Answer:
Teal Mountain Corp.
1. Entries to record sales and collections during the period:
Debit Accounts Receivable $930,000
Credit Sales Revenue $930,000
To record credit sales.
Debit Cash Account $912,000
Credit Accounts Receivable $912,000
To record cash collections.
2. Entries to record recovery of the uncollectible account:
Debit Cash Account $2,200
Credit Allowance for doubtful accounts $2,200
To record uncollectible previously written off
3. Ending balance in Accounts Receivable and unadjusted balance in Allowance for Doubtful Account:
Accounts Receivable
Beginning balance $143,000
Credit Sales 930,000
Collections -912,000
Write-offs - 6,400
Balance $154,600
Allowance for Doubtful Accounts (Unadjusted)
Beginning balance $11,340
Uncollectible written off -6,400
Uncollectible collections 2,200
Balance (unadjusted) $2,740
4. Entry to record bad debt expense for the period:
Debit Bad Expense $6,536
Credit Allowance for Doubtful Accounts $6,536
To bring the balance to $9,276.
5. Adjusted ending balance in Allowance for Doubtful Accounts = $9,276
Explanation:
6% of accounts receivable = $154,600 x 6% = $9,276
Ned went to the supermarket to buy bread and ice cream, While he was in the
checkout line, he added a candy bar and some chewing gum to his shopping
cart. Which two products were impulse purchases?
A. The bread and ice cream
B. The candy bar and chewing gum
C. The candy bar and ice cream
D. The bread and chewing gum
Answer:
An impulse purchase is an item that was bought, but not previously planned. In Ned's example, he did not plan to buy a candy bar and the chewing gum. Thus, they are impulse purchases.
The correct answer is B.
The Dodd-Frank Wallstreet Reform and Consumer Protection Act evolved from the mortgage industry meltdown, which was the consequence of deceptive behavior of professionals on Wall Street and uninformed consumers who risked too much and purchased homes whose future monthly payments were more than they could afford. The agency that was created to provide consumers with accurate information so they can make informed decisions about loans and other financial instruments is known as ___________________.
Answer:
Consumer Financial Protection Bureau (CFPB)
Explanation:
The Consumer Financial Protection Bureau (CFPB) was created in 2010 in response to the Great Recession. Its creation was authorized by the Dodd-Frank Act.
Its main duties include supervising banks, lenders, debt collection agencies, credit reporting agencies, and other non-bank entities related to credits and debts. One of its main goals is to make information about credits more clear to ordinary customers, specially credit cards and mortgages. That should help customers understand their rights and responsibilities better.
What are Google’s key policies and actions that help it reduce its environmental footprint? How does the company integrate the idea of creating a "better web that’s better for the environment" with its strategies for creating profit and value. How do these initiatives help build competitive advantage for Google?
Explanation:
Google is a multinational that provides a range of online products and services, such as ads, search engines and cloud computing.
As one of the largest companies in the world, Google has a responsibility to attest to important values for today's society, such as sustainability.
The company develops several ecological programs that use resources to support renewable energy, in addition to reducing the use of carbon, which makes sustainability one of the essential prerequisites for the company's operations.
These good environmental protection practices bring several competitive benefits to Google, as the company becomes better positioned with consumers and investors, which suggests a gain in greater market share and reliability.
Orchard Fresh, Inc., purchases apples from local orchards and sorts them into four categories. Grade A are large blemish-free apples that can be sold to gourmet fruit sellers. Grade B apples are smaller and may be slightly out of proportion. These are packed in boxes and sold to grocery stores. Apples for slices are even smaller than Grade B apples and have blemishes. Apples for applesauce are of lower grade than apples for slices, yet still suitable for canning. Information on a recent purchase of 21,000 pounds of apples is as follows: Grades Pounds Grade A 1,890 Grade B 5,250 Slices 8,400 Applesauce 5,460 Total 21,000 Total joint cost is $17,850. Required: 1. Allocate the joint cost to the four grades of apples using the physical units method. Joint Cost Grades Allocation Grade A $ Grade B Slices Applesauce Total $ 2. Allocate the joint cost to the four grades of apples by finding the average joint cost per pound and multiplying it by the number of pounds in the grade. Round the average cost answer to the nearest cent. Average cost
Answer and Explanation:
According to the scenario, computation of the given data are as follow:-
1. Allocate the joint cost by using the physical unit method
Particular Allocation of physical unit Allocated joint cost ($)
Grade A $17,850 × 1,890 ÷ 21,000 1606.5
Grade B $17,850 × 5,250 ÷ 21,000 4462.5
Slices $17,850 × 8,400 ÷ 21,000 7,140
Applesauce $17,850 × 5,460 ÷ 21,000 4,641
Total 17,850
Allocated Joint Cost = Total Joint Cost × Pounds Grades ÷ Total Pounds Grades
2. Allocate the joint cost by using multiplying method:-
Average Joint Cost Per Pound is
= Total Joint Cost ÷ Total Pounds Grades
= $17,850 ÷ 21,000
= 0.85
Allocated joint cost = Average Joint Cost Per Pound × Pounds Grades
Particular Allocation of average cost Allocated joint cost
Grade A 0.85 × 1,890 1606.5
Grade B 0.85 × 5,250 4462.5
Slices 0.85 × 8,400 7,140
Applesauce 0.85 × 5,460 4,641
Total 17,850
Use the following information for the Quick Study below.
