62) A risk-free, zero-coupon bond with a face value of $10,000 has 15 years to maturity. If the YTM is 6.1%, which of the following would be closest to the price this bond will trade at? A) $4937 B) $5760 C) $6582 D) $4114

Answers

Answer 1

Answer:

PV= $4,114

Explanation:

Giving the following information:

Face value (F)= $10,000

Time to maturity (t)= 15 years

rate (r)= 6.1%

To calculate the present value of the bond, we need to use the following formula:

PV= F / (1+r)^t

F= face value

r= rate

t= time

PV= 10,000 / (1.061^15)

PV= $4,114


Related Questions

Filling your individualf ederal tax returns would be best described what type of value chain?

Answers

Answer: Government to customer (G2C)

Explanation:

Filing is one of the requirements of any business person to give proper record of what they did in their business and how they delivered to the masses. This is proper for tax clearance and returns. When filing your individual tax returns the value chain is known as government to customer (G2C). This is recommended.

An 85-year old risk averse investor is not happy about the minimal return she is earning on her current investments. She is stressed about having enough income because her cost of living has been increasing by more than 10% annually. Her current portfolio composition consists of:

Answers

An 85-year old risk averse investor is not happy about the minimal return she is earning on her current investments. She is stressed about having enough income because her cost of living has been increasing by more than 10% annually. Her current portfolio composition consists of:

40% Money Market Fund

50% Bonds

10% Equities

What changes should you suggest to her portfolio?

A. Reduce the Money Market Fund allocation by 10% (to 30%) and put the released funds in commodities such as gold

B. Reduce the Money Market Fund allocation by 30% (to 10%) and put the released funds in AAA-rated corporate bonds

C. Liquidate the entire Money Market Fund allocation and put the released funds in Equities, bringing that allocation up to 50%

D. Liquidate the entire Money Market Fund allocation and put the released funds in U.S. Treasury securities

Answer:

Reduce the Money Market Fund allocation by 30% (to 10%) and put the released funds in AAA-rated corporate bonds

Explanation:

Given that AAA rated bonds are considered to be the highest possible rating that may be assigned to an issuer's bonds by any of the major credit rating agencies, with the smallest risk of default.

Hence, given the situation above with the 85 years old woman, the changes to make to her portfolio is to Reduce the Money Market Fund allocation by 30% (to 10%) and put the released funds in AAA-rated corporate bonds

_____ affects the perceptual process because employees are more likely to remember information that is consistent with their self-concept and nonconsciously screen out information (particularly negative information) that seems inconsistent with it.

Answers

Answer:

Self-Verification

Explanation:

Self-verification refers to verify themselves by other peoples. How other people understand them based on their feelings, beliefs, etc. In other words we can say self views that also includes self concepts and self esteem

In the given situation, since it affects the perceptual process as we recognized that the employees have a good memory with respect to self concept and especially negative information

A hedge fund with net asset value of $62 per share currently has a high water mark of $66. Is the value of its incentive fee more or less than it would be if the high water mark were $67?

Answers

Answer:

The incentive fee will be less valuable in a situation where the high- water mark is the amount of $67, instead of the amount of $66 which means that when we have a high-water mark of the amount of $67, the net asset value of the fund have to reach $67 before the hedge fund can assess the incentive fee.

Explanation:

The incentive fee will be equal to 20% of the amount of the hedge fund’s profits which will be beyond a specific benchmark rate of return and in a situation where a fund has had or

experienced some losses in the past, this means that the fund may be unable to charge the incentive fee unless the fund is above its previous high water mark.

Therefore the incentive fee will be less valuable in a situation where the high- water mark is the amount of $67, instead of the amount of $66 which means that when we have a high-water mark of the amount of $67, the net asset value of the fund have to reach $67 before the hedge fund can assess the incentive fee.

Starting from a long run steady state equilibrium, significant increase in individual income taxes was announced. In the long run after market adjustments the economy will
A. experience a small deflation but aggregate output returns to the potential output level.
B. experience a small inflation but aggregate output returns to the potential output level.
C. experience a large inflation but aggregate output remains less than the potential output level.
D. experience a large deflation but aggregate output remains less than the potential output level.​

Answers

Answer:

A

Explanation:

Here, we want to know what will happen in the long run after market adjustments when we start from a long run steady state equilibrium.

An increase in income taxes will shift the adjustment to the left. This will cause deflation.

After this adjustment, the net effect will be a small deflation, but output returns to potential level.

Intricate Wiring Corp., based in Ohio, creates a brand new high-tech product. The demand for the product in the United States is high but very low or non-existent elsewhere. The company decides not to locate manufacturing facilities elsewhere and will simply meet the small foreign demand via exports. The theory that best explains the company's policy is

Answers

Answer:a. product life cycle theory.

Explanation:

The Product Life Cycle Theory was created to explain the International trade pattern of a new product. The theory attempts to show that when a product is first invented, its demand and production inputs such as capital and labor, come from the area it was invented in. As the product starts getting more recognised and it's demand increases elsewhere, it will start to export and then continue until it starts manufacturing in other areas to feed the demand of those areas as well.

Intricate Wiring Corp's new high-tech product is following this theory because it has just started out and so its demand is based in its country of origin being the United States. For as long as this is the case, the company should focus on producing in the United States until demand picks up substantially enough to produce elsewhere.

