Answer:
The answer is cutbacks in defense production
One of the main reasons of the recession which was immediate after the world war 2 was the government's inability to produce anything as most expense was carried out in the event of the war which decreased the gross domestic product making the economy to fall into recession.
Answer:
Cutbacks in defense production.
Explanation:
World War II refers to a global war that started in 1939 and ended in 1945.
The end of World War II was immediately followed by a recession known as the Recession of 1945.
The Recession of 1945 occurred as a result of the reduction in government spending especially on defense production like arms and ammunition due to demobilization and movement to peacetime from a wartime economy.
This resulted into an enormous fall in gross domestic product (GDP) and the US economy technically entered a recession.
Therefore, cutbacks in defense production caused a recession in the years immediately following World War II.
Kokomochi is considering the launch of an advertising campaign for its latest dessert product, the Mini Mochi Munch. Kokomochi plans to spend $ 6.5 million on TV, radio, and print advertising this year for the campaign. The ads are expected to boost sales of the Mini Mochi Munch by $ 10.1 million this year and $ 8.1 million next year. In addition, the company expects that new consumers who try the Mini Mochi Munch will be more likely to try Kokomochi's other products. As a result, sales of other products are expected to rise by $ 2.1 million each year. Kokomochi's gross profit margin for the Mini Mochi Munch is 34 %, and its gross profit margin averages 23 % for all other products. The company's marginal corporate tax rate is 35 % both this year and next year. What are the incremental earnings associated with the advertising campaign?
Answer:
The incremental earnings are $0.4251
Explanation:
All those costs that are incremental costs that arise on the following principal:
"If we take decision, there is a cost and
If there is no decision, there is no cost."
This means that:
Incremental cost = Cash flow due to taking decisions less Cash flows due to not taking decisions
Incremental Earnings Forecast ($ million) ($ million)
Gross Profit of Mini Mochi Munch
Year 1 10.1 * 34% 3.434
Year 2 8.1 * 34% 2.754 6.188
Gross Profit of Other products
Year 1 2.1 * 23% 0.483
Year 2 2.1 * 23% 0.483 0.966
Advertising cost (6.5)
Net Operating Cash Flow 0.654
Tax at the rate 35% (0.2289)
Net Cash flow 0.4251
Protect provides house-sitting for people while they are away on vacation. Some of its customers pay immediately after the job is finished. Some customers ask that the business send them a bill. As of the end of the year, Protect has collected $500 from cash paying customers. Protect's remaining customers owe the business $1,200.
How much service revenue would Protect have for the year under:
a. Cash Basis?
b. Accural Basis?
Answer:
a. $500
b. $1,700
Explanation:
In the cash basis system of accounting, revenue is recognized once cash has been collected while under accrual basis, revenue is collected once it is earned irrespective of whether cash has been collected or not.
Expenses are recorded when cash is paid in the cash basis system while expenses are recorded once it is incurred under the accrual system of accounting.
Hence
Cash basis - revenue earned is $500 for the year
Accrual basis - revenue earned is $1700 ( the sum of the amount paid and owed by the customer).
If a $150,000 balance in Deferred Tax Liability was computed by use of a 30% rate, the underlying cumulative temporary difference amounts to
Answer:
$105,000
Explanation:
Given:
Balance in deferred tax liabilities = $150,000
Rate of computing deferred tax liabilities = 30% = [tex]\frac{30}{100}[/tex] = 0.30
Cumulative temporary difference = ?
Computation of Cumulative temporary difference:
Temporary difference = Balance in deferred tax liabilities - (Balance in deferred tax liabilities × Tax rate)
= $150,000 - ($150,000 × 0.30)
= $150,000 - $45,000
= 105,000
Applying activity-based costing LO P1, P3, A1, A2, C3 [The following information applies to the questions displayed below.] Craft Pro Machining produces machine tools for the construction industry. The following details about overhead costs were taken from its company records. Production Activity Indirect Labor Indirect Materials Other Overhead Grinding $ 320,000 Polishing $ 135,000 Product modification 600,000 Providing power $ 255,000 System calibration 500,000 Additional information on the drivers for its production activities follows. Grinding 13,000 machine hours Polishing 13,000 machine hours Product modification 1,500 engineering hours Providing power 17,000 direct labor hours System calibration 400 batches Job 3175 Job 4286 Number of units 200 units 2,500 units Machine hours 550 MH 5,500 MH Engineering hours 26 eng.hours 32 eng.hours Batches 30 batches 90 batches Direct labor hours 500 DLH 4,375 DLH. Compute the activity overhead rates using ABC. Form cost pools as appropriate. Determine overhead costs to assign to the following jobs using ABC. What is the overhead cost per unit for Job 3175? What is the overhead cost per unit for Job 4286?
