Answer:
$115,000
Explanation:
Ending assets= assets at the start of the year + revenue - dividend
Asset at the start of the year= $111,000
Revenue= $5,900
Dividend= $1,900
Therefore the amount of Golden assets at the end of the year can be calculated as follows
= $111,000 + $5,900-$1,900
= $116,900-$1,900
= $115,000
Hence the amount of Golden assets at the end of the year is $115,000
You can buy a car that is advertised for $24,600 on the following terms: (a) pay $24,600 and receive a $4,600 rebate from the manufacturer; (b) pay $410 a month for 5 years for total payments of $24,600, implying zero percent financing. a. Calculate the present value of the payments for option (a) if the interest rate is 1.25% per month. b. Calculate the present value of the payments for option (b) if the interest rate is 1.25% per month. (Do not round intermediate calculations. Round your answer to 2 decimal places.) c. Which is the better deal? Option a Option b
Answer:
A. $20,000
B. $17,234.18
C.Option (b)
Explanation:
Obviously, the option with lower Present Value would be the best option to buy the car. The Present Value of the options can find out as following
REQUIREMENT A
Price of car = $24,600
Rebate = $4,600
Present value of the payments for option = Price of the car – rebate
Present value of the payments for option (a) = $24,600 - $4,600
Present value of the payments for option = $20,000
REQUIREMENT B
We can use the following Present Value of an Annuity formula to calculate the present value of the payments
PV of the payments for option = PMT * [1-(1+i) ^-n)]/i
PV of the payments for option (b) (PV) =?
Monthly payment PMT =$410 per month
Number of payments n = 5 years *12 months = 60
Monthly interest rate i=1.25% per month or 0.0125
PV of the payments for option = $410 x [1- (1+0.0125) ^-60]/0.0125
PV of the payments for option = $17,234.18
REQUIREMENT C.
Which is the better deal?
Option (b) is better deal as the present value of payments ($17,234.18) is less than Present value of the payments for option (a); $20,000.
Ryan exchanged a car that he used in his business for the past 3 years for a new truck with a FMV of $25,000. This transaction took place at the end of the year. The adjusted basis of the car was $8,000 at the beginning of the year of disposition. Ryan paid $4,000 cash and assumed a note payable of $10,000 to be paid in $2,000 increments over the next 5 years. Ryan’s depreciation on the car for the year of disposition was $2,500. What is the gain (loss) recognized on the transaction?
Answer:
The gain on the transaction is $5,500
Explanation:
Gain on Transaction = Fair Value of Truck - Cash Paid - Note Payable - carrying value of car exchanged
= $25,000 - $4,000 - $10,000 - ( $8,000 - $2,500)
= $25,000 - $4,000 - $10,000 - $5,500
= $5,500 Gain
Kimberly Young started her own consulting firm, Young Consulting Inc., on May 1, 2022. The following transactions occurred during the month of May. May 1 Stockholders invested $18,900 cash in the business in exchange for common stock. 2 Paid $756 for office rent for the month. 3 Purchased $630 of supplies on account. 5 Paid $189 to advertise for the month in the County News. 9 Performed services for customer for $1,764 cash. 12 Paid $252 cash dividend. 15 Performed $5,292 of services on account. 17 Paid $3,150 for employee salaries. 20 Paid for the supplies purchased on account on May 3. 23 Received a cash payment of $1,512 for services performed on account on May 15. 26 Borrowed $6,300 from the bank on a note payable. 29 Purchased office equipment for $2,520 paying $252 in cash and the balance on account. 30 Paid $236 for utilities.
Show the effects of the above transactions on the accounting equation using the following format. Assume the note payable is to be repaid within the year. Include margin explanations for any changes in revenues or expenses. (If a transaction results in a decrease in Assets, Liabilities or Stockholders' Equity, place a negative sign (or parentheses) in front of the amount entered for the particular Asset, Liability or Equity item that was reduced.)
Answer:
I used an excel spreadsheet to answer this question.
Hawk Corporation purchased 1,000 Diamond Corporation bonds in 2015 for $500 per bond and classified the investment as securities available for sale. The value of the Diamond investment was $600 per bond on December 31, 2016, and $650 on December 31, 2017. During 2018, Hawk sold all of its Diamond investment at $700 per bond.If Hawk records unrealized holding gains and losses up to the moment of sale, what would be the amount of reclassification adjustment that Hawk would record upon sale?A) A debit of $50,000.B) A debit of $150,000.C) A debit of $200,000.D) A credit of $150,000.
Answer: C) A debit of $200,000.
Explanation:
In 2018, Hawk sold all the Diamond Investment bonds at $700.
The amount of reclassification adjustment would be;
= Sales price - original purchase price
= (1,000 * 700) - (1,000 * 500)
= $200,000
The amount should be debited to reverse the gains recorded over the other years.
Corporate headquarters building lease $ 77,000 Cosmetics Department sales commissions--Northridge Store $ 4,000 Corporate legal office salaries $ 59,000 Store manager's salary-Northridge Store $ 11,000 Heating-Northridge Store $ 10,000 Cosmetics Department cost of sales--Northridge Store $ 37,000 Central warehouse lease cost $ 16,000 Store security-Northridge Store $ 12,000 Cosmetics Department manager's salary--Northridge Store $ 4,000 The Northridge Store is just one of many stores owned and operated by the company. The Cosmetics Department is one of many departments at the Northridge Store. The central warehouse serves all of the company's stores. What is the total amount of the costs listed above that are direct costs of the Cosmetics Department?
