Answer:
A. income statement for Sorensen Manufacturing Company.
Sales $234,700
Less Cost of Sales
Opening Finished Goods Inventory 0
Cost of Manufacture $131,300
Less Finished Goods Inventory (131,300 - 104,400) ($26,900) ($104,400)
Gross Profit $130,300
Less Expenses
Selling Expense ($60,000)
Administrative Expense ($26,400)
Net Income / (loss) $43,900
B. inventory balances at the end of the first month
Work In Process Inventory = $41,500
Raw Materials Inventory = $11,200
Finished Goods Inventory = $26,900
Explanation:
Calculation of Work in Process Inventory
Direct Materials $37,600
Direct Labor $56,100
Factory Overhead $79,100
Total Cost of Manufacture $172,800
Less Closing Work in Process ($41,500)
Cost of Manufacture $131,300
Calculation of Raw Materials Inventory
Opening Raw Materials Inventory $0
Add Purchases $48,800
Less Raw Materials Unsed In Manufacturing ($37,600)
Closing Raw Materials Inventory $11,200
Calculation of Finished Goods Inventory
Opening Stock of Finished Goods $0
Add Costs of Goods Manufactured $131,300
Less Cost of Goods Sold ($104,400)
Opening Stock of Finished Goods $26,900
Panamint Systems Corporation is estimating activity costs associated with producing disk drives, tapes drives, and wire drives. The indirect labor can be traced to four separate activity pools. The budgeted activity cost and activity base data by product are provided below.
Activity Cost Activity Base
Procurement $383,000 Number of purchase orders
Scheduling 211,000 Number of production orders
Materials handling 425,500 Number of moves
Product development 710,900 Number of engineering changes
Production 1,420,000 Machine hours
Number of Purchase Orders Number of Production Orders Number of Moves Number of Engineering Changes Machine Hours Number of Units
Disk drives 4,200 450 1,260 11 2,500 2,100
Tape drives 1,600 125 500 6 8,000 4,200
Wire drives 12,200 800 4,200 20 11,100 2,500
The activity-based cost for each disk drive unit is:_________
Answer:
$297.18
Explanation:
The computation of the activity based cost for each disk drive unit is shown below:
Particulars Disk drive
Procurement = $89,366.67
{$383,000 × 4,200 ÷ (4,200 + 1,600 + 12,200)}
Scheduling = $69,054.55
{$211,000 × 450 ÷ (450 + 125 + 800}}
Material handling = $89,954.70
{$425,500 × 1,260 ÷ (1,260 + 500 + 4,200)}
Product development = $211,348.65
{$710,900 × 11 ÷ (11 + 6 + 20)
Production = $164,351.85
{$1,420,000 × 2,500 ÷ (2,500 + 8,000 + 11,100)}
Total $624,076.42
Divided by Disk drive Unit 2,100
Activity based cost for
each disk drive unit is $297.18
Stoneheart Group is expected to pay a dividend of $3.17 next year. The company's dividend growth rate is expected to be 3.9 percent indefinitely and investors require a return of 11.7 percent on the company's stock. What is the stock price?
Answer:
The price of the stock= 40.64
Explanation:
According to the dividend growth model, the price of a stock is the present value of expected dividend discounted at the required rate of return.
This is done as follows:
Price of a stock = D×(1+r)/(r-g)
D(1+g) - Dividend for next year = 3.17
g- growth rate - 3.9%
r- required rate of return - 11.7%
P = 3.17/(0.117- 0.039)=40.641
The price of the stock= 40.64
On October 30, 2019, Sanchez Company acquired a piece of machinery and signed a 12-month note for $24,000. The face value of the note includes the price of the machinery and interest. The note is to be paid in four $6,000 quarterly installments. The value of the machinery is the present value of the four quarterly payments discounted at an annual interest rate of 16%. Required: 1. Prepare all the journal entries required to record the preceding information including the year-end adjusting entry and any payments. Present value techniques should be used. 2. Show how the preceding items would be reported on the December 31, 2019, balance sheet.
Answer:
the present value of the note payable:
PV = payment x {1 - [1 / (1 + r)ⁿ]} / r
payment = $6,000
r = 16% / 4 = 4%
n = 4
PV = $6,000 x {1 - [1 / (1 + 0.04)⁴]} / 0.04 = $21,779.37 ≈ $21,779
October 30, 2019, machinery purchased
Dr Machinery 21,779
Dr Discount on notes payable 2,221
Cr Notes payable 24,000
Using the straight amortization method, the interest expense will be $555.25 per payment.
