Answer:
Cash (Dr.) $50,000
Lease Receivable (Cr.) $50,000
Explanation:
Lessor is the person who leases the item to gain financial benefit from the asset user lease. Lessee is a person who uses the assets but does not owns it so he pays lease rentals. In the given scenario the lease recoding at inception in the lessor books will be cash debit and lease receivable credit.
The YTM on a 6-month $20 par value zero-coupon bond is 18%, and the YTM on a 1-year $20 par value zero-coupon bond is 20%. These YTMs are semiannual BEYs. What would be the arbitrage-free price of a 1-year bond with coupon rate of 20% (semiannual payments) and par value of $1000
Answer: $1,000.83
Explanation:
1 year coupon to be paid is:
= 20% * 1,000 * 1/2 semi annual
= $100
Relevant rates:
Zero coupon YTM to semi annual = 18%/2 = 9%
1 year bond = 20%/2 = 10%
Arbitrage free price:
=( Coupon / (1 + zero coupon rate) ^ no. of periods of zero coupon bond) + ((Coupon + Par value) / (1 + coupon rate of 1 year bond) ^no. of periods)
= (100 / (1 + 9%)¹) + ( (100 + 1,000) / ( 1 + 10%)²)
= $1,000.83
On December 31, 2020, Ainsworth, Inc., had 560 million shares of common stock outstanding. Fifteen million shares of 7%, $100 par value cumulative, nonconvertible preferred stock were sold on January 2, 2021. On April 30, 2021, Ainsworth purchased 30 million shares of its common stock as treasury stock. Twelve million treasury shares were sold on August 31. Ainsworth issued a 5% common stock dividend on June 12, 2021. No cash dividends were declared in 2021. For the year ended December 31, 2021, Ainsworth reported a net loss of $120 million, including an after-tax loss from discontinued operations of $360 million. Required: 1. Compute Ainsworth's net loss per share for the year ended December 31, 2021. 2. Compute the per share amount of income or loss from continuing operations for the year ended December 31, 2021. 3. Prepare an EPS presentation that would be appropriate to appear on Ainsworth's 2021 and 2020 comparative income statements. Assume EPS was reported in 2020 as $0.75, based on net income (no discontinued operations) of $420 million and a weighted-average number of common shares of 560 million.
Answer:
Ainsworth, Inc.
1. Net loss per share for the year ended December 31, 2021:
= $0.211
2. Per share amount of income from continuing operations
= $0.422
3. Comparative Income Statements:
2021 2020
Net income (continuing operations) $240 million $420 million
Net income (including
discontinued operations) ($120 million) $0
Weighted-average common stock shares 558 million 560 million
EPS (continuing operations) $0.43 $0.75
EPS (including discontinued operations) ($0.21) $0
Explanation:
a) Data and Calculations:
December 31, 2020:
Outstanding common stock = 560 million shares
Outstanding 7%, Cumulative non-convertible preferred stock = 15 million shares at $100 par value
April 30, 2021:
Treasury stock purchased = 30 million
June 12, 2021:
5% Common Stock dividend = 26.5 million shares(530 million * 5%)
August 31, 2021:
Treasury stock sold = 12 million
December 31, 2021: Outstanding common stock = 568.5 million
Therefore, net income from continuing operations = $240 million
After-tax loss from discontinued operations = $360 million
December 31, 2021 reported net loss = ($120 million)
1. Net loss per share for the year ended December 31, 2021:
= $120 million/568.5 million = $0.211
2. Per share amount of income from continuing operations = $240 million/568.5 million = $0.422
3. Comparative Income Statements:
2021 2020
Net income (continuing operations) $240 million $420 million
Net income (including
discontinuing operations) ($120 million) $0
Weighted-average common stock shares 558 million 560 million
EPS (continuing operations) $0.43 $0.75
EPS (including discontinued operations) ($0.21) $0
Weighted-average of Common Stock shares:
January 1, 2021: Outstanding 560 million * 12/12 = 560 million
April 30, 2021: Treasury stock 30 million * 8/12 = -20 million
June 12, 2021: Stock dividend 26.5 million *6.5/12 14 million
August 31, 2021: Treasury stock sold 12 million *4/12 4 million
December 31, 2021: Weighted-average outstanding = 558 million
Organizational culture is a system of shared beliefs and values that develops within an organization and guides its members' behavior. Culture can vary considerably across organizations, with each placing different emphases on risk-taking, treatment of employees, teamwork, rules and regulations, conflict and criticism, and rewards. This activity is important because different types of cultures are better suited to achieving different strategic goals, and managers can use this knowledge to their benefit. Match the followings with each other.
a. Daveed
b. Miranda
c. Caprice
d. Olivia
e. Joseph
f. Aaron
g. Wallace
h. Leslie
1. Clan
2. Adhocracy
3. Hierarchy
4. Market
Answer: See explanation
Explanation:
Clan: Caprice and Joseph
A clan culture is a collaborative environment whereby everyone is involved and valued and the company is one happy family. Therefore, Caprice and Joseph guts in here.