Answer:
Craft Pro Machining
Activity Rate= Activity Cos/ Cost Driver
Production Activities Cost Drivers Activity Rate
Grinding $ 320,000 13,000 machine hours 24.615per machine hour
Polishing $ 135,000 13,000 machine hours 10.38 per ,machine hour
Product modification 600,000 1,500 engineering hours 400 per eng. hour
Providing power $ 255,000 17,000 direct labor hours 15 per DLH
System calibration 500,000 400 batches 1250 per batch
Working:
Job 3175 Job 4286
Number of units 200 units 2,500 units
Machine hours 550 MH 5,500 MH
Engineering hours 26 eng.hours 32 eng.hours
Batches 30 batches 90 batches
Direct labor hours 500 DLH 4,375 DLH
Job 3175 Job 4286
Number of units 200 units 2,500 units
Grinding & Polishing 19247.25 192472.5
Product modification 10400 12800
System calibration 37500 112500
Providing power 7500 65625
Total Costs $ 74,647.25 $ 383,397.5
The overhead cost per unit for Job 3175 = $ 74,647.25 /200=$ 373.24
The overhead cost per unit for Job 4286= $ 383,397.5/2,500= $ 153.36
The following transactions took place at Fine Fashions Outlet during July 2019. Fine Fashions Outlet uses a perpetual inventory system. DATE TRANSACTIONS July 1 Purchased dresses for $4,400 plus a freight charge of $700 from Fashion Expo, Invoice 101, dated July 1; the terms are 2/10, n/30. 5 Sold two dresses on account to Alice Chu, terms 1/10, n/30; issued Sales Slip 788 for $900. The cost of the dresses sold was $720. 7 Received Credit Memorandum 210 for $850 from Fashion Expo for damaged dresses returned; the goods were purchased on Invoice 101 dated July 1. 9 Accepted a return of a dress from Alice Chu; the dress was originally sold on Sales Slip 788 of July 5; issued Credit Memorandum 89 for $400. The cost of the returned dress was $240. 10 Issued Check 1255 to pay the amount due to Fashion Expo for Invoice 101, dated July 1, less the return of July 7 and less the cash discount. 15 Received payment from Alice Chu for the sale of July 5, less the return of July 9 and less the cash discount. 15 Recorded sales on credit cards for the two-week period ended July 15, $13,000; the bank charges a 3 percent fee on all credit card sales. The cost of merchandise sold was $10,400. 17 Purchased merchandise on account from Fashion Wholesalers for $5,000, subject to trade discounts of 40 percent and 10 percent, terms 1/10, n/30, Invoice 2078. 26 Paid amount owed to Fashion Wholesalers for the purchase of July 17, Check 1285. Record the transactions in a general journal.
Answer:
July 1 Debit inventory 5100 credit Accounts payable 5100
5 July Debit Accounts receivables 900 credit sales 900
debit cost of sales 720 credit inventory 720
7 July Debit Accounts payable 850, credit inventory 850
9 July Debit sales allowance 400, credit Accounts receivables 400
debit inventory 240 credit cost of sales 240
10 July Debit Accounts payable 4165 credit bank 4165
15. July Debit Bank 13000 credit sales 13000
debit cost of sales 10400 credit inventory 10400
debit bank charges 390 credit bank 390
17 debit merchandise 5000 credit Accounts payable 5000
26 Debit Accounts payable 4950 credit bank 4950
Explanation:
1 july inventory is the total of purchases plus freight charges.
10 july the discount is on the remaining amount after the goods returned because goods returned had decreased the amount owing.
26 july the trade discounts are for when buying and paying same day when it it is on account there can only be settlement discount
Final answer:
Fine Fashions Outlet's transactions from July 2019 must be correctly recorded in a general journal, following the details and terms provided for each transaction within the perpetual inventory system.
Explanation:
For Fine Fashions Outlet, which uses a perpetual inventory system, the transactions from July 2019 must be properly recorded in the general journal. Each transaction involves different aspects of business operation such as purchases, sales, returns, and payments. Detailed entries including dates, amounts, and terms are crucial for accurate financial accounting and inventory management.
Purchase of dresses and payment of freight with terms.
Sales of dresses on account with terms and cost of goods sold.
Receipt of a credit memorandum for returned damaged dresses.
Acceptance of a return from a customer and issuance of a credit memorandum considering the cost.
Issuance of a check to Fashion Expo considering returns and cash discounts.
Collection of payment from customer considering returns and discounts.
Recording credit card sales and associated bank charges along with the cost of goods sold.
Purchase of merchandise considering trade discounts and payment terms.
Payment made to Fashion Wholesalers for prior purchases.
Each entry should reflect the specific details of the transaction – the date, the parties involved, the nature of the transaction (e.g., purchase, sale, return), and the terms of the transactions (discounts, due dates, and so on).
Gabriele Enterprises has bonds on the market making annual payments, with eight years to maturity, a par value of $1,000, and selling for $964. At this price, the bonds yield 6.7 percent. What must the coupon rate be on the bonds?
Answer:
Coupon rate = 5.8%
Explanation:
The price of a bond is the present value (PV) of the future cash flows discounted at its yield.
