Answer:
the service revenue is $1,590,790
Explanation:
The computation of the service revenue is shown below:
= Service revenue in trial balance + Services that were neither billed nor paid
= $1,425,790 + $165,000
= $1,590,790
hence, the service revenue is $1,590,790
We simply added the above two amounts
Manufacturing overhead for the month was underapplied by $6,000. The company allocates any underapplied or overapplied manufacturing overhead among work in process, finished goods, and cost of goods sold at the end of the month on the basis of the overhead applied during the month in those accounts. The journal entry to record the allocation of any underapplied or overapplied manufacturing overhead for January would include the following:
Work In Process Finished Goods Cost of Goods Sold Total
Direct materials $10,670 $12,000 $81,120 $103,790
Direct labor 11,630 15,000 101,400 128,030
Manufacturing
overhead applied 9,680 9,680 68,640 88,000
Total $31,980 $36,680 $251,160 $319,820
Manufacturing overhead for the month was underapplied by $6,000.
The Corporation allocates any underapplied or overapplied manufacturing overhead among work in process, finished goods, and cost of goods sold at the end of the month on the basis of the manufacturing overhead applied during the month in those accounts.
The journal entry to record the allocation of any underapplied or overapplied manufacturing overhead for May would include the following:
a. credit to Work in Process of $31,980.
b. debit to Work in Process of $660.
c. credit to Work in Process of $660.
d. debit to Work in Process of $31,980.
Answer:
b. debit to Work in Process of $660.
Explanation:
Particulars Work in Finished Cost of Goods Sold Total
Process Goods
Manufacturing
overhead
applied during
the month 9680 9680 68640 88000
Percentage of total 11.0% 11.0% 78.0% 100.0%
Allocation of under-applied
manufacturing overhead 660 660 4680 6000
Problem 4-8 Sales and Growth [LO2] The most recent financial statements for Alexander Co. are shown here: Income Statement Balance Sheet Sales $ 42,950 Current assets $ 17,580 Long-term debt $ 37,070 Costs 35,550 Fixed assets 68,350 Equity 48,860 Taxable income $ 7,400 Total $ 85,930 Total $ 85,930 Taxes (21%) 1,554 Net income $ 5,846 Assets and costs are proportional to sales. The company maintains a constant 35 percent dividend payout ratio and a constant debt-equity ratio. What is the maximum dollar increase in sales that can be sustained assuming no new equity is issued
Answer:
$3,621.96
Explanation:
ROE = Net income/Equity * 100
ROE = 5846/48860*100
ROE = 11.9648%
Dividend payout ratio = 35%
Retention Ratio = 1 - 35% = 65%
Sustainable growth rate = (ROE*b)/(1-ROE*b)
Sustainable growth rate = (11.9648%*0.65)/(1- (11.9648%*0.65%))
Sustainable growth rate = 8.43%
Therefore, Maximum Dollar Increase in sales = Sales * Sustainable growth rate = 42,950 * 8.43% = $3,621.96
List the name of the inventory method that best fits the description. Assume that the cost of inventory is rising.
_________Maximizes reported income
_________ Used to account for automobiles, jewelry, and art objects
_________Results in a cost of ending inventory that is close to the current cost of replacing the inventory
_________Generally associated with saving income taxes
_________Enables a company to buy high-cost inventory at year-end and thereby decrease reported income and income tax
_________Results in an old measure of the cost of ending inventory
_________Provides a middle-ground measure of ending inventory and cost of goods sold
_________Enables a company to keep reported income from dropping lower by liquidating older layers of inventory
_________Writes inventory down when current replacement cost drops below historical cost
_________Matches the most current cost of goods sold against sales revenue
Answer:
Inventory is the complete list of the items or the list of stock such as goods, properties, etc.
Explanation:
Inventory are defined as the stock of the goods and the materials that the business holds in order to ultimate goal of a resale. Inventory management is the discipline that is primarily about specifying shape and the placement of the stocked goods. There are various inventory methods. FIFO as well as LIFO are the important inventory methods.
