Answer:
A) 1.111
B) 0.889
Explanation:
given data :
outer diameter of connecting rods = 1 ± 0.01 inch
sample mean outer diameter = 1.002 inches
standard deviation = 0.003 inches
A) Calculating the Cp of the process
mean = 1.002
Standard deviation = 0.003
LSL = 1 - 0.01 = 0.99
USL = 1 + 0.01 = 1.01
[tex]Cp = \frac{USL - LSL}{6 * STANDARD DEVIATION}[/tex] = [tex]\frac{1.01-0.99}{6*0.003}[/tex] = 1.111
B) calculate Cpk
mean = 1.002, LSL = 0.99, USL = 1.01 , deviation = 0.003
[tex]Cpk = min[\frac{mean-LSL}{3* deviation} , \frac{USL- mean}{3*deviation} ][/tex]
= min [(0.012/0.009) , (0.008/0.009) ]
= min [ 1.333, 0.889 ]
hence Cpk = 0.889
What is the proper preparation sequencing of the following budgets? 1. Budgeted Balance Sheet 2. Sales Budget 3. Selling and Administrative Budget 4. Budgeted Income Statement
Answer:
1. Sales Budget
2. Selling and Administrative Budget
3. Budgeted Income Statement
4. Budgeted Balance Sheet
Explanation:
First of all the sales budget is prepared in which expected sales are shown and then the selling and administrative budget is prepared which shows expenses related to sale.
The income statement budget is prepared which shows the expected income.
Then at last Budgeted Balance Sheet is prepared in which the expected income is transferred.
The order in which they appear is as follows.
1. Sales Budget
2. Selling and Administrative Budget
3. Budgeted Income Statement
4. Budgeted Balance Sheet
The proper preparation sequencing of the budgets includes the Sales Budget, Selling and Administrative Budget, Budgeted Income Statement, and Budgeted Balance Sheet respectively.
The preparation of budgeted statement by business helps them to know how to expend funds in the future and plan for changes as well.
The proper preparation sequencing of the budgets includes:
Sales budget which are prepared to estimate the sales and revenue expected for the periodThe Selling and administrative budget is prepared estimate the cost of operationThe Budgeted Income Statement is prepared like the Conventional Income statement.The Budgeted Balance Sheet is prepared like the Conventional Balance sheet.Learn more about this here
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Furniture costing $61,700 is sold at its book value in 2017. Acquisitions of furniture total $50,000 cash, on which no depreciation is necessary because it is acquired at year-end. What is the cash inflow related to the sale of furniture
Answer:
cash inflow = $32,100
Explanation:
there is some information missing:
accumulated depreciation 2016 (furniture) = $9,000depreciation expense 2017 (furniture) = $37,600accumulated depreciation 2017 (furniture) = $17,000we must first determine the book value of the furniture which was sold:
total depreciation related to the sold furniture = $9,000 + $37,600 - $17,000 = $29,600
book value = $61,700 - $29,600 = $32,100
since the furniture was sold at book value, then the cash inflow = $32,100
Cash inflow refers to money being received or earned by the company, while cash outflows refer to money being paid by the company.
Chester Corp. is downsizing the size of their workforce by 10% (to the nearest person) next year from various strategic initiatives. How much will the company pay in separation costs if each worker receives $5,000 when separated?
Answer:
$293,500
Explanation:
The computation of the amount pay in separation cost is shown below:
As there are 587 employees
but 10% are downsized
So, separation cost is
= Current employees × downsized percentage × received amount by workers
= 587 employees × 10% × $5,000
= $293,500
We simply applied the above formula so that the amount pay by the company with respect to the separation cost could arrive
You want employees to know that they can talk to retirement planning specialists. Which of the following statements is most likely persuasive to the most employees?
a) Make your financial dreams come true. Talk one-on-one with our expert retirement planners to decide which retirement packages make the most sense for you.
b) Learn about your options for retirement income. Talk one-on-one with our expert retirement planners to decide which retirement packages make the most sense for you.
c) Learn about your options for retirement income by talking one-on-one with our expert retirement planners, who can help you decide which retirement packages make the most sense for you based on your retirement goals and hopes.
d) Learn about your options for retirement income. Meet with our retirement planners to find out their recommendations for your retirement package.
Standard Direct Materials Cost per Unit Crazy Delicious Inc. produces chocolate bars. The primary materials used in producing chocolate bars are cocoa, sugar, and milk. The standard costs for a batch of chocolate (2,857 bars) are as follows: Ingredient Quantity Price Cocoa 630 lbs. $0.40 per lb. Sugar 180 lbs. $0.60 per lb. Milk 150 gal. $1.60 per gal. Determine the standard direct materials cost per bar of chocolate. If required, round to the nearest cent. $ per bar
Answer:
Standard direct material cost per unit= $0.21
Explanation:
Giving the following information:
The standard costs for a batch of chocolate (2,857 bars) are as follows:
Cocoa 630 lbs. $0.40 per lb.
Sugar 180 lbs. $0.60 per lb.
