Answer and Explanation:
The explanations are as follows:
a) If the goods held on consignment for someone else so the same would not be involved as it would be included in S Corp inventory
(b) It Should be included.
(c) It Should be included.
(d) It Should not be included.
(e) It Should not be included. It would be included in supplier inventory
(f) It Should be included.
(g) It should be included in the office supplies only
Fundamental analysis shows that stock in Garske Software Corporation has a present value that is higher than its price. a. This stock is undervalued; you should consider adding it to your portfolio. b. This stock is undervalued; you shouldn't consider adding it to your portfolio. c. This stock is overvalued; you should consider adding it to your portfolio. d. This stock is overvalued; you shouldn't consider adding it to your portfolio.
Answer: a. This stock is undervalued; you should consider adding it to your portfolio.
Explanation:
Since, we are informed that the stock in Garske Software Corporation has a present value that is higher than its price, this implies that the value of the stock in Garske Software is higher than the price, it means the stock is undervalued and it should be considered adding to the portfolio.
Therefore, the correct option is A
With regard to trading location, Multiple Choice none of the options forward contracts are traded competitively on organized exchanges. futures contracts are traded by bank dealers via a network of telephones and computerized dealing systems. futures contracts are traded competitively on organized exchanges.
Answer:
futures contracts are traded competitively on organized exchanges.
Explanation:
Secondary market can be defined as a market where various investors sell and buy securities from other investors.
Some examples of secondary market around the world are New York Stock Exchange (NYSE), NASDAQ, London Stock Exchange (LSE) and National Stock Exchange (NSE).
On the other hand, the primary market refers to the market where these securities that are being sold are issued or created
With regard to trading location, futures contracts are traded competitively on organized exchanges.
Woidtke Manufacturing's stock currently sells for $25 a share. The stock just paid a dividend of $1.60 a share (i.e., D0 = $1.60), and the dividend is expected to grow forever at a constant rate of 5% a year. What stock price is expected 1 year from now? Do not round intermediate calculations. Round your answer to the nearest cent. $ What is the estimated required rate of return on Woidtke's stock (assume the market is in equilibrium with the required return equal to the expected return)? Do not round intermediate calculations. Round the answer to two decimal places. %
Answer:
$26.25
11.72%
Explanation:
Stock price next year = current price x ( 1 + growth rate)
$25 x (1.05) = $26.25
According to the constant growth dividend growth model :
P = D1 / ( r - g)
P = price of the stock
D1 = next dividend = current dividend x (1 +growth rate)
r = required rate of return
g = growth rate
$25 = $1.60 x ( 1.05) / r - 0.05
$25 = 1.68 / r - 0.05
$25 x ( r - 0.05) = 1.68
r = 0.1172
r = 11.72%
Bramble Company sells goods to Danone Inc. by accepting a note receivable on January 2, 2020. The goods have a sales price of $569,900 (cost of $500,000). The terms are net 30. If Danone pays within 5 days, however, it receives a cash discount of $9,900. Past history indicates that the cash discount will be taken. On January 28, 2020, Danone makes payment to Bramble for the full sales price.
Required:
Prepare the Journal entry(ies) to record the sale and related cost of goods sold for Jupiter Company on January 2, 2020.
Answer:
Because past history has shown that Danone will take the cash discount, it will be removed from the journal entry:
= Notes payable - discount
= 569,900 - 9,900
= $560,000
Date Account Title Debit Credit
Jan. 2, 2020 Notes Receivable $560,000
Sales Revenue $560,000
Cost of Goods sold $500,000
Inventory $500,000
Vaughn Manufacturing sells its product for $60 per unit. During 2019, it produced 60000 units and sold 50000 units (there was no beginning inventory). Costs per unit are: direct materials $14, direct labor $15, and variable overhead $5. Fixed costs are: $720000 manufacturing overhead, and $90000 selling and administrative expenses. The per unit manufacturing cost under variable costing is
Answer:
$2.00
Explanation:
Consider Variable Manufacturing Costs only.
