Answer:
a. Kristen's taxable income = $148,000
her tax liability:
($38,700 - $9,525) x 12% = $3,501
($82,500 - $38,701) x 22% = $9,635.78
($148,000 - $82,501) x 24% = $15,719.76
total = $28,856.54
Kristen's after tax income = $200,000 - $28,856.54 = $171,143.46
b. Purple's corporate tax liability = $200,000 x 21% = $42,000
Purple's after tax income = ($200,000 - $42,000) = $158,000
Kristen's taxable income is $146,000 (qualified dividends are included in AGI but taxed at different rate), her tax rate will be 15%. Kristen's after tax income = $158,000 - ($146,000 x 15%) = $136,100
c. Kristen's tax liability on ordinary income ($158,000) = $28,376.54
Kristen's tax liability on qualified dividends = ($42,000 x 0.79) x 15% = $4,977
total tax liability = $33,353.54
Kristen's after tax income = $158,000 + $33,180 - $33,353.54 = $157,826.46
Brett has almond orchards, but he is sick of almonds and prefers to eat walnuts instead. The owner of the walnut orchard next door has offered to swap this year's crop with him. Assume he produces tons of almonds and his neighbor produces tons of walnuts. If the market price of almonds is per ton and the market price of walnuts is per ton: a. Should he make the exchange? b. Does it matter whether he prefers almonds or walnuts? Why or why not?
Answer and Explanation:
a. Market Value of Almonds = 1,015 * 107
= $108,605.
Market value of Walnuts = 779 * 111
= $86,469
Brett's almonds are worth more than his neighbor's walnuts so he should not make the trade.
b. His preference does not matter.
What matters is the market value of the crops. With the amount he makes from selling his almonds, he will be able to buy more walnuts than his neighbor is offering if he really wants walnuts.
2. The text makes it look as if maximizing output is the goal of society.
a. Is maximizing output the goal of society?
b. If the country is a Christian country, should it be?
c. If not, what should it be? (Religious)
Explanation:
a) Maximizing output might not be the final goal of society, but it is a way of achieving a goal. Society can make a profit by maximizing output. Profit maximization is possible through output maximization. All of the individuals try to maximize their profit. Profit maximization can be done through output maximization. Profit maximization is the goal of a society.
Hence, maximizing output may not be the final goal of a society, but it is a way of achieving the final goal.
The following balance sheet for the Los Gatos Corporation was prepared by a recently hired accountant. In reviewing the statement you notice several errors.
LOS GATOS CORPORATION
Balance Sheet
At December 31, 2016
Assets
Cash $ 40,000
Accounts receivable 80,000
Inventories 55,000
Machinery (net) 120,000
Franchise (net) 30,000
Total assets $ 325,000
Liabilities and Shareholders’ Equity
Accounts payable $ 50,000
Allowance for uncollectible accounts 5,000
Note payable 55,000
Bonds payable 110,000
Shareholders’ equity 105,000
Total liabilities and shareholders’ equity $ 325,000
Additional information:______.
1. Cash includes a $27,000 restricted amount to be used for repayment of the bonds payable in 2025.
2. The cost of the machinery is $204,000.
3. Accounts receivable includes a $27,000 notes receivable from a customer due in 2024.
4. The notes payable balance includes accrued interest of $12,000. Principal and interest are both due on February 1, 2022.
5. The company began operations in 2016. Net income less dividends since inception of the company totals $42,000.
6. 57,000 shares of no par common stock were issued in 2016. 100,000 shares are authorized.
Required:
Prepare a corrected, classified balance sheet. (Amounts to be deducted should be indicated by a minus sign.)
Answer:
Total assets $ 253,000
Total liabilities and shareholders’ equity $ 253,000
Explanation:
LOS GATOS CORPORATION
Balance Sheet
At December 31, 2016
Assets
Cash $ 40,000
Accounts receivable 80,000
Inventories 55,000
Less
Restricted Cash - $ 27000
Notes Receivable - $ 27000
Total Current Assets $ 121,000
Machinery $ 204,000
Less Accumulated Depreciation -102,000
Machinery (net) 102,000
Franchise (net) 30,000
Total assets $ 253,000
Liabilities and Shareholders’ Equity
Accounts payable $ 50,000
Note payable 43,000
Interest Payable 12000
Total Current Liabilities 105,000
Bonds payable 110,000
Total Liabilities 215,000
Shareholders’ equity 105,000
Less
Retained Earning - 42,000
Common Stock -25,000
Total liabilities and shareholders’ equity $ 253,000
As it is given in the Additional information.
