Answer:
Jan 01
Dr Copyright $418,000
Cr Cash $418,000
Dec 31
Dr Amortization expense—Copyright $41,800
Cr Accumulated amortization—Copyright $41,800
Explanation:
Preparation of entries to record the purchase of the copyright on January 1 and its annual amortization on December 31.
Jan 01
Dr Copyright $418,000
Cr Cash $418,000
(To record purchase of copyright )
Dec 31
Dr Amortization expense—Copyright $41,800
Cr Accumulated amortization—Copyright $41,800
($418,000/10 years)
(To record amortization expense of copyright )
MC Qu. 59 A company's flexible budget for... A company's flexible budget for 16,000 units of production showed sales, $96,000; variable costs, $56,000; and fixed costs, $20,000. The sales expected if the company produces and sells 20,000 units is (Do not round intermediate calculations):
Answer: $120,000
Explanation:
First find the selling price of the units.
= Sales / Number of units produced
= 96,000 / 16,000
= $6 per unit
If 20,000 units are sold, the sales would be:
= Number of units sold * selling price
= 20,000 * 6
= $120,000
As of December 31, Drake Inc. reported the following (in millions): Current AssetsLong-term AssetsCurrent LiabilitiesTotal Liabilities $31,967$42,737$26,132$61,491 What amount did Drake Inc. report as equity on December 31
Answer:
$13,213
Explanation:
The computation of the equity is shown below:
As we know that
Total assets = total liabilities + total stockholder equity
here
Totalassets be
= $31,967 + $42,737
= $74,707
ANd, the total liabilities is $61,491
So, the equity should be
= $74,707 - $61,491
= $13,213
The double-declining-balance rate for calculating depreciation expense is determined by doubling the straight-line rate. Assuming that an asset has a useful life of 25 years, determine the rate to be used if using the double-declining-balance method
Answer:
the depreciation rate in cash when the double-declining method should be used is 8%
Explanation:
The computation of the depreciation rate in cash when the double-declining method should be used is given below:
= 1 ÷ useful life × 2
= 1 ÷ 25 × 2
= 0.08
= 8%
Hence, the depreciation rate in cash when the double-declining method should be used is 8%
The same should be relevant and considered too
The fixed costs of the division were $193,000. If the mountain bike division is dropped, 30% of the fixed costs allocated to that division could be eliminated. The impact on operating income for eliminating this business segment would be:
Answer:
decrease in the operating income of $132,100
Explanation:
The computation of the impact on the operating income should be given below:
Sales $1,050,000
less: variable cost -$860,000
contribution margin $190,000
Less fixed cost (30% of $193,000) -$57,900
Impact on operating income $132,100
So there is a decrease in the operating income of $132,100
At the beginning of last year an investor purchased ABC Corporation at $100 per share. During the year, the firm made a 4 for 1 split, and then paid dividends of $1.50 per share. At the end of the year, the investor sold the shares at $26 per share. What is the rate of return?
Answer:
10%
Explanation:
Cost of investment = $100
Total dividend = 4 for 1 split = 4*$1.5 = $6.00
Total sales proceed = $26*4 = $104
Total return = [(Sale price + Dividend - Cost of purchase) / Cost of purchase] * 100
Total return = ($104 + $6 - $100) / 100
Total return = 10 / 100
Total return = 0.10
Total return = 10%
So, the rate of return is 10%
Assume that there are four consumers A, B, C, and D, and the prices that each of them is willing to pay for a glass of lemonade is, respectively, $1.50, $1.20, $1.00, and $0.90. If the actual price of lemonade is $1.00 per glass, then consumer surplus in this market will be:
a. $0.80
b. $0.70
c. $0.50
e. $0.60
Cameron is single and has taxable income of $58,046.
Required:
Determine his tax liability using the Tax Tables and using the Tax Rate Schedules.
Answer:
Cameron
Cameron's tax liability for the year as a single taxpayer is
= $12,770.12.
