Answer:
Castle Corporation
A) Journal Entries:
Feb. 1:
Debit Cash Account $120,000
Credit Common Stock $25,000
Credit Paid-in Capital in Excess of Stated Value—Common Stock $95,000
To record the issue of 25,000 common stock shares for $120,000
Apr. 14:
Debit Cash Account $33,000
Credit Treasury Stock $33,000
To record the reissue of 6,000 shares of treasury stock- common for $33,000.
Sept. 3:
Debit Patent $35,000
Credit Common Stock $5,000
Credit Paid-in Capital in Excess of Stated Value—Common Stock $30,000
To record the issue of common stock shares for a patent valued at $35,000
Nov. 10:
Debit Treasury Stock $6,000
Credit Cash $6,000
To record the purchase of treasury stock for $6,000
Dec. 31:
Debit Net Income (Income Statement) $452,000
Credit Retained Earnings $452,000
To close the net income on the income statement to the Statement of retained earnings.
B) Stockholders' Equity Accounts:
Preferred Stock (8%, $50 par, 10,000 shares authorized)
Date Accounts Titles Debit Credit
Jan. 1, 2020 Beginning balance $400,000
Common Stock ($1 stated value, 2,000,000 shares authorized)
Date Accounts Titles Debit Credit
Jan. 1, 2020 Beginning balance $1,000,000
Feb. 1, 2020 Cash Account 25,000
Sept. 3 Patent 5,000
Dec. 31 Ending balance $1,030,000
Paid-in Capital in Excess of Par—Preferred Stock
Date Accounts Titles Debit Credit
Jan. 1, 2020 Beginning balance $100,000
Paid-in Capital in Excess of Stated Value—Common Stock
Date Accounts Titles Debit Credit
Jan. 1, 2020 Beginning balance $1,450,000
Feb. 1, 2020 Cash Account 95,000
Sept. 3 Patent 30,000
Dec. 31 Ending balance $1,575,000
Retained Earnings
Date Accounts Titles Debit Credit
Jan. 1, 2020 Beginning balance $1,816,000
Dec. 31 Net Income 452,000
Dec. 31 Ending balance $2,268,000
Treasury Stock (10,000 common shares)
Date Accounts Titles Debit Credit
Jan. 1, 2020 Beginning balance $50,000
Apr. 14 2020 Cash Account $33,000
Nov. 10 2020 Cash Account 6,000
Dec. 31 2020 Ending balance $23,000
C. Stockholders' Equity accounts on December 31, 2020:
Preferred Stock (8%, $50 par, 10,000 shares authorized) $400,000
Common Stock ($1 stated value, 2,000,000 shares authorized) 1,030,000
Paid-in Capital in Excess of Par—Preferred Stock 100,000
Paid-in Capital in Excess of Stated Value—Common Stock 1,575,000
Retained Earnings 2,268,000
Treasury Stock (5,000 common shares) (23,000)
Explanation:
Stockholders' Equity accounts on January 1, 2020:
Preferred Stock (8%, $50 par, 10,000 shares authorized) $400,000
Common Stock ($1 stated value, 2,000,000 shares authorized) 1,000,000
Paid-in Capital in Excess of Par—Preferred Stock 100,000
Paid-in Capital in Excess of Stated Value—Common Stock 1,450,000
Retained Earnings 1,816,000
Treasury Stock (10,000 common shares) 50,000
If bad debt expense for the year was $40,000, what was the amount of bad debts written off during the year?
Answer:
$32,000
Explanation:
The computation of the bad debt written off during the year is shown below:
= Opening balance of the allowance account + bad debt expense - required allowance
= $30,000 + $40,000 - $38,000
= $32,000
hence, the amount of bad debts written off during the year is $32,000
We simply applied the above formula so that the correct answer could come
Darby Company, operating at full capacity, sold 500,000 units at a price of $94 per unit during the current year. Its income statement is as follows:
Sales $47,000,000
Cost of goods sold 25,000,000
Gross profit $22,000,000
Expenses:
Selling expenses $4,000,000
Administrative expenses 3,000,000
Total expenses 7,000,000
Income from operations $15,000,000
The division of costs between variable and fixed is as follows:
Variable Fixed
Cost of goods sold 70% 30%
Selling expenses 75% 25%
Administrative expenses50% 50%
Management is considering a plant expansion program for the following year that will permit an increase of $3,760,000 in yearly sales. The expansion will increase fixed costs by $1,800,000 but will not affect the relationship between sales and variable costs.
Required:
1. Determine the total variable costs and the total fixed costs for the current year.
Total variable costs $_____
Total fixed costs $_____
2. Determine (a) the unit variable cost and (b) the unit contribution margin for the current year.
Unit variable cost $_____
Unit contribution margin $_____
3. Compute the break-even sales (units) for the current year.
4. Compute the break-even sales (units) under the proposed program for the following year.
5. Determine the amount of sales (units) that would be necessary under the proposed program to realize the $15,000,000 of income from operations that were earned in the current year.
6. Determine the maximum income from operations possible with the expanded plant.
7. If the proposal is accepted and sales remain at the current level, what will the income or loss from operations be for the following year?
8. Based on the data given, would you recommend accepting the proposal?
a. In favor of the proposal because of the reduction in break-even point.
b. In favor of the proposal because of the possibility of increasing income from operations.
c. In favor of the proposal because of the increase in break-even point.
d. Reject the proposal because if future sales remain at the current level, the income from operations will increase.
e. Reject the proposal because the sales necessary to maintain the current income from operations would be below the current year sales.
