Answer:
$149,000
Explanation:
The computation of the amount of net sales is shown below:
= Sales revenue - sales return & allowance - sales discount
= $156,000 - $2,000 - $5,000
= $149,000
We simply deduct the two items from the sales revenue so that the net sales revenue could be come and the same would be reported on the income statement
Diamond Company manufactures two models of cassette recorders: VCH and MTV. Based on the following production data for April, prepare a production budget.
VCH MTV
Estimated inventory (units), April 1 2,900 4,000
Desired inventory (units), April 30 6,900 5,250
Expected sales volume (units):
Eastern zone 12,500 12,960
Midwest zone 19,000 19,800
Western zone 14,500 9,840
Answer and Explanation:
The preparation of the production budget is presented below:
Particulars VCH MTV
Expected Sales:
Eastern zone 12500 12960
Midwest zone 19000 19800
Western zone 14500 9840
Add: Desired inventory 6900 5250
Less: Opening inventory (2900) (4000)
Production in units 50,000 43,850
Wildhorse Corporation factors $266,800 of accounts receivable with Kathleen Battle Financing, Inc. on a with recourse basis. Kathleen Battle Financing will collect the receivables. The receivables records are transferred to Kathleen Battle Financing on August 15, 2020. Kathleen Battle Financing assesses a finance charge of 2% of the amount of accounts receivable and also reserves an amount equal to 4% of accounts receivable to cover probable adjustments.
Assume that the conditions are met for the transfer of receivables with recourse to be accounted for as a sale. Prepare the journal entry on August 15, 2014, for Beyoncé to record the sale of receivables, assuming the recourse liability has a fair value of $4,650. (If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when the amount is entered. Do not indent manually.)
Date Account Titles and Explanation Debit Credit August 15, 2014
Answer:
Denit Cash for $250,792; Debit Due from factors for $10,672; Debit Loss on Sale of receivables for $9,986; Credit Recourse liability for $4,650; and Credit Accounts receivable for $266,800.
Explanation:
The following are calculated first before preparing the journal entry:
Cash received = Factored amount * (100% - Finance charge percentage - Percentage reserved for probable adjustments) = $266,800 * (100% - 2% - 4%) = $250,792
Due from factors = Factored amount * Percentage reserved for probable adjustments = $266,800 * 4% = $10,672
Loss on Sale of receivables = (Factored amount * Finance charge percentage) + Fair value of recourse liability = ($266,800 * 2%) + $4,650 = $9,986
The journal entry will now appear as follows:
Date Account Titles and Explanation Debit ($) Credit ($)
15 Aug 2014 Cash 250,792
Due from factors 10,672
Loss on Sale of receivables 9,986
Recourse liability 4,650
Accounts receivable 266,800
(To record the sale of receivables.)
The financial statements of New World, Incorporated, provide the following information for the current year: December 31 January 1 Accounts receivable $ 287,000 $ 381,500 Inventory $ 280,000 $ 266,000 Prepaid expenses $ 72,800 $ 70,000 Accounts payable (for merchandise) $ 258,300 $ 249,550 Accrued expenses payable $ 66,150 $ 79,450 Net sales $ 3,167,500 Cost of goods sold $ 1,669,500 Operating expenses (including depreciation of $63,000) $ 381,500 What is the amount of cash received from customers during the current yea
Understanding how shirking decreases team output
Eleanor sells bottled water from a small stand by the beach. On the last day of summer vacation, many people are on the beach, and Eleanor realizes that she can make a lot more money this day if she hires someone to walk up and down the beach selling water. She finds a college student named Darnell and makes him the following offer: They'll each sell water all day and split their earnings (revenue minus the cost of water) equally at the end of the day. Eleanor knows that if they both work hard, Darnell will earn $110 on the beach and Eleanor will earn $240 at her stand, so they will each take home half of their total revenue: $110+$2402=$175$110+$2402=$175. If Darnell shirks, he'll generate only $60 in earnings. Eleanor does not know that Darnell estimates his personal cost (or disutility) of working hard as opposed to shirking at $30.
