Answer:
E) Relational and identity issues are rarely important in negotiations.
Explanation:
Negotiations between conflicting parties involve people, and whenever people are involved, the possibility of personal issues getting involved always exist. Sometimes a good relationship between the negotiating parties can help to solve the problem more swiftly, but bad relationships can result in exactly the opposite.
Kropf Inc. has provided the following data concerning one of the products in its standard cost system. Variable manufacturing overhead is applied to products on the basis of direct labor-hours.
Inputs Standard Quantity or Hours Standard Price or Rate
per Unit of Output
Direct materials
7.60 liters $ 7.20 per liter
Direct labor 0.60 hours 23.70 per hour
Variable manufacturing overhead 0.60 hours $ 6.10 per hour
The company has reported the following actual results for the product for September:
Actual output 9,800 units
Raw materials purchased 75,200 liters
Actual cost of raw materials purchased $ 564,500
Raw materials used in production 74,500 liters
Actual direct labor-hours 5,500 hours
Actual direct labor cost $ 135,302
Actual variable overhead cost $ 29,314
Required:
a. Compute the materials price variance for September.
b. Compute the materials quantity variance for September.
c. Compute the labor rate variance for September.
d. Compute the labor efficiency variance for September.
e. Compute the variable overhead rate variance for September.
f. Compute the variable overhead efficiency variance for September.
Answer:
Instructions are below.
Explanation:
Giving the following information:
Direct materials 7.60 liters $ 7.20 per liter
Direct labor 0.60 hours 23.70 per hour
Variable manufacturing overhead 0.60 hours $ 6.10 per hour
Actual output 9,800 units
Raw materials purchased 75,200 liters
Actual cost of raw materials purchased $ 564,500
Raw materials used in production 74,500 liters
Actual direct labor-hours 5,500 hours
Actual direct labor cost $ 135,302
Actual variable overhead cost $ 29,314
1) To calculate the direct material price and quantity variance, we need to use the following formulas:
Direct material price variance= (standard price - actual price)*actual quantity
Actual pirce= 564,500/75,200= 7.51
Direct material price variance= (7.2 - 7.51)*75,200
Direct material price variance= $23,312 unfavorable
Direct material quantity variance= (standard quantity - actual quantity)*standard price
Direct material quantity variance= (7.6*9,800 - 74,500)*7.2
Direct material quantity variance= $144 favorable
2) To calculate the direct labor rate and efficiency variance, we need to use the following formulas:
Direct labor time (efficiency) variance= (Standard Quantity - Actual Quantity)*standard rate
Standard quantity= 0.6*9,800= 5,880
Direct labor time (efficiency) variance= (5,880 - 5,500)*23.7
Direct labor time (efficiency) variance= $9,006 favorable
Direct labor rate variance= (Standard Rate - Actual Rate)*Actual Quantity
Actual rate= 135,302/5,500= 24.6
Direct labor rate variance= (23.7 - 24.6)*5,500
Direct labor rate variance= $4,950 unfavorable
3) To calculate the variable overhead rate and efficiency variance, we need to use the following formulas:
Manufacturing overhead rate variance= (standard rate - actual rate)* actual quantity
Actual rate= 29,314/5,500= 5.33
Manufacturing overhead rate variance= (6.10 - 5.33)*5,500
Manufacturing overhead rate variance= $4,235 favorable
variable overhead efficiency variance= (Standard Quantity - Actual Quantity)*Standard rate
variable overhead efficiency variance= (0.6*9,800 - 5,500)*6.1
variable overhead efficiency variance= $2,318 favorable
Chang Industries has 2,000 defective units of product that already cost $14 each to produce. A salvage company will purchase the defective units as is for $5 each. Chang's production manager reports that the defects can be corrected for $6 per unit, enabling them to be sold at their regular market price of $21. The $14 per unit is a: Multiple Choice Sunk cost. Out-of-pocket cost. Period cost. Incremental cost. Opportunity cost.
Answer:
The correct answer to the following question will be Option A "Sunk cost".
Explanation:
A sunk cost includes money also now invested and therefore not recoverable. In industry, the aphorism that one should "probably waste money to make profits" is expressed in the sunken cost trend.It differs from the potential risks that a company will face, including such inventory purchasing costs as well as drug price choices. 2000 Default units including its drug were already manufactured at $14, this expense was already accrued and seems to be negligibleThe other choices corresponding to the specified situation are not. So the proper answer is Alternative A.
What's the total resistance of a circuit that contains three 30 Ω resistors connected in series
Answer:
The total resistance is 90 Ω
Explanation:
When the circuit are connected in the series then we can determined the total resistance of the circuit by the formula that are mention below .
[tex]R=R1+ R2 +R3[/tex] -------Equation 1
Here [tex]R1=R2=R3=30 \ ohm[/tex]
Now putting the value of R1, R2 and R3 in the Equation 1
So
[tex]R=30 + 30 + 30\\[/tex]
Therefore the total resistance of the circuit =90 Ω
Metlock Industries acquired two copyrights during 2020. One copyright related to a textbook that was developed internally at a cost of $9,300. This textbook is estimated to have a useful life of 3 years from September 1, 2020, the date it was published. The second copyright (a history research textbook) was purchased from University Press on December 1, 2020, for $40,000. This textbook has an indefinite useful life.
