Determine the amount to be paid in full settlement of each of two invoices, (a) and (b), assuming that credit for returns and allowances was received prior to payment and that all invoices were paid within the discount period. If required, round the answers to the nearest dollar. Merchandise (Invoice Amount) Freight Paid by Seller Freight Terms Returns and Allowances (Invoice Amount) a. $5,300 $400 FOB destination, 2/10, n/30 $1,250 b. 2,700 200 FOB shipping point, 1/10, n/30 800 a. $fill in the blank 1 b. $fill in the blank 2
Answer:
a. Amount to be paid = $4,369
b. Amount to be paid = $1,881
Explanation:
Note: Thee data in this question are merged together. They are therefore sorted before answering the question. See the attached pdf file for the complete question with the sorted data.
a. Invoice (a)
Amount to be paid = (Invoice amount - Returns and Allowances) - ((Invoice amount - Returns and Allowances) * 2%) + Freight Paid by Seller = ($5,300 - $1,250) - (($5,300 - $1,250) * 2%) + $400 = $4,369
b. Invoice (b)
Amount to be paid = (Invoice amount - Returns and Allowances) - ((Invoice amount - Returns and Allowances) * 1%) = ($2,700 - $800) - (($2,700 - $800) * 1%) = $1,881
The George Company has a policy of maintaining an end-of-month cash balance of at least $37,000. In months where a shortfall is expected, the company can draw in $1,000 increments on a line of credit it has with a local bank, at an interest rate of 12% per annum. All borrowings are assumed for budgeting purposes to occur at the beginning of the month, while all loan repayments (in $1,000 increments of principal) are assumed to occur at the end of the month. Interest is paid at the end of each month. For April, an end-of-month cash balance (prior to any financing and interest expense) of $24,000 is budgeted; for May, an excess of cash collected over cash payments (prior to any interest payments and loan repayments) of $28,000 is anticipated.
1.What is the interest payment estimated for April (there is no bank loan outstanding at the end of March)? (Do not round intermediate calculations.)
2.What is the total financing effect (cash interest plus loan transaction) for May? (Do not round intermediate calculations.)
Answer:
$140$14,140Explanation:
1. First find the net amount amount the company borrowed in April:
= Cash balance to be maintained + Loan repayment - Budgeted end of April balance
= 37,000 + 1,000 - 24,000
= $14,000
Interest = 14,000 * 12%/ 12 months
= $140
2. Financing effect:
= Amount borrowed + Interest
= 14,000 + 140
= $14,140
Windsor Company reports the following financial information before adjustments. Dr. Cr. Accounts Receivable $145,600 Allowance for Doubtful Accounts $3,350 Sales Revenue (all on credit) 834,000 Sales Returns and Allowances 53,540 Prepare the journal entry to record bad debt expense assuming Windsor Company estimates bad debts at (a) 4% of accounts receivable and (b) 4% of accounts receivable but Allowance for Doubtful Acc
Answer:
See below
Explanation:
1.
Bad debts ($145,600 × 4/100) = $5,824 - $3,350 = $4,000 Dr
...................To Allowance for doubtful account $4,000 Cr
(To record the estimation of 4% of bad debts on gross account receivable after adjusting the credit balance)
2.
Bad debts ($145,600 × 4/100) = $5,824 + $3,350 = $9,174 Dr
..............To Allowance for doubtful accounts $9,184 Cr
(To record 4% of account receivable but allowance for doubtful account).
Bob lives in Philadelphia and runs a business that sells guitars. In an average year, he receives $704,000 from selling guitars. Of this sales revenue, he must pay the manufacturer a wholesale cost of $404,000; he also pays wages and utility bills totaling $286,000. He owns his showroom; if he chooses to rent it out, he will receive $3,000 in rent per year. Assume that the value of this showroom does not depreciate over the year. Also, if Bob does not operate this guitar business, he can work as an accountant, receive an annual salary of $20,000 with no additional monetary costs, and rent out his showroom at the $3,000 per year rate. No other costs are incurred in running this guitar business.
Identify each of Charles's costs in the following table as either an implicit cost or an explicit cost of selling guitars
Implicit Cost Explicit Cost
1. The wholesale cost for the guitars that Charles pays the manufacturer
2. The wages and utility bills that Charles pays
3. The salary Charles could earn if he worked as an accountant
4. The rental income Charles could receive if he chose to rent out his showroom
Complete the following table by determining Charles's accounting and economic profit of his guitar business.
