Answers
Answer:
The correct option is Increase and Decrease respectively
Explanation:
Related Questions
If inventory is being valued at cost and the price level is steadily rising, which of the three costing methods (FIFO, LIFO, weighted-average) will yield the lowest annual income tax expense?
Answers
Answer:
LIFO
Explanation:
It will be the one that give higher Cost of goods sold. We also know that:
Cost of goods sold = Opening Inventory + Inventory Purchases - Closing Inventory
So this means the lower the closing inventory the higher the cost of goods sold and in time of price increases it will be more appropriate to use LIFO method which will reduce the Closing Inventory and this will increase the cost of goods sold and thus decrease in profit. This reduced profit means that the tax expense will also be lower in value.
Similarly the second attractive option will be the Weighted Average and the least attractive option would be FIFO costing method.
Shankar Company uses a perpetual system to record inventory transactions. The company purchases inventory on account on February 2 for $22,000. In addition to the cost of inventory, the company also pays $420 for freight charges associated with the purchase on the same day.Record the purchase of inventory on February 2, including the freight charges. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)
1. Record the purchase of inventory on account.
2. Record the payment of freight charges in cash.
Answers
Answer:
1.
February 2
Dr Purchased Inventory $22,000
Cr Accounts Payable $22,000
2.
February 2
Dr Inventory 420
Cr Cash 420
Explanation:
Shankar Company Journal entry
1.
February 2
Dr Purchased Inventory $22,000
Cr Accounts Payable $22,000
(To rcord the purchase of inventory on account)
2.
February 02
Dr Inventory 420
Cr Cash 420
(To record the payment of freight charges in cash)
Paul Company had 100,000 shares of common stock outstanding on January 1, 2016. On September 30, 2016, Paul sold 50,000 shares of common stock for cash. Paul also had 11,000 shares of convertible preferred stock outstanding throughout 2016. The preferred stock is $100 par, 5%, and is convertible into 3 shares of common for each share of preferred. Paul also had 520, 8%, convertible bonds outstanding throughout 2016. Each $1,000 bond is convertible into 30 shares of common stock. The bonds sold originally at face value. Reported net income for 2016 was $320,000 with a 40% tax rate. Common shareholders received $2.20 per share dividends after preferred dividends were paid in 2016. RequiredCompute basic and diluted earnings per share for 2016. (Round your answers to 2 decimal places.)
Answers
Answer:
basic earnings per share (EPS) = $2.36
diluted EPS = $1.64
Explanation:
weighted average common stocks:
January 1: 100,000 shares x 12/12 = 100,000
September 30: sold 50,000 shares x 3/12 = 12,500
total 112,500
net income = $320,000
preferred dividends = $100 x 5% x 11,000 = $55,000
diluted shares:
preferred stocks = 11,000 x 3 = 33,000
convertible bonds = 520 x 30 = 15,600
total 48,600
basic earnings per share (EPS) = (net income - preferred dividends) / weighted average shares = ($320,000 - $55,000) / 112,500 = $2.36
diluted EPS = (net income - preferred dividends )/ (weighted average shares + convertible preferred stocks + convertible bonds) = ($320,000 - $55,000) / (112,500 + 48,600) = $1.64
At the beginning of 2021, Artichoke Academy reported a balance in common stock of $164,000 and a balance in retained earnings of $64,000. During the year, the company issued additional shares of stock for $54,000, earned net income of $44,000, and paid dividends of $11,400. In addition, the company reported balances for the following assets and liabilities on December 31. Assets Liabilities Cash $54,000 Accounts payable $13,600 Supplies 12,300 Utilities payable 5,200 Prepaid rent 31,000 Salaries payable 4,900 Land 270,000 Notes payable 29,000.
Required:
1. Prepare a statement of stockholders’ equity.
2. Prepare a balance sheet.
Answers
Answer:
Artichoke Academy
Statement of Stockholders’ Equity
For the Year Ended December 31, 2021
Beginning balance Common Stock $164,000
Beginning balance retained earnings $64,000
Subtotal $228,000
Common Stock issued $54,000
Earned net income $44,000
Distributed dividends ($11,400)
Ending balance Common Stock $218,000
Ending balance retained earnings $96.600
Total Stockholders' Equity December 31, 2021: $314,600
Artichoke Academy
Balance Sheet
For the Year Ended December 31, 2021
Assets:
Cash $54,000
Prepaid rent $31,000
Supplies $12,300
Land $270,000
Total assets: $367,300
Liabilities and stockholders' equity:
Accounts payable $13,600
Utilities payable $5,200
Salaries payable $4,900
Notes payable $29,000
Common stock $218,000
Retained earnings $96,600
Total liabilities and stockholders' equity: $367,300
Identify Postings from Cash Payments Journal
Using the following cash payments journal, identify each of the posting references, indicated by a letter, as representing (1) a posting to a general ledger account, (2) a posting to a subsidiary ledger account, or (3) that No posting is required.
CASH PAYMENTS JOURNAL Page 46
Date Ck.No. Account Debited Post.Ref. Other AccountsDr. Accounts Payable Dr. Cash Cr.
