Available Options Are:
a. Increasing ROIC by increasing return on sales
b. Decreasing ROIC by increasing return on sales
c. Decreasing ROIC by decreasing return on sales
d. Increasing ROIC by decreasing return on sales
Answer:
Option C. Decreasing ROIC by decreasing return on sales
Explanation:
The return on sales would be reduced as the research expenses have increased substantially. The implications of increased research expenses on the ROIC can be understood by analyzing the ROIC formula which is given as under:
ROCI = Operating Income (1 - Tax Rate) / Book Value of Invested Capital
As revenue expenditure (Research and Development expenses) of the company has increased, this would decrease the operating income of the company which means that the numenator would be decreased and as a result the ROCI would decrease.
Interviewers believe that when a candidate says negative things about their current employer, it shows the candidate is emotionally ready to switch to a new company.
a) Mostly true
b) Mostly false
Answer:
b) Mostly false
Explanation:
An Interview is the most essential part for the interviewer or an interviewee. The Interview is a part of a formal meeting where two or more people engage for evaluating, consulting etc. so that both the parties can determine their requirement.
Therefore according to the given situation, it is false to think that interviewer can judge that when the interviewee says the bad things for this current organization or their profile, this does not mean that the employee is ready to switch the job.
So, the right answer is b.
The following selected amounts are reported on the year-end unadjusted trial balance report for a company that uses the percent of sales method to determine its bad debts expense. Accounts receivable$441,000Debit Allowance for Doubtful Accounts 1,310Debit Net Sales 2,160,000Credit All sales are made on credit. Based on past experience, the company estimates 1.0% of credit sales to be uncollectible. What adjusting entry should the company make at the end of the current year to record its estimated bad debts expense
Answer:
The Adjusting entry at the end of the current year to record its estimated bad debts expense is:
Journal Entry:
Debit Bad Debts Expense $22,910
Credit Allowance for Doubtful Accounts $22,910
To record the bad debts expense and bring the Allowance for Doubtful Accounts to a credit balance of $21,600.
Explanation:
a) Allowance for Doubtful Accounts
Beginning balance $1,310 Dr.
Ending balance 21,600
Uncollectible Expense = $22,900
b) Uncollectible for the period = 1% of $2,160,000 = $21,600
This should be the ending balance of the Allowance for Doubtful Accounts.
c) The above journal entry will ensure that the balance in the Allowance for Doubtful Accounts is now $21,600 credit.
After reviewing his budget, Josh realizes he can't spend more than $40 on a pair of new shoes, so he decides to shop only at stores that carry shoes in his price range. What is this an example of? A. A rational choice B. A value-added motivation C. An emotional choice D. An impulsive selection
Answer:
A. A rational choice
Explanation:
I think that this is an example of a rational choice because there is a logical reason that Josh wants to buy shoes that cost less than $40. Value-added wouldn't work, because there is no added value. Emotional choice wouldn't work either because the question does not say that Josh wants a specific type of shoes. Lastly, impulsive selection doesn't fit because the reason Josh doesn't want to spend more than $40 dollars is not random.
how to solve this problem:If a borrower can afford to make monthly principal and interest payments of $1,000 and the lender will make a 30-year loan at 5-1/2%, or a 20-year loan at 4-1/2%, what is the largest loan (rounded to the nearest $100) this buyer can afford?
Answer:
30-year loan at 5-1/2% ⇒ MAXIMUM LOAN $176,100
using a loan amortization table, you will pay $5.6786 for every $1,000 that you borrow, so you can borrow up to $1,000 / $5.6786 = 176.1 thousands
principal = $176,100
first payment:
interests = $176,100 x 0.055 x 1/12 = $807.13
repaid principal = $192.87
20-year loan at 4-1/2% ⇒ MAXIMUM LOAN $158,000
using a loan amortization table, you will pay $6.3291 for every $1,000 that you borrow, so you can borrow up to $1,000 / $6.3291 = 158 thousands
principal = $158,000
first payment:
interests = $158,000 x 0.045 x 1/12 = $592.50
repaid principal = $407.50
1. The maximum loan a borrower can take, if he can afford to make a monthly payment of $1,000, including principal and interest, for a 30-year loan at 5.5% interest, is $176,100.
