Byron Books Inc. recently reported $13 million of net income. Its EBIT was $20.8 million, and its tax rate was 35%. What was its interest expense? (Hint: Write out the headings for an income statement, and fill in the known values. Then divide $13 million of net income by to find the pretax income. The difference between EBIT and taxable income must be interest expense. Use this same procedure to complete similar problems.)

Answer:

Interest expense = $800,000

Explanation:

Given:

Net income = $13,000,000

EBIT = $20,800,000

Tax rate = 35% = 0.35

Find:

Interest expense

Computation:

Net income= (EBIT - Interest expense) × ( 1-tax rate)

$13,000,000 = [$20,800,000 - Interest expense][1-0.35]

20,000,000 = [$20,800,000 - Interest expense]

Interest expense = $800,000

Following are the transactions of a new company called Pose-for-Pics. Aug. 1 Madison Harris, the owner, invested $14,000 cash and $60,200 of photography equipment in the company. 2 The company paid $3,600 cash for an insurance policy covering the next 24 months. 5 The company purchased office supplies for $2,660 cash. 20 The company received $3,850 cash in photography fees earned. 31 The company paid $871 cash for August utilities. Prepare general journal entries for the above transactions.

Rowland & Sons Air Transport Service, Inc., has been in operation for three years. The following transactions occurred in February:
Feb. 1 Paid $500 for rent of hangar space in February.
Feb. 4 Received customer payment of $1,510 to ship several items to Philadelphia next month.
Feb. 7 Flew cargo from Denver to Dallas; the customer paid in full ($1,410 cash).
Feb. 10 Incurred and paid $1,500 in pilot wages for flying in February.
Feb. 14 Paid $116 for an advertisement run in the local paper on February 14.
Feb. 18 Flew cargo for two customers from Dallas to Albuquerque for $2,130; one customer paid $860 cash and the other asked to be billed $1,270.
Feb. 25 Purchased on account $1,755 in supplies for future use on the planes.
Required:Prepare accrual basis journal entries for each transaction. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field.)

The following transactions are July activities of Craig's Bowling, Inc., which operate several centers (for game and equipment sales).
A. Bennett’s provided to customers bowling merchandise inventory costing Bennett’s $5,790. [Consider only the effect on cost of goods sold [expense] here. Do not consider sales revenue for this question.]
B. Bennett’s paid $3,600 on the electricity bill for June (recorded as an expense in June).
C. Bennett’s paid $3,400 to employees for work in July.
D. Bennett’s purchased $2,400 in insurance for coverage from August 1 to November 1.
E. Bennett’s paid $1,500 to plumbers for repairing a broken pipe in the restrooms.
F. Bennett’s received the July electricity bill for $3,500 to be paid in August.
If expense is not recognized in July, choose none for the account and enter $0 for the amount. If expense is to be recognized in July, indicate the revenue account title and amount.

Skysong, Inc. incurred the following costs while manufacturing its product.
Materials used in product $124,000 Advertising expense $48,600
Depreciation on plant 67,300 Property taxes on plant 18,700
Property taxes on store 7,960 Delivery expense 30,900
Labor costs of assembly-
line workers 119,500 Sales commissions 37,900
Factory supplies used 26,500 Salaries paid to sales
clerks 60,600
Work in process inventory was $13,000 at January 1 and $17,100 at December 31. Finished goods inventory was $69,400 at January 1 and $48,200 at December 31.
1. Compute cost of goods manufactured.
2. Compute cost of goods sold.

You are going to invest in a stock mutual fund with a front-end load of 6.5 percent and an expense ratio of 1.37 percent. You also can invest in a money market mutual fund with a return of 2.7 percent and an expense ratio of 0.20 percent. If you plan to keep your investment for 2 years, what annual return must the stock mutual fund earn to exceed an investment in the money market fund? What if your investment horizon is 8 years?

The comparative statements of Simpson Company are shown below.
SIMPSON COMPANY
Income Statements
For the Years Ended December 31
2020 2019
Net sales $780,000 $624,000
Cost of goods sold 440,000 405,600
Gross profit 340,000 218,400
Selling and administrative
expenses 176,880 149,760
Income from operations 163,120 68,640
Other expenses and losses
Interest expense 9,920 7,200
Income before income taxes 153,200 61,440
Income tax expense 34,000 14,000
Net income $119,200 $47,440
Liabilities and Stockholders’ Equity
Current liabilities
Accounts payable $138,200 $132,000
Income taxes payable 25,300 24,000
Total current liabilities 163,500 156,000
Bonds payable 132,000 120,000
Total liabilities 295,500 276,000
Stockholders’ equity
Common stock ($10 par) 150,000 130,000
Retained earnings 330,300 246,000
Total stockholders’ equity 480,300 376,000
Total liabilities and stockholders’
equity $775,800 $652,000
All sales were on account. Net cash provided by operating activities was $108,000. Capital expenditures were $47,000, and cash dividends were $30,900.
Instructions:
Compute the following ratios for 2019:
A) Earnings per share.
B) Return on common stockholders’ equity.
C) Return on assets. .
D) Current ratio.
E) Accounts receivable turnover.
F) Average collection period.
G) Inventory turnover.
H) Days in inventory
I) Times interest earned
J) Asset turnover
K) Debt to asset ratio
L) Current cash debt coverage
M) Cash debt coverage
N) Free cash flow

