Answer:
D. Both A and B
Explanation:
Recognition Lags in fiscal policy refers to the time lag a country has in clearly visiting the problems faced, when the policy is formed.
As for example the country government might not be able to recognise the problem of unemployment up to a certain identified amount. with automatic stabilisers the authorities can collect automatic data for this issue, and expected time lag will decrease and become minimal.
Implementation lag occurs when the authorities see the adversity of a problem in economy and implements a fiscal policy but it is not implemented in an effective manner, and the results are thus lagged.
Accordingly, automatic stabilisers will improve such time lag by providing the main areas of the country where the adversity of a problem is maximum.
A given inventory item has a per-year holding cost of $500. One method of shipping this item is three days faster than the other, but it is $2.50 more per unit. Using the slower method would be __________ more expensive overall than using the faster method.
Answer: $1.61
Explanation:
From the question, we are informed that a given inventory item has a per-year holding cost of $500 and that one method of shipping this item is three days faster than the other, but it is $2.50 more per unit.
Using the slower method would be 1.61 more expensive overall than using the faster method. To do this, the holding cost has to be multiplied by speed differential. From the result gotten, we will now divide by 365 since 365 days make a year.
After the figure had been gotten, we will ow compare it to the actual difference of the shipping cost.
A middleman is a person who
A) specializes in arranging trades and selling, guaranteeing, and servicing items traded.
B) acts as a middle person between the top management of a business firm and the hourly employees who actually produce the goods and services.
C) adds to the seller's expense and the buyer's buying price without providing a service to either.
D) levies a tax on private sector activity and uses the funds to support government activities.
Answer:
A
Explanation:
A middleman is a link between a producer and a consumer. Middlemen includes wholesalers and retailers
Some of the functions of middlemen include
1. They provide information to the producers about consumers' tastes
2. they market producers goods and services
3. Middlemen render financial help to manufacturers.
Activity rates from Quattrone Corporation's activity-based costing system are listed below. The company uses the activity rates to assign overhead costs to products: Activity Cost Pools Activity Rate Processing customer orders $96.72 per customer order Assembling products $3.43 per assembly hour Setting up batches $53.23 per batch Last year, Product F76D involved 5 customer orders, 528 assembly hours, and 22 batches. How much overhead cost would be assigned to Product F76D using the activity-based costing system
Answer:
Total allocated overhead= $3,465.71
Explanation:
Giving the following information:
Processing customer orders $96.72 per customer order
Assembling products $3.43 per assembly hour
Setting up batches $53.23 per batch
Product F76D:
5 customer orders
528 assembly hours
22 batches
To assign overhead, we need to use the following formula:
Allocated MOH= Estimated manufacturing overhead rate* Actual amount of allocation base
Product F76D:
Processing= 96.72*5= $483.6
Assembling= 3.43*528= 1,811.04
Setting up batches= 53.23*22= 1.171.07
Total allocated overhead= $3,465.71
Dirt is not dirt when it comes to baseball fields.About two-thirds of the pro baseball fields got their dirt from a dirt farm in New Jersey called Partac Peat.The company markets a secret mix for the infield (resilient),the warning track (extra crunchy),and the pitcher's mounds (firm).Mounds come in red,brown,orange,and gray colours.Roger Bossard,the White Sox head groundskeeper,scouted nationwide for dirt before settling on the mix provided by Partac Peat.(He uses sand under the grassy areas of the playing field. )
-Refer to Baseball Dirt.Some of the dirt sold by Partac Peat goes to make clay tennis court surfaces.As the number of people playing tennis increases,so does the demand for new clay courts and,therefore,the demand for Partac Peat clay.This occurs because the demand for Partac Peat is which of the following?
A) inelastic
B) intangible
C) heterogeneous
D) derived
Answer: D) derived
Explanation:
Derived demand refers to a situation where the demand for a good or service is as a result of the demand in another good or service. For example, if the demand for mobile phones increases, the demand for lithium batteries will increase as well.
In the example, Partac Peat clay demand increases as a result of an increase in the demand for tennis playing therefore it is a derived demand based on the demand for the tennis.
Colby & Company bonds pay semi-annual interest of $50. They mature in 15 years and have a par value of $1,000. The market rate of interest is 8%. The market value of Colby Bonds is: (round to nearest dollar)
Answer:
Price of bond = $ 1,172.92
Explanation:
The value of the bond is the present value (PV) of the future cash receipts expected from the bond. The value is equal to present values of interest payment plus the redemption value (RV).
