Answer:
1. 50%
2. $8,310
Explanation:
1. The computation of predetermined overhead rate is used in June is shown below:-
Predetermined overhead rate = Overhead Cost ÷ Direct labor Cost
= $125 ÷ $250
= 50%
2. The computation of cost is transferred to finished goods inventory in June is shown below:-
Job Raw Direct Overhead Total Cost transferred
material labor applied Cost to finished goods
602 $1,700 $1,000 $500 $3,200 $3,200
603 $3,100 $1,340 $670 $5,110 $5,110
604 $2,600 $1,800 $900 $5,300
Total
cost $7,400 $4,140 $2,070 $13,610 $8,310
The total cost is comprise of raw material, direct labor and overhead applied
And since Job 602 and 603 are finished in June so the same is to be considered and The job 604 is expected to finished in July so the same is not relevant
In a democratic capitalist environment the price mechanism automatically becomes the planning tool for its homeostasis; what is the significance of the public sector in this environment?
Answer:
In a market economy, the price mechanism is indeed the primary coordinator of the decisions of buyers and sellers, because the price for goods and services adjust to an equilibrium point, where demand and supply are equal.
However, the public sector still has two important functions in this enviroment:
Correcting market failures - a market failure is a situation in which the market does not produce a good outcome. An example of market failure is pollution. Market failures can be corrected by government intervention, for example, by setting anti-pollution regulations.Providing public goods - some public goods are not provided by the private sector because they are not profitable. The public sector can therefore step in and provide this type of goods.Moki Hunt recently purchased Swift Waters Adventures, a kayaking and canoeing rental business near the Salt River in Arizona. Swift Waters Adventures had been in operation for five years and was located in an ideal area. Even though the winters in the area can be cold, kayaking and canoeing activities are generally popular year-round. After two months of operation, it became clear why the previous owners had sold the business. While the business appeared to be ideally located, sales were extremely disappointing.
Before administering the questionnaire, Moki discovered through talking to other sports rental businesses that, although retired males made up a small percentage of the area's population, they often rented kayaks and canoes. In light of this, Moki decided to include a minimum of 25 percent retired males in his sample. The final choice of respondents was left up to the interviewers. This sampling method is known as ____ sampling.
a. quota
b. stratified
c. random
d. representative
e. area
Answer:
a. quota
Explanation:
Quota sampling can be described as a non-probability sampling method whereby a specific attribute possessed by respondents are looked for by the researchers, and then a tailored sample which represents a proportion or percentage of the population of interest is taken.
Therefore, the decision by Moki to include a minimum of 25 percent retired males in his sample is an example of quota sampling.
Management now needs to determine the number of engines to be produced in each plant in each month, as well as the number of engines each plant should sell to each assembly plant in June and July. Define decision variables and formulate to problem to maximize the total profit (total sales revenue minus sum of production costs, inventory costs, backordering costs, and shipping costs).
Answer:
yes
Explanation:
shhshsh I am not sure if you are not the intended recipient you are not the intended recipient
5x+2y=2
2x+y-z=0
2x+3y-z=3
Answer:
happy be happy hggh
Explanation:
Damon Company receives its monthly bank statement, which reports a balance of $1,875. After comparing this to the company’s cash records, Damon’s accountants determine that deposits outstanding total $3,700 and checks outstanding total $3,950.
Required:
Calculate the reconciled bank balance for cash.
Answer:
The reconciled bank balance for cash is $1,625.
Explanation:
This question centres around bank reconciliation statement preparation. Bank reconciliation is a way of reconciling the bank statement to the cash book balance. Usually, there are discrepancies between the two as a result of direct bank transfers, standing orders, etc. The reconciling items are cleared within the business rule to avoid having aging items in the bank reconciliation.
To reconcile the bank balance for cash, we do the following:
Damon Company
Bank reconciliation statement
Balance per bank statement $1,875
Add: Deposits outstanding $3,700
Less: Checks outstanding ($3,950)
Balance per cash book $1,625
The following data apply to Grullon-Ikenberry Inc. (GII): Value of operations $1,000, Short-term investments $100, Debt $300, Number of shares 100; The company plans on distributing $50 million as dividend payments. What will the intrinsic per share stock price be immediately after the distribution?pital-budget-850-000-wants-maintain-target-capital-structure-35-debt-65--q3670174
Answer:
1) $6.32
2) $7.50
3) $6.65
4) $7.35
The correct option is the second one ,$7.50
Explanation:
The value of operations is $1,000
If dividends of $50 million is paid,such cash would be paid would be gotten from short-term investments of $100 million since it is easily convertible to cash without losing a significant portion of its value,hence the short term investments reduce to $50 million
$ million
Value of operations $1000
plus value of non-operating assets $50
Value of firm $1050
less value of debt ($300)
Intrinsic value of the firm $750
Intrinsic value of share=$750/100=$7.5
The intrinsic value per share is the total value attributable to common stock divided by the number of common stock in issue.
