Answer: ($1.20) per share
Explanation:
As these are cumulative preferred shares, their dividends will have to be paid eventually so they will add to the net loss.
Preferred dividend = 10,000 * 9.5% * 100
= $95,000
The weighted average number of shares is also needed:
Stock was sold on May 31 thereby leaving 7 months in the year.
= 228,000 + (12,000 * 7/12)
= 235,000 common shares
Net loss per share = (187,000 + 95,000) / 235,000
= ($1.20) per share
For a $150,000 mortgage, with interest rate 5,5%, paid over 15 years, the monthly payment is $1,225,63. After 2 monthly
payments, what is the balance of the loan?
Round to the nearest cent. Do not include the dollar sign or commas in the answer box.
Presented below is information related to Shamrock Corp., which sells merchandise with terms 2/10, net 60. Shamrock Corp. records its sales and receivables net. July 1 Shamrock Corp. sold to Warren Harding Co. merchandise having a sales price of $15,000. 5 Accounts receivable of $14,300 (gross) are factored with Andrew Jackson Credit Corp. without recourse at a financing charge of 9%. Cash is received for the proceeds; collections are handled by the finance company. (These accounts were all past the discount period.) 9 Specific accounts receivable of $14,300 (gross) are pledged to Alf Landon Credit Corp. as security for a loan of $6,500 at a finance charge of 6% of the amount of the loan. The finance company will make the collections. (All the accounts receivable are past the discount period.) Dec. 29 Warren Harding Co. notifies Shamrock that it is bankrupt and will pay only 10% of its account. Give the entry to write off the uncollectible balance using the allowance method. (Note: First record the increase in the receivable on July 11 when the discount period passed.)
Answer:
Shamrock Corp.
Entry to write off the uncollectible balance of Warren Harding Co.:
Debit Allowance for Uncollectible accounts $13,500
Credit Accounts Receivable $13,500
To write off the uncollectible account.
Explanation:
a) Data and Calculations:
Credit terms = 2/10, net 60. This means that 2% discount is allowed to each customer for making payment within 10 days and the longest credit is 60 days.
Sales to Warren Harding Co = $15,000
Amount debited to Accounts Receivable = 14,700 ($15,000 * 98%)
Amount paid by Warren (10%) = $1,500
Amount to be written off as uncollectible = $13,500
Discount of $300 will be reversed with a debit to the Accounts Receivable and a credit to Discount Allowed (since the Shamrock Corp. records its sales and receivables net.)
Cash of $1,500 will be debited and Accounts Receivable credited to record the 10% of $15,000 cash receipt from Warren Harding Co. The remaining amount, which is $13,500 will be written off with a debit to Allowance for Uncollectible accounts and a credit to Accounts Receivable.
Aaron Corporation, which has only one product, has provided the following data concerning its most recent month of operations:Selling price $102 Units in beginning inventory 0 Units produced 4,200 Units sold 3,570 Units in ending inventory 630 Variable costs per unit: Direct materials $19 Direct labor $41 Variable manufacturing overhead $7 Variable selling and administrative expense $4 Fixed costs: Fixed manufacturing overhead $51,100 Fixed selling and administrative expense $3,100The total contribution margin for the month under variable costing is:____.a. $59,570.b. $56,470.c. $124,950.d. $110,670.
Answer:
Option d (110,670) is the right option.
Explanation:
The given values are:
Selling price,
= $102 per unit
Fixed manufacturing overhead,
= $51,100
Fixed selling and administrative expense,
= $3,100
Now,
Sales will be:
= [tex]3570\times 102[/tex]
= [tex]364,140[/tex] ($)
Variable expenses:
Direct material will be:
= [tex]19\times 3570[/tex]
= [tex]67,830[/tex] ($)
Direct labor will be:
= [tex]41\times 3570[/tex]
= [tex]146,370[/tex] ($)
So,
Variable manufacturing overhead will be:
= [tex]7\times 3570[/tex]
= [tex]24,990[/tex] ($)
Its selling as well as administrative will be:
= [tex]4\times 3570[/tex]
= [tex]14,280[/tex]
Hence,
The contribute margin will be:
= [tex]364,140-(67,830+146,370+24,990+14,280)[/tex]
= [tex]360,140-253,470[/tex]
= [tex]110,670[/tex] ($)
Oval Company acquired a machine that involved the following expenditures and related factors: Gross invoice price $76,000 Sales tax 2,850 Cash discount taken 1,140 Freight 1,350 Assembly of machine 1,800 Installation of machine 2,700 Assorted spare parts for future use 5,400 Tuning and adjusting machine before use 900 The initial accounting cost of the machine should be:
Answer:
$78,760
Explanation:
Cost of Machine include Purchase Price plus any costs directly incurred in bringing the asset in location and condition intended for use by management.
