Answer and Explanation:
The journal entries are shown below:
1. Bonds Payable $18,000
Loss on redemption $3,500
To Discount on Bonds Payable ($18,000 - $15,000) $3,000
To Cash ($18,000 + $500) $18,500
(Being retiring of the bond is recorded)
2. Bonds Payable $18,000
Premium on Bonds Payable ($19,000 - $18,000) $1,000
To Gain on redemption of bonds $500
To Cash ($18,000 + $500) $18,500
(Being retiring of the bond is recorded)
These two journal entries should be recorded
Short Company purchased land by paying $11,000 cash on the purchase date and agreed to pay $11,000 for each of the next six years beginning one-year from the purchase date. Short's incremental borrowing rate is 7%. On the balance sheet as of the purchase date, after the initial $11,000 payment was made, the liability reported is closest to: (FV of $1, PV of $1, FVA of $1, and PVA of $1) (Use appropriate factor(s) from the tables provided.)
Answer: $52,431.50
Explanation:
The liability reported will be the present value of the six payments of $11,000.
Since this is a constant amount, it will be an annuity:
= 11,000 * Present value interest factor of an annuity, 6 years, 7%
= 11,000 * 4.7665
= $52,431.50
Any difference between this and any options given is down to rounding errors. Pick the closest figure.
View Policies Current Attempt in Progress Ivanhoe, Inc. had pre-tax accounting income of $1700000 and a tax rate of 20% in 2021, its first year of operations. During 2021 the company had the following transactions:
Received rent from Jane, Co. for 2022 $86000
Municipal bond income $110000
Depreciation for tax purposes in excess of book depreciation $50000
Installment sales profit to be taxed in 2022 $152000
At the end of 2021, which of the following deferred tax accounts and balances exist at December 31, 2021
a) $419,400
b) $471,600
c) $594,000
d) $504,900
Answer:
$17,200
Explanation:
Calculation to determine deferred tax accounts and balances exist at December 31, 2021
Using this formula
Deferred tax accounts=Rent Received* Tax rate
Let plug in the formula
Deferred tax accounts=$86000* 20
Deferred tax accounts=$17,200 Deferred tax asset
Therefore the deferred tax accounts and balances exist at December 31, 2021 will be $17,200
What do we call the value of the next best alternative given up when a choice is made?
A opportunity cost
B sunk cost
C needs
D scarcity
Answer:
A) Opportunity Cost
Explanation:
A wedding party hired a sole proprietorship to cater their wedding, and the sole proprietorship had an employee handle the entire job. If the entire wedding party gets food poisoning, the principal is liable. The employee of the sole proprietorship is also liable because he handled the entire job.
pls dont spam me need halp
Answer:
yes because he was put in charge of the whole operation
We have implicitly assumed that Ace Airline starts paying the salary of $15,000 per month only at the end of the two-month school. Such a practice drew significant complaints from the trainees. Ace decided to change its practice and pay the trainees during the training session as well. How would the new policy change Ace's class size
Answer:
Ace Airline class size will increase as more trainees would be willing to work with Ace Airlines.
Explanation:
Ace airlines is paying trainees $15,000 per month after they complete their training. There was a complain by trainees that they are not paid for the training and the training expense is born by the trainees themselves. Ace decides to pay the trainees for the training sessions as well and this will attract more trainees to work for Ace.
At the beginning of 2020, Beerbo acquired a mine for $970,000. Of this amount, $100,000 was ascribed to the land value (the remaining portion was ascribed to the mine). Surveys conducted by geologists have indicated that approximately 12,000,000 units of ore appear to be in the mine. Beerbo incurred $170,000 of development costs associated with this mine prior to any extraction of minerals. It also determined that the fair value of its obligation to prepare the land for an alternative use (when all of the minerals have been removed) is $40,000. During 2020, 2,500,000 units of ore were extracted and 2,100,000 of these units were sold. What is the amount extracted in 2020
Answer:
$225,000
Explanation:
Depletion rate = [Mine cost - Land value + Obligation to prepare the land for an alternative + Development cost] / Total number of ore extracted
Depletion rate = [$970,000 - $100,000 + $40,000 + $170,000] / $12,000,000
Depletion rate = $1,080,000/$12,000,000
Depletion rate = $0.09
Amount extracted in 2020 = Unit of ore extracted in 2020 / Depletion rate
Amount extracted in 2020 = 2,500,000 units * $0.09
Amount extracted in 2020 = $225,000
Krepps Corporation produces a single product. Last year, Krepps manufactured 20,000 units and sold 15,000 units. Production costs for the year were as follows: Direct materials $170,000 Direct labor $110,000 Variable manufacturing overhead $200,000 Fixed manufacturing overhead $240,000 Sales totaled $825,000 for the year, variable selling and administrative expenses totaled $108,000, and fixed selling and administrative expenses totaled $165,000. There was no beginning inventory. Assume that direct labor is a variable cost. Under variable costing, the company's net operating income for the year would be:
Answer:
Under variable costing, the company's net operating income for the year would be $60,000 lower than under absorption costing.
