Lexington Garden Supply pays $ 280,000 for a group purchase of land, building, and equipment. At the time of acquisition, the land has a current market value of $ 93,000 , the building's current market value is $ 186,000 , and the equipment's current market value is $ 31,000. Prepare a schedule allocating the purchase price of $ 280,000 to each of the individual assets purchased based on their relative market values, then journalize the lump-sum purchase of the three assets. The business signs a note payable for the purchase price.
Begin by preparing a schedule allocating the purchase price of $280,000.
Market (Sales) Value Percentage of Total Market Value Cost of Asset
Land
Building
Equipment
Total
Date Accounts Debit Credit
Account choices:
Accounts Debit Credit
Building
Cash
Equipment
Land
Note Payable
Note Receivable
Now journalize the lump-sum purchase of the three assets. The business signs a note payable for the purchase price.
Answers
Answer:
Given:
Current market value:
Land = $93,000
Building = $186,000
Equipment = $31,000
We are required to prepare a schedule allocating the purchase price of $280,000.
The schedule is prepared below.
___________________________
Market (Sales) Value:
Land= $93,000;
Building= $186,000;
Equipment= $31,000;
Total= 310,000(93,000+186,000+31,000)
____________________________
% of Total Market Value:
Land= 30%(93,000/310,000);
Building= 60%(186,000/310,000); Equipment= 10%(31,000/310,000)
Total = 100%
____________________________
Cost of Asset:
Land= 84,000(30%*280,000)
Building = 168,000(60%*280,000)
Equipment = 28,000(10%*280,000)
Total = 280,000(84,000+168,000+28,000)
____________________________
b) To journalize the lump-sum purchase of the three assets.
Account title:____Debit: _____Credit:
Land _________84,000______0
Building_______168,000_____0
Equipment _____28,000______0
Note payable_____0_______280,000
Answer is attached for easier understanding.
Related Questions
Lily Products Company is considering an investment in one of two new product lines. The investment required for either product line is $540,000. The net cash flows associated with each product are as follows:Year Liquid Soap Body Lotion 1 $170,000 $90,000 2 150,000 90,000 3 120,000 90,000 4 100,000 90,000 5 70,000 90,000 6 40,000 90,000 7 40,000 90,000 8 30,000 90,000Total $720,000 $720,000a. Recommend a product offering to Lily Products Company, based on the cash payback period for each product line. b. Why is one product line preferred over the other, even though they both have the same total net cash flows through eight periods?
Answers
Answer:
Liquid soap
B. The liquid soap would be chosen because its pay back period is shorter than that of the body lotion.
even though both projects have the same total cash flows, the liquid soap project has greater cash flows in the ealier years compared to the other project. This makes the amount invested to be recovered more quickly and this makes it more desirable.
Explanation:
Cash payback period measures how long it takes for the amount invested in a project to be recovered from the cumulative cash flow.
Cash payback for the liquid soap.
Amount invested = $-540,000
In the first year , the amount recovered = $- 540,000 + $170,000 = $-370,000
In the second year , the amount recovered = $-370,000 + 150,000 = $-220,000
In the third year , the amount recovered = $- 220,000 + 120,000 =$ -100,000
In the 4th year, the amount recovered = $ -100,000 + $100,000 =0
The total amount invested is recovered In the 4th year
Cash payback period for the body option =
Amount invested / net cash flows
$540,000 / $90,000 = 6 years
The amount invested is recovered In the 6th year
The liquid soap would be chosen because its pay back period is shorter than that of the body lotion.
even though both projects have the same total cash flows, the liquid soap project has greater cash flows in the ealier years compared to the other project. This makes the amount invested to be recovered more quickly and this makes it more desirable.
I hope my answer helps you
Miscavage Corporation has two divisions: the Beta Division and the Alpha Division. The Beta Division has sales of $580,000, variable expenses of $301,600, and traceable fixed expenses of $186,500. The Alpha Division has sales of $510,000, variable expenses of $178,500, and traceable fixed expenses of $222,100. The total amount of common fixed expenses not traceable to the individual divisions is $235,500. What is the company's net operating income? Select one: a. $374,400 b. $201,300 c. $609,900 d. ($34,200)
Answers
Answer:
Net income= -$34,200
Explanation:
Giving the following information:
Beta Division:
Sales= $580,000
Variable expenses= $301,600
Traceable fixed expenses of $186,500.
