Answer:
Estimated gross profit 767,840 627,760 297,000
Explanation:
Compi for the estimated gross profit that would be recognized during each year of construction period.
2017 2018 2019
Price $901,000 $901,000 $901,000
Costs to date $255,420 $433,620 $604,000
Estimated costs to 338,580 160,380 0
Estimated Total cost 133,160 273,240 604,000
Estimated gross profit 767,840 627,760 297,000
Therefore the estimated gross profit that would be recognized during each year of construction period will be :
2017 2018 2019
767,840 627,760 297,000
Altex Inc. manufactures two products: car wheels and truck wheels. To determine the amount of overhead to assigning to each product line, the controller, Robert Hermann, has developed the following information.
Car Truck
Estimated wheels produced 42,000 11,000
Direct labor hours per wheel 1 3
Total estimated overhead costs for the two product lines are $863,000.
a. Calculate the overhead rate.
b. Compute the overhead cost assigned to the car wheels and truck wheels, assuming that direct labor hours are used to allocate overhead costs.
Answer:
Explanation:
Answer:
Total
Units Produced
42000
15000
Hours per unit
1
3
Total Hours
42000
45000
87000
So total hours required = 87000 hours
Now we will find overhead rate per hour
Total Overhead= $846.000
Overhead Rate per Hour
=$ 846000/87000
= $9.72 per Hrs.
overhead rate per hour =$ 9.72 per hour
_______________________________________
Car
Wheel
Total Hrs.
42000
45000
Hourly Rate
$9.72
$9.72
Allocated Overhead
$408414.00
$437586
_________________________________________________
Activity
No. of
Activity
Overhead Cost
Cost Per Activity
Setting up machines
1000
$215,000
$215.00
Assembling
87000
$347,000
$3.99
Inspection
1200
$284,000
$236.67
Activity
Car=A
Truck =B
Rate=C
Total $ Car=A*C
Total $ Truck=B*C
Setting up machines
200
800
$215.00
$43,000.00
$172,000.00
Assembling
42000
45000
$3.99
$167,517.24
$179,482.76
Inspection
100
1100
$236.67
$23,666.67
$260,333.33
$234,183.91
$611,816.09
Globe Services plans on closing its doors after one more year. During its last year in business, the firm expects to generate a cash flow of $67,000 if the economy booms and $44,000 if it does not. The probability of a boom is 30 percent. The firm has debt of $53,400 that is due in one year. That debt has a market value of $45,800 today. Ignore taxes. The current promised return on debt is __________ percent, and the expected return on debt is __________ percent.
Answer and Explanation:
The computation is shown below:
Current promised return on debt is
= $53,400 ÷ $45,800 - 1
= 16.60%
And, the expected return on debt is
The expected amount would be
= $53,400 × 30% + $44,000 × 70%
= $16,020 + $30,800
= $46,820
Now the expected return on debt is
= $46,820 ÷ $45,800 - 1
= 2.23%
The following statement(s) regarding Utility Functions is/are true: Utility Functions are usually a function of wages. Utility increases at a decreasing rate. The Utility Function chosen does not matter. They will all yield the same result.
Answer:
Utility increases at a decreasing rate.
Explanation:
Utility is the total satisfaction derived from consumptjon.
The utility function measures the total satisfaction derived from consumptjon.
Utility increases at a decreasing rate.
This can be illustrated with an example.
Imagine I am coming from a desert with no access to drinking water. I am very thirsty. The satisfaction I would derive from the first cup of water would be the highest. After my first cup, the utility I would derive from other cups would be diminishing.
Utility increases at a decreasing rate.
Information regarding utility:Utility refers to the total satisfaction derived from consumption. The utility function determines the total satisfaction derived from consumption. Utility rise at a reducing rate. If the function of the utility is selected so it matters. Also, it does have a similar result.
Find out more information about the yield here: https://brainly.com/question/16898287
Patterson Corporation expects to incur $70,000 of factory overhead and $60,000 of general and administrative costs next year. Direct labor costs at $5 per hour are expected to total $50,000. If factory overhead is to be applied per direct labor hour, how much overhead will be applied to a job incurring 20 hours of direct labor
Answer:
$140
Explanation:
With regards to the above, since the factory overhead is to be applied per direct labor hour
= [$70,000 ÷ ($50,000 ÷ $5) 20 hours]
= $70,000 ÷ 10,000 × 20 hours
= $7 × 20 hours
= $140
Therefore, $120 will be applied to job incurring 20 hours of direct labor
Suppose that instead of an out-of-uniform police officer and his son being in the parking lot when the teenagers arrived. Sally, a parking attendant hired by the store, was in the parking lot being picked up by her daughter. When Sally asked the teenagers to quiet down they assaulted her. Sally's daughter dashed into the store to request that the clerk call the police. The clerk refused and would not let the daughter use the store phone to place the call herself. The daughter then went back out to the parking lot and asked a store customer to call the police using his cell phone. The customer also refused to help. Sally sued the store and the customer
1. Under these facts
2. In her suit against the store the Sally can cite
3. Sally stands in a special relationship to the store customer because
4. Sally is most likely to win her suit against
Answer and Explanation:
1. Given these facts, we can conclude that the store, represented by its employee, did not take responsibility for something that happened in its establishment, even refusing to promote aid to a victim who was a store employee.
