Answer:
The company's Enterprise value is $124.03 million.
Explanation:
Earnings before interest , depreciation, taxes and amortization (EBITDA) = Sales - Cost
= $28.4 million -$12.7 million
= $15.7 million
Since Enterprise Value ÷ EBITDA = 7.9
Therefore,
Enterprise Value = EBITDA × 7.9
= $15.7 million × 7.9
= $124.03 million
by how many days does the discontinuance of a group insurance policy reduce the time limit for providing notice of claim or proof of loss
Answer:
0 days.
Explanation:
A group life insurance policy can be defined as a single contract plan that covers a group of people by providing life insurance coverage. An employer may opt for a group life insurance policy which would cover the lives of his or her employees. Therefore, in the event that an employee died, the group life insurance policy would act as a monetary security by providing financial support or aid to the family members of the deceased employee.
The discontinuance of a group insurance policy reduce the time limit for providing notice of claim or proof of loss by 0 days. The date for notice of claim or proof of loss is perpetual and such the beneficiaries of these policies are allowed to provide or present evidence at any time.
A notice of discontinuance of an insurance company should contain therein a date when the group policy plan will discontinue and as a result the insurer wouldn't be liable for claims for losses incurred after the date of discontinuance.
Suppose Alex owns a business making quilts that generates $7,000 a month in revenue. Each month, Alex spends $1,500 on fabric and other sewing materials, and he pays his two employees a combined total of $4,000 per month (they each earn $2,000). Alex makes his quilts in a workshop he has set up in his basement. If Alex did not own the quilt business, he would work as a yoga instructor earning $2,300 per month, and he would use the basement as a TV room, an option he would value at $40 per month. a. What is Alex's accounting profit
Answer:
Alex's accounting profit is calculated as follows:
Revenue from quilts = $7,000
Materials costs (1,500)
Labor costs (4,000)
Accounting profit $1,500
Explanation:
Alex's accounting profit is different from the profit when calculated from the economist's point of view. The economist would include the opportunity costs of lost earnings as a yoga instructor of $2,300 per month and the monthly rental value of $40 for the TV room in the monthly cost. These are not considered in arriving at the accounting profit. Accounting profit does not include opportunity costs. It only includes the actual costs of goods sold or produced. And it is not the costs that were paid for in cash that accounting profit considers. All related costs whether paid for in cash or not, provided they are incurred in generating the revenue are included in accordance with the accrual concept and the matching principle of generally accepted accounting principles.
Which of the following is not an important element of the political/legal segment of the general environment?
a) tort reform
b) genetic engineering
c) Americans with Disabilities Act (ADA)
d) deregulation of utilities and other industries
Answer: genetic engineering
Explanation:
Tort reform has to do with the ideas that are out in place so as to change laws regarding civil justice system in order for tort litigation to be decreased.
Americans with Disabilities Act was put in place to ensure that people that have disabilities are not discriminated. Also, deregulation is used to increase competition which will lead to greater efficiency, lower costs and also lower prices for good and services. All the above are political/legal segment of the general environment.
Genetic engineering simply means using biotechnology to manipulate the gene of an of an organism. This is not part of the legal or political segment.
Kaspar and Ludger, two unrelated calendar year corporations, have the following transactions for 2019: Kaspar Corporation Ludger Corporation Gross income from operations $180,000 $300,000 Expenses from operations $255,000 $310,000 Dividends received from domestic corporations (15% ownership) $100,000 $230,000 Taxable income before the dividends received deduction $25,000 $220,000
Determine the dividends received deduction for both companies.
Answer:
The dividends received deduction for Kaspar Corporation is $70,000, while the dividends received deduction for Ludger Corporation is $230,000.
Explanation:
Note that the data in the question are merged together but they are first sorted in the attached excel file before answering the question as follows:
The dividends received deduction refers a federal tax deduction that are enjoyed in the U.S. by some corporations that receives dividends from related entities.
Based on the general rule for dividends received deduction, if the ownership by the company receiving the dividend in the company paying the dividend is less than 20%, the dividends received deduction is the 70% of the dividend received.
