Answer:
$35,700
Explanation:
Projected cash balance at the end of April = Cash Balance at the beginning of the month + Total cash collection in the month - Total cash payments during the month
Projected cash balance at the end of April = $20,000 + $25,000 - ($4,000 + $5,300)
Projected cash balance at the end of April = $35,700.
Under absorption costing, a company had the following unit costs when 8,000 units were produced. Compute the total production cost per unit under variable costing if 20,000 units had been produced. Direct labor $8.50 per unit Direct material $9.00 per unit Variable overhead $6.75 per unit Fixed overhead ($60,000/8,000 units) $7.50 per unitCompute the total production cost per unit under variable costing if 20,000 units had been produced. a. $26.25 b. $27.25 c. $24.25 d. $31.75 e. $17.50
Answer:
d. $31.75
Explanation:
Computation for the total production cost per unit
Direct labor $8.50 per unit
Direct material $9.00 per unit
Variable overhead $6.75 per unit
Fixed overhead ($60,000/8,000 units) $7.50 per unit
Total production cost per unit $31.75
($8.50 + $6.75 + $9.00 + $7.50)
Therefore the total production cost per unit under variable costing if 20,000 units had been produced will be $31.75
What is the largest concern regarding the
'educate' and 'support' steps in the
process of implementing change?
A. Time
B. Expense
C. Difficulty
A start-up company decides salespeople should visit college campuses to
persuade students to try a new party game. The company realizes that selling
time is short and the salespeople are relatively inexperienced. Which
presentation method is likely to be most effective?
A. Formula selling
B. A prepared sales presentation
C. Telemarketing
D. Consultative selling
Answer prepared sales presentation
Explanation:
The presentation method is likely to be most effective a prepared sales presentation. Thus, option (b) is correct.
What is presentation?A presentation should have a solid theme, match the aim, best fit the audience, and be properly arranged. A speech communicates from a person to a listener. They offer a formal speech, often to sell something or gain support for a proposition.
According to the case was the based on the start-up company are the experienced sales people are the salespeople should visit college are the persuade students to try a new party game. There was the prepared the sales presentation are the sales people are the presentation method was the more to the effective.
As a result, the presentation method is likely to be most effective a prepared sales presentation. Therefore, option (b) is correct.
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All of the following are true statements regarding Treasury Bills EXCEPT:A T-Bills are issued in bearer form in the United StatesB T-Bills are registered in the owner's name in book entry formC T-Bills are issued at a discountD T-Bills are non-callable
Answer: A T-Bills are issued in bearer form in the United States
Explanation:
T-Bills are indeed registered in the owner's name in a book entry and the owner's name is acquired electronically.
T-Bills are also issued at a discount and come back to par at maturity which means that the gain on a T-Bill is a capital gain.
T-Bills are also non-callable. The only false statement here therefore is that T-Bills are issued in bearer form in the U.S..
jazz Corporation owns 10 percent of the Mitchell Corporation stock. Mitchell distributed a $10,000 dividend to Jazz Corporation. Jazz Corporations taxable income (loss) before the dividend income was ($2,000). What is the amount of Jazz's dividends received deduction on the dividend it received from Mitchell Corporation
Answer: $2,000
Explanation:
When a corporation owns less than 20% of another corporation, only 50% of the dividend it receives can be used as a deduction.
In this case, Jazz owns less than 10% of Mitchell and so can use 50% of $10,000 as a deduction:
= 50% * 10,000
= $5,000
However, Jazz incurred a loss of $2,000 which means that they will only need to deduct that $2,000 from the allowable $5,000.
Cool Sky reports the following costing data on its product for its first year of operations. During this first year, the company produced 46,000 units and sold 38,000 units at a price of $130 per unit.
Manufacturing costs
Direct materials per unit $54
Direct labor per unit $20
Variable overhead per unit $6
Fixed overhead for the year $506,000
Selling and administrative costs
Variable selling and administrative cost per unit $12
Fixed selling and administrative cost per year $115,000
Required:
Assume the company uses absorption costing. Determine its product cost per unit.
