Answer and Explanation:
The computation is given below:
For Bank A,
Effective annual rate is
= (1 + 0.10 ÷ 12)^12 - 1
= 10.47%
For Bank B,
Effective annual rate is
= (1 + 0.11 ÷ 4)^4 - 1
= 11.46%
And,
For Bank C,
Effective annual rate = 12%
Therefore, Bank A is best to borrow at lowest effective annual rate
Lopez Company has a single employee, who earns a salary of $60,000 per year. That employee is paid on the 15th and last day of each month. On January 15, based, in part, on the information set forth in the accounting records, the following must be withheld from the employee's pay: FICA—Social Security Taxes (at 6.2%), FICA—Medicare Taxes (at 1.45%), Employee Federal Income Taxes (in the amount of $400), Employee State Income Taxes (in the amount of $25), and Employee Medical Insurance (in the amount of $100). (The employee‘s paycheck has not yet been prepared.) Entries to prepare the January 15 journal entry for Lopez would include:
Answer:
Debit Salaries Expense $2,500
Credit FICA—Social Security Taxes Payable $155
Credit FICA—Medicare Taxes Payable $36.25
Cedit Employee Federal Income Taxes Payable $400,
Credit Employee State Income Taxes Payable $25
Credit Employee Medical Insurance Payable r $100
Credit Salaries Payable $1,783.75
Explanation:
Preparation of the January 15 journal entry for Lopez
January 15
Debit Salaries Expense $2,500
Credit FICA—Social Security Taxes Payable $155
(6.2%*$2,500)
Credit FICA—Medicare Taxes Payable $36.25
(1.45%*$2,500)
Cedit Employee Federal Income Taxes Payable $400,
Credit Employee State Income Taxes Payable $25
Credit Employee Medical Insurance Payable r $100
Credit Salaries Payable $1,783.75
($2,500-$155-$36.25-$25-$100)
An electronics company makes communications devices for military contracts. The company just completed two contracts. The navy contract was for 2,540 devices and took 27 workers two weeks (40 hours per week) to complete. The army contract was for 5,940 devices that were produced by 37 workers in three weeks (40 hours per week). a. Calculate the productivity for navy and army contracts in units produced per labor hour.
Answer:
Explanation:
For Navy contract, the total number of man hours put into production will be:
= 27 × 40 × 2
= 2160 man hours
Then, the units produced per labor hour will be:
= 2540 devices / 2160
= 1.176 units per labor hour.
For Army contracts, the total number of man hours put into production will be:
= 37 × 40 × 3
= 4440 man hours
Then, the units produced per labor hour will be:
= 5940/4440
= 1.338 units per labor hour.
The direct method of reporting operating cash flows: ________
a. Separately lists cash receipts and payments.
b. Must be used by all companies.
c. Is used by most companies.
d. Is considered supplementary disclosure.
e. Is not recommended by the FASB, but is commonly used.
Answer:
e. Is not recommended by the FASB, but is commonly used.
Explanation:
A statement of cash flows is also known as cash flow statement and it is a financial statement which is used to illustrate how changes in income and various account of the balance sheet affect cash and cash equivalents.
The statement of cash flows is also used by financial experts or accountants to breakdown the cash-flow analysis into;
1. Cash-flow from investing activities: it represents the cash flow from investment such as proceeds from the sale of plant, equipments etc.
2. Cash-flow from financing activities: it represents the cash flow from debt or equity. Typically, it's the costs used in a financing a business.
3. Cash-flow from operating activities: it represents cash-flow and transactions from operational business activities such as employee salary, sales of goods etc.
Generally, the statement of cash flows provides financial information about an organization's operating profitability and how it use its operating cash flow.
Financial accounting standards board (FASB) is a private, non-profit organization saddled with the responsibility of establishing and maintaining financial accounting and reporting standards for general guidance of individuals or capital providers such as investors, issuers and auditors.
In Financial accounting, the direct method of reporting operating cash flows uses actual cash inflows and outflows from the operating activities of a company by generating data from the income statement (cash receipts and cash disbursements/payments).
However, the direct method of reporting operating cash flows is not recommended by the FASB, but it's commonly used.