Answer: $45,000
Explanation:
Direct costs are those that can be traced and attributed to the product being sold or manufactured by the company. They usually include direct labor and direct materials.
As this is a Cosmetics department, the direct labor will be the Department's manager's salary and the Sales commissions.
The Cost of sales will also be a direct cost as they were incurred to sell the product.
Direct Costs = Cosmetics Department manager's salary + Cosmetics Department sales commissions + Cosmetics Department cost of sales
= 4,000 + 4,000 + 37,000
= $45,000
Gitano Products operates a job-order costing system and applies overhead cost to jobs on the basis of direct materials used in production (not on the basis of raw materials purchased). Its predetermined overhead rate was based on a cost formula that estimated $123,200 of manufacturing overhead for an estimated allocation base of $88,000 direct material dollars to be used in production. The company has provided the following data for the just completed year:
Purchase of raw materials $130,000
Direct labor cost $84,000
Manufacturing overhead costs:
Indirect labor $110,500
Property taxes $8,100
Depreciation of equipment $19,000
Maintenance $15,000
Insurance $9,400
Rent, building $33,000
Beginning Ending
Raw Materials $21,000 $15,000
Work in Process $46,000 $36,000
Finished Goods $75,000 $58,000
Required:
1-a. Compute the predetermined overhead rate for the year.
1-b. Compute the amount of underapplied or overapplied overhead for the year.
2. Prepare a schedule of cost of goods manufactured for the year. Assume all raw materials are used in production as direct materials.
3-a. Compute the unadjusted cost of goods sold for the year. (Do not include any underapplied or overapplied overhead in your cost of goods sold figure.)
3-b. Identify the options available for disposing of underapplied or overapplied overhead? (Select all that apply.)
4. Job 215 was started and completed during the year. What price would have been charged to the customer if the job required $3,600 in direct materials and $4,600 in direct labor cost and the company priced its jobs at 55% above the job’s cost according to the accounting system?
Answer:
1-a. Predetermined overhead rate for the year.= 1.4
1-b. The underapplied overhead for the year$ 4,600
2. Cost of goods manufactured $ 425,000
3-a.Un adjusted Cost of Goods Sold $ 442,000
3-b. Underapplied or Overapplied overhead Treatment
1) Underapplied overhead may be closed to Cost og goods Sold.
2) It can be separately allocated to WIP , FG and CGS in the proportion of OH applied.
4. Job 215 Price Estimated 155% of $ 13240= $ 20,522
Explanation:1-a. Predetermined overhead rate for the year.
Total Overhead / Direct Material Cost= $123,200 /$88,000= 1.4
1-b. The underapplied or overapplied overhead for the year
Applied OH=Actual Direct Material Cost* Predetermine Rate = $136,000* 1.4= $ 190400
Actual Overhead = $ 195,000
Underapplied Overhead = $ 195,000-$ 190400=$ 4,600
Gitano Products
Cost of goods manufactured Schedule
Raw Materials Beginning $21,000
Add Purchase of raw materials $130,000
Less Raw Materials Ending $15,000
Direct Materials Used $ 136,000
Direct labor cost $84,000
Manufacturing overhead costs: 195,000
Indirect labor $110,500
Property taxes $8,100
Depreciation of equipment $19,000
Maintenance $15,000
Insurance $9,400
Rent, building $33,000
Total Manufacturing Costs $ 415,000
Add Work in Process Beginning $46,000
Cost of goods available for manufacture $ 461,000
Less Work in Process Ending $36,000
Cost of goods manufactured $ 425,000
3-a. Unadjusted cost of goods sold for the year
Cost of goods manufactured $ 425,000
Add Finished Goods Beginning $75,000
Cost of Goods Available for Sale $500,000
Less Finished Goods Ending $58,000
Un adjusted Cost of Goods Sold $ 442,000
3-b. Underapplied or Overapplied overhead Treatment
1) Underapplied overhead may be closed to Cost og goods Sold.
2) It can be separately allocated to WIP , FG and CGS in the proportion of OH applied.
4. Job 215 price
Direct Materials $3,600
Direct Labor $4,600
Applied Overhead ( 1.4 * 3600) = $ 5040
Total Manufacturing Cost = $ 13240
Price Estimated 155% of $ 13240= $ 20,522
Acton Corporation, which applies manufacturing overhead on the basis of machine-hours, has provided the following data for its most recent year of operations. Estimated manufacturing overhead $361,260 Estimated machine-hours 2,700 Actual manufacturing overhead $354,700 Actual machine-hours 2,660 The estimates of the manufacturing overhead and of machine-hours were made at the beginning of the year for the purpose of computing the company's predetermined overhead rate for the year. The overhead for the year was: Noreen 4e Recheck 2017-16-03a) $5,352 underappliedb) $5,352 overappliedc) $1,208 underappliedd) $1,208 overapplied
Answer:
Acton Corporation
The overhead for the year was:
$1,208 overapplied
Explanation:
a) Data and Calculations:
Estimated manufacturing overhead $361,260
Estimated machine-hours 2,700
Predetermined overhead rate = $361,260/2,700 = $13.38
Actual manufacturing overhead $354,700
Actual machine-hours 2,660
Overhead applied = Actual machine hours * Predetermined overhead rate
= 2,660 * $13.38
= $355,908
Overapplied overhead = Overhead applied minus Actual overhead
= $355,908 - $354,700
= $1,208
Lewisburg Corporation had 12,000 units of beginning inventory in its Forming Department on July 1. The units were 100 percent complete with respect to direct materials requirements but only 40 percent complete with respect to conversion requirements. On July 31, the company had 9,000 units of inventory remaining in its Forming Department. These units were 100 percent complete with respect to their direct materials requirements but only 70 percent complete with respect to conversion. The Forming Department’s direct materials cost for July totaled $500,000, or $25 per equivalent unit consumed. Its conversion costs for July totaled $352,000, or $16 per equivalent unit. Determine how many units were started and completed in the Forming Department during July.