1. Cash of $27,000 restricted amount to be used for repayment of the bonds payable is deducted from current liabilities.
2. The accumulated Depreciation is shown.
3. Notes receivable is deducted from accounts receivable.
4. Notes payable balance and accrued interest of $12,000 are shown separately.
5. Net income less dividends since inception of the company totals $42,000 is deducted as retained earnings.
6. The common stock issued is also deducted from liabilities.
Luebke Incorporated has provided the following data for the month of November. The balance in the Finished Goods inventory account at the beginning of the month was $58,000 and at the end of the month was $30,600. The cost of goods manufactured for the month was $215,000. The actual manufacturing overhead cost incurred was $56,800 and the manufacturing overhead cost applied to Work in Process was $60,400. The company closes out any underapplied or overapplied manufacturing overhead to cost of goods sold. The adjusted cost of goods sold that would appear on the income statement for November is:
Answer: $238,800
Explanation:
Adjusted Cost of Goods for November = Beginning Finished good inventory + Cost of goods manufactured - Ending Finished goods inventory - Overapplied Overheads
Overapplied Overhead = Overhead applied - Actual Overhead
= 60,400 - 56,800
= $3,600
Adjusted Cost of Goods for November = 58,000 + 215,000 - 30,600 - 3,600
= $238,800
Koebel Corp uses a job order costing system with manufacturing overhead applied to products on the basis of direct labor hours. For the upcoming year, Koebel Corp estimated total manufacturing overhead cost at $921,600 and total direct labor hours of 51,200. Koebel Corp started the year with no beginning balances in either Work in Process Inventory or Finished Goods Inventory. During the year actual manufacturing overhead incurred was $902,900 and 48,900 direct labor hours were used.
(a) Calculate the predetermined overhead rate Overhead Rate per hour
(b) Calculate how much manufacturing overhead will be applied to production
(c) Is overhead over- or underapplied? By how much? (Input the amount as positive value.)
(d) What account should be adjusted for over-or underapplied overhead? Should the balance be increased or decreased?
Answer: See explanation
Explanation:
a. Calculate the predetermined overhead rate Overhead Rate per hour
Predetermined Overhead rate will be the estimated total manufacturing overhead divided by the estimated total direct labor hours. This will be:
= $ 921,600/51,200
= $ 18
(b) Calculate how much manufacturing overhead will be applied to production
Manufacturing overhead that'll be applied to production will be the predetermined overhead rate multiplied by the actual total direct labor hours. This will be:
= $ 18 × 48,900 direct labor hours
= $ 880,200
(c) Is overhead over- or underapplied? By how much?
The Actual Overhead Incurred = $902,900 while the manufacturing overhead applied = $880,200. This shows that overhead is underapplied due to the fact that manufacturing overhead applied is less than the actual overhead that is incurred.
Therefore, the amount of overhead that was underapplied will be:
= $ 902,900 - $ 880,200
= $ 22,700
(d) What account should be adjusted for over-or underapplied overhead? Should the balance be increased or decreased?
Based on the scenario in the question and the answers calculated, the cost of goods sold should be increased.
Identifying Events as Accounting Transactions Do the following events result in a recordable transaction for The Toro Company?
1. Toro purchased robotic manufacturing equipment that it paid for by signing a note payable.
2. Toro’s president purchased stock in another company for his own portfolio.
3. The company lent $550 to an employee.
4. Toro ordered supplies from Office Depot to be delivered next week.
5. Six investors in Toro sold their stock to another investor.
6. The company borrowed $2,500,000 from a local bank.
Answer and Explanation:
1. The first transaction should be yes as it contains the measurable impact also it impacts the asset and liability
2. The second transaction should be no as the business entity concept is not followed also it is carried out an individual account
3. The third transaction should be yes as it contains the measurable impact also it comes under the transaction i.e. internal exchange
4. The fourth transaction should be no as the amount is not paid.
5. The fifth transaction should be no as the impact the common stock even though is a measurable transaction
6. The sixth transaction should be yes as it contains the measurable impact also it impacts the asset and liability i.e. cash and the note payable
In addition to well-designed executive compensation packages, two other motivational forces can align the interests of managers with those of their shareholders. Which of the following actions could be used to reduce the potential for these agency conflicts and ensure that the firm’s managers will pursue the long-term wealth interests of their shareholders? Let the manager know that he or she will be fired if the company’s stock does not reach a certain target by the end of the year. Let the manager know that a takeover is possible if he or she doesn’t perform well.
Answer: Let the manager know that a takeover is possible if he or she doesn’t perform well.
Explanation:
Agency problems refer to when managers take actions that benefit them instead of the shareholders of the company.
There are quite some ways to reduce the incidence of this happening and one of those is to let the manager know that a takeover is possible if they do not perform well.
Managers do not particularly like takeovers because the new owners of the company tend to get rid of the company's management who will be viewed as the reason for the company's failure or lack of growth. This will also impart on their reputations as good managers.
The World Bank forecasts growth of world trade to be 10.20%, up from 18.50% in 2017. This change has caused Galapagos Islands Resort to analyze its current financial situation, beginning with reconciling its accounts. Galapagos Islands Resort received its bank statement showing a balance of $10,419.90. Its checkbook balance is $16,227.00. Deposits in transit are $4,139.00 and $7,320.00. There is a service charge of $30.00 and interest earned of $5.90. Notes collected total $2,216.00. Outstanding checks are No. 1021 for $2,037.00 and No. 1022 for $1,423.00. All numbers are in U.S. dollars. Help Galapagos Island Resort reconcile its balances.
