Answer:
Dunkin Donuts has always tried to maintain its currents customers and attract potential customer through their marketing strategies. Since the company has limited products to offer it has to be very keen on their marketing strategies to make their product successful. The company uses undifferentiated target marketing strategies so that its simple menu is available globally.
Explanation:
The old name of Dunkin Donuts was Open kettle. The company mainly focused on Donuts and Coffee. It has simple yet attractive menu since it specializes in Donuts and none of the competitors have been successful till date to offer Donuts with exact taste like Dunkin Donuts. The company struggles to promote its brand globally. The company has been successful to serve its customers in 40+ countries.
Your company sponsors a 401(k) plan into which you deposit 8 percent of your $65,000 annual income. Your company matches 50 percent of the first 3 percent of your earnings. You expect the fund to yield 8 percent next year. Assume you are currently in the 31 percent tax bracket.
Required:
a. How many dollars did you invest out of your salary in your 401(k) plan this year?
b. What is your one-year return?
Answer:
a. $6,669
b.85.87%
Explanation:
Annual income = $65000
Employee deposit = 8%
= 65000*8%
= $5200
Tax rate given = 31%
Tax savings = $5200*31%
Tax savings= 1/$1,612
Net employee cost = $5200 - $1612
Net employee cost=$3588
Employer deposit = 65,000 * 50% * 3%
Employer deposit= $975
Total employee and employer investment = $5200 + $975
Total employee and employer investment= $6175
Given yield rate = 8%
a) Calculation to determine How many dollars did you invest out of your salary in your 401(k) plan this year
Using this formula
Total investment at end of year 1 = $6,175*(1+yield)
Let plug in the formula
Total investment at end of year 1=$6,175*1.08
Total investment at end of year 1= $6,669
Therefore How many dollars did you invest out of your salary in your 401(k) plan this year is $6,669
b) Calculation to determine your one-year return
Using this formula
One year return = (Year end investment - Employee net cost) / Employee net cost
Let plug in the formula
One year return= ($6,669 - $3588) / $3588
One year return=$3,081/$3,588
One year return= 0.8587*100
One year return= 85.87%
Therefore your one-year return is 85.87%
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Units
1
Cost Flow Methods
The following three identical units of Item LO3V are purchased during April:
Item Beta
Cost
April 2
Purchase
$270
April 15
Purchase
272
April 20
Purchase
Total
$816
Average cost per unit
($816 + 3 units)
Assume that one unit is sold on April 27 for $345. Determine the gross profit for April and ending inventory on April 30 using the (a) first-in, first-out (FIFO); (b)
last-in, first-out (LIFO); and (c) weighted average cost method.
1
1
274
3
$272
Gross Profit
Ending Inventory
a. First-In, first-out (FIFO)
b. Last-in, first-out (LIFO)
c. Weighted average cost
Answer:
Cost Flow Methods
Gross profit and ending inventory on April 30 using:
Gross Profit Ending Inventory
(a) first-in, first-out (FIFO) $75 $546
(b) last-in, first-out (LIFO) $71 $542
(c) weighted average cost method $73 $544
Explanation:
a) Data and Calculations:
Item Beta Cost
April 2 Purchase $270
April 15 Purchase 272
April 20 Purchase 274
Total $816
Average cost per unit = $272 ($816/ 3 units)
Assume that one unit is sold on April 27 for $345
Gross profit and ending inventory on April 30 using:
Gross Profit Ending Inventory
(a) first-in, first-out (FIFO) $75 ($345 - $270) $546 ($816 - $270)
(b) last-in, first-out (LIFO) $71 ($345 - $274) $542 ($816 - $274)
(c) weighted average cost method $73 ($345 - $272) $544 ($816 - $272)
Ending inventory = Cost of goods available for sale Minus Cost of goods sold
Gross profit = Sales Minus Cost of goods sold
Calculate interest amount forR3000
10%p.a paid out every 6months
Answer:30
Explanation:2+2=4 -1 thats 3 quick mathd
Answer please I need help
Answer:
1st answer is 1,100
2nd answer is 1,050
Price ceilings will likely result in the development of black markets. increase production as producers respond to higher consumer demand at the low ceiling price. increase the volume of transactions as we move along the demand curve. result in the accumulation of surpluses.
Answer: result in the development of black markets.
Explanation:
Price ceilings are limits on the price that can be charged for a good or service. This means that suppliers will be unable to charge a certain price regardless of the cost incurred to produce that good.
