Answer:
10-13 : $277
10-14 : $199.40
Explanation:
10-13
therefore Cost per king-size sheet set will be
$28 + $12 + $10 + $3 + $16 + $14 + $5 + $8 + $15 + $30 + $15 = $ 156
First year sales = 50,000 sets
Total cost = $500,000
Average fixed cost = $500,000/50,000 = $10
Total Cost per king-size sheet set = ( cost per king-size sheet )$156 + (Average fixed cost ) $10 = $166
Desired margin on sales = 40%
Let us consider the sale price to be $100x
since the margin is 40% of the sales this means margin = (40/100)*100x = 40x
So, cost price should be= $(100 – 40) = $60x
Also, Cost price = $166
which means : $166 = 60x
hence x = 166 / 60 = 2.77
therefore the sale price = ( 100 * 2.77 ) = $277
10 - 14
The Retailer sells to customers at a price of $277 after buying from the wholesaler
The retailer gets the margin of 20%, therefore the margin of retailer will be = (20/100)*277 = $55.4
Therefore the price at which retailer will buy the sheet set from the wholesaler will be = $277 ( original price ) - ( 20% of $277) $55.4 = $221.60
While the Wholesaler sells the sheet set to the retailer for $221.60 and gets the margin of 10%
hence the margin of the wholesaler = 10%*221.60 = $22.16
Then the wholesaler will get the sheet set at
= $221.6 – $22.16 = $199.40
This the price at which the company will now sell the sheets to the wholesaler
I WILL GIVE BRAIN
After seviewing the technical skills required to perform tasks in the manufacturing industry, do you think these skills are
more or less important than the interpersonal skills we discussed in previous units?
The difference between a firm's future cash flows if it accepts a project and the firm's future cash flows if it does not accept the project is referred to as the project's: Group of answer choices
Answer:
Incremental cash flows.
Explanation:
An incremental cash flow can be defined as the additional cash flow with respect to operating activities or costs that is generated when an organization from executing a new project entirely.
Hence, the difference between a firm's future cash flows if it accepts a project and the firm's future cash flows if it does not accept the project is referred to as the project's Incremental cash flows.
For example, when Toyota purchase Uber transport.
Mr. and Mrs. Revel had $206,200 AGI before considering capital gains and losses. Required: For each of the following cases, compute their AGI:
a. On May 8, they recognized an $8,900 short-term capital gain. On June 25, they recognized a $15,000 long-term capital loss.
b. On February 11, they recognized a $2,100 long-term capital gain. On November 3, they recognized a $1,720 long-term capital loss.
c. On April 2, they recognized a $5,000 long-term capital loss. On September 30, they recognized a $4,800 short-term capital loss.
d. On January 12, they recognized a $5,600 short-term capital loss. On July 5, they recognized a $1,500 long-term capital gain.
Answer:
For 2020 the maximum capital loss deductible from taxable income is $3,000 and this applies when capital losses exceed capital gains.
a. Net Gain = 8,900 - 15,000
= -$6,100
Their AGI will be;
= 206,200 - 3,000
= $203,200
b. Net Gain = 2,100 - 1,720
= $380
AGI;
= 206,200 + 380
= $206,580
c. Net Gain = - 5,000 - 4,800
= -$9,800
AGI;
= 206,200 - 3,000
= $203,200
d. Net Gain = 1,500 - 5,600
= -$4,100
AGI;
= 206,200 - 3,000
= $203,200
The computation of Mr. and Mrs. Revel's AGI after inputting capital gains and losses are as follows:
Situation AGI Before Net Capital Gain AGI After
a. $206,200 ($3,000) $203,200
b. $206,200 $380 $206,580
c. $206,200 ($3,000) $203,200
d. $206,200 ($3,000) $203,200
Data and Calculations:
The AGI of Mr. and Mrs Revel before Capital Gains and Losses = $206,200
Case A:
Short-term capital gain = $8,900
Long-term capital loss = $15,000
Net capital gain = ($6,100)
Maximum capital loss allowed in the year = $3,000
Balance carried forward = $3,100 ($6,100 - $3,000)
Case B:
Long-term capital gain =$2,100
Long-term capital loss = $1,720
Net capital gain = $380
Case C:
Long-term capital loss = $5,000
Short-term capital loss = $4,800
Net capital loss = $9,800
Maximum capital loss allowed = $3,000
Capital loss carried forward = $6,800 ($9,800 - $3,000)
Case D:
Short-term capital loss = $5,600
Long-term capital gain = $1,500
Net capital loss = $4,100
Maximum capital loss allowed = $3,000
Capital loss carried forward =$1,100 ($4,100 - $3,000)
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MGM Grand announces plans to open a new casino with a hotel. Workers hired for this new business would
specialize in
O Food Services and Travel and Tourism
O Lodging and Recreation and Amusement
O Lodging and Travel and Tourism
O Food Services and Recreation and Amusement.
