Answer:
$3,290,000
Explanation:
Calculation to determine total stockholders' equity of Newton as of December 31, 20X9
200,000 shares issued for $15$3,000,000
(200,000 shares* $15)
Add Net income $750,000
Less Dividends ($380,000)
Less Purchased 12,000 treasury shares at $12 ($144,000)
(12,000 treasury shares*$12)
Add Decrease in treasury stock account $96,000
(8,000 shares *$12)
Less Decrease in additional paid-in capital ($32,000)
[(8,000 shares *$12)-(8,000 shares *$8])
Total Stockholders’ equity $3,290,000
Therefore total stockholders' equity of Newton as of December 31, 20X9 is $3,290,000
Jason is faced with two choices: A BMW costing $40,000 gives him an additional 1005 units of utility, and a laser printer costing $1,000 gives him an additional 25 units of utility. Rational choice theory would predict that he would choose:
Answer:
either a BMW or a laser printer because they yield the same marginal printer
Explanation:
A rational consumer would choose the good that provides a higher utility
Marginal utility is the additional satisfaction received from consuming an additional unit of a good or service. Marginal utility is the additional utility derived from consuming one more unit of a good. the consumption decision is to consume more units of a good that gives the higher utility per good.
Marginal utility per good = marginal utility / price of the good
BMW = 1005 /40,000 = 0.025
Printer = 25 / $1000 = 0.025
CompuGlobal is an American firm producing computers. CompuGlobal imports computer components from Taiwan and assembles them domestically. Suppose that in the United States, a computer sells for $800 and that 60% of the computer’s value comes from the value of the imported components. The United States imposes a 50% tariff on computers and a 10% tariff on the computer’s components. Assume that costs of producing components are the same in the United States and Taiwan and that transit costs are nonexistent. Based on the information provided, the effective rate of protection that CompuGlobal receives from the tariff is
Answer: 110%
Explanation:
The effective rate of protection is used in measuring the final tariff in a particular sector and it's expressed as:
g = (t -ai,ti) / (1 - ai)
where,
g = effective protection rate
ai = nominal tariff rate = 0.6
t = cost of intermediate input = 0.5
ti = nominal tariff on intermediate input = 0.1
The computer price here is $800 while the input price is 60% of $800 which will be:
= 60% × $800 = $480
nominal tariff rate = 480/800 = 0.6
Nominal tariff on final goods, t = 50% = 0.5
Tariff on imported input, ti = 10% = 0.1
Using the formula:
g = (t -ai,ti) / (1 - ai)
g = [0.5 - (0.6×0.1)] / (1 - 0.6)
g = (0.5 - 0.06) / 0.4
g = 0.44/.0.4
g = 1.10
g = 110%
The effective rate of protection is 110%
Data collection tool of a qualitative research
Answer:
The methods of qualitative data collection most commonly used in health research are document study, observations, semi-structured interviews and focus groups.
The total manufacturing cost variance is a.the difference between total actual costs and total standard costs for the units produced b.the difference between planned costs and standard costs for the units produced c.the flexible budget variance plus the time variance d.none of the above
Answer:
a.the difference between total actual costs and total standard costs for the units produced
Explanation:
The total manufacturing cost variance shows the difference between the total actual cost i.e. incurred and the standard cost incurred for the units that are produced or generated
In mathematically, it should be
Total manufacturing cost variance = standard cost - actual cost
hence, the first option is correct
A company issued 30 shares of $.50 par value common stock for $12,000. The credit to additional paid-in capital would be ________.
