Answer:
"1143.817" is the appropriate answer.
Explanation:
According to the question:
Risk premium is:
= [tex]4+3+4[/tex]
= [tex]11 \ percent[/tex]
K = N
⇒ Bond Price = [tex]\Sigma [\frac{Coupon}{(1 + YTM)^k} ] + \frac{Per \ value}{(1 + YTM)^N}[/tex]
[tex]k = 1[/tex]
K = 15
On putting the values, we get
⇒ Bond Price = [tex]\Sigma [\frac{13\times \frac{1000}{100} }{(1 + \frac{11}{100})^k} ] + \frac{1000}{(1 + \frac{11}{100} )^{15}}[/tex]
= [tex]1143.817[/tex]
Glumhoff's Packaging Department had the following information at July 31. All direct materials are added at the end of the conversion process. The units in ending work in process inventory were only 28% of the way through the conversion process.
Physical Units Direct Materials Conversion Costs
Units accounted for:
Completed and transferred out 120,000
Ending work in process, August 31 35,000
Total physical units accounted for: 155,000
Total equivalent units
Required:
Complete the schedule by computing the total equivalent units of direct materials and conversion costs for the month.
Answer:
Explanation:
The total equivalent units of direct materials and conversion costs for the month has been computed and attached.
Note that the conversion cost for the ending work in process was calculated as:
= $35,000 × 28%
= $35,000 × 0.28
= $9,800
Check the attachment for further analysis.
Southwest Milling Co. purchased a front-end loader to move stacks of lumber. The loader had a list price of $140,000. The seller agreed to allow a 4 percent discount because Southwest Milling paid cash. Delivery terms were FOB shipping point. Transportation cost amounted to $1,200. Southwest Milling had to hire a specialist to calibrate the loader. The specialist’s fee was $1,800. The loader operator is paid an annual salary of $60,000. The cost of the company’s theft insurance policy increased by $800 per year as a result of acquiring the loader. The loader had a four-year useful life and an expected salvage value of $6,000.
Required:
a. Determine the amount to be capitalized in an asset account for the purchase of the loader.
b. Record the purchase in general journal format.
Answer:
137,400
Explanation:
We can calculate the cost of equipment by adding all the directly attributable costs incurred in bringing the asset into a workable condition.
Requirement 1:
List Price 140,,000
Discount (140,000 x 4%) (5,600)
Freight cost 1,200
Specialist Fee 1,800
Total Cost 137,400
Requirement 2:
Dr Equipment Loader 137,400
Cr Cash 137,400
Federated Fabrications leased a tooling machine on January 1, 2021, for a three-year period ending December 31, 2023. The lease agreement specified annual payments of $48,000 beginning with the first payment at the beginning of the lease, and each December 31 through 2022. The company had the option to purchase the machine on December 30, 2023, for $57,000 when its fair value was expected to be $72,000, a sufficient difference that exercise seems reasonably certain. The machine's estimated useful life was six years with no salvage value. Federated was aware that the lessor’s implicit rate of return was 10%.
Required:
a. Calculate the amount Federated should record as a right-of-use asset and lease liability for this finance lease.
b. Prepare an amortization schedule that describes the pattern of interest expense for Federated over the lease term.
c. Prepare the appropriate entries for Federated from the beginning of the lease through the end of the lease term.
Answer:
All requirements solved
Explanation:
we can calculate the right of use asset and lease liability by determining the present value of all future cash flows and after calculating present values sum them up
Requirement 1: Right of use asset and lease liability
Present value (year 0) = 48,000 / (1+10%)^0 = 48,000
Present value (year 1) = 48,000 x 1/(1+10%)^1
Present value (year 1) = 48,000 x 0.909 = 43,636
Present value (year 2) = 48,000 x 1/(1+10%)^2
Present value (year 2) = 48,000 x 0.826 = 39,670
Present value (year 3) = 57,000 x 1/(1+10%)^3
Present value (year 3) = 57,000 x 0.751 = 42,825
Total present value = 48,000 + 43,636 + 39,670 + 42,825
Total present value = 174,131
Right of use asset and lease liability = 174,131
Requirement 2: Amortization schedule
Date payments effective interest Decrease Outstanding
10% in balance balance
1/1/21 174,131
1/1/21 48,000 48,000 126,131
12/31/21 48,000 12,613 35,387 90,744
12/31/22 48,000 9.074 38,926 51,818
12/31/23 48,000 5,182 51,818
Requirement 3: Journal entries
Amortization expense = 174,131/6
Amortization expense = 29,022
1/1/21
Dr Righ of use 74,131
Cr Lease payable 74,131
1/1/21
Dr lease payable 48,000
Cr cash 48,000
12/31/21
Dr Lease payable 35,387
Dr Interest expense 12,613
Cr Cash 48,000
12/31/21
Dr Amortization expense 29,022
Cr Right of use 29,022
12/31/22
Dr Lease payable 38,926
Dr Interest expense 9,074
Cr Cash 48,000
12/31/22
Dr Amortization expense 29,022
Cr Right of use 29,022
12/31/23
Dr Lease payable 51,818
Dr Interest expense 5,182
Cr Cash 57,000
12/31/23
Dr Amortization expense 29,022
Cr Right of use 29,022
The________ of the message is based on the number of times an average person in the target market is exposed to a message.
