Solution :
Production Budget Quarter 2 Quarter 3
Sales 76000 68000
Add:desired closing inventory 3400 4800
Less: opening inventory 3800 3400
Production budget 75600 69400
Material Budget Quarter 2
Consumption 226800 (3 units x 75600)
Add:desired closing inventory 41640 (20% of the subsequent quarter)
(69400 x 3 x 0.20)
Less:opening inventory 45360 (20% of the current quarter)
Raw material to be purchased 223080
g Novak Corp. started the year with $73200 in its Common Stock account and a credit balance in Retained Earnings of $53700. During the year, the company earned net income of $58600, and declared and paid $24400 of dividends. In addition, the company sold additional common stock amounting to $34200. As a result, the balance in retained earnings at the end of the year would be
Answer:
the ending retained earnings balance is $87,900
Explanation:
The computation of the ending retained earnings balance is shown below:
= opening retained earning balance + net income - dividend paid
= $53,700 + $58,600 - $24,400
= $87,900
Hence, the ending retained earnings balance is $87,900
We simply applied the above formula
Consider the following data that gives the quantity produced and unit price for three different goods across two different years to answer the following questions. Assume that the base year is 2012. Good2012 Price2012 Quantity2013 Price2013 Quantity A$2.00 500$2.50600 B$4.001,000$5.00900 C$2.00 200$1.00300 What was the real gross domestic product (GDP) in 2013
Answer:
$5400
Explanation:
Gross domestic product is the total sum of final goods and services produced in an economy within a given period which is usually a year
GDP calculated using the expenditure approach = Consumption spending by households + Investment spending by businesses + Government spending + Net export
Real GDP is GDP calculated using base year prices. Real GDP has been adjusted for inflation.
($2 x 600) + ($4 x 900) + ($2 x 300) = $5400
Changes in population can:_________.
a. cause the price of a good or service to decrease in an area but cannot cause the price to increase.
b. shift the demand curve of a good or service in an area.
c. cause the price of a good or service to increase in an area but cannot cause the price to decrease.
d. alter the supply of a good or service in an area.
e. shift the supply curve of a good or service in an area.
Answer:
I'm thinking it is C. and D (if multiple choice)
Answer:
The Answer is C
Explanation:
It wouldn't go down if more people will be able to buy the good
the point where total expenses equals to total income?
Answer:
yfku
Explanation:
Suppose that the total revenue received by a company selling basketballs is $600 when the price is set at $60 per basketball and $600 when the price is set at $40 per basketball. Without using the midpoint formula, identify whether demand is elastic, inelastic, or unit-elastic over this price range.
Answer:
Unit elastic
Explanation:
Price elasticity of demand measures the responsiveness of quantity demanded to changes in price of the good.
Price elasticity of demand = percentage change in quantity demanded / percentage change in price
If the absolute value of price elasticity is greater than one, it means demand is elastic. Elastic demand means that quantity demanded is sensitive to price changes.
Demand is inelastic if a small change in price has little or no effect on quantity demanded. The absolute value of elasticity would be less than one
Demand is unit elastic if a small change in price has an equal and proportionate effect on quantity demanded. Demand is unit elastic if total revenue remains the same over different prices
Sigma Corporation applies overhead cost to jobs on the basis of direct labor cost. Job V, which was started and completed during the current period, shows charges of $6,700 for direct materials, $9,500 for direct labor, and $6,270 for overhead on its job cost sheet. Job W, which is still in process at year-end, shows charges of $4,100 for direct materials and $4,100 for direct labor.
Required:
Calculate the overhead cost be added to Job W at year-end
Answer:
Job W= $2,706
Explanation:
First, we need to calculate the predetermined overhead rate based on allocated overhead to Job V:
Job V:
Direct labor= $9,500
Allocated overhead= $6,270
Allocated MOH= Estimated manufacturing overhead rate* Actual amount of allocation base
6,270= Estimated manufacturing overhead rate*9,500
6,270/9,500= Estimated manufacturing overhead rate
Estimated manufacturing overhead rate= $0.66 per direct labor dollar.