Explanation:
The computation of the operating income under variable costing is shown below:
But before that following calculations need to be done
Fixed manufacturing overhead per unit is
= $240,000 ÷ 20,000 units
= $12 per unit
Ending Inventory units is
= 20,000 units - 15,000 units
= 5,000 units
Now Cost of ending Inventory deferred under absorption costing is
= 5,000 units × $12
= $60,000
So, the second option is correct
The following are budgeted data: January February March Sales in units 16,900 23,800 19,900 Production in units 19,900 20,900 20,000 One pound of material is required for each finished unit. The inventory of materials at the end of each month should equal 25% of the following month's production needs. Purchases of raw materials for February would be budgeted to be:
Answer:
Purchases= 20,675 pounds
Explanation:
Giving the following information:
Production:
Feb= 20,900
Mar= 20,000
One pound of material is required for each finished unit.
Desired ending inventory= 25% of the following month's production needs.
To calculate the purchase required for February, we need to use the following formula:
Purchases= production + desired ending inventory - beginning inventory
Purchases= 20,900 + (20,000*0.25) - (20,900*0.25)
Purchases= 20,675
You are getting paid biweekly at the rate of $12 per hour. Calculate your net pay, the gross pay, and every deduction applicable utilizing the image above for reference.
Answer:
i need to quit that job if i'm only getting payed 12 bucks an hour hell i need a better job....
Explanation:
Expenses recognition Sun Microsystems uses the accrual basis of accounting and recognizes revenue at the Lime it sells goods or renders services. It applies U.S. GAAP and reports in U.S. dollars. Indicate the amount of expenses (if any) the firm recognizes during the months of June. July, and August in each of the following hypothetical transactions. The firm does the following:
a. Pays $180,000 on July 1 for one year’s rent on a warehouse beginning on that date.
b. Receives a utility bill on July 2 totaling $4,560 for services received during June. It pays the utility bill during July.
c. Purchases office supplies on account costing $12,600 during July. It pays $5,500 for these purchases during July and the remainder during August. Office supplies on hand on July 1 cost $2,400, on July 31 cost $9,200, and On August 31 cost $2,900.
d. Pays $7,200 on July 15 for property taxes on office facilities for the current calendar year.
e. Pays $2,000 on July 15 as a deposit on a custom-made delivery van that the manufacturer will deliver on September 30.
f. Pays $4,500 on July 25 as an advance on the August salary of an employee.
g. Pays $6,600 on July 25 for advertisements that appeared in computer journals during June.
Answer:
Sun Microsystems
Amount of Expenses to recognize during the months of June, July, and August in each of the following transactions:
a. Rent Expense = $30,000
b. Utility Expense = $4,650
c. Supplies Expense = $9,700
d. Property Taxes = $1,800
e. No expense is recognized.
f. Salary Expense = $4,500
g. Advertising Expense = $6,600
Explanation:
Data and Calculations:
a. Rent Expense = $180,000/12 * 2 = $30,000 Rent Prepaid $150,000
b. Utility Expense $4,560
c. Supplies Expense $9,700 ($12,600 - $2,900)
d. Property Taxes = $7,200 *3/12 = $1,800
e. No expense is recognized for the advance payment for delivery van.
f. Salary Expense $4,500
g. Advertising Expense $6,600
Old Economy Traders opened an account to short-sell 1,300 shares of Internet Dreams at $46 per share. The initial margin requirement was 50%. (The margin account pays no interest.) A year later, the price of Internet Dreams has risen from $46 to $59, and the stock has paid a dividend of $3.50 per share. a. What is the remaining margin in the account? (Round your answer to the nearest whole dollar.)
Answer: $8450
Explanation:
First, we need to calculate the total initial asset which will be the value of shares sold and the margin which will be:
= (1300 × $46) + (50% × 1300 × $46)
= $59800 + $29900
= $89700
We will then calculate total liability which will be:
= (1300 × $59) + (1300 × $3.50)
= $76700 + $4550
= $81250
The remaining margin will then be:
= $89700 - $81250
= $8450
What is the difference between social marketing and advertising?
