Answer:
$3.74 per equivalent unit
Explanation:
beginning WIP 10,000 units, which were 70% complete = 7,000 equivalent units
units started and completed during the month 50,000
ending WIP 5,000, which were 10% complete = 500 equivalent units
costs incurred = $200,000
under FIFO, total equivalent units:
beginning WIP completed (100% - 70%) x 10,000 = 3,000 units
+ units started and completed 50,000 units
+ ending WIP 5,000 x 10% = 500
total units = 53,500 equivalent units
cost per equivalent unit = $200,000 / 53,500 = $3.738 or $3.74 per equivalent unit
Information about the assets of TAP Holdings is provided below:
• TAP purchased land on January 1, 2013 for $250 million. As of January 1, 2018, the fair value was estimated to be $290 million.
• TAP purchased a trademark on January 1, 2016 for $150 million. As of January 1, 2018, the fair value was estimated to be $80 million.
• TAP acquired a company on Jun 5, 2016 and recognized $880 million in goodwill as a result. A $140 million goodwill impairment was recognized at year end 2017.
• Assume a useful life of 5 years and the straight-line method for any depreciable or amortizable assets above.
Assume TAP reports under US GAAP. What is the total value of these assets reported on TAP's balance sheet as of January 1, 2018
a) $ 1,070 million
b) $ 890 million
c) $1,170 million
d) $1,140 million
Answer:
The total value of these assets reported on TAP's balance sheet as of January 1, 2018 is $ 1,070 million. The right answer is a
Explanation:
In order to calculate the total value of these assets reported on TAP's balance sheet as of January 1, 2018 we would have to make the following calculation with the following formula:
Total Value of Assets = Land at cost + Trade Mark at Fair Value + Goodwill after impairment loss
Note: Under the US Gaap the land is presented at Cost
Therefore, Total Value of Assets = $250 million + $80 million + ( $880 million-$140 million)
Total Value of Assets = $250 million+$80 million+$740 million
Total Value of Assets = $ 1,070 million
The total value of these assets reported on TAP's balance sheet as of January 1, 2018 is $ 1,070 million
When Angela graduated with a degree in computer science and started her software company, she posted a sign that read, "This company will always operate within the legal limits of the law." Posted where all employees could clearly see it each day, this demonstrated __________.
O her commitment to high ethical standards of behavior.
O her expectation that all employees follow the laws that apply to the business.
O her commitment to respect the law.
O her aversion to cheating, stealing, and dishonesty.
Answer: her expectation that all employees follow the laws that apply to the business.
Explanation: Angela posting a sign that read "This company will always operate within the legal limits of the law." and by posting it where all her employees could see each day only serves to reinforce her expectation that all employees follow the laws that apply to the business. By following the laws that apply to the business and by employees doing same help ensures that her business is protected from paying the price of convictions from crimes that are against the law. Be that as it may, it is important for companies to operate within legal frameworks as this ensures that a company behaves in an ethical manner.
Answer:
Her expectation that all employees follow the laws that apply to the business.
Explanation:
In as much as it is self explanatory above that she wants her employees to adhere to the government policies, she also want them to adhere to the policies guiding and protecting her business. Also an employment contract may state how long this qualification period is;
Working out employment status for an employee.
Also they could be required to: 1). work regularly unless they’re on leave, for example holiday, sick leave or maternity leave.
2). They’re required to do a minimum number of hours and expect to be paid for time worked.
3). They can’t send someone else to do their work.
4). The business deducts tax and National Insurance contributions from their wages.
5). They get paid holiday.
6). They’re entitled to contractual or Statutory Sick Pay, and maternity or paternity pay.
is it possible for a hospitality operation to be operating at a profit durany any given month but to simultaneously have insufficient cash flow during that same month
Answer:
Yes
Explanation:
Cash flow is defined as the available cash for business operation as a result of the difference between the cash available at the beginning of a period and the cash available at the end of that period ,
One major factor responsible for an insufficient cash flow is the bad timing of income and expenses. Imagine your bills are due and overdue customers invoices are not yet paid . It may also be that a lot is invested in the inventory while a little income is earned.
When more is being spent on investment compared to what is coming in , it can also lead to poor cash flow.
As an hospitality also engages in activities that could impact cash flow as mentioned above , it is possible it operates at profit and still have an insufficient cash flow.
Radar Company sells bikes for $480 each. The company currently sells 4,000 bikes per year and could make as many as 4,370 bikes per year. The bikes cost $260 each to make: $160 in variable costs per bike and $100 of fixed costs per bike. Radar received an offer from a potential customer who wants to buy 370 bikes for $460 each. Incremental fixed costs to make this order are $46,000. No other costs will change if this order is accepted.
Compute Radar's additional income (ignore taxes) if it accepts this order.
Answer:
$65,000
Explanation:
The total cost of the additional order will be $46,000 of fixed costs and an additional $160 of variable costs for each of the 370 bikes. The additional production cost is:
[tex]C=\$46,000+370*\$160\\C=\$105,200[/tex]
If each bike is going to be sold for $460, then the additional income (excluding taxes) from accepting this order is:
[tex]I=(price*units)-cost\\I=(\$460*370)-\$105,200\\I=\$65,000[/tex]
Radar's additional income is $65,000.
Brecker Inc., a greeting card company, had the following statements prepared as of December 31, 2017.
BRECKER INC.
COMPARATIVE BALANCE SHEET
AS OF DECEMBER 31, 2017 AND 2016
12/31/17 12/31/16
Cash $6,000 $7,000
Accounts receivable 62,000 51,000
Short-term debt investments
(available-for-sale) 35,000 18,000
Inventory 40,000 60,000
Prepaid rent 5,000 4,000
Equipment 154,000 130,000
Accumulated depreciation
—equipment (35,000 ) (25,000 )
Copyrights 46,000 50,000
Total assets $313,000 $295,000
Accounts payable $46,000 $40,000
Income taxes payable 4,000 6,000
Salaries and wages payable 8,000 4,000
Short-term loans payable 8,000 10,000
Long-term loans payable 60,000 69,000
Common stock, $10 par 100,000 100,000
Contributed capital, common
stock 30,000 30,000
Retained earnings 57,000 36,000
Total liabilities &
stockholders’ equity $313,000 $295,000
BRECKER INC.
