Answer:
BLOSSOM HOTEL
Trial Balance
May 31, 2022
Debit Credit
Cash $2,513
Supplies $2,600
Prepaid Insurance $1,800
Land $15,013
Buildings $67,600
Equipment $16,800
Accounts Payable $4,713
Unearned Rent Revenue $3,300
Mortgage Payable $33,600
Common Stock $60,013
Retained earnings $4,700
$106,326 $106,326
Rent Revenue $9,000
Salaries and Wages Expense $3,000
Utilities Expense $800
Advertising Expense $500
net income $4,700
adjusting entries:
Dr Insurance expense 450
Cr Prepaid insurance 450
Dr Supplies expense 1,530
Cr Supplies 1,530
Dr Depreciation expense 4,920
Cr Accumulated depreciation building 2,760
Cr Accumulated depreciation equipment 2,160
Dr Interest expense 140
Cr Interest payable 140
Dr Unearned revenue 2,620
Cr Rent revenue 2,620
Dr Wages expense 720
Cr Wages payable 720
BLOSSOM HOTEL
Income Statement
May 31, 2022
Rent Revenue $11,620
Salaries and Wages Expense $3,720
Utilities Expense $800
Supplies expense $1,530
Depreciation expense $4,920
Advertising Expense $500
Insurance expense $450
Interest expense $140
net loss -$440
BLOSSOM HOTEL
Balance Sheet
May 31, 2022
Debit Credit
Cash $2,513
Supplies $1,070
Prepaid Insurance $1,350
Land $15,013
Buildings $64,840
Equipment $14,640
Accounts Payable $4,713
Interest payable $140
Wages payable $720
Unearned Rent Revenue $680
Mortgage Payable $33,600
Common Stock $60,013
Retained earnings ($440)
$99,426 $99,426
The balanced-budget multiplier is a measure of the short-run change in aggregate output caused by equal changes in government purchases and taxes. Ignoring any supply-side or long-run effects, if the government simultaneously increases both taxes and government spending by $100 billion, what is the expected short-run impact on GDP? Group of answer choices GDP does not change. GDP increases by less than $100B. GDP decreases by less than $100B. GDP increases by $100B. GDP decreases by $100B.
Answer: GDP increases by $100B
Explanation:
The Balanced Budget Multiplier is used to.measure the effect of a simultaneous increase in Government Spending and Taxes on the Economy.
While Classical Theorists believed that they cancel each other out, Keynesian Economists went about proving that this was not the case.
They showed that an increase in Government Spending had a ripple effect that was not curtailed by increasing taxes.
What they found out was that, increasing Government Spending at the same rate as taxes led to a rise in National income that was the same as the amount that Government Spending increased by.
This means that an increase in Government Spending and tax of $100 billion will lead to an increase in Income of $100 billion as well which will be translated into the GDP.
Preparing a classified balance sheet for a merchandiser LO P4 Adams Co. reports the following balance sheet accounts as of December 31. Salaries payable Buildings Prepaid rent Merchandise inventory Accounts payable Prepaid insurance Accounts receivable Common stock $ 6,400 Retained earnings 61,400 Notes payable (due in 9 years) 7,400 Office supplies 14,800 Land 14,000 Accumulated depreciation-Building 3,800 Mortgages payable (due in 5 years) 8,000 Cash 14,000 $ 54,000 38,000 2,800 30,000 5,800 20,000 24,000 Required: Prepare a classified balance sheet. (Amounts to be deducted should be indicated by a minus sign.
Answer:
Assets
Current Assets
Cash $24,000
Accounts Receivable $8,000
Merchandise inventory $14,800
Office Supplies $2,800
Prepaid Rent $7,400
Prepaid Insurance $3,800
Total Current Assets: $60,800
Property, Plant and Equipment
Buildings $61,400
Land $30,000
Accumulated Depreciation (5,800)
Total PP&E: $85,600
Total Assets: $146,400
Liabilities
Current Liabilities
Salaries Payable $6,400
Accounts payable $14,000
Total Current Liabilities: $20,400
Long-Term Liabilities
Notes Payable (due in 9 years) $38,000
Mortgages Payable $20,000
Total Long-Term Liabilities: $58,000
Total Liabilities: $78,400
Stockholders' Equity
Common Stock $14,000
Retained Earnings $54,000
Total Stockholders' Equity: $68,000
Total Liabilities + Stockholders' Equity: $146,400
Sales of Granite City Products Inc. have been on a steady decline for the last 12 months. A market research study conducted revealed that the product of Granite City Products Inc. can be sold only for $420 as opposed to the current market price charged of $520 per unit. Granite City Products Inc. has decided to revise its sales price to $420. The annual sales target volume of the product after price revision is 280 units. Granite City Products Inc. wants to earn 30% on its sales amount. What is the target operating income?
Answer:
$35,280
Explanation:
For computation of the target operating income first we need to find out the profit per unit which is shown below:-
Profit per unit = Sales Price × Sales percentage
= $420 × 30%
= $126
Target Operating Income = Profit per unit × Annual Sales Target
= $126 × 280 units
= $35,280
Therefore for computing the target operating income we simply applied the above formula.