Milk 150 gal. $1.60 per gal
First, we need to calculate the total cost for 2,857 bars:
Total cost= 630*0.4 + 180*0.6 + 150*1.6
Total cost= $600
Now, the unitary standard cost:
Standard direct material cost per unit= 600/2,857
Standard direct material cost per unit= $0.21
PROBLEM 1:
Equipment A Equipment B
cost $100,000 $63,000
Accumulated depreciation(1/1) $ 42,000 $36,000
Useful life 8 years 5 years
Depreciation method straight line straight line
Date sold 7/1/12 9/1/12
Sales price $ 39,000 $ 20,000
Journalize all entries required to update deprecition and record thesales of the two assets in 2012.accumulated depreciation includes depreciation recorded through 12/31/11.
Answer:
Equipment A
Journal Entry - update depreciation
Depreciation expense $6,250 (debit)
Accumulated depreciation $6,250 (credit)
Journal Entry - to record the sale
Accumulated depreciation ($ 42,000 + $6,250) $48,250 (debit)
Cash $ 39,000 (debit)
Profit and Loss $12,750 (debit)
Equipment $100,000 (credit)
Equipment B
Journal Entry - update depreciation
Depreciation expense $6,300 (debit)
Accumulated depreciation $6,300 (credit)
Journal Entry - to record the sale
Accumulated depreciation ($36,000 + $6,300) $42,300 (debit)
Cash $ 20,000 (debit)
Profit and Loss $700 (debit)
Equipment $63,000 (credit)
Explanation:
Straight line method charges a fixed amount of depreciation for the time the asset is in use in the business.
Depreciation Expense = (Cost - Residual Value) / Estimated Useful Life
Equipment A
Depreciation Expense = $100,000 / 8 years
= $12,500
Depreciation Expense for 2012 = $12,500 × 6/12
= $6,250
Journal Entry - update depreciation
Depreciation expense $6,250 (debit)
Accumulated depreciation $6,250 (credit)
Journal Entry - to record the sale
Accumulated depreciation ($ 42,000 + $6,250) $48,250 (debit)
Cash $ 39,000 (debit)
Profit and Loss $12,750 (debit)
Equipment $100,000 (credit)
Equipment B
Depreciation Expense = $63,000 / 5 years
= $12,600
Depreciation Expense for 2012 = $12,600 × 6/12
= $6,300
Journal Entry - update depreciation
Depreciation expense $6,300 (debit)
Accumulated depreciation $6,300 (credit)
Journal Entry - to record the sale
Accumulated depreciation ($36,000 + $6,300) $42,300 (debit)
Cash $ 20,000 (debit)
Profit and Loss $700 (debit)
Equipment $63,000 (credit)
Lefty provides demolition services in several southern states. Lefty has property as follows: Property State Beginning Ending Alabama $ 123,044 $ 204,241 Kentucky $ 203,317 $ 185,108 Mississippi $ 881,932 $ 1,002,396 Louisiana $ 243,951 $ 350,310 Tennessee $ 143,204 $ 143,204 Total $ 1,595,448 $ 1,885,259 Lefty is a Mississippi corporation. Lefty also rents property in Mississippi and Tennessee with annual rents of $56,000 and $21,000, respectively. What is Lefty's Mississippi property numerator
Answer:
Lefty's Mississippi property numerator is
Property Numerator = $56,000
Which can be expressed as a percentage of the Average Annual Property Value
= Annual Rent/Average Annual Property
= $56,000/$942,164 x 100 = 5.9%
Explanation:
a) Data:
Property State Beginning Ending
Alabama $ 123,044 $ 204,241
Kentucky $ 203,317 $ 185,108
Mississippi $ 881,932 $ 1,002,396
Louisiana $ 243,951 $ 350,310
Tennessee $ 143,204 $ 143,204
Total $ 1,595,448 $ 1,885,259
b) Calculations:
Mississippi
Beginning Property value = $ 881,932
Ending Property value = $ 1,002,396
Average annual property value = $942,164 ($ 881,932 + $ 1,002,396)/2
Rent in Mississippi = $56,000
Suppose you deposit $ cash into your checking account. By how much will the total money supply increase as a result when the required reserve ratio is 0.0?
Answer:
If the required reserve ratio is 0, that means that the money multiplier will be infinite. I guess the question is incomplete.
I looked for similar questions to fill in the blanks:
If you deposit $2,400 and the required reserve ratio is 0.4, then by how much does the money supply increase?
first we must determine the money multiplier = 1 / required reserve ratio = 1 / 0.4 = 2.5
to determine the total effect on the money supply we just multiply the deposit by the multiplier = $2,400 x 2.5 = $6,000 increase.
Adams Bautista needs $26,700 in 8 years. Click here to view factor tables
Required:
a. What amount must he invest today if his investment earns 12% compounded annually?
b. What amount must he invest today if his investment earns 12% compounded annually?
Answer:
a. $10,783.68
b. $10,510.36 semi annual compounding
Explanation:
a. This question requires the present value of $26,700 given 8 years and compounded annually at 12%.
