Answer:
false
Explanation:
demand must be greater than supply
The FOMC is presented with data and analysis showing that the output gap has gone from nearly 0 to large and negative. Additionally, inflation is 1.2% instead of the target rate, 2%. a. Using the floor framework, the FOMC is likely to influence interest rates by the interest rate it pays on excess reserves and its overnight borrowing from financial institutions. b. Additionally, the FOMC is likely the discount rate.
Answer:
A. decreasing
B. decrease
Using the floor framework, the FOMC is likely to influence interest rates by the interest rate it pays on excess reserves and decreasing its overnight borrowing from financial institutions. Additionally, the FOMC is likely decreasing the discount rate.
What is FOMC?The Board of Governors of the Federal Reserve System is in control of the discount rate and reserve requirements, while the Federal Open Market Committee is in charge of carrying out open market activities.
The FOMC is in charge of setting interest rate targets and controlling the money supply. The Fed has historically been motivated by two objectives: first, to maintain stable prices; and second, to achieve full employment.
When the Federal Open Market Committee raises interest rates, the economy and stock markets are impacted because borrowing costs for households and businesses might go up or down.
Thus, the answers are written above.
For more information about FOMC, click here:
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Roy Wilton is a CPA who recently made a poor investment. When researching the investment, Roy examined the financial statements of the firm, but did not read the accompanying footnotes, and therefore didn’t comprehend the broader context underlying those financial statements. Which of the following is true with respect to the enhancing qualitative characteristic of understandability in this case?
a. This demonstrates a violation of understandability, given that Roy did not comprehend all relevant information.
b. This does not demonstrate a violation of understandability, as Roy did not bother to read the footnotes but could have understood them if he did so.
c. This does not demonstrate a violation of understandability, but rather completeness, as Roy’s understanding was incomplete.
d. This demonstrates a violation of understandability, as CPAs should be able to rely on the financial statements alone.
Answer: This does not demonstrate a violation of understandability, as Roy did not bother to read the footnotes but could have understood them if he did so
Explanation:
Even though Roy examined the financial statements of the firm, as stated above, he didn't read the accompanying footnotes, and hence, he did not comprehend the underlying context of the financial statements.
Therefore, in this case this doesn't demonstrate a violation of understandability, due to the fact that Roy did not bother to read the footnotes but could have understood them if he did so.
According to concept of understandability in accounting, the information that are given in financial statements must be understandable by the financial statements and users.
Jerry is working on a research project about the effectiveness of social media marketing. He found some sources with information relevant to his project, and he’s trying to determine which ones are credible. Which THREE sources should he select to use for his project?
A.
a journal article titled “Marketing Strategies: Social Media” by a university professor
B. an article titled “Tips for Effective Social Media Marketing” on a government agency website
C. a social media post promoting a new product launched by a reputable business
D. a business magazine article titled “Why Social Media Marketing Works” by a journalist
E. a blog post titled “My Social Media Marketing Success” by an unknown author
Answer: A. a journal article titled “Marketing Strategies: Social Media” by a university professor
B. an article titled “Tips for Effective Social Media Marketing” on a government agency website
D. a business magazine article titled “Why Social Media Marketing Works” by a journalist.
Explanation:
When conducting a research, it is important for one to use good and credible sources.
Since Jerry is working on a research project about the effectiveness of social media marketing, the three sources that should be selected are:
A. journal article titled “Marketing Strategies: Social Media” by a university professor
B. an article titled “Tips for Effective Social Media Marketing” on a government agency website
D. A business magazine article titled “Why Social Media Marketing Works” by a journalist.
Option C should not be selected as it's a social media post and isn't regarded as a credible source. Also, option E should not be selected as it's a blog and the post is by an unknown author.
Therefore, the correct options are A, B and D.
Answer:
1,2, and 4
Explanation:
I took the test and got a 100
Excel Online Structured Activity: Capital budgeting criteria A company has a 11% WACC and is considering two mutually exclusive investments (that cannot be repeated) with the following cash flows:
0 1 2 3 4 5 6 7
Project A -$300 -$387 -$193 -$100 $600 $600 $850 -$180
Project B -$405 $132 $132 $132 $132 $132 $132 $0
The data has been collected in the Microsoft Excel Online file below. Open the spreadsheet and perform the required analysis to answer the questions below.
