McoLawn Ltd manufactures a single product, an ecologically designed electronic lawn-mower, which they sell for £40. The variable costs of the lawn-mower are as follows: Fixed costs are £140,000. McoLawn Ltd. have budgeted profits for the coming year at £120,000. How many lawn-mowers must McoLawn Ltd. sell in order to reach budgeted profit levels? Group of answer choices
Answers
Answer: 20,000 lawn mowers
Explanation:
The formula for calculating the number of lawn mowers needed to reached the budgeted profit levels is:
= (Fixed costs + Budgeted profit) / Contribution margin
Contribution margin = Selling price - Variable cost
= 40 - (14 + 8 + 5)
= 40 - 27
= $13
Number of lawn-mowers required:
= (140,000 + 120,000) / 13
= 20,000 lawn mowers
Related Questions
Which one of these is covered by a specific type of insurance policy?
A.Off grid homes
B. Condominiums
C. Home with more than two stories
D. Homes in rural areas
Answers
Answer:
A.Off grid homes
Explanation:
Specific type of insurance policy covers the most common perils except those specifically excluded perils such as earthquake, flood, nuclear disaster, landslide.
OFF GRID HOMES refer to homes which are self-sufficient without reliance on modern technology and public utilities. That means that this homes do not have access to electricity, gas, water, etc.
Therefore, these homes can be insured by a specific type of insurance policy.
The off-grid homes should be covered by a specific type of insurance policy.
The following information should be considered:
The specific insurance refers to the type of property insurance where only one person's property should be covered by the policy.It should be possible for the one property for the coverage that too is done from a specific insurance policy.Therefore the other options are incorrect.
Learn more about the insurance here: brainly.com/question/13293881
Tracey Sales Co. has predicted the following costs for this year for 500,000 units: Manufacturing Selling and Administrative Variable $ 800,000 $250,000 Fixed 1,200,000 300,000 Total $2,000,000 $550,000 What is the markup on variable manufacturing costs needed to break even
Answers
Answer: 218.75%
Explanation:
In order to breakeven, the variable manufacturing cost would have to be the same as the fixed costs in addition to the administrative costs.
= Fixed costs + Administrative cost
= 1,200,000 + 550,000
= $1,750,000
Variable cost needs to be $1,750,000
It is currently at $800,000 so it needs to increase by:
= 1,750,000 / 800,000 * 100%
= 218.75%
You would use scenario analysis when:________.
a. Testing how an increase in revenue growth affects the share price
b. Performing what-if analysis to support business planning
c. Assessing which assumption has the biggest impact on the model
d. Comparing different business cases about the future with multiple variables changed
Answers
Answer:
d. Comparing different business cases about the future with multiple variables changed
Explanation:
I would start off by defining scenario analysis first. Scenario analysis can be defined as a process whereby future values of a portfolio investment can be predicted given that an event may occur or may not occur. In other words, it is a way of knowing what would happen to the values of a portfolio if a particular event occurs or if the event doesnt occur.
Given this explanation, the right answer to this question is option d, Comparing different business cases about the future with multiple variables changed
In which one of the following circumstances should a company's managers seriously consider modifying their strategy to strongly differentiate the company's branded footwear from the offerings of rival companies and achieve a competitive advantage based on a wide selection of 450-500 models/styles and "high" S/Q ratings?
a) When one or more rivals produce and market branded footwear with the same (or higher) number of models/styles that the company is offering to the buyers of athletic footwear and also have below-average retail prices in the Internet segment and below-average wholesale prices in the Wholesale segment
b) When many rival companies are spending heavily on retailer support and search engine advertising
c) When one or more rivals also produce and market branded footwear having much the same (or higher) S/Q ratings and these rivals are offering higher mail-in rebates and delivering orders for branded footwear to footwear retailers in 1-2 weeks
d) When the company is struggling to achieve the sales volumes needed to meet or beat the five investor-expected performance targets because the global marketplace for branded footwear is overcrowded with companies locked in a fierce competitive battle to sell 450- 500 models of branded footwear with high S/Q ratings at premium prices to the same comparatively narrow high-end buyer segment
e) When the company's cost per branded pair sold is above the industry average in all four geographic regions
Answers
Answer:
The circumstance in which a company's managers should seriously consider modifying their strategy to strongly differentiate the company's branded footwear from the offerings of rival companies and achieve a competitive advantage based on a wide selection of 450-500 models/styles and "high" S/Q ratings is:
c) When one or more rivals also produce and market branded footwear having much the same (or higher) S/Q ratings and these rivals are offering higher mail-in rebates and delivering orders for branded footwear to footwear retailers in 1-2 weeks.
