Answer:
No, it will not cause the trial balance to be unequal because both debit and credit entry is balanced.
Explanation:
Both Debit and credit side of the journal entry made is equal so, it will not effect the trial balance.
Entry made
Dr. Land $10,100
Cr. Cash $10,100
Actual Entry
Dr. Office Equipment $10,100
Cr. Cash $10,100
Adjusting Entry
Dr. Office Equipment $10,100
Cr. Land $10,100
Whispering Winds Corp. took a physical inventory on December 31 and determined that goods costing $213,000 were on hand. Not included in the physical count were $35,000 of goods purchased from Coronado Industries, FOB, shipping point, and $26,500 of goods sold to Sunland Company for $31,000, FOB destination. Both the Coronado purchase and the Sunland sale were in transit at year-end.
Required:
1. What amount should Whispering Winds report as its December 31 inventory?
Answer:
Whispering Winds December 31 inventory $ 274,500
Explanation:
FOB shipping point means free on board shipping point. It gives the buyer the ownership of the goods purchased once they are shipped. These in transit are under the buyer's ownership.
FOB destination means that the buyers get the ownership when the goods reach the destination point.These in transit are not under in the buyer's ownership.
Goods costing on hand $213,000
Add Goods purchased FOB, shipping point $ 35000
Add Goods sold to Sunland Company FOB destination $ 26,500
Whispering Winds December 31 inventory $ 274,500
Both purchased and sold are under the Whispering Winds Corp. inventory as they sold ones have not reached the destination and purchased have left the shipping point.
On February 1, 2014, Nelson Corporation purchased a parcel of land as a factory site for $280,000. An old building on the property was demolished, and construction began on a new building which was completed on November 1, 2014. Costs incurred during this period are listed below: Demolition of old building $ 20,000 Architect's fees 35,000 Legal fees for title investigation and purchase contract 5,000 Construction costs 1,340,000 (Salvaged materials resulting from demolition were sold for $10,000.)
Nelson should record the cost of the land and new building, respectively, as
Answer:
Land = $295,000
Building = $1,375,000
Explanation:
The computation of cost of the land and new building is shown below:-
Land = Parcel of land + Demolition of old building + Legal fees for title investigation and purchase contract - Salvaged materials resulting from demolition were sold
= $280,000 + $20,000 + $5,000 - $10,000
= $305,000 - $10,000
= $295,000
Building = Architect's fees + Construction costs
= $35,000 + $1,340,000
= $1,375,000
We simply applied the above formulas
On May 1, A makes a written offer to B for the sale of A's car. On May 2, A mails B a letter revoking the offer. On May 3, A telephones B to tell him that he is revoking the offer. On May 4, B learns that A has sold the car to C. On May 5, A's letter finally gets to B. On what day did A's offer terminate? Why?
Answer:
On what day did A's offer terminate?
May 3
Why?
In order for a written offer to be terminated, the offeror must revoke the offer, the offeree must make a counteroffer, or the valid time for the offer must expire. In this case, A is the offeror and B is the offeree. A can revoke his/her offer as long as it is done before B accepted it. In order for the revocation to be valid, B must be notified about it.
In this case, A called B on May 3 to notify him/her that the offer was being revoked. Legally, that would be the day when the offer was terminated. The revocation letter is not important here because it arrived after A had called B.
Exercise 6-18 Break-Even and Target Profit Analysis; Margin of Safety; CM Ratio [LO6-1, LO6-3, LO6-5, LO6-6, LO6-7]Menlo Company distributes a single product. The company’s sales and expenses for last month follow: Total Per UnitSales$640,000 $40 Variable expenses 448,000 28 Contribution margin 192,000 $12 Fixed expenses 145,200 Net operating income$46,800 Required:1. What is the monthly break-even point in unit sales and in dollar sales?2. Without resorting to computations, what is the total contribution margin at the break-even point?3-a. How many units would have to be sold each month to attain a target profit of $75,600?3-b. Verify your answer by preparing a contribution format income statement at the target sales level.4. Refer to the original data. Compute the company's margin of safety in both dollar and percentage terms.5. What is the company’s CM ratio? If sales increase by $96,000 per month and there is no change in fixed expenses, by how much would you expect monthly net operating income to increase?
Answer:
Instructions are below.
Explanation:
Giving the following information:
Sales= $640,000 ($40)
Variable expenses= 448,000 (28)
Contribution margin= 192,000 ($12)
Fixed expenses= (145,200)
Net operating income=$46,800
1) To calculate the break-even point in units and dollars, we need to use the following formulas:
Break-even point in units= fixed costs/ contribution margin per unit
Break-even point in units= 145,200/(40-28)
Break-even point in units= 12,100 units
Break-even point (dollars)= fixed costs/ contribution margin ratio
Break-even point (dollars)= 145,200/ (12/40)
Break-even point (dollars)= $484,000
2) The break-even point is the number of units to sell to reach a net profit of cero. Therefore, the contribution margin must be equal to the fixed costs.
Contribution margin= 145,200
3) profit= $75,600
Break-even point in units= (fixed costs + desired profit)/ contribution margin per unit
Break-even point in units= 220,800/12
Break-even point in units= 18,400 units
Sales= 18,400*40= 736,000
Total variable costs= 18,400*28= (515,200)
Contribution margin= 220,800
Fixed costs= 145,200
Net profit= 75,600
4) The margin of safety:
Margin of safety= (current sales level - break-even point)
Margin of safety= 640,000 - 484,000= $156,000
Margin of safety ratio= (current sales level - break-even point)/current sales level
Margin of safety ratio= 156,000/640,000
Margin of safety ratio= 0.244= 24.4%
5) Contribution margin ratio= 12/40= 0.3
Net increase= 96,000*0.3= $28,800
Teresa owns and operates a store in a country experiencing a high rate of inflation. In order to prevent the value of money in her cash register from falling too quickly, Teresa sends an employee to the bank four times per day to make deposits in an interest-bearing account that protects the store's revenues from the effects of inflation. This is an example of the _______________
Answer:
Shoe leather costs
Explanation:
Inflation can be defined as the constant rise in the prices of goods and services within an specific period of time. It can also be described as the increase in the cost of living for the average individuals as they now struggle to buy products in the market whose price has been increased way above their normal budget. It could be as as result of many factors which such as the repayment of a large amount of money borrowed by the government, increase in the rate at which government spends money.
