Answer:
Underwood Corporation
Journal Entries:
Debit Credit
June 12, 2021:
Accounts Receivable $38,600
Service Revenue $38,600
To record services to customers on account
Sept. 17, 2021:
Cash Account $23,000
Accounts Receivable $23,000
To record cash receipt from customers.
Dec. 31, 2021:
Uncollectible Accounts Exp $7,020
Allowance for Doubtful Accounts $7,200
To record allowance for doubtful accounts.
March 4, 2022:
Accounts Receivable $53,600
Service Revenue $53,600
To record services to customers on account.
May 20, 2022:
Cash Account $10,000
Accounts Receivable $10,000
To record cash receipts from customers.
July 2, 2022:
Allowance for Doubtful Accounts $5,600
Accounts Receivable $5,600
To write off the uncollectible balance.
Oct. 19, 2022:
Cash Account $43,000
Accounts Receivable $43,000
To record cash receipts from customers.
Dec. 31, 2022:
Uncollectible Accounts Exp $3,170
Allowance for Doubtful Accounts $3,170
To record allowance for doubtful accounts.
b) Posting Transactions to the accounts:
Cash Account
Debit Credit Balance
Sept 17, 2021: Accounts Receivable $23,000 $23,000
May 20, 2022:Accounts Receivable $10,000 $33,000
Oct. 19, 2022: Accounts Receivable $43,000 $76,000
Accounts Receivable
Debit Credit Balance
June 12, 2021 Service Revenue $38,600 $38,600
Sept 17, 2021 Cash $23,000 $15,600
March 4, 2022 Service Revenue $53,600 $69,200
May 20, 2022 Cash $10,000 $59,200
July 2, 2022 Allowance for Uncollectible $5,600 $53,600
Oct. 19, 2022 Cash $43,000 $10,600
Allowance for Uncollectible Accounts
Debit Credit Balance
Dec. 31, 2021 Uncollectible Accounts Expense $7,200 $7,200
July 2, 2022 Accounts Receivable $5,600 $1,600
Dec 31, 2022 Uncollectible Accounts Expense $3,170 $4,770
3. Net Realizable Value of Accounts Receivable at the end of 2021 and 2022:
2021 2022
Accounts Receivable Balance $15,600 $10,600
less Allowance for Doubtful Accounts ($7,200) ($4,770)
Net Realizable Value $8,400 $5,830
Explanation:
a) Allowance for Doubtful is an amount that is estimated which may not be recovered from customers for services rendered. This allowance is made in order to provide for losses that may arise from credit sales. The estimated allowance is 45% of the Accounts Receivable Balance at the end of the year.
b) When a write-off of debts occurs, the Allowance for Doubtful Accounts is adjusted with the direct write-off to reduce the balance.
Tanning Company analyzes its receivables to estimate bad debt expense. The accounts receivable balance is $280,000 and credit sales are $1,000,000. An aging of accounts receivable shows that approximately 3% of the outstanding receivables will be uncollectible. What adjusting entry will Tanning Company make if the Allowance for Doubtful Accounts has a credit balance of $1,400 before adjustment
The beginning cash balance is $15,000. Sales are forecasted at $800,000 of which 80% will be on credit. 70% of credit sales are expected to be collected in the year of sale, 28% in the year thereafter. Cash expenditures for the year are forecasted at $475,000. Accounts Receivable from previous accounting periods totaling $9,000 and will all be collected in the current year. The company is required to make a $15,000 loan payment on the last day of every year.. Compute the excess of cash receipts over cash disbursements during the current year.
Answer:
$127,000
Explanation:
Cash sales=1-80%=20%*$800,000=$160,000.00
Credit sales collection=($800,000-$160,000)*70%=$448,000.00
Accounts receivable from previous year=$9,000
Total cash receipts=$160,000+$448,000+$9,000=$ 617,000.00
Total cash payments= cash expenditure+loan payment
cash expenditures is $475,000
loan payment is $15,000
total cash payments=$475,000+$15,000=$490,000
excess of cash receipts over cash disbursements=$617,000-$490,000=$127,000
Frogue Corporation uses a standard cost system. The following information was provided for the period that just ended:
Actual price per kilogram $2.50
Actual kilograms of material used 31,000
Actual hourly labor rate $18.10
Actual hours of production 4,900 labor hours
Standard price per kilogram $2.80
Standard kilograms per completed unit 6 kilograms
Standard hourly labor rate $18.00
Standard time per completed unit 1 hour
Actual total factory overhead $34,900
Actual fixed factory overhead $18,000
Standard fixed factory overhead rate $1.20 per labor hour
Standard variable factory overhead rate $3.80 per labor hour
Maximum plant capacity 15,000 hours
Units completed during the period 5,000
The direct materials cost variance is:_________.