Now, for Job W:
Job W= 0.66*4,100
Job W= $2,706
Most interest-paying checking accounts exhibit characteristics of both checking and savings accounts. Specifically, they earn relatively high rates of interest, especially compared with regular savings accounts, and allow relatively limited check-writing privileges. They are available through depository and nondepository institutions, including commercial banks, savings banks, credit unions, stock brokerage firms, mutual funds, and other financial services companies. What are some of the important characteristics of the following four major types of interest-paying checking accounts?
a. AMA: Asset Management Accounts
b. MMDA: Money Market Deposit Accounts
c. MMMF: Money Market Mutual Funds
d. NOW: Negotiable order of Withdrawal
Answer:
Some of the important characteristics are explained below:
a. AMA (Assets management accounts):
This account offers a various service to the account holders such as verifying the accounts, debit or credit card facilities, transfers of money between the accounts of account holders and provides facility of lower interest rate on loan.
b. MMDA (Money market deposit accounts):
This is a saving account which helps to the account holders in earning higher rate of annual yield as compared to the traditional savings account. This account needs a higher minimum balance in accounts of the accounts holder as compared to the standard savings bank account.
c. MMMF (Money market mutual funds):
This is a account which facilitates to the individual to invest their money in debt or securities for a short term period and they can be withdrawal their money when they require or needs the money.
d. NOW (Negotiable order of withdrawal):
This is the interest earnings account which facilitates to the account holders in making the drafts in against of the money which they deposit with their respective banks.
George Gershwin Co. sold $2,000,000 of 10%, 10-year bonds at 104 on January 1, 2020. The bonds were dated January 1, 2020, and pay interest on July 1 and January 1. If Gershwin uses the straight-line method to amortize bond premium or discount, determine the amount of interest expense to be reported on July 1, 2020, and December 31, 2020.
Answer:
July 1, 2020 $96,000
December 31, 2020 $96,000
Explanation:
Calculation to determine the amount of interest expense to be reported on July 1, 2020, and December 31, 2020.
Firststep is to get calculate the Premium amortization (Straight-line)
Issue price of the bonds $2,080,000
($2,000,000 x 1.04)
Less Par value of bonds ($2,000,000)
Premium on bonds payable $80,000
÷ Numbet of interest payments 20 times
(10 years x 2 times)
= Premium amortization (Straight-line) $4,000
($80,000÷20 times)
Now let calculate the Interest expense
Interest payment $100,000
(2,000,000 x 10% x 6/12)
Less Premium amortization ($4,000)
Interest expense $96,000
($100,000-$4,000)
Hence,using the straight line method, Interest expense will be $96,000 for every time.
Therefore the amount of interest expense to be reported on July 1, 2020 is $96,000, and December 31, 2020 is $96,000
Solivan Corp. incurred the following costs during the current year:
Construction of preproduction prototypes $180,000
Testing in search of process alternatives 110,000
Design of tools, jigs, molds, and dies involving new technology 115,000
Engineering follow-through in an early phase of commercial production 80,000
Seasonal or other periodic changes to existing products 105,000
In its income statement, Solivan should report research and development expense of:________
a. $295,000
b. $370,000
c. $405,000
d. $375,000
Answer:
c. $405,000
Explanation:
Calculation of R$D Expenses to be report in Income statement
Construction of pre-production prototypes $180,000
Testing in search of process alternatives $110,000
Design of tools, jigs, molds, and dies $115,000
involving new technology
Total R&D Expenses $405,000
Note: Engineering follow-through in an early phase of commercial production & Seasonal or other periodic changes to existing products are excluded from calculation of Research and Development Expenses.
Question
Felicia Rashad Corporation has pretax financial income (or loss) equal to taxable income (or loss) from 2006 through 2014 as follows.
Income (Loss) Tax Rate
2006 $29,000 30 %
2007 40,000 30 %
2008 17,000 35 %
2009 48,000 50 %
2010 (150,000 ) 40 %
2011 90,000 40 %
2012 30,000 40 %
2013 105,000 40 %
2014 (60,000) 45 %
Pretax financial income (loss) and taxable income (loss) were the same for all years since Rashad has been in business. Assume the carryback provision is employed for net operating losses. In recording the benefits of a loss carryforward, assume that it is more likely than not that the related benefits will be realized.
a) What entries for income taxes should be recorded for 2010? .
b) Indicate what the income tax expense portion of the income statement for 2010 should look like. Assume all income (loss) relates to continuing operations.
c)What entry for income taxes should be recorded in 2011?
d) How should the income tax expense section of the income statement for 2011 appear?
e) what entry for income taxes should be recorded in 2014
f) how should the income tax expense section of the statement for 2104 appear to be ?
?
