Answer: $308,700
Explanation:
First find proportion of rental income that comes from Unit B out of the total:
= (13,650 * 0.60) / [(3,510 * 1) + (13,650 * 0.60)]
= 8,190 / 11,700
= 70%
Joint cost = 385,000 + 56,000
= $441,000
Proportion to be assigned to Unit B:
= 441,000 * 70%
= $308,700
Explain the role of secondary data in gaining customer insights
The BCD Partnership plans to distribute cash of $20,000 to partner Brad at the end of the tax year. The partnership reported a loss for the year, and Brad's share of the loss is $10,000. At the beginning of the tax year, Brad's basis in his partnership interest, including his share of partnership liabilities, was $15,000. The partnership expects to report substantial income in future years.
Required:
a. What ordering rules are used to calculate Bradâs ending basis in his partnership interest?
b. How much gain or loss will Brad report for the tax year?
c. Will the deduction for the $10,000 loss be suspended? Why or why not?
d. Could any planning opportunities be used to minimize any negative tax ramifications of the distribution? Explain.
Answer:
See below
Explanation:
a.
The rules used here is called the ordering rules. It can also be called reduce basis distribution.
b.
For the tax year report , the gain would be $5,000
c.
The deduction for the loss of $10,000 could be suspended or put on hold.
The reason is that losses are not deductible to pay off shareholders
d.
It is true that there are planning opportunities, which could mitigate the negative tax ramifications of the distribution as are under tax diversification. Here, it will open more room for flexibility in order to optimally the most tax efficient method of liquidating assets.
Wildhorse Company produces golf discs which it normally sells to retailers for $7 each. The cost of manufacturing 24,200 golf discs is:
Materials $ 12,342
Labor 36,542
Variable overhead 25,894
Fixed overhead 47,916
Total $122,694
Wildhorse also incurs 5% sales commission ($0.35) on each disc sold.
McGee Corporation offers Wildhorse $4.80 per disc for 4,800 discs. McGee would sell the discs under its own brand name in foreign markets not yet served by Wildhorse. If Wildhorse accepts the offer, its fixed overhead will increase from $47,916 to $53,006 due to the purchase of a new imprinting machine. No sales commission will result from the special order.
(a) Prepare an incremental analysis for the special order. (Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).)
Reject
Order Accept
Order Net Income
Increase
(Decrease)
Revenues $ $ $
Materials
Labor
Variable overhead
Fixed overhead
Sales commissions
Net income $ $ $
(b) Should Wildhorse accept the special order?
Wildhorse should
reject/accept
the special order .
Answer:
Wildhorse Company
Incremental Analysis for the special order:
Sales Revenue (4,800 * $4.80) $23,040
Variable cost (4,800 * $3.09) 14,832
Contribution margin $8,208
Fixed overhead increase 5,090
Net Income $3,118
b) Wildhorse should accept the special order.
Explanation:
a) Data and Calculations:
Materials $ 12,342
Labor 36,542
Variable overhead 25,894
Total variable cost $74,778
Unit variable cost $3.09 ($74,778/24,200)
Fixed overhead 47,916
Total $122,694
Units produced = 24,200
Selling price per unit = $7
Additional cost:
Sales commission = $0.35 per disc
Special order for 4,800 discs at $4.80
Increase in fixed overhead $5,090 ($53,006 - $47,916)
Which doctor was the first to read the patient's chart in grey's anatomy
Answer:
mer
Explanation
i think im not sure that was so long ago byee
Here is a linear demand function: Q = 10 -0.5P. Find its price function by inverting the demand function. Then find its total revenue function by multiplying through by Q. The linear demand function Q = 400 -250P inverts into the price function P = 1.6 -0.004Q. Multiplying this by Q gives its total revenue function TR = 1.6Q -0.004. Evaluate the following expression.
Y = 5(2X + 3)2 -2X2
Answer:
[tex]P = 20 - 2Q[/tex]
Explanation:
[tex]Q = 10 - 0.5P[/tex]
Price function can be estimated by inverting the demand function.
[tex]Q = 10 - 0.5P \\\\0.5P = 10 - Q\\P = 10/0.5 - Q/0.5 \\P = 20 - 2Q[/tex]
This is the price function.
