Answer:
The definition is defined in the clarification portion beneath, as per the particular circumstance.
Explanation:
Correct you're. FOB shipping comments mean that perhaps the shipping can be paid for by consumers. But perhaps the freight is paid by the seller in the question. It would reimburse the freight treated as income from the buyer. The credit including its buyer would be debited with either the deferred revenue sum of freight.Account Titles and Explanation Debit Credit
Receivable accounts -Blue Star Co. $1,800 -
Cash - $1,800
(To record freight paid)
Major improvements in computer information technology in the 1990s fueled an increase in investment demand in the United States (a large open economy). Graphically illustrate the effect of an increase of U.S. investment using the Large Open Economy Model. Clearly label the axes and curves in each of your graphs in the model. Clearly indicate the direction of any shifts in the curves.
Answer and Explanation:
Please find attached
Learning design software, applying to college and creating a website to showcase work are examples of ______ that lead to a career as a graphic artist?
Answer:
Long term goals
Explanation:
goals are later on
Answer:
Long term goals
Explanation:
hopes this helps<3
Consider each of the transactions below. All of the expenditures were made in cash.
a. The Edison Company spent $16,000 during the year for experimental purposes in connection with the development of a new product.
b. In April, the Marshall Company lost a patent infringement suit and paid the plaintiff $9,500.
c. In March, the Cleanway Laundromat bought equipment. Cleanway paid $10,000 down and signed a noninterest-bearing note requiring the payment of $20,000 in nine months. The cash price for this equipment was $27,000.
d. On June 1, the Jamsen Corporation installed a sprinkler system throughout the building at a cost of $32,000.
e. The Mayer Company, plaintiff, paid $16,000 in legal fees in November, in connection with a successful infringement suit on its patent.
f. The Johnson Company traded its old equipment for new equipment. The new equipment has a fair value of $11,200. The old equipment had an original cost of $9,400 and a book value of $4,200 at the time of the trade. Johnson also paid cash of $8,800 as part of the trade. The exchange has commercial substance.
Required:
Prepare journal entries to record each of the above transactions.
Answer: See attachment
Explanation:
The journals entry shows the transactions that Edison Company has undertaken. The transactions are shows both the debit and credit balances.
The attachments for the question have been attached for further analysis.
Tiger Equipment Inc., a manufacturer of construction equipment, prepared the following factory overhead cost budget for the Welding Department for May of the current year. The company expected to operate the department at 100% of normal capacity of 8,700 hours.
1 Variable costs:
2 Indirect factory wages $40,020.00
3 Power and light 20,880.00
4 Indirect materials 17,400.00
5 Total variable cost $78,300.00
6 Fixed costs:
7 Supervisory salaries $19,800.00
8 Depreciation of plant and equipment 35,700.00
9 Insurance and property taxes 18,450.00
10 Total fixed cost 73,950.00
11 Total factory overhead cost $152,250.00
During May, the department operated at 9,080 hours, and the factory overhead costs incurred were indirect factory wages, $42,268; power and light, $22,064; indirect materials, $18,700; supervisory salaries, $19,800; depreciation of plant and equipment, $35,700; and insurance and property taxes, $18,450.
Required:
Prepare a factory overhead cost variance report for May. To be useful for cost control, the budgeted amounts should be based on 9,080 hours.
Answer:
Tiger Equipment Inc.
