Answer:
Debit to Bad Debt Expense Account for $7,200
Explanation:
Based on the information given we were told that the company accounts receivable shows the estimate of uncollectible receivables of the amount of $7,900 which means that if the Allowance for Doubtful Accounts has an amount of $700 as a credit balance, the adjustment to record the bad debt expense will be :
Debit to Bad Debt Expense account for the amount $7,200 calculate as :
Uncollectible receivables totals $7,900-Allowance for Doubtful Accounts $700 =$7,200
(7,900 - 700 )
Abbey Co. sold merchandise to Gomez Co. on account, $25,700, terms 2/15, net 45. The cost of the goods sold was $14,731. Abbey Co. issued a credit memo for $3,100 for merchandise returned that originally cost $1,458. Gomez Co. paid the invoice within the discount period. What is the amount of gross profit earned by Abbey Co. on the above transactions?
Answer:
Abbey Co.
Amount of gross profit earned by Abbey Co:
Net Sales = $22,600
Cost of goods sold 13,273
Gross profit $8,327
Explanation:
a) Data and Calculations:
Sales = $25,700
Sales returns = 3,100
Net Sales = $22,600
Cost of goods sold = $14,731
Inventory returned 1,458
Adjusted cost of goods sold $13,273
The gross profit is a function of sales revenue and cost of good sold. It is the first profit that is determined in the income statement. It tells the efforts of management to turn sales revenue into some profits, which will be used to offset the period's expenses before the net income could be arrived at.
Paradise Travels is an all-equity firm that has 6,000 shares of stock outstanding at a market price of $34 a share. The firm's management has decided to issue $40,000 worth of debt and use the funds to repurchase shares of the outstanding stock. The interest rate on the debt will be 7 percent. What are the earnings per share at the break-even level of earnings before interest and taxes? Ignore taxes.
Answer:
$2.38
Explanation:
Number of shares purchased
= $40,000 / $34
= $1,176
EBIT / 6,000 = [EBIT - ($40,000 * 0.07)] / (6,000 - 1176)
EBIT / 6,000 = (EBIT - $2,800) / 4,824
4,824 EBIT = 6000 EBIT - $16,800,000
1,176 EBIT = $16,800,000
EBIT = $14,285.71
Earning per Shares at Break-even level of earning
= [EBIT - ($40,000 * 0.07)] / (6,000 - 1,176)
= ($14,285.71 - $2,800) / 4,824
= $11,485.71 / 4,824
= $2.38
Accrual basis accounting recognizes ___ (equity/revenues/expenses) when the service or product is delivered and records ___ (revenues/expenses/liabilities) when ___ (incurred/paid) in order to adhere to the matching principle.
Answer: revenues ; expenses ; incurred
Explanation: Accrual basis of accounting from the english word 'accrue' means accumulation or gathering over a certain period of time. Hence, when investments, purchases are gathered or compiled over a certain time period.
In other to adhere to the matching principle under accrual basis of accounting :
Revenues should be recorded once the service or product is earned or delivered and not until when cash is paid. Expenses are recorded correspondingly irrespective of when the cash is paid out. Therefore, in accrual accounting, once obligation or expenses is incurred, expenses is recorded.
A company paid dividends of $15,000, generated total sales of $845,000, and incurred total expenses of $792,000 in the current year. If ending retained earnings is $165,000, what was beginning retained earnings?
Answer:
The beginning retained earnings will be "127,000".
Explanation:
The given values are:
Total sales,
= $845,000
Company paid,
= $15,000
Total expenses,
= $792,000
Retained earning,
= $165,000
Now,
⇒ [tex]Retained \ earning \ this \ year = Profits-Dividends[/tex]
⇒ [tex]=845,000-792,000 -$15,000[/tex]
⇒ [tex]=38,000[/tex]
and,
⇒ [tex]Beginning \ retained \ earnings = Ending \ RE-this \ year \ RE[/tex]
⇒ [tex]=165,000-38,000[/tex]
⇒ [tex]=127,000[/tex]
The campus barber faces stiff competition from the large number of shops that surround the campus area, and for all practical purposes the market is perfectly competitive. He charges $10 for a haircut and cuts hair for 18 people a day. His shop is open for 5 days a week.
