Answer:
Value of a stock = $1.89
Explanation:
The value of a firm is the present value of the by the free cashflow discounted at the required rate of return
Value of the firm = FCF/(WACC- g)
FCF- free cash flow
WACC- Cost of capital = 13%
g- growth rate= 5%
= 10,000/(0.13-0.05)= 125,000,000
Value of a stock = Value of firm/No of shares
= $125,000,000/66,000,000 units
= $1.89
John blodgett is the managing partner of a business that has just finished building a 60 room mote boldgett aticipates that he will rent these rooms for 15000 nights nesxt year all rooms are similar and will rent for the same price blodgett estimates the following operating costs for next year the capital invested in the motel is $900000 the paritnarship target return on investment is 25% blodgett expect demand for rooms to be uniform throughout the year he plans to price the rooms at full cost plus markup on full cost to earn the target return on invesment
Variable operating cost $5per room-nigh
Total fixed costs 375000
What price should blodgett charge room night ?what is the markup as percentage of the full requried cost of room might
Answer:
a. Price Blodgett should charge $45 (see below)
b. Markup percentage of the full cost of room night:
Markup = $15
Full Cost =$30
Therefore, percentage of markup to full cost = 15/30 * 100 = 50%
Explanation:
a) Costs Calculations:
Unit cost Total cost
Variable $5 $75,000 ($5 x 15,000)
Fixed Cost $25 $375,000 ($375,000/15,000)
Full Cost $30 $450,000 ($30 x 15,000, or $75,000 + $375,000)
Markup $15 $225,000 ($900,000 x 25% returns)
Price to charge $45 $675,000
Coronado manufactures competition stunt kites. In November, Jerry Box prepared the following production budget for the first quarter of the coming year. Desired ending inventory is based on the following month's budgeted sales. January February March Quarter Budgeted unit Sales 24,100 39,300 32,200 95,600 Budgeted ending inventory 7,860 6,440 2,870 2,870 Total units required 31,960 45,740 35,070 98,470 Beginning inventory 4,820 7,860 6,440 4,820 Budgeted production 27,140 37,880 28,630 93,650 Following higher-than-expected sales in December, Jerry conducted an inventory count on January 2 and discovered that the company had only 2,260 completed kites on hand. He decided that given the brisk sales in December, the company should increase its desired ending inventory level from 20 to 25 percent of the next month's sales volume. Prepare a new production budget for the first quarter. (Round answers to 0 decimal places, e.g. 5,275.) January February March Quarter
Answer:
New Production Budget:
January February March Quarter
Budgeted unit Sales 24,100 39,300 32,200 95,600 Budgeted ending inventory 9,825 8,050 3,588 3,588 Total units required 33,925 47,350 35,788 99,188 Beginning inventory 6,025 9,825 8,050 6,025 Budgeted production 27,900 37,525 27,738 93,163
Explanation:
a) Prepared Production Budget:
January February March Quarter
Budgeted unit Sales 24,100 39,300 32,200 95,600 Budgeted ending inventory 7,860 6,440 2,870 2,870 Total units required 31,960 45,740 35,070 98,470 Beginning inventory 4,820 7,860 6,440 4,820 Budgeted production 27,140 37,880 28,630 93,650
b) Budgeted Ending Inventory changed from 20% to 25% of the next month's sales. The April sales was estimated using the ending inventory of March for the prepared budget. This is calculated as follows:
Sales for April = 2,870/20% = 14,350 units
Therefore, the March ending inventory for the new production budget is equal to 25% of 14,350 = 3,588 units.
c) Production budget is an estimate of the units to be produced based on the sales forecast, desired ending inventory (safety stock to cover for unexpected increases in sales) and the period's beginning inventory level.
Which of the following is the closest example of perfect price discrimination? Group of answer choices At an auction of antique furniture, each piece of furniture is sold to the highest bidder An electric utility charging higher rates to the customers in the summer season than in the winter season An airline providing discounts to its frequent-flyers as they fly more A golf-club imposing a very high entry fee to reduce membership requests
Answer:
At an auction of antique furniture, each piece of furniture is sold to the highest bidder
Explanation:
Price discrimination is when a seller charges different prices for the same good to different consumers based on their willingness to pay.
The aim of price discrimination is to eliminate consumer surplus
I hope my answer helps you
Robert Gillman, an equity research analyst at Gillman Advisors, believes in efficient markets. He has been following the mining industry for the past 10 years and needs to determine the constant growth rate that he should use while valuing Pan Asia Mining Co. Robert has the following information available:
• Pan Asia Mining Co.’s stock (Ticker: PAMC) is trading at $22.50.
• The company’s stock is expected to pay a year-end dividend of $1.08 that is expected to grow at a certain rate.
• The stock’s expected rate of return is 10.80%.
Based on this information, Robert's forecast of PAMC's growth rate of earning and dividends should be:__________.
Answer:
Growth rate in dividend and earnings = 10%
Explanation:
The Dividend Valuation Model is a technique used to value the worth of an asset. According to this model, the worth of an asset is the sum of the present values of its future cash flows discounted at the required rate of return.
The model is given as
P = D× g/(r-g)
P- price of stock, g - growth rate in dividend, r- required rate of return
P- 22.50, r- 10.80%, g- ?