Calculation of Cost of Machine
Purchase Price $76,000
Sales Tax ($2,850)
Cash discount ($1,140)
Freight $1,350
Assembly Cost $1,800
Installation Cost $2,700
Tuning and adjusting $900
Total Cost $78,760
Which of the following is an example of an instance of public health education that created positive externalities?
teaching pregnant women hygienic practices in the early 1900s
people learning the importance of washing their hands
public campaigns against smoking in the late 1900s
all of the above
Answer:
D.) All of the above
Explantin
Teaching preg women abt hygienic practicers helped prevent infection because preg women are more prone to infections since they sweat more and stuff... (due to hormone)
People learning the importance of wash their hands is important because it helps prevent the spread of dieases. For example the infamous coronavirus
Public campaign against smoking was important in the 1990s because people back then didn't know smoking could cause. It caused cancer stroke lung dieases etc
Solving for dominant strategies and the Nash equilibrium Suppose Darnell and Eleanor are playing a game in which both must simultaneously choose the action Left or Right. The payoff matrix that follows shows the payoff each person will earn as a function of both of their choices. For example, the lower-right cell shows that if Darnell chooses Right and Eleanor chooses Right, Darnell will receive a payoff of 5 and Eleanor will receive a payoff of 1.
Eleanor Left Right
Left 6,6 6,3
Darnell Right 4,3 5,5
The only dominant strategy in this game is for______ to_______ choose.
The outcome reflecting the unique Nash equilibrium in this game is as follows: Darnell chooses_______ and Eleanor chooses_______.
Answer:
Best response for Eleanor
If Darnell chooses left, Eleanor would have to choose Left as well so that Eleanor can make a payoff of 6.
If Darnell chooses right, Eleanor would have to choose right as well to make a payoff of 5.
Best response for Darnell.
If Eleanor chooses left, Darnell would choose Left as well to make a payoff of 6.
If Eleanor chooses right, Darnell would still chose Left so as to make the same payoff of 6.
The only dominant strategy in this game is for Darnell to choose Left.This is the dominant strategy because it is the best strategy regardless of the action of Eleanor.
The outcome reflecting the unique Nash equilibrium in this game is as follows: Darnell chooses Left and Eleanor chooses Left.Darnell would always choose Left as this is the dominant strategy. Eleanor would therefore choose Left as well to make a payoff of 6.
On November 2, 2020, Ellie purchased and placed in service a building that cost $5,600,000. An appraisal determined that 15% of the total cost was attributed to the value of the land. The bottom floor of the building is leased annually to a retail business for $80,000. The other floors of the building are rental apartments with an annual rent of $350,000.A. How is the property classified for MACRS? B. What is the life of the asset for MACRS?C. Ellie's cost recovery for 2018 is_____.
Answer:
Ellie
A. The property is classified for 27.5-year MACRS since more than 80% of the gross rental income emanates from residential dwellings.
B. The life of the asset for this type of MACRS is 27.5 years.
C. Ellie's cost recovery for 2020/2018 is $28,848.
Explanation:
a) Data and Calculations:
Cost of building and land = $5,600,000
Appraised cost of land = $840,000 ($5,600,000 * 15%)
Appraised cost of building = $4,760,000 ( ($5,600,000 * 85%)
Rent from the bottom floor leased to a retail business = $80,000
Rent from the other floors as rental apartments = $350,000
Total value of rental income = $430,000
Retail business % of rental income = 19%
Residential apartments % of rental income = 81%
Cost recovery = $173,091 ($4,760,000/27.5) per annum
For 2 months, the cost recovery = $28,848 ($173,091 * 2/12)
Kirchhoff Industries has a past history of uncollectible accounts, as follows.