Profit (Dollars)
Accounting Profit
Economic Profit
Answer:
Explicit Cost
1. The wholesale cost for the guitars that Charles pays the manufacturer
2. The wages and utility bills that Charles pays
Implicit cost
3. The salary Charles could earn if he worked as an accountant
4. The rental income Charles could receive if he chose to rent out his showroom
$14,000
Economic profit = $-9000
Explanation:
Accounting profit= total revenue - explicit cost
Total revenue =price x quantity sold
Explicit cost includes the amount expended in running the business. They include rent , salary and cost of raw materials
Economic profit = accounting profit - implicit cost
Implicit cost is the cost of the next best option forgone when one alternative is chosen over other alternatives
Accounting profit = $704,000 - ( $404,000 + $286,000) = $14,000
Economic profit = $14,000 - ($3000 + $20,000) =$-9000
eight business functions
The following cost information pertained to the Violin Division of Stringing Music Co. and was based on monthly demand and sales of 100 units:
Per-Unit Costs Variable production costs:
Direct materials $140
Direct labor 170
Variable factory overhead 80
Fixed production costs:
Depreciation (equipment) 40
Factory rent 68
Other 16
Total production cost $514
Variable selling & administrative costs $24 per unit
Fixed selling & administrative costs $36 per unit
Assume that the Violin Division was evaluating whether or not it would accept a special sales order for 10 violins at $390 per unit. For this purpose, total relevant cost per unit (given the costs stated above) is:
a. $330
b. $342
c. $390
d. $366
e. $354
Answer:
Total relevant costs= $390
Explanation:
I will assume that the company has unused capacity and that the special offer will not affect the current sales. Given these assumptions, the fixed costs would not be taken into account.
Relevant costs:
Direct materials $140
Direct labor 170
Variable factory overhead 80
Total relevant costs= $390
On January 1, 2019, Metco Inc. reported 268,000 shares of $5 par value common stock as being issued and outstanding. On March 24, 2019, Metco Inc. purchased for its treasury 3,000 shares of its common stock at a price of $38.00 per share. On August 19, 2019, 610 of these treasury shares were sold for $46.50 per share. Metco's directors declared cash dividends of $0.40 per share during the second quarter and again during the fourth quarter, payable on June 30, 2019, and December 31, 2019, respectively. A 2% stock dividend was issued at the end of the year. There were no other transactions affecting common stock during the year. Calculate the number of shares of stock issued in the stock dividend.
Answer:
The number of shares of stock issued in the stock dividend is 5,312.20 shares.
Explanation:
This can be determined as follows:
Number of shares before stock dividend = Number of shares reported on January 1, 2019 - Number of shares purchased for its treasury on March 24, 2019 + Number of treasury shares were sold on August 19, 2019 = 268,000 - 3,000 + 610 = 265,610
Number of dividend shares = Number of shares before stock dividend * Rate of stock dividend issued = 265,610 * 2% = 5,312.20
Therefore, the number of shares of stock issued in the stock dividend is 5,312.20 shares.
The accountant for Eva's Laundry prepared the following unadjusted and adjusted trial balances. Assume that all balances in the unadjusted trial balance and the amounts of the adjustments are correct. Identify the errors in the accountant's adjusting entries, assuming that none of the accounts were affected by more than one adjusting entry.
Eva's Laundry
Trial Balances
May 31, 2018
Unadjusted Adjusted
Debit Balances Credit Balances Debit Balances Credit Balances
Cash . 7,500 7,500
Accounts Receivable . 18,250 23,250
Laundry Supplies 3,750 6,750
Prepaid Insurance* 5,200 1,600
Laundry Equipment . . 190,000 177,000
Accumulated Depreciation—Laundry
48,000 48,000
Accounts Payable 9,600 9,600
Wages Payable 1,000
Capital Stock . . 35,000 35,000
Retained Earnings 75,300 75,300
Dividends 28,775
Laundry Revenue 182,100 182,100
Wages Expense 49,200 49,200
Rent Expense . . 25,575 25,575
Utilities Expense . 18,500 18,500
Depreciation Expense 13,000
Laundry Supplies Expense 3,000
Insurance Expense 600
Miscellaneous Expense .3,250 3,250
350,000 350,000 358,000 351,000
Answer:
See the errors identified below.
