Answer:
$2,500,000
Explanation:
The computation of the before tax amount that should be reported as loss on discontinued operations is shown below:
Division loss from operations $2,000,000
Add: Impairment loss ($3,000,000 - $2,500,000) $500,000
Total loss on discount operations $2,500,000
Hence, the before tax amount that should reported on loss on disconituned operations is $2,500,000
Neighborhood Realty, Incorporated, has been operating for three years and is owned by three investors. S. Bhojraj owns 60 percent of the total outstanding stock of 9,000 shares and is the managing executive in charge. On December 31, current year, the following financial items for the entire year were determined: commissions earned and collected in cash, $150,900, plus $16,800 uncollected; rental service fees earned and collected, $20,000; salaries expense paid, $62,740; commissions expense paid, $35,330; payroll taxes paid, $2,500; rent paid, $2,475 (not including December rent yet to be paid); utilities expense paid, $1,600; promotion and advertising paid, $7,750; income taxes paid, $24,400; and miscellaneous expenses paid, $500. There were no other unpaid expenses at December 31. Also during the year, the company paid the owners "out-of-profit" cash dividends amounting to $12,000.
Complete the following income statement:Income Statement
Revenues:Commissions earned$Rental service fees$Total revenues$Expenses:Salaries expenseCommission expensePayroll tax expenseRent expenseUtilities expensePromotion and advertising expenseMiscellaneous expensesTotal expenses (excluding income taxes)Pretax incomeIncome tax expenseNet income$
Answer:
$50,180
Explanation:
Preparation of Income Statement
NEIGHBORHOOD REALTY, Incorporated Income Statement For the Year Ended December 31,
REVENUE :
Commissions earned$167,700
($150,900+ $16,800)
Rental service fees 20,000
Total revenues $187,700
EXPENSES :
Salaries expense $62,740
Commissions expense $35,330
Payroll taxes $2,500
Rent Expenses $2,700
($2,475/11 month=225)
($2,475+225=$2,700)
Utilities expense $1,600
Promotion and advertising $7,750
Miscellaneous expenses $500
Total expenses (excluding income taxes) $113,120
Pretax income $74,580
($187,700-$113,120)
Income tax expense 24,400
Net income $50,180
($74,580-24,400)
Therefore NEIGHBORHOOD REALTY, Incorporated Income Statement For the Year Ended December 31, NET INCOME will be $50,180
The L.L. Bean men’s cotton chambray shirt comes in the following colors: blue, stone, rust, green, red, orange, plum, and indigo. In addition, shirt sizes are small (S), medium (M), large (L), extra large (XL), and extra extra large (XXL), and the shirt comes with either short sleeves, medium sleeves, or long sleeves. As the inventory manager for L.L. Bean’s eastern U.S. operations, you are concerned about physical, basically shelf, space, as well as inventory system space, basically computer memory. For example, products with many varieties, or styles, require more physical (shelf) space, as well as more inventory system space. How many types of the cotton chambray shirt can be produced?
Answer:
120 different types can be produced
Explanation:
there are 5 sizes:
small (S)medium (M)large (L)extra large (XL)extra extra large (XXL)there are 8 possible colors:
bluestonerustgreenredorangeplumindigothere are 3 different models (sizes of sleeves):
short sleevesmedium sleeves long sleevesthe total possible combinations = 5 (size options) x 8 (color options) x 3 (sleeves options) = 120 different types can be produced
e.g. a short sleeve can be blue and small, but it can also be large, medium, and so on. Each short sleeve shirt can be produced in 40 different ways and this also applies to medium sleeves and long sleeves shirts.
Recently, the owner of Martha's Wares encountered severe legal problems and is trying to sell her business. The company built a building at a cost of $1,100,000 that is currently appraised at $1,300,000. The equipment originally cost $580,000 and is currently valued at $327,000. The inventory is valued on the balance sheet at $270,000 but has a market value of only one-half of that amount. The owner expects to collect 97 percent of the $155,200 in accounts receivable it is owed. The firm has $11,100 in cash and owes a total of $1,400,000. The legal problems are personal and unrelated to the actual business. What is the market value of this firm?
