Answer:
The correct option is the first one which is debit Raw Materials Inventory and credit Accounts Payable
Explanation:
The raw materials inventory which is the receiving account for the raw materials received into the factory is debited since receiving account or increase in asset account is naturally a debit entry according to the golden rule of double entry.
The credit goes to the accounts payable as obligation owed by the company to the supplier of the raw materials payable at a later date
On June 30, Year 7, King Co. had outstanding 9%, $5,000,000 face value bonds maturing on June 30, Year 9. Interest was payable semiannually every June 30 and December 31. On June 30, Year 7, after amortization was recorded for the period, the unamortized bond premium was $30,000. On that date, King acquired all its outstanding bonds on the open market at 93 and retired them. At June 30, Year 7, what amount should King recognize as gain before income taxes on redemption of bonds
Answer:
The gain before income taxes on redemption bond is $80,00
Explanation:
Please check the file attached below to see the solution to given question. Thank you
Kathy is a financial analyst in BTR Warehousing’s. As part of her analysis of the annual distribution policy and its impact on the firm’s value, she makes the following calculations and observations:
• The company generated a free cash flow (FCF) of $87.00 million in its most recent fiscal year.
• The firm’s cost of capital (WACC) is 13%. The firm has been growing at 10% for the past six years but is expected to grow at a constant rate of 8% in the future.
• The firm has 21.75 million shares outstanding.
• The company has $232.00 million in debt and $145.00 million in preferred stock.
Along with the rest of the finance team, Kathy has been part of board meetings and knows that the company is planning to distribute $120.00 million, which is invested in short-term investments, to its shareholders by buying back stock from its shareholders. Kathy also observed that, at this point, apart from the $120.00 million in short-term investments, the firm has no other nonoperating assets.
Using results from Kathy's calculations and observations, solve for the values in the following tables.
1. Value of the firm's operations.
a. 6,833.33
b.1,366.67
c. 68.33
d.1,421.33
2. Intrinsic value of equity immediately prior to stock repurchase.
a. 888
b. 948
c. 1276
d. 1153
3. Intrinsic stock price immediately prior to the stock repurchase.
a. 28.88
b. 41.50
c. 30.83
d. 37.50
4. Number of shares repurchased
a. 1.56
b. 1.95
c. 2.54
d. 3.32
5. Intrinsic value of equity immediately after the stock repurchase.
a. 888
b. 1306.67
c. 6773.33
d. 1038.67
6. Intrinsic stock price immediately after the stock repurchase.
a. 37.50
b. 30.83
c. 28.88
d. 41.50
Based on you understanding of stock repurchases, identify whether the following statement is true or false:
"The stock price of a firm increases after the firm repurchases some of its shares."
Answer and Explanation:
The computation is shown below.
1. Value of the firm operations is
= Free Cash Flow × (1 + Growth Rate) ÷ (WACC - Growth Rate)
= $87 million × (1 + 8%) ÷ (13% - 8%)
= $1,879.20
This is the answer but the same is not provided in the given options
2. The intrinsic value of equity immediately prior to stock repurchase is
= Value of Firm's Operations + Value of Non Operating Assets - Value of Debt - Value of Preferred Stock
= $1,879.20 + $120 - $232 - $145
= $1,622.20
This is the answer but the same is not provided in the given options
3. The intrinsic stock price immediately prior to stock repurchase is
= Intrinsic Value of Equity Prior to Stock Repurchase ÷ Number of Outstanding Shares
= ($1,622.20) ÷ (21.75 million shares)
= $74.58
This is the answer but the same is not provided in the given options
4. The number of shares repurchased is
= Cash Used for Repurchase ÷ Intrinsic stock price
= $120 ÷ $74.58
= 1.61
This is the answer but the same is not provided in the given options
5. The intrinsic value of equity immediately after stock repurchase is
= Value of Firm's Operations - Value of Debt - Value of Preferred Stock
= $1,879.20 - $232 - $145
= $1,502.20
This is the answer but the same is not provided in the given options
6. The intrinsic stock price immediately after stock repurchase is
= Intrinsic Value of Equity After Stock Repurchase ÷ Number of Outstanding Shares after Repurchase
= ($1,502.20) ÷ (21.75 million shares - 1.61 million shares)
= $74.59
This is the answer but the same is not provided in the given options
This statement is false because if the stock price changes after a firm conducts its share repurchase, then there are arbitrage opportunities. Thus, the price of the stock remains the same after a repurchase
Which of the following gives computers the ability to understand unpredictable language, based on the way humans speak and write? Machine learning Deep learning Natural language processing Computer vision Narrow AI
Answer:
AI (Artificial Intelligence)
Explanation:
In computer science is sometimes known as machine intelligence. It is not like natural intelligence which has been displayed by human beings and by animals naturally.