20Y1
July 3 611 Energy Systems Co. (a) 4,000 4,000
July 5 612 Utilities Expense (b) 310 310
July 10 613 Prepaid Rent (c) 3,200 3,200
July 16 614 Flowers to Go, Inc. (d) 1,250 1,250
July 19 615 Advertising Expense (e) 640 640
July 22 616 Office Equipment (f) 3,600 3,600
July 25 617 Echo Co. (g) 5,500 5,500
July 26 618 Office Supplies (h) 250 250
July 31 619 Salaries Expense (i) 1,750 1,750
July 31 9,750 10,750 20,500
(j) (k) (l)
Answers
Answer:
Explanation:
The general ledger shows the record for every financial transaction which an organization does. The subsidiary ledger is just used to support the general ledger control account as it gives vital informations on sales, discounts, etc.
Based on the above explanation, the references, indicated by the letter will be posted thus:
a. This will be posted to the subsidiary ledger account.
b. This will be posted to the general ledger account.
c. This will be posted to the general ledger account.
d. This will be posted to the subsidiary ledger account.
e. This will be posted to the general ledger account.
f. This will be posted to the general ledger account.
g. This will be posted to the subsidiary ledger account.
h. This will be posted to the general ledger account
i. This will be posted to the general ledger account.
j. For this, there will be no posting required.
k. This will be posted to the general ledger account.
l. This will be posted to the general ledger account
Storytime Park competes with Splash World by providing a variety of rides. Storytime sells tickets at $ 100 per person as a one-day entrance fee. Variable costs are $ 60 per person, and fixed costs are $ 254 comma 000 per month. Compute Storytime Park's contribution margin ratio. Carry your computation to two decimal places. Use the contribution margin ratio approach to determine the sales revenue Storytime Park needs to break even.
Answers
Answer:
contribution margin ratio= 0.4
Break-even point (dollars)= $635,000
Explanation:
Giving the following information:
Storytime sells tickets at $ 100 per person as a one-day entrance fee.
Variable costs are $ 60 per person, and fixed costs are $254,000 per month.
To calculate the contribution margin ratio, we need to use the following formula:
contribution margin ratio= contribution margin/selling price
contribution margin ratio= (100 - 60)/100
contribution margin ratio= 0.4
To calculate the sales required to break even, we need to use the following formula:
Break-even point (dollars)= fixed costs/ contribution margin ratio
Break-even point (dollars)= 254,000/0.4
Break-even point (dollars)= $635,000
Determine the future value of the following single amounts (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1).
a. 13,000
b. 18,000
c. 31,000
d. 52,000
Answers
Question
Determine the future value of the following single amounts (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1).
i n
a. 13,000 5 % 18
b. 18,000 8 % 14
c. 31,000 8% 12
d. 52,000 6% 9
Answer:
Future Value
a = 31,286.05
b. = 52,869.48
c = 78,063.27
d. = 87,852.90
Explanation:
The future of a single sum can be determined as follows:
FV = PV × (1+r)^n
FV- Future value , PV - Present Value , r- rate of return per period , number of period
Future Value
a 13,000× (1.05)^18 = 31,286.05
b. 18,000× (1.08)^14 = 52,869.48
c 31,000 × 1.08^ 12 = 78,063.27
d. 52,000 × 1.06^9 = 87,852.90
During April, the first production department of a process manufacturing system completed its work on 355,000 units of a product and transferred them to the next department. Of these transferred units, 71,000 were in process in the production department at the beginning of April and 284,000 were started and completed in April. April's beginning inventory units were 65% complete with respect to materials and 35% complete with respect to conversion. At the end of April, 93,000 additional units were in process in the production department and were 90% complete with respect to materials and 40% complete with respect to conversion. The production department had $1,106,991 of direct materials and $800,823 of conversion costs charged to it during April. Also, its beginning inventory of $207,646 consists of $165,239 of direct materials cost and $42,407 of conversion costs.
1. Compute the direct materials cost per equivalent unit for April. (Round "Cost per EUP" to 2 decimal places.)
2. Compute the conversion cost per equivalent unit for April. (Round "Cost per EUP" to 2 decimal places.)
3. Using the FIFO method, assign April's costs to the department's output-specifically, its units transferred to the next department and its ending work in process inventory. (Round "Cost per EUP" to 2 decimal places.)
Answers
Answer:
1. $3.01
2.$2.20
3.
units transferred to the next department = $1,781,006
ending work in process inventory = $333,777
Explanation:
1. direct materials cost per equivalent unit for April.
The first step is to calculate the Total Equivalent units for Direct Materials
To finish opening work in progress ( 71,000 units × 0% ) = 0
Started and Completed during the period ( 284,000 × 100%) = 284,000
Closing Work In Process ( 93,000 × 90%) = 83,700
Total Equivalent units for Direct Materials = 367,700
Then Calculate the cost cost per equivalent unit
Cost per equivalent unit = Current Period Cost / Total Equivalent units
= $1,106,991 / 367,700
= $3.01058
= $3.01
2. conversion cost per equivalent unit for April.