[The following information applies to the questions displayed below.]
Nix’It Company’s ledger on July 31, its fiscal year-end, includes the following selected accounts that have normal balances (Nix’It uses the perpetual inventory system).
Merchandise inventory $ 45,300 Sales returns and allowances $ 5,000
T. Nix, Capital 130,300 Cost of goods sold 109,500
T. Nix, Withdrawals 7,000 Depreciation expense 11,800
Sales 162,100 Salaries expense 40,000
Sales discounts 4,400 Miscellaneous expenses 5,000
A physical count of its July 31 year-end inventory discloses that the cost of the merchandise inventory still available is $43,400.
Answer:
Nix’It Company’s Journal entries
July 31
Dr Sales 162,100
Cr Incomes summary 162,100
(To close sales revenue to income summary recorded)
July 31
Dr Income summary 175,600
Cr Sales returns and allowances $ 5,000
Cr Cost of goods sold 109,600
Cr Depreciation expense 11,800
Cr Salaries expense 40,000
Cr Sales discounts 4,400
Cr Miscellaneous expenses 5,000
(To close expenses account recored)
Explanation:
Cost of goods sold+( Merchandise inventory still available-Merchandise inventory)
109,500+(45,400-45,300)
=109,500+100
=109,600
Mack's Bar sent Olive Outlet an order for 200 cases of olives to be shipped "as soon as possible." The day Olive Outlet receives Mack's order, it does not have 200 cases of olives in stock, so it sends Mack's Bar 140 cases of olives and 60 cases of onions. Olive Outlet notifies Mack's Bar that they are shipping the onions in lieu of olives. Later that day, Mack's Bar phones Olive Outlet and tries to revoke the offer. According to the Uniform Commercial Code (UCC), which of the following statements holds true to this situation?
A. Olive Outlet has accepted and breached the contract.
B. Mack's Bar must reject the shipment as the goods are nonconforming.
C. Mack's Bar must accept the shipment as they were notified.
D. Olive Outlet's shipment is considered a counteroffer.
business-law
Answer:
D) Olive Outlet's shipment is considered a counteroffer.
Explanation:
Depending on how Mack reacts to Olive's shipment, this can be considered either:
A. Olive Outlet has accepted and breached the contract. D. Olive Outlet's shipment is considered a counteroffer.Since Mack simply decided to reject Olive's shipment and revoke their initial offer, Olive's actions would be considered a counter offer. Olive did not have to accept Mack's offer in first place since an order to promptly ship goods invites the seller to ship the goods promptly or promise to do so as soon as possible. Olive did not have to ship the goods, since no contract was made.
Since Olive decided to ship other goods, it can be considered a counter offer which Mack is free to accept or reject. Since he chose to reject it, there is nothing Olive can do about it.
For the year ending December 31, 2020, Monty Corp. reports net income $130,000 and cash dividends $81,000. Determine the balance in retained earnings at December 31 assuming the balance in retained earnings on January 1, 2020, was $215,000. (List items that increase retained earnings first.)
Answer:
The balance in retained earnings at December 31 is $264,000.00
Explanation:
The balance in retained earnings at December 31 can be computed using the below ending retained earnings formula:
ending retained earnings=beginning retained earnings+net income-dividends
beginning retained earnings was the opening balance of retained earnings at January 1 2020 which was $215,000
net income for the year is $130,000
dividends of $81,000 were paid
ending retained earnings=$215,000+$130,000-$81,000=$ 264,000.00
For higher levels of management, responsibility accounting reports a.contain about the same level of detail as reports for lower levels of management b.are more detailed than for lower levels of management c.are rarely provided or reviewed d.are more summarized than for lower levels of management
Answer:
d. are more summarized than for lower levels of management
Explanation:
This report is generally explained to be a rundown of a company's budget and also expenditure and it is comprised also of different operations by higher levels of the company's management. In as much as it gives reports and details of the lower part of the company, it is generally explained to be more summarized for higher management levels than for lower levels of management. In its bid to assist and control the company's head or responsibility units, it gives headway to staff care/welfare and also steady overview of benefits to staffs.
Vertical integration is: a. A firm's ownership of vertically related activities b. A firm's control over its input sources and the distribution of its output c. A firm establishing close relationships with its suppliers and its buyers d. A firm's acquisition of a supplier or one of its buyers
Answer:
A firm's ownership of vertically related activities
Explanation:
As we know that
There are two types of integration i.e horizontal and vertical
The horizontal integration is the integration in which two or more firms amalgamate dealing in the same type of business i.e their products and the level of production is same
While on the other hand the vertical integration is the integration in which the one firm acquired or purchased another firm dealing in different stages but the production level remains the same
Hence, the first option is correct
magine that the current owner of the land in the previous exercise was willing to sell the land for $2 million. Assuming this amount equaled the social opportunity cost of the land, calculate the net benefits if the county were to purchase the land as a permanent wildlife refuge. In making these calculations, first assume a zero annual growth rate in the $110,000 of annual real benefits; then assume that these benefits grow at a rate of 2 percent per year.