INCOME STATEMENT
FOR THE YEAR ENDING DECEMBER 31, 2017
Sales revenue $338,150
Cost of goods sold 175,000
Gross profit 163,150
Operating expenses 120,000
Operating income 43,150
Interest expense $11,400
Gain on sale of equipment 2,000 9,400
Income before tax 33,750
Income tax expense 6,750
Net income 27000
Additional information:
1. Dividends in the amount of $6,000 were declared and paid during 2017.
2. Depreciation expense and amortization expense are included in operating expenses.
3. No unrealized gains or losses have occurred on the investments during the year.
4. Equipment that had a cost of $20,000 and was 70% depreciated was sold during 2017.
Prepare a statement of cash flows using the direct method. (Show amounts that decrease cash flow with either a - sign e.g. -15,000 or in parenthesis e.g. (15,000).)
Answer and Explanation:
The presentation of the cash flow statement using the direct method is presented below:
Cash flow statement
Particulars Amount ($) Total Amount($)
Cash flow from operating activities:-
Cash received from customers 327,150
Less-Cash paid to suppliers (149,000)
Less-Cash paid for operating expenses (89,000)
Less-Cash paid for interest (11,400)
Less- Cash paid for income taxes (8,750)
Net cash $69,000
Cash flow from investing activities
Sale of equipment {[$20,000-($20,000 × 70%)] + $2,000} 8,000
Less-Equipment purchase [$154,000 - ($130,000 - $20,000)] (44,000)
Less - Purchase of available –for-sale on investments (17,000)
($18,000-$35,000)
Net cash used by investing activities $53,000
Cash flow from financing activities:-
Less - Principle payment on long term loan ($69,000-$60,000) (9,000)
Less - Principle payment on short term loan ($10,000-$8,000) (2,000)
Less - Paid Dividend (6,000)
Net cash used by financing activities ($17,000)
Net Cash decrease (1,000)
Add : December 31,2016 Cash 7,000
December 31,2017 Cash 6,000
Working notes
1. Particular Amount ($)
Sales 338,150
Less - Account Receivable increase ($62,000-$51,000) (11,000)
Cash received by customers 327,150
2. Particular Amount ($)
Cost of goods sold 175,000
Less-Decrease in inventory ($40,000-$60,000) (20,000)
Less-Increase in accounts payable ($46,000-$40,000) (6,000)
Cash paid to suppliers 149,000
3. Particular Amount ($)
Operating expenses 120,000
Add-Increase in prepaid rent ($5,000-$4,000) 1,000
Less-Amortization of copyright ($46,000-$50,000) (4,000)
Less-Depreciation expenses [$35,000-{$25,000-($20,000*70/100)}] (24,000)
Less-Increase in salaries and wages payable($4,000-$8,000) (4,000)
Cash paid for operating expenses 89,000
4. Particular Amount ($)
Income tax expense 6,750
Add-Income tax payable decrease($6,000-$4,000) 2,000
Total cash paid for income tax 8,750
The statement of cash flows using the direct method is $6,000.
Brecker Inc., Statement of cash flows
Cash flows from operating activities:
Cash received from customers $327,150
[$338,150 - ($62,000 - $51,000)]
Less Cash paid to suppliers ($149,000)
[$175,000 - ($46,000 - $40,000) + ($40,000 - $60,000)]
Less Cash paid for operating expenses ($89,000)
[$120,000 + ($5,000 - $4,000) - ($35,000 - ($25,000 - ($20,000 ×70%))) + ($46,000 - $50,000) + ($4,000 - $8,000)]
Less Cash paid for interest ($11,400)
Less Cash paid for income taxes ($8,750)
[$6,750 + ($6,000 - $4,000)]
Net cash provided by operating activities $69,000
Cash flows from financing activities:
Sales of equipment $8,000
[($20,000 - ($20,000 ×70%)) + $2,000]
Less Purchase of equipment ($44,000)
($154,000 - $130,000 + $20,000)
Add Purchase of available-for-sale investments -$17,000
($18,000 -$35,000)
Net cash used by financing activities -$53,000
Cash flows from investing activities:
Principal payment on short-term loan -$2,000
($8,000 - $10,000)
Less Principal payment on long-term loan ($9,000)
($69,000 - $60,000)
Less Dividend payment $6,000
Net cash used by financing activities -$17,000
Net decrease in cash -$1,000
[$69,000+(-$53,000)+(-$17,000)]
Add Cash, December 31, 2016 $7,000
Cash, December 31, 2017, $6,000
($-1,000+$7,000)
Inconclusion the statement of cash flows using the direct method is $6,000.
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Phelps Inc. acquired 20% of the outstanding common stock of Theresa Kulikowski Inc. on December 31, 2020. The purchase price was $1,200,000 for 50,000 shares. Kulikowski Inc declared and paid an 50.85 per share cash dividend on June 30 and on December 31, 2021. Kulikowski reported net income of $730,000 for 2021. The fair value of Kulikowski's stock was $27 per share at December 31, 2021
Required:
a. Prepare the journal entries for Jayce Phelps inc. for 2020 and 2021, assuming that Phelps cannot exercise significant influence over Kulkowski.
b. Prepare the journal entries for Jayce Phelps Inc. for 2020 and 2021, assuming that Phelps can exercise significant influence over Kulikowski.
c. At what amount is the investment in securities reported on the balance sheet under each of these methods at December 31, 2021? What is the total net income reported in 2021 under each of these methods?
