Answer:
Adjusting Journal Entries:
1. Debit Supplies Expense $8,400
Credit Supplies $8,400
To adjust for supplies expenses for the year.
2. Debit Deferred Revenue $5,600
Credit Service Revenue $5,600
To adjust for services provided to customers.
3. Debit Salaries Expense $6,200
Credit Salaries Payable $6,200
To adjust for unpaid salaries at the end of the year.
4. Debit Interest Receivable $396
Credit Interest Revenue $396
To adjust for unreceived interest due for 9 months.
Explanation:
a) Data and Calculations:
Supplies = $13,500
Service revenue = $151,800 ($146,200 + 5,600)
Interest receivable = $396
Interest revenue = $396
Salaries payable = $6,200
Supplies expense = $8,400 ($13,500 - $5,100)
Deferred revenue = 2,500 ($8,100 - 5,600)
Salaries expense = 71,500 (65,300 + 6,200)
b) Interest Revenue is computed at 8% of $6,600 for 9 months only. This results to $396 ($6,600 * 8% * 9/12).
People are going to be different. The focus of managers should be to ________. Group of answer choices make sure the practices within their departments comply with the letter of the laws governing discrimination in employment find ways to develop strong relationships with and engage the entire workforce find ways to keep various groups within the workforce from creating conflict find commonalities among various groups displaying surface-level diversity
Answer:
find ways to develop strong relationships with and engage the entire workforce.
Explanation:
People are going to be different. The focus of managers should be to find ways to develop strong relationships with and engage the entire workforce.
A manager can be defined as an individual who is saddled with the responsibility of providing guidance, support, supervision, administrative control, as well as acting as a role model or example to the employees working in an organization by being morally upright.
Generally, managers are typically involved in taking up leadership roles and as such are expected to be build a strong relationship between their employees or subordinates by creating a fair ground for effective communication and sharing of resources and information. Also, they are required to engage their staff members (entire workforce) in the most efficient and effective manner.
One way consumers can evaluate alternatives is to identify important attributes and assess how purchase alternatives perform on those attributes. Consider the purchase of a tablet. Each attribute is given a weight to reflect its level of importance to that consumer. Then the consumer evaluates each alternative on each attribute (higher ratings indicate higher performance). A score can be calculated for each brand by multiplying the importance weight for each attribute by the brand's score on that attribute. These weighted scores are then summed to determine the score for that brand. Calculate the weighted scores for all brands. Which brand would this consumer likely choose? Which brand is this consumer least likely to purchase?
Answer:
1. Calculate the weighted scores for all brands.
Brand A score = (0.3 * 5) + (0.2 * 2) + (0.2 * 4) + (0.3 * 7)
= 4.8
Brand B score = (0.3 * 3) + (0.2 * 4) + (0.2 * 2) + (0.3 * 7)
= 4.2
Brand C score = (0.3 * 6) + (0.2 * 2) + (0.2 * 7) + (0.3 * 3)
= 4.5
2. Which brand would this consumer likely choose? Brand A
With the highest rating of 4.8, Brand A has the highest score and so will most likely be chosen.
3. Which brand is this consumer least likely to purchase? Brand B
With the lowest rating of 4.2, Brand B will be the least likely to be purchased.
When an accelerated depreciation method is used to calculate depreciation expense: Multiple Choice the accumulated depreciation account balance will increase by a larger amount in the last half of an asset's life than if straight-line depreciation is used. the net book value of the asset halfway through its useful life will be less than if straight-line depreciation is used. the net book value of the asset at the end of its useful life will be less than if straight-line depreciation is used. depreciation expense will be less in the early years of the asset's life than if straight-line depreciation is used.
Answer:
the net book value of the asset halfway through its useful life will be less than if straight-line depreciation is used.
Explanation:
Let me use an example to illustrate this.
An asset has a useful life of 4 years. It costs $1000. It has a salvage value of 0
If the straight line depreciation method is used , the depreciation expense every year = $1000/ 4 = $250
The net book value halfway through its useful life = $1000 - ($250 x 2) = $500
If double declining method is used, the depreciation expense in the first year would be = 2/4 x $1000 = $500
The net book value at the beginning of year 2 = $1000 - $500 = $500
Depreciation expense in year 2 = 2/4 x $500 = $250
The net book value at the beginning of year 3 = $500 - $250 = $250
We can see that the net book value halfway through the useful is lower when double declining depreciation method is used
An income statement for Alexander's Bookstore for the second quarter of the year is presented below: Alexander's Bookstore Income Statement For Quarter Ended June 30 Sales $ 1,000,000 Cost of goods sold 665,000 Gross margin 335,000 Selling and administrative expenses Selling $ 107,000 Administration 118,000 225,000 Net operating income $ 110,000 On average, a book sells for $50. Variable selling expenses are $4 per book with the remaining selling expenses being fixed. The variable administrative expenses are 3% of sales with the remainder being fixed. The contribution margin for Alexander's Bookstore for the second quarter is:
Answer:
Contribution margin= $225,000
Explanation:
Giving the following information:
Sales $ 1,000,000
Cost of goods sold 665,000
On average, a book sells for $50.
