Answer:
Simon Company
a. Expressing the balance sheets in common-size percents:
Simon Company's Year-end Balance Sheet:
At December 31 Current Yr % 1 Yr Ago % 2 Yrs Ago %
Assets
Cash $31,800 6% $35,625 8% $37,800 10%
Accounts receivable, net 89,500 17% 62,500 14% 50,200 13.3%
Merchandise inventory 112,500 22% 82,500 19% 54,000 14.3%
Prepaid expenses 10,700 2% 9,375 2% 5,000 1.3%
Plant assets, net 278,500 53% 255,000 57% 230,500 61.1%
Total assets $523,000 100% $445,000 100% $377,500 100%
Liabilities and Equity:
Accounts payable $129,900 25% $75,250 17% $51,250 14%
Long-term notes payable 98,500 19% 101,500 23% 83,500 22%
Common stock, $10
par value 163,500 31% 163,500 37% 163,500 43%
Retained earnings 131,100 25% 104,750 23% 79,250 21%
Total liabilities & equity $523,000 100% $445,000 100% $377,500 100%
b. The change in accounts receivable has been unfavorable. It has increased year on year, showing that the management has not improved on its collection policies and practices. This conclusion is based on the assumption that annual sales have not changed in the last three years.
c. The change in merchandise inventory has been unfavorable. It has increased in its percentages over total assets over the last three years. It shows that the management is increasingly keeping excess inventory. Again, this conclusion is based on the assumption that annual sales have not changed in the last three years.
Explanation:
a) Data and Calculations:
Simon Company's Year-end Balance Sheet:
At December 31 Current Yr 1 Yr Ago 2 Yrs Ago
Assets
Cash $31,800 $35,625 $37,800
Accounts receivable, net 89,500 62,500 50,200
Merchandise inventory 112,500 82,500 54,000
Prepaid expenses 10,700 9,375 5,000
Plant assets, net 278,500 255,000 230,500
Total assets $523,000 $445,000 $377,500
Liabilities and Equity:
Accounts payable $129,900 $75,250 $51,250
Long-term notes payable 98,500 101,500 83,500
Common stock, $10
par value 163,500 163,500 163,500
Retained earnings 131,100 104,750 79,250
Total liabilities & equity $523,000 $445,000 $377,500
b) The common-size percents are determined by taking a balance sheet account and expressing it as percentage of the total assets. For example, the common stock for the current year is $163,500. When this is expressed as a percentage of total assets, which is equal to total liabilities and equity, we have it as 31% ($163,500/$523,000 * 100) approximately.
a. The balance sheet of Simon Company is expressed in common-size percentages.
b. The shift in accounts receivable has been negative. It has risen year after year, indicating that management has not changed its collection policies and practices.
c. The merchandise inventory change has been unfavorable. Over the last three years, its percentage of total assets has risen. It demonstrates that management is progressively stockpiling excess goods.
a. Expressing the balance sheets in common-size percentages:
Simon Company's Year-end Balance Sheet:
At December 31 Current Yr % 1 Yr Ago % 2 Yrs Ago %
Assets
Cash $31,800 6% $35,625 8% $37,800 10%
Accounts receivable, net 89,500 17% 62,500 14% 50,200 13.3%
Merchandise inventory 112,500 22% 82,500 19% 54,000 14.3%
Prepaid expenses 10,700 2% 9,375 2% 5,000 1.3%
Plant assets, net 278,500 53% 255,000 57% 230,500 61.1%
Total assets $523,000 100% $445,000 100% $377,500 100%
Liabilities and Equity:
Accounts payable $129,900 25% $75,250 17% $51,250 14%
Long-term notes payable 98,500 19% 101,500 23% 83,500 22%
Common stock, $10
par value 163,500 31% 163,500 37% 163,500 43%
Retained earnings 131,100 25% 104,750 23% 79,250 21%
Total liabilities & equity $523,000 100% $445,000 100% $377,500 100%
For expressing the common-size percentage the amount for total asset is taken as base value.