Frequency
Quantitative value
Reach
Exposure rate
A company is about to begin production of a new product. The manager of the department that will produce one of the components for the new product wants to know how often the machine used to produce the item will be available for other work. The machine will produce the item at a rate of 200 units a day. Eighty units will be used daily in assembling the final product. Assembly will take place five days a week, 50 weeks a year. The manager estimates that it will take a full day to get the machine ready for a production run, at a cost of $250. Inventory holding costs will be $10 a year.
Required:
a. What run quantity should be used to minimize total annual costs?
b. What is the length of a production run in days?
c. During production, at what rate will inventory build-up?
d. lf the manager wants to run another job between runs of this item, and needs a minimum of 10 days per cycle for the other work, will there be enough time?
e. Given your answer to part d, the manager wants to explore options that will allow this other job to be performed using this equipment. Name three options the manager can consider.
f. Suppose the manager decides to increase the run size of the new product. How many additional units would be needed to just accommodate the other job? How much will that increase the total annual cost?
Answer:
Kindly check explanation
Explanation:
Given that :
Production rate (p) = 200 units / day
daily usage (d) = 80 units / day
Assembly, a = 5 days a week ; 50 weeks a year
Setup cost (S) = $250
Holding cost (H )= $10
A) Run quantity to minimize total annual cost:
√(2DS/H) * √p / (p - d)
D = annual demand = (80 * 5 * 50) = 20,000
√(2(20000)(250)/10) * √200 / (200 - 80)
1000 * 1.2909944
= 1290.99
= 1291 units
B) Run length :
1291 / 200 = 6.455 days
C) Inventory build up:
Daily production - daily usage:
(200 - 80) = 120 units / day
The data required to answer the question are
production rate = 200/dayusage = 80 per dayAssembly = 5 per week and 50 weeks per yearCost of set up = 250 dollarsHolding cost = 10 dollarsA. To minimize the total annual cost[tex]\sqrt{2ds/h} *\sqrt{p/(p-d)}[/tex]
annual demand = 80 x 5 x 50 = 20,000
sqrt(2x20000)x(250)/10) * sqrt200/(200-80)
1000 x 1.2909944
= 1290.99
The total units when approximated = 1291 units
B) The length of a production in days =
1291 / 200 = 6.455 days
C) What is the Inventory build up?
200 - 80 = 120 units per day
d. If the manager wants to run a cycle that needs 10 days per cycle there is going to be enough time for him to do so.
e. Other options that he has to explore are labor, capital and time factor.
d. Increasing the run size is going to increase the total annual cost by the amount
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Your classmates from the University of Chicago are planning to go to Miami for spring break, and you are undecided about whether you should go with them. The round-trip airfare is $600, but you have a frequent-flyer coupon worth $500 that you could use to pay part of the airfare. All other costs for the vacation are exactly $900. The most you would be willing to pay for the trip is $1,400. Your only alternative use for your frequent-flyer coupon is for your trip to Atlanta two weeks after the break to attend your sister's graduation, which your parents are forcing you to attend. The Chicago-Atlanta round-trip airfare is $450. If the Chicago-Atlanta round-trip air fare were $350, should you use the coupon to go to Miami?
Answer:
You should use the discount coupon to pay for the Chicago-Miami trip. Not considering the personal motivations for the trip, the coupon is worth $500. The cost of flying is $600, so you will only pay $100 yourself. You will be spending $900 + $1000 = $1,000 in total.
The opportunity cost of using the coupon is $350 (the cost of the round trip to Atlanta). Even if you add the $350 to the $1,000 expense, the total is $1,350, less than your $1,400 maximum budget.
Help pleaseee!
The members of the Federal Reserve System must hold some of their deposits in cash in their vaults. This represents?
A - discount rates
B - reserved requirements
C - selective credit controls
D - open market operations.
Answer:
B-reserved requirements
Explanation:
An individual has $2000 in physical assets, and $600 in cash initially. This person faces the following loss distribution to the wealth. Full insurance is available at $600
Probability Loss
0.5 0
0.1 200
0.2 400
0.1 1000
0.1 2000
The Individual can also buy partial insurance with i. a $200 deductible, or ii. 75% coinsurance, or iii. Upper limit on coverage, with the limit being $1000. The premium on each partial coverage policy is $450.
Required:
Provide a ranking of the four types of policies for the individual, in terms of preference if the preference function is given by U(FW) = LN(1+FW), where FW is final wealth of the individual.
