Answer:
Adjusting Journal Entries:
a. Debit Wages Expense $10,000
Credit Wages Payable $10,000
To record unpaid wages as of December 31.
b. Debit Depreciation Expense - Equipment $10,600
Credit Accumulated Depreciation - Equipment $10,600
To record depreciation expense for the year.
c. Debit Supplies Expense $5,066
Credit Supplies $5,066
To record the supplies expense for the year.
d. Debit Insurance Expense $3,400
Credit Prepaid Insurance $3,400
To record the insurance expense for the year.
e. Debit Interest Revenue Receivable $900
Credit Interest Revenue $900
To record earned interest receivable.
f. Debit Interest Expense $5,000
Credit Interest Expense Payable $5,000
To record interest on bank loan incurred.
Explanation:
The above adjusting entries are made in order to ensure that transactions are recorded in accordance with the accrual concept and matching principle of generally accepted accounting principles. These require that expenses and revenues are accrued to the period that they are incurred or earned and not when they are paid or received in cash.
Which of the following is an example of offshoring? Treat Corp. is a food and beverage manufacturer based in Texas. It decided to move from Houston to Fort Worth in Texas to cut production costs. The IT support services for customers of Mayfair Inc., a U.S. based consumer electronics manufacturer, are based in India. Lin, a Chinese citizen, decides to move to the U.K. after her application for scholarship is accepted by a leading university in London. Fahad, a resident of the UAE, can share his views—data and information—about the country's construction industry with his friends in the U.S. 2.5 points Save Answer QUESTION 21
Answer: The IT support services for customers of Mayfair Inc., a U.S. based consumer electronics manufacturer, are based in India.
Explanation:
Offshoring is when the operations of business is being outsource to another country in order to minimize cost and also benefit from economies of scale.
From the explanation of what offshoring means, we can see that the option "The IT support services for customers of Mayfair Inc., a U.S. based consumer electronics manufacturer, are based in India". qualifies as the best option.
From here, we can see that the IT support services is situated in another country. This may be as a result of wanting to take advantage of cheaper production cost or economies of scale.
Your job pays you only once a year for all the work you did over the previous 12 months. Today, December 31, you just received your salary of $53,000 and you plan to spend all of it. However, you want to start saving for retirement beginning next year. You have decided that one year from today you will begin depositing 3 percent of your annual salary in an account that will earn 10 percent per year. Your salary will increase at 4 percent per year throughout your career. Required: How much money will you have on the date of your retirement 35 years from today?
Answer:
The amount of money you will have on the date of your retirement 35 years from today is $640,143.22.
Explanation:
This can be determined using the formula for calculating the future value of growing annuity as follows:
FV = M * (((1 + r)^n - (1 + g)^n) / (r - g)) ...................................... (1)
Where
FV = Amount on the date of retirement = ?
M = Annual deposit = Annual salary * Deposit percentage = $53,000 * 3% = $1,590
r = annual interest rate = 10%, or 0.1
g = salary growth rate = 4%, or 0.04
n = number of years = 35 years
Substituting all the values into equation (1), we have:
FV = $1,590 * (((1 + 0.1)^35 - (1 + 0.04)^35) / (0.1 - 0.04))
FV = $1,590 * ((1.1^35 - 1.04^35) / 0.06)
FV = $1,590 * ((28.1024368480643 - 3.94608899421194) / 0.06)
FV = $1,590 * (24.1563478538524 / 0.06)
FV = $1,590 * 402.605797564207
FV = $640,143.22
Therefore, the amount of money you will have on the date of your retirement 35 years from today is $640,143.22.
Leaders must have the ability to communicate new ideas.
O True
O False
Answer: true
Explanation:
Record each transaction in the journal, using the following account titles: Cash; Accounts Receivable; Office Supplies; Prepaid Insurance; Land; Building; Furniture; Accounts Payable; Utilities Payable; Notes Payable; Common Stock; Dividends; Service Revenue; Salaries Expense; Rent Expense; and Utilities Expense. Explanations are not required. (Record debits first, then credits. Exclude explanations from journal entries.) Jan. 1: Murphy contributed $78,000 cash to the business, Terrence Murphy, Attorney. The business issued common stock to Murphy.
Answer and Explanation:
The journal entry is shown below:
Cash Dr $78,000
To Common stock $78,000
(Being the common stock is issued)
According to the given situation, the journal entry for issuance of the stock is presented above and the same is to be considered. The cash account is debited and shown on the debit side while the common stock is credited and the same shown on the credit side
When recording transactions into the accounting equation, which of the following statements are correct? (Check all that apply.) Multiple select question. After recording the transaction, total assets will always equal total liabilities plus equity. The accounting equation must always remain in balance. Cash must always equal Equity. Expenses are listed on the right side of the accounting equation and will increase the equity account.
