Answer and Explanation:
Phelps Inc
a)
Date Account titles and Explanation Debit ($) Credit ($)
Dec.31,2020
Dr Equity Investments 1,200,000
Cr Cash 1,200,000
June 30,2021
Dr Cash (50,000 shares * $0.85) 42,500
Cr Dividend Revenue 42,500
Dec. 31, 2021
Dr Cash (50,000 shares * $0.85) 42,500
Cr Dividend Revenue 42,500
Dr Fair Value Adjustment (Available-for-Sale) 150,000
Cr Unrealized Holding Gain or Loss - Equity* 150,000
Unrealized Holding Gain or Loss - Equity-
Amount ($)
Cost 1,200,000
Fair Value (50,000 shares * $27) 1,350,000
Unrealized Gain or (Loss) 150,000
b)
Date Particulars Debit ($) Credit ($)
Dec.31,2020
Dr Equity Investments (Kulikowski Stock)
1,200,000
Cr Cash 1,200,000
June 30,2021
Dr Cash (50,000 shares * $0.85) 42,500
Cr Equity Investment (Kulikowoski Stock) 42,500
Dec. 31, 2021
Dr Cash (50,000 shares * $0.85) 42,500
Cr Equity Investments (Kulikowski) 42,500
Dec 31, 2021
Dr Equity Investment (Kulikowski Stock) 146,000
CrRevenue from Investments (730000 * 20%) 146,000
c)
Reporting of investment in securities on the balance sheet:
Fair value method = (1,200,000+150,000)
= 1,350,000
Equity method = (1,200,000-42,500-42,500+146,000) = 1,261,000
Reporting on net income on the income statement:
Fair value method = Dividend Revenue = (42,500+42,500)= 85,000
Equity meethod = Revenue from investments = 146,000
the production manager for the coory soft drink company is considering the production of 2 kinds of soft drinks: regular (R) and diet(D). two of the limited resources are production time 480 minutes per day and sytrum limited to 675 gallons per day. to produce a regular case requires 2 minutes and 5 gallons of syrup, while a diet case needs 4 minutes and 3 gallons of syrup, products for regular soft drink are $3.00 per case and profits for diet soft drink are $2.00 per case. What is the time constraint
Answer:
The time constraint is that you have only 480 minutes available per day to produce either type of soda.
In this case, if you are going to base your production schedule on your time constraint, then you should produce only regular sodas (240 cases). Each case of regular sodas generates $1.50 per minute of machine hour used. While a case of diet soda generates only $0.50 per minute of machine hour. Total revenue generated from he production of regular soda would be $720. If you would produce diet soda, total revenue would be $240.
The problem you face is the materials constraint (syrup), which will allow you to produce only 135 cases of regular soda and 0 cases of diet soda. Total revenue = $405, which is still higher than the revenue generated from diet soda ($240).
Explanation:
2 kinds of soft drinks:
regular (R) diet(D)production time 480 minutes per day
syrup limited to 675 gallons per day
regular case requires 2 minutes and 5 gallons of syrup, while a diet case needs 4 minutes and 3 gallons of syrup
price:
regular $3diet $2regular diet
sales price $3 $2
syrup gallons required 5 3
revenue per syrup gallon $0.60 $0.67
production time required 2 4
revenue per px time $1.50 $0.50
The wholesale cost box of 25 pieces of chocolate is 50 AEDYou decide to sel each bar of chocolate with a 20% profit plus 5% VAT tax Based on this information alone, how much will the cost of a single bar be? (2 Marks)
Answer:
Cost of a single bar = 2.52 AED (2.4 AED + 0.12 AED)
Explanation:
Cost of a box of 25 pieces of chocolate = 50 AED
Cost per bar for seller = 50 AED/25 = 2 AED
Selling price = 2.4 AED (2 AED * 1.2)
Plus 5% VAT = 0.12 AED (2.4 AED * 5%)
Cost of a single bar = 2.52 AED (2.4 AED + 0.12 AED)
b) The cost price to the seller is the cost of a box divided by the pieces or bars in the box, = 50 AED / 25 = 2AED
c) The cost price to the buyer is the selling price plus 5% VAT. This cost includes the seller's cost, profit, and VAT.
Squat XFit Inc. reported the following activities and select balance sheet items ($ in millions). You may also view this data in Excel with the SquatFix Activities and Balance Sheet file. Select results during the year ending December 31, 2020 Revenue 453.2 Interest expense 12.5 Depreciation expense 43.2
Stock-based compensation 12.5 Tax rate 40% Net income 134.5 Balances as of: 12/31/2019 12/31/2020 Accounts payable 120.5 130.5 Accounts receivable 74.8 82.4 Common Stock & APIC 146.4 163.5
Deferred revenue 453.0 532.0
Inventory 132.6 143.2
Current portion of debt 214.0 275.0
Net PP&E 212.7 246.0
Pre-paid expenses 50.0 35.0
Treasury stock (112.3) (123.2)
Accrued wages 67.8 72.5
Other comprehensive income 12.1 13.5
Calculate cash flow from operations for the year ending 12/31/2020:
a. $204.7 million
b. $250.7 million
c. $271.3 million
d. $280.7 million
Answer:
b. $250.7 million
Explanation:
Cash flow from operations is obtained from Cash flow from Operating Activity Section when the Indirect Method is used to prepare that section as follows :
Cash flow from Operating Activity
Net income before taxation 134.50
Adjustment for Non- Cash Items :
Depreciation expense 43.20
Adjustment for Working Capital Items :
Increase in Accounts payable 10.00
Increase in Accounts receivable (7.60)
Increase in Inventory (10.60)
Increase in Current portion of debt 61.00
Decrease in Pre-paid expenses 15.00
Increase in Accrued wages 4.70
Cash Generated from Operations 250.20
Based on the following selected data, journalize the adjusting entries as of December 31 of the current year. For a compound transaction, if an amount box does not require an entry, leave it blank. If no entry is required, select "No entry required" and leave the amount boxes blank. a. Estimated uncollectible accounts at December 31, $16,000, based on an aging of accounts receivable. The balance of Allowance for Doubtful Accounts at December 31 was $2,000 (debit).b. The physical inventory on December 31 indicated an inventory shrinkage of $3,300.c. Prepaid insurance expired during the year, $22,820.d. Office supplies used during the year, $3,920.e. A patent costing $48,000 when acquired on January 2 has a remaining legal life of 10 years and is expected to have value for 8 years.f. The cost of mineral rights was $546,000. Of the estimated deposit of 910,000 tons of ore, 50,000 tons were mined and sold during the year.g. Vacation pay expense for December, $10,500.h. Interest was accrued on the $100,000, 9% note receivable received on October 17. Assume 360 days per year.