22.50 = ( 1.80 ×g)/(0.108-g)
Cross multiplying
22.50 × (0.108 - g) = 1.80 × g
2.43 - 22.50g= 1.80 g
1.80g + 22.50g = 2.43
24.3 g = 2.43
g= 2.43/24.3= 0.1
g = 0.1 × 100 = 10%
Growth rate = 10%
Partial income statements for Murphy & Murphy (M & M) reported the following summarized amounts:
Quarter 1 Quarter 2 Quarter 3 Quarter 4
Net Sales $ 60,000 $ 59,000 $ 80,000 $ 68,000
Cost of Goods Sold 24,000 26,550 29,050 26,520
Gross Profit $ 36,000 $ 32,450 $ 50,950 $ 41,480
After these amounts were reported, M & M’s accountant determined the inventory at the end of Quarter 2 was understated by $2,950. The inventory balance at the end of the other three quarters was accurately stated.
Required:
Restate the partial income statements to reflect the correct amounts, after fixing the inventory error.
Answer and Explanation:
According to the scenario, The presentation of the given data are as follows:-
Partial Income Statement
Particular Quarter 1 amount ($) Quarter 2 amount ($) Quarter 3 amount ($) Quarter 4 amount ($)
Net Sales 60,000 59,000 80,000 68,000
Cost of sold goods 24,000 23,600 32,000 26,520
Gross Profit 36,000 35,400 48,000 41,480
($32,450 + $2,950) ($50,950 - $2,950)
Quarter 2 was understated by $2,950 at the end of the inventory.
Quarter 2 cost of sold goods
= Cost of sold goods - understated amount
= $26,550 - $2,950
= $23,600
Quarter 3 cost of sold goods
= Cost of sold goods + understated amount
= $29,050 + $2,950
= $32,000
29. The difference between noninterest income and noninterest expenses on a bank's Report of Income is
called:
A. Net Profit Margin
B. Net Interest Income
C. Net Income After Provision for Possible Loan Losses
D. Income or Loss Before Income Taxes
E. Net Noninterest Income
Determine whether each survey question is biased or unbiased. If biased, explain your reasoning. Do you prefer watching exciting football games or sitting through choir recitals?
1. biased; the question addresses more than one issue.
2. biased; the question encourages a certain response.
3. unbiased biased; the question causes a strong reaction.
Answer: 2. biased; the question encourages a certain response.
Explanation:
The question is biased because it already makes assumptions of the two activities.
It labels football games as EXCITING whilst asking if one would 'SIT THROUGH' choir recitals which is a way of saying that the choir recitals are BORING.
This question therefore elicits a certain response as most people would go with the Exciting activity so as not to be seen as boring people who would go to choir recitals.
Consider the following situations for Shocker:
a) On November 28, 2021, Shocker receives a $4,500 payment from a customer for services to be rendered evenly over the next three months. Deferred Revenue is credited.
b) On December 1, 2021, the company pays a local radio station $2,700 for 30 radio ads that were to be aired, 10 per month, throughout December, January, and February. Prepaid Advertising is debited.
c) Employee salaries for the month of December totaling $8,000 will be paid on January 7, 2022.
d) On August 31, 2021, Shocker borrows $70,000 from a local bank. A note is signed with principal and 9% interest to be paid on August 31, 2022.
Required:
Record the necessary adjusting entries for Shocker at December 31, 2021. No adjusting entries were made during the year. (If no entry is required for a particular transaction/event, select "No Journal Entry Required" in the first account field. Do not round intermediate calculations.)
Answer:
a.
Cash $4,500 (debit)
Deferred Revenue $4,500 (credit)
b.
Prepaid Advertising $2,700 (debit)
Cash $2,700 (credit)
c.
Salaries Expense $8,000 (debit)
Salaries Accrued $8,000 (credit)
d.
J1
Cash $70,000 (debit)
Note Payable $70,000 (credit)
J2
Interest Expense $2,100 (debit)
Note Payable $2,100 (credit)
Explanation:
a.
Recognize Cash and Deferred Revenue
b.
Recognize Asset - Prepaid Advertising and De-recognize Cash
c.
Recognize Salaries Expense and Recognize Salaries Accrued Liability
d.
J1
Recognize Cash Asset and Recognize Liability - Note Payable
J2
Recognize Interest income accrued on the Note Payable during September to December.
Placker Corporation uses a job-order costing system with a single plantwide predetermined overhead rate based on machine-hours. The company based its predetermined overhead rate for the current year on total fixed manufacturing overhead cost of $155,000, variable manufacturing overhead of $3.40 per machine-hour, and 50,000 machine-hours. Recently, Job A881 was completed with the following characteristics:
Total machine-hours 100
Direct materials $ 645
Direct labor cost $ 2,300
The total job cost for Job A881 is closest to: (Round your intermediate calculations to 2 decimal places.)
a. $1,295
b. $3,595
c. $2,950
d. $2,945
Answer:
Option B,$ 3,595.00 is correct
Explanation:
The sum of both fixed and variable manufacturing overhead gives the below amount:
total overhead=$155,000+($3.40*50,000)=$ 325,000.00
Plantwide predetermined overhead rate=total overhead/machine hours=$325,000.00/50,000.00=$6.50
The job cost=(100*$6.50)+$645+$2,300=$650+$645+$2,300=$ 3,595.00
The correct option is B $ 3,595.00
Option C shows that the total job cost is sum of direct labor cost plus the overhead which is wrong.