Total Per Unit Sales $ 624,000 $ 40 Variable expenses 436,800 28 Contribution margin 187,200 $ 12 Fixed expenses 152,400 Net operating income $ 34,800 Required: 1. What is the monthly break-even point in unit sales and in dollar sales? 2. Without resorting to computations, what is the total contribution margin at the break-even point? 3-a. How many units would have to be sold each month to attain a target profit of $56,400? 3-b. Verify your answer by preparing a contribution format income statement at the target sales level. 4. Refer to the original data. Compute the company's margin of safety in both dollar and percentage terms. 5. What is the company’s CM ratio? If the company can sell more units thereby increasing sales by $94,000 per month and there is no change in fixed expenses, by how much would you expect monthly net operating income to increase?

Activity-Based Costing for a Service Business Sterling Hotel uses activity-based costing to determine the cost of servicing customers. There are three activity pools: guest check-in, room cleaning, and meal service. The activity rates associated with each activity pool are $8.20 per guest check-in, $23.00 per room cleaning, and $5.00 per served meal (not including food). Janelle Campbell visited the hotel for a 5-night stay. Janelle had 8 meals in the hotel during the visit. Determine the total activity-based cost for Campbell's visit during the month. Round your answer to the nearest cent. $

Tri Fecta, a partnership, had revenues of $378,000 in its first year of operations. The partnership has not collected on $47,000 of its sales and still owes $38,700 on $235,000 of merchandise it purchased. There was no inventory on hand at the end of the year. The partnership paid $28,100 in salaries. The partners invested $47,000 in the business and $26,000 was borrowed on a five-year note. The partnership paid $2,600 in interest that was the amount owed for the year and paid $8,900 for a two-year insurance policy on the first day of business. Ignore income taxes. Compute the cash balance at the end of the first year for Tri Fecta.
a) $332,110.b) $161,640.c) $166,290.d) $155,440.

Clipper Company sells two types of nail clippers. One focuses on the economy oriented customer and the other aims to satisfy the high-end clientele. The economy clipper cost $3 and has a sales price of $5. The high-end model costs $9 and sales for $12. Fixed costs associated with this product line amount to $35,880. Economy clippers constitute 70 percent of the market with the remaining 30 percent being high-end clippers. Based on this information what is the weighted average contribution margin

Mrs. Jonas believes strongly that it is important that workers' rights be respected, and that one of the more important ways of doing this is to ensure that all workers be properly documented. She is supervising a contracting company that is building a new warehouse for her company. While doing this she discovers that many of the workers employed by the contractor are undocumented aliens working for well below minimum wage. Mrs. Jonas can be expected to relieve the discomfort she is experiencing by doing the following except ________. terminating the contract as it is against her attitude deciding this issue is unimportant attempting to stop the contractor using undocumented workers rationalizing that it is not her problem since she is not the contractor coming to accept that using undocumented workers does not harm workers' rights

Which of the following is a correct application of Marginal Analysis? a. You buying 4 pairs of shoes for $240 because you are willing to buy the first pair for $60. b. You buying a fourth pair of shoes for $60 because you are willing to buy the first pair for $60. c. All of these are correct applications of Marginal Analysis. d. You deciding not to buy a fourth pair of shoes for $60 because you only value an additional pair at $50.

An incomplete cost of goods manufactured schedule is presented below. Complete the cost of goods manufactured schedule for Vaughn Company.
VAUGHN COMPANY
Cost of Goods Manufactured Schedule
Work in process (1/1) $220,940
Direct materials
Raw materials inventory (1/1) $
Add: Raw materials purchases 159,120
Total raw materials available for use
Less: Raw materials inventory (12/31) 22,610
Direct materials used $188,420
Direct labor
Manufacturing overhead
Indirect labor 25,620
Factory depreciation 37,200
Factory utilities 76,500
Total overhead 139,320
Total manufacturing costs
Total cost of work in process
Less: Work in process (12/31) 83,230
Cost of goods manufactured $544,240

Selected transaction data of a business for September are summarized below. Determine the following amounts for September: (a) total revenue, (b) total expenses, (c) net income.
Service sales charged to customers on account during September exist33,000
Cash received from cash customers for services performed in September 28,000
Cash received from customers on account during September:
Services performed and charged to customers prior to September 13,000
Services performed and charged to customers during September 18,000
Expenses incurred prior to September and paid during September 6, 500
Expenses incurred and paid in September 36, 250
Expenses incurred in September but not paid in September 5,000
Expenses for supplies used and insurance (not included above) applicable to 2,000 September