Answer:
Journal
Adjusting Entries:
a) Debit Uncollectible Expenses $18,000
Credit Allowance for Doubtful Accounts $18,000
To bring the balance to $16,000.
b) Debit Cost of Goods Sold $3,300
Credit Inventory Account $3,300
To record inventory shrinkage.
c) Debit Insurance Expense $22,820
Credit Insurance Prepaid Account $22,820
To record expired insurance for the year.
d) Debit Supplies Expense $3,920
Credit Supplies Account $3,920
To record office supplies used during the year.
e) Debit Patent Amortization Expense $6,000
Credit Patent $6,000
To record impaired value from 10 to 8 years.
f) Debit Cost of Goods Sold (Depletion) $30,000
Credit Mineral Rights $30,000
To record depletion or cost of goods sold.
g) Debit Wages & Salaries $10,500
Credit Wages & Salaries Payable $10,500
To record vacation pay for December.
h) Debit Interest on Notes Receivable $1,875
Credit Interest on Notes $1,875
To record 9% interest accrued for 75 days.
Explanation:
a) The Allowance for Doubtful Accounts will be brought to a balance of $16,000. Since it has a debit balance of $2,000, this is added to get $18,000 which is expensed for the year.
b) Inventory shrinkage increases the cost of goods sold and reduces the inventory account.
c) The expiration of the prepaid insurance means that the amount will be charged to Insurance Expense Account.
d) Office supplies used during the year is an expense.
e) A patent is an intangible asset, which is subject to annual amortization and impairment. Since the asset was acquired on January 2 with a legal life of 10 years, but expected to have a value for 8 years. 8 years is used to calculate the amortization expense instead of 10 years.
f) Mineral Rights are intangible assets, but they are subject to depletion. The depletion represents the cost of goods sold. This is calculated as follows: $546,000 x 50,000/910,000 = $30,000.
g) Vacation pay is part of the Wages & Salaries and should be accrued for the year.
h) Interest on Notes Receivable is calculated as follows: $100,000 x 9% x 75/360 days = $1,875.
i) Adjusting entries are end of the accounting period journal entries used to recognize or accrue income or expenses, which are business transactions that occurred but are not accurately displayed in the records. They balance debits and credits before the financial statements are prepared.
An adjusting entries is a journal entries made at the conclusion of an accounting period in a company's general ledger to note any unrealized revenue or expenses of that period.
Adjusting Entries:
a) Debit Un collectible Expenses $18,000
Credit Allowance for Doubtful Accounts $18,000
(To bring the balance to $18,000)
b) Debit Cost of Goods Sold $3,300
Credit Inventory Account $3,300
(To record inventory shrinkage).
c) Debit Insurance Expense $22,820
Credit Insurance Prepaid Account $22,820
(To record expired insurance for the year.)
d) Debit Supplies Expense $3,920
Credit Supplies Account $3,920
(To record office supplies used during the year).
e) Debit Patent Amortization Expense $6,000
Credit Patent $6,000
(To record impaired value from 10 to 8 years.)
f) Debit Cost of Goods Sold (Depletion) $30,000
Credit Mineral Rights $30,000
(To record depletion or cost of goods sold.)
g) Debit Wages & Salaries $10,500
Credit Wages & Salaries Payable $10,500
(To record vacation pay for December.)
h) Debit Interest on Notes Receivable $1,875
Credit Interest on Notes $1,875
(To record 9% interest accrued for 75 days).
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Which journal entry reflects the adjusting entry needed on December 31? In November, BOC received a $5,000 cash deposit from a customer for custom-build goods that will be delivered in January (BOC recorded an entry for this $5,000 in November). Now, it is December 31, the end of the fiscal year.
a. Dr. Unearned Revenue 5,000
b. Cr. Inventory 5,000
c. No entry needed.
d. Dr. Cash 5,000
e. Cr. Revenue 5,000
f. Dr. Advances from Customers 5,000
g. Cr. Revenue 5,000
h. Dr. Unearned Revenue 5,000
i. Cr. Revenue 5,000
Answer:
The correct option is C,no entry needed
Explanation:
The $5,000 received as as revenue in advance would have been debited to cash and credited to revenue in advance as a liability,hence as at December 31st of the same year,no single adjusting entry is required since the actual sales of goods did not take place in December.
In January,when sales is expected to have taken place by transferring the goods paid for to the customer,the adjustment in the books of accounts would a credit to sales revenue and a debit to revenue in advance.
VUESTIUNI
occurs when information is shared with some stockholders of the company and not with all of them.
a. Price per share
b. Underwriting
C. Capital gains
d. Insider corruption
e. Insider trading
Answer:
e. Insider trading.
Explanation:
Insider trading occurs when information is shared with some stockholders of the company and not with all of them.
According to the United States of America, Securities and Exchange Commission (SEC); Illegal Insider trading involves the "buying or selling of a security, in breach of a fiduciary duty or other relationship of trust and confidence, on the basis of material, non-public information about the security."
In the stock exchange market, any information that possibly could impact an investor's decision substantially to buy or sell the security is known as material information while informations that is not legally available to the public is non-public information.
A potential investor who has access to insider information would definitely have an advantage or unfair edge over other investors, who obviously don't have same privileges, and could potentially make unfair-large profits.