Since both Kaspar and Ludger have just 15% ownership which is less than 20% in domestic corporation from which they received dividends, their dividends received deduction can therefore be determined using the following formula:
Dividend received deduction = Dividend received * 70% .............. (1)
Using equation (1), we have:
Kaspar's dividend received deduction = $100,000 * 70% = $70,000
Ludger's dividend received deduction = $230,000 * 70% = $161,000
Therefore, the dividends received deduction for Kaspar Corporation is $70,000, while the dividends received deduction for Ludger Corporation is $230,000.
you currently have $5600. First united bank will pay you an annual interest rate of 9.1, while second national bank will pay you an annual interest rate of 10.2. How many fewer years must you wait for your account value to grow to $15,700 at second national bank?
Answer:
1.22 years
Explanation:
The formula for calculating number of years:
FV / PV = (1 + r)^ n
FV = Future value
P = Present value
R = interest rate
N = number of years
at the first bank
$15700 / $5600 = (1.091)^n
2.80 = (1.091)^n
n = In 2.8 / In 1.091
to find n, take the IN of both sides
1.029619 / 0.08709 = 11.82 years
at the second bank
$15700 / $5600 = (1.091)^n
2.80 = (1.102)^n
n = n = In 2.8 / In 1.102
= 10.6 years
11.82 - 10.6 = 1.22 years
Le Sun's has sales of $3,000, total assets of $2,500, and a profit margin of 5%. The firm has an equity multiplier of 2.5. What is the return on equity?
Answer:
Le Sun's return on equity is 15%
Explanation:
Assets turnover ratio = Net sales / Total fixed assets = $3,000 / $2,500 = 1.2 times
Return on Asset = Profit margin * Total assets turnover
ROA= 5% * 1.2 times
ROA = 6%
Return on Equity= ROA * Equity multiplier
ROE= 6% * 2.5
ROE= 15%
Le Sun's return on equity is 15%
A manufacturer reports the following information below for its first three years in operation.
Year 1 Year 2 Year 3
Income under variable costing $76,000 $109,000 $115,000
Beginning inventory (units) 0 800 500
Ending inventory (units) 800 500 0
Fixed manufacturing overhead per unit $8.00 $8.00 $8.00
Income for year 3 using absorption costing is:
a. $109,000
b. $117,000
c. $106,600
d. $115,000
e. $111,000
Answer:
e. $111,000
Explanation:
Absorption costing income for year 3 = Income under variable costing - {Beginning inventory (units) * Fixed manufacturing overhead per unit} + {Ending inventory (units) * Fixed manufacturing overhead per unit}
Absorption costing income for year 3 = 115,000 - (500*8) + (0*8)
= 115,000 - 4,000 + 0
= $111,000
When unemployment is high, government policymakers might decide to do which of the following?
a. Decrease the amount of funds in the economy available for loans
b. Decrease government spending on goods and services
c. Increase government spending on goods and services
d. Raise taxes
Answer:
Option C is correct.
Explanation:
The option is C, “Increase government spending on goods and services” is correct because the spending by the government will create new employment opportunities. Therefore, this will decrease unemployment. However, if the government decreases the loan funds in the economy, decreases the spending on goods and services, and rises the taxes then it will raise unemployment in the economy.
In the case when the unemoloyment is high, the government policymakers should increase the government spending on the goods and services.
The following information should be considered:
The spending by the government developed the new employment opportunities.Due to this, the unemployment should decreased.In the case when the government reduced the loan funds so it reduced the spending on goods & services.Learn more: brainly.com/question/17429689
Sufra Corporation is planning to sell 150,000 units for $2.90 per unit and will break even at this level of sales. Fixed expenses will be $93,000. What are the company's variable expenses per unit
Answer:
$2.28
Explanation:
Breakeven point is the number of units produced and sold at which net income is equal to zero.