This ultimately implies that, it's a recommended accounting method, but it's not an accounting standard required by the financial accounting standards board (FASB).
Altex Inc. manufactures two products: car wheels and truck wheels. To determine the amount of overhead to assign to each product line, the controller, Robert Hermann, has developed the following information.
Car Truck
Estimated wheels produced 40,000 10,000
Direct labor hours per wheel 1 3
Total estimated overhead costs for the two product lines are $770,000.
Required:
a. Calculate overhead rate.
b. Compute the overhead cost assigned to the car wheels and truck wheels, assuming that direct labor hours is used to allocate overhead costs.
A) Direct labor hrs for car wheels = estimated wheels *direct labor per wheel
40,000 *1hr = 40,000
Direct labor hrs for Truck
10,000 * 3hr= 30,000
total direct labor hrs 40,000+30,000 = 70,000 hrs
Overhead rate is total est oh cost/ total direct labor hrs
770,000/70,000= 11.00
B) Car truck wheels 40,000*11 =440,000
Truck wheels 10,000*11=110,000
MC Qu. 90 Marks Corporation has two operating... Marks Corporation has two operating departments, Drilling and Grinding, and an office. The three categories of office expenses are allocated to the two departments using different allocation bases. The following information is available for the current period: Office ExpensesTotal Allocation Basis Salaries$44,000 Number of employees Depreciation 21,000 Cost of goods sold Advertising 44,000 Net sales ItemDrilling Grinding Total Number of employees 900 2,100 3,000 Net sales$350,000 $525,000 $875,000 Cost of goods sold$91,200 $148,800 $240,000 The amount of salaries that should be allocated to Grinding for the current period is:
Answer:
$30,800
Explanation:
Amount of salaries to allocated to Grinding = Total salary cost * Number of employees in grinding/Total Number of employees
Amount of salaries to allocated to Grinding = $44,000 * 2,100/3,000
Amount of salaries to allocated to Grinding = $44,000 * 0.7
Amount of salaries to allocated to Grinding = $30,800
So, the amount of salaries that should be allocated to Grinding for the current period is $30,800
Historical demand for a product is: DEMAND January 13 February 12 March 16 April 13 May 17 June 16 a. Using a weighted moving average with weights of 0.50 (June), 0.30 (May), and 0.20 (April), find the July forecast
Answer: 15.7 units
Explanation:
July forecast = (Weight of June * Demand in June) + (Weight of May * Demand in May) + (Weight of April * Demand in April)
= (0.5 * 16) + (0.3 * 17) + (0.2 * 13)
= 8 + 5.1 + 2.6
= 15.7 units
Lennon, Inc. is considering a five-year project that has an initial outlay or cost of $80,000. The respective future cash inflows from its project for years 1, 2, 3, 4 and 5 are: $15,000, $25,000, $35,000, $45,000, and $55,000. Lennon uses the internal rate of return method to evaluate projects. What is Lennon's IRR
Answer:
26.16%
Explanation:
Internal rate of return is the discount rate that equates the after-tax cash flows from an investment to the amount invested
IRR can be determined using a financial calculator
CO = -80,000
C1 = $15,000
C2 = $25,000
C3 = $35,000,
C4 = $45,000
C 5 = 55,000
IRR = 26.16
To determine IRR using a financial calculator:
1. Input the cash flow values by pressing the CF button. After inputting the value, press enter and the arrow facing a downward direction.
2. After inputting all the cash flows, press the IRR button and then press the compute button.
The short-run average total cost (ATC) curve of a firm will tend to be U-shaped because Group of answer choices larger firms always have lower per-unit costs than smaller firms. at low levels of output, AFC will be high, while at high levels of output, MC will be high as the result of diminishing returns. diminishing returns will be present when output is small, and high AFC will push per-unit cost to high levels when output is large. diseconomies of scale will be present at both small and large output rates.
Answer:
at low levels of output, AFC will be high, while at high levels of output, MC will be high as the result of diminishing returns.
Explanation:
In Economics, the law of diminishing marginal utility states that as the unit of a good or service consumed by an individual increases, the additional satisfaction he or she derives from consuming additional units would start decreasing or diminishing as the units of good or service consumed increases.