Present Value = [tex]\frac{Future Value}{ ( 1 + interest)^{number of periods} }[/tex]
Present Value = [tex]\frac{26,700}{ 1.12^{8} }[/tex]
Present Value = $10,783.68
He would need to invest $10,783.68 today.
b. This is a duplicate of question 1 but I will solve it assuming semi-annual compounding just in case.
12% per annum would become = 12/2 = 6% per semi annum
Number of periods would become = 8 * 2 = 16 periods
Present Value = [tex]\frac{Future Value}{ ( 1 + interest)^{number of periods} }[/tex]
Present Value = [tex]\frac{26,700}{ 1.06^{16} }[/tex]
Present Value = $10,510.36
He would need to invest $10,510.36 today.
The board of directors of Capstone Inc. declared a $0.60 per share cash dividend on its $1 par common stock. On the date of declaration, there were 54,000 shares authorized, 15,000 shares issued, and 4,000 shares held as treasury stock. What is the entry when the dividends are declared
Answer:
DR Dividends $6,600
CR Dividends Payable $6,600
Explanation:
Out of 54,000 shares, 15,000 are issued. Of those 15,000, 4,000 are held as Treasury stock.
Dividends will be;
= (15,000 - 4,000) * $0.6
= $6,600
Scenario: Your direct supervisor is interested in a project you are currently working on, and they have asked to increase the scope to increase the department's goals. How would you respond if your supervisor was not the project sponsor?
Scenario: Your direct supervisor is interested in a project you are currently working on, and they have asked to increase the scope to increase the department's goals. How would you respond if your supervisor was not the project sponsor?
ANSWER:
Take down his/her suggestions. The first thing is to show respect. Accept thoughts and contributions towards that project. Most times a project "sponsor" is not someone who is a professional in the field or discipline that the project is about.
If your direct supervisor has the idea of increasing the scope of the project, take note of his/her reasons and if they will truly bring the achievement of more departmental goals, then relay the idea of expansion to the project sponsor.
Answer:
At this point, the important thing is to remain calm and in control. Your supervisor, like everyone else, is likely to get confused and blame people for things that are not their fault, or even find fault that does not exist.
In that case, you should wait for him to finish speaking, ask for permission to speak and explain how you did your job and show how your supervisor is wrong about the conclusion he made. This must be done calmly and politely, always maintaining respect.
Explanation:
Consider a team that you are familiar with - either by being a member of the team, a team leader, or a bystander. What were the team's goals?
Answer:
• To ensure that there is no income leakage whatsoever
• Ensure that there is no customer complaint made to the company's executives
• Early closure not later than 5pm daily, Monday to Friday
• Ensure customer survey ratings of at least 8.0
• Drive paperless environment.
• Daily reconciliation of the bank's transit accounts.
Explanation:
I used to belong to a team called settlement and reconciliation , which is under operations support, business banking in one of the top financial institution.
The goals are as listed above. For instance as a settlement and reconciliation team, you must ensure accurate settlement of all merchants such that none would receive excess settlement s which could deplete the bank's income. Also, there must be no customer complaint escalated to the bank's executives hence team must promptly resolve all queries and complaint.
Another goal is to drive early closure. No member of staff must remain in the office after 5pm unless permission is obtained to deal urgent transaction. Each year, the bank conducts internal survey among departments to know how well we treat our internal and external stakeholders. The least score approved for my team is 8.0 out of 10 , which must be met.
Again, one of the goals of the bank is paperless drive which was included in each team or unit's goals. We support the drive for paperless transactions by suggesting means to consummate transactions without printing. We must also ensure daily and timely reconciliation of all our transit accounts in order to ensure that no idle fund is sitting in there.
You are preparing a presentation on networking for a professional development seminar that your company is hosting for its employees. You look at the attendance list and see that you have good relationships with all of the registered seminar participants. Additionally, this presentation is a follow-up presentation that was requested by previous participants. You know you will have a friendly audience. What organizational pattern would be best for this situation
Answer:
any pattern.
Explanation:
When preparing a presentation for an organizational seminar, it is ideal to pre-analyze the audience for whom you will be presenting, the common characteristics of the audience will be essential for choosing the best organizational pattern.
In the scenario above, it is possible to perceive that the public is known and friendly, therefore any organizational pattern can be used, the focus in this case should be the use of a pattern that increases the involvement of the participants.
The essential thing is for the presenter to convey confidence by passing on important information, preparing beforehand, maintaining a friendly and cordial posture and being open to interaction with the public.
Forester Company has five products in its inventory. Information about the December 31, 2021, inventory follows. Product Quantity Unit Cost Unit Replacement Cost Unit Selling Price A 1,000 $ 26 $ 28 $ 32 B 500 31 27 34 C 900 19 18 24 D 900 23 20 22 E 800 30 28 29 The cost to sell for each product consists of a 10 percent sales commission. The normal profit for each product is 35 percent of the selling price. Required: 1. Determine the carrying value of inventory at December 31, 2021, assuming the lower of cost or market (LCM) rule is applied to individual products. 2. Determine the carrying value of inventory at December 31, 2021, assuming the LCM rule is applied to the entire inventory. 3. Assuming inventory write-downs are common for Forester, record any necessary year-end adjusting entry based on the amount calculated in requirement 2.
