Answer:
c. 7.39%
Explanation:
Preferred dividend rate before tax = 8.4%
Tax rate = 40%
Dividend exclusion of = 70%
After-tax return = Preferred dividend rate [ 1 - (1-Dividend exclusion)*(Tax rate)
After-tax return = 8.4% [ 1 - (1-0.70)*(0.40)
After-tax return = 8.4% [1-0.12]
After-tax return = 8.4% * 0.88
After-tax return = 7.39%
Mogul Company ships merchandise to Ski Outfit in a consignment arrangement. The arrangement specifies that Ski Outfit will attempt to sell the merchandise, and in return, Mogul will pay to Ski Outfit a 15% sales commission on any merchandise sold. During the year, Mogul ships inventory with a cost of $100,000 to Ski Outfit. By the end of the year, $76,000 of the merchandise has been sold to customers for a total of $105,800. What amount of inventory will Mogul report at year end
Answer:
$24,000
Explanation:
According to the consignment accounting, it States that any inventory sent on consignment by the consignor to the consignee, belongs to the consignor until the inventory is sold by the consignee.
Regarding the above, Mogu company sent inventory costing $100,000 and out of this, only $76,000 has been sold. The remaining inventory still belongs to the consignor and the amount of this inventory is;
$100,000 - $76,000 = $24,000
Therefore, Mogul would report $24,000 worth of inventories at year end.
Trade discounts are offered to resellers in the marketing channel on the basis of where they are in the channel and: a. The marketing activities they are expected to perform in the future b. The frequency of order c. When orders are placed during the year d. The length of the relationship with the manufacturer
Answer:
a. The marketing activities they are expected to perform in the future.
Explanation:
Marketing can be defined as the process of developing promotional techniques and sales strategies by a firm, so as to enhance the availability of goods and services to meet the needs of the end users or consumers through advertising and market research.
Marketing comprises of all the activities such as, identifying, anticipating set of medium and processes for creating, promoting, delivering, and exchanging goods and services that has value for customers. It typically, involves understanding customer needs, building and maintaining healthy relationships with them in order to scale up your business.
In marketing, trade discounts are offered to resellers in the marketing channel on the basis of where they are in the channel and the marketing activities they are expected to perform in the future.
The subject of the auditing procedure observing is least likely to be: a. procedures. b. inventory taking. c. personnel d. processes. e. physical assets.
Answer:
e. physical assets.
Explanation:
Audit procedures can be regarded as processes or techniques, or methods that is been followed by auditors in obtaining audit evidence that will give them enablement to make a conclusion as regards to set audit objective so they can express their opinion. audit procedures can as well be called audit programs. It should be noted that The subject of the auditing procedure observing is least likely to be physical assets. physical asset can be regarded as item of economic, even exchange value which has a material existence. They are regarded asPhysical assets tangible assets. Example is
properties, equipment,
On November 1, Arvelo Corporation had $39,500 of raw materials on hand. During the month, the company purchased an additional $70,500 of raw materials. During November, $80,000 of raw materials were requisitioned from the storeroom for use in production. These raw materials included both direct and indirect materials. The indirect materials totaled $4,500. Prepare journal entries to record these events. Use those journal entries to answer the following questions: The credits to the Raw Materials account for the month of November total:
Answer:
Arvelo Corporation
a. Journal Entries
Debit Raw materials $70,500
Credit Cash $70,500
To record the purchase of raw materials for cash.
Debit Work in Process $75,500
Credit Raw materials $75,500
To record the requisitioning of raw materials for production.
Debit Manufacturing overhead $4,500
Credit Raw materials $4,500
To record the indirect materials used in production.
b) The credits to the Raw Materials account for the month of November total: $80,000.