The short-run average total cost (ATC) curve of a firm will tend to be U-shaped because at low levels of output, average fixed cost (AFC) will be high, while at high levels of output, marginal cost (MC) will be high as the result of diminishing returns.
This ultimately implies that, the average fixed cost (AFC) will be high at small (low-level) output rates while marginal cost (MC) will be high at large (high-level) output rates due to diminishing marginal returns.
As a result of the law of diminishing marginal returns, a business firm would experience some rising per unit costs in the short-run.
In conclusion, an increase in the level of output for a business firm will eventually lead to an increase in average total cost (ATC) and marginal cost (MC) due to the law of diminishing marginal returns.
Assuming a specific single project with normal cash flows and a cost of capital of 10%, which of the following statements will ALWAYS be true?
a. If NPV > 0 at the stated cost of capital (i.e., 10%), then NPV will also be > 0 at a cost of capital of 12%.
b. If NPV > 0, then Profitability Index > 0.
c. If NPV > 0, then Payback Period > 0.
d. If NPV > 0, then a simple sum of the cash inflows of the project will always be greater than the cost of the project (i.e, the year 0 cash flow).
e. If NPV > 0, then IRR > 0.
Answer:
b. If NPV > 0, then Profitability Index > 0.
c. If NPV > 0, then Payback Period > 0.
d. If NPV > 0, then a simple sum of the cash inflows of the project will always be greater than the cost of the project (i.e, the year 0 cash flow).
e. If NPV > 0, then IRR > 0
Explanation:
The net present value shows the net worth of the assets or the project at the discount rate or the cost of capital. In the case when the net present value comes in positive so the internal rate of return should be more than the cost of capital
Also the profitability index lies between -1 and +1 so if the net present value is positive so the profitability should be more than 1
Hence, b to e statements are correct
Lopez Plastics Co. (LPC) issued callable bonds on January 1, 2021. LPC's accountant has projected the following amortization schedule from issuance until maturityLPC issued the bonds:
Date Cash interest Effective interest Decrease in balance Outstanding balance
1/1/2021 $207,020
6/30/2021 $7,000 $6,211 $789 206,230
12/31/2021 7,000 6,187 813 205,417
6/30/2022 7,000 6,163 837 204,580
12/31/2022 7,000 6,137 863 203,717
6/30/2023 7,000 6,112 888 202,829
12/31/2023 7,000 6,085 915 201,913
6/30/2024 7,000 6,057 943 200,971
12/31/2024 7,000 6,029 971 200,000
Required:
What is the annual effective interest rate on the bonds?
Answer:
7%
Explanation:
Calculation to determine the annual effective interest rate on the bonds
Using this formula
Annual Stated interest = Annual cash interest / Face vale of bonds*100
Let plug in the formula
Annual Stated interest =($7000+$7000) / 200000*100
Annual Stated interest=$14,000/20,000
Annual Stated interest=7%
Therefore the annual effective interest rate on the bonds is 7%
Moccasin Company manufactures cotton shirts. 18,000 shirts are produced during the first week of July. The unit quantity standard is 3 meters cloth per shirt and the actual quantity used was 0.50 meters per shirt. Determine the quantity of cloth that should be used for the actual output of 18,000 shirts.
Answer: 54,000 meters
Explanation:
When determining the quantity of cloth t be used in the making of the shirts, it is best to use the standard quantity because this is what the company thinks that it needs to be able to produce a shirt.
Quantity of cloth for 18,000 shirts:
= Number of shirts * standard quantity per shirt
= 18,000 * 3
= 54,000 meters
The net income of a company for the year was $500,000. The company has no preferred stock. Common stockholders' equity was $1,200,000 at the beginning of the year and $2,500,000 at the end of the year. Calculate the rate of return on common stockholders' equity.