Each of the following are classified as a noncash investing or financing activity except:
a. retirement of debt by issuing stock
b. reissuing treasury stock
c. purchase of long-term assets by issuing bonds
d. purchase of noncash assets by issuing equity
Answer: b. reissuing treasury stock
Explanation:
Investing Activities in the Cashflow Statement refer to transactions that have to do with the buying and selling of Capital Goods such as Fixed Assets. It also refers to investments in other company bonds and stock.
Financing has to do with how the firm finances it's operations. These include long term debt and stock related transactions.
When these transactions are non-cash, it means quite rightly that no cash was exchanged and instead something else for exchanged instead of cash. For example, A non-cash Investing and Financing activity would be the purchase of long-term assets by issuing bonds.
In this question, option B being the reissuance of Treasury Stock is not a non-cash transaction. Treasury Stock is the company's own stock that it required from the market. By reissuing it, they will be doing so with cash involved. That is, people will buy the reissued shares and pay cash for them thus making it a Cash Financing Activity.
Suppose that each day, northern, central and southern California each use 100 billion gallons of water. Also assume that northern California and central California have available 120 billion gallons of water, while southern California has 40 billion gallons of water available. The cost of shipping one billion gallons of water between the three regions is as follows:
Northern Central Southern
Northern $5,000 $7,000 $10,000
Central $7,000 $5,000 $6,000
Southern $10,000 $6,000 $5,000
We will not be able to meet all demand for water, so we assume that each billion gallons of unmet demand incurs the following shortage costs:
Northern Central Southern
Storage cost/billion $6,000 $5,000 $9,000
gallon short
How should California’s water be distributed to minimize the sum of shipping and shortage costs?
Answer:
Presenta Don Quijote de la Mancha: autor,
fechas, tema, personajes.
2. Relata las diferentes etapas de la historia
de don Quijote de la Mancha.
3. Elige un adjetivo para calificar a don Quijote
y a Sancho Panza y justifica: aventurero,
razonable, loco, heroico, te
Explanation:
Presenta Don Quijote de la Mancha: autor,
fechas, tema, personajes.
2. Relata las diferentes etapas de la historia
de don Quijote de la Mancha.
3. Elige un adjetivo para calificar a don Quijote
y a Sancho Panza y justifica: aventurero,
razonable, loco, heroico, te
The UCLA transportation economist Donald Shoup developed a formula to explain the rational maximum cruising time for parking. Calculate the cruising time elasticity (i.e., the point elasticity using calculus) with respect to the price (p). At a price of p=5 and m=12, what is the elasticity of c with respected to p? At this point, how will a 1% increase in p alter the maximum cruising time? Refer to the elasticity you calculated.
Answer:
The above elasticity suggests that by raising the curb parking price by 10% reduces the time drive are willing to cruise by only 7.1%. also the increase of curb pricing would make elasticity greater that shows that curb park pricing by 1% reduces the drivers that are willing to cruise by only 2.3 %
Explanation:
Solution
Given that:
Now, when we look at the papers designed by the economists for the various formulas of calculating elasticity related to six factors examples like, the price of off street parking, the price of fuel, the number of person or individuals in a car, the price of curb parking, time value, we would notice that the formula for calculating cruising time elasticity with that of curb parking price is stated below:
E = - p/(m-p)
E = -5/12-5
E = -5/7
=-0.714
The above elasticity states that by raising the curb parking price by 10% reduces the time drive are willing to cruise by only 7.1%
Now,
The new elasticity = -7/(10-7)
=-7/3
=-2.33 or 2.33%
It suggests that the increase of curb pricing would make elasticity greater that shows that curb park pricing by 1% reduces the drivers that are willing to cruise by only 2.3 %
The assets and liabilities of Thompson Computer Services at March 31, the end of the current year, and its revenue and expenses for the year are listed below. The common stock was $120,000 and the retained earnings were $60,000 at April 1, the beginning of the current year. During the year, shareholders purchased an additional $25,000 in stock. Accounts payable $2,000 Miscellaneous expense $1,030 Accounts receivable 10,340 Office expense 1,240 Cash 21,420 Supplies 1,670 Fees earned 73,450 Wages expense 23,550 Land 47,000 Dividends 16,570 Building 157,630 Prepare a statement of stockholders' equity for the current year ended March 31. If a net loss is incurred or there is a decrease in stockholders' equity, enter that amount as a negative number using a minus sign. If an amount box does not require an entry, leave it blank. Thompson Computer Services Statement of Stockholders’ Equity For the Year Ended March 31 Common Stock Retained Earnings Total $ $ $ $ $ $
Answer:
$236,060
Explanation:
Thompson Computer Services Statement of stockholder's equity for the year ended March 31
Beginning common stock $120,000
Add:
Additional stock purchased $25,000
Retained earnings $60,000
Net income $47,630
Less: Dividends $16,570
Ending retained earnings $91,060
(60,000+47,630-16,570)
Ending stockholder's equity $236,060
(120,000+91,060+25,000)
Calculation of Thompson Computer Services Net income
Fees earned 73,450
Less:Miscellaneous expense $1,030
Office expense 1,240
Wages expense 23,550
Balance 47,630
Wildhorse Corporation has retained earnings of $677,000 at January 1, 2020. Net income during 2020 was $1,510,000, and cash dividends declared and paid during 2020 totaled $82,000. In addition, an error was discovered: land costing $87,000 (net of tax) was charged to maintenance and repairs expense in 2019. Determine the ending retained earnings balance for the year ended December 31, 2020.
