The City of San Antonio is considering various options for providing water in its 50-year plan, including desalting. One brackish aquifer is expected to yield desalted water that will generate revenue of $4.1 million per year for the first 5 years, after which less production will decrease revenue by 10% per year each year. If the aquifer will be totally depleted in 21 years, what is the present worth of the desalting option revenue at an interest rate of 9% per year
Answers
Answer:
$27,980,812
Explanation:
The computation of the present worth at the interest rate of 9% for the 21 years is to be shown on the excel spreadsheet.
There are two sheets attached one is of final values, and the other one is a formula sheet in which all formulas are to be shown so that it is easy to reach to the final answer
Therefore after applying the formulas, the present value would be $27,980,812
Related Questions
Lancelot Manufacturing is a small textile manufacturer using machinehours as the single indirectcost rate to allocate manufacturing overhead costs to the various jobs contracted during the year. The following estimates are provided for the coming year for the company and for the Case High School band jacket job. Company Case High School Job Direct materials Direct labor Manufacturing overhead costs Machinehours mh mh What is the bid price for the Case High School job if the company uses a % markup of total manufacturing costs?
Answers
Answer:
$3,927
Explanation:
For the computation of bid price first we need to follow some steps which is shown below:-
Manufacturing overhead rate = Overhead cost ÷ Machine hours
= 45,000 ÷ 100,000
= $0.45
Total manufacturing cost charged to the school
= 2,000 + 400 + (900 × 0.45)
= $2,805
Markup cost = $2,805 × 0.4
= $1,122
Bid price of job = Total manufacturing cost charged to school + Markup cost
= $2,805 + $1,122
= $3,927
Presented below is information related to Concord Corporation.
Oct. 1 Diane Lexington begins business as a real estate agent with a cash investment of $28,426 in exchange for common stock.
2 Hires an administrative assistant.
3 Purchases office furniture for $3,269, on account.
6 Sells a house and lot for N. Fennig; bills N. Fennig $5,117 for realty services performed.
27 Pays $1,208 on the balance related to the transaction of October 3.
30 Pays the administrative assistant $3,553 in salary for October.
Prepare the debit-credit analysis for each transaction.
Answers
Answer:
Date Account Titles Debit Credit
October 1 Cash $28,426
Common Stock $28,426
October 2 No journal entry
October 3 Office Furniture $3,269
Accounts Payable $3,269
October 6 Accounts Receivable $5,117
Service Revenue $5,117
October 27 Accounts Payable $1,208
Cash $1,208
October 30 Salaries Expense $3,553
Cash $3,553
Whirly Corporation’s contribution format income statement for the most recent month is shown below: Total Per Unit Sales (8,900 units) $ 293,700 $ 33.00 Variable expenses 178,000 20.00 Contribution margin 115,700 $ 13.00 Fixed expenses 55,700 Net operating income $ 60,000 Required: (Consider each case independently): 1. What would be the revised net operating income per month if the sales volume increases by 80 units? 2. What would be the revised net operating income per month if the sales volume decreases by 80 units? 3. What would be the revised net operating income per month if the sales volume is 7,900 units?
Answers
Answer:
$61,040$58,960$47,000Explanation:
units sold units sold units sold units sold
8,900 8,980 8,820 7,900
Total sales $293,700 $296,340 $291,060 $260,700
Variable costs ($178,000) ($179,600) ($176,400) ($158,000)
Contribution margin $115,700 $116,740 $114,660 $102,700
Period costs ($55,700) ($55,700) ($55,700) ($55,700)
Operating income $60,000 $61,040 $58,960 $47,000
Yuma, Inc. manufactures teddy bears and dolls. Currently, Yuma makes 2,100 teddy bears each month. Each teddy bear uses $3.50 in direct materials and $1.00 in direct labor. Yuma uses two activities in manufacturing the teddy bears: Sewing and Processing. The cost associated with Sewing is $15,750 a month, allocated on the basis of direct labor hours. The cost associated with Processing is $10,500 a month, allocated on the basis of batches. Teddy bears use 1/2 of the direct labor hours, and 35% of total batches. What is the total manufacturing cost for one teddy bear?
Answers
Answer:
$10.00
Explanation:
Calculation for the total manufacturing cost for one teddy bear
Total manufacturing cost=$3.50 + $1.00 + [($15,750 × 1/2)/2,100] + [($10,500 × 35%)/2,100]
Total manufacturing cost=$3.50 + $1.00 + ($7,875/2,100) + ($3,675/2,100)
Total manufacturing cost=$3.50 + $1.00 + $3.75+ $1.75
Total manufacturing cost=$10.00
Therefore the total manufacturing cost for one teddy bear will be $10.00
Ratio Analyses
Use the following balance sheet and cash flow statement information to answer the questions below.