The full form of FIFO is first in first out while the full form of LIFO is last in first out.
LIFO -- it maximizes the reported income.
Specific unit cost -- they are used for account of the automobiles, art objects and jewelries.
FIFO -- it results in the cost of the ending inventory which is close to current cost of the replacing inventory.
LIFO -- it generally associated with the savings income taxes.
LIFO -- it enables the company to buy a high cost inventory method at the year end.
LIFO -- it results old measure of a cost ending inventory.
Average cost -- it provides the middle ground measure of the ending inventory and also the cost of the goods sold.
FIFO -- it enables the company in order to keep the reported income from the dropping lower by the liquidating of the older layers of the inventory.
applies to all the four methods -- writes the inventory down when the current replacement cost drops to the below historical costs.
LIFO -- it matches the current cost of the goods that are sold against the sales revenue.
Everlast Co. manufactures a variety of drill bits. The company's plant is partially automated. The budget for the year includes $432,000 payroll for 4,800 direct labor-hours. Listed below is cost driver information used in the product-costing system:
Overhead Cost Pool Budgeted Overhead Cost Driver Estimated Cost Driver Level
Machine setups $120,000 # of setups 120 setups
Materials handling 104,400 # of barrels 8,700 barrels
Quality control 264,000 # of inspections 1,100 inspections
Other overhead cost 144,000 # of machine hours 12,000 machine hours
Total overhead $632,400
A current product order has the following requirements:
Machine setups 8 setups
Materials handling 606 barrels
Quality inspections 80 inspections
Machine hours 830 machine hours
Direct labor hour 336 hours
Using ABC, how much other overhead is assigned to the order?
a. $9,960.
b. $8,000.
c. $11,108.
d. $45,992.
e. $19,200.
Answer:
See below
Explanation:
Given the above information
Payroll = $432,000 ÷ 4,800 = $90 per hour
Setup = $120,000 / 120 = $1,000 per setup
Material handling barrel = $104,400 / 8,700 = $11.95 per barrel
Quality control inspection = $264,000 / 1,100 = $240 per inspection
Overhead = $144,000 / 12,000 = $12 per machine hour
Details of the current product requirement
8 setup = 8 × $1,000 = $8,000
606 barrels = 606 × $11.95 = $7,242
80 inspections = 80 × $240 = $19,200
830 machine hours = 830 × $12 = $9,960
336 labor hours = 336 × $90 = $30,240
Total overhead assigned to order = $74,642
The account balances of Paradise Travel Service for the year ended May 31, 20Y6, follow:
Fees earned $900,000
Office expense 300,000
Miscellaneous expense 15,000
Wages expense 450,000
Accounts payable 18,000
Accounts receivable 38,000
Cash 52,000
Common Stock 100,000
Land 450,000
Supplies 3,000
$10,000 of dividends were paid during the year. Retained earnings as of June 1, 20Y5, were $300,000. Prepare a balance sheet as of May 31, 20Y6. When entering assets, enter them in order of liquidity.
Answer:
Paradise Travel Service
Balance Sheet as of May 31, 20Y6:
Assets:
Cash $52,000
Accounts receivable 38,000
Supplies 3,000
Land 450,000
Total assets $543,000
Liabilities and Equity:
Accounts payable 18,000
Common Stock 100,000
Retained Earnings 425,000
Total liabilities and
equity $543,000
Explanation:
a) Data and Calculations:
Paradise Travel Service
Income Statement for the year ended May 31, 20Y6:
Fees earned $900,000
Office expense 300,000
Miscellaneous expense 15,000
Wages expense 450,000
Total expenses 765,000
Net Income $135,000
Statement of Retained Earnings for the year ended May 31, 20Y6:
Retained Earnings, June 1, 20Y5 $300,000
Net Income 135,000
Dividends 10,000
Retained Earnings, May 31, 20Y6 $425,000
b) The balance sheet shows the balances of assets, liabilities and equity at the end of an accounting period. It derives its name from the accounting equation, which states that assets = liabilities + equity. This equation implies that the two sides always balance each other.