Adhocracy: Miranda and Wallace
Here, the workers are seen as leaders and risk takers and the culture is based on creativity. Therefore, Miranda and Wallace fits in here.
Hierarchy: Aaron and Leslie
This culture is typically based on control and structure, coordination and control.
Market: Daveed and Olivia
Here, the main aim is to achieve results as there's intense competition and there's focus on profit.
Wanting to finalize a sale before year-end, on December 29, WR Outfitters sold to Bob a warehouse and the land for $125,000. The appraised fair market value of the warehouse was $75,000, and the appraised value of the land was $100,000. (Do not round intermediate calculations. Round your answers to the nearest whole dollar amount.)
a. What is Bob's basis in the warehouse and in the land?
b. What would be Bob's basis in the warehouse and in the land if the appraised value of the warehouse is $50,000, and the appraised value of the land is $125,000?
c. Which appraisal would Bob likely prefer?
Answer:
A. Warehouse basis $53,571
Land Basis $71,429
B. Warehouse basis $35,714
Land Basis $89,286
C. Appraisal basis in part (a)
Explanation:
a. Calculation to determine What would be Bob’s basis in the warehouse and in the land
Warehouse basis=$125,000*$75,000/(100,000+75,000)
Warehouse basis=$53,571
Land Basis=$125,000*$100,000/($100,000+$75,000)
Land Basis=$71,429
Therefore What would be Bob’s basis in the warehouse is $53,571 and in the land is $71,429
b. Calculation to determine What would be Bob’s basis in the warehouse and in the land if the appraised value of the warehouse was $50,000, and the appraised value of the land was $125,000
Warehouse basis=$125,000*$50,000/($50,000+$125,000)Warehouse basis=$35,714
Land basis=$125,000*$125,000/($125,000+$50,000)Land basis=$89,286
Therefore What would be Bob’s basis in the warehouse is $89,286 and in the land is $35,714 if the appraised value of the warehouse was $50,000, and the appraised value of the land was $125,000
c. Based on the above calculation for part (a) and part (b) the APPRAISAL that Bob would likely prefer will be the APPRAISAL amount in part (a) reason been that the appraisal enables him to allocate additional basis to the warehouse which was lesser in part (b).
Exercise 177 Kirk Company issued a $3,500,000, 10%, 10-year mortgage note payable to finance the construction of a building at December 31, 2020. The terms provide for annual installment payments of $569,609. Prepare the entry to record: (a) the mortgage loan on December 31, 2020. (b) the first installment payment. (Credit account titles are automatically indented when amount is entered. Do not indent manually.) Account Titles and Explanation Debit Credit (a) (b) Click if you would like to Show Work for this question: Open Show Work
Answer:
The annual installment payment consists of both interest payments and principal repayment.
The interest is based on the remaining balance which is $3,500,000 in this instance:
= 10% * 3,500,000
= $350,000
Principal repayment = 569,509 - 350,000
= $219,509
a.
Date Account Titles and Explanation Debit Credit
Dec, 31 2020 Cash $569,609
Mortgage Payment $569,609
Date Account Titles and Explanation Debit Credit
Dec, 31 2021 Interest Expense $350,000
Mortgage Payable $219,509
Cash $569,609
The following is a list of accounts and adjusted amounts for Rollcom, Inc., for the fiscal year ended September 30, 2018. The accounts have normal debit or credit balances.
Accounts Payable $39,100
Accounts Receivable 66,500
Accumulated Depreciation 21,500
Cash 80,300
Common Stock 94,800
Equipment 90,700
Income Tax Expense 10,500
Notes Payable (long-term) 1,500
Office Expenses 6,300
Rent Expense 164,200
Retained Earnings 99,900
Salaries and Wages Expense 128,700
Sales Revenue 325,600
Supplies 35,200
Prepare the closing entry required at September 30, 2018.
