Consider the Great Woman who is stuck on an island in the Pacific Ocean. The open markets on the island provide many goods that the Great Woman can purchase, such as beef and coconut water. Suppose that the Great Woman’s preferences are such that coconut water is a neuter good and beef is an economic good. Draw the Great Woman’s indifference mapping for beef and coconut water. Place coconut water on the horizontal axis and beef on the vertical axis.
Answers
Answer:
attached below is the indifference curve
Explanation:
The indifference map attached shows the Great woman's preference for coconut water as a neuter good and beef as an economic good
as per instruction given in the question the Y axis represents the preference for beef, since coconut being a neuter good, the indifference curve will be a straight line .
note : movement along the y axis is in the upward direction.
Related Questions
All of the following are potential exchanges between the fan and the event EXCEPT
Ticket purchases
Purchase of ancillary products
Purchase of sponsor products
Referrals
Answers
Answer:
Purchase of sponsor products
Explanation:
Which pathway includes the most self-employed workers?
Banking Services
Insurance Services
Financial and Investment Planning
Business Financial Management
Answers
Answer:
The Answer is B
Explanation:
Im sure its B
1. $7,000 of merchandise inventory was ordered on September 2, 20092. $3,000 of this merchandise was received on September 5, 20093. On September 6, 2009, an invoice dated September 4, 2009, with terms of 3/10, net 30 for $3,250 which included a $250 prepaid freight cost, was received.4. On September 10, 2009, $800 of the merchandise was returned to the seller.Based on the above information, what would be recorded as the cash payment if the invoice is paid within the discount period
Answers
Answer:
The cash payment to be recorded is:
= $2,376.50.
Explanation:
a) Data and Calculations:
September 2, 2009: Merchandise order = $7,000
September 5, 2009: Merchandise received = $3,000
September 6, 2009: Freight-in 250
Terms of trade 3/10, net 30
September 10, 2009: Return of merchandise (800)
Total value of merchandise = $2,450
Cash discount (3% of $2,450) = 73.50
Cash payment = $2,376.50
b) The trade terms of 3/10, net 30 means that a discount of 3% is allowed when payment is made within 10 days of the purchase date or on or before September 11, 2009. This amounts to $73.50. Therefore, the net amount to be paid is $2,376.50 after deducting the calculated discount amount.
Jallouk Corporation has two different bonds currently outstanding. Bond M has a face value of $30,000 and matures in 20 years. The bond makes no payments for the first six years, then pays $2,400 every six months over the subsequent eight years, and finally pays $2,700 every six months over the last six years. Bond N also has a face value of $30,000 and a maturity of 20 years; it makes no coupon payments over the life of the bond. The required return on both these bonds is 6% compounded semi-annually. What are the current price of bond M and bond N?
Answers
Answer:
um
Explanation:
Discount loan. Up-Front Bank uses discount loans for all its customers who want one-year loans. Currently, the bank is providing one-year discount loans at . What is the effective annual rate on these loans? If you were required to repay at the end of the loan for one year, how much would the bank have given you at the start of the loan? If you were required to repay $ at the end of the loan for one year, how much would the bank have given you at the start of the loan?
Answers
Complete Question:
Discount loan. Up-Front Bank uses discount loans for all its customers who want one-year loans. Currently, the bank is providing one-year discount loans at 7.9%. What is the effective annual rate on these loans? If you were required to repay $205,000 at the end of the loan for one year, how much would the bank have given you at the start of the loan? If you were required to repay $205,000 at the end of the loan for one year, how much would the bank have given you at the start of the loan? $Џ (Round to the nearest dollar.)
Answer:
Up-Front Bank
a. The effective annual rate on these loans = 8.58%
b. The amount would have given $188,805.
Explanation:
a) Data and Calculations:
Discount on loans = 7.9%
Effective annual rate on the loans = 7.9%/(100% - 7.9%)
= 7.9%/92.1%
= 0.0858
= 8.58%
b) Amount to be repaid to the bank = $205,000
Amount given after the discount is deducted = $205,000 * 0.921
= $188,805
Amount deducted as interest = $16,195 ($205,000 * 7.9%)
Check:
Effective interest rate = $16,195/$188,805 * 100 = 8.58%
c) Up-Front Bank's discount loan does not require the payment of interest or any other charges. Instead, these are deducted upfront from the face amount of the loan before it is given out. The implication is that the receiver of the loan receives less than the face value. In determining the effective interest rate, the discount amount is divided by the actual loan amount received, multiplied by 100.
If your apartment catches on fire and you have renters insurance, the insurance company will likely pay all of these EXCEPT...