U.S SEC is very much concerned with maintaining a fair marketplace, thus requiring that all transactions be timely submitted electronically.
This week's assignment is to pretend that the career services office at your university wants to develop a system that collects student resumes and makes them available to students and recruiters over the Web. Students should be able to input their résumé information into a standard resume template. The information then is presented in a résumé format, and it also is placed in a database that can be queried through an online search form. You have been placed in charge of the project.
a. Create the work breakdown structure (WBS) listing the tasks that will need to be completed to meet the project's objectives.
Answer:
The aim here is to create a list of tasks that will enable the team to complete and deliver the project within the given timeline. It would be appropriate if there are four students selected and each of them is assigned particular tasks based on the kind of background they have. They would be obliged to keep track of their progress and share it with everyone else on a regular basis so that the project can be completed on time.
Hope that answers the question, have a great day!
Cheer, Inc., wishes to expand its facilities. The company currently has 8 million shares outstanding and no debt. The stock sells for $34 per share, but the book value per share is $42. Net income for Teardrop is currently $4.7 million. The new facility will cost $50 million and will increase net income by $800,000. The par value of the stock is $1 per share. Assume a constant price-earnings ratio.
a-1.
Calculate the new book value per share. Assume the stock price is constant. (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)
a-2. Calculate the new total earnings. (Do not round intermediate calculations and enter your answer in dollars, not millions of dollars, rounded to the nearest whole number, e.g., 1,234,567.)
a-3. Calculate the new EPS. Include the incremental net income in your calculations. (Do not round intermediate calculations and round your answer to 4 decimal places, e.g., 32.1616.)
a-4. Calculate the new stock price. Include the incremental net income in your calculations. (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)
a-5. Calculate the new market-to-book ratio. (Do not round intermediate calculations and round your answer to 3 decimal places, e.g., 32.161.)
b. What would the new net income for the company have to be for the stock price to remain unchanged? (Do not round intermediate calculations and enter your answers in dollars, not millions of dollars, rounded to the nearest whole number, e.g., 1,234,567.)
Answer:
Explanation:
Solution :- (A)
(1) :- Book value per share = Total Assets / Total Number of Shares
Total Assets = ( $42 * 8,000,000 ) + $50,000,000 = $386,000,000
Total No. of Shares = ( $50,000,000 / 34 ) + 800,000 = 9,470,588.24
Book Value per share = $386,000,000 / 9,470,588.24
= $40.76
(2)
New Total Earnings = Current Net Income + Additional Income
= $4,700,000 + 800,000
= $5,500,000
(3)
New EPS = New Earnings / New total number of shares
= $5,500,000 / 9,470,588.24
= $0.581
(4)
New Price of Stock =
Old EPS = 4,700,000 / 8,000,000 = 0.5875
New Price = P/E Ratio * New EPS
= ( 34 / 0.5875 ) * 0.5807
= $33.61
(5) New Market to Book Ratio
= Market price / Book Value
= $33.61 / $40.76
= 0.825 times
(b)
Net Income = EPS old * Total New number of shares
= $0.5875 * 9,470,588
= $5,563,970.45
What is online bill payment? A. a service that provides consumers with credit for bill payments B. a service that pays bills without consumer verification C. a service that allows consumers to set up recurring payments D. a bill-organizing service that banks offer in traditional banking
Answer: B
Explanation:
C. Online bill payment is a service that allows consumers to set up recurring payments for their bills.
How is this service used?Through this service, individuals can schedule automatic payments for various bills, such as utilities, credit cards, loans, and more. It provides convenience, saving time and effort, as consumers don't need to manually initiate each payment.
Online bill payment typically involves securely linking a bank account or credit card to the service, ensuring timely and efficient bill settlement. It's a popular feature offered by banks and financial institutions, enhancing the ease of managing regular expenses for users.
Option C is correct.
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Total payroll of Walnut Co. was $1,900,000, of which $330,000 represented amounts paid in excess of $118,500 to certain employees. The amount paid to employees in excess of $7,000 was $1,480,000. Income taxes withheld were $461,000. The state unemployment tax is 1.2%, the federal unemployment tax is .8%, and the F.I.C.A. tax is 7.65% on an employee's salaries and wages to $118,500 and 1.45% in excess of $118,500.
(a) Prepare the journal entry for the salaries and wages paid.
(b) Prepare the entry to record the employer payroll taxes.
Answer:
A.
Dr Salaries and Wages Expense $1,900,000,
Cr Withholding Taxes Payable $461,000,
Cr FICA Taxes Payable 124,890
Cr Cash 1,314,110
B.
Dr Payroll Tax Expense 158,535
Cr FICA Taxes Payable 150,135
Cr FUTA Taxes Payable 3,360
Cr SUTA Taxes Payable 5,040
Explanation:
Walnut Co
A.
Dr Salaries and Wages Expense $1,900,000,
Cr Withholding Taxes Payable $461,000,
Cr FICA Taxes Payable 124,890
Cr Cash 1,314,110
(1,900,000 – $330,000) × 7.65%+ ($330,000 × 1.45%)
=1,570,000×0.0765+4,785
=120,105+4,785
B.
Dr Payroll Tax Expense 158,535
Cr FICA Taxes Payable 150,135
($1900,000 × 7.65%) + ($330,000 × 1.45%)
(145,350+4,785)
Cr FUTA Taxes Payable 3,360
($1,900,000 – $1,480,000) × .8%
420,000×.8%
Cr SUTA Taxes Payable 5,040
($420,000 × 1.2%)
Consider a Swiss subsidiary (Swiss AS) of a US firm, Kendall Systems. The current exchange rate is $0.80/SF. Swiss AS sells 6 million units, of which 3 million are sold at home and 3 million are exported selling at SF15/unit. It has fixed overhead costs of SF 6 million and direct costs (labor, raw material, etc.) of SF 10/unit. The firms has a straight line depreciation of SF 1 million each year and has a tax rate of 30%.