Required:
a) How should these two copyrights be reported on Metlock’s balance sheet as of December 31, 2020?
Answer:
The first book will not be reported on the balance sheet, but the second copyright will be reported at the full purcahse price.
Explanation:
1. A textbook that was developed internally: The $9,300 cost incurred must be expensed. As a result of this. the copyright will only be reported on the income statement but not on the balance sheet.
2. The second copyright (a history research textbook): The $40,000 purchase cost of this will be reported on the balnace sheet in full. But there will not be amortization since it has an indefinite useful life.
J&E Enterprisesi s considering and investment which produces no cash flows for the first year. In the second year, the cash inflow is $47,000. This inflow will increase to $198,000 and then $226,000 for the following two years, respectively, before ceasing permanently. The initial investment will cost $318,000. The firm requires a 15.5 percent rate of return and has a required discounted payback period of three years. Should the project be accepted. Why or why not?
Year Cash flow Discounted cash flo Cumulative cash flo
1 $0 $0.00 $0.00
2 $47,000 $35,321.72 $35,231.72
3 $198,000 $128,504.77 $163,736.49
4 $226,000 $126,993.21 $290,729.70
Answer:
No
The amount of cumulative discounted cash flows is less than the the amount invested in the project. This means that the project is unprofitable.
Explanation:
The discounted cash flow method calculates how long it takes to recover the amount invested in a project from its cumulative discounted cash flow.
A project should be accepted if the amount invested in the project is recovered from the cumulative discounted cash flow within the period specified by the firm.
The cumulative discounted cash flow, $290,729.70 is less than the amount invested $318,000. So the project shouldn't be accepted.
I hope my answer helps you
Whispering Winds Corp. took a physical inventory on December 31 and determined that goods costing $213,000 were on hand. Not included in the physical count were $35,000 of goods purchased from Coronado Industries, FOB, shipping point, and $26,500 of goods sold to Sunland Company for $31,000, FOB destination. Both the Coronado purchase and the Sunland sale were in transit at year-end.
Required:
1. What amount should Whispering Winds report as its December 31 inventory?
Answer:
Whispering Winds December 31 inventory $ 274,500
Explanation:
FOB shipping point means free on board shipping point. It gives the buyer the ownership of the goods purchased once they are shipped. These in transit are under the buyer's ownership.
FOB destination means that the buyers get the ownership when the goods reach the destination point.These in transit are not under in the buyer's ownership.
Goods costing on hand $213,000
Add Goods purchased FOB, shipping point $ 35000
Add Goods sold to Sunland Company FOB destination $ 26,500
Whispering Winds December 31 inventory $ 274,500
Both purchased and sold are under the Whispering Winds Corp. inventory as they sold ones have not reached the destination and purchased have left the shipping point.
On July 31, 2020, Cullumber Company engaged Minsk Tooling Company to construct a special-purpose piece of factory machinery. Construction begun immediately and was completed on November 1, 2020. To help finance construction, on July 31 Cullumber issued a $324,000, 3-year, 12% note payable at Netherlands National Bank, on which interest is payable each July 31. $216,000 of the proceeds of the note was paid to Minsk on July 31. The remainder of the proceeds was temporarily invested in short-term marketable securities (trading securities) at 10% until November 1. On November 1, Cullumber made a final $108,000 payment to Minsk. Other than the note to Netherlands, Cullumber’s only outstanding liability at December 31, 2020, is a $29,500, 8%, 6-year note payable, dated January 1, 2017, on which interest is payable each December 31.Calculate the interest revenue, weighted-average accumulated expenditures, avoidable interest, and total interest cost to be capitalized during 2020.
Answer:
a. Interest revenue = $2,700
b. Weighted-average accumulated expenditures = $54,000
c. Avoidable interest = $6,480
d. Total interest cost to be capitalized = $6,480
Explanation:
The computation of interest revenue, weighted-average accumulated expenditures, avoidable interest, and total interest cost to be capitalized is shown below:-
a. Interest revenue = (Issued notes payable - Interest payable) × Short-term marketable securities × From 1 Aug to 31 Oct ÷ Total number of months in a year
= ($324,000 - $216,000) × 10% × 3 months ÷ 12
= $108,000 × 10% × 3 months ÷ 12
= $2,700
b. Weighted-average accumulated expenditures = Interest payable × Short-term marketable securities × From 1 Aug to 31 Oct ÷ Total number of months in a year
= $216,000 × 3 months ÷ 12
= $54,000
Here we will not consider 1 Nov because it contains 0 months so answer is $54,000
c. Avoidable interest = Weighted-average accumulated expenditures × Notes payable percentage
= $54,000 × 12%
= $6,480
d. Total interest cost to be capitalized = Weighted-average accumulated expenditures × Notes payable percentage
= $54,000 × 12%
= $6,480
We simply applied the above formulas
In its first year of operations, Gomes Company recognized $28,000 in service revenue, $6,000 of which was on account and still outstanding at year-end. The remaining $22,000 was received in cash from customers. The company incurred operating expenses of $15, 800. Of these expenses, $12,000 were paid in cash; $3, 800 was still owed on account at year-end. In addition, Gomes prepaid $2, 400 for insurance coverage that would not be used until the second year of operations.