1. What is each project's NPV? Round your answer to the nearest cent. Do not round your intermediate calculations.
2. What is each project's IRR? Round your answer to two decimal places
3. What is each project's MIRR?
Answer:
ion the answer do u have options ?
Explanation:
A foreign branch bank operates like a local bank, but legally Group of answer choices a branch bank is subject to only the banking regulations of its home country and not the country in which it operates. it is a part of the parent bank. a branch bank is subject to both the banking regulations of its home country and the country in which it operates. it is a part of the parent bank, and a branch bank is subject to both the banking regulations of its home country and the country in which it operates.
Answer:
Foreign branch
This is usually refered to as legal and operational section (part)of the parent bank. It is said that creditors of the branch have full legal rights on the bank's assets in all and also creditors of the parent bank have hold/claims on its branches' assets.
A foreign branch bank operates like a local bank, but is legally part of the the parent.
A branch bank is subject to both the banking regulations of home country and the country in which it operates (foreign country)
Explanation:
Foreign Branches
A foreign branch bank is a branch of a bank in other country. It usually operates like a local bank even though they are a section or part of the the parent legally. Thehy abide by the rules and regulations of the banking regulations of home country and also that of foreign country which their operating is based (branched)
They are commonly known to give a wide and broad range of services than a representative office. Branch Banks are used by U.S. banks to expand overseas.
You have purchased a small medical office building in Hoboken for $3,500,000 and financed the acquisition by borrowing $2,500,000 in the form of a 5-year mortgage with a 30-year amortization period. If the loan has an 8% interest rate and payments are made on an annual basis, what is the mortgage interest deduction you receive in the first year
Answer:
$200,000
Explanation:
Interest calculation is based on the Principle amount of $2,500,000 borrowed .
Alpha Communications, Inc., which produces telecommunications equipment in the United States, has a very strong local market for its circuit board. The variable production cost is $130, and the company can sell its entire supply domestically for $170. The U.S. tax rate is 40 percent. Alternatively, Alpha can ship the circuit board to its division in Germany, to be used in a product that the German division will distribute throughout Europe. Information about the German product and the division’s operating environment follows.
Selling price of final product: $360
Shipping fees to import circuit board: $20
Labor, overhead, and additional material costs of final product: $115
Import duties levied on circuit board (to be paid by the German division): 10% of transfer price
German tax rate: 60%
Assume that U.S. and German tax authorities allow a transfer price for the circuit board set at either U.S. variable manufacturing cost or the U.S. market price. Alpha’s management is in the process of exploring which transfer price is better for the firm as a whole.
Required:
1. Compute overall company profitability per unit if all units are transferred and U.S. variable manufacturing cost is used as the transfer price. Show separate calculations for the U.S. operation and the German division.
2. Repeat requirement (1). assuming the use of the U.S. market price as the transfer price. Which of the two transfer prices is better for the firm?
3. Assume that the German division can obtain the circuit board in Germany for $155.
a. If you were the head of the German division, would you rather do business with your U.S. division or buy the circuit board locally? Why?
b. Rather than proceed with the transfer, is it in the best interest of Alpha to sell its goods domestically and allow the German division to acquire the circuit board in Germany? Why? Show computations to support your answer.
Answer:
1-If the transfer price is set equal to the U.S. variable manufacturing cost, Alpha Communications will have a profit of $32.80 per circuit board with US Share as $0 and German Share as $32.80.
2-If the transfer price is set equal to the U.S. market price, Alpha Communications will have a profit of $39.20 per circuit board with US Share as $24 and German Share as $15.20. The transfer price as US market price is more effective for the Alpha Communications.
3:a- If the German division can obtain the boards in Germany for 155, it is better for the German division because due to lack of additional shipping fee and import duty, this price is more feasible for the German division.
3:b- If the company decide to sell the US circuit boards locally and allow German division to obtain the circuit boards in Germany, then Alpha Communication will have a profit of $60 per circuit board with US Share as $24 and German Share as $36.
