Answer:
1. Dec 31
Dr Research and Development Expense $3,180,000
Cr 2013 Patent $3,180,000
2. Dec 31
Dr Equipment $60,000
Cr 2013 Patent $60,000
3. Dec 31
Dr Research and Development Expense $10,000
Cr 2013 Accumulated Depreciation - Equipment $10,000
Explanation:
1. Preparation of the Journal entry to Record the correcting entry to expense R&D costs incorrectly capitalized
Dec 31
Dr Research and Development Expense $3,180,000
Cr 2013 Patent $3,180,000
(To record research and development expense )
Calculation for the Total of research and development expense
Basic research to develop the technology $2,000,000
Engineering design work $680,000
Development of a prototype device $300,000
Testing and modification of the prototype $200,000
Total research and development expense $3,180,000
2. Preparation of the journal entry to Record the correcting entry to capitalize the cost of equipment incorrectly capitalized as a patent.
Dec 31
Dr Equipment $60,000
Cr 2013 Patent $60,000
(To correct cost of equipment capitalized to patent)
3. Preparation of the Journal entry to Record the correcting entry to record depreciation on equipment used in R&D projects.
Dec 31
Dr Research and Development Expense $10,000
Cr 2013 Accumulated Depreciation - Equipment $10,000
(To record research and development expense)
Instructions: Round your answers to 2 decimal places. If you are entering a negative number include a minus sign. a. Using the midpoint method, what is the price elasticity of demand from a price of $4.00 to a price of $4.50 per iced coffee? , and demand is said to be price (Click to select) . b. Using the midpoint method, what is the price elasticity of demand from a price of $2.00 to a price of $3.00 per iced coffee? , and demand is said to be price (Click to select) . c. Using the midpoint method, what is the price elasticity of demand from a price of $0.50 to a price of $1.00 per iced coffee? , and demand is said to be price (Click to select) .
Answer:
The answer is below
Explanation:
The graph is attached below.
a) The price elasticity of demand is given by:
price elasticity of demand = [tex]\frac{\%\ change\ in\ quantity }{\%\ change\ in\ price}=\frac{\Delta Q}{\Delta P}[/tex]
[tex]\Delta Q=\frac{Q_2-Q_1}{(Q_2+Q_1)/2} \\\\\Delta P=\frac{P_2-P_1}{(P_2+P_1)/2}[/tex]
Price of elasticity demand = [tex]\frac{\frac{Q_2-Q_1}{(Q_2+Q_1)/2} }{\frac{P_2-P_1}{(P_2+P_1)/2} }[/tex]
Price of elasticity demand = [tex]\frac{\frac{50-100}{(50+100)/2} }{\frac{4.5-4}{(4.5+4.0)/2} }=\frac{-0.6667}{0.1176} =5.7[/tex]
Since the price of elasticity demand > 1, it is elastic
b) Price of elasticity demand = [tex]\frac{\frac{200-300}{(200+300)/2} }{\frac{3-2}{(3+2)/2} }=\frac{-0.4}{0.4} =1[/tex]
Since the price of elasticity demand = 1, it is unitary
c) Price of elasticity demand = [tex]\frac{\frac{400-450}{(400+450)/2} }{\frac{1-0.5}{(1+0.5)/2} }=\frac{-0.1176}{0.6667} =0.18[/tex]
Since the price of elasticity demand < 1, it is inelastic
Suppose you run a software company and you want to determine if there is a difference between the 'debugging unit' (population 1) and 'after sales services unit' (population 2) by considering the return on investment for each unit. you have acsess to information from a random survey which is done for 24 companies for population 1 which reveals that the average return on investment (ROI) for each dollar you invest is.12, while for population, the survey is performed on 30 companies and the average ROI is found to be .30. You also know from the previously published results that the standard deviation for any ROI in the software industry is .25 What is the value of the test statistic for your research hypothesis?
a. -1.3145.
b. -1.2728.
c. -2.3738.
d. -2.2411.
e. -2.6291.
Answer:
e. -2.6291.
Explanation:
from the information available in this question,
mean x₁ = 0.12
mean x₂ = 0.30
n₁ = 24
n₂ = 30
n1 = 24 < 30
n₂ = 30 <= 30
therefore we would be solving this using the t test.
we have
[tex]t =\frac{x_{1-x_{2} } }{s} *\sqrt{\frac{n1n2}{n1+n2} }[/tex]
inserting values whe have:
[tex]t=\frac{0.12-0.30}{0.25} *\sqrt{\frac{24*30}{24+30} }[/tex]
[tex]t = -0.72 *\sqrt{13.33333}[/tex]
[tex]t=-0.72*3.6514836[/tex]
[tex]t=-2.629067947[/tex]
this is approximately
[tex]-2.6291[/tex]
therefore option e answers this question.
