Answer:
Annual depreciation 2017= $8,000
Explanation:
Giving the following information:
The cost of the asset is $50,000 with an estimated five-year life and $10,000 salvage value at the end of its useful life.
To calculate the depreciation expense under the straight-line method, we need to use the following formula:
Annual depreciation= (original cost - salvage value)/estimated life (years)
Annual depreciation= (50,000 - 10,000)/5
Annual depreciation= $8,000
Equilibrium price is $8 in a perfectly competitive market. For a perfectly competitive firm, MR = MC at 150 units of output. At 150 units, ATC is $11, and AVC is $10. The best policy for this firm is to __________ in the short run. Also, total fixed cost equals __________ and total variable cost equals __________ for this firm.
Answer:
Shut down
$1650
$1500
Explanation:
A perfect competition is characterised by many buyers and sellers of homogeneous goods and services. Market prices are set by the forces of demand and supply. There are no barriers to entry or exit of firms into the industry.
In the long run, firms earn zero economic profit. If in the short run firms are earning economic profit, in the long run firms would enter into the industry. This would drive economic profit to zero.
Also, if in the short run, firms are earning economic loss, in the long run, firms would exit the industry until economic profit falls to zero.
in the shut run, a perfect competition should shut down if average variable cost is greater than price. this is the case for this firm $10 is greater than $8.
total fixed cost = average fixed cost x quantity produced = $11 x 150 = $1650
Total variable cost = average variable cost x quantity produced = $10 x 150 = $1500
On January 1, 2017, Blossom Company had Accounts Receivable of $51,600 and Allowance for Doubtful Accounts of $4,100. Blossom Company prepares financial statements annually. During the year, the following selected transactions occurred:
Jan. 5 Sold $4,600 of merchandise to Rian Company, terms n/30.
Feb. 2 Accepted a $4,600, 4-month, 9% promissory note from Rian Company for balance due.
12 Sold $11,100 of merchandise to Cato Company and accepted Cato’s $11,100, 2-month, 10% note for the balance due.
26 Sold $11,700 of merchandise to Malcolm Co., terms n/10.
Apr. 5 Accepted a $11,700, 3-month, 8% note from Malcolm Co. for balance due.
12 Collected Cato Company note in full. June 2 Collected Rian Company note in full.
15 Sold $2,100 of merchandise to Gerri Inc. and accepted a $2,100, 6-month, 12% note for the amount due.
Journalize the transactions. (Omit cost of goods sold entries.)
Answer:
Blossom Company
Journal Entries:
Jan. 5
Debit Accounts Receivable (Rian Company) $4,600
Credit Sales Revenue $4,600
To record credit sales.
Feb. 2:
Debit 9% Note Receivable $4,600
Credit Accounts Receivable $4,600
To record the transfer.
Feb. 12
Debit Notes Receivable (Cato Company) $11,100
Credit Sales Revenue $11,100
To record the sale in exchange for 10% note.
Feb. 26:
Debit Accounts REceivable (Malcom Co.) $11,700
Credit Sales Revenue $11,700
To record sales on account, terms n/10.
Apr. 5:
Debit Notes Receivable $11,700
Credit Accounts Receivable $11,700
To transfer the balance to a 3-month 8% notes receivable
Apr. 12:
Debit Cash Account $11,285
Credit Interest on Notes Receivable $185
Credit Notes Receivable $11,100
To record full settlement of notes receivable.
Apr. 15:
Debit Notes Receivable $2,100
Credit Sales Revenue $2,100
To record the sale of goods and acceptance of 6-month 12% note.
Explanation:
Journal entries record business transactions for the first time. The accounts to be debited and credited are identified and these are entered into the journal. It is from the journal that postings are made to the general ledger.
Containers, Inc., sends its standard order form to Distribution Corporation to evidence a sale of packing materials. Distribution responds with its own standard purchase order form. Additional terms in the purchase order automatically become part of the contract unless:________.
