Answer:
We have to journalize the transactions:
1. Stockholders invest $40,000 in cash in starting a real estate office operating as a corporation.
Account Debit Credit
Cash 40,000
Common Stock 40,000
2. Purchased $500 of supplies on credit.
Account Debit Credit
Supplies 500
Accounts Payable 500
3. Purchased equipment for $25,000, paying $3,500 in cash and signed a 30-day, $21,500, note payable.
Account Debit Credit
Equipment 25,000
Cash 3,500
Accounts Payable 3,500
4. Real estate commissions billed to clients amount to $4,000.
Account Debit Credit
Accounts Receivable 4,000
Service Revenue 4,000
5. Paid $700 in cash for the current month's rent.
Account Debit Credit
Cash 700
Rent Expense 700
6. Paid $250 cash on account for office supplies purchased in transaction 2.
Account Debit Credit
Cash 250
Accounts Payable 250
7. Received a bill for $800 for advertising for the current month.
Account Debit Credit
Advertising Expense 800
Accounts Payable 800
8. Paid $2,500 cash for office salaries.
Account Debit Credit
Cash 2,500
Wages Expense 2,500
9. Paid $1,200 cash dividends to stockholders.
Account Debit Credit
Cash 1,200
Dividends 1,200
10. Received a check for $2,000 from a client in payment on account for commissions billed in transaction 4.
Account Debit Credit
Cash 2,000
Accounts Receivable 2,000
Suppose the hotel in the lecture example raised its price from $30 to $30.50. With the new price, the hotel expects 96 guests to arrive 5% of the time, 97 guests 10% of the time, 98 guests 20% of the time, 99 guests 30% of the time, 100 guests 25% of the time and 101 guests 10% of the time. The variable costs per occupied room and overbooking costs are the same as in the lecture.Calculate the expected revenue, expected variable costs and expected costs from overbooking.Using marginal analysis, should the hotel raise its price? Explain your answer.
Answer:
$3019.50
Explanation:
Expected revenue can be calculated by multiplying the number of guests with the price given in the question. By working out the calculations if the marginal cost comes positive then the hotel should raise its price.
DATA
Expected number of guests = (5% x 96) + (10% x 97) + (2% x 98) + (30% x 99) + (25% x 100) + (10% x 101)
Expected number of guests = 98.9 or 99 guests
Expected revenue = 99 x 30.50 = $3019.50
Expected variable cost = 99 x (varibale cost given in the lecture)
Expected costs from overbooking = 99 - maximum allowed guests (given in lecture )
Expected profit = 3019.50 - 99 x (varibale cost given in lecture) - (99 - maximum allowed guests) given in lecture
Marginal cost = (expected profit - profit when price is 30 (given in lecture))/0.50
NOTE: Data given in the question lacks information such as variable cost given in the lecture.
H. J., Inc., and other customers of Northwestern Bell Corp. alleged that Northwestern Bell had Furnished cash and tickets for air travel, plays, and sporting events and had offered employment to members of the Minnesota Public Utilities Commission in exchange for favorable treatment in rate cases before the commission. A Minnesota statute makes it a felony to bribe public officials. H. J. and other customers brought suit against Northwestern for violation of the criminal bribery statute. Can the customers bring a criminal action?
Answer:
The private cause of action cannot come under the criminal statute. Thus, customers cannot bring the criminal action.
Explanation:
Bribery is an act of providing monetary or non-monetary benefits to an individual in order to influence his decision in one's favor. Bribery is a white collar crime.
The plaintiff are civilians therefore, the action which was alleged under bribery statute of criminal law do not provide any private remedies as it contains no provision for such remedies. Bribery under common law also do not have any cause of action in Minnesota state. Under the Criminal law, the civil action can only be taken if it appears that it was the legislative intent. Since, there was no legislative intent to provide civil cause of action in criminal statute, the customer cannot bring the criminal action.
Frisco Corporation is analyzing its fixed and variable costs within its current relevant range. As its cost driver activity changes within the relevant range, which of the following statements is/are correct?
I. As the cost driver level increases, total fixed cost remains unchanged
II. As the cost driver level increases, unit fixed cost increases
III. As the cost driver level decreases, unit variable cost decreases
a. I, II and III are correct
b. I and II only are correct
c. I only is correct
d. II and III only are correct
Answer:
The answer is "Option C".
Explanation:
The Unit variable expenses should remain unchanged, paying no attention to what the price operator is doing. Both variable prices will remain constant, paying little attention to adjustments in the costing system, as adjustments in the costing system may not impact all fixed expenses.
Although full fixed costs will remain constant, paying special heed to changes in the cost engine, group fixed costs will not. Unless the amount of a costing system increases, all operating rates will continue as before, however, the full number of items will increase as well as the operating unit price will reduce.
Transactions Interstate Delivery Service is owned and operated by Katie Wyer. The following selected transactions were completed by Interstate Delivery Service during May: Select the accounting equation elements (Assets, Liabilities, Owner's Equity) affected by the transaction. Then, in the "Direction" column, select the impact ("Increases" or "Decreases") on the accounting equation element. Lastly, select the specific account within the accounting equation element that is affected. To illustrate, the answer to (1) follows: (1) Asset (Cash) increases by $18,000; Owner's Equity (Katie Wyer, Capital) increases by $18,000.