At the beginning of the month, the Painting Department of Skye Manufacturing had 24,000 units in inventory, 80% complete as to materials, and 20% complete as to conversion. The cost of the beginning inventory, $32,650, consisted of $26,400 of material costs and $6,250 of conversion costs. During the month the department started 119,000 units and transferred 126,000 units to the next manufacturing department. Costs added in the current month consisted of $283,440 of materials costs and $562,825 of conversion costs. At the end of the month, the department had 17,000 units in inventory, 30% complete as to materials and 15% complete as to conversion. If Skye Manufacturing uses the weighted average method of process costing, compute the costs per equivalent unit of materials and conversion respectively for the Painting Department.
Answer:
Materials $2,36
Conversion $4,43
Explanation:
Weighted-Average:
completed + ending WIP
(there is not differenciation between completed and started and completed)
Equivalent units Materials: 126,000 + 17,000 x 30% = 131,1 00
Conversion: 126,000 + 17,000 x 15% = 128,55 0
Material Equivalent cost:
283,440 + 26,400 = 309,840
$309,840 / 131,100 = 2,3633867
Conversion Equivalent cost:
562,825 + 6,250 = 569,075
569,075 / 128,550 = 4,4268767
Asset management ratios are important - firms need to manage assets efficiently because capital obtained to acquire those assets is expensive. These ratios include the: (1) Inventory turnover ratio, (2) Days sales outstanding, (3) Fixed assets turnover, and (4) Total assets turnover. The inventory turnover ratio indicates how many times during the year inventory is -Select- and restocked. Its equation is: Excess inventory is unproductive and represents an investment with a -Select- rate of return. An alternative definition of the inventory turnover ratio replaces sales in the numerator with -Select- . The rationale for this measurement is that inventory is carried at cost, so sales in the numerator overstates the true inventory turnover ratio. The days sales outstanding (DSO) ratio is also called the average collection period (ACP). Its equation is:
Answer:
Throughout the overview section following table, the definition including its instance supplied is defined.
Explanation:
The asset turnover ratio reflects how much inventory is consumed and restocked throughout the year. Excess inventory becomes counterproductive and constitutes a low-return investment. An alternate interpretation including its inventory turnover ratio substitutes the cost of products delivered towards revenue in the numerator.Compared to the conditions around which the company prices its products, the DSO may even be measured. This will suggest a need to step up the accumulation of receivables unless the pattern has been growing and credit policy just hasn't improved. Because of age, there may be issues understanding this calculation, specifically whenever an older organization in comparison to something like a newer business.Future value. Jack and Jill are saving for a rainy day and decide to put $70 away in their local bank every year for the next 25 years. The local Up-the-Hill Bank will pay them 5% on their account. a. If Jack and Jill put the money in the account faithfully at the end of every year, how much will they have in it at the end of 25 years? b. Unfortunately, Jack had an accident in which he sustained head injuries after only 10 years of savings. The medical bill has come to $900. Is there enough in the rainy-day fund to cover it? a. If Jack and Jill put the money in the account faithfully at the end of every year, how much will they have in it at the end of 25 years?
Answer:
a. If Jack and Jill put the money in the account faithfully at the end of every year, how much will they have in it at the end of 25 years?
The future value = present value x (1 + r)ⁿ = $70 x (1 + 5%)²⁵ = $237.04
b. Unfortunately, Jack had an accident in which he sustained head injuries after only 10 years of savings. The medical bill has come to $900. Is there enough in the rainy-day fund to cover it?
No, the balance in the account is only $114.02, it is not even close to $900. They should try to save a little bit more every year, $70 is not a lot of money.
future value = $70 x (1 + 5%)¹⁰ = $114.02
Holly and Luke formed a partnership, investing $240,000 and $80,000, respectively. Determine their participation in the year's net income of $200,000 under each of the following independent assumptions: No agreement concerning division of net income; Divided in the ratio of original capital investment; Interest at the rate of 15% allowed on original investments and the remainder divided in the ratio of 2:3; Salary allowances of $50,000 and $70,000, respectively, and the balance divided equally; Allowance of interest at the rate of 15% on original investments, salary allowances of $50,000 and $70,000, respectively, and the remainder divided equally.