Answer:
$1,666,667
Explanation:
Let assume that the annual growth rate is Zero
PV = ($110,000)/(.05)
= $2,200,000
NPV= $2,200,000 - $2,000,000
= $200,000
Let assume that the benefit growth rate is 2%
PV = ($110,000)/(.05-.02)
=$110,000/0.03
= $3,666,667
NPV=
$3,666,667 - $2,000,000
= $1,666,667
Naida Baronowski is an American fashion designer who has a design firm in Chicago. Naida has been successful in the U.S. and wants to expand her operation overseas. She hopes to open shops in Paris, Milan, Madrid, Rome, Vienna, and Moscow in the next several years. Naida is unfamiliar with foreign operations. She comes to you, her attorney, for advice about how she should pursue her goal of becoming an international fashion company.
If Naida keeps her Joliet plant, and ships her clothes from the U.S. to Paris, Madrid, and other cities, she may be subject, in the U.S., to:
a. import restrictions
b. tariff controls
c. export regulations
d. ad valorem taxes
e. licensing fees
Naida will need to be bound by certain export regulations if she wishes to ship her own clothes abroad.
Naida will also be compliant by the import regulations of the regions she is shipping to, which may or may not be subject to a few restrictions .
There are various regulations, policies and restrictions upon shipping to outer purview of US and they shall abide upon her by laws .Not only US , the regions she is exporting to also have certain more restrictions and taxes and duties,if any, will be applicable to her.There shall be additional policies relating to disclosure of items shipped and blacklisted items will not be able to be shipped.Hence the correct option is C and Naida will be subject to export regulations in the US .
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On November 1, 2017, Rodgers Enterprises sold merchandise with a cost of $7,000 for $25,000, FOB destination, with payment terms of 2/10, n/40. The company paid transportation costs of $100. Customer returns on this sale were $5,000 (with a cost of $2,500). The merchandise was returned on November 6. The company received the payment for the balance amount on November 10, 2017. Calculate the net sales revenue. Group of answer choices $19,600 $20,000 $4,500 $20,100
Answer:
The net sales revenue is $19,600
Explanation:
In order to calculate the net sales revenue we would have to make the following calculation:
Net Sales Revenue=Sales Revenue-Sales Returns and Allowances-Sales Discounts
Sales Revenue=$25,000
Sales Returns and Allowances= $5,000
Sales Discounts [($25,000-$5,000)*2%]= $400
Net Sales Revenue=$25,000-$5,000 -$400
Net Sales Revenue=$19,600
The net sales revenue is $19,600
Wisdom Toys has budgeted sales and production over the next quarter as follows: Unit Sales Production September 43,000 44,400 October 50,000 52,800 November 64,000 61,200 The company requires that 20% of the next month’s sales in units are on hand at the end of each month. December sales are expected to be 50,000 units. How many video games are in inventory at October 31?
Answer:
$12,800
Explanation:
This can be calculated as follows:
November sales in unit = 64,000
Since Wisdom Toys requires that 20% of the next month’s sales in units are on hand at the end of each month, we have:
Number of video games in inventory at October 31 = November sales in unit * 20% = 64,000 * 20% = 12,800
Therefore, 12,800 video games in inventory at October 31.
On March 31 a company needed to estimate its ending inventory to prepare its first quarter financial statements. The following information is available: Beginning inventory, January 1: $4,700 Net sales: $76,000 Net purchases: $74,000 The company's gross margin ratio is 20%. Using the gross profit method, the estimated ending inventory value would be:
Answer:
The estimated ending inventory by the gross profit method is $19,900
Explanation:
In order to calculate the estimated ending inventory value we would have to calculate first the following:
Step 1- Calculating Gross profit:
Gross profit ratio = Gross profit/ Sales
20% = Gross profit/ $76,000
Gross profit = $76,000 x 20%
Gross profit = $76,000 x 20%
Gross profit = $15,200
Step 2- Calculating Cost of Goods sold (COGS):
Sales - COGS = Gross profit
$76,000 - COGS = $15,200
COGS = $76,000 - $15,200
COGS = $60,800
Step 3- Calculating Ending Inventory:
COGS = Beginning inventory + Inventory purchases - Ending inventory
$60,800 = $4,700 + $76,000 - Ending inventory
$60,800 = $80,700 - Ending inventory
Ending inventory = $80,700 -$60,800
Ending inventory = $19,900
Therefore, the estimated ending inventory by the gross profit method is $19,900.
Kingsport Containers Company makes a single product that is subject to wide seasonal variations in demand. The company uses a job-order costing system and computes plantwide predetermined overhead rates on a quarterly basis using the number of units to be produced as the allocation base. Its estimated costs, by quarter, for the coming year are given below:QuarterFirst Second Third FourthDirect materials $ 320,000 $ 160,000 $ 80,000 $ 240,000Direct labor 160,000 80,000 40,000 120,000Manufacturing overhead 230,000 206,000 194,000 ?Total manufacturing costs (a) $ 710,000 $ 446,000 $ 314,000 $ ?Number of units to be produced (b) 160,000 80,000 40,000 120,000Estimated unit product cost (a) ÷ (b) $ 4.44 $ 5.58 $ 7.85 $ ?Management finds the variation in quarterly unit product costs to be confusing and difficult to work with. It has been suggested that the problem lies with manufacturing overhead because it is the largest element of total manufacturing cost. Accordingly, you have been asked to find a more appropriate way of assigning manufacturing overhead cost to units of product.Required:1. Assuming the estimated variable manufacturing overhead cost per unit is $0.30, what must be the estimated total fixed manufacturing overhead cost per quarter?2. Assuming the assumptions about cost behavior from the first three quarters hold constant, what is the estimated unit product cost for the fourth quarter?3. What is causing the estimated unit product cost to fluctuate from one quarter to the next?4. Assuming the company computes one predetermined overhead rate for the year rather than computing quarterly overhead rates, calculate the unit product cost for all units produced during the year.
