Answer and Explanation:
The Journal entries are shown below:-
1. Accounts receivableDr, $6,000 ($30,000 - $24,000)
To Fees earned $6,000
(Being accrued income is recorded)
2. Depreciation expense - Computors Dr, $1,500
To Accumulated Depreciation - Computors $1,500
(Being depreciation expenses is recorded)
3. Depreciation expense - Office Furniture Dr, $1,750
To Accumulated Depreciation - Office Furniture $1,750
(Being depreciation expenses is recorded)
4. Salaries expense Dr, $2,450 (14,950 - $12,500)
To Salaries and wages payable $2,450
(Being salaries expenses is recorded)
5. Insurance expenses Dr, $1,300
To Prepaid insurance $1,300
(Being expired insurance is recorded)
6. Office supplies expense Dr, $480
To Office supplies $480
(Being office supplies expenses is recorded)
7. Utilities expenses Dr, $70 ($1,320 - $1,250)
To Accounts payable $70
(Being utilities expenses accrued is recorded)
You are the manager of a retail store. You believe the economy is in a recession and that sales for the month will be unusually slow. Since you have complete discretion over the pricing at your location, you decide to have a store-wide sale and offer ten percent off all merchandise for a three-day period. You don't expect your superiors to criticize this decision as you believe they, along with the majority of the other store managers, feel the same way about the economy as you do. Which one of the following applies to you?
Explanation:
In the scenario described above, it can be identified that the behavioral characteristic of the manager is that he is an aggressive person.
This type of behavior has as main characteristics the expression of your ideas, needs and feelings to the detriment of those of other people, this can be seen in the question in the excerpt that says that the manager made an important decision for the business without consulting his superiors because you believe they feel the same way about the economy as you do.
Although this aggressive behavior can sometimes be expressive, it can also lead to hostility.
Pearson Motors has a target capital structure of 30% debt and 70% common equity, with no preferred stock. The yield to maturity on the company's outstanding bonds is 12%, and its tax rate is 40%. Pearson's CFO estimates that the company's WACC is 13.70%. What is Pearson's cost of common equity
Answer:
Cost of common equity is 16.49%
Explanation:
The WACC of weighted average cost of capital is the cost of a firm's capital structure. The capital structure of the firm can comprise of the following components namely debt, preferred stock and common stock.
For a firm which has only debt and equity, the WACC is calculated as follows,
WACC = wD * rD * (1 - tax rate) + wE * rE
Where,
w represents the weight of each componentr represents the cost of each componentwe multiply the cost of debt (rD) by (1 - tax rate) to calculate the after tax cost of debtPlugging in the values of the available components, we can calculate the cost of common equity to be,
0.1370 = 0.3 * 0.12 * (1 - 0.4) + 0.7 * rE
0.1370 = 0.0216 + 0.7 * rE
0.1370 - 0.0216 = 0.7 * rE
0.1154 / 0.7 = rE
rE = 0.164857 or 16.4857% rounded off to 16.49%
Kingbird, Inc. assembled the following information in completing its March bank reconciliation: Balance per bank $21800 Outstanding checks $4425 Deposits in transit $7150 NSF check $460 Bank service charge $145 Cash balance per books $25080 As a result of this reconciliation, Kingbird will
Answer:
Kingbird will have an Updated Cash Balance of $21,800
Explanation:
First Step is to Update the Bank Balance in the Cash Book
Debit :
Cash Balance before adjustment $25,080
Dishonored Cheques $460
Totals $25,540
Credit:
Bank service charge $145
Balance as per updated Cash Book $25,395
Totals $25,540
Then Prepare a Bank Reconciliation Statement
Bank Reconciliation Statement
Balance at Bank as per Cash Book $25,395
Add Unpresented Cheques $7,150
Less Lodgements not yet credit ($4,425)
Balance as per Bank Statement $21,800
Conclusion.
Kingbird will have an Updated Cash Balance of $21,800
You are a manager for Herman Millera major manufacturer of office furniture. You recently hired an economist to work with engineering and operations experts to estimate the production function for a particular line of office chairs. The report from these experts indicates that the relevant production function is:Q = 2(K)1/2(L)1/2where K represents capital equipment and L is labor. Your company has already spent a total of $8,000 on the 9 units of capital equipment it owns. Due to current economic conditions, the company does not have the flexibility needed to acquire additional equipment. If workers at the firm are paid a competitive wage of $120 and chairs can be sold for $400 each, what is your profit-maximizing level of output and labor usage?
Answer:
$4000 is the correct answer to the given question .