Explanation:
S/Q ratings are Athletic Footwear Styling and Quality ratings. The ratings are championed by a consumer group, which undertakes to rate the styling and quality of the footwear of all footwear producers by assigning a styling-quality or S/Q rating of 0 to 10 stars to each company's branded footwear offerings. If the company has the same rating with a competitor and the competitor employs some strategic moves to better its competitiveness, then the company must change its differentiation strategy.
The company manager considers modifying the strategy when there has been rival with better or same footwear quality and delivery as yours. Thus option C is correct.
The S/Q rating has been the styling and quality rating that has been assigned to the footwear by the consumer groups. The strategy for the selling of an product has been improvised in the market when there has been the presence of a competitor with the same strategy as yours.
Thus company managers seriously consider modifying their strategy when one or more rivals also produce and market branded footwear having much the same (or higher) S/Q ratings and these rivals are offering higher mail-in rebates and delivering orders for branded footwear to footwear retailers in 1-2 weeks. Thus option C is correct.
For more information about the marketing strategy, refer to the link:
https://brainly.com/question/14033301
Internal control procedures for cash receipts do not require that:_____.
a. Custody over cash is kept separate from its recordkeeping.
b. All collections for sales are received immediately upon making the sales.
c. Clerks having access to cash in a cash register should not have access to the register tape or file.
d. An employee with no access to cash receipts should compare the total cash recorded by the register with the record of cash receipts reported by the cashier.
e. Cash sales should be recorded on a cash register at the time of each sale.
f. All of these.
Answers
Answer:
b. All collections for sales are received immediately upon making the sales.
Explanation:
Internal control, regarded as a process used in assuring objective of an organization in operational effectiveness as well as efficiency and reliable financial reporting, it is also used in assuring of compliance with laws as well as regulations and policies. Generally, internal control can be described as everything which is able to controls risks to an organization. It is a way the
resources of an organization are been
measured as well as been directed and monitored.
It should be noted that Internal control procedures for cash receipts require that:.
✓Custody over cash is kept separate from its recordkeeping.
✓Clerks having access to cash in a cash register should not have access to the register tape or file.
✓An employee with no access to cash receipts should compare the total cash recorded by the register with the record of cash receipts reported by the cashier.
✓Cash sales should be recorded on a cash register at the time of each sale
Brenda, the sales manager of a firm, wants to generate a particular report containing sales analyses of the second and third quarter of the year. She should use a ________ to retrieve the information that she wants from the database. Group of answer choices
Answers
Answer: query
Explanation:
Since Brenda wants to generate a particular report containing sales analyses of the second and third quarter of the year, then she should use a query to get the information.
The query refers to a request that can be used to get data or information from the database table. The data gotten can be in form of graphs, pictorials or complex results, such as trend analyses etc
Becky is a single mother of two young children who spend their days at a daycare center while Becky goes to work. The daycare center closes at 5:30. If parents do not pick up their children at or before 5:30, the daycare center charges a late fee of $5 per child for every 10 minutes the parent is late.
Due to traffic, Becky expects to be 20 minutes late to pick up her children. How much would she be willing to pay for a variable toll road that would get her to the daycare center on time?
a. any price less than $5
b. any price less than $10
c. any price less than $20 1
d. Becky would not be willing to pay out of pocket to avoid traffic.
Answers
She expects to be 20 minutes late. She has to pay $5 for every 10 minutes.
20 minutes / 10 minutes = 2
2 x $5 = $10
If she is 20 minutes late she needs to pay $20.
She would be willing to pay anything less that $10, because anything less than 10 would save her money.
Answer: b. any price less than $10
What are the hours of operation (local standard time) of the Cascade Approach/Departure Control when flying into Medford Airport
Answers
Answer:
The answer is "0600 - 2330".