Answer:
Darby Company
1. Determination of the total variable costs and the total fixed costs for the current year.
Total variable costs $_____22,000,000
Total fixed costs $_____10,000,000
2. Determination of (a) the unit variable cost and (b) the unit contribution margin for the current year.
Unit variable cost $_____44 ($22,000,000/500,000)
Unit contribution margin $_____50 ($94 - $44)
3. Compute the break-even sales (units) for the current year:
Break-even sales (units) = Fixed Costs/Contribution per unit
= $10,000,000/$50 = 200,000 units
4. Compute the break-even sales (units) under the proposed program for the following year.
Break-even sales (units) = Fixed costs/Contribution per unit
= $11,800,000/$50 = 236,000
5. Determine the amount of sales (units) that would be necessary under the proposed program to realize the $15,000,000 of income from operations that were earned in the current year
Break-even sales (units) to achieve income target = (Fixed costs + Income target)/Contribution per unit
= ($11,800,000 + 15,000,000)/$50
= 536,000
6. Determine the maximum income from operations possible with the expanded plant.
Income Statement for the current year
Next Year's Financials:
Total
Sales $50,760,000 ($94 * 540,000)
Expenses:
Total variable 23,760,000 ($44 * 540,000)
Fixed costs 11,800,000 ($10,000,000 + $1,800,000)
Income from operations $15,200,000
7. If the proposal is accepted and sales remain at the current level, what will the income or loss from operations be for the following year?
Total
Sales $47,000,000 ($94 * 500,000)
Expenses:
Total variable 22,000,000 ($44 * 500,000)
Fixed costs 11,800,000 ($10,000,000 + $1,800,000)
Income from operations $13,200,000
8. Based on the data given, would you recommend accepting the proposal?
Unless the proposal results to an increase in the units sold, it is not acceptable as can be seen from (7) above. However, it is very acceptable if sales unit will increase by 40,000 units as illustrated in (6) above.
b. In favor of the proposal because of the possibility of increasing income from operations.
Explanation:
a) Data and Calculations:
Income Statement for the current year
Sales $47,000,000
Cost of goods sold 25,000,000
Gross profit $22,000,000
Expenses:
Selling expenses $4,000,000
Administrative expenses 3,000,000
Total expenses 7,000,000
Income from operations $15,000,000
Sales volume = 500,000 units
Selling price = $94
Division of costs between variable and fixed is as follows:
Variable Fixed Variable Fixed Total
Sales $47,000,000
Cost of goods sold 70% 30% $17,500,00 7,500,000 25,000,000
Gross profit $22,000,000
Expenses:
Selling expenses 75% 25% 3,000,000 1,000,000 4,000,000
Administrative exp. 50% 50% 1,500,000 1,500,000 3,000,000
Total expenses 4,500,000 2,500,000 7,000,000
Total variable and fixed costs 22,000,000 10,000,000 32,000,000
Income from operations $15,000,000
Next Year's Financials:
Variable Fixed Variable Fixed Total
Sales $50,760,000
Cost of goods sold 70% 30% $17,500,00 7,500,000 25,000,000
Gross profit $22,000,000
Expenses:
Total variable and fixed costs 22,000,000 11,800,000
Income from operations $15,000,000
All of the current year's entries for Zimmerman Company have been made, except the following adjusting entries. The company's annual accounting year ends on December 31
On September 1 of the current year, Zimmerman collected six months' rent of $8,520 on storage space. At that date, Zimmerman debited Cash and credited Unearned Rent Revenue for $8,520.
On October 1 of the current year, the company borrowed $13,200 from a local bank and signed a one-year, 12 percent note for that amount. The principal and interest are payable on the maturity date.
Depreciation of $3,000 must be recognized on a service truck purchased in July of the current year at a cost of $24,000.
Cash of $3,600 was collected on November of the current year, for services to be rendered evenly over the next year beginning on November 1 of the current year. Unearned Service Revenue was credited when the cash was received.
On November 1 of the current year, Zimmerman paid a one-year premium for property insurance, $9,960, for coverage starting on that date. Cash was credited and Prepaid Insurance was debited for this amount.
The company earned service revenue of $4,200 on a special job that was completed December 29 of the current year. Collection will be made during January of the next year. No entry has been recorded.
At December 31 of the current year, wages earned by employees totaled $13,700. The employees will be paid on the next payroll date in January of the next year.
On December 31 of the current year, the company estimated it owed $490 for this year's property taxes on land. The tax will be paid when the bill is received in January of next year.
2. Using the following headings, indicate the effect of each adjusting entry and the amount of the effect. Use + for increase, − for decrease. (Reminder: Assets = Liabilities + Stockholders’ Equity; Revenues – Expenses = Net Income; and Net Income accounts are closed to Retained Earnings, a part of Stockholders’ Equity.)
Answer:
1) adjusting entries
a. On September 1 of the current year, Zimmerman collected six months' rent of $8,520 on storage space. At that date, Zimmerman debited Cash and credited Unearned Rent Revenue for $8,520.
Dr Unearned rental revenue 5,500
Cr Rental revenue 5,500
b. On October 1 of the current year, the company borrowed $13,200 from a local bank and signed a one-year, 12 percent note for that amount. The principal and interest are payable on the maturity date.
