Answer:
In a free market economy, resources are allocated through the interaction of free and self-directed market forces. This means that what to produce is determined consumers, how to produce is determined by producers, and who gets the products depends upon the purchasing power of consumers
explain the management of sssmm the impact of the following socio-economic issues on their business
Answer:
South Africa in the 21st Century - Bibliothek der Friedrich-Ebert ...
by P Pillay · Cited by 12 — Foremost amongst these are the following ... The six key socio-economic challenges described in this paper relate to: 1. ... Specifically, what are the consequences for unemployment.
A business that is less profitable than similar businesses, or with lower sales or higher expenses than similar businesses, may have difficulty competing.
True
False
Answer:
True
Explanation:
should you be concerned about data security? in a recent survey _______ americans reported that they do not trust businesses with their personal information online.
a) less than 30%
b) more than 75%
c) approximately 60%
e) approximately 45%
In a recent survey more than 75% Americans reported that they do not trust businesses with their personal information online. People should you be concerned about data security.
What is data security?Data security refers to the process of protecting data from unauthorized access and corruption throughout its lifecycle. For all apps and platforms, data encryption, hashing, tokenization, and key management are all data security solutions.
Thus, option B, more than 75% is correct.
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Alan does not want to lend his car to his co-worker, Linda, because he believes that all women are irresponsible drivers. Which of the following barriers to accepting diversity does this scenario illustrate?
a.Backlash
bPrejudice
c.Harassment
d.Pluralism
The Square Box is considering two projects, both of which have an initial cost of $35,000 and total cash inflows of $50,000. The cash inflows of project A are $5,000, $10,000, $15,000, and $20,000 over the next four years, respectively. The cash inflows for project B are $20,000, $15,000, $10,000, and $5,000 over the next four years, respectively. Which one of the following statements is correct if The Square Box requires a 13 percent rate of return and has a required discounted payback period of 3.5 years? Both projects should be accepted. Both projects should be rejected. Project A should be accepted and project B should be rejected. Project A should be rejected and project B should be accepted. You should be indifferent to accepting either or both projects.
Answer:
project A should be rejected and project B should be accepted
Explanation:
Discounted payback calculates the amount of time it takes to recover the amount invested in a project from it cumulative discounted cash flows
For project A
Discounted cash flows
Year 1 = 20000 / 1.13 = 17,699.12
Year 2 = 15,000 / 1.13^2 = 11,747.20
year 3 = 10,000 / 1.13^3 = 6930.50
Year 4 = 5000 / 1.13^4 = 3066.59
Discounted payback = 2.8 years
Simon Company's year-end balance sheets follow.
At December 2017 2016 2015
Assets
Cash $25,396 $29,685 $30,922
Accounts receivable, net 89,900 63,000 57,000
Merchandise inventory 100,500 84,000 60,000
Prepaid expenses 8,178 7,792 3,436
Plant assets, net 200,810 190,337 164,142
Total assets $434,784 $374,814 $315,500
Liabilities and Equity
Accounts payable $107,179 $62,710 $41,230
Long-term notes payable secured by mortgages on plant assets
80,922 85,345 69,028
Common stock, $10 par value 162,500 162,500 162,500
Retained earnings 84,183 64,259 42,742
Total liabilities and equity $434,784 $374,814 $315,500
The company's income statements for the years ended December 31, 2017 and 2016, follow. Assume that all sales are on credit:
For Year Ended December 31 2017 2016
Sales $565,219 $446,029
Cost of goods sold $344,784 $289,919
Other operating expenses 175,218 112,845
Interest expense 9,609 10,259
Income taxes 7,348 6,690
Total costs and expenses 536,959 419,713
Net income $28,260 $26,316
Earnings per share $1.74 $1.62
Compute days' sales uncollected.
Answer:
2017 Days' Sales Uncollected 49.37 days
2016 Days' Sales Uncollected 49.10 days
Explanation:
Computation for days' sales uncollected
Using this formula
Days' Sales Uncollected=Average receivables / Credit sales x 365 days
Let plug in the formula
2017 Days' Sales Uncollected= $76,450 / $565,219 x 365
2017 Days' Sales Uncollected= 49.37 days
[($89,900+$63,000)/2=$76,450]
2016 Days' Sales Uncollected= $60,000 / $446,029 x 365 days
2016 Days' Sales Uncollected= 49.10 days
[($63,000+$57,000)/2=$60,000]
Therefore 2017 Days' Sales Uncollected will be 49.37 days and 2016 Days' Sales Uncollected will be 49.10 days
Simon Company's year-end balance sheets follow. At December 2017 2016 2015 Assets. To compute the days' sales uncollected, we need to calculate the average accounts receivable and divide it by the average daily sales.