So we will need to work back to ascertain the coupon rate
Step 1
Calculate the PV of redemption value and PV of interest payments
PV of Redemption
= 1.067^(-5) × 1000
=723.06
PV of the annual interest rate
= price of the bond - PV of redemption
= $964- 723.06
= 240.934
Step 2
Calculate the interest payment
Interest payment = PV of redemption value / annuity factor
Annuity factor =( 1 -(1+r)^(-n) )/r
Annuity factor at 6.7% for 5 years
Factor =( 1-1.067^(-5) )/0.067
= 4.1333
Interest payment = PV of the annual interest rate / Annuity factor
Interest payment=
=240.93/4.1333
=58.290
Step 3
Calculate the coupon rate
Coupon rate = interest payment/ par value
Coupon rate = (58.290/1000) × 100
= 5.8%
Coupon rate = 5.8%
SecuriCorp operates a fleet of armored cars that make scheduled pickups and deliveries in the Los Angeles area. The company is implementing an activity-based costing system that has four activity cost pools: Travel, Pickup and Delivery, Customer Service, and Other. The activity measures are miles for the Travel cost pool, number of pickups and deliveries for the Pickup and Delivery cost pool, and number of customers for the Customer Service cost pool. The Other cost pool has no activity measure because it is an organization-sustaining activity. The following costs will be assigned using the activity-based costing system: Driver and guard wages $ 960,000 Vehicle operating expense 390,000 Vehicle depreciation 270,000 Customer representative salaries and expenses 300,000 Office expenses 160,000 Administrative expenses 460,000 Total cost $ 2,540,000 The distribution of resource consumption across the activity cost pools is as follows: Travel Pickup and Delivery Customer Service Other Totals Driver and guard wages 50 % 35 % 10 % 5 % 100 % Vehicle operating expense 70 % 5 % 0 % 25 % 100 % Vehicle depreciation 60 % 15 % 0 % 25 % 100 % Customer representative salaries and expenses 0 % 0 % 90 % 10 % 100 % Office expenses 0 % 20 % 30 % 50 % 100 % Administrative expenses 0 % 5 % 60 % 35 % 100 % Required: Complete the first stage allocations of costs to activity cost pools.
Answer:
SecuriCorp
The First level Allocations will be:
Of a total cost of $2,540,000
Travel allocated costs is $915,000
Pick Up and Delivery is $451,000
Customer Service is $690,000
Others is $484,000
Explanation:
the next level of allocation will be to determine the cost rate based on the Activity Measures, however these were not provided in the question
Activity Based Costing is a costing technique that allocates costs based on the activity level of certain pre-determined cost drivers.
Instead of taking the pool of costs and dividing it by Volume to arrive at an Average Costs, Activity Based Costing believes all components leading to the cost generated should bear the burden of the cost by determining the Driver rate per activity.
If from the example we have worked above, we are told the number of miles covered is 20,000 miles and the actual Cost we worked out for Travels was $960,000. This implies we have an activity rate of $48 Per mile covered as travels costs.
The same would apply to Customer Services if for example 3,000 customers were attended to in the period, the Rate Per Customer will become $690,000 divided by 3,000 = $230 Per Customer
With these indices, it is easy to then allocate costs on the basis of miles traveled + Customers Attended to etc
To allocate costs to the activity cost pools, multiply the total costs by the resource consumption percentages provided for each activity.
Explanation:In order to allocate costs to the activity cost pools, we need to use the distribution of resource consumption percentages provided. Let's calculate the cost allocation for each activity cost pool:
Travel cost pool: Multiply total costs by 50% for driver and guard wages, 70% for vehicle operating expense, and 60% for vehicle depreciation.Pickup and Delivery cost pool: Multiply total costs by 35% for driver and guard wages, 5% for vehicle operating expense, and 15% for vehicle depreciation.Customer Service cost pool: Multiply total costs by 10% for driver and guard wages, 0% for vehicle operating expense, and 0% for vehicle depreciation, and 90% for customer representative salaries and expenses.Other cost pool: Multiply total costs by 5% for driver and guard wages, 25% for vehicle operating expense, and 25% for vehicle depreciation, and 10% for customer representative salaries and expenses, and 50% for office expenses, and 35% for administrative expenses.Learn more about Cost allocation here:https://brainly.com/question/34659373
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Eduardo is working his way up the ladder in the world of amateur boxing. He makes a stinging remark about his next opponent on TV by saying that his opponent is a coward who probably practices boxing by beating up his wife. Which of the following is true?
Eduardo is being defamatory because his remarks may harm his opponent’s reputation.
Eduardo is not being defamatory because his remarks are statements of opinion only.
Eduardo is not being defamatory because it is obvious that the statement must be false.
Eduardo is being defamatory because the information he published is true.
Answer:
The correct answer is letter "A": Eduardo is being defamatory because his remarks may harm his opponent’s reputation.
Explanation:
Defamation is the act by which one individual or organization states something about another party as true without proven facts and typically negatively affecting that other party. In such cases, the party affected can sue the defamatory party so the statement causing the dispute can be evaluated. If it is not true, the affected party can request monetary compensation for slander.
Thus, Eduardo is being defamatory by saying that his next box opponent beats up his wife since he does not have proof of such actions. Eduardo is likely trying to dismiss his opponent's reputation.
Mauro Products distributes a single product, a woven basket whose selling price is $12 per unit and whose variable expense is $9 per unit. The company’s monthly fixed expense is $6,300. Required: 1. Calculate the company’s break-even point in unit sales. 2. Calculate the company’s break-even point in dollar sales. (Do not round intermediate calculations.) 3. If the company's fixed expenses increase by $600, what would become the new break-even point in unit sales? In dollar sales? (Do not round intermediate calculations.)