Answer:
30-Sep-18
Dr Sales revenue 325,600
Cr Income tax expense 10,500
Cr Office expenses 6,300
Cr Rent expense 164,200
Cr Salaries and wages expense 128,700
Retained earnings $15,900
Explanation:
Preparation of the closing entry required at September 30, 2018
30-Sep-18
Dr Sales revenue 325,600
Cr Income tax expense 10,500
Cr Office expenses 6,300
Cr Rent expense 164,200
Cr Salaries and wages expense 128,700
Retained earnings $15,900
(325,600-10,500-6,300-164,200-128,700)
(To record closing entries)
The cash flow data for GM is below Cash dividend..............................................$ 94,000 New PPE........................................................$ 61,000 Interest paid on debt.................................$ 39,000 Sales of old equipment.............................$ 86,000 Repurchase of stock..................................$ 83,000 Cash payments to suppliers...................$ 109,000 Cash collections from customers.........$ 440,000 A) Find the net cash provided by or used in investing activities.
Answer:
the net cash provided by investing activities is $25,000
Explanation:
The computation of the net cash provided by or used in investing activities is shown below
= Sale of old equipment - New PPE
= $86,000 - $61,000
= $25,000
Hence, the net cash provided by investing activities is $25,000
During the year, Belyk Paving Co. had sales of $2,425,000. Cost of goods sold, administrative and selling expenses, and depreciation expense were $1,335,000, $635,000, and $450,000, respectively. In addition, the company had an interest expense of $275,000 and a tax rate of 25%. (Ignore any tax loss or carryforward provision and assume interest expense is fully deductible). Calculate the firm's net new long-term debt added during the year.
Answer:
See below
Explanation:
Sales
$2,425,000
Less:
Cost of goods sold
($1,335,000)
Administration and selling expense
($635,000)
Depreciation
($450,000)
EBIT
$5,000
Less:
Interest
($275,000)
No tax
Net income/loss
-$270,000
Operating cash flow = $5,000 + $450,000 - $0 = $500,000
Cash flow from assets = Operating cash flow - Change in networking capital - Net capital spending
= $500,000 - $0 - $0
= $500,000
Cash flow to shareholders = Dividends - New equity
= $0 - $0
= $0
Cash flow to creditors = Cash flow from assets - Cash flow to shareholders
= $500,000 - $0
= $500,000
Therefore, new long term debt added during the year is;
= Interest - Cash flow to creditors
= $275,000 - $500,000
= $225,000
What types of planning do you do in your personal life? Describe these
plans in terms of being (a) strategic or operational, (b) short term or long
term, and (c) specific or directional.
Answer:
Every day we perform series of activities in which few are very important while other may not be. But to perform every activity, we need to design the things systematically. We prioritize our activities as per their importance and then we take the action to make it fruitful. As per their value and importance we may develop following types of plan in our daily life;
Strategic or operational plan: Strategic or Operational Plan means an arsenal plan which tells how we can achieve the ultimate goal of our given task by creating clear and defined steps. As an operational plan, if we have an important task in our hand then we have to create step by step action which is oriented towards achievement of overall objective. Eg: If Periodical exams are due for...
Assuming that everything else is equal, select the bond that most likely pays a higher Interest rate:
a. A bond issued by a government that is engaged in a civil war.
b. A bond issued by the government of Japan.
Which of the following statements about stocks are correct?
1. The Standard & Poor's 500 is an example of a stock index.
2. A corporation can increase the price of its stock by issuing additional shares of stock.
3. The corporation that issues stock raises revenue every time its stock changes hands on organized stock exchanges.
Answer:
1. a. A bond issued by a government that is engaged in a civil war.
2. 1. The Standard & Poor's 500 is an example of a stock index.
Explanation:
A key part of the interest rate on a bond is the risk attached to the issuer of the bond. A government engaged in civil war is definitely riskier than the stable government of Japan because there is a chance that they might not even pay if they are defeated and a new government comes in. Such a government will therefore issue at a higher rate to cater for this risk.
The Standard and Poor's 500 is indeed an example of a stock index and it is used to gauge the performance of 500 large companies on various exchanges in the U.S. A corporation can either increase, decrease or maintain stock price by issuing stock so option 2 is wrong. Option 3 is wrong as well because trading stock on an organized exchange does not bring in any revenue for the issuing firm.
Alliance Manufacturing Company has two support departments, Maintenance Department and Personnel Department, and two producing departments, X and Y. The Maintenance Department costs of $90,000 are allocated on the basis of standard service hours used. The Personnel Department costs of $13,500 are allocated on the basis of number of employees. The direct costs of Departments X and Y are $27,000 and $45,000, respectively.