Option D showed that the total cost is the sum of direct labor cost plus the direct material which is also wrong
If an email message is going _________of the organization, the writer should include a salutation that can simply state the individual's name.
Options:
1) Inside
2) Outside
3) Inside and Outside
4) All of the Above
Answer:
2) Outside
Explanation:
When writing an email, let's say the email is going outside of the the company, the name, salutation are suppose to be included so as to indicted who the email is meant for, without indicating the name, it would not be known who the email is meant for, since the email is going outside the organization and not within it.
Answer:
1) Inside
Explanation:
When a mail is being sent the salutation used is dependent on if the recipient is internal or external.
A more casual salutation is used for internal recipients like colleagues or team mates, with the first name of the person stated then comma.
For example Hi John,
For external recipients it is more formal. It can be in the format Dear (Title) (Name) and then comma.
For example Dear Mr. Samuel,
Delsing Canning Company is considering an expansion of its facilities. Its current income statement is as follows:
Sales $ 6,200,000
Variable costs (50% of sales) 3,100,000
Fixed costs 1,920,000
Earnings before interest and taxes (EBIT) $ 1,180,000
Interest (10% cost) 440,000
Earnings before taxes (EBT) $ 740,000
Tax (30%) 222,000
Earnings after taxes (EAT) $ 518,000
Shares of common stock 320,000
Earnings per share $ 1.62
The company is currently financed with 50 percent debt and 50 percent equity (common stock, par value of $10). In order to expand the facilities, Mr. Delsing estimates a need for $3.2 million in additional financing. His investment banker has laid out three plans for him to consider:
Sell $3.2 million of debt at 14 percent.
Sell $3.2 million of common stock at $20 per share.
Sell $1.60 million of debt at 13 percent and $1.60 million of common stock at $25 per share.
Variable costs are expected to stay at 50 percent of sales, while fixed expenses will increase to $2,420,000 per year. Delsing is not sure how much this expansion will add to sales, but he estimates that sales will rise by $1.60 million per year for the next five years.
Delsing is interested in a thorough analysis of his expansion plans and methods of financing.He would like you to analyze the following:
Required:
a. The break-even point for operating expenses before and after expansion (in sales dollars). (Enter your answers in dollars not in millions, i.e, $1,234,567.)
b. The degree of operating leverage before and after expansion. Assume sales of $6.2 million before expansion and $7.2 million after expansion. Use the formula: DOL = (S − TVC) / (S − TVC − FC). (Round your answers to 2 decimal places.)
c-1. The degree of financial leverage before expansion. (Round your answers to 2 decimal places.)
c-2. The degree of financial leverage for all three methods after expansion. Assume sales of $7.2 million for this question. (Round your answers to 2 decimal places.)
d. Compute EPS under all three methods of financing the expansion at $7.2 million in sales (first year) and $10.1 million in sales (last year). (Round your answers to 2 decimal places.)
Answer:
Explanation:jl
Please check the file attached for the solution to the given problem
Automobile firms can use their inputs to make hybrid cars or "regular" (non-hybrid) cars. If the equilibrium price of hybrid cars rises sharply, the resulting shift in the supply curve for "regular" cars will cause:
Answer: a) an increase in the Equilibrium price of "regular" cars.
Explanation:
It is stated that the automobile companies use their inputs to make either the hybrid cars or the regular cars.
If the price of the Hybrid cars rises sharply, Automobile companies will make more Hybrid cars so as to take advantage of the situation and make more profit.
This would reduce the amount of inputs that they have available for regular cars and so they will make less regular cars.
As this supply of regular cars decreases,the supply curve will shift to the left and the price will increase to cater for this reduction in supply.
There are two firms in an industry. The industry demand curve is given by p = 3,600 - 4q. Each firm has one manufacturing plant and each firm i has a cost function C(q_i) = q^2_i, where q_i is the output of firm i. The two firms form a cartel and arrange to split total industry profits equally.
Required:
a) Under this cartel arrangement, they will maximize joint profits if ___________.
Answer:
Under this cartel arrangement, they will maximize joint profits if each of the firms produces 257.14 units and sells at $1,542.88 per unit.