2. The maximum loan a borrower can take, if he can afford to make a monthly payment of $1,000, including principal and interest, for a 20-year loan at 4.5% interest, is $158,100.
Data and Calculations:
a) N (# of periods) 360 months (30 x 12)
I/Y (Interest per year) = 5.5%
PMT (Periodic Payment) = $1,000
FV (Future Value) = $0
Results:
PV = $176,121.76
Sum of all periodic payments = $360,000 ($1,000 x 360)
Total Interest = $183,878.24
b) N (# of periods) = 240 months (20 x 12)
I/Y (Interest per year) = 4.5%
PMT (Periodic Payment) = $1,000
FV (Future Value) = $0
Results:
PV = $158,065.44
Sum of all periodic payments = $240,000 ($1,000 x 240)
Total Interest = $81,934.56
Thus, to solve this problem, input $1,000 as the periodic payment on a financial calculator and then calculate the present value of $1,000 at the interest rate for the given period.
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Playtown Corporation purchased 75 percent of Sandbox Corporation common stock and 40 percent of its preferred stock on January 1, 20X6, for $270,000 and $80,000, respectively. At the time of purchase, the fair value of the common shares of Sandbox held by the noncontrolling interest was $90,000. Sandbox's balance sheet contained the following balances:
Preferred Stock ($10 par value) $200,000
Common Stock ($5 par value) 150,000
Retained Earnings 210,000
Total Stockholders' Equity $560,000
Required
Give the eliminating entries needed to prepare a consolidated balance sheet immediately after Clayton purchased the Topple shares.
Answer:
Elimination Journal.
Retained Earnings $210,000 (debit)
Common Stock $ 150,000 (debit)
Investment in Sandbox Corporation $270,000 (credit)
Non-Controlling Interest $90,000 (credit)
Explanation:
When dealing with consolidation of Financial Statements, the Equity and Retained Earning in the Subsidiary has to be eliminated from the records whilst the Investment in Subsidiary and the Non-Controlling Interest in Subsidiary are recognized.
Elimination of the common items in consolidation is done by the use of Pro-forma Journals.
Goodwill or Gain on Bargain Purchase are also recognized on the date of acquisition of subsidiary.
Goodwill is the excess of Purchase Price and Non-Controlling interest over the Net Assets Acquired.While Gain on Bargain Purchase is the excess of Net Assets Acquired over Purchase Price and Non-Controlling interest.
Elimination Journal.
Retained Earnings $210,000 (debit)
Common Stock $ 150,000 (debit)
Investment in Sandbox Corporation $270,000 (credit)
Non-Controlling Interest $90,000 (credit)
The smaller the required reserve ratio the larger the simple deposit multiplier. Do you agree or disagree with this statement. Explain your answer.
Answer:
Agree
Explanation:
A deposit multiplier is maximum amount of money that can be created for each unit of reserve. It is key requirement for maintaining economy's basic money supply. The simple deposit multiplier is 1 / rr * change in R. Deposit multiplier is the inverse of reserve ratio. The higher the reserve ratio the lesser will be the deposit multiplier. Reserve ratio is the minimum amount of money that must be kept in the deposit.
Which of the following could be considered barriers to entry that would prevent potential competitors from entering a monopoly market?
Select the two correct answers below.
a) patent and copyright laws
b) few workers in the industry
c) extremely high demand for a certain product
d) ownership of a critical factor of production
Answer:
a) patent and copyright laws
d) ownership of a critical factor of production
Explanation:
a monopoly is when there is only one firm operating in an industry.
the different reasons why monopoly exists are :
ownership of a key resource. this is natural monopoly
high start up cost
legal barriers - patent and copyright laws
Economies of scale.