Answer with Explanation:
Probability Expected Loss Loss Forecast
0.5 0 0
0.1 200 20
0.2 400 80
0.1 1000 100
0.1 2000 200
1.00 Total 400
Now,
A. Final Wealth with no Insurance = Physical Assets of the person + Cash Assets - Total Loss Forecast
By putting values, we have:
Final Wealth with no Insurance = $2,000 + $600 - $400 = $2,200
B. For Full insurance, we will not consider expected loss because we will receive Insurance Premium instead:
Final Wealth with Full Insurance = Physical Assets + Cash Assets - Insurance Premium
By putting values, we have:
Final Wealth with Full Insurance = $2,000 + $600 - $600 = $2,000
C. Final Wealth with Partial Insurance and $200 deductibles = Physical Assets + Cash Assets - Insurance Premium For Partial Coverage - Deductible
By putting values, we have:
Final Wealth with Partial Insurance and $200 deductibles = $2,000 + $600 - $450 - $200 = $1,950
D. Final Wealth with 75% Co-insurance = Physical Assets + Cash Assets - Insurance Premium - Co-payment
By putting values, we have:
Final Wealth with 75% Co-Insurance = $2,000 + $600 - $450 - (75% * $400)
= $1,850
E. Final Wealth with Partial Insurance and $1,000 Upper Limit = Physical Assets + Cash Assets - Insurance Premium - Maximum Loss Expected
By putting values, we have:
= $2,000 + $600 - $450 - (Probability 0.1 * $2,000) = $1950
From the above, we can say that the best option here in descending order is as under:
1. A. Final Wealth with no Insurance
2. B. With Full insurance
3. C. Final Wealth with Partial Insurance and $200 deductibles & E. Final Wealth with Partial Insurance and $1,000 Upper Limit
4. E. Final Wealth with Partial Insurance and $1,000 Upper Limit
A retrofitted space-heating system is being considered for a small office building. The system can be purchased and installed for $125,000, and it will save an estimated 250,000 kilowatt-hours (kWh) of electric power each year over a five-year period. A kilowatt-hour of electricity costs $0.09, and the company uses a MARR of 15% per year in its economic evaluations of refurbished systems. The market value of the system will be $7,000 at the end of five years, and additional annual operating and maintenance expenses are negligible.
Required:
Use the benefit-cost method to make a recommendation.
Answer:
Retrofitted Space-Heating System
Benefit-Cost Ratio = $75,420/$121,521
= 0.6206
= 0.62
Benefit is less than 1. Therefore, project will not deliver positive NPV.
Recommendation:
It is better and cheaper to incur electricity costs than to purchase the retrofitted space-heating system. The retrofitting benefit does not justify the cost of the project.
Explanation:
a) Data and Calculations:
Purchase cost of system = $125,000
Salvage value (PV of $7,000 in five years) = $3,479
Total cost of project = $121,521 ($125,000 - 3,479)
Benefit of Project = Savings in 250,000 kWh annually
Cost of a kilowatt-hour = $0.09
Total annual cost of electricity = $22,500 (250,000 * $0.09)
Annuity Factor for 5 years = 3.352
Present value of annuity of $22,500 = $75,420 ($22,500 * 3.352)
Benefit-Cost = $75,420/$121,521
= 0.6206
= 0.62
On January 20, 2017, Tamira Nelson, the accountant for Picton Enterprises, is feeling pressure to complete the annual financial statements. The company president has said he needs up-to-date financial statements to share with the bank on January 21 at a dinner meeting that has been called to discuss Picton's obtaining loan financing for a special building project. Tamira knows that she will not be able to gather all the needed information in the next 24 hours to prepare the entire set of adjusting entries. Those entries must be posted before the financial statements accurately portray the company's performance and financial position for the fiscal period ended December 31, 2016. Tamira ultimately decides to estimate several expense accruals at the last minute. When deciding on estimates for the expenses, she uses low estimates because she does not want to make the financial statements look worse than they are. Tamira finishes the financial statements before the deadline and gives them to the president without mentioning that several account balances are estimates that she provided.
Required:
1. Identify several courses of action that Tamira could have taken instead of the one she took.
2. If you were in Tamira's situation, what would you have done?
Answer:
the question says she used low estimates to make the statement look good.
Explanation:
here are the answers:
1. Identify several courses of action that Tamira could have taken instead of the one she took
Tamira was wrong for providing low estimates. She should have been truthful in her estimation. If some items were not estimated she should have made it known that those items were still under review. Using low estimates on purpose is not ethical and unacceptable by GAAP standards.
She would have been straight with the president and let him know the time frame was not enough for the finalization of the statements. She would have instead given a time frame when the internal draft would be ready.
2. If you were in Tamira's situation, what would you have done?
If I were tamira, I will not raise or reduce figures on purpose just to make the statements look presentable. I will be truthful on figures and estimates I used and why I did. If the president would pressurize me to do the wrong thing, I will have no option than to leave the organization to avoid going against ethical standards since such actions have legal implications.
The following information pertains to Windsor Solar Panels, Inc.
July 1 Sold $128,000 of solar panels to Wildhorse Company with terms 3/15, n/30. Windsor uses the gross method to record cash discounts. Windsor estimates allowances of $1,500 will be honored on this sale.
12 Sold $82,000 of solar panels to Novak Corp. with terms of 4/10, n/60. Windsor expects no allowances related to this sale.
18 Novak Corp. paid Windsor for its July 12 purchase.
20 Wildhorse calls to indicate that the panels purchased on July 1 work well, but the color is not quite right. Windsor grants a credit of $2,100 as compensation.
29 Wildhorse Company paid Windsor for its July 1 purchase.
31 Windsor expects allowances of $5,340 to be grated in the future related to solar panel sales in July.
Prepare the necessary journal entries for Larkspur. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. Record journal entries in the order presented in the problem. If no entry is required, select "No Entry" for the account titles and enter o for the amounts.)