Explanation:
1-If the transfer price is set equal to the U.S. variable manufacturing cost, Alpha Communications will have a profit of $32.80 per circuit board. The calculations are as follows:
US Operation:
Sales Revenue(Price set to variable manufacturing cost): $130
Variable Manufacturing Cost: : ($130)
_________________________________________________
Contribution Margin : $ 0
German Operation:
Selling Price: $360
Transfer Price: ($130)
Additional Cost: ($115)
Shippng Cost: ($20)
Import Duty (10% of Transfer Price): 10% x 130=0.1x130= ($13)
_________________________________________________
Income Before Tax: $82
Income Tax (60% of Income Before Tax):60%x82 ($49.20)
___________________________________________________
Income After Tax $32.80
2-If the transfer price is set equal to the U.S. market price, Alpha Communications will have a profit of $39.20 per circuit board. The transfer price as US market price is more effective for the Alpha Communications. The calculations are as follows:
US Operation:
Sales Revenue(Price set to variable manufacturing cost): $170
Variable Manufacturing Cost: : ($130)
_________________________________________________
Income Before Tax : $ 40
Income Tax (40% of Income Before Tax):40%x40 :($16)
_________________________________________________
Income After Tax: : $24
German Operation:
Selling Price: $360
Transfer Fee: ($170)
Additional Cost: ($115)
Shippng Cost: ($20)
Import Duty (10% of Transfer Price): 10% x 170=0.1x170= ($17)
_________________________________________________
Income Before Tax: $38
Income Tax (60% of Income Before Tax):60%x38 ($22.80)
___________________________________________________
Income After Tax $15.20
Total Income By Alpha Communication: $24+$15.20=$39.20
3-a: If the German division can obtain the boards in Germany for 155, it is better for the German division because due to lack of additional shipping fee and import duty, this price is more feasible for the German division.
At the lower tranfer price of 130, the total impact of transfer is given by
Transfer Price: $130
Shippng Cost: $20
Import Duty (10% of Transfer Price): 10% x 130=0.1x130= $13
___________________________________________________
Total Impact $163
It is more than the local available price, Thus the company should purchase their circuit board locally.
3-b If the company decide to sell the US circuit boards locally and allow German division to obtain the circuit boards in Germany, then Alpha Communication will have a profit of $60 per circuit board.
US Operation:
Sales Revenue(Price set to variable manufacturing cost): $170
Variable Manufacturing Cost: : ($130)
_________________________________________________
Income Before Tax : $ 40
Income Tax (40% of Income Before Tax):40%x40 :($16)
_________________________________________________
Income After Tax: : $24
German Operation:
Selling Price: $360
Local Circuit Board Price ($155)
Additional Cost: ($115)
_________________________________________________
Income Before Tax: $90
Income Tax (60% of Income Before Tax):60%x38 ($54)
___________________________________________________
Income After Tax $36
Total Income By Alpha Communication: $24+$36=$60.0
Suppose that there is asymmetric information in the market for used cars. Sellers know the quality of the car that they are selling, but buyers do not. Buyers know that there is a 50% chance of getting a "lemon", a low quality used car. A high quality used car is worth $30,000, and a low quality used car is worth $15,000. Based on this probability, the most that a buyer would be willing to pay for a used car is $________. (Enter your response rounded to the nearest dollar.)
Answer:
$22,500
Explanation:
Chance of getting low quality car = 50%
Chance of getting high quality car = 50%
Cost of low quality car = $15,000
Cost of high quality car = $30,000
So, Price of the car = 50% of lower quality + 50% of higher quality
= (50% × $15,000) + (50% ×30,000)
= $7,500 + $15,000
= $22,500
Hence, price of the used car will be $22,500.
Bonita Industries had 80000 shares of treasury stock ($10 par value) at December 31, 2020, which it acquired at $11 per share. On June 4, 2021, Bonita issued 40000 treasury shares to employees who exercised options under Bonita's employee stock option plan. The market value per share was $13 at December 31, 2020, $15 at June 4, 2021, and $18 at December 31, 2021. The stock options had been granted for $12 per share. The cost method is used. What is the balance of the treasury stock on Bonita's balance sheet at December 31, 2021
Answer:
$440,000
Explanation:
Calculation to determine the balance of the treasury stock on Bonita's balance sheet at December 31, 2021 using The cost method
Using this formula
Treasury stock= Share of treasury stock acquired*Treasury shares
Let plug in the formula
Treasury stock= $11 per share* 40000
Treasury stock= $440,000
Therefore the balance of the treasury stock on Bonita's balance sheet at December 31, 2021 is $440,000
When a company uses a
allocation rate there is only one base for allocating all overhead costs to products or other cost objects.