Answer:
The correct answers are the following options:
After recording the transaction, total assets will always equal total liabilities plus equity.
The accounting equation must always remain in balance
Explanation:
To begin with, the name of "Accounting Equation" is famously known in the business field due to the fact that it is a concept from the accountant of companies and in fact a very important one. The accounting equation represents the sum between the equity and the debts of the company that will always give the total assets of the company. It is considered to be the foundation of the double-entry accounting system, so that is why it is so important. Moreover, under its doctrine, it proves that the balance sheet must always remain balance.
The statements that is correct about recording of transactions into the accounting equation are;
After recording the transaction, total assets will always equal total liabilities plus equity.The accounting equation must always remain in balance.In accounting, accounting equation is very important inoder to calculate the profits of the organization.
We can conclude that total assets will always equal total liabilities plus equity. when using accounting equation.
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Campbell Corporation, an accrual basis calendar year corporation, had income of $450,000 for financial statement purposes in year 7. This amount included book depreciation of $50,000. The related tax depreciation was $65,000. Further, the financial statements reported $100,000 of municipal bond interest income, an expense of $2,000 for life insurance premiums on the corporation's president, charitable contributions of $5,000, excess capital losses over capital gains of $3,000, income tax penalties of $10,000, state income tax of $40,000, and Federal income tax expense of $175,000. What is the amount of Campbell's taxable income for year 7
Answer:
The amount of Campbell's taxable income for year 7 is $525,000
Explanation:
Accrual basis income $450,000
Less: Excess depreciation as per ($15,000)
tax purpose ($65,000 - $50,000)
Less: Interest income ($100,000)
Add: Federal income tax expense $175,000
Add: Excess capital loss over capital gain $3,000
Add: LIC on corporation president $2,000
Add: Income tax penalties (not allowed) $10,000
Taxable Income $525,000
Suppose that Xtel currently is selling at $66 per share. You buy 500 shares using $20,000 of your own money, borrowing the remainder of the purchase price from your broker. The rate on the margin loan is 6%. a. What is the percentage increase in the net worth of your brokerage account if the price of Xtel immediately changes to: (i) $69.63; (ii) $66; (iii) $62.37? What is the relationship between your percentage return and the percentage change in the price of Xtel?
Answer:
The percentage loss will be "-9.08%". The further explanation is given below.
Explanation:
The given values are:
Invested amount
= 20,000
Price of purchase
= $66
Total number of shares
= 500
The borrowed amount will be:
= [tex](500\times 66)-20000[/tex]
= [tex]13,000[/tex]
When the price increase to 69.63, the gain will be:
= [tex]69.63-66[/tex]
= [tex]3.63[/tex] ($)
The total gain will be:
= [tex]3.63\times 500[/tex]
= [tex]1815[/tex]
Increase in percentage will be:
= [tex]\frac{1815}{20,000}\times 100[/tex]
= [tex]9.08[/tex]%
Whereas if price stays quite well at $66, there is really no increase, so the percentage growth would be 0%.
If the price declines toward a loss of 62,37 per share:
= [tex]62.37-66[/tex]
= [tex]-3.63[/tex]
Now,
The total loss will be:
= [tex]-3.63\times 500[/tex]
= [tex]-1815[/tex]
The percentage loss will be:
= [tex]\frac{-1815}{15,000}[/tex]
= [tex]-9.08[/tex] (%)
Least-Squares Regression [LO5-11] [The following information applies to the questions displayed below.] Bargain Rental Car offers rental cars in an off-airport location near a major tourist destination in California. Management would like to better understand the variable and fixed portions of its car washing costs. The company operates its own car wash facility in which each rental car that is returned is thoroughly cleaned before being released for rental to another customer. Management believes that the variable portion of its car washing costs relates to the number of rental returns. Accordingly, the following data have been compiled:
Month Rental Returns Car Wash Costs
January 2,400 $ 11,000
February 2,500 $ 13,100
March 2,700 $ 11,800
April 3,000 $ 14,300
May 3,600 $ 16,200
June 5,000 $ 23,300
July 5,500 $ 22,200
August 5,500 $ 22,200
September 4,700 $ 22,800
October 4,000 $ 21,100
November 2,200 $ 10,700
December 2,800 $ 14,200
Using least-squares regression, estimate the variable cost per rental return and the monthly fixed cost incurred to wash cars. (Round Fixed cost to the nearest whole dollar amount and the Variable cost per unit to 2 decimal places.)