Answer:
$523,644
Explanation:
The computation of the market value of this firm is shown below;
Asset at realizable value amount ($)
Building appraised value $1,300,000
Equipment current value $327,000
Inventory Market value ($270000 ÷ 2) $135,000
Accounts receivables ($155,200 × 97%) $150,544
Cash $11,100
Total assets gross available $1,923,644
(-) Owings -$1,400,000
The Market value of the firm $523,644
Amy Corporation, which applies manufacturing overhead on the basis of direct labor hours, has provided the following data for its most recent year of operations. Estimated manufacturing overhead $264,040 Estimated direct labor hours 2,300 Actual manufacturing overhead $258,000 Actual direct labor hours 2,260 The estimates of the manufacturing overhead and of direct labor hours were made at the beginning of the year. The applied manufacturing overhead for the year is closest to:
Answer:
$259,448
Explanation:
Estimated manufacturing overhead $264,040
Estimated direct labor hours 2,300
predetermined overhead rate = $114.80 per labor hour
Actual manufacturing overhead $258,000
Actual direct labor hours 2,260
actual overhead rate = $114.16
applied overhead for the year = actual direct labor hours x predetermined overhead rate = 2,260 hours x $114.80 = $259,448 overapplied ($259,448 ˃ $258,000)
Suppose that a small company is thinking of putting plants in their lobby for employees to view and enjoy. Since the plants are to be viewed by employees, the plants are non-excludable (it is infeasible to move a plant each time a specific individual walks by) and non-rival in consumption (if one worker looks at the plant, it does not prevent another from doing so as well).
The company employs three workers: Robin, Tyler, and Ray. The company is thinking about buying up to three plants, and wants to know how much workers would enjoy each plant. For Robin, the first plant has a benefit of $47 per day, the second plant has a benefit of $37 per day, and the third plant has a benefit of $13 per day. For Tyler, the first has a benefit of $41 per day, the second has a benefit of $28 per day, and the third has a benefit of $6 per day. For Ray, the first plant has a benefit of $31 per day, the second has a benefit of $19 per day, and the third has a benefit of $2 per day.
Given that no one else will see the plants, no one else values the plants in the lobby.
1) What is the marginal social benefit of the first?
2) What is the marginal social benefit of the second plant?
3) What is the marginal social benefit of the third plant?
Answer:
Marginal Social Benefit = The Sum of all individual Benefit.
The Marginal social benefit of the first plant = Sum of first plant benefit of Robin, Tyler, and Ray
1. The marginal social benefit of the first = $47 + $41 + $31 = $119
2. The marginal social benefit of the second = $37 + $28 + $19 = $84
3. The marginal social benefit of the third = $13 + $6 + $2 = $21
g Cupola Awning Corporation introduced a new line of commercial awnings in 2021 that carry a two-year warranty against manufacturer’s defects. Based on their experience with previous product introductions, warranty costs are expected to approximate 3% of sales. Sales and actual warranty expenditures for the first year of selling the product were: Sales Actual Warranty Expenditures $5,800,000 $51,000 Required: 1. Does this situation represent a loss contingency? 2. Prepare journal entries that summarize sales of the awnings (assume all credit sales) and any aspects of the warranty that should be recorded during 2021. 3. What amount should Cupola report as a liability at December 31, 2021?
Answer:
1. Does this situation represent a loss contingency?
since warranty liabilities are both probable and can be measured, yes, they are considered loss contingencies
2. Prepare journal entries that summarize sales of the awnings (assume all credit sales) and any aspects of the warranty that should be recorded during 2021.
to record sales revenue
Dr Accounts receivable 5,800,000
Cr Sales revenue 5,800,000
to record warranty liability
Dr Warranty expense 174,000
Cr Warranty liability 174,000
warranty liability = $5,800,000 x 3%
to record actual warranty expenditures
Dr Warranty liability 51,000
Cr Cash/inventory/wages payable 51,000
3. What amount should Cupola report as a liability at December 31, 2021?
Warranty liability account's balance on December 31, 2021 = $174,000 - $51,000 = $123,000
A(n) _____ is any activity that provides goods or services to consumers for the purpose of making a profit.
Answer:
Trade
Explanation:
Answer:
A Business
Explanation:
This is exactly what businesses do they provide goods and/or services in hopes of making money!
Activity Cost Pools Estimated Overhead Cost Expected Activity Assembly $ 515,520 52,500 machine-hours Processing orders $ 62,763 1,950 orders Inspection $ 86,089 1,960 inspection-hours Data concerning the company's product L19B appear below: Annual unit production and sales 600 Annual machine-hours 1,160 Annual number of orders 240 Annual inspection hours 190 Direct materials cost $ 54.74 per unit Direct labor cost $ 27.45 per unit According to the activity-based costing system, the unit product cost of product L19B is closest to: (Round your intermediate calculations to 2 decimal places.)
Answer:
$127.96
Explanation:
The computation of unit product cost of product L19B is shown below:-
Particulars Total pool cost Total activity Activity rate
Assembly $515,520 52,500 9,82
Processing orders $62,763 1,950 32.19
Inspections $86,089 1,960 43.92
For determining the activity rate we simply divide the total pool cost by total activity for assembly and in the same manner for others too.
Particulars Activity rate Activity Overhead allocated
Assembly 9,82 1,160 11,391.2
Processing orders 32.19 240 7,725.6
Inspections 43.92 190 8,344.8
Total 27,462
For determining the overhead allocated we simply multiply the activity rate with activity.