Answer:
Social media marketing is any social media action you take that is unpaid. If you're posting about your blogs, sharing info with your followers, or commenting in social media groups, you're marketing. Social media advertising is any action you take on social media that is paid.
Explanation:
Record the following transactions as general journal entries. Use the gross-price method.
Aug. 6 Purchased $830 of merchandise on account from Johnston Co. Credit terms 2/10, n/30.
8 Bought an $18,000 truck from Pillner Co., paying $3,000 down; balance on account.
13 Purchased $2,611 of merchandise for cash from Pillner and Co.
15 Paid for the August 6 purchase of merchandise from Johnston Co.
17 Purchased $1,743 of merchandise from Luis Co. Credit terms 2/10, n/30.
Answer:
General Journal Entries:
Aug. 6 Debit Inventory $830
Credit Accounts Payable (Johnston Co.) $830
To record the purchase of merchandise; Credit terms 2/10, n/30.
Aug. 8 Debit Truck $18,000
Credit Accounts Payable (Pillner Co.) $15,000
Credit Cash $3,000
To record the purchase of truck.
Aug. 13 Debit Inventory $2,611
Credit Cash $2,611
To record the purchase of inventory for cash.
Aug. 15 Debit Accounts Payable (Johnston Co.) $830
Credit Cash $813
Credit Cash Discounts $17
To record the payment on account, including discounts.
Aug. 17 Debit Inventory $1,743
Credit Accounts Payable (Luis Co.) $1,743
To record the purchase of goods; Credit terms 2/10, n/30.
Explanation:
a) Data and Analysis:
Aug. 6 Inventory $830 Accounts Payable (Johnston Co.) $830
Credit terms 2/10, n/30.
Aug. 8 Truck $18,000 Accounts Payable (Pillner Co.) $15,000 Cash $3,000
Aug. 13 Inventory $2,611 Cash $2,611
Aug. 15 Accounts Payable (Johnston Co.) $830 Cash $813 Cash Discounts $17
Aug. 17 Inventory $1,743 Accounts Payable (Luis Co.) $1,743
Credit terms 2/10, n/30.
Lysiak Corporation uses an activity based costing system to assign overhead costs to products. In the first stage, two overhead costs--equipment depreciation and supervisory expense-are allocated to three activity cost pools--Machining, Order Filling, and Other--based on resource consumption. Data to perform these allocations appear below:
Overhead costs:
Equipment depreciation $ 47,000
Supervisory expense $ 6,000
Distribution of Resource Consumption Across Activity Cost Pools:
Activity Cost Pools
Machining Order Filling Other
Equipment depreciation 0.60 0.10 0.30
Supervisory expense 0.60 0.20 0.20
In the second stage, Machining costs are assigned to products using machine-hours (MHs) and Order Filling costs are assigned to products using the number of orders. The costs in the Other activity cost pool are not assigned to products. Activity data for the company's two products follow:
Activity:
MHs (Machining) Orders (Order Filling)
Product C9 6,900 200
Product U0 3,100 800
Total 10,000 1,000
What is the overhead cost assigned to Product C9 under activity-based costing?
Answer:
$23,122
Explanation:
Calculation to determine the overhead cost assigned to Product C9 under activity-based costing
First step is to calculate the cost allocation to machining activity and order filling
MACHINING
Equipment depreciation (0.60 : 0.10 : 0.30)
Machining=$47,000 x 0.60 = $28,200
Supervisory expense (0.60 : 0.20 : 0.20) Machining=$6,000 x 0.60 = $3600
Total $31,800
($28,200+$3,600)
ORDER FILLING
Equipment depreciation (0.60 : 0.10 : 0.30)
Order filling=$47,000 x 0.10 = $4,700
Supervisory expense (0.60 : 0.20 : 0.20)
Order filling=$6000 x 0.20 = $1,200
Total $5,900
($4,700+$1,200)
Second step is to calculate the Assign overhead costs to products:
Assign overhead costs to products:
Machining= $31,800 ÷ 10,000 MHs
Machining= $3.18 per MHOrder
Order Filling=$5,900 ÷ 1,000 orders
Order Filling = $5.90 per order
Now let calculate the Overhead cost for Product C9
Machining= $3.18 per MH × 6,900
Machining=$21,942
Order Filling= $5.90 per order × 200 Orders Order Filling=$1,180
TOTAL $23,122
($21,942+$1,180)
Therefore the overhead cost assigned to Product C9 under activity-based costing is $23,122
Using the supply and demand analysis of the market for reserves, indicate what happens to the federal funds rate, borrowed reserves, and nonborrowed reserves, holding everything else constant, under the following situations. a. The economy is surprisingly strong, leading to an increase in the amount of checkable deposits. b. Banks expect an unusually large increase in with-drawals from checking deposit accounts in the future. c. The Fed raises the target federal funds rate. d. The Fed raises the interest rate on reserves above the current equilibrium federal funds rate. e. The Fed reduces reserve requirements. f. The Fed reduces reserve requirements and then off-sets this action by conducting an open market sale of securities.