The first step is to calculate the Total Equivalent units for Conversion
To finish opening work in progress ( 71,000 units × 60% ) = 42,600
Started and Completed during the period ( 284,000 × 100%) = 284,000
Closing Work In Process ( 93,000 × 40%) = 37,200
Total Equivalent units for Direct Materials = 363,800
Then Calculate the cost cost per equivalent unit
Cost per equivalent unit = Current Period Cost / Total Equivalent units
= $800,823 / 363,800
= $2.20127
= $2.20
3.assign April's costs to the department's output
Completed and Transferred
Opening Work In Process Cost $207,646
Add To finish Opening Work In Process :
Direct Materials ( 0 × $3.01) $0
Conversion Costs ( 42,600 × $2.20) $93,720
Add Started and Completed Costs (284,000 × $5.21) $1,479,640
Total Cost transferred $1,781,006
Ending Work In Process
Direct Materials ( 83,700 × $3.01) = $251,937
Conversion ( 37,200 × $2.20) = $81,840
Total Cost = $333,777
Bob uses the cash method of accounting. During the tax year (calendar year), he had the following income and expenses: Interest on a savings account (credited to his account on January 2 of next year) $ 68 Dividend received from Virginia Credit Union $814 Interest received on a 5-year certificate of deposit (left in CD account to compound) $910 Penalty on the early withdrawal of the 5-year certificate of deposit $ 50 What is the amount of interest income Bob must report for the current tax year?
Answers
Answer:
$814
Explanation:
When individuals or small firms use cash accounting, they will record any expenses or revenue when they are actually paid for or collected respectively.
In this case, Bob must record:
Dividend received from Virginia Credit Union $814Interests received on January 2, of next year are not included (they are included in next year's tax return). Interest received on a 5-year certificate of deposit (left in CD account to compound) is not included because it was earned before this year and left in CD to compound. The penalty for early withdrawal is associated with the CD, so it is not included.
Larry Bar opened a frame shop and completed these transactions:1. Larry started the shop by investing $40,800 cash and equipment valued at $18,800.2. Purchased $150 of office supplies on credit.3. Paid $2,000 cash for the receptionist's salary.4. Sold a custom frame service and collected a $5,300 cash on the sale.5. Completed framing services and billed the client $280.What was the balance of the cash account after these transactions were posted?
Answers
Answer:
$44,100
Explanation:
Larry Bar
Investment in Cash - Receptionist's salary+Sales of custom frame = Cash account balance
Investment in Cash $40,800
Paid $2,000 Receptionist's salary $2,000
Sales of custom frame $5,300
Hence:
$40,800-$2,000+$5,300
=$44,100
Cash account balance will be $44,100
shelhorse Corporation produces and sells a single product. Data concerning that product appear below:Per UnitPercent of Sales Selling price$240100% Variable expenses6025% Contribution margin$18075% Fixed expenses are $364,000 per month. The company is currently selling 5,900 units per month. Required: The marketing manager believes that a $21,000 increase in the monthly advertising budget would result in a 130 unit increase in monthly sales. What should be the overall effect on the company's monthly net operating income of this change
Answers
Answer:
Effect on income= $2,400 increase
Explanation:
Giving the following information:
Selling price= $240
Variable expenses= $60
Contribution margin= $180
Fixed expenses= $364,000 per month.
The company is currently selling 5,900 units per month.
The marketing manager believes that a $21,000 increase in the monthly advertising budget would result in a 130 unit increase in monthly sales.
First, we need to calculate the actual income:
Actual income= 5,900*180 - 364,000= $698,000
Now, the income with changes:
Income= 6,030*180 - 385,000= $700,400
Effect on income= $2,400 increase
A company is set to launch a new product line. At first, only the brand's logo is displayed in various media, without any explanation of what the brand is or what the brand does. Greater familiarity with the logo, in and of itself, tends to make consumers like the brand more. This strategy is known as:
Answers
Answer:
Mere exposure effect.
Explanation:
Just as the name sounds "mere exposure", this is explained to be a phenomenon where trust is build on familiarity. Constant usage, constant familiarizing with a particular person, object or product makes a person trust it more than others or its substitutes. This effect according to research and natural order is seen to be psychological that is why the company in the case above used only their logo in all media sampling and other adverts first just to trap the minds of those familiar with their brands before the advert. Simply here, a user can easily trust to buy the new product based on the older products.
Samson Company is an engineering firm. Many of the employees are engineers who are working individually on different projects. Most of the design work takes place on computers. The computers are connected by a network and employees can also "surf" the internet through their desk top computers. The president is concerned about productivity among his engineers. He has acquired software that allows him to monitor each engineer's computer work. Anytime during the day, the president can observe on her screen exactly what the different engineers are working on. The engineers are quite unhappy with this monitoring process. They feel it is unethical for the president to be able to access what they are working on without their knowledge. Describe the pros and cons of monitoring through observing the computer work of the engineers.
Answers
Answer:
Both pros and cons are explanied below.
Explanation:
Pros: First of all, the president of the firm can know exactly what the employees are looking at. Secondly, due to that previous reason, the president can know and be aware of, if there is one or more than one person that may surf in the internet for thing that are not appropiate (illegal weapons,etc) and therefore to contact police about. Moreover, the president will also have information about what every employee look at and therefore to comprehend or at least try to understand the employee better, but in an unethical way.
