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
Monogramm just paid a dividend of $2.19 per share. The company said that it will increase the dividend by 15 percent and 10 over the next two years, respectively. After that, the company is expected to increase its annual dividend at 3.7 percent. If the required return is 10.7 percent, what is the stock price today
Answer: $38.03
Explanation:
Based on the information given in the question, dividend for first year will be:
= D1 = $2.19 × 1.15 = $2.5185
D2= $2.5185 × 1.1 = $2.77035
Then, we calculate the value after year 2 which will be:
=(D2 × Growth Rate) / (Required Return-Growth Rate)
=(2.77035 × 1.037) / (0.107-0.037)
=$41.04
Therefore, the stock price today will be:
= (2.5185/1.107) + (2.77035/1.107²) + (41.04)/1.107²
=$38.03
The price of a stock often rises after a stock dividend is declared. The current stock price is $38.03.
What will be the current stock price?Based on the information provided in the inquiry, the first-year dividend will be:
[tex]D1 = 2.19 \text{ x } 1.15 \\D1 = 2.5185\\D2= 2.5185 \text{ x }1.1\\\\D2= 2.77035[/tex]
Then, after the second year, we calculate the value, which is:
[tex]=(D2 \text{ x } \text{Growth Rate}) / (\text{Required Return-Growth Rate})[/tex]
[tex]=(2.77035[/tex] × [tex]1.037) / (0.107-0.037)[/tex]
[tex]=41.04[/tex]
As a result, today's stock price will be:
[tex]= (\frac{2.5185}{1.107}) + (\frac{2.77035}{1.107^{2}}) + (\frac{41.04}{1.107^{2}})\\=38.03 \text{ dollars}[/tex]
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If wages are sticky, then a greater than expected increase in the price level Group of answer choices reduces the real costs of production, so the aggregate quantity of goods and services rises. raises the real costs of production, so the short-run aggregate supply curve shifts left. raises the real costs of production, so the aggregate quantity of goods and services declines. reduces the real costs of production, so the short-run aggregate supply curve shifts right.
Answer:
reduces the real costs of production, so the short-run aggregate supply curve shifts right.
Explanation:
The sticky-wage model or theory is an economical concept used to describe how in reality, wages may go up easily but slowly moves down and stays above the equilibrium because workers are resistant to nominal wage cut. This model was developed by John Maynard Keynes and he posited that, sticky-wage may lead to real-wage unemployment, as well as causing disequilibrium in the labor market.
In order to understand both short-run economic fluctuations and how the economy move from short to long run, we need the aggregate supply and aggregate demand model.
An aggregate supply curve gives the relationship between the aggregate price level for goods or services and the quantity of aggregate output supplied in an economy at a specific period of time.
If wages are sticky, then a greater than expected increase in the price level reduces the real costs of production, so the short-run aggregate supply curve shifts right.
In the short-run, a rightward shift in the aggregate supply (AS) curve causes output to increase and result in a price fall (lower price). The short-run nominal fluctuations basically cause a change in the level of production. In the short-run, as a result of a shift in the aggregate supply; an increase in money consequently to result in increase the level of production (output).
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.)
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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why do monopolistic firms exhibit excess capacity?
Answer:
Excess capacity under monopolistic competition is caused by product differentiation that leads to product variety and quality, which is beneficial to consumers. Consumers generally do not prefer homogenous products. Technically, excess capacity increases consumer satisfaction.
Explanation:
(hope this helps)
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.
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
The Goode Perk Company produces several models of coffee makers. There is little difference in the production time required for the various model coffee machines. The plant is designed to produce 160 coffee machines per eight-hour shift, and there are two shifts per working day.