Calculate his weekly total revenue $__.
Calculate his average revenue per haircut $__.
Calculate his marginal revenue per haircut. $__.
Answer:
$900
$10
$10
Explanation:
A perfect competition is characterised by many buyers and sellers of homogeneous goods and services. Market prices are set by the forces of demand and supply. There are no barriers to entry or exit of firms into the industry.
In the long run, firms earn zero economic profit. If in the short run firms are earning economic profit, in the long run firms would enter into the industry. This would drive economic profit to zero.
Also, if in the short run, firms are earning economic loss, in the long run, firms would exit the industry until economic profit falls to zero.
In a perfect competition, price = marginal revenue = average revenue
if price is $10, marginal and average revenue is $10.
total revenue = price per haircut x total number of people he attends to in a week.
total number of people he attends to in a week = 18 x 5 = 90
Total revenue = $10 x 90 = $900
Investments are different from savings accounts in that they A. Offer high profit potential B. Are FDIC-insured C. Guarantee to never lose money D. Can only be accessed online
Answer:
Option A, Offer high-profit potential, is the right answer.
Explanation:
Option A, “Offer high-profit potential” is the current answer because the savings account provides a fixed interest rate and this interest rate is sometimes unable to match the inflation. However, the investments give high profits. Moreover, there is zero risks associated with the savings accounts but there may be the risk involved in the investments. For example, investment in mutual funds given high profit but also involves the market risk.
The three people described in the following table are categorized as unemployed by the Bureau of Labor Statistics.
Identify each person in the table as structurally, frictionally, or cyclically unemployed.
Unemployment Type
Structural
Frictional
Cyclical
1. Teresa is a physician who has decided to relocate to California to be closer to her family. She is currently interviewing with several prestigious hospitals in the San Francisco Bay Area.
Automobile demand has fallen during a recent recession, and Beth has been laid off from her job on the assembly line.
2. Sam recently lost his job as a waiter at a local restaurant. A recent increase in the minimum wage keeps local employers from adding more of the low-skill positions for which he qualifies, so he has been unable to find work.
3. He continues to look for a job, but he's considering going back to school for vocational training. The following table shows data on frictional, cyclical, structural, and total unemployment for an economy.
Unemployment Type Rate
(Percent)
Frictional 1.1
Cyclical 0.0
Structural 3.2
Total unemployment 4.3
This economy is not currently at its natural rate of unemployment.
a. True
b. False
Answer:
1. Teresa is a physician who has decided to relocate to California to be closer to her family. She is currently interviewing with several prestigious hospitals in the San Francisco Bay Area. - Frictional
Frictional unemployment consists of the people who are in between jobs. Teresa is in between jobs because she moved to California, but she is expected to find new employment soon.
Automobile demand has fallen during a recent recession, and Beth has been laid off from her job on the assembly line. - Cyclical
Cyclical unemployment increases when the economy is in recession, and decreases when the economy is growing. In this case, Beth has been laid off because the market for automobiles is experiencing a downturn, thus, he is in cyclical unemployment.
Sam recently lost his job as a waiter at a local restaurant. A recent increase in the minimum wage keeps local employers from adding more of the low-skill positions for which he qualifies, so he has been unable to find work. - Structural
Structural unemployment occurs when a person's skills are mismatched with market demand. Sam's skills are not productive enough for him to be hired at the current minimum wage or above, therefore, he will have to acquire more skills in order to be hired again by another firm. He is in structural unemployment.
This economy is not currently at its natural rate of unemployment. - b. False
The natural rate of unemployment occurs when there is no cyclical unemployment, and there is only frictional and structural unemployment. In this case, the unemployment rate is 0.0, meaning that the economy is at its natural rate of unemployment.
