Answer:
42.83%
Explanation:
The computation of the weight of the common stock is shown below
= Common stock ÷ Total capital
= $395,200 ÷ $922,825
= 42.83%
Working note
For Common Stock
= 10,400 shares × $38
= $395,200
For Preferred Stock
= 225 shares × $89
= $20,025
Bonds Outstanding
= 540 Bonds × $1,000 × 94% of par
= $507,600
Now the Total capital is
= $395,200 + $20,025 + $507,600
= $922,825
Miracle Clean's variable costs are $3.00 per bottle and Fixed Expenses are $350,000 per year. The company currently sells 150,000 bottles for $6.50 which results in profit of $175,000. The company is considering raising the selling price to $7.00 per bottle which is expected to decrease sales by 20%. If the price is raised profits are expected to (increase/decrease) by $__________ per year. (Enter the profit increase or decrease as a whole number.)
Answer:
If the company decides to raise the selling price by $0.5, net income will decrease by $45,000
Explanation:
Giving the following information:
Unitary variable cost= $3
Number of units sold= 150,000
Selling price= $6.5
To calculate the effect on income, we need to use the following formula:
Net income= number of units sold*unitary contribution margin - fixed costs
Previous:
Net income= 150,000*3.5 - 350,000
Net income= $175,000
After:
Net income= 120,000*4 - 350,000
Net income= $130,000
Unitary contribution margin= 7 - 3= 4
Number of units sold= 150,000*0.8= 120,000
If the company decides to raise the selling price by $0.5, net income will decrease by $45,000
During 2022, Tamarisk, Inc. reported cash provided by operations of $826000, cash used in investing of $713000, and cash used in financing of $198000. In addition, cash spent on fixed assets during the period was $287000. Average current liabilities were $676000 and average total liabilities were $1785000. No dividends were paid. Based on this information, what was Tamarisk free cash flow? ($628000). $539000. ($150000). $113000.
Answer:
b. $539,000
Explanation:
Free cash flow = Cash flow from operating activities - Capital expenditures
Free cash flow = $826,000 - $287,000
Free cash flow = $539,000
Therefore, based on this information, Tamarisk Inc. free cash flow is $539,000
Question 10 (5 points)
Company policy for internal control should include all of the following except for
which one?
Employees will be rotated.
Monthly bank statements should be sent to and reconciled by the same
employees who authorize payments and write checks.
At time of payment, all supporting invoices or documents will be stamped "paid."
The owner (or responsible employee) signs all checks after receiving
authorization to pay from the departments concerned.
Answer:
Monthly bank statements should be sent to and reconciled by the same employees who authorize payments and write checks
Explanation:
Jennifer is preparing for a conference. For that, she needs to access various websites to secure relevant information on various companies participating in the conference. Which software application will enable her to view the websites of all the companies?
A.
Internet
B.
URL
C.
browser
D.
email
E.
malware
Answer:
C. browser
internet is the software and the browser is the application.
Kylie bought a 7-year, 5,000 par value bond with an annual coupon rate of 7.6% paid semi-annually. She bought the bond with no premium or discount. Calculate the Macaulay duration of this bond with respect to the yield rate on the bond.
Incomplete question. The options read:
a. 5.16
b. 5.35
c. 5.56
d. 5.77
e. 5.99
Answer:
b. 5.35
Explanation:
Remember, we use the Macaulay duration to determine the weighted average time before any bondholder would start to receive their expected bond's cash flows.
Hence, using the formula attached below, we could find the Macaulay duration for this scenario. In the above formula, where:
C= the periodic coupon payment
y= the periodic yield
M= the bond’s maturity value
n= duration of bond in periods.
However, another way to get a solution is to employ an advanced calculator.
Branch Adjustment account is in the nature of :
Real account
O Nominal account
Personal account
>
O None of these
Answer:
B. Nominal Account.
Explanation:
Branch accounting is a system of bookkeeping that uses a system of separate branch accounting. This branch is also known as the operating locations of an organization.
The account which uses branch adjustment accounting is a nominal account. The nominal account is the general ledger account that closes its account at the end of every year, using branch accounting.
Therefore, option B is correct.
Copper Hill Inc. manufactures laser printers within a relevant range of production of 70,000 to 100,000 printers per year. The following partially completed manufacturing cost schedule has been prepared:
Complete the following cost schedule: Round your answers to two decimal places.
