would produce automobiles, which would produce movies, and the range of relative prices within which these product would trade?
Answer:
The theory of comparative advantage says that nations should yield and trade only those merchandises in which they have a reasonable advantage i.e. which they are specialize in.
To compute the comparative advantage of two nations A and B, let us first compute the opportunity cost of making movies and vehicles in each.
Country A:
Opportunity cost of making 1 automobile = 2 movies
Opportunity cost of making 1 movie = 1/2 automobile
Country B:
Opportunity cost of making 1 automobile = 8/5 movies
Opportunity cost of making 1 movie= 5/8 automobile
Since the prospect cost of making an automobile is lesser in Country B and the prospect cost of making movies is lesser in country A, thus Country A would make movies and country B would make automobiles.
Your brother has offered to give you either $10,000 today or $20,000 in 9 years. If the interest rate is 7% per year which option is preferable?
Answer:
receive $20000 in 9 years is preferable because its present value is greater than $10000 i.e $10878.67
Explanation:
given data
offered = $10,000 or $20,000
time = 9 year
interest rate = 7%
solution
here when you receive = $20000 received in 9 years
so present value = [tex]\frac{receive\ amount}{(1+rate)^{time}}[/tex] .................1
present value = [tex]\frac{20000}{(1+0.07)^9}[/tex]
present value = $10878.67
so here receive $20000 in 9 years is preferable because its present value is greater than $10000
Final answer:
To determine if $10,000 now is better than $20,000 in 9 years at a 7% interest rate, calculate the present value of $20,000 using the formula PV = FV / (1 + r)^n. If the present value is more than $10,000, choose the future payment; if less, take the money now.
Explanation:
The question involves comparing two financial options by calculating the present value of future money using the concept of interest rates. To determine whether the option of receiving $10,000 today is preferable to receiving $20,000 in 9 years at an interest rate of 7%, one would compute the present value of $20,000 discounted back 9 years. Using the formula PV = FV / (1 + r)^n, where PV is the present value, FV is the future value, r is the interest rate, and n is the number of years, one can find the present value of the $20,000.
To solve this problem, we take:
FV = $20,000r = 7% or 0.07n = 9 yearsThus, the present value (PV) = $20,000 / (1 + 0.07)^9.
After calculating the PV, if it is more than $10,000, then receiving $20,000 in 9 years is the better option considering the 7% interest rate. If it is less, then taking $10,000 today is better.
Allison's wants to raise $12.4 million to expand its business. To accomplish this, it plans to sell 25-year, $1,000 face value, zero-coupon bonds. The bonds will be priced to yield 6.5 percent, with semiannual compounding. What is the minimum number of bonds Allison's must sell to raise the $12.4 million it needs?
Answer:
= 55,780.5 units
Explanation:
A bond is a financial instrument used by a company or government to borrow money.
Zero-coupon bond: Most bonds pay a fixed percentage of their face value - coupon- as interest payment at requalr intervals.
A zero- coupon bond pays no coupon. However, the return on it is the difference between its face value and price.
The Price of a bond is determined using the discounted flow method. Here the present value is calculated using its the face value and the yield. The face value is the amount promised by borrower to pay back. And the yield is the return on the bond expressed in %.
This can be captioned as follows:
P × (1+r)^n = FV,
P- price, FV- Face value, r = yield
P-?, FV- 1000, r = 6.5%/2 = 3.25% (semi-annual interest rate)
P × (1.0325)^(25× 2) = 1000
P × 4.9488 = 1000
P= 1000/4.4988
P= $222.28
P= $222.3
If the bond sells for $222.3, then to raise $12.4 million, Allison will have to sell:
= 12,400,000/222.3
= 55,780.5 units
Storm, Inc. purchased the following available-for-sale securities during 2016, its first year of operations:
Name Number of Shares Cost
Dust Devil, Inc. 1,900 $81,700
Gale Co. 850 68,000
Whirlwind Co. 2,850 114,000
Total $263,700
The market price per share for the available-for-sale security portfolio on December 31, 2016, was as follows:
Market Price per Share,
Dec. 31, 2016
Dust Devil, Inc. $40
Gale Co. 75
Whirlwind Co. 42
Required:
a. Provide the journal entry to adjust the available-for-sale security portfolio to fair value on December 31, 2016
b. Is there any impact of December 31, 2016 journal entry on the income statement?.
