Answer:
C
Explanation:
As far as coverages goes, Comprehensive is the least expensive. However, liability is the basic coverage required on most insurance policies. Many states require a minimum insurance coverage of liability.
Pool Perfection provided pool maintenance services worth $1,600 during July; in June, the customers had paid in advance for these services. During July, the company performed $1,000 of pool maintenance services, and in August, collected payment from those customers. Also, during July, the company accepted an order to perform $500 of pool maintenance services in August; the customers will pay for these services during August. The company uses accrual basis accounting. The Service Revenue account should be credited for:
Answer:
$1,600
Explanation:
It is important to note that the company uses accrual basis accounting. The Service Revenue account should be credited for $1,600
Say you are planning to start a new business. You expect to have losses for the first 2 years and then achieve significant profits. But, in order to grow, you will need to be able to keep the after-tax earnings. You also want to limit your liability. How will you structure your business regarding issuing debt versus increasing equity and why
Answer:
Answer is explained in the explanation section below.
Explanation:
Solution:
It is perfectly natural that the loss will occur at the start. Since it is not able to pay fixed interest obligations, a preferential or equity capital increase is recommended. The debt fund will create a financial crisis in the capital structure because it will be difficult for the company to fulfil its payment obligation on the initial stage.
The composition of debt capital will contribute to a certain tax savings, but it will certainly increase the overall outflow of the fund.
For Example:
Total Capital is 1,000,000 costing of 500,00 debt and 500,000 equity and 40 % tax bracket.
Suppose total return is 10% on capital.
Earnings for the year : 1,000,000 * 10 % = 100,000
Interest obligation (assume borrowed at 12 % ) = 60,000
Profit before tax = 40,000
Tax at the rate 40% = 16,000
Earning after tax available for growth = 24,000
Total capital only consists of equities in this example.
The earnings will be same = 100,000
Less tax at the rate 40 % = 40,000
Net earnings available for future growth = 60,000
We have an extra earnings available for future growth is 36,000 (60,000 - 24,000).
Ignore tax saving 24,000 (40,000 - 16,000) Because the enterprise requires more for future growth following tax earnings at the initial stage.
So,
The business was structured to maximize the use of own resources instead of borrowing the fund.
Beginning inventory, purchases, and sales data for DVD players are as follows: November 1 Inventory 52 units at $79 10 Sale 35 units 15 Purchase 27 units at $83 20 Sale 25 units 24 Sale 13 units 30 Purchase 39 units at $86 The business maintains a perpetual inventory system, costing by the first-in, first-out method.
Determine the cost of the goods sold for each sale and the inventory balance after each sale, presenting the data in the form illustrated.
Under FIFO, if units are in inventory at two different costs, enter the units with the LOWER unit cost first in the Cost of Goods Sold Unit Cost column and in the Inventory Unit Cost column and LOWER unit cost first in the Inventory.
Answer:
November 1 Inventory 52 units at $79
November 10 Sale 35 units
COGS = 35 x $79 = $2,765Inventory balance = 17 x $79 = $1,343November 15 Purchase 27 units at $83
November 20 Sale 25 units
COGS = (17 x $79) + (3 x $83) = $1,592Inventory balance = (24 x $83) = $1,992November 24 Sale 13 units
COGS = 13 x $83 = $1,079Inventory balance = 11 x $83 = $913November 30 Purchase 39 units at $86
Inventory balance = $913 + (39 x $86) = $4,267Leaper Corporation uses an activity-based costing system with the following three activity cost pools: Activity Cost Pool Total Activity Fabrication 35,000 machine-hours Order processing 250 orders Other Not applicable The Other activity cost pool is used to accumulate costs of idle capacity and organization-sustaining costs. The company has provided the following data concerning its costs: Wages and salaries $ 380,000 Depreciation 150,000 Occupancy 170,000 Total $ 700,000 The distribution of resource consumption across activity cost pools is given below: Activity Cost Pools Fabrication Order Processing Other Total Wages and salaries 35% 30% 35% 100% Depreciation 15% 45% 40% 100% Occupancy 35% 30% 35% 100% The activity rate for the Order Processing activity cost pool is closest to:
Answer:
Order processing= $930 per order
Explanation:
First, we need to calculate the estimated costs for order processing:
Order processing cost= (380,000*0.3) + (150,000*0.45) + (170,000*0.3)
Order processing cost=$232,500
Now, we can calculate the activity rate:
Predetermined manufacturing overhead rate= total estimated overhead costs for the period/ total amount of allocation base
Order processing= 232,500 / 250
Order processing= $930 per order
Savers make deposits and investments in order to earn what?
