Answer:
The number of years is 28 years
Explanation:
The computation is shown below:
Gross domestic product × (1 + growth rate)^time = Increased Gross domestic product
$25 trillion × (1 + 0.05)^time = $100 trillion
(1 + 0.05)^time = 4 trillion
t = ln 4 ÷ ln 1.05
= 28 years
Hence, the number of years is 28 years
We simply applied the above formula so that the correct number of years could come
Which of the following statements about the below paraphrase is correct?
Paraphrase: After the training, fourteen students could tell the difference between viral and bacterial infections, while only two could not. This result was better than prior experiments (Gray 52).
a. The author's name is not cited.
b. Wording and sentence structure follow the source too closely.
c. The paraphrase skews the meaning intended by the author of the original document.
Answer:
B.
Explanation:
The original text of the given paraphrase is taken from an article written by Omar Gray found on page 52.
The statement which is correct about the given paraphrase is that the wordings and sentence structure is very much similar to the original text.
Paraphrasing means to summarize something in your own words, using different wordings.
But in the given case, the writer has used the wordings and sentence structures that resembles the original text, though the writer did rephrased wordings of the second sentence, yet first half of the sentence is not paraphrased.
Thus the correct answer is option B.
When Sony released the PlayStation 4, it was reported that Sony was taking a loss of $60 on every PS4. However, Sony expected to make this up with sales of PS subscriptions and increased royalties from video games. Use the interdependence principle to help explain this strategy.
The PS subscriptions allow PS4 owners to play their games online, receive new games monthly to download at no charge, and receive additional special discounts on other items. Therefore, the PS4 and PS subscriptions are _________ in consumption. Decreasing the price of the PS4 will the demand for PS subscriptions. Sony expects that revenue from recurring PS4 _________ will be larger than the loss in revenue from PS4 sales.
Answer: Complimentary; Increase
Explanation:
Therefore, the PS4 and PS subscriptions are complimentary in consumption. Decreasing the price of the PS4 will increase the demand for PS subscriptions. Sony expects that revenue from recurring PS4 will be larger than the loss in revenue from PS4 sales.
When goods are said to be complimentary it means that they are used along with each other. Like coffee and sugar. The PS4 and and the PS subscriptions are complimentary because owners of the PS4 use the PS subscriptions to play online.
By reducing the price of the PS4, more people will be able to buy it and then will have to make PS subscriptions so that they can play the PS4s thereby giving Sony revenue which might be higher than the amount they lost by reducing the PS4 price.
Using the worksheet you completed in Part 1, revise the given year end information with the following values and then answer the questions below:
Select year end company accounts and additional information:
Account Name Account Balance Account Name Account Balance
Supplies $13,500 Service revenue $146,200
Interest receivable 0 Interest revenue 0
Salaries payable 0 Supplies expense 0
Deferred revenue 8,100 Salaries expense 65,300
1. Supplies remaining at the end of the year. $ 5,100
2. Services remaining to be provided to customers who paid in advance. 2,500
3. Employees are owed additional salaries at the end of the year. 6,200
4. A note receivable was accepted on March 31. 6,600 Interest rate on note 8 %
Required: Prepare the adjusting journal entries based on the results of your revised spreadsheet.
Answer:
Adjusting Journal Entries:
1. Debit Supplies Expense $8,400
Credit Supplies $8,400
To adjust for supplies expenses for the year.
2. Debit Deferred Revenue $5,600
Credit Service Revenue $5,600
To adjust for services provided to customers.
3. Debit Salaries Expense $6,200
Credit Salaries Payable $6,200
To adjust for unpaid salaries at the end of the year.
4. Debit Interest Receivable $396
Credit Interest Revenue $396
To adjust for unreceived interest due for 9 months.
Explanation:
a) Data and Calculations:
Supplies = $13,500
Service revenue = $151,800 ($146,200 + 5,600)
Interest receivable = $396
Interest revenue = $396
Salaries payable = $6,200
Supplies expense = $8,400 ($13,500 - $5,100)
Deferred revenue = 2,500 ($8,100 - 5,600)
Salaries expense = 71,500 (65,300 + 6,200)
b) Interest Revenue is computed at 8% of $6,600 for 9 months only. This results to $396 ($6,600 * 8% * 9/12).
Wildhorse Co. entered into these transactions during May 2022, its first month of operations.
1. Stockholders invested $31,500 in the business in exchange for common stock of the company.
2. Purchased computers for office use for $33,800 from Ladd on account.
3. Paid $4,100 cash for May rent on storage space.
4. Performed computer services worth $18,600 on account.
5. Performed computer services for Wharton Construction Company for $6,400 cash.
6. Paid Western States Power Co. $8,000 cash for energy usage in May.
7. Paid Ladd for the computers purchased in (2).
8. Incurred advertising expense for May of $3,100 on account.
9. Received $11,000 cash from customers for contracts billed in (4).
Using the following tabular analysis, show the effect of each transaction on the accounting equation. Put explanations for changes to Stockholders' Equity in the far right column. (Ifa transaction causes a decrease in Assets, Liabilities or Stockholders' Fquity, place a negative sign (or parentheses) in front of the amount entered for the particular Asset, Liability or Fquity item that was reduced. See Illustration 3-3 for example.