Once out of Eleanor's sight, Darnell faces a dilemma: work hard (put in full effort) or shirk (put in low effort).
In terms of Darnell's total utility, it is worse for him to_____ .
Taking into account the loss in utility that working hard brings to Darnell, Eleanor and Darnell together _____ better off if Darnell shirks instead of working hard.
Eleanor knows Darnell will shirk if unsupervised. She considers hiring her good friend Carrie to keep an eye on Darnell. The most Eleanor should be willing to pay Carrie to supervise Darnell, assuming supervision is sufficient to encourage Darnell to work hard, is _______ .
It turns out that Eleanor's friend Carrue is unavilable that day, so Eleanor cannot find a reliable person to watch Darnell. Which of the following arrangements will ensure that Darnell works hard without making Eleanor any worse off than she is when Darnell shirks?
A. Allow Darnell to keep 75% of the revenue from the bottles of water he sells instead of 50%
B. Allow Darnell to keep 57% of the revenue from the bottles of water he sells instead of 50%
C. Pay Darnell $70, regardless of how many bottles of water he sells
D. Make Darnell promise to work hard
Answer:
Shirk
are not better of
$30
A. Allow Darnell to keep 75% of the revenue from the bottles of water he sells instead of 50%
Explanation:
Darnell and Eleanor both can work together and their combined total earning will be high. Darnell estimates that his shirking is cost at $30 then Eleanor can pay to supervisor a maximum of $30 for the supervision service for Darnell. The best choice is to hire Carrue as a supervisor for Darnell. If Carrue is not available someday then Darnell can be motivated by allowing him to keep 75% of the revenue generated from him.
Suppose the initial inflation rate and inflation target are both 2%, that the real federal funds rate is 2%, and that the economy is at the full employment level of output. According the Taylor Rule, the federal funds target should be . Suppose now that the inflation rate changes to 6%. The Taylor Rule now prescribes that the federal funds target should be
Answer:
a. 4%
b. 10%
Explanation:
1. Federal funds target = Real Federal funds rate + Inflation rate + 1/2( inflation gap) + 1/2(output gap)
Inflation gap = Current inflation - inflation target = 2% - 2% = 0
Economy is at full employment so output gap is 0.
= 2% + 2% + 1/2(0) + 1/2 (0)
= 4%
2. Federal funds target = Real Federal funds rate + Inflation rate + 1/2( inflation gap) + 1/2(output gap)
= 2% + 6% + 1/2(6% - 2%) + 1/2(0)
= 10%
alculating Net Float [LO1] Each business day, on average, a company writes checks totaling $17,000 to pay its suppliers. The usual clearing time for the checks is four days. Meanwhile, the company is receiving payments from its customers each day, in the form of checks, totaling $22,000. The cash from the payments is available to the firm after two days
Answer:
A.Collection Float ($44,000)
Disbursements Float $68,000
Net Float $24,000
B.Collection Float ($44,000)
Disbursement Float $68,000
Net Float $24,000
Explanation:
A. Calculation the company's disbursement float, collection float, and net float
Per Day Clearing Days Float
Collection Float ($22,000) ×2days = ($44,000)
Disbursements Float $17,000 × 4days = $68,000
Net Float $24,000
($68,000-$44,000)
B. Calculation for the company's disbursement float, collection float, and net float if the collected funds were available in two days instead of four
Per Day Clearing Days Float
Collection Float ($22,000) ×2 days =($44,000)
Disbursement Float $41,500 ×4days= $68,000
Net Float $24,000
($68,000-$44,000)
Hence,
A.Collection Float ($44,000)
Disbursements Float $68,000
Net Float $24,000
B.Collection Float ($44,000)
Disbursement Float $68,000
Net Float $24,000
vProblem 10-4 Partnership Formation (LO 10.2) Elaine's original basis in the Hornbeam Partnership was $40,000. Her share of the taxable income from the partnership since she purchased the interest has been $70,000, and Elaine has received $80,000 in cash distributions from the partnership. Elaine did not recognize any gains as a result of the distributions. In the current year, Hornbeam also allocated $1,000 of tax-exempt interest to Elaine. Calculate Elaine's current basis in her partnership interest. $fill in the blank 1
Answer: $31000
Explanation:
Elaine's current basis in her partnership interest will be calculated as:
= Value of original basis + (interest purchased - Cash received) + tax exempt interest
= $40000 + ($70000 - $80000) + $1000
= $40000 - $10000 + $1000
= $31000
The Tradition Corporation is considering a change in its cash-only policy. The new terms would be net one period. The required return is 2.4 percent per period. Based on the following information, what is the break-even price per unit that should be charged under the new credit policy? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)
Current Policy New Policy ?
