Answer:
1)
Deficiency:
There is no method for determining the exact number of members of the Art Appreciation Society that actually enter the museum every day. The person that allows them to enter is the same person that charges the entrance fee.
Recommendation:
Since there are two clerks, one should deal with paying patrons and the other one should be in charge of allowing non paying members of the Art Appreciation Society to enter the museum.
2)
Deficiency:
There is no method that controls and documents the number of paying visitors.
Recommendation:
The simplest and cheapest way to solve this issue is to issue prenumbered tickets to paying visitors.
3)
Deficiency:
There is a chance that the same clerk delivers the cash to the treasurer and goes to the bank to make the deposit. if this happens, there would be no control over the daily proceeds and the money deposited.
Recommendation:
One of the clerks should be in charge of delivering the daily proceeds to the treasurer, and the other one should be in charge of going to the bank with the treasurer. Probably the best alternative would be that the clerks change tasks every week, e.g. one week clerk 1 delivers the cash to the treasurer, next week clerk 2 should do it.
Weaknesses in the collecting and recommendation systems.
Weaknesses:One problem is that the gathered amount should not be deposited by the Treasurer and Clerk since they are collecting and retaining the money for a long time before depositing it.
Recommendation:A different individual should be selected to deposit this amount on a regular basis, as involving more people reduces the chance of fraud and ensures a flawless internal control system.
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Gould Corporation uses the following activity rates from its activity-based costing to assign overhead costs to products:
Activity Cost Pool Activity Rate
Setting up batches $59.06 per batch
Processing customer orders $72.66 per customer order
Assembling products $3.75 per assembly hour
Data concerning two products appear below:
Product K91B Product F65O
Number of batches 86 57
Number of customer orders 36 50
Number of assembly hours 490 897
Required:
How much overhead cost would be assigned to Product K91B using the activity-based costing system? (Round your intermediate calculations and final answers to 2 decimal places.)
Answer:
Total allocated overhead= $9,532.42
Explanation:
Giving the following information:
Activity Rate
Setting up batches= $59.06 per batch
Processing customer orders= $72.66 per customer order
Assembling products= $3.75 per assembly hour
Product K91B
Number of batches 86
Number of customer orders 36
Number of assembly hours 490
To allocate overhead, we need to use the following formula on each activity rate:
Allocated MOH= Estimated manufacturing overhead rate* Actual amount of allocation base
Setting up= 59.06*86= 5,079.16
Processing= 72.66*36= 2,615.76
Assembling= 3.75*490= 1,837.5
Total allocated overhead= $9,532.42
On August 31, 2021, the general ledger of The Dean Acting Academy shows a balance for cash of $7,874. Cash receipts yet to be deposited into the checking account total $3,268, and checks written by the academy but not yet processed by the bank total $1,355. The company's balance of cash does not reflect a bank service fee of $28 and interest earned on the checking account of $39. These amounts are included in the balance of cash of $5,972 reported by the bank as of the end of August.
Required:1. Prepare a bank reconciliation to calculate the correct ending balance of cash on August 31, 2021.2. Record the necessary entry(ies) to adjust the balance for cash.
Answer:
Bank Reconciliation Statement
Balance at bank as per the Cash Book (updated) $7,885
Add Unpresented Cheques $1,355
Less Bank Lodgements not yet credited ($3,268)
Balance as per bank statement $5,972
J1
Bank $39 (debit)
Interest Earned $39 (credit)
J2
Bank service fee $28 (debit)
Bank $28 (credit)
Explanation:
Step 1 Bring the Cash Balance in the Cash Book up to date
Debit :
Balance as at August 31, 2021, $7,874
Interest Earned $39
Totals $7,913
Credit:
Bank service fee $28
Balance Up dated (Balancing figure) $7,885
Totals $7,913
Step 2 Prepare the Bank Reconciliation Statement
Bank Reconciliation Statement
Balance at bank as per the Cash Book (updated) $7,885
Add Unpresented Cheques $1,355
Less Bank Lodgements not yet credited ($3,268)
Balance as per bank statement $5,972
Crane Company acquired a patent on an oil extraction technique on January 1, 2020 for $6900000. It was expected to have a 10 year life and no residual value. Crane uses straight-line amortization for patents. On December 31, 2021, the future cash flows expected from the patent were $720000 per year for the next eight years. The present value of these cash flows, discounted at Crane’s market interest rate, is $3900000. At what amount should the patent be carried on the December 31, 2021 balance sheet?
Answer:
$5,520,000
Explanation:
As per the data given in the question,
Cost = $6,900,000
Less: Amortization for 2 years = $1,380,000 ($6,900,000×2÷10)
Book value of patent = $5,520,000 ($6,900,000 - $1,380,000)
Undiscounted sum of future cash flows = $5,760,000 ($720,000×8)
Since the amount of book value is less than the amount of undiscounted sum of future cash flow, Therefore Patent should be carried on the Book value, So, Patent should be carried on the December 31,2021 balance sheet at $5,520,000
Match each scenario with the source of monopoly market power.
1. Mary McFly invents a time machine and gets legal protection from competition.
2. Main Line Utilities can operate at a lower cost than multiple electric companies.
3. The author of Economics for Dumbbells is given exclusive rights to produce this book.
4. Your city council gives All Talk Communication Services exclusive rights to build high speed internet infrastructure in your town.