Answer:
1. 2,100 units
2. $25,200
3. 2,300 units and $27,600
Explanation:
The break-even point is the level of sales at which the business incur no profit no loss.Fixed and variable costs are covered at this level of sales.
Contribution Margin = Sale price - variable cost = $12 - $9 = $3
Contribution Margin ratio= Contribution Margin / Sale price = $3 / $12 = 25%
1.
Break-even point = Fixed cost / Contribution margin = $6,300 / $3 = 2,100
2.
Break-even point = Fixed cost / Contribution margin ratio = $6,300 / 25% = $25,200
3.
Fixed Cost = $6,300 + $600 = $6,900
Break-even point = Fixed cost / Contribution margin = $6,900 / $3 = 2,300 units
Break-even point = Fixed cost / Contribution margin ratio = $6,900 / 25% = $27,600
Exercise 06-5 Absorption costing and variable costing income statements LO P2 Rey Company’s single product sells at a price of $216 per unit. Data for its single product for its first year of operations follow. Direct materials $ 20 per unit Direct labor $ 28 per unit Overhead costs Variable overhead $ 6 per unit Fixed overhead per year $ 160,000 per year Selling and administrative expenses Variable $ 18 per unit Fixed $ 200,000 per year Units produced and sold 20,000 units 1. Prepare an income statement for the year using absorption costing 2. Prepare an income statement for the year using variable costing.
Answer:
1. Income statement for the year
using Absorption Costing
Selling price ( 20,000 x $216 ) $4,320,000
Direct materials ( 20,000 x $20 ) $400,000
Direct labor ( 20,000 x $28 ) $560,000
Variable overhead ( 20,000 x $6 ) $120,000
Fixed overhead $160,000
Total Production Cost ($1,240,000)
Gross Profit $3,080,000
Selling and Admin Expenses
Variable Cost ( 20,000 x $18) $360,000
Fixed Cost $200,000
Total Period Cost ($560,000)
Operating Income $2,520,000
2. Income statement for the year
using Variable Costing
Selling price ( 20,000 x $216 ) $4,320,000
Direct materials ( 20,000 x $20 ) $400,000
Direct labor ( 20,000 x $28 ) $560,000
Variable overhead ( 20,000 x $6 ) $120,000
Variable Cost S&A ( 20,000 x $18) $360,000
Variable Production Cost ($1,440,000)
Contribution Margin $2,880,000
Fixed Cost
Production overhead cost $160,000
Fixed Cost S&A $200,000
($360,000)
Operating Income $2,520,000
Explanation:
Variable and absorption costing income statement have difference of treatment of Variable and Fixed costs as production cost and period cost.
Variable costing consider all variable costs as production cost and Absorption costing consider all the cost incurred in production either variable or fixed as production cost.
An operation operates with a variable cost percentage of 72%. The owner wants to increase sales revenue by an amount necessary to provide for an additional operating income of $800 a month, or $9,600 a year. What is the additional increase in sales revenue required
Answer:
The answer is $2,857.14
Explanation:
Let us assume Sales be $500 per month
Monthly
Sales $500
Less: Variable Cost(72%) $360
Contribution(will be 28%) $140
Less: Fixed Cost(Assume) 0
Operating Income $140
If there should be an increase of $800 per month in the operating Income
Revised Operating Income $140 + $800 = $940
Therefore Contribution is equal to $ 940
If Contribution is $940 equal to 28%, then Sales be 100%
$940 ÷ 28%
$3,357.14
Therefore additional increase in Sales revenue required per month
$3,357.14 - $500
$2,857.14
To calculate the additional increase in sales revenue required, divide the desired operating income by the variable cost percentage. The result is the additional increase in sales revenue needed.
Explanation:To calculate the additional increase in sales revenue required, we need to determine the operating income that corresponds to the desired increase of $800 per month or $9,600 per year. The variable cost percentage of 72% means that 72% of the sales revenue goes towards covering variable costs. We can set up an equation to find the additional increase in sales revenue:
Additional increase in sales revenue = Desired operating income / Variable cost percentage
Substituting the values for the desired operating income and variable cost percentage:
Additional increase in sales revenue = $9,600 / 0.72 = $13,333.33
Therefore, the additional increase in sales revenue required is $13,333.33.
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The account Paid-In Capital from Treasury Stock Transactions has a credit balance of $2,000. The corporation resells 450 shares of its treasury stock. These shares were acquired for $10 per share and sold for $3 per share. The entry to record the sale of treasury stock includes a debit to Retained Earnings of $3,150.
a. true
b. false
Answer:
b. false
Explanation:
The journal entry is shown below:
Cash A/c Dr $1,350 (450 shares × $3)
Paid in capital - Treasury stock $2,000
Retained Earnings A/c Dr $1,150
To Treasury Stock A/c $4,500 (450 shares × $10)
(Being treasury stock is sold at lower price and the remaining amount would be debited to the retained earning account)
Hence, the given statement is false
The first step when planning pricing policies for a good or service is to develop _____. A. demand curves B. competitive effects C. profit objectives D. variable cost objectives E. pricing objectives
The first step when planning pricing policies for a good or service is to develop pricing objectives.