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The market for corporate control
leads to less diversification
leads to higher firm profits
limits unprofitable acquisitions by managers
leads to higher managerial compensation
none of the above
Answer:
The market for corporate control
limits unprofitable acquisitions by managers
Explanation:
Some managers engage in the indiscriminate acquisition of other companies because they are interested in increasing their prestige. Prestige and power are increased by managing a bigger entity. In this way, the market for corporate control has been known to limit managerial discretion. Managerial discretion refers to the freedom that managers exercise in the pursuit of their own objectives (pay, power, status, and prestige) rather than shareholders' interests. It also creates room for the shareholders to replace inefficient management. It enables the management team to pursue shareholders' interests, at least in the interim.
Based on your focus group, you ask your product research team to propose different formulas for turmeric meal replacement shakes. Keeping in mind that all In Fine Fettle's products use ingredients that are of higher quality than the competition's, your food scientists offer you three different formulations. Choose the formula that would be most attractive to the target market.
A. Has the highest turmeric content and anti—inflammatory properties
Made with quality ingredients
Taste rated as 5/10
B. Has the second-highest turmeric content and anti—inflammatory properties
Made with superior quality ingredients
Taste rated as 7/10
C. Has the lowest turmeric content and anti—inflammatory properties
Made with quality ingredients
Taste rated as 9/10
Answer: B. Has the second-highest turmeric content and anti-inflammatory properties
Made with superior quality ingredients
Taste rated as 7/10
Explanation:
The formula in B would be the most attractive because it is a compromise between the first and the second more 'extreme' formulas.
The first one for instance has the highest turmeric content but is lacking in taste. The third has the lowest content and is sweet. Consumers would most probably go for a compromise and pick the formula with the second highest content and not to bad taste wise whilst still being made of superior ingredients.
Bratton corporation had 8200 units of work in process on April 1. During April , 22300 units were completed and as of April 30 6040 units remained in production. How many many units were started during April?
Answer:
20,140 units
Explanation:
The number of units started will be the units completed in April plus the ending inventory minus the opening work in progress.
Units started = completed unit + ending inventory - beginning inventory.
Units started = 22,300 + 6,040 -8,200
units started = 28,340 - 8200
units started =20,140
True or False: A FICO score can be as low as 200 and as high
as 900
Answer:
FALSE
Explanation:
Cynthia Cybersquatter registered a domain name that would cause confusion to an existing trademark belonging to Frank Famous. Frank may not obtain which of the following remedies from Cynthia if he prevails in his Anticybersquatting Consumer Protection Act action?
a. attorney fees and costs
b. injunctive relief that bars Frank from using the name
c. profits Cindy made on the use of domain name
d. forfeiture of the domain name
Answer:
The remedies which Frank may not obtain from Cynthia if he prevails in his Anticybersquatting Consumer Protection Act action is:
a. attorney fees and costs
Explanation:
This is because the Anticybersquatting Consumer Protection Act (ACPA) provides that courts may award attorneys' fees for violations of the Act in "exceptional cases" under Section 1117(a). The Anticybersquatting Consumer Protection Act was enacted on November 29, 1999. The law applies to all domain names whether they were registered before the enactment date or after. The Act aims to avoid confusion in domain name registrations.
Matt deposits $4,000 in a savings account at 2% interest. What is his real interest rate if the current inflation rate is 1.5%?
1%
3.5%
3%
0.5%
Answer:
0.5%
Explanation:
The real rate of interest considers the prevailing inflation rate. It is the nominal or quoted interest rate adjusted for inflation.
The real interest rate is determined by subtracting the inflation rate from the nominal rate.
In this case, the inflation rate is 1.5%, and the nominal or quoted rate is 2%.
The real rate = 2% - 1.5%
=0.5%
Sundance Systems has the following transactions during July.
July 5 Purchases 44 LCD televisions on account from Red River Supplies for $2,700 each, terms 4/10, n/30.
July 8 Returns to Red River two televisions that had defective sound.