Explanation:
The marginal cost with compare to the labor can be written as
[tex]MC\ = \frac{dQ}{dL} \\MC =\frac{d\ ( 2(K)1/2(L)1/2\ )}{dL} \\\\MC=\frac{\sqrt{K} }{\sqrt{L} }[/tex]
Here K=9 units putting this value in the previous equation we get
[tex]MC\ = \frac{\sqrt{9} }{\sqrt{L} }[/tex]
[tex]MC=\frac{3}{\sqrt{L} }[/tex]
We can find the value of labor by the given formula that are given below
[tex]V *MC=\ W\\400\ *\frac{3}{\sqrt{L} }\ =120\\ L=10[/tex]
From the given question that are mention in question
Q = 2(K)1/2(L)1/2
Putting the value of K and L in the given equation we get
[tex]Q\ =2 * \sqrt{9} \ * \sqrt{100} \\Q\ = 60[/tex]
So profit maximizing output is =$60 chairs as the chairs can be sold for the $400 each so = $60 * $400 *10=$24000 chairs
As the competitive wage of $120 for 100 units as well as the total of $8,000 on the 9 units of capital equipment
=$20000
Therefore profit-maximizing level of output =$24000-$20000=$4000
A corporation had the following assets and liabilities at the beginning and end of this year. Assets Liabilities Beginning of the year $ 57,000 $ 24,436 End of the year 115,000 46,575
a. Owner made no investments in the business, and no dividends were paid during the year.
b. Owner made no investments in the business, but dividends were $1,400 cash per month.
c. No dividends were paid during the year, but the owner did invest an additional $45,000 cash in exchange for common stock.
d. Dividends were $1,400 cash per month, and the owner invested an additional $35,000 cash in exchange for common stock.
Determine the net income earned or net loss incurred by the business during the year for each of the above separate cases.
Answer and Explanation:
The computation of the net income earned or net loss incurred is shown below
Particulars a b c d
Equity beginning $32,564 $32,564 $32,564 $32,564
balance
Add:
Owner investment $45,000 $35,000
Less:
Dividend $16,800 $16,800
Add: Net income $35,861 $52,661
or net loss ($9,139) $17,661
Equity ending
balance $68,425 $68,425 $68,425 $68,425
Working notes
The beginning and ending equity balance is
Beginning equity balance is
= Total assets beginning - total liabilities beginning
= $57,000 - $24,436
= $32,564
Ending equity balance is
= Total assets ending - total liabilities ending
= $115,000 - $46,575
= $68,425
The annual year dividend is
= $1,400 × 12 months
= $16,800
Doogan Corporation makes a product with the following standard costs: Standard Quantity or Hours Standard Price or Rate Direct materials 8.4 grams $ 3.00 per gram Direct labor 0.5 hours $ 30.00 per hour Variable overhead 0.5 hours $ 8.00 per hour The company produced 6,200 units in January using 40,310 grams of direct material and 2,480 direct labor-hours. During the month, the company purchased 45,400 grams of the direct material at $2.70 per gram. The actual direct labor rate was $29.30 per hour and the actual variable overhead rate was $7.80 per hour. The company applies variable overhead on the basis of direct labor-hours. The direct materials purchases variance is computed when the materials are purchased. The variable overhead rate variance for January is:
Answer:
Variable manufacturing overhead rate variance= $496 favorable
Explanation:
Giving the following information:
Standard:
Variable overhead 0.5 hours $ 8.00 per hour
The company produced 6,200 units using 2,480 direct labor-hours. The actual variable overhead rate was $7.80 per hour.
To calculate the variable overhead rate variance, we need to use the following formula:
Variable manufacturing overhead rate variance= (standard rate - actual rate)* actual quantity
Variable manufacturing overhead rate variance= (8 - 7.8)*2,480
Variable manufacturing overhead rate variance= $496 favorable
Keith Inc. has 4 product lines: sour cream, ice cream, yogurt, and butter. Demand of individual products is not affected by changes in other product lines. 30% of the fixed costs are direct, and the other 70% are allocated. Results of June follow: Sour Cream Ice Cream Yogurt Butter Total Units sold 2,000 500 400 200 3,100 Revenue $ 10,000 $ 20,000 $ 10,000 $ 20,000 $ 60,000 Variable departmental costs 6,000 13,000 4,200 4,800 28,000 Fixed costs 5,000 2,000 3,000 7,000 17,000 Net income (loss) $ (1,000 ) $ 5,000 $ 2,800 $ 8,200 $ 15,000 Prepare an incremental analysis of the effect of dropping the sour cream product line. (Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).) $ $
Answer:
-2500
Explanation:
Incremental revenue is - $10,000. This is because the sour cream product line will drop.
Incremental variable departmental cost savings = $6,000. This is because the company will no longer incurr the variable cost of the sour cream product line.
Incremental savings in fixed cost =
5000 * 30%
= 5000 * 0.30 = 1,500. This is because only 30% of the fixed costs are direct costs, which will no longer be incurred by the company)
Incremental increase in net income =
(Incremental revenue + Incremental variable departmental cost savings + Incremental savings in fixed cost)
-$10,000 + $6,000 + $1,500 = - $2,500
Incremental increase in net income = -2500
The agreed cost of an item to be purchased by a business on credit is 4000. The applicable cost will be debited to advertising expenses. The item is subject to 5% goods and services tax GST and 5% provincial sales tax PST. Nguyen it’s transaction is recorded what amount will be credited to Accounts Payable?