Total revenue function can be estimated using the given formula,
[tex]TR = P*Q \\ = (20 - 2Q) Q \\ = 20Q - 2Q^2[/tex]
The linear demand function is given by,
[tex]Q = 400 - 250P \\[/tex]
Price function is given by,
[tex]P = 1.6 - 0.004Q \\[/tex]
Total revenue function is thus given by,
[tex]TR = P*Q \\ = 1.6Q - 0.004Q^2[/tex]
[tex]Y = 5(2X+3)^2 - 2X^2 \\Y = 5(4X^2 + 9 + 12X) - 2X^2\\Y = 20X^2 + 45 + 60X - 2X^2\\Y = 18X^2 + 45 + 60X \\[/tex]
The derivative of Y with respect to x is,
[tex]dY/dX = 36X + 60\\[/tex]
Equating this equal to 0 we get,
[tex]36X + 60 = 0 \\36X = -60 \\X = -10/6 \\\\X= -1.66[/tex]
You are considering opening a small flower store. You anticipate that you will earn $100,000 each year in revenue. It will cost you $30,000 each year to rent the space necessary to run your business. Additionally, you will need to spend $10,000 each year on flower seeds, utilities, and other expenses necessary to operate your flower shop. You have just graduated from college with a degree in economics and have received an offer to work for a firm with a yearly salary of $70,000.
What is your anticipated economic profit of opening the flower shop?
Based on this information, you ________ open the flower store.
1. The anticipated economic profit for opening the flower shop is $130,000.
2. Based on the information, you should not open the flower store.
Data and Calculations:
Annual revenue = $100,000
Rent expense = $30,000
Cost of goods and others = $10,000
Accounting income = $60,000
Opportunity cost = $70,000
Economic loss = ($10,000) ($60,000 - $70,000)
Anticipated economic profit = $130,000 ($60,000 + $70,000)
Thus, the opening of the flower shop will produce an economic loss for the entrepreneur.
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Meiji Isetan Corp. of Japan has two regional divisions with headquarters in Osaka and Yokohama. Selected data on the two divisions follow: Division Osaka Yokohama Sales $ 10,200,000 $ 32,000,000 Net operating income $ 816,000 $ 3,200,000 Average operating assets $ 2,550,000 $ 16,000,000 Required: 1. For each division, compute the return on investment (ROI) in terms of margin and turnover. 2. Assume that the company evaluates performance using residual income and that the minimum required rate of return for any division is 17%. Compute the residual income for each division. 3. Is Yokohama’s greater amount of residual income an indication that it is better managed?
Answer: See explanation
Explanation:
1. The return on investment for Osaka will be:
= (816000/10200000) × (10200000 × 2550000)
= 32%
The return on investment for Yokohama will be:
= (3200000/32000000) × (32000000/16000000)
= 20%
2. See attachment
3. Yokohama’s greater amount of residual income is not an indication that it is better managed. Since Yokohama Division is bigger than Osaka Division, it's expected that Yokohama will have a greater residual amount.
Zintendo, Inc., produces and sells a single product, the Zintendo Stitch gaming console, whose selling price is $400.00 per gaming console and whose variable costs are $224.00 per gaming console. The company's fixed costs are $5,935,750 per year. The current sales volume for the year ended 12/31/2020 is 36,300 gaming consoles.
Required:
a. Prepare a contribution margin income statement for the year ended 12/31/2020 at the current sales volume.
b. Determine the break-even point for the year.
c. What is the company's margin of safety for the year?
Answer and Explanation:
a. The preparation of the contribution margin income statement is presented below
Sales (36,300 × $400) $14,520,000
Less: variable cost (36,300 × $224) $8,131,200
Contribution margin $6,388,800
Less: fixed cost - $5,935,750
net income $453,050
b. The break even point is
In units
= Fixed cost ÷ contribution margin per unit
= $5,935,750 ÷ ($400 - $224)
= 33,726 units
In dollars
= Fixed cost ÷ contribution margin ratio
= $5,935,750 ÷ ($176 ÷ $400)
= $13,490,341
c. The margin of safety
In units
= Total sales units - break even units
= 36,300 - 33,726
= 2,574 units
In dollars
= Total sales - break even sales
= $14,520,000 - $13,490,341
= $1,029,659
On June 30, Petrov Co. has $140,800 of accounts receivable.
July 4 Sold $8,075 of merchandise (that had cost $5,168) to customers on credit, terms n/30.
9 Sold $20,398 of accounts receivable to Main Bank. Main charges a 8% factoring fee.
17 Received $4,441 cash from customers in payment on their accounts.
27 Borrowed $11,656 cash from Main Bank, pledging $15,153 of accounts receivable as security for the loan.
Required:
Prepare journal entries to record the above selected July transactions.
Answer:
July 04
Dr Accounts receivable $8,075
Cr Sales $8,075
July 04
Dr Cost of goods sold $5,168
Cr Merchandise inventory $5,168
July 09
Dr Cash $18,766.16
Dr Factoring fee expense $1,631.84
Cr Accounts receivable $20,398
July 17
Dr Cash $4,441
Cr Accounts receivable $4,441
July 27
Dr Cash $11,656
Cr Notes payable $11,656
July 27
No journal entry
Explanation:
Preparation of journal entries to record July transactions.