It is different from natural intelligence. The artificial intelligence is considered to be the academic discipline. There is a traditional problem with AI-related to knowledge, reasoning, planning and learning, and the ability to manipulate and move on.
The AI contains statistical methods, computational methods, etc. This intelligence is created just because it simulates human intelligence.
The total wage expense for Grande Co. was $ 156 comma 000. Of this total, $ 32 comma 000 was above the OASDI wage base limit and not subject to this tax. All earnings are subject to Medicare taxes, and $ 58 comma 000 was above the federal and state unemployment wage base limits and not subject to unemployment taxes. Please calculate and journalize the total payroll tax expense for Grande Co. given the following rates and wage base limits:
Answer:
Dr FICA OASDI (Social Security) tax expense $7,688
Dr FICA Medicare tax expense $2,262
Dr FUTA tax expense $588
Dr SUTA tax expense $5,586
Cr FICA OASDI (Social Security) tax payable $7,688
Cr FICA Medicare tax payable $2,262
Cr FUTA tax payable $588
Cr SUTA tax payable $5,586
Explanation:
Federal unemployment tax 0.6% = ($156,000 - $58,000) x 0.6% = $588
State unemployment tax 5.7% = ($156,000 - $58,000) x 5.7% = $5,586
OASDI 6.2% = ($156,000 - $32,000) x 6.2% = $7,688
Medicare 1.45% = $156,000 x 1.45% = $2,262
Consider an economy that produces only two goods: fresh apricots and dried apricots. In this economy, the technology of producing dried apricots is to place fresh apricots on special racks and allow them to dry in the sun. Fannie's Farms is the only company that grows fresh apricots, while Darryl's Dried Victuals is the only producer of dried apricots. Fannie's sells some of its apricots directly to consumers for consumption. The relevant revenue and cost information for each of the two firms in the economy is given below: Darryl's Dried Victuals Revenue from selling dried apricots: Cost of buying fresh apricots from Fannie's: Interest on funds borrowed to buy drying racks: Wages paid to employees Taxes $2,750,000 1,800,000 200,000 550,000 90,000 Fannie's Farms Revenue from selling fresh apricots: Rent on land (including apricot trees) Wages to employees Taxes $2,350,000 400,000 1,100,000 180,000 Darryl's profit from selling dried apricots is:_________.A) $5,390,000 B) $110,000 C) None of these are correct D) $150,000 E) $670,000
Answer:
$110,000
Explanation:
Profit = Total revenue - Total cost
Total revenue = $2,750,000
Total cost = cost of purchase + interest + wages + taxes
= $1,800,000+$200,000+ 550,000 + 90,000 = $2,640,000
Profit = $2,750,000 - $2,640,000 = $110,000
I hope my answer helps you
Which factors are relevant to the time a consumer spends looking at a product on the shelf prior to selection? The article "Effects of Base Price Upon Search Behavior of Consumers in a Supermarket" (J. Econ. Psycho., 2003: 637-652) reported the following data on elapsed time (sec) for fabric softener purchasers and washing-up liquid purchasers; the former product is significantly more expensive than the latter. These products were chosen because they are similar with respect to allocated shelf space and number of alternative brands.
Find the answer and explanation in the attachment
Note: The complete Question is also added in the attachment
Durban Metal Products, Ltd., of the Republic of South Africa makes specialty metal parts used in applications ranging from the cutting edges of bulldozer blades to replacement parts for Land Rovers. The company uses an activity-based costing system for internal decision-making purposes. The company has four activity cost pools as listed below:Activity Cost Pool Activity Measure Activity RateOrder size Number of direct labor-hours $17.80 per direct labor-hourCustomer orders Number of customer orders $354.00 per customer orderProduct testing Number of testing hours $72.00 per testing hourSelling Number of sales calls $1,488.00 per sales callThe managing director of the company would like information concerning the cost of a recently completed order for heavy-duty trailer axles. The order required 130 direct labor-hours, 11 hours of product testing, and 5 sales calls.Required:Prepare a report summarizing the overhead costs assigned to the order for heavy-duty trailer axles. What is the total overhead cost assigned to the order?Activity Cost Pool ABC CostOrder size Customer orders Product testing Selling Total overhead cost
Answer:
Total Overhead Cost = 10700.00
Explanation:
The required objective here is to :
Prepare a report summarizing the overhead costs assigned to the order for heavy-duty trailer axles and What is the total overhead cost assigned to the order?Activity Cost Pool ABC Cost Order size Customer orders Product testing Selling Total overhead cost.
The concept that specifically explains the thesis of this question is called Activity Based Costing
What Activity based costing does is to allocate costs to the activities that are the real cause of the overhead at their initial stage Then, also allocate the cost of those activities only to the products that are specifically demanding the activities.
Now; The Total overhead Cost for the order can be seen as illustrated in the table below.