The company had a net income of $248,462, and depreciation expenses were equal to $72,487. What is the firm's cash flow from financing activities?

Answers

Complete Question:

The complete question can be seen the in the attachment at the end of the solution of the question.

Answer:

Option B. -$182,057

Explanation:

The Cash flow from financing activities can be calculated by using the following formula:

Cash flow from financing activities = Changes in the equity finance

+ Changes in long term borrowings + Changes in short term borrowings

- Interest paid - Dividends paid

Here

Changes in the equity = $175,000 common stock in year 2008

- $125,000 common stock in year 2008 = $50,000

Changes in long term Borrowings = $61,290 - $78,445 = - $17,155

Changes in short term Borrowings = $16,753 - $12,004 = $4749

Interest paid is $0 because interest rate is not given hence we can't calculate it.

Dividends paid = $190,568 Opening Retained Earnings + $248,462 Net Profit for the year - $219,379 Closing Retained Earnings  = $219,651

Now, by putting values in the above equations, we have:

Cash flow from financing activities = $50,000 - $17,155 + $4749 - 0 - $219,651 = -$182,057

Darin has a tax basis of $7,000 and an at-risk amount of $5,000 in a partnership where he is a 25% owner. The partnership incurred a loss of $40,000 in the current year. How much of the loss will be allocated to Darin and how much will he be able to deduct in the current year assuming he materially participates in the business

Answers

Answer:

Darin will have a $10000 and also he will be able to deduct $5,000.

Explanation:

Solution

Recall that:

Darin tax basis =$7000

Risk amount = $5000

Loss incurred = 40,000 (current year)

Ownership =25%

Now

With regards to his share the loss will be 25% of $40000, that is $10000 and he will be able to deduct only $5000 because of his at-risk amount is this and as per Sec. 465.

Or

40000 * 25% = $10000

He will deduct $5000 from $10000 only

Hence $10,000 of the loss will flow-through to Darin, and he will be able to deduct $5,000.

Sheryl Crow Equipment Company sold 500 Rollomatics during 2014 at $6,000 each. During 2014, Crow spent $20,000 servicing the 2-year warranties that accompany the Rollomatic. All applicable transactions are on a cash basis.
Instructions
(a) Prepare 2014 entries for Crow using the expense warranty approach. Assume that Crow estimates the total cost of servicing the warranties will be $120,000 for 2 years.
(b) Prepare 2014 entries for Crow assuming that the warranties are not an integral part of the sale. Assume that of the sales total, $150,000 relates to sales of warranty contracts. Crow estimates the total cost of servicing the warranties will be $120,000 for 2 years. Estimate revenues to be recognized on the basis of costs incurred and estimated costs.

Answers

Answer:

(a) Prepare 2014 entries for Crow using the expense warranty approach. Assume that Crow estimates the total cost of servicing the warranties will be $120,000 for 2 years.

To record the 2014 sales:

Dr Cash 3,000,000

    Cr Sales revenue 3,000,000

Dr Warranty expense 120,000

    Cr Warranty liability 120,000

To record the expenses related to warranty liability during 2014

Dr Warranty liability 20,000

    Cr Cash 20,000

(b) Prepare 2014 entries for Crow assuming that the warranties are not an integral part of the sale. Assume that of the sales total, $150,000 relates to sales of warranty contracts. Crow estimates the total cost of servicing the warranties will be $120,000 for 2 years. Estimate revenues to be recognized on the basis of costs incurred and estimated costs.

To record the 2014 sales:

Dr Cash 2,850,000

    Cr Sales revenue 2,850,000

Dr Cash 150,000

    Cr Unearned warranty revenue 120,000

    Cr Warranty revenue 30,000

To record the expenses related to warranty liability during 2014

Dr Warranty expenses 20,000

    Cr Cash 20,000

Since the warranty covers a 2 year period, the company cannot recognize any more warranty revenue yet.

IAS 16. Fixed Assets. We are a graphic arts company, and at the beginning of 2016, we acquired a new printer. The price of this printer was 25,000 euros. The additional expenses of the purchase were as follows:

Answers

Answer:

1.Initial Acquisition cost €24,882.15

2.Amortization fee €1,688.215

3.The costs derived from daily maintenance €30,000

Explanation:

1. Calculation for the initial cost of the acquisition for IAS 16. Fixed Assets.

Using this formula

Initial Acquisition cost = (Purchase price + Additional direct expenses relative to acquisition) - (Depreciation + Amortization + taxes + impairment costs)

Let plug in the formula

Initial Acquisition cost= (25,000+ 3.00+1.150) - (122)

Initial Acquisition cost =25,004.15-122

Initial Acquisition cost = 24,882.15 Euro

Therefore the Initial Acquisition cost will be €24,882.15

2.Calculation for the amortization fees.