A) The cost of replacing damaged sections of the roof and any broken windows
B) The cost of replacing any items inside the apartment that completely burned in the fire
C) The cost of replacing items ruined by water as firefighters put out the fire
D) The cost of your hotel room for a week while your apartment is cleaned up
Answers
Answer:
d
Explanation:
because its not really their job to find u a temporary place to live while they get ur apartment fixed
If your apartment catches on fire and you have renters insurance, the insurance company will likely pay all of these EXCEPT The cost of your hotel room for a week while your apartment is cleaned up. Thus the correct option is D.
What is Insurance?A contract in which an individual or organization pays a premium to an insurance firm in exchange for protection against future financial losses is termed Insurance.
A type of insurance named Renters insurance is designed to protect renters from economic harm that may occur as a result of either harm to their personal belongings or liability for harm or injury they have caused to others.
Renters' insurance is often less expensive than other types of insurance, and it is frequently required by renters as an integral part of renting a property. It can give tenants peace of mind as well as financial security.
Therefore, option D is appropriate.
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3. Assume that the Appliance Division is operating at 75 percent capacity. The Manufactured Housing Division is currently buying 4,000 dishwashers from an outside supplier for $290 each. Assume that any joint benefit will be split evenly between the two divisions. What is the expected transfer price
Answers
This question is incomplete, the complete question is;
Transfer Pricing: Various Computations
Corning Company has a decentralized organization with a divisional structure. Two of these divisions are the Appliance Division and the Manufactured Housing Division. Each divisional manager is evaluated on the basis of ROI.
The Appliance Division produces a small automatic dishwasher that the Manufactured Housing Division can use in one of its models. Appliance can produce up to 20,000 of these dishwashers per year. The variable costs of manufacturing the dishwashers are $98.The Manufactured Housing Division inserts the dishwasher into the model house and then sells the manufactured house to outside customers for $73,000 each. The division's capacity is 4,000 units. The variable costs of the manufactured house (in addition to the cost of the dishwasher itself) are $42,600.
Required:
Assume each part is independent, unless otherwise indicated.
1) Assume that all of the dishwashers produced can be sold to external customers for $320 each. The Manufactured Housing Division wants to buy 4,000 dishwashers per year. What should the transfer price be?
2) Refer to Requirement 1. Assume $24 of avoidable distribution costs. Identify the maximum and minimum transfer prices.
3) Assume that the Appliance Division is operating at 75 percent capacity. The Manufactured Housing Division is currently buying 4,000 dishwashers from an outside supplier for $290 each. Assume that any joint benefit will be split evenly between the two divisions. What is the expected transfer price?
Answer:
a) The transfer price TP is the market ( $ 320 )
b)
- minimum transfer price : $ 296
- maximum transfer price : $ 320
c) the expected transfer price is $ 194
Explanation:
Given the data in the question;
a) What should the transfer price be?
The transfer price TP is the market ( $ 320 ) as all the dishwashers produced will be sold to the external customers for $ 320 .
b) Identify the maximum and minimum transfer prices?
Refer to question 1 above and assuming $24 of avoidable distribution costs.
the maximum and minimum transfer prices will be;
- minimum transfer price : $ 320 - $ 24 = $ 296
- maximum transfer price : $ 320
c) What is the expected transfer price?
given that; the variable costs of manufacturing the dishwashers are $98.
The Manufactured Housing Division is currently buying 4,000 dishwashers from an outside supplier for $290 each.
so potential gain = $290 - $98
= $ 192
thus, share of gain of each division will be;
⇒ $ 192 / 2 = $ 96
so the transfer price will be;
⇒ $ 98 + $ 96
= $ 194
Therefore, the expected transfer price is $ 194
On June 30, 2017, Wisconsin, Inc., issued $200,200 in debt and 19,300 new shares of its $10 par value stock to Badger Company owners in exchange for all of the outstanding shares of that company. Wisconsin shares had a fair value of $40 per share. Prior to the combination, the financial statements for Wisconsin and Badger for the six-month period ending June 30, 2017, were as follows:
Wisconsin Badger
Revenues $(1,050,000) $-402,000
Expenses 732,000 293,000
Net income $(318,000) $-109,000
Retained earnings, 1/1 $(810,000) $-223,000
Net income (318,000) -109,000
Dividends declared 103,000 0
Retained earnings, 6/30 $(1,025,000) $-332,000
Cash $72,000 $86,000
Receivables and inventory 460,000 252,000
Patented technology (net) 928,000 328,000
Equipment (net) 726,000 648,000
Total assets $2,186,000 $1,314,000
Liabilities $(531,000) $-512,000
Common stock (360,000) -200,000
Additional paid-in capital (270,000) -270,000
Retained earnings (1,025,000) -332,000
Total liabilities and equities $(2,186,000) $-1,314,000
Wisconsin also paid $36,200 to a broker for arranging the transaction. In addition, Wisconsin paid $47,800 in stock issuance costs. Badger’s equipment was actually worth $780,000, but its patented technology was valued at only $299,200. What are the consolidated balances for the following accounts?