Serial - Cost - Overhead - Activity (b) ABC Cost (a×b)
Number Center Rate (a)
1 Order size 17.80 130 2314.00
2 Customer order 354.00 1 354.00
3 Product Testing 72.00 11 792.00
4 Selling 1448.00 5 7240.00
Total Overhead Cost 10700.00
Forever Jewelers uses the perpetual inventory system. On April​ 2, Forever sold merchandise with a cost of $ 1 comma 500$1,500 for $ 9 comma 000$9,000 to a customer on account with terms of 22​/15, ​n/30. Which of the following journal entries correctly records the sales​ revenue?
a. Accounts Receivable 6,720
Sales Revenue 6,720
b. Sales Revenue 6,720
Accounts Receivable 6,720
c. Sales Revenue 6,720
Cost of Goods Sold 6,720
d. Accounts Receivable 1,500
Sales Revenue 1,500
Answer:
Accounts Receivable $8,820
To Sales Revenue $8,820
Explanation:
The journal entry to record the sales revenue is shown below:
Accounts receivable A/c Dr $8,820
To Sales revenue A/c $8,820
(Being merchandise sold on credit basis)
For recording this we debited the account receivable as it increased the assets and credited the sales revenue as it also increased the revenue
The computation of sales revenue is shown below:
= Sales revenue - discount
= $9,000 - $9,000 × 2%
= $9,000 - $180
= $8,820
This is the answer but the same is not provided in the given options
large global automobile manufacturer is considering outsourcing the manufacturing of a solenoid used in the transmission of its SUVs. The company estimates that annual fixed costs of manufacturing the part in-house, which include equipment, maintenance, and management, amounts to $7.1 million. The variable costs of labor and material are $8.00 per unit. The company has an offer from a major subcontractor to produce the part for $10.75 per unit. However, the subcontractor wants the company to share in the costs of the equipment. The automobile company estimates that the total cost would be $ 3.7 million, which also includes management oversight for the new supply contact.
A. How many solenoids would the automobile company need per year to make the in-house option least costly?
B. What other factors, besides costs, should the automobile company consider before revising its supply chain for SUVs?
Answer:
A. Number of solenoids to make in-house to cover fixed costs:
Break-even Point = Fixed Cost/Contribution margin per unit
= $7,100,000/$2.75 = 2,581,818 Units
B. Other Factors, besides costs, to consider before revising its supply chain for SUVs, are the suppliers' capacity to meet demand, the quality of the outsourced part, competitors behavior, level of control which can be exercised over the supplier, etc.
Explanation:
a) Market price per unit = $10.75
Variable cost per unit = $8.00
Contribution margin per unit = $2.75
b) Fixed Cost = $7.1 million
As sales exceed the break‑even point, a high contribution‑margin percentag________.
a. increases profits slower than does a low contribution-margin percentage.
b. increases profits faster than does a low contribution-margin percentage.
c. decreases profits at the same rate as a low contribution-margin percentage.
d. increases profits at the same rate as a low contribution-margin percentage.
Answer: b. increases profits faster than does a low contribution-margin percentage
Explanation:
Contribution Margin refers to the amount of sales left after the Variable Costs of a good has been removed from it. That means Contribution Margin is simply Sales less Variable Costs. It helps to check how much is left to deal with Fixed Costs and how much profit remains after.
The Break-Even Point in sales refers to the point where Total Costs is equal to Total Revenue. At this point both variable costs and fixed costs have been covered by the Revenue.
If you get to this Break-Even Point then, that means you don't have to worry about Fixed Costs anymore and your only worry is the Variable Costs which are present per good. At this point therefore, a Higher Contribution Margin percentage tells that Variable Costs are quite less than sales, this would enable a company to gain profit faster because Fixed Costs are out of the way and anything made over Variable Costs now is Profit.
You are thinking about renting a room in a house next year with three of your friends. For each month’s rent, you are willing to pay $480, your first friend is willing to pay $450, your second friend is willing to pay $560, and your third friend is willing to pay $510. The landlord agrees to offer each of you separate leases but will charge you all the same price: $450.You decide this is a good deal, so you and your friends move in. A couple of months later, you learn from someone who knows the landlord that he would have been willing to rent each room for $400 per month.Part 1:What is the amount of producer surplus per month?PART 2:What is the amount of total consumer surplus per month?PART3:What is the amount of total surplus each month?
Answer:
$200
$200
$400
Explanation:
Producer surplus is the difference between the price of a product and the least price the seller is willing to sell his product.
Producer surplus = price of the product - least price the producer is willing to sell his product
$450 - $400 = $50
Because there are four people , $50 × 4 = $200
Consumer surplus is the difference between the willingness to pay of a consumer and the price of the product.
My consumer surplus = $480 - $450 = $30
Ist friend = $450 - $450 = 0
2nd friend = $560 - $450 = $110
3rd friend = $510 - $450 = $60
Total surplus = $30 + $110 + $60 = $200
Total surplus is the sum of producer and consumer surplus.
