Answer:
medium of exchange
store of value
unit of account
Explanation:
Money is a valuable commodity and a medium of exchange. Modern economies use flat money that is not a community nor backed by the economy.
What do you mean by money as a medium of exchange?Money is a medium of exchange; allows people to get what they need to live. Trade was one of the exchanges of goods before money was created.
Like gold and other precious metals, money is a valuable commodity because to many people it represents something valuable.
About inflation, it leads the rise in prices and services and is a reason of the production of goods and services also gets affected in the economy.
Hence, Inflation affects the flow of money in the economy by reducing the purchasing power of clients.
To learn more about money as medium of exchange, refer:
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Lo-crete produces quick setting concrete mix. Production of 200,000 tons was started in April, 190,000 tons were completed. Material costs were $3,152,000 for the month while conversion costs were $591,000. There was no beginning work-in-process; the ending work-in-process was 70% complete. What is the cost of the product that was completed and transferred to finished goods
Answer:
$3,564,400
Explanation:
Equivalent units of Production
Materials = 190,000 + 10,000 = 200,000
Conversion cost = 190,000 + 10,000 x 70% = 197,000
Cost per equivalent units
Materials = $3,152,000 / 200,000 =$15.76
Conversion Cost = $591,000 / 197,000 =$3.00
Total cost per unit = $18.76
Therefore,
the cost of the product that was completed and transferred to finished goods is $3,564,400 ( 190,000 x $18.76)
Your uncle just won the weekly lottery, receiving $375,000, which he invested at a 7.5% annual rate. He now has decided to retire, and he wants to withdraw $35,000 at the end of each year, starting at the end of this year. What is the maximum number of whole payments that can be withdrawn before the account is exhausted, i.e., before the account balance would become negative? (Hint: Round down to the nearest whole number.)
Answer:
22
Explanation:
Calculation to determine the maximum number of whole payments that can be withdrawn
Based on the information given we would be using financial calculator to determine the maximum number of whole payments that can be withdrawn which represent N
PV -$375,000
PMT $35,000
I 7.50% Annual rate
FV $0
N ?
Hence;
N=22
Therefore the maximum number of whole payment that can be withdrawn will be 22
Fultz Company has accumulated the following budget data for the year 2020.
1. Sales: 31,480 units, unit selling price $89.
2. Cost of one unit of finished goods: direct materials 1 pound at $5 per pound, direct labor 3 hours at $12 per hour, and manufacturing overhead $6 per direct labor hour.
3. Inventories (raw materials only): beginning, 10,270 pounds; ending, 15,380 pounds.
4. Selling and administrative expenses: $170,000; interest expense: $30,000.
5. Income taxes: 30% of income before income taxes.
Required:
a. Prepare a schedule showing the computation of cost of goods sold for 2020.
b. Prepare a budgeted multiple-step income statement for 2020.
Answer:
Part a
Fultz Company
Schedule of cost of goods sold for 2020.
Direct Materials (5,110 x $5) $25,550
Direct Labor (3 x $12 x 5,110) $229,950
Manufacturing overheads (3 x $6 x 5,110) $91,980
Total Cost $347,480
Part b
Fultz Company
Budgeted multiple-step income statement for 2020.
Sales (31,480 x $89) $2,801,720
Less Cost of Sales ($347,480)
Gross Profit $2,454,240
Less Expenses :
Operating Expenses
Selling and administrative expenses ($170,000)
Operating Profit $2,284,240
Less Non-Operating Expenses
Interest expenses ($30,000)
Net Income before Income taxes $2,254,240
Income tax expense ($676,272)
Net Income after Interest and tax $1,577,968
Explanation:
For a manufacturing firm, the cost of goods manufactured automatically becomes the cost of goods sold.
The first step is to calculate units of Raw Materials used. The difference in raw material inventories provides this amount as :
Units of Raw Materials used = 15,380 pounds - 10,270 pounds = 5,110 pounds
Remember a Multi-step Income Statement separates Profit generated from Primary Activities (Operating Profit) of the firm and those from Secondary Activities Activities (Net Income) as shown above.
Aspen Ski Resorts has 100 employees, each working 40 hours per week and earning $19 an hour. Although the company does not pay any health or retirement benefits, one of the perks of working at Aspen is that employees are allowed free skiing on their days off. Federal income taxes are withheld at 15% and state income taxes at 5%. FICA taxes are 7.65% of the first $118,500 earned per employee and 1.45% thereafter. Unemployment taxes are 6.2% of the first $7,000 earned per employee.
Required:
1. Compute the total salary expense, the total withholdings from employee salaries, and the actual direct deposit of payroll for the first week of January.
2. Compute the total payroll tax expense Aspen Ski Resorts will pay for the first week of January in addition to the total salary expense and employee withholdings calculated in Part 1.
Answer:
1. Total salary expense $76,000
Total withholdings $21,014
Actual direct deposit $54,986
2. Total payroll tax expense $10,526
Explanation:
1.Computation for the total salary expense, the total withholdings from employee salaries, and the actual direct deposit of payroll for the first week of January.
Computation for the total salary expense
Total salary expense= 100 employees x 40 Hours x $ 19 per Hour
Total salary expense=$76,000
Computation for the total withholdings from employee salaries
Federal income tax $11,400
($ 76,000 x 15% )
State income tax $3,800
($ 76,000 x 5% )
FICA taxes
($ 76,000 x 7.65% ) $5,814
Total withholdings $21,014
($11,400+$3,800+$5,814)
Computation for the actual direct deposit of payroll for the first week of January
Actual direct deposit= $ 76,000 -$21,014 ) Actual direct deposit=$54,986
Therefore Total salary expense will be $76,000,
Total withholdings will be $21,014 and Actual direct deposit will be $54,986
2. Computation for the total payroll tax expense Aspen Ski Resorts will pay for the first week of January
FICA taxes $5,814
($ 76,000 x 7.65% )
Unemployment taxes $4,712
($76,000 x 6.2% )
Total payroll tax expense $10,526
($5,814+$4,712)
Therefore the total payroll tax expense Aspen Ski Resorts will pay for the first week of January in addition to the total salary expense and employee withholdings calculated in Part 1 will be $10,526
Approach Company, which applies overhead to production on the basis of machine hours, reported the following data for the period just ended: Actual units produced: 14,800 Actual fixed overhead incurred: $791,000 Standard fixed overhead rate: $13 per hour Budgeted fixed overhead: $780,000 Planned level of machine-hour activity: 60,000 If Approach estimates four hours to manufacture a completed unit, the company's fixed-overhead volume variance would be:
Answer: 10400 unfavorable
Explanation:
Firstly, we should note that the fixed overhead volume variance is the difference between the standard fixed overhead for actual output and the budgeted fixed overhead.
Budgeted fixed overhead = 780000
The standard fixed overhead for the actual output will be:
= Actual output × Number of hour per unit × the standard fixed overhead rate
= 14800 × 4 × 13
= 769,600
Then, the fixed overhead volume variance will be:
= 769600 - 780000
= 10400 Unfavorable
Assume you are using the dividend growth model to value stocks. If you expect the inflation rate to increase, you should also expect: A. market value of all stocks to decrease, all else equal. B. market value of all stocks to remain constant as the dividend growth will offset the increase in inflation. C. stocks that do not pay dividends to decrease in price while dividend paying stocks maintain a constant price.
Answer:
A
Explanation:
the constant dividend growth model
price = d1 / (r - g)
d1 = next dividend to be paid
r = interest rate
g = growth rate
Interest rate used is usually nominal, thus, it increases with inflation rate
We can see that the interest rate is an inverse function of the value, thus when inflation increases, interest rate increases and price declines
Example
d1 = 5
r = 10%
g = 5%
5/ (0.1 - 0,05) = 100
when interest rate increases to 20% as a result of inflation, value becomes
5 / 0.2 - 0.05 = 33.33
value decreased with increase in inflation
. A building owner charges net rent of $20 in the first year, $21 in the second year, and $22 in the third year, but is providing six months of free rent in the first year as a concession. Using a 10 percent discount rate, what is the effective rent over the three years
Answer: $17.28
Explanation:
6 month free concession in first year drops rent to:
= 20 / 2
= $10
Effective rent = [Present value of Year 1 rent + Present value of Year 2 rent + Present value of Year 3 rent ] / [ 1 - (1 / (1 + rate)^ number of years) / rate]
= [(10 / (1 + 10%) ) + (21 / (1 + 10%)²) + (22 / (1 + 10%)³)] * [1 - (1 / (1 + 10%)³/ 10%)]
= (9.09 + 17.355 + 16.5289) / 2.48685
= $17.28
In 2020, Bertha Jarow had a $28,000 loss from the sale of a personal residence. She also purchased from an individual inventor for $7,000 (and resold in two months for $18,000) a patent on a rubber bonding process. The patent had not yet been reduced to practice. Bertha purchased the patent as an investment. In addition, she had the following capital gains and losses from stock transactions:
Long-term capital loss ($6,000)
Long-term capital loss carryover from 2019 (12,000)
Short-term capital gain 21,000
Short-term capital loss (7,000)
A. Bertha has a net long-term capital loss of $___. Bertha has a net short-term capital gain of $ 14000. As a result, Bertha has an overall net short-term capital gain of $___.
B. Complete the letter to Bertha explaining the tax treatment of the sale of her personal residence. Assume Bertha's income from other sources puts her in the 28% bracket.
Answer and Explanation:
a. The net long term capital loss would be $7,000
And, the net short term capital gain would be $14,000 ($21,000 - $7,000)
So as a result the overall net short term capital gain is $7,000
b. Since there is a loss arise from the personal residence of $28,000 so the blank would be filled by the amount i.e. $28,000 and the rest of the things would be alright.
The owner of a bookstore in a college town notices that demand for certain textbooks peak during certain times of the year.She assumes that these peaks coincide with the beginning of semesters when professors recommend these books to the students.She decides to estimate future sales of these textbooks by measuring the interconnection between sales and announcement of courses that recommend them.Which of the following methods of sales forecasting is she using?
A) Jury of executive opinion method
B) Dependence method
C) Time-series analysis
D) Correlation analysis
Answer: D. Correlation analysis
Explanation:
Since she estimated the future sales of these textbooks by measuring the interconnection between sales and announcement of courses that recommend them, she's using correlation analysis of sales forecast.
Correlation analysis is used to show the relationship that exist between two quantitative variables. We should note that in this case, the dependent variable is sales while the independent variables will be the factors that bring about the fluctuation in sales.
A high correlation simply implies that there's a strong relationship between the variables while a weak correlation implies that the variables are not related.
Pine Corp. produces three products, and currently has a shortage of machine hours since one of its two machines is down. The selling price, costs, and machine time requirements of the three products are as follows: Product A Product B Product C Selling price$5.00 $3.00 $5.00 Variable cost per unit$3.50 $2.00 $2.00 Machine hours per unit 0.75 0.25 1 Pine has unlimited demand for all its products. Which product/s should Pine Corp. produce to maximize profit while the machine is down
Answer:
product B
Explanation:
The computation is shown below;
Particulars Product A Product B Product C
Selling Price $5.00 $3.00 $5.00
Less: Variable cost per unit ($3.50) ($2.00) ($2.00)
Contribution per unit $1.50 $1.00 $3.00
Machine hours per unit 0.75 0.25 1
Contribution per machine hour $2.00 $4.00 $3.00
($1.50 ÷ 0.75) ($1.00 ÷ 0.25) ($3.00 ÷ 1)
The product B should be produced as it has the highest contribution per machine hour
What steps will allow you to use the Keep Together property to ensure that none of the records are broken between two pages when they are printed?
Answer: 1. design
2. property sheet
3. yes
Explanation: just did it
On January 1, 2021, for $18.9 million, Cenotaph Company purchased 10% bonds, dated January 1, 2021, with a face amount of $20.9 million. For bonds of similar risk and maturity, the market yield is 12%. Interest is paid semiannually on June 30 and December 31. Required: 1. Prepare the journal entry to record interest on June 30, 2021, using the effective interest method. 2. Prepare the journal entry to record interest on December 31, 2021, using the effective interest method.
Answer:
1. Dr Interest expense $1,134million
Cr Discount on bonds payable $89,000
Cr Cash $1,045million
2. December 31,2021
Dr Interest expense $1,141,200
Cr Discount on bonds payable 96,200
Cr Cash $1,045,000
Explanation:
1. Preparation of the journal entry to record interest on June 30, 2021, using the effective interest method.
June 30,2021
Dr Interest expense $1,134million
[$18.9 million x 12%.x 6/12]
Cr Discount on bonds payable $89,000
($1,134million-$1,045million)
Cash [$20.9 million x 10% x 6/12] $1,045million
[To record semi-annual interest payment]
2. Prepareion the journal entry to record interest on December 31, 2021, using the effective interest method.
Date Account title and Explanation Debit Credit
December 31,2021 Interest expense [($18.9 million + $120,000) x 12% x 6/12] $1,141,200
Discount on bonds payable 96,200
$1,141,200-$1,045,000
Cash [$20.9 million x 10% x 6/12] $1,045,000
[To record semi-annual interest payment]
In 2013, Chirac Enterprises issued, at par, 75 $1,060, 8% bonds, each convertible into 200 shares of common stock. Chirac had revenues of $19,100 and expenses other than interest and taxes of $8,860 for 2014. (Assume that the tax rate is 40%.) Throughout 2014, 2,530 shares of common stock were outstanding; none of the bonds was converted or redeemed.(a) Compute diluted earnings per share for 2014. (Round answer to 2 decimal places, e.g. $2.55.)(b) Assume the same facts as those assumed for part (a), except that the 75 bonds were issued on September 1, 2014 (rather than in 2013), and none have been converted or redeemed. (Round answer to 2 decimal places, e.g. $2.55.)(c) Assume the same facts as assumed for part (a), except that 25 of the 75 bonds were actually converted on July 1, 2014. (Round answer to 2 decimal places, e.g. $2.55.)
Answer:
Chirac Enterprises
a) Diluted EPS = $0. 35
b) Diluted EPS = $0. 35
c) Diluted EPS = $0. 35
Explanation:
a) Data and Calculations:
Issued at par 75 $1,060, 8% bonds = $70,000 Bonds Premium $9,500
Each of the 75 bonds are convertible into 200 shares = 15,000 (75 * 200) shares
2014 Revenue $19,100
2014 expenses 8,860
Pre-tax income $10,240
Tax (40%) 4,096
Net income $6,144
Ordinary EPS = $2.43 per share ($6,144/2,530)
Common shares = 2,530
Convertible bonds shares = 15,000
Total shares = 17,530
Diluted EPS = $0. 35 ($6,144/17,530) per share
b) The basic assumption for computing diluted earnings per share is that Chirac's earnings are expressed per share (EPS) as if all convertible securities were exercised. This implies that whether the bonds had been converted or not, the number of the shares used for calculating diluted earnings per share will remain the same in these scenarios.
Ring Me Up Inc. has net income of $143,100 for the year ended December 31, 2019. At the beginning of the year, 36,000 shares of common stock were outstanding. On May 1, an additional 18,000 shares were issued. On December 1, the company purchased 4,300 shares of its own common stock and held them as treasury stock until the end of the year. No other changes in common shares outstanding occurred during the year. During the year, Ring Me Up paid the annual dividend on the 9,000 shares of 4.65%, $100 par value preferred stock that were outstanding the entire year.
Required:
Calculate basic earnings per share of common stock for the year ended December 31, 2019.
Answer:
$2.13
Explanation:
Computation what the basic earnings per share of common stock for the year ended December 31, 2019 be
Using this formula
Basic earnings per share = Net income - preferred dividends / Weighted average no of shares outstanding
Let plug in the formula
Basic earnings per share = $143,100 - (9,000*4.65%*100) / (36,000*12/12)+(18,000*8/12) - (4,300*1/12)
Basic earnings per share = $143,100 - 41,850 / 36,000+12,000 - 358
Basic earnings per share = 101,250 / 47,642
Basic earnings per share =$2.13
Therefore the basic earnings per share of common stock for the year ended December 31, 2019 be $2.13
What are out-of-order rooms? How do they differ from out-of-inventory rooms
Sole Purpose Shoe Company is owned and operated by Sarah Charles. The company manufactures casual shoes, with manufacturing facilities in your state. Sarah began the business this year, and while she has a great deal of experience in manufacturing popular and comfortable shoes, she needs some help in evaluating her results for the year, and asks for your help.
Sarah’s first questions for you have to do with the general ideas and terminology used to evaluate variances.
1. Why might Sarah want to use standard costs to compare with her actual costs?
a. Management can evaluate the differences between standard costs and actual costs to focus on correcting the cost variances.
b. Standard costs give management a cost structure for products that is applicable for the entire life of the business.
c. Standard costs allow management to motivate employees by comparing their performance to what it would be under perfect conditions.
2. What are some possible drawbacks to using standard costs that Sarah might consider? Check all that apply.
a. Since standards are impossible to attain, they are a distraction from the work at hand.
b. Since standards never change, they do not reflect reality.
c. Standards limit operating improvements because employees may be discouraged from improving beyond the standards.
d. Employees may focus only on efficiency improvement and their own operations rather than considering the larger objectives of the organization.
e. Standards may become "stale" in a dynamic manufacturing environment.
Answer:
1. The reason Sarah might want to use standard costs to compare with her actual costs is:
a. Management can evaluate the differences between standard costs and actual costs to focus on correcting the cost variances.
2. Drawbacks of using Standard Costs are:
c. Standards limit operating improvements because employees may be discouraged from improving beyond the standards.
d. Employees may focus only on efficiency improvement and their own operations rather than considering the larger objectives of the organization.
e. Standards may become "stale" in a dynamic manufacturing environment.
Explanation:
Standard costs encourage the pursuit of management goals. They are the costs that should be under a particular type of circumstances. They are usually compared with actual costs to determine their differences or variances. Their use helps management to focus on how to improve overall performance.
Which of the following will not create minimum contacts in a state sufficient to find personal jurisdiction on an out-of-state defendant? Group of answer choices A company maintains no physical office within a state and does not send sales personnel in to conduct business, but it target advertises in the forum state, providing special products and discounts for the forum state's residents. A company maintains an office in the forum state that is manned once a week by employees. A company sends sales personnel into the forum state to conduct business but does not maintain an office within the forum state. A company maintains a website that provides information about its products and that provides an address or number that a customer can contact to obtain an order form to purchase products directly from the company.
Answer: A company maintains a website that provides information about its products and that provides an address or number that a customer can contact to obtain an order form to purchase products directly from the company.
Explanation:
With different states having varying laws but yet still sharing a lot of business interests, it is important that the states know when they can have jurisdiction over a person.
Minimum contacts is the solution and is used to determine whether an entity has sufficient contacts in a state to warrant jurisdiction over them.
Simply having a website that can be accessed by people in a state does not fall under the provisions required for minimum contact to be met so the courts in this state cannot have personal jurisdiction over this company.
Assume that a parent company owns a 100% controlling interest in its long-held subsidiary. On December 31, 2013, a parent company sold equipment to the subsidiary for $118,000. The equipment originally cost the parent $180,000, and accumulated depreciation through December 31, 2013 was $36,000. The parent depreciated the equipment for 10 years using the straight-line method and no salvage value. After the transfer, the subsidiary will depreciate the equipment for 8 years with no salvage value. Related to the transferred equipment, which of the following items is true regarding the preparation of the consolidated financial statements for the year ending December 31, 2013?A. The consolidation entries will include a $26,000 debit to "Equipment (gross)"B. The consolidation entries will include a $26,000 credit to "Loss on Sale of Equipment"C. The consolidation entries will include a $26,000 debit to "Gain on Sale of Equipment"D. The consolidation entries will include a $26,000 credit to "Accumulated depreciation"
Answer:
Related to the transferred equipment, the items that is true regarding the preparation of the consolidated financial statements for the year ending December 31, 2013 is:
C. The consolidation entries will include a $26,000 debit to "Gain on Sale of Equipment."
Explanation:
a) Data and Calculations:
Original cost of the equipment to the parent = $180,000
Transfer of equipment to subsidiary = (118,000)
Accumulated depreciation to December 31, (36,000)
Unaccounted balance = 26,000
b) The unaccounted balance of $26,000 needs to be credited to the parent's Equipment account to remove it from the account. This will have a corresponding debit entry in another account. The only correct entry among the options is C.
Ace Company purchased 10,000 bonds issued by Jack Company in 2018 for $53 per bond and classified the investment as securities available-for-sale. The value of the Jack investment was $83 per bond on December 31, 2019, and $100 per bond on December 31, 2020. During 2021, Ace sold all of its Jack investment at $148 per bond. In its 2021 income statement, Ace would report: Multiple Choice A gain of $950,000. A gain of $480,000. A gain of $470,000. A gain of $1,420,000.
Answer:
A gain of $950,000
Explanation:
The computation is shown below:
= ($83 - $53) × 10,000 bonds + ($100 - $83) × 10,000 bonds + ($148 - $100) × 10,000 bonds
= $300,000 + $170,000 + $480,000
= $950,000
Hence, the first option is correct
6. Ruben earned a salary of $60,000 in 2001 and $80,000 in 2006. The consumer price index was 177 in 2001 and 221.25 in 2006. Ruben's 2001 salary in 2006 dollars is Ruben earned a salary of $60,000 in 2001 and $80,000 in 2006. The consumer price index was 177 in 2001 and 221.25 in 2006. Ruben's 2001 salary in 2006 dollars is
Answer:
Ruben's 2001 salary in 2006 dollars is $75,000.
Explanation:
This can be calculated as follows:
Ruben's 2001 salary = $60,000
Consumer price index in 2001 = 177
Consumer price index in 2006 = 221.25
Therefore, wee have:
Ruben's 2001 salary in 2006 dollars = Ruben's 2001 salary * (Consumer price index in 2006 / Consumer price index in 2001) ............... (1)
Substituting the relevant valued into equation (1), we have:
Ruben's 2001 salary in 2006 dollars = $60,000 * (221.25 / 177) = $75,000
Therefore, Ruben's 2001 salary in 2006 dollars is $75,000. This indicates that Reuben's purchasing power increased between 2001 and 2006.
Bramble Company has the following equivalent units of production for July: materials 30200 and conversion costs 23500. Production cost data are:
Materials Conversion
Work in process, July 1 $6400 $2600
Costs added in July 54000 35000
The unit production costs for July are:
Materials Conversion Costs
a. $1.79 $1.60
b. $1.79 $1.49
c. $2.00 $1.49
d. $2.00 $1.60
Answer:
d. $2.00 $1.60
Explanation:
The unit production costs for July are calculated as
Total Cost Calculation
Materials = $6400 + $54000 = $60,400
Conversion Costs = $2600 + $35000 = $37,600
Cost per equivalent unit
Materials = $60,400 ÷ 30,200 units =$2.00
Conversion Costs = $37,600 ÷ 23500 units =$1.60
Uptown Bank provides lockbox services. They estimate that you can reduce your average mail time by 2.2 days and your combined clearing and processing time by .75 days by implementing their system. Your firm receives 65 checks a day with an average value of $298 each. The current T-Bill rate is .01 percent per day. Assume a 365-day year. The bank will charge your firm $.15 per check. What is the annual net savings from installing this system?
Answer: $1473.067
Explanation:
First, we calculate the total time that's saved by the firm when it installs the lockbox services. This will be:
= 2.2 days + 0.75 days
= 2.95 days
Then, the gross amount that the firm will save will be:
= 65 × 2.95 × 298 × 0.01%
= $5.7142 per day
Since the bank charges the firm $0.15 per check and the firm receives 65 checks per day, the total cost to the firm will then be:
= 65 × $0.15
= $9.75 per day
The net loss will then be calculated as:
= $9.75 - $5.7142
= $4.0358 per day
Then, to get that for annual, we multiply the above value by 365. This will be:
= $4.0358 × 365
= $1473.067 per annum.
The ledger of Cheyenne Company at the end of the current year shows Accounts Receivable $77,000, Credit Sales $810,000, and Sales Returns and Allowances $41,300. Prepare journal entries for each separate scenario below. (a) If Cheyenne uses the direct write-off method to account for uncollectible accounts, journalize the entry at December 15 if Cheyenne determines that Matisse’s $900 balance is uncollectible. (b) If Allowance for Doubtful Accounts has a credit balance of $900 in the trial balance, journalize the adjusting entry at December 31, assuming uncollectibles are expected to be 10% of accounts receivable. (c) If Allowance for Doubtful Accounts has a debit balance of $496 in the trial balance, journalize the adjusting entry at December 31, assuming uncollectibles are expected to be 9% of accounts receivable.
Answer:
a. Dec 15
Dr Bad debt expense $900
Cr Account receivable $900
b. Dec 31
Dr Bad debt expense $6,800
Cr Allowance for doubtful accounts $6,800
c. Dec 31
Dr Bad debt expense $7,426
Cr Allowance for doubtful accounts $7,426
Explanation:
Preparation of the journal entries
a. Preparation of the journal entry at December 15 if Cheyenne determines that Matisse’s $900 balance is uncollectible.
Dec 15 Bad debt expense $900
Account receivable $900
b. Preparation of the adjusting entry at December 31, assuming uncollectibles are expected to be 10% of accounts receivable
Dec 31
Dr Bad debt expense $6,800
Cr Allowance for doubtful accounts $6,800
[($77,000 x 10%) - $900]
c. Preparation of the adjusting entry at December 31, assuming uncollectibles are expected to be 9% of accounts receivable
Dec 31
Dr Bad debt expense $7,426
Cr Allowance for doubtful accounts $7,426
($77,000*9%+496)
Falcon Co. produces a single product. Its normal selling price is $26 per unit. The variable costs are $16 per unit. Fixed costs are $18,900 for a normal production run of 5,000 units per month. Falcon received a request for a special order that would not interfere with normal sales. The order was for 1,470 units with a special price of $21 per unit. Falcon has the capacity to handle the special order, and for this order, a variable selling cost of $2 per unit would be eliminated. If the order is accepted, what would be the impact on net income
Answer:
Effect on income= $10,290 increase
Explanation:
Giving the following information:
Falcon can handle the special order, and for this order, a variable selling cost of $2 per unit would be eliminated.
Because it is a special order that would not affect current sales, we won't take into consideration the fixed costs.
To calculate the effect on income, we need to use the following formula:
Effect on income= Number of units sold*unitary contribution margin
Effect on income= 1,470*(21 - 14)
Effect on income= $10,290 increase
Started the business when it acquired $61,000 cash from the issue of common stock. Paid $21,300 cash to purchase inventory. Sold inventory costing $12,100 for $27,700 cash. Physically counted inventory; had inventory of $7,400 on hand at the end of the accounting period. Required a. Record the events in the T-accounts provided. b. Prepare an income statement and balance sheet.
Answer:
Part a
Transaction 1
Debit : Cash $61,000
Credit : Common Stock $61,000
Transaction 2
Debit : Merchandise $21,300
Credit : Cash $21,300
Transaction 3
Debit : Cash $27,700
Debit : Cost of Sales $12,100
Credit : Sales Revenue $27,700
Credit : Merchandise $12,100
Part b
Income Statement for the year
Sales $27,700
Less Cost of Sales
Opening Stock $0
Purchases $21,300
Less Closing Inventory ($7,400) ($13,900)
Gross Profit $13,800
Balance Sheet as at end of the year
ASSETS
Inventory $7,400
Cash ($61,000 - $21,300 + $27,700) $67,400
TOTAL ASSETS $74,800
EQUITY AND LIABILITIES
Common Stock $61,000
Net Profit $13,800
TOTAL EQUITY AND LIABILITIES $74,800
Explanation:
Step 1 : Journal entries
Tip - there are two or more accounts affected by transactions. Identify these and record the Debit and Credit
Step 2 : Income Statement
The Income Statement accounts for Revenues / Incomes and Expenses. Identify Accounts for these and Record them in this statement.
Step 2 : Balance Sheet
The Balance Sheet accounts for Assets, Liabilities and Equity. Identify Accounts for these and record them in this statement.
Dwayne Wade Company recently signed a lease for a new office building, for a lease period of 10 years. Under the lease agreement, a security deposit of $12,000 is made, with the deposit to be returned at the expiration of the lease, with interest compounded at 5% per year.
What amount will the company receive at the time the lease expires?
Answer:
The correct answer is "$19,546.74".
Explanation:
The given values are:
Amount,
= $12,000
Years,
= 10
Interest rate,
= 10%
Now,
The future value will be:
⇒ [tex]Future \ value=Amount\times (1+Rate)^{Years}[/tex]
On substituting the given values in the above formula, we get
⇒ [tex]=12000\times (1+5 \ percent)^{10}[/tex]
⇒ [tex]=12000\times (1+0.05)^{10}[/tex]
⇒ [tex]=12000\times (1.05)^{10}[/tex]
⇒ [tex]=19,546.74[/tex] ($)
8) Healthy Foods just paid its annual dividend of $1.62 a share. The firm recently 8) announced that all future dividends will be increased by 2.1 percent annually. What is one share of this stock worth to you if you require a rate of return of 15.7 percent
Answer:
$12.16
Explanation:
Calculation to determine What is one share of this stock worth to you if you require a rate of return of 15.7 percent
P0 = ($1.62 × 1.021)/(.157-.021)
P0 =1.65402/.136
P0 = $12.16
Therefore what one share of this stock will be worth to you if you require a rate of return of 15.7 percent will be $12.16
James Corporation owns 80 percent of Carl Corporation's common stock. During October, Carl sold merchandise to James for $290,000. At December 31, 30 percent of this merchandise remains in James's inventory. Gross profit percentages were 20 percent for James and 30 percent for Carl. The amount of intra-entity gross profit in inventory at December 31 that should be eliminated in the consolidation process is
Answer:
$26,100
Explanation:
Calculation to determine what The amount of intra-entity gross profit in inventory at December 31 that should be eliminated in the consolidation process is
First step is to calculate the Merchandise remaining in James's inventory
Merchandise remaining in James's inventory $290,000 × 30%
Merchandise remaining in James's inventory= $87,000
Now let calculate the intra-entity gross profit in inventory at December 31 that should be eliminated
Intra-entity gross profit=87,000 × 30%
Intra-entity gross profit= $26,100
Therefore The amount of intra-entity gross profit in inventory at December 31 that should be eliminated in the consolidation process is $26,100
The ideal measure of short-term receivables is the discounted value of the cash to be received in the future. Failure to follow this practice usually does not make the statement misleading because Question 12 options: Most short-term receivables are not interest-bearing The amount of the discount is not material The allowance includes a discount element Most receivables can be sold to a bank or factor
Answer: The amount of the discount is not material.
Explanation:
Short-term receivables as the term implies, are short term which means that they are to be received within the period/ year. When discounted therefore, the value will more or less be the same because the discounting period will be so small.
Whatever the difference between the discounted value and the original value is, it will most probably not be material enough for ignoring the practice mentioned to be an issue.
A firm has production function y = f(x1, x2) = x 1^1/3 x 2 ^2/3 , where y is the amount of output, x1, x2 are the amount of input 1 and 2 respectively.
(a) Suppose the firms chooses to produce with inputs x1^0 , x2^0 . Calculate the marginal product with respect to input 1 and input 2. (Express them in terms of x1^0 , x2^0 .)
(b) What’s the firm’s technical rate of substitution given input level x1^0 , x2^0 ?
(c) Suppose the prices for input 1 and input 2 are are respectively w1 = 8, w2 = 2. The market price for the output is p = 50. In order to produce a fixed level of output y 0 = 8, what’s the optimal amount of each input that the firm chooses to use for production?
Answer: B
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