Answer:
*debt
*equity
Explanation:
Business financing are regarded to ways in which individual or organization can seek funds to manage business activities. These activities can be to purchase raw materials, running of the business and so on. Funds can be seek can from financial institution such as bank
The two forms of business financing are debt(borrowed funds) and equity (ownership funds.
Debt which is borrowed funds is way to source funds for business activities, it's a means to seek fund for working capital capital, however it will be paid back with interest at a given period of time.
Equity which is ownership funds, is another way to source funds for business activities through selling of shares of that particular organization to investors, and others
Pharoah Inc. has decided to raise additional capital by issuing $173,000 facevalue of bonds with a coupon rate of 6%. In discussions with investment bankers, it was determined that to help the sale of thebonds, detachable stock warrants should be issued at the rate of one warrant for each $100 bond sold. The value of the bondswithout the warrants is considered to be $155,700, and the value of the warrants in the market is $20,760. The bonds sold in the market at issuance for $174,600.
A. What entry should be made at the time of the issuance of the bonds and warrants?
B. Prepare the entry if the warrants were non-detachable.
Answer:
a. Debit Credit
Cash $174,600
Discount on bond payable $18,941
Bonds Payable $173,000
Paid -in Capital - Stock Warrants $20,541
Workings
Market value of Bonds 155,700
Market value of Warrants 20,760
Total market value 176,460
Value assigned to Bonds = 174,600 / 176,460 * 155,700 = 154,059
Value assigned to Warrants = 174,600 / 176,460 *20,760 = 20,541
b. Debit Credit
Cash $174,600
Discount receivable $1,600
Bonds Payable $173,000
Case Inc. is a construction company specializing in custom patios. The patios are constructed of concrete, brick, fiberglass, and lumber, depending upon customer preference. On June 1, 2017, the general ledger for Case Inc. contains the following data.
Raw Materials Inventory $4,200 Manufacturing Overhead Applied $32,640
Work in Process Inventory $5,540 Manufacturing Overhead Incurred $31,650
Subsidiary data for Work in Process Inventory on June 1 are as follows.
Job Cost Sheets
Customer Job
Cost Element Rodgers Stevens Linton
Direct materials $600 $800 $900
Direct labor 320 540 580
Manufacturing overhead 400 675 725
$1,320 $2,015 $2,205
During June, raw materials purchased on account were $4,900, and all wages were paid. Additional overhead costs consisted of depreciation on equipment $900 and miscellaneous costs of $400 incurred on account.
A summary of materials requisition slips and time tickets for June shows the following.
Customer Job Materials Requisition Slips Time Tickets
Rodgers $800 $850
Koss 2,000 800
Stevens 500 360
Linton 1,300 1,200
Rodgers 300 390
4,900 3,600
General use 1,500 1,200
$6,400 $4,800
Overhead was charged to jobs at the same rate of $1.25 per dollar of direct labor cost. The patios for customers Rodgers, Stevens, and Linton were completed during June and sold for a total of $18,900. Each customer paid in full.
Instructions
Journalize the June transactions: (1) for purchase of raw materials, factory labor costs incurred, and manufacturing overhead cost incurred; (2) assignment of direct materials, labor, and overhead to production; and (3) completion of jobs and sale of goods.
Post the entries to Work in Process Inventory.
Reconcile the balance in Work in Process Inventory with the costs of unfinished jobs.
Prepare a cost of goods manufactured schedule for June.
Answer and Explanation:
Please find answer and explanation attached
Fort Corporation had the following transactions during its first month of operations: 1. Purchased raw materials on account, $85,000. 2. Raw Materials of $30,000 were requisitioned to the factory. An analysis of the materials requisition slips indicated that $6,000 was classified as indirect materials. 3. Factory labor costs incurred were $175,000 of which $145,000 pertained to factory wages payable and $30,000 pertained to employer payroll taxes payable. 4. Time tickets indicated that $145,000 was direct labor and $30,000 was indirect labor. 5. Overhead costs incurred on account were $198,000. 6. Manufacturing overhead was applied at the rate of 150% of direct labor cost. 7. Goods costing $115,000 are still incomplete at the end of the month; the other goods were completed and transferred to finished goods. 8. Finished goods costing $100,000 to manufacture were sold on account for $130,000.
Answer:
Follows are the solution to this question:
Explanation:
Services Names and descriptions of the accounts Dr. Cr.
1 Stock of raw resources 85000
Cash-able Accounts 85000
2 Stock of processes (30000-6000) 24000
Overhead of development 6000
Stock of raw materials 30000
3 employment manufacturer 175000
manufacturing plant wages 145000
Payroll Taxes 30000
4 Inventory job in process 145000
Overhead production 30000
Labor Plant 175000
5 Overhead production 198000
Cash-able Accounts 198000
6 Inventory of jobs in the process 217500
[tex](145000 \times 150 \%)[/tex]
Overhead of development 217500
7 Inventory of finished products 271500
Inventory job in process 271500
[tex](24000+145000+217500-115000)[/tex]
8 receivable Account 130000
Sales 130000
Wars sold at discount 100000
Inventory of finished products 100000
Suppose you are a manager for a multinational company that produces a variety of beauty products. Heartland Company was founded in 1942 and began making shampoo and soap products. Heartland, headquartered in St. Louis, Missouri, now sells hair care, soap, and makeup products in 22 countries across the globe. Heartland holds the majority market share in the U.S. and is largely regarded as a trend-leader in hair and beauty products. As the Global Brand Vice President, you have been tasked with taking the brand to Brazil, considered to be a large cosmetics market in the next few years. The Brazilian cosmetics and hair care market is largely dominated by Belleza who currently holds a 60% market share. Belleza is marketed toward young, fashion-forward women. The second largest company, Botánico, holds just a 20% share of the market. Your research suggests that while Botánico has efficient manufacturing and distribution, young consumers see them as being a brand for their mothers and grandmothers.