Value of Bond = PV of interest + PV of RV
The value of bond for Colby & Company can be worked out as follows:
Step 1
PV of interest payments
Semi annul interest payment = 50
Semi-annual yield = 8%/2 = 4% per six months
Total period to maturity (in months)
= (2 × 15) = 30 periods
PV of interest =
50 × (1- (1+0.04^(-30)/0.04)= 864.60
Step 2
PV of Redemption Value
= 1,000 × (1.04)^(-30) =308.318
Step 3:
Price of bond
= 864.60 + 308.318 = $1,172.92
Price of bond = $ 1,172.92
What was the weighted average interest rate Colgate faced on its short-term borrowings in 2013? Enter with 1 decimal place and with % sign (Ex: 9.9%)
Answer:
The weighted average interest rate that Colgate faced on its short-term borrowings in 2013 was:
2.2%.
Explanation:
On page 62 of its 10-K annual report for the fiscal year ended December 31, 2013, it specifically reported that "the weighted-average interest rate on short-term borrowings of $13 in 2013 and $54 in 2012 included in Notes and loans payable in the Consolidated Balance Sheets as of December 31, 2013 and 2012 was 2.2% and 1.0%, respectively." To calculate the weighted-average interest rate, we multiply each loan amount by its interest rate to obtain the "per loan weight factor." Then add the per loan weight factors together. Add the loan amounts together. Divide the "total per loan weight factor" by the "total loan amount," and then multiply by 100 to calculate the weighted average.
Assume you have $1,000,000 to invest Current spot rate of the pound = $1.30 90 day forward rate of pound = $1.28 3 month deposit rate in US = 3% 3 month deposit rate in Great Britain = 4% If you use covered interest arbitrage for a 90-day investment, what will be the amount of U.S.dollars you will have after 90 days? Show your work.
Answer:
$1,024,000
Explanation:
with your $1,000,000 you can currently buy $1,000,000 / $1.3 = £769,231
then you invest your £769,231 and receive = £769,231 x (1 + 4%) = £800,000
since the forward rate for three months = $1.28, then at the end of the three months you will have £800,000 x $1.28 = $1,024,000
if you simply invested your money in the US, you would earned more money ? $1,000,000 x (1 + 3%) = $1,030,000. You lower gains are the result of the British pound depreciating against the dollar.
Zhao Co. has fixed costs of $286,200. Its single product sells for $163 per unit, and variable costs are $110 per unit. Compute the level of sales in units needed to produce a target (pretax) income of $106,000.
Answer:
The level of sales in units is 7,400
Explanation:
The computation of the level of sales in units is shown below:
= (Fixed cost + target income) ÷ (Contribution margin per unit)
= ($286,200 + $106,000) ÷ ($163 per unit - $110 per unit)
= $392,200 ÷ $53 per unit
= 7,400 units
The Contribution margin per unit is
= Selling price per unit - variable cost per unit
Henec, the level of sales in units is 7,400
On October 17, Nikle Company purchased a building and a plot of land for $750,000.
The building was valued at $500,000 while the land carried a value of $250,000.
Nikle paid $300,000 down in cash and signed a note payable for the balance.
Prepare the journal entry for this transaction.
(If an amount box does not require an entry, leave it blank.)
Answer:
the journal entry for this transaction is :
Building $500,000 (debit)
Land $250,000 (debit)
Cash $300,000 (credit)
Note Payable $450,000 (credit)
Explanation:
Recognize separately the assets purchased as : Building $500,000 and Land $250,000 and also recognize the Liability - Note Payable to the amount of $450,000 - the balance remaining after a cash settlement of the purchase price of $300,000.
Executive recruiting director Owen Williams regularly uses his smartphone and the mobile version of LinkedIn to post job listings and connect to potential candidates. This is an example of ________ in action.
Answer:
mobile recruiting
Explanation:
Mobile recruiting refers to a process in which mobile devices are used to find potential candidates for a position through mobile career sites and apps. According to this, the answer is that this is an example of mobile recruiting because Owen Wilson is using his mobile device and the mobile version of LinkedIn to find candidates.
Caterpillar,the manufacturer of tractors and other earthmoving equipment,has an extremely high market share,which means customers seek the dealers out regardless of where they are.There are approximately 50 Caterpillar dealers in the United States--one in each state.From this information,you can surmise that Caterpillar uses _____ distribution.