Explanation:
Alaska Airlines, allegiant, Union, and Delta are airports that service MFR. Flights to Seattle, San Francisco, Salt Lake City, Oregon, San Francisco, & Portland are provided by those airlines. The Cascades Approach/Departure Management requires 0600 - 2330 hours of operation (local standard time) while flying to Medford Airport.
Question I - Debbie Debtor borrowed $1,000.00 from First Big Bank. Debbie Debtor agreed to repay the $1,000.00 over eight months plus interest. Debbie Debtor loses her job and stops making payments to First Big Bank after two months. What is the source of law that governs the subsequent remedies that may be available to First Big Bank
Answers
Answer:
First Big Bank can file a lawsuit.
Explanation:
Debbie took the loan when he has the job and agreed to refund the loan or borrowed money. Unfortunate circumstances lead to the loss of his job resulting in the stoppage of loan repayment. Since Debbie did not make any crime so it will not come under criminal law but the bank can file a lawsuit against Debbie and he will be liable to pay a fine and penalties.
The spread of ATMs and the increased use of debit cards _______ money. Everything else remaining the same, the nominal interest rate _______.
Answers
Answer:
increase the demand for; falls
Explanation:
ATMs means automated teller machine. They increase the ease through which a bank account holder can assess her funds. ATMs can be used to :
withdraw funds check account balancetransfer moneyWith the proliferation of ATMs and the increased use of debit cards, there has been an increase in the demand for money. This has led to a fall in nominal interest rate
The demand for money (the decision to hold money) is inversely related to interest rate. If the demand for money increases, it means that less bonds are been held. As a result, there would be a fall in the interest rates.
suppose the following two events occur in the domestic market for radiologists: a. some hospitals are outsourcing some radiology services such as reading x-rays. b. some medical schools have closed down their radiology departments as fewer students enroll in this field. what is likely to happen to the equilibrium wage and quantity of radiologists following these two events?
Answers
Answer:
The equilibrium quantity falls and the effect on the equilibrium wage of radiologists is indeterminate.
Explanation:
Here are the options to this question :
What is likely to happen to the equilibrium wage and quantity of radiologists following these twoevents?
A) The equilibrium wage and the equilibrium quantity of radiologists fall.
B) The equilibrium quantity falls and the effect on the equilibrium wage of radiologists is indeterminate.
C) The equilibrium wage falls and the effect on equilibrium quantity of radiologists isindeterminate.D
) The equilibrium wage and the equilibrium quantity of radiologists rise
As a result of event A, there would be a decrease in the demand for radiologists. As a result, there would be a leftward shift of the demand curve for radiologist. This would lead to a reduction in equilibrium price and quantity
As a result of event B, there would be a decrease in the supply radiologists. As a result, there would be a leftward shift of the supply curve of radiologist. This would lead to a reduction in equilibrium quantity and a rise in equilibrium price.
Taking these two effects together, the equilibrium quantity falls and the effect on the equilibrium wage of radiologists is indeterminate.
Suppose you invest equal amounts in a risky asset with an expected return of 16% and a standard deviation of returns of 18% and a risk-free asset with an interest rate of 4%. Calculate the standard deviation of the returns on the resulting portfolio.
Answers
Answer:
The answer is "[tex]10\%[/tex]".
Explanation:
You are equivalent investors in 16 percent of a portfolio and 4 percent of a risk-free asset. A weighted mean of these two will become the predicted return.
[tex]= \text{(Portfolio weight} \times \text{Return portfolio)} + \text{(Portfolio weight}\times \text{risk-free)}\\\\[/tex]
[tex]= (0.5 \times 16\%) + (0.5 \times 4\%)\\\\= (0.5 \times \frac{16}{100}) + (0.5 \times \frac{4}{100})\\\\= \frac{8}{100} + \frac{2}{100}\\\\= \frac{8+2}{100}\\\\= \frac{10}{100}\\\\= \frac{1}{10}\\\\= \frac{1}{10} \times 100\\\\=10\%[/tex]
Draw supply and demand graphs that estimate what will happen to demand, supply, and the equilibrium price of coffee if these events occur: Widely reported medical studies suggest that coffee drinkers are less likely to develop certain diseases.
Answers
Answer:
Please find the required diagram in the attached image
Explanation:
Only a change in the price of a good leads to a movement along the demand curve of that good. Also, only a change in the price of the good would lead to an increase or decrease in the quantity demanded of that good.