Using this formula

Amortization fees = total interest amount/period in the debt's life

Let plug in the formula

Interest amount= 24,882.15-5000- (250*12)

Interest amount =19,882.15-3,000

Interest amount= 16,882.15

Hence, Amortization fee will be :

Interest amount/Period in the debt's life

Where,

Interest amount=16,882.15

Period in the debt's life=10 years

Amortization fee =16,882.15/10 years

Amortization fee= €1,688.215

Therefore the Amortization fee will be €1,688.215

3.Calculation for he costs derived from daily maintenance

The costs derived from daily maintenance will be ;

Using this formula

Costs derived from daily maintenance= Specialised weekly maintenance× 12 month ×Numbers of years

Let plug in the formula

Costs derived from daily maintenance= 250*12*10

Costs derived from daily maintenance=30,000

Therefore the costs derived from daily maintenance will be €30,000

Assume the same data as in Problem 2 for the cost to make a Widget. What if we could sell the widgets we make for $50 to other customers. We receive a special order for 1,000 more widgets but that customer wants to just pay $30. It would not affect our current orders or our fixed costs and we have plenty of plant capacity.

Answers

Answer:

Effect on income= number of units soldünitary contribution margin

Explanation:

Giving the following information:

We receive a special order for 1,000 more widgets but that customer wants to just pay $30.

We weren't provided with enough information regarding variable costs. But, I can provide a small example and formulas.

Because it is a special offer and there is unused capacity, we will not take into account the fixed costs.

Variable cost per unit (materials, labor, variable overhead)= $28

To calculate the effect on income, we need to use the following formula:

Effect on income= number of units soldünitary contribution margin

Effect on income= 1,000*(30 - 28)

Effect on income= $2,000 increase

Top management at Prinze Auto Sales has decided to replace their traditional marketing approach with an approach that emphasizes relationship marketing. Under this new approach, Prinze's salespeople will be expected to devote less time to current customers and a larger share of their time searching for new customers.
1. True2. False

Answers

Answer:

2. False

Explanation:

Relationship management is considered an important part of CRM (customer relationship management) and it emphasizes on building and increasing customer loyalty and long term commitment.

If this company was to replace their traditional marketing approach with relationship marketing, they would devote more time to build a solid relationship with existing customers and less time searching for new customers.

Given on the balance sheets given for Just dew It, calculate the following financial ratios for each year:_________.
a. Current ratio.
b. Quick ratio.
c. Cash ratio.
d. NWC to total assets ratio.
e. Deb-equity ratio and equity multiplier.
f. Total debt ratio and long-term debt ratio.

Answers

Answer:

a. Current ratio = current assets / current liabilities

2014 = $90,717 / $62,939 = 1.442015 = $100,617 / $66,442 = 1.51

b. Quick ratio = (current assets - inventory) / current liabilities

2014 = ($90,717 - $51,163)/ $62,939 = 0.632015 = ($100,617 - $56,295)/ $66,442 = 0.67

c. Cash ratio = (cash + cash equivalents) / current liabilities

2014 = $11,135 / $62,939 = 0.182015 = $13,407 / $66,442 = 0.20

d. NWC to total assets ratio = net working capital / total assets

2014 = $27,778 / $417,173 = 0.072015 = $34,175 / $458,177 = 0.07

e. Debt-equity ratio = total debt / total equity

2014 = $106,939 / $310,234 = 0.342015 = $105,442 / $352,735 = 0.30

equity multiplier = total assets / total equity

2014 = $417,173 / $310,234 = 1.342015 = $458,177 / $352,735 = 1.30

f. Total debt ratio = liabilities / assets

2014 = $106,939 / $417,173 = 0.26

2015 = $105,442 / $458,177 = 0.23

long-term debt ratio = long term liabilities / assets

2014 = $44,000 / $417,173 = 0.112015 = $39,000 / $458,177 = 0.09

The Cash account of Gate City Security Systems reported a balance of $2,530 at December 31​, 2018. There were outstanding checks totaling $ 500 and a December 31 deposit in transit of $ 400. The bank​ statement, which came from Park Cities​ Bank, listed the December 31 balance of $3,120. Included in the bank balance was a collection of $ 500 on account from Jane Lindsey​, a Gate City customer who pays the bank directly. The bank statement also shows a $20 service charge and $ 10 of interest revenue that Gate City earned on its bank balance.

Requried:
Prepare Gate City​'s bank reconciliation at December 31.

Answers

Answer:

Gate City Security Systems

Bank Reconciliation at December 31, 2018

Book:  

Balance , December 31, 2018  $2,530

Add:

Collection from Jane Lindsey $500  

Interest revenue $10

Less:

Service charges  $20

Adjusted book balance December 31, 2018  $3,020

Bank:

Balance , December 31,2018  $3,120

Add:

Deposit in transit  $400

Less:

Outstanding cheque  $500

Adjusted bank balance December 31, 2018  $3,020

On the first day of the fiscal year, a company issues $65,000, 6%, five-year installment notes that have annual payments of $15,431. The first note payment consists of $3,900 of interest and $11,531 of principal repayment. Journalize the following transactions. Be sure to include the year in the date for both entries. Refer to the Chart of Accounts for exact wording of account titles.
2016
Jan. 1 Installment notes are issued
2017
Jan. 1 First annual note payment is made

Answers

Answer: Please see explanation column for answer.