Answer:
1. Assuming the estimated variable manufacturing overhead cost per unit is $0.30, what must be the estimated total fixed manufacturing overhead cost per quarter?
$182,0002. Assuming the assumptions about cost behavior from the first three quarters hold constant, what is the estimated unit product cost for the fourth quarter?
$4.80 per unit3. What is causing the estimated unit product cost to fluctuate from one quarter to the next?
The total number of units produced varies a lot, ranging from 160,000 units during the first quarter to only 40,000 units in the third quarter. Since most manufacturing overhead costs are fixed, total costs during the quarters with a low level of production will be too high.4. Assuming the company computes one predetermined overhead rate for the year rather than computing quarterly overhead rates, calculate the unit product cost for all units produced during the year.
$5.12 per unitExplanation:
Quarter First Second Third Fourth
Direct materials $320,000 $160,000 $80,000 $240,000
Direct labor 160,000 80,000 40,000 120,000
variable overhead 48,000 24,000 12,000 36,000
fixed overhead 182,000 182,000 182,000 182,000
Man. overhead 230,000 206,000 194,000 216,000
Total costs (a) $710,000 $446,000 $314,000 $576,000
Number of units 160,000 80,000 40,000 120,000
to be produced (b)
Estimated unit $4.44 $5.58 $7.85 $4.80
product cost (a) ÷ (b)
total fixed manufacturing overhead = $182,000 x 4 = $728,000 / total number of units produced = $728,000 / 400,000 units = $1.82 per unit
so now the total variable overhead costs = $0.30 + $1.82 = $2.12 per unit
total costs per quarter:
Quarter First Second Third Fourth
Direct materials $320,000 $160,000 $80,000 $240,000
Direct labor 160,000 80,000 40,000 120,000
variable overhead 339,200 169,600 84,800 254,400
Total costs (a) $819,200 $409,600 $204,800 $614,400
Number of units 160,000 80,000 40,000 120,000
to be produced (b)
Estimated unit $5.12 $5.12 $5.12 $5.12
product cost (a) ÷ (b)
Seasonal demand refers to the variability in demand that most companies might anticipate because of outside events.
Seasonal demand may provide a number of challenges, and it frequently needs the assistance of experienced managers to help foresee and overcome challenging situations.
The calculations have been attached below.
1. Assuming a $0.30 per piece adjustable production administrative overhead, the total fixed overhead price for the quarter is $182,000
2. Assuming that the previous three quarterly' pricing projections remain true, the anticipated unit product cost for the fourth quarter is $4.80 per unit.
3. The exact reasons why the estimated unit product cost fluctuates from season to season:
The overall number of units produced fluctuates significantly, ranging from 160,000 in the first quarter to just 40,000 in the third. Because of the preponderance of manufacturing overhead expenditures is fixed, overall costs during a quarter with production losses will be too high.
4. Assuming that the business determines a single plant overhead rate rather than a quarter rate higher, the unit charge of creating for all units produced year-round is $5.12.
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The account Unrealized Gain (Loss) on Available-for-Sale Investments should be included on the a.statement of retained earnings b.balance sheet as an adjustment to stockholders' equity c.income statement as other revenue (expense) d.balance sheet as an adjustment to the asset account
Answer: b.balance sheet as an adjustment to stockholders' equity
Explanation:
Available-for-Sale Investments are investments by the company into other companies by means of owning their bonds or stocks. These bonds or stock are made available for selling and as such the company will not hold them to maturity.
For these types of instruments, the company will record the Unrealized Gains (losses) in Other Comprehensive Income. This is a part of the Equity Section of the balance sheet.
At the end of the period, the Unrealized Gains (losses) resulting from the Available for Sale Securities do not go to the income statement but rather are put into the Accumulated Other Comprehensive Income distinction in the Equity section of the balance sheet. You can find it right below the Retained Earnings line.
Answer:
b.balance sheet as an adjustment to stockholders' equity
Explanation:
Unrealised gain or loss is also called paper gain or loss. This is because an assets value appreciates or depreciates it is not recognised as an actual gain or loss till it is sold.
These items are recorded on accumulated other comprehensive income in the owner's section of the balance sheet.
