Answer:
Musick Foods Wholesale Co. is permitted by the US GAAP to use the LIFO (Last In, First Out) inventory valuation method. The use of LIFO offers Musick and other firms the opportunity to save on taxes as well as better match their revenue to their latest costs when prices are rising.
Explanation:
Using LIFO method of measuring the value of inventory, the costs of the most recent products purchased (or produced) by Musick Foods are the first to be expensed. It is not that in practice, those costs expensed refer to the units being sold first, it is merely an assumption permitted by the US FASB under her generally accepted accounting principles (GAAP).
Alfarsi Industries uses the net present value method to make investment decisions and requires a 15% annual return on all investments. The company is considering two different investments. Each require an initial investment of $15,600 and will produce cash flows as follows: End of Year Investment A B 1 $ 8,600 $ 0 2 8,600 0 3 8,600 25,800 The present value factors of $1 each year at 15% are: 1 0.8696 2 0.7561 3 0.6575 The present value of an annuity of $1 for 3 years at 15% is 2.2832 The net present value of Investment B is:
Answer:
Net present value $1,363.50
Explanation:
The computation of the net present value of B is shown below:
Year Cash flows PVIFA factor at 15% Present value
0 -$15,600 1 -$15,600
1 0 0.8696 0
2 0 0.7561 0
3 25,800 0.6575 $16,963.50
Net present value $1,363.50
A project will produce cash inflows of $1,750 a year for four years. The project initially costs $10,600 to get started. In year five, the project will be closed and as a result should produce a cash inflow of $8,500. What is the net present value of this project if the required rate of return is 13.75%?
What is the IRR for the project?
What is the PI for the project?
What is the payback period for the project?
(If the project never pays back then enter 0 for the answer).
What is the discounted payback period for the project? (If the project never pays back then enter 0 for the answer).
Answer:
Follows are the solution to the given choices:
Explanation:
[tex]\to CF_0 = -10600\\\\\to CF_1 to\ CF_4 = 1750\\\\\to CF_5 = 8500\\\\\to Rate =13.75 \%\\\\[/tex]
calculating NPV:
[tex]NPV = NPV(Rate,CF_1\ to \ CF_4) + CF_0[/tex]
[tex]= NPV(13.75 \% ,1750,1750,1750,1750,8500) -10600\\[/tex]
[tex]= \$ (1,011.40)[/tex]
Calculating the IRR for the project:
[tex]IRR = IRR(CFs) \\\\[/tex]
[tex]= IRR(-10600,1750,1750,1750,1750,8500)\\\\ = 10.63 \%[/tex]
Calculating the PI for the project:
[tex]PI = \frac{\text{PV of Future CFs}}{\text{Initial Investment}}[/tex]
[tex]= \frac{NPV(13.75 \% ,1750,1750,1750,1750,8500)}{10600}[/tex]
[tex]= \frac{\$ 9,588.60}{10600}\\\\ = 0.90[/tex]
So what's the plan payback time? (if it's never given directly by the venture, enter 0 for the reply).
[tex]\to 10600 - (1750+1750+1750+1750) = 3600\\\\[/tex]
The PB occurs in [tex]Y_5 = 4 + \frac{(8500-3600)}{8500}\\\\[/tex]
[tex]= 4 + \frac{(4900)}{8500}\\\\ = 4 + \frac{(49)}{85}\\\\ = 4.58 \ yrs[/tex]
The program's payback method, (if it's never paid back by the project, enter 0 for the answer)
Because CF's PV is $9,588.60, Disc Payback won't happen. '0' is the answer.
During the current quarter, a firm produces consumer goods and adds some of those goods to its inventory rather than selling them. The value of the goods added to inventory is:____.
a. not included in the current quarter GDP.
b. included in the current quarter GDP as a statistical discrepancy.
c. included in the current quarter GDP as consumption.
d. included in the current quarter GDP as investment.
Answer:
b) included in the current quarter GDP as investment
Explanation:
We are informed from the question that
During the current quarter, a firm produces consumer goods and adds some of those goods to its inventory rather than selling them.
In this case, The value of the goods added to inventory is included in the current quarter GDP as investment, the GDP which measure the growth rate as far as economics is concerned in the firm. It should be noted that any Inventories in this year are use to be recorded in the same year GDP, it doesn't matter if they are yet to be sold out.
