Answer:
AddieMae Inc.
Statement of Cash flows for the year ended December 31,2016
Cash flow from Operating Activities
Profit for the period 6,800
Adjustment of Working Capital items ;
Increase in Accounts receivable (2,300)
Increase in Inventory (6,900)
Increase in Accounts Payable 800
Increase in Accrued Liabilities 100
Net Cash from Operating Activities ($1,500)
Cash flows from Investing Activities
Purchase of Equipment 700
Purchase of Lon term investments 300
Net Cash from Investing Activities 1,000
Cash flow from Financing Activities
Long term debt issued 200
Issue of Common Stock 2,600
Net Cash from financing Activities 2,800
Movement in Cash and Cash equivalents 2,300
Cash and Cash Equivalents at Beginning 1,000
Cash and Cash Equivalents at the End 3,300
Explanation:
Cashflow statement shows the movement in the cash and cash equivalent balances. It only accounts for cash related transactions and events.
Note also that the Indirect method has been used for preparation of the Cashflow Statement as required.
Estimate the value of a loyal customer of a loyal Volvo automobile owner. Assume the contribution margin is 0.28, the purchase price is $63,000, the repurchase frequency is every six years, and the customer defection rate is 22 percent. Do not round intermediate calculations. Round your answer to the nearest dollar.
Answer:
value of a loyal customer = $481,091 (to the nearest dollar)
Explanation:
The Value of a loyal customer (VLC) is the measure of loyalty shown by the customer in choosing a company over its direct competitors every time.
To calculate VLC, the following formula is used:
VLC = (purchase price) × (contribution margin) × (repurchase frequency) × (buyer's life cycle).
From the list of data in the question, you will notice that 'buyer's life cycle (BLC)' is not given. Now, let us calculate BLC.
BLC = 1 ÷ (defection rate)
Defection rate = 22% = 22/100 = 0.22
∴ BLC = 1 ÷ (0.22) = 1/0.22 (do not round intermediate calculations)
∴ VLC = 63,000 × 0.28 × 6 × (1/0.22)
[tex]VLC = \frac{63000 \times 0.28 \times 6}{0.22} \\= 481,090.91[/tex]
= $481,091 (to the nearest dollar)
The value of a loyal customer of a loyal Volvo automobile owner is $481,091.
What is a calculation of the value of a loyal customer?The value of loyal customers or VLC is derived by multiplying the values of the purchase price, contribution margin, repurchase frequency, and buyer's life cycle with each other.
Here, the buyer's life cycle would be calculated by dividing 1 by the defection rate.
Now, VLC would be;
[tex]VLC=63,000*0.28*6*\frac{1}{0.22} \\=481,090.91[/tex]
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Davis acquires 100% of Reynolds in an acquisition . At date of acquisition , Reynolds had in process research and development costs they had spent $300, 000 for 3 years ago and is now recorded on its books at $100, 000 This R and D has not yet reached technological feasibility and no alternative use has been identified. At acquisition date, Reynolds continues to work on this project and the fair value is considered to be $200, 000. How much will Davis recorded this for at acquisition date using the:__________.
a. Acquisition method
b. Purchase method
c. Pooling of interests method
d. Do either of answers a, b, c above differ is this transaction was structured as either a statutory merger or statutory consolidation.
Answer:
a) When an asset is acquired in any form, it is been acquired at the fair market value of that asset which is $200,000. In this case, since the product is not yet technically feasible, so the same amount shall be disclosed in the balance sheet as it is still contingent.
b) When an asset it purchased we look for market value of the asset. So it will be booked at $200,000 but the contingent clause shall not be mentioned here.
c) In case of pooling of interest the book value of the asset i.e $ 1,000,000 shall be the value to be recorded in the books of account.
d) The answers would not differ.
On November 1, Jasper Company loaned another company $270,000 at a 8.0% interest rate. The note receivable plus interest will not be collected until March 1 of the following year. The company's annual accounting period ends on December 31. The amount of interest revenue that should be reported in the first year is:
Answer:
The interest revenue that should be reported in the first year, for two months from November to December, on 31 December is $3600.
Explanation:
According to the accrual basis of accounting, the revenues and expenses for a particular period should be recorded in the period to which they relate to rather then when they are received or paid. This means that although the interest will be received on March 1 of the next year, the interest revenue on note receivable for a period of two months from November to December should be recorded in the first year because it has been earned in the first year and it relates to it.