Answer:
As per accounting standards available-for-sale securities are recorded at fair value through profit and loss account or other comprehensive income. We assume that company choose to record it at fair value through profit and loss account.
The answer of each requirement is given below.
a. Provide the journal entry to adjust the available-for-sale security portfolio to fair value on December 31, 2016
Loss on valuation $ 4,250
Investment Cost $ 4,250
Working
Dust Devil, Inc. = 40 * 1900 = 76,000 - 81,700 = -5,700
Gale Co. = 75 * 850 = 63,750 - 68,000 = -4,250
Whirlwind Co. = 42 * 2850 = 119,700 - 114,000 = 5,700
Profit/ (Loss) = (4,250)
b. Is there any impact of December 31, 2016 journal entry on the income statement
The company income for the year will be reduced by ($ 4,250).
Given the following information, determine the cost of goods manufactured and the cost of goods sold for the year ended December 31, 20X9.
Direct labor incurred $126,000
Manufacturing overhead incurred 359,000
Direct materials used 271,000
Finished goods inventory, 1/1/20X9 395,000
Finished goods inventory, 12/31/20X9 442,000
Work in process inventory, 1/1/20X9 193,000
Work in process inventory, 12/31/20X9 218,000
Answer:
$731,000 and $684,000
Explanation:
The computations are shown below:
For cost of goods manufactured
= Direct materials used + Direct labor cost + Manufacturing overhead incurred + opening work-in-process inventory - closing work-in-process inventory
= $271,000 + $126,000 + $359,000 + $193,000 - $218,000
= $731,000
For cost of goods sold
= Opening finished goods Inventory + Cost of goods manufactured - Ending finished goods Inventory
= $395,000 + $731,000 - $442,000
= $684,000
Imaging Services was organized on March 1, 2018. A summary of the revenue and expense transactions for March follows:Fees earned $1,100,000Wages expense 715,000Rent expense 80,000Supplies expense 9,000Miscellaneous expense 12,000Prepare an income statement for the month ended March 31.
Answer:
Income statement of Imaging services for the month ended March 31, 2018.
Amount in $'000 Amount in $'000 Revenue 1,100
Cost of sales (Supplies expense) (9)
Gross income 1,091
Operating expenses
Wages expense 715
Rent expense 80
Miscellaneous expense 12
(807)
Net operating income 284
Explanation:
The income statement is one that that shows the revenue and expenses of an organization accumulating to the net income of the organization.
It considers all elements of cost from the cost of sales to all operating expenses and is given over a period.
The publisher from needs to change his calculations. Before the book is actually produced, rising paper costs increase variable costs to $2.10 per book. If the company wants to start making a profit at the same production level as before the paper cost increase,
for how much should they sell the book now?
The publisher should increase the selling price of the book by the amount the variable costs have increased due to the rise in paper costs, in order to maintain the same profit levels. In this case, the selling price should be increased by $0.10.
Explanation:Given that the variable cost per book has increased from $2.00 to $2.10 due to rising paper costs, the publisher must adjust the selling price to maintain the same profit level. If the publisher was previously selling the book at a price 'P,' then the profit per book was (P - $2.00). Now, considering the increased variable cost to maintain the previous profit, the book's selling price should be (P + $0.10), an addition representing the rise in the cost of paper.
So if, for example, the original selling price of the book was $5.00, to start making a profit at the same production level as before the paper cost increase, the publisher should now sell the book for $5.10.
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Early in 2020, Concord Equipment Company sold 500 Rollomatics at $6,500 each. During 2020, Concord spent $20,000 servicing the 2-year assurance warranties that accompany the Rollomatic. All applicable transactions are on a cash basis.
A) Prepare 2020 entries for Concord.
Assume that Concord estimates the total cost of servicing the warranties in the second year will be $40,000
B) Prepare 2020 entries for Concord assuming that the warranties are not an integral part of the sale (a service-type warranty).
