Answer:
Aug. 1
Debit :
Credit :
Aug. 8
Debit :
Credit :
Aug. 15
Debit :
Credit :
Aug. 15
Debit :
Credit :
Aug. 20
Debit :
Credit :
Aug. 24
Debit :
Credit :
Explanation:
You just decided to begin saving for retirement. You will make deposits of $1,000 per month into a retirement account that earns 8.00% p.a. The first deposit is made today and the last deposit will be made when you retire exactly 30 years from today. (Note: you make 361 total monthly deposits into your retirement account.) You will begin to make withdrawals from the account the first month after you retire. If you plan to live an additional 25 years and leave $900,000 to your heirs, you will be able to withdraw $_____ each month. (Note: you make 300 total monthly withdrawals from your retirement account.)
Answer:
Monthly withdraw= $4,752.01
Explanation:
Giving the following information:
Monthly deposit= $1,000
Number of perios= 361 months
Interest rate= 0.08/12= 0.0067
First, we need to calculate the Future Value at the moment of retirement:
FV= {A*[(1+i)^n-1]}/i
A= monthly deposit
FV= {1,000*[(1.0067^361) - 1]} / 0.0067
FV= $1,513,584.37
Now, we can calculate the monthly withdraw:
PV= 1,513,584.37 - 900,000= $613,584.27
Monthly withdraw= (FV*i) / [1 - (1+i)^(-n)]
Monthly withdraw= (613,584.37*0.0067) / [1 - (1.0067^-300)]
Monthly withdraw= $4,752.01
Decide whether each of the following is frictional, structural, or cyclical unemployment:
a. The economy gets worse, so General Motors shuts down a factory for four months, laying off workers. cyclical structural frictional
b. General Motors lays off 5,000 workers and replaces them with robots. The workers start looking for jobs outside the auto industry. cyclical structural frictional
c. About 10 workers per month at a General Motors plant quit their jobs because they want to live in another town. They start searching for work in the new town.
Answer and Explanation:
The classification is as follows:
a. Cyclical unemployment
Since the economy got worse and the factory would be shut down for 4 months so this represent that the economy would go into recession
b. Structural unemployment
As General motors would lays off 5,000 workes and wants to subsitute with robots so here there is a mismatch of the skills & characteristics according to the job requirements
c. Frictional unemployment
Frictional unemployment is classify as a short-term unemployment that occurred for matching the workers with the available jobs
Dry-Sand Company is considering investing in a new project. The project will need an initial investment of $1,200,000 and will generate $600,000 (after-tax) cash flows for three years. However, at the end of the fourth year, the project will generate -$500,000 of after-tax cash flow due to dismantling costs. Calculate the MIRR (modified internal rate of return) for the project if the cost of capital is 15 percent. The reinvestment rate is 12 percent. Multiple Choice 20.4 percent 11.5 percent 28.2 percent 12.6 percent
Answer:
12.6 percent
Explanation:
The First Step is to Calculate the Terminal Value at end of year 4.
Terminal Value (FV) = Sum of (PV x (1 + r) ^ 4 - n)
= $600,000 x (1.15) ^ 3 + $600,000 x (1.15) ^ 2 + $600,000 x (1.15) ^ 1 - $500,000 x (1.15) ^ 0
= $912,525 + $793,500 + $690,000 - $500,000
= $1,896,025
The Next Step is to Calculate the MIRR using CFj Function of a Financial Calculator :
($1,200,000) CFj
0 CFj
0 CFj
0 CFj
$1,896,025 CFj
Now, Shift IRR/Yr we get 12.60 %
Therefore, the MIRR is 12.60 %.
Jamarcus was his collegiate chapter's delegate at a national conference of a professional business fraternity, Phi Chi Theta, in which he is a member. When the business meeting was conducted, parliamentary procedure was used, and Jamarcus was not familiar with this. Thus, he looked to the others to learn how he should behave in this situation. What type of influence does this reference group exhibit? procedural transient substantive informational legal
Answer:
informational
Explanation:
Informational influence is defined as a new concept or information that occurs within a group and leads to change in group member attitudes, behaviour, and belief.