Other factors other than the change in the price of the good would lead to a shift of the demand curve. Some of those factors include :
1. a change in consumers' expectation
2. a change in the taste of consumers
3. a change in income
As a result of the study, there would be an increase in the demand for coffee. This would shift the demand curve to the right. As a result, there would an increase in equilibrium price and quantity
Elk, a C corporation, has $370,000 operating income and $290,000 operating expenses during the current year. In addition, Elk has a $10,000 long-term capital gain and a $17,000 short-term capital loss. Elk's taxable income is:
Answers
Answer:
$80,000
Explanation:
Calculation to determine what Elk's taxable income is:
Using this formula
Taxable income=Operating income-Operating expenses
Let plug in the formula
Taxable income=$370,000-$290,000
Taxable income=$80,000
Therefore Elk's taxable income is:$80,000
In the first month of operations, the total of the debit entries to the cash account amounted to $900 and the total of the credit entries to the cash account amounted to $600. The cash account has a(n)
Answers
Answer:
$300 debit balance
Explanation:
In business debit entries mean that the money is being added to the account, while credit entries means that the money is owed and is therefore being deducted from the account. Therefore, in this scenario the cash account has a $300 debit balance. This is because the credit entries are being subtracted from the debit entries (assuming that the account had a $0 initial balance). If we do the math we are left with $300 of debit.
$900 - $600 = $300
When Maria suggests a product modification to a supplier of her company, she is performing which of these roles according to Mintzberg?
Answers
Answer: Spokesperson
Explanation:
Managers have a role to play according to Mintzberg, of being spokespeople for their companies. They are to represent the company outside and speak on its behalf in order to get it better deals and an improved image.
This is what Maria did here. By suggesting a product modification for the benefit of her company, she was being a spokesperson who was speaking up for the company so that it gets a better deal.
Inventory turnover measures a.the relationship between cost of goods sold and the amount of inventory carried during the period. b.the times purchases are turned into inventory during the period. c.the efficiency and effectiveness of costing management. d.the average amount of inventory sold.
Answers
Answer:
a. the relationship between cost of goods sold and the amount of inventory carried during the period.
Explanation:
An inventory turnover can be defined as a measure of the relationship between cost of goods sold (COGS) and the amount of inventory carried during the period the goods were purchased by the consumers or customers of a business firm.
This ultimately implies that, an inventory turnover is a measure of the amount of times an inventory is used or sold by an organization at a specific period of time.
Basically, the inventory turnover is calculated by dividing cost of goods sold by average inventory.
Additionally, the Expense Account selected by a manufacturer or a producer for inventory parts would normally comprise of the account type Cost of Goods Sold.
A short futures contract on a non-dividend paying stock was entered some time ago. It now has 6 months to maturity. The risk-free rate of interest is 10% per year. The stock is currently trading at $25/share and the delivery price is $24/share. How much is your position worth today (ignore marking to market costs)
Answers
Answer:
$26.225
Explanation:
Spot rate amount = $25
Period = 0
FV Period = 6 month. FVF at 5%, 6 month = 1.049
Position worth today = Spot rate amount * FVF
Position worth today = $25 * 1.049
Position worth today = $26.225
So, my position worth today is $26.225.
Net income was $35,000. Issued common stock for $64,000 cash. Paid cash dividend of $14,600. Paid $50,000 cash to settle a note payable at its $50,000 maturity value. Paid $12,000 cash to acquire its treasury stock. Purchased equipment for $39,000 cash. Use the above information to determine cash flows from financing activities. (Amounts to be deducted should be indicated with a minus sign.)
Answers
Answer:
- $76,600
Explanation:
cash flows from financing activities - $76,600
Delta River Company sold manufacturing equipment with a cost of $44,000 and accumulated depreciation of $32,000 for $9,000. The journal entry to record this transaction will include:_________
a) a credit to Accumulated Depreciation â Equipment for $32,000.
b) a debit to a loss account for $3,000.
c) a credit to a gain account for $8,000.
d) a credit to the Equipment account for $12,000.
Answers
Answer:
b) a debit to a loss account for $3,000.
Explanation:
Based on the information given the journal entry to record this transaction will include: a DEBIT TO A LOSS ACCOUNT FOR $3,000.