2. She can quote Carey v Davis, where Carey, after passing out from sunstroke, did not receive due help from his boss Frank Davis, who dragged him out and left him in the sun, who caused several injuries to his body.
3. She does not have any relationship with the store's customer, who, she did not even know and had no proximity to.
4. She can win the lawsuit against the store, which has proved irresponsible and inhuman.
Whispering Winds Corp. compiled the following financial information as of December 31, 2022: Service revenue $836000 Common stock 186000 Equipment 244000 Operating expenses 736000 Cash 215000 Dividends 60000 Supplies 30000 Accounts payable 111000 Accounts receivable 91000 Retained earnings, 1/1/22 447000 Whispering's assets on December 31, 2022 are:
Answer:
$580,000
Explanation:
The computation of the asset is shown below:
= Equipment + supplies + cash + account receivable
= $244,000 + $30,000 + $215,000 + $91,000
= $580,000
We simply added the four items so that the asset value could be determined
Hence, the asset is $580,000
Port Ormond Carpet Company manufactures carpets. Fiber is placed in process in the Spinning Department, where it is spun into yarn. The output of the Spinning Department is transferred to the Tufting Department, where carpet backing is added at the beginning of the process and the process is completed. On January 1, Port Ormond Carpet Company had the following inventories:
Finished Goods $8,300
Work in Process-Spinning Department 2,000
Work in Process-Tufting Department 2,600
Materials 4,800
Departmental accounts are maintained for factory overhead, and both have zero balances on January 1. Manufacturing operations for January are summarized as follows:
Jan.
1 Materials purchased on account, $82,000
2 Materials requisitioned for use:
Fiber-Spinning Department, $42,600
Carpet backing-Tufting Department, $34,700
Indirect materials-Spinning Department, $3,300
Indirect materials-Tufting Department, $2,900
31 Labor used:
Direct labor-Spinning Department, $26,300
Direct labor-Tufting Department, $17,200
Indirect labor-Spinning Department, $12,500
Indirect labor-Tufting Department, $11,900
31 Depreciation charged on fixed assets:
Spinning Department, $5,300
Tufting Department, $3,100
31 Expired prepaid factory insurance:
Spinning Department, $1,000
Tufting Department, $800
31 Applied factory overhead:
Spinning Department, $22,400
Tufting Department, $18,250
31 Production costs transferred from Spinning Department to Tufting Department, $90,000
31 Production costs transferred from Tufting Department to Finished Goods, $153,200
31 Cost of goods sold during the period, $158,000
Required:
a. Journalize the entries to record the operations, using the dates provided with the summary of manufacturing operations.
b. Compute the January 31 balances of the inventory accounts.
c. Compute the January 31 balances of the factory overhead accounts.
Answer:
Port Ormond Carpet Company
1. Journal Entries:
Jan. 1:
Debit Materials $82,000
Credit Accounts payable $82,000
To record the purchase of materials on account.
Jan. 2:
Debit Work-in-Process - Spinning $42,600
Credit Materials $42,600
To record the materials requisitioned.
Jan. 2:
Debit Work-in-Process -Tufting $34,700
Credit Materials $34,700
To record carpet backing
Jan. 2:
Debit Overhead - Spinning $3,300
Debit Overhead - Tufting $2,900
Credit Materials $6,200
To record indirect materials used.
Jan. 31:
Debit Work-in-Process - Spinning $26,300
Debit Work-in-Process - Tufting $17,200
Credit Factory labor $43,500
To record direct labor costs.
Jan. 31:
Debit Overhead - Spinning $12,500
Debit Overhead - Tufting $11,900
Credit Factory labor $24,400
To record indirect labor costs.
Jan. 31:
Debit Overhead - Spinning $5,300
Debit Overhead - Tufting $3,100
Credit Factory Depreciation $8,400
To record depreciation costs.
Jan. 31:
Debit Overhead - Spinning $1,000
Debit Overhead - Tufting $800
Credit Factory Insurance $1,800
To record insurance costs.
Jan. 31:
Debit Work-in-Process - Spinning $22,400
Debit Work-in-Process - Tufting $18,250
Credit Factory Overhead $40,650
To record overhead costs applied.
Jan. 31:
Debit Work-in-Process - Tufting $90,000
Credit Work-in-Process - Spinning $90,000
To record the transfer to Tufting department.
Debit Finished Goods Inventory $153,200
Credit Work-in-Process- Tufting $153,200
To record the transfer to Finished Goods.
Jan. 31:
Debit Cost of Goods Sold $158,000
Credit Finished Goods $158,000
To record the cost of goods sold.