Net Income 281,800
Retained Earnings 1/1/15 810,000
Patented Technology 1,227,200
Goodwill
Liabilities 1,243,200
Common Stock 553,000
Additional Paid-In Capital 801,200
Answers
Answer:
Wisconsin, Inc.
The consolidated balances for the following accounts are:
Net Income $427,000
Retained Earnings $1,134,000
Patented Technology $1,227,200
Goodwill ($511,800)
Liabilities $1,243,200
Common Stock $553,000
Additional Paid-In Capital $270,000
Explanation:
a) Data and Calculations:
Wisconsin Badger
Revenues $(1,050,000) $-402,000
Expenses 732,000 293,000
Net income $(318,000) $-109,000
Retained earnings, 1/1 $(810,000) $-223,000
Net income (318,000) -109,000
Dividends declared 103,000 0
Retained earnings, 6/30 $(1,025,000) $-332,000
Cash $72,000 $86,000
Receivables and inventory 460,000 252,000
Patented technology (net) 928,000 328,000
Equipment (net) 726,000 648,000
Total assets $2,186,000 $1,314,000
Liabilities $(531,000) $-512,000
Common stock (360,000) -200,000
Additional paid-in capital (270,000) -270,000
Retained earnings (1,025,000) -332,000
Total liabilities and equities $(2,186,000) $-1,314,000
Goodwill = Purchase price Minus (Fair value of assets Less Liabilities)
Purchase price:
Debt = $200,200
Stock = 193,000
Total $393,200
Fair value of assets:
Cash $86,000
Accounts receivable 252,000
Equipment 780,000
Patented technology 299,200
Assets fair value $1,417,200
Liabilities $512,000
Net assets $905,000
Net Income = $427,000 ($318,000 + $109,000)
Retained Earnings = $1,134,000 ($1,025,000 + 109,000)
Patented technology = $1,227,200 ($928,000 + 299,200)
Negative goodwill = $511,800 ($393,200 - $905,000)
Liabilities = $1,243,200 ($531,000 + 512,000 + 200,200)
Common Stock = $553,000 ($360,000 + 193,000)
Additional Paid-in Capital = $270,000
The financial statements for Wisconsin and Badger for the six-month period ending June 30, 2017:
a) Data and Calculations:
Wisconsin Badger
Revenues $(1,050,000) $-402,000
Expenses 732,000 293,000
Net income $(318,000) $-109,000
Retained earnings, 1/1 $(810,000) $-223,000
Net income (318,000) -109,000
Dividends declared 103,000 0
Retained earnings, 6/30 $(1,025,000) $-332,000
Cash $72,000 $86,000
Receivables and inventory 460,000 252,000
Patented technology (net) 928,000 328,000
Equipment (net) 726,000 648,000
Total assets $2,186,000 $1,314,000
Liabilities $(531,000) $-512,000
Common stock (360,000) -200,000
Additional paid-in capital (270,000) -270,000
Retained earnings (1,025,000) -332,000
Total liabilities and equities $(2,186,000) $-1,314,000
Working notes:
The consolidated balances for the following accounts are:
Net Income $427,000 Retained Earnings $1,134,000 Patented Technology $1,227,200 Goodwill ($511,800) Liabilities $1,243,200 Common Stock $553,000 Additional Paid-In Capital $270,000Goodwill = Purchase price Minus (Fair value of assets Less Liabilities)
Purchase price:
Debt = $200,200 Stock = 193,000 Total = $393,200Fair value of assets:
Cash $86,000 Accounts receivable 252,000 Equipment 780,000 Patented technology 299,200 Assets fair value $1,417,200 Liabilities $512,000Net assets $905,000
Net Income = $427,000 ($318,000 + $109,000) Retained Earnings = $1,134,000 ($1,025,000 + 109,000) Patented technology = $1,227,200 ($928,000 + 299,200) Negative goodwill = $511,800 ($393,200 - $905,000) Liabilities = $1,243,200 ($531,000 + 512,000 + 200,200) Common Stock = $553,000 ($360,000 + 193,000) Additional Paid-in Capital = $270,000Know more :
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Which statement best conveys the bad news of the refusal?
a.We were able to save valuable resources that otherwise might have been spent on keeping out-of-warranty gear in working order and on missing peripherals such as monitors, keyboards, and mice.
b.To ensure compatibility, proper software licensing, and the same useful life of the equipment, we decided to accept only new and complete systems.
c.We regret to inform you that we cannot accept your used computing equipment as much as we appreciate your offer.