Average Accounts Receivable:
2017:
(Beginning Accounts Receivable + Ending Accounts Receivable) / 2
= ($63,000 + $89,900) / 2
= $76,450
2016:
(Beginning Accounts Receivable + Ending Accounts Receivable) / 2
= ($57,000 + $63,000) / 2
= $60,000
Average Daily Sales:
2017: Net Sales / 365
= $565,219 / 365
= $1,547.15
2016: Net Sales / 365
= $446,029 / 365
= $1,221.53
Days Sales Uncollected:
2017: Average Accounts Receivable / Average Daily Sales
= $76,450 / $1,547.15
= 49.48 days
2016: Average Accounts Receivable / Average Daily Sales
= $60,000 / $1,221.53
= 49.12 days
Therefore, the days sales uncollected for Simon Company are approximately 49.48 days in 2017 and 49.12 days in 2016.
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In performing accounting services for small businesses, you encounter the following situations pertaining to cash sales. 1. Oriole Company enters sales and sales taxes separately on its cash register. On April 10, the register totals are sales $24,500 and sales taxes $1,225. 2. Sheridan Company does not segregate sales and sales taxes. Its register total for April 15 is $16,430, which includes a 6% sales tax. Prepare the entry to record the sales transactions and related taxes for Oriole Company. (Credit account titles are automatically indented when amount is entered. Do not indent manually.) Date Account Titles and Explanation Debit Credit Apr. 10 enter an account title to record the sales transactions and related taxes for Oriole Company on April 10 Cash enter a debit amount enter a credit amount enter an account title to record the sales transactions and related taxes for Oriole Company on April 10 Sales Revenue enter a debit amount enter a credit amount enter an account title to record the sales transactions and related taxes for Oriole Company on April 10 Sales Taxes Payable enter a debit amount enter a credit amount eTextbook and Media
Answer and Explanation:
The journal entry to record the sales transaction is given below:
On April 10
Cash Dr $25,725
To Sales revenue $24,500
To Sales tax payable $1,225
(Being the sale is recorded)
Here cash is debited as it increased the assets and revenue & sales tax payable is credited as it increased the revenue & liabilities
On January 1, 2022, The Eighties Shop has 100,000 shares of common stock outstanding. The Eighties Shop incurred the following transactions in 2022.
March 1 Issues 53,000 additional shares of $1 par value common stock for $50 per share.
May 10 Purchases 4,800 shares of treasury stock for $53 per share.
June 1 Declares a cash dividend of $1.40 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 2,400 shares of treasury stock purchased on May 10 for $58 per share.
Required:
Record each of these transactions.
Answer:
Date General Journal Debit Credit
March 1 Bank A/c $2,650,000
(53,000 × $50)
Share Capital A/c $53,000
(53,000 × $1)
Share Premium A/c $2,597,000
[53,000 × $49 ($50 - $1)}
(Being additional 53,000 issued shares for $50)
May 10 Treasury Stock A/c $254,400
(4,800 × $53)
Cash A/c (4,800 × $53) $254,400
(Being purchase of 4,800 treasury stock for $53 )
June 1 Retained Earning A/c $207,480
(1,53,000- 4,800) × $1.4
Dividend Payable A/c $207,480
[(153,000 - 4,800) × $1.4]
(Being cash dividend declared)
July 1 Dividend Payable A/c $207,480
Cash A/c $207,480
(Being cash dividend paid)
October 21 Cash A/c (2,400 × $58) $139,200
Treasury Stock (2,400 × $53) $127,200
Paid in Capital from treasury Stock $12,000
(2400 × $5)
(Being 2,400 Treasury Stock sold for $58)
The Eighties Shop will record the journal entries for the 2022 transactions as follows:
Journal Entries:
March 1 Debit Cash $2,650,000
Credit Common Stock $53,000
Credit Additional Paid-in Capital $2,597,000
To record the issuance of 53,000 shares at $50 per share.May 10 Debit Treasury Stock $4,800
Debit Additional Paid-in Capital $249,600
Credit Cash $254,400
To record the purchase of 4,800 shares of treasury stock at $53 per share.June 1 Debit Dividend $207,480
Credit Dividends Payable $207,480
To record the declaration of cash dividends on 148,200 shares at $1.40 per share.July 1 Debit Dividends Payable $207,480
Credit Cash $207,480
To record the payment of dividends.Oct. 21 Debit Cash $139,200
Credit Treasury Stock $2,400
Credit Additional Paid-in Capital $136,800
To record the resale of 2,400 shares of treasury stock at $58 per share.Data and Calculations:
Outstanding Common Stock = 100,000 shares
March 1 Cash $2,650,000 Common Stock $53,000 Additional Paid-in Capital $2,597,000
May 10 Treasury Stock $4,800 Additional Paid-in Capital $249,600 Cash $254,400
June 1 Dividend $207,480 Dividends Payable $207,480 (148,200 x $1.40)
July 1 Dividends Payable $207,480 Cash $207,480
Oct. 21 Cash $139,200 Treasury Stock $2,400 Additional Paid-in Capital $136,800
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The chapter argues that investment depends negatively on the interest rate because an increase in the cost of borrowing discourages investment. However, firms often finance their investment projects using their own funds.
