Answer:
a) true.
Explanation:
The option here is chosen to be true because every ethic code is directed to ensure ethical decisions and this case or generally when you provide a clear, comprehensive ethical code for your company, it raises its standard of operation as it enlightens people.
This is to the general public, especially everyone that has business dealings with your company. It should be stated clearly above it that it should be well digested by anyone who intends to work or visit the site or environs. Also these ethics should be seriously be followed religiously by the working staffs of the company, so as to be emulated by other visitors and new intakes.
The following events occur for The Underwood Corporation during 2021 and 2022, its first two years of operations. June 12, 2021 Provide services to customers on account for $38,600. September 17, 2021 Receive $23,000 from customers on account. December 31, 2021 Estimate that 45% of accounts receivable at the end of the year will not be received. March 4, 2022 Provide services to customers on account for $53,600. May 20, 2022 Receive $10,000 from customers for services provided in 2021. July 2, 2022 Write off the remaining amounts owed from services provided in 2021. October 19, 2022 Receive $43,000 from customers for services provided in 2022. December 31, 2022 Estimate that 45% of accounts receivable at the end of the year will not be received.
Required:1. Record transactions for each date. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)2. Post transactions to the following accounts: Cash, Accounts Receivable, and Allowance for Uncollectible Accounts.3. Calculate the net realizable value of accounts receivable at the end of 2015 and 2016.
Answer:
Underwood Corporation
Journal Entries:
Debit Credit
June 12, 2021:
Accounts Receivable $38,600
Service Revenue $38,600
To record services to customers on account
Sept. 17, 2021:
Cash Account $23,000
Accounts Receivable $23,000
To record cash receipt from customers.
Dec. 31, 2021:
Uncollectible Accounts Exp $7,020
Allowance for Doubtful Accounts $7,200
To record allowance for doubtful accounts.
March 4, 2022:
Accounts Receivable $53,600
Service Revenue $53,600
To record services to customers on account.
May 20, 2022:
Cash Account $10,000
Accounts Receivable $10,000
To record cash receipts from customers.
July 2, 2022:
Allowance for Doubtful Accounts $5,600
Accounts Receivable $5,600
To write off the uncollectible balance.
Oct. 19, 2022:
Cash Account $43,000
Accounts Receivable $43,000
To record cash receipts from customers.
Dec. 31, 2022:
Uncollectible Accounts Exp $3,170
Allowance for Doubtful Accounts $3,170
To record allowance for doubtful accounts.
b) Posting Transactions to the accounts:
Cash Account
Debit Credit Balance
Sept 17, 2021: Accounts Receivable $23,000 $23,000
May 20, 2022:Accounts Receivable $10,000 $33,000
Oct. 19, 2022: Accounts Receivable $43,000 $76,000
Accounts Receivable
Debit Credit Balance
June 12, 2021 Service Revenue $38,600 $38,600
Sept 17, 2021 Cash $23,000 $15,600
March 4, 2022 Service Revenue $53,600 $69,200
May 20, 2022 Cash $10,000 $59,200
July 2, 2022 Allowance for Uncollectible $5,600 $53,600
Oct. 19, 2022 Cash $43,000 $10,600
Allowance for Uncollectible Accounts
Debit Credit Balance
Dec. 31, 2021 Uncollectible Accounts Expense $7,200 $7,200
July 2, 2022 Accounts Receivable $5,600 $1,600
Dec 31, 2022 Uncollectible Accounts Expense $3,170 $4,770
3. Net Realizable Value of Accounts Receivable at the end of 2021 and 2022:
2021 2022
Accounts Receivable Balance $15,600 $10,600
less Allowance for Doubtful Accounts ($7,200) ($4,770)
Net Realizable Value $8,400 $5,830
Explanation:
a) Allowance for Doubtful is an amount that is estimated which may not be recovered from customers for services rendered. This allowance is made in order to provide for losses that may arise from credit sales. The estimated allowance is 45% of the Accounts Receivable Balance at the end of the year.
b) When a write-off of debts occurs, the Allowance for Doubtful Accounts is adjusted with the direct write-off to reduce the balance.
The Winston Company estimates that the factory overhead for the following year will be $1,250,000. The company has decided that the basis for applying factory overhead should be machine hours, which is estimated to be 50,000 hours. The total machine hours for the year were 54,300. The actual factory overhead for the year was $1,375,000. a) Determine the total factory overhead amount applied. b) Calculate the over or under applied amount for the year. c) Prepare the journal entry to close factory overhead into Cost of Goods Sold.
Answer:
Instructions are below.
Explanation:
Giving the following information:
Estimated factory overhead= $1,250,000.
Estimated machine-hours= 50,000 hours.
The total machine hours for the year were 54,300. The actual factory overhead for the year was $1,375,000.