Factory Overhead Cost Variance Report
1 Variable costs: Actual Flexible Variance
2 Indirect factory wages $42,268.00 $41,768 500.00 U
3 Power and light 22,064.00 21,792 272.00 U
4 Indirect materials 18,700.00 18,160 540.00 U
5 Total variable cost $83,032.00 $81,720 1,312.00 U
6 Fixed costs:
7 Supervisory salaries $19,800.00 $19,800 $0 None
8 Depreciation of plant and equipment 35,700.00 35,700 $0 None
9 Insurance and property taxes 18,450.00 18,450 $0 None
10 Total fixed cost 73,950.00 73,950 $0 None
11 Total factory overhead cost $156,982.00 $155,670 $1,312 U
Explanation:
Welding Department's
Factory Overhead Cost Budget
For the month of May:
1 Variable costs:
2 Indirect factory wages $40,020.00
3 Power and light 20,880.00
4 Indirect materials 17,400.00
5 Total variable cost $78,300.00
6 Fixed costs:
7 Supervisory salaries $19,800.00
8 Depreciation of plant and equipment 35,700.00
9 Insurance and property taxes 18,450.00
10 Total fixed cost 73,950.00
11 Total factory overhead cost $152,250.00
b) Flexing the variable cost:
1 Variable costs: Flexible
2 Indirect factory wages $40,020/8,700 * 9,080 = $41,768
3 Power and light 20,880 /8,700 * 9,080 = $21,792
4 Indirect materials 17,400/8,700 * 9,080 = $18,160
5 Total variable cost $78,300/8,700 * 9,080 = $81,720
All of the following are threats to a sustainable, long-term competitive advantage EXCEPT ________. Group of answer choices
Answer:
The answer is "market stability".
Explanation:
Instability, emerging innovations as well as an evolving industry also will function and eradicate the advantages so, the corporation does and put its competitiveness as the advantage at risk.
"Market stability" is the only choice, which is not a hazard to a fixed edge. So, well as circumstances wouldn't change, its edge will appear to become the right response.
Del Gato Clinic's cash account shows a $11,589 debit balance and its bank statement shows $10,555 on deposit at the close of business on June 30. Outstanding checks as of June 30 total $1,829. The June 30 bank statement lists a $16 bank service charge. Check No. 919, listed with the canceled checks, was correctly drawn for $467 in payment of a utility bill on June 15. Del Gato Clinic mistakenly recorded it with a debit to Utilities Expense and a credit to Cash in the amount of $476. The June 30 cash receipts of $2,856 were placed in the bank's night depository after banking hours and were not recorded on the June 30 bank statement.
Prepare its bank reconciliation using the above information.
DEL GATO CLINIC
Bank Reconciliation
June 30
Book balance
Add: Bank statement balance
Add:
Deduct: Deduct:
Adjusted bank balance Adjusted book balance
Answer:
Bank Reconciliation
Bank Statement Balance 10,555
Add: June 30 Deposit 2,856
13,411
Less: Outstanding Checks (1,829)
Adjusted bank balance $11,582
Bank Reconciliation
Book Balance 11,589
Add: Error in Check 919 (479 - 467) 9
11,598
Less: Bank service charge ( 16)
Adjusted book balance 11,582
Dom has $90,000 that he wishes to invest now in order to use the accumulation for purchasing a retirement annuity in five years. After consulting with his financial advisor, he has been offered four types of fixed-income investments, labeled as investments A, B, C, and D.
Investments A and B are available at the beginning of each of the next five years (call them years 1–5). Each dollar invested in A at the beginning of a year returns $1.20 (a profit of $0.20) two years later, in time for immediate reinvestment. Each dollar invested in B at the beginning of a year returns $1.36 three years later.
Investments C and D will each be available just once in the future. Each dollar invested in C at the beginning of year 2 returns $1.66 at the end of year 5. Each dollar invested in D at the beginning of year 5 returns $1.12 at the end of year 5.
Your uncle is obligated to make a balloon payment on an existing loan in the amount of $24,000 at the end of year 3. He wants to make that payment out of the investment account.
1) Devise an investment plan for your uncle that maximizes the value of the investment account at the end of five years. How much money will be available for the annuity in five years?
2) Show the network diagram corresponding to the solution in (1). That is, label each of the arcs in the solution and verify that the flows are consistent with the given information.