Liquid assets: $16,000;
home value: $190,000;
monthly mortgage payment: $1,250;
investment assets: $100,000;
personal property: $20,000;
total assets: $326,000;
short-term debt: $5,400 ($450 a month);
long-term debt: $170,000 ($2,200 a month);
total debt: $175,400;
monthly gross income: $13,000;
monthly disposable income: $6,000;
monthly expenses: $7,000.
Calculate the ratios below. Round your answers to two decimal places.
Answers
Answer:
Since the requirements were missing, I looked for similar questions:
(a) Liquidity ratio for individuals
basic liquidity ratio = cash (liquid) assets / monthly expenses = $16,000 / $7,000 = 2.29
Depending on the maturity of the investment assets, the liquidity ratio could increase, but since the information is limited, we can only consider liquid assets. E.g. if the investment assets include bonds that mature in a very short term they should be included in this formula, but if they include bonds that mature in x number of years, then they aren't included.
(b) Debt-to-asset ratio :
generally the formula is debt to asset ratio = $175,400 / $326,000 = 0.54
(c) Debt service-to-income ratio
debt service to income ratio = monthly payments / gross income = ($450 + $2,200) / $13,000 = $2,650 / $13,000 = 0.20
(d) Debt payments-to-disposable income ratio
debt payments to disposable income ratio = monthly payments / disposable income = ($450 + $2,400) / $6,000 = $2,650 / $6,000 = 0.44
Comprehensive Ratio Analysis
Data for Lozano Chip Company and its industry averages follow.
Lozano Chip Company: Balance Sheet as of December 31, 2013 (Thousands of Dollars)
Cash $ 225,000 Accounts payable $601,866
Receivables 1,575,000 Notes payable 326,634
Inventories 1,125,000 Other current liabilities 525,000
Total current assets $2,925,000 Total current liabilities $1,453,500
Net fixed assets 1,350,000 Long-term debt 1,068,750
Common equity 1,752,750
Total assets $4,275,000 Total liabilities and equity $4,275,000
Lozano Chip Company: Income Statement for Year Ended December 31, 2013 (Thousands of Dollars)
Sales $7,500,000
Cost of goods sold 6,375,000
Selling general and administrative expenses 825,000
Earnings before interest and taxes (EBIT) $ 300,000
Interest expense 111,631
Earnings before taxes (EBT) $ 188,369
Federal and state income taxes (40%) 75,348
Net income $ 113,022
Calculate the indicated ratios for Lozano. Round your answers to two decimal places.
Ratio Lozano Industry Average
Current assets/Current liabilities 2.0
Days sales outstanding* days 35.0 days
COGS/Inventory 6.7
Sales/Fixed assets 12.1
Sales/Total assets 3.0
Net income/Sales % 1.2%
Net income/Total assets % 3.6%
Net income/Common equity % 9.0%
Total debt/Total assets % 30.0%
Total liabilities/Total assets % 60.0%
*Calculation is based on a 365-day year.
Construct the extended Du Pont equation for both Lozano and the industry. Round your answers to two decimal places.
For the firm, ROE is %
For the industry, ROE is %
Outline Lozano's strengths and weaknesses as revealed by your analysis
Answers
Answer and Explanation:
The computation of Construction of the extended Du Pont equation for both Lozano and the industry is shown below:-
Current asset ÷ current liability = 2
Days sales outstanding =35 days
Sales ÷ Inventory = 6.67
Sales ÷ Fixed assets = 5.55
Sales ÷ Total assets = 1.754
Net income ÷ Sales = 1.5%
Net income ÷ Total assets = 2.64%
Net income ÷ common equity = 6.45%
Total liabilities ÷ Total assets =59%
b. the computation of firm and industry ROE is shown below:-
Du Pont
Lozano
ROI = [(net profit ÷ sales) × (sales ÷ Total assets)]
= [(113,022 ÷ 7,500,000) × (7,500,000 ÷ 4,275,000)]
= 0.0264
or
= 2.64%
For Industry
ROI = 1.2% × 3
= 0.036
or
= 3.6%
c. Lozano's strengths
1. ROI determined the profit at the time when a firm earned on investing a capital unit
2. Also, the net income or sales figured out the efficiency level so that it could maintain the business affairs
Lozano's Weakness
1. If we compare the fixed asset turnover with the average of an industry than the investment made in fixed assets would not be a good judgment
Which one of the following is a possible sign of poor listening?
a
Never being asked to repeat information
b
Oral communication replaces most written communication
c
Never breaking the chain of command
d
Finding out about events from others or via memo rather than through normal channels.