Date Account Titles and Explanation Credit Debit
July 18
Answer:
Entries and their narrations are posted below
Explanation:
We will record assets and expenses on the debit as they increase during the year and will record liabilities and capital on the credit side as they increase during the year or vice versa.
July 1 Sold $128,000 of solar panels
Dr Receivables 128,000
Cr Sales 128,000
12 Sold $82,000 of solar panels
Dr Receivables 82,000
Cr Sales 82,000
18 Novak Corp. paid Windsor for its July 12 purchase.
Dr Cash 78,720
Dr Discount allowed 3280
Cr Receivables 82,000
Windsor grants a credit of $2,100 as compensation.
Dr compensation expense 2,100
Cr cash 2,100
29 Wildhorse Company paid Windsor for its July 1 purchase.
Dr Cash 128,000
Cr Receivables 128,000
31 Windsor expects allowances of $5,340 to be grated in the future
Dr Bad debt expense 5,340
Cr Allowance for bad debt 5,340
The following is a partial trial balance for General Lighting Corporation as of December 31, 2021:
Account Title Debits Credits
Sales revenue 3,100,000
Interest revenue 95,000
Loss on sale of investments 30,000
Cost of goods sold 1,340,000
Loss on inventory write-down (obsolescence) 350,000
Selling expense 450,000
General and administrative expense 225,000
Interest expense 94,000
There were 300,000 shares of common stock outstanding throughout 2021. Income tax expense has not yet been recorded. The income tax rate is 25%.
Required:
1. Prepare a single-step income statement for 2021, including EPS disclosures.
2. Prepare a multiple-step income statement for 2021, including EPS disclosures.
Answer:
1. single-step income statement for 2021
Sales revenue 3,100,000
Less Cost of goods sold (1,340,000)
Gross Profit 1,760,000
Less Expenses :
Loss on inventory write-down (obsolescence) 350,000
Selling expense 450,000
General and administrative expense 225,000
Interest revenue (95,000)
Loss on sale of investments 30,000
Interest expense 94,000 (1,054,000)
Net Income before tax 706,000
Income tax expense (176,500)
Net Income after tax 529,500
Earnings per share (EPS) $1.77
2. multiple-step income statement for 2021
Sales revenue 3,100,000
Less Cost of goods sold (1,340,000)
Gross Profit 1,760,000
Less Operating Expenses :
Loss on inventory write-down (obsolescence) 350,000
Selling expense 450,000
General and administrative expense 225,000 (1,025,000)
Operating Income 735,000
Less Non-Operating Expenses :
Interest revenue (95,000)
Loss on sale of investments 30,000
Interest expense 94,000 (29,000)
Net Income before tax 706,000
Income tax expense (176,500)
Net Income after tax 529,500
Earnings per share (EPS) $1.77
Explanation:
The difference in these Income statements is that, the Multi-step statement clearly shows income derived from Primary Activities (Operating) whist the Single step statement does not.
Additional Notes :
Earnings per share (EPS) = Earnings Attributable to holders of common stock ÷ Weighted Average Number of Common Stocks
Therefore,
Earnings per share (EPS) = $529,500 ÷ 300,000
= $1.77
The following information about the payroll for the week ended December 30 was obtained from the records of Pharrell Co.:
Salaries:
Sales salaries: $402,000
Warehouse salaries 210,000
Office salaries 165,000
$777,000
Deductions:
Income tax withheld $135,975
Social security tax withheld 46,620
Medicare tax withheld 11,655
Retirement savings 17,094
Group insurance 13,986
$225,330
Tax rates assumed:
Social security 6%
Medicare 1.5%
State unemployment (employer only) 5.4%
Federal unemployment (employer only) 0.6%
Required:
Assuming that the payroll for the last week of the year is to be paid on December 31, journalize the following entries (refer to the Chart of Accounts for exact wording of account titles):
a. December 30, to record the payroll.
b. December 30, to record the employer's payroll taxes on the payroll to be paid on December 31. Of the total payroll for the last week of the year, $40,000 is subject to unemployment compensation taxes.
Full question attached
Answer and Explanation:
Please find attached
The revenue recognition principle states that: Multiple Choice Revenue should be recognized in the period goods and services are provided. Revenue should be recognized in the period the cash is received. Revenue should be recognized in the balance sheet. Revenue is a component of common stock.
Answer:
Revenue should be recognized in the period goods and services are provided.
Explanation:
IFRS 15 requires revenue to be recognized when control of goods or services has been made to the customer. Control is when all the risks and benefits associated with the product or service has been transferred to the customer.
Wilson Products uses standard costing. It allocates manufacturing overhead (both variable and fixed) to products on the basis of standard direct manufacturing labor-hours (DLH). Wilson Products develops its manufacturing overhead rate from the current annual budget. The manufacturing overhead budget for 2014 is based on budgeted output of 672,000 units, requiring 3,360,000 DLH. The company is able to schedule production uniformly throughout the year.