Answer:
$2,192,000
Explanation:
Adjusted January 1, 2020 retained earning = January 1, 2020 retained earning + Error (Land cost) = $677,000 + $87,000 = $764,000
Retained earning for 2020 = Net income during 2020 - Dividends declared and paid during 2020 = $1,510,000 - $82,000 = $1,428,000
December 31, 2020 retained earnings = Adjusted January 1, 2020 retained earning + Retained earning for 2020 = $764,000 + $1,428,000 = $2,192,000.
Therefore, the ending retained earnings balance for the year ended December 31, 2020 is $2,192,000.
A cash-flow budget uses the same format as a cash-flow statement. It is prepared on a monthly basis and it reflects budgeted income and expenses. In addition to the cash-flow statement, Scott and Mary made a list of budget assumptions, listed for you here:
1. scott's income will increase by 5%, effective January 1 His bonus is generally 10% of his income in the previous year, and he recerves it in January.
2. Mary's raise will be 3%, effective January 1.
3. Interest and dividend income will conservatively be the same in 2017 as it was in 2016 and will be received on a monthly basis.
4. Mortgage payments will be the same in 2017 as they were in 2016.
5. Federal income taxes are estimated at 20%, state income taxes at 6%, and social security taxes at 7.65% of wages, including Scotts bonus.
6. Property insurance and property taxes are paid every six months, in June and December. The amount is expected to be the same in 2017 as it was in 2016.
7. Mary will contribute $60 per week for the employee portion of their medical insurance. According to her pay schedule, April and June are five-week months. Auto insurance is paid at the end of each calendar quarter and should not be more than it was in 2016.
8. Scott and Mary would like to purchase a new car in the next few years and will put $500 a month away specifically for that purpose.
9 Scott and Mary don't expect the amount of variable expenses to change in 2017 except that they would like to double their charitable contributions and go on a vacation to Ireland in June. The vacation will cost $6,000.
10. Gift purchases are made mostly around the holidays, so Scott and Mary are planning to pay half of the gift expense in December and half in January when the credit card bill comes in.
11. Water and sewer is billed quarterly, in January, April, July, and october. The cost of heat should be spread over six months from November to April.
12. All other variable expenses can be spread evenly every month at 2016 amounts. Use the information from their cash-flow statement (listed in the first column of the following annual budget) and their budget assumptions to fill in the missing amounts for the first six months of Scott and Mary's monthly budget for 2017.
Cash Flow Statement 2017
2016 Jan. Feb Mar Apr May June.\
Answer:
Surplus/Deficit
2016 27920
January 4980.20
February 2265.55
March 2090.55
April 2005.55
May 2473.89
June-9061.11
Explanation:
Annual Budget
Scott and Mary Cash-Flow Statement
2017
2016 Jan. Feb. Mar. Apr. May June
Income
Deon'
Scott s salary 59,000 5162.5 5162.5 5162.5 5162.5 5162.5 5162.5
(59000/12*1.05)
Marys salary 53,1004557.75 4557.75 4557.75 4557.75 4557.75 4557.75
(53100/12*1.03)
Scott bonus 2016 5000 Jan 5900
Interest & Dividends 150 12.5 12.5 12.5 12.5 12.5 12.5
(150/12)
1.
Total Income 117250 15632.75 9732.75 9732.75 9732.75 9732.75 9732.75
Expenditures
Fixed expenses
Mortgage 14976 1248 1248 1248 1248 1248 1248
(14976/12)
Sott's Federal Income Tax 12800 2212.5 1032.5 1032.5 1032.5 1032.5 1032.5 [(salary+Bonus)*20%]
Scott's State Income Tax 3840 663.75 309.75 309.75 309.75 309.75 309.75 [(salary+Bonus)*6%]
Scott's Social Security Taxes4896 846.28 394.93 394.93 394.93 394.93 394.93
[(salary+Bonus)*7.65%]
Mary's Federal Income Tax 10620 911.55 911.55 911.55 911.55 911.55 911.55 (Salary*20%)
Mary's State Income Tax 3186 273.47 273.47 273.47 273.47 273.47 273.47 (Salary 6%)
Mary's Social Security Taxes 4062 348.67 348.67 348.67 348.67 348.67 348.67 (Salary*7.65%)
Property Taxes
2016 4100 June 4100
Property Insurance
2016 1200 June 1200
Medical Insurance 2400 240 240 240 300 240 300
Automobile Insurance and Registration
2016 700 May 175 June 175 (700/4)
Savings for auto purchase June500 500 500 500 500 500
2.
