Answer:
Crane Water Co.
Total relevant cost to make or buy Make Buy
Direct materials $12
Direct labor 7
Variable manufacturing overhead 2
Direct fixed manufacturing overhead 6
Total relevant cost to make = $27 $33
Explanation:
a) Data and Calculations:
Annual production of timers = 46,000
Direct materials $12
Direct labor 7
Variable manufacturing overhead 2
Direct fixed manufacturing overhead 9
(30% salaries, 70% depreciation)
Allocated fixed manufacturing overhead 7
Total unit cost $37
Clifton Clocks offer price = $33
Total relevant cost to make or buy Make Buy
Direct materials $12
Direct labor 7
Variable manufacturing overhead 2
Direct fixed manufacturing overhead 6
Total relevant cost to make = $27 $33
b) Crane Water Co. will be in a better position if it continues to make the timer. It should not accept the offer from Clifton Clocks. The relevant cost to make is lower than the relevant cost to buy the timer from Clifton Clocks.
Adkins Bakery uses the modified half-month convention to calculate depreciation expense in the year an asset is purchased or sold. Adkins has a calendar year accounting period and uses the straight-line method to compute depreciation expense. On March 17, 2018, Adkins acquired equipment at a cost of $220,000. The equipment has a residual value of $43,000 and an estimated useful life of 4 years. What amount of depreciation expense will be recorded for the year ending December 31, 2018
Answer:
Depreciation expense= $36,875
Explanation:
Under the straight line method of depreciation, the cost of an asset less the salvage value is spread equally over the expected useful life.
An equal amount is charged as annual depreciation over the life of the asset. The annual depreciation is calculated as follows:
Annual depreciation:
= (cost of assets - salvage value)/ Estimated useful life
Cost - 220,000
Residual value = 43,000
Estimated useful life = 4 years
Annual depreciation = (220,000- 43,000)/4 =44,250
Annual depreciation = 44,250.
Under the half-month convention, a full month depreciation is charged where an asset is first put to at the middle month of the month.
Thus March 17, 2018 to December 2018 is taken to be 10 full months
Depreciation expense = 44,250.× 10/12 = 36,875
Depreciation expense= $36,875
1 points Time Remaining 1 hour 14 minutes 35 seconds01:14:35 eBookPrintReferencesCheck my workCheck My Work button is now enabledItem 13 Time Remaining 1 hour 14 minutes 35 seconds01:14:35 Alice is single and self-employed in 2020. Her net business profit on her Schedule C for the year is $196,000. What is her self-employment tax liability and additional Medicare tax liability for 2020
Answer:
Self employment tax liability = $22,323.97Additional Medicare tax liability = $0Explanation:
According to the IRS, the amount subject to self-employment tax is 92.35% of net income from self-employment for the year.
Alice's taxable income is:
= 92.35% * 196,000
= $181,006
Self employment tax-liability:
Social security tax for 2020 is 12.4% for the first $137,700 of income.
= 12.4% * 137,700
= $17,074.80
Medicare tax:
= 2.9% on taxable income
= 2.9% * 181,006
= $5,249.17
Self-employment tax is:
= 17,074.80 + 5,249.17
= $22,323.97
Additional Medicare tax applies on only amounts above $200,000 so it is $0 in this case.
Trainees are put through a two-month school. The fixed cost of running one session of this school is $150,000. Any number of sessions can be run during the year but must be scheduled so that the airline always has enough flight attendants. The cost of having excess attendants is simply the salary that they receive, which is $15,000 per month. How many sessions of the school
Answer:
The airline training school can run maximum of 10 sessions.
Explanation:
There can be 10 sessions which can be held at the training school. The airline school needs to have enough attendants so that they do not run a session in spare capacity. If a session is run with few attendants then it will cost $15,000 per session which is an additional cost burden for the airline training school.
Which tasks are common to all Education and Training career pathways? assessing students on learning and approving budgets communicating with schools and families and enforcing rules that govern behavior teaching students and collaborating with teachers on instructional content developing instructional content for teachers and assessing student learning through exams
The tasks associated with Education and Training career pathways is communicating with schools and families.
What is a career pathways?Career pathways serves as a profession path that individuals choose to follow in the rest of his life.