Answer:
The federal fund rate will increase, non borrowed reserves will decrease and no change in borrowed reserves.
Explanation:
Federal fund rate is an interest rate which banks pay off each night on depository funds. This rate can be above the discount rate because banks prefer to pay higher market rate than to borrow from Fed. When the fed raises target federal fund than federal fund rate will increase causing a decline in no borrowed reserves.
Bentwood Corporation uses the FIFO method in its process costing system. Data concerning the first processing department for the most recent month are listed below:
Beginning work-in-process inventory:
Units in beginning work-in-process inventory 1,700
Materials costs $32,300
Conversion costs $18,700
Percent complete with respect to materials 70%
Percent complete with respect to conversion 25%
Units started into production during the month 8,900
Units transferred to the next department during the month 7,700
Materials costs added during the month $154,600
Conversion costs added during the month $253,900
Ending work-in-process inventory:
Units in ending work-in-process inventory 2,900
Percent complete with respect to materials 80%
Percent complete with respect to conversion 35%
The cost per equivalent unit for conversion costs for the first department for the month is closest to:____.
a. $29.33.
b. $29.00.
c. $31.78.
d. $35.51.
Answer:
$31.28
Explanation:
Calculation to determine what The cost per equivalent unit for conversion costs for the first department for the month is closest to:
First step is to calculate the Total Conversion Cost
Total Conversion Cost=$253,900+$18,700
Total Conversion Cost=$$272,600
Second step is to calculate the Equivalent Units
Equivalent Units =( 7,700 x 100%) + (1,700 + 8,900 - 7,700 ×35%)
Equivalent Units =( 7,700 x 100%) + (2,900 x 35 %)
Equivalent Units =7,700+1,015
Equivalent Units = 8,715 units
Now let calculate the Cost per Equivalent Units using this formula
Cost per Equivalent Unit = Total Cost ÷ Total Equivalent Units
Cost per Equivalent Unit = $272,600 ÷ 8,715 units
Cost per Equivalent Unit = $31.28
Therefore The cost per equivalent unit for conversion costs for the first department for the month is closest to:$31.28
Teozocior.01.010
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.
Which of the following is true of downward communication?
a. Recording a project's results and accomplishments involves downward communication.
..
O b. The process of creating progress reports is an example of downward communication.
5.
c. Problem solving and clarifications in organizations involve downward communication.
7.
d. Orientation to a company's rules and practices is an element of downward communication.
8.
о
9.
10.
C
11.
Answer:
When the federal government spends more money than it receives in taxes in a ... spending over time in nominal dollars is misleading because it does not take ... defense spending as a share of GDP has generally declined since the 1960s, ... Healthcare expenditures include both payments for senior citizens (Medicare), ...
Explanation:
Park Co.'s wholly-owned subsidiary, Schnell Corp., maintains its accounting records in German marks. Because all of Schnell's branch offices are in Switzerland, its functional currency is the Swiss franc. Remeasurement of Schnell's 20X1 financial statements resulted in a $7,600 gain, and translation of its financial statements resulted in an $8,100 gain. What amount should Park report as a foreign exchange gain in its income statement for the year ended December 31, 20X1
Answer: $7600
Explanation:
The amount that Park should report as a foreign exchange gain in its income statement for the year ended December 31, 20X1 will be $7600.
We should note that when we want to determine the net income for a particular period, the translatation adjustments will not be included. Therefore the $8100 gain won't be included in the calculation. Hence, Park should report only $7600 gain.