December 31, 2019, accrued interest on notes payable
Dr Interest expense 370
Cr Interest payable 370
January 31, 2020
Dr Interest payable 370
Dr Interest expense 185.25
Dr Note payable 6,000
Cr Discount on notes payable 555.25
Cr Cash 6,000
April 30, 2020
Dr Interest expense 555.25
Dr Note payable 6,000
Cr Discount on notes payable 555.25
Cr Cash 6,000
July 31, 2020
Dr Interest expense 555.25
Dr Note payable 6,000
Cr Discount on notes payable 555.25
Cr Cash 6,000
October 31, 2020
Dr Interest expense 555.25
Dr Note payable 6,000
Cr Discount on notes payable 555.25
Cr Cash 6,000
On the December 31, 2019 balance sheet, the accounts should show:
Assets:
Machinery $21,779
Liabilities:
Note payable 24,000
Discount on notes payable ($2,221)
Interest payable $370
Retained earnings ($370)
Mallory Furniture buys two products for resale: big shelves (B) and medium shelves (M). Each big shelf costs $500 and requires 100 cubic feet of storage space, and each medium shelf costs $300 and requires 90 cubic feet of storage space. The company has $75,000 to invest in shelves this week, and the warehouse has 18,000 cubic feet available for storage. Profit for each big shelf is $300 and for each medium shelf is $150. a) Which of the following is not a feasible purchase combination? A) 0 big shelves and 200 medium shelves B) 0 big shelves and 0 medium shelves C) 150 big shelves and 0 medium shelves D) 100 big shelves and 100 medium shelves
Answer:
The answer is D
Explanation:
Solution:
Recall that:
Malloy Furniture purchases two products: Big shelves B and Medium shelves M
The cost of big shelf is =$500
The space required = 100 cubic feet
The cost of each medium shelf is =$300
Storage space = 90 cubic feet,
Now,
Since the values 100 and 90 is greater than 18000 cubic feet available for storage, what is required would be 100 big shelves and 100 medium shelves
A Record transactions, post to the Cash T-account, and prepare the statement of cash flows (LO4-7) [The following information applies to the questions displayed below.] Rocky owns and operates Balboa's Gym located in Philadelphia. The following transactions occur for the month of October: 1. October 2 Receive membership dues for the month of October totaling $8,500. 2. October 5 Issue common stock in exchange for cash, $12,000. 3. October 9 Purchase additional boxing equipment for $9,600, paying one-half of the amount in cash and issuing a note payable to the seller for the other one-half due by the end of the year. 4. October 12 Pay $1,500 for advertising regarding a special membership rate available during the month of October. 5. October 19 Pay dividends to stockholders, $4,400. 6. October 22 Pay liability insurance to cover accidents to members for the next six months, starting November 1, $6,900. 7. October 25 Receive cash in advance for November memberships, $5,600. 8. October 30 Receive, but do not pay, utilities bill for the month, $5,200. 9. October 31 Pay employees' salaries for the month, $7,300.
Answer:
1. October 2 Receive membership dues for the month of October totaling $8,500.
Dr Cash 8,500
Cr Service revenue 8,500
2. October 5 Issue common stock in exchange for cash, $12,000.
Dr Cash 12,000
Cr Common stock 12,000
3. October 9 Purchase additional boxing equipment for $9,600, paying one-half of the amount in cash and issuing a note payable to the seller for the other one-half due by the end of the year.
Dr Equipment 9,600
Cr Cash 4,800
Cr Notes payable 4,800
4. October 12 Pay $1,500 for advertising regarding a special membership rate available during the month of October.
Dr Advertising expense 1,500
Cr Cash 1,500
5. October 19 Pay dividends to stockholders, $4,400.
Dr Retained earnings 4,400
Cr Dividends payable 4,400
Dr Dividends payable 4,400
Cr Cash 4,400
6. October 22 Pay liability insurance to cover accidents to members for the next six months, starting November 1, $6,900.
Dr Prepaid insurance 6,900
Cr Cash 6,900
7. October 25 Receive cash in advance for November memberships, $5,600.
Dr Cash 5,600
Cr Unearned revenue 5,600
8. October 30 Receive, but do not pay, utilities bill for the month, $5,200.
Dr Utilities expense 5,200
Cr Accounts payable 5,200
9. October 31 Pay employees' salaries for the month, $7,300.
Dr Wages expense 7,300
Cr Cash 7,300
Cash account
Debit Credit
8,500 4,800
12,000 1,500
5,600 4,400
6,900
7,300
1,200
Balboa's Gym
Cash Flow Statement
October 31, xx
Cash flow from operating activities:
Cash inflows:
Cash from October membership dues $8,500
Cash from November memberships $5,600
Total cash inflows $14,100
Cash outflows:
Advertisement expense ($1,500)
Prepaid insurance ($6,900)
Employees' salaries ($7,300)
Total cash outflows ($15,700)
Cash flow from operating activities ($1,600)
Cash flow from investing activities:
Purchase of new equipment ($4,800)
Cash flow from financing activities:
Issuance of common stock $12,000
Dividends paid ($4,400)
Cash flow from investing activities $7,600
Net increase in cash $1,200
What was the two important information in the financial position that is useful to financial users?