5. DeJeers Jewelers owns 80% of the world's diamond mines.
Options:
O PatentO Economies of ScaleO Control over ResourcesO Government licencingO Copyright
Answer:
1. Mary McFly invents a time machine and gets legal protection from competition. Patent
2. Main Line Utilities can operate at a lower cost than multiple electric companies. Economies of Scale
3. The author of Economics for Dumbbells is given exclusive rights to produce this book. Copyright
4. Your city council gives All Talk Communication Services exclusive rights to build high speed internet infrastructure in your town.Government licencing
5. DeJeers Jewelers owns 80% of the world's diamond mines. Control over Resources
Explanation:
A monopoly is when there's only one firm operating in an industry.
Economies of scale is cost reduction that accures to a firm as a result of its large scale production. For example, a supplier might give a producer a discount for buying in bulk.
A patent is when the government or an agency of the government gives the right to produce an invention or a good for a set period, others are usually excluded making, using or selling the invention.
Copyright gives the owner of an intellectual property the exclusive right to make copies of a creative work, usually for a limited time.
If a firm has exclusive access to resocurces, it is possible for the firm to prevent other firms from entering into the industry and thus retain monopoly power.
I hope my answer helps you
Bob is a recognized french horn player. Bob has played for several major symphonies. Last year Bob went through bankruptcy and in order to pay his rent for a couple of months took out loans from a small bank - Avarice Bank - and pledged his french horn as collateral. He was unable to make the first payment on the loan so the bank was getting ready to take the french horn for non-payment. Bob approached the director of the Gilroy Philarmonic International Symphony - Joe - for help - asking him to guarantee payment so he does not lose his french horn. Joe agreed to guarantee the payment - partially because Bob is scheduled as the featured performer at the Classic Polka Festival in Gilroy which Joe manages. Joe called Avarice Bank and said if Bob could not pay, he would, and Avarice accepted his guaranty by phone. Bob played for the Polka Festival (it was very successful), but immediately after, left town and his whereabouts are unknown. Avarice has contacted Joe and indicated they have not collected from Bob and they expect Joe to pay the debt. Joe told Avarice they did not have anything in writing from him (though there are witnesses who heard Joe guarantee payment) and he believes he will not be liable for Bob's debt. Avarice has indicated it will file suit for payment against Joe.
A. Issue: What is the legal issue/dispute?
B. Support: Provide support for your decision. Describe what the law says about situations like this, and how it applies to this case.
Answer:
Explanation:
Issue - Does guarantee on phone for a debt payment is valid and enforceable in a court of law.
Decision - The guarantee is a contract and needs to be in writing and should bear the signatures of the parties in order to be enforceable. In this case, the guarantee for the debt repayment by Bob was given by Joe on phone, which does not fulfil the requirement of the contract to be enforceable.Hence the bank would not succeed in claiming payments from Joe.
Support - Guarantee for repayment of debt is a contract that authorises the creditor to recover the money from the guarantor if the debtor defaults on payment. However, the guarantee contract should be in writing ( in legal systems of most of the countries) and should be signed by the guarantor. In absence of a written contract and signature of the guarantor, the contract can't be enforced in a court of law, which is in this case. The bank should have insisted only on the written and signed consent of guarantee from Joe. As it did not, it can't hold him liable for the breach of guarantee contract.
Brooks Corporation sells computers under a 2-year warranty contract that requires the corporation to replace defective parts and to provide the necessary repair labor. During 2014, the corporation sells for cash 451 computers at a unit price of $3,110. On the basis of past experience, the 2-year warranty costs are estimated to be $159 for parts and $209 for labor per unit. (For simplicity, assume that all sales occurred on December 31, 2014.) The warranty is not sold separately from the computer.1. Record any necessary journal entries in 2014, applying the cash-basis method.2. Record any necessary journal entries in 2014, applying the expense warranty accrual method.3. What liability relative to these transactions would appear on the December 31, 2014, balance sheet and how would it be classified if the expense warranty accrual method is applied?4. In 2015, the actual warranty costs to Brooks Corporation were $24,040 for parts and $41,080 for labor. Record the journal entry in 2015, applying the cash-basis method. Use "Inventory" account to record the warranty expense.
5. In 2015, the actual warranty costs to Brooks Corporation were $24,040 for parts and $41,080 for labor. Record the journal entry in 2015, applying the expense warranty accrual method. Use "Inventory" account to record the warranty expense.
Answer and Explanation:
Brooks Corporation
1. The 2014 cash-basis journal entries will be:
Date Description Debit Credit
2014
DR Cash $1,402,610
($3,110 x 451)
CR Sales Revenue $1,402,610
No Journal entry is recorded for the possible warranty expense in a situation where the cash-basis is used.
2. The 2014 accrual method journal entries will be:
Date Description Debit Credit
2014
DR Cash $1,402,610
CR Sales Revenue $1,402,610
2014
DR Warranty expenses 165,968
($368 x 451)
CR Accrued Warranty Expense 165,968
3. On December 31, 2014, financial statements, there will be an Accrued Warranty Liability in which it will be classified as a current liability unless in a situation where the company can reasonably estimate which portion will be spent in the second year of the warranty period, in which case that portion can be classified as a long-term liability.
4. The 2014 cash-basis journal entries will be:
Date Description Debit Credit
2015
DR Warranty Expense 65,120
CR Wages Expense 41,080
CR Inventory 24,040
5. The 2014 accrual method journal entries will be:
Date Description Debit Credit
2015
DR Accrued Warranty Expense 65,120
CR Wages Expense 41,080
CR Inventory 24,040
There are five (5)
specific forces that are acting as stimulants for change, state and explain them with relevant examples
Answer:
Political, Environmental, Socio cultural, Technological and Economic
Explanation:
You want to invest in a project in Canada. The project has an initial cost of C$828,000 and is expected to produce cash inflows of C$355,000 a year for three years. The project will be worthless after the first three years. The expected inflation rate in Canada is 4 percent while it is only 3 percent in the U.S. The applicable interest rate for the project in Canada is 12 percent. The current spot rate is C$1 = $.9126. What is the net present value of this project in Canadian dollars?