Answer and Explanation:
Phelps Inc
a)
Date Account titles and Explanation Debit ($) Credit ($)
Dec.31,2020
Dr Equity Investments 1,200,000
Cr Cash 1,200,000
June 30,2021
Dr Cash (50,000 shares * $0.85) 42,500
Cr Dividend Revenue 42,500
Dec. 31, 2021
Dr Cash (50,000 shares * $0.85) 42,500
Cr Dividend Revenue 42,500
Dr Fair Value Adjustment (Available-for-Sale) 150,000
Cr Unrealized Holding Gain or Loss - Equity* 150,000
Unrealized Holding Gain or Loss - Equity-
Amount ($)
Cost 1,200,000
Fair Value (50,000 shares * $27) 1,350,000
Unrealized Gain or (Loss) 150,000
b)
Date Particulars Debit ($) Credit ($)
Dec.31,2020
Dr Equity Investments (Kulikowski Stock)
1,200,000
Cr Cash 1,200,000
June 30,2021
Dr Cash (50,000 shares * $0.85) 42,500
Cr Equity Investment (Kulikowoski Stock) 42,500
Dec. 31, 2021
Dr Cash (50,000 shares * $0.85) 42,500
Cr Equity Investments (Kulikowski) 42,500
Dec 31, 2021
Dr Equity Investment (Kulikowski Stock) 146,000
CrRevenue from Investments (730000 * 20%) 146,000
c)
Reporting of investment in securities on the balance sheet:
Fair value method = (1,200,000+150,000)
= 1,350,000
Equity method = (1,200,000-42,500-42,500+146,000) = 1,261,000
Reporting on net income on the income statement:
Fair value method = Dividend Revenue = (42,500+42,500)= 85,000
Equity meethod = Revenue from investments = 146,000
Murray Plc owns 60% of the equity share capital of Federer Ltd. For the year ended 31 December 20X6 Federer reported profit after tax of pound200,000. During the year Federer had sold goods to Murray Plc for pound60,000 at cost plus 25%. At the year-end 70% of these goods were unsold. What is the profit attributable to the non-controlling interest in the consolidated statement of comprehensive income for the year ended 31 December 20X6?
Answer:
$76,640
Explanation:
The solution of profit attributable to the non-controlling interest is provided below:-
Percentage of equity share capital = 100% - Equity share capital percentage
= 100% - 60%
= 40%
As we know that if profit percentage is 25% on cost so sale percentage is equals to 20%
So,
Profit on sale value = Sale percentage × Sale value
= 20% × $60,000
= $8,400
now,
Total adjust profit = Profit after tax - Unrealized profit on unsold stock
= $200,000 - $8,400
= $191,600
and, after the total adjust profit finally
Profit attributable to the non-controlling interest = Total adjust profit × Percentage of equity share capital
= $191,600 × 40%
= $76,640
A company reports the following GAAP income statement: Income Statement (GAAP) ($ in millions) 2019A
Revenue 654
Operating expenses 254
Operating profit 400
Interest expense 14
Other expenses 3
Pretax profit 383
Taxes 77
Net income 306
In addition to the GAAP income statement, the company provided a 2019 non-GAAP disclosure identifying:
$12 million in stock-based compensation expense
$7 million in restructuring expenses
$5 million gain on sale
Assuming the company’s effective tax rate applies to non-GAAP items, estimate 2019 non-GAAP net income:
a. $295 million
b. $317 million
c. $323 million
d. $325 million
Answer:
a. $295 million
Explanation:
Effective tax rate = GAAP tax / GAAP Pretax profift = 77 / 383 = 0.2010, or 20.10%.
Therefore, 2019 non-GAAP net income can be estimated as follows:
Details $ in millions
GAAP Pretax Profit 383
Stock-based compensation expense (12)
Restructuring expenses (7)
Gain on sale 5
Non GAAP Pretax Profit 369
Taxes (20.10% * 369) (74)
Non-GAAP net income 295
Condensed financial data of Monty Company for 2020 and 2019 are presented below.
MONTY COMPANY
COMPARATIVE BALANCE SHEET
AS OF DECEMBER 31, 2020 AND 2019
2020 2019
Cash $1,810 $1,160
Receivables 1,740 1,310
Inventory 1,630 1,890
Plant assets 1,910 1,720
Accumulated depreciation (1,220 ) (1,180 )
Long-term investments (held-to-maturity) 1,280 1,420
$7,150 $6,320
Accounts payable $1,220 $920
Accrued liabilities 190 240
Bonds payable 1,420 1,580
Common stock 1,940 1,730
Retained earnings 2,380 1,850
$7,150 $6,320
MONTY COMPANY
INCOME STATEMENT
FOR THE YEAR ENDED DECEMBER 31, 2020
Sales revenue $6,960
Cost of goods sold 4,780
Gross margin 2,180
Selling and administrative expenses 920
Income from operations 1,260
Other revenues and gains
Gain on sale of investments 80
Income before tax 1,340
Income tax expense 550
Net income 790
Cash dividends 260
Income retained in business $530
Additional information:
During the year, $70 of common stock was issued in exchange for plant assets. No plant assets were sold in 2020.
Required:
1. Prepare a statement of cash flows using the indirect method.
Answer:
Monty Company
Statement of Cash Flows
December 31, 2020
Cash flows from operating activities
Net income $790
Adjustments to reconcile net income $40
+ depreciation expense $40
+ decrease in inventory $260
+ increase in accounts payable $300
- gain from sale of investments ($80)
- increase in accounts receivable ($430)
- decrease in accrued liabilities ($50)
Net cash flow from operating activities $830
Cash flows from investing activities
Sale of long term investments $140
Gain from sale of investments $80
Purchases of P, P & E ($190)
Net cash flow from investing activities $30
Cash flow from financing activities
Issuance of Common Stocks $210
- Payments of long term debt ($160)
- Dividends paid ($260)
Net cash from financing activities ($210)
Net increase in cash $650
+ Beginning cash balance $1,160
Ending cash balance $1,810
Amazon.com, Inc., headquartered in Seattle, WA, started its electronic commerce business in 1995 and expanded rapidly. The following transactions occurred during a recent year (dollars in millions):
1. Issued stock for $623 cash (example).
2. Purchased equipment costing $6,320, paying $4,893 in cash and charging the rest on account.
3. Paid $5,000 in principal and $300 in interest expense on long-term debt.
4. Earned $177,866 in sales revenue; collected $123,949 in cash with the customers owing the rest on their Amazon credit card account.