A low-cost leader can translate its low-cost advantage over rivals into superior profit performance by Multiple Choice cutting its price to levels significantly below the prices of rivals. using its low-cost edge to underprice competitors and attract price-sensitive buyers in large enough numbers to increase total profits or refraining from price cutting and using the low-cost advantage to earn a higher profit margin on each unit sold. going all out to use its cost advantage to capture a dominant share of the market. spending heavily on advertising to promote the fact that it charges the lowest prices in the industry. outproducing rivals and thus having more units available to sell.
Answer: using its low-cost edge to underprice competitors and attract price-sensitive buyers in large enough numbers to increase total profits or refraining from price cutting and using the low-cost advantage to earn a higher profit margin on each unit sold.
Explanation:
A low cost leader is a type of leader that is concerned with giving out low prices for its customers.
It should be noted that a low-cost leader can translate its low-cost advantage over rivals into superior profit performance by using the low-cost edge in order ro underprice its competitors. Also, the low cost strategy will lead to more profit.
A company uses the weighted-average method for inventory costing. At the end of the period, 19,000 units were in the ending Work in Process inventory and are 100% complete for materials and 68% complete for conversion. The equivalent costs per unit are materials, $2.58, and conversion $2.20. Compute the cost that would be assigned to the ending Work in Process inventory for the period.
Answer: $77,444
Explanation:
Given the following :
Ending work in process inventory = 19,000 units
Complete for materials = 100%
Complete for conversion = 68%
Equivalent cost per unit (material) = $2.58
Equivalent cost per unit (conversion) = $2.20
Cost of ending work in process inventory (materials) :
Cost per unit (material) * (ending work in process inventory) * complete for material
$2.58 * 19000 * 100% = $49,020
Cost of ending work in process inventory (conversion) :
Cost per unit (conversion) * (ending work in process inventory) * complete for conversion
$2.20 * 19000 * 68% = $49,020
$2.20 * 19000 * 0.68 = $28,424
Total cost (ending work in process inventory) :
Material cost + conversion cost
$49,020 + $28,424 = $77444
If the Administrator were examining the actions of a particular agent to determine whether the agent engaged in churning a client's account, focus would be placed upon A) the number of complaints received relating to that agent B) the amount of profits generated in the client's account C) the client's objectives, financial resources, and the character of the account D) the length of time the account had been opened
Answer:
C) the client's objectives, financial resources, and the character of the account
Explanation:
While at the time of examining the actions of a specific agent by the administrator with respect to the commission earned would be depended upon the objective of the client, his financial resources,and the character of the account.
The character of the account represents the type of account in which the client is interest as different accounts have different commissions
So these three above objectives should be required
Hence, the option c is correct
Effective reading involves what four steps? Select one: a. Preparing, reading, capturing key ideas, and reviewing. b. Preparing, absorbing, capturing, reviewing c. Reading, note-taking, summarizing, reviewing d. Reading, capturing key ideas, summarizing, reviewing
Answer:
Preparing, reading, capturing key ideas, and reviewing.
Explanation:
By expressing concern for subordinates and representing their best interests in day-to-day activities, a manager demonstrates a(n) _______ behavior in the context of path–goal theory. directive supportive task-oriented achievement-oriented structural
Answer:
supportive
Explanation:
A supportive leader or manager according to the path-goal theory first introduced by Robert House is one that shows genuine concern for subordinates, while also representing their best interests in day-to-day activities.
By so doing, the manger, according to the path-theory would motivate and improve the performance of his subordinates.
A project's incremental cash flow is the difference between the firm's cash flow if it accepts the project versus if it rejects the project. Thus, if a project has an initial cost of $1 million in Year 1 and no other costs or revenues, then the incremental cash flow in that year will be -$1 million. True or false?
Answer:
false
Explanation:
Incremental cash flow is the additional cash flow from a project after the initial investment.
if a project has an initial cost of $1 million in Year 1 and no other costs or revenues, then the incremental cash flow in that year will be 0
A business plan for a new business does NOT need to include Multiple Choice any advantages relative to the competition. a discussion of the purpose of the business. a description of the company background. the names of the prospective lending companies.
Answer:
the names of the prospective lending companies.