Answer:
A. Dr Deferred Tax Asset 60,000.00
Cr Deferred Tax 60,000.00
B. Income Statement (Partial)
Current Tax -
Deferred Tax (60,000.00)
Total Tax (60,000.00)
C.Dr Deferred Tax Asset 36,000
Cr Deferred Tax 36,000
D. Income Statement (Partial)
Current Tax -
Deferred Tax 36,000
Total Tax 36,000
E. Dr Deferred Tax Asset 27,000
Cr Deferred Tax 27,000
F. Income Statement (Partial)
Current Tax -
Deferred Tax 27,000
Total Tax 27,000
Explanation:
A. Calculation for what the entries for income taxes should be recorded for 2010
Entries for Income tax for 2010
Dr Deferred Tax Asset 60,000.00
Cr Deferred Tax 60,000.00
2010 (150,000 *40 %)
(To record timing difference of carry forward losses)
b) Indication for what the income tax expense portion of the income statement for 2010 should look like. :
Felicia Rashad Corporation
Income Statement (Partial)
Current Tax -
Deferred Tax (60,000.00)
Total Tax (60,000.00)
c) Calculation for what the entries for income taxes should be recorded for 2011
Dr Deferred Tax Asset 36,000
Cr Deferred Tax 36,000
2011 (90,000* 40 %)
(To record deferred tax asset utilization)
d) Income tax expense section of the income statement for 2011 appear
Felicia Rashad Corporation
Income Statement (Partial)
Current Tax -
Deferred Tax 36,000
Total Tax 36,000
e) Calculation for what the entries for income taxes should be recorded for 2014
Dr Deferred Tax Asset 27,000
Cr Deferred Tax 27,000
2014 (60,000*45 %)
(To record deferred tax asset utilization)
f) Income tax expense section of the income statement for 2014 appear
Felicia Rashad Corporation
Income Statement (Partial)
Current Tax -
Deferred Tax 27,000
Total Tax 27,000
When British regulators were forced to suspend the license of a flu vaccine plant in Liverpool operated by the Chiron Corporation due to concerns over bacterial contamination. As a result, the number of flu vaccines available in the United States market decreased by 48 million doses. This was nearly half of the total supply of vaccines in the market.
a) use a supply and demand diagram to illustrate the impact of this event on the market to vaccines in the United States. What impact will this have on the equilibrium price and equilibrium quantity in the U.S. vaccine market?
b) What impact will this have on producer and consumer surplus? Briefly explain
Explanation:
The answer to this question is contained in the attachment. The graph has been used to explain the solution.
A. As license got suspended price rose to p1 as quantity fell from q to q1.
So quantity decreased and price rose.
B. The area market csps, D ands cs were consumer surpluses , after the decrease in amount of vaccines in the market, consumer surplus decreased to area cs, csps became part of producer surplus. Triangle d is the deadweight loss caused by fall in quantity.
Ps and d' are initial producer surplus. Producer surplus after decrease in vaccine can be seen in ps and csps. D' is the dead weight loss as price decreases.
Whether to pay a lawmaker for giving a speech at your company is an ethical
dilemma that deals with
O A. lobbying
B. awarding honoraria
c. professional standards
D. gift giving
Answer: D
Explanation:
Answer:
D. gift giving
Explanation:
The Cheyenne Hotel in Big Sky, Montana, has accumulated records of the total electrical costs of the hotel and the number of occupancy-days over the last year. An occupancy-day represents a room rented for one day. The hotel's business is highly seasonal, with peaks occurring during the ski season and in the summer.
Month Occupancy-Days Electrical Costs
January 1,736 $4,127
February 1,904 $4,207
March 2,356 $5,083
April 960 $2,857
May 360 $1,871
June 744 $2,696
July 2,108 $4,670
August 2,406 $5,148
September 840 $2,691
October 124 $1,588
November 720 $2,454
December 1,364 $3,529
Required:
a. Using the high-low method, estimate the fixed cost of electricity per month and the variable cost of electricity per occupancy-day.
b. What other factors other than occupancy-days are likely to affect the variation in electrical costs from month to month?
Answer:
Total cost= 1,395 + 1.56x
x= number of units of activity
Explanation:
To calculate the unitary and fixed costs, we need to use the following formulas:
Variable cost per unit= (Highest activity cost - Lowest activity cost)/ (Highest activity units - Lowest activity units)
Variable cost per unit= (5,148 - 1,588) / (2,406 - 124)
Variable cost per unit= $1.56
Fixed costs= Highest activity cost - (Variable cost per unit * HAU)
Fixed costs= 5,148 - (1.56*2,406)
Fixed costs= $1,395
Fixed costs= LAC - (Variable cost per unit* LAU)
Fixed costs= 1,588 - (1.56*124)
Fixed costs= $1,395
The total cost is given by:
Total cost= 1,395 + 1.56x
x= number of units of activity
The electrical costs can vary with the season. In summer a higher electricity use is required to cool down the rooms and, some artifacts such as freezers and refrigerators usage increase. In winter the days are shorter, artificial lighting increases.
On March 31, 2012, Destin Incorporated reported the following balance sheet:
Assets
Cash 3,000
Inventory 14,000
Prepaid Insurance 3,000
Equipment (net) 20.000
Total Assets 40,000
Liabilities & Owners' Equity
Loan Payable 10,000
Common Stock 25,000
Retained Eamings 5,000
Total Liabilities and OE 40,000
During the month ended April 30, 2012, Destin reports the following activities:
They earn revenue totaling $16,000 related to selling inventory, all received in cash. The cost of the inventory sold is $9,000.