The per unit manufacturing cost under variable costing is $2.00
On April 1, 2015, the City of Southern Ponds issued $3,500,000 in 4% general obligation, tax supported bonds at 101 for the purpose of constructing a new police station. The premium was transferred to a debt service fund. A total of $3,490,000 was used to construct the police station, which was completed before December 31, 2015, the end of the fiscal year. The
remaining funds were transferred to the debt service fund. The bonds were dated April 1, 2015, and paid interest on October 1 and April 1. The first of 20 equal annual principal payments of $175,000 is due April 1, 2016.
What amount would be reported as debt service expenditures for 2015?
A) $ -0-
B) $ 70,000.
C) $140,000.
D) $245,000.
Answer:
B) $ 70,000.
Explanation:
Debt service expense
Debt service expense is the interest expense incurred to avail the debt services from another entity.
Debt service expense can be calculated using the following formula
Debt service expense = Face value of Bonds x Interest rate x Semiannual fraction
Where
Face value of bonds = $3,500,000
Interest rate = 4%
Semiannual fraction = 6 / 12 = 1/ 2
placing values in the formula
Debt service expense = $3,500,000 x 4% x 1/2
Debt service expense = $70,000
Weighted Average Cost Flow Method Under Perpetual Inventory System The following units of a particular item were available for sale during the calendar year: Jan. 1 Inventory 15,000 units at $60.00 Mar. 18 Sale 12,000 units May 2 Purchase 27,000 units at $62.00 Aug. 9 Sale 22,500 units Oct. 20 Purchase 10,500 units at $64.20 The firm uses the weighted average cost method with a perpetual inventory system. Determine the cost of merchandise sold for each sale and the inventory balance after each sale. Present the data in the form illustrated in Exhibit 5. Round unit cost to two decimal places, if necessary.
Answer:
Jan. 1 Inventory 15,000 units at $60.00
Mar. 18 Sale 12,000 units
Cost of goods sold = 12,000 x $60 = $720,000
Inventory balance = $60 x 3,000 = $180,000
May 2 Purchase 27,000 units at $62.00
Aug. 9 Sale 22,500 units
Cost of goods sold = [($180,000 + $1,674,000) / 30,000] x 22,500 = $1,390,500
Inventory balance = [($180,000 + $1,674,000) / 30,000] x 7,500 = $463,500
Oct. 20 Purchase 10,500 units at $64.20
Susie buys two goods: rounds of golf and massages.Suppose that the price of a round of golf is $20 and the price of a massage is $30.In a typical week,Susie will play two rounds of golf,getting 20 units of satisfaction from the second round.She normally buys three massages each week,with the third giving her 30 units of satisfaction.If she were to buy a fourth massage in a week,it would give her 20 units of satisfaction.If the price of massages is reduced to $15,which of the following outcomes might we expect to occur?
A) Susie would leave her consumption choices unchanged because of diminishing marginal utility in the consumption of massages.
B) Susie would buy more massages and fewer rounds of golf,as predicted by the income effect.
C) Susie would buy more massages and more rounds of golf,as predicted by the substitution effect.
D) Susie would buy more massages and fewer rounds of golf,as predicted by the substitution effect.
Answer:
D) Susie would buy more massages and fewer rounds of golf,as predicted by the substitution effect.
Explanation:
Let's check the utility that Susie gets from consuming these products.
The second round of golf gives her 20 units of satisfaction at $20 = 20/20 = 1
The third massage gives her 30 units of satisfaction at $30 = 30/30 = 1
But now the price the price for massage has come down to $15. The ratio of their prices would be
20/15 = 1.333
1.3 is greater than 1
So she should substitute golf for massages
QUESTION 1 of 10: When buying an existing business, it is important to:
a) Find out why the business is for sale
b) Review existing financial statements
c) Both a) and b)
d) None of the above
Answer:
C
Explanation:
Consumer behavior is generally influenced by four elements. Whether or if your target customer purchases your goods depends on these considerations. They are social, psychological, personal, and cultural. Thus, option C is correct.