Answer:
$4,400
Explanation:
For calculation of amount that will be credited to Accounts Payable first we need to find out the GST and PST which is shown below:-
Goods and services tax GST = Goods and services percentage × Purchase cost
= 5% × $4,000
= $200
Provisional sales tax PST = Provisional sales tax percentage × Purchase cost
= 5% × $4,000
= $200
Amount that will be credited to accounts payable = Purchase cost + Goods and services tax GST + Provisional sales tax PST
= $4,000 + $200 + $200
= $4,400
Therefore for computing the amount that will be credited to accounts payable we simply added all the taxes value with the purchase cost.
You have just won a lottery! You will receive $50,000 a year beginning one year from now for 20 years. If your required rate of return is 10%, what is the present value of your winning lottery ticket
Answer:
The prize is worth $425,678.19.
Explanation:
Giving the following information:
Cash flow= $50,000
The number of years= 20 years.
Rate of return= 10%
First, we need to calculate the final value using the following formula:
FV= {A*[(1+i)^n-1]}/i
A= annual cash flow
FV= {50,000*[(1.1^20)-1]}/0.1
FV= $2,863,749.98
Now, the present value:
PV= FV/(1+i)^n
PV= 2,863,749.98/(1.1^20)
PV= $425,678.19
In a repeated game, deterring entry A. is not a rational strategy if money is lost fighting the first potential entrant. B. cannot form a subgame perfect Nash equilibrium. C. is not possible. D. may require losing money fighting the first potential entrant.
Answer:
D. May require losing money fighting the first potential entrant.
Explanation:
In this form of gaming, or in this game theory, it is said to be played over and over and could possible be in a probability form that is why that possibly, as a player, you may require loosing money fighting the first potential entrant.
Fighting the first entrant, possibility of cooperating means that their could be a possible compromise in order to carry on accepting a payoff over a certain period of time, knowing that if we do not uphold our end of the deal, our opponent may decide not to either.
Carol Corp. has a component that is a discontinued operation. The revenues and expenses of the component were $100,000 and $160,000, respectively. The component was sold with a resulting gain of $200,000. The tax rate is 40%. What is the total gain or loss on discontinued operations (net-of-tax effects) that will be reported on the income statement
Answer:
$84,000 gain
Explanation:
Carol Corp total gain or loss on discontinued operation
Revenues $100,000
Expenses $160,000
Components sold $200,000
Hence:
$100,000-$160,000+$200,000
= $140,000
$140,000 * net of tax 60%
= $84,000 gain
The tax rate of 40%
100%-40%=60% as the net tax rate
Bramble Corp. has the following accounts at December 31: Common Stock, $11 par, 5,450 shares issued, $59,950; Paid-in Capital in Excess of Par—Common Stock $33,400; Retained Earnings $47,000; and Treasury Stock, 550 shares, $12,650. Prepare the stockholders’ equity section of the balance sheet
Answer:
$127,700
Explanation:
Bramble Corp stockholders’ equity section of the balance sheet
Stockholders’ equity
Paid-in Capital
Capital Stock
Common Stock 59,950
Additional Paid-in Stock
Paid-in Capital in Excess of Par Common Stock 33,400
Total paid in Capital 93,350
Retained Earnings 47,000
Total paid in Capital and Retained Earnings 140,350
(93,350+47,000)
LessTreasury Stock 12,650
Total Stockholders’ equity 127,700
(140,350-12,650)
Suppose the long run production function is given by: Q = 4*L +2K2. Marginal product of labor (MPL) = 4 and wage is $10. Marginal product of capital (MPK) = 4K and price of capital (K) is $10. Consider the allocation labor (L) = 10 and capital (K) = 2. Based on information, the MRTS is equal to:_____
a. 4
b. 2.5
c. 1
d. 0.5
Answer:
ANSWER IS BELOW :)
Explanation:
Not sure, but I think its is 56(6)+k-6
Assume yourself as a Marketing Specialist of a Company and Determine the New Product Development Process by manufacturing a New Product for your company.
Explanation:
Assuming my company produces body care products and decides to introduce a new product–a toothbrush, the development process would involve:
1. Idea Generation:
It smbegins with an idea or imagination of what the ideal toothbrush would be, what problem would it solve for consumers. The idea could be random or it could be as a result of an identified need.
2. Idea Evaluation:
Remember, it is one thing to have an idea but another to have an idea that would work. Therefore, quality time would be taken to separate workable ideas about the ideal toothbrush from bad ones. This idea evaluation process is a very useful stage in the product development process.
3. Concept Development and Testing:
Remember, testing the concept about the new toothbrush allows for an expanded idea. The prototype of the toothbrush would be tested with consumers to find out whether the idea is worth the effort. Their feedback would be noted to improve the product further.