As a result of sudden depreciation of SF from $0.80/SF to $0.75/$, prices remain same at home (SF15 / unit) but there is an increase in export prices to SF20 / unit). Costs remain same.
Find the Cash flows in $ post-depreciation of SF?
a.
$21.28 million
b.
$20.70 million
c.
$19.95 million
d.
$22.08 million
Answer:
The Cash flows in $ post-depreciation of SF is $20.70 million. The right answer is b
Explanation:
To calculate the Cash flows in $ post-depreciation of SF we would to have to make the following table:
Description Domestic sale Export sale Total
Selling revenue -
(3000000*15) 45,000,000 45,000,000
(3000000*20) 60,000,000 60,000,000
Variable cost
(3000000*10) (30,000,000) (30,000,000)
(3000000*10) (30,000,000) (30,000,000)
Contribution 45,000,000
Fixed cost (6,000,000)
Depreciation (1,000,000)
Profit before tax 38,000,000
Tax 30% (11,400,000)
Profit after tax 26,600,000
Add depreciation 1,000,000
Cash profit after tax 27,600,000
Exchange rate $ 0.75
Cash flow in USD 27,600,000*0.75
Cash flow in USD $ 20,700,000
The Cash flows in $ post-depreciation of SF is $20.70 million
Lakeisha is a management assistant at the Fourth Bank and Trust Company of Pasadena. Wilson is a senior vice president of the bank. The romantic attraction between Lakeisha and Wilson was very strong and they have become lovers. Wilson is concerned that the bank and he could be accused of sexual harassment. The director of human resources recommends that Wilson and Lakeisha sign a "love contract." Although such arrangements are not a perfect solution to liability in such a situation, Wilson decides to send Lakeisha a letter that:
a. Restate the voluntary nature of their relationship and assure Lakeisha that decisions regarding her employment will not be influenced by the end of their relationship.
b. Affirm that they end the relationship with immediate effect and that Lakeisha accept money in return for any damages caused during their relationship.
c. Affirm that they shall resolve any work-related dispute through litigation and not through other alternative dispute resolution mechanisms.
d. Restate that under no circumstances shall Lakeisha adopt retaliatory conduct against Wilson in the future if their relationship ends in a bad manner.
Answer:
d. Restate that under no circumstances shall Lakeisha adopt retaliatory conduct against Wilson in the future if their relationship ends in a bad manner
Explanation:
In such a situation, Wilson decides to send Lakeisha a letter that:
Restate that under no circumstances shall Lakeisha adopt retaliatory conduct against Wilson in the future if their relationship ends in a bad manner even though the romantic attraction between Lakeisha and Wilson was very strong and they have become lovers in which Wilson is concerned that the bank and he could be accused of sexual harassment which is why The director of human resources recommends that Wilson and Lakeisha sign a "lovecontract." Despite such arrangements was not a perfect solution to liability.
Journalize the following transactions of Trapper Jon’s Productions. Assume 360 days in a year. If an amount box does not require an entry, leave it blank.
June 23 Received a $48,000, 90-day, 8% note dated June 23 from Radon Express Co. on account.
Sept. 21 The note is dishonored by Radon Express Co.
Oct. 21 Received the amount due on the dishonored note plus interest for 30 days at 10% on the total amount charged to Radon Express Co. on September 21.
June 23
Notes Receivable __________
Accounts Receivable-Radon Express Co. _______
Sept. 21
Accounts Receivable-Radon Express Co. _________
Notes Receivable ________
Interest Revenue _________
Oct. 21
Cash ________
Accounts Recelvable-Radon Express Co. _____
Interest Revenue ________
Answer:
June 23 Received a $48,000, 90-day, 8% note dated June 23 from Radon Express Co. on account.
Dr Notes receivable 48,000 Cr Accounts receivable 48,000Sept. 21 The note is dishonored by Radon Express Co.
Dr Accounts receivable 48,960 Cr Notes receivable 48,000 Cr Interest revenue 960When a customer defaults on a note, the company is allowed to convert the note back to accounts receivable and charge any accrued interests. Depending on the client, the company can give them more time (by switching back the note into accounts receivable) or the company can write off the note and try to sell it to a collection company.
Oct. 21 Received the amount due on the dishonored note plus interest for 30 days at 10% on the total amount charged to Radon Express Co. on September 21.
Dr Cash 49,368 Cr Accounts receivable 48,960 Cr Interest revenue 408Enviro Company issues 8%, 10-year bonds with a par value of $230,000 and semiannual interest payments. On the issue date, the annual market rate for these bonds is 10%, which implies a selling price of 87 1/2. The straight-line method is used to allocate interest expense.1. Using the implied selling price of 87 ½, what are the issuer's cash proceeds from issuance of these bonds?2. What total amount of bond interest expense will be recognized over the life of these bonds?3. What is the amount of bond interest expense recorded on the first interest payment date?
Answer:
Cash proceeds is $201,250.00
Explanation:
The cash proceeds derived from issuing the bonds can be computed as follows:
cash proceeds=87.5%*$230,000=$201,250.00
Total interest expense on the bond is $212,519 as contained in the attached bond amortization schedule
The first payment=$201,250*10%*6/12=$10,063 as it also found in the attached
You have two clients that are considering trading machinery with each other. Although the machines are different from each other, you believe that an assessment of expected cash flows on the exchanged assets will indicate the exchange lacks commercial substance. Your clients would prefer that the exchange be deemed to have commercial substance, to allow them to record gains. Here are the facts:
Client A Client B
Original cost $104,700 $158,100
Accumulated depreciation 43,600 79,800
Fair value 88,400 115,700
Cash received (paid) 27,300 27,300
Record the trade-in on Client A's books assuming the exchange has commercial substance.
Record the trade-in on Client A's books assuming the exchange lacks commercial substance.
Answer:
the exchange has commercial substance
New Machine at Fair Value $115,700 (debit)
Cash Received $27,300 (debit)
Accumulated Depreciation Asset Given Up $43,600 (debit)
Cost of Asset Given Up $104,700 (credit)
Profit from Exchange $81,900 (credit)
the exchange lacks commercial substance.