Shoe leather costs can be described as the amount of time and effort an individual spends to reduce the effect caused by high prices of goods.
In the scenario described above, Teresa sends her employee to the bank four times per day to pay in money into the account inorder to curb the effect of inflation, this is described as shoe leather costs because regular visits to the bank tends to wear off the shoes of the employee.
On July 31, 2020, Cullumber Company engaged Minsk Tooling Company to construct a special-purpose piece of factory machinery. Construction begun immediately and was completed on November 1, 2020. To help finance construction, on July 31 Cullumber issued a $324,000, 3-year, 12% note payable at Netherlands National Bank, on which interest is payable each July 31. $216,000 of the proceeds of the note was paid to Minsk on July 31. The remainder of the proceeds was temporarily invested in short-term marketable securities (trading securities) at 10% until November 1. On November 1, Cullumber made a final $108,000 payment to Minsk. Other than the note to Netherlands, Cullumber’s only outstanding liability at December 31, 2020, is a $29,500, 8%, 6-year note payable, dated January 1, 2017, on which interest is payable each December 31.Calculate the interest revenue, weighted-average accumulated expenditures, avoidable interest, and total interest cost to be capitalized during 2020.
Answer:
a. Interest revenue = $2,700
b. Weighted-average accumulated expenditures = $54,000
c. Avoidable interest = $6,480
d. Total interest cost to be capitalized = $6,480
Explanation:
The computation of interest revenue, weighted-average accumulated expenditures, avoidable interest, and total interest cost to be capitalized is shown below:-
a. Interest revenue = (Issued notes payable - Interest payable) × Short-term marketable securities × From 1 Aug to 31 Oct ÷ Total number of months in a year
= ($324,000 - $216,000) × 10% × 3 months ÷ 12
= $108,000 × 10% × 3 months ÷ 12
= $2,700
b. Weighted-average accumulated expenditures = Interest payable × Short-term marketable securities × From 1 Aug to 31 Oct ÷ Total number of months in a year
= $216,000 × 3 months ÷ 12
= $54,000
Here we will not consider 1 Nov because it contains 0 months so answer is $54,000
c. Avoidable interest = Weighted-average accumulated expenditures × Notes payable percentage
= $54,000 × 12%
= $6,480
d. Total interest cost to be capitalized = Weighted-average accumulated expenditures × Notes payable percentage
= $54,000 × 12%
= $6,480
We simply applied the above formulas
The following transactions occurred during March 2013 for the Wainwright Corporation. The company owns and operates a wholesale warehouse.
1. Issued 30,000 shares of common stock in exchange for $300,000 in cash.
2.
Purchased equipment at a cost of $40,000. $10,000 cash was paid and a note payable was signed for the balance owed.
3. Purchased inventory on account at a cost of $90,000. The company uses the perpetual inventory system.
4. Credit sales for the month totaled $120,000. The cost of the goods sold was $70,000.
5. Paid $5,000 in rent on the warehouse building for the month of March.
6.
Paid $6,000 to an insurance company for fire and liability insurance for a one-year period beginning April 1, 2013.
7. Paid $70,000 on account for the merchandise purchased in 3.
8. Collected $55,000 from customers on account.
9. Recorded depreciation expense of $1,000 for the month on the equipment.
Required:
Analyze each transaction and show the effect of each on the accounting equation for a corporation. (Amounts to be deducted should be indicated by a minus sign. Enter the net change on the accounting equation.)
ASSETS = Liabilities + Paid-in Capital + Retained Earnings
1
2
3
4
5
6
7
8
9
Answer:
Wainwright Corporation
ASSETS = Liabilities + Paid-in Capital + Retained Earnings
1 . Assets (Cash) increase $30,000 = Liabilities + Paid-in Capital increase $30,000 + Retained Earnings
2 . Assets (Equipment) increase $40,000 and (Cash) decrease -$10,000 = Liabilities increase $30,000 + Paid-in Capital + Retained Earnings
3 . Assets (Inventory) increase $90,000 = Liabilities (Notes Payable) increase $90,000 + Paid-in Capital + Retained Earnings
4 . Assets (Inventory) decrease -$70,000 + (Accounts Receivable) increase $120,000 = Liabilities + Paid-in Capital + Retained Earnings increase $50,000
5 . Assets (Cash) decrease -$5,000 + (Insurance Prepaid) increase $5,000= Liabilities + Paid-in Capital + Retained Earnings
6 . Assets (Cash) decrease -$6,000 = Liabilities + Paid-in Capital + Retained Earnings -$6,000
7. Assets (Cash) decrease -$70,000 = Liabilities (Accounts Payable) decrease -$70,000 = Paid-in Capital + Retained Earnings
8 . Assets (Cash) increase $55,000 and decrease (Accounts Receivable) -$55,000 = Liabilities + Paid-in Capital + Retained Earnings
9. Assets (Equipment) decrease -$1,000 = Liabilities + Paid-in Capital + Retained Earnings decrease -$1,000.
Explanation:
a) The accounting equation states that Assets are equal to Liabilities Plus Paid-in Capital Plus Retained Earnings. This equation is very important in accounting as it keeps the two sides of the balance sheet in balance. The equation shows that assets are funded by liabilities or equity or profits from operation.
b) When common stock is issued for cash, Assets increase and Paid-in Capital increase.
c) The purchase of equipment increases Assets by $40,000 and decreases Assets by $10,000 (for cash payment) and increases Liabilities by $30,000 as note payable.
d) Assets increase by $90,000 with inventory purchased on account and Liabilities (Accounts Receivable) increases by the same amount.
e) Payments for Rent for March will decrease Assets (Cash) and decrease Retained Earnings.
f) The Insurance cost of $6,000 paid in advance will decrease Assets (Cash) and increase Assets (Insurance Prepaid) without affecting the other side of the equation.
g) Depreciation expense also decreases Assets (Equipment) and decreases the Retained Earnings by $1,000 respectively.