Perpetual Inventory Using LIFOBeginning inventory, purchases, and sales data for prepaid cell phones for May are as follows:Inventory Purchases Sales May 1 1,550 units at $44 May 10 720 units at $45 May 12 1,200 units May 20 1,200 units at $48 May 14 830 units May 31 1,000 unitsAssuming that the perpetual inventory system is used, costing by the LIFO method, determine the cost of merchandise sold for each sale and the inventory balance after each sale, presenting the data in the form illustrated in Exhibit 5. Under LIFO, if units are in inventory at two different costs, enter the units with the HIGHER unit cost first in the Cost of Merchandise Sold Unit Cost column and LOWER unit cost first in the Inventory Unit Cost column.
Answer:
Date Purchases Sales
May 1 1,550 units at $44
May 10 720 units at $45
May 12 1,200 units
COGS (720 x $45 = $32,400)
COGS (480 x $44 = $21,120)
TOTAL COGS FOR MAY 12 SALE = $53,520
Inventory after sale 1,070 units at $44
May 20 1,200 units at $48
May 14 830 units
COGS (830 x $48 = $39,840)
TOTAL COGS FOR MAY 14 SALE = $39,840
Inventory after sale 1,070 units at $44
370 units at $48
May 31 1,000 units
COGS (370 x $48 = $17,760)
COGS (630 x $44 = $27,720)
TOTAL COGS FOR MAY 12 SALE = $45,480
Inventory after sale 440 units at $44
Under LIFO (last in, first out), the cost of goods sold is determined using the price of the last units purchased, which means that the most recent (or updated) price is used to calculate COGS.
MOSS COMPANY
Selected Balance Sheet Information
December 31, 2019 and 2018
2019 2018
Current assets Cash $ 90,150 $ 32,300
Accounts receivable 30,500 43,000
Inventory 65,500 55,200
Current liabilities Accounts payable 41,400 31,200
Income taxes payable 2,600 3,300
MOSS COMPANY
Income Statement
For Year Ended December 31, 2019
Sales $ 539,000
Cost of goods sold 353,600
Gross profit 185,400
Operating expenses Depreciation expense $ 47,000
Other expenses 127,500 174,500
Income before taxes 10,900
Income taxes expense 6,600
Net income $ 4,300
Use the information above to calculate cash flows from operating activities using the indirect method. (Amounts to be deducted should be indicated by a minus sign.)
Answer:
cash flows from operating activities is $63,000
Explanation:
Cash flow from Operating Activities
Net income before taxes 10,900
Adjustments for Non - Cash Items
Depreciation expense 47,000
Adjustments for Changes in Working Capital
Decrease in Accounts receivable 12,500
Increase in Inventory -10,300
Increase in Accounts payable 10,200
Cash Generated From Operations 70,300
Income tax Paid (3,300+6,600- 2,600) -7,300
Net Cash from Operating Activities 63,000
Therefore, cash flows from operating activities is $63,000
Following are Nintendo’s revenue and expense accounts for a recent March 31 fiscal year-end (yen in millions). (Enter answers in millions.) Net sales ¥ 1,888,622 Cost of sales 1,254,981 Advertising expense 118,308 Other expense, net 397,544 Prepare the company's closing entries for its revenues and its expenses.
Answer:
1.
Dr. Net Sales ¥ 1,888,622
Cr. Income Summary ¥ 1,888,622
2.
Dr. Income Summary ¥1,770,833
Cr. Cost of sales ¥ 1,254,981
Cr. Advertising expense ¥ 118,308
Cr. Other expense ¥ 397,544
Explanation:
Closing Entries are passed to close the temporary accounts of a business for the year. These accounts are closed and their balances are transferred to income summary account.
First we will close the the revenue / income accounts and then expenses or cost accounts.