Age Class Percent Uncollectible
Not past due 2%
1-30 days past due 4
31-60 days past due 18
61-90 days past due 40
Over 90 days past due 75
Required:
Estimate the allowance for doubtful accounts.
Answer:
The balance of allowance for doubtful accounts is $131,712.
Explanation:
Note: This question is not complete. The complete question is therefore provided before answering the question. See the attached pdf file for the complete question.
The explanation of the answer is now given as follows:
Note: See the attached excel file for the estimated allowance for doubtful accounts.
In the attached excel file, the allowance for doubtful accounts for each Percentage uncollectible is calculated as follows:
Allowance for doubtful accounts = Total receivables * Percentage uncollectible.
Also, the balance of allowance for doubtful accounts is calculated by adding the allowance for doubtful accounts of the Age Classes.
From the attached excel file, the balance of allowance for doubtful accounts is $131,712.
Which of the following is a reason for hedging a long-only portfolio with an index futures? The investor believes the stocks in the portfolio will perform better than the market but is uncertain about the future performance of the market The investor believes the stocks in the portfolio will perform better than the market and the market is expected to do well The portfolio is not well diversified and so its return is uncertain All
Answer:
The investor believes the stocks in the portfolio will perform better than the market but is uncertain about the future performance of the market
Explanation:
Hedging can be regarded as strategies
utilize by investors so that there would be a reduction in exposure to risk especially in event whereby asset in their portfolio can experience
sudden price decline. It's a strategy that reduce uncertainty as well as losses. It should be noted that one of the reason for hedging a long-only portfolio with an index futures is that investor believes the stocks in the portfolio will perform better than the market but is uncertain about the future performance of the market
There are different reason for hedging a long only portfolio with an index futures. The option that is a reason for hedging a portfolio with an index futures is that;
The investor believes the stocks in the portfolio will perform better than the market but is uncertain about the future performance of the market.Note that index futures can be used to as a means to remove the influence of the performance of the overall market on the portfolio.
When the market is said to be doing well, that is hedging against the performance of the market is not right and therefore Hedging cannot be a means to right any wrong for a poorly diversified portfolio.
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Sweet Company is presently testing a number of new agricultural seed planters that it has recently developed. To stimulate interest, it has decided to grant to five of its largest customers the unconditional right of return to these products if not fully satisfied. The right of return extends for 4 months. Sweet estimates returns of 15%. Sweet sells these planters on account for $1,630,000 (cost $733,500) on January 2, 2020. Customers are required to pay the full amount due by March 15, 2020.
Required:
Prepare the journal entry for Bridgeport at January 2, 2020.
Answer:
January 2, 2020
Dr Accounts Receivable $1,630,000
Cr Sales Revenue $1,630,000
Dr Cost of Goods Sold $733,500
Cr Inventory $733,500
Explanation:
Preparation of the journal entry for Bridgeport at January 2, 2020
January 2, 2020
Dr Accounts Receivable $1,630,000
Cr Sales Revenue $1,630,000
(To recognize revenue)
Dr Cost of Goods Sold $733,500
Cr Inventory $733,500
(To record cost of goods sold)
The Bawl Street Journal costs $580, payable now, for a 2-year subscription. The newspaper is published 252 days per year (5 days per week, except holidays). If a 10% nominal annual interest rate compounded quarterly is used: What is the effective annual interest rate in this problem?
Answer:
The effective annual rate of interest is "10.38%".