Answer:
1)balance sheet
2)income statement
Explanation:
A defining characteristic of the subscription-based business model is that
a. the user pays for access to a product or service whether he or she uses it during the payment term or not.
b. basic features of a product or service are provided free of charge, but the user must pay for premium services such as advanced features or add-ons.
c. initial product is often sold at a loss or given away for free in order to drive demand for complementary goods.
d. user pays for only the services he or she consumes.
Answer:
a. The user pays for access to a product or service whether he or she uses it during the payment term or not.
Explanation:
Obviously, a defining characteristic of the subscription-based business such as TV subscription require the customers to subscribe regardless of how much or how less the customers will watch it. If the customers did not watch the TV, it does not bother the producer as a sales has been made on the business model.
This business model requires regular to regular payment mode to renew the existing subscription on the business as well.
Answer: A.
The user pays for access to a product or service whether he or she uses it during the payment term or not.
Explanation: the subscription-based business model is that the user must pay for the services, even if the user did not make use of that service, for example, if a user subscribe for a television cable, and he/she traveled and was not around to watch the TV, the cable has been paid for and he was not chanced to make use of it.
Industries that use this model presently are cable television, cellular service providers, satellite radio, Internet service providers, and health clubs.
At December 31, the unadjusted trial balance of R&M Entertainment reports Unearned Revenue of $3,001 and Service Revenues of $33,944. 53% of the unearned revenue has been earned as of December 31. When R&M prepares the adjusting entry on December 31, what is the amount that will be reported as a liability on the balance sheet as of December 31?\
Answer:
$1410.47
Explanation:
Unearned revenue is the revenue upon which cash has been received by the entity prior to the entity discharging its responsibility of providing services in respect of the payment,hence it is a liability until it is finally earned and recorded as revenue.
The balance of the unearned revenue is the liability that R&M must report in its balance sheet as of December 31.
Balance of unearned revenue=$3,001-($3,001*53%)
balance of unearned revenue=$3,001-$1590.53 =$1410.47
Complete the following table by selecting the redistributive philosophy that matches each statement. Statement Utilitarianism Libertarianism Liberalism The government should punish crimes and enforce voluntary agreements, but not redistribute income. The government should choose policies deemed to be just, as evaluated by an impartial observer behind a "veil of ignorance." The government should choose policies to maximize the total utility of everyone in society. Suppose that Neha believes that the government should aim to raise the welfare of the poorest people in society, because if we all started in the exact same position in life and then created rules and laws to obey as a society, people would be concerned about ending up at the bottom of the income distribution. Which redistributive philosophy is consistent with Neha's view.
a. Liberalismb. Libertarianismc. Utilitarianism
Answer: Please see below.
Explanation:
The government should punish crimes and enforce voluntary agreements, but not redistribute income----libertarianism
The government should choose policies deemed to be just, as evaluated by an impartial observer behind a "veil of ignorance.----liberalism
The government should choose policies to maximize the total utility of everyone in society--
utilitarianism
---Nehas philosophy here as an impartial observer is void of self interest and is of the opinion that if government be just and equal in it's redistribution by raising the welfare of the poorest people in society, then people will strive to avoid being at the bottom of income distribution, this means that Nehas philosophy seeks policies that are just and therefore is consistent with -liberalism.
You were left $100,000 in a trust fund set up by your grandfather. The fund pays 6.5% interest. You must spend the money on your college education, and you must withdraw the money in 4 equal installments, beginning immediately. How much could you withdraw today and at the beginning of each of the next 3 years and end up with zero in the account
Answer:
The answer is 27,408.71
Explanation:
Solution
Recall that:
You were left with a trust fund of =$100,00
Interest rate = 6.5%
Money with drawled = 4 installments
Now,
The step to take is to find you could withdraw currently at the start of each of the next 3 years with a zero account to end up with.
Now,
100, 00 = X (1 - (1.065)^-4/.065/1.065
We now solve for X
Thus
X =7,408.71
By applying or using a financial calculator
We arrange it to an annuity due setting - [2nd] [BGN] then [2nd] [Set] this will set it to mode "BGN"
So,
N = 4
I/Y = 6.5
PV = -100,000
FV = 0
CPT PMT
The payments are known to to be 27,408.71
Note : Kindly find an attached copy of the Financial calculator below
The amount you can withdraw is $29,190.27 per installment.