Answer:
I used an excel spreadsheet to calculate this:
the least squares regression line:
y = a + bx
y = $2,752 + 3.87x
where y = total cash wash costs and x = rental returns
fixed costs = $2,752 per month
variable cost = $3.87 per car washed
You have been working at Saxet Consulting for the past year and are expected to complete three client reviews per week. You have been very productive and have been completing two extra reviews per week. At a recent team meeting, you expected to receive praise from the President for this extra work; however, your manager took credit for the extra work and received the praise from the President. What has your manager violated and what is your likely reaction
Explanation:
In this situation, you can perceive an unethical attitude from your manager, because he has taken credit for the extra work done by you before the president of the company.
So in this situation, it is ideal to have a dialogue between you and your manager in order to clarify the situation that has occurred. Because many managers can act dishonestly with their subordinates because many feel cornered to question the manager's attitudes for fear of reprisals.
It is also ideal that there is support from the rest of the team for a collaborator who is truly unfair because of a situation of abuse of authority, because this way bad behaviors are inhibited and an organizational climate is created, focused on transparency and ethical behaviors.
Consider the changes that have occurred in a comparatively new industry (e.g., wireless telecommunications, smartphones, video game consoles, online brokerage services, and fitness clubs). Then, address the following questions: • To what extent has the evolution of the industry followed the pattern predicted by the industry life-cycle model? • What do the features of the industry have that have influenced its pattern of evolution? • At what stage of development is the industry today? How is the industry likely to evolve in the future?
Explanation:
Let's take for example the smartphone industry.
This industry started off following the year 2000, with the first smartphone brand like BlackBerry, Windows phone, and eventually the iPhone which was first released in 2007.
According to the industry life-cycle model:
Introduction stage: began with earlier smartphone brands like Blackberry released with introductory features like wireless mobile internet, mobile email access.
Growth stage: became evident with a rapid increase in demand adoption for smartphones.
The maturity stage: which is still present today has resulted in an increase in the number of smartphone manufacturers today. Industry expert predicts a decline in the years to come for this industry.
Part of the features of the smartphone industry that have influenced its pattern of evolution has been:
Constant innovation; something that draws the interest of young people.
Today, there are plans to achieve wide-scale and affordable foldable smartphones in the future; and who knows, it may evolve into flying smartphones.
The brief description of the industry life-cycle model using telecommunications as a sample:
There have been innovations with wireless technology in smartphones as they were improved to perform more tasks, seamlessly. Industry life-cycle modelThis refers to the various stages through which a model goes through and they include:
Introduction stageGrowth stageMaturity stageThe stage of development which the industry is today is the growth stage as more innovations are made to improve the model.
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Income Statement (in Millions of Dollars) Net sales $100.0 Cost of sales 60.0 Selling, general, and administrative expenses 20.0 Other expenses 15.0 Earnings after tax $ 5.0 a. Determine the length of the inventory conversion period. b. Determine the length of the receivables conversion period. •c. Determine the length of the operating cycle. d. Determine the length of the payables deferral period. •e. Determine the length of the cash conversion cycle. f. What is the meaning of the number you calculated in Part e?
Answer:
the balance sheet is missing:
Balance Sheet (In millions of Dollars)
ASSETS
Cash $6.0
Accounts Receivable 14.0
Average Inventory 12.0
Fixed Assets, net 40.0
TOTAL ASSETS $72.0
LIABILITIES AND EQUITY
Accounts Payable $10.0
Salaries and Benefits Payable 2.0
Other current Liabilities 10.0
Long-term debt 12.0
Equity 38.0
TOTAL LIABILITIES AND EQUITY $72.0
a. Determine the length of the inventory conversion period.
inventory conversion period = average inventory / (COGS/365) = 73 daysb. Determine the length of the receivables conversion period.
receivables conversion period = accounts receivables / (net sales/365) = 51.1 daysc. Determine the length of the operating cycle.
length of operating cycle = 73 + 51.1 = 124.1 daysd. Determine the length of the payables deferral period.
length of the payables deferral period = accounts payables / (COGS/365) = 60.83 dayse. Determine the length of the cash conversion cycle.
cash conversion cycle = 73 + 51.1 - 60.83 = 63.27 daysf. What is the meaning of the number you calculated in Part e?
How long does it take to turn inventories into cash, it is a measure of asset liquidity.Byron Books Inc. recently reported $13 million of net income. Its EBIT was $20.8 million, and its tax rate was 35%. What was its interest expense? (Hint: Write out the headings for an income statement, and fill in the known values. Then divide $13 million of net income by to find the pretax income. The difference between EBIT and taxable income must be interest expense. Use this same procedure to complete similar problems.)