Explanation:
p = 3,600 - 4q ..................................................... (1)
C(q_i) = q_i^2 ………………………………… (2)
MC_i = dC(q_i)/dq = 2q_i ……………………. (3)
Since q = q_1 + q_2, we have:
p = 3,600 - 4(q_1 + q_2)
p = 3,600 - 4q_1 - 4q_2 .................................... (4)
For Firm 1:
TR_1 = p * q_1 = (3,600 - 4q_1 - 4q_2)q_1
TR_1 = 3,600q_1 - 4q_1^2 - 4q_2q_1
MR_1 = dTR_1/dq_1 = 3,600 - 8q_1 - 4q_2
From equation (3), MC_1 = 2q_1
Since at the optimum MC_1 = MR_1, we have:
2q_1 = 3,600 - 8q_1 - 4q_2
10q_1 = 3,600 - 4q_2
q_1 = (3,600 - 4q_2)/10
q_1 = 360 - 0.4q_2 .......... (5)
For Firm 2:
TR_2 = p * q_2 = (3,600 - 4q_1 - 4q_2)q_2
TR_2 = 3,600q_2 - 4q_2q_1 - 4q_2^2
MR_2 = dTR_2/dq_2 = 3,600 - 4q_1 - 8q_2
From equation (3), MC_2 = 2q_2
Since at the optimum MC_2 = MR_2, we have:
2q_2 = 3,600 - 4q_1 - 8q_2
10q_2 = 3,600 - 4q_1
q_2 = (3,600 - 4q_1)/10
q_2 = 360 - 0.4q_1 .......... (6)
a. Calculation of Cournot equilibrium quantities
Substituting equation (6) for q_2 into equation (5), we have:
q_1 = 360 - 0.4(360 - 0.4q_1)
q_1 = 360 – 144 + 0.16q_1
q_1(1 – 0.16) = 216
q_1 = 216 / 0.84
q_1 = 257.14 <------------- Cournot equilibrium quantity for firm 1
Substitute for q_1 in equation (6), we have:
q_2 = 360 - 0.4(257.14)
q_2 = 360 – 102.86
q_2 = 257.14 <------------- Cournot equilibrium quantity for firm 2
b. Calculation of Cournot equilibrium price
Substitute for q_1 and q_2 into equation (4), we have:
p = 3,600 – 4(257.14) – 4(257.14)
p = 1,542.88
Therefore, under this cartel arrangement, they will maximize joint profits if each of the firm produces 25.14 and sells at $1,542.88 per unit.
Morganton Company makes one product, and it provided the following information to help prepare the master budget for its first four months of operations:a. The budget selling price per unit is $70. Budgeted unit sales for June, July, August, and September are 9,100, 22,000, 24,000, and 25,000 units, respectively. All sales are credit.b. Forty percent of credit sales are collected in the month of the sale and 60% in the following month.c. The ending finished goods inventory equals 20% of the following month's unit sales.d. The ending raw materials inventory equals 10% of the following month's raw materials production needs. Each unit requires 4 pounds of raw materials at $2.50 per pound.e. 40% of raw materials purchases are paid for in the month of purchase and 60% in the following month.f. The direct labor wage rate is $12 per hour. Each unit of finished goods requires two direct labor hours.g. The variable selling and administrative expense per unit sold is $1.70. The fixed selling and administrative expense per month is $61,000.1. If 96,800 pounds of raw materials are needed to meet production in August, how many pounds of raw materials should be purchased in July?2. What is the estimated cost of raw materials purchases for July?3. If the cost of raw material purchases in June is $127,520, what are the estimated cash disbursements for raw materials purchases in July?4. What is the estimated accounts payable balance at the end of July?5. What is the estimated raw materials inventory Balance (in dollars) at the end of July?6. What is the total estimated direct labor costs for July assuming the direct labor workforce is adjusted to match the hours required to produce the forecasted number of units produced?7. If the company always uses an estimated predetermined plantwide overhead rate of $12 per direct labor hour, what is the estimated unit product cost?8. What is the estimated finished goods inventory balance at the end of July, if the company always uses an estimated predetermined plantwide overhead rate of $12 per direct labor-hour?9. What is the estimated cost of goods sold and gross margin for July, if the company always uses an estimated predetermined plantwide overhead rate of $12 per direct labor hour?10. What is the estimated net operation income for July, if the company always uses an estimated predetermined plantwide overhead rate of $12 per direct labor hour?
Answer and Explanation:
1)
BUDGETED SELLING PRICE $ 70 *
BUDGETED UNITS IN JULY 22000
BUDGETED SALES $ 1,540,000
2)
SALES
CASH 40% $ 616,000
CREDIT 60 % OF PREVIOUS MONTH $ 382,200
RAW MATERIAL
RAW MATERIAL PURCHASES COST
40 % PAID NOW JULY $260900 $ 104,360
60 % PREVIOUS MONTH JUNE $ 159980 $ 95,988
LABOR
$12 PER HOUR * (24980 * 2)$ 599,520
VARIABLE EXPENSES $ 37,400
($1.70 * 22000)
FIXED EXPENSES $ 61,000
CASH INFLOW $ 99,932
3)
SALES IN JULY $ 1,540,000
60 % OUTSTANDING $ 924,000
4) 2980 UNITS SHOULD BE PRODUCED
JUNE JULY AUGUST SEP
SALES UNIT 9100 22000 24000 25000
CLOSING UNITS4400 4800 5000 -
20% OF NEXT MONTH SALE
OPENING UNITS - 1820 4400 4800
20% OF PREVIOUS MONTH SALE
FINISHED GOODS REQUIRED
13500 24980 24600 20200
SALES + CLOSING - OPENING
RAW MATERIAL REQUIRED
54000 99920 98400 80800
FINISHED GOODS REQUIRED * 4
CLOSING UNITS9992 9840 8080 -
10% OF NEXT MONTH NEEDS
OPENING UNITS - 5400 9992 9840
10% OF PREVIOUS MONTH NEEDS
RAW MATERIAL PURCHASES
63992 104360 96488 70960
Employees who report unethical behavior in their own workplace (whistleblowers) are protected by law. However, many are reluctant to draw negative attention to their companies because of loyalty to the company or fear of reprisals. Chances are good you will encounter questionable behavior at your workplace at some point during your career. How you respond will be a measure of your ability to analyze issues and choose the responsible option.