Answer:
the total number of units started and completed = 11,000 units
Explanation:
total materials costs incurred during the month = $500,000
if materials are added at the beginning of the process, beginning WIP already had 100% of materials costs added, therefore, materials costs were applied only to the total number of units started
total number of units started = $500,000 / $25 cost per EUP = 20,000 units
the total number of units started and completed = units started - ending WIP = 20,000 - 9,000 = 11,000 units
total number of units completed = beginning WIP + units started - ending WIP = 12,000 + 20,000 - 9,000 = 23,000 units
match the jobs with the academic requirements.
Answer:
lifegaurd- the first one
college facutly member- second one
chamber of commerce officer- third one
firefighter- the last one
Answer:
a. the training program and certification in cardiopulmonary resuscitation in first aid.
b. a bachelor's degree in business and experience.
c. a high school diploma and training
d. a Masters or doctoral program
Explanation:
Swifty Corporation is constructing a building. Construction began on January 1 and was completed on December 31. Expenditures were $6340000 on March 1, $5260000 on June 1, and $8950000 on December 31. Swifty Corporation borrowed $3200000 on January 1 on a 5-year, 14% note to help finance construction of the building. In addition, the company had outstanding all year a 12%, 3-year, $6380000 note payable and an 13%, 4-year, $12050000 note payable. What are the weighted-average accumulated expenditures
Answer:
The weighted-average accumulated expenditures is $7,913,333.
Explanation:
Note: See the attached excel file for the calculation of the the weighted-average accumulated expenditures.
Ryan Olson organized a new company, MeToo, Inc. The company provides networking management services on social network sites. You have been hired to record the following transactions.
a. May 1: Issued 1,050 shares of common stock to investors for $30 per share.
b. May 15: Borrowed $48,000 from the bank to provide additional funding to begin operations; the note is due in two years.
c. May 31: Paid $3,900 for a one-year fire insurance policy with coverage starting June 1.
TIP: For convenience, simply record the full amount of the payment as an asset (Prepaid Insurance).
At the end of June, this account will be adjusted to its proper balance.
d. June 3: Purchased furniture for the store for $31,800 on account. The amount is due within 30 days.
e. June 5: Placed advertisements in local college newspapers today for a total of $260 cash.
f. June 9: Provided services for $685 cash.
g. June 14: Made full payment for the furniture purchased on account on June 3.
Answer:
Ryan Olson
General Journal
a.
Cash $31,500 (debit)
Common Stock $31,500 (credit)
Received Cash in Exchange of Common Stock
b.
Cash $48,000 (debit)
Note Payable $48,000 (credit)
Received Cash from Bank Loan
c.
Prepaid Insurance $3,900 (debit)
Cash $3,900 (credit)
Paid Fire Insurance Policy in advance
d.
Furniture $31,800 (debit)
Account Payable $31,800 (credit)
Purchased Furniture on credit
e.
Advertising Expense $260(debit)
Cash $260 (credit)
Paid Advertising Expenses
f.
Cash $685 (debit)
Service Revenue $685 (credit)
Received Cash from Service Rendered
g.
Account Payable $31,800 (debit)
Cash $31,800 (credit)
Made Payment to Furniture Supplier
Explanation:
See the Journal Entries and Narrations that prepared above.
Whirly Corporation’s contribution format income statement for the most recent month is shown below: Total Per Unit Sales (7,400 units) $ 251,600 $ 34.00 Variable expenses 140,600 19.00 Contribution margin 111,000 $ 15.00 Fixed expenses 55,100 Net operating income $ 55,900 Required: (Consider each case independently): 1. What would be the revised net operating income per month if the sales volume increases by 70 units? 2. What would be the revised net operating income per month if the sales volume decreases by 70 units? 3. What would be the revised net operating income per month if the sales volume is 6,400 units?