What is required to purchase an existing business?The examination of a business can be broken down into four clusters: the seller's background and motivations, any legal issues that may impact the operation.
The company's financial situation, and the company's standing and future prospects in its industry (its products, services, and future).
This is because an established business already has a proven track record of success. Higher chance of surviving, Numerous new businesses fail during their first few years of operation.
Therefore, Review existing financial statements and find out why the business is for sale.
Learn more about existing business here:
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Explain why unions play a reduced role in the US economy today.
Answer:
I won`t lie, unions are useless. They got everything they need.
Explanation:
There used to working conditions for absolute terrible . Then unions took action, boom done. Now unions is all about money. The leaders get rich off of people who want better pay like 15 bucks to flip a burger. That is just well, sad to be payed 15 an hour to flip burgers at a fast food place meant for high schoolers. See what I am saying?
Answer:
Unions are good for all workers. They improve wages, benefits, and working conditions, and helped create the middle class. Unions raise wages for all workers. ... Even today, union workers earn significantly more on average than non-union counterparts and union employers are more likely to provide benefits
Explanation:
Edge 2021
Albertson Fabricators has established the following labor standards for a particular product: Standard labor-hours per unit of output 8.7 hours Standard labor rate $15.60 per hour The following data pertain to operations concerning the product for the last month: Actual hours worked 8,600 hours Actual total labor cost $131,580 Actual output 850 units What is the labor rate variance for the month
Answer:
the labor rate variance is $2,580 unfavorable
Explanation:
The computation of the labor rate variance is shown below:
= Actual labor cost - (standard rate × actual hours)
= $131,580 - ($15.60 × 8,600 hours)
= $131,580 - $134,160
= $2,580 unfavorable
Hence, the labor rate variance is $2,580 unfavorable
The manager of a T-shirt company is considering investing in a new embroidery machine that costs $8,500, and the depreciation rate is 6.5% per year. The expected increase in next year’s revenue as a result of the investment is $1,500. For what values of the interest rate (r) should the company make this investment? Specify the answer to two places beyond the decimal point. Any r below %.
Answer:
The interest rate will be "11.147%".
Explanation:
The given values are:
Cost of machine,
= $8500
Depreciation rate,
= 6.5%
Increase in income,
= $1500
Now,
⇒ [tex]Increase \ in \ income=Cost \ of \ machine\times \frac{R}{100}+ Cost \ of \ machine\times \frac{Depreciation \ rate}{100}[/tex]
On substituting the values, we get
⇒ [tex]1500=8500\times \frac{R}{100}+8500\times \frac{6.5}{100}[/tex]
⇒ [tex]1500=85R+552.5[/tex]
On subtracting "552.5" from both sides, we get
⇒ [tex]1500-552.5=85R+552.5-552.5[/tex]
⇒ [tex]947.5=85R[/tex]
⇒ [tex]R=\frac{947.5}{85}[/tex]
⇒ [tex]R=11.147[/tex]%
Memphis Company anticipates total sales for April, May, and June of $970,000, $1,070,000, and $1,120,000 respectively. Cash sales are normally 20% of total sales. Of the credit sales, 40% are collected in the same month as the sale, 55% are collected during the first month after the sale, and the remaining 5% are not collected. Compute the amount of cash received from total sales during the month of June.Multiple Choice$829,200.$730,400.$983,200.$1,053,200.$769,200.
Answer:
Total cash collection= $1,053,200
Explanation:
Giving the following information:
Sales:
April $970,000
May $1,070,000
June $1,120,000
Cash sales are normally 20% of total sales. Of the credit sales, 40% are collected in the same month as the sale, 55% are collected during the first month after the sale, and the remaining 5% are not collected.