Cons: Well, in this case, the president is doing a very harmful and unethical technique in order to obtain what only he cares about and therefore that he is thinking very individually and that can harm the organization in a huge way. Moreover, the president will broke the privacy of the employees by doing it and that action will impact negatively in the workers and that will influece as well in their work in the company and consequently in the productivity of the firm.
Current assets for Bush Corporation are $260,000.00 and total assets are $600,000.00. Current liabilities are $170,000.00 and total liabilities are $300,000.00. Included in the current assets are merchandise inventory and prepaid expenses of $25,000.00 and $15,000.00, respectively. What is the acid-test ratio? A. 1.56 B. 0.87
Answers
Answer:
The acid test ratio is 1.38
Explanation:
The acid test ratio gives an indication of how easy it is for the company to pay back its short term obligations without considering inventory.
Acid test ratio=current assets-merchandise inventory/current liabilities
current assets is $260,000
current liabilities is $170,000
merchandise inventory is $25,000
acid test ratio=($260,000-$25,000)/$170,000= 1.38
The acid test ratio is 1.38 which is not of the options given
The only that is not as liquid as other current assets is merchandise inventory,hence deducted from current assets.
A&D Inc. is projecting the following increases and decreases over the next year: Inventory
- increase by $3 million Accounts receivable
- decrease by $2 million Accrued payroll taxes
- increase by $1 million Fixed assets
- increase by $5 million Long term debt
- increase by $4 million Revenues
- increase by $6 million As a result of its projections,
A&D Inc. can expect it's net working capital to:
a. increase by $7 million
b. Increase by $1 million.
c. Decrease by $1 million
d. Not change.
Answers
Answer:
The question is is properly formatted ,find below question:
A&D inc is projecting the following increases and decreases over the next year.
Inventory - increases by $3 million
accounts receivable - decrease by $2 million
Accrued payroll taxes - increase by $1 million
fixing assets - increase by $5 million
long term debt - increase by $4 million
revenues - increase by $6 million
The correct option is D,not change
Explanation:
The change in net working capital=change in current assets - change n current liabilities
change in current assets=increase in inventory-decrease in accounts receivable=$3 m-$2m=$1m
Change in current liabilities=increase in payroll taxes=$1m
Change in net working capital=$1m-$1m=$0
The correct option is d,not change since the change in net working capital expected is $0
Option C is wrong because that is change in both current assets and current liabilities respectively
Suppose a company, Re-Tire, has come out with a new approach to solve the problems of punctures. Its new wheel, which is made of steel, allows rubber "tread segments" of tire tread to be bolted directly to the wheel (see image; tire not actual size). No air is required, so the tire can’t go flat, and if one of the segments becomes damaged, the operator using basic hand tools can merely replace the segment without removing the wheel and dismounting and reinstalling the reparied tire. With an ordinary tire, the wheel has to be removed and the tire dismounted at a shop using special tools. The benefit is that the operator can be back to work almost immediately.Assume Re-Tire has a patent on the technology to create the wheel and tread segments, which requires extensive computer simulation in the design of the tread segments. Assume as well that because the technology for creating the rubber segments is less complex than that for air-filled tires, the cost of production for Re-Tire is approximately 20% lower than for regular tires. The steel wheels for the segments are roughly equivalent in cost to those used for regular air-filled tires (the wheels are not interchangeable). Around the world there are about 800,000 skid steer loaders in operation in various industries, and 90% of them use one of just two tire sizes. The replacement tire market for the loaders is over $700 million per year. What price should Re-Tire set for its combination wheel/tread segment product? Assume the standard wheel/air tire combination is $250.
Answers
Answer:
The description of the given question is described in the explanation section below.
Explanation:
Throughout my personal view, the cost including its combination wheel/tread sequence good or service should be set at $200 for Re-Tire. As the conventional wheel/air gear combined effect is $250 as well as the level of manufacture besides Re-Tire is about 20% lower than those for frequent tires.The profit of such a 20% reduction costs should be managed to pass forward with employees to gain the start promoting including the latest design and technical method that used produce such tires, and several other costs associated with that as well.The value proposition and perhaps even the accessibility added benefit will surely make clients consider buying but also setting up such tires, and also becoming frequent or long-term buyers of Re-Tire.Performance Bike Co. is a wholesaler of motorcycle supplies. An aging of the company's accounts receivable on December 31 and a historical analysis of the percentage of uncollectible accounts in each age category are as follows:
Estimate what the proper balance of the allowance for doubtful accounts should be as of December 31.
Performance Bike Co.
Estimation of Uncollectible Accounts
December 31
Age Interva l Balance Estimated Uncollectible Estimated Uncollectible
Accounts Percent Accounts Amount
Not past due $890,000 3/4% $
1-30 days past due 97,900 2%
31-60 days past due 44,500 6%
61-90 days past due 32,000 16%
91-180 days past due 23,100 40%
Over 180 days past due 16,900 65%
Total $1,104,400
Answers
Answer:
$36,648
Explanation:
age balance % uncollectible total
Not past due $890,000 3/4% $ 6,675
1-30 days past due $97,900 2% $ 1,958
31-60 days past due $44,500 6% $2,670
61-90 days past due $32,000 16% $ 5,120
91-180 days past due $23,100 40% $ 9,240
Over 180 days past due $16,900 65% $10,985
Total $1,104,400 $36,648
journal entry should be:
December 31, 202x, bad debt expense
Dr Bad debt expense 36,648
Cr Allowance for doubtful accounts 36,648
Carey Company had sales in 2019 of $1,658,800 on 63,800 units. Variable costs totaled $1,148,400, and fixed costs totaled $467,000.A new raw material is available that will decrease the variable costs per unit by 20% (or $3.60). However, to process the new raw material, fixed operating costs will increase by $94,000. Management feels that one-half of the decline in the variable costs per unit should be passed on to customers in the form of a sales price reduction. The marketing department expects that this sales price reduction will result in a 5% increase in the number of units sold.