Debits Cash $9,000
Debit Accumulated Depreciation - Equipment $32,000
Debit loss account ($3,000)
($44,000-$32,000+$9,000)
Credit Equipment $44,000
Royal Lawncare Company produces and sells two packaged products—Weedban and Greengrow. Revenue and cost information relating to the products follow: Product Weedban Greengrow Selling price per unit $ 11.00 $ 35.00 Variable expenses per unit $ 2.20 $ 11.00 Traceable fixed expenses per year $ 132,000 $ 49,000 Last year the company produced and sold 41,500 units of Weedban and 24,000 units of Greengrow. Its annual common fixed expenses are $113,000. Required: Prepare a contribution format income statement segmented by product lines.
Answers
Answer:
The net profits are as follows:
Total Company = $647,200
Weedban = $161,605
Greengrow = $485,595
Explanation:
Note: See the attached excel for the contribution format income statement segmented by product lines.
In the attached excel file, the following formula is used:
Allocation of common fixed expenses to Weedban = (Units of Weedban / (Units of Weedban + Units of Greengrow)) * Common fixed expenses = (41,500 / (41,500 + 24,000) * $113,000 = $71,595
Allocation of common fixed expenses to Greengrow = (Units of Greengrow / (Units of Weedban + Units of Greengrow)) * Common fixed expenses = (24,000 / (41,500 + 24,000) * $113,000 = $41,405
From the attached excel file, the net profits are as follows:
Total Company = $647,200
Weedban = $161,605
Greengrow = $485,595
Please solve for the value of the following bonds and briefly explain your results:
A) A U.S. Government Treasury Strip is quoted in the Wall Street Journal at a market price of 87:19 (87 and 19/32). If the strip is scheduled to mature in May 2025, what is the annual interest rate for this bond?
B) Xenor Corporation introduced a bond in 2001 that offered a coupon rate of 8 1/2%, resulting in coupon payments of $8.50. The bond is scheduled to mature in 2031. If the current going interest rate in the market is 6 3/4%, what is the market price (please calculate the interest and the principal due to get this value) of this bond today?
C) A bond offers a coupon that makes annual payments of $87.50. The bond was originally set to mature in 17 years. A quote for this bond, obtained 15 years after the original issue date, listed the market price as $1,070.00. What is the YTM for this bond?
Answers
Answer:
US Treasury Strip Price of the strip, P = $87 and 19/32 = $87.59375 Face Value of the strip = $100 Maturity, N = 5 years (assuming the quoted price is the current price, i.e., in November 2020, the time to maturity in November 2025 will be 5 years
Many business leaders today give up having a private office, and instead work at a desk or cubicle in the middle of the work area to be among other employees. What effect do you think this work area placement has on their power
Answers
Answer:
Napoleon once ordered his men on a near suicidal charge against the Austrians and they did exactly what he told them to because they were so inspired by him. This inspiration came from the fact that even though he was their commander, he was on the front lines with them and personally overseeing the artillery bombardment of the enemy.
This is the kind of effect that the business leader staying in the middle of the work area can have. The leader would be amongst their subordinates and by working hard, could inspire them to work hard themselves. This would increase the respect that the employees have of the leader and by extension, the leader's power over them.
Should the leader turn out to be lazy however, an opposite situation could result where the leader's power is diminished as their laziness would be on full display for the workers. who would then lose respect for the leader.
The management of Felipe Inc. is reevaluating the appropriateness of using its present inventory cost flow method, which is average-cost. The company requests your help in determining the results of operations for 2020 if either the FIFO or the LIFO method had been used. For 2020, the accounting records show these data:
Answers
Question Completion:
Inventories:
Beginning 9,940 units $19,880
Ending 24,140 units
Total net Sales (255,600 units) $1,060,740
Cost of goods purchased (269,800 units) $867,620
Quarterly Purchases:
Quarters Units Unit Costs Total Costs
1 71,000 $2.98 $211,580
2 56,800 3.10 176,080
3 56,800 3.26 185,168
4 85,200 3.46 294,792
Answer:
Felipe Inc.