(a) Calculate the first year's net earnings under the cash basis of accounting, and calculate the first year's net earnings under the basis of accounting.
(b) Which basis of accounting (cash or accrual) provides more useful information for decision-makers?
Answer:
a. The first year's net earnings under the cash basis of accounting is $7,600 and the first year's net earnings under the basis of accounting is $12,200
b. Accrual basis of accounting provides more useful information.
Explanation:
a. In order to calculate the first year's net earnings under the cash basis of accounting we would have to use the following formula:
Cash basis net earnings = Service revenue (Cash) – Cash expenses – Prepaid expenses
Cash basis net earnings =$22,000 – $12,000 – $2,400
Cash basis net earnings =$7,600
In order to calculate the first year's net earnings under the the basis of accounting we would have to use the following formula:
Accrual basis net earnings = Service revenue – Operating expenses incurred
Accrual basis net earnings= $28,000 – $15,800
Accrual basis net earnings=$12,200
b. Accrual basis of accounting provides more useful information, because in this system revenues are recorded what actually earned and expenses are recorded what actually incurred for earning such revenues. Therefore, it gives better profit picture
On February 1, 2014, Nelson Corporation purchased a parcel of land as a factory site for $280,000. An old building on the property was demolished, and construction began on a new building which was completed on November 1, 2014. Costs incurred during this period are listed below: Demolition of old building $ 20,000 Architect's fees 35,000 Legal fees for title investigation and purchase contract 5,000 Construction costs 1,340,000 (Salvaged materials resulting from demolition were sold for $10,000.)
Nelson should record the cost of the land and new building, respectively, as
Answer:
Land = $295,000
Building = $1,375,000
Explanation:
The computation of cost of the land and new building is shown below:-
Land = Parcel of land + Demolition of old building + Legal fees for title investigation and purchase contract - Salvaged materials resulting from demolition were sold
= $280,000 + $20,000 + $5,000 - $10,000
= $305,000 - $10,000
= $295,000
Building = Architect's fees + Construction costs
= $35,000 + $1,340,000
= $1,375,000
We simply applied the above formulas
1. Assuming that crowding out is not an issue, if Congress increases business taxes at the same time that the Federal Reserve conducts an open market sale, output and price level are likely to change in which of the following ways?
Output / Price Level
A. Increase / Decrease.
B. Decrease / Increase
C. Indeterminate / Decrease.
D. Decrease / Indeterminate.
E. Decrease / Decrease.
2. The election of a new president resulted in a significant increase in business confidence regarding the economy. How will this new confidence impact the loanable funds market in the short run?
Demand for Loanable Funds / Real Interest Rate
A. Increase / Increase.
B. Increase / Decrease.
C. Increase / No Change.
D. Decrease / Decrease.
E. Decrease / Increase
3. When a bank’s excess reserves increase by $375 after $500 was deposited in the bank, the reserve requirement must be
a. 10 percent.
b. 15 percent.
c. 20 percent.
d. 25 percent.
e. 30 percent.
Answer:
1. E. Decrease/ Decrease
The higher taxes on businesses will reduce output because businesses will have less incentive to produce, and therefore, will produce less.
When the Fed conducts an open market sale, it reduces the money supply. This decreases the price level.
2. A. Increase / Increase.
The higher demand for loanable funds due to increased business confidence will also increase the value of the real interest rate.
3. d. 25 percent.
If the excess reserves are $375, then, the required reserves are $125. And $125 is the 25% of $500.
A company is considering the purchase of new equipment for $96,000. The projected annual net cash flows are $37,700. The machine has a useful life of 3 years and no salvage value. Management of the company requires a 8% return on investment. The present value of an annuity of $1 for various periods follows: Period Present value of an annuity of $1 at 8% 1 0.9259 2 1.7833 3 2.5771 What is the net present value of this machine assuming all cash flows occur at year-end
Answer:
$1,157
Explanation:
As per the given question the solution of net present value is provided below:-
To reach out the net present value first we will find the present value of annuity
Present value of annuity = Annuity × PVIFA factor of 3 years at 8%
= $37,700 × 2.5771
= $97,156.67
Net present value = Present value of inflows - Present value of outflows
= $97,156.67 - $96,000
= $1,157
So, we have calculated the net present value by using the above formula.
The following information on selected cash transactions for 2021 has been provided by Coronado Industries: Proceeds from sale of land $319000 Proceeds from long-term borrowings 601000 Purchases of plant assets 219000 Purchases of inventories 1028000 Proceeds from sale of Coronado common stock 370000 What is the cash provided (used) by investing activities for the year ended December 31, 2021, as a result of the above information
Answer:
$100,000
Explanation:
Coronado Industries
CASH FLOW STATEMENT
For the year ended December 31, 2021
Cash Flow from Investing Activities:
Proceeds from sale of land $319,000
Less: Purchases of plant assets ($219,000)
Net Cash used in Investing Activity $100,000
Answer:
$100,000
Explanation:
cash flow from investing activities:
cash proceeds from sale of land $319,000
- purchase of plant assets ($219,000)
net cash flow from investing activities = $100,000
Cash flows from investing activities include only those purchases and sales of assets that are used by the company to generate revenue, e.g. plant and equipment, land, investment in stocks in other companies, etc.