Assets Liabilities + Cash + Accounts Receivable + Equipment + Accounts Payable Common Stock $ $ $+ Stockholders' Equity Common Stock Retained Earnings Revenues - Expenses
Answer:
Amounts that reduce the respective balances have a negative sign in front of them.
Using your accounting knowledge, fill in the blanks in the following separate income statements a through e. Identify any negative amount by putting it in parentheses. a b c d e Sales $62,000 $43,500 $ 46,000 $ ? $25,600 Cost of goods sold Merchandise inventory (beginning) 8,000 17,050 7,500 8,000 4,560 Total cost of merchandise purchases 38,000 ? ? 32,000 6,600 Merchandise inventory (ending) 11950 ? (3,000) (9,000) (6,600) ? Cost of goods sold 34,050 16,000 ? ? 7,000 Gross profit ?27950 ? 3,750 45,600 ? Expenses 10,000 10,650 12,150 3,600 6,000 Net income (loss) $ 17950? $16,850 $ (8,400) $42,000 $ ?
Answer:
1. d's Sales is $79,000
2. b's Total cost of merchandise purchases is $1,950
3. c's Total cost of merchandise purchases is $43,750
4. c's Cost of goods sold is $42,250
5. d's Cost of goods sold is $33,400
6. b's Gross profit is $27,500
Explanation:
Note: Kindly see the attached excel file which contains the calculations
In order to do the calculations, the following formulas are employed:
Gross profit = Sales - Cost of goods sold
Cost goods sold = Beginning merchandise inventory + Total cost of merchandise purchases - Ending merchandise inventory
Sales = Cost of goods sold + Gross profit
Total cost of merchandise purchases = Cost goods sold - Beginning merchandise inventory + Ending merchandise inventory
First, d's Sales is $79,000
Second, b's Total cost of merchandise purchases is $1,950
Third, c's Total cost of merchandise purchases is $43,750
Forth, c's Cost of product sold is $42,250
Fifth, d's Cost of product sold is $33,400
Sixth, b's Gross profit is $27,500
How to calculate gross profit?
Then Applying formulas are employed:
Now the Gross profit is = Sales - Cost of products sold
Then Cost goods sold = Beginning Merchandise inventory + Total cost of merchandise purchases - Ending Merchandise inventory
The formula is Cost of goods sold + Gross profit
Then Total cost of merchandise purchases = Cost products sold - Beginning merchandise inventory + Ending merchandise inventory
a b c d e
$ $ $ $ $
Sales 62000 43,500 46000 79000 25,600
Cost of goods sold
Merchandise inventory (beginning) 8,000 17,050 7,500 8,000 4,560
Total cost of merchandise purchases 38,000 1,950 43,750 32,000 6,600
Merchandise inventory (ending) (11,950) (3,000) (9,000) (6,600) (4,160)
Cost of goods sold 34,050 16,000 42,250 33,400 7,000
Gross profit 27,950 27,500 3,750 45,600 18,600
Expenses 10,000 10,650 12,150 3,600 6,000
Net income (loss) 17,950 16,850 (8,400) 42,000 12,600
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Which of the following is an example of a non-profit organization?
a. Home Depot
b. YMCA
c. Sports Authority
d. Kroger
Answer:
They, along with thousands of other nonprofits, receive regular donations of products from The Home Depot. Since 2008, The Home Depot and The Home Depot Foundation have worked with Good360 to distribute millions of dollars in product to nonprofit organizations that use the materials to help those in need.
A. Home Depot
Explanation:
Answer:
YMCA is a nonprofit organization
Theresa owes $9,000 on her car loan. If the value of her car is $15,000, what is her equity in the car?
Answer:
Theresa has $6,000 in equity.
Explanation:
To get this answer, you take the value of her car ($15,000) and subtract the amount that she owes from it ($15,000-$9,000). This gives you $6,000.
Hope this helps!
Her equity in the car is $6,000
Equity is the assets that a person or individual own.
Using this formula
Equity=Assets-Liability
Where:
Assets=$15,000
Liabilities=$9,000
Let plug in the formula
Equity=$15,000-$9,000
Equity=$6,000
Inconclusion Her equity in the car is $6,000
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During 2018, Mayfair Enterprises had the following securities outstanding: 1. 250,000 shares of common stock with an average market price of $25 per share. 2. 9.5% convertible preferred, which had been sold at its par value of $100. The preferred stock is convertible into three shares of common stock and 3,000 preferred shares are currently outstanding. During 2018, Mayfair Enterprises earned net income after income taxes of $3.2 million. Calculate the (a) basic earnings per share and (b) diluted earnings per share for Mayfair Enterprises for 2018.
Answer and Explanation:
The computation of the earning per share and the diluted per share is shown below:
But before that following calculations need to be computed
Preference dividend is
= 3,000 shares × $100 × 9.5%
= $28,500
a. Now the earning per share is
= (Net income - preference dividend) ÷ (number of weighted outstanding shares)
= ($3.2 million - $28,500) ÷ (250,000 shares)
= $12.69 per share
b. Now diluted per share is
= Earning after tax ÷ (number of weighted outstanding shares)
= $3.2 million ÷ (250,000 shares + 3,000 × 3)
= $12.36 per share
Company analysis. Given the financial data in the popup window, for Disney (DIS) and McDonald's (MCD), compare these two companies using the following financial ratios: debt ratio, current ratio, total asset turnover, financial leverage component (equity miltiplier), profit margin, and return on equity. Which company would you invest in, either as a bondholder or as a stockholder?
