Answer:
A. December 18, 2020
Dr Cash 4,080,000
Cr 11% Bond payable (Face value) 4,000,000
Cr Premium on issue of Bond payable 80,000
January 2, 2021
Dr 9% Bonds Payable ( Face value) 3,000,000
Dr Loss on redemption of Bond 180,000
Cr Discount on Bond payable 60,000
Cr Cash 3,120,000
B. The LOSS is reported as an ORDINARY INCOME
Explanation:
A. Preparation of Journal entries
December 18, 2020
Dr Cash 4,080,000
($4,000,000/100)*102
Cr 11% Bond payable (Face value) 4,000,000
Cr Premium on issue of Bond payable 80,000
(4,080,000-4,000,000)
January 2, 2021
Dr 9% Bonds Payable ( Face value) 3,000,000
Dr Loss on redemption of Bond 180,000
[3,00,0000-(3,120,000+60,000)]
Cr Discount on Bond payable 60,000
($150,000/25)*10
Cr Cash 3,120,000
(3,000,000*104%)
B. Indication of the income statement treatment of the gain or loss from redemption.
The LOSS is reported as an ORDINARY INCOME
A manufacturing company that produces a single product has provided the following data concerning its most recent month of operations: Selling price $ 117 Units in beginning inventory 0 Units produced 2,900 Units sold 2,500 Units in ending inventory 400 Variable costs per unit: Direct materials $ 32 Direct labor $ 45 Variable manufacturing overhead $ 2 Variable selling and administrative expense $ 9 Fixed costs: Fixed manufacturing overhead $43,500 Fixed selling and administrative expense $15,000 The total gross margin for the month under absorption costing is:
Answer:
The correct answer is "57,500 ".
Explanation:
Unit product cost
= [tex]32 + 45 + 2 + \frac{43500}{2900}[/tex]
= [tex]94[/tex]
Gross margin = Sales - Cost of Goods Sold
= [tex](2500\times 117) - (2500\times 94)[/tex]
= [tex]292,500-235,000[/tex]
= [tex]57,500[/tex]
Part 1
Suppose that nominal GDP was $11 trillion in 2040 in Mordor. In 2050, nominal GDP was $15 trillion in Mordor. The price level fell 3% between 2040 and 2050, and population growth was 2%. Between 2040 and 2050 in Mordor,
nominal GDP growth was______ %
and economic growth was______ %. (Give your answers to one decimal place.)
Part 2
Suppose that nominal GDP was $20 trillion in 2040 in Mordor. In 2050, nominal GDP was $18 trillion in Mordor. The price level rose 3% between 2040 and 2050, and population growth was 2%.
Between 2040 and 2050 in Mordor, nominal GDP growth was________ %
and economic growth was______ %. (Give your answers to one decimal place.)
Part 3
Suppose that nominal GDP was $8 trillion in 2040 in Mordor. In 2050, nominal GDP was $10 trillion in Mordor. The price level rose 18.0% between 2040 and 2050, and population growth was 13.0%.
Between 2040 and 2050 in Mordor, nominal GDP growth was___________ %
and economic growth was______ %. (Give your answers to one decimal place.)
Answer:
Part 1
Suppose that nominal GDP was $11 trillion in 2040 in Mordor. In 2050, nominal GDP was $15 trillion in Mordor. The price level fell 3% between 2040 and 2050, and population growth was 2%. Between 2040 and 2050 in Mordor,
nominal GDP growth was 36.4%
and economic growth was 37.4%.
total nominal growth rate:
(15 - 11) / 11 = 0.3636 = 36.4%
economic growth = nominal GDP growth rate - change in price level - population growth rate = 36.36% - (-3%) - 2% = 37.36%
Part 2
Suppose that nominal GDP was $20 trillion in 2040 in Mordor. In 2050, nominal GDP was $18 trillion in Mordor. The price level rose 3% between 2040 and 2050, and population growth was 2%.
Between 2040 and 2050 in Mordor, nominal GDP growth was -10%
and economic growth was -15%
total nominal growth rate:
(18 - 20) / 20 = -0.1 = -10%
economic growth = nominal GDP growth rate - change in price level - population growth rate = -10% - 3% - 2% = -15%
Part 3
Suppose that nominal GDP was $8 trillion in 2040 in Mordor. In 2050, nominal GDP was $10 trillion in Mordor. The price level rose 18.0% between 2040 and 2050, and population growth was 13.0%.