Data and Calculations:
Amount in trust fund = $100,000
Interest rate on the fund = 6.5%
Number of equal instalments to withdraw = 4
N (# of periods) = 4
I/Y (Interest per year) = 6.5%
PV (Present Value) = $100,000
FV (Future Value) = $0
Schedule of Withdrawals:
Period PV PMT Interest Future Value
1 $100,000.00 $-29,190.27 $6,500.00 $77,309.73
2 $77,309.73 $-29,190.27 $5,025.13 $53,144.58
3 $53,144.58 $-29,190.27 $3,454.40 $27,408.71
4 $27,408.71 $-29,190.27 $1,781.57 $0.00
Results:
PMT = $29,190.27
Sum of all periodic payments = $116,761.10
Total Interest = $16,761.10
Thus, the amount to withdraw per installment is $29,190.27.
Learn more about periodic payments or withdrawals here: https://brainly.com/question/16970802
Question 8 (2 points)
Which level of critical thinking have you reached when you are able to recall
something you know about the subject matter at hand?
a) Comprehension
b) Analysis
c) Knowledge
d) Application
Answer:
d) Application
Explanation:
Critical thinking can be defined as the ability of an individual to establish clear and reflective thinking on any subject, whose focus is on making their own decisions and finding out what they want to believe in, rather than just accepting what they see or it is heard as an absolute truth.
Therefore, the most appropriate alternative to this question, about what is the level of critical thinking achieved when you can remember
something you know about a subject, is the application level.
Applying information occurs when a person makes use of information previously learned and understood, therefore the application of information on a new subject, helps in transferring solutions from one problem to solving another problem.
Cambridge Manufacturing Company applies manufacturing overhead on the basis of machine hours. At the beginning of the year, the company estimated its total overhead cost to be $325,000 and machine hours to be 25,000. Actual manufacturing overhead and machine hours were $372,000 and 26,000, respectively. Required: 1. Compute the predetermined overhead rate. 2. Compute applied manufacturing overhead. 3. Compute over- or underapplied manufacturing overhead.
Answer:
Instructions are below.
Explanation:
Giving the following information:
The estimated total overhead= $325,000
Estimated machine hours= 25,000
Actual manufacturing overhead and machine hours were $372,000 and 26,000, respectively.
First, we need to calculate the predetermined manufacturing overhead rate:
Predetermined manufacturing overhead rate= total estimated overhead costs for the period/ total amount of allocation base
Predetermined manufacturing overhead rate= 325,000/25,000
Predetermined manufacturing overhead rate= $13 per machine-hour
Now, we can allocate overhead:
Allocated MOH= Estimated manufacturing overhead rate* Actual amount of allocation base
Allocated MOH= 13*26,000= $338,000
Finally, we determine the under/over allocation:
Under/over applied overhead= real overhead - allocated overhead
Under/over applied overhead= 372,000 - 338,000= $34,000 underallocated
Olympia Marketing has instituted new policies around misappropriation of assets, conflicts of interests, and kickbacks. Also with the local elections just around the corner, management sent out reminders about political contributions and confidentiality of company information. All of these policies can be found in Olympia Marketing's:________.
a. employee handbook
b. policies and procedures manual
c. moral rights approach
d. code of ethics.
e. value system.
Direct Labor Variances for a Service Company Hit-n-Run Food Trucks, Inc. owns and operates food trucks (mobile kitchens) throughout the west coast. The company's employees have varying wage levels depending on their experience and length of time with the company. Employees work 8-hour shifts and are assigned to a truck each day based on labor needs to support the daily menu. One of its trucks, Jose O'Brien's Mobile Fiesta, specializes in Irish-Mexican fusion cuisine. The truck offers a single menu item that changes daily. On November 11, the truck prepared 200 of its most popular item, the Irish Breakfast Enchilada. The following data are available for that day: Quantity of direct labor used 24 hrs. (3 employees, working 8 hour shifts) Actual rate for direct labor $15.00 per hr. Standard direct labor per meal 0.1 hr. Standard rate for direct labor $15.50 per hr. a. Determine the direct labor rate variance, direct labor time variance, and total direct labor cost variance. Enter a favorable variance as a negative number using a minus sign and an unfavorable variance as a positive number. Direct Labor Rate Variance $ Direct Labor Time Variance $ Total Direct Labor Cost Variance $ b. Discuss what might have caused these variances.
Answer:
Explanation:
The solution is given below check the picture attached for better explanation
Direct labour rate variance:
=(Actual rate per hour-standard rate per hour)×actual hours
=($15-$15.50)×24 hours
=$12 F
2.
Direct labourTime variance:
=(Actual direct labour hour-standard direct labour hours)×standard rate per hour
={24-(200×.10)}×15.50
=$62 U
3. Total direct labour cost variance=direct labour rate variance+direct labour time variance
=310-360
=$50 U
44. The most important type of coverage is
a. Uninsured motorist
b. Medical payments
c. Collision
d. Liability insurance
Answer:
According to me, the correct answer can be d. Liability insurance.