Overhead cost per unit = 27,462 ÷ 600
= $45.77
So,
Unit product cost = Overhead cost per unit + Direct material + Direct labor
= $45.77 + $54.74 + $27.45
= $127.96
Refer to the original data.
Sales (19,500 units at $30 per unit) $585,000
Variable expenses 409,500
Contribution margin 175,500
Fixed expenses 180,000
Net operating loss $(4,500)
By automating, the company could reduce variable expenses by $3 per unit. However, fixed expenses would increase by $72,000 each month. Assume that the company expects to sell 26,000 units next month. Prepare two contribution format income statements, one assuming that operations are not automated and one assuming that they are:_____.
Answer:
Contribution income statement - Assuming that operations are not automated.
Sales (26,000 units at $30 per unit) $780,000
Variable expenses ($409,500/ 19,500 × 26,000) ($546,000)
Contribution margin $234,000
Fixed expenses ($180,000 )
Net operating loss $54,000
Contribution income statement - Assuming that operations are automated.
Sales (26,000 units at $30 per unit) $780,000
Variable expenses ($18 × 26,000) ($468,000)
Contribution margin $312,000
Fixed expenses ($180,000 + $72,000 ) ($252,000 )
Net operating loss $60,000
Explanation:
A contribution Income Statement Shows the contribution (Sales less Variable Costs).
See the Statements for the Assumptions above.
GRECO RESORT
TRIAL BALANCE
AUGUST 31, 2017
Debit Credit
Cash $19,600
Prepaid Insurance 4,500
Supplies 2,600
Land 20,000
Buildings 120,000
Equipment 16,000
Accounts Payable $4,500
Unearned Rent Revenue 4,600
Mortgage Payable 60,000
Common Stock 91,000
Retained Earnings 9,000
Dividends 5,000
Rent Revenue 76,200
Salaries and Wages Expense
44,800
Utilities Expenses 9,200
Maintenance and Repairs Expense
3,600
$ 245,300 $245,300
1. The balance in prepaid insurance is a one-year premium paid on June 1, 2017.
2. An inventory count on August 31 shows $450 of supplies on hand.
3. Annual depreciation rates are buildings (4%) and equipment (10%). Salvage value is estimated to be 10% of cost.
4. Unearned Rent Revenue of $3,800 was earned prior to August 31.
5. Salaries of $375 were unpaid at August 31.
6. Rentals of $800 were due from tenants at August 31.
7. The mortgage interest rate is 8% per year.
Instructions:
(a) Journalize the adjusting entries on August 31 for the 3-month period June 1 - August 31 (omit explanations.)
(b) Prepare an adjusted trial balance on August 31.
Answer:
GRECO RESORT
a) Journal Entries on August 31:
1. Debit Insurance Expense $1,125
Credit Prepaid Insurance $1,125
2. Debit Supplies Expense $2,150
Credit Supplies $2,150
3. Debit Depreciation Expense-Buildings $4,800
Credit Accumulated Depreciation - Buildings $4,800
Debit Depreciation Expense- Equipment $1,440
Credit Accumulated Depreciation- Equipment $1,440
4. Debit Unearned Rent Revenue $3,800
Credit Rent Revenue $3,800
5. Debit Salaries Expense $375
Credit Salaries Expense Payable $375
6. Debit Accounts Receivable $800
Credit Rent Revenue $800
7. Debit Mortgage Interest Expense $1,200
Credit Mortgage Interest Payable $1,200
b. GRECO RESORT
Adjusted TRIAL BALANCE
AUGUST 31, 2017
Debit Credit
Cash $19,600
Accounts Receivable 800
Prepaid Insurance 3,375
Supplies 450
Land 20,000
Buildings 120,000
Equipment 16,000
Accounts Payable $4,500
Mortgage Interest Payable 1,200
Unearned Rent Revenue 800
Mortgage Payable 60,000
Common Stock 91,000
Retained Earnings 9,000
Accumulated Depreciation-Buildings 4,800
Accumulated Depreciation-Equipment 1,440
Dividends 5,000
Rent Revenue 80,800
Salaries & Wages Expense Payable 375
Salaries and Wages Expense 45,175
Utilities Expenses 9,200
Maintenance & Repairs Expense 3,600
Insurance Expense 1,125
Supplies Expense 2,150
Depreciation Expense- Buildings 4,800
Depreciation Expense- Equipment 1,440
Mortgage Interest Expense 1,200
Total $ 253,915 $253,915
Explanation:
a) Data and Calculations:
GRECO RESORT
TRIAL BALANCE
AUGUST 31, 2017
Debit Credit
Cash $19,600
Prepaid Insurance 4,500
Supplies 2,600
Land 20,000
Buildings 120,000
Equipment 16,000
Accounts Payable $4,500
Unearned Rent Revenue 4,600
Mortgage Payable 60,000
Common Stock 91,000
Retained Earnings 9,000
Dividends 5,000
Rent Revenue 76,200
Salaries and Wages Expense 44,800
Utilities Expenses 9,200
Maintenance & Repairs Expense 3,600
Total $ 245,300 $245,300
b) Mortgage Interest Expense = $60,000 * 8% * 3/12 = $1,200
a. Depreciation on the company's equipment for the year is computed to be $15,000.
