Answer:
B. The possibility of the $5,000 payoff is more valuable to me than the certain $2,500, I choose to flip a coin.
Explanation:
A risk neutral person is a person that is indifferent to risk. She doesn't consider risk when making an investment risk.
Because the possibility of earning $5000 is greater than earning $2500, a risk averse person would choose to toss a coin.
A risk neutral person contrasts with a risk averse person who avoids risk. A risk averse person would choose the $2500 because there's no risk .
I hope my answer helps you
Maris Brothers Inc. needs a cash disbursement schedule for the months of April, May, and June following information in its preparation.
Sales:
February = $483,000;
March $525,000;
April $542,000;
May $629,000;
June $657,000;
July $667,000
Purchase: Purchases are calculated as 55% of the next month's sales, 10% of purchases are made in cash, 45% of purchase are paid for 1 month after purchase and the remaining 45% of purchases are paid for 2 months after purchase.
Rent: The firm pays rent of $8,030 per month
Wages and salaries: Base wage and salary cost are fixed at $5,800 per month plus a variable cost of 6.8% of the current month's sales.
Taxes: A tax payment of $ $54,100 is due in June
Fixed asset outlays: New equipment costing $74,000 will be bought and paid for in April.
Interest payments: An interest payment of $30,400 is due in June.
Cash dividends: Dividends of $12,500 will be paid in April
Principal repayments and retirements: No principal repayments or retirements are due during these months.
An swer:
June $975,286
April $1,118,052
May $1,076,856
Explanation:
Maris Brothers Inc.Schedule of Projected Cash Disbursements
April May June
Purchases (0.55 x sales)
April $542,000 ×0.55= $298,100
May $629,000×0.55=$345,950
June $657,000×0.55=$361,350
Cash purchases (.10)
April $542,000 ×0.10= $54,200
May $629,000×0.10=$62,900
June $657,000×0.10=$65,700
Payments of A/PLagged 1 month (0.45)
April $542,000 ×0.45= $243,900
May $629,000×0.45=$283,050
June $657,000×0.45=$295,650
Lagged 2 months(0.45)
April $542,000 ×0.45= $243,900
May $629,000×0.45=$283,050
June $657,000×0.45=$295,650
Rent payments
April $8,030
May $8,030
June $8,030
Wages and salaries
April $542,000 ×0.068+5,800= $42,656
May $629,000×0.068+5,800=$48,572
June $657,000×0.068+5,800=$50,476
Tax Payments
June $54,100
Fixed-asset outlays
April $74,000
Interest payments
June $30,400
Cash dividend payments
April $12,500
Total Cash Disbursements
June
($298,100 +$54,200+$243,900+$243,900+$8,030+$42,656+$54,100+$30,400)
=$975,286
April
($345,950+$62,900+$283,050+$283,050+$8,030+$48,572+$74,000+$12,500)
=$1,118,052
May
($361,350+$65,700+$295,650+$295,650+8,030+$50,476)
=$1,076,856
Stoll Co.'s long-term available-for-sale portfolio at the start of this year consists of the following.
Available-for-Sale Securities Cost Fair Value
Company A bonds $534,100 $492,000
Company B notes 159,140 155,000
Company C bonds 662,400 642,140
Stoll enters into the following transactions involving its available-for-sale debt securities this year.
Jan. 29 Sold one-half of the Company B notes for $78,820.
July 6 Purchased bonds of Company X for $122,100.
Nov. 13 Purchased notes of Company Z for $267,300.
Dec. 9 Sold all of the bonds of Company A for $524,800.
The fair values at December 31 are B, $82,300; C, $603,800; X, $120,000; Z, $276,000; W, $382,500 and Y, $1,062,500
Required:
a. Determine the amount Stoll should report on its December 31, 2017, balance sheet for its long-term investments in available-for-sale securities.
b. Prepare any necessary December 31, 2017, adjusting entry to record the fair value adjustment for the long-term investments in available-for-sale securities.
c. Prepare any necessary December 31, 2017, adjusting entry to record the fair value adjustment for the long-term investments in available-for-sale securities.
Answer:
a. Determine the amount Stoll should report on its December 31, 2017, balance sheet for its long-term investments in available-for-sale securities.
Company B notes $82,300 Company C bonds $603,800Company X bonds $120,000Company Z notes $276,000b. (same as c.)Prepare any necessary December 31, 2017, adjusting entry to record the fair value adjustment for the long-term investments in available-for-sale securities.
Dr Company B notes 4,800 Cr Unrealized gain on Company B notes 4,800 (= $82,300 - $77,500)Dr Unrealized loss on Company C bonds 38,340 (= $603,800 - $642,140) Cr Company C bonds 38,340Dr Unrealized loss on Company X bonds 2,100 (= $120,000 - $122,100) Cr Company X bonds 2,100Dr Company Z notes 8,100 Cr Unrealized gain on Company Z notes 8,100 (= $276,000 - $267,300)Explanation:
beginning of the year cost fair value
Company A bonds $534,100 $492,000
Company B notes $159,140 $155,000
Company C bonds $662,400 $642,140
since available for sale assets must be recorded at fair value, we must assume that the company prepared the adjusting entries at the end of the previous year (unrealized gains or losses):
Jan. 29 Sold one-half of the Company B notes for $78,820.