59. A poultry rancher discovered that when she increased the price of organic eggs from $0.75 to $1.00 per dozen, the sales of her eggs fell from 300 dozen per week to 200 dozen per week. Her price elasticity of demand (using the midpoint method) would be:
Answer:
PED = -1.4 or |1.4| in absolute values, price elastic
Explanation:
the price elasticity of demand (PED) using the midpoint method:
PED = % change in quantity / % change in price
% change in quantity = {(Q 2 − Q1 ) / [(Q2 + Q1)/2]} x 100 = {(200 − 300 ) / [(200 + 300)/2]} x 100 = -100 / 250 = -0.4% change in price = {(P2 − P1 ) / [(P2 + P1)/2]} x 100 = {(1 − 0.75 ) / [(1 + 0.75)/2]} x 100 = 0.286PED = -0.4 / 0.286 = -1.4 or |1.4| in absolute values
According to Michael Porter, businesses can compete successfully by doing which of the following? A. being the cheapest producer B. making unique products valued by consumers C. applying their expertise in a narrow market segment to meet that segment’s particular product or service needs D. any of these
Answer:
D. any of these
Explanation:
Competitive strategy means intentionally selecting a distinct set of tasks to produce a compelling value proposition. Michael Porter focused on the topic of international competition. He consulted international governments on their economic strategies and led the U.S. Presidential Commission. Porter's strategies explain how a business upholds competitive advantages across the whole concerned market context.
Use commercial bank and Federal Reserve Bank balance sheets to demonstrate the immediate effect of each of the following transactions on commercial bank reserves. Assume that the initial reserve ratio is 20 percent. Fill in the new balances in the column in the balance sheets that correspond with each of the following transactions. Consider each transaction separately, not cumulatively.
a. Federal Reserve Banks purchase $2 billion worth of securities from banks.
b. Commercial banks borrow $1 billion from Federal Reserve Banks at the discount rate.
c. The Fed reduces the reserve ratio from 20 percent to 19 percent.
Instructions: Enter your answers as whole numbers in the gray-shaded cells of both tables below.
Answer:
Following are the explanation of the given points:
Explanation:
In choice (a):
The Fed was expected to purchase securities worth $2 billion, in will consist of up to two billion dollars, which adds the vales $ 40 and $2s equal to $42 billion and it minimizes securities by two billion Dollars (60-2$=58 billion dollars). The reserves required for a demand of 200 billion dollars are $40 billion (= 20% of 200 billion dollars).
The excess assets are two billion dollars (= 42 billion dollars-40 billion dollars) as well as the financial system will add 10 billion dollars more (= 2 billion dollars x 5) to the supply of money (by lending money).
In choice (b):
The Financial banks are expected to borrow from the Fed $1 billion. In the financial institutions, it can now raise (by loaning money) its supply of cash by 5 billion dollars (= $1 billion * 5).
In choice (c):
The adjustment throughout the reserve ratio doesn't change the balance sheets itself. If either the reserve ratio is assumed reported having reduced from 20% to 19%, then assets required currently stand at $38 billion (= 19% of $200 billion (= 0.19 x 200 = $38 billion), with financial institutions still able to increase their capital (by loans) by $10.53 billion (= $2 billion (1/0.19)). Proof: $210.53 billion 19% is $40 billion.
Following are the attachment of the table:
Some argue that the Federal Reserve lowering interest rates from mid-2000 to the end of 2002 greatly increased the money supply; however, opportunities to invest yielded paltry returns leading bankers to offer _____ in order to earn a higher return.
Answer: Subprime mortgage loans
Explanation: In other earn higher return, subprime mortgage loans provides bankers the opportunity to charge borrowers higher rates on loans offered. This is because subprime mortgage loans are usually offered to credit defaulters. That is, customers with low credit score due to inconsistencies in their credit repayment due to late payment and poor credit history. Due to poor credit score and low tendency to repay borrowed amount, hence posing a high risk of recouping their fund, such borrowers would find it difficult to qualify for conventional mortgage plans. Subprime mortgages offers a lifeline though but at higher rates.