A total of 72,000 output units requiring 321,000 DLH was produced during May 2014. Manufacturing overhead (MOH) costs incurred for May amounted to $ 355,800. The actual costs, compared with the annual budget and 1/12 of the annual budget, are as follows:
Calculate the following amounts for Wilson Products for May 2014:
Total Amount Per Output Unit Per DLH Input Unit Monthly MOH Budget May 2017 Actual MOH Costs for May 2017
Variable MOH
Indirect manufacturing labor $1,008,000 $1.50 $0.30 $84,000 $84,000
Supplies 672,000 1.00 0.2 56,000 117,000
Fixed MOH
Supervision 571,200 0.85 0.17 47,600 41,000
Utilities 369,600 0.55 0.11 30,800 55,000
Depreciation 705,600 1.05 0.21 58,800 88,800
Total $33,26,400 $4.95 $0.99 $277,200 $355,800
Required:
a. Total manufacturing overhead costs allocated.
b. Variable manufacturing overhead spending variance.
c. Fixed manufacturing overhead spending variance.
d. Variable manufacturing overhead efficiency variance.
e. Production-volume variance Be sure to identify each variance as favorable (F) or unfavorable(U).
Answer:
Please see attached solution
Explanation:
a. Total manufacturing overhead costs allocated $356,400
b. Variable manufacturing overhead spending variance $40,500U
c. Fixed manufacturing overhead spending variance $17,600U
d. Variable manufacturing overhead efficiency variance $19,500F
e. Production volume variance $39,200F
Please find attached detailed solution to the above questions
Thirteen students entered the business program at Sante Fe College 2 years ago. The following table indicates what each student scored on the high school SAT math exam and their grade-point averages (GPAs) after students were in the Sante Fe program for 2 years.
Student A B C D E F G
SAT Score 421 375 585 693 608 392 418
GPA 2.93 2.87 3.03 3.42 3.66 2.91 2.12
Student H I J K L M
SAT Score 484 725 506 613 706 366
GPA 2.50 3.24 1.97 2.73 3.88 1.58
The least-squares regression equation that shows the best relationship between GPA and the SAT score is:________ (round your responses to four decimal places)
Answer:
ŷ = 0.0035X + 1.0030
Explanation:
Given the data :
Student A B C D E F G H I J K L M
SAT Score: 421 375 585 693 608 392 418 484 725 506 613 706 366
GPA: 2.93 2.87 3.03 3.42 3.66 2.91 2.12 2.50 3.24 1.97 2.73 3.88 1.58
We can obtain the Least square regression calculator, we can obtain the least square regression equation in the Format :
y = mx + c
Where ; m = gradient / slope
x = predictor variable ; c = intercept
y = Independent variable.
The model equation produced by the calculator is :
ŷ = 0.0035X + 1.0030
y predicted variable ; x = explanatory variable
0.0035 = slope or gradient ; 1.0030 = intercept
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Lina Martinez wants to buy a new high-end audio system for her car. The system is being sold by two dealers in town, both of whom sell the equipment for the same price of $2,000. Lina can buy the equipment from Dealer A, with no money down, by making payments of $118.28 a month for 18 months; she can buy the same equipment from Dealer B by making 36 monthly payments of $70.31 (again, with no money down). Lina is considering purchasing the system from Dealer B because of the lower payment.
Find the APR for Dealer A.
Use the financial calculator and Find the APR for Dealer B
Answer:
dealer A:
total interest charged = ($118.28 x 18 months) - $2,000 = $129.04
APR = [($129.04 / $2,000) / 1.5 periods] x 100% = 4.3%
dealer B:
total interest charged = ($70.31 x 36 months) - $2,000 = $531.16
APR = [($531.16 / $2,000) / 3 periods] x 100% = 8.85%
The APR charged by dealer A is much lower than the APR charged by dealer B. Even thought the monthly payments are much lower for dealer B, the total amount of interest charged is much higher.
Norton Associates is an advertising agency in Austin, Texas. The company's controller estimated that it would incur $264,000 in overhead costs for the current year. Because the overhead costs of each project change in direct proportion to the amount of direct professional hours incurred, the controller decided that overhead should be applied on the basis of professional hours. The controller estimated 22,000 professional hours for the year. During October, Norton incurred the following costs to make a 20-second TV commercial for Central Texas Bank:Direct materials $ 32,000Direct professional hours ($65/hour) 1,200The industry customarily bills customers at 150% of total cost.1. Compute the predetermined overhead rate.2. What is the total amount of the bill that Norton will send Central Texas Bank?
Answer:
$186,600
Explanation:
The computation of the predetermined overhead rate is shown below:
= Estimated manufacturing overhead / expected tptal labor hours
= $264,000 / 22,000 hours
= $12
Now for determining the total amount of bill first determine the total cost which is shown below:
Total cost is
= Direct material + direct cost + overhead cost
= $32,000 + 1,200 * $65 + 1,200 * $12
= $32,000 + $78,000 + $14,400
= $124,400
Now the total amount of the bill is
= 150% of $124,400
= $186,600
Refer to the accompanying figures. If Mallory and Rick are the only two consumers in this market and the price of soda is $0.75 per can, then what will be the market demand for soda each month?
Answer:
the market demand is 50
Explanation:
The computation of the market demand for soda is shown below:
As we know that the market demand is the sum of the individual demand total
So in the given case, the market demand would be
= Mallory demand at $0.75 per can + Rick demand at $0.75 per can
= 30 + 20
= 50
Hence, the market demand is 50
Lina Martinez wants to buy a new high-end audio system for her car. The system is being sold by two dealers in town, both of whom sell the equipment for the same price of $2,000. Lina can buy the equipment from Dealer A, with no money down, by making payments of $118.28 a month for 18 months; she can buy the same equipment from Dealer B by making 36 monthly payments of $70.31 (again, with no money down). Lina is considering purchasing the system from Dealer B because of the lower payment.