Therefore, second option is correct because going along Education and Training career pathways ,enforcing rules that govern behavior teaching is needed
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Suppose the economy of the large country of Hendrix is currently experiencing expansion as a result of short run business cycle fluctuations. Hendrix has a trade deficit. The items below are possible effects of this expansion on the trade balance. Please sort them into boxes below as appropriate. If they do not fit into either box (e.g. not likely to occur in an expansion), leave them unsorted.
Likely to occur in an expansion and increase the trade deficit
Likely to occur in an expansion and decrease the trade deficit
private savings decrease domestic private investment increases private savings increase government borrowing decreases imports increase government borrowing increases domestic private investment decreases imports decrease
Answer:
Likely to occur in an expansion and increase the trade deficit.
Domestic private investment increasesImports increaseAs a result of expansion, there is more income in the economy which means that people will be able to invest more. The investment will however lead to more imports as capital goods are acquired. This will therefore increase the trade deficit which is defined as the difference between net exports and net imports.
Likely to occur in an expansion and decrease the trade deficit.
Private savings increaseGovernment borrowing decreasesIn an expansion, people will have more income and so will save more. As a result of them not spending these savings on imports, the trade deficit will go down.
Also with the economy in an expansion, the government would not need to borrow as much money to prop up the economy. This will reduce the trade deficit which includes loans from outside.
how can the size of the industrial/service sector and the agriculture employment rate indicate the level of industrialization?
Answer:
The more electricity, communications, and transportation used in a nation's economy, it will give them a more developed country and a greater potential for increased industrialization
13) Storico Co. just paid a dividend of $3.15 per share. The company will increase its dividend by 20 percent next year and then reduce its dividend growth rate by 5 percentage points per year until it reaches the industry average of 5 percent dividend growth, after which the company will keep a constant growth rate forever. If the required return on the company’s stock is 12 percent, what will a share of stock sell for today? (4 pts)
Answer:
$61.29
Explanation:
Calculation to determine what will a share of stock sell for today
First step is to calculate the price in Year 3
P3= $3.15(1.20)(1.15)(1.10)(1.05) / (.12 – .05)
P3= $5.020785/0.07
P3=$71.72
Now Let Calculate the price of stock today using the Present Value (PV) of the first three dividends in addition with the Present Value (PV) of the stock price in Year 3:
P0= $3.15(1.20)/(1.12) + $3.15(1.20)(1.15)/1.12^²+ $3.15(1.20)(1.15)(1.10)/1.12^³+ $71.72/1.12^³
P0=$3.78/1.12+$4.347/1.2544+$4.7817/1.404928+$71.72/1.404928
P0=$3.375+3.465+3.4035+$51.048
P0= $61.29
Therefore what will a share of stock sell for today is $61.29
Patterson and Clay Companies both use cost-plus pricing formulas and arrived at a selling price of $1,000 for the same product. Patterson uses absorption manufacturing cost as the basis for computing its dollar markup whereas Clay uses total cost. Which of the following choices correctly denotes the company that would have (1) the higher cost basis for deriving its dollar markup and (2) the higher markup percentage?
Cost Basis Patterson Patterson Clay Clay More information is needed to judge Markup Percentage Patterson Clay Patterson Clay More information is needed to judge
A. Choice A
B. Choice B
C. Choice C
D. Choice D
E. Choice E
Answer:
Patterson and Clay Companies
1. Higher cost basis for marking up is:
= Clay Company
2. Higher markup percentage is:
= Patterson Company
Explanation:
a) Data and Analysis:
Costing formulas:
Patterson:
Absorption manufacturing cost
Markup = Higher markup rate
Selling price $1,000
Clay:
Total cost = Higher cost basis for marking up
Markup
Selling price $1,000
b) Total cost is higher than total manufacturing costs. It includes more than the total manufacturing costs. Absorption manufacturing costs only include the variable manufacturing costs and fixed manufacturing overhead costs. Total costs include all the absorption costs and other selling, administrative, and distribution costs.
Use the chart to answer the questions. Year Potential GDP Real GDP 2017 $18.17 trillion $18.05 trillion 2018 $18.51 trillion $18.56 trillion Be sure to put your answer in percentage form, and round answers to two decimal places. a. Calculate the output gap for 2017. % b. Calculate the output gap for 2018. % c. From 2017 to 2018, the output gap became more .
Answer:
a. Output gap for 2017 = –0.66%
b. Output gap for 2018 = 0.27%
c. From 2017 to 2018, the output gap became more positive.