Between 2040 and 2050 in Mordor, nominal GDP growth was 25%
and economic growth was -6%.
total nominal growth rate:
(10 - 8) / 8 = 0.25 = 25%
economic growth = nominal GDP growth rate - change in price level - population growth rate = 25% - 18% - 13% = -6%
Suppose, you own a screen-printing business and you enter into a contract with a local school to print 50 orange t-shirts with the school name and their mascot on the front. Each shirt costs $10. Before the shirts are delivered, the school breaches the contract. You are now stuck with 50 shirts you cannot resell because no one wants t-shirts with someone else's school name and mascot on the front. What amount can you sue for if you sue for damages
Answer: $500
Explanation:
Based on the scenario in the question, there's a breach of contract as the shirts aren't delivered and there are 50 t-shirts which cost $10 each that no one law is willing to buy because it has a school name and their mascot on the front.
Here, the maker of the shirt can sue for damages and since there's no resale, the amount to be sued for damages will be the price of each shirt multiplied by the total number of shirt. This will be:
= $10 × 50
= $500
11. Suppose domestically-produced apples have a price of $1.50 per pound and domestically-produced oranges have a price of $2.50. What combined contribution does domestic production of 2,000 pounds of apples and 1,000 pounds of oranges made to nominal GDP
Answer: $5500
Explanation:
Nominal GDP is when th current market prices of goods is being used to calculate the value of every goods and services for that particular country.
To solve this, we have to multiply the quantity of the goods by their prices. This will be:
= (2000 × $1.50) + (1000 × $2.50)
= $3000 + $2500
= $5500
Once a company has reached the decline phase, it should just go out of business and be done with it.
False
True
Answer:
Hmm.
Explanation:
False.
Sometimes, a company can make a huge comeback even after a major decline.
Lisah, Inc., manufactures golf clubs in three models. For the year, the Big Bart line has a net loss of $5,600 from sales $200,000, variable costs $175,000, and fixed costs $30,600. If the Big Bart line is eliminated, $19,600 of fixed costs will remain. Prepare an analysis showing whether the Big Bart line should be eliminated. (Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).)
Answer:
Continue Eliminate N.I. Increase/(Decrease)
Sales $200,000 $0 ($200,000)
- Variable Costs $175,000 $0 $175,000
Contribution margin $25,000 $0 ($25,000)
- Fixed Cost $30,600 $19,600 $11,000
Net Income (Loss) ($5,600) ($19,600) ($14,000)
Conclusion: The production line should be Continued, because eliminating the production line would lead to a further Decrease in Net Income by $14,000,
. What is the amount of the difference between the variable costing and absorption costing net operating incomes (losses)
Question Completion:
Diego Company manufactures one product that is sold for $76 per unit in two geographic regions-the East and West regions. The following information pertains to the company's first year of operations in which it produced 58,000 units and sold 54,000 units.
Manufacturing Variable costs per unit:
Direct materials $23
Direct labor 15
Variable manufacturing overhead 3
Variable selling and administrative 3
Fixed costs per year:
Fixed manufacturing overhead $1,160,000
Fixed selling and administrative $ 640,000
The company sold 40,000 units in the East region and 14,000 units in the West region. It determined that $320,000 of its fixed selling and administrative expense is traceable to the West region, $270,000 is traceable to the East region, and the remaining $50,000 is a common fixed expense. The company will continue to incur the total amount of its fixed manufacturing overhead costs as long as it continues to produce any amount of its only product.