First, we need to determine the predetermined manufacturing overhead rate:
Estimated manufacturing overhead rate= total estimated overhead costs for the period/ total amount of allocation base
Estimated manufacturing overhead rate= 1,250,000/50,000= $25 er machine hour
Now, we can allocate overhead:
Allocated MOH= Estimated manufacturing overhead rate* Actual amount of allocation base
Allocated MOH= 25*54,300= $1,357,500
Finally, we calculate the under/over allocation:
Under/over applied overhead= real overhead - allocated overhead
Under/over applied overhead= 1,375,000 - 1,357,500
Under/over applied overhead= $17,500 underapplied
Cost of goods sold 17,500
Manufacturing overhead 17,500
Kylie was born into a family that owns numerous corporations and more than one multimillion dollar home. She never worried about paying for college or
buying her own car. These characteristics define Kylie's
Diogo has a utility function, U(q 1, q 2)equalsq 1 Superscript 0.8 Baseline q 2 Superscript 0.2, where q 1 is chocolate candy and q 2 is slices of pie. If the price of slices of pie, p 2, is $4.00, the price of chocolate candy, p 1, is $8.00, and income, Y, is $100, what is Diogo's optimal bundle? The optimal valueLOADING... of good q 1 is
Answer:
The value of "[tex]\bold{q_1=2.5}[/tex]".
Explanation:
Given value:
[tex]U= Max \ q_1^{0.8} \ q_2^{0.2}\\\\[/tex]
Differentiate the above equation with respect of [tex]q_1[/tex], which will give [tex]MUq_1[/tex] as follows:
[tex]MUq_1= q_2^{0.2}(\frac{0.2}{q_1^{0.8}})\\\\[/tex]
[tex]=0.2(\frac{ q_2^{0.2}}{q_1^{0.8}})[/tex]
Differentiate the equation with respect of [tex]q_2[/tex], which will give [tex]MUq_2[/tex] as follows:
[tex]MUq_2= q_1^{0.8}(\frac{0.8}{q_1^{0.8}})\\\\[/tex]
[tex]=0.8(\frac{ q_1^{0.8}}{q_2^{0.2}})}{}[/tex]
for balancing the equation
[tex]\frac{MUq_1}{P_1}=\frac{MUq_2}{P_2}\\\\\frac{MUq_1}{MUq_2}=\frac{P_1}{P_2}\\\\[/tex]
[tex]\frac{0.2(\frac{ q_2^{0.2}}{q_1^{0.8}})} {0.8(\frac{ q_1^{0.8}}{q_2^{0.2}})}}= \frac{8}{4}\\\\\frac{(\frac{ q_2^{0.2}}{q_1^{0.8}})} {4(\frac{ q_1^{0.8}}{q_2^{0.2}})}}= \frac{2}{1}\\\\\frac{(\frac{ q_2^{0.2}}{q_1^{0.8}})} {(\frac{ q_1^{0.8}}{q_2^{0.2}})}}= 8\\\\\frac{q_2}{q_1}=8\\\\q_2=8q_1\\\\[/tex]
Calculate the value of [tex]q_1[/tex] and [tex]q_2[/tex] as follows:
[tex]100 =p_1q_1+P_2q_2\\\\100= 8q_1+4(8q_1)\\\\100=8q_1+32q_1\\\\100=40q_1\\\\q_1=\frac{100}{40}\\\\q_1=2.5[/tex]
[tex]q_2=8q_1\\\\\therefore q_1=2.5\\\\q_2=8\times 2.5\\\\q_2=20.0\\\\q_2=20[/tex]
Communication with the public and employees should be overseen by the director of PR. The duties of the crisis team should be divided according to each member’s area of expertise. Since communicating accurate information is critical, you will need to assign specific members to interface with your own employees and public-safety agencies. If your company does not have a public relations executive, this job should be handled by the head of marketing or human resources. Furthermore, all members of your crisis team should receive training in crisis communication. Which option is the best revision of the paragraph for logical flow and transition?
a. Communication with the public and employees should be overseen by the director of PR. The duties of the crisis team should be divided according to each member’s area of expertise. Since communicating accurate information is critical, you will need to assign specific members to interface with your own employees and public-safety agencies. If your company does not have a public relations executive, this job should be handled by the head of marketing or human resources. Furthermore, all members of your crisis team should receive training in crisis communication.
b. All members of your crisis team should receive training in crisis communication, and the duties of the crisis team should be divided according to each member’s area of expertise. Since communicating accurate information is critical, you will need to assign specific members to interface with your own employees and public-safety agencies. Communication with the public and employees should be overseen by the director of PR. If your company does not have a public relations executive, this job should be handled by the head of marketing or human resources.
c. The duties of the crisis team should be divided according to each member’s area of expertise. Since communicating accurate information is critical, you will need to assign specific members to interface with your own employees and public-safety agencies. Communication with the public and employees should be overseen by the director of PR. If your company does not have a public relations executive, this job should be handled by the head of marketing or human resources. Nevertheless, all members of your crisis team should receive training in crisis communication.
Answer: The third option (option C) is the right answer.
Explanation:
The paragraph which has the best coherence is option C. This is because in the case of the third option, it explains that the flow of ideas is constant from one sentence to another.
The first sentence serves as an introduction which talked about the reasons why duties should be divided based on each member’s expertise. The sentences moved smoothly and also logically from one sentence to another sentence. An example is the sentence that “if your company does not have a public relations executive…..”. This should logically proceed the sentence that says that communication ought to be overseen by the director of PR.