In the given scenario parliamentary procedure was used in a business meeting and Jamarcus was not familiar with this.
He looked to other group members to learn how he should behave in this situation.
In this case the group is providing information of proper way of behaving during the meeting.
consumer behaviour of poor class of pakistan
Answer:
The poor class consumer usually buys products of basic necessity in frequency, but in limited and small quantities. It is not common for excessive purchases to be made and for products that are not essential for survival. In addition, this consumer can buy lower quality products that have lower prices, or products on sale or with low price offers. The frequency of shopping is also low and they tend to buy in more popular places for the low-income population.
Explanation:
Consumer behavior is the term used to determine the quantity, the reason, the places and the type of product that the consumer buys. This behavior can be analyzed psychologically, socially, economically and anthropologically.
Regarding poor consumption, it is common for the amount of money to be very limited, causing this consumer to buy only the essential products, even so the quantities are low and the quality is also low because that is what fits in the budget.
The Sisyphean Company is planning on investing in a new project. This will involve the purchase of some new machinery costing $400,000. The Sisyphean Company expects cash inflows from this project as detailed below: Year 1 Year 2 Year 3 Year 4 $157,452.975 / $157,452.975/ $157,452.975/ $157,452.975 The appropriate discount rate for this project is 15%. The internal rate of return (IRR) for this project is closest to ________.
Answer:
21%
Explanation:
Internal rate of return is the discount rate that equates the after-tax cash flows from an investment to the amount invested
IRR can be calculated with a financial calculator
Cash flow in year 0 = $-400,000.
Cash flow in year 1 - 4 = $157,452.975
IRR = 21%
To find the IRR 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 IRR button and then press the compute button.
(Hybrid costing) Pat Koontz makes necklaces from glass beads, metal beads, and natural beads. After reading about hybrid costing, she realized that the different types of necklaces did not cost the same amount of money to make, even though they took the same amount of time and effort to assemble. Koontz developed the following standard costs for each type of necklace:
Glass Metal Natural
Beads $24 $15 $ 7
Direct labor (1.5 hours) 15 15 15
Overhead (based on 1.5 hours) 8 8 8
Total $47 $38 $30
Koontz began 2010 with no beginning WIP Inventory after she experienced an extreme holiday rush. During January, 130 necklaces were started: 70 were glass, 25 were metal, and 35 were natural. At the end of January, 25 necklaces were not yet complete: 5 glass,13 metal, and 7 natural. The stage of completion for each cost component for the 25 unfinished necklaces was as follows:
Material 100% complete
Conversion 60% complete
a. Calculate the cost of necklaces completed during January.
b. Calculate the cost of necklaces in ending WIP Inventory.
Answer:
Pat Koontz
a. The cost of necklaces completed during January = $96.16
b. The cost of necklaces in ending WIP inventory = $24.40
Explanation:
a) Data and Calculations:
Glass Metal Natural Total
Beads $24 $15 $ 7 $46
Direct labor (1.5 hours) 15 15 15 45
Overhead (based on 1.5 hours) 8 8 8 24
Total cost of production $47 $38 $30 $115
Glass Metal Natural
Units started 70 25 35 130
Ending WIP 5 13 7 25
Units completed 65 12 28 105
Equivalent units:
Glass Metal Natural
Mat. Conv Mat. Conv Mat. Conv
Units completed 65 65 12 12 28 28
Ending WIP 5 3 13 8 7 4
Equivalent units 70 68 25 20 35 32
Cost per equivalent unit:
Glass Metal Natural
Mat. Conv Mat. Conv Mat. Conv Total
Cost of production $24 $23 $15 $23 $7 $23 $115
Equivalent units 70 68 25 20 35 32
Cost per equivalent $0.42 $0.34 $0.60 $1.15 $0.20 $0.72
Glass Metal Natural Total
Mat. Conv Mat. Conv Mat. Conv
Cost per equivalent $0.42 $0.34 $0.60 $1.15 $0.20 $0.72
Equivalent units of
Units completed 65 65 12 12 28 28
Units completed $27.3 $22.1 $7.2 $13.8 $5.6 $20.16 $96.16
Glass Metal Natural Total
Mat. Conv Mat. Conv Mat. Conv
Cost per equivalent $0.42 $0.34 $0.60 $1.15 $0.20 $0.72
Ending WIP (equiva.) 5 3 13 8 7 4
Total cost $2.1 $1.02 $7.8 $9.2 $1.4 $2.88 $24.40
The Assembly Department for Right pens has the following production data for the current month.