Answer:
A)
A 1,000 x $26.00 = $ 26,000
B 500 x $30.60 = $ 15,300
C 900 x $ 19.00 = $ 17,100
D 900 x $ 19.80 = $ 17,820
E 800 x $26.10 = $ 20,880
Total $ 97,100
B)
102,240
C)
Write-down at NRV 1,060 debit
Inventory 1,060 credit
Explanation:
We have to calculate the net realizable value(NRV) for each item and compare with the historic cost:
Units// Cost /// NRV
A 1,000 $ 26 $ 32(1 - 0.1) = 28.8
B 500 $ 31 $ 34(1-0.1) = 30.60
C 900 $ 19 $ 24(1-0.1) = 21.60
D 900 $ 23 $ 22(1-0.1) = 19.80
E 800 $ 30 $ 29(1-0.1) = 26.10
We will always pick the lowest to valuate the goods:
A 1,000 x $26.00 = $ 26,000
B 500 x $30.60 = $ 15,300
C 900 x $ 19.00 = $ 17,100
D 900 x $ 19.80 = $ 17,820
E 800 x $26.10 = $ 20,880
Total $ 97,100
Total Cost:
1,000 x 26
+ 500 x 31
+ 900 x 19
+ 900 x 23
+ 800 x 30
103,300
Total NRV
1,000 x 28.80
+ 500 x 30.60
+ 900 x 21.60
+ 900 x 19.80
+ 800 x 26.10
102,240
Comparing at the entire inventory level we get the following adjustment
103,300 - 102,240 = 1,060
railway cabooses justpaid its annual sividend of $1.70 per share. The company has been reducing the dividends by 11.3 percent each year. how much are you willing to pay today to purchase stock in this company if your required rate of return is 12 percent?
Answer:
$6.47
Explanation:
The computation of the current price of the stock is shown below:
= {Current Dividend x [1 + (Dividend Growth)} ÷ [Required rate of Return - (Dividend growth)]
= {$1.70 × [1 + (- 0.113)]} ÷ [0.12 - (- 0.113)]
= $1.5079 ÷ 0.233
= $6.47
hence, the current price of the stock valued today is $6.47 i.e come by applying the above formula
Which of the following items are normally classified as current liabilities for a company that has a one-year operating cycle? (You may select more than one answer. Single click the box with the question mark to produce a check mark for a correct answer and double click the box with the question mark to empty the box for a wrong answer.)
Answer:
Sales tax payable FICA-social security taxes payable due in 40 days Portion of long term note due in 1 monthExplanation:
Current Liabilities refer to obligations owed in a 12 month period. Anything longer is classified as Long Term.
From the options listed the current liabilities will therefore be;
Sales Tax Payable which are the taxes that the government charges on goods and services and it is the responsibility of business to collect these and remit them to the Government on time. This is a current liability as these are remitted quite frequently.
The FICA social security taxes payable due in 40 days is also a current liability due its time period being less than a year.
A portion of a long term loan due in a month will be considered current also due to its time period.
Current liabilities for a company include Sales tax payable, FICA-social security taxes payable due in 40 days and portion of long term note due in 1 month.
What is the term Current Liability about?
Current Liabilities refer to obligations owed in a 12 month period. Anything longer is classified as Long Term.
Sales Tax Payable which are the taxes that the government charges on goods and services and it is the responsibility of business to collect these and remit them to the Government on time
The FICA social security taxes payable due in 40 days is also a current liability due its time period being less than a year.
A portion of a long term loan due in a month will be considered current also due to its time period.
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Adjusting entries affect at least one balance sheet account and at least one income statement account. For the entrie below, identify the account to be debited and the account to be credited. Indicate which of the accounts is the incom statement account and which is the balance sheet account. Assume the company records prepayments of expenses asset accounts, and cash receipts of unearned revenues in liability accounts.
a. Entry to record consulting services performed but not yet billed (nor recorded).
b. Entry to record Interest revenue earned but not yet collected (nor recorded).
c. Entry to record service revenues performed but not yet billed (nor recorded).
d. To record janitorial expense incurred but not yet paid.
e. To record rent expense incurred but not yet paid
Accounts Account Title Financial Statement
a. Account to be debited Accounts receivable Balance sheet
Account to be credited Consulting services revenue Income statement
b. Account to be debited Interest receivable Balance sheet
Account to be credited interest revenue earned Income statement
c. Account to be debited Accounts receivable Balance sheet
Account to be credited Services revenue earned Income statement
d. Account to be debited Janitorial expense Balance sheet
Account to be credited Accrued expenses payable Income statement
e. Account to be debited Rent expense Balance sheet
Account to be credited Accrued expenses payable Income statement
Answer and Explanation:
According to the given situation, the income statement and balance sheet as per parts is shown below:-
Accounts Account Title Financial statements
For Part A
Debit Accounts receivable Liability account Balance sheet
Credit Consulting service Income statement
revenue
For Part B
Debit Interest receivable Liability account Balance sheet
Credit Interest revenue Income statement
For Part C
Debit Accounts receivable Assets account Balance sheet
Credit Service Revenue Income statement
For Part D
Debit Janitorial expense Income statement
Credit Janitorial expense Liability account Balance sheet
Payable
For Part E
Debit Rent expenses Income statement
Credit Rent expenses Liability account Balance sheet
payable
During the Great Recession, the U.S. budget deficit worsened as tax collections fell and payments to the poor rose. In other words, the deficit worsened as a result of _________ in the federal budget.