A) selective
B) premium
C) intensive
D) exclusive
E) inclusive
Answer: exclusive
Explanation:
From the information that is provided in the question, we can deduce that Caterpillar uses exclusive distribution. In exclusive distribution, the dealers are given an exclusive right whereby they are allowed to sell the products at a certain geographical location
Since we are told that the company has an extremely high market share,which means customers seek the dealers out regardless of where they are. Then the answer is exclusive distribution.
Prior to the merger, Firm A has $1,250 in total earnings with 750 shares outstanding at a market price per share of $42. Firm B has $740 in total earnings with 220 shares outstanding at $21 per share. Assume Firm A acquires Firm B via an exchange of stock of 0.5 share of A’s stock for each share of B's stock. Both A and B have no debt outstanding and the merger does not create any synergy. What will the earnings per share of Firm A be after the merger? A) $2.10 B) $1.67 C) $3.36 D) $2.05 E) $2.31
Answer:
E) $2.31
Explanation:
Shares offered to Firm B = Shares outstanding * 0.5
= 220 * 0.5
= 110 shares
Total shares of firm A after merger = Shares outstanding before merger + Shares offered to Firm B
= 750 + 110
= 860 shares
Total earnings of firm A after merger = $1,250 + 740
Total earnings of firm A after merger = $1,990
Earnings per share of firm A after merger = Total earnings of firm A after merger / Total shares of firm A after merger
Earnings per share of firm A after merger = $1,990 / 860
Earnings per share of firm A after merger = $2.31 per share
You bought Sumsung stock for $45 on April 1. The stock paid a dividend of $2 on July 1, and had a price of $55. It is now Oct. 1, and the stock price is $50. Treasury bills yield 1%.
1. What was the arithmetic average quarterly return?
2. What was the standard deviation of quarterly returns?
3. What's your best guess for the Sharpe ratio of Samsung stock for the next quarter?
Answer:
1. the arithmetic average quarterly return = 8.79%
2. the standard deviation of quarterly returns = 17.8788%
3. the Sharpe ratio of Samsung stock for the next quarter= 0.435593
Explanation:
From the given question;
We use the EXCEL SOFTWARE TO CALCULATE THE:
the arithmetic average quarterly return
the standard deviation of quarterly returns &
the Sharpe ratio of Samsung stock for the next quarter
In the two diagram attached below, the first show the data entry and the output and the second diagram show how we compute the cell reference to estimate the answers.
. The disadvantages of a centralized organizational structure include A. lengthening response times and discouraging lower-level managers and rank-and-file employees from exercising initiative. B. a loss of top management control. C. putting too much decision making authority in the hands of lower-level company personnel. D. making it hard to fix accountability when things do not go well and putting the organization at risk when bad decisions are made. E. impeding cross-unit coordination and capture of strategic fits.
Answer:
A. lengthening response times and discouraging lower-level managers and rank-and-file employees from exercising initiative.
Explanation:
An organization with a centralized structure is one whose decision-making process is restricted to professionals at the top of the hierarchy, that is, only the leader of the organization is the one who will make the decisions inherent to the business.
This type of structure usually exists in organizations whose businesses are less flexible and need greater control and coordination of organizational processes.
Therefore, there are some disadvantages of centralization, one of which is described in the alternative A: lengthening response times and discouraging low-level managers and ordinary employees from exercising the initiative.
Because as the leader may be far from the problem to be decided, it will take more time to make the necessary judgments for decision making. Employees are also less encouraged to contribute with innovative solutions, since the decision-making process is only in the hands of the leader of the company.
Which of the following strategies yields positive profits when the stock price is low but not when the stock price is high?
a. Straddle
b. Bullish spread
c. Protective put
d. bearish spread
Answer: d. bearish spread
Explanation:
With a bearish spread, the investor believes the market to be heading for a price decline in the stock of interest. They will therefore purchase a put option on it. However, they also want to reduce the cost of the transaction so what they will do is to simultaneously buy 2 put options for the same asset for the same date of expiration but with different exercise prices.
If the price of the stock then falls, they will make a profit on both aand reduce costs.
Which of the following is an example of U.S. foreign direct investment and by itself increases U.S. net capital outflow?
A. A Swiss bank buys bonds issued by a U.S. company.
B. A French restaurant opens and operates a restaurant in New York.
C. A U.S. electronics company opens and operates a new factory in India.
D. A U.S. pension fund buys bonds issued by the Japanese government.
Answer: C. A U.S. electronics company opens and operates a new factory in India.
Explanation:
In Foreign direct investment, a international company owns and controls the affairs of a company in another country hence the term direct. This therefore is asking for which scenario shows a US company in control of a company in another country and that would be the U.S. electronics company opening and operating a new factory in India.