Lenore, Inc. gathered the following information from its accounting records and the October bank statement to prepare the October bank reconciliation: Ending cash balance per books, 10/31$7,000 Deposits in transit 300 Interest received from bank 1,700 Bank service charge for check printing 60 Outstanding checks 4,000 NSF check of T. Owens 350 The up-to-date ending cash balance on October 31 is:_______
A. $7,940
B. $4,590
C. $8,290
D. $5,290
Answer:The up-to-date ending cash balance on October 31 is: $8,290---C
Explanation:
A bank Reconciliation statement helps to match a company's book record to its bank record and adjust discrepancies, If any.
Here, the deposits in transit and outstanding checks fall under the bank's accounting records and will not be involved in the company's additions or deductions in the accounting book balance records.
Ending cash balance as per books = $7,000
Add:
Interest received from Bank = +$1,700
subtotal $8,700
Deduct
Bank Service charge = -$60
NSF check = -$350
Up-to-date ending cash balance = $8,290
The up-to-date ending cash balance on October 31 is: C. $8,290.
Using this formula
Up-to-date ending cash balance = Ending cash balance per books + Interest received from the bank − Bank service charge − NSF check of T. Owens
Let plug in the formula
Up-to-date ending cash balance = $7,000 + $1,700 − $60 − $350
Up-to-date ending cash balance = $8,290
inconclusion the up-to-date ending cash balance on October 31 is: C. $8,290.
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A corporation issued 2,500 shares of its no par common stock at a cash price of $11 per share. The entry to record this transaction would be: A. Debit Treasury Stock $27,500; credit Cash $27,500. B. Debit Cash $27,500; credit Common Stock $27,500. C. Debit Common Stock $27,500; credit Cash $27,500. D. Debit Cash $27,500; credit Paid-in Capital in Excess of Par Value, Common Stock $2,500; credit Common Stock $25,000. E. Debit Treasury Stock $2,500; debit Paid-in Capital in Excess of Par Value, Treasury Stock $25,000; credit Common Stock $27,500.
Answer:
B. Debit cash $27,500 ; Credit common stock $27,500
Explanation:
The journal entry to record the transaction is;
Cash account Dr $27,500
(2,500 shares × $11)
To Common stock account Cr $27,500
Cash is an asset hence debited because it decreases as it was used to pay for bills while common stock is credited because it increases shareholder's equity.
The following transactions relate to the General Fund of the City of Buffalo Falls for the year ended December 31, 2017: Beginning balances were: Cash, $93,000; Taxes Receivable, $189,500; Accounts Payable, $52,250; and Fund Balance, $230,250. The budget was passed. Estimated revenues amounted to $1,230,000 and appropriations totaled $1,227,400. All expenditures are
Answer:
Estimated Revenue Control (Dr.) $1,230,000
Appropriation (Cr.) $1,227,400
Budgetary Fund (Cr.) $2,600
Tax receivable (Dr.) $189,500
Revenue (Cr.) $189,500
Cash (Dr.) $93,000
Tax receivable (Dr.) $96,500
Revenue (Cr.) $189,500
Expenditure Control (Dr.) $52,250
Accounts Payable (Cr.) $52,250
Accounts Payable (Dr.) $52,250
Cash (Cr.) $52,250
Explanation:
Buffalo Falls earned and received tax revenue of $189,500. This will be reflected on debit side when journal entry is made and revenue is credited as per transaction. The company has now recorded a transaction of expenditure control of $52,250. These transaction are recorded by debiting the expenditure control account and crediting the accounts payable.
"A stock is quoted at $18 - $19. If a customer sells 100 shares to the dealer, under the FINRA 5% Policy, a fair and reasonable mark-down is based upon which price?"
Answer:
$18
Explanation:
Based on the information given above under the FINRA 5% Policy a fair and reasonable mark-down is based upon the price of $18 reason been that we were been ask about how much price will the mark-down price be based in a situation where the customer SELLS 100 shares to the dealer which means that mark-down will be computed from the inside bid price of the amount of $18.