Answer:
First of all, you must invest enough money in B in order to pay your debt.
present value = future value / expected return
present value = $24,000 / $1.36 = $17,647.06
you have $90,000 - $17,647.06 = $72,352.94 to invest in A.
at the end of year 2, you will have:
future value = present value x expected return = $72,352.94 x $1.20 = $86,823.53
then you should invest that money ($86,823.53) in invested D and at the end of year 4 you will have:
future value = $86,823.53 x $1.66 = $144,127.06
finally, you should invest $144,127.06 in investment E and at the end of ear 5 you will have:
future value = $144,127.06 x $1.12 = $161,422.31
2) it is really hard to draw a diagram without drawing tools, but i will try
⇒ invest $17,647.06 in B ⇒ year 3, collect $24,000
from B and pay off debt
today
$90,000
⇒ invest $72,352.94 ⇒ year 2, invest ⇒ year 4, invest
in A $86,823.53 in D $144,127.06 in E
continues ... ⇒ year 5, collect $161,422.31 from E
If a specific economy has extra capital resources available,
be able to produce top-quality goods and services.
continually look to expand and invest.
be able to produce more goods and services needed and wanted by society.
have additional labor available to focus on production.
this
Answer: A
Be able to produce top-quality goods and services
If a specific economy has extra capital resources available, be able to produce more goods and services needed and wanted by society.
What is an economy?An economy is a region where products and services are produced, distributed, traded, and consumed. It is generally understood to be a social domain that places an emphasis on the behaviors, discourses, and tangible manifestations connected to the creation, utilization, and management of finite resources.
One's culture, values, education, technological advancement, history, social organization, political structure, legal system, and natural resources are all major determinants of an economy's processes.
These elements determine the parameters and conditions under which an economy operates in addition to providing background and content. In other words, the economic realm is a social domain made up of connected human behaviors and exchanges that cannot exist independently.
Individuals, companies, organizations, or governments all qualify as economic actors. When two persons or organizations agree on the value or price of the good or service being exchanged, which is typically stated in a particular currency, an economic transaction takes place.
Learn more about economy, here
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You are considering four hotels that differ from each other with respect to their price and customer reviews:
Answer: H4
Explanation:
Looking at the reviews given per price, a conclusion can be made that the higher the price of staying in the hotel, the higher the ratings given which would imply that the hotels charging higher, have better amenities.
This does not hold for H4 however as they are charging more than H1 but still getting the same reviews as them.
This could either mean that H1 is efficient enough to be getting the same rating for the same price as H4 or that H4 is inefficient such that they are not utilizing their amenities enough to get a higher rating than H1 who they should be better than.
Either scenario point to inefficiency on H4's part.
g you are eligible for a 30 year fixed rate home mortgage with 3.6% interest rate what is the maximum loan you can get
Answer:
the maximum loan is $379,417
Explanation:
The computation of the maximum loan is shown below:
As we know that
Maximum Loan = Present Value of all monthly Payments
= $1,725 × PVAF(0.3%,360 months)
= $1,725 × [1- (1+0.003)^-360] ÷ 0.003
= $1,725 × 219.9517
= $379,417
hence, the maximum loan is $379,417
Here the interest rate is divided by 12 and the months should be multiplied by 12 as this is the case of monthly basis
Answer:
money
Explanation:
Type the correct answer in the box. Spell all words correcty.
George has to present the goals of information management to his team member. What is a goal of Information management?
The goal of Information management is to identify information requirements for various what levels
Answer and Explanation:
The information management refers to manage the information in effecetive and efficient manner. It could be in terms of storing, organizing, developing, using, distributing the information so that it became useful for the organization
Here, the goal of information management is to identify the requirement of the information for various management levels so that it can be used in appropriate manner.
Answer:
The answer is: management
If the price level increases by 2 percent each year, the inflation rate is increasing. a. True b. False
Answer: False
Explanation:
Inflation refers to the general rise in prices of goods and services in an economy. It erodes the value of currency because with inflation, one is able to buy less goods.
If the inflation rate increases by 2% each year then the inflation rate is not increasing. The inflation rate is remaining constant at 2%. The inflation rate would be increasing if the prices increased by 2% then by 4% then by 6%. That way the inflation rate would be increasing by 2% every year.
If the rate at which prices are increasing is constant then, the inflation rate is the same.
Farley Inc. has perpetual preferred stock outstanding that sells for $50 a share and pays a dividend of $5.00 at the end of each year. What is the required rate of return? Round your answer to two decimal places.