New Machine at Carrying Amount of Asset Given up $61,100 (debit)
Cash Received $27,300 (debit)
Accumulated Depreciation Asset Given Up $43,600 (debit)
Cost of Asset Given Up $104,700 (credit)
Profit from Exchange $27,300 (credit)
Explanation:
the exchange has commercial substance
Cost price of Asset acquired is measured at Fair Value of Asset given up.
the exchange lacks commercial substance.
Cost price of Asset acquired is measured at Carrying Amount of Asset given up.
Shamrock Co. purchased land as a factory site for $456,000. The process of tearing down two old buildings on the site and constructing the factory required 6 months.
The company paid $47,880 to raze the old buildings and sold salvaged lumber and brick for $7,182. Legal fees of $2,109 were paid for title investigation and drawing the purchase contract. Shamrock paid $2,508 to an engineering firm for a land survey, and $77,520 for drawing the factory plans. The land survey had to be made before definitive plans could be drawn. Title insurance on the property cost $1,710, and a liability insurance premium paid during construction was $1,026. The contractor’s charge for construction was $3,123,600. The company paid the contractor in two installments: $1,368,000 at the end of 3 months and $1,755,600 upon completion. Interest costs of $193,800 were incurred to finance the construction.
Determine the cost of the land and the cost of the building as they should be recorded on the books of Martin Buberk Co. Assume that the land survey was for the building.
Answer and Explanation:
According to the scenario, computation of the given data are as follow:-
Cost of Land Recorded on The Book of Martin Buberk Co.
Particular Amount ($)
Cost of land 456,000
Add-company paid to raze the old building($47,880-$7,182) 40,698
Add-Title insurance on the property cost 1,710
Add-Legal fees paid 2,109
Total cost of land 500,517
Cost of Building Recorded on the Book of Martin Buberk Co.
Particular Amount ($)
Cost of drawing the factory plans 77,520
Add-Land survey cost 2,508
Add-Liability insurance premium paid during construction 1,026
Add-contractor’s charge for construction 3,123,600
Add-Interest cost 193,800
Total cost of building 3,398,454
We simply applied the above format
Presented below is information related to Hale Corporation: Share Capital—Ordinary, P1 par P4,300,000 Share premium—Ordinary 550,000 Share Capital—Preference 8 1/2%, P50 par 2,000,000 Share premium—Preference 400,000 Retained Earnings 1,500,000 Treasury Shares—Ordinary (at cost) 150,000 The total contributed capital related to the ordinary shares is
Answer:
$4,850,000
Explanation:
The computation of the total contributed capital related to the ordinary shares is shown below:
= Ordinary share capital + share premium of ordinary share
= $4,300,000 + $550,000
= $4,850,000
We simply added the ordinary share capital and the share premium of ordinary shares so that the total contributed capital could arrive
Liukko Corporation's standard wage rate is $14.90 per direct labor-hour (DLH) and according to the standards, each unit of output requires 2.8 DLHs. In June, 1,800 units were produced, the actual wage rate was $15.80 per DLH, and the actual hours were 5,110 DLHs. The Labor Efficiency Variance for June would be recorded as a:__________.
a. credit of $1,043.
b. debit of $1,043.
c. credit of $1,106.
d. debit of $1,106.
Answer:
Direct labor time (efficiency) variance= $1,043 unfavorable
Direct labor time (efficiency) variance= $1,043 debit
Explanation:
Giving the following information:
The standard wage rate is $14.90 per direct labor-hour (DLH)
Each unit of output requires 2.8 DLHs.
In June, 1,800 units were produced, the actual wage rate was $15.80 per DLH, and the actual hours were 5,110 DLHs
First, we need to calculate the direct labor efficiency variance:
Direct labor time (efficiency) variance= (Standard Quantity - Actual Quantity)*standard rate
Direct labor time (efficiency) variance= (2.8*1,800 - 5,110)*14.9
Direct labor time (efficiency) variance= $1,043 unfavorable
Owen wants to contribute cash or capital gain property or stock to a charitable organization this year. Assume his adjusted gross income for the year will be $150,000 and that he only plans to make one of the following donations.
If he contributes $100,000 cash to a public charity, he can deduct $ __________ this year.
If he contributes property that is worth $80,000 to a public charity, he can deduct $ ___________ .
Or, if he contributes publicly traded stock with a FMV of $60,000 and a basis of $40,000 to a private non-operating foundation, he can deduct $ __________ this year.
Answer:
$90,000; $45,000; $30,000.
Explanation:
In the United States of America, tax payers get reduction in the amount of taxes that they pay when taxpayers donate money to charity. The deductions in tax depends on the charity organization the tax payer is donating to and the kind of property the tax payer is donating.
Below is how it is been deducted;
(1). As regards to public charity, only 60% can be deducted from the adjusted gross income.
(2).As regards to Capital gain property contribution to public charity, only 30% can be deducted from the adjusted gross income.
(3). As regards to Capital gain property contribution to private non operating foundation, only 20% can be
In the question above, the adjusted gross income for the year will be = $150,000 deducted from the adjusted gross income.
Therefore, for (1). 60/100 × $150,000 = $90,000.
(2). 30/100 × 150,000 = $45,000.
(3). 20/100 × 150,000 = $ 30,000.
Miracle Pill. Katie advertised that she had developed a pill for women that would result in weight loss, wrinkle loss, and improved vitality; and for men would result in all those things, plus hair growth. Her television advertisement showed miracle results allegedly obtained by consumers. Katie cautioned, however, that ingestion of the pill for six months was required before results would be evident. The pill was wildly popular. The Federal Trade Commission, however, investigated and determined that Katie had failed to have a reasonable basis for the claims she made in advertisements. Katie claimed that she was merely involved in the use of generalities and clear exaggerations. The Federal Trade Commission disagreed and issued a formal administrative complaint against her. After a hearing, the Federal Trade Commission issued an order requiring that Katie stop advertising and selling the pills. After losing all appeals, Katie continued selling the pills until she was fined by the Federal Trade Commission. She has since left the country and cannot be located. If a company violates a cease-and-desist order issued by the Federal Trade Commission and upheld by the courts, which of the following is the fine that the Federal Trade Commission may impose?