Number of Printers Produced 70,000 90,000 100,000 Total costs: Total variable costs $350,000 $fill in the blank 1 $fill in the blank 2 Total fixed costs 630,000 $fill in the blank 3 $fill in the blank 4 Total costs $980,000 $fill in the blank 5 $fill in the blank 6 Cost per unit: Variable cost per unit $fill in the blank 7 $fill in the blank 8 $fill in the blank 9 Fixed cost per unit $fill in the blank 10 $fill in the blank 11 $fill in the blank 12 Total cost per unit $fill in the blank 13 $fill in the blank 14 $fill in the blank 15
Answer:
70,000 90,000 100,000
Total variable costs $350,000 $450,000 $500,000
Total fixed costs $630,000 $630,000 $630,000
Total Costs $980,000 $1,080,000 $1,130,000
variable costs per unit $5 $5 $5
fixed cost costs per unit $9 $7 $6.30
total cost per unit $14 $12 $11.30
Explanation:
Fixed costs are costs that do not vary with output. e,g, rent, mortgage payments
If production is zero or if production is a million, Mortgage payments do not change - it remains the same no matter the level of output.
Hourly wage costs and payments for production inputs are variable costs
Variable costs are costs that vary with production
If a producer decides not to produce any output, there would be no need to hire labour and thus no need to pay hourly wages.
fixed cost would remain the same regardless of the number of output. Fixed cost would be $630,000 for 90,000 and 10,000 unit of output
fixed cost per unit = total fixed cost / output
$630,000 / 70,000 = $9
$630,000 / 90,000 = $7
$630,000 / 100,000 = $6.30
to determine the total variable cost for quantities, 90,000 and 10,000, the average variable cost has to be determined
Average variable cost = total variable cost / output
$350,000 / 70,000 = $5
Average total cost = average fixed cost + average variable cost
total variable cost for output 90,000 = $5 x 90,000 = $450,000
total variable cost for output 100,000 = $5 x 100,000 = $500,000
total cost = total fixed cost + total variable cost
total cost for output 90,000 = $450,000 + $630,000 = $1,080,000
total cost for output 100,000 = $500,000 + $630,000 = $1,130,000
The balance sheets for Plasma Screens Corporation, along with additional information, are provided below:
PLASMA SCREENS CORPORATION
Balance Sheets
December 31, 2021 and 2020
2021 2020
Assets
Current assets:
Cash $ 112,700 $ 131,800
Accounts receivable 81,200 96,000
Inventory 103,000 87,200
Prepaid rent 5,600 2,800
Long-term assets:
Land 520,000 520,000
Equipment 822,000 710,000
Accumulated depreciation (436,000 ) (284,000 )
Total assets $ 1,208,500 $ 1,263,800
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable $ 107,000 $ 92,200
Interest payable 6,900 13,800
Income tax payable 9,600 5,800
Long-term liabilities:
Notes payable 115,000 230,000
Stockholders' equity:
Common stock 740,000 740,000
Retained earnings 230,000 182,000
Total liabilities and stockholders' equity $ 1,208,500 $ 1,263,800
Additional Information for 2021:
Net income is $77,000.
The company purchases $112,000 in equipment.
Depreciation expense is $152,000.
The company repays $115,000 in notes payable.
The company declares and pays a cash dividend of $29,000.
Required:
Prepare the statement of cash flows using the indirect method. (List cash outflows and any decrease in cash as negative amounts.)
Answer:
Plasma Screens Corporation
Statement of Cash Flows for the year ended December 31, 2021
Operating activities:
Net income $77,000
Add Non-cash flows:
Depreciation expense 152,000
Adjusted net operating income $229,000
Changes in working capital:
Accounts receivable 14,800
Inventory -15,800
Prepaid rent -2,800
Accounts payable 14,800
Interest payable -6,900
Income tax payable 3,800
Net operating cash flows $236,900
Investing activities:
Purchase of equipment -$112,000
Financing activities:
Repayment of Notes payable -$115,000
Dividends payment -29,000
Net cash flow from financing -$144,000
Net cash flows -$19,100
Reconciliation of cash:
Beginning Cash balance $131,800
Net cash flows -$19,100
Ending Cash balance $112,700
Explanation:
a) Data and Calculations:
PLASMA SCREENS CORPORATION
Balance Sheets
December 31, 2021 and 2020
2021 2020 Change
Assets
Current assets:
Cash $ 112,700 $131,800 -$19,100
Accounts receivable 81,200 96,000 -14,800
Inventory 103,000 87,200 +15,800
Prepaid rent 5,600 2,800 +2,800
Long-term assets:
Land 520,000 520,000 0
Equipment 822,000 710,000 +112,000
Accumulated depreciation (436,000 ) (284,000) +152,000
Total assets $ 1,208,500 $1,263,800
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable $ 107,000 $ 92,200 +$14,800
Interest payable 6,900 13,800 -6,900
Income tax payable 9,600 5,800 +3,800
Long-term liabilities:
Notes payable 115,000 230,000 -115,000
Stockholders' equity:
Common stock 740,000 740,000 0
Retained earnings 230,000 182,000 +48,000
Total liabilities & stockholders' equity $ 1,208,500 $1,263,800
Additional Information for 2021:
Net income is $77,000.
