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.
If the spending multiplier equals 5 and equilibrium income is $2 billion below potential GDP, then _____ to reach the potential real GDP level. Group of answer choices total spending needs to increase by $0.1 billion nominal GDP needs to increase by $1.2 billion total spending needs to decrease by $6 billion nominal GDP needs to decrease by $12 billion total spending needs to increase by $0.4 billion
Answer:
total spending needs to increase by $0.4 billion
Explanation:
Calculation to determine how much total spending needs to increase or decrease
Using this formula
Increase or Decrease in total spending=Equilibrium income/Spending multiplier
Let plug in the formula
Increase or Decrease in total spending=$2 billion/5
Increase or Decrease in total spending=$0.4 billion
Therefore If the spending multiplier equals 5 and equilibrium income is $2 billion below potential GDP, then TOTAL SPENDING NEEDS TO INCREASE BY $0.4 BILLION to reach the potential real GDP level.
Why is compound interest preferable to simple interest?
Compound interest pays at least double the interest on the principal
Compound interest is paid by the week or by the month, not only on
O Compound interest is based on the entire principal, not just a percer
O Compound interest pays interest on the principal and the interest ea
Answer:
Compound Interest, when it comes to investing, compound interest is better since it allows funds to grow at a faster rate than they would in an account with a simple interest rate. Compound interest comes into play when you're calculating the annual percentage yield.
Explanation:
I hope this helped a lot bro. Hope you make a 100 on your test or quiz. Can I get brainiest.
Answer:
D.) Compound interest pays interest both on the principal and the interest earned in each period.
Explanation:
On Edg
You expect Technomess Company common stock to pay a dividend of $2.40 one year from now. You can buy the stock now for $52, and you plan to sell the stock at the end of one year. Given the risk of the stock, your required rate of return is 16%. For what price would you need to sell your stock in one year in order to earn your required rate of return
Answer:
The stock price = $57.92
Explanation:
The return on a stock is the sum of the capital gains(loss) plus the dividends earned.
Capital gain is the difference between he value of the stocks when sold and the cost of the shares when purchased.
Total shareholders Return =
(Capital gain/ loss + dividend )/purchase price × 100
16% = ((x-52) + 2.40)/52
0.16×52 = (x-52) + 2.40
8.32 = X- 52 + 2.40
52+8.32-240=X
57.92 = X
$57.92= X
The stock would need to be sold for = $57.92
Determining Whether to Capitalize or Expense For each of the following items, indicate whether the cost should be capitalized (C) or expensed (E) immediately: a. Paid $1,200 for routine maintenance of machinery b. Paid $5,400 to rent equipment for two years c. Paid $2,000 to equip the production line with new instruments that measure quality d. Paid $20,000 to repair the roof on the building e. Paid $1,600 to refurbish a machine, thereby extending its useful life f. Purchased a patent for $5,000
Answer:
To Capitalize or Expense
a. Expense
b. Expense $2,700 Capitalize $2,700
c. Capitalize
d. Expense
e. Capitalize
f. Capitalize
Explanation:
1) Data and Analysis:
a. Maintenance Expense $1,200 Cash $1,200
b. Rent Expense $2,700 Prepaid Rent $2,700 Cash $5,400
c. Equipment $2,000 Cash $2,000
d. Building Repair Expense $20,000 Cash $20,000
e. Equipment Extension $1,600 Cash $1,600
f. Patent $5,000 Cash $5,000
2) All costs incurred for a period are expensed in the period in which the resources are consumed. If the resources will not be consumed in a period, the costs are capitalized. Such costs are then expensed periodically through depreciation (for tangible assets), amortization (for intangible assets), or depletion (for acquired natural resources).