Breakeven = F / P - V
F = fixed
P = price
V = variable cost
150,000 = $93,000 / $2.90 - V
Multiply both sides of the equation by $2.90 - V
= ($2.90 - V)150,000 = $93,000
$435,000 - 150,000V = $93,000
V = $2.28
I hope my answer helps you
You note the following yield curve in The Wall Street Journal. According to the unbiased expectations theory, what is the one-year forward rate for the period beginning two years from today, 3 f1? (LG 2-8) Maturity Yield One day 2.00% One year 5.50 Two years 6.50 Three years 9.00
Answer:
7.51%
Explanation:
According to the situation, The computation of one-year forward rate for the period beginning two years from today is shown below:-
[tex]_1R_2 = Two\ years\ rate = ((1 + One\ year\ rate)\times (1 +_2f_1)^\frac{1}{2} - 1[/tex]
[tex]_1R_2 = 0.065 = ((1 + 0.55)\times (1 +_2f_1)^\frac{1}{2} - 1[/tex]
[tex]= \frac{= 1.065^2}{= 1.055} - 1 = _2f_1 = 7.51%[/tex]
= 7.51%
Therefore for computing the one-year forward rate for the period beginning two years from today we simply applied the above formula.
Hence, the one year forward rate is 7.51%
Winkle Corporation uses the FIFO method in its process costing system. Beginning inventory in the mixing processing center consisted of 5,000 unites, 90% complete with respect to conversion costs. Ending work in process inventory consisted of 2,000 units, 60% complete with respect to conversion costs. If 10,000 units were transferred to the next processing center during the period, how many would the equivalent units for conversion costs be?
a. 10,000 units
b. 12,200 units
c. 12,000 units
d. 6,700 units
Answer:
d. 6,700 units
Explanation:
The computation of the equivalent units for conversion cost by using the FIFO method is shown below:
= Beginning inventory units × remaining percentage + units started and completed + ending inventory units × completion percentage
= 5,000 × 10% + (10,000 - 5,000) + 2,000 × 60%
= 500 + 5,000 + 1,200
= 6,700 units
We simply applied the above formula
A fire has destroyed a large percentage of the financial records of the Excandesco Company. You have the task of piecing together information in order to release a financial report. You have found the return on equity to be 14.9 percent. Sales were $1,750,000, the total debt ratio was .33, and total debt was $651,000.
What is the return on assets (ROA)? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) Return on assets __%
Answer:
10%
Explanation:
For computing the return on assets we have to do the following calculations:
As we know that
Total debt ratio = Total debt ÷ Total assets
0.33 = $651,000 ÷ Total assets
So,
Total assets = $1,972,727.27
Now the total equity is
Total assets = Total debt + Total Equity
$1,972,727.27 = $651,000 + Equity
So,
Equity = $1,321,727.27
Now
ROE = Net income ÷ Equity
0.1490 = Net income ÷ $1,321,727.27
Net income = $196,937
So,
ROA = Net income ÷ Total assets
= $196,937 ÷ $1,972,727.27
= 9.98%
= 10%
Splish Brothers Leasing Company signs a lease agreement on January 1, 2020, to lease electronic equipment to Sunland Company. The term of the non-cancelable lease is 2 years, and payments are required at the end of each year. The following information relates to this agreement:_________.
1. Sunland has the option to purchase the equipment for $24,000 upon termination of the lease. It is not reasonably certain that Sunland will exercise this option.
2. The equipment has a cost of $280,000 and fair value of $330,500 to Splish Brothers Leasing. The useful economic life is 2 years, with a residual value of $24,000.
3. Splish Brothers Leasing desires to earn a return of 5% on its investment.
4. Collectibility of the payments by Splish Brothers Leasing is probable.
Prepare the journal entries on the books of Splish Brothers Leasing to reflect the payments received under the lease and to recognize income for the years 2020 and 2021. (Credit account titles are automatically indented when amount is entered. Do not indent manually. For calculation purposes, use 5 decimal places as displayed in the factor table provided and round final answers to 0 decimal places e.g. 5,275.)