Answer:
10%
Explanation:
The Required Rate of return is the minimum acceptable return on investment sought by individuals or companies considering an investment opportunity.
Dividend = $5
Market price = $50
Required rate of return = Dividend / Market price
Required rate of return = 5/50*100
Required rate of return = 10%
Brett, the manager at Warson’s Diner, plans to promote Keisha, one of the waitresses, to the position of an assistant manager. However, the owner, being racially biased, prevents him from doing so. Later, when Brett wants to promote one of the delivery boys to waiter, the owner again vetoes his recommendation on the grounds that his customers would feel uncomfortable having a black man deliver their food. Brett, extremely frustrated, offers Keisha and the delivery boy their promotions as he finds them deserving. Subsequently, Brett gets fired. Which of the following holds true in this scenario?
a. Brett has a cause of action against Warson’s Diner for retaliatory discharge under Title VII of the Civil Rights Act of 1964.
b. Brett has a cause of action against Warson’s Diner based on the bona fide occupational qualification defense.
c. Brett is liable for racial discrimination because as a manager he failed to change the company’s policy regarding promotion of African-Americans.
d. Brett is liable because he failed to follow the instructions provided by his employer.
Answer:
a)Brett has a cause of action against Warson's Diner for retaliatory discharge under Title VII of the Civil Rights Act of 1964.
Explanation:
From the question, we are informed about Brett, the manager at Warson’s Diner, who plans to promote Keisha, one of the waitresses, to the position of an assistant manager. We are also told that the owner, being racially biased, prevents him from doing so and in the end , Brett gets fired
What holds true in this scenario described above is that Brett has a cause of action against Warson's Diner for retaliatory discharge under Title VII of the Civil Rights Act of 1964.
Title VII of the Civil Rights Act of 1964. Is a law, of Act of 1964 that oversee any form of discrimination against employee of an organization and shield them from been discriminated because of race they belong to, their sex , their National origin an so on . The law doesn't only forbid discrimination that is intentional, but all actions that speak discrimination wether intentional or not.
Trade Mart has recently had lackluster sales. The rate of inventory turnover has dropped, and the merchandise is gathering dust. At the same time, competition has forced 's suppliers to lower the prices that will pay when it replaces its inventory. It is now December 31, , and the net realizable value of 's ending inventory is below what the company actually paid for the goods, which was . Before any adjustments at the end of the period, the Cost of Goods Sold account has a balance of . Read the requirementsLOADING.... Requirement a. What accounting action should take in this situation? should apply the ▼ average-cost method first in, first out method last in, first out method lower-of-cost-or-market rule to account for inventories. The net realizable value of ending inventory is ▼ equal to less than more than 's actual cost, so must write the inventory ▼ down up to net realizable value.
Answer:
the numbers are missing, so i looked for a similar question to fill in the blanks:
Trade Mart has recently had lackluster sales. The rate of inventory turnover has? dropped, and the merchandise is gathering dust. At the same time, competition has forced Trade Mart's suppliers to lower the prices that Trade Mart will pay when it replaces its inventory. It is now December 31, 2016, and the current replacement cost Trade Mart's ending inventory is $75,000 below what Trade Mart actually paid for the goods, which was $200,000.
Before any adjustments at the end of the? period, the Cost of Goods Sold account has a balance of $$820,000.
a. What accounting action should take in this situation?
lower-of-cost-or-market rule to account for inventories.the adjustment entry should be:
Dr Cost of goods sold 75,000
Cr Inventory 75,000
b. The net realizable value of ending inventory is?
equal to actual cost, so must write down inventory to match net realizable valueEnding inventory = $200,000 - $75,000 = $125,000
Question 3
20 pts
Solve the problem
A normal distribution has a limited range and can be skewed in either direction.
True
0 False
Next >
What type of competition stems from new products, new processes, new markets, and new forms of business organization
Answer: Creative destruction
Explanation:
Creative destruction, just like the name suggest is used to refer to the creation of new products and processes. Or an innovative mechanism by which new production units are produced. this are used to replace outdated or obsolete ones. This usually results in the production of new products, process, and markets.
