Answer: 13.57%
Explanation:
Weighted Average Cost of Capital (WACC) as implied, takes a weighted average of the various costs of acquiring capital in the form of equity and loans.
Cost of Preferred stock:
= Dividend / Floatation adjusted price
= (0.12 * 100) / (100 * (1 - 5%))
= 12 / 95
= 12.63%
Cost of debt:
Bond is selling at $1,000 which is par value. This means that Coupon rate of 12% is also Yield.
Yield has to be adjusted for tax as interest is tax deductible:
= 12% * ( 1 - 40%)
= 7.2%
Cost of Common Equity:
Price = Next dividend / (Cost - growth rate)
27 = (2 * (1 + 8%)) / (Cost - 8%)
(Cost - 8%) * 27 = 2.16
Cost - 8% = 2.16 / 27
Cost = 8% + 8%
Cost = 16%
WACC = Weight of debt * After tax cost of debt + Weight of Preferred stock * Cost of preferred stock + Weight of Common stock * Cost of common stock
= 20% * 7.2% + 20% * 12.63% + 60% * 16%
= 13.57%
Crazy Mountain Outfitters Co., an outfitter store for fishing treks, prepared the following unadjusted trial balance at the end of its first year of operations:
Crazy Mountain Outfitters Co. Unadjusted Trial Balance April 30, 20Y5
Debit Balances Credit Balances
Cash 12,110
Accounts Receivable 80,410
Supplies 19,380
Equipment 407,380
Accounts Payable 18,890
Unearned Fees 21,310
Common Stock 55,000
Retained Earnings 225,000
Dividends 15,990
Fees Earned 484,400
Wages Expense 112,380
Rent Expense 85,740
Utilities Expense 61,520
Miscellaneous Expense 9,690
804,600 804,600
For preparing the adjusting entries, the following data were assembled:
Required:
Supplies on hand on April 30 were $7,160.
Fees earned but unbilled on April 30 were $8,770.
Depreciation of equipment was estimated to be $12,110 for the year.
Unpaid wages accrued on April 30 were $1,550.
The balance in unearned fees represented the April 1 receipt in advance for services to be provided. Only $16,830 of the services was provided between April 1 and April 30.
a. Determine the revenues, expenses, and net income of Crazy Mountain Outfitters Co. before the adjusting entries.
b. Determine the revenues, expenses, and net income of Crazy Mountain Outfitters Co. after the adjusting entries.
c. Determine the effect of the adjusting entries on Retained Earnings.
Answer:
Crazy Mountain Outfitters Co.
a. Income Statement before Adjusting Entries:
Fees Earned 484,400
Wages Expense 112,380
Rent Expense 85,740
Utilities Expense 61,520
Miscellaneous Expense 9,690 269,330
Net Income 215,070
b. Income Statement after adjustments:
Fees Earned 510,000
Wages Expense 113,930
Rent Expense 85,740
Utilities Expense 61,520
Supplies Expense 12,220
Depreciation expense 12,110
Miscellaneous Expense 9,690 295,210
Net Income 214,790
c. The effect of the adjusting entries on Retained Earnings:
Retained earnings per unadjusted trial balance $225,000
Net income after adjusting entries 214,790
Ending Retained earnings after adjusting entries $439,790
Ending Retained earnings before adjusting entries 440,070 (225,000 + 215,070)
Difference in the Retained earnings = $280
Explanation:
a) Data and Calculations:
Crazy Mountain Outfitters Co.
Unadjusted Trial Balance April 30, 20Y5
Debit Credit
Cash 12,110
Accounts Receivable 80,410
Supplies 19,380
Equipment 407,380
Accounts Payable 18,890
Unearned Fees 21,310
Common Stock 55,000
Retained Earnings 225,000
Dividends 15,990
Fees Earned 484,400
Wages Expense 112,380
Rent Expense 85,740
Utilities Expense 61,520
Miscellaneous Expense 9,690
Totals 804,600 804,600
b) Analysis:
1. Supplies Expense $12,220 Supplies $12,220 ($19,380 - $7,160)
2. Accounts receivable $8,770 Fees earned $8,770
3. Depreciation expense $12,110 Accumulated Depreciation $12,110
4. Wages Expense $1,550 Wages Payable $1,550
5. Unearned Fees $16,830 Fees earned $16,830
After Adjusting Entries:
Fees Earned = 510,000 (484,400 + 8,770 + 16,830)
Wages Expense = 113,930 (112,380 + 1,550)
Rent Expense 85,740
Utilities Expense 61,520
Supplies Expense 12,220 (0 + 12,220)
Depreciation expense 12,110 (0 + 12,110)
Miscellaneous Expense 9,690 295,210
QS 8-7 Computing revised depreciation LO C2 On January 1, the Matthews Band pays $65,200 for sound equipment. The band estimates it will use this equipment for five years and after five years it can sell the equipment for $2,000. Matthews Band uses straight-line depreciation but realizes at the start of the second year that this equipment will last only a total of three years. The salvage value is not changed. Compute the revised depreciation for both the second and third years.
