Answer:
medium of exchange
store of value
unit of account
Explanation:
Money is a valuable commodity and a medium of exchange. Modern economies use flat money that is not a community nor backed by the economy.
What do you mean by money as a medium of exchange?Money is a medium of exchange; allows people to get what they need to live. Trade was one of the exchanges of goods before money was created.
Like gold and other precious metals, money is a valuable commodity because to many people it represents something valuable.
About inflation, it leads the rise in prices and services and is a reason of the production of goods and services also gets affected in the economy.
Hence, Inflation affects the flow of money in the economy by reducing the purchasing power of clients.
To learn more about money as medium of exchange, refer:
https://brainly.com/question/25965295
Poehling Medical Center has a single operating room that is used by local physicians to perform surgical procedures. The cost of using the operating room is accumulated by each patient procedure and includes the direct materials costs (drugs and medical devices), physician surgical time, and operating room overhead. On January 1 of the current year, the annual operating room overhead is estimated to be: Disposable supplies $278,900 Depreciation expense 69,800 Utilities 29,800 Nurse salaries 259,300 Technician wages 118,200 Total operating room overhead $756,000 The overhead costs will be assigned to procedures, based on the number of surgical room hours. Poehling Medical Center expects to use the operating room an average of eight hours per day, seven days per week. In addition, the operating room will be shut down two weeks per year for general repairs. This information has been collected in the Microsoft Excel Online file. Open the spreadsheet, perform the required analysis, and input your answers in the questions below.1. Determine the predetermined operating room overhead rate for the year.
2. Bill Harris has a five-hours procedure on Jan 22. How much operating room overhead would be charged to his procedure, using the rate determined in part 1?
3. During January, the operating room was used 240 hours. The actual overhead costs incurred for January were $67,250. Determine the overhead under or over applied for the period.
Answer:
Results are below.
Explanation:
To calculate the predetermined manufacturing overhead rate we need to use the following formula:
Predetermined manufacturing overhead rate= total estimated overhead costs for the period/ total amount of allocation base
Total number of surgical room hours= (8*7)*52= 2,912 hours
Predetermined manufacturing overhead rate= 756,000 / 2,912
Predetermined manufacturing overhead rate= $259.61 per surgical room hour
Now, we can allocate costs using the following formula:
Allocated MOH= Estimated manufacturing overhead rate* Actual amount of allocation base
Allocated MOH= 259.61*5
Allocated MOH= $1,298.05
Finally, the under/over allocation for January:
Under/over applied overhead= real overhead - allocated overhead
Allocated overhead= 259.61*240= $62,306.4
Under/over applied overhead= 67,250 - 62,306.4
Underapplied overhead= $4,943.6
Ace Company purchased 10,000 bonds issued by Jack Company in 2018 for $53 per bond and classified the investment as securities available-for-sale. The value of the Jack investment was $83 per bond on December 31, 2019, and $100 per bond on December 31, 2020. During 2021, Ace sold all of its Jack investment at $148 per bond. In its 2021 income statement, Ace would report: Multiple Choice A gain of $950,000. A gain of $480,000. A gain of $470,000. A gain of $1,420,000.
Answer:
A gain of $950,000
Explanation:
The computation is shown below:
= ($83 - $53) × 10,000 bonds + ($100 - $83) × 10,000 bonds + ($148 - $100) × 10,000 bonds
= $300,000 + $170,000 + $480,000
= $950,000
Hence, the first option is correct
Air Tampa has just been incorporated, and its board of directors is grappling with the question of optimal capital structure. The company plans to offer commuter air services between Tampa and smaller surrounding cities. Air Tampa believes it would have the same business risk as Jaxair, which is an airline that has been around for a few years and that has had zero growth. Jaxair's market-determined beta is 1.8, and it has a current market value debt ratio (total debt to total assets) of 45% and a federal-plus-state tax rate of 25%. Air Tampa expects to have investment tax credits when it begins business, which reduces its federal-plus-state tax rate to 15%. Air Tampa's owners expect that the total book and market value of the firm's stock, if it uses zero debt, would be $14 million. Air Tampa's CFO believes that the MM and Hamada formulas for the value of a levered firm and the levered firm's cost of capital should be used because zero growth is expected.