Element Direction Item
1. Received cash from owner as additional investment, $18,000. Asset Owner's Equity Increases Increases Cash Katie Wyer, Capital
2. Paid advertising expense, $4,850. Liability Increases Katie Wyer, Capital
3. Purchased supplies on account, $2,100. Liability Decreases Accounts Receivable
4. Billed customers for delivery services on account, $14,700. Liability Increases Accounts Payable Liability Decreases Delivery Service Fees
5. Received cash from customers on account, $8,200. Asset Increases Cash Asset Increases Accounts Receivable
Answer:
1. Transaction: Received cash from owner as additional investment $18,000
Accounting equation element: Asset and Equity
Direction: Cash increases Equity increases
Account: Cash and Wyer capital
2. Transaction: Paid advertising expenses $4,850
Accounting equation element: Asset and equity
Direction: Cash decreases Equity decreases
Account: Cash and equity
3. Transaction: Purchase supplies on account $2,100
Accounting equation element: Asset and Liability
Direction: Asset increases Liability increases
Account: Supplies and Accounts payable
4. Transaction: Billed customers for delivery services on account $14,700
Accounting equation element: Asset and Equity
Direction: Asset increases Equity increases
Account: Accounts receivable and equity
5. Transaction: Received cash from customers on account $8,200
Accounting equation element: Asset and Asset
Direction: Cash increases and accounts receivable decreases
Account: Cash and accounts receivable
Worth Company reported the following year-end information: beginning work in process inventory, $180,000; cost of goods manufactured, $816,000; beginning finished goods inventory, $252,000; ending work in process inventory, $220,000; and ending finished goods inventory, $264,000. Worth Company's cost of goods sold for the year is:__________.
a. $804,000.
b. $828,000.
c. $776,000.
d. $552,000.
Answer:
a. $804,000
Explanation:
Preparation of Worth Company's cost of goods sold for the year
Cost of goods manufactured $816,000
Add Beginning finished goods inventory $252,000
Less Ending finished goods inventory ($264,000)
Cost of goods sold $804,000
Therefore Worth Company's cost of goods sold for the year is: $804,000
The firm Gelati-Banking (GB) is considering a project with the following characteristics. Sales will be $100 MM for sure in the first year and grow 10% in the second year; thereafter, the long term growth rate is 3%. Gross Profit Margin (Gross Profit over Sales) will be 20%. Depreciation will be $10 MM each year for the next two years. Working Capital held for the project will have to be 10% of sales. Additional CAPX each year will be $11MM in year 1 and $12 MM in year 2. All cash flows defined here are deterministic and will go on indefinitely. Interest rates are as follows: 3-month t-bill is 3%, the 2 year treasury is 4% and the long bond (30-year) is trading at 5% per year. The Corporate Tax Rate is 40%. What would the investment need to be for this project to be breakeven (ignoring depreciation effects of the investment)
Answer:
Investment needed for breakeven is 784.48 MM
Explanation:
Working is attached with this answer in PDF file, please find it.
The project will be at breakeven when NPV will be equal to 0
NPV = -Investment + Present value of year 1 cash flows + Present value of year 2 cash flows + Present value of year 3 and onwards cash flows
0 = - investment + 5/1.03 + 14.2/(1.04)2 + 15.326 / (0.05 - 0.03)
0 = -Investment + 4.854 + 13.129 + 766.500
Investment = 4.854 + 13.129 + 766.500
Investment = 784.483
(1.05)3
The investment will be less than $ 679.94 MM. At time 0 , the project will be at breakeven when the investment invested intially will be less than $ 669.94 MM.
During March, the production department of a process operations system completed and transferred to finished goods 35,000 units that were in process at the beginning of March and 190,000 units that were started and completed in March. March's beginning inventory units were 100% complete with respect to materials and 50% complete with respect to labor. At the end of March, 27,000 additional units were in process in the production department and were 100% complete with respect to materials and 70% complete with respect to labor. The production department incurred direct materials cost of $255,300 and its beginning inventory included materials cost of $94,200. Compute the direct materials cost per equivalent unit for the department using the weighted-average method.
Answer:
cost per equivalent unit for direct materials is $1.39.
Explanation:
First, calculation of equivalent units of production with respect to Direct materials
Closing Work In Process (27,000 × 100%) = 27,000
Completed and Transferred (225,000 × 100%) = 225,000
Equivalent units of Production with respect to Direct materials = 252,000
Then calculate the cost per equivalent unit for direct materials as follows :
Cost per equivalent unit = Total Costs ÷ Total Equivalent units
= ($255,300 + $94,200) ÷ 252,000
= $1.39
Cindy is considering going to law school. If she does, she will spend $70,000 on tuition and books to get a college education (during the first time period), $140,000 on tuition and books to get a law degree (during the second time period), and her law degree will earn her $700,000 during the remainder of her work-life (during the third time period). Cindy's time preference for money is associated with a per-period interest rate of 10 percent. Approximately what is Cindy's present value of obtaining a law degree
Answer:
$346,581.52
Explanation:
we need to use the present value formula to solve this:
present value = future value / (1 + r)ⁿ
the present value of tuition and books will be negative (since they are a cash outflow)
PV = -70,000 / (1 + 0.1) = -70,000 / 1.1 = -$63,636.36
PV = -140,000 / (1 + 0.1)² = -140,000 / 1.1² = -$115,702.48
the present value of the expected income will be positive since it represents cash inflows
PV = 700,000 / (1 + 0.1)³ = 700,000 / 1.1³ = $525,920.36
the net present value of obtaining a law degree = $525,920.36 - $63,636.36 - $115,702.48 = $346,581.52
In 2019, the Creighton Agricultural Products Company used a predetermined manufacturing overhead rate of 150% times direct labor cost. Information for the year is as follows: Actual direct materials cost $812,500 Actual direct labor cost $180,000 Actual overhead costs incurred: $264,000 Total direct labor hours 5,520 What is the amount of the adjustment to COGS required due to the over or under allocation of overhead costs. Select one: a. $4,300 b. $5,900 c. $6,000 d. None of the choices
Answer:
c. $6,000
Explanation:
The computation of the amount of the adjustment required to cost of goods sold is shown below:
Estimated manufacturing overhead cost is
= 150% × $180,000
= $270,000
And, the actual overhead cost incurred is $264,000
So, the adjustment amount is
= $270,000 - $264,000
= $6,000
Hence, the correct option is c. $6,000
On May 1, 2021, Cedar Corp. paid $432,000 for rent on warehouse space one year in advance. On November 1, 2021, Cedar Corp. entered into a lease agreement to rent out its old warehouse space it was no longer using. This agreement calls for Cedar to receive $10,000 per month from the lessee, due and payable at the end of the 5-month lease term. At December 31, 2021, none of the rental payments from the lessee had yet been received. If Cedar makes the appropriate adjusting entry, how much will be reported on the December 31, 2021 income statement for rent expense?