Interest revenue - first year = 270000 * 0.08 * 2/12 = $3600
During March, a firm expects its total sales to be $160,000, its total variable costs to be $95,000, and its total fixed costs to be $25,000. The contribution margin for March is: Multiple Choice
Answer:
$65,000
Explanation:
contribution margin = total sales revenue - total variable costs = $160,000 - $95,000 = $65,000
if you want to calculate the contribution margin per units, all you need to do is divide the total contribution margin by the total number of units sold.
for example, if total units = 10,000
contribution margin per unit = $65,000 / 10,000 = $6.50
Marion Company issued a $350,000, zero-interest-bearing, 5-year note in exchange for land with a fair market value of $287,000 from Palma Real Estate. If the present value of the note at an appropriate rate of interest is $287,000, Palma Real Estate should record a :________.
A : premium on notes receivable.
B : gain on the sale of land.
C : premium on the sale of land.
D : discount on notes receivable.
Answer:
b
Explanation:
i have done this one before
Skysong Industries collected $92,400 from customers in 2022. Of the amount collected, $22,000 was for services performed in 2021. In addition, Skysong performed services worth $35,200 in 2022, which will not be collected until 2023. Skysong Industries also paid $63,360 for expenses in 2022. Of the amount paid, $26,400 was for expenses incurred on account in 2021. In addition, Skysong incurred $36,960 of expenses in 2022, which will not be paid until 2023.
(a) Compute 2022 cash-basis net income.
(b) Compute 2022 accrual-basis net income. Accrual-basis net income $
Answer:
(a) Compute 2022 cash-basis net income.
Revenue $92,400
Expenses ($63,360)
Net income $29,040
(b) Compute 2022 accrual-basis net income.
Revenue ($92,400 - $22,000 + $35,200) $105,600
Expenses ($63,360 - $26,400 + $36,960) ($73,920)
Net income $31,680
TRANSACTIONS
1. Paid $2,100 for utilities.
2. Performed services for $10,500 on account
3. Received $6,500 from charge account customers
4. Paid salaries of $4,500 to employees
5. Paid $8,000 to a creditor on account.
6. Owner invested $90,000 in the business.
7. Purchased $26,700 of supplies on account.
8. Purchased equipment for $21,000 cash
9. Paid $6,000 for rent (in advance).
10. Performed services for $7,800 cash.
Indicate the impact of each of the transactions below on the fundamental accounting equation (Assets Liabilities+Owner's Equity) by placing a "+" to indicate an increase and a "-" to indicate a decrease. The first transaction is entered as an example. (If transaction causes one account to increase and another to decrease within the same classification of the accounting equation, select +/-)
Assets Liabilities +Owner's Equity
Transaction 1
Transaction 2
Transaction 3
Transaction 4
10. Performed services for $7,800 cash.
indicate the impact of each of the transactions below on the fundamental accounting equation (Assets = Liabilities + Owner's Equity) by placing a "+" to indicate an increase and a "-" to indicate a decrease. The first transaction is entered as an example. (If transaction causes one account to increase and another to decrease within the same classification of the accounting equation, select
+1) Assets Liabilities Owner's Equity
Transaction 1
Transaction 2
Transaction 3
Transaction 4
Transaction 5
Transaction 6
Transaction 7
Transaction 8
Transaction 9
Transaction 10
Answer:
Transactions and their Effects on the Accounting Equation
1. Paid $2,100 for utilities.
Assets (Cash -$2100) = Liabilities + Equity (Retained Earnings -$2100)
2. Performed services for $10,500 on account
Assets (Accounts Receivable +$10,500) = Liabilities + Equity (Retained Earnings +$10,500)
3. Received $6,500 from charge account customers
Assets (Cash +$6,500; Accounts Receivable -$6,500) = Liabilities + Equity
4. Paid salaries of $4,500 to employees
Assets (Cash -$4,500) = Liabilities + Equity (Retained Earnings -$4,500)
5. Paid $8,000 to a creditor on account.
Assets (Cash -$8,000) = Liabilities (Accounts payable -$4,500) + Equity
6. Owner invested $90,000 in the business.
Assets (Cash +$90,000) = Liabilities + Equity (Common Stock +$90,000)
7. Purchased $26,700 of supplies on account.
Assets (Inventory +$26,700) = Liabilities + Equity (Retained Earnings +$26,700)
8. Purchased equipment for $21,000 cash
Assets (Equipment +$21,000; Cash -$21,000) = Liabilities + Equity
9. Paid $6,000 for rent (in advance).
Assets (Cash -$6,000; Prepaid Rent +$6,000) = Liabilities + Equity
10. Performed services for $7,800 cash.
Assets (Cash +$7,800) = Liabilities + Equity (Retained Earnings + $7,800)
Explanation:
The effects of transactions on the accounting equation of assets = liabilities + equity demonstrates that each transaction affects two accounts and makes the equation to remain in balance.