Teecorp Company provides the following ABC costing information: Activities Total Costs Activity-cost drivers Labor $320,000 8,000 hours Gas $36,000 6,000 gallons Invoices $40,000 2,500 invoices Total costs $396,000 The above activities used by their three departments are: Lawn Department Bush Department Plowing Department Labor 2,500 hours 1,200 hours 4,300 hours Gas 1,700 gallons 800 gallons 3,500 gallons Invoices 1,600 invoices 400 invoices 500 invoices How much of the labor cost will be assigned to the Bush Department
Answer:
7000,000
Explanation:
Rizzo Company has debentures ($1,000 par) outstanding that are convertible into the company's common stock at a price of $25. The convertibles have a coupon interest rate of 8% and mature in 12 years. In addition, the convertible debenture is callable at 110% of the par value. Straight debt of equivalent risk is yielding 12%. The company's common stock is selling at $22 per share. The company has a marginal tax rate of 40%. Determine the conversion value of the issue
Answer:
A. $880
B. -$752.23
Explanation:
Calculation to determine the conversion value of the issue
First step is to calculate the Conversion ratio using this formula
Conversion ratio=Per value of security/ Conversion price
Let plug in the formula
Conversion ratio=$1,000/$25
Conversion ratio=40
Now let determine the Conversion value using this formula
Conversion value =Conversion ratio*Conversion price
Let plug in the formula
Conversion value=40*$22 per share
Conversion value=$880
Therefore the conversion value of the issue is $880
B. Calculation to determine the Straight bond value of the issue
Using financial calculator to the Present Value (PV)
PMT=8%*1,000=80
N=12 years
1/Y=12%
FV=1,000
PV=-$752.23
Therefore the Straight bond value of the issue is -$752.23
Retirement Investment Advisors, Inc., has just offered you an annual interest rate of 6 percent until you retire in 40 years. You believe that interest rates will increase over the next year and you would be offered 6.6 percent per year one year from today. If you plan to deposit $18,000 into the account either this year or next year, how much more will you have when you retire if you wait one year to make your deposit
Answer:
$32,529.54
Explanation:
To determine the answer the difference in future value of the investment options have to be determined
The formula for calculating future value:
FV = P (1 + r)^n
FV = Future value
P = Present value
R = interest rate
N = number of years
First option
$18,000 x (1.06)^40 = $185,142.92
Second option
$18,000 x (1.066)^39 = $217,672.46
Difference in future values = $217,672.46 - $185,142.92 = $32,529.54
As a result of a decrease in the demand for U.S. dollars, there has been depreciation in the value of the U.S. dollar relative to Macedonian dinars. The depreciation in the U.S. dollar has benefitted some groups but harmed others. Indicate which of the groups are winners and which are losers from the standpoint of the depreciation of the U.S. dollar.
a. A. Todd, American, to visit Macedonia spring brew
b. An investment bank in Macedonia that is interested in purchasing U.S.
c. Goodyear, a U.S. based firm, selling car tires Macedonia
d. A family from Macedonia visiting relatives in the U.S
e. A firm from Macedonia selling in the US.
f. U .S. based Hewlett-Packard, which is a tech purchasing a high tech company in Macedonia
Answer:
A. Todd, American, to visit Macedonia spring brew
Explanation:
Todd is a loser due to the depreciation of the U.S. dollar because now he will need more dollars to buy a comparative amount of South Korea won. His trip will now be more expensive.
An investment bank in South Korea, interested in purchasing U.S. government bonds - winner
The investment bank will exchange fewer wons for U.S. dollars than before. Buying government bonds will now be cheaper for them.
Goodyear, a firm based in the United States, sells car tires in South Korea - winner
Goodyear will likely sell more cars because for its South Korean customers, the cars are now cheaper since the value of the dollar has depreciated against the currency that they hold.
A family from South Korea visits relatives in the United States - winner
The South Korean family will exchange fewer wons for more U.S. dollars, making their trip cheaper.
A firm from South Korea sells handbags in the United States - loser
The handbags will now be more expensive for their American customers, likely causing a loss in sales revenue for the firm.
An electronics manufacturer in the United States, purchases a high tech company in South Korea - loser
The cost of the high-tech South Korean company is now higher for the American manufacturer because more dollars had to be exchanged for wons before the purchase.
Ivanhoe Inc. uses the conventional retail method to determine its ending inventory at cost. Assume the beginning inventory at cost (retail) were $383500 ($584000), purchases during the current year at cost (retail) were $3208000 ($4993600), freight-in on these purchases totaled $149500, sales during the current year totaled $4466000, and net markups were $404000. What is the ending inventory value at cost? Hint: Round intermediate calculation to 3 decimal places, e.g. 0.635 and final answer to 0 decimal places.