The company purchases $112,000 in equipment.
Depreciation expense is $152,000.
The company repays $115,000 in notes payable.
The company declares and pays a cash dividend of $29,000
what is jute sacks ?
Explanation:
A burlap sack or gunny sack, also known as a gunny shoe or tow sack, is an inexpensive bag, traditionally made of hessian fabric formed from jute, hemp or other natural fibers. Modern-day versions of these sacks are often made from synthetic fabrics such as polypropylene.
Required information: Analyzing income effects from eliminating departments.
Suresh Co. expects its five departments to yield the following income for next year.
Dept. M Dept. N Dept. O Dept. P Dept. T Total
Sales $66,000 $38,000 $59,000 $45,000 $31,000 $239,000
Expenses
Avoidable 11,300 38,200 23,300 15,500 40,500 128,800
Unavoidable 53,000 14,400 4,500 31,200 11,900 115,000
Total expenses 64,300 52,600 27,800 46,700 52,400 243,800
Net income (loss) $1,700 $(14,600) $31,200 $(1,700) $(21,400) $(4,800)
Re-compute and prepare the departmental income statements (including a combined total column) for the company under each of the following separate scenarios.
1) Management eliminates departments with sales dollars that are less than avoidable expenses.
2) Management eliminates departments with expected net losses.
Answer and Explanation:
The computation and the preparation is presented below:
1.
Particulars Dept. M Dept. N Dept. O Dept. P Dept. T Total
Sales $66,000 $59,000 $45,000 $170,000
Expenses
Avoidable $11,300 $23,300 $15,500 $50,100
Unavoidable $53,000 $14,400 $4,500 $31,200 $11,900 $115,000
Total expense $64,300 $14,400 $27,800 $46,700 $11,900 $165,100
Net income
or loss $1,700 -$14,400 $31,200 -$1,700 -$11,900 $4,900
2.
Particulars Dept. M Dept. N Dept. O Dept. P Dept. T Total
Sales $66,000 $59,000 $125000
Expenses
Avoidable $11,300 $23,300 $34,600
Unavoidable $53,000 $14,400 $4,500 $31,200 $11,900 $115,000
Total expense $64,300 $14,400 $27,800 $31,200 $11,900 $149,600
Net income
or loss $1,700 -$14,400 $31,200 -$31,200 -$11,900 -$24,600
Melissa is a crafting machine! She has used this time in quarantine to finesses her skills and has decided to open up a booth at the Groove Street Farmers Market (Monday’s 4-7pm). She does this for fun but before making her next batch of inventory wants to know which products, she should make to maximize her profit. She makes soaps and candles. The soap sells for $18 and the candles sell for $25. The soap requires coconut oil (2 tablespoons), essential oil (5 drops), and soap base (1 per item). The candles require coconut oil (3 tablespoons), essential oil (8 drops), and wax (1 per item). Coconut oil is $12 a jar and contains 112 tablespoons. Essential oils are $50 a container and contains 150 drops. A soap base is 2$ and a wax base is $2.25. Melissa currently has 3 jars of coconut oil, 2.5 bottles of essential oil, 25 soap bases, and 25 wax bases. If Melissa wants to maximize her profit how many soaps and candles should she make for her next both?
Answer:
The maximum profit of $847.03 occurs when Melissa produces 25 soaps and 25 candles.
Explanation:
The linear programming equations forms as follows:
Cost of producing 1 Soap=Cost of Soap Base+Cost of Coconut Oil+Cost of Essential Oil
Cost of Soap base is $2.
Cost of Coconut Oil for one soap is [tex]\$\dfrac{2}{112}\times12[/tex].
Cost of Essential Oil for one soap is [tex]\$\dfrac{5}{150}\times50[/tex]
So the total cost of 1 soap is
[tex]\text{Cost of producing 1 Soap}=\$2+\$\dfrac{2}{112}\times12+\$\dfrac{5}{150}\times50\\\text{Cost of producing 1 Soap}=\$2+\$0.21428+\$1.6666\\\text{Cost of producing 1 Soap}=\$3.8808[/tex]
So the cost of producing one bar of soap is 3.8808
So the profit per soap is
[tex]\text{Profit}=\text{Selling Price}-\text{Cost}[/tex]
Here selling price is $18 for soap so
[tex]\text{Profit}=\text{Selling Price}-\text{Cost}\\\text{Profit}=\$18-\$3.8808\\\text{Profit}=\$14.1192[/tex]
Profit per soap is $14.1192.