Answer:
Journal entries
Date Account title Debit Credit
01-01-2017 Lease Receivable(Fair Value) $3,30,500.00
COGS(280000-21769) $2,58,231.00
Sales Revenue(330500-21769) $3,08,731.00
Equipment(Cost) $2,80,000.00
(Inception of lease)
12/31/2017 Cash $1,66,037.00
Lease Receivable $1,49,512.00
Interest income $16,525.00
(1st instalment recd.)(as per table)
12/31/2018 Cash $1,66,037.00
Lease Receivable $1,56,988.00
Interest income $9,049.00
( 2nd & Last instalment recd.)(as per table)
If Sunland exercises the option to purchase:
12/31/2018 Cash $24,000.00
Lease Receivable $24,000.00
Lease Receivable amortisation schedule:
Year Annuity Tow. Int. at 5% Tow. Lease Lease balance
0 $3,30,500.00
1 $1,66,037.00 $16,525.00 $1,49,512.00 $1,80,988.00
2 $1,66,037.00 $9,049.00 $1,56,988.00 $24,000.00
(Residual value)
If purchased $24,000.00 0
Working Note-1
PV of lease payments= Fair value of the equipment= $3,30,500.00
PV of residual value $21,769.00
So,amt.to be recovered thro' 2 end-of-yr. lease payments $3,08,731.00
Using the PV of ordinary annuity formula as under:
308731=Pmt.*(1-1.05^-2)/0.05
Pmt.=308731/((1-1.05^-2)/0.05)= $166037
Explanation:
Identify the following questions as most likely to be asked by an internal or an external user of accounting information
1. What are reasonable payroll benefits and wages?
2. Should we make a five-year loan to that business?
3. What are the costs of our product's ingredients?
4. Do income levels justify the current stock price?
5. Should we spend additional money for redesign of our product?
6. Which firm reports the highest sales and income?
7. What are the costs of our service to customers?
Answer:
The answer is:
1. - Internal user of accounting information(management)
2. External user of accounting information(banks)
3. Internal user of accounting information(management)
4. External user of accounting information(potential investors)
5. Internal user of accounting information(management)
6. External user of accounting information
7. Internal user of accounting information(management)
Explanation:
Internal users of accounting information are people within a organization who use the accounting information for decision making. Examples of are the management and employees. External users are people that are not within the organization. Examples are government, the public, banks, potential investors etc
1. - Internal user of accounting information(management)
2. External user of accounting information(banks)
3. Internal user of accounting information(management)
4. External user of accounting information(potential investors)
5. Internal user of accounting information(management)
6. External user of accounting information
7. Internal user of accounting information(management)
g "Walblue imports a desk from a French manufacturer for sale in its chain of U.S. stores. The cost of a desk to Walblue is 3,700 euros (€). What is the dollar cost of one of these desks if the exchange rate is currently 1.117 euros per U.S. dollar?"
Answer: $3312.4
Explanation:
The exchange rate in the rate at which a currency is being converted for another currency in the foreign exchange market. From the question, we are told that Walblue imports a desk from a French manufacturer for sale in its chain of U.S. stores.and that the cost of a desk to Walblue is 3,700 euros (€).
The dollar cost of one of these desks if the exchange rate is currently 1.117 euros per U.S. dollar goes thus:
$1 = €1.117
Therefore, €3700 will be converted to dollars as:
= 3700/1.117
= $3312.4
The answer is $3312.4
Planning and Writing Persuasive Requests In a business environment, persuasion is critical to success. Persuasion is necessary when you anticipate resistance or when you are making more than routine demands. Which of the following are elements of effective persuasion? Check all that apply. A. Involves coercion or trickery B. Deceives and fabricates evidence C. Explains logically and concisely the purpose of the request D. Establishes credibility E. Proves the merits of your proposal Fill in the blank with the most appropriate answer. In persuasive requests, the reasons and explanations usually (precede, follow, replace) the request.