Answer:
$962406
Explanation:
Calculation to determine the ending inventory value at cost
Ending inventory value at cost=
($584000 + $4993600 + $404000 - $4466000)
*[($383500 + $3208000 + $149500) ÷ ($584000 + $4993600 + $404000)]
Ending inventory value at cost=$1,515,600*($3,741,000÷$5,891,600)
Ending inventory value at cost=$1,515,600*0.635
Ending inventory value at cost=$962406
Therefore the ending inventory value at cost is $962406
A reserve clause binds a professional athlete to a sports franchise even if the player does not have a contract with the team that retains the rights to the player. In other words, the player can only play for a single team and other teams may not bid for the player's services even in the absence of a contract. Major League Baseball was forced to outlaw reserve clauses in 1975. As a result of the ban, we would expect that
Answer: D. players in the major leagues would be paid more than their marginal product.
Explanation:
When the reserve clause was in effect, a team that had the rights to a player could pay the player what they wanted or at least according to their marginal product depending on how good they were without having to worry about other teams offering more money to the player because they could just decide not to let the player go.
When this clause was removed, this changed. Other teams could bid for players so bidding wars allowed major league players to make more money from either their team which would be forced to increase their salaries, or from other teams who would entice the players to move with higher salaries. This led to major league players being paid more than their marginal product.
Mature birds are better than young birds when used for ___.
Answer:
what the question choices?
Partially correct answer. Your answer is partially correct. Try again. On January 10, 2019, Sheffield Corp. sold merchandise on account to Concord Co. for $21,600, n/30. On February 9, Concord Co. gave Sheffield Corp. a 12% promissory note in settlement of this account. Prepare the journal entry to record the sale and the settlement of the account receivable. (Omit cost of goods sold entries.) (
Answer:
Dr Accounts receivable $21,600
Cr Sales revenue $21,600
Dr Notes receivable $21,600
Cr Accounts receivable $21,600
Explanation:
Preparation of the journal entry to record the sale and the settlement of the account receivable
Dr Accounts receivable $21,600
Cr Sales revenue $21,600
(Being to record Sales revenue)
Dr Notes receivable $21,600
Cr Accounts receivable $21,600
(Being to record settlement of the account receivable)
Roth Inc. experienced the following transactions for Year 1, its first year of operations: Issued common stock for $80,000 cash. Purchased $240,000 of merchandise on account. Sold merchandise that cost $154,000 for $306,000 on account. Collected $252,000 cash from accounts receivable. Paid $225,000 on accounts payable. Paid $54,000 of salaries expense for the year. Paid other operating expenses of $43,000. Roth adjusted the accounts using the following information from an accounts receivable aging schedule:______.
Number of Days Past Due Amount Percent Likely to Be Uncollectible Allowance Balance
Current $ 32,400 0.01
0−30 13,500 0.05
31−60 2,700 0.10
61−90 2,700 0.20
Over 90 days 2,700 0.50
a. Record the above transactions in general journal form and post to T-accounts.
b. Prepare the income statement, statement of changes in stockholders’ equity, balance sheet, and statement of cash flows for Roth Inc. for Year 1.
Answer:
Roth Inc.
a. General Journal Debit Credit
1. Cash $80,000
Common stock $80,000
To record issuance of common stock for cash.
2. Inventory $240,000
Accounts payable $240,000
To record the purchase of goods on account.
3. Cost of goods sold $154,000
Inventory $154,000
To record the cost of goods sold.
3. Accounts receivable $306,000
Sales revenue $306,000
To record the sale of goods on account.
4. Cash $252,000
Accounts receivable $252,000
To record the receipt of cash on account.
5. Accounts payable $225,000
Cash $225,000
To record the payment of cash on account.
6. Salaries expense $54,000
Cash $54,000
To record the payment of salaries.
7. Operating expenses $43,000
Cash $43,000
To record the payment of other operating expenses.
8. Bad Debts Expense $3,159
Allowance for Doubtful Accounts $3,159
To record bad debts expense for the year.