Answer:
1) No agreement concerning division of net income;
if no agreement is made, then profits must be divided equally among partners = $200,000 / 2 = $100,000 for Holly and $100,000 for Luke.2) Divided in the ratio of original capital investment;
Holly should receive $200,000 x ($240,000 / $320,000) = $150,000Luke will get $200,000 - $150,000 = $50,0003) Interest at the rate of 15% allowed on original investments and the remainder divided in the ratio of 2:3;
Holly will receive:
$240,000 x 15% = $36,000($200,000 - $48,000) x 2/5 = $60,800total $96,800Luke will receive:
$80,000 x 15% = $12,000($200,000 - $48,000) x 3/5 = $91,200total $103,2004) Salary allowances of $50,000 and $70,000, respectively, and the balance divided equally;
Holly will receive:
$50,000 salary($200,000 - $120,000) /2 = $40,000total $90,000Luke will receive:
$70,000 salary($200,000 - $120,000) /2 = $40,000total $110,0005) Allowance of interest at the rate of 15% on original investments, salary allowances of $50,000 and $70,000, respectively, and the remainder divided equally.
Holly will receive:
$240,000 x 15% = $36,000$50,000 salary($200,000 - $168,000) /2 = $16,000total $102,000Luke will receive:
$80,000 x 15% = $12,000$70,000 salary($200,000 - $168,000) /2 = $16,000total $98,000The Correct Answer is
1) when there is No agreement concerning the division of net income; then the profits must be divided equally among the partners = $200,000 / 2 = $100,000 for Holly and $100,000 for Luke.
2) when the Divided in the ratio of original capital investment;
Then the Holly should be received $200,000 x ($240,000 / $320,000) = $150,000 After that the Luke will be get the $200,000 - $150,000 = $50,0003) Then the Interest at the rate of 15% allowed on original investments and also that the remainder divided in the ratio of 2:3;
So that the Holly will receive: So that $240,000 x 15% = $36,000 when ($200,000 - $48,000) x 2/5 = $60,800 the total is $96,800 Therefore Luke will be receive: $80,000 x 15% = $12,000 ($200,000 - $48,000) x 3/5 = $91,200 The total is $103,2004) When the Salary allowances of $50,000 and $70,000, respectively, and also that the balance divided equally;
Then Holly will be received: $50,000 salary ($200,000 - $120,000) /2 = $40,000 The total is $90,000 So that Luke will receive: $70,000 salary ($200,000 - $120,000) /2 = $40,000 The total answer is $110,0005) When the Allowance of at the rate of interest 15% on the original that is an investment, salary allowances of $50,000 and also that $70,000, and after that the remainder divided equally.
When the Holly will receive $240,000 x 15% = $36,000 $50,000 salary ($200,000 - $168,000) /2 = $16,000 The total is $102,000 After that Luke will be receive: $80,000 x 15% = $12,000 $70,000 salary ($200,000 - $168,000) /2 = $16,000 The total is $98,000Learn more about:
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Lynwood, Inc. produces two different products (Product A and Product X) using two different activities: Machining, which uses machine hours as an activity driver, and Inspection, which uses number of batches as an activity driver. The activity rate for Machining is $140 per machine hour, and the activity rate for Inspection is $510 per batch. The activity drivers are used as follows: Product A Product X Total Machine hours 1,800 3,100 4,900 Number of batches 46 19 65 What is the amount of Machining cost assigned to Product X
Answer:
$434,000
Explanation:
Total machining cost = Number of machine hour * Rate per machine hour
= 3,100 * $140
= $434,000
Hence, The total machining cost allocated to product X is $434,000.
HELP ASAP!!! ! Suppose the government raises taxes on the profits of oil companies. we should expect which of the following? A less innovation in the production of oil and therefore higher oil prices. B The price of oil to be unchanged. C Oil companies will increase production in an attempt to increase revenue. D None of the above will happen.
Answer:
sdedcfgrtgf
Explanation:
gtgtgtgtgtgtgtgtgtgtgt
What is a "Halo effect?" Review Later This bias occurs when decision makers seek out evidence that confirms their previously held beliefs, while discounting or diminishing the impact of evidence in support of differing conclusions. This is the overreliance on an initial single piece of information or experience to make subsequent judgments. Once an anchor is set, other judgments are made by adjusting away from that anchor, which can limit one’s ability to accurately interpret new, potentially relevant information. This is an observer’s overall impression of a person, company, brand, or product, and it influences the observer’s feelings and thoughts about that entity’s overall character or properties. It is the perception, for example, that if someone does well in a certain area, then they will automatically perform well at something else regardless of whether those tasks are related. This bias occurs when a person overestimates the reliability of their judgments. This can include the certainty one feels in her own ability, performance, level of control, or chance of success.
