Answer:
Explanation:
The corrected sheet is given below
WILLIS TRANSPORTATION SERVICE
Balance sheet
Feb-28
Assets
Cash 74000
Accounts Receivable 72000
Supplies 14000
Land 70000
Buildings 90000
Automobiles 175000
Total 495000
Liabilities & Owners' Equity
Liabilities:
Notes payable 281000
Accounts Payable 58000
Total Liabilities 339000
Owners Equity:
Capital Stock 94000
Retained earnings 62000
Total 495000
Why do globalization and increasing interdependence pose risks to the global
economy?
O A. Global production cannot be as efficient as national production.
B. Disruptions in one place have effects everywhere.
C. There is no consistent set of international regulations.
D. Worldwide competition leads to market concentration.
SUBMIT
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Answer:
B.Disruptions in one place have effects everywhere is the correct answer.
Explanation:
Globalization and increasing interdependence have increased competition among the local and international business and because of advancement in globalization, the countries are dependent on each other to get resources that created an interdependence.
As the countries to run their business are interdependent on the countries and when there is any disruption in the one place it will have its impact everywhere as they are dependent on each other for the resources due this global economy gets affected.
Globalization and increasing interdependence has also unfavorable effect on the local economies.
Nate is investing in a partnership with David. Nate contributes as part of his initial investment, Accounts Receivable of $60,000; an Allowance for Doubtful Accounts of $9,000; and $6,000 cash. The entry that the partnership makes to record Nate's initial contribution includes a______ a. debit to Allowance for Doubtful Accounts for $9,000 b. credit to Nate, Capital for $57,000 c. debit to Accounts Receivable for $51,000 d. credit to Nate, Capital for $66,000.
Answer:
b. credit to Nate, Capital for $57,000
Explanation:
Nate is investing in the business and All his investment will be recorded by the partners as follow
Dr. Receivable $60,000
Dr. Cash $6,000
Cr. Nate Capital Account $57,000
Cr. Allowance for Doubtful Accounts $9,000
All the receivables are become the receivables of the business.
Cash is also added to the business cash.
Allowance for Doubtful Accounts are also recorded against the receivable added.
Net effect of all the above account will be recorded as Capital investment
Answer:
CREDIT to Nate capital for $57000 ( B )
Explanation:
NATE contributions
accounts receivables = $60000
allowance for doubtful accounts = $9000 ( FOR DEBTORS )
cash = $6000
therefore the entry the partnership makes to record Nate's initial contribution includes = ACCOUNTS RECEIVABLE + CASH - allowance for doubtful accounts
= 60000 + 6000 - 9000 = $57000
Square Block Company is comparing two different capital structures: An all-equity plan (Plan I) and a levered plan (Plan II). Under Plan I, the company would have 350,000 shares of stock outstanding. Under Plan II, there would be 225,000 shares of stock outstanding and $5 million in debt outstanding. The interest rate on the debt is 10 percent, and there are no taxes. a. If EBIT is $1,000,000, which plan will result in the higher EPS? b. If EBIT is $1,500,000, which plan will result in the higher EPS? c. What is the break-even EBIT?
Answer:
a. If EBIT is $1,000,000 Plan 1 will give higher EPS
b. If EBIT is $1,500,000 Plan 2 will give higher EPS
c. The break-even EBIT would be $ 1,400,000
Explanation:
a) In Plan 1
According to given data EBIT = $1,000,000
Since there is no debt, so there is no interest. Also there are no taxes
So , earnings avaliable to shareholders = $ 1,000,000
shares of stock outstanding = 350,000
EPS = 1,000,000 / 350,000 = 2.857
Plan 2
EBIT = $1,000,000
Debt = 5000000
Interest = 10% * 5000000 = $ 500000
So , EBIT -interest = $ 500000
Earnings avaliable to shareholders = $ 500000
shares of stock outstanding = 225000
EPS = 500000/ 225000= 2.222
So Plan 1 will give higher EPS
b) Plan 1
EBIT = $1,500,000
Since there is no debt, so there is no interest. Also there are no taxes
So , earnings avaliable to shareholders = $ 1,500,000
shares of stock outstanding = 350,000
EPS = 1,500,000 / 350,000 = 4.286
Plan 2
EBIT = $1,500,000
Debt = 5000000
Interest = 10% * 5000000 = $ 500000
So , EBIT -interest = $ 1000000
Earnings avaliable to shareholders = $ 1000000
shares of stock outstanding = 225000
EPS = 1000000/ 225000= 4.444
So Plan 2 will give higher EPS
c)
Let the breakeven EBIT be 'x'
So,
In breakeven EBIT both EPS for plan 1 and 2 will be same
So,
x / 350000 = ( x - 500000) / 225000
Solving for x , x= 1400000
Breakeven EBIT = $ 1,400,000
Colgate-Palmolive Company has just paid an annual dividend of $ 1.09. Analysts are predicting dividends to grow by $ 0.19 per year over the next five years. After then, Colgate's earnings are expected to grow 5.3 % per year, and its dividend payout rate will remain constant. If Colgate's equity cost of capital is 7.5 % per year, what price does the dividend-discount model predict Colgate stock should sell for today?