If a firm is considering its own funds (rather than borrowing) to finance investment projects, will high interest rates discourage the firm from undertaking these projects? Explain.
Answer: Yes they will.
Explanation:
With high interest rates, the company will be able to make better returns if they invested the money and took advantage of those interest rates instead of spending the money on their project.
Assets like bonds will be better to go into because they will offer a return based on the higher interest rates which will bring in good returns.
The company is free to use those funds to invest in projects if these projects will lead to a better return than could be gotten from holding bonds but if that is not the case, they should simply buy bonds and hold them for superior returns.
You buy an annuity which will pay you $12,000 a year for ten years. The payments are paid on the first day of each year. What is the value of this annuity today at a 7% discount rate?
Answer:
PV of annuity due = $90,182.8 (Approx.)
Explanation:
Given:
Payment per year = $12,000
Number of year = 10
Interest rate = 7% = 0.07
Find:
PV of annuity due
Computation:
PV of annuity due = P + P[{1-(1+r)⁻⁽ⁿ⁻¹)/r]
PV of annuity due = 12,000 + 12,000[{1-(1+0.07)⁻⁽¹⁰⁻¹)/0.07]
PV of annuity due = $90,182.8 (Approx.)
On January 1, 2021, the Highlands Company began construction on a new manufacturing facility for its own use. The building was completed in 2022. The company borrowed $2,350,000 at 9% on January 1 to help finance the construction. In addition to the construction loan, Highlands had the following debt outstanding throughout 2021:
$7,000,000, 14% bonds
$3,000,000, 9% long-term note
Construction expenditures incurred during 2021 were as follows:
January 1 $ 960,000
March 31 1,560,000
June 30 1,232,000
September 30 960,000
December 31 760,000
Required:
Calculate the amount of interest capitalized for 2021 using the specific interest method.
Answer:
$291,000
Explanation:
First, we need to calculate the weighted average expenditure. the Weighted average expenditure is calculated and attached with the answer in PDF format please find it.
Now calculate the Average interest rate on General debt
Average interest rate on General debt = [ ( $7,000,000 x 14% ) + ( $3,000,000 x 9% ) ] / ( $7,000,000 + $3,000,000 ) = [ $980,000 + $270,000 ] / $10,000,000 = $1,250,000 / $10,000,000 = 0.125 = 12.5%
Now the specific loan of $2,350,000 is utilised and the remianing value of expenditure is $636,000 ($2,986,000 - $2,350,000) fromgeneral debt is utilized for the costruction purpose. The interest on both loan should be capitalised.
Interest capitalized = ( $2,350,000 x 9% ) + ( $636,000 x 12.5% ) = $211,500 + $79,500 = $291,000
A person who files bankruptcy ends up paying a 6% higher fixed interest rate on a 30-year home loan than a person
who has not filed bankruptcy. The person who files bankruptcy pays a 12% interest rate on their home loan. If the loan
amount is $150,000, how much more in total interest do they pay than the person who has not filed bankruptcy?
A. $258,375.30
B. $643.59
C. $149,536.52
D. $231,693.52
Answer:
D 231,692.52
Explanation:
got it right on edge21
Based on the interest rates given to the person who has filed for bankruptcy and the person who hasn't, the additional amount in total interest that the person with bankruptcy will pay is D. $231,693.52.