2. January 31 balances of the inventory accounts:
Finished Goods = $3,500
Work-in-Process - Spinning = $3,300
Work-in-Process - Tufting = $9,550
Materials = $600
3. Factory Overhead Accounts- Spinning:
Account Titles Debit Credit
Jan. 31 Materials (Indirect) 3,300
Indirect labor 12,500
Depreciation exp. 5,300
Factory insurance 1,000
Applied overhead 22,400
Overapplied overhead 300
Factory Overhead Accounts- Tufting:
Account Titles Debit Credit
Materials (Indirect) $2,900
Indirect labor 11,900
Depreciation expenses 3,100
Insurance expense 800
Applied overhead -WIP-Tufting 18,250
Underapplied overhead 450
Explanation:
a) Data and Calculations:
January 1 Inventories:
Finished Goods = $3,500
Work in Process- Spinning = $2,000
Work in Process - Tufting = $2,600
Materials = $4,800
Finished Goods
Account Titles Debit Credit
Beginning balance $8,300
Work-in-Process-Tufting 153,200
Cost of Goods Sold $158,000
Ending balance 3,500
Work-in-Process - Spinning
Account Titles Debit Credit
Beginning balance $2,000
Materials 42,600
Direct labor 26,300
Applied overhead 22,400
Work-in-Process -Tufting $90,000
Ending balance 3,300
Work-in-Process - Tufting
Account Titles Debit Credit
Beginning balance $2,600
Carpet backing 34,700
Direct labor 17,200
Applied overhead 18,250
WIP- Spinning 90,000
Finished Goods $153,200
Ending balance 9,550
Cost of Goods Sold
Finished Goods $158,000
Materials
Account Titles Debit Credit
Beginning balance $4,800
Accounts payable 82,000
Work-in-Process - Spinning $42,600
Work-in-Process - Tufting 37,400
Manufacturing overhead- Spinning 3,300
Manufacturing overhead- Tufting 2,900
Ending balance 600
Selected transactions from the journal of Metlock Inc. during its first month of operations are presented here:
Date Account Titles Debit Credit
Aug. 1 Common Stock 9,000
Cash 9,000
Aug. 10 Cash 1,400
Service Revenue 1,400
Aug. 12 Equipment 5,600
Cash 1,540
Notes Payable 4,060
Aug. 25 Accounts Receivable 2,570
Service Revenue 2,570
Aug. 31 Cash 750
Accounts Receivable 750
Required:
Post the transactions to T-accounts.
(Post in same order as question)
Answer:
Metlock, Inc.
T-accounts:
Common Stock
Date Account Titles Debit Credit
Aug. 1 Common Stock 9,000
Cash
Date Account Titles Debit Credit
Aug. 1 Common Stock 9,000
Aug. 10 Service Revenue 1,400
Aug. 12 Equipment 1,540
Aug. 31 Accounts receivable 750
Service Revenue
Date Account Titles Debit Credit
Aug. 10 Cash 1,400
Aug. 25 Accounts receivable 2,570
Equipment
Date Account Titles Debit Credit
Aug. 12 Cash 1,540
Notes Payable 4,060
Accounts Receivable
Date Account Titles Debit Credit
Aug. 25 Service Revenue 2,570
Aug. 31 Cash 750
Explanation:
Common stock of $9,000 was posted on the debit side as it appeared first. This follows the normal order of recording transactions in the journal. The accounts to be debited are recorded first before the accounts to be credited. However, this entry appears abnormal. Cash of $9,000 should have appeared first in the journal before the Common Stock. Whichever is the correct interpretation, all the journal entries have been posted to the T-accounts accordingly.
Analyze each of the characteristics in considering the indicated test for depen- dency as a qualifying child or qualifying relative. In the last two columns, after each listed test (e.g., gross income), state whether the particular test is Met, Not Met, or Not Applicable (NA).
Characteristic Qualifying Child Test Qualifying Relative Test
a. Taxpayer's son has gross income of $7,000 Gross income Gross income
b. Taxpayer's niece has gross income of $3,000 Gross income Gross income
c. Taxpayer's uncle lives with him Relationship Relationship
d. Taxpayer's daughter is 25 and disabled Age Age
e. Taxpayer's daughter is age 18, has gross income Residence, Gross Gross income
of $8,000, and does not live with him income
f. Taxpayer's cousin does not live with her Relationship, Relationship Residence g. Taxpayer's brother does not live with her Residence Relationship
h. Taxpayer's sister has dropped out of school, is age 17 Relationship, Relationship
and lives with him Residence, Age
i. Taxpayer's older nephew is age 23 and a full-time student Relationship, Age Relationship
j. Taxpayer's grandson lives with her and has gross income Relationship, Relationship,
of $7,000 Residence Gross income
Answer:
Test for dependency as a qualifying child or qualifying relative:
Qualifying Child Test Qualifying Relative Test
a. Gross income (N/A) Gross income (Not Met)
b. Gross income (N/A) Gross income (Met)
c. Relationship (Not Met) Relationship (Met)
d. Age (Met) Age (N/A)
e. Residence (Not Met) Gross Income (N/A) Gross income (Not Met)
f. Relationship (Not Met), Relationship (Not Met) Residence (Not Met)
g. Residence (Not Met) Relationship (Not Met)
h. Relationship (Met) Relationship (Met)
Residence (Met) Age (Met)
i. Relationship (Met), Age (Met) Relationship (Met)
j. Relationship (Met) Relationship (Met)
Residence (Met) Gross income (Not Met)
Explanation:
Before a child can qualify as a dependent child, the child must meet six qualifying IRS tests for relationship, age, residency, support, joint return, and citizenship. A qualifying child cannot file jointly with the taxpayer unless to claim a refund. To qualify as a dependent relative, the relative is expected to be resident in the taxpayer's household throughout the year or be related to the taxpayer in some ways.