Dr Cash 78,820
Cr Company B notes 77,500
Cr Gain on sale of Company B notes 1,320
July 6 Purchased bonds of Company X for $122,100.
Dr Company X bonds AFS 122,100
Cr Cash 122,100
Nov. 13 Purchased notes of Company Z for $267,300.
Dr Company Z bonds AFS 267,300
Cr Cash 267,300
Dec. 9 Sold all of the bonds of Company A for $524,800.
Dr Cash 524,800
Cr Company A notes 492,000
Cr Gain on sale of Company B notes 32,800
The Money Pit Mortgage Company is interested in monitoring the performance of the mortgage process. Fifteen samples of five completed mortgage transactions each were taken during a period when the process was believed to be in control. The times to complete the transactions were measured. The Money Pit Mortgage Company made some changes to the process and undertook a process capability study. The following data were obtained for 15 samples of size 5. Based on the individual observations, management estimated the process standard deviation to be 4.85 (days) for use in the process capability analysis. The lower and upper specification limits (in days) for the mortgage process times were 4 and 22.
Sample 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15
Mean 7 9 5 13 10 8 14 13 10 11 15 6 12 11 6
Range 8 12 3 10 9 7 7 14 13 10 5 5 11 9 10
Calculate the process capability index and the process capability ratio values?
Answer:
Process Capability Index = 0.412
Process Capability Ratio = 0.62
Explanation:
The Process Capability Index [tex]C_{pk}[/tex] is given by the formula:
[tex]C_{pk} = min[\frac{\bar{\bar{X}} - LSL}{3 \sigma} , \frac{USL - \bar{\bar{X}} }{3 \sigma}][/tex]
[tex]\bar{\bar{X}} = \frac{7+9+5+13+10+8+14+13+10+11+15+6+12+11+6}{15} \\\bar{\bar{X}} = 10[/tex]
Lower Limit, LSL = 4
Upper Limit, USL = 22
Standard Deviation, [tex]\sigma = 4.85[/tex]
[tex]C_{pk} = min[\frac{\bar{\bar{X}} - LSL}{3 \sigma} , \frac{USL - \bar{\bar{X}} }{3 \sigma}]\\C_{pk} = min[\frac{10 - 4}{3 * 4.85} , \frac{22 - 4 }{3 *4.85}]\\C_{pk} = min[0.412, 0.825]\\C_{pk} = 0.412[/tex]
Process capability ratio:
[tex]C_p = \frac{USL - LSL}{3 \sigma}[/tex]
[tex]C_{p} = \frac{22-4}{6*4.85} \\C_{p} = 0.62[/tex]
a benefit in receiving a higher education that comes from outside of yourself such as greater job opportunities would be called
Answer:
Motivational benefit
Explanation:
Remember, anything that brings you a certain level of push towards an expected end is a motivation. For example, having greater job opportunities sets one apart from others, which may lead to a better standard of living which creates a motivational benefit
Thus, we notice may notice many parents encouraging/motivating higher education for their children because of the perceived benefits they believe in so much.
Show the effect of each of the following events on the market for labor in the computer manufacturing industry.
A. Congress buys personal computers for all U.S. college students.
B. More college students major in engineering and computer science.
C. Computer firms build new manufacturing plants.
Show the effect of each of the following events on the market for labor in the computer manufacturing industry: More college students major in engineering and computer science. Thus option (B) is correct.
What is marketing?The marketing refers to all activities or techniques a company does for promoting and selling products or services to the consumers or customers in the market.
The marketing makes use of the "marketing mix," also known as the four Ps—product, price, place, and promotion.
Marketing can be done through offline method(word-of-mouth) or online method( mail). The traditional marketing is still prevalent but now digital marketing now companies to engage in e-mail, social media, affiliate, and content marketing strategies.
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JBC Corp. declared a dividend of $2 per share, which was an increase of 25% from the prior year, yet JBC Corp. stock declined by 3% the day of the announcement. RBG Corp. declared a dividend of $2 per share, which was the same as the prior year, and its stock increased in value by 2% on the day of the announcement. These events could be most readily explained by the
Answer:
Expectations theory
Explanation:
From the fundamental analyst perspective; Expectation theory presumably focuses on predicting what short-term interest rates will eventually results to over the course of time in the future based on current long-term interest rates.
Expectation theory describes that an investor who buys instruments accumulate the equal amount of interest by investing into two consecutive one-year bond investments versus investing in one two-year bond today.
The following data were taken from the financial statements of Gates Inc. for the current fiscal year. Property, plant, and equipment (net) $1,412,700 Liabilities: Current liabilities $165,000 Note payable, 6%, due in 15 years 831,000 Total liabilities $996,000 Stockholders' equity: Preferred $4 stock, $100 par (no change during year) $1,494,000 Common stock, $10 par (no change during year) 1,494,000 Retained earnings: Balance, beginning of year $1,594,000 Net income 601,000 $2,195,000 Preferred dividends $59,760 Common dividends 143,240 203,000 Balance, end of year 1,992,000 Total stockholders' equity $4,980,000 Sales $27,384,550 Interest expense $49,860 Assuming that total assets were $5,677,000 at the beginning of the current fiscal year, determine the following. When required, round to one decimal place.