Supplier usually respond to this by producing less goods and services which would leave a shortage in the market. This shortage will result in a black market where the prices the good will then be sold at will be higher than the price ceiling as people try to get the now relatively scarce goods and services.
Dawson Toys, Ltd., produces a toy called the Maze. The company has recently created a standard cost system to help control costs and has established the following standards for the Maze toy:
Direct materials: 7 microns per toy at $0.33 per micron
Direct labor: 1.4 hours per toy at $6.70 per hour
During July, the company produced 5,000 Maze toys. The toy's production data for the month are as follows:
Direct materials: 70,000 microns were purchased at a cost of $0.29 per micron. 26,250 of these microns were still in inventory at the end of the month.
Direct labor: 7,500 direct labor-hours were worked at a cost of $54,750.
Required:
a. Compute the following variance for july
b. The materials price and quantity variances
c. The labor rate and efficiency variances
Answer:
Results are below.
Explanation:
To calculate the direct material price and quantity variance, we need to use the following formulas:
Direct material price variance= (standard price - actual price)*actual quantity
Direct material price variance= (0.33 - 0.29)*70,000
Direct material price variance= $2,800 favorable
Direct material quantity variance= (standard quantity - actual quantity)*standard price
Direct material quantity variance= (5,000*7 - 43,750)*0.33
Direct material quantity variance= $2,887.5 unfavorable
To calculate the direct labor rate and efficiency variance, we need to use the following formulas:
Direct labor rate variance= (Standard Rate - Actual Rate)*Actual Quantity
Direct labor rate variance= (6.7 - 7.3)*7,500
Direct labor rate variance= $4,500 unfavorable
Actual rate= 54,750 / 7,500= $7.3
Direct labor time (efficiency) variance= (Standard Quantity - Actual Quantity)*standard rate
Direct labor time (efficiency) variance= (5,000*1.4 - 7,500)*6.7
Direct labor time (efficiency) variance= $3,350 unfavorable
Large manufacturing businesses do not usually sell correctly to consumers
True
False
Answer:
"directly" no, they usually have middlemen that distribute the product to consumers.
Explanation:
Cereal brands at supermarkets.
Ivo Company has a $10 million face value bond issue outstanding. These bonds include a call option that permits Ivo to redeem the bonds at any time for 101% of par. These bonds were issued at a premium and have a carrying value of $10,200,000. If Ivo calls the bonds, its income statement will reflect:_---.
a. neither a gain nor a loss on redemption.
b. a gain on redemption.
c. a loss on redemption.
Answer:
b. a gain on redemption.
Explanation:
Given that
The face value of the bond is $10 million
The bond should be redeemed at 101% of par
Also it is issued for a premium and its carrying value is $10,200,000
Since the carrying value is more than the face value that means the income statement represent the gain on redemption of the bonds
Therefore the option b is correct
For the scenario below, determine the legality of the company's actions.
Guncorp is selling rifles to a retailer Sportsacorp. In order for Sportsacorp to purchase a shipment of rifles, Guncorp requires that Sportsacorp also purchase a shipment of pistols.
Answer:
Option C because it is impossible to determine the legality based on the facts given.
Explanation:
Guncorp is selling rifles to a retailer Sportsacorp, in the above cenario, the legality cannot be determined by the actions of the company.
What is legality?Legality is the state of being consistent with the law, or of being lawful or unlawful in a certain jurisdiction, and the concept of power in relation to an act, agreement, or contract.
In the above case, there is not the sufficient detail that show the legality of the company's actions about the Guncorp.
Therefore, the legality in the given case cannot be determined.
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You own a portfolio equally invested in a risk-free asset and two stocks. If one of the stocks has a beta of 1.62 and the total portfolio is exactly as risky as the market, what must the beta be for the other stock in your portfolio
Answer:
1.71
Explanation:
Systemic risk is measured by beta. The higher beta is, the higher the systemic risk and the higher the compensation demanded for by investors
The market has a beta of one. If a portfolio has the same level of systematic risk that is the same as that of the market, its beta would be equal to 1.