A. $1.985.
B. $12,000.
C. $15.
D. $10,150.
Answer: $11,985
Explanation:
The credit to the Additional paid-in capital is the excess over the pa value of the stock that was sold. The formula is therefore:
Additional paid-in capital = Cash stock was sold for - Par value of stock
Par value of stock = 30 shares * 0.50
= $15.00
Additional paid-in capital = 12,000 - 15
= $11,985
The Cullumber Acres Inn is trying to determine its break-even point during its off-peak season. The inn has 50 rooms that it rents at $65 a night. Operating costs are as follows:
Salaries $7,000 per month
Utilities $1,000 per month
Depreciation $1,100 per month
Maintenance $1,508 per month
Maid service $13 per room
Other costs $26 per room
Required:
a. Determine the inn's break-even point in number of rented rooms per month.
b. Determine the inn's break-even point in dollars.
Answer:
a. Breakeven point in number of rented rooms:
= Fixed costs / Contribution margin
Fixed cost = Salaries per month + Utilities + Depreciation + Maintenance
= 7,000 + 1,000 + 1,100 + 1,508
= $10,608
Contribution margin:
= Rent price - Maid service - Other costs
= 65 - 13 - 26
= $26
Breakeven point in rented rooms:
= 10,608 / 26
= 408 rooms
b. Breakeven point in dollars:
= Fixed costs / Contribution margin ratio
= 10,608 / (26 / 65)
= 10,608 / 40%
= $26,520
Sports Corp has 11.7 million shares of common stock outstanding, 6.7 million shares of preferred stock outstanding, and 2.7 million bonds. If the common shares are selling for $26.7 per share, the preferred share are selling for $14.2 per share, and the bonds are selling for 96.83 percent of par, what would be the weight used for common stock in the computation of Sports's WACC
Answer: 10.34%
Explanation:
First calculate the value of the company's total capital:
= Common stock + Preferred stock + Debt
= (11,700,000 * 26.70) + (6,700,000 * 14.20) + (2,700,000 * 96.83/100 * 1,000 par value)
= $3,021,940,000
The weight to be used for common stock is:
= Common stock value / Total capital value
= (11,700,000 * 26.70) / 3,021,940,000
= 312,390,000 / 3,021,940,000
= 10.34%
our Company will open a new store on January 1. Based on experience from its other retail outlets, Entertainment Inc. is making the following sales predictions: Cash Sales Credit Sales January $80,000 $160,000 February $50,000 $170,000 March $60,000 $190,000 April $50,000 $210,000 You estimate that the pattern of collection of credit sales will be 45% in the month of sale and 40% in the month following the sale; 8% in the third month, the remaining 7% is uncollectable. Based on this data calculate the estimated total cash collections for March
Answer:
Entertainment Inc.
The estimated total cash collections for March are:
= $226,300.
Explanation:
a) Data and Calculations:
Cash Sales Credit Sales
January $80,000 $160,000
February $50,000 $170,000
March $60,000 $190,000
April $50,000 $210,000
January February March April
Credit Sales $160,000 $170,000 $190,000 $210,000
Cash collections:
45% sales month $72,000 $76,500 $85,500 $94,500
40% ffg sales 64,000 68,000 76,000
8% third month 12,800 13,600
7% uncollectible
Total cash collections for March $166,300
Cash sales 80,000 50,000 60,000 50,000
Total cash collected for March $226,300
Your grandfather has offered you a choice of one of the three following alternatives: $11,500 now; $5,700 a year for five years; or $71,000 at the end of five years. Use Appendix B and Appendix D for an approximate answer, but calculate your final answer using the formula and financial calculator methods.
Required:
a. Assuming you could earn 9 percent annually, compute the present value of each alternative.
b. Which alternative should you choose?
Answer:
1. $11,500
2. $22,171.01
3. $46,145.13
option 3. This is because it has the highest present value
Explanation:
Present value is the sum of discounted cash flows
Present value can be calculated using a financial calculator
option 2
Cash flow each year from year 1 to 5 = $5,700
I = 9
PV = 22,171,01
OPTION 3
Cash flow in year 5 = 71,000
I = 9
PV = 46,145.13
To determine PV using a financial calculator take the following steps:
1. Input the cash flow values by pressing the CF button. After inputting the value, press enter and the arrow facing a downward direction.