Income= 91,900
Alpha Division:
Sales of $510,000
Variable expenses of $178,500
Traceable fixed expenses of $222,100.
Income= 109,400
The total amount of common fixed expenses not traceable to the individual divisions is $235,500.
We need to deduct from the income of each division the not traceable fixed costs.
Net income= 91,900 + 109,400 - 235,500
Net income= -$34,200
Managers use a predetermined overhead rate for which of the following reasons?
A. To estimate total job costs before the job is completed.
B. To assist in setting prices for jobs
C. Predetermined costs are more accurate than using actual costs
D. Total job costs are not needed until the end of the accounting period, so predetermined rates are not needed.
Answers
Answer:
Option A and B
Explanation:
The company desires to estimate the cost of the job so that it can minimize it by emphasizing control. This is one of the major reasons why the companies estimate cost of the job, product or service. So option A is correct.
Option B is also correct because the companies have to form contracts with its customers and for that reason predetermined overhead rates helps a lot estimating the price of the product which the company and customer can agree upon.
Option C is incorrect because predetermined costs are estimates and estimates are not always accurate.
Option D is false because daily recording of overheads requires predetermined overhead rates which is adjusted at the month end or quarter end or year end. So its not useless at all.
A manager is considering purchasing data from an outside vendor to get a better understanding of the target market for his firms services. What factors should the manager consider when evaluating the data’s usefulness for his needs?
Answers
Answer: Relevance, Quality, timelessness and Completeness.
Explanation:
Relevance: This helps show the importance of the data gotten. And how this relevant data if applied can change or alter the solutions or problems of the target market.
Quality: This helps determine that the data gotten actually reflects the reality or happenings in the target market.
Completeness: this means the data gotten by the manager has the right informations needed or which are relevant to the target market.
Timelessness: this helps determine that the data gotten are not out of date or obsolete but rather useful to manager in studying the target market
Discuss the statement: 'Silence is golden' in approximately a hundred words in relation to ethics in communication at the workplace
Answers
Answer:
Silence is golden is the business strategy used by many organizations in relation to communication ethics. The business communication is effective when that precise and correct information is circulated. When there is culture of unnecessary talks in business there can be unhealthy arguments and excessive criticisms which may ruin business strategies. Business ethics is implementing strategies which are to be followed by all employees. The strategies are formed after keeping in mind concerns of all stakeholders including how to treat employees. The silence can be a business ethics strategy to avoid gossips, as it may lead to negative consequences at the workplace.
Explanation:
Silence is golden is the business strategy used by many organizations in relation to communication ethics. The business communication is effective when that precise and correct information is circulated. When there is culture of unnecessary talks in business there can be unhealthy arguments and excessive criticisms which may ruin business strategies. Business ethics is implementing strategies which are to be followed by all employees. The strategies are formed after keeping in mind concerns of all stakeholders including how to treat employees. The silence can be a business ethics strategy to avoid gossips, as it may lead to negative consequences at the workplace.
On January 1, 2020, Crane Corporation issued $660,000, 6%, 10-year bonds at face value. Interest is payable annually on January 1. Crane Corporation has a calendar year end.Prepare all entries related to the bond issue for 2020. (Credit account titles are automatically indented when the amount is entered. Do not indent manually.)2020Account Titles and ExplanationDebitCreditenter an account title for the journal entry on January 1enter a debit amount enter a credit amount enter an account title for the journal entry on January 1enter a debit amount enter a credit amount enter an account title for the journal entry on December 31enter a debit amount enter a credit amount enter an account title for the journal entry on December 31enter a debit amount enter a credit amount
Answers
Answer:
Dr cash $660,000
Cr bonds payable $660,000
Dr interest expense $ 39,600.00
Cr interest payable $39,600.00
Explanation:
The issue of the bonds at face value implies that cash proceeds equal the face value of $660,000 which is then debited to cash account and credited to bonds payable.
The interest due on the bonds on 31st December payable on 1st January 2021 =face value*coupon rate
face value is $660,000
coupon rate is 6%
interest=$660,000*6%=$39,600.00
As a human resources manager three selection measures you could use to select your targeted employees in 5star international resort.
Answers
Answer:
Selection measures simply refer to the yardstick that HR Managers or businesses use to make hiring decisions.
Three litmus tests which the successful candidate must pass are:
1. Culture Fit: An International Resort business with a 5-star rating must have gotten there with the right values, and culture. When a candidates attitudes, beliefs and values mirror that of the organisation, they are said to be culture fit.