July 13 Pays the full amount due to Red River.
July 28 Sells remaining 42 televisions from July 5 for $3,200 each on account.
Record the transactions of Sundance systems, assuming the company uses a perpetual inventory system.
Answer:
Jul-05 Dr Inventory $118,800
Cr Accounts Payable $118,800
Jul-08 Dr Accounts Payable $5,400
Cr Inventory $ 5,400
Jul-13 Dr Accounts Payable $ 113,400
Cr Cash $108,864
Cr Inventory $4,536
Jul-28 Dr Accounts receivables $ 134,400
Cr Sales revenue $ 134,400
Jul-28 Dr Cost of Goods Sold $108,864
Cr Inventory $108,864
Explanation:
Preparation of the journal entry to Record the transactions of Sundance systems, assuming the company uses a perpetual inventory system
Jul-05 Dr Inventory $118,800
Cr Accounts Payable $118,800
(44 LCDs x $2700)
(Being to record inventory purchased on account)
Jul-08 Dr Accounts Payable $5,400
Cr Inventory $ 5,400
(2 LCDs x $2700)
(Being to record inventory returned that were defective)
Jul-13 Dr Accounts Payable $ 113,400
(42 LCDs x $ 2700)
Cr Cash $108,864
($ 113,400-$4,536)
Cr Inventory $ 4,536
(42 LCDS x $ 2700 x 4%)
(Being to record Amount paid within discount term of 10 days)
Jul-28 Dr Accounts receivables $ 134,400
[42 LCDs x $ 3200]
Cr Sales revenue $ 134,400
(Being to record Inventory sold)
Jul-28 Dr Cost of Goods Sold $108,864
(42 LCDS x $ 2700 x 96%)
Cr Inventory $108,864
(Being to record Cost of inventory sold adjusted)
The transactions of Sundance systems when assuming the company uses a perpetual inventory system.
The record is shown below
Date General Journal Debit Credit Working
Jul-05 Inventory 128,800 [46 LCDs x $2800]
Accounts Payable $128,800 [46 LCDs x $2800]
(Inventory purchased on account)
Jul-08 Accounts Payable $16,800 [6 LCDs x $2800]
Inventory $16,800 [6 LCDs x $2800]
(Inventory returned that were defective)
Jul-13 Accounts Payable $112,000 [40 LCDs x $ 2800]
Cash $109,760 [$112000 - $2240]
Inventory $2,240 [40 LCDS x $ 2800 x 2%(Amount paid within discount term of 10 days)
Jul-28 Accounts receivables $132,000 [40 LCDs x $ 3300]
Sales revenue $132,000 [40 LCDs x $ 3300]
(Inventory sold)
Jul-28 Cost of Goods Sold $109,760 [40 LCDS x $ 2800 x 98%]
Inventory $109,760 [Balance in Inventory account credited]
(Cost of inventory sold adjusted)
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Perhaps the most important kind of capital is human capital. For example, most lawyers spend years learning to practice law. Lawyers are willing to make large investments in their human capital because they expect to be compensated for doing so when they begin work. Suppose the government nationalizes the market for legal services, resulting in lower compensation for lawyers. Assume lawyers cannot easily move to other countries.
True or False: The investment in human capital for lawyers is not subject to post-investment hold-up.
Answer: False
Explanation:
Lawyers investing heavily in their human capital is quite subject to post-investment hold-up which refers to returns being held-up after a person has already gone into an investment.
The post-investment hold-up here is that the government nationalized the legal profession and offered lower salaries to lawyers who expected to be making a lot of money.
Should prospective lawyers see this, they will become discouraged and invest less in human capital there by proving that their investment is subject to post-investment hold-up.
The following transactions occur for Cardinal Music Academy during the month of October: Provide music lessons to students for $12,500 cash. Purchase prepaid insurance to protect musical equipment over the next year for $3,660 cash. Purchase musical equipment for $15,500 cash. Obtain a loan from a bank by signing a note for $21,000.