Answer:
Answer is B Goodluck that is the answer
I think
Answer:
B.Lodging and Recreation and Amusement.
Explanation:
Computech Corporation is expanding rapidly and currently needs to retain all of its earnings; hence, it does not pay dividends. However, investors expect Computech to begin paying dividends, beginning with a dividend of $1.25 coming 3 years from today. The dividend should grow rapidly - at a rate of 32% per year - during Years 4 and 5; but after Year 5, growth should be a constant 6% per year. If the required return on Computech is 17%, what is the value of the stock today? Round your answer to the nearest cent. Do not round your intermediate calculations.
Answer:
P₀ = $12.23
Explanation:
Div₃ = $1.25
Div₄ = $1.65
Div₅ = $2.178
Div₆ = $2.30868
first we must calculate the terminal value using the dividend discount model = $2.30868 / (17% - 6%) = $20.988
now we must discount all the future dividends + terminal value
P₀ = $1.25/1.17³ + $1.65/1.17⁴ + $2.178/1.17⁵ + $20.988/1.17⁵ = $12.23
General store accounts were the easiest forms of credit
-true
-false
Answer:
false
Explanation:
Im just guessing
________ is used to make purchases while ________ is the total collection of pieces of property that serve to store value.
Answer:
Money; wealth.
Explanation:
Money can be defined as any recognized economic unit that is generally accepted as a medium of exchange for goods and services, as well as repayment of debts such as loans, taxes across the world.
Basically, money is a currency used for the purchase of goods and services such as food, clothes, perfume, shoes, automobile etc.
Hence, money is used to make purchases while wealth is the total collection of pieces of property that serve to store value. This simply means, wealth refers to the total or overall assets that is being owned by an individual or organization at a specific period of time.
Pitbull Construction Corporation applies IFRS, has equipment that it can reliably measure fair value of, and has chosen to apply the revaluation model to valuing this equipment on its accounting records. The carrying value of this equipment on Pitbull's books at the end of last year, December 31, 20X1, was $200,000. At the end of this year, December 31, 20X2, due to decreased demand for the equipment, especially when resold as used, the fair value is $150,000. For the year 20X2, in relation to this equipment for which Pitbull has chosen to apply the revaluation method, Pitbull must:_________
Answer and Explanation:
If there is decrease in fair value of an asset as is seen in the example with Pitbull corporation, we decrease asset revaluation reserve in the balance sheet by the value reduced $50000 here to recognise new carrying value of the asset and then debit the expenses of revaluation to the income statement or profit and loss account. If there was an increase in fair value, revaluation would add to retained earnings in balance sheet and income in income statement
The technique recommended by the text to organize an analysis of external strategic factors is called
Bali Inc. reported $605,800 net income before tax on this year’s financial statements prepared in accordance with GAAP. The corporation’s records reveal the following information.
• Depreciation expense per books was $53,000, and MACRS depreciation was $27,400.
• Bali sold business equipment for $100,000 cash. The original cost of the equipment was $125,000. Book accumulated depreciation through date of sale was $48,000, and MACRS accumulated depreciation through date of sale was $63,000.
• Bali sold investment land to Coroda, a corporation owned by the same person that owns Bali. The amount realized on sale was $115,000, and Bali’s basis in the land was $40,000.
• Bali sold marketable securities to its sole shareholder. The amount realized on sale was $51,450, and Bali’s basis in the securities was $75,000. Compute ZEJ’s taxable income.
Answer:
$669,950
Explanation:
Computation of taxable income
Bali’s net book income before tax$605,800 Excess of book over tax depreciation25,600
Book gain on equipment sale$(23,000)
(53,000-27,400)
Tax gain on equipment sale38,000 15,000
(23,000-38,000=15,000)
Nondeductible loss on sale to related party 23,550
(75,000-51,450)
Taxable income$669,950
(605,800+25,600+15,000+23,550)
Therefore the taxable income will be $669,950
Bonita Beauty Corporation manufactures cosmetic products that are sold through a network of sales agents. The agents are paid a commission of 18% of sales. The income statement for the year ending December 31, 2014, is as follows.