Answer:
Materials Cost Variance = 6500 favorable
Explanation:
Frogue Corporation
AP= Actual price per kilogram $2.50
AQ= Actual kilograms of material used 31,000
SP = Standard price per kilogram $2.80
SQ= Standard kilograms per completed unit 6 kilograms = 5000 units *6 kg= 30,000 kg
Material Price Variance =( AP -SP)(AQ)=
= ( $2.50- $2.80)31,000 = 9300 Favorable
It is favorable because the standard price is higher than the actual price.
Material Quantity Variance =( AQ -SQ)(AP)= (31000- 30,000) 2.8
= 1000*2.8= 2800 unfavorable
It is unfavorable because the standard quantity is lower than the actual quantity.
Materials Cost Variance =Material Price Variance+Material Quantity Variance
=9300 Favorable+2800 unfavorable=
Materials Cost Variance = 6500 favorable
When favorable and unfavorable are added the unfavorable is with negative sign so they are subtracted.
Which of these behaviors is BEST for managing an intercultural project team?
a. Enter the situation with no knowledge of the local culture and customs to avoid any appearance of bias.
b. Classify members of the project team in accordance with popular stereotypes.
c. Learn alternative means of exchanging information.
d. Foster an atmosphere of inclusivity by ignoring cultural differences.
Answer:
Foster an atmosphere of inclusivity by ignoring cultural differences.
Explanation:
When we gather a team of individuals from different cultural backgrounds to form a team that undertake tasks to create a unique product or service, its good we acknowledge that differences exist between cultures. We are not expected to assign values to such cultures, terming some as right or wrong, good or bad. Every form of cultural stereotypes or bias much be avoided.
At December 31, 2020, Sandra’s Boutique had 1850 gift certificates outstanding, which had been sold to customers during 2020 for $70 each. Sandra’s operates on a gross profit of 60% of its sales. What amount of revenue pertaining to the 1850 outstanding gift certificates should be deferred at December 31, 2020?
Answer: $129,500
Explanation:
According to the Accrual Basis in Accounting, revenue and expenses should only be recognised when goods have been delivered.
On the December 31, 2020 Sandra's Boutique had 1,850 gift certificates outstanding but these had been sold already to people during the year for $70.
This means that they have been paid for a service that they have not given (they provide the service when the GIFT certificate is renewed).
They cannot therefore recognize the revenue as Revenue yet and have to defer it.
The amount to be Deferred will therefore be,
= 1,850 * $70
= $129,500
Without authorization, Brady uses the trademark of Ciera Coffee Company to promote cheap, flavorless candy, which is not similar to Ciera's products but diminishes the quality of the coffee company's mark. This is:________.
a. cybersquatting.
b. typosquatting.
c. trademark infringement.
d. trademark dilution.
Answer:
d. trademark dilution.
Explanation:
-Cybersquatting. is when someone registers a domain with the name of an organization or brand to sell it for a higher price.
-Typosquatting is when someone creates a website with a similar name of a well-known site so people will go to their website when they make a mistake writing the address.
-Trademark infringement is when someone uses a trademark on a similar product without permission from the owner and this can cause confusion to the customers.
-Trademark dilution is a concept that allows the owner to forbid someone from using their brand on a similar product if it can negatively affect the perception people have.
According to this, the answer is trademark dilution because Brady's use of the trademark have a negative impact on the perception people have about the brand.
Joe must pay liabilities of 2000 due one year from now and another 1000 due two years from now. He exactly matches his liabilities with the following two investments: Mortgage I: A one year mortgage in which X is lent. It is repaid with a single payment at time one. The annual effective interest rate is 6%.Mortgage II: A two-year mortgage in which Y is lent. It is repaid with two equal annual payments. The annual effective interest rate is 7%. Calculate X + Y.
Answer:
The value of X+Y=2,769
Explanation:
According to the given data we have the following:
x=present value of 2,000
=2,000/(1+0.06)=1,886.79
y=present value of 1,000
=1,000(1+0.07)∧2=873.44
x+y=1,886.79+873.44
=2,760.23
=2,769
The value of X+Y=2,769
Answer:
$2,760.23
Explanation:
As X and Y is the mortgage value, and we need to calculate it by using following formula
FV = PV x ( 1 + r )^n
PV = FV / ( 1 + r )^n
First we will calculate the X
Where FV =Future Value = 2,000
r = Annual effect interest rate = 6%
n = numbers of periods = 1 Year
By Placing values in the formula
PV = $2,000 / ( 1 + 6% )^1
PV = $1,886.79
Now we will Calculate the Y
Where FV =Future Value = 1,000
r = Annual effect interest rate = 7%
n = numbers of periods = 2 Year
By Placing values in the formula
PV = $1,000 / ( 1 + 7% )^2
PV = $873.44
As we need to calculate
X + Y = ?