Explanation:
The following are given in the question:
Year Potential GDP Real GDP
2017 $18.17 trillion $18.05 trillion
2018 $18.51 trillion $18.56 trillion
To calculate output gap in percentage form, the following formula is used:
Output gap = ((Real GDP - Potential GDP) / Potential GDP) * 100 ......... (1)
Therefore, we have:
a. Calculate the output gap for 2017. %
Using equation (1), we have:
Output gap for 2017 = ((18.05 - 18.17) / 18.17) * 100 = –0.66%
b. Calculate the output gap for 2018. %
Using equation (1), we have:
Output gap for 2018 = ((18.56 - 18.51) / 18.51) * 100 = 0.27%
c. From 2017 to 2018, the output gap became more .
Since the output gap in 2017 is negative while the output gap in 2018 is positive; this implies that from 2017 to 2018, the output gap became more positive.
he Dimitrios Company records the following transactions during September 2018: Cash sales to customers totaling $5,800. Sales to customers on credit cards totaling $18,800. The average credit card fee is 3.0%. The company collects all cash due from the credit card companies. A $2,000 sale on account to a long-time customer with terms of 2/10, n/30. The sale is made on September 5. The customer pays the invoice on September 14. A customer returns product they had purchased last month for $500. Dimitrios accepts the return and gives the customer a cash refund. Calculate the following amounts: Service charge expense for credit card sales Sales discount (contra-revenue) for sales on account Sales returns (contra-revenue) Gross sales revenue Net sales revenue Net cash collected from sales
Answer:
The Dimitrios Company
Service charge expense for credit card sales = $564 ($18,800 * 3%)
Sales discount (contra-revenue) for sales on account = $40 ($2,000 * 2%)
Sales returns (contra-revenue) - $500
Gross sales revenue:
Cash $5,800
Cards $18,800
Accounts receivable $2,000
Total = $26,600
Net sales revenue = $26,100 ($26,600 - $500)
Net cash collected from sales:
Cash Sales $5,800
Card Sales $18,800
Accounts Receivable $2,000
Less: Card Fees $564
Cash Discounts $40
Cash Refund $500
Net cash = $ 25,496
Explanation:
a) Data and Analysis:
Sept. 2018:
Cash $5,800 Sales Revenue $5,800
Credit Cards Receivable $18,800 Sales Revenue $18,800
Credit Card Fee Expense $ 564 Cash $564
Cash $18,800 Credit Cards Receivable $18,800
Accounts Receivable $2,000 Sales Revenue $2,000, terms of 2/10, n/30.
Cash $1,960 Cash Discounts $40 Accounts Receivable $2,000
Sales Returns $500 Cash $500
Tom Jordan is a manager for a McDonald's restaurant. Many of his key responsibilities include analyzing data and making key decisions for the success of his store. Tom's store has been experiencing decreased sales for breakfast services over the past 3 months. Tom is unsure why breakfast revenues are down while lunch and dinner revenues remain unchanged. Tom believes that he can drive revenue up by implementing a few different breakfast promotions such as free coffee or hash browns with the purchase of a meal. Tom performs an extensive analysis of how continuous changes in breakfast promotions could impact his daily revenue. What type of DSS analysis is Tom performing? optimization analysis sensitivity analysis transaction analysis goal-seeking analysis
Answer: sensitivity analysis
Explanation:
From the information given in the question, we can infer that the type of DSS analysis that Tom is performing is the sensitivity analysis.
Sensitivity analysis simply refers to the quantitative risk assessment that deajs with how the alteration of a particular variable will have an effect on the model's output.
Here, Tom believing that he can increase revenue up by implementing a few different breakfast promotions like the free coffee or hash browns shows that he's using sensitivity analysis.
Two years ago, Kimberly became a 30 percent partner in the KST Partnership with a contribution of investment land with a $10,000 basis and a $16,000 fair market value. On January 2 of this year, Kimberly has a $15,000 basis in her partnership interest, and none of her pre-contribution gain has been recognized. On January 2 Kimberly receives an operating distribution of a tract of land (not the contributed land) with a $12,000 basis and an $18,000 fair market value.
a. What is Kimberly’s remaining basis in KST after the distribution?
b. What is KST’s basis in the land Kimberly contributed after Kimberly receives this distribution?