Dr Interest expense 396
Cr Interest payable 396
c. Depreciation of $3,000 must be recognized on a service truck purchased in July of the current year at a cost of $24,000.
Dr Depreciation expense 3,000
Cr Accumulated depreciation 3,000
d. Cash of $3,600 was collected on November of the current year, for services to be rendered evenly over the next year beginning on November 1 of the current year. Unearned Service Revenue was credited when the cash was received.
Dr Unearned service revenue 600
Cr Service revenue 600
e. On November 1 of the current year, Zimmerman paid a one-year premium for property insurance, $9,960, for coverage starting on that date. Cash was credited and Prepaid Insurance was debited for this amount.
Dr Insurance expense 1,660
Cr Prepaid insurance 1,660
f. The company earned service revenue of $4,200 on a special job that was completed December 29 of the current year. Collection will be made during January of the next year. No entry has been recorded.
Dr Accounts receivable 4,200
Cr Service revenue 4,200
g. At December 31 of the current year, wages earned by employees totaled $13,700. The employees will be paid on the next payroll date in January of the next year.
Dr Wages expense 13,700
Cr Wages payable 13,700
h. On December 31 of the current year, the company estimated it owed $490 for this year's property taxes on land. The tax will be paid when the bill is received in January of next year.
Dr Property taxes expense 490
Cr Property taxes payable 490
2) Assets = Liabilities + Stockholders’ Revenues - Expenses = Net
Equity Income
a. na - + + na +
b. na - - na - -
c. - na - na - -
d. na - + + na +
e. - na - na - -
f. + na + + na +
g. na + - na - -
h. na + - na - -
What does patriotism mean
Answer:
patriotism is a synonym for Nationalism; a feeling of extreme pride for one's country.
Explanation:
Answer:
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Explanation:
Suppose that, in a competitive market without government regulations, the equilibrium price of milk is $2.50 per gallon, and employees at grocery stores earn $21.50 per hour. Indicate the following whether each of the statements is an example of a price ceiling or a price floor and whether it results in a shortage or a surplus or has no effect on the price and quantity that prevail in the market.
a. There are many teenagers who would like to work at grocery stores, but the minimum-wage law sets the hourly wage at $25.00.
b. The government has instituted a legal minimum price of $2.30 per gallon for milk.
c. The government prohibits grocery stores from selling milk for more than $2.30 per gallon.
Explanation:
at price ceiling we have price set at a maximum level. it cannot be raised beyond this level. At binding price ceiling, price would be set to be lower than what is the equilibrium price level. a non binding price ceiling is set to be higher than equilibrium level.
At price floor, price is set to a particular minimum level. It cannot fall lower than this. At binding price floor, price is higher than equilibrium price' at non binding price floor, it is set to be lower than equilibrium price level.
this expalnation should help us to answer this question.
(a) Many teenagers would like to work but minimum wage is set at 25.00 we have Price floor, Binding
(b) Government instituted legal minimum price of a gallon of milk at $2.30 we have Price floor, Non-binding
(c) if the Government prohibits from selling milk for more than $2.30 per gallon then we have Price ceiling, Binding
At Davide Corporation, direct materials are added at the beginning of the process and conversions costs are uniformly applied. Other details include:
WIP beginning (60% for conversion) 17,500 units
Units started 114,500 units
Units completed and transferred out 111,700 units
WIP ending (30% for conversion) 20,300 units
Beginning WIP direct materials $22,300
Beginning WIP conversion costs $19,700
Costs of materials added $370,000
Costs of conversion added $280,000
What is the total cost of units completed and transferred out?
Answer and Explanation:
For materials
Equivalent completed units = Completed units + WIP ending
= 111,700 + 20,300
= 132,000 units
Cost of materials = Beginning WIP + Cost of materials added
= 22,300 + 370,000
= $392,300
Cost of material per units = 392,300 ÷ 132,000
= $2.97197
For conversions
Equivalent completed units = Completed units + WIP ending
= 111,700 + 20,300 × 30%
= 117,790 units
Cost of Conversion = Beginning WIP + Cost of conversion added
= 19,700 + 280,000
= $299,700
Cost of conversion per units = 299,700 ÷ 117,790
= $2.54436
Total cost of units completed and transferred out
= 111,700 × (2.97197 + 2.54436)
= $616,174
What is considered revenue recognition?
Answer:
revenue is recognized and determines how to account for it. Typically, revenue is recognized when a critical event has occurred, and the dollar amount is easily measurable to the company
Explanation:
examples:Sales Basis Method. With the sales basis revenue recognition methods, revenue is recorded at the time of sale.
Percentage of Completion Method
Completed Contract Method
MotorCar, a major automobile company headquartered in Detroit, is concerned about being left behind in the race to produce autonomous vehicles. There remains much uncertainty regarding the future of autonomous vehicle technology. Some industry experts say fully self-driving cars could be brought to market within a couple of years. Others believe the technology could take decades to develop. And still others are skeptical that the technology will ever be safe enough to bring to the automobile mass market. Further, in addition to safety and technological hurdles, there are regulatory obstacles as well. However, MotorCar has decided that it needs to innovate.