Answer:
Whirly Corporation
1. Revised net operating income per month if the sales volume increases by 70 units:
Whirly Corporation’s contribution format income statement for the most recent month is shown below:
Total Per Unit
Sales (7,470 units) $ 253,980 $ 34.00
Variable expenses 141,930 19.00
Contribution margin 112,050 $ 15.00
Fixed expenses 55,100
Net operating income $ 56,950
2. Revised net operating income per month if the sales volume decreases by 70 units:
Whirly Corporation’s contribution format income statement for the most recent month is shown below:
Total Per Unit
Sales (7,330 units) $ 249,220 $ 34.00
Variable expenses 139,270 19.00
Contribution margin 109,950 $ 15.00
Fixed expenses 55,100
Net operating income $ 54,850
3. Revised net operating income per month if the sales volume is 6,400 units:
Whirly Corporation’s contribution format income statement for the most recent month is shown below:
Total Per Unit
Sales (6,400 units) $ 217,600 $ 34.00
Variable expenses 121,600 19.00
Contribution margin 96,000 $ 15.00
Fixed expenses 55,100
Net operating income $ 40,900
Explanation:
a) Data and Calculations:
Whirly Corporation’s contribution format income statement for the most recent month is shown below:
Total Per Unit
Sales (7,400 units) $ 251,600 $ 34.00
Variable expenses 140,600 19.00
Contribution margin 111,000 $ 15.00
Fixed expenses 55,100
Net operating income $ 55,900
Thad, Jamarcus, and Willy have been working for Davidson International each for three years. While the trio started together as analysts and are all still on the same team, Jamarcus has recently been made a team lead, while Willy and Thad are still in their respective positions, although Willy did receive a small raise after his last performance evaluation. When Thad complained about not getting a raise, he was experiencing which attitude
Answer:
A) cognitive
Explanation:
Since in the question it is mentioned that three persons are working for DavidSon international. All three have in their positions in the company but Willy received a small raise after considering the evaluation of last performance
In case when Thad complained regarding the raise so he was experiencing a cognitive attitude that deals in belief, knowledge, thoughts of a particular person
hence, the correct option is A.
Crombie Inc. uses a job-order costing system in which any underapplied or overapplied overhead is closed out to cost of goods sold at the end of the month. The company has provided the following data for June:
Direct materials $44,250
Direct labor cost 76,750
Manufacturing overhead
cost incurred $69,500
Manufacturing overhead
cost applied $73,330
Inventories: Beginning Ending
Work in process $17,700 $27,160
Finished goods $67,680 $36,400
The unadjusted cost of goods sold (in other words, cost of goods sold before adjusting for any underapplied or overapplied overhead) for June is closest to:_____.
a. $216,150.
b. $212,320.
c. $194,330.
d. $184,870.
Answer:
COGS= $216,150
Explanation:
First, we need to calculate the cost of goods manufactured:
cost of goods manufactured= beginning WIP + direct materials + direct labor + allocated manufacturing overhead - Ending WIP
cost of goods manufactured= 17,700 + 44,250 + 76,750 + 73,330 - 27,160
cost of goods manufactured= $184,870
Now, we can determine the unadjusted cost of goods sold:
COGS= beginning finished inventory + cost of goods manufactured - ending finished inventory
COGS= 67,680 + 184,870 - 36,400
COGS= $216,150
The scenario approach to strategic planning involves:A. devising plans for coping with a number of different possible future states of the world.B. designing the best organizational structure and the best culture and control systems to put a chosen strategy into action.C. functional-level managers setting key corporate objectives.D. anticipating the reoccurrence of problems that were previously encountered and designing solutions accordingly.E. designing plans for problems that the company believes it will most certainly face in the near future.
Answer:
Option A: devising plans for coping with a number of different possible future states of the world.
Explanation:
strategic management process usually involves defining the mission and major goals of the organization.Scenario based planning is normally used for handling or coping with the problem of uncertainty.
Strategic Planning can simply be defined as means by which we find out the organization's long range, future goals that is to Determine what strategies are necessary to achieve specific objectives to survive and thrive.
"An individual is unique and does not speak for or represent anything other than themselves." This statement is an argument against ______.
a.
Gender
b.
Diversity
c.
Stereotypes
d.
Ethnicity
"An individual is unique and does not speak for or represent anything other than themselves." This statement is an argument against Stereotypes. Hence, option C is appropriate.
What is the meaning of Stereotypes?A stereotype is a generalized opinion about a specific group of people that are used in social psychology. People may have this expectation of every member of a given group.
Stereotypes are traits that society automatically ascribes to particular groups of people to categorize them according to factors like age, weight, occupation, skin tone, gender, etc. In sexual stereotyping, different and occasionally opposing sets of traits are assigned to males and girls.
The word stereotype is derived from the French adverb stéréotype and means "solid imprint on one or even more ideas/theories" from the Greek words (stereos), "firm, solid," and (typos), "impression." Social stereotypes are ideas that certain behaviors or attributes are typical of specific social groupings.
Hence, option C is Correct.
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6. The Center for Child Care reports on 539 children and the marital status of
their parents. There are 333 married, 182 divorced, and 24 widowed parents.
What is the probability a particular child chosen at random will have a parent
who is divorced? Which approach did you use?
Answer:
0.338
Explanation:
The probability of an event happening is between o and 1. A 1 guarantees the event will happen while 0 means it won't happen.
In this case, The total number of students is 539. One hundred eighty-two have divorced parents. The probability of getting a child with divorced parents is 182 in a population of 539.
It is represented as a decimal as below
=182/539
=0.33766
=0.338
Blue Corporation is a manufacturing company which has decided to introduce a new line of merchandise on January 25, 2019. The company has experienced significant revenue and earnings growth in recent years and anticipates future growth to decline slightly, yet remain consistent with the strong industry average (10-15% annual revenue growth). Blue has incurred certain patent costs and considerable attorney fees, in addition to survey costs, management studies, salaries, insurance, and quality inspections.