b. The Prepaid Insurance account had a $9,000 debit balance at December 31 before adjusting for the costs of any expired coverage. An analysis of the company’s insurance policies showed that $870 of unexpired insurance coverage remains.
c. The Office Supplies account had a $360 debit balance at the beginning of the year; and $2,680 of office supplies were purchased during the year.
d. The December 31 physical count showed $425 of supplies available.
e. One-third of the work related to $15,000 of cash received in advance was performed this period.
f. The Prepaid Rent account had a $5,100 debit balance at December 31 before adjusting for the costs of expired prepaid rent. An analysis of the rental agreement showed that $4,230 of prepaid rent had expired.
g. Wage expenses of $1,000 have been incurred but are not paid as of December 31.
Prepare adjusting journal entries for the year ended (date of) December 31 for each of these separate situations.
Answer: Please see explanation column for answers
Explanation:
a) To record Depreciation on equipments
Date Account title Debit Credit
Dec 31st Depreciation expenses $15,000
Accumulate depreciation $15,000
b) To record insurance expenses
Date Account title Debit Credit
Dec31 Insurance Expenses $8,130
Prepaid insurance $8,130
Calculation
Prepaid Insurance =Prepaid Insurance Debit Balance−Unexpired Insurance Coverage
=$9,000−$870
=$8,130
c)To record office supplies expenses
Date Account title Debit Credit
Dec 31 Office Supplies Expenses $2,615
Office supplies $2,615
Calculation:
Office Supplies=Office Supplies Debit Balance+
Amount of Office Supplies Purchased−
Office Supplies Existing
=$360+$2,680−$425
=$2,615
d)To record Adjustment in unearned revenue
Date Account title Debit Credit
Dec 31 Unearned fee revenue $5,000
Fee revenue $5,000
Fees Revenue=Cash Received For Fees×Portion of Fees Earned
=$15,000 x 1/3= $5,000
e)To record Adjustment in insurance expenses
Date Account title Debit Credit
Dec 31 Insurance expenses $4,230
Prepaid expenses $4,230
f)To record wages payable
Date Account title Debit Credit
Dec 31 Wages expenses $1,000
Wages Payable $1,000
Greet the customer and thank them for contacting our company
2. Let the customer know their order has been delayed, as caused by a severe blizzard on the East coast.
3. Express sympathy for the inconvenience caused.
4. Let them know that they can call customer support 8a - 8p EST, Mon - Fri: 555-555-5555
5. Sign off
Answer:
ok
Explanation:
The following information has been taken from the ledger accounts of Bridgeport Corporation.
Total income since incorporation $292,000
Total cash dividends paid 55,000
Total value of stock dividends distributed 31,000
Gains on treasury stock transactions 16,000
Unamortized discount on bonds payable 29,000
Determine the current balance of retained earnings.
Answer:current balance of retained earnings=$206,000
Explanation:
Net Retained Earnings = Total Income since Incorporation−
Total Cash Dividend Paid− Value of Stock Dividend distributed
Where
cash dividends distributed among the stakeholders= $55,000
value of stock dividends distributed = $31,000
Total Dividend Distributed = $86,000
Net Retained Earnings = $292,000 -($86,000)=$206,000
PayPal is an example of which of the following?
regionally based currency
traditional currency
cryptocurrency
mobile commerce
Answer:
mobile commerce is the answer
The correct option is D. PyPal is an example of mobile commerce.
A mobile eCommerce platform offers specific mobile features including loyalty cards, money transfers, deliveries, and banking in addition to mobile ticketing and coupons.
Why do we need mobile commerce?A customer can obtain a wide range of things delivered to their door by using M-commerce. They even receive several offers and discounts. Additionally, a variety of payment options like UPI, debit and credit cards, and cash on delivery make it simpler and more practical for users.
A safe and secure way to send and receive money online is through the use of PyPal. You can use PyPal to make online purchases from participating stores when you link your bank account, credit card, or debit card to your PyPal account.
Thus, D is the right answer. Mobile commerce is exemplified by PyPal.
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In a competitive bid, Multiple Choice the terms of sale are offered by the supplier in response to the purchase specifications posted by a buyer. long-term suppliers of a firm compete to do business with the firm to increase flexibility and spur innovation. if different suppliers’ quality, dependability, and delivery schedules all meet the buyer’s specifications, the buyer will select the high-price bid. the terms of sale are offered by a buyer after product specifications are posted by the seller. as the number of suppliers competing for the business increases, the ability to drive down prices or provide beneficial terms of sale is lost.