What would the person who declared bankruptcy pay?The amount that they pay can be found as:
Loan amount = Amount x ( 1 - ( 1 + rate) ^ -number of periods) / rate
Rate is: Number of periods:
= 12% / 12 = 30 x 12
= 1% per month = 360 months
The amount paid monthly is:
150,000 = Amount x ( 1 - (1 + 1%) ⁻³⁶⁰) / 1%
150,000 = Amount x 97.218331079
Amount = 150,000 / 97.218331079
= $1,542.92
What would the person who has never declared bankruptcy pay?They pay a 6% less than the person who has declared bankruptcy so they will pay:
= 12% - 6%
= 6%
Rate is therefore:
= 6% / 12
= 0.5%
Amount paid monthly is:
150,000 = Amount x ( 1 - (1 + 0.5%) ⁻³⁶⁰) / 0.5%
150,000 = Amount x 166.7916143923
Amount = 150,000 / 166.7916143923
= $899.33
What is the difference in interest?= (Amount paid by person with previous bankruptcy - Person with no history of bankruptcy) x 360 months
= (1,542.92 - 899.33) x 360
= $231,693.52
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On January 1, Sheridan Company had 97,500 shares of no-par common stock issued and outstanding. The stock has a stated value of $6 per share. During the year, the following occurred.
Apr. 1 Issued 23,000 additional shares of common stock for $17 per share.
June 15 Declared a cash dividend of $1 per share to stockholders of record on June 30.
July 10 Paid the $1 cash dividend.
Dec. 1 Issued 1,500 additional shares of common stock for $19 per share.
15 Declared a cash dividend on outstanding shares of $2.90 per share to stockholders of record on December 31.
Required:
Prepare the entries to record these transactions.
Answer:
Sheridan Company
Journal Entries:
Apr. 1: Debit Cash $391,000
Credit Common stock $138,000
Credit Additional Paid-in Capital $253,000
To record the issue of 23,000 additional shares for $17 per share.
June 15: Debit Retained Earnings $120,500
Credit Dividends Payable $120,500
To record the declaration of cash dividend of $1 per share (120,500 shares).
July 10: Debit Dividends Payable $120,500
Credit Cash $120,500
To record the payment of dividends.
Dec. 1: Debit Cash $28,500
Credit Common stock $9,000
Credit Additional Paid-in Capital $19,500
To record the issue of 1,500 shares for $19 per share.
Dec. 12: Debit Retained Earnings $353,800
Credit Dividends Payable $353,800
To record the declaration of $2.90 per share dividends to 122,000 shares
Explanation:
a) Data and Analysis:
Outstanding common stock = 97,500 shares
Stated value per share = $6
Apr. 1 Cash $391,000 Common stock $138,000 Additional Paid-in Capital $253,000, 23,000 additional shares for $17 per share.
June 15: Retained Earnings $120,500 Dividends Payable $120,500 (97,500 + 23,000)
July 10: Dividends Payable $120,500 Cash $120,500
Dec. 1: Cash $28,500 Common stock $9,000 Additional Paid-in Capital $19,500
Dec. 12: Retained Earnings $353,800 Dividends Payable $353,800 (122,000 at $2.90 per share, i.e. 120,500 + 1,500 shares)
How can you control inventory costs through proper planning and balancing inventory levels?
In order to control inventory costs, you need to consider the inventory A)_____ which may include the cost of renting a storage facility. You should also check the turnover rate, which is the pace at which you
B)_____ your inventory.
A. Ordering cost, storage cost, cost of capital
B. Store, order, replace
Answer:
i think its storage cost and replace
Explanation:
update i was right got 5/5
Brady's listing of deferred tax assets and liabilities includes the following for operations in the tax jurisdictions of Tambura and Nileboo:
Tambura:
Deferred tax asset of $19 million
Valuation allowance of $16 million
Deferred tax liability of $28 million
Nileboo:
Deferred tax asset of $60 million
Deferred tax liability of $17 million
Brady files separate tax returns in Tambura and Nileboo. Brady’s balance sheet would include the following disclosure of deferred tax assets and liabilities:_______.
Answer: Deferred tax liability of $25 million in Tambura and Deferred tax asset of $43 million in Nileboo.
Explanation:
Tambura
Deferred tax asset $ 19 million
Less: Valuation allowance ( $ 16 million)
Net deferred tax asset $ 3 million
Less Deferred tax liability ($ 28 million)
Deferred tax liability $25 million
Nileboo
Deferred tax asset $ 60 million
Less: Deferred tax liability ( $ 17 million)
Deferred tax asset $43 million
Brian's Performance Pizza is a small restaurant in New York City that sells gluten-free pizzas. Brian's very tiny kitchen has barely enough room for the three ovens in which his workers bake the pizzas. Brian signed a lease obligating him to pay the rent for the three ovens for the next year. Because of this, and because Brian's kitchen cannot fit more than three ovens, Brian cannot change the number of ovens he uses in his production of pizzas in the short run.
However, Brian's decision regarding how many workers to use can vary from week to week because his workers tend to be students. Each Monday, Brian lets them know how many workers he needs for each day of the week. In the short run, these workers are_______ inputs and the ovens are_______ inputs.