Explanation:

a) Journal to record issuance of Installment notes

Date            Account                 Debit                  Credit

Jan. 1, 2016    Cash                  $65,000

              Notes payable                                      $65,000

b) Journal to record First annual note payment

Date            Account                      Debit                  Credit

Jan. 1, 2017 Interest expense      $3,900

              Notes   payable             $11, 531

                  Cash                                                        $15,431                    

The user of a(n) ________ conflict style assertively attempts to resolve conflict by working together with the other person to find an acceptable solution.

a. Avoiding
b. Accommodating
c. Negotiating
d. Collaborating

Answers

Answer:

d. Collaborating

Explanation:

The user of a collaborating conflict style assertively attempts to resolve conflict by working together with the other person to find an acceptable solution. It is one of the most commonly used conflict resolving styles, reason why it is also referred to as the problem solving style.

Individuals engaging in a collaborating conflict style are usually very cooperative and assertive in the process of resolving the problem.

This ultimately implies that, it usually leads to a peaceful resolution and arguably the best conflict resolving method. Also, individuals participating are availed the best opportunity.

If Push Company owned 51 percent of the outstanding common stock of Shove Company, which method would be appropriate for financial reporting purposes?

Answers

Answer:

Consolidation

Explanation:

Holding method is required for the parent company for financial reporting if the parent company owns 51 percent of more outstanding common stock in the subsidiary.

Here consolidate refers to the combining of total assets and liabilities of two or more entities into one so that it could be maintained as a one firm

Therefore for financial reporting consolidation is appropriate

The capital expansion will cost 320,000. they are planning on receiving a revenue of 3.00 per unit and a varible cost of 1.20 per unit. How many units are needed to break even?

Answers

Answer:

177,777.78

Explanation:

Breakeven point is the number of units produced and sold at which net income is equal to zero

Break even point = fixed cost / price - variable cost

320,000 / 3 - 1.2 = 177,777.78

Bibby Auto Shop uses a normal job-costing system to allocate overhead on the basis of labour hours. For the current year, Bibby estimated that the total overhead costs would be $72,000 and that the total labour hours would be 2,400. At the end of the year, Bibby obtained the actual overhead costs from the ledger and found that the shop had incurred $65,800 and had worked 2,350 labour hours.
1. Compute the redetermined (budgeted) overhead rate.
Overhead Rate:__________.
2. Compute the overhead amount that was applied for the year.Was overhead under applies or over applied?
3. Prepare the journal entry to close the overhead account. Assume that the underapplied and overapplied overhead was not material.

Answers

Answer:

Answer:

1.) Overhead Absorption rate= $30 per hour

2) Absorbed overhead= $70,500

Over-absorbed overhead=$4700

3) Journal entry:

Debit  Manufacturing overhead expense  $4,700

    Credit Cost of goods sold $4,700

Explanation:

Overhead Absorption rate = Budgeted overhead /Budgeted labour hours

= 72,000 /2,400 hours = $30  per hour

Absorbed overhead = OAR × Actual labour hours

        =$30 × 2350 = $70,500

Over-absorbed overhead = Absorbed overhead - Actual overhead

                                      = $70,500  - $65,800 = $4700

Journal entry:

Debit  Manufacturing overhead expense  $4,700

    Credit Cost of goods sold $4,700

Answer:

Overhead Absorption rate= $30 per hour

Absorbed overhead= $70,500

Over-absorbed overhead=$4700

Journal entry:

Debit  Manufacturing overhead expense  $4,700

    Credit Cost of goods sold $4,700

A car dealership spends $140,000 on cars to stock their lot. After a day of sales, they earn a total revenue of $300,000. What is the car dealership's profit

Answers

Answer:

$160,000

Explanation:

Calculation of the car dealership's profit

Using this formula

Profit= Total revenue- Amount Spend

Where,

Total revenue=$300,000

Amount Spend=$140,000

Let plug in the formula

Profit =300,000-140,000

Profit =160,000

Therefore the car dealership's profit will be $160,000

Hillyard Company, an office supplies specialty store, prepares its master budget on a quarterly basis. The following data have been assembled to assist in preparing the master budget for the first quarter:
a. As of December 31 (the end of the prior quarter), the company’s general ledger showed the following account balances:
Debits Credits
Cash $ 48,000
Accounts receivable 224,000
Inventory 60,000
Buildings and equipment (net) 370,000
Accounts payable $ 93,000
Common stock 500,000
Retained earnings 109,000
$ 702,000 $ 702,000
b. Actual sales for December and budgeted sales for the next four months are as follows:
December(actual) $ 280,000
January $ 400,000
February $ 600,000
March $ 300,000
April $ 200,000
c. Sales are 20% for cash and 80% on credit. All payments on credit sales are collected in the month following sale. The accounts receivable at December 31 are a result of December credit sales.
d. The company’s gross margin is 40% of sales. (In other words, cost of goods sold is 60% of sales.)
e. Monthly expenses are budgeted as follows: salaries and wages, $27,000 per month: advertising, $70,000 per month; shipping, 5% of sales; other expenses, 3% of sales. Depreciation, including depreciation on new assets acquired during the quarter, will be $42,000 for the quarter.
f. Each month’s ending inventory should equal 25% of the following month’s cost of goods sold.
g. One-half of a month’s inventory purchases is paid for in the month of purchase; the other half is paid in the following month.
h. During February, the company will purchase a new copy machine for $1,700 cash. During March, other equipment will be purchased for cash at a cost of $84,500.
i. During January, the company will declare and pay $45,000 in cash dividends.
j. Management wants to maintain a minimum cash balance of $30,000. The company has an agreement with a local bank that allows the company to borrow in increments of $1,000 at the beginning of each month. The interest rate on these loans is 1% per month and for simplicity we will assume that interest is not compounded. The company would, as far as it is able, repay the loan plus accumulated interest at the end of the quarter.
Required:
Using the data above, complete the following statements and schedules for the first quarter:
1. Schedule of expected cash collections:
2-a. Merchandise purchases budget:
2-b. Schedule of expected cash disbursements for merchandise purchases:
3. Cash budget:
4. Prepare an absorption costing income statement for the quarter ending March 31.
5. Prepare a balance sheet as of March 31.