Why don't savers invest their money directly with the businesses?
Answer:
Savers make deposits and investment in order to earn interest on their money. This often works very well because they do not earn only interest as a percentage of their money, but also interest as a percentage of previously accrued interest, something known as compound interest.
Savers do not invest their money directly with the businesses because real economic activity tends to be riskier (although it could also be more profitable for this same reason). This is why they often prefer to invest the money on financial instruments.
Larry Ellison starts a company that manufacturers high-end custom leather bags. He hires 3 employees. Each employee only begins working on a bag when a customer order has been received and then she makes the bag from beginning to end. The average production time of a bag is 2.2 days with a standard deviation of 3 days. Larry expects to receive one customer order per day on average. The interarrival times of orders have a coefficient of variation of 1. What is the expected duration, in days, between when an order is received and when production begins on the bag?
Answer:
0.93 days
Explanation:
Number of employees ( m ) = 3
Average production time of a bag ( p ) = 2.2 days
standard deviation ( std ) = 3 days
Number of customer order expected per day = 1
Coefficient of interarrival times of order ( c ) = 1
arrival time ( a ) = 1
Determine the expected duration between when a n order is received and when production begins on the bag
determine the utilization time = p / ( m*a ) = 2.2 / ( 3 * 1 ) = 0.733
Hence the expected time :
Tq = 0.93 days
attached below is the detailed solution
In year 1, Kelley estimates bad debt expense of $10,000 for financial reporting purposes. The amount of bad debts deductible on the tax return was $2,000. The difference will be deducted on the tax return in the following year. The income tax rate is 40%. What is the balance in the deferred tax asset account at the end of year 1
Answer: $3,200
Explanation:
The following information can be deduced from the question:
Bad debt expense = $10,000
Bad debts deductible on tax return = $2000
Income tax rate = 40%
Therefore, the balance in the deferred tax asset account at the end of year 1 will be calculated thus:
= 40% x ($10,000 - $2,000)
= 0.4 × $8000
= $3,200
An order has been received from an overseas customer for 3700 units to be delivered this month at a special discounted price. This order would not change the total amount of the company's fixed costs. The variable selling and administrative expense would be $2.90 less per unit on this order than on normal sales. Direct labor is a variable cost in this company. Suppose there is not enough idle capacity to produce all of the units for the overseas customer and accepting the special order would require cutting back on production of 1550 units for regular customers. The minimum acceptable price per unit for the special order is closest to:
Answer: $88.62
Explanation:
First find the costs associated with the order.
= Direct material + Direct labor + Variable manufacturing overhead + Variable selling expense + Contribution margin lost from cutting back production for regular customers
Contriution margin lost from cutting production = Selling price - Direct material - Direct labor - Variable manufacturing overhead - Variable selling expense
= 120.10 - 51.10 - 9.80 - 5.20
= $54
= (3,700 * 51.10) + (3,700 * 9.80) + (3,700 * 2.80) + ((5.20 - 2.90) * 3,700) + ( 54 * 1,550)
= $327,900
Price per unit = 327,900 / 3,700
= $88.62
Joe Corporation produces and sells two products. In the most recent month, Product C90B had sales of $19,950 and variable expenses of $5,985. Product Y45E had sales of $26,190 and variable expenses of $10,476. The fixed expenses of the entire company were $17,000. If the sales mix were to shift toward Product C90B with total dollar sales remaining constant, the overall break-even point for the entire company:
Answer:
Decrease
Explanation:
Calculation to determine overall break-even point for the entire company
Contribution margin for C90B = ($19,950-
$5,985)/$19,950
Contribution margin for C90B = 70%
Contribution margin for Y45E =( $26,190- $10,476)/$26,190
Contribution margin for Y45E= 60%
Therefore Based on the above calculation if the sales mix were to shift toward Product C90B with total dollar sales remaining constant, the overall break-even point for the entire company
Would DECREASE reason been that C90B have more contribution margin ratio of 70% compare to Y45E which had contribution margin ratio of 60%
Harrison Forklift's pension expense includes a service cost of $26 million. Harrison began the year with a pension liability of $46 million (underfunded pension plan).