4. Marketing strategy
5. Final Product development
Dexter Industries purchased packaging equipment on January 8 for $135,000. The equipment was expected to have a useful life of three years, or 27,000 operating hours, and a residual value of $5,400. The equipment was used for 10,800 hours during Year 1, 8,100 hours in Year 2, and 8,100 hours in Year 3. Required: 1. Determine the amount of depreciation expense for the three years ending December 31, by (a) the straight-line method, (b) the units-of-activity method, and (c) the double-declining-balance method. Also determine the total depreciation expense for the three years by each method. Round the final answers for each year to the nearest whole dollar.
Answer:
Straight line depreciation method : $43,200, $43,200, $43,200
Unit of activity deprecation method = $51,840, $38,880, $38,880
Double declining method = $90,000, $30,000, $10,000
Total depreciation expense
Straight line depreciation and unit of activity method = $129,600
Double declining method = $130,000
Explanation:
Depreciation is a method used in expensing the cost of an asset.
the straight-line method = (Cost of asset - Salvage value) / useful life
( $135,000 - $5,400) / 3 = $43,200
The straight line depreciation method allocates the same deprecation expense for each year of the useful life of the asset. So, the depreciation expense for the 3 years is $43,200.
Total depreciation expense = $43,200 × 3 = $129,600
the units-of-activity method =( hours used in year / total hours of the machine) x (Cost of asset - Salvage value)
Deprecation expense in the first year =
( $135,000 - $5,400) × (10,800 / 27,000) =
$129,600 × 0.4 = $51,840
Deprecation expense in the second year
( $135,000 - $5,400) × (8,100 / 27,000) = $129,600 × 0.3 = $38,880
Deprecation expense in the third year
( $135,000 - $5,400) × (8,100 / 27,000) = $129,600 × 0.3 = $38,880
Total depreciation expense = $129,600
Double declining method = depreciation factor × cost of the asset
Depreciation factor = 2 x (1/useful life)
Deprecation factor = 2 / 3 = 0.666667
Depreciation in the first year =
0.666667 x $135,000 = $90,000
Book value = $135,000 - $90,000 = $45,000
Deprecation expense in the second year =
0.666667 x $45,000 = $30,000
Book value = $45,000 - $30,000 = $15,000
Deprecation expense in the third year =
0.666667 x $15,000 = $10,000
Total depreciation expense = $130,000
I hope my answer helps you
Prepare journal entries for each transaction and identify the financial statement impact of each entry. The financial statements are automatically generated based on the journal entries recorded. Assume Wright Services began the year with the following balances: Cash, $59,000; Accounts receivable, $11,800; and Common stock, $70,800. Jan. 1 Kay Wright invested $21,800 cash in the company in exchange for common stock. Jan. 2 The company provided services to a client and immediately received $6,300 cash. Jan. 3 The company received $11,800 cash from a client in payment for services to be provided next year. Jan. 4 The company received $7,100 cash from a client in partial payment of accounts receivable. Jan. 5 The company borrowed $14,000 cash from the bank by signing a note payable.
Answer:
Jan. 1
Cash $21,800 (debit)
Common Stock $21,800 (credit)
Effect : Assets = Increase $21,800, Equity = Increase $21,800, Liabilities = No Effect
Jan. 2
Cash $6,300 (debit)
Service Revenue $6,300 (credit)
Effect : Assets = Increase $6,300, Equity = Increase $6,300, Liabilities = No Effect
Jan. 3
Cash $11,800 (debit)
Deferred Revenue $11,800 (credit)
Effect : Assets = Increase $11,800, Equity = No Effect, Liabilities = Increase $11,800
Jan. 4
Cash $7,100 (debit)
Trade Payable $7,100 (credit)
Effect : Assets = Increase $7,100, Equity = No Effect, Liabilities = Decrease $7,100
Jan. 5
Cash $14,000 (debit)
Trade Payable $7,100 (credit)
Effect : Assets = Increase $14,000, Equity = No Effect, Liabilities = Increase $14,000
Explanation:
The following items will appear in Balance Sheet :
AssetsLiabilityEquityThe following items will appear in Income Statement :
RevenueIncomeExpensesThe Following Items will Appear in Statement of Cash flow :
Common StocksYou are thinking about renting a room in a house next year with three of your friends. For each month's rent, you are willing to pay $435, your first friend is willing to pay $400, your second friend is willing to pay $560, and your third friend is willing to pay $460. The landlord agrees to offer each of you separate leases but will charge you all the same price: $400. You decide this is a good deal, so you and your friends move in. A couple of months later, you learn from someone who knows the landlord that he would have been willing to rent each room for $350 per month. 1. What is the amount of producer surplus per month?$ 2. What is the amount of total consumer surplus per month? $ 3. What is the amount of total surplus each month? $
Answer:
1. $200
2. $255
3. $455
Explanation:
Producer surplus is the difference between the least price a producer is willing to sell his product and the price of the good.
