Answer:
Jan. 15
DR Cash (400,000 * 7) $2,800,000
CR Common Stock (400,000 *1) $400,000
CR Paid - In Capital in excess of Par (2,800,000 - 400,000) $2,400,000
(To record issuance of common stock above par)
Sept. 5
DR Treasury Stock (30,000 * 9) $270,000
CR Cash $270,000
(To record repurchase of Common Stock)
Dec. 6
DR Dividends (0.5 * $1 * 370,000 shares) $185,000
CR Dividends Payable $185,000
(To record dividends issued)
You are given the following information on Parrothead Enterprises: Debt: 9,600 7.1 percent coupon bonds outstanding, with 24 years to maturity and a quoted price of 105.5. These bonds pay interest semiannually and have a par value of $1,000. Common stock: 255,000 shares of common stock selling for $65.10 per share. The stock has a beta of .96 and will pay a dividend of $3.30 next year. The dividend is expected to grow by 5.1 percent per year indefinitely. Preferred stock: 8,600 shares of 4.55 percent preferred stock selling at $94.60 per share. The par value is $100 per share. Market: 11.4 percent expected return, risk-free rate of 3.9 percent, and a 21 percent tax rate. Calculate the company's WACC. (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)
Using the financial data below, prepare a statement of cash flows for the year ended December 31, 2014 for Summer Peebles, Inc. using the indirect method.
Summer Peebles, Inc.
Income Statement
Year Ending December 31, 2014
Sales $1,000.00
Cost of Goods Sold -$650.00
Depreciation Expense -$100.00
Sales and General Expense-$100.00
Interest Expense -$50.00
Income Tax Expense - $40.00
Net Income $60.00
Summer Peebles, Inc.
Balance Sheets as of December 31, 2013 and 2014
Assets 2013 2014
Cash $50.00 $60.00
Accounts Receivable, Net $500.00 $520.00
Inventory $750.00 $770.00
Current Assets $1,300.00 $1,350.00
Fixed Assets, Net $500.00 $550.00
Total Assets $1,800.00 $1,900.00
Liabilities and Equity
Notes Payable to Banks $100.00 $75.00
Accounts Payable $590.00 $615.00
Interest Payable $10.00 $20.00
Current Liabilities $700.00 $710.00
Long-Term Debt $300.00 $350.00
Deferred Income Tax $300.00 $310.00
Capital Stock $400.00 $400.00
Answer:
Summer Peebles, Inc.
Statement of cash flows for the year ended December 31, 2014
Cash Flow From Operating Activities
Net Income before tax and interest $150.00
Adjustment for non-cash items :
Depreciation Expense $100.00
Adjustment for changes in working capital items :
Increase in Accounts Receivable ($20.00)
Increase in Inventory ($20.00)
Decrease in Notes Payable to Banks ($25.00)
Increase in Accounts Payable $25.00
Interest Paid ($10.00 + $50.00 - $20.00) ($40.00)
Income taxes Paid ($300.00 + $40.00 - $310.00) ($30.00)
Net Cash flow from Operating Activities $140.000
Cash Flow From Investing Activities
Purchase of Fixed Assets ($50.00)
Net Cash flow from Investing Activities ($50.00)
Cash Flow From Financing Activities
Long term debt issue $50.00
Net Cash flow from Financing Activities $50.00
Movement During the year $10.00
Cash and Cash Equivalents at Beginning of the year $50.00
Cash and Cash Equivalents at the End of the Year $60.00
Explanation:
Under the Indirect method, Cash flow from Operating Activities is determined by adjusting the Net Profit / Income before tax and interest with non-cash items previously deducted or add to it and any changes in working capital items.
Maria is an investment adviser who is working through investment objectives and risk tolerance with a new client, Bobby. Bobby indicates that he'd like to see some capital appreciation, achieve at least some income, and wants to maintain a relatively high level of safety and principal protection. The BEST recommendation that Maria can make to Bobby is that Bobby invest in
Answer:
The best recommendation that Maria can make to Bobby is that Bobby should invest in Federal Government Bonds and Treasury Bills.
However, it all depends on what his investments priorities and approach are. For a relatively high level of safety and principal protection, Federal Government Bonds and Treasury Bills are the best bet.