What is the first step in the standard purchasing process practiced by most companies
Answer:
requisition
Explanation:
its correct :D
The first step in the standard purchasing process practised by most companies is requisition.
What do you understand by requisition?Requisition is a request for goods or services made by an employee to the person or department in a company that is responsible for purchasing. If the request is approved, that entity will submit a purchase order to a supplier for the goods or services. In this context, a requisition is also known as a purchase requisition.
Requisitions are usually submitted in a standardized format on paper form or through e-procurement software that automates some of the tasks involved and reduces duplication of effort. A requisition form, whether physical or digital, typically includes the details about the item requested, the date of the request, the individual and department making the request and the location where the goods should be delivered.
Copies of the requisition, the purchase order, the invoice and the packing slip are usually stored together.
Learn more about requisition, here:
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PROJECT FOCUS: One day, a sophisticated business man walks into the cafe and asks to speak to the owner. He introduces himself as Brawner Smith and says that he would like to talk to you in private. Brawner has just opened a local record store down the street and would like to purchase your customer lists from music events. Brawner is offering you a rather large sum of money for the e-mail addresses and phone numbers for all of the customers who have attended concerts at the cafe over the past five years. What do you do
Answer:
Explanation:
Solution
At first, we will determine that whether we have communicated to our customers in a past that we will keep their information confidential and never be sold to any other person or business for any future marketing. If we have made such communication, then we should take information confidential and do not give to others.Similarly, if there is no confidentiality communication made in a past, then we can put an offer towards Brawner. We offer him that instead of providing phone numbers and email to him, pay tome, we will email and call the customers and let them know about Brawner and local record store. So in case any customers want something, they will contact directly to you (Brawner) or his shop.
If there is a communication to customers or from customers that the data should be kept private and not shared with anyone, the café owner should not share it.
Decision making based theory:It's crucial to know how the data will be utilised and whether or not it will be shared with the owner of the record store.
Customers should be consulted before the data is shared, and the store owner's details and interest in them should be disclosed.
It makes good commercial sense to provide the data in exchange for money because the café owner has invested a significant amount of time, effort, and money in gathering the information.
An agreement can be reached with the store owner for the sharing of data with other businesses, limiting data usage and avoiding rivalry.
Find out more information about 'Agreement'.
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General Manufacturing wants to borrow $1 million for three months. It uses its inventory as collateral for an 11% (APR) loan under a warehouse arrangement where the warehouse fee is $12,000 paid at the start of the three months. What is the EAR of this loan for General Manufacturing?
A) 2.8%.
B) 4.0%.
C) 17.1%.
D) 24.4%.
Answer:
C) 17.1%
Explanation:
Calculation for What is the EAR of this loan for General Manufacturing
First step is to compute FV using a financial calculator
PV =$1,000,000
I =11/12 =0.9167
N =3 years
Hence ,
FV =$1,027,752.85
Second step is to calculate the amount received
Amount received =$1,000,000 -$12,000
Amount received=$988,000
Now let calculate the actual rate
Actual rate =1,027,753 / 988,000
Actual rate =1.0402
Hence,
EAR =17.1%
Therefore the EAR of this loan for General Manufacturing will be 17.1%
Journalize the December 31 adjusting entry required if the amount of unearned fees at the end of the year is $12,530. Refer to the chart of accounts for the exact wording of the account titles. CNOW journals do not use lines for journal explanations. Every line on a journal page is used for debit or credit entries. CNOW journals will automatically indent a credit entry when a credit amount is entered.