Producer surplus = price - least price of the product
$400 - $350 = $50
$50 × 4 = $200
Consumer surplus is the difference between the willingness to pay of a consumer and the price of the good.
Consumer surplus = highest amount a consumer would be willing to pay - price
Consumer surplus for me = $435 - $400 = $35
Consumer surplus for the first friend = $400 - $400 = 0
Consumer surplus for the second friend = $560 - $400 = $160
Consumer surplus for the third friend = $460 - $400 = $60
Total surplus = consumer surplus + producer surplus
Total consumer surplus = $60 + $160 + 0 + $35 = $255
Total surplus = $255 + $200 = $455
I hope my answer helps you
You are setting up a new aircraft repair station. The business, which is organized as a corporation, will provide avionics systems, parts, components, and modification, along with avionics inspection and maintenance services. The business has leased a hangar from the airport authority where the work will be performed. The hangar includes areas for office space, parts and tool storage, aircraft and avionics maintenance, and a customer lounge. In addition to yourself as general manager, the company's initial employees will include a secretary/receptionist, a bookkeeper, a stocks and stores clerk, and 5 A&P mechanics (one of whom holds FAA inspection authorization as well as a pilot license and will perform maintenance flight checks on customers' aircraft before approving them for return to service following maintenance). The business will not own or operate any aircraft, except for the maintenance flight check operations on customer aircraft. Describe in detail all insurance you will need to purchase for each aspect of this business.
Answer: The answer is given below
Explanation:
All the insurance needed to purchase for each aspect of the business include:
The business, which is organized as a corporation, will provide avionics systems, parts, components, and modification, along with avionics inspection and maintenance services.
1. Product liability insurance – It is also referred to as the products and completed operations coverage. It is needed by every businesses which perform aircraft inspection, its maintenance, modification, or deals in the supply of aircraft parts, lubricants and fuel. With this insurance, the corporation can cover claims from faulty workmanship, errors and defect in design, oversights in inspection, and faults in the quality, storage and the delivery of fuels.
The business has leased a hangar from the airport authority where the work will be performed. The hangar includes areas for office space, parts and tool storage, aircraft and avionics maintenance, and a customer lounge:
2. Hangarkeepers liability insurance - This covers the liability of the business for damage to the aircraft of other people’s when their aircrafts are in the care or control of the corporation. In a situation whereby the airplane of a customer is damaged by the employee, the hangar collapses due to natural disasters, this coverage pays off the airplanes’ damages and losses. Also, “Premises Liability” is required because the hangar include areas for a customer lounge. Premises liability covers customers injuries that takes place in the corporation’s hangar.
In addition to yourself as general manager, the company's initial employees will include a secretary/receptionist, a bookkeeper, a stocks and stores clerk, and 5 A&P mechanics (one of whom holds FAA inspection authorization as well as a pilot license and will perform maintenance flight checks on customers' aircraft before approving them for return to service following maintenance).
3. Compensation insurance coverage for workers - This is mandatory for employers as it compensate the employees for on-the-job injuries that occur.
The business will not own or operate any aircraft, except for the maintenance flight check operations on customer aircraft:
4. Hangarkeeper insurance - Here,.the business requires hangarkeeper’s insurance because the business will neither own nor operate any aircraft, but will do flight check and the maintenance on other people’s airplanes that are being stored or worked on in their facility.
The price of trade Suppose that Greece and Austria both produce jeans and wine. Greece's opportunity cost of producing a bottle of wine is 3 pairs of jeans while Austria's opportunity cost of producing a bottle of wine is 11 pairs of jeans. By comparing the opportunity cost of producing wine in the two countries, you can tell that production of wine and ______ has a comparative advantage in the has a comparative advantage in the production of jeans Suppose that Greece and Austria consider trading wine and jeans with each other. Greece can gain from specialization and trade as long as it receives more than _______ of jeans for each bottle of wine it exports to Austria. Similarly, Austria can gain from trade as long as t receives more than ________ of wine for each pair of jeans it exports to Greece. Based on your answer to the last question, which of the following prices of trade (that is, price of wine in terms of jeans) would allow both Austria and Greece to gain from trade? a) 13 pairs of jeans per bottle of wine b) 6 pairs of jeans per bottle of wine c) 2 pairs of jeans per bottle of wine d) 1 pair of jeans per bottle of wine
Answer: The answers are given below
Explanation:
a. Greece has a comparative advantage in the production of wine because Greece has a lower opportunity cost of wine and, therefore Austria has a comparative advantage in the production of jeans.
(b) Greece can gain from the specialization as long as Greece gets more than 3 pair of jeans per bottle of wine and Austria can gain from the specialization as long as it gets more than 0.09 (= 1/11) bottle of wine per a pair of jeans.
(c) Trade is mutually beneficial when terms of trade lies in between the opportunity costs in both countries.