The company is considering (1) increasing funding to its existing R&D department to expand to the development of AI (artificial intelligence) technology, needed for self-driving vehicles; (2) launching a fully owned subsidiary (a new company that it owns and controls) focused exclusively on AI; or (3) partnering with a major Silicon Valley tech company that has already made considerable progress on AI technology.
Required:
What do you see as some of the potential benefits and risks of these different organizational approaches?
Answer:
(1) increasing funding to its existing R&D department to expand to the development of AI (artificial intelligence) technology, needed for self-driving vehicles
This strategy would produce the benefit of puttinig the company on the edge of the development of AI in order to produce driverless vehicles.
The risk is that the investment could be too high for the initial benefit, since there is no certainty that driveless cars will be in the market in the short-term.
(2) launching a fully owned subsidiary (a new company that it owns and controls) focused exclusively on AI
This strategy would produce a similar benefit as the strategy above. However, it could also benefit from a little bit less administrative control because in this case, the AI development would be in charge of a subsidiary, not a division.
The risk is the same as above: initial investments may be too high for the initial benefits.
(3) partnering with a major Silicon Valley tech company that has already made considerable progress on AI technology.
This strategy produces the benefit of requiring less investment while still putting the company on the edge of AI research. However, the risk lies in loss of control over the thecnology, and possible future conflicts with the partner company.
DS Unlimited has the following transactions during August.
August 6 Purchases 52 handheld game devices on account from GameGirl, Inc.,
for $110 each, terms 2/10, n/60.
August 7 Pays $310 to Sure Shipping for freight charges associated with the
August 6 purchase.
August 10 Returns to GameGirl seven game devices that were defective.
August 14 Pays the full amount due to GameGirl.
August 23 Sells 32 game devices purchased on August 6 for $130 each to
customers on account. The total cost of the 32 game devices sold is
$3,670.00.
Required:
Record the transactions of DS Unlimited, assuming the company uses a perpetual inventory system.
Answer:
Date Account Title Debit Credit
Aug-06 Inventory $5,720
(52 * $110)
Accounts Payable $5,720
Aug-07 Inventory $310
Cash $310
Aug-10 Accounts Payable $770
(7 * $110 )
Inventory $770
Aug-14 Accounts Payable $4,950
Inventory $99
Cash $4,851
Aug-23 Accounts Receivable $4,160
( 32*$130)
Sales revenue $4,160
Aug-23 Cost of goods sold $3,670
Inventory $ 3,670
Question 3
20 pts
Solve the problem
A normal distribution has a limited range and can be skewed in either direction.
True
0 False
Next >
Fields Company has two manufacturing departments, forming and painting. The company uses the weighted-average method of process costing. At the beginning of the month, the forming department has 36,000 units in inventory, 70% complete as to materials and 30% complete as to conversion costs. The beginning inventory cost of $82,100 consisted of $58,000 of direct materials costs and $24,100 of conversion costs.
During the month, the forming department started 520,000 units. At the end of the month, the forming department had 40,000 units in ending inventory, 85% complete as to materials and 35% complete as to conversion. Units completed in the forming department are transferred to the painting department. Cost information for the forming department is as follows:
Beginning work in process inventory $82,100
Direct materials added during the month 1,942,930
Conversion added during the month 1,359,730
1A. Calculate the equivalent units of production for the forming department.
1B. Calculate the costs per equivalent unit of production for the forming department.
1C. Using the weighted-average method, assign costs to the forming department’s output—specifically, its units transferred to painting and its ending work in process inventory.
Answer:
beginning WIP 36,000
$58,000 of direct materials costs
$24,100 of conversion costs
units started 520,000
units finished 516,000
materials added during the month $1,942,930
conversion added during the month $1,359,730
ending WIP 40,000
materials 85% complete, EU = 34,000
conversion 35%, EU = 14,000
total equivalent units
materials = 516,000 + 34,000 = 550,000
conversion = 516,000 + 14,000 = 530,000
cost per equivalent unit
materials = ($58,000 + $1,942,930) / 550,000 = $3.63805
conversion = ($24,100 + $1,359,730) / 530,000 = $2.611
total = $6.24905
costs assigned to
units transferred out = $6.24905 x 516,000 = $3,224,511
ending WIP = (34,000 x $3.63805) + (14,000 x $2.611) = $160,249
Performance Obligation Fulfilled Over Time Philbrick Company signed a three-year contract to develop custom sales training materials and provide training to the employees of Elliot Company. The contract price is $1,100 per employee and the number of employees to be trained is 500. Philbrick can send a bill to Elliot at the end of every training session. Once developed, the custom training materials will belong to Elliot Company, but Philbrick does not consider them to be a separate performance obligation. The expected number to be trained in each year and the expected development and training costs follow. Number of employees Development and training costs incurred
2019
150 $
55,000
2020
250
70,000
2021
100
20,000
Total 500 $145,000
For each year, compute the revenue, expense, and gross profit reported assuming revenue is recognized over time using... 1. the number of employees trained as a measure of the value provided to the customer. Note: Round answers to the nearest dollar.
Answer:
Philbrick Company
Performance Obligation Fulfilled Over Time
Computation of the revenue, expense, and gross profit:
Year Number of Development Sales Gross
Employees /Training Cost Value Profit
2019 150 $ 55,000 $165,000 $110,000
2020 250 70,000 275,000 205,000
2021 100 20,000 110,000 90,000
Total 500 $145,000 $550,000 $405,000
Explanation:
a) Data and Calculations:
Contract price = $1,100 per employee
No. of employees to be trained = 500
Total contract value = $550,000 ($1,100 * 500)
Expected Development and Training Costs:
Year Number of Development
Employees /Training Cost
2019 150 $ 55,000
2020 250 70,000
2021 100 20,000
Total 500 $145,000
What is the best application to chart the average temperature for the year?