2. Job Fit: It is the job of the Human Resources manager to ensure that the candidate can do the job. He or she can achieve this by using various recruitment, selection and interview. For a 5 Start International Resort, for instance, the employees must be very people-centric, courteous and display high levels of social and emotional intelligence.
3. Background Checks: Having satisfied the first two criteria, the prospective employees must have strong references and background checks which reveal:
consistency in the information provided during the application process; and good standing with their current and or previous employer/colleagues.
Cheers!
Based on the following data and using a 365-day year:
12/31/Year 1 accounts receivable $100,000
12/31/Year 2 accounts receivable 70,000
For the year ended 12/31/Year 1, sales 1,050,000
For the year ended 12/31/Year 2, sales 1,200,000
A. Compute the accounts receivable turnover.
B. Compute the number of days' sales in receivables for year.
C. The industry average turnover is 20 times during the year, and the number of days' sales in receivables averages 25. How does this situation compare to the industry average?
D. Is it slightly better or slightly worse than the average?
Answers
Answer:
A. 14 times
B. 21 days
C. For accounts receivable turnover, the computed 14 days is less than the industry average of 20. For the the number of days' sales in receivables, the computed 21 days is less than the industry average of 25.
D. It is slightly better than the average
Explanation:
Note that the relevant year this question is related is Year 2 which is the latest year. The questions are therefore answer as follows:
A. Compute the accounts receivable turnover.
Average accounts receivable = (12/31/Year 1 accounts receivable + 12/31/Year 2 accounts receivable) / 2 = $100,000 + $70,000 = $85,000
Accounts receivable turnover = Year 2 Sales / Average accounts receivable = $1,200,000 / $85,000 = 14.12, or approximately 14 times
B. Compute the number of days' sales in receivables for year.
Number of days' sales in receivables for year 2 = (Year 2 accounts receivable / Year 2 Sales) * 365 = ($70,000 / $1,200,000) * 365 = 21.29, or approximately 21 days
C. The industry average turnover is 20 times during the year, and the number of days' sales in receivables averages 25. How does this situation compare to the industry average?
The computed accounts receivable turnover of 14 times is less than the industry average turnover of 20 times.
Also, the computed number of days' sales in receivables for year 2 of 21 days is less than the industry average number of days' sales in receivables of 25 days.
D. Is it slightly better or slightly worse than the average?
For accounts receivable turnover, it is slightly better than average as the computed one indicates that the business can 14 times turn its accounts receivable into cash during the year as against 20 times industry average which is higher.
Also for the number of days' sales in receivables for year, it is slightly better than average as the computed one indicates that it takes the business just 21 days to collect cash from his customers on average as against the 25 days industry average which is higher.
Both therefore indicates that It is slightly better than the average.
Tyare Corporation had the following inventory balances at the beginning and end of May: May 1 May 30 Raw materials $ 35,000 $ 49,000 Finished Goods $ 84,500 $ 85,000 Work in Process $ 23,000 $ 17,963 During May, $68,000 in raw materials (all direct materials) were drawn from inventory and used in production. The company's predetermined overhead rate was $12 per direct labor-hour, and it paid its direct labor workers $15 per hour. A total of 490 hours of direct labor time had been expended on the jobs in the beginning Work in Process inventory account. The ending Work in Process inventory account contained $8,000 of direct materials cost. The Corporation incurred $44,850 of actual manufacturing overhead cost during the month and applied $45,300 in manufacturing overhead cost. The actual direct labor-hours worked during May totaled:
Answers
$7,700
Explanation:
$18,500 - $6,000 - $4,800 = 7,700
Assume an asset cost $72,800 and has a current book value of $42,760. The asset is sold today for $32,900 cash. The firm's tax rate is 21 percent. As a result of this sale, the firm's net cash flow: 1. will increase by more than $32,900. 2. will increase by less than $32,900. 3. will increase by exactly $32,900 4. will decrease by the difference between the $42,760 and the $32,900.
Answers
Answer:
As a result of this sale, the firm's net cash flow will increase by more than $32,900. The right option is 1.
