Answer:
Value of Bond =$718.8
Explanation:
The value of the bond is the present value(PV) of the future cash receipts expected from the bond. The value is equal to present values of interest payment plus the redemption value (RV) discounted at the yield rate
Value of Bond = PV of interest + PV of RV
The PV of interest payment
A ×(1- (1+r)^(-n))/r
Interest payment = 5%× 1000 = 50
PV = 50× (1- 1.08^(-18))/0.08 = 468.59
PV of redemption value
PV = RV× (1+r)^(-n)
PV = 1000× 1.18^(-18) = 250.24
The value of bond = 468.59 + 250.24= 718.84
The value of Bond = $718.84
The real interest rate earned is the Group of answer choices same as the nominal interest rate when inflation is moderate cost of borrowing in current consumer prices cost of borrowing in current producer prices cost of borrowing adjust for the rate of change in the price level nominal interest rate adjusted for the growth rate of the economy
Answer:
cost of borrowing adjust for the rate of change in the price level
Explanation:
The real interest rate earned is the rate where the borrowing cost would be adjusted for the change in the rate in the level of the price as the real interest rate represent the interest rate that should be adjusted to the inflation
Hence, according to the given options, second option is correct
hence, the same would be relevant
Which best explains why banks consider interest on loans to be important?
Answer:
what are the options as answers?
Explanation:
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.
LaMont works for a company in downtown Chicago. The company encourages employees to use public transportation (to save the environment) by providing them with transit passes at a cost of $290 per month. rev: 09_23_2020_QC_CS-230013a. If LaMont receives one pass (worth $290) each month, how much of this benefit must he include in his gross income each year
Answer:
The IRS sets the limit on transportation benefits provided by an employer, for 2021, this limit is $270 per month, or $3,240 per year.
The total benefit received by LaMont should = 12 x $290 = $3,480
This means that he must include $3,480 - $3,240 = $240 as part of his annual gross income.
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.
A portfolio manager plans to use a Treasury bond futures contract to hedge a bond portfolio over the next three months. The portfolio is worth $100 million and will have a duration of 5.6 years in three months. The futures price is 112, and each futures contract is on $100,000 of bonds. The bond that is expected to be cheapest to deliver will have a duration of 9.0 years at the maturity of the futures contract. What position in futures contracts is required
Answer: 556
Explanation:
The position in futures contracts that is required will be calculated thus:
= (100,000,000 × 5.6) / (112,000 × 9)
= 560,000,000 / 1,008,000
= 555.5
= 556 approximately
Therefore, based on the calculation, the answer is 556.
what is the meaning of marketing
Answer:
Marketing is a set of activities related to creating, communicating, delivering, and exchanging offerings that have value for others.
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)
Based on your understanding of P/E ratios, in which of the following situations would the average trailing P/E ratio (current price divided by earnings per share over the previous 12 months) of the S&P 500 Index be higher? The outlook for the economy and the markets is for a downturn. The outlook for the economy and the markets is for an improvement.
Answer:
The outlook for the economy and the markets is for an improvement.
Explanation:
p/e ratio = price / earning
the higher the equity, the lower the ratio
If the p/e ratio is expected to be higher, it means that the equity would have to be lower this year than next year .
this implies that earnings would be higher next year and p/e ratio would be lower. this means there is a positive economic outlook
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
Paul, a calendar year single taxpayer, has the following information for 2019 (not 2020): AGI State income taxes State sales tax Real estate taxes Gambling losses (gambling gains were $ 12,000) $ 175,000 13,500 3,000 18,900 6,800 Paul's allowable itemized deductions for 2019 are: a. $ 10,000 b. $ 16,800 C. $ 39,200 d. $ 42,200 e. None of these.
Answer:
C. $ 39,200
Explanation:
Calculation to determine what Paul's allowable itemized deductions for 2019 are
Using this formula
Itemized deduction = State income taxes + Real state taxes + Gambling losses
Let plug in the formula
Itemized deduction = $13,500 + $18,900+ $6,800
Itemized deduction =$39,200
Therefore Paul's allowable itemized deductions for 2019 are $39,200
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
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
difference between real flows and monetary flows
Do airlines practice price discrimination LOADING... ? Explain. Airlines A. engage in price discrimination by charging business travelers and leisure travelers different prices . B. do not engage in price discrimination because they charge lower prices to passengers who will stay at their destination over a Saturday night. C. engage in price discrimination by maintaining the same price on seats even if seats will not be sold . D. do not engage in price discrimination because the marginal cost of flying one additional passenger is low . E. do not engage in price discrimination because their passengers have similar demands.
Answer:
A. engage in price discrimination by charging business travelers and leisure travelers different prices.
Explanation:
Yes, airlines practice price discrimination. They engage in price discrimination by charging business travelers and leisure travelers different prices for the same distance travelled.