BONITA BEAUTY CORPORATION
Income Statement For the Year Ended December 31, 2014
Sales $75,000,000
Cost of goods sold
Variable $31,500,000
Fixed 8,610,000 40,110,000
Gross margin $34,890,000
Selling and marketing expenses
Commissions $13,500,000
Fixed costs 10,260,000 23,760,000
Operating income $11,130,000
The company is considering hiring its own sales staff to replace the network of agents. It will pay its salespeople a commission of 8% and incur additional fixed costs of $7,500,000.
Under the current policy of using a network of sales agents, calculate the Bonita Beauty Corporation
Answer:
the question is incomplete, so I looked for the requirements of similar questions:
A. Calculate the company’s break-even point in sales dollars for the year 2014 if it hires its own sales force to replace the network of agents.
B. Calculate the degree of operating leverage at sales of $75,000,000 if (1) Bonita Beauty uses sales agents, and (2) Bonita Beauty employs its own sales staff.
a) total sales = $75,000,000
variable costs:
COGS $31,500,000
commissions $6,000,000
total variable costs = $37,500,000
contribution margin ratio = $37,500,000 / $75,000,000 = 0.5
total fixed costs = $8,610,000 + $10,260,000 + $7,500,000 = $26,370,000
break even point in $ = $26,370,000 / 0.5 = $52,740,000
b) one of the formulas that we can use to calculate the degree of operating leverage is:
operating leverage = fixed costs / total costs
1) total costs using sales agents = $63,870,000
total fixed costs = $8,610,000 + $10,260,000 = $18,870,000
degree of operating leverage = $18,870,000 / $63,870,000 = 29.54%
2) total costs employing its own sales staff = $6,000,000 + $31,500,000 + $26,370,000 = $63,870,000
total fixed costs = $26,370,000
degree of operating leverage = $26,370,000 / $63,870,000 = 41.29%
The transactions listed below are typical of those involving Amalgamated Textiles and American Fashions. Amalgamated is a wholesale merchandiser and American Fashions is a retail merchandiser. Assume all sales of merchandise from Amalgamated to American Fashions are made with terms n/60, and the two companies use perpetual inventory systems. Assume the following transactions between the two companies occurred in the order listed during the year ended December 31.
Amalgamated sold merchandise to American Fashions at a selling price of $230,000. The merchandise had cost Amalgamated $175,000. Two days later, American Fashions returned goods that had been sold to the company at a price of $20,000 and complained to Amalgamated that some of the remaining merchandise differed from what American Fashions had ordered. Amalgamated agreed to give an allowance of $5,000 to American Fashions. The goods returned by American Fashions had cost Amalgamated $15,270. Just three days later, American Fashions paid Amalgamated, which settled all amounts owed.
Required:
a. Indicate the effect (direction and amount) of each transaction on the Inventory balance of Readers' Corner.
b. Prepare the journal entries that Readers’ Corner would record and show any computations.
Answer:
Transaction Sales Sales Sales Net Cost of Gross
Revenues returns allowances sales goods sold profit
a. $230,000 230,000 175,000 55,000
b. 20,000 5,000 -25,000 15,270 9,730
c. - - - - - No effect
S/n General Journal Debit$ Credit$
a(1) Accounts receivable 230,000
Sales revenues 230,000
(Sales on account to American Fashions)
a(2) Cost of goods sold 175,000
Inventory 175,000
(Recorded cost of goods sold)
b(1) Sales allowances and returns 25,000
(20000+5000)
Accounts receivable 25,000
(Sales allowances and returns granted)
b(2) Inventory 15,270
Cost of goods sold 15,270
(Cost of goods sold on goods returned)
c Cash 205,000
(230,000-25,000)
Accounts receivable 205,000
Sanborn Industries has the following overhead costs and cost drivers. Direct labor hours are estimated at 100,000 for the year.