July 04
Dr Accounts receivable $8,075
Cr Sales $8,075
July 04
Dr Cost of goods sold $5,168
Cr Merchandise inventory $5,168
July 09
Dr Cash $18,766.16
($20,398-$1,631.84)
Dr Factoring fee expense $1,631.84
($20,398*8%)
Cr Accounts receivable $20,398
July 17
Dr Cash $4,441
Cr Accounts receivable $4,441
July 27
Dr Cash $11,656
Cr Notes payable $11,656
July 27
No journal entry
In wintry conditions, highway safety is improved by treating road services with substances that will provide traction and/or melt snow and ice. Sand and rock salt are two widely used substances. Recently, a combination of beet juice and rocksalt is being used in some parts of the country to treat road surfaces. Suppose you have been asked to provide a list of factors to consider for a switch from rocksalt alone to using a combination of beet juice and rocksalt. Name the major considerations you would take into account in making a decision in the following categories: cost considerations, environmental considerations, both positive and negative, and other considerations.
Answer:
There will be cost consideration, economic consideration, environmental consideration, human factors and social factors.
Explanation:
There should be most important consideration which the highway authorities should analyze is cost. The authorities should identify the additional cost which will need to be incurred in order to use the combination of beet juice and rock salt. There should be reliability considered that the road are not affected with the use of beet juice and there is no breakage on the roads. The environment is not affected with the use of these material.
Explain three factors that had a negative impact on the financial performance of Unibic in its early years.
Hello. You forget to present the text to which this question refers. The text is:
In 2007, Lighthouse Funds acquired a 25% stake in Unibic from Unibic Australia for Rs. 200 million. In 2010, Unibic Australia started making losses and wanted to withdraw from the Indian market. At that time, Unibic operated solely in the premium, high-margin cookies segment in India, with a share of around 8%. It had a market presence primarily in south India and was exporting to the Middle East and Hong Kong. It had strategic alliances to make cookies for various private players. However, it was not yet making profits and was cashstrapped... Over the next few years, Unibic grew rapidly. Its growth was primarily fueled by the changes sweeping through the Indian biscuit industry, wherein glucose biscuits that had dominated the market, gradually lost out to cream biscuits and cookies. The reasons for the shift included rising disposable incomes leading to an increase in consumption of premium biscuits; a larger number of manufacturing facilities of premium biscuits; growing health awareness; innovation bringing in attractive new products; rising affordability of cookies; and increase in eye-catching packaging. Over the years, Unibic regularly introduced fresh and unique flavors, ultimately producing over 30 variants of cookies. Its products could be broadly categorized into chocolate, butter, milk, savory, and health. The company considered its target market to be between the ages of 14 and 40. It continued its efforts at innovation and produced new products which would appeal to its target market. In 2015, Unibic had used celebrity endorsement by signing on south Indian actor Shruti Hassan, for over a year.
It stated that it wanted someone who was relevant and would give the brand a boost to get to the numbers it wanted in the South...
Unibic didn’t advertise much in print media; TV remained the company’s core focus and got the largest chunk of its advertising spend, followed by digital and OOH. Instead of following the traditional strategy of having a similar marketing campaign across markets, Unibic employed a unique strategy in each market, thereby playing to its strengths in each market while keeping in mind the market conditions and consumption patterns...
From 2019 onward, Unibic started feeling the heat of the economic slowdown in India. The Indian economic slowdown of 2019 led to a serious and continuing decline in the country’s real estate, automobile and construction sectors and in overall consumption demand. The second quarter (July- September) of the financial year (April 2019-March 2020) witnessed a drastic fall in the gross domestic product (GDP) growth rate to 4.5%. The main reasons attributed to the fall in the GDP growth rate were – contraction in manufacturing activity, weakened investments, and lower consumption demand. As of 2020, Unibic had the largest wire cut cookie manufacturing plant in India. The plant had the capability to manufacture 100 tonnes of cookies each day, with five production lines. While it used 98% of its production capability to produce its own brand, the rest was used to manufacture for private label brands – six in India and 10 across the world. It had annual revenu7 es of Rs. 5 billion. It also exported its products to more than 21 countries including across Australia, North America, the UK, and Europe, Asia, the Middle East, and New Zealand. It derived 45% of its earnings from the south of India.
Answer and Explanation:
Unibic's main mistake was not to give importance to the fluctuation of demand for its products, in order to be able to adjust their prices to the demand rates that consumers presented. This is because as the demand for the product decreased, Unibic should decrease the price, allowing the product to remain attractive to consumers.
A second mistake was not following the standard of disclosure of other cookie makers. This is because if other companies that make cookies advertise their products in a specific place, it means that this place has a large number of cookie consumers, who will see the products and put them on their shopping lists.
A third mistake was the high expenditure on disclosure. Unibic decided to use the most expensive media vehicle to advertise a product, in addition to maintaining the contract with a celebrity, who should receive a high salary for his work. Unibic should have looked for cheaper vehicles, which would optimize its profit, but decrease spending.