Beginning Work in Process Units Transferred Out Ending Work in Process
0 15,000 10,000
Materials are entered at the beginning of the process. The ending work in process units are 50% complete as to conversion costs.
Compute the equivalent units of production for (a) materials and (b) conversion costs.
Answer:
(a) materials = 25,000 units and
(b) conversion costs = 20,000 units
Explanation:
Note : I will assume the Weighted Average Cost Method for this question since the information provided allows so.
The equivalent units of production for
(a) materials and
Units Completed and Transferred 15,000
Units in ending Work in Process 10,000
Total 25,000
(b) conversion costs.
Units Completed and Transferred 15,000
Units in ending Work in Process 5,000
Total 20,000
Match each situation with the conflict escalation stage that best describes it. Answer Key Terms Descriptions Hardening A. You and your opponent calmly discuss the objective issues involved in the conflict. Fragmentation of the enemy B. Your opponent tells your coworkers that you lied to her about how much money was left in the budget that you both have been discussing how to manage. Images and coalitions C. Rather than discussing the issues the goal becomes winning. You try to mobilize your colleagues to support your position. Loss of face D. Communication with your opponent is ended as winning is no longer possible. The goal becomes outlasting your opponent and destroying her power base.
Answer:
A. Hardening
B. Loss of face
C. Images and coalitions
D. Fragmentation of the enemy
Explanation:
A conflict can be defined as any form of disagreement that arises between two or more parties due to opposing views, opinions, or incompatibility.
Some examples of the conflict escalation stage includes;
A. Hardening: you and your opponent calmly discuss the objective issues involved in the conflict.
B. Loss of face: your opponent tells your coworkers that you lied to her about how much money was left in the budget that you both have been discussing how to manage. It typically occurs when an individual is accused of lying and would result in attacking the opponent's public personality.
C. Images and coalitions: rather than discussing the issues the goal becomes winning. You try to mobilize your colleagues to support your position.
D. Fragmentation of the enemy: communication with your opponent is ended as winning is no longer possible. The goal becomes outlasting your opponent and destroying her power base.
Suppose an industry has 100 firms, each with a supply curve P = 50 + 10Q . Furthermore, suppose the market demand curve is given by P = 200 - 0.9Q . a. What is the industry supply curve? b. What is the equilibrium price and quantity for this market? c. How many units of output will be produced by a firm operating in this market with a marginal cost function, MC = 130Q
Answer: See explanation
Explanation:
The industry supply curve will be the supply curve given multiplied by the total number of firms. This will be:
P = 50 + 0.1Q
Check: since Q = 100
P = 50 + 10/100Q
P = 50 + 0.1Q
To get the Equilibrium price and quantity, we've to equate the market demand curve and supply. This will be:
Market demand = P = 200 - 0.9Q
Market Supply = P = 50 + 0.1Q
Therefore,
200 - 0.9Q = 50 + 0.1Q
200 - 50 = 0.1Q + 0.9Q
150 = Q
Equilibrium quantity = 150 units
Since P = 50 + 0.1Q
P = 50 + 0.1(150)
P = 50 + 15
P = 65
Equilibrium price is 65.