5. Incurred $25,249 in shipping expenses, all on credit.
6. Paid $118,241 cash on accounts owed to suppliers.
7. Incurred $10,069 in marketing expenses; paid cash.
8. Collected $38,200 in cash from customers paying on their Amazon credit card account.
9. Borrowed $16,231 in cash as long-term debt.
10. Used inventory costing $111,934 when sold to customers.
11. Paid $830 in income tax recorded as an expense in the prior year.
Required:
For each of the transactions, complete the tabulation, indicating the effect (positive value for increase, negative value for decrease, and leave blank if no effect) of each transaction.
Answer:
1. Issued stock for $623 cash
Assets increase by $623
Stockholders' equity increase by $623
2. Purchased equipment costing $6,320, paying $4,893 in cash and charging the rest on account.
Assets increase by $6,320 (equipment)
Assets decrease by $4,893 (cash)
So assets net increase by $1,427
Liabilities increase by $1,427 (the amount that was paid on account)
3. Paid $5,000 in principal and $300 in interest expense on long-term debt.
Liabilities decrease by $5,300
4. Earned $177,866 in sales revenue; collected $123,949 in cash with the customers owing the rest on their Amazon credit card account.
Revenue increases by $177,886.
Assets increase by $177,886
5. Incurred $25,249 in shipping expenses, all on credit.
Expenses increase by $25,249
Liabilities increase by $25,249
6. Paid $118,241 cash on accounts owed to suppliers.
Assets decrease by $118,241
Liabilities decrease by $118,241
7. Incurred $10,069 in marketing expenses; paid cash.
Expenses increase by $10,069
Assets decrease by $10,069
8. Collected $38,200 in cash from customers paying on their Amazon credit card account.
Assets increase by $38,200
9. Borrowed $16,231 in cash as long-term debt.
Assets increase by $16,231
Liabilities increase by $16,231
10. Used inventory costing $111,934 when sold to customers.
Assets decrease by $111,934
11. Paid $830 in income tax recorded as an expense in the prior year.
Liabilities decrease by $830
1.
Assets increase by $623
Stockholders' equity increase by $623
2.
Assets increase by $6,320 (equipment)
Assets decrease by $4,893 (cash)
So assets net increase by $1,427
Liabilities increase by $1,427
3.
Liabilities decrease by $5,300
4.
Revenue increases by $177,886.
Assets increase by $177,886
5.
Expenses increase by $25,249
Liabilities increase by $25,249
6.
Assets decrease by $118,241
Liabilities decrease by $118,241
7.
Expenses increase by $10,069
Assets decrease by $10,069
8.
Assets increase by $38,200
9.
Assets increase by $16,231
Liabilities increase by $16,231
10.
Assets decrease by $111,934
11.
Liabilities decrease by $830
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Arizona Corp. acquired the business Data Systems for $305,000 cash and assumed all liabilities at the date of purchase. Data’s books showed tangible assets of $310,000, liabilities of $16,000, and stockholders’ equity of $294,000. An appraiser assessed the fair market value of the tangible assets at $295,000 at the date of acquisition.
Required:
a. Compute the amount of goodwill acquired.
b. Record the acquisition in a financial statements model.
Answer:
a. $26,000
b. the acquisition in a financial statements model
Non - Current Assets
Goodwill $26,000
Tangible Assets $295,000
Total $321,000
Current Liabilities
Liabilities $16,000
Total $321,000
Explanation:
Goodwill is the excess of the Consideration / Purchase Price over the Assets and Liabilities acquired.
Assets and Liabilities are Acquired at their Acquisition date Fair Values not Book Values.
Goodwill Calculation :
Consideration $305,000
Less Assets Acquired:
Tangible Assets ($295,000)
Add Liabilities Acquired:
Liabilities $16,000
Goodwill $26,000
The Brite Beverage Company bottles soft drinks into aluminum cans. The manufacturing process consists of three activities:
Mixing: water, sugar, and beverage concentrate are mixed.
Filling: mixed beverage is filled into 12-oz. cans.
Packaging: properly filled cans are boxed into cardboard "fridge packs."
The activity costs associated with these activities for the period are as follows:
Mixing $216,000
Filling 168,000
Packaging 96,000
Total $480,000
The activity costs do not include materials costs, which are ignored for this analysis. Each can is expected to contain 12 ounces of beverage. Thus, after being filled, each can is automatically weighed. If a can is too light, it is rejected, or "kicked," from the filling line prior to being packaged. The primary cause of kicks is heat expansion. With heat expansion, the beverage overflows during filling, resulting in underweight cans. This process begins by mixing and filling 6,300,000 cans during the period, of which only 6,000,000 cans are actually packaged. Three hundred thousand cans are rejected due to underweight kicks. A process improvement team has determined that cooling the cans prior to filling them will reduce the amount of overflows due to expansion. After this improvement, the number of kicks is expected to decline from 300,000 cans to 63,000 cans, thus increasing the number of filled cans to 6,237,000 [6,000,000 + (300,000 â 63,000)].
Required:
a. Determine the total activity cost per packaged can under present operations. Round to the nearest cent.
b. Determine the amount of increased packaging activity costs from the expected improvements.
c. Determine the expected total activity cost per packaged can after improvements. Round to two decimal places.