An increase in which of the following will increase the return on equity, all else constant I. Total asset turnover. II. Net income. III. Total assets. IV. Debt-equity ratio. I only. I, II, and III only. I and II only. I, II, and IV only. I, II, III, and IV.
Answer:
I and II only.
Explanation:
Return on equity (ROE) is an example of a profitability ratio.
Profitability ratios measures the ability of a company to earn profits from its assets.
ROE = Net income / Average total equity
If ROE increases, it means that net income increases more than average total equity
Total asset turnover = Revenue / average total assets
(Net Income/ Net profit margin) / Total Assets
All else remaining constant, if ROE increases, it means that revenue also increases more than average total asset
Since Net income is the numerator in ROE, it means it would also increase
Total asset and debt equity ratio is not a component of ROE, so the effect of ROE on them can't be determined
The Coffee Shop around the Corner (CS) is famous for its fresh-made muffins. Hank, the owner of CS, knows that the demand for muffins depends very much on the time of the day: The demand is high in the morning decreases in the afternoon hours and is at its lowest in the evening. Hank is having trouble deciding how many muffins to make for each period of the day. He asked you to help him forecast the demand. If you do a good job in forecasting the demand for tomorrow, Hank will pay you to do this job on a recurring basis. The following is the demand data Hank collected in the past three days:
Day 1 2 3
Period Morning Afternoon Evening Morning Afternoon Evening Morning Afternoon Evening
Demand 37 25 9 48 28 14 53 33 17
Using a 5-period moving average, forecast the morning, afternoon and evening demand for muffins on day 4.
Answer:
The Coffee Shop around the Corner (CS)
5-period Moving Average Forecast of Demand
Day 4 Based on Average Educated Guess
Morning 29.8 41
Afternoon 29.8 30
Evening 30.8 19
Explanation:
a) Data and Calculations:
Day 1 Demand 5-period Moving
Average
Morning 37
Afternoon 25
Evening 9
Day 2
Morning 48
Afternoon 28 29.4
Evening 14 24.8
Day 3
Morning 53 30.4
Afternoon 33 35.2
Evening 17 29.0
Day 4
Morning 29.8
Afternoon 29.8
Evening 30.8
b) Given that for the past three days, coffee demand in the evenings had not exceeded 20, we can tweak the evening demand to less than 20 and carry the remainder to the morning when demand is always high. In that case, the demand on day 4 may read more like, Morning 41, Afternoon 30, and Evening 19.
Suppose Manuel is the only seller in the market for bottled water and Hubert is the only buyer. The following lists show the value Hubert places on a bottle of water and the cost Manuel incurs to produce each bottle of water:
Hubert's Value Manuel's Costs
Value of first bottle: $10 Cost of first bottle: $1
Value of second bottle: $7 Cost of second bottle: $3
Value of third bottle: $3 Cost of third bottle: $7
Value of fourth bottle: $1 Cost of fourth bottle: $10
The following table shows their respective supply and demand schedules:
Price Quantity Demanded Quantity Supplied
$1 or less 4 0
$1 to $3 3 1
$3 to $7 2 2
$7 to $10 1 3
More than $10 0 4
Use Raphae's supply schedule and Larry's demand schedule to find the quantity supplied and quantity demanded at prices of $2, $5, and $8.
A price of____brings supply and demand into equilibrium.
At the equilibrium price, consumer surplus is_____producer surplus is_____, and total surp is_____.
If Raphael produced and Larry consumed one less bottle of water, total surplus would_____.
if instead, Raphael produced and Larry consumed one additional bottle of water, total surplus would_____.
Answer:
Manuel and Hubert
A price of__$5__brings supply and demand into equilibrium.
At the equilibrium price, consumer surplus is__$2___producer surplus is__$2___, and total surplus is__$4___.
If Manuel produced and Hubert consumed one less bottle of water, total surplus would__$6___.
if instead, Manuel produced and Hubert consumed one additional bottle of water, total surplus would_$6____.