Answer:
Interest expense = $800,000
Explanation:
Given:
Net income = $13,000,000
EBIT = $20,800,000
Tax rate = 35% = 0.35
Find:
Interest expense
Computation:
Net income= (EBIT - Interest expense) × ( 1-tax rate)
$13,000,000 = [$20,800,000 - Interest expense][1-0.35]
20,000,000 = [$20,800,000 - Interest expense]
Interest expense = $800,000
Which of the following is a transfer of a case from a lower to a higher level of court?
O Judgment
O Trial
O Breach
O Appeal
Answer:
D.) Appeal
Explanation:
This is what it's called when a judge sends a case to a higher court for a new hearing.
The appeal is a transfer of a case from a lower to a higher level of court. Thus, option D is correct.
What is a court?A court is any individual or body, frequently a government agency, that has the power to decide legal conflicts and administer justice in civil, economic, and regulatory cases in conformance with the law.
If a particular individual or an entity wants k should be heard from a lower court to the higher court. They need to make an appeal for the same after their appeal is accepted their case would be transferred.
An appeal is generally made when an entity has lost a case in a lower court and wants to go for a trial again. Then that trial will be done in a higher level of court and they make the decision. Therefore, option D is the correct option.
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which presentation is effective individual presentation or group presentation??
Answer:
group presentation
Explanation
You are trying to estimate the value of a property that you are interested in buying. The subject property is located at 322 Rock Creek Road in a new suburb at a large metropolitan area. The property is like many others in the area, With three bathrooms, a living room, a den, a large kitchen, and a two car garage. the residence has about 1,800 square feet of air conditioned space and is of traditional design. The property is located on an interior lot with no potential flooding problems. The quiality of construction appears to be about average for the market. The property being purchased was built within the past two years. Three properties ave been chosen as comparable and they also were constructed within the past two years. Comparable properties in the area have the following characteristics:
Comparable I Comparable II Comparable III
Address 123 Clay St. 301 Cherry Lane 119 Avenue X
Sale Price $ 85,000 $ 79,000 $ 75,000
Time of Sale 6 Months ago 7 Months ago 13 Months ago
Design Modern Traditional Traditional
Parking 2-Car Garage 2-Car Garage 1-Car Garage
Location Corner lot Interior Lot Interior Lot
Drainage Good Bellow Average Good
Bedrooms Four Three Two
Baths Two Two Two
Construction Average Average Bellow Average
You have to come to conclusions concerning hat you believe the different attributes f the comparable properties are likely to be worth in the market area. Appreciation in house value in the areas has been very low ver the past eight months, and you think that any properties that have sold within hat period would probably not require adjustments or the ime of sale. However, one of the comparable properties sold over a year ago, and you think it will eequire a $1,500 upward adjustment. You also believe that properties in the area because of a slower rate of runoff fter heavy rains. Properties on corner lots generally sell for a premium of about $1,000. House with the fashionable modern design usually bring about $1,000 more than those that have traditional design characteristics. BEcause three-bedroom homes are considered desirable by buyers in the area, an additional fourth bedroom will generally only add about $1,200 in value to a property. However, properties that can only contain only two bedrooms are rather difficult to sell, and often bring $2,000 less than three-bedroom counterparts when they are sold. Most homes in the area have two-car garage, but when properties have a one-car garage, they usually sell for about $800 less. A two-car open carpot generally reduces the value of the property by a similar ammount, or $800. The inferior construction quality exhibited by comparable III should reduce its value by about $1,500.
a. You plan to complate the sales comparison approach to value and assign and estimate of value to the subject property. Give specific reasons for your choice of value.
Answer and Explanation:
As it can be seen that Comparable 2 is the best comparable in the given scenario as it matched the property in five of the attributes i.e. three bathrooms, two car garage, design i.e. traditional, interior lot, and average construction.
So it could be started by considering the comparable II
The Sales value of comparable II $79,000
Add or Less:
Upward adjustment =0
Adjustment for corner lots =(1000)
Adjustment for design =(1000)
Adjustment for bedroom=(2000)
Adjustment for car garage =0
Adjustment for construction quality =1500
Value of property =$76,500
Assume that your aunt sold her house on December 31, and to help close the sale she took a second mortgage in the amount of $20,000 as part of the payment. The mortgage has a quoted (or nominal) interest rate of 6%; it calls for payments every 6 months, beginning on June 30, and is to be amortized over 5 years. Now, 1 year later, your aunt must inform the IRS and the person who bought the house about the interest that was included in the two payments made during the year. (This interest will be income to your aunt and a deduction to the buyer of the house.) To the closest cent, what is the total amount of interest that was paid during the first year? Do not round intermediate calculations. Round your answer to the nearest cent.