Inventory can be regarded as valuable asset in business owner to be able to know the amount that it's in their hand at that period of time.
types are Work-In-Progress, finished goods, maintainable aw well as Raw Materials. Better financial decisions can be made if the type of inventory is known.
1- your FICO credit score based on which of these (there can be more than one right than one right answer )
A) how much money you owe
B) whether you've plaid on time or late
C) how long new credit you have
E) whether you asked for new credit recently
2- Your FICO credit score calculated on which of these (there can be more than one right answer)
A) Payment History
B) amounts owed
C) length of credit history
D) New Credit
E) Credit Mix
3- How long does a bankruptcy stay on your credit?
4- What should you do if you find something incorrect on your credit report?
5- You are entitled to two free credit reports per year per bureau
true or false
6- If you find something in error on your report and you report it in writing to the bureau, what must they do?
7- What is a credit freeze?
8- Does your age factor into your credit score
yes or No
9- Does your marital status factor into your credit score
yes or No
10- what is a mix of Credit mean?
11- At what percentage of credit card usage, does it start affecting your score in a negative way?
Answer:
Ll
Explanation:
1- all
2-all
3- 7 year
4-
5-f
6- the credit bureau investment your claim
8- ifree way to limit who can see your credit report
Midtown Holdings Inc. contracts to sell a commercial parking garage to Nuevo Property LLC. The contract provides that if Midtown does not close the deal by a certain date, it must pay the buyer one-half of the value of the property. This provision is not enforceable if it is
Answer:
A penalty clause.
Explanation:
As the word penalty implies, it's said to come back as a sort of punishment towards who faults during a breach towards a contract, it can come as a punishment or forfeiture of a said paper, property or something tangible. it's sometimes seen to heavily levy it defaulters in an exceedingly monetary aspect during a lot of cases. An example will be seen when parties to a construction contract may agree that, if one party fails to deliver materials on time specified the project is delayed, it'll pay a hard and fast sum of cash per day, until delivery is created. It will be beneficial to use liquidated damages clauses, for various reasons.
briefly explain goals of business
To the extent that employers conduct a social media background check on job candidates, best practices are all of the following except_________
Answer:
Limit access to private information by friending someone
Explanation:
When conducting recruitment of an individual employers sometimes do background checks on the person's social media information.
There however needs to be consideration of the person's privacy in doing this.
There should be use of only publicly available information, background check can be done by a third party that is not making hiring decision, and do not request username and password for social media platforms.
It is not best practice to befriend a person on social media in order to obtain their private information.
Answer:
Social Media Mistakes
Taking pictures or talking about drug use
Drinking alcohol
Posting too often
Lying about an absence
Talking bad about previous job or coworker
Ranting about politics
Lying about eligibilities
Grammatical and spelling error
Explanation:
Suppose you are interested in obtaining a mortgage loan for $250,000 in order to purchase your principal residence. Your lender has suggested that you might be interested in taking an FHA loan. In order to do so, you must pay an additional up-front mortgage insurance premium (UFMIP) of 1.0% of the mortgage balance. If the interest rate on the fully amortizing mortgage loan is 5% and the term is 30 years, what is your monthly mortgage payment assuming the UFMIP is financed
Answer:
$1,355.47
Explanation:
if you are going to finance the up-front mortgage insurance premium, then the total principal of the loan will increase by 1%, so it will be = $250,000 x 1.01 = $252,500. It is normal to finance UFMIP payments since they are additional closing costs and the whole purpose of FHA loans is to allow more people to be able to buy a house.
we can use the present value of an annuity formula to determine the monthly payment.
monthly payment = principal / PV annuity factor
principal = $252,500PV annuity factor = 186.2816monthly payment = $252,500 / 186.2816 = $1,355.474722 ≈ $1,355.47
I prepared an amortization schedule in order to check the answer. At the end the final balance is $3.83, but that is because you have to round to the nearest cent. If the payment is rounded to $1,355.48, the the balance is -$4.50.