$200 + $200 = $400
I hope my answer helps you
On July 1, 2022, Blossom Company sells equipment for $119000. The equipment originally cost $330000, had an estimated 5-year life and an expected salvage value of $50000. The Accumulated Depreciation account had a balance of $196000 on January 1, 2022, using the straight-line method. The gain or loss on disposal is
Answer:
Gain= $13,000
Explanation:
Giving the following information:
Selling price= $119,000.
The equipment originally cost $330000, had an estimated 5-year life, and an expected salvage value of $50000.
The Accumulated Depreciation account had a balance of $196000.
First, we need to calculate the accumulated depreciation on July 1, 2022.
Annual depreciation= (original cost - salvage value)/estimated life (years)
Annual depreciation= (330,000 - 50,000)/5= $56,000
Depreciation for 2022= (56,000/12)*6= 28,000
Accumulated depreciation= 196,000 + 28,000= $224,000
The gain or loss is determined using the book value:
Book value= 330,000 - 224,000= 106,000
Gain/loss= selling price - book value
Gain/loss= 119,000 - 106,000
Gain= $13,000
Lion Company's direct labor costs for the month of January were as follows: What was Lion's direct labor efficiency variance? Select one: a. $6,000 favorable b. $6,150 favorable c. $6,300 favorable d. $6,450 favorable
Answer:
Direct labor time (efficiency) variance= $6,150 favorable
Explanation:
Giving the following information:
Lion Company's direct labor costs for the month of January were as follows:
Actual total direct labor-hours 20,000
Standard total direct labor-hours 21,000
Direct labor rate variance - unfavorable $3,000
Total direct labor cost $126,000
First, we need to calculate the standard direct labor hour cost.
Direct labor rate variance= (Standard Rate - Actual Rate)*Actual Quantity
Actual rate= 126,000/20,000= 6.3
-3,000= (SR - 6.3)*20,000
-3,000= SR20,000 - 126,000
123,000/20,000= SR
6.15= Standard rate
To calculate the direct labor efficiency variance, we need to use the following formula:
Direct labor time (efficiency) variance= (Standard Quantity - Actual Quantity)*standard rate
Direct labor time (efficiency) variance= (21,000 - 20,000)*6.15
Direct labor time (efficiency) variance= $6,150 favorable
Bridgeport Company reported the following amounts in the stockholders’ equity section of its December 31, 2016, balance sheet.Preferred stock, 10%, $100 par (10,000 shares authorized, 2,000 shares issued) $200,000Common stock, $5 par (110,000 shares authorized, 22,000 shares issued) 110,000Additional paid-in capital 132,000Retained earnings 419,000Total $861,000During 2017, Bridgeport took part in the following transactions concerning stockholders’ equity.1. Paid the annual 2016 $10 per share dividend on preferred stock and a $2 per share dividend on common stock. These dividends had been declared on December 31, 2016.2. Purchased 1,700 shares of its own outstanding common stock for $41 per share. Bridgeport uses the cost method.3. Reissued 600 treasury shares for land valued at $28,400.4. Issued 480 shares of preferred stock at $103 per share.5. Declared a 10% stock dividend on the outstanding common stock when the stock is selling for $44 per share.6. Issued the stock dividend.7. Declared the annual 2017 $10 per share dividend on preferred stock and the $2 per share dividend on common stock. These dividends are payable in 2018.A) PREPARE THE JOURNAL ENTRIES TO RECORD TRANSACTIONS ABOVEB) Prepare the December 31, 2017, stockholders’ equity section. Assume 2017 net income was $312,000.
The following are selected 2015 transactions of Pedigo Corporation.
Jan. 1 Purchased a small company and recorded goodwill of $150,000. Its useful life is indefinite.
May 1 Purchased for $75,000 a patent with an estimated useful life of 5 years and a legal life of 20 years.
Required:
Prepare necessary adjusting entries at December 31 to record amortization required by the events above.
Answer:
Explanation:
The necessary adjusting entries at December 31 to record amortization required by the events above has been prepared.
It should also be noted that due to the goodwill having an indefinite life, no entry was made to amortize the goodwill.
It should be noted that the amortization expense was gotten as:
Annual amortization = $75,000/5
= $15,000
2015 amortization= $15,000 × 8/12months
= $15,000 × 2/3
= $30,000/3
= $10,000
Kindly check the attached file forthe adjusting entries
Which journal entry reflects the adjusting entry needed on December 31?:In November, BOC received a $5,000 cash deposit from a customer for custom-build goods that will be delivered in January (BOC recorded an entry for this $5,000 in November). Now, it is December 31, the end of the fiscal year.Dr. Unearned Revenue 5,000Cr. Inventory 5,000No entry needed.Dr. Cash 5,000Cr. Revenue 5,000Dr. Advances from Customers 5,000Cr. Revenue 5,000Dr. Unearned Revenue 5,000Cr. Revenue 5,000
Answer:
No adjusting entry required
Explanation:
When the contract was formed and advance was received the company must had recorded the following entry:
Dr Cash Account $5000
Cr Unearned Revenue $5000
Now it is the year end and till now the goods are not delivered which means advance that was received is still our unearned revenue So no further entry is required until the delivery of the goods ordered to the customer.