Required:
a. Estimate the beta of an unlevered firm in the commuter airline business based on Jaxair's market-determined beta.
b. Now assume that rd= rRF= 10% and that the market risk premium RPM for an unlevered commuter airline. 5%. Find the required rate of return on equity
c. Air Tampa is considering three capital structures: (1) $2 million debt, (2) $4 million debt, and (3) $6 million debt. Estimate Air Tampa's rs for these debt levels.
Answer:
a. Unlevered beta = 1.12
b. Required rate of return on equity = 15.60%
c-1. rs = 16.37%
c-2. rs = 17.40%
c-2. rs = 18.81%
Explanation:
a. Estimate the beta of an unlevered firm in the commuter airline business based on Jaxair's market-determined beta.
Levered beta = Unlevered beta * (1 + (D/S)(1 - T))
Therefore, we have:
Unlevered beta = Levered beta / (1 + (D/S)(1 - T)) .............. (1)
Where:
Levered beta = Jaxair's market-determined beta = 1.8
D = Debt ratio = 45%, or 0.45
S = Equity ratio = 1 - D = 1 - 0.45 = 0.55
T = Federal-plus-state tax rate = 25%, or 0.25
Substituting the values into equation (1), we have:
Unlevered beta = 1.8 / (1 + (0.45/0.55)(1 - 0.25)) = 1.12
b. Now assume that rd= rRF= 10% and that the market risk premium RPM for an unlevered commuter airline. 5%. Find the required rate of return on equity
Required rate of return on equity = ro = Rf + beta(Rm - Rf) .............. (2)
Where;
rd = Rf = 10%, or 0.10
beta = Unlevered beta = 1.12
(Rm - Rf) = market risk premium = RPM for an unlevered commuter airline = 5%, or 0.05
Substituting the values into equation (2), we have:
Required rate of return on equity = ro = 10% + 1.12(5%) = 10% + (1.12 * 5%) = 15.60%
c. Air Tampa is considering three capital structures: (1) $2 million debt, (2) $4 million debt, and (3) $6 million debt. Estimate Air Tampa's rs for these debt levels.
c-1. $2 million debt
D = Debt = $2 million
Value of unlevered firm = $14 million
T = Tax rate at start-up = 15%, or 0.15
Value of lerevered firm = Value of unlevered firm + (Debt * T) = $14 + ($2 * 15%) = $14.30 million
S = Value of equity = Value of lerevered firm - Debt = $14.30 - $2 = $12.30 million
rs = ro + ((ro - rd) * (D / S) * (1 - T)) ................... (3)
Where;
ro = 15.60%
rd = Rf = 10%, or 0.10
D = Debt = $2 million
S = Value of equity = $12.30 million
T = Tax rate at start-up = 15%, or 0.15
Substituting the values into equation (3), we have:
rs = 15.60% + ((15.60% - 10%) * (2 / 12.30) * (1 - 0.15)) = 16.37%
c-2. $4 million debt
D = Debt = $4 million
Value of unlevered firm = $14 million
T = Tax rate at start-up = 15%, or 0.15
Value of lerevered firm = Value of unlevered firm + (Debt * T) = $14 + ($4 * 15%) = $14.60 million
S = Value of equity = Value of lerevered firm - Debt = $14.60 - $4 = $10.60 million
Substituting all the relevant values into equation (3), we have:
rs = 15.60% + ((15.60% - 10%) * (4 / 10.60) * (1 - 0.15)) = 17.40%
c-3. $6 million debt
D = Debt = $6 million
Value of unlevered firm = $14 million
T = Tax rate at start-up = 15%, or 0.15
Value of lerevered firm = Value of unlevered firm + (Debt * T) = $14 + ($6 * 15%) = $14.90 million
S = Value of equity = Value of lerevered firm - Debt = $14.90 - $6 = $8.90 million
Substituting all the relevant values into equation (3), we have:
rs = 15.60% + ((15.60% - 10%) * (6 / 8.90) * (1 - 0.15)) = 18.81%
For its first year of operations, Tringali Corporation's reconciliation of pretax accounting income to taxable income is as follows: Pretax accounting income 285,000 Temporary difference-depreciation (20,000) Taxable income $ 265,000 Tringali's tax rate is 40%. Assume that no estimated taxes have been paid. What should Tringali report as income tax payable for its first year of operations
Answer:
$106,000
Explanation:
Calculation to determine What should Tringali report as income tax payable for its first year of operations
Using this formula
Income tax payable=Taxable income*Tringali's tax rate
Let plug in the formula
Income tax payable=265,000 x 40%
Income tax payable= $106,000
Therefore the amount that Tringali should report as income tax payable for its first year of operations is $106,000
You are the manager of a small hotel with 40 rooms in Niagara. Your business has dropped almost 90% in recent months. Your cash remaining is enough to run the business for 3 more months.