Explanation:
According to the given we have the following:
asset cost= $72,800
current book value=$42,760
sale=$32,900
Therefore, loss=current book value-sale
loss=$42,760-$32,900
loss=$9,860
tax saving on loss=$9,860*21%=$2,070.60
Therefore, net cash flow=$32,900+$2,070.60
net cash flow=$34,970.60
As a result of this sale, the firm's net cash flow will increase by more than $32,900
When domestic firms enter other countries, they must typically deal with a number of issues related to their advertising. These include all of the following except: language barriers limited media available high-priced media markets lack of accurate media information
Answers
Answer: limited media available
Explanation:
When domestic firms enter into another country, they typically deal with a number of issues that are related to their advertising. One of the issue is language barrier. From example, if a firm that come from an English speaking country moves to another country like France which is French speaking, this can bring about a language barrier due to the language difference.
Other challenges are high-priced media markets and the lack of accurate media information. Dur to th fact that they're just moving into a different country, they may be charged higher than the normal price and may not have the accurate media information that are needed.
Therefore, limited media available is the right option because this is not a challenge. Media availability is usually available for everyone.
A recent medical study reports new benefits of cycling. Simultaneously, the price of the parts needed to make bikes falls. The demand curve would _________ and the supply curve would__________
Answers
Answer:
The demand curve would shift to the right and the supply curve would shift to the right
Explanation:
There will be a right shift in demand curve when there is an increase in demand, while there will be a right shift in supy curve when there is an increase in number of sellers or suppliers.
Here, a new medical study reports the benefits of cycling, and the price of parts needed to make bikes fall simultaneously, it is believed that the demand for bikes would increase.
Also, considering the fact that parts needed to produce bikes fall, there would likely be more producers of bike and this will also increase the supply of bikes.
Therefore, since there would be an increase in demand and supply of bikes, the demand curve for bikes would shift to the right and the supply curve would also shift to the right.
Which statement best describes the trait of being tactful? A. ability to be humble in every situation B. ability to remain stress free C. ability to deal with others, especially in difficult situations D. ability to comply with given instructions E. ability to arrive at work on time
Answers
Answer:
C) Tactful means to be sensitive, thoughtful, and just constantly do the right thing each time. Thus, if you are able to deal with others properly, especially in complex and difficult situations, it shows that you are thoughtful of others feelings and do the right thing.
The correct option is C.
What is a tactful personality?
Tact is the ability, to tell the truth, and to consider other people's feelings and reactions. It allows you to give difficult feedback, communicate sensitive information, and say the right thing to preserve relationships.
What is tactful assertiveness?Being tactful means acting with sensitivity and respect. While tact requires a certain amount of thoughtfulness, it doesn't come at the expense of assertiveness. Sometimes assertiveness is incorrectly thought to be the same as aggressiveness.
Learn more about being tactful here https://brainly.com/question/15178364
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New Vision Company completed its income statement and balance sheet and provided the following information:
Service Revenue $66,000
Expenses:
Salaries and Wages $42,000
Depreciation 7,300
Utilities 6,000
Office 1,700 57,000
Net Income $9,000
Decrease in Accounts Receivable $12,000
Paid Cash for Equipment 5,000
Increase in Salaries and Wages Payable 9,000
Decrease in Accounts Payable 4,250
Required:
1. Present the operating activities section of the statement of cash flows for New Vision Company using the indirect method
2 Of the potential causes of differences between cash flow from operations and net income, which are the most important to financial analysts?
Answers
Answer:
1.$33,050
2.Changes that occured in the management of a company or organisation operating activities as well as those that occured in revenue and expense recognition .
Explanation:
New Vision Company operating activities section of the statement of cash flows
(INDIRECT METHOD)
Cash flow from operating activity :
Net Income 9,000
Adjustment to reconcile net income to cash provided by operating activities:
Depreciation 7300
Change in current assets and current liabilities:
Decrease in account receivable 12,000
Increase in salaries payable 9,000
Decrease in account payable (4,250)
(12,000+9,000-4,250) 16,750
Cash flow from operating activity (9,000+7,300+16,750) 33,050
2.Changes that occured in the management of a company or organisation operating activities as well as those that occured in revenue and expense recognition .
Mr. Pine, a self-employed engineer in Boston, traveled to Chicago in order to attend a course on new engineering techniques. He spent 2 weeks attending the course and remained in Chicago for an additional 6 weeks on personal matters. The air flight cost $200, hotel $600, meals $320, and the tuition for the course $500. How much of these expenses may Mr. Pine deduct on his return
Answers
Answer:
$930
Explanation:
Kindly check attached picture for explanation
features of a cover note
Answers
Answer:
It will be:
a) Address and date
b) salutation
c) Body of letter.
d) Conclusion.