You are considering adding a new food product to your store for resale. You are certain that, in a month, minimum demand for the product will be 5 units, while maximum demand will be 8 units. (Unfortunately, the new product has a one-month shelf life and is considered to be waste at the end of the month.) You will pay $70/unit for this new product while you plan to sell the product at $100 ($30/unit profit). The estimated demand for this new product in any given month is 5 units (p=0.2), 6 units (p=0.2), 7 units (p=0.4), and 8 units (p=0.2).
Required:
1. Using EMV analysis, how many units of the new product should be purchased for resale?
Answer:
Using EMV analysis, the number of units of the new product should be purchased for resale = Purchase 7.
The maximum EMV of profit you can make is 270.
Explanation:
We can use the following method to solve the given problem
Solution:
Using EMV analysis,
EMV (Purchase 6 for resale)= 6(40)(0.1) + 6(40)(0.4) + 6(40)(0.5)=240
EMV (Purchase 7 for resale) = [6(40)-60](0.1) +7(40)(0.4) + 7 (40)(0.5) = 270
EMV (Purchase 8 for resale) = [6(40)-2(60)] (0.1) + [7 (40) - 60] (0.4) + 8(40)(0.5)= 260
Largest EMV= 270; Choose to purchase 7 units for resale.
International Data Systems' information on revenue and costs is relevant only up to a sales volume of 106,000 units. After 106,000 units, the market becomes saturated and the price per unit falls from $16.00 to $9.80. Also, there are cost overruns at a production volume of over 106,000 units, and variable cost per unit goes up from $8.00 to $8.50. Fixed costs remain the same at $56,000.
a. Compute operating income at 106,000 units.b. Compute operating income at 206,000 units.
Answer:
Option A. $792,000
Option B. $211,800
Explanation:
At the level 106,000 Units, the price per unit and variable cost per unit will remain at $16 and $8 per unit.
Option A.
Sales (106,000 Units * $16) $1,696,000
Variable cost (106,000* $8) $848,000
Fixed costs $56000
Operating Profit $792,000
Option B.
When the production exceeds 106,000 units level, the price per unit and variable cost per unit will remain at $9.8 and $8.5 per unit.
Sales (206,000 * $9.8) $2,018,800
Variable cost (206,000 * $8.5) $1,751,000
Fixed costs $56,000
Operating Profit $211,800
The profit has been decreased substantially due to increase in Marginal cost.
The R&D division of Piqua Chemical Corp. has just developed a chemical for sterilizing the vicious Brazilian "killer bees" which are invading Mexico and the southern United States. The president of the company is anxious to get the chemical on the market to boost the company’s profits. He believes his job is in jeopardy because of decreasing sales and profits. The company has an opportunity to sell this chemical in Central American countries, where the laws are much more relaxed than in the United States. The director of Piqua’s R&D division strongly recommends further testing in the laboratory for side-effects of this chemical on other insects, birds, animals, plants, and even humans. He cautions the president, "We could be sued from all sides if the chemical has tragic side-effects that we didn’t even test for in the labs." The president answers, "We can’t wait an additional year for your lab tests. We can avoid losses from such lawsuits by establishing a separate wholly-owned corporation to shield Piqua Corp. from such lawsuits. We can’t lose any more than our investment in the new corporation, and we’ll invest in just the patent covering this chemical. We’ll reap the benefits if the chemical works and is safe, and avoid the losses from lawsuits if it’s a disaster." The following week, Piqua creates a new wholly-owned corporation called Finlay Inc., sells the chemical patent to it for $10, and watches the spraying begin.Instructions: 1. Who are the stakeholders in this situation? 2. Are the president's motives and actions ethical? 3. Can Piqua shield itself against losses of Finlay Inc.?
Answer:
(1)The primary stakeholders in this example are the shareholders of he company who have infused their money expecting it to be used for lawful objects as stated in the charter of the company, the secondary stakeholders can be the environment such as humans.
(2)President actions does not seem ethical, because he wants to save his own job at the expense of polluting the environment what can cause harm to humans, plants and animals.
(3) Since Finlay Inc. has no assets other than $ 10 in patent, it would be very hard to carry the huge losses should lawsuits be filed. In that event, there are going to be huge outflows of cash from the books of Piqua, and the stockholders would want to know why or the reason.
Explanation:
Solution
Given that:
(1)The primary stakeholders in this case, are the shareholders of the company, who have infused their money expecting it to be used for lawful objects as stated in the charter of the company. The secondary stakeholder could be the environment comprising of the fauna,flora, and humans, as the spray can be a serious pollutant in the environment.
(2) The president's actions and reasons are does not seem ethical
Firstly, he wants to save his own job at the expense of polluting the environment, and possibly causing various harm to animals,plants, and even humans.
Secondly, he does not want to share the contingent liabilities that may occur with the stockholders, that may lead to erosion in shareholder value.
The third reason is,in order to keep these liabilities off the balance sheet of Piqua Chemical Corp., he has developed a SPV for carrying the losses from lawsuits.
Hence, there is no limpidity here, and he has committed a breach of trust. The president of the company, as the agent of the company and its stockholders stands in a relationship that is fiduciary, and should avoid conflict or issues of interest at all cost.
(3) At the end, it would be hard for Piqua to hide itself from the losses of Finlay Inc.