Apply the 6 thinking hats approach, what would you recommend to do if you were:
1. wearing a blue hat?
2. wearing a white hat?
3. wearing a green hat?
4. wearing a red hat?
5. wearing a yellow hat?
6. wearing a black hat?
After considering the views from different perspectives, what is your recommendation?
When the original poverty line was created, even some people living above the poverty line did not have access to a phone or running water in their homes.
Today, running water is expected. Beyond that, the norm for our contemporary society includes having cell phones and internet access. In fact, the U.S. government provides grants to bring high-speed in-home internet access to underserved rural areas.
Consider both the benefits and the shortcomings of the U.S. poverty line as a means of assessing poverty today.
The U.S. poverty line was originally set at
a. an income level of $1.90 per day.
b. sufficient income to provide for a family of four.
c. one-third of the median income in the United States.
d. three times the cost of a low-cost food plan.
Answer:
d. three times the cost of a low-cost food plan.
Explanation:
The U.S. poverty line is measured based on three times the cost of low-cost food plan. The people in the rural areas are considered more poor and they are provided with basic necessities. The U.S. government takes initiatives to encourage rural population to contribute their expertise and strengths in some projects. They provide welfare benefit to those who are needy and can not survive on their earnings.
06-14 Calculating EAR [LO4] First National Bank charges 13.1 percent compounded monthly on its business loans. First United Bank charges 13.4 percent compounded semiannually. Calculate the EAR for First National Bank and First United Bank. (Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.) As a potential borrower, which bank would you go to for a new loan
Answer:
13.92%
13.85%
Explanation:
Effective annual interest = (1 + periodic interest)^m - 1
m = number of compounding
Periodic interest = annual interest rate / number of compounding
(1 + 0.131/12)^12 - 1 = 13.92%
(1 + 0.134/2)^2 - 1 = 13.85%
it takes fena tailoring 2 hr of cutting and 4 hr of sewing to make a tiered silk organza bridal dress. it takes 4 hr of cutting and 2 hr of sewing to make a lace sheath bridal dress. the shop has at most 18 hr per week available for cutting and at most 18 hr per week for sewing. the profit is $318 on an organza dress and $167 on a lace dress. how many of each kind of bridal dress should be made each week in order to maximize profit
Answer:
Fena should make 2 organza bridal dresses and 4 lace dresses which will yield maximum profit of $1,498.
Explanation:
Fena has choice between two types of bridal dresses for stiching. She can make either organza dresses or lace dresses. The combination of both dress will be identified by equation :
P = 318x + 216y
2x + 4y ≤ 18
3x + 2y ≤ 24
solving the equation we will get maximum profit of $1,498.
This picture of gas stations BEST illustrates which aspect of a market economy?
A
credit
B
competition
с
interest rates
D
opportunity cost
Answer:
B. Competition is the answer for E2020
Explanation:
Ds games recommendation give me some :D
Thanks
Match each term with its definition.
a. accelerated depreciation method
b. amortization
c. book value
d. boot
e. capital expenditures
f. capital leases
g. copyright
h. declining-balance method
i. depletion
j. depreciation
k. fixed assets
l. goodwill
1. Long-term or relatively permanent tangible assets that are used in the normal business operations.
2. The systematic periodic transfer of the cost of a fixed asset to an expense account during its expected useful life.
3. The estimated value of a fixed asset at the end of its useful life.
4. A method of depreciation that provides tor equal peri0dic depreciation expense over the estimated life of a fixed asset.