A and B Companies have been operating separately for five years. Each company has a minimal amount of liabilities and a simple capital structure consisting solely of voting common stock. In exchange for 40 percent of its voting stock, A Company acquires 80 percent of the common stock of B Company. This is a "tax-free" stock-for-stock exchange for tax purposes. B Company’s identifiable assets have a total net fair market value of $800,000 and a total net book value of $580,000. The fair market value of the A stock used in the exchange is $700,000, and the fair value of the noncontrolling interest is $175,000.
Required:
1. The goodwill reported following the acquisition would be _____________.
Answer:
$75,000
Explanation:
Goodwill is an intangible asset that equals the money paid in excess of fair market value for a company's assets, which includes the company's brand recognition, proprietor technology, clients, etc.
goodwill = fair market value of A stock used in the exchange + fair market value of the noncontrolling interest - fair market value of company B's assets = $700,000 + $175,000 - $800,000 = $75,000
Bearcat Construction begins operations in March and has the following transactions.
March 1 Issue common stock for $21,000.
March 5 Obtain $9,000 loan from the bank by signing a note.
March 10 Purchase construction equipment for $25,000 cash.
March 15 Purchase advertising for the current month for $1,100 cash.
March 22 Provide construction services for $18,000 on account.
March 27 Receive $13,000 cash on account from March 22 services.
March 28 Pay salaries for the current month of $6,000.
Required:
1. Record each transaction. Bearcat uses the following accounts: Cash, Accounts Receivable, Equipment, Notes Payable, Common Stock, Service Revenue, Advertising Expense, and Salaries Expense. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field.)
Answer:
March 1 Issue common stock for $21,000.
Dr Cash 21,000 Cr Common stock 21,000March 5 Obtain $9,000 loan from the bank by signing a note.
Dr Cash 9,000 Cr Notes payable 9,000March 10 Purchase construction equipment for $25,000 cash.
Dr Equipment 25,000 Cr Cash 25,000March 15 Purchase advertising for the current month for $1,100 cash.
Dr Advertising expense 1,100 Cr Cash 1,100March 22 Provide construction services for $18,000 on account.
Dr Accounts receivable 18,000 Cr Service revenue 18,000March 27 Receive $13,000 cash on account from March 22 services.
Dr Cash 13,000 Cr Accounts receivable 13,000March 28 Pay salaries for the current month of $6,000.
Dr Salaries expense 6,000 Cr Cash 6,000USA Airlines uses the following performance measures. Classify each of the performance measures below into the most likely balanced Scorecard perspective it relates to. Select your answers using C(customer), P (internal process), / (innovation and growth), or F(financial). 1. Percentage of late flights 2. Cost of leasing airport gates 3. Employee satisfaction survey ratings 4. Percentage of waste recycled 5. Number of reports of mishandled or lost baggage 6. Operating cash flow 7. Employee diversity training sessions completed 8. Accidents or safety incidents per mile flown 9. Percentage of on-time departures 10. Average ticket price 11. Percentage of ground crew trained 12. Time airplane is on ground between flights 13. On-time flight percentage 14. Net income
Answer: please see explanation column
Explanation: Classifying performance measures, we have
1. Percentage of late flights ------Customer, C
2. Cost of leasing airport gates ----Financial, F
3. Employee satisfaction survey ratings----P (internal process)
4. Percentage of waste recycled-----Innovation and Growth, I
5. Number of reports of mishandled or lost baggage ----Customer, C
6. Operating cash flow------Financial, F
7. Employee diversity training sessions completed-----Innovation and Growth, I
8. Accidents or safety incidents per mile flown---- -P (internal process)
9. Percentage of on-time departures----Customer, C
10. Average ticket price----Financial, F
11. Percentage of ground crew trained------Innovation and Growth, I
12. Time airplane is on ground between flights------P (internal process)
13. On-time flight percentage---Customer, C-
14. Net income-----Financial, F
On January 1, 2018, Ogleby Corporation signed a five-year noncancelable lease for equipment. The terms of the lease called for Ogleby to make annual payments of $180,000 at the beginning of each year for five years with title passing to Ogleby at the end of this period. The equipment has an estimated useful life of 7 years and no salvage value. Ogleby uses the straight-line method of depreciation for all of its fixed assets. Ogleby accordingly accounts for this lease transaction as a finance lease. The minimum lease payments were determined to have a present value of $750,578 at an effective interest rate of 10%.
With respect to this lease, for 2018 Ogleby should record
a. rent expense of $180,000.
b. interest expense of $57,058 and amortization expense of $150,116.
c. interest expense of $57,058 and amortization expense of $107,225.
d. interest expense of $90,000 and amortization expense of $181,956
Show all work including formulas
Answer:
With respect to this lease, for 2018 Ogleby should record interest expense of $57,058 and depreciation expense of $107,225. The right answer is c
Explanation:
According to the given data we have the following:
PV of lease=$750,578
Annual payment=$180,000
Rate of interesr=10%
The interest expense would be calculated as follows:
Interest expense = ( PV of lease - Annual payment ) * Rate of interest
Interest expense = ( $750,578 - $180,000 ) * 10%
Interest expense = $57,058
Therefore, With respect to this lease, for 2018 Ogleby should record interest expense of $57,058 and depreciation expense of $107,225.
rates at business hotels are typically much lower on weekends than during the week
True or false?