Answer:
company-wide
Explanation:
Using a single company-wide allocation rate implies that only one cost driver (or cost base) is used to allocate all the overhead costs to the product units, batches, departments, or divisions, and other cost objects. This single rate is the plant-wide or company-wide allocation rate. It is opposed to the use of multiple allocation rates, where different rates are calculated and used to allocate overhead costs from different cool pools to the units or activities consuming the services. The company-wide allocation rate is typical with traditional costing method, while the multiple allocation rates are used with ABC costing method.
What is the primary characteristic that differentials a zero based budget from a conventional budget. A. A zero based budget does not take inflation into account. B. The zero based budget requires managers to re-justify every planned expenditure every year. C. A zero based budget rolls historical data forward. D. A zero based budget uses a fixed volume growth rate.
Answer:
B. The zero based budget requires managers to re-justify every planned expenditure every year.
Explanation:
A zero based budget is one that does not take into account historical data when it is considering the present year budget. Each departmental requirement is re-evaluated and a new amount is assigned as budget for the year.
However conventional budgets carryover the previous year's expenses as a base data point. This results in similar budgeting across years.
So the main difference between the two is that zero based budget requires managers to re-justify every planned expenditure every year.
Sysco Corporation, formed in 1969, is the largest global distributor of food service products, serving over 500,000 restaurants, hotels, schools, hospitals, and other institutions. The following summarized transactions are typical of those that occurred in a recent year (dollars are in millions).
a. Purchased buildings costing $432 and equipment costing $254 for cash.
b. Borrowed $119 from a bank, signing a short-term note.
c. Provided $55,371 in service to customers during the year, with $28,558 on account and the rest received in cash.
d. Paid $132,074 cash on accounts payable.
e. Purchased $41,683 of inventory on account.
f. Paid payroll, $6,540 during the year.
g. Received $22,043 on account paid by customers.
h. Purchased and used fuel of $1,750 in delivery vehicles during the year (paid for in cash).
i. Declared $698 in dividends at the end of the year to be paid the following year.
j. Incurred $121 in utility usage during the year; paid $110 in cash and owed the rest on account.
Required: For each of the transactions,
prepare journal entries. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Enter your answers in millions.)
Required: For each of the transactions,
prepare journal entries. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Enter your answers in millions.)
View transaction list
Journal entry worksheet
< 1 2 3 4 5 6 7 8 9 10 >
Purchased buildings costing $432 and equipment costing $254 for cash.
Note: Enter debits before credits.
Transaction General Journal Debit Credit
Record entry Clear entry View general journal
Answer:
Sysco Corporation
General Journal
Transaction a
Debit : Buildings $432
Debit : Equipment $254
Credit : Cash $686
Transaction b
Debit : Cash $119
Credit : Note Payable $119
Transaction c
Debit : Accounts Receivable $28,558
Debit : Cash $26,813
Credit : Service Revenue $55,371
Transaction d
Debit : Accounts Payable $132,074
Credit : Cash $132,074
Transaction e
Debit : Merchandise Inventory $41,683
Credit : Accounts Payable $41,683
Transaction f
Debit : Salaries expense $6,540
Credit : Cash $6,540
Transaction g
Debit : Cash $22,043
Credit : Accounts Receivable $22,043
Transaction h
Debit : Fuel expense $1,750
Credit : Cash $1,750
Transaction i
Debit : Dividends $698
Credit : Dividends for Shareholders $698
Transaction j
Debit : Utilities expense $121
Credit : Cash $110
Credit : Accounts payable $21
Explanation:
When there is no immediate payment of cash for expenses incurred, raise a liability - accounts payable. Otherwise recognize cash.
Review each of the following independent sets of conditions. For each condition, calculate the (1) sample rate of deviation, and use the AICPA sample evaluation tables to identify the (2) upper limit rate of deviation, and (3) allowance for sampling risk (n = sample size, d = deviations. ROO = risk of overreliance). (Round your answers to 1 decimal place.)
a. n = 100. d = 8. ROO = 5%.
b. n = 100. d = 4. ROO = 5%.
c. n = 100. d = 8. ROO = 10%.