5. A method of depreciation that provides tor depreciation expense based on the expected productive capacity Of a fixed asset.
6. A method of depreciation that provides periodic depreciation expense based on the declining
book value of a fixed asset over its estimated life.
7. The cost of a fixed asset minus accumulated depreciation on the asset.
8. A depreciation method that provides for a higher depreciation amount in the first year of the assets use, t0110wed by a gradually declining amount of depreciation.
9. The costs of acquiring fixed assets, adding to a fixed asset, improving a fixed asset, or extending a fixed assets useful lite.
10. Costs that benefit only the current period or costs incurred for normal maintenance and repairs
Answer:
Definition Item
1. fixed assets
2. depreciation
3. amortization
4. copyright
5. depletion
6. declining-balance method
7. book value
8. accelerated depreciation method
9. capital expenditures
10. boot
Explanation:
The Definition has been matched to the items as above.
If business property or property held for the production of income is destroyed, the loss is equal to the adjusted basis of the property at the time of destruction.
a. True
b. False
Answer:
A) true
Explanation:
Business property could be of different types such as Real property(real estate) which comprises building as well as land. As regards to business real property could be property such as warehouses, offices as well as factories which is been owned by the business. If these properties are been held for income production, the loss can be attributed to adjusted basis during the destruction of the property. It should be noted If business property or property held for the production of income is completely destroyed, the loss is equal to the adjusted basis of the property at the time of destruction.
A sales representative lives in Bloomington and must be in Indianapolis next Thursday. On each of the days Monday, Tuesday, and Wednesday, he can sell his wares in Indianapolis, Bloomington, or Chicago. From past experience, he believes that he can earn $12 from spending a day in Indianapolis, $16 from spending a day in Bloomington, and $17 from spending a day in Chicago. Where should he spend the first three days
Answer:
Bloomington.
Explanation:
Since a sales representative lives in Bloomington and must be in Indianapolis next Thursday, and on each of the days Monday, Tuesday, and Wednesday, he can sell his wares in Indianapolis, Bloomington, or Chicago, and from past experience, he believes that he can earn $ 12 from spending a day in Indianapolis, $ 16 from spending a day in Bloomington, and $ 17 from spending a day in Chicago, to determine where he should spend the first three days, the following calculation must be performed:
Indianapolis: 12 x 3 = 36
Bloomington: 16 x 3 = 48
Chicago: 17 x 3 = 51
Thus, in principle, the representative should spend his 3 days in Chicago, but if the cost of travel is discounted, he should spend those 3 days in Bloomington, since he will earn more money than if he moves in advance to Indianapolis.
Suppose that you have found the optimal risky combination using all risky assets available in the economy, and that this optimal risky portfolio has an expected return of 0.2 and standard deviation of 0.2. The T-bill rate is 0.05. If your risk-return preferences are best described by the utility function in this class, with a risk-aversion coefficient of 4.6. What is the expected return on your optimal complete portfolio
Answer:
d
Explanation:
Crane Co. has the following transactions related to notes receivable during the last 2 months of the year. The company does not make entries to accrue interest except at December 31.
Nov. 1 Loaned $66,600 cash to C. Bohr on a 12-month, 6% note.
Dec. 11 Sold goods to K. R. Pine, Inc., receiving a $7,200, 90-day, 6% note.
Dec. 16 Received a $9,600, 180-day, 8% note to settle an open account from A. Murdock.
Dec. 31 Accrued interest revenue on all notes receivable.