Answer: I think is True
Explanation: I hope that helps :)
a. "The choice of strategy for a multinational firm must depend on a comparison of the benefits of that strategy (in terms of value creation) with the costs of implementing it (as defined by organizational architecture necessary for implementation). On this basis, it may be logical for some firms to pursue a localization strategy, others a global or international strategy, and still others a transnational strategy." Is this statement correct? Why or why not?
Explanation:
This statement is correct because the benefits and costs of localization, global, international and transnational strategies for a multinational are different, so the choice of the best strategy must be aligned with the objectives and goals that a company intends to achieve in the market, in order to generate a cost / benefit exchange that will help the multinational to remain competitive in the world market.
It is necessary for the company to observe each different strategy from a cost and benefit perspective, in order to obtain a competitive advantage in a highly competitive market.
Therefore, the best strategy will be the one that will help the company to reduce costs and increase the local response capacity in the global market.
The local strategy, for example, can generate competitive advantage, but which will need to substantially reduce its cost structure to compete with well positioned competitors, which can generate a change that leads the company to adopt a transnational strategy.
The international strategy can only work in the short term, since in order to remain in the market in the long term, the multinational needs to adopt a global standardization and a transnational strategy in order to generate competitive advantage.
Levine Inc., which produces a single product, has prepared the following standard cost sheet for one unit of the product. Direct materials (8 pounds at $2.40 per pound) $19.20 Direct labor (5 hours at $12.00 per hour) $60.00 During the month of April, the company manufactures 260 units and incurs the following actual costs. Direct materials purchased and used (2,400 pounds) $6,240 Direct labor (1,310 hours) $15,458 Compute the total, price, and quantity variances for materials and labor. Total materials variance $enter a dollar amount select an option Materials price variance $enter a dollar amount select an option Materials quantity variance $enter a dollar amount select an option Total labor variance $enter a dollar amount select an option Labor price variance $enter a dollar amount select an option Labor quantity variance $enter a dollar amount
Answer:
$3,120 U
$480 U
$2,640 U
$142 F
$262 F
$120 U
Explanation:
As per the data given in the question,
Total material variance = Actual cost - Standard cost
= $6,240 - (260 × 5 × 2.4)
= $3,120 U
Material Price Variance = (Actual quantity × Actual rate) - (Actual quantity-standard rate)
= $6,240 - (2,400 × 2.4)
= $480 U
Material Quantity Variance = Standard rate × (actual quantity used - standard quantity)
= 2.4 × (2,400 - (260×5))
= $2,640 U
Total Labor variance = Actual cost - Standard cost
= $15,458 - (260 × 12 × 5)
= 142 F
Labor price variance = (Actual hour × actual rate) - (actual hours × standard rate)
= $15,458 - ($1,310 × 12)
= $262 F
Labor efficiency variance = Standard cost × (Actual hrs used - Standard hours)
= 12 × (1,310 - (260 × 5))
= $120 U
We simply applied the above formulas
Under ideal conditions inflation should not have any blurring effect on price signals. If wages and prices are rising at a constant 20% then individuals should be able to adjust their expectations accordingly. For example, if the price of bread increased by 20% and the price of the input flour also rose by 20%, the sellers should know that the real price of bread has not changed. The market equilibrium quantity and price has not changed. Why does inflation in the real world result in shortages and surpluses?
Answer:
1. Adjustments of or changes in price are not smooth or synchronized.
2. Inflation rarely have impact on the prices of inputs.
3. The concentration of sellers is more on nominal prices of goods than real prices.
Explanation:
Inflation can be described as a sustained increase in the general price level of commodities within a country over a period of time.
The following are the reasons inflation in the real world result in shortages and surpluses:
1. Adjustmensts of or changes in price are not smooth or synchronized.
2. Inflation rarely have impact on the prices of inputs.
3. The concentration of sellers is more on nominal prices of goods than real prices.
Ashley Robertson works for MRK all year and earns a monthly salary of $ 11,900. There is no overtime pay. Ashley's income tax withholding rate is 20 % of gross pay. In addition to payroll taxes, Ashley elects to contribute 2% monthly to United Way. MRK also deducts $ 125 monthly for co-payment of the health insurance premium. As of September 30, Ashley had $ 107,100 of cumulative earnings.
Required:
1. Compute Ashley's net pay for October. (Round all amounts to the nearest cent.) Withholding deductions: Net (take-home) pay
2. Journalize the accrual of salaries expense and the payment related to the employment of Ashley Robertson.
Answer:
1. Compute Ashley's net pay for October.
Ashley's net pay = $11,900 - $2,380 - $238 - $125 - $737.80 - $172.55 = $8,246.65
2. Journalize the accrual of salaries expense and the payment related to the employment of Ashley Robertson.
Dr Wages expense 11,900
Dr FICA expense 910.35
Cr Federal income tax withholding payable 2,380
Cr United Way contribution payable 238
Cr Health insurance payable 125
Cr FICA Social Security withholding payable 737.80
Cr FICA Medicare withholding payable 172.55
Cr FICA Social Security tax payable 737.80
Cr FICA Medicare tax payable 172.55
Cr Wages payable 8,246.65
Dr Federal income tax withholding payable 2,380
Dr United Way contribution payable 238
Dr Health insurance payable 125
Dr FICA Social Security withholding payable 737.80
Dr FICA Medicare withholding payable 172.55
Dr FICA Social Security tax payable 737.80
Dr FICA Medicare tax payable 172.55
Dr Wages payable 8,246.65
Cr Cash 12,810.35
Explanation:
monthly salary $11,900
income tax withholding rate 20% = $11,900 x 20% = $2,380
union contribution 2% = $11,900 x 2% = $238
health insurance $125
cumulative earnings September 30, $107,100
FICA taxes:
social security 6.2% = $737.80
Medicare 1.45% = $172.55
no FUTA tax applies
The R&D division of Piqua Chemical Corp. has just developed a chemical for sterilizing the vicious Brazilian "killer bees" which are invading Mexico and the southern United States. The president of the company is anxious to get the chemical on the market to boost the company’s profits. He believes his job is in jeopardy because of decreasing sales and profits. The company has an opportunity to sell this chemical in Central American countries, where the laws are much more relaxed than in the United States. The director of Piqua’s R&D division strongly recommends further testing in the laboratory for side-effects of this chemical on other insects, birds, animals, plants, and even humans. He cautions the president, "We could be sued from all sides if the chemical has tragic side-effects that we didn’t even test for in the labs." The president answers, "We can’t wait an additional year for your lab tests. We can avoid losses from such lawsuits by establishing a separate wholly-owned corporation to shield Piqua Corp. from such lawsuits. We can’t lose any more than our investment in the new corporation, and we’ll invest in just the patent covering this chemical. We’ll reap the benefits if the chemical works and is safe, and avoid the losses from lawsuits if it’s a disaster." The following week, Piqua creates a new wholly-owned corporation called Finlay Inc., sells the chemical patent to it for $10, and watches the spraying begin.Instructions: 1. Who are the stakeholders in this situation? 2. Are the president's motives and actions ethical? 3. Can Piqua shield itself against losses of Finlay Inc.?
Answer:
(1)The primary stakeholders in this example are the shareholders of he company who have infused their money expecting it to be used for lawful objects as stated in the charter of the company, the secondary stakeholders can be the environment such as humans.
(2)President actions does not seem ethical, because he wants to save his own job at the expense of polluting the environment what can cause harm to humans, plants and animals.
(3) Since Finlay Inc. has no assets other than $ 10 in patent, it would be very hard to carry the huge losses should lawsuits be filed. In that event, there are going to be huge outflows of cash from the books of Piqua, and the stockholders would want to know why or the reason.
Explanation:
Solution
Given that:
(1)The primary stakeholders in this case, are the shareholders of the company, who have infused their money expecting it to be used for lawful objects as stated in the charter of the company. The secondary stakeholder could be the environment comprising of the fauna,flora, and humans, as the spray can be a serious pollutant in the environment.
(2) The president's actions and reasons are does not seem ethical
Firstly, he wants to save his own job at the expense of polluting the environment, and possibly causing various harm to animals,plants, and even humans.
Secondly, he does not want to share the contingent liabilities that may occur with the stockholders, that may lead to erosion in shareholder value.
The third reason is,in order to keep these liabilities off the balance sheet of Piqua Chemical Corp., he has developed a SPV for carrying the losses from lawsuits.
Hence, there is no limpidity here, and he has committed a breach of trust. The president of the company, as the agent of the company and its stockholders stands in a relationship that is fiduciary, and should avoid conflict or issues of interest at all cost.
(3) At the end, it would be hard for Piqua to hide itself from the losses of Finlay Inc.
Since Finlay Inc. has no assets other than $ 10 in patent, how would it be possible to carry the huge losses should lawsuits be applied. In that case, there are going to be huge outflows of cash from the books of Piqua, and the stockholders would want to know the what caused it.
1. Assuming that crowding out is not an issue, if Congress increases business taxes at the same time that the Federal Reserve conducts an open market sale, output and price level are likely to change in which of the following ways?
Output / Price Level
A. Increase / Decrease.
B. Decrease / Increase
C. Indeterminate / Decrease.
D. Decrease / Indeterminate.
E. Decrease / Decrease.
2. The election of a new president resulted in a significant increase in business confidence regarding the economy. How will this new confidence impact the loanable funds market in the short run?
Demand for Loanable Funds / Real Interest Rate
A. Increase / Increase.
B. Increase / Decrease.
C. Increase / No Change.
D. Decrease / Decrease.
E. Decrease / Increase
3. When a bank’s excess reserves increase by $375 after $500 was deposited in the bank, the reserve requirement must be
a. 10 percent.
b. 15 percent.
c. 20 percent.
d. 25 percent.
e. 30 percent.
Answer:
1. E. Decrease/ Decrease
The higher taxes on businesses will reduce output because businesses will have less incentive to produce, and therefore, will produce less.
When the Fed conducts an open market sale, it reduces the money supply. This decreases the price level.
2. A. Increase / Increase.
The higher demand for loanable funds due to increased business confidence will also increase the value of the real interest rate.
3. d. 25 percent.
If the excess reserves are $375, then, the required reserves are $125. And $125 is the 25% of $500.
A U.S. company's foreign subsidiary had the following amounts in stickles (§) in 2013: COGS § 12,000,000 Ending Inventory 600,000 Beg. inventory 240,000 The average exchange rate during 2013 was §1 = $.96. The beginning inventory was acquired when the exchange rate was §1 = $1.20. The ending inventory was acquired when the exchange rate was §1 = $.90. The exchange rate at December 31, 2013 was §1 = $.84. Assuming that the foreign country had a highly inflationary economy, at what amount should the foreign subsidiary's cost of goods sold have been reflected in the 2013 U.S. dollar income statement? A. $11,253,600. B. $11,577,600. C. $11,649,600. D. $11,613,600. E. $11,523,600. D. $11,613,600. A U.S. company's foreign subsidiary had the following amounts in stickles (§), the functional currency, in 2013: COGS § 12,000,000 Ending Inventory 600,000 Beg. inventory 240,000 The average exchange rate during 2013 was §1 = $.96. The beginning inventory was acquired when the exchange rate was §1 = $1.20. The ending inventory was acquired when the exchange rate was §1 = $.90. The exchange rate at December 31, 2013 was §1 = $.84. At what amount should the foreign subsidiary's cost of goods sold have been reflected in the 2013 U.S. dollar income statement? A. $11,253,600. B. $11,577,600. C. $11,520,000. D. $11,613,600. E. $11,523,600.
Answer:
Option (D)
Explanation:
According to the scenario, computation of the given data are as follow:-
Particular Amount × Exchange rate Total value after exchange rate
Cost of goods sold 12,000,000
Add-ending inventory 600,000 × 0.9 $540,000
Less-opening inventory 240,000 × 1.2 $288,000
Purchase 12,360,000 × 0.96 $11,865,600
Cost of Goods Sold After Exchange Rate = Purchase - Ending Inventory + Opening Inventory
= $11,865,600 - $540,000 + $288,000
= $11,613,600
According to the analysis, option (D) $11,613,600 is correct.
Because of her excessive tardiness and absenteeism during the year, the company discharged Ruth V. Williams on November 13. Ruth has requested Form W-2 be given to her. Form W-2 will include her final pay. For the week ending November 7, she was late a total of six hours; and for this week, she missed two full days and was late two hours on another day. In lieu of two weeks' notice, Williams was given two full weeks' pay ($1,223.08). Along with her dismissal pay ($1,223.08), she was paid for the week ending November 7 (34 hours, or $519.86) and the days worked this current week (22 hours, or $336.38). The total pay for the two partial weeks is $856.24.Pay Points:Prepare a Wage and Tax Statement, Form W-2, to be given to Williams.1) Record a separate payroll register (on one line) to show Williamsâs total earnings, deductions, and net pay. The two weeksâ dismissal pay is subject to all payroll taxes. Include dismissal pay with the total earnings but do not show the hours in the Time Record columns. Use the tax table for the biweekly payroll period for the total gross pay ($2,079.32) of Williams.The deduction for group insurance premiums is $14.40. In the Time Record column, make a note of Williamsâs discharge as of this date. Indicate the payroll check number used to prepare the final check for Williams. When posting to the earnings record, make a notation of Williamsâs discharge on this date.2) Prepare the journal entries to transfer the net cash and to record Williamsâs final pay and the employerâs payroll taxes. Post to the ledger accounts.3) Use the blank Form W-2. Box "a" should be left blank, since Glo-Brite Paint Company does not use a control number to identify individual Forms W-2.
Answer:
Explanation:
STEP1: Payroll register form and details for Nov13
Name : Ruth Williams
Pay period : 2 partial weeks
Pay date : Nov 7th
Regular hours : No need to enter
Overtime hours : No need to enter
Pay rate : Nil
Gross pay : $2079.32
Federal, state, and local income taxes
Employee withholding for Social Security and Medicare taxes
Other deductions : ($14.4)
------------------
Net pay 2064.6
------------------
) A company sells a software suite that includes a word processor and spreadsheet applications. The suite sells for $250 and the items are also available separately for $200 (spreadsheet) and $170 (word processor). The spreadsheet app is by far the best seller of the standalone product sales. Using the incremental-revenue allocation method and assuming that the spreadsheet is the primary product, how much of the $250 revenue from the bundled product sale would be allocated to the spreadsheet and to the word processing products?
Answer:
Allocated to the the word processing products would be$80
To the spreadsheet would be allocated revenues for $170
Explanation:
In order to calculate how much of the $250 revenue from the bundled product sale would be allocated to the the word processing products we would have to use the following formula:
allocated to the the word processing products= sold price suits- spreadsheet price
allocated to the the word processing products= $250-$170
allocated to the the word processing products=$80
To the spreadsheet would be allocated revenues for $170
The information listed below refers to the employees of Lemonica Company for the year ended December 31, 2016. The wages are separated into the quarters in which they were paid to the individual employees.NameSocial Security #1st Qtr.2nd Qtr.3rd Qtr.4th Qtr.TotalRobert G. Cramer . . . . . . . . . . . .000-00-0001$ 5,800$ 5,000$ 5,000$ 5,200$ 21,000Daniel M. English (Foreman) . . .000-00-000313,00013,40013,40013,40053,200Ruth A. Small . . . . . . . . . . . . . . .000-00-19982,0002,3002,3002,4009,000Harry B. Klaus. . . . . . . . . . . . . . .000-00-741311,60011,70011,70011,70046,700Kenneth N. George (Manager) . .000-00-652313,60014,00014,50015,00057,100Mavis R. Jones . . . . . . . . . . . . . .000-00-67891,6001,7001,700-0-5,000Marshall T. McCoy. . . . . . . . . . .000-00-333411,40011,400-0--0-22,800Bertram A. Gompers (President) .000-00-101424,50025,00025,50026,300101,300Arthur S. Rooks. . . . . . . . . . . . . .000-00-7277-0-7001,7001,7004,100Mary R. Bastian . . . . . . . . . . . . .000-00-81118,0008,2008,2008,20032,600Klaus C. Werner . . . . . . . . . . . . .000-00-26232,3002,5002,5002,5009,800Kathy T. Tyler . . . . . . . . . . . . . . .000-00-3534-0--0-11,30011,70023,000Totals . . . . . . . . . . . . . . . . . . . .$93,800$95,900$97,800$98,100$385,600For 2016, State D’s contribution rate for Lemonica Company, based on the experience-rating system of the state, was 2.8% of the first $7,000 of each employee’s earnings. The state tax returns are due one month after the end of each calendar quarter. During 2016, the company paid $2,214.80 of contributions to State D’s unemployment fund. Employer’s phone number: (613) 555-0029. Employer’s State D reporting number: 00596.Using the forms supplied on pages 5-42 to 5-44, complete the following for 2016:a. Date and amount of the FUTA tax payment for the fourth quarter of 2016 (State D is not a credit reduction state). Tax Payment: Date _____________ Amount $____________b. Employer’s Report for Unemployment Compensation, State D—4th quarter only. Item 1 is the number of employees employed in the pay period that includes the 12th of each month in the quarter. For Lemonica Company, the number of employees is eight in October, seven in November, and eight in December. All employees earned 13 credit weeks during the last quarter except for Rooks (8) and Tyler (9).c. Employer’s Annual Federal Unemployment (FUTA) Tax Return—Form 940Indicate on each form the date that the form should be submitted and the amount of money that must be paid. The president of the company prepares and signs all tax forms.
Answer:
a. Due Date – January 31, 2017
b. FUTA tax liability for fourth quarter $2,905
Explanation:
If your FUTA tax for the fourth quarter (plus any deposited amounts from earlier quarters) is more than $500, deposit the entire amount by January 31, 2017. If it is $500 or less, you can either deposit the amount or pay it with your Form 940 by January 31, 2017.
Name
Social Security
4th Qtr.
Taxable Wages ($7,000 or lower)
FUTA tax at 5.4%
Robert G. Cramer
000-00-0001
$ 5,200.00
$ 5,200.00
$ 280.80
Daniel M. English (Foreman)
000-00-0003
$ 13,400.00
$ 7,000.00
$ 378.00
A. Small
000-00-1998
$ 2,400.00
$ 2,400.00
$ 129.60
Harry B. Klaus
000-00-7413
$ 11,700.00
$ 7,000.00
$ 378.00
Kenneth N. George (Manager)
000-00-6523
$ 15,000.00
$ 7,000.00
$ 378.00
Mavis R. Jones
000-00-6789
-0-
$ -
$ -
Marshall T. McCoy
000-00-3334
-0-
$ -
$ -
Bertram A. Gompers (President)
000-00-1014
$ 26,300.00
$ 7,000.00
$ 378.00
Arthur S. Rooks
000-00-7277
$ 1,700.00
$ 1,700.00
$ 91.80
R. Bastian
000-00-8111
$ 8,200.00
$ 7,000.00
$ 378.00
Klaus C. Werner
000-00-2623
$ 2,500.00
$ 2,500.00
$ 135.00
Kathy T. Tyler
000-00-3534
$ 11,700.00
$ 7,000.00
$ 378.00
Total
$ 98,100.00
$ 2,905.20
Since the state experience the lower experience rating system, hence the FUTA tax rate is minimum 5.4%.
On December 1, 2020, Concord Corporation acquired new equipment in exchange for old equipment that it had acquired in 2017. The old equipment was purchased for $216000 and had a book value of $83720. On the date of the exchange, the old equipment had a fair value of $91000. In addition, Concord paid $286000 cash for the new equipment, which had a list price of $386000. The exchange lacked commercial substance. At what amount should Concord record the new equipment for financial accounting purposes?
Answer:
$369,720
Explanation:
The computation of the amount record the new equipment for financial accounting purpose is shown below:
Book value of new equipment = book value of old equipment + cash given
where,
Book value of old equipment is $83,720
And, the cash paid for new equipment is $286,000
SO, the book value of new equipment is
= $83,720 + $286,000
= $369,720
Kropf Inc. has provided the following data concerning one of the products in its standard cost system. Variable manufacturing overhead is applied to products on the basis of direct labor-hours.
Inputs Standard Quantity or Hours Standard Price or Rate
per Unit of Output
Direct materials
7.60 liters $ 7.20 per liter
Direct labor 0.60 hours 23.70 per hour
Variable manufacturing overhead 0.60 hours $ 6.10 per hour
The company has reported the following actual results for the product for September:
Actual output 9,800 units
Raw materials purchased 75,200 liters
Actual cost of raw materials purchased $ 564,500
Raw materials used in production 74,500 liters
Actual direct labor-hours 5,500 hours
Actual direct labor cost $ 135,302
Actual variable overhead cost $ 29,314
Required:
a. Compute the materials price variance for September.
b. Compute the materials quantity variance for September.
c. Compute the labor rate variance for September.
d. Compute the labor efficiency variance for September.
e. Compute the variable overhead rate variance for September.
f. Compute the variable overhead efficiency variance for September.
Answer:
Instructions are below.
Explanation:
Giving the following information:
Direct materials 7.60 liters $ 7.20 per liter
Direct labor 0.60 hours 23.70 per hour
Variable manufacturing overhead 0.60 hours $ 6.10 per hour
Actual output 9,800 units
Raw materials purchased 75,200 liters
Actual cost of raw materials purchased $ 564,500
Raw materials used in production 74,500 liters
Actual direct labor-hours 5,500 hours
Actual direct labor cost $ 135,302
Actual variable overhead cost $ 29,314
1) To calculate the direct material price and quantity variance, we need to use the following formulas:
Direct material price variance= (standard price - actual price)*actual quantity
Actual pirce= 564,500/75,200= 7.51
Direct material price variance= (7.2 - 7.51)*75,200
Direct material price variance= $23,312 unfavorable
Direct material quantity variance= (standard quantity - actual quantity)*standard price
Direct material quantity variance= (7.6*9,800 - 74,500)*7.2
Direct material quantity variance= $144 favorable
2) To calculate the direct labor rate and efficiency variance, we need to use the following formulas:
Direct labor time (efficiency) variance= (Standard Quantity - Actual Quantity)*standard rate
Standard quantity= 0.6*9,800= 5,880
Direct labor time (efficiency) variance= (5,880 - 5,500)*23.7
Direct labor time (efficiency) variance= $9,006 favorable
Direct labor rate variance= (Standard Rate - Actual Rate)*Actual Quantity
Actual rate= 135,302/5,500= 24.6
Direct labor rate variance= (23.7 - 24.6)*5,500
Direct labor rate variance= $4,950 unfavorable
3) To calculate the variable overhead rate and efficiency variance, we need to use the following formulas:
Manufacturing overhead rate variance= (standard rate - actual rate)* actual quantity
Actual rate= 29,314/5,500= 5.33
Manufacturing overhead rate variance= (6.10 - 5.33)*5,500
Manufacturing overhead rate variance= $4,235 favorable
variable overhead efficiency variance= (Standard Quantity - Actual Quantity)*Standard rate
variable overhead efficiency variance= (0.6*9,800 - 5,500)*6.1
variable overhead efficiency variance= $2,318 favorable
Brussels Enterprises issues bonds at par dated January 1, 2019, that have a $3,600,000 par value, mature in four years, and pay 7% interest semiannually on June 30 and December 31.
Required:
a. Record the entry for the issuance of bonds for cash on January 1.
b. Record the entry for the first semiannual interest payment and the second semiannual interest payment.
c. Record the entry for the maturity of the bonds on December 31, 2022 (assume semiannual interest is already recorded).
J&E Enterprisesi s considering and investment which produces no cash flows for the first year. In the second year, the cash inflow is $47,000. This inflow will increase to $198,000 and then $226,000 for the following two years, respectively, before ceasing permanently. The initial investment will cost $318,000. The firm requires a 15.5 percent rate of return and has a required discounted payback period of three years. Should the project be accepted. Why or why not?
Year Cash flow Discounted cash flo Cumulative cash flo
1 $0 $0.00 $0.00
2 $47,000 $35,321.72 $35,231.72
3 $198,000 $128,504.77 $163,736.49
4 $226,000 $126,993.21 $290,729.70
Answer:
No
The amount of cumulative discounted cash flows is less than the the amount invested in the project. This means that the project is unprofitable.
Explanation:
The discounted cash flow method calculates how long it takes to recover the amount invested in a project from its cumulative discounted cash flow.
A project should be accepted if the amount invested in the project is recovered from the cumulative discounted cash flow within the period specified by the firm.
The cumulative discounted cash flow, $290,729.70 is less than the amount invested $318,000. So the project shouldn't be accepted.
I hope my answer helps you
Transactions that affect earnings do not necessarily affect cash. Identify the effect, if any, that each of the following transactions would have upon cash and net income. (If an amount reduces the account balance then enter with negative sign preceding the number e.g. -15,000 or parentheses e.g. (15,000).)(a) Purchased $173 of supplies for cash.(b) Recorded an adjusting entry to record use of $49 of the above supplies.(c) Made sales of $1,271, all on account.(e) Received $738 from customers in payment of their accounts. Purchased equipment for cash, $2,518.(f) Recorded depreciation of building for period used, $743.
Answer and Explanation:
According to the scenario, computation of the given data are as follow:-
Retained Earnings
Particular Cash ($) Net income ($)
a. Purchased supplies for cash -173 -
b. Adjusting entry to record use of supplies - - 49
c. Sales made of all on accounts - 1,271
d. Received customer payment of their accounts 738 -
e. Purchased equipment for cash -2,518 -
f. Depreciation of building for period use - -743
In the first transaction the cash is gone so it would be deducted no impact on net income
In the second transaction there is an adjusting entry the same affect the net income in a negative manner and no impact on cash
In the third transactions sales made which increased the net income and does not have any impact on cash
In the fourth transaction Received payment which increased the cash balance and no impact on net income
In the first transaction the cash is gone so it would be deducted no impact on net income
In the fifth transaction the depreciation is charged so it would decreased the net income and no impact on cash
Which of the following statements is false about assessing interests in negotiations? Select one: a. If you don’t ask what the other’s interests are, you are likely to be off base. b. Parties in conflict often assume they know the interests of the other. c. Taking a firm position suggests several interests typically underlie it. d. Parties always have multiple interests. e. Relational and identity issues are rarely important in negotiations.
Answer:
E) Relational and identity issues are rarely important in negotiations.
Explanation:
Negotiations between conflicting parties involve people, and whenever people are involved, the possibility of personal issues getting involved always exist. Sometimes a good relationship between the negotiating parties can help to solve the problem more swiftly, but bad relationships can result in exactly the opposite.
A factory machine was purchased for $393000 on January 1, 2018. It was estimated that it would have a $74000 salvage value at the end of its 5-year useful life. It was also estimated that the machine would be run 30000 hours in the 5 years. The company ran the machine for 3900 actual hours in 2018.
Required:
1. If the company uses the units-of-activity method of depreciation, the amount of depreciation expense for 2018 would be ________.
A) $51090.
B) $41470.
C) $82940.
D) $74000.
Answer:
Annual depreciation= $41,470
Explanation:
Giving the following information:
Purchasing price= $393,000
Salvage value= $74,000
The machine would be run 30000 hours in the 5 years. The company ran the machine for 3900 actual hours in 2018.
To calculate the depreciation expense using the units of activity method, we need to use the following formula on each year:
Annual depreciation= [(original cost - salvage value)/useful life of production in hours]*hours operated
Annual depreciation= [(393,000 - 74,000)/30,000]*3,900
Annual depreciation= $41,470
In its first year of operations, Gomes Company recognized $28,000 in service revenue, $6,000 of which was on account and still outstanding at year-end. The remaining $22,000 was received in cash from customers. The company incurred operating expenses of $15, 800. Of these expenses, $12,000 were paid in cash; $3, 800 was still owed on account at year-end. In addition, Gomes prepaid $2, 400 for insurance coverage that would not be used until the second year of operations.
(a) Calculate the first year's net earnings under the cash basis of accounting, and calculate the first year's net earnings under the basis of accounting.
(b) Which basis of accounting (cash or accrual) provides more useful information for decision-makers?
Answer:
a. The first year's net earnings under the cash basis of accounting is $7,600 and the first year's net earnings under the basis of accounting is $12,200
b. Accrual basis of accounting provides more useful information.
Explanation:
a. In order to calculate the first year's net earnings under the cash basis of accounting we would have to use the following formula:
Cash basis net earnings = Service revenue (Cash) – Cash expenses – Prepaid expenses
Cash basis net earnings =$22,000 – $12,000 – $2,400
Cash basis net earnings =$7,600
In order to calculate the first year's net earnings under the the basis of accounting we would have to use the following formula:
Accrual basis net earnings = Service revenue – Operating expenses incurred
Accrual basis net earnings= $28,000 – $15,800
Accrual basis net earnings=$12,200
b. Accrual basis of accounting provides more useful information, because in this system revenues are recorded what actually earned and expenses are recorded what actually incurred for earning such revenues. Therefore, it gives better profit picture