So,
X + Y = $1,886.79 + $873.44 = $2,760.23
Although appealing to more refined tastes, art as a collectible has not always performed so profitably. During 2015, an auction house sold a painting for a price of $1,180,000. Unfortunately for the previous owner, he had purchased it three years earlier at a price of $1,760,000. What was his annual rate of return on this painting?
Answer:
≅-12.48
Explanation:
During 2015,$1,180,000 sales was made
3 years earlier, the previous owner would had purchased it at a price of $1,760,000
Annual rate of return on this painting
=[tex]\sqrt[1/3]{Final Value/Starting Value - 1}\\\sqrt[1/3]{1,180,000/1,760,000 - 1}[/tex]
≅-12.48
The cash flows for a project include the:_______.a. net income generated by the project plus the annual depreciation expense. b. sunk costs, opportunity costs, and erosion costs of the project. c. incremental operating cash flow, as well as the capital spending and net working capital requirements. d. net operating cash flow generated by the project, less both sunk cost and erosion costs.
Answer: c. incremental operating cash flow, as well as the capital spending and net working capital requirements
Explanation:
During financial planning for projects, understanding the inflows and outflows of cash which will be created by the project is important. The cash flows for a project include the incremental operating cash flow, and the capital spending and net working capital requirements
The incremental cash flow is an additional operating cash flow which an organization receives from doing a new project. Capital spending is the money an organization spends to purchase, maintain, and improve its fixed assets, like vehicles, land, buildings, or equipment.
Dexo Inc. plans to launch a new version of its beverage, Lime n' Lemon. The new variant will be similar to the current Lime n' Lemon in terms of taste and packaging, but it will be fortified with vitamins and minerals. The company decides to market the new drink as Lime n' Lemon Extreme. Which of the following new product categories does this new beverage fall into?
a. New-to-the-world products
b. New-to-the-firm products
c. Improvements and revisions of existing products
d. Repositionings
Answer:
C. Improvements and revisions of existing products.
Explanation:
The new and improved product may have significantly or slightly changed. Most products fit into the revision or improvement category.
Product improvements can be quite substantial or quite minor.
There are also benefits of a product been improved which could range from:
1). Match or outperform competition.
2). Meet changing consumer needs.
3). Leverage improvements in materials or manufacturing technology.
4). Provide variety etc.
An instance can be seen for a food product one of the ingredients may be changed to enhance the taste. Or the packaging may be changed to make it easier to open or to protect the product better.
Answer:
c. Improvements and revisions of existing products
Explanation:
Dexco is planning to launch a new version of its beverage that is fortified with minerals and vitamins. Also the name it intends to use for marketing this product is Lime n Lemon Extreme.
When categorising the product it will be a modification or revision of an existing product Lime n Lemon.
This is not a new product for the company as it is produced based on idea form a previous product.
The Woods Co. and the Spieth Co. have both announced IPOs at $49 per share. One of these is undervalued by $14, and the other is overvalued by $5, but you have no way of knowing which is which. You plan to buy 1,500 shares of each issue. If an issue is underpriced, it will be rationed, and only half your order will be filled. a. If you could get 1,500 shares in Woods and 1,500 shares in Speith, what would your profit be
Answer:
The profit that would result from both shares is $13,500
Explanation:
Loss would emanate from overvaluation while profit would result from undervaluation,that is the key to solving the question.
Loss from overvaluation=1,500*$5=$7,500
Profit from undervaluation=1,500*$14=$21,000
Profit from the investment =Profit from undervaluation-loss from overvaluation=$21,000-$7,500=$13,500
Games Galore Corp. hires Haley, a minor, to create new customized game software for certain clients. Haley signs a contract that requires her to work for Games Galore for eighteen months. Before beginning work, however, Haley tells Games Galore that she will not create new software for Games Galore and that she is going to work for Ideal Worldcraft, Inc., a Games Galore competitor. Is Games Galore's contract with Haley enforceable? Why or why not?
Explanation:
In the scenario exemplified in the question above, it can be said that because he is a minor, Haley's contract with Games Galore can be canceled.
Therefore, if the case is brought to court, it will likely be determined that Haley will return the valuable work materials provided by Game Galore and any amounts received by Haley that were provided for in the contract.