Jack Spratt is the production manager for a manufacturing firm that produces wizzy-gadgets and other items. The annual demand for a particular wizzy-gadget is 1,600 units. The holding cost is $2 per unit per year. The cost of setting up the production line is $25. There are 200 working days per year. The production rate for this product is 80 per day. If his maximum inventory level is 180 units, how many units did he produce each time he started production of the wizzy-gadgets
Answer:
200 units
Explanation:
For computing the number of units produced each time we need to applied the economic order quantity formula which is shown below:
[tex]= \sqrt{\frac{2\times \text{Annual demand}\times \text{Ordering cost}}{\text{Carrying cost}}}[/tex]
where,
Annual demand is 1,600 units
Ordering cost per order is $25
And, the carrying cost or holding cost per unit per year is $2
Now placing these values to the above formula
So, the economic order quantity is
[tex]= \sqrt{\frac{2\times \text{1,600}\times \text{\$25}}{\text{\$2}}}[/tex]
= 200 units
Ravenna Company is a merchandiser that uses the indirect method to prepare the operating activities section of its statement of cash flows. Its balance sheet for this year is as follows:
Ending Balance Beginning Balance
Cash $80,800 $96,800
Accounts receivable 65,400 70,400
Inventory 87,800 80,000
Total current assets 234,000 247,200
Property, plant, and equipment 234,000 224,000
Less accumulated depreciation 78,000 56,000
Net property, plant, and equipment 156,000 168,000
Total assets $390,000 $415,200
Accounts payable $51,200 $91,000
Income taxes payable 39,800 51,200
Bonds payable 96,000 80,000
Common stock 112,000 96,000
Retained earnings 91,000 97,000
Total liabilities and stockholders’
equity $390,000 $415,200
During the year, Ravenna paid a $9,600 cash dividend and it sold a piece of equipment for $4,800 that had originally cost $10,800 and had accumulated depreciation of $7,200. The company did not retire any bonds or repurchase any of its own common stock during the year.
1. What is the combined amount and direction (+ or) of the inventory and accounts payable adjustments to net income in the operating activities section of the statement of cash flows?2. If the company debited income tax expense and credited income taxes payable $1,180 during the year, what is the total amount of the debits recorded in the Income Taxes Payable account?3. What is the amount and direction (+ or) of the income taxes payable adjustment to net income in the operating activities section of the statement of cash flows?4. Would the operating activities section of the company’s statement of cash flows contain an adjustment for a gain or a loss? What would be the amount and direction (+ or ) of the adjustment?
Answer:
1. Adjustment = - $46,800
2. Debits = $12,580
3. Adjustment = - $12,580
4. Yes : Adjustment = - $1,200
Explanation:
Required 1.
Prepare an Analysis of Cash Movement
Increase In Inventory ($7,000)
Decrease in Accounts payable ($39,800)
Combined Effect ($46,800)
Required 2
Open a Income tax Payable Account
Debit :
Closing Balance $39,800
Cash (Balancing figure) $12,580
Totals $52,380
Credit:
Opening Balance $51,200
Profit and Loss $1,180
Totals $52,380
Conclusion : Debit relate to the payment of Income taxes
Required 4.
Open an Equipment Disposal Account
Debit :
Cost $10,800
Profit and Loss (gain on sale) $1,200
Totals $12,000
Credit:
Accumulated Depreciation $7,200
Cash $4,800
Totals $12,000
Conclusion : Gain on Sale of Equipment is an Non - Cash item that needs an Adjustment in the Cash flow statement.
On January 2, 2021, Crane Company issued at par $9300 of 7% bonds convertible in total into 1000 shares of Crane's common stock. No bonds were converted during 2021. Throughout 2021, Crane had 1000 shares of common stock outstanding. Crane's 2021 net income was $4100, and its income tax rate is 25%. No potentially dilutive securities other than the convertible bonds were outstanding during 2021.
Crane's diluted earnings per share for 2021 would be _________ (rounded to the nearest penny)
Answer:
$2.29 per share
Explanation:
According to the scenario, computation of the given data are as follow:-
We can calculate the diluted earnings per share by using following formula:-
If Bonds Are Converted Net of Tax, Saving in Interest = ( Issued at Par × Rate of Bond) × (1 - Income Tax Rate)
= ( $9,300 × 0.07) × (1 - 0.25)
= $651 × 0.75 = $488.25
If Bonds Converted, Total Earnings = Net Income + Saving in interest
= $4,100 + $488.25
= $4,588.25
Total of outstanding share = 1,000 + 1,000 = 2,000
Diluted Earnings Per Share For 2021 = Total Earnings ÷ Total of Outstanding Share
= $4,588.25 ÷ 2,000
= $2.29 per share
A compay operates plants in both the United States (where capital is relatively cheap and labor is reltively expensive) and Mexico (where labaor is relatively cheap and capital is relatively expensive) Under what circumstances will the inpupt choice be relatively similar?