Explanation:
a) Data and Analysis:
Beginning balance of raw materials $39,500
Raw materials $70,500 Cash $70,500
Work in Process $75,500 Raw materials $75,500
Manufacturing overhead $4,500 Raw materials $4,500
Terps Corp.'s comparative balance sheet at December 31, 2021 and 2020 reported accumulated depreciation balances of $1,245,000 and $900,000, respectively. Property with a cost of $75,000 and a carrying amount of $57,000 was the only property sold in 2021. Depreciation charged to operations in 2021 was
Answer:
See below
Explanation:
Depreciation charged to operations in 2021 is computed as;
=
What would be the maximum an investor should pay for the common stock of a firm that has no growth opportunities but pays a dividend of $1.36 per year? The required rate of return is 12.5 percent.
a. $11.24
b. $9.52
c. $10.88
d. $10.64
e. $11.47
Answer:
$10.88
Explanation:
Calculation to determine What would be the maximum an investor should pay for the common stock of a firm that has no growth opportunities
Using this formula
Maximum payment for common stock=Dividend/Required rate of return
Let plug in the formula
Maximum payment for common stock=$1.36/.125 Maximum payment for common stock= $10.88
Therefore What would be the maximum an investor should pay for the common stock of a firm that has no growth opportunities is $10.88
If AP sells the toaster ovens for $17 each, how many units will it have to sell to make a profit of $431,000 before taxes
If $60,000.00 is the total sales from selling toaster ovens at $16.00 each, then the total units of toaster ovens sold would be 3,750.00 units. If expenses where given, say for example, 40% of the sales, with a profit before tax of $60,000.00, then total sales should be $84,000.00 equivalent to 5,250 units of toaster ovens.
CWN Company uses a job order costing system and last period incurred $82,000 of actual overhead and $100,000 of direct labor. CWN estimates that its overhead next period will be $73,000. It also expects to incur $100,000 of direct labor. If CWN bases applied overhead on direct labor cost, its predetermined overhead rate for the next period should be:
Answer:
the predetermined overhead rate is 65%
Explanation:
The computation of the predetermined overhead rate is shown below;
The Predetermined overhead rate
= Expected overhead ÷ expected total direct labour cost
= $73,000 ÷ $100,000
= 0.73
= 65%
hence, the predetermined overhead rate is 65%
The same would be considered and relevant
Choice Co. uses a discount rate of 8% in its capital budgeting. Partial analysis of an investment in automated equipment with a useful life of 8 years has thus far yielded a net present value of ($496,541) [a negative number]. This analysis did not include any estimates of the intangible benefits of automating this process nor did it include any estimate of the salvage value of the equipment. (Ignore income taxes.) Use the attached (in the exam introduction) present value tables to determine the appropriate discount factor(s). Use it to the .000 decimal. Or, use your calculator or Excel present value function. Ignoring any cash flows from intangible benefits, how large would the salvage value of the automated equipment have to be to make the investment in the automated equipment financially attractive
Answer:
A. $86,400
B. $919,520
Explanation:
A. Calculation to determine how large would the additional cash flow per year from the intangible benefits have to be to make the investment in the automated equipment financially attractive
Using this formula
Additional cash flows from the intangible benefits = Negative net present value to be offset / Present value factor
Let plug in the formula
Additional cash flows from the intangible benefits = $496,541 / 5.747
Additional cash flows from the intangible benefits = $86,400
Therefore how large would the additional cash flow per year from the intangible benefits have to be to make the investment in the automated equipment financially attractive is $86,400
b. Calculation to determine how large would the salvage value of the automated equipment have to be to make the investment in the automated equipment financially attractive
Using this formula
Automated equipment Salvage value = Negative net present value to the offset /Present value factor
Let plug in the formula
Automated equipment Salvage value= $496,541 / 0.540
Automated equipment Salvage value= $919,520
Therefore how large would the salvage value of the automated equipment have to be to make the investment in the automated equipment financially attractive is $919,520
Dinklage Corp. has 6 million shares of common stock outstanding. The current share price is $84, and the book value per share is $5. The company also has two bond issues outstanding. The first bond issue has a face value of $145 million, a coupon rate of 5 percent, and sells for 95 percent of par. The second issue has a face value of $130 million, a coupon rate of 4 percent, and sells for 107 percent of par. The first issue matures in 24 years, the second in 9 years. Both bonds make semiannual coupon payments.
Required:
a. What are the company's capital structure weights on a book value basis?
b. What are the company's capital structure weights on a market value basis?