To calculate the total cash collection for June, we need to use the following structure:
Cash collection June:
Sales in cash from June= (1,120,000*0.2)= 224,000
Sales in account from June= (1,120,000*0.8)*0.4= 358,400
Sales in account from May= (1,070,000*0.8)*0.55= 470,800
Total cash collection= $1,053,200
The following are the transactions for the month of July.
Units Unit Cost Unit Selling Price
July 1 Beginning Inventory 41 $10
July 13 Purchase 205 12
July 25 Sold (100 ) $16
July 31 Ending Inventory 146
Required:
Calculate cost of goods available for sale and ending inventory, then sales, cost of goods sold, and gross profit, under FIFO. Assume a periodic inventory system is used.
Answer:
DO A BARREL ROLL
Explanation:USE THE BRAKE
Europa Company manufactures only one product. Presented below is direct labor information for November. Standard direct labor hours per unit of product 3.20 Number of finished units produced 6,500 Standard wage rate per direct labor hour (SP) $ 19.20 Total direct labor payroll for the period $ 359,424 Actual wage rate per direct labor hour worked (AP) $ 16.00 The actual direct labor hours worked (AQ) during November (rounded to the nearest whole number) was:
Answer:
22,464 hours
Explanation:
Calculation to determine The actual direct labor hours worked (AQ) during November
Using this formula
Actual direct labor hours worked (AQ) = Total labor cost ÷ Actual wage rate
Let plug in the formula
Actual direct labor hours worked (AQ) = $359,424 ÷ 16
Actual direct labor hours worked (AQ) = 22,464 hours
Therefore The actual direct labor hours worked (AQ) during November will be 22,464 hours
On July 15, Piper Co. sold $24,000 of merchandise (costing $12,000) for cash. The sales tax rate is 4%. On August 1, Piper sent the sales tax collected from the sale to the government. Record entries for the July 15 and August 1 transactions. On November 3, the Milwaukee Bucks sold a six game pack of advance tickets for $720 cash. On November 20, the Bucks played the first game of the six game pack (this represented one-sixth of the advance ticket sales). Record the entries for the November 3 and November 20 transactions.
Answer:
July 15
Dr Cash $24,960
Cr Sales $24,000
Cr Sales Taxes Payable $960
Dr Cost of Goods Sold $12,000
Cr Merchandise Inventory $12,000
On August 1
Dr Sales Taxes Payable $960
Cr Cash $960
On November 3
Dr Cash $720
Cr Unearned Ticket Revenue $720
On November 20
Dr Unearned Ticket Revenue $120
Cr Ticket Revenue $120
Explanation:
Preparation of the journal entries
July 15
Dr Cash $24,960
($24,000+$960)
Cr Sales $24,000
Cr Sales Taxes Payable $960
($24,000*4%)
Dr Cost of Goods Sold $12,000
Cr Merchandise Inventory $12,000
On August 1
Dr Sales Taxes Payable $960
Cr Cash $960
($24,000*4%)
On November 3
Dr Cash $720
Cr Unearned Ticket Revenue $720
On November 20
Dr Unearned Ticket Revenue $120
Cr Ticket Revenue $120
(1/6*$720)
Share Issuances for Cash Finlay. Inc., issued 8.000 shares of $50 par value preferred stock :u $68 per ~hare and 12.000 shares of no-par value common stock at $I 0 per share. The common Mock ha~ no Mated value. All issuances were for cash. L02, 4
a. Determine the financial statement effect of the share issuances.
b. Determine the financial statement effect of the issuance of the common stock a-.-.uming that - it had a st:ued value of $5 per share.
c. Determine the financial statement effect of the issuance of the common stock assumin
Answer:
See the attached excel file for all the the financial statement effect.
Explanation:
Note: This question is not complete and it has some errors. The errors are therefore fixed and the complete question presented before answering the question as follows:
Share Issuances for Cash: Finlay. Inc., issued 8,000 shares of $50 par value preferred stock at $68 per share and 12,000 shares of no-par value common stock at $10 per share. The common stock has no stated value. All issuances were for cash.
a. Determine the financial statement effect of the share issuances (preferred and common).
b. Determine the financial statement effect of the issuance of the common stock assuming that it had a stated value of $5 per share.
c. Determine the financial statement effect of the issuance of the common stock assuming that it had a stated value of $1 per share.