Income Statement for the year ended December 31, 2020:
FIFO LIFO
Sales Revenue $1,060,740 $1,060,740
Cost of goods sold 803,976 825,304
Operating results $256,764 $235,436
Explanation:
a) Data and Calculations:
Quarters Units Unit Costs Total Costs
Beginning 9,940 $2.00 $19,880
1 71,000 $2.98 211,580
2 56,800 3.10 176,080
3 56,800 3.26 185,168
4 85,200 3.46 294,792
Total 279,740 $887,500
Units sold 255,600
Ending inventory = 24,140 (279,740 - 255,600)
FIFO:
Cost of goods sold
= Cost of goods available for sale - Ending inventory
= $803,975.60 ($887,500 - $83,524.40)
Ending Inventory:
= $83,524.40 (24,140 * $3.46)
LIFO:
Cost of goods sold
= Cost of goods available for sale - Ending inventory
= $825,304 ($887,500 - $62,196)
Ending Inventory:
= (9,940 * $2.00) + (14,200 * $2.98)
= ($19,880 + $42,316)
= $62,196
The total market value of the equity of ITM is $6 million, and the total value of its debt is $4
million. The treasurer estimates that the beta of the stock currently is 1.2 and that the expected
risk premium on the market is 10%. The Treasury bill rate is 4%, and investors believe that
ITM’s debt is essentially free of default risk.
a. What is the required rate of return on ITM stock?
b. Estimate the WACC assuming a tax rate of 40%.
c. Estimate the discount rate for an expansion of the company’s present business.
d. Suppose the company wants to diversify into the manufacture of rose-colored glasses.The beta
of optical manufacturers with no debt outstanding is 1.4. What is the required rate of return on
ITM’s new venture? (Assume that the risky project will not enable the firm to issue any
additional debt.)
Answers
Answer:
a. The required rate of return on Okefenokee stock is 16%.
b. WACC = 10.56%.
c. Estimate the discount rate for an expansion of the company's present business.
It should be the same as the WACC = 10.56%
d. The required rate of return on Okefenokee's new venture is Ke = 18 %.
Explanation:
Here the given is,
E = $6 million, D = $4 million, Beta = 1.2,
Rmp = the expected risk premium on the market =10%.
Rf = The Treasury bill rate = 4%
a. The required rate of return on Okefenokee stock,
[tex]Ke = Rf + Beta \times Rmp = 4 + 1.2 \times 10 = 16%[/tex]%.
b. Tax rate, T = 40%
The proportion of debt =[tex]Wd = D / (D + E) = 4 / (6 + 4) = 0.4[/tex]
Proportion of equity, We = 1 - Wd = 1 - 0.4 = 0.6
Cost of debt, Kd = Risk-free rate as debt is free of default = 4%
[tex]WACC = Wd \times Kd \times (1 - T) + We\times Ke\\\\ = 0.4 \times4\times (1 - 40) + 0.6 \times 16\\\\ = 10.56%[/tex]
WACC = 10.56%.
c. Estimate the discount rate for an expansion of the company's present business.
It should be the same as the WACC = 10.56%
d. Suppose the company wants to diversify into the manufacture of rose-colored glasses. The beta of optical manufacturers with no debt outstanding is 1.4. What is the required rate of return on Okefenokee's new venture? (You should assume that the risky project will not enable the firm to issue an additional debt)
[tex]Ke = Rf + Beta \times Rmp\\\\Ke = 4 + 1.4 \times 10 = 18%[/tex]
Ke = 18 %.
What is the present value of $1,200 to be received at the end of each month for 5 years if the discount rate is 6%?
a. $62,071.b. $62,381.c. $63,095.d. $63,274.
Answers
Answer:
PV= $62,070.67 = $62,071
Explanation:
Giving the following information:
Monthly payment= $1,200
Number of months= 5*12* 60
Discount rate= 0.06/12= 0.005
To calculate the present value, we need to use the following formula:
PV= A*{(1/i) - 1/[i*(1 + i)^n]}
A= monthly payment
PV= 1,200*{(1/0.005) - 1 / [0.005*(1.005^60)]}
PV= $62,070.67
uppose you invest, every month, in an annuity that pays 3% interest, compounded monthly. After 25 years, you have $550,000. How much money do you earn from interest
Answers
Answer: $180,046
Explanation:
First find the annuity that was invested monthly that yielded $550,000.
