Answer:
450 radios 50 televisions in radioland and 50 radios 450 televisions in Teeveeland.
Explanation:
In radioland 5 radios are equivalent to one television. Then 1 radio will be equivalent to 0.2 of television. The opportunity cost for each radio is 0.2. In teeveeland the cost of 1 radio is 5 televisions. Hence radioland has comparative advantage in producing radios and Teeveeland has comparative advantage is producing televisions.
Jim is a manager of a restaurant. He is very concerned with efficiency and goal accomplishment as well as very intent on making employees happy through lots of participation and open-mindedness. Whats the answer?
A. Jim is a high-high style leader.
B. Jim is low in initiating structure and high in consideration.
C. Jim is an impoverished leader.
D. Jim is a compromiser.
Answer:
A. Jim is a high-high style leader.
Explanation:
As in the given situation it is mentioned that Jim would be very concerned with the efficiency and the accomplishment of the goal so this means he is a high-high style leader as these type of leaders would try to collaborate and cooperate in order to motivate for work in an efficient manner so that the company goals could be achieved
hence, the first option is correct
business environment
Answer:
what?
Explanation:
Answer:
I'm sorry is this a question? If so, the only thing I can answer is.. the Market environment which is basicly a business environment is a marketing term and refers to factors and forces that affect a firm's ability to build and maintain successful customer relationships.
Explanation:
sorry if its not what you asked
Craigmont uses the allowance method to account for uncollectible accounts. Its year-end unadjusted trial balance shows Accounts Receivable of $130,500, allowance for doubtful accounts of $925 (credit) and sales of $1,055,000. If uncollectible accounts are estimated to be 7% of accounts receivable, what is the amount of the bad debts expense adjusting entry
Answer:
the amount of bad debt expense for the adjusting entry is $8,210
Explanation:
The computation of the amount of bad debt expense for the adjusting entry is shown below:
= Unadjusted trial balance × estimated percentage - credit balance of allowance for doubtful accounts
= $130,500 × 7% - $925
= $9,135 - $925
= $8,210
Hence, the amount of bad debt expense for the adjusting entry is $8,210
Assume that you have entered into a fixed for fixed currency swap agreement under which every 6 months you agree to pay 3% on a notional of 110M USD and receive 4% on a notional of 100M EUR. On the date you signed the contract the spot exchange rate is 1.1 USD/EUR. Six months later the spot exchange rate is 1.05 USD/EUR. Your actual payment net of what you receive at the first payment date equals to :__________
Answer: -0.55M USD
Explanation:
The payment made will be:
= 3%/2 × 110M USD
= 0.03/2 × 110M USD
= 1.65M USD
The amount received will be:
= 4%/2 × 100M EUR
= 2% × 100M EUR
= 0.02 × 100M EUR
= 2M EUR
Since exchange rate = 1.1 USD/EUR
2M EUR = 2 × 1.1 = 2.2M USD
Therefore, net payment will be:
= 1.65M - 2.2M
= - 0.55M USD
Harrington Corporation produces three products, A, B, and C. Pertinent information on these products is as follows: ProductSelling Price per UnitVariable Cost per UnitFixed Costper UnitDL Hoursper UnitA (Anchor bolts)$4.00 $1.00 $2.00 2 B (Bearings)$3.50 $0.50 $2.00 2 C (Castings)$6.00 $2.00 $3.00 3 There are 150 direct labor hours available. Machine-hour capacity allows 100 anchor bolts, only; 50 bearings, only; 40 casters, only; or any combination of the three that does not exceed the capacity. The direct labor hour constraint for Harrington's linear programming model is: ___________
Answer:
Labour hours constraint : 2a + 2b + 3c ≤ 150
Explanation:
Linear programming is a mathematical model that is used to solve a problem when a firm wants to maximize profit in the midst of multiple resource constraints.