Answer: The input choice will be relatively similar when prices and the marginal product of both capital and labor are equal.
Explanation:
For a cost minimizing output, it is required for a firm to employ resoruces where the MPl/Pl = MPk/Ok
Note that:
MPl = marginal product of labor
Pl = labor price
MPk = marginal product of capital
Pk = capital price
A firm that has cheap capital resources will employ more capital likewise the company that has cheap labor resources will employ more of labor.
The input choice will be relatively similar when prices and the marginal product of both capital and labor are equal.
Cellular Access Inc., is a cellular telephone service provider that reported net operating profit after tax (NOPAT) of $ 250$250 million for the most recent fiscal year. The firm had depreciation expenses of $ 100$100 million, capital expenditures of $ 200$200 million, and no interest expenses. Working capital increased by $ 10$10 million. Calculate the free cash flow for Cellular Access for the most recent fiscal year.
Answer:
Therefore, the free cash flow for Cellular Access for the most recent fiscal year is $ 140 million
Explanation:
Given;
Net operating profit after tax (NOPAT) = $ 250
Depreciation expenses = $100 million
Capital expenditures = $200 million
Net working capital increment = $10 million
Free Cash Flows = net operating profit after tax + Depreciation - capital expenditure - Increase in net working capital
Free Cash Flows = ($250 + $100 - $200 - $10) million Free Cash Flows = $ 140 million
Wilturner Company incurs $85,000 of labor related directly to the product in the Assembly Department, and $34,000 of labor related to the Assembly Department as a whole, and $21,000 of labor for services that help production in both the Assembly and Finishing departments. The amount of direct labor and factory overhead respectively are:
Answer:
Direct labor= $85,000
Manufacturing overhead= $55,000
Explanation:
Giving the following information:
Wilturner Company incurs $85,000 of labor related directly to the product in the Assembly Department, and $34,000 of labor related to the Assembly Department as a whole, and $21,000 of labor for services that help production in both the Assembly and Finishing departments.
Manufacturing overhead is the number of production costs that can't be directly linked toa specific product. It includes indirect labor.
Direct labor= $85,000
Manufacturing overhead= 34,000 + 21,000= $55,000
When modeling the flow of income and expenditures in an economy the two principal participants are households (consumers) and firms (producers). The normal flow of resources would be that a firm would produce goods and services and the households would consume that good or service. Where else can the income of a household flow
Answer:
It must be found that the income of a home flows in a very habitual way day by day because the expenses that are generated in the daily living are many.
Regardless of the number of family members that make up a household, the flow of income will always correspond to a good or benefit to satisfy a basic or secondary need.
Explanation:
Other income that can flow from a household are those that are made through bank transactions, for scholarship payments, credit cards, or other types of transactions that allow households to make a profit.
Cutter Enterprises purchased equipment for $57,000 on January 1, 2021. The equipment is expected to have a five-year life and a residual value of $5,700. Using the double-declining-balance method, depreciation for 2021 and the book value at December 31, 2021, would be: Multiple Choice $20,520 and $33,780 respectively. $22,800 and $34,200 respectively. $20,520 and $36,480 respectively. $22,800 and $28,500 respectively.
Answer:
The correct answer is C.
Explanation:
Giving the following information:
Purchasing price= $57,000
Useful life= five-year
Residual value= $5,700.
To calculate the depreciation expense under the double-declining balance, we need to use the following formula:
Annual depreciation= 2*[(book value)/estimated life (years)]
Annual depreciation= 2*[(57,000 - 5,700)/5]
Annual depreciation= $20,520
Book value= 57,000 - 20,520
Book value= $36,480
Tallow, Inc. had reported the following balances: LOADING...(Click the icon to view the 2018 and 2019 balances.) 11. Compute Tallow's earnings per share for 2019. 12. Compute Tallow's price/earnings ratio for 2019, assuming the market price is $ 35 per share. 13. Compute Tallow's rate of return on common stockholders' equity for 2019. 11. Compute Tallow's earnings per share for 2019.