The customer-service department at Park-E Bank complains it is unable to keep track of its new business clients as the department handling data compilation has failed to enable a free exchange of information between the two departments. This has hindered the customer-service department to follow up on its customers' queries and update their relationship status with the bank. This has also impacted the department's sales target. This scenario exemplifies conflict due to
Answer:
task interdependence
Explanation:
Task interdependence is a form of conflict that occurs when there is more than one department needed to complete a task, and when one of them fails, consequently the other is affected and the task is not completed effectively. This is the case of Park-E Bank, which complains that it is unable to keep up with its new commercial customers, as the department that deals with the compilation of data has failed to allow the free exchange of information between the two departments.
The interdependence of tasks is a conflict that affects organizational activities as a whole, and can bring essential problems for the correct flow of business, it is necessary then that there is a correct management, control and coordination of tasks to reduce the bottlenecks found in organizational processes and improve continuous improvement that is beneficial for all organizational systems to operate correctly.
Fortune, Inc., is preparing its master budget for the first quarter. The company sells a single product at a price of $25 per unit. Sales (in units) are forecasted at 40,000 for January, 60,000 for February, and 50,000 for March. Cost of goods sold is $12 per unit. Other expense information for the first quarter follows. Commissions 10 % of sales dollars Rent $ 17,000 per month Advertising 11 % of sales dollars Office salaries $ 74,000 per month Depreciation $ 55,000 per month Interest 13 % annually on a $210,000 note payable Tax rate 40 % Prepare a budgeted income statement for this first quarter. (Round your final answers to the nearest whole dollar.)
Answer:
Fortune, Inc.
Budgeted Income Statement for the first quarter ended March 31
Sales revenue $3,750,000
Cost of goods sold 1,800,000
Gross profit $1,950,000
Expenses:
Commission 375,000
Advertising 412,500
Office salaries 222,000
Depreciation 165,000
Interest expense 10,075
Total expenses $1,184,575
Net income $765,425
Explanation:
a) Data and Calculations:
Selling price per unit = $25
Forecast sales units:
January 40,000
February 60,000
March 50,000
Total sales for the quarter = 150,000 units
Sales revenue = $3,750,000 (150,000 * $25)
Cost of goods sold = $12 per unit
Cost of goods sold = $1,800,000 (150,000 * $12)
Commission = 10% of sales dollars
Commission = $375,000 ($3,750,000 * 10%)
Rent = $17,000 per month (Total for quarter = $51,000)
Advertising = 11% of sales dollars
Advertising = $412,500 ($3,750,000 * 11%)
Office salaries = $74,000 per month (Total for quarter = $222,000)
Depreciation = $55,000 per month (Total for quarter = $165,000
Interest expense = 13% of $310,000 annually
Interest expense for the quarter = $10,075 ($310,000 * 13% * 1/4)
JOURNALIZING SALES TRANSACTIONS. Enter the following transactions in a sales journal. Use a 6% sales tax rate.
May 1 Sold merchandise on account to J. Adams, $2,000, plus sales tax. Sale No. 488.
4 Sold merchandise on account to B. Clark, $1,800, plus sales tax. Sale No. 489.
8 Sold merchandise on account to A. Duck, $1,500, plus sales tax. Sale No. 490.
11 Sold merchandise on account to E. Hill, $1,950, plus sales tax. Sale No. 491.
Answer:
May 1
Dr Accounts Receivable- J. Adams2120
Cr Sales $2,000
Sales Tax Payable 120
May 4
Dr Accounts Receivable- B. Clark 1908
Cr Sales 1800
Cr Sales Tax Payable 108
May 8
Dr Accounts Receivable- A. Duck 1590
Cr Sales 1500
Cr Sales Tax Payable 90
May 11
Dr Accounts Receivable- E. Hill 2067
Cr Sales 1950
Cr Sales Tax Payable 117
Explanation:
Preparation of sales journal entries
May 1
Dr Accounts Receivable- J. Adams2120
(2,000+120)
Cr Sales $2,000 Sales Tax Payable 120
($2,000*6%)
May 4
Dr Accounts Receivable- B. Clark 1908
(1800+108)
Cr Sales 1800
Cr Sales Tax Payable 108
(1800*6%)
May 8
Dr Accounts Receivable- A. Duck 1590
(1500+90)
Cr Sales 1500
Cr Sales Tax Payable 90
(1500*6%)
May 11
Dr Accounts Receivable- E. Hill 2067
(1950+117)
Cr Sales 1950
Cr Sales Tax Payable 117
(1950*6%)
Expenditures for major additions, improvements and flight equipment modifications are capitalized when such costs are determined to extend the useful life of the asset or are part of the cost of acquiring the asset. Expenditures for equipment overhaul costs of engines or airframes prior to their operational use are capitalized as part of the cost of such assets as they are costs required to ready the asset for its intended use. Maintenance and repairs costs are charged to expense as incurred.