Answer:
$25,280 per year
Explanation:
The computation of the revised depreciation for both the second and third years is shown below:
But before that following calculations need to be done
Depreciation for year 1 = [Cost – Salvage Value] ÷Useful Life
= [$65,200 - 2,000] ÷ 5 Years
= $12,640
Now Book Value at point of revision is
= Cost - First year depreciation
= $65,200 - $12,640
= $52,560
Now
Remaining Depreciable Cost = Book Value at the point of revision - Salvage Value
= $52,560 – 2,000
= $50,560
And, finally Depreciation per year for Year 2 and 3 is
= Depreciable cost / Remaining useful life
= $50,560 ÷ 2 Year
= $25,280 per year
Climate is based on the way people in the organization view all of the following except _____ .
the organization's formal and informal training programs
the organization's formal and informal policies
the organization's formal and informal practices
the organization's formal and informal procedures
Answer:
the organization's formal and informal practices
Explanation:
Answer:
c: The organization's formal and informal practices
Assume the firms operating in an oligopolistic market experience a relatively small change in marginal costs. According to the kinked demand curve model this would: A) cause a large change in the profit-maximizing level of output. B) leave the equilibrium price unchanged. C) cause the profit-maximizing level of output to change by the same amount and in the same direction. D) cause the profit-maximizing price to change by the same amount but in the opposite direction.
Answer:
B) Leave the equilibrium price unchanged.
Explanation:
Oligopolistic market is the arrangement where few companies offer same product to the customers. There is very less competition in the market so every supplier has fair chance for operating their business successfully. The kinked demand model curve in oligopolistic market would leave the equilibrium price unchanged.
Suppose two factors are identified for the U.S. economy: the growth rate of industrial production, IP, and the inflation rate, IR. IP is expected to be 4% and IR 6%. A stock with a beta of 1 on IP and 0.7 on IT currently is expected to provide a rate of return of 12%. If industrial production actually grows by 5%, while the inflation rate turns out to be 8%, what will be your expected rate of return on the stock, given the new information about the industrial production rate and the inflation rate
Answer:
14.4%
Explanation:
Calculation for what will be your expected rate of return on the stock.
Expected rate of return on the stock=12% + 1(5%-4%) + .7(8%-6%)
Expected rate of return on the stock=12%+1(1%)+.7(2%)
Expected rate of return on the stock=12%+1%+1.4%
Expected rate of return on the stock=14.4%
Therefore your expected rate of return on the stock is 14.4%
what is Asset-Backed Security? in your own words.
Explanation:
Well, an asset banked security is a security whose income payments and hence value & derived from AND collateralized by specified pool of underlying assets, the pool assets is typically a group of small & illiquid assets which are unable to be sold individually.
if that makes any sense, hope it helps
Nancy, the owner of a very successful hotel chain in the Southeast, is exploring the possibility of expanding the chain into a city in the Northeast. She incurs $35,000 of expenses associated with this investigation. Based on the regulatory environment for hotels in the city, she decides not to expand. During the year, she also investigates opening a restaurant that will be part of a national restaurant chain. Her expenses for this are $53,000. The restaurant begins operations on September 1.
Determine the amount Nancy can deduct in the current year for investigating these two businesses.
Answer:
$3,133.
As regard to opening a restaurant, investigation expense = 53,000 - 2000 = $51,000.
Explanation:
Before diving straight into the solution to this problem, let's take out some of the parameters given in the question above.
=> Nancy incurs $35,000 of expenses associated with the investigation of the possibility of expanding the chain into a city in the Northeast.
=> Nancy expenses for investigates opening a restaurant that will be part of a national restaurant chain are $53,000.
