Answer:
Let's assume 100 units per year is the break even point (in units).
Break even point is that level of sales revenue which covers all of the costs involved i.e. fixed and variable costs both.
Hence, contribution = Fixed costs at Break Even Point
Contribution = Sales - Variable (Marginal) Costs - ( Part A )
Hence, Contribution = $ 200 i.e. fixed costs
Now,
$ 200 = Sales - $ 10 ( From Part A)
Sales = $ 210
Now, Shut down point is that that where the firm is just capable of meeting its variable costs from the sales it has earned (price earned).
Hence, the price can go till $ 10 from $ 210 i.e. $ 200 ( $ 210 - $ 10 ) below from the current level.
Hence, the price can go $ 200 down before it is preferred to shut down by the firm.
For 1st part answer refer to the Explanation.
Explanation:
(1) Fixed Costs
Fixed costs refer to the expenses which are always have to be incurred by the business irrespective of the level of output produced. For example, a firm has to pay rent on land on which it is operating , pay CEO's compensation for managing role in the organization (constant part), charge depreciation on production tools and equipments and pay cleaning staff fixed salaries , irrespective of the level of output produced.
(2) Variable ( Marginal costs)
Variable costs are the costs which have a direct relation with the level of output produced by the firm. For example, the more the no. of units produced the more the labour charges paid, more the raw material payments made and the more the manufacturing related expenses etc and vice-versa.
(3) Avoidable costs
Avoidable costs are the costs which can be controllable i.e. the costs incurring can be avoided by the management. For example, when there is slowdown in the economy, growth and expansion costs can be avoided and production related costs can be cut (variable costs) etc.
For Part 2 answer refer to the "Answer" at the top of the entire solution.
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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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.
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]
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.
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.
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.
A manager that manages ""by the book"" exhibits which form of leadership style? Democratic. Autocratic. Bureaucratic. Free-rein.
Answer:
(c). Bureaucratic
Explanation:
Bureaucracy refers to following and abiding by rules and procedures strictly.
In such a form, the approach is highly resolute and lacks flexibility.
"By the book" conveys stringent rules and procedures, which means operations must be carried without deviating from the prescribed rules and norms.
Such form of leadership style is not flexible and often sticks to conventional methods without appreciating creative or handy suggestions.
Employees are expected only to perform what is asked of them, nothing less nothing more.
Usually such style of leadership is witnessed in those departments and areas wherein employees or workers handle those equipment, the negligent handling of which could result into fatal injuries or accidents.
Consider the production department of a manufacturer of laptop computers. Classify the cost of the processor chips.
-Direct
-Variable
-Product
Answer:
All the answers are correct.
Explanation:
The cost of the processor chips is a direct cost because it is the vital thing of any laptops. Without a processor, the laptop is nothing but a heartless product.
The cost is variable because the price of a processor varies as there are various processors in the computer market.
The cost is a product cost because it is directly related to manufacturing a laptop.
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
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.
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
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%
are unsecured obligations that are not tied to specific assets for collateral. a. Bearer bonds b. No-load stocks c. Penny stocks d. Junk bonds
Answer:
The correct answer is letter "D": Junk bonds.
Explanation:
A junk bond is a debt security that is poorly rated because it has a high default risk. Junk bonds are also called high-yield or speculative bonds. These are considered riskier investments than higher-rated bonds and thus offer a higher interest rate per year.
Junk bonds can be issued by corporations or governments and have a principal amount, maturity date, and coupon but they are not linked to specific assets as collateral.
Suppose trade between the United States and Canada results in a $100 billion increase in production of agricultural goods. This gain from trade will:
a. go to the U.S. because it is the larger country.
b. go to Canada because it is the smaller country.
c. be split equally between the U.S. and Canada.
d. be split between the two countries, but the division may not be equal.
Answer:
D
Explanation:
The gain from the trade will be split between the two countries but the division may not be equal because the division of gain depend on several factors such demand and supply for goods as well as the price which we don't have the information about.
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]
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.
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.
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
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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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.
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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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.
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.
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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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).
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.
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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Which of the following equations best represents the reporting shown in a statement of partnership equity? a.Beginning Balance of Partner Capital – Capital Additions – Net Income – Partner Withdrawals = Ending Balance of Partner Capital b.Ending Balance of Partner Capital + Capital Additions – Partner Withdrawals = Partnership Net Income c.Beginning Balance of Partner Capital + Capital Additions + Net Income – Partner Withdrawals = Ending Balance of Partner Capital d.Partner Withdrawals – Net Income – Partner Deficiency = Ending Balance of Partner Capital
Answer:
The correct answer is c. Beginning Balance of Partner Capital + Capital Additions + Net Income – Partner Withdrawals = Ending Balance of Partner Capital.
Explanation:
When a partnership is formed, all the partners invest capital as per their agreed share and that capital forms the Beginning balance of Partner Capital, after the partnership formation there is further capital investment by partners which should be added in the beginning balance. When the partnership business makes the profits, those profits or net income will be added to the capital account. When a partner withdraws some money, this is like he is extracting money from his investment in the business and share capital should reduce so the withdrawals should be subtracted. After all these actions we can have Ending Balance of Partner Capital.
The equation that best represents the reporting shown in a statement of partnership equity is c. Beginning Balance of Partner Capital + Capital Additions + Net Income - Partner Withdrawals = Ending Balance of Partner Capital.
Explanation:The equation that best represents the reporting shown in a statement of partnership equity is c. Beginning Balance of Partner Capital + Capital Additions + Net Income - Partner Withdrawals = Ending Balance of Partner Capital.
In a statement of partnership equity, the beginning balance of partner capital is the initial capital contributed by each partner. Capital additions represent any additional investments made by the partners. Net income is the total profit earned by the partnership. Partner withdrawals are the amounts taken out by the partners for personal use. The ending balance of partner capital is the remaining capital after accounting for additions, income, and withdrawals.
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
Wylie has been offered the choice of receiving $5,000 today or an agreed-upon amount in 1 year. While negotiating the future amount, Wylie notes that he would be willing to take no less than $5,700 if he has to wait a year. What is his TVOM in percent? Wylie has been offered the choice of receiving ,
Answer:
The answer is 14%
Explanation:
Formula for Future value (FV) FV = PV (1+ni)
Whereas FV= Future value, PV = present value, n= number of years, i= TVOM in percentage
Rearranging the formula for i
i = (FV/PV)-1
So, i = (5,700/5,000)-1
i = 1.14-1
i = 0.14
i = 14%
(0.14x100=14%)