Explanation:
The first step when planning pricing policies for a good or service is to develop pricing objectives.Pricing objectives are the goals that guide your business is a setting of the product cost or service cost to your valuable customers.examples of pricing objectives include maximizing profits, increasing sales volume, matching competitors' prices, deterring competitors.Some commonly used pricing objective are:increase monetary sales. increase market share.survival avoid government investigation or intervention.Identify whether each of the following examples belongs in M1 or M2. If an example belongs in both, be sure to check both boxes. Example M1 M2 Larry has $25,000 in a money market account. Felix has a roll of quarters that he just withdrew from the bank to do laundry. Megan has $8,000 in a two-year certificate of deposit (CD).
Answer
Given that:
The Boxes are M1 and M2
The Larry has $25,000 in a money in the market.
Megan has $8,000 in a 2 year certificate of deposit.
Felix has a roll of quaters.
M1 = Currency circulation + checks of traveller + balance of transaction account.
M2 = M1 + saving account which is small + funds of money market + deposits for small time + other deposits.
1st Example: M1 & M2 both. Because here money is circulating from bank to laundry. This is the condition of M1 and M2 also includes M1. Hence M1 and M2 both are correct for this example .
2nd Example: M2. Because here $25000 is a fund of money market which is the condition of M2.
3rd Example: M2. Because here $8000 is a certificate deposit for 2 years. All small time period deposits are the condition of M2.
Larry's money market account and Megan's certificate of deposit (CD) belong to M2. Felix's roll of quarters belongs to both M1 and M2 because these are coins in active circulation.
Explanation:The funds that Larry has in his money market account count as M2 money because money market funds are included in M2. Felix's roll of quarters, which represents coins and currency in circulation, belongs to both M1 and M2, as it is currency that's readily available. Lastly, Megan's certificate of deposit (CD) is also a part of M2 because certificates of deposit are included in M2, which represents more kinds of savings that are less liquid than M1.
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The debits and credits for four related entries for a sale of $15,000, terms 1/10, n/30, are presented in the following T accounts. Cash (5) 13,860 Accounts Receivable (1) 14,850 (3) 990 (5) 13,860 Merchandise Inventory (4) 575 (2) 8,800 Estimated Returns Inventory (4) 575 Customer Refunds Payable (3) 990 Sales (1) 14,850 Cost of Merchandise Sold (2) 8,800 Describe each transaction. 1. Sold merchandise on account. 2. Recorded the cost of the merchandise sold and reduced the merchandise inventory account. 3. 4. 5. Check My Work5 more Check My Work uses remaining.
please finThe debits and credits for four related entries for a sale of $15,000, terms 1/10, n/30, are presented in the following T accounts. EXPLANATIONS for these accounts are given below in an attachment
A restaurant has fixed costs of $53,400 for the month of March 0006. The average check is $12.95, with an average variable cost of $7.38. What is breakeven units of sales revenue for the month of March
Answer:
9587 orders are needed to achieve breakeven sales revenue for March' 06
Explanation:
Break Even Point is where firm earns Total Revenue (TR) equal to its total cost (TC)
Total Revenue = Average Revenue or Price x Quantity ;Total Cost = Total Fixed Cost + Total Variable CostLet quantity i.e unit of sales revenue be = x
Above 2 formulas & ; Total Variable Cost = Average Variable Cost x Quantity implies :-
12.95x = 7.38x + 53400
12.95x - 7.38 x = 53400
5.57 x = 53400
x = 53400 / 5.57
x = 9587
Suppose a loan of $38,000 is taken out with an annual interest rate of 8.125%, with interest compounded semiannually. If equal payments are also made semiannually, find the amount of each payment needed to amortize (pay off) the loan in 13 years.
Answer:
$2,393.78
Explanation:
In this question we use the PMT formula that is shown in the attachment below:
Data provided in the question
Present value = $38,000
Future value = $0
Rate of interest = 8.125% ÷ 2 = 4.0625%
NPER = 13 years × 2 = 26 years
The formula is shown below:
= PMT(Rate;NPER;-PV;FV;type)
The present value come in negative
So, after solving this, the amount of each payment is $2,393.78
The transactions of Spade Company appear below. Kacy Spade, owner, invested $12,500 cash in the company in exchange for common stock. The company purchased office supplies for $363 cash. The company purchased $6,913 of office equipment on credit. The company received $1,475 cash as fees for services provided to a customer. The company paid $6,913 cash to settle the payable for the office equipment purchased in transaction c. The company billed a customer $2,650 as fees for services provided. The company paid $520 cash for the monthly rent. The company collected $1,113 cash as partial payment for the account receivable created in transaction f. The company paid $1,100 cash in dividends to the owner (sole shareholder).
Prepare the Trial Balance.
Answer:
Debits of trial balance = Credits of trial balance.