Answer:
Unitary costs= $91
Explanation:
Giving the following information:
Direct materials per unit $54
Direct labor per unit $20
Variable overhead per unit $6
Fixed overhead for the year $506,000
The absorption costing method includes all costs related to production, both fixed and variable. The unit product cost is calculated using direct material, direct labor, and total unitary manufacturing overhead.
Unitary costs= (506,000 / 46,000) + 54 + 20 + 6
Unitary costs= $91
Fundamental analysis shows that stock in Garske Software Corporation has a present value that is higher than its price. a. This stock is undervalued; you should consider adding it to your portfolio. b. This stock is undervalued; you shouldn't consider adding it to your portfolio. c. This stock is overvalued; you should consider adding it to your portfolio. d. This stock is overvalued; you shouldn't consider adding it to your portfolio.
Answer: a. This stock is undervalued; you should consider adding it to your portfolio.
Explanation:
Since, we are informed that the stock in Garske Software Corporation has a present value that is higher than its price, this implies that the value of the stock in Garske Software is higher than the price, it means the stock is undervalued and it should be considered adding to the portfolio.
Therefore, the correct option is A
The financial statement columns of the worksheet for Booer Company as of December 31, 2021 are as follows:
BOOER COMPANY Worksheet For the Year Ended December 31, 2021
Income Statement Balance Sheet
Accounts Dr. Cr. Dr. Cr.
Cash 8,000
Accounts Receivable 26,000
Supplies 4,500
Prepaid Insurance 7,000
Equipment 41,000
Accumulated Depreciation—Equipment 4,800
Patents 7,500
Accounts Payable 22,200
Notes Payable (due 2023) 20,000
Common Stock 30,000
Retained Earnings 13,300
Dividends 4,200
Service Revenue 26,400
Salaries and Wages Expense 5,200
Depreciation Expense 4,800
Insurance Expense 5,000
Interest Expense 3,500
Totals 18,500 26,400 98,200 90,300
Net Income 7,900
7,900 26,400 26,400 98,200
Required:
Prepare a classified balance sheet for Booer Company.
Answer:
See below
Explanation:
Classified balance sheet for Booer Company as of 31, December 2021
Fixed assets
Equipment
$41,000
Less:
Accumulated depreciation
($4,800)
NBV
$26,200
Current assets
Cash
$8,000
Accounts receivables
$26,000
Supplies
$4,500
Prepaid insurance
$7,000
Patents
$7,500
Total assets $26,200 + $53,000 = $79,200
Current liabilities
Accounts payable
$22,200
Notes payable
$20,000
Financed by;
Common stock
$30,000
Net income
$7,900
Total liabilities $42,200 + $37,900 = $80,100
Marketing managers from two companies agree that competing to offer the lowest prices has been hurting their profit margins, so they agree on the prices they will charge for some of their key products. What illegal pricing behavior is this? O A. Price discrimination O B. Deceptive pricing C. Price fixing O D. Price gouging
Price fixing is the illegal pricing behaviour is this. Hence, option C is correct.
A written, verbal, or conduct-based agreement to raise, lower, maintain, or stabilize prices or price levels is known as price fixing. Antitrust laws typically mandate that each business establish prices and other competitive terms independently, without consulting a rival.
Competitors who agree to raise, cut, or stable prices are said to have engaged in horizontal price fixing. For instance, a horizontal agreement between two rival fast-food establishments selling hamburgers on the sale pricing of cheeseburgers is prohibited by antitrust rules.
Price fixing is an anticompetitive agreement between players on the same side of a market to buy or sell a good, service, or commodity solely at a set price, or to keep the market's dynamics in such a way that the price is kept at a fixed level.
Thus, option C is correct.