Your boss makes an intentional effort to understand the emotion or mood of the office at all times. Your boss uses that information when assigning team members to specific projects or when communicating with the team as a whole or as individuals. These behaviors are examples of ______.
Answer:
The correct answer is: emotional intelligence.
Explanation:
To begin with, the concept of "emotional intelligence", in the field of business, refers to the capability of individuals to recognize their own emotions and also the ones of the others around him, in order to use that information with the purpose of guiding or leading the thinking and behavior of the group or team in order to establish better results when working together as a whole. That is why, when your boss is making an intentional effort to understand the emotions of all the office and use that information to assign the teams, then he is using the emotional intelligence to work better.
New Gadgets, Inc., currently pays no dividend but is expected to pay its first annual dividend of $5.30 per share exactly 9 years from today. After that, the dividends are expected to grow at 3.9 percent forever. If the required return is 12.1 percent, what is the price of the stock today?
Answer:
The multiple choices are:
$64.63 '
$23.12
$30.24
$47.59
$25.92
The correct option is $25.92
Explanation:
The price of the stock today is the present of dividend of $5.30 payable in nine years' time and present value of the dividend terminal value:
present of dividend=dividend/discount factor
where discount factor=(1+r)^n
r is the required rate of return of 12.1%
n is the number of years which is 9
present value of dividend=$5.30/(1+12.1%)^9=$ 1.90
Terminal value=dividend*(1+g)/(r-g)
g is the dividend growth rate of 3.9%
r is the required return of 12.1%
terminal value=$5.3*(1+3.9%)/(12.1%-3.9%)=$ 67.15
Present value of terminal value=$ 67.15/(1+12.1%)^9=$ 24.02
Sum of both present values=$ 24.02 +$1.90=$25.92
Sela traveled from her home in Flagstaff to San Francisco to seek specialized medical care. Because she was unable to travel alone, her father accompanied her. Total expensesincluded: Hotel room en route ($150 times× 2 rooms times× 3 nights):$900 Mileage, 1,000 miles Doctors bills in San Francisco: 1,600 The total medical expenses deductible before the 10% limitation are...
Answer:
The total medical expenses deductible before the 10% limitation is 2090
Explanation:
Solution
Recall that:
The Total expenses included is stated as follows:
Th Hotel room is = $150 * two rooms * three nights
Mileage of = $900,
Miles = 1000
Doctor's bill ins an Francisco = 1,600
Now,
To next step is to find the total medical expenses deductible before the 10% limitation is given as follows:
Doctor's bill = 1,600
The total expenses i hotel room is calculated as :150 * 1 *3 = 450
So,
The total = 1600 + 450 = 2050
It is also important to know that only 10% of the expense stay for the accompanied person is permitted
Therefore,
450*10% =45
Total 2050+45 = 2090
Monique is the operations manager of a chain of hair salons in upscale urban neighborhoods. Customers in these neighborhoods expect high quality services and products, and Monique is struggling to use the salon's resources efficiently and effectively to provide the level of quality the areas' customers demand. What will most likely happen if Monique can't find a way to meet customers' demands for quality
Multiple Choice
A. The hair salons will be forced to move to a less demanding neighborhood.
B. The hair salons will be taken over by competitors in the area.
C. The hair salons will stay in business, and customers will adapt to their services and products.
D. The hair salons will be converted into a different type of business that can succeed in this area.
E. The hair salons will go out of business.
Answer:
Option B. The hair salons will be taken over by competitors in area.
Explanation:
The reason is that when the quality of the product that the seller promised is not delivered the customer satisfaction level drops significantly and thus moves towards the other seller which results in the loss of the customer. So this means if the business is not delivering the desired quality then it will keep loosing business customers because the competitor will take over the lost business.
A $38,000 coil winding and unwinding machine is estimated to provide additional value to production by $15 per unit. When the machine is operated at 58 units per hour, it needs to be cooled down after 4 hours of operation and receive minor maintenance for 15 minutes. When the machine is operated at 118 units per hour, it needs to be cooled down after 5 hours of operation and receive minor maintenance for 30 minutes. The production line runs 8 hours per day. If each maintenance check costs $625 and the machine has a useful life of 80,000 hours of operations, at what speed should the machine should be operated
Answer: 118 units per hour
Explanation:
At 58 units per hour:
The cycle time = 4 hours + 0.25 hours
= 4.25 hours
The cycle per day = 8/4.25 = 1.88 cycle
The value added per day will be:
= 1.88 × 4 × 58 × 15
= $6542.4
The cost of maintenance per day will be: = 1.88 × $625 = $1175
The cost of operating the machine per day will be:
= $38,000/80,000 × 4 × 1.88
= $3.57
The net increase in the value per day will be:
= $6542.4 - $1175 - $3.57
= $5363.83
At 118 units per hour:
The cycle time = 5 hours + 0.5 hours
= 5.5 hours
The cycle per day = 8/5.5 = 1.45 cycle
The value added per day will be:
= 1.45 × 5 × 118 × 15
= $12832.5
The cost of maintenance per day will be: = 1.45 × $625 = $906.25
The cost of operating the machine per day will be:
= $38,000/80,000 × 5 × 1.45
= $3.44
The net increase in the value per day will be:
= $128322.5 - $906.25 - $3.44
= $11922.81
The machine should be operated at 118 units per hour because it gives a higher value.