Disney McDonald's
Sales $48,719 $28,049
EBIT $12,291 $8,143
Net Income $7,523 $5,521
Current Assets $15,078 $5,019
Total Assets $84,121 $36,669
Current Liabilities $13,295 $3,066
Total Liabilities $39,228 $20,583
Equity $44,993 $16,058
Answer:
1. Debt ratio=Total liabilities/Total assets
Disney = 39,228/84,121 =0.466328
McDonald's=20583/36669 =0.561319
Based on this ratio, Disney is a better investment option because Disney is less leveraged than McDonald's which means it is has taken lesser risk than McDonald's.
2. Current ratio = Current assets/Current liabilities
Disney = 15078/13295 = 1.1341
McDonald's=5019/3066 =1.6369
Based on this ratio, McDonald's is a better investment option because of higher ratio, its ability to pay its current liabilities with its current assets is better than Disney.
3. Total asset turnover=Sales/total assets
Disney = 48719/84121 = 0.5791
McDonald's = 28049/36669 = 0.7649
Based on this ratio, McDonald's is a better investment option because of higher ratio, it shows that McDonald's is generating more revenues per dollar of assets which implies better performance.
4. Financial leverage= Total debt/total equity
Disney = 39228/44993 = 0.8718
McDonald's = 30583/16058 = 1.2817
Based on this ratio, Disney is a better investment ratio because McDonald's ratio is more than 1, which means it has more debt than equity and it shows higher burden on the company to repay principal and interest.
5. Profit margin= Net income/Sales
Disney= 7523/48718 = 0.1544
McDonald's= 5521/28049 = 0.1968
Based on this ratio, McDonald's is a better option as it has earner more income per dollar of sales, which means it is more profitable and is performing better
6. Return on equity= Net income/Equity
Disney= 7523/44993 = 0.1672
McDonald's= 5521/16058 = 0.3438
Based on this ratio, McDonald's is a better option as is it is providing higher return to its shareholders.
Final Conclusion: McDonald looks a better investment option for both a bond holder and a shareholder.
Molin Corporation is a manufacturer that uses job-order costing. The company closes out any overapplied or underapplied overhead to Cost of Goods Sold at the end of the year. The company has supplied the following data for the just completed year:
Estimated total manufacturing overhead at the beginning of the year Estimated direct labor-hours at the beginning of the year S638,750 35,000 direct labor-hours Results of operations: 40,000 direct labor-hours Actual direct labor-hours Manufacturing overhead: Indirect labor cost Other manufacturing overhead costs incurred $166,000 $595,000 $1,570,000 Cost of goods sold (unadjusted)
Required
a. What is the total amount of manufacturing overhead applied to production during the year?
b. Is manufacturing overhead overapplied or underapplied for the year? By how much?
c. What is the adjusted cost of goods sold for the year?
Answer:
A. 730,000
B. 31,000
C. 1,601,000
Explanation:
We can calculate the total amount of manufacturing overhead applied during the year by first calculating the predetermined overhead rate
DATA
Estimated Total Manufacturing overhead at the beginning of the year = 638,750
Estimated direct Labour hours at the beginning of the year = 35,000
Predetermined Overhead Rate = 638,750 /35,000
Predetermined Overhead Rate 18.25
Actual Direct Labour Hours = 40,000
Requirement A
Total Manufacturing Overhead applied = Predetermined Overhead Rate x Actual Direct Labour Hours
Total Manufacturing Overhead applied = 18.25 x 40,000
Total Manufacturing Overhead applied = 730,000
Requirement B
Actual Manufacturing Overhead (166000 + 595000) = 761,000
Over/Under applied = Actual Manufacturing Overhead - Total Manufacturing Overhead applied
Over/Under applied = 761,000 - 730,000
Manufacturing Overhead is underapplied = 31,000
Requirement C
Cost of Goods sold (adjusted) = Manufacturing Overhead is underapplied + Cost of Goods sold (unadjusted)
Cost of Goods sold (adjusted) = 31,000 + 1,570,000
Cost of Goods sold (adjusted) = 1,601,000
Engberg Company installs lawn sod in home yards. The company’s most recent monthly contribution format income statement follows: Amount Percent of Sales Sales $ 126,000 100 % Variable expenses 50,400 40 % Contribution margin 75,600 60 % Fixed expenses 23,000 Net operating income $ 52,600 Required: 1. What is the company’s degree of operating leverage? 2. Using the degree of operating leverage, estimate the impact on net operating income of a 27% increase in unit sales. 3. Construct a new contribution format income statement for the company assuming a 27% increase in unit sales.
Answer:
See answer below
Explanation:
1. Degree of operating leverage
Selling price $126,000
Variable cost $50,400
Contribution margin $75,600
Fixed cost $23,000
Net operating income $52,600
Degree of operating leverage = Contribution margin / operating income = $75,600 / $52,600
= 1.44
Comprehensive Ratio Analysis
Data for Lozano Chip Company and its industry averages follow.