Given the information above, what is the best market entry strategy for this company?
a. Partnership
b. Exporting
c. Outsourcing
Answer:
a. Partnership
Explanation:
Brazil is a market that can be tricky if exporting is used. Botanico is struggling at 2nd position with only 20% share but are efficient in manufacturing and distribution which can be utilized by Heartland. Heartland is known as trend setter which is something Botanica lacks currently to woo the young women and girls into buying their products A partnership would simply result that competitive edges of both the parties can be employed together to win over the market.
A worker has two jobs, and they can choose to work any number of hours in a day on each job (up to the upper limit, if any), but can only work on one job at a time. The first job pays $10 per hour and has an upper limit of 6 hours per day. The second job pays $6 per hour and has no upper limit (for example, fixed-contract online freelance work). The worker will always choose the first job if they can. Consider their budget constraint with the amount of daily leisure time on the horizontal axis (from 0 to 24 hours) and their consumption expenditure on the vertical axis (which equals their daily income). Based on this information, which of the following is correct?
a. The workers budget constraint is kinked at 6 hours of free time.
b. The worker will never choose to consume exactly 18 hours of free time.
c. The slope of the budget constraint is -6 when the hours of free time is small, and 10 when the hours of free time is large.
d. For the choice of 8 hours of free time, the maximum expenditure for the day is 96
Answer:
The slope of the Budget constraint is -6 when the hours of free time is small, and 10 when the hours of free time is large ( C )
Explanation:
The slope of the Budget constraint is -6 when the hours of free time is small, and 10 when the hours of free time is large
This is right, because whenever the hours of free time is small, This means that he will be under the second job that pays $6 per hour, with no upper limit on work hours, hence he will work more & enjoy less free time.
Hence the slope of BC = 6
Exercise 2-8 Preparing T-accounts (ledger) and a trial balance LO P2 Following are the transactions of a new company called Pose-for-Pics Aug. 1 Madison Harris, the owner, invested $6,see cash and $33,509 of photog company paid $2,100 cash for an insurance policy covering the next 24 month:s s The company purchased office supplies for $888 cash. 20 The company received $3,331 cash in photography fees earned. 31 The company paid $675 cash for August utilities.
Required:
1. Post the transactions to the T-accounts.
2. Use the amounts from the T-accounts in Requirement (1) to prepare an August 31 trial balance for Pose-for-Pics. Complete this question by entering your answers in the tabs below.
Required 1 Required 2
Post the transactions to the T-accounts Cash ies Balance
Answer:
All requirements solved
Explanation:
For different accounts, debits and credits may translate to increases or decreases, but the debit side must always lie to the left of the T outline and the credit entries must be recorded on the right side.
T-Accounts
Cash
Date Description Debit Credit
1-Aug M Harris, Capital $6,500
2-Aug Prepaid Insurance $2,100
5-Aug Office Supplies $880
20-Aug Fees Earned $3,331
31-Aug Utilities Expense $675
31-Aug Balance $6,176
Total $9,831 $9,831
Office Supplies
Date Description Debit Credit
5-Aug Cash $880
31-Aug Balance $880
Total $880 $880
Prepaid Insurance
Date Description Debit Credit
2-Aug Cash $2,100
31-Aug Balance $2,100
Total $2,100 $2,100
Photography Equipment
Date Description Debit Credit
1-Aug M Harris, Capital $33,500
31-Aug Balance $33,500
Total $33,500 $33,500
M Harris, Capital
Date Description Debit Credit
1-Aug Cash $6,500
1-Aug Photography Equipment $33,500
31-Aug Balance $40,000
Total $40,000 $40,000
Utilities Expense
Date Description Debit Credit
31-Aug Cash $675
31-Aug Balance $675
Total $675 $675
Photography Fees Earned
Date Description Debit Credit
20-Aug Cash $3,331
31-Aug Balance $3,331
Total $3,331 $3,331
Trial Balance
Debit Credit
Cash $6,176
Office Supplies $880
Prepaid Insurance $2,100
Photography Equipment $33,500
M Harris, Capital $40,000
Photography Fees Earned $3,331
Utilities Expense $675
Totals $43,331 $43,331
Assume you work for a valuation firm, and you have been given the assignment of valuing a local law firm comprising three partners and four associates. One partner plans to retire spoon, and the partners are trying to agree on the value of a one-third interest in the firm in order to buy out the departing partner's interest. The firm's revenue per partner is two times higher than that of the average firm of a similar size, but you soon discover that 80% of firm revenue is from one client.
Required:
Please raise one question about this scenario that you would want to address.