Answers
Answer: B
Explanation:proof
On January 1, 2021, Casey Corporation exchanged $3,194,000 cash for 100 percent of the outstanding voting stock of Kennedy Corporation. Casey plans to maintain Kennedy as a wholly owned subsidiary with separate legal status and accounting information systems. At the acquisition date, Casey prepared the following fair-value allocation schedule:
Fair value of Kennedy (consideration transferred) $3,194,000
Carrying amount acquired 2,600,000
Excess fair value $650,000
to buildings (undervalued) $342,000
to licensing agreements (overvalued) (160,000) 182,000
to goodwill (indefinite life) $468,000
Immediately after closing the transaction, Casey and Kennedy prepared the following postacquisition balance sheets from their separate financial records (credit balances in parentheses).
Accounts Casey Kennedy
Cash $500,000 $176,250
Accounts receivable 1,410,000 345,000
Inventory 1,585,000 375,750
Investment in Kennedy 3,250,000 0
Buildings (net) 5,722,500 1,990,000
Licensing agreements 0 3,070,000
Goodwill 693,500 0
Total assets $13,161,000 $5,957,000
Accounts payable $(391,000) $(377,000)
Long-term debt (3,770,000) (2,980,000)
Common stock (3,000,000) (1,000,000)
Additional paid-in capital 0 (500,000)
Retained earnings (6,000,000) (1,100,000)
Total liabilities and equities $(13,161,000) $(5,957,000)
Required:
Prepare an acquisition-date consolidated balance sheet for Casey Corporation and its subsidiary Kennedy Corporation.
Answers
Question Completion Basis:
On January 1, 2021, Casey Corporation exchanged $3,250,000 cash for 100 percent of the outstanding... "and not $3,194,000".
Answer:
Cassey Corporation
Post Acquisition Balance Sheets
(credit balances in parentheses)
Accounts Casey Kennedy Consolidated
Cash $500,000 $176,250 $676,250
Accounts receivable 1,410,000 345,000 1,755,000
Inventory 1,585,000 375,750 1,960,750
Investment in Kennedy 3,250,000 0 0
Buildings (net) 5,722,500 2,332,000 8,054,500
Licensing agreements 0 2,888,000 2,888,000
Goodwill 693,500 0 1,183,500
Total assets $13,161,000 $6,117,000 $16,518,000
Accounts payable $(391,000) $(377,000) (768,000)
Long-term debt (3,770,000) (2,980,000) (6,750,000)
Common stock (3,000,000) (1,000,000) (3,000,000)
Additional paid-in capital 0 (500,000)
Retained earnings (6,000,000) (1,100,000) (6,000,000)
Total liabilities and equities $(13,161,000) $(5,957,000) $16,518,000
Explanation:
a) Data and Calculations:
Fair-value allocation schedule:
Fair value of Kennedy (consideration transferred) $3,250,000
Carrying amount acquired 2,600,000
Excess fair value 650,000
to buildings (undervalued) $342,000
to licensing agreements (overvalued) (160,000) 160,000
to goodwill (indefinite life) $468,000
Post Acquisition Balance Sheets
(credit balances in parentheses)
Accounts Casey Kennedy
Cash $500,000 $176,250
Accounts receivable 1,410,000 345,000
Inventory 1,585,000 375,750
Investment in Kennedy 3,250,000 0
Buildings (net) 5,722,500 1,990,000
Licensing agreements 0 3,070,000
Goodwill 693,500 0
Total assets $13,161,000 $5,957,000
Accounts payable $(391,000) $(377,000)
Long-term debt (3,770,000) (2,980,000)
Common stock (3,000,000) (1,000,000)
Additional paid-in capital 0 (500,000)
Retained earnings (6,000,000) (1,100,000)
Total liabilities and equities $(13,161,000) $(5,957,000)
b) The reframing of the question somehow complicated its workings and the solution provided here.
Straight-Line Depreciation A building acquired at the beginning of the year at a cost of $2,200,000 has an estimated residual value of $400,000 and an estimated useful life of 20 years. Determine the following: (a) The depreciable cost $fill in the blank 1 (b) The straight-line rate fill in the blank 2 % (c) The annual straight-line depreciation $fill in the blank 3
Answers
Answer:
a)
Depreciable Cost = $ 1800000
b)
Straight Line Depreciation Rate = 5%
c)
Depreciation expense per year = $90000
Explanation:
a)
The depreciable cost is the cost that qualifies for depreciation. It is calculated as,
Depreciable Cost = Cost - Salvage Value
Depreciable Cost = 2200000 - 400000
Depreciable Cost = $ 1800000
b)
The straight line depreciation method charges a constant depreciation expense every period. The rate of straight line depreciation can be calculated as follows,
Straight Line Depreciation Rate = Depreciable cost percentage / Estimated useful life
Straight Line Depreciation Rate = 100% / 20
Straight Line Depreciation Rate = 5%
c)
The annual straight line depreciation expense can be calculated as follows,
Depreciation expense per year = Depreciable cost * Straight line depreciation rate
Depreciation expense per year = 1800000 * 0.05
Depreciation expense per year = $90000
The Consumer Electronics Show (CES) reports that the HP Spectre laptop computer starts at $994.00 for a base configuration. The model displayed at its recent show costs $1,353, $118 more than the comparable 13-inch Apple MacBook Air. If Computers-R-Us buys the HP Spectre at the show with 3/15, net 30 terms on August 26, how much does it need to pay on September 9
Answers
Answer: $1312.41
Explanation:
The following information can be depicted from the question:
Cost of HP Spectre laptop = $1353
Credit terms = 3/15, net 30
Therefore, since discount allowed is 3%, the complement of the discount rate will be:
= 100% - 3%
= 97%
Therefore, amount needed to pay will be:
= Listed price × Complement of discounts rate
= $1353 × 97%
= $1353 × 0.97
= $1312.41
Therefore, the amount needed to pay is $1312.41
On December 31, Caper, Inc., issued $250,000 of eight percent, ten-year bonds for $218,844, yielding an effective interest rate of ten percent. Semiannual interest is payable on June 30 and December 31 each year. The firm uses the effective interest method to amortize the discount.