T-accounts:
Cash
Account Titles Debit Credit
Common stock $80,000
Accounts receivable $252,000
Accounts payable $225,000
Salaries expense 54,000
Operating expenses 43,000
Balance 10,000
Accounts receivable
Account Titles Debit Credit
Sales revenue $306,000
Cash $252,000
Balance 54,000
Inventory
Account Titles Debit Credit
Accounts payable $240,000
Cost of goods sold $154,000
Balance 86,000
Accounts payable
Account Titles Debit Credit
Inventory $240,000
Cash $225,000
Balance 15,000
Common stock
Account Titles Debit Credit
Cash $80,000
Sales revenue
Account Titles Debit Credit
Accounts receivable $306,000
Cost of goods sold
Account Titles Debit Credit
Inventory $154,000
Salaries expense
Account Titles Debit Credit
Cash $54,000
Operating expenses
Account Titles Debit Credit
Cash $43,000
Bad Debts Expense
Account Titles Debit Credit
Allowance for
Doubtful Accounts $3,159
Allowance for Doubtful Accounts
Account Titles Debit Credit
Bad Debts Expense $3,159
b. Income Statement for the year 1 ended December 31:
Sales revenue $306,000
Cost of goods sold 154,000
Gross profit $152,000
Expenses:
Salaries expense 54,000
Operating expense 43,000
Bad debts expense 3,159 $100,159
Net operating income $51,841
Statement of changes in stockholders' equity:
Common Stock $80,000
Net operating income 51,841
Total Equity $131,841
Balance Sheet as of December 31:
Assets:
Cash $10,000
Accounts receivable 54,000
Allowance for
doubtful accounts 3,159 50,841
Inventory 86,000
Total assets $146,841
Liabilities and Equity:
Accounts payable $15,000
Equity $131,841
Total liabilities and equity $146,841
Statement of Cash Flows for the year 1 ended December 31:
Operating activities:
Net operating income $51,841
Add non-cash expense 3,159
Working-capital:
Accounts receivable -54,000
Inventory -86,000
Accounts payable 15,000
Net operating cash flow $(70,000)
Financing activities:
Common stock $80,000
Net cash flows $10,000
Reconciliation:
Ending cash balance $10,000
Beginning cash balance 0
Increase in net cash flows $10,000
Explanation:
a) Data and Transaction Analysis:
1. Cash $80,000 Common stock $80,000
2. Inventory $240,000 Accounts payable $240,000
3. Cost of goods sold $154,000 Inventory $154,000
3. Accounts receivable $306,000 Sales revenue $306,000
4. Cash $252,000 Accounts receivable $252,000
5. Accounts payable $225,000 Cash $225,000
6. Salaries expense $54,000 Cash $54,000
7. Operating expenses $43,000 Cash $43,000
8. Bad Debts Expense $3,159 Allowance for Doubtful Accounts $3,159
Aging of Accounts Receivable:
Number of Days Amount Percent Likely to Allowance
Past Due Be Uncollectible Balance
Current $ 32,400 0.01 $324
0−30 13,500 0.05 675
31−60 2,700 0.10 270
61−90 2,700 0.20 540
Over 90 days 2,700 0.50 1,350
Total $54,000 $3,159
Trial balance
Cash $10,000
Accounts receivable 54,000
Allowance for doubtful accounts $3,159
Inventory 86,000
Accounts payable 15,000
Common stock 80,000
Sales revenue 306,000
Cost of goods sold 154,000
Salaries expense 54,000
Operating expense 43,000
Bad debts expense 3,159
Totals $404,159 $404,159
A general rule in contract law is that for a promise to be enforce by a court, there must be
Answer:
a written agreement
Explanation:
A contract is a form of a written agreement.
A general rule in contract law is that for a promise to be enforced by a court, there must be a written agreement. Thus option D is appropriate.
What is a Law?A law is referred to as a set of rules and regulations, guidelines given in the constitution and implemented by the ruling government to maintain cordial relationships among people and helps to conduct the functioning of any country properly.
A contract is referred to as a written agreement that is enforceable by the law and has mutual consent of both the contract where all the features of a valid contract are fulfilled.