Price per unit $ 93 ?
Cost per unit $ 44 $ 44
Unit sales per month 2,675 2,750
X Answer is complete but not entirely correct.
Break-even price $ 92.87 x
Answer: $93.86
Explanation:
The break even price simply refers to the price that's required to make a normal profit. From the information given, the break even price will be:
= [($93-$44) × 2675)/2750) + 44] × ( 1 + 2.3%)
= [$49 × 2675)/2750)+44] × (1+0.024)
= [(49 × 2675)/2750)+44] × 1.024
= [(131075/2750) + 44] × 1.024
= (47.66 + 44) × 1.024
= 91.66 × 1.024
= $93.86
Therefore, the break even price is $93.86
On December 31, 2020, the Frisbee Company had 262,000 shares of common stock issued and outstanding. On March 31, 2021, the company sold 62,000 additional shares for cash. Frisbees net income for the year ended December 31, 2021, was $820,000. During 2021, Frisbee declared and paid $92,000 in cash dividends on its nonconvertible preferred stock. What is the 2021 basic earnings per share
Answer:
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1. Explain the concept of opportunity cost with an appropriate example.
Answer:
Concept & example of Opportunity Cost
Explanation:
Opportunity Cost is the cost of next best alternative foregone, while choosing an alternative. This arises because of 'choice' problem, due to unlimited wants & limited resources - having alternative uses.
Eg : If I can have 2 chapatis or a bowl of rice. And, I eat a bowl of rice. Then, 'opportunity cost' of a rice bowl is - the next best available '2 chapattis' foregone for the former.
Brooks Corporation has a Food Services department that provides food for employees in all other departments of the company. For September, variable food costs were budgeted at $4 per meal, based on 14,000 meals served during the month. At the end of the month, it was determined that 15,000 meals had been served at a total cost of $70,000. What is the amount of the variable food costs that should be charged to the other departments of the company at the end of the month
Answer:
the amount that should be charged for the other department is $60,000
Explanation:
The computation of the amount that should be charged for the other department is shown below:
= Variable cost per meal × number of meals
= $4 × 15,000 meals
= $60,000
hence, the amount that should be charged for the other department is $60,000
So the same would be relevant
Relevance has always been the challenge of the advertising industry. Summarize Kristi Roger's assessment of the advertising industry in her Ted Talk. Considering her hypothesis and results, what are some implications for marketing managers as they seek to improve the ROI of marketing expenditures on all forms of marketing communications
Answer:
Advertising is a paid sort of promotion utilized by organizations for product promotion, hence being of a vital usage and a significant part in organizations. The achievement of any firm is reliant on the correct sort of advertising channels utilized.
Explanation:
In her Ted talk, it is clear Kristi Roger had conducted an extraordinary advertising analysis, in this way contending that relevance is a fundamental factor assuming an enormous part in advertising. She contends that the planned message of promotion should contact the perfect person at the perfect time. To guarantee this assertion is accomplished, an advertiser has the obligation to utilize the correct technology undeniably to make a pertinent directive for the correct crowd.
In addition, marketing managers are obligated to recognize the significant challenges in the market. They ought to get updated changes occurring in the market to stay away from any significant impacts on the Return On Investment (ROI).