Required
Prepare an amortization schedule showing the necessary information for the first two interest periods.
Answers
Answer:
Capter, Inc.
Amortization Schedule
Date Payment Interest Expense Amortization Net Book Value
Dec. 31 $218,844
June 30 $10,000 $10,942 $942 219,786
Dec. 31 10,000 10,989 989 220,775
Explanation:
a) Data and Calculations:
Face value of bonds = $250,000
Bonds proceeds = 218,844
Bonds discounts = $31,156
Coupon rate = 8% with semiannual payments
Effective interest rate = 10%
On June 30:
Interest payment = $10,000 ($250,000 * 4%)
Interest Expense = $10,942 ($218,844 * 5%)
Amortization of discount = $942
Value of bonds = $219,786 ($218,844 + 942)
On December 31:
Interest payment = $10,000 ($250,000 * 4%)
Interest Expense = $10,989 ($219,786 * 5%)
Amortization of discount = $989
Value of bonds = $220,775 ($219,786 + 989)
Blues Inc. manufactures jeans in the cutting and sewing process. Jeans are manufactured in 40-jean batch sizes. The cutting time is 5 minutes per jean. The sewing time is 20 minutes per jean. It takes 2 minutes to move a batch of jeans from cutting to sewing. a. Compute the value-added, non-value-added, and total lead time of this process. Value-added lead time fill in the blank 1 minutes Non-value-added lead time fill in the blank 2 minutes Total lead time fill in the blank 3 minutes b. Compute the value-added ratio. Round to one decimal place.
Answers
Answer:
a. Value added time = Cutting time + Sewing time
Value added time = 5 minutes + 20 minutes
Value added time = 25 minutes
Non-value added time = Total within batch wait time + Move time
Non-value added time = [25 minutes * (40 - 1) + 2 minutes
Non-value added time = 977 minutes
Total lead time = Value added time + Non-value added time
Total lead time = 25 minutes + 977 minutes
Total lead time = 1,002 minutes
b. Value added ratio = Value added time / Total lead time
Value added ratio = 25 minutes / 1,002 minutes
Value added ratio = 0.02495
Value added ratio = 2.5%
How do the McDonald brothers propose to control the involvement Ray Kroc would have in their business?
Answers
Penny is paid a gross wage of $2,648.00 on a monthly basis. She is single and is entitled to 2 withholding allowances. How much income tax, social security, and Medicare will be withheld based on the combined wage bracket tables in Exhibits 9-3 and 9-4 from your text
Answers
Answer:
The combined wage bracket tables in Exhibits 9-3 and 9-4 is missing hence I will use 2014 tax year
answer :
a) Federal income tax withheld
= 75.6 + ( 1989.60 - 944 )*15% = $232.44
b) social security
6% * 1989.6 = $119.38
c) Medicare
1.45% * 1989.6 = $28.85
Explanation:
For a single individual
Two withholding allowance = $329.20 * 2 = $658.40
Gross Pay = $2648
withholding allowance = $658.40
Subject to withholding = $2648 - $658.40 = $1989.60
a) Federal income tax withheld
= 75.6 + ( 1989.60 - 944 )*15% = $232.44
b) social security
6% * 1989.6 = $119.38
c) Medicare
1.45% * 1989.6 = $28.85
l Englehard purchases a slurry-based separator for the mining of clay that costs $700,000 and has an estimated useful life of 10 years, a MACRS-GDS property class of 7 years, and an estimated salvage value after 10 years of $75,000. It was fi nanced using a $200,000 down payment and a loan of $500,000 over a period of 5 years with interest at 10%. Loan payments are made in equal annual amounts (principal plus interest) over the 5 years. a. What is the amount of the MACRS-GDS depreciation taken in the 3rd year
Answers
Answer:
The amount of the MACRS-GDS depreciation taken in the 3rd year is $122,430.