If the college strictly enforces the rent ceiling of $250 a month, the on-campus housing market is
Answer: B. inefficient; the rent ceiling has no effect on the number of rooms rented
Explanation:
If the college strictly enforces the rent ceiling of $250 a month, the on-campus housing market is inefficient because the rent ceiling has no effect on the number of rooms rented.
An efficient market will see equilibrium supply meting equilibrium demand and this is not the case in this market because the supply seems to stay the same regardless of the demand.
This market is inefficient because supply does not react to the rent paid and is always the same. This is why a rent ceiling of $250 had no effect on the market in terms of supply. Efficient markets should see both supply and demand reacting to price so that a mutually beneficial equilibrium can be reached.
leased the asset on a 2-year lease, the payment would be $110 at the begin- ning of each year. If RC borrowed and bought, the bank would charge 10% interest on the loan. In either case, the equipment is worth nothing after 2 years and will be discarded. Should RC lease or buy the equipment?
Answer:
you should purchase the asset using a bank loan
Explanation:
in order to compare both options, we need to determine the present value of each alternative:
present value of lease costs:
cash flow year 0 = $110
cash flow year 1 = $110
PV = $110 + $110/1.1 = $110 + $100 = $210
present value of purchasing the equipment:
cash flow year 0 = $0
cash flow year 1 = $115.24
cash flow year 2 = $115.24
PV = $200
if you consider the tax shield of leasing = ($220 - $200) x tax rate = $20 x 40% = $8
the tax shield of interest expense = ($230.48 - $200) x tax rate = $30.48 x 40% = $12.19
It doesn't matter how you analyze this, buying is a better and cheaper option. The problem with leasing is that you need to make an immediate payment, while if you borrow money, then the first payment is made in the future. The time value of money is different.
Statz Company had sales of $1,900,000 and related cost of goods sold of $1,100,000 for its first year of operations ending December 31, 20Y1. Statz provides customers a refund for any returned or damaged merchandise. At the end of 20Y1, Statz Company estimates that customers will request refunds for 1.7% of sales and estimates that merchandise costing $12,000 will be returned. Assume that on February 3, 20Y2, Buck Co. returned merchandise with an invoice amount of $5,300 for a cash refund. The returned merchandise originally cost Statz Company $3,200.
Required:
a. Journalize the adjusting entries on December 31 to record the expected customer returns.
b. Journalize the entries to record the returned merchandise and cash refund to Buck Co. on February 3.
Answer:
pasensya na di ko alam ang sagot
Regency Inn leased a rental office in the lobby of its hotel to Americar, a car rental agency. Wagner rented a car from Americar, and while walking through the hotel parking lot to reach her rental car, she was robbed and raped. Wagner sued Regency Inn for damages, alleging that they maintained a public nuisance. A clause in the lease held that Americar was responsible to indemnify Regency Inn for any damages suffered due to the operation of the car rental agency. At the time of the assault on Wagner, Americar was a holdover tenant.
Can Regency Inn claim indemnification under these conditions? Wagner v. Regency Inn Corp., 463 N.W.2d 450 (1990).
Answer:
The court ruled against both Americar and Regency Inn, and then Regency Inn won its case against Americar. The nuisance case itself is pretty unpleasant, so it's not worth referring to it.
The fundamentals for the ruling against Americar were that they themselves had drafted the lease agreement and that the clause included in the lease agreement by which they agreed to indemnify Regency Inn was valid. The original lease term had already expired, but Americar continued to lease the offices on a monthly basis. Since they never left the place, the clauses in the original agreement were still valid even though the lease changed to a monthly basis. I.e. if you sign a lease contract and after the original contract is over, you continue to lease the same place, then the clauses from the original contract still apply.
The clause stated that Americar was liable for damages that took place on the leased premises or in their proximity, i.e. the area near their offices. The parking lot was considered to be in the proximity of Americar's offices.
If bad debt expense for the year was $40,000, what was the amount of bad debts written off during the year?
