Answer:
Correct Answer:
4. The Government Printing Office
Explanation:
The United States Government Publishing Office is an agency of the legislative branch of the United States federal government with the mandate to inform the Nation by producing, procuring, and disseminating printed and electronic publications of the Congress as well as the executive departments and establishments of the Federal Government.
The correct answer is the 4. Government Printing Office (GPO). The GPO is an agency of the United States federal government that is responsible for producing and distributing various government publications, including books, reports, and other documents
The Government Printing Office (GPO) provides over 25,000 government publications. GPO is an agency of the legislative branch of the U.S. government and produces a wide range of printed and electronic publications.: The Government Printing Office (GPO) is the agency responsible for providing over 25,000 government publications.
The GPO is an agency of the legislative branch of the U.S. government and produces a wide range of printed and electronic publications.The GPO has been providing printing services to the federal government since 1861. The agency produces publications for a variety of government agencies, including the Department of Defense, the Department of State, and the Department of Justice. The GPO also produces publications for Congress, including the Congressional Record and the Congressional Directory.
Additionally, the GPO provides printing and publishing services for the U.S. Government Publishing Office bookstore and for other private sector clients.The GPO has been responsible for printing many important government documents throughout U.S. history, including the Emancipation Proclamation and the Federalist Papers. Today, the agency continues to play an important role in providing government publications to the American public.
know more about Government Printing Office (GPO).
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If the desired daily output is 458 units, how many units must be started to allow for loss due to scrap? (Do not round intermediate calculations. Round up your final answer to the next whole number.)
Complete question:
Production process consists of a three step operation. Scrap rate is 19% for the first step and 11% for the other two steps.
If the desired daily output is 458 units, how many units must be started to allow for loss due to scrap? (Do not round intermediate calculations. Round up your final answer to the next whole number.)
Answer:
784 units
Explanation:
Given that:
Scrap rate at first step = 19%
Scrap rate at second step = 11%
Scrap rate at third step = 11%
Desired output unit = 458
After first step,
Material left= (100% - 19%) = 81%
After second step,
Material left = (100% - 11%) = 89%
After third step :
Material left = (100% - 11%) = 89%
Therefore, to compensate for scrap in the first step and attain desired output unit:
Units that must be started :
Desired output unit / (81%)*(89%)*(89%)
458 / (0.81)*(0.89)*(0.89)
458 / 0.583929
= 784.34193 units
= 784 units
Dorsey Company manufactures three products from a common input in a joint processing operation.
Joint processing costs up to the split-off point total $350,000 per quarter.
The company allocates these costs to the joint products on the basis of their relative sales value at the split-off point.
Unit selling prices and total output at the split-off point are as follows:
Product Selling Price Quarterly Output
A $16 per pound 15,000
B $8 per pound 20,000
C $25 per gallon 4,000
Each product can be processed further after the split-off point. Additional processing requires no special facilities.
The additional processing costs (per quarter) and unit selling prices after further processing are given below:
Product Additional Processing Costs Selling Price
A $63,000 $20 per pound
B $80,000 $13 per pound
C $36,000 $32 per gallon
a. Compute the incremental profit (loss) for each product.
b. Which product or products should be sold at the split-off point and which product or products should be processed further? Show Computations.
Answer:
Product A B C
Incremental profit/(loss) (3 ,000) 20,000 (8,000)
b
Process further : Product B
Sell at the split of point : Product A and C
Explanation:
Question a
A company should process further a product if the additional revenue from the split-off point is greater than than the further processing cost.
Also note that all cost incurred up to the split-off point are irrelevant to the decision to process further .
Additional sales revenue = Sales revenue after further processing - sales revenue after split-off point .
Product A B C
Sales after split of point 20 13 32
Sales at the split off point (16) ( 8) (25)
Additional rev per unit 4 5 7
Quantity × 15,000 20,000 4,000
Additional sales rev 60,000 100,000 28,000
Further processing cost ( 63,000) ( 80,000) (36,000)
Incremental profit/(loss) (3 ,000) 20,000 (8,000)
Question b
Products A and Product C should be sold at the split of point
Doing so would save the the company the $11,000 in incremental losses ( 3,000+ 8,000).
Product B should be process further as it would produce an incremental profit of $20,000
If the market interest rate is greater than the stated interest rate on bonds, the bonds will sell: ___________
a. at a premium.
b. at a discount.
c. at face value.
d. only after the stated interest rate is increased
Answer:
Option B, at a discount, is the right answer.