Any other investment that will offer some income will be too risky for safety.
Explanation:
Risk appetite determines a person's investment profile. However, it must be clear that higher returns on investment go with higher risks. Every high return investment compensates for the high risks. It is even the riskiest not to invest. Risk should be studied and accepted when it cannot be avoided. We usually say, "you cannot eat your cake and have it."
Angela has an annual contract with Stenbach Service Centre to provide property maintenance services; this includes lawn care, snow removal and parking lot maintenance. Angela spends, on average, 20 hours per week working at the company’s premises and is paid a flat amount monthly. She hires part-time workers, when necessary, to assist her. Angela does not have any other clients.
Angela uses her own small tools; however the company supplies and maintains a riding lawn mower and a snow plow for her use. Her contact at the company is Chris Moore, the Facilities Manager, who meets with her every Monday to discuss the work to be done that week. Chris approves Angela’s monthly invoices and submits them to Accounts Payable.
Does Angela have a contract of service or a contract for service with Stenbach Service Centre As the company’s Payroll Supervisor, explain to Chris the process and factors you used to make your decision.
Answer:
Angela and Stenbach Service Centre
Contract for Service and Contract of Service:
1. Angela has a contract for service.
2. Factors used to decide whether a contract is for service or of service:
a) Employment terms are slightly different from business contract terms.
b) Employees are paid Wages and Salaries, while contractors are paid fees.
c) Employees do not submit monthly invoices for payment, but contractors do.
d) Angela fills tax forms for herself and remits the taxes, so she is self-accounting with respect to her income taxes, unless withholding taxes like Sales taxes. An employee's income tax is deducted from her salary before payment and the company remits the taxes to the IRS.
Explanation:
The agreement between Angela, a self-employed individual, and Stenbach Service Centre is a contract for service. A contract of service is an employment contract between Stenbach Service Centre, the employer, and the Payables Supervisor, an employee, for example. Essentially, Angela can be described as an outsourcer for services vendor or service provider to Stenbach Service Centre, an outsourcer of service company. Angela is engaged for a fee to carry out property maintenance services, including lawn care, snow removal, and parking lot maintenance. She is an independent contractor with Stenbach. She does not need to work on any day and she can subcontract her work by hiring others to help her discharge the service. An employee, like Chris, cannot hire another person to discharge his responsibilities and must work on designed days.
Another important difference is that Angela submits monthly invoices for actual work done. An employee does not have to submit an invoice in order to be paid for work done. Angela's invoices will not be of the same amount from one month to the other, unlike Chris' whose salary pay sheet may be static in amount from month to month.
Gullett Corporation had $26,000 of raw materials on hand on November 1. During the month, the Corporation purchased an additional $75,000 of raw materials. The journal entry to record the purchase of raw materials would include a:
Answer:
debit to Raw Materials of $75,000
Explanation:
In this scenario, the journal entry to record the purchase of raw materials would include a debit to Raw Materials of $75,000. A debit is an entry recording a sum owed, listed on the left-hand side or column of an account. Therefore in accounting, since Gullet Corporation's purchase was for an "additional" $75,000 worth of raw material, they owe that money to the company and must make it up through sales that those materials should generate in the future. That is why it is recorded as a debit.
2. A Treasury bill with a par value of £100,000 due in two months from now is selling today for £98,039, what is the effective annual rate of interest
Answer:
Effective annual rate = 12.62%
Explanation:
The Effective annual rate of return is the equivalent rate earned where compounding is done frequently at period or interval less than a year.
The EAR can be worked out as follows
EAR = ( (1+r)^n - 1 ) × 100
r- interest rate per period
m- number of periods in a year
EAR - Effective annual rate
So we apply this model to the questions as follows:
Cash return = 100,000- 98,039 =1,961
Return over two months = cash return /price today × 100 =
= 1,961/98,039 × 100 =2.0%
Interest per 2 month = 2.0%
DATA:
r- 2%
n - number of two months in a year = 6
Effective annual rate = ((1+0.02)^6 - 1) × 100= 12.6162 %
Effective annual rate = 12.62%
A foreign subsidiary of the Bart Corporation has certain balance sheet accounts on December 31, 20X2. Information relating to these accounts in U.S. dollars is as follows:_________.