Answer:
C$24,650
Explanation:
initial cost C$828,000
net cash flows for years 1, 2 and 3 C$355,000
discount rate 12%
the net present value in C$ = C$355,000/1.12 + C$355,000/1.12² + C$355,000/1.12³ - C$828,000 = C$316,964 + C$283,004 + C$252,682 - C$828,000 = C$24,650
Since we are asked to determine the NPV in Canadian dollars, all we need to do is carry out the same calculations as if they were any other currency. We do not need to make any adjustments due to the exchange rate between US dollars and Canadian dollars.
The management of Firebolt Industries Inc. manufactures gasoline and diesel engines through two production departments, Fabrication and Assembly. Management needs accurate product cost information in order to guide product strategy. Presently, the company uses a single plantwide factory overhead rate for allocating factory overhead to the two products. However, management is considering the multiple production department factory overhead rate method. The tollowing factory overhead was budgeted for Firebolt:
1 Fabrication Department factory overhead $557,750.00
2 Assembly Department factory overhead 57,550.00
3 Total $815,300.00
Direct labor hours were estimated as follows:
Fabrication Department 4,850 hours
Assembly Department 5,050
Total 9,900 hours
In addition, the direct labor hours (dlh) used to produce a unit of each product in each department were determined trom engineering records, as follows:
Production Departments Gasoline Engine Diesel Engine
Fabrication Department 31 dlh 2.1 dlh
Assembly Department 2.1 3.1
Direct labor hours per unit 5.2 dlh 5.2 dlh
a. Determine the per-unit factory overhead to the gasoline and diesel engines under the single plantwide factory overhead rate method, using direct labor hours as the activity base. If required, round all per-direct labor hours and per-unit answers to the nearest cent.
b. Determine the per-unit factory overhead allocated to the gasoline and diesel engines under the multiple production departmnet factory overhead rate method, using direct labor hours as the activity base for each department. If required, round all per-unit answers to the nearest cent.
Answer:
Instructions are below.
Explanation:
Giving the following information:
Fabrication Department factory overhead $557,750
Assembly Department factory overhead $257,550
Total $815,300.00
Direct labor hours:
Fabrication Department 4,850 hours
Assembly Department 5,050
Total 9,900 hours
Production Departments Gasoline Engine Diesel Engine
Fabrication Department 3.1 dlh 2.1 dlh
Assembly Department 2.1 3.1
Direct labor hours per unit 5.2 dlh 5.2 dlh
A) First, we need to calculate the plantwide overhead rate:
Estimated manufacturing overhead rate= total estimated overhead costs for the period/ total amount of allocation base
Estimated manufacturing overhead rate= (815,300/9,900)
Estimated manufacturing overhead rate= $82.35 per direct labor hour
Now, we can allocate overhead to each product:
Allocated MOH= Estimated manufacturing overhead rate* Actual amount of allocation base
Gasoline= 82.35*5.2= $428.22
Diesel= 82.35*5.2= $428.22
B) We need to calculate the overhead rate for each department:
Fabrication:
Estimated manufacturing overhead rate= 557,750/4,850= $115 oer direct labor hour
Assembly:
Estimated manufacturing overhead rate= 257,550/5,050= $51 oer direct lbor hour
Now, we can allocate overhead:
Gasoline:
Allocated MOH= 115*3.1 + 51*2.1= $463.6
Diesel:
Allocated MOH= 115*2.1 + 51*3.1= $399,6
Identify each statement as true or false. If false, indicate how to correct the statement.
1. Corporation management is both an advantage and a disadvantage of a corporation compared to a proprietorship or a partnership.
2. Limited liability of stockholders, government regulations, and additional taxes are the major disadvantages of a corporation.
3. When a corporation is formed, organization costs are recorded as an asset.
4. Each share of common stock gives the stockholder the ownership rights to vote at stockholder meetings, share in corporate earnings, keep the same percentage ownership when new shares of stock are issued, and share in assets upon liquidation.
5. The number of issued shares is always greater than or equal to the number of authorized shares.
6. A journal entry is required for the authorization of capital stock.
7. Publicly held corporations usually issue stock directly to investors.
8. The trading of capital stock on a securities exchange involves the transfer of already issued shares from an existing stockholder to another investor.
9. The market price of common stock is usually the same as its par value.
10. Retained earnings is the total amount of cash and other assets paid in to the corporation by stockholders in exchange for capital stock.
Answer:
1. True: Corporation management is both an advantage and a disadvantage of a corporation compared to a proprietorship or a partnership.
2. False: Limited liability of stockholders, government regulations, and additional taxes are the major disadvantages of a corporation. False because limited liability of Stockholders is considered as an advantage.
3. False: When a corporation is formed, organization costs are recorded as an asset. It is false because organization costs are recorded as expenses.
4. True: Each share of common stock gives the stockholder the ownership rights to vote at stockholder meetings, share in corporate earnings, keep the same percentage ownership when new shares of stock are issued, and share in assets upon liquidation.
5. False: The number of issued shares is always greater than or equal to the number of authorized shares. It is false because the number of issued shares is always less than or equal to the number of authorized shares.
6. False: A journal entry is required for the authorization of capital stock. It is false because journal entry is not required for the authorization of capital stock but for issuance.