The US Public Debt was $18.2 trillion in 2015. This was up from $16.4 trillion in 2012. In 2015, Foreign ownership was 34% of that total, or $6.1 trillion. Of this $6.1 trillion, China held 20%, Japan 18%, and oil exporting nations 5%.
1) How does the fact that 34% (and increasing) of the debt is held by foreigners make you feel?
2) What are potential risks or pitfalls with foreigners owning an increasing amount of the US Debt?
3) How concerned should we feel?
Answer:
1) The fact that 34% and increasing of the debt of The US is held by Foreigners is worrisome
2) some of the pitfalls to this increasing debts owned by Foreigners includes : partial loss of the country sovereignty, devaluation of the dollar and difficulties in meeting repayment conditions
3 ) we as a Nation should feel very concerned and sort for other means of funding instead of accumulating foreign public debts .
Explanation:
Total debt owed in 2015 = $18.2 trillion
Total debt owed in 2012 = $ 16.4 trillion
increase in debt = $1.8 trillion percentage increase = 1.8 / 16.4 * 100 = 10.98%
1) The fact that 34% of the debt of The US is held by Foreigners is worrisome
2) some of the pitfalls to this increasing debts owned by Foreigners includes : partial loss of the country sovereignty, devaluation of the dollar and difficulties in meeting repayment conditions
3 ) we as a Nation should feel very concerned and sort for other means of funding instead of accumulating foreign public debts .
Greenbrier Industrial Products' bonds have a 7.60 percent coupon and pay interest annually. The face value is $1,000 and the current market price is $1,062.50 per bond. The bonds mature in 16 years. What is the yield to maturity
Answer:
6.9%
Explanation:
To find the answer, you have to use the formula to calculate the yield to maturity:
Yield to maturity= (C+(F-P/n))/(F+P/2), where:
C= Coupon payment= $1,000*7.60%= $76
F= Face value= $1,000
P= Price= $1,062.50
n= Years to maturity= 16
Yield to maturity=(76+(1,000-1,062.50/16))/(1,000+1,062.50/2)
Yield to maturity=72,09/1,031.25
Yield to maturity=0.069 → 6.9%
Accoriding to this, the yield to maturity is 6.9%.
You have just made your first $5,000 contribution to your individual retirement account. Assume you earn an annual return of 10.65 percent and make no additional contributions.
Required:
a. What will your account be worth when you retire in 42 years?
b. What if you wait 10 years before contributing?
Answer:
Results are below.
Explanation:
Giving the following information:
Initial investment= $5,000
i= 10.65%
To determine future value, we need to use the following formula:
FV= PV(1+i)^n
For 42 years:
FV= 5,000*(1.1065^42)
FV= $350,695
Now, for 32 years:
FV= 5,000*(1.1065^32)
FV= $127,472.17
Othello S. Corporation produces and sells a single product. The information about their operation for the last month is given below. Price per unit $40.00 Contribution margin ratio 50% Fixed expenses $8000 Operating leverage 2 Q: How many units did they sell during the last month
Answer:
400 units
Explanation:
price per unit $40
variable costs per unit $20
fixed expenses $8,000
operating leverage = fixed costs / total costs
operating leverage = 2fixed costs = $8,000total costs = ($8,000 + total variable costs)2 = $8,000 / ($8,000 + total variable costs)
2($8,000 + total variable costs) = $8,000
$4,000 + 0.5(total variable costs) = $8,000
0.5(total variable costs) = $4,000
total variable costs = $4,000/0.5 = $8,000
total variable costs = total output x variable cost per unit
$8,000 = total output x $20
total output = $8,000 / $20 = 400 units
Unrealized holding gains and losses on debt securities classified as available-for-sale would have the following effects on accumulated other comprehensive income: Gains Losses a. Increase Increase b. Decrease Decrease c. Decrease Increase d. Increase Decrease
Answer: d. Increase Decrease
Explanation:
Available - For - Sale securities are accounted for in the Equity section of the balance sheet under Other Comprehensive income (OCI). As the gains cannot be realised until the security is sold, it is accounted for here to show an increase or a decrease in value. When the security gains in value over what it cost, this will increase OCI and when it losses value below what it cost, this will reduce the OCI.