Assume that FedEx made extensive repairs on an existing building and added a new wing. The building is a garage and repair facility for delivery trucks that serve the Denver area. The existing building originally cost $720,000, and by the end of 2010 (10 years), it was half depreciated on the basis of a 20-year estimated useful life and no residual value. Assume straight-line depreciation was used. During 2011, the following expenditures related to the building were made:
a. Ordinary repairs and maintenance expenditures for the year, $7,000 cash.
b. Extensive and major repairs to the roof of the building, $122,000 cash. These repairs were completed on December 31, 2011.
c. The new wing was completed on December 31, 2011, at a cash cost of $230,000.
Required:
Apply the policies of FedEx.
Answer:
FedEx
Applying the policies of FedEx:
a and b. Total repairs and maintenance expenses to be charged to the income statement = $129,000 ($7,000 + $122,000).
c. The building extension cost of $230,000 will be capitalized.
The Building will now have a total cost value of $950,000 Accumulated Depreciation of $396,000.
Therefore, the net book value of building at the end of December 31, 2011 will be $554,000 ($950,000 - $396,000).
Explanation:
a) Data and Analysis:
Cost of existing building = $720,000
Book value of existing building = $360,000 ($720,000 * 10/20)
Transactions and adjustments during 2011:
a. Repairs and Maintenance Expenses $7,000 Cash $7,000
b. Repairs and Maintenance Expenses $122,000 Cash $122,000
c. Building extension $230,000 Cash $230,000
d. Depreciation Expense on existing building = $36,000 ($720,000/20).
e. Accumulated Depreciation on Building, Dec. 31, 2011 = $396,000 ($360,000 + $36,000)
11) Domergue Corp. currently has an EPS of $3.76, and the benchmark PE for the company is 21. Earnings are expected to grow at 5.1 percent per year. (4 pts.) a) What is your estimate of the current stock price? b) What is the target stock price in one year? c) Assuming the company pays no dividends, what is the implied return on the company’s stock over the next year?
Answer:
(a) 78.96
(b) 82.99
(c) 5.10
Explanation:
The current stock price can be calculated as follows
= 3.76 × 21
= 78.96
The target stock price in one year can be calculated as follows
= 3.76(1+5.1%)×21
= 3.76×(1+0.051)×21
= 3.76×1.051×21
= 82.99
The implied return on company's stock over one year can be calculated as follows
= 82.99-78.96/78.96
= 4.03/78.96
= 0.0510× 100
= 5.10
Speedy Delivery Company purchases a delivery van for $32,000. Speedy estimates that at the end of its four-year service life, the van will be worth $6,000. During the four-year period, the company expects to drive the van 130,000 miles. Actual miles driven each year were 35,000 miles in year 1 and 38,000 miles in year 2.
Required:
Calculate annual depreciation for the first two years of the van using each of the following methods.
Answer:
(1) Straight-line.
Year 1 depreciation expense = $6,500
Year 2 depreciation expense = $6,500
(2) Double-declining-balance.
Year 1 depreciation expense = $16,000
Year 2 depreciation expense = $8,000
(3) Activity-based.
Year 1 depreciation expense = $7,000
Year 1 depreciation expense = $7,600
Explanation:
Note: This question is not complete. The complete question is therefore provided before answering the question as follows:
Speedy Delivery Company purchases a delivery van for $32,000. Speedy estimates that at the end of its four-year service life, the van will be worth $6,000. During the four-year period, the company expects to drive the van 130,000 miles. Actual miles driven each year were 35,000 miles in year 1 and 38,000 miles in year 2.
Required:
Calculate annual depreciation for the first two years of the van using each of the following methods.
(1) Straight-line.
(2) Double-declining-balance.
(3) Activity-based.
The explanation of the answers is now given as follows:
(1) Straight-line.
Depreciable amount = Cost of the delivery van – Salvage value = $32,000 - $6,000 = $26,000
Annual depreciation rate = 1 / Number of useful years = 1 / 4 = 0.25, or 25%
Year 1 depreciation expense = Depreciable amount * Annual depreciation rate = $26,000 * 25% = $6,500
Year 2 depreciation expense = Depreciable amount * Annual depreciation rate = $26,000 * 25% = $6,500
(2) Double-declining-balance.