Answer:
A. $6,000
B. $13,000
Explanation:
A. Calculation to determine Kimberly’s remaining basis in KST after the distribution
Basis in KST$ 15,000
Add §737 gain $3,000
($15,000-$12,000)
Deduct Carryover basis in land ($12,000)
Remaining basis in KST $6,000
($15,000+$3,000-$12,000).
Therefore Kimberly’s remaining basis in KST after the distribution will be $6,000
B. Calculation to determine KST’s basis in the land Kimberly contributed after Kimberly receives this distribution
KST basis upon contribution $10,000
Add Kimberly’s §737 gain $3,000
($15,000-$12,000)
KST’s basis in land $13,000
($10,000+$3,000)
Therefore KST’s basis in the land Kimberly contributed after Kimberly receives this distribution is $13,000
f-1. Assume that no intra-entity inventory or land sales occurred between Placid Lake and Scenic. Instead, on January 1, 2020, Scenic sold equipment (that originally cost $170,000 but had a $84,000 book value on that date) to Placid Lake for $118,000. At the time of sale, the equipment had a remaining useful life of five years. What worksheet entries are made for a December 31, 2021, consolidation of these two companies to eliminate the impact of the intra-entity transfer
Answer:
Journal 1
Debit : Other Income $34,000
Credit : Equipment $34,000
Journal 2
Debit : Accumulated depreciation $6,800
Credit : depreciation $6,800
Explanation:
Step 1 : Eliminate the Income resulting from sale and the additional value of equipment sitting in the buyer books
Income = Selling Price - Carrying Amount
where,
Carrying Amount = Cost - Accumulated depreciation
= $84,000
therefore,
Income = $118,000 - $84,000 = $34,000
Journal;
Debit : Other Income $34,000
Credit : Equipment $34,000
Step 2 : Eliminate the unrealized profit as a result of additional asset value
unrealized profit = income ÷ remaining useful life
= $34,000 ÷ 5
= $6,800
Journal;
Debit : Accumulated depreciation $6,800
Credit : depreciation $6,800
11) Domergue Corp. currently has an EPS of $3.76, and the benchmark PE for the company is 21. Earnings are expected to grow at 5.1 percent per year. (4 pts.) a) What is your estimate of the current stock price? b) What is the target stock price in one year? c) Assuming the company pays no dividends, what is the implied return on the company’s stock over the next year?
Answer:
(a) 78.96
(b) 82.99
(c) 5.10
Explanation:
The current stock price can be calculated as follows
= 3.76 × 21
= 78.96
The target stock price in one year can be calculated as follows
= 3.76(1+5.1%)×21
= 3.76×(1+0.051)×21
= 3.76×1.051×21
= 82.99
The implied return on company's stock over one year can be calculated as follows
= 82.99-78.96/78.96
= 4.03/78.96
= 0.0510× 100
= 5.10
You have your choice of two investment accounts. Investment A is a 6-year annuity that features end-of-month $1,980 payments and has an interest rate of 7 percent compounded monthly. Investment B is an annually compounded lump-sum investment with an interest rate of 9 percent, also good for 6 years.
How much money would you need to invest in B today for it to be worth as much as Investment A 6 years from now? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)
Answer:
$112,166
Explanation:
the future value of Investment A:
payment = $1,980
n = 6 x 12 = 72
i = 9% / 12 = 0.75%
FVIFA = [(1 + i)ⁿ- 1 ] / i = [(1 + 0.0075)⁷² - 1 ] / 0.0075 = 95.007
future value = $1,980 x 95.007 = $188,114
now we need to determine the PV of investment B:
PV = $188,114 / (1 + 9%)⁶ = $112,166
Answer: $105,264.24
Explanation:
Step 1) Calculate Future Value of Investment A
Rate: .07/12 = .58%
Payment: $1,980
Term: 72 (6 years * 12 months)
Future Value: ?
In excel -> FV(.58,72,-1980,0)
Future Value = $176,538.67
Step 2) Calculate Present Value of Investment B using Investment A Future Value
Rate: .09
Payment: $0
Term: 6
Future Value: $176,538.67 (from step 1)
PV(.09,6,0,-176538.67)
Present Value = $105,264.24
Thats your answer!! ^^^^^
You can also use the formula or calculator, but I've found excel is the easiest/fastest.
Cheers!