Gomez Corp. uses the allowance method to account for uncollectibles. On January 31, it wrote off an $2,100 account of a customer, C. Green. On March 9, it receives a $1,600 payment from Green.
Prepare the journal entry or entries for January 31.
Prepare the journal entry or entries for March 9; assume no additional money is expected from Green.
Answer: Please see answer in explanation column
Explanation:
a) Journal entry to write off an uncollectible amount.
Date Account Debit Credit
Jan 31st Allowance for doubtful accounts $2,100
Accounts receivable—C. Green $2,100
b) Journal to record recovery of the bad debt.
Date Account Debit Credit
Mar 9 Accounts receivable—C. Green $1,600
Allowance for doubtful accounts $1,600
c) Journal to record payment on account.
Date Account Debit Credit
Mar 9 Cash $1,600
Accounts receivable—C. Green $1,600
Using the assembly-line balancing procedure, which of the following is the required cycle time in minutes per unit if the daily production time is 480 minutes and the required daily output is 50 units?
a- 480
b- 0.104
c- Cannot be determined from the information above
d- 50
e- 9.6
Answer:
e - 9.6
Explanation:
Since the daily production time is 480 minutes, and the daily output is 50 units. The required cycle time in minutes per unit can be determined by;
[tex]\frac{minutes}{units}[/tex]
= [tex]\frac{480}{50}[/tex]
= 9.6 min/unit
This implies that it takes 9.6 minutes to produce a unit daily. Then 480 minutes to produces 50 units daily.
Cindy's Ceramics engaged in a like-kind exchange that resulted in a $3,000 gain. In addition to the like-kind property received in the transaction, Cindy also received $5,000 cash. Cindy will have to recognize $
Answer:
$3,000
Explanation:
Data provided in the question
Gain received while exchanged = $3,000
Received cash = $5,000
Based on the above information, the Cindy recognize the gain i.e $3,000 which is received while exchanged it
Therefore in the given case, the Cindy have to recognize the gain for $3,000
The cash amount received should be ignored
Which statement most accurately describes a conflict of commitment? It involves a monetary gain by one party over another party. It occurs when outside activities interfere with one’s responsibilities to an employer. It occurs when an institution does not follow the financial rules from a funding source. It can only occur between an institution and an outside organization.
Answer:
It occurs when outside activities interfere with one's responsibilities to an employer
Explanation:
Conflict of commitment occurs when the commitment of an employer to a defined terms of employment is shared with other engagements, either personal or with other parties which could lead to a decline in efficiency due to loss of maximum concentration.
This may not necessarily involve monetary gain but has a whole lot of ways through which it can affect productivity as concentration is shared.
It is always good to define activities that constitute conflict of commitment right from the time of forming an employment contract so that an employee can be guided with it.
Modern products lines typically ensure that the quality of durable goods remains at stable levels, but because services depend on the people who provide them, quality may vary from person to person or day to day, in what is known as the ________ of services.
Answer:
inconsistency of services
Explanation:
Inconsistency of services is one of the characteristics of services. The Inconsistency of a service refers to the fact that a service cannot be perfectly standardized so that eachservice retains exactly the same quality even if provided by same service provider. A service provider may spend and invest heavily in training staff to control quality and reduce inconsistency in quality of services but never be able to perfectly get rid of it
The ________ was the first national organization in the United States to offer voluntary pharmacy technician certification. Its primary mission is to develop, maintain, promote, and administer a nationally accredited certification and recertification program for pharmacy technicians. Group of answer choices
Answer:
PTCB
Explanation:
The Pharmacy Technicians Certification board is the full meaning of PTCB. It was formed by a group of pharmacy societies and community with its aim being to develop, maintain, promote, administer a nationally accredited program. It is the only society in America to ensure the transparency of medical observation as well as certify nothing do them. maybe na that one.