Answers
For the following accounts, indicate what causes the account to increase and decrease. The first account is completed as an example. (Abbreviation used: OH=overhead)
Account Is increased by: Is decreased by:
Raw Materials Inventory Materials purchased Materials used
Work-in-Process Inventory
Adjustment for over/under allocation of OH Completion of jobs Direct labor incurred Direct materials used Manufacturing overhead allocated Materials purchased Materials used Shipping sold jobs
Table of accounts
Account Is increased by: Is decreased by:
Raw Materials Inventory Materials purchased Materials used
Work-in-Process Inventory
Finished Goods Inventory
Cost of Goods Sold
Answers
Answer and Explanation:
The causes of the account to increase and decrease is shown below:-
Account Is increased by Is decreased by
Raw material inventory Material purchased Material used
Work-in-progress
inventory Direct material used Completion of jobs
Direct labor incurred
MOH allocated
Finished goods
inventory Completion of jobs Shipping sold jobs
Cost of goods sold Shipping sold jobs Adjustment for over/under
allocation of OH
Adjustment for over or under
allocation of OH
The above shows the increment and decrement of each item and the same is being considered
Organizational commitment can be defined as _____. the collection of feelings and beliefs that managers have about their organization as a whole the process by which individuals internalize the values and expectations of an organization the training received by newcomers which teaches them the norms of the organization the collection of terminal and instrumental values that are held by an organization the rites of passage that determine how individuals enter, advance within, and leave organizations
Answers
Answer:
the collection of feelings and beliefs that managers have about their organization as a whole.
Explanation:
Organizational commitment can be defined as the collection of feelings and beliefs that managers have about their organization as a whole.
Generally, when the employees working in an organization completely identifies and believe in the vision, mission, values and ethical standards of their organization, it simply means that they believe and are in agreement with what the organization is doing and would basically have a high level of loyalty because they are proud to be associated with what the organization stands for.
Hence, organizational commitment is important for the growth and development of an organization.
How are the jobs of a music teacher and music therapist alike?
Answers
Answer:
they both play music
Explanation:
Answer:
They both make music
Explanation:
Sunland Company uses job order costing for its brand new line of sewing machines. The cost incurred for production during 2019 totaled $12000 of materials, $8000 of direct labor costs, and $5000 of manufacturing overhead applied. The company ships all goods as soon as they are completed which results in no finished goods inventory on hand at the end of any year. Beginning work in process totaled $9000, and the ending balance is $6000. During the year, the company completed 25 machines. How much is the cost per machine
Answers
Answer:
$1,120
Explanation:
The computation of the cost per machine is shown below:
Cost per machine is
= Total machine cost ÷ number of machines completed
where,
Total cost of machine is
= Opening work in process + direct material + direct labor + manufacturing overhead - ending work in process
= $9,000 + $12,000 + $8,000 + $5,000 - $6,000
= $28,000
And, the number of completed machines is 25
So, the cost per machine is
= $28,000 ÷ 25
= $1,120
On October 28, 2013, Mercedes Company committed to a plan to sell a division that qualified as a component of the entity according to GAAP regarding discontinued operations and was properly classified as held for sale on December 31, 2013, the end of the company's fiscal year. The division's loss from operations for 2013 was $2,000,000. The division's book value and fair value less cost to sell on December 31 were $3,000,000 and $2,500,000, respectively. What before-tax amount(s) should Mercedes report as loss on discontinued operations in its 2013 income statement? Group of answer choices
Answers
Answer: $2,500,000
Explanation:
Discontinued operations is when a particular division in a company shutdown.
With regards to the above question, the before-tax amount that Mercedes should report as loss on discontinued operations in its 2013 income statement will be:
= $2,000,000 + ($3,000,000 - $2,500,000)
= $2,000,000 + $500,000
= $2,500,000
You are a co-founder of a start-up firm making electronic sensors. After a year of sales, your business is not growing rapidly, but you have some steady customers keeping the business afloat. A major supplier has informed you it can no longer supply your firm because it is moving to serve large customers only, and your volume does not qualify. Though you have no current orders to support it increased commitment to this supplier, you do have a new version of your sensor coming out that you help will increase the purchase volume by over 75% and qualify you for continuing supply. This supplier is important to your business. What do you do
Answers
Answer is given below :
Explanation:
To persuade the supplier to stay in touch with the company and continue to supply it, we can do the following as
Tell the supplier that sales have increased with the new product that the company is going to market, using different estimation methods. Demonstrate product samples to the supplier to gain their trust. Provide the supplier with some favourable terms and conditions so that it stays with the company. Make a formal agreement with him, we will order the bulk goods from the supplierSelect the accounting principle, assumption, or related item that best completes the sentence. Ex: Material. Full disclosure. Far value. Relevance. Periodicity. Consistency. Revenue recognition. Comparabitlity. Confirmatary value.1. _________and ___________are the two fundamental qualities that make accounting information useful for decision making.2. Information that helps users confirm or correct prior expectations has __________.3. _________enables users to identify the real similarities and differences in economic events between companies.4.________ is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.5. Information is __________if omitting it or misstating it could influence decisions that users make on the basis of the reported financial information.6. The _________characteristic requires that the same accounting method be used from one accounting period to the next, unless it becomes evident that an alternative method will bring about a better description of a firm's financial situation.7._______means that a company cannot select information to favor one set of interested parties over another.8. Providing information that is of sufficient importance to influence the judgement and decisions of an informed user is referred to as _________.9. Corporations must prepare accounting reports at least yearly due to the____________ assumption.10._____________occurs when the performance obligation is satisfied.