Answer:
27.03%
Explanation:
Average common stockholders' equity = (1,200,000+2,500,000) / 2
Average common stockholders' equity = $3,700,000 / 2
Average common stockholders' equity = $1,850,000
Rate of return on common stockholders' equity = Net Income / Average common stockholders' equity
Rate of return on common stockholders' equity = $500,000 / $1,850,000
Rate of return on common stockholders' equity = 0.27027
Rate of return on common stockholders' equity = 27.03%
Flesch Corporation produces and sells two products. In the most recent month, Product C90B had sales of $23,490 and variable expenses of $7,047. Product Y45E had sales of $34,800 and variable expenses of $13,920. The fixed expenses of the entire company were $15,200. If the sales mix were to shift toward Product C90B with total dollar sales remaining constant, the overall break-even point for the entire company:____________
Answer:
Contribution margin ratio = Contribution margin / Sales
Product C90B CMR = ($23,490 - $7,047) / $23,490 = $16,443 / $23,490 = 0.7 = 70%
Product Y45E CMR = ($34,800 - $13,920) / $34,800 = $20,880 / $34,800 = 0.6 = 60%
The rule, the Higher the contribution margin ratio, the lower the Break-Even point. So, if sales mix shifts to product C90B, overall Break-even point Decreases.
On November 1, 2021, Vinfast Co. receives $3,600 cash from FPT Co. for consulting services to be provided evenly over the period November 1, 2021, to April 30, 2022—at which time Vinfast credited $3,600 to Unearned Consulting Fees. The adjusting entry on December 31, 2021 would include a
a. Debit to Unearned Consulting Fees for $1,200
b. Debit to Unearned Consulting Fees for $2,400.
c. Credit to Consulting Fees Earned for $2,400.
d. Debit to Consulting Fees Earned for $1,200.
Answer: A. Debit to Unearned Consulting Fees for $1,200
Explanation:
Following the information given in the question, Vinfast Co. receives $3,600 cash from FPT Co. for consulting services to be provided evenly over the period November 1, 2021, to April 30, 2022.
Since we want to know the adjusting entry on December 31, 2021, a period form November 1, 2021 to December 31, 2021 is a period of two months out of the 6 months period. Therefore, the unearned consultancy fee will be:
= $3600 × 2/6
= $1200
Therefore, there'll be a debit to the unearned consulting Fees for $1,200. Also, there'll be a credit to the consulting fees earned account by $1200.
Ayayai Corp. redeemed $158,000 face value, 12% bonds on April 30, 2022, at 102. The carrying value of the bonds at the redemption date was $142,674. The bonds pay annual interest, and the interest payment due on April 30, 2022, has been made and recorded.
Required:
Prepare the appropriate journal entry for the redemption of the bonds.
Answer and Explanation:
The journal entries are given below:
On 30-Apr
Bond Payable [$158,000] 158,000
Loss on Bond redemption [$161,160 - $142,674] 18,486
Discount on bonds payable 15,326
Cash [$158,000 × 102%] 161,160
[being the redemption of the Bond is recorded]
Here the bond payable and loss is debited as it decreased the assets and increased the losses and credited the cash & discount on bond payable
Calculate the total Social Security and Medicare tax burden on a sole proprietorship earning 2020 profit of $300,000, assuming a single sole proprietor with no other earned income.
Answer: $25,802.70
Explanation:
Social security
Social security rates in 2020 for a single sole proprietor is 12.40% on the first $137,700:
= 12.40% * 300,000
= $17,074.80
Medicare Tax
First you need to remove a deduction of 7.65% from the income:
= 300,000 * (1 - 7.65%)
= $277,050
Medicare tax is 2.90% of this adjusted amount in addition to 0.9% for any amount above $200,000:
= (2.90% * 277,050) + (0.9% * (277,050 - 200,000))
= 8,034.45 + 693.45
= $8,727.90
Total Social security and Medicare:
= 17,074.80 + 8,727.9
= $25,802.70
Why does the government sometimes use an expansionary fiscal policy?
Assume market interest rates have risen substantially in the 5 years since an investor purchased Treasury bonds that were offering a 3% return over their 15-year life. If the investor sells now, he or she is likely to realize a total return that is:__________
A. greater than 6%.
B. less than 6%.
C. equal to 2%.
D. equal to 6%.
Answer: B. less than 6%.