The beta of a risk free asset is zero
The portfolio's beta can be determined by adding together the weighted beta of each stock in the portfolio
weighed beta of a stock = percentage of the stock in the portfolio x beta of the stock
1 = (0.3 x 1.62) + (0.3 x 0) + (0.3 x a)
1 = 0.486 + 0 + 0.3a
1 - 0.486 = 0.3a
a = 1.71
Botosan Factory has budgeted factory overhead for the year at $468,602, and budgeted direct labor hours for the year are 280,600. If the actual direct labor hours for the month of May are 255,300, the overhead allocated for May is
Answer:
$426,351
Explanation:
Calculation to determine what the overhead allocated for May is
Using this formula
Overhead allocated for May=(Estimated overhead/Estimated total DLHs)*Overhead rate per DLHs
Let plug in the formula
Overhead allocated for May=($468,602/ 280,600)*255,300
Overhead allocated for May=$1.67*255,300
Overhead allocated for May=$426,351
Therefore the overhead allocated for May is $426,351
If the price of a haircut is $15, the number of haircuts provided is 100. If the price rises to $30 per haircut, barbers will work much longer hours, and the supply of haircuts will increase to 300.
Instructions: Round your answers to two decimal places.
The price elasticity of supply for haircuts between $15 and $30 using the mid-point method is:________.
Answer:
1.5
Explanation:
Price elasticity of supply measures the responsiveness of quantity supplied to changes in price of the good.
Price elasticity of supply = midpoint change in quantity supplied / midpoint change in price
Midpoint change in quantity supplied = change in quantity supplied / average of both supply
change in quantity supplied = 300 - 100 = 200
average of both supply = (300 + 100) / 2 = 200
200 / 200 = 1
midpoint change in price = change in price / average of both price
change in price = $30 - $15 = $15
average of both price = ($30 + $15) / 2 = $22.50
15 / 22.5 = 0.67
1 / 0.67 = 1.5
If the absolute value of price elasticity is greater than one, it means supply is elastic. Elastic supply means that quantity supplied is sensitive to price changes.
Cash Dividends on Common and Preferred Stock Lemon Inc. has the following information regarding its preferred and common stock: Preferred stock, $30 par, 12% cumulative; 300,000 shares authorized; 150,000 shares issued and outstanding Common stock, $2 par; 2,500,000 shares authorized; 1,200,000 shares issued; 1,000,000 outstanding As of December 31, 2019, Lemon was 3 years in arrears on its dividends. During 2020, Lemon declared and paid dividends. As a result, the common stockholders received dividends of $0.45 per share. Required: 1. What was the total amount of dividends declared and paid during 2020? Total dividends declared and paid $fill in the blank c3f04df87fe8040_1 2. During 2020, what journal entry was made at the date of declaration?
Answer:
1. $2,610,000
2. Dr Dividends $2,610,000
Cr Dividends Payable $2,610,000
Explanation:
1. Calculation to determine the total amount of dividends declared and paid during 2020
Arrear Preferred Dividends $1,620,000 (150,000*30*12%*3 years)
Add Current Preferred Dividends $540,000 (150,000*30*12%)
Add Common stock Dividends $450,000 (1,000,000*$0.45 )
Total amount of dividends declared and paid $2,610,000
Therefore the total amount of dividends declared and paid during 2020 is $2,610,000
2. Preparation of the journal entry was made at the date of declaration
Dr Dividends $2,610,000
Cr Dividends Payable $2,610,000
Required: 1. What was ? Total dividends declared and paid $fill in the blank c3f04df87fe8040_1 2. During 2020, what journal entry was made at the date of declaration?
XYZ Company estimates the amount of materials handling overhead cost that should be allocated to the company's two products using the data that are given below: Wall Mirrors Specialty Windows Total expected units produced 9,000 6,000 Total expected material moves 400 100 Expected direct labor-hours per unit 7 5 The total materials handling cost for the year is expected to be $6,800. The materials handling cost is allocated based on the number of materials moves. What is the total materials handling cost allocated to the specialty windows
Answer: $2,720
Explanation:
Total materials handling cost for specialty windows = Proportion of total units * Total materials handling cost
Proportion of total units = Specialty units / (Specialty windows + Wall mirrors)
= 6,000 / (6,000 + 9,000)
= 0.4
Total material handling cost for specialty windows = 0.4 * 6,800
= $2,720
Blue expects to begin selling the product next year. If Blue elects to amortize research and experimental expenditures over 60 months, determine the amount of the deduction for research and experimental expenditures for the current year.