Answer: $324,000
Explanation:
Cedar Corp. paid $432,000 for a year in advance. According to the Accrual principle in Accounting, expenses are to be recorded only when incurred.
The rent will therefore have to be apportioned to the months that it has paid for in the current period.
Rent for year = $432,000
Rent for month = 432,000/12 = $36,000
April - December = 9 months
Rent for the year = 9 * 36,000
= $324,000
Note; Question is about Rent expense which is how much Cedar Corp has paid not about how much they have received.
On May 31, 20X1, the Arlene Corporation adopted a plan to sell its cosmetics line of business, considered a component of the entity. By the end of the year, the assets have not been sold. The book value of those assets equals $850,000, and the company estimates their fair value to be $1,100,000. The component generated operating income of $450,000 for the year. In its income statement for the year ended December 31, 20X1, for what amount would the company report income from operations of a discontinued component (ignoring taxes).
a. $300,000b. $550,000c. $450,000d. $700,000
Answer: $450,000
Explanation:
There won't be gain or loss as asset haven't been sold. In its income statement for the year ended December 31, 20X1, the amount that would the company report income from operations of a discontinued component will be:
Profit or loss made on the sale of asset = $0
Income from discontinued operations = $450000
Therefore, the income from operations of a discontinued component will be:
= $0 + $450000
= $450,000
On 1/1/2019, Firm XYZ signs a debt contract. According to the debt contract, Firm XYZ raises $100,000 from an investor and promises to pay the investor $100,000 on 1/1/2020 (i.e., the interest rate is zero). On 1/2/2019, Firm XYZ finds that there are two investment opportunities, and each project costs the firm $100,000:
Project 1: $400,000 with probability 0.4 and $0 with probability 0.6
Project 2: $200,000 with probability 1.
i) Which project exhibits a higher NPV?
ii) Which project does the firm prefer? Firm prefers project 1 because
iii) How about debtholders? Debtholders would prefer project 2 because
iv) Suppose that, on 1/1/2019, the investor knows that the firm will choose a project between project 1 and 2. Would the investor choose to sign the debt contract?
Answer:
i) Which project exhibits a higher NPV?
project 2
ii) Which project does the firm prefer?
project 1 since it has the potential to earn $400,000 (resulting in an NPV of $300,000) and if things go wrong, they will not lose their money. When you gamble with someone else's money, you are willing to take higher risks.
iii) How about debtholders?
project 2 since it guarantees that the loan will be paid back
iv) Suppose that, on 1/1/2019, the investor knows that the firm will choose a project between project 1 and 2. Would the investor choose to sign the debt contract?
This depends on what type of business Firm XYZ is. If it is a corporation, LLC or a LLP, then I doubt that the loan will be made because the firm's owners are not personally liable for the debt. If the firm is a sole proprietorship or a general partnership, then depending on the financial position of the owners, the loan can be made.
Explanation:
since the discount rate is 0:
the NPV of project 1 = [($400,000 x 0.4) + $0] - $100,000 = $160,000 - $100,000 = $60,000
the NPV of project 2 = $200,000 - $100,000 = $100,000
You’ve collected the following information from your favorite financial website.
52-Week Price
Div PE Close Net
Hi Lo Stock (Div) Yld % Ratio Price Chg
64.60 47.80 Abbott 1.12 1.9 235.6 62.91 −.05
145.94 70.28 Ralph Lauren
2.50 1.8 70.9 139.71 .62
171.13 139.13 IBM 6.30 4.3 23.8 145.39 .19
91.80 71.96 Duke Energy
3.56 4.9 17.6 74.30 .84
113.19 96.20 Disney 1.68 1.7 15.5 ? .10
According to your research, the growth rate in dividends for Abbott Laboratories for the previous 5 years has been negative 11.5 percent. If investors feel this growth rate will continue, what is the required return for the company's stock?