The feature of a valid contract is that there must be two-party having mutual consent to participate in the agreement in exchange for something in return with lawful consideration.
Therefore, option D is appropriate.
Learn more about Contract, here:
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A discount term of 20/15/5 means: Group of answer choices based on the timing of payment, 1 of the 3 discount options can be applied based on the size of the order, 1 of the 3 options can be applied if all conditions are met, all 3 discounts can be applied to the list price all three discounts are possible but it is rare that all three are able to be applied
Answer: If all conditions are met, all 3 discounts can be applied to the list price
Explanation:
This is a series discount which means the following:
20 is for 20% off the list price which leaves 80%.
15 is for 15% off which leaves 85% and,
5 is for 5% off which leaves 95%.
If all conditions placed by the seller are met, all 3 discounts can be applied to the list price.
They are applied by multiplying the discounted price proportions.
= 0.8 * 0.85 * 0.95
= 0.646 will be the discounted price.
Sexton, Corp., has projected the following sales for the coming year: Q1 Q2 Q3 Q4 Sales $ 860 $ 940 $ 900 $ 1,000 Sales in the year following this one are projected to be 15 percent greater in each quarter. a. Calculate payments to suppliers assuming that the company places orders during each quarter equal to 30 percent of projected sales for the next quarter. Assume that the company pays immediately. (Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.) b. Calculate payments to suppliers assuming a 90-day payables period. (Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.) c. Calculate payments to suppliers assuming a 60-day payables period.
Answer:
Q1 Q2 Q3 Q4
a. Payment of accounts ($) 258.00 282.00 270.00 300.00
b. Payment of accounts ($) 258.00 282.00 270.00 300.00
c. Payment of accounts ($) 258.00 282.00 270.00 300.00
Explanation:
Given:
Q1 Q2 Q3 Q4
Sales ($) 860 940 900 1,000
Therefore, we have:
a. Calculate payments to suppliers assuming that the company places orders during each quarter equal to 30 percent of projected sales for the next quarter. Assume that the company pays immediately. (Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.)
This is done as follows:
Q1 Q2 Q3 Q4
Order (30% of Sales) ($) 258.00 282.00 270.00 300.00
Payment of accounts ($) 258.00 282.00 270.00 300.00
b. Calculate payments to suppliers assuming a 90-day payables period. (Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.)
A 90-day payables period implies that the payment has be made within the next 90 days or within one quarter or the same quarter. Therefore, we have:
Q1 Q2 Q3 Q4
Order (30% of Sales) ($) 258.00 282.00 270.00 300.00
Payment of accounts ($) 258.00 282.00 270.00 300.00
c. Calculate payments to suppliers assuming a 60-day payables period.
A 60-day payables period implies the payment for the Order in each of the quarters has to be made in the same quarter.
Therefore, we have:
Q1 Q2 Q3 Q4
Order (30% of Sales) ($) 258.00 282.00 270.00 300.00
Payment of accounts ($) 258.00 282.00 270.00 300.00
Note:
It can be observed that the answer look the same for all the questions.
5
5
Learning Task 4 Create a poster advertisement that demonstrates road
hely. Use a white cortolina for this project-based output
er
Guide for critiquing the poster advertisement.
Assessment Citteria
Information on road safety is shown
Measures to prevent rood accident is highlighted
Pictures or illustrations used are appropriate for the content.
Teds casy to read and understand
Execfon is neat and clear
Reglember that the two different forces discussed in this lesson are
Gravity is a force of attraction of two bodies because of their masses,
Friction is a force that opposes movement. It is always opposite to the
direction of the motion
Answer:
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Sanders Corporation has the following shares outstanding: 8,000 shares of $50 par value, six percent preferred stock and 50,000 shares of $1 par value common stock. The company has $328,000 of retained earnings. At year-end, the company declares its regular $3 per share cash dividend on the preferred stock and a $2.2 per share cash dividend on the common stock. Three weeks later, the company pays the dividends.
a. Prepare the journal entry for the declaration of the cash dividends.
b. Prepare the journal entry for the payment of the cash dividends.