Similarly the cost of producing 1 candle is as follows:
Cost of producing 1 Candle=Cost of Wax Base+Cost of Coconut Oil+Cost of Essential Oil
Cost of Wax base is $2.25.
Cost of Coconut Oil for one candle is [tex]\$\dfrac{3}{112}\times12[/tex].
Cost of Essential Oil for one candle is [tex]\$\dfrac{8}{150}\times50[/tex]
So the total cost of 1 candle is
[tex]\text{Cost of producing 1 Candle}=\$2.25+\$\dfrac{3}{112}\times12+\$\dfrac{8}{150}\times50\\\text{Cost of producing 1 Candle}=\$2.25+\$0.32142+\$2.6666\\\text{Cost of producing 1 Candle}=\$5.2380[/tex]
So the cost of producing one candle is $35.2380
So the profit per candle is
[tex]\text{Profit}=\text{Selling Price}-\text{Cost}[/tex]
Here selling price is $25 for a candle so
[tex]\text{Profit}=\text{Selling Price}-\text{Cost}\\\text{Profit}=\$25-\$5.2380\\\text{Profit}=\$19.7620[/tex]
Profit per candle is $19.7620.
If the number of soaps produced is X and the number of candles produced is Y then the maximization function of profit is given as
[tex]Z=f(X,Y)=14.1192X+19.7620Y[/tex]
Also the constraints are given as follows:
If Melissa has 3 jars of coconut oil and each jar has 112 tablespoons thus the total tablespoons Melissa has are 336. If 2 tablespoon coconut oil is used for 1 soap and 3 tablespoons are used for 1 candle thus
[tex]2X+3Y\leq336[/tex]
Similarly, Melissa has 2.5 containers of essential oil and each container has 150 drops thus the total drops Melissa has are 375. If 5 drops of essential oil are used for 1 soap and 8 drops are used for 1 candle thus
[tex]5X+8Y\leq375[/tex]
For the soap bases, each soap uses 1 soap bases and total soap bases are 25 thus
[tex]X\leq25[/tex]
Similarly, for the wax base, each candle uses 1 wax base, and the total wax bases are 25 thus.
[tex]Y\leq25[/tex]
So the linear programming model becomes
[tex]2X+3Y\leq336\\5X+8Y\leq375\\X\leq25\\Y\leq25[/tex]
with maximization of
[tex]Z=f(X,Y)=14.1192X+19.7620Y[/tex]
Now solving this using the graphical method of linear programming as attached gives:
The maximum profit of 847.03 occur when Melissa produces 25 soaps and 25 candles.
According to supporters of globalization,
a.
Free trade encourages countries to be economically independent.
b.
Free trade will result in countries specializing in the production of those goods and services they can produce most efficiently.
c.
The costs of free trade outweigh the benefits.
d.
The dislocation of jobs resulting from free trade can be avoided by increasing domestic wages.
e.
The labor supply is easily controlled on a global basis.
Answer:
According to supporters of globalization,
b.
Free trade will result in countries specializing in the production of those goods and services they can produce most efficiently.
Explanation:
Globalization has been described as a phenomenon that encourages increased interaction and integration of peoples, companies, and governments from different backgrounds. This phenomenon or process is propelled by free international trade and investments. The emerging advances in information technology has made globalization possible.
Which of the following best describes the type of loss covered by the Spoilage Damage insuring agreement of the ISO Equipment Breakdown Protection Coverage Form? A. The spoilage of perishable goods resulting from breakdown of covered equipment. B. Costs to replace food labels resulting from breakdown of refrigeration equipment.
Answer:
A. The spoilage of perishable goods resulting from breakdown of covered equipment.
Explanation:
The ISO Equipment Breakdown Protection Coverage is used to compensate for losses that occur as a result of equipment breakdown. The cost covered by this type of insurance includes cost of repair of the equipment that failed along with the replacement not any property damaged as a result of equipment failure.