Answer:
13.48%
Explanation:
Calculation for the required return for the company's stock using this formula
Required return = (D1/P0) +g
Let plug in the formula
Required return = [$1.12(1 + 0.115) / $62.91] + 0.115
Required return= [$1.12(1.115) / $62.91] + 0.115
Required return =(1.2488/$62.91)+0.115
Required return=0.019850580194+0.115
Required return = 0.1348 *100
Required return =13.48%
Therefore the required return for the company's stock will be 13.48
O'Neill, Incorporated income statement for the most recent month is given below. A proposal has been made that will lower variable expenses in Store A to 62% of sales. However, this reduction can only be accomplished by an increase in fixed expenses of $8,000. If this proposal is implemented and sales remain constant, overall company net operating income should: Select one: a. remain the same b. decrease by $4,200 c. increase by $2,000 d. increase by $8,000
Answer:
c. increase by $2,000
Explanation:
The computation of company net operating income is shown below:-
New amount for Store A variable expenses = Sales percentage × Store A sales
= 0.62 × $100,000
= $62,000
Change in net operating income = (Variable expenses of store A - New amount for Store A variable expenses) - Fixed expenses
= ($72,000 - $62,000) - $8,000
= $10,000 - $8,000
= $2,000 increase
Use the following information, taken from each of the company's 2016 financial statements to complete the requirements. Cash from Current Company Operations Liabilities CAPEX Logitech International $258.111 $414.930 $56.615 Steelcase Inc 261.400 557.500 93.400 Chico's FAS Inc. 271.991 298.131 84.841 Vista Outdoor Inc 273.002 368.901 41.526 a. Compute the operating cash flow to current liabilities ratios. b. Rank-order each company from low to high liquidity (ability to pay liabilities as they come due). c. Compute the operating cash flow to CAPEX ratio. Compared with the rule of thumb of 1.0, assess the company's solvency as either low, medium, or high. d. Rank-order each company from low to high solvency. Round answers to two decimal places. For ranking, 1 is the highest and 4 is the lowest. Operating Cash Flow to Current Liquidity Operating Cash Solvency Company Liabilities Rank Flow to CAPEX Rank Logitech International Answer 0 Answer Answer 0 Answer Steelcase Inc Answer 0 Answer Answer 0 Answer Chico's FAS Inc. Answer 0 Answer Answer 0 Answer Vista Outdoor Inc Answer 0 Answer Answer 0 Answer
Answer:
A.Logitech International 0.62
Steelcase Inc 0.47
Chico's FAS Inc. 0.91
Vista Outdoor Inc 0.74
B. Logitech International 0.62 MEDIUM
Steelcase Inc 0.47 LOW
Chico's FAS Inc. 0.91 HIGH
Vista Outdoor Inc 0.74 HIGH
C.Logitech International 4.56
Steelcase Inc 2.80
Chico's FAS Inc. 3.20
Vista Outdoor Inc 6.57
D. Logitech International 4.56 HIGH
Steelcase Inc 2.80 LOW
Chico's FAS Inc. 3.20 MEDIUM
Vista Outdoor Inc 6.57 HIGH
Explanation:
A. Computation of the operating cash flow to current liabilities ratios
Using this formula
Operating Cash Flow to Current Liabilities Ratio = Operating Cash Flow / Current Liabilities
Let plug in the formula
Company Operating Cash Flow Current Liabilities Ratio =Liquidity
Logitech International $258.111 /$414.930 =0.62
Steelcase Inc $261.400/$557.500 =0.47
Chico's FAS Inc. $271.991 /$298.131 =0.91
Vista Outdoor Inc $273.002/$368.901 =0.74
B. Ranking -order of each company from low to high liquidity
Company Operating Cash Flow Current Liabilities Ratio Liquidity RANKING ORDER
Logitech International $258.111 $414.930 0.62 MEDIUM
Steelcase Inc $261.400 $557.500 0.47 LOW
Chico's FAS Inc. $271.991 $298.131 0.91 HIGH
Vista Outdoor Inc $273.002 $368.901 0.74 HIGH
C. Computation of operating cash flow to CAPEX ratio
Using this formula
Operating Cash Flow to CAPEX Ratio = Operating Cash Flow / CAPEX Ratio
Let plug in the formula
Company Operating Cash Flow CAPEX Ratio =Solvency
Logitech International $258.111 /$56.615 =4.56
Steelcase Inc $261.400/$93.400=2.80
Chico's FAS Inc. $271.991 /$84.841 =3.20
Vista Outdoor Inc $273.002 /$41.526 =6.57
D. Ranking -order for each company from low to high solvency
Company Operating Cash Flow CAPEX Ratio Solvency RANKING ORDER
Logitech International $258.111 $56.615 4.56 HIGH
Steelcase Inc $261.400 $93.400 2.80 LOW
Chico's FAS Inc. $271.991 $84.841 3.20 MEDIUM
Vista Outdoor Inc $273.002 $41.526 6.57 HIGH
Therefore operating cash flow to current liabilities ratios is:
Logitech International 0.62
Steelcase Inc 0.47
Chico's FAS Inc. 0.91
Vista Outdoor Inc 0.74
And the Ranking -order of each company from low to high liquidity is :
Logitech International 0.62 MEDIUM
Steelcase Inc 0.47 LOW
Chico's FAS Inc. 0.91 HIGH
Vista Outdoor Inc 0.74 HIGH
Operating cash flow to CAPEX ratio is :
Logitech International 4.56
Steelcase Inc 2.80
Chico's FAS Inc. 3.20
Vista Outdoor Inc 6.57
And the Ranking -order of each company from low to high solvency is :
Logitech International 4.56 HIGH
Steelcase Inc 2.80 LOW
Chico's FAS Inc. 3.20 MEDIUM
Vista Outdoor Inc 6.57 HIGH
The inflationary spiral explains the causes and effects of high inflation.
The spiral usually begins with an increase in demand. What is the direct effect of this increase?
a. Producers raise prices to continue to make a profit.
b. The government prints more money, lowering the value of money.
c. Workers negotiate with employers to receive more money.
d. Consumers need higher wages to keep up with rising prices.
Answer:
A. Producers raise prices to continue to make a profit.
Explanation:
The direct result of increase in demand is that the producers raise prices to continue to make a profit.
So, option a. is correct.
Inflationary spiralInflation is defined as a broad, gradual increase in the costs of goods and services in a market. An inflationary spiral starts when there is an increase in price, which leads to people requesting pay increases.
The inflationary spiral describes why and how high inflation occurs. Typically, the spiral begins with a rapid growth. The direct result of this increase is that the producers raise prices to continue to make a profit. So, option a. is correct.
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Use the following generalized linear demand relation:
Qe = 680 - 9P + 0.006M - 4PR
Where M is income and PRis the price of a related good, R.