Answer:
Diego Company
Difference = $170,000 - (72,000)
= $242,000
Explanation:
a)Data and Calculations:
Selling price = $76 per unit
Units sold = 54,000
Units produced = 58,000
Direct materials $23
Direct labor 15
Variable manufacturing overhead 3
Variable selling and administrative 3
Variable costs per unit: $44
Fixed costs per year:
Fixed manufacturing overhead $1,160,000
Fixed selling and administrative $ 640,000
Cost of Production:
Under variable costing:
Variable cost per unit X Units produced
= $44 * 58,000 = $2,552,000
Cost of goods sold = $44 * 54,000 = $2,376,000
Cost of Ending Inventory = $44 * 4,000 = $176,000
Under Absorption costing:
(Variable manufacturing costs * Units produced) + Fixed manufacturing overhead
= $41 * 58,000 + $1,160,000
= $3,538,000
Product Cost per unit = $3,538,000/58,000 = $61
Cost of goods sold = $61 * 54,000 = $3,294,000
Ending Inventory = $61 * 4,000 = $244,000
Sales Revenue = $76 * 54,000 = $4,104,000
Income Statement Under Variable Under Absorption
Sales Revenue $4,104,000 $4,104,000
Cost of goods sold 2,376,000 3,294,000
Gross profit $1,728,000 $810,000
Fixed costs:
Manufacturing overhead $1,160,000
Selling and administrative 640,000 $640,000
Total fixed costs $1,800,000 $640,000
Net operating losses $72,000 $170,000
Difference = $170,000 - (72,000) = $242,000
Clark Company estimated the net realizable value of its accounts receivable as of December 31, 2019, to be $167,000, based on an aging schedule of accounts receivable. Clark has also provided the following information: The accounts receivable balance on December 31, 2019 was $177,400. Uncollectible accounts receivable written off during 2019 totaled $12,200. The allowance for doubtful accounts balance on January 1, 2019 was $15,400. How much is Clark's 2019 bad debt expense
Answer: $7200
Explanation:
Clark's 2019 bad debt expense will be calculated thus:
Balance for allowance for doubtful accounts will be:
= $177400 - $167000
= $10400
The Uncollectible accounts written off will be:
= $15400 - $12200
= $3200
Clark's 2019 bad debt expense:
= $10400 - $3200
= $7200
Answer:
sry need to answer (points) :(
Explanation:
Essco Inc., a calendar year taxpayer, made two asset purchases this year. The first purchase was equipment costing $836,000, and the second purchase was a machine costing $494,000. Both assets are 7-year recovery property. Essco placed the machine in service on June 21 and the equipment in service on October 14. How many months of MACRS depreciation is Essco allowed for each asset this year?
Answer:
Essco should depreciate the first asset using the half year convention, which establishes a 14.29%. Depreciation expense for year 1 = $836,000 x 0.1429 = $119,464.40 ≈ $119,464.
In order for the mid quarter convention to apply, the value of the second asset should represent at least 40% of Essco's depreciable basis, but in this case it represents only $494,000 / ($494,000 + $836,000) = 37%. Since the mid quarter convention doesn't apply, Essco can also use the half year convention to depreciate the second asset. Depreciation expense for year 1 = $494,000 x 0.1429 = $70,592.60 ≈ $70,593.
Explanation:
A company will generally try to use the highest deprecation rate that it can or is allowed to. In this case, the company could depreciate the second asset using the mid quarter depreciation, but the depreciation rate is much lower. The idea is to pay less taxes, and unless required by regulations, a company should always choose the legal way to pay less taxes.
T. James, owner, invested $20,000 cash in Sustain Company in exchange for common stock. 2 The company purchased $13,000 of furniture made from reclaimed wood on credit. 3 The company paid $2,400 cash for a 12-month insurance policy on the reclaimed furniture. 4 The company billed a customer $12,000 in fees earned from preparing a sustainability report. 12 The company paid $13,000 cash toward the payable from the June 2 furniture purchase. 20 The company collected $12,000 cash for fees billed on June 4. 21 T.James invested an additional $19,000 cash in Sustain Company in exchange for common stock. 30 The company received $14,000 cash from a client for sustainability services for the next 3 months. Prepare general journal entries for the above transactions.
Answer:
Sustain Company
General Journal
1
Cash $20,000 (debit)
Common Stock $20,000 (credit)
Owner investment in the company
2
Office furniture $13,000 (debit)
Accounts Payable $13,000 (credit)
Wood furniture purchased on credit
3
Prepaid Insurance$2,400 (debit)
Cash $2,400 (credit)
Insurance paid in advance
4.
