Answer:
Annual depreciation= $126,000
Explanation:
Giving the following information:
Purchase price= $350,000
Useful life= 5 years
Salvage value= $35,000
To calculate the annual depreciation under the double-declining balance, we need to use the following formula:
Annual depreciation= 2*[(book value)/estimated life (years)]
Annual depreciation= 2*[(350,000 - 35,000) / 5]
Annual depreciation= $126,000
Suppose you borrow at the risk-free rate an amount equal to your initial wealth and invest in a portfolio with an expected return of 16% and a standard deviation of returns of 20%. The risk-free asset has an interest rate of 4%. Calculate the expected return on the resulting portfolio.
Answer: 28%
Explanation:
First, we have to make an assumption that the initial wealth is 100, then the weight of the risk free asset will be:
= Amount invested in risk free / Initial wealth
= -100/100
= -1
The weight of the portfolio will be calculated as:
= 1 - weight of risk free asset
= 1-(-1)
= 1 + 1
= 2
Therefore, the expected return on the resulting portfolio will be:
= 2 × 16 + [(-1) × 4]
= 32 - 4
= 28
Your company is estimated to make dividends payments of $2.4 next year, $3.4 the year after, and $4.1 in the year after that. The dividends will then grow at a constant rate of 4% per year. If the discount rate is 13% then what is the current stock price
Answer:
40.78
Explanation:
Craig Company asks you to review its December 31, 2014, inventory values and prepare the necessary adjustments to the books. The following information is given to you. 1. Craig uses the periodic method of recording inventory. A physical count reveals $234,890 of inventory on hand at December 31, 2014.2. Not included in the physical count of inventory is $13,420 of merchandise purchased on December 15 from Browser. This merchandise was shipped f.o.b. shipping point on December 29 and arrived in January. The invoice arrived and was recorded on December 31.3. Included in inventory is merchandise sold to Champy on December 30, f.o.b. destination. This merchandise was shipped after it was counted. The invoice was prepared and recorded as a sale on account for $12,800 on December 31. The merchandise cost $7,350, and Champy received it on January 3.4. Included in inventory was merchandise received from Dudley on December 31 with an invoice price of $15,630. The merchandise was shipped f.o.b. destination. The invoice, which has not yet arrived, has not been recorded.5. Not included in inventory is $8,540 of merchandise purchased from Glowser Industries. This merchandise was received on December 31 after the inventory had been counted. The invoice was received and recorded on December 30.6. Included in inventory was $10,438 of inventory held by Craig on consignment from Jackel Industries.7. Included in inventory is merchandise sold to Kemp f.o.b. shipping point. This merchandise was shipped after it was counted. The invoice was prepared and recorded as a sale for $18,900 on December 31. The cost of this merchandise was $10,520, and Kemp received the merchandise on January 5.8. Excluded from inventory was a carton labeled "Please accept for credit." This carton contains merchandise costing $1,500 which had been sold to a customer for $2,600. No entry had been made to the books to reflect the return, but none of the returned merchandise seemed damaged.Craig Company asks you to review its December 31, 1. Determine the proper inventory balance for Craig Company at December 31, 2014.Inventory balance as on December 31, 2014 2. Prepare any correcting entries to adjust inventory to its proper amount at December 31, 2014. Assume the books have not been closed.
Answer:
1. $237,392
2. Dr Sales Revenue $12,800
Cr Accounts Receivable $12,800
Dr Purchases (Inventory) $15,630
Cr Accounts Payable $15,630
Dr Sales Returns and Allowances $2,600
Cr Accounts Receivable $2,600
Explanation:
1. Calculation to determine the proper inventory balance for Craig Company at December 31, 2014.
December 31, 2014 Inventory balance=$234,890+$13,420+$8,540-$10,438-$10,520+$1,500