Answer:
$74.62
Explanation:
Div₀ = $1.09
expected growth $0.19 per year
Div₁ = $1.28
Div₂ = $1.47
Div₃ = $1.66
Div₄ = $1.85
Div₅ = $2.04
then constant growth rte of 5.3%
equity cost = 7.5%
first we need to determine the stock price in year 5 using the Gordon growth model:
stock price = [dividend x (1+g)] / (Re - g) = ($2.04 x 1.053) / (7.5% - 5.3%) = $97.64
now we can discount all the future cash flows:
stock price = $1.28/1.075 + $1.47/1.075² + $1.66/1.075³ + $1.85/1.075⁴ + $2.04/1.075⁵ + $97.64/1.075⁵ = $1.19 + $1.27 + $1.34 + $1.39 + $1.42 + $68.01 = $74.62
An ordinary annuity selling at $4,947.11 today promises to make equal payments at the end of each year for the next eight years (N). If the annuity’s appropriate interest rate (IN) remains at 6.50% during this time, the annual annuity payment (PMT) will be ________. You just won the lottery. Congratulations! The jackpot is $35,000,000, paid in eight equal annual payments. The first payment on the lottery jackpot will be made today. In present value terms, you really won ________ assuming annual interest rate of 6.50%.
Answer:
$812.49 and $28,369,687.5
Explanation:
Let us assume the annual payments be X
Sale of ordinary annuity = X × PVAF factor
$4,947.11 = X × PVAF(6.5%, 8 years)
$4,947.11 = 6.0888 × X
X = $812.49
And,
The Present value is
Present value = Annual payments + Annual payments × PVAF factor
= $4,375,000 + $4,375,000 × PVAF(6.5%, 7 years)
= $4,375,000 + $4,375,000 × 5.4845
= $28,369,687.5
The $4,375,000 is come from
= $35,000,000 ÷ 8 years
= $4,375,000
Refer to the PVAF factor table
We simply applied the above formulas
A job cost sheet of Sandoval Company is given below.
Job Cost Sheet
JOB NO. 469 Quantity 2,500
ITEM White Lion Cages Date Requested 7/2
FOR Todd Company Date Completed 7/31
Date Direct Materials Direct Labor Manufacturing Overhead
7/10 800
12 900
15 400 500
22 300 375
24 1,600
27 1,575
31 600 750
Cost of completed job:
Direct materials
Direct labor
Manufacturing overhead
Total cost
Unit cost
Required:
1. What are the source documents for direct materials, direct labor, and manufacturing overhead costs assigned to this job?
2. What is the predetermined manufacturing overhead rate? (Round answer to 0 decimal places)
3. What are the total cost and the unit cost of the completed job? (Round unit cost to 2 decimal places)
4. Prepare the entry to record the completion of the job.
Answer and Explanation:
As per the data given in the question, the calculation and journal entry is given below:
1)
Source documents for direct material is Material requisition slip, For direct labor is time tickets and for manufacturing overhead cost is predetermined overhead rate.
2)
Predetermined manufacturing overhead rate = 500 ÷ 400
= 1.25
= 125%
Hence, Predetermined overhead rate is 125% of labor cost.
3)
Total cost :
Direct material $4875 ($800 + $900 + $1600 + $1575)
Direct labor $1,300 ($400 + $300 + $600)
Manufacturing overhead $1,625 ($500 + $375 + $750)
Total cost $7,800 ($4875 + $1300 + $1625)
Now
Unit cost = Total cost ÷ Quantity
=$7,800 ÷ 2,500
= $3.12
4) The journal entry is
Finished goods inventory A/c Dr. $7,800
To Work in process inventory Cr. $7,800
(Being the completion of the job is recorded)
1. The source documents for each of the following is as follows:
direct material: the material requisition slip.direct labor: time tickets.manufacturing overhead costs: the predetermined overhead rate.2. The predetermined manufacturing overhead rate is 125% of the direct labor cost.
Computation:
[tex]\text{Predetermined Overhead rate}=\dfrac{\text{Manufacturing overhead cost}}{\text{Direct labor cost}}\times100\\\\=\dfrac{\$500}{\$400}\times100\\\\=125\%\;\text{of direct labor cost}[/tex]
3. The total cost of the completed job is $7,800, while the unit cost is $3.12.
Computation:
The total cost of the completed job is shown in the image attached below.
The unit cost is computed as follows:
[tex]\text{Unit Cost}=\dfrac{\text{Total Cost}}{\text{Total Quantity}}\\\\=\dfrac{\$7,800}{2,500}\\\\=\$3.12[/tex]
4. The journal entry to record the completion of the job is attached in the image below:
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Use the following to answer question 80: Gross Corporation adopted the dollar-value LIFO method of inventory valuation on December 31, 2011. Its inventory at that date was $440,000 and the relevant price index was 100. Information regarding inventory for subsequent years is as follows: Inventory at Current Current Prices Price Index December 31, 2012 $513,600 107 December 31, 2013 580,000 125 December 31, 2014 650,000 130 80. What is the cost of the ending inventory at December 31, 2013 under dollar value LIFO
Answer:
$465680
Explanation:
For calculating the ending inventory under the dollar value LIFO method we will follow the 2 steps given as under:
Step1:
Y = Current Price at year end / Price Index at that time
Step2:
Ending Inventory = Opening Inventory value + (Y - Opening Inventory Value) * Index Value
For the Year 2012
Step 1:
Y = 513,600 / 1.07 = $480,000
Step 2:
Ending Inventory = $440,000 + ($480,000 - 440,000) * 1.07 = $482,800
Similarly for the year 2013
Step 1:
Y = 580000 / 1.25 = $464,000
Step 2:
Ending Inventory = $440,000 + ($464,000 - $440,000) * 1.07 = $465,680
The answer is $465680.