Lozano Chip Company: Balance Sheet as of December 31, 2013 (Thousands of Dollars)
Cash $ 225,000 Accounts payable $601,866
Receivables 1,575,000 Notes payable 326,634
Inventories 1,125,000 Other current liabilities 525,000
Total current assets $2,925,000 Total current liabilities $1,453,500
Net fixed assets 1,350,000 Long-term debt 1,068,750
Common equity 1,752,750
Total assets $4,275,000 Total liabilities and equity $4,275,000
Lozano Chip Company: Income Statement for Year Ended December 31, 2013 (Thousands of Dollars)
Sales $7,500,000
Cost of goods sold 6,375,000
Selling general and administrative expenses 825,000
Earnings before interest and taxes (EBIT) $ 300,000
Interest expense 111,631
Earnings before taxes (EBT) $ 188,369
Federal and state income taxes (40%) 75,348
Net income $ 113,022
Calculate the indicated ratios for Lozano. Round your answers to two decimal places.
Ratio Lozano Industry Average
Current assets/Current liabilities 2.0
Days sales outstanding* days 35.0 days
COGS/Inventory 6.7
Sales/Fixed assets 12.1
Sales/Total assets 3.0
Net income/Sales % 1.2%
Net income/Total assets % 3.6%
Net income/Common equity % 9.0%
Total debt/Total assets % 30.0%
Total liabilities/Total assets % 60.0%
*Calculation is based on a 365-day year.
Construct the extended Du Pont equation for both Lozano and the industry. Round your answers to two decimal places.
For the firm, ROE is %
For the industry, ROE is %
Outline Lozano's strengths and weaknesses as revealed by your analysis
Answer and Explanation:
The computation of Construction of the extended Du Pont equation for both Lozano and the industry is shown below:-
Current asset ÷ current liability = 2
Days sales outstanding =35 days
Sales ÷ Inventory = 6.67
Sales ÷ Fixed assets = 5.55
Sales ÷ Total assets = 1.754
Net income ÷ Sales = 1.5%
Net income ÷ Total assets = 2.64%
Net income ÷ common equity = 6.45%
Total liabilities ÷ Total assets =59%
b. the computation of firm and industry ROE is shown below:-
Du Pont
Lozano
ROI = [(net profit ÷ sales) × (sales ÷ Total assets)]
= [(113,022 ÷ 7,500,000) × (7,500,000 ÷ 4,275,000)]
= 0.0264
or
= 2.64%
For Industry
ROI = 1.2% × 3
= 0.036
or
= 3.6%
c. Lozano's strengths
1. ROI determined the profit at the time when a firm earned on investing a capital unit
2. Also, the net income or sales figured out the efficiency level so that it could maintain the business affairs
Lozano's Weakness
1. If we compare the fixed asset turnover with the average of an industry than the investment made in fixed assets would not be a good judgment
Quick Computing currently sells 10 million computer chips each year at a price of $20 per chip. It is about to introduce a new chip, and it forecasts annual sales of 12 million of these improved chips at a price of $25 each. However, demand for the old chip will decrease, and sales of the old chip are expected to fall to 3 million per year. The old chips cost $6 each to manufacture, and the new ones will cost $8 each. What is the proper cash flow to use to evaluate the present value of the introduction of the new chip?
Answer:
Annual cashflow for the decision= $162 million
Explanation:
The proper cashflow would be determined as follows:
Contribution per unit = Sales price - variable cost
Contribution per unit of new chip = 25-8 = $17 per unit
Contribution per unit of old chip = 20 - 6 = 14 per unit.
Contribution form the sale of the new chip = contribution per unit × annual sales in unit
=17 × 12 million units = $204 million
lost Contribution from the old chip = contribution per unit × lost annual sales in unit
Lost contribution from old chip= $14 × 3 million unit = $42 million
Note that the lost contribution is an opportunity cost occasioned as a result of the introducing the new chip, hence the contribution should be deducted
Annual cashflow for the decision= $204 million -$42 million = $162 million
Annual cashflow for the decision= $162 million
A blank is something a person want to get out of a job or that bring them job satisfaction
Answer:
A work value is something a person wants to get out of a job or that brings them job satisfaction. Correct answer: B
Work values include talents, motives, values and attitudes which provide stability and direction for the chosen career. That is why it is very important to choose your career for the right reasons, goals and motivation.
Explanation:
Last month, Bergen Incorporated’s Fabrication Department had 5,800 units in beginning work in process inventory that were 70% complete. These units had $24,012 of materials cost and $24,766 of conversion cost. All materials are added at the beginning of the process and conversion costs are added uniformly throughout the process. Over the course of the month, 12,200 units were completed and transferred to Finished Goods Inventory. At the end of the month, there were 4,900 units that were 60% complete in ending work in process inventory. The unit materials cost was $5.00 and the unit conversion cost was $4.00 for the month. What was the total cost for units started into production during the month?
Answer: Option D $97,282 is correct
Explanation:
Materials Conversion
Units completed and transferred 12200 12200
Ending work in process 4900 2940 =4900*60%
Equivalent units 17100 15140
Materials Conversion Total
Equivalent units 17100 15140
X Cost per Equivalent unit 5.00 4.00
Total costs 85500 60560 146060
Total costs 146060
Less: Cost of beginning work in process 48778 =24012+24766
Cost of units started into production 97282
your company will need a business plan in order to do what?