Answers
Answer:
1. Relevance and faithful 2.confirmatory value 3.Comparability 4. fair value 5. material 6. consistency 7. neutrality 8.Full disclosure 9. periodicity 10. Revenue recognition
JRN Enterprises just announced that it plans to cut its dividend from $2.50 to $1.50 per share and use the extra funds to expand its operations. Prior to this announcement, JRN's dividends were expected to grow at 4% per year and JRN's stock was trading at $25.00 per share. With the new expansion, JRN's dividends are expected to grow at 8% per year indefinitely. Assuming that JRN's risk is unchanged by the expansion, the value of a share of JRN after the announcement is closest to:
Answers
Answer:
P0 = $25
Explanation:
To calculate the value of JRN after the announcement, we will use the constant growth model of DDM as the dividends are expected to grow at a constant rate. The formula for price under this model is,
P0 = D0 * (1+g) / (r - g)
Where,
D0 is the dividend todayr is the required rate of return g is the growth rate in dividendsAs the risk will remain the same, so we can say that the r or required rate of return will remain the same. To calculate r, we will input the pre announcement values in the formula above.
25 = 2.5 / (r - 0.04)
25 * (r - 0.04) = 2.5
25r - 1 = 2.5
25r = 2.5 + 1
r = 3.5 / 25
r = 0.14 or 14%
Using the same formula for post announcement values, we calculate teh price to be,
P0 = 1.5 / (0.14 - 0.08)
P0 = $25
For 2018, Gourmet Kitchen Products reported $23 million of sales and $18 million of operating costs (including depreciation). The company has $15 million of total invested capital. Its after-tax cost of capital is 10% and its federal-plus-state income tax rate was 35%. What was the firm's economic value added (EVA), that is, how much value did management add to stockholders' wealth during 2018? Write out your answer completely. For example, 25 million should be entered as 25,000,000. Round your answer to the nearest dollar, if necessary.
Answers
Answer:
$1,750,000
Explanation:
Economic value added (EVA) = Net operating profit after taxes - Invested capital * Cost of capital
Economic value added (EVA) = [($23,000,000 - $18,000,000)*(1 - 0.35)] - [$15,000,000*10%]
Economic value added (EVA) = $5,000,000*(0.65) - $1,500,000
Economic value added (EVA) = $3,250,000 - $1,500,000
Economic value added (EVA) = $1,750,000
Hence, the management add the value of $1,750,000 to stockholders' wealth during 2018.
A blank is something a person want to get out of a job or that bring them job satisfaction
Answers
Answer:
A work value is something a person wants to get out of a job or that brings them job satisfaction. Correct answer: B
Work values include talents, motives, values and attitudes which provide stability and direction for the chosen career. That is why it is very important to choose your career for the right reasons, goals and motivation.
Explanation:
International Gems sells fine jewelry and has implemented activity-based costing. Costs in the shipping department have been divided into three cost pools. The first cost pool contains costs that are related to packaging and shipping. International has determined that the number of boxes shipped is an appropriate cost driver for these costs. The second cost pool is made up of costs related to the final inspection of each item before it is shipped and the cost driver for this pool is the number of individual items that are inspected. The final cost pool is used for general operations of the department and the cost driver is the number of orders. Information about the activities is summarized below:
Cost Pool Total Costs Cost Driver Annual Activity
Packaging and shipping $164,700 Number of boxes shipped 24,000 boxes
Final inspection $200,600 Number of individual items shipped 98,900 items
General operations and supervision $84,300 Number of orders 8,100 orders
During the period, the Far East sales office generated 684 orders for a total of 6,120 items. These orders were shipped in 1,474 boxes. What amount of shipping department costs should be allocated to these sales?
Answers
Answer:
Total shipping department cost = $29,647.26
Explanation:
Total shipping department cost = (Packaging and shipping cost per box * no of boxes) + (Final inspection cost per item * no of items) + (General operations and supervision cost per order * no of orders)
- Final inspection cost per item = Total cost / Annual activity
Final inspection cost per item = 200,600 / 98,900
Final inspection cost per item = 2.028311
- General operations and supervision cost per order = Total cost / Annual activity
General operations and supervision cost per order = 84,300 / 8,100
General operations and supervision cost per order = 10.40741
- Packaging and shipping cost per box = Total cost / Annual activity
Packaging and shipping cost per box = 164,700 / 24,000
Packaging and shipping cost per box = 6.6825
Hence, Total shipping department cost = (6.6825 * 1,474) + (2.028311 * 6,120) + (10.40741 * 684)
Total shipping department cost = 9850.005 + 12413.263 + 7118.668
Total shipping department cost = $29,647.26
The amount of shipping department costs that should be allocated to these sales will be $29647.26.