The following steps should be followed:
Step 1: Define the variables
a= the units of product Anchor
b= the units of product Bearing
c= the units of product Casting
Step 2: Define the constraints:
The constraints represent the limitations which could be resource; in this case machine hours and direct labour hours. Since the constraint in focus is labour hours , so we only consider it.
Subject
Constraints: Labour hours : 2a + 2b + 3c ≤ 150
Non-negativity constraints a, b , c ≥ 0
Since the total available labour hours is 150 hours then the total consumption hours can either be equal to or less than 150, but can never be higher than 150.
The labour hours constraint is represented by 2a + 2b + 3c ≤ 150
What are the main tools organizations use to track the progress of a plan?
A. Goals and objectives
O B. Schedules and budgets
C. Customer satisfaction surveys
O D. Sales and revenue
Answer:
schedules and budgets
Explanation:
Which of the following goods is directly counted in GDP? 2) A) the lettuce that Subway purchases for its sandwiches B) a 12-inch Subway sandwich purchased by a student C) the bread that Subway purchases for its sandwiches D) the plastic bags that Subway purchases to wrap its sandwiches 3) Value added equals the market price of the firm's product minus 3) A) depreciation on plant and equipment. B) the price of intermediate goods. C) wages and salaries. D) the price of all factors of production
Answer:
b
b
Explanation:
Gross domestic product is the total sum of final goods and services produced in an economy within a given period which is usually a year
GDP calculated using the expenditure approach = Consumption spending by households + Investment spending by businesses + Government spending + Net export
Net export = exports – imports
When exports exceed import there is a trade deficit and when import exceeds import, there is a trade surplus.
Items not included in the calculation off GDP includes:
1. services not rendered to oneself
2. Activities not reported to the government
3. illegal activities
4. sale or purchase of used products
5. sale or purchase of intermediate products
a 12-inch Subway sandwich purchased by a student is the only final good and thus it would be included in GDP as part of consumption spending on non durable goods
the lettuce, the bread and the plastic bags constitute intermediate goods. Including intermediate goods in the calculation of GDP would lead to double counting
Smelly Perfume Company manufactures and distributes several different products. The company currently uses a plantwide allocation method for allocating overhead at a rate of $7 per direct labor hour. Cindy is the department manager of Department C which produces Products J and P. Department C has $16,200 in traceable overhead. Diane is the department manager of Department D which manufactures Product X. Department D has $11,100 in traceable overhead. The product costs (per case of 24 bottles) and other information are as follows:
J P X
Direct materials $100.00 $ 72.00 $48.00
Direct labor 42.00 31.50 12.00
Overhead 28.00 21.00 14.00
$170.00 $124.50 $74.00
Machine hours 4 2 3
Number of cases (per year) 300 500 600
1. If Smelly changes its allocation basis to machine hours, what is the total product cost per case for Product P?
a. $163.50
b. $144.00
c. $138.15
d. $117.15
2. If Smelly changes its overhead allocation to departmental rates, what is the product cost per case for Product P assuming Departments C and D use direct labor hours and machine hours as their respective allocation bases?
a. $117.15
b. $163.50
c. $131.50
d. $138.15
Answer:
Smelly Perfume Company
1. a. $117.15
2. $115.95
Explanation:
a) Data and Calculations:
J P X Total
Direct materials $100.00 $ 72.00 $48.00
Direct labor 42.00 31.50 12.00
Overhead 28.00 21.00 14.00
$170.00 $124.50 $74.00
Direct labor hours per unit 4 3 2
Total direct labor hours 1,200 1,500 1,200 3,900
Machine hours per unit 4 2 3
Total machine hours 1,200 1,000 1,800 4,000
Number of cases (per year) 300 500 600
Department C D Total
Traceable overheads $16,200 $11,100 $27,300
Product costs (machine hours):
Predetermined overhead rate based on machine hours = $6.825 ($27,200/4,000) per machine hour
J P X
Direct materials $100.00 $ 72.00 $48.00
Direct labor 42.00 31.50 12.00
Overhead (machine hour) 27.30 13.65 20.48
$169.30 $117.15 $80.48
Product costs (departmental overhead rates):
Departmental overhead rates per hour:
Department C $4.15 ($16,200/3,900) per labor hour
Department D $2.78 ($11,100/4,000) per machine hour
J P X
Direct materials $100.00 $ 72.00 $48.00
Direct labor 42.00 31.50 12.00
Overhead 16.60 12.45 8.34
$158.60 $115.95 $68.34
Choose all of the items that are examples of fiscal policy.