Data on standard service hours and number of employees are as follows:
Maint. Person. Dept. Dept.
Dept. Dept. X Y
Standard service hours used 200 150 1,200 600
Number of employees 25 50 75 75
Direct labor hours 250 250 1,000 500
Predetermined overhead rates for Departments X and Y, respectively, are based on direct labor hours. What is the overhead rate for Department X assuming the direct method is used?
a. $27.00
b. $81.00
c. $46.88
d. $93.75
Answer: d. $93.75
Explanation:
First find the total cost of Department X:
= Direct cost + Maintenance cost + Personnel costs
Maintenance cost for Dep. X:
= Standard hours for Maintenance / Total hours * Maintenance costs
= 1,200 / (1,200 + 600) * 90,000
= $60,000
Personnel costs:
= Number of employees in X / Total employees * Personnel costs
= 75 / (75 + 75) * 13,500
= $6,750
Total cost:
= 27,000 + 60,000 + 6,750
= $93,750
Predetermined overhead rates:
= Cost / Direct labor hours
= 93,750 / 1,000 hours
= $93.75
The total sales of a product, by all competitors in the industry, is:____.a. highest in the introduction stage.b. lowest in the market maturity stage.c. highest in the sales decline stage.d. lowest in the market growth stage.e. lowest in the market introduction stage.
Answer:
The total sales of a product, by all competitors in the industry, is:____
e. lowest in the market introduction stage.
Explanation:
The product life cycle refers to the time period when a product is first introduced to a market until it exits the market. There are four main stages in a product life cycle. They include introduction, growth, maturity, and decline. It is during the introduction phase that the total sales are lowest. The low sales are witnessed again during the latter stage of decline. The highest sales are achieved during the maturity stage.
20. The shipment of goods or rendering of services to a foreign buyer, located in a
foreign country is:
Importing
Exporting
Foreign Exchange
Importing and Exporting
define credit crunch.
Answer:
"a sudden sharp reduction in the availability of money or credit from banks and other lenders."
Answer: a sudden sharp reduction in availability of money or credit from Banks and other lenders
Explanation:
Described below are certain transactions of Pharoah Company for 2021:
1. On May 10, the company purchased goods from Fox Company for $77,800, terms 2/10, n/30. Purchases and accounts payable are recorded at net amounts. The invoice was paid on May 18.
2. On June 1, the company purchased equipment for $87,600 from Rao Company, paying $24,000 in cash and giving a one-year, 9% note for the balance.
3. On September 30, the company discounted at 11% its $180,000, one-year zero-interest-bearing note at Virginia State Bank, receiving $162,000.
Required:
Prepare the journal entries necessary to record the transactions above using appropriate dates.
Answer:
May 10, 2021
Dr Purchases/Inventory $76,244
Cr Accounts Payable $76,244
May 18, 2021
Dr Accounts Payable $76,244
Cr Cash $76,244
June 1, 2021
Dr Equipment $87,600
Cr Cash $24,000
Cr Notes Payable $63,600
September 30, 2021
Dr Cash $162,000
Dr Discount on Notes Payable $18,000
Cr Notes Payable $180,000
Explanation:
Preparation of the journal entries necessary to record the transactions above using appropriate dates
May 10, 2021
Dr Purchases/Inventory $76,244
Cr Accounts Payable $76,244
[$77,800-(2%*$77,800)]
May 18, 2021
Dr Accounts Payable $76,244
Cr Cash $76,244
[$77,800-(2%*$77,800)]
June 1, 2021
Dr Equipment $87,600
Cr Cash $24,000
Cr Notes Payable $63,600
($87,600-$24,000)
September 30, 2021
Dr Cash $162,000
Dr Discount on Notes Payable $18,000
($180,000-$162,000)
Cr Notes Payable $180,000
Carlton Soup Company makes crackers, bread, and soup. Presented here are the items listed on a simplified version of its recent balance sheet (dollars in millions) presented in alphabetical order: Accounts payable $ 668 Other assets $ 132 Accounts receivable 595 Other current assets 70 Accrued expenses 599 Other current debt 1,080 Cash and cash equivalents 300 Other noncurrent liabilities 3,806 Common stock, $0.0375 par value 386 Property, plant, and equipment, net 2,397 Intangible assets 3,023 Retained earnings 936 Inventories 958 Required: Prepare a classified consolidated balance sheet for Carlton Soup for the current year (ended July 31). (Enter your answers in millions (i.e., 10,000,000 should be entered as 10).)'