Regulatory focus theory suggests that consumers will react differently depending on which broad set of motives is more salient. Name and describe the two prominent sets of motives and describe how consumers will react when each set of motives is more noticeable. Use a specific product or service to explain your answer.
Two prominent sets of motives under regulatory focus theory are termed Promotion and prevention.
What is regulatory focus theory?According to the regulatory focus hypothesis, people can work toward objectives with either a promotion or a preventive emphasis. People who aim for advancement interpret pleasure as the accomplishment of their aims, ambitions, and aspirations, and interpret suffering as their absence.
Motives assume that emotional trade-offs between both the coexisting motivational systems on promotion and prevention will always happen. Promotion-oriented people are opportunistic and look for real experiences as motivation to develop action-oriented objectives, which are necessary to getting outcomes.
People who have a prevention orientation are extremely optimistic and see keeping things as they are and preventing bad things from happening as their defining and overriding motives.
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Call Systems Company, a telephone service and supply company, has just completed its fourth year of operations. The direct write-off method of recording bad debt expense has been used during the entire period. Because of substantial increases in sales volume and the amount of uncollectible accounts, the company is considering changing to the allowance method. Information is requested as to the effect that an annual provision of 1% of sales would have had on the amount of bad debt expense reported for each of the past four years. It is also considered desirable to know what the balance of Allowance for Doubtful Accounts would have been at the end of each year. The following data have been obtained from the accounts:
Year Sales Uncollectible Accounts Written Off receivable written
1st $ 900,000 $4,500 $4,500
2nd 1,250,000 9,600 3,000 $6,600
3rd 1,500,000 12,800 1,000 3,700 $8,100
4th 2,200,000 16,550 1,500 4,300 $10,750
Required:
1. Assemble the desired data to prepare a schedule of bad debt expense. Enter all amounts as positive numbers.
Answer:
Year Sales Written Off Accounts
Year of Origin
Uncollectible 1 2 3
1st $ 900,000 $4,500 $4,500
2nd 1,250,000 9,600 3,000 $6,600
3rd 1,500,000 12,800 1,000 3,700 $8,100
4th 2,200,000 16,550 1,500 4,300 $10,750
Year Bad Debt Expense
Expense Actually Expense Increase Balance of Allowance
Reported Estimated (Decrease) Account Year End
1) $4500 $ 9000 $4500 $ 4500
2) $ 9600 $12500 1900 $ 6400
3) $12800 15000 2200 $ 8600
4) 16550 22000 5450 14,050
Explanation:
The actual write off accounts originating in the years were
1) ( $ 4500+ $ 3000+ $ 1000+ $ 1500)= $ 9500
2) ( $ 6600+ 3700+ 4300) = $ 14600
3) ($ 8100+ $ 10,750)= $ 18,850.
Only the first year written off accounts are close to expense if it would have been calculated to 1% of sales ( 1% of $ 900,000) = $ 9000
Recording Journal Entries
Nathanson Corporation was organized on May 1. The following events occurred during the first month.
A. Received $68,000 cash from the five investors who organized Nathanson Corporation. Each investor received 101 shares of $10 par value common stock.
B. Ordered store fixtures costing $12,000.
C. Borrowed $20,000 cash and signed a note due in two years.
D. Purchased $17,000 of equipment, paying $1,900 in cash and signing a six-month note for the balance.
E. Lent $1,400 to an employee who signed a note to repay the loan in three months.
F. Received and paid for the store fixtures ordered in (b).
Prepare journal entries for each transaction.
Answer:
A.
Cash $68,000 (debit)
Common Stock $68,000 (credit)
B.
Store fixtures $12,000 (debit)
Payable $12,000 (credit)
C.
Cash $20,000 (debit)
Note Payable $20,000 (debit)
D.
Equipment $17,000 (debit)
Cash $1,900 (credit)
Note Payable $15,100 (credit)
E.
Note Receivable $1,400 (debit)
Cash $1,400 (credit)
F.
Payable $12,000 (debit)
Cash $12,000 (credit)
Explanation:
A.
Recognize Cash and Recognize Equity - Common Stock
B.
Recognize Store fixtures and recognize a liability - Payable
C.
Recognize Cash - Asset and a Liability - Note Payable
D.
Recognize Equipment - Asset , Recognize Liability - Note Payable and de-recognize the Asset - Cash
E.
De-recognize Cash and Recognize the Asset - Note Receivable
F.
De-recognize the Liability - Payable and de-recognize the Asset Cash
Which of the following statements is most correct? a. Because taxes on long-term capital gains are not paid until the gain is realized, investors must pay the top individual tax rate on that gain. b. Retained earnings, as reported on the balance sheet, represents the amount of cash a company has available to pay out as dividends to shareholders. c. 70% of the dividends received by corporations is excluded from taxable income. d. 70% of the interest received by corporations is excluded from taxable income. e. The corporate tax system favors equity financing, as dividends paid are deductible from corporate taxes.