ASSETS
11 Cash
12 Accounts Receivable
13 Supplies
14 Prepaid Insurance
15 Land
16 Equipment
17 Accumulated Depreciation-Equipment
LIABILITIES
21 Accounts Payable
22 Unearned Fees
23 Salaries Payable
24 Taxes Payable
EQUITY
31 Common Stock
32 Retained Earnings
33 Dividends
REVENUE
41 Fees Earned
EXPENSES
51 Advertising Expense
52 Insurance Expense
53 Rent Expense
54 Salary Expense
55 Supplies Expense
56 Utilities Expense
57 Depreciation Expense
59 Miscellaneous Expense
Answer:
Dr Unearned fees $24,510
Cr Fees earned $24,510
Explanation:
Preparation of the December 31 adjusting entry required
Based on the information given if the balance shown in the unearned fees account was the amount of $37,040 before adjustment at the end of the year which means that if the amount of unearned fees at the end of the year is the amount of $12,530 the December 31 adjusting entry required will be :
Dr Unearned fees $24,510
Cr Fees earned $24,510
($37,040-$12,530)
When overhead is underapplied: A. Cost of Goods Sold is understated B. Work in Process inventory is overstated C. Finished Goods inventory is overstated D. Gross Profit is understated
Answer:
A
Explanation:
Overhead cost is the cost involved in the daily operations of a business. It is the cost that is not directly attached to the production of goods and services. e.g. administrative costs
Overhead is underapplied when the amount budgeted for as overhead is less than the actual overhead incurred. This leads to cost of goods sold been understated. To correct for this, cost of goods sold should be adjusted retroactively. This reduces the amount of net income reported
Skysong Inc., a provider of consulting services, was founded on October 1, 2022. At the end of the first month of operations, the company decided to prepare an income statement, retained earnings statement, and balance sheet using the following information. Accounts payable $ 3,700 Supplies $ 2,650 Interest expense 350 Supplies expense 360 Equipment (net) 48,000 Depreciation expense 260 Salaries and wages expense 2,800 Service revenue 19,540 Bonds payable 21,800 Salaries and wages payable 590 Unearned service revenue 4,190 Common stock 9,900 Accounts receivable 1,450 Interest payable 150 Cash 4,000 Using the information, answer the following questions.
Required:
a. Prepare an income statement for the month of October 2022.
b. Prepare a retained earnings statement for the month of October 2022.
c. Prepare a balance sheet as of October 31, 2022.
Answer:
a. Income Statement for the month of October 2022
Revenue:
Service revenue $19,540
Expenses:
Salaries and Wages $2,800
Supplies Expenses $360
Depreciation Expenses $260
Interest Expenses $350
Total Expenses $3,770
Net Income $15,770
b. Retained earnings statement for the month of October 2022
Retained Earnings, October 1, 2020 $0
Add: Net Income $15,770
Retained Earnings, October 31, 2020 $15,770
X Company's degree of operating leverage (DOL) at the current sales volume level is calculated to be:
Answer:
4
Explanation:
Note: The complete question is attached as picture below
Degree of Operating Leverage = Contribution/Operating Income
Degree of Operating Leverage = $48000 / $12000
Degree of Operating Leverage = 4
So. X Company's degree of operating leverage (DOL) at the current sales volume level is calculated to be 4
Mutual funds that invest in mortgage-backed pass-through securities are exposed to which of the following risks and costs?
a. Credit risk
b. Liquidity risk
c. Interest rate risk
d. Capital adequacy requirements
e. Prepayment risk
Answer:
e. Prepayment risk
Explanation:
Prepayment risk is the likelihood of the firm where Special Purpose Vehicle that manages the mortgage-backed pass-through securities to repay the principal sum invested or part of it earlier than expected which then denies the investor of interest payments throughout the investment period.
When principals are repaid much earlier, the interest that could be earned on the principal is lost since the principal upon which the interest is to be computed has been repaid, hence, no more basis for the interest thereafter
A $200,000 loan amortized over 13 years at an interest rate of 10% per year requires payments of $21,215.85 to completely remove the loan when interest is charged on the unrecovered balance of the principal. If interest is charged on the original principal instead of the unrecovered balance, what is the loan balance after 13 years provided the same $21,215.85 payments are made each year
Answer:
Loan amount = $184,193.95
Explanation:
Interest will remain same each year. Interest per year = 200,000*10% = $20,000
Installment $21,215.85
Less: Interest $20,000
Payment to Principal $1,215.85
Total principal repaid in 13 years = $1,215.85 * 13 years = $15,806.05
So, the principal left = $200,000 - $15,806.05 = $184,193.95
In general, a larger R squared tends to suggest that:_______.