Answers

Answer:

Hillyard Company

1. Schedule of expected cash collections:

                                       January       February       March        April

December(actual)       $ 280,000

January $ 400,000         80,000     $320,000

February $ 600,000                           120,000    $480,000

March $ 300,000                                                      60,000   $240,000

April $ 200,000                                                                            40,000

Total                            $360,000    $440,000    $540,000

2-a. Merchandise purchases budget:

                                     January       February         March          

Cost of goods sold     240,000       360,000        180,000      

Ending Inventory          90,000         45,000          30,000

Goods available         330,000       405,000         210,000

Opening Inventory     (60,000)       (90,000)        (45,000)

Purchases                $270,000     $315,000      $165,000

2-b. Schedule of expected cash disbursements for merchandise purchases:

Budgeted Purchases Disbursement:

                                       January       February        March          April

December(actual)       $ 93,000

January $270,000       135,000       $ 135,000

February $315,000                              157,500      $ 157,500

March $165,000                                                          82,500    $ 82,500

Total                          $228,000       $292,500     $240,000

3. Cash budget:

                                       January       February       March     Total

Beginning balance        $48,000      $30,000       $30,800     $48,000

Cash collections           360,000       440,000      540,000   1,340,000

Total                            $408,000    $470,000     $570,800 $1,388,000

Disbursements:

Purchases                    228,000       292,500      240,000    (760,500)

Salaries & wages           27,000          27,000        27,000       (81,000)

Advertising                    70,000          70,000        70,000     (210,000)

Shipping (5% sales)      20,000          30,000        15,000       (65,000)

Other Expense 3%        12,000          18,000          9,000       (39,000)

Equipment                                             1,700        84,500       (86,200)

Dividend                       45,000                                                 (45,000)

Total disbursement $402,000    $439,200    $445,500   (1,286,700)

Loan + Interest             24,000                             24,720            ( 720)    

Ending balance              6,000         30,800      100,580        100,580

Required

Minimum cash bal.      30,000         30,000       30,000

Interest on loan = $720 ($24,000 x 1% x 3)

4. Prepare an absorption costing income statement for the quarter ending March 31:

Sales                                 $1,300,000

Cost of goods sold               780,000

Gross profit                        $520,000

Expenses:

Salaries & Wages   81,000

Advertising           210,000

Shipping expense 65,000

Other expenses    39,000

Depreciation         42,000

Interest expense       720   (437,720)

Net Income                            82,280

5. Prepare a balance sheet as of March 31:

Assets:

Cash                                   $100,580

Accounts Receivable          240,000

Inventory                               30,000

Buildings & Equipment       414,200

Total Assets                     $

Liabilities + Equity:

Accounts Payable            $82,500

Common Stock               500,000

Retained Earnings           146,280

Total                              $

Explanation:

a) Data:

General Ledger Balances:

                                                    Debits             Credits

Cash                                           $ 48,000

Accounts receivable                  224,000

Inventory                                      60,000

Buildings and equipment (net) 370,000

Accounts payable                                           $ 93,000

Common stock                                                500,000

Retained earnings                                            109,000

                                              $ 702,000     $ 702,000

b) Budgeted Cash Collections

                                       January       February       March        April

December(actual)       $ 280,000

January $ 400,000         80,000     $320,000

February $ 600,000                           120,000    $480,000

March $ 300,000                                                      60,000   $240,000

April $ 200,000                                                                             40,000

Total                           $360,000     $440,000    $540,000

Ending Accounts Receivable balance = $240,000

c) Cost of goods sold

                                     January       February       March        Total

Sales                          $400,000    $600,000     $300,000    $1,300,000

Shipping costs 5%        20,000         30,000          15,000           65,000

Other Expense 3%        12,000          18,000           9,000            39,000

Depreciation                                                                                    42,000

Cost of goods sold     240,000       360,000        180,000         780,000

Ending Inventory          90,000         45,000          30,000

Goods available         330,000       405,000         210,000

Opening Inventory     (60,000)       (90,000)        (45,000)

Purchases                  270,000        315,000        165,000

b) Budgeted Purchases Disbursement:

                                       January       February        March          April

December(actual)       $ 93,000

January $270,000       135,000       $ 135,000

February $315,000                              157,500      $ 157,500

March $165,000                                                          82,500    $ 82,500

Ending Accounts Payable balance = $82,500

c) Retained Earnings:

Beginning   $109,000

Net Income    82,280

Dividends    (45,000)