Employees earn $2,000, all of which is paid in cash during April.
Other operating expense total $1,000, all paid in cash during April.
They purchase inventory for cash at a total cost of $10,000.
Other information:
A. Depreciation on the equipment is $1,000 per month.
B. The insurance policy was purchased on January 1, 2012, and covers six months.
Required:
1. Calculate Destin's net income for the month ended April 30, 2012.
2. Calculate Destin's retained earnings as of April 30, 2012.
3. Calculate the total assets as of April 30, 2012.
4. Calculate the total liabilities as of April 30, 2012.
5. Calculate the total owners' equity as of April 30, 2012.
6. Calculate the balance of Accumulated depreciation as of April 30, 2012.
Answer:
Destin Incorporated
1. Net income for the month ended April 30, 2012 is $1,000.
2. Retained earnings as of April 30, 2012 is $6,000.
3. Total assets as of April 30, 2012 is $41,000.
4. Total liabilities as of April 30, 2012 is $10,000.
5. The total owners' equity as of April 30, 2012 is $31,000.
6. The balance of Accumulated depreciation as of April 30, 2012 is $4,000.
Explanation:
a) Data and Calculations:
Balance sheet:
Assets
Cash 3,000 + 16,000 -2,000 - 1,000 - 10,000 = 6,000
Inventory 14,000 + 10,000 - 9,000 = 15,000
Prepaid Insurance 3,000 - 2,000 = 1,000
Equipment (net) 20,000 - 1,000
Total Assets 40,000
Liabilities & Owners' Equity
Loan Payable 10,000
Common Stock 25,000
Retained Earnings 5,000
Total Liabilities and OE 40,000
Revenue $16,000
Cost of goods sold 9,000
Gross profit $7,000
Wages 2,000
Other expenses 1,000
Depreciation expense 1,000
Insurance expense 2,000
Total expenses $6,000
Net income $1,000
Retained earnings:
Beginning balance 5,000
Net income 1,000
Ending balance 6,000
Total assets:
Cash balance 6,000
Inventory 15,000
Prepaid insur. 1,000
Equipment 19,000
Total assets = 41,000
Total liabilities:
Loan Payable 10,000
Equity:
Common Stock 25,000
Retained earnings 6,000
Owners' equity 31,000
For the year, the balance of Accumulated Depreciation = $4,000 ($1,000 * 4)
Assuming a 12% annual interest rate, determine the present value of a five-period annual annuity of $5,000 under each of the following situations:
1. The first payment is received at the end of the first year, and interest is compounded annually.
2. The first payment is received at the beginning of the first year, and interest is compounded annually.
3. The first payment is received at the end of the first year, and interest is compounded quarterly.
Depoosite date: 12/31/17, i=?, n=?, Deposit= $4100, PV - 12/31/16: ?
Deposite date 12/31/18, i=?, n=?, Deposit=$4100, PV -12/31/16: ?
Deposite date: 12/31/19, i=?, n=?, Deposit= $4100, PV- 12/31/16: ?
Deposti date: 12/31/20, i=?, n=?, Depostie= $4100, PV - 12/31/16: ?
Deposit date: 12/31/21, i=?, n=?, deposite=$ 4100, PV - 12/31/16: ?
Solution :
Annual payment = [tex]$\$ 5000$[/tex]
1. The rate of interest annually = 12%
Present value [tex]$=\$5000 \times \text{PVA of} \ \$1(12\%, 5)$[/tex]
[tex]$=\$5000 \times 3.60478$[/tex]
= $ 18,023.90
2. The rate of interest annually = 12%
Present value [tex]$=\$5000 \times \text{PVAD of} \ \$1(12\%, 5)$[/tex]
[tex]$=\$5000 \times 4.03735$[/tex]
= $ 20,186.75
3. The rate of interest annually = 12%
The rate of interest quarterly = 3%
Present value = [tex]$\$5000 \times \text{PV of} \ \$1(3\%, 4) + \$5000 \times \text{PV of} \ \$1(3\%, 8) +\$5000 \times \text{PV of} \ \$1(3\%, 12) $[/tex] [tex]$+\$5000 \times \text{PV of} \ \$1(3\%, 16) + \$5000 \times \text{PV of} \ \$1(3\%, 16)$[/tex]
[tex]$= \$5000 \times 0.88849 + \$5000 \times 0.78941 + \$5000 \times 0.70138 + \$5000 \times 0.62317 + \$5000 \times 0.55368$[/tex][tex]$=\$ 17,780.65$[/tex]
George secured an adjustable-rate mortgage (ARM) loan to help finance the purchase of his home 5 years ago. The amount of the loan was $350,000 for a term of 30 years, with interest at the rate of 9%/year compounded monthly. Currently, the interest rate for his ARM is 3.5%/year compounded monthly, and George's monthly payments are due to be reset. What will be the new monthly payment
Answer:
$1,680
Explanation:
during the first 5 years, the monthly payment will = $2,816.18
I prepared an amortization schedule. After the 60th payment, the principal owed = $335,580
the new monthly payment considering that the interest rate fell significantly to 3.5% = $1,680
calculation to determine the monthly payment:
present value of the loan = monthly payment x PVIFA
monthly payment = present value / PVIFA
PVIFA, 0.29167%, 300 periods = 199.7501
monthly payment = $335,580 / 199.7501 = $1,680
Partial adjusted trial balance for Sheffield Corp. at December 31, 2017, includes the following accounts: Retained Earnings $17,000, Dividends $6,700, Service Revenue $36,300 Salaries and Wages Expense $14,000, Insurance Expense $1,880, Rent Expense $4,080, Supplies Expense $1,440, and Depreciation Expense $900. The balance in Retained Earnings is the balance as of January 1.Prepare a retained earnings statement for the year assuming net income is $10,400. List items that increase retained earnings first.