In the United States, the standard methodology for consumers with respect to privacy is to _______________, whereas in the EU it is to ______________.
Answer:
In the United States, the standard methodology for consumers with respect to privacy is opt-out with respect to the United States and her Privacy Law, whereas in the EU it is opt-in.
Explanation:
Privacy laws are laws that provide protection and regulation against storing, using data that might be considered private to an individual or any organisation. such laws act as a guard against any usage of information by governments, public or private organisations, or even other individuals in any part of the world without the owner of such data giving their consent.
Privacy laws, rules, and policies are different from one country to another which all depends on their legal framework and cultural sensitivities in such a nation.
In the United States, the standard methodology for consumers with respect to privacy is opt-out with respect to the United States and her Privacy Law, whereas in the EU it is opt-in.
Opting-out laws cover a spectrum that consists of methods used by an individual to avoid receiving unsolicited service information. When receiving unsolicited service information as a result of data collection a consumer might seek an out way to stop it and to opt-out require affirmative steps to prevent unsolicited service and products. Under opt-out a user can be signed up much more easily.
Opt-In is when an individual chooses to join or participate in something and acknowledging interest in a product or service. Opt-in is used under European data protection rules which grant individuals more control of their data when the person agrees to receive the specified services.
The Library is a new bar in town. Unlike the other bars in town, it charges no cover charge. The new bar has also priced its beer at $3 less per pitcher than its competition. Given what you know about pricing strategies, which pricing strategy is the owner of the new bar using
Answer: B. Penetration pricing
Explanation:
Penetration pricing is a strategy that is used by new companies in a market to capture market share from more established competitors. The process is for the new company to charge a lesser price than the amount that the other companies are charging which will bring people to the new firm for patronage.
It will thus capture market share and due to the high demand, be able to make profits due to Economies of Scale.
By charging less than its competitors, the new bar's owner is most likely pursuing a Penetration Strategy.
intext:"Pelcher Co. maintains a $400 petty cash fund. On January 31, the fund is replenished. The accumulated receipts on that date represent $110 for office supplies, $140 for merchandise inventory, and $70 for miscellaneous expenses. There is a cash overage of $4. Based on this information, the amount of cash in the fund before the replenishment is"
Answer:
$84
Explanation:
Calculation for the amount of cash in the fund before the replenishment for Pelcher Co.
Petty Cash $400
Less : Office Supplies ($110)
Less: Merchandise Inventory ($140)
Less :Miscellaneous ($70)
Add Cash Overage $4
Cash in Fund $84
Therefore the amount of cash in the fund before the replenishment for Pelcher Co will be $84
You want to create a portfolio equally as risky as the market, and you have $500,000 to invest. Information about the possible investments is given below: Asset Investment Beta Stock A $ 146,000 .91 Stock B $ 134,000 1.36 Stock C 1.51 Risk-free asset How much will you invest in Stock C
Answer:
Investment in stock C is $122450.3311 rounded off to $122450.33
Explanation:
A portfolio which is equally as risky as market should have a beta equal to the beta of the market as beta is a measure of the riskiness. The beta of market is always equal to 1. The formula for beta of a portfolio is as follows:
Portfolio beta = wA * Beta A + wB * Beta B + ... + wN * Beta N
Where w represents the weight of each stock in the portfolio.
Let investment in stock C be x
1 = 146000/500000 * 0.91 + 134000/500000 * 1.36 + x/500000 * 1.51
1 = 0.26572 + 0.36448 + 1.51x / 500000
1 - 0.6302 = 1.51x / 500000
0.3698 * 500000 = 1.51x
1844900 / 1.51 = x
x = $122450.3311 rounded off to $122450.33
One of the major criticisms of functionalist theory is that it ____________. a. assumes greater equality leads to a more successful and productive organization b. ignores macro-level factors affecting social organizations c. correctly identifies how informal social networks influence organizations d. tends to gloss over dysfunctions like worker dissatisfaction and alienation e. emphasizes that social groups and organizations are composed of interrelated parts
Answer: D. tends to gloss over dysfunctions like worker dissatisfaction
Explanation:
The correct option is (D) tends to gloss over dysfunctions like worker dissatisfaction and alienation.