Explanation:
Bond is a kind of security or it is a liability for a company that occurs by issuing the bonds to the public. We find that if the stated interest rate on bonds is lower than the market interest rate then the general public will not buy bonds. Therefore, it becomes essential for a company to issue bonds at a discount rate so that it can attract the general public. It is the same case in the given question, therefore, the company will issue bonds at a discount rate.
Unfortunately, auditing is not necessary for effective financial reporting. Do you agree with this statement? In 300 words, defend your position.
Answer: I do not agree with that statement.
Explanation: Auditing is a term used to describe the various processes and activities put in place to review, examine and verify the financial reports and statements of an organisation. When effectively implemented, it has the advantage of ensuring the following.
I. Improved quality of financial statements
II. Reduced chances for fraudulent activities.
III. Proper documentation and reporting of daily Transactions.
IV. Improved monitoring and evaluation of the financial activities of an organisation.
V. It is a statutory requirements and obligation for Business Organisations.
VI. It will help to make the financial records of an organisation to be more accessible and transparent.
Many organisations have continued to Implement periodic audits and make it part of their processes, system and policy as it has benefited them and helped them to comply with statutory regulations and obligations.
On November 10 of the current year, Flores Mills sold carpet to a customer for $7,300 with credit terms 4/10, n/30. Flores uses the gross method of accounting for cash discounts. What is the correct entry for Flores on November 10?
Answer:
Dr Cash 7,008
Dr Sales discounts 292
Cr Accounts Receivable 7,300
Explanation:
Preparation of the correct entry for Flores on November 17
Based on the information given we were told that Flores Mills sold the amount of $7,300 worth of carpet to a customer which include a credit terms of 4/10, n/30.
Therefore using the gross method of accounting for cash discounts this means that the transaction will be recorded as;
Dr Cash 7,008
(7,300-292)
Dr Sales discounts 292
(4%×$7,300)
Cr Accounts Receivable 7,300
Answer:
Accounts receivable - $7300 Dr.
Sales - $7300 Cr.
Explanation:
Given the following :
Amount carpet was sold = $7,300
Credit terms = 4/10 n/30
Date of sale = November 10
According to the credit terms of the sale, the customers receives a discount of 4% of payment is made within 10 days otherwise customer makes full payment. In other to make record of the purchase using the gross method of accounting on the same day, record is taken without deduction of the discount attached to the sale until payment is made.
Account receivable is debited with the sales price as payment has not yet been made and sales is credited with the equivalent amount.
All of the following are alternative forms of institutional advertisements EXCEPT:
A. competitive
B. public service
C. reminder
D. pioneering
E. advocacy
Answer: B. Public Service
Explanation:
There are 4 alternative forms of institutional advertisements being;
Competitive - These types of adverts aim to show that the product presented is better than that of the competitor by showcasing its benefits and features.Reminder - As the term implies, this advertisement is meant to remind you. Remind you of the product being offered and how it has been beneficial to you.Pioneering - This is for products that are just starting out and need to be introduced to inform the market of its existence.Advocacy - These focus on telling the audience the position a company has on an issue.These are the four alternative forms of institutional advertisements and Public Service is not one of them.
Zoe Corporation has the following information for the month of March: cost of direct materials used in product $15,401,direct labor $24,583, factory overhead $35,335, work in process inventory March 1 $20,021, work in process inventory, March 31 $20,681, finished good inventory, March 1 #24,889, Finished goods, March 31, $27,311, A, determine the cost of goods manufactured, B. determine the cost of goods sold.
Answers:
Calculation of cost of goods manufactured:
Particulars Amount(in $)
Cost of direct material $15,401
Add: Direct labour $24,583
Add: Factory overhead $35,335
Add: Work In process inventory, March 1 $20,021
Less: Work in process inventory, March 31 $20,681
Cost of goods manufactured $74,659
Calculation of Cost of goods sold:
Particulars Amount(in $)
Cost of goods manufactured $74,659
Add: Finished goods inventory, March 1 $24,889
Less: Finished goods inventory, March 31 $27,311
Cost of goods sold $72,237
You are trying to decide which of two automobiles to buy. The first is American-made, costs $28,500, and has a rated gasoline mileage of 28 miles/gal. The second car is of European manufacture, costs $35,700, and has a rated mileage of 19 km/L. If the cost of gasoline is $3.25/gal and if the cars actually deliver their rated mileage, estimate how many miles you would have to drive for the lower fuel consumption of the second car to compensate for the higher cost of this car.
Answer:
So, the European made car must be driven at least 266666.67 kilo metres in order for both the cars to have same total cost and the European car should be driven more than 266666.67 kilo metres in order for it to have a lower total cost and provide an advantage over the american made.