Restated at Current Rates Historical Rates
-Marketable (AFS and Trading) securities $ 75,000 $ 85,000
-Inventories, carried at average cost 600,000 700,000
-Refundable deposits 25,000 30,000
-Goodwill 55,000 70,000
Total: $755,000 $885,000
What total should be included in Bart's balance sheet on December 31, 20X2, as a result of the preceding information?
Answer:
$885,000
Explanation:
How you are going to report the assets depends on whether you want to use the current rate method or the temporal (historic) method. Under the temporal method, you should use the historical rates, therefore, the total amount reported on the balance sheet is $885,000. if you want to use the current rate method, you should report the assets at $755,000, but you must also report an unrealized loss = $885,000 - $755,000 = $130,000 in the cumulative translation adjustment account. The total amount reported will not change, only the way you report it will change.
The marketing department of a reputable firm wants to improve strategic decision making, track the actions of other players in the market, and provide early warning of opportunities and threats. Which of the following would help the firm achieve its objectives?
A) Data warehousing
B) strategic planning competitive marketing intelligence
D) customer relationship management
E) ethnographic research
Answer:
The answer is C. competitive marketing intelligence
Explanation:
Competitive marketing intelligence may be a powerful research-based method employed by a company to collect, analyze, and use information collected on competitors, economic conditions, customers etc to a achieve business's competitive advantage.
The information-gathering analysis process can help a corporation develop its strategy or identify competitive gaps. It identifies threats and opportunities within the business
All of the following are assumptions facing opposing forces of reducing costs and adapting to local markets that international business people should be aware of except? Homogenous customer needs worldwide People around the world are willing to sacrifice preferences for lower prices and higher quality Economies of scale can be obtained in production and marketing through supplying worldwide Lowering international synergy and cost via the value chain matrix
Answer: Lowering international synergy and cost via the value chain matrix
Explanation:
Theodore Levitt came up with some assumptions facing opposing forces of reducing costs and adapting to local markets that international business people should be aware of which include;
On a global scale, customer needs are beginning to become homogeneous.People are willing to sacrifice their preferences for better quality products at a cheaper quality which gives Multinational Companies a chance to offer them better products than local producers due to their large sizes and Economies of scale.Having to supply the world can lead to Economies of scale in production and marketing due to the larger market.Lowering international synergy and cost via the value chain matrix is not one of the assumptions espoused by Theodore Levitt and so is the correct answer.
The Keynesian link between the money market and the goods and services market is __________. Changes in the money market must affect the __________ market before the goods and services market is affected.
Answer:
Indirect; investment.
Explanation:
John Maynard Keynes was a British economist born on the 5th of June, 1883 in Cambridge, England. He was famous for his brilliant ideas on government economic policy and macroeconomics which is known as the Keynesian theory. He later died on the 23rd of April, 1946 in Sussex, England.
The Keynesian link between the money market and the goods and services market is indirect. Changes in the money market must affect the investment market before the goods and services market is affected.
According to the Keynesian Transmission Mechanism, the link between the money market and the goods and services market is indirect; because at first, short-term interest rates are lowered by an increase in the supply of reserves and then with time both the bond and bank loan rates falls. Consequently, this would make investments and aggregate demand (AD curve shifts rightward) to rise or increase as a result of the low cost of capital for investors and by extension it boost the level of production or quantity of output (real gross domestic product or Real GDP).
This ultimately implies that, the interest rates affects the real and costs of capital (monetary changes).
ower Drive Corporation designs and produces a line of golf equipment and golf apparel. Power Drive has 100,000 shares of common stock outstanding as of the beginning of 2021. Power Drive has the following transactions affecting stockholders' equity in 2021. March 1 Issues 52,000 additional shares of $1 par value common stock for $49 per share. May 10 Purchases 4,700 shares of treasury stock for $52 per share. June 1 Declares a cash dividend of $1.35 per share to all stockholders of record on June 15. (Hint: Dividends are not paid on treasury stock.) July 1 Pays the cash dividend declared on June 1. October 21 Resells 2,350 shares of treasury stock purchased on May 10 for $57 per share. Power Drive Corporation has the following beginning balances in its stockholders' equity accounts on January 1, 2021: Common Stock, $100,000; Additional Paid-in Capital, $4,200,000; and Retained Earnings, $1,700,000. Net income for the year ended December 31, 2021, is $570,000. Required: Prepare the stockholders' equity section of the balance sheet for Power Drive Corporation as of December 31, 2021. (Amounts to be deducted should be indicated by a minus sign.)