Answer:
$0.008
$3,792
$0.078
Explanation:
As per the data given in the question,
a)
Total activity cost per packaged can under present operations = Total activity cost under present operations ÷ total cans packaged
= $480,000 ÷ 6,000,000
= $0.08 per can
b)
Current packaging cost = $96,000
Packaging cost per bottle = Current packaging cost ÷ total cans packaged
= $96,000 ÷ 6,000,000
= $0.016 per bottle
Fr 6,237,000 bottles,
Total packaging cost = total bottle × cost per bottle
= 6,237,000 × $0.016
= $99,792
Therefore, Amount of increased packaging activity costs from the expected improvements = total packaging cost - current packaging cost
= $99,792 - $96,000
= $3,792
c)
Total activity cost = mixing cost + filling cost + packaging cost
= $216,000 + $168,000 + $99,792
= $483,972
Hence, Expected total activity cost per packaged can after improvements = Total activity cost ÷ no. of bottles
= $483,972 ÷ 6,237,000
= $0.078
We simply applied the above formulas
2. Problem Statement: Quantum Logistics, Inc., a wholesale distributor, is considering the construction of a new warehouse to serve the southeastern geographic region near the Alabama-Georgia border. There are three cities being considered. After site visits and a budget analysis, the expected income and costs associated with locating in each of the cities has been determined. The life of the warehouse is expected to be 12 years, and MARR is 15%/year.
City Initial Cost Net Annual Income
Lagrange $990,000 $50,000
Auburn $710,000 $155,000
Anniston $850,000 $270,000
What is the annual worth of each site? (Round answers to the nearest dollar; tolerance is +2.00)
Answer:
City Annual worth($)
Lagrange (132,635.97)
Auburn 24,018.65
Anniston 113,191.34
Explanation:
Annual worth of each site is the equivalent annual cost . It is determined by dividing the net present value of cost by the annuity factor of the investment period.
Net Present Value of cost = Initial cost - Present Value(PV) of annual income
PV of annual income = Annual income × Annuity factor
Annuity factor = (1 - (1+r)^(-n))/ r
r 15%, n -12
Annuity factor = (1 - 1.15^(-12))/0.15= 5.4206
PV of annual income = 50,000 × 5.4206= 271,030.9499
Net Present Value of cost = 990,000 - 271,030.94 = $(718,969.05 )
Annual worth= $(718,969.05 )/ 5.4206= (132,635.97)
Auburn
PV of annual income = 155,000× 5.4206= 840,195.94
NPV = 710,000 - 840,195.94 = 130,195.94
Annual worth = 130,195.9448/ 5.4206= 24,018.65
Anniston
PV of annual income = 270,000× 5.4206= 1,463,567.13
NPV = 850,000 - 1,463,567.13 = 613,567.12
Annual cost = 613,567.12 /5.4206= 113,191.34
City Annual worth
Lagrange (132,635.97)
Auburn 24,018.65
Anniston 113,191.34
Susan saved $5000 per year in her retirement account for 10 years (during age 25-35) and then quit saving. However, she did not make any withdrawal until she turned 65 (i.e., 30 years after she stopped saving). Her twin sister, Jane did not save anything during the 1st 10 years (during age 25-30) but saved $5,000 per year for 30 years (during age 35-65). What will be the difference in their retirement account balance at age 65, if their investments earned an average return of 8.5% during the entire period
Answer:
Instructions are below.
Explanation:
Giving the following information:
Susan:
Annual deposit= $5,000 for 10 years
Lumo-sum for 30 years
Interest rate= 8.5%
Jane:
Annual deposit= $5,000 for 30 years.
First, we will calculate the future value of Susan:
First 10 years:
FV= {A*[(1+i)^n-1]}/i
A= annual deposit
FV= {5,000*[(1.085^10)-1]}/0.085
FV= $74,175.50
Last 30 years:
FV= PV*(1+i)^n
FV= 74,175.50*(1.085^30)
FV= $857,050.14
Jane:
FV= {A*[(1+i)^n-1]}/i
A= annual deposit
FV= {5,000*[(1.085^30)-1]}/0.085
FV= $621,073.63
Earnings difference= 857,050.14 - 621,073.63= $235,976.51 in favor of Susan.
ASAP! GIVING BRAINLIEST TO THE CORRECT AWNSER.
Answer:
a: to provide government revenues
Explanation:
becuase its right
can i have brainliest now
Portions of the financial statements for Horizon Telecom are provided below. HORIZON TELECOM Income Statement For the Year Ended December 31, 2018 Revenues $616,000 Expenses: Cost of goods sold $366,000 Operating expenses 118,000 Depreciation expense 25,000 Income tax expense 53,500 Total expenses 562,500 Net Income $ 53,500 HORIZON TELECOM Selected Balance Sheet Data December 31, 2018 Increase in accounts receivable $ 5,300 Increase in inventory 11,300 Decrease in prepaid rent 9,900 Increase in operating expenses payable 5,000 Decrease in accounts payable 7,400 Increase in income tax payable 21,900 Prepare the operating activities section of the statement of cash flows for Horizon Telecom using the indirect method. (Amounts to be deducted and negative values should be indicated by minus sign.)
Answer:
Cash flow from Operating Activities
Net Income $ 53,500
Adjust for Non-Cash items :
Depreciation expense 25,000
Adjust for Working Capital items :
Increase in accounts receivable ($ 5,300)
Increase in inventory ($11,300)
Decrease in prepaid rent $9,900
Increase in operating expenses payable$5,000
Decrease in accounts payable ($7,400)
Increase in income tax payable $21,900
Net Cash from Operating Activities $91,300
Explanation:
Prepare Operating activities section of the statement of cash flows for Horizon Telecom as above.
At the beginning of the tax year, Barnaby's basis in the BBB Partnership was $118,800, including his $11,880 share of partnership debt. At the end of the tax year, his share of debt was $17,820. His share of the partnership's income for the year was $47,520, and he received cash distributions totaling $29,700. In addition, his share of the partnership's nontaxable income was $2,376.
Determine Barnaby's basis at the end of the tax year.
Answer: $144,936
Explanation:
First start by removing the initial debt from the initial basis so as not to inflate the basis.
= 118,800 - 11,880
= $106,920
That is the Initial basis void of debt.
Then add anything that will increase the basis and remove anything that will reduce the basis. Income and debt generally increase the basis while dividends or cash Distributions reduce them.
The Ending basis is therefore,
= Pre debt Initial basis + Partnership Income + ending debt + Nontaxable income - Cash Distribution
= 106,920 + 47,520 + 17,820 + 2,376 - 29,700
= $144,936
Barnaby's basis at the end of the tax year is $144,936.