A) Up to $3,000 per violationB) Up to $5,000 per violationC) Up to $10,000 per violationD) Up to $50,000 per violationE) Up to $100,000 per violation
Answer:
B) Up to $5,000 per violation
Explanation:
FTC or U.S. Federal Trade Commission is a federal agency that is independent and its major objective is to enforce various consumer protection and anti-trust laws.
Sharon is a skilled toy maker who is able to produce both trucks and puzzles. She has 8 hours a day to produce toys. The following table shows the daily output resulting from various possible combinations of her time.
Choice Hours Producing Produced
(Trucks) (Puzzles) (Trucks) (Puzzles)
A 8 0 4 0
B 6 2 3 11
C 4 4 2 16
D 2 6 1 19
E 0 8 0 20
Required:
1. Suppose Sharon is currently using combination D, producing one truck per day. Her opportunity cost of producing a second truck per day is _________ per day.2. Now, suppose Sharon is currently using combination C, producing two trucks per day. Her opportunity cost of producing a third truck per day is_________ per day.
Answer:
1. Opportunity Cost of 2nd truck from 1st Truck = 1T : 3P
2. Opportunity Cost of 3rd truck from 2nd truck = 1T : 5P
Explanation:
Choice Hours Producing Produced
(Trucks) (Puzzles) (Trucks) (Puzzles)
A 8 0 4 0
B 6 2 3 11
C 4 4 2 16
D 2 6 1 19
E 0 8 0 20
Opportunity Cost is the cost of a good sacrifised to achieve additional unit of other good.
From point D ( 1 truck) to point C ( 2nd truck ), opportunity cost in terms of puzzles sacrifised is 19 - 16 = 3. So, opportunity cost is 1T : 3P From point C ( 2 trucks ) to point D (3rd truck ), opportunity cost in terms of puzzles sacrifised is 16 - 11 = 5. So, opportunity cost is 1T : 5PSharon's opportunity cost of producing a second truck per day is 3 puzzles, and that of producing a third truck per day is 5 puzzles.
1) Since Sharon is currently using combination D, producing one truck per day. Her opportunity cost of producing a second truck per day is 3 puzzles per day.
This is so because by producing 2 trucks, she has the capacity to produce 16 puzzles, while by producing just 1 truck, she can produce 19 puzzles (19-16 = 3).
2) Given that Sharon is currently using C, producing two trucks per day. Her opportunity cost of producing a third truck per day is 5 puzzles per day.
This is so because by producing 3 trucks, she has the capacity to produce 11 puzzles, while by producing 2 trucks, she can produce 16 puzzles (16-11 = 5).
Learn more about opportunity cost in https://brainly.com/question/8846809
XYZ Manufacturing decides to build a new plant. The plant will cost $20 million today and is expected to have a useful life of 20 years. At the end of year 5, 10 and 15, there will be major renovation expenses of $K each time. The plant will produce level returns of $2.5 million at the end of each year for the first 10 years and $5 million at the end of each year for the second 10 years. Find the maximum value of K that XYZ could pay so that the internal rate of return on its investment is at least 12%. (Round your answer to integer)
Answer:
The answer is "$ 3,005,010.27".
Explanation:
Let those cash flows be in millions of dollars
[tex]NPV = -20+(\fatc{2.5}{1.12}+\frac{2.5}{1.12^2}+...+\frac{2.5}{1.12^{10}} +\frac{5}{1.12^9}+\frac{5}{1.12^{10}}+...+\frac{5}{1.12^{20}} - \frac{K}{1.12^5}+\frac{K}{1.12^{10}}+ \frac{K}{1.12^{15}})[/tex]
[tex]\ max \ value \ of \ K \ so, \ NPV = 0\\\\ \Rightarrow -20+(\frac{2.5}{1.12}+\frac{2.5}{1.12^2}+...+\frac{2.5}{1.12^{10}} +\frac{5}{1.12^9}+\frac{5}{1.12^{10}}+...+\frac{5}{1.12^{20}}) - (\frac{K}{1.12^5}+\frac{K}{1.12^{10}}+ \frac{K}{1.12^{15}}) = 0[/tex]
[tex]\Rightarrow -20+\frac{2.5}{0.12}\times(1-\frac{1}{1.12^{10}})+ \frac{1}{1.12^{10}}\times \frac{5}{0.12}\times (1-\frac{1}{1.12^{10}})- 1.072096*K = 0 \\\\\Rightarrow 3.221661 = 1.072096*K \\\\\Rightarrow K = 3.00501 \\[/tex]
The value of k = "$ 3,005,010.27".
KAPC, a pharmaceutical company located in rural Kansas, is finding it difficult to retain its employees, who frequently leave after just six months of working at KAPC for jobs at pharmaceutical companies paying higher wages in Chicago. To address its problem with labor turnover, human resource officers at KAPC decide to run an experiment. Of their next 100 newly hired employees, 25 will randomly be selectedto receive a housing voucher worth up to $4,000 per year to offset property taxes. To take advantage of this program, the employee must not only be randomly selected into the program but she must also purchase a home. Of the 25 employees selected into the housing voucher program, 7 leave KAPC within 12 months of starting. Of the 75 employees not selected into the program, 37 leave KAPC within 12 months of starting.
a. Provide an estimate of the effect the housing voucher program has on retention at KAPC.
b. Suppose KAPC spends $10,000 in hiring costs each time a position is vacated. Would you endorse expanding the housing voucher program to all new employees? Justify your decision.
Answer: a) Positive Effect.
b) No.
Explanation:
a) Out of the 25 that were offered the housing program, 7 left in the first year after starting.