A company's flexible budget for the range of 35,000 units to 45,000 units of production showed variable overhead costs of $3.80 per unit and fixed overhead costs of $74,000. The company incurred total overhead costs of $209,800 while operating at a volume of 40,000 units. The total controllable cost variance is:Multiple Choice$16,200 unfavorable.$10,000 favorable.$2,800 unfavorable.$2,800 favorable.$16,200 favorable.
Answer:
$16,200 favorable
Explanation:
The computation of the total controllable cost variance is shown below:
= Budgeted overhead - actual overhead
= (40,000 units × $3.80 + $74,000) - $209,800
= ($152,000 + $74,000) - $209,800
= $226,000 - $209,800
= $16,200 favorable
Hence, the total controllable cost variance is $16,200 favorable
At the end of the video, Keith Reinhard says that advertisers have the ability not only to lift up the brands they work for but also to lift up the human spirit. Do you think this is true? Is it their responsibility? Explain.
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On January 14, at the end of the second week of the year, the totals of Castle Company's payroll register showed that its store employees' wages amounted to $33,482 and that's warehouse wages amounted to $13,560. Withholdings consisted of federal income taxes, $5,110, employer's Social Security taxes at the rate of 6.2 percent, and employees' Social Security taxes at a rate of 6.2 percent. Both the employer's and employees' Social Security taxes are based on the first $118,500, and no employee has reached the limit. Additional withholdings were Medicare taxes at the rate of 1.45 percent on all earnings and charitable contributions withheld, $845.
Required:
a. Calculate the amount of Social Security and Medicare taxes to be withheld and write the general journal entry to record the payroll. Round answers to two decimal places.
b. Write the general journal entry to record the employer's payroll taxes assuming that the federal unemployment tax is 0.6 percent of the first $7,000, that the state unemployment tax is 5.4 percent of the same base, and that no employee has surpassed the $7,000 limit.
Answer:
a)
Dr Store wages expense 33,482
Dr Warehouse wages expense 13,560
Cr Federal income tax withholdings payable 5,110
Cr Social security taxes withheld payable 2,916.60
Cr Medicare taxes withheld payable 682.11
Cr Charitable contributions withheld payable 845
Cr Wages payable 37,488.29
b)
Dr Payroll taxes expense 6,421.23
Cr Social security taxes payable 2,916.60
Cr Medicare taxes payable 682.11
Cr SUTA taxes payable 2,540.27
Cr FUTA taxes payable 282.25
The gross domestic product (GDP) of the United States is defined as the __________all _____________ in a given period of time.
Based on this definition, indicate which of the following transactions will be included in (that is, directly increase) the GDP of the United States in 2018
a. Rotato, a U.S. tire company, produces a set of tires at a plant in Michigan on September 13, 2018. It sells the set of tires to Speedmaster for use in the production of a two-door coupe that will be made in the United States in 2018.
b. Zippycar, a U.S. automobile company, produces a convertible at a manufacturing plant in Minneapolis on January 21, 2018. It sells the car at a dealership in Houston on February 10, 2018.
c. Sofaland, a Swedish furniture company, produces a table at a plant in Virginia on December 5, 2018. It sells the table to a college student on December 24.
d. You chop down a cherry tree on your property in California and make a dining room table in 2018. A similar table sells for $800 in a local furniture store.
Answer:
MARKET VALUE OF
FINAL GOODS AND SERVICES, PRODUCED IN THE U.S.
NOT INCLUDED
INCLUDED
INCLUDED
NOT INCLUDED
Explanation:
Gross domestic product is the total sum of final goods and services produced in an economy within a given period which is usually a year
GDP calculated using the expenditure approach = Consumption spending by households + Investment spending by businesses + Government spending + Net export
Net export = exports – imports
When exports exceed import there is a trade deficit and when import exceeds import, there is a trade surplus.
Items not included in the calculation off GDP includes:
1. services not rendered to oneself
2. Activities not reported to the government
3. illegal activities
4. sale or purchase of used products
5. sale or purchase of intermediate products
a. the tire sold is not included in US GDP because it is an intermediate good. An intermediate good is a good that is used in the production of other goods. The tire is used as an input in the production of a two-door coupe
b. The car would be included as part of business spending in US GDP
C. The table would be included in GDP as part of consumption spending on durables
d. Services rendered to ones self is not recorded in GDP
Kingston Manufacturing has 27,000 labor hours available for producing X and Y. Consider the following information:
Product X Product Y
Required labor time per unit (hours) 2 3
Maximum demand (units) 6,000 8,000
Contribution margin per unit $5 $6
Contribution margin per labor hour $2.50 $2
If Kingston follows proper managerial accounting practices, which of the following production schedules should the company set?