Given the three alternative methods for handling research and experimental expenditures, which method(s) would be most appropriate for Blue Corporation? Explain Why? How should Blue Corporation’s manufacturing expenditures be reported?
Answer:
Throughout the clarification category following the table, the definition of the concern is listed.
Explanation:
(1)
Quantitative surveys will now be the safest approach.
Questionnaire fees including patent fees become traceable as research spending, and progress is in estimates. This approach is used where a numerical production that helps to address analysis questions needs to be established. If one wants a concrete statistic to justify the study, it is a very effective market research tool.(2)
The cost incurred shall be recorded in compliance with IND AS 38 if because when the study, as well as surveys, are performed.
Recall that an exchange rate is the price of one currency in another. For example, it may take US $1.35 to buy 1 British Pound. Also recall the interest rates affect exchange rates. What do you predict will happen to the foreign exchange rate if interest rates in the United States increase more than in the UK? (In other words, which currency will become stronger?) How would such a change affect US exports to the UK? Would it be less expensive for an American tourist to take a vacation to London after the interest rate change? Be sure to clearly explain and justify your reasoning.
Answer:
Exchange Rate and Interest Rate
1. If interest rates in the United States increase more than in the UK, the exchange rate of the US dollars will increase relative to the UK pounds, thus causing the UK pounds to become stronger than the US dollars.
2. US exports to the UK would become cheaper in UK.
3. It would be more expensive for an American tourist to take a vacation to London after the interest rate change because they would need more money to handle the differences.
Explanation:
Generally, higher interest rates in an economy offer investors some higher returns when compared to other countries. These higher interest rates attract foreign capital and cause the exchange rate to rise. When this happens, the cost of goods and services in the country with the higher interest and exchange rates. The opposite becomes the case when the interest and exchange rates are lower relative to other countries.
If interest rates in the United States increase more than in the UK, the United states currency would become stronger or appreciate against the British Pound.
As a result of the increase in the value of the US currency, export to the UK would decline because export would become more expensive. It would be less expensive for American tourist to take a vacation to London.
Exchange rate is the rate at which one currency is exchanged for another currency.
If interest rates in the United States increase more than in the UK, there would be an increase in foreign investments in the US. As a result, the demand for the dollar would increase and this would lead to an appreciation of the dollar against the GBP.
As a result of the appreciation of the dollar, export goods to the UK becomes more expensive and imports to the US from the UK becomes cheaper.
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Indigo Corporation wants to transfer cash of $150,000 or property worth $150,000 to one of its shareholders, Linda, in a redemption transaction that will be treated as a qualifying stock redemption. If Indigo distributes property, the corporation will choose between two assets that are each worth $150,000 and are no longer needed in its business: Property A (basis of $75,000) and Property B (basis of $195,000). a. Compute Indigo's recognized gain or loss if it distributes Property A in redemption of Linda's shares.
Answer:
$75,000 recognised gain
Explanation:
Indigo corporation wants to transfer $150,000 in cash or property to one of its shareholders Linda
Property A has a basis of $75,000
Property B has a basis of $195,000
Therefore the recognized gain or loss of property A is distributed in redemption of Linda's share can be calculated as follows
= fair market value - basis
= $150,000-$75,000
= $75,000 recognised gain
Hence indigo's recognised gain if it distributes property A in redemption of Linda's share is $75,000
Prepare income statements based on variable costing for each of the 2 years. 2.Prepare income statements based on absorption costing for each of the 2 years. 3.Prepare a numerical reconciliation and explanation of the difference between operating income for each year under absorption costing and variable costing. 4.Critics have claimed that a widely used accounting system has led to undesirable buildups of inventory levels. (a) Is variable costing or absorption costing more likely to lead to such buildups? Why? (b) What can be done to counteract undesirable inventory buildups?
Answer:
The question is incomplete, it is missing the accounts and numbers, so I looked for a similar question:
The Rehe Comany sells its razors at $3 per unit. The company uses a first-in, first-out actual costing system. A fixed manufacturing cost rate is computed at the end of each year by dividing the actual fixed manufacturing costs by the actual production units. The following data are related to its first two years of operation:
2011 2012
Sales 1000 units 1200 units
Costs:
Variable manufacturing 700 500
Fixed manufacturing 700 700
Variable operating (marketing) 1000 1200
Fixed operating (marketing) 400 400
2011 2012
Sales 1000 units 1200 units
Production 1400 1000
Costs:
Variable manufacturing $700 $500
per unit $0.50
Fixed manufacturing $700 $700
Variable operating (marketing) $1000 $1200
Fixed operating (marketing) $400 $400
cogs under absorption costing 2011 = ($1,400 / 1,400) x 1,000 = $1,000
cogs under absorption costing 2012 = $400 + ($1,200 / 1,000) x 800 = $1,360
1. INCOME STATEMENTS
VARIABLE COSTING
2011 2012
Total sales revenue: $3,000 $3,600
Opening inventory: ($0) ($200)
Variable manufacturing: ($700) ($500)
Ending inventory: $200 $100
Gross contribution margin: $2,500 $3,000
Variable operating: ($1,000) ($1,200)
Contribution margin: $1,500 $1,800
Fixed manufacturing: ($700) ($700)
Fixed operating: ($400) ($400)
Net operating income: $400 $700
2. INCOME STATEMENTS
ABSORPTION COSTING
2011 2012
Total sales revenue: $3,000 $3,600
COGS: ($1,000) ($1,360)
Gross margin: $2,000 $2,240
Operating costs: ($1,400) ($1,600)
Net operating income: $600 $640
3. Under variable costing, closing inventory = 400 units x $0.50 (variable production costs per unit) = $200.
Under absorption costing, closing inventory = 400 units x $1 (production cost per unit) = $400
Since closing inventory is $200 higher under absorption costing, then net operating income during 2011 increases by $200.