a. the estimated sample regression function explains a greater percentage of the total variation in y
b. the estimated sample regression function is more accurate
c. the estimated sample regression function explains a greater percentage of the explained variation in y
d. the estimated slope coefficient is more likely to equal the population slope coefficient
Answer:
c. the estimated sample regression function explains a greater percentage of the explained variation in y
Explanation:
The above is the reason showing the direct correlation between the sample regression and the R Square value.
The Best Manufacturing Company is considering a new investment. Financial projections for the investment are tabulated here. The corporate tax rate is 34%. Assume all sales revenue is received in cash, all operating costs and income taxes are paid in cash, and all cash flows occur at the end of the year. All net working capital is recovered at the end of the project.
Year 0 Year 1 Year 2 Year 3 Year 4
Investment $40,000
Sales revenue $20,500 $21,000 $21,500 $18,500
Operating costs 4,300 4,400 4,500 3,700
Depreciation 10,000 10,000 10,000 10,000
Change in NWC 460 510 560 460 ?
Change in NWC in year 4 will be sum of all the NWC needed in year 0-3.
A. Compute the incremental net income of the investment for each year. Do not intermediate calculations.
Year 1 Year 2 Year 3 Year 4
Net income $ $ $ $
B. Compute the incremental cash flows of the investment for each year. Do not round intermediate calculations. Negative amounts should be indicated by a minus sign.
Year 0 Year 1 Year 2 Year 3 Year 4
Cash Flow $ $ $ $ $
C. Suppose the appropriate discount rate is 12%. What is the NPV of the project? Do not Round intermediate calculations and round your final answer to 2 decimal places.
NPV $____
Answer:
The Best Manufacturing Company
A. Incremental Net Income:
Year 0 Year 1 Year 2 Year 3 Year 4
Sales revenue $20,500 $21,000 $21,500 $18,500
Operating costs 4,300 4,400 4,500 3,700
Depreciation 10,000 10,000 10,000 10,000
Net Income 6,200 6,600 7,000 4,800
Incremental NI 6,200 400 300 -3,200
B. Incremental cash flows:
Investment -$40,000
Sales revenue $20,500 $21,000 $21,500 $18,500
Operating costs -4,300 -4,400 -4,500 -3,700
Change in NWC -460 -510 -560 -460 1,990
Net Cash flows -24,260 $16,090 $16,440 $14,340 1,990
Incremental
cash flows -$24,260 $8,170 $350 -$2,100 -$12,440
C. NPV = $14,686.77
Explanation:
a) Data and Calculations:
Corporate tax rate = 34%
Year 0 Year 1 Year 2 Year 3 Year 4
Investment $40,000
Sales revenue $20,500 $21,000 $21,500 $18,500
Operating costs 4,300 4,400 4,500 3,700
Depreciation 10,000 10,000 10,000 10,000
Net Income 6,200 6,600 7,000 4,800
Incremental NI 6,200 400 300 -3,200
Incremental cash flows:
Investment -$40,000
Sales revenue $20,500 $21,000 $21,500 $18,500
Operating costs -4,300 -4,400 -4,500 -3,700
Change in NWC -460 -510 -560 -460 1,990
Net Cash flows -24,260 $16,090 $16,440 $14,340 1,990
Incremental
cash flows -$24,260 $8,170 $350 -$2,100 -$12,440
Net Present Value of the project:
Net Cash flows Discount PV
Factor
Year 0 -24,260 1 -$24,260.00
Year 1 16,090 0.893 14,368.37
Year 2 16,440 0.797 13,102.68
Year 3 14,340 0.712 10,210.08
Year 4 1,990 0.636 1,265.64
NPV $14,686.77
Inventory that had cost $21,200 was sold for $39,900 under terms 2/20, net/30. Customers returned merchandise to Ozark five days after the purchase. The merchandise had been sold for a price of $1,520. The merchandise had cost Ozark $920. All customers paid their accounts within the discount period. Selling and administrative expenses amounted to $4,200. Interest expense paid amounted to $360. Land that had cost $8,000 was sold for $9,250 cash.