3 jeans < TOT < 11 jeans
So, the permissible terms of trade are:
6 pairs of jeans
Answer:
(1). Greece has comparative advantage in wine while Austria has comparative advantage in jeans.
(2). Greece can gain from specialization as long as it gets more than 5 pair of jeans per bottle of wine.
Austria can gain from specialization as long as it gets more than 1/11 bottle of wine per pair of jeans.
(3). Trade is mutually beneficial as long as terms of trade lies in between opportunity costs in both countries.
Explanation:
So, for the first gap in the question, it can be filled as follows;
(1). Greece has comparative advantage in wine while Austria has comparative advantage in jeans.
Reason: this is because of the lower opportunity cost in Greece for wine will make the country have a comparative advantage in wine.
(2). Greece can gain from specialization as long as it gets more than 5 pair of jeans per bottle of wine.
Austria can gain from specialization as long as it gets more than 1/11 bottle of wine per pair of jeans.
(3). Trade is mutually beneficial as long as terms of trade lies in between opportunity costs in both countries.
3 jeans < TOT < 11 jeans
So, the permissible terms of trade are:
Between 4 pairs of jeans to 10 pairs of jeans.
ThreePoint Sports Inc. manufactures basketballs for the Women’s National Basketball Association (WNBA). For the first 6 months of 2020, the company reported the following operating results while operating at 80% of plant capacity and producing 120,300 units.
Amount Sales $4,571,400
Cost of goods sold 3,713,667
Selling and administrative expenses 534,893
Net income $322,840
Fixed costs for the period were cost of goods sold $960,000, and selling and administrative expenses $257,000.
In July, normally a slack manufacturing month, ThreePoint Sports receives a special order for 10,000 basketballs at $28 each from the Greek Basketball Association (GBA). Acceptance of the order would increase variable selling and administrative expenses $0.75 per unit because of shipping costs but would not increase fixed costs and expenses.
Prepare an incremental analysis for the special order. (Round all per unit computations to 2 decimal places
Answer:
Incremental profit is $120,500
Explanation:
First and foremost, it is noteworthy that accepting the new order would increase revenue, cost of goods sold as well as the variable selling and administrative expenses.
Selling price per unit=$4,571,400/120,300=$38
variable cost of goods sold per unit=($3,713,667-$960,000)/120,300=$22.89
increase in selling and administrative expenses by unit is $0.75
initial variable selling and administrative expenses per unit=($534,893- $257,000)/120,300=$2.31
revised variable selling and administrative expenses per unit=$2.31 +$0.75=$3.06
Incremental analysis
Increase in revenue($38*10,000) $380,000
increase in cost of goods sold($22.89*10,000) ($228,900)
increase in selling & admin. exp.($3.06*10,000) ($30,600)
incremental profit $120,500
If U.S. residents purchase $600 billion worth of foreign assets and foreigners purchase $300 billion worth of U.S. assets:_______.
A. U.S. net capital outflow is $300 billion; capital is flowing into the U.S.
B. U.S. net capital outflow is $300 billion; capital is flowing out of the U.S.
C. U.S. net capital outflow is -$300 billion; capital is flowing into the U.S.
D. U.S. net capital outflow is -$300 billion; capital is flowing out of the U.S.
Answer:
Option B
U.S. net capital outflow is $300 billion; capital is flowing out of the U.S.
Explanation:
We can understand it better when we see it from the perspective of where the money is going to and coming from.
If U.S. residents purchase $600 billion worth of foreign assets, the money is going out from the U.S because residents are paying money to a foreign country for their assets.
From this, the U.S is losing $600 billion
If foreigners purchase $300 billion worth of U.S. assets. This means that money is coming from foreigners into the U.S because the funds will be paid to United States organizations.
This means that the U.s is gaining $300 billion
To get the net flow of cash, we subtract the inflow and the outflow. this will give $300 billion - $ 600 billion. Which is = $300 billion outflow.
Hence the U.S. net capital outflow is $300 billion and capital is flowing out of the U.S.
Janice would like to send her parents on a cruise for their 25th wedding anniversary. She has priced the cruise at $15,000 and she has 5 years to accumulate this money. How much must Janice deposit annually in an account paying 10 percent interest in order to have enough money to send her parents on the cruise
Answer:
Annual deposit= $2,456.96
Explanation:
Giving the following information:
The number of years= 5 years
Final value= $15,000
Interest rate= 10%
We need to calculate the annual deposit to reach the objective. We will use the following formula:
FV= {A*[(1+i)^n-1]}/i
A= annual deposit
Isolating A:
A= (FV*i)/{[(1+i)^n]-1}
A= (15,000*0.1) / [(1.10^5)-1]
A= $2,456.96
A merchant offers a large group of items at $30\%$ off. Later, the merchant takes $20\%$ off these sale prices and claims that the final price of these items is $50\%$ off the original price. As a percentage of the original price, what is the difference between the true discount and the merchant's claimed discount
Answer:
The difference between the true discount and the merchant's claimed discount is that the true discount is 44% which is a 6% discount difference with the merchant's claimed discount of 50%.