Answer:
a. Journal entry to record music lesson
Date Account title and Explanation Debit Credit
October Cash $12,500
Service revenue $12,500
(To record music lesson for cash)
b. Journal entry to record prepaid insurance purchase
Date Account title and Explanation Debit Credit
October Prepaid insurance $3,660
Cash $3,660
(To record prepaid insurance paid for next year)
c. Journal entry to record musical equipment purchased
Date Account title and Explanation Debit Credit
October Equipment $15,500
Cash $15,500
(To record musical equipment purchase for cash)
d. Journal entry to record
Date Account title and Explanation Debit Credit
October Cash $21,000
Notes payable $21,000
(To record loan taken by signing a note)
According to the information mentioned in the course, which of the following color schemes is best practice for financial modeling?
a. Hard Codes in Black, Hard Codes in Red
b. Hard Codes in Red, Formulas in Black
c. Hard Codes in Blue, Formulas in Black
d. Hard Codes in Black, Formulas in Blue
Answer:
c. Hard Codes in Blue, Formulas in Black
Explanation:
The color schemes that shows the best practice for the financial modelling is as follows;
Blue - inputs or hard coded data like historical values, etc
Black - formulas, calculations to the same sheet
Green - formulas, calculations to the other sheet
So the option c is correct
And, the rest of the options are incorrect
An employee works 42 hours (42 - 40 were overtime hours) during a workweek in December of 2018. He earns $40.50/hour, with his employer paying 1.5 times the regular rate of pay for overtime hours. To date, he has earned $127,800 during the year. He has requested that his employer withhold 7% of gross pay, which is to be contributed to a 403(b) plan.
Taxable income for federal income tax withholding = $
Taxable income for social security tax = $
Taxable income for medicare tax = $
Answer:
For 2018, Social security wage limit is $128,400
Gross earning of the period = (40*40.50)+(2*60.75) = $1,741.50
a. Taxable income for federal income tax withholding = Gross Income = $1,741.50
b. Taxable income for social security tax = $128,400 - $127,800 = $600
c. Taxable income for medicare tax = $1,741.50
Brian lives in Chicago and runs a business that sells pianos. In an average year, he receives $793,000 from selling pianos. Of this sales revenue, he must pay the manufacturer a wholesale cost of $430,000; he also pays wages and utility bills totaling $301,000. He owns his showroom; if he chooses to rent it out, he will receive $15,000 in rent per year. Assume that the value of this showroom does not depreciate over the year. Also, if Brian does not operate this piano business, he can work as a financial advisor and receive an annual salary of $50,000 with no additional monetary costs. No other costs are incurred in running this piano business.
Identify each of Brian's costs in the following table as either an implicit cost or an explicit cost of selling pianos.
Implicit Cost Explicit Cost
The wages and utility bills that Brian pays
The rental income Brian could receive if he chose to rent out his showroom
The salary Brian could earn if he worked as a financial advisor
The wholesale cost for the pianos that Brian pays the manufacturer
Complete the following table by determining Brian's accounting and economic profit of his piano business.
Profit
(Dollars)
Accounting Profit
Economic Profit
Answer:
Brian
1. Implicit and Explicit Costs:
Implicit costs:
The rental income Brian could receive if he chose to rent out his showroom
The salary Brian could earn if he worked as a financial advisor
Explicit costs:
The wages and utility bills that Brian pays
The wholesale cost for the pianos that Brian pays the manufacturer
2. Brian's accounting and economic profit of his piano business:
Accounting profit = $62,000
Economic profit (loss) = ($3,000)
Explanation:
a) Data and Calculations:
Accounting Profit Economic Profit
Sales Revenue $793,000 $793,000
Cost of pianos 430,000 430,000
Wages and utility bills 301,000 301,000
Implicit (Opportunity) Costs:
Rent 15,000
Salary as an accountant 50,000
Total costs 731,000 796,000
Profit (loss) $62,000 ($3,000)
b) Implicit costs are opportunity costs. They include the costs that arise from forgone benefits when another opportunity is taken instead of the other. Explicit costs are costs that are actually incurred by taking an opportunity.