Find the APR for Dealer A.
Use the financial calculator and Find the APR for Dealer B
Answer:
dealer A:
total interest charged = ($118.28 x 18 months) - $2,000 = $129.04
APR = [($129.04 / $2,000) / 1.5 periods] x 100% = 4.3%
dealer B:
total interest charged = ($70.31 x 36 months) - $2,000 = $531.16
APR = [($531.16 / $2,000) / 3 periods] x 100% = 8.85%
The APR charged by dealer A is much lower than the APR charged by dealer B. Even thought the monthly payments are much lower for dealer B, the total amount of interest charged is much higher.
University Printers has two service departments Maintenance and Personnel and two operating departments Printing and Developing. Management has decided to allocate maintenance costs on the basis of machine-hours in each department and personnel costs on the basis of labor-hours worked by the employees in each.
The following data appear in the company records for the current period:
Maintenance Personnel Printing Developing
Machine-hours ? 455 455 2,590
Labor-hours 315 ? 294 1,491
Department direct cost 11,000 $23,000 $25,000 $23,000
Required: Allocate the service department costs using the reciprocal method. Negative amounts should be indicated by a minus sign. Do not round intermediate calculations.
Answer:
Machine hour percentages -Allocation of Maintenance Costs
455 + 455 + 2,590 = 3,500 total machine hrs
Personnel = 455 / 3,500 = 13%
Printing = 455 / 3,500 = 13%
Developing = 2,590 / 3,500 = 74%
Labor hr. percentages--Allocation of Personnel costs
315 + 294 + 1,491 = 2,100 total labor hrs.
Maintenance = 315 / 2,100 = 15%
Printing = 294 / 2,100 = 14%
Developing = 1,491 / 2,100 = 71%
Service
Maintenance Personnel Printing Developing
Costs before allocation 11,000 23,000 25,000 23,000
Allocate maintenance costs -11,000 1,430 1,430 8,140
0 24,430
Allocate personnel costs 3664.5 -24430 3420.2 17345.3
Allocate maintenance costs -3664.5 476.39 476.39 2711.73
Allocate personnel costs 71.46 -476.39 66.69 338.24
Allocate maintenance costs -71.46 9.29 9.29 52.88
Allocate personnel costs 1.39 -9.29 1.3006 6.5959
Allocate maintenance costs -1.39 0 0 1.39
Total costs 0.00 0.00 30403.87 51596.13
Workings
Allocate maintenance costs
Personnel = (11000 * 13%) = 1430
Printing = (11000 * 13%) = 1430
Developing = (11000 * 74%) = 8140
Allocate personnel costs
Maintenance = 24430 * 15% =
Printing = (24430 * 14%) =
Developing = (24430 * 71%) =
Allocate maintenance costs
Personnel = (3664.5 * 13%)
Printing = (3664.5 * 13%)
Developing = (3664.5 * 74%)
Allocate personnel costs
Maintenance = (476.39 * 15%)
Printing = (476.39 * 14%)
Developing = (476.39 * 71%)
Allocate maintenance costs
Personnel = (71.46 * 13%)
Printing = (71.46 * 13%)
Developing = (71.46 * 74%)
Allocate personnel costs
Maintenance= (9.29 * 15%)
Printing = (9.29 * 14%)
Developing = (9.29 * 71%)
Cullumber Company has the following balances in selected accounts on December 31, 2020.
Accounts Receivable $0
Accumulated Depreciation—Equipment 0
Equipment 8,000
Interest Payable 0
Notes Payable 10,000
Prepaid Insurance 3,960
Salaries and Wages Payable 0
Supplies 2,200
Unearned Service Revenue 28,000
All the accounts have normal balances. The information below has been gathered at December 31, 2020.
1. Cullumber Company borrowed $11,400 by signing a 9%, one-year note on September 1, 2020.
2. A count of supplies on December 31, 2020, indicates that supplies of $820 are on hand.
3. Depreciation on the equipment for 2020 is $1,200.
4. Cullumber Company paid $3,960 for 12 months of insurance coverage on June 1, 2020.
5. On December 1, 2020, Cullumber collected $28,000 for consulting services to be performed from December 1, 2020, through March 31, 2021. The company had performed 1/4 of the services by December 31.
6. Cullumber performed consulting services for a client in December 2020. The client will be billed $4,200.
7. Cullumber Company pays its employees total salaries of $5,400 every Monday for the preceding 5-day week (Monday through Friday). On Monday, December 29, employees were paid for the week ending December 26. All employees worked the last 3 days of 2020.
Required:
Prepare adjusting entries for the seven items described above.