Explanation:
The first one is address.
The second one is one's greetings.
The third one is: one's purpose of writing the letter.
The last is the rounding up of the letter.
What were the company's cumulative earnings over these four quarters? What were its cumulative cash flows from operating activities? b. What fraction of the cash from operating activities was used for investment over the four quarters? c. What fraction of the cash from operating activities was used for financing activities over the four quarters?
Answers
Answer: The answers are given below
Explanation:
A diagram relating to the question was gotten and the answers are provided below.
a. Cumulative earnings over four quarters will be:
= 276625 + 229066 + 194168 + 218413 = $918,272 (in $000)
Cumulative cash flow from the operating activities will be:
= 227333 + 13837 + 717808 + 254475
= $1,185,779 (in $000)
b. Total cash flows from the investing activities will be:
= 196,746 + 35,305 + 251,178 + 96,973 = $580,202 (in $000)
The fraction used in the investment of cash flow from the operating activities will be:
= (580202 ÷ 1185779) × 100
= 48.93%
c. Total cash flows from the financing activities will be:
= 462948 + 13401 + 526169 + 96143
= $172,768 (in $000)
The fraction used in the financing of cash flow from the operating activities will be:
= (172768/1185779) × 100
= 14.57%
identify and discuss five ways that companies can work more closely to achieve efficient management of procurement system in Ghana
Answers
Answer: More people can come to work and do their job, but also management can work together, if they come together then they can sale more things and both of their business can go up.
Explanation: I say this because, not all companies work together because their always trying to go against each other and instead of helping one an other be great together.
rene’s Dairy is deciding whether or not to enter the market for ice cream, currently monopolized by Mattie’s Ice-cream. If it enters the market, Mattie’s can either accommodate him and share his 10million in profits equally with Irene or fight him and cause a 5million loss for each in a price war. What would the Nash equilibrium be in this sequential game?
Answers
Answer:
Enter, accommodate
Explanation:
Nash equilibrium is a concept of game theory that stated that the optimal outcome for an entity is that they have no incentive to deviate from their original strategy after considering their opponent's choice.
It is a logical and mathematical way by which an entity determines the best outcome for themselves.
In this scenario the best option is to Enter and accommodate.
For Irene if they enter and accommodate the most optimal outcome is that they will get $5 million in profits. If they fight they will lose $5 million. They will enter because they know Mattie will lose $5 million is they fight.
For Mattie if they fight Irene they will lose $5million which is worse that sharing their profit.
So the best option after considering beach other's strategy is to accommodate and share the profits
Meson Productions is a price taker. Meson produces large spools of electrical wire in a highly competitive market; thus, the company uses target pricing. The current market price of the electric wire is $770 per unit. The company has $3,000,000 in average assets, and the desired profit is a return of 5% on assets. Assume all products produced are sold. The company provides the following information:
Sales volume 110,000 units per year
Variable costs $660 per unit
Fixed costs $14,000,000 per year
If variable costs cannot be reduced, how much reduction in fixed costs will be needed to achieve the profit target?
A. $7,750,000
B. $7,600,000
C. $12,150,000
D. $12,000,000
Answers
Answer:
Instructions are below
Explanation:
Giving the following information:
The current market price of the electric wire is $770 per unit.
The company has $3,000,000 in average assets, and the desired profit is a return of 5% on assets.
Sales volume 110,000 units per year
Variable costs $660 per unit
Fixed costs $14,000,000 per year
The company's objective is 5% of average assets. In this case, $150,000.
Total contribution margin= 110,000*110= 12,100,000
Fixed costs= (14,000,000)
Net operating profit= (1,900,000)
Target profit= 150,000
Target fixed costs= Contribution margin - target profit
Target fixed costs= 12,100,000 - 150,000= 11,950,000
Prove:
Total contribution margin= 110,000*110= 12,100,000
Fixed costs= (11,950,000)
Net operating profit= 150,000
Based on this case study, what issues with China-based suppliers require Numi’s managers to use influence and persuasion tactics? 4marks- 150 words How does Numi get suppliers to comply with its policies? 6 marks - 250 words
Answers
Answer and Explanation:
The key issues with either the distributor region of China being spiritual and societal differences. The difference comes with both the wages as well as, consequently, with both the market value including its provisions requiring Numi to also be adversely affected.Numi has always been making its providers adapt towards its policy initiatives by building intentional, significant linkage with agricultural partner organizations verify the accuracy and reliability including its product, truthful treatment of workers, strengthened operating or housing environment as well as, conclude, improvement in the quality of life besides parents and the community. Group members explore the country to visit our agricultural relationships many magnitudes a year.Numi intends to also include 3rd parties credentials throughout the entire line with Numi Organic Tea products. Numi deals in contact with some of its suppliers which helps everyone to locate the best employees and assists them with shared resources only whether they can adapt to such operations.So that the above seems to be the right answer.