PowerPoint
Access
Word
Excel
During 2020, PC Software Inc. developed a new personal computer database management software package. Total expenditures on the project were $3,000,000, of which 40% occurred after the technological feasibility of the product had been established. The product was completed and offered for sale on January 1, 2021. During 2021, revenues from sales of the product totaled $4,800,000. The package is expected to be successfully marketable for five years, and the total revenues over the life of the product are estimated to be $20,000,000.
Required
A. Prepare the journal entry to account for the development of this product in 2020.
B. Prepare the journal entry to record the amortization of capitalized computer software development costs in 2021.
C. What disclosures are required in the December 31, 2021, financial statements regarding computer software costs?
At December 31, 2021, the unamortized software intangible asset totals ______. This is equal to _____ originally capitalized less amortization in 2021 of _______. The amount charged to expense as amortization of software intangible asset in 2021 was ______. The estimated net realizable value of computer software is greater than the remaining unamortized software intangible asset.
Answer:
Answer:
PC Software Inc.
A. Journal Entry to account for the development of software in 2020:
Debit Software $1,200,000
Debit Development Expenses $1,800,000
Credit Cash Account $3,000
To capitalize 40% software development costs.
B. Journal Entry to amortize Capitalize Computer Software Development in 2021:
Debit Amortization Expense $240,000
Credit Accumulated Amortization - Software $240,000
To record the amortization of the capitalized software.
C. At December 31, 2021, the unamortized software intangible asset totals _$960,000_____. This is equal to _$1,200,000____ originally capitalized less amortization in 2021 of _ $240,000______. The amount charged to expense as amortization of software intangible asset in 2021 was _$240,000_____. The estimated net realizable value of computer software is greater than the remaining unamortized software intangible asset.
Explanation:
The choice is for PC Software Inc. to follow the US GAAP rule, which states that development costs incurred for an internally-generated software should be capitalized only when the software is commercially feasible. Based on this, only 40% of the software expenditures are capitalized.
Use the CAFR information for the City of Salem (Illustrations 2-2 through 2-16) to find the following items. in your answer, both indicate which financial statement contained the information and the item and the dollar amount.
Information Item Statement $ Amount
Ex Amounts due from other governments to support
governmental activities Balance Sheet—
Governmental Funds $1,328,448
A. Total capital outlay for the courthouse renovation
B. Total cash paid for capital additions for the solid
waste fund
C. Interest paid (not expense) on general long-term debt
D. Interest paid (not expense) on water department debt
E. Capital asset (net) for the government's component units
F. Contributions received for use by the private-purpose trust
G. Noncurrent liabilities associated with governmental
activities that are due in more than one year
H. Noncash contributions of capital assets for the water
department
Answer:
attached below
Explanation:
using the CAFR information the information required is tabulated as attached below
The net assets statement reports the liability, the net assets account balance for the government activities and also reports the assets
If a specific economy has extra capital resources available,
be able to produce top-quality goods and services.
continually look to expand and invest.
be able to produce more goods and services needed and wanted by society.
have additional labor available to focus on production.
this
Answer: A
Be able to produce top-quality goods and services
If a specific economy has extra capital resources available, be able to produce more goods and services needed and wanted by society.
What is an economy?An economy is a region where products and services are produced, distributed, traded, and consumed. It is generally understood to be a social domain that places an emphasis on the behaviors, discourses, and tangible manifestations connected to the creation, utilization, and management of finite resources.
One's culture, values, education, technological advancement, history, social organization, political structure, legal system, and natural resources are all major determinants of an economy's processes.
These elements determine the parameters and conditions under which an economy operates in addition to providing background and content. In other words, the economic realm is a social domain made up of connected human behaviors and exchanges that cannot exist independently.
Individuals, companies, organizations, or governments all qualify as economic actors. When two persons or organizations agree on the value or price of the good or service being exchanged, which is typically stated in a particular currency, an economic transaction takes place.
Learn more about economy, here
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Seiko’s current salary is $85,000. Her marginal tax rate is 32 percent and she fancies European sports cars. She purchases a new auto each year. Seiko is currently a manager for an Idaho Office Supply. Her friend, knowing of her interest in sports cars, tells her about a manager position at the local BMW and Porsche dealer. The new position pays only $75,000 per year, but it allows employees to purchase one new car per year at a discount of $15,000. This discount qualifies as a nontaxable fringe benefit. In an effort to keep Seiko as an employee, Idaho Office Supply offers her a $10,000 raise. Answer the following questions about this analysis.
Problem 12-41
Part a a. Assuming it has a 21 percent marginal tax rate, what is the annual after-tax cost to Idaho Office Supply to provide Seiko with the $10,000 increase in salary?
Answer:
$7,900
Explanation:
Calculation for the annual after-tax cost
Additional salary = $ 10,000
Marginal tax rate=21%
First step is to find the income tax benefit
Income tax benefit = $ 10,000 x 21%
Income tax benefit= $ 2,100
Second step is to find the Annual after tax cost of additional salary
Annual after tax cost of additional salary = $ 10,000 - $2,100
Annual after tax cost of additional salary = $7,900
Therefore the annual after-tax cost will be $7,900
The following lots of Commodity Z were available for sale during the year.