Requried:
a. Prepare a projected CVP income statement for 2020, assuming the changes have not been made.
b. Prepare a projected CVP income statement for 2017, assuming that changes are made as described.
Answers
Answer:
Carey Company
a) Projected CVP Income Statement for 2020 (without changes):
Sales $1,658,800
Variable costs 1,148,400
Contribution $510,400
Fixed Costs 467,000
Profit $43,400
b) Projected CVP Income Statement for 2020 (with changes)
Sales $1,621,158
Variable costs 964,656
Contribution $656,502
Fixed Costs 561,000
Profit $95,502
Explanation:
a) Sales units will increase from 63,800 to 66,990 (63,800 x 1.05)
b) Old selling price = $1,658,800/63,800 = $26 per unit
c) New selling price = $26.00 - $1.80 = $24.20 per unit
d) Old variable cost per unit = $1,148,400/63,800 = $18
e) New variable cost per unit = $18 - 3.60 = $14.40
f) Sales Value = $24.20 x 66,990 = $1,621,158
g) Variable costs = $14.40 x 66,990 = $964,656
h) New fixed cost = $467,000 + 94,000 = $561,000
i) A CVP Income Statement is a Cost Volume Profit income statement whereby the costs are identified according to their cost behaviors of whether they are fixed or variable or semi-fixed.
Sheffield Corp. began operations on April 1 by issuing 52,500 shares of $4 par value common stock for cash at $15 per share. In addition, Sheffield issued 2,600 shares of $1 par value preferred stock for $3 per share. Journalize the issuance of the common and preferred shares.
Answers
Answer:
1. For Common Stock issued:
Debit cash for $787,500
Credit Common Stock for $210,000
Credit Paid-In Capital in Excess of Par- Common Stock for $577,500
2. For Preferred Stock Issued:
Debit cash for $7,800
Credit Preferred Stock for $2,600
Credit Paid-In Capital in Excess of Par- Preffered Stock for $5,200
Explanation:
Note: See the attached excel file for how the journal entries will look exactly in the book.
Before journalizing the issuance, the following calculations are done first:
Cash received form common stock issued = 52,500 * $15 = $787,500
Common stock issued par value = 52,500 * $4 = $210,000
Paid-In Capital in Excess of Par- Common Stock = $787,500 - $210,000 = $577,500
Cash received form preferred stock issued = 2,600 * $3 = $7,800
Preferred stock issued par value = 2,600 * $1 = $2,600
Paid-In Capital in Excess of Par- Preferred Stock = $7,800 - $2,600 = $5,200
Estimating Share Value Using the DCF Model Following are forecasts of Whole Foods sales, net operating profit after tax (NOPAT), and net operating assets (NOA) as of September 25, 2016.
Reported Horizon Period
$ millions 2016 2017 2018 2019 2020 Terminal Period
Sales $15,724 $15,881 $16,199 $16,523 $16,853 $17,022
NOPAT 526 524 535 545 556 562
NOA 3,466 3,500 3,570 3,642 3,715 3,752
Answer the following requirements assuming a discount rate (WACC) of 6%, a terminal period growth rate of 1%, common shares outstanding of 318.3 million, and net nonoperating obligations (NNO) of $242 million.
(a) Estimate the value of a share of Whole Foods' common stock using the discounted cash flow (DCF) model as of September 25, 2016.
Rounding instructions:
Round answers to the nearest whole number unless noted otherwise. Use your rounded answers for subsequent calculations.
Do not use negative signs with any of your answers.
Reported Forecast Horizon
($ millions) 2016 2017 2018 2019 2020 Terminal Period
Increase in NOA Answer Answer Answer Answer Answer
FCFF (NOPAT - Increase in NOA) Answer Answer Answer Answer Answer
Discount factor [1 / (1 + rw)t ] (Round 5 decimal places) Answer Answer Answer Answer
Present value of horizon FCFF Answer Answer Answer Answer
CUMULATIVE present value of horizon FCFF $ Answer
Present value of terminal FCFF Answer
Total firm value Answer NNO Answer
Firm equity value $ Answer
Shares outstanding (millions) Answer (Round one decimal place)
Stock price per share $ Answer (Round two decimal places)
(b) Whole Foods stock closed at $30.96 on November 18, 2016, the date the 10-K was filed with the SEC. How does your valuation estimate compare with this closing price? What do you believe are some reasons for the difference?
A. Stock prices are a function of many factors. It is impossible to speculate on the reasons for the difference.
B. Our stock price estimate is only a few cents lower than the Whole Foods market price, indicating that we believe that Whole Foods stock is accurately priced. Our stock price estimate is lower than the Whole Foods market price, indicating that we believe that Whole Foods stock is overvalued.