Answer:
$1,164.99
Explanation:
nominal interest rate = 6%
effective interest rate = (1 + 6%/2)² - 1 = 6.09%
the semiannual payment = principal / PV annuity factor
principal = 20,000PV annuity factor, 3.045%, 10 periods = 8.510638semiannual payment = $2,350
I prepared an amortization schedule on an excel spreadsheet.
After the first two payments were collected, principal has decreased to $16,464.99, that means that the total interest earned = (2 x $2,350) - ($20,000 - $16,464.99) = $4,700 - $3,535.01 = $1,164.99
n October 28, 2013, Mercedes Company committed to a plan to sell a division that qualified as a component of the entity according to GAAP regarding discontinued operations and was properly classified as held for sale on December 31, 2013, the end of the company's fiscal year. The division's loss from operations for 2013 was $2,000,000. The division's book value and fair value less cost to sell on December 31 were $3,000,000 and $2,500,000, respectively. What before-tax amount(s) should Mercedes report as loss on discontinued operations in its 2013 income statement?
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
It's important for the interviewer to know about your biggest professional accomplishment.
True
or
False
Answer: false
They may not want to know what you have done, like got a wife, or won a award in 3rd grade for highest jump off a swing. If it is job related they may, but probably not.
In 2021, Short Construction began construction work under a four-year contract. The contract price is $2,000,000. Short recognizes revenue over time according to percentage of completion method. The balance sheet shows the following accounts at the end of 2021: A/R of $40,000, Construction in Progress of $200,000, Less: Billings on Construction Contract of $170,000. The income statement shows Income on the contract of $30,000 at the end of 2021. What was the total estimated cost of the project at the end 2021?
Answer:
The appropriated answer will be "$1,700,000".
Explanation:
Revenue understood by completion percentage = Design balance throughout progress = $200,000
The percentage completion throughout the whole year will be:
⇒ [tex]\frac{200,000}{2,000,000 }[/tex]
⇒ [tex]10 \ percent[/tex]
The cost incurred throughout the whole year will be:
⇒ [tex]Revenue \ recognized - Income \ on \ the \ contract[/tex]
⇒ [tex]200,000 - 30,000[/tex]
⇒ [tex]170,000[/tex] ($)
Now,
The total estimated cost of the project at the end the year 2021 will be:
⇒ [tex]\frac{170,000}{10 \ percent}[/tex]
⇒ [tex]1,700,000[/tex] ($)
Which of the following is the best example of correlation not being the same as causation? A. A company redesigns a production process and afterwards it takes less time to produce products. The company concludes that redesigning processes causes production efficiency gains. B. After a poorly performing quarter, a company sends out coupons in the mail and sees an increase in sales. The company concludes that sending coupons causes sales to increase. C. A company pays sales employees more for each sale and each employee starts selling more goods. The company concludes that paying employees more for a sale causes employees to sell more items. D. During an economic downturn, a company changes its computer policy to only allow purchases of windows-based laptops and see profits go down. The company concludes that windows-based laptops cause profits to go
Answer: D. During an economic downturn, a company changes its computer policy to only allow purchases of windows-based laptops and see profits go down. The company concludes that windows-based laptops cause profits to go down
Explanation:
In the other options, the new activity done by the company were definite causes of the effects that followed. A more efficient production process will cause gains in productivity. Coupons will bring in more sales and paying employees more will encourage them to engage in more sales.
Concluding that a computer type causes profits to go down however in a period where the economy as a whole is buying less, is simply correlation. In an economic downturn, people are buying less goods in general. The laptops will be no exception and it is not a reflection of people's preference or lack thereof of them.
Sport Ready produces sport socks. The company has fixed expenses of $110,000 and variable expenses of $1.10 per package. Each package sells for $2.20. The number of packages Sport Ready needed to sell to earn a $24,000 operating income was 121,819 packages (rounded). If Sport Ready can decrease its variable costs to $1.00 per package by increasing its fixed costs to $125,000, how many packages will it have to sell to generate $24,000 of operating income? Is this more or less than before? Why? Review Only LOADING... Click the icon to see the Worked Solution. Begin by identifying the formula to compute the sales in units at various levels of operating income using the contribution margin approach. ( Fixed expenses + Operating income ) / Contribution margin per unit = Sales in units (Round your answer up to the nearest whole unit.) Sport Ready will have to sell 124,167 packages to generate $24,000 of operating income. Is this more or less than before? Why? Sport Ready would have to sell 2,348 more packages of socks to earn $24,000 of operating income. The increase in fixed costs was not completely offset by the decrease in variable costs at the prior target profit volume of sales. Therefore, Sport Ready will need to sell more units in order to achieve its target profit level.