Answer:
Explanation:
Rate of return on common stockholder's equity for 2019:
= (Net Income - Preferred Dividend) / Av. common stockholder's equity
= ($94,000 - $26,000) / $312,000
= $68,000 / $312,000
= 0.2179 or 21.79%
Av. common stockholder's equity 2019 :
Total stockholder's equity 2018 ( Common) = Total stockholder's equity - Stockholder's Equity attributable to preferred
= $318,000 - $22,000
= $296,000
Total stockholder's equity 2019 ( Common) = Total stockholder's equity - Stockholder's Equity attributable to preferred
= $350,000 - $22,000
= $328,000
Av. common stockholder's equity 2019 = ($296,000 + $328,000) / 2 = $312,000
National Income Accounts (dollar figures are in billions)
Expenditures for consumer goods and services $2,850
Exports $300
Government purchases of goods and services $810
Social Security taxes $295
Net investment $510
Indirect business taxes $445
Imports $450
Gross investment $700
Corporate income taxes $190
Personal income taxes $875
Corporate retained earnings $210
Net foreign factor income $0
Government transfer payments to households $780
Net interest payments to households $20
On the basis of Table 5.2, GDP is:_______.
A) $2,090 billion.
B) $4,210 billion.
C) $4,400 billion.
D) $4,020 billion.
Answer:
B) $4,210 billion.
Explanation:
We will use the expenditure approach to calculate GDP. The formula is:
GDP = Consumption + Investment + Government Spending + Net Exports (Exports - Imports)
Now we take from the question the relevant information:
Consumption
Expenditures for consumer goods and services $2,850
Investment
Gross investment $700
Government Spending
Government purchases of goods and services $810
Net Exports
Exports $300
Imports $450
Net Exports: ($150)
Now, we plug these amounts into the formula:
GDP = $2,850 + $700 + $810 + ($150)
GDP = $4,240 Billion
Following are the merchandising transactions for Dollar Store:Nov. 1 Dollar Store purchases merchandise for $1,500 on terms of 2/5, n/30, FOB shipping point, invoice dated November 1.5 Dollar Store pays cash for the November 1 purchase.7 Dollar Store discovers and returns $200 of defective merchandise purchased on November 1, and paid for on November 5, for a cash refund.10 Dollar Store pays $90 cash for transportation costs for the November 1 purchase.13 Dollar Store sells merchandise for $1,600 with terms n/30. The cost of the merchandise is $800.16 Merchandise is returned to the Dollar Store from the November 13 transaction. The returned items are priced at $160 and cost $80: the items were not damaged and were returned to inventory.Journalize the above merchandising transactions for the Dollar Store assuming it uses a perpetual inventory system and the gross method.
The journal entries are shown below.
Journal entries;No Date General Journal Debit Credit
1 1-Nov Merchandise invnetory 1,500
Accounts payable 1,500
2 5-Nov Accounts payable 1,500
Merchandise inventory 30
cash 1470
3 7-Nov Cash 196
Merchandise inventory 196
4 10-Nov Merchandise inventory 90
cash 90
5 13-Nov Accounts receivable 1,600
Sales 1,600
6 cost of goods sold 800
Merchandise inventory 800
7 16-Nov Sales return and allowance 160
Accounts receivable 160
8 merchandise inventory 80
cost of goods sold 80
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The period manufacturing costs of a company is comprised of $2,000,000 in direct materials, $1,000,000 in direct labor, and $500,000 in overhead, resulting in 7,000 units of product. Manufacturing operations is consisted of two processes, machining and assembly. Machining takes up 40% of direct materials, 60% of direct labor, and 50% of overhead. Provide a hybrid manufacturing cost statement, containing combined activity based costing and process costing.