Total Fixed expenses 62780 7244.21 5258.86 5433.86 5318.86 5258.86 10793.86
Variable expenses
Food 1620 135 135 135 135 135 135 (1620/12)
Entertainment 3000 250 250 250 250 250 250 (3000/12)
Dining out 4700 391.67 391.67 391.67 391.67 391.67 391.67 (4700/12)
Electric 350 29.17 29.17 29.17 29.17 29.17 29.17
(350/12)
Water and sewer 2016 800 Jan 200.00 April 200.00 (800/4)
Heat 1250 208.33 208.33 208.33 208.33 - - (1250/6)
Cable TV 3000 250.00 250.00 250.00 250.00 250.00 250.00 (3000/12)
Telephone 600 50.00 50.00 50.00 50.00 50.00 50.00
(600/12)
Cell phone 900 75.00 75.00 75.00 75.00 75.00 75.00
(900/12)
Gifts 2016 2000 Jan 1000.00 (2000/2)
Personal care 600 50.00 50.00 50.00 50.00 50.00 50.00 (600/12)
Medical expenses 3700 308.33 308.33 308.33 308.33 308.33 308.33 (3700/12)
Vehicle gas and maintenance 2530 210.83 210.83 210.83 210.83 210.83 210.83 (2530/12)
Charitable contributions 1500 250 250 250 250 250 250
(3000/12)
Vacation June 6000
3.
Total Variable expenses 26550 3408.333 2208.33 2208.33 2408.33 2000 8000
4.Total expenses
(Addition of solution 2+ solution 3)
89330 10652.55 7467.2 7642.2 7727.2 7258.86 18793.86
5.SURPLUS/(DEFICIT)
(Solution1 Total Income-Solution 4 Total Expenses)
27920 4980.20 2265.55 2090.55 2005.55 2473.89 -9061.11
KYG Instruments, a firm that produces manufacturing equipment for various industries, experiences an influx of new sales employees due to a recent expansion. Despite possessing a vast amount of sales experience, most of the new employees perform poorly. This is because the new recruits possess inadequate technical knowledge about the products sold by KYG. To address the issue, the HR department is considering implementing a training program. As part of the process, the HR department's first step should be to:
Answer:
Identify what the sales representatives will need to learn.
Explanation:
Before the laying out the plan of training the most important thing is that the HR department has to analyze and identify what are the skills that they must develop through the training program which will be as per the requirement of the firm. So in the KYG training program, the first step is to identify analyze the skill sets required for the sales representatives that would be taught them.
Baruk Industries has no cash and a debt obligation of $36 million that is now due. The market value of Baruk's assets is $ 81$81 million, and the firm has no other liabilities. Assume perfect capital markets. a. Suppose Baruk has 1010 million shares outstanding. What is Baruk's current share price? b. How many new shares must Baruk issue to raise the capital needed to pay its debt obligation? c. After repaying the debt, what will Baruk's share price be?
Answer and Explanation:
The given values are:
Debt obligation
= $36 million
Market value
= $81 million
Outstanding shares
= $10 million
(a)...
Net Assets of the firm will be:
= [tex]81 - 36[/tex]
= $[tex]45 \ million[/tex]
Now, the current share price will be:
= [tex]\frac{45}{10}[/tex] = $[tex]4.5 \ per \ share[/tex]
(b)...
Number of shares to be issued to repay debt obligation will be:
= [tex]\frac{36}{4.5}[/tex] = $[tex]8 \ million \ shares[/tex]
(c)...
The total number of outstanding shares will be:
= [tex]10+8[/tex]
= $[tex]18 \ million[/tex]
Now,
The Current share price will be:
= [tex]\frac{Net \ assets \ of \ the \ firm}{Total \ no \ of \ outstanding \ shares}[/tex]
= [tex]\frac{81}{18}[/tex]
= $[tex]4.5 \ per \ share[/tex]
Three different companies each purchased trucks on January 1, 2018, for $62,000. Each truck was expected to last four years or 250,000 miles. Salvage value was estimated to be $2,000. All three trucks were driven 80,000 miles in 2018, 55,000 miles in 2019, 51,000 miles in 2020, and 70,000 miles in 2021. Each of the three companies earned $53,000 of cash revenue during each of the four years. Company A uses straight-line depreciation, company B uses double-declining-balance depreciation, and company C uses units-of-production depreciation. Answer each of the following questions. Ignore the effects of income taxes.
Calculate the net income for 2021? (Round "Per Unit Cost" to 3 decimal places.)