Correct entry is "No adjusting entry required"
Tyare Corporation had the following inventory balances at the beginning and end of May:_______.
May 1 May 30
Raw materials $ 27,500 $ 34,000
Finished Goods $ 77,000 $ 70,000
Work in Process $ 15,500 $ 16,808
During May, $60,500 in raw materials (all direct materials) were drawn from inventory and used in production. The company's predetermined overhead rate was $12 per direct labor-hour, and it paid its direct labor workers $15 per hour. A total of 340 hours of direct labor time had been expended on the jobs in the beginning Work in Process inventory account. The ending Work in Process inventory account contained $7,250 of direct materials cost. The Corporation incurred $42,600 of actual manufacturing overhead cost during the month and applied $40,800 in manufacturing overhead cost. The actual direct labor-hours worked during May totaled:______.
a. $60,500
b. $71,192
c. $54,000
d. $67,000
Answer:
354 hours
Explanation:
Direct material cost = $7,250
Actual manufacturing overhead cost = $40,800
Applied manufacturing overhead cost = $40,800
The given value if work process at end of May(May 30) = $16,808 and & $7,250 was used as direct material cost.
Thus, remaining labor and overhead = $16,808 - $7,250 = $9,558
Given an overhead rate of $12 per hour and labor rate of $15 per hour
Overhead rate + labor rate = $12 + $15 = $27 per hour
Direct labour hours worked =
$9,558 ÷ $27 = 354 hours
Therefore the actual direct labor hours worked during may is 354 hours
None of the given option is correct. They are stated in $ and the values are unrealistic.
Patterson Lawn Co. wants to determine the cost of each lawn care maintenance job. The Company has two operating departments, one that performs lawn care services for commercial properties and one that services residential properties. Both operating departments are supported by two service departments, administrative and machine maintenance. Costs for each of these supporting departments are as follows:
Administrative Machine Maintenance
Total cost $178,200 $441,000
The following estimates that are related to the operating departments is as follows:
Commercial Residential Total
properties properties
# of employees 42 24 66
# of customers 135 170 305
# of billable hours 5,000 4,000 9,000
Total overhead cost* $ 435,000 $ 360,000 $ 795,000
*Note that total overhead cost includes costs allocated from service departments and other overhead costs.
The Company uses the direct method for all cost allocations. Assume that total overhead cost is allocated based on the # of billable hours incurred by each operating department. Suppose a lawn care maintenance job in the residential properties department has a direct cost of $170 and takes 4 hours to complete. What is the total cost of this job?
Answer:
$530Explanation:
Administrative
Machine Maintenance
Total cost $178,200 $441,000
Operating
Commercial Residential Total
# of employees 42 24 66
# of customers 135 170 305
# of billable hours 5,000 4,000 9,000
overhead cost* $435,000 $360,000 $795,000
overhead cost
per billable hour $87 $90
Suppose a lawn care maintenance job in the residential properties department has a direct cost of $170 and takes 4 hours to complete. What is the total cost of this job?
total costs = $170 + (4 x $90) = $170 + $360 = $530
The direct method for cost allocations is a method that allocates overhead costs directly to the production department and the product itself.
A person may be willing to pay more than the fundamental value of a stock today if he or she believes that someone else will pay even more for it in the near future. When many people purchase stocks based on this reasoning, the stock market can develop:
Answer:
A speculative bubble
Explanation:
A speculative bubble is simply said to be a sharp increase in the value of an asset within a known industry, commodity e.t.c. due to the wide speculation that a property will be more valuable in the near future, there will be a spike in that commodity since a lot of people want to purchase it. This bubble exist in different sectors especially in the stock market and in the economy
Cabinet Division would like to purchase 11,900 units from the Handle Division at a price of $130 per unit. Handle Division has no excess capacity to handle the Cabinet Division's requirements. The Cabinet Division currently purchases from an outside supplier at a price of $140. If the Handle Division accepts a $130 price internally, the company, as a whole, will be better or worse off by:
Missing information:
Selling price to outside customers $155
Variable cost per unit $70
Fixed cost per unit (based on capacity) $40
Capacity (in units) 62,000
Answer:
the company as a whole will be worse off by $178,500
Explanation:
since the Handle Division has no spare capacity to handle the order from Cabinet Division, it must treat this order as any common sale to an outside client.