Answer:
current contribution margin = $2.20 - $1.10 = $1.10
total fixed costs = $110,000
break even point = $110,000 / $1.10 = 100,000 units
sales level to earn $24,000 in operating profits = $134,000 / $1.10 = 121,819 units
if fixed costs increase to $125,000
new contribution margin = $2.20 - $1 = $1.20
new break even point = $125,000 / $1.20 = 104,167 units
sales level to earn $24,000 in operating profits = $149,000 / $1.20 = 124,167 units
The increase in contribution margin (9.09%) is not large enough to offset the increase in fixed costs (13.64%), that is why you will need to sell more units in order to make the same operating profits (124,167 - 121,819 = 2,348 units more).
On January 1, 2018, the Accounts Receivable and the Allowance for Doubtful Accounts balances of Kendall Company were $40,000 and $1,500 respectively. During the year 2018, the company reported $80,000 of credit sales, and collected $78,200 cash from receivables. The company also wrote off $500 of receivables as uncollectible in 2018. The company estimates that it will be unable to collect 4% of the year-end accounts receivable balance. Determine the amount of bad debts expense to be recognized in the 2018 income statement
Answer:
Bad Debt Expense = $652
Explanation:
Ending balance [Un-adjusted) = Beginning balance + Credit sales - Cash collected - Written off
Ending balance [Un-adjusted) = $40,000 + $80,000 - $78,200 - $500
Ending balance [Un-adjusted) = $41,300
Allowance For Doubtful Accounts = Beginning balance - Written off
Allowance For Doubtful Accounts = $1,500 - $500
Allowance For Doubtful Accounts = $1,000
Adjusted amount required = $41,300 × 4%
Adjusted amount required = $1,652 Credit
Un-adjusted balance available = $ 1000 Credit
Bad Debt Expense = Adjusted amount required - Un-adjusted balance available
Bad Debt Expense = $1,652 - $1,000
Bad Debt Expense = $652
If Mainway Toy Company declares a 4-for-1 stock split, the price of the company’s stock after the split, assuming that the total value of the firm’s stock remains the same after the split, will be$380.00 Scorecard Athletics Corp. is one of Mainway’s leading competitors. Scorecard’s market intelligence research team shares Mainway’s plans of announcing a stock split, influencing the distribution policy makers. Consequently, executives at Scorecard decide to offer stock dividends to its shareholders. Scorecard currently has 1,900,000 shares of common stock outstanding. If the firm pays a 7% stock dividend, what will be the total number of shares outstanding after the stock dividend?
Answer:
Scorecard Athletics Corp.
The total number of shares outstanding after the stock dividend is:
Explanation:
a) Data:
Common stock outstanding before stock dividend = 1,900,000
Stock dividend paid = 7% = 133,000 (1,900,000 * 7%)
Outstanding stock = Common stock outstanding before stock dividend Plus Stock dividend paid
= 2,033,000 (1,900,000 + 133,000)
Scorecard's stock dividend is a form of dividend that is paid with stock of shares. It is usually given to stockholders as a compensation, especially when the firm does not have enough cash and with the company's shares trading at high prices. Stock dividends increase the number of common stock shares outstanding and the profitability indexes based on this number will decrease accordingly, especially the Earnings Per Share.
This information relates to Sarasota Real Estate Agency.
Oct. 1 Stockholders invest $31,580 in exchange for common stock of the
corporation.
2 Hires an administrative assistant at an annual salary of $33,360.
3 Buys office furniture for $3,650, on account.
6 Sells a house and lot for E. C. Roads; commissions due from Roads,
$11,680 (not paid by Roads at this time).
10 Receives cash of $135 as commission for acting as rental agent renting an
apartment.
27 Pays $610 on account for the office furniture purchased on October 3.
30 Pays the administrative assistant $2,780 in salary for October.
Prepare the debit-credit analysis for each transaction.
Oct. 1 Debits
Debit Cash 31,580
Credits
Credit Common Stock 31,580
Oct. 2 Debits No Effect
Debit No Effect
Credits No Effect
Credit No Effect
Oct. 3 Debits
Debit
Credits
Credit Accounts Payable $3,650
Oct. 6 Debits
Debit Accounts Receivable $11,680
Credits Credit 11,680
Oct. 10 Debits
Debit Cash 135
Credits Credit 135
Oct. 27 Debits
Debit Accounts Payable 610
Credits
Credit Cash 610
Oct. 30 Debits
Debit Salaries and Wages
Expense 2,780
Credits
Credit Cash $2,780
Answer:
Oct 1.