Beginning inventory 11 units at $48
First purchase 16 units at $51
Second purchase 20 units at $56
Third purchase 19 units at $58
The firm uses the periodic system, and there are 23 units of the commodity on hand at the end of the year. What is the ending inventory balance at the end of the year according to the FIFO method?
a.$1,326
b.$3,566
c.$3,543
d.$1,104
Etxuck327 Inc. sells a particular textbook for $39. Variable expenses are $28 per book. At the current volume of 49,000 books sold per year the company is just breaking even. Given these data, the annual fixed expenses associated with the textbook total:
Answer:
539,000.00
Explanation:
As per the contribution margin analysis concept, the break-even point is obtained by dividing fixed cost by contribution margin per unit.
For Etuck327,
The selling price is $39
Variable expense is $28
Break-even in units is 49,000 books.
Contribution margin per unit = selling price - variable costs
=$39- $28
=$11
if Break-even = fixed cost/ contribution margin per unit, then
49,000= fixed cost / 11
fixed costs = 11 x 49000
Fixed costs = 539,000.00
Robert G. Flanders Jr., the state-appointed receiver for Central Falls, RI, said his city's declaration of bankruptcy had proved invaluable in helping it cut costs. Before the city declared bankruptcy, he said, he had found it impossible to wring meaningful concessions out of the city's unions and retirees, who were being asked to give up roughly half of the pensions they had earned as the city ran out of cash.
True or False
Answer: false
Explanation:
The alternative to the term of agreement is the declaration of bankruptcy, in which the cities can extract their pensions, it gives a much better alternative. It also increases the bargaining powers of the members of the city. It will help in extracting concessions from the government. It also increases the disagreement value of the city.
Swifty Company purchased equipment for $256,800 on October 1, 2020. It is estimated that the equipment will have a useful life of 8 years and a salvage value of $12,000. Estimated production is 48,000 units and estimated working hours are 20,400. During 2020, Swifty uses the equipment for 600 hours and the equipment produces 1,000 units.
Required:
Compute depreciation expense under each of the following methods. Swifty is on a calendar-year basis ending December 31.
a. Straight-line method for 2020 $enter a dollar amount.
b. Activity method (units of output) for 2020 $enter a dollar amount.
c. Activity method (working hours) for 2020 $enter a dollar amount.
d. Sum-of-the-years'-digits method for 2022 $enter a dollar amount (e) Double-declining-balance method for 2021
Answer:
a. Straight line method.
Depreciation per annum = ($ 256,800 - $12,000 ) / 8 = $ 30,600.
Depreciation for 2020 = $ 30,600 * ( 3 /12 ) = $ 7,650.
b. Units of output
Depreciation per unit = ( $ 256,800 - $ 12,000 ) / 48,000 = $ 5.1
Depreciation for 2020 = 1,000 * $ 5.1 = $ 5,100.
c. Working hours.
Depreciation per hours = ( $ 256,800 - $ 12,000 ) / 20,400 = $ 12
Depreciation for 2020 = 600 * $ 12 = $ 7,200.
D. Sum of digits method
Sum of years = 8 ( 8 +1 ) / 2 = 36.
Year - 1 used ( 3 / 12 = 0.25)
Year-2 used ( 12 / 12 = 1 )
Remaining ( 8 - 1 - 0.25 = 6.75)
Depreciation for 2022 = ($ 256,800 - $ 12,000 ) * ( 6.75 / 36 )
Depreciation for 2022 = $ 45,900.
e. Double declining balance
Depreciation rate = 200 / 8 = 25 %.
Depreciation for 2020 = $256,800 * 25 % * (3 /12)
Depreciation for 2020 = $16,050.
Depreciation for 2021 = ( $256,800 - $ 16,050) * 25%
Depreciation for 2021 = $60,188.
What part of your social media strategy is working against your goals?
All of the following are forms of cognitive bias except:_____.
A. Confirmation bias: This bias occurs when decision makers seek out evidence that confirms their previously held beliefs, while discounting or diminishing the impact of evidence in support of differing conclusions.
B. Anchoring: This is the overreliance on an initial single piece of information or experience to make subsequent judgments. Once an anchor is set, other judgments are made by adjusting away from that anchor, which can limit one’s ability to accurately interpret new, potentially relevant information.
C. Shifting: This is the bias involved in shifting perspectives too rapidly, thereby forgoing objectivity and sound reasoning.
D. Halo effect: This is an observer’s overall impression of a person, company, brand, or product, and it influences the observer’s feelings and thoughts about that entity’s overall character or properties. It is the perception, for example, that if someone does well in a certain area, then they will automatically perform well at something else regardless of whether those tasks are related.
E. Overconfidence bias: This bias occurs when a person overestimates the reliability of their judgments. This can include the certainty one feels in her own ability, performance, level of control, or chance of success.
Answer:
Option C would be the correct answer.
Explanation:
Throughout objective reasoning, cognitive bias seems to be a weakness that has been triggered by that of the human brain's propensity to interpret knowledge through a prism of individual perspective including interests. The types of cognitive bias but for the remaining change.