Answer and Explanation:
The preparation of the statement of stockholder equity is presented below:
Power Drive Corporation
Balance sheet
(Stockholder's Equity Section)
At December 31, 2021
Stockholder's Equity:
Common stock $1,52,000
Additional Paid - in - Capital $67,07,750
Total Paid - in Capital $68,59,750
Retained earnings $20,71,145
Treasury Stock -$1,22,200
Total Stockholder's Equity $88,08,695
Workings note
Paid in capital in excess of par value, Common stock $24,96,000
(52000 × $48)
Paid in capital in from sale of treasury stock $11,750
[2350 × ($57-$52)]
Total Additional Paid - in - Capital $25,07,750 Now
Dividend declared [(152000 - 4700) × $1.35] $1,98,855
Treasury Stock [(4700 - 2350) × $52] $1,22,200
Particulars Beg. Balance Additions Deductions End. Bal
Common stock $100,000 $52,000 $152,000
Additional Paid - $42,00,000 $25,07,750 $67,07,750
in - Capital
Retained earnings $1,700,000 $570,000 $1,98,855 $20,71,145
rockwell corp just paid a dividend of .50. analysts expect their dividends to increase by 7% every year for the next 3 years, and then have a constant dividend growth rate of 2% after year 3. If your required return is 8% what is the present value of the stock?
Answer:
Price of share today = $9.74
Explanation:
The price of a share can be calculated using the dividend valuation model
According to this model the value of share is equal to the sum of the present values of its future cash dividends discounted at the required rate of return.
If dividend is expected to grow at a given rate , the value of a share is calculated using the formula below:
Price=Do (1+g)/(k-g)
Do - dividend in the following year, K- requited rate of return , g- growth rate
Step 1 : PV of dividend from year 1 to 3
PV = D × (1+r)^(-n)
D- dividend receivable in a particular year, r- required rate of return, n- year
Year PV of Dividend
1 0.50 × 1.07^1 ×1.08^(-1) = 0.495
2 0.50 × 1.07^2 ×1.08^(-2) = 0.491
3 0.50× 1.07^3× 1.08^(-3) = 0.486
Step 2 : PV of dividend from year 4 to infinity
PV (in year 3 terms) of dividend= 0.50× 1.07^3 ×1.02/(0.08-0.02) = 10.41
PV in year 0 terms = 10.41 × 1.08^(-3) = 8.27
Total Present Value = 0.495 + 0.491 + 0.486 + 8.27 = 9.738
Price of share today = $9.74
The United Auto Workers went on strike support the employees of the Detroit News, Detroit Free Press, and USA Today. This is an example of a(n) ________ strike.
a. unfair labor practice
b. wildcat
c. sympathy
d. yellow dog
e. economic
Answer:
Sympathy
Explanation:
A sympathy strike is one in which a group of workers go on strike in support of another group that has a dispute.
This can occur even when the group going on sympathy strike do not have a dispute to settle with their employer.
Sympathy strike is not viewed as a violation of no strike clause in an employee's contract.
In the given scenario United Auto Workers went on strike support the employees of the Detroit News, Detroit Free Press, and USA Today.
The valuation of marketable securities on the balance sheet requires the securities on the balance sheet requires the separation of investment securities into three categories: held to maturity: trading securities and securities available for sale trading and securities available for sale.
a. True
b. False
Answer: True
Explanation:
The valuation of marketable securities on the balance sheet requires the securities on the balance sheet requires the separation of investment securities into three categories.
The categories are held to maturity which are the securities that are bought and then kept until they mature; the trading securities and then the securities that are available for sale.
a sole proprietor with a tentative loss may deduct which of the following for qualified business use of home expenses?