The carrying value of bonds at maturity always equals: Multiple Choice the amount of discount or premium. the amount of cash originally received in exchange for the bonds plus any unamortized discount or less any premium. the par value of the bond. the amount of cash originally received in exchange for the bonds. the amount in excess of par value.
Answer: the par value of the bond
Explanation:
The carrying value of bonds at maturity will always be equal to the par value of the bond. The carrying value of a bond is simply refered to as the bond's face value or par value plus the premiums taht are unamortized.
We should note that during the time of maturity of the bond, there'll have been an ammortization of the discounts or premiums, while the bond's par value will be left.
The carrying value of bonds at maturity always equals to the amount of cash originally received in exchange for the bonds plus any unamortized discount or less any premium. Thus, option (b) is correct.
At maturity, bonds' carrying values will always be the same as their par values. The face value or par value of a bond plus any unamortized premiums are simply referred to as the bond's carrying value.
To put it another way, it is the total of a bond's face value, any unamortized premiums, and any unamortized discounts, if any. The par value, interest rate, and remaining maturity period of the bond must all be known before calculating the carrying value using the effective interest rate technique.
Therefore, option (b) is correct.
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A small factory is considering replacing its existing coining press with a newer, more efficient one. The existing press was purchased three years ago at a cost of $200000, and it is being depreciated according to a 7-year MACRS depreciation schedule. The factoryâs CFO estimates that the existing press has 6 years of useful life remaining. The purchase price for the new press is $280000. The installation of the new press would cost an additional $20000, and this installation cost would be added to the depreciable base. The new press (if purchased) would be depreciated using the 7-year MACRS depreciation schedule although, as noted below, it would be retired/sold after 6 years. Interest expenses associated with the purchase of the new press are estimated to be roughly $4000 per year for the next 6 years.
The appeal of the new press is that it is estimated to produce a pre-tax operating cost savings of $81000 per year for the next 6 years. Also, if the new press is purchased, the old press can be sold for $30000 today. The CFO believes that the new press would be sold for $45000 at the end of its 6-year useful life. Assume that NWC would not be affected. The company has an average tax rate of 29% and a marginal tax rate of 34%. The cost of capital (i.e., the discount rate) for this project is 8.5%.
Required:
Develop the incremental cash flows for this replacement decision and use them to calculate NPV and IRR. Next, make a conclusion about whether or not the existing coining press should be replaced at this time.
Answer:
1. Incremental Cash Flows:
Cash Flows Total PV of annual
Cash Flows
After-tax operating savings $57,510 $261,877
Sale proceeds from old press 30,000 30,000
Sale proceeds from new press 45,000 27,583
Total incremental cash inflows $132,510 $319,460
Cost of new press $280,000 $280,000
Installation cost of new press 20,000 20,000
Interest expense (associated) 4,000 18,214
Total incremental cash outflows $340,000 $318,214
2. NPV $1,246 ($319,460 -$318,214)
IRR = the cost of capital that will cause the NPV to be zero. Since it is $1,246, to find the rate, that makes it zero, we do the following calculations:
$1,246/$318,214 * 100 = 0.4%
Cost of capital = 8.5%
3. IRR = 8.5 - 0.4 = 8.1%
4. Conclusion: The existing press should be replaced at this time.
Explanation:
a) Data and Calculations:
Cost of old press = $200,000
Estimated useful life remaining = 6 years
Cost of new press = $280,000
Installation cost = $20,000
Total cost of new press $300,000
Interest expenses per year for the new press = $4,000
Cost Savings from new press:
Pre-tax operating cost savings = $81,000 per year
After-tax savings = $57,510 ($81,000 * (1 - 29%))
Sales proceeds from old press = $30,000 today
Sale proceeds from new press = $45,000 (at the end of its 6-year life)
Average tax rate = 29%
Marginal tax rate = 34%
Cost of capital = 8.5%
Scoring: Your score will be based on the number of correct matches. There is no penalty for incorrect or missing matches.
Match each of the following transactions to the journal in which it would be entered.