This proportion goes to,
= 7/25
= 28%
Only 28% of people left when offered the housing program.
When people were not offered the housing program, 37 left in the first year out of 75.
That means the proportion of those who left is,
= 37/75
= 49%.
When people were not offered the programme, 49% of them left. This means that offering the program reduces the turnover rate by 21% which means that it has a positive effect.
b) No it would be more expensive to expand it to everyone.
Currently, the total cost of hiring and offering the program the company is going through is,
= (4,000 * 25 people ) + (10,000 * 7 for those who still left ) + (10,000 * 37 for those who left with no housing plan)
= 100,000 + 70,000 + 370,000
= $540,000
If it is expanded to everyone then the following costs are incurred,
28% of the 100 would still leave even after offered the programme so the company would have to spend to replace them.
= (100 * 4,000 if all Employees offered) + (28 * 10,000 to replace employees that will still leave)
= 400,000 * 280,000
= $680,000
Expanding the program is more expensive than keeping it as it is. They should therefore not expanded it.
The Regal Cycle Company manufactures three types of bicycles—a dirt bike, a mountain bike, and a racing bike. Data on sales and expenses for the past quarter follow: Total Dirt Bikes Mountain Bikes Racing Bikes Sales $ 919,000 $ 265,000 $ 400,000 $ 254,000 Variable manufacturing and selling expenses 478,000 116,000 203,000 159,000 Contribution margin 441,000 149,000 197,000 95,000 Fixed expenses: Advertising, traceable 69,700 8,400 40,600 20,700 Depreciation of special equipment 43,200 20,100 7,400 15,700 Salaries of product-line managers 114,600 40,400 38,100 36,100 Allocated common fixed expenses* 183,800 53,000 80,000 50,800 Total fixed expenses 411,300 121,900 166,100 123,300 Net operating income (loss) $ 29,700 $ 27,100 $ 30,900 $ (28,300)*Allocated on the basis of sales dollars.Management is concerned about the continued losses shown by the racing bikes and wants a recommendation as to whether or not the line should be discontinued. The special equipment used to produce racing bikes has no resale value and does not wear out.Required:1a. What is the impact on net operating income by discontinuing racing bikes? (Decreases should be indicated by a minus sign.)Current total total if racing bikes are dropped Difference: Net operating income increase or (Decrease)? ? ? ?? ? ? ?Contribution margin: (loss) ? ? ?Fixed expense: - - -? ? ? ?? ? ? ?? ? ? ?? ? ? ?Total fixed expenses ? ? ?Net operating income (loss) ? ? ?** On the first column insert from the list stated in the bottom with the missing ?**(sales, variable expenses, advertising traceable , depreciation on special equipment, salaries of product managers, common allocated costs) 2a. Prepare a segmented income statement. Totals Dirt Bike Mountain Bikes Racing Bikes? ? ? ? ?? ? ? ? ?Contribution margin (loss) ? ? ? ?Traceable fixed expenses: - - - -? ? ? ? ?? ? ? ? ?? ? ? ? ?Total traceable fixed expenses ? ? ? ?? ? ? ? ?? ? - - -Net operating income (loss) ? - - -** On the first column insert from the list stated in the bottom with the missing ?**(Sales, Variable manufacturing and selling expenses, Advertising, depreciation of special equipment, salaries of the product line managers, product line segment margin, common fixed expenses)
Answer:
Explanation:
Please see answer to the given question in the file attached below
Sweet Dreams Chocolatiers Ltd. began operations on January 1, 2020. During its first year, the following transactions occurred:
1. Issued common shares for $200,000 cash.
2. Purchased $483,000 of inventory on account.
3. Sold inventory on account for $675,000. The original cost of the inventory that was sold was $405,000.
4. Collected $562,000 from customers on account.
5. Paid $431,000 to suppliers for the inventory previously purchased on account.
6. Bought a delivery vehicle for $39,000 cash.
7. Paid $27,300 for rent, including $2,100 related to the next year.
8. Incurred $20,000 of operating expenses, of which $18,000 was paid.
9. Recorded $2,000 of depreciation on the vehicle.
10. Declared and paid dividends of $8,500.
Requireda. Prepare journal entries to record each of the above transactions.b. Create T accounts and post the journal entries to the T accounts.
Answer:
Explanation:
Journal entry is a record of transaction in their respective accounts using the debit and credit system. Debit entry represents an increase and credit a decrease.
S / NO Particulars Debit Credit
1 Cash 200,000
Share stock 200,000
2 Inventory 483,000
Account payable 483,000
3. Account receivable 675,000
Sales 675,000
Cost of goods 405,000
Inventory 405,000
4 Cash 562,000
Account receivable 562,000
5 Account payable 431,000
Cash 431,000
6 Motor Vehicle 39,000
Cash 39,000
7 Rent 25200
Prepaid rent 2100
Cash 27300
8 Operating Expenses 20,000
Cash 18,000
Operating exp payable 2,000
9 Depreciation 2,000
Motor Vehicle 2,000
10 Dividends payable 8500
Cash 8500
A construction company is bidding on a project comprising five high-rise buildings to be erected one after the other. The company considers the purchase of a set of advanced, hydraulically operated tunnel forming systems for $20/sf. The forms are to be used 200 times for the forming of 1,000 sf of walls and 1,000 sf of slabs per use on a series of residential buildings over a period of 4 yr, and then they will be sold. Salvage value is expected to be 10% of original purchase price. No maintenance costs are expected. Labor productivity is estimated at 0.025 labor hr/sf. Hourly wages are $22. Consider 5% annual interest rate. What is the average formwork cost (material
Answer:
Explanation:
The two attached pictures explains the problem and is so explanatory.