However when the assets are to be sold in the short run it is called trading securities and are recorded on the income statement when they are sold
Profitability ratios profitability ratios in the analysis of the combined impact of liquidity ratios, asset management ratios, and debt management ratios on the operating performance of a firm. your boss has asked you to calculate the profitability ratios of st. mcstanky beer co. and make comments on its second-year performance as compared with its first-year performance. the following shows st. mcstanky beer co.’s income statement for the last two years. the company had assets of $8,225 million in the first year and $13,157 million in the second year. common equity was equal to $4,375 million in the first year, and the company distributed 100% of its earnings out as dividends during the first and the second years. in addition, the firm did not issue new stock during either year.St. McStanky Beer Co. Income Statement For the Year Ending on December 31 (Millions of dollars) Year 2 Year 1 Net Sales 4,445 3,500 Operating costs except depreciation and amortization 1,855 1,723 Depreciation and amortization 222 140 Total Operating Costs 2,077 1,863 Operating Income (or EBIT) 2,368 1,637 Less: Interest 237 213 Earnings before taxes (EBT) 2,131 1,424 Less: Taxes (25%) 533 356 Net Income 1,598 1,068calculate the profitability ratios of st. mcstanky beer co. in the following table. convert all calculations to a percentage rounded to two decimal places.
Answer:
Details Year 2 Year 1
Operating profit margin 53.27% 46.77%
Net income margin 35.95% 30.51%
Return on total assets 12.51% 12.98%
Return on common equity 36.53% 24.41%
Comments:
1. St. McStanky Beer Co. income generation from operation improved in year 2 by 6.50% as it increased to 53.27% in Year 2 from 46.77% in Year 1.
2. St. McStanky Beer Co. net income generation improved in year by 5.44% as it increased to 35.95% in Year 2 from 30.51% in Year 1.
3. The assets of St. McStanky Beer Co. are less profitable in generating revenue in year 2 as it decreased by 0.84% to 12.51% in Year 2 from 12.98% in Year 1.
4. St. McStanky Beer Co. earns more net income per investment dollar as it returns on common equity improved by 12.11% to 36.53% in Year 2 from 24.41% in Year 1.
Explanation:
The profitability ratios are calculated as follows:
a. Operating profit margin
Operating margin = Operating Income / Net Sales
Year 2 Operating margin = 2,368 / 4,445 = 0.5327, or 53.27%
Year 1 Operating margin = 1,637 / 3,500 = 0.4677, or 46.77%
b. Net income margin
Net income margin = Net income / Net Sales
Year 2 Net income margin = 1,598 / 4,445 = 0.3595, or 35.95%
Year 1 Net income margin = 1,068 / 3,500 = 0.3051, or 30.51%
c. Return on total assets
Return on total assets = Net income / Total assets
Year 2 Return on total assets = 1,598 / 13,157 = 0.1215, or 12.15%
Year 1 Return on total assets = 1,068 / 8,225 = 0.1298, or 12.98%
d. Return on common equity
Return on common equity = Net income / Common equity
Since the firm did not issue new stock during either year, we use the same common equity for the two years as follows:
Year 2 Return on common equity = 1,598 / 4,375 = 0.3653, or 36.53%
Year 1 Return on common equity = 1,068 / 4,375 = 0.2441, or 24.41%
If your company’s product is dry soup mixes and canned soups, would a multidomestic strategy, a transnational strategy, or a global strategy seem to be more advisable? Multiple Choice transnational strategy since processed food companies compete in two or more countries simultaneously multidomestic strategy since customer needs and preferences vary greatly in the soup industry A transnational approach is appropriate. Country-to-country customization to accommodate differences in taste preferences is necessary. multidomestic as local market conditions preclude a uniform, coordinated worldwide strategic approach global strategy since local managers need little latitude in decision-making
Answer:
A transnational approach is appropriate. Country-to-country customization to accommodate differences in taste preferences is necessary.
Explanation:
When selling a product in the international market place between different countries or communities, three approaches can be used.
The transnational, multidomestic and the global strategy.
Global strategy is when a product is not modified but rather same product and service is sold to different countries.
Transnational approach involves modification of the product to meet a countrie's peculiar needs. It is more personalised.
In this scenario the transnational approach is better because not everyone will have same preference of soup.
Customising soups to meet varied needs will make it sell more.
Champion Contractors completed the following transactions and events involving the purchase and operation of equipment in its business.
2017
Jan. 1 Paid $287,600 cash plus $11,500 in sales tax and $1,500 in transportation (FOB shipping point) for a new loader. The loader is estimated to have a four-year life and a $20,600 salvage value. Loader costs are recorded in the Equipment account.
Jan. 3 Paid $4,800 to enclose the cab and install air-conditioning in the loader to enable operations under harsher conditions. This increased the estimated salvage value of the loader by another $1,400.
Dec. 31 Recorded annual straight-line depreciation on the loader.
2018:
Jan. 1 Paid $5,400 to overhaul the loader's engine, which increased the loader's estimated useful life by two years.
Feb. 17 Paid $820 to repair the loader after the operator backed it into a tree.
Dec. 31 Recorded annual straight-line depreciation on the loader.
Required:
Prepare journal entries to record these transactions and events.