Explanation:
a) Data and Calculations:
Hubert's Value Manuel's Costs
Value of first bottle: $10 Cost of first bottle: $1
Value of second bottle: $7 Cost of second bottle: $3
Value of third bottle: $3 Cost of third bottle: $7
Value of fourth bottle: $1 Cost of fourth bottle: $10
The following table shows their respective supply and demand schedules:
Price Quantity Quantity
Demanded Supplied
$1 or less 4 0
$1 to $3 3 1
$3 to $7 2 2
$7 to $10 1 3
More than $10 0 4
Using Manuel's supply schedule and Hubert's demand schedule to find the quantity supplied and quantity demanded at prices of $2, $5, and $8.
Price Quantity Quantity
Demanded Supplied
$2 3 1
$5 2 2
$8 1 3
At the equilibrium price:
Consumer Surplus = $7 - $5 = $2
Producer Surplus = $5 - $3 = $2
Total surplus is $2 * 2 = $4
Roberto and Reagan are both 25-percent owner/managers for Bright Light Incorporated. Roberto runs the retail store in Sacramento, California, and Reagan runs the retail store in San Francisco, California. Bright Light generated a $131,300 profit companywide made up of a $76,800 profit from the Sacramento store, a ($29,500) loss from the San Francisco store, and a combined $84,000 profit from the remaining stores. If Bright Light is taxed as a partnership and it is decided that both Roberto and Reagan will be allocated 70 percent of his own store's profit, with the remaining profits allocated pro rata among all the owners, how much income will be allocated to Reagan in total
Answer: $3,897.50
Explanation:
The profit that is to be shared on a pro rata basis will include:
a. The $84,000 profit from the remaining stores
b. 30% of the profit from Sacramento
c. 30% of the loss from San Francisco
= 84,000 + (0.3 * 76,800) + (0.3 * -29,500)
= $98,190
Reagan is to get 25% of the above as well as 70% of San Francisco losses.
= (0.25 * 98,190) + (0.7 * -29,500)
= 24,547.50 - 20,650
= $3,897.50
Presented below is information related to equipment owned by Suarez Company at December 31, 2017.
Cost $9,000,000
Accumulated depreciation to date 1,000,000
Expected future net cash flows 7,000,000
Fair value 4, 800,000
Assume that Suarez will continue to use this asset in the future. As of December 31, 2017, the equipment has a remaining useful life of 4 years.
Instructions
(a) Prepare the journal entry (if any) to record the impairment of the asset at December 31, 2017.
(b) Prepare the journal entry to record depreciation expense for 2018.
(c) The fair value of the equipment at December 31, 2018, is $5, 100,000. Prepare the journal entry (if any) necessary to record this increase in fair value.
Answer and Explanation:
The journal entries are shown below:
But before that following calculations need to be done
For impairment loss
Cost $9,000,000
Less: Accumulated Deprecation-equipment $1,000,000
Net Value $8,000,000
Less: Fair value $4,800,000
Loss on Impairment $3,200,000
For depreciation expense
Fair value $4,800,000
Life 4 years
Depreciation Expenses $ 1,200,000
The journal entries are as follows:
1 Loss on Impairment $3,200,000
To Accumulated Deprecation-equipment $3,200,000
(being loss on impairment is recorded)
2 Depreciation Expenses $1,200,000
To Accumulated Deprecation-equipment $1,200,000
(Being depreciation expense is recorded)
3 No Journal Entry is required
The journal entries of the above transactions are shown in the image below.
What is journal entry?
Journal entry is the of recording all the financial transactions of the business in which all the business transactions are recorded whether it is actually received or not.
Computation of the amount of the journal entry:
Amount for impairment of the loss:
According to the given information,
Cost = $9,000,000
Accumulated Deprecation-equipment = $1,000,000
Fair value = $4,800,000
Now put the values in the formula,
[tex]\text{Loss on Impairment} = \text{Cost} - \text{Accumulated Deprecation}- \text{Fair Value}\\\text{Loss on Impairment} = \$9,000,000 - \$1,000,000 - $4,800,000\\\text{Loss on Impairment} = \ $3,200,000[/tex]
Therefore, the journal entry of the above transactions are given in the image below.