The types of cognitive bias are almost as follows:
Overconfidence biasConfirmation bias Halo effect Anchoring biasThe latter considerations provided are not closely linked to the case provided. So, the answer above is the right one.
What are two cons of using a credit card?
Consider an economy that produces only chocolate bars. In year 1, the quantity produced is 3 bars and the price is $4. In year 2, the quantity produced is 4 bars and the price is $5. In year 3, the quantity produced is 5 bars and the price is $6. Using year 1 as the base year, compute nominal GDP, real GDP, and the GDP deflator for each year.
Answer:
The answer is below
Explanation:
The nominal GDP is the market value of goods within a country adjusted for price change.
Nominal GDP for year 1 = Total market value of goods at current price = 3 bars × $4 = $12
Nominal GDP for year 2 = Total market value of goods at current price = 4 bars × $5 = $20
Nominal GDP for year 3 = Total market value of goods at current price = 5 bars × $6 = $30
The real GDP is the market value of goods within a country at current price.
Real GDP for year 1 = Total market value of goods at base year price = 3 bars × $4 = $12
Real GDP for year 2 = Total market value of goods at base year price = 4 bars × $4 = $16
Real GDP for year 3 = Total market value of goods at base year price = 5 bars × $4 = $20
GDP deflator is the ratio of nominal GDP to real GDP multiplied by 100.
GDP deflator in year 1 = (Nominal GDP in year 1 / Real GDP in year 1) × 100 = ($12/$12) × 100 = 100
GDP deflator in year 2 = (Nominal GDP in year 2 / Real GDP in year 2) × 100 = ($20/$16) × 125 = 100
GDP deflator in year 3 = (Nominal GDP in year 3 / Real GDP in year 3) × 100 = ($30/$20) × 100 = 150
Jane is planning to go on a camping trip. She purchases a bottle of mineral water, a pack of biscuits, a small tube of toothpaste, and a toothbrush from the supermarket near her house. The items that Jane has purchased from the supermarket are _____.
franchise
Explanation:
right granted to an individual or group to the market for a business goods or services within a certain area
Jane is planning to go on a camping trip. The items that Jane has purchased from the supermarket are non durable goods.
What do you mean by the non durable goods?The lifespan of consumer nondurable items, which are bought for immediate or nearly immediate consumption, ranges from minutes to three years. These frequently include things like meals, drinks, clothes, shoes, and gasoline.
Non-durable commodities are typically produced, delivered, and sold to consumers quickly.
These products are frequently used very rapidly as well, thus consumers require a constant supply in order to keep stocking up.
Therefore, Jane is planning to go on a camping trip. She purchases a bottle of mineral water, a pack of biscuits, a small tube of toothpaste, and a toothbrush from the supermarket near her house. The items that Jane has purchased from the supermarket are non durable goods.
To know more about the non durable goods, visit:
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The following incorrect income statement was prepared by the accountant of the Axel Corporation:
AXEL CORPORATION Income Statement For the Year Ended December 31, 2021 Revenues and gains:
Sales revenue $660,000
Interest revenue 39,000
Gain on sale of investments 86,000
Total revenues and gains 785,000
Expenses and losses:
Cost of goods sold $360,000
Selling expense 66,000
Administrative expense 86,000
Interest expense 23,000
Restructuring costs 62,000
Income tax expense 47,000
Total expenses and losses 644,000
Net Income $141,000
Earnings per share $1.41
Required:
Prepare a multiple-step income statement for 2018 applying generally accepted accounting principles. The income tax rate is 40%.
Answer:
AXEL CORPORATION
Income Statement For the Year Ended December 31, 2021
Particulars Amount Amount
Sales Revenue $6,60,000
Less : Cost of Goods Sold $360,000
Gross Profit $300,000
Less: Operating Expenses
Selling Expenses $66,000
Administrative Expenses $86,000 $152,000
Operating Income $148,000
Non- Operating and others
Restructuring cost -$62,000
Interest Expenses -$23,000
Interest Revenue $39,000
Gain on sale of investment $86,000 $40,000
Net Income before Taxes $188,000
Less : Income Tax Expenses $47,000
Net income after Taxes $141,000
The Earning Per Shares remains $1.41
Match the below mention description with given terms. If there is no match then write "No match"
a. This is the worth of the leased asset after the lease period expires.
b. This is a partial refund offered to attract the buyer to purchase the vehicle.
c. This is the price of an asset being leased as specified in the lease agreement, which includes the negotiated cost of the vehicle and any applicable fees and taxes.
d. This is the advertised retail price listed on a particular vehicle for sale.
e. This is a contract which allows the lessee (consumer) to use the asset, such as car, land, services etc., in return for a specific amount paid periodically.
1. Rebate
2. Purchase option
3. Lease
4. Depreciation
5. Closed-end lease
Answer:
1. No match.
2. Rebate.
3. No match.
4. No match.
5. Lease.
Explanation:
1. No match: This is the worth of the leased asset after the lease period expires.
The worth of the leased asset after the lease period expires is known as Residual value.2. Rebate: This is a partial refund offered to attract the buyer to purchase the vehicle.
3. No match: This is the price of an asset being leased as specified in the lease agreement, which includes the negotiated cost of the vehicle and any applicable fees and taxes.
Capitalized cost refers to the price of an asset being leased as specified in the lease agreement, which includes the negotiated cost of the vehicle and any applicable fees and taxes.4. No match: This is the advertised retail price listed on a particular vehicle for sale.