Explanation:
Note: The data in this question are merged together. They are therefore sorted before answering the question. See the attached pdf file for the complete question with the sorted data.
The explanation of the answer is now given as follows:
The following errors can be identified in the accountant's adjusting entries:
1.The accountant debited the account receivable for $5,000 (i.e. $23,250 - $18,250 = $5,000) without crediting laundry revenue.
Therefore, we should have:
Correct amount of laundry revenue = Laundry revenue in trial balance + (Adjusted account receivable - Unadjusted account receivable) = $182,100 + ($23,250 - $18,250) = $187100
2. The accountant debited laundry suppliers expense instead of crediting laundry suppliers for $3,000.
3. The the accountant credited Prepaid insurance for $3,600 (i.e. $5,200 - $1,600 = $3,600). However, the insurance expense was debited for $600.
4. Instead of crediting accumulated depreciation, the laundry equipment for depreciation expense was erroneously credited by the accountant for $13,000.
5. A debit of $1,000 to wages expense was not made by the accountant.
Additional Note:
After correcting the errors identified above, the correct adjusted trial balance will look as the one in the attached photo.
Bruin Company received a $100,000 insurance payment on the death of its company president. The company annually paid $1,000 of non-deductible insurance premiums on the policy. Bruin reported the insurance receipt as income and deducted the premium payments on its books. For ASC 740 purposes, the income and deduction are characterized as:
Answer:
The description as per the given scenario is explained in the segment below.
Explanation:
The receipt of benefits would be a mandatory beneficial improvement as well as the premium charge seems to be a permanently undesirable distinction to be made.Besides ASC 740 considerations, the profits earned as initial deposit mostly on the dissolution of the organization's president as well as higher price loss on either the policy shall be defined as a permanent insurance gain as well as a constant unfavorable premium gap.can integrity be situational
Explanation:
Hope it will help you to solve your doubt.
In horizontal analysis the percent change is computed by: Multiple Choice Subtracting the analysis period amount from the base period amount. Subtracting the base period amount from the analysis period amount. Subtracting the analysis period amount from the base period amount, dividing the result by the base period amount, then multiplying that amount by 100. Subtracting the base period amount from the analysis period amount, dividing the result by the base period amount, then multiplying that amount by 100. Subtracting the base period amount from the analysis amount, then dividing the result by the analysis period amount.
Answer:
Subtracting the base period amount from the analysis period amount, dividing the result by the base period amount, and then multiplying that amount by 100.
Explanation:
Financial accounting is an accounting technique used for analyzing, summarizing and reporting of financial transactions like sales costs, purchase costs, payables and receivables of an organization using standard financial guidelines such as Generally Accepted Accounting Principles (GAAP) and financial accounting standards board (FASB). It can be defined as the field of accounting involving specific processes such as recording, summarizing, analysis and reporting of financial transactions with respect to business operations over a specific period of time. Financial experts or accountant uses either the cash basis or accrual basis of accounting.
There are two (2) main methods used in financial accounting for analyzing financial statements and these are;
I. Vertical analysis.
II. Horizontal analysis.
Horizontal analysis compares historical financial informations over a number of reporting periods.
In horizontal analysis the percent change is computed by subtracting the base period amount from the analysis period amount, dividing the result by the base period amount, and then multiplying that amount by 100.
The answer is D) Subtracting the base period amount from the analysis period amount, dividing the result by the base period amount, then multiplying that amount by 100.
Horizontal analysis, also known as trend analysis, is a financial analysis technique that compares financial data from different periods to determine the percentage change over time. To compute the percentage change, the analysis period amount is subtracted from the base period amount, then the result is divided by the base period amount. The quotient is then multiplied by 100 to obtain the percentage change.