Answer and Explanation:
The adjusting entries are shown below:
1. Interest expense [$11,400 × 9% × 4 ÷ 12] $342
To Interest payable $342
(being accrued interest expense is recorded)
2. Supplies expense [$2,200 - $820] $1,380
To Supplies $1,380
[Being supplies expense is recorded]
3. Depreciation expense $1,200
To Accumulated depreciation-Equipment $1,200
[Being depreciation expense is recorded]
4 Insurance expense [$3,960 × 7 ÷ 12] $2,310
To Prepaid insurance $2,310
[being insurance expense is recorded]
5 Unearned service revenue $7,000
To Service revenue $7,000
[Being revenue from unearned is recorded]
6 Accounts receivable $4,200
To Service revenue $4,200
[Being accrued service revenue is recorded]
7 Salaries expense [$5,400 × 3 ÷ 5] $3,240
To Salaries payable $3,240
[being accrued salaries expense is recorded]
On July 1, 2020, Buffalo Inc. made two sales.
1. It sold land having a fair value of $904,290 in exchange for a 4-year zero-interest-bearing promissory note in the face amount of $1,422,914. The land is carried on Buffalo's books at a cost of $591,300.
2. It rendered services in exchange for a 3%, 8-year promissory note having a face value of $408,830 (interest payable annually).
Buffalo Inc. recently had to pay 8% interest for money that it borrowed from British National Bank. The customers in these two transactions have credit ratings that require them to borrow money at 12% interest.
Required:
Record the two journal entries that should be recorded by Vaughn Inc. for the sales transactions above that took place on July 1, 2020.
Answer:
Journal 1
July 1
Note Receivable $1,422,914 (debit)
Profit and Loss $851,614 (credit)
Land $591,300 (credit)
Sale of land on credit
Journal 2
July 1
Note Receivable $861,394 (debit)
Service Revenue $861,394 (credit)
Rendered Services on credit
Explanation:
Journal 1
Sale of land on credit :
De-recognise the Land in Buffalo Inc. books at cost, Recognise the Assets of Note Receivable and a Profit from sale. Proceeds are measured at the future value
Future Value :
PV = $1,422,914
n = 4
pmt = $0
p/yr = 1
fv = ?
Using a financial calculator the future value is $1,422,914.
Journal 2
Rendered Services on credit :
Recognize the Assets of Note Receivable and Recognise the Revenue at the future value.
Future Value :
pv = - $408,830
n = 8
pmt = 3% × $408,830 = $12,264.90
i = 12%
p/yr = 1
fv = ?
Using a financial calculator, the future value is $861,394
Tom purchased a bond today with a 20-year maturity and a yield to maturity (YTM) of 6%. The coupon rate is 8% and coupons are paid annually. The par value is $1,000. Tom is going to hold this bond for 3 years and sell the bond at the end of year 3. The bond's yield to maturity will change to 8% at the time when Tom sells the bond. Assume coupons can be reinvested in short term securities over the next three years at an annual rate of 10%. Which of the following regarding Tom’s annual holding period return (HPR) of this bond investment is correct?
I. Tom’s annual HPR will be higher than 6% due to a capital gain from selling the bond at year 3
II. Tom’s annual HPR will be lower than 6% due to a capital loss from selling the bond at year 3
III. Tom’s annual HPR will be higher than 6% due to the higher reinvestment rate of 10%
IV. Tom’s annual HPR will be lower than 6% because gains from the 10% reinvestment rate will be largely offset by the capital loss from selling the bond at year 3
a. I only
b. II only
c. III only
d. I and III only
e. II and IV only
Answer:
The answer happens to be:
e. II and IV only
II. Tom’s annual HPR will be lower than 6% due to a capital loss from selling the bond at year 3
IV. Tom’s annual HPR will be lower than 6% because gains from the 10% reinvestment rate will be largely offset by the capital loss from selling the bond at year 3
Explanation:
"Ayres Services acquired an asset for $80 million in 2021." The asset is depreciated for financial reporting purposes over four years on a straight-line basis (no residual value). Ayers deducted 100% of the asset's cost for income tax reporting in 2021. The enacted tax rate is 25%. Amounts for pretax accounting income, depreciation, and taxable income in 2021, 2022, 2023, and 2024 are as follows: ($ in millions)
2021 2022 2023 2024
Pretax accounting income $330 $350 $365 $400
Depreciation on the income statement 20 20 20 20
Depreciation on the tax return (80 ) (0 ) (0 ) (0 )
Taxable income $270 $370 $385 $420
For December 31 of each year, determine:
a. The cumulative temporary book-tax difference for the depreciable asset.
b. The balance to be reported in the deferred tax liability account.
Answer:
a. The cumulative temporary book-tax difference for the depreciable asset are as follows:
December 31, 2021 = $60 million
December 31, 2022 = $40 million
December 31, 2023 = $20 million
December 31, 2024 = $0
b. The balance to be reported in the deferred tax liability account are as follows.
December 31, 2021 = $15 million
December 31, 2022 = $10 million
December 31, 2023 = $5 million
December 31, 2024 = $0
Explanation:
Note: See the attached excel file for the calculation of cumulative temporary book-tax difference for the depreciable asset and the balance to be reported in the deferred tax liability account for December 31 of years 2021, 2022, 2023 and 2024 in bold red color.
In the attached excel file, the following formula are used:
Cumulative Temporary differences at December 31 of the current year = Cumulative Temporary differences at December 31 of the previous year + (Depreciation on the tax return at December 31 of the current year - Depreciation on the income statement at December 31 of the current year)
Balance to be reported in deferred tax liability account at December 31 of the current year = Cumulative Temporary differences at December 31 of the current year * Tax rate
Seneff Corporation uses the following activity rates from its activity-based costing system to assign overhead costs to products.