Answer:
Dinklage Corp.
a. The company's capital structure by book value:
Weights:
Equity = 9.84%
Debt = 90.16%
b. The company's capital structure by market value:
Weights:
Equity = 64.55%
Debt = 35.45%
Explanation:
a) Data and Calculations:
Outstanding common stock = 6 million shares
Current share price = $84
Book value per share = $5
Total equity book value = $30 million (6,000,000 * $5)
Total equity market value = $504 million (6,000,000 * $84)
First bond's face value = $145 million
Coupon rate = 5%
Selling price = 95% of par
Market value of first bond = $145 * 95% = $137.75 million
Second bond's face value = $130 million
Coupon rate = 4%
Market value = $130 * 107% = $139.1 million
Total market value of bonds = $276.85 million ($137.75 + $139.1)
Book value of bonds = $275 million ($145 + $130)
a. The company's capital structure by book value:
Equity = $30 million
Debt = $275 million
Total firm's value = $305 million
Weights:
Equity = $30/$305 * 100 = 9.84%
Debt = $275/$305 * 100 = 90.16%
b. The company's capital structure by market value:
Equity = $504 million
Debt = $276.85 million
Total firm's value = $780.85 million
Weights:
Equity = $504/$780.85 * 100 = 64.55%
Debt = $276.85/$780.85 * 100 = 35.45%
The following transactions occur for Cardinal Music Academy during the month of October:
a. Provide music lessons to students for $7,500 cash. Purchase prepaid insurance to protect musical equipment over the next year for $3,060 cash.
b. Purchase musical equipment for $10,500 cash. Obtain a loan from a bank by signing a note for $11,000.
d. Obtain a loan from a bank by signing a note for $20,000.
Required:
Record the transactions.
Answer and Explanation:
The journal entries are shown below;
a. cash Dr $7,500
To Service revenue $7,500
(To record the cash receipts )
Prepaid insurance $3,060
To cash $3,060
(To record the cash paid )
b. Musical equipment Dr $10,500
To cash $10,500
(To record the cash paid )
Cash Dr $11,000
To note payable $11,000
(To record the receipt of the loan )
d. Cash Dr $20,000
To note payable $20,000
(To record the receipt of the loan )
Jiffy Co. expects to pay a dividend of $3.00 per share in one year. The current price of Jiffy common stock is $60 per share. What is the cost of internal common equity (retained earnings) if the long-term growth in dividends is projected to be 9 percent indefinitely
Answer:
the cost of the internal common equity is 14%
Explanation:
The computation of the cost of internal common equity is shown below;
Stock Price = Dividend per share ÷ (required rate of return - growth rate)
$60 = $3 ÷ (required rate of return - 0.09)
60 required return - $5.4 = $3
60 required return = $8.4
So, the required return is
= 8.4 ÷ 60
= 14%
Hence, the cost of the internal common equity is 14%
Headland Construction Company, which began operations in 2020, changed from the completed-contract to the percentage-of-completion method of accounting for long-term construction contracts during 2021. For tax purposes, the company employs the completed-contract method and will continue this approach in the future. The appropriate information related to this change is as follows.
Pretax Income from
Percentage-of-Completion Completed-Contract Difference
2020 $875,000 $590,000 $285,000
2021 913,000 476,000 437,000
Required:
a. Assuming that the tax rate is 30%, what is the amount of net income that would be reported in 2020?
b. What entry(ies) are necessary to adjust the accounting records for the change in accounting principle?
Answer:
A.$262,500
B. Dr Construction in Process $285,000
Cr Deferred Tax $85,500
Cr Retained Earnings $199,500
Explanation:
A. Calculation to determine the amount of net income that would be reported in 2020
Using this formula
2020 Net income=Income before tax*Tax rate
Let plug in the formula
2020 Net income=$875,000*30%
2020 Net income=$262,500
Therefore the amount of net income that would be reported in 2020 is $262,500
B. Preparation of the entry(ies) that are necessary to adjust the accounting records for the change in accounting principle
Dr Construction in Process $285,000
Cr Deferred Tax $85,500
(30%*$285,000)
Cr Retained Earnings $199,500
($285,000-$85,500)
(To adjust the accounting records)
Scenario: Suppose there are only two firms in an industry, and their products are perfect substitutes for each other. Each firm had a fixed marginal cost of $5 and zero fixed cost of operation. The highest the consumers of this product are willing to pay for it is $10, and there are 200 consumers in this market. Refer to the scenario above. Suppose Firm 1 and Firm 2 have to come up with a pricing strategy simultaneously. In this case, Firm 1 will charge ________, and firm 2 will charge ____
Answer:
In this case, Firm 1 will charge $5, and firm 2 will charge $5
Explanation:
In a competitive market, where two companies have identical products, The companies try to capture the market by lowering the price of the product to attract the consumers in the market.