Interest rate = 3%/12 months = 0.25%
Period = 25 * 12 = 300 months
Future value of annuity = Annuity * ( ( 1 + rate) ^ no. of periods - 1) / rate
550,000 = Annuity * ( ( 1 + 0.25%)³⁰⁰ - 1 ) / 0.25%
550,000 = Annuity * 446
Annuity = 550,000 / 446
Annuity = $1,233.18
Without compounding, investing $1,233.18 per month would have yielded:
= 1,233.18 * 300 months
= $369,954
Money earned from interest is:
= 550,000 - 369,954
= $180,046
The following selected transactions were completed by Amsterdam Supply Co., which sells office supplies primarily to wholesalers and occasionally to retail customers. Also note that the company uses a clearing house to take care of all bank as well as non-bank credit cards used by its customers.
Record on page 10 of the journal
Mar. 2 Sold merchandise on account to Equinox Co., $18,900, terms FOB destination, 1/10, n/30. The cost of the goods sold was $13,300.
3 Sold merchandise for $11,350 plus 6% sales tax to retail cash customers. The cost of the goods sold was $7,000.
4 Sold merchandise on account to Empire Co., $55,400, terms FOB shipping point, n/eom. The cost of the goods sold was $33,200.
5 Sold merchandise for $30,000 plus 6% sales tax to retail customers who used MasterCard. The cost of the goods sold was $19,400.
12 Received check for amount due from Equinox Co. for sale on March 2.
14 Sold merchandise to customers who used American Express cards, $13,700. The cost of the goods sold was $8,350.
16 Sold merchandise on account to Targhee Co., $27,500, terms FOB shipping point, 1/10, n/30. The cost of the goods sold was $16,000.
18 Issued credit memo for $4,800 to Targhee Co. for merchandise returned from sale on March 16. The cost of the merchandise returned was $2,900.
Record on page 11 of the journal
Mar. 19 Sold merchandise on account to Vista Co., $8,250, terms FOB shipping point, 2/10, n/30. Added $75 to the invoice for prepaid freight. The cost of the goods sold was $5,000.
26 Received check for amount due from Targhee Co. for sale on March 16 less credit memo of March 18.
28 Received check for amount due from Vista Co. for sale of March 19.
31 Received check for amount due from Empire Co. for sale of March 4.
31 Paid Fleetwood Delivery Service $5,600 for merchandise delivered during March to customers under shipping terms of FOB destination.
Apr. 3 Paid City Bank $940 for service fees for handling MasterCard and American Express sales during March.
15 Paid $6,544 to state sales tax division for taxes owed on sales.
Journalize the entries to record the transactions of Amsterdam Supply Co. Refer to the Chart of Accounts for exact wording of account titles.
Chart of Accounts
CHART OF ACCOUNTS
Amsterdam Supply Co.
General Ledger
ASSETS
110 Cash
121 Accounts Receivable-Empire Co.
122 Accounts Receivable-Equinox Co.
123 Accounts Receivable-Targhee Co.
124 Accounts Receivable-Vista Co.
125 Notes Receivable
130 Inventory
131 Estimated Returns Inventory
140 Office Supplies
141 Store Supplies
142 Prepaid Insurance
180 Land
192 Store Equipment
193 Accumulated Depreciation-Store Equipment
194 Office Equipment
195 Accumulated Depreciation-Office Equipment
LIABILITIES
210 Accounts Payable
216 Salaries Payable
218 Sales Tax Payable
219 Customer Refunds Payable
221 Notes Payable
EQUITY
310 Common Stock
311 Retained Earnings
312 Dividends
313 Income Summary
REVENUE
410 Sales
610 Interest Revenue
EXPENSES
510 Cost of Goods Sold
521 Delivery Expense
522 Advertising Expense
524 Depreciation Expense-Store Equipment
525 Depreciation Expense-Office Equipment
526 Salaries Expense
531 Rent Expense
533 Insurance Expense
534 Store Supplies Expense
535 Office Supplies Expense
536 Credit Card Expense
539 Miscellaneous Expense
710 Interest Expense
Journal
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Journalize the entries to record the transactions of Amsterdam Supply Co. Refer to the Chart of Accounts for exact wording of account titles.