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Answer:
price fixing
Explanation:
The manager of a T-shirt company is considering investing in a new embroidery machine that costs $8,500, and the depreciation rate is 6.5% per year. The expected increase in next year’s revenue as a result of the investment is $1,500. For what values of the interest rate (r) should the company make this investment? Specify the answer to two places beyond the decimal point. Any r below %.
Answer:
The interest rate will be "11.147%".
Explanation:
The given values are:
Cost of machine,
= $8500
Depreciation rate,
= 6.5%
Increase in income,
= $1500
Now,
⇒ [tex]Increase \ in \ income=Cost \ of \ machine\times \frac{R}{100}+ Cost \ of \ machine\times \frac{Depreciation \ rate}{100}[/tex]
On substituting the values, we get
⇒ [tex]1500=8500\times \frac{R}{100}+8500\times \frac{6.5}{100}[/tex]
⇒ [tex]1500=85R+552.5[/tex]
On subtracting "552.5" from both sides, we get
⇒ [tex]1500-552.5=85R+552.5-552.5[/tex]
⇒ [tex]947.5=85R[/tex]
⇒ [tex]R=\frac{947.5}{85}[/tex]
⇒ [tex]R=11.147[/tex]%
You are the Accounting Director for SpaceX based in New York. Your department is implementing new accounting software (called First Launch) that will affect all 300 locations across the United States. The purpose of the changeover is to improve efficiency, increase security, and provide more transparency. Each accountant will need to install the software within 48 hours of receiving the new product. Failure to do so will result in the product password expiring and require resending of the product. Once installed, accountants will have to restart all computers on the premises. Technical issues may arise during the two-day software rollout starting at 9:00 a.m. on March 1, 2021.
Required:
Write one email addressing all 300 location accountants to inform them of the changeover (you decide the order of information)
Answer:
The change will impact all 300 locations. The letter should be written to entire staff of the SpaceX.
Explanation:
To: All Staff SpaceX Team
Subject: Change over details (First Launch)
As you all are already aware about the implementation of new software named First Launch . The software installation run will start from March 1, 2021 at 9:00 a.m. Every accountant receiving the new product will require to install the software within 48 hours. Failure to do will result in expiry of the password which will require resending the software. After installation all accountants must restart the computer.
This change will affect all 300 locations across the United States. The changeover will result in improved efficiency, increase in security and there will be more transparency.
If there is any concern or query regarding this change feel free to write the team implementing the change.
Regards,
Director Accounts.
Taking into account the time value of money and assuming that 100 percent of a customer segment will have experienced attrition once the net present value of annual profits per customer falls below ¥100, what is the lifetime value to MBC of the following customers? A Little Leaguer A Summer Slugger An Elite Ballplayer if MBC places the ad in the local baseball enthusiasts magazine An Elite Ballplayer if MBC purchases the list and invites all target customers to the gala event An Entertainment Seeker
Answer:
hello your question is incomplete attached below is the missing information
a) 8848.32 yen
b) 1732.95 yen
c) 13487.95 yen
d) 22578.86 yen
e) 248 yen
Explanation:
a) Determine for A little leaguer
At year 15 the NPV annual profit for each customer will fall below 100. hence the lifetime value for each customer will be calculated as :
= ( 9733 / ( 1 + 0.1 ) 15 ) - 10000 = 8848.32 yen
b)Determine for A summer slugger
At year 7 the NPV annual profit for each customer will fall below 100. hence The lifetime value for each customer will be calculated as
= ( 1906 / ( 1 + 0.1 ) 7 ) - 10000 = 1732.95 yen
c) calculate for An elite Ballplayer ( when MBC places ad )
At year 12 the NPV annual profit for each customer will fall below 100. Hence the lifetime value for each customer will be calculated as
=( 13547.31 / ( 1 + 0.1 ) 12 ) - 60000 = 13487.95 yen
d) calculate for An Elite Ballplayer ( when MBC purchases the list )