Explanation:
The given values are:
Nominal annual interest rate,
Q = 10%
i.e.,
= 0.10
Quarterly compounding,
q = 4
Now,
The effective annual rate of interest will be:
= [tex][{1 + (\frac{Q}{q} )}^q] - 1[/tex]
On substituting the given values in the above formula, we get
= [tex][{1 + (\frac{0.10}{4} )}^4] 1[/tex]
= [tex][(1 + 0.025)^4] - 1[/tex]
= [tex](1.025)^4-1[/tex]
= [tex]1.10381289 - 1[/tex]
= [tex]0.10381289[/tex]
On converting it into percentage, we get
= [tex]10.38[/tex]%
You have the following information for Bonita Industries for the month ended October 31, 2022. Bonita uses a periodic method for inventory. Date Description Units Unit Cost or Selling Price Oct. 1 Beginning inventory 65 $22 Oct. 9 Purchase 130 24 Oct. 11 Sale 90 45 Oct. 17 Purchase 90 25 Oct. 22 Sale 65 50 Oct. 25 Purchase 75 27 Oct. 29 Sale 100 50 (a1) Calculate the weighted-average cost. (Round answer to 3 decimal places, e.g. 5.125.)
Answer:
the weighted average cost per unit is $24.514 per unit
Explanation:
The computation of the weighted average cost is shown below:
= Total cost of goods available ÷ number of units
= {(65 × $22) + (130 × $24) + (90 × $25) + (75 × $27)} ÷ (65 + 130 + 90 + 75)
= ($1,430 + $3,120 + $2,250 + $2,025) ÷ ( 360 units)
= $8,825 ÷ 360 units
= $24.514 per unit
Hence, the weighted average cost per unit is $24.514 per unit
which behavior would best describe someone who is productive at work?
a. takes frequent breaks to answer personal calls and emails
b. sticks to routines and prioritizes to work
c. multitask as much as possible
d. waits for directives from the boss before completing simple tasks
The Utah Mining Corporation is set to open a gold mine near Provo, Utah. According to the treasurer, Monty Goldstein, "This is a golden opportunity." The mine will cost $3,400,000 to open and will have an economic life of 11 years. It will generate a cash inflow of $575,000 at the end of the first year, and the cash inflows are projected to grow at 8 percent per year for the next 10 years. After 11 years, the mine will be abandoned. Abandonment costs will be $123,000 at the end of year 11.
Required:
What is the IRR for the gold mine? (Do not include the percent sign (%). Round your answer to 2 decimal places. (e.g., 32.16))
IRR
%
Answer:
19.07%
Explanation:
Internal rate of return is the discount rate that equates the after-tax cash flows from an investment to the amount invested
IRR can be calculated with a financial calculator
Cash flow in year 0 = $-3,400,000
Cash flow in year 1 = $575,000
Cash flow in year 2 = $575,000 x 1.08
Cash flow in year 3 = $575,000 x 1.08^2
Cash flow in year 4 = $575,000 x 1.08^3
Cash flow in year 5 = $575,000 x 1.08^4
Cash flow in year 6 = $575,000 x 1.08^5
Cash flow in year 7 = $575,000 x 1.08^6
Cash flow in year 8 = $575,000 x 1.08^7
Cash flow in year 9 = $575,000 x 1.08^8
Cash flow in year 10 = $575,000 x 1.08^9
Cash flow in year 11 = ($575,000 x 1.08^10) - $123,000
IRR = 19.07%
To find the IRR using a financial calculator:
1. Input the cash flow values by pressing the CF button. After inputting the value, press enter and the arrow facing a downward direction.
2. After inputting all the cash flows, press the IRR button and then press the compute button.
Suppose there is one ticket left for tonight’s performance of Hamilton on Broadway. The ticket costs $700. Sean is a community college student and has been saving his tips from his waiting job for months to see the show. He is willing to pay $705 for the ticket. Anca has seen Hamilton five times already but wants to see it again before heading to Europe for a month. She is willing to pay $1,250 for the ticket. _____buying the ticket leads to a more economically efficient outcome. „
A. Neither Sean nor.
B. Anca.
C. Sean and Anca both.
D. Sean.
Answer: B. Anca
Explanation:
From the information provided in the question, we should note that Anca purchasing the tickets will lead to a more economically efficient outcome.
From the information given, we can see that Anca is willing to pay $1250 while Sean wants to pay $705. Therefrom Anca purchasing the tickets leads to a better efficiency.
We can also infer that if Anca pays $1,250, a consumer surplus of $550 is gotten while Sean would get a consumer surplus of only $5.
Therefore, the correct option is B.