a. There is an increase in income tax rates.
b. The Federal Reserve purchases bonds on the open market.
c. The estate tax is repealed.
d. Government increases military spending.
e. Public money is used to build a high-speed train that connects Los Angeles and Las Vegas.
f. The Federal Reserve increases the money supply by decreasing the reserve-ratio requirement.
g. To help domestic firms, government sets a quota on the number of goods that can be imported.
Answer:
A
C
D
E
Explanation:
fiscal policies are steps taken by the government to stimulate the economy in order to cause the economy to move to full employment and price stability more quickly than it might otherwise.
fiscal policies can either be expansionary or contractionary
Expansionary fiscal policy is when the government increases the money supply in the economy either by increasing spending or cutting taxes.
Contractionary fiscal policy reduces money supply
tools of fiscal policy
Taxes
government spending
transfer payments
Do It! Review 15-01 During the current month, Wacholz Company incurs the following manufacturing costs. (a) Purchased raw materials of $17,500 on account. (b) Incurred factory labor of $41,500. Of that amount, $32,400 relates to wages payable and $9,100 relates to payroll taxes payable. (c) Factory utilities of $3,400 are payable, prepaid factory property taxes of $2,640 have expired, and depreciation on the factory building is $8,400. Prepare journal entries for each type of manufacturing cost.
Answer:
Item (a)
Debit : Raw Materials Item $17,500
Credit : Accounts Payable $17,500
Item (b)
Debit : Work in Process - Factory Wages $41,500
Credit : Wages Payable $41,500
Item (c)
Debit : Factory Utilities $3,400
Credit : Accounts Payable $3,400
Item (d)
Debit : Work in Process - Property taxes $2,640
Credit : Prepaid Property taxes $2,640
Item (e)
Debit : Work in Process - Depreciation expense $8,400
Credit : Accumulated depreciation $8,400
Explanation:
When no immediate payment of cash is made for a cost incurred, we raise a Liability - Accounts Payable.
What is the main goal of career and technical student organizations (CTSOs)? How do they help students achieve their goals?
Answer:
This is a two part question and therefore has been answered in two separate headings below.
Explanation:
Main Goal of CTSOs
Career and technical student organizations (CTSOs) goal is to strengthen student learning by using methods such as real-life applications, text book instructions, personal and leadership development skills.
This means that their work forms as an essential part of the classroom syllabus and guide, which in return helps to build student's career skills and views through taking part in these sessions and applying them in real life scenarios and/or work experience through Career program.
Help Students to Achieve their Goals
Career and technical student organizations (CTSOs) helps students achieve their goals by providing them a career path, study program and opportunities in order to gain the knowledge, skills and abilities that are needed to be successful in their career by way of CTSOs programs, events and activities.
Furthermore, they create opportunities for the students to participate in leadership level positions at local, state and national level and to take part in conferences of leadership development in order to interact with other students as wells as professionals and experienced individuals.
Answer:
The guy above is correct
Explanation:
Have a nice day man, be safe.
Neap, spring, high, and low are all types of ____________________.