Thunder Bolt Inc., is a manufacturer of the very popular G36 motorcycles. The management at Thunder Bolt has recently adopted absorption costing and is debating which denominator-level concept to use. The G36 motorcycles sell for an average price of $8,200. Budgeted fixed manufacturing overhead costs for 2012 are estimated at $6,480,000. Thunder Bolt Inc., uses subassembly operators that provide component parts. The following are the denominator-level options that management has been considering:a. Theoretical capacity--based on three shifts, completion of five motorcycles per shift, and a 360-day year--3 x 5 x 360 = 5,400.b. Practical capacity--theoretical capacity adjusted for unavoidable interruptions, breakdowns, and so forth--3 x 4 x 320 = 3,840.c. Normal capacity utilization--estimated at 3,240 units.d. Master-budget capacity utilization--the strengthening stock market and the growing popularity of motorcycles have prompted the marketing department to issue an estimate for 2012 of 3,600 units.Required:1. Calculate the budgeted fixed manufacturing overhead cost rates under the four denominator-level concepts.2. What are the benefits to Thunder Bolt, Inc., of using either theoretical capacity or practical capacity?3. Under a cost-based pricing system, what are the negative aspects of a master-budget denominator level? What are the positive aspects?
Answer:
Explanation:
Ans1. budgeted fixed manufacturing overhead costs rates:
denominator, level capacity concept budgeted fixed manufacturing overhaed per period budgeted capacity level budgeted fixed manufacturig overhead cost rate ;
theoritical= $6,480,000 5,400$1,200.00
practical 6,48,000 3,840 1,687.50
normal 6,480,000 3240 2,000.00
master - budget 6,480,000 3,600 1,800
The rates are different because of varying denominator- level concepts. theoriitical and practical capacity levels are driven by supply-side concepts,i.e," how much can I produce?" Normal and master budgete capacity levels are driven by demand- side concepts, i.e ," how much can I sell"/
Ans 2 :- The variance that arise from use of the theoritical or practical levels concepts will signal that there is a divergence between for capacity. this is useful input to managers. As a general rule, however , it is important not to place undue reliance on the production volume variance as a measure of the economic costs of unused capacity.
Ans 3:- Under a cost - based pricing system, the choice of a master - budget level deniminator will lead to high prices when demand is low (more fixed costs allocated to the individual product level), further eroding demand ; conversely ,it will lead to low prices when demand ; conversely , it will lead to low prices when demand is high, forgoig profits. This has been refered to as the downward demand spiral- the continuing reduction in demand that occurs when the prices of the competitors are not met and demand drops , resulting in even higher unit costs and even more reluctance to meet the prices of competitors. The positive aspects of the master - budget denominator level are that it is based on demand for the product and indicates the price at which all costs per unit would be recovered to enable teh company to make a profit.Master budget denominator level is also a good bench mark against which to evaluate performance.
On September 1 of the current year, Joy Tucker established a business to manage rental property, She completed the following transactions during September.
a. Opened a business bank account with a deposit of $49,000 in exchange for common stock.
b. Purchased office supplies on account, $3,010.
c. Received cash from fees earned for managing rental property, $8,240.
d. Paid rent on office and equipment for the month, $3,690.
e. Paid creditors on account, $1,370. Billed customers for fees earned for managing rental property, $6,840.
g. Paid automobile expenses for month, $820, and miscellaneous expenses, $410.
h. Paid office salaries, $2,600
l. Determined that the cost of supplies on hand was $1,780; therefore, the cost of supplies used was $1,230. Paid dividends $2,460.
Required:
1. Indicate the effect of each transaction and the balances after each transaction.
Answer:
a. Assets : Increase $49,000 , Equity : Increase $49,000 , Liabilities : No Effect
b. Assets : Increase $3,010 , Equity : No Effect , Liabilities : Increase $3,010
c. Assets : Increase $8,240 , Equity : Increase $8,240 , Liabilities : No Effect
d. Assets : decrease $3,690 , Equity : decrease $3,690 , Liabilities : No Effect
e. Assets : decrease $1,370 , Equity : No Effect , Liabilities : decrease $1,370
f. Assets : Increase $6,840 , Equity : Increase $6,840 , Liabilities : No Effect
g.Assets : decrease $1,230 , Equity : decrease $1,230 , Liabilities : No Effect
h.Assets : decrease $2,600 , Equity : decrease $2,600 , Liabilities : No Effect
i. Assets : decrease $2,460 , Equity : decrease $2,460 , Liabilities : No Effect
Explanation:
For Each Transaction First Identify the Two Accounts Affected and Then classify in one of the Categories of Assets , Liabilities and Equity. Finally determine the effect (decrease/increase/no effect in the category items are placed.
A firm must choose from six capital budgeting proposals outlined below. The firm is subject to capital rationing and has a capital budget of $1,000,000; the firm's cost of capital is 15 percent. Please show the work.
Project Initial Investment IRR NPV
1 $200,000 19% $100,000
2 400,000 17 20,000
3 250,000 16 60,000
4 200,000 12 -5,000
5 150,000 20 50,000
6 400,000 15 150,000
Using the internal rate of return approach to ranking projects, which projects should the firm accept?
Using the net present value approach to ranking projects, which projects should the firm accept?
Answer:
On IRR basis projects 1, 2, 3, and 5 will be selected.
On NPV basis projects 1, 3, 5, and 6 will be selected.
Explanation:
The firm will accept or choose all the project that has a higher or equal internal rate of interest than cost of capital. However, in the given case project 4 has a lower internal rate of interest (12 percent) than the cost of capital. Thus, projects 1, 2, 3, and 5 will be chosen by the firm. While the firm has budget constraints so it will have no money for projects 4 and 6.
The firm will select all the projects with positive NPV when there is no budget constraint. But in case of budget constraint, the firm will select the project that has high NPV. Thus, Project 1, 6, 3, and 5 will be selected and there will be no money left for projects 2 and 4.
Why do you think government bonds usually have a low risk of default?
Answer:
In particular, the explanation government bonds being viewed as a secure option for investment is that they are guaranteed by the administration's absolute faith and confidence. Most shareholders are convinced government of the country won't default itself on debt trustees commitments.
Also if certain issues raised governments holds the power to increase taxes on the investment as well as they have the printing power of currency which makes such investments risk free.