Variable selling expenses are $4 per book
The variable administrative expenses are 3% of sales
First, we need to calculate the number of units sold:
Units sold= 1,000,000/50= 20,000 units
Now, the total contribution margin:
Sales= 1,000,000
Cost of goods sold= (665,000)
Variable selling expenses= 4*20,000= (80,000)
Variable administrative expenses= (1,000,000*0.03)= 30,000
Contribution margin= $225,000
Lloyd Inc. has sales of $600,000, a net income of $60,000, and the following balance sheet: Cash $145,800 Accounts payable $192,780 Receivables 230,040 Notes payable to bank 108,540 Inventories 891,000 Total current liabilities $301,320 Total current assets $1,266,840 Long-term debt 270,540 Net fixed assets 353,160 Common equity 1,048,140 Total assets $1,620,000 Total liabilities and equity $1,620,000 The new owner thinks that inventories are excessive and can be lowered to the point where the current ratio is equal to the industry average, 2x, without affecting sales or net income. If inventories are sold and not replaced (thus reducing the current ratio to 2x); if the funds generated are used to reduce common equity (stock can be repurchased at book value); and if no other changes occur, by how much will the ROE change? Do not round intermediate calculations. Round your answer to two decimal places. % What will be the firm's new quick ratio? Do not round intermediate calculations. Round your answer to two decimal places. x
Answer:
The new quick ratio is 4.6
Explanation:
Current ratio = Current assets / Current liabilities
2 = (Cash + receivables + inventories) / (Accounts payable + other current liabilities
2 = ($145,800 + $230,040 + inventories ) / $192,780
2 = $375,840 + inventories / $192,780
$385,560 = $375,840 + inventories
Inventories = $385,560 - $375,840
Inventories = $9,720
This means that inventories worth of $881,280 [ $891,000 -$9,720] were sold.
Also, if the funds so gained are used to reduce common equity, meaning buying back the equity at book value, hence common equity is $166,860 [ $1,048,140 - $881,280]
ROE before selling off the inventory = Net income / Stockholder's equity
= $60,000 / $1,048,140
= 0.057 or 5.7%
ROE after selling off the inventory = Net income / Stockholder's equity
= $60,000 / $166,860
= 0.40 or 40%
The firm's new quick ratio
= [ Current assets - inventories] / Current liabilities
= [$1,266,840 - $9,720] / $270,540
= $1,257,140 / $270,540
= 4.6
You want to buy a new car, but you can make an initial payment of only $1,200 and can afford monthly payments of at most $850. a. If the APR on auto loans is 12% and you finance the purchase over 48 months, what is the maximum price you can pay for the car? (Do not round intermediate calculations. Round your answer to 2 decimal places.) b. How much can you afford if you finance the purchase over 60 months? (Do not round intermediate calculations. Round your answer to 2 decimal places.)
Answer:
a. The maximum price you can pay for the car is $33,477.87.
b. The maximum price you can pay for the car is $39,411.78.
Explanation:
a. If the APR on auto loans is 12% and you finance the purchase over 48 months, what is the maximum price you can pay for the car? (Do not round intermediate calculations. Round your answer to 2 decimal places.)
This can be determined as follows:
Calculation of the Present Value (PV) of the monthly payments
To calculate, the formula for calculating the present value of an ordinary annuity is used as follows:
PV = P * ((1 - (1 / (1 + r))^n) / r) …………………………………. (1)
Where;
PV = Present value of the monthly payments = ?
P = Monthly payment = $850
r = monthly interest rate = annual percentage rate (APR) / 12 = 12% / 12 = 1%, or 0.01
n = number of months = 48
Substitute the values into equation (1) to have:
PV = $850 * ((1 - (1 / (1 + 0.01))^48) / 0.01)
PV = $850 * 37.9739594934803
PV = $32,277.87
Calculation of the maximum price you can pay for the car
Given in the question is initial payment of only $1,200.
The present value of the monthly payments calculated above is $32,277.87.
Therefore, we have:
Maximum price = Initial payment + Present value of the monthly payments = $1,200 + $32,277.87 = $33,477.87
Therefore, the maximum price you can pay for the car is $33,477.87.
b. How much can you afford if you finance the purchase over 60 months? (Do not round intermediate calculations. Round your answer to 2 decimal places.)
This can also be determined as follows:
Calculation of the Present Value (PV) of the monthly payments
To calculate this, we use equation (1) in part (a) above, change number f months to 60 and proceed as follows:
PV = Present value of the monthly payments = ?
P = Monthly payment = $850
r = monthly interest rate = annual percentage rate (APR) / 12 = 12% / 12 = 1%, or 0.01
n = number of months = 60
Substitute the values into equation (1) to have:
PV = $850 * ((1 - (1 / (1 + 0.01))^60) / 0.01)
PV = $850 * 44.9550384062241
PV = $38,211.78
Calculation of the maximum price you can pay for the car
Given in the question is initial payment of only $1,200.
The present value of the monthly payments calculated above is $38,211.78.
Therefore, we have:
Maximum price = Initial payment + Present value of the monthly payments = $1,200 + $38,211.78 = $39,411.78
Therefore, the maximum price you can pay for the car is $39,411.78.