To profit more from advertising, marketing managers should recruit the ideal person who is acceptable in quantitative skills rather than creative skills in light of the fact that the market analysis is of more significance than benefiting creative products into the market. A person with extraordinary quantitative skills can examine the market situations appropriately, henceforth s/he can dispose of a portion of the cycles that occur in computerized crusade improvement. To carry extraordinary outcomes to the organization, quantitative specialists guarantee important advertisements contact the perfect person at the perfect time.
Three major transportation segments and a major company within each segment are as follows:
Segment Company Motor carriers YRC Worldwide Inc. (YRCW) Railroads Union Pacific Corporation (UNP) Transportation Arrangement C.H. Robinson Worldwide Inc. (CHRW) YRC Worldwide Union Pacific C.H. Robinson Worldwide Sales $4,832 $21,813 $13,470 Average long-term operating assets 1,016 47,569 1,092
a. Determine the asset turnover for all three companies. Round to two decimal places.
YRC Worldwide ________
Union Pacific _______
C.H. Robinson Worldwide ______
b. Based on your calculations above which of the following statements are correct.
Answer:
Segment Company Motor
a) The asset turnover ratios for all three companies. Round to two decimal places are:
YRC Worldwide ___4.76_____
Union Pacific ___0.46____
C.H. Robinson Worldwide __12.34____
b) Based on the Asset Turnover Ratio computed above, Transportation Arrangement is the most efficient. It outperformed YRC Worldwide and Union Pacific Corporation in deploying assets to generate revenue. The performance of Union Pacific Corporation in comparison is very abysmal.
Explanation:
a) Data and Calculations:
YRC Worldwide Railroads Union Transportation
Inc. (YRCW) Pacific Corporation Arrangement C.H.
(UNP)
Sales $4,832 $21,813 $13,470
Average long-term
operating assets 1,016 47,569 1,092
Asset turnover = Sales/Average operating assets
= 4.76 0.46 12.34
The Razooks Company, which manufactures office equipment, is ready to introduce a new line of portable copiers. The following copier data are available:
Variable manufacturing cost $195
Applied fixed manufacturing cost 105
Variable selling and administrative cost 75
Allocated fixed selling and administrative cost 90
1) What price will the company charge if the firm uses cost-plus pricing based on variable manufacturing cost and a markup percentage of 210%?
a) $409.50.
b) $567.00.
c) $604.50.
d) $672.00.
e) None of these.
2) What price will the company charge if the firm uses cost-plus pricing based on total variable cost and a markup percentage of 165%?
a) $163.64.
b) $445.50.
c) $433.64.
d) $715.50.
e) None of these.
3) What price will the company charge if the firm uses cost-plus pricing based on absorption manufacturing cost and a markup percentage of 120%?
a) $594.00.
b) $825.00.
c) $660.00.
d) $850.22.
e) None of these.
Answer:
Results are below.
Explanation:
Giving the following information:
Variable manufacturing cost $195
Applied fixed manufacturing cost 105
Variable selling and administrative cost 75
Allocated fixed selling and administrative cost 90
1)
Unitary variable cost= $195
Selling price= 195*2.1
Selling price= $409.5
2)
Total variable cost= 195 + 75= $270
Selling price= 270*1.65
Selling price= $445.5
3)
The absorption costing method includes all costs related to production, both fixed and variable. The unit product cost is calculated using direct material, direct labor, and total unitary manufacturing overhead.
Total absorption cost= 195 + 105= $300
Selling price= 300*1.2
Selling price= $360
Strategic trade policy Suppose there are only two producers of aircraft in the world, AirCraft in the United States and AirEurope in the European Union. The following hypothetical payoff matrices show the profits (in millions of dollars) for each company. In the absence of subsidies, if only one company makes aircraft, it receives a profit of $90 million. If both companies decide to produce, they each lose $2 million, when a company decides not to produce, it earns zero profit.
Air Europe
Produce Not Produce
AirCraft Produce 2,-2 90,0
Not Produce 0,90 0, 0
Suppose that the European Union considers aircraft a strategic industry and gives AirEurope a $9 million subsidy if it produces
Fill in the cells of the following payoff matrix to reflect the $9 million subsidy
AirEurope
Produce Not Produce
AirCraft Produce
Not Produce
With a $9 million subsidy, regardless of whether AirCraft produces or not, AirEurope----------- produce if it wants to maximize its profit.