Answer:
A. Dr Cash $134,000
Cr Dividend payable-preferred stock $24,000
Cr Dividend payable-common stock $110,000
b. Dr Dividend payable- preferred stock $24,000
Dr Dividend payable- common stock $110,000
Cr Cash $134,000
Explanation:
a. Preparation of the journal entry for the declaration of the cash dividends.
Dr Cash $134,000
($24,000+$110,000)
Cr Dividend payable-preferred stock $24,000
($3 x 8,000)
Cr Dividend payable-common stock $110,000
($2.20 x 50,000)
( To record declaration of $3 dividend on preferred stock and $2.20 on common stock)
b. Preparation or the journal entry for the payment of the cash dividends.
Dr Dividend payable- preferred stock $24,000
($3 x 8,000)
Dr Dividend payable- common stock $110,000
($2.20 x 50,000)
Cr Cash $134,000
($24,000+$110,000)
(To record payment of dividends on preferred and common stock)
During December, the production department of a process operations system completed and transferred to finished goods a total of 65,000 units of product. At the end of December, 15,000 additional units were in process in the production department and were 80% complete with respect to materials. The beginning inventory included materials cost of $57,500 and the production department incurred direct materials cost of $183,000 during December. Compute the direct materials cost per equivalent unit for the department using the weighted-average method. rev: 10_05_2019_QC_CS-184681 Multiple Choice $3.70. $2.38. $2.82. $3.12. $4.79.
Answer:
$3 per unit
Explanation:
The computation of the direct materials cost per equivalent unit is shown below:
Completed and transferred to finished goods 65,000 units
Equivalent number of additional units in process 15000 units
Beginning inventory material cost $57,500
Direct material cost incurred $183,000
Total direct material cost $240,500 ($57,500 + $183,000)
ANd, the total units is 80,000 (65,000 + 15,000)
So, the direct material cost per equivalent unit is
= $240,500 ÷ 80,000 units
= $3 per unit
Based on the readings: match the following business example with its associated product cost term A businessowner pays for rent and equipment at their office An airline considers the costs of serving food and beverages to its passengers A company considers the costs it pays to its employees A clothing manufacturer buys new machines for its factory A. variable costs B. fixed costs C. fixed cost D. variable costs
Answer:
A business owner pays for rent and equipment at their office ⇒ FIXED COSTs since the amount of rent paid should be the same year after year
An airline considers the costs of serving food and beverages to its passengers ⇒ VARIABLE COSTS since the cost of serving food will increase as the number of passengers increase, or will decrease if the number of passengers decrease
A company considers the costs it pays to its employees ⇒ VARIABLE COSTS since the number of employee can vary and the number of hours worked can also vary
A clothing manufacturer buys new machines for its factory ⇒ FIXED COSTS since the machines are depreciated at a predetermined rate that doesn't depend on the factory's output
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.)
Price per unit Cost per unit Unit sales per month
Current Policy $ 93 $ 44 2.675
New Policy ? $ 44 2,750
Answer:
The Tradition Corporation
The break-even price per unit that should be charged under the new credit policy is $95.23.
Explanation:
a) Data and Calculations:
Required rate of return = 2.4% per period
Price Cost Unit Sales Total Sales Total Cost
per unit per unit per month Revenue
Current Policy $ 93 $ 44 2,675 $248,775 $117,700
New Policy ? $ 44 2,750
New price = $93 * 1.024 = $95.23
b) The new price of $95.23 with the required rate of return will ensure that revenue is not lost as a result of the new credit policy. This implies that all things being equal, The Tradition Corporation would still be in a position to make the normal revenue that it was making under the cash policy.
why do private and public sector cannot br looked up as two separate entities
Answer:
The private sector and the public sector cannot be viewed as separate entities because the two of them are closely intertwined.
Explanation:
The public sector defines the rules and conditions under which the private sector develops, and the private sector contributes to the finances of the private sector.
For example, a regulatory agency in an economic sector sets the rules of the mining economic sector in a country, and private mining companies abide by these rules in order to develop their business activity. Part of the revenue earned from these business activities are taken as taxes by the public sector, in order to finance the regulatory agency.
Sometimes, the public sector can also consists in public companies that can work together with private firms in common projects.