Answer:
Net Income Calculation for 2021
Company A Company B Company C
Revenue $53,000 $53,000 $53,000
Less Depreciation Expense ($15,000) ($0.00) ($16,800)
Net Income / (Loss) $38,000 $53,000 $36,200
Explanation:
Company A
Depreciation Expense (Straight line) : (Cost - Salvage Value) / Number of Useful Life
2021 = ($62,000-$2,000) / 4
= $15,000
Company B
Depreciation Expense (Double Declining Balance) : 2 × SLDP × BVSLD
SLDP = 100/ 4
= 25%
2018 = 2 × 25% × $62,000
= $ 31,000
2019 = 2 × 25% × ($62,000 - $ 31,000)
= $ 15,500
2020 = 2 × 25% × ($62,000 - $ 31,000 - $ 15,500 )
= $ 7,750
2021 = 2 × 25% × ($62,000 - $ 31,000 - $ 15,500 - $ 7,750 )
= 0
In 2021 depreciation will only be allowed where:
Book Value = Salvage Value
Test to see if Book Value has fallen below Salvage Value :
Cost $62,000
Less Accumulated depreciation $54,250
Book Value $ 7,750
Company C
Depreciation Expense (units-of-production) : (Cost - Salvage Value) × Period`s Production / Total Expected Production
2021 = ($62,000-$2,000) × 70,000/ 250,000
= $16,800
Net Income Calculation for 2021
Company A Company B Company C
Revenue $53,000 $53,000 $53,000
Less Depreciation Expense ($15,000) ($0.00) ($16,800)
Net Income / (Loss) $38,000 $53,000 $36,200
Durable Plastics Company had the following total assets, liabilities, and equity as of December 31.Total Assets$ 450 comma 000Total Liabilities131 comma 000Total Equity319 comma 000What is the company's debt ratio as of December 31? (Round your percentage answer to two decimal places.)
Answer: Debt ratio = 29.11%
Explanation:
A company's Debt ratio explains the financial leverage of a company to paying off its liabilities using its assets by measuring a company's total liabilities as a percentage of its total assets.
Given ,
Total Assets $ 450,000
Total Liabilities $131, 000
Total Equity $319,000
Debt ratio = Total Liabilites /total asset x 100
=131000/450000 X 100
= 29.11%
On June 30, Setzer Corporation had a market price of $14 per share of common stock. For the previous year, Setzer paid an annual dividend of $0.98. Compute the dividend yield for Lucas Corporation. %
Answer:
Dividend Yield = 7%
Explanation:
The dividend yield is the proportion of the market price that is earned as dividend. The higher the dividend yield the better for the investor.
The dividend yield is calculated as follows:
Dividend yield = Dividend paid /market price per share × 100
= 0.98/14×100 =7 %
Dividend Yield = 7%
The monthly salaries for December and the year-to-date earnings of the employees of Bush Consulting Company as of November 30 follow. Determine the amount of social security tax to be withheld from each employee’s gross pay for December. Assume a 6.2 percent social security tax rate and an earnings base of $122,700 for the calendar year. (Round your final answers to 2 decimal places.)
Answer:
The social security tax rate for the employees is show below
Thus, for the employee 3 = 10709 + 117799 = 128, 508 which is above the base
Explanation:
Solution
Given that:
Employee: 1 2 3 4
December Salary : $9900 $10,000 $10709 $10,000
Year of date earnings
Through November 30: $99,000 $70,000 $117799 $100000
Social sec taxable
Earnings December: 9900 10,000 4901 10,000
Social security tax 6.2%: 613.80 620 304 620
Now,
For the employee 3 = 10709 + 117799 = 128, 508 which is above the base
Thus,
$128,508 - $122, 700
=5808 ( this earning is not taxable)
Hence, 10709 -5808 = 4901 (this is a taxable earning).
Last year, Goran had $30,000 to invest. He invested some of it in an account that paid 7% simple interest per year, and he invested the rest in an account that paid 10% simple interest per year. After one year, he received a total of $2460 in interest. How much did he invest in each account?
Answer:
He invested $18,000 in the first account
he invested $12,000 in the second account
Explanation:
Let x represent the account that pays 7% simple interest
Let y represent the account that pays 10% simple interest
The sum of x and y gives a total investment of $30,000
x+y=30000..........1
From interest perspective , we have the below equation as well:
0.07x+0.10y=2460........2
From equation 1
x=30,000-y
substitute for x in equation 2
0.07(30,000-y)+0.10y=2460
2100-0.07y+0.10y=2460
0.03y=2460-2100
0.03y=360
y=360/0.03
y=$12,000
substitute for y in equation 1
x+12,000=30,000
x=30,000-12,000=$18,000
Carlin and Marley, an accounting firm, provides consulting and tax planningservices. For many years, the firm's total administrative cost (currently$270,000) has been allocated to services on this basis of billable hours toclients. A recent analysis found that 55% of the firm's billable hours to clientsresulted from tax planning services, while 45% resulted from consultingservices.The firm, contemplating a change to activity-based costing, has identifiedthree components of administrative cost, as follows:
Staff Support $200,000
In-house computingcharges 50,000
Miscellaneous officecosts 20,000
Total $270,000
A recent analysis of staff support found a strong correlation with the numberof clients served. In contrast, in-house computing and miscellaneous officecost varied directly with the number of computer hours logged and number ofclient transactions, respectively. Consulting clients served totaled 35% of thetotal client base, consumed 30% of the firm's computer hours, and accountedfor 20% of the total client transactions.