Required:
Journalize the transactions for Crane Company
Answer:
Nov 1
Debit : Note Receivable - C. Bohr $66,600
Credit : Cash $66,600
Dec. 11
Debit : Note Receivable - K. R. Pine, Inc. $7,200
Credit : Sales $7,200
Dec. 16
Debit : Cash $9,600
Credit : Note Payable - A. Murdock $9,600
Dec. 31
Debit : Note Receivable - C. Bohr $666
Debit : Note Receivable - K. R. Pine, Inc. $100.80
Credit : Interest Income $766.80
Dec 31
Debit : Interest expense $64
Credit : Note Payable - A. Murdock $64
Explanation:
Interest Income calculations :
Note Receivable - C. Bohr = $66,600 x 2/12 x 6 % = $666
Note Receivable - K. R. Pine, Inc = $7,200 x 21/ 90 x 6 % = $100.80
Interest expense calculations :
Note Payable - A. Murdock $9,600 x 15 / 180 x 8 % = $64
Three identical units of merchandise were purchased during July, as follows: Date Product T Units Cost July 3 Purchase 1 $31 10 Purchase 1 34 24 Purchase 1 37 Total 3 $102 Average cost per unit $34 Assume one unit sells on July 28 for $48. Determine the gross profit, cost of goods sold, and ending inventory on July 31 using (a) first-in, first-out, (b) last-in, first-out, and (c) average cost flow methods.
Answer:
(a) first-in, first-out,
Cost of Sales = $31
Ending Inventory = $71
Gross Profit = $17
(b) last-in, first-out,
Cost of Sales = $37
Ending Inventory = $65
Gross Profit = $17
(c) average cost flow methods.
Cost of Sales = $48
Ending Inventory = $96
Gross Profit = $0
Explanation:
(a) first-in, first-out,
FIFO method assumes that the units to arrive first, will be sold first. This means cost of sales will be based on earlier (old) prices whilst inventory valuation will be on recent (new) prices.
Cost of Sales = 1 x $31 = $31
Ending Inventory = 1 x $34 + 1 x $37 = $71
Gross Profit = $48 - $31 = $17
(b) last-in, first-out,
LIFO method assumes that the units to arrive last will be sold first. This means cost of sales will be based on recent (new) prices whilst inventory valuation will be on earlier (old) prices.
Cost of Sales = 1 x $37 = $37
Ending Inventory = 1 x $34 + 1 x $31 = $65
Gross Profit = $48 - $37 = $17
(c) average cost flow methods.
This method calculates a new average unit cost with each and every purchase made. This unit cost is used to determine the cost of sales and inventory value.
Cost of Sales = 1 x $48 = $48
Ending Inventory = 2 x $48 = $96
Gross Profit = $48 - $48 = $0
Which of the following statements is correct concerning liability when a partner in a general partnership commits a tort while engaged in partnership business? A. The partner committing the tort is the only party liable. B. The partnership is the only party liable. C. Each partner is jointly and severally liable. D. Each partner is liable to pay an equal share of any judgment.
The statement is correct concerning liability when a partner in a general partnership commits a tort while engaged in partnership business that is "each partner is jointly and severally liable". The correct option is C.
In a general partnership, each partner shares joint and several liability for the actions and liabilities of the partnership.
If a partner commits a tort while engaged in partnership business, the injured party can hold the partnership and all individual partners personally liable for any resulting damages.
This means that the injured party can choose to pursue a claim against the partnership as a whole or against any individual partner or a combination of partners, depending on their preference or ability to satisfy the judgment.
Therefore, the correct option is C.