Since Finlay Inc. has no assets other than $ 10 in patent, how would it be possible to carry the huge losses should lawsuits be applied. In that case, there are going to be huge outflows of cash from the books of Piqua, and the stockholders would want to know the what caused it.
Portable Pet Care, Inc., a mobile veterinary clinic, is planning for the future. The company owners (two seasoned veterinarians) have brought together the vice president of marketing and the director of information systems to talk about their expansion campaign, "We come to you!" The talks are in the preliminary stages, so there is no need to concern the finance team at this time because cash flow is currently not a problem. True or false?
Answer:
Your answer is false
Explanation:
this is because if you are looking to hire a vice president you will have to budget for their salary.
Use the following information to create an income statement and balance sheet.
Accounts Payable 250,000
Accounts Receivable 230,000
Cash 370,000
Common Stock 100,000
Costs 430,000
Depreciation Expense 40,000
Dividends 73,800
Goodwill 170,000
Interest Expense 60,000
Inventory 80,000
Land 499,770
Line of credit (used) 150,000
Long Term Loan 400,000
Paid in Surplus 225,000
Preferred Stock 75,000
Ashley Robertson works for MRK all year and earns a monthly salary of $ 11,900. There is no overtime pay. Ashley's income tax withholding rate is 20 % of gross pay. In addition to payroll taxes, Ashley elects to contribute 2% monthly to United Way. MRK also deducts $ 125 monthly for co-payment of the health insurance premium. As of September 30, Ashley had $ 107,100 of cumulative earnings.
Required:
1. Compute Ashley's net pay for October. (Round all amounts to the nearest cent.) Withholding deductions: Net (take-home) pay
2. Journalize the accrual of salaries expense and the payment related to the employment of Ashley Robertson.
Answer:
1. Compute Ashley's net pay for October.
Ashley's net pay = $11,900 - $2,380 - $238 - $125 - $737.80 - $172.55 = $8,246.65
2. Journalize the accrual of salaries expense and the payment related to the employment of Ashley Robertson.
Dr Wages expense 11,900
Dr FICA expense 910.35
Cr Federal income tax withholding payable 2,380
Cr United Way contribution payable 238
Cr Health insurance payable 125
Cr FICA Social Security withholding payable 737.80
Cr FICA Medicare withholding payable 172.55
Cr FICA Social Security tax payable 737.80
Cr FICA Medicare tax payable 172.55
Cr Wages payable 8,246.65
Dr Federal income tax withholding payable 2,380
Dr United Way contribution payable 238
Dr Health insurance payable 125
Dr FICA Social Security withholding payable 737.80
Dr FICA Medicare withholding payable 172.55
Dr FICA Social Security tax payable 737.80
Dr FICA Medicare tax payable 172.55
Dr Wages payable 8,246.65
Cr Cash 12,810.35
Explanation:
monthly salary $11,900
income tax withholding rate 20% = $11,900 x 20% = $2,380
union contribution 2% = $11,900 x 2% = $238
health insurance $125
cumulative earnings September 30, $107,100
FICA taxes:
social security 6.2% = $737.80
Medicare 1.45% = $172.55
no FUTA tax applies
On December 1, 2020, Concord Corporation acquired new equipment in exchange for old equipment that it had acquired in 2017. The old equipment was purchased for $216000 and had a book value of $83720. On the date of the exchange, the old equipment had a fair value of $91000. In addition, Concord paid $286000 cash for the new equipment, which had a list price of $386000. The exchange lacked commercial substance. At what amount should Concord record the new equipment for financial accounting purposes?
Answer:
$369,720
Explanation:
The computation of the amount record the new equipment for financial accounting purpose is shown below:
Book value of new equipment = book value of old equipment + cash given
where,
Book value of old equipment is $83,720
And, the cash paid for new equipment is $286,000
SO, the book value of new equipment is
= $83,720 + $286,000
= $369,720
Transactions that affect earnings do not necessarily affect cash. Identify the effect, if any, that each of the following transactions would have upon cash and net income. (If an amount reduces the account balance then enter with negative sign preceding the number e.g. -15,000 or parentheses e.g. (15,000).)(a) Purchased $173 of supplies for cash.(b) Recorded an adjusting entry to record use of $49 of the above supplies.(c) Made sales of $1,271, all on account.(e) Received $738 from customers in payment of their accounts. Purchased equipment for cash, $2,518.(f) Recorded depreciation of building for period used, $743.