8.Kline and Salomon form the KS Partnership as 50/50 partners. Kline contributes equipment that has a fair market value of $60,000 and an adjusted basis of $45,000. In addition, the equipment is subject to a $10,000 loan that KS Partnership is assuming. What amount represents Kline's initial basis in the partnership
Answer: $40,000
Explanation:
Kline brings in equipment that is worth $60,000 but has a basis of $45,000.
The equipment however is subject to a loan of $10,000.
This loan will have to be deducted from the basis. The partnership however is assuming the loan and Kline is only 50% liable in the partnership so Kline's basis will only be affected by half of the loan.
Basis = 45,000 - 5,000
= $40,000
a. Calculate book value per share of common stock. b. Assume that the company also had $1,000,000 worth of convertible bonds. The bonds are convertible at one $1,000 bond into 150 shares of stock. There are also stock options to buy 120,000 shares at a price of $5 per share. The stock is currently trading at $30 per share.Recalculate your answer to part a) taking into account dilutive effects of the above.
Answer:
The correct answer is "$8.65".
Explanation:
The given question is incomplete. Please find attachment of the complete question.
The given values are:
Total stockholders equity
= 4980000
Preferred stock
= 1000000
Number of common stock issued
= 460000
So,
The book value per share of common stock will be:
= [tex]\frac{ (Total \ Stockholders \ Equity - Preferred \ Stock)}{No. \ of \ common \ stock \ issued}[/tex]
On putting the values, we get
= [tex]\frac{(4980000 - 1000000)}{460000}[/tex]
= [tex]\frac{3980000}{460000}[/tex]
= [tex]8.65[/tex]$
To save for retirement, Jamie decides to invest in an annuity that pays 5% annual interest, compounded annually. If Jamie contributes $2,000 annually for 20 years, how much interest would she earn during the 20 years?
Answer:
Interest= $26,131.91
Explanation:
Giving the following information:
Annual deposit= $2,000
Number of periods= 20 years
Interest rate= 5%
First, we need to calculate the future value using the following formula:
FV= {A*[(1+i)^n-1]}/i
A= annual deposit
FV= {2,000*[(1.05^20) - 1]} / 0.05
FV= $66,131.91
Now, we can determine the interest earned:
Interest= future value - total investment
Interest= 66,131.91 - 20*2,000
Interest= $26,131.91
What are the sources of brand equity?
Answer:
Ello, Imposter here
Explanation:
Brand equity is the commercial value that derives from consumer perception of the brand name of a particular product or service, rather than from the product or service itself.
hope this helps :P
Answer: According to Keller (2003) and his CBBE model, brand equity emerges from two sources namely brand awareness and brand image. According to this model, consumers build associations in their minds around a brand as the result of the marketing programs companies develop for their brands.
Explanation: None.
Suppose that a nation has a labor force of 100 people. In January, Amy, Barbara, Carine, and Denise are unemployed; in February, those four find jobs, but Evan, Francesco, George, and Horatio become unemployed. Suppose further that every month, the previous four who were unemployed find jobs and four different people become unemployed. Throughout the year, however, the same three people — Ito, Jack, and Kelley — continually remain unemployed because their skills are a poor match with employers' requirements. a. Calculate this nation's frictional unemploymentLOADING... rate. nothing% (Enter your response as a percentage rounded to two decimal places.)
Answer:
frictional unemployment rate = 4%
Explanation:
Ito, Jack, and Kelley fall under structural unemployment, meaning that they are unemployed because their skills do not match the requirements for current job openings.
Every month, other 4 people lose their jobs, but then find a new job next month (first Amy, Barbara, Carine, and Denise, then Evan, Francesco, George, and Horatio, and then 4 others). These people suffer from frictional unemployment, which refers to temporal transitions between jobs. These transactions may even be voluntary, i.e. people quitting their jobs in order to search for better jobs.
total frictional unemployment = 4 people
total labor force = 100 people
frictional unemployment rate = 4 / 100 = 4%
If a firm raised its pricea and discovered that its toatl revenue fell, then the demand for its product is:______.
a. relatively inelastic.
b. perfectly inelastic.
c. income inferior.
d. relatively elastic.
Answer:
Option d (Relatively elastic) would be the correct solution.