Determine whether each of the following topics would more likely be studied in microeconomics or microeconomics.1. The effect of a large government budget deficit on the economy's price levela. microeconomicsb. macroeconomics2. The effect of an increase in the money supply on the rate of inflationa. microeconomicsb. macroeconomics3. The effect of government regulation on a monopolist's production decisionsa. microeconomicsb. macroeconomics
Answers
Answer:
1. B
2. B
3. A
Explanation:
1. The effect of a large government budget deficit on the economy's price level: is Macroeconomics.
2. The effect of an increase in the money supply on the rate of inflation: is Macroeconomics.
3. The effect of government regulation on a monopolist's production decisions: is Microeconomics.
Generally, Economics can be classified into two (2) categories, namely;
1. Macroeconomics can be defined as the study of behaviors, performance and factors that affect the entire economy. Hence, it focuses on aggregate phenomena such as price level, economic growth, Gross Domestic Product (GDP), inflation, unemployment and national income levels with respect to the central bank, demand or supply shocks, government policies, aggregate spending and savings.
2. Microeconomics can be defined as the study of the effect of price and quantity levels through interactions between individual buyers and sellers in various markets.
Hence, it is focuses on analyzing or evaluating the decisions of consumers (buyers) and those of firms (sellers) such as methods of production, pricing; and the manner in which government policies affect those decisions.
A small fast-food restaurant is automating its burger production. The owner needs to decide whether to rent a machine that can produce up to 2,000 hamburgers per week at a marginal cost of $1 per burger (excluding the cost of ingredients) or another machine that can also make up to 2,000 burgers per week but at a marginal cost of $0.50 per burger (again, excluding the cost of ingredients).
The weekly lease for the machine with the higher marginal cost is $2,300. The weekly lease for the machine with the lower marginal cost is $2,760. The restaurant can sell burgers for $10 per burger, and the cost of ingredients for each burger is $2.
Suppose the restaurant leases the machine with the higher marginal cost for the first week and sells 2,000 burgers that week. The restaurant owner earned profits of $ ___________ in the first week.
Suppose now the restaurant leases the machine with the lower marginal cost for the second week and again sells 2,000 burgers that week. The restaurant owner earned profits of $ _________ in the second week.
Answers
Answer:
$11,700 and $12,240
Explanation:
According to the scenario, computation of the given data are as follow:-
Total Revenue = No. of Sale Units × Selling Price Per Unit
= 2,000 × $10
= $20,000
In case if the restaurant lease the machine with the higher marginal cost, restaurant owner earned profits
= Total Revenue - Total Cost
where,
Total cost is is Fixed cost + variable cost
Variable Cost = No. of Sale Units × (Marginal Cost + Cost of Ingredients for Each Burger)
= 2,000 × ($1 + $2)
= $6,000
Total Cost = Fixed Cost + Total Variable Cost
= $2,300 + $6,000
= $8,300
And, the total revenue is $20,000
So, the profit earned is
= $20,000 - $8,300
= $11,700
In case if the restaurant lease the machine with the lower marginal cost, restaurant owner earned profits
= Total Revenue - Total Cost
where,
Total cost is Fixed cost + variable cost
Variable Cost = No. of Sale Units × (Marginal Cost + Cost of Ingredients for Each Burger)
= 2,000 × ($0.50 + $2)
= $5,000
Total Cost = Fixed Cost + Total Variable Cost
= $2,760 + $5,000
= $7,760
And, the total revenue is $20,000
So, the earned profit is
= $20,000 - $7,760
= $12,240
Assume the following information for Teal Mountain Corp.
Accounts receivable (beginning balance) $143,000
Allowance for doubtful accounts (beginning balance) 11,340
Net credit sales 930,000 Collections 912,000
Write-offs of accounts receivable 6,400
Collections of accounts previously written off 2,200
Uncollectible accounts are expected to be 6% of the ending balance in accounts receivable.