Explanation:
a) Data and Calculations:
Taxable income = $58,046
Tax rate = 22%
Tax liability = $12,770.12 ($58,046 * 22%)
b) The amount of tax that Cameron, who is within the 22% tax rate bracket, will pay to the IRS is $12,770.12. The tax liability represents the amount of tax that is due to be paid for his taxable income of $58,046 at the tax rate of 22%.
An investor is holding a stock which has been volatile with returns significantly year-over-year. The initial investment was $1,000 in stock ABC, and it returned the following: Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Return 10% -15% 20% 22% -30% 40% What is the geometric returns of Stock ABC for six years
Answer:
the geometric returns of Stock ABC for six years is 5.02%
Explanation:
The computation of the geometric returns of Stock ABC for six years is given below:
= [(1 + r1) × (1 + r2) × (1 + r3) × (1 + r4) × (1 + r5) × (1 + r6)]^1 ÷ 6 - 1
= [(1 + 0.10) × (1 - 0.15) × (1 + 0.20) × (1 + 0.22) × (1 - 0.30) × (1 + 0.40)]^(1 ÷ 6) - 1
= 0.0502 or 5.02%
Hence, the geometric returns of Stock ABC for six years is 5.02%
The above formula should be applied
Precision Corporation used a predetermined overhead rate last year of $3 per direct labor-hour, based on an estimate of 24,000 direct labor-hours to be worked during the year. Actual costs and activity during the year were: Actual manufacturing overhead cost incurred $84,000 Actual direct labor-hours worked 27,000 The overapplied or underapplied manufacturing overhead for the year was:
Answer:
$12,000 Overhead Underapplied
Explanation:
Calculation to determine what The overapplied or underapplied manufacturing overhead for the year was:
Total pre-determined manufacturing overhead $72,000
($3*24,000)
Less Actual manufacturing overhead cost incurred ($84,000)
Overhead Underapplied $12,000
Therefore The overapplied or underapplied manufacturing overhead for the year was:$12,000 Overhead Underapplied
The Auto Division of Big Department Store had a net operating income of $560,000, a net asset base of $4,000,000, and a required rate of return of 12%. Sales for the period totaled $3,000,000. The residual income for the period is: a.$360,000. b.$80,000. c.$120,000. d.$480,000.
Answer:
b.$80,000
Explanation:
The computation of the residual income is given below;
= net operating income - (required rate of return of net asset base)
= 560,000 - (4,000,000×12%)
= $80,000
hence, the residual income is $80,000
Therefore the option b is correct
The same is relevant and considered too
Franklin is a research scientist at Insight Research Corporation (IRC). IRC has five research scientists, four assistants, one secretary, and one CEO. Franklin has developed ALS, a disease which binds him to a wheelchair. He is one of the greatest scientists in the world, and can still do his job. Franklin has requested that IRC accommodate his disability, making changes to the company restroom and widening the doors to the building. The changes would be relatively inexpensive, costing only $2,000. If Franklin sues under the Americans with Disabilities Act (ADA), what result
If Franklin sues under the Americans with Disabilities Act (ADA), Franklin will win and this will force IRC to accommodate his disability under this civil rights legislation.
The ADA law was passed to protect persons experiencing physical or mental impairment or disability against workplace discriminations.
While ALS is recognized as a progressive nervous system disease that surely affects Franklin's nerve cells in his brain and spinal cord, which has caused him to lose muscle control, he can still perform his duties as a research scientist at IRC.
Thus, Insight Research Corporation should accommodate Franklin and make the necessary changes, which have been determined to be relatively inexpensive to the company.
Thus, if IRC fails to accommodate Franklin and he sues the company in the court under ADA, he will prevail.
Learn more about Americans with Disabilities Act here: https://brainly.com/question/15650848
You are considering an investment project with an internal rate of return of 8.7 percent, a net present value of $393, and a payback period of 2.44 years. Which one of the following is correct given this information?