Michelle is an active participant in the rental condominium property she owns. During the year, the property generates a ($17,500) loss; however, Michelle has sufficient tax basis and at-risk amounts to absorb the loss. If Michelle has $120,000 of salary, $10,500 of long-term capital gains, $3,500 of dividends, and no additional sources of income or deductions, how much loss can Michelle deduct?
Answer: $8,000
Explanation:
A special rule allows Michelle to classify up to $25,000 as losses against her nonpassive income.
If Michelle's modified adjusted gross income (MAGI) exceeds $100,000 however, the amount that exceeds the $100,000 will be reduced by 50% and deducted from the exemption allowed.
Loss deduction = Exemption allowed - [(Nonpassive income - MAGI limit) * 50%)
= 25,000 - [ (120,000 + 10,500 + 3,500 - 100,000) * 50%]
= $8,000
If you could start your own business, WHAT type of business would you start and WHY? Be sure your idea is a business and not a charity (animal shelter, helping homeless, etc.) The goal of your business should be to make a profit. Please answer in 3-4 sentences. "Henry Ford wanted to produce cars more efficiently; Oprah Winfrey wanted to help people make their lives better; Steve Jobs wanted to provide customers with user- friendly personal computers and new entertainment ideas." I А.
Tolbotics Inc. is considering a three-year project that will require an initial investment of $44,000. If market demand is strong, Tolbotics Inc. thinks that the project will generate cash flows of $29,500 per year. However, if market demand is weak, the company believes that the project will generate cash flows of only $2,000 per year. The company thinks that there is a 50% chance that demand will be strong and a 50% chance that demand will be weak.
If the company uses a project cost of capital of 14%, what will be the expected net present value (NPV) of this project if the company is ignoring the timing option?
a. -$3,435
b. -$3,779
c. -$3,092
d. -$3,607
Answer:
Expected value NPV =$-,7434
Explanation:
The Expected Net present value (NPV) is the difference between the Present value (PV) of Expected value cash inflows and the PV of cash outflows. A positive NPV implies a good and profitable investment project and a negative figure implies the opposite.
Expected value NPV = PV of expected value cash inflow - PV of cash outflow
Present value of cash inflow:
The expected cash in flows is the sum of the cash inflows multiplied by their respective probabilities. For Tolbotics it is calculated as follows:
Expected cash inflows=m (29,500× 0.5) + (2,000× 0.5)=15,750
NPV = 15,750× (1-1.14^(-3)/0.14) - 44,000=-7434.
Expected value NPV =$-7,434
Exercise 13-06 a-b Here are the comparative income statements of Sarasota Corp.. SARASOTA CORP. Comparative Income Statement For the Years Ended December 31 2020 2019 Net sales $588,000 $490,000 Cost of goods sold 449,820 402,780 Gross Profit 138,180 87,220 Operating expenses 85,260 46,550 Net income $ 52,920 $ 40,670 (a) Prepare a horizontal analysis of the income statement data for Sarasota Corp., using 2019 as a base
Answer:
Horizontal Analysis of the Income Statement
For the Year Ended December 31, 2020:
Percentage
Increase
Net sales $588,000 20%
Cost of goods sold 449,820 11.68%
Gross Profit 138,180 58.43%
Operating expenses 85,260 83.16%
Net income $ 52,920 30.12%
Explanation:
a) Data and Calculations:
SARASOTA CORP.
Comparative Income Statement
For the Years Ended December 31
2020 2019 Increase
Net sales $588,000 $490,000 $98,000
Cost of goods sold 449,820 402,780 47,040
Gross Profit 138,180 87,220 50,960
Operating expenses 85,260 46,550 38,710
Net income $ 52,920 $ 40,670 12,250
Net Sales increase = $98,000/$490,000 * 100 = 20%
Cost of goods sold = $47,040/$402,780 * 100 = 11.68%
Gross profit = $50,960/$87,220 * 100 = 58.43%
Operating expenses = $38,710/$46,550 * 100 = 83.16%
Net Income = $12,250/$40,670 * 100 = 30.12%
b) Horizontal Analysis (%) = [(Amount in 2020 – Amount in 2019) / Amount in 2019] * 100. The analysis records the growth trend between the elements of the base year and the comparison year.