Explanation:
Market interest rates have risen since the investor purchased the treasury bonds which means that the treasury bonds will be less sought after now because they offer a lower return than can be found in the market even if risk adjusted.
The investor will therefore only be able to sell it for a lower price which means that they will receive a lower rate for it. As we cannot say for certain what this rate will be, it is best to say that it will be under 6%.
principal, $3000 × annual interest rate, 5/2% × years,7/2
Answer:
$262.5
Explanation:
p=$3000
R=5/2%
T=7/2 years
hence ,
interest= p×t×r/100
= (3000×5/2×7/2)/100
= (30×35/4)
= (7.5 × 35)
=$262.5
High-Low Method
The manufacturing costs of Ackerman Industries for the first three months of the year follow:
Total Costs Units Produced
January $1,900,000 20,000 units
February 2,250,000 27,000
March 2,400,000 30,000
Using the high-low method, determine (a) the variable cost per unit and (b) the total fixed cost.
a. Variable cost per unit $
b. Total fixed cost $
Answer:
Variable cost per unit= $50
Fixed costs= $900,000
Explanation:
Giving the following information:
Total Costs Units Produced
January $1,900,000 20,000 units
February 2,250,000 27,000
March 2,400,000 30,000
To calculate the unitary variable cost and the fixed cost under the high-low method, we need to use the following formulas:
Variable cost per unit= (Highest activity cost - Lowest activity cost)/ (Highest activity units - Lowest activity units)
Variable cost per unit= (2,400,000 - 1,900,000) / (30,000 - 20,000)
Variable cost per unit= $50
Fixed costs= Highest activity cost - (Variable cost per unit * HAU)
Fixed costs= 2,400,000 - (50*30,000)
Fixed costs= $900,000
Fixed costs= LAC - (Variable cost per unit* LAU)
Fixed costs= 1,900,000 - (50*20,000)
Fixed costs= $900,000
Hamasaki Company owns 30% of CDW Corp. stock and has significant influence. Hamasaki received $6,500 in cash dividends from its investment in CDW. The entry to record receipt of these dividends includes a debit to Cash for $6,500 and a credit to Equity Method Investments for $6,500.
a. True
b. False
Answer:
A. True
Explanation:
Account Title Debit Credit
Cash 6500
Investment in CDW Corp. 6500
Clay Co. produces ceramic coffee mugs and pencil holders. Manufacturing overhead is assigned to production using an application rate based on direct labor hours. Required: a. For 2013, the company's cost accountant estimated that total overhead costs incurred would be $461,100 and that a total of 53,000 direct labor hours would be worked. Calculate the amount of overhead to be applied for each direct labor hour worked on a production run. (Round your answer to 2 decimal places.)
Answer:
Predetermined manufacturing overhead rate= $8.7 per direct labor hour
Explanation:
Giving the following information:
Estimated that total overhead costs= $461,100
Estimated total direct labor hours= 53,000
To calculate the predetermined manufacturing overhead rate we need to use the following formula:
Predetermined manufacturing overhead rate= total estimated overhead costs for the period/ total amount of allocation base
Predetermined manufacturing overhead rate= 461,100 / 53,000
Predetermined manufacturing overhead rate= $8.7 per direct labor hour
Nick sees a commercial for a Brand X clothing company that depicts the wearers of the clothes out having a good time with friends. Although he doesn't particularly need new clothes, the commercial prompts him to buy a Brand X t-shirt. This illustrates a common.......... of advertising.
Answer:
Critique of
Explanation:
Advertising
This simply is used to give notice, pass informations, for notification etc. from a known source and it is delivered through a mass-mediated channel that is set up to persuade the masses.
The 3 main components of successful advertising includes information, reasoning, and emphases.
The critiques of advertising:
There are several critiques of advertising. It includes the fact that the society is wasting resources, companies manipulate people's tastes, it hinders competition because it creates the perception that products are more differentiated than they are, allowing higher assumptions or markups.
The 4 types of advertising criticisms includes the effect, taste, role, and appropriateness.
what is probability/impact matrix
Explanation:
probability and impact metrix is a tool for the project team iad in prioritizing risks.