Explanation:
The demand for some of its commodities becomes relatively elastic, i.e. the price drop contributed to a large decrease or change in the number requested, thus lowering the overall sales. It could be contrasted to other options for elasticity-comparatively inelastic, completely inelastic, perfectly elastic even elastic units.All 3 other options are not connected to the hypothetical offered. So, the option here was the best one.
Once you’ve saved 25 years for retirement, how much can you draw from the retirement account over the next 30 years? In cell B14, enter a formula to calculate how much you can pay yourself from the retirement account every month.
Answer:
you have to use the payment formula in excel:
=PMT (rate, nper, pv, [fv], [type])
where:
rate = the interest rate earned by your retirement account . If the distributions re annual, then use the annual rate, if the distributions are monthly, then you must adjust the effective monthly rate. nper = number of distributions. Assuming that you will only withdraw once a year, then nper = 30. If you are going to collect monthly distributions, then nper = 360. pv = the present value of your retirement account. fv (optional) = by default it = 0, so it is correct for this problem. type (optional) = by default the payments are considered an ordinary annuity, which should work in this case.for e.g., assuming that you have $1,000,000 in your retirement account, you can earn 6% interest rate and you will receive 30 distributions.
=PMT (6%,30,1000000, [fv], [type]) = -$72,648.91
Excel uses a minus sign because the principal will decrease as distributions are made.
Flo enters into a contract with Global Shipping Ltd. to insure and ship a painting from France to the United States for a certain price. Global makes a mistake in adding the costs, which results in a contract price that is $1,000 less than the true cost. Most likely, a court would a. enforce the contract as is. b. allow the parties to rescind the contract. c. award damages to Global for the mistake. d. award damages to Flo for the mistake.
Answer:
b. Allow the parties to rescind the contract
Explanation:
Flo enters into a contract with Global Shipping Ltd. to insure and ship a painting from France to the United States at a certain amount mentioned in the contract. However, Global Shipping Ltd. makes a mistake in calculating the costs. As a result, a contract price is equal to the amount that is $1,000 less than the true cost. Most likely, a court would allow the parties to rescind the contract.
Option b. is correct.
Smith lives in a world with two time periods: current period and future period. His income in each period is $10,000. A) Draw his intertemporal budget constraint when the interest rate is 33%. B) If Smith consumes $10,000 in each period, show his best affordable bundle and the indifference curve that passes through it. C) Graphically show how Smith's current consumption changes when the interest rate falls to 0%.
Answer and Explanation:
Answer and explanation attached
Assume that, on January 1, 2021, Matsui Co. paid $1,296,000 for its investment in 48,000 shares of Yankee Inc. Further, assume that Yankee has 240,000 total shares of stock issued. The book value and fair value of Yankee's identifiable net assets were both $480,000 at January 1, 2021. The following information pertains to Yankee during 2021: Net income $ 240,000 Dividends declared and paid $ 72,000 Market price of common stock on 12/31/2021 $ 29 /share What amount would Matsui report in its year-end 2021 balance sheet for its investment in Yankee
Answer:
$1,329,600
Explanation:
Calculation for the amount that Matsui would report in its year-end 2021 balance sheet for its investment in Yankee
First step is to find the Percentage of shares acquired
Percentage of shares acquired = 48,000 / 240,000 = 20%
Last step is to find the Balance sheet Amount to be reported
Using this formula
Investment = Cost + 20% of Net income - 20% of dividends declared
Let plug in the formula
Investment=$1,296,000 + (20% x $240,000) - (20% x $72,000 )
Investment=$1,296,000+$48,000-$14,400
Investment=$1,329,600
Therefore the amount that Matsui would report in its year-end 2021 balance sheet for its investment in Yankee will be $1,329,600
Imagine that you are holding 5,800 shares of stock, currently selling at $65 per share. You are ready to sell the shares but would prefer to put off the sale until next year due to tax reasons. If you continue to hold the shares until January, however, you face the risk that the stock will drop in value before year-end. You decide to use a collar to limit downside risk without laying out a good deal of additional funds. January call options with a strike price of $70 are selling at $5, and January puts with a strike price of $60 are selling at $6. What will be the value of your portfolio in January (net of the proceeds from the options) if the stock price ends up at $51, $65, $71
Answer:
call strike price $70
call premium received $5
put strike price $60
put premium paid $6
you pay $5 - $6 = -$1
stock price
$51 $65 $71
stock value $51 $65 $71
put value $9 - -
call value - - -$1
premium paid -$1 -$1 -$1
net stock value $59 $64 $69
total # of stocks 5,800 5,800 5,800
portfolio's value $342,200 $371,200 $400,200
Select the examples of common Administration and Administrative Support workplaces, employers, and tasks. Check
all that apply.