Answer:
Valuation of a law firm
One question to raise:
Which of the partners brought in this one powerful client? I hope it is not the retiring partner.
Explanation:
If the retiring partner had brought in the client and had been in charge of the client's business, the firm's valuation would be drastically influenced by these facts. It is likely that the client might retire the service as the retiring partner retires. This will jeopardize the revenue outlook of the firm, its future prospects, and its current value. However, if the retiring partner is not linked to this powerful client, then it may be that the firm's value will not be at risk. Again, over-dependence on one client for firm's revenue is does not augur well for the firm. Moreover, the margin of over-dependence is too high for comfort. There is serious need for a review of the relationship, not in terms of termination, but in terms of seeking for more big-ticket clients to relatively reduce the over-dependence.
Assume Merck (MRK) just announced that its next dividend will be $2, paid one year from now (you just missed the prior annual dividend). You expect the dividend will grow (after the $2 dividend) by 3% per year forever. Your required return is 10%. What are you willing to pay for a share of Merck stock
Answer:
$28.57
Explanation:
Current price = D1/(Required return-Growth rate)
D1 (Next dividend) = $2
Required return = 10% = 0.1
Growth rate = 3% = 0.03
Current price = $2/(0.1-0.03)
Current price = $2 / 0.07
Current price = $28.57143
Current price = $28.57
Hence, i will be willing to pay $28.57 for a share of Merck stock.
________ is used to make purchases while ________ is the total collection of pieces of property that serve to store value.
Answer:
Money; wealth.
Explanation:
Money can be defined as any recognized economic unit that is generally accepted as a medium of exchange for goods and services, as well as repayment of debts such as loans, taxes across the world.
Basically, money is a currency used for the purchase of goods and services such as food, clothes, perfume, shoes, automobile etc.
Hence, money is used to make purchases while wealth is the total collection of pieces of property that serve to store value. This simply means, wealth refers to the total or overall assets that is being owned by an individual or organization at a specific period of time.
Pitbull Construction Corporation applies IFRS, has equipment that it can reliably measure fair value of, and has chosen to apply the revaluation model to valuing this equipment on its accounting records. The carrying value of this equipment on Pitbull's books at the end of last year, December 31, 20X1, was $200,000. At the end of this year, December 31, 20X2, due to decreased demand for the equipment, especially when resold as used, the fair value is $150,000. For the year 20X2, in relation to this equipment for which Pitbull has chosen to apply the revaluation method, Pitbull must:_________
Answer and Explanation:
If there is decrease in fair value of an asset as is seen in the example with Pitbull corporation, we decrease asset revaluation reserve in the balance sheet by the value reduced $50000 here to recognise new carrying value of the asset and then debit the expenses of revaluation to the income statement or profit and loss account. If there was an increase in fair value, revaluation would add to retained earnings in balance sheet and income in income statement
what will you use for banca/boat to move
Answer:
a paddle
Explanation:
Using a "paddle" is very important in order to move/propel a boat. Paddling creates a force which goes against the water. This force is faced by an opposite force that is equal and that which allows the boat to move forward.
So as you push the water asides, the boat accelerates. Such technique is deemed efficient when using the boat. Not following the proper technique will not move the boat.
Your company assembles five different models of a motor scooter that is sold in specialty stores in the United States. The company uses the same engine for all five models. You have been given the assignment of choosing a supplier for these engines for the coming year. Due to the size of your warehouse and other administrative restrictions, you must order the engines in lot sizes of 1,000 units. Because of the unique characteristics of the engine, special tooling is needed during the manufacturing process for which you agree to reimburse the supplier. Your assistant has obtained quotes from two reliable engine suppliers and you need to decide which to use. The following data have been collected:
Requirements (annual forecast) 12,000 units
Weight per engine 22 pounds
Order processing cost $125 per order
Inventory carry cost 20 percent of the average value of inventory per year
Assume that half of lot size is in inventory on average (1,000/2 = 500 units).
Two qualified suppliers have submitted the following quotations:
ORDER QUANTITY SUPPLIER 1 UNIT PRICE SUPPLIER 2 UNIT PRICE
1 to 1,499 units/order $510.00 $505.00
1,500 to 2,999 units/order 500.00 505.00
3,000 + units/order 490.00 488.00
Tooling costs $22,000 $20,000
Distance 125 miles 100 miles
Your assistant has obtained the following freight rates from your carrier:
Truckload (40.000 lbs. each load): $0.80 per ton-mile
Less-than-truckload: $1.20 per ton-mile
Required:
a. Calculate the total cost for each supplier.
b. Which supplier would you select?
c. If you could move the lot size up to ship in truckload quantities, calculate the total cost for each supplier.
d. Would your supplier selection change?
Answer:
a. Cost of Supplier 1 : $6,214,300 per year
Cost of Supplier 2 : $6,147,840
b. Supplier 2 will be selected as it costs $66,460 less than supplier 1.
c. 1,818
d. No.