Answer:
a. Ratio of fixed assets to long-term liabilities = fixed assets / long term liabilities = $1,412,700 / $831,000 = 1.7
b. Ratio of liabilities to stockholders' equity = liabilities / equity = $996,000 / $4,980,000 = 0.2
c. Asset turnover = total revenue / average assets = $27,384,550 / [($5,976,000 + $5,677,000)/2] = 4.7
d. Return on total assets = (net income + interest expense) / average assets = ($601,000 + $49,860) / [($5,976,000 + $5,677,000)/2] = 11.2%
e. Return on stockholders’ equity = net income / average stockholders' equity = $601,000 / {[($1,594,000 + $1,494,000 + $1,494,000) + $4,980,000] / 2} = $601,000 / {($4,582,000 + $4,980,000) / 2} = $601,000 / $4,781,000 = 12.57%
f. Return on common stockholders' equity = (net income - preferred dividends) / average common stock = ($601,000 - $59,760) / $1,494,000 = 36.2%
Mark was terminated by his company because of his poor client management skills, which resulted in the company losing one of its major clients. Mark's termination best exemplifies _____.
Answer:
Involuntary turnover
Explanation:
Since Mark was terminated by the company, this exemplifies Involuntary turnover. Involuntary turnover is one type of turnover that occurs when an employee is terminated from a job position.
It is involuntary because Mark was laid off on account of poor client management which is bad for the company. He didn't not leave the position voluntarily.
Suppose Torche Corporation has the following revenue and expenses for 2019:
Revenues of $9,100,000
Cost of Goods Sold of $2,730,000
Depreciation Expenses of $500,000
Income Taxes of $1,672,000
Interest Expenses of $180,000
Other Expenses of $600,000
Sales, General, & Administrative Expenses of $910,000
Required:
a. Create an income statement with amounts in thousands.
b. What is the value of Net Income?
Answer:
The value of net income is $3,008,000
Explanation:
Income statement:
Revenues= 9,100
COGS= (2,730)
Gross profit= 6,370
Other Expenses= (600)
Sales, General, & Administrative Expenses= (910)
Depreciation Expenses= (500)
Interest Expenses= (180)
EBT= 4,180
Tax= (1,672)
Depreciation= 500
Net income= 3,008
The value of net income is $3,008,000
The information below pertains to Barkley Company for 2015.
Net income for the year $1,160,000
7% convertible bonds issued at par ($1,000 per bond); each bond is convertible into 30 shares of common stock 2,010,000
6% convertible, cumulative preferred stock,
$100 par value; each share is convertible into 3 shares of common stock 4,080,000
Common stock, $10 par value 5,800,000
Tax rate for 2021 20%
Average market price of common stock $25 per share
There were no changes during 2021 in the number of common shares, preferred shares, or convertible bonds outstanding. There is no treasury stock. The company also has common stock options (granted in a prior year) to purchase 82,100 shares of common stock at $20 per share.
(a) Compute basic earnings per share for 2015.
(b) Compute diluted earnings per share for 2015.
Answer:
a. $1.38
b. anti-dilutive.
Explanation:
Basic Earnings Per Share = Earnings Attributable to Holders of Common Stock / Weighted Average Number of Common Stock Holders
Earnings Attributable to Holders of Common Stock Calculation :
Net income for the year $1,160,000
Less Bond Interest after tax ($2,010,000 × 7% × 80%) ($112,560)
Less Preference Stock dividend ($4,080,000 × 6%) ($244,800)
Earnings Attributable to Holders of Common Stock $802,640
Weighted Average Number of Common Stock Holders Calculation :
Common Stock (5,800,000 / $10) 580,000
Weighted Average Number of Common Stock Holders 580,000
Basic Earnings Per Share = $802,640 / 580,000
= $1.38
Diluted Earnings Per Share = Adjusted Earnings Attributable to Holders of Common Stock / Adjusted Weighted Average Number of Common Stock Holders
Adjusted Earnings Attributable to Holders of Common Stock Calculation :
Earnings Attributable to Holders of Common Stock $802,640
Add Back Bond Interest after tax ($2,010,000 × 7% × 80%) $112,560
Add Back Preference Stock dividend ($4,080,000 × 6%) $244,800
Adjusted Earnings Attributable to Holders of Common Stock $1,160,000
Adjusted Weighted Average Number of Common Stock Holders Calculation
Weighted Average Number of Common Stock Holders 580,000
Add Convertible Bonds ($2,010,000 / $1,000 × 30) 60,000
Add Convertible Preference Shares ($4,080,000/$100 ×3) 122,400
Less Common Stock Options (82,100)
Adjusted Weighted Average Number of Common Stock Holders 680,300
Diluted Earnings Per Share = $1,160,000 / 680,300
= $ 1.70
Conclusion : Convertible Bonds, Convertible Preference Shares and Common Stock Options are anti-dilutive.