Answer:
Variable and Fixed
Explanation:
Variable inputs are those which can be changed/altered in the short-run. The demand for these inputs can be changed with a change in production.
However, fixed inputs are those inputs which cannot be changed/altered in the short-run. The demand for these inputs remains unchanged in the short-run. It can only be changed in the long-run.
Since Brain has signed a lease obligation for the next three years, it cannot change the number of ovens in the short-run. This number of oven's is a fixed input at least for three years.
While, Brain can easily change the number of workers he wants to hire. Therefore, number of workers is a variable input in the short-run.
Thus, we can conclude that in the short run, these workers are variable inputs and the ovens are fixed inputs.
describe the difference between real gdp and nominal gdp.
Answer:
Nominal GDP measures a country's gross domestic product using current prices, without adjusting for inflation. Contrast this with real GDP, which measures a country's economic output adjusted for the impact of inflation.
Cream and Crimson Foods has a target capital structure of calling for 41.00 percent debt, 5.00 percent preferred stock, and 54.00 percent common equity (retained earnings plus common stock). Its before-tax cost of debt is 12.00 percent. The tax rate is 40.00%. Its cost of preferred stock is 12.98%. Its cost of common equity is 13.18%. Find the WACC for Cream and Crimson Foods
Answer:
10.72%
Explanation:
WACC = (weight of equity x cost of equity) + [weight of debt x cost of debt x (1 - tax rate)] +( weight of preferred stock x cost of preferred stock)
debt = 0.41 x 12% x (1 - 0.4) = 2.95%
preferred stock = 0.05 x 12.98% = 0.65%
common equity = 0.54 x 13.18% = 7.12%
WACC = 2.95% + 0.65% + 7.12% = 10.72%
The S&P 500 has been increasing steadily over the last several months. What does this signal about how investors view future profits? Investors believe future profits are unpredictable. Investors believe profits have been higher over the past few months than they are expected to be in the future. Investors believe future profits will be lower than previously expected. Investors believe future profits will be higher than previously expected.
Answer: Investors believe future profits will be higher than previously expected.
Explanation:
If the S&P 500 has been rising, this means that investors are buying more shares in the companies in the index.
This means that these investors believe that the profits to come to these companies is going to be higher than expected. If the profits are expected to be the same as previously thought then there would be little increase in stock prices because the relevant increases would have already occurred.
The Crane Inc., a manufacturer of low-sugar, low-sodium, low-cholesterol TV dinners, would like to increase its market share in the Sunbelt. In order to do so, Crane has decided to locate a new factory in the Panama City area. Crane will either buy or lease a site depending upon which is more advantageous. The site location committee has narrowed down the available sites to the following three very similar buildings that will meet their needs.
Building A: Purchase for a cash price of $617,800, useful life 26 years.
Building B: Lease for 26 years with annual lease payments of $71,870 being made at the beginning of the year.
Building C: Purchase for $650,400 cash. This building is larger than needed; however, the excess space can be sublet for 26 years at a net annual rental of $6,980. Rental payments will be received at the end of each year. The Crane Inc. has no aversion to being a landlord.
Required:
In which building would you recommend that The Nash Inc. locate, assuming a 12% cost of funds?
Answer:
building b
Explanation:
Nash would buy the cheapest building
The present value of building 2 and 3 has to be determined
Present value is the sum of discounted cash flows
Present value can be calculated using a financial calculator
Building b
cash flow each year from year 1 to 26 = $-71,870
I = 12%
PV = . 567461.08
Building c
Cash flow in year 0 = $-650,400
cash flow each year from year 1 to 26 = $6,980
I = 12%
Pv = 595288.29
To find the PV 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
building b is the cheapest
Ahmed Company purchases all merchandise on credit. It recently budgeted the following month-end accounts payable balances and merchandise inventory balances. Cash payments on accounts payable during each month are expected to be: May, $1,600,000; June, $1,490,000; July, $1,425,000; and August, $1,495,000.
Accounts Payable Merchandise Inventory
May 31 $150,000 $250,000
June 30 200,000 400,000
July 31 235,000 300,000
August 31 195,000 330,000
Use the available information to compute the budgeted amounts of (1) Merchandise purchases for June, July, and August (2) Cost of goods sold for June, July, and August.