a. $0
b. $118,000
c. $143,000
d. $152,000
Part of the question
Blue Corporation incurred the following expenses in connection with the development of a new product:
Salaries $100,000
Utilities 18,000
Materials 25,000
Advertising 5,000
Market survey 3,000
Depreciation on machine 9,000
Answer:
a. $0
Explanation:
From the question, we have the qualified research expenditures to be
=> $100,000 + $18,000 + $25,000 + $9,000 = $152,000
Also, given that under the election to amortize, the monthly amortization is
=> $152,000 ÷ 60 months = $2,533
Hence, given that, sales will not start until next year, there is no deduction for the current year, which implies that the right answer is $0
If a business adopts a low-cost strategy, it should build a supply chain with ________. Question 43 options: 1) product development skills 2) modular design in products 3) fast transportation 4) buffer stock 5) minimized inventory
Answer:
5) minimized inventory
Explanation:
If a company adopts a low-cost strategy, it must build a supply chain with minimized inventory, which configures that the company is adopting a just-in-time management strategy, which is an administration system whose philosophy is a production system according to demand, avoiding wasted stock and, consequently, unnecessary costs.
If a business adopts a low-cost strategy, it should build a supply chain with 5)minimized inventory.
What is a low-cost strategy?
A pricing strategy in which an employer offers a surprisingly low rate to stimulate the call for and benefit marketplace proportion.
How would you select the right supply chain strategy?Awareness on whether or not your organization offerings a client base that wishes immediate transport of product, or one wherein customers keep in mind that a lead time regularly accompanies their buy order. understand the effect of competition and whether or not maintaining safety stock is important to remain income.
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The demand and supply functions for basic cable TV in the local market are given as: Calculate the consumer and producer surplus in this market. If the government implements a price ceiling of $15 on the price of basic cable service, calculate the new levels of consumer and producer surplus. Are all consumers better off
Answer: Hello your question is poorly written attached below is the complete question
answer:
a) Cs = 800,000 , Ps = 1,500,000
b) Cs = 1437500, Ps = 525,000
Explanation:
Demand function ( Qd ) = 200,000 - 4000 P
supply function ( Qs ) = 20,000 + 2000 P
at equilibrium : 200,000 - 4000P = 20,000 + 2000P
therefore ; P = 180,000 / 6000 = 30
Q = 20,000 + 2000 ( 30 ) = 80,000
a) Determine consumer and producer surplus in the market
consumer surplus ( Cs ) This is the area above the price and below the demand curve = 1/2 * ( 50 - 30 ) 80,000 = 800,000
producer surplus ( Ps ) This is the area above supply and below price
= 30 * ( 80,000 ) - 1/2 (80,000 - 20,000 ) (30)
= 1,500,000
b) Determine the new levels of consumer and producer surplus with a price ceiling of $15
Pc (ceiling price ) = $15
Qd = 200,000 - 4000 ( 15 ) = 140,000
Qs = 20,000 + 2000 ( 15 ) = 50,000
∴ New consumer surplus = area ( a , Pc, b, d )
= ( 30 - 15 ) (50,000) + 1/2(50-30) (80,000) - 1/2 (80,000 - 50,000 ) (37.5 - 30)
= 1437500
New producer surplus = area ( Pc , b, e 0 )
= ( 15 ) ( 50000) - 1/2 ( 50,000 - 20,000 ) (15)
= 525,000
Froot Loop Inc., a cereal manufacturer, has variable costs of $0.40 per unit of product. In May, the volume of production was 25,000 units, and units sold were 21,600. The total production costs incurred were $30,600. What are the fixed costs per month
Answer:
the fixed cost per month is $20,600
Explanation:
The computation of the fixed cost is given below:
Fixed costs = Total Production Costs - Variable costs
= $30600 - $0.40 per unit × 25000 units
= $30600 - $10,000
= $20,600
hence, the fixed cost per month is $20,600
We simply deduct the variable cost from the total production cost so that the fixed cost could come
Papermill Plc was acquired by a private equity firm, whose investment horizon is 5 years and minimum IRR requirement is 20.0%. The private equity firm estimates the exit EBITDA and exit EV EBITDA multiple to be 1,200.0 and 11.0x, respectively. The EBITDA at entry is 1,100.0 and the amount of debt financing raised at entry is 7.0x EBITDA. The cash flow model built by the private equity firm estimates the debt to be 5.0x EBITDA at exit. Using the assumptions above, estimate the equity funding of the deal at entry.