Explanation:
1. Dr Cash 12500
Cr Capital 12500
2.Dr Office supplies 363
Cr Cash 363
3.Dr Office equipment 6913
Cr Accounts payable 6913
4. Dr Cash 1475
Cr Service revenue 1475
5. Dr Accounts payable 6913
Cr Cash 6913
6. Dr Account receivable 2650
Cr Service revenue 2650
7. Dr Rent expense 520
Cr Cash 520
8. Dr Cash 1113
Cr Account receivable 1113
9.a) Dr Retained Earning 1100
Cr Dividend payable 1100
b) Dr Dividend payable 1100
Cr Cash 1100
Ledgers:
Cash=12500-363+1475-6913-520+1113-1100= Dr 6192
Office Supplies = Dr 363
Office equipment = Dr 6913
Capital = Cr 12500
Accounts payable = 6913-6913=0
Service revenue = 1475+2650= Cr 4125
Rent expense = Dr 520
Account receivable = 2650-1113= Dr 1537
Retained earning = Dr 1100
Dividend payable =1100-1100=0
Trial Balance
_Dr________________________________________Cr_____
6192 cash ----- 12500 Capital
363 Office supplies ----- 4125 Service revenue
6913 Office equipment -----
520 Rent expense ------
1537 Account receivable
1100 Retained earning
Total = 16625 ------ Total = 16625
The Trial Balance for Spade Company is prepared by listing all accounts and their current balances. The total debit equals the total credit, which confirms that the Trial Balance is correctly prepared.
Explanation:To prepare a Trial Balance for Spade Company, we list all the accounts and their current balances.
Cash: $12,500 (owner investment) - $363 (office supplies) - $6,913 (office equipment) + $1,475 (services provided) - $520 (rent) + $1,113 (accounts receivable) - $1,100 (dividends) = $5,292Office Supplies: $363Office Equipment: $6,913 (purchased on credit and paid)Accounts Payable: $0 (all payables have been settled)Service Revenue: $1,475 (cash received) + $2,650 (billed to customer) - $1,113 (partial collection from customer) = $3,012Rent Expense: $520Dividends: $1,100Common Stock: $12,500 (owner investment)The total debit equals the total credit, which confirms our Trial Balance is correctly prepared.
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On January 1, 2016, Culver Corporation granted 9,300 options to key executives. Each option allows the executive to purchase one share of Culver’s $5 par value common stock at a price of $20 per share. The options were exercisable within a 2-year period beginning January 1, 2018, if the grantee is still employed by the company at the time of the exercise. On the grant date, Culver’s stock was trading at $25 per share, and a fair value option-pricing model determines total compensation to be $409,000.
On May 1, 2018, 7,440 options were exercised when the market price of Culver’s stock was $30 per share. The remaining options lapsed in 2020 because executives decided not to exercise their options.
Prepare the necessary journal entries related to the stock option plan for the years 2016 through 2020.
Answer:
Explanation:
Jan.1 2016 No entry
Dec.31 2016
Dr Compensation expense [$409,000/2] $204,500
Cr Paid in capital - Stock options $204,500
Dec. 31 2017
Dr Compensation expense [$409,000/2] $204,500
Cr Paid in capital - Stock options $204,500
Dec. 31 2018
Dr Cash [7440*$20] $148,800
Dr Paid in capital - Stock options [$409,000*(7440/9300)] $327,200
Cr Common stock [7440*$5] $37,200
Cr Paid in capital in excess of par [148,800+327,200-37,200] $438,800
Jan. 1 2020
Dr Paid in capital - Stock options [409,000-327,200] $81,800
Cr Paid in capital from expired stock $81,800
Alphonse Company manufactures staplers. The budgeted sales price is $ 16.00 per stapler, the variable costs are $ 4.00 per stapler, and budgeted fixed costs are $ 10 comma 000. What is the budgeted operating income for 5 comma 000 staplers?
Answer:
$50,000
Explanation:
Budgeted operating income is the difference between the total sales and the total expenses. The total expense is made up of the fixed cost and variable cost.
The variable cost and sales are dependent on the level of activities. The sales less the variable cost gives the contribution margin.
As such, contribution less fixed cost gives the budgeted operating income.
The budgeted operating income
= ($16 × 5000) - ($4 × 5000) - $10,000
= $50,000
A bond’s is generally $1,000 and represents the amount borrowed from the bond’s first purchase. • A bond issuer is said to be in if it does not pay the interest or the principal in accordance with the terms of the indenture agreement or if it violates one or more of the issues restrictive covenants. • The contract that describes the terms of a borrowing arrangement between a firm that sells a bond issue and the investors who purchase the bonds is called . • A bond’s gives the issuer the right to call, or redeem, a bond at specific times and under specific conditions. What is the coupon interest rate of this bond?
Explanation:
1. A bond's face or maturity value is generally $1,000 and represents the amount borrowed from the bond's first purchaser.
2. A bond issuer is said to be in default if it does not pay the interest or the principal in accordance with the terms of the indenture agreement or if it violates one or more of the issue's restrictive covenants.
3. A bond contract feature that requires the issuer to retire a specified portion of the bond issue each year is called a singing fund provision.
4. A bond's call provision gives the issuer the right to call, or redeem, a bond at specific time and under specific conditions.