7. False: Publicly held corporations usually issue stock directly to investors. It is false because publicly held corporations issue stock indirectly to investors via investment banking institutions while privately held corporations issues stock directly.
8. True: The trading of capital stock on a securities exchange involves the transfer of already issued shares from an existing stockholder to another investor.
9. False: The market price of common stock is usually the same as its par value. It is false because there isn't any relationship between market value of common stock and its par value.
10. False: Retained earnings is the total amount of cash and other assets paid in to the corporation by stockholders in exchange for capital stock. False because retained earnings refer to the total amount of net income held by a corporation for its future use.
A representative from a prestigious industry association just emailed. She asks for your participation on an expert panel that will be held at an upcoming professional conference. The conference is not local, so it will require you to travel and stay several days in the conference location. The representative offers to pay for travel and lodgings for you and a guest to the conference. Which of the following responses would be most effective for helping you to make an ethical decision?a) Ask the representative to cover your expenses, but not your guest’s.b) Thank the representative and accept the offer to cover expenses of your participation.c) Ask the representative to cover travel expenses, but not hotel expenses.d) Ask the representative if this offer has been made to any others that she’s inviting.
Answer:
b) Thank the representative and accept the offer to cover expenses of your participation.
Explanation:
Since the representative asked for your participation on an expert panel that will be held at an upcoming international professional conference. The representative offered to pay for travel and lodgings for you and a guest to the conference.
The response that be most effective for helping you to make an ethical decision is to first of all, thank the representative and accept the offer to cover expenses of your participation.
As a sign of gratitude, you should thank them for the honor and privilege bestowed on you to be a part of the panel.
Also, having them offering to pay your travel and lodging costs would help you channel your energy into preparing and equipping yourself with necessary information and knowledge about the conference.
Photo Co. operates four film developing plants in upstate New York. The four plants are identical. They employ the same production technology, process the same mix, and buy raw materials from the same companies at the same prices. Wage rates are also the same at four plants. In reviewing the operating results for December, the newly hired assistant controller, Mike, became quite confused over the numbers.
Plant A Plant B Plant C Plant D
Number of Rolls processed 50,000 55,000 60,000 65,000
Revenue ($000s) $500 $550 $600 $650
Less:
Variable costs (195) (242) (300) (298) (352)
Fixed costs (300) (300) (300) (300)
Profit (loss) $5 $8 $2 $2
Mike remembered from his Accounting class that as volume increases, the average fixed cost per unit falls, and so Mike expected Plant D to be more profitable that Plants A and B. But numbers show just the opposite.
Required:
1. Write a concise memo to Mike to help him understand what is going on and to eliminate his confusion.
Justify your points with appropriate calculations.
Tanner-UNF Corporation acquired as a long-term investment $310 million of 6% bonds, dated July 1, on July 1, 2021. Company management has the positive intent and ability to hold the bonds until maturity, but when the bonds were acquired Tanner-UNF decided to elect the fair value option for accounting for its investment. The market interest rate (yield) was 9% for bonds of similar risk and maturity. Tanner-UNF paid $280 million for the bonds. The company will receive interest semiannually on June 30 and December 31. As a result of changing market conditions, the fair value of the bonds at December 31, 2021, was $290 million.
How would this investment be classified on Tanner-UNF's balance sheet?
A. Held-to-maturity securities
B. Other securities
C. Significant-influence investments
D. Trading securities
E. Available-for-sale securities
Answer:
D. Trading securities
Explanation:
Tanner-UNF Corporation
This investment would be classified on Tanner-UNF's balance sheets asTrading securities.
TRADE SECURITIES can be defined as the securities which have been purchased or bought by a company for the sole aim of realizing a short-term profit.
Hence, Companies do not always intend to keep such securities for a long period of time which is why they will only invest it if t they believe or thought they have a good chance of being compensated for the risk. they are taking which is why TRADE SECURITIES always includes both debt securities and equity securities.
The following items were selected from among the transactions completed by Sherwood Co. during the current year:
Mar.
1 Purchased merchandise on account from Kirkwood Co., $175,000, terms n/30.
31 Issued a 30-day, 6% note for $175,000 to Kirkwood Co., on account.
Apr.
30 Paid Kirkwood Co. the amount owed on the note of March 31.
Jun.
1 Borrowed $400,000 from Triple Creek Bank, issuing a 45-day, 5% note.
Jul.
1 Purchased tools by issuing a $45,000, 60-day note to Poulin Co., which discounted the note at the rate of 7%.
16 Paid Triple Creek Bank the interest due on the note of June 1 and renewed the loan by issuing a new 30-day, 6% note for $400,000. (Journalize both the debit and credit to the notes payable account.)
Aug.
15 Paid Triple Creek Bank the amount due on the note of July 16.
30 Paid Poulin Co. the amount due on the note of July 1.
Dec.
1 Purchased equipment from Greenwood Co. for $260,000, paying $40,000 cash and issuing a series of ten 9% notes for $22,000 each, coming due at 30-day intervals.
22 Settled a product liability lawsuit with a customer for $50,000, payable in January. Accrued the loss in a litigation claims payable account.
31 Paid the amount due to Greenwood Co. on the first note in the series issued on December 1.
Required:1. Journalize the transactions. Refer to the Chart of Accounts for exact wording of account titles. Assume a 360-day year.2. Journalize the adjusting entry for each of the following accrued expenses at the end of the current year (refer to the Chart of Accounts for exact wording of account titles):a. Product warranty cost, $80,000.b. Interest on the nine remaining notes owed to Greenwood Co. Assume a 360-day year.help needed please
Answer:
Sherwood Co.