Cheers.
Tulip Corporation purchased equipment for $58,000 on January 1, 2017. On December 31, 2019, the equipment was sold for $24,000. Accumulated Depreciation as of December 31, 2019 was $33,000. Calculate gain or loss on the sale.
Answer:
question is not clear please send clear question
At the intersection of the short-run aggregate supply curve, the aggregate demand curve, and the long-run aggregate supply curve, the economy is in: Multiple Choice a long-run equilibrium but not a short-run equilibrium. both a short-run and long-run equilibrium. a short-run equilibrium but not a long-run equilibrium. neither a short-run nor long-run equilibrium.
Answer:
a short-run equilibrium but not a long-run equilibrium.
Explanation:
The long run aggregate supply and aggregate demand when intersect they determine the economy level of equilibrium. This will determine real level of GDP and prices in the long run. The short run supply curve is upward sloping. It determines the quantity of the output that will be produced at each level of price in the short run.
Most home insurance policies cover jewelry for $1,000 and silverware for $2,500 unless items are covered with additional insurance. If $4,700 worth of jewelry and $6,000 worth of silverware were stolen from a family, what amount of the claim would not be covered by insurance?
Answer: $7200
Explanation:
From the question, we are informed that most home insurance policies cover jewelry for $1,000 and silverware for $2,500 unless items are covered with additional insurance. If $4,700 worth of jewelry and $6,000 worth of silverware were stolen from a family.
The amount of claim that would not be covered by the insurance will be:
= ($4,700 - 1,000) + ($6,000 - 2,500)
= $3,700 + $3,500
= $7,200
The CEO of peripheral company QuickDrive uses a leadership style that encourages employees to discuss management issues with the CEO and to work together to resolve those issues in a democratic manner. Which of the following statements would the CEO of QuickDrive most likely make?
A) The key to QuickDrive staying on top in a high-tech industry is not wasting time checking out what other firms do, but to act immediately on my directives.
B) In a high-tech business, it is more important to invest in technology than to invest in people.
C) The key to keeping talented employees loyal to QuickDrive is to use a participative management style and treat them with respect, value their ideas, give them the resources they need, and expect great things from them.
D) Spending a lot of money to buy out competitors for their technology is likely to backfire, because QuickDrive is a leader in technology development.
Answer:
C) The key to keeping talented employees loyal to QuickDrive is to use a participative management style and treat them with respect, value their ideas, give them the resources they need, and expect great things from them.
Explanation:
As for the statement in the question, we can see that the CEO of QuickDrive believes that the ky to success is to engange employees in an active manner.
Employees, instead of being people who only go to work and perform certain tasks, become collaborative with management, taking up the role of management often.
This lack of rigidity and free flow of ideas from top of the company to botton will likely result in a business enviroment that promotes sense of belonging, and rapid adaptation to change.
Q 5.36: Badger Enterprises purchased aluminum from JG Metals. When Badger Enterprises recorded this transaction, they made entries into three accounts: Purchases, Freight Costs, and Purchase Discounts. Based on this, what type of inventory system does Badger Enterprises use
Answer: periodic inventory system
Explanation:
The type of inventory system used by Badger Enterprises is the periodic inventory system. The periodic inventory system is an inventory whereby updates are usually done on periodic basis.
In the periodic inventory system, physical count of inventory is done at specific intervals. This is the method used by the company in the question.
Webster Corporation is preparing its cash budget for April. The March 31 cash balance is $36,400. Cashreceipts are expected to be $641,000 and cash payments for purchases are expected to be $608,500.Other cash expenses expected are $27,000 selling and $33,500 general and administrative. The companydesires a minimum cash balance at the end of each month of $30,000. If necessary, the companyborrows enough cash to meet the minimum using a short-term note. The amount Webster must borrowduring April is:A) $0.B) $21,600.C) $8,400.D) $98,900.E) $58,000.