Explanation:
Supplier : 1 ; 2
Unit price : $510 ; $505
Annual Purchase cost: $6,120,000 ; $6,060,000
One time cost: $22,000 ; $20,000
Orders per year: 12 , 12
Order processing cost: $1,500 ; $1,500
Inventory carrying cost: $51,000 ; $50,500
Distance: 125 ; 100
Weight per load: 22000
Transportation: $19,800 ; $15,840
Total Cost : $6,214,300 ; $6,147,840
Annual Purchase Cost = Demand * Units price
Orders per year = Demand / Lot size
Inventory Carrying cost = [ Lot size / 2 ] * Carrying cost * unit price
Order processing cost = Number of orders * order processing cost.
c. Required lot size for truck : 40,000 / 22 ≈ 1,818
Suppose that France and Austria both produce rye and wine. France's opportunity cost of producing a bottle of wine is 4 bushels of rye while Austria's opportunity cost of producing a bottle of wine is 10 bushels of rye. By comparing the opportunity cost of producing wine in the two countries, you can tell that __________ has a comparative advantage in the production of wine and __________has a comparative advantage in the production of rye.
Suppose that France and Austria consider trading wine and rye with each other. France can gain from specialization and trade as long as it receives more than __________of rye for each bottle of wine it exports to Austria. Similarly, Austria can gain from trade as long as it receives more than __________of wine for each bushel of rye it exports to France.
Based on your answer to the last question, which of the following prices of trade (that is, price of wine in terms of rye) would allow both Austria and France to gain from trade?
a. 7 bushels of rye per bottle of wine
b. 4 bushels of rye per bottle of wine
c. 1 bushel of rye per bottle of wine
d. 11 bushels of rye per bottle of wine
Answer:
France has comparative advantage in production of wine
Austria has comparative advantage in production of rye.
4 bushels of rye for each bottle of wine
1 bottle of wine for each bushel.
b. 4 bushel of rye per bottle of wine.
Explanation:
France has comparative advantage in producing wine as it has opportunity cost of 4 bushels per bottle of wine. Austria has comparative advantage in producing bushels as it has opportunity cost of 10 bushels per bottle of wine. The both countries can gain advantage if they agree for 4 bushels per wine.
What is considered revenue recognition?
Answer:
revenue is recognized and determines how to account for it. Typically, revenue is recognized when a critical event has occurred, and the dollar amount is easily measurable to the company
Explanation:
examples:Sales Basis Method. With the sales basis revenue recognition methods, revenue is recorded at the time of sale.
Percentage of Completion Method
Completed Contract Method
31. Which one is not the barriers of Enterpreneurship:
(A) Lack of technical skills
(B) Political instability
(C) Technical knowledge
(D) Time pressure and distractions
Answer:
d
Explanation:
I think so, I'm not sure
Mindy Novak is writing a paper and he must determine which of Porter's three generic strategies Beulah’s Boutiques has implemented. Mindy finds out that Beulah’s Boutiques offers specialty products found only in boutiques around the world to affluent customers. What would Mindy determine Beulah’s Boutiques is using as its generic strategy?
Answer:
The answer to this question can be defined as follows:
Explanation:
Mindy Novak writes a report, also determines, whether Beulah's boutiques have adopted Porter's three generic techniques. Mindy discovers Beulah's Boutiques only offer affluent clients premium brands in shops throughout the world, and he determines Mindy, that standard strategy of the boutiques of Beulah, which canister be defined as follows:
High expense, to the broad market Low cost, a narrow market. Low-cost, wide market High cost, narrow market High cost, narrow marketWhich are possible employers in the Financial career cluster? Check ALL that apply.
A. private company
B. government
C. nonprofit organization
D. bank
E. stock market
The correct option is B and D.
What is the Finance Career Cluster?The Finance Career Cluster prepares students for careers in financial and investment planning, banking, insurance, and business financial management. Finance career opportunities are available in every sector of the economy and require skills in organization, time management, customer service, and communication.
What are the four career pathways in finance?The four career pathways in the finance cluster are banking and related services, business financial management, financial and investment planning, and insurance services.
Learn more about finance here https://brainly.com/question/1279044
#SPJ2
Admitting New Partner Who Contributes Assets After the tangible assets have been adjusted to current market prices, the capital accounts of Brad Paulson and Drew Webster have balances of $45,000 and $60,000, respectively. Austin Neel is to be admitted to the partnership, contributing $30,000 cash to the partnership, for which he is to receive an ownership equity of $35,000. All partners share equally in income.
Required:
a. Journalize the entry to record the admission of Neel, who is to receive a bonus of $5,000.
b. What are the capital balances of each partner after the admission of the new partner?
c. Why are tangible assets adjusted to current market prices prior to admitting a new partner?
Answer:
a. Journal Entry to record admission of Neil
Date Account Title and Explanation Debit Credit
31-Dec Cash Account $30,000
Brad Paulson capital Account $2,500
($5000/2)
Drew Webster Capital $2,500
($5000/2)
To Austin Neel capital A/c $35,000
b. Capital account balances after admission of new partner
Date Account Title and Explanation Debit Credit
Brad paulson capital Account $42,500
($45000-$2500)
Drew Webster Capital Account $57,500
($60000-$2500)
To Austin Neel capital Account $35,000
c. Tangible assets should be adjusted to current market prices so that the new partner does not share in any gains or losses from changes in market prices prior to being admitted.
Bonita Beauty Corporation manufactures cosmetic products that are sold through a network of sales agents. The agents are paid a commission of 18% of sales. The income statement for the year ending December 31, 2014, is as follows.