To know more about partnership here,
https://brainly.com/question/33558718
#SPJ2
Paparo Corporation has provided the following data from its activity-based costing system: Activity Cost Pool Total Cost Total Activity Assembly $ 794,300 47,000 machine-hours Processing orders $ 61,280 1,600 orders Inspection $ 109,681 1,430 inspection-hours Data concerning the company's product Q79Y appear below: Annual unit production and sales 500 Annual machine-hours 1,130 Annual number of orders 115 Annual inspection hours 20 Direct materials cost $ 42.00 per unit Direct labor cost $ 41.31 per unit According to the activity-based costing system, the average cost of product Q79Y is closest to:
Answer:
Unitary costs= $133.38
Explanation:
First, we need to calculate the activities rate:
Predetermined manufacturing overhead rate= total estimated overhead costs for the period/ total amount of allocation base
Assembly= 794,300 / 47,000= $16.9 per machine-hour
Processing orders= 61,280 / 1,600= $38.3 per order
Inspection= 109,681 / 1,430= $76.7 per inspection-hour
Now, we can allocate overhead:
Allocated MOH= Estimated manufacturing overhead rate* Actual amount of allocation base
Assembly= 16.9*1,130= 19,097
Processing orders= 38.3*115= 4,404.5
Inspection= 76.7*20= 1,534
Total allocated costs= $25,035.5
Finally, the unitary costs:
Unitary allocated costs= 25,035.5/500= $50.07
Unitary costs= 50.07 + 42 + 41.31
Unitary costs= $133.38
Before year-end adjusting entries, Dunn Company's account balances at December 31, 2010, for accounts receivable and the related allowance for uncollectible accounts were $600,000 and $45,000, respectively. An aging of accounts receivable indicated that $62,500 of the December 31 receivables are expected to be uncollectible. The net realizable value of accounts receivable after adjustment is
Answer: $537500
Explanation:
The net realizable value of accounts receivable after adjustment will be the difference between the account receivable at December 31st and the expected uncollectible. This will be:
= $600,000 - $62,500
= $537500
Therefore, the answer is $537500
A researcher sets up an experiment involving the use of some sophisticated equipment. The research proposal is approved by the IRB and a grant to cover the cost of the equipment is received from a funding agency. The researcher does not mention that he owns stock in the company he chooses to supply the equipment. The same type of equipment is available from other companies, of comparable quality and price. Is this ethical or unethical
Answer:
This is unethical
Explanation:
Unethical behaviour is defined as a behaviour that is considered o be morally wrong for a group of people or in a given industry.
In the given scenario the researcher is using sophisticated equipment for an experiment.
He chose a company that he has shares in to supply the equipment.
This can be seen as a use of his influence for financial gain that is outside the normal compensation he is receiving
The trading securities portfolio of Jerome, Inc., had a total cost of $3,000 and
a fair value of $2,800 on December 31, which is the first year it held trading
securities. Complete the necessary adjusting entry by selecting the account
names from the pull-down menus and entering dollar amounts in the debit and credit columns
Answer and Explanation:
The journal entry is shown below:
Unrealized Loss - Income ($3,000 - $2,800) $200
To Fair value adjustment - trading $200
(being the adjustment to fair value for trading securities is recorded)
Here the unrealized loss would be debited and the fair value adjustment would be credited
Nemo Gill was hired by the Spectacular Tropical Aquarium and agreed to submit any disputes arising out of his employment to binding arbitration. Nemo was fired when he became a Rastafarian and urged his coworkers to become vegetarians and smoke ganja. Without waiting for the results of the arbitration, Nemo filed a complaint alleging religious discrimination with the EEOC. The EEOC quickly filed a lawsuit on his behalf. Spectacular moved to have the EEOC's lawsuit dismissed on the grounds that Nemo signed a valid arbitration agreement.
a. The EEOC cannot bring a lawsuit enforcement action against Spectacular because Nemo signed the mandatory arbitration agreement.
b. The EEOC can bring a lawsuit enforcement action against Spectacular despite Nemo's agreeing to arbitration.
c. The EEOC cannot bring a lawsuit enforcement action against Spectacular because Nemo did not wait for the results of the arbitration.
d. The EEOC cannot bring a lawsuit enforcement action against Spectacular because Nemo's urging his co-workers to smoke ganja and become vegetarians had nothing to do with his job.
Answer:
The correct answer to the question above is OPTION B (The EEOC can bring a lawsuit enforcement action against Spectacular despite Nemo's agreeing to arbitration).
Explanation:
Companies (mostly private) usually desire their employees to sign an arbitration agreement giving the fact that it removes the power of an employee to take the employer to court on certain claims instead the claims go through an arbitration proceeding that happens outside of court.
EEOC (Equal Employment Opportunity Commission) enforces the laws of the state that prohibits discrimination against employees by their employers because of where they come from, their religion, their marital status, sex, their citizenship, and a whole lot more.