Determine the amount of net sales Prepare a multistep income statement.
Where would the interest expense be shown on the statement of cash flows?
Operating activities
Investing activities
Financing activities
How would the sale of the land be shown on the statement of cash flows?
The full sales price of the land, $9,250, would be shown as a cash inflow from financing activities on the statement of cash flows.
The full sales price of the land, $9,250, would be shown as a cash inflow from investing activities on the statement of cash flows.
The full sales price of the land, $9,250, would be shown as a cash inflow from operating activities on the statement of cash flows
Answer and Explanation:
The interest expense should be shown in the operating activities section of the cash flow statement
Also the full sales price of the land i.e. $9,250 would be presented in the investing activities section of the cash flow statement as a cash inflow
So the same would be considered and relevant too
Lincoln, Inc., which uses a volume-based cost system, produces cat condos that sell for $140 each. Direct materials cost $22 per unit, and direct labor costs $15 per unit. Manufacturing overhead is applied at a rate of 280% of direct labor cost. Nonmanufacturing costs are $34 per unit. What is the gross profit margin for the cat condos
Answer:
43.57 %
Explanation:
The computation of the gross margin for the cat condos is given below:
Total Manufacturing Cost per unit is
= Direct materials + Direct labor + Manufacturing overhead
= $22 + $15 + ( 280% of $15)
= $79
Now
Gross Profit is
= Selling price per unit - Total Manufacturing Cost per unit
= $140 - $79
= $61
And finally
Gross Profit Margin is
= (Gross Profit ÷ Selling Price ) × 100
= ($61 ÷ $140) × 100
= 43.57 %
At his new job, Carlos notices that everyone places high values on their families and each others' families, birthdays are always celebrated, and flexible schedules are permitted to facilitate family involvement as long as the work is still getting done. Everyone is very relaxed and friendly. Carlos has made several observations about the:________
a. organizational structure.
b. ethical climate.
c. morale and performance programs.
d. codes of conduct.
e. corporate culture.
Answer:
e. corporate culture
Explanation:
Carlos has made several observations about the corporate culture. In other words, his observations were mainly about the believes and decisions that the company has made regarding its employees and outside of work factors. Which in this case are families. Their corporate culture values family a lot and they seem to hire individuals whose traits match these values as well. This is why they allow all of these leeways and benefits when regarding employee families.
heres a freebe to get more points. whats ur fav disney movie and whos ur fav disney princess. why?
Answer:
fav Disney movie: coco fav Disney princess: Tiana
Explanation:
i dont know why I just like them and they dont have a lot of black princesses so yeah
Answer:
belle and beauty and the beast
Explanation:
because shes not judgmental and can be her own person
The following information is available for completed Job No. 402:
Direct materials $170000
Direct labor $230000
Manufacturing overhead applied $160000
Units produced 8000 units
Units sold 6000 units.
The cost of the finished goods on hand from this job is:________
a. $420000.
b. $140000.
c. $560000.
d. $100000.
Answer:
b. $140000.
Explanation:
We know that
cost of finished goods in stock= (total production cost ÷ number of units produced)×number of units unsold
= [(170000+230000+160000)/8000]*(8000-6000)
= $140000
Option b) is the correct answer
The advantage of having many potential suppliers is their willingness to A. provide technical expertise. B. participate in JIT. C. provide innovations. D. offer lower prices in the short term.
Answer:
d
Explanation:
the more the suppliers the more the competition would be among suppliers to gain customers. As a result, they would offer lower prices in the short run to customers to gain them.
In the long run, suppliers would leave the oversaturated industry and equilibrium would be restored.