Firm 1 and Firm 2 are competitors with identical products and they will try to overcome their competitor. As the production of the product has a marginal cost of $5 and no fixed cost.
hence the price should be more than or equal to the marginal cost of the product to avoid losses.
As per pricing strategy simultaneously, the price should be as follow
Firm 1 Price = $5
Firm 2 Price = $5
Terps Company reported total assets of $2,400,000 and net income of $320,000 for the current year. The company determined that inventory was overstated by $24,000 at the beginning of the year (this was not corrected). What is the corrected amount for total assets and net income for the year
Answer:
$2,400,000 and $344,000
Explanation:
Given the above information,
the corrected amount for total assets at the end of the year would still remain $2,400,000. Reason being that the overstatement of inventory has no effect whatsoever on the asset of the company.
Also, the corrected net income for the year would be ;
= Net income for the year + Over stated inventory
= $320,000 + $24,000
= $344,000
Therefore,
The corrected amount for total assets and net income for the year are $2,400,000 and $344,000 respectively
Terrace Salad issued a 25-year, annual bond with 8 percent coupon rate 15 years ago. The bond currently sells for 105 percent of its face value. What is the pretax cost of debt
Answer:
7.28%
Explanation:
Coupon rate = 8%
Nper = 10 (25-15)
PMT = 80 (1000*8%)
FV = 1000
PV = 1050
Yield to maturity = Rate(Nper, pmt, -pv, fv)
Yield to maturity = Rate(10. 80, -1050, 1000)
Yield to maturity = 0.072789069
Yield to maturity = 7.28%
Thus, the pretax cost of debt is 7.28%.
Joint ventures offer low potential for leveraging a firm's existing competencies because they typically entail a short-term relationship between two or more firms.
A. True
B. False
Answer:
B. False
Explanation:
The main purpose of the joint venture is to help two or more companies so that they are in the position to gain the competitive advantage. So the potential for firm leverage that is existed would be high instead of low due to this reason also
So as per the given situation, the option b is correct
Hence, the option a is not correct
There are different types of business. Joint ventures offer low potential for leveraging a firm's existing competencies is a False statement.
A joint venture is known as when two or more businesses gather their resources and expertise together to achieve a set goal.It is also called a partnership between 2 or more firms where there is significant equity stake by the partners and often resulting in the creation of a new business entity.
Joint ventures uses a good amount of equity investment from each partner and can lead to the establishment of a new separate entity.
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In a responsibility accounting system: Question 6 options: A. Each accounting report contains only (or clearly segregates) those items that are controllable by the responsible manager. B. Each accounting report contains all items allocated to a responsibility center. C. Organized and clear lines of authority and responsibility are only incidental. D. All managers at a given level have equal authority and responsibility. E. All of the above.
Answer:
A. Each accounting report contains only (or clearly segregates) those items that are controllable by the responsible manager.
Explanation:
A responsibility center is a business entity given a specific goals and objectives, procedures and policies, as well as dedicated personnel for generating financial reports in a company.
Bernie is a former executive who is retired. This year Bernie received $190,000 in pension payments and $15,200 of Social Security payments. What amount must Bernie include in his gross income
Answer:
$202,920
Explanation:
Calculation to determine determine What amount must Bernie include in his gross income
Using this formula
Gross income=Pension payments Received+85% of social security benefits
Let plug in the formula
Gross income=$190,000 + ($15,200 * 85%)
Gross income=$190,000+$12,920
Gross income=$202,920
Therefore The amount that Bernie must include in his gross income is $202,920
At the profit-maximizing level of output, this firm ___. rev: 05_15_2018 Multiple Choice generates an economic profit equal to the area of ABED faces a total fixed cost equal to the area of BEFC should shut down generates a loss per unit equal to DE
Answer:
gsgba.kba.
Explanation:
lsnwlnlwnlwns
Ray's hair salon generates income through the sale of hair products and beverages
alongside haircuts and treatments. Identify the term to describe each of the different
products or services that Ray sells.