Health and Wealth Company is financed entirely by common stock that is priced to offer a 12 percent expected return. If the company repurchases 20 percent of the common stock and substitutes an equal value of debt yielding 8 percent, what is the expected return on the common stock after refinancing
Answer: 13%
Explanation:
By substituting 20% of debt for debt yielding 8%, the company now has 20% financing from debt and 80% from equity.
The expected return on common stock after refinancing can be calculated by;
Return after refinancing = Return before refinancing + [tex]\frac{Debt}{Equity}[/tex](return before refinancing - Debt yield)
= 12% + [tex]\frac{0.2}{0.8} (0.12 - 0.08)[/tex]
= 13%
Wanda contracted to sell Mike 100 boxes of ball bearings.The contract did not specify a place of delivery.The ball bearings now reside at Wanda's place of business.Wanda refuses to ship the 100 boxes to Mike,and Mike refuses to come to Wanda's place of business to pick them up.Who is right? Why?
Answer:
Wanda is right since the contract did not specify a place of deliveryExplanation:
Wanda is right, since the contract did not specify the place of delivery or whether Wanda is expected to deliver the bearing to Mikes place.
If it is in Wanda terms of business that normally boxes above 100 when purchased, delivery is free and he defaults, then he is wrong, but in this case it was not specified who will bear the cost of shipping, and it is not in Wanda terms of business that delivery is free, so Wanda is right in my own opinion.
Mason Automotive is an automotive parts company that sells car parts and provides car service to customers. This is Mason's first year of operations and they have hired you as their CPA to prepare the income statement and balance sheet for their company. As such, January 1st , 2018 was the first day that Mason was in business. For the month of January, record all the necessary journal entries for transactions that occurred during the month. In addition, please prepare all necessary adjusting journal entries as of the end of the month.
From the information below, please fill out the "journal entries tab" for all the necessary journal entries. Furthermore, please complete the "T-Accounts" tab for the individual accounts so that the trial balance tab can be updated (automatically). I prepared the first journal entry for you in the journal entries tab and T-Accounts tab. Ensure you label the entries similar to how I have shown in Entry #1.
Once all entries are recored and the T-Accounts tab is updated, please prepare the financial statements (income statement and balance sheet) for the month of January.
Journal Entry #1
Mason Automotive sells 10,000,000 shares at $5 par for $30 on January 1st, 2018.
Journal Entry #2
Ed Mason, the CEO, hires 3,000 employees, whom will receive a combined salary of $12 Million on a monthly basis. The employees started on January 1st and will be paid for the month of January on February 5th. Employee's withholdings are as follows: 10% for federal income taxes 5% for state income taxes and 7% for FICA. Record the necessary entry as of January 1st, 2018.
Journal Entry #3
Mason Automotive issues a bond payable on January 1st, 2018 with a face value of $200 Million at 102. The bond will have a useful life of 5 years and interest is paid out monthly based on a rate of 5% APR. Record the necessary journal entry as of January 1st 2018.
(Note: Assume straight line amortization for the bond discount/premium).
Journal Entry #4
Mason Automotive purchased $80 Million dollars worth of inventory on account on January 2nd, 2018. Mason notes that it will use a perpetual inventory system to track inventory.
Journal Entry #5
Mason Automotive purchases fixed assets of $120 Million that will have a useful life of 10 years and no salvage value on January 2, 2018. $20 million was paid with cash with the remaining balance on account. These assets are depreciated using the straight-line method.
Journal Entry #6
On January 2nd, Mason Automotive shipped an order to Corby Panther Company. The shipping terms were FOB shipping point and the value of the order was $50 Million and the inventory cost was $20 Million. Assume that this sale was made on account.
Journal Entry #7
On January 3rd, Mason Automotive receives $75 Million advance payment from a customer, Michael Scott Paper Company, to manufacture 7,500 cars.
Journal Entry #8
Mason Automotive buys a patent from Apple for $24 Million on January 3rd, 2018. The patent has a legal life of 20 years, but a useful life of 10 years. Record the necessary entry as of January 3rd, 2018. Assume the patent was purchased using cash.
Journal Entry #9
Mason Automotive purchased $2 Million dollars worth of supplies January 4th, 2018. $1.5 Million was paid with cash with the remaining balance on account.
Journal Entry #10
Mason Automotive pre-pays for Rent Expense for the next year of $12 Million and Insurance Expense of $2.4 Million on January 4th, 2018
Journal Entry #11
On January 20th, Mason Automotive decides to purchase 2,000,000 shares of Treasury stock at $25 per share.
