Fleming Sign Company uses the allowance method in accounting for uncollectible accounts. Past experience indicates that 6% of accounts receivable will eventually be uncollectible. Selected account balances at December 31, 2017, and December 31, 2018, appear below:

12/31/14 12/31/15
Net Credit Sales $400,000 $500,000
Accounts Receivable 60,000 80,000
Allowance for Doubtful Accounts 5,200 ?

Record the following events in 2015.

Aug. 10 Determined that the account of Sue King for $800 is uncollectible.
Sept. 12 Determined that the account of Tom Young for $3,700 is uncollectible.
Oct. 10 Received a check for $500 as payment on account from Sue King, whose account had previously been written off as uncollectible. She indicated the remainder of her account would be paid in November.
Nov. 15 Received a check for $300 from Sue King as payment on her account.

Answers

Answer 1

Answer:

a) Aug. 10

Dr Allowance for Doubtful Accounts $800

Cr Accounts Receivable—Sue King $800

Sept. 12

Dr Allowance for Doubtful Accounts $3,700

Cr Account Receiveble- Tom young $3,700

Oct. 10

Dr Accounts Receivable— Sue King $800

Cr Allowance for Doubtful Accounts $800

Dr Cash $500

Cr Accounts Receivable— Sue King $500

(To record collection on account)

Nov. 15 Cash $300

Cr Accounts Receivable— Sue King $300

(b) Dec. 31

Dr Bad Debt Expense $30,000

Cr Allowance for Doubtful Accounts $30,000

(c) $38,900

Explanation:

a) Preparation of the journal entry

Aug. 10

Dr Allowance for Doubtful Accounts $800

Cr Accounts Receivable—Sue King $800

(To write off Sue King account)

Sept. 12

Dr Allowance for Doubtful Accounts $3,700

Cr Account Receiveble- Tom young $3,700

(To write off Tom Young account)

Oct. 10

Dr Accounts Receivable— Sue King $800

Cr Allowance for Doubtful Accounts $800

(To reinstate Sue King account previously written off)

Dr Cash $500

Cr Accounts Receivable— Sue King $500

(To record collection on account)

Nov. 15 Cash $300

Cr Accounts Receivable— Sue King $300

(To record collection on account)

(b) Preparation of the adjusting journal entry to record the bad debt provision for the year ended December 31, 2015.

Dec. 31

Dr Bad Debt Expense $30,000

($500,000 ×6%)

Cr Allowance for Doubtful Accounts $30,000

(To record estimate of uncollectible accounts)

(c) Calculation to determine the balance of Allowance for Doubtful Accounts at December 31, 2015

Balance of Allowance for Doubtful Accounts at December 31, 2015= ($5,200 – $800 – $3,700 + $800 + $30,000)

Balance of Allowance for Doubtful Accounts at December 31, 2015=$38,900

Therefore the balance of Allowance for Doubtful Accounts at December 31, 2015 is $38,900


Related Questions

Consider a telephone call to London that currently would cost $5. If the real price of telephone calls does not change in the future, how much will it cost you to make a call to London in 50 years if the inflation rate is 5% (roughly its average over the past 30 years)? What if inflation is 10%.

Answers

Answer:

If inflation were 5%, the value of the call in 50 years would be $ 57.33; while if inflation were 10% the value of the call would be $ 586.95.

Explanation:

Given that a telephone call to London that currently would cost $ 5, to determine, if the real price of telephone calls does not change in the future, how much will it cost you to make a call to London in 50 years if the inflation rate is 5% and if inflation is 10%, the following calculations must be made:

5 x 1.05 ^ 50 = X

5 x 11.4674 = X

57.33 = X

5 x 1.1 ^ 50 = X

5 x 117.39 = X

586.95 = X

Therefore, if inflation were 5%, the value of the call in 50 years would be $ 57.33; while if inflation were 10% the value of the call would be $ 586.95.

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

Required:
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

Answers

Solution :

a). Operating the income using traditional costing system

Products        Sales revenue($)           Traditional($)         Operating income($)

                             ( A )                                 ( B )                           ( A - B )

540X                   198,200                         54,440                       143,760

137Y                    158,700                         49,090                        109,610

249S                   83,190                            11,290                          71,900

b). Operating income using the activity-based costing system

Products        Sales revenue($)           Traditional($)       Operating income($)

                             ( A )                                 ( B )                           ( A - B )

540X                   198,200                         45,520                       152,680

137Y                    158,700                          39,290                        119,410

249S                   83,190                            30010                          53,180

what type of occupation do you prefer to do any why​

Answers

Answer:

a hands on occupation

Explanation:

I dont like sitting around

Sage Company is operating at 90% of capacity and is currently purchasing a part used in its manufacturing operations for $13.00 per unit. The unit cost for the business to make the part is $22.00, including fixed costs and $11.00, excluding fixed costs. If 32,354 units of the part are normally purchased during the year but could be manufactured using unused capacity, what would be the amount of differential cost increase or decrease from making the part rather than purchasing it

Answers

Answer:

$64,708 cost decrease

Explanation:

Calculation to determine the amount of differential cost increase or decrease from making the part rather than purchasing it

First step

Purchase cost =$13

Manufacturing cost = $11 (variable)

Profit in manufacturing =$13-$11

Profit in manufacturing=$2

Now let determine the amount of differential cost increase or decrease

Cost decrease by =$2*32,354

Cost ​decrease by $64,708

Therefore the amount of differential cost DECREASE from making the part rather than purchasing it is $64,708

Maxwell Washington's weekly gross earnings for the week ending March 9 were $2,620, and her federal income tax withholding was $550.20. Assuming the social security tax rate is 6% and Medicare tax is 1.5% of all earnings, what is Washington's net pay?

Answers

Answer:

1 million

Explanation:

A company needs 550,000 items per year. It costs the company $330 to prepare a production run of these items and $5 to produce each item. If it also costs the company $0.75 per year for each item stored, find the number of items that should be produced in each run so that total costs of production and storage are minimized. items/run

Answers

Answer:

Company A

The number of items that should be produced in each run to minimize total costs of production and storage is:

= 22,000 units

Explanation:

a) Data and Calculations:

Total annual demand = 550,000 units

Cost per production run = $330

Cost per unit = $5

Storage (holding) cost per item = $0.75

The number of items that should be produced in each run to minimize total costs of production and storage is given by Economic Order Quantity (EOQ) formula

= square root of (2 * 550,000 * $330)/$0.75

= square root of $363,000,000/$0.75

= square root of 484,000,000

= 22,000 units

A ______ strategy aims at securing a competitive advantage by serving buyers in the target market niche at a lower cost and lower price than rivals. Multiple choice question. focused low-cost overall low-cost resource-based cost best-cost

Answers

Answer:

focused low-cost

Explanation:

Competitive advantage can be defined as conditions, factors or circumstances that allow a business firm (organization) to manufacture finished goods or services better and perhaps cheaper than other (rival) firms in the same industry. Thus, it's responsible for putting a business firm in a superior or more favorable position than rival firms.

This ultimately implies that, a competitive advantage has a significant impact on a business because it increases its level of sales, revenue generation and profit margin when compared to rival firms in the same industry.

A focused low-cost strategy is a strategic business model that's typically focused on a narrow or small customer base (segment) while providing low-cost goods and services to the customers. Thus, it is a business strategy that involves lowering the price of goods and services in order to generate more revenue and gain a competitive advantage over competitors or rivals in the same industry.

Hence, a focused low-cost strategy is typically aimed at securing a competitive advantage by means of serving buyers or consumers in the target market niche at a lower cost and lower price than rivals in the same industry.

An individual works downtown and pays $600 per month in rent for an apartment located 10 miles from her office. She has calculated that she spends 30 minutes per day driving each way to the office and it costs her $4 per day in gas and lost productivity. Using the framework of the bid-rent model, how much would she be willing to pay for an apartment downtown, assuming a 20 workday month?
a. $440.
b. $680.
c. $520.
d. $80.

Answers

Answer:

b. $680

Explanation:

Calculation to determine how much would she be willing to pay for an apartment downtown, assuming a 20 workday month

First step to determine the Cost of commuting using this formula

Cost of commuting = Cost of gas and productivity × 20 workday month

Let plug in the formula

Cost of commuting =$4*20

Cost of commuting =$80

Now let determine how much would she be willing to pay for an apartment

Using this formula

Amount willing to pay= Total rent + Cost of commuting

Let plug in the formula

Amount willing to pay= $600 + $80

Amount willing to pay= $680

Therefore how much would she be willing to pay for an apartment downtown, assuming a 20 workday month is $680

Yale Corporation issued to Zap Corporation $48,000, 8% (cash interest payable semiannually on June 30 and December 31) 10-year bonds dated and sold on January 1, 2020. Assume that the company uses the effective interest amortization method. If the bonds were sold to yield 9%, provide journal entries to be made at each of the following dates.a. January 1, 2020, for issuance of bonds. b. June 30, 2020, for the interest payment. • Note: List multiple debits or credits (when applicable) in alphabetical order. • Note: Round your answers to the nearest whole dollar. Cr. Dr. 54,957 X X 0 Date Account Name a. Jan. 1, 2020 Cash Discount on Bonds Payable Bonds Payable b. June 30, 2020 Interest Expense Discount on Bonds Payable Cash 60,000 5,403 x 0 2,457 X 0 X 57 x 2,400 x

Answers

Answer:

Yale Corporation

Journal Entries:

a. January 1, 2020:

Debit Cash $44,878

Debit Premium on bonds $3,122

Credit 8% Bonds Payable $48,000

To record issuance of the bonds.

b. June 30, 2020:

Debit Interest Expense $2,020

Credit Bond Discounts $100

Credit Cash $1,920

To record the first payment of interest.