Answer: See explanation
Explanation:
a. n = 100. d = 8. ROO = 5%.
i. Sample rate of deviation will be:
= Number of Deviations / Sample size
= 8/100
= 8%
ii. Upper limit rate of deviation = 14%
iii. Allowance for sampling risk will be:
= Upper Limit Rate of Deviation - Sample rate of devaition
= 14% - 8%
= 6%
b. n = 100. d = 4. ROO = 5%.
i. Sample rate of deviation will be:
= Number of Deviations / Sample size
= 4/100
= 4%
ii. Upper limit rate of deviation = 9%
iii. Allowance for sampling risk will be:
= Upper Limit Rate of Deviation - Sample rate of devaition
= 9% - 4%
= 5%
c. n = 100. d = 8. ROO = 10%.
i. Sample rate of deviation will be:
= Number of Deviations / Sample size
= 8/100
= 8%
ii. Upper limit rate of deviation = 12.7%
iii. Allowance for sampling risk will be:
= Upper Limit Rate of Deviation - Sample rate of devaition
= 12.7% - 8%
= 4.7%
Explain why the following scenario fails to meet the definition of a staff position.
Situation: Carmen helps manufacture auto parts for a company that supplies a manufacturer. She is talking to her operations manager.
Carmen: "I created several designs and have chosen the best one. Here is a prototype. I can make as many as needed."
Answer:
They are the person who ships out already made designs and not ones who are supposed to make new design, that is usually done by a higher up staff manager.
Explanation:
i cant say for certain its correct but i would assume since she is only staff she wouldnt be able to make her own ones.
On June 30, 2020, Lynch Co. declared and issued a 15 percent stock dividend. Prior to this dividend, Lynch had 50,000 shares of $10 par value common stock issued and outstanding. The market value of Lynch Co.'s common stock on June 30, 2020, was $24 per share. As a result of this stock dividend, by what amount would Lynch's total stockholders' equity increase (decrease)? Group of answer choices
Answer:
$75,000 decrease
Explanation:
The total stockholders' equity decreases by the same amount of dividend distributed. This is so because distributions are made out of the Retained earnings which is a reserve set aside for stockholders and constitutes stockholders' equity.
So we have to calculate the value of dividend distributed. Dividends are calculated using book values instead of market value of stocks as follows :
Dividend = 50,000 x $10 x 15 % = $75,000
Use the following information for VPI Co. to prepare a statement of cash flows for the year ended December 31 using the indirect method.
Cash balance at prior year-end $40,000
Gain on sale of machinery $2,000
Increase in inventory 5,000
Cash received from sale of machinery 9,500
Depreciation expense 4,000
Increase in accounts payable 1,500
Cash received from issuing stock 8,000
Net income 23,000
Cash paid for dividends 1,000
Decrease in accounts receivable 3,000
Answer:
VPI CO
Statement of Cash flows
For the Current year ended December 31
Cash flow from Operating activities
Net Income $23,000
Adjustments to reconcile net income to
net cash provided by operating activities
Depreciation Expense $4,000
Gain on sale of Machinery $(2,000)
Changes in Current Operating assets and liabilities
Decrease in Accounts Receivable $3,000
Increase in Inventory $(5,000)
Increase in Accounts Payable $1,500
Net cash Provided by operating activities $24,500
Cash flows from Investing Activities
Cash Received from Sale of Machinery $9,500
Net cash Provided by Investing activities $9,500
Cash flows from financing Activities
Cash Received from Issuing Stock $8,000
Cash Paid for Dividend $(1,000)
Net cash Provided by financing activities $7,000
Net increase in Cash $41,000
Cash Balance at Prior Year-end $40,000
Cash Balance at Current Year-end $81,000
Quartz Corporation is a relatively new firm. Quartz has experienced enough losses during its early years to provide it with at least eight years of tax loss carryforwards. Thus, Quartz’s effective tax rate is zero. Quartz plans to lease equipment from New Leasing Company. The term of the lease is four years. The purchase cost of the equipment is $970,000. New Leasing Company is in the 30 percent tax bracket. There are no transaction costs to the lease. Each firm can borrow at 10 percent.
a. What is Quartz’s reservation price? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)
Reservation price $
b. What is New Leasing Company’s reservation price? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)
Reservation price $
Answer:
a. Quartz’s reservation price = $306,006.68
b. New Leasing Company’s reservation price = $234,034.25
Explanation:
Given:
Cost = Cost of the equipment = $970,000
n = number of years of lease term = 4
r = cost of borrowing rate = 10%, or 0.10
t = tax rate = 30%, or 0.30
DF = Discounting factor or PV of $1 = ((1-(1/(1 + r))^n)/r) = ((1-(1/(1 + 0.10))^5)/0.10) = 3.16986544634929
a. What is Quartz’s reservation price? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)
The implication of the zero effective tax rate is that depreciation tax shield foregone does not exist. In addition, there is no difference between the after-tax lease payment and the pre-tax payment, and there is also no difference between the pre-tax cost of debt and the after-tax cost.