State and EXPLAIN three methods of paying workers
Answer:
three methods employers use to pay the employees are salary, commission, and hourly wage.
Explanation:
salary is a fixed amount that you get for working per month
commmission is getting a percentage of the total that you sell
hourly wage is getting paid for each hour that you work
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Medtronic, Inc., is a medical technology company that competes for customers with St. Jude Medical S.C., Inc. James Hughes worked for Medtronic as a sales manager. His contract prohibited him from working for a competitor for one year after leaving Medtronic. Hughes sought a position as a sales director for St. Jude. St. Jude told Hughes that his contract with Medtronic was unenforceable and offered him a job. Hughes accepted. Medtronic filed a suit, alleging wrongful interference. Which type of interference was most likely the basis for this suit?
Medtronic, Inc., is a medical technology company that competes for customers with St. Jude Medical S.C., Inc. James Hughes worked for Medtronic as a sales manager. His contract prohibited him from working for a competitor for one year after leaving Medtronic.
1. Is the clause in this case commonly known as a non-compete clause?
2. Hughes sought a position as a sales director for St. Jude. St. Jude told Hughes that his contract with Medtronic was unenforceable and offered him a job. Hughes accepted. Medtronic filed a suit, alleging wrongful interference. What are the elements of the tort of wrongful interference with a contractual relationship?
A.There is a contract between two parties/ One party is seeking a greater market share for their product/ A third party knows the contract existsone party is targeting the others' customers/ A third party is inducing another to break a contract).
B. (There is a contract between two parties/ One party is seeking a greater market share for their product/ A third party knows the contract existsone party is targeting the others' customers/ A third party is inducing another to break a contract).
C. (There is a contract between two parties/ One party is seeking a greater market share for their product/ A third party knows the contract existsone party is targeting the others' customers/ A third party is inducing another to break a contract).
3. Medtronic is suing for wrongful interference with a _______.
4. Who are the parties to the initial contract?
5. _____is the third party who knew about the contract.
6. St. Jude learned about the contract and non-compete clause between Hughes and Medtronic from _____.
7. It is _____ that St. Jude intentionally induced Hughes to breach his contract with Medtronic.
8. St. Jude ______before he left Medtronic.
9. What did St. Jude represent regarding the noncompete clause?
10. Was the noncompete clause enforceable?
11. Did it matter if the clause was unenforceable?
12. Based on these facts, does it appear that St. Jude intentionally induced Hughes to break his contract with Medtronic?
13. Is Hughes liable for intentional interference with a contract?
14. Why?
15. Hughes is _______ to be held liable for breach of contract.
16. What if the effects were different?
17. _____ would be another factor the courts would consider.
Answer:
1. Is the clause in this case commonly known as a non-compete clause?
Yes, this is a non-compete clause. Hughes's contract prohibited him from working for a competitor for one year after leaving Medtronic, and St. Jude is a competitor with Medtronic.
2. Hughes sought a position as a sales director for St. Jude. St. Jude told Hughes that his contract with Medtronic was unenforceable and offered him a job. Hughes accepted. Medtronic filed a suit, alleging wrongful interference. What are the elements of the tort of wrongful interference with a contractual relationship?
All the options given (A, B and C) are the same.
The three elements are for determining wrongful interference are:
A valid, enforceable contract must exist between two parties. A third party must know that this contract exists. The third party must intentionally induce a party to breach the contract.3. Medtronic is suing for wrongful interference with a AN EMPLOYEE.
4. Who are the parties to the initial contract?
Medtronic and Hughes.
5. ST. JUDE is the third party who knew about the contract.
6. St. Jude learned about the contract and non-compete clause between Hughes and Medtronic from HUGHES.
7. It is TRUE that St. Jude intentionally induced Hughes to breach his contract with Medtronic.
8. St. Jude OFFERED HUGHES A BEW JOB WITH A BETTER SALARY before he left Medtronic.
9. What did St. Jude represent regarding the noncompete clause?
That it was unenforceable
10. Was the noncompete clause enforceable?
Yes11. Did it matter if the clause was unenforceable?
No
12. Based on these facts, does it appear that St. Jude intentionally induced Hughes to break his contract with Medtronic?
Yes, that is why we call it wrongful interference.
13. Is Hughes liable for intentional interference with a contract?
No
14. Why?
because he was a party in the original contract.
15. Hughes is NOT to be held liable for breach of contract.
16. What if the effects were different?
If Hughes had been informed that the noncompete clause was valid, then it wouldn't be wrongful interference.
17. If HUGHES HAD QUITTED MEDTRONIC BEFORE GOING TO SEEK ANOTHER JOB TO ST. JUDE IT it would be another factor the courts would consider.