Answer:
Option C (This is an observer's......related) is the right option.
Explanation:
This would be the individual's evaluation of such an individual, business, brand as well as commodity by an observer, and then it affects the thoughts and emotions including its observer about either the personal appearance including its object. It is a belief that just because someone performs well enough in a certain area, independently of those same activities required, they will naturally do well in another one.All those other decisions also aren't linked to the circumstance issued. So, the solution is indeed the right one.
A cost-benefit analysis is a way
Answer:
Cost Benefit Analysis
Way of thinking that compares the cost of an action to its benefits.
Explanation:
I hope it helps.
CostPercent Complete Materials costs$ 5,80050% Conversion costs$ 6,50030% A total of 7,700 units were started and 6,600 units were transferred to the second processing department during the month. The following costs were incurred in the first processing department during the month: Materials costs$ 85,300 Conversion costs$ 168,000 The ending inventory was 70% complete with respect to materials and 10% complete with respect to conversion costs. The cost per equivalent unit for materials for the month in the first processing department is closest to:
Answer:
$11.49
Explanation:
The computation of cost per equivalent unit for materials for the month in the first processing department is shown below:-
Equivalent units for materials
= Units completed and transferred out + Units in ending inventory
(6,600 × 100%) + ((800 + 7,700 - 6,600) × 70%)
= 6,600 + $1,330
= 7,930 units
Cost per equivalent unit for materials
= (5,800 + $85,300) ÷ 7,930
= $11.49
3. Continuous review inventory control is being applied to purchase motors for an electric fan manufacturer. Demand is uniformly distributed between 500 and 600 motors per week. Each order costs $250 to prepare, place and receive. Motors cost $2.75/unit and the holding cost rate is 1% per week. Management proposes using the EOQ order quantity and setting reorder points to ensure a 97% fill rate. Find the imputed(implied) cost of a shortage and the expected number of shortages per year.
Answer:
The expected no. of shortage will be "0.27".
Explanation:
The given values are:
Ordering cost,
O = $250
Holding cost (i),
= 1% (per week)
= 52% (a year)
Cost of goods (C),
= $2.75
The average annual demand is:
[tex]=\frac{600+500}{2}\times 52 \ weeks[/tex]
[tex]=28600 \ units[/tex]
Now,
⇒ [tex]EOQ=\sqrt{(2\times D\times \frac{O}{C}\times i)}[/tex]
[tex]=\sqrt{2\times 18600\times \frac{250}{2.75}\times 52 \ percent}[/tex]
[tex]=\sqrt{10000000}[/tex]
[tex]=3162.27[/tex]
In a year, the number of orders will be:
⇒ [tex]\frac{D}{EOQ}=\frac{28600}{3162.27}[/tex]
[tex]=9.04 \ i.e., \ 9 \ orders[/tex]
Demand mean will be:
= [tex]\frac{500+600}{2}[/tex]
= [tex]550 \ units \ Demand \ SD[/tex]
= [tex]max[\frac{(Upper \ limit - Mean)}{3} , \frac{(mean-lower \ limit)}{3} ][/tex]
= [tex]max [\frac{50}{3} ,\frac{50}{3} ][/tex]
= [tex]16.66 \ units[/tex]
So, in a year, the expected number of the shortages will be:
⇒ [tex]Number \ of \ orders \ in \ a \ year\times fill \ rate[/tex]
⇒ [tex]9\times (1-97 \ percent)[/tex]
⇒ [tex]0.27[/tex]
What is the meaning
economics
Answer:
the branch of knowledge concerned with the production, consumption, and transfer of wealth.
2.
the condition of a region or group as regards material prosperity.
Why might you want to avoid the use of acronyms and emoticons in business communication
Well because if you used emoticons in a professional business communication, then they would probably see you as untrustworthy or lazy and they would most likely go to somebody else who is more professional.
The following transactions occurred at the Daisy King Ice Cream Company.
1. Started business by issuing 10,000 shares of common stock for $26,000.
2. Leased a building for three years at $560 per month and paid six months' rent in advance.
3. Purchased equipment for $6,000, signing a two-year, 12% note.
4. Purchased $2,400 of supplies on account.
5. Recorded cash sales of $1,400 for the first week.
6. Paid weekly salaries, $620.
7. Paid for supplies purchased in item (4).
8. Recorded depreciation on equipment, $80.
9. Signed a franchise agreement to pay royalties of 5% of sales.
10. Paid royalites due on 1st weeks sales.
Required:
Prepare journal entries to record each of the transactions listed above.