Dr Cash 31,580
Cr Common Stock 31,580
Oct. 2
Dr No entry
Cr No entry
Oct. 3
Dr Office furniture 3,650
Cr Accounts payable 3,650
Oct. 6
Dr Accounts receivable 11,680
Cr Service revenue 11,680
Oct. 10
Dr Cash 135
Cr Service revenue 135
Oct. 27
Dr Accounts payable 610
Cr Cash 610
Oct. 30
Dr Salaries and wages expense 2,780
Cr Cash 2,780
Explanation:
Preparation of the debit-credit analysis for each transaction.
Oct. 1
Debits Increases assets
Debit Cash 31,580
Credits Increases stockholders' equity
Credit Common stock 31,580
Oct. 2
Debits No effect
Debit No effect
Credits No effect
Credit No effect
Oct. 3
Debits Increases assets
Debit Office furniture 3,650
Credits Increases liabilities
Credit Accounts payable 3,650
Oct. 6
Debits Increases assets
Debit Accounts receivable 11,680
Credits Increases retained earnings
Credit Service revenue 11,680
Oct. 10
Debits Increases assets
Debit Cash 135
Credits Increases retained earnings
Credit Service revenue 135
Oct. 27
Debits Decreases liabilities
Debit Accounts payable 610
Credits Decreases assets
Credit Cash 610
Oct. 30
Debits Decreases retained earnings
Debit Salaries and wages expense 2,780
Credits Decreases assets
Credit Cash 2,780
Radford Inc. manufactures a sugar product by a continuous process, involving three production departments-Refining, Sifting, and Packing. Assume that records indicate that direct materials, direct labor, and applied factory overhead for the first department, Refining, were $371,000, $142,000, and $98,400, respectively. Also, work in process in the Refining Department at the beginning of the period totaled $29,200, and work in process at the end of the period totaled $28,400.
Required:
a.
(1) On September 30, journalize the entry to record the flow of costs into the Refining Department during the period for direct materials.
(2) On September 30, journalize the entry to record the flow of costs into the Refining Department during the period for direct labor.
(3) On September 30, journalize the entry to record the flow of costs into the Refining Department during the period for factory overhead.
b. On September 30, journalize the entry to record the transfer of production costs to the second department, Sifting.
CNOW journals do not use lines for spaces or journal explanations. Every line on a journal page is used for debit or credit entries. Do not add explanations or skip a line between journal entries. CNOW journals will automatically indent a credit entry when a credit amount is entered.
Answer: Please see explanation for answers
Explanation:
a(1)Journal Entry To record direct material
Date Accounting titles Debit Credit
Sept 30 Work in process-Refining department $371,000
Materials $371,000
a(2)Journal Entry To record direct labour
Sept 30 Work in process-Refining department $142,000
Wages payable $142,000
a(3)Journal Entry To record overhead applied
Sept 30 Work in process-Refining department $98,400
factory overhead-refining department $98,400
a(4) Journal entry to record transferred goods from refining to sifting
Date Accounting titles Debit Credit
Sept 30 Work in process-Sifting department $612,200
Work in process-Refining department $612,200
Calculation:
Cost of transfer of goods from refining to sifting =Beginning work in process + direct materials+ direct labor +factory overhead - ending working in process
=29,200+371,000+142,000+98,400-28,400 = $612,200
Knowledge Check 01 A company is in its first month of operations. The company pays total salaries to its employees of $600 per day. For the first four weeks of January (28 days), the company paid its employees $16,800 cash. For the final three days in January, employees earn $1,800 in additional salaries that will not be paid until February 4. What adjusting entry would be made at the end of January? Post the adjusting entry for the scenario provided. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field.)
Answer:
Company did not pay employees $1,800 they were supposed to at the end of January which means they owe the employees.
As per the Accrual principle of Accounting, expenses are to be recorded when incurred not when paid so the salaries will be recorded as a liability (salaries payable) that will be settled when the amount is paid.