Answer:
The amount of administrative cost chargeable to tax planning services would decrease by $32,500
Note: Kindly find an attached copy of the complete question below
Explanation:
Solution
Given that:
In this example, the total cost of administrative charged to tax planning services is given as =$270,000 * 55%
=$148,000
Now,
The activity based cost system is shown below:
Cost Amount Cost driver Consulting Tax planning
Staff support 200,000 No of clients served 35% 65%
In house com-
puting charges 50,000 Computers hrs logged 30% 70%
Misc office
Cost 20,000 No of clients
Transaction 20% 80%
Total $270,000
Thus,
Activity Workings Allocated to tax planning services
Staff support 200,000 * 65% 130,000
In house Comp-
uting Charges 50,000 * 70% 35,000
Misc office costs 20,000 * 80% 16,000
The total cost
allocated $181,000
So, the change in amount allocated to tax planning services under this system is = $181,000-$148,500
= $32,500
A company currently makes a component used in production. The per unit costs incurred to make the component include: Direct materials: $5; Direct labor: $2; Overhead: $4; Total cost: $11. Twenty-five percent of the overhead costs are considered incremental. The company can purchase the component from another source for $10. The company should do which of the following?
A. The company should not make the components because incremental costs are $2 less than the purchase price.
B. The company should make the components because incremental costs are $2 less than the purchase price.
C. None of above
Answer:
The company should make the components because incremental costs are $2 less than the purchase price.
Explanation:
To solve this we would have to calculate the cost of making each unit of the component.
= Direct Labour + Direct Material + Overhead*
25% of Overhead is said to be Incremental. Overhead is 4. This means that 25% of 4 is the Marginal Cost of production. i.e, the cost per unit.
= 25% * 4
= (25/100) x 4
= 1
We would charge $1 per unit to overhead costs.
Therefore, the cost of making each unit of component
= $5 + $2 + $1 = $8
Since the cost of purchasing each unit of component is $10. Then the company has to produce the component because it is less with a difference of $2.
$10 - $8 = $2
A mortgage note payable with a fixed interest rate requires the borrower to make installment payments over the term of the loan. Each installment payment includes interest on the unpaid balance of the loan and a payment on the principal. With each installment payment, indicate the effect on the portion allocated to interest expense and the portion allocated to principal.
Portion Allocated to Interest Expense Portion Allocated to Payment of Principal
a. Decreases, Increases
b. Increases, Increases
c. Increases, Decreases
d. Decreases, Decreases
Answer: a. Decreases, Increases
Explanation:
With each installment paid, the interest expense goes down while the principal repayment goes up. This is because the amount of Principal reduces with every payment therefore the interest is charged on a lesser figure.
For example, assume $10,000 is to be paid per month on $100,000 mortgage with a 10% rate.
The first time the 10% is charged on $100,000 it will give $10,000 and since the payment is $10,000, all of it will be considered interest.
The second time the 10% is charged it will be charged on $90,000 (100,000 - first payment of $10,000) instead which will.mean interest payment is now only $9,000 (10% of $90,000). The difference of $1,000 ($10,000 payable every month and interest of $9,000) will be Principal repayment.
The third time around then, the amount left is $80,000. Interest payment will be $8,000 and Principal repayment becomes $2,000.
And so on and so forth.
Wit Company uses the weighted-average method in its process costing system. Information for the month of May concerning Department A, the first stage of the company's production process follows: Material costs are added at the beginning of the process. The ending work in process is 50% complete with respect to conversion costs. How would the costs be distributed? Goods completed and transferred out Ending work in proces
Answer:
Materials Conversion
Equivalent units of production
100,000 95,000
Cost per equivalent unit
$0.24 $0.20
Cost transferred out
$21,600 $18,000
Cost of ending work in process
$2,400 $1,000
Explanation:
Computation of how Wit Company costs will be distributed
Materials Conversion
Transferred to next department
90,000 90,000
Ending work in process:
10,000 5,000
The production Equivalent units
100,000 95,000
Materials Conversion
Begining Work in process
4,000 3,000
Cost added during the month
20,000 16,000
Total cost $24,000 $19,000
÷Equivalent units
100,000 95,000
Cost per equivalent unit
$0.24 $0.20
Materials Conversion
TotalUnits transferred out
90,000 90,000
×Cost per equivalent unit $0.24$0.20
= Cost transferred out
$21,600 $18,000 =$39,600
Materials Conversion
Equivalent units of production:
Ending work in process
10,000 5,000
×Cost per equivalent unit$0.24$0.20
Cost of ending work in process
$2,400 $1,000 =$3,400
Calculation for Ending work in progress
Materials 10,000 units × 100%complete
=10,000
Conversion
10,000 units × 50% complete
=5,000
Calculation for Cost per equivalent unit
Total cost
Material $24,000
Conversion $19,000
÷ Equivalent units
Material 100,000
Conversion 95,000
=
Material $0.24
Conversion $0.20
Nolan Company's cash account shows a $22,352 debit balance and its bank statement shows $21,332 on deposit at the close of business on June 30. Outstanding checks as of June 30 total $3,713. The June 30 bank statement lists $41 in bank service charges; the company has not yet recorded the cost of these services. In reviewing the bank statement, a $90 check written by the company was mistakenly recorded in the company’s books as $99. June 30 cash receipts of $4,724 were placed in the bank’s night depository after banking hours and were not recorded on the June 30 bank statement. The bank statement included a $23 credit for interest earned on the company’s cash in the bank. The company has not yet recorded interest earned. Prepare a bank reconciliation using the above information
Answer:
bank reconciliation:
bank statement balance $21,332
+ deposits in transit $4,724
- outstanding checks $3,713
reconciled bank account = $22,343
cash account balance reconciliation:
cash account balance $22,352
+ error in recording check $9
+ interests earned $23
- bank fees $41
reconciled cash account $22,343
Artville is deciding whether to purchase a new statue for the center of town. The statue will cost the city $17,000 and will only be purchased if the costs are covered. The city is asking for households to help cover the cost of the statue, but households are not forced to contribute. Instructions: Enter your answer as a whole number.