BONITA BEAUTY CORPORATION
Income Statement For the Year Ended December 31, 2014
Sales $75,000,000
Cost of goods sold
Variable $31,500,000
Fixed 8,610,000 40,110,000
Gross margin $34,890,000
Selling and marketing expenses
Commissions $13,500,000
Fixed costs 10,260,000 23,760,000
Operating income $11,130,000
The company is considering hiring its own sales staff to replace the network of agents. It will pay its salespeople a commission of 8% and incur additional fixed costs of $7,500,000.
Under the current policy of using a network of sales agents, calculate the Bonita Beauty Corporation
Answer:
the question is incomplete, so I looked for the requirements of similar questions:
A. Calculate the company’s break-even point in sales dollars for the year 2014 if it hires its own sales force to replace the network of agents.
B. Calculate the degree of operating leverage at sales of $75,000,000 if (1) Bonita Beauty uses sales agents, and (2) Bonita Beauty employs its own sales staff.
a) total sales = $75,000,000
variable costs:
COGS $31,500,000
commissions $6,000,000
total variable costs = $37,500,000
contribution margin ratio = $37,500,000 / $75,000,000 = 0.5
total fixed costs = $8,610,000 + $10,260,000 + $7,500,000 = $26,370,000
break even point in $ = $26,370,000 / 0.5 = $52,740,000
b) one of the formulas that we can use to calculate the degree of operating leverage is:
operating leverage = fixed costs / total costs
1) total costs using sales agents = $63,870,000
total fixed costs = $8,610,000 + $10,260,000 = $18,870,000
degree of operating leverage = $18,870,000 / $63,870,000 = 29.54%
2) total costs employing its own sales staff = $6,000,000 + $31,500,000 + $26,370,000 = $63,870,000
total fixed costs = $26,370,000
degree of operating leverage = $26,370,000 / $63,870,000 = 41.29%
Analyzing Unearned Revenue Disclosures
The following disclosures (excerpted) are from the August 28, 2016, annual report of Costco Wholesale Corporation.
Revenue Recognition: We generally recognize sales, net of estimated returns, at the time the member takes possession of merchandise or receives services. When we collect payment from customers prior to the transfer of ownership of merchandise or the performance of services, the amount recieved is generally recorded as deferred revenue on the consolidated balance sheets until the sales or service is completed. Membership fee revenue represents annual membership fees paid by our memberships. We account for membership fee revenue, net of estimated refunds, on a deferred basis, whereby revenue is recognized ratably over the one-year membership period.
Revenue
($ millions) August 28, 2016 August 30, 2015 August 31, 2014
Net Sales $116,073 $113,666 $110,212
Membership fees 2,646 2,533 2,428
Total revenue $118,719 $116,199 $112,640
Current Liabilities ($ millions) August 28, 2016 August 30, 2015
Accounts payable $7,612 $9,011
Current portion of long-term debt 1,100 1,283
Accrued salaries and benefits 2,629 2,468
Accured member rewards 869 813
Deferred membership fees 1,362 1,269
Other current liabilities 2,003 1,695
Total current liabilities $15,575 $16,539
(a) Which of the following statements best explains in layman terms how Costco accounts for the cash received for its membership fees?
Because Costco does not know how many of its members will continue to the end of the year, cash received from members is recorded as a liability and recognized as revenue only at year-end.
When it receives cash, the company records it as a current liability. Then, it recognizes revenue evenly over the year.
The company records revenue when the cash is received.
Because Costco has a refund policy, the company records revenue when the cash is received, less an allowance for expected membership terminations.
Mark 1.00 out of 1.00
(b) Use the balance sheet information on Costco's Deferred Membership Fees liability account and its income statement revenues related to Membership Fees earned during 2016 to compute the cash that Costco received during 2016 for membership fees.
Total cash received (in $ millions) = $Answer
(c) Use the financial statement effects template to show the effect of the cash Costco received during 2016 for membership fees and the recognition of membership fees revenue for 2016.
Use negative signs with answers, when appropriate.
Balance Sheet
Transaction ($ millions)
Cash Asset + Noncash Assets = Liabilities + Contributed Capital + Earned Capital
Receive cash in advance for membership fees Answer Answer Answer Answer Answer
Recognized membership fees earned Answer Answer Answer Answer Answer
Income Statement
Revenue - Expenses = Net Income
Answer Answer Answer
Answer Answer Answer
Feedback
You have correctly selected 15.
Partially correct
Marks for this submission: 15.00/18.00.
On May 11 Sydney accepts delivery of $20,500 of merchandise it purchases for resale from Troy: invoice dated May 11, terms 3/10, n/90, FOB shipping point. The goods cost Troy $13,735. Sydney pays $410 cash to Express Shipping for delivery charges on the merchandise. 12 Sydney returns $1,300 of the $20,500 of goods to Troy, who receives them the same day and restores them to its inventory. The returned goods had cost Troy $871. 20 Sydney pays Troy for the amount owed. Troy receives the cash immediately. (Both Sydney and Troy use a perpetual inventory system and the gross method.)
Required:
a. Prepare journal entries that Sydney Retailing (buyer) records for these three transactions.
b. Prepare journal entries that Troy Wholesalers (seller) records for these three transactions.