Clinicke Inc. sells merchandise of $800,000 in 2020 that includes a two-year limited warranty against manufacturing defects as part of the selling price. Warranty costs are estimated to be 1% of sales. If the company incurred $2,200 of actual costs in responding to warranty claims in 2020 (related to 2020 sales), how much should Clinicke record in warranty expense for 2020
Answer:
the amount recorded in the warranty expense is $8,000
Explanation:
The computation of the amount recorded in the warranty expense is shown below:
= Sale value of merchandise inventory × estimated percentage
= $800,000 × 1%
= $8,000
hence, the amount recorded in the warranty expense is $8,000
So the above formula should be applied
Direct material budget. Inglenook Co. produces wine. The company expects to produce 2,500,000 two-liter bottles of Chablis in 2015. Inglenook purchases empty glass bottles from an outside vendor. Its target ending inventory of such bottles is 80,000; its beginning inventory is 50,000. For simplicity, ignore breakage. Compute the number of bottles to be purchased in 2015.
Answer:
2,530,000 bottles
Explanation:
Regarding the above information, we will compute the number of bottles to be purchased in 2015 as seen below
Purchase in units = Usage + Desired ending material inventory units - Beginning inventory units
Purchase in units = 2,500,000 + 80,000 - 50,000
Purchase in units = 2,530,000
Therefore, the number of bottles to be purchases in 2015 is 2,530,000
Cora purchased a hotel building on May 17, 2020, for $3,000,000. Determine the cost recovery deduction for 2021. a.$76,920 b.$69,000 c.$48,150 d.$59,520
Answer: $76920
Explanation:
Firstly, we should note that the hotel building is simply non residential and then qualifies to be part of 39 year property.
Then, the cost of recovery will be:
= 1/39 × Cost of the hotel
= 1/39 × $3,000,000
= $76,920
Therefore, the cost recovery deduction for 2021 is $76,920
Sheen Co. manufacturers laser printers. It has outlined the following overhead cost drivers: Overhead Costs PoolCost DriverOverhead Cost Budgeted Level for Cost Driver Quality controlNumber of inspections$77,000 1,100 Machine operationMachine hours 153,000 1,500 Materials handlingNumber of batches 1,200 30 Miscellaneous overhead costDirect labor hours 57,000 5,700 Sheen Co. has an order for 1,000 laser printers that has the following production requirements: Number of inspections295 Machine hours240 Number of batches6 Direct labor hours770 Using activity-based costing, applied machine operation overhead for the 1,000 laser printers order is: Multiple Choice
Answer:
Total allocated costs= $53,070
Explanation:
First, we need to calculate the allocation rates using the following formula:
Predetermined manufacturing overhead rate= total estimated overhead costs for the period/ total amount of allocation base
Quality control= 77,000 / 1,100 = $70 per inspection
Machine operation= 153,000 / 1,500 = $102 per machine hour
Materials handling= 1,200 / 30 = $40 per batch
Miscellaneous overhead cost= 57,000 / 5,700= $10 per labor hour
Now, we can allocate overhead:
Allocated MOH= Estimated manufacturing overhead rate* Actual amount of allocation base
Quality control= 70*295= 20,650
Machine operation= 102*240= 24,480
Materials handling= 40*6= 240
Miscellaneous overhead cost= 10*770= 7,700
Total allocated costs= $53,070
During 2018, Jacobsen wrote off $18,000 in receivables and recovered $6,000 that had been written off in prior years. Jacobsen's December 31, 2017, allowance for doutbful accounts was $40,000. What is the appropriate year-end adjusting entry Jacobson must use to record bad debts expense and update the allowance for doubtful accounts on December 31, 2018
Answer: Debit: Bad debt expense $21400
Credit: Allowance for doubtful debt $21400
Explanation:
Based on the information given, the bad debt expense will be:
= 49400- (40000-18000+6000)]
= 49400 - 28000
= 21,400
The bad debt expenses of $21400 will be debited
The Allowance for doubtful Accounts of $21400 will be credited.
(To record bad debts expense)
The Bradford Company issued 12% bonds, dated January 1, with a face amount of $87 million on January 1, 2021. The bonds mature on December 31, 2030 (10 years). For bonds of similar risk and maturity, the market yield is 14%. Interest is paid semiannually on June 30 and December 31. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) Required: 1. Determine the price of the bonds at January 1, 2021. 2. to 4. Prepare the journal entries to record their issuance by The Bradford Company on January 1, 2021, interest on June 30, 2021 and interest on December 31, 2021 (at the effective rate).