Bledsoe Company acquired $35,000 cash by issuing common stock on January 1, Year 1. During Year 1, Bledsoe earned $10,500 of revenue on account. The company collected $10,000 cash from customers in partial settlement of its accounts receivable and paid $7,400 cash for operating expenses. Based on this information alone, what was the impact on total assets during Year 1?
A. Total assets increased by $38.500.
B. Total assets increased by $1800.
C. Total assets increased by $30100.
D. Total asset did not change.
Answer:
Total Assets Increased by $38,100
Explanation:
Calculation for the impact on total assets during Year 1
Using this formula
Impact on total assets during Year 1=Cash+Revenue-Cash paid for operating expenses
Let plug in the formula
Impact on total assets during Year 1=$35,000+$10,500-$7,400
Impact on total assets during Year 1=$=38,100 increase
Therefore the impact on total assets during Year 1 is that the Total Assets will Increased by $38,100
To complete your degree and then go through graduate school, you will need $95,000 at end of each of the next 8 years. Your Aunt offered to put you through school, and she will deposit in a bank paying 4.00% interest a sum of money that is sufficient to provide you with the needed 8 withdrawals of $95,000 each.
Required:
a. How large of a deposit must she make today?
b. How much will be in the account immediately after you make the 3rd $95,000 withdrawal?
c. How much will be in the account immediately after you make all the withdrawals including the last one in 8 years?
d. Now, if you decide to drop out of school today and not make any of the withdrawal, but instead keep your auntâs money, that she deposited today, in the account that is earning 4.00%, how much would you have at the end of 8 years?
Answer:
PMT = $95,000
Rate = 4%
Life = 8 years
a. Amount to be deposited today
= PV(Rate, N, -PMT)
= PV(4%, 8, -95,000)
= $639,610.76
b. Amount in account after 3rd withdrawal
= PV(Rate, N, -PMT)
= PV(4%, 5, -95,000)
= $422,913.12
c. Balance in account after 8th withdrawal
= = PV(Rate, N, -PMT)
= PV(4%, 0, -95,000)
= $0
d. How much would you have at the end of 8 years?
= FV(4%, 8, -639610.76)
= $875,351.49
Grove Co. acquired a production machine on January 1, 2019, at a cost of $575,000. The machine is expected to have a four-year useful life, with a salvage value of $118,000. The machine is capable of producing 88,000 units of product in its lifetime. Actual production was as follows: 19,360 units in 2019; 28,160 units in 2020; 24,640 units in 2021; 15,840 units in 2022. Following is the comparative balance sheet presentation of the net book value of the production machine at December 31 for each year of the asset’s life, using three alternative depreciation methods (items a–c):
Productiom Machine Net of Accumulated Depreciation
At December 31
Depreciation Method 2019 2018 2017 2016
a. 80000 152000 264000 392000
b. 80000 80000 120000 240000
c. 80000 180000 280000 380000
Required:
Identify the depreciation method used for each of the preceding comparative balance sheet presentations.If a declinining balance method is used be sure to indicate the percentage.
Answer:
a. Production Units method
b. Straight Line depreciation
c. Double declining method
Explanation:
Straight Line Depreciation: [575,000 - 118,000] / 4 = 114,250 per year
Declining Balance Method :
Year 2019 : 19,360 / 88,000 * [ 575,000 - 118,000 ] = 100,540
Year 2020 : 28,160 / 88,000 * [ 575,000 - 118,000 ] = 146,240
Year 2021 : 24,640 / 88,000 * [ 575,000 - 118,000 ] = 127,960
Year 2022 : 15,840 / 88,000 * [ 575,000 - 118,000 ] = 82,260
The following information is available for Barnes Company for the fiscal year ended December 31: Beginning finished goods inventory in units 0 Units produced 7,800 Units sold 5,500 Sales $ 1,100,000 Materials cost $ 156,000 Variable conversion cost used $ 78,000 Fixed manufacturing cost $ 702,000 Indirect operating costs (fixed) $ 110,000 The absorption costing operating income is:
Answer:
See below
Explanation:
Material cost
$156,000
Add:
Variable conversion cost used
$78,000
Add:
Fixed manufacturing cost
$702,000
Total manufacturing cost
$936,000
Unit product cost
= Total manufacturing cost / Units produced
= $936,000/7,800
= $120
Ending inventory in unit produced
= Units produced - Units sold
= 7,800 - 5,500
= 2,300 units
Ending inventory under absorption costing
= 2,300 units × $120
= $276,000
Al is a medical doctor who conducts his practice as a sole proprietor. During 2017, he received cash of $280,000 for medical services. Of the amount collected, $40,000 was for services provided in 2016. At the end of 2017, Al had accounts receivable of $60,000, all for services rendered in 2017. In addition, at the end of the year, Al received $12,000 as an advance payment from a health maintenance organization (HMO) for services to be rendered in 2018. Compute Al’s gross income for 2017:
a. Using the cash basis of accounting.