outside Cabinet differential
customers Division amount
sales revenue $1,844,500 $1,547,000 ($297,500)
variable costs $833,000 $833,000 $0
fixed costs $476,000 $476,000 $0
total ($297,500)
Handle Division will be worse off by $297,500
Cabinet Division will be better off by = ($140 - $130) x 11,900 = $119,000
net effect on the company = worse off by $178,500
Replace Equipment A machine with a book value of $80,000 has an estimated five-year life. A proposal is offered to sell the old machine for $50,500 and replace it with a new machine at a cost of $75,000. The new machine has a five-year life with no residual value. The new machine would reduce annual direct labor costs from $11,200 to $7,400. a. Prepare a differential analysis dated April 11 on whether to continue with the old machine (Alternative 1) or replace the old machine (Alternative 2). If an amount is zero, enter "0". Use a minus sign to indicate subtracted or negative numbers or a loss. Differential Analysis Continue with Old Machine (Alt. 1) or Replace Old Machine (Alt. 2) April 11 Continue with Old Machine (Alternative 1) Replace Old Machine (Alternative 2) Differential Effect on Income (Alternative 2) Revenues: Proceeds from sale of old machine $ $ $ Costs: Purchase price Direct labor (5 years) Income (Loss) $ $ $ b. Should the company continue with the old machine (Alternative 1) or replace the old machine (Alternative 2)
Answer:
Replace Equipment:
1. Differential Analysis:
i) Continue with Old Machine (Alt. 1):
Cost of old machine $80,000 $0
Direct labor (5 years) -$56,000
Income (Loss) ($56,000)
ii) Replace Old Machine (Alt. 2)
Differential Effect on Income (Alternative 2)
Proceeds from sale of old machine $50,500
Purchase price for new equipment -$75,000
Direct labor (5 years) -$37,000
Income (Loss) ($61,500)
b. Should the company continue with the old machine (Alternative 1) or replace the old machine (Alternative 2):
The company should continue with the old machine. Taking Alternative 2 would cost the company $5,500 more than Alternative 1.
Explanation:
Differential analysis or incremental analysis is a management accounting technique which assesses the changes in revenues, costs, and profits that result from a business decision.
Differential cost is the difference in total costs between two acceptable alternative courses of action. Differential revenue is the difference in sales that will be generated by two different courses of action.
In differential analysis, sunk (past) cost is not relevant for decision making. This is why the book value of $80,000 is not considered in the decision of which alternative to take.
Question Suppose you have $200,000 in a bank term account. You earn 5% interest per annum from this account. You anticipate that the inflation rate will be 4% during the year. However, the actual inflation rate for the year is 6%. Calculate the impact of inflation on the bank term deposit.
Answer:
Deposited amount will decrease by 1% and $2,000
Explanation:
Inflation rate will effect the value of money due to decrease in purchasing power of the currency holder.
We will use following formula to calculate the impact
Nominal rate = Real interest rate + Inflation rate
5% = Real interest rate + 6%
Real interest rate = 5% - 6% = -1%
The deposited amount will be decreased by 1%.
Deposit value = $200,000 x ( 1 - 1% ) = $198,000
Decrease in value = $200,000 - $198,000 = $2,000
In a late October marketing meeting, Theresa, the branch manager, told her marketing manager, Sal, that she needed two things by the end of the year from him: "First I want your goals for next year, and then I need your action plan to reach your goals, your ________."
Answer:
Marketing plan
Explanation:
The marketing plan is a report in which a company establishes the marketing strategies that are going to be used in a specific period of time to be able to achieve the goals that have been set. According to this, the answer is marketing plan as from the definition you infer that the marketing plan is an action plan to reach your goals.
Fair Value Journal Entries, Trading Investments Jets Bancorp Inc. purchased a portfolio of trading securities during 20Y3. The cost and fair value of this portfolio on December 31, 20Y3, was as follows: Name Number of Shares Total Cost Total Fair Value Dolphins Inc. 1,600 $28,800 $32,000 Marino Company 1,400 35,000 30,800 Namath Company 600 21,000 19,800 Total $84,800 $82,600
On May 10, 2017, Jets Bancorp Inc. purchased 1,000 shares of Giants Inc. at $24 per share plus a $150 brokerage commission.
a. Provide the journal entries to record the following (refer to the Chart of Accounts for exact wording of account titles and be sure to enter the year as part of the date):
The adjustment of the trading security portfolio to fair value on December 31, 20Y3.
The May 10, 20Y4, purchase of Giants Inc. stock.
Answer:
Trading Investments Jets Bancorp Inc.
Journal Entries - Fair Value:
Dec. 31, 20Y3:
Debit Credit
Investment in Dolphins Inc. $3,200
Gain (Loss) on Investments $3,200
To record the investment's fair value and gain.
Gain (Loss) on Investments $4,200
Investment in Marino Company $4,200
To record the investment's fair value and loss.