2. after inputting all the cash flows, press the NPV button, input the value for I, press enter and the arrow facing a downward direction.
3. Press compute
Hill Company uses the periodic inventory system. It records a transaction that increases the balances in its purchases and accounts payable accounts. Which of the following is true about Hill Company?
a. When the related merchandise is sold, the purchases account will be decreased by the related cost of goods sold.
b. The manner in which this transaction was recorded indicates that Hill returned $6,000 of merchandise to a supplier.
c. The balance in the account will appear on the balance sheet at year end.
d. The manner in which this transaction was recorded indicates that Hill purchased inventory on account.
Answer:
Hill Company
The true statement about Hill Company is:
d. The manner in which this transaction was recorded indicates that Hill purchased inventory on account.
Explanation:
Purchases made on account (or credit terms) are debited to the Purchases account (periodic inventory system) and credited to the Accounts Payable account. This increases the amount of purchases and the accounts payable account respectively by the same amount. If Hill Company uses the perpetual inventory system, the debit goes to the Inventory account and the corresponding credit to the Accounts Payable account.
Borland, Inc. issues 25-year semi-annual bonds that have a face value of $1,000 and a coupon rate of 7.5%. The current market price for the bonds is $950.00. If your required rate of return is 8.5%, what is the value of one of these bonds to you
Answer: $897.03
Explanation:
You can use Excel to calculate this.
The bond is a semi-annual bond so you need to adjust the variable for this first.
Number of periods = 25 * 2 = 50 semi-annual periods
Coupon = 7.5% * 1,000 * 0.5 semi-annual adjustment = $37.50
Yield = 8.5% / 2 = 4.25%
Value to you = $897.03
Find the price a purchaser should be willing to pay for the given bond. Assume that the coupon interest is paid twice a year. $30,000 bond with coupon rate 4.4% that matures in 7 years; current interest rate is 6.8%.
Answer:
Bond Price= $26,042.12
Explanation:
Giving the following information:
Coupon= (0.044/2)*30,000= $660
YTM= 0.068/2= 0.034
Time to maturity= 7*2= 14 semesters
Face value= $30,000
To calculate the price of the bond, we need to use the following formula:
Bond Price= cupon*{[1 - (1+i)^-n] / i} + [face value/(1+i)^n]
Bond Price= 660*{[1 - (1.034^-14)] / 0.034} + [30,000 /(1.034^14)]
Bond Price= 7,256.14 + 18,785.98
Bond Price= $26,042.12
A public works department in a metropolitan area is looking into buying a major equipment to enhance productivity. The initial cost is estimated to be $600,000. It is projected that new equipment will help save $250,000 the first year and decrease gradually by $50,000 for the next four years. Determine the payback period for this equipment purchase.
Answer:
Public Works Department
The payback period for this equipment purchase is:
= 3 years.
Explanation:
a) Data and Calculations:
Initial cost of new equipment = $600,000
Savings from the equipment:
Year 1 = $250,000
Year 2 = $200,000 ($250,000 - $50,000)
Year 3 = $150,000 ($200,000 - $50,000)
Year 4 = $100,000 ($150,000 - $50,000)
Year 5 = $50,000
Payback period:
Year 1 = $250,000
Year 2 = $450,000 ($250,000 + $200,000)
Year 3 = $600,000 ($450,000 + $150,000)
The AD Curve ________.
a. all of the choices are correct.
b. is downward sloping, because with higher inflation comes higher interest rates and lower spending, so equilibrium aggregate output declines
c. indicates the level of aggregate output corresponding to different goods-market-clearing levels of the interest rate
d. explains how inflation affects output in the long run
Answer:
a. all of the choices are correct.
Explanation:
In Economics, there are primarily two (2) factors which affect the availability and the price at which goods and services are sold or provided, these are demand and supply.
Demand can be defined as the total amount of goods or services that consumers are willing and able to purchase at a given price.