Answer:
All of these alternatives are correct:
C. Explains logically and concisely the purpose of the request
D. Establishes credibility.
E. Proves the merits of your proposal
Explanation:
A persuasive request in a work environment can often occur, as this is a communication technique used when you want to convey a message in order to convince others to take specific actions.
Knowing how to develop a persuasive speech is essential for an effective leader, who can influence his subordinates through communication that retains attention, reduces resistance, creates interest and motivation.
For a persuasive message to be effective it must be developed through polite and professional writing, whose objectives are explicit and the reasons for the request are logical and demonstrate credibility. It is necessary to add to the persuasive message elements that justify the proposal and generate feelings of identification, emotion and reason, to create interest and to be able to persuade the audience and achieve the objectives.
Which of the following are objectives that the Federal Reserve tries to achieve when setting monetary policy? Check all that apply.
A. interest rate stability,
B. economic growth,
C. zero unemployment,
D. zero inflation,
E. price stability
Answer:
A. interest rate stability,
E. price stability
B. economic growth,
Explanation:
Monetary policy is the policy made by the price monetary part of the government to control interest rate and money supply. The aim of monetary policies is to reduce interest rate to ensure price stability and the general stability of the nation's currency. The various types of monetary policy include: Inflation targeting, price level targeting, money supply aggregate targeting, fixed exchange rate targeting and nominal income targeting.
Assume that there is an autonomous increase in investment spending of $20 billion and the MPC is given as 0.4, and assuming taxes, imports, and savings are all equal and no leakages:
Answer:
a. 1.67
b. $33.4 billion
c. A larger MPC
Explanation:
a. The Spending Multiplier is used to calculate how much an Economy increases as a result of an extra dollar being put into it and can be calculated by using the following formula;
= 1 / ( 1 - MPC)
= 1/ ( 1 - 0.4
= 1.67
b. Total Change in GDP = Amount invested * Spending Multiplier
= 20 * 1.67
= $33.4 billion.
c. An Economy is helped when it's GDP increases. A higher Marginal Propensity to Consume (MPC) will help it more in that case because from the formula, a larger MPC would reduce the divisor of 1 resulting in a larger Spending Multiplier which will increase the GDP more per dollar.
To explain further, the MPC measures how much of an extra dollar that people in the Economy spend, if the MPC is higher it means they spend more which will contribute to a rise in Consumption which is part of GDP.
You need to borrow money and you are considering two loans. The terms of the two loans are equivalent with the exception of the interest rates. Loan A offers a stated rate of 3.125% compounded monthly. Loan B offers a stated rate of 3.15% compounded semi-annually. What are the effective annual rates for the loans? Which one do you prefer
Answer:
For Loan A = 3.170%
For Loan B = 3.174%
Loan B has a higher effective annual rate.
Explanation:
The computation of effective annual rates for the loans is shown below:-
For Loan A
We will assume effective annual rate is a
Stated rate(r) = 3.125% compounded monthly
= Number of periods in an year n = 12
So,
(1 + a) = (1 + r ÷ n) × n
= a = (1+0.03125 ÷ 12) × 12 - 1
= 0.03170
or
= 3.170%
For Loan B
We will assume the effective annual rate is b
Stated rate (r) = 3.15% compounded semi annually
= Number of periods in an year n = 2
So
(1 + a) = (1 + r ÷ n) × n
= a = (1 + 0.0315 ÷ 2) × 2 - 1
= 0.03174
or
= 3.174%
From the above calculation we can see that Loan B, is greater than Loan A and has a higher effective annual rate.
How can a firm pursuing a diversification strategy enhance its overall corporate performance by leveraging financial economies?
Available options are:
A. by using internal capital markets as a source of value creation
B. by adding more unrelated businesses into its corporate portfolio
C. by increasing its coordination and influence costs
D. by investing in businesses under the question mark quadrant of the BCG matrix
Answer:
Option A. By using internal capital markets as a source of value creation
Explanation:
The internal capital market is a mechanism of allocation of funds of an organization to its various projects that meets its desired return criteria and is in-accordance with their mission statement.
Option A is correct because the The reason is that if the organization is investing in the projects that will generate greater value by using its funds then it will increase the corporate performance.