The formula for horizontal analysis can be written as:
((Analysis period amount - Base period amount) / Base period amount) x 100
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A chain of video stores sells three different brands of DVD players. Of its DVD player sales, 50% are brand 1 (the least expensive), 30% are brand 2, and 20% are brand 3. Each manufacturer offers a 1-year warranty on parts and labor. It is known that 25% of brand 1's DVD players require warranty repair work, whereas the corresponding percentages for brands 2 and 3 are 20% and 10%, respectively.If a customer returns to the store with a DVD player that needs warranty repair work, what is the probability that it is a brand 1 DVD player
Answer: 60.98%
Explanation:
Probability that it is a brand 1 DVD player that needs repair work = Probability of brand 1 DVD needing repairs / Probability that a DVD player will need fixing while under warranty
Probability of brand 1 DVD needing repairs = Brand 1 sales percentage * Percentage of brand 1 needed repair
= 50% * 25%
= 12.5%
Probability that a DVD player will need fixing while under warranty = (50%* 25%) + (30% * 20%) + (20% * 10%)
= 20.5%
Probability that it is a brand 1 DVD player that needs repair work = 12.5% / 20.5%
= 60.98%
ystem anticipates that spending $300,000 on an advertising campaign will increase bed days by 650. The marketing department anticipates that each additional bed day will yield $2,100 in additional revenue and will increase costs by $1,700. The campaign Group of answer choices will reduce profits by $40,000. will increase profits by $40,000. will increase profits by $90,000. will increase profits by $210,000.
Answer:
Effect on income= -$40,000
Explanation:
First, we need to calculate the unitary contribution margin:
Unitary contribution margin= 2,100 - 1,700= $400
To calculate the effect on income, we need to use the following formula:
Effect on income= total contribution margin - increase in fixed costs
Effect on income= 650*400 - 300,000
Effect on income= -$40,000
Chuck Wagon Grills, Inc., makes a single productâa handmade specialty barbecue grill that it sells for $210. Data for last yearâs operations follow:
Units in beginning inventory 0
Units produced 20,000
Units sold 19,000
Units in ending inventory 1,000
Variable costs per unit:
Direct materials $ 50
Direct labor 80
Variable manufacturing overhead 20
Variable selling and administrative 10
Total variable cost per unit $ 160
Fixed costs:
Fixed manufacturing overhead $ 700,000
Fixed selling and administrative 285,000
Total fixed costs $ 985,000
Required:
1. Assume that the company uses absorption costing. Compute the unit product cost for one barbecue grill.
2. Assume that the company uses absorption costing. Prepare an income statement.
1. The computation of the unit product cost for one barbecue grill for Chuk Wagon Grills, Inc., using absorption costing, is $185.
2. The preparation of the income statement for Chuk Wagon Grills, Inc., using absorption costing, is as follows:
Chuk Wagon Grills, Inc.
Income StatementFor the year ended December 31,
Sales revenue $3,990,000
Cost of goods sold 3,515,000
Gross profit $475,000
Selling and Admin. Costs:
Variable 190,000
Fixed 285,000 $475,000
Net income $0
What is absorption costing?The absorption costing method captures the total cost of production, including direct and indirect costs.
The costs of selling and administration, whether variable or fixed, are treated as period costs and not assigned to products.
Data and Calculations:Selling price per unit = $210
Total sales revenue = $3,990,000 ($210 x 19,000)
Beginning inventory = 0 units
Units produced = 20,000
Units sold = 19,000
Ending inventory = 1,000
Variable costs per unit:Direct materials $ 50
Direct labor 80
Variable manufacturing overhead 20
Variable selling and administrative 10
Total variable cost per unit $ 160
Fixed costs:Fixed manufacturing overhead $ 700,000
Fixed selling and administrative 285,000
Total fixed costs $ 985,000
Absorption Costing:Direct materials $ 50
Direct labor 80
Variable manufacturing overhead 20
Total variable production cost per unit = $150
Total variable production cost = $3,000,000 ($150 x 20,000)
Fixed manufacturing overhead $ 700,000
Total manufacturing costs = $3,700,000 ($3,000,000 + $700,000)
Unit product cost = $185 ($3,700,000/20,000)
Cost of goods sold = $3,515,000 ($185 x 19,000)
Cost of ending inventory = $185,000 ($185 x 1,000)
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On January 1, 2007, Nichols Company's inventory of Item X consisted of 2,000 units that cost $8 each. During 2007 the company purchased 5,000 units of Item X at $10, each, and it sold 4,500 units. Periodic inventory procedure is used. Cost of goods sold using weighted-average cost is:
Answer:
For the cost of goods sold, the company made around $42,435
Explanation:
Solve cost of goods for Jan. 1st:
2000 units × $8
$16,000
Solve for cost of goods during 2007:
5000 units × $10
$50,000
Use the formula for weighted-average cost:
WAC per unit = cost of goods available for sale / units available for sale
WAC per unit = 16,000 + 50,000 / 2000 + 5000
WAC per unit = 66,000 / 7000
WAC per unit = 9.42857..... I will round to a dollar value
WAC per unit = 9.43
For cost of goods sold:
4,500 × 9.43 (please keep in mind 9.43 is a rounded number)
$42,435
The cost of goods sold using weighted-average cost under Periodic inventory is $42,429
Before calculating the cost of goods sold, first we have to determine the weighted average cost per unit.
For this following formula should be used:
= (Opening units × cost per unit + purchased units × cost per unit) ÷ (opening units + purchased units)
= (2,000 units × $8 + 5,000 units × $10) ÷ (2,000 units + 5,000 units)
= ($16,000 + $50,000) ÷ (7,000 units)
= $66,000 ÷ 7,000 units
= $9.428
Now the cost of goods sold using weighted-average cost is
= Number of units sold × average cost per unit
= 4,500 units × $9.428
= $42,429
Hence, we conclude that the cost of goods sold using weighted-average cost under Periodic inventory is $42,429.
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Braun Company has one service department and two operating (production) departments. Maintenance Department costs are allocated to the two operating departments based on square feet occupied. Listed below are the operating data for the current period:
Department Direct Expenses Square Feet
Maintenance $52,500 23,000
Milling 94,500 46,000
Assembly 123,400 69,000
The total cost of operating the Assembly Department for the current period is:_____.
Answer:
$154,900
Explanation:
The computation of the total cost of operating the assembly department as follows:
= Direct expenses of assembly department + allocated amount
= $123,400 + $52,500 × 69,000 ÷ (69,000 + 46,000)
= $123,400 + $52,500 × 69,000 ÷ 115,000
= $123,400 + $31,500
= $154,900
define risk economics.
Answer:
its like some part of your business is at risk
jus gave it a try
Stocks are shares of ownership in a company. A stock certificate represents stock ownership. It specifies the name of the company, the number of shares owned, and the type of stock it represents. Today, stock is generally held electronically; that is, the owners don't get a paper certificate unless they specifically want to hold the certificates themselves.
Choose whether each characteristic is an advantage or disadvantage of issuing stock, from the standpoint of the issuing company.
1. Dividends
2. Future buy back
3. Net profit after taxes
4. One vote per share
5. Repaid
6. Shareholders
Answer:
Advantages
Dividends Future buy backRepaidBy issuing dividends, a company can present a positive image to the outside world of how they take care of their investors. This will prompt more investors to come onboard.
Being able to buy back the stock is also an advantage because should the company decide that they want to reduce shareholder ownership, they would be able to.
Disadvantages
Net profit after taxesOne vote per shareShareholdersThe net profit after taxes of the company will be reduced because they are being shared as dividends with shareholders. A company would lose more control when shares are issued because the shares will have the right to vote on company affairs.
Laws regarding shareholders will place the company under strain as they try to ensure compliance.
A data mining routine has been applied to a transaction dataset and has classified 88 records as fraudulent (30 correctly so) and 952 as non-fraudulent (920 correctly so). Construct the classification matrix and calculate the error rate, sensitivity, and specificity.
Answer:
1. Classification Matrix:
Actual Class 1 0
1 30 58
0 32 920
2.Overall error rate (err) 8.65%
Accuracy% 91.35%
Explanation:
To Construct the classification matrix and to calculate the error rate
1.CONSTRUCTION OF THE CLASSIFICATION MATRIX
Classification Matrix:
Classification Confusion Matrix
Predicted Class
Actual Class 1 0
1 30 58
(88-30=58)
0 32 920
(952-920)
Calculation for the error rate
Using this formula
Overall error rate (err) = Sum of Misclassification transactions/Total transaction
Let plug in the formula
Overall error rate (err) =[(88-30)+(952-920)]/(952+88)
Overall error rate (err) = (58+32)/1040
Overall error rate (err) =0.08653*100
Overall error rate (err) = 8.65 %
Accuracy% = 1-err
Accuracy%=100%-8.65%
Accuracy%= 91.35%
Jackson, a self-employed taxpayer, uses his automobile 90% for business and during 2020 drove a total of 14,000 business miles. Information regarding his car expenses is listed below.
Business parking $140
Auto insurance 1,300
Auto club dues (includes towing service) 180
Toll road charges (business-related) 200
Oil changes and engine tune-ups 210
Repairs 160
Depreciation allowable 2,850
Fines for traffic violations (incurred during business use) 320
Gasoline purchases 2,800
1. What is Jackson's deduction in 2018 for the use of his car if he uses:
a. The actual cost method?
b. The automatic mileage method?
2. What records must Jackson maintain?
Answer:
A. $7,090
B. $8,390
C. The records that Jackson must maintain is to keep a LOG file that contain the copies of all the receipts for (a) as well as a mileage logs file for (b)
Explanation:
a) Calculation for What is Jackson's deduction for the use of his car if he uses The actual cost method
Jackson's deduction
= 140+200+(90%*1300+180+210+160+2,850+2,800)
Jackson's deduction=140+200+6,750
Jackson's deduction=$7,090
Therefore Jackson's deduction for the use of his car if he uses The actual cost method will be $7,090
b)Calculation for What is Jackson's deduction for the use of his car if he uses The automatic mileage method
Jackson's deduction=( 57.5%* 14,000)+140+200
Jackson's deduction= 8,050 + 140 +200
Jackson's deduction=$8,390
Therefore Jackson's deduction for the use of his car if he uses The automatic mileage method will be $8,390
c) Based on the information given the records
that Jackson must maintain is to keep a LOG file that contain the copies of all the receipts for (a) as well as a mileage logs file for (b)
define federal reserve system.
Answer:
The Federal Reserve System is the central bank of the United States. It performs five general functions to promote the effective operation of the U.S. economy and, more generally, the public interest.
Explanation:
Kelly owns 500 shares of Boston Corporation common stock which was purchased on March 20, 2000, for $70,000. On August 8 of the current year, she receives a distribution of 500 stock rights. Each stock right has a $10 FMV and the FMV of the Boston common stock is $40 per share. With each stock right, she may acquire on share of Boston common stock for $110.
a. How much gross income must Kelly recognize?
b. What is the basis of each stock right received?
c. If she sells the 100 stock rights for $9,000, what is her gain?
d. If she exercises the 100 stock rights on September 8, what is the basis of the 100 shares she receives and when does the holding period for those shares start?
Answer:
a. How much gross income must Kelly recognize?
$0, the distribution will not increase her gross income.
b. What is the basis of each stock right received?
{[(500 x $10)/ (500 x $10 + 500 x $40)] x $70,000} / 500 shares= $14,000 / 500 = $28
c. If she sells the 100 stock rights for $9,000, what is her gain?
gain = $9,000 - (100 x $28) = $6,200
d. If she exercises the 100 stock rights on September 8, what is the basis of the 100 shares she receives and when does the holding period for those shares start?
basis = $2,800 + (100 x $110) = $13,800
what is difference between T-Account and a ledger Account?(hint... what dose T-Account not have?)
Provide an example of two companies that have built in effective co-opetition. Briefly explain the benefit of the relationship describe one job that once existed but today is obsolete or slowly becoming obsolete because of technology provide an exampled of two companies that have built a strategic alliance. Briefly explain the benefits of the relationship.
Answer:
Microsoft and Apple, Samsung and sony.
Explanation:
Samsung electronics and sony formed an agreement in 2004 for use of shared knowledge and resources in designing flat television screens. A strategic alliance is a collaboration or a synergy where each partner gets the benefits of the alliance. Jobs such as travel agencies, cashiers, textile workers. A strategic alliance consists of healthy behavior, long terms goals, and better customer satisfaction.Following is the stockholders’ equity section of the balance sheet for The Procter & Gamble Company along with selected earnings and dividend data. For simplicity, balances for noncontrolling interests have been left out of income and shareholders' equity information.
$ millions except per share amounts 2014 2013
Net earnings attributable to Procter $10,956 $11,797
& Gamble shareholders
Common dividends 5,883 5,534
Preferred dividends 256 233
Basic net earnings per common share $3.82 $4.12
Diluted net earnings per common share $3.66 $3.93
Shareholders' equity:
Convertible class A preferred stock, $1,195 $1,234
stated value $1 per share
Common stock, stated value $1 per share 4,008 4,008
Additional paid-in capital 63,181 62,405
Treasury stock, at cost (shares held: (69,604) (67,278)
2014--1260.8; 2013--1242.6)
Retained earnings 75,349 70,682
Accumulated other comprehensive (9,333) (2,054)
income/(loss)
Other (761) (996)
Shareholders' equity attributable to $64,035 $68,001
Procter & Gamble shareholders
a. Compute the number of common shares outstanding at the end of each fiscal year. Estimate the average number of shares outstanding during 2014. Round to one decimal place.
2014 million
2013 million
2014 Average million
b. Calculate the average cost per share of the shares held as treasury stock at the end of each fiscal year. Round to two decimal places.
2014
2013
c. In 2014, preferred shareholders elected to convert 40 million shares of preferred stock into common stock. Rather than issue new shares, the company granted 40 million shares held in treasury stock to the preferred shareholders. Prepare a journal entry to illustrate how this transaction would have been recorded. (Hint: use the cost per share for 2013 determined in b.) Enter answers in millions. Round to the nearest million.
Description Debit Credit
Preferred stockTreasury stockAdditional paid-in capital
Additional paid-in capital
Preferred stockTreasury stockAdditional paid-in capital
d. Calculate P&G's return on common equity (ROCE) for fiscal 2014. Round to one decimal place.
2014
Answer:
See below
Explanation:
a.
2014 $2,747.2 Million
2013 $2,765.4 Million
2014 Average $2,756.3 Million
Working
2014 4,008.0 - 1,260.8 = $2,747.2
2013 4,008.0 - 1,242.6 = $2,765.4
b.
2014 $54.14
2013 $55.21
c.
Account title
Preferred stock A/c Dr. $40.0
Additional paid in capital A/c Dr. $2,128.4
To Treasury stock A/c Cr. $2,168.4
d.
Net earnings attributable to P and G shareholders
$10,956
Shareholder's equity attributable to P and G shareholders $64,035
ROCE
($10,956 / $64,035) × 100
17.1%
A new investment project currently under consideration has a negative net present value of $85,000. The project has a life of 10 years and the minimum required rate of return is 8%. The present value factor for an annuity at 8% for 10 periods is 6.71. What is the amount of annual additional cash flow that is required to make this investment attractive
Answer:
$12,668
Explanation:
Calculation to determine the amount of annual additional cash flow that is required to make this investment attractive
Using this formula
Annual additional cash flow required=Negative net present value /Present value factor for an annuity at 8% for 10 periods
Let plug in the formula
Annual additional cash flow required= $85,000/6.71
Annual additional cash flow required= $12,668
Therefore the amount of annual additional cash flow that is required to make this investment attractive is $12,668
Chino Company reported net income of $23,000 for the current year. During the year, Inventory decreased by $7,500, Accounts Payable decreased by $8,250, Depreciation Expense was $10,500, and Accounts Receivable increased by $7,000. If the indirect method is used, what is the net cash provided by operating activities?
A). $25,750.
B). $56,250.
C). $42,250.
D). $11,000.
Answer: A). $25,750.
Explanation:
Cash from operating activities refers to cash from the business operations of the company.
Formula is:
= Net Income + Depreciation + Decrease in inventory - Accounts payable decrease - Accounts receivable increase
= 23,000 + 10,500 + 7,500 - 8,250 - 7,000
= $25,750
Explanation:
A). $25,750.
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The following information pertains to Flaxman Manufacturing Company for April. Assume actual overhead equaled applied overhead. April 1 Inventory balances Raw materials $ 123,700 Work in process 119,900 Finished goods 77,800 April 30 Inventory balances Raw materials $ 85,500 Work in process 145,200 Finished goods 81,700 During April Costs of raw materials purchased $ 118,500 Costs of direct labor 100,100 Costs of manufacturing overhead 61,700 Sales revenues 353,000 Required Prepare a schedule of cost of goods manufactured and sold. Calculate the amount of gross margin on the income statement.
Answer:
Cost of goods manufactured $293,200
Gross margin $63,700
Explanation:
Flaxman manufacturing company
Income statement for April
Sales revenue $353,000
March 1, Inventory balance raw materials
$123,700
Add: raw materials purchased
$118,500
Less April 31, Inventory balance raw materials
$85,500
Raw materials used $156,700
Cost of direct labor
$100,100
Cost of manufacturing overhead
$61,700
Total manufacturing costs $318,500
Add work in process
$119,900
Cost of goods available for manufacturing
$438,400
Less ending work in process
$145,200
Cost of goods manufactured
$293,200
Add finished goods at the beginning
$77,800
Cost of goods available for sale
$371,000
Less finished goods at ending
$81,700
Cost of goods sold
$289,300
Gross margin
$63,700
We arrived at the gross margin by deducting cost of goods sold from sales revenue
supply a reason for a decline in the balance of the current account
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