This shows that the third option possesses a consistent and logical train of thought as well.
A computer glitch (of all things) was discovered at The Baruch Academic Computing Center, and it was determined that only 1,150 students were actually served. If the design capacity of the system is 1,800 students per semester and the highest number of students who can actually go to their 93. 18 orientation session is 1,200, what is the utilization and efficiency of the system?
Answer:
Utilization = 0.6388 = 63.88%
Efficiency = 0.9583 = 95.83%.
Explanation:
So, in this question we are given the following parameters or information or data that is going to assist us in solving this question/problem and they are;
=> "only 1,150 students were actually served. If the design capacity of the system is 1,800 students per semester''
=> " the highest number of students who can actually go to their orientation session is 1,200".
(A). Thus, the Utilization of the system= real capacity/ designed capacity.
=> 1150/1800 = 0.6388.
Hence, 0.6388 × 100% = 63.88%
(B). Efficiency of the system = real capacity/ designed capacity .
=> 1150/1200 = 0.9583.
Therefore, 0.9583 × 100% = 95.83%.
Answer:
Utilization = 63.88%
Efficiency = 95.83%
Explanation:
Given that:
The actual usage number of students served were 1150 students
The Design Capacity of the system is 1,800 students per semester
The highest number (effective capacity ) for the orientation session is 1,,200
The objective here is to determine the utilization and efficiency of the system.
Using the formula
Utilization of the system = actual usage number / design capacity of the system
Efficiency of the system = actual usage number / effective capacity for the orientation session
Therefore; we have
Utilization = 1150/1800 = 0.6388
= 63.88%
Efficiency = 1150/1200 = 0.9583
= 95.83%
MILLS ALLOCATES MANUFACTURING OVERHEAD TO PRODUCTION BASED ON STANDARD DIRECT LABOR HOURS. MILLS REPORTED THE FOLLOWING ACTUAL RESULTS FOR 2018:ACTUAL NUMBER OF UNITS PRODUCED: 1,000ACTUAL VARIABLE OVERHEAD: $4000ACTUAL FIXED OVERHEAD: $3,100ACTUAL DIRECT LABOR HOURS: 1,600Note: 1. VOH Coat Var. $1,600U(RE-POST EDIT) Info from E23-18 Murr, Inc. produced 1,000 units of the company's product in 2018, The standard quantity of direct materials was three yards of cloth per unit at a standard cost of $1.35 per yard. The accounting records showed that 2,500 yards of cloth were used and the company paid $1.40 per yard. Standard time was two direct labor hours per unit at a standard rate of$10.00 per direct labor hour. Employees worked 1,700 hours and were paid $9.50 per hourMills Inc. Is a competitor of murry, Inc. from exercise E23-18. Mills also uses a standard cost system and provides the following info.Static budget variable overhead $1,200Static budget fixed overhead $1,600Static budget direct labor hours 800 hoursStatic budget number of units 400 unitsStandard direct labor hours 2 hours per unitFigure out and analyze:1. Compute the variable overhead cost and efficiency variances and fixed overhead cost and volume variances.2. EXPLAIN (as best you can) why the variances are favorable or unfavorable. Based on cost and efficiency budget standards.
Answer:
1. Compute the variable overhead cost and efficiency variances and fixed overhead cost and volume variances.
variable overhead cost variance = $1,000 unfavorablevariable efficiency variance = -$1,200 favorablefixed overhead costs = $1,500 unfavorablefixed overhead volume variance = -$100 favorable2. EXPLAIN (as best you can) why the variances are favorable or unfavorable. Based on cost and efficiency budget standards.
variable overhead cost variance is unfavorable because actual variable overhead costs per unit are higher than budgeted.variable efficiency variance is favorable because the company used less direct labor hours than budgeted to produce a higher amount of units (1,600 vs. 2,000).fixed overhead costs are unfavorable because total fixed overhead costs were much higher than budgeted, but most of this variance can be explained by higher output. fixed overhead volume variance are favorable because a higher volume was produced using less hours than budgeted.Explanation:
Static budget variable overhead $1,200
Actual variable overhead $4,000
Static budget fixed overhead $1,600
Actual fixed overhead $3,100
Static budget direct labor hours 800 hours
Actual direct labor hours 1,600
Static budget number of units 400 units
Actual units produced 1,000
Standard direct labor hours 2 hours per unit
Actual direct labor hours 1.6 per unit
standard variable rate = $1,200 / 400 units = $3 per unit
actual variable rate = $4,000 / 1,000 units = $4 per unit
standard fixed rate = $1,600 / 800 hours = $2 per hour
actual fixed rate = $3,100 / 1,600 hours = $1.9375 per hour
variable overhead cost variance = actual costs - (standard rate x actual units) = $4,000 - ($3 x 1,000) = $1,000 unfavorable
variable efficiency variance = (actual hours x standard rate) - (standard hours x standard rate) = (1,600 × $3) − (2,000 x $3) = $4,800 - $6,000 = -$1,200 favorable
fixed overhead costs = actual overhead costs - budgeted overhead costs = $3,100 - $1,600 = $1,500 unfavorable
fixed overhead volume variance = (actual fixed rate x actual hours) - (standard rate x actual hours) = ($1.9375 x 1,600) - ($ x 1,600) = $3,100 - $3,200 = -$100 favorable
Schwartz Industry is an industrial company with 100100 million shares outstanding and a market capitalization (equity value) of $ 4$4 billion. It has $22 billion of debt outstanding. Management have decided to delever the firm by issuing new equity to repay all outstanding debt. a. How many new shares must the firm issue? b. Suppose you are a shareholder holding 100 shares, and you disagree with this decision. Assuming a perfect capital market, describe what you can do to undo the effect of this decision.