Marshall provides counseling to students and their families in his home.
Dina organizes and maintains student records in the front office of a public middle school.
Hal works in a library teaching classes about how to perform research.
Tamika works as the leader of a university, setting goals, reviewing budgets, and hiring workers.
Jorge organizes training events and activities for teachers in a private elementary school to improve their teaching
skills.
Jocelyn creates textbooks and instructional workbooks for students to use.
Answer:The answer is b,d,e or 2 4 5
Explanation:Cause I said so
Answer:
2,4,5
Explanation:
i got it right
A firm has sales of $1,220, net income of $226, net fixed assets of $544, and current assets of $300. The firm has $101 in inventory. What is the common-size balance sheet value of inventory?
Answer:
11.97%
Explanation:
To get the common size balance sheet value of inventory , we need to calculate first the total asset value.
Total asset = Net fixed assets + Current assets
= $544 + $300
= $844
Therefore,
Common size value of inventory
= Inventory / Total assets
=$101/$844
= 0.1197
= 11.97%
Asonia Co. will pay a dividend of $4.60, $8.70, $11.55, and $13.30 per share for each of the next four years, respectively. The company will then close its doors. If investors require a return of 10.8 percent on the company's stock, what is the stock price
Answer: $28.55
Explanation:
From the question, we are told that Asonia Co. will pay a dividend of $4.60, $8.70, $11.55, and $13.30 per share for each of the next four years, respectively and that the investors require a return of 10.8 percent on the company's stock.
The stock price will be calculated as:
= $4.60/(1 + 0.108) + $8.70/(1 + 0.108)^2 + $11.55/(1 + 0.108)^3 + $13.30/(1 + 0.108)^4
= $28.55
Therefore, the stick price is $28.55
Curtis invests $450,000 in a city of Athens bond that pays 6.50 percent interest. Alternatively, Curtis could have invested the $450,000 in a bond recently issued by Initech, Incorporated that pays 7.75 percent interest with similar risk as the city of Athens bond. Assume that Curtis's marginal tax rate is 24 percent. How much explicit tax would Curtis incur on interest earned on the Initech, Incorporated bond
Answer:
$8,370
Explanation:
Calculation for How much explicit tax would Curtis incur on interest earned on the Initech, Incorporated bond
Using this formula
Explicit tax = (Amount Invested× Interest percentage)×Marginal tax rate
Let plug in the formula
Explicit tax =($450,000×7.75%)×24%
Explicit tax =$34,875×24%
Explicit tax =$8,370
Therefore the amount of explicit tax that Curtis would incur on interest earned on the Initech, Incorporated bond will be $8,370
A decreasing-cost industry is one in which: a. contraction of the industry will decrease unit costs. b. input prices fall or technology improves as the industry expands. c. the long-run supply curve is perfectly elastic. d. the long-run supply curve is upsloping.
Answer:
B
Explanation:
When we talk of a decreasing cost industry, we refer to an industry in which the expansion of the industry will lead to a decrease in the unit production cost.
So with respect to the question at hand , the correct answer is that the input prices will fall as industry expands
The case of a a technological improvement is expected to drive a decrease in the input prices for production in the expanding industry
Division A makes a part that it sells to customers outside of the company. Data concerning this part appear below: Selling price to outside customers $ 40 Variable cost per unit $ 30 Total fixed costs $ 10,000 Capacity in units 20,000 Division B of the same company would like to use the part manufactured by Division A in one of its products. Division B currently purchases a similar part made by an outside company for $38 per unit and would substitute the part made by Division A. Division B requires 5,000 units of the part each period. Division A has ample capacity to produce the units for Division B without any increase in fixed costs and without cutting into sales to outside customers. If Division A sells to Division B rather than to outside customers, the variable cost be unit would be $1 lower. What is the lowest acceptable transfer price Division A should accept
Answer:
Lower selling price= $29
Explanation:
Giving the following information:
Selling price to outside customers $40
Variable cost per unit $ 30
Total fixed costs $10,000
Capacity in units 20,000
The variable cost per unit would be $1 lower.