The final inspection cost per item will be:
= Total cost / Annuity activity
= 200600 / 98900
= 2.03
General operations and supervision cost per order will be:
= Total cost / Annual activity
= 84300 / 8100
= 10.41
Packaging and shipping costs per box will be:
= Total cost / Annual activity
= 164700 / 24000
= 6.68
Therefore, the total shipping cost will be:
= (6.6825 × 1.474) + (2.03 × 6120) + (10.41 × 684)
= 9850 + 12413.26 + 7118.67
= 29647.26
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Davis Corporation has provided the following production and total cost data for two levels of monthly production volume. The company produces a single product.
Production volume 1,000 units 2,000 units
Direct materials $ 44,200 $ 88,400
Direct labor $ 37,300 $ 74,600
Manufacturing overhead $ 48,500 $ 62,200
The best estimate of the total monthly fixed manufacturing cost is:_________
a. $177,600
b. $225,200
c. $130,000
d. $34,800
Answers
Answer: $34800
Explanation:
Fixed cost is simply calculated as:
Total cost - Variable cost.
We need to find the total monthly variable manufacturing cost. To get this we'll calculate the variable cost per unit first. This can be calculated as:
= ($62200 − $48500)/(2000 units − 1000 units)
= $13700/1000 units
Variable cost per unit = $13.70 per unit
Variable cost = $13.70 × 1000
= $13,700
Fixed cost = Total cost - Variable cost.
Fixed cost = $48500 - $13700
Fixed cost = $34,800
The best estimate of the total monthly fixed manufacturing cost is $34800
Which of the following is an example of a non-profit organization?
a. Home Depot
b. YMCA
c. Sports Authority
d. Kroger
Answers
Answer:
They, along with thousands of other nonprofits, receive regular donations of products from The Home Depot. Since 2008, The Home Depot and The Home Depot Foundation have worked with Good360 to distribute millions of dollars in product to nonprofit organizations that use the materials to help those in need.
A. Home Depot
Explanation:
Answer:
YMCA is a nonprofit organization
Calculator In 2019 Todd purchased an annuity for $150,000. The annuity is to pay him $2,500 per month for the rest of his life. His life expectancy is 100 months. Which of the following is correct? a.For each $2,500 payment received in the first year, Todd must include $1,500 in gross income. b.If Todd collects 20 payments and then dies in 2019, Todd's estate should amend his tax returns for 2019 and 2020 and eliminate all of the reported income from the annuity for those years. c.Todd is not required to recognize any income until he has collected 60 payments (60 × $2,500 = $150,000). d.For each $2,500 payment received in the first year, Todd must include $1,000 in gross income. e.None of these choices are correct.
Answers
Answer:
d.For each $2,500 payment received in the first year, Todd must include $1,000 in gross income
Explanation:
The computation is shown below:
As we know that
Exclusion Ratio is
= Cost ÷ Benefit
= $150,000 ÷ ($2,500 × 100)
= 0.6
Now
= 0.6 × $2,500
= $1,500 Excludible
So, the involved amount is
= $2,500 - $1,500
= $1,000 Includible
Hence, the correct option is d. and the same is to be considered
The other options are wrong
Eric and Deborah are partners at a law firm. They are trying to determine which of them has a comparative advantage in typing the 25 pages required for a sales pitch to a prospective client.
Eric can type 20 pages per hour. For other activities, he can bill clients $500 per hour. Eric's opportunity cost of typing pages is_____per page.
Deborah's opportunity cost of typing pages is 25% lower than Eric's. However, as the senior partner, her billing rate is 20% higher. Based on all of these facts,_____has a comparative advantage in typing pages.
Answers
Answer:
Eric's opportunity cost of typing pages is $25 per page.
Based on all of these facts, Deborah has a comparative advantage in typing pages.
Explanation:
Eric's opportunity cost of typing is $500 / 20 pages = $25 per page.
Since's Deborah's opportunity cost of typing pages is 20% less than Eric's, then she has a comparative advantage in typing pages.
The person, business or country with the lowest opportunity cost has the comparative advantage in producing that good.