Answer:
Carlton Soup Company
Classified Balance Sheet as of July 31 (dollars in millions)
Assets
Current Assets:
Cash and cash equivalents $300
Accounts receivable 595
Inventories 958
Other current assets 70
Total current assets $1,923
Non-current assets:
Property, plant, and equipment, net 2,397
Other assets 132
Intangible assets 3,023
Total non-current assets $5,552
Total assets $7,475
Liabilities and Equity
Current Liabilities:
Accounts payable $ 668
Accrued expenses 599
Other current debt 1,080
Total current liabilities $2,347
Other noncurrent liabilities 3,806
Total liabilities $6,153
Equity:
Common stock, $0.0375 par value 386
Retained earnings 936
Total equity $1,322
Total liabilities and equity $7,475
Explanation:
a) Data and Calculations:
Cash and cash equivalents 300
Accounts receivable 595
Inventories 958
Other current assets 70
Property, plant, and equipment, net 2,397
Other assets 132
Intangible assets 3,023
Accounts payable $ 668
Accrued expenses 599
Other current debt 1,080
Other noncurrent liabilities 3,806
Common stock, $0.0375 par value 386
Retained earnings 936
Croquet, Inc. currently manufactures a wicket as its main product. The costs per unit are as follows: Direct materials and direct labor $13 Variable overhead 7 Fixed overhead 10 Total $30 Saran Company has contacted Croquet with an offer to sell it 5,000 of the wickets for $17 each. Fixed costs of $4 per unit is unavoidable. Should Croquet make or buy the wickets, why
Answer:
See below
Explanation:
Supplier's quotation (5,000 × $17)
$85,000
Less: Relevant costs
Variable cost (5,000 × $16)
$80,000
Avoidable fixed cost (5,000 × $4)
$20,000
Balance $100,000
Loss $15,000
Croquet should buy the widgets because the relevant cost of in house production is higher than the cost of buying it outside.
Solomon has a balance of $4,000 on his credit card account, which has a minimum payment requirement of 4 percent. What is the minimum payment on his account?
Answer:
$1,000
Explanation:
Answer:
160$
Explanation:
The Bottling Department of Mountain Springs Water Company had 5,000 liters in beginning work in process inventory (20% complete). During the period, 58,000 liters were completed. The ending work in process inventory was 3,000 liters (90% complete). All inventories are costed by the first-in, first-out method. What are the equivalent units for conversion costs under the FIFO method
Answer:
59,700 units
Explanation:
Equivalent units
Only focus on the work done during the production period when using FIFO.
Conversion costs = 5,000 x 80 % + 53,000 x 100% + 3,000 x 90 %
= 59,700 units
the equivalent units for conversion costs under the FIFO method are 59,700 units.
Jim Busby calls his broker to inquire about purchasing a bond of Disk Storage Systems. His broker quotes a price of $1,160. Jim is concerned that the bond might be overpriced based on the facts involved. The $1,000 par value bond pays 10 percent interest, and it has 20 years remaining until maturity. The current yield to maturity on similar bonds is 8 percent. a. Calculate the present value of the bond. (Do not round intermediate calculations. Round your final answer to 2 decimal places. Assume interest payments are annual.)
Answer:
Bond Price or Present value = $1196.362948 rounded off to $1196.36
Explanation:
To calculate the quote/price of the bond today, which is the present value of the bond, we will use the formula for the price of the bond. As the bond is an annual bond, the annual coupon payment, number of periods and annual YTM will be,
Coupon Payment (C) = 1000 * 0.1 = $100
Total periods (n) = 20
r or YTM = 0.08 or 8%
The formula to calculate the price of the bonds today is attached.
Bond Price = 100 * [( 1 - (1+0.08)^-20) / 0.08] + 1000 / (1+0.08)^20
Bond Price or Present value = $1196.362948 rounded off to $1196.36
Tim Legler requires an estimate of the cost of goods lost by a fire on March 9. Merchandise on hand on January 1 was $38,490. Purchases since January 1 were $93,260; freight-in, $4,700; purchase returns and allowances, $3,000. Sales are made at 33 1/3% above cost and totaled $143,400 to March 9. Goods costing $12,120 were left undamaged by the fire; remaining goods were destroyed.(a) Compute the cost of goods destroyed.(b) Compute the cost of goods destroyed, assuming that the gross profit is 33 1/3% of sales. (Round ratios for computational purposes to 5 decimal places, e.g. 78.72345% and final answer to 0 decimal places, e.g. 28,987.)