Answer and Explanation:
The preparation of the retained earnings statement is presented below:
Beginning retained earnings balance $17,000
Add: Net income $10,400
less: Dividend -$6,700
Ending retained earnings balance $20,700
We simply added the net income and deduct the dividend from the opening retained earnings balance
A company produces and sells hair dryers in a market where price (p) and demand (D) are related follows: p = $35+ (3,000)/D-(4,800)/D2 The fixed cost (Ct) is $800 per month and the variable cost per hair dryer (c.) is $38. - Add to % E Q
With reference to the company in Question 1, assume price and demand are unrelated. The company sells the hair dryers for $80 each if they spend $8,000 per month on advertising (C.). CF and c, remain as indicated in Question 1. The maximum production capacity is 5,000 hair dryers per month.
a) What is the demand breakeven point?
b) Is the company's demand breakeven point (in %) more sensitive to 10% increase in sales price or 20% reduction in variable costs? Explain your answer.
Answer:
Explanation:
Given that:
[tex]p = 35 + \dfrac{3000}{D}- \dfrac{4800}{D^2}[/tex]
The total revenue = p × D
∴
multiplying both sides by D; we have:
[tex]p\times D = 35 \times D + \dfrac{3000}{D} \times D- \dfrac{4800}{D^2}\times D[/tex]
[tex]= 35 D +3000}{D} - \dfrac{4800}{D}[/tex]
The total cost = (Per unit Variable cost × D) + Advertising cost
The total cost = 38D + 8000
The selling price = 80
From D units, the total revenue = 80D
∴
The break-even will take place when total revenue equals total cost.
So;
8000 + 38D = 80D
8000 = 80 D - 38D
8000 =42D
D = 8000/42
D = 190.48
(b)
Suppose the new sales price
Then;
8000 + 38D = 88D
8000 = 88D - 38D
8000 = 50D
D = 160
Hence, the break-even decreases by:
[tex]\Big(\dfrac{190.48-160}{190.48}\times 100\Big) = 16\%[/tex]
However; suppose the variable cost = 30.4
Then;
8000 + 30.4D = 80D
8000 = 80D - 30.4D
8000 = 49.6D
D = 8000/49.6
D = 161.29
Therefore;
This implies that the break-even decreased by:
[tex]\Big(\dfrac{190.48-161.29}{190.48}\times 100\Big) = 15.32\%[/tex]
Hence, the break-even is more likely to change by 10% in its selling price.
You work in the finance division of a company listed in the Stock Exchange. You have just learned that your supervisor has been using infomation on quarterty retums, prior to the time they are made public, to trade in the company's stock. Is this unethical? If yes, name the elhical issue. Explain why you think there is or not an ethical issue
Answer:
Yes it is. Ethical issue ⇒ Insider Trading.Explanation:
Trading on the stock exchange is supposed to be as fair as possible so that every investor has a fair chance of making returns. If a person - like this supervisor - is using information that is material but not publicly disclosed yet to trade on markets, the fairness of the market is compromised because the person will have an edge over other investors which will enable them make unfair profits.
Information on quarterly returns is usually material so we can expect it to be material here as well which means that the supervisor is engaged in insider trading.
Insider trading is not only unethical but also highly illegal. Reporting your supervisor can get them sent to jail.