Explanation:
If the merchant offers a 30% discount on products and then, offers a 20% discount from the price with the 30% discount that is not a 50% discount from the initial price as it would be a 44% discount. This because when the 30% discount is applied, customers will pay the 70% of the price and when the 20% discount is applied over this price, customers would be paying the 56% of the price:
70*0.2= 14
70-14= 56
This means that customers would be getting a 44% discount because:
100-56= 44
According to this, the difference between the true discount and the merchant's claimed discount is that the true discount is 44% which is a 6% discount difference with the merchant's claimed discount of 50%.
Answer:
6%
Explanation:
The first discount means that the customer will pay 70% of the original price. The second discount means a selling price of 80% of the discounted price. Because 0.80(0.70) = 0.56 = 56%, the customer pays 56% of the original price and thus receives a discount, for a difference of 50% - 44% = 6%.
Emperial Jewelers manufactures and sells a gold bracelet for $403.00. The company’s accounting system says that the unit product cost for this bracelet is $264.00 as shown below:
Direct materials $ 143
Direct labor 90
Manufacturing overhead 31
Unit product cost $ 264
The members of a wedding party have approached Imperial Jewelers about buying 28 of these gold bracelets for the discounted price of $370.00 each. The members of the wedding party would like special filigree applied to the bracelets that would require Imperial Jewelers to buy a special tool for $456 and that would increase the direct materials cost per bracelet by $11. The special tool would have no other use once the special order is completed.
To analyze this special order opportunity, Imperial Jewelers has determined that most of its manufacturing overhead is fixed and unaffected by variations in how much jewelry is produced in any given period. However, $7.00 of the overhead is variable with respect to the number of bracelets produced. The company also believes that accepting this order would have no effect on its ability to produce and sell jewelry to other customers. Furthermore, the company could fulfill the wedding party’s order using its existing manufacturing capacity.
Required:
1. What is the financial advantage (disadvantage) of accepting the special order from the wedding party?
2. Should the company accept the special order?
Answer and Explanation:
1. The computation of the financial advantage or disadvantage is shown below:
Estimated demand 28 units
Particulars Per unit Total
Sales revenue $370 $10,360
Less: Variable cost
Direct material
($143 + $11) $154 -$4,312
Direct labor $90 -$2,520
Variable Manufacturing
overhead $7 -$196
Total variable cost $251 ($7,028)
Contribution margin $119 $3,332
Less: Additional cost -$456
Net income or loss $2,876
2. Since there is a net income of $2,876 so the special order should be accepted.
Kinetic Company estimates that overhead costs for the next year will be $1,600,000 for indirect labor and $400,000 for factory utilities. The company uses direct labor hours as its overhead allocation base. If 50,000 direct labor hours are planned for this next year, then the plantwide overhead rate is $.025 per direct labor hour.
a. True
b. False
Information related to Kerber Co. is presented below.1. On April 5, purchased merchandise from Wilkes Company for $23,000, terms 2/10, net/30, FOB shipping point.2. On April 6, paid freight costs of $900 on merchandise purchased from Wilkes.3. On April 7, purchased equipment on account for $26,000.4. On April 8, returned damaged merchandise to Wilkes Company and was granted a $3,000 credit for returned merchandise.5. On April 15, paid the amount due to Wilkes Company in full.Collapse question partPrepare the journal entries to record these transactions on the books of Kerber Co. under a perpetual inventory system. (Credit account titles are automatically indented when amount is entered. Do not indent manually. Record journal entries in the order presented in the problem.)
Answer and Explanation:
The journal entries are as follows
1. On April 5
Merchandise Inventory $23,000
To Accounts Payable $23,000
(Being the merchandise purchased on the account is recorded)
For recording this we debited the merchandise inventory as it increased the assets and credited the account payable as it increased the liabilities
2. On April 6
Merchandise Inventory $900
To Cash $900
(Being freight cost is paid is recorded)
For recording this we debited the merchandise inventory as it increased the assets and credited the cash as it decreased the assets
3. On April 7
Equipment $26,000
To Accounts Payable $26,000
(Being equipment purchased on the account is recorded)
For recording this we debited the equipment as it increased the assets and credited the account payable as it increased the liabilities
4. On April 8
Accounts Payable $3,000
To Merchandise Inventory $3,000
(Being returned inventory is recorded)
For recording this we debited the account payable as it decreased the liabilities and credited the merchandise inventory as it decreased the assets
5. On April 15
Accounts Payable ($23,000 - $3,000) $20,000
To Cash $19,600
To Merchandise Inventory ($20,000 × 2%) $400
(Being payment is made is recorded)
For recording this we debited the account payable as it decreased the liabilities and credited the merchandise inventory and cash as it decreased the assets
What are the implications of CIC’s approach to staffing project teams? Is the company using project teams as training grounds for talented fast-trackers, or as dumping grounds for poor performers? How would you advise the CEO to correct the problem? Where would you start? Discuss how issues of organizational structure and power played a role in the manner in which project management declined in effectiveness at CIC.