This will increase U.S. net capital outflow which is defined as the amount of money flowing out of the United States to be invested in another country. As the Electronics company had to set up in India, they invested in India thereby increasing U.S. net capital outflow.
A firm facing a price of $15 in a perfectly competitive market decides to produce 100 widgets. If its marginal cost of producing the last widget is $12 and it is seeking to maximize profit, the firm should
Answer:
Produce more widgets.
Explanation:
Given the price charge by the competitive firm is = $15
The unit produced = 100
The marginal cost of the last unit = $12
The firm should produce more widget because in the competitive market the firm charge the price that is equal to MC. Moreover, in the given question the price is greater than the marginal cost. Therefore, the firm should produce more widgets in order to reach the condition “P=MC”.
The combo box (form control) option in macros can be used to substitute for ___ when doing scenario analysis.
Answer:
Data validation
Explanation:
Here the combo box determines the validating the data and also provides the data list that is to be chosen from the given set of the data. Now if can be chosen from the drop-down list with respect to combo box also the motive would remain the same as it comes under data validation option
Hence, the correct option is data validation
Benson, Inc., has sales of $38,530, costs of $12,750, depreciation expense of $2,550, and interest expense of $1,850. The tax rate is 21%. What is the operating cash flow, or OCF?
Answer:
$21,290.1
Explanation:
The operating cash flow is computed as seen below;
Sales. $38,530
Less: Costs ($12,750)
$25,780
Less:depreciation ($2,550)
EBIT. $23,230
Less: Interest expense ($1,850)
$21,380
Less : 21% taxes ($4,489.9)
Earnings after taxes $16,890.1
Operating cash flow = EBIT + Depreciation - Taxes
= $23,230 + $2,550 - $4,489.9
= $21,290.1
________ is the model in which an effective leader makes desirable rewards available, clarifies how employees can achieve objectives, and provides them support in doing so.
Answer:
House's path-goal model.
Explanation:
Robert House developed the theory of the objective-path, which is a theory that supports the servile leadership style, because House believed that the behavior of the leader is capable of directly interfering in the behavior of the collaborators, therefore, the leaders must be the biggest suppliers of essential support and resources for employees to carry out their work effectively.
He has developed 4 different leadership styles that leaders must have to help employees achieve their goals and objectives.
They are:
Directive, Supportive, Participative, Achievement-oriented.These four styles will provide the essential guidelines and conduct for being a servant and collaborative leader.
The following are transactions and events of the general fund of Sycamore Hospital, a not-for-profit entity, for the 20X6 fiscal year ending December 31, 20X6.
1. Provided a total of $6,600,000 in patient services.
2. Had total operating expenses of $5,998,000, as follows:
Nursing services $2,100,000
Other professional expenses 1,280,000
Fiscal services 230,000
General services 1,520,000
Bad debts 138,000
Administration 250,000
Depreciation 480,000
Accounts credited for operating expenses other than depreciation:
Cash $4,794,000
Allowance for Uncollectibles 138,000
Accounts Payable 213,000
Inventories 210,000
Donated Services 163,000
3. Allowed contractual adjustments of $210,000 as deductions from gross patient revenue.
4. Received a transfer of $200,000 from specific-purpose funds for payment of approved operating costs in accordance with the terms of the restricted gift.
5. Received a transfer of $230,000 from the temporarily restricted plant fund to purchase new equipment for the hospital.
6. Received $150,000 of unrestricted gifts.
7. Collected accounts receivable except for $65,000 written off.
8. Reported a $90,000 increase in the market value of the investment securities portfolio of the general fund from the beginning of the period. The board designated this entire income for other than current operations.
Required:
Prepare journal entrie.
Answer:
1. Dr Accounts receivable 6,600,000
Cr Patient services revenue 6,600,000
2. Dr Nursing services expense 2,100,000
Dr Other professional services expense 1,280,000
Dr Fiscal services expense 230,000
Dr General services expense1,520,000
Dr Bad debts expense 138,000
Dr Administration expense250,000
Dr Depreciation expense 480,000
Cr Cash 4,794,000
Cr Allowance for uncollectibles 138,000
Cr Accumulated depreciation 480,000
Cr Accounts payable 213,000
Cr Inventory 210,000
Cr Donated services 163,000
3. Dr Patient services revenue210,000
Cr Accounts receivable210,000
4. Dr Cash 200,000
Cr Net assets released from program use restrictions 200,000
5. Dr Cash 230,000
Cr Net assets released from equipment acquisition restriction 230,000
6.Dr Cash 150,000
Cr Contributions-Unrestricted 150,000
7. Dr Cash 6,455,000
Cr Allowance for uncollectibles 65,000
Cr Accounts receivable 6,390,000
8. Dr Investment securities 90,000
Cr Unrealized holding gain on investment securities 90,000
Explanation:
Preparation of the Journal entries for Sycamore Hospital.
1. Since we were told that the company Provided a total of the amount of $6,600,000 in patient services this means that the transaction will be recorded as:
Dr Accounts receivable 6,600,000
Cr Patient services revenue 6,600,000
2. Based on the information given we were told that the company had total operating expenses of the amount of $5,998,000 which means that the transaction will be recorded as:
Dr Nursing services expense 2,100,000
Dr Other professional services expense 1,280,000
Dr Fiscal services expense 230,000
Dr General services expense1,520,000
Dr Bad debts expense 138,000
Dr Administration expense250,000
Dr Depreciation expense 480,000
Cr Cash 4,794,000
Cr Allowance for uncollectibles 138,000
Cr Accumulated depreciation 480,000
Cr Accounts payable 213,000
Cr Inventory 210,000
Cr Donated services 163,000
3. Since we were told that Allowed contractual adjustments was the amount of $210,000 which is a deductions from gross patient revenue, which means that the transaction will be recorded as:
Dr Patient services revenue210,000
Cr Accounts receivable210,000
4. Based on the information given we were told that the company received a transfer of the amount of $200,000 for the payment of approved operating costs which means that the transaction will be recorded as:
Dr Cash 200,000
Cr Net assets released from program use restrictions 200,000
5. Since the company received a transfer of the amount of $230,000 from the temporarily restricted plant fund in order to purchase new equipment for the hospital, this means that the transaction will be recorded as:
Dr Cash 230,000
Cr Net assets released from equipment acquisition restriction 230,000
6.Since the company received the amount of $150,000 of unrestricted gifts, this means that the transaction will be recorded as;
Dr Cash 150,000
Cr Contributions-Unrestricted 150,000
7. Since the company collected accounts receivable except for the amount of $65,000 which was written off, this means that the transaction will be recorded as:
Dr Cash 6,455,000
(6,390,000 +65,000)
Cr Allowance for uncollectibles 65,000
Cr Accounts receivable 6,390,000
(6,600,000-210,000)
8. Based on the information given we were told that the company reported the amount of $90,000 as an increase in the market value, this means that the transaction will be recorded as:
Dr Investment securities 90,000
Cr Unrealized holding gain on investment securities 90,000
For a portfolio that is equally invested in Johnson & Johnson's and Walgreen's stock, calculate: a. The expected return. b. The volatility (standard deviation).
Full question attached
Answer:
A. 8.6%
B. 14.09%
Explanation:
A) given that portfolio weights =50% each
Expected return= w*r+w*r where w is portfolio weight and r is return on each asset:
=0.50*0.078+0.50*0.094= 0.086
=8.6%
B) The volatility (standard deviation)
=√w²*std²+w²*std²+2*w*w*std*std*corr
=√0.50²*0.157²+0.50²*0.203²+2*0.50*0.50*0.157*0.203*0.213
=0.1409
=14.09%
Connecticut, Inc. uses the indirect method to prepare its statement of cash flows. Refer to the following portion of the comparative balance sheet: Connecticut, Inc. Comparative Balance Sheet December 31, 2019 and 2018 2019 2018 Increase / (Decrease) Cash Accounts Receivable () Merchandise Inventory Plant and Equipment Accumulated DepreciationPlant and Equipment () () () Total Assets Additional information provided by the company includes the following: 1. Equipment was purchased for with cash. 2. Equipment with a cost of and accumulated depreciation of was sold for . What was the amount of net cash provided by (used for) investing activities?
Answer:
Net cash used by investing activities -$16,000
Explanation:
The computation of the amount of net cash provided or used by investing activities is shown below:
Equipment purchase for cash -$66,000
Proceeds from the sale of equipment $50,000
Net cash used by investing activities -$16,000
The purchase is a cash outflow so it is in negative sign while the sale is cash inflow so it is to be shown in a positive sign
All of the following are weaknesses of the payback method except:_______.
a. it is easy to calculate
b. it ignores cash flow beyond the payback period
c. present value of cash flows is not used
d. none of the above
Answer:
Correct Answer:
d. none of the above
Explanation:
Payback method is a simple accounting method used to projects incoming cash flows from a given project and identifies the break even point between profit and paying back invested money for a given process.
high-end whole home electronic systems. The company provides a one-year warranty for all products sold. The company estimates that the warranty cost is $310 per unit sold and reported a liability for estimated warranty costs $10.6 million at the beginning of this year. If during the current year, the company sold 59500 units for a total of $324 million and paid warranty claims of $12120000 on current and prior year sales, what amount of liability would the company report on its balance sheet at the end of the current year?