The units of output that will be produced by a firm operating in this market with a marginal cost function, MC = 130Q will be 2.
In this exhibit (Simultaneous Shifts in Demand and Supply), D1 and S1 are original supply and demand curves, and S2 and D2 are new curves. In this market, the change in supply may have resulted from: Select one: a. wage increases for the workers. b. an improvement in technology. c. a decrease in the number of sellers. d. all of the above.
Answer:
Simultaneous Shifts in Demand and Supply
In this market, the change in supply may have resulted from:
b. an improvement in technology.
Explanation:
An improvement in technology is the only correct option that can cause the change in supply from S1 to S2. Wage increases for the workers increase the cost of production, which can decrease sales volume. Similarly, a decrease in the number of sellers will most likely reduce sales volume instead of increasing it.
Testbank Multiple Choice Question 110 On January 1, 2021, Marigold Corp. redeemed its 15-year bonds of $6920000 par value for 101. They were originally issued on January 1, 2009 at 91 with a maturity date of January 1, 2024. Marigold amortizes discounts and premiums using the straight-line method. What amount of loss should Marigold recognize on the redemption of these bonds (ignore taxes)
Answer:
$193,760
Explanation:
Calculation to determine the amount of loss should Marigold recognize on the redemption of these bonds
Bonds edemption=[($6,920,000*1.01)-$6,920,000]+[(100%-91%*$6,920,000)-((100%-91%*$6,920,000)/15 years*12)]
Bonds redemption=[($6,989,200-$6,920,000]+[(9%*$6,920,000)-((9%*$6,920,000)/15 years*12)]
Bonds redemption=$69,200+[($622,800-($622,800/15 years*12)]
Bonds redemption=$69,200+[($622,800-$498,240)]
Bonds redemption=$69,200+$124,560
Bonds redemption=$193,760
Therefore the amount of loss should Marigold recognize on the redemption of these bonds is $193,760
At December 31, 2021, Swifty Company had a credit balance of $15,400 in Allowance for Doubtful Accounts. During 2022, Swifty wrote off accounts totaling $12,800. One of those accounts of $3,000 was later collected. At December 31, 2022, an aging schedule indicated that the balance in Allowance for Doubtful Accounts should be $30,600. Prepare journal entries to record the 2022 transactions of Swifty Company.
Answer:
Allowance for doubtful accounts Dr $12,800
Accounts receivables Cr $12,800
(To record amount written off)
Accounts receivables Dr $3,000
Allowance for doubtful accounts Cr $3,000
(To reverse writeoff)
Cash Dr $3,000
Accounts receivables Cr $3,000
(To record collection of writeoff)
Bad debt expenses Dr $25,000
Allowance for doubtful accounts Cr $25,000
Workings:
Balance before adjustment in Allowance $5,600
for doubtful accounts (15,400-12,800+3,000)
Less: Required amount $30,000
Additional provision required $25,000
A municipal power plant uses natural gas from an existing pipeline at an annual cost of $10,000 per year. A new pipeline would initially cost $35,000, but it would reduce the annual cost to $4000 per year. Assume an analysis period of 20 years and no salvage value for either pipeline. The interest rate is 7%. Using the equivalent uniform annual cost (EUAC), should the new pipeline be built
Answer: EUAC of new pipeline of $7,303.75 is less than the $10,000 of old pipeline so new pipeline should be built.
Explanation:
Equivalent Uniform Annual cost can be calculated as:
= Reduction in annual cost + (Initial Cost/ Present value interest factor of annuity, 7%, 20 years)
= 4,000 + (35,000 / 10.5940)
= 4,000 + 3,303.75
= $7,303.75
3. _________ is a type of form used to obtain important feedback from customers by
asking them to answer checklist.
A. Survey form
B. Bio-data form
C. Interview form
D. Health check form
4. This social benefit from patronizing products and services project how customers
wants to be ________ by others.