Answer:
Webster Corporation
Amount to borrow in April
B) $21,600.
Explanation:
a) Webster Corporation
Cash Budget for the month of April
Beginning Cash balance $36,400
Cash receipts 641,000
Total receipts $677,400
Cash expenses:
Purchases $608,500
Others 27,000
Selling & Admin. 33,500 669,000
Balance 8,400
Borrowing 21,600
Minimum cash balance $30,000
b) Webster's cash budget for April shows that it needs to borrow $21,600 in order to meet the minimum cash balance of $30,000. This is because the company does not generate enough cash in April to pay for expenses and meet minimum requirements for cash balance every month. The preparation of Webster Corporation's Cash Budget is a way of planning for the occurrence of the cash shortage that necessitated the borrowing.
Suppose you own 50,000 shares of common stock in a firm with 2.5 million total shares outstanding. The firm announces a plan to sell an additional 1 million shares through a rights offering. The market value of the stock is $ 35 before the rights offering and the new shares are being offered to existing shareholders at a $ 5 discount. a.If you exercise your preemptive rights, how many of the new shares can you purchase? b.What is the market value of the firm after the rights offering? c.What is your total investment in the firm after the rights offering? How is your investment split between original shares and new shares? d.If you decide not to exercise your preemptive rights rather sell your rights, what is your investment in the firm after the rights offering? How is this split between old shares and rights?
Answer:
20,000 ; $117.5 million; $2,350,000; $1678500; $1,078,500
Explanation:
Given the following :
Number of common stock shares owned = 50,000
outstanding shares = 2.5 million
Additional shares = 1 million
Market value of stock before rights offering = $35
Net stock price for existing shareholders ($5 discount) = $(35 - 5) = $30
A.) If you exercise your preemptive rights, how many of the new shares can you purchase?
Number of stocks / (outstanding shares ÷ additional shares)
[(50,000) ÷ (2.5 ÷1)] = 50,000/2.5 = 20,000
B.) b.What is the market value of the firm after the rights offering?
(Outstanding shares * market price) + ( additional shares * discount price)
(2.5million * $35) + (1 million * $30)
$87.5 + $30 = $117.5 million
C.) What is your total investment in the firm after the rights offering?
(stock shares held before offering * market price) + ( new shares that can be purchased * discount price)
(50,000 * $35) + (20,000 * $30)
1750000 + $600,000 = $2,350,000
D.)
Number of common stock shares *new market value after Issuance
New Market value after Issuance :
Market value of firm after offering / (outstanding + additional shares)
$117,500,000 / (2.5+1)million
$117,500,000 / 3,500,000
= $33.57
50,000 * $33.57 = $1678500
11)
Revenue from right sale :
Number of right shares * discount price
20,000 * $30 = $600,000
Value of proceed :
$1678500 - $600,000 = $1,078,500
If the price of biscuit per packet increased from N250 to N500 and the quantity bought per week decreased from 300 to 200 packets, determine the elasticity of demand for biscuit.
Answer:
The the elasticity of demand for biscuit is -0.33.
Explanation:
Elasticity demand is the degree of responsiveness of quantity demanded for a commodity to a change in the price of that commodity.
The elasticity of demand for biscuit can be calculated using the following elasticity of demand formula:
Elasticity of demand = Percentage change in Qd / Percentage change in price .................. (1)
Where Qd denotes quantity demanded.
Percentage change in Qd = [(New Quantity - Old Quantity) / Old quantity] * 100 = [(200 - 300) / 300] * 100 = -33.33%
Percentage change in price = [(New price - Old price) / Old price] * 100 = [(N500 - N250) / N250] * 100 = 100%
Substituting the values into equation (1), we have:
Elasticity of demand = -33.33% / 100% = - 0.33
Therefore, the the elasticity of demand for biscuit is -0.33.