Note: The salvage value is taken care of in the computation of the depreciation expense for the last useful year under the double-declining-balance method.
Therefore, we have:
Cost of the delivery van = $32,000
Annual depreciation rate = Straight line annual depreciation rate * 2 = 25% * 2 = 50%
Year 1 depreciation expense = Cost of the delivery van * Annual depreciation rate = $32,000 * 50% = $16,000
Book value at the end of year 1 = Cost of the delivery van - Year 1 depreciation expense = $36,000 - $16,000 = $16,000
Year 2 depreciation expense = Book value at the end of year 1 * Annual depreciation rate = $16,000 * 50% = $8,000
(3) Activity-based.
Depreciable amount = Cost of the delivery van – Salvage value = $32,000 - $6,000 = $26,000
Depreciation rate = Actual miles driven each year / Expected driven miles for four years ……….. (1)
Depreciation expense for each year = Depreciable amount * Depreciation rate …………… (2)
Using equations (2), we have:
Year 1 depreciation expense = $26,000 * (35,000 / 130,000) = $7,000
Year 1 depreciation expense = $26,000 * (38,000 / 130,000) = $7,600
In its first year of operations, Crane Company recognized $31,700 in service revenue, $7,700 of which was on account and still outstanding at year-end. The remaining $24,000 was received in cash from customers. The company incurred operating expenses of $16,600. Of these expenses, $12,690 were paid in cash; $3,910 was still owed on account at year-end. In addition, Crane prepaid $3,260 for insurance coverage that would not be used until the second year of operations.
Required:
Calcuate the first year's net earnings under the cash basis of accounting, and calculate the first years net earnings under the accrual basis of accouriting.
Answer:
Under the cash basis, expenses and revenue are recorded in the period the cash is received or spent.
Under the Accrual basis, expenses and revenue are recorded in the period incurred.
Under Cash basis:
= Cash Revenue - cash expenses - Prepaid expenses
= 24,000 - 12,690 - 3,260
= $8,050
Under Accrual basis:
= Revenue for the year - Expenses for the year
= 31,700 - 16,600
= $15,700
Suppose the economy is experiencing a recession. The output gap is hovering at −7%, causing higher than normal unemployment. Using the Fed model, complete the following passages to compare and contrast how monetary policy and fiscal policy can impact the economy. a. The Federal Reserve can reduce the to stimulate greater output and employment. The federal government can increase to help ease the recession. b. If both monetary and fiscal policy are used, the MP curve will shift , and the IS curve will shift to the . Both shifts will increase , and t
Answer:
a. The Federal Reserve can reduce the interest rates to stimulate greater output and employment. The federal government can increase government spending to help ease the recession.
The Fed can reduce interest rates by engaging in expansionary monetary policy that would then make it easier to borrow funds for investment. The Federal government can also increase spending as this will put more money into the economy to help it start moving again.
b. If both monetary and fiscal policy are used, the MP curve will shift downward, and the IS curve will shift to the right. Both shifts will increase income.
If both monetary and fiscal policy are used, companies will start producing again and hiring more people which will shift the Marginal Productivity curve downward. The IS curve will also shift to the right and both to these are indicators of an increase in income.
Manufacturers Southern leased high-tech electronic equipment from International Machines on January 1, 2021. International Machines manufactured the equipment at a cost of $94,000. Manufacturers Southern's fiscal year ends December 31. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the tables provided.) Related Information: Lease term 2 years (8 quarterly periods) Quarterly rental payments $18,200 at the beginning of each period Economic life of asset 2 years Fair value of asset $138,287 Implicit interest rate 6% Required: 1. Show how International Machines determined the $18,200 quarterly lease payments. 2. Prepare appropriate entries for International Machines to record the lease at its beginning, January 1, 2021, and the second lease payment on April 1, 2021.
Answer:
1. $18,200 per quarter
2. 1-Jan-21
Dr Lease Receivable $138,287
Dr Cost of Goods Sold $94, 000
Cr Inventory of Equipment $94,000
Cr Sales Revenue $138,287
Dr Cash $18,200
Cr Lease Receivable $18,200
1-Apr-21
Dr Cash $18,200
Cr Lease Revenue $1,801
Cr Lease Receivable $16,399
Explanation:
1. Calculation to Show how International Machines determined the $18,200 quarterly lease payments
First step is to find the Present value of annuity at period start
Lease term=n = 2 x 4 quarters
Lease term=n= 8 periods
Fair value of asset = $138,287
Implicit interest rate, i = 6%, quarterly rate = 6%/4 Implicit interest rate= 1.5%
Present value of annuity at period start at 1.5%, 8 periods
Present value of annuity at period start = 7.5982
Now let determine the quarterly payments
Quarterly payments= $138,287/7.5982
Quarterly payments = $18,200 per quarter
Therefore the quarterly lease payments is $18,200
2) Preparation of the appropriate entries for International Machines to record the lease at its beginning, January 1, 2021, and the second lease payment on April 1, 2021.
1-Jan-21
Dr Lease Receivable $138,287
Dr Cost of Goods Sold $94, 000
Cr Inventory of Equipment $94,000
Cr Sales Revenue $138,287
(To record lease at its beginning)
Dr Cash $18,200
Cr Lease Receivable $18,200
(To record lease at its beginning)
1-Apr-21
Dr Cash $18,200
Cr Lease Revenue $1,801
Cr Lease Receivable $16,399
(To record second lease payment)
Calculation of lease revenue as on April 1, 2021
Lease revenue = ($138,287 – $18,200) x 1.5%
Lease revenue= $120,087×1.5%
Lease revenue= $1,801
Lease receivable = $18,200 – $1,801
Lease receivable = $16,399
Current Attempt in Progress
Cullumber Company entered into these transactions during May 2022, its first month of operations.
1. Stockholders invested $42,500 in the business in exchange for common stock of the company.
2. Purchased computers for office use for $31,900 from Ladd on account.
3. Paid $2,900 cash for May rent on storage space.
4. Performed computer services worth $17,900 on account.
5. Performed computer services for Wharton Construction Company for $5,400 cash.
6. Paid Western States Power Co. $8,300 cash for energy usage in May.
7. Paid Ladd for the computers purchased in (2).
8. Incurred advertising expense for May of $1,600 on account.
9. Received $14,000 cash from customers for contracts billed in (4).
Create a tabular analysis, show the effect of each transaction on the accounting equation. Put explanations for changes to Stockholders' Equity in the far right column. (If a transaction causes a decrease in Assets, Liabilities or Stockholders' Equity, place a negative sign (or parentheses) in front of the amount entered for the particular Asset, Liability or Equity item that was reduced.)
Answer:
Assets = Liabilities + Stockholders' Equity = $68,600
Explanation:
Note: See the attached excel file for the tabular analysis of the effect of each transaction on the accounting equation.
From the attached excel file, we have:
Assetes = Total assets balance = = $18,800 + $17,900 + 31,900 = $68,600
Liabilities = Total liabilities balance = $1,600
Stockholders' Equity = Total Common Stock balance + Total Net Income balance = $42,500 + $25,500 = $67,000
Liabilities + Stockholders' Equity = $1,600 + $67,000 = $68,600
Therefore, we have:
Assets = Liabilities + Stockholders' Equity = $68,600
Each service starts on a different date because the services depend on each other. Enter the starting dates for the remaining services as follows:
a. In cell D6, enter a formula without using a function that adds 4 days to the value in cell 06.
b. In cell E6, enter a formula without using a function that subtracts 3 days from the value in cell C6
c. In cell F6, enter a formula without using a function that adds 2 days to the value in cell E6
d. In cell G6, enter a formula without using a function that adds 2 days to the value in cell C6.
Answer:
a. Copy the range of cell D7:D9 then select cell D6 and paste the selection with date format selected. The function will be represented in formula bar with adding +4;365 days.
b. Copy the range of cell D7:D9 then select cell D6 and paste the selection with date format selected. The function will be represented in formula bar with adding -3;365 days.
c. In the formula bar type =365 days; +2 : E6
d. In the formula bar type =365 days ; +2 : C6
Explanation:
Excel is a software which helps the users to easily calculate complex calculation with just one function input. The users can create worksheets using the excel and then link those worksheets with each other. The data can be displayed in the form of table or simple text. It has multiple options to create annual day wise filtered worksheets.
Roy DeSoto earns a regular hourly salary of $24.00. He is paid time-and-a-half for all hours in excess of 40 in the week. For the week ended March 8, 20X1, he worked a total of 60 hours. His gross wages year to date, prior to his March 8, paycheck, are $12,160. Social Security Tax is 6.2% on a maximum of $132,900 of gross wages per year, Medicare Tax is 1.45%, federal unemployment tax is 0.6% and state unemployment tax is 4.2%, both on a maximum of $7,000 of gross wages per year. What is the employer's payroll tax expense for Roy for the week ended March 8, 20X1