A. Increase revenue.
B. Identify an opportunity.
C. Pay taxes.
D. Get funding.
Answer: D. Get Funding
Explantion: You company will need a business plant in order to get funding because you'd need to present your investors with the future of your business and what it's there to do. I also happened to take the assessment and it was marked correctly.
I hope this helped!
Good luck <3
Your company will need a business plan in order to get funding. Hence, the correct answer is option D.
What is a business plan?A business plan is a formal document that outlines a company's goals, strategies, and projected outcomes. One of the primary reasons for creating a business plan is to secure funding from investors or financial institutions. By presenting a well-written and comprehensive business plan, a company can demonstrate its viability and potential for success, which can increase its chances of obtaining the necessary funding to start or grow the business.
While a business plan can help a company increase revenue and identify opportunities, those outcomes are not the primary purpose of a business plan. Paying taxes is a legal requirement for all companies, but a business plan is not directly related to tax obligations.
Therefore, a company will need a business plan in order to get funding. Hence, the correct answer is option D.
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Whispering Company lost most of its inventory in a fire in December just before the year-end physical inventory was taken. Corporate records disclose the following. Inventory (beginning) $ 79,100 Sales revenue $422,000 Purchases 288,300 Sales returns 21,400 Purchase returns 27,900 Gross profit % based on net selling price 33 % Merchandise with a selling price of $29,400 remained undamaged after the fire, and damaged merchandise has a net realizable value of $8,700. The company does not carry fire insurance on its inventory. Compute the amount of inventory fire loss. (Do not use the retail inventory method.) Inventory fire loss $
Answer:
$42,700
Explanation:
The calculation of the amount of inventory fire loss is shown below:-
Particulars Amount
Opening inventory $79,100
Purchases $288,300
Less:- Purchase returns $27,900 $260,400
Goods available $339,500
Sales revenue $422,000
Less- Sales returns $21,400
Net Sales $400,600
Less:- Gross profit $132,198 $268,402
($400,600 × 33%)
Estimated ending inventory $71,098
Less:- Goods on hand-undamaged $19,698
$29400 × (1 - 0.33)
Less:- Goods on hand-damaged $8,700
Fire loss on inventory $42,700
Month Income Price Coke Price Pepsi Q^D Coke Q^D Pepsi
Jan 300 2.40 2.40 14 10
Feb 300 3.00 2.40 10 14
Mar 500 2.40 2.40 20 14
Apr 300 3.00 1.20 8 16
Calculate the e D of coke and Income Elasticity Demand of Coke using the midpoint method. Hint: We need to be careful about the data we choose to calculate these. To calculate e D we need a change in price of Coke and quantity demanded for Coke but we need everything else that affects the demand to remain the same. Similarly, to calculate Income Elasticity Demand of coke, need two months such that there is a change in income, but no other changes.
(a) Price Elasticity of Demand (e D) of coke.
i) What are the two months you pick? Why?
ii) Calculate eD of coke.
(b) Income Elasticity of Demand (IED) of Coke.
i) What are the two months you pick? Why?
ii) Calculate IED of coke
Answer:
midpoint method for income elasticity of demand = {ΔQD / [(QD₀ + QD₁)/2]} / {ΔI / [(I₀ + I₁)/2]}
midpoint method for price elasticity of demand = {ΔQD / [(QD₀ + QD₁)/2]} / {ΔP / [(P₀ + P₁)/2]}
a) I will use the information from January and February to calculate the price elasticity of demand of Coke. I cannot use March instead of January because income increased during that month.
QD₀ = 14
QD₁ = 10
P₀ = 2.40
P₁ = 3
PED = {(10 - 14) / [(14 + 10)/2]} / {(3 - 2.4) / [(3 + 2.4)/2]}
PED = {-4 / 12} / {0.6 / 2.7} = -0.3333 / 0.2222 = -1.5 or |1.5| in absolute terms
Coke's PED is elastic since a 1% change in price will result in a larger proportional change in the quantity demanded.
b) I will use the information from January and March to calculate the income elasticity of demand of Coke. These are the two months where income changes but price of Coke remains the same.
QD₀ = 14
QD₁ = 20
I₀ = 300
I₁ = 500
PED = {(20 - 14) / [(14 + 20)/2]} / {(500 - 300) / [(300 + 500)/2]}
PED = {6 / 17} / {200 / 400} = 0.3529 / 0.5 = 0.71
Coke's IED is positive, therefore, Coke is a normal good.
As of December 31, 2021, Cady Construction has one construction job for which the construction in prog-ress (CIP) account has a balance of $20,000 and the billings on construction contract account has a balance of $14,000. Cady has another construction job for which the construction in progress account has a balance of $3,000 and the billings on construction contract account has a balance of $5,000. Indicate the amount of contract asset and/or contract liability that Cady would show in its December 31, 2021, balance
Answer:
According to "AS 7 - Construction Contracts",Gross amounts receivable / payable from / by customers should be recognized as contract asset / liability in the balance sheet.
For the first job, construction work in progress is greater than the bills raised. Hence there exists contract asset.
Contract asset = Cost incurred - Billing done
= $20,000 - $14,000
= $6,000
For the second job, construction in progress is less than the bills raised. Hence there exists contract liability.