A retail store had sales of $44,900 in April and $55,000 in May. The store employs eight full-time workers who work a 40-hour week. In April the store also had eight part-time workers at 12 hours per week, and in May the store had eleven part-timers at 17 hours per week (assume four weeks in each month). Using sales dollars as the measure of output, what is the percentage change in productivity (dollars output per labor hour) from April to May
Answer:
0.52%
Explanation:
Productivity in April = $44,900 / (((8*40) + (8*12)) * 4)
Productivity in April = $44,900 / ((320 + 96) * 4)
Productivity in April = $44,900 / (416 * 4)
Productivity in April = $44,900 / 1664 hours
Productivity in April = $26.98 per hour
Productivity in May = $55,000 / (((8*40) + (11*17)) * 4)
Productivity in May = $55,000 / ((320 + 187) * 4)
Productivity in May = $55,000 / (507 * 4)
Productivity in May = $55,000 / 2028 hours
Productivity in May = $27.12 per hour
% increase in productivity per hour = ($27.12 - $26.98) / $26.98
% increase in productivity per hour = $0.14 / $26.98
% increase in productivity per hour = 0.0052
% increase in productivity per hour = 0.52%
Guillermo's Oil and Lube Company is a service company that offers oil changes and lubrication for automobiles and light trucks. On average, Guillermo has found that a typical oil change takes 24 minutes and 6.2 quarts of oil are used. In June, Guillermo's Oil and Lube had 980 oil changes. Guillermo's Oil and Lube Company provided the following information for the production of oil changes during the month of June:
Actual number of oil changes performed: 980
Actual number of direct labor hours worked: 386
Actual rate paid per direct labor hour: $14.50
Standard rate per direct labor hour: $14.00
Required:
a. Calculate total direct labor variance for oil changes in June?
b. Calculate The Direct Labor Rate Variance (LRV) and Direct Labor efficiency variance (LEV)
Answer:
that hurts my brain when I try to think of the answer
Marconi Co. has the following information available for the current year:
Net Sales (all on credit) $1,125,000
Bad Debt Expense 90,000
Accounts Receivable, Beginning of Year 180,000
Accounts Receivable, End of Year 82,500
Allowance For Doubtful Accounts, Beginning of Year 57,000
Allowance For Doubtful Accounts, End of Year 77,000
Required:
What was the amount of write-offs during the year?
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A fire destroyed a large percentage of the financial records of Carter Health System. You have the task of piecing together information to prepare a financial report. You find the profit margin to be 5.4 percent. If sales were $4 million on total assets of $2 million, and the amount of debt financing was $800,000, what was Carter's return on equity (ROE)?
a. 21.6%.
b. 25.8%.
c. 13.8%.
d. 18.0%.
e. 19.2%.
Answer:
d. 18.0%
Explanation:
Calculation to determine what was Carter's return on equity (ROE)?
First step is to calculate the Net income
Net income = sales * profit margin
Net income= 4 million * 5.4%
Net income= 216000
Second step is calculate the Equity
Equity = total assets - debt
Equity= 2000000 - 800000
Equity= 1200000
Now let determine the ROE
ROE = Net income/Equity
ROE= 216000/1200000
ROE= 18%
Therefore Carter's return on equity (ROE) is 18%
A firm sells two products, Regular and Ultra. For every unit of Regular sold, two units of Ultra are sold. The firm's total fixed costs are $1,782,000. Selling prices and cost information for both products follow. The contribution margin per composite unit is:
Answer:
Total Contribution = $52
Explanation:
Given:
Fixed cost = $1,782,000
Product Sales price VC per unit
Regular $20 $8
Ultra $24 $4
Computation:
Contribution = Sales - VC
Contribution on regular product = 20 - 8 = $12
Contribution on ultra product = 24 - 4 = $20
Total Contribution = (1 x 12) + (2 x 20)
Total Contribution = 12 + 40
Total Contribution = $52
Q.1.1
If the Owners Equity of a certain business is equal to R70 000 and the assets of the
same business are equal to R120 000, what would the total liabilities of the
business be?
(a) 50 000
(b)
190 000;
(c)
70 000;
(d)
120 000
Answer:
The answer of this question is (B)190000