Explanation:
The amount of the MACRS-GDS depreciation taken in the 3rd year can be calculated as follows:
Cost of the slurry-based separator = $700,000
Third year depreciation rate for a MACRS-GDS property class of 7 years from the MACRS-GDS table = 17.49%
MACRS-GDS depreciation in the 3rd year = $700,000 * 17.49% = $122,430
Therefore, The amount of the MACRS-GDS depreciation taken in the 3rd year is $122,430.
The following information pertains to Carla Vista Company.
1. Cash balance per bank, July 31, $7,738.
2. July bank service charge not recorded by the depositor $48.
3. Cash balance per books, July 31, $7,774.
4. Deposits in transit, July 31, $3,110.
5. $2,426 collected for Carla Vista Company in July by the bank through electronic funds transfer. The collection has not been recorded by Carla Vista Company.
6. Outstanding checks, July 31, $696.
Required:
Prepare a bank reconciliation.
Answers
Income statement data for Huffman Pharmaceuticals are provided below. Income Statements 12/31/201712/31/2016 Sales Revenue$598,000$724,000 Cost of Goods Sold337,000427,000 Gross Profit261,000297,000 Operating Expenses137,000146,000 Operating Income124,000151,000 Other Income (Expense)60,00023,000 Income before Tax184,000174,000 Income Tax Expense71,00076,000 Net Income$113,000$98,000 Using trend analysis, what percentage should be assigned to Gross Profit
Answers
Answer:
Huffman Pharmaceuticals
The percentage that should be assigned to Gross Profit, using trend analysis, is:
= 42%.
Explanation:
a) Data and Calculations:
Income Statements 12/31/2017 12/31/2016
Sales Revenue $598,000 $724,000
Cost of Goods Sold 337,000 427,000
Gross Profit 261,000 297,000
Operating Expenses 137,000 146,000
Operating Income 124,000 151,000
Other Income (Expense) 60,000 23,000
Income before Tax 184,000 174,000
Income Tax Expense 71,000 76,000
Net Income $113,000 $98,000
Income Statements 12/31/2017 12/31/2016
Sales Revenue $598,000 $724,000
Cost of Goods Sold 337,000 427,000
Gross Profit 261,000 297,000
Ratio of Gross profit to
Sales Revenue
2017 = $261,000/$598,000 * 100 = 43.65% = 44%
2016 = $297,000/$724,000 * 100 = 41%
Average Gross profit ratio for the two years = 42.5% (44 + 41)/2.
b) Huffman's trend analysis is the use of its past financial performance indices to predict its future financial performances. Past performances are expressed in percentages, forming the basis for predicting and comparing future performances of an entity.
In 2021, due to a change in marketing forecasts, Barney Corporation reduced the projected life of its patent for producing round dice. The cumulative patent amortization prior to 2021 would have been $18 million higher had the new life been used. Barney's tax rate is 25%. Barney's retained earnings as of December 31, 2021, would be:
Answers
Answer: unaffected
Explanation:
We should note that a retrospective adjustment isn't necessarily needed when there's an alternation to a accounting estimate.
With regards to this Barney's retained earnings as of December 31, 2021, would neither be understated or overstated but would be unaffected.
Florida Seaside Oil Exploration Company is deciding whether to drill for oil off the northeast coast of Florida. The company estimates that the project would cost $4.24 million today. The firm estimates that once drilled, the oil will generate positive cash flows of $2.12 million a year at the end of each of the next four years. While the company is fairly confident about its cash flow forecast, it recognizes that if it waits two years, it would have more information about the local geology as well as the price of oil. Florida Seaside estimates that if it waits two years, the project would cost $4.59 million. Moreover, if it waits two years, there is a 85% chance that the cash flows would be $2.306 million a year for four years, and there is a 15% chance that the cash flows will be $0.705 million a year for four years. Assume that all cash flows are discounted at a 8% WACC. Will the company delay the project and wait until they have more information
Answers
Answer:
The company will invest now and not delay
Explanation:
In order to determine the better option, we have to determine the Net present value of each of the option.
Net present value is the present value of after-tax cash flows from an investment less the amount invested.
NPV can be calculated using a financial calculator
The option with the higher NPV would be chosen
First option
Cash flow in year 0 = $-4.24 million
Cash flow in year 1 = $2.12 million
Cash flow in year 2 = $2.12 million
Cash flow in year 3 = $2.12 million
Cash flow in year 4 = $2.12 million
I = 8%
NPV = 2.78 million
Second option
NPV of the cash flow with $2.306 million a year for four years
Cash flow in year 0 = 0
Cash flow in year 1 = 0
Cash flow in year 2 = $-4.59 million.