Complete Question:
A sole proprietor with a tentative loss may deduct which of the following for qualified business use of home expenses?
a. depreciation
b. mortgage interest
c. rent
d. Utilities
Answer:
b. mortgage interest
Explanation:
The sole proprietor with a tentative loss may deduct expenses for mortgage interest, mortgage insurance premiums, and real estate taxes under the normal rules. The sole proprietor is not allowed to deduct other expenses that are normally tax-exempt expenses, including depreciation, rent, and utilities. The amount to be deducted for mortgage interest should not exceed the percentage for business use.
Paragon Properties built a shopping center at a cost of $50M in year 2010. The company started leasing space in July of 2014. The land was purchased for $5M. Determine the depreciation charges through 2017 if the property was sold in November 2017.
Year = 2014
Cost= $50 M - $5 M = $45 M
Rate =1.177%
Depreciation= 1.177% * $45 M = $529,650
Year=2015
Cost = $45 M
Rate= 2.564%
Depreciation= $45 M * 2.564% = $1,153,800
Year = 2016
Cost = $45 M
Rate =2.564%
Depreciation= $45 M * 2.564% = $1,153,800
Year = 2017
Cost = $45 M
Rate =2.564%
Depreciation= $45 M * 2.564% = $1,153,800
therefore, total depreciation= $1,153,800 + $1,153,800 + $1,153,800 + $529,650 = $3,991,050
Depreciation charges through 2017 = $3,991,050 .
The Depreciation charges through 2017, if property was sold in November 2017 will be $3,991,050.
DepreciationIn the following question we are provided with information as follows:
The Value of the Property in the year 2010 = $50M. The Company started leasing space in July of 2014.
Land was purchased for $5M, which means the Cost of property is now $50M - $5M = $45M. The Depreciation rate in 2014 is 1.17%,
Depreciation value in 2014 = $45M × 1.17 =Depreciation rate in 2016 = 2.5%, Depreciation value = $45M × 2.5% = $529,650
Depreciation rate in 2015 = 2.5%, which give Depreciation value in 2015 = $45M × 2.5% = $1,153,800.
Depreciation rate in 2016 = 2.5%, Depreciation value = $45M × 2.5% = $1,153,800.
Depreciation rate in 2017 = 2.5%, Depreciation value = $45M × 2.5% = $1,153,800.
Therefore, Total Depreciation value in 2017 = $529,650 + $1,153,800 + $1,153,800 + $1,153,800 = $3,991,050
Learn More about Depreciation here:
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Assume an investor purchases the net assets of an investee for the cash purchase price is $50,400. The investor is willing to purchase the investee's business for this amount because the fair value of PPE is $47,040 and the fair value of a (previously unrecognized) customer list is $10,080 (the fair values of all other assets and liabilities are equal to their book values). The investee company reports the following balance sheet on the acquisition date:
Cash $1,680 Accounts payable 3,360
Accounts receivable $3,360 Accrued liabilities 5,040
Inventories 6,720
Current assets 11,760 Current liabilities 8,400
Long-tem liabilities 6,720
PPE, net 16,800 Stockholders' equity 13,440
Total liabilities & equity $28,560 Total assets $28,560
Parts A and B are independent of each other.
A. Provide the journal entry if the investor pays cash and purchases the assets and assumes the liabilities of the investee company.
B. Provide the journal entry if the investor pays cash and purchases all of the stock of the investee's shareholders.
Answer and Explanation:
The Journal entries are shown below:-
A. Cash Dr, $1,680
Accounts receivable Dr, $3,360
Inventories Dr, $6,720
PPE, net Dr, $16,800
To Accounts payable $3,360
To Accrued liabilities $5,040
To Long-term liabilities $6,720
To Cash $13,440
(Being purchase of the assets and assumption of the liabilities is recorded)
B. Equity investment Dr, $13,440
To Cash $13,440
(Being purchase of the assets and assumption of the liabilities is recorded)
. Identify each of the following as (i) part of an expansionary fiscal policy, (ii) part of a contractionary fiscal policy, or (iii) not part of fiscal policy. a. The personal income tax rate is lowered. b. Congress cuts spending on defense. c. College students are allowed to deduct tuition costs from their federal income taxes. d. The corporate income tax rate is lowered. e. The state of Nevada builds a new tollway in an attempt to expand employment and ease traffic in Las Vegas.
Answer:
Option, A , D, E = expansionary fiscal policy.