Option B is incorrect because investing in unrelated business decreases the risk level associated with the corporate operations and is serious trouble for the company if it doesn't have any prior experience of the unrelated business.
Option C is incorrect because cordination might not bring value to corporations as there are many examples of mismanagement and collapse of corporations in the past.
Option D is also incorrect because almost one third of new businesses collapse every year. The investment in question mark is thus a very risky option and can effect the company by significant losses.
When the amount earned on a deposit has become part of the principal at the end of a specified time period the concept is called
Answer:
Compound interest
Explanation:
Compound interest is a method of measuring interest by which interest is applied to the principal amount over time. You not only earn interest on the principal amount but also collect interest on your interest.
This tends to happen because you save your interest, rather than withdraw it
Hence, the compound interest is the correct answer
Boxwood Company sells blankets for $30 each. The following was taken from the inventory records during May. The company had no beginning inventory on May 1. Date Blankets Units Cost May 03 Purchase 6 $14 10 Sale 4 17 Purchase 12 $16 20 Sale 4 23 Sale 3 30 Purchase 12 $18 Assuming that the company uses the perpetual inventory system, determine the ending inventory for the month of May using the LIFO inventory cost method.
Answer:
The ending inventory for the month of May using the LIFO inventory cost method is $324.
Explanation:
LIFO
LIFO method assumes that the last goods purchased are the first ones to be issued to the final customer.
This means valuation of inventory will use the value of the earliest goods purchased.
Ending Inventory : 2 units × $14 = $28
5 units × $16 = $80
12 units × $18 = $216
Total = $324
Conclusion :
The ending inventory for the month of May using the LIFO inventory cost method is $324.
Pledging receivables: A) Allows firms to raise cash. B) Allows a firm to retain ownership of its receivables. C) Does not transfer risk of bad debts to the lender. D) Should be disclosed in the financial statements. E) All of the above
Answer:
E
Explanation:
Pledging receivables is when the receivables are used as collateral during a financial arrangement. When a business uses it's business assets as collateral to gain a loan.
All the options in the question constitutes what pledging receivables consists. Therefore option E is the right answer.
Suppose that General Motors Acceptance Corporation issued a bond with 10 years until maturity, a face value of $ 1 comma 000, and a coupon rate of 7.7 % (annual payments). The yield to maturity on this bond when it was issued was 6.3 %. What was the price of this bond when it was issued? When it was issued, the price of the bond was $ nothing. (Round to the nearest cent.)
Answer:
The price of the bond when it was issued was $1101.59
Explanation:
To calculate the price of the bond, we need to first calculate the coupon payment per period. We assume that the interest rate provided is stated in annual terms.
Coupon Payment (C) = 1000 * 0.077 = $77
Total periods (n)= 10
r = 6.3%
The formula to calculate the price of the bonds today is attached.
Bond Price = 77 * [( 1 - (1+0.063)^-10) / 0.063] + 1000 / (1+0.063)^10
Bond Price = $1101.592357 rounded off to $1101.59
The price of the bond when it was issued was $1101.59
Ethan's Eggroll House, a calendar year corporation, purchased a new computer and printer in January for $1,500. In February, the business purchased a new oven for $1,200. No other assets were purchased during the year. How much depreciation will be taken on these items in the second year of service if the taxpayer does NOT elect to use Section 179 and does NOT use bonus depreciation
Answer:
depreciation for year 2 = $773.88
Explanation:
the MACRS depreciation schedule for computer equipment is:
5 year class life (half year convention)
year depreciation % assets' cost depreciation expense
1 20% $1,500 $300
2 32% $1,500 $480
3 19.20% $1,500 $288
4 11.52% $1,500 $172.80
5 11.52% $1,500 $172.80
6 5.76% $1,500 $86.40
the MACRS depreciation schedule for an oven is:
7 year class life (half year convention)
year depreciation % assets' cost depreciation expense
1 14.29% $1,200 $171.48
2 24.49% $1,200 $293.88
3 17.49% $1,200 $209.88
4 12.49% $1,200 $149.880
5 8.93% $1,200 $107.16
6 8.92% $1,200 $107.04
7 8.93% $1,200 $107.16
8 4.46% $1,200 $53.52
depreciation for year 2 = $480 + $293.88 = $773.88
Item 35Item 35 You expect to receive $4,100 upon your graduation and will invest your windfall at an interest rate of 0.63 percent per quarter until the account is worth $5,500. How many years do you have to wait until you reach your target account value
Answer:
It will take 11.7 years to reach the objective
Explanation:
Giving the following information:
PV= $4,100
FV= $5,500
i= 0.0063
n= ?