Required:
a. If households are asked to contribute $5 each to help cover the cost of the statue, how many households will need to contribute?
b. If the population of Artville is 4,000 households, of which 3,000 households are expected to free ride, will the city be able to afford the statue if it charges each household $14?
Answer:
a. 3,400 households
b. No
Explanation:
a. The computation of the number of families is shown below:-
Total Cost = No.of families contributing × Amount each family contributing
$17,000 = No of families × 5
Number of families = $17,000 ÷ 5
= 3,400 households
b. According to the question, it is mentioned that Artville 's population is 4,000 of which 3,000 households are expected to travel freely, which means that these 3,000 people will not pay for the statue and the entire burden of the statue 's cost will fall on the left amount 1,000.
Total cost = No of households contributing × Amount each household pays
= 1,000 × $14
= $14,000
We may conclude that we will not be able to buy this statue because the sum raised is only 14,000, although we need $17,000 to buy the statue. To this question, the answer is "No".
Determine which moral standard of social responsibility the business is observing.
Vivian’s company is considering building a huge new department store in a small town. The community argues that the store will disrupt local commerce and harm local business owners. Vivian argues that the store will save money for customers and bring more jobs to the community. Assume both arguments are true.
a. Stakeholder Theory Moral Standard
b. Profit-Maximizing Moral Standard
c. Indeterminable
d. Corporate Citizenship Moral Standard
e. Moral Minimum Standard
Answer:
The correct answer is the option A: Stakerholder theory moral standard
Explanation:
To begin with, the stakerholder theory states that there are a group of people whose interest must be taken as the major responsibility that the company must accomplish. This group comprehends the owners, the investors, the consumers, the suppliers, etc. Those are the stakeholders. Therefore that in the case where Viviana's company states that the store will save money, taking care of the interest of the consumers, and bring more jobs, taking care of the interest of the locals around the company is putting the interesent of the stakeholders first. And when the community argues that it will disrupt local commerce they states that the company is only focusing in the interest of the investors and owners. That is why, in both sides the stakerholders are benefited.
Answer:
Indeterminable
Explanation:
Q- Vivian's company is considering building a huge new department store in a small town. The community argues that the store will disrupt local commerce and harm local business owners. Vivian argues that the store will save money for customers and bring more jobs to the community. Assume both arguments are true. "
A- Indeterminable because assuming both arguments are true. We can not determine who is right because building a new department store creates job opportunities and saves money, but it also harms local business owners.
NOTE-But if Vivian's argument is true then it is stakeholder moral theory.
Select Indeterminable if both arguments are true assumed.
McCoy’s Fish House purchases a tract of land and an existing building for $820,000. The company plans to remove the old building and construct a new restaurant on the site. In addition to the purchase price, McCoy pays closing costs, including title insurance of $1,200. The company also pays $10,400 in property taxes, which includes $7,200 of back taxes (unpaid taxes from previous years) paid by McCoy on behalf of the seller and $3,200 due for the current fiscal year after the purchase date. Shortly after closing, the company pays a contractor $41,000 to tear down the old building and remove it from the site. McCoy is able to sell salvaged materials from the old building for $5,600 and pays an additional $11,300 to level the land.
Required:Determine the amount McCoy’s Fish House should record as the cost of the land. (Amounts to be deducted should be indicated by a minus sign.)
Answer:
$875,100
Explanation:
The values given in the question are as follows
Purchase price of land= $820,000
Title insurance= $1,200
Property taxes= $10,400
Amont of tax due for the current fiscal year= $3,200
Back taxes= $7,200
Cost of removing the building= $41,000
Salvaged materials= $5,600
Amount used to level the land= $11,300
The cost of land for McCoy's fish house can be calculated as follows
Total cost of land= Puchase price of land+Title insurance+Back property taxes+Cost of removing the building+Level the land-Salvage materials
$820,000+$1,200+$7,200+$41,000+$11,300-$5,600
= $875,100
Hence the total amount McCoy fish house should record as the cost of land is $875,100
A perfectly competitive industry's market price is found by finding the point on the market demand curve where the largest number of units will be purchased. Correct Answer locating the intersection of the market demand and market supply curves. You Answered the horizontal summation of all the industry firms' individual supply curves. identifying the price at which each firm realizes its largest economic profit.
Answer: locating the intersection of the market demand and market supply curves.
Explanation:
Here is the complete question:
A perfectly competitive industry's market price is found by:
a. locating the intersection of the market demand and market supply curves.
b. the horizontal summation of all the industry firms' individual supply curves.
c. identifying the price at which each firm realizes its largest economic profit.
d. finding the point on the market demand curve where the largest number of units will be purchased.