Answer:
1. $77,783,220
2. Jan-21
Dr Cash $ $77,783,220
Dr Discount On Bond $9,216,780
Cr Bond Payable $ $87,000,000
Explanation:
1. Calculation to Determine the price of the bonds at January 1, 2021.
First step is to calculate the Present Value Of Annual Interest
a Semi-annual Interest Amount $5,220,000
($87,000,000*12%/2)
b PV Annuity Factor for (20 Years,14%/2=7%) 10.5940
c Present Value Of Annual Interest (a*b) $ $55,300,680
($5,220,000*10.5940)
Second step is to calculate Present Value Of Redemption Amount
a Redemption Value $ $87,000,000
b PV Factor Of (20 Years,7%) 0.25842
c Present Value Of Redemption Amount (a*b) $ $22,482,540
($87,000,000*0.25842 )
Now let Determine the price of the bonds at January 1, 2021.
Intrinsic Value ( Price ) Of The Bond = ($55,300,680+$22,482,540)
Intrinsic Value ( Price ) Of The Bond =$77,783,220
Therefore the price of the bonds at January 1, 2021 is $77,783,220
2. Preparation of the journal entries to record their issuance by The Bradford Company on January 1, 2021,
Jan-21
Dr Cash $ $77,783,220
Dr Discount On Bond $9,216,780
($87,000,000-$77,783,220)
Cr Bond Payable $ $87,000,000
(Being to record issuance of bond)
3. Preparation of the journal entries to record their issuance by The Bradford Company on ion June 30, 2021
Jun-30
Dr Interest expenses $ 53,82,240
Discount On Bond payable $ 2,22,240
Cash $5,220,000
4.Preparation of the journal entries to record their issuance by The Bradford Company on
December 31, 2021
Dec-31 Interest expenses $ 53,97,797
Discount On Bond payable $ 2,37,797
Cash $5,220,000
( to record interest payment)
Molo Oil Company produces gasoline, home heating oil, and jet fuel from crude oil in a joint processing operation. Joint processing costs up to the split-off point total $385,000 per month. For financial reporting purposes, the company allocates these costs to the joint products on the basis of their relative sales value at the split-off point. Unit selling prices and total output at the split-off point are as follows: Product Selling Price Monthly Output Gasoline $ 27.00 per gallon 14,400 gallons Heating Oil $ 21.00 per gallon 22,400 gallons Jet Fuel $ 33.00 per gallon 5,600 gallons Each product can be processed further after the split-off point. Additional processing requires no special facilities. The additional processing costs (per quarter) and unit selling prices after further processing are given below: Product Additional Processing Costs Selling Price Gasoline $ 89,220 $ 32.80 per gallon Heating Oil $ 129,170 $ 27.80 per gallon Jet Fuel $ 60,160 $ 41.80 per gallon Required: 1. What is the financial advantage (disadvantage) of further processing each of the three products beyond the split-off point
Answer:
Molo Oil Company
The financial advantage of further processing of each of the three products beyond the split-off point is:
= $182,430
(which is the additional profit gained from the further processing).