Assume that of the sales total, $61,000 relates to sales of warranty contracts. Warranty costs incurred in 2020 were $20,000. Estimate revenues to be recognized on a straight-line basis.
Answer:
Explanation:
A)
Dr Cash 3250000
Cr Revenue 325000 [500*6500]
Dr Warranty expense 20000
Cr Liabilities on warranties 20000
B)
Dr Cash 3250000
Cr Revenue 3189000
Cr Unearned warranty revenue 61000
Dr Warranty expense 20000
Cr Cash 20000
Dr Unearned warranty revenue 30500
Cr Warranty revenue 30500[20000/40000*61000]
Generally, when business startup costs exceed the maximum amount allowed, the remaining costs may be amortized over_____ months.(A) 240(B) 180(C) 120(D) 60
Answer:
The correct answer is letter "B": 180.
Explanation:
During the first year a business operates, companies can elect to deduct up to $5,000 from their costs. If the costs are higher than $50,000, the deduction of $5,000 will be reduced by the exceeding amount. However, that exceeding amount can be amortized for up to 15 years (180 months).
Hedge funds are low risk because they are market-neutral. low risk if they buy Treasury bonds. low risk because they hedge their investments. high risk because they are market-neutral. high risk, even though they may be market-neutral.
Answer:
Hedge funds are: high risk, even though they may be market-neutral.
There are many potential goals of a corporation, such as: minimize costs, maximize sales, maximize employment, maximize earnings, maximize shareholder wealth, maximize dividend payments, etc. Which one is the best for the long-term health of the company and society?
Answer:
The best for long-term health of the company and society is maximize the shareholder wealth.
Explanation:
'Shareholder wealth' means the market price of common stock of a firm. The goal to maximize the shareholder wealth means that management should try to make the current value of the returns as maximum that are expected in future, for the shareholders of the firm.
'Market value' means the value at which the stock trades in the market, like what is its price in 'New York Stock Exchange' is its market value. So, out of the given goals, to maintain a good health of company for a long time, it should maximize the shareholder wealth.
A particular stock has a dividend yield of 1.3 percent. Last year, the stock price fell from $64 to $59. What was the total percentage rate of return for the year?
Answer:
The total percentage rate of return for the year is -6.51%
Explanation:
Capital Gain Yield = ($59 – $64 )/ $64
= - $5 / $64
= -7.81%
Since the dividend yield is 1.3%:
Total return = -7.81% + 1.3%
= -6.51%
Therefore, The total percentage rate of return for the year is -6.51%
Benson Co. purchased land and paid the full purchase price in cash. The journal entry necessary to record this event includes a: A. debit to Land and a debit to Cash. B. debit to Cash and a credit to Land. C. credit to Land and a credit to Cash. D. debit to Land and a credit to Cash.
Answer:
A. debit to Land and a debit to Cash.
Explanation:
Land, an asset, is increased with a debit, and cash, another asset is decreased with a credit.
The purchase of land by Benson corporation has been recorded as debit to Land and credit to cash. Thus, option D is correct.
Journal entry has been the financial record of the gain and reduction in the assets with the normal usage.
The assets have been given as valuable item or object owned by the company. It has been able to provide the economic benefit to the company and the individual.
Journal entryThe land has been given as the fixed assets for the organization. The cash has been the current assets in the organization.
The purchase of land by Benson corporation has been dealt with the cash. It has been marked with the decrease in the cash of the organization. Thus, the cash has been debited in the Journal entry.
The debit of current assets has been resulted in the addition of fixed assets in the form of land to the corporation. The addition has been given as the credit in the Journal entry.
Thus, the purchase of land by Benson corporation has been recorded as debit to Land and credit to cash. Thus, option D is correct.