Using your accounting knowledge, find the missing amounts in the following separate income statements. (Amounts to be deducted should be indicated by a minus sign.)
a b c d e
Sales $62,000 $43,500 $46,000 fill in blank $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 fill in blank fill in blank 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 fill in blank fill in blank 7,000
Gross profit 27,950 fill in blank 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
Answer:
1. Sales of column d = 79,000
2. Total cost of merchandise purchases of column b = $1,950
3. Total cost of merchandise purchases of column c = $43,750
4. Cost of goods sold of column c = $42,250
5. Cost of goods sold of column d = $33,400
6. Gross profit of column b = $27,500
Explanation:
Note: See the attached excel for the calculations
The following formulas are used in the calculations in the attached excel file:
Sales = Cost of goods sold + Gross profit
Total cost of merchandise purchases = Cost goods sold - Beginning merchandise inventory + Ending merchandise inventory
Cost goods sold = Beginning merchandise inventory + Total cost of merchandise purchases - Ending merchandise inventory
Gross profit = Sales - Cost of goods sold
The May transactions of Bramble Corp. were as followsMay 4 Paid $610 due for supplies previously purchased on account.7 Performed advisory services on account for $6,840.8 Purchased supplies for $870 on the account.9 Purchased equipment for $1,930 in cash17 Paid employees $700 in cash22 Received bill for equipment repairs of $80029 Paid $1,280 for 12 months of the insurance policy. Coverage begins JuneJournalize the transactions. (If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when the amount is entered. Do not indent manually. Record journal entries in the order presented in the problem.)
Answer: Please see answers in explanation column
Explanation:
a)Journal To record payment due for supplies
Date Account titles Debit Credit
May 4 Accounts Payable $610
Cash $610
(b)Journal To record services on account
May 7 Accounts Receivable $6,840
Service Revenue $6,840
c)Journal To record supplies on account
May 8 Supplies $870
Accounts Payable $870
d)Journal To record equipment purchased for cash
May 9 Equipment $1,930
Cash $1,930
May 17 Journal To record cash paid to employees
Salaries and Wages $700
Cash $700
May 22 Journal To record bill received for for Equipment repairs
Repair and Maintenance $800
To Accounts Payable $800
May 29 Journal to record Prepaid insurance
Prepaid Insurance $1,280
To Cash $1,280
Prat Corp. started the Year 2 accounting period with $33,000 of assets (all cash), $13,500 of liabilities, and $8,000 of common stock. During the year, the Retained Earnings account increased by $10,550. The bookkeeper reported that Prat paid cash expenses of $27,500 and paid a $2,300 cash dividend to the stockholders, but she could not find a record of the amount of cash that Prat received for performing services. Prat also paid $6,000 cash to reduce the liability owed to the bank, and the business acquired $7,400 of additional cash from the issue of common stock.
a-1. Prepare an income statement for the 2018 accounting period.
a-2. Prepare a statement of changes in stockholders’ equity for the 2018 accounting period.
a-3. Prepare a period-end balance sheet for the 2018 accounting period.
a-4. Prepare a statement of cash flows for the 2018 accounting period.
b) Determine the percentage of total assets that were provided by creditors, investors, and earnings.
Answer:
1.Net Profit $12,850
Profit transfered to retained earnings $10,550
2. $37,450
3.$44,950
4a.$44,950
4b.CREDITORS=16.69%
INVESTORS=34.26%
EARNINGS=49.05%
Explanation:
1. Preparation of Income statement
Prat Corp. Income Statement
For the year ending 2018
Sales Revenue (Balancing figure) 40,350
(27,500+10,550+2,300)
Less: Expenses (27,500)
Net Profit 12,850
Less: Dividend (2,300)
Profit transfered to retained earnings $10,550
2. Preparation for Statement of changes in stakeholder's equity.
Common stock($) Retained Earnings($) Total($)
Opening Balance 8,000 11,500 19,500
(33,000-13,500-8,000)
Issue of common stock 7,400 - 7,400
Profit during the year - 12,850 12,850
(40,350-27,500)
Dividend paid - (2,300) (2,300)
Closing Balance $15,400 $22,050 $37,450
3. Preparation of Balance sheet
Prat Corp. Balance Sheet
As of December 31, 2018
ASSETS
Current Assets
Cash CFS 44,950
Total Assets 44,950
EQUITY AND LIABILITIES
Stockholder's Equity
Common Stock 15,400
Retained Earnings 22,050
Total Stockholder's Equity 37,450
Liabilities (13,500-6000) 7,500
Total Liability and stockholder's equity $44,950
(37,450+7,500)
4a. Preparation for Statement of Cash flows
Prat Corp. Cash Flow Statement
For the year ended 2018
Cash Flow from operating activites
Increase in Retained earnings 10,550
Net cash provided by operating activity 10,550
Cash flow from financing activity
Increase in common stock 7,400
Reduction in debt 6,000
Net cash provided by financing activity 1,400
(7,400-6,000)
Increase in cash 11,950
(10,550+7,400-6,000)
Cash at beginning of the year 33,000
Cash at end of the year 44,950
(33,000+11,950)
4b) Calculation to Determine the percentage of total assets that were provided by creditors, investors, and earnings.