Houseman, Inc. anticipates sales of 50,000 units, 48,000 units, 51,000 units and 50,000 units in July, August, September and October, respectively. Company policy is to maintain an ending finished-goods inventory equal to 40% of the following month's sales. On the basis of this information, how many units would the company plan to produce in September
Answer:
50,600 units
Explanation:
The computation of the number of units to be produced in September is given below:
= sales + ending inventory - opening inventory
= 51,000 units + (40% of 50,000 units) - (40% of 51,000 units)
= 51,000 units + 20,000 units - 20,400 units
= 50,600 units
Suppose Manuel and Poornima are playing a game in which both must simultaneously choose the action Left or Right. The payoff matrix that follows shows the payoff each person will earn as a function of both of their choices. For example, the lower-right cell shows that if Manuel chooses Right and Poornima chooses Right, Manuel will receive a payoff of 3 and Poornima will receive a payoff of 7.
Poornima
Left Right
Manuel Left 4,4 3,3
Right 5,4 4,3
The only dominant strategy in this game is for (Manuel/Poornima) to choose (left/right).
The outcome reflecting the unique Nash equilibrium in this game is as follows: Manuel chooses (left/right) and Poornima chooses (left/right).
Answer:
/Poornima to choose right
Manuel to choose left
LEFT
right
Explanation:
Game theory looks at the interactions between participants in a competitive game and calculates the best choice for the player.
Dominant strategy is the best option for a player regardless of what the other player is playing.
Nash equilibrium is the best outcome for players where no player has an incentive to change their decisions.
If Poornima chooses left, her payoffs are 4 or 3. If she chooses right they are 5 or 4
If Manuel chooses left, her payoffs are 4 or 4. If she chooses right they are 3 or 3
It is Poornima that has a dominant strategy and it is to choose right because the payoffs of the right are greater than that of the left
For Manuel, the dominant strategy is to choose left
the Nash equilibrium is left for Manuel and right for Poornima
Cash includes currency and coins, balances in checking accounts, and items acceptable for deposit in these accounts, such as checks and money orders received from customers. These forms of cash represent amounts readily available to pay off debt or to use in operations, without any legal or contractual restriction. A company had the following balances in various cash accounts on its balance sheet: Checking account balance $12,300 Savings account balance 34,500 Petty cash fund 1,200 What amount should be reported as cash under the current assets section of the company's balance sheet
Answer:
$48,000.
Explanation:
For the Cash balance to be reported, consider the total of all cash and cash equivalents which can be used up by the company within a period of 12 months.
Checking account balance $12,300
Savings account balance $34,500
Petty cash fund $1,200
Total $48,000
The amount should be reported as cash under the current assets section of the company's balance sheet is $48,000.
Discuss the benefits of businesses that are involved in the macro environment
A bank receives a deposit for $50,000. If the bank has a 10 percent reserve
requirement, approximately how much money could this initial deposit
eventually add to the economy?
Answer:
$500,000
Explanation:
ap ex
A bank having a 10 percent reserve requirement will add $500,000 to the economy on receiving $50,000 as a initial deposit.
Reserve requirements are the sums of money that a bank must have in reserve in order to cover liabilities in the event of an unexpected withdrawal. Reserve requirements are a technique used by the central bank to influence interest rates by increasing or decreasing the money supply in the economy.
According to the question, reserve requirement is 10%, and the initial deposit is $50,000.
Therefore, $50,000+$50,000×10/100 will result in the money that could be added to the economy, which is $500,000.
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Broderick Company began operations on January 2, 2019. It employs 9 individuals who work 8-hour days and are paid hourly. Each employee earns 10 paid vacation days and 6 paid sick days annually. Vacation days may be taken after January 15 of the year following the year in which they are earned. Sick days may be taken as soon as they are earned; unused sick days accumulate. Additional information is as follows:
Actual Hourly Wage rate: 2016-$10.00 - 2017-$11
Vacation Days Used by each employee - 2016-0 days and 2017-9 days
Sick Days Used by Each Employee - 2016 -4 days and 2017 5 days
Broderick Company has chosen to accrue the cost of compensated absences at rates of pay in effect during the period when earned and to accrue sick pay when earned.
Required:
a. Prepare journal entries to record transactions related to compensated absences during 2019 and 2020.
b. Compute the amounts of any liability for compensated absences that should be reported on the balance sheet at December 31, 2019 and 2020.