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A customer buys 100 shares of XYZ at $60 in a margin account regular way settlement. Two days after the trade, XYZ has dropped to $55. The customer will receive a margin call for:
Answer:
50% of Original Purchase price = 0.50 x $6000= $3000
Explanation:
The customer buys 100 shares at $60 = $60 x 100 = $6000
Since, it a margin account, the margin requirement for the call for this initial purchase will be 50% of the original purchase price
= 50% of $6000 = $3000
Although XYZ shares dropped two days later from $60 to $55 dollars. The initial margin requirement will not be affected by the drop or reduction in share price and hence, it will not affect the value of the margin call.
However, if the drop continues, then the alternative is to generate a call for "maintenance margin'' not the initial margin.
Final answer:
A margin call occurs when the equity in a margin account falls below the brokerage's required maintenance margin due to a decline in the value of the securities held. The exact margin call amount cannot be determined without knowing the specific margin requirements of the brokerage firm.
Explanation:
The question deals with a scenario involving a margin account and a regular way settlement in the context of stock trading. In this case, a customer bought 100 shares of XYZ company at $60 per share. However, two days after the trade, the value of XYZ stock dropped to $55 per share. In a margin account, the investor is borrowing money to buy securities and is required to maintain a minimum amount of equity (the investor's own money) in the margin account, known as the maintenance margin.
If the value of the securities drops significantly, the equity may fall below the maintenance margin, and the investor would receive a margin call requiring them to deposit additional funds to bring the account back to the required level. Unfortunately, without the specific margin requirements given by the brokerage, we cannot calculate the exact margin call amount. Different brokerages have different maintenance margin requirements, typically between 25% and 40% of the total value of the securities.
1. Wholesale Banners pays $ 240 comma 000 cash for a group purchase of land, building, and equipment. At the time of acquisition, the land has a market value of $ 25 comma 000, the building $ 150 comma 000, and the equipment $ 75 comma 000. Journalize the lump-sum purchase.
Answer:
To journalize the lump-sum purchase;
Item Value
Land $24,000
Building value $144,000
Equipment value $72,000
Lump-sum value $240,000
Explanation:
Step 1: Determine the total market value of the acquisition
Total market value=land+building+equipment market value
where;
land market value=$25,000
building market value=$150,000
equipment market value=$75,000
replacing;
Total market value=25,000+150,000+75,000=$250,000
Step 2: Determine the proportion of market value that contributes to the lump-sum
Land value=(land market value/total market value)×lump-sum
Land value=(25,000/250,000)×240,000=$24,000
Building value=(Building market value/total market value)×lump-sum
Building value=(150,000/250,000)×240,000=$144,000
Equipment value=(Equipment value/total market value)×lump-sum
Equipment value=(75,000/250,000)×240,000=$72,000
Step 3: Journalize the lump-sum purchase
To journalize the lump-sum purchase;
Item Value
Land $24,000
Building value $144,000
Equipment value $72,000
Lump-sum value $240,000
Which of the following is not a reason why managers use financial statement analysis? Enables managers to understand how stockholders and creditors will interpret their financial results. Estimates stock price appreciation. Provides valuable feedback on company's performance
Answer:
The correct answer is letter "B": Estimates stock price appreciation.
Explanation:
Financial Statement Analysis is the process of reviewing a company's statements to gain an understanding of its financial health. The goal of financial statement analysis is to equip business with the knowledge it needs to make effective decisions. It evaluates the past and projects a company's future performance.
Several forces influence a company's stock price but financial statement analysis is not a source that accomplishes that purpose.
Financial statement analysis enables managers to understand how stockholders and creditors interpret their financial results and provides valuable feedback on the company's performance. However, it does not estimate stock price appreciation.
Explanation:Managers use financial statement analysis for various reasons, including understanding how stockholders and creditors will interpret their financial results, estimating stock price appreciation, and providing valuable feedback on the company's performance.
However, the question asks for a reason that is not applicable, and in this case, it would be 'Estimates stock price appreciation' because financial statement analysis primarily focuses on understanding financial results and evaluating the company's performance.
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Famaâs Llamas has a weighted average cost of capital of 7.9 percent. The companyâs cost of equity is 11 percent, and its pretax cost of debt is 5.8 percent. The tax rate is 25 percent. What is the companyâs target debt-equity ratio? (Do not round intermediate calculations and round your answer to 4 decimal places, e.g., 32.1616.)