Answer:
$32,000
Explanation:
The computation of the bad debt written off during the year is shown below:
= Opening balance of the allowance account + bad debt expense - required allowance
= $30,000 + $40,000 - $38,000
= $32,000
hence, the amount of bad debts written off during the year is $32,000
We simply applied the above formula so that the correct answer could come
Re-Tire produces bagged mulch made from recycled tires. Production involves shredding tires and packaging the pieces for sale in the bagging department. All direct materials enter in the first process. The following describes production operations for October.
Direct materials used $226,000
Direct labor used 30% in Shredding; 70% in Bagging. $112,000
Predetermined overhead rate (based on direct labor) 165 %
Transferred to Bagging $206,500
Transferred to finished goods $583,000
The company's revenue for the month totaled $470,000 from credit sales, and its cost of goods sold for the month is $240,000.
Required:
Prepare summary journal entries dated October 31 to record its October production activities for:
a. Direct materials usage
b. Direct labor incurred
c. Overhead applied
d. Goods transfer from Shredding to Bagging.
e. Goods transfer from Bagging to finished goods.
f. Credit sales
g. Cost of goods sold.
Answer:
a.
Work In Process : Direct Materials $226,000 (debit)
Raw Materials $226,000 (credit)
Direct Materials used in production
b.
Work In Process : Shredding $33,600 (debit)
Work In Process : Bagging $78,400 (debit)
Salaries Payable $112,000 (credit)
Direct labor incurred during production
c.
Work In Process : Shredding $55,440 (debit)
Work In Process : $129,360 Bagging
Overheads $184,800 (credit)
Overheads applied to production cost
d.
Work In Process : Bagging $206,500 (debit)
Work In Process : Shredding $206,500 (credit)
Manufacturing costs transferred from Shredding to Bagging
e.
Work In Process : Shredding $583,000 (debit)
Finished Goods $583,000 (credit)
Manufacturing Costs transfer from Bagging to finished goods
f.
Account Receivable $470,000 (debit)
Sales Revenue $470,000 (credit)
Credit Sales during the month
g.
Cost of Goods Sold $240,000 (debit)
Finished Goods $240,000 (credit)
Cost of Goods Sold during the month
Explanation:
See the Journal entries and their narrations prepared above
Demarco and Janine Jackson have been married for 20 years and have four children who qualify as their dependents (Damarcus, Janine, Michael, and Candice). The couple received salary income of $100,000 and qualified business income of $10,000 from an investment in a partnership, and they sold their home this year. They initially purchased the home three years ago for $200,000 and they sold it for $250,000. The gain on the sale qualified for the exclusion from the sale of a principal residence. The Jacksons incurred $16,500 of itemized deductions, and they had $3,550 withheld from their paychecks for federal taxes. They are also allowed to claim a child tax credit for each of their children. However, because Candice is 18 years of age, the Jacksons may only claim the child tax credit for other qualifying dependents for Candice. (Use the tax rate schedules.)
Comprehensive Problem 4-55 Parts-c through f
a. What would their taxable income be if their itemized deductions totaled $28,000 instead of $16,500?
b. What would their taxable income be if they had $0 itemized deductions and $6,000 of for AGI deductions?
c. Assume the original facts but now suppose the Jacksons also incurred a loss of $5,000 on the sale of some of their investment assets. What effect does the $5,000 loss have on their taxable income?
Answer:
a. Taxable income = $80,000
b. Taxable income = $77,600
c. Taxable income = $80,600
Explanation:
Taxable income refers to the amount of income that is used to determine the amount of tax that will be paid to the government by an individual or firm in given year. The taxable income is arrived at after all the relevant addition and allowable deductions have been made.
The requirements are therefore answered as follows:
a. What would their taxable income be if their itemized deductions totaled $28,000 instead of $16,500?
Note: See part a of the attached excel file see the effect on taxable income.
The itemized deductions total of $28,000 instead of $16,500 makes the taxable income to be $80,000.