Answer:
the terms of sale are offered by the supplier in response to the purchase specifications posted by a buyer.
Explanation:
Competitive bid is when an entity that wants to buy a product or service requests for proposals from suppliers stating how well they meet the requirements of the buyer.
Suppliers also state the price at which the product or service can be delivered.
Buyers review the bids and choose the one that is best for at the lowest price.
A competitive bid is a transparent process where all the most qualified suppliers are chosen to execute a project.
The performance history of suppliers may also be used when buyer is deciding on the best fit.
The controller for Tulsa Medical Supply Company has established the following activity cost pools and cost drivers.
Activity Cost Pool Budgeted Overhead Cost Cost Driver Budgeted Level for Cost Driver Pool Rate
Machine setups $ 250,000 Number of setups 125 $ 2,000 per setup
Material handling 75,000 Weight of raw material 37,500 lb. $2 per pound
Hazardous waste control 25,000 Weight of hazardous chemicals used 5,000 lb. $ 5 per pound
Quality control 75,000 Number of inspections 1,000 $ 75 per inspection
Other overhead costs 200,000 Machine hours 20,000 $ 10 per machine hour
Total $ 625,000
Required:
1. Calculate the unit cost of a production order for 100 specially coated plates used in cancer testing. In addition to direct material costing $120 per plate and direct labor costing $40 per plate, the order requires the following: (Round intermediate calculations and final answer to 2 decimal places.)
Machine setups 3
Raw material 900 pounds
Hazardous materials 300 pounds
Inspections 3
Machine hours 50
Answer:
Tulsa Medical Supply Company
1. Calculation of the unit cost of a production order for 100 specially coated plates used in cancer testing:
Direct materials $120 * 100 plates = $12,000
Direct labor 40 * 100 plates = 4,000
Overhead:
Machine setups $2,000 * 3 setups $6,000
Material handling $2 * 900 pounds 1,800
Hazardous control $5 * 300 pounds 1,500
Quality control $75 * 3 inspections 225
Other overheads $10 * 50 machine hours 500
Total overheads applied $10,025
Total manufacturing cost for 100 plates $26,025
Unit cost = $26,025/100 = $260.25 per plate
Explanation:
a) Data and Calculations:
Activity Cost Pool Budgeted Cost Driver Budgeted Level for
Overhead Cost Cost Driver Pool Rate
Machine setups $ 250,000 Number of setups 125 $ 2,000 per setup
Material handling 75,000 Weight of raw material 37,500 lb. $2 per pound
Hazardous waste control 25,000 Weight of hazardous chemicals used 5,000 lb. $ 5 per pound
Quality control 75,000 Number of inspections 1,000 $ 75 per inspection
Other overhead costs 200,000 Machine hours 20,000 $ 10 per machine hour
Total $ 625,000
Computing unit and inventory costs under absorption costing LO P1 Trio Company reports the following information for the current year, which is its first year of operations.
Direct materials $15 per unit
Direct labor $16 per unit
Overhead costs for the year
Variable overhead $80,000 per year
Fixed overhead $160,000 per year
Units produced this year 20,000 units
Units sold this year 14,000 units
Ending finished goods inventory
in units 6,000 units
1. Compute the cost per unit using absorption costing
Cost per unit of finished goods using: Absorption costing
Cost per unit of finished goods
2. Determine the cost of ending finished goods inventory using absorption costing.
Cost per unit of finished goods using: Absorption costing
Number of units in finished goods
Total cost of finished goods inventory
3. Determine the cost of goods sold using absorption costing
Cost per unit of goods sold using: Absorption costing
Number of units in sold goods
Total cost of sold goods
Answer:
a. $43
b. $258,000
c. $602,000
Explanation:
Variable overhead per unit = Variable overhead / Units produced this year
Variable overhead per unit = $80,000 / 20,000
Variable overhead per unit = $4
Fixed overhead per unit = Fixed overhead / Units produced this year
Fixed overhead per unit = $160,000/ 20,000
Fixed overhead per unit = $8
a. Cost per unit of finished goods using Absorption costing
Direct material per unit $15
Direct labor per unit $16
Variable overhead per unit $4
Fixed overhead per unit $8
Cost per unit of finished goods $43
b. Number of units in finished goods = 6,000
Total cost of finished goods inventor = $43 * 6,000 units = $258,000
c. Number of units in sold goods 14,000
Total cost of finished goods inventory = $43 * 14,000 units = $602,000
1. What recommendations would you make to Jim to help him improve the financial
performance of Wave Riders in the future? Prepare a memo to Jim outlining your
recommendations, making certain to include your reasons for the recommendation
(i.e. ratio analysis and/or comparisons to industry ratios
Answer:
Hello your question is incomplete below is the complete question
Jim Connor is the owner of Wave Riders, a surf shop located in West Palm Beach, Florida. Jim has just received his end of the year financial statements from his accountant. When he sees his gross and net income he is dismayed. With almost $250,000 in gross profit he just doesn’t understand why he is always short on cash to pay his employees and suppliers. One of his largest suppliers of surf boards notified him just last month that they would no longer extend him credit and he would have to pre-pay all of his orders. He puts a call into his accountant to set up a meeting with her to discuss the financial health of his business
Average inventory turnover ratio : Wave riders = 2.5 , Industry = 6.85 ( as calculated )
answer: The recommendations that should be made to Jim to help him improve the company's financial performance is, Jim should work on selling off his old inventories before ordering more
Explanation:
The recommendations that should be made to Jim to help him improve the company's financial performance is, Jim should work on selling off his old inventories before ordering more, this is because The Average inventory turnover ratio for Waveriders is lower than the Industry's Average inventory turnover ratio. and this is caused by inadequate inventory management ( overstocking or low sales ) and this is affecting The financials of Waveriders
As per the recommendations that are made to Jim inorder to improve his performance he should work on selling his old inventories.