Explanation:
A business plan can be defined as a written document that gives a detailed description or information about a business's (usually new) operational and financial objectives, strategies and how to achieve its goals.
The business plan usually provides the following informations;
1. Any advantages relative to the competition.
2. A discussion of the purpose of the business.
3. A description of the company background.
However, a business plan for a new business does not need to include the names of the prospective lending companies.
Unit of account is the function of money: that provides a common measurement of the relative value of goods and services. that shows the acceptability of money in exchange for goods and services. that shows the portability of money. that shows the ability of money to hold value over time.
Answer:
a common measurement of the relative value of goods and services.
Explanation:
Money has three functions. they are :
1. Medium of exchange : this shows the acceptability of money in exchange for goods and services.
2. Store of value : that shows the ability of money to hold value over time.
3. Unit of account : a common measurement of the relative value of goods and services. money serves a means by which one can measure the value of goods and services. for example, if we are told the price of a shoe is $1,000 and the price of another shoe is $50. We know that the $1,000 is relatively more valuable when compared to the $50 shoes.
Suppose that foreigners had reduced confidence in U.S. financial institutions and believed that privately issued U.S. bonds were more likely to be defaulted on. U.S. net exports would a. rise which by itself would increase aggregate demand. b. rise which by itself would decrease aggregate demand. c. fall which by itself would decrease aggregate demand. d. fall which by itself would increase aggregate demand.
Answer:
Option C, fall which by itself would decrease aggregate demand, is the right answer.
Explanation:
Option C is correct because the reduction in the confidence level in U.S financial institutions will decrease the U.S net export. Moreover, if the foreigner feels insecure about the U.S bonds then this insecurity will induce them to demand less. Therefore, when the net export decreases the aggregate demand will also fall. Thus we can say option C is right.
Suppose a competitive firm pays a wage of $12 an hour and sells its product at $3 per unit. Assume that labor is the only input. If hiring another worker would increase output by five units per hour, then to maximize profits the firm should Group of answer choices
Answer:
The answer is 'hire the additional worker'
Explanation:
The firm should hire the additional worker.
An organization should hire additional workers to increase its profits if the marginal revenue product of labor is more than the wage rate.
Let's do the calculation:
The firm sells the product at $3
And hiring another product will increase the output by 5units
The total cost will be 3 x 5
= $15
And the firm pays the labour $13 for producing the 5 units.
The gain is $2 ($15 - $13).
Therefore, the firm should hire the additional worker.
____ is the efforts to systematically find, organize, and make available a company's intellectual capital and to foster a culture of continuous learning and knowledge sharing so that organizational activities build on what is already known.
Answer: knowledge management
Explanation:
Knowledge management has to do
with the efficient handling of the resources and the information that is within an organization. Organizational objectives and goals can be easily achievable when there is an efficient use of the available knowledge.
Therefore, knowledge management is the efforts to systematically find, organize, and make available a company's intellectual capital and to foster a culture of continuous learning and knowledge sharing so that organizational activities build on what is already known.
Stock QWE plans to pay dividends of $3.00, $3.50, and $4.00 in each of the next three years. If the price of this stock will be $50.00 at the end of three years and the required rate of return by shareholders is 15%, then what is the value of the stock today
Answer:
$40.76
Explanation:
Calculation of the value of the stock today
First step is find the value of stock for each year.
The Value of stock today will be:
First year =($3.00 / 1.15^¹)
First year=($3.00/1.15)
First year=$2.61
Second year= ($3.50 / 1.15^²)
Second year =($3.50/1.3225)
Second year =$2.65
Third year= ($4.00 / 1.15^3)
Third year=($4.00/1.520875)
Third year =$2.63
End of third year= ($50.00 / 1.15^3)
End of third year = ($50.00/1.520875)
End of third year =$32.88
Last step is to add the amount for each year up
V0= $2.61 + $2.65 + $2.63 + $32.88
V0= $40.76
Therefore the value of the stock today will be $40.76
A company is evaluating the use of insurance to mitigate its risk in the event of a market downturn. The company estimates that it has a total risk of 20% impact to its net income if a market downturn occurs, and the company currently has a net income of $150,000. At what cost should the company take out insurance to mitigate this risk?