Gain (Loss) on Investments $1,200
Investment in Namath Company $1,200
To record the investment's fair value and loss.
May 10, 20Y4:
Investment in Jets Bancorp Inc $24,000
Brokerage Commission $150
Cash Account $24,150
To record purchase of 1,000 shares at $24 per share plus commission.
Explanation:
a) Trading securities are a category of securities that include both debt securities and equity securities. An entity holds them with the intention to sell in the short-term for a profit that arises from increases in the prices of the securities.
b) Fair value is an asset's selling price, which is freely agreed upon between a willing and knowledgeable buyer and seller. But, for Debt Securities, it represents the market value of the investments at any point in time when financial statements are being prepared. Investments that are held for trading purposes are required to be accounted for, using the fair value method. This implies that the gains and losses, both realized and unrealized must be accounted for whenever financial statements are bing prepared or when the investment is disposed of.
As a student in the Principles of Management class of Ama Ghana University, you are expected to have experiential knowledge so that you can be able to solve real life business problems after graduation. To achieve this objective, the 2020 class has been divided into ten groups; and each team works in a management capacity with ten management consulting companies in the Greater Accra Region. San Consulting - the firm that your group works with is a project management company that is into Real Estate construction and management consulting. This firm which has twenty years’ experience in this business is the first choice for all individuals and companies that want quality service. You have on the contrary, observed that many of the management practices have not developed precipitously as situations in the business environment warrant. The accountant confirmed this by saying in the last general meeting that a certain percentage of San’s profit margin is being lost because of this situation. She gave the example that the surveying department spent eight labor hours generating data that had been generated two weeks ago by another unit. Due to the fact that the surveying department did not know that the data had already been created, a substantial effort was wasted and this has been a recurrent problem. In addition, the increase in demand of the services of San’s Consulting has placed significant pressures on the five managers whose duties are not clearly defined. For instance, you have observed that any of these managers perform duties in the operations department as well as any other unit within the firm. They are not able to perform all the functions required of them due to the ineffectiveness of the organizational structure. You and the members of your group are expected to write a report to the top-level management team regarding your analysis of the situation in the firm.
1. Explain which of the four main management functions is/are not operating as it/they should within the firm? 3 Marks
2. What recommendations will you make in your report that will help assure that this situation or similar one would not happen again? 4 Marks
3. Assume that the top-level management team has accepted your recommendations, how can their effectiveness be evaluated three months after implementation? 4 Marks
4. Discuss the organizational structure currently used by San’s Consulting and would you recommend the continuous use of this structure? If yes or no, present the factors (4) that influenced your decision regarding the right organizational structure for San’s Consulting. 5 Marks
5. Identify and discuss the main problems that the firm is likely to experience (i) if the current structure is continued or (ii) if a new structure is implemented. 5 Marks
Answer:
The organization structure is not clearly defined, Managers are performing duties in various departments at a time.
Explanation:
San Consulting is one of the finest consulting firm in the Greater Accra Region. The firm is always a first choice for individuals who want to pursue their career in business. The Organizational structure of San Consulting is not clearly defined. San's profits are falling because management practices are not according to the other competitive organizations. The managers working at San are facing excess workload and pressure for their work. Their job descriptions is not clearly defined and they are forced to work in multiple departments at the same time due to which they are losing focus on their own work.
Questions 1: Planning, organizing, leading and controlling
Question 2: The organizational structure needs to be set and every employee should have their defined job role so they are able to complete work with efficiency.
Question 3: The profits of San consulting will rise as there will be less duplication of work and every employee will be able to focus on their own task and will work with efficiency.
Question 4: Matrix. The matrix organizational structure is not suited in this organization. The right organizational structure for San consulting will be Functional Structure.
Question 5: (i) The profits for San Consulting will decline
(ii) The profit will rise because employee will focus more on their specific tasks.
1B. Yes agree. The managers need to focus on the external environment as well to identify the opportunities and threats present which can stimulate changes for the organization.
The effects of inflation Suppose Friendly Airlines is considering signing a long-term contract with the union representing its pilots. Friendly Airlines and the union both agree that real wages should increase by 2%. Inflation is expected to be 3%, so they agree on a 5% nominal wage increase.
Now, suppose inflation turns out to be lower than expected, coming in at 2%. This would_______ the union and______ Friendly Airlines because the real wage increase would now be______ .
Because of uncertainty about future inflation, the union devotes a large quantity of resources to monitoring inflation indicators in order to maximize its financial position. This illustrates the fact that:______
A. Inflation harms lenders and helps borrowers
B. Variable inflation is associated with high transaction costs
C. Inflation obscures relative price changes
Answer:
The lower than expected inflation would benefit the union and not benefit Friendly Airlines.
B. Variable inflation is associated with high transaction costs
Explanation:
Inflation is a persistent rise in the general price levels.