Answer:
Explanation:
The merchandise purchase can be determined by using the formula:
Purchase = Cash payments + Ending Accounts Payable - Beginning Accounts Payable
For June:
Purchase = $(1490000 + 200000 - 150000)
Purchase = $(1690000 - 150000)
Purchase = $1540000
For July:
Purchases: $(1425000+235000 - 200000)
Purchases = $(1660000 - 200000)
Purchases = $1460000
For August:
Purchases: $(1495000 + 195000 - 235000)
Purchases: $(1690000 - 2235000)
Purchases: $1455000
The cost of goods sold = Beginning Inventory + Purchase - Ending inventory
For June:
Cost of goods sold= $(250000 + 1540000 - 400000)
Cost of goods sold= $(1790000 - 400000)
Cost of goods sold = $1390000
For July:
Cost of goods sold = $(400000 + 1460000 - 300000)
Cost of goods sold = $(1860000 - 300000)
Cost of goods sold = $1560000
For August:
Cost of good sold = $(300000+ 1455000 - 330000)
Cost of good sold = $(1755000 - 330000)
Cost ofgood sold = $1425000
Bryant Company sells a wide range of inventories, which are initially purchased on account. Occasionally, a short-term note payable is used to obtain cash for current use. The following transactions were selected from those occurring during the year.
a. On January 10, purchased merchandise on credit for $30,000. The company uses a perpetual inventory system.
b. On March 1, borrowed $64,000 cash from City Bank and signed a promissory note with a face amount of $64,000, due at the end of six months, accruing interest at an annual rate of 8.50 percent, payable at maturity.
Required:
For each of the transactions, indicate the accounts, amounts, and effects on the accounting equation.
Answer:
Finance charge = $2,720
Transaction a: This increases assets by $30,000 and also the liabilities by $30,000.
Transaction b: This increases assets by $64,000, increases liabilities by $66,720, but reduces Stockholder's Equity by $2,720.
Explanation:
Note: See the attached excel file for the accounting equation.
In the attached excel file, the finance charge of $2,720 is calculated as follows:
Finance charge = Amount borrowed * Interest rate * (Number of months the promissory will due / Number of months in a year) = $64,000 * 8.50% * (6 / 12) = $2,720
The effect of each transaction on the accounting equation are discussed below:
Transaction a: This increases assets by $30,000 and also the liabilities by $30,000.
Transaction b: This increases assets by $64,000, increases liabilities by $66,720, but reduces Stockholder's Equity by $2,720.
The Department of Defense uses an area cost factor (ACF) to compensate for variations in construction costs in different parts of the country and world. If a cold storage warehouse cost $1,050,000 in Rapid City, South Dakota, where the ACF is 0.91, and the cost of a similar facility built in Andros Island, The Bahamas, is $2,500,000, what is the ACF for Andros Island
Answer: 2.16
Explanation:
Cost at B = Cost at A * (Cost index of B / Cost index of A)
Cost at A = $1,050,000 Rapid City
Cost at B = $2,500,000 Andros Island
Cost index at A = ACF of 0.91
Cost index at B = ?
2,500,000 = 1,050,000 * (Andros ACF / 0.91)
2,500,000 * 0.91 = 1,050,000 * Andros ACF
Andros ACF = (2,500,000 * 0.91) / 1,050,000
Andros ACF = 2.16
Almost ___________________ percent of U.S. banks are FDIC members.
a
50
b
99
c
90
d
75
Lucky Corporation produces a part used in the manufacture of one of its products. The unit product cost is $21, computed as follows: Direct materials $ 6 Direct labor 8 Variable manufacturing overhead 1 Fixed manufacturing overhead 6 Unit product cost $ 21 An outside supplier has offered to provide the annual requirement of 6,000 of the parts for only $14 each. The company estimates that 50% of the fixed manufacturing overhead cost above could be eliminated if the parts are purchased from the outside supplier. Assume that direct labor is an avoidable cost in this decision. Based on these data, the financial advantage (disadvantage) of purchasing the parts from the outside supplier would be:
Answer:
Lucky Corporation
The total financial advantage of purchasing the parts from the outside supplier would be:
= $24,000.
Explanation:
a) Data and Calculations:
Direct materials $ 6
Direct labor 8
Variable manufacturing overhead 1
Fixed manufacturing overhead 6
Unit product cost $ 21
Cost of parts per unit from outside supplier = $14
Relevant Costs:
Direct materials $ 6
Direct labor 8
Variable manufacturing overhead 1
Fixed manufacturing overhead 3 ($6 * 50%)
Unit product cost $ 18 relevant
This relevant unit product cost of $18 is compared with the $14 charged by the outside supplier to determine financial advantage or disadvantage.
Total financial advantage of purchasing the parts from the outside supplier would be $$24,000 (6,000 * $4).
Expalin two advantages of Marginal Costing.
Answer:
. Facilitates cost control – By separating the fixed and variable costs, marginal costing provides an excellent means of controlling costs. 3. Avoids arbitrary apportionment of overheads – Marginal costing avoids the complexities of allocation and apportionment of fixed overheads which is really arbitrary.
Gary, a self-employed CPA, traveled to Dallas for five days on vacation, and while there spent another three days conducting business. Gary's plane fare for the trip was $650; meals cost $180 per day; lodging cost $350 per day; and a rental car cost $100 per day that was used for all eight days. Gary may deduct (disregard CARES Act, SECURE Act, and Stimulus Act):
Answer:
Gary, CPA
Gary may deduct (disregard CARES Act, SECURE Act, and Stimulus Act):
$2,134.
Explanation:
a) Data and Calculations:
Total Expenses:
Business use of trip = $244 ($650 * 3/8)
Trip plane fare = $650
Meals = 1,440 ($180 * 8)
Lodging = 2,800 ($350 * 8)
Rental car = 800 ($100 * 8)
Total expenses $5,690
3 days of expenses = $2,134 ($5,690 * 3/8)
b) Since Gary conducted some business for 3 days during his vacation, he is allowed to allocate his travel expenses between personal and business. Only the business portion of the expenses will be allowed by the IRS as business expenses.
Selected financial data regarding current assets and current liabilities for Queen's Line, a competitor in the cruise line industry, is provided: ($ in millions) Current assets: Cash and cash equivalents $ 410 Current investments 65 Net receivables 204 Inventory 136 Other current assets 145 Total current assets $ 960 Current liabilities: Accounts payable $ 1,032 Short-term debt 744 Other current liabilities 869 Total current liabilities $ 2,645 Required: 1. Calculate the current ratio and the acid-test ratio for Queen's Line. (Enter your answers in millions, not in dollars. For example, $5,500,000 should be entered as 5.5.)
Answer and Explanation:
The calculation of the current ratio and the acid ratio is shown below;
The current ratio is
= Current assets ÷ current liabilities
= $960 ÷ $2,645
= 0.3629 times
The quick ratio is
= Quick assets ÷ current liabilities
Here quick assets is
= Current assets - inventory - other current assets
= $960 - $136 - $145
= $679
So, the quick rato or acid test ratio is
= $679 ÷ $2,645
= 0.2567 times
Finance charges always include which of the following?
a. Mortgage broker fee
b. Title insurance charges
c. Document preparation fees
d. Credit report fee
Answer:
I believe the answer is C: Document Preparation Fees.
Froya Fabrikker A/S of Bergen, Norway, is a small company that manufactures specialty heavy equipment for use in North Sea oil fields. The company uses a job-order costing system and applies manufacturing overhead cost to jobs on the basis of direct labor-hours. Its predetermined overhead rate was based on a cost formula that estimated $380,000 of manufacturing overhead for an estimated allocation base of 1,000 direct labor-hours. The following transactions took place during the year (all purchases and services were acquired on account):
a. Raw materials purchased for use in production, $275,000.
b. Raw materials requisitioned for use in production (all direct materials), $260,000.
c. Utility bills were incurred, $74,000 (95% related to factory operations, and the remainder related to selling and administrative activities).
d. Salary and wage costs were incurred:
Direct labor (1,100 hours) $305,000
Indirect labor $105,000
Selling and administrative salaries $185,000
e. Maintenance costs were incurred in the factory, $69,000.
f. Advertising costs were incurred, $151,000.
g. Depreciation was recorded for the year, $87,000 (80% related to factory equipment, and the remainder related to selling and administrative equipment).
h. Rental cost incurred on buildings, $112,000 (85% related to factory operations, and the remainder related to selling and administrative facilities).
i. Manufacturing overhead cost was applied to jobs.
j. Cost of goods manufactured for the year, $920,000.
k. Sales for the year (all on account) totaled $1,950,000. These goods cost $950,000 according to their job cost sheets.
The balances in the inventory accounts at the beginning of the year were:
Raw materials $45,000
Work in process $36,000
Finished Goods $75,000
Required:
a. Prepare journal entries to record the above data.
b. Post your entries to T-accounts.
c. Prepare a schedule of cost of goods manufactured.
d. Prepare an income statement for the year.