Suppose the banking system does NOT hold excess reserves and the reserve ratio is 25%. If Melanie deposits $1,000 of cash into her checking account, the banking system can increase the money supply by:__________
Answer:
$3,000
Explanation:
Calculation for the increase the money supply
Using this formula
Increase in money supply=(Cash/Reserve ratio)-Cash
Increase in money supply=($1,000/0.25)-$1,000
Increase in money supply=$4,000-$1,000
Increase in money supply=$3,000
Therefore based on the information given the banking system can increase the money supply by $3,000
If you own 500 shares of stock in a company that has 100,000
shares of stock outstanding, what fraction of the firm do you own?
Answer:
1/200
Explanation:
The fraction will be the shares owned divided by the outstanding shares
=500/100,000
=5/1000
=1/200
The fraction is 1/200
Robert Rogers, CPA performed accounting services for a client in December. A bill was mailed to client on December 30. Roberts received a check in the mail on January 5. The revenue principle would require that which of the following accounts appear on the income statement for the year ended December 31?
a. Accounts payable
b. Prepaid expense
c. Unread revenue
d. Service revenue
Answer:
D) Service Revenue
Explanation:
From the question we are informed about the Robert Rogers, CPA who performed accounting services for a client in December. A bill was mailed to client on December 30. Roberts received a check in the mail on January 5. The revenue principle would require that which of the following accounts appear on the income statement for the year ended December 31 is Service revenue.
Service revenue can be regarded as
the income that is been generated by a company through the service they provide. This amount can be seen on the top of the company's income statement, and there is addition of this amount to the revenue gotten from
product earnings so that total revenue of company can be calculated for a specific period of time.
A company purchased factory equipment on April 1, 2022 for $69600. It is estimated that the equipment will have a $12000 salvage value at the end of its 10-year useful life. Using the straight-line method of depreciation, the amount to be recorded as depreciation expense at December 31, 2022 is:____________
Answer:
$4,320
Explanation:
Calculation for the amount to be recorded as depreciation expense at December 31, 2022
Using this formula
Depreciation expense at December 31, 2022=[(Factory equipment - Salvage value) ÷ 10]× 9/12
Let plug in the formula
Depreciation expense at December 31, 2022=[($69,600 - $12,000) ÷ 10] × 9/12
Depreciation expense at December 31, 2022=$5,760×9/12
Depreciation expense at December 31, 2022=$4,320
Note that 1 April 2022 to 31st December 2022 will give us 9months
Therefore Using the straight-line method of depreciation, the amount to be recorded as depreciation expense at December 31, 2022 is:$4,320
You need a 25-year, fixed-rate mortgage to buy a new home for $240,000. Your mortgage bank will lend you the money at an APR of 5.35 percent for this 300-month loan. However, you can afford monthly payments of only $800, so you offer to pay off any remaining loan balance at the end of the loan in the form of a single balloon payment. How large will this balloon payment have to be for you to keep your monthly payments at $800
Answer:
409,461.10
Explanation:
Present value = Annuity value * [1 - (1/(1+r)^r)] / r
Present value = 800 * [1 - (1/(1+0.0535/12)^25*12)}/0.0535/12
Present value = 132196.0205
Remaining balance = Total loan - Present value of monthly payments = 240,000 - 132196.0205 = 107803.9795
Future value = Cash flow * [1 + Interest rate/Number of months)^Time period
Future value = 107803.9795*[1+0.0535/12]^360
Future value = 409,461.10
Note: Balloon payment mean final payment made by the borrower after the end of partial amortization over the time period of the mortgage
GAAP is comprised of:________
a. FASB standards, interpretations, and concepts statements.
b. FASB fi nancial standards.
c. FASB standards, interpretations, EITF consensuses, and accounting rules issued by FASB predecessor organizations.
d. any accounting guidance included in the FASB Codifi cation.