Answer:
HA LOL
Explanation:
Following are forecasts of Target Corporation's sales, net operating profit after tax (NOPAT), and net operating assets (NOA) as of January 30, 2016 Reported Horizon Period Terminal $ millions 2016 2017 2018 2019 2020 Period Sales $73,785 $75,261 $76,766 $78,301 $79,867 $80,666 NOPAT 3,312 3,387 3,454 3,524 3,594 3,630 NOA 21,445 21,872 22,309 22,755 23,210 23,443 Answer the following requirements assuming a terminal period growth rate of 1%, a discount rate (WACC) of 6%, common shares outstanding of 602 million, and net nonoperating obligations (NNO) of $8,488 million. a. Estimate the value of a share of Target common stock using the discounted cash flow (DCF) model as of January 30, 2016. Instructions: Round all answers to the nearest whole number, except for discount factors and stock price per share. Round discount factors to 5 decimal places. Round stock price per share to two decimal places. Do not use negative signs with any of your answers.
Answer:
The estimate value of Target common stock is $ 93.71
Explanation:
Find attached computation of estimate value of common stock using DCF approach.
First of all determine Free Cash Flow in each which is the NOPAT minus the increase in NOA.
I discounted the FCF to present using the WACC of 6% as discount rate.
The terminal value formula is in the attached as well.
Kindly note that the discount factor for the terminal value is the preceding year discount factor.
The present value of all free cash flows including terminal value gives the estimate of the entire firm value.
Lexington Garden Supply pays $ 280,000 for a group purchase of land, building, and equipment. At the time of acquisition, the land has a current market value of $ 93,000 , the building's current market value is $ 186,000 , and the equipment's current market value is $ 31,000. Prepare a schedule allocating the purchase price of $ 280,000 to each of the individual assets purchased based on their relative market values, then journalize the lump-sum purchase of the three assets. The business signs a note payable for the purchase price.
Begin by preparing a schedule allocating the purchase price of $280,000.
Market (Sales) Value Percentage of Total Market Value Cost of Asset
Land
Building
Equipment
Total
Date Accounts Debit Credit
Account choices:
Accounts Debit Credit
Building
Cash
Equipment
Land
Note Payable
Note Receivable
Now journalize the lump-sum purchase of the three assets. The business signs a note payable for the purchase price.
Answer:
Given:
Current market value:
Land = $93,000
Building = $186,000
Equipment = $31,000
We are required to prepare a schedule allocating the purchase price of $280,000.
The schedule is prepared below.
___________________________
Market (Sales) Value:
Land= $93,000;
Building= $186,000;
Equipment= $31,000;
Total= 310,000(93,000+186,000+31,000)
____________________________
% of Total Market Value:
Land= 30%(93,000/310,000);
Building= 60%(186,000/310,000); Equipment= 10%(31,000/310,000)
Total = 100%
____________________________
Cost of Asset:
Land= 84,000(30%*280,000)
Building = 168,000(60%*280,000)
Equipment = 28,000(10%*280,000)
Total = 280,000(84,000+168,000+28,000)
____________________________
b) To journalize the lump-sum purchase of the three assets.
Account title:____Debit: _____Credit:
Land _________84,000______0
Building_______168,000_____0
Equipment _____28,000______0
Note payable_____0_______280,000
Answer is attached for easier understanding.
Six equal annual contributions are made to a fund, with the first deposit on December 31, 2019. Required: Using the future value tables, determine the equal contributions that, if invested at 10% compounded annually, will accumulate to a fund of $30,000 on December 31, 2024.
Answer:
The answer is $3,888.22
Explanation:
This is an annuity due because the cash flow is being done on the first day of each period.
Annuity is a fixed sum of money paid to or receceived from someone or business every year.
Future Value(FV) = $30,000
Interest rate(i or I/Y) = 10%
Number of years(N)= 6 years
Annuity (PMT) = ?
Using a Financial calculator to solve it (Texa BA II Plus )
Annuity (equal contributions) will be $3,888.22
True or False: The price consumers pay will be higher if the tax were imposed on producers. True False If the demand for gasoline were less elastic, this tax would be effective in reducing the quantity of gasoline consumed. True or False: Consumers of gasoline are hurt by this tax. True False Workers in the oil industry are by this tax.
Gold futures contracts are based on 100 troy ounces and are priced in dollars per troy ounce. At the end of trading today, you saw a market report on the November contracts with these prices: Open 1293.00, High 1295.00, Low 286.00, and Settle1296.10. If you own two of these contracts, what is the value of your position as of the end of the trading day?