Month End Adjusting Entries
There are 10 applicable adjusting entries that need to be made as of the end of the month based on the information provided above. When recording these adjusting entries consider the following facts:
1) Interest expense will be recorded as a operating expense items on the income statement.
2) Record the necessary adjusting entries related to pre-paid expense as separate journal entries.
3) When reviewing the supply room as of the end of the month, Mason Automation noted that it had $1.5 Million worth of supplies still on hand.
4) As of the end of the month, 4,000 cars were completed for Michael Scott Paper Company and the performance obligation had been met on those 4,000 cars. As such, revenue was determined to be earned on those 4,000 vehicles and it was noted that each vehicle costed $8,000 to manufacture.
5) Mason Automation uses the balance sheet approach in estimating the allowance for doubtful accounts as of the end of the period. Based on industry average, Mason noted that it will use 5% of receivables as an estimation.
6) When preparing the balance sheet, close out net income to retained earnings.
Answer:
1) Mason Automotive sells 10,000,000 shares at $5 par for $30 on January 1st, 2018.
Dr Cash 300,000,000
Cr Common stock 50,000,000
Cr Additional paid in capital 250,000,000
2) Ed Mason, the CEO, hires 3,000 employees, whom will receive a combined salary of $12 Million on a monthly basis. The employees started on January 1st and will be paid for the month of January on February 5th. Employee's withholdings are as follows: 10% for federal income taxes 5% for state income taxes and 7% for FICA. Record the necessary entry as of January 1st, 2019.
No journal entry required
Adjusting entry:
January 31, 2018, wages expense
Dr Wages expense 12,000,000
Dr FICA taxes expense 840,000
Cr Federal income taxes withheld payable 1,200,000
Cr State income taxes withheld payable 600,000
Cr FICA taxes withheld payable 840,000
Cr FICA taxes payable 840,000
Cr Wages payable 9,360,000
3) Mason Automotive issues a bond payable on January 1st, 2018 with a face value of $200 Million at 102. The bond will have a useful life of 5 years with an interest payment of 5% (Annual Percentage Rate) due at the end of the month. Record the necessary journal entry as of January 1st, 2018.
Dr Cash 204,000,000
Cr Premium on bonds payable 4,000,000
Cr Bonds payable 200,000,000
(Note: When considering the amortization of the discount or premium, assume the straight line method is used).
Adjusting entry
January 31, 2018, interest expense
Dr interest expense 766,666.66
Dr Premium on bonds payable 66,666.67
Cr Interest payable 833,333.33
4) Mason Automotive purchased $80 Million dollars worth of inventory on January 2nd, 2018. $80 Million was paid with cash with the remaining balance on account. Mason notes that it will use a perpetual inventory system to track inventory.
Dr Inventory 80,000,000
Cr Accounts payable 80,000,000
5) Mason Automotive purchases fixed assets of $120 Million that will have a useful life of 10 years and no salvage value on January 2, 2018. $20 million was paid with cash with the remaining balance on account. These assets are depreciated using the straight-line method.
Dr Fixed assets 120,000,000
Cr Cash 20,000,000
Cr Accounts payable 100,000,000
Adjusting entry:
January 31, 2019, depreciation expense
Dr Depreciation expense 1,000,000
Cr Accumulated depreciation - fixed assets 1,000,000
6) On January 2nd, Mason Automotive shipped an order to Corby Panther Company. The shipping terms were FOB shipping point and the value of the order was $50 Million and the inventory cost was $20 Million. Assume that this sale was made on account.
Dr Accounts receivable 50,000,000
Cr Sales revenue 50,000,000
Dr Cost of goods sold 20,000,000
Cr Inventory 20,000,000
Adjusting entry:
January 31, 2018, allowance for doubtful accounts (5%)
Dr Bad debt expense 2,500,000
Cr Allowance for doubtful accounts 2,500,000
7) On January 3, Mason Automotive receives $75 Million advance payment from a customer, Michael Scott Paper Company, to manufacture 7,500 cars.
Dr Cash 75,000,000
Cr Deferred revenue 75,000,000
Adjusting entry:
January 31, 2019, 4,000 cars were finished and delivered
Dr Deferred revenue 40,000,000
Cr Sales revenue 40,000,000
Dr Cost of goods sold 32,000,000
Cr Inventory: finished cars 32,000,000
8) Mason Automotive buys a patent from Apple for $24 Million on January 3rd, 2018. The patent has a legal life of 20 years, but a the useful life of 10. Record the necessary entry as of January 3rd, 2018. Assume the patent was purchased using cash.
Dr Patent 24,000,000
Cr Cash 24,000,000
Adjusting entry:
January 31, 2018, patent amortization expense
Dr Patent amortization expense 200,000
Cr Patent 200,000
9) Mason Automotive purchased $2 Million dollars worth of supplies on account on January 4, 2018.
Dr Supplies 2,000,000
Cr Cash 1,500,000
Cr Accounts payable 500,000
Adjusting entry
January 31, 2018, supplies expense
Dr Supplies expense 500,000
Cr Supplies 500,000
10) Mason Automotive pre-pays for Rent Expense for the next year of $12 Million and Insurance Expense of $2.4 Million on January 4, 2018.