Problem 13-3 Output from a process contains 0.02 proportion of defective units. Defective units that go undetected into final assemblies cost $25 each to replace. An inspection process, which would detect and remove all defectives, can be established to test these units. The inspector, who can test 20 units per hour (which matches the current production rate), would be paid $8 per hour, including fringe benefits. Assume that the line will operate at the same rate (i.e., the current production rate) regardless of whether or not the inspection operation is added. a-1. Without the inspector, what is the current hourly cost of defects

You have just sold your house for 1100000 in cash. Your mortgage was originally a​ 30-year mortgage with monthly payments and an initial balance of 800000. The mortgage is currently exactly​ 18½ years​ old, and you have just made a payment. If the interest rate on the mortgage is ​(APR), how much cash will you have from the sale once you pay off the​ mortgage? ​(Note: Be careful not to round any intermediate steps less than six decimal​ places.) Cash that remains after payoff of mortgage is

Issued $25,000 of QCI stock for cash. Incurred $600 of utilities costs this month and will pay them next month. Incurred and paid wages for the current month, totaling $2,000. Performed cleaning services on account worth $2,800. Some of Quick Cleaners’s equipment was repaired at a total cost of $150. The company paid the full amount at the time the repair work was done. Required: Prepare journal entries for the above transactions, which occurred during a recent month. Determine QCI’s preliminary net income.

Required information {The following information applies to the questions displayed below. At the beginning of Year 2, the Redd Company had the following balances in its accounts:
Cash $8,200
Inventory 2,200
Common stock 7, 700
Retained earnings 2,700
During Year 2, the company experienced the following events:
1. Purchased inventory that cost $5,700 on account from Ross Company under terms 2/10, n/30. The merchandise was delivered FOB shipping point. Freight costs of $520 were paid in cash.
2. Returned $350 of the inventory that it had purchased because the inventory was damaged in transit. The seller agreed to pay the return freight cost.
3. Paid the amount due on its account payable to Ross Company within the cash discount period.
4. Sold inventory that had cost $6,200 for $9,200 on account, under terms 2/10, n/45.
5. Received merchandise returned from a customer. The merchandise originally cost $520 and was sold to the customer for $820 cash. The customer was paid $820 cash for the returned merchandise.
6. Delivered goods FOB destination in Event 4. Freight costs of $620 were paid in cash.
7. Collected the amount due on the account receivable within the discount period.
8. Took a physical count indicating that $1,900 of inventory was on hand at the end of the accounting period.
Required
a. Identify these events as asset source (AS), asset use (AU), asset exchange (AE), or claims exchange (CE) (Select "NA" if there is no effect on the "Classification".) Classification Event 1a. (Purchase inventory). 16. (Shipping cost) 4a. (Recording revenue). 4b. (Recording cost of goods sold) 5a.(Reversing revenue) 46. (Reversing cost of goods sold). 6.
b. Record each event in a statements model like the following one. In the Cash Flow column, use OA to designate operating activity, IA for investment activity, FA for financing activity, and NC for net change in cash. The first event is recorded as an example. (Enter any decreases to account balances and cash outflows with a minus sign.

Industries manufactures​ custom-designed playground equipment for schools and city parks. Outdoor expected to incur $707,200 of manufacturing overhead​ cost, 41,600 of direct labor​ hours, and $1,414,400 of direct labor cost during the year​ (the cost of direct labor is ​$34 per​ hour). The company allocates manufacturing overhead on the basis of direct labor hours. During December​, Outdoor completed Job 307. The job used 155 direct labor hours and required $15,100 of direct materials. The City of Adams has contracted to purchase the playground equipment at a price of 26% over manufacturing cost.
Requirement
1. Calculate the manufacturing cost of Job 302.
First identify the formula, then calculate the predetermined overhead rate.
Estimated yearly overhead costs Estimated yearly direct labor hours Predetermined overhead rate 627,000 41,800 15 per hour
2. Calculate the manufacturing cost of Job 302.
Direct materials
Direct labor
Manufacturing overhead 14,500
Total job cost

Koebel Corp uses a job order costing system with manufacturing overhead applied to products on the basis of direct labor hours. For the upcoming year, Koebel Corp estimated total manufacturing overhead cost at $921,600 and total direct labor hours of 51,200. Koebel Corp started the year with no beginning balances in either Work in Process Inventory or Finished Goods Inventory. During the year actual manufacturing overhead incurred was $902,900 and 48,900 direct labor hours were used.
(a) Calculate the predetermined overhead rate Overhead Rate per hour
(b) Calculate how much manufacturing overhead will be applied to production
(c) Is overhead over- or underapplied? By how much? (Input the amount as positive value.)
(d) What account should be adjusted for over-or underapplied overhead? Should the balance be increased or decreased?