Apple Inc. is the number one online music retailer through its iTunes music store. Apple sells iTunes gift cards in $15, $25, and $50 increments. Assume Apple sells $19.8 million in iTunes gift cards in November, and customers redeem $12.8 million of the gift cards in December.
Required:
a. Record the receipt of cash for gift cards.
b. Record the revenue earned from redemption of gift cards.
c. What is the ending balance in Deferred revenue?
Answer:
a and b is recorded in the attached
c=$19,800,000 - $12,800,000 = $7,000,000
Explanation:
Kindly check the attached word file for the records
Midas Corporation is a sporting goods manufacturer. Most of its energies and resources are devoted to manufacturing and selling a line of sports shoes that has been a reasonable hit in the past. The company rarely undertakes any marketing research studies to assess consumer wants and needs and seldom devises new advertising or promotional strategies. Midas Corporation is exhibiting _____. Selected Answer: Correct production orientation Answers: investor orientation market orientation customer orientation
Answer:
Production orientation
Explanation:
When a company engages in production orientation it means that they are producing what they believe their customers will purchase simply because they are offering it. The company does not care about their customers' needs and preferences, and simply believes that because they are good at producing a certain type of product that was successful in the past, it will continue to be successful and its customers will remain loyal to them. This philosophy was very popular during the industrial revolution where companies produced what they could hoping that there would be enough customers to buy their production regardless of what it was.
Richard Palm is the accounting clerk of Olive Limited. He uses the source documents such as purchase
orders, sales invoices and suppliers’ invoices to prepare journal vouchers for general ledger entries.
Each day he posts the journal vouchers to the general ledger and the related subsidiary ledgers. At the
end of each month, he reconciles the subsidiary accounts to their control accounts in the general
ledger to ensure they balance.
Discuss the internal control weaknesses and risks associated with the above process
Answer:
Internal control weaknesses and risks associated are as follows:
No proper segregation of duties - the accounting clerk is the who prepares the journal voucher and records the transactions in the system. He is also the one who performs monthly reconciliation. With no proper segregation of duties, there is an increased risk of material misstatements due to error or fraud not being detected and corrected. Assets will also be susceptible to theft or misappropriation due to a lack of segregation of duties.
No review is being performed by the clerk before recording the transaction - before recording, the accounting clerk should have matched and reviewed the details per invoice to its supporting documents. With no proper review, there is increased risk that balances in the financial statements are not recorded at correct amounts e.g., liabilities recorded are not valid due to undelivered inventories, assets are overstated due to no actual goods received yet, etc. There's also a risk that transactions are not recorded at the correct accounting period since the clerk does not review the details in the source document.
No review is being performed on the work performed by the clerk - since no oversight or review is being performed, there is an increased risk that the clerk will record fictitious transactions e.g., fictitious sales, fictitious cash disbursement, etc that may result to material misstatements in the financial statements.
The following are the risks associated with the above process;
There is a lot of burden placed on one individual (Richard Palm).
There is no work distribution- Richard does the entire job from dealing with purchasing orders, sales invoices and suppliers' invoices.
The process is prone to fraud and errors as Richard has to manage too much work on his own. In the process of reconciling of the subsidiary accounts to the control accounts he may lose some of the data.
There is also data confidentiality risk- organizations' data should be handled with confidentiality and information should remain private.
Prescott Corp. owned 90% of Bell Inc., while Bell owned 10% of the outstanding common shares of Prescott. No goodwill or other allocations were recognized in connection with either of these acquisitions. Prescott reported operating income of $266,000 for 2013 whereas Bell earned $98,000 during the same period. No investment income was included within either of these income totals. On a consolidated income statement, what is the non-controlling interest in Bell's net income?
Answer:
Non-controlling interest in Bell's net income = $136,923
Explanation:
Given:
Prescott Corp. owned 90% of Bell Inc.