Functionalism has come under fire for failing to adequately account for societal change and underestimating the importance of human activity. The main units of study in the functionalist viewpoint are society and its institutions.Functionalism has drawn criticism for underestimating the importance of human activity and for failing to explain social change.What is a criticism of structural functionalism ?The main critique of structural-functionalism is that it is unable to explain why certain social behaviors continue to exist while having no purpose. The primary premise behind. symbolic interactionism is that humans attribute meaning to things based on interactions with others and society.Learn more about functionalist theory https://brainly.com/question/15169486
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At each calendar year-end, Mazie Supply Co. uses the percent of accounts receivable method to estimate bad debts. On December 31, 2017, it has outstanding accounts receivable of $55,000, and it estimates that 2% will be uncollectible. Prepare the adjusting entry to record bad debts expense for year 2017 under the assumption that the Allowance for Doubtful Accounts has: (a) a $415 credit balance before the adjustment. (b) a $291 debit balance before the adjustment.
Answer:
Mazie Supply Co.
Adjusting entries under the assumptions that the allowance for doubtful accounts has:
a) A $415 credit balance before the adjustment:
Debit Bad Debts Expense $685
Credit Allowance for Doubtful Accounts $685
To record the bad debts expense for the year.
b) A $291 debit balance before the adjustment:
Debit Bad Debts Expense $1,391
Credit Allowance for Doubtful Accounts $1,391
To record bad debts expense and bring the allowance for doubtful accounts to a balance of $1,100.
Explanation:
a) Accounts Receivable outstanding = $55,000
Uncollectible estimate of 2% = $1,100
b) With a credit balance of $415, the balance will be brought to $1,100 with an adjusting amount of $685 ($1,100 - $415).,
c) With a debit balance of $291, the balance will be brought to $1,100 with an adjusting amount of $1,391 ($1,100 + 291).
d) When the allowance for doubtful accounts has a credit balance, the bad debts expense is calculated as the difference between the new balance and the old credit balance. But, if the allowance for doubtful accounts has a debit balance, the bad debts expense would be the addition of the estimated allowance and the debit balance. These actions will respectively bring the balance of the allowance for doubtful accounts to the new estimated balance.
ROI: Fill in the Unknowns Provide the missing data in the following situations: North American Division Asian Division European Division Sales Answer $5,000,000 Answer Net operating income $80,000 $200,000 $168,000 Operating assets Answer Answer $700,000 Return on investment 16% 10% Answer Return on sales 0.04 Answer 0.16 Investment turnover Answer Answer 1.5
Answer and Explanation:
The computation of the missing data is shown below:
Particulars North American Asian European
division Division Division
Sales $2,000,000 $5,000,000 $1,050,000
Net Operating
Income $80,000 $200,000 $168,000
Operating
assets $500,000 $2,000,000 $700,000
Return on
Investment 16% 10% 24%
Return on sales 0.04 0.04 0.16
Investment
turnover 4 2.5 1.5
Working notes :
1. For North American division
Sales is
= Net operating income ÷ return on sales
= $80,000 ÷ 0.04
= $2,000,000
Operating assets is
= Net Operating income ÷ return on investment
= $80,000 ÷ 16%
= $500,000
Investment turnover is
= Sales ÷ operating assets
= $2,000,000 ÷ $500,000
= 4
For Asian Division
Operating assets is
= Net operating income ÷ return on investment
= $200,000 ÷ 10%
= $2,000,000
Return on sales is
= Net Operating income ÷ sales
= $200,000 ÷ $5,000,000
= 0.04
Investment turnover is
= Sales ÷ operating assets
= $5,000,000 ÷ $2,000,000
= 2.5
For European division:
Sales is
= Operating assets × investment turnover
= $700,000 × 1.5
= $1,050,000
Return on investment is
= Net operating income ÷ operating assets × 100
= $168,000 ÷ $700,000
= 24%
You want to buy a new sports coupe for $74,500, and the finance office at the dealership has quoted you a loan with an APR of 6.9 percent for 36 months to buy the car.