1. Interest cost, $7; expected return on assets, $20; amortization of net loss, $6.
2. Interest cost, $22; expected return on assets, $16; amortization of net gain, $6.
3. Interest cost, $22; expected return on assets, $16; amortization of net loss, $6; amortization of prior service cost, $7 million.
Required:
Prepare the appropriate general journal entries to record Harrison's pension expense in each of the above independent situations regarding the other components of pension expense ($ in millions).
Answer:
1. ($ in millions)
Dr Pension expense $19
Dr Plan assets (expected return on assets) $20
Cr PBO$33
Cr Net loss—AOCI(current amortization) $6
2. ($ in millions)
Dr Pension expense $26
Dr Plan assets (expected return on assets) $16
Dr Net gain—AOCI(current amortization) $6
Cr PBO $48
3. ($ in millions)
Dr Pension expense $45
Dr Plan assets (expected return on assets) $16
Cr PBO $48
Cr Net loss—AOCI(current amortization) $6
Cr Prior service cost (current Amortization) $7
Explanation:
Preparation of the appropriate general journal entries to record Harrison's pension expense
1. ($ in millions)
Dr Pension expense $19
($33+$6-$20)
Dr Plan assets (expected return on assets) $20
Cr PBO($26 service cost + $7 interest cost) $33
Cr Net loss—AOCI(current amortization) $6
2. ($ in millions)
Dr Pension expense $26
($48-$16-$6)
Dr Plan assets (expected return on assets) $16
Dr Net gain—AOCI(current amortization) $6
Cr PBO($26 service cost + $22 interest cost) $48
3. ($ in millions)
Dr Pension expense $45
($48+$6+$7-$16)
Dr Plan assets (expected return on assets) $16
Cr PBO($26 service cost + $22 interest cost) $48
Cr Net loss—AOCI(current amortization) $6
Cr Prior service cost (current Amortization) $7
Data related to the inventories of Costco Medical Supply are presented below: Surgical Surgical Rehab Rehab Equipment Supplies Equipment Supplies Selling price $ 260 $ 100 $ 340 $ 165 Cost 170 90 250 162 Costs to sell 30 15 25 10 In applying the lower of cost or net realizable value rule, the inventory of surgical equipment would be valued at: Multiple Choice $240. $170. $152. $230.
Answer:
$85
Explanation:
Calculation for what the inventory of surgical supplies would be valued at
Net realizable value = $100 - $15
Net realizable value = $85
Therefore based on the above calculation the inventory of surgical supplies would be valued at $85
Doug and Sue Click file a joint tax return and decide to itemize their deductions. The Clicks' income for the year consists of $90,000 in salary, $2,000 interest income, and $800 long-term capital loss. The Clicks' expenses for the year consist of $1,500 investment interest expense. Assuming that the Clicks' marginal tax rate is 35 percent, what is the amount of their investment interest expense deduction for the year
Answer:
$1,500
Explanation:
Based on the information given we were told that the expenses for the year was the amount of $1,500 which represent the investment interest expense which simply means that the amount of their INVESTMENT INTEREST EXPENSE deduction for the year will be the amount of $1,500 which is INVESTMENT INTEREST EXPENSE amount.