Answer:
A. 2019
Dr Salaries and Wages Expense $7,200
Cr Salaries and Wages Payable $7,200
2019
Dr Salaries and Wages Expense $4,320
Cr Salaries and Wages Payable $4,320
2019
Dr Salaries and Wages Payable $2,880
Cr Cash $2,880
2020
Dr Salaries and Wages Expenses $7,920
Cr Salaries and Wages Payable $7,920
2020
Dr Salaries and Wages Expenses $4,752
Cr Salaries and Wages Payable $4,752
2020
Dr Salaries and Wages Expenses $648
Dr Salaries and Wages Payable $6,480
Cr Cash $7,128
2020
Dr Salaries and Wages Expenses $ 144
Dr Salaries and Wages Payable $3,816
Cr Cash $3,960
B. Vacation Wages Payable at December 31, 2019 $7,200
Sick Pay Wages Payable at December 31, 2019 $1,440
Vacation Wages Payable at December 31, 2020 $8,640
Sick Pay Wages Payable at December 31, 2020 $2,376
Explanation:
(a) Preparation of the journal entries to record transactions related to compensated absences during 2019
2019
Dr Salaries and Wages Expense $7,200
Cr Salaries and Wages Payable $7,200
(9 employees * $10 per hour * 8 hours per day * 10 days = $7,200)
(Record Accrue expenses and liabilities for Vacations)
2019
Dr Salaries and Wages Expense $4,320
Cr Salaries and Wages Payable $4,320
(9 employees * $10 per hour * 8 hours per day * 6 days = $4,320)
(Record Accrue expenses and liabilities for Sick Pay)
2019
Dr Salaries and Wages Payable $2,880
Cr Cash $2,880
(9 employees * $10 per hour * 8 hours per day * 4 days = $2,880)
(Record Sick leave paid)
Preparation of the journal entries to record transactions related to compensated absences during 2020
2020
Dr Salaries and Wages Expenses $7,920
Cr Salaries and Wages Payable $7,920
(9 employees * $11 per hour * 8 hours per day * 10 days = $7,920)
(Record Accrue the expense and liability for Vacations)
2020
Dr Salaries and Wages Expenses $4,752
Cr Salaries and Wages Payable $4,752
(9 employees * $11 per hour * 8 hours per day * 6 days = $4,752)
(Record Accrue the expense and liability for Sick Pay)
2020
Dr Salaries and Wages Expenses $648
($7,128-$6,480)
Dr Salaries and Wages Payable $6,480
(9 employees * $10 per hour * 8 hours per day * 9 days = $6,480)
Cr Cash $7,128
( 9 employees * $11 per hour * 8 hours per day * 9 days = $7,128)
(Record Vacation Time paid)
2020
Dr Salaries and Wages Expenses $ 144
Dr Salaries and Wages Payable $3,816
[( 9 employees * $10 per hour * 8 hours per day * 2 days = $1,440)-(9 employees * $11 per hour * 8 hours per day * 3 days = $2,376)]
Cr Cash $3,960
( 9 employees * $11 per hour * 8 hours per day * 5 days = $3,960)
(Record Sick Leave Paid)
B. Computation for the amounts of any liability for compensated absences that should be reported on the balance sheet at December 31, 2019 and 2020
2019
Vacation Wages Payable at December 31, 2019=$0 + $7,200 - $0
Vacation Wages Payable at December 31, 2019 = $7,200
Sick Pay Wages Payable at December 31, 2019=$0 + $4,320 - $2,880
Sick Pay Wages Payable at December 31, 2019= $1,440
2020
Vacation Wages Payable at December 31, 2020=$7,200 + $7,920 - $6,480
Vacation Wages Payable at December 31, 2020 = $8,640
Sick Pay Wages Payable at December 31, 2020=$1,440 + $4,752 - $3,816
Sick Pay Wages Payable at December 31, 2020= $2,376
Which type of company only spends money when absolutely necessary?