So, the EEOC can bring a lawsuit enforcement action against Spectacular despite Nemo's agreeing to arbitration because the EEOC itself was not a party to the arbitration agreement between Spectacular and Nemo, and the U. S. Supreme Court gave EEOC the power to exercise its enforcement powers.
the Hsu Manufacturing Company has two service departments: Maintenance and Accounting. The Maintenance Department's costs of $300,000 are allocated on the basis of machine hours. The Accounting Department's costs of $120,000 are allocated on the basis of the number of employees within a specific department. The direct departmental costs for A and B are $300,000 and $500,000, respectively. Maint Acctg A B Machine hours 480 20 2,300 200 Number of employees 2 2 8 4What is the Accounting Department's cost allocated to Department B using the direct method
Answer:
$34,286
Explanation:
Step 1
Total number of employees :
Maintenance 2
Department A 8
Department B 4
Total 14
Step 2
Allocation to Department B :
Department B = 4 / 14 x $120,000
= $34,286
Conclusion :
Accounting Department's cost allocated to Department B using the direct method is $34,286
During January, Luxury Cruise Lines incurs employee salaries of $1.3 million. Withholdings in January are $99,450 for the employee portion of FICA, $195,000 for federal income tax, $81,250 for state income tax, and $13,000 for the employee portion of health insurance (payable to Blue Cross/Blue Shield). The company incurs an additional $80,600 for federal and state unemployment tax and $39,000 for the employer portion of health insurance.
Required:
Record the necessary journal entries.
Answer:
Date Account Title Debit Credit
Jan. 31 Salary Expenses $1,300,000
Accounts Payable - Insurance $13,000
FICA Tax Payable $99,450
Income Tax payable $276,250
Salaries Payable $911,300
Working:
Income tax payable = Federal income + State income
= 195,000 + 81,250 = $276,250
Date Account Title Debit Credit
Jan. 31 Salaries Expenses $39,000
Accounts Payable $39,000
Date Account Title Debit Credit
Jan. 31 Payroll Tax expenses $180,005
FICA Tax Payable $99,450
Federal and State Unemployment Tax $80,600
9. Matilda just graduated from college. In order to devote all her efforts to college, she did not hold a job. Matilda just graduated from college. In order to devote all her efforts to college, she did not hold a job. She is going to cruise around the country on her motorcycle for a month before she starts looking for work. Other things the same, the unemployment rate ____________ and the labor force participation rate ______________.
Answer:
Remain the same; remain the same.
Explanation:
Unemployment rate refers to the percentage of the total labor force in an economy, who are unemployed but seeking to be gainfully employed. The unemployment rate is divided into various types, these include;
I. Natural Rate of Unemployment (NU).
II. Frictional unemployment rate (FU).
III. Structural unemployment rate (SU).
IV. Actual unemployment rate (AU).
V. Cyclical unemployment rate (CU).
There are different measures used in the measurement of the unemployment rate in a country's economy and these includes;
A. U-1: this is the percentage of people that are unemployed for at least 15 weeks or more.
B. U-2: this is the percentage of the people who have lost their job or the people that finished a temporary job.
C. U-3: this is the percentage of the population that is unemployed but actively seeking employment.
All things being equal (ceteris paribus), the unemployment rate would remain the same and the labor force participation rate remain the same because Matilda has decided to cruise around the country on her motorcycle for a month before she starts looking for work.
Declining Balance Depreciation Irons Delivery Inc. purchased a new delivery truck for $40,600 on January 1, 2019. The truck is expected to have a $2,000 residual value at the end of its 5-year useful life. Irons uses the double-declining-balance method of depreciation. Required: Prepare the journal entry to record depreciation expense for 2019 and 2020.
Answer:
A. Depreciation expense $16240
Cr Accumulated depreciation $16240
B. Dr Depreciation expense $9744
Cr Accumulated depreciation $9744
Explanation:
A. Preparation of the journal entry to record depreciation expense for 2019 and 2020.
Dr Depreciation expense $16240
Cr Accumulated depreciation $16240
(Record double-declining-balance depreciation expense)
Depreciation expense for 2019= $40,600 × (1/5 × 2)
Depreciation expense for 2019= $16240
B. Preparation of the journal entry to record depreciation expense for 2020
Dr Depreciation expense $9744
Cr Accumulated depreciation $9744
[($40,600 –$16,240) × (1/5 × 2) = 9744]
(Record double-declining-balance depreciation expense)Depreciation expense for 2020
Under an installment contract, a buyer can:
A. Reject an installment if the nonconformity substantially impairs the value of the installment without giving the seller an opportunity to cure
B. Hold the seller in breach of the entire installment contract when a nonconforming installment substantially impairs the value of that
installment alone.