Therefore the amount of their investment interest expense deduction for the year will be $1,500
Calculate the present value of the following sequence of willingness to pay: $150 this year; $150 next year; $150 in year 2, and $50 in year 3. Use a 5% discount rate. Recalculate using an 3% discount rate. Show your work. What is the effect of using a lower discount rate on the present value of the stream of willingness to pay
Answer:
$472.10
$482.78
decreasing the discount rate increases the present value of the willingness to pay
Explanation:
Present value is the sum of discounted cash flows
Present value can be calculated using a financial calculator
Cash flow in year 0 - 2 = $150
Cash flow in year 3 = $50
PV when I is 5% = 472.10
PV when I is 3% = 482.78
To find the PV using a financial calculator:
1. Input the cash flow values by pressing the CF button. After inputting the value, press enter and the arrow facing a downward direction.
2. after inputting all the cash flows, press the NPV button, input the value for I, press enter and the arrow facing a downward direction.
3. Press compute
Suppose the economy of the large country of Hendrix is currently experiencing economic growth and has a trade deficit. Consider the possible effects of this economic growth on the trade balance and place them in the appropriate category. Match the followings.
a. Likely to occur during economic growth and increase the trade deficit.
b. Likely to occur during economic growth and decrease the trade deficit.
c. Not likely to occur during economic growth
1. [imports decrease]
2. [domestic private investment increases]
3. [government borrowing decreases]
4. [government borrowing increases]
5. [private savings decrease]
6. [domestic private investment decreases]
7. [private savings increase]
8. [imports increase]
Answer:
Likely to occur during economic growth and increase the trade deficit.
1. Domestic private investment increases
2. Imports increase
When there is a period of economic growth, people generally have more income in the economy. Their consumption will increase and they will demand more foreign goods as well as domestic. This will lead to imports rising.
Likely to occur during economic growth and decrease the trade deficit.
1. Private saving increase.
2. Government borrowing decrease
With people earning more income, they will be able to save more of that income and because they are not buying with those savings, trade deficit drops.
The government would also not have to borrow as much to prop up the economy as the economy is also doing well. This means less need for foreign funds so a lower trade deficit ensues.
Not likely to occur during economic growth.
1. Imports decrease.
2. Government borrowing increases.
When there is economic growth, it is unusual to see that imports are decreasing.
Government would also not have to borrow as much as the economy is doing well on its own and does not need the government to pump money into it.
Ontario has provided the following year-end balances: Cash, $24,000 Patents, $7,900 Accounts receivable, $9,100 Property, plant, and equipment, $98,900 Prepaid insurance, $4,600 Accumulated depreciation, $20,000 Inventory, $44,000 Retained earnings, 15,500 Trademarks, $13,600 Accounts payable, $8,000 Goodwill, $10,000 How much are Ontario's net noncurrent assets
Answer:
$110,400
Explanation:
The computation of the net non-current assets is shown below:
= Patent + Property, plant, and equipment - accumulated depreciation + trade marks + goodwill
= $7,900 + $98,900 - $20,000 + $13,600 + $10,000
= $110,400
A business plan is a detailed written statement that describes the nature of the business, the target market, the advantages the business will have over competition, and the resources and qualifications of the owner(s).
a. True
b. False
Answer:
a. True
Explanation:
This statement is true, as the business plan is a document that contains all the detailed details of the business objectives, the actions necessary to achieve these objectives and goals.
An effective business plan will be one that will help to reduce the risks and uncertainties added to a business, helping to better position a new organization in the market. Included in the business plan are financial planning, marketing planning, operational planning and all the necessary steps for the company's activities to take place in an anticipated manner, increasing the potential of the organization.
Paperclips has just acquired Office Space, so Ned wanted to inform the employees that they were no longer Office Space employees but Paperclips employees. As new Paperclips employees, Ned also wanted to make sure that everyone was familiar with the internal controls he employs. Each employee was given an employee handbook, which included Paperclips' Mission Statement, in order to educate the new employees about the merged company's policies and procedures. Which of the following internal control systems is being used in this scenario?A) Monitoring processes.B) Risk assessment.C) Control activities.D) Control environment.
Answer:
Paperclips
The internal control system that is being used in this scenario is:
D) Control environment.
Explanation:
The control environment of Paperclips is always set at the top, just as Ned is attempting to do with the new employees from Office Space. An employee handbook is an excellent way to convey the management's tone for an effective control environment. It will help the employees to understand their responsibilities and authority in their different roles and to be committed to ethical behavior.