Answer and Explanation:
The Journal entries are shown below:-
Jan 1
Equipment Dr, $300,600 ($287,600 + $11,500 + $1,500)
To Cash $300,600
(Being equipment is recorded)
Jan 3
Equipment Dr, $4,800
To Cash $4,800
(Being equipment is recorded)
Dec 31
Depreciation expenses-equipment Dr, $70,850
($300,600 + $4,800 - $20,600 - $1,400) ÷ 4
To Accumulated depreciation-equiment $70,850
(Being depreciation expense is recorded)
Year 2018
Jan 1
Equiment Dr, $5,400
To Cash $5,400
(Being equipment is recorded)
Feb 17
Repair expenses Dr, $820
To Cash $820
(Being repair expense is recorded)
Dec 31
Depreciation expenses-equipment Dr, $43,590
To Accumulated depreciation-equiment $43,590
(Being depreciation expense is recorded)
For Computing the Depreciation year 2018
Particulars Amount
Jan 1 2017 Cost of loader ($287,600 + $11,500 + $1,500) $300,600
Add cost of air conditioning installation on
Jan 3 2017 $4,800
Book value of depreciation for year 2017 $305,400
Less: Depriciation of year 2017
($305,400 - $20,600 - $1,400) ÷ 4 $70,850
After depreciation the book value for year 2017 $234,550
Add: Cost to overhaul the loader's engine $5,400
Before depreciation the book value of 2018 $239,950
Depreciation of year 2018
($239,950 - $22,000) ÷ (4 - 2 + 1) $43,590
A bond currently has a price of $1,050. The yield on the bond is 7%. If the yield increases 28 basis points, the price of the bond will go down to $1,027. The duration of this bond is ____ years.
Answer:
7.82 years
Explanation:
Solution
Recall that:
The price of a bond is currently at = 1050
The yield on the bond = 7%
If the yield increases in 28 point basis, the bond price reduces to = $1027
Now,
We find out the bond duration
Thus,
The change in Price/Initial Price = - Duration * Yield change
=$1050 -$1027 = -23
-23/1050 = - Duration * 0.28%
So,
The duration = 23/(1050*0.28%) = 7.82
The bond duration is 7.82 years
The following balances appear on the books of Sarah Simmons Enterprises: Retained Earnings, $29,600; Dividends, $10,500; Income Summary, $0; Service Revenue, $24,500; Salaries Expense, $6,200; Rent Expense, $3,500; and Advertising Expense, $2,000. All accounts have normal balances.Requirements1. Open a T-account for each account, and insert its adjusted balance as given (denote as Adj. Bal.) at December 31.2. Post the closing entries to the accounts, denoting posted amounts as Clos.3. Compute the ending balance of Retained Earnings.
Answer:
A. T Account balance $19,100
B. $31,600
C.$31,600
Explanation:
Sarah Simmons Enterprises
A.
T-account account
Dr Cr
Dr C/o 10500 Cr Beginning balance 29,600
Cr C/o 10500
Cr Balance 19,100
b.
Simmons enterprise retained earnings ending balance will be:
Retained earnings 29,100
Less Dividends 10,500
Balance 19,100
Add (10,500+2,000) 12,500
Balance 31,600
C. Ending balance of Simmons, Capital will be 31,600 just as in ( b) where the retained earnings ending was 31,600
Sodium Inc. borrowed $175,000 on April 1. The note requires interest at 12% and principal to be paid in one year. How much interest is recognized for the period from April 1 to December 31?
Answer:
The amount of interest that is recognized for the period from April 1 to December 31 is $15,750
Explanation:
According to the given data we have the following:
interest=12%
From April 1 to December 31 we have 9 months
Sodium Inc. borrowed $175,000
Therefore, in order to calculate the amount of interest that is recognized for the period from April 1 to December 31 we would have to make the following calculation:
Interest for 9 months= $175,000 x 12% x 9 months / 12
Interest for 9 months=$15,750
The amount of interest that is recognized for the period from April 1 to December 31 is $15,750
Typical components in a claim are the claim, a rationale, a call to action, and a statement of goodwill. As you write claims, keep in mind that your goal is to have your claim honored. Focus on facts first and emotions second, if at all. Lay out a logical, reasonable, and professional explanation for your claim. Emotional claims are far more likely to be rejected. Also, remember that you will often work with the same people again and again. So, be polite and focus on the long-term working relationship.
Answer:
True.
Explanation:
These assumptions are true, as a claim can be described as a request for correction or compensation of errors.
Therefore, when writing a claim, it is necessary to focus on adopting a respectful communication with the recipient, who in the workplace will probably be someone that you establish a type of professional relationship, so it is ideal to maintain an ethical and direct posture, exposing all facts of your claim in a logical and non-emotional way, providing the necessary justifications for the claim, which should focus on action and resolution.
Pablo Management has two employees, each of whom earns $120 per day. They are paid on Fridays for work completed Monday through Friday of the same week. Near year-end, the two employees worked Monday, December 31, and Wednesday through Friday, January 2, 3, and 4. New Year’s Day (January 1) was an unpaid holiday. Prepare the year-end adjusting entry for wages expense and record payment of the employees’ wages on Friday, January 4.
Answer:
December 31:
To record accrued wages for one day : (2 workers × $120) =$240
January 4:
To record accrued and current wages.