Because there is unused capacity, and it won't affect other sales. We will not take into account the fixed costs.
The lower selling price is the one that equals the unitary variable cost.
Unitary variable cost= 30 - 1= $29
Lower selling price= $29
DEFINITION TERM 1. Subtract outstanding checks from the bank balance. 2. Compute the adjusted bank balance. 3. Enter the bank statement balance from the bank statement. 4. Add any unrecorded deposits to the bank balance. 5. Compute the adjusted book balance. 6. Add any unrecorded interest earned to the book balance. 7. Enter the company’s book balance from its accounting records. 8. Subtract bank fees from the book balance.
Complete Question:
What are the correct steps in preparing Bank reconciliation in a chronological order?
Answer:
1. Enter the bank statement balance from the bank statement.
2. Add any unrecorded deposits to the bank balance.
3. Subtract outstanding checks from the bank balance.
4. Compute the adjusted bank balance
5. Enter the company's book balance from its accounting records.
6. Add any unrecorded interest earned to the book balance.
7. Subtract bank fees from the book balance.
8. Compute the adjusted book balance.
Explanation:
In Financial accounting, bank reconciliation can be defined as an evaluation which give a complete details of the financial items responsible for any difference between the balance of the cash account in the balance sheet and the cash balance reported in an entity's bank statement. These reconciliations should be done at regular intervals so as to ensure a balanced record of the cash account are kept by an organization or firm.
A bank reconciliation mainly computed by an accountant, gives the difference between the balance in relation to the bank statement and the cash balance with respect to the accounting records of the depositor in a particular financial institution.
The steps in preparing Bank Reconciliation in a chronological order are;
1. You should enter the bank statement balance from the bank statement.
2. Add any unrecorded deposits to the bank balance.
3. Subtract outstanding checks from the bank balance.
4. Compute the adjusted bank balance
5. Enter the company's book balance from its accounting records.
6. Add any unrecorded interest earned to the book balance.
7. Subtract bank fees from the book balance.
8. Compute the adjusted book balance.
The main purpose of a bank reconciliation is to ensure an accuracy of the depositor's financial information and that of it's bank records.
In a nutshell, after a reconciliation of the bank statement, the adjusted bank balance should be equal to the company's ending adjusted cash balance on the balance sheet.
The correct steps in preparing Bank reconciliation in a chronological order: 1. Enter the bank statement balance from the bank statement.
2. Add any unrecorded deposits to the bank balance.
3. Subtract outstanding checks from the bank balance.
4. Compute the adjusted bank balance
5. Enter the company's book balance from its accounting records.
6. Add any unrecorded interest earned to the book balance.
7. Subtract bank fees from the book balance.
8. Compute the adjusted book balance.
Bank reconciliation is described in financial accounting as an evaluation that provides detailed details of the financial items responsible for any difference between the balance of the cash account on the balance sheet and the cash balance shown on an entity's bank statement. These reconciliations should be performed at regular periods to guarantee that an organisation or corporation maintains a balanced record of the cash account.
A bank reconciliation, which is mostly computed by an accountant, provides the difference between the balance on the bank statement and the cash balance on the depositor's accounting records at a certain financial institution.
Learn more about bank, here:
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Dana, who is a trained yoga instructor, spends 4 hours on Monday baking and packing 10 boxes of cookies. She sells the cookies for $10 a box. Given that she can also teach yoga for $80 an hour, what is her opportunity cost of baking cookies?A. $220 B. $800 C. $320 D. $420 E. $100
Answer:
c. $320
Explanation:
Opportunity cost is an economic term for expressing cost in terms of forgone alternatives. The opportunity cost of Dana is calculated as;
Hours spent baking cookies = 4 hours, the amount earned per hour when Dana is working as yoga instructor = $80.
Therefore, the total opportunity cost of Dana, when she is baking is cookies;
= 4 hours × $80
= $320.