Answer:
(a) Cost of goods destroyed = $13,780
(b) Cost of goods destroyed = $25,730
Explanation:
(a) Compute the cost of goods destroyed.
Markup = Percentage at which sales are made above cost = 33 1/3% = 33.33333%
Margin = Markup / (1 + Markup) = 33.33333% / (1 + 33.33333%) = 25%
Sales = Cost of goods sold * (100% + Markup) ............ (1)
Substituting relevant value into equation (1) and solve for Cost of goods sold, we have:
$143,400 = Cost of goods sold * (100% + 33.33333%)
Cost of goods sold = $143,400 / (100% + 33.33333%) = $107,550
Cost of goods available for sale = Merchandise on hand on January 1 + Purchases since January 1 + Freight-in + Purchase returns and allowances = $38,490 + $93,260 + $4,700 - $3,000 = $133,450
Closing stock = Cost of goods available for sale - Cost of goods sold = $133,450 - $107,550 = 25,900
Cost of goods destroyed = Closing stock - Cost of goods left undamaged = $25,900 - $12,120 = $13,780
(b) Compute the cost of goods destroyed, assuming that the gross profit is 33 1/3% of sales. (Round ratios for computational purposes to 5 decimal places, e.g. 78.72345% and final answer to 0 decimal places, e.g. 28,987.)
Margin = gross profit percentage of sales = 33 1/3% = 33.33333%
Markup = Margin / (1 - Margin) = 33.33333% / (1 - 33.33333%) = 50%
Sales = Cost of goods sold * (100% + Markup) ............ (1)
Substituting relevant value into equation (1) and solve for Cost of goods sold, we have:
$143,400 = Cost of goods sold * (100% + 50%%)
Cost of goods sold = $143,400 / (100% + 50%) = $95,600
Cost of goods available for sale = $133,450
Closing stock = Cost of goods available for sale - Cost of goods sold = $133,450 - $95,600 = 37,850
Cost of goods destroyed = Closing stock - Cost of goods left undamaged = $37,850 - $12,120 = $25,730
In the production of a wooden chair within the circular flow model, what would the resource market include?
A
furtniture company
B
office supply company
forest
D
wooden chairs
Answer:
forest/trees
Explanation:
Item 12 A production department's output for the most recent month consisted of 10,500 units completed and transferred to the next stage of production and 10,500 units in ending Work in Process inventory. The units in ending Work in Process inventory were 60% complete with respect to both direct materials and conversion costs. There were 1,100 units in beginning Work in Process inventory, and they were 80% complete with respect to both direct materials and conversion costs. Calculate the equivalent units of production for the month, assuming the company uses the weighted average method.
Answer:
Total equivalent units= 16,800
Explanation:
Giving the following information:
Beginning inventory= 1,100 units 80% complete
Units produced= 10,500 units
Ending WIP= 10,500 60% complete
The weighted average method blends the costs and units of the previous period with the costs and units of the current period.
Beginning inventory= 0
Units completed in the period= 100%
Ending inventory WIP= units*completion
In this exercise:
Beginning inventory= 0
Units completed in the period= 10,500
Ending inventory WIP= 10,500*0.6
Total equivalent units= 16,800
Santana Rey receives the March bank statement for Business Solutions on April 11, 2018. The March 31 bank statement shows an ending cash balance of $67,666. A comparison of the bank statement with the general ledger Cash account, No. 101, reveals the following.
S. Rey notices that the bank erroneously cleared a $530 check against her account in March that she did not issue. The check documentation included with the bank statement shows that this check was actually issued by a company named Business Systems.
On March 25, the bank lists a $59 charge for the safety deposit box expense that Business Solutions agreed to rent from the bank beginning March 25.
On March 26, the bank lists a $103 charge for printed checks that Business Solutions ordered from the bank.
On March 31, the bank lists $31 interest earned on Business Solutions’s checking account for the month of March.
S. Rey notices that the check she issued for $138 on March 31, 2018, has not yet cleared the bank.
S. Rey verifies that all deposits made in March do appear on the March bank statement.
The general ledger Cash account, No. 101, shows an ending cash balance per books of $68,189 as of March 31 (prior to any reconciliation).
Required:
1. Prepare a bank reconciliation for Business Solutions for the month ended March 31, 2018.
BUSINESS SOLUTIONS
Bank Reconciliation
March 31, 2018
Bank statement balance Book balance
Add: Add:
Deduct: Deduct:
Adjusted bank balance Adjusted book balance
2. Prepare any necessary adjusting entries. Use Miscellaneous Expenses, for any bank charges. Use Interest Revenue, for any interest earned on the checking account for the month of March. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)
Record journal entry related to the $530 check charged erroneously to Business Solutions' account, if any.