Answer: Please see explanation for answer
Explanation:
A) Journal entry for Sydney retailing buyer
i)To record purchase of inventory on account
Date Account titles Debit Credit
May 11 Accounts Payable $20,500
Merchandise Inventory $20,500
ii)To record shipping expense paid
Date Account titles Debit Credit
May 11 Merchandise Inventory $ 41
Cash $ 410
iii) To record goods returned to seller
Date Account titles Debit Credit
May 12 Accounts Payable $1,300
Merchandise Inventory $1,300
iv To record payment on account.
Date Account titles Debit Credit
May 20 Accounts Payable $19,200
Merchandise Inventory $576
Cash $18,624
Calculation:
Accounts payable= Purchases− Purchase return
=$20,500−$1,300
=$19,200
Discount=Accounts payable X 3%
=$19,200×0.03
=$576
B) Journal entry for Troy - Seller
i)To record sales of goods on account
Date Account titles Debit Credit
May 11 Accounts receivable $20,500
Sales Revenue $20,500
ii) To record cost of goods sold
Date Account titles Debit Credit
May 11 Cost of goods sold $13,735
Merchandise Inventory $13,735
III) To record sales return
Date Account titles Debit Credit
May 12 Sales returns and allowance $1,300
Account receivable $1,300
iv) To record cost of goods sold reversed for sales return
Date Account titles Debit Credit
May 12 Merchandise Inventory $871
Cost of goods sold $871.
v) To record cash received for goods sold.
Date Account titles Debit Credit
May 20 Cash $19,200
Sales discount $576
Account receivables $18,624
Calculation:
Accounts receivables= sales− sales return
=$20,500−$1,300
=$19,200
Discount=receivables X 3%
=$19,200×0.03
=$576
1. Stockholders invest $90,000 cash to start the business.
2. Purchased three digital copy machines for $400,000, paying $118,000 cash and signing a 5-year, 6% note for the remainder.
3. Purchased $5,500 paper supplies on credit.
4. Cash received for photocopy services amounted to $8,400.
5. Paid $500 cash for radio advertising.
6. Paid $800 on account for paper supplies purchased in transaction 3.
7. Dividends of $1,600 were paid to stockholders.
8. Paid $1,200 cash for rent for the current month.
9. Received $2,200 cash advance from a customer for future copying.
10. Billed a customer for $500 for photocopy services completed.
No. Account Titles and Descriptions Debit Credit
1.
2.
3.
4.
5.
Answer:
S/n General journal Debit Credit
1. Cash $90,000
Common stock $90,000
2. Equipment $400,000
Cash $180,000
Notes payable $282,000
3 Supplies $5,500
Account payable $5,500
4. Cash $8,400
Service revenue $8,400
5. Advertising expense $500
Cash $500
6. Account payable $800
Cash $800
7. Dividends $1,600
Cash $1,600
8. Rent expense $1,200
Cash $1,200
9. Cash $2,200
Unearned service revenue $2,200
10. Account receivable $500
Service revenue $500
Harnett Corporation has two manufacturing departments--Molding and Assembly. The company used the following data at the beginning of the period to calculate predetermined overhead rates:
Molding Assembly Total
Estimated total machine-hours (MHs) 3,000 7,000 10,000
Estimated total fixed manufacturing overhead cost $24,000 $53,200 $77,200
Estimated variable manufacturing overhead cost per MH $1.00 $2.00
During the period, the company started and completed two jobs--Job E and Job M. Data concerning those two jobs follow:
Job E Job M
Direct materials $21,600 $9,300
Direct labor cost $22,600 $9,500
Molding machine-hours 2,500 500
Assembly machine-hours 2,500 4,500
Required:
a. Assume that the company uses a plant-wide predetermined manufacturing overhead rate based on machine-hours. Calculate that overhead rate, (Round your answer to 2 decimal places.)
b. Assume that the company uses a plant-wide predetermined manufacturing overhead rate based on machine-hours. Calculate the amount of manufacturing overhead applied to Job E. (Do not round intermediate calculations.)
c. Assume that the company uses a plant-wide predetermined manufacturing overhead rate based on machine-hours. Calculate the total manufacturing cost assigned to Job E. (Do not round intermediate calculations.)
d. Assume that the company uses a plant-wide predetermined manufacturing overhead rate based on machine-hours and uses a markup of 20% on manufacturing cost to establish se ling prices. Calculate the selling price for Job E. (Do not round intermediate
calculations.)
e. Assume that the company uses departmental predetermined overhead rates with machine-hours as the allocation base in both departments. What is the departmental predetermined overhead rate in the Molding department? (Round your answer to 2 decimal places.)
f. Assume that the company uses departmental predetermined overhead rates with machine-hours as the a location base in both production departments. What is the departmental predetermined overhead rate in the Assembly department? (Round your answer to
Answer:
Results are below.