Answer:
Bank Balance is $25,338.90
Explanation:
The Bank Reconciliation Statement is prepared to check the accuracy of the Cash Book Balances through the following steps :
First, Prepare an updated Cash Book
Note : This gives us an adjusted cash book balance
Cash Book (Bank Balances Only)
Debit ;
Balance (unadjusted) $16,227.00
Interest Earned $5.90
Collected $2,216.00
Totals $25,368.90
Credit :
Service Charge $30.00
Balance (adjusted) $25,338.90
Totals $25,368.90
Then, Prepare a Bank Reconciliation Statement
Note : This proves the accuracy of the above cash balance
Bank Reconciliation Statement
Balance as per Bank Statement $10,419.90
Add Outstanding Checks ($4,139.00 + $7,320.00) $11,459.00
Less Unpresented Checks ($2,037.00 + $1,423.00) ($3,460.00)
Balance as per Cash Book $25,338.90
Which of the following is NOT a typical characteristic of a Minstrel
A. wandering, versatile entertainers
B. sometimes members f aristocracy and royalty
C. musicians of the fringe society
D. descriptive accounts; music not notated
Answer:
B
Explanation:
Which of the following is a correct application of Marginal Analysis? a. You buying 4 pairs of shoes for $240 because you are willing to buy the first pair for $60. b. You buying a fourth pair of shoes for $60 because you are willing to buy the first pair for $60. c. All of these are correct applications of Marginal Analysis. d. You deciding not to buy a fourth pair of shoes for $60 because you only value an additional pair at $50.
Answer:
Option d is the right one.
Explanation:
Marginal research or analysis to optimize future gains as a decision-making method. In comparison to the expenses incurred by this same behavior, it calculates added benefits. The illustration described demonstrates that the marginal gain is smaller than that of the marginal cost. This involves purchasing goods until the marginal gain is equal to the marginal cost.The other options aren't sufficient for the scenario provided. But that will be the best alternative for option d.
An incomplete cost of goods manufactured schedule is presented below. Complete the cost of goods manufactured schedule for Vaughn Company.
VAUGHN COMPANY
Cost of Goods Manufactured Schedule
Work in process (1/1) $220,940
Direct materials
Raw materials inventory (1/1) $
Add: Raw materials purchases 159,120
Total raw materials available for use
Less: Raw materials inventory (12/31) 22,610
Direct materials used $188,420
Direct labor
Manufacturing overhead
Indirect labor 25,620
Factory depreciation 37,200
Factory utilities 76,500
Total overhead 139,320
Total manufacturing costs
Total cost of work in process
Less: Work in process (12/31) 83,230
Cost of goods manufactured $544,240
Answer:
Beginning Raw material Inventory = Direct materials used - Raw Materials purchases + Ending raw materials inventory
= 188,420 - 159,120 + 22,610
= $51,910
Total cost of work in process = Cost of goods manufactured + Work in process (12/31)
= 544,240 + 83,230
= $627,470
Total Manufacturing costs = Total cost of work in process - Work in process (1/1)
= 627,470 - 220,940
= $406,530
Direct labor = Total Manufacturing costs - Total overhead - Direct materials used
= 406,530 - 139,320 - 188,420
= $78,790
What Are the Differences Between Depository and Non-Depository Institutions? The financial services industry in the United States has undergone major changes over the years. For many years, it consisted of two major types of business organizations: depository institutions and non-depository institutions. However, today this distinction has become much less clear-cut. Now, both groups of institutions may offer many of the same financial products and financial services
How do depository institutions differ from non-depository institutions?
Depository institutions are required to ______ and _______ although the general terms used to describe these financial products may vary across the various types of institutions. Non-depository institutions, in contrast, accept cash contributions from their customers, but the cash inflows are not called ________ instead, they're called shares or premiums.
Depository institutions include:_______.
1. Commercial banks, savings banks, savings and loan associations (thrifts), and credit unions
2. Mutual funds, insurance companies, brokerage firms, and financial services companies
Answer:
1. Accept deposits;make loan;deposits.
2. Commercial banks, savings banks, savings and loan associations (thrifts), and credit unions.
Explanation:
Depository institutions are required to accept deposits and make loans although the general terms used to describe these financial products may vary across the various types of institutions. Non-depository institutions, in contrast, accept cash contributions from their customers, but the cash inflows are not called deposits instead, they're called shares or premiums.
Depository institutions include commercial banks, savings banks, savings and loan associations (thrifts), and credit unions.
Non-depository financial institutions include mortgage banks, pension funds, insurance companies, mutual fund, securities firms etc.
Selected transaction data of a business for September are summarized below. Determine the following amounts for September: (a) total revenue, (b) total expenses, (c) net income.