Creative Concepts Co. and Retail Investment, Inc., form a joint venture to purchase and sell high?end real estate to foreign buyers. Creative Concepts contributes $400,000 in capital, and Retail Investment contributes $600,000 in capital. The first year resulted in $2,000,000 in profits. Unless otherwise agreed, joint venturers:
a. share profits and losses by proportion to the amount invested.
b. share profits and losses equally.
c. retain profits with the joint venture until the joint venture is dissolved by at least one member.
d. share profits and losses according to the state's Uniform Joint Venture Act.
Answer:
d. share profits and losses according to the state's Uniform Joint Venture Act.
Explanation:
A 16-year, 4.5 percent coupon bond pays interest annually. The bond has a face value of $1,000. What is the percentage change in the price of this bond if the market yield to maturity rises to 5.7 percent from the current rate of 5.5 percent?
Answer:
2.2% change in the price of this bond if the market yield to maturity rises to 5.7 percent from the current rate of 5.5 percent.
Explanation:
Face Value = $1,000
Coupon payment = 1000 x 4.5% = $45 annually
Number of periods = n = 16 years
Price of bond is the present value of future cash flows, to calculate Price of the bond use following formula
Price of the Bond = C x [ ( 1 - ( 1 + r )^-n ) / r ] + [ F / ( 1 + r )^n ]
Yield to maturity = 5.7%
Price of the Bond = $45 x [ ( 1 - ( 1 + 5.7% )^-16 ) / 5.7% ] + [ $1,000 / ( 1 + 5.7% )^16 ]
Price of the Bond = $876.18
Yield to maturity = 5.5%
Price of the Bond = $45 x [ ( 1 - ( 1 + 5.5% )^-16 ) / 5.5% ] + [ $1,000 / ( 1 + 5.5% )^16 ]
Price of the Bond = $895.38
Percentage Change = ( $895.38 - $876.18 ) / $876.18 = 2.2%
2.2% modification in the price of this bond if the market yield to maturity rises to 5.7 percent from the current rate of 5.5 percent.
Calculation of Percentage change
The Face Value is = $1,000
Then the Coupon payment is = 1000 x 4.5% = $45 annually
After that Number of periods = n is = 16 years
When the Price of bond is the present value of future cash flows, Then to calculate Price of the bond use following formula are:
Price of the Bond is = C x [ ( 1 - ( 1 + r )^-n ) / r ] + [ F / ( 1 + r )^n ]
Then Yield to maturity = 5.7%
The Price of the Bond is = $45 x [ ( 1 - ( 1 + 5.7% )^-16 ) / 5.7% ] + [ $1,000 / ( 1 + 5.7% )^16 ]
The Price of the Bond is = $876.18
Then Yield to maturity is = 5.5%
After that Price of the Bond is = $45 x [ ( 1 - ( 1 + 5.5% )^-16 ) / 5.5% ] + [ $1,000 / ( 1 + 5.5% )^16 ]
Then Price of the Bond = $895.38
Therefore, the Percentage Change is = ( $895.38 - $876.18 ) / $876.18 = 2.2%
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At December 31, 2018, Atlanta Company has an equity portfolio valued at $160,000. Its cost was $132,000. If the Securities Fair Value Adjustment has a debit balance of $8,000, which of the following journal entries is required at December 31, 2018?
Select one:
a. Fair Value Adjustment 28,000 Unrealized Holding Gain or Loss-Income 28,000
b. Unrealized Holding Gain or Loss-Income 20,000 Fair Value Adjustment 20,000
c. Unrealized Holding Gain or Loss-Income 28,000 Fair Value Adjustment 28,000
d. Fair Value Adjustment 20,000 Unrealized Holding Gain or Loss-Income 20,000
Answer:
a. Fair Value Adjustment 28,000 Unrealized Holding Gain or Loss-Income 28,000
Explanation:
The journal entry is as follows
On December 31, 2018
Fair Value Adjustment A/c Dr
To Unrealized Holding Gain or Loss-Income A/c
(Being the unrealized holding gain or loss is recorded)
The computation is shown below:
= Valued of an equity portfolio - cost - debit balance of securities fair value
= $160,000 - $132,000 - $8,000
= $20,000
Data for January for Bondi Corporation and its two major business segments, North and South, appear below:
Sales revenues, North $ 587,000
Variable expenses, North $ 340,600
Traceable fixed expenses, North $ 70,200
Sales revenues, South $ 453,200
Variable expenses, South $ 258,600
Traceable fixed expenses, South $ 58,600
In addition, common fixed expenses totaled $158,900 and were allocated as follows: $82,500 to the North business segment and $76,400 to the South business segment.
A properly constructed segmented income statement in a contribution format would show that the segment margin of the North business segment is:
a.$93,700
b.$340,600
c.$176,200
d.$163,900
Answer:
c.$176,200
Explanation:
The questionis to determine the segment margin of the North Business Segment
Pitfall to note: the question contains data for both the North and the South Segments, as such, only the data relevant to the North Segment should be used for the calculation as follows:
Sales Revenue = $587,000
Subtract: Variable Exp. ($340,000)
COntribution margin $264,400
Subtract: Traceable Fixed ($70,200)
The Segment Margin $176,200 Option c
The segment margin for the North business segment in a contribution formatted segmented income statement is $176,200. We arrive at this figure by first calculating the contribution margin(discounting the variable expenses from the sales revenue) and then subtracting the traceable fixed expenses from this number.