C. Stock prices are a function of expected NOPAT and NOA, as well as the WACC discount rate. Our lower stock price estimate might be due to more optimistic forecasts or a lower discount rate compared to other investors' and analysts' model assumptions.
D. Our stock price estimate is lower than the Whole Foods market price, indicating that we believe that Whole Foods stock is undervalued. Stock prices are a function of expected NOPAT and NOA, as well as the WACC discount rate. Our lower stock price estimate might be due to more optimistic forecasts or a lower discount rate compared to other investors' and analysts' model assumptions.
Answers
Answer:
Check the explanation for the answer
Explanation:
The price been estimated is bit lower than trading price
The price of the stock is also bit lower with the cents than the whole Foods market price, this indicate that we agree that Whole Foods stock is fixed priced.
Further calculations are been done in the file attached using excel
Direct Materials Variances The following data relate to the direct materials cost for the production of 10,000 automobile tires: Actual: 145,000 lbs. at $2.80 per lb. Standard: 150,000 lbs. at $2.75 per lb. a. Determine the direct materials price variance, direct materials quantity variance, and total direct materials cost variance. Enter a favorable variance as a negative number using a minus sign and an unfavorable variance as a positive number. Direct Materials Price Variance $ Direct Materials Quantity Variance $ Total Direct Materials Cost Variance $ b. The direct materials price variance should normally be reported to the . If lower amounts of direct materials had been used because of production efficiencies, the variance would be reported to the . If the favorable use of raw materials had been caused by the purchase of higher-quality raw materials, the variance should be reported to the .
Answers
Answer:
direct materials price variance = $7,250
direct materials quantity variance = - $13,750
total direct materials cost variance = - $6,500
The direct materials price variance should normally be reported to the Purchasing Manager.
Variance in direct materials used would be reported to the Production Manager
The favorable variance caused by purchase of higher-quality raw materials would be reported to Purchasing Manager
Explanation:
direct materials price variance = (Aq × Ap) - (Aq × Sp)
= (145,000 × $2.80) - (145,000 × $2.75)
= $7,250 A
direct materials quantity variance = (Aq - Sp) - (Sq × Sp)
= (145,000 × $2.75) - (150,000 × $2.75)
= $13,750 F
total direct materials cost variance = direct materials price variance + direct materials quantity variance
= $7,250 A + $13,750 F
= $6,500 F
The direct materials price variance should normally be reported to the Purchasing Manager.
Variance in direct materials used would be reported to the Production Manager
The favorable variance caused by purchase of higher-quality raw materials would be reported to Purchasing Manager
Note
Variances are reported to responsible managers.
Vintage Audio Inc. manufactures audio speakers. Each speaker requires $127 per unit of direct materials. The speaker manufacturing assembly cell includes the following estimated costs for the period:
Speaker assembly cell, estimated costs:
Labor $45,050
Depreciation 6,040
Supplies 2,200
Power 1,655
Total cell costs for the period $54,945
The operating plan calls for 185 operating hours for the period. Each speaker requires 20 minutes of cell process time. The unit selling price for each speaker is $344. During the period, the following transactions occurred:
Purchased materials to produce 530 speaker units.
Applied conversion costs to production of 505 speaker units.
Completed and transferred 480 speaker units to finished goods.
Sold 460 speaker units.
There were no inventories at the beginning of the period.
a. Journalize the summary transactions (1)-(4) for the period. Do not round interim calculations.
1.
2.
3.
4. Sale
4. Cost
b. Determine the ending balance of raw and in process inventory and finished goods inventory.
Raw and In Process Inventory, ending balance $
Finished Goods Inventory, ending balance $
Answers
Answer:
A.1.
Dr Raw and In Process Inventory 67,310
Cr Accounts Payable 67,310
2
Dr Raw and In Process Inventory 49,995
Cr Conversion cost 49,995
3
Dr Finished goods inventory 108,480
Cr Raw and In Process Inventory 108,480
4a
Dr Accounts receivables 158,240
Cr Sales 158,240
4b
Dr Cost of goods sold 103,960
Cr Finished goods inventory 103,960
b.
Raw and In Process Inventory, ending balance
=$3,540
Finished Goods Inventory, ending balance
= $4520
Explanation:
Solution a:
Budgeted conversion cost per unit =
$54,945 / 185 *20/60
=$297*20/60
= $99 per unit
Vintage Audio Inc. Journal Entries
1.
Dr Raw and In Process Inventory 67,310
Cr Accounts Payable 67,310
(530*$127)
2
Dr Raw and In Process Inventory 49,995
Cr Conversion cost 49,995
(505*$99)
3
Dr Finished goods inventory 108,480
(480*$226)
Cr Raw and In Process Inventory 108,480
4a
Dr Accounts receivables 158,240
(460*$344)
Cr Sales 158,240
4b
Dr Cost of goods sold 103,960
(460*$226)
Cr Finished goods inventory 103,960
b.