Bell Inc. owned 10% Prescott Corp
Computation:
Total income of Prescott Corp = $266,000 + 90% of Bell Inc income......Eq1
Total income of Bell Inc = $98,000 + 10% of Prescott Corp income...........Eq2
From Eq1 and Eq2
Total income of Prescott Corp = $266,000 + 90%($98,000 + 10% of Prescott Corp income)
Total income of Prescott Corp = $266,000 + $88,200 + 0.09 Prescott Corp income
Total income of Prescott Corp - 0.09 Prescott Corp income = $354,200
0.91 Prescott Corp income = $354,200
Prescott Corp income = $389,230.769
Prescott Corp income = $389,231
Non-controlling interest in Bell's net income = $98,000 + 10% of Prescott Corp income
Non-controlling interest in Bell's net income = $98,000 + 10%($389,231)
Non-controlling interest in Bell's net income = $98,000 + $38,923
Non-controlling interest in Bell's net income = $136,923
Xenon Inc.’s August 31 bank statement had an ending cash balance of $2,567. On August 31, Xenon’s general ledger showed a balance of $860. After comparing the general ledger to the bank statement the following items were noted: Outstanding checks: $2,250 Interest paid by the bank: $12 An NSF check from one of Xenon’s customers: $32 Deposits in transit: $1,900 A service fee charged by the bank: $8 A direct deposit from a customer: $1400 Check #345 was written at Acme Insurance; the amount of the check was $615. It was recorded in the general ledger for $600.
Prepare a bank reconciliation for Xenon, Inc.
Answer:
Bank Reconciliation Statement as at August 31
Balance at Bank as per Updated Cash Book $2,281
Add Unpresented Cheques $2,250
Less Lodgements not yet credited ($1,900)
Balance as per Bank Statement $2,631
Explanation:
Step 1 Bring the Cash Book Bank Balance up to date
Debit :
Balance as at August 31, $860
Interest $12
NSF check $32
Direct deposit $1400
Totals $2,304
Credit :
Service fee charged $8
Insurance understated $15
Updated Cash Book Balance (Balancing figure) $2,281
Totals $2,304
Step 2 Prepare the Bank Reconciliation Statement
Bank Reconciliation Statement as at August 31
Balance at Bank as per Updated Cash Book $2,281
Add Unpresented Cheques $2,250
Less Lodgements not yet credited ($1,900)
Balance as per Bank Statement $2,631
a company earned $3,000 in net income for october. its net sales for october were $10,000. its profit margin is
Answer:
30%
Explanation:
The computation of the profit margin is shown below:
Given that
Net income earned for the month of October = $3,000
And, the net sales for the month of October is $10,000
Based on the above information, the profit margin is
= Net income ÷ Net sales
= $3,000 ÷ $10,000
= 30%
By dividing the net income from the net sales we can get the profit margin and the same is to be considered
Answer:
30%
Explanation:
quick math
Colah Company purchased $2,400,000 of Jackson, Inc., 6% bonds at their face amount on July 1, 2021, with interest paid semi-annually. The bonds mature in 20 years but Colah planned to keep them for less than 3 years, and classified them as available for sale investments. When the bonds were acquired Colah decided to elect the fair value option for accounting for its investment. At December 31, 2021, the Jackson bonds had a fair value of $2,740,000. Colah sold the Jackson bonds on July 1, 2022 for $2,160,000.
The purchase of the Jackson bonds on July 1.
Interest revenue for the last half of 2021.
Any year-end 2021 adjusting entries.
Interest revenue for the first half of 2022.
Any entry or entries necessary upon sale of the Jackson bonds on July 1, 2022.
Required:
1. Prepare Colah’s journal entries for above transactions.
2. Complete the following table to show the effect of the Jackson bonds on Colah’s net income, other comprehensive income, and comprehensive income for 2021, 2022, and cumulatively over 2021 and 2022.
Answer:
Dr bonds investment $2,400,000
Cr cash $2,400,000
Dr cash $ 72,000.00
Cr interest revenue $72,000.00
Dr fair value adjustment $ 340,000.00
Cr unrealized gains $340,000.00
2022:
Dr cash $ 72,000.00
Cr interest revenue $72,000.00
Dr realized loss($2,160,000-$2,400,000) $240,000
Cr fair value adjustment $240,000
sale of bonds:
Dr cash $2,160,000
Dr realized loss $240,000
Cr bonds investment $2,400,000
Explanation:
Upon purchase of investment,the bond investments is debited with $2.4 million and cash credited with same amount
Interest revenue for last half year=$2,400,000*6%*6/12=$72,000.00
unrealized gains=$2,740,000-$2,400,000=$340,000.00
Interest for first half of 20222=$2,400,000*6%*6/12=$72,000.00
A small firm makes three products, which all follow the same three-step (milling, inspection, and drilling) process. Product A requires 6 minutes of milling, 5 minutes of inspection, and 4 minutes of drilling; product B requires 2.5 minutes of milling, 2 minutes of inspection, and 2 minutes of drilling; and product C requires 5 minutes of milling, 4 minutes of inspection, and 8 minutes of drilling. The firm has 20 hours available during the next period (next week) for milling, 15 hours for inspection, and 24 hours for drilling. Product A contributes $6.00 per unit to profit, product B contributes $4.00 per unit, and product C contributes $10.00 per unit. 1 hour has 60 minutes. The firm needs to determine the quantities of product A, B, and C, with a goal of maximizing the total profit.