Price can be defined as the amount of money that is required to be paid by a buyer (customer) to a seller (producer) in order to acquire goods and services.
In sales and marketing, pricing of products is considered to be an essential element of a business firm's marketing mix because place, promotion and product largely depends on it.
Price discrimination refers to the situation in which a business firm sells an identical product to different consumers at different selling price based on reasons that are not in any way associated or related with its manufacturing cost.
. Calculate the estimated sales, by month and in total, for the third quarter. 2. Calculate the expected cash collections, by month and in total, for the third quarter. 3. Calculate the estimated quantity of beach umbrellas that need to be produced in July, August, September, and October. 4. Calculate the quantity of Gilden (in feet) that needs to be purchased by month and in total, for the third quarter. 5. Calculate the cost of the raw material (Gilden) purchases by month and in total, for the third quarter. 6. Calculate the expected cash disbursements for raw material (Gilden) purchases, by month and in total, for the third quarter.
Question Completion:
Milo Company manufactures beach umbrellas. The company is preparing detailed budgets for the third quarter and has assembled the following information to assist in the budget preparation: The Marketing Department has estimated sales as follows for the remainder of the year (in units): July 38,500 October 28,500 August 87,000 November 15,000 September 56,000 December 15,500 The selling price of the beach umbrellas is $14 per unit. All sales are on account. Based on past experience, sales are collected in the following pattern: 30% in the month of sale 65% in the month following sale 5% uncollectible Sales for June totaled $504,000. The company maintains finished goods inventories equal to 15% of the following month’s sales. This requirement will be met at the end of June. Each beach umbrella requires 4 feet of Gilden, a material that is sometimes hard to acquire. Therefore, the company requires that the ending inventory of Gilden be equal to 50% of the following month’s production needs. The inventory of Gilden on hand at the beginning and end of the quarter will be: June 30 91,550 feet September 30 ? feet Gilden costs $0.60 per foot. One-half of a month’s purchases of Gilden is paid for in the month of purchase; the remainder is paid for in the following month. The accounts payable on July 1 for purchases of Gilden during June will be $49,290. Required: 1.
Answer:
Milo Company
July Aug. Sept. Total
1. Estimated sales $539,000 $1,218,000 $784,000 $2,541,000
2. Cash collections $489,300 $715,750 $1,026,900 $2,231,950
July Aug. Sept. Oct.
3. Production units 45,775 72,350 51,875 26,475
July Aug. Sept. Total
4. Quantity of Gilden (feet) 236,250 248,450 156,700 641,400
5. Cost of Purchases $141,750 $149,070 $94,020 $384,840
6. Cash disbursements for raw
material purchases $120,165 $145,410 $121,545 $387,120
Explanation:
a) Data and Calculations:
Selling price of the beach umbrellas = $14 per unit
June July Aug. Sept. Oct. Nov. Dec.
Estimated
sales 38,500 87,000 56,000 28,500 15,000 15,500
Sales $504,000 539,000 1,218,000 784,000 399,000 210,000 217,000
Sales Collection:
June July Aug. Sept. Total
Sales on credit 539,000 1,218,000 784,000 $2,541,000
Sales Collection:
30% month of sale 161,700 365,400 235,200 762,300
65% month following 327,600 350,350 791,700 1,469,650
5% uncollectible
Total collections $489,300 $715,750 $1,026,900 $2,231,950
July August September October
Beginning Inventory $75,600 $80,850 $182,700 $117,600
Ending Inventory 80,850 182,700 117,600 59,850
Sales 539,000 1,218,000 784,000 399,000
Finished Goods Inventory:
June July Aug. Sept. Oct. Nov. Dec.
Estimated
sales 36,000 38,500 87,000 56,000 28,500 15,000 15,500
Ending 5,775 13,050 8,400 4,275 2,250
Available 41,775 51,550 85,400 60,275 30,750
Beginning 5,400 5,775 13,050 8,400 4,275
Production 36,375 45,775 72,350 51,875 26,475
Raw materials inventory:
June July Aug. Sept. Oct.
Production units 36,375 45,775 72,350 51,875 26,475
Production needs 145,500 183,100 289,400 207,500 105,900
Ending inventory 91,550 144,700 103,750 52,950
Available materials 237,050 327,800 393,150 260,450
Beginning inventory 91,550 144,700 103,750 52,950
Purchases 236,250 248,450 156,700
Cost of Purchases $141,750 $149,070 $94,020
Payment for purchases:
Accounts payable $49,290
50% month of purchase 70,875 74,535 47,010
50% following purchase 70,875 74,535
Total payments $120,165 $145,410 $121,545
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.