So when perishable goods get damaged because of breakdown of covered equipment, the ISO Equipment Breakdown Protection Coverage will cover for the loss
A business operated at 100% of capacity during its first month and incurred the following costs: Production costs (20,000 units): Direct materials $180,000 Direct labor 240,000 Variable factory overhead 280,000 Operating expenses: Variable operating expenses $130,000 Fixed operating expenses 50,000 180,000 If 1,600 units remain unsold at the end of the month, the amount of inventory that would be reported on the variable costing balance sheet is a.$66,400 b.$64,000 c.$78,400 d.$56,000
Answer:
d.$56,000
Explanation:
The computation of the amount of inventory that would be reported on the variable costing balance sheet is shown below:
But before that following calculations need to be done
The total production cost
= Direct material + direct labor + variable factory overhead
= $180,000 + $240,000 + $280,000
= $700,000
Now the production cost per unit is
= $700,000 ÷ 20,000 units
= $35 per unit
Now the amount of inventory is
= 1,600 units × $35 per unit
= $56,000
Those who believe in
monetarism look to all of the
following as a way to raise or
lower the money supply
EXCEPT which one?
A. Place taxes on humanitarian aid.
B. Let the "invisible hand" decide things.
C. The government can change the reserve
ratio.
D. Allow for more governmental securities.
Answer:
C. The government can change the reserve
ratio.
Scott Bestor is an accountant for Westfield Company. Early this year, Scott made a highly favorable projection of sales and profits over the next 3 years for Westfield's hot-selling computer PLEX. As a result of the projections Scott presented to senior management, the company decided to expand production in this area. This decision led to dislocations of some plant personnel who were reassigned to one of the company's newer plants in another state. However, no one was fired, and in fact the company expanded its workforce slightly. Unfortunately, Scott rechecked his projection computations a few months later and found that he had made an error that would have reduced his projections substantially. Luckily, sales of PLEX have exceeded projections so far, and management is satisfied with its decision. Scott, however, is not sure what to do. Should he confess his honest mistake and jeopardize his possible promotion
Answer:
Scott Bestor should confess his honest mistake.
Explanation:
Two of most important attributes that are required from an accountant are integrity and trustworthiness.
Refusing to tell the management his honest mistake in order not jeopardize his possible promotion is a short-run gain to him. But confessing his honest mistake has a long run gain as this will preserve his integrity and trustworthiness forever. In addition, it is unethical and a sign of disloyalty for an accountant not to disclose all the information relevant to the company based on his position as an account.
Therefore, Scott Bestor should confess his honest mistake rather than sacrificing his integrity and trustworthiness as well as the ethic of his profession for a short-term gain (i.e. promotion).
Direct labor or machine hours may not be the appropriate cost driver for overhead in all areas of manufacturing due to the complexities of many manufacturing processes. Many companies use activity-based costing (ABC) which uses multiple drivers (items that consume resources) rather than just one driver to apply overhead to their activities. With ABC, a company can use a cost driver that has a direct cause/effect relationship in its applied overhead costs.
Waterways looked into ABC as a method of costing because of the variety of items it produces and the many different activities in which it is involved. The activities listed below area sample of possible cost pools for Waterways.
Assembling Payroll
Billing Plant supervision
Digging trenches Product design
Janitorial Purchasing materials
Machine maintenance Selling
Machine setups Testing
Molding Welding
Packaging
Using the following information, determine the overhead rates and the actual cost assigned for each of the activity cost pools in a possible ABC system for Waterways.
WATERWAYS CORPORATION
Activity Cost Estimated Expected Use
Pools Cost Drivers Overhead of Cost Drivers Actual Use
per Activity of Drivers
Irrigation
installation Labor cost $1,928,440 13,030 13,010
Machining (all
machine use) Machine hours 1,668,750 33,375,000 33,376,000
Customer
orders Number of
orders 28,600 2,600 2,562
Shipping none (direct) N/A N/A traced directly
Design Cost per design 763 7 6
Selling Number of sales
calls 306,000 20,400 20,610
How would you classify each of the following activities by level-unit level, batch level, product level, or facility level?
Testing of products (if all items are tested)
Testing of products (if all items are not tested)
Designing new products
Packaging
Molding
Assembling
Depreciation
Machine maintenance
Advertising
Equipment setups
Electricity required to run equipment
Requisitioning materials
Answer:
WATERWAYS CORPORATION
1. Overhead Rates and Actual Cost
Activity Cost Activity-based Actual Cost
Pools Overhead Rates Assigned
Irrigation Installation $148 ($1,928,440/13,030) $1,925,480 ($148 * 13,010)
Machining $0.05 $1,668,800
(all machine use) ($1,668,750/33,375,000) ($0.05 * 33,376,000)
Customer Orders $11 ($28,600/2,600) $28,182 ($11 * 2,562)
Design $109 ($763/7) $654 ($109 * 6)
Selling $15 ($306,000/20,400) $309,150 ($15 * 20,610)
2. Classification of activities by level, unit level, batch level, product level, or facility level:
Testing of products (if all items are tested) Unit level
Testing of products (if all items are not tested) Batch level
Designing new products Product level
Packaging Unit level
Molding Product level
Assembling Batch level
Depreciation Facility level
Machine maintenance Facility level
Advertising Product level
Equipment setups Batch level
Electricity required to run equipment Unit level
Requisitioning materials Unit level
Explanation:
a) Data and Calculations:
ABC system for Waterways.