Because AirEurope will enter the market if given a $9 million subsidy, AirCraft should also produce in this industry.
a. True
b. False
Answer:
Air Europe should produce aircrafts
a. True
Explanation:
Air Europe has payoff matrix which will maximize the profits if it chooses to produce air crafts. The airline will be able to earn 90 million if it chooses to produces and will loose 2 million if chooses not to produce. There is subsidy of $9 million which is a plus for Air Europe therefore it should produce aircrafts.
rede Company budgeted selling expenses of $30,600 in January, $34,500 in February, and $40,500 in March. Actual selling expenses were $31,700 in January, $34,080 in February, and $48,400 in March. The company considers any difference that is less than 5% of the budgeted amount to be immaterial. Prepare a selling expense report that compares budgeted and actual amounts by month and for the year to date.
Answer:
JANUARY
By month
$1,100 Unfavorable
Year-to-date
$1,100 Unfavorable
FEBRUARY
By month
$420 Favorable
Year-to-date
$680 Unfavorable
MARCH
By month
$7,900 Unfavorable
Year-to-date
$8,580 Unfavorable
Explanation:
Preparation of a selling expense report that compares budgeted and actual amounts by month and for the year to date
SELLING EXPENSE REPORT
JANUARY
By month
Budget Actual Difference
$30,600 -$31,700 =$1,100 Unfavorable
Year-to-date
Budget Actual Difference
$30,600-$31,700=$1,100 Unfavorable
FEBRUARY
By month
Budget Actual Difference
$34,500-$34,080=$420 Favorable
Year-to-date
Budget Actual Difference
$65,100-$65,780=$680 Unfavorable
($30,600+$34,500=$65,100)
($31,700+$34,080=$65,780)
MARCH
By month
Budget Actual Difference
$40,500-$48,400=$7,900 Unfavorable
Year-to-date
Budget Actual Difference
$105,600-$114,180=$8,580 Unfavorable
($65,100+$40,500=$105,600)
($65,780+$48,400=$114,180)
Complete the journal entries for the following financing transactions.
a. A farmer deposits $350 from a garage sale of personal items into the farm checking account.
b. A farmer pays $100 for groceries with the farm checking account utilities of $65 for the farmer's house is paid with a check from the farm checking account.
c. A farmer culls his cow herd and sells the cows for $3,000 A farmer builds a shed for $7,000
Answer:
The answer is
Explanation:
The answer is ___, because
Riverview Company's budget for the coming year includes $7,000,000 for manufacturing overhead, 40,000 hours of direct labor, and 200,000 hours of machine time. If Riverview applies overhead using a predetermined rate based on machine-hours, what amount of overhead will be assigned to a unit of output which requires 0.4 machine hours and 0.30 labor hours to complete
Answer:
$70
Explanation:
With regards to the above, we need to compute first the overhead application rate.
Overhead application rate = Budgeted overhead / Budgeted activity/Budgeted machine hour
= $7,000,000 / 40,000 labor hours
= $175
Overhead application rate = $175 per direct labor hour
Assigned overhead = Overhead application rate × Number of machine hours consumed
= $175 × 0.4
= $70
A company has two options for manufacturing boots. The manual process has monthly fixed costs of $26,380 and variable costs of $5.16 per pair of boots and an automated process with fixed costs of $52,239 per month and variable costs of $2.09 per pair of boots. They expect to sell each pair of boots for $99. What is the monthly break-even quantity (number of units) for the manual process
Answer:
Break-even point for the manual process= 281.11 unit
Explanation:
Break-even point is the level of activity at which a firm must operate such that its total revenue will equal its total costs. At this point, the company makes no profit or loss because the total contribution exactly equals the total fixed costs.