Service sales charged to customers on account during September exist33,000
Cash received from cash customers for services performed in September 28,000
Cash received from customers on account during September:
Services performed and charged to customers prior to September 13,000
Services performed and charged to customers during September 18,000
Expenses incurred prior to September and paid during September 6, 500
Expenses incurred and paid in September 36, 250
Expenses incurred in September but not paid in September 5,000
Expenses for supplies used and insurance (not included above) applicable to 2,000 September
Answer:
A. $61,000
B. $43,250
C. $17,750
Explanation:
(a) Calculation for Total revenue
Using this formula
Total revenue=Service sales charged to customers+Cash received from cash customers
Let plug in the formula
Total revenue= ($33,000 + $28,000)
Total revenue=$61,000
Therefore Total revenue will be $61,000
(b) Calculation for Total expenses
Using this formula
Total expenses=Expenses incurred paid +Expenses incurred but not paid +Expenses for supplies used and insurance
Let plug in the formula
Total expenses= ($36,250 + $5,000 + $2,000)
Total expenses=$43,250
Therefore Total expenses will be $43,250
(c) Calculation for net income
Using this formula
Net income=Total revenue-Total expenses
Let plug in the formula
Net income=($61,000 - $43,250)
Net income=$17,750
Therefore Net income will be $17,750
Mauro Products distributes a single product, a woven basket whose selling price is $28 per unit and whose variable expense is $20 per unit. The company’s monthly fixed expense is $20,800. Required: 1. Calculate the company’s break-even point in unit sales. 2. Calculate the company’s break-even point in dollar sales. (Do not round intermediate calculations.) 3. If the company's fixed expenses increase by $600, what would become the new break-even point in unit sales? In dollar sales? (Do not round intermediate calculations.)
Answer:
1. 2600 units
2. $72,800
3. 2,675 units
4. $74,900
Explanation:
Provided,
Sales price per unit = $28
Variable cost per unit = $20
Thus, Contribution per unit = Sales price - variable cost = $28 - $20 = $8
Contribution as percentage = [tex]\frac{8}{28} \times 100 = 28.57[/tex]
Fixed Cost = $20,800
1. Break even point in unit sales = [tex]\frac{Fixed\ Cost}{Contribution\ per\ unit}[/tex] = [tex]\frac{20,800}{8} = 2,600\ units[/tex]
2. Break even point in dollars = Break even point in units [tex]\times[/tex] sales price per unit
= 2,600 [tex]\times[/tex] $28 = $72,800
Or straight break even point in dollars = [tex]\frac{Fixed\ cost}{Contribution\ percentage} = \frac{20,800}{0.2857} = 72,800\ dollars[/tex]
3. In case fixed cost increase by $600
New fixed cost = $20,800 + $600 = $21,400
Thus, break even point in units shall be = [tex]\frac{21,400}{8} = 2,675\ units[/tex]
4. Break even point in sales = [tex]\frac{21,400}{0.2857} = 74,900\ dollars[/tex]
(6.55) During the current year, Robert pays the following amounts associated with his own residence: Property taxes $3,000 Mortgage interest 8,000 Repairs 1,200 Utilities 2,700 Replacement of roof 4,000 In addition, Robert paid $1,500 of property taxes on the home that is owned and used by Anne, his daughter. a.Which of these expenses can Robert deduct? b.Can Anne deduct the $1,500 of property taxes? c.Are the deductions for AGI or from AGI (itemized)? d.How could the tax consequences be improved? Summarize your recommendation.
Answer: See explanation
Explanation:
a. Which of these expenses can Robert deduct?
From the question, the deductible expenses will include the property taxes and the mortgage interest.
b.Can Anne deduct the $1,500 of property taxes?
Anne cannot deduct the $1,500 of property taxes because the $1500 has already been paid by Robert who is his father.
c.Are the deductions for AGI or from AGI (itemized)?
The deductions are from AGI itemized.
d.How could the tax consequences be improved?
The tax consequences be improved when a cash gift is given to Anne by his father Robert and then pay for her expenses.
(Expenditure Approach to GDP) Given the following annual information about a hypothetical country, answer questions a through d. Billions of Dollars Personal consumption expenditures $200 Personal taxes 50 Exports 30 Depreciation 10 Government purchases 50 Gross private domestic investment 40 Imports 40 Government transfer payments 20 What is the value of GDP? What is the value of net domestic product? What is the value of net investment? What is the value of net exports?
Answer:
What is the value of GDP?
GDP = C + I + G + NX (X-N)
GDP = $200 + $40 + $50 + NX ($30 - $40)
GDP = $200 + $40 + $50 - $10
GDP = $280
What is the value of net domestic product?
NDP = GDP - Depreciation
NDP = $280 - $10
NDP = $270
What is the value of net investment?
The formula is the same as net domestic product, so the value of net investment is also $270
What is the value of net exports?
The value of net exports, as seen above, is -$10 (because the value of imports is higher than the value of exports).
Clipper Company sells two types of nail clippers. One focuses on the economy oriented customer and the other aims to satisfy the high-end clientele. The economy clipper cost $3 and has a sales price of $5. The high-end model costs $9 and sales for $12. Fixed costs associated with this product line amount to $35,880. Economy clippers constitute 70 percent of the market with the remaining 30 percent being high-end clippers. Based on this information what is the weighted average contribution margin
Answer:
2.30
Explanation:
The computation of the weighted average contribution margin is shown below:
Particulars Nail Clipper 1 Nail Clipper 2 Total
Selling Price $5 $12
Less: Variable Cost $3 $9
Contribution Margin $2 $3
PV Ratio 40% 25%
($2 ÷ $5) ($3 ÷ $12)
Weights 0.7 0.3
Weighted Average 28.00% 7.50% 35.50%
Weighted average
contribution margin 1.40 0.90 2.30
Issued $25,000 of QCI stock for cash. Incurred $600 of utilities costs this month and will pay them next month. Incurred and paid wages for the current month, totaling $2,000. Performed cleaning services on account worth $2,800. Some of Quick Cleaners’s equipment was repaired at a total cost of $150. The company paid the full amount at the time the repair work was done. Required: Prepare journal entries for the above transactions, which occurred during a recent month. Determine QCI’s preliminary net income.