Use the following information to compute the cost of direct materials used for the current year. Assume the raw materials inventory account is used only for direct materials. (Assume no indirect materials.) January 1 December 31
January 1 December 31
Inventories
Raw materials inventory $6,000 7,500
Work in process inventory 12,000 9,000
Finished goods inventory 8,500 5,500
Activity during the current year
Materials purchased $123,500
Direct labor 94,000
Factory overhead 39,000
Answer:
the direct material used is $122,000
Explanation:
The computation of the direct material used is shown below:
= Opening raw material inventory + material purchased - ending raw material inventory
= $6,000 + $123,500 - $7,500
= $122,000
Hence, the direct material used is $122,000
Making a financial transaction based on information not available to other
investors is known as
A. Sarbanes-Oxley
B. fair disclosure
C. insider trading
D. selling or buying short
SUBMIT
Answer:c.....
Explanation:a p e x
Making a financial transaction based on information not available to other investors is known as insider trading. Thus the correct option is C.
What is a financial transaction?A financial transaction is an arrangement for the exchange of commodities or services between a buyer and a seller. The financial account keeps systematic track of all financial transactions and summarises them.
Insider trading is the act of workers dealing in the stock or other securities of a publicly traded firm while in possession of substantial, non-public information on the company.
Insider trading is the act of buying or selling a financial instrument based on the knowledge that is not typically available to investors. Sales are transactions in which a buyer exchanges goods and services with a seller in return for cash or credit.
Therefore, option C is appropriate.
Learn more about Insider trading, here:
https://brainly.com/question/14031275
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A company has a contract with the president that it has just hired. According to the contract a one-time payment of $24,800,000 will be paid to the president when he completes his first 9 years of service. For this purpose, the company would like to set aside equal amounts of money, once each year, in order to cover this anticipated large expense. The company can earn 8 percent on these amounts of money. How much will it need to set aside each year
Answer:
$1,985,976.79
Explanation:
The formula for finding the amount is :
A = FV/ annuity factor
Annuity factor = {[(1+r)^n] - 1} / r
FV = Future value = $24,800,000
A = Amount
R = interest rate = 8%
N = number of years = 9
Annuity factor = (1.08^9 - 1 ) / 0.08 = 12.487558
$24,800,000 / 12.487558 = $1,985,976.79
You are considering buying stock A. If the economy grows rapidly, you may earn 40 percent on the investment, while a declining economy could result in a 15 percent loss. Slow economic growth may generate a return of 3 percent. If the probability is 19 percent for rapid growth, 39 percent for a declining economy, and 42 percent for slow growth, what is the expected return on this investment
Answer:
3.01%
Explanation:
Calculation for what is the expected return on this investment
Expected return =(0.19)(0.40) + (0.42)(0.03) + (0.39)(-0.15)
Expected return=0.076+0.0126+-0.0585
Expected return=0.0301*100
Expected return=3.01%
Therefore the expected return on this investment will be 3.01%
Stanislaw Timber Company owns 9,000 acres of timberland purchased in 2009 at a cost of $1,400 per acre. At the time of purchase, the land without the timber was valued at $400 per acre. In 2010, Stanislaw built fire lanes and roads, with a life of 30 years, at a cost of $84,000. Every year, Stanislaw sprays to prevent disease at a cost of $3,000 per year and spends $7,000 to maintain the fire lanes and roads. During 2011, Stanislaw selectively logged and sold 700,000 board feet of timber, of the estimated 3,500,000 board feet. In 2012, Stanislaw planted new seedlings to replace the trees cut at a cost of $100,000.
Instructions
a. Determine the depreciation expense and the cost of timber sold related to depletion for 2011.
b. Stanislaw has not logged since 2011. If Stanislaw logged and sold 900,000 board feet of timber in 2022, when the timber cruise (appraiser) estimated 5,000,000 board feet, determine the cost of timber sold related to depletion for 2022.
Answer:
a. Depreciation expense = Cost/Life = $84,000/30 = $2,800 per year
b. Cost of timber sold = Per arce - Land value = $1,400 - $400 = $1,000
Timber value = Cost of timber sold * Acre = $1,000 * 9,000 acres = $9,000,000
Land value = Timber value/Estimated Board feet * Sold Board feet = 9,000,000/3,500,000 * 700,000 = $1,800,000
Total Cost of timber sold = Timber value - Land value = $9,000,000 - $1,800,000 = $7,200,000
Depletion = Timber value * [Total Cost of timber sold+Replacement cost/Estimated Board feet]
Depletion = $900,000 * $7,200,000+$100,000/5,000,000
Depletion = $900,000 * 1.46
Depletion = $1,314,000
On January 1, 2021, Teal Corp. had 502,000 shares of common stock outstanding. During 2021, it had the following transactions that affected the Common Stock account.
February 1 Issued 125,000 shares
March 1 Issued a 10% stock dividend
May 1 Acquired 98,000 shares of treasury stock
June 1 Issued a 3-for-1 stock split
October 1 Reissued 58,000 shares of treasury stock
The weighted-average number of shares outstanding. Assume that Indigo Corp. earned net income of $3,605,000 during 2021. In addition, it had 104,000 shares of 9%, $100 par nonconvertible, noncumulative preferred stock outstanding for the entire year. Because of liquidity considerations, however, the company did not declare and pay a preferred dividend in 2021. Compute earnings per share for 2018, using the weighted-average number of shares.