b. Using the accrual basis of accounting.
c. Advise Al on which method of accounting he should use.
Answer:
a. Using the cash basis of accounting:
Cash received from customer $280,000
Cash received for future service $12,000
Total gross income $292,000
b. Using the accrual basis of accounting:
Service revenue = ($280,000 - $40,000 + 60,000) = $300,000
Gross income $300,000
c) AI should use cash accural basis of accounting so that he will not have to pay income taxes on uncollected accounts receivable.
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Answer:
The Answer is .
Explanation:
Answer:
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Explanation:
Isabel, a calendar-year taxpayer, uses the cash method of accounting for her sole proprietorship. In late December she received a $20,000 bill from her accountant for consulting services related to her small business. Isabel can pay the $20,000 bill anytime before January 30 of next year without penalty. Assume her marginal tax rate is 37 percent this year and next year, and that she can earn an after-tax rate of return of 8 percent on her investments
Required:
a. What is the after-tax cost if Isabel pays the $19,000 bill in December?
b. What is the after-tax cost if Isabel pays the $19,000 bill in January?
c. Based on requirement a and b, should Isabel pay the $19,000 bill in December or January?
Answer:
A. $11,970
B. $11,890
C. January
Explanation:
a. Calculation for the after-tax cost if Isabel pays the $19,000 bill in December
After-tax cost=$19,000 - ($19,000 x 37%)
After-tax cost= $19,000 - $7,030
After-tax cost= $11,970
Therefore the after-tax cost if Isabel pays the $19,000 bill in December will be $11,970
b. Calculation for the after-tax cost if Isabel pays the $19,000 bill in January
First step is to calculate the cost before taxes
Cost before taxes = $19,000 - ($19,000 x 8%/12) Cost before taxes= $19,000 - $127
Cost before taxes= $18,873
Now let calculate the After-tax cost
After-tax cost = $18,873 - ($18,873 x 37%)
After-tax cost= $18,873 - $6,983
After-tax cost = $11,890
Therefore the after-tax cost if Isabel pays the $19,000 bill in January will be $11,890
c. Based on the above calculation for both a and b, Isabel should pay the amount of $19,000 bill in January reason that it has the lowest cost of debt of the amount of $11,890 compare to December which has the cost of debt of the amount of $11,970.
A rational buyer will: buy a product until the marginal benefit of consuming the product is less than the price of the product. buy the product only when the marginal benefit of consuming the product is twice as much as the price of the product. not consider costs versus benefits when purchasing a product. keep buying a product until marginal benefit equals price.
Answer:
keep buying a product until marginal benefit equals price
Explanation:
A rational consumer would continue to consume a product until the marginal benefit of the last unit consumed equal marginal cost. At this point, utility is maximised.
For example, if the price of a bottle of water is $4. The utility you derive from the first bottle is 6. So you consume one more bottle, the utility you derive from the second bottle is 5. you buy a third bottle. The utility you derive from the 3rd bottle is 4. At this point utility is maximised and you should stop consuming more water
If you consume a 4th bottle, the utility you would derive from it would be 3 utils. This doesn't make sense because you are paying more for the bottle when compared to the utility you would derive from it