A. admired
B. accepted
C. perceived
D. acknowledged
5. Marketing companies exert effort to consider positive feelings provided to customers
in order to create __________ connection with them.
A. Social
B. Emotional
C. Functional
D. Economical
Answer:
3. Survey form
4. accepted
5. emotional
Explanation:
_____are short-term, specific targets which are attainable, measurable, and controllable.
A. Objective.
B. Policies.
C. Goal.
D. Standard operating procedures.
Answer:
A. Objective.
Explanation:
The objectives is the thing or the target that should be achieved it can be short term also there is some particular targets that could be achieved, measured and controlled
So according to the given situation, the correct option is a
Hence, the same would be considered
Strongheart Enterprises anticipated selling 27,000 units of a major product and paying sales commissions of $6 per unit. Actual sales and sales commissions totaled 27,500 units and $171,400, respectively. If the company used a flexible budget for performance evaluations, Strongheart would report a cost variance of: Multiple Choice $6,400F. $9,400F. None of the answers is correct. $9,400U. $6,400U.
Answer:
Flexible budget cost variance= $6,400 unfavorable
Explanation:
To calculate the flexible budget cost variance, we need to use the following formula:
Flexible budget cost variance= (standard costs*actual quantity) - actual costs
Flexible budget cost variance= (6*27,500) - 171,400
Flexible budget cost variance= 165,000 - 171,400
Flexible budget cost variance= $6,400 unfavorable
Wildhorse Co. is a full-service manufacturer of surveillance equipment. Customers can purchase any combination of equipment, installation services, and training as part of Wildhorse’s security services. Thus, each of these performance obligations are separate with individual standalone selling prices. Laplante Inc. purchased cameras, installation, and training at a total price of $88,100. Estimated standalone selling prices of the equipment, installation, and training are $81,000, $6,300, and $2,700, respectively. How should the transaction price be allocated to the equipment, installation, and training?
WeAnswer:
Equipment $79,290
Installation $6,167
Training $2,643
Explanation:
Calculation to determine How should the transaction price be allocated to the equipment, installation, and training
First step is to calculate the total estimated fair value
Total estimated fair value = $81,000+$6,300+$2,700
Total estimated fair value =$90,000
Now let calculate How should the transaction price be allocated
Equipment= ($81,000 ÷ $90,000)*$88,100
Equipment= 90%*$88,100
Equipment=$79,290
Installation=($6,300 ÷ $90,000)* $88,100
Installation= 7%*$88,100
Installation=$6,167
Training=($2,700 ÷ $90,000)*$88,100
Training= 3%*$88,100
Training=$2,643
TOTAL
Equipment=$81,000
Installation=$6,300
Training=$2,700
Total $90,000
Equipment=$79,290
Installation=$6,167
Training=$2,643
Total $88,100
Equipment=90%
Installation=7%
Training=3%
Total 100%
Therefore the transaction price that should be allocated to the equipment, installation, and training are :
Equipment $79,290
Installation $6,167
Training $2,643
Select the true statement about default risk. It is the risk that the bond's price will fall below its par value. Bondholders have a degree of legal protection against default risk, but it is not comprehensive. Default risk relates to a bond's periodic coupon payments, but not to its maturity payment. Bondholders are guaranteed to be repaid in full if a company enters bankruptcy.
Answer:
Bondholders have a degree of legal protection against default risk, but it is not comprehensive.
Explanation:
A bond can be defined as a debt or fixed investment security, in which a bondholder (investor or creditor) loans an amount of money to the bond issuer (government or corporations) for a specific period of time. The bond issuer are expected to return the principal (face value) at maturity with an agreed upon interest (coupon), which are paid at fixed intervals.
The par value of a bond is its face value and it comprises of its total dollar amount as well as its maturity value. Also, the par value of a bond gives the basis on which periodic interest is paid. Thus, a bond is issued at par value when the market rate of interest is the same as the contract rate of interest. This simply means that, a bond would be issued at par (face) value when the bond's stated rated is significantly equal to the effective or market interest rate on the specific date it was issued.