WATERWAYS CORPORATION
Activity Cost Estimated Expected Use
Pools Cost Drivers Overhead of Cost Drivers Actual Use
per Activity of Drivers
Irrigation Installation Labor cost $1,928,440 13,030 13,010
Machining
(all machine use) Machine hours 1,668,750 33,375,000 33,376,000
Customer orders Number of orders 28,600 2,600 2,562
Shipping none (direct) N/A N/A traced directly
Design Cost per design 763 7 6
Selling Number of sales calls 306,000 20,400 20,610
Which type of market
buys goods and
services to produce
public services or to
transfer them to others
who need them?
a.
retail
b.
consumer
C.
government
d.
wholesaler
government i think correct me if im rwong l
Imagine that the market supply of peaches comes from Georgia (GA) and South Carolina (SC). The supply schedule below shows the quantity of peaches supplied in each state at each price.
Individual and Market Supply of Peaches
Quantity of Peaches Supplied (pounds)
Price (dollars per pound) GA SC Market
$10 20,000 18,000 ?
8 16,000 15,000 ?
6 12,000 12,000 ?
4 8,000 9,000 ?
2 4,000 6,000 ?
Required:
a. Complete the column labeled "Market."
b. The quantity of peaches supplied to the market at a price of $6 per pound is pounds.
Answer:
a. Completion of the column labeled "Market:"
Quantity of Peaches Supplied (pounds)
Price (dollars
per pound) GA SC Market
$10 20,000 18,000 38,000
8 16,000 15,000 31,000
6 12,000 12,000 24,000
4 8,000 9,000 17,000
2 4,000 6,000 10,000
b. The quantity of peaches supplied to the market at a price of $6 per pound is 24,000 pounds.
Explanation:
a) Data and Calculations:
Individual and Market Supply of Peaches
Quantity of Peaches Supplied (pounds)
Price (dollars
per pound) GA SC Market
$10 20,000 18,000 ?
8 16,000 15,000 ?
6 12,000 12,000 ?
4 8,000 9,000 ?
2 4,000 6,000 ?
Quantity of Peaches Supplied (pounds)
Price (dollars
per pound) GA SC Market (GA + SC)
$10 20,000 18,000 38,000 (20,000 + 18,000)
8 16,000 15,000 31,000 (16,000 + 15,000)
6 12,000 12,000 24,000 (12,000 + 12,000)
4 8,000 9,000 17,000 (8,000 + 9,000)
2 4,000 6,000 10,000 (4,000 + 6,000)
On January 1, 2019, the stockholders' equity section of Green Mountains Corporation's balance sheet reported the following: Common stock, par $1, authorized 100,000 shares, issued 10,000 shares $10,000 Additional paid-in capital 150,000 Retained earnings 160,000 During 2019, the following selected transactions occurred (assume they occurred in the order given):
April 1 Issued a 10% stock dividend when the market price was $20. The stock dividend is considered small.
May 1 200 shares of treasury stock were purchased at $18 per share.
September 1 Announced 2 for 1 stock split
December 1 Declared and paid a cash dividend of $0.5 per share.
Required: Journalize all the transactions listed above for equity during 2019.
Answer:
Date Account Titles and Explanation Debit Credit
Apr 1 Retained earnings $20,000
[10000*10%]*$20
To common stock $1,000
{1000*$1]
To additional Paid-in-capital $19,000
-Common stock [1000*(20-1)
(To record stock dividends)
May 1 Cash $3,600
(200*$18)
To treasury stock $3,600
(To record purchase of treasury stock)
Sept 1 No entry
Dec 1 Retained earnings $10,800
[(10000+1000-200)*2]*$0.5
To cash $10,800
(To record declaration and payment of cash dividends)
At the beginning of his current tax year, David invests $13,410 in original issue U.S. Treasury bonds with a $10,000 face value that mature in exactly 25 years. David receives $540 in interest ($270 every six months) from the Treasury bonds during the current year, and the yield to maturity on the bonds is 3.4 percent. (Round your intermediate calculations to the nearest whole dollar amount.) a. How much interest income will he report this year if he elects to amortize the bond premium
Answer:
The amount of income that David will report this year if he elects to amortize the bond premium is $455.94.