Answer: any accounting guidance included in the FASB Codification
Explanation:
GAAP is an acronym that implies generally accepted accounting principle. They are the rules that are used in accounting to guide businesses and corporate bodies.
It should be noted that the GAAP is used by The Financial Accounting Standards Board as the basis for its practices. Therefore, GAAP comprises of any accounting guidance included in the FASB Codification.
Summarize jpmorgan chase swot analysis?
Answer:
In JP Morgan and Chase SWOT Analysis, the strengths and weaknesses are the internal factors whereas opportunities and threats are the external factors. SWOT Analysis is a proven management framework which enables a brand like JP Morgan and Chase to benchmark its business & performance as compared to the competitors and industry.
Ravi, a young and enthusiastic employee, loved his job as a technical service executive. He enjoyed being creative and dealing with challenges. Ravi was offered a supervisory position in his department because of his performance and enthusiasm. He accepted the job assuming that it is challenging and creative. However, he finds that the job has little creativity and challenge in it. Later, his team performs poorly under his supervision. In the context of characteristics of a successful supervisor, Ravi lacks:_______
a. desire for the job.
b. a positive attitude.
c. the ability to delegate.
d. communication skills.
Answer:
A) desire for the job
Explanation:
From the question we are informed about Ravi, a young and enthusiastic employee, who loved his job as a technical service executive. He enjoyed being creative and dealing with challenges. Ravi was offered a supervisory position in his department because of his performance and enthusiasm. He accepted the job assuming that it is challenging and creative. However, he finds that the job has little creativity and challenge in it. Later, his team performs poorly under his supervision. In the context of characteristics of a successful supervisor, Ravi lacks desire for the job. Desire for ones job can be regarded as craving, longing to carry out ones responsibility with great enthusiasms in one's profession. When an employee desires his/ her job there will be strong intention in performing the required task inorder to achieve the goals of the organization.
How would living conditions in these two countries affect birth and death rates
A profit-maximizing entrepreneur rents an apple orchard for a day. He is a price taker in both the market for labor and the market for apples. Assume that a bushel of apples sells for $10. Laborers are hired by the day (the variable input) to pick apples (the product). The production function (the relationship between the number of laborers hired and the number of bushels of apples picked) looks like this:
Laborers hired per day Total product(bushels of apples per day)
4 52
5 60
6 66
7 70
8 72
Required:
How many laborers would the entrepreneur employ if the government raised the minimum wage to $75 per day?
a. 4
b. 8
c. 5
d. 7
e. 6
Answer:
c. 5
Explanation:
L Q MPL (ΔinQ/ΔinL) VMPL
4 52
5 60 8 80
6 66 6 60
7 70 4 40
8 72 2 20
Note: Labour hired per day = L, Total product = Q, Marginal Product of labor=MPL, VMPL =Price*MPL
A firm will maximize the profit by increasing the number of labor as long as VMPL is higher than or equal to the wage rate. In this case, we observe that VMPL ($80)>wage rate ($75) for L=5 but VMPL ($60)<wage rate ($75) for L=6. So, the optimal number of labor to be hired is 5.
Bailand Company purchased a building for $210,000 that had an estimated residual value of $10,000 and an estimated service life of 10 years. Bailand purchased the building 4 years ago and has used straight-line depreciation. At the beginning of the fifth year (before it records depreciation expense for the year), the following independent situations occur:
1. Bailand estimates that the asset has 8 years’ life remaining (for a total of 12 years).
2. Bailand changes to the sum-of-the-years’-digits method.
3. Bailand discovers that the estimated residual value has been ignored in the computation of depreciation expense.
Required:
For each of the independent situations, prepare all the journal entries relating to the building for the fifth year. Ignore income taxes.