A. The discount rate used to compute the net present value is equal to the Internal rate of return.
B. The discounted payback period will be less than 2.44 years.
C. The required payback period must be greater than 2.44 years.
D. The discount rate used in computing the net present value was less than 8.7 percent.
E. This project should be rejected based on the net present value.
Answer:
Hence the correct option is d) The discount rate used in computing the net present value was less than 8.7 percent.
Explanation:
As the discount rate increases, the present value decreases, and also at IRR the present value is zero, thus the answer is:-
d) The discount rate used in computing the net present value was less than 8.7 percent
Answer:
D). The discount rate used in computing the net present value was less than 8.7 percent.
Explanation:
'Net Present Value' is described as the 'difference that exists between existing values of cash inflows, as well as, cash outflows for a particular time period.' This assists in evaluating the profitability of an investment and make worthy decisions regarding investment.
As per the details provided, the discount rate considered for estimating the Net Present Value of the investment had been lesser than 8.7% which shows that the Net Present Value in positive i.e. $ 393. However, the investment project is not beneficial at all rather it may cause losses because the required return rate is 9.5% which is actually lesser and therefore, the project would prove incompetent and it must be rejected at once. Thus, option D is the correct answer.
The vice president of operations of Free Ride Bike Company is evaluating the performance of two divisions organized as investment centers. Invested assets and condensed income statement data for the past year for each division are as follows: Road Bike Division Mountain Bike Division Sales $1,728,000 $1,760,000 Cost of goods sold 1,380,000 1,400,000 Operating expenses 175,200 236,800 Invested assets 1,440,000 800,000 Required: 1. Prepare condensed divisional income statements for the year ended December 31, 20Y7, assuming that there were no support department allocations.
Answer:
Road Bike Division Mountain Bike Division
Net Income $172,800 $123,200
Explanation:
Preparation condensed divisional income statements for the year ended December 31, 20Y7, assuming that there were no support department allocations.
Road Bike Division Mountain Bike Division
Sales $1,728,000 $1,760,000
Less Cost of goods sold 1,380,000 1,400,000
Gross profit $348,000 $360,000
Less Operating expenses 175,200 236,800
Net Income $172,800 $123,200
Therefore condensed divisional income statements for the year ended December 31, 20Y7, assuming that there were no support department allocations will be:
Road Bike Division Mountain Bike Division
Net Income $172,800 $123,200
Gullett Corporation had $37,000 of raw materials on hand on November 1. During the month, the Corporation purchased an additional $86,000 of raw materials. The journal entry to record the purchase of raw materials would include a:
Answer: See explanation
Explanation:
The journal entry to record the purchase of raw materials is analysed below:
November:
Dr Raw materials $86000
Cr Cash or account payable $86000
It should be noted that as the raw material is increasing, the raw material account will be debited while as the cash or account payable I decreasing, it is credited.
Consider the following opportunities. Opportunity 1 requires a $4,000 cash payment now (Year 0) but will result in $14,000 cash received in Year 5. Opportunity 2 requires no cash outlay and results in $3,500 cash received in Year 3 and Year 5.
Required:
Use a 6 percent discount rate and determine whether Opportunity 1 or Opportunity 2 results in a greater NPV.
Answer:
Opportunity 1 results in a greater NPV.
Explanation:
NPV of Opportunity 1 = (Cash received in Year 5 / (100% + Discount rate)^Number of years) - Cash payment now = ($14,000 / (100% + 6%)^5) - $4,000 = $10,461.61 - $4,000 = $6,461.61
NPV of Opportunity 2 = (Cash received in Year 3 / (100% + Discount rate)^Number of years) + (Cash received in Year 5 / (100% + Discount rate)^Number of years) = ($3,500 / (100% + 6%)^3) + ($3,500 / (100% + 6%)^5) = $2,938.67 + $2,615.40 = $5,554.07
Since NPV of Opportunity 1 which is $6,461.61 is greater than NPV of Opportunity 2 which is $5,554.07, this implies that Opportunity 1 results in a greater NPV.