A. $129,610
B. $259,000
C. $258,600
D. $259,220
E. $260,4607.
Answer:
D. $259,220
Explanation:
The computation of the value for your position at the end of the trading day is shown below;
Given that
Settled price = $1296.10
And, the
Two contracts are
= 2 × 100
= 200 troy ounces
Now the position at the end of the day is
= Two contracts × settled price
= $200 × 1296.10
= $259,220
We simply multiplied the two contracts with the settled price so that the value could arrive
hence. the correct option is d.
Hejl Catering uses two measures of activity, jobs and meals, in the cost formulas in its budgets and performance reports. The cost formula for catering supplies is $210 per month plus $86 per job plus $15 per meal. A typical job involves serving a number of meals to guests at a corporate function or at a host's home. The company expected its activity in March to be 23 jobs and 222 meals, but the actual activity was 28 jobs and 217 meals. The actual cost for catering supplies in March was $5,830. The spending variance for catering supplies in March would be closest to
Answer:
Spending variance= $43 favorable
Explanation:
Giving the following information:
Standard:
Fixed costs= $210
Variable cost per job= $86
Variable cost per meal= $15
The actual activity was 28 jobs and 217 meals. The actual cost for catering supplies in March was $5,830.
To calculate the spending variance, we need to use the following formula:
Spending variance= (actual costs - standard costs)
Standard costs= 210 + 28*86 + 15*217= 5,873
Spending variance= 5,830 - 5,873
Spending variance= $43 favorable
The balanced scorecard approach uses only financial measures to evaluate performance. uses rather vague, open statements when setting objectives in order to allow managers and employees flexibility. normally sets the financial objectives first, and then sets the objectives in the other perspectives to accomplish the financial objectives. evaluates performance using about 10 different perspectives in order to effectively incorporate all areas of the organization.
Answer: Normally sets the financial objectives first, and then sets the objectives in the other perspectives to accomplish the financial objectives.
Explanation:
The Balanced Scorecard Approach is a method of measuring the internal business environment's effectiveness.
It is used to improve the parts of the internal business Environment that are in need of improvement which then has the domino effect of improving facets of the external business environment as well.
It has 4 areas that it focuses on in the business, which are Learning and Growth, Business Processes, Customers, and Finance.
The financial objectives are usually set first and then the other areas have objectives set up in such a way that the Financial objectives are accomplished.
Analysis reveals that a company had a net increase in cash of
$21,980 for the current year. Net cash provided by operating
activities was $19,800; net cash used in investing activities
was $10,900 and net cash provided by financing activities
was $13,080. If the year-end cash balance is $26,700, the
beginning cash balance was:
Answer:
The multiple choices are as follows:
$4,720.
$17,260.
$48,680.
$43,960.
$42,960.
The beginning cash balance was $4,720
Explanation:
The formula for closing cash balance can be used to determine the opening cash balance as shown thus:
closing cash balance=net increase in cash+opening balance of cash
by arranging the equation
opening cash balance =closing cash balance-net increase in cash
closing cash balance is $26,700
net increase in cash is $21,980
opening cash balance=$26,700-$21,980=$4,720
Clothing Emporium was organized on January 1, 2021. The firm was authorized to issue 140,000 shares of $8 par value common stock. During 2021, Clothing Emporium had the following transactions relating to stockholders' equity: Issued 42,000 shares of common stock at $10 per share. Issued 28,000 shares of common stock at $11 per share. Reported a net income of $140,000. Paid dividends of $70,000. What is total paid-in capital at the end of 2021
Answer:
$728,000
Explanation:
Paid in capital can be described as the payments ac company received in exchange for its stock from investors.
From the question, the total paid in capital can be calculated as follows:
Receipt for 42,000 shares at $10 per share = 42,000 * 10 = $420,000
Receipt for 28,000 shares at $11 per share = 28,000 * 11 = $308,000
By adding the two above together and have:
Total paid-in capital = $420,000 + $308,000 = $728,000.
Therefore, total paid-in capital at the end of 2021 is $728,000.
To promote accountability, which document outlines the method for coordinating response operations?
National Incident Management System (NIMS) Doctrine
Incident Action Plan
O Resource Tracking System
O Responder Personnel Roster
Check
Answer:
Incident Action Plan
Explanation:
To promote accountability, Incident Action Plan is a document outlining the method for coordinating response operations. Thus the correct option is B.
A document that specifies the process for coordinating response operations and establishing accountability is referred to as The Incident Action Plan (IAP). The IAP provides a full description of the objectives, strategies, and tactics to be used during an incident response.
The document contains information about incident objectives, organizational structure, resource assignments, communication procedures, and other critical data required for successful coordination and responsibility among response professionals.