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In order to set premiums at profitable levels, insurance companies must estimate how much they will have to pay in claims on cars of each make and model, based on the value of the car and how much damage it sustains in accidents. Let C be a random variable that represents the cost of claims on a randomly selected car of one model. The probability distribution of C is given below.
c $0 $1000 $4000 $10000
P(c) 0.6 0.05 0.13 0.22
Which of the following is the probability that the insurance company will have to pay a claim of at least $1000 for a randomly selected car of this model?
a. 0.05
b. 0.13.
c. 0.22.
d. 0.35.
e. 0.406.
f. none of above
Answer:
0.4
None of the above
Explanation:
Given the distribution :
c ___$0 ___ $1000 ____ $4000 ___ $10000
P(c) _0.6 ____0.05 ______ 0.13 _____ 0.22
Probability of atleast $1000 :
P(x ≥ 1000) : P(x = 1000) + P(x = 4000) + P(x = 10000)
P(x ≥ 1000) = 0.05 + 0.13 + 0.22
P(x ≥ 1000) = 0.4
The probability of the insurance company having to pay the claim of a minimum of $1000 for a randomly opted car's model would be:
e). 0.406
As per the data provided,
c P(c)
$0 0.6
$1000 0.05
$4000 0.13
$10000 0.22
Probability of insurance company having to pay the claim of a minimum of $1000 for a randomly opted car's model(P):
[tex]P(x[/tex] [tex]\geq[/tex] [tex]1000) : P(x = 1000) + P(x = 4000) + P(x = 10000)[/tex]
[tex]P(x \geq 1000)[/tex] [tex]= 0.05 + 0.13 + 0.22[/tex]
∵ [tex]P(x \geq 1000)[/tex] [tex]= 0.406[/tex]
Thus, option e is the correct answer.
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Bill operates a proprietorship using the cash method of accounting, and this year he received the following: $130 in cash from a customer for services rendered this year a promise from a customer to pay $194 for services rendered this year tickets to a football game worth $235 as payment for services performed last year a check for $176 for services rendered this year that Bill forgot to cash How much income should Bill realize on Schedule C
Answer:
$541
Explanation:
Calculation for How much income should Bill realize on Schedule C
Income realize on Schedule C=$130 + $235 + $176=
Income realize on Schedule C=$541
Therefore the amount of income that Bill should realize on Schedule C is $541
Sheridan Company has $21000 of ending finished goods inventory as of December 31, 2019. If beginning finished goods inventory was $15000 and cost of goods sold was $50000, how much would Sheridan report for cost of goods manufactured
Answer:
$56,000
Explanation:
The computation of the cost of goods manufactured is shown below:
As we know that
Cost of goods sold = Opening finished goods inventory + cost of goods manufactured - ending finished goods inventory
$50,000 = $15,000 + cost of goods manufactured - $21,000
So, the cost of goods manufactured is
= $50000 + $6,000
= $56,000
2. Consider this scenario. Suzanne designs custom dresses. She has recently decided to open a
boutique and recreate some of her most popular designs. Suzanne has her storefront and her
business license but her dresses don't have any tags. What legal consideration is she not in
accordance with? (2 points)
I
Answer:
The legal consideration that Suzanne is not in accordance or compliance with is the clothing labeling laws.
The clothing labeling laws include the following:
The Textile Fiber Products Identification Act, 1960
The Wool Products Labeling Act, 1939
The Fur Products Labeling Act, 1952
The above clothing labeling laws were passed by Congress to inform and protect consumers, and they require that dresses have labeling tags.
Explanation:
The above-mentioned clothing labeling laws are enforced by the U.S. Federal Trade Commission (FTC). Penalties are imposed by the FTC on any business that does not comply with the clothing labeling regulations.
A computer sends a packet of information along a channel and waits for a return signal acknowledging that the packet has been received. If no acknowledgment is received within a certain time, the packet is re-sent. Let X represent the number of times the packet is sent. Assume that the probability mass function of X is given byp(x) ={ cx , for x=0,1,2,...50 , otherwieFind P(X = 2).
Answer:
The answer is "[tex]\frac{2}{15}[/tex]" .
Explanation:
[tex]\to x = 0, 1, 2, 3, 4, 5\\\\\to p(x) \ for \ x \ = 0, 1, 2, 3, 4, 5 = 0\\\\ \to c, 2c, 3c , 4c, 5c = 1\\\\\to 0 + c + 2c + 3c + 4c + 5c = 1\\\\\to 15c = 1\\\\\to c = \frac{1}{15}\\[/tex]
[tex]\to p(x) \ for \ x \ = 0, 1, 2, 3, 4, 5 = 0\\\\ \to \frac{1}{15}, \frac{2}{15}, \frac{3}{15}, \frac{4}{15}, \frac{5}{15}[/tex]
[tex]\to P(X=2)=\frac{2}{15}[/tex]
A time ticket: Multiple Choice Shows the time that a department's employees worked on all jobs, the pay rate of each employee, and the total cost chargeable to each job. Shows the time an employee worked on each job, the pay rate, and the total cost chargeable to each job. Shows the time an employee worked on each job only. Shows the time an employee worked on each job and the total cost chargeable to each job only.