In the attached excel file, the following calculations is used:
Qualified business income deduction = Qualified business income * Parentage of deduction allowed = $10,000 * 20% = $2,000
b. What would their taxable income be if they had $0 itemized deductions and $6,000 of for AGI deductions?
Note: See part b of the attached excel file for the calculations of the taxable income.
This makes the taxable income to be equal to $77,600.
c. Assume the original facts but now suppose the Jacksons also incurred a loss of $5,000 on the sale of some of their investment assets. What effect does the $5,000 loss have on their taxable income?
Note: See part c of the attached excel file for the calculations of the taxable income.
The loss of loss of $5,000 on the sale of some of their investment assets incurred by the Jacksons is capital loss.
For tax purposes, capital loss of can be deducted as a loss on tax return by tax payers with a maximum of $3,000 to be deducted per year.
Therefore, the Jacksons will deduct $3,000 as a capital loss from their tax return, and the effect of this is to reduce the taxable income by $3,000.
This makes the taxable income to be equal to $80,600.
Casino Inc. expects to pay a dividend of $6 per share at the end of year 1 (Div1) and these dividends are expected to grow at a constant rate of 6 percent per year forever. If the required rate of return on the stock is 20 percent, what is the current value of the stock today?
Answer:
The current value of the stock today is $42.90
Explanation:
P1 = $6 / 0.20 - 0.06
P1 = $6 / 0.14
P1 = $42.8571
P1 = $42.90
Van Frank Telecommunications has a patent on a cellular transmission process.
1. The company has amortized the $19.80 million cost of the patent on a straight-line basis, since it was acquired at the beginning of 2012.
2. Due to rapid technological advances in the industry, management decided that the patent would benefit the company over a total of six years rather than the nine-year life being used to amortize its cost.
3. The decision was made at the end of 2016 (before adjusting and closing entries).
What is the appropriate adjusting entry for patent amortization in 2016 to reflect the revised estimate.
(If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Enter your answers in millions rounded to 2 decimal places (i.e., 5,500,000 should be entered as 5.50).) Record the adjusting entry for patent amortization in 2016.
Answer:
Van Frank Telecommunications
December 31, 2016:
Debit Amortization Expense - Patent $4,400,000
Credit Accumulated Amortization-Patent $4,400,000
To record the revised amortization expense for the year.
Explanation:
Data and Calculations:
Patent's value on January 1, 2012 = $19,800,000
Patent's assessed lifespan = 9 years
Amortization expense for each year on straight-line = $2,200,000 ($19,800,000/9)
Accumulated Amortization for Patent = $6,600,000 (for 3 years)
Net book value of patent = $13,200,000 ($19,800,000 - $6,600,000)
Revised lifespan = 6 years
Revised amortization expense per year = $4,400,000 ($13,200,000/3)
Presented below are four statements which you are to identify as true or false.
1. GAAP is the term used to indicate the whole body of FASB authoritative literature.
2. Any company claiming compliance with GAAP must comply with most standards and interpretations but does not have to follow the disclosure requirements.
3. The primary governmental body that has influence over the FASB is the SEC.
4. The FASB has a government mandate and therefore does not have to follow due process in issuing a standard.
Answer:
1. GAAP is the term used to indicate the whole body of FASB authoritative literature. TRUE.
The Financial Accounting Standards Board are the authors of the GAAP and as such GAAP is used to indicate the whole body of their literature.
2. Any company claiming compliance with GAAP must comply with most standards and interpretations but does not have to follow the disclosure requirements. FALSE.
To claim compliance with GAAP, all standards and interpretations including Disclosure requirements should be followed.
3. The primary governmental body that has influence over the FASB is the SEC. TRUE.
The Securities and Exchange Commission (SEC) is the Government body that is meant to oversee the application of Accounting standards and as such, they have influence over the FASB.
4. The FASB has a government mandate and therefore does not have to follow due process in issuing a standard. FALSE.
Even though they have a Government mandate, the FASB must follow due process when establishing principles so that people might be able to contribute to or criticize the guidelines should they please.