Zhang Industries is preparing a cash budget for June. The company has $25,000 cash at the beginning of June and anticipates $95,000 in cash receipts and $111,290 in cash disbursements during June. The company has no loans outstanding on June 1. Compute the amount the company must borrow, if any, to maintain a $20,000 cash balance. Multiple Choice $11,290. $28,710. $12,290. $6,290. $16,290.
Answer:
$11,290
Explanation:
The computation of the amount that should be borrowed is given below:
Opening cash balance $25,000.00
Add Cash Receipts 95,000.00
Less Cash Disbursements (111,290.00)
Balance before adjustment 8,710.00
Desired ending cash balance 20,000.00
Amount to be borrowed 11,290.00
Hence, the first option is correct
If you are interested in working for a specific company, what type of job site should you look at for opening?
a. Geographic specific site
b. Industry specific site
C. Company site
d. General job site
Please select the best answer from the choices provided
A
B
0 0 0 0
C
D
Save and Exit
Next
Submit
retum
Answer:
c
Explanation:
if you got to the company site and go under careers, it will show you the jobs with descriptions they have available
If the government changed the per-unit tax from $5.00 to $2.50, then the price paid by buyers would be $7.50, the price received by sellers would be $5, and the quantity sold in the market would be 1.5 units. Compared to the original tax rate, this lower tax rate would
Answer: Decrease government revenue and decrease deadweight loss from the tax.
Explanation:
Decrease gov rev and decrease deadweight loss from the tax.
At AB, the government revenue will be:
= Quantity × Tax rate
= 1 × 5
= 5
The deadweight loss will be:
Deadweight Loss= 0.5 × Change in quantity × Change in Price
= 0.5 × (9-4) × (2-1)
= 0.5 × 5 × 1
= 2.5
At CD,
the government revenue will be:
= 1.5 × 2.5
= 3.75
The deadweight loss will be:
= 0.5 × (7.5-5) × (2-1.5)
= 0.5 × 2.5 × 0.5
= 0.625
Based on the calculation above, both the government revenue and the deadweight loss decreases.
When there are batch-level or product-level costs, in comparison to a traditional cost system, an activity-based costing system ordinarily will shift costs from: a. high-volume to low-volume products. b. low-volume to high-volume products. c. specialized to standardized products. d. standardized to specialized products.
Answer: A. high-volume to low-volume products
Explanation:
Batch-level costs refers to the expenses that are related to the group of products which cannot be traced back to an individual item. The cost of production are incurred for the production of a batch.
Activity-based costing refers to the method whereby overhead and indirect costs are assigned to the products and services.
When there are batch-level or product-level costs, in comparison to a traditional cost system, an activity-based costing system ordinarily will shift costs from a high-volume to low-volume products.
Blue Manufacturing produces lathes at an inventory cost of $25,000 each that sell for $32,000 each. For credit-approved customers, Blue leases the lathes for $8,500 per year for five years. The lathes are guaranteed to last four years and generally have a six-year life. Collection is predictable and reasonably assured. Additionally, the lessor is aware of all costs to be incurred under the lease that will not be reimbursed by the lessor. What is the financing profit of Blue Manufacturing on a leased lathe
Answer:
The right solution is "$10,500".
Explanation:
Given values are:
Inventory cost,
= $25,000
Selling cost,
= $32,000
The financing profit will be:
= [tex]Lease\ payment - Selling\ price[/tex]
= [tex](8500\times 5) - 32000[/tex]
= [tex]42500 - 32000[/tex]
= [tex]10,500[/tex] ($)
Vihaan Chemicals Company processes a number of chemical compounds used in disinfecting health club fitness equipment. One compound is decomposed into two chemicals: flexalene and soreaphine. The cost of processing one batch of compound is $75,000, and the result is 6,400 gallons of flexalene and 8,000 gallons of soreaphine. Vihaan Chemicals can sell the flexalene at split-off for $12.00 per gallon and the soreaphine for $6.15 per gallon. Alternatively, the flexalene can be processed further at a cost of $8.40 per gallon (of flexalene) into lactine. It takes 2 gallons of flexalene for every gallon of lactine. A gallon of lactine sells for $63.