Explanation:To ascertain the segment margin for the North business segment, we first gauge contribution margin which is subtracting the variable expenses from sales revenues. Thus, the contribution margin for North is $587,000 (sales revenues) - $340,600 (variable expenses) = $246,400. Next, we subtract traceable fixed expenses from this to arrive at the segment margin. The segment margin would, therefore, be $246,400 - $70,200 (traceable fixed expenses) = $176,200. Hence, the segment margin for the North segment under a contribution formatted segmented income statement is $176,200.
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A manufacturing facility consists of eight departments (A, B, C, D, E, F, G, and H) and is to produce six components (1, 2, 3, 4, 5, and 6). Following are the product routings and production forecasts: Component Routing Production Forecast (E.U.L. per week)
1 A-B-G-H 20
2 A-C-D-H 25
3 A-D-E-F-H 20
4 A-B-C-E-H 30
5 A-B-C-D-H 15
6 A-E-F-G-H 5
a) Develop the FROM-TO chart [20]
b) Develop the VOLUME-BETWEEN chart [20]
Answer:
The answer is given in the attached file.
Explanation:
Examining relationships among data in the company's financial statements can provide knowledge that can not be gained from just looking at individual items in the statements.
Options: True or False
Answer: True
Explanation: Financial statements is a written record of the inflow and outflow of funds in an organisation, it gives a description and clearer picture or view of how the financial activities taking place in the Organisation has been managed,it helps the decision makers to see the true picture and state of affairs of the Organisation.
EXAMINING FINANCIAL STATEMENTS HELPS TO REVEAL MORE DETAILED INFORMATION THAT CAN NOT BE OBTAINED BY JUST LOOKING AT INDIVIDUAL ITEMS IN A STATEMENT.
The free cash flow hypothesis supports A. decreasing stockholder dividends to retain more cash within the firm. B. reducing a firm's level of debt to reduce the amount of cash used to pay interest. C. increasing the debt portion of a firm's capital structure to increase firm value. D. hiring managers with little or no stock ownership in the firm. E. the idea that firms with high levels of free cash flow are more apt to make good acquisitions than firms with low levels. Reset Selection\
Answer:
The correct answer is C
Explanation:
Free cash flow hypothesis is the one which is defined as the increase in the cash flow, which the agency costs of the firms or business with the opportunities of the poor investment. The management which exhausted the positive projects of NPV (Net Present Value), it proceeds in order to invest in negative NPV projects instead paying out the funds to the shareholders.
So, this hypothesis supports, in increasing or rising the portion of debt of the capital structure of the firm so that could increase the value of the firm.
5. Shifts of the aggregate supply curve Which of the following would properly be classified as a favorable supply shock? There is an increase in government spending. There is a technological improvement that allows firms to reduce their costs of production permanently. The world price of oil increases rapidly without warning and is expected to remain at the new high level for many years, making it more expensive for all firms to produce goods and services.
Answer:
There is a technological improvement that allows firms to reduce their costs of production permanently
Explanation:
A favourable supply shock refers to an event that increases supply.
A technological improvement which reduces cost of production is a positive occurrence because supply can increase as cost of production falls.
An increase in the world price of oil is a negative supply shock because if increases cost of production and supply falls as a result.
I hope my answer helps you
A favorable supply shock in the context of the aggregate supply curve would be a technological improvement that allows firms to reduce their costs of production permanently, resulting in a rightward shift of the curve.
Explanation:The question pertains to shifts in the aggregate supply curve and what factors could lead to a favorable supply shock. When we consider the scenarios provided, the one that would be classified as a favorable supply shock is technological improvement that allows firms to permanently reduce their costs of production. A technological advancement can lead to an increase in supply, which is depicted as a shift to the right of the aggregate supply curve. This shift indicates that for any given price level, the economy can produce and supply more goods and services. Conversely, an increase in government spending typically affects aggregate demand, not supply, and an increase in the world price of oil represents an adverse supply shock, causing the aggregate supply curve to shift left, reflecting higher production costs and a decrease in supply.
internal control of cash receipts , Jodi rostad works at the drive-through window of mamma's burgers. Occasionally, when a drive-through customer orders, jodi fills the order and pockets the customer's money. she does not ring up the order on the cash register. If mamma's burgers cannot hire more people to prevent this theft, the most effective internal control to implement would be:
Answer:
To implement and advertise a policy that any customer who does not receive a reciept is entitled to a free burger.
Explanation:
Internal control is the process by which an organisation's objectives are met by ensuring efficiency of operational procedures, reliable financial reporting, and compliance with regulations and policies.
The normal procedure in Mamma's burgers is for Jodi to ring up customer orders on the cash register. Since she is taking the money and pocketing it occasionally, the best internal control policy is to advertise that any customer who did not receive a receipt will be entitled to a free burger.
This will give the customers incentive to report cases where reciepts are not given. The measure will act as a deterrent to Jodi.