Explanation:
This can be calculated as follows:
Interest income = Carrying value of the bond * Yield to maturity…………….. (1)
Where;
Carrying value of the bond = $13,410
Yield to maturity = 3.4%
Substituting the values into equation (1), we have:
Interest income = $13,410 * 3.4% = $455.94
Therefore, the amount of income that David will report this year if he elects to amortize the bond premium is $455.94.
Matthew is the CEO of an international company. He oversees business operations in eleven countries across the globe. Which information system will he use to make strategic decisions about his company as per the four-level pyramid model?
A.
decision support system
B.
executive information system
C.
transaction processing system
D.
office support system
E.
management information system
Answer:
D. Executive Information System
Grant and Marvin organized a new business as a corporation in which they own equal interests. The new business generated a $65,000 operating loss for the year. Use Appendix A. Required: Assume the corporation expects to generate $500,000 of income next year and has a 21 percent tax rate. Calculate the net present value of the future tax savings associated with the current year operating loss, using a 4 percent discount rate. (Do not round intermediate computations. Round your final answer to the nearest whole dollar amount.)
Answer:
The net present value of the future tax savings associated with the current year operating loss is:
= $13,650.
Explanation:
a) Data and Calculations:
Operating loss for the current year = $65,000
Expected income next year = $500,000
Income tax rate = 21%
N (# of periods) 1
I/Y (Interest per year) 4
PMT (Periodic Payment) 0
FV (Future Value) 500000
Results
PV = $480,769.23
Total Interest $19,230.77
Tax = $480,769.23 * 21%
= $100,961.53
Tax = ($480,769.23 - 65,000) * 21%
= $415,769.23 * 21%
= $87,311.53
Tax savings = $13,650 ($100,961.53 - 87,311.53)
or $65,000 * 21%
= $13,650
The net present value of the future tax savings associated with the current year operating loss will be $13650.
Based on the information given, one has to calculate the tax for both periods, this will be:
First tax = $489769.23 × 21%
= $100961.53.
The second tax will be:
= ($480769.23 - $65000) × 21%
= $87311.53
Therefore, the tax savings will be:
= $100961.53 - $87311.53
= $13650
Therefore, the net present value of the future tax savings is $13650.
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"Situation where you have a personal budget for the year 2021 with Revenues of $20,000 and Expenses of $18,000. On July 1, 2021 two friends come to live with you and pay you $1,000/month in rent. They add $800 a month in expenses. What are your flexible budget expenses for 2021"
Answer:
$22,800
Explanation:
Flexible budget expenses = $18,000 + ($800 * 6 months)
Flexible budget expenses = $18,000 + $4,800
Flexible budget expenses = $22,800
So, the flexible budget expenses for 2021 is $22,800
During the current year, the company purchased equipment for $212,000 on October 1. It is estimated the equipment will have a useful life of 8 years and a salvage value of $12,000. Estimated production is 40,000 units and estimated working hours are 20,000. During the current year, the company uses the equipment for 525 hours and the equipment produced 1,000 unites. The company uses December 31 as its fiscal year end.
Part 1: For the current year, compute depreciation expense using the straight-line method.
Part 2: For the current year, compute depreciation expense using the activity method (units of output).
Part 3: For the current year, compute depreciation expense using the activity method (working hours).
Answer:
$6250
$5000
$5250
Explanation:
Straight line depreciation expense = (Cost of asset - Salvage value) / useful life
($212,000 - $12,000) / 8 = $25,000
The machine was used for only 3 months in the fiscal year. Thus, the depreciation expense = $25,000 x (3/12) = $6250
Activity method based on output = (output produced that year / total output of the machine) x (Cost of asset - Salvage value)
(1000 / 40,000) x ($212,000 - $12,000) = $5000
Activity method based on hours worked = (hours worked that year / total hours of the machine) x (Cost of asset - Salvage value)
($212,000 - $12,000) x (525 / 20,0000) = $5250
On September 15, 2021, the Scottie Company board of directors declared a 8% stock dividend on common shares. The shares are to be distributed on October 10, 2021, to shareholders of record on October 1, 2021. The market price per share on the date of declaration was $24.4 while the market price on the date of distribution was $26.4. The common stock has a par of $5 per share and there were 1,200,000 shares outstanding prior to the declaration of the stock dividend.