Clear All
Revenue journal Cash receipts journal Purchases journal Cash payments journal General journal Recognized depreciation on the building Journalized the adjusting entry for supplies used during the period Closed the revenue account at the end of the period Received cash from the bank in exchange for a note payable Withdrew cash for personal use (by owner)
Answer:
Matching transactions to the journal in which they would be entered:
Transactions Journal Type
1. Recognized depreciation on the building General Journal
2. Journalized the adjusting entry for supplies
used during the period General Journal
3. Closed the revenue account at the end
of the period General Journal
4. Received cash from the bank in exchange
for a note payable Cash Receipts Journal
5. Withdrew cash for personal use (by owner) Cash Payments Journal
Explanation:
Revenue journal records revenue transactions.
Cash receipts journal records all cash receipts.
Purchases journal records all purchases on account.
Cash payments journal records all cash payments.
General journal is used for all transactions, especially those that cannot be recorded in any of the other specialized journals.
Suppose the economy is experiencing a recession. The output gap is hovering at −7%, causing higher than normal unemployment. Using the Fed model, complete the following passages to compare and contrast how monetary policy and fiscal policy can impact the economy. a. The Federal Reserve can reduce the to stimulate greater output and employment. The federal government can increase to help ease the recession. b. If both monetary and fiscal policy are used, the MP curve will shift , and the IS curve will shift to the . Both shifts will increase , and t
Answer:
a. The Federal Reserve can reduce the interest rates to stimulate greater output and employment. The federal government can increase government spending to help ease the recession.
The Fed can reduce interest rates by engaging in expansionary monetary policy that would then make it easier to borrow funds for investment. The Federal government can also increase spending as this will put more money into the economy to help it start moving again.
b. If both monetary and fiscal policy are used, the MP curve will shift downward, and the IS curve will shift to the right. Both shifts will increase income.
If both monetary and fiscal policy are used, companies will start producing again and hiring more people which will shift the Marginal Productivity curve downward. The IS curve will also shift to the right and both to these are indicators of an increase in income.
At the beginning of 2020, Beerbo acquired a mine for $970,000. Of this amount, $100,000 was ascribed to the land value (the remaining portion was ascribed to the mine). Surveys conducted by geologists have indicated that approximately 12,000,000 units of ore appear to be in the mine. Beerbo incurred $170,000 of development costs associated with this mine prior to any extraction of minerals. It also determined that the fair value of its obligation to prepare the land for an alternative use (when all of the minerals have been removed) is $40,000. During 2020, 2,500,000 units of ore were extracted and 2,100,000 of these units were sold. What is the amount extracted in 2020
Answer:
$225,000
Explanation:
Depletion rate = [Mine cost - Land value + Obligation to prepare the land for an alternative + Development cost] / Total number of ore extracted
Depletion rate = [$970,000 - $100,000 + $40,000 + $170,000] / $12,000,000
Depletion rate = $1,080,000/$12,000,000
Depletion rate = $0.09
Amount extracted in 2020 = Unit of ore extracted in 2020 / Depletion rate
Amount extracted in 2020 = 2,500,000 units * $0.09
Amount extracted in 2020 = $225,000
Kirkland Company combines its operating expenses for budget purposes in a selling and administrative expense budget. For the first 6 months of 2020, the following data are available. 1. Sales: 20,800 units quarter 1; 22,100 units quarter 2. 2. Variable costs per dollar of sales: sales commissions 5%, delivery expense 2%, and advertising 3%. 3. Fixed costs per quarter: sales salaries $10,900, office salaries $6,160, depreciation $4,490, insurance $2,080, utilities $880, and repairs expense $670. 4. Unit selling price: $24. Prepare a selling and administrative expense budget by quarters for the first 6 months of 2020
Answer:
Selling and administrative expense budget for 6 months = $144,300
Explanation:
Note: See the attached excel for the selling and administrative expense budget.
From the attached excel file, we have:
Quarter 1 total cost = $70,720
Quarter 2 total cost = $73,580
Selling and administrative expense budget for 6 months = Six months total cost = Quarter 1 total cost + Quarter 2 total cost = $70,720 + $73,580 = $144,300
Elizabeth (25 years old) studied music education in college and graduated a year ago. She currently works as a music teacher at a year-round private middle school. Her gross pay is $28800 a year, or $2400 a month. After taxes, health insurance, and other paycheck deductions, her net pay is $24600 a year. Based on recommended guidelines, how much money should Elizabeth be saving each month
Based on her gross pay, the amount that Elizabeth should be saving each month is $288.
Recommended savings rateIt is recommended that one saves at least 12% of their gross salary each month to allow them cater for emergencies.