The U.S. Supreme Court hears cases that involve A. Tort cases B. Criminal cases C. Civil cases D. Constitutional cases
During its first year in business, Comfy Home accounted for its inventory using the last in first out (LIFO) method. In the second year of business, Tenisa asks the accountant if the company can switch to first in first out (FIFO) because she recently learned FIFO will tend to increase both the value of assets and net income. The accountant tells Tenisa that US GAAP allows a company to choose its inventory valuation method as long as it doesn't change over time without a justifiable reason. This is an example of the principle of:________
a. Conservatism.
b. Relevance.
c. Consistency.
d. Reliability.
Answer:
Consistency principle
Explanation:
Accounting principles are defined as the general rules of.axcpunting that businesses are expected to follow when reporting financial information.
Accounting principles include:
- Accrual principle
- Conservatism principle
- Consistency principle
- Cost principle
- Economic entity principle
- Full disclosure principle
- Going concern principle
- Matching principle
- Materiality principle
- Monetary unit principle
- Reliability principle
- Revenue recognition principle
- Time period principle
Consistency principle requires one the continue using an accounting method consistently for future accounting periods so that information can be easily comparable.
In the given scenario the accountant tells Tenisa that US GAAP allows a company to choose its inventory valuation method as long as it doesn't change over time without a justifiable reason.
This is an example of consistency principle
Tam Worldly's weekly gross earnings for the present week were $2,000. Worldly has two exemptions. Using the wage bracket withholding table in Exhibit 2
with a $75 standard withholding allowance for each exemption, what is Worldly's federal income tax withholding? If required, round your answer to two
decimal places.
Answer: $391.71
Explanation:
Tam earned $2,000 for the week.
There are two exemptions with each of them valued at a $75 allowance.
Net earnings = 2,000 - (75 * 2)
= $1,850
Based on the table, this falls under the $1,533 to $3,202 bracket.
Federal income tax withholding is:
= 302.95 + 28% * (1,850 - 1,533)
= 302.95 + 88.76
= $391.71
The focus groupis meeting on Tuesday.The policy is too old; itneeds to be revised.The management teamwants to hire new warehouse workers.If the customerbuys four or more items from the catalog, offer a price reduction.We should bothfeel comfortable with the final decision.The corporate directorsrecommends a full investigation.The board of directorshas approved the current ethics policy.The regional manager and the district supervisormakes all purchasing decisions.The writer of a well-designed e-mail messageuse correct grammar and spelling.The initial proposals the team submitted how hard they have worked.
Answer:
The verbs in these sentences are:
1. is
2. needs
3. wants
4. buys
5. feel
6. recommend
7. has
8. makes
9. uses
10. shows
Explanation:
Verb is a word in a sentence which describes an action of a person. It is the word which gives understanding about the task performance in a sentence. The verb can be single or multiple in a single sentence. The choice of verb is dependent on the noun. There are 4 forms of verb which are used in a sentence.
Healy Corporation recorded service revenues of $200,000 in 2014, of which $80,000 were on credit and $120,000 were for cash. Moreover, of the $80,000 credit sales for 2014, Healy collected $20,000 cash on those receivables before year-end 2014. The company also paid $40,000 cash for 2014 wages. Its employees also earned another $20,000 in wages for 2014, which were not yet paid at year-end 2014.
Compute the company’s net income for 2014.
Answer:
$140,000
Explanation:
Computation of the company’s net income for 2014.
Using this formula
Net income=Revenue – Expenses
Let plug in the formula
Net income=$200,000 - $40,000+$20,000
Net income= $140,000
Therefore the company’s net income for 2014 will be $140,000
Answer:
$140,000
Explanation:
One employee is in charge of the following activities at a refreshment stand: Activity Activity Time per Customer Greet customer 5 seconds Take order 25 seconds Process order 1.5 minutes Print receipt 30 seconds If the demand rate is 20 customers per hour, what are the flow rate (in customers per hour), utilization, and cycle time (in minutes per customer)
Answer:
A. Flow rate = 20 customers per hour
B. Utilization =0.83
C. Cycle time= 3 minutes per customer
Explanation:
A. Calculation for the flow rate
First step is to calculate the Processing time
Processing time = 5 + 25 + (1.5 ×60) + 30
Processing time=30+90+30
Processing time= 150 seconds
Second step is to calculate the Process capacity
Process capacity = 1/150 ×60 per seconds/minute ×60 per minutes/hour
Process capacity= 24 customers per hour
Now let calculate the Flow rate
Using this formula
Flow rate= Min(Demand, Process capacity)
Let plug in the formula
Flow rate= Min(20, 24)
Flow rate = 20 customers per hour
Therefore the flow rate will be 20 customers per hour
B. Calculation for the utilization
Using this formula
Utilization = Flow rate/Process capacity
Let plug in the formula
Utilization = 20/24
Utilization =0.83
Therefore Utilization will be 0.83
C. Calculation for the Cycle time
Using this formula
Cycle time = 1/Flow rate ×60 per minutes/hour
Let plug in the formula
Cycle time= 1/20 ×60 per minutes/hour
Cycle time= 3 minutes per customer
Therefore the Cycle time will be 3 minutes per customer
Assume you borrow $10,000 today and promise to repay the loan in two payments, one in year 2 and the other in year 4, with the one in year 4 being only half as large as the one in year 2. At an interest rate of 10% per year, the size of the payment in year 4 will be closest to:
Answer:
$4,281.19
Explanation:
The standard notation equation is P = F(P/F, i, n) where the value of the factor is seen in the compound interest factor table.