December 31, 2014 Inventory balance=$237,392
Therefore Inventory balance as on December 31, 2014 is $237,392
2. Preparation of any correcting entries to adjust inventory to its proper amount at December 31, 2014.
Dr Sales Revenue $12,800
Cr Accounts Receivable $12,800
Dr Purchases (Inventory) $15,630
Cr Accounts Payable $15,630
Dr Sales Returns and Allowances $2,600
Cr Accounts Receivable $2,600
In its recent income statement, Smith Software Inc. reported paying $12 million in dividends to common shareholders, and in its year-end balance sheet, Smith reported $386 million of retained earnings. The previous year, its balance sheet showed $372 million of retained earnings. What was the firm's net income during the most recent year
Answer:
$26 million
Explanation:
Given the above information, net income
= Ending retained earnings - Beginning retained earnings + Dividend paid to shareholders
Ending retained earning = $386 million
Beginning retained earning = $372 million
Dividend paid to shareholders = $12 million
Then,
Net income earnings = $386 million - $372 million + $12 million
Net income earnings = $26 million
Therefore, the firm's net income during its most recent year is $26 million
A notepad company is looking to repackage and reposition its small notepads. It is thinking of coloring the pages yellow, resizing them into the shape of a stick of butter, and selling them through novelty stores. The company needs this repositioning of its product to succeed. In order for the company to avoid common pitfalls, which areas it should cover in the repositioning process?
Answer: See explanation
Explanation:
Tou didn't give the options to your question but based on further research online, the correct options are given below:
• reinforce the “back to basics” version of the product to retain what customers care about most
• create clean and understandable positioning between its old and the new product positions
• do sufficient research with market perceptions or target segments.
Which of the strategies to enter global markets do you think would be best for a small, 100 person company manufacturing special dog collars
Answer:
Exporting by means of:
Local representative Online salesExplanation:
It would be best that the company engages in exports for the time being because it dos not require much funds to be used and so expenses are less.
The company could find a local representative in the countries that it would like to sell to and use that representative as a middleman to sell their goods there.
The company could also cut out the middle man and directly sell to consumers on the internet through websites dedicated to the sale of their kind of goods.
Consider a simple economy whose only industry is fishing. In this industry, productivity—the amount of goods and services a worker can produce per hour—is measured by the number of fish one fisherman catches per hour. In the following table, match each example to the productivity determinant it represents.
Examples Human Capital per Worker Natural Resources per Worker Physical Capital per Worker Technological Knowledge
The fertile waters in which the fish feed and breed
The skills workers develop through training before working on and piloting boats
A route fishing boats can follow to maximize their catch at different points in the day
The boats in the fishing fleet
Answer:
The fertile waters in which the fish feed and breed ⇒ Natural Resources per worker.
The skills workers develop through training before working on and piloting boats ⇒ Human Capital per worker.
A route fishing boats can follow to maximize their catch at different points in the day ⇒ Technological Knowledge.
The boats in the fishing fleet ⇒ Physical Capital
Below is financial information for two sporting goods retailers. Extreme Sports Company operates a retail business and franchising business. At the end 2011, Extreme Sports had 263 Company-owned and 120 franchise-operated retail stores. Extreme's stores are located in suburban, strip mall and regional mall locations, the company operates in 32 states. All Sports Corporation sells sporting goods and related products at over 2,500 Company-operated retail stores.
Selected Data for All Sports and Extreme Sports (amounts in millions):
All Sports Extreme Sports
Sales $5,320 $1,344
Cost of Goods Sold 3,897 887
Interest Expense 138 43
Net Income 212 33
Average Accounts Receivable 114 18
Average Inventory 998 286
Average Fixed Assets 1,163 130
Average Total Assets 2,472 662
Average Tax Rate 40% 40%
Calculate the following ratios for All Sports and Extreme Sports: If required, round your answers to two decimal places.