1. Prepare the entries to record sales and collections during the period.
2. Prepare the entries to record the recovery of the uncollectible account during the period.
3. Determine the ending balance in Accounts Receivable and the unadjusted balance in Allowance for Doubtful Account.
4. Prepare the entry to record bad debt expense for the period.
5. Determine the ending (adjusted) balance in Allowance for Doubtful Accounts.
Answers
Answer:
Teal Mountain Corp.
1. Entries to record sales and collections during the period:
Debit Accounts Receivable $930,000
Credit Sales Revenue $930,000
To record credit sales.
Debit Cash Account $912,000
Credit Accounts Receivable $912,000
To record cash collections.
2. Entries to record recovery of the uncollectible account:
Debit Cash Account $2,200
Credit Allowance for doubtful accounts $2,200
To record uncollectible previously written off
3. Ending balance in Accounts Receivable and unadjusted balance in Allowance for Doubtful Account:
Accounts Receivable
Beginning balance $143,000
Credit Sales 930,000
Collections -912,000
Write-offs - 6,400
Balance $154,600
Allowance for Doubtful Accounts (Unadjusted)
Beginning balance $11,340
Uncollectible written off -6,400
Uncollectible collections 2,200
Balance (unadjusted) $2,740
4. Entry to record bad debt expense for the period:
Debit Bad Expense $6,536
Credit Allowance for Doubtful Accounts $6,536
To bring the balance to $9,276.
5. Adjusted ending balance in Allowance for Doubtful Accounts = $9,276
Explanation:
6% of accounts receivable = $154,600 x 6% = $9,276
Dome Metals has credit sales of $522,000 yearly with credit terms of net 30 days, which is also the average collection period. Assume the firm adopts new credit terms of 2/10, net 30 and all customers pay on the last day of the discount period. Any reduction in accounts receivable will be used to reduce the firm's bank loan which costs 8 percent. The new credit terms will increase sales by 10% because the 2% discount will make the firm's price competitive. a. If Dome earns 25 percent on sales before discounts, what will be the net change in income if the new credit terms are adopted? (Use a 360-day year.)
Answers
Answer:
The net change in income if the new credit terms are adopted would be of $ 3,770
Explanation:
In order to calculate the net change in income if the new credit terms are adopted we would have to make first the following calculations:
New sales after new credit terms = ($522,000*110%)
New sales after new credit terms = $ 574,200
Increase in profit from newsales = (Profit % * New sales)
Increase in profit from newsales = (25%*($574,200-$522.000))
Increase in profit from newsales = $ 13,050
Average accounts receivable balance without discount = (Average collection period*Average daily sales)
Average accounts receivable balance without discount = (30*($522,000/360))
Average accounts receivable balance without discount = $ 43,500
Average accounts receivable balance with discount = (Due in days with discount*Average daily sales)
Average accounts receivable balance with discount = (10*($574,200/360)) Average accounts receivable balance with discount = $ 15,950/.
Reduction in accounts Receivable = ($43,500-$15,950)
Reduction in accounts Receivable = $ 27,550
Interest savings is = (Reduction in accounts receivable*firm's bank loan cost)
Interest savings is = ($27,550*8%)
Interest savings is = $ 2,204
Cost of discount = (Discount rate * Sales) = (2%*$574.200) = $ 11,484/.
Therefore, Net Gain/(Loss) is = (Increase in Profit+Interest savings-Cost of discount)
Net Gain/(Loss) is = ($13,050+$2,204-$11,484)
Net Gain/(Loss) is = $ 3,770
The net change in income if the new credit terms are adopted would be of $ 3,770
If you advertise and your rival advertises, you each will earn $3 million in profits. If neither of you advertises, you will each earn $7 million in profits. However, if one of you advertises and the other does not, the firm that advertises will earn $10 million and the non-advertising firm will earn $1 million. If you and your rival plan to be in business for 15 years, then the Nash equilibrium is for:
Answers
Answer:
Each company should advertise
Explanation:
Nash equilibrium a concept in game theory which describes the optimal strategy for a party in a non co-operative game. It is the best strategy for the player regardless of what the other player is playing.
In this question, if both parties advertise, they earn $3 million .
If one of you advertises and the other does not, the firm that advertises will earn $10 million and the non-advertising firm will earn $1 million
If neither of you advertises, you will each earn $7 million in profits.