Sticker price is the advertised retail price listed on a particular vehicle for sale.5. Lease: This is a contract which allows the lessee (consumer) to use the asset, such as car, land, services etc., in return for a specific amount paid periodically.
One-year Treasury securities yield 4.85%. The market anticipates that 1 year from now, 1-year Treasury securities will yield 5.2%. If the pure expectations theory is correct, what is the yield today for 2-year Treasury securities
Answer:
5.025%
Explanation:
When we assume that the pure expectations theory is correct, then we are assuming that there is no risk premium involved. The formula to determine the yield for the 2 year treasury security:
(1 + i)² = (1 + 4.85%) x (1 + 5.2%)
(1 + i)² = 1.0485 x 1.052
(1 + i)² = 1.103022
√(1 + i)² = √1.103022
1 + i = 1.050248542
i = 0.050248542 = 5.025%
A remotely located air sampling station can be powered by solar cells or by running an electric line to the site and using conventional power. Solar cells will cost $12,600 to install and will have a useful life of 4 years with no salvage value. Annual costs for inspection, cleaning, etc. are expected to be $1,400. A new power line will cost $11,000 to install, with power costs expected to be $800 per year. Since the air sampling project will end in 4 years, the salvage value of the line is considered to be zero. At an interest rate of 10% per year, which alternative should be selected on the basis of a future worth analysis?
Answer:
Since the total future worth of running an electric line of $19,353.42 is less than the total future worth of solar cells is $24,132.22, it implies that it will be cheaper to run an electric line than to use solar cells. Therefore, running an electric line should be selected.
Explanation:
The future worth analysis refers to an act of determining what the the worth of present amount of money or stream of money invested at an interest rate will after in some period or years to come.
To determine which one to select between solar cells and running an electric line, the we need to calculate the future worth of both and compared as follows:
a. Calculation of future value of solar cells
Calculation of future worth of $12,600 installation cost
FW of $12,600 = PW of $12,600 * (1 + r)^n ................ (1)
Where;
FW of $12,600 = Future worth of $12,600 installation cost = ?
PW of $12,600 = Present worth of $12,600 installation cost = $12,600
r = interest rate = 10%, or 0.10
n = number of years = 4
Substitute the values into equation (1), we have:
FW of $12,600 = $12,600 * (1 + 0.10)^4
FW of $12,600 = $12,600 * 1.4641
FW of $12,600 = $18,447.66
Calculation of future worth of annual costs for inspection, cleaning, etc. of $1,400
The future worth of annual costs for inspection, cleaning, etc. of $1,400 can also be calculated using the formula for calculating the Future Value (FV) of an Ordinary Annuity as follows:
FW of $1,400 = M * (((1 + r)^n - 1) / r) ................................. (2)
Where,
FW of $1,400 = Future value of Annual costs for inspection, cleaning, etc. of $1,400 =?
M = Annual costs for inspection, cleaning, etc. = $1,400
r = interest rate = 10%, or 0.10
n = number of years = 4
Substitute the values into equation (2), we have:
FW of $1,400 = $1,400 * (((1 + 0.01)^4 - 1) / 0.01)
FW of $1,400 = $1,400 * 4.060401
FW of $1,400 = $5,684.56
Calculation of total future worth of solar cells
This is calculated by simply adding the FW of $12,600 and FW of $1,400 as follows:
Total future worth of solar cells = FW of $12,600 + FW of $1,400 = $18,447.66 + $5,684.56 = $24,132.22
Therefore, the total future worth of solar cells is $24,132.22.
b. Calculation of future value of running an electric line
Calculation of future worth of $11,000 installation cost
FW of $11,000 = PW of $11,000 * (1 + r)^n ................ (3)
Where;
FW of $11,000 = Future worth of $11,000 installation cost = ?
PW of $11,000 = Present worth of $11,000 installation cost = $11,000
r = interest rate = 10%, or 0.10
n = number of years = 4
Substitute the values into equation (3), we have:
FW of $11,000 = $11,000 * (1 + 0.10)^4
FW of $11,000 = $11,000 * 1.4641
FW of $11,000 = $16,105.10
Calculation of future worth of expected annual power costs of $800
The future worth of expected annual power costs of $800 can also be calculated using the formula for calculating the Future Value (FV) of an Ordinary Annuity as follows:
FW of $800 = M * (((1 + r)^n - 1) / r) ................................. (4)
Where,
FW of $800 = Future value of expected annual power costs of $800 =?
M = Expected annual power costs = $800
r = interest rate = 10%, or 0.10
n = number of years = 4
Substitute the values into equation (4), we have:
FW of $800 = $800 * (((1 + 0.01)^4 - 1) / 0.01)
FW of $800 = $800 * 4.060401
FW of $800 = $3,248.32
Calculation of total future worth of running an electric line
This is calculated by simply adding the FW of $11,000 and FW of $800 as follows:
Total future worth of running an electric line = FW of $11,000 + FW of $800 = $16,105.10 + $3,248.32 = $19,353.42
Therefore, the total future worth of running an electric line is $19,353.42.
c. Conclusion
Since the total future worth of running an electric line of $19,353.42 is less than the total future worth of solar cells is $24,132.22, it implies that it will be cheaper to run an electric line than to use solar cells. Therefore, running an electric line should be selected.