Novak Corp. is authorized to issue both preferred and common stock. The par value of the preferred is $50. During the first year of operations, the company had the following events and transactions pertaining to its preferred stock. Feb. 1 Issued 47,000 shares for cash at $52 per share. July 1 Issued 62,500 shares for cash at $56 per share. Journalize the transactions.
Answer:
Feb 1=> Cash ( debit) = 2,444,000.
Prefered stock (credit) = 2,350,000.
Paid in capital in excess of par value-preferred stock(credit) = 94000.
July 1=> Cash (debit) = 3,500,000.
Prefered stock (credit) = 3,125,000.
Paid in capital in excess of par value-preferred stock(credit) = 375000.
Explanation:
(A). On FEB. 1, the accounts and Explanation is given below:
Cash ( debit) = 2,444,000 {that is from; 47,000 × $52}.
Prefered stock (credit) = 2,350,000 { that is from; 47,000 × $50}.
Paid in capital in excess of par value-preferred stock(credit) = 2,444,000 - 2,350,000 = 94,000.
(B). On JULY 1, the accounts and Explanation is given below;
"July 1 Issued 62,500 shares for cash at $56 per share."
=> Cash (debit) = 62500 × 56 = 3,500,000.
Prefered stock (credit) = 3,125,000 { that is from; 62,500 × $50}.
Paid in capital in excess of par value-preferred stock(credit) = 3,500,000 - 3,125,000 = 375,000.
Answer:
Dr cash $2,444,000
Cr preferred stock $2,350,000
Cr paid-in capital in excess of par-preferred stock $94,000
Dr cash $3,500,000
Cr preferred stock $3,125,000
Cr paid-in capital in excess of par-preferred stock $375,000
Explanation:
The cash proceeds received from the issuance of preferred stock on February 1 is $ 2,444,000.00 (47,000*$52)out of which $2,350,000 ($50*47000) is credited to preferred stock and the balance of $94,000($2*47000) is credited to paid-in capital in excess of par-preferred stock
The cash proceeds received from the issuance of preferred stock on July 1 is $ 3,500,000 (62500*$56)out of which $ 3,125,000.00 ($50*62500) is credited to preferred stock and the balance of $375,000($6*62,500) is credited to paid-in capital in excess of par-preferred stock
On October 1, 2018, Iona Bell Co. issued stock options for 300,000 shares to a division manager. The options have an estimated fair value of $3 each. To provide additional incentive for managerial achievement, the options are not exercisable unless divisional revenue increases by 6% in three years. Bell initially estimates that it is not probable the goal will be achieved, but then after one year, Bell estimates that it is probable that divisional revenue will increase by 6% by the end of 2020. Bell will:
a. record compensation expense of zero in 2019 and in 2020
b. record compensation expense of $300,000 in 2019 and $300,000 in 2020.
c. record compensation expense of $450,000 in 2019 and $450,000 in 2020.
d. record compensation expense of $600,000 in 2019 and $300,000 in 2020.
Answer: d. record compensation expense of $600,000 in 2019 and $300,000 in 2020.
Explanation:
In 2019, with 2 years left on the on the incentive, the Iona Bell's estimate has changed from not believing that the target could be reached to believing that it could.
This will move their estimate for Compensation from 0 in 2018 to (300,000 * $3) $900,000 at the end of 2020.
They will have to account for it across the 2 remaining years.
In 2019, with 2 years out of 3 elapsed, they will apportion it in this manner ,
= 900,000 * 2/3 - $0 (previous year's estimate)
= 600,000 - 0
= $600,000
In 2020 with the third year elapsed, they will apportion it as such,
= 900,000 * 3/3 - $600,000 (previous year's estimate)
= $300,000
The correct option is therefore Option D.
Thomas Company has decided to purchase a company vehicle. The accountant was given all of purchase details. Which should be used to record the vehicle in the accounting records? The price negotiated with the dealer. The manufacturer’s suggested retail price (MSRP). The amount of the loan with the bank. The average selling price of similar vehicles in the area.