The Law of Demand states that quantity of goods or services demanded varies inversely with their price, other things constant or being equal. Thus, the smaller the quantity of goods or services demanded, the higher the price and vice-versa.
Aggregate demand (AD) can be defined as the total quantity of output (final goods and services) that is demanded by consumers at all possible price levels in an economy at a particular time.
An aggregate demand (AD) curve gives a negative relationship between the aggregate price level for goods or services and the quantity of aggregate output demanded in an economy at a specific period of time.
In conclusion, all of the aforementioned statements best describes an aggregate demand (AD) curve.
How are investors taxed on stocks and mutual fund investments? Check all that apply.
Answer:
yes
Explanation:
Generally, yes, taxes must be paid on mutual fund earnings, also referred to as gains. Whenever you profit from the sale or exchange of mutual fund shares in a taxable investment account, you may be subject to capital gains tax on the transaction. You also may owe taxes if your mutual fund pays dividends. The amount of tax owed ultimately depends on the combined total of your gains and losses.
Merrill, its affiliates, and financial advisors do not provide legal, tax, or accounting advice. You should consult your legal and/or tax advisors before making any financial decisions.
"Realizing a capital gain from one mutual fund doesn't guarantee that you'll owe taxes on that gain. Each dollar of capital loss potentially can offset a dollar of capital gain."
— Mitchell Drossman, head of National Wealth Strategies in the Chief Investment Office (CIO) for Merrill and Bank of America Private Bank
A closer look at the capital gains tax
Short-term capital gains are gains from the sale of capital assets held for 12 months or less and are taxed at ordinary income tax rates. Long-term capital gains are gains from the sale of capital assets held for more than 12 months and are currently subject to a federal long-term capital gains tax rate of up to 20%.
2021 Capital Gains Tax RatesFootnote 1
Short-term
Held for 12 months or less
Ordinary income tax rate
Long-term
Held for more than 12 months
0%, 15% or 20% depending on your taxable income
But a capital gain in one mutual fund doesn't guarantee that you'll owe taxes on that gain. Each dollar of capital loss potentially can offset a dollar of capital gain.
For example if, in the same tax year, you have $1,000 in long-term capital gains and $600 in long-term capital losses, you'll pay tax only on the net long-term capital gain of $400. If your capital losses exceed your capital gains for the tax year, you can use up to $3,000 of these excess capital losses to offset ordinary income in such tax year. You can carry over capital losses in excess of $3,000 to offset capital gains in future tax years (and, potentially, ordinary income of up to $3,000 per year).
information of samriyan enterprises is given below.a)Started bussiness with Rs 20000 b) purchase good of Rs 15000 from Ram.c)Goods sold on cash Rs 18000 d)Cash paid Ram Rs 10000 e)A gain goods purchase from Ram of rs 20000 f) Paid to Ram Rs 24000 in full settlement of his account.Required a) journal entries
Answer:
a) Dr: Cash 20000
Cr: Equity/Capital 20000
b) Dr: Goods 15000
Cr: Payable 15000
c) Dr: Cash 18000
Cr: Sales 18000
d) Dr: Payable 10000
Cr: Cash 10000
e) Dr: Goods 20000
Cr: Payable 20000
f) Dr: Payable 30000
Cr: Cash 24000
Cr: Profit and Loss 6000
The Rolling Department of Oak Ridge Steel Company had 3,600 tons in beginning work in process inventory (50% complete). During July, 59,500 tons were completed. The ending work in process inventory on July 31 was 3,000 tons (40% complete).
What are the total equivalent units for direct materials for July if materials are added at the beginning of the process?