Option B = Contractionary fiscal policy
Option C = not a part of fiscal policy
Explanation:
The expansionary fiscal policy occurred when there is a decrease in taxes and an increase in government expenditure (spendings). While contractionary fiscal policy occurs when taxes are increased by the government and there is a fall or decrease in government spendings. Therefore, Option A, Option D, and Option E are part of the expansionary fiscal policy.
Option B is a contractionary fiscal policy. While option C is not a part of fiscal policy
21. Preferred stock pays quarterly dividend of $3 a share. If investors require 12% return on a stock of a similar risk level, what is the price
Answer: $100
Explanation:
A value of a Preferred Stock is calculated like a perpetuity which means that it is derived by dividing the cash-flow by the annual interest rate.
This Stock pays $3 per quarter. It will pay _____ per year;
= $3 * 4
= $12
Value of Preferred Stock = [tex]\frac{Annual Cash-flow}{Annual Interest}[/tex]
= [tex]\frac{12}{0.12}[/tex]
= $100
Aggregate supply is best described as the
total output of all products and services.
point of equilibrium.
nation’s real gross national product.
excess supply in the market.
Answer:
Total output of all products and services.
Explanation:
Aggregate supply is defined as the total amount of goods and services that firms are willing to sell, at a specific price, within a particular economy.
Aggregate supply is a macroeconomic concept, an aggregate variable, that is used in Keynesian and Neoclassical economics, often in models that put it together with aggregate demand, in what is known as the Aggregate Supply-Aggregate Demand model (AS-AD model).
You are given the following information for Watson Power Co. Assume the company’s tax rate is 40 percent.
Debt: 5,000 7.2 percent coupon bonds outstanding, $1,000 par value, 30 years to maturity, selling for 108 percent of par; the bonds make semiannual payments.
Common stock: 440,000 shares outstanding, selling for $62 per share; the beta is 1.05.
Preferred stock: 22,000 shares of 3 percent preferred stock outstanding, currently selling for $82 per share.
Market: 11 percent market risk premium and 5.2 percent risk-free rate.
What is the company's WACC?
Answer:
14.06%
Explanation:
The computation of the company WACC is shown below:
Particulars After tax Market value Weights WACC
(cost % × weights)
Common stock 16.75% $27,280,000 0.79 13.25%
(440,000 shares × $62)
Preferred stock 3.66% $1,804,000 0.05 0.19%
(22,000 shares × $82)
Debt 3.95% $5,400,000 0.16 0.62%
(5,000 shares × $1,000 × 108%)
Total $34,484,000 1
WACC 14.06%
Working note
Cost of common equity is
= Risk free rate of return + Beta × market risk premium
= 5.2% + 1.05 × 11%
= 5.2% + 11.55%
= 16.75%
Cost of preferred stock is
= Annual dividend ÷ Market price per share
= 0.03 ÷ $82
= 3.65%
And, the cost of debt is calculated by using the RATE formula i.e
= RATE(NPER,PMT,-PV,FV)
= RATE(30 × 2, $1,000 × 7.2% ÷ 2, -$1,080, $1,000)
After calculated this, the rate of interest should be multiplied by 2 and then applied the tax rate of (1 - 0.40)
So, the rate is 3.95%
T-Shirt Enterprises is selling in a purely competitive market. It is producing 3,000 units, selling them for $2.00 each. At this level of output, the average total cost is 2.50 and the average variable cost is $2.20. Based on these data, the firm should
Answer:
shutdown in the short run
Explanation:
A perfect competition is characterized by many buyers and sellers of homogenous 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.
A firm should shut down in the short run if price is less than average variable cost.
for T-Shirt Enterprises, price is $2 which is less than average variable cost
Your task is to take this _______and construct a graphical representation of the data. In doing so, you determine that as the price of soda rises, the quantity of soda demanded decreases. This confirms the _______ .
Answer:
1. Demand Schedule
2. Law Of Demand
Explanation:
A demand schedule in economics is a tabular representation that describes the quantity demanded of a good or service at different price levels.
In other words, demand schedule depicts the quantity or units of a good or service will be purchased at various price points.