CHART OF ACCOUNTS
Bailand Company
General Ledger
ASSETS
111 Cash
121 Accounts Receivable
141 Inventory
181 Building
198 Accumulated Depreciation
LIABILITIES
211 Accounts Payable
231 Salaries Payable
250 Unearned Revenue
261 Income Taxes Payable
EQUITY
311 Common Stock
331 Retained Earnings
REVENUE
411 Sales Revenue
EXPENSES
500 Cost of Goods Sold
511 Insurance Expense
512 Utilities Expense
521 Salaries Expense
531 Depreciation Expense
532 Bad Debt Expense
559 Miscellaneous Expenses
Bailand estimates that the asset has 8 years’ life remaining (for a total of 12 years). Prepare the journal entry on December 31 to record depreciation in the fifth year after the change in estimate. Ignore income taxes.
PAGE 16
GENERAL JOURNAL
DATE ACCOUNT TITLE POST. REF. DEBIT CREDIT
1
2
Prepare the journal entry on December 31 to record depreciation in the fifth year after the change in depreciation method. Round your answers to the nearest dollar.
PAGE 16
GENERAL JOURNAL
DATE ACCOUNT TITLE POST. REF. DEBIT CREDIT
1
2
Prepare the journal entries on December 31 to record the prior period adjustment for the error and depreciation in the fifth year. Ignore income taxes.
PAGE 16
GENERAL JOURNAL
DATE ACCOUNT TITLE POST. REF. DEBIT CREDIT
1
2
3
4
Answer:
Depreciation expense for 1-4 years:
Depreciation Expense (Dr.) $20,000
Accumulated Depreciation (Cr.) $20,000
Depreciation expense for 5th year:
Depreciation Expense (Dr.) $20,000
Accumulated Depreciation (Cr.) $20,000
Explanation:
Depreciation for 1-4 years:
(210,000 - 10,000 ) / 10 = 20,000
Carrying value of building :200,000 - 80,000 = 120,000
Depreciation for 5th year: 120,000/ 8 = 15,000.
Aji Fatou and Mustapha both obey the two-period model of consumption. Aji Fatou earns $100 in the first period and $100 in the second period. Mustapha earns nothing in the first period $210 in the second period. Both of them can borrow or lend at the interest rate r. You observe both Aji Fatou & Mustapha consuming $100 in the first period and $100 in the second period. Suppose the interest rate increases. The increase in interest rate will make Aji Fatou better off in both period.
a. True
b. False
Answer:
Aji Fatou and Mustapha both obey the two-period model of consumption. Aji Fatou earns $100 in the first period and $100 in the second period. Mustapha earns nothing in the first period $210 in the second period. Both of them can borrow or lend at the interest rate r. You observe both Aji Fatou & Mustapha consuming $100 in the first period and $100 in the second period. Suppose the interest rate increases. The increase in interest rate will make Aji Fatou better off in both period.
a. True
b. False
Jeff needs car insurance. He is debating between purchasing liability insurance or a comprehensive policy. What is one TRUE statement about these options that can help him make an informed decision?
a) Liability insurance offers coverage when there is a theft.
b) Liability insurance offers to replace the car if it is destroyed in an accident.
c) A comprehensive policy usually requires a lower premium than liability coverage. d) A comprehensive policy is generally required if a bank helps you purchase a vehicle.
A comprehensive policy is generally required if a bank helps you purchase a vehicle.
Before, buying a car insurance policy, Jeff must take into consideration that a comprehensive policy is generally required if a bank helps an individual to purchase a vehicle. Therefore, the option D holds true.
What is the significance of a car insurance policy?There are a number of car insurance policies, such as a comprehensive car insurance that ensures reimbursement of the damages caused due to an accident for which the policy has been made. A comprehensive insurance policy is also the most commonly taken car insurance policy.
A liability insurance policy, on the other hand, is a policy that ensures the reimbursement of the claim of damages caused to another person's property due to the car being involved in such accident.
Therefore, the option D holds true regarding the significance of a car insurance policy.
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On January 4, 2016, Franc Company purchased for $30,000 a patent that had been filed 8 years earlier. The patent covers a manufacturing process that the company plans to use for 15 years. On January 3, 2017, the company paid its lawyers $11,000 for successfully defending the patent in a lawsuit.
Required:
How to calculate amotization?