Answer:
The Direct material cost per unit is = 285.714 per unit
The Direct labor per unit is= 142.857 per unit
The Overhead cost per unit is = 71.4285 per unit
Explanation:
Solution
We recall that:
The total direct material= $2000000
The total direct labor= $1000000
The units in products = 7000 units
The total Overheads= $500000
Now,
The direct materials on machinery is = $ 800,000(40%)
The direct labor on machinery is= $ 600,000(60 %)
The machinery on overheard is = $ 250,000(50 %)
The direct materials on assembly is = $ 1200,000
The Direct labor on assembly is = $ 400,000
The Overhead on assembly is = $ 250,000
Thus,
The hybrid manufacturing cost statement is represented or shown below
Particular Machinery (40%)in $ Assembly (60%)in $ Total in $
Now,
Particular = Direct material,
Machinery (40%)in $ = 800000
Assembly 60% in $ = 1200000
Total in $ =2000000
Grand total = 1650000
Particular = labor
Machinery (40%)in $ = 600000
Assembly 60% in $ = 400000
Total in $ = 1000000
Grand total = 1850000
Particulars = Overhead
Machinery (40%)in $ =250000
Assembly 60% in $ = 250000
Total in $ = 500000
Grand total = 3500000
Thus,
The Direct material cost per unit = 2000000/7000 = 285.714 per unit
The Direct labor per unit = 1000000/700 = 142.857 per unit
The Overhead cost per unit = 500000/7 = 71.4285 per unit
a semiannual interest of 3.5%. Any money he invests would have to be left in the fund for at least five years if he wanted to withdraw it without penalty. a) What is the nominal interest rate on this investment? b) What is the annual effective interest rate? c) If James deposits $8,000 in the fund now, how much will it be worth in five years?
Answer:
Results are below.
Explanation:
Giving the following information:
The semiannual interest of 3.5%.
A) We need to calculate the nominal interest rate:
Nominal interest rate= 0.035/2= 0.0175
B) Real interest rate:
Real interest rate= (1.0175^2) - 1= 0.03531
It compounds interest twice a year. Therefore, is higher
C) Investment= $8,000
We will use the following formula:
FV= PV*(1+i)^n
n= 10
i= 0.175
PV= 8,000
FV= 8,000*(1.0175^10)
FV= $9,515.56
On January 1, 2014, Ridge Road Company acquired 25 percent of the voting shares of Sauk Trail, Inc. for $3,800,000 in cash. Both companies provide commercial Internet support services but serve markets in different industries. Ridge Road made the investment to gain access to Sauk Trail's board of directors and thus facilitate future cooperative agreements between the two firms. Ridge Road quickly obtained several seats on Sauk Trail's board which gave it the ability to significantly influence Sauk Trail's operating and investing activities.January 1, 2014, carrying amounts and corresponding fair values for Sauk Trail's assets and liabilities follow: Carrying Amount Fair ValueCash and receivables $ 165,000 $ 165,000Computing equipment 5,495,000 6,580,000Patented technology 155,000 4,110,000Trademark 205,000 2,110,000Liabilities (240,000 ) (240,000 )Also as of January 1, 2014, Sauk Trail's computing equipment had a remaining estimated useful life of seven years. The patented technology was estimated to have a five-year remaining useful life. The trademark's useful life was considered indefinite. Ridge Road attributed to goodwill any unidentified excess cost.During the next two years, Sauk Trail reported the following net income and dividends: Net Income Dividends Declared:2014 $ 1,910,000 $ 205,0002015 2,095,000 215,000a. How much of Ridge Road's $3,800,000 payment for Sauk Trail is attributable to goodwill?b. What amount should Ridge Road report for its equity in Sauk Trail's earnings on its income statements for 2014 and 2015?c. What amount should Ridge Road report for its investment in Sauk Trail on its balance sheets at the end of 2014 and 2015?
Answer: a. $236,500 b. $287,250 c. $4269500
Explanation:
The balance sheet also called the statement of financial position or a statement of financial condition is the summary of financial balances of an individual or an organization.
The calculations for a-c has been attached
A)
Acquisition Price $3,800,000
Book Val Acquired $1,445,000
Excess PMT $2,355,000
Excess fair value: Computer equip 271,250
Excess fair value: Patented Tech 988,750
Excess fair value: Trademark 476,250
1,736,250
Goodwill $618,750
Amortization
Computer equip $38,750
Patented Tech 197,750
$236,500
B)
Basic Equity accual 477500
Less: Amortization $236,500
$241,000
Basic Equity accrual 523750
Less: annual amortization $236,500
$287,250
C)
Acquisition Price $3,800,000
Add Equity $241,000
Less div -51250
Invest in ST1 $3,989,750
Add Equity $287,250
Less div -53750
Invest in ST2 $4,223,250
A person may be willing to pay more than the fundamental value of a stock today if he or she believes that someone else will pay even more for it in the near future. When many people purchase stocks based on this reasoning, the stock market can develop:
Answer:
A speculative bubble
Explanation:
A speculative bubble is simply said to be a sharp increase in the value of an asset within a known industry, commodity e.t.c. due to the wide speculation that a property will be more valuable in the near future, there will be a spike in that commodity since a lot of people want to purchase it. This bubble exist in different sectors especially in the stock market and in the economy
Trew Company plans to issue bonds with a face value of $902,000 and a coupon rate of 6 percent. The bonds will mature in 10 years and pay interest semiannually every June 30 and December 31. All of the bonds are sold on January 1 of this year. (FV of $1, PV of $1, FVA of $1, and PVA of $1). Determine the issuance price of the bonds assuming an annual market rate of interest of 7.5 percent.