How can you blow the whistle legally and ethically?
A. If you can't find any satisfactory solutions to the problem, change jobs.
B. If you can't find any satisfactory solutions to the problem, accept the situation.
C. If you can't find any satisfactory solutions to the problem, sue the company
Answer:
Try to correct the problem from within the company.
Explanation:
In many cases, the ability to respond more responsibly to a problem in the workplace can be resolved internally. Communicating the unethical problem to the supervisor or a responsible person you trust within the company, can generate a quick and immediate solution for the problem to be solved, before taking the situation to a deeper level, such as a process for example. Because it is not always possible for the supervisor to be aware of all the problems that involve the organizational environment, so communication is the most effective way of trying to solve the problems.
Answer:
Talk to someone you trust for advice
Explanation:
Carla Vista Co. had these transactions during the current period.
June 12 Issued 83,000 shares of $1 par value common stock for cash of $311,250.
July 11 Issued 4,300 shares of $103 par value preferred stock for cash at $107 per share.
Nov. 28 Purchased 2,400 shares of treasury stock for $9,350.
Required:
Prepare the journal entries for the Carla Vista Co. transactions shown above. (Record journal entries in the order presented in the problem.)
Answer:
June 12
Dr Cash 83,000
Cr Common Stock (83,000 × $1)
Dr Paid in capital in excess of par value 311,250
Cr Common Stock 311,250
July 11
Dr Cash 460,100
Cr Preferred Stock 442,900
Cr Paid in Capital in excess of par value -Preferred Stock 17,200
Nov. 28
Dr Treasury Stock 9,350
Cr Cash 9,350
Explanation:
Journal entries for Carla Vista Co.
June 12
Dr Cash 83,000
Cr Common Stock (83,000 × $1)
Dr Paid in capital in excess of par value 311,250
Cr Common Stock 311,250
July 11
Dr Cash 460,100
(4,300 × $107)
Cr Preferred Stock 442,900
(4,300 × $103)
Cr Paid in Capital in excess of par value -Preferred Stock 17,200
(4,300 × $4)
Nov. 28
Dr Treasury Stock 9,350
Cr Cash 9,350
If you can download 10 ring tones for your cell phone
for $15 or you could download 11 ring tones for
your cell phone for $16, then the marginal cost of the
eleventh ring tone is
Answer:
Marginal cost of eleventh ring tone = $1
Explanation:
Given:
Cost of 10 ringtone = $15
Cost of 11 ringtone = $16
Find:
Marginal cost of eleventh ring tone = ?
Computation:
Marginal cost = change in cost / change in quantity
Marginal cost of eleventh ring tone = change in total cost / change in number of ringtone
Marginal cost of eleventh ring tone = ($16 - $15) / (11 - 10)
Marginal cost of eleventh ring tone = $1 / 1
Marginal cost of eleventh ring tone = $1
The adjusted trial balance for Waterway Industries at the end of the current year, 2021, contained the following accounts. 5-year Bonds Payable 9% $3000000 Interest Payable 48000 Premium on Bonds Payable 98000 Notes Payable (3 months.) 38000 Notes Payable (5 yr.) 166000 Mortgage Payable ($13000 due currently) 200000 Salaries and wages Payable 16000 Income Taxes Payable (due 3/15 of 2022) 23000 The total long-term liabilities reported on the balance sheet are $_______.
Answer:
The total long-term liabilities reported on the balance sheet are $3,451,000.
Explanation:
Details Amount ($)
Bonds Payable 9% 3,000,000
Premium on Bonds Payable 98,000
Notes Payable (5 yr.) 166,000
Mortgage Payable (200,000 - 13,000) 187,000
The total long-term liabilities 3,451,000
On November 1, 2021, Warren Co. adopted a plan to discontinue its barge division, which qualifies as a separate component of the business according to GAAP regarding discontinued operations. The disposal of the division was expected to be concluded by April 30, 2022. On December 31, 2021, the company's year-end, the following information relative to the discontinued division was accumulated:Operating loss Jan. 1–Dec. 31, 2021 $ 74 million Estimated operating losses, Jan. 1 to April 30, 2022 96 million Excess of fair value, less costs to sell, over book value at Dec. 31, 2021 11 million In its income statement for the year ended December 31, 2021, Warren would report a before-tax loss on discontinued operations of:A. $170 million.B. $159 million.C. $74 million.D. $63 million.
Answer:
C. $74 million
Explanation:
The computation of before-tax loss on discontinued operations is shown below:-
Before-tax loss on discontinued operations = Operating loss (From Jan 1 to 31 Dec 2021)
= $74 million
Here, the assets are not impaired, because the fair value is greater than the book value. So, $74 million can be recorded as it is the operating loss and the same is to be considered
For each of the following financial ratios that are based on comprehensive annual financial report (CAFR) information by selecting the appropriate letter of the explanation for that ratio. Answers can only be used once.