Required:
Prepare any necessary journal entries to record the above transactions. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) View transaction list Journal entry worksheet 2 3 Record declaration of common stock dividend. Note: Enter debits before credits. General Journal Debit Credit Date September 15, 2021 Record entry View general Journal Clear entry
Answer:
Date General Journal Debit Credit
Sept 15 Stock dividend $2,342,400
(1,200,000*8%*24.4)
Common Stock dividend distributable $480,000
(1,200,000*8%*5)
Paid in capital in excess of par- $1,862,400
Common Stock
Oct 1 No Journal entry
Oct 10 Common Stock dividend $480,000
distributable
Common Stock $480,000
how market forces would act to return the market to state of equilibrium at the new equilibrium position.
Answer:
market forces would shift upwards or downwards
Explanation:
during a situation of high demand, supply would shift to the right in order to achieve more sales or in a situation of high supply the demand can be shifted to the right by decreasing prices. At low supply demand can be shifted leftwards by increasing prices and when demand is lower, supply falls due to lower sales
Market factors would change to the upside or downside would act to return the market to state of equilibrium at the new equilibrium position.
What do you mean by equilibrium?When economic forces are in balance, there is said to be an economic equilibrium. In the absence of outside influences, economic variables essentially hold true to their equilibrium levels. Market equilibrium and economic equilibrium are two different concepts.
The set of economic factors that the economy is normally driven toward by supply and demand and other conventional economic processes is known as economic equilibrium.
The concept of economic equilibrium can also be used to describe a wide range of elements, including interest rates or overall consumer spending.
The point of equilibrium denotes a theoretical state of rest where all economic activities that "should" occur have actually happened, given the initial conditions of all significant economic variables.
Economists who think of economic processes as akin to physical phenomena like velocity, friction, heat, or fluid pressure draw the notion of equilibrium from the physical sciences. Nothing else changes once a system's physical forces are in equilibrium.
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Depletion Entries Alaska Mining Co. acquired mineral rights for $67,500,000. The mineral deposit is estimated at 30,000,000 tons. During the current year, 4,000,000 tons were mined and sold. a. Determine the amount of depletion expense for the current year. Round the depletion rate to two decimal places. $fill in the blank ed11a103ff82045_1 b. Journalize the adjusting entry on December 31 to recognize the depletion expense. If an amount box does not require an entry, leave it blank. Dec. 31 fill in the blank 396e8209705d02e_2 fill in the blank 396e8209705d02e_3 fill in the blank 396e8209705d02e_5 fill in the blank 396e8209705d02e_6
Answer: See explanation
Explanation:
a. Determine the amount of depletion expense for the current year.
First, we've to calculate the depletion rate per unit which will be:
= $67,500,000 / 30,000,000
= $2.25
Then, the depletion expense will be:
= $2.25 × 4,000,000
= $9,000,000
b. Journalize the adjusting entry on December 31 to recognize the depletion expense.
Debit Depletion expense $9,000,000
Credit Accumulated depreciation $9,000,000
(Being depletion of 4,000,000 tons)
During year 3, Orca Corp. decided to change from the FIFO method of inventory valuation to the weighted-average method. Inventory balances under each method were as follows: FIFO Weighted-average January 1, year 3 $71,000 $77,000 December 31, year 3 $79,000 $83,000 Orca's income tax rate is 30%. In its year 3 financial statements, what amount should Orca report as the gain or loss on the cumulative effect of this accounting change
Answer:
$0
Explanation:
Since the inventory method changes that means there is no cumulative effect treatment to be done on the income statement. Rather this, the change in the accounting is mentioned, so the retrospective application to the early period would be presented
So neither there would be gain nor loss for this change in the accounting
Hence, the answer should be zero
Gelb Company currently manufactures 47,000 units per year of a key component for its manufacturing process. Variable costs are $6.25 per unit, fixed costs related to making this component are $85,000 per year, and allocated fixed costs are $84,500 per year. The allocated fixed costs are unavoidable whether the company makes or buys this component. The company is considering buying this component from a supplier for $3.70 per unit. Calculate the total incremental cost of making 47,000 units and buying 47,000 units. Should it continue to manufacture the component, or should it buy this component from the outside supplier
Answer:
Gelb Company
1. The total incremental cost of making and buying 47,000 units is:
= $204,850.
2. Gelb should buy this component from the outside supplier. It is far cost-effective.
Explanation:
a) Data and Calculations:
Required quantity of key component per year = 47,000 units
Variable costs per unit = $6.25
Avoidable fixed costs per year = $85,000
Unavoidable fixed costs per year = $84,500
Purchase price of component from outside supplier = $3.70 per unit
Incremental cost of making or buying the 47,000 units:
Make Buy Incremental Costs
Variable costs $293,750 $173,900 $119,850
Avoidable fixed costs 85,000 0 85,000
Total relevant costs $378,750 $173,900 $204,850