Mongar Corporation applies manufacturing overhead to products on the basis of standard machine-hours. Budgeted and actual overhead costs for the most recent month appear below:
Original Budget Actual Costs
Variable overhead costs:
Supplies $7,980 $8,230
Indirect labor 29,820 29,610
Total variable manufacturing overhead cost $37,800 $37,840
The original budget was based on 4,200 machine-hours. The company actually worked 4,350 machine-hours during the month and the standard hours allowed for the actual output were 4,190 machine-hours. What was the overall variable overhead efficiency variance for the month?
a. $130 Unfavorable
b. $950 Favorable
c. $1,440 Unfavorable
d. $1,310 Favorable
Answer:
c. $1,440 Unfavorable
Explanation:
Variable overhead efficiency variance = (Standard hours - Actual working hours) * Standard Rate
Variable overhead efficiency variance = ($4,190 hours - $4,350 hours)*($37,800/4,200 hours)
Variable overhead efficiency variance = ($4,190 hours - $4,350 hours)*$9 per hour
Variable overhead efficiency variance = 160 hours*$9 per hour
Variable overhead efficiency variance = $1,440 Unfavorable
On November 4, 2018, Blue Company acquired an asset (27.5-year residential real property) for $200,000 for use in its business. In 2018 and 2019, respectively, Blue took $642 and $5,128 of cost recovery. These amounts were incorrect; Blue applied the wrong percentages (i.e., those for 39-year rather than 27.5-year property). Blue should have taken $910 and $7,272 of cost recovery in 2018 and 2019, respectively. On January 1, 2020, the asset was sold for $180,000. If required, round all computations to the nearest dollar.
a. The adjusted basis of the asset at the end of 2017 is $.
b. The cost recovery deduction for 2018 is $.
c. The__________ on the sale of the asset in 2018 is $
Answer:
A. $191,818
B. $303
C. $11,515 loss
Explanation:
A) Calculation to determine what The adjusted basis of the asset at the end of 2017 is
2017 Asset's cost $200,000
Less recovery costs for 2017 and 2018
($910 + $7,272 = $8,182
December 31, 2018 $191,818
($200,000 - $8,182)
Therefore The adjusted basis of the asset at the end of 2017 is $191,818
B) Calculation to determine what The cost recovery deduction for 2018 is
Recovery cost = $200,000 x (1 / 27.5) x (0.5 / 12)
Recovery cost = $200,000 x3.636% × .5/12)
Recovery cost = $303
Therefore The cost recovery deduction for 2018 is $303
C) the asset's basis on the date of sale is = $191,818 - $303 = $191,515
Sales price - asset basis = $180,000 - $191,515 = $11,515 loss
Blue Company lost $11,515 when it sold the asset.
$.
c. The__________ on the sale of the asset in 2018 is $
Patricia purchased a home on January 1, 2017 for $1,420,000 by making a down payment of $100,000 and financing the remaining $1,320,000 with a 30-year loan, secured by the residence, at 6 percent. During year 2017 and 2018, Patricia made interest-only payments on the loan of $79,200. What amount of the $79,200 interest expense Patricia paid during 2018 may she deduct as an itemized deduction
Answer: $60,000
Explanation:
The maximum amount deductible is based on a mortgage of $1,000,000 and the interest rate of the mortgage being paid.
Interest on $1,000,000 at 6% is:
= 6% * 1,000,000
= $60,000
Only $60,000 of the $79,200 may be deducted.
In January of the current year, Dora made a gift of stock to her granddaughter. At the time of the gift, the stock was worth $15,000. Several months later in the same year after the gift, a $500 dividend was declared on the stock and paid to Dora's granddaughter. What amount must Dora's granddaughter include in her gross income for the current year
Answer:
$500
Explanation:
Based on the information given we were told that the DIVIDEND of the amount of $500 which was declared on the stock was paid to Dora's granddaughter Several months later, which means that the amount that Dora's granddaughter must include in her GROSS INCOME for the current year will be the dividend amount of $500 that was paid to Dora's granddaughter.
Therefore the amount that Dora's granddaughter must include in her gross income for the current year is $500