Dr Prepaid rent 12,000,000
Dr Prepaid insurance 2,400,000
Cr Cash 14,400,000
Adjusting entries:
January 31, 2019, rent expense
Dr Rent expense 1,000,000
Cr Prepaid rent 1,000,000
January 31, 2019, insurance expense
Dr Insurance expense 200,000
Cr Prepaid insurance 200,000
11) On January 20th, Mason Automotive decides to purchase 2,000,000 shares of Treasury stock at $25 per share.
Dr Treasury stock 50,000,000
Cr Cash 50,000,000
Closing journal entries:Dr Sales revenue 90,000,000
Cr Income summary 90,000,000
Dr Income summary 71,006,66.66
Cr Wages expense 12,000,000
Cr FICA taxes expense 840,000
Cr interest expense 766,666.66
Cr Depreciation expense 1,000,000
Cr Cost of goods sold 52,000,000
Cr Bad debt expense 2,500,000
Cr Patent amortization expense 200,000
Cr Supplies expense 500,000
Cr Rent expense 1,000,000
Cr Insurance expense 200,000
Dr Income summary 18,993,333.34
Cr Retained earnings 18,993,333.34
Answer:
i think this is correct
Explanation:
Jervis sells $3,900 of its accounts receivable to Northern Bank in order to obtain necessary cash. Northern Bank charges a 3% factoring fee. What entry should Jervis make to record the transaction
Answer:
Dr cash $3783
Dr factoring fee expense $177
Cr accounts receivable $3900
Explanation:
The cash proceeds from the factoring arrangement would be 97% of the value of the receivables since 3% is the factoring fees expenses to be incurred.
Cash proceeds=$3900*97%=$ 3,783.00
Factoring fees expense=$3,900.00-$3,783.00=$117
Cash account and factoring fees expense would be debited with $3783 and $117 respectively, while accounts receivable is credited with $3900
The better-off test for evaluating whether a particular diversification move is likely to generate added value for shareholders involves determining whether the proposed diversification move Group of answer choices provides the company with additional resource strengths. provides additional ways to build the entrepreneurial skills of the company's senior managers. spreads stockholders' risks across a greater number of lines of business. has competitively valuable value chain match-ups with the company's present businesses such that its businesses can perform better together than apart. has good potential for increasing the company's rate of return on invested capital.
Answer: Has competitively valuable value chain match-ups with the company's present businesses such that its businesses can perform better together than apart.
Explanation:
The better-off test of diversification is that the company must gain a return that is higher than incremental growth. Incremental growth is usually defined a 1 + 1 = 2 formula and this test argues that Diversification must provide more than this such that the company achieves synergistic growth ( 1 + 1 = 3) which is what happens when different entities work better together than alone.
Diversification should therefore be into an area that will be able to match-up with the company's present businesses such that its businesses can perform better together than apart and produce even greater returns.
Suppose that purely competitive firms producing cashews discover that P exceeds MC.
a. Is their combined output of cashews too little, too much, or just right to achieve allocative efficiency?
b. In the long run, what will happen to the supply of cashews and the price of cashews?
1. Supply will increase and the price of cashews will increase.
2. Supply will increase and the price of cashews will decrease.
3. Supply will decrease and the price of cashews will decrease.
4. Supply will decrease and the price of cashews will increase.
Answer:
a. Too Little
b. 2. Supply will increase and the price of cashews will decrease.
Explanation:
a. Output is always maximised when Marginal Revenue equals Marginal Cost because at this point it is argued that all resources are being utilised. In a purely competitive market, the Price is equal to the Marginal Revenue. If the price is larger than the Marginal Cost that means that Marginal Revenue is larger than Marginal Cost. The firms are therefore not utilising enough resources to produce as much as they can which should change.
b. In the long run in a purely competitive market, more firms will enter the market as they will see it as a chance to make economic profits. As this happens the Supply will increase due to the larger number of firms and the price will decrease as a result as well.
On July 1, 2021, a company loans one of its employees $20,000 and accepts a ten-month, 9% note receivable. Calculate the amount of interest revenue the company will recognize in 2021 and 2022
Answer:
Interest in 2021=900
Interest in 2022=600
Explanation:
Calculatation of the amount of interest revenue the company will recognize in 2021 2022
Month in 2021 - July To December
Interest in 2021 = 20,000*9%*6/12
Interest in 2021=900
Month in 2022 - January To April
Interest in 2022 = 20,000*9%*4/12
Interest in 2022=600
Therefore the amount of interest revenue the company will recognize in 2021 will be 900 while 2022 will be 600
Answer:
2021:900
2022:600
Explanation:
Month in 2021 - July To December
Interest in 2021 = 20,000x0.0%x(6/12)
Interest in 2021=900
Month in 2022 - January To April
Interest in 2022 = 20,000x0.09x(4/12)
Interest in 2022=600
Therefore the answer for 2021 will be 900 and for 2022 will be 600
Blossom Company sells equipment on September 30, 2020, for $20,100 cash. The equipment originally cost $72,800 and as of January 1, 2020, had accumulated depreciation of $42,100. Depreciation for the first 9 months of 2020 is $5,45. Prepare the journal entries to (a) update depreciation to September 30, 2015, and (b) record the sale of the equipment.