Let the amount deposited in year 4 be A, we calculate the value of A as follows
10,000 = 2A(P/F, 10%, 2) + A(P/F, 10%, 4)
10,000 = 2A(0.8263) + A(0.683)
2.3358A = 10,000
A = 10,000 / 2.3358
A = 4281.188457915917
A = $4,281.19.
Ikerd Company applies manufacturing overhead to jobs on the basis of machine hours used. Overhead costs are estimated to total $347,325 for the year, and machine usage is estimated at 126,300 hours.For the year, $375,125 of overhead costs are incurred and 132,700 hours are used.
Required:1. Compute the manufacturing overhead rate for the year. (Round answer to 2 decimal places, e.g. 1.25.)2. What is the amount of under- or overapplied overhead at December 31?3. Prepare the adjusting entry to assign the under- or overapplied overhead for the year to cost of goods sold.
Answer:
See below
Explanation:
1. Manufacturing overhead rate
= Total estimated manufacturing overhead ÷ Estimated direct labor hour
= $347,325 ÷ 126,300
= $2.75
2. $132,700 × 2.75 = $364,925
Using the mini case information, write a 250-300-words report presenting potential ethical issues that may arise from expanding into other related fields. In your discussion, proactively strategize about possible expansion by explaining opportunities to promote ethical standards within your organization.
M I N I C A S E
Your employer, a mid-sized human resources management company, is considering expansion into related fields, including the acquisition of Temp Force Company, an employment agency that supplies word processor operators and computer programmers to businesses with temporary heavy workloads. Your employer is also considering the purchase of a Biggerstaff & Biggerstaff (B&B), a privately held company owned by two brothers, each with 5 million shares of stock. B&B currently has free cash flow of $24 million, which is expected to grow at a constant rate of 5%. B&B’s financial statements report marketable securities of $100 million, debt of $200 million, and preferred stock of $50 million.
Answer:
Temp Force required rate of return is 13%
The shareholders of B&B will have rights of dividend in the company's profit.
Explanation:
Temp Force company will require a rate of return based on the risk of the company. The beta factor determines the business risk of the company. For the Temp Force the beta factor is 1.2
Required rate of return of temp Force;
r = Rf + (Rm - Rf) * beta
r = 7% + (12% -7%) * 1.2
r = 13%
B&B shareholders will have voting rights in the company and they are eligible for any dividends declared by the company. They will have rights to elect the director and attend the AGM and EOGM. These rights are given to shareholders to maintain good corporate governance in the company.
Which would an economist say best describes a "trust"?
a. a federal order
b. a public good
c. an illegal combination
d. a feeling in a market
An economist would say that "an illegal combination" best describes a "trust." In economics, a trust refers to an illegal combination or arrangement where multiple companies or entities collude to control and monopolize a particular market or industry, limiting competition and manipulating prices to their advantage. Thus, option c is correct.
In the context of trusts, an illegal combination refers to the collusion or agreement among multiple companies or entities to control and manipulate a market in an anti-competitive manner. It involves practices such as price-fixing, market allocation, and monopolistic behavior that are prohibited by antitrust laws.
The term highlights the unlawfulness and negative implications of such arrangements, as they distort market forces, hinder fair competition, and potentially harm consumers by limiting choices, driving up prices, and suppressing innovation.
Legal measures are in place to prevent and address these illegal combinations to safeguard market integrity and promote fair and open competition.
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Pam retires after 28 years of service with her employer. She is 66 years old and has contributed $57,750 to her employer's qualified pension fund, all of which was taxable when earned. She elects to receive her retirement benefits as an annuity of $5,775 per month for the remainder of her life. Assume that Pam lives 25 years after retiring. What is her gross income from the annuity payments in the twenty-fourth year?
Answer:
$69,300
Explanation:
Calculation for her gross income from the annuity payments in the twenty-fourth year
Using this formula
Gross income Annuity payment =Annuity retirement benefits*Number of month in a year
Let plug in the formula
Gross income Annuity payment =$5,775× 12 payments
Gross income Annuity payment = $69,300
Therefore her gross income from the annuity payments in the twenty-fourth will be $69,300
Suppose that Texas Trucking (TT) has earnings per share of $3.45 and EBITDA of $45 million. TT also has 5 million shares outstanding and debt o $150 million (net of cash). You believe that Oklahoma Logistics and Transport (OLT) is comparable to TT in terms of its underlying business, but OLT has no debt. OLT has a P/E of 12.5 and an enterprise value to EBITDA multiple of 7. Based upon the enterprise value to EBITDA ratio, the value of a share of Texas Trucking is closest to:
Answer:
$33.00 per share
Explanation:
Calculation to the value of a share of Texas Trucking
Using this formula
Enterprise value = EBITDA × multiple
Let plug in the formula
Enterprise value = $45 × 7 = $315
Enterprise value=$315- $150
Enterprise value=$165
Enterprise value=$165/5 million share
Enterprise value = $33.00 per share
Therefore the value of a share of Texas Trucking is closest to:$33.00 per share
Suppose you win a small lottery and have the choice of two ways to be paid: You can accept the money in a lump sum or in a series of payments over time. If you pick the lump sum, you get $2,800 today. If you pick payments over time, you get three payments: $1,000 today, $1,000 1 year from today, and $1,000 2 years from today.