Answer:
A.
a.Dr Cash 25,000
Cr Common Stock 25,000
b. Dr Utilities expense 600
Cr Utilities payable 600
c. Dr Wages expense 2,000
Cr Cash 2,000
d. Dr Account receivable 2,800
Cr Service revenue 2,800
e. Dr Repairs expense 150
Cr Cash 150
B. $50
Explanation:
Preparation of Journal entries
a. Based on the information given we were told that the amount of $25,000 of QCI stock for cash was issued which means that the Journal entry will be :
Dr Cash 25,000
Cr Common Stock 25,000
b. Based on the information given we were told that they Incurred the amount of $600 of utilities costs which means that the Journal entry will be :
Dr Utilities expense 600
Cr Utilities payable 600
c. Based on the information given we were told that the company Incurred and as well paid wages totaling the amount of $2,000 which means that the Journal entry will be :
Dr Wages expense 2,000
Cr Cash 2,000
d. Based on the information given we were told that the company Performed cleaning services that cost $2,800 which means that the Journal entry will be:
Dr Account receivable 2,800
Cr Service revenue 2,800
e. Based on the information given we were told that the Cleaners’s equipment was repaired at the amount of $150 which means that the Journal entry will be :
Dr Repairs expense 150
Cr Cash 150
2) Calculation for the Net income
Net income = 2,800-2,000-150-600
Net income = $50
Therefore net income will be $50
Kit Company borrows $5 million at 12% on January 1, 2016, specifically for the purpose of financing the construction of a building that is expected to take 18 months to complete. Kit invests the total amount at 11% until it makes payments for the construction project. During the first year of construction, Kit incurs the following expenditures related to this construction project:
January 1 $1,000,000
April 1 1,600,000
October 1 1,200,000
December 31 500,000
Required:
1. Compute the amount of interest expense Kit would capitalize related to the construction of the building.$
2. Compute the amount of interest revenue Kit would recognize.$
3. Assume that Kit uses IFRS. What amount of interest would be capitalized related to the construction of the building?$
Answer:
1. The amount of interest expense Kit would capitalize related to the construction of the building is $300,000.
2. The amount of interest revenue Kit would recognize is $275,000.
3. The amount of interest revenue Kit would capitalized as per IFRS (IAS 23) is $25,000.
Explanation:
1. Compute the amount of interest expense Kit would capitalize related to the construction of the building.$
Note: See part 1 of the attached excel file for the calculation of average expenses incurred for the building
Average expenses incurred for the building = $2,500,000
Interest rate = 12%
Interest expense to capitalize = $2,500,000 * 12% = $300,000
Therefore, the amount of interest expense Kit would capitalize related to the construction of the building is $300,000.
2. Compute the amount of interest revenue Kit would recognize.$
Note: See part 2 of the attached excel file for the calculation of the total interest revenue.
Amount of interest revenue = $275,000
Therefore, the amount of interest revenue Kit would recognize is $275,000.
3. Assume that Kit uses IFRS. What amount of interest would be capitalized related to the construction of the building?$
The IAS 23 Clause 12 states that to the extent that an entity borrows funds specifically for the purpose of obtaining a qualifying asset, the entity shall determine the amount of borrowing costs eligible for capitalization as the actual borrowing costs incurred on that borrowing during the period less any investment income on the temporary investment of those borrowings.
Based on the above, the amount of interest that would be capitalized related to the construction of the building can be calculated as follows:
Amount of interest revenue to capitalized as per IFRS = Interest expense to capitalize - Total interest income = $3000,000 - $275,000 = $25,000
Therefore, the amount of interest revenue Kit would capitalized as per IFRS (IAS 23) is $25,000.
Industries manufactures custom-designed playground equipment for schools and city parks. Outdoor expected to incur $707,200 of manufacturing overhead cost, 41,600 of direct labor hours, and $1,414,400 of direct labor cost during the year (the cost of direct labor is $34 per hour). The company allocates manufacturing overhead on the basis of direct labor hours. During December, Outdoor completed Job 307. The job used 155 direct labor hours and required $15,100 of direct materials. The City of Adams has contracted to purchase the playground equipment at a price of 26% over manufacturing cost.
Requirement
1. Calculate the manufacturing cost of Job 302.
First identify the formula, then calculate the predetermined overhead rate.
Estimated yearly overhead costs Estimated yearly direct labor hours Predetermined overhead rate 627,000 41,800 15 per hour
2. Calculate the manufacturing cost of Job 302.
Direct materials
Direct labor
Manufacturing overhead 14,500
Total job cost
Answer
See answer below
Explanation:
1. The predetermined overhead rate =
Estimated yearly overhead costs / Estimated yearly direct labor hour
= $707,200 / 41,600
= $17 per hour
2. Cost of manufacturing job
Direct materials. $15,100
Direct labor.