Accounts Receivable $12,000 (debit)
Service Revenue $12,000 (credit)
Services rendered on credit
12
Accounts Payable $13,000 (debit)
Cash $13,000 (credit)
Payment to suppliers
20
Cash $12,000 (debit)
Accounts Receivables $12,000 (credit)
Cash receipts from customers
21
Cash $12,000 (debit)
Common Stock $12,000 (credit)
Owners invest cash in exchange of common stock
30
Cash $14,000 (debit)
Deferred Revenue $14,000 (credit)
Cash received for services to be rendered
Explanation:
See journals and their narrations prepared above.
An organization that is offering unique, superior products or services to a wide market is pursing a strategy of _________
a. focused differentiation.
b. diversification.
c. differentiation.
d. cost focus.
e. cost leadership.
Answer:
The right approach is Option c (differentiation ).
Explanation:
Differentiation extends to how an organization splits itself into main elements. For larger firms, this would be common, the larger a corporation expands, the further differentiated itself appears for becoming. Businesses with either a significant amount of separation offer a huge amount of influence on some of these distinct elements.The other options given weren’t relevant to the case in question. So, the answer above would be the right one.
Michael bought stock in a large consumer products company. As a stockholder, he is prioritized in the distribution of a firm's dividends, but he doesn't have voting and control rights. What type of stockholder is Michael?
a. a common stockholder
b. a preemptive stockholder
c. a proxy stockholder
d. a secured stockholder
e. a preferred stockholder
Answer:
Preferred stockholder
Explanation:
Shareholders are investors that buy company shares in order to gain ownership in the company.
The company gives shareholders dividends on their shares owned out of profit.
Preferred stockholders are paid before other stockholders are settled.
However they do not have voting and controlling rights.
In the scenario above Michael is a preferred stockholder.
We sell to a customer paying with Visa and the fee is 2%. Part of the transaction would include a debit to:
Answer:
there are no available options, but the complete journal entry to record a credit card sale is:
Dr Cash account 98% of sale
Dr Credit card fees 2% of sale
Cr Sales revenue 100% of sale
Explanation:
Since VISA payments are automatic, you can debit cash directly. There is no need to debit accounts receivable and then once the payment is confirmed, debit cash. Some credit cards do not pay automatically, and in those cases you should debit accounts receivable.
Instead of credit card fees, some people use credit card discount, or credit card expense, but all these accounts are basically the same. They are all expense accounts.
The standard deviation of the market-index portfolio is 20%. Stock A has a beta of 2.00 and a residual standard deviation of 30%. a. Calculate the total variance for an increase of 0.10 in its beta. (Do not round intermediate calculations. Round your answer to the nearest whole number.) b. Calculate the total variance for an increase of 2.62% in its residual standard deviation. (Do not round intermediate calculations. Round your answer to the nearest whole number.)
Answer: Check attachment
Explanation:
a. Calculate the total variance for an increase of 0.10 in its beta.
The answer here is 0.2700
b. Calculate the total variance for an increase of 2.62% in its residual standard deviation.
The answer is 0.2664
Check the attachment for more explanation
The ratio of total cash, marketable securities, accounts receivable, and short-term notes to current liabilities is:
Answer:
Acid-test ratio
Explanation:
Acid-test ratio I finance can also be regarded as quick ratio, it gives the measurement of how an organization can utilize her quick asset as well as cash to settle her liabilities at at that current period.
It can be calculated theoretically using this expresion;
Quick ratio= (Current Asset- Inventory)/Current Liabilities
It should be noted that acid-test ratio gives The ratio of total cash, marketable securities, accounts receivable, and short-term notes to current liabilities. It enables to know shot term liquidity of a particular company.
A 10 percent three-year wage increase is provided as a 2 percent increase in the first year, 3 percent in the second year, and 5 percent in the third year. This is an example of a ________ contract.
Answer:
Back-loaded
Explanation:
A back-loaded contract can be defined as a contractual arrangement between two or more parties, in which higher costs are levied or higher benefits are accrued to a project towards the end of its term (duration) as against lower costs or benefits at its beginning.
This ultimately implies that, a back-loaded contract allows lower wage adjustment in the first year with a consequent higher increase towards the end of a contract.
In this scenario, a 10 percent three-year wage increase is provided as a 2 percent increase in the first year, 3 percent in the second year, and 5 percent in the third year. This is an example of a back-loaded contract.