The journal entry to record the purchase of materials on account in process cost accounting is:___________ 1. debit Raw Materials Inventory and credit Accounts Payable 2. debit Production Materials, and credit Accounts Payable 3. debit Accounts Payable and credit Raw Materials Inventory 4. debit Accounts Payable and credit Production Materials
Answer:
The correct option is the first one which is debit Raw Materials Inventory and credit Accounts Payable
Explanation:
The raw materials inventory which is the receiving account for the raw materials received into the factory is debited since receiving account or increase in asset account is naturally a debit entry according to the golden rule of double entry.
The credit goes to the accounts payable as obligation owed by the company to the supplier of the raw materials payable at a later date
Wald Inc.'s bonds currently sell for $1,120 and have a par value of $1,000. They pay an $85 annual coupon and have a 20-year maturity, but they can be called in 5 years at $1,050. What return would an investor most likely earn, if interest rates remain at current levels for the foreseeable future
Answer:
A. 7.08%
B. 6.49%
C. 5.95%
D. 6.71%
E. 7.34%
The correct option is B,6.49%
Explanation:
The return that the investor would earn is the yield to maturity of the bond which is calculated using rate formula in excel as shown thus:
=rate(nper,pmt,-pv,fv)
nper is the number of coupon payments the bond would receive which 5 since the bond can be called in 5 years
pmt is the annual coupon of $85
pv is the current market price of $1,120
fv is the call price in 5 years which is $1,050
=rate(5,85,-1120,1050)=6.49%
In a major metropolitan area, one chain of coffee shops has gained a large market share because customers feel its coffee tastes better than its competitors'.
Dozens of companies produce plain white socks. Consumers regard plain white socks as identical and don't care about who sells them their socks. The technology for producing socks is widely known, and any reputable person who wanted to start a sock manufacturing business could obtain a loan from a bank to buy the necessary machinery.
In a large city, two taxi companies own all the licenses that the city will grant to operate taxis. Consumers don't care which cab company they take—if they decide it's worth taking a cab, they flag down the nearest one. The government has granted a patent to a drug company for an experimental AIDS drug. That company is the only firm permitted to sell the drug.
1. How many firms?
A.One
B. Many or Few
2. Type of product
A. Unique
B. Anything
C. Standardized
D. Differentiated
3. Market Value
A. Perfect competition
B. Oligopoly
C. Monopolistic competition or monopoly
Answer: The answer is provided below
Explanation:
Coffee shop chain:
Many firms are supplying the needs of the market. But there is one particular coffee shop that has many customerw because it tastes bette. It is a differentiated product due to the fact that consumers feels it tastes is better than the taste of others. This is monopolistic competition.
White socks company:
Many firms arr producing the same output. This is a standardized product because each firm produces same homogenous output. This is a perfect competition. In a perfect competition, each firm is the price taker.
Taxi companies:
Few firms, or to be more precise only two taxi companies are in the market. We can deduce that their product is anything homogenous because the customers do not differentiate. Therefore the firms are in the oligopoly market.
Patented drug:
Only one single firm is in operation in the market, therefore this is a monopoly. There is one single seller in the market selling a unique drug that no firm else sells.
ahn Company uses a job-order costing system. Its plantwide predetermined overhead rate uses direct labor-hours as the allocation base. The company pays its direct laborers $15 per hour. During the year, the company started and completed only two jobs-Job Alpha, which used 54,500 direct labor-hours, and Job Omega. The job cost sheets for the these two jobs are shown below:
Job Alpha
Direct materials ?
Direct labor ?
Manufacturing overhead applied ?
Total job cost 1,533,500
Job Omega
Direct materials 235,000
Direct labor 345,000
Manufacturing overhead applied 184,000
Total job cost 764,000
Required
1. Calculate the plantwide predetermined overhead rate.
Plantwide predetermined overhead rate.
Answer:
$8 per direct labor hour
Explanation:
1. The computation of the plant wide overhead rate is shown below:
But before that first we have to find out the direct labor hours used which is
= Direct labor cost ÷ direct labors per hour
= $345,000 ÷ $15
= $23,000
Now the predetermined overhead rate is
= Manufacturing overhead applied ÷ direct labor hours
= $184,000 ÷ 23,000
= $8 per direct labor hour
explain the role of specialization and division of labor in product
Answer:
When the tasks involved with producing a good or service are divided and subdivided, workers and businesses can produce a greater quantity of those goods or services. First, specialization in a particular small job allows workers to focus on the parts of the production process in which they have an advantage.
The main role of the specialization in a product is to focus on selling to that market rather than to the mass public, and the main role of the division of labor is to increase the productivity.
What is specialization and division of labor in product?Specialization:
Product specialization is a marketing strategy in which companies concentrate their marketing and branding operations on a single product.
These marketing efforts are frequently focused on the product's rewards and quality, which may attract potential customers.
Division of labor:
The division of labor is the act of breaking down each stage of production into sectors where each employee performs a specialized duty.
Production has gotten more efficient as a result of the division of labor, and we have witnessed huge economic and monetary gains.
Therefore, specialization and division of labor in product helps to promote the products.