Answer:
Please find the attached file.
Explanation:
Richards Corporation uses the weighted-average method of process costing. The following information is available for October in its Fabricating Department: Units: Beginning Inventory: 88,000 units, 70% complete as to materials and 20% complete as to conversion. Units started and completed: 266,000. Units completed and transferred out: 354,000. Ending Inventory: 34,000 units, 40% complete as to materials and 15% complete as to conversion. Costs: Costs in beginning Work in Process - Direct Materials: $37,200. Costs in beginning Work in Process - Conversion: $79,700. Costs incurred in October - Direct Materials: $646,800. Costs incurred in October - Conversion: $919,300. Calculate the equivalent units of materials.
Answer:
$1.86072 per unit
Explanation:
Equivalent unit of material = Units completed and transferred out + Ending Inventory
Equivalent unit of material = 354,000 + (34,000*40%)
Equivalent unit of material = 354,000 + 13,600
Equivalent unit of material = 367,600
Cost per equivalent unit of material = ($37,200 + $646,800) / 367,600
Cost per equivalent unit of material = $684,000 / 367,600 units
Cost per equivalent unit of material = $1.86072 per unit
A city engaged in the following transactions during a year: It acquired computer equipment at a cost of $40,000. It completed construction of a new jail, incurring $245,000 in new costs. In the previous year the city had incurred $2.5 million in construction costs. The project was accounted for in a capital projects fund. It sold for $16,000 land that it had acquired three years earlier for $28,000. It traded in a four‐year‐old sanitation department vehicle for a new model. The old vehicle had initially cost $27,000, its carrying value at the time of trade was $17,000, and its market value was $13,000. The city paid an additional $39,000 cash for the new model. The fair value of the new model was $52,000. Prepare journal entries to reflect the transactions in an appropriate governmental fund (e.g., a general fund or a capital projects fund). Prepare journal entries to reflect the transactions in the city's government‐wide statements.
Answer:
1. Journal entries to reflect the transactions in an appropriate governmental fund
S/N Particulars Debit ($) Credit ($)
1. Expenditure - acquisition of 40,000
computers
Cash 40,000
2. Expenditure - Construction cost 245,000
Cash 245,000
3 Cash 16,000
Other financing sources - sale of land 16,000
4 Expenditure - acquisition of vehicle 39,000
Cash 39,000
Note: Cash being asset account, decreases hence debited. Expenditure being expense account increases hence debited.
2. Journal entries to reflect the transactions in the city's government-wide statements
S/N Particulars Debit ($) Credit ($)
1. Computers 40,000
Cash 40,000
2 Construction in process 245,000
Cash 245,000
3 Buildings 2,745,000
Construction in process 2,745,000
4 Cash 16,000
Loss on sale of land 12,000
Land 28,000
5 Vehicle – new 52,000
Accumulated depreciation - 10,000
old vehicle
Loss on trade-in 4,000
Cash 39,000
Vehicle - old 27,000
Note: All assets are asset accounts increases hence debited, If decrease then credited. All expenses are expense accounts increases hence debited, if decrease then credited.
Question 7: Which of the following is true about entrepreneurs and risk?
A. Entrepreneurs take more risks than the average person.
B. Risk is an objective assessment.
C. Entrepreneurs who take greater risks tend to be more successful than those who take fewer or smaller risks.
D. Most successful entrepreneurs are very calculated risk takers
You manage a risky portfolio with an expected rate of return of 22% and a standard deviation of 34%. The T-bill rate is 6%. Your risky portfolio includes the following investments in the given proportions: Stock A 31 % Stock B 36 % Stock C 33 % Suppose that your client decides to invest in your portfolio a proportion y of the total investment budget so that the overall portfolio will have an expected rate of return of 18%. a. What is the proportion y? (Round your answer to the nearest whole number.) b. What are your client’s investment proportions in your three stocks and the T-bill fund? (Do not round intermediate calculations. Round your answers to 2 decimal places.) c. What is the standard deviation of the rate of return on your client’s portfolio? (Do not round intermediate calculations. Round your answer to 2 decimal places.)
Answer and Explanation:
A.
E(r) = y x R(rp) + (1-y)*rf
0.18 = y * 0.22+(1-y)*0.06
0.18 = 0.22y +0.06 -0.06y
Collect like terms
0.18-0.06 = 0.22y - 0.06y
0.12 = 0.16y
y = 0.12/0.16
= 0.75
= 75%
B.