Answer:
$807,992
Explanation:
issue $902,000 with a 6% semiannual coupon and 10 year maturity. coupon payment = $27,060
if the annual market interest rate = 7.5%, the bonds should be sold at a discount:
issue price = present value of face value + present value of interest payments
present value of face value = $902,000 / (1 + 3.75%)²⁰ = $431,961present value of annuity = $27,060 x {1 - [1 / (1 + 3.75%)²⁰]} / 3.75% = $376,031issue price = $431,961 + $376,031 = $807,992
the journal entry should be:
Dr Cash 807,992
Dr Discount on bonds payable 94,008
Cr Bonds payable 902,000
The issuance price of the bonds is $807,992.
The calculation is as follows:Issue price = present value of face value + present value of interest payments
Here
Present value of face value is
= $902,000 ÷ (1 + 3.75%)^20
= $431,961
And,
The present value of annuity is
= $27,060 × {1 - [1 ÷ (1 + 3.75%)^20]} ÷ 3.75%
= $376,031
So, the issue price is
= $431,961 + $376,031
= $807,992
Therefore we can conclude that The issuance price of the bonds is $807,992.
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Lion Company's direct labor costs for the month of January were as follows: What was Lion's direct labor efficiency variance? Select one: a. $6,000 favorable b. $6,150 favorable c. $6,300 favorable d. $6,450 favorable
Answer:
Direct labor time (efficiency) variance= $6,150 favorable
Explanation:
Giving the following information:
Lion Company's direct labor costs for the month of January were as follows:
Actual total direct labor-hours 20,000
Standard total direct labor-hours 21,000
Direct labor rate variance - unfavorable $3,000
Total direct labor cost $126,000
First, we need to calculate the standard direct labor hour cost.
Direct labor rate variance= (Standard Rate - Actual Rate)*Actual Quantity
Actual rate= 126,000/20,000= 6.3
-3,000= (SR - 6.3)*20,000
-3,000= SR20,000 - 126,000
123,000/20,000= SR
6.15= Standard rate
To calculate the direct labor efficiency variance, we need to use the following formula:
Direct labor time (efficiency) variance= (Standard Quantity - Actual Quantity)*standard rate
Direct labor time (efficiency) variance= (21,000 - 20,000)*6.15
Direct labor time (efficiency) variance= $6,150 favorable
On April 1 of the current year, Morgan Jones established a business to manage rental property. She completed the following transactions during April:
Opened a business bank account with a deposit of $46,000 in exchange for common stock.
Purchased office supplies on account, $3,180.
Received cash from fees earned for managing rental property, $8,940.
Paid rent on office and equipment for the month, $3,910.
Paid creditors on account, $1,450.
Billed customers for fees earned for managing rental property, $7,240.
Paid automobile expenses for month, $870, and miscellaneous expenses, $430.
Paid office salaries, $2,750.
Determined that the cost of supplies on hand was $1,880; therefore, the cost of supplies used was $1,300.
Paid dividends, $2,610.
Required:
1. Indicate the effect of each transaction and the balances after each transaction:
For those boxes in which no entry is required, leave the box blank.
For those boxes in which you must enter subtractive or negative numbers use a minus sign.
2. Stockholders’ equity is the right of stockholders (owners) to the assets of the business. These rights are increased by issuing common stock and revenues and decreased by dividends and expenses.
3. Determine the net income for April.
$
4. How much did April’s transactions increase or decrease stockholders’ equity?
Increased by $
Answer:
Morgan Jones
1. Effect of each transaction and the balances after each transaction:
a) Assets are increased by $46,000 and Equity is increased by $46,000.
Balances: Cash $46,000 and Common Stock $46,000
b) Assets are increased by $3,180 and Liabilities are increased by $3,180.