Required:
a. What will your monthly payments be?
b. What is the effective annual rate on this loan?
Answer:
a) Monthly payments = $22,969.38
b) Effective rate of return= 7.12%
Explanation:
Loan Amortization: A loan repayment method structured such that a series of equal periodic installments will be paid for certain number of periods to offset both the loan principal amount and the accrued interest.
The monthly installment is computed as follows:
Monthly installment= Loan amount/annuity factor
Loan amount; = 74,500
Annuity factor = (1 - (1+r)^(-n))/r
r -monthly rate of interest, n- number of months
r- 6.9%/12 = 0.575 % = 0.00575, n = 36 =
Annuity factor = ( 1- (1+00575)^(-36)/0.00575= 32.434
Monthly installment = Loan amount /annuity factor
= 74,500/32.434= 22,969.38
Required monthly payments = $22,969.38
Effective annual interest rate
Effective rate of return = ((1+r)^n- 1) × 100
where r - monthly interest rate- 6.9%/12 = 0.575%
n- number of months= 12 months
Effective rate of return - (1+00575)^(12) - 1× 100= 7.12%
Effective rate of return= 7.12%
The balance sheet of Subsidiary Co. shows assets of $86,400 and liabilities of $15,000. The fair value of the assets is $90,000 and the fair value of its liabilities is $15,000. Parent Co. paid Subsidiary $95,000 to acquire it. Parent should record goodwill on this purchase of:
Answer: $20,000
Explanation:
The following information can be gotten from the question:
Investment in Subsidiary Co. = $95,000
Less: Net asset value = $71,400
Less: Balance sheet adjustment = $3,600
Goodwill = $95,000 - $71,400 - $3,600
= $20,000
Note that:
Net asset value = Asset with book value - Liability with book value
= $86,400 - $15,000
= $71,400
Balance sheet adjusted = Fair value of asset - book value of asset
= $90,000 - $86,400
= $3,600
Royal Lawncare Company produces and sells two packaged products—Weedban and Greengrow. Revenue and cost information relating to the products follow: Product Weedban Greengrow Selling price per unit $ 9.00 $ 39.00 Variable expenses per unit $ 2.70 $ 14.00 Traceable fixed expenses per year $ 131,000 $ 33,000 Last year the company produced and sold 40,500 units of Weedban and 18,500 units of Greengrow. Its annual common fixed expenses are $101,000. Required: Prepare a contribution format income statement segmented by product lines.
Answer:
Royal Lawncare Company
Income Statement
Total Weedban Greengrow
Sales revenue $1,086,000 $364,500 $721,500
Variable costs $368,350 $109,350 $259,000
Contribution $717,650 $255,150 $462,500
margin
Traceable fixed $164,000 $131,00 $33,000
costs
Segment margin $553,650 $124,150 $429,500
Common fixed $101,000
costs
Net income $452,650
Jansen Company reports the following for its ski department for the year 2019. All of its costs are direct, except as noted.
Sales $610,000
Cost of goods sold 435,000
Salaries 113,000 ($25,000 is indirect)
Utilities 15,600 ($5,700 is indirect)
Depreciation 54,400 ($17,400 is indirect)
Office expenses 29,600 (all indirect)
1. Prepare a departmental income statement for 2019.
2. & 3. Prepare a departmental contribution to overhead report for 2019. Based on these two performance reports, should Jansen eliminate the ski department?
Answer:
1.
Jansen Company
Departmental Income Statement—Ski Department
For Year Ended 2019
Sales 610,000
Less : Cost of goods sold 435,000
Gross profit 175,000
Less; Expenses
Salaries 113,000
Utilities 15,600
Depreciation 54,400
Office expenses 29,600 212,600
Operating loss $37,600
2.