A. An indicator of interperiod equity.
B. An indicator of the government’s commitment to replacement of capital assets.
C. An indicator of the government’s reliance on revenues it does not directly control.
D. A measure of the degree to which government assets have been funded with debt.
E. An indicator of the government’s ability to pay its 60- to 90-day obligations.
F. A measure of the government’s capacity to issue debt.
G. A measure of capital asset useful service life.
H. A measure of the government’s liquidity.
I. An indicator of taxpayer debt burden.
J. An indicator of the government’s ability to withstand financial emergencies.
Ratio
1. General fund balances/General Fund operating revenues
2. (Cash + short-term investments)/Current liabilities
3. General obligation long-term debt/Assessed valuation
4. Capital outlay from operating funds/Operating expenditures
5. General bonded debt Legal debt limit
6. Accumulated depreciation/Average cost of depreciable assets
7. Net revenues/Total expenses
8. Charges for services/Total revenues
9. Total liabilities/Total assets
10. Current assets/Current liabilities
Answer:
An indicator of interperiod equity.
Net revenues/Total expenses
An indicator of the government's commitment to replacement of capital assets
Capital outlay from operating funds/Operating expenditures
An indicator of the government's reliance on revenues it does not directly control.
. Non-tax revenues/Total revenues
A measure of the degree to which government assets have been funded with debt.
Total liabilities/Total assets
An indicator of the government's ability to pay its 60 to 90-day obligations.
(Cash + short-term investments)/Current liabilities
A measure of the government's capacity to issue debt.
General bonded debt/Legal debt limit
A measure of capital asset useful service life.
Accumulated depreciation/Average cost of depreciable assets
A measure of the government's liquidity.
Current assets/Current liabilities
An indicator of taxpayer debt burden.
General obligation long-term debt/Assessed valuation
An indicator of the government's ability to withstand financial emergencies
General fund balances/Operating revenues
Centre College, a private liberal arts college in Central Kentucky, charged (billed) tuition and fees of $50,000 based on the registration of students; Centre provided scholarships of $12,000 to the registered students. The entry to bill the tuition and fees and scholarships would include a: A. Debit to Tuition and Fees, $50,000. B. Debit to Tuition Discounts and Allowances, $12,000. C. Credit to Tuition and Fees, $38,000. D. Credit to Tuition Discounts and Allowances, $14,000.
Answer: B. Debit to Tuition Discounts and Allowances, $12,000.
Explanation:
A scholarship is considered a discount so should be recorded as one. When recording a discount, it is debited to its own account which in this case will be the Tuition Discounts and Allowances account.
The full entries are,
DR Cash (50,000 - 12,000) $38,000
DR Tuition Discounts and Allowances $12,000
CR Tuition and Fees $50,000
Ben, an accountant for AirLift, Inc., a ride service, learns of undisclosed company plans to distribute a new app. Ben buys 10,000 shares of AirLift stock. He reveals the company plans to Carly, who buys 5,000 shares. Carly tells Don, who tells Erwin, and each buys 1,000 shares. They know that Carly got her information from Ben. When AirLift publicly announces its new app, Ben, Carly, Don, and Erwin sell their stock for a profit. If Ben is liable under the Securities Exchange Act of 1934, it will be because the information on which he based his purchase of AirLift stock was:
A. a forward-looking forecast.B. not material.C. not yet public.D. not yet true.
Answer:
C. not yet public.
Explanation:
Securities Exchange Act: The term "Securities Exchange Act" is also denoted as SEA and was created during 1934, it was developed to govern or carry out "securities transactions" based on the less manipulation or fraud, secondary market, ensures huge financial accuracy and transparency and after issues.
Basically, it refers to the law that is responsible for governing the "Secondary trading securities" in the USA. It also prevents unfair and inequitable practices on specific market and exchange.
In the question above, the correct option is C.
Answer:
C. not yet public.
Explanation:
Securities Exchange Act 1934 is a legal framework governing secondary trading of securities in USA.
Ben is liable under Securities Exchange Act of 1934, as he has leaked the 'not yet public' information for personal motives. His act of disclosing about app launch & buying shares then (for reselling further after launch) : is a case of Insider Trading. Insider Trading refers to deliberate disclosure of company's confidential information, for selfish motives accomplishment.
A Company is evaluating rental prices. Historical data show that Friday and Saturday have twice the rentals of other days of the week. The following information pertains to the store's normal operations per week: Average rentals per day on Friday and Saturday 1,350 Average rentals per day on Sunday through Thursday 600 Store hours per day 10 Total units available for rent 10,000 Variable operating costs per hour $43 Marketing costs per week $1,800 Customer service costs per week $250 The store manager wants to charge more for rentals on Friday and Saturday. What is the minimum price that should be charged during peak rental days? (Round your answer to the nearest cent.)