It was expected that inflation would increase by 3% and because of that expectation, wages were increased by 5%.
As it turns out, inflation only increased by 2%. If employers were aware that inflation would increase by only 2%, the increase in income would have been 4%.
As a result of this, the company ends up paying more to workers and workers and up earning more. So, the union benefits while the airline is at a disadvantage.
Because of the uncertainty of inflation, the union dedicates high amount of resources to monitor its movements. This shows that there is a high cost associated with the uncertainty of inflation.
I hope my answer helps you
Omega Healthcare Investors Inc. (ticker symbol on NYSE: OHI) is described as an "equity REIT (real estate investment trust) that supports the goals of skilled nursing facility (SNF) and assisted living facility (ALF) operators with financing and capital." OHI has a relatively high dividend. If OHI is managing its retained earnings to maximize economic profits, a reasonable explanation is that:_____
Answer:
The reasonable explanation is that they are trying to take advantage of government tax incentives which are usually available to companies which retain their earning for investment purposes.
Explanation:
Many governments usually subject distributed profit to corporate tax. When this happens, a huge chunk of profit is eroded. So many companies would rather re-invest their earnings to increase the value of their stock in the secondary market.
The average corporate tax rate in the EU, for instance, is 21.77% whilst the average corporate tax rate in the OECD for is 23.59%.
OECD, by the way, stands for Organisation for Economic Co-operation and Development and the United States of America is a member.
Cheers!
An analysis of stockholders' equity of Hahn Corporation as of January 1, 2012, is as follows:
Common stock, par value $20; authorized 100,000 shares;
issued and outstanding 93000 shares $1860000
Paid-in capital in excess of par 930000
Retained earnings 762000
Total $3552000
Concord uses the cost method of accounting for treasury stock and during 2021 entered into the following transactions:
Acquired 2460 shares of its stock for $73800. Sold 2000 treasury shares at $35 per share. Sold the remaining treasury shares at $20 per share.
Assuming no other equity transactions occurred during 2012, what should Hahn report at December 31, 2012, as total additional paid-in capital?
Answer:
Assuming no other equity transactions occurred during 2012, what should Hahn report at December 31, 2012, as total additional paid-in capital?
additional paid in capital = $930,000 + $30,000 = $960,000Explanation:
Common stock, par value $20; authorized 100,000 shares; issued and outstanding 93000 shares $1,860,000
Paid-in capital in excess of par $930,000
Retained earnings $762,000
Total $3,552,000
Acquired 2460 shares of its stock for $73800.
Dr Treasury stock 73,800 (paid $30 per stock)
Cr Cash 73,800
Sold 2000 treasury shares at $35 per share.
Dr Cash 70,000
Cr Common stock 40,000 (= $20 x 2,000)
Cr Additional paid in capital 30,000
Sold the remaining treasury shares at $20 per share.
Dr Cash 9,200
Cr Common stock 9,200 (= $20 x 460)
A company has a policy of paying salaries for contract labor on the 15th of the month following the labor services received. In December 2021, the company recorded $15,000 paid in salaries for labor services received in November 2021. In addition, labor services received in December 2021 were $12,000 and will be paid by the company on January 15, 2022. What adjusting entry will the company record on December 31, 2021? * I really need help with this*
Multiple Choice
a. Debit Salaries Expense and credit Salaries Payable for $3,000.
b. Debit Salaries Expense and credit Cash for $15,000.
c. Debit Salaries Expense and credit Salaries Payable for $12,000.
d. Debit Salaries Expense and credit Salaries Payable for $27,000.
Answer:
c. Debit Salaries Expense and credit Salaries Payable for $12,000.
Explanation:
The journal entry is shown below:
Salaries Expense $12,000
Salaries Payable $12,000
(Being salaries expense is recorded)
For recording this we debited the salaries expense as it increased the expense and credited the salary payable as it also increased the liabilities
According to the accrual basis of accounting, the expenses is recorded when they are incurred
So only $12,000 would be considered
The roles and responsibilities of human resource management have evolved primarily because of changes in the law that rewrote many traditional
practices and
Answer:
a) Organizations' recognition of employees as their ultimate resource.
Explanation:
The evolution of the human resources sector in a company had its main milestone from the moment that companies began to be seen as an organic structure.
The changes in the legislation also influenced the evolution of HR, because according to the fact that employees started to have greater legal protection over their labor rights, HR practices were focused on investment in the development of employees' capacities and well-being, in addition to the selection of professionals with ideal personality profiles to assume a position in the company.
Therefore, currently the human resources of a company is geared towards professional training and support to the demands of the employee, as the current business management focused on human capital guarantees advantages of an organizational climate favorable to innovation, a more motivated and more loyal worker, the which guarantees significant strategic advantages in the market.
Answer:
organizations recognize that employees are there ultimate resource
changes in the law have rewritten traditional practices
Explanation:
