Answer:
Exchange Rate and Interest Rate
1. If interest rates in the United States increase more than in the UK, the exchange rate of the US dollars will increase relative to the UK pounds, thus causing the UK pounds to become stronger than the US dollars.
2. US exports to the UK would become cheaper in UK.
3. It would be more expensive for an American tourist to take a vacation to London after the interest rate change because they would need more money to handle the differences.
Explanation:
Generally, higher interest rates in an economy offer investors some higher returns when compared to other countries. These higher interest rates attract foreign capital and cause the exchange rate to rise. When this happens, the cost of goods and services in the country with the higher interest and exchange rates. The opposite becomes the case when the interest and exchange rates are lower relative to other countries.
If interest rates in the United States increase more than in the UK, the United states currency would become stronger or appreciate against the British Pound.
As a result of the increase in the value of the US currency, export to the UK would decline because export would become more expensive. It would be less expensive for American tourist to take a vacation to London.
Exchange rate is the rate at which one currency is exchanged for another currency.
If interest rates in the United States increase more than in the UK, there would be an increase in foreign investments in the US. As a result, the demand for the dollar would increase and this would lead to an appreciation of the dollar against the GBP.
As a result of the appreciation of the dollar, export goods to the UK becomes more expensive and imports to the US from the UK becomes cheaper.
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Presented below is financial information for two different companies.
Compute the missing amounts.
Windsor Company Sheridan Company
Sales revenue 96,570
Sales returns and allowances 5,420
Net sales 81,960 94,350
Cost of goods sold 55,730
Gross profit 40,900
Operating expenses 15,070 21,380
Net income 19,520
Answer and Explanation:
The computation of missing amounts is shown below:-
a. Net Sales = Sales revenue - Sales returns and allowances
$81,960 = $96,570 - Sales returns and allowances
Sales returns and allowances = $96,570 - $81,960
= $14,610
b. Gross Profit = Net sales - Cost of goods sold
= $81,960 - $55,730
= $26,230
c. Net income = Gross Profit - Operating expenses
= $26,230 - $15,070
= $11,160
d. Sales revenue = Net sales + Sales returns and allowances
= $94,350 + $5,420
= $99,770
e. Cost of goods sold = Net sales - Gross Profit
= $94,350 - $40,900
= $53,450
g On January 2, 2010, Howdy Doody Corporation purchased 12% of Ranger Corporation's common stock for $50,000 and classified the investment as available for sale. Ranger's net income for the years ended December 31, 2010 and 2011, were $10,000 and $50,000, respectively. During 2011, Ranger declared and paid a dividend of $60,000. There were no dividends in 2010. On December 31, 2010, the fair value of the Ranger stock owned by Howdy Doody had increased to $70,000. How much should Howdy Doody show in the 2011 income statement as income from this investment
Answer:
$7,200
Explanation:
The calculation of income that should be presented in the income statement is shown below:-
Dividend Received = Given percentage × Paid dividend
= 12% × $60,000
= $7,200
Therefore for computing the income that should be presented in the income statement we simply applied the above formula.
Therefore the above is the answer
Newton Corporation entered into the following transactions during its first year of operations. (Assume all transactions involve cash.) Acquired $2,000 of capital from the owners. Purchased $600 of direct raw materials. Used $400 of these direct raw materials in the production process. Paid production workers $800 cash. Paid $400 for manufacturing overhead. Started and completed 200 units of inventory. Sold 50 units at a price of $12 each. Paid $80 for selling and administrative expenses. The amount of net income for the year was:
Answer:
Newton Corporation
Net income for the year = $120
Explanation:
a) Data and Calculations:
Direct materials cost = $400
Direct labor cost = 800
Manufacturing overhead 400
Total manufacturing cost $1,600
Cost per unit = $8
Ending Inventory of finished goods = 150 units * $8 = $1,200
Cost of goods sold = 50 * $8 = $400
Sales revenue = 50 * $12 = $600
Newton Corporation
Income Statement
For the year ended December 31:
Sales Revenue $600
Cost of goods sold 400
Gross income $200
Selling & Admin.
expense 80
Net Income $120
b) Newton Corporation's net income is the difference between the Sales Revenue, cost of goods sold and selling and administrative expenses.
"An individual is unique and does not speak for or represent anything other than themselves." This statement is an argument against ______.
a.
Gender
b.
Diversity
c.
Stereotypes
d.
Ethnicity
Answer:
C: stereotypes
Explanation:
Frank Dewey Esquire from the firm of Dewey, Cheatum, and Howe, has been offered an upfront retainer of $30,000 to provide legal services over the next 12 months to Taggart Transcontinental. In return for this upfront payment, Taggart Transcontinental would have access to 8 hours of legal services from Frank for each of the next 12 months. Frank's normal billable rate is $250 per hour for legal services. Assuming that Dewey's cost of capital is 12% EAR, then the IRR of his retainer offer is closest to:
Answer:
-39.3%
Explanation:
Calculation for the IRR of his retainer offer
First step is to find Opportunity Cost
Opportunity Cost= 8 hours × $250 per hour
Opportunity Cost = $2,000
Since we have known the monthly Opportunity Cost the second step will be to compute IRR
Present Value= $30,000
N = 12
PMT = -2,000
FV = 0
Now let compute the IRR
IRR= -3.276502% × 12
IRR= -39.3180% Approximately - 39.3%
Therefore the IRR of his retainer offer is closest to: - 39.3%
You were asked to travel to Milwaukee to observe and verify the inventory of the Milwaukee branch of one of your clients. When you arrive on Thursday, December 30, and find that the inventory procedures have just been started. You spot a railway car on the sidetrack at the unloading door and ask the warehouse superintendent, Buck Rogers, how he plans to inventory the contents of the car. He responds, "We are not going to include the contents in the inventory." Later in the day, you ask the bookkeeper for the invoice on the carload and the related freight bill. The invoice lists the various items, prices, and extensions of the goods in the car. You note that the carload was shipped December 24 from Albuquerque, f.o.b. Albuquerque, and that the total invoice price of the goods in the car was $35,300. The freight bill called for a payment of $1,500. Terms were net 30 days. The bookkeeper affirms the fact that this invoice is to be held for recording in January. Does your client have a liability that should be recorded at December 31? Discuss. For what possible reason(s) might your client wish to postpone recording the transaction?
Answer:
1. Yes he has a liability that should be.
Explanation:
Ownership would be shifted to buyer as soon as product has been shipped.
From question we saw that the car load has been shipped from Albuquerque in December 24, so ownership has been moved to Milwaukee branch.
1. So yes my client has a liability which should be recorded on that date. The date is December 31st and the amount is $36800
2. My client client may want to postpone the recording based on these reasons
a. Based on wanting to keep current ratio at a particular level. The value of additional recovery and account payable would then affect it
b. So as to show decreased amount of account payable
c. So as to show reduced net profit.
Entering foreign markets requires an analysis that examines each of the five major global entry strategies and their associated risks and rewards. It is important as a marketer that you understand the level of risk involved in each and also be able to identify which strategy firms are currently using.Firms looking to expand globally must address how they plan to enter international markets. Once a company has developed a marketing plan that involves global expansion, they have five major strategic options for how to enter the global marketplace: exporting, licensing, franchising, joint venture, and direct investment. Exporting is selling domestically produced products to foreign markets. Licensing is a legal process in which one firm pays to use or distribute another firm's resources. Franchising is a contractual arrangement in which the franchisor provides a franchisee the right to use its name and marketing and operational support in exchange for a fee and, typically, a share of the profits. In a joint venture, a domestic firm partners with a foreign company to create a new entity. Direct ownership requires a domestic firm to actively manage a foreign company or overseas facilities.Place the entry strategies (along with examples of each) in the correct order from least risky to most risky.Licensing - A legal process in which one firm pays to use or distribute another firm’s resources, including products, trademarks, patents, intellectual property, or other proprietary knowledge.KFC shares recipes and distribution information for 5 new KFC restaurants owned by local Saudi Arabian investors. Memphis Grizzlies gives logo and artwork to a Japanese company to sell Grizzlies' shirts locally.Exporting - Selling domestically produced products to foreign markets.Laske farms sells oranges and peaches grown in Florida to stores in Mexico. GM builds cars in U.S. and sells them to European buyers.Direct ownership - A method of entering an international market in which a domestic firm actively manages a foreign company or overseas facilities. Wendy's opens 29 new company-owned stores in Canada to test a new Frosty flavor. Wal-Mart builds 7 company-owned stores in China.Franchising - A contractual arrangement in which the franchisor provides a franchisee the right to use its name and marketing and operational support in exchange for a fee and, typically, a share of the profits. Subway provides a business owner in Vietnam the knowledge and information to run a Subway for a fee.Taylor Gas Stations allows an owner-operator in Chile the right to use its name and provides support as to how to best run the business.Joint venture - An arrangement in which a domestic firm partners with a foreign company to create a new entity, thus allowing the domestic firm to enter the foreign company’s market.Starbucks partners with a Russian coffee company to open a new chain of coffee shops in Moscow.NBC and Univision start a Latin American television network.
When entering a foreign market, there are several methods one can use and these methods and their examples are shown below in order of riskiness with the first being the most risky.
Direct OwnershipWendy's opens 29 new company-owned stores in Canada to test a new Frosty flavor.Wal-Mart builds 7 company-owned stores in China.Joint Venture Starbucks partners with a Russian coffee company to open a new chain of coffee shops in Moscow.NBC and Univision start a Latin American television network.Franchising Subway provides a business owner in Vietnam the knowledge and information to run a Subway for a fee.Taylor Gas Stations allows an owner-operator in Chile the right to use its name and provides support as to how to best run the business.Licensing KFC shares recipes and distribution information for 5 new KFC restaurants owned by local Saudi Arabian investors.Memphis Grizzlies gives logo and artwork to a Japanese company to sell Grizzlies' shirts locally. Exporting Laske farms sells oranges and peaches grown in Florida to stores in Mexico. GM builds cars in U.S. and sells them to European buyers.In conclusion, the more risky methods of entry involve having a larger commitment in the foreign business while the less riskier methods reduce one's commitment.
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anson Corporation Co.'s trial balance included the following account balances at December 31, 2021: Accounts receivable $13,800 Inventory 42,000 Patent 12,200 Investments 30,700 Prepaid insurance 7,700 Notes receivable, due 2024 51,800 Investments consist of treasury bills that were purchased in November, 2021, and mature in January, 2022. Prepaid insurance is for two years. What amount should be included in the current assets section of Janson’s December 31, 2021, balance sheet?
Answer:
$90,350
Explanation:
Accounts receivable $13,800 ⇒ current assets
Inventory 42,000 ⇒ current assets since the company expects to sell them in less than a year
Patent 12,200 ⇒ intangible non-current asset
Investments 30,700 ⇒ current asset since they mature in less than one month
Prepaid insurance 7,700 ⇒ only half of it is considered a current asset since it covers a 2 year period
Notes receivable, due 2024 51,800 ⇒ non-current asset
total current assets = $13,800 + $42,000 + $30,700 + ($7,700/2) = $90,350
Peter Plaintiff is citizen of Kentucky. He drives to Tennessee and purchases a lawn mover from Lousy Lawn Mowers, Inc. Peter Plaintiff returns to Kentucky and is seriously injured when the lawnmower explodes during normal use. Lousy Lawn Mowers, Inc. does not do business in Kentucky and is incorporated in Delaware. May Peter Plaintiff bring a lawsuit against Lousy Lawn Mowers, Inc. in a state or federal court, and why?
Answer:
state court.
Explanation:
It is a matter of diversity of citizenship between the two parties in different states. This case falls under federal jurisdiction only if the matter is federal law or statute, or if the amount is above $ 75,000. This is a product liability case, which is a state case and is therefore being heard in state courts (Kentucky) because the plaintiff is a citizen of the state of KentuckyTB MC Qu. 14-128 (Algo) On June 30, 2021, K Co. had outstanding... On June 30, 2021, K Co. had outstanding 9%, $15,000,000 face value bonds maturing on June 30, 2026. Interest is payable semiannually every June 30 and December 31. On June 30, 2021, after amortization was recorded for the period, the unamortized bond premium was $65,000. On that date, K acquired all its outstanding bonds on the open market at 99 and retired them. At June 30, 2021, what amount should K Co. recognize as gain on redemption of bonds before income taxes
Answer:
$215,000
Explanation:
Calculation for the amount that K Co. Should recognize as gain on redemption of bonds before income taxes
First step is to find book value of bonds at June 30, 2021
Book value of bonds= ($15,000,000 + $65,000)
Book value of bonds=$15,065,000
Second step is to find the amount of gain on redemption of bonds before income taxes
Gain on redemption of bonds before income taxes=$15,065,000-( 99% × $15,000,000)
Gain on redemption of bonds before income taxes=$15,065,000-$14,850,000
Gain on redemption of bonds before income taxes=$215,000
Therefore the amount that K Co. Should recognize as gain on redemption of bonds before income taxes will be $215,000
list down 10,10 real world examples of input and output markets (domestic and international)
Answer:
1) Example of an input market: you are an employee at CVS
input ⇒ labor (your work)
2) Example of an output market: you purchase medicines at CVS
output ⇒ goods (medicines)
3) Example of an input market: you deposit your savings at a bank
input ⇒ capital (savings)
4) Example of an output market: a company gets a loan from the bank
output ⇒ capital (loan)
5) Example of an input market: you have 2 houses and rent one of them
input ⇒ land (real estate)
6) Example of an output market: you rent a room at the university's dorm
output ⇒ land (room)
7) Example of an input market: a foreign company sells oil to the US
input ⇒ land (oil)
8) Example of an output market: an American company exports PVC products
output ⇒ goods (PVC products)
9) Example of an input market: you purchase bonds from Costco
input ⇒ capital (your money)
10) Example of an output market: Costco pays interest (coupons) to its bondholders
output ⇒ capital (interests)
Explanation:
Input factors are the resources used to produce goods and services.