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Monetary policy can be a useful tool for macroeconomic management. Using relevant diagram(s), show and discuss the possible impact of recent interest rate cuts on output, inflation and unemployment
Answer:
A cut in interest rates will cause the following effects:
Output: output will increase because an interest rate cut makes credit cheaper. Firms will now borrow more money at cheaper interest, and will invest those funds in producing more.Inflation: an interest cut is produced by an increase in the money supply. When the money supply increases, inflation goes up as well.Unemployment: unemployment will go down. Because there is more money in the economy, there is also cheaper credit, and as explained above, firms will make use of these cheap credits to invest more and produce more. To do so, they will need to hire more workers.
McKerley Corp. has preferred stock outstanding that will pay an annual dividend of $5.65 per share with the first dividend exactly 15 years from today. If the required return is 3.99 percent, what is the current price of the stock?
Answer:
$81.88
Explanation:
We need to first calculate the terminal value which is the value in perpetuity for this preferred stock as shown below:
terminal value of the dividend =dividend/required rate of return
dividend is $5.65
required rate of return is 3.99%
terminal value of dividend=$5.65/3.99%=$ 141.60
The preferred stock price is the present value of the dividend's terminal value value
Present value=terminal value/(1+r)^n
r is the rate of return of 3.99%
n is the of years involved which is 14,15 years from today means the end of the 14th year
present value=$141.60/(1+3.99%)^14=$81.88
Assume that you are offered an annuity that pays $100 at the end of each year for 10 years. You could earn 8% on your money in other investments with equal risk. What is the most you should pay for the annuity
Answer:
The annuity is worth $671.01
Explanation:
Giving the following information:
Cash flow= $100
The number of years= 10 years.
Interest rate= 8%
To calculate the value of the annuity, we need to calculate the present value.
First, we need to calculate the final value:
FV= {A*[(1+i)^n-1]}/i
A= annual cash
FV= {100*[(1.08^10)-1]} / 0.08
FV= $1,448.66
Now, the present value:
PV=FV/(1+i)^n
PV= 1,448.66/(1.08^10)
PV= $671.01
Pacific Cruise Lines is a defendant in litigation involving a swimming accident on one of its three cruise ships.Required:1. The likelihood of a payment occurring is probable, and the estimated amount is $1.3 million.2. The likelihood of a payment occurring is probable, and the amount is estimated to be in the range of $1.1 to $1.6 million.3. The likelihood of a payment occurring is reasonably possible, and the estimated amount is $1.3 million.4. The likelihood of a payment occurring is remote, while the estimated potential amount is $1.3 million.Record the necessary entry for the scenarios given above.
Answer and Explanation:
According to the scenario, the journal entries are of the given data are as follow:-
Journal Entry
1. Loss A/c Dr. $1,300,000
To Contingent liability A/c $1,300,000
(Being the likelihood of a payment occurring is probable is recorded)
For recording this we debited the loss and credited the contingent liability as it increased the loss and liability
2. Loss A/c Dr. $1,100,000
To Contingent liability A/c $1,100,000
(Being the likelihood of a payment occurring is probable is recorded)
For recording this we debited the loss and credited the contingent liability as it increased the loss and liability
3. The likelihood of payment occurring is reasonably possible instead of probable, so we don’t have a need to record this entry. But we describe this in financial statements in the foot note
No Journal Entry Needed
4. The likelihood of payment occurring is remote so disclosure is not needed.
No Journal Entry Needed
Assuming that the contingency loss is "possible" and can be reasonably estimated, then journal entries should be recorded in order to collect the debt.
What is contingent liability?It is a liability the occurrence of which may or may not be possible. The journal entries passed in this case, is by debiting the necessary event and by crediting the contingent liability.
As per the given information, the journal entries are of the given data are as follows:-
1. Loss A/c Dr. $1,300,000
To Contingent liability A/c $1,300,000
(Being the likelihood of a payment occurring is possible is recorded)
2. Loss A/c Dr. $1,100,000
To Contingent liability A/c $1,100,000
(Being the likelihood of a payment occurring is possible is recorded)
3. The likelihood of payment occurring is reasonably possible instead of probable, so we don’t have a need to record this entry.
We write this in the financial statements as a footnote.
No Journal Entry.
4. The likelihood of payment occurring is not likely to happen at all so disclosure is not needed.
No Journal Entry.
Hence, The journal entry in terms of contingent liability will be debiting legal costs and credit to record legal liability.
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A manufacturing company that has only one product has established the following standards for its variable manufacturing overhead. The company uses machine-hours as its measure of activity. The following data pertain to operations for the last month: What is the variable overhead efficiency variance for the month? Select one: a. $8,842 U b. $1,013 F c. $8,843 F d. $8,730 U
Answer:
Variable overhead efficiency variance= (Standard Quantity - Actual Quantity)*Standard rate
Explanation:
We weren't provided with enough information to calculate the variable overhead efficiency variance. But, I will provide the formula.
To calculate the variable overhead efficiency variance, we need to use the following formula:
Variable overhead efficiency variance= (Standard Quantity - Actual Quantity)*Standard rate
Standard quantity= number of units produced*standard machine-hours
"The S&H Construction Company expects to have total sales next year totaling $ 14 comma 700 comma 000. In addition, the firm pays taxes at 35 percent and will owe $ 290 comma 000 in interest expense. Based on last year's operations the firm's management predicts that its cost of goods sold will be 63 percent of sales and operating expenses will total 30 percent. What is your estimate of the firm's net income (after taxes) for the coming year?"