Product A Product B
A. 0 units 8,000 units
B. 1,500 units 8,000 units
C. 6,000 units 0 units
D. 6,000 units 5,000 units
E. 6,000 units 8,000 units
A. Option A.
B. Option B.
C. Option C.
D. Option D.
E. Option E.
The following costs are relevant to the decision situation cited except:____.
a. the cost of hiring a full-time staff attorney, in a decision to establish an in-house legal department or retain the services of a prominent law firm.
b. the remodeling cost of existing office space, in a firm's decision to stay at its current location or move to a new building.
c. the long-term salary costs demanded by Joe Torrez (a superstar) and Rip Moran (an average player) in baseball contract negotiations, in a decision that determines the amounts by which ticket prices must be raised.
d. the cost to enhance an airline's Web site, in a decision to expand existing service to either Salt Lake City or Phoenix.
e. the commissions that could be earned by a salesperson, in a decision that involves salesperson compensation methods (i.e., commissions or flat monthly salaries).
Answer and Explanation:
In the case when Smith follows proper accounting practice with respect to the managerial accounting so the production schedules should the company set is
Product A Product B
D. 6,000 units 5,000 units
D. Option D
In addition to this,
The costs i.e not relevant for the decision purpose is
D. the cost i.e. incurred for increase a website of an airline in a decision to diversify inherent service to Salt Lake City or Phoenix.
ect the degree of leverage that completes the following sentence. Thedegree of operating leverage (DOL) is the percentage change in EPS that results from a given percentage change in sales, and it equals the product of the degrees of operating and financial leverage. Expert Analysts Resources (EAR) has provided you with the following information about three companies you are currently evaluating: Praxis Corp. Three Waters Co. Axis Chemical Co. Degree of Operating Leverage (DOL) 2.0 3.0 3.0 Degree of Financial Leverage (DFL) 6.5 4.0 3.5 According to this information, which company would be considered the riskiest
Answer: Praxis Corp
Explanation:
To know the company that would be considered the riskiest, we've to calculate the degree of total leverage for each firm and this will be:
Praxis Corp:
Degree of total leverage = Degree of operating leverage × Degree of financial leverage
= 2.0 × 6.5
= 13.0
Three Waters Co.
Degree of total leverage = Degree of operating leverage × Degree of financial leverage
= 3.0 × 4.0
= 12.0
Axis Chemical Co.
Degree of total leverage = Degree of operating leverage × Degree of financial leverage
= 3.0 × 3.5
= 10.5
Based on the calculation, since the degree of total leverage for Praxis Corp is the highest, it simply means that it's the riskiest.
You purchased five August 13 futures contracts on soybeans at a price quote of 1056′6. Each contract is for 5,000 bushels with the price quoted in cents and 1/8 ths of a cent per bushel. Assume the contract price is 1061′4 when you close out your contract six weeks from now. What will be your total profit or loss on this investment? A) $6,480.75 B) $1,187.50 C) $950.25 D) $24,000.00 E) $16,200.50
Answer:
B) $1,187.50
Explanation:
The computation of the total profit or loss on this investment is given below:
Expiration price = 1061'4 = 1061 + 4 ÷ 8 = 1061.50
Quoted price = 1056'6 = 1056 + 6 ÷ 8 = 1056.75
Now the profit is
= (1061.50 - 1056.75) × 5000 × 5
= $1,187.50
Hence, the profit on this investment is $1,187.50
Kesselring Corporation makes one product and has provided the following information to help prepare the master budget for the next three months of operations: Budgeted unit sales (all on credit): July8,400 August8,800 September12,200 Raw materials requirement per unit of output 4pounds Raw materials cost$3.00per pound Direct labor requirement per unit of output 2.8direct labor-hours Direct labor wage rate$18.00per direct labor-hour Predetermined overhead rate (all variable)$11.00per direct labor-hour The ending finished goods inventory should equal 40% of the following month's sales. The budgeted finished goods inventory balance at the end of August is closest to: (Round your intermediate calculations to 2 decimal places.) Select one: A. $454,816 B. $358,192 C. $304,512 D. $150,304
The selection of delegates to the national convention produces _____.
eligen a los presidentes
Presented below is information for Marin Company.
1. Beginning-of-the-year Accounts Receivable balance was $23,100.
2. Net sales (all on account) for the year were $104,700. Marin does not offer cash discounts.
3. Collections on accounts receivable during the year were $85,400.
Marin is planning to factor some accounts receivable at the end of the year. Accounts totaling $13,900 will be transferred to Credit Factors, Inc. with recourse. Credit Factors will retain 6% of the balances for probable adjustments and assesses a finance charge of 5%. The fair value of the recourse obligation is $1,075.
Required:
Prepare (summary) journal entries to record the items noted above.
Answer:
Debit Accounts Receivable for $104,700; and Credit Sales Revenue for $104,700.
Debit Cash for $85,400; and Credit Accounts Receivable for $85,400.