Find the following for each: All Sports / Extreme Sports
a. Return on assets
b. Profit Margin for ROA
c. Assets turnover
d. Accounts receivable turnover
e. Inventory turnover
f. Fixed asset turnover
Answer:
All Sports Company and Extreme Sports Company
All Sports Extreme Sports
a. Return on assets (ROA) = Profit margin * Assets turnover
= 3.98%*2.15 2.46%*2.03
= 8.56% 4.99%
b. Profit Margin for ROA = Net income/Sales
= ($212/5,320 * 100) ($33/1,344 * 100)
= 3.98% 2.46%
c. Assets turnover = Sales/Total assets
= $5,320/$2,472 $1,344/$662
= 2.15 2.03
d. Accounts receivable turnover = Credit Sales/Average receivable
= $5,320/$114 $1,344/$18
= 46.67x 74.67x
e. Inventory turnover = Cost of goods sold/Average Inventory
= $3,897/$998 $887/$286
= 3.9x 3.10x
f. Fixed asset turnover = Sales/Fixed assets
= $5,320/$1,163 $1,344/$130
= 4.57x 1.03x
Explanation:
a) Data and Calculations:
All Sports Extreme Sports
Sales $5,320 $1,344
Cost of Goods Sold 3,897 887
Interest Expense 138 43
Net Income 212 33
Average Accounts Receivable 114 18
Average Inventory 998 286
Average Fixed Assets 1,163 130
Average Total Assets 2,472 662
Average Tax Rate 40% 40%
Sale of short-term stock investments $ 3,000
Cash collections from customers 7,900
Purchase of used equipment 2,600
Depreciation expense 1,000
Compute cash flows from investing activities using the above company information. (Amounts to be deducted should be indicated by a minus sign.)
Investing Activities
Answer: $400
Explanation:
Cashflows from Investing Activities refer to those that have to do with the purchase or sale of fixed assets as well as other company securities.
Cashflows from investing activities here are:
= Sale of short term stock investments - Purchase of used equipment
= 3,000 - 2,600
= $400
Bethany needs to borrow $10,000. She can borrow the money at 6% simple interest for 5 yr or she can borrow at 5% with interest compounded continuously for 5 yr.
a. How much total interest would Bethany pay at 6% simple interest?
b. How much total interest would Bethany pay at 5% interest compounded continuously?
c. Which option results in less total interest?
Answer:
a. $3000
b. 2840.25
c. compounded continuously
Explanation:
a. principal amount, p = $10000
Interest rate in the case of simple interest = 6%
Time, t = 5 years
Interest amount = Prt
Interest amount = 10000 x 6% x 5 = $3000
b. principal amount, p = $10000
Interest rate, r = 5%
Time, t = 5 years
Interest amount = Pe^(rt) - P
Interest amount = 10000 (2.71)^(5% x 5) - 10000
Interest amount = 2840.25
c. Compounded continuously has a lower interest amount.
the company's revenue for the month totaled $950,000 from credit sales, and its cost of goods sold for the month is $540,000. Prepare summary journal entries dated October 31 to record its October production
Answer:
Date Account Title Debit Credit
Oct. 31 Accounts Receivable $950,000
Sales $950,000
Date Account Title Debit Credit
Oct. 31 Cost of goods sold $540,000
Finished goods inventory $540,000
SprayCo Inc. develops and produces spraying equipment for lawn maintenance and industrial uses. On March 9 of the current year, SprayCo reacquired 16,900 shares of its common stock at $23 per share. On June 9, 10,600 of the reacquired shares were sold at $25 per share, and on November 13, 4,100 of the reacquired shares were sold at $25.
Required:
Journalize the transactions of March 9, June 9, and November 13.
Answer:
Date Account Title Debit Credit
Mar 9 Treasury Stock $388,700
Cash $388,700
Working:
Treasury stock = 16,900 * 23 = $388,700
Date Account Title Debit Credit
June 9 Cash $265,000
Treasury Stock $243,800
Additional Paid-in capital - $21,200
Treasury stock.
Working:
Cash = 10,600 * 25 = $265,000
Treasury stock = 10,600 * 23 = $243,800
Date Account Title Debit Credit
Nov 13 Cash $102,500
Treasury Stock $ 94,300
Additional Paid-in capital - $ 8,200
Treasury stock.
Working:
Cash = 4,100 * 25 = $102,500
Treasury stock = 4,100 * 23 = $94,300
Eight months ago, you purchased 400 shares of Winston, Inc. stock at a price of $56.90 a share. To date the company has paid quarterly dividends of $.55 a share twice. Today, you sold all of your shares for $49.40 a share. What is your total percentage return on this investment
Answer:
Shares of Winston, Inc. Stock
The total percentage return on this investment is:
= -11.25%
Explanation:
a) Data and Calculations:
Purchase cost = $22,760 (400 * $56.90)
Quarterly dividends received = $440 (400 * $0.55) * 2
Sales price = $19,760 (400 * $49.40)
Total cash receipts from the investment = $20,200 ($440 + $19,760)
Total returns from the investment = -$2,560
Total percentage return on the investment = -$2,560/$22,760 * 100
= -11.25%
b) There is a loss of value on the investment amounting to $2,560, which is 11.25%. The investment actually yielded a negative return.