Answer:
companyâs target debt-equity ratio = 0.87323
Explanation:
Given data:
Weighted Average Cost of Capital = 7.90%
cost of equity is 11 percent
pretax cost of debt is 5.8 percent
tax rate is 25 percent.
After-tax cost of debt = 5.8% (1 - 25%) = 4.35%
Weighted Average Cost of Capital = Debt weight * After tax cost of debt + equity weight * cost of equity
let debt weight is x
equity weight = 1-x
plugging all value
7.9 = 4.35*x*+11(1-x)
solving for x
x = 0.46616
so, equity weight = 1- 0.46616 = 0.533835 {equity weight = 1-x}
debt to equity ratio = [tex]\frac{0.466165}{0.533835} = 0.87323[/tex]
Maas, Inc., sells washers and dryers that include a maximum one-year warranty covering parts. Past experience shows that warranty expense averages about 2 percent of the selling price of each washer and dryer. Net sales totaled $400,000 during the year ending December 31. Prepare the December 31 adjusting entry for Maas by selecting the account names from the drop-down menus and entering the dollar amounts in the debit or credit columns.
Answer:
See explanation section
Explanation:
Journal entry to be recorded -
Debit Warranty expense $8,000
Credit Estimated warranty liability $8,000
Calculation:
Net sales = $400,000
warranty expenses = 2% of the net selling price.
Therefore, estimated warranty expense = $400,000 × 2% = $8,000
Since, the company does not pay the expenses, a liability arises. Since we are estimating the value from past experience, the liability will be estimated.
Adjusting entry: Debit Warranty Expense $8,000, Credit Accrued Warranty Liability $8,000 for Maas, Inc.'s December 31 financials.
Here's the adjusting entry for Maas, Inc. on December 31:
| Account | Debit | Credit |
| Warranty Expense | $8,000 | |
| | | |
| Accrued Warranty Liability| | $8,000 |
Explanation:
- Warranty Expense is debited to recognize the expense for the warranties issued during the year, calculated as 2% of net sales ($400,000 * 0.02 = $8,000).
- Accrued Warranty Liability is credited to recognize the obligation Maas, Inc. has to fulfill warranty claims in the future.
Which of the following internal control activities is not usually performed in the vouchers payable department? a. Approving vouchers for payment by having an authorized employee sign the vouchers. b. Matching the vendor’s invoice with the related receiving report. c. Indicating the asset and expense accounts to be debited. d. Accounting for unused prenumbered purchase orders and receiving reports.
Answer:
d. Accounting for unused pre-numbered purchase orders and receiving reports.
Explanation:
accounts payable department verifies whether all vendor invoices, cash disbursement and adjustments are recorded in the accounts payable records.
Ace Industries has a current assets equal to $3 illion . the company's current ratio is 1.5. and its quick ratio is 1.0.
What is the firm's level of current liabilities?
What is the firm's level of inventories?
Answer:
$2,000,000
$1,000,000
Explanation:
We know that
Current ratio = Total Current assets ÷ total current liabilities
1.5 = $3,000,000 ÷ total current liabilities
So, the total current liabilities would be
= $2,000,000
And
Quick ratio = Quick assets ÷ total current liabilities
1.0 = Quick assets ÷ $2,000,000
Quick assets = $2,000,000
So, the inventory would be
= Total current assets - quick assets
= $3,000,000 - $2,000,000
= $1,000,0000
Explain why taking a monotonic transformation of a utility function does not change the marginal rate of substitution (MRS).
The Marginal Rate of Substitution (MRS) is not affected by monotonic transformations of the utility function as MRS is determined by relative preferences, not absolute utility levels. Monotonic transformations preserve this preference order, leaving MRS unchanged. This preference-based nature of MRS is evident in consumer's utility-maximizing choices and the impact of price changes.
Explanation:In your question, you're asking why taking a monotonic transformation of a utility function does not change the marginal rate of substitution (MRS). The MRS is a concept in microeconomics that represents the rate at which a consumer can give up one good in exchange for another good while maintaining the same level of utility. MRS depends only on the relative preferences between two goods, not the actual level of utility. Hence, a monotonic transformation, which preserves the preference order, does not change the MRS.