To calculate the time required to reach the future value, we need to use the following formula:
n= ln(FV/PV) / ln(1+i)
n= ln(5,500/4,100) / ln(1.0063)
n= 46.78
in years= 46.78/4= 11.70
It will take 11.7 years to reach the objective
Highland Clothing purchased land, paying $96,000 cash and signing a $300,000 note payable. In addition, Highland paid delinquent property tax of $1,100, title insurance costing S600, and $4,600 to level the land and remove an unwanted building. Record the journal entry for purchase of the land. Begin by determining the cost of the land. Purchase price of land Add related costs: 396000 1100 Property taxes Title insurance Removal of building 600 4600 6300 Total cost of land 402300
Record the journal entry for purchase of the land.
Answer and Explanation:
The Journal entry is shown below:-
Land Dr, 402,300
Cash Dr, 102,300 ($96,000 + $1,110 + $600 + $4,600)
To Notes payable $300,000
(Being purchase of land with cash and notes payable is recorded)
Here we debited the land and cash as it increased the fixed assets and current assets and we credited the notes payable as it also increased the current liabilities
The learning curve is:_______
a. Really no different from a marginal cost curve.
b. Calculates average cost at a particular point in time.
c. Shows the decrease in unit cost as more of the same product is produced over time.
d. None of the above.
Answer:
Option C, Shows the decrease in unit cost as more of the same product is produced over time, is the right answer.
Explanation:
Option C is the correct answer because the learning curve shows the relationship between the cost of the production and output over the time period. Moreover, this curve shows the cost savings when more output is produced over time. The same can be seen in option C that the cost decreases when output rises which means there is a cost-saving.
The journal entry to record the transfer of partially completed work in process to the next process in process costing is a(n):
Answer:
Explanation:
The Journal Entry in these types of situations is done as Debit Work in Process-department #2 and credit Work in Process-department #1. Since it is being transferred from one to the other meaning the first department is losing the completed work (credit) while the second department is gaining the completed work (debit)
M.K. Gallant is president of Kranbrack Corporation, a company whose stock is traded on a national exchange. In a meeting with investment analysts at the beginning of the year, Gallant had predicted that the company’s earnings would grow by 20% this year. Unfortunately, sales have been less than expected for the year, and Gallant concluded with two weeks of the end of the fiscal year that it would impossible to ultimately report an increase in earning as large as predicted unless some drastic action was taken. Accordingly, Gallant has ordered that wherever possible, expenditures should be postponed to the new year – including canceling or postponing orders with suppliers, delaying planned maintenance and training, and cutting back on end-of-the-year advertising and travel. Additionally, Gallant ordered the company’s controller to carefully scrutinize all costs that are currently classified as period costs and reclassify as many as possible as product costs. The company is expected to have substantial inventories of work in process and finished goods at the end of the year. Comment on the following questions.* Why would reclassifying period costs as product costs increase this period’s reported earnings?* Do you believe Gallant’s actions are ethical? Why or why not?
Answer:
A) reclassifying period costs as product costs, means that the company will be able to move some of some costs forward in inventories that would have been recorded as current expenses. With current expenses reduced, the company and
will
Examples of period costs are
RentOffice depreciationOffice supplies, and UtilitiesGallanta actions are unethical. They amount to falsification of accounts and misrepresentation of facts both of which are illegal.
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