Answer and Explanation:
According to the scenario, computation of the given data are as follow:-
Retained Earnings
Particular Cash ($) Net income ($)
a. Purchased supplies for cash -173 -
b. Adjusting entry to record use of supplies - - 49
c. Sales made of all on accounts - 1,271
d. Received customer payment of their accounts 738 -
e. Purchased equipment for cash -2,518 -
f. Depreciation of building for period use - -743
In the first transaction the cash is gone so it would be deducted no impact on net income
In the second transaction there is an adjusting entry the same affect the net income in a negative manner and no impact on cash
In the third transactions sales made which increased the net income and does not have any impact on cash
In the fourth transaction Received payment which increased the cash balance and no impact on net income
In the first transaction the cash is gone so it would be deducted no impact on net income
In the fifth transaction the depreciation is charged so it would decreased the net income and no impact on cash
How can managers leverage on components of organizational behavior to maximize business success
Answer:
Explanation: 4
The information listed below refers to the employees of Lemonica Company for the year ended December 31, 2016. The wages are separated into the quarters in which they were paid to the individual employees.NameSocial Security #1st Qtr.2nd Qtr.3rd Qtr.4th Qtr.TotalRobert G. Cramer . . . . . . . . . . . .000-00-0001$ 5,800$ 5,000$ 5,000$ 5,200$ 21,000Daniel M. English (Foreman) . . .000-00-000313,00013,40013,40013,40053,200Ruth A. Small . . . . . . . . . . . . . . .000-00-19982,0002,3002,3002,4009,000Harry B. Klaus. . . . . . . . . . . . . . .000-00-741311,60011,70011,70011,70046,700Kenneth N. George (Manager) . .000-00-652313,60014,00014,50015,00057,100Mavis R. Jones . . . . . . . . . . . . . .000-00-67891,6001,7001,700-0-5,000Marshall T. McCoy. . . . . . . . . . .000-00-333411,40011,400-0--0-22,800Bertram A. Gompers (President) .000-00-101424,50025,00025,50026,300101,300Arthur S. Rooks. . . . . . . . . . . . . .000-00-7277-0-7001,7001,7004,100Mary R. Bastian . . . . . . . . . . . . .000-00-81118,0008,2008,2008,20032,600Klaus C. Werner . . . . . . . . . . . . .000-00-26232,3002,5002,5002,5009,800Kathy T. Tyler . . . . . . . . . . . . . . .000-00-3534-0--0-11,30011,70023,000Totals . . . . . . . . . . . . . . . . . . . .$93,800$95,900$97,800$98,100$385,600For 2016, State D’s contribution rate for Lemonica Company, based on the experience-rating system of the state, was 2.8% of the first $7,000 of each employee’s earnings. The state tax returns are due one month after the end of each calendar quarter. During 2016, the company paid $2,214.80 of contributions to State D’s unemployment fund. Employer’s phone number: (613) 555-0029. Employer’s State D reporting number: 00596.Using the forms supplied on pages 5-42 to 5-44, complete the following for 2016:a. Date and amount of the FUTA tax payment for the fourth quarter of 2016 (State D is not a credit reduction state). Tax Payment: Date _____________ Amount $____________b. Employer’s Report for Unemployment Compensation, State D—4th quarter only. Item 1 is the number of employees employed in the pay period that includes the 12th of each month in the quarter. For Lemonica Company, the number of employees is eight in October, seven in November, and eight in December. All employees earned 13 credit weeks during the last quarter except for Rooks (8) and Tyler (9).c. Employer’s Annual Federal Unemployment (FUTA) Tax Return—Form 940Indicate on each form the date that the form should be submitted and the amount of money that must be paid. The president of the company prepares and signs all tax forms.
Answer:
a. Due Date – January 31, 2017
b. FUTA tax liability for fourth quarter $2,905
Explanation:
If your FUTA tax for the fourth quarter (plus any deposited amounts from earlier quarters) is more than $500, deposit the entire amount by January 31, 2017. If it is $500 or less, you can either deposit the amount or pay it with your Form 940 by January 31, 2017.
Name
Social Security
4th Qtr.
Taxable Wages ($7,000 or lower)
FUTA tax at 5.4%
Robert G. Cramer
000-00-0001
$ 5,200.00
$ 5,200.00
$ 280.80
Daniel M. English (Foreman)
000-00-0003
$ 13,400.00
$ 7,000.00
$ 378.00
A. Small
000-00-1998
$ 2,400.00
$ 2,400.00
$ 129.60
Harry B. Klaus
000-00-7413
$ 11,700.00
$ 7,000.00
$ 378.00
Kenneth N. George (Manager)
000-00-6523
$ 15,000.00
$ 7,000.00
$ 378.00
Mavis R. Jones
000-00-6789
-0-
$ -
$ -
Marshall T. McCoy
000-00-3334
-0-
$ -
$ -
Bertram A. Gompers (President)
000-00-1014
$ 26,300.00
$ 7,000.00
$ 378.00
Arthur S. Rooks
000-00-7277
$ 1,700.00
$ 1,700.00
$ 91.80
R. Bastian
000-00-8111
$ 8,200.00
$ 7,000.00
$ 378.00
Klaus C. Werner
000-00-2623
$ 2,500.00
$ 2,500.00
$ 135.00
Kathy T. Tyler
000-00-3534
$ 11,700.00
$ 7,000.00
$ 378.00
Total
$ 98,100.00
$ 2,905.20
Since the state experience the lower experience rating system, hence the FUTA tax rate is minimum 5.4%.
Exercise 6-18 Break-Even and Target Profit Analysis; Margin of Safety; CM Ratio [LO6-1, LO6-3, LO6-5, LO6-6, LO6-7]Menlo Company distributes a single product. The company’s sales and expenses for last month follow: Total Per UnitSales$640,000 $40 Variable expenses 448,000 28 Contribution margin 192,000 $12 Fixed expenses 145,200 Net operating income$46,800 Required:1. What is the monthly break-even point in unit sales and in dollar sales?2. Without resorting to computations, what is the total contribution margin at the break-even point?3-a. How many units would have to be sold each month to attain a target profit of $75,600?3-b. Verify your answer by preparing a contribution format income statement at the target sales level.4. Refer to the original data. Compute the company's margin of safety in both dollar and percentage terms.5. What is the company’s CM ratio? If sales increase by $96,000 per month and there is no change in fixed expenses, by how much would you expect monthly net operating income to increase?