Explanation:

a) Data and Calculations:

January 1, 2020:

Face value of bonds = $48,000

Price of bonds =           $44,878

Discounts on bonds =    $3,122

Coupon interest rate = 8%

Interest payment = semiannually on June 30 and December 31

Maturity period = 10 years

Effective interest rate = 9%

June 30, 2020:

Interest Expense      $2,020 ($44,878 * 4.5%)

Cash payment             1,920 ($48,000 * 4%)

Discount amortization $100

Value of Bonds =   $44,978 ($44,878 + $100)

December 31, 2020:

Interest Expense      $2,024 ($44,978 * 4.5%)

Cash payment             1,920 ($48,000 * 4%)

Discount amortization $104

Value of Bonds =   $45,082 ($44,978 + $104)

N (# of periods)  20

I/Y (Interest per year)  9

PMT (Periodic Payment)  1920

FV (Future Value)  48000

Results

PV = $44,878.10

Sum of all periodic payments $38,400.00

Total Interest $41,521.90

Patty’s Pies has sells 900 pies in August for $20.00 each. At the end of August Patty advertises her pies in the local Valupak which will mail to 25,000 local houses. Statistics show that approximately .5% (one half of one percent) of Valupak recipients result in a sale. Based upon this information, compute the amount of sales Patty would budget for September.

Answers

Answer: $20,500

Explanation:

The amount of sales that Patty would budget for September will be calculated thus:

The expected increase in sales unit will be calculated as:

= 0.5% × 25,000

= 125

Therefore, the unit of sale in September will then be:

= 900 pies + 125 pies

= 1025 pies

Then, the total amount of sale will be:

= 1,025 × $20

= $20,500

The Polaris Company uses a job-order costing system. The following transactions occurred in October:

a. Raw materials purchased on account, $210,000.
b. Raw materials used in production, $190,000 ($152,000 direct materials and $38,000 indirect materials).
c. Accrued direct labor cost of $50,000 and indirect labor cost of $21,000.
d. Depreciation recorded on factory equipment, $104,000. Other manufacturing overhead costs accrued during October, $131,000.
f. The company applies manufacturing overhead cost to production using a predetermined rate of $5 per machine-hour. A total of 76,100 machine-hours were used in October.
g. Jobs costing $514,000 according to their job cost sheets were completed during October and transferred to Finished Goods.
h. Jobs that had cost $453,000 to complete according to their job cost sheets were shipped to customers during the month. These jobs were sold on account at 36% above cost.

Required:
a. Prepare journal entries to record the information given above.
b. Prepare T-accounts for Manufacturing Overhead and Work in Process. Post the relevant information above to each account. Compute the ending balance in each account, assuming that Work in Proccss has a beginning balance of $42,000.

Answers

Answer:

The Polaris Company

a. Journal Entries

a. Debit Raw materials $210,000

Credit Accounts Payable $210,000

To record the purchase of raw materials on account.

b. Debit Work in Process $152,000

Debit Manufacturing Overhead $38,000

Credit Raw materials $190,000

To record raw materials used in production as direct and indirect.

c. Debit Work in Process $50,000

Debit Manufacturing Overhead $21,000

Credit Payroll $71,000

To record the costs of direct labor and indirect labor.

d. Debit Manufacturing Overhead $104,000

Credit Depreciation on factory equipment, $104,000

To record the depreciation expense.

Debit Manufacturing Overhead $131,000

Credit Other Expense $131,000

To record other manufacturing overhead costs.

f. Debit Work in Process $380,500

Credit Manufacturing Overhead $380,500

To record manufacturing overhead applied at the rate of $5 for 76,100 DLHs.

g. Debit Finished Goods $514,000

Credit Work in Process $514,000

To record the cost of goods manufactured.

h. Debit Cost of Goods Sold $453,000

Credit Finished Goods $453,000

To record the cost of goods sold.