Sales 1,000.0
Cost of goods sold 600.0
Selling, general and administration 100.0
Interest expense 50.0
Tax expense 75.0
The estimated equity funding of the deal at entry is $2,893.52
EV means Enterprise value
EBITDA means Earnings Before Interest, Taxes, Depreciation, and Amortization
Given that the private equity firm estimates that:
Exit EBITDA = 1,200
EV / EBITDA = 11.0x
To derive EV from the EV / EBITDA, then EV / EBITDA is multiplied by EBITDA.
EV = EV / EBITDA * EBITDA (i.e.)
EV = 11 * 1,200
EV = 13,200
Given that the private equity firm estimates the debt to be 5.0x EBITDA at exit.
Debt = 5.0 * EBITDA at exit
Debt = 5.0 * 1,200
Debt = 6,000
To derive the equity value at exit, the debt is subtracted from the EV
Equity value at exit = EV - Debt
Equity value at exit = 13,200 - 6,000
Equity value at exit = 7,200
The equity funding of the deal at entry will be derived using this formula "Equity value at exit / (1 + IRR)^n" where IRR is 20% and n is 5 years
Equity funding of the deal at entry = 7,200 / (1 + 20%)^5
Equity funding of the deal at entry = 7,200 / (1 + 0.20)^5
Equity funding of the deal at entry = 7,200 / (1.20)^5
Equity funding of the deal at entry = 7,200 / 2.48832
Equity funding of the deal at entry = 2893.518518518519
Equity funding of the deal at entry = $2,893.52 (approx).
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Champion Toys just purchased some MACRS 5-year property at a cost of $230,000. The MACRS rates are 20 percent, 32 percent, 19.2 percent, 11.52 percent, 11.52 percent, and 5.76 percent for Years 1 to 6, respectively. Assuming the firm foregoes all bonus depreciation, the book value of the asset as of the end of Year 2 can be calculated as: _______________
a. $230,000(1 − .20 − .32).
b. $230,000([1 − (.20)(.32)].
c. $230,000(1 − .20)(1 − .32).
d. $230,000/(1 − .20 − .32).
e. $230,000(.20)(.32).
Answer: a. $230,000(1 − .20 − .32).
Explanation:
Using the MACRS convention, the depreciation in year 2 will be sum of the first and second year depreciation rates according to MACRS.
The value of the asset in year 2 can therefore be calculated as:
= Cost * ( 1 - sum of first and second year depreciation)
= 230,000 * (1 - (20% + 32%))
Which can be written as:
= 230,000 * (1 - 20% - 32%)
Value would therefore be:
= 230,000 * (1 - 20% - 32%)
= $110,400
The summarized balance sheets of Blossom Company and Nash Company as of December 31, 2021 are as follows:
Blossom Company Balance Sheet December 31, 2021
Assets $1750000
Liabilities $170000
Capital stock 875000
Retained earnings 705000
Total equities $1750000
Nash Company Balance Sheet December 31, 2021
Assets $1280000
Liabilities $280000
Capital stock 890000
Retained earnings 110000
Total equities $1280000
If Blossom Company acquired a 20% interest in Nash Company on December 31, 2021 for $300000 and the equity method of accounting for the investment were used, the amount of the debit to Equity Investments (Nash) would have been:__________
a. $300000.
b. $200000.
c. $256000.
d. $178000.
Answer:
The amount of the debit to Equity Investments (Nash) would have been:__________
b. $200,000.
Explanation:
a) Data and Calculations:
Blossom Company Balance Sheet December 31, 2021
Assets $1750000
Liabilities $170000
Capital stock 875000
Retained earnings 705000
Total equities $1750000
Nash Company Balance Sheet December 31, 2021
Assets $1280000
Liabilities $280000
Capital stock 890000
Retained earnings 110000
Total equities $1280000
Nash's net assets = $1,000,000 ($1,280,000 - $280,000)
Equity investment = 20% of $1,000,000 = $200,000
Goodwill on acquisition = $100,000 ($300,000 - $200,000)
On June 1, 2019, Irene places in service a new automobile that cost $21,000. The car is used 70% for business and 30% for personal use. (Assume this percentage is maintained for the life of the car.) She does not take additional first-year depreciation. Determine the cost recovery deduction for 2020.