Explanation:
To calculate the number of miles needed for the lower fuel consumption car to have the same cost as of the higher fuel consumption cost, we need to equate the cost equation of both the cars.
We need to convert the gallons into litres and miles into kilo metres. 1 gallon contains 3.785 litres and 1 mile contains 1.609 kilo metre. So, mileage of first car in kilo metre per Litre is,
Mileage American made = (28 * 1.609) / 3.785
Mileage American made = 11.90 kilo metre per litres
Gas cost per Litres = 3.25 / 3.785
Gas cost per Litres = $0.8586 rounded off to $0.86 per Litres
Gas cost per kilo metre - American Made = 0.86 / 11.90 = $0.072 per km
Gas cost per kilo metre - European Made = 0.86 / 19 = $0.045 per km
The total cost equation (purchase price + fuel cost) of first car which is American made is,
Let x be the number of kilo metres where both cars total costs are equal.
Total cost = 28500 + 0.072x
The total cost equation (purchase price + fuel cost) of first car which is European made is,
Let x be the number of kilo metres where both cars total costs are equal.
Total cost = 35700 + 0.045x
28500 + 0.072x = 35700 + 0.045x
0.072x - 0.045x = 35700 - 28500
0.027x = 7200
x = 7200 / 0.027
x = 266666.67 kilo metres
So, the European made car must be driven at least 266666.67 kilo metres in order for both the cars to have same total cost and the European car should be driven more than 266666.67 kilo metres in order for it to have a lower total cost and provide an advantage over the american made.
The RC and More Superstore decides to track customer complaints as part of their ongoing customer satisfaction improvement program. After collecting data for two months, their check sheet appears as follows:
The RC and More Superstore decides to track customer complaints as part of their ongoing customer satisfaction improvement program. After collecting data for two months, their check sheet appears as follows:
Type of Problem Frequency
(number of times)
Batteries not included 6
Items damaged when received 21
Literature not included in box 9
Parts missing 13
Unit not working 1
Construct a Pareto chart including the cumulative % frequency. What is the cumulative percentage of the two leftmost bars?
Construct a Pareto chart including the cumulative % frequency.
What is the cumulative percentage of the two leftmost bars?
Answer: 68% (sixty Eight percent)
Explanation:
It should be noted that, if Pareto chart including the cumulative % frequency is being constructed. On this wise, the cumulative percentage of the two leftmost bars would be 68% (Sixty Eight percent).
From the following information, construct a simple income statement and a balance sheet:
Sales $1,000,000
Finished goods 250,000
Long-term debt 200,000
Raw materials 80,000
Cash 70,000
Cost of goods sold 500,000
Accounts receivable 150,000
Plant and equipment 410,000
Interest expense 70,000
Number of shares outstanding 80,000
Earnings before taxes 370,000
Taxes 100,000
Accounts payable 160,000
Other current liabilities 60,000
Other expenses 60,000
Equity 540,000
Answer and Explanation:
The Preparation of the simple income statement and a balance sheet is shown below:-
Corporation X
Income Statement
for the Year Ended xxxx
Particulars Amount
Sales $1,000,000
Less: Cost of goods sold $500,000
Gross profit $500,000
Less: Other expenses $60,000
EBIT $440,000
Less: Interest $70,000
EBT $370,000
Less: Income tax $100,000
Net income $270,000
Number of shares outstanding $80,000
Earning per share $3.375
(Net income ÷ Number of shares outstanding)
Corporation X
Income Statement
for the Year Ended xxxx
Particulars Amount
Assets
Cash $70,000
Accounts Receivable $150,000
Inventory
Raw Material $80,000
Finished Goods $250,000
Total Current Assets $550,000
Plant & Equipment $410,000
Total Assets $960,000
Liabilities
Accounts Payable $160,000
Other Current Liabilities $60,000
Total Current Liabilities $220,000
Long term Debt $200,000
Equity $540,000
Total Liabilities & Equity $960,000
The goal of this exercise is to demonstrate your understanding of the total logistic cost factors, which are expenses to be minimized Roll over each firm name to reveal a logistic activity faced by the firm. Then identify which type of the logistic cost factor the activity represents by dropping it onto the proper spot in the graphic. Hyundai SC Johnson Walgreens Ford LOGISTICS COST FACTORCostco TransportationKmart Warehousing & Materials HandlingFrito-Lay Order processingToyota StockoutsChrysler InventorySafeway Return Products Handling Philips Franchising is a variation of:_________.a. corporate vertical marketing systems b. cooperative vertical marketing systems. c. administered vertical marketing systems d. contractual vertical marketing systems. e. wholesaler-sponsored voluntary systems