Output factors are the goods or services that are produced using input factors.
Chris has been newly appointed as the head of the HR team at Cuffington Corp. In an attempt to establish a more efficient and reliable workflow, Chris has taken up the responsibility of creating job descriptions and job specifications for the newly hired and current engineers within the organization. While doing so, Chris gathers information about the knowledge, skills, abilities, and other characteristics (KSAOs) required for an engineer to successfully perform the job. How will determining the KSAOs most benefit the organization
Answer:
KSAOs play a significant role in interviews and selection decisions
Explanation:
According to the given situation, Chris has been hired as an HR team at C Corp. and he took the responsibility of developing job descriptions and specialization for the vacancy of engineers.
Here Chris collects relevant data about the KSAO's so that he can choose a specialized engineer for an organization.
So, in the above case, the relevant answer is KSAOs play a significant role in interviews and selection decisions.
Which of the following is true of marketing information systems?Group of answer choicesThey require search engine software and a word processing system to function.They are designed exclusively to handle information from internal sources.They consist of a coordinated collection of data, tools, techniques, and models to gather and interpret information for decision making.They cannot function without an efficient transaction processing system and a learning management system.
Answer:
They consist of a coordinated collection of data, tools, techniques, and models to gather and interpret information for decision making.
Explanation:
Marketing information systems consist of a coordinated collection of data, tools, techniques, and models to gather and interpret information for decision making. Basically, it can be defined as a set of components or computer systems, which is used to collect, store, and process market data (informations), as well as continuous or regular dissemination of these informations, from both the external and internal sources of information to the marketers for better decisions making such as product packaging, pricing, distribution, advertisements, innovation, sales promotions etc.
Additionally, the internal sources of marketing information includes invoice, statement of cash flows, balance sheet, customer database, product database, operations data etc. These marketing information can be used to measure the effectiveness and efficiency of various marketing strategies adopted by an organization or business firm.
Some companies cross-list their shares, meaning that their stock trades on more than one stock exchange. For example, BlackBerry Limited, the maker of BlackBerry mobile devices, trades on both the Toronto Stock Exchange and NASDAQ. If its price in Toronto is Canadian dollars per share and anyone can exchange Canadian dollars for U.S. dollars at the rate of per , what must BBRY's price be on NASDAQ?
Answer:See explanation
Explanation:
Your question isn't complete. But let's slot some values into the question in order to give you an idea on how to solve it.
Some companies cross-list their shares, meaning that their stock trades on more than one stock exchange. Forexample, BlackBerry Limited, the maker of BlackBerry mobile devices, trades on both the Toronto StockExchange and NASDAQ. If its price in Toronto is 56 Canadian dollars per share and anyone can exchange Canadian dollars for U.S. dollars at the rate of US$0.87 per C$1.00, what must BBRY's price be on NASDAQ?
Price in Toronto is given as:
= C$ 56 per share
Exchange rate is given as:
= US $ 0.87 per C$ 1.00
Therefore, BBRY's price be on NASDAQ will be:
= (56/1) x 0.87
= $48.72
Hence, BBRY's price be on NASDAQ will be $48.72
Consider a risky portfolio. The end-of-year cash flow derived from the portfolio will be either $50,000 or $150,000, with equal probabilities of 0.5. The alternative riskless investment in T-bills pays 5%. (a) If you require a risk premium of 10%, how much will you be willing to pay for the portfolio? (b) Suppose the portfolio can be purchased for the amount you found in (a). What will the expected rate of return on the portfolio be? (c) Now suppose you require a risk premium of 15%. What is the price you will be willing to pay now? (d) Comparing your answers to (a) and (c), what do you conclude about the relationship between the required risk premium on a portfolio and the price at which the portfolio will sell?
Answer:
Kindly check explanation
Explanation:
Given the following :
Risk free return (risk less investment) = 5%
Cashflow derived from portfolio = $50,000 or $150,000 each at a probability of 0.5
(a) If you require a risk premium of 10%, how much will you be willing to pay for the portfolio?
Risk premium = 10%
Required return on portfolio = risk premium + risk free return = (10% + 5%) = 15%
Expected value of cashflow:
(0.5 × $50,000) + (0.5 × $150,000)
$25,000 + $75,000 = $100,000
Value of portfolio = Amount paid(a) × (1 + required return)
100,000 = a( 1 + 0.15)
100,000 = 1.15a
a = (100,000 / 1.15)
a = 86956.521
a = $86,956.5
B) If amount paid for portfolio = $86,956.5
Expected rate of return :
(Expected value - amount paid) / amount paid
= ($100,000 - $86,956.5) / $100,000
= $13043.5 / $100,000
= 0.130435 = 13.04%
C.) Now suppose you require a risk premium of 15%. What is the price you will be willing to pay now?
Risk premium = 15%
Required return on portfolio = risk premium + risk free return = (15% + 5%) = 20%
Value of portfolio = Amount paid(a) × (1 + required return)
100,000 = a( 1 + 0.20)
100,000 = 1.20a
a = (100,000 / 1.20)
a = 83333.333
a = $83,333.3
D.)
At a required risk premium of 10%, portfolio will sell at $86,956.5
At a required risk premium of 15%, portfolio will sell at $83,333.3
Hence, the price at which a portfolio will sell decreases as risk premium increases.
Flounder Architects incorporated as licensed architects on April 1, 2022. During the first month of the operation of the business, these events and transactions occurred:
Apr. 1 Stockholders invested $21,420 cash in exchange for common stock of the corporation.
1 Hired a secretary-receptionist at a salary of $446 per week, payable monthly.
2 Paid office rent for the month $1,071.
3 Purchased architectural supplies on account from Burmingham Company $1,547.
10 Completed blueprints on a carport and billed client $2,261 for services.
11 Received $833 cash advance from M. Jason to design a new home.
20 Received $3,332 cash for services completed and delivered to S. Melvin.
30 Paid secretary-receptionist for the month $1,784.
30 Paid $357 to Burmingham Company for accounts payable due.
Journalize the transactions. (If no entry is required, select "No entry" for the account titles and enter O for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually. Record journal entries in the order presented in the problem.)
Answer:
Flounder Architects
General Journal
Apr. 1
Cash $21,420 (debit)
Common Stock $21,420 (credit)
Cash Received in Exchange of Common Stock
Apr. 1
Salaries Expense $1,784 (debit)
Salaries Payable $1,784 (credit)
Secretary-receptionist salary due at end of month
Apr. 2
Rent Expenses $1,071 (debit)
Cash $1,071 (credit)
Paid for Rent
Apr. 3
Supplies $1,547 (debit)
Accounts Payable ; Burmingham Company $1,547 (credit)
Architectural supplies purchased on credit
Apr. 10
Accounts Receivable $2,261 (debit)
Service Revenue $2,261 (credit)
Services completed but not yet paid for
Apr. 11
Cash $833 (debit)
Deferred Revenue $833 (credit)
Received cash for services to be completed
Apr. 20
Cash $3,332 (debit)
Service Revenue $3,332 (credit)
Cash received for services completed
Apr. 30
Salaries Payable $1,784 (debit)
Cash $1,784 (credit)
Secretary-receptionist salary paid
Apr. 30
Accounts Payable : Burmingham Company $357 (debit)
Cash $357 (credit)
Partial settlement of account payable
Explanation:
See the Journal Entries and Narrations that i have prepared above.
A manager is applying the Transportation Model of linear programming to solve an aggregate planning problem. Demand in period 1 is 100 units, and in period 2, demand is 150 units. The manager has 125 hours of regular employment available for $10/hour each period. In addition, 50 hours of overtime are available for $15/hour each period. Holding costs are $2 per unit each period. a. How many hours of regular employment should be used in period 1? (Assume demand must be met in both periods 1 and 2 for the lowest possible cost and that production is 1 unit per hour.)
Answer:
125 (hours)
Explanation:
Remember, the Linear programming model is simply a technique used to optimize a particular set of processes.
Note the statement from the question, "the manager has 125 hours of regular employment available for $10/hour each period." Which means this would form part of the constraints of the linear programming model.
In other words, the number of total hours available in period 1 is 125 hours.
Before the year began, Jupiter Manufacturing estimated that manufacturing overhead for the year would be $200,600 and that 25,600 direct labor hours would be worked. Actual results for the year included the following: Actual manufacturing overhead cost $182,500 Actual direct labor hours 20,000 If the company allocates manufacturing overhead based on direct labor hours, the manufacturing overhead for the year would have been ? (Round intermediary calculations to the nearest cent.) A. $18,100 overallocated. B. $18,100 underallocated. C. $25,700 overallocated. D. $25,700 underallocated.
Answer:
$25,700 Underallocated.
Explanation:
Calculation for the manufacturing overhead for the year
First step is to find the Predetermined overhead allocation rate using this formula
Predetermined overhead allocation rate = Manufacturing overhead/ Direct labor hours
Let plug in the formula
Predetermined overhead allocation rate=$200,600/25,600
=7.8359375
Second step is to multiply Predetermined overhead allocation rate by Actual direct labor hours
7.84*20,000
=$156,800
Lasr step is to find the manufacturing overhead for the year
Manufacturing overhead=$182,500-$156,800
Manufacturing overhead=$25,700 Underallocated
Therefore the manufacturing overhead for the year is $25,700 Underallocated
1. The doctrine of judicial review allows:
a. the judicial branch to decide whether laws or actions of the other two branches are constitutional
b. the president to revoke United States Supreme Court decisions
c. the judicial branch to write laws when Congress is unwilling to do so
Answer:
a. the judicial branch to decide whether laws or actions of the other two branches are constitutional
Explanation:
The two branches that can be subjected to are the Executive and the Legislative arm of government. What this entails is that a court can invalidate laws or actions made by the legislature or executives possibly for violating the constitution. This is usually done by the Supreme Court of a country.
Knowledge Check 01 On January 1, Year 1, Manlier Inc. leased equipment costing $45,000 to one of its customers. The sales-type lease agreement specifies six annual payments of $15,000 beginning on that date. The present value of the annual lease payments is $73,619. At the end of the lease, the equipment will be returned to Manlier and is expected to have a residual value of $5,000. The present value of that residual value is $2,822. Complete the appropriate journal entry recorded by Manlier at the beginning of the lease. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Round your answers to the nearest whole number.)
Answer:
Dr Lease receivable $76,441
Dr Cost of goods sold $42,178
Cr Sales revenue $73,619
Cr Equipment $45,000
Explanation:
Preparation of Journal entry
Based on the information given we were told that leased equipment cost the amount of $45,000 in which the lease agreement as well has a 6 annual payments of the amount of $15,000 while the present value of the lease agreement is the amount of $73,619 and the present value of the residual value is the amount of $2,822 which means that the Journal entry at beginning of the lease will be recorded as:
Dr Lease receivable $76,441
($73,619+$2,822)
Dr Cost of goods sold $42,178
($45,000-$2,822)
Cr Sales revenue $73,619
Cr Equipment $45,000
Accrued salaries owed to employees for October 30 and 31 are not considered in preparing the financial statements for the year ended October 31. Indicate which items will be erroneously stated, because of the error, on (A) the income statement for the year and (B) the balance sheet as of October 31. Also indicate whether the items in error will be overstated or understated.
Answer:
Indication of items erroneously stated on:
A) the income statement for the year
Salaries Expense will be understated.
Therefore, the Net Income will be overstated.
B) the balance sheet as of October 31:
Salaries Expense Payable (current liabilities) will be understated.
Explanation:
When accrued salaries are not accounted for in the financial statements for an accounting period, it means that the revenues generated for that period are not being matched with the expenses incurred in generating the revenues. Such omission does not agree with the accrual concept and the matching principle of generally accepted accounting principles. These require that expenses are accrued whether paid for or not, and that expenses are matched to the period's revenue since they are necessarily incurred in generating such revenue.
The following transactions occurred during December 31, 2021, for the Microchip Company. On October 1, 2021, Microchip lent $115,000 to another company. A note was signed with principal and 8% interest to be paid on September 30, 2022. On November 1, 2021, the company paid its landlord $5,400 representing rent for the months of November through January. Prepaid rent was debited. On August 1, 2021, collected $10,800 in advance rent from another company that is renting a portion of Microchip’s factory. The $10,800 represents one year’s rent and the entire amount was credited to deferred rent revenue. Depreciation on office equipment is $4,050 for the year. Vacation pay for the year that had been earned by employees but not paid to them or recorded is $7,550. The company records vacation pay as salaries expense. Microchip began the year with $1,850 in its asset account, supplies. During the year, $6,200 in supplies were purchased and debited to supplies. At year-end, supplies costing $3,100 remain on hand. Required: 1. & 2. If Microchip’s accountant employed reversing entries for accruals, prepare the adjusting entries at the end of 2021 for only those entries that would be reversed. 3. Prepare the appropriate reversing entries at the beginning of 2022.
Answer:
Reversing entries are given below
Explanation:
The accountant would reverse the adjusting entries of the accrual of salaries payable and the accruals of interest receivable.
December 31, 2021 (To record interest receivable)
DEBIT CREDIT
Interest receivable [$115,000*8%*3/12] 2300
Interest revenue 2300
December 31, 2021 (To record salaries payable)
DEBIT CREDIT
Salaries expense 7550
Salaries payable 7550
January 1, 2022 (To reverse the entry recorded on December 31, 2021)
DEBIT CREDIT
Interest revenue 2300
Interest receivable 2300
January 1, 2022 (To reverse the entry recorded on December 31, 2021)
DEBIT CREDIT
Salaries payable 7550
Salaries expense 7550
Robert wants to get serious about saving for a new car. Which account would you recommend? Why?
Cindy has been working for 8 years, and she’s built up a huge emergency fund -- $45,000, which would be 6 months of her salary. She’s hoping to earn a bit more interest than she currently is with that $45,000 just sitting in her traditional bank’s savings account. Which account would you recommend? Why?
Janelle likes to keep all her savings goals separate, so she has an account for each one, including an account to save for her college textbooks every semester. She buys books about every 6 months, with roughly $550 due each time. She likes to save the money up in installments, with auto-deposits from each of her twice monthly paychecks. She’s wondering if her online savings account, earning 0.75%, is still her best option for monthly deposits toward her textbooks. Which account would you recommend? Why?
Answer:
1) Money Market Savings Account
2) Online Savings Account
Explanation:
1) Money market accounts which are also known as money market savings or deposit accounts, are accounts that may give interest on a tier bases and may also give waivers on due fees if a customer is able to maintain a particular balance per month
Money market accounts are accounts that is better adapted for a customer that is able to maintain a substantial balance in their bank accounts and would like to be offered a higher interest than that which is given by a basic savings account
2) For Janelle, given that her savings duration are for a period of t months and the amount save is $550, the savings account with a high combined interest rate and flexibility is the online savings account, and given that her current online savings account earns 0.75%, which is high compared to average interest rate of online savings account, her online savings account is still her best option.
Reese's use of illegal drugs limits her ability to walk properly. The elevator at her office was not working for many months, so Reese needed to climb two flights of stairs and had difficulty getting to her desk. She tried suing her company under the Americans with Disabilities Act, arguing that her company discriminates against individuals who cannot perform major life activities. Which of the following would weaken Reese's argument?
A) Reese is not a senior employee.B) The ADA prohibits discrimination only against workers who are over the age of 40.C) The ADA does not cover conditions of substance abuse.D) Reese is not pregnant.E) The ADA applies only to the decisions or actions of the government.
The correct answer is C) The ADA does not cover conditions of substance abuse.
Explanation:
The purpose of the ADA (Americans with Disabilities Act) is to protect people with disabilities from abuses or discrimination. This includes the protection against discrimination at work in factors such as working conditions, hiring processes, etc. Additionally, this act protects almost all disabilities except by those related to conditions such as substance abuse or addictions. In this context, the ADA would not protect Reese because her disability is related to substance abuse, and therefore, this would weaken her argument.
One Protab computer. A 6-month limited warranty. This warranty guarantees that Creative will cover any costs that arise due to repairs or replacements associated with defective products for up to six months. A coupon to purchase a Creative Probook e-book reader for $525, a price that represents a 30% discount from the regular Probook price of $750. It is expected that 20% of the discount coupons will be utilized. A coupon to purchase a one-year extended warranty for $40. Customers can buy the extended warranty for $80 at other times if they do not use the $40 coupon. Creative estimates that 30% of customers will purchase an extended warranty. Creative does not sell the Protab without the limited warranty, option to purchase a Probook, and the option to purchase an extended warranty, but estimates that if it did so, a Protab alone would sell for $855. Required: 1. & 2. Indicate below whether each item is a separate performance obligation and allocate the transaction price of 100,000 Protab Packages to the separate performance obligations in the contract. 3. Prepare a journal entry to record sales of 100,000 Protab Packages.
Answer:
the journal entry to record the sale of 100,000 Protab packages:
Dr Cash 88,000,000
Cr Sales revenue 82,500,000
Cr Deferred revenue - discount option 4,338,000
Cr Deferred revenue - extended warranty 1,162,000
Explanation:
some information was missing, so I looked for similar questions:
Each Protab package costs $880
stand alone selling price of a Protab is $855
stand alone price of Probook coupon = ($750 x 30%) x 20% = $45
stand alone price of extended warranty coupon = ($80 - $40) x 30% = $12
item stand alone prices % of package price allocation of
transaction $
Protab $855 93.75% $825.00
Probook coupon $45 4.93% $43.38
Ext. warranty coup. $12 1.32% $11.62
total $912 100% $880.00
On March 12, Klein Company sold merchandise in the amount of $7,800 to Babson Company, with credit terms of 2/10, n/30. The cost of the items sold is $4,500. Klein uses the perpetual inventory system and the gross method of accounting for sales. On March 15, Babson returns some of the merchandise. The selling price of the merchandise is $600 and the cost of the merchandise returned is $350. Babson pays the invoice on March 20, and takes the appropriate discount. The journal entry that Klein makes on March 20 is:
Answer:
Cash 7,056
Sales discounts 144
Accounts receivable 7,200
Explanation:
The journal entry is shown below:
Cash $7,056
Sales discounts $144 ($7,200 × 2%)
To Accounts receivable $7,200 ($7,800 - $600)
(Being the cash is recorded)
Here it debited the cash and sales discount as it increased the assets and discounts also credited the account receivable as it decreased the assets
On May 31, 2018, the Arlene Corporation adopted a plan to sell its cosmetics line of business, considered a component of the entity. The assets of the component were sold on October 13, 2018, for $1,120,000. The component generated operating income from January 1, 2018, through disposal of $300,000. In its income statement for the year ended December 31, 2018, the company reported before-tax income from operations of a discontinued component of $620,000. What was the book value of the assets of the cosmetics component
Answer:
$800,000
Explanation:
The calculation of book value of the assets of the cosmetics component is given below:-
Gain on Sale of the Assets = Income from Operation of a Discontinued Components - Income from Operations
= $620,000 - $300,000
= $320,000
Gain/Loss on Sale of Asset = Sale Value of Assets - Book Value of Assets
= $1,120,000 - $320,000
= $800,000
The difference between a budget and a standard is that standards are excluded from the cost accounting system, whereas budgets are generally incorporated into the cost accounting system. a budget expresses management's plans, while a standard reflects what actually happened. a budget expresses what costs were, while a standard expresses what costs should be. a budget expresses a total amount, while a standard expresses a unit amount.
Answer:
The correct answer is the last option: a budget expresses a total amount, while a standard expresses a unit amount.
Explanation:
On the one hand, a budget is the name given, in the business field to an estimation done by the managers of the company that shows how much revenue and expenses the managers are expecting that will happen over a specified future period of time and that is normally compared to the reality and the basics of the process of the company while the production is on going.
On the other hand, a standard when it comes to terms of business refers more specifically to units because an standard is something that the managers of the company are expecting to acquire and to achieve over a certain period of time always focusing in the unit of production, not in the total amount.
the specific purpose statement is declaritive by nature true or false?
Answer: true
Explanation:
(the central idea) is the theme of the speech stated in the form of a single, ... chronological follows the natural sequential order of the main points. ... each main point and supporting point is stated in sentence form as a declarative statement.
Rustafson Corporation is a diversified manufacturer of consumer goods. The company's activity-based costing system has the following seven activity cost pools
Activity Cost Pool
Estimated
Overhead Cost
Expected Activity
Labor-related $ 52,000 8,000 direct labor-hours
Machine-related $ 15,000 20,000 machine-hours
Machine setups $ 42,000 1,000 setups
Production orders $ 18,000 500 orders
Product testing $ 48,000 2,000 tests
Packaging $ 75,000 5,000 packages
General factory $ 108,800 8,000 direct labor-hours
Compute the activity rate for each activity cost pool. (Round your answers to 2 decimal places.)
Activity Cost Pool Activity Rate
Labor-related $ per DLH
Machine-related $ per MH
Machine setups $ per setup
Production orders $ per order
Product testing $ per test
Packaging $ per package
General factory $ per DLH
Compute the company's predetermined overhead rate, assuming that the company uses a single plantwide predetermined overhead rate based on direct labor-hours. (Round your answer to 2 decimal places.)
Predetermined overhead rate $ per DLH
Answer:
Rustafson Corporation
1. Computation of the activity rate for each activity cost pool:
Activity Cost Pool Activity Rate
Labor-related $6.50 per DLH
Machine-related $0.25 per MH
Machine setups $42 per setup
Production orders $36 per order
Product testing $24 per test
Packaging $15 per package
General factory $13.60 per DLH
2. Computation of the predetermined overhead rate:
Predetermined overhead rate = Total overhead divided by total direct labor hours
= $358,800/8,000
= $44.85
Explanation:
a) Data and Calculations:
Estimated Overhead Cost Expected Activity Activity Rate
Labor-related $ 52,000 8,000 direct labor-hours $6.50 (52,000/8,000)
Machine-related $ 15,000 20,000 machine-hours $0.25 ($15,000/20,000)
Machine setups $ 42,000 1,000 setups $42 ($42,000/1,000)
Production orders $ 18,000 500 orders $36 ($18,000/500)
Product testing $ 48,000 2,000 tests $24 ($48,000/2,000)
Packaging $ 75,000 5,000 packages $15 ($75,000/5,000)
General factory $ 108,800 8,000 direct labor-hours $13.60 ($108,800/8,000)
Total overhead = $358,800
Total direct labor hours = 8,000 DLH
Predetermined overhead rate = Total overhead divided by total direct labor hours
= $358,800/8,000
= $44.85