Stock a = 31% x 0.75
= 0.2325
= 23.25%
Stock b = 36% * 0.75
= 0.27%
Stock c = 33% * 0.75
= 0.2475
= 24.75%
A total of all these stocks gives 100 percent
C.
We have standard deviation = 34%
Y * standard deviation
= 0.75 * 0.34
= 0.255
= 25.5%
Candlewood LLC started business on September 1, and it adopted a calendar tax year. During the year, Candlewood incurred $6,500 in legal fees for drafting the LLC's operating agreement and $3,000 in accounting fees for tax advice of an organizational nature, for a total of $9,500 of organizational costs. Candlewood also incurred $30,000 of preopening advertising expenses and $24,500 of salaries and training costs for new employees before opening for business, for a total of $54,500 of startup costs. The LLC wants to take the largest deduction available for these costs. If required, round any division to six decimal places and use in subsequent computations. Round your final answers to the nearest dollar. How much can Candlewood deduct as organizational expenses
Answer:
deduction for organizational expenses = $5,000
Explanation:
Since the total startup costs are over $50,000 then the company's deduction will be lower. Generally speaking, a company can deduct up to $5,000 in organizational an startup costs ($5,000 each). But if the costs are over $50,000, then your deduction will be reduced by $1 for each dollar over that threshold.
In this case, organizational costs were $9,500, so they can deduct $5,000 during the first year and $4,500 will be amortized over the next 15 years. Startup costs are $54,500, which means that they can only deduct $5,000 - ($54,500 - $50,000) = $500 during the first year. The remaining $54,000 must be amortized over a 15 year period. Total deduction during the first year = $5,000 + $500 = $5,500
A municipality is considering an investment in a small renewable energy power plant with the following parameters. The cost is $360,000, and the output averages 50 kW year-round. The price paid for electricity at the plant gate is $0.039/kWh. The investment is to be evaluated over a 25-year time horizon, and the expected salvage value at the end of the project is $20,000. The MARR is 6%.Calculate the NPV of this investment. Is it financially attractive? Calculate the operating credit per kWh which the government would need to give to the investment in order to make it break even financially. Express your answer to the nearest 1/1000th of dollars
Answer:
this project is not financially attractive because the NPV is negative (-$136,974.74)operating credit per kWh = $0.0245Explanation:
initial investment = $360,000
yearly cash flows 1 - 24 = 50 x $0.039 x 24 hours x 365 days = $17,082
yearly cash flow year 25 = $17,082 + $20,000 = $37,082
using a financial calculator, the present value of the yearly cash flows = $223,025.26
this project's NPV = -$360,000 + $223,025.26 = -$136,974.74
in order for this project to be profitable, NCFs should be:
$360,000 - ($20,000 / 1.06²⁵) = $355,340.03
annual earnings = $355,340.03 / 12.783 (PV annuity factor, 6%, 25 periods) = $27,797.86
total kWh = 50 x 24 x 365 = 438,000
$27,797.86 / 438,000 = $0.063465 per kWh
operating credit = $0.063465 - $0.039 = $0.0245
On March 2, 2015, Best Buy co. announced that it planned to repurchase up to $1 billion of its common shares. The company also announced on that day that an increase in its quarterly dividend from $0.19 to $0.23 per share, and a one-time special dividend of $0.51 per share. The special dividend resulted from a windfall legal settlement related to manufacture of liquid crystal displays it had sold. Which method of returning capital to investors (repurchases, regular dividends, special dividends) do you think is viewed by shareholders most favorably, and why
Answer:
Follows are the solution to this question:
Explanation:
The company sold the quantum dot produce will have a huge amount of money in the company, shareholders may have differing opinions to use that money the holds the surplus. As capital becomes kept, this hardly increases the value of a business or takes the investors through their pockets.
Position of the investor on (repurchasing, earnings)
Payout and buyback of shares are considered a factor influencing shareholders' interest and some factors are based on investor interest.
Current income source
Many investors can only be the source of revenue for such investors so that they'd prefer to have a regular dividend. Then the more current revenue you earn its most beneficial is a unique dividend. Share buybacks as an opportunity to share in order to collect large sums of cash.
Productive investments value
Those who become shareholders that must increase the asset's lengthy-term price, — for example stock values by companies investing in positive NPV ventures and in this case increase the interest of existing investors.
Improved future dividend
Just after the purchase of shares in share price issuance, a number of shares will be limited, and effective dividends rise per share. It means that an investor will acquire a further equity interest in the business by buying back preferred stock.
Focused on the hypotheses of dividends, repurchases, or portion share price plus repurchases, there are many mainly three opinions.