Explanation:
Joint processing costs = $385,000 per month
Product Selling Price Monthly Output Sales Value
Gasoline $ 27.00 per gallon 14,400 gallons $388,800 ($27*14,100)
Heating Oil $ 21.00 per gallon 22,400 gallons 470,400 ($21*22,400)
Jet Fuel $ 33.00 per gallon 5,600 gallons 184,800 ($33*5,600)
Total sales value = $1,044,000
Joint costs = 385,000
Profit = $659,000
Allocation of joint processing costs of $385,000
Gasoline = $143,379 ($388,800/$1,044,000 * $385,000)
Heating Oil 173,471 ($470,400/$1,044,000 * $385,000)
Jet Fuel 68,150 ($184,800/$1,044,000 * $385,000)
Total cost $385,000
Total costs:
Additional
Joint Cost Monthly Cost Total Costs
Gasoline $143,379 $29,740 $173,119
Heating Oil 173,471 43,057 216,528
Jet Fuel 68,150 20,053 88,203
Total costs $385,000 $92,850 $477,850
Product Additional Processing Selling Price
Costs (per quarter)
Gasoline $ 89,220 $ 32.80 per gallon
Heating Oil $ 129,170 $ 27.80 per gallon
Jet Fuel $ 60,160 $ 41.80 per gallon
Product Additional Processing Selling Price
Costs (per month)
Gasoline $ 29,740 $ 32.80 per gallon
Heating Oil $ 43,057 $ 27.80 per gallon
Jet Fuel $ 20,053 $ 41.80 per gallon
Determination of profit after further processing:
Product Selling Price Monthly Output Sales Value
Gasoline $ 32.80 per gallon 14,400 gallons $462,480 ($32.80*14,100)
Heating Oil $ 27.80 per gallon 22,400 gallons 622,720 $27.80*22,400)
Jet Fuel $ 41.80 per gallon 5,600 gallons 234,080 ($41.80*5,600)
Total sales revenue = $1,319,280
Total costs = 477,850
Profit = $841,430
Financial advantage
Profit after further processing = $841,430
Profit with Joint processing = 659,000
Financial advantage = $182,430
Thermopolis, Inc. reported retained earnings of $490,953 on December 31, 2017. During the year, Thermopolis recorded net income of $135,075 and paid dividends of $57,762. The company had no other transactions that affected retained earnings. What must retained earnings have been on December 31, 2016
Answer:
the Opening retained earning balance is $413,640
Explanation:
The computation of the retained earnings have been on December 31, 2016 is shown below:
As we know that
Ending retained earning balance = Opening retained earning balance + net income - dividend paid
$490,953 = Opening retained earning balance + $135,075 - $57,762
$490,953 = Opening retained earning balance + $77,313
So, the Opening retained earning balance is $413,640
In 3 sentences. Why are open-ended questions helpful when landing a sale? (this is for customer service)
Answer:
By using open-ended questions, participants are able to express and articulate opinions that may be extreme, unusual, or simply ones that the researcher did not think about when creating the survey. This often provides researchers rich, relevant data for their studies
Explanation:
(hope this helps)
Explain how art sellers use the 4 P's of marketing to promote expensive art to the desired patrons. Then, consider: Do you think it makes sense to view art as a product and promote it using the marketing mix? How is it similar to other products? On the other hand, what makes art different or "special" in comparison to the products we usually buy in a store?
Explanation:
Yes, the art market can benefit from the use of the marketing mix, since the 4p's of marketing, which are the product, price, place and promotion, will directly influence the positioning of a product in the market and consequently increase sales.
In the case of works of art, the marketing mix helps to align marketing strategies to reach the potential audience that consumes art. It can then be considered that the arts make up a specific type of market niche, which has consumers willing to pay certain prices according to the artist, the rarity of the artwork, the time, etc. Therefore, the marketing mix works as a strategic set that will help art sellers to position their product with their consumers and thus achieve the final goal of making sales.
Ann Jones uses a dry-cleaning machine in her business, and it was partially destroyed by firE. At the time of the fire, the adjusted basis was $20,000 and its fair market value was $18,000. The adjusted basis after the fire is $10,000 and the fair market value after the casualty is $10,000. How much is the casualty loss
Answer:
the casualty loss is $8,000
Explanation:
The computation of the casualty loss is given below:
Lower of
= Adjusted basis or decline in FMV
= $10,000 or ($18,000 - $10,000)
= $10,000 or $8,000
= $8,000
hence, the casualty loss is $8,000
The same would be considered and relevant
The other values would be ignored
Your retirement fund consists of a $7,500 investment in each of 20 different common stocks. The portfolio's beta is 0.65. Suppose you sell one of the stocks with a beta of 1.0 for $7,500 and use the proceeds to buy another stock whose beta is 2.25. Calculate your portfolio's new beta. Do not round intermediate calculations. Round your answer to two decimal places.