Ending      $146,280

d) Buildings & Equipment     370,000

New additions:                        86,200

Less Depreciation expense (42,000)

Balance, net                        $414,200

Pearson Motors has a target capital structure of 45% debt and 55% common equity, with no preferred stock. The yield to maturity on the company's outstanding bonds is 10%, and its tax rate is 25%. Pearson's CFO estimates that the company's WACC is 13.00%. What is Pearson's cost of common equity

Answers

Answer:

0.175  or 17.5%

Explanation:

The calculation of the cost of common equity is shown below:-

WACC = Weight of Equity × Cost of Equity + Weight of Debt × ( 1- Tax rate) × Cost of Debt

0.13 = (0.55 × Cost of equity) + ((0.45 × (1 - 0.25) × 0.10)

0.13 = (0.55 × Cost of equity) + 0.045 × 0.75

(0.55 × Cost of equity) = 0.13 - 0.03375

(0.55 × Cost of equity) = 0.09625

Cost of equity = 0.09625 ÷ 0.55

= 0.175

Therefore for computing the cost of equity we simply applied the above formula.

The December 31, 2014 balance sheet of Barone Company had Accounts Receivable of $400,000 and a credit balance in Allowance for Doubtful Accounts of $32,000. During 2015, the following transactions occurred: sales on account $1,500,000; sales returns and allowances, $50,000; collections from customers, $1,250,000; accounts written off $36,000; previously written off accounts of $6,000 were collected.A. Journalize the 2015 transactions.B. If the company uses the percentage-of-sales basis to estimate bad debt expense and anticipates 3% of net sales to be uncollectible, what is the adjusting entry at December 31, 2015?C. If the company uses the percentage of receivables basis to estimate bad debt expense and determines that uncollectible accounts are expected to be 8% of accounts receivable, what is the adjusting entry at December 31, 2015?D. Which basis would produce a higher net income for 2015 and by how much?

Answers

Answer:

Barone Company

General Journal for 2015 transactions:

Debit Accounts Receivable $1,500,000

Credit Sales Revenue $1,500,000

To record sales on account.

Debit Sales Returns $50,000

Credit Accounts Receivable $50,000

To record sales returns and allowances.

Debit Cash Account $1,250,000

Credit Accounts Receivable $1,250,000

To record cash collections from customers.

Debit Allowance for Doubtful Accounts $36,000

Credit Accounts Receivable $36,000

To record uncollectible written-off.

Debit Accounts Receivable $6,000

Credit Allowance for Doubtful Accounts $6,000

To reinstate previously written off accounts.

Debit Cash Account $6,000

Credit Accounts Receivable $6,000

To record collection of previous write-off.

Adjusting Entry at December 31, 2015:

B. Using 3% of net sales:

Debit Bad Debt Expense $41,500

Credit Allowance for Doubtful Accounts $41,500

To record bad debt expense.

C. Using 8% of Receivables:

Debit Bad Debt Expense $43,120

Credit Allowance for Doubtful Accounts $43,1`20

To record bad debt expense.

D. 3% of net sales produces a higher net income and by $1,620

Explanation:

1. Accounts Receivable

Beginning balance (debit) = $400,000

Sales                                     1,500,000

Sales Returns & allowances   (50,000)

Cash Collections                (1,250,000)

Uncollectible write-off            (36,000)

Reinstatement of write-off       6,000

Cash Collection                       (6,000)

Ending balance                  $564,000

2. Allowance for Doubtful Accounts

Beginning balance (Credit)   $32,000

Uncollectible write-off            (36,000)

Reinstatement of write-off        6,000

Balance pre-year adjustment $2,000

Using 3% of net sales

Bad debt expense                 $41,500

Ending balance (credit)        $43,500

Balance pre-year adjustment $2,000

Using 8% of receivable balance

Bad debt expense                 $43,120

Ending balance (credit)         $45,120

3. Allowance for Doubtful Accounts (Ending balance)

3% of net sales = $1,450,000 x 3% = $43,500

8% of receivables = $564,000 x8% = $45,120

If the December 31, 2014 balance sheet of Barone Company had Accounts Receivable of $400,000 and a credit balance in Allowance for Doubtful Accounts of $32,000.  The journal entries will be:

A. Journalize the 2015 transactions.

Debit Accounts Receivable $1,500,000

Credit Sales Revenue $1,500,000

(To record credit sales)

Debit Sales Returns and Allowances $50,000  

Credit Accounts Receivable $50,000

(To record credit to customers)

Debit Cash  $1,250,000  

Credit Accounts Receivable $1,250,000

(To records collection of receivables)

Debit Allowance for Doubtful Accounts $36,000  

Credit Accounts Receivable $36,000

(To record write of specific account)

Debit Accounts Receivable $6,000

Credit Allowance for Doubtful Accounts $6,000

(To record written off accounts)

Debit Cash Account $6,000

Credit Accounts Receivable $6,000

(To record collection of previous write-off)

B. Preparation of the journal entry using the percentage-of-sales basis

Percentage-of-sales basis:

Sales revenue $1,500,000

Less: Sales Returns and Allowances $50,000

Net Sales $1,450,000

($1,500,000-$50,000)

Bad debt percentage 3%

Bad debt provision $43,500

(3%×$1,450,000)