At year 12 the NPV annual profit for each customer will fall below 100. Hence the lifetime value for each customer will be calculated as
= ( 22638.22 / ( 1 + 0.1 ) 12 ) - 50000 = 22578.86 yen
e) Calculate for An entertainment seeker
At year 4 the NPV annual profit for each customer will fall below 100, Hence the lifetime value for each customer can be calculated as
= ( 273 / ( 1 + 0.1 ) 4 ) - 2000 = 248 yen
project water has an initial cost of 639,700 and projected cash flow of 288,000 319,000 and 165,000 for years 1 through 3 respectevely project aqua has an initial cost of 411,200 and projected cash flows of 186,000 178,000 and 145,000 for years 1 through 3 respectevely what is the incremental IRR of these two mutually exclusive project
Answer:
IRR = 8.77%
Explanation:
Internal rate of return is the discount rate that equates the after-tax cash flows from an investment to the amount invested
IRR can be calculated with a financial calculator
Incremental IRR can be determined by subtracting the cash flows of the project with the smaller cost from the cash flows of the project with the higher initial cost
Incremental cash flows
Cash flow in year 0 = 639,700 - 411,200 = -228,500
Cash flow in year 1 = 288,000 - 186,000 = 102,000
Cash flow in year 2 = 319,000 - 178,000 = 141,000
Cash flow in year 3 = 165,000 - 145,000 = 20,000
IRR = 8.77%
To find the IRR using a financial calculator:
1. Input the cash flow values by pressing the CF button. After inputting the value, press enter and the arrow facing a downward direction.
2. After inputting all the cash flows, press the IRR button and then press the compute button.
3. Press compute
A marketer of automobiles wants to introduce a new model using a message
that combines visuals, music, words, and action. Which category of
advertising media will best meet this marketer's goals?
A. Magazines
B. Television
C. Radio
D. Outdoor
Answer: Television!
Explanation:
Radio, Magazine, and Outdoor don't all have the combined visuals, music, words, and action that television has.
Television as the advertising media will best meet the automobile marketer's goals. Thus, the correct answer is option B.
What is advertising media?The term "advertising media" describes a range of mainstream or alternative media platforms via which companies can market their goods, services, or brand. Knowing which advertising media channels are advantageous for your business can be vital in staying ahead of the competition because it is hard for every customer to be aware of every brand's offerings. Marketers can interact with various audiences in unique ways by utilizing the correct kind of advertising media.
Audio and visual are combined in television. This produces a multi-sensory advertising experience that demonstrates to consumers the worth of your goods. The touchpoint occurs in the viewer's house when an advertisement is shown on television. It becomes a more intimate medium as a result. A excellent technique to build a personal relationship with a viewer is through television.
Therefore, Radio, Magazine, and Outdoor as the media for advertising don't have the combined visuals, music, words, and action that television has.
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Anna owns the Sweet Alps Chocolate store. She charges $10 per pound for her hand made chocolate. You, the economist, have calculated the elasticity of demand for chocolate in her town to be 2.5. If she wants to increase her total revenue, what advice will you give her and why? Use diagrams and economic terms to explain your answer.
Answer: Decrease her prices.
Explanation:
The elasticity of demand shows the change in quantity demanded as a result of a change in price.
In this case, if price decreases by 1%, quantity demanded for chocolate would increase by 2.5%.
If she wants to increase her revenue therefore, she should decrease the price.
For example:
If the demand was 10 chocolate bars a day, she would earn:
= 10 * 10
= $100 a day
If she decreased the price by 10%, price would be:
= 10 * ( 1 -10%)
= $9.00
Quantity demanded would be:
= 10 * (1 + 25%)
= 12.5 bars
Revenue would become:
= 12.5 * 9
= $112.50 which is more than the previous $100 she was making.