For example, consider a budget constraint where the total price of the two goods remains the same. Let's say at an optimal choice, the ratio of marginal utility to price for two goods matches. If we apply a monotonic transformation to the utility function, the new utility levels will preserve the original preference order. Meaning, our optimal choice won't change since it's determined by where the MRS equals to the price ratio, not the absolute utility levels.
The utility-maximizing choice along a budget constraint will be the point of tangency where the budget constraint touches an indifference curve at a single point.
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In the 19th century, when crop failures often led to bank runs, banks would make relatively fewer loans and hold relatively more excess reserves. By itself, these actions by the banks should have a. increased the money multiplier and the money supply b. decreased the money multiplier and increased the money supply. c. increased the money multiplier and decreased the money supply. d. decreased both the money multiplier and the money supply.
Answer:
Correct answer is (d). decreased both the money multiplier and the money supply.
Explanation:
In banking business, money multiplier represent how the money that was deposited can influence the money supply. By giving fewer loans and keeping more excess reserves, the money is not really working as it not in circulation, the consequence of this action is that it will decreased both the money multiplier and the money supply.
The West European buyers who purchase and resell Entrée Specialités’ food products in their home countries are in the _____ business.
a. importing
b. exporting
c. licensing
d. domestic investment
Answer:
The correct answer is letter "A": importing.
Explanation:
Importing activities involve businesses or individuals purchasing goods from manufacturers abroad with the purpose of reselling those goods or for personal use. Importing goods imply paying tariffs on those products as a way to protect national businesses.
The West European buyers who purchase and resell Entrée Specialités’ food products in their home countries are in the importing business. An import business involves buying goods from another country and bringing them into your own country for resale or distribution.
Explanation:The West European buyers who purchase and resell Entrée Specialités’ food products in their home countries are in the importing business.
An import business involves buying goods from another country and bringing them into your own country for resale or distribution. In this case, the West European buyers are importing Entrée Specialités’ food products from another country (presumably the United States) and reselling them in their home countries.
Examples of import businesses include retailers who import clothing or electronics from overseas manufacturers and sell them to customers in their home countries.
Auditors realize that at times corrective action is not taken even when agreed to by the appropriate parties. This should lead an internal auditor to :A: Decide the extent of necessary followup work.B: Allow management to decide when to follow-up, since it is management's ultimate responsibility.C: Decide to conduct follow-up work only if management requests the auditor's assistance.D: Write a follow-up audit report with all findings and their significance to the operations.
Answer: The correct answer is
A: Decide the extent of necessary followup work.
Explanation: It is the responsibility of the Chief Audit Executive to decide the follow up process to be done.
The nature, timing and extent of follow up is communicated by the Chief Audit Executive and he also has the responsibility to find out from management why actions have not been taken.
When internal auditors notice corrective actions are not being taken despite agreements, they should actively determine the scale of necessary follow-up work. This ensures that operations adhere to required standards and fosters accountability within the organization.
Explanation:When internal auditors realize that at times, corrective action is not taken despite being agreed upon by the relevant stakeholders, the appropriate course of action is to determine the extent of the necessary follow-up work. This is because internal auditors are responsible for ensuring that the organization's operations adhere to the set standards and procedures. The objective of follow-up work is to verify that management has carried out the agreed-upon change. If internal auditors permit management to decide when to follow up, there is a risk that the necessary rectifications will be delayed or ignored. Furthermore, waiting for management's request to conduct follow-up work can also lead to similar issues. Therefore, internal auditors should proactively decide the extent of follow-up work required to confirm that corrective action is taken. This helps maintain checks and balances to assure integrity and accountability in the organization.