Record the journal entry related to the $59 debit memorandum, if any.
Record the journal entry related to the $103 debit memorandum for printed checks.
Record the journal entry for the $31 interest earned.
S. Rey verifies that all deposits made in March do appear on the March bank statement.
Answer:
See below
Explanation:
Bank reconciliation statement
1.
Bank balance statement
$67,666
Add:
Bank error
$530
Deduct:
Outstanding check
($138)
Adjusted bank balance
$68,058
Cash book balance
$68,189
Add:
Bank interest
$31
Deduct:
Safety deposit rental
($59)
Charge for checks
($103)
Adjusted cash balance
$68,058
2. Journal entries
March-31 Cash a/c Dr $530
To Bank errors Cr $530
March-31 Outstanding checks a/c Dr $138
To Cash Cr $138
March-31 Miscellaneous expense a/c Dr $162
To Cash Cr $162
March-31 Cash a/c Dr $31
To Interest revenue Cr $31
ABC Company sells several products. Information of average revenue and costs is as follows: Selling price per unit $34 Variable costs per unit: Direct material $6 Direct manufacturing labor $2.40 Manufacturing overhead $0.80 Selling costs $3.20 Annual fixed costs $78,000 The company sells 12,000 units at the end of the year. The contribution margin per unit is ________.
Answer:
Contribution margin per unit= $21.6
Explanation:
Giving the following information:
Selling price per unit $34
Variable costs per unit:
Direct material $6
Direct manufacturing labor $2.40
Manufacturing overhead $0.80
Selling costs $3.20
The contribution margin is calculated by deducting from the selling price all the variable components:
Contribution margin per unit= selling price - total unitary variable cost
Contribution margin per unit= 34 - 6 - 2.4 - 0.8 - 3.2
Contribution margin per unit= $21.6
n January 1, 2022, Smeder Company, an 80% owned subsidiary of Collins, Inc. transferred equipment with a 10-year life (six of which remain with no salvage value) to Collins in exchange for $104,000 cash. At the date of transfer, Smeder's records carried the equipment at a historical cost of $140,000 less accumulated depreciation of $58,000. Straight-line depreciation is used. Smeder reported net income of $28,000 for 2022 and 2023, respectively. Prepare the consolidation entries related to the equipment for year 2022 and year 2023
Answer:
2022
Dr. Equipment _________ $22,000
Cr.Reserve Account _____$19,800
Cr. Depreciation expenses $2,200
2022
Dr. Depreciation Expense ___ $14,000
Cr. Accumulated Depreciation $14,000
2023
Dr. Depreciation Expense ___ $14,000
Cr. Accumulated Depreciation $14,000
Explanation:
2022
Calculate the net book value
Net book value = Historical cost - Accumulated depreciatin = $140,000 - $58,000 = $82,000
Unrealised profit on the sale of the asset = Cash receipt - Nreet book value = $104,000 - $82,000 = $22,000
Annual Depricaiton = Historical cost / remaining life = $140,000 / 10 = $14,000
Excess depreciation charged = Unrealised profit / Remaining life = $22,000 / 10 = $2,200
Stanley-Morgan Industries adopted a defined benefit pension plan on April 12, 2021. The provisions of the plan were not made retroactive to prior years. A local bank, engaged as trustee for the plan assets, expects plan assets to earn a 10% rate of return. The actual return was also 10% in 2021 and 2022\.\* A consulting firm, engaged as actuary, recommends 5% as the appropriate discount rate. The service cost is $260,000 for 2021 and $350,000 for 2022. Year-end funding is $270,000 for 2021 and $280,000 for 2022. No assumptions or estimates were revised during 2021.
We assume the estimated return was based on the actual return on similar investments at the inception of the plan and that, since the estimate didn't change, that also was the actual rate in 2022.