Purchased goods for $4,100 from Diamond Inc. with terms 2/10, n/30. 5 Returned goods costing $1,100 to Diamond Inc. for credit on account. 6 Purchased goods from Club Corp. for $1,000 with terms 2/10, n/30. 11 Paid the balance owed to Diamond Inc. 22 Paid Club Corp. in full. Required: Assume that Ace uses a perpetual inventory system and that the company had no inventory on hand at the beginning of the month. Calculate the cost of inventory as of June 30.
Answer: $3,940
Explanation:
Purchase from Diamond
The company received a discount of 2% because they paid within 10 days as per the terms of the sale.
Cost of inventory from Diamond:
= (Cost of goods - Returns) * (1 - 2%)
= (4,100 - 1,100) * 98%
= $2,940
Purchase from Club
Discount period expired so the full $1,000 is paid.
Total inventory cost:
= 2,940 + 1,000
= $3,940
Trader M places a System Order to buy 100 shares of ABC stock at a price two cents below the best non-Nasdaq participant on the same side of the market. This is what type of order
Answer:
Limit order
Explanation:
There are various types of orders placed on nasdaq. These order include, market orders, limit order, All or none order, Immediate or cancel order and like wise. When a buyer places an order to buy the stock below current market price, this is type of limit order.
Jerry Rice and Grain Stores has $4,320,000 in yearly sales. The firm earns 1.8 percent on each dollar of sales and turns over its assets 3.5 times per year. It has $139,000 in current liabilities and $372,000 in long-term liabilities.
a. What is its return on stockholders’ equity?
b. If the asset base remains the same as computed in part a, but total asset turnover goes up to 4.00, what will be the new return on stockholders’ equity? Assume that the profit margin stays the same as do current and long-term liabilities.
Answer:
a. Return on Stockholders’ Equity = 10.75%
b. New return on stockholders' equity = 12.29%
Explanation:
a. What is its return on stockholders’ equity?
This can be calculated as follows:
Net Income = Sales * Profit Margin = $4,320,000 * 1.8% = $77,760
Total Assets = Sales / Total Assets Turnover = $4,320,000 / 3.50 = $1,234,285.71
Total Liabilities = Current Liabilities + Long term liabilities = $139,000 + $372,000 = $511,000
Total Stockholders’ Equity = Total Assets - Total Liabilities = $1,234,285.71 - $511,000 = $723,285.71
As a result, we have:
Return on Stockholders’ Equity = (Net Income / Total Stockholders Equity) * 100 = ($77,760 / $723,285.71) * 100 = 10.75%
b. If the asset base remains the same as computed in part a, but total asset turnover goes up to 4.00, what will be the new return on stockholders’ equity? Assume that the profit margin stays the same as do current and long-term liabilities.
This can be calculated as follows:
New Sales = Total Assets * New Assets Turnover Ratio = $1,234,285.71 * 4 = $4,937,142.86
New Net Income = New sales * Profit Margin = $4,937,142.86 * 1.8% = $88,868.57
As a result, we have:
New return on stockholders' equity = (New Net Income / Total Stockholders Equity) * 100 = ($88,868.57 / $723,285.71) * 100 = 12.29%
Joe believes in providing a work setting and culture that encourage workers to be creative and inspire employees to work hard to achieve company goals. Joe is a(n) _______ manager.
Larry estimates that the costs of insurance, license, and depreciation to operate his car total $460 per month and that the gas, oil, and maintenance costs are 33 cents per mile. Larry also estimates that, on average, he drives his car 2,000 miles per month.