Answer and Explanation:
Stockouts logistics cost factor-
Safeway,
Kmart
Transportation logistics cost factor-
Hyundai,
Ford
Inventory logistics cost factor-
Toyota,
Frito Lay
Return goods handling logistics cost factor-
Phillips,
Costco
Warehousing and materials handling logistics cost factor -
Coca Cola,
Walgreens
Order processing logistics cost factor-
SC Johnson,
Chrysler
logistics cost factors are cost factors associated with logistics ( concerned with acquisition, storage and transportation ofresources) based on the kind of business or kind of products or services a company is into. From the above we see that logistics cost factors vary as the companies are into different products or services and industries and therefore face different logistics costs associated with their production and or delivery. Every company aims to achieve logistics efficiency through minimizing costs associated with their logistics costs factors example Hyundai with transportation logistics cost factors would aim to reduce it's logistics cost factors and maximise profits by its locating it's manufacturing plant close to where it imports parts for it's vehicle manufacturing so as to reduce cost of transporting vehicle parts to manufacturing plant
Roberto Corporation was organized on January 1, 2021. The firm was authorized to issue 91,000 shares of $5 par common stock. During 2021, Roberto had the following transactions relating to shareholders' equity: Issued 9,600 shares of common stock at $6.70 per share. Issued 20,000 shares of common stock at $10.10 per share. Reported a net income of $107,000. Paid dividends of $55,000. Purchased 3,100 shares of treasury stock at $12.10 (part of the 20,000 shares issued at $10.10). What is total shareholders' equity at the end of 2021
Answer:
The total shareholders' equity at the end of 2021 is $465,830
Explanation:
Treasury stock = Shares purchased * Purchase price
Treasury stock = 3,100 shares $12.10 per share
Treasury stock = $37,510
Shareholder′ s equity = Equity capital + Net income - Dividend - Treasury stock
Shareholder′ s equity = $266,320 + $107,000 + $55,000 + $37,510
Shareholder′ s equity = $465,830
Working
Equity capital = (Shares issued × Issue Price) + (Shares issued * Issue price)
Equity capital = (9,600 * $6.70) + (20,000 * $10.10)
Equity capital = $64,320 + $202,000
Equity capital = $266,320
A predetermined manufacturing overhead rate is calculated in the same manner as an actual manufacturing overhead rate except that estimated rather than actual costs and activity levels are used in computing predetermined overhead rates.
a) true
b) false
Answer:
a) true
Explanation:
The Formulae to compute the rates are :
Predetermined manufacturing overhead rate = Estimated Fixed Cost ÷ Estimated Activity
While,
Actual manufacturing overhead rate = Actual Fixed Cost ÷ Actual Activity
The constraint at Pickrel Corporation is time on a particular machine. The company makes three products that use this machine. Data concerning those products appear below:VD JT SMSelling price per unit $ 344.85 $ 415.40 $ 119.32Variable cost per unit $ 270.18 $ 310.88 $ 91.96Minutes on the constraint 5.70 6.70 1.901. Rank the products in order of their current profitability from most profitable to least profitable. In other words, rank the products in the order in which they should be emphasized. (Round your intermediate calculations to 2 decimal places.)Multiple ChoiceJT, SM, VDJT, VD, SMVD, SM, JTSM, VD, JT
Answer:
JT, SM, VD
Explanation:
Calculation to rank the products in the order in which they should be emphasized
VD JT SM
Selling price per unit
$ 344.85 $ 415.40 $ 119.32
Less:Variable cost per unit
$ 270.18 $ 310.88 $ 91.96
Contribution per unit
$74.67 $104.52 $27.36
÷Minutes on the constraint 5.70 6.70 1.90
=Contribution per minut
$13.10 $15.60 $14.40
Ranking
VD $13.10 Third
JT $15.60 First
SM $14.40 Second
JT, SM, VD
Therefore the product will be rank from the highest to the lowest which is JT, SM, VD
Project Y costs $50,000, its expected cash inflows are as follows-- year 1: $19,000; year 2: $20,000; year 3: $18,000; year 4: $19,000; year 5 $20,000; year 6: $17,000, and its WACC is 7%.
a. What is the project's NPV?
b. What is the project's IRR?
c. What is the project's MIRR?
d. What is the project's Payback Period?
e. What is the project's Discounted Payback?