Learn more about Incident Action Plan, here:
https://brainly.com/question/29811512
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Cash to Monthly Cash Expenses Ratio Capstone Turbine Corporation produces and sells turbine generators for such applications as charging electric, hybrid vehicles. Capstone Turbine reported the following financial data for a recent year (in thousands): Net cash flows from operating activities $(23,018) Cash and cash equivalents 32,221a. Determine the monthly cash expenses. Round to one decimal place.
b. Determine the ratio of cash to monthly cash expenses. Round to one decimal place.
c. Based on your analysis, do you believe that Capstone Turbine will remain in business?
a. $1,824.9 ($21,899 ÷ 12)
b. 18.3 months ($33,456 ÷ $1,824.9)
c. Capstone Turbine has cash to continue its operations for approximately 18.3 months.
Answer:
a) $1,918.17
b) 16.8 months
C) Yes, Capstone Turbine will remain in business.
Explanation:
a) To find the monthly cash expenses, we have:
Monthly cash expenses = negative cash flow from operations / 12
= 23018 / 12
= $1,918.17
b) To find the ratio of cash to monthly cash expenses, we have:
Ratio of cash to monthly cash expenses = Year end cash / monthly cash expenses
= $32,221 / $1,918.17
= 16.797
≈ 16.8 months
c) Yes, Capstone Turbine will remain in business because the calculated ratio above shows that they have cash to continue operations for approximately 16.8 months.
Assume you purchased 400 shares of XYZ common stock on margin at $30 per share from your broker. A. If the initial margin is 55%, the amount you borrowed from the broker is $5400 . B. What is the new margin if the price of share falls to $26?
Answer:
Part A. $5,400
Part B. $5,720
Explanation:
Part A.
The Amount borrowed can be calculated by
Amount Borrowed= 400 shares * $30 per share * (100% - 55%) = $5,400
Part B.
The New margin was 55% and as per the requirements the price of the share is $26, so
The New Margin = 400 shares * $26 per share * 55% = $5,720
Majka Company was started on January 1, Year 1. During Year 1, the company experienced the following three accounting events: (1) earned cash revenues of $29,500, (2) paid cash expenses of $13,500, and (3) paid a $1,800 cash dividend to its stockholders. These were the only events that affected the company during Year 2016.
a. Create an accounting equation and record the effects of each accounting event under the appropriate general ledger account headings.
b. Prepare an income statement, statement of changes in stockholders’ equity, and a balance sheet dated December 31, 2016, for Majka Company.
c. Explain why the income statement uses different terminology to date the income statement than is used to date the balance sheet.
Answer:
Majka Company
a) Accounting equation to record effects of each event:
1. Assets (Cash) increased $29,500 = Liabilities + Equity (Retained Earnings) increased $29,500.
2. Assets (Cash) decreased $13,500 = Liabilities + Equity (Retained Earnings) decreased $13,500.
3. Assets (Cash) decreased $1,800 = Liabilities + Equity (Retained Earnings) decreased $1,800.
b) Income Statement, Statement of Changes in Stockholders' Equity, and a Balance Sheet dated December 31, 2016:
1) Income Statement for the year ended December 31, 2016:
Sales $29,500
Expenses ($13,500)
Net Income $16,000
Dividend ($1,800)
Retained Earnings $14,200
2) Statement of Changes in Stockholders' Equity:
Retained Earnings b/f $0
Net Income $16,000
Dividend ($1,800)
Retained Earnings $14,200
3. Balance Sheet as at December 31, 2016:
Assets:
Cash ($29,500 - 13,500 - 1,800) $14,200
Liabilities + Equity:
Equity: Retained Earnings $14,200
c) Reason for different terminology to date income statement and balance sheet:
Income statement is prepared for an accounting period. It covers a specified period, while a balance sheet is prepared as at an accounting date. This means that one can prepare a balance sheet daily, or even after each transaction. But, an income statement covers a period of time, say a month, a quarter, or six months, or a year, as the case may be.
Explanation:
Income Statement, Changes in Equity, and the Balance Sheet are important financial statements, which a business prepares to report its financial performance (results), the changes that occur in owners' equity, and the financial position respectively.
Consider the production function Q = f(L,K) = 10KL / K+L. The marginal products of labor and capital for this function are given by?
MPL = 10K^2 / (K +L)^2, MPK = 10L^2 / (K +L)^2.
(a) In the short run, assume that capital is fixed at K = 4. What is the production function for the firm (quantity as a function of labor only)? What are the average and marginal products of labor? Draw APL and MPL on one graph.
(b) What is the marginal rate of technical substitution for this technology?
(c) Are the returns to scale of this production function increasing, decreasing or constant? Explain.
Answer:
ANSWER IS BELOW :)
Explanation:
Tbh im not sure, but I think its 10(5)+65
Hedge Fund
You are a bond analyst working for a hedge fund. A bond you follow has face value 100, has a coupon rate of 5% (paid once a year) and matures in 5 years. You are trying to find if there is any profitable trading strategy. You’ve done extensive research and have formed your opinions on future economic conditions. As a result, you expect that there will soon be a major shift in the yield curve. The current and the expected yield curve is shown below:
Year Current Expected
1 1% 3.00%
2 1.50% 2.50%
3 2.00% 3.50%
4 3.00% 4.00%
5 5.00% 5.00%
Question 1/3
Calculate the price of the bond based on the current yield curve? (use 2 decimal digits)
incorrect
Question 2/3
Calculate the price of the bond based on the expected yield curve $ ______(keep two decimal points)
Question 3/3
You are 100% sure about your expectation of the movement of the yield curve in the near future. And you want to set up a trading position before the market price in the future shift of yield curve. What should you do?