Required:
a. How much cost would Larry expect to incur during April if he drove the car 1,545 miles? (Round your answer to 2 decimal places.)
b. Would it be meaningful for Larry to calculate an estimated average cost per mile for a typical 2,000-mile month?
a. Yes
b. No
Answer and Explanation:
a The computation of the cost is
= $460 + 1,545 miles × 0.33
= $460 + $509.85
= $969.85
b. It should not be considered as the meaningful as the fixed cost would remains the fixed i.e. $460 also the 0.33 per mile should be considered as the variable cost that change with the change in the no of miles covered
Therefore the same should be considered
Edible Chemicals Corporation owns a $2 million whole life insurance policy on the life of its CEO, naming Edible Chemicals as beneficiary. The annual premiums are $72,000 and are payable at the beginning of each year. The cash surrender value of the policy was $22,000 at the beginning of 2018.
1. & 2. Prepare the appropriate 2018 journal entries to record insurance expense and the increase in the investment assuming the cash surrender value of the policy increased according to the contract to $28,200. The CEO died at the end of 2018.
Answer:
1. Dr Insurance expense $65,800
Dr Cash surrender value of life insurance $6,200
Cr Cash $72,000
2. Dr Cash $2000,000
Cr Cash surrender value of life insurance $28,200
Cr Gain on life insurance settlement $1,971,800
Explanation:
1. & 2. Preparation of the appropriate 2018 journal entries to record insurance expense and the increase in the investment
1. Dr Insurance expense $65,800
($72,000+$22,000-$28,200)
Dr Cash surrender value of life insurance $6,200
($72,000-$65,800)
Cr Cash $72,000
2. Dr Cash $2000,000
Cr Cash surrender value of life insurance $28,200
Cr Gain on life insurance settlement $1,971,800
($2000,000-$28,200)
Mantle Publications publishes a golf magazine for women. The magazine sells for $4.00 a copy on the newsstand. Yearly subscriptions to the magazine cost $36 per year (12 issues). In December 2016, Mantle Publications sells 4,000 copies of the golf magazine at newsstands and receives payment for 6,000 subscriptions for 2017. Financial statements are prepared monthly.
a. Indicate the accounts increased or decreased to record the December newsstand sales and subscriptions received.
b. Indicate the accounts increased or decreased for the necessary adjustment on January 31, 2017. The January 2017 issue has been mailed to subscribers.
Answer:
Accounting uses the Revenue recognition principle which means that a business should only recognize revenue when it has provided the service for which it was paid for.
a.
Date Account Title Debit Credit
12/31/2016 Cash $16,000
Sales Revenue $16,000
Working
= 4,000 issues sold for December * $4 per copy
= $16,000
Date Account Title Debit Credit
12/31/2016 Cash $216,000
Unearned Subscription Revenue $216,000
Working
= 6,000 subscriptions * $36 per subscription
= $216,000
b.
Date Account Title Debit Credit
12/31/2016 Unearned Subscription Revenue $18,000
Sales revenue $18,000
Working
= 216,000 * 1/ 12 months
= $18,000
Inflation affects the real value of future dollars and can therefore make signing long-term wage and loan agreements seem risky. This illustrates the issue of
Answer:
future price uncertainty
Explanation:
Inflation is a persistent rise in the general price levels
Types of inflation
demand pull inflation – this occurs when demand exceeds supply. When demand exceeds supply, prices rise
cost push inflation – this occurs when the cost of production increases. This leads to a reduction in supply. Higher prices are the resultant effect
Shoe leather cost is when people try to spend money immediately so they would not be holding money for a long time. This is because money loses its value in an inflation.
Menu costs are the costs of changing price constantly as a result of inflation, When there is inflation, prices increases regularly. As a result prices needs to be updated regularly.
Edwards Manufacturing Company purchases two component parts from three different suppliers. The suppliers have limited capacity and no one supplier can meet all the company's needs. In addition, the suppliers charge different prices for the components. Component price data (in price per unit) are as follows:Supplier Component 1 2 31 $10 $12 $142 $10 $10 $11Each supplier has a limited capacity in terms of total number of components it can supply. However, as long as Edwards provides sufficient advance orders, each supplier can devote its capacity to component 1, component 2, or any combination of the two components, if the total number of units ordered is within its capacity. Supplier capacities are as followsSupplier 1 2 3Capacity 600 1050 775If the Edwards production plan for the next period includes 1050 units of component 1 and 800 units of component 2, what purchases do you recommend? The is, how many units of each component should be ordered from each supplier?Supplier 1 2 3Component 1 Component 2 What is the total purchase cost for the components?
Answer:
Edwards Manufacturing Company
1. Number of units to order from each supplier:
Suppliers 1 2 3 Total
Component 1 600 450 0 1,050
Component 2 0 600 200 800
Total ordered 600 1,050 200 1,850
2. The total purchase cost for the components is:
= $19,600.
Explanation:
a) Data and Calculations:
Component price
Supplier 1 2 3
Component 1 $10 $12 $14
Component 2 $10 $10 $11
Suppliers' Capacities
Supplier 1 2 3
Component 1
Component 2
Total capacity 600 1,050 775
Edwards Production Plan
Component 1 = 1,050 units
Component 2 = 800 units
Objective:
Minimize Total Cost = $19,600
Constraints:
Total Supplier 1 <= 600
Total Supplier 2, <= 1,050
Total Supplier 3, <= 775
Total Component 1, = 1,050
Total Component 2, = 800
Component 1 Component 2
Suppliers 1 2 3 1 2 3
Numbers of units to
order from supplier 600 450 0 0 600 200
Total units 1,050 + 800
Component 1 Component 2
Suppliers 1 2 3 1 2 3
Numbers of units to
order from supplier 600 450 0 0 600 200
Price of units $10 $12 $14 $10 $10 $11
Total costs $6,000 $5,400 $0 $0 $6,000 2,200
= $19,600
Number of units to order from each supplier:
Suppliers 1 2 3 Total
Component 1 600 450 0 1,050
Component 2 0 600 200 800
Total ordered 600 1,050 200 1,850
Capacity of suppliers 600 1,050 775
Gross Inc. signs a five-year licensing agreement with Maiger Company. Gross Inc. will pay Maiger annual installment payments of $10,500 at the beginning of each of the five years. The fair value of the contract is $48,000. Over the five-year contract period, Gross Inc. will pay interest of:
Answer:
$4,500
Explanation:
First, calculate the total Installment
Total Installment payment = Annual Installment x Numbers of annual
Where
Annual Installment = $10,500 per year
Numbers of annual = 5 years
Installment payment = $10,500 per year x 5 years
Installment payment = $52,500
Now use the following formula to calculate the Interest payent
Interest payment = Installment Payment - Fair value of contract
Where
Installment Payment = $52,500
Fair value of contract = $48,000
Placing values in the formula
Interest payment = $52,500 - $48,000
Interest payment = $4,500
To the extent that a firm is able to standardize its products across country borders, use the same or similar production facilities, and coordinate critical resource functions, the more likely it is to achieve optimum economies of scale. Group of answer choices
Answer: True
Explanation:
When a firm is able to use the same or similar processes across different countries to produce goods and services, they will get more adept at using them and will be able to acquire resources at a cheaper rate because they acquire the required resources in huge quantities.
This will lead to optimum economies of scale because costs would be saved from both knowing how to be more efficient across various nations and being able to acquire resources at the lowest prices.
Which of the following expressions correctly describes economic profits? A. Marginal revenuesexplicit costs. B. Total revenuesexplicit costs. C. Total revenuesimplicit costsexplicit costs. D. Marginal revenuesimplicit costsexplicit costs.
Answer:
C. Total revenuesimplicit costsexplicit costs.
Explanation:
The formula to compute the economic profits is shown below:
The economic profit is
= Total revenue - (explicit cost + implicit cost)
or
= Total revenue - explicit cost - implicit cost
So based on the above formula, the option c is correct
And, the rest of the options are incorrect
What is the best candle brand for the cost performance?
Answer:
Yankee candle
Explanation:
When Kimberly finds out that members of her team are using unethical practices to make sales and obtain information, her solution is to hold a Code of Ethics workshop. Is this an appropriate response for her to have?a. Yes; as the manager of these two employees, she is responsible for making sue they know what the expectations of behavior are. b. Yes; she is not allowed to take any disciplinary actions. c. No; she should fire both of them immediately. d. No; it is not her responsibility to educate these employees. They should be in charge of deciding their own ethical behavior.
Answer:
The answer is "Option a".
Explanation:
If Kimberly discovers if her team members use immoral techniques in sales and information, then can organize a workshop on the code of ethics. It is responsible for making sure that he knows the standards of conduct, which is the proper answer for her supervisor of the 2 employees. This code of ethics focuses on people and organizations' values and standards for governing their decisions, as well as on distinguishing the difference between right and wrong.
SONAD COMPANY Income Statement For Year Ended December 31 Sales $ 1,828,000 Cost of goods sold 991,000 Gross profit 837,000 Operating expenses Salaries expense $ 245,535 Depreciation expense 44,200 Rent expense 49,600 Amortization expenses—Patents 4,200 Utilities expense 18,125 361,660 475,340 Gain on sale of equipment 6,200 Net income $ 481,540 Accounts receivable $ 30,500 increase Accounts payable $ 12,500 decrease Inventory 25,000 increase Salaries payable 3,500 decrease Prepare the operating activities section of the statement of cash flows using the indirect method. (Amounts to be deducted should be indicated with a minus sign.)
Answer:
Statement of Cash Flows (partial)
Cash flows from operating activities
Net income $481,540
Adjustments to reconcile net income to
net cash provided by operating activities
Income statement items not affecting cash
Depreciation expense $44,200
Gain on sale of equipment -$6,200
Amortization expenses–Patents $4200
Changes in current operating
assets and liabilities
Decrease in accounts payable -$12,500
Decrease in salaries payable -$3,500
Increase in accounts receivable -$30,500
Increase in Inventory -$25,000
Net changes -$29,300
Cash flows from operating activities $452,240
The amount due on the maturity date of a $10,900, 60-day 6%, note receivable is: (Use 360 days a year.)
Answer:
$11,009
Explanation:
Calculation to determine The amount due on the maturity date
Amount due =10900 x .06 x 1/6 = $109 + $ 10900
Amount due=$11,009
Therefore The amount due on the maturity date is $11,009
Journalize Closing Entries Using the information from the Adjusted Trial Balance, journalize the closing entries for the end of the month.
Date SMART TOUCH LEARNING Adjusted Trial Balance December 31, 2016 Accounts and Explanation Debit Credit Account Title Balance Debit Credit 19.800 Accounts Recewable 10.900 Date Office Supplies Accounts and Explanation 200 Debit Credit Prepaid Rent 13.200 Furniture 23.100 Acumulated Depreciation Accounts Payable 2.600 Salanes Payable 600 best Pay 200 Uneaned Re Notes able Date Accounts and Explanation Debit Credit Comment 12.000 Dividends 33.700 Serce Reven 50.000 Depression Expense Rumine Date Accounts and Explanation Debit Credit Interesten 300 Rent tense Slanes Expen 4.600 1,000 Total 113.300
Answer:
Smart Touch Learning
Closing Journal Entries:
Debit Service Revenue $50,000
Credit Income Summary $50,000
To close service revenue to income summary.
Debit Income Summary $12,400
Credit Depreciation Expense $6,500
Credit Interest Expense $300
Credit Rent Expense $4,600
Credit Salaries Expense $1,000
To close expenses to the income summary.
Debit Income Summary $37,600
Credit Retained Earnings $37,600
To close income summary to retained earnings.
Debit Retained Earnings $37,600
Credit Dividends $33,700
To close dividends to retained earnings.
Explanation:
a) Data and Analysis:
SMART TOUCH LEARNING
Adjusted Trial Balance
December 31, 2016
Accounts and Explanation Debit Credit
Account Title Balance Debit Credit
Cash 19,800
Accounts Receivable 10,900
Office Supplies 200
Prepaid Rent 13,200
Furniture 23,100
Accumulated Depreciation 7,900
Accounts Payable 2,600
Salaries Payable 600
Interest Payable 200
Unearned Revenue 5,000
Notes Payable 12,000
Common stock 35,000
Dividends 33,700
Service Revenue 50,000
Depreciation Expense 6,500
Interest Expense 300
Rent Expense 4,600
Salaries Expense 1,000
Total 113,300 113,300
Analysis of Closing Entries:
Service Revenue $50,000 Income Summary $50,000
Income Summary $6,500 Depreciation Expense $6,500
Income Summary $300 Interest Expense $300
Income Summary $4,600 Rent Expense $4,600
Income Summary $1,000 Salaries Expense $1,000
Income Summary $37,600 Retained Earnings $37,600
Retained Earnings $37,600 Dividends $33,700