The first thing to do right now is to determine the value for the investigation as regard to the opening of a restaurant = [ 2000 × (51,000/180 months) × 4] = $3,133.
The next thing is to determine the value for the deduction which is available. This can be done below as:
The amount Nancy can deduct in the current year for investigating these two businesses = 5000 - [ 53000 - 50000] = $2, 000
As regard to opening a restaurant, investigation expense = 53,000 - 2000 = $51,000.
Bob is a farmer and is required to use the accrual method. At the beginning of the year, Bob has inventory, including livestock held for resale, amounting to $10,000. During the year, Bob purchased livestock totaling $3,000. Bob's ending inventory was $4,000. Bob's net sales for the year totaled $17,000. What is Bob's gross profit for the current year
Answer:
$3,000
Explanation:
Gross Profit = Sales - Cost of Sales
Prepare a Trading Account for Bob to determine gross profit.
Job interviews can change your life. They can also be stressful, but if you learn about the process and prepare yourself ahead of time, you will feel more relaxed. Adequately understanding the interview process, its purpose, and its types will help you prepare for an interview. Preparing for an interview can greatly improve your chances of getting the job.
An interview helps__________
Answer:
Employment interviews will persuade almost every applicant of client potential. A further description is provided below.
Explanation:
A dialogue somewhere between a prospective employer and a somewhat job seeker or is considered as a Job interview. A career interesting interview to further decide however if a candidate or a job seeker is eligible for a corporate job or not.It could perhaps become an influential tactic if the person interviewed anything other than that doesn't have reliable details.How much time is involved in an electrician?
Answer:
Maintenance electricians usually have regular work which they complete in a typical 40-hour week. Most keep regular business hours on weekdays and don't usually work on weekends, public holidays, or late at night. Some electricians work on-call and put in extra hours to troubleshoot urgent problems.Sep 20, 2017
Explanation:
Choose a real or made up example of a company, and describe at least three variable costs the company has.
Bond X is a premium bond making semiannual payments. The bond has a coupon rate of 9.2%, a YTM of 7.2%, and has 17 years to maturity. Bond Y is a discount bond making semiannual payments. This bond has a coupon rate of 7.2%, a YTM of 9.2%, and also has 17 years to maturity. Assume the interest rates remain unchanged and both bonds have a par value of $1,000.
1. What are the prices of these bonds today?
2. What do you expect the prices of these bonds to be in one year?
3. What do you expect the prices of these bonds to be in three years?
4. What do you expect the prices of these bonds to be in eight years?
5. What do you expect the prices of these bonds to be in 12 years?
6. What do you expect the prices of these bonds to be in 17 years?
Answer:
I used an Excel spreadsheet to calculate the answers (see attached file):
1. What are the prices of these bonds today?
bond X = $1,194
bond Y = $830
2. What do you expect the prices of these bonds to be in one year?
bond X = $1,194
bond Y = $830
3. What do you expect the prices of these bonds to be in three years?
bond X = $1,175
bond Y = $844
4. What do you expect the prices of these bonds to be in eight years?
bond X = $1,131
bond Y = $879
5. What do you expect the prices of these bonds to be in 12 years?
bond X = $1,083
bond Y = $921
6. What do you expect the prices of these bonds to be in 17 years?
bond X = $1,046
bond Y = $1,036
describe the advantages and disadvantages of using a certificate of deposit (cd) to save money.
Explanation:
Advantages of a CD
Flexible Terms: The terms and the amounts that can be deposited into a CD are flexible. If you are not willing to tie up your money for a long time, you can easily opt for a shorter term. At the end of a CD term, you can renew that CD or start a new one.
Safety: CDs that are available from a federally insured institution are generally insured up to $250,000. This takes much of the risk out of the investment.
Better Return Than Saving Accounts: Since the CD holder is not allowed to withdraw money freely like savings account holders, a CD is often more valuable to the financial institution. For this reason, the interest rate offered to a CD holder is higher than a traditional savings account.
Wide Selection: You can get a CD at various maturities and terms from different financial institutions. Because of the diversity of CDs, investors can find a CD that meets their individual needs.
Fixed, Predictable Return: The investor can be sure about getting a specific yield at a specific time. Even if the interest rates come down to a broader economy, the CD rate will remain constant. You will be able to easily determine the rate at which your balance will grow, thus making financial planning easy.