Answer:
a. $40,001.70
b. 30.19 %
c. 18,01% .
d. 2 years and 7 months
e. 3 years
Explanation:
Calculation of NPV using a financial calculator :
-$50,000 CFj
$19,000 CFj
$20,000 CFj
$18,000 CFj
$19,000 CFj
$20,000 CFj
$17,000 CFj
i/yr 7%
Shift NPV $40,001.70
Calculation of IRR using a financial calculator :
-$50,000 CFj
$19,000 CFj
$20,000 CFj
$18,000 CFj
$19,000 CFj
$20,000 CFj
$17,000 CFj
Shift IRR 30.19 %
Calculation of MIIR :
The First Step is to Calculate the Terminal Value at end of year 6.
Terminal Value (FV) = Sum of (PV x (1 + r) ^ 6 - n)
=$19,000 x (1.07) ^ 5 + $20,000 x (1.07) ^ 4 + $18,000 x (1.07) ^ 3 + $19,000 x (1.07) ^ 2 + $20,000 x (1.07) ^ 1 + $17,000 x (1.07) ^ 0
= $26,648.48 + $26,215.92 + $22,050.77 + $21,753.10 + $21,400 + $17,000
= $135,068.27
The Next Step is to Calculate the MIRR using a Financial Calculator :
-$50,000 CFj
0 CFj
0 CFj
0 CFj
0 CFj
0 CFj
$135,068.27 CFj
Shift IRR/Yr 18,01%
Therefore, the MIRR is 18,01% .
Calculation of the Payback Period :
$50,000 = Year 1 ($19,000) + Year 2 ($20,000) + $11,000 / $18,000
= 2 years and 7 months
Calculation of the project's Discounted Payback :
$50,000 = $19,000 / (1.07)^1 + $20,000 / (1.07)^2 + $18,000/ (1.07)^3 + $19,000/ (1.07)^4
= Year 1 ($17,757.01) + Year 2 ($17,468.77) + Year 3 ($14,693.36) + $80.83 / $14,495
= 3 years
A portfolio comprises Coke (beta of 1.1) and Wal-Mart (beta of 1). The amount invested in Coke is $10,000 and in Wal-Mart is $20,000. What is the beta of the portfolio?
Answer:
Beta= 1.133
Explanation:
Giving the following information:
Coke:
beta= 1.1
Investment= $10,000
Wal-Mart:
beta= 1
Investment= $20,000
First, we need to calculate the proportion of investments:
Coke= 10,000/30,000= 0.33
Wal-Mart= 20,000/30,000= 0.77
Now, to calculate the beta of the portfolio, we need to use the following formula:
Beta= (proportion of investment A*beta A) + (proportion of investment B*beta B)
Beta= (0.33*1.1) + (0.77*1)
Beta= 1.133
An increase in the demand for the Canadian dollar will lead to
A.
an appreciation of the Canadian dollar and a higher quantity of Canadian dollars
traded
B.
a depreciation of the Canadian dollar and a higher quantity of Canadian dollars traded
C.
an appreciation of the Canadian dollar and a lower quantity of Canadian dollars
traded
D.
a depreciation of the Canadian dollar and a lower quantity of Canadian dollars traded.
Answer:
A. an appreciation of the Canadian dollar and a higher quantity of Canadian dollars
traded
Explanation:
An increase in the demand for the Canadian dollar will lead to
an appreciation of the Canadian dollar and a higher quantity of Canadian dollars traded.
When, the demand for Canadian dollar increases, it means, the Canadian dollar will appreciate against other currencies and higher quantity of the Canadian dollar will be traded.
A rightward shift in demand( increase) means the demand curve has moved up along the
supply curve causing the price of the currency measured on the horizontal axis to increase.
Sports Company makes snowboards, downhill skis, cross-country skies, skateboards, surfboards, and in-line skates. The company found it beneficial to split operations into two divisions based on the climate required for the sport: Snow Sports and Non-Snow Sports. The following divisional information is available for the past year:
Sales Operating Income Total Assets Crrent Liabilities ROI
Snow Sports 5,800,000 $ $ 990,000 4,400,000 500,000 22.5%
Non-Snow $ 8,800,000 $ 1,512,000 $ $ 6,300,000$ 750,000 24.0%
Sports
Tests management has specified a target 15% rate of return.
Compute each division's residual income. Interpret your results. Are your results consistent with each division's ROI?
Answer:
I. Residual Income:
Snow division
Residual Income = Operating income - (Total assets × Target rate of return)
Residual Income = $990,000 - ($4,400,000 * 15%)
Residual Income = $330,000
Thus, The residual income of the snow division is $330,000.