Mirr, Inc. was incorporated on January 1, year 1, with proceeds from the issuance of $750,000 in stock and borrowed funds of $110,000. During the first year of operations, revenues from sales and consulting amounted to $82,000, and operating costs and expenses totaled $64,000. On December 15, Mirr declared a $3,000 cash dividend, payable to stockholders on January 15, year 2. No additional activities affected owners' equity in year 1. Mirr's liabilities increased to $120,000 by December 31, year 1. On Mirr's December 31, year 1 balance sheet, total assets should be reported at:_______
Answer:
$885,000
Explanation:
Calculation for the total assets should be reported
Using this formula
TOTAL ASSETS =Total of liabilities + Total stockholders' equity
Initial equity $750,000
Income $18,000
($82,000-$64,000)
Dividends ($3,000)
12/31 Total stockholders' equity $765,000
Add Liabilities of $120,000
Total ASSETS $885,000
Therefore On Mirr's December 31, year 1 balance sheet, total assets should be reported at $885,000
Eye Deal Optometry leased vision-testing equipment from Insight Machines on January 1, 2021. Insight Machines manufactured the equipment at a cost of $350,000 and lists a cash selling price of $437,810. Appropriate adjusting entries are made quarterly.
Related Information:
Lease term 5 years (20 quarterly periods)
Quarterly lease payments $26,250 at Jan. 1, 2021, and at Mar. 31, June 30, Sept. 30, and Dec. 31 thereafter
Economic life of asset 5 years
Interest rate charged by the lessor 8%
Required:
a. Prepare appropriate entries for Eye Deal to record the arrangement at its beginning, January 1, 2021, and on March 31, 2021.
b. Prepare appropriate entries for Insight Machines to record the arrangement at its beginning, January 1, 2021, and on March 31, 2021.
Answer:
a. Prepare appropriate entries for Eye Deal to record the arrangement at its beginning, January 1, 2021, and on March 31, 2021.
we must first determine the present value of the lease payments:
PV of lease payments = quarterly payment x annuity factor
quarterly payment = $26,250PV annuity due factor, 2%, 20 periods = 16.67846PV of lease payment = $26,250 x 16.67846 = $437,809.56 ≈ $437,810
January 1, 2021, equipment leased from Insight Machines
Dr Right of use asset 437,810
Cr Lease payable 437,810
January 1, 2021, first lease payment
Dr Lease payable 26,250
Cr Cash 26,250
March 31, 2021, second lease payment
Dr Lease payable 18,019
Dr Interest expense 8,231
Cr Cash 26,250
interest expense = ($437,810 - $26,250) x 2% = $8,231
March 31, 2021, amortization expense
Dr Amortization expense 21,891
Cr Right of use asset 21,891
amortization expense = $437,810 / 20 = $21,891
b. Prepare appropriate entries for Insight Machines to record the arrangement at its beginning, January 1, 2021, and on March 31, 2021.
January 1, 2021, equipment leased to Eye Deal
Dr Lease receivable 437,810
Cr Lease revenue 437,810
Dr Cost of goods sold 350,000
Cr Equipment 350,000
January 1, 2021, first lease payment
Dr Cash 26,250
Cr lease receivable 26,250
March 31, 2021, second lease payment
Dr Cash 26,250
Cr Lease receivable 18,019
Cr Interest revenue 8,231
Question 6 of 10
Which economic tool would most likely be used as part of a contractionary
monetary policy?
A. Lowering interest on reserves
B. Reducing the discount rate
C. Raising the reserve requirement
D. Buying treasury securities
Answer:
C. Raising the reserve requirement
Explanation:
Contractionary monetary policy refers to the Fed's action of reducing money supply in the economy. Reducing the money supply slows down the economy, thereby countering expansion and inflationary pressures. Raising the reserve requirement is one tool that the Fed uses as a contractionary monetary policy.
Reserve requirements refer to the percentage of customer deposits that the Fed requires commercial banks to maintain at all times. An increase in reserve requirement decreases the money available for banks to lend out. Reduced lending means a decrease in the money supply, which results in a decline in the inflation rate.