Break even point in units is calculated using this formula:
Break even point in units = Total general fixed cost/ (selling price - Variable cost)
Break-even point for the manual process:
Break-even point in units = $26,380/(99- 5.16) = 281.11 units
Break-even point for the manual process= 281.11 units
International Gems sells fine jewelry and has implemented activity-based costing. Costs in the shipping department have been divided into three cost pools. The first cost pool contains costs that are related to packaging and shipping. International has determined that the number of boxes shipped is an appropriate cost driver for these costs. The second cost pool is made up of costs related to the final inspection of each item before it is shipped and the cost driver for this pool is the number of individual items that are inspected. The final cost pool is used for general operations of the department and the cost driver is the number of orders. Information about the activities is summarized below:
Cost Pool Estimated Total Costs Cost Driver Estimated Annual Activity
Packaging and shipping 67,200 Number of boxes shipped 16,000 boxes
Final inspection 200,000 Number of individual items inspected 100,000 items
General operations 85,000 Number of orders 10,000 orders
During the period, the Southern sales office generated 240 orders for a total of 3,560 items, which were shipped in 1,200 boxes. What amount of shipping department costs should be allocated to these sales?
Answer:67,200
Explanation:
The shipping department cost will be $14200.
What is the cost?The term cost can be termed as the price of buying something or the amount that a company spends on making a product. It is the amount that is charged on something for the product. The incurred cost can have many variables and non-variable costs like purchasing cost, labor, wages, rent, maintenance, raw material, processing cost, packaging, and transportation.
In this Question, the International gems sell their product slots. The shipping department has been divided into three cost pools. The total shipping charges will be the addition of packaging and shipping, Final Inspection, and General operations.
So, the total shipping cost =5040 + 7120 + 2040 = 14200
Thus, the costs that should be allocated to the sales with respect to the shipping charges will be $14,200.
Learn more about cost, here:
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William is a single writer (age 35) who recently decided that he needs to save more for retirement. His 2020 AGI before the IRA contribution deduction is $66,000 (all earned income). (Leave no answer blank. Enter zero if applicable.) a. If he does not participate in an employer-sponsored plan, what is the maximum deductible IRA contribution William can make in 2020?
Answer: $6,000
Explanation:
As per IRS deduction rules in 2020, the maximum deductible IRA contribution for a person who does not participate in an employer-sponsored plan is $6,000.
That is therefore the maximum deductible that William can make in this scenario.
Crane Sporting Goods expects to have earnings per share of $6 in the coming year. Rather than reinvest these earnings and grow, the firm plans to pay out all of its earnings as a dividend. With these expectations of no growth, Crane's current share price is $60 and the cost of equity capital is 10%. Suppose Crane could cut its divident payout rate to 75% for the foreseeable future and use the retained earnings to open new stores. The return on investment in these stores is expected to be 12%. if we assume that the risk of these new investments is the same as the risk of its existing investments, then the firm's equity cost of capital is unchanged. What effect would this new policy have on Crane's stock price
Answer:
Stock price increases
Explanation:
We need to determine the stock price with the new policy
Stock price can be determined using the constant growth dividend model
according to the constant dividend growth model
price = d1 / (r - g)
d1 = next dividend to be paid
r = cost of equity
g = growth rate
growth rate = retention rate x Return on investment
Retention rate = 1 - payout ratio = 1 - 0.75 = 0.25
growth rate = 0.25 x 12 = 3%
Stock price = 6/(0.10 - 0.03) = $85.71
Under the new policy, stock price increases
Universal Foods has a debt-to-value ratio of 36%, its debt is currently selling on a yield of 8%, and its cost of equity is 12%. The corporate tax rate is 40%. The company is now evaluating a new venture into home computer systems. The internal rate of return on this venture is estimated at 13.4%. WACCs of firms in the personal computer industry tend to average around 14%.
a. What is Universal's WACC? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.)
WACC
b. Will Universal make the correct decision if it discounts cash flows on the proposed venture at the firm's WACC?
A. Yes
B. No
c. Should the new project be pursued?