Available Options are:
a. $25,000 premium
b. $100,000 premium
c. $150,000 premium
d. $200,000 premium or above
Answer:
Option A. $25,000 Premium
Explanation:
The risk of loosing 20% of the company net income would be = $150,000 * 20% = $30,000
Now this is the highest cost the company could bear to insure the 20% downturn in the market. The cost below $30,000 amount available in the option is $25,000 is the right option here.
Hence Option A is correct.
Determining firm performance is a complex interaction of firm effects and industry effects, with other factors also considered. Based on historical analysis, what do we know about firm and industry effects
Answer and Explanation:
As per the historical analysis the explanation is shown below:-
a. Management decisions have a major role to play in firm results, rather than firm impact.
b. The influence of macro-environmental effects like recession is greater than that of either firm or industrial effects.
c. The firm effects have a greater impact on results than on the effects on industry.
d. The effects of the industry get more effect on results than firm effects.
If the world price of a good is below its domestic price, the country will: Please choose the correct answer from the following choices, and then select the submit answer button. Answer choices import that good. export that good. put a price floor on that good. have a surplus of that good.
Answer:
import that good
Explanation:
International trade involves the exchange of goods and services between countries.
Due to comparative advantage that some countries have in producing goods they incur less cost than other countries when manufacturing such goods.
In the give scenario where world price of a good is below its domestic price, the country does not have comparative advantage in producing the good. Their cost of production is higher than world price.
The best option will be to import the good. This will save the country high cost of production locally
Loren has a $200 annual (calendar year) deductible on her health insurance plan. By the end of 2018, she had paid $175 in medical expenses. On January 4, 2019 she went to the doctor for the first time that year and was charged $60 for an office visit. How much of that must she pay for herself
Answer:
$60
Explanation:
Based on the information given about Loren the amount that she must pay herself will be $60 reason been that the amount of $175 she paid for her medical expenses at the end of 2018 was based on her health insurance plan, while the $60 was the amount of money she paid her self or the amount she was charge her for visiting the doctor for the first time on January 4, 2019.
Generally, deductibles are calculated on a calendar year basis. This means that, excluding copays, coinsurance, and non-covered charges, your health care bills must surpass your deductible between January and December for the insurance provider to begin paying.
Based on the information given about Loren the amount that she must pay herself will be $60 reason been that the amount of $175 she paid for her medical expenses at the end of 2018 was based on her health insurance plan, while the $60 was the amount of money she paid her self or the amount she was charge her for visiting the doctor for the first time on January 4, 2019.
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although the collapse of prices on the new york stock exchange in october 1929 caused severe problems in the united states, it also had immediate and disastrous consequences in europe because
porque al tener una quiebra del mercado de valores de Nueva York, llevo a una deflación haciendo que esta gran potencia no ayude a los otros países económicamente produciendo estas consecuencias en Europa y otros países del mundo que recibían ayuda de esta gran potencia (EEUU)
A Nash equilibrium occurs when: each player receives the same final payoff. each player believes it is doing the best it can given the behavior of rivals. there is no dominant strategy for any player. payoffs are independent of the actions taken by rivals.
Answer:
Option B, “Each player believes it is doing the best it can given the behavior of rivals” , is the right answer.
Explanation:
Option B is correct because Nash equilibrium is the situation where each player is earning the highest payoff and there is no intention to change their optimum strategy. However, if any player changes their strategy then they will get the lower payoff. Therefore, in the Nash equilibrium, each player knows his best moves and also knows the behavior of their competitor.
In a long period of economic expansion, the tax revenue collected _____ and the amount spent on welfare programs _________, creating a budget ________. Group of answer choices increases, decreases, deficit decreases, increases, deficit increases, increases, surplus increases, decreases, surplus decreases, decreases, surplus
Answer:
increases, decreases, surplus
Explanation:
In a long period of economic expansion, the income earned by individuals would higher, so the amount of tax earned would increase also. Also, In a long period of economic expansion, unemployment would be reduced so the government would spend less on welfare programs
when government revenue exceeds expenditure, there is a surplus.