Required: 1. Which alternative is more cost effective and by how much? NOTE: DO NOT round interim calculations and, if required, round your answer to the nearest dollar. by $ 2. What if the production of flexalene into lactine required additional purchasing and quality inspection activity? Every 550 gallons of flexalene that undergo further processing require 22 more purchase orders at $10 each and 18 more quality inspection hours at $26 each. Which alternative would be better and by how much? NOTE: Round interim calculations and your final answer to the nearest cent. by $_______.
Answer:
Vihaan Chemicals Company
1. The more cost-effective alternative is to process Flexalene further into Lactine. The gain for further processing is $71,040.
2. The better alternative is to process Flexalene further into Lactine. The gain for further processing is now $63,034.
Explanation:
a) Data and Calculations:
Cost of processing one batch of compound = $75,000
Result of processing the compound:
Flexalene Soreaphine
Gallons processed 6,400 8,000
Split-off selling price per unit $12.00 $6.15
Further processing cost per gal. $8.40
Selling price of Lactine = $63 per gallon
Sales revenue from Sale of Flexalene at split-off = $76,800
Net Sales revenue from Sale of Lactine after further processing of Flexalene = $147,840 ($63 * 6,400/2) - ($8.40 * 6,400)
Gain from further processing of Flexalene into Lactine = $71,040 ($147,840 - $76,800)
2. Additional costs for further processing:
Purchasing order cost = $2,560 (6,400/550 * 22 * $10)
Quality inspection cost = $5,446 (6,400/550 * 18 * $26)
Total additional costs = $8,006
Gain from further processing of Flexalene into Lactine = $63,034 ($147,840 - $76,800 - $8,006)
Construct an amortization schedule for the first three months and the final three months of payments for a 30-year, 7 percent mortgage in the amount of $90,000. What percentage of the third payment is principal
Answer:
a. First three months and final three months of payments:
Monthly Amortization Schedule
Beginning Balance Interest Principal Ending Balance
1 $90,000.00 $525.00 $73.77 $89,926.23
2 $89,926.23 $524.57 $74.20 $89,852.03
3 $89,852.03 $524.14 $74.63 $89,777.39
358 $1,775.56 $10.36 $588.41 $1,187.15
359 $1,187.15 $6.93 $591.84 $595.30
360 $595.30 $3.47 $595.30 $0.00
b. The percentage of the third payment that is principal is 12.46% ($74.63/$598.77 * 100)
Explanation:
a) Data and Calculations:
Mortgage loan = $90,000
Interest rate = 7%
Period of mortgage = 30 years
Repayment = monthly
Monthly Pay: $598.77
Total number of payments = 360
Loan Payments = $215,558.01
Total Interest = $125,558.01
Sunland Company reports the following operating results for the month of August: sales $382,500 (units 5,100), variable costs $259,000, and fixed costs $99,000. Management is considering the following independent courses of action to increase net income.
1. Increase selling price by 12% with no change in total variable costs or units sold.
2. Reduce variable costs to 65% of sales.
a. Compute the net income to be earned under each alternative.
b. Which course of action will produce the higher net income?
Answer:
Sunland Company
Alternative 1 Alternative 2
a. Net income $70,400 $34,875
b. Alternative 1 (increasing selling price by 12% with no change in total variable costs or units sold) produces the higher net income.