Disadvantages of a CD
Limited Liquidity: The owner of a CD cannot access their money as easily as a traditional savings account. To withdrawal money from a CD before the end of the term requires that a penalty has to be paid. This penalty can be in the form of lost interest or a principal penalty. To increase flexibility, the investor can create a CD Ladder, which is composed of CDs with different maturity dates and terms. With a laddering strategy, you have more options to access your CD savings at different intervals of time.
Inflation Risk: CD rates may be lower than the rate of inflation. This means that your money may lose its purchasing power over time if interest gains are outdone by inflation rates.
With these advantages and disadvantages in mind, it is wise to consider that CD advantages usually outweigh the disadvantages. CDs allow you to grow your savings without hassle. You can easily compare different types of CDs with the help of online resources, and you can find one that best suits your needs.
Summary of Certificates of Deposits
Certificates of Deposit (CD) are useful for people looking for a way to save money while earning a relatively high interest. This not only helps you save money, but also earns you interest without requiring any effort on your part. The disadvantages of CD’s are minor and typically outweighed by their
Income Statement Wayne Corporation had the following revenue and expense account balances (in millions) for a recent year ending May 31:
Depreciation Expense $925
Fuel Expense 3,228
Maintenance and Repairs Expense 1,573
Other Expense 4,995
Provision for Income Taxes 805
Purchased Transportation 1,203
Rentals and Landing Fees 1,748
Revenues 24,698
Salaries and Employee Benefits 8,815
Prepare an income statement.
Answer:
Income Statement
Revenue $24,698
Expenses
Salaries and employee benefits $8,815
Purchased Transportation $1,203
Fuel Expense $3,228
Rental and landing fees $1,748
Depreciation Expense $925
Maintenance and repairs expense $1,573
Provision for income taxes $805
Other expense (revenue) net $4,995
Total Expenses $23,292
Net Income $1,406
Find the following values. Compounding/discounting occurs annually. Do not round intermediate calculations. Round your answers to the nearest cent. a. An initial $400 compounded for 10 years at 5%. $ b. An initial $400 compounded for 10 years at 10%. $ c. The present value of $400 due in 10 years at 5%. $ d. The present value of $2,515 due in 10 years at 10% and 5%. Present value at 10%: $ Present value at 5%: $
Answer:
$651.56
$1037.50
$245.57
$969.64
$1543.99
Explanation:
The formula for calculating future value:
FV = P (1 + r)^n
FV = Future value
P = Present value
R = interest rate
N = number of years
a. 400 x (1.05)^10 = $651.56
b. 400 x (1.1)^10 = $1037.50
formula for determining present value is
PV = f / (1 + r)^n
$400/ (1.05)^10 = $245.57
d. $2515 / (1.1)^10 = $969,64
$2515 / (1.05)^10 = $1543.99
Farmer Owens has an apple orchard that must be pollinated by bees in order to bear fruit. Farmer Owens's neighbor, Maude, owns beehives with bees that can pollinate the apple trees. Suppose the benefit of the bees to Farmer Owens is $ per year. Suppose the bees provide no benefit to Maude but she must pay $ per year to maintain the hives. If Farmer Owens and Maude engage in Coase bargaining, what would likely result?
Answer: A. Farmer Owens would pay Maude between $3,000 and $5,000 to maintain the hives.
Explanation:
Coarse bargaining refers to a scenario where parties involved in a conflict over property rights can reach an efficient agreement that would reflect the costs and values of the property in question.
In this scenario, Farmer Owens is making a benefit of $5,000. Owens would therefore be willing to pay a maximum of $5,000 for the benefit and no more.
Maude spends $3,000 on the hives which means that she needs a minimum of $3,000 to cover those costs.
They should therefore reach an agreement where Farmer Owens would pay between $3,000 and $5,000 to Maude so that she can maintain the hives.
On July 1, 2020, Bramble Inc. made two sales.
1. It sold land having a fair value of $905,820 in exchange for a 4-year zero-interest-bearing promissory note in the face amount of $1,425,321. The land is carried on Ayayai's books at a cost of $599,100.
2. It rendered services in exchange for a 3%, 8-year promissory note having a face value of $409,970 (interest payable annually). Ayayai Inc. recently had to pay 8% interest for money that it borrowed from British National Bank. The customers in these two transactions have credit ratings that require them to borrow money at 12% interest.
Required:
Record the two journal entries that should be recorded by Bramble Inc. for the sales transactions above that took place on July 1, 2020.