Madson Company is analyzing several proposed investment projects The firm has resources only for one project Project P Project Q Project R Project S Project T Cost of investment $32,000 $38,200 $57,100 $47,400 $53,000 Net cash flow Year 1 $5,200 $3,200 $4,300 $26,000 $15,900 Year 2 $9,600 $15,300 $16,900 $8,400 $15,800 Year 3 $12,700 $14,700 $21,000 $6,400 $16,100 Year 4 $15,300 $19,300 $31,000 $4,300 $11,000 Year 5 $52,000 $2,100 $10,000 The company uses the payback period method for making capital investment decisions. On the basis of this decision model, which project should be selected? (Ignore taxes.) a. Project T b. Project Q c. Project P d. Project R e. None
Answer:
Madison Company
On the basis of the payback period decision model, the project that should be selected is:
c. Project P
Explanation:
a) Data and Analysis:
Project P Project Q Project R Project S Project T
Cost of investment $32,000 $38,200 $57,100 $47,400 $53,000
Net cash flow
Year 1 $5,200 $3,200 $4,300 $26,000 $15,900
Year 2 $9,600 $15,300 $16,900 $8,400 $15,800
Year 3 $12,700 $14,700 $21,000 $6,400 $16,100
Year 4 $15,300 $19,300 $31,000 $4,300 $11,000
Year 5 $52,000 $2,100 $10,000
Total net cash flow $94,800 $54,600 $83,200 $45,100 $58,800
Year 4 Year 4 Year 4 Unable Year 4
b) While four of the five projects pay back within Year 4, Project P has the added advantage of more total cash inflows. It is followed closely by Project R. The payback period as a capital appraisal method relies on counting the years or periods when the project's investment will be recovered. The payback period method does not evaluate projects based on the time value of money unless the modernized discounted payback period method is used.
The payback period method is a method that considers the number of months or years it takes to return the initial investment.
When more than one investment is being considered under payback period, the investment with the shortest payback period will be selected.
Since the net cash inflows of each year for each project is different, the following formula is used in the attached photo to calculate the payback period:
Payback period = A + (X / Y) ………………….. (1)
Where:
A = Year immediately preceding to year of recovery
X = Amount left to be recovered
Z = Cash inflow in the year of final recovery
Before equation (1) is used, cumulative net cash inflows is first calculated as done in the attached photo.
From the attached photo, we have:
Project P’s payback period = 3.29 years
Project Q’s payback period = 3.26 years
Project R’s payback period = 3.48 years
Project S’s payback period = after 5 years
Project T’s payback period = 3.47 years
Based on above the above, b. Project Q should be selected because it has the shortest payback period which is 3.26 years.
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In a private enterprise economic system, consumers can choose from a variety of
products as a result of
O inflation.
O limited government control.
competition.
the collection of taxes.
Answer:
the answer is competition
Computer Wholesalers restores and resells notebook computers. It originally acquires the notebook computers from corporations upgrading their computer systems, and it backs each notebook it sells with a 90-day warranty against defects. Based on previous experience, Computer Wholesalers expects warranty costs to be approximately 4% of sales. Sales for the month of December are $400,000. Actual warranty expenditures in January of the following year were $13,000. Required: 1. Does this situation represent a contingent liability? Why or why not?2. Record warranty expenditures and warranty liability for the month of December based on 6% of sales.3. Record the payment of the actual warranty expenditures of $13,000 in January of the following year. 4. What is the balance in the Warranty Liability account after the entries in Requirements 2 and 3?
Answer:
1. Yes, because it is probable and can be reasonably estimated.
2. Debit Warranty Expense for $24,000; and Credit Warranty Liability for $24,000.
3. Debit Warranty Liability for $13,000; and Credit Cash for $13,000.
4. Balance in the Warranty Liability account = $11,000
Explanation:
1. Does this situation represent a contingent liability? Why or why not?
Yes, this situation represent a contingent liability.
This is because a contingent liability can be described as a liability that is probable with an amount that can be reasonably estimated.
2. Record warranty expenditures and warranty liability for the month of December based on 6% of sales.
Warranty expense = Sales for the month of December * Expected warranty costs as a percentage of sales = $400,000 * 6% = $24,000
Therefore, the journal entries will look as follows:
Date General Journal Debit ($) Credit ($)
Dec. Year 1 Warranty Expense 24,000
Warranty Liability 24,000
(To record warranty expenditures and liability.)