The explanation of the answer is now given as follows:
a. Determine the financial statement effect of the share issuances (preferred and common).
Note: See the attached excel file for the the financial statement effect of the share issuances (preferred and common).
In the attached excel file, the following workings are used:
w.1: Preferred stock = Number of preferred shares issued * Preferred share par value = 8,000 * $50 = $400,000
w.2: Paid-In Capital in Excess of Par - Preferred stock = (Number of preferred shares issued * (Preferred share price per share - Preferred share par value) = 8,000 * ($68 - $50) = $144,000
w.3: Common stock = Number of common shares issued * Common stock share price per share = 12,000 * $10 = $120,000
b. Determine the financial statement effect of the issuance of the common stock assuming that it had a stated value of $5 per share.
Note: See the attached excel file for the financial statement effect of the issuance of the common stock .
In the attached excel file, the following workings are used:
w.4: Common stock = Number of common shares issued * Common share par value = 12,000 * $5 = $60,000
w.5: Paid-In Capital in Excess of Par - Common stock = (Number of common shares issued * (Common share price per share - Common share par value) = 12,000 * ($10 - $5) = $60,000
c. Determine the financial statement effect of the issuance of the common stock assuming that it had a stated value of $1 per share.
Note: See the attached excel file for the financial statement effect of the issuance of the common stock .
In the attached excel file, the following workings are used:
w.6: Common stock = Number of common shares issued * Common share par value = 12,000 * $1 = $12,000
w.9: Paid-In Capital in Excess of Par - Common stock = (Number of common shares issued * (Common share price per share - Common share par value) = 12,000 * ($10 - $1) = $108,000
All of the following are true statements regarding Treasury Bills EXCEPT:A T-Bills are issued in bearer form in the United StatesB T-Bills are registered in the owner's name in book entry formC T-Bills are issued at a discountD T-Bills are non-callable
Answer: A T-Bills are issued in bearer form in the United States
Explanation:
T-Bills are indeed registered in the owner's name in a book entry and the owner's name is acquired electronically.
T-Bills are also issued at a discount and come back to par at maturity which means that the gain on a T-Bill is a capital gain.
T-Bills are also non-callable. The only false statement here therefore is that T-Bills are issued in bearer form in the U.S..
Suppose that you have an extra U.S. $1,000,000 to invest for six months. You are considering the purchase of U.S. T-bills that yield 1.810 percent (that's a six month rate, not an annual rate by the way) and have a maturity of 26 weeks. The spot exchange rate is 200 Won/$, and the six month forward rate is 220 Won/$, . The interest rate in South Korea (on an investment of comparable risk) is 13 percent. What is your strategy?
Answer:
The strategy is to convert the U.S. $1,000,000 into Won at the spot exchange rate of 200 Won/$, and then inevest it in South Korea by hedging with a short position in the forward contract.
Explanation:
From the question, the following facts can be obtained:
1. The 13 percent interest rate in South Korea (on an investment of comparable risk) is greater than the 1.810 percent (that's a six month rate, not an annual rate) U.S. T-bills.
2. The six month forward rate of 220 Won/$ is greater than the spot exchange rate of 200 Won/$.
Based on the 2 facts above, the best strategy is to convert the U.S. $1,000,000 into Won at the spot exchange rate of 200 Won/$, and then inevest it in South Korea by hedging with a short position in the forward contract.
Special Order Poppy has received a special order for 1,000 units of its product at a special price of $125. The product currently sells 18,000 units for $150 and has the following manufacturing costs:
Per unit Direct materials $45
Direct labor 30
Variable manufacturing overhead 35
Fixed manufacturing overhead 25
Unit cost $135
Assume that Poppy has sufficient capacity to fill the order without harming normal production and sales.
a. If Poppy accepts the order, what effect will the order have on the company’s short-term profit?
b. If Poppy accepts the order and fills it completely, what effect will the order have on the company’s short-term profit?
Answer:
Results are below.
Explanation:
1) Because it is a special offer, and there is unused capacity, we will not take into account the fixed costs:
Effect on income= 1,000*125 - 1,000*(45 + 30 + 35)
Effect on income= $15,000
2) Now, the company doesn't have unused capacity. It only has 500 units in excess. We have to take into account the fixed costs and the original selling price of the units.
Effect on income= 1,000*125 - 1,000*(45 + 30 + 35) - 500*(25 + 25)
Effect on income= -$10,000
Cool Sky reports the following costing data on its product for its first year of operations. During this first year, the company produced 46,000 units and sold 38,000 units at a price of $130 per unit.
Manufacturing costs
Direct materials per unit $54
Direct labor per unit $20
Variable overhead per unit $6
Fixed overhead for the year $506,000
Selling and administrative costs
Variable selling and administrative cost per unit $12
Fixed selling and administrative cost per year $115,000
Required:
Assume the company uses absorption costing. Determine its product cost per unit.
Answer:
Unitary costs= $91
Explanation:
Giving the following information:
Direct materials per unit $54
Direct labor per unit $20
Variable overhead per unit $6
Fixed overhead for the year $506,000
The absorption costing method includes all costs related to production, both fixed and variable. The unit product cost is calculated using direct material, direct labor, and total unitary manufacturing overhead.
Unitary costs= (506,000 / 46,000) + 54 + 20 + 6
Unitary costs= $91
There are currently 487 students enrolled in Webster Elementary School, and the number of students is decreasing at the rate of 16 students per year. Currently the annual expense to educate one student is $1,256, and the expense to educate one student is increasing at the rate of $36 per year. Use the product rule to determine the rate at which the total expense to educate the students at Webster Elementary School is currently changing per year.
Answer:
The total expense to educate the students at Webster Elementary School is currently changing per year = $2564
Explanation:
Given - There are currently 487 students enrolled in Webster Elementary School, and the number of students is decreasing at the rate of 16 students per year. Currently the annual expense to educate one student is $1,256, and the expense to educate one student is increasing at the rate of $36 per year.
To find - Use the product rule to determine the rate at which the total expense to educate the students at Webster Elementary School is currently changing per year.
Proof -
Total number of students = 487
Students decreasing rate per year = 16 students
Annual expense to educate 1 student = $ 1256
The increasing rate for 1 student per year = $ 36
Now,
Total increasing cost = 487 × 36 = $ 17532
Now,
Total cost of decreasing students per year = $ 1256 ×16 = $ 20096
Now,
Rate of change = $ 20096 - $ 17532 = $2564
∴ we get
The total expense to educate the students at Webster Elementary School is currently changing per year = $2564
Preparing a consolidated income statement - with noncontrolling interest, but AAP or intercompany profits
A parent company purchased an 70% interest in its subsidiary several years ago with no AAP (i.e., purchased at book value). Each reports the following income statement for the current year, as shown in part b. below.
b. Prepare the consolidated income statement for the current year.
Elimination Entries
Parent Subsidiary Dr. Cr. Consolidated
Income statement:
Sales $6,000,000 $900,000
Cost of goods sold (4,200,000) (540,000)
Gross profit 1,800,000 360,000
Income (loss) from subsidiary 88,2000 0
Operating expenses (1,140,000) (234,000)
Net income $748,200 $126,000
Net income attributable to noncontrolling interests
Net income attributable to parent
Answer:
Consol. Income Parent Subsidiary Elimination entries Consolidated
statement Dr Cr
Sales 6000000 900000 6900000
COGS -4200000 -540000 -4740000
Gross profit 1800000 360000 2160000
Income (loss) 88200 0 88200 0
from subsidiary
Operating -1140000 -234000 -1374000
expense
Net income 748200 126000 88200 786000
Net income attributable to 37800 37800
non-controlling interests*
Net income attributable to Parent 748200
Workings:
Net income attributable to non-controlling interests = 126000*30% = 37800
Identify future taxable amounts and future deductible amounts.
Listed below are 10 causes of temporary differences. For each temporary difference, indicate (by letter) whether it will create future deductible amounts (D) or future taxable amounts (T)
Temporary Difference
1. Accrual of loss contingency; tax-deductible when paid.
2. Newspaper subscriptions; taxable when cash is received, recognized for financial reporting when the performance obligation is satisfied.
3. Prepaid rent; tax-deductible when paid.
4. Accrued bond interest expense; tax-deductible when paid.
5. Prepaid insurance; tax-deductible when paid.
6. Unrealized loss from recording investments at fair value; tax-deductible when investments are sold.
7. Warranty expense; estimated for financial reporting when products are sold; deducted for tax purposes when paid.
8. Advance rent receipts on an operating lease as the lessor; taxable when received.
9. Straight-line depreciation for financial reporting; accelerated depreciation for tax purposes.
10. Accrued expense for employee vacation days not yet taken; tax deductible when employee takes vacation in future.
Answer:
1. Accrual of loss contingency; tax-deductible when paid
Identification: Deductible amounts (D)
2. Newspaper subscriptions; taxable when cash is received, recognized for financial reporting when the performance obligation is satisfied.
Identification: Deductible amounts (D)
3. Prepaid rent; tax-deductible when paid
Identification: Future taxable amounts (T)
4. Accrued bond interest expense; tax-deductible when paid
Identification: Deductible amounts (D)
5. Prepaid insurance; tax-deductible when paid
Identification: Future taxable amounts (T)
6. Unrealized loss from recording investments at fair value; tax-deductible when investments are sold
Identification: Deductible amounts (D)
7. Warranty expense; estimated for financial reporting when products are sold; deducted for tax purposes when paid
Identification: Deductible amounts (D)
8. Advance rent receipts on an operating lease as the lessor; taxable when received
Identification: Deductible amounts (D)
9. Straight-line depreciation for financial reporting; accelerated depreciation for tax purposes
Identification: Future taxable amounts (T)
10. Accrued expense for employee vacation days not yet taken; tax deductible when employee takes vacation in future
Identification: Deductible amounts (D)
What is the interest rate charged on the unpaid balance of a credit card called?
The competitive test that a business plan must pass to attract financing from lenders and investors involves proving ________. Group of answer choices that the business venture will provide lenders and investors a high probability of repayment or an attractive rate of return that the company can gain a competitive advantage over its key competitors that a market for the company's product or service actually does exist and that the company can actually build it for the cost estimates included in the plan that the industry in which the business will compete is growing faster than the overall economy and has room for more competitors
Answer:
that the company can gain a competitive advantage over its key competitors
Explanation:
Competitive Testing refers to a tool that is used to analyze various products and services from the perspective of the user.
The competitive test that a business plan must pass to attract financing from lenders and investors involves proving that the company can gain a competitive advantage over its key competitors.
Becton Labs, Inc., produces various chemical compounds for industrial use. One compound, called Fludex, is prepared using an elaborate distilling process. The company has developed standard costs for one unit of Fludex, as follows: Standard Quantity Standard Price or Rate Standard Cost Direct materials 2.50 ounces $ 28.00 per ounce $ 70.00 Direct labor 0.50 hours $ 13.00 per hour 6.50 Variable manufacturing overhead 0.50 hours $ 3.60 per hour 1.80 $ 78.30 During November, the following activity was recorded relative to production of Fludex: a. Materials purchased, 13,500 ounces at a cost of $361,800. b. There was no beginning inventory of materials; however, at the end of the month, 2,900 ounces of material remained in ending inventory. c. The company employs 21 lab technicians to work on the production of Fludex. During November, they worked an average of 140 hours at an average rate of $11.50 per hour. d. Variable manufacturing overhead is assigned to Fludex on the basis of direct labor-hours. Variable manufacturing overhead costs during November totaled $4,400. e. During November, 4,200 good units of Fludex were produced . Required: For direct materials: a. Compute the price and quantity variances. (Round your "price per ounce" answers to 2 decimal places. Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance).) b. The materials were purchased from a new supplier who is anxious to enter into a long-term purchase contract. Would you recommend that the company sign the contract?
Answer:
A. Materials price variance 16,200 F
Materials quantity variance 2,800 U
B. Yes
Explanation:
A. Computation for the price and quantity variances For direct materials
Calculation for Materials price variance
Materials price variance=361,800-(13,500*28)
Materials price variance=361,800-378,000
Materials price variance=16,200 FAVOURABLE
Calculation for Materials quantity variance
First step is to calculate Actual materials used
Actual materials used=13,500-2,900
Actual materials used=10,600
Now let compute the Materials quantity variance
Materials quantity variance=28*(10,600-4,200*2.5)
Materials quantity variance=2,800
UNFAVORABLE
Therefore the price will be 16,200 FAVOURABLE and quantity variances will be 2,800 UNFAVORABLE For direct materials
B. Based on the above calculation I Would recommend that the company sign the contract because Materials variance is Favorable
Shmenson Company uses the periodic inventory system. Sales for 2020 were $470,000 while operating expenses were $175,000. Beginning and ending inventories for 2020 were $70,000 and $60,000, respectively. Net purchases were $180,000 while freight in was $15,000. The net income or loss for 2020 was:
Answer:
The net income for 2020 was $90,000
Explanation:
Shmenson Company
Income Statement for the year ended 2020
Sales $470,000
Less Cost of Sales
Beginning Inventories $70,000
Add Net purchases $180,000
Add Freight In $15,000
Less Ending Inventories ($60,000) ($205,000)
Gross Profit $265,000
Less Expenses
Operating expenses ($175,000)
Net Income $90,000
Conclusion
Thus, the net income for 2020 was $90,000.
The owner of a fast-food franchise has exclusive rights to operate in a medium-size metropolatin area. The owner currently has a single outlet open, which has proved to be very popular, and there are often waiting lines of customers. The owner is therefore considering opening one or more outlets in the area. What are the key factors that the owner should investigate before making a final decision
Answer:
The key factors that the owner should look at are:
Estimated budget for opening the new restaurant. The owner has to pay for each franchise restaurant, plus the equipment, furniture, and rent. Target market and potential demand. The restaurant current demand is very high, but will it be high if another restaurant opens.Location is extremely important for any business, and a restaurant is not the exception.During the course of your examination of the financial statements of Trojan Corporation for the year ended December 31, 2018, you come across several items needing further consideration. Currently, net income is $87,000.
a. An insurance policy covering 12 months was purchased on October 1, 2018, for $16,200. The entire amount was debited to Prepaid Insurance and no adjusting entry was made for this item in 2018.
b. During 2018, the company received a $2,700 cash advance from a customer for services to be performed in 2019. The $2,700 was incorrectly credited to Service Revenue.
c. There were no supplies listed in the balance sheet under assets. However, you discover that supplies costing $2,100 were on hand at December 31, 2018.
d. Trojan borrowed $57,000 from a local bank on September 1, 2018. Principal and interest at 9% will be paid on August 31, 2019. No accrual was made for interest in 2018.
Answer:
$76,440
Explanation:
Calculation to determine the proper amount of net income as of December 31, 2018
Net income $87,000
Less Adjusted for insurance ($4,050)
($16,200*3/12)
Less Adjusted for deferred income ($2,700)
Less Adjusted for supplies ($2,100)
Less Adjusted for interest ($1,710)
($57,000*9%*4/12)
Net income (Adjusted) $76,440
Therefore The the proper amount of net income as of December 31, 2018 will be $76,440