What are inventories?Inventories are the stocks that refer to goods and materials that businesses hold for the ultimate goals of resales, production, and utilization.
The recommendations that need to be made to Jim are that he should first sell the old inventories before taking the new ones.
Per average inventory turnover the ratio for the Waveriders is lower than the Industry's Average inventory turnover ratio.
Find out more information about the financial performance.
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Sheffield Corporation had income from continuing operations of $10,745,300 in 2020. During 2020, it disposed of its restaurant division at an after-tax loss of $198,600. Prior to disposal, the division operated at a loss of $317,300 (net of tax) in 2020 (assume that the disposal of the restaurant division meets the criteria for recognition as a discontinued operation). Sheffield had 10,000,000 shares of common stock outstanding during 2020. Prepare a partial income statement for Sheffield beginning with income from continuing operations.
Answer: Please see explanation column for answers
Explanation:
Partial income statement for Sheffield Corporation
Income from continuing operations $10,745,300
Discontinued operations:
Loss from operation of discontinued $317,300
restaurant division, net of tax
Loss of disposal of restaurant division, $198,600
net of tax
Total of the losses $515,900
Net income $10,229,400
(Income from continuing operations -Losses from Discontinued operations)
Earnings per share
Income from continuing operations $10,745,300/10,000,000 shares
=$1.07453
Discontinued operations $515,900 /10,000,000 shares
=$0.05159
Earnings per share of net income ($1.07453-$0.05159) =$1.02294≈$1.02
Net Income for Sheffield Corporation is $10,229,400 with Earnings per share $1.02
Crystal Company produces a single product. The company's variable costing income statement for the month of May appears below:
Sales ($10 per unit) $900,000
Variable Expenses:
Variable Cost of Goods Sold 450,000
Variable Selling Expenses 90,000
Total Variable Expenses 540,000
Contribution Margin 360,000
Fixed Expenses:
Fixed Manufacturing Overhead 240,000
Fixed Selling & Administrative 90,000
Total Fixed Expenses 330,000
Net Operating Income $30,000
The company produced 80,000 units in May and the beginning inventory consisted of 25,000 units. Variable production costs per unit and total fixed costs have remained constant over the past several months.
Under absorption costing, for the month ended May 31, the company would report a:_______.
Answer:
10
Explanation:
upine Corporation uses a job-order costing system with a single plantwide predetermined overhead rate based on machine-hours. The company based its predetermined overhead rate for the current year on the following data: Total machine-hours 32,700 Total fixed manufacturing overhead cost $ 294,300 Variable manufacturing overhead per machine-hour $ 2.00 Recently, Job L716 was completed with the following characteristics: Number of units in the job 10 Total machine-hours 20 Direct materials $ 545 Direct labor cost $ 1,090 The amount of overhead applied to Job L716 is closest to: (Round your intermediate calculations to 2 decimal places.)