What advantages do Sharepoint and similar products offer above and beyond the standard project management tools?
Answer and Explanation:
The advantages of sharepoint over similar products are as follows :
Sharepoint is customizable as some of the features and interface of the app can be customized to suit business needs
Sharepoint integrates with other Microsoft applications such as Microsoft Excel, Word, PowerPoint, MS Exchange Server and other ERP and CRM applications therefore increasing flexibility and reducing time consumption
There is also an intranet feature which is a collaborative platform that is used to share files and serve as an internal website for communication within a company
Sharepoint has a centralized administration where users can modify settings, update data and tweak features all in one place
Simpleton, Inc. budgeted a material cost of $10 per lb. They ended up purchasing 2,300 lbs at $16 per lb. and using 1,800 lbs for production. The material price variance is:
Answer:
Direct material price variance= $13,800 unfavorable
Explanation:
Giving the following information:
Simpleton, Inc. budgeted a material cost of $10 per lb.
Actual:
2,300 lbs at $16 per lb.
To calculate the direct material price variance, we need to use the following formula:
Direct material price variance= (standard price - actual price)*actual quantity
Direct material price variance= (10 - 16)*2,300
Direct material price variance= $13,800 unfavorable
Jasper Corp. has a selling price of $44, and variable costs of $25 per unit. When 14,600 units are sold, profits equaled $133,000. How many units must be sold to break-even?
A. 19,000
B. 12,000
C. 14,333
D. 5,000
Answer:
Break-even point in units= 7,600
Explanation:
Giving the following information:
Selling price= $44
Unitary variable cost= $25
When 14,600 units are sold, profits equaled $133,000.
First, we need to calculate the total fixed costs:
Fixed costs= Total contribution margin - net income
Fixed costs= 14,600*(44 - 25) - 133,000
Fixed costs= $144,400
To calculate the break-even point in units, we need to use the following formula:
Break-even point in units= fixed costs/ contribution margin per unit
Break-even point in units= 144,400 / (44 - 25)
Break-even point in units= 7,600
On December 31, 2019, Splish Inc. borrowed $4,320,000 at 13% payable annually to finance the construction of a new building. In 2020, the company made the following expenditures related to this building: March 1, $518,400; June 1, $864,000; July 1, $2,160,000; December 1, $2,160,000. The building was completed in February 2021. Additional information is provided as follows.
1. Other debt outstanding
10-year, 14% bond, December 31, 2013, interest payable annually $5,760,000
6-year, 11% note, dated December 31, 2017, interest payable annually $2,304,000
2. March 1, 2020, expenditure included land costs of $216,000
3. Interest revenue earned in 2020 $70,560
A. Determine the amount of interest to be capitalized in 2020 in relation to the construction of the building.
B. Prepare the journal entry to record the capitalization of interest and the recognition of interest expense, if any, at December 31, 2020.
Answer:
$285,480
Explanation:
The amount of interest to be capitalized in 2020 in relation to the construction of the building can be calculated as follows.
Date Amount Time Weighted Average expenditure
Mar-01 $518,400 10-Dec 432,000
Jun-01 $864,000 07-Dec 504,000
Jul-01 $2,160,000 06-Dec 1,080,000
Dec-01 $2,160,000 01-Dec 180,000
2,196,000
Amount of interest = $2,196,000 x 13%
Amount of interest = $285,480
Actual Interest Paid
$4,320,000 x 13% = $561,600
$5,760,000 x 14% = $806,400
$2,304,000 x 11% = $253,440
$1,621,440
Journal Entry 31-12-2020
Dr Building $285,480
Dr Interest Expense. $1,335,960
Cr Cash $1,621,440
Select all that apply What is the difference between an adjusted trial balance and an unadjusted trial balance? (Check all that apply.) Multiple select question. The adjusted trial balance is a list of accounts and their balances after adjusting entries have been posted. The unadjusted trial balance is more up to date and should be used to prepare financial statements. The adjusted trial balance is used to prepare financial statements. The adjusted trial balance generally has more accounts listed than the unadjusted trial balance.