Elizabeth savings per monthHer savings would therefore be:
= Gross monthly pay x 12%
= 2,400 x 12%
= $288
In conclusion, she should save $288.
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Tyrell Company issued callable bonds with a par value of $18,000. The call option requires Tyrell to pay a call premium of $500 plus par (or a total of $18,500) to bondholders to retire the bonds. On July 1, Tyrell exercises the call option. The call option is exercised after the semiannual interest is paid the day before on June 30. Record the entry to retire the bonds under each separate situation.
1. The bonds have a carrying value of $15,000.
2. The bonds have a carrying value of $19,000.
Answer and Explanation:
The journal entries are shown below:
1. Bonds Payable $18,000
Loss on redemption $3,500
To Discount on Bonds Payable ($18,000 - $15,000) $3,000
To Cash ($18,000 + $500) $18,500
(Being retiring of the bond is recorded)
2. Bonds Payable $18,000
Premium on Bonds Payable ($19,000 - $18,000) $1,000
To Gain on redemption of bonds $500
To Cash ($18,000 + $500) $18,500
(Being retiring of the bond is recorded)
These two journal entries should be recorded
Mauro Products distributes a single product, a woven basket whose selling price is $28 per unit and whose variable expense is $23 per unit. The company’s monthly fixed expense is $9,500. Required: 1. Calculate the company’s break-even point in unit sales. 2. Calculate the company’s break-even point in dollar sales. (Do not round intermediate calculations.) 3. If the company's fixed expenses increase by $600, what would become the new break-even point in unit sales? In dollar sales? (Do not round intermediate calculations.)
Answer:
Results are below.
Explanation:
To calculate the break-even point in units, we need to use the following formula:
Break-even point in units= fixed costs/ contribution margin per unit
Break-even point in units= 9,500 / (28 - 23)
Break-even point in units= 1,900 units
To calculate the break-even point in dollars, we need to use the following formula:
Break-even point (dollars)= fixed costs/ contribution margin ratio
Break-even point (dollars)= 9,500 / (5 / 28)
Break-even point (dollars)= $53,200
Finally, the fixed costs increase to $10,100:
Break-even point in units= 10,100 / 5
Break-even point in units= 2,020 units
Break-even point (dollars)= 10,100 / (5/28)
Break-even point (dollars)= $56,560
Patterson Development sometimes sells property on an installment basis. In those cases, Patterson reports income in its income statement in the year of the sale but reports installment income by the installment method on the tax return. Installment income in 2021 was $240 million, which Patterson expects to collect equally over the next four years. The tax rate is 25%, but based on an enacted law, is scheduled to become 35% in 2023.
Patterson's pretax accounting income for the 2013 income statement was $530 million of this, $30 million is non-taxable revenue from proceeds of a life insurance policy. There were no differences between accounting income and taxable income other than those described above and no cumlative temporary differences existed at the beggining of the year:
1. Prepare the appropriate journal entry to record patterson's 2013 income taxes.
2. What is Patterson's 2013 net income?
Answer:
1. Debit Income tax expense for $143 million; Credit Deferred tax liability for $78 million; and Credit Income tax payable for $65 million.
2. Patterson's 2021 net income is $387.
Explanation:
Note: There is an error in the question because of date inconsistency. Therefore, 2021 upward is used in the answer to ensure date consistency.
1. Prepare the appropriate journal entry to record patterson's 2021 income taxes.
Note: See the attached excel file for the calculation of income tax payable and deferred tax liability.
The journal entry will look as follows:
Date General journal Debit ($'M) Credit ($'M)
31 Dec 2021 Income tax expense 143
Deferred tax liability 78
Income tax payable 65
(To record income tax payable.)
2. What is Patterson's 2021 net income?
This can be determined as follows:
Particulars ($'Million)
Pre accounting income 530
Income tax expense (143)
Net income 387
An economy is in long-run macroeconomic equilibrium when each of the following aggregate demand shocks occurs: a. A stock market boom increases the value of stocks held by households. b. Firms come to believe that a recession is likely in the near future. c. Anticipating the possibility of war, the government increases its purchases of military equipment. d. The quantity of money in the economy declines, and interest rates increase.
Answer:
Following are the solution to these question:
Explanation:
In point a:
The population feels wealthier and seems to be socially secure. This will boost consumption, moving AD to the correct. There is a difference in deflation. Govt must adopt a discretionary monetary policy to fight deflation, that will change AD left.