Answer:
Total overhead applied = $220
Explanation:
Total variable overhead estimated = Variable manufacturing overhead per machine-hour * Total machine-hours
Total variable overhead estimated = ($2 * 32,700)
= $65,400
Total overhead estimated = Total variable overhead estimated + Total fixed overhead estimated
Total overhead estimated = $65,400 + $294,300
Total overhead estimated = $359,700
Predetermined overhead rate = Total overhead estimated / Total machine hours
= $359,700 / 32,700
=$ 11 per machine hour
Hence, the total overhead applied = Predetermined overhead rate * Total machine hours L716
Total overhead applied = ($11 * 20)
Total overhead applied = $220
The most recent financial statements for Alexander Co. are shown here: Income Statement Balance Sheet Sales $45,000 Current assets $70,470 Long-term debt $48,600 Costs 28,800 Fixed assets 38,880 Equity 60,750 Taxable income $16,200 Total $109,350 Total $109,350 Taxes (23%) 3,726 Net income $12,474 Assets and costs are proportional to sales. The company maintains a constant 28 percent dividend payout ratio and a constant debt-equity ratio. What is the maximum increase in sales that can be sustained assuming no new equity is issued
Answer:
$7,808
Explanation:
Calculation for the maximum increase in sales that can be sustained assuming no new equity is issued
First step is to calculate for the return on equity using this formula
Return On Equity = Net income / Equity
Let plug in the formula
Return On Equity=$12,474 / $60,750
Return On Equity= 20.53%
Second step is to find the retention ratio using this formula
Retention ratio= 1 - Dividend payout ratio
Let plug in the formula
Retention ratio= 1 - 0.28
Retention ratio= 0.72
Third step is to find the sustainable growth rate using this formula
Sustainable growth rate= (ROE × b) / [1 - (ROE × b)]
Let plug in the formula
Sustainable growth rate= ( 0.2053x 0.72 ) / [ 1 - ( 0.2053x 0.72 ) ]
Sustainable growth rate=0.147816/1-0.147816
Sustainable growth rate= 0.147816/0.852184
Sustainable growth rate=17.35%
Therefore the maximum dollar increase in sales is
Maximum dollar increase= $ 45,000 x 0.1735
Maximum dollar increase= $7,808 Approximately
Therefore the maximum dollar increase in sales will be $7,808
Note:28%-100% will give us 72%
John Budd is the sole shareholder of Ral Corp., an accrual-basis taxpayer engaged in wholesaling operations. Ral’s retained earnings at January 1, 2020, amounted to $1 million. For the year ended December 31, 2020, Ral’s book income, before federal income tax, was $300,000. Included in the computation of this $300,000 was the following: On 12/1/20, Ral received prepaid rent of $27,000 from a tenant for a 3-year lease commencing 1/1/21 to cover rents for the years 2021, 2022, and 2023. In conformity with GAAP, Ral did not include any part of this rental in its income statement for the year ended 12/31/20. What amount should Ral include in its 2020 taxable income for rent revenue?
Answer: $27,000
Explanation:
Even though for GAAP reasons, revenue is to be recognized only when earned as per the Accrual principle of accounting, this is not so for the calculation of taxable income.
Taxable income is to be calculated on cash basis which means that taxes are to be paid on revenue when the revenue is received in cash and not when it is earned.
As Ral Corp. received the money in 2020, they are to include the entire amount of $27,000 in their 2020 taxable income for rent revenue.
Which of the following are characteristics of a perpetuity? A. A perpetuity is a stream of regularly timed, equal cash flows that continues forever.B. A perpetuity is a stream of unequal cash flows.C. The value of a perpetuity cannot be determined.D. The current value of a perpetuity is based more on the discounted value of its nearer (in time) cash flows and less by the discounted value of its more distance (in the future) cash flows.
Answer:
A. A perpetuity is a stream of regularly timed, equal cash flows that continue forever
D. The current value of a perpetuity is based more on the discounted value of its nearer (in time) cash flows and less by the discounted value of its more distance (in the future) cash flows.
Explanation:
First, we need to note that perpetuity is a term used in finance to refer to any continuous periodic payments of equal face value. In other words, the payments last forever.
Part of the characteristics of perpetuity is that the payments are of equal cash value and the current value of a perpetuity is based more on the discounted value of its nearer (in time) cash flows rather than by the discounted value of its more distance (in the future) cash flow.
Nuthatch Corporation began its operations on September 1 of the current year. Budgeted sales for the first three months of business—September, October, and November—are $260,000, $375,000, and $400,000, respectively. The company expects to sell 30% of its merchandise for cash. Of sales on account, 80% are expected to be collected in the month of the sale and 20% in the month following the sale. The cash collections expected in October from accounts receivable are estimated to be Group of answer choices
Answer:
Total cash collection= $246,400
Explanation:
Giving the following information:
Sales:
September= $260,000
October= $375,000
The company expects to sell 30% of its merchandise for cash.
Of sales on account, 80% are expected to be collected in the month of the sale and 20% in the month following the sale.