Non-snow division
Residual Income = Operating income - (Total assets × Target rate of return)
Residual Income = $1,512,000 - ($6,300,000 * 15%)
Residual Income = $567,000
Thus, The residual income of the non-snow division is $567,000
ii. The divisions have positive residual incomes, that is, both the divisions are earning income more than the target return on the investments.
iii. The results are consistent with the return on investment calculations of both the divisions.
g Oriole Company had actual sales of $1100000 when break-even sales were $660000. What is the margin of safety ratio? 67% 40% 33% 60%
Answer:
40%
Explanation:
Oriole company has an actual sales of $1,100,000
The break even sales is $660,000
Therefore, the margin of safety can be calculated as follows
= Actual sales-break-even sales/actual sales
= $1,100,000-$660,000/$1,100,000
= $440,000/$1,100,000
= 0.4×100
= 40%
Hence the margin of safety is 40%
Monthly production costs in Dilts Company for two levels of production are as follows. Cost 2,000 Units 4,000 Units Indirect labor $10,000 $20,000 Supervisory salaries 5,000 5,000 Maintenance 4,000 6,000 Indicate which costs are variable, fixed, and mixed. Indirect labor select a type of costs Supervisory salaries select a type of costs Maintenance select a type of costs
Answer:
Indirect Labor - Variable Cost
This is a Variable cost as it changes alone with the production quantity. At 2,000 units the Indirect labor costs were $10,000 and at 4,000 units that figure had gone up to $20,000.
Supervisory Salaries - Fixed Costs
These salaries are a fixed cost because fixed costs do not change with production quantity and neither did these. When quantity produced was 2,000 units, these salaries were $5,000 and this did not change even when production quantity went up to 4,000 units.
Maintenance Salaries - Mixed Costs
Mixed costs have elements of both fixed and variable costs. The Maintenance cost per unit here is;
= (6,000 - 2,000) / ( 4,000 - 2,000)
= $2 per unit
Cost when units are 2,000 using the $2 per unit rate is indeed $4,000. However if the $2 per unit was multiplied with 4,000 units, the cost should be $8,000 instead it is $6,000. It is therefore a mixed cost.
Fosnight Enterprises prepared the following sales budget: Month Budgeted Sales March April May June The expected gross profit rate is % and the inventory at the end of February was . Desired inventory levels at the end of the month are % of the next month's cost of goods sold. What are the total purchases budgeted for May?
The question is incomplete as the figures are missing. The complete question is,
Fosnight Enterprises prepared the following sales budget:
Month Budgeted Sales
March $6,000
April $13,000
May $11,000
June $20,000
The expected gross profit rate is 20% and the inventory at the end of February was $7,000. Desired inventory levels at the end of the month are 30% of the next month's cost of goods sold. What are the total purchases budgeted for May?
Answer:
Purchases - May = $10960
Explanation:
To calculate the total value of purchases that are budgeted for May, we first need to calculate the cost of goods sold and the opening and closing inventory for May.
As the gross profit margin is 20%, the cost of goods sold will be 80% of sales.
Cost of goods sold for May = 0.8 * 11000 = $8800
Cost of goods sold for June = 0.8 * 20000 = $16000
Opening inventory - May = 8800 * 0.3 = $2640
Closing Inventory - May = 16000 * 0.3 = $4800
Purchases = Closing Inventory + Cost of Goods Sold for the month - Opening Inventory
Purchases - May = 4800 + 8800 - 2640
Purchases - May = $10960
Champion Contractors completed the following transactions and events involving the purchase and operation of equipment in its business.
2016
Jan. 1 Paid $306,000 cash plus $12,240 in sales tax and $1,900 in transportation (FOB shipping point) for a new loader. The loader is estimated to have a four-year life and a $30,600 salvage value. Loader costs are recorded in the Equipment account.
Jan. 3 Paid $7,000 to enclose the cab and install air conditioning in the loader to enable operations under harsher conditions. This increased the estimated salvage value of the loader by another $2,100.
Dec. 31 Recorded annual straight-line depreciation on the loader.
2017
Jan. 1 Paid $4,300 to overhaul the loader’s engine, which increased the loader’s estimated useful life by two years.
Feb. 17 Paid $1,075 to repair the loader after the operator backed it into a tree.
Dec. 31 Recorded annual straight-line depreciation on the loader.
Required:
Prepare journal entries to record these transactions and events.
Answer and Explanation:
The journal entries are shown below:
On Jan 1 2016
Equipment $320,140 ($306,000 + $12,240 + $1,900
To Cash $320,140
(Being the cash paid is recorded)
On Jan 3 2016
Equipment $7,000
To Cash $7,000
(Being the cash paid is recorded)
On Dec 31 2016
Depreciation Expense - Equipment $73,610
To Accumulated depreciation-Equipment $73,610
(being the depreciation expense is recorded)
On Jan 1 2017
Equipment $4,300
To Cash $4,300
(Being the cash paid is recorded)
On Feb 17 2017
Repair Expense - Equipment $1,075
To Cash $1,075
(Being the cash paid is recorded)
On Dec 31 2017
Depreciation Expense - Equipment $45,026
To Accumulated depreciation - Equipment $45,026
(being the depreciation expense is recorded)
Working notes.