Using your accounting knowledge, fill in the blanks in the following separate income statements a through e. Identify any negative amount by putting it in parentheses. a b c d e Sales $62,000 $43,500 $ 46,000 $ ? $25,600 Cost of goods sold Merchandise inventory (beginning) 8,000 17,050 7,500 8,000 4,560 Total cost of merchandise purchases 38,000 ? ? 32,000 6,600 Merchandise inventory (ending) 11950 ? (3,000) (9,000) (6,600) ? Cost of goods sold 34,050 16,000 ? ? 7,000 Gross profit ?27950 ? 3,750 45,600 ? Expenses 10,000 10,650 12,150 3,600 6,000 Net income (loss) $ 17950? $16,850 $ (8,400) $42,000 $ ?
Answers
Answer:
1. d's Sales is $79,000
2. b's Total cost of merchandise purchases is $1,950
3. c's Total cost of merchandise purchases is $43,750
4. c's Cost of goods sold is $42,250
5. d's Cost of goods sold is $33,400
6. b's Gross profit is $27,500
Explanation:
Note: Kindly see the attached excel file which contains the calculations
In order to do the calculations, the following formulas are employed:
Gross profit = Sales - Cost of goods sold
Cost goods sold = Beginning merchandise inventory + Total cost of merchandise purchases - Ending merchandise inventory
Sales = Cost of goods sold + Gross profit
Total cost of merchandise purchases = Cost goods sold - Beginning merchandise inventory + Ending merchandise inventory
First, d's Sales is $79,000
Second, b's Total cost of merchandise purchases is $1,950
Third, c's Total cost of merchandise purchases is $43,750
Forth, c's Cost of product sold is $42,250
Fifth, d's Cost of product sold is $33,400
Sixth, b's Gross profit is $27,500
How to calculate gross profit?
Then Applying formulas are employed:
Now the Gross profit is = Sales - Cost of products sold
Then Cost goods sold = Beginning Merchandise inventory + Total cost of merchandise purchases - Ending Merchandise inventory
The formula is Cost of goods sold + Gross profit
Then Total cost of merchandise purchases = Cost products sold - Beginning merchandise inventory + Ending merchandise inventory
a b c d e
$ $ $ $ $
Sales 62000 43,500 46000 79000 25,600
Cost of goods sold
Merchandise inventory (beginning) 8,000 17,050 7,500 8,000 4,560
Total cost of merchandise purchases 38,000 1,950 43,750 32,000 6,600
Merchandise inventory (ending) (11,950) (3,000) (9,000) (6,600) (4,160)
Cost of goods sold 34,050 16,000 42,250 33,400 7,000
Gross profit 27,950 27,500 3,750 45,600 18,600
Expenses 10,000 10,650 12,150 3,600 6,000
Net income (loss) 17,950 16,850 (8,400) 42,000 12,600
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1).If the Classical Music Society just breaks even, how many concerts does it hold? 2).In addition to the organization's artistic director, the Music Society would like to hire a marketing director for $39,000 per year. What is the breakeven point? The Music Society anticipates that the addition of a marketing director would allow the organization to increase the number of concerts to 54 per year. What is the Music Society's operating income/(loss) if it hires the new marketing director? 3).The Music Society expects to receive a grant that would provide the organization with an additional $13,000 toward the payment of the marketing director's salary. What is the breakeven point if the Music Society hires the marketing director and receives the grant?
Answers
Answer:
1) 30 concerts per year
2) If new marketing director is hired, the new break even point = 53 concerts per year.
If 54 concerts are made during the year, operating income = $1,800
3) 46 concerts per year
Explanation:
The first part of the question is missing:
"The lease payments on the concert hall are expected to be $4,000 per month. The organization pays its guest performers $1,800 per concert and anticipates corresponding ticket sales to be $4,500 per concert. The music society also incurs costs of approximately $1,000 per concert for marketing and advertising. The organization pays its artistic director $33,000 per year and expects to receive $30,000 in donations in addition to its ticket sales."
total fixed costs = salaries ($33,000) + rent ($4,000 x 112) = $81,000
net fixed costs = $81,000 - $30,000 (donations) = $51,000
contribution margin = ticket revenue - variable costs = $4,500 - ($1,800 + $1,000) = $4,500 - $2,800 = $1,700
break even point in units = $51,000 / $1,700 = 30 concerts per year
If new marketing director is hired, net fixed costs increase to $90,000:
new beak even point = $90,000 / $1,700 = 52.94 ≈ 53 concerts
if there are 54 concerts, operating income = (54 x $1,700) - $90,000 = $1,800
if the grant is received, then net fixed costs = $90,000 - $13,000 = $77,000
break even point = $77,000 / $1,700 = 45.29 ≈ 46 concerts
While visiting a client to deliver their 2019 tax documents, one of the owners approaches you and states: "The IRS says my travel is no longer business travel, but instead, is commuting. They are saying I am going to owe taxes on the money the company has reimbursed for my travel. I spend $1,500 per week traveling, and travel at least 50 weeks out of the year, traveling weekly to Houston on Monday, Los Angeles on Tuesday, Seattle on Wednesday, Chicago on Thursday, and Philadelphia on Friday. I leave my home in Atlanta early Monday morning, and on Friday night, I fly back to Atlanta, and my home. I visit different clients each time I visit the cities to which I travel. My job is to help them get their restaurants up and running, and I am usually there from start to finish, which takes anywhere from 3 to 9 months. I have been traveling like this for the past 10 years. That is a lot of money we are talking about. The IRS also said something about fraud, fines and penalties, maybe even jail time. Are they right? Can they send me to jail for doing my job? What should I do?"