1. Journal Entries:
March 1:
Debit Purchases $175,000
Credit Accounts Payable (Kirkwood Co.) $175,000
To record purchase of merchandise on account, terms, n/30.
March 31:
Debit Accounts Payable (Kirkwood Co.) $175,000
Credit Notes Payable (Kirkwood Co.) $175,000
To record issue of a 30-day, 6% note.
April 30:
Debit Notes Payable (Kirkwood Co.) $175,000
Debit Interest on Notes $875
Credit Cash Account $175,875
To record settlement of note and interest.
June 1:
Debit Cash Account $400,000
Credit Bank Note Payable (Triple Creek Bank) $400,000
To record 45-day, 5% bank note.
July 1:
Debit Equipment (Tools) $45,000
Credit Notes Payable (Poulin Co.) $45,000
To record purchase of tools and issue of 60-day note.
July 16:
Debit Interest on Bank Notes $2,500
Credit Cash Account $2,500
To record payment of interest due.
July 16:
Debit Bank Note Payable (Triple Creek Bank) $400,000
Credit Bank Note Payable (Triple Creek Bank) $400,000
To record loan renewal with issue of a new 30-day, 6% note.
August 15:
Debit Bank Note Payable (Triple Creek Bank) $400,000
Debit Interest on Notes $2,000
Credit Cash Account $402,000
To record payment on amount due.
Dec. 1:
Debit Equipment $260,000
Credit Cash Account $40,000
Credit Notes Payable (Greenwood Co.) $220,000
To record purchase of equipment and issue of a series of ten 9% notes for $22,000 each, due at 30-day intervals.
Dec. 22:
Debit Litigation Loss $50,000
Credit Litigation Claims Payable $50,000
To record a product liability lawsuit settled.
Dec. 31:
Debit Notes Payable $22,000
Debit Interest on Notes $165
Credit Cash Account $22,165
To settle note issued.
2) Adjusting Entries:
a) Product Warranty Cost
Debit Product Warranty $80,000
Credit Product Warranty Payable $80,000
To record accrued product warranty cost.
b) Interest on remaining notes to Greenwood Co.
No journal entries required.
Explanation:
a) The interests on remaining notes to Greenwood Co. are not yet due for payment as at December 31, and so do not require to be accrued.
b) Journal entries are used to record business transactions as they occur daily and individually. They show which accounts are to be debited and which are to be credited in the General Ledger. Journals are books of original entry. This means that they first capture each transaction in the books of accounts.
c) Adjusting entries are entries made to accrue revenue and expenses in order to comply with the accrual concept and matching principle of US GAAP.
d) Product warranty cost is the amount charged to expense only when warranty costs are incurred under a warranty program, or it may be set up as an allowance, where a standard amount is charged to expense each month.
The journal entries are referred to as the entries that help the firm to record the various economic transactions of it whether it is in cash or out cash. The transactions are recorded and then evaluated as per the book of entries. Those transactions are called entries because they are entered at a particular date and event.
The journal entries have been attached below.
To know more about the journal entries, refer to the link below:
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Sorrento Skies Corporation issues 16.000 shares of $100 par value preferred stock for cash at $120 per share. The entry to record the transaction will consist of a debit to Cash for $1.920,000 and a credit or credits to a. Preferred Stock for $1,920,000. b. Paid-in Capital from Preferred Stock for $1.920,000 c. Preferred Stock for $1,600,000 and Retained Earnings for $320,000 d. Preferred Stock for $1,600,000 and Paid-in Capital in Excess of Par-Preferred Stock for $320,000
Answer:
The correct option is D,credit to Preferred Stock for $1,600,000 and Paid-in Capital in Excess of Par-Preferred Stock for $320,000
Explanation:
The total par value of the preferred stock issue is $100 multiplied by 16,000 which gives $1,600,000 while the remaining $20 per share multiplied by 16,000 that gave rise $320,000 goes to the credit of paid-in capital in excess of par-preferred stock account.
Option A is wrong because the preferred has a par value of $100 hence the total cash proceeds cannot be posted to preferred stock account alone.
Option B is wrong because the excess of $20 per share cannot be posted to retained earnings since it is net income
Suppose Charles and Dina are playing a game in which both must simultaneously choose the action Left or Right. The payoff matrix that follows shows the payoff each person will earn as a function of both of their choices. For example, the lower-right cell shows that if Charles chooses Right and Dina chooses Right, Charles will receive a payoff of 7 and Dina will receive a payoff of 4.
Dina
Left Right
Charles Left 6,3 6,4
Rigt 3,3 7,4
Required:
a. The only dominant strategy in this game is for_______ to choose _____
b. The outcome reflecting the unique Nash equilibrium in this game is as follows: Charles chooses_______ and Dina choose ______
Answer and Explanation:
As per the data given in the question,
a) Dominant strategy is that strategy in which a player chooses strategy irrespective of the strategy which other player has already chosen.
For Charles, If Dina chooses right he will choose right because payoff is higher (6 > 3) but if Dina chooses left he will choose left because payoff is
is higher (7>6) So, he doesn't have any strategy.
For Dina, he will choose right because it gives highest payoff whether Charles choose right or left.
The dominant strategy is for Dina to choose right.
b)
The outcome matching the unique Nash equilibrium in this game is :
Nash equilibrium is that in which both players will chose after keeping in mind the other players' strategy.
Here equilibrium is :
Charles chooses right(while Dina chooses Right) and Dina chooses right (while Janet chooses right).
The following information is for employee Ella Dodd for the week ended March 15.