Journal entry

Dec. 31

Debit  Bad Debt Expense $43,500

Credit Allowance for Doubtful Account $43,500

C.  Preparation of the journal entry using the percentage of receivables basis

Percentage of receivables basis

Account receivable

Dr                          Cr

$400,000           $50,000

$1,500,000         $1,250,000

$6,000                 $36,000

                             $6.000

Bal. $564,000

Allowance for Doubtful Accounts

Dr                                Cr

$36,000                     $32,000

                                   $6,000

                                   Bal. $2,000

Required balance  $45,120

($564,000 × .08)

Less Balance before adjustment $2,000

Adjustment required $43,120

($45,120-$2,000)

Journal entry

Dec. 31

Debit Bad Debt Expense $43,120

Credit Allowance for Doubtful Account $43,120

D. Calculation to determine the basis that would produce a higher net income for 2015 and by how much?

Percentage-of-sales basis $43,500

(3%×$1,450,000)

Percentage of receivables basis $43,120

[($564,000 × .08) -$2,000]

Difference $380

Percentage-of-sales basis will produce a higher net income for 2015 by $380

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https://brainly.com/question/15776572

Ennis, Inc. has 35,000 common shares issued at a $2.25 par value of which 22,000 are outstanding. If Ennis has no other outstanding stock, what size dividend must be paid such that each share receives $3.20

Answers

Answer:

$70,400

Explanation:

The company has:

Number of Shares = 35,000

Par value = $2.25

Outstanding = 22,000

The question requires that we find the size of dividend that must be paid if each share receives $3.20:

Only Outstanding shares are included in dividends contribution.

So to pay 22,000 shares at $3.20

= 22,000 x $3.20

= $70,400

The primary thing that this more sophisticated measure of ROA better captures that the simpler version, defined as ROA* = Net Income / Total Assets, is:

Answers

Answer:

The question is incomplete, the options are missing. The options are the following:

a) It better measures how we did with our assets, irrespective of the mix of debt and equity used to finance those assets

b) It adjusts for non-recurring items in net income

c) It takes out non-cash charges that are in net income

d) It gives a higher number, so it makes the firm look better

And the correct answer is the option A: It better measures how we did with our assets, irrespective of the mix of debt and equity used to finance those assets.

Explanation:

To begin with, the term of "Return on Assets" refers to the measure that is used in the companies and in the financial world in order to understand how the company is doing with the relationship between the net income and the assets so in that way the company can be more certain about what percentage of the assets are more profitable in getting revenue back after the sales.

Based on the company’s 2013 10-K, how much long term debt is maturing between 2014 and 2016? Please provide your answer in millions without comma separator or decimal (Ex: 2345).

Answers

Answer:

Colgate Palmolive Company

The company's 2013 10-K Long-term debts maturing between 2014 and 2016:

Maturing:   Amount

Year          $'millions

2014            895

2015            491

2016           255

Total          1641

Explanation:

The long-term debts of Colgate Palmolive, according to the company's 2013 10-K reports are mainly commercial papers and notes, with various maturity dates.  These debts would not be paid off in 2013.  However, it looks like there was a misclassification of the long-term debts since the 2014 long-term debts would not take more than 12 months to mature.  They should have been classified as current out-right, though there was an acknowledgement and indication that some of these long-term debts were maturing currently.

O'Brian's Department Stores allocates the costs of the Personnel and Payroll departments to three retail sales departments, Housewares, Clothing, and Furniture. In addition to providing services to the operating departments, Personnel and Payroll provide services to each other. O'Brian's allocates Personnel Department costs on the basis of the number of employees and Payroll Department costs on the basis of gross payroll. Cost and allocation information for June is as follows:

Personel Payroll Housewares Clothing Furniture
Direct department cost $6,500 $3,300 $11,900 $20,000 $16,350
Number of employees 5 3 9 15 3
Gross payroll $6,400 $3,400 $11,400 $17,800 $8,000

Required:
a. Determine the percentage of total Personnel Department services that was provided to the Payroll Department.
b. Determine the percentage of total Payroll Department services that was provided to the Personnel Department.
c. Prepare a schedule showing Personnel Department and Payroll Department cost allocations to the operating departments, assuming O'Brian's uses the step method.

Answers

Answer:

O'Brian's Department Stores

a. Determination of the percentage of total Personnel Department services provided to the Payroll Department:

= No. of payroll department employees/Total number of employees x 100

= 3/35 x 100 = 8.57%

b. Determination of the percentage of total Payroll Department services provided to the Personnel Department:

= No. of personnel department employees/Total number of employees x 100

= 5/35 x 100 = 14.29%

c. Schedule showing Personnel Department and Payroll Department Cost Allocations to the Operating Departments, using the step method:

                  Personnel  Payroll    House   Clothing   Furniture       Total

                                                      Wares

Number of

 employees      5               3             9             15              3               35

Direct department

 cost              $6,500   $3,300   $11,900  $20,000   $16,350    $58,050

Gross payroll $6,400   $3,400   $11,400    $17,800    $8,000   $47,000

Personnel    -12,900      1,290      3,870        6,450       1,290       12,900

Payroll            0            -7,990      2,449        3,823         1,718        7,990

Total allocated 0             0       $29,619    $48,073  $27,358  $105,050

Explanation:

a) Data:

1. Personnel and Payroll departments' cost to Housewares, Clothing, and Furniture

2. Personnel and Payroll provide services to each other.

3. Basis of Service Departments' Cost Allocation:

Personnel Department:  Number of employees

Payroll Department: Gross Payroll

4. Cost and Allocation Information for June:

                    Personnel  Payroll    House   Clothing   Furniture    Total

                                                      Wares

Direct department

 cost              $6,500    $3,300    $11,900  $20,000   $16,350     $58,050

Number of

 employees      5               3             9             15              3               35

Gross payroll $6,400    $3,400   $11,400    $17,800    $8,000    $47,000

Personnel    -12,900       1,290      3,870        6,450       1,290       12,900

Payroll            0             -7,990      2,449        3,823         1,718        7,990

Total allocated 0             0        $29,619    $48,073  $27,358  $105,050        

b) Cost Allocation Calculations:

Personal cost = Personal Cost divided by the number of employees in the other departments

= $12,900/30 = $430 per employee

Payroll cost = Payroll cost divided by the total gross payroll in the other departments, excluding personnel and payroll departments

= $7,990/37,200 = $0.21478

c) Allocation of service departments' costs is a method of apportioning costs incurred by service departments to the production departments so that the costs could be captured in the production costs.  There are three methods for allocating service departments' costs to the production departments.  The first and the simplest is the direct method, whereby the costs of service departments are allocated directly to each production department based on the consumption of the service department's services.

The second method is the step method.  With this method, the costs of one service department with the highest cost are allocated to all other departments, including production and other service departments following a stepping methodology.  The costs of the next service department are allocated to the remaining departments.  This step is continued until all the service departments' costs have been allocated.  Note that a service department whose costs have been completely allocated would not be allocated any other cost.

The third method is the reciprocal method.  This establishes the relationship among the service departments and uses the established relationship in a linear equation to allocate the costs of service departments.  While it is more accurate, it is also the most complicated.  Three steps are followed as follows: determine allocation bases, set up the formula, which shows the relationships, and finally add up the allocated costs to the production departments.  Details cannot be discussed here.

Suppose that the risk free rate is 5 and the market portfolio has an expected return of 13 with a volatility of 18 Monsters Inc has a 24 volatility and a correlation with the market of 60 while California Gold Mining has a 32 volatility and a correlation with the market of 7 Assume the CAPM assumptions hold. Monsters' required return is closest to:

a. 15.5%
b. 11.5%
c. 13.0%
d. 10.0%

Answers

Answer:

The answer is option (b) 11.5 %

Explanation:

Solution

Given that

Risk free rate =Rf

= 5%

The market portfolio expected return is = E[Rm]

= 13%

Volatility or standard deviation of market return=σm

=18%

Volatility or standard deviation of Monsters' Inc. return =σi

=24%

The correlation of Monsters' Inc. return with the market = 0.6

Thus

Beta of Monsters' Inc. is computed by applying the formula shown below:

βi =Cov (i,M)/σ²m =ρ * σi *σm/σ²m

= ρ * σi/ σm

Here,

Cov(i,m) is the Covariance between the stick and the market return which is given by the formula below:

Cov(i,m) = ρ* σi*σm

ρ refers to the correlation between the stock i return and Market return

Hence, Beta of Monsters' Inc. becomes:

βi = (0.6*24%)/18% = 0.8

Now we compute the required return on Monsters Inc we will use the CAPM Equation given as:

CAPM Equation:

E[Ri] = Rf + βi*(E[Rm]-Rf)

So,

The Required return on Monsters' Inc. stock = E[Ri] =5% + 0.8*(13% - 5%)

= 5%+6.4%

=11.4%

Therefore Monsters' required return is nearest to: 11.4 % or 11.5%

Rank the steps of the (sandwich) ELISA procedure from first step to last step. Do not overlap any steps.

Answers

Answer and Explanation:

The ELISA refers to the enzyme-linked immunosorbent assay (ELISA) It is used to determine the existence of an antigen in a sample with the help of antibiotics

The ELISA procedure in sequence form is shown below:

1. The capture antibody is added and then clean it

2. Now adding the blocking buffer and then clean it

3. Now add the samples with controls, Hatch it and clean it

4. Add horseradish peroxidase (HRP) conjugated with the antibody, Hatch it and clean it

5. Add Thymidine monophosphate (TMP)

6. And finally, the last step is to record the results

If a firm's goal is to maximize its earnings per share, this is the best way to maximize the price of the common stock and thus shareholders' wealth.

Answers

Answer:

False

Explanation:

As maximization of the earnings per share might not be the same thing as the wealth maximization which is the primary goal of the company because the company not only has to generate higher profits but also manage all the risks of the entity which might increase by unethical trading in race to increase earnings per share. Furthermore, to enjoy less costly debt finance which would increase the earnings per share, would result in increase in financial risk, which might again head the company towards disaster if not well managed.

The other solid point against the statement would be that the primary purpose can not be the maximization of earnings per share as it stresses upon spending less on corporate social responsibility and as the result the company stock will be less valued at stock exchange. The less valued stock is because the companies like Dow and S & P Global adds no green value to the stock if the company is not spending on social responsibility programs.

Hence the statement is incorrect.

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