Explanation:
a) Data and Calculations:
August sales = $382,500
Sales units = 5,100
Unit selling price = $75 ($382,500/5,100)
Variable costs = $259,000
Unit variable cost = $50.78 ($259,000/5,100)
Fixed costs = $99,000
Increase in selling price = 12% = $84 ($75 * 1.12)
Reduction in variable costs = 65% of sales
Alternative 1 Alternative 2
Sales revenue $428,400 $382,500
Variable costs 259,000 248,625
Contribution margin $169,400 $133,875
Fixed costs 99,000 99,000
Net operating income $70,400 $34,875
The following is an account for a production department, showing its costs for one month: Work in Process Inventory Beginning Balance5,400Completed and transferred out49,410 Direct materials21,600 Direct labor16,200 Overhead10,800 Ending Balance4,590 Assume that materials are added at the beginning of the production process and that direct labor and overhead are applied uniformly. If the started and completed units cost $41,850, what was the cost of completing the units in the beginning Work in Process inventory
Answer:
$2,160
Explanation:
Total costs = Beginning Balance + Direct materials + Direct labor+ Overhead
Total costs = $5,400 + $21,600 + 16,200 + $10,800
Total costs = $54,000
Total transferred out = Total costs - Ending Balance
Total transferred out = $54,000 - $4,590
Total transferred out = $49,410
BGIP transferred out = Total transferred out - Assumed started and completed units cost
BGIP transferred out = $49,410 - $41,850
BGIP transferred out = $7,560
Cost to complete BGIP = BGIP transferred out - Beginning Balance
Cost to complete BGIP = $7,560 - $5,400
Cost to complete BGIP = $2,160
An owner lists her home at a 7% commission rate and wants to net $45,000 after paying the mortgage balance of $68,000 and the broker's commission. To the nearest dollar, what should the selling price be to net her $45,000
Answer: $121505
Explanation:
Let the selling price be represented by x.
Then the broker's commission will be:
= 7% of x = 0.07 × x = 0.07x
Based on the information given,
Selling price - (Mortgage balance + Broker's commission) = $45000
Therefore, x - ($68000 + 0.07x) = $45000
x - $68000 - 0.07x = $45000
x - 0.07x = $45000 + $68000
0.93x = $113000
x = $113000/0.93
x = $121505
Therefore, the selling price is $121505
a deli sells 720 sandwiches per day at $6 each. (a) a market survey shows that for every $0.10 reduction in price, 40 more sandwiches could be sold. how much should the deli harge in order to maximize revenue
Answer:
To maximize profits, the deli should charge each sandwich at $ 3.9.
Explanation:
Given that a deli sells 720 sandwiches per day at $ 6 each, and a market survey shows that for every $ 0.10 reduction in price, 40 more sandwiches could be sold, to determine how much should the deli harge in order to maximize revenue, the following should be done calculation:
720 x 6 = 4320
760 x 5.9 = 4484
800 x 5.8 = 4640
840 x 5.7 = 4788
880 x 5.6 = 4928
920 x 5.5 = 5060
960 x 5.4 = 5184
1000 x 5.3 = 5300
1040 x 5.2 = 5408
1080 x 5.1 = 5508
1120 x 5 = 5600
1160 x 4.9 = 5684
1360 x 4.4 = 5984
1400 x 4.3 = 6020
1600 x 3.8 = 6080
1560 x 3.9 = 6084
1520 x 4 = 6080
Therefore, to maximize profits, the deli should charge each sandwich at $ 3.9.
If the reserve ratio is 8 percent, then an additional $1,000 of reserves can increase the money supply by as much as
a. $6,400.
b. $8,000.
c. $20,000.
d. $12,500.
Answer:
d. $12,500
Explanation:
Calculation to determine what an additional reserves can increase the money supply by
Using this formula
Increase in Money supply=1/Reserve ratio*Additional Reserves
Let plug in the formula
Increase in Money supply=1/.08* 1,000
Increase in Money supply=$12,500
Therefore an additional reserves can increase the money supply by $12,500
Unearned Revenue: The company collected $24,000 rent in advance on September 1,
debiting Cash and crediting Unearned Rent Revenue. The tenant was paying 12
months' rent in advance and occupancy began September 1. Answer the four questions
below as of 12/31. Whenever you see the word "unearned," it always indicates a liability
account. Most liability accounts include the word "payable," as those liabilities will be
paid back. An unearned account is a liability that will be worked off, rather than paid
off.