On December 31, 2018, a company had assets of $34 billion and stockholders' equity of $28 billion. That same company had assets of $50 billion and stockholders' equity of $12 billion as of December 31, 2019. During 2019, the company reported total sales revenue of $27 billion and total expenses of $25 billion. What is the company's debt-to-assets ratio on December 31, 2019
Answer:
131.6%
Explanation:
Total assets is $50 billion
Liabilities = 50-stock holder equity which is $12 billion
= 50-12
= $38 billion
Therefore the debt to assets ratio can be calculated as follows
= 50 billion/38 billion
= 1.3157×100
°= 131.6
Hence the debts to assetsrayion is 131.6%
XYZ Co. reported the following results for October: Sales $ 32,000 Cost of goods sold (all variable) $ 6,000 Total variable selling expense $ 2,500 Total fixed selling expense $ 4,700 Total variable administrative expense $ 1,800 Total fixed administrative expense $ 3,000 The contribution margin for October is:
Answer:
See below
Explanation:
Given the information above,
Contribution margin = Sales - Variable expenses
Sales = $32,000
Variable expenses = Total variable selling expenses + Total variable administrative expenses
= $2,500 + $1,800
= $4,300
Therefore,
Contribution margin = $32,000 - $4,300
Contribution margin = $27,700
Therefore, the contribution margin for October is $27,700
On September 1, 2021, Hiker Shoes issued a $100,000, 8-month, noninterest-bearing note. The loan was made by Second Commercial Bank where the stated discount rate is 11% Hiker's effective interest rate on this loan (rounded) is: ____________
Answer: 11.87%
Explanation:
Effective interest rate on this loan is:
= Interest payment / (Note - Interest payment) * 12/8 months
Interest payment:
= Note * Interest rate * 8/12 months
= 100,000 * 11% * 8/12
= $7,333
Effective interest:
= 7,333 / (100,000 - 7,333) * 12/8
= 11.87%
An employee earned $1,000 in the first pay period of the current year. How much is the total employer and employee social security taxes on these earnings? (Use the simplified rate shown in illustrations.)
Answer: $120
Explanation:
The total employer and employee social security taxes is 6% fir the employee and 6% for the employee which then makes up 12%.
Since the employee earned $1,000 in the first pay period of the current year, then the total employer and employee social security taxes on these earnings will be:
= 12% × $1000
= 0.12 × $1000
= $120
Cost of Goods Sold, Cost of Goods Manufactured
Glenville Company has the following information for April:
Cost of direct materials used in production $41,000
Direct labor 47,000
Factory overhead 20,000
Work in process inventory, April 1 34,000
Work in process inventory, April 30 27,000
Finished goods inventory, April 1 24,000
Finished goods inventory, April 30 18,000
a. For April, determine the cost of goods manufactured. Using the data given, prepare a statement of Cost of Goods Manufactured.
b. For April, determine the cost of goods sold. Using the data given, prepare a statement of Cost of Goods Sold.
Answer and Explanation:
a. The preparation of the statement of Cost of Goods Manufactured is presented below:
Work in process inventory, April 1 34,000
Add:
Cost of direct materials used in production $41,000
Direct labor 47,000
Factory overhead 20,000
Less:
Work in process inventory, April 30 27,000
Cost of goods manufactured $115,000
b. The preparation of the statement of Cost of Goods Sold is presented below:
Finished goods inventory, April 1 24,000
Add: cost of goods manufactured $115,000
Less: Finished goods inventory, April 30 18,000
Cost of goods sold $121,000
Group Viewer LLC, a software company, used to provide profit sharing plans for its employees. After organizational restructuring, the management decides to replace the profit sharing plans with commissions for each employee. Which of the following is true of Group Viewer LLC?
a. It provided individual incentives; now it provides group incentives
b. It provided group incentives; now it provides organizational incentives
c. It provided individual incentives; now it provides organizational incentives
d. It provided organizational incentives; now it provides individual incentives
Answer:
d. It provided organizational incentives; now it provides individual incentives
Explanation:
Group viewer have the profit-sharing plan that could be provided the incentive of an organziation to the employees. This plan should be applied sometimes. Now if the commission is changed for each and every employee so it should be an individual incentive
Also the profit-sharing plan should not be either an individual or group incentive but the same should be the part of the organization
Therefore the option d is correct
Sybil, age 40, is single and supports her dependent parents who live with her, as well as her grandfather who is in a nursing home. She has AGI of $80,000 and itemized deductions of $8,000. What is the taxable income?