Raw and In Process Inventory, ending balance =$54,945+$49,995-$108,480
=$3,540
Finished Goods Inventory, ending balance
$108,480-103,960
= $4520
Arkansas Corp. is preparing its statement of cash flows using the indirect method. It provides the following information about transactions for the year: Plant assets, netlong dashbeginning balance: $ 110 comma 000 Plant assets, netlong dashending balance: $ 145 comma 000 Equipment was purchased for $ 65 comma 000 with cash. Equipment with a net asset value of $12,000 was sold for $ 17 comma 000. Depreciation Expense of $ 17 comma 000 was recorded during the year. What was the amount of net cash provided by (used for) investing activities?
Answers
Answer:
($48,000)
Explanation:
The computation of net cash provided by investing activities is shown below:-
Cash flow from investing activities
Purchase of Equipment ($65,000)
Sale of Existing Equipment $17,000
Net Cash from Investing activities ($48,000)
As the investing activities recorded those cash transactions which are related to the purchase and sale of long term assets. The purchased is cash outflow as cash is gone so it would be shown in a negative sign while the sale is cash inflow as cash is come so it would be shown in a positive sign
Indicate how each of the following would shift the (1) marginal-cost curve, (2) average-variable-cost curve, (3) average-fixed-cost curve, and (4) average-total-cost curve of a manufacturing firm. In each case specify the direction of the shift.
a. A reduction in business property taxes.b. An increase in the nominal wages of production workers.c. A decrease in the price of electricity.d. An increase in insurance rates on plant and equipment.e. An increase in transportation costs.
Answers
Answer:
a. A reduction in business property taxes: MC-No change; AVC-No change; AFC-Shift down; ATC-Shift down. (Fixed cost)
b. An increase in the nominal wages of production workers: MC-Shift up; AVC-Shift up; AFC-No change; ATC- Shift up. (Variable cost)
c. A decrease in the price of electricity: MC-Shift down; AVC-Shift down; AFC-No change; ATC-Shift down. (Variable cost)
d. An increase in insurance rates on plant and equipment: MC-No change; AVC-No change; AFC-Shift up; ATC-Shift up. (Fixed cost)
e. An increase in transportation costs: MC-Shift up; AVC-Shift up; AFC-No change; ATC-Shift up. (Variable cost)
Explanation:
Where;
MC is the Marginal Cost.
AVC is the Average Variable Cost.
AFC is the Average Fixed Cost.
ATC is the Average Total Cost.
1. Marginal Cost (MC) can be defined as the cost incurred in the production of one unit of a product.
2. Average Variable Cost (AVC) can be defined as the total variable cost per unit of production. It is calculated by dividing total variable cost (TVC) by total output of production (Q);
AVC = \frac{TVC}{Q}
3. Average Fixed Cost can be defined as the fixed cost per unit of production. It is calculated by dividing fixed cost (FC) by total output of production (Q);
AFC = \frac{FC}{Q}
4. Average Total Cost (ATC) can be defined as the overall cost of production divided by total output of production. It is calculated by dividing total cost by total output of production or by adding TVC and TFC.
[tex]ATC = TVC + TFC[/tex]
Northwest Fur Co. started the year with $92,000 of merchandise inventory on hand. During the year, $425,000 in merchandise was purchased on account with credit terms of 1/15, n/45. All discounts were taken. Northwest paid freight-in charges of $7,000. Merchandise with an invoice amount of $5,000 was returned for credit. Cost of goods sold for the year was $372,000. What is ending inventory
Answers
Answer:
$ 142,800.00
Explanation:
The ending inventory can be computed by rearranging the cost of goods sold formula:
cost of goods sold=Beginning inventory+net purchases-ending inventory
ending inventory=beginning inventory+net purchases-cost of goods sold
beginning inventory is $92,000
Net purchases=purchases-discount+freight-in charges-purchase return
net purchases=$425,000-($425,000*1%)+$7000-($5000*99%)=$422,800.00
cost of goods sold is $372,000
ending inventory=$92,000+$422,800-$372,000=$ 142,800.00
Andy and Kim live together. Andy may invest $14 comma 000 (possibly by taking on an extra job to earn the additional money) in Kim's education this year. This investment will raise Kim's future earnings by $20 comma 000 (in present valueLOADING... terms). If they stay together, they will share the benefit from the additional earnings. However, the probability is 20% that they will split up in the future. If they were married (or in a civil union) and then split, Andy would get half of Kim's additional earnings. If they were living together without any legal ties and they split, then Andy would get nothing. Suppose that Andy is risk neutral. Will Andy invest in Kim's education? Does your answer depend on the couple's legal status? A. Andy will invest in Kim's education only if they have legal ties. B. Andy will not invest in Kim's education regardless of legal ties. C. Andy will invest in Kim's education regardless of legal ties. D. Andy will invest in Kim's education only if they do not have legal ties. E. Andy will be indifferent about investing in Kim's education regardless of legal ties.
Answers
Answer:
Will Andy invest in Kim's education?
Yes, he should. The expected benefits from investing in Kim's education are higher than the costs regardless of their legal status.Does your answer depend on the couple's legal status?