Total hours worked: 48
Rate: $15 per hour, with double time for all hours in excess of 40
Federal income tax withheld: $200
United Fund deduction: $50
Cumulative earnings prior to current week: $6,400
Tax rates:
Social security: 6% with no maximum earnings.
Medicare tax: 1.5% on all earnings.
State unemployment: 3.4% with no maximum earnings; on employer.
Federal unemployment: 0.8% with no maximum earnings; on employer.
Required:
a) Determine the (1) total earnings, (2) total deductions, and (3) cash paid.
b) Determine each of the employer's payroll taxes related to the earnings of Ella Dodd for the week ended March 15.
Answer:
a. The total earnings is $840
The total deductions is $313
The cash paid is $527
b. The Social security and medicare taxes is $63
The State unemployment tax is $28.56
The Federal unemployment tax is $6.72
Explanation:
a. To calculate the (1) total earnings, (2) total deductions, and (3) cash paid we would have to calculate the following formula:
1. Total earnings=(15*40)+((48-40)*15*2)
Total earnings=$840
2. Total deductions=(Federal Tax+United fund deduction+Social security tax+Medicare tax)
Total deductions=$200+$50+($840*6%)+($840*1.5%)
Total deductions=$313
3. Cash paid=Total earnings-Total deductions
Cash paid=$840-$313
Cash paid=$527
b. The calculation of each of the employer's payroll taxes related to the earnings of Ella Dodd for the week ended March 15 would be the following:
Social security and medicare taxes=$840*(6%+1.5%)
Social security and medicare taxes=$63
State unemployment tax=$840*3.4%
State unemployment tax=$28.56
Federal unemployment tax=$840*0.8%
Federal unemployment tax=$6.72
Friends International is an NGO that fosters greater cultural awareness and understanding by arranging for people of different backgrounds to spend time in other countries and cultures. On January 1, 2014 they purchased $80,000 of open airline tickets in advance that can be used for a variety of destinations. Using the accrual method, build the entry to record the use of $40,000 of these tickets on March 15, 2014 for multiple passengers on a flight from New York to Kigali, Rwanda.
Answer:
Dr Travel Expenses 40,000
Cr Prepaid Expenses 40,000
Explanation:
Friends International
Dr Travel Expenses 40,000
Cr Prepaid Expenses 40,000
Travel Expense for $40,000 was been DEBITED in order to recognize the expense associated with the use of the tickets and cPrepaid Expense for $40,000 was been CREDITED because the company no longer has the right to receive benefits from the prepaid tickets.
The beginning inventory at Midnight Supplies and data on purchases and sales for a three-month period ending March 31 are as follows:
Date Transaction Number of Units Per Unit Total
Jan. 1 Inventory 7,500 $ 75.00 $ 562,500
10 Purchase 22,500 85.00 1,912,500
28 Sale 11,250 150.00 1,687,500
30 Sale 3,750 150.00 562,500
Feb. 5 Sale 1,500 150.00 225,000
10 Purchase 54,000 87.50 4,725,000
16 Sale 27,000 160.00 4,320,000
28 Sale 25,500 160.00 4,080,000
Mar. 5 Purchase 45,000 89.50 4,027,500
14 Sale 30,000 160.00 4,800,000
25 Purchase 7,500 90.00 675,000
30 Sale 26,250 160.00 4,200,000
Required:
1. Determine the total sales, the total cost of goods sold, and the gross profit from sales for the period.
2. Determine the ending inventory cost as of March 31.
Answer:
Total Sales $19875,000
Cost Of Goods Sold: $ 11902,000
Gross Profit $ 7973,000
Ending Inventory 11,250 units
Explanation:
Midnight Supplies
DATA
Date Transaction Number of Units Per Unit Total
Jan. 1 Inventory 7,500 $ 75.00 $ 562,500
10 Purchase 22,500 85.00 1,912,500
28 Sale 11,250 150.00 1,687,500
30 Sale 3,750 150.00 562,500
Feb. 5 Sale 1,500 150.00 225,000
10 Purchase 54,000 87.50 4,725,000
16 Sale 27,000 160.00 4,320,000
28 Sale 25,500 160.00 4,080,000
Mar. 5 Purchase 45,000 89.50 4,027,500
14 Sale 3 0,000 160.00 4,800,000
25 Purchase 7,500 90.00 675,000
30 Sale 26,250 160.00 4,200,000
Total Sales $19875,000
Date Transaction Number of Units Per Unit Total
Jan.
28 Sale 11,250 150.00 1,687,500
30 Sale 3,750 150.00 562,500
Feb. 5 Sale 1,500 150.00 225,000
16 Sale 27,000 160.00 4,320,000
28 Sale 25,500 160.00 4,080,000
Mar 14 Sale 3 0,000 160.00 4,800,000
30 Sale 26,250 160.00 4,200,000
Total Sales 125250 19875,000
Cost Of Goods Sold:$ 11902,000
Date Transaction Number of Units Per Unit Total
Jan. 1 Inventory 7,500 $ 75.00 $ 562,500
10 Purchase 22,500 85.00 1,912,500
Feb 10 Purchase 54,000 87.50 4,725,000
Mar. 5 Purchase 45,000 89.50 4,027,500
25 Purchase 7,500 90.00 675,000
Total 136,500 $ 11902,000
Gross Profit = Sales Less COGS
= $19875,000- $ 11902,000
= $ 7973,000
2. Ending Inventory = Units Purchased Less Units Sold
= 136,500-125250 = 11,250 units
When considering barriers to international communication, companies should be aware that noise tends to increase the probability of effective communication. source effects can be beneficial for an international business when potential consumers in a target country have a bias against foreign firms. many international businesses try to promote positive source effects by deemphasizing their foreign origins. fewer firms vie for the attention of prospective customers in developing countries, thus the noise level is lower. research suggests consumers use country of origin when evaluating a product, when they have detailed knowledge of the product.