Answer: $480,350
Explanation:
Income is calculated by deducting expenses from the sales which includes the Cost of Goods sold.
The Cost of Goods sold is given to be 63% of the Sales Next year and the Operating Expenses are given to be 30% of the sales.
That means a total of,
= 63 + 30
= 93%
93% of the sales will be deducted from the sales as expenses.
$290,000 will also be owed as interest so needs to be removed from the sales as well.
Calculating that will give,
= 14,700,000 - 14,700,000(0.93) - 290,000
= 14,700,000 - 13,671,000 - 290,000
= $739,000
This is the income after interest and expenses.
Now the tax has to be accounted for.
With a tax rate of 35%, the income minus tax will be,
= 739,000 ( 1 - 0.35)
= 739,000 * 0.65
= $480,350
$480,350 is the after-tax estimate if income for the following year.
Reporting Land Transactions on Statement of Cash Flows
On the basis of the details of the following fixed asset account, indicate the items to be reported on the statement of cash flows:
ACCOUNT Land ACCOUNT NO.
Balance
Date Item Debit Credit Debit Credit
Jan. 1 Balance 1,223,000
Mar. 12 Purchased for cash 404,000 1,627,000
Oct. 4 Sold for $222,000 190,000 1,437,000
Item Section of Statement of
Cash Flows Added or Deducted Amount
Mar. 12: Purchase of fixed asset Investing activities section Deducted $
Oct. 4: Sale of fixed asset Investing activities section Added $
Gain on sale of fixed asset (assume the indirect method) Operating activities section Deducted $
Answer: Please see below
Explanation:
Date Item Debit Credit Debit Credit
Jan. 1 Balance 1,223,000
Mar. 12 Purchased
for cash 404,000 1,627,000
Oct. 4 Sold for
$222,000 190,000 1,437,000
items Section for statement Added or Amount
of Cash flows Deducted
Mar. 12: Purchase
of fixed asset Investing activities Deducted$404,000
Oct. 4: Sale of
fixed asset Investing activities Added $222,000
Gain on sale of
fixed asset Operating activities Deducted $32,000
(assume the indirect method)
Sale of asset - credit of 190,000
=$222,000 -$190,000= 32,000.
According to indirect method,The statement of cash flows involves adjusting the net income to changes in balance sheet accounts to determine amount of cash accrued by operating activities.
Cash flows In the indirect method format follows the general classification of
-Cash flows from operating activities
-Cash flows from investing activities
-Cash flows from financing activities
Here, purchase of land would be an investing activity and would be deducted from net income.Sale of land would be an investing activity but added to net income and a gain on asset would be under operating activities and deducted from net income
Assume you are a manager at Nordstrom, a department store with high social demands as a result of its strong focus on customer service. You already assess cognitive ability for incoming employees, but now you also want to obtain measures of personality. Of the Big Five, which of the following two factors would be the most valid predictors of performance?
a. Conscientiousness and openness to experience
b. Neuroticism and agreeableness
c. Agreeableness and openness to experience
d. Conscientiousness and extraversion
e. Neuroticism and extraversio
Answer:
Neuroticism and extraversion
Explanation:
Neuroticism and extraversion would be the most valid predictors of performance
Incoming employees who score high on neuroticism are more likely than average to be moody and to experience such feelings as anxiety, worry, fear, anger, frustration, envy, jealousy, guilt, depressed mood, and loneliness. Such employees would respond badly to stress.
Extraversion is to possess outgoing, talkative and energetic behavior.
the answer is option E.
Neuroticism and extraversionAccording to Neuroticism and also extraversion would be the most valid predictors of performanceWhen Incoming employees who score high on neuroticism are more likely than average to be moody and also to experience such feelings as anxiety, worry, fear, anger, frustration, envy, jealousy, guilt, depressed mood, and also loneliness. Although Such employees would respond badly to stress.Thus, Extraversion is to possess outgoing, talkative, and also energetic behavior.Find out more information about Extraversion here:
https://brainly.com/question/7264389
On Saturday, December 31, the company's owner provided ten hours of service to a customer. The company bills $100 per hour for services provided on weekends. Payment has not yet been received. The owner did not stop in the office on Saturday; as such, on December 31, the services were unbilled and unrecorded.Complete the necessary adjusting entry by selecting the account names and dollar amounts from the drop-down menus.Date Account Title Debit CreditDec. 31 Accounts Receivable Accumulated Depreciation Cash Depreciation Expense Equipment Equipment Expense Rent Revenue Salaries Expense Salaries Payable Service RevenueSupplies Supplies Expenses Unearned Rent Revenue Accounts Receivable Accumulated Depreciation Cash Depreciation Expense Equipment Equipment Expense Rent Revenue Salaries Expense Salaries Payable Service Revenue Supplies Supplies Expenses Unearned Rent Revenue
Answer and Explanation:
The adjusting entry is as follows
Account receivable Dr $1,000 ($100 per hour × 10 hours)
To Service revenue $1,000
(Being service provided is recorded)
For recording this we debited the account receivable as it increased the assets and credited the service revenue as it also increased the service revenue so that the correct recording and posting could be done
In 2006, Atlanta once again hosted the Peachtree Road Race, a running event that attracts many world-caliber racers. This year race officials also sanctioned a race conducted in Iraq so that soldiers from the state would not have to miss the annual event. The winners of the Mideast race as well as scenes of the actual race were televised. In terms of a promotional mix, this Iraqi Peachtree Race was as example of:
a. advertising and personal selling efforts.