Answers
Answer:
Commuting refers to travelling from your home to your workplace. It generally refers to the distance that people generally travel to get to their office or any type of workplace.
While business travel refers to not only leaving your house to go to work, but actually going somewhere else to perform your regular business activities, e.g. going form one state to another to close a sale. In order for business travel to be effectively recognized as such, it must be necessary for your business activity and it should last more than one ordinary workday.
In this case, your client continuously leaves his house and goes form one state to another performing his normal business activities. This perfectly fits the IRS's definition of business travel.
Initially, you can try to solve this issue with IRS Office of Appeals (since you are right), but if that doesn't work, then you can go to Tax Court.
list down 10,10 real world examples of input and output markets.(Domestic and international)
Answers
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.
A series of cash flows may not always necessarily be an annuity. Cash flows can also be uneven and variable in amount, but the concept of the time value of money will continue to apply. Consider the following case: The Purple Lion Beverage Company expects the following cash flows from its manufacturing plant in Palau over the next six years: Annual Cash Flows Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 $400,000 $37,500 $480,000 $450,000 $550,000 $375,000 The CFO of the company believes that an appropriate annual interest rate on this investment is 4%. What is the present value of this uneven cash flow stream, rounded to the nearest whole dollar
Answers
Answer:
Total PV= $1,979,094.24
Explanation:
To calculate the present value, we need to use the following formula on each cash flow:
PV= Cf/(1+i)^n
Cf1= 400,000/1.04= 384,615.38
Cf2= 37,500/1.04^2= 34,670.86
Cf3= 480,000/1.04^3= 426,718.25
Cf4= 450,000/1.04^4= 384,661.89
Cf5= 550,000/1.04^5= 452,059.91
Cf6= 375,000/1.04^6= 296,367.95
Total PV= $1,979,094.24
Calculate the following: The future value of lump-sum investment of $3,200 in four years that earns 6 percent. Round your answer to the nearest dollar. (Hint: Use Appendix A.1 or the Garman/Forgue companion website.) Round Future value of a Single Amount in intermediate calculations to four decimal places. $ The future value of $1,100 saved each year for three years that earns 4 percent. Round your answer to the nearest dollar. (Hint: Use Appendix A.3 or the Garman/Forgue companion website.) Round Future value of Series of Equal Amounts in intermediate calculations to four decimal places. $ A person who invests $1,800 each year finds one choice that is expected to pay 4 percent per year and another choice that may pay 7 percent. What is the difference in return if the investment is made for four years? Round your answer to the nearest dollar. (Hint: Use Appendix A.3 or the Garman/Forgue companion website.) Round Future value of Series of Equal Amounts in intermediate calculations to four decimal places. $ The amount a person would need to deposit today with a 7 percent interest rate to have $4,000 in three years. Round your answer to the nearest dollar. (Hint: Use Appendix A.2 or the Garman/Forgue companion website.) Round Present value of a Single Amount in intermediate calculations to four decimal places. $
Answers
Answer:
(a) $4,040
(b) $3,434
(c) $348
(d) $3,265
Explanation:
(a) Calculate the following: The future value of lump-sum investment of $3,200 in four years that earns 6 percent. Round your answer to the nearest dollar. (Hint: Use Appendix A.1 or the Garman/Forgue companion website.) Round Future value of a Single Amount in intermediate calculations to four decimal places. $
To estimate this, the formula for calculating future value is used as follows:
FV = PV * (1 + r)^n ………………………….. (1)
Where,
FV = future value = ?
PV = lump-sum investment = $3,200
r = interest rate = 6%, or 0.06
n = number of years = 4
Substitute the values into equation (1) to have:
FV = $3,200 * (1 + 0.06)^4
FV = $3,200 * (1.06)^4
FV = $3,200 * 1.2625
FV = $4,040
(b) The future value of $1,100 saved each year for three years that earns 4 percent. Round your answer to the nearest dollar. (Hint: Use Appendix A.3 or the Garman/Forgue companion website.) Round Future value of Series of Equal Amounts in intermediate calculations to four decimal places. $
To calculate this, the formula for calculating the Future Value (FV) of an Ordinary Annuity is used as follows:
FV = M * (((1 + r)^n - 1) / r) ................................. (2)
Where,
FV = Future value of the amount after 3 years =?