Spirit Importers imports beverages to the USA from various countries. XYZ Liquor is a Texas company that purchases much of its stock from Spirit. The two contract for Spirit to provide XYZ with rum from Venezuela. To encourage the government of Venezuela to end human rights abuses. President Trump issues sanctions against Venenzuela, including a prohibition on the import and sale in the USA of Venezuelan rum. Which of the following is accurate about the enforceability of the Spirit-XYZ contract?
a. The sanctions are irrelevant to validity of this bilateral contract, so a court will enforce it.
b. The contract is voidable, so that either party can choose to terminate it.
c. The sanctions are irrelevant to the validity of this unilateral contract, so a court will enforce it.
d. The contract is void, so no US court will enforce it.
Answer: d. The contract is void, so no US court will enforce it.
Explanation:
Sanctions imposed on other countries bear the full weight of the law in the U.S. unless the Judiciary dissents.
The sanctions placed on Venezuela makes importing rum from Venezuela a illegal action. The contract between these two parties is therefore void because they should not be engaging in illegal actions and no U.S. court would enforce it because that would be enforcing an illegal action.
Book Co. is an online book store which sells both fiction and non-fiction books. After analyzing the online book retail industry and assessing its current and predicted sales, Book Co. decides to move away from non-fictions and target only the fiction market which is expected to have a 20% growth in sales. This is an example of __________ strategy.
Answer:
A corporate-level strategy
Explanation:
Book Co. is an online book store that sells both fiction and non-fiction books. After analyzing the online book retail industry and assessing it's current and predicted sales, Book Co. decides to move away from non-fiction and target only the fiction market which is expected to have a 20% growth in sales. This is an example of a corporate-level strategy.
What are corporate-level strategies?That destination influences all the techniques and decisions in each other as a part of your enterprise. So, for instance, in case your commercial enterprise has reached market saturation and also you want to diversify to continue to exist, your company-degree method might be to unfold to new markets.
What are the 3 corporate strategies?To expand the business and increase profits.To maintain current business operations.To revive an ailing business.Learn more about corporate strategies here: https://brainly.com/question/17151786
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Bill Amends, owner of Real Estate Inc., buys and sells commercial properties. Recently, he sold land for $3,000,000 to the Blackhawk Group, a developer that plans to build a new shopping mall. In addition to the $3,000,000 sales price, Blackhawk Group agrees to pay Real Estate Inc. 1% of the retail sales of the mall for 10 years. Blackhawk estimates that retail sales in a typical mall project is $1,000,000 a year. Given the substantial increase in online sales that are occurring in the retail market, Bill had originally indicated that he would prefer a higher price for the land instead of the 1% future sales-based arrangement and suggested a price of $3,250,000. However, Blackhawk would not agree to those terms. What is the transaction price for the land and related royalty payment that Indigo Estate Inc. should record?
Answer:
$3,000,000
Explanation:
Land = $3,000,000
Royalty = $0
Total Transaction price is $3,000,000
As transaction price is fixed and certain price in which a transaction is made, we will record this only. So $3,000,000 is certain price as that is a definate price so it will be recorded. 1% royalty per year for 10 years should not be recorded as it is not certain that the revenue will be generated or not.
A process includes 9 tasks and there are 3 workers. Each task can be assigned to only one worker and each worker must be assigned consecutive tasks. You need to balance the line by assigning the 9 tasks to the 3 workers in such a way to optimize capacity per hour. The time to complete tasks 1 to 9 (in seconds) are as follows:
80, 50, 30, 25, 55, 15, 45, 105, 40
Reqiured:
What is the capacity of this process in units per hour?
Answer:
The capacity of this process in units per hour is:
= 2.43 tasks per worker hour.