Becton Labs, Inc., produces various chemical compounds for industrial use. One compound, called Fludex, is prepared using an elaborate distilling process. The company has developed standard costs for one unit of Fludex, as follows: Standard Quantity Standard Price or Rate Standard Cost Direct materials 2.50 ounces $ 28.00 per ounce $ 70.00 Direct labor 0.50 hours $ 13.00 per hour 6.50 Variable manufacturing overhead 0.50 hours $ 3.60 per hour 1.80 $ 78.30 During November, the following activity was recorded relative to production of Fludex: a. Materials purchased, 13,500 ounces at a cost of $361,800. b. There was no beginning inventory of materials; however, at the end of the month, 2,900 ounces of material remained in ending inventory. c. The company employs 21 lab technicians to work on the production of Fludex. During November, they worked an average of 140 hours at an average rate of $11.50 per hour. d. Variable manufacturing overhead is assigned to Fludex on the basis of direct labor-hours. Variable manufacturing overhead costs during November totaled $4,400. e. During November, 4,200 good units of Fludex were produced . Required: For direct materials: a. Compute the price and quantity variances. (Round your "price per ounce" answers to 2 decimal places. Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance).) b. The materials were purchased from a new supplier who is anxious to enter into a long-term purchase contract. Would you recommend that the company sign the contract?
Answer:
A. Materials price variance 16,200 F
Materials quantity variance 2,800 U
B. Yes
Explanation:
A. Computation for the price and quantity variances For direct materials
Calculation for Materials price variance
Materials price variance=361,800-(13,500*28)
Materials price variance=361,800-378,000
Materials price variance=16,200 FAVOURABLE
Calculation for Materials quantity variance
First step is to calculate Actual materials used
Actual materials used=13,500-2,900
Actual materials used=10,600
Now let compute the Materials quantity variance
Materials quantity variance=28*(10,600-4,200*2.5)
Materials quantity variance=2,800
UNFAVORABLE
Therefore the price will be 16,200 FAVOURABLE and quantity variances will be 2,800 UNFAVORABLE For direct materials
B. Based on the above calculation I Would recommend that the company sign the contract because Materials variance is Favorable
Europa Company manufactures only one product. Presented below is direct labor information for November. Standard direct labor hours per unit of product 3.20 Number of finished units produced 6,500 Standard wage rate per direct labor hour (SP) $ 19.20 Total direct labor payroll for the period $ 359,424 Actual wage rate per direct labor hour worked (AP) $ 16.00 The actual direct labor hours worked (AQ) during November (rounded to the nearest whole number) was:
Answer:
22,464 hours
Explanation:
Calculation to determine The actual direct labor hours worked (AQ) during November
Using this formula
Actual direct labor hours worked (AQ) = Total labor cost ÷ Actual wage rate
Let plug in the formula
Actual direct labor hours worked (AQ) = $359,424 ÷ 16
Actual direct labor hours worked (AQ) = 22,464 hours
Therefore The actual direct labor hours worked (AQ) during November will be 22,464 hours
On April 1, 2015, the City of Southern Ponds issued $3,500,000 in 4% general obligation, tax supported bonds at 101 for the purpose of constructing a new police station. The premium was transferred to a debt service fund. A total of $3,490,000 was used to construct the police station, which was completed before December 31, 2015, the end of the fiscal year. The
remaining funds were transferred to the debt service fund. The bonds were dated April 1, 2015, and paid interest on October 1 and April 1. The first of 20 equal annual principal payments of $175,000 is due April 1, 2016.
What amount would be reported as debt service expenditures for 2015?
A) $ -0-
B) $ 70,000.
C) $140,000.
D) $245,000.
Answer:
B) $ 70,000.
Explanation:
Debt service expense
Debt service expense is the interest expense incurred to avail the debt services from another entity.
Debt service expense can be calculated using the following formula
Debt service expense = Face value of Bonds x Interest rate x Semiannual fraction
Where
Face value of bonds = $3,500,000
Interest rate = 4%
Semiannual fraction = 6 / 12 = 1/ 2
placing values in the formula
Debt service expense = $3,500,000 x 4% x 1/2
Debt service expense = $70,000
The following are the transactions for the month of July.