On the other hand, the law of demand states that, given that, all things being equal, as the price of a good increases, quantity demanded decreases; and at the same time, as the price of a good decreases, quantity demanded increases.
Hence, it is can be concluded that, in this case, Your task is to take this DEMAND SCHEDULE and construct a graphical representation of the data. In doing so, you determine that as the price of soda rises, the quantity of soda demanded decreases. This confirms the LAW OF DEMAND.
Answer:
Given the data, a graphical representation of an increase in price of soda resulting in a decrease in quantity demanded of soda, ceteris paribus, is given below in the attachment.
Explanation:
This confirms the law of demand, which states that, all other things being equal, the higher the price of a commodity, the lower the quantity demanded of it.
Other things that are held equal or constant include:
- taste of the consumer
- income level of the consumer
- interest rate in the economy
- level of production or supply of the commodity; etc.
View attachment below, for the graph illustrating THE LAW OF DEMAND.
- DD represents the demand curve
- The vertical axis represents the prices
- The horizontal axis represents the quantities demanded
- The equilibrium point is also seen at D4.
Accounts payable are: Multiple Choice Amounts received in advance from customers for future services. Always payable within 30 days. Estimated liabilities. Amounts owed to suppliers for products and/or services purchased on credit. Not usually due on specific dates.
Answer:
Amounts owed to suppliers for products and/or services purchased on credit
Explanation:
Amounts owed to suppliers for products and/or services purchased on credit
Accounts Payable are due to a particular creditor when it order goods or services without paying immediately which means that you bought goods on credit.
According to the Uniform Prudent Investors Act , it is NOT a breach of fiduciary duty if investment advisers do not inquire into a client's A) investment objectives B) specific financial needs C) Social Security or tax ID number D) financial situation
Answer: C) Social Security or tax ID number
Explanation:
The Uniform Prudent Investors Act lists guidelines to be followed by investment advisers and trustees when they invest assets. The guiding principle of this Act is the Prudent Man Rule which is that when investing, the investor should invest like a Prudent person would invest their assets.
As such, an investor should be sure to find out some details about the client to enable them better recommend an investment trajectory. Details such as their specific financial needs, their investment objectives and their financial situation will enable the advisers better know what investment strategies and vehicles to use and therefore not inquiring about them would be a breach of fiduciary duty.
Knowing about a client's Social Security or tax ID number will not help the adviser chart an investment course better so does not need to be known.
Calvert Corporation expects an EBIT of $25,300 every year forever. The company currently has no debt, and its cost of equity is 15.3 percent. The company can borrow at 10.1 percent and the corporate tax rate is 25 percent. a. What is the current value of the company
Answer:
Value of the company = $124,019.61
Explanation:
The value of then firm is the present value of its expected future cash inflow discounted at its required rate of return.
In this case, the earnings available to ordinary shareholders becomes the annual cash inflow while the appropriate discount rate is the cost of equity.
The absence of debt in the company's capital structure implies that the cost of equity would be the appropriate discount rate.
And the value of the company would be determined as follows
Value of the company = Earnings after tax/Cost of equity
Earnings after tax = EBIT × (1-Tax rate)= 25,300×(1-0.25)=18,975
Cost of equity = 15.3%
Value of the company = 18975 /0.153= 124,019.6078
Value of the company = $124,019.61
Activity-based costing for a service company
Crosswinds Hospital plans to use activity-based costing to assign hospital indirect costs to the care of patients. The hospital has identified the following activities and activity rates for the hospital indirect costs:
Activity Activity Rate
Room and meals $240 per day
Radiology $215 per image
Pharmacy $50 per physician order
Chemistry lab $80 per test
Operating room $1,000 per operating room hour
The activity usage information associated with the two patients is as follows:
Patient Putin Patient Umit
Number of days 6 days 4 days
Number of images 4 images 3 images
Number of physician orders 6 orders 2 orders
Number of tests 5 tests 4 tests
Number of operating room hours8 hours 4 hours
Complete the Activity Table:
A. Determine the activity rate for each activity. Enter these rates in the Activity Rate columns.
B. Use the activity rates in (A) to determine the total and per-unit activity costs associated with patient.
Answer:
A.
Room and meals= $240 per day
Radiology = $215 per image
Pharmacy = $50 per physician order
Chemistry lab = $80 per test
Operating room = $1,000 per operating room hour
B.