Assume that Indigo Corp. earned net income of $3,605,000 during 2021. In addition, it had 104,000 shares of 9%, $100 par nonconvertible, noncumulative preferred stock outstanding for the entire year. Because of liquidity considerations, however, the company did not declare and pay a preferred dividend in 2021. Compute earnings per share for 2018, using the weighted-average number of shares determined in part (a).
Answer:
a. The weighted-average number of shares for 2021 is 1,853,225 shares.
b. Earnings per share for 2021 = $1.95 per share
Explanation:
Note: The correct year in the requirement is 2021 not 2018 as erroneously stated parts a and b.
The explanation of the answers is now given as follows:
a. Compute earnings per share for 2021, using the weighted-average number of shares.
Note: See the attached excel file for the computation of the weighted-average number of shares.
From the attached excel file (see the bold red color), the total weighted-average number of shares for 2021 is 1,853,225 shares.
b. Assume that Indigo Corp. earned net income of $3,605,000 during 2021. In addition, it had 104,000 shares of 9%, $100 par nonconvertible, noncumulative preferred stock outstanding for the entire year. Because of liquidity considerations, however, the company did not declare and pay a preferred dividend in 2021. Compute earnings per share for 2021, using the weighted-average number of shares determined in part (a).
To calculate earnings per share for 2021, the following formula is used:
Earnings per share for 2021 = Net income of $3,605,000 during 2021 / Weighted-average number of shares for 2021
Therefore, we have:
Earnings per share for 2021 = $3,605,000 / 1,853,225 = $1.95 per share
old Nest Company of Guandong, China, is a family-owned enterprise that makes birdcages for the South China market. The company sells its birdcages through an extensive network of street vendors who receive commissions on their sales.
The company uses a job-order costing system in which overhead is applied to jobs on the basis of direct labor cost. Its predetermined overhead rate is based on a cost formula that estimated $330,000 of manufacturing overhead for an estimated activity level of $200,000 direct labor dollars. At the beginning of the year, the inventory balances were as follows:
Raw materials $ 25,000
Work in process $ 10,000
Finished goods $ 40,000
During the year, the following transactions were completed:
Raw materials purchased on account, $275,000.
Raw materials used in production, $280,000 (materials costing $220,000 were charged directly to jobs; the remaining materials were indirect).
Costs for employee services were incurred as follows:
Direct labor $ 180,000
Indirect labor $ 72,000
Sales commissions $ 63,000
Administrative salaries $ 90,000
Rent for the year was $18,000 ($13,000 of this amount related to factory operations, and the remainder related to selling and administrative activities).
Utility costs incurred in the factory, $57,000.
Advertising costs incurred, $140,000.
Depreciation recorded on equipment, $100,000. ($88,000 of this amount related to equipment used in factory operations; the remaining $12,000 related to equipment used in selling and administrative activities.)
Manufacturing overhead cost was applied to jobs, $ ? .
Goods that had cost $675,000 to manufacture according to their job cost sheets were completed.
Sales for the year (all paid in cash) totaled $1,250,000. The total cost to manufacture these goods according to their job cost sheets was $700,000.
Required:
1. Prepare journal entries to record the transactions for the year.
2. Prepare T-accounts for each inventory account, Manufacturing Overhead, and Cost of Goods Sold. Post relevant data from your journal entries to these T-accounts (don’t forget to enter the beginning balances in your inventory accounts).
3A. Is Manufacturing Overhead underapplied or overapplied for the year?
3B. Prepare a journal entry to close any balance in the Manufacturing Overhead account to Cost of Goods Sold.
4. Prepare an income statement for the year. (All of the information needed for the income statement is available in the journal entries and T-accounts you have prepared.)