Units Unit Cost Unit Selling Price
July 1 Beginning Inventory 41 $10
July 13 Purchase 205 12
July 25 Sold (100 ) $16
July 31 Ending Inventory 146
Required:
Calculate cost of goods available for sale and ending inventory, then sales, cost of goods sold, and gross profit, under FIFO. Assume a periodic inventory system is used.
Answer:
DO A BARREL ROLL
Explanation:USE THE BRAKE
Woidtke Manufacturing's stock currently sells for $25 a share. The stock just paid a dividend of $1.60 a share (i.e., D0 = $1.60), and the dividend is expected to grow forever at a constant rate of 5% a year. What stock price is expected 1 year from now? Do not round intermediate calculations. Round your answer to the nearest cent. $ What is the estimated required rate of return on Woidtke's stock (assume the market is in equilibrium with the required return equal to the expected return)? Do not round intermediate calculations. Round the answer to two decimal places. %
Answer:
$26.25
11.72%
Explanation:
Stock price next year = current price x ( 1 + growth rate)
$25 x (1.05) = $26.25
According to the constant growth dividend growth model :
P = D1 / ( r - g)
P = price of the stock
D1 = next dividend = current dividend x (1 +growth rate)
r = required rate of return
g = growth rate
$25 = $1.60 x ( 1.05) / r - 0.05
$25 = 1.68 / r - 0.05
$25 x ( r - 0.05) = 1.68
r = 0.1172
r = 11.72%
On December 1, Year 1, Bradley Corporation incurs a 15-year $200,000 mortgage liability in conjunction with the acquisition of an office building. This mortgage is payable in monthly installments of $2,400, which include interest computed at the rate of 12% per year. The first monthly payment is made on December 31, Year 1.
How much of the first payment made on December 31, Year 1, represents interest expense?
a 2400
b 400
c 2304
d 2000
Answer:
d 2000
Explanation:
The computation of the interest payment made is shown below:
Interest expense is
= Mortgage liability × rate of interest × given months ÷ total months
= ($200,000 × 12%) × 1 ÷ 12
= $24,000 × 1 ÷ 12
= $2,000
Hence, the correct option is d.
Shmenson Company uses the periodic inventory system. Sales for 2020 were $470,000 while operating expenses were $175,000. Beginning and ending inventories for 2020 were $70,000 and $60,000, respectively. Net purchases were $180,000 while freight in was $15,000. The net income or loss for 2020 was:
Answer:
The net income for 2020 was $90,000
Explanation:
Shmenson Company
Income Statement for the year ended 2020
Sales $470,000
Less Cost of Sales
Beginning Inventories $70,000
Add Net purchases $180,000
Add Freight In $15,000
Less Ending Inventories ($60,000) ($205,000)
Gross Profit $265,000
Less Expenses
Operating expenses ($175,000)
Net Income $90,000
Conclusion
Thus, the net income for 2020 was $90,000.
Match each of the following phrases with the term that it most closely describes it. Each term will be used only once.
a. Prepared when materials that have been ordered are received and inspected
b. Serve as the basis for recording direct labor on a job cost sheet
c. These make up the work in process subsidiary ledger
d. The process by which factory overhead is assigned to a cost object
e. Serve as the basis for recording materials used
1. Cost allocation
2. Job Cost sheet
3. Receiving Sheet
4. Time tickets
5. Materials requisitions
Answer:
a. Receiving Sheet.
b. Time tickets.
c. Job Cost sheet.
d. Cost allocation.
e. Material requisitions.
Explanation:
A financial statement is a written report that quantitatively describes a firm's financial health. Under the financial statements is a cash-flow statement, which is used to record the cash inflow and cash equivalents leaving a business firm.
Cash flow statement, also known as the statement of cash flows, contains financial information about operating, financial and investing activities.
Hence, activities that involve the production or purchase of merchandise and the sale of goods and services to customers, including expenditures related to administering the business, are classified as operating activities. All the net income or cash from all operational business activities of a company is recorded as operating activities.