A. Yes
B. No
Answer:
A. 9.41%
B. No
C. No
Explanation:
a. Calculation to determine Universal's WACC
Using this formula
rEquity = (D / V) × (1 - Tc)rDebt + (E / V) × rEquity
Let plug in the formula
rEquity= 0.36× (1 - 0.40)(0.08) + (1 - 0.36) × 0.12
rEquity=0.36×(0.60)(0.08)+(0.64)×0.12
rEquity=(0.36×0.048)+0.0768
rEquity=0.01728+0.0768
rEquity=0.0941*100
rEquity=9.41%
Therefore Universal's WACC is 9.41%
b. No. Based on the above calculation the Universal would not make the correct decision if it discounts cash flows on the proposed venture at the firm's WACC reason been that it is above the company WACC.
c. No. The new project should not be pursued reason been that the INTERNAL RATE OF RETURN( IRR ) is lower than the required discount rate of 14% and it tend to have a negative NET PRESENT VALUE (NPV).
TB MC Qu. 8-199 The Puyer Corporation makes and sells ... The Puyer Corporation makes and sells only one product called a Deb. The company is in the process of preparing its Selling and Administrative Expense Budget for next year. The following budget data are available: Monthly Fixed Cost Variable Cost Per Deb Sold Sales commissions $ 0.90 Shipping $ 1.40 Advertising $ 50,000 $ 0.20 Executive salaries $ 60,000 Depreciation on office equipment $ 20,000 Other $ 40,000 All of these expenses (except depreciation) are paid in cash in the month they are incurred. If the company has budgeted to sell 17,000 Debs in March, then the average budgeted selling and administrative expenses per unit sold for March is closest to: (Round your intermediate calculations to 2 decimal places.)
Answer: $10
Explanation:
First, we need to calculate the total budgeted selling and administrative expenses for March which will be:
Advertising = $50,000
Add: Executive salaries = $60,000
Add: Depreciation on office equipment = $20,000
Add: Other = $40,000
Total = $170,000
Since the company has budgeted to sell 17,000 Debs in March, then the average budgeted selling and administrative expenses per unit sold for March is:
= $170000 / 17000
= $10
Given the following information, calculate the going-in capitalization rate for the following apartment complex. In your calculations, assume no miscellaneous income and above-the-line treatment of capital expenditures.
Number of apartment units: 15
Monthly rent per unit: $3,000
Vacancy and collection loss: 10% of potential gross income
Operating expenses: 5% of effective gross income
Capital expenditures: 10% of effective gross income
Acquisition price: $3,420,000
a. 0.81%
b. 1.01%
c. 13.50%
d. 15.79%
e. 12.08%
Answer:
The correct option is b. 1.01%.
Explanation:
This can be calculated as follows:
Potential gross income = Number of apartment units * Monthly rent per unit = 15 * $3,000 = $45,000
Therefore, we have:
Details Amount ($)
Potential gross income (PGI) 45,000
Vacancy and collection loss (10% of PGI) (4,500)
Effective gross income (EGI) 40,500
Operating expenses: 5% of effective gross income (2,025)
Capital expenditures (10% of effective gross income) (4,050)
Net operating income 34,425
Acquisition price = 3,420,000
Going-in capitalization rate = Net operating income / Acquisition price = $34,425 / $3,420,000 = 0.0101, or 1.01%
Therefore, the correct option is b. 1.01%.
Pet Supplies Inc., a pet wholesale supplier, was organized on January 1. Projected sales for each of the first three months of operations are as follows: January $310,000 February 350,000 March 510,000 All sales are on account. 58% of sales are expected to be collected in the month of the sale, 37% in the month following the sale, and the remainder in the second month following the sale. Prepare a schedule indicating cash collections from sales for January, February, and March.
Answer:
Results are below.