Buy the bond
Sell the bond
Do nothing
Bright Company purchased $10,000,000 (face amount) of 10% bonds of Enterprise Company on January 1, 2021, paying $8,853,000. The 10-year bonds mature on January 1, 2031. Semiannual interest is payable each July 1 and January 1. The discount of $1,147,000 provides an effective yield (market rate) of 12%. Bright Company uses the effective-interest method and plans to hold these bonds to maturity.
On July 1, 2011, Bright Company should increase its Held-to-Maturity Debt Securities
account for the Enterprise Co. bonds by __________.
Answer:
$31,180
Explanation:
Bright Company
Bond payments $8,853,000 ×0.06
=$531,180
Less Face amount $10,000,000×0.05
=$500,000
Held-to-Maturity Debt Securities $31,180
($531,180-$500,000)
Effective yield (market rate)
12%÷2= 6%.
Bonds
10%÷2=5%
Milltown Company sells used cars. During the month, the dealership sold 22 cars at an average price of $15,000 each. The budget for the month was to sell 20 cars at an average price of $16,000. Compute the dealership sales volume variance for the month.
Answer:
Sales volume variance = $32,000 favorable
Explanation:
The sales volume variance is calculated as the difference between the budgeted and the actual sales volume multiplied by he standard price per unit
Unit
Budgeted sales units 20
Actual sales units 22
Sales volume 2
Standard price per unit ×$16,000
Sales volume variance $32,000 Favorable
Sales volume variance = $32,000
For each of the following items, indicate by using the appropriate code letter, how the item should be reported in the statement of cash flows, using the indirect method.
A. Added to net income
B. Deducted from net income
C. Cash outflow—investing activity
D. Cash inflow—investing activity
E. Cash outflow—financing activity
F. Cash inflow—financing activity
G. Significant noncash investing and financing activity
____ 1. Decrease in accounts payable during a period
____ 2. Declaration and payment of a cash dividend.
____ 3. Loss on sale of land.
____ 4. Decrease in accounts receivable during a period.
____ 5. Redemption of bonds for cash.
____ 6. Proceeds from sale of equipment at book value.
____ 7. Issuance of common stock for cash.
____ 8. Purchase of a building for cash.
____ 9. Acquisition of land in exchange for common stock.
____ 10. Increase in merchandise inventory during a period
Answer:
1. Decrease in accounts payable during a period - Deducted from net income (B)
2. Declaration and payment of a cash dividend - Cash outflow (financing activity ) (E)
3. Loss on disposal of land - Added to net income (A)
4. Decrease in accounts receivable during a period - Added to net income (A)
5. Redemption of bonds for cash - Cash outflow (financing activity) (E)
6. Proceeds from sale of equipment at book value - Cash inflow (investing activity ) (D)
7. Issuance of common stock for cash - Cash inflow (financing activity) (F)
8. Purchase of a building for cash - Cash outflow(investing activity ) (C)
9. Acquisition of land in exchange for common stock - Significant non-cash (investing and financing activity ) (G)
10. Increase in inventory during a period - Deducted from net income (B)
Your firm is considering two different projects that are mutually exclusiveand they will be replaced once the project is over. Given a required return of 12%, which project should your firm undertake(Hint: you should calculate the EAA to decide which is the better project for this problem)
Your firm is considering two different projects that are mutually exclusiveand they will be replaced once the project is over. Given a required return of 12%, which project should your firm undertake(Hint: you should calculate the EAA to decide which is the better project for this problem)
Time 0 1 2 3
Project A -25,000 15,000 20,000 20,000
Project B -25,000 11,000 11,000 11,000
Answer:
Project A should be better and should be accepted because it produces a higher EAA of $7,732.5746
Explanation:
NPV = PV of cash inflow- Initial cost
PV of cash inflow = 15,000×1.12^(-1) + 20,000×1.12^(-2) + 20,000×1.12^(-3)=43,572.33
NPV = 43,572.33 -25,000 =18572.33965
EAA= NPV /Annuity factor
= 18572.339/2.401831268 = 7732.57468
Project B
PV of annuity = A× (1- (1+r)^(-n))/r
= 11,000× (1-1.12^(-4))/0.12=33410.84281
NPV = 33410.84281 - 25,000= 8410.842813
EAA = 8410.842/3.03734 =2769.139
Project A should be better and should be accepted because it produces a higher EAA of $7,732.5746
A client in the 28 percent marginal tax bracket is comparing a municipal bond that offers a 4.8 percent yield to maturity and a similar risk corporate bond that offers a 6.55 percent yield. Which bond will give the client more profit after taxes
Answer:
The municipal bond will give the client more profit after taxes because it has a higher equivalent yield (8.06%) compared to that of the corporate bond (6.55%)
Explanation:
Here, we are to compare a municipal bond to a corporate bond and determine which of the two will give the client more profit after taxes.
The first thing to calculate here is the equivalent taxable yield of the municipal yield.