Activity Cost Pools Activity Rate
Setting up batches $38.50 per batch
Processing Customer orders $86.62 per customer order
Assembling products $7.33 per assembly hour
Data concerning the two products appear below:
Product V91 Product V21
Number of batches 83 27
Number of customer orders 74 7
Number of assembly hours 702 321
Required:
How much overhead cost was assigned to product V91 using the activity-based costing system?
Answer:
Total allocated overhead= $14,751.04
Explanation:
Giving the following information:
Activity Cost Pools Activity Rate
Setting up batches $38.50 per batch
Processing Customer orders $86.62 per customer order
Assembling products $7.33 per assembly hour
Data concerning the two products appear below:
Product V91
Number of batches 83
Number of customer orders 74
Number of assembly hours 702
To allocate overhead, we need to use the following formula:
Allocated MOH= Estimated manufacturing overhead rate* Actual amount of allocation base
Setting up= 38.5*83= 3,195.5
Processing= 86.62*74= 6,409.88
Assembling products= 7.33*702= 5,145.66
Total allocated overhead= $14,751.04
Label the following hypothetical demand scenarios. Use the midpoint method.
Contain Yourself!, a plastic container company, raises the price of its signature "lunchbox" container from $3.00 to $4.00. As a result, the quantity sold drops from 20,000 to 15,000. ..........
Economists working for the United States have determined that the elasticity of demand for gasoline is 0.5. ..................
CapCityMetro decides to increase bus fare rates from $2.00 to $2.21. Consequently, the number of passengers who decide to take the bus in Austin drops from an average of 70,000 riders a day to an average of 61,000 riders a day. ...............
Inelastic unit-elastic Elastic perfectly elastic
Answer:
Contain Yourself!, a plastic container company, raises the price of its signature "lunchbox" container from $3.00 to $4.00. As a result, the quantity sold drops from 20,000 to 15,000.
UNIT ELASTIC ⇒ when the price elasticity of demand is unit elastic, a change in price will result in a proportionally equal change in the quantity demanded.
PED = % change in quantity / % change in price = {(15 - 20) / [(15 + 20)/2]} / {($4 - $3) / [($4 + $3)/2]} = -0.2857 / 0.2857 = -1 or |1| in absolute terms
Economists working for the United States have determined that the elasticity of demand for gasoline is 0.5.
INELASTIC DEMAND ⇒ when the price elasticity of demand is inelastic, a change in price will result in a proportionally lower change in the quantity demanded.
CapCityMetro decides to increase bus fare rates from $2.00 to $2.21. Consequently, the number of passengers who decide to take the bus in Austin drops from an average of 70,000 riders a day to an average of 61,000 riders a day.
ELASTIC DEMAND ⇒ when the demand for a good is elastic, a change in price will result in a proportionally higher change in quantity demanded.
PED = % change in quantity / % change in price = {(61,000 - 70,000) / [(61,000 + 70,000)/2]} / {($2.21 - $2) / [($2.21 + $2)/2]} = -0.1374 / 0.1 = -1.374 or |1.374| in absolute terms
A company issues $50 million of bonds at par on January 1, 2018. The bonds pay 10% interest semi-annually on 12/31 and 6/30 and mature in 20 years. The journal entry when the bonds are sold is:
Answer: Please see explanation for answer
Explanation:
Journal entry to record sale of bonds
Account titles Debit Credit
Cash $50,000,000
Bonds Payable $50,000,000
Piedmont Company segments its business into two regions—North and South. The company prepared the contribution format segmented income statement as shown:
Total Company North South
Sales $825,000 $550,000 $275,000
Variable expenses 495,000 385,000 110,000
Contribution margin 330,000 165,000 165,000
Traceable fixed expenses 156,000 78,000 78,000
Segment margin 174,000 $87,000 $87,000
Common fixed expenses 69,000
Net operating income $105,000
Required:
a. Compute the companywide break-even point in dollar sales.
b. Compute the break-even point in dollar sales for the North region.
c. Compute the break-even point in dollar sales for the South region.
Answer:
A. 562,500
B. 260,000
C. 130,000
Explanation:
First step is to find the Contribution margin ratio using this formula
Contribution margin ratio=Contribution margin÷Sales
Contribution margin 330,000 165,000 165,000
÷Divide by Sales 825,000 550,000 275,000
=Contribution margin ratio 40.00% 30.00% 60.00%
Second step is to find the Break even
Break even = Fixed expenses/Contribution margin ratio
1. Computation for the break-even point in dollar sales.
Dollar sales for company to break-even=
(156,000+69,000)/40%
Dollar sales for company to break=225,000/40%
Dollar sales for company to break=562,500
2. Computation for the break-even point in dollar sales for the North region
Dollar sales for North segment to break-even= Dollar sales for North segment to break-even=78,000/30%
Dollar sales for North segment to break-even=260,000
3. Computation for the break-even point in dollar sales for the South region
Dollar sales for South segment to break-even Dollar sales for South segment to break-even=78,000/60%
Dollar sales for South segment to break-even=130,000
I WILL GIVE BRAINLIEST
Lean and Six Sigma models contradict one another,
True
False