Patient Putin
Unit = $1,585
Total = $10,640
Patient Umit
Unit = $1,585
Total = $6,025
Explanation:
Activity rate = Total Overhead Cost / Total Activity
Room and meals= $240 per day
Radiology = $215 per image
Pharmacy = $50 per physician order
Chemistry lab = $80 per test
Operating room = $1,000 per operating room hour
Patient Putin
Unit Total
Room and meals $240 $1,440
Radiology $215 $860
Pharmacy $50 $300
Chemistry lab $80 $40
Operating room $1,000 $8,000
Total $1,585 $10,640
Patient Umit
Unit Total
Room and meals $240 $960
Radiology $215 $645
Pharmacy $50 $100
Chemistry lab $80 $320
Operating room $1,000 $4,000
Total $1,585 $6,025
Quality Brick Company produces bricks in two processing departments—Molding and Firing. Information relating to the company’s operations in March follows:
a. Raw materials used in production: Molding Department, $28,600; and Firing Department, $5,800.
b. Direct labor costs incurred: Molding Department, $19,100; and Firing Department, $5,300.
c. Manufacturing overhead was applied: Molding Department, $25,200; and Firing Department, $35,400.
d. Unfired, molded bricks were transferred from the Molding Department to the Firing Department. According to the company’s process costing system, the cost of the unfired, molded bricks was $65,400.
e. Finished bricks were transferred from the Firing Department to the finished goods warehouse. According to the company’s process costing system, the cost of the finished bricks was $108,200.
f. Finished bricks were sold to customers. According to the company’s process costing system, the cost of the finished bricks sold was $104,900.
Required:
Prepare journal entries to record items (a) through (f) above. (If no entry is required for a transaction/event,
Answer:
a. Raw materials used in production: Molding Department, $28,600; and Firing Department, $5,800.
Dr Work in process: Molding department 28,600
Dr Work in process: Firing department 5,800
Cr Materials inventory 34,400
b. Direct labor costs incurred: Molding Department, $19,100; and Firing Department, $5,300.
Dr Work in process: Molding department 19,100
Dr Work in process: Firing department 5,300
Cr Wages payable 24,400
c. Manufacturing overhead was applied: Molding Department, $25,200; and Firing Department, $35,400.
Dr Work in process: Molding department 25,200
Dr Work in process: Firing department 35,400
Cr Manufacturing overhead 60,600
d. Unfired, molded bricks were transferred from the Molding Department to the Firing Department. According to the company’s process costing system, the cost of the unfired, molded bricks was $65,400.
Dr Work in process: Firing department 65,400
Cr Work in process: Molding department 65,400
e. Finished bricks were transferred from the Firing Department to the finished goods warehouse. According to the company’s process costing system, the cost of the finished bricks was $108,200.
Dr Finished goods inventory 108,200
Cr Work in process: Firing department 108,200
f. Finished bricks were sold to customers. According to the company’s process costing system, the cost of the finished bricks sold was $104,900.
Dr Cost of goods sold 104,900
Cr Finished goods inventory 104,900
Amy owns a salon and spa. She’s leasing a prime piece of real estate in which she’s installing salon chairs, counters, massage tables, spray tan vestibules, washers, and dryers. What are these items considered?
The correct answer to this open question is the following.
Amy owns a salon and spa. She’s leasing a prime piece of real estate in which she’s installing salon chairs, counters, massage tables, spray tan vestibules, washers, and dryers. These items are considered commodities and pluses that improve the quality of the leasing and upgrade the facility. These are also tools to help the new operator to properly do the work and offer great client service. With all those elements, Amy can justify the amount of money she asks for the rent of the space. More items included, the higher the prize.
ohnson, LLC’s bonds have exhibited a substantial trading volume in the past few years. Its bonds would be referred to a
Answer:
Seasonal issue
Explanation:
The seasoned issue or seasonal issue is that issue which is made for extra securities held from the company i.e established and it considered those securities who are already traded in the secondary market. The bond which are outstanding and traded in the secondary markets is known as seasoned issued
Since in the question it is mentioned that there is a substantial trading volume in the past few years so this represents the seasoned issue