Jansen Company
Departmental Income Statement—Ski Department
For Year Ended 2019
Sales 610,000
Less : Cost of goods sold 435,000
Gross profit 175,000
Less; Direct Expenses
Salaries 88,000 (113,000 - 25,000)
Utilities 9,900 (15,600 - 5,700)
Depreciation 37,000 (54,400 - 17,400)
Total Direct Expenses 134,900
Contribution to overhead $40,100
They should not eliminate the Ski Department because it would contribute $40,100 to overhead.
All of the following are employer payroll taxes except: Multiple Choice Social Security tax equal to that withheld from employees. Medicare tax equal to that withheld from employees. State unemployment tax. Federal unemployment tax. Federal income tax equal to that withheld from employees.
Answer: Federal income tax equal to that withheld from employees.
Explanation:
Federal Income Tax equal is a withholding Tax that the employer takes from an Employee's salary and pays it directly to the Government in form of income taxes.
It will therefore count towards the Income Taxes that the person is to pay during the year.
This is an Employee Payroll Tax because it comes from the Employees's salary.
The market supply curve is: perfectly inelastic in the long run, but not the short run. more elastic in the long run than in the short run. less elastic in the long run than in the short run. perfectly elastic in the short run, but not the long run.
Answer:
The answer is B. more elastic in the long run than in the short run
Explanation:
Supply is usually more elastic in the long run than in the short run because it is a known fact factors of production(labor, capital etc.) can be utilised to increase supply in the long run whereas in the short run only labor can be increased.
And also, because because there is time for firms to enter or leave the industry.
Tyrell Co. entered into the following transactions involving short-term liabilities. Year 1 Apr. 20 Purchased $36,500 of merchandise on credit from Locust, terms n/30. May 19 Replaced the April 20 account payable to Locust with a 90-day, 7%, $35,000 note payable along with paying $1,500 in cash. July 8 Borrowed $66,000 cash from NBR Bank by signing a 120-day, 11%, $66,000 note payable. __?__ Paid the amount due on the note to Locust at the maturity date. __?__ Paid the amount due on the note to NBR Bank at the maturity date. Nov. 28 Borrowed $36,000 cash from Fargo Bank by signing a 60-day, 9%, $36,000 note payable. Dec. 31 Recorded an adjusting entry for accrued interest on the note to Fargo Bank. Year 2 __?__ Paid the amount due on the note to Fargo Bank at the maturity date.
Answer:
April 20, purchased $30,500 of merchandise on credit from Locust, terms n/30. Tyrell uses the perpetual inventory system.
Dr Merchandise inventory 36,500
Cr Accounts payable 36,500
May 19, replaced the April 20 account payable to Locust with a 90-day, $35,000 note bearing 7% annual interest along with paying $1,500 in cash.
Dr Accounts payable 38,000
Cr Cash 1,500
Cr Notes payable 35,000
July 8, borrowed $66,000 cash from NBR Bank by signing a 120-day, 11% interest-bearing note with a face value of $66,000.
Dr Cash 66,000
Cr Notes payable 66,000
August 17, paid the note to Locust with interest ($35,000 x 7% x 90/365)
Dr Notes payable 35,000
Dr Interest expense 604.11
Cr Cash 35,604.11
November 5, paid the note to NBR Bank with interest ($66,000 x 11% x 120/365)
Dr Notes payable 66,000
Dr Interest expense 2,386.85
Cr Cash 68,386.85
November 28, borrowed $36,000 cash from Fargo Bank by signing a 60-day, 9%, $36,000 note payable.
Dr Cash 36,000
Cr Notes payable 36,000
December 31, recorded an adjusting entry for accrued interest on the note to Fargo Bank ($36,000 x 9% x 33/365 days)
Dr Interest expense 292.93
Cr Interest payable 292.93
January 27, Year 2, paid the amount due on the note to Fargo Bank at the maturity date.
Dr Notes payable 36,000
Dr Interest payable 292.93
Dr Interest expense 239.67
Cr Cash 36,532.60