At the optimum solution, what is the company's profit during the next period?
How many units of each are produced at the optimal solution (use numbers)?
Answer:
At the optimum solution, what is the company's profit during the next period?
$2,070How many units of each are produced at the optimal solution (use numbers)?
180 units of product B135 units of product CExplanation:
Milling Inspection Drilling C.M.
Product A 6 5 4 $6
Product B 2.5 2 2 $4
Product C 5 4 8 $10
total time 1,200 900 1,440
Contribution margin per minute
Milling Inspection Drilling Total
Product A $1 $1.20 $1.50 $3.70
Product B $1.60 $2 $2 $5.60
Product C $2 $2.50 $1.25 $5.75
Even though product C has a higher contribution margin, its total production will be contrained by Drilling, since only 180 units can be completed (= 1,440 hours / 8 hours per unit) profits will equal $1,800.
So we must continue with product B which has the second highest contribution margin per minute with a maximum production of 450 units (Milling is the constraint). This would result in a total profit of $1,800.
The maximum production of product A is also 180 units (inspection is the constraint), which would generate only $1,080 in profits. So we can eliminate product A from the analysis.
Now we need to determine which combination of products B and C should be produced.
If we produce 180 units of product B and 135 units of product C, our total profits will be (180 x $4) + (135 x $10) = $2,070
total number of machine hours employed:
Milling Inspection Drilling
Product B 450 360 360
Product C 675 540 1,080
total 1,125 900 1,440
only 75 hours of Milling will be idle under the production schedule.
Inventory Valuation under Absorption CostingDuring the most recent year, Judson Company had the following data associated with the product it makes:Units in beginning inventory 300Units produced 14,200Units sold ($300 per unit) 12,700Variable costs per unit: Direct materials $20Direct labor $60Variable overhead $13Fixed costs: Fixed overhead per unit produced $30Fixed selling and administrative $140,000Required:1. How many units are in ending inventory?2. Using absorption costing, calculate the per-unit product cost.3. What is the value of ending inventory under absorption costing?
Answer:
Instructions are below.
Explanation:
Giving the following information:
Units in beginning inventory 300
Units produced 14,200
Units sold ($300 per unit) 12,700
Variable costs per unit:
Direct materials $20
Direct labor $60
Variable overhead $13
Fixed costs:
Fixed overhead per unit produced $30
Fixed selling and administrative $140,000
1) Ending inventory= units produced + beginning inventory - units sold
Ending inventory= 14,200 + 300 - 12,700
Ending inventory= 1,800
2) The absorption costing method includes all costs related to production, both fixed and variable. The unit product cost is calculated using direct material, direct labor, and total unitary manufacturing overhead.
Unit product cost= 20 + 60 + 13 + 30
Unit product cost= $123
3) Ending inventory= 1,800*123= $221,400
Suppose the current spot rate for the Norwegian kroner is $1 = NKr6.6869. The expected inflation rate in Norway is 6 percent and in the U.S. it is 3.1 percent. A risk-free asset in the U.S. is yielding 4 percent. What risk-free rate of return should you expect on a Norwegian security?
Answer:
The risk-free rate of return expected on a Norwegian security is 6.9%
Explanation:
Here, we are expected to calculate the risk-free rate of return on a Norwegian security.
We use the mathematical formula as follows;
Risk-free home - Expected inflation home = Risk free foreign - Expected inflation foreign
Kindly note that home refers to the US while foreign refers to Norway
From the question, we identify the following terms;
Risk-free home = 4%
Expected inflation home = 3.1%
Risk-free foreign = ?
Expected inflation foreign = 6%
Now, plugging these values, we have;
4% - 3.1% = ? - 6%
0.9% = ?- 6%
6% + 0.9% = ?
? = 6.9%
Thus, the risk-free rate of return expected on a Norwegian security is 6.9%
The risk-free asset in the U.S. is yielding 4 percent.
Risk-free rate in US - Inflation rate = Risk free rate in Norway - Inflation rate
4% - 3.1% = Risk free rate - 6%
Risk-free rate in Norway = 0.9% + 6%
Risk-free rate in Norway = 6.9%
So, the risk-free rate of return expected on a Norwegian security is 6.9%.
What is risk-free return?The risk-free rate of return is the theoretical rate of return of an investment with zero risk. The risk-free rate represents the interest an investor would expect from an absolutely risk-free investment over a specified period of time.