Cash collection October:
Sales on account October= (375,000*0.7)*0.8= 210,000
Sales on account Septembre= (260,000*0.7)*0.2= 36,400
Total cash collection= $246,400
Temporary Housing Services Incorporated (THSI) is considering a project that involves setting up a temporary housing facility in an area recently damaged by a hurricane. THSI will lease space in this facility to various agencies and groups providing relief services to the area. THSI estimates that this project will initially cost $5 million to setup and will generate $20 million in revenues during its first and only year in operation (paid in one year). Operating expenses are expected to total $12 million during this year and depreciation expense will be another $3 million. THSI will require no working capital for this investment. THSI's marginal tax rate is 35%. Ignoring the original investment of $5 million, what is THSI's free cash flow for the first and only year of operation
Answer:
$6.25 million
Explanation:
Calculation for free cash flow
Using this formula
Free Cash Flow = (Revenues - Expenses-Depreciation) × (1–Tax rate) + Depreciation
Let plug in the formula
Free Cash Flow= ($20 million - $12 million - $3 million ) × (1–0.35) + $3 million
Free Cash Flow=($5 million*0.65)+$3 million
Free Cash Flow=$3.25million+$3 million
Free Cash Flow=$6.25 million
Therefore free cash flow for the first and only year of operation wiill be $6.25 million
You are the store manager at a large furniture store, FurnitureLand. One of your products is a study desk. The demand for study desks is relatively steady and inventory replenishments are ordered from the assembly plant whenever the quantity drops to the reorder level. The lead time from the assembly plant to your store is two weeks, and the ordering cost is $500. Weekly demand for the desk is normally distributed with mean of 50and a standard deviation of 10. Your internal cost of capital is 15 percent per yearand each desk costs $200. (Assume there are 52 weeks in oneyear).(a)Suppose you want to target a 98 percent service level. What should the safety stock and reorder point be
Answer:
safety stock = 33 desks
reorder point = 133 desks
Explanation:
safety stock = (Z-score x √lead time x standard deviation of demand) + (Z-score x standard deviation of lead time x average demand)
Z-score for 98% confidence level = 2.326 standard deviation of demand = 10 √lead time = √2 = 1.414we are not given any standard deviation of lead time, so we can assume that it is 0safety stock = (2.326 x 1.414 x 10) + (2.326 x 0 x 50) = 32.89 ≈ 33 desks
reorder point = lead time demand + safety stock = (50 x 2) + 33 = 133
5. Dan was suspected by customs and immigration officers of having
information concerning the smuggling of drugs into the United States.
Acting undercover, a customs and immigration official went to Dan
and suggested that he bring illegal drugs into this country. Dan
refused, but at the official's insistence he later agreed. After the drugs
entered this country, Dan was arrested. Does Dan have a valid defense
to the charge of smuggling? Explain.
Answer:
No one can have a valid defense when there is no proof, the undercover officers could not blame someone without proof (evidence he was smuggling drugs) but dan may have a valid defense if they dont find any evidence
Hope this helps <3
Intask Corporation uses the FIFO method in its process costing system. Beginning inventory in the mixing department consisted of 6,000 units that were 75% complete with respect to conversion costs. Ending work in process inventory consisted of 5,000 units that were 60% complete with respect to conversion costs. If 12,000 units were transferred to the next processing department during the period, the equivalent units of production for conversion cost would be:
Answer:
$10,500 units
Explanation:
Calculation of equivalent units of production for conversion cost
First step is to find the Units started and completed during the period using this formula
Units started and completed during the period = Units transferred to the next processing department- Beginning inventory in the mixing department units
Let plug in the formula
Units started and completed during the period = = 12,000 - 6,000
Units started and completed during the period = = 6,000
Second step is to find the Equivalent units of production
Equivalent units of production=6,000 * 25% + 6,000*100% + 5,000*60%
Equivalent units of production=1,500+6,000+3,000
Equivalent units of production=10,500 units
Therefore the equivalent units of production for conversion cost will be $10,500 units
An appliance company has two warehouses and two retail outlets. Warehouse A has 400 refrigerators and warehouse B has 300 refrigerators. Outlet I needs 200 refrigerators, and outlet II needs 300 refrigerators. It cost $36 to ship a refrigerator from warehouse A to outlet I and $30 to ship a refrigerator from warehouse A to outlet II. It costs $30 to ship a refrigerator from warehouse B to outlet I and $25 to ship a refrigerator from warehouse B to outlet II. How should the company ship the refrigerators to minimize the cost
Answer:
Warehouse B:
ship 200 refrigerators to outlet 1ship 100 refrigerators to outlet 2Warehouse A:
ship 200 refrigerators to outlet 2Explanation:
Outlet 1 Outlet 2 Availability
Warehouse A 36 30 400
Warehouse B 30 25 300
Requirements 200 300
You should ship 200 refrigerators from warehouse B to outlet 1, total distribution costs = 200 x $30 = $6,000
You should ship 100 refrigerators from warehouse B to outlet 2, and 200 refrigerators from warehouse A to outlet 2, total distribution costs = (100 x $25) + (200 x $30) = $8,500
total distribution costs = $14,500
The difference in distribution costs from warehouses to outlet 1 is $6, and the difference in distribution costs from warehouses to outlet 2 is $5, so you should send all the refrigerators from warehouse B to outlet 1 to incur in the lowest possible cost.