4. a) Variable costing is more likely to result in inventory buildups. Since variable costing determines the value of closing inventory only using variable manufacturing costs, their value is much lower. E.g. in this case the value of closing inventory 2011 under variable costing is $200, while under absorption costing it is $400. This means that less costs are transferred from one year to another.
b) Cost of goods sold must include all production costs (both variable and fixed). This way COGS costs cannot be over estimated during one year and under estimated the next.
Hero Manufacturing has 6 million shares of common stock outstanding. The current share price is $85 and the book value per share is $8. The company also has two bond issues outstanding, both with semiannual coupons. The first bond issue has a face value $65 million and a coupon of 8 percent and sells for 95 percent of par. The second issue has a face value of $40 million and a coupon of 9 percent and sells for 108 percent of par. The first issue matures in 23 years, the second in 5 years. a. What are the company's capital structure weights on a book value basis? (Do not round intermediate calculations and round your answers to 4 decimal places, e.g., .1616.) b. What are the company's capital structure weights on a market value basis? (Do not round intermediate calculations and round your answers to 4 decimal places, e.g., .1616.) c. Which are more relevant? Market value weights Book value weights
Answer:
1. Book value of equity
6 million x 8 = 48million
Book value of debt = 65 + 40 = 105 million
Total value = 105 + 48 = 153 million
Weight of equity = 48/153 = 0.3137
Weight of debt = 105/153 = 0.6863
2. Market value
= 6 million x 85 = 510million
= Market value of debt = (65m * 0.95) + (40m * 1.08)
= 61.75m + 43.2m
= 104.95million
Total value = 104.95 + 510 = 614.95million
Weight of equity on market value = 510/614.95 = 0.8293
Weight of debt on market value = 104.95/614.95 = 0.1707
3. Market value of weights are more relevant
Zander Inc. uses a job-order costing system in which any underapplied or overapplied overhead is closed to cost of goods sold at the end of the month. In July the company completed job F21X that consisted of 28,350 units of one of the company's standard products. No other jobs were in process during the month. The job cost sheet for job F21X shows the following costs: Beginning balance $79,380 Direct materials $895,860 Direct labor cost $309,015 Manufacturing overhead cost applied $518,805 During the month, the actual manufacturing overhead cost incurred was $513,135 and 18,900 completed units from job F21X were sold. No other products were sold during the month. The unadjusted cost of goods sold (in other words, the cost of goods sold BEFORE adjustment for any underapplied or overapplied overhead) for July is closest to:___________.
a) $1,202,040
b) $1,199,240
c) $1,723,680
d) $1,803,060
Answer:
COGS= $1,202,040
Explanation:
First, we need to calculate the manufacturing cost:
cost of goods manufactured= beginning WIP + direct materials + direct labor + allocated manufacturing overhead - Ending WIP
cost of goods manufactured= 79,380 + 895,860 + 309,015 + 518,805 - 0
cost of goods manufactured= $1,803,060
Now, the cost of goods sold:
COGS= (Total cost/total units)*units sold
COGS= (1,803,060/28,350)*18,900
COGS= $1,202,040
The Widner Company manufactures two products: Stainless Serving Spoons and Stainless Serving Forks. The costs and revenues are as follows: Spoons Forks Sales price $150 $88 Variable cost per unit 80 42Total demand for Spoons is 14,000 units and for Forks is 9,000 units. Machine time is a scarce resource. During the year, 54,000 machine hours are available. Spoons requires 5 machine hours per unit, while Forks requires 3 machine hours per unit. How many units of Spoons and Forks should Widner produce? Spoons Forks A. 14,000 0 B. 8,307 4,154 C. 10,800 0 D. 5,400 9,000 Option A Option C Option B Option D
Answer:
Option D. 5,400 9,000
Explanation:
The computation for the number of units produced is shown below:
But before that first determined the following calculations
Particulars Spoons Forks
Selling Price $150.00 $88.00
Less:
Variable cost per unit $80.00 $42.00
Contribution margin
per unit $70.00 $46.00
Machine hour per unit 5 3
Contribution margin
per machine hour $14.00 $15.33
As we can see that the contribution margin per machine hour of the fork is greater so it should be the first utilized
For 9,000 forks, total machine hours is
= 9,000 × 3
= 27,000
Now no of the spoons produced would be
= 27000 ÷ 5
= 5,400
Tyrell Co. entered into the following transactions involving short-term liabilities in 2016 and 2017.
2016:
Apr. 20: Purchased $39,500 of merchandise on credit from Locust, terms n/30. Tyrell uses the perpetual inventory system.
May 19: Replaced the April 20 account payable to Locust with a 90-day, $35,000 note bearing 7% annual interest along with paying $4,500 in cash.
July 8: Borrowed $69,000 cash from NBR Bank by signing a 120-day, 12% interest-bearing note with a face value of $69,000.
_ _ _ : Paid the amount due on the note to Locust at the maturity date.