Answer:
The adjusted trial balance is a list of accounts and their balances after adjusting entries have been posted.The adjusted trial balance is used to prepare financial statements. The adjusted trial balance generally has more accounts listed than the unadjusted trial balance.Explanation:
The Adjusted Trial balance lists the accounts that the company has at their ending balances which means that adjusting entries have been posted.
As a result of the Adjusted Trial Balance having final account balances, it is used to prepare the financial statements for the company as only final balances should be used in such.
More often than not, the Adjusted trial balance will have more accounts than the unadjusted balance because in process of adjustment, more accounts may be created for transactions that were not posted properly. For instance, there might be liability accounts for expenses if the expenses were not paid in the current period.
ou can buy property today for $2.1 million and sell it in 6 years for $3.1 million. (You earn no rental income on the property.) a. If the interest rate is 11%, what is the present value of the sales price? (Do not round intermediate calculations. Enter your answer in millions rounded to 3 decimal places.)
Answer:
PV= $1,657,386.6
Explanation:
Giving the following information:
Future Value (FV)= $3,100,000
Interest rate (i)= 11%
Number of periods (n)= 6 years
To calculate the present value of the selling price, we need to use the following formula:
PV= FV/(1+i)^n
PV= 3,100,000 / (1.11^6)
PV= $1,657,386.6
Argent Corporation has $60 million in current liabilities, $150 million in total liabilities, and $210 million in total common equity; Argent has no preferred stock. Argent’s total debt is $120 million. What is the debt-to-assets ratio? What is the debt-to-equity ratio?
Answer and Explanation:
The computation is shown below
Debt to asset ratio is
= Total debt ÷ total asset
= $120 million ÷ ($150 million + $210 million)
= $120 million ÷ $360 million
= 0.33
And, the debt to equity ratio is
= Total debt ÷ total equity
= $120 million ÷ $210 million
= 0.57
We simply applied the above formula so that the correct value could come
And, the same is to be considered
You own a Home that Cost $200,000. What part of the Accounting Equation would this be?
Answer:
Assets
Explanation:
You stop at a SUBWAY to get a sandwich for lunch and you notice that they now have TCBY yogurt. This is an example of a:______
a. co-branded establishment.
b. franchise.
c. small business.
d. dual-sponsored business.
e. dual-branded franchise.
Answer:
dual-branded franchise.
Explanation:
A franchise can be defined as a contractual arrangement between a parent (established) company and another which primarily, grants permission or license to the new firm to operate a business under an established name and in accordance with specific rules, terms and conditions.
Additionally, a dual-branded franchise refers to a type of franchise in which two or more business franchise set up their shops or outlets very close to each other or within the same premises. Thus, dual-branded franchises usually share some things in common such as shop, dining area etc.
In this scenario, you stop at a SUBWAY to get a sandwich for lunch and noticed that they now have TCBY yogurt. Therefore, this is an example of a dual-branded franchise.
The main advantage of a dual-branded franchise is to boost sales and give customers a complete shopping experience, satisfaction or value.
Select the correct answer. Which description is that of a vertical stroke? A. a stroke drawn to represent a letter part that is perpendicular to the guidelines B. a stroke drawn to represent a letter part that is diagonal to the guidelines C. a stroke drawn to represent a letter part that is parallel to the guidelines D. a stroke drawn to represent a letter part that is at an angle of 68 degrees to the guidelines
Answer:
A
Explanation:
Assume the perpetual inventory method is used. 1) The company purchased $12,200 of merchandise on account under terms 2/10, n/30.2) The company returned $1,700 of merchandise to the supplier before payment was made.3) The liability was paid within the discount period.4) All of the merchandise purchased was sold for $18,400 cash. The amount of gross margin from the four transactions is:
Answer:
$8,110
Explanation:
The computation of the gross margin is shown below:
As we know that
Gross margin is
= Sales - cost of goods sold
where,
Sales is $18,400
And, the cost of goods sold is
= (Purchase - returns) × (1 - discount rate)
= ($12,200 - $1,700) × (1 - 0.02)
= $10,290
So, the gross margin is
= $18,400 - $10,290
= $8,110
Dr. Lum teaches part-time at two different community colleges, Hilltop College and Serra College. Dr. Lum can teach up to 5 classes per semester. For every class taught by him at Hilltop College, he needs to spend 3 hours per week preparing lessons and grading papers, and for each class at Serra College, he must do 4 hours of work per week. He has determined that he cannot spend more than 18 hours per week preparing lessons and grading papers. If he earns $4,000 per class at Hilltop College and $4,200 per class at Serra College, how many classes should he teach at each college to maximize his income, and what will be his income
Answer:
2 classes at Hilltop, 3 classes at Serra; and $20,600
Explanation:
We can generate two equations from the problem
Equation 1: Dr. Lum can teach up to 5 classes per semester at both colleges. If 'h' represents the number of classes taken at Hilltop College, and 's', the number of classes taken at Serra College,
Equation 1 becomes: h + s = 5
Equation 2: Dr. Lum spends 3 hours per week preparing for Hilltop classes, and 4 hours for Serra classes, subject to a maximum of 18 hours per week.