Explanation:
The (summary) journal entries to record the items noted will look as follows:
Particulars Debit ($) Credit ($)
Accounts Receivable 104,700
Sales Revenue 104,700
(To record net sales (all on account) for the year.)
Cash 85,400
Accounts Receivable 85,400
(Collections on accounts receivable during the year.)
Hugo Inc., a calendar year taxpayer, sold two operating assets this year. The first sale generated a $38,700 Section 1231 gain, and the second sale generated a $59,400 Section 1231 loss. As a result of these sales, Hugo should recognize: Multiple Choice $20,700 ordinary loss $38,700 Section 1231 gain treated as capital gain and $59,400 ordinary loss $20,700 capital loss None of these choices are correct
Answer:
$20,700 ordinary loss
Explanation:
Based on the information given if the first Operating assets generated a gain of the amount of $38,700 while the second assets generated a loss of the amount of $59,400 after been sold out which indicate or means that Hugo should recognize the amount of $20,700 ORDINARY LOSS which is calculated as :
Ordinary loss =-$59,400+$38,700
Ordinary loss =-$20,700
Therefore As a result of these sales, Hugo should recognize:$20,700 ORDINARY LOSS
When bonds are issued at a discount and the effective interest method is used for amortization, at each subsequent interest payment date, the cash paid is:
Question Completion:
A. More than the effective interest.
B. Less than the effective interest.
C. Equal to the effective interest.
D. More than if the bonds had been sold at a premium
Answer:
When bonds are issued at a discount and the effective interest method is used for amortization, at each subsequent interest payment date, the cash paid is:
B. Less than the effective interest.
Explanation:
This cash payment is the product of the bond's face value multiplied by the coupon rate. The interest expense is increased by the amortized portion of the discount for the particular period. This means that the interest expense will be higher than the cash payment for interest because of the discount granted at issuance. And the interest expense is the product of the outstanding debt multiplied by the effective interest rate.
The cash paid would be less than the effective interest at each subsequent interest payment date when bonds are issued at a discount and the effective interest method is used for amortization.
The cash payment is computed by multiplying the face value of the bond with coupon rate. Here, an increase in interest expense is seen due to the discount in the amortized part.
Thus, the payment of interest would exceed means that the interest the payments in cash due to the issuance of the bond at discount.
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Synovec Co. is growing quickly. Dividends are expected to grow at a rate of 10.5 percent for the next three years, with the growth rate falling off to a constant 5.4 percent thereafter. If the required return is 10.6 percent and the company just paid a dividend of $5.00, what is the current share price
Answer:
Current share price = $116.04
Explanation:
Note: See the attached file for the calculation of present values (PV) for year 1 to 3 dividends.
From the attached excel file, we have:
Previous year dividend in year 1 = Dividend just paid = $5
Total of dividends from year 1 to year 3 = $14.97289157241870
Year 3 dividend = $6.746163125
Therefore, we have:
Year 4 dividend = Year 3 dividend * (100% + Dividend growth rate in year 4) = $6.746163125 * (100% + 5.4%) = $7.11045593375
Share price at year 3 = Year 4 dividend / (Rate of return - Perpetual dividend growth rate) = $7.11045593375 / (10.6% - 5.4%) = $136.7395371875
PV of share price at year 3 = Price at year 3 / (100% + Required return)^Number of years = $136.7395371875 / (100% + 10.6%)^3 = $101.07150317234
Therefore, we have:
Current share price = Total of dividends from year 1 to year 3 + PV of share price at year 3 = $14.97289157241870 + $101.07150317234 = $116.04
The behavioral approach is being applied when a corporate trainer ______. Group of answer choices gives a motivational speech to the executive team to boost morale administers an Emotional Intelligence test to match leaders and followers uses assessments to help leaders discover their relative focus on goals vs. people offers employees an in-depth look at their personality traits for behavioral improvement
Answer:
The right option is C (uses assessments.........vs. people).
Explanation:
Throughout the enterprise, the behavioral approach, which describes the conduct of managers, is used by allowing representatives to determine their attention on objectives and individuals.This highlights empirical research into observed behavioral reactions and their situational factors.Such given solutions do not concern the solution in question. Thus, the answer above is right.
Pickering Financial Management believes that the biotechnology industry is a good investment and is considering investing in one of two companies. However, one company, BrightWorid, Inc., uses the FIFO method of inventory, and another company, BioTech, Inc., uses LIFO. Because the companies use two different methods and because BioTech is a much larger company, it is difficult to compare their net incomes to see which is a better investment. The following information about the two companies is available from their annual reports:
BrightWorid, Inc.