CREDITORS=7,500/44,950
CREDITORS=0.1669*100
CREDITORS=16.69%
INVESTORS=15,400/44,950
INVESTORS=0.3426*100
INVESTORS=34.26%
EARNINGS =22,050/44,950
EARNINGS=0.4905*100
EARNINGS=49.05%
Depository Institutions are required to______and_____, although the general terms used to describe these financial products may vary across the various types of institutions. Non-depository Institutions, In contrast, accept cash contributions from their customers, but the cash inflows are not called_____Instead, they're called shares or premiums.
Non-depository Institutions include:_____.
A. Commercial banks, savings banks, savings and loan associations (thrifts), and credit unions.
B. Mutual funds, insurance companies, brokerage firms, and financial services companies.
What are the different forms and products of non-depository Institutions?
If you wanted to purchase investment advice, as well as stocks, bonds, and other investments, which type of non-depository institution should you contact?
A. An insurance company.
B. A stock brokerage firm.
Just as depository institutions differ from non-depository Institutions, there are also differences between the structure and activities of, and the financial products and services provided by, various depository institutions. Which of the following statements are true?
A. Mutual savings banks and credit unions are similar in that both are owned by their depositors, who share in their profits.
B. Demand deposit accounts created by commercial banks are usually called checking accounts or negotiable order of withdrawal (NOW) accounts, while those created by credit unions are called share draft accounts.
C. Commercial banks tend to pay interest rates that are greater than those paid by savings banks and credit unions.
Answer:
Depository Institutions are required to ACCEPT DEPOSITS and HAND OUT LOANS, although the general terms used to describe these financial products may vary across the various types of institutions. Non-depository Institutions, In contrast, accept cash contributions from their customers, but the cash inflows are not called DEPOSITS. Instead, they're called shares or premiums.
Non-depository Institutions include:_____.
B. Mutual funds, insurance companies, brokerage firms, and financial services companies.
What are the different forms and products of non-depository Institutions?
Non-depository institutions include:
finance companies that generally make personal loanssecurities firms that trade securities, provide brokerage services and/or are investment banksinsurance companies that provide insurance servicesinvestment companies that sell their securities and then invest the proceedings, e.g. mutual fundsIf you wanted to purchase investment advice, as well as stocks, bonds, and other investments, which type of non-depository institution should you contact?
B. A stock brokerage firm.
Just as depository institutions differ from non-depository Institutions, there are also differences between the structure and activities of, and the financial products and services provided by, various depository institutions. Which of the following statements are true?
A. Mutual savings banks and credit unions are similar in that both are owned by their depositors, who share in their profits.
B. Demand deposit accounts created by commercial banks are usually called checking accounts or negotiable order of withdrawal (NOW) accounts, while those created by credit unions are called share draft accounts.
The stock of Wheel Corporation, a U.S. company, is publicly traded, with no single shareholder owning more than 5 percent of its outstanding stock. Wheel owns 90 percent of the outstanding stock of Axle, Inc, also a U.S. company. Axle owns 100% of the outstanding stock of Tire Corporation, a German company. Wheel and Tire each own 50 percent of the outstanding stock of Bumper, Inc., a U.S. company. Wheel and Axle each own 50 percent of the outstanding stock of Trunk Corporation, a U.S. company. Which of these corporations form an affiliated group eligible to file a consolidated tax return?
Answer: D)Wheel, Axle, and Trunk are an affiliated group.
Explanation:
Affiliated groups according to tax laws are those where a parent company owns at least 80% of the stock or the voting power in a company or in the case of multiple affiliates, the parent company must own at least 80% of one of the affiliates. This Affiliate should then own at least 80% of at least one of the others and so on.
Wheel owns 90% of Axle stock which would therefore make them affiliates. Axle then owns 100% of Tire which would then make Tire an affiliate to Axle and by extension to Wheel. Bumper is not considered an affiliate as it is only 50% owned by affiliates.
The content of your e-mails and memos will vary, but direct internal messages contain four main parts. Therefore, it is important to familiarize yourself with these four parts.
Identify the parts of the e-mail message indicated by the bracketed numbers.
To: Ellen Stanford
From: Thomas Gregory
[1] Proposed Agenda for November 6 Meeting Dear Ms. Stanford
[2] Please review the following agenda for our next shareholder meeting and recommend any changes.
[3] Rising stock prices
Discussion of new investors Portfolios and new funding Introduction of new vice-president
[4] Please send any changes to the agenda to me by 3:00 p.m., November 3 Many thanks, Thomas Thomas Gregory Financial Analyst Office: 854.454.4356 Fax: 435.458.9738 Cell: 834.435.8490
Which part of the e-mail is part [1]?
a. Subject line Opening with main idea
b. Explaining in the body
Which part of the e-mail is part [2]?
a. Explaining in the body Closing with a purpose
b. Opening with main idea
Which part of the e-mail is part [3]?
a. Explaining in the body Closing with a purpose
b. Subject line
Answer:
Four Main Parts of Email Message:
1. a. Subject line Opening with main idea
2. b. Opening with main idea
3. Explaining in the body Closing with a purpose
Explanation:
The main parts of an email include the Subject line with sender's and receiver's identities, and date. The subject line is followed by the opening introduction of the chief idea. After the introduction opening is the body of the email, which give more details about the message. The last is the closing remarks and any other desired information.
During May, Bergan Company accumulated 2,500 hours of direct labor costs on Job 200 and 3,000 hours on Job 305. The total direct labor was incurred at a rate of $28 per direct labor hour for Job 200 and $24 per direct labor hour for Job 305. Bergan Company estimates that total factory overhead costs will be $620,000 for the year. Direct labor hours are estimated to be 80,000. Journalize the entry to record the flow of labor costs into production during May.
Answer: Please see answers in explanation column
Explanation:
a)Total Labor Cost for Job 200 = Labor Hours x Direct labor rate
= 2,500 x $ 28
= $ 70,000
b)Total Labor Cost for Job 305 = Labor Hours x Direct labor rate
= 3,000 x $ 24
= $ 72,000
Labor Cost for Job 200 and Job 305 during May = $ 70,000 + $ 72,000
= $ 142,000
Date Account Titles and Explanation Debit Credit
May 31st Work In Progress $142,000
Wages Payable $ 142,000
We are examining a new project. We expect to sell 7,100 units per year at $56 net cash flow apiece for the next 10 years. In other words, the annual cash flow is projected to be $56 × 7,100 = $397,600. The relevant discount rate is 14 percent, and the initial investment required is $1,800,000. After the first year, the project can be dismantled and sold for $1,200,000. Suppose you think it is likely that expected sales will be revised upward to 10,800 units if the first year is a success and revised downward to 3,900 units if the first year is not a success. Suppose the scale of the project can be doubled in one year in the sense that twice as many units can be produced and sold. Naturally, expansion would be desirable only if the project is a success. This implies that if the project is a success, projected sales after expansion will be 21,600. Note that abandonment is still an option if the project is a failure.
a. If success and failure are equally likely, what is the NPV of the project? Consider the possibility of abandonment in answering. (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)
b. What is the value of the option to abandon? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)
a. NPV
b. Option value
Answer:
a. If success and failure are equally likely, what is the NPV of the project?
$584,710.17
b. What is the value of the option to abandon?
NPV = -$398,596.49
option value = $1,200,000 at the end of year 1
Explanation:
option to abandon:
initial investment = -$1,800,000
net cash flow year 1 = $397,600 + $1,200,000 = $1,597,600
NPV = -$1,800,000 + $1,597,600/1.14 = -$398,596.49
if first year is a success:
initial investment = -$1,800,000
net cash flow year 1 = $397,600
net cash flow year 2 to 10 = 18,00 x $56 = $604,800
NPV = -$1,800,000 + $397,600/1.14 + [$604,800 x 4.9464 (PV annuity factor, 14%, 9 periods)] = -$1,800,000 + $348,771.93 + $2,991,582.72 = $1,540,354.65
if first year is a failure:
initial investment = -$1,800,000
net cash flow year 1 = $397,600
net cash flow year 2 to 10 = 3,900 x $56 = $218,400
NPV = -$1,800,000 + $397,600/1.14 + [$218,400 x 4.9464 (PV annuity factor, 14%, 9 periods)] = -$1,800,000 + $348,771.93 + $1,080,293.76 = -$370,934.31
since the possibility of success or failure is equally possible, then we should average net cash flows for years 2 to 10:
initial investment = -$1,800,000
net cash flow year 1 = $397,600
net cash flow year 2 to 10 = ($604,800 + $218,400) / 2 = $411,600
NPV = -$1,800,000 + $397,600/1.14 + [$411,600 x 4.9464 (PV annuity factor, 14%, 9 periods)] = -$1,800,000 + $348,771.93 + $2,035,938.24 = $584,710.17
A firm has 5 million shares outstanding with a market price of $30 per share. The firm has $30 million in extra cash (short-term investments) that it plans to use in a stock repurchase; the firm has no other financial investments or any debt. What is the firm's value of operations after the repurchase? Enter your answer in millions. For example, an answer of $1.23 million should be entered as 1.23, not 1,230,000. Round your answer to two decimal places. $ million How many shares will remain after the repurchase? Round your answer to the nearest whole number. shares
Answer and Explanation:
The computation is shown below:
For the firm value of operations
Value of the firm's operations = {market price per share × number of outstanding shares ] - Additional cash needed
= [$30 × 5,000,000] - $30,000,000
= $150,000,000 - $30,000,000
= $120,000,000
Now shares after repurchase is
= Number of shares - (Additional cash needed ÷ per share value)
= 5,000,000 - ($30,000,000 ÷ $30)
= 5,000,000 - 1,000,000
= 4,000,000 shares
Factory Overhead Rates, Entries, and Account Balance Eclipse Solar Company operates two factories. The company applies factory overhead to jobs on the basis of machine hours in Factory 1 and on the basis of direct labor hours in Factory 2. Estimated factory overhead costs, direct labor hours, and machine hours are as follows:
Factory 1 Factory 2
Estimated factory overhead cost for fiscal year beginning August 1 $18,500,000 $10,200,000
Estimated direct labor hours for year 250,000
Estimated machine hours for year 600,000
Actual factory overhead costs for March $12,990,000 $10,090,000
Actual direct labor hours for March 245,000
Actual machine hours for March 610,000
a. Determine the factory overhead rate for Factory 1. $ per machine hour
b. Determine the factory overhead rate for Factory 2. $ per direct labor hour
Feedback
c. Journalize the entries to apply factory overhead to production in each factory for March.
Factory 1 Work in Process
Factory Overhead
Factory 2 Work in Process
Factory Overhead
Feedback
d. Determine the balances of the factory overhead accounts for each factory as of March 31,and indicate whether the amounts represent overapplied factory overhead or underapplied factory overhead.
Factory 1 $ Credit Overapplied
Factory 2 $ Debit Underapplied
Answer and Explanation:
The computation is shown below:-
a. Factory overhead rate for Factory 1 = Estimated factory overhead cost ÷ Estimated machine hours for year
= $18,500,000 ÷ 600,000
= $30.83
b. Factory overhead rate for Factory 2 = Estimated factory overhead cost ÷ Estimated direct labor hours for year
= $10,200,000 ÷ 600,000
= $40.80
c. The journal entry is shown below:-
1. Work in process Dr, $13,115,000 (610,000 × $21.50)
To Factory overhead $13,115,000
(Being the factory overhead is recorded)
2. Work in process Dr, $9,996,000 (245000 × $40.80)
To Factory overhead $9,996,000
(Being the factory overhead is recorded)
d. For Factory 1
= $12,990,000 - $13,115,000
= $125,000 Credit Overapplied
For Factory 2
= $10,090,000 - $9,996,000
= $94,000 Debit Underapplied
10. Uneven cash flows 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 five years: Annual Cash Flows Year 1 Year 2 Year 3 Year 4 Year 5 $100,000 $20,000 $480,000 $450,000 $550,000 The CFO of the company believes that an appropriate annual interest rate on this investment is 9%. What is the present value of this uneven cash flow stream, rounded to the nearest whole dollar
Answer:
$1,155,478
Explanation:
Present value is the sum of discounted cash flows
Present value can be found using a financial calculator
Cash flow in year 1 = $100,000
Cash flow in year 2 = $20,000
Cash flow in year 3 = $480,000
Cash flow in year 4 = $450,000
Cash flow in year 5 = $550,000
I = 9%
Present value = $1,155,478
To find the PV using a financial calculator:
1. Input the cash flow values by pressing the CF button. After inputting the value, press enter and the arrow facing a downward direction.
2. after inputting all the cash flows, press the NPV button, input the value for I, press enter and the arrow facing a downward direction.
3. Press compute
Which types of credit are most similar to each other?
A-auto loan and mortgage loan
B-auto loan and personal loan
C-credit card and mortgage loan
D-mortgage loan and personal loan
Answer:
A. Auto loan and mortgage loan
Auto loans and mortgage loans are the types of Credit that are most similar to each other. Hence, option A is appropriate.
What is the meaning of Credit?Credit is the trust that permits one party to lend money or resources to another party, with the understanding that the second party will not immediately reimburse the first party but will instead repay it or return the resources at a later time.
The capacity to access products or services or borrow money with the idea that you'll pay for them later is known as credit. A credit is an entry in personal banking or financial accounting that signifies the receipt of money.
The word "credit" has a wide variety of meanings in the financial sector. Usually, it is defined as a contract formed by two parties whereby the borrower receives anything of value now though and agrees to return to the lender at a later period, with interest.
Hence, option A is correct.
Learn more about the Credit here:
https://brainly.com/question/30698297
#SPJ7
During the first year of operations, a company sold $118,000 of goods to customers and received $99,000 in cash from customers. The remainder is owed to the company at the end of the year. The company incurred $71,800 in expenses for the year and paid $66,800 in cash for these expenses. The remainder is owed by the company at the end of the year. Based on this information, what is the amount of net income for the year?
Answer:
Net income = $46,200
Explanation:
In this scenario the company is using accrual method of accounting where some revenue is recieved in cash and the others are accounts receivable. Expenses are also paid paid partly in cash and the remaining is accounts payable.
Revenues and expenses however are recorded when they are earned or incurred.
The company earned revenue of $118,000, $99,000 is in cash and the rest is accounts receivable.
They also had expenses of $71,800 incurred with $66,800 paid in cash and the rest is accounts payable.
The net income will be revenue earned less expenses incurred.
Net income = 118,000 - 71,800
Net income = $46,200
For each of the following transactions of Spotlighter, Inc., for the month of January, indicate the accounts, amounts, and direction of the effects on the accounting equation. A sample is provided. (Sample) Borrowed $5,440 from a local bank on a note due in six months.
Received $6,130 cash from investors and issued common stock to them.
Purchased $2,500 in equipment, paying $950 cash and promising the rest on a note due in one year. Paid $1,050 cash for supplies.
Bought and received $1,450 of supplies on account.
Answer:
Spotlighter, Inc.
Indication of the accounts, amounts, and direction of the effects on the accounting equation:
1. Cash and Notes Payable, $5,440: Assets +$5,440 = Liabilities +$5,440
2. Cash and Common Stock, $6,130: Assets +$6,130 = Liabilities + Equity $6,130
3. Equipment, Cash, and Notes Payable, $2,500: Assets +$2,500 -$950 = Liabilities + $1,550 + Equity
4. Cash and Supplies: Assets -$1,050 - $1,050 = Liabilities + Equity
5. Supplies + Accounts Payable: Assets + $1,450 = Liabilities + $1,450 + Equity
Explanation:
Spotlighter's accounting equation of assets equal to liabilities plus equity will always be in balance with each business transaction that occurs. This is because each transaction involves two accounts on either side or both sides of the equation with a plus or minus action.
Indicate the financial statement on which each of the following items appears. Use I for income statement, E for statement of retained earnings, and B for balance sheet.a. Services Revenueb. Interest Payablec. Accounts Receivabled. Salaries Expensee. Equipmentf. Prepaid Insuranceg. Buildingsh. Rental Revenuei. Dividendsj. Office Suppliesk. Interest Expensel. Insurance Expense
Answer:
a. Services Revenue: I
b. Interest Payable: B
c. Accounts Receivable: B
d. Salaries Expense: I
e. Equipment: B
f. Prepaid Insurance: B
g. Buildings: B
h. Rental Revenue: I
i. Dividends: E
j. Office Supplies: B
k. Interest Expense: I
l. Insurance Expense: I
Explanation:
Financial statements can be defined as a document used for the formal communication or disclosure of financial information and statements to present and potential users such as investors and creditors. These includes balance sheet, statement of retained earnings and income statement.
a. Services Revenue: Income statement.
b. Interest Payable: Balance sheet.
c. Accounts Receivable: Balance sheet.
d. Salaries Expense: Income statement.
e. Equipment: Balance sheet.
f. Prepaid Insurance: Balance sheet.
g. Buildings: Balance sheet.
h. Rental Revenue: Income statement.
i. Dividends: Statement of retained earnings.
j. Office Supplies: Balance sheet.
k. Interest Expense: Income statement.
l. Insurance Expense: Income statement.
A company pays each of its two office employees each Friday at the rate of $100 per day for a five-day week that begins on Monday. If the monthly accounting period ends on Tuesday and the employees worked on both Monday and Tuesday, the month-end adjusting entry to record the salaries earned but unpaid is: Multiple Choice Debit Unpaid Salaries $600 and credit Salaries Payable $600. Debit Salaries Expense $600 and credit Salaries Payable $600. Debit Salaries Expense $400 and credit Cash $400. Debit Salaries Payable $400 and credit Salaries Expense $400. Debit Salaries Expense $400 and credit Salaries Payable $400.
Answer:
Debit Salaries Expense $400 and Credit Salaries payable $400.
Explanation:
Consider, we are told the company pays each of its two office employees, meaning, the 2 employees combine will earn $200 a day .
Furthermore, we are told that even though the monthly accounting period ends on Tuesday the two employees work on Monday and Tuesday, meaning, the adjusting entry to record at the month-end will be a summation of the amount earned by the two employees on the two days. That is, = $200 × 2 days = $400 (which is a salary expense).
Therefore, going by the rule of double-entry, we are obliged to debit salaries expense account and credit salaries payable account.
Which of the following is a characteristic of a non-profit organization?
a. They pay taxes
b. Generate revenue through donations
c. Are in business to make a profit
d. Sell products at competitive prices to make the most money possible
Answer:
b. Generate revenue through donations
Mr. and Mrs. Keppner file a joint income tax return. Assume the taxable year is 2020. Required: Compute their standard deduction assuming that Mr. Keppner is age 68, and Mrs. Keppner is age 60. Compute their standard deduction assuming that Mr. Keppner is age 70, and Mrs. Keppner is age 68. Compute their standard deduction assuming that Mr. Keppner is age 70, and Mrs. Keppner is age 68. Mrs. Keppner is legally blind.
Answer:
Compute their standard deduction assuming that Mr. Keppner is age 68, and Mrs. Keppner is age 60.
standard deduction = $24,800 + $1,300 = $26,100Compute their standard deduction assuming that Mr. Keppner is age 70, and Mrs. Keppner is age 68.
standard deduction = $24,800 + $2,600 = $27,400Compute their standard deduction assuming that Mr. Keppner is age 70, and Mrs. Keppner is age 68. Mrs. Keppner is legally blind.
standard deduction = $24,800 + $2,600 + $1,300 = $28,700Explanation:
The regular standard deduction for married filing jointly is $24,800 during 2020, but for every person over 65, they get an additional $1,300. This also applies if any of them is blind.
If the tax filer is single or married filing separately, then the additional amount is $1,650.
Michelle Corporation reported the following data for the month of July: Inventories: Beginning Ending Raw materials $ 37,000 $ 35,000 Work in process $ 21,000 $ 27,000 Finished goods $ 37,000 $ 52,000 Additional information: Raw materials purchases $ 71,000 Direct labor cost $ 96,000 Manufacturing overhead cost incurred $ 64,000 Indirect materials included in manufacturing overhead cost incurred $ 10,000 Manufacturing overhead cost applied to Work in Process $ 63,000 Any underapplied or overapplied manufacturing overhead is closed out to cost of goods sold. The direct materials cost for July is: rev: 02_18_2019_QC_CS-159285 Multiple Choice $63,000 $69,000 $73,000 $71,000
Answer:
$73,000
Explanation:
The computation of the direct material cost is shown below:
As we know that
Direct material cost is
= Opening balance of raw material + purchase made - ending balance of raw material
= $37,000 + $71,000 - $35,000
= $73,000
We simply applied the above formula
Hence, the correct option is third i.e. $73,000
Which statement correctly describes the current state of instant messaging in the workplace? Multiple Choice It is an established form of communicating in the workplace, and everyone agrees it should be formal. It is a new, undeveloped form of communication in the workplace, and attitudes toward it are consistent. It is an established form of communicating in the workplace, and attitudes toward it vary significantly. It is a relatively new, undeveloped form of communication in the workplace, and attitudes toward it vary. It is an established form of communicating in the workplace, and everyone agrees it should be informal.
Answer:
It is a relatively new, undeveloped form of communication in the workplace, and attitudes toward it vary.
Explanation:
Colter Steel has $4,750,000 in assets. Temporary current assets $ 1,500,000 Permanent current assets 1,525,000 Fixed assets 1,725,000 Total assets $ 4,750,000 Assume the term structure of interest rates becomes inverted, with short-term rates going to 14 percent and long-term rates 6 percentage points lower than short-term rates. Earnings before interest and taxes are $1,010,000. The tax rate is 30 percent. If long-term financing is perfectly matched (synchronized) with long-term asset needs, and the same is true of short-term financing, what will earnings after taxes be?
Answer:
$423,500
Explanation:
The computation of earnings after taxes is shown below:-
Interest cost = Long term rate × (Current assets + Fixed assets) + Short term rate × Temporary current assets
= 6% × ($1,525,000 + $1,725,000) + 14% × $1,500,000
= $405,000
So,
Earnings after taxes = (Earnings before interest and taxes - Interest cost) × (1 - Tax rate)
= ($1,010,000 - $405,000) × (1 - 30%)
= $423,500
Hence, for determining the earnings after tax we simply applied the above formula.
The Nite Lite Factory produces two products - small lamps and desk lamps. It has two separate departments - finishing and production. The overhead budget for the finishing department is $550,000, using 500,000 direct labor hours. The overhead budget for the production department is $400,000 using 80,000 direct labor hours. If the budget estimates that a desk lamp will require 2 hours of finishing and 1 hour of production, how much factory overhead will be allocated to each unit of desk lamps using the multiple production department factory overhead rate method with an allocation base of direct labor hours
Answer:
$11.1
Explanation:
We can calculate the factory overhead allocated to a unit using multiple department factory overhead rate methods with an allocation base of direct labor hours. In this method, we will divide the te total overhead cost in direct labor hours consumed in that department.
Solution
Direct Labor Overhead rate for Finishing = $550,000/500,000
Direct Labor Overhead rate for Finishing = $1.10 per hour
Direct Labor Overhead rate for Production = $400,000/80,000
Direct Labor Overhead rate for Production = $5
Overhead for DeskLamps = (Direct labor hours in Finishing x Direct Labor Overhead rate for Finishing + Direct Labor hours in Production x Direct Labor Overhead rate for Production)
Overhead for DeskLamps= (1x$1.10 + 2x$5)
Overhead for DeskLamps= $11.1
There are some who say that California Community Colleges should go ahead and raise student fees from $46 per unit to $500 per unit? Today a typical economics class costs $138 ($46 x 3 units) and under this new proposal a typical economics class would cost $1,500 ($500 x 3 units). Why would this proposal probably backfire and become a disaster for full-time community college students who normally take three or four classes per semester?
This is the complete question
A.) Since student incomes and other financial resources are limited, the demand curve for a community college education is elastic. Raising tuition will force students to drop out.B)The community college would lose so many students that their total revenue would most likely drop dramatically. C)Students living in low-income and economically challenged areas might not be will-ing to take out student loans or use credit cards to finance their education. D)All of the statements listed above are correct
Answer:
All of the options are correct
Explanation:
All of the answers in the multiple choice question are correct. The reason is because, when tuition fees are raised for students, there would be quite a number who would drop out due to their inability to pay. The demand is elastic. A rise in tuition fees causes a drop in number of college students. This would hereby cause enrollment rates to fall and further bringing about a decline in revenue. Taking loans would not be a good idea since we have students with low income who would have problems with with paying back. With all of these the the proposal to increase fees would backfire.
Parker & Stone, Inc., is looking at setting up a new manufacturing plant in South Park to produce garden tools. The company bought some land six years ago for $4.4 million in anticipation of using it as a warehouse and distribution site, but the company has since decided to rent these facilities from a competitor instead. If the land were sold today, the company would net $4.7 million. The company wants to build its new manufacturing plant on this land; the plant will cost $11.9 million to build, and the site requires $710,000 worth of grading before it is suitable for construction. What is the proper cash flow amount to use as the initial investment in fixed assets when evaluating this project? (Enter your answer in dollars, not millions of dollars, e.g. 1,234,567.) Cash flow amount $
Answer:
$17,310,000
Explanation:
Land purchased for use as warehouse and distribution site = $4.4 million(6 years ago)
Current market value of land = $4.7 million
For determining the initial investment in fixed assets for the plant, the current value of the land will have to be taken (as Parker and Stone would have had to buy land at this price for the plant, if the land was not already with it).
The amount spent on land will not be treated as sunk costs as this amount is not permanently lost. The company can recover money by selling the land. So the current market value will be included in the initial investment in fixed assets in reference to the project.
So, proper cash flow for the project = Site grading costs +Plant cost + Current market value of land
= $710,000 + $11.9 million + $4.7 million
= $17,310,000
Hence, $17,310,000 is the amount of initial investment in fixed assets to be used when evaluating this project.