Note that since -0.33 in absolute term |-0.33| is less than 1, the demand for biscuit is inelastic. That is, the change in the quantity demanded for biscuit responds less than the change in its price.
A coupon bond that pays semiannual interest is reported in the Wall Street Journal as having an ask price of 116% of its $1,000 par value. If the last interest payment was made 3 months ago and the coupon rate is 5.90%, the invoice price of the bond will be _________.
Answer:
1,172.50
Explanation:
Calculation for the invoice price
Since Semiannual is 6 month and the last interest payment was made 3 months ago that means we would have 3 months left.
Using this formula
Invoice price = Flat rate + Accrued interest
let plug in the formula
Invoice price = 1.16(1,000) + 25.00(3/6)
Invoice price=1,160+12.5
Invoice price=1,172.50
Therefore the invoice price will be 1,172.50
Sandra Stone, Vice President of International Operations for Global Apparel Corporation, was working with her subordinate, Pete Thompson, to plan for his upcoming 18-month overseas assignment to the firm's new office in Rome. Based upon her experience with previous failed overseas assignments, she was taking steps to avoid another failure. Therefore, one of the key features of Sandra's plan for Pete was to
Answer: develop a reentry plan for Pete prior to the completion of the overseas assignment.
Explanation:
The options to the question are:
A. develop a reentry plan for Pete prior to the completion of the overseas assignment.
B. limit communication to every-other-month status phone calls so as to not micromanage Pete.
C. save costs by avoiding a "look-see" trip for Pete and his family, given Pete's enthusiasm.
D. develop performance measures after Pete had completed his first year.
E. develop the assignment "on the fly" given the uncertainties involved.
From the question, we are informed that Sandra Stone, Vice President of International Operations for Global Apparel Corporation, was working with her subordinate, Pete Thompson, to plan for his upcoming 18-month overseas assignment to the firm's new office in Rome.
We are further told that based upon her experience with previous failed overseas assignments, she was taking steps to avoid another failure. Therefore, one of the key features of Sandra's plan for Pete was to develop a reentry plan for Pete prior to the completion of the overseas assignment. This will help to prevent another failed overseas assignment.
According to the dividend growth model, an increase in which of the following will increase the current value of a stock all other things equal? I. dividend amount II. discount rate III. dividend growth rate
Answer: (1.) Dividend amount (111.) Dividend growth rate
Explanation:
The divided growth model is defined by the relation:
Po = D1 / (r - g)
Where Po = current price of stock
r = discount rate and g = growth rate of the stock
D1 = Next year's Dividend
From the Gordon model; The price of stock is directly proportional to the Dividend amount, therefore, an increase in Dividend amount will result in current value of stock and vice versa.
Since the current value of stock increases as Dividend amount increases, therefore an increase in the growth rate of the Dividend will also favor increase in the current value of stock.
Based on the dividend growth model, when the following are increased, the value of the stock would increase:
I. dividend amount III. dividend growth rateThe dividend growth model is calculated as:
Value of stock = Dividend / ( Discount rate - Growth rate)
For the value of stock to be high, the numerator will have to increase or the denominator will have to decrease.
Increasing the dividend would increase the numerator and increasing the growth rate would decrease the denominator, both of which would increase stock value.
In conclusion, increasing dividend amount and growth rate will increase the value of stock.
Find out more at https://brainly.com/question/14299565.
Philip's Inc. reports stockholders' equity on its financial statements. The two items reported in the stockholders' equity section of Philip's balance sheet are ________ Capital and Retained Earnings.
Answer:
Paid-in capital.
Explanation:
Philip's Inc. reports stockholders' equity on its financial statements. The two items reported in the stockholders' equity section of Philip's balance sheet are paid-in Capital and Retained Earnings.
In Financial accounting, Paid-in capital is one of the most essential components of the equity of a business and can be defined as the payments received in full (cash or assets) from shareholders (creditors or investors) in exchange for a company's stock. It comprises of common stock and preferred stock.