Many people would prefer the $0.51 dividend payment as a sum of money that was received in the case of a dividend. And at the same time, there will be an idea that the dividends must be paid regularly as well as the remaining cash must buy safely.
HELPPP MEEE ILL MARK YOU BRAINLIEST
what is the difference between salary and fixed rate (give an example for both)
Answer:
salary is a lump sum for work and fixed rate is a fixed rate that changes with amount of hours worked.
Explanation:
salary is a lump sum for work and fixed rate is a fixed rate that changes with amount of hours worked.
Brainliest appreciated!
In 2006, the nation of Zimbabwe reduced the value of its currency by 60 percent to bring its value more in line with the relative value of most other world currencies. This reduction of value is called
Answer: C. devaluation
Explanation:
Devaluation of a currency is the term used to describe the reduction of a currency's value by the authority that produces said currency.
It is done deliberately and is usually done to strengthen a country's balance of trade because the exports of the country will become cheaper which will increase the demand for it.
By reducing the value of their currency themselves, the nation of Zimbabwe devalued their currency in 2006.
Explanation:
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Making the pro-forma financial statements as complicated as possible is always best
Answer:
false
Explanation:
The following transactions occurred during the month of June 2013 for the Stridewell Corporation. The company owns and operates a retail shoe store.a. Issued 100,000 shares of common stock in exchange for $500,000 cash.b. Purchased furniture and fixtures at a cost of $100,000. $40,000 was paid in cash and a note payable was signed for the balance owed.c. Purchased inventory on account at a cost of $200,000. The company uses the perpetual inventory system.d. Credit sales for the month totaled $280,000. The cost of the goods sold was $140,000.e. Paid $6,000 in rent on the store building for the month of June.f. Paid $3,000 to an insurance company for fire and liability insurance for a one-year period beginning June 1, 2013.g. Paid $120,000 on account for the merchandise purchased in transaction c.h. Collected $55,000 from customers on account.i. Paid shareholders a cash dividend of $5,000.j. Recorded depreciation expense of $2,000 for the month on the furniture and fixtures.k. Recorded the amount of prepaid insurance that expired for the month.Required:Prepare journal entries to record each of the transactions and events listed above. (If no entry is required for a particular transaction, select "No journal entry required" in the first account field.)
Answer and Explanation:
The Journal entries are prepared below:-
1. Cash Dr, $500,000
To Common stock $100,000
To Paid in capital of par $400,000
(Being issue of shares in excess of par is recorded)
2. Furniture and fixtures Dr, $100,000
To Cash $40,000
To Notes payable $60,000
(Being purchase of furniture and fixtures is recorded)
3. Inventory Dr, $200,000
To accounts payable $200,000
(Being inventory on account is recorded)
4. Accounts receivable Dr, $280,000
Cost of goods sold Dr, $140,000
To Sales $280,000
To Inventory $140,000
(Being credit sales is recorded)
5. Rent expenses Dr, $6,000
To Cash $6,000
(Being rent paid is recorded)
6. Prepaid insurance Dr, $3,000
To Cash $3,000
(Being insurance paid for one year is recorded)
7. Accounts payable Dr, $120,000
To Cash $120,000
(Being purchase of goods is recorded)
8. Cash Dr, $55,000
To Accounts receivable $55,000
(Being collection from customers on account is recorded)
9. Dividend Dr, $5,000
To Cash $5,000
(Being cash dividend to shareholders is recorded)
10. Depreciation expense Dr, $2,000
To Furniture and fixtures $2,000
(Being depreciation furniture and fixtures is recorded)
11. Insurance expense Dr, $250
To Prepaid insurance $250
(Being insurance expense for the month is recorded)
Tanya Fletcher owns undeveloped land (adjusted basis of $80,000 and fair market value of $92,000) on the East Coast. On January 4, 2017, she exchanges it with Lisa Martin (an unrelated party) for undeveloped land on the West Coast and $3,000 cash. Lisa has an adjusted basis of $72,000 for her land, and its fair market value is $89,000. As the real estate market on the East Coast is thriving, on September 1, 2018, Lisa sells the land she acquired for $120,000.If an amount is zero, enter "0".a. On January 4, 2017, Tanya's realized gain for the West Coast land is $, her recognized gain is $, and her adjusted basis is $.b. On January 4, 2017, Lisa's realized gain for the East Coast land is $, her recognized gain is $, and her adjusted basis is $.c. Lisa's realized gain from the September 1, 2018, sale is $. Her recognized gain from the September 1, 2018 sale is$.d. What effect does Lisa's 2018 sale have on Tanya?Lisa’s sale of the East Coast land has for Tanya.e. Complete the letter to Tanya advising her of the tax consequences of this exchange.