True or false?
Similarities between organized Sector and Unorganised sector
Answer:
The sector which is registered and follows government rules and regulations, having employees and employee unions is called as an organised sector. ... The sector that comprises of small-scale enterprises or units and is not registered with the governmen
Portions of the financial statements for Peach Computer are provided below. PEACH COMPUTER Income Statement For the year ended December 31, 2018 Net sales $1,650,000 Expenses: Cost of goods sold $990,000 Operating expenses 500,000 Depreciation expense 44,000 Income tax expense 34,000 Total expenses 1,568,000 Net income $ 82,000 PEACH COMPUTER Selected Balance Sheet Data December 31 2018 2017 Increase (I) or Decrease (D) Cash $96,000 $82,000 $14,000 (I) Accounts receivable 46,600 52,000 5,400 (D) Inventory 69,000 52,000 17,000 (I) Prepaid rent 2,400 3,800 1,400 (D) Accounts payable 39,000 34,000 5,000 (I) Income tax payable 4,400 7,000 2,600 (D) Required: Prepare the operating activities section of the statement of cash flows for Peach Computer using the direct method. (List cash outflows as negative amounts.)
Answer:
operating activities section
Cash Receipts from Customers $1,644,600
Cash Paid to Suppliers and Employees ($1,500,600)
Cash Generated from Operations $164,000
Income taxes paid ($36,600)
Net Cash from Operating Activity $127,400
Explanation:
statement of cash flows for Peach Computer
operating activities section
Cash Receipts from Customers $1,644,600
Cash Paid to Suppliers and Employees ($1,500,600)
Cash Generated from Operations $164,000
Income taxes paid ($36,600)
Net Cash from Operating Activity $127,400
Cash Receipts from Customers Calculation :
Net sales $1,650,000
Less Increase In Account Receivable ( $ 5,400)
Cash Receipts from Customers $1,644,600
Cash Paid to Suppliers and Employees Calculation :
Cost of goods sold $990,000
Add Operating expenses $500,000
Increase in inventory $17,000
Decrease in Prepaid rent ($1,400)
Increase in Accounts payable ($5,000)
Cash Paid to Suppliers and Employees $1,500,600
Income tax expense Paid Calculation :
Income tax expense $34,000
Add Decrease in Income tax payable $2,600
Income tax expense Paid $36,600
ReVitalAde produced 13,000 cases of powdered drink mix and sold 12,000 cases in April 2018. The sales price was $ 29, variable costs were $ 12 per case ($ 9 manufacturing and $ 3 selling and administrative), and total fixed costs were $ 100,000 ($ 91,000 manufacturing overhead and $ 9,000 selling and administrative). The company had no beginning Finished Goods Inventory.
Required:
1. Prepare the April income statement using variable costing.2. Determine the product cost per unit.
Answer:
1. Profit = $204,000.
2. Product cost per unit = $12 per unit.
Explanation:
1. Prepare the April income statement using variable costing.
Details $
Revenue ($29 * 12,000) 348,000
Total variable cost of unit sold ($12 * 12,000) 144,000
Profit 204,000
2. Determine the product cost per unit.
Total variable cost of production = $12 * 13,000 = $156,000
Total fixed cost of production = $100,000
Total cost of production = $156,000 + $100,000 = $256,000
Product cost per unit = $256,000 / 13,000 = $12 per unit.
Gonzo Co. owns a building in Georgia. The building’s historical cost is $970,000, and $440,000 of accumulated depreciation has been recorded to date. During 2011, Gonzo incurred the following expenses related to the building:
Repainted the building
$ 48,000
Major improvement to the plumbing
109,000
Replaced carpet in the plant’s accounting offices
47,600
Added a 7,000 square foot lobby
234,600
Repaired a broken water main
155,800
Required:
1. Which of the costs incurred by Gonzo Co. should be capitalized to the building account?
2. What is the subsequent carrying amount of the building?
Answer:
1. The cost to be capitalized to building account is $343,600
2. The subsequent carrying amount of the building is $873,600
Explanation:
1. In order to calculate the which of the costs incurred by Gonzo Co. should be capitalized to the building account we would have to use the following formula:
cost to be capitalize=Major improvement to the plumbing+Added a loby
cost to be capitalize=$109,000+$234,600
cost to be capitalize=$343,600
The cost to be capitalized to building account is $343,600
2. To calculate the subsequent carrying amount of the building we have to use the following formula:
subsequent carrying amount=Historical cost+improvements-Accumulated Depreciation
subsequent carrying amount=$970,000+$343,600-$440,000
subsequent carrying amount=$873,600
The subsequent carrying amount of the building is $873,600
Which of the following statements is (are) true regarding product costing?
(A) Individual product costs are relevant for managerial decision-making but irrelevant for preparing the financial statements.
(B) A common decision facing managers is determining the price at which to sell their products or provide their services.
Answer:
Option B is the correct answer.
Explanation:
Option B is correct because when a firm produces or manufactures the product then various types of costs are associated with that product like variable costs, fixed costs, etc. Profit is the main motive of every firm so the manager decides the price of the commodity in such a way that it can compete in the market and generate revenue for the firm. Therefore, it is the responsibility of the manager to look after the pricing strategy at which the product has to sell.