Cash flow in year 3 = $2.306
Cash flow in year 4 = $2.306 million
Cash flow in year 5 = $2.306 million
Cash flow in year 6 = $2.306 million
I = 8
NPV = $2.61 million
NPV when cash flows would be $0.705 million
Cash flow in year 0 = 0
Cash flow in year 1 = 0
Cash flow in year 2 = $-4.59 million.
Cash flow in year 3 = $0.705 million
Cash flow in year 4 = $0.705 million
Cash flow in year 5 = $0.705 million
Cash flow in year 6 = $0.705 million
I = 8 %
NPV = -1.93 million
NPV of the second option = (0.85 x $2.61 million) + (0.15 x 0) = $2.22 million
The NPV when cash flows would be $0.705 million is zero because the NPV is negative and thus would not be undertaken.
The company will invest now and not delay because the NPV of not waiting is greater than the NPV of delaying
To find the NPV using a financial calculator:
1. Input the cash flow values by pressing the CF button. After inputting the value, press enter and the arrow facing a downward direction.
2. after inputting all the cash flows, press the NPV button, input the value for I, press enter and the arrow facing a downward direction.
3. Press compute
Exercise 07-7 Manufacturing: Direct labor and factory overhead budgets LO P1 Addison Co. budgets production of 2,850 units during the second quarter. Other information is as follows: Direct labor Each finished unit requires 6 direct labor hours, at a cost of $9 per hour. Variable overhead Applied at the rate of $11 per direct labor hour. Fixed overhead Budgeted at $640,000 per quarter. 1. Prepare a direct labor budget. 2. Prepare a factory overhead budget.
Answers
Answer:
See below
Explanation:
1. Total Direct labor
Addison Co.
Direct labor budget for second quarter
Budgeted production units 2,850
Direct labor hour per one unit 6
Total direct labor hours needed 17,100
Cost per one direct labor $9
Total direct labor $153,900
2. Total factory overhead budget
Addison Co. Factory overhead for second quarter
Total direct labor hours needed 17,100
Variable rate per direct labor hour $11
Budgeted variable overhead $188,100
Budgeted fixed overhead $640,000
Total factory overhead $828,100
Leto Company manufactures a certain type of alloy. The alloy undergoes a hardening process. The hardening unit is operating at full capacity and is a production constraint. The unit contribution margin and the number of hours of hardening treatment used by the alloy are as follows: Unit selling price$96.80 Unit variable cost(23.50) Unit contribution margin$73.30 Hardening treatment hours per unit5 hrs. Assuming Leto produces 2,300 units of the alloy, calculate the unit contribution margin per production constraint hour.
Answers
Answer:
Leto Company
The unit contribution margin per production constraint hour is:
= $0.00637.
Explanation:
a) Data and Calculations:
Unit selling price = $96.80
Unit variable cost = (23.50)
Unit contribution margin = $73.30
Hardening treatment hours per unit = 5 hours
Units of alloy produced = 2,300
Total hours spent on hardening treatment = 11,500 (5 * 2,300)
Contribution margin per production constraint hour = Unit contribution margin/Total hours spent on hardening treatment
= $0.00637 ($73.30/11,500)
b) The unit contribution margin per production constraint hour shows the contribution margin that is made per unit of the production constraint. The production constraint is the limited input resources that are available for production. It is a product of the units of the alloy that Leto produces and the number of hours required to produce one unit.
Money serves three functions in the economy: medium of exchange, unit of account, and store of value. Which of the following statements describes how inflation affects the ability of money to serve as a unit of account? Check all that apply. Inflation causes menu costs. Inflation erodes money's purchasing power. In some countries with hyperinflation, prices are posted in terms of U.S. dollars rather than the local currency, even though the local currency is still used to purchase the good.
Answers
Answer:
Inflation causes menu costs.
In some countries with hyperinflation, prices are posted in terms of U.S. dollars rather than the local currency, even though the local currency is still used to purchase the good.
Explanation:
The inflation that cause menu cost and the hyperinflation would be treated as a unit of account because for menu cost, the seller have to change the cost because of changing in the price
On the other hand, because of the difference in the currencies, inflation would create a problem for measuring the currency units
And, the left one would be represent the store of value as the value of the money would be decrease when the inflation rate is increased
Money has three functions unit if accounts, storm of values and a medium of exchange. Modern economies use flat money that is not a community nor backed by the economy.
The inflation depicts the rise in procs and services and is a reason of the produces of goods and services in the economy. Inflation affects money by reducing the purchasing power of clients.Hence the option B is correct.
Learn more about the serves three functions in the economy: medium of exchange.
brainly.com/question/22615742.
Given the description of the firm below, decide whether it applies to monopolistic competition, perfect competition, or both.
a. a firm that produces with excess capacity in the long run
b. a firm that has market power
c. a firm that sets greater than marginal
d. a firm that earns zero economic profit in the long
Answers
Answer:
Perfect Competition
d. a firm that earns zero economic profit in the long
In the long run, firms will keep entering and exiting the market in a perfect competition such that there will be no economic profit to be gained.