Explanation:
a) Data and Calculations:
Number of tasks in the process = 9
Number of workers available = 3
Thus, each worker will accomplish 3 tasks (9/3)
Total time to accomplish the 9 tasks = Sum(80, 50, 30, 25, 55, 15, 45, 105, 40) = 445 seconds or 1.236 hours
Therefore, the capacity of the process per hour = 9/(1.236 * 3) = 9/3.708
= 2.43 tasks per worker hour
Aaron has entered into a contract with wilson
Identify which cost of inflation—menu costs or shoe-leather costs—is illustrated in each of the scenarios.
a. During the German hyperinflation of 1921‐1923, some workers reportedly were paid two to three times per day. They would then rush out to spend their earnings before they became nearly worthless.
This is an example of:_____
1. menu costs.
2. shoe‑leather costs.
b. A hyperinflation in Zimbabwe was so severe that, according to one observer of supermarket employees, they were "running around that store with label makers, changing the prices three, four times a day."
This is an example of:_____
1. menu costs.
2. shoe‑leather costs.
Answer:
shoe‑leather costs
. menu cost
Explanation:
Inflation is constant price in general price level
Types of inflation
demand pull inflationcost push inflationShoe leather cost is when people try to spend money immediately so they would not be holding money for a long time. This is because money loses its value in an inflation.
Menu costs are the costs of changing price constantly as a result of inflation, When there is inflation, prices increases regularly. As a result prices needs to be updated regularly.
Which of the following is the basic accounting equation?
A. Stockholders' or Owner's Equity = Liabilities + Assets
B. Assets = Liabilities + Income
C. Liabilities = Assets + Stockholders' or Owner's Equity
D. Assets = Liabilities + Stockholders' or Owner's Equity
Answer:
owner's equity=liabilities+assets(A)
Answer:
Assets=Liabilities+Stockholders' or Owner's equity
Explanation:
Just took the test
Bailey, Inc., is considering buying a new gang punch that would allow them to produce circuit boards more efficiently. The punch has a first cost of $100,000 and a useful life of 15 years. At the end of its useful life, the punch has no salvage value. Labor costs would increase $2,000 per year using the gang punch, but raw material costs would decrease $12,000 per year. MARR is 5 %/year.
A. What is the discounted payback period for this investment? Image for Bailey, Inc., is considering buying a new gang punch that would allow them to produce circuit boards more effi ______years
B. If the maximum attractive DPBP is 3 years, what is the decision rule for judging the worth of this investment?
C. Should Bailey buy the gang punch based on DPBP?
Answer:
14.2 years
Do not invest
yes
Explanation:
Discounted payback calculates the amount of time it takes to recover the amount invested in a project from it cumulative discounted cash flows
Cash flow each year = $12,000 - $2,000 = $10,000
Discounted cash flow in year 1 = 10,000 / 1.05 = 9.523.81
Discounted cash flow in year 2 = 10,000 / 1.05^2 = 9,070.29
Discounted cash flow in year 3 = 10,000 / 1.05^3 = 8,638.38
Discounted cash flow in year 4 = 10,000 / 1.05^4 = 8,227.02
Discounted cash flow in year 5 = 10,000 / 1.05^5 = 7,835.26
Discounted cash flow in year 6 = 10,000 / 1.05^6 = 7,462.15
Discounted cash flow in year 7 = 10,000 / 1.05^7 = 7,106.81
Discounted cash flow in year 8 = 10,000 / 1.05^8 = 6,768.39
Discounted cash flow in year 9 = 10,000 / 1.05^9 = 6,446.09
Discounted cash flow in year 10 = 10,000 / 1.05^10 = 6,139.13
Discounted cash flow in year 11 = 10,000 / 1.05^11 = 5846.79
Discounted cash flow in year 12 = 10,000 / 1.05^12 = 5568.37
Discounted cash flow in year 13 = 10,000 / 1.05^13 = 5303.21
Discounted cash flow in year 14 = 10,000 / 1.05^14 =5050.68
Discounted cash flow in year 15 = 10,000 / 1.05^15 = 4810.17
Discounted payback period = [-100,000 + ( discounted cash flows from year 1 to 14) ] + 1013.62/4810.17 = 14.2 years
The cash flows would turn positive between year 14 and 15
If the DPBP is 3 years, the project should not be accepted because the payback period is 14.2 years which is greater than 3 years
Bailey buy the gang punch based on DPBP because the amount invested is recouped with the useful life of the machine
Indicate whether these receivables are reported as accounts receivable, notes receivable, or other receivables on a balance sheet. (a) Advanced $10,000 to an employee. select an account title (b) Received a promissory note of $34,000 for services performed. select an account title (c) Sold merchandise on account for $60,000 to a customer. select an account title
Answer:
Indicating how each receivable is reported on the balance sheet:
(a) Advanced $10,000 to an employee = Other Receivable
(b) Received a promissory note of $34,000 for services performed = Notes Receivable
(c) Sold merchandise on account for $60,000 to a customer = Accounts Receivable
Explanation:
The advance to an employee is reported as Other Receivable, while the credit sale to a customer is reported as an Accounts Receivable. Finally, the promissory note received from a client for services rendered on credit is reported as Notes Receivable. This classification of receivables shows the true nature of the underlying transactions.