Explanation:
a) To calculate the predetermined manufacturing overhead rate we need to use the following formula:
Predetermined manufacturing overhead rate= total estimated overhead costs for the period/ total amount of allocation base
Predetermined manufacturing overhead rate= (77,200 + 3,000 + 14,000) / 10,000
Predetermined manufacturing overhead rate= $9.42 per machine hour
b) To allocate overhead, we need to use the following formula:
Allocated MOH= Estimated manufacturing overhead rate* Actual amount of allocation base
Job E:
Allocated MOH= 5,000*9.42
Allocated MOH= $23,550
c) Total cost= 21,600 + 22,600 + 47,100
Total cost= $91,300
d) Selling price= 91,300*1.2= $109,560
e) Predetermined manufacturing overhead rate= (24,000/3,000) + 1
Predetermined manufacturing overhead rate= $9 per machine hour
f) Predetermined manufacturing overhead rate= (53,200/7,000) + 2
Predetermined manufacturing overhead rate= $9.6 per machine hour
Consider the following story:
Woody loves bowling, and he also loves Beth.
Woody does not particularly like the beach.
The best outcome for Woody is to be at the bowling alley with Beth.
Given the choice of going bowling alone or being at the beach with Beth, Woody would choose to be with Beth.
The worst outcome for Woody is to be at the beach alone.
Beth loves the beach, and she also loves Woody.
Beth does not particularly like bowling.
The best outcome for Beth is to be at the beach with Woody.
Given the choice of going to the beach alone or bowling with Woody, Beth would choose to be with Woody.
The worst outcome for Beth is to be at the bowling alley alone. Woody and Beth plan to meet after work, but each has forgotten where. Suppose the following payoff matrix tells the story, given Woody and Beth's preferences above.
Complete the matrix by filling in the missing payoffs. (Enter your responses as integers.)
Beth
Bowling Beach
Woody Bowling
Beach
a. Find all Nash equilibria in this game, if any.
b. Is this game an archetype? If yes, identify the archetype and explain your selection.
Answer:
a. Both beth and Woody are comfortable at their own preferences and feel dominant in their own strategy.
The outcome to meet somewhere will be either the bowling alley or the beach, any one of Beth and Woody will dominate, however both's priority is to stay together which is fulfilled in both the scenarios.
Explanation:
a. Both beth and Woody are comfortable at their own preferences and feel dominant in their own strategy.
The outcome to meet somewhere will be either the bowling alley or the beach, any one of Beth and Woody will dominate, however both's priority is to stay together which is fulfilled in both the scenarios.
I WILL GIVE BRAIN
After seviewing the technical skills required to perform tasks in the manufacturing industry, do you think these skills are
more or less important than the interpersonal skills we discussed in previous units?
The marginal external cost associated with air pollution increases with the annual output of a polluting industry. At the current competitive equilibrium level of output per year, the marginal external cost is $10 per unit of output. To achieve efficiency,
a. a corrective tax of $10 per unit of output is required.
b. a corrective tax of more than $10 per unit of output is required.
c. a corrective tax of less than $10 per unit of output is required.
d. a corrective subsidy of $10 per unit of output is required.
e. a corrective subsidy of less than $10 per unit of output is required .
Answer:
The answer is "Option c".
Explanation:
The Marginal external cost, owing only to the production of an extra unit of goods or services, is the cost changes for persons besides the producer or buyer of goods or services. In this, question the "option c" is right in, this regard because it needs a correction tax of less than $10 per unit of production.
Seiko’s current salary is $85,000. Her marginal tax rate is 32 percent and she fancies European sports cars. She purchases a new auto each year. Seiko is currently a manager for an Idaho Office Supply. Her friend, knowing of her interest in sports cars, tells her about a manager position at the local BMW and Porsche dealer. The new position pays only $75,000 per year, but it allows employees to purchase one new car per year at a discount of $15,000. This discount qualifies as a nontaxable fringe benefit. In an effort to keep Seiko as an employee, Idaho Office Supply offers her a $10,000 raise. Answer the following questions about this analysis.
Problem 12-41
Part a a. Assuming it has a 21 percent marginal tax rate, what is the annual after-tax cost to Idaho Office Supply to provide Seiko with the $10,000 increase in salary?
Answer:
$7,900
Explanation:
Given that:
Assuming a marginal tax rate of 21%
Salary Raise = $10000
Annual after-tax cost to Idaho :
Salary raise ( 1 - marginal tax rate)
$10000 ( 1 - 21%)
$10000( 1 - 0.21)
$10000 - $2100
= $7,900
A group of 10 pineapple pickers can pick 240 pineapples in an hour. When one more pineapple picker is added to the group, they can pick 270 pineapples in an hour. Calculate the marginal product of the 11th pineapple picker.
Answer:
30 pineapples
Explanation:
The computation of the marginal product of the 11th pineapple picker is shown below:
= 11 pineapple - 10 pineapple
= 270 pineapples - 240 pineapples
= 30 pineapples
Hence, the marginal product of the 11th pineapple picker is 30 pineapples
We simply applied the above formula so that the correct value could come
Champion manufactures winter fleece jackets for sale in the United States. Demand for jackets during the season is normally distributed, with a mean of 20,000 and a standard deviation of 10,000. Each jacket sells for $60 and costs $30 to produce. Any leftover jackets at the end of the season are sold for $25 at the year-end clearance sale. Holding jackets until the year-end sale adds another $5 to their cost. A recent recruit has suggested shipping leftover jackets to South America for sale in the winter there rather than running a clearance. Each jacket will fetch a price of $35 in South America, and all jackets sent there are likely to sell. Shipping costs add additional $5 to the cost of any jacket sold in South America, along with the $5 for holding jackets till the end of the season.