($34 × 155 hours) $5,270
Manufacturing overhead
155 hours × $17. $2,635
Total job cost. $23,005
Lamonda Corp. uses a job order cost system. On April 1, the accounts had the following balances: Raw Materials Inventory $ 25,000 Work in Process Inventory 55,000 Finished Goods Inventory 60,000 The following transactions occurred during April: (a) Purchased materials on account at a cost of $136,000. (b) Requisitioned materials at a cost of $122,000, of which $28,000 was for general factory use. (c) Recorded factory labor of $155,000, of which $24,000 was indirect. (d) Incurred other costs: (Hint: Use Miscellaneous Accounts for the total of all costs incurred). Selling expense $ 44,000 Factory utilities 26,000 Administrative expenses 15,000 Factory rent 30,000 Factory depreciation 24,000 (e) Applied overhead at a rate equal to 135 percent of direct labor cost. (f) Completed jobs costing $375,000. (g) Sold jobs costing $402,000. (h) Recorded sales revenue of $500,000.
Answer:
To record purchase of Material
Dr. Raw Material Inventory $136,000
Cr. Account Payable $136,000
To record Work in process Inventory
Dr. Work in process Inventory $94,000
Dr. Manufacturing Overhead $28,000
Cr. Raw Material Inventory $122,000
To record wages payable
Dr. Work in process Inventory $131,000
Dr. Manufacturing Overhead $24,000
Cr. Wages Payable $155,000
To record the cost
Dr. Selling and distribution Expenses $59,000
Dr. Manufacturing Overhead $80,000
Cr. Miscellaneous Expenses $139,000
To record manufacturing overhead
Dr. Work in process Inventory $176,850
Cr. Manufacturing Overhead $176,850
To record Finished goods inventory
Dr. Finished goods inventory $375,000
Cr. Work in process Inventory $375,000
To record cost of goods Sold
Dr. Cost of Goods Sold $402,000
Cr. Finished goods inventory $402,000
To record Sales revenue
Dr. Accounts Receivables $500,000
Cr. Sales $500,000
Explanation:
All the entries are recorded as per their events.
Mrs. Jonas believes strongly that it is important that workers' rights be respected, and that one of the more important ways of doing this is to ensure that all workers be properly documented. She is supervising a contracting company that is building a new warehouse for her company. While doing this she discovers that many of the workers employed by the contractor are undocumented aliens working for well below minimum wage. Mrs. Jonas can be expected to relieve the discomfort she is experiencing by doing the following except ________. terminating the contract as it is against her attitude deciding this issue is unimportant attempting to stop the contractor using undocumented workers rationalizing that it is not her problem since she is not the contractor coming to accept that using undocumented workers does not harm workers' rights
Correctly written options;
b. deciding this issue is unimportant
c. attempting to stop the contractor using undocumented workers
c. rationalizing that it is not her problem since she is not the contractor
d. coming to accept that using undocumented workers does not harm workers’ rights
Answer:
all of the above
Explanation:
In no way would any of the options above relieve the discomfort of Mrs. Jonas because her own job is at stake; if it is discovered she failed to perform her duties as expected. Attempting to stop the contractor would more likely bring great discomfort especially if things get too physical.
Thus, her best course of action would be to terminate the contract.
The comparative statements of Simpson Company are shown below.
SIMPSON COMPANY
Income Statements
For the Years Ended December 31
2020 2019
Net sales $780,000 $624,000
Cost of goods sold 440,000 405,600
Gross profit 340,000 218,400
Selling and administrative
expenses 176,880 149,760
Income from operations 163,120 68,640
Other expenses and losses
Interest expense 9,920 7,200
Income before income taxes 153,200 61,440
Income tax expense 34,000 14,000
Net income $119,200 $47,440
Liabilities and Stockholders’ Equity
Current liabilities
Accounts payable $138,200 $132,000
Income taxes payable 25,300 24,000
Total current liabilities 163,500 156,000
Bonds payable 132,000 120,000
Total liabilities 295,500 276,000
Stockholders’ equity
Common stock ($10 par) 150,000 130,000
Retained earnings 330,300 246,000
Total stockholders’ equity 480,300 376,000
Total liabilities and stockholders’
equity $775,800 $652,000
All sales were on account. Net cash provided by operating activities was $108,000. Capital expenditures were $47,000, and cash dividends were $30,900.
Instructions:
Compute the following ratios for 2019:
A) Earnings per share.
B) Return on common stockholders’ equity.
C) Return on assets. .
D) Current ratio.
E) Accounts receivable turnover.
F) Average collection period.
G) Inventory turnover.