Answer:
The price negotiated with the dealer.
Explanation:
Since in the question it is mentioned that the Thomas company decided to purchase a company vehicle. And the accountant provided all the purchase details.
So for recording the vehicle in the accounting records the price negotiated with the dealer is used as in the accounting, only numbers are recorded which are based on the type of the transactions.
The purchase details includes color of a vehicle, price, mileage, capacity, etc
Therefore for accounting purpose, we only considered the price and the same is to be considered.
If you enter the teaching profession, you will have no money for vacations; and if you do not enter the teaching profession, you will have no time for vacations. Since you must either enter or not enter the teaching profession, it follows that either you will have no money or no time for vacations.
a. True
b. False
Answer:
True
Explanation:
This is an example of Constructive dilemma. It is a true rule of inference of propositional logic. It infers that, if P implies Q and R implies S and either P or R is true, then either Q or S has to be true. Therefore entering the teaching profession, means no money for vacations; and not entering the teaching profession, means no time for vacations. If you must either enter or not enter the teaching profession, it follows that either you will have no money or no time for vacations.
Buffalo Corporation has used the accrual basis of accounting for several years. A review of the records, however, indicates that some expenses and revenues have been handled on a cash basis because of errors made by an inexperienced bookkeeper. Income statements prepared by the bookkeeper reported $27,700 net income for 2019 and $34,300 net income for 2020. Further examination of the records reveals that the following items were handled improperly.
Rent was received from a tenant in December 2016. The amount, $1,030, was recorded as revenue at that time even though the rental pertained to 2017.
Answer:
Corrected net income for 2019 = 23,750.
Corrected net income for 2020 = $36,210
Explanation:
For the year 2019, below are the particulars and the amount recorded for each particulars.
Net income => $27,700.
Rent received in 2019 => - $1,030.
Salaries and Wages not accrued, 12/31/18 => - $1190.
Salaries and Wages not accrued, 12/31/19 => - $1290.
Inventory of Supplies, 12/31/18 = - 1430.
Inventory of Supplies, 12/31/19 = 990
Corrected net income = 23,750.
For the year 2020, below are the particulars and the amount recorded for each particulars.
Net income => $34,300.
Rent received in 2020 => $1,030.
Salaries and Wages not accrued, 12/31/2020 => - $ 870
Salaries and Wages not accrued, 12/31/19 => $1290.
Inventory of Supplies, 12/31/19 = - 990.
Inventory of Supplies, 12/31/20 = 1450.
Corrected net income = $36,210
Seth owns a local business that provides email updates on surf conditions. He is the only supplier of these email updates in Santa Barbara and Goleta, which gives him a monopoly in both cities. The marginal cost of producing another update is zero (and we'll ignore fixed costs). The inverse demand for these updates in Santa Barbara is p = 74-q and the inverse demand in Goleta is p = 39 - 4q. Suppose Seth charges different uniform prices in SB and Goleta. If Seth sets each price such that he is maximizing his total profits, what are Seth's total profits?
Answer:
Seth's total profits is $1,535.359
Explanation:
According to the given data we have the following:
MC = 0 and we will ignore fixed costs
Therefore TC = 0
Demand function in Santa barbara is
p = 74 - q
MR = 74 - 2q
Since Seth sets different uniform prices in two markets to maximizes his profit therefore ,
MR = MC
74 - 2q = 0
2q = 74
q=37
p = 74 - 37 = 37
Profit = pq - TC
= 37*37 - 0
= $1,369
Inverse demand finction Goleta is
p = 39 - 4q
MR = 39 - 8q
MR = MC
39 - 8q = 0
8q = 39
q = 4.875
p = 39 - 4.875 = 34.125
Profit = pq - TC
= 34.125*4.875 - 0
= $166.359
Therefore, Seth's total profits = $1,369 + $166.359
Seth's total profits= $1,535.359
Seth's total profits is $1,535.359
Suppose you were going to save $1,000 per year for three years at a 10% interest rate compounded annually, with the first investment occurring today. What would be the future value of this investment
Answer:
$13,310
Explanation:
The investment would be 100% = $1000 * 100% / 10% = $10,000
So this is the amount that would be deposited today to earn $1000 each year which is 10% of the amount deposited today.
The Future Value is given as under:
Future Value = Present Value * (1 + r)^n
Here,
Present value is $10,000
r is 10%
and n is 3 years
So, by putting values we have:
Future Value = $10,000 * (1 + 10%)^3 = $13,310
The Bensington Glass Company entered into a loan agreement with the firm's bank to finance the firm's working capital. The loan called for a floating rate that was 25 basis points (0.25 percent) over an index based on LIBOR. In addition, the loan adjusted weekly based on the closing value of the index for the previous week and had a maximum annual rate of 2.24 percent and a minimum of 1.71 percent. Calculate the rate of interest for weeks 2 through 10.