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PAGE 10
JOURNAL
ACCOUNTING EQUATION
Answers
Answer:
Accounts Receivable (Dr.) $18,900
Sales (Cr.) $18,900
Cost of good sold (Dr.) $13,300
Inventory (Cr.) $13,300
Cash (Dr.) $12,031
Sales (Cr.) $11,350
Sales tax payable (Cr.) $681
Cost of goods sold (Dr.) $7,000
Inventory (Cr.) $7,000
Accounts receivable (Dr.) $27,500
Sales (Cr.) $27,500
Cost of goods sold (Dr.) $16,000
Inventory (Cr.) $16,000
Cash (Dr.) $18,711
Cash discount (Dr.) $189
Accounts receivable (Cr.) $18,900
Explanation:
Cash discount is the discount given to customers who pay before the credit terms. This is available to those customers who buy goods on credit. This is recorded as expense.
Cash discount : $18,900 * 0.01 = $189
Do government statisticians calculate GDP by simply adding up the total sales of all business firms in one year? Explain.
Answers
Answer:
No
Explanation:
No, because the gross domestic product is determined by encompassing the final product. If the total sales are used to determine the GDP then the false value of GDP will come up because the problem of double counting will arise. Many firms sell their goods to other firms which is intermediate goods for the other firms.
Exercise 4-10 Preparing adjusting and closing entries for a merchandiser LO P3 The following list includes selected permanent accounts and all of the temporary accounts from the December 31 unadjusted trial balance of Emiko Co., a business owned by Kumi Emiko. Emiko Co. uses a perpetual inventory system. Debit Credit Merchandise inventory $ 40,000 Prepaid selling expenses 7,600 Dividends 53,000 Sales $ 609,000 Sales returns and allowances 21,500 Sales discounts 7,000 Cost of goods sold 252,000 Sales salaries expense 68,000 Utilities expense 25,000 Selling expenses 46,000 Administrative expenses 125,000 Additional Information Accrued and unpaid sales salaries amount to $1,800. Prepaid selling expenses of $2,900 have expired. A physical count of year-end merchandise inventory is taken to determine shrinkage and shows $34,700 of goods still available. (a) Use the above account balances along with the additional information, prepare the adjusting entries. (b) Use the above account balances along with the additional information, prepare the closing entries.
Answers
Answer:
Kumi Emiko Co.
a) Adjusting Journal Entries:
Debit Sales Salaries expense $1,800
Credit Sales Salaries Payable $1,800
To record accrued sales salaries.
Debit Selling expense $2,900
Credit Prepaid selling expense $2,900
To record expired selling expense.
Debit Cost of goods sold $5,300
Credit Merchandise Inventory $5,300
To record determined shrinkage in merchandise inventory.
b) Closing Journal Entries:
Debit Sales revenue $ 609,000
Credit Sales returns and allowances $21,500
Credit Sales discounts $7,000
Credit Income summary $580,500
To close the net sales revenue to the income summary.
Debit Income Summary $526,000
Debit:
Cost of goods sold $257,300
Sales salaries expense 69,800
Utilities expense 25,000
Selling expenses 48,900
Administrative expenses 125,000
To close cost of goods sold and expenses to the income summary.
Debit Income Summary $54,500
Credit Retained Earnings $54,500
To close the income summary to retained earnings.
Debit Retained Earnings $53,000
Credit Dividends $53,000
To close the dividend to retained earnings.
Explanation:
a) Data and Calculations:
Debit Credit
Merchandise inventory $ 40,000
Prepaid selling expenses 7,600
Dividends 53,000
Sales $ 609,000
Sales returns and allowances 21,500
Sales discounts 7,000
Cost of goods sold 252,000
Sales salaries expense 68,000
Utilities expense 25,000
Selling expenses 46,000
Administrative expenses 125,000
Analysis of additional Information:
Sales Salaries expense $1,800 Sales Salaries Payable $1,800
Selling expense $2,900 Prepaid selling expense $2,900
Cost of goods sold $5,300 Merchandise Inventory $5,300
Adjusted accounts:
Debit Credit
Merchandise inventory $ 34,700
Prepaid selling expenses 4,700
Dividends 53,000
Sales Salaries Payable 1,800
Sales $ 609,000
Sales returns and allowances 21,500
Sales discounts 7,000
Cost of goods sold 257,300
Sales salaries expense 69,800
Utilities expense 25,000
Selling expenses 48,900
Administrative expenses 125,000