Answer:
0.7125
Explanation:
Calculation to determine your portfolio's new beta.
First step is to calculate the Increase in beta as a result of net sales
Increase in beta as a result of net sales=2.25-1
Increase in beta as a result of net sales=1.25
Hence:
increase/stock=1.25/20=0.0625
Now let calculate the new beta
New beta=0.65+0.0625
New beta=0.7125
Therefore your portfolio's new beta will be 0.7125
For each of the following examples, identify whether a positive or negative externality is present and whether there will be too little or too much of the activity relative to the socially optimal outcome.
A. Jerome has a beautifully landscaped front lawn with lots of colorful flowers. Landscaped lawns produce a externality. landscaped lawns exist relative to the socially efficient quantity.
B. Dave takes advantage of the low price of gas to purchase a sports utility vehicle. Sports utility vehicles generate a externality. sports utility vehicles are produced relative to the socially efficient quantity.
C. Susan decides to walk to work instead of driving. Walking to work creates a externality. walks to work exist relative to the socially efficient quantity.
D. Anita decides to smoke a cigarette while she is waiting at a busy bus stop. Cigarettes create a externality. cigarettes are produced relative to the socially efficient quantity.
Answer:
A. Landscape lawns produce positive externality.
B. Sports vehicle generates a positive externality
C. Walk to work creates positive externality.
D. Cigarettes create a negative externality.
Explanation:
Positive externality occurs when society gets benefit from a persons act. Susan has created lawns near her house and there are beautiful flowers in the lawn. This will be relaxing for those who pass near by the lawns. There will be fresh air coming from the lawn and society will look pleasant.
Negative externality is one in which society is harmed by the act of a person. This happens when Anita smokes at a bus stop. There are other travelers who will be present at the bus stop might be harmed from the smoke which arises from the cigarette.
Exercise 8-3 (Algo) Lump-sum purchase of plant assets LO C1 Rodriguez Company pays $389,610 for real estate with land, land improvements, and a building. Land is appraised at $247,500; land improvements are appraised at $55,000; and the building is appraised at $247,500. 1. Allocate the total cost among the three assets. 2. Prepare the journal entry to record the purchase.
Answer:
1. Land $175,324.50
Land improvements $38,961
Building $175,324.50
2. Dr Land $175,324.50
Cr Cash $175,324.50
Being entries to recognize cost incurred in the purchase of Land
Dr Land improvements $38,961
Cr Cash $38,961
Being entries to recognize cost incurred in the purchase of Land improvements
Dr Building $175,324.50
Cr Cash $175,324.50
Being entries to recognize cost incurred in the purchase of Building
Explanation:
Using the appraisal method to apportion the cost of an asset to the components of the asset involves the consideration of the appraised cost of each individual item as a portion of the total cost of the asset.
Thus, given that Rodriguez Company pays $389,610 for real estate with land, land improvements, and a building
Appraised cost of
Land = $247,500
Land improvements = $55,000
Building = $247,500
Total appraised cost of the asset = $247,500 +$55,000 + $247,500
= $550,000
Allocated cost of;
Land = $247,500/$550,000 * $389,610
= $175,324.50
Land improvements = $55,000/$550,000 * $389,610
= $38,961.00
Building = $247,500/$550,000 * $389,610
= $175,324.50
Journal entries
Dr Land $175,324.50
Cr Cash $175,324.50
Being entries to recognize cost incurred in the purchase of Land
For journal entries, we debit each of the individual assets account and credit cash to recognize the cost incurred in the purchase of the asset.