Answer:
$61,650
Explanation:
Calculation to determine the taxable income
Adjusted Gross Income (AGI) $80,000
Deduct Standard deduction (head of household) ($18,350)
Taxable Income $61,650
($80,000-$18,350)
Therefore the vthe taxable income is $61,650
Croft Corporation has a target capital structure of 70 percent common stock and 30 percent debt. Its cost of equity is 16 percent, and the cost of debt is 8 percent. The relevant tax rate is 24 percent. What is the company's WACC
Answer:
13.02%
Explanation:
Debt = 30% and Common stock = 70%
Cost of equity is 16% and debt is 8%
Tax is 24%
WACC = Cost of equity*Weight of equity + After tax cost of debt*Weight of debt
WACC = (0.16*0.70) + (0.08*(1-0.24)*0.30)
WACC = 0.112 + 0.01824
WACC = 0.13024
WACC = 13.02%
So, the the company's WACC is 13.02%
Yesterday, the dollar was trading in the foreign exchange market at 1.10 euros per dollar. Today, the dollar is trading at 1.20 euros per dollar. The dollar has ________ and a possible reason for the change is ________ in the expected future exchange rate.
Answer: appreciated; an increase.
Explanation:
Since there's an increase in the dollar rate at the foreign exchange market at 1.10 euros per dollar to 1.20 euros per dollar, this implies that the dollar has appreciated.
The appreciation of the dollar simply means that there's an increase in the value of the dollar when it's compared to.anitgee currency. Tge reason for the change is the increase in the expected future exchange rate.
Suppose ABCD's stock price is currently $50. In the next six months, it will either fall to $40 or rise 8 to $60. What is the current value of a six-month call option with an exercise price of $50? The six- month risk-free interest rate is 2% (periodic rate).
A. $5.39
B. $15.00
C. $8.25
D. $8.09
An oligopolistic market structure is distinguished by several characteristics, one of which is either similar or identical products. Which of the following are other characteristics of this market structure?
a. Market control by many small firms
b. Difficult entry
c. Mutual interdependence
d. Market control by a few large firms
e. Mutual dependence
Answer:
The correct option is d. Market control by a few large firms.
Explanation:
An oligopolistic market structure can be described as a market structure in which there is a small number of large firms, and none of the large firms can prevent the other large firms in the market from wielding great power.
An oligopolistic market structure is there a market that is dominated and controlled by by a few large firms.
Therefore, the correct option is d. Market control by a few large firms.
The WRT Corporation makes collections on sales according to the following schedule:
25% in month of sale
65% in month following sale
5% in second month following sale
5% uncollectible
The following sales have been budgeted:
Sales
April $120,000
May $100,000
June $110,000
Budgeted cash collections in June would be:_____.
a. $27,500.
b. $98,500.
c. $71,000.
d. $115,500.
Answer:
Total cash collection June= $98,500
Explanation:
Giving the following information:
25% in month of sale
65% in month following sale
5% in second month following sale
5% uncollectible
The following sales have been budgeted:
Sales
April $120,000
May $100,000
June $110,000
Cash collection June:
Cash collection from June= 110,000*0.25= 27,500
Cash collection from May= 100,000*0.65= 65,000
Cash collection from April= 120,000*0.05= 6,000
Total cash collection June= $98,500
Unilever has a subsidiary in Japan. The valuation of this MNC should
rise when an event causes the expected cash flows from Japan to ____
and when JPY is expected to ____.
Answer: increase; appreciate.
Explanation:
A multinational firm is regarded as a firm that's located in different countries. It should be noted that the valuation of this multinational company should
rise when there's an event that causes the expected cash flows from Japan to increase and also when the currency JPY is expected to appreciate. Appreciate her simply means when there's an increase in the value of JPY.