Answer:
Bramble Inc.
Journal Entries:
July 1, 2020:
1.
Debit Long-term Note Receivable $1,425,321
Credit Land $599,100
Credit Interest Receivable $519,501
Credit Gain from Sale of Land $306,720
To record the sale of land for a 4-year zero-interest-bearing note.
2.
Debit Long-term Note Receivable $409,970
Credit Service Revenue $323,634
Credit Interest Receivable $86,336
To record the rendering of services in exchange for a 3%, 8-year note.
Explanation:
a) Data and Analysis:
1. Long-term Note Receivable $1,425,321
Land $599,100
Interest Receivable $519,501 ($1,425,321 - $905,820)
Gain from Sale of Land $306,720 ($905,820 - $599,100)
2. Long-term Note Receivable $409,970
Service Revenue $323,634
Interest Receivable $86,336
NB: The interest receivable and the present value of the service revenue for 2 were obtained from an online financial calculator, using the future value of $409,970 and 3% interest rate for 8 years.
Nadine Chelesvig has patented her invention. She is offering a patent manufacturer two contracts for the exclusive right to manufacture and market her product. Plan A calls for an immediate single lump payment to her of $35,000. Plan B calls for an annual payment of $1,200 plus a royalty of $0.40 per unit sold. The remaining life of the patent is 10 years. Nadine uses a MARR of 7 %/year.
a. What must be the uniform annual sales volume of the product for Nadine to be indifferent between the contracts, based on a present worth analysis?
b. If the sales volume is below the volume determined in (a), which contract would the manufacturer prefer?
Answer:
A) 9458 units
B) She would prefer the one with the single lump payment of $35,000 because the present value of the other one would increase with an increase in the units sold.
Explanation:
A) To calculate the uniform annual sales volume based on a present worth analysis, we will make use of the formula for present value of annuity.
Thus;
P = PMT × (1 - ((1/(1 - rⁿ))/r
From the question, we are given;
P = $35,000
PMT = (1200 + 0.4x)
r = 7% = 0.07
n = 10
Thus, Plugging in the relevant values, we have;
(1200 + 0.4x)((1 - (1/(1 + 0.07)^10))/0.07 = 35000
This gives;
(1200 + 0.4x) × 7.0236 = 35000
(1200 + 0.4x) = 35000/7.0236
(1200 + 0.4x) = 4983.2
0.4x = 4983.2 - 1200
0.4x = 3783.2
x = 3783.2/0.4
x = 9458 units
B) She would prefer the one with the single lump payment of $35,000 because the present value of the other one would increase with an increase in the units sold.
The Assembly Department started the month with 25,300 units in its beginning work in process inventory. An additional 310,300 units were transferred in from the prior department during the month to begin processing in the Assembly Department. There were 30,300 units in the ending work in process inventory of the Assembly Department. How many units were transferred to the next processing department during the month
Answer:
305,300 units
Explanation:
The computation of the number of units that should be transferred to the next processing department is given below:
As we know that
Opening inventory +Transferred in inventory = Transferred out inventory + ending inventory
25,300 units + 310,300 units = Transferred out inventory + 30,300 units
So, the Transferred out inventory is
= 25,300 units + 310,300 units - 30,300 units
= 305,300 units
Answer the below case problem, giving the legal issue, the governing law and the rationale in support of your conclusion.
Arthur Jensen, Inc., was a corporation engaged in the housing construction business.
Arthur Jensen set up and was the sole owner and president of the corporation. Alaska Valuation Service [AVS] conducted housing appraisals for Jensen on numerous occasions over the years. When AVS took the orders for appraisals, it was not aware that it was dealing with a corporation. It believed that it was dealing directly with Jensen [i.e., as a sole proprietor]. Jensen never specifically informed AVS of his status as the president of Arthur Jensen, Inc. When AVS was not paid for appraisal services that it had performed, AVS sued Arthur Jensen, attempting to hold him personally liable for the unpaid appraisals.
Arthur Jensen argued that he could not be personally liable because he had acted on behalf of his corporation.
1. Decide the case based on the above stated facts.
2. Assuming Arthur Jensen could be held personally liable, how could Arthur
Jensen have better protected himself? [we discussed this in class]
Answer:
1. Decide the case based on the above stated facts.
Corporations provide limited liability to their owners, and one person corporations are legal in all states. Depending on how Arthur handled his business, the corporate veil might or not be lifted. If he separated the corporate account and managed the corporation separately for his other assets, then he is not liable.