b. strategic product promotions and resulting sales.
c. a target marketing strategy.
d. sales promotion efforts.
e. a public relations strategy and resulting publicity
Answer:
The correct answer is: e. a public relations strategy and resulting publicity.
Explanation:
In the scenario exemplified above, it can be considered that in terms of the promotional mix, the Iraqi Peachtree race was an example of a public relations strategy, as the function of these professionals is to promote an event, brand or company with the objective of attracting positive publicity. , which was what happened in the case of the race.
Public relations activities helped to generate publicity for the event through television media reports.
2. How would each of the following affect the demand for money ? a a tax on bonds held by individuals b . a forecast by the Central bank that interest rates will rise sharply in the next quarter
Flint Company began operations on January 1, 2015, and uses the average-cost method of pricing inventory. Management is contemplating a change in inventory methods for 2018. The following information is available for the years 2015–2017.
Net Income Computed Using
Average-Cost Method
FIFO Method
LIFO Method
2015 $16,080 $18,980 $11,940
2016 17,980 20,800 14,020
2017 19,920 24,890 17,050
(a) Prepare the journal entry necessary to record a change from the average cost method to the FIFO method in 2018. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)
Account Titles and Explanation
Debit
Credit
Inventory
Retained Earnings
(b) Determine net income to be reported for 2015, 2016, and 2017, after giving effect to the change in accounting principle.
Net Income
2015 $
2016 $
2017 $
(c) Assume Flint Company used the LIFO method instead of the average cost method during the years 2015–2017. In 2018, Flint changed to the FIFO method. Prepare the journal entry necessary to record the change in principle. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)
Account Titles and Explanation
Debit
Credit
Answer: Please refer to Explanation
Explanation:
When using FIFO (First In First Out), a company sells it's earlier Stock first before it sells the latter one.
When using LIFO ( Last In First Out), a company sells it's latter Stock first before it sells the earlier one.
The Average Cost averages the both.
a) To record a change from the Average Cost method to the FIFO method, first take the difference between the total revenues from the two methods and then credit the difference to the Retained Earnings account if FIFO is higher to signify the increase in Retained Earnings as a result of the change. The corresponding entry should be to the Inventory account to show the rise in Inventory associated with the prices of goods rising and therefore later inventory being priced higher.
Total for Average Cost Method.
= 16,080 + 17,980 + 19,920
= $53,980
Total for FIFO
= 18,980 + 20,800 + 24,890
= $64,670
Difference is,
= $64,670 - $53,980
= $10,690
Journal Entry will be,
DR Inventory $10,690
CR Retained Earnings $10,690
( To record change of Accounting Method to FIFO)
b) The change has been from the Average Cost to the FIFO method. The question already gives the numbers related with calculating the Net Income using the FIFO method.
The answer is therefore,
FIFO
2015 - $18,980
2016 - $20,800
2017 - $24,890
c) Going by the same method as in A, you first take the difference between the totals of using LIFO and FIFO. The difference will be credited to the Retained Earnings account if FIFO is higher to signify the increase in Retained Earnings as a result of the change. The corresponding entry should be to the Inventory account to show the rise in Inventory associated with the prices of goods rising and therefore later inventory being priced higher.
FIFO Total
= 18,980 + 20,800 + 24,890
= $64,670
LIFO Total
= 11,940 + 14,020 + 17,050
= $43,010
Difference will be,
= 64,670 - 43,010
= $21,660
Journalizing it,
DR Inventory $21,660
CR Retained Earnings $21,660
(To record change on Accounting Method to FIFO)
Navigator sells GPS trackers for $50 each. It expects sales of 5,000 units in quarter 1 and a 5% increase each subsequent quarter for the next 8 quarters. Prepare a sales budget by quarter for the first year. What is the amount of total sales revenue for the year?
Answer and Explanation:
The Preparation of the sales budget and the computation of the amount of total sales revenue for the year is shown below:-
Sales Budget For Year 1
Quarter Number of Sale price (B) Sales Revenue
Units (A) (A) × (B)
1 5,000 $50 $250,000
2 5,250 $50 $262,500
(5,000 × 105%)
3 5,513 $50 $275,650
(5,250 × 105%)
4 5,789 $50 $289,450
(5,513 × 105%)
Total $1,077,600
The total factory overhead for Bardot Marine Company is budgeted for the year at $1,760,850, divided into four activities: fabrication, $858,000; assembly, $351,000; setup, $298,350; and inspection, $253,500. Bardot Marine manufactures two types of boats: speedboats and bass boats. The activity-base usage quantities for each product by each activity are as follows:
Fabrication Assembly Setup Inspection
Speedboat 9,750 dlh 29,250 dlh 70 setups 122 inspections
Bass boat 29,250 9,750 515 853
39,000 dlh 39,000 dlh 585 setups 975 inspections.