Contract liability = Bills raised - Cost incurred
= $5,000 - $3,000
= $2,000
Hence, Contract asset = $6000 , Contract Liability = $2000
While visiting a client to deliver their 2019 tax documents, one of the owners approaches you and states: "The IRS says my travel is no longer business travel, but instead, is commuting. They are saying I am going to owe taxes on the money the company has reimbursed for my travel. I spend $1,500 per week traveling, and travel at least 50 weeks out of the year, traveling weekly to Houston on Monday, Los Angeles on Tuesday, Seattle on Wednesday, Chicago on Thursday, and Philadelphia on Friday. I leave my home in Atlanta early Monday morning, and on Friday night, I fly back to Atlanta, and my home. I visit different clients each time I visit the cities to which I travel. My job is to help them get their restaurants up and running, and I am usually there from start to finish, which takes anywhere from 3 to 9 months. I have been traveling like this for the past 10 years. That is a lot of money we are talking about. The IRS also said something about fraud, fines and penalties, maybe even jail time. Are they right? Can they send me to jail for doing my job? What should I do?"
Answer:
Commuting refers to travelling from your home to your workplace. It generally refers to the distance that people generally travel to get to their office or any type of workplace.
While business travel refers to not only leaving your house to go to work, but actually going somewhere else to perform your regular business activities, e.g. going form one state to another to close a sale. In order for business travel to be effectively recognized as such, it must be necessary for your business activity and it should last more than one ordinary workday.
In this case, your client continuously leaves his house and goes form one state to another performing his normal business activities. This perfectly fits the IRS's definition of business travel.
Initially, you can try to solve this issue with IRS Office of Appeals (since you are right), but if that doesn't work, then you can go to Tax Court.
James Grunig, professor emeritus of public relations at the University of Maryland, listed the following possible objectives for a communicator _________.
Answer: See explanation
Explanation:
According to James Grunig, professor emeritus of public relations at the University of Maryland, the five possible objectives for a communicator are:
• Message Exposure - This refers to situation when the intended people get exposed to the message that is being shared. Here, materials are provided to the mass media by the PR personel.
• Accurate dissemination of message - Messages must be passed across and communicated as clearly as possible without giving out false information or witholding back some information which is vital for the accuracy of the information delivered.
• Acceptance of the message - The message passed must be accepted by the person that's being addressed.
• Attitude change - There must be an attitude change after the message has been delivered as these shows acceptance and products should be purchased.
• Change in overt behavior - Overt behavior is openly seen and hence, there will be change in overt behavior and the goods will be purchased.
William Brown, the CFO of Oriole Automotive, Inc., is putting together this year's financial statements. He has gathered the following balance sheet information: The firm had a cash balance of $23,015, accounts payable of $163,257, common stock of $311,300, retained earnings of $512,159, inventory of $213,100, goodwill and other assets equal to $78,656, net plant and equipment of $710,100, and short-term notes payable of $21,115. It also had accounts receivable of $141,258 and other current assets of $11,223. How much long-term debt does Oriole Automotive have?
Answer:
$169,521
Explanation:
The computation of long-term debt is shown below:-
Total asset = Cash + Inventory + Goodwill + Net plant and equipment + Receivables + Current assets
= $23,015 + $213,100 + $78,656 + $710,100 + $141,258 + $11,223
= $1,177,352
Long-term debt = Total asset - Account payable - Common stock - Retained earnings - Short term notes
= $1,177,352 - $163,257 - $311,300 - $512,159 - $21,115
= $169,521
Hence, we have applied the above formula for determining the long term debt.
For the following accounts, indicate what causes the account to increase and decrease. The first account is completed as an example. (Abbreviation used: OH=overhead)
Account Is increased by: Is decreased by:
Raw Materials Inventory Materials purchased Materials used
Work-in-Process Inventory
Adjustment for over/under allocation of OH Completion of jobs Direct labor incurred Direct materials used Manufacturing overhead allocated Materials purchased Materials used Shipping sold jobs
Table of accounts
Account Is increased by: Is decreased by:
Raw Materials Inventory Materials purchased Materials used
Work-in-Process Inventory
Finished Goods Inventory
Cost of Goods Sold
Answer and Explanation:
The causes of the account to increase and decrease is shown below:-
Account Is increased by Is decreased by
Raw material inventory Material purchased Material used
Work-in-progress
inventory Direct material used Completion of jobs
Direct labor incurred
MOH allocated
Finished goods
inventory Completion of jobs Shipping sold jobs
Cost of goods sold Shipping sold jobs Adjustment for over/under
allocation of OH
Adjustment for over or under
allocation of OH
The above shows the increment and decrement of each item and the same is being considered
Big-Pear Corp. is considering replacing its existing equipment that is used to produce smart cell phones. This existing equipment was purchase 2 years ago at a base price of $48,000. Installation costs at the time for the machine were $7,000. The existing equipment is considered a 5-year class for MACRS. The existing equipment can be sold today for $60,000 and for $30,000 in 4 years. The new equipment has a purchase price of $145,000 and is also considered a 5-year class for MACRS. Installation costs for the new equipment are $8,000. The estimated salvage value of the new equipment in year 4 is $70,000. This new equipment is more efficient than the existing one and thus savings before taxes using the new equipment are $12,000 a year. Due to these savings, inventories will see a one time reduction of $3,000 at the time of replacement. The company's marginal tax rate is 33% and the cost of capital is 12%. For this project, what is the incremental cash flow in year 3
Answer:
-$7,525.44
Explanation:
MACRS 5 year depreciation
20%32%19.20%11.52%11.52%5.76%if project is carried out:
initial outlay = {[$60,000 - ($55,000 x 52%)] x (1 - 33%)} - $145,000 - $8,000 + $3,000 = -$128,962
cash flow year 1 = [$12,000 - ($154,000 x 20%)] x 0.67 = -$12,596
cash flow year 2 = [$12,000 - ($154,000 x 32%)] x 0.67 = -$24,977.60
cash flow year 3 = [$12,000 - ($154,000 x 19.2%)] x 0.67 = -$11,770.56
cash flow year 4 = {[$12,000 - ($154,000 x 11.52%)] x 0.67} + {[$70,000 - ($154,000 x 17.28%)] x (1 - 33%)} = -$3,846.34 + $29,070.50 = $25,224.16
if project is not carried out:
cash flow year 1 = -$10,506 x 0.67 = -$7,0752.20
cash flow year 2 = -$6,336 x 0.67 = -$4,245.12
cash flow year 3 = -$6,336 x 0.67 = -$4,245.12
cash flow year 4 = (-$3,168 x 0.67) + ($30,000 x 0.67) = $17,977.44
incremental cash flow year 3 = -$11,770.56 - (-$4,245.12) = -$7,525.44
Eric and Deborah are partners at a law firm. They are trying to determine which of them has a comparative advantage in typing the 25 pages required for a sales pitch to a prospective client.