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There are 39 employees in a particular division of a company. Their salaries have a mean of $70,000, a median of $55,000, and a standard deviation of $20,000. The largest number on the list is $100,000. By accident, this number is changed to $1,000,000. What is the value of the mean after the change
Answer:
The new mean is 93,076
Explanation:
To solve this question we first need to find the total salary of all the employees combined. For that we will multiply the mean by the number of employees. The mean is 70,000 and number of employees are 39 so the total salary is
(70,000*39)=2,730,000. Now in order to find the new mean we first have to deduct 100,000 from this number and add 1,000,000 to it. (2,730,000-100,000+1,000,000)=3,630,000
In order to find the new mean we will divide 3,630,000 by 39
3,630,000/39= 93,076
Answer:
The value of the mean after the change is $93,076.92
Explanation:
given:
- 39 employees
- mean of $70,000
- median of $55,000
- standard deviation of $20,000
- largest number is $100,000 changed to $1,000,000
want: the value of the mean after the change
39 employees ($70,000) - $100,000 + $1,000,000
------------------------------------------------------------------------- = 93076.9231
39
The Phoenix Corporation's fiscal year ends on December 31. Phoenix determines inventory quantity by a physical count of inventory on hand at the close of business on December 31. The company's controller has asked for your help in deciding if the following items should be included in the year-end inventory count. Required: Determine if each of the items below should be included or excluded from the company's year-end inventory.
1. Merchandise held on consignment for Trout Creek Clothing
2· 3 Goods purchased from a vendor shipped f.o.b. shipping point on December Goods shipped f.o.b. destination on December 28 that arrived at the customer's location on January 4 26 that arrived on January
3. Goods shipped f.o.b. shipping point on December 28 that arrived at the customer's location on January 5.
4. 5.Phoenix had merchandise on consignment at Lisa's Markets, Inc. 6.
7. Freight charges on goods purchased in 3.
Goods purchased from a vendor shipped f.o.b. destination on December 27 that arrived on January 3
Answer:
1. Yes
2. No
3. No
4. Yes
7. No
Explanation:
Phoenix Corporation is having its physical inventory count of December 31st so only that merchandise will be included in count which is present at the stockroom physically. The merchandise which is in transit or is not yet received at the stockroom will not be included. In point 1, merchandise is held on consignment for Trout Creek Clothing which means there is physical existence of the merchandise at the stockroom. In point 2, goods purchased shipped destination on December 28 but arrived at the customer's location on January 4, this will not be included in the count. In point 3, goods shipped on December 28, arrived at the customer's location on January 5, this will also not be included. In point 4, phoenix had merchandise on consignment; this will be included as inventory will be physically present at the stockroom. In point 7, goods purchased on December 27 that arrived on January 3, this is not included as physically goods arrived after December
31st.
To accurately include items in Phoenix Corporation's year-end inventory, it is crucial to understand principles such as consignment and shipping terms. Goods on consignment at other businesses and goods shipped FOB destination arriving after year-end are excluded, while goods on consignment at Phoenix and those purchased FOB shipping point by year-end are included.
Deciding whether specific items should be included in Phoenix Corporation's year-end inventory requires understanding of inventory accounting principles, particularly consignment and shipping terms such as FOB (Free On Board) shipping point and FOB destination.
Merchandise on consignment at Trout Creek Clothing should be excluded from Phoenix's inventory since these goods are not owned by Phoenix.
Goods purchased FOB shipping point on December 26 that arrived on January 3 should be included in the inventory count as ownership transfers to Phoenix at the shipping point.
Goods shipped FOB destination on December 27 that arrived on January 3 should be excluded as ownership transfers upon delivery, which is after the year-end.
Merchandise on consignment at Lisa's Markets, Inc. should be included in Phoenix's inventory, since they still own these goods.
Freight charges on goods purchased that are included in the year-end inventory should also be considered as part of inventory cost, enhancing the accuracy of inventory valuation.
It is essential for companies like Phoenix Corporation to accurately determine what items are included in their year-end inventory for proper financial reporting and compliance with accounting standards.
Just before Johnson Laboratories opened for business, Howard Johnson, the owner, had the following assets and liabilities. Cash $ 39,600 Laboratory Equipment 74,700 Laboratory Supplies 5,900 Loan Payable 14,200 Accounts Payable 9,650 Determine the totals that would appear in the firm’s fundamental accounting equation.