Answer:
the cost recovery deduction for 2020 is $4,704
Explanation:
The calculation of the cost recovery deduction is given below:
According to the MACRS depreciation table, the second year depreciation rate should be 32%
So, the cost recovery deduction should be
= 32% of 70% of $21,000
= $4,704
Hence, the cost recovery deduction for 2020 is $4,704
Therefore the same should be considered
If management adopts Ryan's suggestion of reducing Frozen Fun Ice Cream's charitable donations until profits grow, the company will essentially reduce its
Answer:
Corporate philanthropy
Explanation:
In simple words, Corporate philanthropy can be understood as the act of a business donating to nonprofit organisations through contributions, volunteers, sponsorship, as well as other means to assist them achieve their goals. The issue is that not enough organisations understand how to benefit from corporate generosity.
Thus, from the above we can conclude that Ryan's suggestion will reduce the company's Corporate philanthropy.
trình bày các vai trò của đạo đức kinh doanh trong phát triển doanh nghiệp
Answer:
Explanation:
Trung thực: Tính trung thực trong đạo đức kinh doanh thể hiện ở chỗ không buôn bán, sản xuất những mặt hàng nhà nước cấm, không dùng các chiêu trò dối trá để đạt được lợi ích của mình, không trốn thuế, làm ăn phi pháp; không tham ô, hối lộ; trung thành chấp hành đúng quy định của pháp luật…
Tôn trọng con người: Tôn trọng con người bao gồm tôn trọng nhân viên, đối tác khách hàng, đối thủ cũng như tất cả những người làm việc cùng với mình
Đạo đức kinh doanh gắn liền lợi ích của công ty doanh nghiệp với lợi ích chung của khách hàng và trách nhiệm đối với xã hội
Department S had 700 units 70% completed in process at the beginning of the period, 8,800 units completed during the period, and 900 units 37% completed at the end of the period. What was the number of equivalent units of production for the period for conversion if the first-in, first-out method is used to cost inventories? Assume the completion percentage applies to both direct materials and conversion cost.
a. 9,543.
b. 8,310.
c. 8,100.
d. 8,643.
Answer:
d. 8,643
Explanation:
Calculation to determin the number of equivalent units of production for the period for conversion if the first-in, first-out method is used to cost inventories
Units Completed During the period 8,800 units
Add Units Completed at the end 333 units
(900 units *37% )
Less Units Completed at the beginning 490 units
(700 units* 70)
Number of equivalent units 8,643
Therefore the number of equivalent units of production for the period for conversion if the first-in, first-out method is used to cost inventories is 8,643
Assume the following data for Oshkosh Company before its year-end adjustments:
Unadjusted Balances
Debit Credit
Sales $51,600,000
Cost of Merchandise Sold $31,750,000
Estimated Returns Inventory 28,100
Customer Refunds Payable 115,400
Estimated cost of merchandise that will be returned in the next year $400,000
Estimated percent of refunds for current year sales 1.2%
Journalize the adjusting entries for the following:
(a) Estimated customer refunds and allowances.*
(b) Estimated customer returns.*
Refer to the Chart of Accounts for exact wording of account titles.*
CHART OF ACCOUNTS
Oshkosh Company
General Ledger
ASSETS
110 Cash
120 Accounts Receivable
125 Notes Receivable
130 Merchandise Inventory
131 Estimated Returns Inventory
140 Office Supplies
141 Store Supplies
142 Prepaid Insurance
180 Land
192 Store Equipment
193 Accumulated Depreciation-Store Equipment
194 Office Equipment
195 Accumulated Depreciation-Office Equipment
LIABILITIES
210 Accounts Payable
216 Salaries Payable
218 Sales Tax Payable
219 Customers Refunds Payable
220 Unearned Rent
221 Notes Payable
EQUITY
310 Owner, Capital
311 Owner, Drawing
312 Income Summary
REVENUE
410 Sales
610 Rent Revenue
EXPENSES
510 Cost of Merchandise Sold
521 Delivery Expense
522 Advertising Expense
524 Depreciation Expense-Store Equipment
525 Depreciation Expense-Office Equipment
526 Salaries Expense
531 Rent Expense
533 Insurance Expense
534 Store Supplies Expense
535 Office Supplies Expense
536 Credit Card Expense
539 Miscellaneous Expense
710
Interest Expense
Journalize the adjusting entries for the following: (a) Estimated customer refunds and allowances. (b) Estimated customer returns. Refer to the Chart of Accounts for exact wording of account titles.