Answer:
Req 1:
No Transaction General Journal Debit Credit
1 a. Raw materials 275,000
Accounts payable 275,000
2 b. Work in process 220,000
Manufacturing overhead 60,000
Raw materials 280,000
3 c. Work in process 180,000
Manufacturing overhead 72,000
Sales commisions expense 63,000
Admin salaries expense 90,000
Salaries and wages payable 405,000
4 d. Manufacturing overhead 13,000
Rent expense 5,000
Accounts payable 18,000
5 e. Manufacturing overhead 57,000
Accounts payable 57,000
6 f. Advertising expense 140,000
Accounts payable 140,000
7 g. Manufacturing overhead 88,000
Depreciation expense 12,000
Accumulated depreciation 100,000
8 h. Work in process 297,000
Manufacturing overhead 297,000
9 i. Finished goods 675,000
Work in process 675,000
10 j(1). Cash 1,250,000
Sales 1,250,000
11 j(2). Cost of goods sold 700,000
Finished goods 700,000
Req 2: Screenshot Attached
Req 3A:
Manufacturing Overhead is Overapplied
Req 3B:
Manufacturing Overhead 7,000
Cost of Goods Sold 7,000
Req 4: Screenshot Attached
Olympic Sports has two issues of debt outstanding. One is a 5% coupon bond with a face value of $33 million, a maturity of 10 years, and a yield to maturity of 6%. The coupons are paid annually. The other bond issue has a maturity of 15 years, with coupons also paid annually, and a coupon rate of 6%. The face value of the issue is $38 million, and the issue sells for 90% of par value. The firm's tax rate is 30%.
a. What is the before-tax cost of debt for Olympic? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.)
b. What is Olympic's after-tax cost of debt? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.)
Answer and Explanation:
The computation is shown below
a. For before tax cost of debt
But before that following calculations need to be determined
For Bond 1:
Face value = $33,000,000
Coupon payment = 0.05 × $33,000,000 = $1,650,000
The Price of the bond is
= Coupon × [ 1 - 1 ÷ ( 1 + r)^n] ÷ r + FV ÷ ( 1 + r)^n
= $1,650,000 × [ 1 - 1 ÷ ( 1 + 0.06)^10] ÷ 0.06 + $33,000,000 ÷ ( 1 + 0.06)^10
= 1,650,000 × 7.360087 + 18,427,027.64
= $30,571,171.196
For Bond 2:
Price = 0.9 × $38,000,000
= $34,200,000
Now
Coupon = 0.06 × $38,000,000
= $2,280,000
Now before tax cost of debt is
Given that
PV -$34,200,000,
FV $38,000,000,
N 15,
PMT $2,280,000
The formula is shown below:
= RATE(NPER,PMT, PV,FV,TYPE)
After applying the above formula, the Before tax cost of debt of bond is 7.1053%
Now
Total market value is
= $34,200,000 + $30,571,171.196
= $64,771,171.19
And,
finally
Before tax cost of debt for olympic is
= ($30,571,171.196 ÷ 64,771,171.19) × 0.06 + ($34,200,000 ÷ 64,771,171.19) × 0.071053
= 0.028319 + 0.037517
= 0.0658 or 6.58%
b)
And,
After tax cost of debt is
= 0.0658× ( 1 - 0.3)
= 0.0461 or 4.61%
At the end of April, the first month of the company's year, the usual adjusting entry transferring rent earned to a revenue account from the unearned rent account was omitted. Indicate which items will be incorrectly stated, because of the error, on (a) the income statement for April and (b) the balance sheet as of April 30. Also indicate whether the items in error will be overstated or understated.
Answer:
Overstatement is the situation where the amount of any item has been stated more than its actual figure
Understatement is the situation where the amount of any item has been stated less than its actual figure
a. The rent earned will be understated, as a result of which the income statement will give a lower net income.
b. Because of lower net income, retained earnings in stockholders' equity will be understated, and the liability account of unearned rent will be overstated
For items 1 through 4, select from the first column option list provided the answer for each item that reflects how fund information is reported in the government-wide and fund financial statements. Each choice may be used once, more than once, or not at all.
In items 5 through 8, select from the second column option list provided the answer that indicates whether fund information about long-term liabilities and capital assets is reported in the government-wide and fund financial statements. Each financial statement component is reported in each fund.
Item
Information in governmental funds
Information in proprietary funds
Information in fiduciary funds
Government-wide financial statements:
1. Basis of accounting Accrual Accrual Modified cash
2. Measurement focus Current financial resources
Fund financial statements:
3. Basis of accounting Accrual
4. Measurement focus Current financial resources
Government-wide financial statements:
5. Long-term liabilities Yes
6. Capital assets Yes
Fund financial statements:
7. Long-term liabilities Yes
8. Capital assets
Answer:
1. Accrual
2. Modified Cash
3. Accrual
4. Current Financial resources
5. Yes
6. Yes
7. Yes
8. No
Explanation:
Accrual basis of accounting is a technique in accounting where expenses and revenue are recorded when they are incurred instead of when they are paid. The basis of accounting is accrual concept which compensates the matching concept. Measurement focus is based in current available financial resources and modified cash basis.
it is a type of business that keeps the dealings,assets,and bank accounts seperate from his/her personal assets?
Answer:
A sole proprietorship
Explanation:
A sole proprietorship is a business owned, organized, and run by a sole proprietor. It is legally advisable that all business and private activities of any form of business are conducted separately. Commingling business dealings, assets, and especially bank accounts with private affairs do cause problems for the business person.