1. The beginning balance of Unearned Revenue: (5 pts)
Answer:
Time period from September 1 - December 31 is 4 months and this means that the tenant has occupied the place for 4 months. Hence, 4 months rent would be accrued.
12 Month rent amount = $24,000
Per month rent amount = $240,00/12 month = $2,000
So, Rent for 4 months = 4 month * $2,000 = $8,000
Adjusting Entry
Date Account titles Debit Credit
Dec 31 Unearned Rent Revenue $8,000
Rent Revenue $8,000
Brian lives in San Francisco and runs a business that sells guitars. In an average year, he receives $704,000 from selling guitars. Of this sales revenue, he must pay the manufacturer a wholesale cost of $404,000; he also pays wages and utility bills totaling $286,000. He owns his showroom; if he chooses to rent it out, he will receive $3,000 in rent per year. Assume that the value of this showroom does not depreciate over the year. Also, if Brian does not operate this guitar business, he can work as an accountant, receive an annual salary of $20,000 with no additional monetary costs, and rent out his showroom at the $3,000 per year rate. No other costs are incurred in running this guitar business.
Identify each of Jake's costs in the following table as either an implicit cost or an explicit cost of selling guitars.
Implicit Cost Explicit Cost
The wholesale cost for the guitars that Charles pays
the manufacturer.
The wages and utility bills that Charles pays.
The salary Charles could earn if he worked as an accountant.
The rental income Charles could receive if he chose to rent
out his showroom .
Complete the following table by determining Jake's accounting and economic profit of his guitar business.
Profit (Dollars)
Accounting Profit
Economic Profit
If Jake's goal is to maximize his economic profit, he___stay in the guitar business because the economic profit he would earn as an accountant would be___.
Answer:
The wholesale cost for the guitars that Charles pays the manufacturer - Explicit Cost
The wages and utility bills that Charles pays. - Explicit Cost
The salary Charles could earn if he worked as an accountant. - Implicit Cost
The rental income Charles could receive if he chose to rent
out his showroom - Implicit Cost
$14000
$-9000
should not
$6,000
Explanation:
Accounting profit= total revenue - explicit cost
Total revenue =price x quantity sold
Explicit cost includes the amount expended in running the business.
They include rent , salary and cost of raw materials
$704,000 - ($404,000 + $286,000) = $14000
Economic profit = accounting profit - implicit cost
Implicit cost is the cost of the next best option forgone when one alternative is chosen over other alternatives.
Implicit costs = 20,000 + 3000 = 23,000
14,000 - 23,000 = -9000
The following balance sheet accounts (in millions of dol- lars) have been taken from the annual report for a U.S. bank. Arrange the accounts in balance sheet order and determine the value of total assets. Based on the balance sheet structure, would you classify this bank as a community bank, regional bank, or a money center bank?
Premises $1,078
Savings deposits 3,292
Cash 2,660
NOW accounts 12,816
Long-term debt 1,191
Other assets 1,633
Other time deposits 2,333
Net loans $29,981
Short-term borrowing 2,080
Other liabilities 778
Equity 3,272
Investment securities 6,092
Demand deposits 5,939
Certificates of deposit
(under $100,000) 9,853
Federal funds sold 110
The bank should be treated as a community bank.
The computation is as follows:
Total Assets = Premises+ Cash + Other assets + Net Loans + Investment securities + Federal funds sold
= $1,078 + $2,660 + $1,633 + $29,981 + $6,092 + $110
= $41,554 in Millions
Since the bank is a small regional bank that contains total assets of $41.5 billion so if this is the $41.5 million so it should be treated as the community bank.
Therefore we can conclude that the bank should be treated as a community bank.
Learn more about the asset here: brainly.com/question/13848560