Answer:
rayy's i dot like it
Explanation:
Investment X offers to pay you $5,500 per year for nine years, whereas Investment Y offers to pay you $8,000 per year for five years. a. Calculate the present value for Investments X and Y if the discount rate is 5 percent. (Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.) b. Calculate the present value for Investments X and Y if the discount rate is 15 percent.
Answer:
Investment X = $39,093.02
Investment Y = $34,635.81
b
Investment X =$26,243.71
Investment y =$26,817.24
Explanation:
Present value is the sum of discounted cash flows
Present value can be calculated using a financial calculator
Investment X
Cash flow each year from year 1 to 9 = $5,500
PV when I is 5% = $39,093.02
PV when I is 15% =$26,243.71
Investment Y
Cash flow each year from year 1 to 5 = $8,000
PV when I is 5% = $34,635.81
PV when I is 15$26,243.71% = $26,817.24
To find the NPV using a financial calculator:
1. Input the cash flow values by pressing the CF button. After inputting the value, press enter and the arrow facing a downward direction.
2. after inputting all the cash flows, press the NPV button, input the value for I, press enter and the arrow facing a downward direction.
3. Press compute
Practice Do It! Review 02 The following information is available for Sunland Company. April 1 April 30 Raw materials inventory $10,000 $13,500 Work in process inventory 5,400 3,710 Materials purchased in April $98,000 Direct labor in April 80,300 Manufacturing overhead in April 156,000 Prepare the cost of goods manufactured schedule for the month of April.
Answer:
Cost of goods manufactured=$332,490
Explanation:
Giving the following information:
April 1 April 30
Raw materials inventory $10,000 $13,500
Work in process inventory 5,400 3,710
Materials purchased in April $98,000
Direct labor in April 80,300
Manufacturing overhead in April 156,000
To calculate the cost of goods manufactured, we need to use the following formula:
cost of goods manufactured= beginning WIP + direct materials + direct labor + allocated manufacturing overhead - Ending WIP
cost of goods manufactured= 5,400 + (10,000 + 98,000 - 13,500) + 80,300 + 156,000 - 3,710
cost of goods manufactured=$332,490
Apt Adapt Inc. is formed to coordinate the design and delivery of projects and products to help communities cope with the effects of climate change. The stated purpose is to have a material positive impact on society and the environment, and to make a profit. Apt Adapt is
Answer:
A benefit corporation.
Explanation:
A corporation can be defined as a corporate organization that has facilities and owns or controls assets used for the production of goods and services in at least one country other than its headquarter (home office) located in its home country.
This ultimately implies that, a corporation is a corporate organization that owns or controls its business in two or more countries. It is considered to be one of the most complicated and expensive type of organization. Generally, a corporation is considered to be perpetual in nature and it is a body that comprises of a group of people such as directors, shareholders etc., who act as a single entity. Also, corporations can be sold through stocks or shares, as a public entity.
In this scenario, Apt Adapt Inc. is a benefit corporation because it was established to coordinate the design and delivery of projects and products that would help communities cope with the effects of climate change.
Hence, Apt Adapt is considered to be a benefit corporation because it has material positive impact on society and the environment, while making a profit.
What are the two types of economic inequality
Explanation:
Two types of economic inequality:
Wealth and income inequality
. An analyst has determined that the intrinsic value of Coca Cola stock is $80 per share using the capitalized earnings model. If the typical P/E ratio in the computer industry is 22, then it would be reasonable to assume the expected EPS of Coca Cola in the coming year is
Answer:
$3.64
Explanation:
We know that :
Price / Earning ratio (P/E ratio) = Price per Share ÷ Earnings per Share
thus :
Earnings per Share = Price per Share ÷ Price / Earning ratio
= $80 ÷ 22
= $3.636 or $3.64
therefore,
the expected EPS of Coca Cola in the coming year is $3.64
The price of the stock at the beginning of 2018 was $56.81 and you sold the stock at $68.14 at the end of the year. What is the dividend yield (use your answer from 3a above), capital gain(loss), and total percentage return
Question Completion:
The total dividends paid is $1,743,400 and the outstanding shares are 1,300,000.