Eric can type 20 pages per hour. For other activities, he can bill clients $500 per hour. Eric's opportunity cost of typing pages is_____per page.
Deborah's opportunity cost of typing pages is 25% lower than Eric's. However, as the senior partner, her billing rate is 20% higher. Based on all of these facts,_____has a comparative advantage in typing pages.
Answer:
Eric's opportunity cost of typing pages is $25 per page.
Based on all of these facts, Deborah has a comparative advantage in typing pages.
Explanation:
Eric's opportunity cost of typing is $500 / 20 pages = $25 per page.
Since's Deborah's opportunity cost of typing pages is 20% less than Eric's, then she has a comparative advantage in typing pages.
The person, business or country with the lowest opportunity cost has the comparative advantage in producing that good.
For each item described: Identify the type of account (Asset, Liability, Equity, Revenue or Gain, Expense or Loss), normal balance (Debit, Credit), financial statement (Balance Sheet, Income Statement), and whether the account is closed at the end of the period (Yes, No) by selecting the letter that best describes those attributes. If an account is a contra account, the answer will show the account type in parentheses. Answer items may be used once, more than once, or not at all.
Sales & Services
Allowance to for Doubtful Accounts
Office Salaries Paid
Notes Payable
Cash
Sales Returns & Allowances
1. Expense or Loss, Debit, Income Statement, Yes
2. Revenue or Gain, Credit, Income Statement, Yes
3. Asset, Debit, Income Statement, Yes
4. Liability, Credit, Income Statement, Yes
5. Revenue, Credit, Balance Sheet, No
6. (Asset), Credit, Balance Sheet, No
7. (Revenue or Gain), Credit, Income Statement, Yes
8. Asset, Debit, Balance Sheet, No
9. Asset, Debit, Balance Sheet, No
Answer:
Identification of Type of Account, etc.:
Letter Account
2. Sales & Services
6. Allowance to for Doubtful Accounts - 6. (Asset), Credit, Balance Sheet, No
1. Office Salaries Paid - Expense or Loss, Debit, Income Statement, Yes
Notes Payable
8. Cash - Asset, Debit, Balance Sheet, No
1. Sales Returns & Allowances - Expense or Loss, Debit, Income Statement, Yes
Explanation:
NB: Notes Payable are Liabilities, Credit, Balance Sheet, No.
The normal balance of Assets is debit. Assets are stated in the balance sheet and are not closed at the end of the period. The normal balance of Liabilities and Equity is credit. Liabilities and Equity are stated in the balance sheet and are not closed at the end of the period. The normal balance of Revenue or Gain is credit. Revenue or Gain is stated in the Income Statement and is closed at the end of the period. The normal balance of Expense or Loss is debit. Expense or loss is closed at the end of the period.
International Gems sells fine jewelry and has implemented activity-based costing. Costs in the shipping department have been divided into three cost pools. The first cost pool contains costs that are related to packaging and shipping. International has determined that the number of boxes shipped is an appropriate cost driver for these costs. The second cost pool is made up of costs related to the final inspection of each item before it is shipped and the cost driver for this pool is the number of individual items that are inspected. The final cost pool is used for general operations of the department and the cost driver is the number of orders. Information about the activities is summarized below:
Cost Pool Total Costs Cost Driver Annual Activity
Packaging and shipping $164,700 Number of boxes shipped 24,000 boxes
Final inspection $200,600 Number of individual items shipped 98,900 items
General operations and supervision $84,300 Number of orders 8,100 orders
During the period, the Far East sales office generated 684 orders for a total of 6,120 items. These orders were shipped in 1,474 boxes. What amount of shipping department costs should be allocated to these sales?