Answer:
In simple words, This situation is premised on the genuine narrative of a productive institution that has permitted its operation managerial procedures to devolve to the juncture where assignment to something like a development team has often been a sign of deference as well as a symbol of a delayed termination.
The case includes problems of morale, structural impact on programs, and recruitment of the development team. It allows students the chance to see just how, if left untreated, specific behaviour patterns by senior managers and many others in the institution can operate against use of working groups to enhance employee profitability, but instead just make them an unloading ground for discontent and bad employees.
1. NPVs, IRRs, and MIRRs for Independent Projects
Edelman Engineering is considering including two pieces of equipment, a truck and an overhead pulley system, in this year's capital budget. The projects are independent. The cash outlay for the truck is $19,000, and that for the pulley system is $20,000. The firm's cost of capital is 12%. After-tax cash flows, including depreciation, are as follows:
Year Truck Pulley
1 $5,100 $7,500
2 5,100 7,500
3 5,100 7,500
4 5,100 7,500
5 5,100 7,500
Calculate the IRR for each project. Round your answers to two decimal places.
Answer:
IRR for truck = 10.68%
IRR for pulley = 25.41%
Explanation:
The 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 using a financial calculator:
Cash flow for the truck :
Cash flow in year 0 = $-19,000
Cash flow each year from year 1 to 5 = 5,100
IRR = 10.68%
Cash flow for the pulley :
Cash flow in year 0 = $-20,000
Cash flow each year from year one to five = $7,500
IRR = 25.41%
To find the IRR using a financial calacutor:
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.
I hope my answer helps you
Del Gato Clinic deposits all cash receipts on the day when they are received and it makes all cash payments by check. At the close of business on June 30, 2017, its Cash account shows an $15,239 debit balance. Del Gato Clinic’s June 30 bank statement shows $14,651 on deposit in the bank.
a. Outstanding checks as of June 30 total $1,745.
b. The June 30 bank statement lists a $95 service charge.
c. Check No. 919, listed with the canceled checks, was correctly drawn for $389 in payment of a utility bill on June 15. Del Gato Clinic mistakenly recorded it with a debit to Utilities Expense and a credit to Cash in the amount of $398.
d. The June 30 cash receipts of $2,247 were placed in the bank’s night depository after banking hours and were not recorded on the June 30 bank statement.
Answer:
cash account $15,239
bank statement $14,651
reconciliation per bank statement:
bank statement $14,651
+ deposits in transit $2,247
- outstanding checks ($1,745)
reconciled bank statement $15,153
reconciliation per cash account:
cash account $15,239
+ error on check No. 919, $9
- bank service fees ($95)
reconciled cash account $15,153
reconciled bank statement $15,153 = reconciled cash account $15,153
Required information The following information applies to the questions displayed below.)
Green Wave Company plans to own and operate a storage rental facility. For the first month of operations, the company has the following transactions.
1. January 1 Issue 10,000 shares of common stock in exchange for $35,000 in cash.
2. January 5 Purchase land for $20,500. A note payable is signed for the full amount.
3. January 9 Purchase storage container equipment for $8,300 cash.
4. January 12 Hire three employees for $2,300 per month.
5. January 18 Receive cash of $12,300 in rental fees for the current month.
6. January 23 Purchase office supplies for $2,300 on account.
7. January 31 Pay employees $6,900 for the first month's salaries.
Post each transaction to T-accounts and calculate the ending balance for each account. For each posting, indicate the corresponding transaction number and the appropriate transaction amount. Since this is the first month of operations, all T-accounts have a beginning balance of zero.
Answer:
Green Wave Company
T-Ledger Accounts:
1. Common Stock Account
Jan. 1 Cash Account $35,000
Cash Account
1. Jan. 1 Common Stock $35,000 3. Jan. 9 Equipment $8,300
5. Jan 18 Rental Fees $12,300 7. Jan. 31 Salaries $6,900
Jan. 31 Balance $32,100
$47,300 $47,300
Feb. 1 Balance $32,100
2. Land Account
Jan. 5 Note Payable $20,500
2. Note Payable Account
Jan. 5 Land $20,500
3. Equipment Account
Jan. 9 Cash $8,300
5. Rental Fees Revenue
Jan. 18 Cash $12,300
6. Office Supplies
Jan. 23 Accounts Payable $2,300
6. Accounts Payable
Jan. 23 Office Supplies $2,300
7. Salaries Expense
Jan. 31 Cash $6,900
Explanation:
T-Ledger accounts are ledger accounts in the form of the letter T. It has debit on the left-hand side and credit on the right-hand side. It is an accounting tool for determining balances.