A purely domestic firm that sources and sells only domestically, Multiple Choice should never hedge since this could actually increase its currency exposure. faces no exchange rate risk and should never hedge since this could actually increase its currency exposure. faces no exchange rate risk. faces exchange rate risk to the extent that it has international competitors in the domestic market.
Answer:
faces exchange rate risk to the extent that it has international competitors in the domestic market.
Explanation:
Exchange rate risk is defined as the risk that exists when a company engaged in transactions that are denominated in a foreign currency rather than the domestic currency.
So if a purely domestic firm that sources and sells only domestically has international competitors in its local market, and the exchange rate is favouring the competitors there will be a risk for them.
For example if international competitors can source raw materials cheaper because of the exchange rate of a foreign country, it will be a disadvantage to local firms that cannot reduce their prices.
Cherry Valley Lumber's (CVL) lumber mill produces boards of various sizes and quality specifications for the home construction industry. CVL incurs joint costs in the initial phases of processing raw timber, such as transporting the logs to the mill, removing the bark from the logs, and cutting rough-cut boards. After the split-off point, CVL incurs costs in the Planing Department to finalize the finished boards of various grades and sizes. Which of the following statements regarding the costs at CVL is true?
a. The costs to finish the boards after the split-off point will not be traced directly to the finished boards according to the various grades and sizes produced. The costs for transporting the logs, removing bark, and cutting the rough-cut boards before the split-off point will be traced to the final finished boards.
b. The costs for transporting the logs, removing bark, and cutting the rough-cut boards before the split-off point will not be directly traced to the final finished boards. All costs to finish the boards after the split-off point will be traced directly to the finished boards according to the various grades and sizes produced.
c. It will be impossible for CVL to directly trace any costs to the finished boards of various grades and sizes.
d. CVL will be able to directly trace all costs before and after the split-off point to the finished boards of various grades and sizes.
Answer:
Cherry Valley Lumber's (CVL)
The statement regarding the costs at CVL that is true is:
b. The costs for transporting the logs, removing bark, and cutting the rough-cut boards before the split-off point will not be directly traced to the final finished boards. All costs to finish the boards after the split-off point will be traced directly to the finished boards according to the various grades and sizes produced.
Explanation:
This is why the costs at split-off are usually apportioned to the different categories of products based on some chosen criteria, e.g. sales value, size, etc. However, after split-off, costs that are incurred can easily be traced to the various grades and sizes of boards produced. This simply means that after split-off, costs become traceable and direct to each board category.
Explain the theory behind the free cash flow valuation approach. Why are the free cash flows value relevant to common equity shareholders when they are not cash flows to those shareholders, but rather are cash flows into the firm?
Answer:
See explanation
Explanation:
The free cash flows value relevant to common equity shareholders because they consists of cash that can be distributed to shareholders as dividends. In other words this is Distributable Cash.
Required information Skip to question [The following information applies to the questions displayed below.] The December 31, 2021, adjusted trial balance for Fightin' Blue Hens Corporation is presented below. Accounts Debit Credit Cash $ 10,400 Accounts Receivable 134,000 Prepaid Rent 4,400 Supplies 22,000 Equipment 240,000 Accumulated Depreciation $ 119,000 Accounts Payable 10,400 Salaries Payable 9,400 Interest Payable 3,400 Notes Payable (due in two years) 24,000 Common Stock 140,000 Retained Earnings 44,000 Service Revenue 340,000 Salaries Expense 240,000 Rent Expense 12,000 Depreciation Expense 24,000 Interest Expense 3,400 Totals $ 690,200 $ 690,200 Required: 1. Prepare an income statement for the year ended December 31, 2021.
Answer and Explanation:
The preparation of the income statement is presented below:
Service Revenue 340,000
Less:
Salaries Expense 240,000
Rent Expense 12,000
Depreciation Expense 24,000
Interest Expense 3,400
Net income $60,600
Hence, we simply deduct the expenses from the service revenue so that we get the net income