2018 2017
Inventory $ 96,000 $ 80,000
Cost of goods sold. 1,144,000 913,000
Sales....... 1,760,000 1,660,000
Net income 197,000 190,000
BioTech, Inc. 2018 2017
Inventory (See Note), 344,000 $ 299,000
Cost of goods sold 3,864,000 4,224,000
Sales 7,360,000 7,040,000
Net income 830,000 730,000
Notes to the Financial Statement. If BioTech had used the FIFO method, inventory would have been $21.000 higher at the end of 2017 and $26,000 higher at the end of 2018.
To better compare the two companies, Pickering wants you to prepare the following analysis.
Showthe computation of BioTech's cost of goods sold in 2018 using the LIFO method.
Prepare summary journal entries for 2018 for BioTech's purchases of inventory (assume all purchases are on account), sales (assume all are on account), and cost of goods sold. A T- account has been set up for inventory. Post these transactions into the T-account. The company uses the perpetual inventory method.
Show the computation of BioTech's cost of goods sold for 2018 using the FIFO method.
Compute the gross profit percentage for 2018 for both BrightWorid and BioTech using FIFO figures for both.
Compute the inventory turnover for 2018 for both BrightWorid and BioTech using FIFO figures for both.
Which company appears stronger? Support your answer.
Answer:
Pickering Financial Management
A. Summary journal entries for 2018: BioTech:
Debit Inventory $3,909,000
Credit Accounts Payable $3,909,000
To record the purchase of inventory on account.
Debit Accounts Receivable $7,360,000
Credit Sales revenue $7,360,000
To record the sale of goods on account.
Debit Cost of goods sold $3,864,000
Credit Inventory $3,864,000
To record the cost of goods sold.
B. T-accounts:
Inventory
Account Titles Debit Credit
Beginning balance $299,000
Accounts Payable 3,909,000
Cost of goods sold $3,864,000
Ending balance 344,000
C. Computation of Cost of Goods Sold using the FIFO method:
Beginning inventory $320,000
Purchases 3,909,000
Goods available 4,229,000
less Ending inventory 370,000
Cost of goods sold $3,859,000
D. The gross profit percentage, using FIFO:
BrightWorld BioTech
Gross profit percentage 35% 48%
E. Inventory Turnover: 20x 21x
F. BioTech is doing better and appears stronger than BrightWorld. Its gross profit margin is higher than BrightWorld's. It turns its inventory 21 times as against BrightWorld's 20x, though they are maintaining similar level of net income percentages.
Explanation:
a) Data and Calculations:
Inventory methods:
BrightWorld, Inc. = FIFO (First-in, First-out)
BioTech, Inc. = LIFO (Last-in, First-out)
BrightWorid, Inc.
2018 2017 Average
Inventory $ 96,000 $ 80,000 $88,000
Sales....... 1,760,000 1,660,000
Cost of goods sold. 1,144,000 913,000
Gross profit 616,000 747,000
Net income 197,000 190,000
BioTech, Inc.
2018 2017
Inventory (See Note), 344,000 $ 299,000
Cost of goods sold 3,864,000 4,224,000
Sales 7,360,000 7,040,000
Net income 830,000 730,000
BioTech, Inc. Inventory using FIFO:
2018 2017 Average
Inventory $370,000 $320,000 $345,000
Sales 7,360,000 7,040,000
Cost of good sold 3,859,000 using FIFO
Gross profit 3,501,000
LIFO
Cost of goods sold $3,864,000
Ending inventory 344,000
Goods available $4,208,000
Beginning inventory 299,000
Purchases $3,909,000
Gross profit percentage:
BrightWorld = Gross profit/Sales * 100 = $616,000/1,760,000 * 100 = 35%
BioTech = $3,501,000/$7,360,000 * 100 = 48%
Inventory Turnover = Net Sales/Average Inventory
BrightWorld = $1,760,000/$88,000 = 20x
BioTech = $7,360,000/$345,000 = 21x
Mutual Company enters into a contract to employ Neil as an investment manager for two years. During the first year, Neil is often absent without explanation and when present fails to adequately monitor and manage Mutual’s investments.
Q1. Refer to Fact Pattern 17-A1. With respect to Mutual’s duties, Neil’s performance most likely
a. discharges Mutual from the contract.
b. has no effect on Mutual’s performance.
c. increases Mutual’s duties under the contract.
d. suspends Mutual’s duty to perform.
Q2. Refer to Fact Pattern 17-A1. Neil’s performance is most likely
a. a material breach.
b. a minor breach.
c. Mutual’s breach.
d. no breach.
Answer:
Q1 : a. discharges mutual from the contract.
Q2 : a. a material breach
Explanation:
Neil is hired by Mutual company for a two year contract. Neil has certain duties which he has to fulfill during the employment term. Neil is often absent without any proper explanation and reason. This is against the term of employment contract. When he is in the office he is not attentive and is not able to manage the mutual investments. Neil is doing a material breach since he is not fulfilling the basic requirements.