Wages expenses = 2 workers × 3 days × $120 =$720
Cash =2 workers × 4 days ×$120= $960
Balance=$240
1.)December 31
Wages expenses $240
Wages payable $240
2.)January 4 General Journal
Wages payable $240 (Debit)
Wages expenses $720 (Credit)
Cash $960
If real GDP trends upward over time but experiences ups and downs in the short run. A period of declining real GDP, is known as:
a. an expansion
b. a recession
c. a business cycle
Small ups and downs in real GDP follow a consistent, predictable pattern.
a. True
b. False
Answer:
b. a recession
False
Explanation:
Gross domestic product is the sum of all final goods and services produced in an economy within a given period which is usually a year.
GDP calculated using the expenditure approach = Consumption spending + Investment spending by businesses + Government Spending + Net Export
Real GDP is GDP calculated excluding the effects of inflation.
A recession is defined as a period of negative economic growth. An economy is in recession when the GDP over two consecutive quarters is negative.
Trends in real GDP aren't predictable because factors affecting real GDP aren't predictable.
For example, an unforseen event can suddenly affect the economy and greatly depress either consumption or investment or government spending or even net export.
I hope my answer helps you
Steinberg Corporation and Dietrich Corporation are identical firms except that Dietrich is more levered. Both companies will remain in business for one more year. The companies' economists agree that the probability of the continuation of the current expansion is 80 percent for the next year and the probability of a recession is 20 percent. If the expansion continues, each firm will generate earnings before interest and taxes (EBIT) of $3.5 million. If a recession occurs, each firm will generate earnings before interest and taxes (EBIT) of $1.9 million. Steinberg's debt obligation requires the firm to pay $980,000 at the end of the year. Dietrich's debt obligation requires the firm to pay $2 million at the end of the year. Neither firm pays taxes. Assume a discount rate of 10 percent.
a. What is the value today of Steinberg's debt and equity?
b. What is the value today of Dietrich's debt and equity?
c. Steinberg’s CEO recently stated that Steinberg’s value should be higher than Dietrich’s because the company has less debt and therefore less bankruptcy risk. Do you agree or disagree with this statement?A. DisagreeB. Agree
Answer:
a. What is the value today of Steinberg's debt and equity?
$2,890,909b. What is the value today of Dietrich's debt and equity?
$2,890,909c. Steinberg’s CEO recently stated that Steinberg’s value should be higher than Dietrich’s because the company has less debt and therefore less bankruptcy risk. Do you agree or disagree with this statement?
A. Disagree: a company's value is determined by by its operating income (EBIT), not by there capital structure (M&M theory).Explanation:
economic expansion 80% chance, EBIT $3.5 million
economic recession 20% chance, EBIT $1.9 million
expected EBIT = (3.5 x 0.8) + (1.9 x 0.2) = $2.8 million + $0.38 million = $3.18 million
Steinberg's debt obligations $980,000 at the end of next year
Dietrich's debt obligations $2,000,000 at the end of next year
total company value = $3.18 million / (1 + 10%) = $2,890,909
Firm A and Firm B are the only two companies that sell mail-order DVD rental subscriptions. For several years, Firm A priced its subscriptions below average variable cost. Firm B tried to compete by also selling subscriptions below average variable cost, but went bankrupt and exited the market. Several months after Firm B exited the market, Firm A raised prices by 40 percent and is currently earning large, positive economic profits. Based only on this information, an argument can be made that:____________.
A. the mail-order DVD rental subscription market is a monopolistically competitive market.
B. Firm A engaged in predatory pricing.
C. Firm B must have made bad business decisions because it went bankrupt.
D. Firm B engaged in predatory pricing.
E. FirmA and Firm B must have had a collusive agreement
Answer:
B. Firm A engaged in predatory pricing.
Explanation:
Since Firm A and B are the only two companies that sell this good
Firm A decided to price its subscriptions below average variable cost that is it lowered it's prices which made Firm B to also lower it's own, but they went bankrupt and exited the market. Firm A then raised prices by 40% and is currently earning large, positive economic profits.
Based on this, Firm A engaged in predatory pricing.
Predatory pricing is a marketing or pricing strategy that has to do with lowering the cost of goods and services for a short-term, in order to make competitors lower their price, making them to go bankrupt in the process and thereby exiting the market.
Partial-Year Depreciation Equipment acquired at a cost of $105,000 has an estimated residual value of $12,000 and an estimated useful life of 10 years. It was placed into service on May 1 of the current fiscal year, which ends on December 31.A. Determine the depreciation for the current fiscal year and for the following fiscal year by the straight-line method.
Depreciation
Year 1 $6,200
Year 2 $9,300B. Determine the depreciation for the current fiscal year and for the following fiscal year by the double-declining-balance method.
Depreciation
Year 1 $
Year 2 $
Answer and Explanation:
A. The computation of he depreciation for the current fiscal year and for the following fiscal year using the straight-line method is shown below:-
= (Original cost - residual value) ÷ (estimated useful life)
= ($105,000 - $12,000) ÷ (10 years)
= $9,300
For the current year, the depreciation expense is
= $9,300 × 8 months ÷ 12 months
= $6,200
The 8 months are calculated from May 1 to December 31
And, for the following fiscal year , the depreciation expense is $9,300
B. The computation of depreciation for the current fiscal year and for the following fiscal year using the double-declining-balance method is shown below:-
But before that
Rate of depreciation under double declining depreciation = 2 × (1 ÷ Life) × 100
= 2 × (1 ÷ 10) × 100
= 20%
1st Year depreciation = Equipment cost × Rate of depreciation under double declining depreciation × Beginning may ÷ Ending December
= $105,000 × 20% × 8 ÷ 12
= $14,000
2nd year depreciation = Depreciation on $105,000 for the four months at 20%
= Equipment cost × Rate of depreciation under double declining depreciation × Remaining months ÷ Ending December
= $105,000 × 20% × 4 ÷ 12
= $7,000
and now we calculate the 20% on balance in machinery for 8 months.