_ _ _: Paid the amount due on the note to NBR Bank at the maturity date.
Nov. 28: Borrowed $24,000 cash from Fargo Bank by signing a 60-day, 6% interest-bearing note with a face value of $24,000.
Dec. 31: Recorded an adjusting entry for accrued interest on the note to Fargo Bank.
2017:
_ _ _: Paid the amount due on the note to Fargo Bank at the maturity date.
Required:
1) Determine the maturity date for each of the three notes described
Locust NBR Bank Fargo Bank
Maturity date May 19, 2016 July 8, 2016 Nov. 28, 2016
2) Keesha Co. borrows $170,000 cash on December 1, 2017, by signing a 90-day, 11% note with a face value of $170,000.
On what day does this note mature?(Assume that February has 28 days)
a) February 24, 2018
b) February 25, 2018
c) February 26, 2018
d) February 27, 2018
e) March 01, 2018
3) What is the amount of interest expense in 2017 and 2018 from this note? (Use 360 days a year)
Total through maturity Interest Expense 2017 Interest Expense 2018
Principal
Rate (%)
Time
Total Interest
4) Prepare journal entries to record a) Issuance of the note
b) accrual of interest at the end of 2017 and
c) payment of the note at maturity.
(Assume no reversing entries are made. Use 360 days a year.)
5) Prepare journal entries to record the following four separate issuances of stock.
a) A corporation issued 4,000 shares of $10 par value common stock for $48,000 cash.
b) A corporation issued 2,000 shares of no-par common stock to its promoters in exchange for their efforts, estimated to be worth $35,500. The stock has a $2 per share stated value.
c) A corporation issued 2,000 shares of no-par common stock to its promoters in exchange for their efforts, estimated to be worth $35,500. The stock has no stated value.
d) A corporation issued 1,000 shares of $75 par value preferred stock for $110,500 cash.
Answer:
Tyrell Co.
1. Determination of the maturity date for each of the three notes described:
Notes: Commencement Maturity Date
Locust May 19, 2016 - August 19, 2016
NBR Bank July 8, 2016 - November 2, 2016
Fargo Bank Nov. 28, 2016 - January 28, 2017
2. The note's maturity date = March 01, 2018
3. The amount of interest expense from this note:
Total through maturity = $4,675
Interest Expense 2017 Interest Expense 2018
Principal $170,000 $170,000
Rate (%) 11% 11%
Time 30 days 60 days
Total Interest $1,558.33 $3,116.67
4. Journal Entries to record:
a) Issuance of the notes
December 1, 2017:
Debit Cash Account $170,000
Credit Notes Payable $170,000
To record the issue of a 90-day note bearing 11% annual interest.
b) Accrual of interest at the end of 2017:
December 31:
Debit Interest Expense $1,558.33
Credit Interest Expense Payable $1,558.33
To accrue interest for the year 2017.
c) payment of the note at maturity:
March 1, 2018:
Debit Notes Payable $170,000
Debit Interest Expense Payable $1,558.33
Debit Interest Expense $3,116.67
Credit Cash Account $174,675
To record the payment of the note on maturity with interest.
5. Journal Entries:
a) Debit Cash Account $48,000
Credit Common Stock $40,000
Credit Paid-in Capital In Excess $8,000
To record the issuance of 4,000 shares of $10 for $48,000.
b) Debit Retained Earnings $4,000
Credit Common Stock $4,000
To record the issuance of 2,000 shares of no-par to promoters at a stated value of $2 per share.
c) Debit Retained Earnings $35,500
Credit Common Stock $35,500
To record the issuance of 2,000 shares worth $35,500.
d) Debit Cash Account $110,500
Credit Preferred Stock $75,000
Credit Paid-in Capital In Excess $35,500
To record the issuance of 1,000 shares of $75 par value for $110,500.
Explanation:
a) Calculation of interest:
2017: $170,000 * 11% * 30/360 = $1,558.33
2018: $170,000 * 11% * 60/360 = $3,116.67
b) Interest:
Total through maturity = $4,675
Interest Expense 2017 Interest Expense 2018
Principal $170,000 $170,000
Rate (%) 11% 11%
Time 30 days 60 days
Total Interest $1,558.33 $3,116.67
. What are the four supply factors of economic growth? Instructions: In order to receive full credit, you must make a selection for each option. For correct answer(s), click the box once to place a check mark. For incorrect answer(s), click the option twice to empty the box. The stock of capital goods unanswered The level of technology unanswered The quality and quantity of natural resources unanswered The quality and quantity of human resources unanswered The number of trading partners unanswered The type of government
Answer:
The stock of capital goods
The level of technology
The quality and quantity of natural resources
The quality and quantity of human resources
Explanation:
Economic growth is the rise in the amount of goods and services produced in an economy in a given period.
Economic growth is measured in terms of GDP
Answer:
The stock of capital goods
The level of technology
The quality and quantity of natural resources
The quality and quantity of human resources
Explanation:
Economic growth is the rise in the amount of goods and services produced in an economy in a given period.