Answer:
Froya Fabrikker A/S of Bergen, Norway
a. Journal Entries
a. Debit Raw materials $275,000
Credit Accounts payable $275,000
To record purchase of raw materials on account.
b. Debit WIP $260,000
Credit Raw materials $260,000
To record materials requisitioned for production.
c. Debit Manufacturing overhead $70,300
Debit Selling and admin. $3,700
Credit Utilities expense $74,000
To close utilities expenses.
d. Debit WIP $305,000
Debit Manufacturing overhead $105,000
Debit Selling and Admin. $185,000
Credit Payroll Expense $595,000
To close payroll expenses.
e. Debit Manufacturing overhead $69,000
Credit Maintenance expense $69,000
To close maintenance expense.
f. Debit Selling and admin. $151,000
Credit Advertising expense $151,000
To close advertising expense.
g. Debit Manufacturing overhead $69,600
Debit Selling and admin. $17,400
Credit Depreciation expense $87,000
To close depreciation expense.
h. Debit Manufacturing overhead $95,200
Debit Selling and admin $16,800
Credit Rent expense $112,000
To close rent expense.
i. Debit WIP $418,000
Credit Manufacturing overhead applied $418,000
To record manufacturing overhead applied to production at $380 for 1,100 direct labor-hours.
j. Debit Finished goods $920,000
Credit WIP $920,000
To transfer completed goods to finished goods inventory.
k. Debit Accounts receivable $1,950,000
Credit Sales revenue $1,950,000
To record sale of goods on account.
Debit Cost of goods sold $950,000
Credit Finished goods $950,000
To record the cost of goods sold.
b. T-accounts
Raw materials
Account Titles Debit Credit
Beginning balance $45,000
Accounts payable 275,000
Work in Process $260,000
Work in process
Account Titles Debit Credit
Beginning balance $36,000
Raw materials 260,000
Payroll expense 305,000
Manufacturing
overhead applied 418,000
Finished goods inventory $920,000
Finished Goods
Account Titles Debit Credit
Beginning balance $75,000
Work in Process 920,000
Cost of goods sold $950,000
Cost of goods sold
Account Titles Debit Credit
Finished goods $950,000
Accounts Payable
Account Titles Debit Credit
Raw materials $275,000
Manufacturing overhead
Account Titles Debit Credit
Utilities expense $70,300
Payroll expense 105,000
Maintenance exp 69,000
Depreciation exp. 69,600
Rent expense 95,200
Work in Process $418,000
Overhead applied 8,900
Sales Revenue
Account Titles Debit Credit
Accounts receivable $1,950,000
Accounts Receivable
Account Titles Debit Credit
Sales revenue $1950,000
Selling and admin.
Utilities expense $3,700
Payroll expense 185,000
Advertising exp. 151,000
Depreciation exp. 17,400
Rent expense 16,800
Utilities Expense
Manufacturing overhead $70,300
Selling and admin. 3,700
Payroll Expense
Work in Process $305,000
Manufacturing overhead 105,000
Selling and admin. 185,000
Maintenance expense
Manufacturing overhead $69,000
Advertising expense
Selling and admin. $151,000
Depreciation expense
Manufacturing overhead $69,600
Selling and admin. 17,400
Rent expense
Manufacturing overhead $95,200
Selling and admin. 16,800
c. Schedule of Cost of Goods Manufactured:
Beginning WIP $36,000
Raw materials 260,000
Payroll expense 305,000
Manufacturing
overhead applied 418,000
Ending WIP (99,000)
Finished goods $920,000
d. Income Statement for the year ended December 31
Sales Revenue $1,950,000
Cost of goods sold 950,000
Gross profit $1,000,000
Selling and Administrative expenses:
Utilities expense $3,700
Payroll expense 185,000
Advertising exp. 151,000
Depreciation exp. 17,400
Rent expense 16,800 $373,900
Net income $626,100
Explanation:
a) Data and Calculations:
Estimated manufacturing overhead = $380,000
Estimated direct labor-hours = 1,000
Actual direct labor-hours = 1,100
Predetermined overhead rate = $380 ($380,000/1,000)
Analysis of Transactions:
a. Raw materials $275,000 Accounts payable $275,000
b. WIP $260,000 Raw materials $260,000
c. Manufacturing overhead (Utility) $70,300 Selling and admin. $3,700 Utilities expense $74,000
d. WIP (direct labor) $305,000 Manufacturing overhead (indirect labor) $105,000 Selling and Admin. $185,000 Payroll Expense $595,000
e. Manufacturing overhead (maintenance) $69,000 Maintenance expense $69,000
f. Selling and admin. $151,000 Advertising expense $151,000
g. Manufacturing overhead $69,600 Selling and admin. $17,400 Depreciation expense $87,000
h. Manufacturing overhead $95,200 Selling and admin $16,800 Rent $112,000
i. WIP $418,000 Manufacturing overhead applied $418,000 ($380 * 1,100)
j. Finished goods $920,000 WIP $920,000
k. Accounts receivable $1,950,000 Sales revenue $1,950,000
Cost of goods sold $950,000 Finished goods $950,000
Beginning balances:
Raw materials $45,000
Work in process $36,000
Finished Goods $75,000