1) At an interest rate of 6% per year, the winner would be better off accepting the (LUMP SUM or PAYMENTS OVER TIME?), since it has the greater present value.
2) At an interest rate of 9% per year, the winner would be better off accepting the (LUMP SUM or PAYMENTS OVER TIME?), since it has the greater present value.
3) Years after you win the lottery, a friend in another country calls to ask your advice. By wild coincidence, she has just won another lottery with the same payout schemes. She must make a quick decision about whether to collect her money under the lump sum or the payments over time. What is the best advice to give your friend?
A) The lump sum is always better.
B) The payments over time are always better.
C) It will depend on the interest rate; advise her to get a calculator.
D) None of these answers is good
Answer:
PAYMENTS OVER TIME
lump sum
c
Explanation:
To know the better option, we have to calculate the present value of the series of cash flows
Present value is the sum of discounted cash flows
Present value can be calculated using a financial calculator
Cash flow in year 0 = $1000
Cash flow in year 1 = $1000
Cash flow in year 2 = $1000
PV when interest rate is 6 = 2833.93
PV when interest rate is 8 = 2783.26
When PV when interest rate is 6 , choose payment over time because it is higher
PV when interest rate is 8 , choose lump sum because it is higher
To find the PV 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
Deborah would like to invest a certain amount of money for two years and considers investing in a one-year bond that pays 4% and a two-year bond that pays 7%. Deborah is considering the following investment strategies:
Strategy A: Buy a one-year bond that pays 4% and in one year buy another one-year bond.
Strategy B: Buy a two-year bond that pays 7% this year and 7% next year.
If the one-year bond that Dina can purchase in one year pays 9%, Deborah will choose:_______
Answer:
If the one-year bond that Dina/Deborah can purchase in one year pays 9%, Deborah will choose:_______
Strategy B.
Explanation:
a) Data:
Interest on one-year bond = 4%
Interest on a two-year bond = 7%
Investment strategies:
Strategy A: Buy a one-year bond that pays 4% and in one year buy another one-year bond.
Strategy B: Buy a two-year bond that pays 7% this year and 7% next year.
b) Although choosing a fixed income investment is a conservative strategy because returns are generated from low-risk securities that pay predictable interest, this strategy may be preferred by Deborah instead of another that pays at variable interest rates. The variable-interest bond will need to pay higher varying interest rates to be attractive to Deborah. Paying 4% in year one and another 9% in year two will not make the bond investment more attractive than a straight two-year bond that pays at 7% per year.
A production department's output for the most recent month consisted of 8,800 units completed and transferred to the next stage of production and 5,800 units in ending Work in Process inventory. The units in ending Work in Process inventory were 50% complete with respect to both direct materials and conversion costs. Calculate the equivalent units of production for the month, assuming the company uses the weighted average method.
Answer:
11,700 units
Explanation:
Calculation for the equivalent units of production for the month, assuming the company uses the weighted average method
Unit completed and transferred to the next stage 8,800 units
Add Unit in ending goods in process inventory 2,900 units
(5,800 units*50%)
Equivalent units of production 11,700 units
(8,800 units+2,900 units)
Therefore the equivalent units of production for the month, assuming the company uses the weighted average method will be 11,700 units
11) Which of the following sections of the statement of cash flows includes activities that increase and decrease long-term liabilities and stockholders' equity? A) the investing activities section B) the financing activities section C) the operating activities section D) the non-cash investing and financing section
Answer:
A) the investing activities section
Explanation:
A financial statement is a written report that quantitatively describes a firm's financial health. Under the financial statements is a cash-flow statement, which is used to record the cash inflow and cash equivalents leaving a business firm.
Cash flow statement, also known as the statement of cash flows, contains financial information about operating, financial and investing activities.
1. Operating cash flow: all cash generated from the business activities of an organization.
2. Financing cash flow: all payments made by an organization and profits from issuance of debts and equity.
3. Investing cash flow: costs associated with purchasing of capital assets and investments of cash resources in other businesses.
Generally, investing activities comprises of purchasing physical assets, investing in securities and the sale of assets or securities associated with the company.
Hence, the investing activities section of the statement of cash flows includes activities that increase and decrease long-term liabilities and stockholders' equity in the business they have invested their money in.
Joseph Thompson is president and sole shareholder of Jay Corporation (a cash method, calendar year C corporation). In December 2020, Joe asks your advice regarding a charitable contribution he plans to have the corporation make to the University of Maine, a qualified public charity. Joe is considering the following alternatives as charitable contributions in December 2020:_____.
Fair Market Value
(1) Cash donation $200,000
(2) Unimproved land held for six years ($110,000 basis) 200,000
(3) Maize Corporation stock held for eight months ($140,000 basis) 200,000
(4) Brown Corporation stock held for nine years ($360,000 basis) 200,000
Joe has asked you to help him decide which of these potential contributions will be most advantageous taxwise. Jay's taxable income is $3,500,000 before considering the contribution.