Activity Cost Pool Cost Driver Est. Overhead Cost Driver Activity
Ordering and Receiving Orders $120,000 500 orders
Machine Setup Setups 297,000 450 setups
Machining Machine hours 1,500,000 125,000 MH
Assembly Parts 1,200,000 1,000,000 parts
Inspection Inspections 300,000 500 inspections
If overhead is applied using traditional-based costing on direct labor hours, the overhead application rate is:___________.
a) 9.60
b) 12.00
c) 15.00
d) 34.17
Answer:
d) 34.17
Explanation:
we must first calculate the total overhead expenses = $120,000 (ordering and receiving) + $297,000 (machine setup) + $1,500,000 (machining) + $1,200,000 (assembly parts) + $300,000 (inspection) = $3,417,000
since overhead is applied based on direct labor hours, then the predetermined overhead rate = total overhead expenses / total direct labor hours = $3,417,000 / 100,000 labor hours = $34.17 per labor hour
An example of economies of scope is: Group of answer choices Google utilizing its information processing capabilities to provide data analysis services to other firms. The 200,000 unit production threshold for GM to make a profit on a car model. Decreasing per unit costs given increased unit production. Increasing per unit costs given increased unit production. None of the available answers.
Answer:
Google utilizing its information processing capabilities to provide data analysis services to other firms.
Explanation:
Many people confuse economies of scope with economies of scale. Economies of scope result when producing 2 or more different goods or services together is cheaper than producing them separately. While economies of scale refers to decreasing unit costs as the total output increases.
In the example above, Google already processes information for itself, and it is using that information to sell services to other companies. By producing both services together, the production costs lower.
Karen works part-time at a local convenience store and earns $10 per hour. She wants to spend next Saturday afternoon attending a music concert. The full price of a concert ticket is $75, but Karen was able to get a discounted price of $50 from a friend who purchased the ticket but has become unable to attend. If Karen took 4 hours off from her job to attend the concert, what was her opportunity cost of attending the concert
Answer:
$25
Explanation:
it said her and her friend.
The opportunity cost for attending the concert is $90. Thus, option (D) is correct.
What is opportunity cost?Opportunity cost refers to the loss of value or benefit that would result from engaging in a certain activity option in comparison to engaging in an alternative activity that offers a higher return on value or benefit. It gives the value of the best alternative chosen in the process of decision-making.
According to the given question, Karen gets paid $10 per hour for her part-time job. She wanted to attend the concert and price of the concert ticket after getting the discount is $50.
The four hours off from the job will cost = $10 × 4 hours
= $40
The opportunity cost for attending the concert = $50+$40
= $90
Therefore, it can be concluded that opportunity cost will be $90. Hence, option (D) is correct.
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Your question is incomplete, but most probably the full question was...
What was her opportunity cost of attending the concert?
a.$40
b.$50
c.$75
d.$90
The company's mission statement tells us...
Answer:
A company mission statement defines what an organization is, why it exists, its reason for being. At a minimum, your mission statement should define who your primary customers are, identify the products and services you produce, and describe the geographical location in which you operate.
Explanation:
Hope this helps
The given statements pertain to aggregate supply and aggregate demand. Label each statement as being either true or false.
Statement 1: An increase in the cost of energy affects both aggregate supply and aggregate demand.
A. True
B. False
Statement 2: One of the factors that increase aggregate demand is the consumption of more imports.
A. True
B. False
Statement 3: If the value of people's stock portfolios increases or if peoples houses appreciate in value, then this very easily could lead to an increase in aggregated demand.
A. True
B. False
Answer:
Statement 1: An increase in the cost of energy affects both aggregate supply and aggregate demand.
A. TrueAn increase in energy costs reduces both aggregate supply and demand.
Statement 2: One of the factors that increase aggregate demand is the consumption of more imports.
B. FalseIf net exports decrease (exports - imports), then the aggregate demand curve will shift to the left, which means it will decrease.
Statement 3: If the value of people's stock portfolios increases or if peoples houses appreciate in value, then this very easily could lead to an increase in aggregated demand.
A. TrueThis would lead to an increase in the net worth of households, which generally leads to higher spending.
Snoblo, a manufacturer of snowblowers, sells four models. The base model, Reguplo, has demand that is normally distributed, with a mean of 10,000 and a stand deviation of 1,000. The three other models have additional features, and each has demand that is normally distributed, with a mean of 1,000 and a standard deviation of 700. Currently all four models are manufactured on the same line at a cost of $100 for Reguplo and $110 for each of the other three models. Reguplo sells for $200, whereas each of the other three models sells for $220. Any unsold blowers are sold at the end of the season for $80. Snoblo is considering the use of tailored sourcing by setting up two separate lines, one for Reguplo and one for the other three. Given that no changeovers will be required on the Reguplo line, the production cost of Reguplo is expected to decline to $90. The production cost of the other three products, however, will now increase to $120.
Required:
a. How will tailored sourcing affect the production and profits?
b. Is tailored sourcing more profitable for Snoblo? Why?