On the other hand, if he paid the bills using his personal account, or used the corporation's assets as his own, then the outcome might change. We are not given enough details.
2. Assuming Arthur Jensen could be held personally liable, how could Arthur Jensen have better protected himself?
Simple, he should sign as the president of the corporation and pay using the corporation's account.
An environmental consultant is considering the installation of a water storage tank for a client. The tank is estimated to have an initial cost of $309,000, and annual maintenance costs are estimated to be $7,100 per year. As an alternative, a holding pond can be provided a short distance away at an initial cost of $225,000 for the pond plus $90,000 for pumps and piping. Annual operating and maintenance costs for the pumps and holding pond are estimated to be $16,000. The planning horizon is 20 years, and at that time, neither alternative has any salvage value.
Required:
Determine the preferred alternative based on a present worth analysis with a MARR of 20 percent/year.
Answer:
The preferred alternative based on a present worth analysis with a MARR of 20% per year is:
the Installation of a water Storage Tank
Explanation:
a) Data and Calculations:
MARR = 20% per year
Time period or planning horizon = 20 years
Alternatives
Tank Pond
Initial costs $309,000 $315,000 ($225,000 + $90,000)
Annual maintenance costs 7,100 16,000
PV annuity factor 4.870 4.870
Total PV: maintenance cost $34,577 $77,920 ($16,000 * 4.870)
Total PW costs $343,577 $392,920 ($315,000 + $77,920)
Present worth is the same as the present value (PV) of a future amount, discounted to the present using a specified rate.
Mountain High Ice Cream Company transferred $68,000 of accounts receivable to the Prudential Bank. The transfer was made without recourse. Prudential remits 90% of the factored amount to Mountain High and retains 10%. When the bank collects the receivables, it will remit to Mountain High the retained amount (which Mountain estimates has a fair value of $5,800) less a 2% fee (2% of the total factored amount).
Required:
Prepare the journal entry to record the transfer on the books of Mountain High assuming that the sale criteria are met.
Answer:
Dr Cash $59,840
Dr Loss on Sale of Receivables $8,160
Dr Recievable from Factor $5,800
Cr Recourse liability $5,800
Cr Accounts Receivable $68,000
Explanation:
Preparation of the journal entry to record the transfer on the books of Mountain High assuming that the sale criteria are met.
Dr Cash $59,840
[(68,000 x .90) - (68,000 x .02)]
Dr Loss on Sale of Receivables $8,160
[(5,800 + 68,000) - ($59,840 + 5,800)]
Dr Recievable from Factor $5,800
Cr Recourse liability $5,800
($59,840+$8,160+5800-68,000)
Cr Accounts Receivable $68,000
(To record the transfer on the books of Mountain High)
Dr Loss on Sale of Rec = (5,800 + 68,000) - ($59,840 + 5,800) = $8,160
73,800-65650
Steve's Outdoor Company purchased a new delivery van on January 1 for $47,000 plus $4,000 in sales tax. The company paid $13,000 cash on the van (including the sales tax), with the $38,000 balance on credit at 8 percent interest due in nine months (on September 30). On January 2, the company paid cash of $900 to have the company name and logo painted on the van. On September 30, the company paid the balance due on the van plus the interest. On December 31 (the end of the accounting period), Steve's Outdoor recorded depreciation on the van using the straight-line method with an estimated useful life of 5 years and an estimated residual value of $4,700.
Answer:
Steve's Outdoor Company purchased a new delivery van on January 1 for $47,000 plus $4,000 in sales tax. The company paid $13,000 cash on the van (including the sales tax), with the $38,000 balance on credit at 8 percent interest due in nine months (on September 30).
January 1, 202x, delivery van purchased
Dr Vehicles 51,000
Cr Cash 13,000
Cr Notes payable 38,000
The sales tax increases the asset's historical cost
On January 2, the company paid cash of $900 to have the company name and logo painted on the van.
January 2, 202x, company's logo was painted on the delivery van
Dr Vehicles 900
Cr Cash 900
On September 30, the company paid the balance due on the van plus the interest.
September 30, 202x, notes payable cancelled
Dr Notes payable 38,000
Dr Interest expense 2,280
Cr Cash 40,280
On December 31 (the end of the accounting period), Steve's Outdoor recorded depreciation on the van using the straight-line method with an estimated useful life of 5 years and an estimated residual value of $4,700.