Answer:
Instructions are below.
Explanation:
Giving the following information:
Sales= $640,000 ($40)
Variable expenses= 448,000 (28)
Contribution margin= 192,000 ($12)
Fixed expenses= (145,200)
Net operating income=$46,800
1) To calculate the break-even point in units and dollars, we need to use the following formulas:
Break-even point in units= fixed costs/ contribution margin per unit
Break-even point in units= 145,200/(40-28)
Break-even point in units= 12,100 units
Break-even point (dollars)= fixed costs/ contribution margin ratio
Break-even point (dollars)= 145,200/ (12/40)
Break-even point (dollars)= $484,000
2) The break-even point is the number of units to sell to reach a net profit of cero. Therefore, the contribution margin must be equal to the fixed costs.
Contribution margin= 145,200
3) profit= $75,600
Break-even point in units= (fixed costs + desired profit)/ contribution margin per unit
Break-even point in units= 220,800/12
Break-even point in units= 18,400 units
Sales= 18,400*40= 736,000
Total variable costs= 18,400*28= (515,200)
Contribution margin= 220,800
Fixed costs= 145,200
Net profit= 75,600
4) The margin of safety:
Margin of safety= (current sales level - break-even point)
Margin of safety= 640,000 - 484,000= $156,000
Margin of safety ratio= (current sales level - break-even point)/current sales level
Margin of safety ratio= 156,000/640,000
Margin of safety ratio= 0.244= 24.4%
5) Contribution margin ratio= 12/40= 0.3
Net increase= 96,000*0.3= $28,800
On January 1, 2018, Ogleby Corporation signed a five-year noncancelable lease for equipment. The terms of the lease called for Ogleby to make annual payments of $180,000 at the beginning of each year for five years with title passing to Ogleby at the end of this period. The equipment has an estimated useful life of 7 years and no salvage value. Ogleby uses the straight-line method of depreciation for all of its fixed assets. Ogleby accordingly accounts for this lease transaction as a finance lease. The minimum lease payments were determined to have a present value of $750,578 at an effective interest rate of 10%.
With respect to this lease, for 2018 Ogleby should record
a. rent expense of $180,000.
b. interest expense of $57,058 and amortization expense of $150,116.
c. interest expense of $57,058 and amortization expense of $107,225.
d. interest expense of $90,000 and amortization expense of $181,956
Show all work including formulas
Answer:
With respect to this lease, for 2018 Ogleby should record interest expense of $57,058 and depreciation expense of $107,225. The right answer is c
Explanation:
According to the given data we have the following:
PV of lease=$750,578
Annual payment=$180,000
Rate of interesr=10%
The interest expense would be calculated as follows:
Interest expense = ( PV of lease - Annual payment ) * Rate of interest
Interest expense = ( $750,578 - $180,000 ) * 10%
Interest expense = $57,058
Therefore, With respect to this lease, for 2018 Ogleby should record interest expense of $57,058 and depreciation expense of $107,225.
Under ideal conditions inflation should not have any blurring effect on price signals. If wages and prices are rising at a constant 20% then individuals should be able to adjust their expectations accordingly. For example, if the price of bread increased by 20% and the price of the input flour also rose by 20%, the sellers should know that the real price of bread has not changed. The market equilibrium quantity and price has not changed. Why does inflation in the real world result in shortages and surpluses?
Answer:
1. Adjustments of or changes in price are not smooth or synchronized.
2. Inflation rarely have impact on the prices of inputs.
3. The concentration of sellers is more on nominal prices of goods than real prices.
Explanation:
Inflation can be described as a sustained increase in the general price level of commodities within a country over a period of time.
The following are the reasons inflation in the real world result in shortages and surpluses:
1. Adjustmensts of or changes in price are not smooth or synchronized.
2. Inflation rarely have impact on the prices of inputs.
3. The concentration of sellers is more on nominal prices of goods than real prices.
Matt and Sarah are selling their home and moving to a new neighborhood. Sarah is going to start college in the fall. She did NOT attend college after high school and is now embarking on her degree. Matt was injured recently in a motorcycle accident and the couple has some very high medical expenses that are coming due. They have considered liquidating their traditional IRAs in order to cover some of these costs. Which types of expenditures can they make from funds in their IRAs without incurring a 10% penalty for early withdrawal?
Answer:
Matt and Sarah can withdraw the following two types of funds: higher education and medical expenses . While they cannot withdraw any funds for their new home that they are moving into because that will cost them the 10% penalty.
Hope that answers the question, have a great day!
Financial instruments are assets that have a monetary value or record a monetary transaction. To coordinate the exchange of capital between borrowers and lenders, financial instruments trade in the financial markets. These financial instruments can be categorized on the basis of their issuers, maturity, risk, and other factors. Identify the financial instruments based on the following descriptions.
a. Backed by the US government, these financial instruments are fixed-rate debt securities with a maturity of more than one year. They are considered default free but are subject to interest rate risk.
b. Issued by corporations, these unsecured debt instruments are used to fund corporate short-term financing requirements. If issued by a financially strong company, they have less risk.
c. These financial instruments are investment pools that buy such short-term debt instruments as Treasury bills (T-bills), certificates of deposit (CDs), and commercial paper. They can be easily liquidated.
d. These financial instruments are contractual agreements that give one party a long-term agreement to use an asset by providing regular payments.