M = Annual savings = $1,100
r = interest rate = 4%, or 0.04
n = number of years = 3
Substituting the values into equation (2), we have:
FV = $1,100 * (((1 + 0.04)^3 - 1) / 0.04)
FV = $1,100 * 3.1216
FV = $3,434
(c) A person who invests $1,800 each year finds one choice that is expected to pay 4 percent per year and another choice that may pay 7 percent. What is the difference in return if the investment is made for four years? Round your answer to the nearest dollar. (Hint: Use Appendix A.3 or the Garman/Forgue companion website.) Round Future value of Series of Equal Amounts in intermediate calculations to four decimal places. $
To do this, we first calculate the return of each of the 2 investments by using the the formula for calculating the Future Value (FV) of an Ordinary Annuity in part b above is used as follows:
Calculation of return at 4 percent
Where;
FV at 4% = Future value of the return after 4 years =?
M = Annual savings = $1,800
r = interest rate = 4%, or 0.04
n = number of years = 4
Substituting the values into equation (2), we have:
FV at 4% = $1,800 * (((1 + 0.04)^4 - 1) / 0.04)
FV at 4% = $1,800 * 4.2465
FV at 4% = $7,644
Calculation of return at 7 percent
Where;
FV at 7% = Future value of the return after 4 years =?
M = Annual savings = $1,800
r = interest rate = 7%, or 0.07
n = number of years = 4
Substituting the values into equation (2), we have:
FV at 7%= $1,800 * (((1 + 0.07)^4 - 1) / 0.07)
FV at 7% = $1,800 * 4.4399
FV at 7% = $7,992
Calculation of the difference in return
This is calculated as follows:
Difference = FV at 7% - FV at 4% = $7,992 - $7,644 = $348
(d) The amount a person would need to deposit today with a 7 percent interest rate to have $4,000 in three years. Round your answer to the nearest dollar. (Hint: Use Appendix A.2 or the Garman/Forgue companion website.) Round Present value of a Single Amount in intermediate calculations to four decimal places. $
To estimate this, the formula for calculating present value is used as follows:
PV = FV / (1 + r)^n ………………………….. (1)
Where;
PV = Present value or amount to deposit today = ?
FV = future value in three years = $4,000
r = interest rate = 7%, or 0.07
n = number of years = 3
Substitute the values into equation (1) to have:
PV = $4,000 / (1 + 0.07)^3
PV = $4,000 / 1.2250
PV = $3,265
Whispering Company lost most of its inventory in a fire in December just before the year-end physical inventory was taken. Corporate records disclose the following. Inventory (beginning) $ 79,100 Sales revenue $422,000 Purchases 288,300 Sales returns 21,400 Purchase returns 27,900 Gross profit % based on net selling price 33 % Merchandise with a selling price of $29,400 remained undamaged after the fire, and damaged merchandise has a net realizable value of $8,700. The company does not carry fire insurance on its inventory. Compute the amount of inventory fire loss. (Do not use the retail inventory method.) Inventory fire loss $
Answers
Answer:
$42,700
Explanation:
The calculation of the amount of inventory fire loss is shown below:-
Particulars Amount
Opening inventory $79,100
Purchases $288,300
Less:- Purchase returns $27,900 $260,400
Goods available $339,500
Sales revenue $422,000
Less- Sales returns $21,400
Net Sales $400,600
Less:- Gross profit $132,198 $268,402
($400,600 × 33%)
Estimated ending inventory $71,098
Less:- Goods on hand-undamaged $19,698
$29400 × (1 - 0.33)
Less:- Goods on hand-damaged $8,700
Fire loss on inventory $42,700
Eli Lilly is very excited because sales for his nursery and plant company are expected to double from $710,000 to $1,420,000 next year. Eli notes that net assets (Assets − Liabilities) will remain at 60 percent of sales. His firm will enjoy an 8 percent return on total sales. He will start the year with $310,000 in the bank and is bragging about the Jaguar and luxury townhouse he will buy.
1. Does his optimistic outlook for his cash position appear to be correct?2. Compute his likely cash balance or deficit for the end of the year. Start with beginning cash and subtract the asset buildup (equal to 50 percent of the sales increase) and add in profit.
Answers
Answer:
Since the profits are not enough to cover asset buildup, Eli will probably need to borrow money to cover them. Even though the company will be more profitable, its cash position will not be very healthy. ending cash balance = -$2,400Explanation:
current sales $710,000
net assets = equity = $710,000 x 60% = $426,000
return = $710,000 x 8% = $56,800
next year's sales $1,420,000
net assets = equity = $852,000
return = $1,420,000 x 8% = $113,600
asset buildup = $852,000 - $426,000 = $426,000
ending cash balance = beginning cash balance + profit - asset buildup = $310,000 + $113,600 - $426,000 = -$2,400