Basically, the financial statements are the formally written records of the business and financial activities of a business entity or organization which includes;
a. Receiving Sheet: prepared when materials that have been ordered are received and inspected.
b. Time tickets: serve as the basis for recording direct labor on a job cost sheet.
c. Job Cost sheet: these make up the work in process subsidiary ledger.
d. Cost allocation: the process by which factory overhead is assigned to a cost object.
e. Material requisitions: serve as the basis for recording materials used.
During the course of your examination of the financial statements of Trojan Corporation for the year ended December 31, 2018, you come across several items needing further consideration. Currently, net income is $87,000.
a. An insurance policy covering 12 months was purchased on October 1, 2018, for $16,200. The entire amount was debited to Prepaid Insurance and no adjusting entry was made for this item in 2018.
b. During 2018, the company received a $2,700 cash advance from a customer for services to be performed in 2019. The $2,700 was incorrectly credited to Service Revenue.
c. There were no supplies listed in the balance sheet under assets. However, you discover that supplies costing $2,100 were on hand at December 31, 2018.
d. Trojan borrowed $57,000 from a local bank on September 1, 2018. Principal and interest at 9% will be paid on August 31, 2019. No accrual was made for interest in 2018.
Answer:
$76,440
Explanation:
Calculation to determine the proper amount of net income as of December 31, 2018
Net income $87,000
Less Adjusted for insurance ($4,050)
($16,200*3/12)
Less Adjusted for deferred income ($2,700)
Less Adjusted for supplies ($2,100)
Less Adjusted for interest ($1,710)
($57,000*9%*4/12)
Net income (Adjusted) $76,440
Therefore The the proper amount of net income as of December 31, 2018 will be $76,440
Rembrandt Paint Company had the following income statement items for the year ended December 31, 2021 ($ in thousands):
Sales revenue $25,000 Cost of goods sold $14,000
Interest revenue 240 Selling and administrative expense 3,200
Interest expense 440 Restructuring costs 1,500
In addition, during the year the company completed the disposal of its plastics business and incurred a loss from operations of $3.2 million and a gain on disposal of the component’s assets of $5.2 million. 600,000 shares of common stock were outstanding throughout 2018. Income tax expense has not yet been recorded. The income tax rate is 40% on all items of income (loss).
Required:
Prepare a multiple-step income statement for 2021, including EPS disclosures.
Answer:
Net income = $4,860,000
Earning Per Share
Income From Continuing Operations ($3660/600) 6.10
Income From Discontinued Operations )$1,200/600) 2.0
Net Income 8.10
Explanation:
The multiple-step income statement can be described as an income statement that differentiate a company's operating revenues and operating expenses from its nonoperating revenues, nonoperating expenses, gains, and losses. It also shows gross profit separately as net sales revenue minus the cost of goods sold.
The required multiple-step income statement can be prepared as follows:
Rembrandt Paint Company
Income Statement
For the Year Ended December 31, 2021
Particulars $'000 $'000
Sales revenue 25,000
Cost of goods sold 14,000
Gross profit 11,000
Operating expenses
Selling and administrative expense (3,200)
Restructuring costs (1,500)
Total operating expenses (4,700)
Operating income 6,300
Other income (expense)
Interest revenue 240
Interest expense (440)
Net interest revenue (expense) (200)
Income from continuing op. b4 tax 6,100
Taxes (40% * $6,100) (2,440)
Income From Continuing Operations 3,660
Discontinued operation
Loss from op. (3,200 * (1-Tax rate)) (1,920)
Gain on disposal (5,200 * (1-Tax rate)) 3,120
Income from discontinued op. 1,200
Net income 4,860
Number of common shares outstanding 600
Earning Per Share
Income From Continuing Operations ($3660/600) 6.10
Income From Discontinued Operations )$1,200/600 2.00
Net Income 8.10
Vaughn Manufacturing sells its product for $60 per unit. During 2019, it produced 60000 units and sold 50000 units (there was no beginning inventory). Costs per unit are: direct materials $14, direct labor $15, and variable overhead $5. Fixed costs are: $720000 manufacturing overhead, and $90000 selling and administrative expenses. The per unit manufacturing cost under variable costing is
Answer:
$2.00
Explanation:
Consider Variable Manufacturing Costs only.