In point b:
Expenditure has been decreased to increasing jobs or costs. Disinflationary distance exists. To improve DA (shift rectors) and restore full job production, Govt must pursue the expansionary monetary policy.
In point c:
It will once again raise NPA because part A contributes to even more competition with higher public expenditure. The deflation divide is that there is. That alternative is an expansionary tax reform to move to the left.
In point d:
The rise in interest rates declines expenditure and, as part B, reduces AD. The deflationary difference remains. Government must use expansionary monetary policy to fight it, moving AD to a correct.
Hoffman Corporation issued $60 million of 9%, 15-year bonds at 106. Each of the 60,000 bonds was convertible into one share of $1 par common stock. Prepare the journal entry to record the issuance of the bonds. (Enter your answers in millions rounded to 1 decimal place (i.e., 5,500,000 should be entered as 5.5). If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)
Answer:
Dr Cash $63,600,000
Cr Premium on Bonds $3,600,000
Cr Bonds payable $60,000,000
Explanation:
Preparation of the journal entry to record the issuance of the bonds.
Dr Cash $63,600,000
(106%*$60,000,000)
Cr Premium on Bonds $3,600,000
($63,600,000-$60,000,000)
Cr Bonds payable $60,000,000
(To record issuance of the bonds)
Manrow Growers, Inc., owns equipment for sowing and harvesting its organic fruit, vegetables, and tree nuts that are sold to local restaurants and grocery stores. At the beginning of 2019, an asset account for the company showed the following balances:
Equipment $350,000
Accumulated depreciation through 2018 165,000
During 2019, the following expenditures were incurred for the equipment:
Major overhaul of the equipment on January 1, 2019, that improved efficiency $42,000
Routine maintenance and repairs on the equipment 5,000
The equipment is being depreciated on a straight-line basis over an estimated life of eight years with a $20,000 estimated residual value. The annual accounting period ends on December 31.
Required:
Record the adjusting entry for depreciation on the equipment during 2018.
Answer: See explanation
Explanation:
The adjusting entry for depreciation on the equipment during 2018 will be calculated as:
Depreciation = (Equipment cost - Estimated residual value) / Estimated life
= ($350000 - $20000) / 8
= $41250
Debit: Depreciation = $41250
Credit: Accumulated depreciation = $41250
(To record depreciation for the year)
rdan Corporation expects to incur indirect overhead costs of $172,550 per month and direct manufacturing costs of $18 per unit. The expected production activity for the first four months of the year are as follows. January February March April Estimated production in units 5,300 7,300 4,800 6,400 Required Calculate a predetermined overhead rate based on the number of units of product expected to be made during the first four months of the year. Allocate overhead costs to each month using the overhead rate computed in Requirement a. Calculate the total cost per unit for each month using the overhead allocated in Requirement b.
Answer:
Results are below.
Explanation:
Giving the following information:
Total estimated overhead costs= (172,550*4)= $690,200
Total estimated units= 23,800
To calculate the predetermined manufacturing 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
Predetermined manufacturing overhead rate= 690,200 / 23,800
Predetermined manufacturing overhead rate= $29 per unit
Now, we can allocate overhead to each month:
Allocated MOH= Estimated manufacturing overhead rate* Actual amount of allocation base
January= 29*5,300= $153,700
February= 7,300*29= $211,700
March= 29*4,800= $139,200
April= 29*6,400= $185,600
Finally, the unitary total cost:
Unitary cost= 18 + 29= $47
On January 2, Dixie, Inc., pays a salvage company $1,000 to haul away a machine costing $28,000 with accumulated depreciation of $28,000. Complete the necessary journal entry by selecting the account names from the drop-down menus and entering the dollar amounts in the debit or credit columns.
No Date General Journal Debit Credit
1 Jan. 2 Gain on disposal of machinery 1,000
Accumulated depreciation 28,000
Answer:
Dr Accumulated depreciation-Machinery 28,000
Dr Loss on disposal 1000
Cr Cash 1000
Cr Machinery 28,000
Explanation:
Based on the information given the appropriate journal entry to record the transaction on On January 2 is :
On January 2
Dr Accumulated depreciation-Machinery 28,000
Dr Loss on disposal 1000
Cr Cash 1000
Cr Machinery 28,000