Ayala Inc. has conducted the following analysis related to its product lines, using a traditional costing system (volume-based) and an activity-based costing system. Both the traditional and the activity-based costing systems include direct materials and direct labor costs.
Products Sales Revenue Traditional ABC
Product 540X 198,200 54,440 45,520
Product 137Y 158,700 49,090 39,290
Product 249S 83,190 11,290 30,010
Instructions
a) For each product line, compute operating income using the traditional costing system.
b) For each product line, compute operating income using the activity-based costing system
c) Using the following formula, compute the percentage difference in operating income for each of the product lines of Ayala:{Operating Income (ABC)-Operating Income traditional cost)]divided operating Income (traditional cost)(round the percentage to two decimals).
Answer and Explanation:
a. The computation of operating income using the traditional costing system is shown below:-
Product Sales Revenue Traditional Operating income
540X $198,200 $54,440 $143,760
137Y $158,700 $49,090 $109,610
249S $83,190 $11,290 $71,900
Therefore for reaching the operating income we simply deduct the traditional from sales revenue of every product.
b. The computation of operating income using the activity-based costing system is shown below:-
Products Sales Revenue ABC Operating income
540X $198,200 $45,520 $152,680
137Y $158,700 $39,290 $119,410
249S $83,190 $30,010 $53,180
So, for reaching the operating income we simply deduct the ABC from sales revenue of every product.
c. The computation of percentage difference in operating income for each of the product lines is shown below:-
Products Operating Income Operating Income Percentage
(ABC) traditional cost difference
540X $152,680 $143,760 6.20%
137Y $119,410 $109,610 8.94%
249S $53,180 $71,900 -26.04%
Now, to reach the percentage difference we simply deduct the operating income traditional cost from operating income and after the result we divide by operating income traditional cost.
The calculation of following things should be done below:
a. The computation of operating income using the traditional costing system is
Product Sales Revenue Traditional Operating income
540X $198,200 $54,440 $143,760
137Y $158,700 $49,090 $109,610
249S $83,190 $11,290 $71,900
b. The computation of operating income using the activity-based costing system is
Products Sales Revenue ABC Operating income
540X $198,200 $45,520 $152,680
137Y $158,700 $39,290 $119,410
249S $83,190 $30,010 $53,180
c. The computation of percentage difference in operating income for each of the product lines
Products Operating Income Operating Income Percentage
(ABC) traditional cost difference
540X $152,680 $143,760 6.20%
137Y $119,410 $109,610 8.94%
249S $53,180 $71,900 -26.04%
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five (5) specific forces that are acting as stimulants for change, state and explain them with relevant examples.
Explanation:
It can be mentioned as the five specific forces that are acting as stimulators for change the forces:
Competition Nature of the workforce economy Policy TechnologyThese are stimulating forces for change because they are factors that drive the change process so that organizational activities are able to remain and adapt in the market according to what happens in your micro and macro business environment.
Market competition is a factor that makes companies always willing to develop new methods, products and services so that they can achieve better results in the market search than competing companies. Integrated with the competition is the search for technology, which innovates the way in which techniques are developed and exists to facilitate and change work, as well as methods of using work forces.
Political and economic scenarios are also forces that drive change and the decisions that companies make in the market to seek better results and achieve their goals.
When Disney relied on licensing agreements with the Oriental Land Company to open its first foreign theme park, Tokyo Disneyland, 35) A) Its licensing partner, the Oriental Land Company reaped the windfall, because the partner who bore the risk was also likely to be the biggest beneficiary from any upside gain. B) Japanese consumer buying habits and demographics no longer posed a challenge for Disney. C) It was Disney, not the Oriental Land Company, that reaped the windfall because of learning curve effects. D) Disney no longer needed to contend with fluctuating exchange rates and country-to-country variations in host government restrictions and requirements. E) Disney was able to meet the challenge of localizing its product offerings in Japan, leading to a low-cost advantage.
Answer:
Letter A is correct. Its licensing partner, the Oriental Land Company reaped the windfall, because the partner who bore the risk was also likely to be the biggest beneficiary from any upside gain.
Explanation:
When analyzing the other Disneylandia around the world, we can see a different case in Tokyo Disneylandia, which is the first in the world that does not belong entirely to Disney. Upon being opened under a license agreement in Tokyo, Disney receives only a royalty fee, and Oriental Land Company receives a substantially favorable profit from the existing value of the Disney brand in the world, and from its stable and well-structured operations model .
So in this license agreement, Disney controls the creative part of the business, and the Oriental Land Company operates the business, which means that there are profitable advantages for both companies.
Answer:
a
Explanation:
Sarah and Wei have an opportunity to buy a large parcel of land on the Willamette River, just two miles south of Salem. They want to build an amusement park on the land. Sarah approaches you and says, "Hey, I know you took that BA 333 class, so maybe you can help me figure out what to do. Wei and I need a lot of money to start up our amusement park and buy the land we want, and we're a little nervous about getting sued if someone gets thrown out of our roller coaster. What kind of business do you think we should we set up? We were thinking maybe we could just be partners. We'd prefer not to have anything formal written down--we think that might be bad for our friendship. What's your advice?"
Draft an answer to Sarah and Wei and include it in your document. Your answer should include: 1) your recommendation for the best entity choice; 2) a complete explanation of why this is the best option; 3) a secondary recommendation, in case Sarah and Wei don't like your first option; 4) an explanation as to why this is your second choice (i.e., compare to your first choice and explain why this is not as good, but still an acceptable option).
Answer:
Explanation below.
Explanation:
The recommendation that I will give or propose is that the agreement must have a legal backing.
This is the best recommendation that a wise person can proposes. It is a show of height of stupidity when an individual go into conjunction with another person without any written agreement that is backed legally. This because, when there is a problem in the future, the documents will be a way to solve it.
The other secondary option is written and signed agreement with video recording. This is not as good as the one mentioned above, but can still be considered as an alternative.
Succulent Juice Company manufactures and sells premium tomato juice by the gallon. Succulent just finished its first year of operations. The following data relates to this first year of operations.Number of Gallons Produced 80,000Number of Gallons Sold 70,000Sales Price $3.00/gallonUnit Product Cost (variable costing) $1.45/gallonContribution Margin $84,000Total Fixed Manufacturing Overhead $?Total Fixed Selling & Administrative $25,000Variable Selling & Administrative $?Inventory value under absorption costing $29,500Required:1. Prepare an Income statement for Succulent using the Absorption Costing Method. (Hints: How many units were in inventory? What was the cost per unit? Why is the CM only $84,000?)2. Explain in one or two sentences, the key differences between the net income under Absorption and the net income under Variable costing. Determine the variable costing net income. Prepare a variable costing income statement.
Answer:
Instructions are below.
Explanation:
Giving the following information:
Number of Gallons Produced 80,000
Number of Gallons Sold 70,000
Sales Price $3.00/gallon
Unit Product Cost (variable costing) $1.45/gallon
Contribution Margin $84,000
Total Fixed Manufacturing Overhead $?
Total Fixed Selling & Administrative $25,000
Variable Selling & Administrative $?Total Fixed Selling & Administrative $25,000
Variable Selling & Administrative $?
Inventory value under absorption costing $29,500
The difference between the absorption and variable costing method is that the first one includes the fixed manufacturing overhead in the product cost.
Absorption= direct material + direct labor + total unitary overhead
Variable= direct material + direct labor + unitary variable overhead
First, we will calculate all the missing information:
Sales= 3*70,000= 210,000
Total variable cost= 210,000 - 84,000= 126,000
Unitary varaible cost= 126,000/70,000= $1.8 per unit
Unitary variable selling and administrative= 1.8 - 1.45= 0.35
Unitary inventory production cost (absorption)= 29,500/10,000= $2.95
Unitary fixed manufacturing cost= 2.95 - 1.45= 1.5
Now, we can determine the income statement under absorption and variable costing method:
Absorption costing:
Sales= 210,000
COGS= 70,000*2.95= (206,500)
Gross profit= 3,500
Total Fixed Selling & Administrative= (25,000)
Variable Selling & Administrative= (0.35*70,000)=
Net operating income= (46,000)
Variable costing method:
Sales= 210,000
Total variable cost= (126,000)
Contribution margin= 84,000
Total Fixed Selling & Administrative= (25,000)
Total fixed manufacturing overhead= (80,000*1.5)= (120,000)
Net operating income= (61,000)
Managers at Trendy Fashions, a large retail chain, experience conflict and organizational politics. The company's customer service ratings suffer, and managers point to other departments as the cause of the problem. The conflicts and politics further contribute to the customer service problems. The CEO of this chain hears about the appreciative inquiry process and thinks this might be a good technique to use to improve this situation. He needs more information on this process.
The CEO needs to know that the first step in his appreciative inquiry change effort will begin with __________.
Answer:
identifying the positive elements of an organization or work unit that is performing well.
Explanation:
The appreciative inquiry process is a metodology to handle change that concentrates on the positive aspects in an organization instead of the negative ones. Also, the process has four steps:
1. Identifying the positive elements of an organization or work unit that is performing well.
2. Dreaming about good possibilities for the company's future and what might provide great results.
3. Designing the perfect strategies to accomplish goals.
4. Delivering conclusions about the other phases and discussing what can be done to to contribute to the company's goals.
According to this, the answer is that the CEO needs to know that the first step in his appreciative inquiry change effort will begin with identifying the positive elements of an organization or work unit that is performing well.
Blue Corporation is projecting a cash balance of $36,450 in its December 31, 2016, balance sheet. Blue’s schedule of expected collections from customers for the first quarter of 2017 shows total collections of $224,775. The schedule of expected payments for direct materials for the first quarter of 2017 shows total payments of $52,245. Other information gathered for the first quarter of 2017 is sale of equipment $3,645; direct labor $85,050, manufacturing overhead $42,525, selling and administrative expenses $54,675; and purchase of securities $17,010. Blue wants to maintain a balance of at least $30,375 cash at the end of each quarter.
Prepare a cash budget for the first quarter.
Answer and Explanation:
The Preparation of cash budget for the first quarter is following below:-
Cash Budget
Particulars Amount
Cash balance Beginning $36,450
Add: Receipts
Total Collection $224,775
Sale of equipment $3,645
Total receipts $228,420
Total cash available $265,870
Less: Disbursements
Direct material $52,245
Direct labor $85,050
Manufacturing overhead $42,525
Selling and
administrative overhead $54,675
Purchase of securities $17,010
Total Disbursements $251,535
Available excess available
cash over disbursements $14,335
Financing
Add: Purchase of securities $17,010
Less: Repayments -
Cash balance at ending $31,345
So, to reach at ending balance we simply added the purchase of securities and ending cash balance.
(Ignore income taxes). Dunay Corporation is considering investing $510,000 in a project. The life of the project would be 4 years. The project would require additional working capital of $24,000 which would be released for use elsewhere at the end of the project. The annual net cash inflows would be $162,000. The salvage value of the assets used in the project would be $41,000. The company uses a discount rate of 10%.
Compute the net present value of the project.
Answer:
NPV = $23,914.076
Explanation:
The net present value NPV) of a project is the present value of cash inflow less the present value of cash outflow of the project.
NPV = PV of cash inflow - PV of cash outflow
PV of cash inflow= 162,000 × (1- 1.1^(-4)/0.1)=513518.2023
PV of salvage value = 41,000× 1.1^(-4)= 28,003.55167
PV of recouped working capital = 24,000 × 1.1^(-4)= 16,392.32293
NPV = 513518.2023 + 28,003.55167 +16,392.32293 - (510,000+24,000)
=23914.076
NPV = $23,914.076
You are considering adding a new food product to your store for resale. You are certain that, in a month, minimum demand for the product will be 5 units, while maximum demand will be 8 units. (Unfortunately, the new product has a one-month shelf life and is considered to be waste at the end of the month.) You will pay $60/unit for this new product while you plan to sell the product at $100 ($30/unit profit). The estimated demand for this new product in any given month is 6 units (p=0.1), 7 units (p=0.4) and 8 units (p=0.5).
Required:
1. Using EMV analysis, how many units of the new product should be purchased for resale?
Answer:
explain the question better
Business Law - Case: Contract Law
Facts of the Case:
Bob is a recognized French horn player. Bob has played for several major symphonies. Last year Bob went through bankruptcy and in order to pay his rent for a couple of months took out loans from a small bank - Avarice Bank - and pledged his french horn as collateral. He was unable to make the first payment on the loan so the bank was getting ready to take the french horn for non-payment. Bob approached the director of the Gilroy Philarmonic International Symphony - Joe - for help - asking him to guarantee payment so he does not lose his french horn. Joe agreed to guarantee the payment - partially because Bob is scheduled as the featured performer at the Classic Polka Festival in Gilroy which Joe manages. Joe called Avarice Bank and said if Bob could not pay, he would, and Avarice accepted his guaranty by phone. Bob played for the Polka Festival (it was very successful), but immediately after, left town and his whereabouts are unknown. Avarice has contacted Joe and indicated they have not collected from Bob and they expect Joe to pay the debt. Joe told Avarice they did not have anything in writing from him (though there are witnesses who heard Joe guarantee payment) and he believes he will not be liable for Bob's debt. Avarice has indicated it will file suit for payment against Joe.
Instructions: Please provide your answers to the following questions:
Issue: What is the legal issue/dispute? (Be specific. Don’t just say Contract Law)
Decision: Who should prevail?
Support: Provide support for your decision. Describe what the law says about situations like this, and how it applies to this case.
Answer:
The issue is whether Joe is liable to pay for Bob to Avarice Bank or not.
Joe should prevail.
Explanation:
The original contract is between bank and Bob and in that contract Joe is not involved. Secondly payment on someone' behalf always has to be a written contract.
According to UCC, suretyships have to be written for them to be enforceable. This is mentioned in Statute of Frauds. It clearly states that any gurantee by thrid party for payment of debts has to be in writing.
tems is a start-up company that makes connectors for high-speed Internet connections. BotNet Systems has budgeted three hours of direct labor per connector, at a standard cost of $ 13 per hour. During August, technicians actually worked 192 hours completing 80 connectors. All 80 connectors actually produced were sold. BotNet paid the technicians $ 13.80 per hour. What is BotNet's direct labor cost variance for August?
Answer:
-$153.6 Unfavorable
Explanation:
As per the given question the solution of direct labor cost variance for August is provided below:-
Direct labor cost variance for August = (Standard rate - Actual rate) × Actual hour
= ($13 per hour - $13.80 per hour) × 192 hours
= -$0.8 × 192 hours
= -$153.6 Unfavorable
Here, the actual rate is higher than standard rate so the amount will come into unfavorable and to reach out the direct labor cost variance for august we put the value into formula.
The expectancy theory proposes that ________. extrinsic rewards will reduce intrinsic interest in a task employees can view work as being as natural as rest or play, and therefore the average person can learn to accept, and even seek, responsibility achievement, power, and affiliation are three important needs that help explain motivation within every human being, there exists a hierarchy of five needs and as each of these needs becomes substantially satisfied, the next one becomes dominant the strength of a tendency to act in a certain way depends on the strength of our expectation of a given outcome and its attractiveness
Answer: The strength of a tendency to act in a certain way depends on the strength of our expectation of a given outcome and its attractiveness
Explanation:
The Expectancy Theory defines the efforts of individuals at work. It suggests that people only work as hard as they think is needed for them to get a certain reward or benefit. This is why when there is just a basic salary, employees are not very hard-working but if a car is thrown in as a bonus for the employee of the year, they really put in work.
It therefore shows that the strength to act in a certain way is based on how an individual believes they will be compensated and if that compensation is worth it.
On April 1, Year 1, a company realizes that one of its main suppliers is having difficulty meeting delivery schedules, which is hurting the company's business. The supplier explains that it has a temporary lack of funds that is slowing its production cycle. The company agrees to lend $470,000 to its supplier using a 12-month, 11% note.
Record the following transactions for Shoemaker Corporation.
1. The loan of $470,000 and acceptance of the note receivable on April 1, Year 1 (If not entry is required for a transaction/event, select 'No journal entry required' in the first account field.)
2. The adjustment for accrued interest on December 31, Year 1. (If not entry is required for a transaction/event, select 'No journal entry required' in the first account field.)
3. Cash collection of the note and interest on April 1, 2002 (If not entry is required for a transaction/event, select 'No journal entry required' in the first account field.)
Answer:
1.
April 1, Year 1 Note Receivable 470000 Dr
Cash 470000 Cr
2.
December 31, Year 1 Interest receivable 38775 Dr
Interest Revenue 38775 Cr
3.
April 1, Year 2 Cash 521700 Dr
Note Receivable 470000 Cr
Interest Receivable 38775 Cr
Interest Revenue 12925 Cr
Explanation:
1.
The loan was extended on 1 April Year. The note received is an asset for the company and will be recorded as a debit to the note receivable account and a credit to cash as cash is being paid as an extension of loan to the supplier.
2.
The accrual principle states that the revenues and expenses relating to a particular period should be matched and recorded in their respective periods. Thus, on 31 December Year 1, the interest revenue relating to notes receivable for the period from April to December (9 months) will be recorded as a revenue and as a receivable as it will be received when the note matures.
Interest revenue = 470000 * 0.11 * 9/12 = 38775
3.
The amount for the loan and interest on it against the note receivable will be received on April 1 Year 2. The cash will be debited by the amount of note receivable and the interest revenue earned for 12 months on that note. The note receivable account and the interest receivable account will be credited which were assets and the interest revenue that relates to year 2 (3 months from January to march) will be credited against the cash.
Interest revenue Year 2 = 470000 * 0.11 * 3/12 = 12925
Cash = 470000 + 38775 + 12925 = 521700