Answer:
Following are the solution to the given point:
Explanation:
In point a:
Sum of:
= ($89,000 + $3,000)
= $92,000
Modified foundation= -$80,000
A real profit= $12,000
Gain (boot received) recognised = $3,000
Tanya's West Coast Changed Base:
Fair Market = $89,000
Posted benefit:
= ($ 12,000- $ 3,000)
= $ 9,000
Adjusted Base =$80,000
In part b:
Realized benefit calculation:
Sum of = $92,000
Modified Base =$72,000 + $3,000 = $75,000
A real profit= $17,000
gain was accepted = $0
Changed base of Martin to the West Coast:
Fair Market = $92,000
Gain deferred = ($17,000-$0) = $ 17,000
Adjusted Base = $75,000
In point c:
Recognized benefit from Martin:
Value = $1,20,000
Base adjusted= $ 75,000
actual gain = $45,000
Gain Recognized= $45,000
In point d:
Tanya has little effect mostly on selling by Lisa of an eastern seaboard ground. There is no supposed selling care among Lauren and Tanya after selling property on the eastern seaboard since they are unrelated parties.
In point e:
sum of = $92,000.
Tanya 's acceptable basis is $80,000 ($89,000-($12,000-$3,000)).
actual benefit = $ 12,000
gain benefit = $3,000
Since the trade is deemed a non-taxable trade, $3,000 is recognized of the total $12,000 benefit. Its ground earned is $80,000 adjusted.
Use the following information to answer the question below:
Acquirer purchases 100% of target by issuing $100 million in new debt to purchase target shares, carrying an interest rate of 10%
Excess cash is used to help pay for the acquisition
Acquirer expects to be able to close down several of the target company’s old manufacturing facilities and save an estimated $2 million in the first year
Target PP&E is written up by $25 million to fair market value
Investment bankers, accountants, and consultants on the deal earned $30 million in fees
Which of the following adjustments would be made to the pro forma income statement?
a) Advisory fee expense of $30 million
b) Depreciation expense increase due to PP&E write-up
c) Pre-tax synergies of $2 million
d) All of the above
Answer:
d) All of the above
Explanation:
Pro forma income statements are basically estimated or expected income statements which do not necessarily comply with US GAAP norms (are not useful in legal terms), but should reflect future outcomes.
In this case, Acquirer didn't simply decide to purchase Target and carried the operation immediately. The process is long and complicated and many times companies negotiate fair values and future cash flows. If you analyze the acquisition process of Whole Foods by Amazon it is very interesting. After negotiations Amazon paid 4 times the capitalization value of Whole Foods.
Before the actual process ends, Acquirer should present a pro forma statement and it must include all the relevant issues about the merger. They already know how much the transaction will cost, what actions will be taken to increase profits and any other major event.
A business has fixed costs of $45,000 per month and a variable costs of $32,000 per month . What is the average total cost of 7,700 units
Answer:
$10 per unit
Explanation:
The average total cost (AC) is the estimated per-unit cost in a given output. The formula for calculating the average cost
=(Total fixed costs + total variable costs) / number of units produced = average total cost.
Adding Total fixed cost to total variable cost equal to Total cost (TC)
For this business, the average total costs
=$45,000 + $32,000 /7,700
=$77,000/7700
=$10
AC= $10 per unit
A problem of interest to health officials (and others) is to determine the effects of smoking during pregnancy on infant health. One measure of infant health is birth weight; a birth weight that is too low can put an infant at risk for contracting various illnesses. Since factors other than cigarette smoking that affect birth weight are likely to be correlated with smoking, we should take those factors into account. For example, higher income generally results in access to better prenatal care, as well as better nutrition for the mother. An equation that recognizes this is bwght 5 b0 1 b1cigs 1 b2 faminc 1 u. (i) What is the most likely sign for b2
Answer:
β2 should have a positive sign
Explanation:
The regression equation is:
βwght = β0+β1cigs+β2faminc+μ
The equation tells us that the birth weight of a child is dependent on factors like cigarette consumption and family income.
β1 should have a negative sign because smoking during pregnancy has an adverse effect on birth weight. So there would be a negative correlation between birth weight and cigarette consumption.
β2 should have a positive sign. This is because while pregnant, a family with more income has the ability to provide better prenatal care and also better nutrition to the expectant mother. Therefore we have a positive correlation.