The profits from advertising can either be 3 million or 10 million while the profit from not advertising can either be 7 million or 1 million.
We can see the gains from advertising is more than the gain of not advertising. So the bash equilibrium is to advertise.
Please check the attached image for a table showing this game
I hope my answer helps you
On March 12, Klein Company sold merchandise in the amount of $7,800 to Babson Company, with credit terms of 2/10, n/30. The cost of the items sold is $4,500. Klein uses the perpetual inventory system and the gross method of accounting for sales. Babson pays the invoice on March 17, and takes the appropriate discount. The journal entry that Klein makes on March 17 is:
Answers
Answer:
Dr cash $7,644
Dr sales discount $156
Cr accounts receivable $7,800
Explanation:
The cash received is less of a discount of 2% since payment in respect of the sale was received within the discount period.
Cash received=$7,800-($7800*2%)=$ 7,644.00
Discount =$7800-$ 7,644=$156
The accounts receivable would be credited with $7,800 while cash and sales discount would be debited with $7,644 and $156 respectively
Part X requires machining on a milling machine (operations A and B are required).
Find the number of machines required to produce 3000 parts per week. Assume the company will be operating five days per week, 18 hours per day. The following infor- mation is known:
Operation Standard Time Efficiency Reliability Scrap
A 3 min 95% 95% 2%
B 5 min 95% 90% 5%
Note: The milling machine requires tool changes and preventive maintenance after every lot of 500 parts. These changes require 30 minutes.
Answers
Answer:atleast 5 machines
Explanation:
Quantity required (Q) = 3000
Maintainace due = 500 parts
3000 / 500 = 5 = 6 Maintainace
Repair time = 6 × 30 minutes = 300 minutes = 5 hours.
operation time = 5 × 18 × 60 = 5400 minutes
Total operation time = Total operation hours - repair time
5400 - 300 = 5100 hours
For A:
(Standard time × Q) / (reliability × time efficiency × scrap × total working hours)
(3 × 3000) / (. 95×.95×5100)
9000/4602.75 = 1.96
For B:
(Standard time × Q) / (reliability × time efficiency × scrap × total working hours)
(5 × 3000) / (.95×.9×5100)
15000/4360.5 = 3.44
(1.96 + 3.44) = 166.56
=5. 4
Sunland Corporation’s recent sale to a firm in Mexico produced revenues of 13,520,000 Mexican pesos (MPs). If the firm sold the pesos to its bank and was credited with $1,189,760.00, what was the spot rate at which the pesos were converted?
Answers
Answer:
11.3636 Mexican pesos per US dollar
Explanation:
total revenue in Mexican pesos = 13,520,000
total US dollars received = 1,189,760
spot rate = 13,520,000 Mexican pesos / 1,189,760 US dollars = 11.3636 Mexican pesos per US dollar
The spot exchange rate is the current price of a currency compared to another currency, e.g. if you have US$1,000, you could purchase 11,363.6 Mexican pesos.
Direct Materials Variances Silicone Engine Inc. produces wrist-worn tablet computers. The company uses Thin Film Crystal (TFC) LCD displays for its products. Each tablet uses one display. The company produced 580 tablets during December. However, due to LCD defects, the company actually used 600 LCD displays during December. Each display has a standard cost of $15.00. Six hundred LCD displays were purchased for December production at a cost of $8,550. Determine the price variance, quantity variance, and total direct materials cost variance for December. Enter a favorable variance as a negative number using a minus sign and an unfavorable variance as a positive number. Price variance $ Quantity variance $ Total direct materials cost variance $
Answers
Answer:
The price variance is -$450 favorable
The quantity variance is $300 unfavorable
The Total direct materials cost variance is -$150 favorable
Explanation:
According to given data we have the following:
standard price=$15
Actual price=$8,550/600=$14.25
standard quantity=580
Actual quantity=600
To calculate the price variance, quantity variance, and total direct materials cost variance for December we would have to make the following calculations:
price variance=(Actual price-standard price)*Actual quantity
price variance=($14.25-$15)*600
price variance=-$450 favourable
quantity variance=(Actual quantity-standard quantity)*standard price
quantity variance=(600-580)*$15
quantity variance=$300 unfavorable
total direct materials cost variance=materials price variance+material quantity variance
total direct materials cost variance=-$450+$300
total direct materials cost variance=-$150