A perfectly competitive market is a form of market that is characterized by many buyers and sellers, no transaction costs, undifferentiated products, no barriers to entry and exit, perfect information about price of a good etc. The total revenue for a firm in perfectly competitive market is calculated by multiplying the price and quantity.
The market price in perfectly competitive market is gotten and determined by interaction of the forces of the market demand and market supply. The market demand is the sum of the quantity demanded by the buyers at different prices.
Two athletes of equal ability are competing for a prize of $10,000. Each is deciding whether to take a dangerous performance-enhancing drug. If one athlete takes the drug and the other does not, the one who takes the drug wins the prize. If neither take the drug they tie and split the prize.Both athletes know that the drug imposes a health risk of X dollars, meaning there are future health costs.Draw the 2 x 2 payoff matrix describing the decisions the athletes face.For what X (cost of health risks) is taking the drug the Nash Equilibrium? Explain in writing.Does making the drug safer thus lowering the costs of the risks (X) make the athletes better or worse off? Explain your answer in writing.
Answer:
The best option is when both athletes decide not to take drugs and each earns $5,000.
Explanation:
In a Nash equilibrium scenario:
Athlete 1's decision
take drug do not take drug
Athlete 2's $5000 - x/ $0 /
decision $5,000 - x $10,000 - x
take drug
do not $10,000 - x/ $5,000 /
take drug $0 $5,000
The best possible situation occurs when both athletes decide not to take the drugs. In this situation both athletes win $5,000. If both athletes decide to take the drug and charge the price, they will both earn $5,000 - X.
The Nash equilibrium should show the situation where both players win the most regarding the other player's strategy.
Concord Company, a machinery dealer, leased manufacturing equipment to Mays Corporation on January 1, 2017. The lease is for a 7-year period and requires equal annual payments of $26,143 at the beginning of each year. The first payment is received on January 1, 2017. Concord had purchased the machine during 2016 for $75,000. Collectibility of lease payments is reasonably predictable, and no important uncertainties surround the amount of costs yet to be incurred by Concord. Concord set the annual rental to ensure an 8% rate of return. The machine has an economic life of 8 years with no residual value and reverts to Concord at the termination of the lease.
Compute the amount of the lease receivable.
Answer:
$ 146,998.94
Explanation:
The applicable formula in this case is the present of annuity due.The amount of annual lease rental needs to be stated to present value equivalence by discounting all future cash flows of lease rentals to today's equivalent worth.
PV=PMT*(1/i-1/i(1+i)^n)*(1+i)
i is the rate of return of 8% OR 0.08
n is the number of years which is 7
PMT is the yearly lease rental of $26143
PV=26143*(1/0.08-1/0.08(1+0.08)^7)*(1+0.08)
PV=26143*(1/0.08-1/0.137106)*(1+0.08)
PV=26143*(12.5-7.293629941 )*(1.08)
PV=26143*5.206370059 *1.08
PV= 146,998.94
C. Urgent care admission, deductible is met Urgent care visit at Top Notch Urgent Care (out-of-network) Urgent care visit DOS: 07/04/2018 Allowable Charges = $230.00 Diagnosis: J02.0, Streptococcal pharyngitis Procedure: 99203, Level 3 clinic visit Procedure: 87880, Infectious agent antigen detection by immunoassay with direct optical observation; Streptococcus, group A Cost-sharing amount is _________
Answer:
$80.50
Explanation:
Calculation of Cost-sharing amount :
Using this formula
Allowed charges *out-of-network coinsurance percent
Where:
Allowed charges =$230.00
Out-of-network coinsurance percent =35%
Hence,
$230.00 * .35
= $80.50
Therefore the Cost-sharing amount will be $80.50
In the ultimatum game, one reason players don't choose the rational offer is A. they are worse off by taking the offer. B. that there are too many possible outcomes to reasonably consider. C. most people believe in reciprocity, and will therefore get even if the prosper treats them badly. D. that it is not a Nash equilibrium.
Answer:
C. Most people believe in reciprocity, and will therefore get even if the prosper treats them badly.
Explanation:
In recent times, this game has formed to be a great experimental tool to economists where a certain amount of money is been divided into two equal halves between the proposer and the other player. It is noted that at the end of repeatedly playing the game, ten times in their experiment, players almost always converges to the initial median effort level of four or five.
And in the other hand, a reasonable amount of players believe in reciprocity, and will therefore get even if the prosper treats them badly.
Most of this games and its forms have a set of Pareto ranked pure strategy Nash equilibria, one for each possible effort level.
You plan to borrow $ 4 comma 000 from a bank. In exchange for $ 4 comma 000 today, you promise to pay $ 4 comma 160 in one year. What does the cash flow timeline look like from your perspective? What does it look like from the bank's perspective?
Answer:
Please check the attached image for the diagram
Explanation:
I would be borrowing $4000 from the bank. I would be $4,000 richer and the bank would have $4000 less.
In one year, I would be paying the bank $4160. So I would have $4160 less and the bank would be $4160 richer.
A negative sign indicates cash outflow and a positive sign indicates a cash inflow.
I hope my answer helps you.