H) Days in inventory
I) Times interest earned
J) Asset turnover
K) Debt to asset ratio
L) Current cash debt coverage
M) Cash debt coverage
N) Free cash flow
Answer and Explanation:
The calculations is shown below:-
a) Earnings per share
= Net income ÷ Common stock
= $119,200 ÷ (($13,000 + $15,000) ÷ 2)
= $119,200 ÷ $14,000
= $8.51
b) Return on common stockholders’ equity
= Return on common stock holders equity = Net income ÷ Average Common stock holders equity
= $119,200 ÷ (($376,000 + $480,300) ÷ 2)
= $119,200 ÷ $428,150
= 27.8%
C) Return on assets
= Net income ÷ Average total Assets
= $119,200 ÷ ((652,000 + $775,800) ÷ 2)
= $119,200 ÷ $713,900
= 16.7%
D) Current ratio
= Current assets ÷ Current Liabilities
= $290,500 ÷ $163,500
= 1.78:1
E) Accounts receivable turnover
= Net credit sales ÷ Average accounts Receivable
= $780,000 ÷ (($83,800 + $106,200) ÷ 2
= $780,000 ÷ $95,000
= 8.2 times
F) Average collection period
= 365 ÷ Accounts Receivable turnover ratio
= 365 ÷ 8.2 times
= 44.5 days
G) Inventory turnover
= Cost of goods sold ÷ Average inventory
= $440,000 ÷ (($740,000 + $116,400) ÷ 2
= $440,000 ÷ $95,200
= 4.6 times
H) For days in inventory
Number of days sales in inventory = 365 days ÷ inventory turnover
= 365 days ÷ 4.6
= 79.3 days
I) For Time interest earned
Times Interest Earned = Income before interest and taxes ÷ Interest Expenses
= ($119,200 + $9,920 + $34,000) ÷ ($9,920)
= 16.4 times
J) For Asset turnover
Asset turnover = Net Sales ÷ Average total Assets
= ($780,000) ÷ ($775,800 + $652,000) ÷ 2)
= 1.09 times
K) For debt to asset ratio
Debt to assets = Total Liabilities ÷ Total Assets
= $295,500 ÷ $775,800
= 38%
L) For Current cash debt coverage
= Net cash provided by operating activities ÷ Average of current liabilities
= $108,000 ÷ ( $156,000 + $163,500) ÷ 2
= 0.68 times
M) For cash debt coverage
= Net cash provided by operating activities ÷ Average of total liabilities
= $108,000 ÷ ($295,500 + $276,000) ÷ 2
= 0.38 times
N) For free cash flow
Free Cash flow = Operating Cash flow - Capital Expenditure - Dividends
= $108,000 - $47,000 - $30,900
= $30,100
On December 31, 2021, Harris Co. leased a machine from Catt, Inc. for a five-year period. Equal annual payments under the lease are $2,100,000 and are due on December 31 of each year. The first payment was made on December 31, 2021. The five lease payments are discounted at 10% over the lease term. The lease is appropriately accounted for as a finance lease by Harris. In its December 31, 2022 balance sheet, Harris should report a lease liability of:___________
a. $6,340,000
b. $6,240,000.
c. $5,706,000.
d. $5,222,400
Answer: $5,222,400
Explanation:
Here is the complete question:
On December 31, 2021, Harris Co. leased a machine from Catt, Inc. for a five-year period. Equal annual payments under the lease are $2,100,000 (including $100,000 annual executory costs) and are due on December 31 of each year. The first payment was made on December 31, 2021, and the second payment was made on December 31, 2022. The five lease payments are discounted at 10% over the lease term. The present value of lease payments at the inception of the lease and before the first annual payment was $8,756,727. The lease is appropriately accounted for as a finance lease by Harris. In its December 31, 2022 balance sheet, Harris should report a lease liability of
a. $6,340,000.
b. $6,240,000.
c. $5,706,000.
d. $5,222,400
In its December 31, 2022 balance sheet, Harris should report a lease liability of:
Present value of annual lease payments = $8,756,727
Less: Annual lease payment on December 31, 2021 = $2,100,000
Less: Annual lease payment on December 31, 2022 = $2,100,000
Add: Interest expense on lease liability = $665,673
Lease liability = $5,222,400
Note that the interest expense on lease liability is calculated as:
= (8756727 - 2100000) × 10%
= $6,656,727 × 0.1
= $665,672.7 = $665,673
Required information {The following information applies to the questions displayed below. At the beginning of Year 2, the Redd Company had the following balances in its accounts:
Cash $8,200
Inventory 2,200
Common stock 7, 700
Retained earnings 2,700
During Year 2, the company experienced the following events:
1. Purchased inventory that cost $5,700 on account from Ross Company under terms 2/10, n/30. The merchandise was delivered FOB shipping point. Freight costs of $520 were paid in cash.
2. Returned $350 of the inventory that it had purchased because the inventory was damaged in transit. The seller agreed to pay the return freight cost.
3. Paid the amount due on its account payable to Ross Company within the cash discount period.
4. Sold inventory that had cost $6,200 for $9,200 on account, under terms 2/10, n/45.
5. Received merchandise returned from a customer. The merchandise originally cost $520 and was sold to the customer for $820 cash. The customer was paid $820 cash for the returned merchandise.