Debit Accounts Receivable $616,080

Credit Sales Revenue $616,080

To record the sale of goods on account at 36% above cost.

b. T-accounts:

Manufacturing Overhead

Account Titles                  Debit       Credit

Raw materials               $38,000

Indirect labor cost           21,000

Factory depreciation    104,000

Other expenses            131,000

Work in Process                          $380,500

Overapplied overhead 86,500

Work in Process

Account Titles                Debit       Credit

Beginning inventory  $42,000

Raw materials             152,000

Direct labor cost          50,000

Overhead                  380,500

Finished Goods                      $514,000

Ending inventory                    $110,500

Explanation:

a) Data and Analysis:

a. Raw materials $210,000 Accounts Payable $210,000

b. Work in Process $152,000 Manufacturing Overhead $38,000 Raw materials $190,000

c. Work in Process $50,000 Manufacturing Overhead $21,000 Payroll $71,000

d. Manufacturing Overhead $104,000 Depreciation on factory equipment, $104,000 Manufacturing Overhead $131,000 Other Expense $131,000

f. Work in Process $380,500 Manufacturing Overhead $380,500

g. Finished Goods $514,000 Work in Process $514,000

h. Cost of Goods Sold $453,000 Finished Goods $453,000

Accounts Receivable $616,080 Sales Revenue $616,080

Sep. 3 Purchased merchandise inventory on account from Shallin Wholesalers, $7,000. Terms 1/15, n/EOM, FOB shipping point.
Sep. 4 Paid freight bill of $55 on September 3 purchase.
Sep. 4 Purchase merchandise inventory for cash of $2,100.
Sep. 6 Returned $1,000 of inventory from September 3 purchase.
Sep. 8 Sold merchandise inventory to Herenda Company, $5,500, on account. Terms 1/15, n/35. Cost of goods, $2,255.
Sep. 9 Purchased merchandise inventory on account from Tripp Wholesalers, $10,000. Terms 1/10, n/30, FOB destination.
Sep. 10 Made payment to Shallin Wholesalers for goods purchased on September 3, less return and discount.
Sep. 12 Received payment from Hilton Company, less discount.
13. After negotiations, I received a $100 allowance from Tristan Wholesalers.
15.Sold merchandise inventory to Jesper Company, $3,500, on the account. Terms n/EOM. Cost of goods, $1,610
22.Made payment, less allowance, to Tristan Wholesalers for goods purchased on September 9
23. Jesper Company returned $800 of the merchandise sold on September 15. Cost of goods, $368
25. Sold merchandise inventory to Smithson for $2,000 on account that cost $780 Terms of 3/10, n/30 was offered, FOB shipping point. As a courtesy to Smithson, $55 of freight was added to the invoice for which cash was paid by Oceanic
29. Received payment from Smithson, less discount.
30. Received payment from Jesper Company, less return.

Required:
Journalize the transaction.

Answers

Answer:

Sep. 3

Dr Merchandise Inventory $7,000

Cr Accounts Payable—Shallin Wholesalers $7,000

Sep. 4

Dr Merchandise Inventory $55

Cr Cash $55

Sep. 4

Dr Merchandise Inventory $2,100

Cr Cash $2,100

Sep. 6

Dr Accounts Payable—Shallin Wholesalers $1,000

Cr Inventory $1,000

Sep. 8

Dr Accounts Receivable— Herenda Company $5,445

Cr Sales Revenue $5,445

Sep. 8

Dr Cost of Goods Sold $2,255

Cr Merchandise Inventory $2,255

Sep. 9

Dr Merchandise Inventory $10,000

Cr Accounts Payable—Tripp Wholesalers $10,000

Sep. 10

Dr Accounts Payable—Shallin Wholesalers $6,000

Cr Merchandise Inventory $60

Cr Cash $5,940

Sep. 12

Dr Cash $5,445

Accounts Receivable—Herenda Company $5,445

Sep. 13

Dr Accounts Payable—Tristan Wholesalers $100

Cr Merchandise Inventory $100

Sep. 15

Dr Accounts Receivable—Jesper Company $3,500

Cr Sales Revenue $3,500

Sep. 15

Dr Cost of Goods Sold $1,610

Cr Merchandise Inventory $1,610

Sep. 22

Dr Accounts Payable—Tristan Wholesalers $9,900

Cr Cash $9,900

Sep. 23

Dr Refunds Payable $800

Cr Accounts Receivable—Jesper Company $800

Sep. 23

Dr Merchandise Inventory $368

Cr Estimated Returns Inventory $368

Sep. 25

Dr Accounts Receivable—Smithson $1,995

Cr Sales Revenue $1,940

Cr Cash $55

Sep. 25

Dr Cost of Goods Sold $780

Cr Merchandise Inventory $780

Sep. 29

Dr Cash $1,995

Cr Accounts Receivable— Smithson $1,995

Sep. 30

Dr Cash $2,100

Cr Accounts Receivable—Jesper Company $2,100

Explanation:

Preparation of the journal entries

Sep. 3

Dr Merchandise Inventory $7,000

Cr Accounts Payable—Shallin Wholesalers $7,000

Sep. 4

Dr Merchandise Inventory $55

Cr Cash $55

Sep. 4

Dr Merchandise Inventory $2,100

Cr Cash $2,100

Sep. 6

Dr Accounts Payable—Shallin Wholesalers $1,000

Cr Inventory $1,000

Sep. 8

Dr Accounts Receivable— Herenda Company $5,445

Cr Sales Revenue $5,445

[$5,500-(1%*$5,500)]

Sep. 8

Dr Cost of Goods Sold $2,255

Cr Merchandise Inventory $2,255

Sep. 9

Dr Merchandise Inventory $10,000

Cr Accounts Payable—Tripp Wholesalers $10,000

Sep. 10

Dr Accounts Payable—Shallin Wholesalers $6,000

($7,000-$1,000)

Cr Merchandise Inventory $60

(1%*$6,000)

Cr Cash $5,940

($6,000-$60)

Sep. 12

Dr Cash $5,445

[$5,500-(1%*$5,500)]

Accounts Receivable—Herenda Company $5,445

Sep. 13

Dr Accounts Payable—Tristan Wholesalers $100

Cr Merchandise Inventory $100

Sep. 15

Dr Accounts Receivable—Jesper Company $3,500

Cr Sales Revenue $3,500

Sep. 15

Dr Cost of Goods Sold $1,610

Cr Merchandise Inventory $1,610

Sep. 22

Dr Accounts Payable—Tristan Wholesalers $9,900

Cr Cash $9,900

($10,000-$100)

Sep. 23

Dr Refunds Payable $800

Cr Accounts Receivable—Jesper Company $800

Sep. 23

Dr Merchandise Inventory $368

Cr Estimated Returns Inventory $368

Sep. 25

Dr Accounts Receivable—Smithson $1,995

($1,940+$55)

Cr Sales Revenue $1,940

[$2,000-(3%*$2,000)]

Cr Cash $55

Sep. 25

Dr Cost of Goods Sold $780

Cr Merchandise Inventory $780

Sep. 29

Dr Cash $1,995

($1,940+$55)

Cr Accounts Receivable— Smithson $1,995

Sep. 30

Dr Cash $2,100

Cr Accounts Receivable—Jesper Company $2,100

Techniques for building employee empowerment include: building communication networks that include employees. developing open, supportive supervisors. moving responsibility from both managers and staff to production employees. building high-morale organizations. All of these are techniques for employee empowerment.

Answers

Answer:

All of these are techniques for employee empowerment.

Explanation:

An employee can be defined as an individual who is employed by an employer of labor to perform specific tasks, duties or functions in an organization.

Basically, an employee is saddled with the responsibility of providing specific services to the organization or company where he is currently employed while being paid a certain amount of money hourly, daily, weekly, or monthly depending on the contractual agreement between the two parties (employer and employee).

Generally, it's very important and necessary for employers or business owners to develop incentives for the empowerment of the employees.

Some of the techniques for building employee empowerment include the following:

I. An employer should build a strong communication networks that include employees and takes ideas from them.

II. An employer should groom his or her supervisors into being receptive, open, and supportive to their subordinates.

III. Moving responsibility from both managers and staff to production employees.

IV. High-morale should be stimulated or built around the employees working within organizations.

Archer Inc. issued $4,000,000 par value, 7% convertible bonds at 99 for cash. If the bonds had not included the conversation feature, they would have sold for 95. Prepare the journal entry to record the issuance of the bonds.

Answers

Answer: Dr Cash $3,960,000

Dr Discount on bonds payable $40,000

Cr Bonds payable $4,000,000

Explanation:

The journal entry to record the issuance of the bonds will be prepared as follows:

Dr Cash = 4,000,000 × 99% = $3,960,000

Dr Discount on bonds payable = $40,000

Cr Bonds payable = $4,000,000

(To record bond issued on discount)

Assume that the one-year interest rate is on the vertical axis of the IS-LM model and that the yield curve is initially upward sloping. Suppose that financial market participants expect that the central bank will pursue an open market purchase of bonds in the future. Given this information, we would expect which of the following to occur?
A. The yield curve will become flatter.
B. The yield curve will become vertical.
C. The yield curve will become steeper.
D. The yield curve will become downward sloping.

Answers

Answer: A. The yield curve will become flatter.

Explanation:

With the information given in the question, then it should be expected that the yield curve should be flatter.

On the other hand, if the participants that are in the financial market expect the central bank to pursue a contractionary monetary policy in the future, then the yield curve will become steeper.

Pasadena Candle Inc. projected sales of 800,000 candles for January. The estimated January 1 inventory is 35,000 units, and the desired January 31 inventory is 20,000 units. What is the budgeted production (in units) for January?

Answers

Answer:

785,000

Explanation:

Calculation to determine the budgeted production (in units) for January

BUDGETED PRODUCTION (in units) FOR JANUARY

Expected units to be sold 800000

Add Desired ending inventory, Dec 31 20000

Total units available 820000

(800,000+20,000)

Less Estimated beginning inventory, Jan 1 (35000)

Total units to be produced 785000

(820,000-35,000)

Therefore the budgeted production (in units) for January is 785,000

On the statement of cash flows, the cash flows from operating activities section would include:_____.a. cash receipts from sales activities.b. receipts from the issuance of capital stock.c. payments for the acquisition of investments.d. receipts from the sale of investments.

Answers

Answer:

a. cash receipts from sales activities

Explanation:

Cash flows from operating activities can be regarded as a section of a cash flow statement of a company which gives explanation about the sources as well as the uses of cash as regards ongoing regular business activities in particular period. These could typically encompass net income from the income statement as well as changes in working capital and adjustments to net income. It can be regarded as the first section which is depicted on a cash flow statement of a company. It should be noted that On the statement of cash flows, the cash flows from operating activities section would include a cash receipts from sales activities.

Problem 2 (2 points): If the rate of net investment flow is given by I(t) = 200e0.2t, calculate:
a/ The capital formation from the end of the second year to the end of the sixth year;
b/ The number of years required before the capital stock exceeds $200 000.

pls

Answers

Answer:

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to the end of the sixth year;

b/ The number of years required before the capital stock exceeds $200 000.

Compute straight-line depreciation on the building at the end of one year, assuming an estimated 10-year useful life and a $16,000 estimated residual value. (Do not round intermediate calculations.)What should be the book value of (a) the land and (b) the building at the end of year 2

Answers

Answer:

Missing word "Bridge City Consulting bought a building and the land on which it is located for $120,000 cash. The land is estimated to represent 70 percent of the purchase price. The company paid $10,000 for building renovations before it was ready for use."

Total Cost of Land and Building (100%) = $120,000

Cost of Land (70%) = $84,000

Cost of Building (30%) = $36,000

Cost of Building Renovations = $10,000

Total Cost of Building = $36,000 + $10,000

Total Cost of Building = $46,000

1. Annual Depreciation(Year End Depreciation) = (Cost of Building - Residual Value)/ Number of Year

Annual Depreciation = $46,000 - $16,000 / 10

Annual Depreciation = $30,000 / 10

Annual Depreciation = $3,000

2. Book Value of Land at the end of two years = $84,000

Book Value of Building at the end of two years = $46,000 - ($3,000*2 year) = $46,000 - $6,000 = $40,000

Hence, Book Value of Land and Building at the end of two year is = $84,000 + $40,000 = $124,000

A company intends to refinance a portion of its short-term debt in Year 2 and is negotiating a long-term financing agreement with a local bank. This agreement would be noncancelable and would extend for a period of 2 years. The amount of short-term debt that the company can exclude from its statement of financial position at December 31, Year 1.

a. May exceed the amount available for refinancing under the agreement.
b. Depends on the demonstrated ability to consummate the refinancing.
c. Must be adjusted by the difference between the present value and the market value of the current debt.
d. Is zero unless the refinancing has occurred by year end.

Answers

Answer:

Refinancing Short-term Debt

The amount of short-term debt that the company can exclude from its statement of financial position at December 31, Year 1:

b. Depends on the demonstrated ability to consummate the refinancing.

Explanation:

Demonstrating the ability to consummate the refinancing agreement of short-term obligations to long-term obligations enables the borrowing entity to exclude the obligations from its current liabilities and to classify the obligations as noncurrent.  This ability is demonstrated when an entity issues post-balance-sheet-date long-term obligation or equity securities or enters into a financing agreement that meets some criteria. These criteria are that the agreement lasts more than 1 year, is noncancelable by the lender, no agreement violation exists at the balance sheet date, and the lender does not default on the agreement.

$1,000 par value zero-coupon bonds (ignore liquidity premiums) Bond Years to Maturity Yield to Maturity A 1 6.00% B 2 7.50% C 3 7.99% D 4 8.49% E 5 10.70% One year from now bond C should sell for ________ (to the nearest dollar).

Answers

Answer:

$842

Explanation:

The computation of the One year from now bond C should sell is shown below;

But before that we have to determined the expected yield to maturity for bond C in one year :

So,  

1.0799^3 = 1.06 x (1 + r)^2

1.188 = (1 + r)^2

√1.188 = √(1 + r)^2

1.08999 = 1 + r

r = 0.08999

= 9%

Now

the yield to maturity  = (future value ÷ present value)^0.5 - 1

0.09 + 1 = ($1,000 ÷ value in 1 year)^0.5  

1.09 = ($1,000 ÷ value in 1 year)^0.5

1.09^2 = $1,000 ÷ value in 1 year

So,

value in 1 year is

= $1,000 ÷ 1.09^2

= $1,000 ÷ 1.1881

= $841.68

$842

Nash's Trading Post, LLC recorded the return of $150 of goods originally sold on credit to Discount Industries. Using the periodic inventory approach, Nash's would record this transaction as:
Accounts Payable 150
Sales Returns and Allowances 150
Sales Returns and Allowances 150
Accounts Receivable 150
Accounts Receivable 150
Sales Returns and Allowances 150
Inventory 150
Accounts Receivable 150

Answers

Answer:

Sales Returns and Allowances 150

Accounts Receivable 150

Explanation:

When goods are returned, the sales revenue decreases through Sales Returns and Allowances which is an expense. So, it is debited and the goods sold on account, the Accounts Receivable which is an asset decreases, so it is credited.

Account Titles and Explanations      Debit   Credit

Sales Returns and Allowances            $150

     Accounts Receivable                             $150

(To record sales returns)

Case :
"Dear Mr. President—Please Cancel our Project!": The Honolulu Elevated Rail Project

This case is a great current example of a very expensive project that was kicked off because of an assumed need—to relieve congestion in downtown Honolulu through an elevated urban rail system. Critics argue that in addition to having a ballooning cost, the actual planning was poorly conceived, leaving Honolulu with an intrusive and ugly rail system through the downtown area, ruining panoramic views, and impeding traffic. Additionally, advocates underestimated the power needs for the rail system, requiring the transport authority to renegotiate electricity fees for the system. Finally, the original costs that were assumed for the project were calculated during an economic downturn and with the economy booming again, the costs of the project have gone up dramatically. All of these elements points to a state Governor who is anxious to be rid of the project and hoping that President Trump will deny additional federal funding, in which case the project will likely be cancelled.

Required:
a. Why are public works projects like the Honolulu Rail project nearly impossible to stop once they have been approved, even if later cost estimates skyrocket?
b. Project Management researchers have charged that many large infrastructure projects, like this one, suffer from "delusion" and "deception" on the parts of their advocates. Explain how "delusion" might be a cause of ballooning budgets in this project. How does "deception" affect the final project budget overruns?

Answers

Answer:

a.The project has been approved and it has been proved necessary.

b. They often choose the cheapest budget and do not forecast any problems  in to make the project more viable.

Explanation:

a.There's an extensive process to approve a project like this, since it has so many filters before being approved, canceling it would be saying these filters failed. These filters exist to prove that these projects are necessary and if they're necessary they need to be done, no matter the cost.

b. THe people in charge of setting these projects going often choose the cheapest options to make the projects viable, when doing so the cost will eventually rise and, when the government has already approved it they will continue to spend money on the project.

Airline F leases all its aircraft under finance leases. Airline O leases all its aircraft under operating leases. Assuming that the two airlines report under US GAAP and are otherwise identical except for the mentioned lease classifications, which of the following comments is true?

a. Airline O has lower rent expense reported on its income statement
b. Airline F has a lower EBITDA margin
c. None of the listed answers
d. Airline O has more lease liabilities
e. Airline O has less lease assets at the inception of the lease

Answers

Answer: e. Airline O has less lease assets at the inception of the lease

Explanation:

With operating leases, the entity leasing the asset or the lessee, does not get the rights to ownership of the asset being leased but instead simply pay a fee or sort of rent for leasing the asset.

With a finance lease however, ownership is passed to the lessee for the lease period and the lessee would have to depreciate the asset and record it in its books.

Airline O will therefore not record any assets but Airline F will. This means that Airline F will have more assets than O because it had to record its assets but O did not.

Botosan Factory has budgeted factory overhead for the year at $717,474, and budgeted direct labor hours for the year are 364,200. If the actual direct labor hours for the month of May are 331,400, the overhead allocated for May is

Answers

Answer:

$652,858

Explanation:

Predetermined overhead rate = Budgeted Overheads ÷ Budgeted Activity

                                                    = $717,474 ÷  364,200

                                                    = $1.97 per direct labor hour

Allocated overheads = Predetermined overhead rate x Actual Activity

                                    = $1.97 x  331,400 direct labor hours

                                     = $652,858

therefore,

The overhead allocated for May is $652,858.

Consider the following limit order book for a share of stock. The last trade in the stock occurred at a price of $105.
Limit Buy Orders Limit Sell Orders Price Shares Price Shares $104.75 400 $104.80 150 104.70 700 104.85 150 104.65 400 104.90 300 104.60 200 104.95 150 103.65 500
a. If a market buy order for 150 shares comes in, at what price will it be filled? (Round your answer to 2 decimal places.)
b. At what price would the next market buy order be filled? (Round your answer to 2 decimal places.)

Answers

Answer:

A. $104.80

B. $104.85

Explanation:

A. Based on the information given If a market buy order for 150 shares comes in, the PRICE at which it will be filled is $104.80

Best price = $104.80

B. Based on the information given At what PRICE would the next market buy order be filled is $104.85

Next best price = 104.85

If you have a derivative position where you might be obligated to sell Japanese yen, you are a: Group of answer choices Call option buyer/holder. Put option writer/seller. Put option buyer/holder. Call option writer/seller.

Answers

Answer:

The answer is B

Explanation:

The answer is B. Put option writer/seller. Put option writer has a right but not the obligation to sell an asset at a specified price while put option buyer is the reverse

Option A is wrong. Call option buyer/holder has the right but not the obligation to buy an asset at a specified price while call option writer/seller is the reverse.

Snack food vendors and beer distributors earn some monopoly profits in their local markets but see them slowly erode from various new substitutes. When California voted on legalizing marijuana, which side would you think that California beer distributors were on

Answers

Answer: Opposing side

Explanation:

Substitutes to the products offered by monopolies are frowned upon by monopolies because it means that they cannot raise prices whenever they want anymore because people could simply switch to the substitutes.

Substitutes therefore reduce the power of monopolies. Marijuana is a substitute to beer as a recreational product so beer companies would be opposed to it being legalized as it would pose a threat to whatever dominance they have in the recreational sector.

Voltanis Corp. has preferred stock outstanding that will pay an annual dividend of $4.29 every year in perpetuity. If the stock currently sells for $101.03 per share, what is the required return?a. 3.82%b. 3.97%c. 4.25%d. 2.36%e. 4.85%

Answers

Answer:

The appropriate choice is Option c (4.25%).

Explanation:

Given:

Annual dividend,

= $4.29

Price per share,

= $101.03

Now,

The required return will be:

= [tex]\frac{Annual \ dividend}{Price \ per \ share}[/tex]

= [tex]\frac{4.29}{101.03}[/tex]

= [tex]0.04246[/tex]

or,

= [tex]4.25[/tex] (%)

One of the top-selling items at a gift shop at Hilo, HI are autographed pictures of Jack Star. Sales are 18 pictures per week, and the supplier charges $60 per picture. Currently the gift shop orders a 6-week supply at one time from the supplier. The total cost of placing each order is $45. Annual holding costs are $15 per picture. Assume that the shop operates 52 weeks/year.
A) What is the shop's current average inventory level?
B) What is the shop's current annual inventory holding cost?
C) What is the shop's current annual ordering cost (total cost of placing orders over the entire year)?
D) If the shop wishes to minimize total annual cost, what size orders should be placed?
E) At the optimal ordering quantity, what is the ordering and inventory holding cost per picture sold?
F) At the optimal ordering quantity, what is the shop's inventory turns per year?

Answers

Answer:

a. 54

b. 810 dollars

c. 390 dollars

d. 75 pictures

e. 561.6 dollars and 562.5 dollars

f. 38 pictures

Explanation:

demand per week = 18 pictures

annually this demand = 18 *52 = 936

charge per unit = 60 dollars

order for 6 weeks = 6*18 = 108 quantities

cost of ordering = 45 dollars

cost of holding annually = 15 dollars

a. current average inventory

= (18*6)/2

= 54 pictures

b. current annual holding cost

(108/2)*15

= 810 dollars

c. current annual holding cost

= 936/108 * 45

= 390 dollars

d. size orders to be placed

= [tex]\sqrt{\frac{2*936*45}{15} }[/tex]

= [tex]\sqrt{5616}[/tex]

= 74.9

≈ 75 pictures have to be ordered

e. ordering holding cost per picture

936/75 * 45

= 561.6 dollars

and inventory holding cost per picture

= 75/2 * 15

=562.5 dollars

f. shop inventory per year at optimal ordering quantity

= 75/2

= 37.5

≈ 38 pictures

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