However, the plant does not operate for the full eight hours: the employees take two 12-minute breaks in each shift, one in the first four hours and one in the second four hours; two hours per week are devoted to cleaning the factory and performing maintenance on the machines; one four-hour period every four weeks is devoted to the meeting of the quality circle. The plant usually produces about 3,500 coffee machines per four-week period. You may ignore holidays in solving this problem. The selling price of the product is $160.00 per machine. The variable costs per unit are broken down as follows:
- Labor $60.25
- Raw material $25.70
- Purchased component $21.50
- Variable overhead $27.50
The fixed costs total $503,000 per year.
Required:
Using the above information what are the total variable costs per unit?
On January 1 of the current year, Townsend Co. commenced operations. It operated its plants at 100% of capacity during January.
The following data summarized the results for January:
Units
Production 50,000
Sales ($18 per unit) 42,000
Inventory, January 31 8,000
Total Cost or Expense:
Manufacturing costs variable 575,000
Fixed 80,000
Total 655,000
Selling and administrative expenses:
Variable $35,000
Fixed 10,500
Total 45,500
(a) Prepare an income statement in accordance with absorption costing.
(b) Prepare an income statement in accordance with variable costing.
Answer:
Results are below.
Explanation:
The absorption costing method includes all costs related to production, both fixed and variable. The unit product cost is calculated using direct material, direct labor, and total unitary manufacturing overhead.
The variable costing method incorporates all variable production costs (direct material, direct labor, and variable overhead).
a) First, we need to calculate the unitary production cost under absorption costing:
Unitary production cost= (575,000 / 50,000) + (80,000 / 50,000)
Unitary production cost= $13.1
Now, the absorption costing income statement:
Sales= 42,000*18= 756,000
COGS= 13.1*42,000= (550,200)
Gross profit= 205,800
Total Selling and administrative expenses= (45,500)
Net operating income= 160,300
b) First, we need to calculate the total unitary variable cost:
Total unitary variable cost= (575,000/50,000) + (35,000 / 42,000)
Total unitary variable cost= $12.33
Now, the income statement:
Sales= 756,000
Total variable cost= 12.33*42,000= (517,860)
Total contribution margin= 238,140
Fixed overhead= (80,000)
Fixed selling and administrative= (10,500)
Net operating income= 147,640
Explain the role of secondary data in gaining customer insights
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.
On January 1, Elias Corporation issued 10% bonds with a face value of $68,000. The bonds are sold for $65,960. The bonds pay interest semiannually on June 30 and December 31 and the maturity date is December 31, 10 years from now. Elias records straight-line amortization of the bond discount. The bond interest expense for the year ended December 31 of the first year is
Answer:
the bond interest expense for the year ended December 31 of the first year is $7,004
Explanation:
The computation of the bond interest expense is shown below:
Interest expense ($68,000 × 10%) $6,800
Add: Amortization expense {($68,000 - $65,960) ÷ 10} $204
Total interest expense $7,004
Hence, the bond interest expense for the year ended December 31 of the first year is $7,004
Which descriptions are examples of Logistics Planning and Management Services workers? Check all that apply.
Lucretia supervises workers who organize the products in a warehouse.
Jeff organizes the redevelopment of areas contaminated by pollution.
Beatrice sells tickets to passengers for trips, and advises them about travel routes.
Stephanie inspects vehicles and equipment to make sure they meet safety standards.
Marcel oversees the transportation activities of an organization.
Armand analyzes procedures for shipping and storage to identify ways to make them more efficient.
Answer:
A,E,F
Explanation:
Brainliest Please
Answer:
A, E, F
Explanation:
Hope this helps, have a great day (;
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.
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
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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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)
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
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
I'm dealing with "internal economies of scale". We are considering monopolistic competition as an example. We assumed that firms are symmetric: they face the same demand function and have the same cost function.
Why do firms falling in this situation, have different marginal cost functions? Why is it true that some are well performing and some are not?
Answer:
The concept of Micro-Economics are the elasticity of demand, marginal costs, the ... firm. ME deals with Demand analysis, Forecasting, Production function, Cost ... same. Because this is the world of competition and it has to be faced with all the possible options. 5. ... When we consider the demand for a commodity by all the.