Equipment $ 7,000 Office supplies $ 2,100 Salaries expense 3,600 Rental revenue 1,100 Consulting revenue 15,000 Advertising expense 520 Cash 9,200 Prepaid insurance 1,600 Utilities expense 320 Accounts payable 3,220 Note payable 3,000 Note receivable 3,100 Accounts receivable 4,100 Rent expense 2,600 A. Lopez, Withdrawals 2,600 Unearned revenue 420 Required: 1. Prepare a March income statement for the business. 2. Prepare a March statement of owner’s equity. The owner’s capital account balance at February 28 was $0, and the owner invested $14,000 cash in the company on March 1. 3. Prepare a March 31 balance sheet. Hint: Use the owner’s capital account balance calculated in part 2.
Answer:
Required: 1. Income statement for the month end March 31 .
$ $
Rental revenue 1,100
Consulting revenue 15,000
Total Revenue 16,100
Less Expenses :
Salaries expense 3,600
Advertising expense 520
Utilities expense 320
Rent expense 2,600 (7,040)
Net Income/(loss) 9,060
Required: 2. Statement of owner’s equity for the month end March 31.
Beginning Balance $0
Capital $14,000
Add Profit earned during the month $ 9,060
Less A. Lopez, Withdrawals ($2,600)
Ending Balance $20,460
Required: 3. Balance Sheet as at March 31.
Non Current Assets
Equipment $ 7,000
Total Non Current Assets $ 7,000
Current Assets
Office supplies $ 2,100
Cash $ 9,200
Prepaid insurance $1,600
Note receivable $ 3,100
Accounts receivable $4,100
Total Current Assets $20,100
Total Assets $27,100
Equity and Liabilities
Equity
Equity $20,460
Total Equity $20,460
Liabilities
Accounts payable $ 3,220
Unearned revenue $ 420
Note payable $ 3,000
Total Liabilities $6,640
Total Equity and Liabilities $27,100
Explanation:
First prepare the Income statement to determine the profit earned during the year.
Then, include this profit in the statement of owners equity to determine the month end balance.
Lastly, prepare the balance sheet, remember to include the equity balance you have calculated.
The following data were taken from the financial statements of Gates Inc. for the current fiscal year. Property, plant, and equipment (net) $3,200,000 Liabilities: Current liabilities $1,000,000 Note payable, 6%, due in 15 years 2,000,000 Total liabilities $3,000,000 Stockholders’ equity: Preferred $10 stock, $100 par (no change during year) $1,000,000 Common stock, $10 par (no change during year) 2,000,000 Retained earnings: Balance, beginning of year $1,570,000 Net income 930,000 $2,500,000 Preferred dividends $100,000 Common dividends 400,000 500,000 Balance, end of year 2,000,000 Total stockholders’ equity $5,000,000 Sales $18,900,000 Interest expense $120,000 Assuming that long-term investments totaled $3,000,000 throughout the year and that total assets were $7,000,000 at the beginning of the current fiscal year, determine the following. Round to one decimal place.
Answer:
a. Ratio of fixed assets to long term liabilities = Fixed assets / Long term liabilities = $3,300,000/$2,000,000 = 1.6
b. Ratio of liabilities to stockholders equity = Total liabilities/Total stockholders equity = $3,000,000/$5,000,000 = 0.6
c. Ratio of net sales to assets = Net sales / Average Total assets(Excluding investments)
= $18,900,000 / [(7,000,000+8,000,000)/2] - 3,000,000
= $18,900,000 / 7,500,000 - 3,000,000
= $18,900,000 / $4,500,000
= 4.2
Note: Total assets at the end of the year = $3,000,000+$5,000,000 = $8,000,000
Carver Inc. purchased a building and the land on which the building is situated for a total cost of $879,500 cash. The land was appraised at $242,742 and the building at $768,683. Required What is the accounting term for this type of acquisition
Answer:
Lump-sum purchase
Explanation:
Lump-sum purchase occurs when two or more assets are acquired for a single price and requires that the purchase price be shared out to the assets bought on the basis of the fair market value of each asset acquired.
In this case, we allocated the purchase of $879,500 to each asset as follows:
Cost of land=$242,742/($242,742+$768,683)*$879,500
cost of land=$ 211,080
Cost of building=$768,683/($242,742+$768,683)*$879,500
Cost of building=$668,420