Mathematically, we employ a mathematical approach approach here;
Equivalent taxable yield = Municipal yield/(1-tax rate)
From the question, we can identify that the tax rate is 28%
28% = 28/100 = 0.28
The municipal yield = 4.8%
Inputing these into the equation;
Equivalent taxable yield = 5.8/(1-0.28) = 5.8/0.72 = 8.06% approximately
Now comparing this value to the value of the corporate bond, we can see that the municipal bond offers a better profit after tax since it has a higher equivalent yield
Consider the following costs that were incurred during the current year:
1. Tire costs incurred
2. Sales commissions paid to the sales force
3. Wood glue consumed in the manufacture
4. Hourly wages of refinery security guards
5. The salary of a financial vice president
6. Advertising costs
7. Straight-line depreciation on factory machinery
8. Wages of assembly-line personnel
9. Delivery costs incurred
10. Newsprint consumed in printing
11. Plant insurance costs
12. LED costs incurred in light-bulb manufacturing
Required: Evaluate each of the preceding and determine whether the cost is:
(a) a product cost or a period cost
(b) variable or fixed in terms of behavior
AND
(c) for the product costs only, whether the cost is properly classified as direct material, direct labor, or manufacturing overhead. Item 1 is done as an
example: 1. Tire costs: Product cost, variable, direct material
Answer:
1. Tire costs incurred: Product cost, variable, and direct material.
2. Sales commissions paid to the sales force: Period, variable.
3. Wood glue consumed in the manufacture: Product cost, variable, and manufacturing overhead.
4. Hourly wages of refinery security guards: Product cost, fixed, and manufacturing overhead.
5. The salary of a financial vice president: Period cost, fixed.
6. Advertising costs: Period cost, fixed.
7. Straight-line depreciation on factory machinery: Product cost, fixed, and manufacturing overhead.
8. Wages of assembly-line personnel: Product cost, variable, and direct labor.
9. Delivery costs incurred: Period, variable.
10. Newsprint consumed in printing: Product cost, variable, and direct material.
11. Plant insurance costs: Product cost, fixed, and manufacturing overhead.
12. LED costs incurred in light-bulb manufacturing: Product cost, variable, and direct material.
Explanation:
In Accounting, Costing is the measurements of the cost of production of goods and services by assessing the fixed costs and variable costs associated with each step of production. The various type of costs are;
1. Product cost is the expenses incurred when a product is sold.
2. Period cost refers to the period in which costs are incurred.
3. Fixed cost refers to costs that remains constant over variations in production activity, irrespective of amount of goods.
3. Variable cost refers to cost which are the same per unit of production but vary directly with level of output.
4. Direct costs refer to the costs that are peculiar to a particular department or area while indirect cost can't be traced to any.
5. Manufacturing overhead are all indirect cost required in producing a good that isn't associated with direct materials or direct labor.
Suppose the rate of return on short-term government securities (perceived to be risk-free) is about 6%. Suppose also that the expected rate of return required by the market for a portfolio with a beta of 1 is 16%. According to the capital asset pricing model:
A. What is the expected return on the market portfolio?
B. What would be the expected return on a zero-beta stock?
C. The stock risk has been evaluated at beta = -.5. Is the stock overpriced or under-priced?
Answer:
A. 16%
B. 6%
C. Underpriced. Note: This answer is based on the example we used to show how to complete solving this kind of question.
Explanation:
Given;
E(rM) = return required by the market for a portfolio = 16%, or 0.16
rf = rate of return on short-term government securities (perceived to be risk-free) = 6%, or 0.06
We can now proceed as follows:
A. What is the expected return on the market portfolio?
The formula for calculating the expected return on the market portfolio is as follows:
Expected return on the market portfolio = ([E(rM) - rf] / B) + rf
Where;
B = beta of the portfolio = 1
Substituting these values into the equation above, we have:
Expected return on the market portfolio = (0.16 - 0.06)/1 + 0.06 = 0.16, or 16%.
B. What would be the expected return on a zero-beta stock?
The formula for calculating the expected return on a zero-beta stock is as follows:
Expected return on a zero-beta stock = rf + B[E(rM) - rf]
Where;
B = beta of the portfolio = 0
Substituting these values into the equation above, we have:
Expected return on a zero-beta stock = 0.06 + 0[0.16 - 0.06] = 0.06, or 6%.
C. The stock risk has been evaluated at beta = -.5. Is the stock overpriced or under-priced?
In line with capital asset pricing model (CAPM), we have:
Expected return = E(r) = rf + B[E(rM) - rf]
B = beta of the portfolio = -0.5
Substituting these values into the equation above, we have:
E(r) = 0.06 - 0.5(0.16 - 0.06) = 0.06 - 0.05 = 0.01, or 1.00%
Note: To determine if a stock overpriced or under-priced, we make use of an example here by assuming buying a share of stock at $40 which is expected to pay $3 dividends next year and it is expected to sold then for $41.
In line with CAPM, the price must be:
Po = ($41 + $3) / [1 + E(r)] = $44 / (1 + 0.01) = $43.46
Since $43.46 is greater than purchase price of $40, the stock is underpriced.