Jan, 31
DR Salaries Expense.........................................................$1,800
CR Salaries Payable .......................................................................$1,800
Problem 2-14 As operations manager, you are concerned about being able to meet sales requirements in the coming months. You have just been given the following production report: JAN FEB MAR APR Units produced 2,300 1,800 2,800 3,000 Hours per machine 325 200 400 320 Number of machines 3 5 4 4 Find the average of the monthly productivity figures (units per machine hour). (Do not round intermediate calculations. Round your answer to 2 decimal places.) Average productivity units per machine hour HintsReferenceseBook
Answer and Explanation:
For calculating the average of the monthly productivity, first, we have to determine the total hours, and then units per machine hours
Therefore, the formula to figure out the total hours is
= Hours per machine × Number of machines
For JAN = 325 × 3 = 975 hours
For FEB = 200 × 5 = 1,000 hours
For MAR = 400 × 4 = 1,600 hours
For APR = 320 × 4 = 1,280 hours
Now, the units per machine hours equivalent to
= Units produced ÷ total hours
For JAN = 2,300 units ÷ 975 hours = 2.36
For FEB = 1,800 units ÷ 1,000 hours = 1.8
For MAR = 2,800 units ÷ 1,600 hours = 1.75
For APR = 3,000 units ÷ 1,280 hours = 2.34
Now, the average of the monthly productivity equals to
= (2.36 + 1.8 + 1.75 + 2.34) ÷ 4
= 2.06 units per machine hour
On January 1, 2021, Poplar Fabricators Corporation agreed to grant its employees two weeks of vacation each year, with the stipulation that vacations earned each year can be taken the following year. For the year ended December 31, 2021, Poplar Fabricators’ employees each earned an average of $900 per week. Seven hundred vacation weeks earned in 2021 were not taken during 2021. Required: 1. Prepare the appropriate adjusting entry for vacations earned but not taken in 2021. 2. Suppose that, by the time vacations actually are taken in 2022, salary rates for employees have risen by an average of 5 percent from their 2021 level. Assume all vacation days earned in 2021 are taken in 2022. Also, assume salaries paid in 2022 (not including amounts paid for 2021 vacation days used in 2022) totaled $31 million. Prepare a journal entry that summarizes 2022 salaries and the payment for 2021 vacations taken in 2022. (Note: Do not include in the journal entry any amounts for vacation days earned in 2022).
Answer:
1. Dr Salary expense $630,000
Cr Liability - compensated future absences $630,000
2. Dr Liability - compensated future absences $630,000
Dr Salary expense $31,031,500
Cr Cash or Salary Payable $31,661,500
Explanation:
1. Preparation of Journal entry for vacations earned but not taken in 2021.
Dr Salary expense $630,000
(700 weeks * $900 per week )
Cr Liability - compensated future absences $630,000
2. Preparation of journal entry that summarizes 2022 salaries and the payment for 2021 vacations taken in 2022
Dr Liability - compensated future absences $630,000
(700 weeks * $900 per week )
Dr Salary expense $31,031,500
[(5% * $630,000) + $31 million]
Cr Cash or Salary Payable $31,661,500
($31,031,500+$630,000)
Initially, in a borrowing and lending market, or a loanable funds market, there is an equilibrium. Suppose entrepreneurs' aggregate expectations are that the economy is going to be good next year (i.e. opportunities for investment). What is likely to happen to the equilibrium interest rate under the following scenarios: 1. There is no change in the loan supply curve; 2. Potential lenders disagree with entrepreneurs, lenders view the future economic outlook as negative/riskier. Answer both cases using the theory of loanable fund markets.
Answer:
At the inception of a borrowing and lending market or a loan-able funds market, there was an equilibrium and the entrepreneurs expect the economy to be good both presently and in the subsequent years. For instance, increase in opportunities for investment which says that the demand for loans will increase in near future. The theory of the loan-able funds market says that " the rate of interest for lending is determined by the demand for and supply of loan-able funds".
1. As the main source of demand is a demand for investment which is likely to increase it will shift the demand curve towards right. The loan supply curve doesn't change as mentioned in the question. Hence, the equilibrium will shift upward i.e. the price of the funds which is the interest rate will increase.
2. Potential lenders disagreeing with entrepreneurs with having a pessimistic view will lead to a reduction of supply of funds in the market which will take the supply curve towards left. And the entrepreneurs have the opposite view which has already shifted the demand curve to right. So ultimately the new equilibrium interest rate will be much higher than the previous equilibrium interest rate.
Northern Wood Products is an all-equity firm with 17,100 shares of stock outstanding and a total market value of $356,000. Based on its current capital structure, the firm is expected to have earnings before interest and taxes of $28,000 if the economy is normal, $15,600 if the economy is in a recession, and $40,400 if the economy booms. Ignore taxes. Management is considering issuing $89,200 of debt with an interest rate of 6 percent. If the firm issues the debt, the proceeds will be used to repurchase stock. What will the earnings per share be if the debt is issued and the economy is in a recession?
Answer:
Northern Wood Products
The earnings per share if the debt is issue under economic recession will be $0.60.
Explanation:
Earnings before interest and taxes under recession = $15,600
Interest on debt issue ($89,200 * 6%) = $5,352
Taxes (ignored)
Earnings after interest and taxes = $10,248
Earnings per share (EPS) = After-Tax Earnings divided by number of outstanding common shares
= $10,248/17,100
= $0.599
= $0.60