Vaughn, Inc. had net sales in 2020 of $1,410,300. At December 31, 2020, before adjusting entries, the balances in selected accounts were Accounts Receivable $348,200 debit, and Allowance for Doubtful Accounts $2,940 credit. If Vaughn estimates that 10% of its receivables will prove to be uncollectible. Prepare the December 31, 2020, journal entry to record bad debt expense.
Answer:
Date Account Title Debit Credit
Dec. 31 2020 Bad Debt expense $31,880
Allowance for Doubtful Accounts $31,880
Explanation:
Bad debt expense for the period:
= (Estimate of uncollectible receivables) - Allowance for Doubtful accounts credit balance
= (348,200 * 10%) - 2,940
= $31,880
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
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
All details related to an employee's earnings deductions and net pay throughout the year would be found in
Answer:
All details related to an employee's earnings deductions and net pay throughout the year would be found in the individual earnings record.
Explanation:
A random Quizlet had the answer when I searched the question up lol
This year Randy paid $28,900 of interest on his residence. (Randy borrowed $462,000 to buy his residence, and it is currently worth $512,000.) Randy also paid $2,800 of interest on his car loan and $4,650 of margin interest to his stockbroker (investment interest expense). How much of this interest expense can Randy deduct as an itemized deduction under the following circumstances
Answer:
a. Interest Deductible = $31,100
b. Interest Deductible = $28,900
Explanation:
Note: This question is not complete. The complete question is therefore provided before answering the question as follows:
This year Randy paid $28,900 of interest on his residence. (Randy borrowed $462,000 to buy his residence, and it is currently worth $512,000.) Randy also paid $2,800 of interest on his car loan and $4,650 of margin interest to his stockbroker (investment interest expense). How much of this interest expense can Randy deduct as an itemized deduction under the following circumstances?
a. Randy received $2,200 of interest this year and no other investment income or expenses. His AGI is $75,000.
Interest Deductible $.......
b. Randy had no investment income this year, and his AGI is $75,000.
Interest Deducttible $.......
The explanation of the anwer is now given as follows:
a. Randy received $2,200 of interest this year and no other investment income or expenses. His AGI is $75,000.
Randy may choose to deduct the interest of $28,900 on his residence as an itemized deduction.
The $2,800 of interest on his car loan is a nondeductible personal interest.
The $2,200 interest income received can be regarded as an investment income.
The $4,500 margin interest to his stockbroke is likely investment interest. But since Randy has only $2,200 interest income, his deduction is limited to the $2,200.
Therefore, we have:
Interest Deductible = Interest on his residence + $2,200 = $28,900 + $2,200 = $31,100
b. Randy had no investment income this year, and his AGI is $75,000.
Since there is no investment income, Randy can only dedcut the interest of $28,900 on his residence based on the explanation in part a above.
Therefore, we have:
Interest Deductible = $28,900
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
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
A manufacturing company applies factory overhead based on direct labor hours. At the beginning of the year, it estimated that factory overhead costs would be $341,900 and direct labor hours would be 48,900. Actual manufacturing overhead costs incurred were $307,800, and actual direct labor hours were 52,800. What is the predetermined overhead rate per direct labor hour
Answer:
See below
Explanation:
With regards to the above, the predetermined overhead rate is computed below.
Predetermined overhead rate = Estimated factory overhead cost / Estimated direct labor hours
Given that;
Estimated factory overhead cost = $341,900
Estimated direct labor hours = 48,900
Therefore,
Predetermined overhead rate per direct labor hour
= $341,000 / 48,900
= $6.97 per direct labor hour
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.
Motorcycle Manufacturers, Inc. projected sales of 51,100 machines for the year. The estimated January 1 inventory is 6,460 units, and the desired December 31 inventory is 7,130 units. What is the budgeted production (in units) for the year
Answer:
51,770 units
Explanation:
With regards to the above, the budgeted production (in unit) for the year is computed as;
= Sales - Beginning inventory + Ending inventory
Given that ;
Sales = 51,100
Beginning inventory = 6,460
Ending inventory = 7,130
Budgeted production in units for the year = 51,100 - 6,460 + 7,130 = 51,770 units
Core Corporation reported current earnings and profits of $250,000. Core distributed a building with an adjusted basis of $170,000 and a fair market value of $230,000 to its sole shareholder. The building had a mortgage of $90,000, which the shareholder will assume. What is the amount of the dividend received by the shareholder?
A. $80,000.
B. $140,000.
C. $230,000.
D. $250,000.
Answer:
B. $140,000
Explanation:
The total cost of acquiring an asset, including the installation, commission, transportation and other relevant fees is known as adjusted basis. The fair market value is the value an asset would yield when sold. It is an amount that would be received in return when an asset is sold.
Therefore, the shareholders would receive dividend at the fair market value adjusted for the mortgage balance
= $230,000 - $90,000
= $140,000
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.