Imagine there are two series of science-fictions: The Three-Body Problem (T) and Galactic Empires (G). Your utility function is U = TG, where T is the number of books you consume for The Three-Body Problem, and G is the number of books you consume for Galactic Empires. If your budget is $200, the price of each book of The Three-Body Problem (T) is $50, and the price of each book of Galactic Empires (G) is $100, how many books of The Three-Body Problem (T) will you consume?

What Are the Differences Between Depository and Non-Depository Institutions? The financial services industry in the United States has undergone major changes over the years. For many years, it consisted of two major types of business organizations: depository institutions and non-depository institutions. However, today this distinction has become much less clear-cut. Now, both groups of institutions may offer many of the same financial products and financial services
How do depository institutions differ from non-depository institutions?
Depository institutions are required to ______ and _______ although the general terms used to describe these financial products may vary across the various types of institutions. Non-depository institutions, in contrast, accept cash contributions from their customers, but the cash inflows are not called ________ instead, they're called shares or premiums.
Depository institutions include:_______.
1. Commercial banks, savings banks, savings and loan associations (thrifts), and credit unions
2. Mutual funds, insurance companies, brokerage firms, and financial services companies

For each separate case, record an adjusting entry (if necessary). Barga Company purchases $32,000 of equipment on January 1. The equipment is expected to last five years and be worth $4,400 at the end of that time. Welch Company purchases $11,200 of land on January 1. The land is expected to last forever. Prepare the entries to record one year’s depreciation expense of $5,520 for the equipment and what depreciation adjustment, if any, should be made with respect to the Land account as of December 31? (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

Larry Nelson holds 1,000 shares of General Electric common stock. As a shareholder, he has the right to be involved in the election of its directors. These directors are responsible for managing the company and achieving the company’s objectives. True or False: The preemptive right allows Larry to purchase any additional shares sold by the company. This right will protect Larry from dilution in the value of the shares he holds.

Jason West, owner of the XL Cleaning, LLC, began his business in 2012. Jason's primary focus had been on cleaning offices for large corporations, but in recent months, Jason has seen a decline in demand for cleaning services. Surprisingly, the competitive environment appears relatively stable with no new major competitors. As Jason thought about his situation, he realized that he needed to better understand how customers assess service quality and what they were looking for in a superior cleaning service. Jason developed a detailed research plan. First, he gathered his competitors' information -- primarily through brochures, browsing their websites, as well as making some phone calls -- to fund out exactly what the competition offered as part of their cleaning services. In addition, Jason obtained an updated list of 423 local companies and their addresses from the Chamber of Commerce in his area. Although this list contains 423 local company names, Jason has decided to survey 100 of them. Jason gathered information about the competing firms from brochures, phone calls, and the Internet. Obtaining this type of information is an example of ________

A series of formal, written statements in which the plaintiff and defendant both state claims for the defense regarding the matter being disputed is which
of the following?
O Appeal
O Pleading
O Breach
O Trial

Suppose the following are data for a given year from the annual Economic Report of the President. Calculate GDP using the Expenditure approach. Amount Corporate profits $ 305 Capital consumption allowance 479 Gross private domestic investment 716 Personal taxes 565 Personal saving 120 Government purchases 924 Imports 547 Net Interest 179 Rental Income 19 Exports 427 Personal consumption expenditures 2,966 Dividends 87 Indirect business taxes 370 Contributions for Social Security (FICA) 394 Transfer payments 543

Fortune magazine ran an article titled "New Ethics or No Ethics? Questionable Behavior Is Silicon Valley's Next Big Thing," which recounts stories of Internet companies that aggressively inflate their revenues, delay the recognition of expenses, and report sales that are not exactly sales. In many cases, the actions of these companies, while aggressive, are not in direct violation of generally accepted accounting principles. Discuss why companies might engage in such behavior and comment on the ethical implications.

For a given market, suppose that the quantity demanded is 240 units if the price is $20 and the quantity demanded is 275 units if the price is $16. In addition, the quantity supplied is 240 units if the price is $20 and the quantity supplied is 200 units if the price is $16. If the actual price in the market is $16 then a shortage of 75 units would exist and price would rise.
a. Trueb. False

Brett has almond​ orchards, but he is sick of almonds and prefers to eat walnuts instead. The owner of the walnut orchard next door has offered to swap this​ year's crop with him. Assume he produces tons of almonds and his neighbor produces tons of walnuts. If the market price of almonds is per ton and the market price of walnuts is per​ ton: a. Should he make the​ exchange? b. Does it matter whether he prefers almonds or​ walnuts? Why or why​ not?