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
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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Tucker Company makes chairs. Tucker has the following production budget for January - March. January February March Units Produced 11,297 12,205 9,276 Each chair produced uses 4 board feet of wood. Management wants ending inventory levels of raw materials to equal 20% of the production needs (in wood) for the next month. How many board feet of wood does Tucker need to purchase in February? Round your answer to the nearest whole number. Don't round any intermediate calculations.
Answer:
Tucker Company
The number of board feet of wood that Tucker needs to purchase in February is:
= 46,297.
Explanation:
a) Data and Calculations:
Production Budget
January February March Total
Units Produced 11,297 12,205 9,276 32,778
Board fee for each chair 4 4 4 4
Total board feet required 45,188 48,820 37,104 131,112
Board feet required 45,188 48,820 37,104 131,112
Ending Materials Inventory 9,764 7,421
Beginning Materials Inventory (0) (9,764) (7,421)
Purchase of board feet 54,952 46,297
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
Mike's Motors Corp. manufactures motors for dirt bikes. The company requires a minimum $30,000 cash balance at each month-end. If necessary, the company borrows to meet this requirement, at a cost of 3% interest per month (paid at the end of each month). Any cash balance above $30,000 at month-end is used to repay loans. The cash balance on July 1 is $41,000, and the company has no outstanding loans at that time. Forecasted cash receipts and forecasted cash payments (other than for loan activity) are as follows.
Cash Receipts Cash Payments
July $92,000 $120,000
August 118,000 106,900
September 157,000 134,400
Required:
Prepare a cash budget for July, August, and September.
Answer:
Mike's Motors Corp.
Cash Budget
July August September
Beginning balance $41,000 $30,000 $30,000
Cash receipts 92,000 118,000 157,000
Total cash available $133,000 $148,000 $187,000
Cash payments 120,000 106,900 134,400
Interest/Loan repayment 11,100 6,602
Cash balance 13,000 30,000 45,998
Cash to borrow 17,000 0 0
Minimum cash balance $30,000 $30,000 $30,000
Explanation:
a) Data and Calculations:
Minimum cash balance = $30,000
Interest rate on borrowings = 3% per month
Beginning cash balance = $41,000
Cash Budget
July August September
Beginning balance $41,000 $30,000 $30,000
Cash receipts 92,000 118,000 157,000
Total cash available $133,000 $148,000 $187,000
Cash payments 120,000 106,900 134,400
Interest/Loan repayment 11,100 6,602
Cash balance 13,000 30,000 45,998
Cash to borrow 17,000 0 0
Minimum cash balance 30,000 30,000 30,000
Loan repayment:
In August:
Interest is paid = $510 ($17,000 * 3%)
Loan is repaid = 10,590
Total paid = $11,100
Balance of loan unpaid = $6,410 ($17,000 - 10,590)
In September:
Interest on loan = $192 ($6,410 * 3%)
Loan repaid = 6,602 ($6,410 + 192)
Explain three factors that had a negative impact on the financial performance of Unibic in its early years.
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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.
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
Dalia prefers the numbers in her excel document to show up as dollar amounts like “$5,234.15” instead of as numbers like “5234.15.” What is the most useful way for her to format that information?
Answer:
"5,234.15" is the most useful way
The most useful way for her to format that information is “$5,234.15”.
What is Excel?Microsoft Excel is a software package that is part of the Office product category for business applications. Users of Microsoft Excel can format, organize, and compute information in a spreadsheet.
It includes calculating or computation skills, charting tools, tables and charts, and the Visual Basic for Projects macro programming language.
Dalia provides dollar amounts like "$5,234.15" rather than numbers like "5234.15" in the preceding situation to provide unambiguous information about the locations of numbers that are ones, tens, hundreds, thousands, millions, billions, and so on.
Therefore, it can be concluded that "$5,234.15" is the most practical method for her to format that information.
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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.