December 31, 202x, depreciation expense
Dr Depreciation expense 9,400
Cr Accumulated depreciation, vehicles 9,400
Depreciable value = $51,700 - $4,700 = $47,000
Depreciation expense per year = $47,000 / 5 = $9,400
Why is it important to consider how you will spend your retirement when planning for retirement?
Answer:
Retirement planning is important because it can help you avoid running out of money in retirement. Your plan can help you calculate the rate of return you need on your investments, how much risk you should take, and how much income you can safely withdraw from your portfolio.
Explanation:
describe the role of the public sector
Answer:
The public sector includes all sorts of government (central, state, and local). It provides basic goods or services that are either not, or cannot be, provided by the private sector, for example, schools, roads, etc.
Explanation:
hope this helps!! please mark brainliest :))
Question 7 (4 points)
Saved
Which of the following inestments would be considered the most liquid?
Question 7 options:
Real Estate
A one year CD
A standard savings account
A 401k
If the efficient market hypothesis is correct, then a. index funds should typically beat managed funds, and usually do. b. index fund should typically beat managed funds, but usually do not. c. mutual funds should typically beat index funds, and usually do. d. mutual funds should typically beat index funds, but usually do no
Answer:
a. index funds should typically beat managed funds, and usually do.
Explanation:
The efficient market hypothesis is also known as efficient market theory. In financial economics, it is a hypothesis which states that the prices of the assets reflect all the available information. It hypothesizes that the stocks trade at the fair market value on the exchanges. When the efficient market hypothesis is correct, the stock market is informationally efficient and also the index fund usually beat the managed funds.
What are the benefits of multiple marketing channels? Are there any disadvantages?
Sandhill Corporation was organized on January 1, 2019. During its first year, the corporation issued 1,900 shares of $50 par value preferred stock and 109,000 shares of $10 par value common stock. At December 31, the company declared the following cash dividends: 2019, $5,950; 2020, $13,800; and 2021, $28,000. (a) Show the allocation of dividends to each class of stock, assuming the preferred stock dividend is 7% and noncumulative.
Answer:
Sandhill Corporation
Allocation of dividends to each class of stock:
Year Total Dividends Preferred Stock Common Stock
2019 $5,950 $5,950 $0
2020 $13,800 $6,650 $7,150
2021 $28,000 $6,650 $21,350
Explanation:
a) Data and Calculations:
7% Preferred stock, $50 par value: Issued 1,900 = $95,000
Common stock, $10 par value: Issued 109,000 = $1,090,000
Dividends declared at December 31:
Year Dividends 7% Preferred Common Stock
2019 = $5,950 $6,650 Paid $5,950 $0
2020 = $13,800 $6,650 Paid $6,650 $7,150
2021 = $28,000 $6,650 Paid $6,550 $21,350
b) The preferred stock dividend is fixed at 7% of $95,000 yearly. Since it is noncumulative, the 2019 dividend will be limited to the dividends declared. For other years, the dividend for the preferred stock is fixed at $6,650 annually. Whatever remains after paying the preferred dividends is paid to the common stockholders.
Trendy Toes produces sports socks. The company has fixed expenses of $85,000 and variable expenses of $1.20 per package. Each package sells for $2.00.
Requirements:
1. Compute the contribution margin per package and the contribution margin ratio.
2. Find the breakeven point in units and in dollars.
3. Find the number of packages Trendy Toes needs to sell to earn a $26,000 operating income.
Answer:
Results are below.
Explanation:
To calculate the contribution margin and contribution margin ratio we need to use the following formulas:
contribution margin= selling price - unitary variable cost
contribution margin= 2 - 1.2= 0.8
contribution margin ratio= contribution margin / selling price
contribution margin ratio= 0.8 / 2
contribution margin ratio= 0.4
Now, we can calculate the break-even point in units and dollars:
Break-even point in units= fixed costs/ contribution margin per unit
Break-even point in units= 85,000 / 0.8
Break-even point in units= 106,250
Break-even point (dollars)= fixed costs/ contribution margin ratio
Break-even point (dollars)= 85,000 / 0.4
Break-even point (dollars)= $212,500
Finally, the desired profit is $26,000:
Break-even point in units= (fixed costs + desired profit) / contribution margin per unit
Break-even point in units= 111,000 / 0.8
Break-even point in units= 138,750