1. From this relation it is apparent that the good is:____.
a. an inferior good.
b. a substitute for good R.
c. a normal good.
d. a complement for good R.
e. both c and d.
2. If M $15,000 and PR $20, the demand function is:______.
A. P = 690 - 9Qd.
B. Qd = 690 - 9P.
C. Qd = 680 - 9P.
D. P = 680 - 9Qd.
E. Qd = 800 - 19 P.
3. If M-$15,000 and Pr- $20 and the supply function is Qs price and quantity are, respectively:______.
A. P $55 and Q = 195.
B. P=$6 and Q = 38.
C. P=$12 and Q = 200.
D. P=$50 andQ = 170.
E. P=$40 and Q =250.
4. If M $15,000 and PR $20 and the supply function is Qs = 30 + 3P, then, when the price of the good is $60:______.
a. there is a shortage of 60 units of the good.
b. there is equilibrium in the market.
c. there is a surplus of 60 units of the good.
d. the quantities demanded and supplied are indeterminate.
5. If M $15,000 and Pr-$20 and the supply function is Qs 30+3P, then, when the price of the good is $40:_____.
a. there is equilibrium in the market.
b. there is a shortage of 180 units of the good.
c. there is a surplus of 180 units of the good.
d. there is a shortage of 80 units of the good.
Answer:
Explanation:
1 .
Qe = 680 - 9P + 0.006M - 4PR
When the price of good R is increased , the demand of good is decreased . That means the demand of another good is increased . It means that goods R is a complement good . Now the coefficient of M is positive that means when income increases , demand of good increases . So the good is a normal good .
Hence good is a normal and complement good of R
option e ) is correct.
2 .
Qe = 680 - 9P + 0.006M - 4PR
Putting the value of M = 15000 and PR = 20
Qe = 680 - 9P + 0.006x 15000 - 4 x 20
Qe = 680 - 9P + 90 - 80 = 690 - 9P
3 .
For equilibrium
supply = demand
30+3P = 690 - 9P
12 P = 660
P = 55
Q = 690 - 9P = 690 - 9 x 55 = 195
4 .
When the price of goods is 60 , it is higher than the equilibrium price , hence demand will shrink and it will be less than supply
quantity demanded = 690 - 9P = 690 - 9 x 60 = 150
quantity supplied = 30+3P = 30 + 3 x 60 = 210
excess supply = 210 - 150 = 60 .
5 .
when price is 40 which is less than equilibrium price
there will be more demand
quantity demanded
= 690 - 9P = 690 - 9 x 40 = 330
quantity supplied = 30+3P = 30 + 3 x 40 = 150
excess supply = 180
1. The good is both a normal as well as a complement for good R.
2. The demand function would be Qd = 690 - 9P.
3. The P is $55 and Q is 195 units.
4. There is a supply surplus of 60 units of the goods.
5. There is a shortage of 180 units of goods due to excess demand.
The good referred to as normal good as M is given positive, which means income increases the quantity of demand would also rise. On the other hand, the good is complementary to R due to the negative relationship that is the price of R increases would create an increase in demand of another good.
The function is given as:
[tex]Qe = 680 - 9P + 0.006M - 4PR[/tex]
Now, by substituting the value of M that is 15000 and PR that is 20 in the above function, it would give:
[tex]Qe = 680 - 9P + 0.006x 15000 - 4*20\\Qe=690 - 9P[/tex]
The equilibrium level is decided when demand equalizes with the supply.
Price at equilibrium would be computed as:
[tex]30+3P = 690 - 9P\\=55[/tex]
Now, equilibrium quantity would be:
[tex]Q = 690 - 9P \\ = 195[/tex]
The excess or surplus of supply would be seen when the price becomes 60. it is because this price would be more than the equilibrium price that is 55, which would decrease the quantity demanded. Thus, it shows that supply in the market is the same but demand falls with increased prices.
Quantity demanded would be:
[tex]Qd = 690 - 9*60 \\ = 150[/tex]
Quantity supplied would be:
[tex]Qs= 30 + 3* 60 \\= 210[/tex]
Finally, the excess supply is:
[tex]Qs-Qd\\=210 - 150 \\= 60[/tex]
When prices fall that is 40 below the equilibrium prices then it would increase the quantity demanded with the same supply in the market.
Calculation of Quantity demanded:
[tex]Qd= 690 - 9 * 40\\ = 330[/tex]
Quantity supplied is computed as:
[tex]Qs = 30 + 3* 40 \\= 150[/tex]
Now the excess of demand would be:
[tex]Qd-Qs\\330-150\\=180[/tex]
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In addition to risk-free securities, you are currently invested in the Tanglewood Fund, a broad-based fund of stocks and other securities with an expected return of and a volatility of . Currently, the risk-free rate of interest is . Your broker suggests that you add a venture capital fund to your current portfolio. The venture capital fund has an expected return of , a volatility of , and a correlation of with the Tanglewood Fund. Calculate the required return and use it to decide whether you should add the venture capital fund to your portfolio. The required return is nothing%. (Round to two decimal places.) Use the result of the above calculation to determine whether you should add the venture capital fund to your portfolio. Should you add the venture fund to your portfolio?
Answer: 6.29%
Explanation:
Required return = Risk free rate + beta ( expected return - risk free rate)
Beta.
[tex]= Correlation * \frac{Volatility of venture}{Volatility of fund} \\\\= 0.16 * \frac{0.8117}{0.2636} \\\\= 0.493[/tex]
Required return = 3.63% + 0.493(9.03% - 3.63%)
= 6.29%
On June 1 of the current year, Pamela Schatz established a business to manage rental property. She completed the following transactions during June:_______.
Opened a business bank account with a deposit of $25,000 from personal funds.
Purchased office supplies on account, $2,600.
Received cash from fees earned for managing rental property, $7,030.
Paid rent on office and equipment for the month, $3,190.
Paid creditors on account, $1,180.
Billed customers for fees earned for managing rental property, $5,910.
Paid automobile expenses (including rental charges) for the month, $710, and miscellaneous expenses, $350.
Paid office salaries, $2,250.
Determined that the cost of supplies on hand was $1,540; therefore, the cost of supplies used was $1,060.
Withdrew cash for personal use, $2,130.
Required:1. Indicate the effect of each transaction and the balances after each transaction:For those boxes in which no entry is required, leave the box blank.For those boxes in which you must enter subtractive or negative numbers use a minus sign. (Example: -300)
Answer:
Opened a business bank account with a deposit of $25,000 from personal funds.
Dr Cash 25,000
Cr Schatz, Pamela, capital 25,000
the account balances:
Cash 25,000
Schatz, Pamela, capital 25,000
Purchased office supplies on account, $2,600.
Dr Supplies 2,600
Cr Accounts payable 2,600
the account balances:
Supplies 2,600
Accounts payable 2,600
Received cash from fees earned for managing rental property, $7,030.
Dr Cash 7,030
Cr Service revenue 7,030
the account balances:
Cash 32,030
Service revenue 7,030
Paid rent on office and equipment for the month, $3,190.
Dr Rent expense 3,190
Cr Cash 3,190
the account balances:
Cash 28,840
Rent expense 3,190
Paid creditors on account, $1,180.
Dr Accounts payable 1,180
Cr Cash 1,180
the account balances:
Cash 27,660
Accounts payable 1,420
Billed customers for fees earned for managing rental property, $5,910.
Dr Accounts receivable 5,910
Cr Service revenue 5,910
the account balances:
Accounts receivable 5,910
Service revenue 12,940
Paid automobile expenses (including rental charges) for the month, $710, and miscellaneous expenses, $350.
Dr Rent expense 710
Dr Miscellaneous expenses 350
Cr Cash 1,060
the account balances:
Cash 26,600
Rent expense 3,900
Miscellaneous expenses 350
Paid office salaries, $2,250.
Dr Wages expense 2,250
Cr Cash 2,250
the account balances:
Cash 24,350
Wages expense 2,250
Determined that the cost of supplies on hand was $1,540; therefore, the cost of supplies used was $1,060.
Dr Supplies expense 1,060
Cr Supplies 1,060
the account balances:
Supplies 1,540
Supplies expense 1,060
Withdrew cash for personal use, $2,130.
Dr Schatz, Pamela, drawings 2,130
Cr Cash 2,130
the account balances:
Cash 22,220
Schatz, Pamela, capital 22,870
An indication of the effect of each transaction and the account balances are as follows:
Transaction Assets = Liabilities + Capital
1. $25,000 $25,000
Account balances $25,000 $0 $25,000
2. $2,600 $2,600
Account balances $27,600 $2,600 $25,000
3. $7,030 $7,030
Account balances $34,630 $2,600 $32,030
4. -3,190 -$3,190
Account balances $31,440 $2,600 $28,840
5. -$1,180 -$1,180
Account balances $30,260 $1,420 $28,840
6. $5,910 $5,910
Account balances $36,170 $1,420 $34,750
7. -$710 -$710
Account balances $35,460 $1,420 $34,040
8. -$350 -$350
Account balances $35,110 $1,420 $33,690
9. -$2,250 -$2,250
Account balances $32,860 $1,420 $31,440
10. -$1,060 -$1,060
Account balances $31,800 $1,420 $30,380
11. -$2,130 -$2,130
Account balances $29,670 $1,420 $28,250
Transaction Analysis:Cash $25,000 Common Stock $25,000
Office supplies $2,600 Accounts Payable $2,600
Cash $7,030 Rental Fees $7,030
Rent Expenses $3,190 Cash $3,190
Accounts Payable $1,180 Cash $1,180
Accounts Receivable $5,910 Rental Fees $5,910
Automobile Expenses $710 Cash $710
Miscellaneous Expenses $350 Cash $350
Office Salaries Expenses $2,250 Cash $2,250
Supplies Expenses $1,060 Office Supplies $1,060
Drawings $2,130 Cash $2,130
Thus, based on the accounting equation, each transaction affects either the assets, liabilities, or capital.
Learn more about the effect of transactions on the accounting equation here: https://brainly.com/question/24560438
The following are monthly actual and forecast demand levels for May through December for units of a product manufactured by the D. Bishop Company in Des Moines:_______.
Month Actual Demand Forecast Demand
May 108 100
June 80 104
July 108 101
August 118 104
September 105 104
October 114 104
November 130 105
December 120 107
For the given forecast, the tracking signal = _______ MADs (round your response to two decimal places).
Answer:
4.24
Explanation:
The computation of tracking signal is shown below:-
Month Actual Demand(dt) Forecast Demand (ft) error (dt - ft)
May 108 100 8 8
June 80 104 -24 24
July 108 101 7 7
August 118 104 14 14
September 105 104 1 1
October 114 104 10 10
November 130 105 25 25
December 120 107 13 13
Total 54 102
MADs = 102 ÷ 8
= 12.75
Tracking signal = 54 ÷ 12.75
= 4.24
The tracking signal for the actual and forecast demand levels for May through December for D. Bishop Company is 4.24.
What is a tracking signal?A tracking signal is the ratio of the cumulative sum of the deviations between the estimated forecasts and the actual values of demand to the mean absolute deviations (MADs).
The tracking signal determines the larger deviation (in both plus and minus) of Error in Forecast.
The tracking signal can be calculated with this formula:
Tracking Signal = Accumulated Forecast Errors/Mean Absolute Deviation.
What is Mean Absolute Deviation?The mean absolute deviation is the average of values or more specifically, the difference between the actual values and their average value. The mean absolute deviation (MAD) is used for calculating demand variability.
Data and Calculations:Month Actual Forecast Error Difference
Demand(dt) Demand (ft) (dt - ft)
May 108 100 8 8
June 80 104 -24 24
July 108 101 7 7
August 118 104 14 14
September 105 104 1 1
October 114 104 10 10
November 130 105 25 25
December 120 107 13 13
Total 54 102
MADs (Mean Absolute Deviations) = 12.75 (102 ÷ 8)
Tracking signal = 4.24 (54 ÷ 12.75)
Thus, the tracking signal for the actual and forecast demand levels for May through December for D. Bishop Company is 4.24.
Learn more about the tracking signal at https://brainly.com/question/24099922
Sheridan Co. wishes to enter receipts and payments in such a manner that adjustments at the end of the period will not require reversing entries at the beginning of the next period. Record the following transactions in the indicated manner and give the adjusting entry on December 31, 2020. (Two entries for each part.) (Credit account titles are automatically indented when the amount is entered. Do not indent manually.)
1. An insurance policy for two years was acquired on April 1, 2020 for $23,000.
2. Rent of $16,800 for six months for a portion of the building was received on November 1, 2020
Answer:
April, 1
DR Prepaid Insurance .............................................................$23,000
CR Cash ........................................................................................................$23,000
Dec, 31
DR Insurance Expense.............................................................$8,625
CR Prepaid Insurance................................................................................$8,625
Working
Insurance expense;
April to December = 9 months
= 23,000 * 9/24 months
= $8,625
Nov, 1
DR Cash ......................................................................................$16,800
CR Deferred rent revenue .....................................................................$16,800
Dec, 31
DR Deferred rent revenue ...................................................$5,600
CR Rent Revenue......................................................................................$5,600
Working
= 16,800 * 2/6 months
= $5,600
Annually, Monet Corp. awards each of its employees two weeks of paid vacation, which can be carried over if not used. As of December 31, Year 1, the company determined that there are 20 vacation weeks eligible for carryover. During Year 1, compensation averaged $1,000 per week. That average compensation amount is expected to increase to $1,030 during Year 2 when that vacation time will be taken. What is the liability that should be reported for vacation pay in the company’s balance sheet prepared as of December 31, Year 1?
Answer:
$20,000
Explanation:
Calculation for the liability that should be reported for vacation pay
Using this formula
Liability=Vacation weeks*Compensation averaged per week for Year 1
Let plug in the formula
Liability=20 weeks × $1,000 per week
Liability = $20,000
Therefore the amount of liability that should be reported for vacation pay will be $20,000
For the past two years, Swen Johannsen, owner/general manager of Swen's Fine Duds, a local men's clothing store, has fought to stay in business. In the face of increasing competition, Swen has tried several tactics: aggressively promoting price-slashing sales to drive his competitors' customers to his doors; attempting to cut costs by leveling out sales and inventory through seasonal sales; as well as lining up contracts with wholesalers in advance of seasonal rushes (e.g., summer swimwear) to prevent inventory depletion. He has even recruited the president of the chamber of commerce to sit on his board. None of these tactics have been successful. Now, Swen is considering a deviation from his current business to one that might be more suitable, perhaps a formal wear/tuxedo rental and retail shop or a boutique Western wear store. Swen is using _____ as his final tactic.
Answer:
Swen is using product/service repositioning strategy.
Explanation:
Product Repositioning simply refers to the art of altering the target markets perception of one's product and or services.
Swen is still in the clothing business. He has only changed the way he delivers it to the target consumers.
Of course, this sometimes calls for a change in product mix (which refers to altering the type of products being offered). However, the central idea of the strategy still holds as customers now see the business differently.
This type of strategy is easier to pull off for start-ups, or unpopular businesses trying to make a comeback. Where the business is a well-established brand, it can prove extremely difficult and may be costly.
Cheers.
Cemptex Corporation prepares its statement of cash flows using the indirect method to report operating activities. Net income for the 2021 fiscal year was $719,000. Depreciation and amortization expense of $86,000 was included with operating expenses in the income statement. The following information describes the changes in current assets and liabilities other than cash: Decrease in accounts receivable $ 41,000 Increase in inventory 11,100 Increase in prepaid expenses 10,400 Increase in salaries payable 11,900 Decrease in income taxes payable 17,000 Required: Prepare the operating activities section of the 2021 statement of cash flows. (Amounts to be deducted should be indicated with a minus sign.)
Answer and Explanation:
The preparation of the operating activities section is shown below:
Particulars Amount
Cash flow from operating activities
Net income for the fiscal year $719,000
Adjustment for non-cash effects:
Depreciation and amortization $86,000
Changes in operating assets and liabilities:
Add: Decrease in accounts receivable $41,000
Less: Increase in inventories ($11,100)
Less: Increase in prepaid expenses ($10,400)
Add: Increase in salary payable $11,900
Less: Decrease in income tax payable ($17,000)
Net cash flows from operating activities $819,400
Jim borrowed 10,000 from Bank X at an annual effective rate of 8%. He agreed to repay the bank with 5 level annual installments at the end of each year. At the same time, he also borrowed 15,000 from bank Y at an annual effective rate of 7.5%. He agreed to pay the bank this loan with 5 level annual installments at the end of each year. He lent the 25,000 to Wayne immediate in exchange for 4 annual level repayments at the end of each year, at an annual effective rate of 8.5%. Jim can only reinvest the proceeds at an annual effective rate of 6%. Immediately after repaying the loans to the banks in full, determine how much Jim has left.
Answer:
$373.43
Explanation:
the cash outflows associated to the first loan are 5 level payments of $2,504.56 each (= $10,000 / 3.992717 PV annuity factor, 8%, 5 periods).
the cash outflows associated to the second loan are 5 level payments of $3,707.47 each (= $15,000 / 4.048857 PV annuity factor, 7.5%, 5 periods).
total cash outflows associated to both loans = $6,212.03
inflows associated with investment are 4 level payments of $7,632.20 each (= $25,000 / 3.275596 PV annuity factor, 8.5%, 4 periods).
net cash flow year 1 = $7,632.20 - $6,212.03 = $1,420.17
net cash flow year 2 = $7,632.20 - $6,212.03 + ($1,420.17 x 1.06) = $2,925.55
net cash flow year 3 = $7,632.20 - $6,212.03 + ($2,925.55 x 1.06) = $4,521.25
net cash flow year 4 = $7,632.20 - $6,212.03 + ($4,521.25 x 1.06) = $6,212.70
net cash flow year 5 = ($6,212.70 x 1.06) - $6,212.03 = $373.43
Hughes Corporation is considering replacing a machine used in the manufacturing process with a new, more efficient model. The purchase price of the new machine is $150,000 and the old machine can be sold for $100,000. Output for the two machines is identical; they will both be used to produce the same amount of product for five years. However, the annual operating costs of the old machine are $18,000 compared to $10,000 for the new machine. Also, the new machine has a salvage value of $25,000, but the old machine will be worthless at the end of the five years. You are deciding whether the company should sell the old machine and purchase the new model. You have determined that an 8% rate properly reflects the time value of money in this situation and that all operating costs are paid at the end of the year. For this initial comparison you ignore the effect of the decision on income taxes. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) Required: 1. What is the incremental cash outflow required to acquire the new machine
Answer:
50,000
Explanation:
Hughes Corporation can calculate the incremental cash outflow required to acquire the new machine by just deducting the sales proceeds from the cost of the new machine.
DATA
New machine = $150,000
Old machine = 100,000
Cash outflow per year (18,000 - 10,000) = 8,000
Salvage value = 25,000
Annuity factor = 8%
Solution
Incremental Cash outflow = Cost of new machine - Sales proceeds from old machine
Incrementa Cash outflow = 150,000 - 100,000
Incremental Cash outflow = $50,000
Civil liberties in Latin America vary. This means that __________. A. everyone across the region has the same civil liberties B. some people have more civil liberties than others C. people in Latin America have no civil liberties D. people in Latin America have the same civil liberties as people in the US
Answer:
Civil liberties in Latin America vary. This means that __________. A. everyone across the region has the same civil liberties B. some people have more civil liberties than others C. people in Latin America have no civil liberties D. people in Latin America have the same civil liberties as people in the US = Answer Is B
Explanation:
Some People Do Have More Rights That Others, Due To Capitalism, And Racism, And Think The Whites Are Most Important, Even Though Some "Not American" People Helped Form What Is Today, I Must Stop Know Before I Start Talking About All That
Answer:
b btw
Explanation:
Which of the following positions would be considered a human resource specialist?
Answer:
1) Job Application. ...
2) Employee Benefits Survey. ...
3) Employee Referral Form. ...
4) 360 Degree Feedback. ...
5) PTO Request.
Explanation:
Rafner Manufacturing identified the following budgeted data in its two production departments. Assembly Finishing Manufacturing overhead costs . $1,200,000 $600,000 Direct labor hours 12,000 DLH 20,000 DLH Machine hours . 6,000 MH 16,000 MH 1. What is the company’s single plantwide overhead rate based on direct labor hours? 2. What is the company’s single plantwide overhead rate based on machine hours? (Round your answer to two decimal places.)
Answer:
Results are below.
Explanation:
Giving the following information:
Total estimated overhead= 1,200,000 + 600,000= 1,800,000
Direct labor hours= 12,000 + 20,000= 32,000
Machine hours= 6,000 + 16,000= 22,000
To calculate the predetermined overhead rate, we need to use the following formula:
Predetermined manufacturing overhead rate= total estimated overhead costs for the period/ total amount of allocation base
Based on direct labor hours:
Predetermined manufacturing overhead rate= 1,800,000/32,000
Predetermined manufacturing overhead rate= $56.25 per direct labor hour
Based on machine hours:
Predetermined manufacturing overhead rate= 1,800,000/22,000
Predetermined manufacturing overhead rate= $81.82 per machine hour
Carnes has the following account balances as of December 31, 2017 before an acquisition transaction takes place. Inventory $100,000 Land 400,000 Buildings (net) 500,000 Common stock ($10 par) 600,000 Additional paid-in capital 200,000 Retained earnings 200,000 Revenues 450,000 Expenses 250,000 The fair value of Carnes' Land and Buildings are $650,000 and $550,000, respectively. On December 31, 2017, Riley Company issues 30,000 shares of its $10 par value ($25 fair value) common stock in exchange for all of the shares of Carnes' common stock. Riley paid $10,000 for costs to issue the new shares of stock. Before the acquisition, Riley has $700,000 in its common stock account and $300,000 in its additional paid-in capital account. At the date of acquisition, by how much does Riley's additional paid-in capital increase or decrease? Question 2 options: A) $450,000 increase. B) $640,000 increase. C) $440,000 increase. D) $0. E) $650,000 decrease.
Answer:
C) $440,000 increase.
Explanation:
Particulars Amount
Number of shares issued (a) 30,000
Issued price per shares $25
Less: Par value per shares $10
Paid in capital in excess of par per share (b) $10
Total paid in capital in excess of par (a*b) $450,000
(30,000 shares * $15)
Less: Issue costs $10,000
Increase in additional paid-in-capital $440,000