Which of the following instruments are traded in the capital markets? Check all that apply.
a. Common stocks
b. Corporate bonds
c. Preferred stocks
d. Certificates of deposit
e. Long-term bank loans
Answer:
(1)a. U.S Treasury bills.
b. Commercial paper.
c. Money market mutual funds.
d. Leases.
(2)a. Common stocks.
b. Corporate bonds.
d. Certificates of deposit
Explanation:
a. U.S Treasury bills: Backed by the US government, these financial instruments are fixed-rate debt securities with a maturity of more than one year. They are considered default free but are subject to interest rate risk.
b. Commercial paper: Issued by corporations, these unsecured debt instruments are used to fund corporate short-term financing requirements. If issued by a financially strong company, they have less risk.
c. Money Market Mutual Funds: These financial instruments are investment pools that buy such short-term debt instruments as Treasury bills (T-bills), certificates of deposit (CDs), and commercial paper. They can be easily liquidated.
d. Leases: These financial instruments are contractual agreements that give one party a long-term agreement to use an asset by providing regular payments.
Capital market instruments are the trade in both stocks and bonds, they're long-term assets.
The following instruments are traded in the capital markets;
• Common stocks.
• Corporate bonds.
• Certificates of deposit.
Levine Inc., which produces a single product, has prepared the following standard cost sheet for one unit of the product. Direct materials (8 pounds at $2.40 per pound) $19.20 Direct labor (5 hours at $12.00 per hour) $60.00 During the month of April, the company manufactures 260 units and incurs the following actual costs. Direct materials purchased and used (2,400 pounds) $6,240 Direct labor (1,310 hours) $15,458 Compute the total, price, and quantity variances for materials and labor. Total materials variance $enter a dollar amount select an option Materials price variance $enter a dollar amount select an option Materials quantity variance $enter a dollar amount select an option Total labor variance $enter a dollar amount select an option Labor price variance $enter a dollar amount select an option Labor quantity variance $enter a dollar amount
Answer:
$3,120 U
$480 U
$2,640 U
$142 F
$262 F
$120 U
Explanation:
As per the data given in the question,
Total material variance = Actual cost - Standard cost
= $6,240 - (260 × 5 × 2.4)
= $3,120 U
Material Price Variance = (Actual quantity × Actual rate) - (Actual quantity-standard rate)
= $6,240 - (2,400 × 2.4)
= $480 U
Material Quantity Variance = Standard rate × (actual quantity used - standard quantity)
= 2.4 × (2,400 - (260×5))
= $2,640 U
Total Labor variance = Actual cost - Standard cost
= $15,458 - (260 × 12 × 5)
= 142 F
Labor price variance = (Actual hour × actual rate) - (actual hours × standard rate)
= $15,458 - ($1,310 × 12)
= $262 F
Labor efficiency variance = Standard cost × (Actual hrs used - Standard hours)
= 12 × (1,310 - (260 × 5))
= $120 U
We simply applied the above formulas
WP Corporation produces products X, Y, and Z from a single raw material input in a joint production process. Budgeted data for the next month is as follows:
Product X Product Y Product Z
Units produced 1,500 2,000 3,000
Per unit sales value at split-off $ 19.00 $ 21.00 $ 24.00
Added processing costs per unit $ 7.00 $ 7.50 $ 7.00
Per unit sales value if processed further $ 29.00 $ 29.00 $ 30.00
The cost of the joint raw material input is $149,000. Which of the products should be processed beyond the split-off point?
Product X Product Y Product Z
A) Yes Yes No
B) No Yes No
C) Yes No Yes
D) No Yes Yes
1. Choice D
2. Choice A
3. Choice B
4. Choice C
Answer:
yes yes NO ( A )
Explanation:
products X,Y,Z
units produced : X = 1500 , Y = 2000, Z = 3000
per unit sales value at split-off : X = $19, Y = $21, Z = $24
Added processing costs per unit : X = $7, Y = $7.50 , Z = $7
per unit sales value if processed further : X = $29, Y = $29, Z = $30
COST OF JOINT MATERIAL INPUT = $149000
To check for products to be processed further we apply
(unit sales value if processed further - per unit sales value at split-off ) - ( added processing cost )
for product X = $29 - $19 - $7 = $3
for product Y = $29 - $21 - $7.5 = $0.50
for product Z = $30 - $24 - $7 = - $1 ( negative value )
products to be processed beyond the split of point would be : X Y
because Z has a negative contribution margin
Brussels Enterprises issues bonds at par dated January 1, 2019, that have a $3,600,000 par value, mature in four years, and pay 7% interest semiannually on June 30 and December 31.
Required:
a. Record the entry for the issuance of bonds for cash on January 1.
b. Record the entry for the first semiannual interest payment and the second semiannual interest payment.
c. Record the entry for the maturity of the bonds on December 31, 2022 (assume semiannual interest is already recorded).