Answer:
Patent amortization expense during 2016 = $30,000 / 15 = $2,000
During 2017, the patent's value increases by $11,000 to $39,000.
Legal costs must be capitalized, that is why the patent's carrying value increases.
Patent amortization expense during 2017 = $39,000 / 14 = $2,785.71
Goode Company has the following production data for selected months:
Ending Work in Process
Month Beginning Work in Process Units Transferred Out Units % Complete as to Conversion Cost
January -0- 36,270 11,400 40%
March -0- 42,710 8,520 75
July -0- 46,330 19,600 25
Compute equivalent units of production for materials and conversion costs, assuming materials are entered at the beginning of the process.
Answer:
JanuaryEquivalent Units of Production:
= Units transferred out + Ending work in process
= 36,270 + 11,400
= 47,670 units
Equivalent Units of Conversion
= Units transferred out + Ending work in process * Percentage complete
= 36,270 + 11,400 * 40%
= 40,830 units
MarchEquivalent Units of Production
= 42,710 + 8,520
= 51,230 units
Equivalent units of Conversion
= 42,710 + 8,520 * 75%
= 49,100 units
JulyEquivalent Units of Production
= 46,330 + 19,600
= 65,930 units
Equivalent units of Conversion
= 46,330 + 19,600 * 25%
= 51,230 units
Norton Textile Co. manufactures a variety of fabrics. All materials are introduced at the beginning of production; conversion cost is incurred evenly through manufacturing. The Weaving Department had 2,000 units of work in process on April 1 that were 30% complete as to conversion costs. During April, 9,000 units were completed and on April 30, 4,000 units remained in production, 40% complete with respect to conversion costs. The equivalent units of direct materials for April total:
Answer:
10,600
Explanation:
total:The equivalent units of conversion for April total = April units completed + 40% of conversion costs that are added evenly to units remaining in production = 9,000 + (4,000 × 40%) = 10,600 Equivalent units of conversion
The equivalent units of direct materials for April total: 10,600
Given that;
April units completed = 9,000
40% of conversion costs that are added evenly to units remaining in production = 4,000 × 40%
Then, the equivalent units of conversion for April is computed as ;
= April units completed + 40% of conversion costs that are added evenly to units remaining in production
= 9,000 + (4,000 × 40%)
= 9,000 + 1,600
= 10,600 Equivalent units of conversion
Therefore, equivalent units of direct materials for April total is 10,600
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From the following list, identify those that are likely to serve as source documents. (You may select more than one answer. Single click the box with the question mark to produce a check mark for a correct answer and double click the box with the question mark to empty the box for a wrong answer. Any boxes left with a question mark will be automatically graded as incorrect.)
Sales ticket
Trial balance
Balance sheet
Telephone bill
Invoice from supplier
Company revenue account
Income statement
Bank statement
Prepaid insurance
Answer:
The Source Documents include:
Sales ticket
Telephone bill
Invoice from supplier
Bank statement
Explanation:
Source documents are the original documents through which business transactions are initiated. They include receipts, bills, invoices, statements, checks, etc. They usually document or initiate a transaction. Any time a business spends or receives money or enters into a contract with another party, a source document is created. Source documents form an integral part of the accounting and bookkeeping process, and auditors need them to trace records to the underlying transactions.
Harry Watson is an engineering student taking an economics elective in his senior year. He has the option to work as a petroleum engineer or to design rollercoasters after college. He uses concepts learned from his economics course to help with this decision. When he considers the increasing popularity of electronic vehicles and a decrease in demand for petroleum in the future, he is acknowledging the dependencies that exist:______
a. through time.
b. between people or businesses in the same market.
c. between his own choices.
d. between markets.
Answer: c. between his own choices
Explanation:
Based on the scenario given in the question, we can say that Harry is acknowledging the dependencies that exist between his own choices.
We make choices when we have different alternatives and due to the scarcity of resources. In this case, Harry has to make a choice between the alternatives that he has and he has to make a decision regarding that.