Answer:
a. The dividend per share = $1.34
b. The dividend yield = 1.97%
c. The capital gain = $11.33
d. The total percentage return = 22.3%.
Explanation:
a) Data and Calculations:
Dividends paid = $1,743,400
Outstanding shares = 1,300,000
Dividends per share = $1.34 ($1,743,400/1,300,000)
Dividend yield = Dividend per share/Stock price
= $1.34/$68.14 = 1.97%
Capital gain = $11.33 ($68.14 - $56.81)
Total return = $12.67 ($11.33 + $1.34)
Total percentage return = Total return/Beginning Stock Price * 100
= $12.67/$56.81 * 100
= 22.3%
Oriole Company uses the percentage of receivables method for recording bad debts expense. The accounts receivable balance is $280000 and credit sales are $2810000. Management estimates that 5% of accounts receivable will be uncollectible. What adjusting entry will Oriole Company make if the Allowance for Doubtful Accounts has a credit balance of $2800 before adjustment
Answer:
Dr. Bad debt expense. $11,200
---------To Allowance for doubtful accounts $11,200
Explanation:
Given that:
Accounts receivable balance = $280,000
Total credit sales = $2,810,000
5% of accounts receivables will be bad debt = $280,00 × 5% = $14,000
Credit balance allowance for doubtful account = $2,800 and it must increase to $14,000 I.e $14,000 - $2,800 = $11,200
Adjusting journal entry
Dr Bad debt expense $11,200
-------- Cr Allowance for doubtful accounts $11,200
Whirly Corporation’s contribution format income statement for the most recent month is shown below: Total Per Unit Sales (7,600 units) $ 235,600 $ 31.00 Variable expenses 144,400 19.00 Contribution margin 91,200 $ 12.00 Fixed expenses 54,100 Net operating income $ 37,100 Required: (Consider each case independently): 1. What would be the revised net operating income per month if the sales volume increases by 80 units? 2. What would be the revised net operating income per month if the sales volume decreases by 80 units? 3. What would be the revised net operating income per month if the sales volume is 6,600 units?
Answer:
Whirly Corporation
1. The revised net operating income per month if the sales volume increases by 80 units is:
= $38,060.
2. The revised net operating income per month if the sales volume decreases by 80 units is:
= $ 36,140
3. The revised net operating income per month if the sales volume is 6,600 units is:
= $ 25,100
Explanation:
a) Data and Calculations:
Whirly Corporation's Contribution Format Income Statement for the most recent month:
Total Unit
Total Per Unit Sales (7,600 units) $ 235,600 $ 31.00
Variable expenses 144,400 19.00
Contribution margin 91,200 $ 12.00
Fixed expenses 54,100
Net operating income $ 37,100
1. Revised Net Operating Income per month with increased sales volume by 80:
Total Unit
Total Per Unit Sales (7,680 units) $ 238,080 $ 31.00
Variable expenses 145,920 19.00
Contribution margin 92,160 $ 12.00
Fixed expenses 54,100
Net operating income $ 38,060
2. Revised Net Operating Income per month with decreased sales volume by 80:
Total Unit
Total Per Unit Sales (7,520 units) $ 233,120 $ 31.00
Variable expenses 142,880 19.00
Contribution margin 90,240 $ 12.00
Fixed expenses 54,100
Net operating income $ 36,140
3. The revised net operating income per month if the sales volume is 6,600 units:
Total Unit
Total Per Unit Sales (6,600 units) $ 204,600 $ 31.00
Variable expenses 125,400 19.00
Contribution margin 79,200 $ 12.00
Fixed expenses 54,100
Net operating income $ 25,100
_______________ involves two or more individuals who believe that their attitudes, behaviors, or preferred goals are in opposition.
a. Intrapersonal conflict
b. Interpersonal conflict
c. Intragroup conflict
d. Intergroup conflict
e. Interorganizational conflict
Answer:B
Explanation:
The correct option is B). Interpersonal conflict.
What is Interpersonal conflict?Interpersonal conflict refers to the involvement of two or more individuals who believe that their attitudes, behaviors, or preferred goals are in opposition.
It is different from an intrapersonal conflict, which refers to an internal conflict with yourself.
Basically, interpersonal conflict is a natural outcome between human interaction.
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