6. Delivered goods FOB destination in Event 4. Freight costs of $620 were paid in cash.
7. Collected the amount due on the account receivable within the discount period.
8. Took a physical count indicating that $1,900 of inventory was on hand at the end of the accounting period.
Required
a. Identify these events as asset source (AS), asset use (AU), asset exchange (AE), or claims exchange (CE) (Select "NA" if there is no effect on the "Classification".) Classification Event 1a. (Purchase inventory). 16. (Shipping cost) 4a. (Recording revenue). 4b. (Recording cost of goods sold) 5a.(Reversing revenue) 46. (Reversing cost of goods sold). 6.
b. Record each event in a statements model like the following one. In the Cash Flow column, use OA to designate operating activity, IA for investment activity, FA for financing activity, and NC for net change in cash. The first event is recorded as an example. (Enter any decreases to account balances and cash outflows with a minus sign.
Answer:
Assets:
Cash 8200 - 520 - 5243 - 820 - 620 + 9016 = 10,013
Receivables 9200 - 9200 = 0
Inventory 2200 + 5700 + 520 - 350 - 107 - 6200 + 520 - 383 = 1900
Liabilities:
Accounts Payable 5700 - 350 - 5350 = 0
Common Stock 7700 = 7700
Explanation:
Redd Company has incurred multiple transactions which will require adjustments before financial statements are prepared. These transaction will have effects on both sides of the accounts assets and liabilities. Common stock is not affected by the transactions as this is equity section.
A series of formal, written statements in which the plaintiff and defendant both state claims for the defense regarding the matter being disputed is which
of the following?
O Appeal
O Pleading
O Breach
O Trial
If youre coming from ICEV, the answer is pleading :)
Jason West, owner of the XL Cleaning, LLC, began his business in 2012. Jason's primary focus had been on cleaning offices for large corporations, but in recent months, Jason has seen a decline in demand for cleaning services. Surprisingly, the competitive environment appears relatively stable with no new major competitors. As Jason thought about his situation, he realized that he needed to better understand how customers assess service quality and what they were looking for in a superior cleaning service. Jason developed a detailed research plan. First, he gathered his competitors' information -- primarily through brochures, browsing their websites, as well as making some phone calls -- to fund out exactly what the competition offered as part of their cleaning services. In addition, Jason obtained an updated list of 423 local companies and their addresses from the Chamber of Commerce in his area. Although this list contains 423 local company names, Jason has decided to survey 100 of them. Jason gathered information about the competing firms from brochures, phone calls, and the Internet. Obtaining this type of information is an example of ________
Answer:
secondary data research source
Explanation:
Note, secondary data research source is the type of data collected by one party for some other reasons but may later be used by another different party.
Thus, Jason West happens to be the later party since we are told he gathered information about the competing firms by going to the Chamber of Commerce, then to brochures, phone calls, and the Internet which makes it a good example of secondary data research source.
You are going to invest in a stock mutual fund with a front-end load of 6.5 percent and an expense ratio of 1.37 percent. You also can invest in a money market mutual fund with a return of 2.7 percent and an expense ratio of 0.20 percent. If you plan to keep your investment for 2 years, what annual return must the stock mutual fund earn to exceed an investment in the money market fund? What if your investment horizon is 8 years?
Answer:
Kindly check explanation
Explanation:
Given the following :
Stock Mutual fund :
Front-end load (f) = 6.5% = 0.065
Expense ratio (e) = 1.37 % 0.0137
Money market Mutual fund :
Return (r) = 2.7% = 0.027
Expense ratio (e) = 0.002
Period of investment = 2 years
what annual return must the stock mutual fund earn to exceed an investment in the money market fund?
Money market = stock
(1 + r - e)^2 = (1 - f) (1 + r - e)^2
(1 + 0.027 - 0.002)^2 = (1 - 0.065)(1 + r - 0.0137)^2
1.050625 = 0.935(r + 0.9863)^2
Divide through by 0.935
1.050625 / 0.935 = (r + 0.9863)^2
Take Square root of both sides
1.0600 = r + 0.9863
1.0600 - 0.9863 = r
0.0737 = r
r = 0.0737 * 100%
r = 7.37%
2.) If investment horizon is 8 years
Money market = stock
(1 + r - e)^8 = (1 - f) (1 + r - e)^8
(1 + 0.027 - 0.002)^8 = (1 - 0.065)(1 + r - 0.0137)^8
1.21840 = 0.935(r + 0.9863)^8
Divide through by 0.935
1.21840 / 0.935 = (r + 0.9863)^8
1.303101 = (r + 0.9863)^8
Take 8th root of both sides
1.03365 = r + 0.9863
1.03365 - 0.9863 = r
0.04735 = r
r = 0.04735 * 100%
r = 4.74%
Demand curves slope___ because as prices increase and other things remain
the same, the quantity demanded___.
downward; decreases
downward; increases
upward; decreases
upward; increases
Stagflation occurs when high inflation combines with...
a. high unemployment and a low level of production.
b. low unemployment and a high level of production.
c. a drop in buying power and a rise in workers’ wages.
d. a rise in buying power and a drop in workers’ wages.
Answer: The answer is A
Explanation: high unemployment and a low level of production
Answer:
A
Explanation:
