Answer:
$1,985,976.79
Explanation:
The formula for finding the amount is :
A = FV/ annuity factor
Annuity factor = {[(1+r)^n] - 1} / r
FV = Future value = $24,800,000
A = Amount
R = interest rate = 8%
N = number of years = 9
Annuity factor = (1.08^9 - 1 ) / 0.08 = 12.487558
$24,800,000 / 12.487558 = $1,985,976.79
A firm now operates as a C-Corporation. The firm has earnings before taxes of $433,743 per year and pays out all its net earnings as dividends. The firm has a corporate tax rate is 24 percent. The firm has only one owner who faces a personal income tax rate of 27 percent. What is the spendable income for the owner of the C-Corporation
Answer:
The Spending income for the owner of the C-Corporation is:
= $240,641.
Explanation:
a) Data and Calculations:
Earnings before taxes = $433,743
Corporate tax rate = 24%
Corporate tax expense = 104,098 ($433,743 * 24%)
Net Earnings after taxes = $329,645
Dividends paid out = $329,645
Retained earnings = $0
Taxable income for the owner of the C-Corporation = $329,645
Income tax rate for the owner of the C-Corporation = 27%
Income tax for the owner of the C-Corporation = $89,004 ($329,645 * 27%)
Spending income for the owner of the C-Corporation = $240,641
b) The owner of this C-Corporation cannot avoid double taxation at the corporate and individual levels. To avoid this, the owner can choose an S-Corporation.
Suman said that, "she didn't understand the
direct and indirect speech
Explanation:
Indirect speech, also known as reported speech or indirect discourse (US), is a means of expressing the content of statements, questions or other utterances, without quoting them explicitly as is done in direct speech. For example, He said "I'm coming" is direct speech, whereas He said (that) he was coming is indirect speech. Indirect speech should not be confused with indirect speech acts.
HW13. Suppose that you begin saving up to buy a car by depositing a certain amount at the end of each month in a savings account which pays 3.6% annual interest compounded monthly. If your goal is to have $15,000 in the account four and a half years from now, how much do you need to put into the savings account each month
Answer:
$256.31
Explanation:
Interest rate per annum = 3.6%
Number of years = 4.5
No of payment per annum = 12
Interest rate per period 3.6%/12 = 0.3%
Number of period = 4.5*12 = 54
FV of annuity = 15,000
Deposit in each month (P) = FVA / ([1+r)^n - 1]/r)
Deposit in each month (P) = 15,000 / ([1+0.3%]^54 - 1) / 0.3%)
Deposit in each month (P) = 15,000 / ([1.003^54 - 1]/0.003)
Deposit in each month (P) = 15,000 / (1.175575 - 1/0.003)
Deposit in each month (P) = 15,000 / (0.175575/0.003)
Deposit in each month (P) = 15,000 / 58.525
Deposit in each month (P) = 256.3007262
Deposit in each month (P) = $256.31
Jose purchased a delivery van for his business through an online auction. His winning bid for the van was $25,250. In addition, Jose incurred the following expenses before using the van: shipping costs of $1,270; paint to match the other fleet vehicles at a cost of $1,440; registration costs of $2,970, which included $2,750 of sales tax and an annual registration fee of $220; wash and detailing for $121; and an engine tune-up for $327.
Required:
What is Joseâs cost basis for the delivery van?
Answer:
$30,710
Explanation:
Calculation for Jose cost basis for the delivery van
Van Winning bid $25,250
Add Shipping costs of $1,270
Add Paint to match the other fleet vehicles $1,440
Add Sales tax $2,750
Basis for the delivery van $30,710
($25,250 + $1,270 + $1,440 + $2,750 )
Therefore Jose cost basis for the delivery van was $30,710
Use the following information to compute the cost of direct materials used for the current year. Assume the raw materials inventory account is used only for direct materials. (Assume no indirect materials.) January 1 December 31
January 1 December 31
Inventories
Raw materials inventory $6,000 7,500
Work in process inventory 12,000 9,000
Finished goods inventory 8,500 5,500
Activity during the current year
Materials purchased $123,500
Direct labor 94,000
Factory overhead 39,000
Answer:
the direct material used is $122,000
Explanation:
The computation of the direct material used is shown below:
= Opening raw material inventory + material purchased - ending raw material inventory
= $6,000 + $123,500 - $7,500
= $122,000
Hence, the direct material used is $122,000
A company produces and sells hair dryers in a market where price (p) and demand (D) are related follows: p = $35+ (3,000)/D-(4,800)/D2 The fixed cost (Ct) is $800 per month and the variable cost per hair dryer (c.) is $38. - Add to % E Q
With reference to the company in Question 1, assume price and demand are unrelated. The company sells the hair dryers for $80 each if they spend $8,000 per month on advertising (C.). CF and c, remain as indicated in Question 1. The maximum production capacity is 5,000 hair dryers per month.
a) What is the demand breakeven point?
b) Is the company's demand breakeven point (in %) more sensitive to 10% increase in sales price or 20% reduction in variable costs? Explain your answer.
Answer:
Explanation:
Given that:
[tex]p = 35 + \dfrac{3000}{D}- \dfrac{4800}{D^2}[/tex]
The total revenue = p × D
∴
multiplying both sides by D; we have:
[tex]p\times D = 35 \times D + \dfrac{3000}{D} \times D- \dfrac{4800}{D^2}\times D[/tex]
[tex]= 35 D +3000}{D} - \dfrac{4800}{D}[/tex]
The total cost = (Per unit Variable cost × D) + Advertising cost
The total cost = 38D + 8000
The selling price = 80
From D units, the total revenue = 80D
∴
The break-even will take place when total revenue equals total cost.
So;
8000 + 38D = 80D
8000 = 80 D - 38D
8000 =42D
D = 8000/42
D = 190.48
(b)
Suppose the new sales price
Then;
8000 + 38D = 88D
8000 = 88D - 38D
8000 = 50D
D = 160
Hence, the break-even decreases by:
[tex]\Big(\dfrac{190.48-160}{190.48}\times 100\Big) = 16\%[/tex]
However; suppose the variable cost = 30.4
Then;
8000 + 30.4D = 80D
8000 = 80D - 30.4D
8000 = 49.6D
D = 8000/49.6
D = 161.29
Therefore;
This implies that the break-even decreased by:
[tex]\Big(\dfrac{190.48-161.29}{190.48}\times 100\Big) = 15.32\%[/tex]
Hence, the break-even is more likely to change by 10% in its selling price.
George Gershwin Co. sold $2,000,000 of 10%, 10-year bonds at 104 on January 1, 2020. The bonds were dated January 1, 2020, and pay interest on July 1 and January 1. If Gershwin uses the straight-line method to amortize bond premium or discount, determine the amount of interest expense to be reported on July 1, 2020, and December 31, 2020.
Answer:
July 1, 2020 $96,000
December 31, 2020 $96,000
Explanation:
Calculation to determine the amount of interest expense to be reported on July 1, 2020, and December 31, 2020.
Firststep is to get calculate the Premium amortization (Straight-line)
Issue price of the bonds $2,080,000
($2,000,000 x 1.04)
Less Par value of bonds ($2,000,000)
Premium on bonds payable $80,000
÷ Numbet of interest payments 20 times
(10 years x 2 times)
= Premium amortization (Straight-line) $4,000
($80,000÷20 times)
Now let calculate the Interest expense
Interest payment $100,000
(2,000,000 x 10% x 6/12)
Less Premium amortization ($4,000)
Interest expense $96,000
($100,000-$4,000)
Hence,using the straight line method, Interest expense will be $96,000 for every time.
Therefore the amount of interest expense to be reported on July 1, 2020 is $96,000, and December 31, 2020 is $96,000
Making a financial transaction based on information not available to other
investors is known as
A. Sarbanes-Oxley
B. fair disclosure
C. insider trading
D. selling or buying short
SUBMIT
Answer:c.....
Explanation:a p e x
Making a financial transaction based on information not available to other investors is known as insider trading. Thus the correct option is C.
What is a financial transaction?A financial transaction is an arrangement for the exchange of commodities or services between a buyer and a seller. The financial account keeps systematic track of all financial transactions and summarises them.
Insider trading is the act of workers dealing in the stock or other securities of a publicly traded firm while in possession of substantial, non-public information on the company.
Insider trading is the act of buying or selling a financial instrument based on the knowledge that is not typically available to investors. Sales are transactions in which a buyer exchanges goods and services with a seller in return for cash or credit.
Therefore, option C is appropriate.
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At the end of April, the first month of the company's year, the usual adjusting entry transferring rent earned to a revenue account from the unearned rent account was omitted. Indicate which items will be incorrectly stated, because of the error, on (a) the income statement for April and (b) the balance sheet as of April 30. Also indicate whether the items in error will be overstated or understated.
Answer:
Overstatement is the situation where the amount of any item has been stated more than its actual figure
Understatement is the situation where the amount of any item has been stated less than its actual figure
a. The rent earned will be understated, as a result of which the income statement will give a lower net income.
b. Because of lower net income, retained earnings in stockholders' equity will be understated, and the liability account of unearned rent will be overstated
it is a type of business that keeps the dealings,assets,and bank accounts seperate from his/her personal assets?
Answer:
A sole proprietorship
Explanation:
A sole proprietorship is a business owned, organized, and run by a sole proprietor. It is legally advisable that all business and private activities of any form of business are conducted separately. Commingling business dealings, assets, and especially bank accounts with private affairs do cause problems for the business person.
Assuming a 12% annual interest rate, determine the present value of a five-period annual annuity of $5,000 under each of the following situations:
1. The first payment is received at the end of the first year, and interest is compounded annually.
2. The first payment is received at the beginning of the first year, and interest is compounded annually.
3. The first payment is received at the end of the first year, and interest is compounded quarterly.
Depoosite date: 12/31/17, i=?, n=?, Deposit= $4100, PV - 12/31/16: ?
Deposite date 12/31/18, i=?, n=?, Deposit=$4100, PV -12/31/16: ?
Deposite date: 12/31/19, i=?, n=?, Deposit= $4100, PV- 12/31/16: ?
Deposti date: 12/31/20, i=?, n=?, Depostie= $4100, PV - 12/31/16: ?
Deposit date: 12/31/21, i=?, n=?, deposite=$ 4100, PV - 12/31/16: ?
Solution :
Annual payment = [tex]$\$ 5000$[/tex]
1. The rate of interest annually = 12%
Present value [tex]$=\$5000 \times \text{PVA of} \ \$1(12\%, 5)$[/tex]
[tex]$=\$5000 \times 3.60478$[/tex]
= $ 18,023.90
2. The rate of interest annually = 12%
Present value [tex]$=\$5000 \times \text{PVAD of} \ \$1(12\%, 5)$[/tex]
[tex]$=\$5000 \times 4.03735$[/tex]
= $ 20,186.75
3. The rate of interest annually = 12%
The rate of interest quarterly = 3%
Present value = [tex]$\$5000 \times \text{PV of} \ \$1(3\%, 4) + \$5000 \times \text{PV of} \ \$1(3\%, 8) +\$5000 \times \text{PV of} \ \$1(3\%, 12) $[/tex] [tex]$+\$5000 \times \text{PV of} \ \$1(3\%, 16) + \$5000 \times \text{PV of} \ \$1(3\%, 16)$[/tex]
[tex]$= \$5000 \times 0.88849 + \$5000 \times 0.78941 + \$5000 \times 0.70138 + \$5000 \times 0.62317 + \$5000 \times 0.55368$[/tex][tex]$=\$ 17,780.65$[/tex]
For the current year, Power Cords Corp. expected to sell 42,100 industrial power cords. Fixed costs were expected to total $1,650,500; unit sales price was expected to be $3,800; and unit variable costs were budgeted at $2,300.
Power Cord Corp.'s margin of safety (MOS) in sales dollars is: (Do not round intermediate calculations.)
A. $155,798,733.
B. $189,973,732.
C. $161,718,730.
D. $173,523,730.
E. $145,348,733.
Answer:
A. $155,798,733.
Explanation:
The first task to determine the break-even point in sales dollars as shown below:
break-even point in sales dollars=fixed costs/contribution margin ratio
fixed costs=$1,650,500
contribution margin ratio=unit contribution margin/sales price
unit contribution margin=unit sales price- unit variable costs
unit contribution margin=$3,800-$2,300
unit contribution margin=$1,500
contribution margin ratio=$1500/$3,800
contribution margin ratio=39.47%
break-even point in sales dollars=$1,650,500/39.47%
break-even point in sales dollars=$4,181,657
margin of safety (MOS) in sales dollars=current sales- break-even point in sales dollars
current sales=42,100*$3,800=$159,980,000
margin of safety (MOS) in sales dollars=$159,980,000-$4,181,657=$155,798,343(closest to $155,798,733)
Makers Corp. had additions to retained earnings for the year just ended of $194,000. The firm paid out $184,000 in cash dividends, and it has ending total equity of $4.89 million. The company currently has 120,000 shares of common stock outstanding. a. What are earnings per share
Answer:
Makers Corp.
The Earnings Per Share are:
= $3.15.
Explanation:
a) Data and Calculations:
Additions to retained earnings for the year = $194,000
Cash dividends paid out = 184,000
Net income = $378,000
Total equity = $4.89 million
Outstanding shares = 120,000
Earnings per share = Net Income/Outstanding shares
= $378,000/120,000
= $3.15
b) The earnings per share (EPS) is a financial metric that is widely used to corporate value. It indicates the amount of money that a company makes for its stockholders per share. It is computed by dividing the net income by the number of outstanding shares.
A company that makes fasteners and sells them to many different
manufacturing companies around the world would most likely benefit from
using which distribution channel?
A. Producer to wholesaler to business buyers
B. Producer to business buyers
C. Producer to wholesaler to consumers
D. Producer to retailers to business buyers
Answer:
A
Explanation:
A. Producer to wholesaler to business buyers
Partial adjusted trial balance for Sheffield Corp. at December 31, 2017, includes the following accounts: Retained Earnings $17,000, Dividends $6,700, Service Revenue $36,300 Salaries and Wages Expense $14,000, Insurance Expense $1,880, Rent Expense $4,080, Supplies Expense $1,440, and Depreciation Expense $900. The balance in Retained Earnings is the balance as of January 1.Prepare a retained earnings statement for the year assuming net income is $10,400. List items that increase retained earnings first.
Answer and Explanation:
The preparation of the retained earnings statement is presented below:
Beginning retained earnings balance $17,000
Add: Net income $10,400
less: Dividend -$6,700
Ending retained earnings balance $20,700
We simply added the net income and deduct the dividend from the opening retained earnings balance
Zetterberg Builders is given two options for making payments on a brush hog. Find the value of X such that they would be indifferent between the two cash flow profiles if their TVOM is 4.5% per year compounded yearly.
End of Year Series 1 Series 2
0 $300 $0
1 $350 $0
2 $400 $35X
3 $450 $25X
4 $0 $15X
5 $0 $5X
Answer:
14.90
Explanation:
The computation of the value of X is shown below;
End of Year Series 1 Series 2 series 1 series 2
0 $300 $0 1 $300 $0
1 $350 $0 1.045 $366 $0
2 $400 $35X 1.092025 $437 38.15X
3 $450 $25X 1.141166 $514 35.25X
4 $0 $15X 1.192519 $0 28.8X
5 $0 $5X 1.246182 $0 6.2X
$1,616 108.4X
Now
108.4X = $1,616
x = $1,616 ÷ 108.4
= 14.90
Taxable income terminology Taxable Income Terminology Match the terms relating to the basic terminology and concepts of personal finance on the left with the descriptions of the terms on the right. Read each description carefully and type the letter of the description in the Answer column next to the correct term These are not necessarily complete definitions, but there is only one possible answer for each term
Term Answer Description
A. To qualify for exclusion during this transaction, you must have owned and Gross income ▼ occupied for two of the five prior years
B. This term essentially includes all income subject to federal tax Active income Portfolio income
C. Using taxable income, it is based on tax tables or tax rate schedules Passive income
D. This term includes expenses that can only offset portfolio income.
E. This is used to offset passive income Investment expenses
F. This term includes income from self-employment Real estate or limited partnership expenses Capital gains
G. This item is taxed at different rates depending on the holding period Sale of a home A TH,
H. This is used to determine tax liability Taxable income
I. This term includes income gained from real estate and limited partnerships ▼ Tax liability C
J. This term refers to earnings and capital gains generated from investment holdings
Answer:
A. To qualify for exclusion during this transaction, you must have owned and occupied for two of the five prior years ⇒ Sale of a home.
B. This term essentially includes all income subject to federal tax ⇒ Gross Income.
C. Using taxable income, it is based on tax tables or tax rate schedules ⇒ Tax liability.
D. This term includes expenses that can only offset portfolio income. ⇒ Investment expenses.
E. This is used to offset passive income Investment expenses. ⇒ Real estate or limited partnership expenses.
F. This term includes income from self-employment ⇒ Active Income.
G. This item is taxed at different rates depending on the holding period ⇒ Capital gains.
H. This is used to determine tax liability ⇒ Taxable income.
I. This term includes income gained from real estate and limited partnerships. ⇒ Passive income.
J. This term refers to earnings and capital gains generated from investment holdings. ⇒ Portfolio income.
Sweeten Company had no jobs in progress at the beginning of March and no beginning inventories. The company has two manufacturing departments-Molding and Fabrication. It started, completed, and sold only two jobs during March- Job P and Job Q. The following additional information is available for the company as a whole and for Jobs P and Q (all data and questions relate to the month of March):
Molding Fabrication Total
Estimated total machine-hours used 2,500 1,500 4,000
Estimated total fixed manufacturing overhead $ 14,000 $ 17,400 $ 31,400
Estimated variable manufacturing overhead per machine-hour $ 3.00 $ 3.80
Job P Job Q
Direct materials $ 29,000 $ 16,000
Direct labor cost $ 33,800 $ 13,900
Actual machine-hours used:
Molding 3,300 2,400
Fabrication 2,200 2,500
Total 5,500 4,900
Sweeten Company had no underapplied or overapplied manufacturing overhead costs during the month.
What was the company's plantwide predetermined overhead rate? (Round your answer to 2 decimal places.)
Answer:
Predetermined manufacturing overhead rate= $11.15 per machine hour
Explanation:
Molding Fabrication Total
Estimated total machine-hours used 2,500 1,500 4,000
Estimated total fixed manufacturing overhead $ 14,000 $ 17,400 $ 31,400
Estimated variable manufacturing overhead per machine-hour $ 3.00 $ 3.80
To calculate a single plantwide 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
Total fixed overhead= $31,400
Total variable overhead= (3*2,500) + (3.8*1,500)= $13,200
Total Machine hours= 4,000
Predetermined manufacturing overhead rate= (31,400 + 13,200) / 4,000
Predetermined manufacturing overhead rate= $11.15 per machine hour
You are considering buying stock A. If the economy grows rapidly, you may earn 40 percent on the investment, while a declining economy could result in a 15 percent loss. Slow economic growth may generate a return of 3 percent. If the probability is 19 percent for rapid growth, 39 percent for a declining economy, and 42 percent for slow growth, what is the expected return on this investment
Answer:
3.01%
Explanation:
Calculation for what is the expected return on this investment
Expected return =(0.19)(0.40) + (0.42)(0.03) + (0.39)(-0.15)
Expected return=0.076+0.0126+-0.0585
Expected return=0.0301*100
Expected return=3.01%
Therefore the expected return on this investment will be 3.01%
If a product's demand rises as income rises, ceteris paribus, the product is
a) an inferior good
b) not enough information
c) a notmal good
d) outside of the market equilibrium
Generally, when a product's demand rises as income rises, ceteris paribus, the product is outside of the market equilibrium
Market equilibrium occurs when a market price of quantity demanded is equal to the quantity supplied
Hence, when a product's demand rises as income rises, ceteris paribus, the product is outside of the market equilibrium
In conclusion, the Option D is correct.
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USAco, a domestic corporation, manufactures widgets for sale worldwide. In year 2020, USAco had $10 million of net income related to sales of products it manufactures in the US, of which 3 million relates to sales to customers outside the US. USACO also owns a factory, which it uses to produce the above income, and which has an average adjusted U.S. tax basis of $40 million (taking into account the straight-line depreciation method). As a result of these activities, USACo will be allowed a Foreign Derived Intangible Income ("FDII") deduction of _______________
Answer:
USAco
As a result of these activities, USACo will be allowed a Foreign Derived Intangible Income ("FDII") deduction of _______________
$236,250.
Explanation:
a) Data and Calculations
Net income = $10 million
Export sales income = $3 million
Normal tax on $3 million at 21% = $630,000
FDII 13.125% tax on $3 million = $393,750
Difference = $236,250
b) A foreign derived intangible income (FDII) arises from the ownership, sale, or exchange of intangible property, patents, copyrights, trademarks, trade names, or other products tied to intangible assets by USACo, which entitles it to make a tax deduction of the calculated amount or to be taxed at a reduced tax rate of 13.125% instead of the normal 21% corporate tax rate. The FDII is aimed at encouraging US-based corporations to export more goods and services while locating more intangible assets in the US.
The partnership of Keenan and Kludlow paid the following wages during this year:
M. Keenan (partner) $85,000
S. Kludlow (partner) 75,000
N. Perry (supervisor) 53,000
T. Lee (factory worker) 34,600
R. Rolf (factory worker) 29,800
D. Broch (factory worker) 6,900 S.
Ruiz (bookkeeper) 25,400
C. Rudolph (maintenance) 5,100
In addition, the partnership owed $200 to Rudolph for work he performed during December. However, payment for this work will not be made until January of the following year. The state unemployment tax rate for the company is 2.95% on the first $9,000 of each employee's earnings. Compute the following:
a. Net FUTA tax for the partnership for this year.
b. SUTA tax for this year.
Answer:
a. The Net FUTA tax for the partnership for this year is $1,680.
b. The SUTA tax for this year is $1,062.
Explanation:
a) Data and Calculations:
M. Keenan (partner) $85,000
S. Kludlow (partner) 75,000
N. Perry (supervisor) 53,000
T. Lee (factory worker) 34,600
R. Rolf (factory worker) 29,800
D. Broch (factory worker) 6,900
Ruiz (bookkeeper) 25,400
C. Rudolph (maintenance) 5,100
Gross payroll = $314,800
FUTA rate is 6% for the first $7,000
Gross Pay FUTA SUTA
(first $7,000) (first $9,000)
N. Perry (supervisor) 53,000 $420 $265.50
T. Lee (factory worker) 34,600 420 265.50
R. Rolf (factory worker) 29,800 420 265.50
D. Broch (factory worker) 6,900 0 0
Ruiz (bookkeeper) 25,400 420 265.50
C. Rudolph (maintenance) 5,100 0 0
Payroll for employees = $154,800 $1,680 $1,062
b) The FUTA tax rate is 6.0%. The tax applies to the first $7,000 that Keenan and Kludlow paid to each employee as wages during the year. This first $7,000 is often referred to as the federal or FUTA wage base. The state's SUTA tax rate depends on each state where SUTA is collected. Note that the additional $200 owed to Rudolph does not alter his base wages which fall below $7,000.
According to the Bureau of Labor Statistics, there are about 3 million temp employees in the U.S. out of 150 million employees overall. What percentage of workers are temporary workers?
Answer:2%
Explanation:
Answer:2%
Explanation:
On January 1, 2020, Bridgeport Corporation issued $3,740,000 of 10-year, 8% convertible debentures at 102. Interest is to be paid semiannually on June 30 and December 31. Each $1,000 debenture can be converted into 8 shares of Bridgeport Corporation $100 par value common stock after December 31, 2021. On January 1, 2022, $374,000 of debentures are converted into common stock, which is then selling at $111. An additional $374,000 of debentures are converted on March 31, 2022. The market price of the common stock is then $116. Accrued interest at March 31 will be paid on the next interest date. Bond premium is amortized on a straight-line basis. Make the necessary journal entries for: (a) December 31, 2021. (c) March 31, 2022. (b) January 1, 2022. (d) June 30, 2022.
Answer:
Bridgeport Corporation
Journal Entries:
(a) December 31, 2021.
Debit Interest on Debentures $149,600
Credit Cash $149,600
To record the interest expense and payment for the six months.
Debit Debentures Premium $3,740
Credit Interest on Debentures $3,740
To record the amortization of the debentures premium.
(b) January 1, 2022.
Debit Debenture $374,000
Credit Common Stock $299,200
Credit APIC $74,800
To record the conversion of debentures to shares.
(c) March 31, 2022.
Debit Debenture $374,000
Credit Common Stock $299,200
Credit APIC $74,800
To record the conversion of debentures to shares.
Debit Interest on Debentures $67,320
Credit Interest Payable $67,320
To accrue interest for the quarter.
Debit Debentures Premium $1,870
Credit Interest on Debentures $1,870
To record the amortization of the debentures premium for the quarter.
(d) June 30, 2022.
Debit Interest on Debentures $59,840
Credit Interest payable $59,840
To accrue interest for the quarter.
Debit Debentures Premium $1,870
Credit Interest on Debentures $1,870
To record the amortization of the debentures premium for the quarter.
Debit Interest Payable $127,160
Credit Cash $127,160
To record payment of interest for the six months.
Explanation:
a) Data and Calculations:
Issue of 10-year 8% Convertible Debentures at 102 = $3,814,800 (Cash)
Debenture premium $74,800
Half-yearly premium amortization = $74,800/20 = $3,740
Face value = $3,740,000
b) Interest on Debenture = $3,740,000 * 8% * 1/2 = $149,600
c) $374,000 debentures converted into 8 shares for every $1,000.
= $374,000/1,000 * 8 = 2,992 shares at $100 par value
d) Interest on Debentures ($3,740,000 - $374,000) * 8% * 1/4
= $3,366,000 * 8% * 1/4 = $67,320
Plus
$3,366,000 - $374,000 * 8% * 1/4 = $59,840
Total interest = $127,160
Selected financial data regarding current assets and current liabilities for ACME Corporation and Wayne Enterprises, are as follows: ACME Wayne ($ in millions)Corporation Enterprises Current assets:Cash and cash equivalents $499 $285 Current investments 7 530 Net receivables 751 206 Inventory 10,586 8,609 Other current assets 1,344 255 Total current assets $13,187 $9,885 Current liabilities:Current debt $8,621 $4,451 Accounts payable 1,807 1,061 Other current liabilities 1,179 2,381 Total current liabilities $11,607 $7,893 Required:1-a. Calculate the current ratio for ACME Corporation and Wayne Enterprises. (Enter your answers in millions. For example, $5,500,000 should be entered as 5.5.)
Answer: See explanation
Explanation:
We should note that the current ratio is calculated as:
= Current assets / Current liabilities
Therefore, the current ratio for ACME Corporation will be:
= Current assets / Current liabilities
= $13,187 / $11,607
= 1.136
The current ratio for Wayne Enterprises will be:
= Current assets / Current liabilities
= $9,885 / $7,893
= 1.25
A forklift will last for only 2 more years. It costs $5,000 a year to maintain. For $20,000 you can buy a new lift that can last for 10 years and should require maintenance costs of only $2,000 a year. a-1. Calculate the equivalent cost of owning and operating the forklift if the discount rate is 4% per year. (Do not round intermediate calculations. Round your answer to 2 decimal places.) a-2. Should you replace the forklift
Answer:
The equivalent cost of owning and operating the forklift is $4,465.82
We should replace the forklift.
Explanation:
The Equivalent annual cost can be calculated using the following formula
Equivalent annual cost = PV of cost / Annuity factor
Old forklift
PV of Cost = Annual cost x 2 years Annuity factor at 4% / 2 years Annuity factor at 4%
Hence
PV of cost = Annual cost = $5,000
New forklift
10 years Annuity factor at 4% = 1 - ( 1 + 4%)^-10 )/4% = 8.11090
PV of cost = ( Annual Cost x 10 years Annuity factor at 4% ) + Initial cost
PV of cost = ( $2,000 x 8.11090 ) + $20,000
PV of cost = 16,221.79 + $20,000
PV of cost = 36,221.79
Placing values in the formula
Equivalent annual cost = $36,221.79 / 8.11090
Equivalent annual cost = $4,465.82
As the equivalent annual cost of the new lift is lower than the the old one, we should replace the forklift
After graduating college, you receive $10,000 and decide to put it in a high yield saving account. The account earns 0.50% compounded quarterly. a) (8 points) What is the effective annual interest rate? b) (7 points) If you leave your initial investment of $10,000 in the account without any withdrawals what would you expect the value of the account to be after 4 years?
Answer:
a)
The effective annual interest rate is 0.5009%
b)
I will expect $10,201.88 the value of the account after 4 years
Explanation:
a)
Use the following formula to calculate the effective annual interest rate
Effective annual Interest rate = ( ( 1 + Interest rate / Compounding period per year )^Compounding period per year ) - 1
Where
Interest rate = 0.50%
Compounding period per year = 4 quarters in a year
Placing values in the formula
Effective annual Interest rate = ( ( 1 + 0.5% / 4 )^4 ) - 1 = 0.005009 = 0.5009%
b)
Use the following formula to calculate the value after 4 years
Value after 4 years = Current Investment x ( 1 + Periodic Interest rate )^numbers of period
Where
Current Investment = $10,000
Periodic Interest rate = 0.50% / 4 = 0.125%
Numbers of period = Compounding Periods per year x Numbers of years = 4 quarters per year x 4 years = 16 quarters
Placing values in the formula
Value after 4 years = $10,000 x ( 1 + 0.125% )^16
Value after 4 years = $10,201.88
Mike Greenberg opened Cheyenne Window Washing Inc. on July 1, 2022. During July, the following transactions were completed.
July 1 Issued 9,800 shares of common stock for $9,800 cash.
1 Purchased used truck for $6,560, paying $1,640 cash and the balance on account.
3 Purchased cleaning supplies for $740 on account.
5 Paid $1,440 cash on a 1-year insurance policy effective July 1.
12 Billed customers $3,030 for cleaning services performed.
18 Paid $820 cash on amount owed on truck and $410 on amount owed on cleaning supplies.
20 Paid $1,640 cash for employee salaries.
21 Collected $1,310 cash from customers billed on July 12.
25 Billed customers $2,050 for cleaning services performed.
31 Paid $240 for maintenance of the truck during month.
31 Declared and paid $490 cash dividend.
Journalize the July transactions.
Post to the ledger accounts.
Prepare a trial balance at July 31.
Journalize the following adjustments. (Credit account titles are automatically indented when the amount is entered. Do not indent manually.)
(1) Services performed but unbilled and uncollected at July 31 were $1,750.
(2) Depreciation on equipment for the month was $202.
(3) One-twelfth of the insurance expired.
(4) An inventory count shows $320 of cleaning supplies on hand at July 31.
(5) Accrued but unpaid employee salaries were $415.
Answer:
Cash (Dr.) $9.800
Common Stock (Cr.) $9,800
Truck (Dr.) $6,560
Cash (Cr.) $1,640
Accounts Payable -Truck (Cr.) $4,920
Cleaning Supplies (Dr.) $740
Accounts Payable (Cr.) $740
Prepaid Insurance (Dr.) $1,440
Cash (Cr.) $1,440
Accounts Receivable (Dr.) $3,030
Service Revenue (Dr.) $3,030
Accounts Payable - Truck (Dr.) $820
Accounts Payable - Supplies (Dr.) $410
Cash (Cr.) $1,230
Cash (Dr.) $1,310
Accounts Receivable (Cr.) $1,310
Maintenance Expense Truck (Dr.) $240
Cash (Cr.) $240
Dividend paid (Dr.) $490
Cash (Cr.) $490
Explanation:
1) Accounts Receivable (Dr.) $1,750
Service Revenue (Cr.) $1,750
2) Depreciation expense (Dr.) $202
Accumulated Depreciation (Cr.) $202
3) Insurance Expense (Dr.) $120
Prepaid Insurance (Cr.) $120
4) Ending Inventory (Dr.) $320
Cleaning Supplies (Cr.) $320
5) Salaries Expense (Dr.) $415
Salaries Payable (Cr.) $415
Question
Felicia Rashad Corporation has pretax financial income (or loss) equal to taxable income (or loss) from 2006 through 2014 as follows.
Income (Loss) Tax Rate
2006 $29,000 30 %
2007 40,000 30 %
2008 17,000 35 %
2009 48,000 50 %
2010 (150,000 ) 40 %
2011 90,000 40 %
2012 30,000 40 %
2013 105,000 40 %
2014 (60,000) 45 %
Pretax financial income (loss) and taxable income (loss) were the same for all years since Rashad has been in business. Assume the carryback provision is employed for net operating losses. In recording the benefits of a loss carryforward, assume that it is more likely than not that the related benefits will be realized.
a) What entries for income taxes should be recorded for 2010? .
b) Indicate what the income tax expense portion of the income statement for 2010 should look like. Assume all income (loss) relates to continuing operations.
c)What entry for income taxes should be recorded in 2011?
d) How should the income tax expense section of the income statement for 2011 appear?
e) what entry for income taxes should be recorded in 2014
f) how should the income tax expense section of the statement for 2104 appear to be ?
?
Answer:
A. Dr Deferred Tax Asset 60,000.00
Cr Deferred Tax 60,000.00
B. Income Statement (Partial)
Current Tax -
Deferred Tax (60,000.00)
Total Tax (60,000.00)
C.Dr Deferred Tax Asset 36,000
Cr Deferred Tax 36,000
D. Income Statement (Partial)
Current Tax -
Deferred Tax 36,000
Total Tax 36,000
E. Dr Deferred Tax Asset 27,000
Cr Deferred Tax 27,000
F. Income Statement (Partial)
Current Tax -
Deferred Tax 27,000
Total Tax 27,000
Explanation:
A. Calculation for what the entries for income taxes should be recorded for 2010
Entries for Income tax for 2010
Dr Deferred Tax Asset 60,000.00
Cr Deferred Tax 60,000.00
2010 (150,000 *40 %)
(To record timing difference of carry forward losses)
b) Indication for what the income tax expense portion of the income statement for 2010 should look like. :
Felicia Rashad Corporation
Income Statement (Partial)
Current Tax -
Deferred Tax (60,000.00)
Total Tax (60,000.00)
c) Calculation for what the entries for income taxes should be recorded for 2011
Dr Deferred Tax Asset 36,000
Cr Deferred Tax 36,000
2011 (90,000* 40 %)
(To record deferred tax asset utilization)
d) Income tax expense section of the income statement for 2011 appear
Felicia Rashad Corporation
Income Statement (Partial)
Current Tax -
Deferred Tax 36,000
Total Tax 36,000
e) Calculation for what the entries for income taxes should be recorded for 2014
Dr Deferred Tax Asset 27,000
Cr Deferred Tax 27,000
2014 (60,000*45 %)
(To record deferred tax asset utilization)
f) Income tax expense section of the income statement for 2014 appear
Felicia Rashad Corporation
Income Statement (Partial)
Current Tax -
Deferred Tax 27,000
Total Tax 27,000
Consider a chemical factory that is situated next to a farm. Airborne emissions from the chemical factory damage crops on the farm. The marginal benefits of emissions to the factory and the marginal costs of damage to the farmer are as follows: Quantity of emissions (Q) 100 200 300 400 500 600 700 800 900 MB to factory 320 280 240 200 160 120 80 40 0 MC to farmer 110 130 150 170 190 210 230 250 270 Calculate the total net benefit to the farmer and factory at the economically and socially efficient quantity of emissions. A. $63000 B. $62000 C. $60750 D. $61000
Answer:
Marginal Benefits of Emissions
Total net benefit to the farmer and factory at the economically and socially efficient quantity of emissions is $30,000 when the quantity of emission is 200 tons.
Explanation:
a) Data and Calculations:
Quantity of Marginal Marginal Total Net Benefit
emissions (Q) Benefits Cost or Cost
100 320 110 21,000
200 280 130 30,000
300 240 150 27,000
400 200 170 12,000
500 160 190 -15,000
600 120 210 -54,000
700 80 230 -105,000
800 40 250 -168,000
900 0 270 -243,000