Given sales of $100,000 a contribution margin of $40,000, and fixed expenses of $50,000, the result is a $10,000 net operating loss.
What is net operating loss?
The net operating loss is when total revenue is less than direct and indirect expenses. Direct expenses in variable cost while indirect expenses is fixed cost.
The net operating loss = contribution margin - fixed costs.
$40,000 - $50,000 = $-10,000
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Technoid Inc. sells computer systems. Technoid leases computers to Lone Star Company on January 1, 2021. The manufacturing cost of the computers was $19 million. This noncancelable lease had the following terms: Lease payments: $3,060,451 semiannually; first payment at January 1, 2021; remaining payments at June 30 and December 31 each year through June 30, 2025. Lease term: 5 years (10 semiannual payments). No residual value; no purchase option. Economic life of equipment: 5 years. Implicit interest rate and lessee's incremental borrowing rate: 7% semiannually. Fair value of the computers at January 1, 2021: $23 million. What is the outstanding balance of the lease liability in Lone Star's June 30, 2021, balance sheet? (Round your answer to the nearest whole dollar.) Multiple Choice $18,274,866. $18,074,875. $23,000,000. None of these answer choices is correct.
Answer:
We take this as the correct option:
$18,274,866
Explanation:
Present Value of the Lease Payments:
[tex]C \times \frac{1-(1+r)^{-time} }{rate} = PV\\[/tex]
C 3,060,451
time 10
rate 0.07
[tex]3060451 \times \frac{1-(1+0.07)^{-10} }{0.07} = PV\\[/tex]
PV $23,000,000.0511
Now, we build the lease schedule up to the first two payment:
[tex]\left[\begin{array}{cccccc}$Time&$Beg&$Cuota&$Interest&$Amort&$Ending&1&23,000,000&3,060,451&0&3060451&19,939,549&2&19,939,549&3,060,451&1,395,768&1664683&18,274,866\end{array}\right][/tex]
Fes Company is making adjusting journal entries for the year ended December 31, 2018. In developing information for the adjusting journal entries, you learned the following:
a. A two-year insurance premium of $6,800 was paid on January 1, 2018, for coverage beginning on that date. As of December 31, points 2018, the unadjusted balances were $6,800 for Prepaid Insurance and $0 for Insurance Expense
b. At December 31, 2018, you obtained the following data relating to supplies:
Unadjusted balance in Supplies on December 31, 2018 $13,000
Unadjusted balance in Supplies Expense on December 31, 2018 68,000
Supplies on hand, counted on December 31, 2018 8,400
Required:
1. Of the $6,800 paid for insurance, what amount should be reported on the 2018 income statement as Insurance Expense? What amount should be reported on the December 31, 2018, balance sheet as Prepaid Insurance?
2. What amount should be reported on the 2018 income statement as Supplies Expense? What amount should be reported on t December 31, 2018, balance sheet as Supplies?
3. Indicate the accounting equation effects of the adjustment required for (a) insurance and (b) supplies.
Answer:
Fes Company
1. Amount to report on the 2018 income statement as Insurance Expense
= $3,400
b. Amount to report on the December 31, 2018 balance sheet as Prepaid Insurance
= $3,400
2. Amount to report on the income statement as Supplies Expense
= $72,600
b. Amount to report on the balance sheet as Supplies = $8,400
3. The accounting equation effects of the adjustment for:
a) Insurance
Assets (Prepaid Insurance -$3,400) = Liabilities + Equity (Retained Earnings -$3,400 as Insurance Expense)
b) Supplies
Assets (Supplies - $4,600) = Liabilities + Equity (Retained Earnings -$4,600 in addition to Supplies Expense)
Explanation:
Adjusting Journal Entries:
a.
Debit Insurance Expense $3,400
Credit Prepaid Insurance $3,400
To adjust for expense for the year.
b.
Debit Supplies Expense $4,600
Credit Supplies $4,600
To adjust for used supplies.
Workings:
Supplies
Dec. 31, 2018 Balance $13,000
Supplies on hand 8,400
Supplies used $4,600
Dec. 31 Supplies Expense Balance $68,000
Supplies used $4,600
Total supplies expense = $72,600
1. When the Amount to report on the 2018 income statement as Insurance Expense
= $3,400
Income statementb. When the Amount to report on the December 31, 2018 balance sheet as Prepaid Insurance = $3,400
2. When the Amount to report on the income statement as Supplies Expense = $72,600
b. Then the Amount to report on the balance sheet as Supplies is = $8,400
3. After that The accounting equation effects of the adjustment for:
a) Insurance
Assets (Prepaid Insurance -$3,400) = Liabilities + Equity (Retained Earnings -$3,400 as Insurance Expense)
b) Supplies
Assets (Supplies - $4,600) = Liabilities + Equity (Retained Earnings -$4,600 in addition to Supplies Expense)
Adjusting Journal Entries:
a. Debit Insurance Expense $3,400
Credit Prepaid Insurance $3,400
To adjust for expenses for the year.
b. Debit Supplies Expense $4,600
Credit Supplies $4,600
To adjust for used supplies.
Workings:
Supplies
Dec. 31, 2018 Balance $13,000
Supplies on hand 8,400
Supplies used $4,600
Dec. 31 Supplies Expense Balance $68,000
Supplies used $4,600
Thus the Total supplies expense is = $72,600
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Brady, who has ordinary-shaped indifference curves, buys 16 ounces of salt each year. Even when the price of salt doubles, Brady continues to purchase exactly 16 ounces.
To help you answer this question, it may be helpful to use indifference curves and budget constraints to depict Brady's behavior graphically on a sheet of paper.
Which of the following statements is true?
a. Salt is an inferior good for Brady since the income effect is positive.
b. Salt is a normal good for Brady since the income effect is negative.
c. Salt is an inferior good for Brady since the income effect is positive.
d. Salt is a normal good for Brady since the income effect is positive.
Answer:
No option is correct, but I believe that one option was not copied appropriately since A and C are the same (although both are wrong).
The correct answer is Salt is an inferior good for Brady since the income effect is negative.
Explanation:
Brady's demand for salt is perfectly inelastic, in other words, his demand curve for salt is vertical since no matter the price, he always purchases the same amount.
Salt is an inferior good for Brady since the income effect is negative. He will continue to buy salt regardless of its price.
Dacosta Corporation had only one job in process on May 1. The job had been charged with $2,400 of direct materials, $6,966 of direct labor, and $10,104 of manufacturing overhead cost. The company assigns overhead cost to jobs using the predetermined overhead rate of $19.60 per direct labor-hour. During May, the following activity was recorded: Raw materials (all direct materials): Beginning balance $ 9,100 Purchased during the month $ 38,600 Used in production $ 39,900 Labor: Direct labor-hours worked during the month 2,500 Direct labor cost incurred $ 25,110 Actual manufacturing overhead costs incurred $ 33,900 Inventories: Raw materials, May 30 ? Work in process, May 30 $ 17,093 Work in process inventory on May 30 contains $3,849 of direct labor cost. Raw materials consist solely of items that are classified as direct materials. The cost of goods manufactured for May was:
Answer:
$116,387
Explanation:
Opening work in process = Direct materials + Direct Labor + Overheads
= $2,400 + $6,966 + $10,104
= $19,470
Adding up all the cost for the period, we'll have;
Raw materials = $39,900 used in production
Direct labor cost = $25,110
Overheads to be applied on predetermined rate = 2,500 × $19.6
= $49,000
Total cost incurred including beginning work in process = $133,480
Less: Closing work in process $17,093
Total cost of goods manufactured = $116,387
Local Broad Cost Leader - Low priced products for the local region: our brands offer solid value. Our primary stakeholders are bondholders, customers, stockholders, and management. Global Broad Differentiator - Premium products for the industry across the globe: our brands withstand the test of time. Our primary stakeholders are customers, stockholders, management, and employees. Global Niche Cost Leader - Reliable products for low technology customers across the globe: our brands offer value. Our primary stakeholders are bondholders, stockholders, customers, and management. Global Niche Differentiator - Premium, tailored products for technology-oriented customers across the globe: our brands define the cutting edge. Our primary stakeholders are customers, stockholders, management, and employees. Which mission statement best represents the Baldwin Company
Answer: b. Innovation meets revolution. We create value of our customers around the world through breakthrough designs that lead to unique high-performance products.
Explanation:
Baldwin creates value around the world for a variety of customers. Using breakthrough designs, they are able to offer low prices to domestic consumers, premium products across the globe, low technology products for the people who prefer it and high technology for those who prefer that as well.
The first option is wrong because the global customers of Baldwin are not mentioned.
The third is wrong as well because they do not only build premium products as they build low technology products as well.
The fourth option is also wrong because it would seem that the low price is only offered domestically not across the world.
In March 2018, Daniela Motor Financing (DMF), offered some securities for sale to the public. Under the terms of the deal, DMF promised to repay the owner of one of these securities $5,000 in March 2048, but investors would receive nothing until then. Investors paid DMF $850 for each of these securities; so they gave up $850 in March 2018, for the promise of a $5,000 payment 30 years later.
Required:
a. Assuming you purchased the bond for $850, what rate of return would you earn if you held the bond for 30 years until it matured with a value $5,000?
b. Suppose under the terms of the bond you could redeem the bond in 2025. DMF agreed to pay an annual interest rate of 1.3 percent until that date. How much would the bond be worth at that time?
c. In 2025, instead of cashing in the bond for its then current value, you decide to hold the bond until it matures in 2048. What annual rate of return will you earn over the last 23 years?
Answer:
a. Assuming you purchased the bond for $850, what rate of return would you earn if you held the bond for 30 years until it matured with a value $5,000?
future value = present value x (1 + r)ⁿ
future value = $5,000present value = $850n = 305,000 = 850 x (1 + r)³⁰
(1 + r)³⁰ = 5,000 / 850 = 5.882652
³⁰√(1 + r)³⁰ = ³⁰√5.882652
1 + r = 1.0608444
r = 0.0608444
r = 6.08%
b. Suppose under the terms of the bond you could redeem the bond in 2025. DMF agreed to pay an annual interest rate of 1.3 percent until that date. How much would the bond be worth at that time?
future value = present value x (1 + r)ⁿ
future value = 850 x 1.013⁷ = $930.43
c. In 2025, instead of cashing in the bond for its then current value, you decide to hold the bond until it matures in 2048. What annual rate of return will you earn over the last 23 years?
5,000 = 930.43 x (1 + r)²³
(1 + r)²³ = 5,000 / 930.43 = 5.373859398
²³√(1 + r)²³ = ²³√5.373859398
1 + r = 1.075849638
r = 0.0758
r = 7.58%
Chance Company had two operating divisions, one manufacturing farm equipment and the other office supplies. Both divisions are considered separate components as defined by generally accepted accounting principles. The farm equipment component had been unprofitable, and on September 1, 2016, the company adopted a plan to sell the assets of the division. The actual sale was completed on December 15, 2016, at a price of $640,000. The book value of the division’s assets was $1,090,000, resulting in a before-tax loss of $450,000 on the sale. The division incurred a before-tax operating loss from operations of $120,000 from the beginning of the year through December 15. The income tax rate is 30%. Chance’s after-tax income from its continuing operations is $440,000.Required:Prepare an income statement for 2016 beginning with income from continuing operations. Include appropriate EPS disclosures assuming that 100,000 shares of common stock were outstanding throughout the year. (Amounts to be deducted should be indicated with a minus sign. Round EPS answers to 2 decimal places.)
Answer:
Net income/loss 41,000
Earning per share:
Net Income 0.41
Explanation:
Preparation of an income statement for 2016 beginning with income from continuing operations
CHANCE COMPANY
Partial Income Statement
For the Year Ended December 31,2021
Income from continuing operations[a] $ 440,000
Discounted operations:
Loss from operations of discontinued component $ (570,000)
Income tax benefit $ 171,000
Loss on discontinued operations[b] $ (399,000)
Net income /[loss][a-b] $ 41,000
Earning per share: 100,000 Shares Outstanding
Income from continuing operations($ 440,000/100,000 Shares) $ 4.40
Loss from discontinued operations($ 399,000/100,000 Shares) $ (3.99)
Net Income($ 41,000/100,000 Shares) $0.41
Calculation of Loss from discontinued operations:
Loss from discontinued operations
Loss on sale of assets(1,090,000 - 640,000) $ (450,000)
Operating loss $ (120,000)
Total before -tax loss $ (570,000)
Less: Income Tax benefit(570,000*30%) $ 171,000
Loss after tax $ (399,000)
Blue Jeans Co.., can produce 1,300 pairs of pants per hour, at maximum efficiency. There are three eight-hour shifts each day. Due to unavoidable operating interruptions, production averages 850 units per hour. The plant operates only 28 days per month. Based on the current budget, Blue Jeans Co.., estimates that it will be able to sell only 500,000 units due to the entry of a competitor with aggressive marketing capabilities. But the demand is unlikely to be affected in future and will be around 519,000. Assume the month has 30 days. What is the master-budget capacity utilization level for this budget period
Answer:
500,000 units
Explanation:
Since the demand is likely to be 500,000 units, the master budget capacity utilization level for this budget period will be limited to 500,000 units. The master-budget capacity utilization level is the level of capacity utilization that managers expect for the current budget period.
Luca wants to identify and quantify the chemicals causing air pollution in a city, but he is using a manual air sampler to collect air samples.The density of gold is 19.3 g/cm3. What is the volume of a 13 g gold nugget? (Density: D = )
Answer:
0.674 cm3
Explanation:
volume= mass / density
Use Apple's financial statements in Appendix A to answer the following. Required: 1. Using fiscal 2014 as the base year, compute trend percents for fiscal years 2014, 2015, and 2016 for net sales, cost of sales, operating income, other income (expense) net, provision for income taxes, and net income. 2. Compute common-size percents for fiscal years 2015 and 2016 for the following categories of assets: (a) total current assets; (b) property, plant and equipment, net; and (c) goodwill plus acquired intangible assets, net. 3. Using current assets as a percent of total assets to measure liquidity, did Apple's asset makeup become more liquid or less liquid in 2016
Answer:
2014 2015 2016
Net Sales 182,795 233,715 (+27.9%) 215,639 (+18.0%)
Cost of Sales 112,258 140,089 (+24.8%) 131,376 (+17.0%)
operating income 52,503 71,230 (+35.7%) 60,024 (+14.3%)
other income
(expense) net 980 1,285 (+31.1%) 1,348 (37.5%)
net income 39,510 53,394 (+35.1%) 45,687 (15.6%)
2015 2016
Total assets 290,345 321,686
Current assets
(% of total assets) 89,378 (30.8%) 106,689 (33.2%)
PP&E 22,471 (7.7%) 27,010 (25.3%)
goodwill plus
intangible assets 9,009 (10.1%) 8,620 (8.0%)
3. Using current assets as a percent of total assets to measure liquidity, did Apple's asset makeup become more liquid or less liquid in 2016
Apple became more liquid in 2016, because current assets as % of total assets were 30.8% in 2015, and 33.2% in 2016.
2014 2015 2016
1. Net Sales [tex]182,795[/tex] [tex]233,715 (+27.9[/tex]%) [tex]215,639 (+18.0[/tex]%)
Cost of Sales [tex]112,258[/tex] [tex]140,089[/tex] [tex](+24.8[/tex]%) [tex]131,376 (+17.0[/tex]%)
operating income [tex]52,503[/tex] 71,230 (+35.7%) [tex]60,024 (+14.3[/tex]%)
other income
(expense) net [tex]980[/tex] 1,285 (+31.1%) [tex]1,348 (37.5[/tex]%)
net income [tex]39,510[/tex] 53,394 (+35.1%) [tex]45,687 (15.6[/tex]%)
Financial statements2015 2016
2. Total assets [tex]290,345[/tex] [tex]321,686[/tex]
Current assets
(% of total assets) [tex]89,378 (30.8[/tex]%) [tex]106,689 (33.2[/tex]%)
PP&E [tex]22,471 (7.7[/tex]%) [tex]27,010 (25.3[/tex]%)
goodwill plus
intangible assets [tex]9,009 (10.1[/tex]%) [tex]8,620 (8.0[/tex]%)
3. When Apple became more liquid in 2016, because current assets as % of total assets were 30.8% in 2015, and also 33.2% in 2016.
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Suppose that you start working for a company at age 25. You are offered two rather unlikely, but quite enticing, retirement plans from which you are allowed to choose one. [Round all answers to the nearest dollar.]Retirement plan 1: When you retire, you will receive $20,000 for each year of service.Retirement plan 2: When you start work, the company deposits $2500 into a savings account that is guaranteed to pay a yearly rate of 18%. When you retire, the account will be closed and the balance given to you.A. Determine the amount you would receive under plan 1, if you retired at age 55.
Answer:
Total amount= $600,000
Explanation:
Giving the following information:
Suppose that you start working for a company at age 25.
Option 1:
$20,000 for each year of work.
Number of years of service= 55 - 25= 30 years
Now, the total retirement plan:
Total amount= 30*20,000= $600,000
What is the purpose of a W-2 form?
Use the information in each of the following separate cases to calculate the unknown amount. Corentine Co. had $171,000 of accounts payable on September 30 and $142,000 on October 31. Total purchases on credit during October were $300,000. Determine how much cash was paid on accounts payable during October. On September 30, Valerian Co. had a $112,000 balance in Accounts Receivable. During October, the company collected $112,390 from its credit customers. The October 31 balance in Accounts Receivable was $108,000. Determine the amount of sales on credit that occurred in October. During October, Alameda Company had $121,500 of cash receipts and $122,150 of cash disbursements. The October 31 Cash balance was $28,100. Determine how much cash the company had at the close of business on September 30.
Answer:
1. $329,000
2.$108,390
3. $28,750
Explanation:
1. The computation of cash paid is below
= Opening balance of accounts payable + Purchase made - Ending balance of account payable
= $171,000 + $300,000 - $142,000
= $329,000
2. Computation of sales
= Ending balance of accounts receivable + Cash receipts -Opening balance of accounts receivable
= $108,000 + $112,390 - $112,000
= $108,390
3. Opening cash balance
= Cash disbursements + Ending cash balance - Cash receipts
= $122,150 + $28,100 - $121,500
= $28,750
If you can buy a pack of candy bars 5.99 or a 2 pack 3.49,what is the unit cost for a bar in each case?
Answer:
1.745 per unit
Explanation:
Firm A and B have identical business except that their financing is different: Firm A: EBIT = X = $10, D = $20 Firm B: EBIT = X = $10, D = $80 Suppose that corporate tax rate TC is 40%, cost of debt is RD is 10% for both. Please answer the following questions: Note: If your choice is A, then type in A. Do not type (A) or anything else. 1. Which firm has a greater FCF (free cash flow)? Your answer: (A) Firm A (B) Firm B (C) Both have the same FCF (D) Hard to say 2. What is firm A’s (annual) tax shield? Your answer: (A) $0 (B) $0.8 (C) $8 (D) $4 (E) Hard to say 3. What is firm B’s (annual) tax shield? Your answer: (A) $0 (B) $0.32 (C) $3.2 (D) $8 (E) Hard to say
Answer:
1. Which firm has a greater FCF (free cash flow)?
(A) Firm A2. What is firm A’s (annual) tax shield?
(B) $0.83. What is firm B’s (annual) tax shield?
(C) $3.2Explanation:
since firm A's debt is $20, its value is $100, then its equity = $80
since firm B's debt is $80, its value is $100, then its equity = $20
Firm A's cash flow = (EBIT - interest expense) x (1 - tax rate) = [$10 - ($20 x 10%)] x 0.6 = $4.80
Firm B's cash flow = (EBIT - interest expense) x (1 - tax rate) = [$10 - ($80 x 10%)] x 0.6 = $1.20
Firm A's annual tax shield = taxable interest x tax rate = ($20 x 10%) x 40% = $0.80
Firm B's annual tax shield = taxable interest x tax rate = ($80 x 10%) x 40% = $3.20
Answer each of the following independent questions. Alex Meir recently won a lottery and has the option of receiving one of the following three prizes: (1) $74,000 cash immediately, (2) $26,000 cash immediately and a six-period annuity of $8,300 beginning one year from today, or (3) a six-period annuity of $15,000 beginning one year from today. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the tables provided.) 1. Assuming an interest rate of 6%, determine the present value for the above options. Which option should Alex choose
Answer:
The best alternative is option 1.
Explanation:
Giving the following information:
(1) $74,000 cash immediately
(2) $26,000 cash immediately and a six-period annuity of $8,300 beginning one year from today
(3) a six-period annuity of $15,000 beginning one year from today.
The option with the higher present value is the most profitable.
1) PV= $74,000
2) We need to calculate the present value of the $8,300 annuity. First, we need to calculate the future value:
FV= {A*[(1+i)^n-1]}/i
A= annual cash flow
FV= {8,300*[(1.06^6) - 1]} / 0.06
FV= $57,895.14
Now, the present value:
PV= FV/(1+i)^n
PV= 57,895.14/1.06^6
PV= 40,813.79 + 26,000
Total PV= $66,813.79
3) FV= {15,000*[(1.06^6) - 1]} / 0.06
FV= $104,629.79
Now, the present value:
PV= 104,629.79 / 1.06^6
PV= $73,759.87
The best alternative is option 1.
HELP ME ASAPP ! Please don’t guess!
Customer service personnel typically need at least
A. a high school diploma.
B. a vocational school certificate.
C.
a community college degree.
D.
a four-year degree.
Answer:
Customer service representatives typically need a high school diploma or equivalent and receive on-the-job training to learn the specific skills needed for the job. They should be good at communicating and interacting with people and should be adept at using computers.
Explanation:
A company has the following information available for the year ending December 31, 2019:_______.
Service Revenue $91,300
Operating Expenses $52,900
Gain on Sale of Land $32,000
Loss on Sale of Equipment ($2,000)
Retained Earnings, 12/31/2019 $100,000
Dividends declared in 2019 $22,000
Required:
Calculate the company's (A) net income or loss for the year ending December 31, 2019 and (B) the balance in Retained earnings on January 1, 2019, the beginning of the fiscal year.
Answer:
a. $4,400
b. $117,600
Explanation:
The computation of the net income or loss for the year is shown below:
= Service revenue + gain on sale of land - operating expenses - loss on sale of equipment
= $91,300 + $32,000 - $52,900 - $2,000
= $4,400
Now the beginning retained earning balance is
As we know that
Ending retained earning balance = Opening retained earning balance + net income - dividend paid
$100,000 = Opening retained earning balance + $4,400 - $22,000
So,
The Opening retained earning balance
= $100,000 + $22,000 - $4,400
= $117,600
Answer:
2019
Explanation:
c. Which asset was riskiest during the Great Depression? How does that fit with your intuition? (Select the best choice below.) A. The riskiest assets were the corporate bonds. Intuition tells us that company debt should be riskiest. B. The riskiest assets were the stocks in the S&P 500. Intuition tells us that large companies should be the riskiest. C. The riskiest assets were the small stocks. Intuition tells us that smaller companies should be riskiest. D. The riskiest assets were the Treasury Bills. Intuition tells us that government securities would be the riskiest.
Answer:
The correct answer to the question is OPTION C (The riskiest assets were the small stocks. Intuition tells us that smaller companies should be riskiest.)
Explanation:
The riskiest assets were the small stocks.
The Great Depression was a term in the 20th century that became synonymous with hardship, suffering due significantly to the failure of the economy in the world with evidence of crash in the stock market.
The riskiest assets were the small stocks because it already crashed as panic made some stop investing and a lot of banks lost money. So small stocks were not lucrative again then, making it a risky asset to have.
Instinct tells us that smaller companies should be the riskiest because investing in smaller companies could be less lucrative due to a fall in the value of shares in tough times as compared to bigger companies.
Jocko works for IBM, a publicly traded company that sponsors a stock bonus plan. Which of the following statements is not correct regarding the plan? a. If the distribution of IBM stock is made to Jocko in installments over a two year period, then the fair market value of all employer securities distributed in the installment distribution will be taxable as ordinary income. b. Jocko is permitted to vote the shares of IBM within his account. c. Upon termination, Jocko must be given the right to receive IBM stock held in the plan as part of a distribution. d. If Jocko has less than three years of service, he is permitted to diversify one-half of company match contributions that consist of IBM stock.
Answer:
Option d. is correct
Explanation:
A stock bonus plan is defined as a contribution profit sharing plan in which contributions to a stock bonus plan by employers are discretionary and recurring. Also, stock bonus plans cannot discriminate toward executives (highly compensated employees).
The following statement is not correct regarding the plan:
''If Jocko has less than three years of service, he is permitted to diversify one-half of company match contributions that consist of IBM stock.''
Acme Inc. has 200 total employees, 150 of which are nonexcludable employees. Ten employees are highly compensated. Seven of the 10 highly compensated and 100 of the 140 nonhighly compensated employees are covered under Acme's qualified plan. The average accrued benefits for the highly compensated is 3% and the average accrued benefit for the nonhighly compensated is 1.5%. Which of the following statements is true regarding coverage? The Plan Passes the ratio percentage test. The plan passes the average benefits test. a. Both 1 and 2. b. 1 only. c. Neither 1 nor 2. d. 2 only.
Answer:
b. 1 only.
The Plan Passes the ratio percentage test.Explanation:
the ratio percentage test = ratio of non-HCE / ratio of HCE ≥ 70%
ratio percentage test = (100/140) / (7/10) = 0.71/0.7 = 1.02 or 102% ≥ 70% ✓ passed
the average benefits test = 1.5% / 3% = 0.5 or 50% ≤ 70% X failed
This means that the highly compensated employees receive disproportionately high benefits from the plan.
The Mazzanti Wholesale Food Company's fiscal year-end is June 30. The company issues quarterly financial statements requiring the company to prepare adjusting entries at the end of each quarter. Assuming all quarterly adjusting entries were properly recorded, prepare the necessary year-end adjusting entries at the end of June 30, 2016, for the following situations.
a. On December 1, 2020, the company paid its annual fire insurance premium of $6,800 for the year beginning December 1 and debited prepaid insurance.
b. On August 31, 2020, the company borrowed $107,500 from a local bank. The note requires principal and interest at 8% to be paid on August 31, 2021.
c. Mazzanti owns a warehouse that it rents to another company. On January 1, 2021, Mazzanti collected $25,600 representing rent for the 2021 calendar year and credited deferred rent revenue.
d. Depreciation on the office building is $18,600 for the fiscal year.
e. Employee salaries for the month of June 2021 $19,000 will be paid on July 20, 2021.
Answer:
The Mazzanti Wholesale Food Company
Adjusting Journal Entries:
a.
Debit Insurance Expense $3,969
Credit Prepaid Insurance $3,969
To accrue insurance expense for seven months.
b.
Debit Interest Expense $7,167
Credit Interest Payable $7,167
To accrue interest expense for 10 months.
c.
Debit Deferred Rent Revenue $12,800
Credit Rent Revenue $12,800
To record rent revenue earned.
d.
Debit Depreciation expense-Office Building $18,600
Credit Accumulated Depreciation-Office Building $18,600
To record depreciation expense for the year.
e.
Debit Salaries and Wages $19,000
Credit Salaries and Wages Payable $19,000
To accrue salaries for the month of June 2021.
Explanation:
Mazzanti Wholesale Food Company uses journal entries to identify the accounts involved in each business transaction. Journal entries identify which account is to be debited and the account to be credited, following basic accounting principle and based on the accounting equation of Assets = Liabilities + Equity.
Pronghorn Corporation began operations on January 1, 2020 when $236,000 was invested by shareholders of the company. On March 1, 2020, Pronghorn purchased for cash $125,000 of debt securities that it classified as available-for-sale. During the year, the company received cash interest of $7,100 on these securities. In addition, the company has an unrealized holding loss on these securities of $13,500 net of tax. Determine the following amounts for 2020: (a) net income, (b) comprehensive income, (c) other comprehensive income, and (d) accumulated other comprehensive income (end of 2020). (Enter negative amounts using either a negative sign preceding the number e.g. -15 or parentheses e.g. (15).)
Answer:
a. $7,100
b. -$6,400
c. -$13,500
d. -$13,500
Explanation:
The computation is shown below:-
a. Net income
Net income = Cash interest
= $7,100
b. Comprehensive Income = Net Income - unrealized holding loss
= $7,100 - $13,500
= -$6,400
c. Other Comprehensive Income = unrealized holding loss
= -$13,500
d. Accumulated other comprehensive income:
Ending Balance of other comprehensive income = Beginning Balance + During this year
= $0 + (-$13,500)
= -$13,500
Cost of Bank Loans Gifts Galore Inc. borrowed $1.6 million from National City Bank. The loan was made at a simple annual interest rate of 12% a year for 3 months. A 25% compensating balance requirement raised the effective interest rate. Do not round intermediate calculations. Round your answers to two decimal places. The nominal annual rate on the loan was 11.5%. What is the true effective rate? % What would be the effective cost of the loan if the note required discount interest? % What would be the nominal annual interest rate on the loan if the bank did not require a compensating balance but required repayment in three equal monthly installments? %
Answer: 23456
Explanation: its math
Suppose that during the past 3 years, equilibrium real GDP in a country rose steadily, from $ billion to $ billion, but even though the position of its aggregate demand curve remained unchanged, its equilibrium price level steadily declined, from to . What could have accounted for these outcomes, and what is the term for the change in the price level experienced by this country? A. Economic growth without an increase in aggregate demand; secular deflation. B. Recession with inflation; stagflation. C. Economic growth with an increase in aggregate demand; secular deflation. D. Increase in aggregate demand without economic growth: disinflation.
Answer:
A. Economic growth without an increase in aggregate demand; secular deflation.
Explanation:
THIS IS THE COMPLETE QUESTION;
✓What could have accounted for these outcomes?
The answer is "Economic growth without an increase in aggregate demand"
The logic is that Whenever there is increase in Aggregate demand, then there would be economic growth. And if the economy experience spare capacity, real GDP rises up,is recorded if there is a rise in Aggregate demand.
✓what is the term for the change in the price level experienced by this country?
The answer is secular deflation.
When there is mild consistent increase in Prices of goods/service for some periods of time, that long period is known as secular deflation period. This could be as a result of human conducts, production and distribution, unbalance on aspect of country money institution.
NOTE:
GDP is use to describe the growth rate as well as the economy of a state.
Aggregate demand is the total demand of all good/service that ha been produce in a particular period in an economy.
Mesa Company produces wooden rocking chairs. The company has two production departments, Cutting and Assembly. The wood is cut and sanded in Cutting and then transferred to Assembly to be assembled and painted. From Assembly, the chairs are transferred to Finished Goods Inventory and then are sold.
Mesa has compiled the following information for the month of February:
Cutting Department Assembly Department
Direct materials $150,000 $24,000
Direct labor 130,000 198,000
Applied manufacturing overhead 300,000 334,000
Cost of goods completed and transferred out 468,000 506,000
Required:
Prepare journal entries for the transactions in the Cutting and Assembly Departments of Mesa Company.
1.Record the transfer of materials to production in the Cutting department.
2. Record the cost of labor in the Cutting department.
3. Record the application of manufacturing overhead in the Cutting department.
4. Record the transfer of work in process inventory from Cutting to Assembly.
5. Record the transfer of materials to production in the Assembly department.
6. Record the cost of labor in the Assembly department.
7. Record the application of manufacturing overhead in the Assembly department.
8. Record the transfer of work in process inventory from Assembly to Finished Goods Inventory.
Answer and Explanation:
The journal entries are given below:-
1. Work-in-process - Cutting Dept. Dr, $150,000
To Raw material $150,000
(Being materials to production in the Cutting department is recorded)
2. Work-in-process - Cutting Dept. Dr, $130,000
To Wages expense $130,000
(Being cost of labor in the Cutting department is recorded)
3. Work-in-process - Cutting Dept. Dr, $300,000
To Manufacturing overhead $300,000
(Being manufacturing overhead in the Cutting department is recorded)
4. Work-in-process - Assembly Dept. Dr, $468,000
To Work-in-process - Cutting Dept. $468,000
(Being transfer of work in process inventory from Cutting to Assembly is recorded)
5. Work-in-process - Assembly Dept. Dr, $24,000
To Raw material $24,000
(Being materials to production in the Assembly department is recorded)
6. Work-in-process - Assembly Dept. Dr, $198,000
To Wages expense $198,000
(Being cost of labor in the Assembly department is recorded)
7. Work-in-process - Assembly Dept. Dr, $334,000
To Manufacturing overhead $334,000
(Being manufacturing overhead in the Assembly department is recorded)
8. Finished goods Dr, $506,000
To Work-in-process -- Assembly Dept. $506,000
(Being transfer of work in process inventory from Assembly to Finished Goods Inventory is recorded)
A company’s capital structure decisions address the ways a firm’s assets are financed (using debt, preferred stock, and common equity capital) and is often presented as a percentage of the type of financing used. As with all financial decisions, the firm should try to set a capital structure that maximizes the stock price, or shareholder value. This is called the optimal capital structure. Which of the following statements regarding a firm’s optimal capital structure is true? The optimal capital structure maximizes the firm’s cost of equity. The optimal capital structure maximizes the firm’s earnings per share (EPS). The optimal capital structure maximizes the firm’s cost of debt. The optimal capital structure minimizes the firm’s weighted average cost of capital.
Answer:
Option D (The optimal........capital) would be the right choice.
Explanation:
The optimal composition of capital would be the one with the lowest average capital structure. Such alternatives are meaningless since the optimal capital structure is not reflected by them. Maximizing earnings growth, interest burdens, or equity burdens would not enhance the worth including its shareholder.A highly visible IT project has attracted some of the brightest developers in the company. Unfortunately, the potential for conflict is also high. The project manager will rely on all her skill sets to complete the project successfully. She is very aware that her interpersonal skills can influence the project outcome. What are the specific interpersonal skills she is most likely to utilize? Select one: a. Leadership, negotiation, and influencing b. Active listening, negotiation skills, accommodating, and influencing c. Active listening, cultural awareness, leadership, networking, political awareness d. Leadership, effective decision-making, active listening, and influencing
Answer:
Leadership, negotiation, and influencing b. Active listening, negotiation skills, accommodating, and influencing
Explanation:
The specific interpersonal skills she is most likely to utilize are
Leadership,
negotiation,
and influencing
Active listening
negotiation skills
accommodating
influencing
All these interpersonal skills will help her to relate with the group of people she's working with for professionalism and to maintain good relationship with them.
Barton Steel is considering the purchase of a new steel mill. The first option is a top of the line high efficiency mill with a cost of $25 million. This mill will generate cash flows of $10 million per year for the next six years. At the end of the sixth year, Barton will have to reclaim the land under the new mill at a cost of $15 million. The second option is an economy mill that will generate $4 million in cash flows for the next six years, but require no land reclamation. This mill costs $12 million. If Barton estimates its cost of capital to be 9.5% which project should they accept
Answer:
The first project should be chosen
Explanation:
Net present value is the present value of after-tax cash flows from an investment less the amount invested.
NPV can be calculated using a financial calculator
To determine which project to accept, calculate the NPV for the two projects
The first option
Cash flow in year 0 = $-25 million
Cash flow each year for year 1 - 5 = $10 million
Cash flow in year 6 = $10 million - $15 million = $-5 million
I = 9.5
NPV = $10.50 million
Option two
Cash flow in year 0 = $-12 million
Cash flow each year for year 1 - 6 = $4 million
I = 9.5
NPV = $5.68 million
The first option should be chosen because the NPV of the first option yields the higher NPV
To find the NPV using a financial calculator:
1. Input the cash flow values by pressing the CF button. After inputting the value, press enter and the arrow facing a downward direction.
2. after inputting all the cash flows, press the NPV button, input the value for I, press enter and the arrow facing a downward direction.
3. Press compute
Explain why each function is continuous or discontinuous. (a) The outdoor temperature as a function of longitude, latitude, and time is ---Select--- . Small changes in longitude, latitude or time can produce ---Select--- changes in temperature. (b) Elevation (height above sea level) as a function of longitude, latitude, and time is ---Select--- . Small changes in longitude, latitude, or time can produce ---Select--- changes in elevation. (c) The cost of a taxi ride as a function of distance traveled and time is usually ---Select--- . Small changes in distance traveled or time can produce ---Select--- changes in cost.
Answer:
Continuous or Discontinuous Functions
(a) The outdoor temperature as a function of longitude, latitude, and time is ---continuous--- . Small changes in longitude, latitude or time can produce ---continuous--- changes in temperature.
(b) Elevation (height above sea level) as a function of longitude, latitude, and time is ---continuous--- . Small changes in longitude, latitude, or time can produce ---continuous--- changes in elevation.
(c) The cost of a taxi ride as a function of distance traveled and time is usually ---continuous--- . Small changes in distance traveled or time can produce ---continuous--- changes in cost.
Explanation:
A continuous function does not experience discontinuities. Some human attributes like height, weight, temperature, and body colors are continuous variations. Discontinuous variables have distinct categories that are different. Examples are sex, blood group, etc. Discontinuous functions bear "either or" properties.