In Economics, bonds could either be issued at discount or premium. A bond that is being issued at a discount has its stated rate lower than the market interest rate, on the specific date of issuance while a bond that is issued at a premium, has its stated rate higher than the market interest rate on the specific date of issuance.
Default risk in bonds refer to the risk that a bond issuer (borrower) is unable to pay the principal or interest agreed upon in the contract with the bondholder (lender) in a timely manner.
Hence, the true statement about default risk is that bondholders have a degree of legal protection against default risk, but it is not comprehensive.
The true statement about default risk is: Bondholders have a degree of legal protection against default risk, but it is not comprehensive, Hence option B is correct.
Default risk refers to the risk that a borrower, such as a company or government, will be unable to meet its financial obligations, including the payment of interest and the repayment of principal on a bond.
While bondholders may have some legal protections in place, such as collateral or contractual agreements, these protections are not always comprehensive and may vary depending on the specific bond and its terms.
Therefore, bondholders face the risk of potential default, even though they may have some level of legal protection.
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Carter Corporation's partial income statement after its first year of operations is as follows: Income before income taxes $3,750,000 Income tax expense Current $1,035,000 Deferred 90,000 1,125,000 Net income $2,625,000 Carter uses the straight-line method of depreciation for financial reporting purposes and accelerated depreciation for tax purposes. The amount charged to depreciation expense on its books this year was $2,400,000. No other differences existed between book income and taxable income except for the amount of depreciation. Assuming a 20% tax rate, what amount was deducted for depreciation on the corporation's tax return for the current year
Answer: $2,850,000
Explanation:
The amount was deducted for depreciation on the corporation's tax return for the current year will be calculated as:
Defered income tax = $90,000
Tax rate = 20%
We will calculate the difference between the book income and the taxable income which will be:
= $90000 ÷ 20%
= $90000 × 100/20
= $90000 × 5
= $450000
Therefore, the amount that was deducted for depreciation on the corporation's tax return for the current year will be:
= $2,400,000 + $450,000
= $2,850,000
Miramar Industries manufactures two products, A and B. The manufacturing operation involves three overhead activities - production setup, material handling, and general factory activities. Miramar uses activity-based costing to allocate overhead to products. An activity analysis of the overhead revealed the following estimated costs and activity bases for these activities:
Activity Cost Activity Base
Production Setup $250,000 Number of setups
Material Handling $150,000 Number of parts
General Overhead $80,000 Number of direct labor hours
Each productâs total activity in each of the three areas are as follows:
Product A Product B
Number of setups 100 300
Number of parts 40,000 20,000
Number of direct labor hours 9,000 12,000
What is the activity rate for General Overhead?
A. $4.00 per direct labor hour
B. $3.81 per direct labor hour
C. $6.71 per direct labor hour
D. $4.20 per direct labor hour
Answer:
General overhead= $3.81 per direct labor hour
Explanation:
Given the following information:
General Overhead $80,000 Number of direct labor hours
Number of direct labor hours 9,000 12,000= 21,000
To calculate the activity rate, we need to use the following formula:
Activity rate= estimated costs / total amount of allocation rate
General Overhead= 80,000 / 21,000
General overhead= $3.81 per direct labor hour
Vaughn Manufacturing records purchases at net amounts. On May 5 Vaughn purchased merchandise on account, $79000, terms 2/10, n/30. Vaughn returned $6700 of the May 5 purchase and received credit on account. At May 31 the balance had not been paid. The amount to be recorded as a purchase return is
Answer:
Vaughn Manufacturing
Purchases at net value ($79000-2%) $77,420.00
Less: Purchase return ($6700-2%) $6,566.00
Net payable $70,854.00
The amount to be recorded as a purchase return is $6,566. When net method is used all purchase is recorded assuming discount will be availed. Similarly when goods are returned that amount is also adjusted with discount.