Answer:
Total profits Current Sourcing [One Line] $1,214,280
Total profits Tailored Sourcing [Two Lines] $1,281,670
Explanation:
Particulars Current Sourcing One line : Reguplo ; Other models
Anticipated demand 10,000 ; 1,000
Standard Deviation 1,000 ; 700
Unit Cost $100 , $110
Sales price $200 , $220
Disposal Value $80 , $80
Salvage Value $80 ; $80
Cost of under stock $100 ; $110
Cost of overstock $20 ; $30
Optimal cycle service level 0.8333 ; 0.7857
Optimal production size 10,967 ; 1,554
Expected profits $970,018 ; $81,421
Total profits $1214,280
Particulars Tailored Sourcing Two line : Reguplo ; Other models
Anticipated demand 10,000 ; 1,000
Standard Deviation 1,000 ; 700
Unit Cost $90 , $120
Sales price $200 , $220
Disposal Value $80 , $80
Salvage Value $80 ; $80
Cost of under stock $110 ; $100
Cost of overstock $10 ; $40
Optimal cycle service level 0.9167 ; 0.7143
Optimal production size 11,383 ; 1,396
Expected profits $1,081,602 ; $66,689
Total profits $1,281,670
Your company assembles five different models of a motor scooter that is sold in specialty stores in the United States. The company uses the same engine for all five models. You have been given the assignment of choosing a supplier for these engines for the coming year. Due to the size of your warehouse and other administrative restrictions, you must order the engines in lot sizes of 1,000 units. Because of the unique characteristics of the engine, special tooling is needed during the manufacturing process for which you agree to reimburse the supplier. Your assistant has obtained quotes from two reliable engine suppliers and you need to decide which to use. The following data have been collected:
Requirements (annual forecast) 12,000 units
Weight per engine 22 pounds
Order processing cost $125 per order
Inventory carry cost 20 percent of the average value of inventory per year
Assume that half of lot size is in inventory on average (1,000/2 = 500 units).
Two qualified suppliers have submitted the following quotations:
ORDER QUANTITY SUPPLIER 1 UNIT PRICE SUPPLIER 2 UNIT PRICE
1 to 1,499 units/order $510.00 $505.00
1,500 to 2,999 units/order 500.00 505.00
3,000 + units/order 490.00 488.00
Tooling costs $22,000 $20,000
Distance 125 miles 100 miles
Your assistant has obtained the following freight rates from your carrier:
Truckload (40.000 lbs. each load): $0.80 per ton-mile
Less-than-truckload: $1.20 per ton-mile
Required:
a. Calculate the total cost for each supplier.
b. Which supplier would you select?
c. If you could move the lot size up to ship in truckload quantities, calculate the total cost for each supplier.
d. Would your supplier selection change?
Answer:
a. Cost of Supplier 1 : $6,214,300 per year
Cost of Supplier 2 : $6,147,840
b. Supplier 2 will be selected as it costs $66,460 less than supplier 1.
c. 1,818
d. No.
Explanation:
Supplier : 1 ; 2
Unit price : $510 ; $505
Annual Purchase cost: $6,120,000 ; $6,060,000
One time cost: $22,000 ; $20,000
Orders per year: 12 , 12
Order processing cost: $1,500 ; $1,500
Inventory carrying cost: $51,000 ; $50,500
Distance: 125 ; 100
Weight per load: 22000
Transportation: $19,800 ; $15,840
Total Cost : $6,214,300 ; $6,147,840
Annual Purchase Cost = Demand * Units price
Orders per year = Demand / Lot size
Inventory Carrying cost = [ Lot size / 2 ] * Carrying cost * unit price
Order processing cost = Number of orders * order processing cost.
c. Required lot size for truck : 40,000 / 22 ≈ 1,818
On May 11 Sydney accepts delivery of $20,500 of merchandise it purchases for resale from Troy: invoice dated May 11, terms 3/10, n/90, FOB shipping point. The goods cost Troy $13,735. Sydney pays $410 cash to Express Shipping for delivery charges on the merchandise. 12 Sydney returns $1,300 of the $20,500 of goods to Troy, who receives them the same day and restores them to its inventory. The returned goods had cost Troy $871. 20 Sydney pays Troy for the amount owed. Troy receives the cash immediately. (Both Sydney and Troy use a perpetual inventory system and the gross method.)
Required:
a. Prepare journal entries that Sydney Retailing (buyer) records for these three transactions.
b. Prepare journal entries that Troy Wholesalers (seller) records for these three transactions.