3. Record the payment of the actual warranty expenditures of $13,000 in January of the following year.
The journal entries will look as follows:
Date General Journal Debit ($) Credit ($)
Jan. Year 2 Warranty Liability 13,000
Cash 13,000
(To record actual warranty expenditures.)
4. What is the balance in the Warranty Liability account after the entries in Requirements 2 and 3?
Balance in the Warranty Liability account = Warranty Liability - Cash paid = $24,000 - $13,000 = $11,000
B MC Qu. 12-143 Analysis reveals that a company had a net increase... Analysis reveals that a company had a net increase in cash of $20,440 for the current year. Net cash provided by operating activities was $18,400; net cash used in investing activities was $10,200 and net cash provided by financing activities was $12,240. If the year-end cash balance is $24,600, the beginning cash balance was:
Answer:
$4,160
Explanation:
Calculation for what the beginning cash balance was:
Using this formula
Beginning cash balance=Ending balance-Increase in cash
Let plug in the formula
Beginning cash balance = $24,600 − $20,440 Beginning cash balance= $4,160
Therefore the beginning cash balance was: $4,160
Suppose that France and Germany each produce wheat and cars. By using all available resources and technology, France can produce at most 30 units of wheat and 12 cars per year, and Germany can produce at most 25 units of wheat and 15 cars per year. Suppose that, to protect the domestic car industry, the government of France decides that France will produce 6 cars per year. Assuming that opportunity costs are constant, at most how many units of wheat can France produce?
Answer:
15
Explanation:
Opportunity cost is the cost of the next best option forgone when one alternative is chosen over other alternatives
For France, the opportunity cost of producing one car = 30/12 = 2.5 wheats
If the production of cars is fixed at 6 cars per year, the highest amount of wheat that would be produced = 2.5 x 6 = 15
A loss contingency can be accrued when it is certain that funds are available to settle the disputed amount. the amount of the loss can be reasonably estimated and it is probable that an asset has been impaired or a liability has been incurred. it is probable that an asset has been impaired or a liability incurred even though the amount of the loss cannot be reasonably estimated. an asset may have been impaired.
Answer: The amount of the loss can be reasonably estimated and it is probable that an asset has been impaired or a liability has been incurred.
Explanation:
A loss contingent is an expense that is based on a future event for instance, if the company loses a law suit and would have to pay settlement costs.
Loss contingents are only permitted to be accrued if the probability that they will happen is likely and even at that, the amount of loss needs to be capable of being reasonably estimated. This way, a proper estimate can be made that will represent the situation adequately.
An increase in the price of dairy products produced domestically will be reflected in a. both the GDP deflator and the consumer price index. b. the GDP deflator but not in the consumer price index. c. neither the GDP deflator nor the consumer price index. d. the consumer price index but not in the GDP deflator.
Answer:
a. both the GDP deflator and the consumer price index.
Explanation:
The Gross Domestic Products (GDP) is the measure of the total market value of all finished goods and services made within a country during a specific period.
Simply stated, GDP is a measure of the total income of all individuals in an economy and the total expenses incurred on the economy's output of goods and services in a particular country.
The CPI (Consumer Price Index) overstates the underlying inflation rate because when the price of a commodity rises, consumers tend
to purchase less of it and seek for
substitutes instead. Conversely, as the price of a commodity falls, consumers tend to purchase more
of it.
Hence, an increase in the price of dairy products produced domestically will be reflected in both the GDP deflator and the consumer price index.
Jennifer is the CEO of JustFixIt Inc., a firm that merges technology with commercial hardware. She has been struggling with the decision to allocate her resources for the development of a new system or go to the market and search for an already established system. The Board of Directors for JustFixIt Inc. suggested that enter a contractual agreement with a partner. This scenario best illustrates the concept of
Answer:
When ASI Inc. declared a dividend of $20,000,000, its market value increased from $8 ... Competitors have found it extremely difficult to imitate Gene Electronics Inc.'s ... CEO of JustFixIt Inc., a firm that merges technology with commercial hardware. She has been struggling with the decision to allocate her resources for the ...
Explanation:
