Answer:
Merline Manufacturing
MERLINE MANUFACTURING Budgeted Income Statement For Months of January, February, and March, 2017
December January February March
Sales $1,420,000 $1,397,000 $1,536,700 $1,690,370
Cost of goods sold 600,000 660,000 726,000 798,600
Gross profit 820,000 $737,000 $810,000 $891,770
Operating expenses:
Sales commissions (10%) 142,000 139,700 153,670 169,037
Advertising 224,000 257,600 257,600 257,600
Store rent 25,200 25,200 25,200 25,200
Administrative salaries 46,000 46,000 46,000 46,000
Depreciation—
Office equipment 56,000 56,000 56,000 56,000
Other expenses 13,200 13,200 13,200 13,200
Total expenses 506,400 537,700 551,670 567,037
Net income $313,600 $199,300 $258,330 $324,733
Explanation:
a) Data:
MERLINE MANUFACTURING Income Statement For Month Ended December 31, 2017
December
Sales $1,420,000
Cost of goods sold 600,000
Gross profit 820,000
Operating expenses:
Sales commissions (10%) 142,000
Advertising 224,000
Store rent 25,200
Administrative salaries 46,000
Depreciation—Office equipment 56,000
Other expenses 13,200
Total expenses 506,400
Net income $313,600
b) Calculations:
Sales:
January = $1,420,000/$142 x 1.1 x $127 = $1,397,000
Sales unit = 11,000 (10,000 x 1.1)
February = 11,000 x 1.1 x $127 = $1,536,700
Sales unit = 12,100 (11,000 x 1.1)
March = 12,100 x 1.1 x $127 = $1,690,370
Sales unit = 13,310 12,100 x 1.1)
c) Advertising = $224,000 x 1.15 = $257,600
d) Cost of goods sold:
January = $660,000 (11,000 x $60)
February = $726,000 (12,100 x $60)
March = $798,600 (13,310 x $60)
e) Sales commission for each month is 10% of sales for the month.
f) Budgeted income statements are summaries for a period based on estimated incomes and expenses. They are useful in helping management to make projections and production decisions that will achieve desired outcomes. From these budgeted statements, management may decide to retain the December selling price and units and not increase advertising costs since the achieved net income did not improve over December's performance until March.
A buyer and a seller enter into a real estate sales contract. Under the contract's terms, the buyer will pay the seller $500 a month for 10 years. The seller will continue to hold legal title, while the buyer will live in the home and pay all real estate taxes, insurance premiums, and regular upkeep costs. What kind of contract do the buyer and seller have
Answer: Land Sales Contract
Explanation:
Land Sales contract are a way to buy a property for people who would otherwise be unable to buy one because they were unable to get a mortgage or are running low in funds.
It works by the buyer paying the seller a certain amount of money for a period of time according to an agreement. During this period of payment, the seller continues to hold the legal rights to the property and then passes it to the buyer when they are finished paying. In this scenario therefore, the seller effectively plays the role of a mortgage bank.
Consider a service company that provides carpet cleaning and uses straight-line depreciation. Classify the cost of the depreciation on the carpet cleaning machines.
a. Fixed
b. Indirect
Answer:
Both :
a. Fixed and,
b. Indirect
Explanation:
The depreciation expense on production machinery form part of the product or service cost.
The cost however, can not be traced to the product or service that is why it is an Indirect cost as opposed to the direct costs which can be traced directly on the product or service.
Straight line method charges a fixed amount of depreciation thus the depreciation is a fixed charge.
9. The risk-free rate and the expected market rate of return are 5.6% and 12.5%, respectively. According to the capital asset pricing model (CAPM), the expected rate of return on a security with a beta of 1.25 is equal to
Answer:
21.2%
Explanation:
CAPM = risk free rate +( beta x expected market return)
5.6% + (1.25 x 12.5%) = 21.2%
The TARP program injected capital or equity in commercial banks, which alleviated some of their insolvency issues. Group of answer choices True False
Answer: True
Explanation:
During the 2008 financial crisis, The Troubled Asset Relief Program (TARP) was put in place by the United States Treasury.
This was done by the Department of the Treasury which pumped money into the banks that were failing and other businesses. They bought equity and assets.
Pooler Corporation is working on its direct labor budget for the next two months. Each unit of output requires 0.15 direct labor-hours. The direct labor rate is $7.00 per direct labor-hour. The production budget calls for producing 6,500 units in April and 6,200 units in May. If the direct labor work force is fully adjusted to the total direct labor-hours needed each month, what would be the total combined direct labor cost for the two months?
Answer:
$13,335
Explanation:
Required production in units for April and May are 6,500 units and 6,200 units respectively.
Direct labor hours needed is 0.15 for both months.
Total direct labor hours needed for each month would be;
April
= 6,500 units × 0.15
= 975
May
=6,200 units × 0.15
= 930
Direct labor rate per hour for each months is $7
Total direct labor cost for April would be;
= $7 × 975
= $6,825
Total direct labor cost for May would be;
= $7 × 930
= $6,510
Therefore, total direct labor cost for both months April and May would be;
= $6,825 + $6,510
= $13,335
A production possibilities frontier (PPF) graph would be used when a business wants to: A. determine outputs given the inputs available. B. create pricing systems. C. understand consumer demand. D. project rates of currency exchanges given political situations.
Answer:D duh
Explanation:
With political exchange economy grows and the rest of the solutions are solved
The country of Morson has decided to privatize the state-owned cable television company. How can the country help this newly privatized industry succeed
Answer:
Government Support
Explanation:
Privatization is better for a country. It minimizes the monopoly and encourages healthy competition. Increased competition in the business world is good. There can be variety of services available to the consumers. Government should support privatization by introducing schemes of interest free loan for investors. There will be large number of firms that might want to enter business world but the money is not available to them for startup.
Estimating Allowance for Doubtful Accounts
Evers Industries has a past history of uncollectible accounts, as follows.
Age Class Percent Uncollectible
Not past due 1%
1-30 days past due 3
31-60 days past due 12
61-90 days past due 30
Over 90 days past due 75
Estimate the allowance for doubtful accounts, based on the aging of receivables information provided in the chart below. Evers Industries Estimate of Allowance for Doubtful Accounts Total recelvables Percentage uncollectible Allowance for doubtful accounts Balance 1,124,500 Not Past Due 607,400 196 Days Past Due 1-30 Days Past Due 31-60 Days Past Due 61-90 Days Past Due Over 90 233,000 121600 12% 96500 30% 66000 75%
Answer:
Allowance for doubtful accounts $ 106106 using the aging method
Explanation:
Evers Industries
Estimate of Allowance for Doubtful Accounts
Balance Not Past Past Due (days)
Due (1-30) (31-60) (61-90) (Over 90)
Total
Receivables 1,124,500 607,400 233,000 121600 96500 66000
Percentage
Uncollectible 1% 3% 12% 30% 75%
Allowance for 6074 6990 14592 28950 49500
doubtful accounts 106106
We multiply each percent with the amount given and then add them all to get the total which is $106106 based on aging method.
The estimation of the Allowance for doubtful accounts should be $106,106 using the aging method.
Calculation of the estimation of the Allowance for doubtful accounts:Balance Not Past Past Due (days)
Due (1-30) (31-60) (61-90) (Over 90)
Total
Receivables 1,124,500 607,400 233,000 121600 96500 66000
Percentage
Uncollectible 1% 3% 12% 30% 75%
Allowance for 6074 6990 14592 28950 49500
doubtful accounts 106106
We multiply each percent by the amount given and then add them all to get the total which is $106106 based on aging method.
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The American Red Cross and the American Medical Association are nonprofit businesses. This is because they: A. plan to make a profit by selling services to other countries. B. exist to benefit a cause but not to make a profit. C. share profits with top management but not with workers. D. sell services directly to customers to make a higher profit.
Answer:B exist to benefit a cause but not to make a profit.
Explanation:
They are to provide services which are useful to the members of the society at large. They exist to promote the interest of members of the public which are social in nature. With a view to ensure the smooth running of the organisation some individuals are elected to run the organisation in the position of chairman, secretary, and treasurer. They do prepare receipt and payment account which is similar to cash account while some do prepare income and expenditure account which is similar to profit and loss account.
Maurer, inc.,has an odd dividend policy. The company has just paid a dividend of $2 per share and has announced that it will increase the dividend by $6 per share for each of the next five years, and then never pay another dividend. If yoy require a return of 10 percent on the company's stock, how much will you pay for a share today?
Answer:
Price of stock = $44.05
Explanation:
The price of a share can be calculated using the dividend valuation model
According to this model the value of share is equal to the sum of the present values of its future cash dividends discounted at the required rate of return.
To determine the price of the stock to , we calculate the present value for each of the dividend payable for the next five years and then sum them.
The formula below would help
PV = G× (1+r)^(-n)
PV = Present Value, r required rate of return - 10%, n- the year, G- dividend payable in a particular year
Year PV of dividend
1 2+6 ×× 1.1^-1 = 7.27
2 10 × 1.1^-2 = 8.26
3 12× 1.1^-3 = 9.02
4 14 × 1.1^-4 =9.56
5 16 × 1.1^-5 = 9.93
Total Present Value of dividend = 7.27 + 8.26 +9.02 +9.56 +9.93 = 44.05
Price of stock = $44.05
Maurer, inc.,has an odd dividend policy. The company has just paid a dividend of $2 per share and has announced that it will increase the dividend by $6 per share for each of the next five years, and then never pay another dividend. If yoy require a return of 10 percent on the company's stock, how much will you pay for a share today?
Answer:
Price of stock = $44.05
Explanation:
The price of a share can be calculated using the dividend valuation model
According to this model the value of share is equal to the sum of the present values of its future cash dividends discounted at the required rate of return.
To determine the price of the stock to , we calculate the present value for each of the dividend payable for the next five years and then sum them.
The formula below would help
PV = G× (1+r)^(-n)
PV = Present Value, r required rate of return - 10%, n- the year, G- dividend payable in a particular year
Year PV of dividend
1 2+6 ×× 1.1^-1 = 7.27
2 10 × 1.1^-2 = 8.26
3 12× 1.1^-3 = 9.02
4 14 × 1.1^-4 =9.56
5 16 × 1.1^-5 = 9.93
Total Present Value of dividend = 7.27 + 8.26 +9.02 +9.56 +9.93 = 44.05
Price of stock = $44.05
assuming it is stored safely how long after It was prepared can refrigerated food be sold or served 1-7 days b-10 days c-14 days d-20 days
Answer:
1-7 days
Explanation:
But, ideally 4 days should be the maximum for prepared food to be refrigerated before it is sold or served.
Leaving food refrigerated for a long time makes it to lose its nutrients. Some foods like potatoes, meat, eggs, chicken, etc. can become harmful or poisonous, especially when you reheat them before eating. That is why it is right to adhere to proper routines for refrigerating food and also preparing and serving the food. Some healthy food are better eaten immediately after their preparation.
During the current month, Grey Company transferred 60,000 units of finished production out of the Mixing Department at a cost of $6 each. They were transferred to finished goods. The journal entry to record the transfer would be which of the following?
a. Finished Goods 360,000
Work in Process 360,000
b. Finished Goods 360,000
Cost of Goods Sold 360,000
c. Work in Process 600,000
Finished Goods 600,000
d. Work in Process 600,000
Cost of Goods Sold 600,000
Answer:
a. Finished Goods 360,000
Work in Process 360,000
Explanation:
During transfer, de-recognize the cost of finished and transferred production from the Work In Process Account of the Mixing Department (Credit) and accumulate the cost in the Finished Goods Account (Debit).
When the units are finally sold, Cost of Goods Sold is recognized (Debit) and the Finished Goods Account is De-recognized (Credit).
Exercise 10-6 Direct Materials and Direct Labor Variances [LO10-1, LO10-2] Huron Company produces a commercial cleaning compound known as Zoom. The direct materials and direct labor standards for one unit of Zoom are given below: Standard Quantity or Hours Standard Price or Rate Standard Cost Direct materials 7.40 pounds $ 2.60 per pound $ 19.24 Direct labor 0.45 hours $ 8.00 per hour $ 3.60 During the most recent month, the following activity was recorded: 12,100.00 pounds of material were purchased at a cost of $2.50 per pound. All of the material purchased was used to produce 1,500 units of Zoom. 575 hours of direct labor time were recorded at a total labor cost of $5,750. Required: 1. Compute the materials price and quantity variances for the month. 2. Compute the labor rate and efficiency variances for the month.
Answer:
Instructions are below.
Explanation:
Giving the following information:
Direct material:
Standard= 7.40 pounds $ 2.60 per pound
Actual= 12,100 pounds of material were purchased for $2.50 per pound.
Direct labor:
Standard= 0.45 hours $ 8.00 per hour
Actual= 575 hours of direct labor time were recorded at a total labor cost of $5,750
Units produced= 1,500
To calculate the direct material price and quantity variance, we need to use the following formulas:
Direct material price variance= (standard price - actual price)*actual quantity
Direct material price variance= (2.6 - 2.5)*12,100
Direct material price variance= $1,210 favorable
Direct material quantity variance= (standard quantity - actual quantity)*standard price
standard quantity= 1,500*7.4= 11,100
Direct material quantity variance= (11,100 - 12,100)*2.6
Direct material quantity variance= $2,600 unfavorable
To calculate the direct labor efficiency and rate variance, we need to use the following formulas:
Direct labor time (efficiency) variance= (Standard Quantity - Actual Quantity)*standard rate
Standard quantity= 1,500*0.45= 675
Direct labor time (efficiency) variance= (675 - 575)*8
Direct labor time (efficiency) variance= $800 favorable
Direct labor rate variance= (Standard Rate - Actual Rate)*Actual Quantity
Actual rate= 5,750/575= $10
Direct labor rate variance= (8 - 10)*575
Direct labor rate variance= $1,150 unfavorable
Garcia Company issues 10%, 15-year bonds with a par value of $230,000 and semiannual interest payments. On the issue date, the annual market rate for these bonds is 8%, which implies a selling price of 117 1/4. The effective interest method is used to allocate interest expense.
1. Using the implied selling price of 117 1/4, what are the issuer's cash proceeds from issuance of these bonds.
2. What total amount of bond interest expense will be recognized over the life of these bonds?
3. What amount of bond interest expense is recorded on the first interest payment date?
Answer:
A.$269,675
B.$305,325
C.$10,787
Explanation:
Requirement A Cash proceeds
Cash proceeds can find out by multiplying par value with the selling price
Cash proceeds = Par Value x Selling price
Cash proceeds = $230,000 x 117.25%
Cash proceeds = $269,675
Requirement B Interest Expense
Bond interest expense =Total repayment -Amount borrowed(REQ.A)
Bond interest expense = $575,000(w) - $269,675
Bond interest expense = $305,325
Workings
Semi-annual interest expense = $230,000 x 10% x 6/12
Semi-annual interest expense = $11,500
Total payment would be 30 for 15 years
Total payment = $11,500 x 30
Total payment = $345,000
Total repayment = Par value + $345,000
Total repayment = $230,000 + $345,000
Total repayment = $575,000
Requirement C Bond interest expense on the first interest payment date
Bond interest Expense = $269,675(REQ.A) x 8% x 6/12
Bond interest Expense = $10,787
Which of the following is not required to prove innocent representation?
A. The fact asserted was material.
B. The fact asserted constituted a mistake of law.
C. The complaining party's reliance was reasonable.
D. The complaining party entered the contract because of his reliance on the fact asserted.
Answer:
I think it is C
hope I'm right
A put on XYZ stock with a strike price of $40 is priced at $2.00 per share, while a call with a strike price of $40 is priced at $3.50. What is the maximum per-share loss to the writer of the uncovered put and the maximum per-share gain to the writer of the uncovered call
Answer:
Loss = $38
Gain = $3.5
Explanation:
The calculation of maximum per-share loss and maximum per-share gain is shown below:-
Maximum loss = Exercise price - Premium received
= $40 - $2
= $38
So, the maximum per share loss is $38
Maximum gain = Premium received
= $3.5
So, the maximum per share gain is $3.5
We simply applied the above formulas to determine each part
You purchased a call option for $3.45 17 days ago. The call has a strike price of $45, and the stock is now trading for $51. If you exercise the call today, what will be your holding-period return
Answer:
73.9%
Explanation:
Calculation for what will be your holding-period return
You purchased a call option for $3.45 17 days ago. The call has a strike price of $45 and the stock is now trading for $51. If you exercise the call today, what will be your holding period return?
First step is to find the Gross profit
Using this formula
Gross profit=Strike price- Stock Trading amount
Let plug in the formula
Gross profit =$51 - 45
Gross profit= $6
Second step is to find the Net profit
Using this formula
Net profit=Gross profit-Call option
Let plug in the
Net profit is $6 - 3.45
Net profit= $2.55
The last step is to find the Holding period return
Using this formula
Holding period return =Net profit/Call option
Let plug in the formula
Holding period return=$2.55/$3.45
Holding period return= 0.739*100
Holding period return =73.9%
Therefore what will be your holding-period return is 73.9%
Classify each of the following based on the macroeconomic definitions of saving and investment.
a. Saving Investment Kate purchases stock in Pherk, a pharmaceutical company.
b. Hubert purchases a new condominium in Houston.
c. Clancy purchases a certificate of deposit at his bank.
d. Eileen borrows money to build a new lab for her engineering firm.
Answer:
a. Savings
b. Investment
c. Savings
d. Investment
Explanation:
Remember,
In macroeconomics, we often see Investments as purchases made with the aim of producing more goods or more wealth in the future. The examples are;
- Kate purchases stock in Pherk, a pharmaceutical company.
-Hubert purchases a new condominium in Houston.
While, Savings refers to the extra money a households have left after paying all their other expenses. Examples here are:
- Clancy purchases a certificate of deposit at his bank.
- Eileen borrows money to build a new lab for her engineering firm.
The following data have been recorded for recently completed Job 450 on its job cost sheet. Direct materials cost was $2,108. A total of 36 direct labor-hours and 234 machine-hours were worked on the job. The direct labor wage rate is $18 per labor-hour. The Corporation applies manufacturing overhead on the basis of machine-hours. The predetermined overhead rate is $25 per machine-hour. The total cost for the job on its job cost sheet would be:
Answer:
Total cost= $8,606
Explanation:
Giving the following information:
Job 450:
Direct materials= $2,108
A total of 36 direct labor-hours and 234 machine-hours were worked on the job.
The direct labor wage rate is $18 per labor-hour.
The predetermined overhead rate is $25 per machine-hour.
We need to calculate the total cost for Job 450:
Direct materials= 2,108
Direct labor= 36*18= 648
Overhead= 234*25= 5,850
Total cost= $8,606
What is a rule of solid database design regarding calculated values?
Calculates values should not be stored in the data base.
What are calculated value?This are value computed using electronic devices such as computer.
The values are advised not to be stored in data base of the computer because it update itself as the data is worked upon.
Hence, storing it will only give access to the values that was saved and not update it
Therefore,
Calculates values should not be stored in the data base.
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Answer:
B
Explanation:
Sales 22160 units Cash, beginning balance $34000 Selling and administrative (of which depreciation, $5,000) $53000 Required minimum cash balance $66480 If necessary, the company will borrow cash from a bank on the first day of March. Assume that the borrowing can be made in any (exact) amount, but bears interest at 3% per month. The March interest will be paid during subsequent months. Q: What is the closest amount of cash that must be borrowed on March 1 to cover all cash disbursements and to obtain the desired March 31 cash balance
Answer:
Loan taken: 58,320
Explanation:
We add up the beginning cash with the receipts and subtract the expenses.
Then, we compare agaisnt the mnimum required balance
Beginning Cash 34,000
Cash Receipts
Sales 22,160
Total cash form operations: 56,160
Cash disbursements
S&A expense (w/o depreciations) 48,000
Ending Cash from operations 8,160
Minimum Balance: 66,480
Loan taken: 58,320
Max Company uses 20,000 units of Part A in producing its products. A supplier offers to make Part A for $7. Max Company has relevant costs of $8 a unit to manufacture Part A. If there is excess capacity, the opportunity cost of not buying Part A from the supplier is:________
a) $20,000.
b) $0.
c) $160,000.
d) $140,000.
Answer:
$20,000
Explanation:
Max company makes use of 20,000 units of part A to manufacture its product
A supplier offers to produce part A for $7
Max company has relevant costs to $8 per unit to produce part A
Therefore, the opportunity cost of not buying part A from the supplier can be calculated as follows
Opportunity cost= 20,000 units of part A($8-$7)
= 20,000 units×$1
= 20,000×$1
= $20,000
Hence the opportunity cost of not buying part A from the supplier when there is excess capacity is $20,000
Joe must pay liabilities of 1,000 due one year from now and another 2,000 due three years from now. There are two available investments: Bond I: A one-year zero-coupon bond that matures for 1,000. The yield rate is 6% per year Bond II: A two-year zero-coupon bond with face amount of 1,000. The yield rate is 7% per year. At the present time the one-year forward rate for an investment made two years from now is 6.5%. Joe plans to buy amounts of each bond. He plans to reinvest the proceeds from Bond II in a one-year zero-coupon bond. Assuming the reinvestment earns the forward rate, calculate the total purchase price of Bond I and Bond II where the amounts are selected to exactly match the liabilities.
1. 2,584
2. 2,697
3. 2,801
4. 2,907
5. 3,000
Answer:
1. 2,584
Explanation:
future payments: $1,000 in 1 year and $2,000 in 3 years
the present value of alternative I (one year bond):
$1,000 / 1.06 = $943.40
the present value of alternative II (first 2 years and then 1 year):
$2,000 / 1.065 = $1,877.93 ⇒ PV at year 2
PV at year 0 = $1,877.93 / 1.07² = $1,640.26
the total present value of both options = $943.40 + $1,640.26 = $2,583.66 ≈ $2,584
Liabilities are settled over time through the transfer of economic benefits including money, goods, and services.
LiabilitiesLiability are some things someone or company owes, that's usually a sum of cash.
Now we calculate the whole price of Bond I and also Bond II.
The longer term payments is : $1,000 in 1 year and $2,000 in 3 years.
The present value of different I (one year bond): $[tex]1,000 / 1.06[/tex] = $[tex]943.40[/tex]
The present value of other II (first 2 years then 1 year): $[tex]2,000 / 1.065[/tex] = $[tex]1,877.93[/tex]⇒ PV at year 2PV at year 0 = $1,877.93 / 1.07² = $1,640.26
The total present value of both options = $943.40 + $1,640.26 = $[tex]2,583.66 ≈[/tex]$2,584
Thus, the correction option is (1.) 2,584.
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Parton and Sons is a law firm that uses activity-based costing. Classify these activities as value-added or non-value-added:
a. Taking appointments
b. Reception
c. Meeting with clients
d. Bookkeeping
e. Court time
f. Meeting with opposing attorneys
g. Billing
h. Advertising
Answer:
The answer is:
A - Non-value-added
B - Non-value-added
C- Value-added
D- Non-value-added
E - Value-added
F - Value-added
G - Non-value-added
H- Non-value-added
Explanation:
In activity-based costing, Non-value-added activities are activities that add costs to ones product without enhancing the value while value-added is a cost that enhance the quality of a product or service.
A - Non-value-added
B - Non-value-added
C- Value-added
D- Non-value-added
E - Value-added
F - Value-added
G - Non-value-added
H- Non-value-added
Brooke and Katie went shopping for cleaning supplies. Brooke chose products from well-known brands. However, Katie compared the price difference between well-known brands and the local store brands. Brooke explained that her mother always used well-known brands and taught her that local store brands just don’t clean as well. Apparently, _____ factors were a major influence on Brooke’s choices.
Answer:
Social
Explanation:
Social defines the status in a society or in a company and where we are living in the society interacts with the people to enhance our status, skills, etc.
Therefore according to the given situation Brooke and Katie went for purchasing to buy cleaning supplies. Here Katie is comparing the products price with local store while Brooke selects well known brands.
In this scenario Brook makes understand to Katie that local product is not good in comparison to well know brand. So, social factors affects on Brooke choice.
A financial asset is liquid: Group of answer choices if it can be readily exchanged for another asset or good. if it is held by the public and earning interest. only if it takes the form of cash. if it can be carried easily from one place to another.
Answer:
if it can be readily exchanged for another asset or good
Explanation:
An asset is liquid if it can be easily be exchanged for another asset or good or converted to cash. cash ( currency) is the most liquid asset.
an house for example is less liquid when compared to cash. this is because before it can be converted to cash or exchanged for another asset, it must first be valued, then we have to find a buyer and this process can range from days to years. this makes a house less liquid when compared with a house.
An option is called a derivative security because: Select one: a. its value is derived from that of another asset b. to calculate its worth requires extensive derivations c. it is the basic building block security we use to value all other derivative securities d. its value is derived from the existence of a convex payoff around an exercise value e. none of the above
Answer:
The answer is A.
Explanation:
Firstly, what is a derivative? - A derivative is a financial instrument that derives its value from the value of the underlying asset(bonds, equity etc) or forward rate agreement in the case of interest rate swap. A derivative transforms the value of the underlying.
Examples of derivative are, forward contract, futures, options, swaps etc.
Therefore, option A is the correct option.
The 10.9 percent preferred stock of Rock Bottom Floors is selling for $91 a share. What is the firm's cost of preferred stock if the tax rate is 44 percent and the par value per share is $100
Answer: 11.978%
Explanation:
From the question, we are informed that the 10.9 percent preferred stock of Rock Bottom Floors is selling for $91 a share. We are further informed that the tax rate is 44 percent and the par value per share is $100.
The firm's cost of preferred stock will be 10.9% multiplied by the par value per share and then divided by the share price of $91. This will be:
= (10.9% × 100)/91
= (0.109 × 100)/91
= 10.9/91
= 0.11978
= 11.978%
Assume instead that the equipment was disposed of in 2022 and the original error was discovered in 2023 after the 2022 financial statements were issued. Prepare the correcting entry in 2023.
Answer:
No journal entry is required
Explanation:
As if we assume that the disposal of equipment is done in the year 2022 but the original error was discovered in the year 2023 after issuing the 2022 financial statements
Based on the above information, the correct entry for the year 2023 is that no journal entry is required for this transaction and the same is to be considered
Wang Co. manufactures and sells a single product that sells for $450 per unit; variable costs are $270 per unit. Annual fixed costs are $800,000. Current sales volume is $4,200,000. Compute the contribution margin ratio.
Answer:
contribution margin ratio= 0.4
Explanation:
Giving the following information:
Selling price per unit= $450
Unitary variable costs=$270
To calculate the contribution margin ratio, we need to use the following formula:
contribution margin ratio= contribution margin/selling price
contribution margin ratio= (450 - 270) / 450
contribution margin ratio= 0.4