Answer: Please see explanation for answer
Explanation:
A) Journal entry for Sydney retailing buyer
i)To record purchase of inventory on account
Date Account titles Debit Credit
May 11 Accounts Payable $20,500
Merchandise Inventory $20,500
ii)To record shipping expense paid
Date Account titles Debit Credit
May 11 Merchandise Inventory $ 41
Cash $ 410
iii) To record goods returned to seller
Date Account titles Debit Credit
May 12 Accounts Payable $1,300
Merchandise Inventory $1,300
iv To record payment on account.
Date Account titles Debit Credit
May 20 Accounts Payable $19,200
Merchandise Inventory $576
Cash $18,624
Calculation:
Accounts payable= Purchases− Purchase return
=$20,500−$1,300
=$19,200
Discount=Accounts payable X 3%
=$19,200×0.03
=$576
B) Journal entry for Troy - Seller
i)To record sales of goods on account
Date Account titles Debit Credit
May 11 Accounts receivable $20,500
Sales Revenue $20,500
ii) To record cost of goods sold
Date Account titles Debit Credit
May 11 Cost of goods sold $13,735
Merchandise Inventory $13,735
III) To record sales return
Date Account titles Debit Credit
May 12 Sales returns and allowance $1,300
Account receivable $1,300
iv) To record cost of goods sold reversed for sales return
Date Account titles Debit Credit
May 12 Merchandise Inventory $871
Cost of goods sold $871.
v) To record cash received for goods sold.
Date Account titles Debit Credit
May 20 Cash $19,200
Sales discount $576
Account receivables $18,624
Calculation:
Accounts receivables= sales− sales return
=$20,500−$1,300
=$19,200
Discount=receivables X 3%
=$19,200×0.03
=$576
A stock has an average expected return of 10.8 percent for the next year. The beta of the stock is 1.22. The T-Bill rate is 5% and the T-Bond rate is 3.4 %. What is the market risk premium
Answer: 4.7%
Explanation:
Expected return is calculated as:
= Risk free return + Beta ( Market risk premium)
10.8% = 5% + (1.22 × Market risk premium)
10.8% - 5% = 1.22market risk premium
5.8%/1.22 = market risk premium
Market risk premium = 0.058/1.22
Market risk premium = 0.047
Market risk premium = 4.7%
Carol really doesn't like her new boss and is not happy with the new tasks she's been assigned and the long hours she's been working. Still, she truly believes in what the company is trying to accomplish. Carol has Question 9 options: 1) low organizational commitment. 2) poor job enrichment. 3) poor job performance. 4) low job satisfaction. 5) low job involvement.
Answer:
4)Low job satisfaction
Explanation:
From the question, we are informed that Carol really doesn't like her new boss and is not happy with the new tasks she's been assigned and the long hours she's been working. But she still truly believes in what the company is trying to accomplish.
In this case , Carol has Low job satisfaction.
Whenever an employee job
has satisfaction, he/she will be motivated, it always result to efficiency in the part of employees, they ten to work harder for acheiving the goal of the organization which in turn result to good overall performance of the organization. But in the situation whereby an employee has
Low job satisfaction, the reverse is the case, he/she will not be happy with task given to him/her, no motivation.
Factors that improve Low job satisfaction are;
✓Assuring job security for employee
✓Job benefits
✓Good relationship between employee and employer.
Selected Information from Balance Sheets (As of Year End for Years 0 and 1)
Year 0 Year 1
Cash 1,000 2,000
Accounts Receivables 1,000 5,000
Inventory 5,000 4,000
Property, Plant and Equipment (net) 12,000 11,000
Accounts Payable 5,000 4,000
Unearned Revenue 2,000 1,000
Bonds Payable 5,000 6,000
Common Stock 3,000 4,000
Retained Earnings 5,000 7,000
Income Statement (Year 1)
Sales 20,000
Costs of Goods Sold (8,000)
Wage Expense (4,000)
Depreciation Expense (2,000)
Loss from PP&E Sale (1,000)
Net Income Before Tax 5,000
Tax Expense (2.000)
Net Income 3.000
In the space provided, prepare the Operating section of the statement of cash flow for Year 1, using the indirect approach.
Answer:
Cash flow from operating activities = $1,000
Explanation:
Statement of Cash flow
Cash from Operating activities
Net Income $3,000
+ Depreciation $2,000
+ Loss from sales of PPE $1,000
Adjustment on Working capital
Increase in accounts receivables -$4,000
(1,000 - 5,000)
Decrease in Inventory $1,000
(5,000 - 4,000)
Decrease in Account payable -$1,000
(4,000 - 5,000)
Decrease in unearned revenue -$1,000
(1,000 - 2,000)
Cash flow from operating activities $1,000
On September 1, 2018, Evansville Lumber Company issued $80 million in 20-year, 10 percent bonds payable. Interest is payable semiannually on March 1 and September 1. Bond discounts and premiums are amortized at each interest payment date and at year-end. g The company’s fiscal year ends at December 31.
Required:
A-1. Prepare the necessary adjusting entries at December 31, 2018, and the journal entry to record the payment of bond interest on March 1, 2019, under the assumption that the bonds were issued at 98.
A-2. Prepare the necessary adjusting entries at December 31, 2018, and the journal entry to record the payment of bond interest on March 1, 2019, under the assumption that the bonds were issued at 101.
B. Compute the net bond liability at December 31, 2019, under assumptions A-1 and A-2 above.
C. Under which of these assumptions, 1 or 2, would the investor's effective rate of interest be higher? Explain.
Answer:
A-1
interest payable 2,693,334 debit
Interest payable 2,666,667 credit
discount on bond payable 26,667 credit
--to record Dec 31st adjusting entry--
interest expense 1,346,666 debit
interest payable 2,666,667 debit
discount on bond payable 13,333 credit
cash 4,000,000 credit
--to record March 1st Payment
A-2
interest expense 2,653,334 debit
premium on bond payable 13,333 debit
Interest payable 2,666,667 credit
--to record Dec 31st adjusting entry--
interest expense 1.326.666 debit
interest payable 2,666,667 debit
premium on bond payable 6,667 debit
cash 4,000,000 credit
--to record March 1st Payment
B)
A-1
78,400,000 + 26,667 = 78,426,667
A-2
80,800,000 - 13,333 = 80,786,667
C)
the effective interest rate is higher under A-1 as the company is paying the same nominal amount of $4,000,000 every six months but, received less cash for the bonds in A-1 case making the effective rate higher .
Explanation:
A-1 issued at 98 points
cash received:
80,000,000 x 98/100 = 78,400,000
discount on bonds: 80,000,000 - 78,400,000 = 1,600,000
On Dec 31st we solve for accrued discoutn and interest:
amortization
1,600,000 / 40 payment = 40,000 per payment
proportional amortization: 40,000 x 4/6 (month accrued) = 26,667
interest paid
principal x rate x time
80,000,000 x 10% x 4/12 = 2,666,667
payment:
8,000,000 x 10% x 6/12 = 4,000,000
proportional amortization: 40,000 x 2/6 (month accrued) = 13,333
accrued interest 8,000,000 x 10% x 2/12 = 1,333,333
A-2 we issue a 101 point
cash received:
80,000,000 x 101/100 = 80,800,000
premuim on bonds: 800,000
On Dec 31st we solve for accrued discount and interest:
amortization
800,000 / 40 payment = 20,000 per payment
proportional amortization: 20,000 x 4/6 (month accrued) = 13,333
interest paid
principal x rate x time
80,000,000 x 10% x 4/12 = 2,666,667
payment:
8,000,000 x 10% x 6/12 = 4,000,000
proportional amortization: 40,000 x 2/6 (month accrued) = 6,667
accrued interest 8,000,000 x 10% x 2/12 = 1,333,333
Suppose that France and Austria both produce rye and wine. France's opportunity cost of producing a bottle of wine is 4 bushels of rye while Austria's opportunity cost of producing a bottle of wine is 10 bushels of rye. By comparing the opportunity cost of producing wine in the two countries, you can tell that __________ has a comparative advantage in the production of wine and __________has a comparative advantage in the production of rye.
Suppose that France and Austria consider trading wine and rye with each other. France can gain from specialization and trade as long as it receives more than __________of rye for each bottle of wine it exports to Austria. Similarly, Austria can gain from trade as long as it receives more than __________of wine for each bushel of rye it exports to France.
Based on your answer to the last question, which of the following prices of trade (that is, price of wine in terms of rye) would allow both Austria and France to gain from trade?
a. 7 bushels of rye per bottle of wine
b. 4 bushels of rye per bottle of wine
c. 1 bushel of rye per bottle of wine
d. 11 bushels of rye per bottle of wine
Answer:
France has comparative advantage in production of wine
Austria has comparative advantage in production of rye.
4 bushels of rye for each bottle of wine
1 bottle of wine for each bushel.
b. 4 bushel of rye per bottle of wine.
Explanation:
France has comparative advantage in producing wine as it has opportunity cost of 4 bushels per bottle of wine. Austria has comparative advantage in producing bushels as it has opportunity cost of 10 bushels per bottle of wine. The both countries can gain advantage if they agree for 4 bushels per wine.
Joni Splish Brothers Inc. has the following amounts reported in its general ledger at the end of the current year.
Organization costs $23,800
Trademarks 15,700
Discount on bonds payable 36,800
Deposits with advertising agency for ads to promote goodwill of company 11,800
Excess of cost over fair value of net identifiable assets of acquired subsidiary 76,800
Cost of equipment acquired for research and development projects; the equipment has an alternative future use 86,800
Costs of developing a secret formula for a product that is expected to be marketed for at least 20 years 82,600
Required:
On the basis of this information, compute the total amount to be reported by Hyde for intangible assets on its balance sheet at year-end.
Answer:
$92,500
Explanation:
The computation of the total intangible asset is shown below:
= Trademarks + Excess of cost over fair value of net identifiable assets of acquired subsidiary
= $15,700 + $76,800
= $92,500
Hence, the total intangible asset is $92,500 and the same is to be considered
We simply applied the above formula
. Suppose you bought 100 shares of stock at an initial price of $37 per share. The stock paid a dividend of $0.28 per share during the following year, and the share price at the end of the year was $41. (1) What is your total dollar return on this investment
Answer: $428
Explanation:
From the question, we are informed that one bought 100 shares of stock at an initial price of $37 per share and that the stock paid a dividend of $0.28 per share during the following year, and the share price at the end of the year was $41.
The total dollar return on this investment will be calculated as:
= 100(41 - 37 + 0.28)
= $428
Champion manufactures winter fleece jackets for sale in the United States. Demand for jackets during the season is normally distributed, with a mean of 20,000 and a standard deviation of 10,000. Each jacket sells for $60 and costs $30 to produce. Any leftover jackets at the end of the season are sold for $25 at the year-end clearance sale. Holding jackets until the year-end sale adds another $5 to their cost. A recent recruit has suggested shipping leftover jackets to South America for sale in the winter there rather than running a clearance. Each jacket will fetch a price of $35 in South America, and all jackets sent there are likely to sell. Shipping costs add additional $5 to the cost of any jacket sold in South America, along with the $5 for holding jackets till the end of the season.
Required:
a. Would you recommend the South American option? Support your decision with calculations.
b. How will the South American option affect production and profitability at Champion?
c. On average, how many jackets will Champion ship to South America each season? (Note: you have already calculated this value in order to get the expected profit for the South American option.
Answer:
a. South American generates higher service level.
b. The profitability is higher in South American Option.
c. 19,269 jackets
Explanation:
Particulars : Current Policy ; South American Option
Anticipate demand : 20,000 ; 20,000
Standard deviation : 10,000 ; 10,000
Unit costs : $30 ; $30
Sales price : $60 ; $60
Disposal value : $25 ; $30
Inventory holding cost : $5 ; $5
South America Sales Price : 0 ; $35
Shipping Costs : 0 ; $5
Salvage Value : $20 ; $25
Cost of under stock : $30 ; $30
Cost of overstock : $10 ; $5
Optimal cycle service level : 0.7500 ; 0.8571
Optimal production size : 26,745 ; 30,676
Expected profits : $472,889 ; $521,024
Expected Overstock 8,236 , 11,407
For Coppertone products, evaluations in the postpurchase behavior stage of the consumer purchase decision process that are most likely to cause dissatisfaction are
Answer:
dry skin and acne
Explanation:
Coppertone is an American brand name of a sunscreen. This brand is headquartered in Whippany, New Jersey. Coppertone the Coppertone girl logo and a different kind of fragrance.
For Coppertone products, evaluations in the post purchase behavior stage of the consumer purchase decision process that are most likely to cause dissatisfaction are dry skin and acne.
A group of 10 pineapple pickers can pick 240 pineapples in an hour. When one more pineapple picker is added to the group, they can pick 270 pineapples in an hour. Calculate the marginal product of the 11th pineapple picker.
Answer:
30 pineapples
Explanation:
The computation of the marginal product of the 11th pineapple picker is shown below:
= 11 pineapple - 10 pineapple
= 270 pineapples - 240 pineapples
= 30 pineapples
Hence, the marginal product of the 11th pineapple picker is 30 pineapples
We simply applied the above formula so that the correct value could come