Answer:
Option C
Explanation:
In simple words, the dividends that are received by the corporations are considered to be tax deductible to avoid the common issue of double taxation of corporate incomes.
Such investments are considered to be return from investments and some jurisdictions even allow majority share holding in the investing asset also. Through default 70 per cent of distributions earned from companies hold 20 per cent or fewer are exempt. This will otherwise be better.
Dapper Corporation had only one job in process on May 1. The job had been charged with $1,010 of direct materials, $3,630 of direct labor, and $5,510 of manufacturing overhead cost. The company assigns overhead cost to jobs using the predetermined overhead rate of $15.70 per direct labor-hour. During May, the following activity was recorded:Raw materials (all direct materials): Beginning balance $9,700Purchased during the month $25,000Used in production $31,400Labor: Direct labor-hours worked during the month 2,160Direct labor cost incurred $29,808Actual manufacturing overhead costs incurred $31,800Inventories: Raw materials, May 30 ?Work in process, May 30 $20,100Work in process inventory on May 30 contains $3,450 of direct labor cost. Raw materials consist solely of items that are classified as direct materials.
Required:
1. The balance in the raw materials inventory account on May 30 was ___________.a) $3,180b) $3,820c) $3,300d) $3,420
Answer:
ending inventory= $3,300
Explanation:
Giving the following information:
Raw materials (all direct materials):
Beginning balance $9,700
Purchased during the month $25,000
Used in production $31,400
To calculate the ending balance for Direct materials, we need to use the following formula:
Direct material used= beginning inventory + purchases - ending inventory
31,400= 9,700 + 25,000 - ending inventory
ending inventory= 3,300
The following information is available for Larkspur Corporation for the year ended December 31, 2022.
Beginning cash balance $40,000
Accounts payable decrease 3,200
Depreciation expense 84,000
Accounts receivable increase 9,400
Inventory increase 12,300
Net income 257,000
Cash received for sale of land at book value 40,000
Sales revenue 745,000
Cash dividends paid 11,900
Income tax payable increase 4,000
Cash used to purchase building 140,500
Cash used to purchase treasury stock 30,100
Cash received from issuing bonds 269,000
Prepare a statement of cash flows using the indirect method.
Answer:
The statement of cash flows using the indirect method would be the following:
Cash flow statement for year ended December 31, 2022:
Description Amount Amount
Operating activities:
Net income $257,000
Adjustments to reconcile net income to net cash from operating activities
Add: Depreciation expense $84,000
Less: Decrease in accounts payable ($3,200)
Less: Increase in accounts receivable ($9,400)
Less: Increase in inventory ($12,300)
Add: Income tax payable increase $4,000
Net cash flows from operating activities $320,100
Investing activities:
Buildings purchased ($140,500)
Cash received from sale of land $40,000
Net cash flows from investing activities ($100,500)
Financing activities:
Dividends paid ($11,900)
Treasury stock purchased ($30,100)
Proceeds from bond issue $269,000
Net cash flows from financing activities $227,000
Net change in cash $446,600
Beginning cash balance $40,000
Ending cash balance $486,600
Explanation:
The statement of cash flows using the indirect method would be the following:
Cash flow statement for year ended December 31, 2022:
Description Amount Amount
Operating activities:
Net income $257,000
Adjustments to reconcile net income to net cash from operating activities
Add: Depreciation expense $84,000
Less: Decrease in accounts payable ($3,200)
Less: Increase in accounts receivable ($9,400)
Less: Increase in inventory ($12,300)
Add: Income tax payable increase $4,000
Net cash flows from operating activities $320,100
Investing activities:
Buildings purchased ($140,500)
Cash received from sale of land $40,000
Net cash flows from investing activities ($100,500)
Financing activities:
Dividends paid ($11,900)
Treasury stock purchased ($30,100)
Proceeds from bond issue $269,000
Net cash flows from financing activities $227,000
Net change in cash $446,600
Beginning cash balance $40,000
Ending cash balance $486,600
Thomson Co. produces and distributes semiconductors for use by computer manufacturers. Thomson issued $800,000 of 10-year, 6% bonds on May 1 of the current year at face value, with interest payable on May 1 and November 1. The fiscal year of the company is the calendar year.
May 1. Issued the bonds for cash at their face amount.
Nov. 1. Paid the interest on the bonds.
Dec. 31. Recorded accrued interest for two months.
Journalize the entries to record the above selected transactions for the current year. If an amount box does not require an entry, leave it blank.
May 1
Nov. 1
Dec. 31
Answer:
May 1
Dr Cash 800,000
Cr Bonds payable 870,000
Nov 1
Dr Interest expense 24,000
Cr Cash 24,000
Dec 31
Dr Interest expense 8,000
Cr Interest payable 8,000
Explanation:
Thomson Co Journal entries
May 1
Dr Cash 800,000
Cr Bonds payable 870,000
Nov 1
Dr Interest expense 24,000
Cr Cash 24,000
(800,000*6%*6/12)
Dec 31
Dr Interest expense 8,000
Cr Interest payable 8,000
(800,000*6%*2/12)
Joyful Gas Company an independent oil producer in Dallas, Texas. In March, company geologist discovered a pool of oil that tripled the company’s proven reserves. Prior to disclosing the new oil to the public, Joy Gas Company quietly bought most of its stock as treasury stock. After the discovery was announced, the company’s stock price increased from $5 to $28.
Please discuss and answer at least two the following questions:________.
1. What accounting principle is involved?
2. Who are the stakeholder’s?
Answer: 1. Full Disclosure
2. Please refer to Explanation
Explanation:
1. The Full Disclosure Principle in Accounting was enacted to reduce the Information Assymetry between the Management of a company and it's shareholders. Under this Principle, the company should endeavour to disclose any transaction or event that could materially affect the company's financial position by stating it in their financial statements as either an entry or a footnote. Joyful Gas Company should state the discovery of the oil as well as their efforts at repurchasing Treasury stock.
2. The Stakeholders in a company refer to any and all people or entities who have an interest in the company. This includes the Shareholders, the Government, creditors, employees, suppliers, the general public etc.
There are some government programs that pay farmers not to plant wheat on part of their land.
This would help farmers:
A) by increasing total revenue but it hurts consumers.
B) by increasing prices for wheat by increasing total revenue and it also helps consumers by lowering the price of wheat.
C) since the government payment will reduce the costs of production and increase the supply of wheat.
D) since the government payment will increase income to farmers and it helps consumers too by lowering the price of wheat.
Answer:
Option D
Explanation:
In simple words, the payment by government will work as a subsidy for the lost profits of the farmers and their income will be ineffective. Also, by not using that land the farmers can grow any other crop which can provide them higher income as compared to crops.
Such step will result in higher total revenue as wheat would not get wasted due to extra production, thus consumers will also not get hurt.
Answer:
Answer is A
Explanation:
I vividly remember taking this in college last year for econ. I even pulled out my old paper work for the quiz (I snuck a copy home). It is A, don't listen to this "expert answer" person.
d) Following is forecast for economic situation and Rachel’s portfolio returns next year, calculate the
expected return, variance and standard deviation of the portfolio. (4 marks)
State of economy Probability Rate of returns
Mild Recession 0.35 - 5%
Growth 0.45 15%
Strong Growth 0.20 30%
Answer:
Expected return = 15.25%
Variance = 80.31
Standard deviation = 8.961
Explanation:
Expected value of return (Er) =
(0.35 × 5%) + (0.45× 15%) + (0.20 × 30%)= 15.25 %
Variance and standard deviation
Outcome Rate Deviation Variance
r- Er (r-Er)^2.P
Mild 5 -10.25 36.771875
Growth 15 -0.25 0.028125
Strong 30 14.75 43.5125
Total 80.3125
Variance = 80.3125
Standard deviation = √variance = √80.3125
= 8.96
Expected return = 15.25%
Variance = 80.31
Standard deviation = 8.961
Sunland Sports sells volleyball kits that it purchases from a sports equipment distributor. The following static budget based on sales of 1,940 kits was prepared for the year. Fixed operating expenses account for 78% of total operating expenses at this level of sales.
Sales $ 97,000
Cost of goods sold (all variable) 58,200
Gross margin 38,800
Operating expenses 33,950
Operating income $ 4,850
Assume that during the year Sunland Sports actually sold 2,037 volleyball kits during the year at a price of $47 per kit.
Required:
1. Calculate the sales price variance.
Answer:
$6,111 unfavorable variance
Explanation:
The budgeted sales price can be determined by dividing budgeted sales of $97,000 by the budgeted sales volume of 1,940 kits i.e $50 ($97,000/1940)
However,2037 volleyball kits were sold for $47 each instead of the planned $50 per kit.
sales price variance=(actual sales volume*actual sales price)*(budgeted sales price*actual sales volume)
actual sales volume is 2037
actual sales price is $47
budgeted sales price is $50
sales price variance=($47*2037)-($50*2037)=$-6111
Trevor Smith contributed equipment, inventory, and $48,000 cash to a partnership. The equipment had a book value of $27,000 and a market value of $30,000. The inventory had a book value of $70,000, but only had a market value of $30,000, due to obsolescence. The partnership also assumed a $15,200 note payable owed by Smith that was used originally to purchase the equipment. Provide the journal entry for Smith's contribution to the partnership. If an amount box does not require an entry, leave it blank.
Answer:
Dr Cash.48000
Dr Inventory 30,000
Dr Equipment 30,000
Cr Notes Payable 15,200
Cr Trevor Smith, Capital 92,800
Explanation:
Trevor Smith Journal entry
Dr Cash 48000
Dr Inventory 30,000
Dr Equipment 30,000
Cr Notes Payable 15,200
Cr Trevor Smith, Capital 92,800
(108,000-15,200)
Compute the investment account (market value differs from book value) Assume that the fair values of the investee's net assets approximated the recorded book values of the investee's net assets, except the fair value of receivables and inventories is $30,000 higher than book value, the fair value of land is $5,000 lower than book value, the fair value of property and equipment is $20,000 higher than book value and the fair value of liabilities is $7,000 lower than book value. In addition, the transaction resulted in goodwill in the amount of $25,000. What is the balance in the preconsolidation "investment in investee" account on the investor company's books on January 1, 2013, immediately after the acquisition of the investee company voting common stock? Not enough information provided $247,000 $170,000 $25,000
Answer:
Explanation:
The picture attached is the complete question whereas the microsoft file attached is the solution to the problem. I needed to have a table so that is why i made use of microsoft in other to understand the explanation well. Thank you
The following excerpt is from "Throwing the Book at Apple" (Wall Street Journal, Review and Outlook, June 12, 2013): At the time, prior to the existence of the tablet device market that Jobs created with the iPad, Apple did not sell eminus−books. Amazon sold nine of every 10. Justice claims Jobs then forced Amazon and every other eminus−book distributor to adopt a new eminus−book pricing model that harmed consumers. Yet the average retail price for "trade" eminus−books has since dropped to $7.34 from $7.97, and Amazon's Kindle is still the industry leader with Apple trailing in third. Over the same period readers bought 447% more eminus−books, and they can choose from dozens of tablets for titles and other media content.
What market structure best describes the e - book market?
A. A monopoly
B. A perfectly competitive market
C. A competitive market with a few dominant firms producing identical goods
D. A competitive market with a few dominant firms producing substitutes
Answer:
D. A competitive market with a few dominant firms producing substitutes
Explanation:
E book market has few dominant firms - Amazon, Apple.
Their e - book selling digital services have uniquely different features from each other. They serve similar nature of good ie e books contests. So, the digital services rendered by firms are substitute of each other.
Providing substitute goods, firms compete with each other.
As per technical economic terminologies : this market structure is analogous to Oligopoly market structure.
Top management of Drexel-Hall is considering closing Store 3. The three stores are close enough together that management estimates closing Store 3 would cause sales at Store 1 to increase by $60,000, and sales at Store 2 to increase by $120,000. Closing Store 3 is not expected to cause any change in common fixed costs. Compute the increase or decrease that closing Store 3 should cause in: a. Total monthly sales for Drexel-Hall stores. b. The monthly responsibility margin of Stores 1 and 2. c. The company’s monthly income from operations. Williams, Jan. Financial & Managerial Accounting (p. 980). McGraw-Hill Higher Education. Kindle Edition.
Answer:
Compute the increase or decrease that closing Store 3 should cause in: a. Total monthly sales for Drexel-Hall stores.
total monthly sales should decrease from $1,800,000 to $1,380,000 = a $420,000 reductionb. The monthly responsibility margin of Stores 1 and 2.
store 1 responsibility margin increased from 10% to 12.55% (2.55% increase)store 2 responsibility margin increased from 9% to 13.69% (4.69% increase)c. The company’s monthly income from operations.
increased from $72,000 to $140,200 ($70,200 increase)Explanation:
Store Store Total
1 2
Sales $660,000 $720,000 $1,380,000
Variable costs $409,200 $453,600 $862,800
Contribution margin $250,800 $266,400 $517,200
Controllable fixed costs $120,000 $102,000 $222,000
Performance margin $130,800 $164,600 $292,200
Committed fixed costs $48,000 $66,000 $114,000
Store responsibility margin $82,800 $98,600 $178,200
Common fixed costs $38,000
Income from operations $140,200
Wages of $8,000 are earned by workers but not paid as of December 31. Depreciation on the company’s equipment for the year is $10,480. The Office Supplies account had a $470 debit balance at the beginning of the year. During the year, $5,063 of office supplies are purchased. A physical count of supplies at December 31 shows $556 of supplies available.
A. The Prepaid Insurance account had a $5,000 balance at the beginning of the year. An analysis of insurance policies shows that $1,600 of unexpired insurance benefits remain at December 31.
B. The company has earned (but not recorded) $650 of interest revenue for the year ended December 31. The interest payment will be received 10 days after the year-end on January 10.
C. The company has a bank loan and has incurred (but not recorded) interest expense of $2,500 for the year ended December 31. The company will pay the interest five days after the year-end on January 5.
Answer:
(1). Wages expense(debit) => 8000.
wages payable (credit) => 8000.
(2). depreciation expense-equipment(debit) => $10,480.
accumulated depreciation-equipment => $10,480.
(3). Supplies expense(debit) => 4,977.
office supplies(credit) => 4977.
(4). Insurance expense(debit) => 3,400
prepaid insurance(credit) => 3,400.
(5000 - 1600).
(5). Interest receivable(debit) => $650
interest revenue(credit) => $650
(6). interest expense(debit) => $2,500
interest payable(credit) => $2,500.
Explanation:
So, our main aim in this question is to be able to prepare prepare an " adjusting entries" required of financial statements for the year ended (date of) December 31.
An adjusting entries can simply be defined as entry that is used in showing the expenses and income of a particular organization or company.
Thus, the entries can be written as:
(1). Wages expense(debit) => 8000.
wages payable (credit) => 8000.
(2). depreciation expense-equipment(debit) => $10,480.
accumulated depreciation-equipment => $10,480.
(3). Supplies expense(debit) => 4,977.
office supplies(credit) => 4977.
(4). Insurance expense(debit) => 3,400
prepaid insurance(credit) => 3,400.
(5000 - 1600).
(5). Interest receivable(debit) => $650
interest revenue(credit) => $650
(6). interest expense(debit) => $2,500
interest payable(credit) => $2,500.
The company's adjusted trial balance as follows includes the following accounts balances: Cash, $15,000; Equipment, $85,000; Accumulated Depreciation, $25,000; Accounts Payable, $10,000; Owner, Capital, $63,500; Owner, Withdrawals, $2,000; Sales, $56,000; Sales Returns and Allowances, $3,000; Sales Discounts, $1,500; Depreciation Expense, $25,000; and Salaries Expense, $23,000. All accounts have normal balances.Prepare the second closing entry by selecting the account names and entering dollar amounts in the debit and credit columns.
Answer:
Dr. Sales, $56,000
Cr. Income Summary account $56,000
Dr. Income Summary account $52,500
Cr. Sales Returns and Allowances, $3,000
Cr. Sales Discounts, $1,500
Cr. Depreciation Expense, $25,000
Cr. Salaries Expense, $23,000.
Dr. Owner, Capital Account $2,000
Cr. Owner, Withdrawals, $2,000
Explanation:
All the incomes and expenses accounts are closed in Income summary accounts.
Owners withdrawals balance is adjusted in the owners capital account.
The accounts of Assets, Equity and Liabilities are not closed because these are permanent accounts.
All the following accounts are permanent account
Cash, $15,000; Equipment, $85,000; Accumulated Depreciation, $25,000; Accounts Payable, $10,000; Owner, Capital, $63,500; ;
Rauch Incorporated leases a piece of equipment to Donahue Corporation on January 1, 2020. The lease agreement called for annual rental payments of $4,892 at the beginning of each year of the 4-year lease. The equipment has an economic useful life of 6 years, a fair value of $25,000, a book value of $20,000, and both parties expect a residual value of $8,250 at the end of the lease term, though this amount is not guaranteed. Rauch set the lease payments with the intent of earning a 5% return, and Donahue is aware of this rate. There is no bargain purchase option, ownership of the lease does not transfer at the end of the lease term, and the asset is not of a specialized nature.Prepare the lease amortization schedule(s) for Donahue for all 4 years of the lease. (Round answers to 0 decimal places, e.g. 5,275.)
Answer:
Explanation:
DONAHUE CORPORATION Lease Amortization Schedule Annuity-Due Basis Reduction of Interest on Liability Lease Liability Annual Payment Lease Liability 4892 4892 4 892 1/1/22 1 1/1/237 4892
Lease Expense Schedule Interest on Amortization of Lease Liability ROU Asset Lease Expense (Straight-Line) Date Carrying Value of ROU Asset 1/1/20 4892 290 4892 12/31/20 12/31/21 12/31/22 12/31/23 4892 4892
Date Account Titles and Explanation Debit Credit 1/1/20 | Right-of-Use Asset 182141 T 18214 Lease Liability (To record the lease) 1/1/20 Lease Liability 4,892 T 4,892 Cash (To record lease payment) 12/31/20 Lease Expense 4,892 Lease Liability Right-of-Use Asset
[1/1/21 || Lease Liability 4.8921T Cash 4,892 12/31/21 - || Lease Expense 4,8921T 1 PPPTT Lease Liability 22649 Right-of-Use Asset 22649
Date Account Titles and Explanation Debit Credit 1/1/20 Right-of-Use Asset 18214 Lease Liability 22649 Cash 22649 (To record the lease) 11/1/20 1/1/20 | Lease Liability Lease Liability 4,892 4,892 Cash (To record lease payment) [12/31/20 Lease Expense 4892 Lease Liability 22649 T Right-of-Use Asset 22649
Consider a medium-sized company that has decided to begin using project management in a wide variety of its operations. As part of their operational shift, they are going to adopt a project management office somewhere within the organization. Make an argument for the type of PMO it should adopt (weather station, control tower, or resource pool). What are some of the key decision criteria that will help it determine which model makes most sense
ANSWER:
The company's PMO should adopt resource pool model, because this model will make the project managers to participate in every aspect of the company's project, as one project manager will be involved in one or more operation. Since the company wants to use project management in a wide varieties of it's operations, and not only to determine it's operational shifts.
EXPLANATION:
Project management office are those central office in an organization, that helps to uphold the organizations standard, practice, culture, and procedures, when executing a project.
If the PMO should adopt weather station model, that means it will only forecast the outcome of any decisions the company makes on the project. And this is not the best approach to the company's need at the moment. The company need to improve on it's performance and not forecasting the outcome of it's operations.
If the PMO should adopt control tower, that means the office will only direct and guild the workers on how best to execute their task in accordance with the company's standard. This model will not allow the project managers to involve in the operations of the company. This will not be a good help to the company because the project managers will only teach and guild the staffs on how best to execute the job, but will not be available to work in hands with them during the job task. These can reduce the efficiency of the project.
Trout farming is a perfectly competitive industry and all trout farms have the same cost curves.
When the market price is $25 a fish, farms maximize profit by producing 200 fish a week. At this output, average total cost is $20 a fish and average variable cost is $15 a fish. Minimum average variable cost is $12 a fish.
Required:
i) If the price falls to $20 a fish, will a trout farm produce 200 fish a week. Explain why or why not?
ii) If the price falls to $12 a fish, what will the trout farmer do?
iii) What are two points on a trout farm's supply curve?
Answer:
(i) The farm can cover its revenue using its total variable cost, therefore the farm will continue producing 200 units
(ii) The farm cannot cover its revenue using its total variable cost, therefore the farm will shut down
(iii) The two relevant points on supply curve will be: (Price = $12 & Quantity = 0) and (Price = $25 & Quantity = 200)
Explanation:
(i)According to given data, When output is 200 but price is $20, this price is equal to ATC, so the farm breaks even. But since this price is higher than AVC of $15, the farm can cover its revenue using its total variable cost, therefore the farm will continue producing 200 units.
(ii) When output is 200 but price is $12, this price is equal to ATC, so the farm makes economic loss. Also, this price is lower than AVC of $15, so the farm cannot cover its revenue using its total variable cost, therefore the farm will shut down.
(iii) The farm's supply curve is the portion of its Marginal cost (MC) curve above the minimum point of AVC. Since price equals MC, the two relevant points on supply curve will be: (Price = $12 & Quantity = 0) and (Price = $25 & Quantity = 200).
Waterway Industries makes and sells umbrellas. The company is in the process of preparing its Selling and Administrative Expense Budget for the last half of the year. The following budget data are available: Variable Cost Per Unit Sold Monthly Fixed Cost Sales commissions $0.60 $ 5500 Shipping 1.20 Advertising 0.30 Executive salaries 42000 Depreciation on office equipment 8300 Other 0.35 30000 Expenses are paid in the month incurred. If the company has budgeted to sell 8000 umbrellas in October, how much is the total budgeted variable selling and administrative expenses for October?
Answer:
$19,600
Explanation:
Waterway Industries
Total budget variable selling and administrative
Sales commissions$0.60
Shipping1.20
Advertising0.30
0thers 0.35
Total 2.25
Hence:
2.45 ×8,000
=$19,600
Therefore the total budgeted variable selling and administrative expenses for October will be 19,600
The Sanding Department of Quik Furniture Company has the following production and manufacturing cost data for March 2020, the first month of operation. Production: 6,240 units finished and transferred out; 3,000 units started that are 100% complete as to materials and 20% complete as to conversion costs. Manufacturing costs: Materials $36,960; labor $21,400; overhead $30,242. Prepare a production cost report. (Round unit costs to 2 decimal places, e.g. 2.25 and other answers to 0 decimal places, e.g. 125.)
Answer:
Cost of goods transferred out $71,061.012
Value of closing inventory = $17,540.98
Explanation:
Cost per equivalent unit = Cost /total equivalent unit
Material
Equivalent unit = (100%×6,240) +( 100%× 3,000) = 9240
Cost per equivalent unit = $36,960/9,240 units= 4
Labour
Equivalent unit = (100%×6,240) + ( 25%× 3,000)= 6990 units
Cost per equivalent unit = ( 21,400 + 30,242)/6990 = 7.387982833
Cost of goods transferred out= (6,240× 4) + (7.38×6,240)=71,061.012
Value of closing inventory = (3,000× 4) + (7.38× 25%*3000)= 17,540.98
Cost of goods transferred out $71,061.012
Value of closing inventory = $17,540.98
On January 1, 2012, Browning Corporation had 75,000 shares of $1 par value common stock issued and outstanding. During the year, the following transactions occurred:
Mar. 1 Issued 60,000 shares of common stock for $675,000
June 1 Declared a cash dividend of $2.00 per share to stockholders of record on June 15
June 30 Paid the $2.00 cash dividend
Dec. 1 Purchased 5,000 shares of common stock for the treasury for $18 per share
Dec. 15 Declared a cash dividend on outstanding shares of $2.50 per share to stockholders of record on December 31
Net income for 2012 amounted to $951,000.
Instructions
Prepare journal entries to record the above transactions.
Answer:
The solution are given as under:
Explanation:
Part 1. The entry would record common stock at part and the above par value would be paid in capital.
Dr Cash $675,000
Cr Common Stock $60,000
Cr Paid In Capital $615,000
Part 2. When dividend is declared, dividend payable must be recognized against the Retained Earnings.
Dividends Payable can be calculated by finding out the total shares on 15th of June, which is:
Total shares = Shares issued + Previously Held shares
= 75,000 + 60,000 = 135,000
Now the total dividend that is payable is:
Dividend Declared = Total Number of Shares * Dividend per share
= 135,000 Shares * $2 per share = $270,000
Dr Retained Earnings $270,000
Cr Dividend Payables $270,000
Part 3. The payment of dividends will decrease the dividend payables with $270,000, so the double entry would be:
Dr Dividend Payables $270,000
Cr Cash Account $270,000
Part 4. The purchasing of the treasury stock would be recorded as under:
Dr Treasury Stock $90,000 ..... $15 per share * 5000 shares
Cr Cash Account $90,000
Part 5. The cash dividend declared would be similarly the way we calculated in the part 3 but here we will also account for the treasury stock as under:
Total shares = Shares issued + Previously Held shares - Treasury Stock
= 75,000 + 60,000 - 5,000 = 130,000
Now the total dividend that is payable is:
Dividend Declared = Total Number of Shares * Dividend per share
= 130,000 Shares * $2.5 per share = $325,000
Dr Retained Earnings $325,000
Cr Dividend Payables $325,000