PAGE 10
JOURNAL
ACCOUNTING EQUATION
DATE DESCRIPTION POST. REF. DEBIT CREDIT ASSETS LIABILITIES EQUITY
1
Adjusting Entries
2
3
4
5
Answer:
a. Dr Sales $619,200
Cr Customer Refunds Payable $619,200
b. Dr Estimated Returns Inventory $400,000
Cr Cost of Merchandise Sold $400,000
Explanation:
a. Preparation of the journal entry to record Estimated customer refunds and allowances
Dr Sales $619,200
($51,600,000 × 1.2%)
Cr Customer Refunds Payable $619,200
(To record Estimated customer refunds and allowances )
b. Preparation of the journal entry to Estimated customer returns
Dr Estimated Returns Inventory $400,000
Cr Cost of Merchandise Sold $400,000
(To record Estimated customer returns)
Green Caterpillar Garden Supplies Inc. is considering a one-year project that requires an initial investment of $600,000; however, in raising this capital, Green Caterpillar will incur an additional flotation cost of 2%. At the end of the year, the project is expected to produce a cash inflow of $840,000. The rate of return that Green Caterpillar expects to earn on the project after its flotation costs are taken into account is:________
a. 29.80
b. 22.35
c. 37.25
d. 33.53
Answer:
c. 37.25%
Explanation:
Calculation to determine what Caterpillar expects to earn on the project after its flotation costs are taken into account is
First step
Net investment = Additional investment*(1 + Flotation cost rate)
Net investment= $600,000*(1 + 0.02)
Net investment= $612,000
Now let Compute the rate of return (ROR), using this formula
ROR = (Cash inflows – Net investment)/ Net investment
Let plug in the formula
ROR = ($840,000 - $612,000)/ $612,000
ROR = $228,000/ $612,000
ROR=37.25%
Therefore Caterpillar expects to earn on the project after its flotation costs are taken into account is 37.25%.
Both Bond Sam and Bond Dave have 8 percent coupons, make semiannual payments, and are priced at par value. Bond Sam has 3 years to maturity, whereas Bond Dave has 18 years to maturity. If interest rates suddenly rise by 5 percent, what is the percentage change in the price of Bond Sam
Answer: -12.1%
Explanation:
Bond Sam was priced at Par which means it could have been priced at $1,000 and its yield was the same as the coupon rate of 8%.
If interest rates rise by 5%, the yield becomes:
= 8% + 5%
= 13%
Price of bond is attached:
Yield = 13% /2 = 6.5% per semiannual period
Coupon = 8% * 1,000 * 0.5 = $40 per semi annual period
Period till maturity = 3 * 2 = 6 semiannual periods
Price = $878.97
Percentage change in price:
= (878.97 - 1,000) / 1,000 * 100%
= -12.1%
A major distinction between a conventional bank and an Islamic bank is that Islamic banks __ are allowed to charge higher interest on loans. cannot accept private deposits. cannot pay or charge interest. are not subject to any form of law,
Answer:
cannot pay or charge interest.
Explanation:
Islamic banks are banks that are based on Islamic laws or Sharia laws which is found in the Qur'an.
In Islamic banking, all banking transactions must be compliant with the Sharia laws.
Islamic banks differ from conventional banks in that :
1. they prohibit usury : Usury is charging interest on loans
2. they prohibit all forms of speculation : Islamic laws prohibit all forms of gambling
3. Investments in items that are not allowed in the Qur'an e.g. alcohol
Islamic bank use equity participation to make money. When an Islamic bank lends money to a business, instead of charging interest on the loan, the receive equity in that business and are entitled to a part of the company's shares
We are in a world with a real interest rate of 7%. The economy of Smoothiland is hit by a temporary shock to GDP of 200 million units at time T. The population of Smoothiland have a strong preference for consumption smoothing, and Smoothiland has an open economy.
1. By how much does consumption to fall in time T+1? (in millions, round to the closes decimal).
2. How much does the country have to borrow to maintain smooth consumption? (round to the closest decimal)
Answer:
1. 14.28 million units
2. The country has to borrow 200 million in order to maintain smooth consumption
Explanation:
1. Real interest rate = 7%
Temporary shock to GDP(Y) at Time(T)
= 200 million
Fall of consumption (T) in time T+1 =
So,
Y= C+rY
200=C+(0.07*200)
= C + 14
C = 200/14
= 14.28
Therefore,
Consumption will fall by 14.28 million units
2. The country has to borrow 200 million in order to maintain smooth consumption