Required:
Calculate each of the following amounts as of both December 31, 2021, and December 31, 2022: (Enter your answers in thousands (i.e., 200,000 should be entered as 200).) December 31, December 31, 2021 2022
1. Projected benefit obligation
2. Plan assets
3. Pension expense
4. Net pension asset or net pension liability
Answer:
1. Projected Benefit Obligation 2021 $260,000
Projected Benefit Obligation 2022 $623,000
2.Plan assets 2021 $270,000
Plan assets 2022 $577,000
3. Pension expense 2021 $260,000
Pension expense 2022 $336,000
4.Net pension asset 2021 $ 10,000
Net pension liability2022 $46,000
Explanation:
1. Computation for Projected benefit obligation
for 2021 and 2022
Projected Benefit Obligation 2021
($)
Balance, January 1, 2021 $0
Service cost $260,000
Interest cost (5% x $0) $0
Benefits paid ($0)
Balance, December 31, 2021 $260,000
Projected Benefit Obligation 2022
Balance, December 31, 2021 $260,000
Service cost $350,000
Interest cost $13,000
(5% x $260,000)
Benefits paid($0)
Balance, December 31, 2022 $623,000
2. Computation for 2021 and 2022 Plan assets
Plan assets 2021
Balance, January 1, 2021 $ 0
Actual return on plan assets (10% x $0) $0
Contributions, 2021 $$270,000
Benefits paid ($0)
Balance, December 31, 2021 $270,000
Plan assets 2022
Balance, December 31, 2021 $270,000
Actual return on plan assets $27,000
(10% x $270,000)
Contributions, 2022 $280,000
Benefits paid (0)
Balance, December 31, 2022 $577,000
3. Computation for Pension expense for 2021 and 2022
Pension expense – 2021
Service cost $260,000
Interest cost (5% x $0) $0
Expected return on the plan assets $0
(10% x $0)
Pension expense $260,000
Pension Expense – 2022
Service cost $350,000
Interest cost $13,000
(5% x $260,000)
Expected return on the plan assets($27,000)
(10% x $270,000)
Pension expense $336,000
4. Computation for Net pension asset/liability for 2021 and 2022
2021
PBO $260,000
Less Plan assets $270,000
Net pension asset, Dec. 31, 2021 $ 10,000
2022
PBO $623,000
Less Plan assets $577,000
Net pension liability, Dec. 31, 2022 $ 46,000
define common stock.
Sommer, Inc., is considering a project that will result in initial aftertax cash savings of $2.3 million at the end of the first year, and these savings will grow at a rate of 2 percent per year indefinitely. The firm has a target debt-equity ratio of .60, a cost of equity of 10 percent, and an aftertax cost of debt of 4.6 percent. The cost-saving proposal is somewhat riskier than the usual project the firm undertakes; management uses the subjective approach and applies an adjustment factor of 3 percent to the cost of capital for such risky projects.
Required:
What is the maximum inital cost the company would be willing to pay for the project?
Answer:
the maximum initial cost is 25.62674095 million
Explanation:
The computation of the maximum initial cost of the company is shown below:
But before that the discount rate is
= 0.6 ÷ 1.6 × 4.6% + 1 ÷ 1.6 × 10% + 3%
= 10.9750%
Now Maximum initial cost is
=2.3 ÷ (10.975% - 2%)
= 25.62674095 million
Hence, the maximum initial cost is 25.62674095 million
The fairness ratio is a monetary metric that measures the amount of leverage used by using a company. It uses investments in property and the amount of equity to decide how well a corporation manages its money owed
and money its asset requirements
How is equity ratio calculated?he shareholder fairness ratio is expressed as a percentage and calculated by means of dividing complete shareholders' equity via the whole assets of the company. The end result represents the amount of the property on which shareholders have a residual claim
Equity interest, described as the quantity of equity a single individual holds in a business, is a frequent thought to the small commercial
enterprise world. For example, if an angel investor receives 25% possession of a company, the investor has a 25% equity hobby in that business
learn more about equity ratio here;
https://brainly.com/question/27993089 #SPJ4On December 31, 20X5, Day Co. leased a new machine from Parr with the following pertinent information: Lease term 6 years Annual rental payable at beginning of each year $50,000 Useful life of machine 8 years Day's incremental borrowing rate 15% Implicit interest rate in lease (known by Day) 12% Present value of an annuity of one in advance for six periods at:_______.
12% 4.61
15% 4.35
The lease is not renewable, and the machine reverts to Parr at the termination of the lease. The cost of the machine on Parr's accounting records is $375,500. At the beginning of the lease term, Day should record a lease liability of:_______.
a. $230,500.
b. $375,500.
c. $0.
d. $217,500.
Answer: $230,500
Explanation:
Based on the information given, to solve the question, we will use the interest rate of 12%. Since the present value factors have already been given, the lease liability to be recorded will then be:
= 50,000 × PV at 12%
= 50000 × 4.61
= $230,500
Therefore, At the beginning of the lease term, Day should record a lease liability of $230,500.