Answer:
Shows the time an employee worked on each job, the pay rate, and the total cost chargeable to each job.
Explanation:
A time ticket is a document that constitutes of the working period of the particular employee. It includes the working period for which the employee has been paid by the company. It constitutes of the initial time of the working day and the ending time of the day. The work hour for which the employee is paid and the cost invoked during the course of the period is also listed in the time ticket.
Suppose Nationwide increases the insurance premium they charge for their auto policies by 6 percent. In response, the demand for State Farm auto policies in a small town increases from 1,500 to 1,650. What is the cross-price elasticity of demand for State Farm auto policies in this town?Using the midpoint formula, the cross-price elasticity of demand for State Farm auto policies is _____. (Round to 3 decimal places.)In this instance, auto insurance from Nationwide and auto insurance from State Farm are _____.
Answer:
1.667
Explanation:
% Change in Quantity Demanded in units = (1650 - 1500 / 1500)*100 = (150/1500) * 100 = 10%
% Change in Price = [(1.06x-x)/x]*100 = (0.06/1)*100 = 6%
Cross-price elasticity of demand is given Ec = (% Change in Quantity Demanded of good / % Change in Price of good)
Cross-price elasticity of demand = 10% / 6%
Cross-price elasticity of demand = 0.10 / 0.06
Cross-price elasticity of demand = 1.6666666667
Cross-price elasticity of demand = 1.667
Therefore, the cross-price elasticity of demand of State Farm Auto Policies is 1.667.
The journal entry to transfer completed products from production to finished goods inventory includes which two of the following? (You may select more than one answer. Single click the box with the question mark to produce a check mark for a correct answer and double click the box with the question mark to empty the box for a wrong answer. Any boxes left with a question mark will be automatically graded as incorrect.)
Debit to Finished Goods Inventory ?
Credit to Work in Process Inventory ?
Credit to Finished Goods Inventory ?
Debit to Work in Process Inventory ?
Debit to Raw Materials Inventory ?
Credit to Raw Materials Inventory ?
Answer:
Debit finished goods inventory
Credit Work in Process Inventory
Explanation:
The journal entry that is required to transfer the completed products from the production stage to finished goods inventory which is the amount of goods in the inventory that have been produced and as well is available and ready for customer to buy will includes to Debit finished goods inventory and to Credit Work in Process. Inventory
Debit finished goods inventory
Credit Work in Process Inventory
(Being to record finished goods inventory)
The following information is related to Dickinson Company for 2020.
Retained earnings balance, January 1, 2020 $980,000
Sales revenue 25,000,000
Cost of goods sold 16,000,000
Interest revenue 70,000
Selling and administrative expenses 4,700,000
Write-off of goodwill 820,000
Income taxes for 2020 1,244,000
Gain on the sale of investments 110,000
Loss due to flood damage 390,000
Loss on the disposition of the wholesale division (net of tax) 440,000
Loss on operations of the wholesale division (net of tax) 90,000
Dividends declared on common stock 250,000
Dividends declared on preferred stock 80,000
Dickinson Company decided to discontinue its entire wholesale operations (considered a discontinued operation) and to retain its manufacturing operations. On September 15, Dickinson sold the wholesale operations to Rogers Company. During 2020, there were 500,000 shares of common stock outstanding all year.
Required:
Prepare a multiple-step income statement and a retained earnings statement.
Answer:
Dickson Company
Multi-step Income Statement for the year ended December 31, 2020:
Sales revenue $25,000,000
Cost of goods sold 16,000,000
Gross profit $9,000,000
Interest revenue 70,000
Total revenue $9,070,000
Selling and
administrative expenses 4,700,000
Write-off of goodwill 820,000 $5,520,000
Income from operations $3,550,000
Gain on the sale of investments 110,000
Loss due to flood damage (390,000)
Income before taxes 3,270,000
Income taxes for 2020 1,244,000
Net Income $2,026,000
Loss on the disposition of
the wholesale division (net of tax) (440,000)
Loss on operations of the
wholesale division (net of tax) (90,000)
Comprehensive Income $1,496,000
EPS = $2.992
Statement of Retained Earnings for the year ended December 31, 2020:
Comprehensive Income $1,496,000
Retained earnings balance, Jan, 1 980,000
Dividends: common stock 250,000
Dividends: preferred stock 80,000 (330,000)
Retained earnings, December 31 $2,146,000
Explanation:
a) Data and Calculations:
Retained earnings balance, January 1, 2020 $980,000
Sales revenue 25,000,000
Cost of goods sold 16,000,000
Interest revenue 70,000
Selling and administrative expenses 4,700,000
Write-off of goodwill 820,000
Income taxes for 2020 1,244,000
Gain on the sale of investments 110,000
Loss due to flood damage 390,000
Loss on the disposition of the wholesale division (net of tax) 440,000
Loss on operations of the wholesale division (net of tax) 90,000
Dividends declared on common stock 250,000
Dividends declared on preferred stock 80,000
b) EPS = $2.992 ($1,496,000/500,000 shares)
Here is the ledger for Blossom Company.