Identify which economic indicator should be used to track each of the following. a. The overall size of the economy the unemployment rate real GDP nominal GDP real GDP growth b. Labor market performance inflation business confidence the unemployment rate consumer confidence c. The future trajectory of economic activity the employment cost index real GDP inflation annual growth of the S&P 500 d. Wages and benefits business confidence real GDP the employment cost index consumer confidence
Answer:
a. The overall size of the economy ⇒ real GDP
The real GDP is adjusted for inflation and so would show the overall size of the economy in more accurate terms.
b. Labor market performance ⇒ the unemployment rate
The unemployment rate is best used to show how the labor market is performing because it shows the amount of people who are employed and those who are not in a given period.
c. The future trajectory of economic activity ⇒ annual growth of the S&P 500
The S&P 500 shows the performance of 500 large companies in the U.S. Their performance can be used to anticipate the trajectory of future economic activity because they influence the economy due to their large size.
d. Wages and benefits ⇒ the employment cost
The employment cost shows the wages and benefits that have to be paid to labor.
During 2020, Vaughn Furniture Company purchases a carload of wicker chairs. The manufacturer sells the chairs to Vaughn for a lump sum of $131,670 because it is discontinuing manufacturing operations and wishes to dispose of its entire stock. Three types of chairs are included in the carload. The three types and the estimated selling price for each are listed below.
Type No. of Chairs Estimated Selling
Price Each
Lounge chairs 880 $90
Armchairs 660 80
Straight chairs 1,540 50
During 2020, Sarasota sells 440 lounge chairs, 220 armchairs, and 264 straight chairs.
What is the amount of gross profit realized during 2020? What is the amount of inventory of unsold straight chairs on December 31, 2020?
Answer:Gross profit realized during 2020 =$30,899
amount of inventory of unsold straight chairs on December 31, 2020 =$63,800
Explanation:
A)Vaughn Furniture Company purchases a carload of wicker chairs at a cost of a lump sum of $131,670 in 2020
Now the total number of chairs purchased per type is;
Lounge chairs 880
Armchairs 660
Straight chairs 1,540
Total = 3,080 chairs purchased
Also, Vaughn sells
440 Lounge chairs at $90 each = 440 x 90=$39,600
220 Armchairs at $80 each= 220 x 80 =$ 17600
264 Straight chairs at $50 each = 264 x 50 =$13,200
Total selling price of 924 chairs =$39,600+$ 17600+$13,200 =$70,400
Now , if 3,080 chairs can be purchased for a-lump sum amount of $131,670
924 chairs can be puchased in a lump sum of (924 x 131,670) /3080
=$39,501
Remember that the Selling price for 924 chairs =$70,400
Gross profit realized during 2020 = $70,400 -$39,501=$30,899
b).
Estimated Selling Price value for straight chair =$50
Straight chairs remaining= 1540-264=1276
1276 at $50 each = 1276 X 50 =$63,800
Raphael lives in Detroit and runs a business that sells boats. In an average year, he receives $793,000 from selling boats. Of this sales revenue, he must pay the manufacturer a wholesale cost of $430,000; he also pays wages and utility bills totaling $301,000. He owns his showroom; if he chooses to rent it out, he will receive $15,000 in rent per year. Assume that the value of this showroom does not depreciate over the year. Also, if Raphael does not operate this boat business, he can work as a financial advisor, receive an annual salary of $50,000 with no additional monetary costs, and rent out his showroom at the $15,000 per year rate. No other costs are incurred in running this boat business.
Identify each of Manuel's costs in the following tab/e as either an implicit cost or an explicit cost of selling pianos.
a. The salary Manuel could earn if he worked as a financial advisor
b. The rental income Manuel could receive if he chose to rent out his showroom
c. The wholesale cost for the pianos that Manuel pays the manufacturer
d. The wages and utility bills that Manuel pays
Answer:
Implicit cost
The salary Manuel could earn if he worked as a financial advisor
b. The rental income Manuel could receive if he chose to rent out his showroom
explicit cost
c. The wholesale cost for the pianos that Manuel pays the manufacturer
d. The wages and utility bills that Manuel pays
Explanation:
Explicit cost includes the amount expended in running the business. They include rent , salary and cost of raw materials.
Implicit cost is the cost of the next best option forgone when one alternative is chosen over other alternatives.
Only explicit cost is considered when calculating accounting profit while both explicit and implicit costs are considered in calculating economic profit.
Accounting profit= total revenue - explicit cost
Economic profit = accounting profit - implicit cost
If Manuel did not sell pianos, he would be working as a financial advisor, this is his next best option. Thus the salary he would have earned as a financial advisor is his explicit cost
If he did not use the showroom, he could have rented it out. Renting it out is his next best option. Thus the income from renting the showroom is his explicit cost
The wholesale cost of the pianos, wages and utility bills are monies actually expended in the course of running the business. Thus they are explicit costs