The per unit manufacturing cost under variable costing is $2.00
Special Order Poppy has received a special order for 1,000 units of its product at a special price of $125. The product currently sells 18,000 units for $150 and has the following manufacturing costs:
Per unit Direct materials $45
Direct labor 30
Variable manufacturing overhead 35
Fixed manufacturing overhead 25
Unit cost $135
Assume that Poppy has sufficient capacity to fill the order without harming normal production and sales.
a. If Poppy accepts the order, what effect will the order have on the company’s short-term profit?
b. If Poppy accepts the order and fills it completely, what effect will the order have on the company’s short-term profit?
Answer:
Results are below.
Explanation:
1) Because it is a special offer, and there is unused capacity, we will not take into account the fixed costs:
Effect on income= 1,000*125 - 1,000*(45 + 30 + 35)
Effect on income= $15,000
2) Now, the company doesn't have unused capacity. It only has 500 units in excess. We have to take into account the fixed costs and the original selling price of the units.
Effect on income= 1,000*125 - 1,000*(45 + 30 + 35) - 500*(25 + 25)
Effect on income= -$10,000
Preparing a consolidated income statement - with noncontrolling interest, but AAP or intercompany profits
A parent company purchased an 70% interest in its subsidiary several years ago with no AAP (i.e., purchased at book value). Each reports the following income statement for the current year, as shown in part b. below.
b. Prepare the consolidated income statement for the current year.
Elimination Entries
Parent Subsidiary Dr. Cr. Consolidated
Income statement:
Sales $6,000,000 $900,000
Cost of goods sold (4,200,000) (540,000)
Gross profit 1,800,000 360,000
Income (loss) from subsidiary 88,2000 0
Operating expenses (1,140,000) (234,000)
Net income $748,200 $126,000
Net income attributable to noncontrolling interests
Net income attributable to parent
Answer:
Consol. Income Parent Subsidiary Elimination entries Consolidated
statement Dr Cr
Sales 6000000 900000 6900000
COGS -4200000 -540000 -4740000
Gross profit 1800000 360000 2160000
Income (loss) 88200 0 88200 0
from subsidiary
Operating -1140000 -234000 -1374000
expense
Net income 748200 126000 88200 786000
Net income attributable to 37800 37800
non-controlling interests*
Net income attributable to Parent 748200
Workings:
Net income attributable to non-controlling interests = 126000*30% = 37800
Max, Inc., has two divisions, South Division and North Division. South Division's sales, contribution margin ratio, and traceable fixed expenses are $500,000, 60%, and $100,000, respectively. What is the segment margin for the South Division
Answer:
$200,000
Explanation:
Segment Margin is Profit wholly controlled by a specific division. Now, this excludes shared costs from the central Head Office.
The segment margin for the South Division is calculated as follows :
Sales $500,000
Less Variable Costs (40% x $500,000) ($200,000)
Contribution (60% x $500,000) $300,000
Less Traceable Fixed Expenses ($100,000)
Segment Margin $200,000
Conclusion
The segment margin for the South Division is $200,000
Compute the weight of common equity that should be used in the firm's WACC calculation if the market value of the firm's debt is $62 million, the market value of the firm's preferred stock is $7 million and the market value of the firm's common equity is $111 million. Enter your answer as a decimal (i.e. 0.54)
Answer:
0.62 or 62 %
Explanation:
Weight of common equity = Market Value of Equity ÷ Total Market Value of Sources of Finance
where,
Market Value of Equity = $111 million
Total Market Value of Sources of Finance = $62 million + $7 million + $111 million = $180 million
therefore,
Weight of common equity = $111 million ÷ $180 million
= 0.62 or 62 %
Conclusion
the weight of common equity that should be 0.62 or 62 %