C. Reject an installment no matter how minor the nonconformance is
D. None of these answers
Answer:
A. Reject an installment if the nonconformity substantially impairs the value of the installment without giving the seller an opportunity to cure.
Explanation:
A contract can be defined as an agreement between two or more parties (group of people) which gives rise to a mutual legal obligation or enforceable by law.
There are different types of contract in business and these includes: fixed-price contract, cost-plus contract, bilateral contract, implies contract, unilateral contract, adhesion contract, unconscionable contract, option contract, express contract, installment contract, etc.
Total installment price is the total amount a consumer or customer end up paying for goods and services.
Mathematically, it can be calculated by using the formula below;
Total Installment Price = ([Monthly payment] × [No. of payments] + Down payment)
Hence, you multiply the monthly revenue by the amount of payments and add it to the down the payment.
Under an installment contract, a buyer can reject an installment if the nonconformity substantially impairs the value of the installment without giving the seller an opportunity to cure. This is in accordance with the uniform commercial code (UCC).
The uniform commercial code (UCC) is a set of standardized business laws which are put in place for the regulation of financial contracts and commercial transactions used across different states in the United States of America.
There are special rules known as the special business standards that are set up by UCC governing the merchants and the sales of goods in the Article 2 of the uniform commercial code.
Apedwa Inc. recently purchased a new delivery truck. The new truck costs $25,000 and is expected to generate net after-tax operating cash flows, including depreciation, of $7,000 at the end of each year. The truck has a 5-year expected life. The expected abandonment values (salvage values after tax adjustments) at different points in time are given below. The firm's cost of capital is 10 percent. What is ithis project's optimal economic life?
Year Annual Operating Cash Flow Salvage Value
0 ($20,000) $20,000
1 7,000 16,000
2 7,000 14,000
3 7,000 12,000
4 7,000 8,000
5 7,000 0
Answer:
This project's optimal economic life is 3 years.
Explanation:
Note: See the attached excel file for the calculation of equivalent annual cost
In the attached excel file, the following is used:
Cost of Capital = 10%
From the attached excel file, the highest equivalent annual cost of $526 occurred in year 3. This implies that this project's optimal economic life is 3 years.
The Change Corporation has two different bonds currently outstanding. Bond M has a face value of $30,000 and matures in 20 years. The bond makes no payments for the first six years, then pays $3,100 every six months over the subsequent eight years, and finally pays $3,400 every six months over the last six years. Bond N also has a face value of $30,000 and a maturity of 20 years; it makes no coupon payments over the life of the bond. The required return on both these bonds is 12% compounded semi-annually. What is the current price of Bond M and Bond N?
Answer:
a. Current price of Bond M = $24,062.31
b. Current price of Bond N = $2,916.67
Explanation:
a. Calculation of current price of Bond M
Note: See the attached excel file for the calculation of current price of Bond M (in bold red color).
In the attached excel file, the following are used:
r = required return = 12%
s = number of semiannuals in a year = 2
From the attached excel file, we have:
Current price of Bond M = $24,062.31
b. Calculation of current price of Bond N
This can be calculated using the following formula:
Current price of Bond N = Face value of bond N / (100% + Semiannual required return)^n ............................ (1)
Where;
Face value of bond N = $30,000
Semiannual required return = Required return / Number of semiannual in a year = 12% / 2 = 6%
n = Number of semiannuals = Number of years of maturity * Number of semiannual in a year = 20 * 2 = 40
Substituting the above into equation (1), we have:
Current price of Bond N = $30,000 / (100% + 6%)^40 = $2,916.67
Cost of goods sold for a manufacturer equals cost of goods manufactured plus a. beginning finished goods inventory less ending finished goods inventory b. beginning work in process inventory less ending work in process inventory c. ending work in process inventory less beginning work in process inventory d. ending finished goods inventory less beginning finished goods inventory
Answer:
a. beginning finished goods inventory less ending finished goods inventory
Explanation:
Cost of goods sold for a manufacturer equals cost of goods manufactured plus beginning finished goods inventory less ending finished goods inventory.