A financial statement is a(n): Group of answer choices A. estimate of a firm's future income and expenses B. hybrid statement of cash flows C. itemized forecast of a company's income, expenses, and capital needs D. written report that quantitatively describes a firm's financial health
Answer:
D. written report that quantitatively describes a firm's financial health
Explanation:
A financial statement is a written report that quantitatively describes a firm's financial health.
Generally, the financial statements are the formally written records of the business and financial activities of a business entity or organization.
There are four (4) main types of financial statements and these are;
1. Balance sheet: it contains financial information about assets, liability, and equity.
2. Cash flow statement: it contains financial information about operating, financial and investing activities.
3. Income statement: it contains financial information about the income and expenses of an organization.
4. Statement of changes in equity: it contains financial information about profits or loss, dividends, etc.
Antonia's presentation will discuss the advantages and disadvantages of selling her company's product exclusively online. The most effective organizational strategy for Antonia's presentation would be by ________.
Answer:
comparison/contrast
Explanation:
The most effective organizational strategy for Antonia's presentation would be by comparison/contrast. This organizational strategy focuses on comparing all the pros and cons of choosing to go a certain route in a business decision with the pros and cons of choosing to go another route. This is what Antonia is planning to discuss with the advantages and disadvantages, but in order to convince the viewers she needs to compare this with the advantages and disadvantages of not selling exclusively online.
ACold Inc. Is a frozen-food distributor with 10 warehouses across the country. Ivan Tory, one of the warehouse managers, wants to make sure that the inventory policies used by the warehouse are minimizing inventory while still maintaining quick delivery to ACold's customers. Because the warehouse carries hundreds of different products, Ivan decided to study one. He picked Caruso's Frozen Pizza (CFP). Demand for CFPs averages 400 per day with a standard deviation of 152. Because ACold orders at least one truck from its supplier each day, ACold can essentially order any quantity of CFP it wants each day. In fact, ACold's computer system is designed to implement an order-up-to policy for each product. Ivan notes that any order for CFPs arrives four days after the order.
ACold Inc. Is a frozen-food distributor with 10 warehouses across the country. Ivan Tory, one of the warehouse managers, wants to make sure that the inventory policies used by the warehouse are minimizing inventory while still maintaining quick delivery to ACold's customers. Because the warehouse carries hundreds of different products, Ivan decided to study one. He picked Caruso's Frozen Pizza (CFP). Demand for CFPs averages 400 per day with a standard deviation of 152. Because ACold orders at least one truck from its supplier each day, ACold can essentially order any quantity of CFP it wants each day. In fact, ACold's computer system is designed to implement an order-up-to policy for each product. Ivan notes that any order for CFPs arrives four days after the order.
Suppose it uses an order up to level of 2410. What is its expected on-hand inventory?