Rank the four alternatives, and complete the letter to Joe communicating your advice.
Note: The land and stock are "unrelated use property" but they are not "tangible personal property".
Hoffman, Maloney, Raabe, & Young, CPAs
5191 Natorp Boulevard
Mason, OH 45040
December 10, 2020
Mr. Joseph Thompson
Jay Corporation
1442 Main Street
Freeport, ME 04032
Dear Mr. Thompson:
I have evaluated the proposed alternatives for your 2020 year-end contribution to the University of Maine. I recommend that you sell the Brown Corporation stock and donate the proceeds to the University. The four alternatives are discussed below.
Donation of cash, the unimproved land, or the Brown Corporation stock each will result in a $ __________ charitable contribution deduction. Donation of the Maize Corporation stock will result in only a $ ______________charitable contribution deduction.
You will benefit in two ways if you sell the Brown Corporation stock and give the $ __________in proceeds to the University. Donation of the proceeds will result in a $ ___________charitable contribution deduction. In addition, sale of the stock will result in a $ _________ long-term capital ______________. If Jay Corporation had capital __________________of at least $ ___________ and paid corporate income tax in the past three years, the entire _______________could be ________________and Jay would receive tax refunds for the carryback years. If Jay Corporation _______________capital gains in the carryback years, the capital loss could be carried forward and offset against capital gains of the corporation for up to _______________years.
Jay Corporation ________________ make the donation in time for the ownership to change hands before the end of the year. Therefore, I recommend that you notify your broker immediately so that there will be no problem in completing the donation on a timely basis.
I will be pleased to discuss my recommendation in further detail if you wish. Please call me if you have questions. Thank you for consulting my firm on this matter. We look forward to serving you in the future.
Sincerely,
Richard Stinson, CPA
Answer:
Joseph Thompson of Jay Corporation
Hoffman, Maloney, Raabe, & Young, CPAs
5191 Natorp Boulevard
Mason, OH 45040
December 10, 2020
Mr. Joseph Thompson
Jay Corporation
1442 Main Street
Freeport, ME 04032
Dear Mr. Thompson,
I have evaluated the proposed alternatives for your 2020 year-end contribution to the University of Maine. I recommend that you sell the Brown Corporation stock and donate the proceeds to the University. The four alternatives are discussed below.
Donation of cash, the unimproved land, or the Brown Corporation stock each will result in a $ ___200,000_______ charitable contribution deduction. Donation of the Maize Corporation stock will result in only a $ ____140,000__________charitable contribution deduction.
You will benefit in two ways if you sell the Brown Corporation stock and give the $ __200,000________in proceeds to the University. Donation of the proceeds will result in a $ __200,000_________charitable contribution deduction. In addition, sale of the stock will result in a $ __160,000_______ long-term capital ___loss___________. If Jay Corporation had capital ____gain______________of at least $ ___160,000________ and paid corporate income tax in the past three years, the entire ____capital gain loss___________could be ____deducted____________and Jay would receive tax refunds for the carryback years. If Jay Corporation _____no__________capital gains in the carryback years, the capital loss could be carried forward and offset against capital gains of the corporation for up to ______twenty_________years.
Jay Corporation ______should__________ make the donation in time for the ownership to change hands before the end of the year. Therefore, I recommend that you notify your broker immediately so that there will be no problem in completing the donation on a timely basis.
I will be pleased to discuss my recommendation in further detail if you wish. Please call me if you have questions. Thank you for consulting my firm on this matter. We look forward to serving you in the future.
Sincerely,
Richard Stinson, CPA
Explanation:
1. Cash donation: $200,000 deduction
2. Unimproved land donation: $200,000 deduction, $90,000 long term capital gain forgiven (21% X $90,000 = 18,900 tax saving, or $90,000 could be used to offset otherwise non-deductible capital losses)
3. Maize Corporation stock held 8 months: $140,000 deduction
4. Brown Corporation stock held 9 years: $200,000 deduction, $160,000 loss not available
O. Tybalt invested $5,500 cash in the business in exchange for common stock during year 2019. The December 31, 2018, credit balance of the Retained Earnings account was $121,900. Required: 1a. Prepare the income statement for the calendar-year 2019. 1b. Prepare the statement of retained earnings for the calendar-year 2019. 1c. Prepare the classified balance sheet at December 31, 2019. 2. Prepare the necessary closing entries at December 31, 2019.
Answer:
Yogurt
Explanation:
In recent years, large financial institutions such as mutual funds and pension funds have become the dominant owners of stock in the United States, and these institutions are becoming more active in corporate affairs. What are the implications of this trend for agency problems and corporate control?
Answer:
Agency problems arise when managers (agents) of a company seek their own best interests instead of that of the stockholders (principal).
With Pension funds owning a significant amount of stock in companies now, they will potentially reduce agency problems because they have experience in the are of limiting agency problems and by owning a lot of shares they will have the power to influence the company to make policies that will limit these problems as well.
This is where Corporate control comes in. With such large control, Pension funds can dictate some processes in the company and they will most likely do so in a manner that will ensure that the shareholders (like themselves) will benefit as should be the case.