1.
Equipment Cost $320,140
Additional cost $7,000
Total Cost $327,140
Less salvage value ($30,600 + $2,100) $32,700
Cost to be depreciated $294,440
Annual depreciation ($294,440 ÷ 4 years) $73,610
2. Total Cost ($327,140 + $4,300) $331,440
Less accumulated depreciation -$73,610
Book value $257,830
Less salvage -$32,700
Cost to be depreciated $225,130
Revised left useful life (4 - 1 + 2) 5
Revised annual depreciation ($225,130 ÷ 5 yrs) $45,026
A $100 bond with 4% coupon rate matures in 25 years. It bears semiannual coupons and is purchased for $117.50 to yield i(2). A $100 bond with 5% coupon rate also matures in 25 years. It also bears semiannual coupons, but is purchased for $135.00 to yield i(2). What is i(2)?
Answer:
4. At least 2.75%, but less than 3.25%
Explanation:
missing options:
Less than 1.75% At least 1.75%, but less than 2.25% At least 2.25%, but less than 2.75% At least 2.75%, but less than 3.25% 3.25% or morei⁽²⁾ = approximate YTM = {2 + [(100 - 117.50)/50]} / [(100 + 117.50)/2] = 1.65 / 108.75 = 1.517% x 2, annual rate = 3.03%
i⁽²⁾ = approximate YTM = {2.50 + [(100 - 135)/50]} / [(100 + 135)/2] = 1.80 / 117.50 = 1.532% x 2, annual rate = 3.06%
Since both YTMs are very similar, we can determine that i⁽²⁾ is approximately 3%, maybe a little less or a little more, since we are using the approximate yield to maturity formula.
Tom Scott is the owner, president, and primary salesperson for Scott Manufacturing. Because of this, the company's profits are driven by the amount of work Tom does. If he works 40 hours each week, the company's EBIT will be $585,000 per year; if he works a 50-hour week, the company's EBIT will be $1.65 million, and it can issue equity or issue debt with an interest rate of 9 percent. Assume there are no corporate taxes.
Required:
a. What are the cash flows to Tom under each scenario?
b. Under which form of financing is Tom likely to work harder?
Answer:
a.
If debt is issued;
40 Hour week;
EBIT = $585,000
Cash flows to Tom = EBIT - Interest
Interest will be on the $1.65 million that needs to be borrowed so;
= 9% * 1,650,000
= $148,500
Cash Flow to Tom = 585,000 - 148,500
= $436,500
50 Hour Week
Cashflows to Tom = EBIT - Interest
= 695,000 - 148,500
= $546,500
If Equity is Issued;
Company is worth $3.55 million but a $1.65 million investment is needed. If equity is issued for the cash, Tom will only own $3.55 million out of the ne total value.
= 3.55/(3.55 + 1.65)
= 3.55/5.2
40 Hour Week
Cash flow to Tom = EBIT * Tom ownership
= 585,000 * 3.55/5.2
= $399,375
50 Hour Week
= 695,000 * 3.55/5.2
= $474,471.15
b. Under Debt Issue because more cashflow of $546,500 will be due to him.
International trade currently involves about ______________ worth of goods and services thundering around the globe. Group of answer choices
Answer:
$20 trillion
Explanation:
International trade is the trade that arises between different countries. Because of international trade, many various countries could be purchased the goods and services i.e. not be produced in those countries
Here the international trade consists of $20 trillion goods and services enormous around the globe
Hence, the correct answer is $20 trillion
The interest rate in the federal funds market:_________.
a. is an interest rate that is largely unaffected by the policies of the Fed.
b. will fall if the Fed sells bonds and, thereby, reduces the reserves available to banks.
c. is determined by the imposition of price controls imposed by the Fed.
d. rises when the quantity of funds demanded by banks seeking additional reserves exceeds the quantity supplied by banks with excess reserves.
Answer:
Federal Funds Rate:
d. rises when the quantity of funds demanded by banks seeking additional reserves exceeds the quantity supplied by banks with excess reserves.
Explanation:
Federal funds rate is the target interest rate set by the FOMC (Federal Open Market Committee) at which commercial banks with deficit reserves borrow and banks with surplus reserves lend their excess reserves to each other overnight without collateral. The rates are set eight times a year in line with prevailing economic situations. The rates are lowered to boost economic growth and reduce unemployment by increasing money supply. They are increased to check inflation.