Answer:
Date Account titles and explanation Debit Credit
30/09/2020 Depreciation expense $5,450
Accumulated depreciation $5,480
(To record depreciation expense)
30/09/2020 Accumulated depreciation $47,550
Cash $20,100
Loss on sale of equipment $5,230
Equipment $72,880
(To record sale of equipment)
Dinklage Corp. has 7 million shares of common stock outstanding. The current share price is $68, and the book value per share is $8. The company also has two bond issues outstandingSuppose the most recent dividend was "$3.25" and the dividend growth rate is 5 percent. Assume that the overall cost of debt is the weighted average of that implied by the two outstanding debt issues. Both bonds make semiannual payments. The tax rate is 21 percent. What is the company’s WACC?
Answer:
WACC = 15.08%
Explanation:
Some information is missing:
"The first bond issue has a face value of $70 million, a coupon rate of 6 percent, and sells for 97 percent of par. The second issue has a face value of $40 million, a coupon rate of 6.5 percent, and sells for 108 percent of par. The first issue matures in 21 years, the second in 6 years."
In order to calculate WACC we must first determine the YTM and market values of the 2 bonds.
bond 1:
market value = $70,000,000 x 0.97 = $67,900,000
YTM = {4,200,000 + [(70,000,000 - 67,900,000)/21]} / [(70,000,000 + 67,900,000)/2] = 4,300,000 / 68,950,000 = 6.24%
bond 2:
market value = $40,000,000 x 1.08 = $43,200,000
YTM = {2,600,000 + [(40,000,000 - 43,200,000)/6]} / [(40,000,000 + 43,200,000)/2] = 2,066,667 / 41,600,000 = 4.97%
weighted average cost of debt:
total value of debt = $67,900,000 + $43,200,000 = $111,100,000
weighted average cost = [($67,900,000/$111,100,000) x 6.24%] + [($43,200,000/$111,100,000) x 4.97%] = 3.814% + 1.933% = 5.75%
cost of equity (Re):
$68 = ($8 x 1.05) / (Re - 5%)
Re - 5% = $8.40 / $68 = 12.35%
Re = 17.35%
outstanding stock's market value = 7,000,000 x $68 = $476,000,000
WACC = [($476,000,000/$587,100,000) x 17.35%] + [($111,100,000/$587,100,000) x 5.75% x 0.79] = 14.07% + 1.01% = 15.08%
The Book of Mormon is one of the biggest musical hits on Broadway. It has received many awards including Tony and Grammy Awards. According to Wikipedia, "High attendance coupled with aggressive pricing allowed the financial backers to recoup their investment of $11.4 million after just nine months of performances." While the highest ticket price was $477, the average price is $170. What is the variable cost per ticket
Answer:
variable cost per ticket = $129.60
Explanation:
some information is missing and I looked it up:
30 performances per month
1,100 seats in the theater and 95% occupancy rate
number of tickets sold during the first 9 months = 30 x 9 x 1,100 x 0.95 = 282,150 tickets
total revenue during the first 9 months = 282,150 x $170 = $47,965,500
variable costs = total revenue - fixed costs = $47,965,500 - $11,400,000 = $36,565,500
variable cost per ticket = $36,565,500 / 282,150 tickets = $129.5959 ≈ $129.60
A cafeteria serving line has a coffee urn from which customers serve themselves. Arrivals at the urn follow a Poisson distribution at the rate of 3.0 per minute. In serving themselves, customers take about 14 seconds, exponentially distributed. a. How many customers would you expect to see, on average, at the coffee urn? (Do not round intermediate calculations. Round your answer to 2 decimal places.)
Answer: 3 customers.
Explanation:
Given the following :
Arrival rate of customers = 3 customers per minute
Service time = 14 seconds
Then if service time is 14 seconds, the service rate per minute will be 60/14 = 4.29 = 4 (nearest whole number)
Service rate = 4 customers per minute.
Number of customers at coffee urn(Nc) :
Nc = (arrival rate) /(service rate - arrival rate)
Nc = (3) / (4 - 3)
Nc = 3 / 1
Nc = 3
Therefore, average number of customers expected at coffee urn = 3
Jackie notices everyone wearing Converse sneakers on the first day of school. Ever the fashionista, this will likely affect: Multiple Choice Jackie's income, as she now needs to buy Converse and will have less to spend on other goods. Jackie's preferences for shoes, since she feels as though she needs them now. Jackie's expectations of future prices, since the price of Converse will likely go up because they're getting so popular. the prices of related goods, since other shoes will be less popular and cost less now.
Answer:
Jackie's income, as she now needs to buy Converse and will have less to spend on other goods.
Explanation:
Jackie is a fashionista and so she would respond to trends. Since everyone around her is wearing converse, she would want to wear converses too. so her income would be affected as it would be reduced as she would buy the converse.