The Sheridan Acres Inn is trying to determine its break-even point during its off-peak season. The inn has 50 rooms that it rents at $36 a night. Operating costs are as follows:
Salaries $4,000 per month
Utilities $1,500 per month
Depreciation $1,300 per month
Maintenance $832 per month
Maid service $6 per room
Other costs $12 per room
Required:
a. Determine the inn's break-even point in number of rented rooms per month.
b. Determine the inn's break-even point in dollars.
Answer:
Results are below.
Explanation:
First, we need to calculate the unitary variable cost and the fixed costs:
Unitary variable cost= 6 + 12= $18
Total fixed costs= 4,000 + 1,500 + 1,300 + 832
Total fixed costs= $7,632
Now, to calculate the break-even point both 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= 7,632 / (36 - 18)
Break-even point in units= 424 per month
Break-even point (dollars)= fixed costs/ contribution margin ratio
Break-even point (dollars)= 7,632 / (18/36)
Break-even point (dollars)= $15,264
12. Allen Steel Company is considering whether to build a new mill. If the interest rate falls, a. the present value of the returns from the mill will fall, so Allen will be less likely to build the mill. b. the present value of the returns from the mill will fall, so Allen will be more likely to build the mill. c. the present value of the returns from the mill will rise, so Allen will be less likely to build the mill. d. the present value of the returns from the mill will rise, so Allen will be more likely to build the mill.
Answer:
Allen Steel Company is considering whether to build a new mill. If the interest rate falls,
d. the present value of the returns from the mill will rise, so Allen will be more likely to build the mill.
Explanation:
A fall in the interest rate payable by Allen Steel Company will increase the present value of the returns that it can generate from building a new mill financed with debt. This is an incentive for investors to build more capital assets to increase productive activities in the economy. This is why the fall will most likely encourage Allen to build the mill.
In late 2020, the Nicklaus Corporation was formed. The corporate charter authorizes the issuance of 6,000,000 shares of common stock carrying a $1 par value, and 2,000,000 shares of $5 par value, noncumulative, nonparticipating preferred stock. On January 2, 2021, 4,000,000 shares of the common stock are issued in exchange for cash at an average price of $10 per share. Also on January 2, all 2,000,000 shares of preferred stock are issued at $20 per share. Required: 1. Prepare journal entries to record these transactions. 2. Prepare the shareholders' equity section of the Nicklaus balance sheet as of March 31, 2021. (Assume net income for the first quarter 2021 was $1,600,000.)
Answer:
1. Jan-02
Dr Cash $ 40,000,000.00
Cr Common stock $ 4,000,000.00
Cr Paid-in capital – excess of par, common $ 36,000,000.00
Jan 02
Dr Cash $ 40,000,000.00
Cr Preferred stock $ 10,000,000.00
Cr Paid-in capital – excess of par, preferred $ 30,000,000.00
2. $81,600,000.00
Explanation:
1. Preparation of the journal entries to record these transactions
Jan-02
Dr Cash (4,000,000 x $10) $ 40,000,000.00
Cr Common stock ($1 par x 4,000,000 shares) $ 4,000,000.00
Cr Paid-in capital – excess of par, common $ 36,000,000.00
Jan 02 Cash (amount received) (2,000,000 x $20) $ 40,000,000.00
Preferred stock ($5 par x 2,000,000 shares) $ 10,000,000.00
Paid-in capital – excess of par, preferred (difference) $ 30,000,000.00
2. Preparation of the shareholders' equity section of the Nicklaus balance sheet as of March 31, 2021.
Nicklaus Corporation
Balance Sheet-Shareholders' Equity Section
September 30, 2018
Shareholders' equity
Preferred stock, $5 par, authorized 2,000,000 shares, issued and outstanding 2,000,000 shares$ 10,000,000
Common stock, $1 par, authorized 6,000,000 shares, issued and outstanding 4,000,000 shares $ 4,000,000.00
Paid-in capital – excess of par $ 66,000,000.00
Retained earnings $ 1,600,000.00
Total shareholders' equity$ 81,600,000.00
Anchor Company purchased a manufacturing machine with a list price of $91,000 and received a 2% cash discount on the purchase. The machine was delivered under terms FOB shipping point, and transportation costs amounted to $3,400. Anchor paid $4,800 to have the machine installed and tested. Insurance costs to protect the asset from fire and theft amounted to $6,200 for the first year of operations. What is the cost of the machine
Answer:
$103,580
Explanation:
The Cost of Machine according to IAS 16 include Purchase costs less trade discounts and rebates plus any direct costs incurred to put the asset in the location and condition intended for use by management.
Calculation of the Cost of Machine
Purchase Price $91,000
Cash discount $91,000 x 2% ($1,820)
Transport Cost $3,400
Installation and testing costs $4,800
Insurance costs $6,200
Total Cost $103,580
Therefore,
the cost of the machine is $103,580
Scenario: You are in the market for a new car. You do not have a trade-in, but you have saved $3,000 toward a down payment. You currently earn $3,750.00 gross monthly income, of which 28% is withheld for various deductions. You have heard of the 20% rule of thumb, but want to limit your payments to no more than 18% of your net monthly income because of other debt commitments. You currently have a credit score of 685. You expect to drive the car an average 15,000 miles per year.
You're considering purchasing a used-rather than new car. This strategy offers several advantages. Which of the following is not an advantage of purchasing a used car?
A. The reduced down payment required for the purchase
B. A lack of knowledge and confidence in the mechanical condition of the car
C. The price of the automobile
D. Avoidance of the vehicle's significant decrease in value due to depreciation
Answer:
B. A lack of knowledge and confidence in the mechanical condition of the car.
Explanation:
One need to be expert in analyzing a car condition in order to buy a used car. The used car is mechanically weak and the buyer should have good knowledge for the mechanical condition of the car. This is a disadvantage if a person has lack of knowledge in car mechanic when in a situation to buy a used car.
Islander Inc. is a new firm in a rapidly growing industry. The company would be paying $2.50 in dividend next year. After that the company intends to grow the dividend at a 8% rate annually over a long period. You plan to buy the stock now and expect to sell it for $48.23 three years from now. What price must you pay now if your required rate of return is 10%
Answer: $42.93
Explanation:
To solve this question goes thus:
Year 1:
Cash flow = $2.50
PV at 10% = 0.9091
Present value = $2.27
Year 2:
Cash flow = $2.70
PV at 10% = 0.8264
Present value = $2.23
Year 3:
Cash flow = $2.92
PV at 10% = 0.7513
Present value = $2.19
Price at Year 3:
Cash flow = $48.23
PV at 10% = 0.7513
Present value = $36.24
Price to be paid = $2.27 + $2.23 + $2.19 + $36.24 = $42.93
How does a realistic market potential estimate affect small business success?
Answer:
Estimating market size is a crucial first step in the development of any startup or small business. And it really doesn't matter what industry you're in — or want to be in — getting an accurate picture of your market size reveals insights that can drive both the present and future success of your business.
Swifty Corporation had a 1/1/20 balance in the Allowance for Doubtful Accounts of $35500. During 2020, it wrote off $23000 of accounts and collected $8000 on accounts previously written off. The balance in Accounts Receivable was $780000 at 1/1 and $960000 at 12/31. At 12/31/20, Swifty estimates that 5% of accounts receivable will prove to be uncollectible. What should Swifty report as its Allowance for Doubtful Accounts at 12/31/20
Answer:
$48,000
Explanation:
What should Swifty report as its Allowance for Doubtful Accounts at 12/31/20?
Allowance for Doubtful Accounts 12/31/20 = Accounts receivable at 12/31 * Uncollectible percentage of Accounts receivable
Allowance for Doubtful Accounts 12/31/20 = $960,000 * 5%
Allowance for Doubtful Accounts 12/31/20 = $48,000