Balances: Office Supplies $3,180 and Accounts Payable $3,180
c) Assets are increased by $8,940 and Equity is increased by $8,940
Balances: Cash $54,940 and Retained Earnings $8,940
d) Assets are reduced by $3,910 and Equity is reduced by $3,910
Balances: Cash $51,030 and Retained Earnings $5,030
e) Assets are reduced by $1,450 and Liabilities are reduced by $1,450
Balances: Cash $49,580 and Accounts Payable $1,730
f) Assets are increased by $7,240 and Equity is increased by $7,240
Balances: Accounts Receivable $7,240 and Retained Earnings $12,270
g) Assets are reduced by $4,050 and Equity is reduced by $4,050
Balances: Cash $45,530 and Retained Earnings $8,220
Automobile Expenses = $870
Miscellaneous Expenses = $430
Office Salaries = $2,750
Total $4,050
h) Assets are reduced by $1,300 and Equity is reduced by $1,300
Balances: Office Supplies $1,880 and Retained Earnings $6,920
i) Assets are reduced by $2,610 and Equity is reduced by $2,610
Balances: Cash $42,920 and Retained Earnings $4,310
2. Stockholders' Equity:
Common Stock $46,000
Retained Earnings $4,310
Total Equity = $50,310
3. Net Income for April = $6,920
4. How much April's transactions increased or decreased stockholder' equity: increased by $4,310
Explanation:
a) Effect of transactions: Each transaction affects at least two accounts, one or two of assets and one or two of liabilities and equity. The accounting equation is represented by assets = liabilities + equity. This equation is always in balance by each transaction because of the double effects of each transaction.
b) Assets are the resources owned by the entity while liabilities and equity represent resources supplied by creditors and those belonging to the stockholders in the form of resources supplied to and generated by the entity. At each point in time, the assets belong proportionately to either the creditors (liabilities) or the stockholders (equity).
Mueller Company sold merchandise costing $120,000 for $240,000. Mueller estimates that merchandise costing $5,000 will be returned for a refund of $10,000. Mueller should report net sales of:
Answer:
The answer is $230,000
Explanation:
Net sales is the sum of a company's gross(total) sales minus any returned goods, sales allowances and/or discounts. The total amount of revenue on a company's income statement is the net sales.
Gross sales - $240,000
Merchandise returned - $10,000
Net sales = Gross sales - goods returned
$240,000 - $10,000
= $230,000
You accepted a new job with starting salary of $52,000 per year. The salary is expected to increase 4% each year. Now it is time to make a retirement plan for the next 39 years you expect to work. Your retirement fund has an annual interest rate of 5%, and You plan to deposit 10% of your annual salary into the account. (Hint: Be sure to move all values to the same point in time for equivalency.)
Answer:
FV= $1,607,145.61
Explanation:
Giving the following information:
Annual deposit= $5,200
Growth rate= 4%
Interest rate= 5%
Number of years= 39 years
First, we will include the growing rate in the interest rate:
Interest rate= 0.05 + 0.04= 0.09
Now, we can calculate the final value using the following formula:
FV= {A*[(1+i)^n-1]}/i
A= annual deposit
FV= {5,200*[(1.09^39)-1]/0.09]
FV= $1,607,145.61
Frank and Bob are equal members in Soxy Socks, LLC. When forming the LLC, Frank contributed $57,000 in cash and $57,000 worth of equipment. Frank's adjusted basis in the equipment was $42,000. Bob contributed $57,000 in cash and $57,000 worth of land. Bob's adjusted basis in the land was $23,000. On 3/15/X4, Soxy Socks sells the land Bob contributed for $65,000. How much gain (loss) related to this transaction will Bob report on his X4 return
Answer:
The gain (loss) related to this transaction will Bob report on his X4 return is $38,000
Explanation:
Solution
Given that
The value of land = 57,000
Less: Bob's Adjusted Basis in the land is = -$23,000
The Built in Gain allocated to BOB = $34,000
Now,
The consideration in sales = $65,000
Less: Land Value is = -57000
Both members gain to be allocated= 8000
Hence,
The Total Gain Allocated to BOB is = 34000+(8000*50%) =
34000 = 4000
= 38,000
Note: The original $34000 of built-in gain on the contributed land must be given to the contributing partner which is Bob.
The remaining $8000 of gain must be shared equally between Bob and Frank.
So, Bob will report $38000 gain ($34,000 + (50% × $8,000)) from this transaction on his returns