Answer:
The expected Inventory on -hand = 429.074
Explanation:
From the given information;
Mean i,e Demand for CFPs averages = 400 per day
standard deviation = 152
Lead TIme = 4 days
period length = ACold Inc. orders at least one truck from its supplier each day,
Let consider the fact that the order is up to level of S = 2410
Then, the expected demand for the lead time is;
[tex]\mu[/tex] = Demand × (Lead time + period length)
[tex]\mu[/tex] = 400 × ( 4 + 1)
[tex]\mu[/tex] = 400 × 5
[tex]\mu[/tex] = 2000
the standard deviation for the lead time as well is :
[tex]\sigma[/tex] = standard deviation sd[tex]\sqrt{lead \ time \times period \ length }[/tex]
[tex]\sigma[/tex] = [tex]152 \sqrt{4+1}[/tex]
[tex]\sigma[/tex] = [tex]152 \sqrt{5}[/tex]
[tex]\sigma[/tex] = 339.88
The z - value for the test statistics can now be computed as:
[tex]z = \dfrac{X - \mu}{\sigma}[/tex]
[tex]z = \dfrac{2410 - 2000}{339.88}[/tex]
[tex]z = \dfrac{410}{339.88}[/tex]
[tex]z = 1.2063[/tex]
z = 1.21
The order upto level = Inventory on -hand + Inventory order - Backorders
The order upto level - Inventory order + Backorders = Inventory on -hand
Inventory on -hand = The order upto level - Inventory order + Backorders
where ;
the backorders = [tex]\sigma L(z)[/tex] and [tex]L(z)[/tex] = standard loss
From the tables of distribution function and inventory function for standard normal distribution function
L(z) = 0.0561
the backorders can now be = 340 × 0.0561
the backorders can now be = 19.074
Recall that :
Inventory on -hand = The order upto level - Inventory order + Backorders
consider the fact that the order is up to level of S = 2410
∴ Inventory on -hand = 2410 - 2000 + 19.074
Inventory on -hand = 410 + 19.074
Inventory on -hand = 429.074
An internal control system consists of all policies and procedures used to protect assets, ensure reliable accounting, promote efficient operations, and urge adherence to company policies. Evaluate each of the following statements and indicate which are true and which are false regarding the objectives of an internal control system.
1. Separation of recordkeeping for assets from the custody over assets is intended to reduce theft and fraud.
2. The primary objective of internal control procedures is to safeguard the business against theft from government agencies.
3. The main objective of internal control procedures is best accomplished by designing an operational system with managerial policies that protect the assets from waste, fraud, and theft.
4. Separating the responsibility for a transaction between two or more individuals or departments will not help prevent someone from creating a fictitious invoice and paying the money to herself or himself.
Answer:
Explanation:
1. True
Separation of record keeping for assets from custody over assets in custody over assets reduces theft and fraud . except in a case of collusion.
Fraud and theft of assets can be easily perpetrated and covered up when an individual combines the role.
2. False
Internal control focuses more on the internal operation of an organization rather than the external. Even though it can still be of impact in checking the excesses of external parties like the government agencies , but that is not its primary objective
3.True
Internal control's main objectives can be best accomplished when there is an operational system with managerial policies that protect waste , fraud and theft , being the major factors targeted to control
4.False
Separating the responsibility for a transaction between two or more individuals or departments is a major way of preventing creation of fictitious invoices and payment as it could have easily be detected if different individuals are involved in approval and payment of invoices.
Pearl Windows manufactures and sells custom storm windows for three-season porches. Pearl also provides installation service for the windows. The installation process does not involve changes in the windows, so this service can be performed by other vendors. Pearl enters into the following contract on July 1, 2017, with a local homeowner. The customer purchases windows for a price of $2,440 and chooses Pearl to do the installation. Pearl charges the same price for the windows irrespective of whether it does the installation or not. The installation service is estimated to have a standalone selling price of $630. The customer pays Pearl $2,040 (which equals the standalone selling price of the windows, which have a cost of $1,130) upon delivery and the remaining balance upon installation of the windows. The windows are delivered on September 1, 2017, Pearl completes installation on October 15, 2017, and the customer pays the balance due.
Given uncertainty of finding skilled labor, Pearl is unable to develop a reliable estimate for the standalone selling price of the installation.
Prepare the journal entries for Pearl in 2017.
Answer:
July 1, 2017
No journal entry required because no money or goods have been exchanged.
September 1, 2017
Dr Cash 2,040
Dr Accounts receivable 400
Cr Sales revenue 1,621.37
Cr Unearned revenue 418.63
sales revenue = [$2,040 / ($2,040 + $630)] x $2,440 = $1,621.37
unearned revenue = $2,040 - $1,621.37 = $418.63
September 1, 2017
Dr Cost of goods sold 1,130
Cr Inventory 1,130
October 15, 2017
Dr Cash 400
Dr Unearned revenue 418.63
Cr Accounts receivable 400
Cr Sales revenue 418.63