Grayson Bank agrees to lend the Trust Company $100,000 on January 1.
Trust Company signs a $100,000, 8%, 9-month note.
The entry made by Trust Company on January 1 to record the proceeds and issuance of the note is
a. Notes Payable 100,000 Interest Payable 6,000 Cash 100,000 Interest Expense 6,000
b. Interest Expense 8,000 Cash 92,000 Notes Payable 100,000
c. Cash 100,000 Notes Payable 100,000
d. Cash 108,000 Interest Expense 8,000 Notes Payable 108,000
Answer:
The entry made by Trust Company on January 1 to record the proceeds and issuance of the note is
Debit Credit
Cash $100,000
Notes Payable $100,000
The right answer is c
Explanation:
According to the given data the interest will not be adjusted at the time of loan proceed and issuance of note
Therefore, The entry made by Trust Company on January 1 to record the proceeds and issuance of the note is the following:
Debit Credit
Cash $100,000
Notes Payable $100,000
To record the borrowing
Exercise 2.2 Preparing a Balance Sheet (LO2-4)
The night manager of Willis Transportation Service, who had no accounting background, prepared the following balance sheet for the company at February 28, current year. The dollar amounts were taken directly from the company’s accounting records and are correct. However, the balance sheet contains a number of errors in its headings, format, and the classification of assets, liabilities, and owners’ equity.
WILLIS TRANSPORTATION SERVICE
Manager’s Report
8 P.M. Thursday
Assets Owners' Equity
Capital stock $ 94,000 Accounts receivable $ 72,000
Retained earnings 62,000 Notes payable 281,000
Cash 74,000 Supplies 14,000
Building 90,000 Land 70,000
Automobiles 175,000 Accounts payable 58,000
$ 495,000 $ 495,000
Prepare a corrected balance sheet.
Answer:
Explanation:
The corrected sheet is given below
WILLIS TRANSPORTATION SERVICE
Balance sheet
Feb-28
Assets
Cash 74000
Accounts Receivable 72000
Supplies 14000
Land 70000
Buildings 90000
Automobiles 175000
Total 495000
Liabilities & Owners' Equity
Liabilities:
Notes payable 281000
Accounts Payable 58000
Total Liabilities 339000
Owners Equity:
Capital Stock 94000
Retained earnings 62000
Total 495000
The Laser world income Statement for 2021 is as follows:
Sales revenue $198,000
Cost of sales 108,900
Gross profit 89,100
Operating expenses 69,000
Net income $20,100
Other Facts:
Included in operating expenses:
Depreciation Expense 7500
Vehicle expense 2800
Interest Expense 15600
Gain on Sale of Asset 5000
Pension Contribution 7500
Other:
Dividends 13800
Cash Rec'd From Sale of Assets 35000
Basis of Assets Sold 30000
Required:
1. Jornalize the above transactions.
Answer:
journal entries to record revenues and gains:
Dr Cash 193,000
Cr Sales revenue 193,000
Dr Cash 35,000
Cr Asset 30,000
Cr Gain on sale of asset 5,000
journal entry to record COGS:
Dr Cost of goods sold 108,900
Cr Merchandise inventory 108,900
journal entries to record expenses:
Dr Depreciation expense 7,500
Dr Vehicle expense 2,800
Dr Interest expense 15,600
Dr Pension expense 7,500
Cr Cash 50,600
Dr Other operating expenses 18,400
Cr Cash 18,400
journal entries to record dividends (declaration and payment):
Dr Retained earnings 13,800
Cr Dividends payable 13,800
Dr Dividends payable 13,800
Cr Cash 13,800
Suppose the market for computer chips is dominated by two firms: Intel and AMD. Intel has discovered how to make superior chips and is considering whether or not to adopt the new technology. Adoption would entail a fixed setup cost of C but would increase revenues. However, if Intel adopts the new technology, AMD can easily copy it at a lower setup cost of C/2. If Intel adopts and AMD does not, Intel would earn $20 in revenues while AMD would earn $0. If Intel adopts and AMD does likewise, each firm will earn $15 in revenues. If Intel does not adopt the new technology, it will earn $5 and AMD will earn $2. a. Write this game in extensive form. b. Under what conditions (i.e., for what values of C) does AMD have an incentive to adopt the new technology if Intel introduces it
Answer:
Explanation:
See the figure below.
b. AMD's payoff from adopting must exceed its payoff from not adopting. This is true if 15 - C/2 > 0. Solving for C, we find that AMD has an incentive to adopt if Intel adopts whenever C < 30.
c. No. When C = 12, AMD's best strategy is to adopt if Intel adopts, which means Intel would earn only 3by adopting. By not adopting, Intel can earn a payoff of 5; Intel's best option is not to adopt. This is the only Nash equilibrium, and it is also a subgame perfect Nash equilibrium
Without checking the facts, a broker who is the seller�s agent tells a buyer that the property taxes in a particular neighborhood are among the lowest in the area. The buyer relies on the broker�s statement and makes an offer on a house in the neighborhood. Before closing, it is determined that the taxes are actually among the highest in the area. The buyer could seek to rescind the contract on the basis of:___________.
Answer:
misrepresentation
Explanation:
A broker is a person or firm who arranges the sale and purchase of a property between a buyer and a seller. He gets a commission if the deal is executed.
In the given question, a buyer is told by a broker that the property taxes in a particular neighborhood are the lowest in the area. Based on this information, makes an offer on a house in the neighborhood. Just before closing, he comes to know that the taxes are actually among the highest in the area.
So, The buyer could seek to rescind the contract based on misrepresentation