Answer:
Total shipping department cost = $29,647.26
Explanation:
Total shipping department cost = (Packaging and shipping cost per box * no of boxes) + (Final inspection cost per item * no of items) + (General operations and supervision cost per order * no of orders)
- Final inspection cost per item = Total cost / Annual activity
Final inspection cost per item = 200,600 / 98,900
Final inspection cost per item = 2.028311
- General operations and supervision cost per order = Total cost / Annual activity
General operations and supervision cost per order = 84,300 / 8,100
General operations and supervision cost per order = 10.40741
- Packaging and shipping cost per box = Total cost / Annual activity
Packaging and shipping cost per box = 164,700 / 24,000
Packaging and shipping cost per box = 6.6825
Hence, Total shipping department cost = (6.6825 * 1,474) + (2.028311 * 6,120) + (10.40741 * 684)
Total shipping department cost = 9850.005 + 12413.263 + 7118.668
Total shipping department cost = $29,647.26
The amount of shipping department costs that should be allocated to these sales will be $29647.26.
The final inspection cost per item will be:
= Total cost / Annuity activity
= 200600 / 98900
= 2.03
General operations and supervision cost per order will be:
= Total cost / Annual activity
= 84300 / 8100
= 10.41
Packaging and shipping costs per box will be:
= Total cost / Annual activity
= 164700 / 24000
= 6.68
Therefore, the total shipping cost will be:
= (6.6825 × 1.474) + (2.03 × 6120) + (10.41 × 684)
= 9850 + 12413.26 + 7118.67
= 29647.26
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Isabel, a calendar-year taxpayer, uses the cash method of accounting for her sole proprietorship. In late December she received a $28,000 bill from her accountant for consulting services related to her small business. Isabel can pay the $28,000 bill anytime before January 30 of next year without penalty. Assume her marginal tax rate is 37 percent this year and next year, and that she can earn an after-tax rate of return of 11 percent on her investments. a. What is the after-tax cost if Isabel pays the $28,000 bill in December
Answer:
A. $17,640
B.$18,666
Explanation:
a. Calculation for the after-tax cost if Isabel pays the $28,000 bill in December
First step is to find the Tax savings in current year
Tax savings in current year = $28,000*37%
Tax savings in current year = $10,360
Last step is to calculate for the After tax cost using this formula
After tax cost = Cost of bill - Tax savings
Let plug in the formula
After tax cost= $28,000-$10,360
After tax cost=$17,640
Therefore the after-tax cost if Isabel pays the $28,000 bill in December will be $17,640
b. Calculation for the after-tax cost if Isabel pays the $20,000 bill in January
First step is to find the Tax savings in next year
Tax savings in current year = $28,000*37%
Tax savings in current year = $10,360
Second step is to find the present value of $1 ($28,000/$28,000) at 11% for one year using present value table
Present value of $1 at 11% for one year = 0.901
Present value of tax savings = $10,360* .901
Present value of tax savings =$9,334.36
Last step is to calculate for the After tax cost using this formula
After tax cost = Cost of bill - Tax savings
Let plug in the formula
After tax cost = $28,000-$9,334.36
After tax cost=$18,665.64 approximately $18,666
Therefore the after-tax cost if Isabel pays the $28,000 bill in January will be $18,666
How much would it cost for Chester Corporation to repurchase all its outstanding shares if new brokerage fees totaled 1% of the underlying transaction?
Select: 1
$85.3 million
$76.4 million
$83.7 million
$78.0 million
Answer:
$78.0 million
Explanation:
Cost of repurchase = Number of shares*Share price/(1-1%)
Cost of repurchase = $3,352,720 * $23.02/(1-1%)
Cost of repurchase = $3,352,720 * $23.02/(1 - 0.01)
Cost of repurchase = $3,352,720 * $23.02/0.99
Cost of repurchase = $3,352,720 * $23.25
Cost of repurchase = $ 77,950,740
Cost of repurchase = $78.0 million
The corporation would cost $78.0 million to repurchase all its shares back from the market.
The new brokerage fees are given as 1% of the transaction. The cost of purchase would be derived out of the given formula:
[tex]c= \frac{n*Sp}{1-1 percent} \\=\frac{3,352,720 * 23.02}{1 - 0.01} \\=78.0[/tex]
Here, c is the repurchase cost, n is the number of shares, and Sp is the share price. Finally, the repurchase cost is computed as $78 million.
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Yuma, Inc. manufactures teddy bears and dolls. Currently, Yuma makes 2,100 teddy bears each month. Each teddy bear uses $3.50 in direct materials and $1.00 in direct labor. Yuma uses two activities in manufacturing the teddy bears: Sewing and Processing. The cost associated with Sewing is $15,750 a month, allocated on the basis of direct labor hours. The cost associated with Processing is $10,500 a month, allocated on the basis of batches. Teddy bears use 1/2 of the direct labor hours, and 35% of total batches. What is the total manufacturing cost for one teddy bear?
Answer:
$10.00
Explanation:
Calculation for the total manufacturing cost for one teddy bear
Total manufacturing cost=$3.50 + $1.00 + [($15,750 × 1/2)/2,100] + [($10,500 × 35%)/2,100]
Total manufacturing cost=$3.50 + $1.00 + ($7,875/2,100) + ($3,675/2,100)
Total manufacturing cost=$3.50 + $1.00 + $3.75+ $1.75
Total manufacturing cost=$10.00
Therefore the total manufacturing cost for one teddy bear will be $10.00