In 1974, the price level for Pacifica was 100, the price level for Atlantica was also 100, and in the foreign exchange market 1 Pacifica pound was equal to 1 Atlantica mark. In 2003, the price level in Pacifica had risen to 280 and the price level in Atlantica had risen to 360. a. According to PPP, what should the pound-mark exchange rate be in 2003
Answer: 0.78 pound mark exchange rate
Explanation:
The Purchasing power parity (PPP) is typically used to make comparison between the currencies of different countries' currencies and also used in comparing their standards of living.
According to PPP, the pound-mark exchange rate in 2003 will be calculated as:
= 280/360
= 0.78
Alphabet Company, which uses the periodic inventory method, purchases different letters for resale. Alphabet had no beginning inventory. It purchased A thru G in January at $10.50 per letter. In February, it purchased H thru L at $12.50 per letter. It purchased M thru R in March at $13.50 per letter. It sold A, D, E, H, J and N in October. There were no additional purchases or sales during the remainder of the year.Use the information above to answer the following question. If Alphabet Company uses the FIFO method, what is the cost of its ending inventory?a. $24b. $42c. $58d. $76
Answer: $154.00
Explanation:
If the company is using FIFO, they would have sold off the earliest purchases first. As the sold 6 letters in October, the letter left from the first purchase is:
A to G = 7 letter
= 7 - 6
= 1 letter
Remaining inventory = 1 letter at $10.50
H - L = 5 letter
= 5 * 12.50 = $62.50
M through to R = 6 letter
= 6 * 13.50
= $81
Total ending inventory = 10.50 + 62.50 + 81
= $154.00
Note: Options are most likely for a variant of this question.
On July 15, 2019, Matrix Corp. sells 20,000 snow shovels to a distributor for $15 per shovel. The distributor pays the amount on July 15, 2019, and has the right to return any of the snow shovels for any reason within 180 days for a full refund. Matrix uses the expected value method and estimates that 8% of the snow shovels will be returned and it is probable that no more than 8% of the shovels will be returned. How much sales revenue should Matrix recognize on July 15, 2019, from this sale
Answer:
the sales revenue recognized is 276,000
Explanation:
The computation of the sales revenue recognized is shown below;
= (20,000 × $15) - (20,000 × $15 × 8%)
= $300,000 - $24,000
= $276,000
Hence, the sales revenue recognized is 276,000
Southern Tours is considering acquiring Holiday Vacations. Management believes Holiday Vacations can generate cash flows of $218,000, $224,000, and $238,000 over the next three years, respectively. After that time, they feel the business will be worthless. If the desired rate of return is 14.5 percent, what is the maximum Southern Tours should pay today to acquire Holiday Vacations?
Answer:
$519,799.59
Explanation:
Discount rate = R = 14.50%
Year Cash flows Discount factor PV of cash flows
1 218,000.00 0.873362 190,393.0131
2 224,000.00 0.762762 170,858.6793
3 238,000.00 0.666168 158,547.9011
Total of PV = NPV = $519,799.59
Note:
Df = 1/(1+R)^Year
PV of cash flows = Cash flows x Df