C. Andy will invest in Kim's education regardless of legal ties.Explanation:
if Andy and Kim are not married:
initial investment $14,000
expected benefits $20,000 x (1 - 20%) = $16,000
expected gain = $16,000 - $14,000 = $2,000
If Andy and Kim are married:
expected benefits [$20,000 x (1 - 20%)] + ($20,000 x 20% x 1/2) = $16,000 + $2,000 = $18,000
expected gain = $18,000 - $14,000 = $4,000
The risk-free rate is 7%. The expected market rate of return is 15%. If you expect a stock with a beta of 1.3 to offer a rate of return of 12%, you should Group of answer choices sell the stock short because it is underpriced. buy the stock because it is underpriced. sell short the stock because it is overpriced. None of the options, as the stock is fairly priced. buy the stock because it is overpriced.
Answers
Answer: Sell short the stock because it is overpriced.
Explanation:
To find out if the stock is overpriced or underpriced, you would need to check to see if the Expected return is indeed 12%.
With the given variables you can do this with the Capital Asset Pricing Model.
The formula is,
Er = Rf + b(Rm + Rf)
Where,
Er is the expected return
Rf is the Risk free rate
b is the Beta
Rm is the Market Rate
Inserting the figures,
= 7% + 1.3(15% - 7%)
= 17.4%
The stock should have an expected return of 17.4% but only has an expected return of 12%. It is underperforming and is therefore OVERPRICED. To benefit from this you should sell the stock short so that when the market prices adjust you can make a profit.
The Polishing Department of Major Company has the following production and manufacturing cost data for September. Materials are entered at the beginning of the process. Production: Beginning inventory 1,600 units that are 100% complete as to materials and 30% complete as to conversion costs; units started during the period are 42,900; ending inventory of 5,000 units 10% complete as to conversion costs. Manufacturing costs: Beginning inventory costs, comprised of $20,000 of materials and $43,180 of conversion costs; materials costs added in Polishing during the month, $175,800; labor and overhead applied in Polishing during the month, $125,680 and $257,140, respectively. Instructions:a. compute the equivalent units of production for materials and conversion costs for the month of septemberb. compute the unit costs for materials and conversion costs for the month.c. determine the costs to be assigne to the units transfered out in the process.
Answers
Answer:
a. compute the equivalent units of production for materials and conversion costs
materials = 44,500
conversion costs = 40,000
b. compute the unit costs for materials and conversion costs for the month
materials = $4.40
conversion = $10.65
c. determine the costs to be assign to the units transferred out in the process
Cost of units transferred out in the process = $594,475
Explanation:
a. compute the equivalent units of production for materials and conversion costs
materials
Units Completed and Transferred to Finished Goods (100%×39,500) =39,500
Units in Closing Work In Process (100%×5,000) = 5,000
Total = 44,500
conversion costs
Units Completed and Transferred to Finished Goods (100%×39,500) =39,500
Units in Closing Work In Process (10%×5,000) =
500
Total = 40,000
Calculation of Units Completed and Transferred to Finished Goods
1,600+42,900-5,000 = 39,000
b. compute the unit costs for materials and conversion costs for the month
materials
Opening Work In Process Costs = $20,000
Add Costs Incurred during the Period = $175,800
Total = $195,800
Unit costs for materials = Total Costs / Equivalent units of production for materials
= $195,800 / 44,500
= $4.40
conversion
Opening Work In Process Costs = $43,180
Add Costs Incurred during the Period($125,680 + $257,140) = $382,820
Total = $426,000
Unit costs for conversion = Total Costs / Equivalent units of production for conversion
= $426,000 / 40,000
= $10.65
c. determine the costs to be assign to the units transferred out in the process
Total Unit Cost Calculation
Materials = $4.40
Conversion = $10.65
Total = $15.05
Cost of units transferred out in the process = 39,500 × $15.05
= $594,475
Which of the following is used to improve real-time collaboration within an organization? Internal social networks Machine learning Neural networks Networks running from a fixed location Computer vision
Answers
Answer:
Internal social networks
Explanation:
In simple words, real time collaboration refers to the phenomenon under which an organisation prepares a setup using software as well as virtual technologies so that multiple employees can work together in a single subject a at a very same point of time.
For doing this, organisations generally use internal social networks so that the information remained intact and safe and all the employed individuals can interact with each other effectively.
Presented below are data for Cullumber Company
2020 2021
Assets, January 1 $4220 $5100
Liabilities, January 1 2570 ?
Stockholders' Equity, Jan. 1 ? ?
Dividends 864 634
Common Stock 761 661
Stockholders' Equity, Dec. 31 ? ?
Net Income 855 669
Stockholders' Equity at January 1, 2020 is:_______.
a) $243 loss.
b) $726 income.
c) $180 income.
d) $726 loss.
Answers
Answer:
$1,650.
Note: The correct asnwer is $1,650 based on the information provided in the question but it is not included in the option. Kindly confirm this from your teacher.
Explanation:
Stockholders' Equity at January 1, 2020 can be obtained using the accounting equation stated as follows:
Assets = Stockholders' Equity + Liabilities
Since on January 1, 2020, we have:
Assets = $4,220
Stockholders' Equity = ?
Liabilities = $2,570
Substituting the values into the accounting equation above, we have:
$4,220 = Stockholders' Equity + $2,570
Rearranging, we have:
Stockholders' Equity = $4,220 - $2,570 = $1,650
Therefore, Stockholders' Equity at January 1, 2020 is $1,650.