Balance = Equipment cost - 1st Year depreciation - 2nd Year depreciation
= $105,000 - $14,000 - $7,000
= $84,000
Depreciation = Balance Rate of depreciation under double declining depreciation × Beginning may ÷ Ending December
= $84,000 × 20% × 8 ÷ 12
= $11,200
Total depreciation in year 2 = 2nd year depreciation + Depreciation
= $7,000 + $11,200
= $18,200
1. Based on the straight-line method, the Depreciation Expense for the current fiscal year is $6,200 ($9,300 x 8/12).
2. Based on the straight-line method, the Depreciation Expense for the following fiscal year is $9,300 ($93,000/10).
3. Based on the double-declining-balance method, the Depreciation Expense for the current fiscal year is $14,000.
4. Based on the double-declining-balance method, the Depreciation Expense for the following fiscal year is $18,200.
Data and Calculations:
Cost of equipment = $105,000
Estimated residual value = $12,000
Estimated useful life = 10 years
Date of put into use = May 1
Depreciable amount = $93,000 ($105,000 - $12,000)
Annual depreciation expense based on the straight-line method = $9,300 (93,000/10)
Double-declining=balance method:
Depreciation rate = 20% (100/10 x 2)
Depreciation for the first year = $14,000 ($105,000 x 20% x 8/12)
Reduced balance after the first year = $91,000 ($105,000 - $14,000)
Depreciation for the second year = $18,200 ($91,000 x 20%)
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Some company executives favor the idea of contract manufacturing using local players, whereas others feel a direct investment strategy would be better. What would most strengthen argument for direct investment?
Answer:
A.
Explanation:
A direct investment refers to an investment in a foreign business enterprise designed to acquire a controlling interest in this enterprise. Therefore based on the listed options, the one that would strengthen this the most would be that "The operation will be used as an export hub for South Asian markets." Since this will allow for the company to be able to handle all logistics processes in the new market and not have to depend on other companies, thus increasing their controlling interest in that market.
Expand Your Critical Thinking 24-2 (Part Level Submission)Ana Carillo and Associates is a medium-sized company located near a large metropolitan area in the Midwest. The company manufactures cabinets of mahogany, oak, and other fine woods for use in expensive homes, restaurants, and hotels. Although some of the work is custom, many of the cabinets are a standard size.One such non-custom model is called Luxury Base Frame. Normal production is 940 units. Each unit has a direct labor hour standard of 5 hours. Overhead is applied to production based on standard direct labor hours. During the most recent month, only 850 units were produced; 4,200 direct labor hours were allowed for standard production, but only 3,800 hours were used. Standard and actual overhead costs were as follows.ctual Standard (940 units) (850 units) Indirect materials Indirect labor (Fixed) Manufacturing supervisors salaries (Fixed) Manufacturing office employees salaries (Fixed) Engineering costs Computer costs Electricity (Fixed) Manufacturing building depreciation (Fixed) Machinery depreciation (Fixed) Trucks and forklift depreciation Small tools (Fixed) Insurance (Fixed) Property taxes $ 11,300 40,600 21,200 12,300 25,500 9,400 2,400 7,500 2,800 1,400 660 470 280 $135,810 $ 11,600 48,100 20,800 11,800 23,600 9,400 2,400 7,600 2,800 1,400 1,320 470 280 $141,570 Total X Your answer is incorrect. Try again. Determine the overhead application rate. (Round answer to 2 decimal places, e.g. 15.75.) Overhead application rate 28.90 per direct labor hour(a) Determine the overhead application rate. THE ANSWER IS NOT 28.90 (Round answer to 2 decimal places, e.g. 15.75.)(b) Determine how much overhead was applied to production.(c) Calculate the total overhead variance, controllable variance, and volume variance.
Answer:
total budgeted costs = $141,570
budgeted production = 1,000 units
standard rate = $141,570 / 1,000 = $141.57 per unit
total actual costs = $135,810
actual production = 850 units
actual rate = $135,810 / 850 = $159.78 per unit
total fixed overhead variance = actual overhead costs - budgeted overhead costs = $135,810 - $141,570 = -$5,760 favorable. The actual overhead expense was lower than budgeted.controllable variance = (actual rate - standard rate) x actual units = ($159.78 - $141.57) x 850 units = $15,478.50 unfavorable. The actual overhead rate was higher than the standard rate, that is why the variance is unfavorable (more money was spent than budgeted).volume variance = (standard activity - actual activity) x standard rate = (1,000 - 850) x $141.57 = 150 x $141.57 = $21,235.50 unfavorable. Less units where produced than budgeted, that is why the variance is unfavorable.