Explanation:
Giving the following information:
Sales:
January $310,000
February 350,000
March 510,000
58% of sales are expected to be collected in the month of the sale
37% in the month following the sale
5% in the second month following the sale
Cash collection January:
Cash from sales in account January= (310,000*0.58)= 179,800
Total cash collection= $179,800
Cash collection February:
Cash from sales in account January= (310,000*0.37)= 114,700
Cash from sales in account February= (350,000*0.58)= 203,000
Total cash collection= $317,700
Cash collection March:
Cash from sales in account January= (310,000*0.05)= 15,500
Cash from sales in account February= (350,000*0.37)= 129,500
Cash from sales in account March= (510,000*0.58)= 295,800
Total cash collection= $440,800
Advanced Enterprises reports year−end information from 2019 as follows: Sales (160,250 units) $969,000 Cost of goods sold (641,000) Gross margin 328,000 Operating expenses (268,000) Operating income $60,000 Advanced is developing the 2020 budget. In 2020 the company would like to increase selling prices by 13.5%, and as a result expects a decrease in sales volume of 10%. All other operating expenses are expected to remain constant. Assume that cost of goods sold is a variable cost and that operating expenses are a fixed cost. What is budgeted cost of goods sold
Answer:
Cost of goods sold = $576,900
Explanation:
The budgeted cost of goods sold will be the sales volume in 2020 multiplied by cost per unit .
Sales volume in year 2020= (100-10)% × sales figure for 2019
= 90% × 160,250= 144,225
Cost of goods sold per unit = cost of goods sold in 2019/Sales units in 2019
= 641,000/160250=$4
Cost of goods sold = $4× 144,225 = $576,900
Cost of goods sold = $576,900
The present value of lease payments should be used by the lessee in determining the amount of a lease liability under a lease classified by the lessee as a(n) Finance Lease Operating Lease Finance Lease Yes Operating Lease Yes Finance Lease Yes Operating Lease No Finance Lease No Operating Lease No Finance Lease No Operating Lease Yes
Answer:
Finance Lease Yes Operating Lease Yes
Explanation:
The lease payments present value should be used for measuring the liability under a capital lease. In the case of the operating lease, the liability when occured at the time when the rent expense should be recorded but not be paid. In addition to this, it is recorded at the actual value of cash that should be paid not the present value
Therefore the first option is correct
What is NOT an advantage of a corporation?
A Board and shareholders may make decision with little direct knowiedge of business
B Can continue operations indefinitely (business has a long life)
C .People can buy and sell their shares of ownership without the business ending
D Easy to raise capital by selling stocks or bonds
Answer:
a
Explanation:
I think , hope this helps
Finances and lack of money are the main reasons that all businesses fail. Suppose your roommate, a Spanish major, tells you they have just inherited the family business from their grandparents. They know you are a business student who is studying entrepreneurship. Describe and explain in 4 separate sentences how the following 4 financial analysis tools can help the small business owner avoid going out of business due to lack of money.
1. Income statement - what is it and what information does it provide to the business owner?
2. Balance sheet - what is it and what information does it provide to the business owner?
3. Statement of cash flows - what is it and what information does it provide to the business owner?
4. Ratio analysis - what is it and what information does it provide to the business owner?
Answer:
See the explanation below.
Explanation:
1. Income statement - what is it and what information does it provide to the business owner?
An income statement can be described as a financial statement that provides information about how profitable a business was during a particular reporting period.
An income statement provides to the business owner information about revenue, expenses, income and losses of his/her business.
2. Balance sheet - what is it and what information does it provide to the business owner?
A balance sheet can be described as a financial statement shows the level of financial position of a company at a specific point in time.
A balance sheet provides to the business owner information about assets, liabilities and owner's equity of his/her business at a specific point in time.
3. Statement of cash flows - what is it and what information does it provide to the business owner?
A statement of cash flows can be described as a financial statement that provides the summary of how much cash and cash equivalents enter and leave a business.
A statement of cash flows provides to the business owner information about cash flows from operating activities, cash flows from investing activities, and cash flows from financing activities of his/her business.
4. Ratio analysis - what is it and what information does it provide to the business owner?
A ratio analysis or financial ratio analysis can be described as a relative magnitude of two numerical values that selected the financial statements of a business.
A ratio analysis provides to the business owner information that enables him to gain insight into the liquidity, operational efficiency, and profitability of his/her business.