As the data in incomplete, lets consider the data found on the net for the same question
DATE LIBOR
week 1 1.98%
week 2 1.64%
week 3 1.54%
week 4 1.31%
week 5 1.57%
week 6 1.69%
week 7 1.66%
week 8 1.94%
week 9 1.92%
(This data in not given in the question. If some values differ from this data, just change the that value in the method below and you'll get your answer)
Answer:Floating rate = 0.25%
Maximum rate = 2.24%
Minimum rate = 1.71%
General formula for for finding rate of interest of a week
Week Rate = Previous Week's Rate (LIBOR from table) + Floating Rate
Lets find the values:
Week 2 rate = Week 1 rate + 0.25% = 1.98% + 0.25% = 2.23%
Week 3 rate = Week 2 rate + 0.25% = 1.64% + 0.25% = 1.89%
Week 4 rate = Week 3 rate + 0.25% = 1.54% + 0.25% = 1.79%
Week 5 rate = Week 4 rate + 0.25% = 1.31% + 0.25% = 1.56%
Week 5 rate is lower than the minimum rate, rate of Week 5 can be taken as minimum rate
Week 5 rate = 1.71%
Week 6 rate = Week 5 rate + 0.25% = 1.57% + 0.25% = 1.82%
Week 7 rate = Week 6 rate + 0.25% = 1.69% + 0.25% = 1.94%
Week 8 rate = Week 7 rate + 0.25% = 1.66% + 0.25% = 1.91%
Week 9 rate = Week 8 rate + 0.25% = 1.94% + 0.25% = 2.19%
Week 10 rate = Week 9 rate + 0.25% = 1.92% + 0.25% = 2.17%
During 2017, Eaton Co. introduced a new product carrying a two-year warranty against defects. The estimated warranty costs related to dollar sales are 4% within 12 months following sale and 6% in the second 12 months following sale. Sales and actual warranty expenditures for the years ended December 31, 2017 and 2018 are as follows:
Actual Warranty
Sales Expenditures
2017 $ 400,000 $8,000
2018 600,000 14,000
$1,000,000 $22,000
At December 31, 2018, (assuming the accrual method) what amount should be reported as an estimated warranty liability?
Why are warranties recorded as an expense in the year of the sale, i.e., what accounting principle applies?
Answer:
1. $82,000
2. Accrual / Matching Principle
Explanation:
The two year warranty against defects is known as an Assurance Type Warranty.
With Assurance Type Warranty, there is no option on the customer to take the warranty or not. Therefore this is not a separate performance obligation.
Assurance Type Warranty are accounted for in terms of IAS 37 Provisions.
At December 31, 2018, the Warranty Expense is calculated as follows :
Sales 2017 : $ 400,000 × 6% = $ 24,000
Sales 2018 : $ 600,000 × 12% = $ 72,000
Total = $ 96,000
Journal
Warranty Expense $ 96,000 (debit)
Warranty Provision $ 96,000 (credit)
When Warranty Claim is Subsequently received in 2018 the entries will be as follows :
Journal
Warranty Provision $14,000 (debit)
Cash $14,000 (credit)
Thus Warranty Liability will be : $ 96,000 - $14,000 = $82,000
Janus Coat Company purchased a delivery truck on June 1 for $30,000, paying $10,000 cash and signing a 6%, month note for the remaining balance. The truck expected to depreciate $6,000 each year Janus Coat Company prepares monthly financial statements.
Account Tittles and Explanation
Answer:
Find below complete question:
Janus Coat Company purchased a delivery truck on June 1 for $30,000, paying $10,000 cash and signing a 6%, 2-month note for the remaining balance. The truck is expected to depreciate $6,000 each year. Janus Coat Company prepares monthly financial statements. Instructions:
(a) Prepare the general journal entry to record the acquisition of the delivery truck on June 1st. (b) Prepare any adjusting journal entries that should be made on June 30th. (c) Show how the delivery truck will be reflected on Janus Coat Company's balance sheet on June 30th.
Dr Truck $30,000
Cr Cash $10,000
Cr notes payable $20,000
Dr depreciation expense $500
Cr accumulated depreciation $500
Dr interest expense $100
Cr interest payable $100
Balance sheet extract on 30th June"
Delivery truck $30,000
Accumulated depreciation ($500)
Net book value $29,500
Explanation:
The journal entry to record the purchase of the truck would have $30,000 debited to truck account while cash and notes payable are credited with $10,000 and $20,000 respectively.
On 30 June depreciation expense =$6000/12=$500
Interest of one month on the note payable on 30th June=$20,000*6%*1/12=$100