Equation 2 becomes: 3h + 4s = 18
Now solving using substitution method,
We can derive an equation 3 from equation 1, as follows.
Equation 3: h = 5 - s.
Substituting equation 3 into equation 2, equation 2 becomes
3(5 - s) + 4s = 18
= 15 - 3s + 4s = 18
= 15 + s = 18
= s = 3.
With s = 3, using equation 3, h = 5 - 3 = 2.
Therefore, Dr. Lum should teach 2 classes at Hilltop, and 3 classes at Serra.
His income will be
$4,000 (2) + $4,200 (3)
= $20,600.
What would be most likely to happen if the discount rate were raised?
A. Depositors would make a run on a bank.
thing
B. Banks would make fewer loans.
C. Creditors would refuse to pay back loans.
D. Banks would stop opening savings accounts.
Answer:
B. Banks would make fewer loans
Explanation:
The discount rate is the interest rate that commercial banks pay to the Federal Reserve for loans received. Banks usually borrow to cater to their short-term cash-flow requirements. The discount rate is higher than the inter bank rate or the fed funds rate(the rate that banks charge each other for loans).
An increase in the discount rate causes the inter bank rate to rise (the Fed controls both rates). It means commercial banks are borrowing money from the Fed and each other at a higher interest rate. Consequently, commercial banks charge a higher interest rate for loans advanced to customers. An increase in interest rates at the banks discourages customers from borrowing.
Jeff Heun, president of Tamarisk Always, agrees to construct a concrete cart path at Dakota Golf Club. Tamarisk Always enters into a contract with Dakota to construct the path for $183,000. In addition, as part of the contract, a performance bonus of $37,200 will be paid based on the timing of completion. The performance bonus will be paid fully if completed by the agreed-upon date. The performance bonus decreases by $9,300 per week for every week beyond the agreed-upon completion date. Jeff has been involved in a number of contracts that had performance bonuses as part of the agreement in the past. As a result, he is fairly confident that he will receive a good portion of the performance bonus. Jeff estimates, given the constraints of his schedule related to other jobs, that there is 50% probability that he will complete the project on time, a 30% probability that he will be 1 week late, and a 20% probability that he will be 2 weeks late.
Determine the transaction price that Ayayai Always should compute for this agreement. Determine the transaction price:
Assume that Jeff Heun has reviewed his work schedule and decided that it makes sense to complete this project on time. Assuming that he now believes that the probability for completing the project on time is 83% and otherwise it will be finished 1 week late, determine the transaction price.
Answer:
A) Determine the transaction price that Tamarisk Always should compute for this agreement.
total transaction price = contract price ($183,000) + expected value of the bonus
expected value of the bonus:
$37,200 x 50% = $18,600
($37,200 - $9,300) x 30% = $8,370
($37,200 - $9,300 - $9,300) x 20% = $3,720
total = $30,690
total transaction price = $183,000 + $30,690 = $213,690
B) Assume that Jeff Heun has reviewed his work schedule and decided that it makes sense to complete this project on time. Assuming that he now believes that the probability for completing the project on time is 83% and otherwise it will be finished 1 week late, determine the transaction price.
total transaction price = contract price ($183,000) + expected value of the bonus
expected value of the bonus:
$37,200 x 83% = $30,876
($37,200 - $9,300) x 17% = $4,743
total = $35,619
total transaction price = $183,000 + $35,619 = $218,619