A company had the following treasury-stock related account balances: Treasury Stock - $150,000 Paid-in Capital from Treasury Stock Transactions - $15,000 If the company resells Treasury Stock that originally cost $50,000 for $40,000, then __________.
Answer: If the company resells Treasury Stock that originally cost $50,000 for $40,000, then paid-in capital from treasury stock transactions is reduced by $10,000.
Explanation:
Given: A company had the following treasury-stock related account balances: Treasury Stock - $150,000
Paid-in Capital from Treasury Stock Transactions - $15,000
If the company resells Treasury Stock that originally cost $50,000 for $40,000.
$40,000< $50,000 implies reduction in paid-in capital from treasury stock.
i.e. Reduced Paid-in Capital from Treasury Stock Transactions = $50,000- $40,000
= $10,000
So, if the company resells Treasury Stock that originally cost $50,000 for $40,000, then paid-in capital from treasury stock transactions is reduced by $10,000.
Carter Co. sells two products: Arks and Bins. Last year, Carter sold 14,000 units of Arks and 56,000 units of Bins. Related data are as follows: Product Unit Selling Price Unit Variable Cost Unit Contribution Margin Arks $120 $80 $40 Bins 80 60 20 Carter Co.'s sales mix last year was
Product Unit Selling Price Unit Variable Cost Unit Contribution Margin Arks $120 $80 $40 Bins 80 60 20 Carter Co.'s sales mix last year was 0.20 and 0.80.
What is selling price?Selling price is defined as the final cost of a product, or how much the customer ultimately pays. Steps to determine the selling price are Discover the price per item. Choose the gross profit margin you want. Fill in the formula using these values. Apply the outcome and interpret it.
20% Arks and 80% Bins made up the sales mix for Carter Co. last year.
To calculate the total units sold for Carter Co., we sum the two sold units. Seventy thousand units were sold altogether.
14 units plus 56 units equals 70 units.
We divide the number of units sold by Arks (14,000 units) by the total number of units sold by Carter Co. to get the sales mix of Arks (70,000 units). 20% of Arks' sales mix is in retail.
14,000 / 70,000 = 0.20 is the sales mix for Arks.
We divide the number of units of Bins (56,000 units) by the total number of units sold by Carter Co. to determine the sales mix of Bins (70,000 units). Bins' sales mix is 80% mixed.
56,000 / 70,000 = 0.80 is the sales mix of bins.
Thus, product Unit Selling Price Unit Variable Cost Unit Contribution Margin Arks $120 $80 $40 Bins 80 60 20 Carter Co.'s sales mix last year was 0.20 and 0.80.
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A workstation must produce 200 units an hour. It takes 45 minutes to receive the necessary material for production from the previous workstation. Output is moved between workstations in containers holding 30 units. If the process uses a safety factor of 20%, then the number of kanbans that should be circulating between this workstation and the previous workstation is: Group of answer choices
Answer:
The number of Kanbans circulating between this workstation and the previous workstation is 6 Containers
Explanation:
Given demand = 200 unit / hour
45 minutes between one workstation to another
Container size = 30
Safety factor = 20% = 0.2
Demand during lead time of 45 minutes = 45minute / 60minute * 200 units = 150 units
Number of Kanbans = Demand during lead time ( 1 + Safety factor) / Container size
= 150 (1 + 0.20) / 30
= 150 (1.20) / 30
= 180 / 30
= 6 Containers
When going into a partnership, you should always:_________.
a. put all terms of the partnership into writing in a partnership agreement.
b. make sure that you have limited liability while you are in charge.
c. make sure all the profits are reinvested into the company.
Answer: A. put all terms of the partnership into writing in a partnership agreement.
Explanation:
The most important terms in a partnership agreement is ensuring that all terms are noted down and binded legally, this is to help partners know when need to do something and don't feel cheated or be cheated by someone or something. Avoidance of reaching out to terms noted down will further make things complex either when the business is growing or when there is need to shutdown or during operations.