Answer:
$1.01
Explanation:
For computing the minimum price first we need to find the following things which are shown below:
1. Variable operating cost per week.
= Variable operating costs per hour × Store hours per day × number of days
= $43 × 12 hours per day × 7 days
= $3,612
2. Now total cost per week is
Total cost per week = Variable operating costs per week + Marketing costs per week + Customer service costs per week
= $3,612 + $1,900 + $250
= $5,762
3. After calculating, the minimum price is
= Total costs per week ÷ Rental per week
where,
Total cost per week is $5,762
And, the rental per week is
= ($1,350 × 2 days) + ($600 × 5 days)
= $2,700 + $3,000
= $5,700
So, the minimum price is
= $5,762 ÷ $5,700
= $1.01
An office has 5 copy machines that need to be serviced approximately once an hour either for paper, staples, or toner or repair. Each machine therefore runs approximately 1 hour before needing some attention. The average service time is 7 minutes. Copier downtime in this busy office costs approximately $20 per hour. The cost of attendant is $15 per hour. Using the finite queuing analysis, answer the following questions:________.
a. What is the average number of copiers in line?
b. What is the average number of copiers still in operation?
c. What is the average number of copiers being serviced?
d. The firm is considering adding another attendant at the same $15 rate. Should the office do it?
Answer:
a. Average number of copiers in line is 0.275
b. Average number of copiers still in operation is 4.23
c. Average number being serviced is 0.496
d. No, the office should not do it
Explanation:
N = number of copy machines = 5
U = average time between unit service requirements = 1 hour = 60 minutes
T = average service time = 7 minutes
M = number of servers = 1
Cost of copier downtime = $20
Cost of attendant = $15
(a) Service factor, X = T / (T+U) = 7 / (60+7) = 0.105
From the Finite Queuing Tables for a Population of N = 5,
For X = 0.105 and M=1, the efficiency factor, F = 0.945
So, The average number waiting in line, L = N × (1 - F) = 5 × (1 - 0.945) = 0.275
(b) Average number in operation, J = N×F×(1 - X) = 5×0.945×(1 - 0.105) = 4.23
(c) Average number being serviced, H = F×N×X = 0.945×5×0.105 = 0.496
(d) For M=1
The average number of copier down = N - J = 5 - 4.23 = 0.77
So, cost of downtime per hour = $20×0.77 = $15.4
Also, the cost of the server per hour = $15×M = $15×1 = $15
So, total cost = 15.4 + 15 = $30.4 per hour (i)
For M=2
From the Finite Queuing Tables for a Population of N = 5, with X = 0.105 and M=2, the efficiency factor, F = 0.997
J = N×F×(1 - X) = 5×0.997×(1 - 0.105) = 4.46
The average number of copier down = N - J = 5 - 4.46 = 0.54
So, cost of downtime per hour = $20×0.54 = $10.8
Also, the cost of the server per hour = $15×M = $15×2 = $30
So, total cost = 10.8 + 30 = $40.8 per hour (ii)
Comparing (i) and (ii), we can say that having another attendant is not cost-effective.
client is using the Sales on Account workflow. Instead of receiving a payment against the invoice, they add a new deposit categorized to an income account.
Answer:two answers. Their accounts receivable balance will not be accurate. And the income account will show duplicate income.
Explanation:
The company makes 12,000 units of this part each year. The company's Accounting Department reports the following costs of producing the part at this level of activity: Per Unit Direct materials $ 6.30 Direct labor $ 5.70 Variable overhead $ 4.80 Fixed Costs: Supervisor's salary $ 7.00 Depreciation of special equipment $ 8.60 Common fixed overhead $ 7.20 An outside supplier has offered to produce this part and sell it to the company for $37.70 each. If this offer is accepted, the supervisor will be fired. The special equipment used to make the part was purchased many years ago and has no salvage value or other use. If the outside supplier's offer were accepted, common fixed costs would be reduced by $17,000. Now assume that the facilities that had been used to produce part S54 could be used for something else if S54 parts are purchased from an outside supplier. If this is true, would you be more likely or less likely to outsource S54 to the outside contractor?
Answer:
we will be more likely to outsource S54 to the outside contractor
Explanation:
Calculating the outsource contractor
Make Buy
Direct material 75600
Direct labour 68400
Variable overhead 57600
Supervisor's salary 84000
Allocated general overhead 17000
Purchase cost 452400
Total 302600 452400
The annual financial gain for the company as a result of buying the part from the outsource contractor would be (149800)
we will be more likely to outsource S54 to the outside contractor
Scarbrough Corp. factored $600,000 of accounts receivable to Duff Corp. on October 1, year 2. Control was surrendered by Scarbrough. Duff accepted the receivables subject to recourse for nonpayment. Duff assessed a fee of 3% and retains a holdback equal to 5% of the accounts receivable. In addition, Duff charged 15% interest computed on a weighted-average time to maturity of the receivables of fifty-four days. The fair value of the recourse obligation is $9,000. Scarbrough will receive and record cash of
$556,685
$547,685
$538,685
$529,685
Vaughn Manufacturing assigns $4570000 of its accounts receivables as collateral for a $2.99 million loan with a bank. The bank assesses a 3% finance charge on the loan amount and charges interest on the note at 5%. What would be the journal entry to record this transaction?
Debit Cash for $2026800, debit Interest Expense for $89700, debit Due from Bank for $1580000, and credit Accounts Receivable for $4570000.
Debit Cash for $2900300, debit Interest Expense for $89700, and credit Notes Payable for $2990000.
Debit Cash for $2900300, debit Interest Expense for $89700, and credit Accounts Receivable for $2990000.