Each product is budgeted for 5,000 units of production for the year. Determine the activity rates for each activity.
Fabrication $per direct labor hour
Assembly $per direct labor hour
Setup $ per setup
Inspection $per inspection
B. Determine the activity-based factory overhead per unit for each product. Round to the nearest whole dollar.
Speedboat $per unit
Bass boat $per unit
Answer:
Instructions are below.
Explanation:
Giving the following information:
Activity - Speedboat - Bass boat:
Fabrication= 9,750 + 29,250= 39,000 direct labor hours
Assembly= 29,250 + 9,750= 39,000 direct labor hours
Setup= 70 + 515= 585 setups
Inspection= 122 + 853= 975 inspections
Department costs:
Fabrication= 858,000
Assembly= 351,000
Setup= 298,350
Inspection= 253,500
Each product is budgeted for 5,000 units of production for the year.
First, we need to calculate the predetermined overhead rate for each activity:
Predetermined manufacturing overhead rate= total estimated overhead costs for the period/ total amount of allocation base
Fabrication= 858,000/39,000= $22 per direct labor hour
Assembly= 351,000/39,000= $9 per direct labor hour
Setup= 298,350/585= $510 per setup
Inspection= 253,500/975= $260 per inspection
Now, we can allocate overhead to each product line:
Allocated MOH= Estimated manufacturing overhead rate* Actual amount of allocation base
Speedboats= 22*9,750 + 9*29,250 + 70*510 + 122*260= $545,170
Bass boat= 22*29,250 + 9*9,750 + 515*510 + 853*260= $1,215,680
Finally, overhead per unit:
Speedboats= 545,170/5,000= $109.034
Bass boat= 1,215,680/5,000= $243.136
Condensed financial data of Windsor, Inc. follow. Windsor, Inc. Comparative Balance Sheets December 31 Assets 2022 2021 Cash $56,560 $33,880 Accounts receivable 61,460 26,600 Inventory 78,750 71,995 Prepaid expenses 19,880 18,200 Long-term investments 96,600 76,300 Plant assets 199,500 169,750 Accumulated depreciation (35,000) (36,400) Total $477,750 $360,325Liabilities and Stockholders' Equity Accounts payable $71,400 47,110 Accrued expenses payable 11,550 14,700 Bonds payable 77,000 102,200Common stock 54,000 122,500Retained earnings 1,163,800 73,815Total $477,75 $360,325 Windsor, Inc. Income Statement Data For the Year Ended December 31, 2022 Sales revenue Less: Cost of goods sold $94,822 Operating expenses, excluding depreciation 8,687 Depreciation expense 32,550 Income tax expense 19,096 Interest expense 3,311Loss on disposal of plant assets 5,250 163,716Net income $108,206 Additional information: 1. New plant assets costing $70,000 were purchased for cash during the year. 2. Old plant assets having an original cost of $40,250 and accumulated depreciation of $33,950 were sold for $1,050 cash. 3. Bonds payable matured and were paid off at face value for cash. 4. A cash dividend of $18,221 was declared and paid during the year. Prepare a statement of cash flows using the indirect method.
Answer:
Windsor, Inc.
Statement of Cash Flows
December 31, 2022
Cash flow from operating activities
Net income $108,206
Adjustments to net income $19,005
Depreciation expense $32,550Loss on disposal of assets $5,250Increase in prepaid expenses ($1,680)Increase in accounts payable $24,290Increase in accounts receivable ($34,860)Increase in inventory ($6,755)Decrease in accrued expenses payable ($3,150)
Total cash flow from operating activities $123,851
Cash flow from investing activities
Increase in long term investments ($20,300)
Purchase in new plant assets ($70,000)
Proceeds from disposal of assets $1,050
Total cash flow from investing activities ($89,250)
Cash flow from financing activities
Issuance of common stocks $31,500
Payment of bonds payable ($25,200)
Dividends paid ($18,221)
Total cash flow from financing activities ($11,921)
Total increase in cash $22,680
Cash balance December 31, 2021 $33,880
Cash balance December 31, 2022 $56,560
Explanation:
2022 2021
Cash $56,560 $33,880 +22,680
Accounts receivable 61,460 26,600 +34,860
Inventory 78,750 71,995 +6,755
Prepaid expenses 19,880 18,200 +1,680
Long-term investments 96,600 76,300 +20,300
Plant assets 199,500 169,750 +29,750
Accumulated depreciation (35,000) (36,400) -1,400
Total $477,750 $360,325
Liabilities and Stockholders' Equity
Accounts payable $71,400 47,110 +24,290
Accrued expenses payable 11,550 14,700 -3,150
Bonds payable 77,000 102,200 -25,200
Common stock 154,000 122,500 +31,500
Retained earnings 163,800 73,815 +89,985
Total $477,750 $360,325
Depreciation expense 32,550
Interest expense 3,311
Loss on disposal of plant assets 5,250
Net income $108,206
cash dividend of $18,221