A risk-free asset is one that has a certain future return and virtually no possibility of loss.
Thus, the risk-free rate of return expected on a Norwegian security is 6.9%.
Learn more about risk-free return here,
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Analysis reveals that a company had a net increase in cash of $22,420 for the current year. Net cash provided by operating activities was $20,200, net
cash used in investing activities was $11,100 and net cash provided by financing activities was $13,320. If the year-end cash balance is $27,300, the
beginning cash balance was:
Answer: $4,880
Explanation:
The Cashflow Statement shows just how much raw cash a company has and so is very important in Accounting as it shows the company how much it can actually spend.
The beginning Cashflow can be calculated using the formula,
Beginning Cash Balance = Ending Cash Balance - Net Increase in CASH for the year
Beginning Cash Balance = 27,300 - 22,420
Beginning Cash Balance = $4,880
Normally this would be the formula,
Beginning Cash Balance = Ending Cash Balance + Net Outflows - Net Inflows.
Because however, you were already given the Net Increase in cash, use that instead.
Daniel deposits $2,000 per year at the end of the year for the next 15 years into an IRA account that currently pays 7%. How much will Daniel have on deposit at the end of the 15 years
Answer:
$50,258.
Explanation:
According to the scenario, computation of the given data are as follow:-
We can calculate the deposit amount at the end of 15 years by using following formula:-
Deposit Amount per year(PMT) = $2,000
Interest rate = 7% = 0.07
Deposit year (n) = 15 years
Future value(FVIFA) = PMT × [{(1 + interest rate)^number of years - 1} ÷ interest rate]
= $2,000 × [{(1 + 0.07)^15 - 1} ÷ 0.07]
= $2,000 × [{2.7590315 - 1} ÷ 0.07]
= $2,000 × [1.7590315/0.07]
= $2,000 × 25.129022
= $50,258
According to the analysis total deposit at the end of the year is $50,258.
"What is the value today of $1,400 per year, at a discount rate of 10 percent, if the first payment is received 5 years from now and the last payment is received 26 years from today
Answer:
Present Value= $7,518.22
Explanation:
Giving the following information:
Cash flow= $1,400 per year
Interest rate= 10 percent
Number of years= 21 years
5 years from now a
First, we need to calculate the value of the investment 5 years from now. To do that, we determine the final value and then the present value.
FV= {A*[(1+i)^n-1]}/i
A= annual deposit
FV= {1,400*[(1.10^21)-1]}/0.1
FV= 89,603.50
PV= FV/(1+i)^n
PV= 89,603.50/ (1.1^21)
PV= 12,108.17
Finally, the value today:
PV= 12,108.17/1.1^5
PV= $7,518.22
Consider the following production data for Alternatives A and B in a firm that uses a 10% interest rate. Annual fixed cost per unit Alt A - $ 2 million Alt B - $ 3.5 million Annual variable cost per unit Alt A - $ 850 Alt B - $250 If the company is going to produce 4000 units annually, which alternative should be chosen? a. Alt. A b.Neither alternative should be chosen because the negative cash flows are greater than the positive cash flows for both alternatives. c. This problem cannot be solved because there is not enough data given. d. Alt. B
ANSWER: This problem cannot be solved because there is not enough data given. Option C is the most correct option.
EXPLANATION: when setting up a business, we consider all alternative of production, and determine the one that has a lower cost and still gives the best output, that is optimization.
For the question: it cannot be solved because of the negative sign in the cost, which needs to be explained further in the question. This cost cannot be entered into book keeping unless more explanation is given to the negative sign, as cost is not revenue. It is the money spent already and should have a positive sign.
Heather Hudson makes stuffed teddy bears. Recent information for her business follows: Selling price per bear$35.00 Total fixed cost per month 1,500.00 Variable cost per bear 24.00 Determine the degree of operating leverage if she sells 350 bears this month. (Round your answer to 2 decimal places.) 35.00
Answer:
1.64
Explanation:
Heather Hudson degree of operating leverage
Formula for degree of operating leverage will be:
Degree of Operating Leverage = Total Contribution Margin / Net Operating Income
Total CM = (35-24) * 350
= 3,850
Formula for Net operating income
Net Operating income = Contribution Margin – Fixed Costs
= 3,850 – 1,500 =2,350
Therefore:
Operating Leverage =
3,850/2,350
= 1.64
Answer:
1.64
Explanation:
Heather Hudson is a manufacturer of stuffed teddy bears, the following are the current information gotten from her business
Selling price of the bear= $35
Total fixed cost per month= 1,500
Variable cost for one near= 24
The formular used to calculate the degree of operating leverage is
= Total contribution margin/ Net operating income
First of all we have to find the Total contribution margin
= (35-24)×350
= 11×350
= 3,850
Total contribution cost = 3,850
The next step is to find the Net operating income
= Contribution margin-fixed costs
= 3,850-1,500
= 2,350
Therefore the degree of operating leverage is
= 3,850/2350
= 1.64
Hence Heather Hudson degree of operating leverage if she sells 350 bears for a month is 1.64
Evaluate the set of events below. Determine how the events will impact their respective markets. a. In examining the market for personal computers, a technological improvement reduces the cost of production. The effect of the event will be in . As a result, the equilibrium price will and the equilibrium quantity will . b. In examining the market for smart phones, there is a reduction in the number of sellers. The effect of the event will be in . As a result, the equilibrium price will and the equilibrium quantity will . c. In examining the market for apps for smart devices, there is a tax levied on the sellers of apps. The effect of the event will be in . As a result, the equilibrium price will and the equilibrium quantity will .