Answer:
$16,925,000
Explanation:
The company estimates that the warranty cost is $310 per units sold
The estimated warranty costs at the beginning of the year is $10,600,000
In the current year, the company sold 59,500 units
The company paid warranty claims of $12120000
Therefore, the amount of liability that should be reported at the end of the current year can be calculated as follows
= 10,600,000+(59,500×310)-$12,120,000
= $10,600,000+18,445,000 -$12,120,000
= $29,045,000-$12,120,000
= $16,925,000
Hence the amount of liability that should be reported on the balance sheet at the end of the current year is $16,925,000
Hogan Inc. reported 2019 earnings per share of $3.26 and had no discontinued operations. In 2020, earnings per share on income from continuing operations was $2.99, and earnings per share on net income was $3.49. Do you consider this trend to be favorable? Why or why not?
Answer:
This trend is considered unfavorable
Explanation:
It is given that the firm earning per share in 2019 was $3.26 and had no discontinued operation. It means that earnings per share on income from continuing operation in 2019 was $3.26. In 2020, earning per share on income from continuing operation was $2.99 only. It evidences that earnings per share on income from continuing operations has declined by $0.47 (from $3.26 to $2.99) and so it (this trend) is considered unfavorable. We need to also understand that in 2020, earning per share on net income of $3.49 indicates that the firm has earned profit on the discontinued operation. It is not a regular activity to consider while analyzing firm profitability trend.
During February, assets increased by 87000 and liabilities increased by 31000 . Equity must have:___________.
a. increased by 56000
b. increased by 118000
c. decreased by 56000
d. decreased by 118000
Answer:
a. increased by $56,000
Explanation:
General accounting equation ;
Assets = Liabilities + Owners equity
Owners equity = Assets - Liabilities.
Therefore,
Increase in stockholder's equity
= $87,000 - $31,000
= $56,000
Rehmer Corporation is working on its direct labor budget for the next two months. Each unit of output requires 0.06 direct labor-hours. The direct labor rate is $8.00 per direct labor-hour. The production budget calls for producing 5,300 units in June and 5,800 units in July. Required: Prepare the direct labor budget for the next two months, assuming that the direct labor work force is fully adjusted to the total direct labor-hours needed each month. (Round your answers to 2 decimal places.)
Answer:
Results are below.
Explanation:
Giving the following information:
Each unit of output requires 0.06 direct labor-hours.
The direct labor rate is $8.00 per direct labor-hour.
The production budget calls for producing 5,300 units in June and 5,800 units in July.
Direct labor budget June:
Direct labor hours= 5,300*0.06= 318
Direct labor cost= 318*8= $2,544
Direct labor budget July:
Direct labor hours= 5,800*0.06= 348
Direct labor cost= 348*8= $2,784
Kirby, Inc. records a sale with a gross margin of $1,400. Which one of the following statements correctly describes the effect of such a sale on its balance sheet?
a. Common stock increases by $1,400
b. The sales revenue account increases by $1,400
c. The gross margin account increases by $1,400
d. The retained earnings account increases by $1,400
Answer:
Correct Answer:
d. The retained earnings account increases by $1,400
Explanation:
Gross margin in sales is the sales revenue a company retains after incurring the direct costs associated with producing the goods it sells, and the services it provides. For the Kirby Inc with gross margin of $1400, it shows that, its sales revenue retained after expenses is $1,400.
Bramble Corp. purchased a delivery truck for $38,800 on January 1, 2019. The truck has an expected salvage value of $1,800, and is expected to be driven 100,000 miles over its estimated useful life of 8 years. Actual miles driven were 14,700 in 2019 and 12,900 in 2020. (a1) Calculate depreciable cost per mile under units-of-activity method. (Round answer to 2 decimal places, e.g. 0.50.)
Answer:
$0.37
Explanation:
Depreciable cost = cost of asset - salvage value
$38,800 - $1,800 = $37,000
Depreciable cost per mile = $37,000 / 100,000 = $0.37