Debit Cash for $2750800, debit Interest Expense for $239200, and credit Notes Payable for $2990000.
Answer:
Scarbrough will receive and record cash of $538,685
The journal entry to record this transaction would be:
Debit Credit
Cash $2,900,300
Interest Expense $89,700
Notes Payable $2,990,000
Debit Cash for $2900300, debit Interest Expense for $89700, and credit Notes Payable for $2990000
Explanation:
In order to calculate the amount Scarbrough will receive and record cash we would have to make the following calculation:
Scarbrough will receive and record cash=Receivables-Amount of the hold back-Withheld as fee income-Less: Withheld as interest expense
Receivables= $600,000
Amount of the hold back=$600,000 x 5%=$30,000
Withheld as fee income=$600,000 x 3%=$18,000
Withheld as interest expense=$600,000 × 15% × 54/365=$13,315
Therefore, Scarbrough will receive and record cash=$600,000- $30,000-$18,000-$13,315=$538,685
Scarbrough will receive and record cash of $538,685
According to the given data to journal entry to record this transaction would be the following:
Debit Credit
Cash $2,900,300
Interest Expense $89,700
Notes Payable $2,990,000
Interest Expense=$2,990,000 x 3%=$89,700
Pacific Bank provides loans to businesses in the community through its Commercial Lending Department. Small loans (less than $100,000) may be approved by an individual loan officer, while larger loans (greater than $100,000) must be approved by a board of loan officers. Once a loan is approved, the funds are made available to the loan applicant under agreed-upon terms. Pacific Bank has instituted a policy whereby its president has the individual authority to approve loans up to $5,000,000. The president believes that this policy will allow flexibility to approve loans to valued clients much quicker than under the previous policy. As an intern auditor of Pacific Bank, how would you reposnd to this change in policy?
Answer:
Explanation:
As auditor, I may not agree with the policy that is been changed. It
is believed that, by default there is a normal loan risk that is been associated with the business of Pacific Bank. A way to help reduce this risk is to carefully asses the loan applications. Loans that are large has greater risk in the event of default compared to smaller loans. Therefore, it is reasonable to have more than several individual involved in decision making give a loan that is very big. In addition, loans should be given base on those that meet the requirements, it should not be on the base on favoritism or people with relationship with bank president. Giving the bank president the power to give huge loans may lead to him granting loans to people who he is familiar with, without the required due process been followed. This may cause the bank to be credit exposed risks that are poor.
The following information is available for Sage Hill Corporation for the year ended December 31, 2022.
Beginning cash balance $43,000
Accounts payable decrease 3,500
Depreciation expense 75,000
Accounts receivable increase 8,700
Inventory increase 12,100
Net income 337,000
Cash received for sale of land at book value 43,000
Sales revenue 740,000
Cash dividends paid 11,800
Income tax payable increase 4,400
Cash used to purchase building 145,000
Cash used to purchase treasury stock 33,900
Cash received from issuing bonds 258,000
Required:
1. Prepare a statement of cash flows using the Indirect method. (Show amounts that decrease cash flow with either a - sign e.g.-15,000 or in parenthesis e.g. (15,000).)
Answer:
Statement of cash flows for the year ended December 31, 2022
Cash flow from Operating Activities
Net income 337,000
Adjustment for Non - Cash Items :
Depreciation expense 75,000
Adjustment for Working Capital Items :
Accounts payable decrease (3,500)
Accounts receivable increase (8,700)
Inventory increase (12,100)
Income tax payable increase 4,400
Net Cash from Operating Activities 392,100
Cash flow from Investing Activities
Cash received for sale of land at book value 43,000
Cash used to purchase building (145,000)
Net Cash from Investing Activities (102,000)
Cash flow from Financing Activities
Cash dividends paid (11,800)
Cash used to purchase treasury stock (33,900)
Cash received from issuing bonds 258,000
Net Cash from Financing Activities 212,300
Movement During the year 502,400
Cash and Cash Equivalents at Beginning of the year 43,000
Cash and Cash Equivalents at End of the year 545,400
Explanation:
Prepare the Cash flow Statement under the following headings :
Cash flow from Operating ActivitiesCash flow from Investing ActivitiesCash flow from Financing ActivitiesThe term "benchmarking" as it relates to the hotel industry refers to a line-by-line analysis of an operating statement, comparing metrics for hotels of similar size or profile
Answer:
The term "benchmarking" as it relates to the hotel industry refers to comparing metrics for hotels of similar size or profile.
Explanation:
a) Benchmarking is a process wherein a company's products, services, business processes, or performance metrics are compared with a “best in class” competitor. The purpose of benchmarking is to enable organizations to make improvements by adapting specific best practices. A retail shop's metrics can be compared with the leading retail shop in your area. Given the deep insight gathered from benchmarking, this retail shop can decide to alter its line of products, the way it competes in the marketplace, or to undertake some improvements in her business processes.
There are four types of benchmarking, including internal, competitor, functional, and generic. Internal benchmarking is limited to internal processes. Competitor benchmarking compares one company's processes, products, or services to another. Functional benchmarking compares one function of an entity to another entity's. While generic benchmarking compares unrelated companies' processes or functions.