Required:
a. Would you recommend the South American option? Support your decision with calculations.
b. How will the South American option affect production and profitability at Champion?
c. On average, how many jackets will Champion ship to South America each season? (Note: you have already calculated this value in order to get the expected profit for the South American option.
Answer:
a. South American generates higher service level.
b. The profitability is higher in South American Option.
c. 19,269 jackets
Explanation:
Particulars : Current Policy ; South American Option
Anticipate demand : 20,000 ; 20,000
Standard deviation : 10,000 ; 10,000
Unit costs : $30 ; $30
Sales price : $60 ; $60
Disposal value : $25 ; $30
Inventory holding cost : $5 ; $5
South America Sales Price : 0 ; $35
Shipping Costs : 0 ; $5
Salvage Value : $20 ; $25
Cost of under stock : $30 ; $30
Cost of overstock : $10 ; $5
Optimal cycle service level : 0.7500 ; 0.8571
Optimal production size : 26,745 ; 30,676
Expected profits : $472,889 ; $521,024
Expected Overstock 8,236 , 11,407
BensonBenson & Company is an architectural firm specializing in home remodeling for private clients and new office buildings for corporate clients. charges customers at a billing rate equal to % of the client's total job cost. A client's total job cost is a combination of (1) professional time spent on the client ( per hour cost of employing each professional) and (2) operating overhead allocated to the client's job. allocates operating overhead to jobs based on professional hours spent on the job. estimates its five professionals will incur a total of 10,000 professional hours working on client jobs during the year.
AllissaAllissa LarsonLarson hired BensonBenson to design her kitchen remodeling. A total of 35 professional hours were incurred on this job. In addition, LarsonLarson's remodeling job required one of the professionals to travel back and forth to her house for a total of 155 miles. The blueprints had to be copied four times because LarsonLarson changed the plans several times. In addition, 14 hours of secretarial time were used lining up the subcontractors for the job.
All operating costs other than professional salaries (travel reimbursements, copy costs, secretarial salaries, office lease, and soforth) can be assigned to the three activities. Total activity costs, cost drivers, and total usage of those cost drivers are estimated as follows:
Activity Total Activity Cost Cost Driver Usage Total Usage by Corporate Clients Total usage by Private Clients
Transporation to clients. . . . . . $9,000 Round-trip mileage to clients. . . . . 1,500 miles 13,500 miles
Blueprint copying. . . . . . . . . . . 35,000 Number of copies. . . . . . . . . . . . 250 copies 750 copies
Office support. . . . . . . . . . . . . . 190,000 Secretarial time. . . . . . . . . . . . . . . 2,600 secretarial 2,400 secretarial
hours hours
Total operating overhead. . . . $234,000
Required:
a. Calculate the current indirect cost allocation rate per professional hour.
b. Calculate the total amount that would be billed to LarsonLarson given the current costing structure.
c. Calculate the activity cost allocation rates that could be used to allocate operating overhead costs to client jobs.
d. Calculate the amount that would be billed to LarsonLarson using ABC costing.
e. Which type of billing system is more fair to clients? Explain.
Answer:
Benson & Company
a. Current indirect cost allocation rate per professional hour = Total overhead divided by 10,000 professional hours
$234,000/10,000
= $23.40
b. Total amount that would be billed to Larson with the current costing structure:
= $23.40 * 35
= $819.00
c. Overhead Rates based on ABC:
Transport to clients = $0.60 ($9,000/15,000)
Blueprint copying = $35.00 ($35,000/1,000)
Office support = $38.00 ($190,000/5,000)
d. Larson's Job based on ABC:
Transport to clients = $93 ($0.60 * 155)
Blueprint copying = 140 ($35.00 * 4)
Office support = 532 ($38.00 * 14)
Total $765
e. With Benson Company using ABC billing system to charge Larson, the system is fairer to clients generally, because it takes into consideration the volume of each activity consumed per client. Customers are charged based on actual activities consumed, and not based on some arbitrary figures. It is more reflective of the cost structure of the business and offers the best quality service to customers because price is determined by volume of activities.
Explanation:
a) Data and Calculations:
Professional hours spent on Larson job = 35 hours
Travel = 155 miles
Blueprints copies = 4
Secretarial time = 14 hours
Other operating costs:
Activity Total Activity Cost Driver Total Usage by Total Usage by
Cost Usage Corporate Clients Private Clients
Transportation Round-trip mileage
to clients $9,000 to clients 1,500 miles 13,500 miles
Blueprint
copying 35,000 Number of copies 250 copies 750 copies
Office support 190,000 Secretarial time 2,600 secretarial 2,400 secretarial hours hours
Total operating overhead $234,000
Estimated professional hours = 10,000
Overhead Rate = $23.40
Larson's Job:
Overhead cost = $23.40 * 35 = $819.00
Overhead Rates based on ABC: Larson's Job
Transport to clients = $0.60 $93 ($0.60 * 155)
Blueprint copying = $35.00 140 ($35.00 * 4)
Office support = $38.00 532 ($38.00 * 14)
Total $765