Economic growth is measured in terms of GDP
Jerry, a partner with 30 percent capital and profits interest, received his Schedule K-1 from Plush Pillows, LP. At the beginning of the year, Jerry's tax basis in his partnership interest was $41,000. His current-year Schedule K-1 reported an ordinary loss of $6,000, long-term capital gain of $4,900, qualified dividends of $3,900, $2,400 of non-deductible expenses, a $29,000 cash contribution, and a reduction of $5,900 in his share of partnership debt. What is Jerry's adjusted basis in his partnership interest at the end of the year
Answer:
$64,500
Explanation:
The basis of a partnership interest is the money plus the adjusted basis of any property the partner contributed. In this case adjusted basis of jerry in his partnership can be calculated as follows
Adjusted basis of Jerry In his Partnership = Partnership interest - Ordinary Loss + Long term Capital gain + Dividend-Non Deductible Expenses + Cash Contribution - Share deduction
Adjusted basis of Jerry In his Partnership = $41,000 - $6,000 + $4,900 + $3,900 - $2,400 + $29,000 - $5,900
Adjusted basis of Jerry In his Partnership = $64,500
The Swiss Clock Shop manufactures clocks on a highly automated assembly line. Its costing system uses two cost categories, direct materials and conversion costs. Each product must pass through the Assembly Department and the Testing Department. Direct materials are added at the beginning of the production process. Conversion costs are allocated evenly throughout production. Swiss Clock Shop uses weighted-average costing. Data for the Assembly Department for June 20X5 are: Work in process, beginning inventory 250 units Direct materials (100% complete) Conversion costs (50% complete) Units started during June 800 units Work in process, ending inventory: 150 units Direct materials (100% complete) Conversion costs (75% complete) Costs for June 20X5: Work in process, beginning inventory: Direct materials $180,000 Conversion costs $270,000 Direct materials costs added during June $1,000,000 Conversion costs added during June $1,000,000 What are the equivalent units for direct materials and conversion costs, respectively, for June?
Answer and Explanation:
The computation of the equivalent units for direct material and conversion cost is shown below:
Physical units Direct Materials Conversion Cost
Beginning
Work in process
100% and 50% 250
Units Started 800
Total Units
Under process 1,050
Less : Ending
Work in process 150
Units Transferred
to TestingDepartment 900 900 900
Ending Work in process 150 150 112.50
(100% and 75%)
Equivalent units ofproduction 1,050 1,050 1,012.50
The calculation of the equivalent units for direct material and conversion cost is shown below:
Physical units Direct Materials Conversion Cost
Beginning
Work in process
100% and 50% 250
Units Started 800
Total Units
Under process 1,050
Less : Ending
Work in process 150
Units Transferred
to TestingDepartment 900 900 900
Ending Work in process 150 150 112.50
(100% and 75%)
Equivalent units ofproduction 1,050 1,050 1,012.50
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1. Jones files a lawsuit against BigMoney, LLC, a brokerage firm registered with the Securities and Exchange Commission. In the lawsuit the plaintiff alleges that BigMoney violated the Securities Exchange Act by engaging in fraudulent excessive trading. BigMoney files a motion to dismiss the lawsuit because Jones had signed an agreement with BigMoney consenting to the terms of the agreement which stated all disputes between the parties must be resolved through arbitration. Jones argues that because of the nature of BigMoney’s conduct she is entitled to file a lawsuit and the arbitration clause in the agreement should be nullified. Which party in this lawsuit is right and why?
Answer:
Jones is right in this lawsuit
Explanation:
Arbitration is the process by which disputes are settled between parties. When there is a disagreement between parties an arbitrator comes in to give a fair and unbiased view of the situation.
A solution that is agreed to by all parties is agreed upon to settle.
In this scenario where Jones is filing a lawsuit against BigMoney LLC for violating the Securities Exchange Act by engaging in fraudulent excessive trading, this is a violation of the law and not a dispute between parties.
So the arbitration clause is is not binding and the arbitration clause should be nullified.
The right party in this lawsuit is Jones because BigMoney is engaged in Excessive Trading and Churning.
What are Excessive Trading and Churning?Excessive Trading and Churning is a situation when a stockbroker excessively trades in a customer's account to earn more commissions. As it is unethical, illegal, and a violation of Securities and Exchange Commission rules, Jones is entitled to file the lawsuit instead of resolving the issue through arbitration.
The arbitration clause applies for business dispute resolution and not for seeking redress when an illegal act is committed by the stockbroker.
Thus, the right party in this lawsuit is Jones.
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Partial adjusted account balance data for Swifty Corporation at December 31, 2017, includes the following accounts: Retained Earnings $17,000, Dividends $5,500, Service Revenue $36,300, Salaries and Wages Expense $14,700, Insurance Expense $1,830, Rent Expense $3,810, Supplies Expense $1,410, and Depreciation Expense $800. The balance in Retained Earnings is the balance as of January 1. Prepare a retained earnings statement for the year assuming net income is $15,787.
Answer:
Swifty Corporation
Retained Earnings Statement for the year ended December 31, 2017:
Net Income $15,787
Retained Earnings, January 1, 2017 17,000
Less Dividends (5,500)
Retained Earnings, Dec. 31, 2017 $27,287
Explanation:
a) Data and Calculation:
Service Revenue $36,300
less expenses:
Salaries and Wages Expense $14,700
Insurance Expense 1,830
Rent Expense 3,810
Supplies Expense 1,410
Depreciation Expense 800
Total expenses $22,550
Net income is supposed to be $13,750 and not $15,787.
The Retained Earnings Statement is prepared with the given net income of $15,787. It shows the movement in earnings and distribution to stockholders.