Answer:
One thing to clear ab initio is that equilibrium quantity and price are achieved when the demand and supply curves intersect at a point. Therefore, at equilibrium, the demand and supply in quantity are equal.
a) If a technological improvement reduces the cost of product, the equilibrium price will reduce and equilibrium quantity will be equal to the quantity demanded and supplied.
b) If there is a reduction in the number of sellers, the equilibrium price will increase and the equilibrium quantity will be equal to the quantity demanded and supplied.
c) If there is a tax levied on the sellers of apps, the equilibrium price will increase and the equilibrium quantity will be equal to the quantity demanded and supplied.
Explanation:
a) The market is in equilibrium when the supply and demand curves intersect, meaning that the quantity demanded and quantity supplied are equal. The price and quantity at which this intersection occurs are called the equilibrium price and equilibrium quantity respectively. In economics, when quantity supplied equals quantity demanded, an equilibrium situation is achieved, and it is represented by this equation: Qs = Qd; where Qs is quantity supplied and Qd is quantity demanded.
b) Equilibrium price reduces when there is a cost reduction and more supplies are pushed to the market to meet demand.
c) When suppliers leave the market, it means that the market price and demand are no longer attractive and beyond their individual influence. This leads to a reduction in quantity supplied overall.
d) Sales tax increases the price of goods and services, and equilibrium will be achieved when there consumers demand the product with increased price and sellers are willing to produce and sell at such a price.
The proposals submitted to the customer should:
A. be set aside and have the team request a best and final offer from every bidder to get a lower price and choose the one with the new lowest price.
B. be examined for free advice on how to solve the problem then assign an internal project team to what was the best solution.
C. be reviewed by one person without any predefined criteria for evaluation.
D. be reviewed by a team and evaluated on predefined evaluation criteria.
Answer:
The proposals submitted to the customer should:
D. be reviewed by a team and evaluated on predefined evaluation criteria.
Explanation:
In business, a proposal is a business application from one entity to another, soliciting for a contract based on an understanding of the customer's problems and requirements.
There many sections, including objectives, recommended solution, estimated project schedule, company's background information, fee summary, and other important terms and conditions.
Given the above sections, it becomes necessary for a team to evaluate proposals before they are submitted to customers. Teamwork will help modifications to be made based on each customers requirements.
A company often uses proposals for different purpose. The proposals submitted to the customer should be set aside and have the team request a best and final offer from every bidder to get a lower price and choose the one with the new lowest price.
RFP is simply known as request for proposal. It is simply known as a type of document that contains a lists all of the requirements and needs of a specific project.It aid firms in their preparation for upcoming projects as it is a kind of a proposal used by potential contractors and agencies.
Conclusively an RFP for a potential customer should be well written, stated out and one should take great care that is carried out rightly.
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The predetermined overhead rate for manufacturing overhead for 2018 is $4.00 per direct labor hour. Employees are expected to earn $5.00 per hour and the company is planning on paying its employees $100,000 during the year. However, only 75% of the employees are classified as "direct labor." What was the estimated manufacturing overhead for 2018
Answer:
$60,000= total estimated overhead costs
Explanation:
Giving the following information:
The predetermined overhead rate for manufacturing overhead for 2018 is $4.00 per direct labor hour.
Direct labor hour= $5.00 per hour
Direct labor hours= (100,000*0.75)/5= 15,000 hours
To calculate the estimated overhead costs, we need to use the following formula:
Estimated manufacturing overhead rate= total estimated overhead costs for the period/ total amount of allocation base
4= total estimated overhead costs for the period/15,000
$60,000= total estimated overhead costs for the period