Cash
Oct. 1 8,660 Oct. 4 2,060
Oct. 10 2,640 Oct. 12 3,160
Oct. 10 9,660 Oct. 15 360
Oct. 20 810 Oct. 30 410
Oct. 25 3,660 Oct. 31 610
Accounts Receivable
Oct. 6 910 Oct. 20 810
Oct. 20 1,030
Supplies
Oct. 4 2,060 Oct. 31 1,840
Equipment
Oct. 3 4,660
Notes Payable
Oct. 10 9,660
Accounts Payable
Oct. 12 3,160 Oct. 3 4,660
Common Stock
Oct. 1 8,660
Oct. 25 3,660
Dividends
Oct. 30 410
Service Revenue
Oct. 6 910
Oct. 10 2,640
Oct. 20 1,030
Salaries and Wages Expense
Oct. 31 610
Supplies Expense
Oct. 31 1,840
Rent Expense
Oct. 15 360
Required:
Reproduce the journal entries for only the transactions that occurred on October 1, 10, and 20.
b.Prepare a trial balance at October 31.
Answer:
1/Oct : Cash (Dr.) $8,660
Accounts Receivable (Cr.) $8,660
10/Oct : Equipment & Supplies (Dr.) $9,660
Notes Payable (Cr.) $9,660
20/Oct : Accounts Receivable (Dr.) $2,640
Service Revenue (Cr.) $2,640
Explanation:
Debits $16,960
Cash 6,600
Accounts Receivable 1,840
Supplies 1,840
Equipment 4,660
Dividend 2,020
Credits : $16960
Accounts Payable 4,660
Notes Payable 9,660
Service Revenue 2,640
A speculator can choose between buying 100 shares of a stock for $40 per share and buying 1000 European call options on the stock with a strike price of $45 for $4 per option.For second alternative to give a better outcome at the option maturity,the stock price must be above:_________.A) $45B) $46C) $55D) $50
Answer:
D) $50
Explanation:
When stock price = 50
Profit on shares = (Stock price - Purchase price) * Number of shares = (50 - 40) * 100 = 1000
Profit on call option = Number of options * (stock price - exercise price - premium paid) = 1000 * (50 - 45 - 4) = 1000
Hence when stock price = 50, both the options would yield the same profit but the call option strategy would have an upper hand in profitability for every price increase above the $50 level because then the share buying strategy would yield $100 profit for every $1 price increase whereas the option buying strategy would yield $1000 profit for the same level of price increase.
Hence for the second option to yield higher profit, the stock price should be above 50.
Ketchup is a complement (as well as a condiment) for hot dogs. If the price of hot dogs rises, what happens to the market for ketchup? For tomatoes? For tomato juice? For orange juice?
Answer:
They will decrease except for Orange Juice
Explanation:
When prices for an item increase this causes less people to be able to afford paying for that item. Therefore, demand for that item decreases. Since Ketchup is a complimentary item for hot dogs this would cause demand for Ketchup to decrease as well and the same goes for all the ingredients used to make ketchup. This includes tomatoes and tomato juice, their market would decrease as well. Orange Juice is not directly affected by such an event since it is not complimentary to hot dogs.
Lorenzo Company uses a job order costing system that charges overhead to jobs on the basis of direct materials cost. At year-end, the Work in Process Inventory account shows the following.
Date Explanation Debit Credit Balance
2017
Dec. 31 Direct materials cost 1,500,000 1,500,000
31 Direct labor cost 300,000 1,800,000
31 Overhead applied 600,000 2,400,000
31 To finished goods 2,350,000 50,000
1. Determine the predetermined overhead rate used (based on direct materials cost).
2. Only one job remained in work in process inventory at December 31, 2017. Its direct materials cost is $30,000. How much direct labor cost and overhead cost are assigned to this job?