Monopolistic Competition
a. a firm that produces with excess capacity in the long run
b. a firm that has market power
c. a firm that sets price greater than marginal cost.
Monopolistic competition has excess capacity in the long run because their prices are set at a higher level than the marginal revenue. They are therefore producing more goods than they are selling leading to excess capacity.
Monopolistic competition has some form of market power as well because they get to set their own prices.
art of the screening process when choosing which markets to expand to involves gathering information on local markets. One way to gain information is by participating in trade fairs and trade missions. However, companies will often need additional information on markets that require further research. Collecting primary data in foreign markets can present some challenges in researchers especially because of cultural and technical differences between the markets. Identify whether each statement about the research process is most likely associated with cultural differences between markets or technical differences. 1. A number of languages may be spoken in a country and even in countries where only one language is used, a word's meaning can change from one region to the next.
Answers
Answer:
1. Cultural differences between markets.
Explanation:
There are many language across the world. There are even many languages spoken in a single country. People living in one region will speak different language than those who live in other nearby region of the same country. The meanings of many words also changes in different languages. The word of English language have some meaning and same words may have different meaning in other languages.
In 2020 Ryce contributes non depreciable property with an adjusted basis of $101,600 and a fair market value of $152,400 to the Montgomery Partnership in exchange for a one-half interest in profits and capital. In the next tax year, when the property's fair market value is $162,560, the partnership distributes the property to Jarvis, the other one-half partner. Jarvis's basis in the partnership interest was $162,560 immediately before the distribution. Which partner must recognize the built-in gain, what is the amount recognized, and what is the effect on that partner's basis in the partnership interest
Answers
Answer:
A. Ryce
B.$50,800
C. Increase
Explanation:
Based on the information given the partner that must recognize the builtin gain is RYCE
B. Calculation to determine the amount recognized
Using this formula
Amount recognized=Fair market value-Adjusted basis
Let plug in the formula
Amount recognized=$152,400-$101,600
Amount recognized=$50,800
Therefore the amount recognized is $50,800
C. Based on the information given the effect on that partner's basis in the partnership interest is that the basis amount in the partnership interest would be INCREASED by the amount of gain that was recognized or Realized.
Alamo Power historically allocates IDC for its safety program to generation facilities in Cities A and B based on the number of employees. Last year, $300,000 was distributed and the employee count was 840 in city A and 450 in city B. Implementation of the ABC method took place this year to allocate IDC on the basis of number of accidents. City A reported 345 events and city B had 142 accidents reported.
Determine the allocation based on the number of employees. The allocation based on the number of employees is as follows:
City A:________
City B: _______
Answers
Answer:
Alamo Power
Allocation of IDC cost based on the number of employees:
City A = $195,349
City B = $104,651
Explanation:
a) Data and Calculations:
IDC cost = $300,000
City A City B Total
Employee count 840 450 1,290
Number of accidents 345 142 487
Allocation of IDC cost based on the number of employees:
City A = 840/1,290 * $300,000 = $195,349
City B = 450/1,290 * $300,000 = $104,651
Total cost allocated = $300,000
Allocation of IDC cost based on the number of accidents:
City A = 345/487 * $300,000 = $212,526
City B = 142/487 * $300,000 = $87,474
Nancy Company has a balance of $15,000 in accounts receivable on December 31, of which $1,500 is more than 30 days overdue. The company has a beginning debit balance of $45 in the Allowance for Doubtful Accounts. They estimate the uncollectible accounts to be 1% of current accounts and 10% of accounts over thirty days. The adjusting entry on December 31 will include: A) $285 credit to Allowance for Doubtful Accounts B) $240 debit to Bad Debts Expense C) $195 debit to Bad Debts Expense D) $285 Debit to Allowance for Doubtful Accounts E) $330 credit to Allowance for Doubtful Accounts
Answers
Answer:
E. $330 credit to allowance for doubtful accounts
Explanation:
With regards to the above, the adjusting entry on December 31st is computed as;
= [($15,000 - $1,500)× 0.1)]
= $135
1% of the balance less than 30days
= $1,500 × 0.1 = $150
Total = $45 + $135 + $150 = $330
Economists argue that the pace of economic growth: Determines the size of the population of a nation over the long term. Determines the standard of life of a nation over the long term. Determines the military capability of a nation over the long term. Determines the unemployment rate of a nation over the long term. Determines the environmental health of a nation over the long term.
Answers
Answer: Determines the standard of life of a nation over the long term.
Explanation:
Economists believe that the economic growth of a country determines the standard of living of its people over the long term which is why measures such as GDP per capita exist.
They argue that if the economy is growing, more wealth will be created for citizens to access and the higher production of goods and services will give citizens more choice on what to buy to be able to improve their standard of living.