Answer:
Assets $ 120,200
Liabilities $ 23,850
Owners Equity $ 96,350
Explanation:
Assets comprise of the following components:
Cash $ 39,600
Laboratory Supplies $ 5,900
Laboratory Equipment $ 74,700
Total Assets $ 120,200
Liabilities comprise the following components:
Accounts Payable $ 9,650
Loan Payable $ 14,200
Total Liabilities $ 23,850
Since Johnson Laboratories is just starting its business, there would be no income statement items. It is safe to assume that the balance of assets and liabilities is the Owners' Equity.
The project manager’s role with regard to interface management does not include interfacing:
Answer:
The correct answer to the following question will be "Between senior management and various external stakeholders"
Explanation:
The project manager is the person responsible for initiating, preparing, constructing, implementing, overseeing, ending and managing the project with success, ensuring that the threat is handled and that uncertainty is reduced.The project manager is accountable for the development project's progress. They supervise all aspects, including planning, execution, monitoring, monitoring, and closure. It guarantees that goals and objectives are achieved within the timeline.Therefore, it would be the right answer.
For each transaction, indicate the transaction's effect on the company's accounting equation by selecting either increase, decrease, or no effect for each area of the accounting equation. Do not leave any of the fields below blank. (If the transaction were to cause an increase and decrease to the same area of the accounting equation, """"no effect"""" should be chosen as the overall effect to that area) On May 1, issued 20,000 shares of $10 par common stock for $20 per share. On June 1, purchased 4,000 shares of treasury stock for $25 per share. On Sept 1, declared a 4-for-1 stock split. On Oct 1, declared a dividend of $10,000 to be paid on Nov 15. On Nov 15, paid the dividend previously declared on Oct 1.
Answer:
Accounting equation and the effects of transactions are given below:
[tex]Assets = Liabilities + Stockholders' Equity[/tex]
May-01 : Assets⇒ Increase , Stockholders' Equity⇒ Increase
Jun-01 : Assets⇒ No Effect
Sep-01 : Stockholders' Equity⇒ No Effect
Oct-01 : Liabilities⇒ Increase, Stockholders' Equity⇒ Decrease
Nov-15 : Assets⇒ Decrease, Liabilities⇒ Decrease
Explanation:
May-01: Issuing common stocks increases Asset(cash) and Equity(common stock) by $400,000(20,000×20).
Jun-01: Purchasing shares of treasury stock decreases Asset(cash) and at the same time increases Asset(investments) by $100,000. Thus net effect is zero.
Sep-01: Stock split is corporate action in which total outstanding shares are increased and the price of those shares is proportionally decreased to increase the liquidity of shares in the market. The outstanding no. of shares increases and the par value of shares decreases. Hence, there's no effect of these actions on the accounting equation. A memorandum entry, a short message, is entered in the general journal which does not contain any balance.
A 4-for-1 split means that every outstanding share will be increased by four times and the par value will be reduced by the same amount.
Oct-01: Declaring dividend creates liability for the company. So, when company declare dividend, its Liability( Dividend Payable) increases and Equity(Dividend) decreases.
Nov-15: Paying dividend already declared decreases Liability( Dividend Payable) and decreases Asset(Cash)
A stock split changes the number of shares outstanding, treasury stock is a contra-equity account, and paying a dividend reduces cash.
Explanation:On May 1, issuing 20,000 shares of $10 par common stock for $20 per share would increase the common stock (stockholders' equity) by $200,000 (20,000 shares * $10 per share) and increase the cash (assets) by $400,000 (20,000 shares * $20 per share).
On June 1, purchasing 4,000 shares of treasury stock for $25 per share would decrease the cash (assets) by $100,000 (4,000 shares * $25 per share) and decrease the treasury stock (stockholders' equity) by $100,000.
On September 1, declaring a 4-for-1 stock split would have no effect on the accounting equation since it only changes the number of shares outstanding but doesn't affect the total equity or assets.
On October 1, declaring a dividend of $10,000 decreases retained earnings (stockholders' equity) by $10,000.
On November 15, paying the previously declared dividend decreases cash (assets) by $10,000.
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