Answer and Explanation:
The computation is shown below:
a. The predetermined overhead rate is
= Overhead applied ÷ direct material cost
= $600,000 ÷ $1,500,000
= 40%
2. The direct labor cost and the overhead cost assigned is
= Total cost in process - applied overhead - material cost
= $50,000 - ($30,000 × 0.40) - $30,000
= $8,000
Hence, the same would be considered
Consider the recorded transactions below.
Debit Credit
1. Accounts Receivable 8,400 Service Revenue 8,400
2. Supplies 2,300 Accounts Payable 2,300
3. Cash 10,200 Accounts Receivable 10,200
4. Advertising Expense 1,000 Cash 1,000
5. Accounts Payable 3,700 Cash 3,700
6. Cash 1,100 Deferred Revenue 1,100
Post each transaction to T-accounts and compute the ending balance of each account. The beginning balance of each account before the transactions is:
Cash, $2,700;
Accounts Receivable, $3,500;
Supplies, $330;
Accounts Payable, $2,800;
Deferred Revenue, $230.
Service Revenue and Advertising Expense each have a beginning balance of zero.
Answer:
The ending balance of each account after the transactions is:
Cash, $9,300;
Accounts Receivable, $1,700;
Supplies, $2,630;
Accounts Payable, $1,400;
Deferred Revenue, $1,330.
Service Revenue and Advertising Expense each have an ending balance of zero.
Explanation:
Note: See the attached excel file for the T-accounts and computation of the ending balance (in red color).
The Service Revenue and Advertising Expense each have an ending balance of zero because they are to bee transferred to the income statement of the period. The income statement as an abridged version can be shown as follows:
Income statement (Abridged)
For the Period ...
Particulars $
Service Revenue 8,400
Advertising Expense (1,000)
Net income 7,400
There are often considerable differences in how projects are managed within certain firms, even if the same project management structure is being used. Explain how and why this phenomenon occurs and what can be done to ensure consistency.
Answer is given below :
Explanation:
A project is a combination of different technologies and columns. Oversight and control for a project, activity monitoring and control cycle (comparison of performance criteria runs in four stages. Comparison of actual and planned performance. Performance monitoring and action). Creole begins with setting performance standards, which become part of the plan.Project management methods and structures provide a framework for project management in different situations - they often provide commentary for project managers.Project management teams often prioritize and select the best course of action based on personality: the project manager's insight. This approach varies from one person to another and therefore has a different management approach within an organization.To ensure sustainability, an organization must develop standard practices for its business sector. This ensures that managers follow the same procedure and adhere to the process.A new oven will save $100 per year in electricity expense. How much can we afford to pay for this oven if it is expected to last 15 years
Answer:
$557.55
Explanation:
Missing word "The interest rate is 16% per year"
Present Value of annuity of 1 = (1-(1+i)^-n)/i
Where, i = 16%, n=15
Present Value of annuity of 1 = (1-(1+0.16)^-15)/0.16
Present Value of annuity of 1 = 5.575456
Present Value of saving of electricity expense = Annual Saving * Present Value of annuity of 1 = $100.00 * 5.575456 = $557.55. So, the amount we can afford to pay is $557.55
Sosa Diet Supplements had earnings after taxes of $1,170,000 in 20X1 with 347,000 shares of stock outstanding. On January 1, 20X2, the firm issued 103,000 new shares. Because of the proceeds from these new shares and other operating improvements, earnings after taxes increased by 31 percent.
a. Compute earnings per share for the year 20X1. (Round your answer to 2 decimal places.)
b. Compute earnings per share for the year 20X2. (Round your answer to 2 decimal places.)
Answer:
A. $3.37
B. $3.41
Explanation:
A.Computation for earnings per share for the year 20X1
20X1 Earnings per share= $1,170,000/347,000
20X1 Earnings per share= $3.37
Therefore earnings per share for the year 20X1 will be $3.37
B. Computation for earnings per share for the year 20X2.
First step is to calculate the Earnings available to common stockholders
Earnings available to common stockholders = $1,170,000x (1+.31 )
Earnings available to common stockholders = $1,170,000x 1.31
Earnings available to common stockholders = = $1,532,700
Second step is to calculate the Common shares outstanding
Common shares outstanding = 347,000 + 103,000
Common shares outstanding = 450,000
Now let calculate the earnings per share for the year 20X2
20X2 Earnings per share=$1,532,700/450,000
20X2 Earnings per share = $3.41
Therefore earnings per share for the year 20X2 will be $3.41
Ananda owns a clothing store that sells graphic T-shirts. N is the number of shirt she sells each month. the revenue function of her store is our equals 25n the cost function of her store is C equals 10n +900 using a calculator what is the breaking even point of Amanda store