Bradshaw Inc. is contemplating a capital investment of $88,000. The cash flows over the project’s four years are: Year Expected Annual Cash Inflows Expected Annual Cash Outflows 1 $30,000 $12,000 2 45,000 20,000 3 60,000 25,000 4 50,000 30,000 The cash payback period is
Answer: 3.50 years
Explanation:
The Payback period is a method of checking the viability of a project. It measures how long it will take a project to pay back it's initial investment.
Formula is;
= Year before payback + Cash remaining till payback/ Cash inflow in year of payback
Year 1 Net Cash Inflow
= Cash Inflow - Cash Outflow
= 30,000 - 12,000
= $18,000
Year 2
= 45,000 - 20,000
= $25,000
Year 3
= 60,000 - 25,000
= $35,000
Year 4
= 50,000 - 30,000
= $20,000
Year 1 + 2 + 3
= 18,000 + 25,000 + 35,000
= $78,000
Amount remaining till payback
= Investment - Cash inflow so far
= 88,000 - 78,000
= $10,000
= Year before payback + Cash remaining till payback/ Cash inflow in year of payback
= 3 + 10,000/20,000
= 3.50 years
6. If negative float appears on a partial path (until certain activity), the most likely explanation is: a. One or more activities on that path is running late. b. The project is not meeting its expected completion date. c. The project is meeting its expected completion date but a certain activity/ event on that path is not meeting its expected completion date. d. It must be a software glitch.
Answer:
c. The project is meeting its expected completion date but a certain activity/ event on that path is not meeting its expected completion date.
Explanation:
Float is the total amount of a project delay. A negative float means a delay longer than the intended or allowed float at a given time. This means that a float is an activity that takes longer than initially thought. Some projects have built-in standard floats, which are calculated based on previous experience of similar projects, with allowances given for some different expected backstory.When money serves as a common denominator for measuring the exchange rates among goods and services, it performs as a
Answer:
Standard of value.
Explanation:
When money serves as a common denominator for measuring the exchange rates among goods and services, it performs as a standard of value.
Standard of value is an agreed-upon worth for a transaction in a country's medium of exchange, such as the U.S. dollar or Mexican peso. A standard of value allows all merchants and economic entities to set uniform prices for goods and services
Creative Sports Design (CSD) manufactures a standard-size racket and an oversize racket. The firm’s rackets are extremely light due to the use of a magnesium-graphite alloy that was invented by the firm’s founder. Each standard-size racket uses 0.125 kilograms of the alloy and each oversize racket uses 0.4 kilograms; over the next two-week production period only 80 kilograms of the alloy are available. Each standard-size racket uses 10 minutes of manufacturing time and each oversize racket uses 12 minutes. The profit contributions are $10 for each standard-size racket and $15 for each oversize racket, and 40 hours of manufacturing time are available each week. Management specified that at least 20% of the total production must be the standard-size racket. How many rackets of each type should CSD manufacture over the next two weeks to maximize the total profit contribution? Assume that because of the unique nature of their products, CSD can sell as many rackets as they can produce.
Answer:
165 oversize rackets = 32 machine hours (79.71% of total production)
42 standard size rackets = 7 machine hours (20.29% of total production)
total profit contribution = (165 x $15) + (42 x $10) = $2,895
Explanation:
materials machine hours profit
standard size 0.125 kg 1/6 $10
oversize 0.4 kg 1/5 $15
constraints 80 kilograms of materials
40 hours of manufacturing
profit per machine hour:
standard size $10 x 6 = $60 x 40 hours = $2,400 (total possible production = 240 rackets)
oversize $15 x 5 = $75 x 40 hours = $3,000 (total possible production = 200 rackets)
profit per kilogram of alloy:
standard size $10 / 0.125 = $80 x 80 kgs = $6,400 (total possible production = 480 rackets)
oversize $15 / .4 = $37.50 x 80 hours = $3,000 (total possible production = 200 rackets)
since the most important constraint is the manufacturing hours available, the company should try to produce the products that yield the highest contribution margin per machine hour. In this case, at least 20% of total production must be standard size rackets, so the remaining 80% should be oversize rackets that yield a higher profit.
165 oversize rackets = 32 machine hours (79.71% of total production)
42 standard size rackets = 7 machine hours (20.29% of total production)
total manufacturing time = 40 hours
if we produce 166 oversize rackets and 41 standard size rackets, total manufacturing time will exceed 40 hours (40.03 hours exactly).