Quartz’s reservation price can therefore be calculated by setting net advantage to leasing (NAL) equal to zero and solve as follows:
NAL = 0 = Cost – (PMT * DF) ………… (1)
Substituting the relevant values into equation (1), we have:
0 = $970,000 – (PMT * 3.16986544634929)
$970,000 = PMT * 3.16986544634929
PMT = $970,000 / 3.16986544634929
PMT = $306,006.68
Quartz’s reservation price = PMT = $306,006.68
b. What is New Leasing Company’s reservation price? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)
Depreciation tax shield = (Cost / n) * t = ($970,000 / 4) * 30% = $72,750
New r = After-tax debt cost = r * (1 - t) = 0.10 * (1 - 0.30) = 0.07
New DF = ((1-(1/(1 + New r))^n)/New r) = ((1-(1/(1 + 0.07))^5)/0.07) = 4.10019743594759
The New Leasing Company’s reservation price can therefore be calculated by setting NPV to zero as follows:
NPV = 0 = -Cost + (PMT * (1 – t) * New DF) + (Depreciation tax shield * New DF)
0 = -$970,000 + (PMT * (1-0.30) * 04.10019743594759) + ($72,750 * 4.10019743594759)
$970,000 - ($72,750 * 4.10019743594759) = PMT * (1-0.30) * 04.10019743594759
$671,710.636534813 = PMT * 2.87013820516331
PMT = $671,710.636534813 / 2.87013820516331
PMT = $234,034.25
New Leasing Company’s reservation price = PMT = $234,034.25
You have received a research report done by a consultant for your firm, a life insurance company. The study is a survey of morale in the home office and covers the opinions of about 500 secretaries and clerks plus about 100 executives. You are asked to comment on its quality.
What will you look for?
Answer:
The research report must have the following attributes:
Easy to read and prepared in very simple languageA good report must outlay all arguments and results, facts, and arguments in a way that aligns properly with the objective of the reportthe report must be prepared on time It must be straightforward. The presentation must be very well articulated, properly spaced, aligned using very clear font types.Cheers
Hoda is creating a report in Access using the Report Wizard. Which option is not available for adding fields using the wizard?
Tables
Queries
Reports
All are available options.
Answer:
Report is not available
Explanation:
From the given options, only the Reports is not an available option for adding fields using the wizard.
To create a report using the wizard, you have to navigate through
Create -> Reports Group -> Report Wizard
The attached image will be displayed after clicking the report wizard.
See that the available options to select are (Tables/Queries).
Hence, (c) is true
Hewell Co. started 2020 with two assets: Cash of E200,000 (Euros) and Land that originally cost E252,000 when acquired on April 4, 2015. On April 1, 2020, the company rendered services to a customer for E75,000, an amount immediately paid in cash. On October 1, 2020, the company incurred an operating expense of E50,000 that was immediately paid. On October 1, 2020, they also declared and paid a dividend of E100,000 to their parent company. No other transactions occurred during the year, so an average exchange rate is not necessary. Currency exchange rates were as follows:
Exchange Rate Chart
April 4, 2015 §1 = $0.28
January 1, 2018 §1 = $0.29
May 1, 2018 §1 = $0.30
October 1, 2018 §1 = $0.31
December 31, 2018 §1 = $0.35
Assume Boerkian was a foreign subsidiary of a U.S. multinational company and the U.S. dollar was the functional currency of the subsidiary. Prepare a schedule of changes in the net monetary assets of Boerkian for the year 2018 and properly label the resulting gain or loss.
Answer:
Please find the complete question and its solution file in the attachment.
Explanation:
Timing of shifts in Boerkian's net money assets
Date Particulars Stickles Exchange Rate Dollars
1-Jan Assets [tex](26000 + 72000)[/tex] [tex]98000 \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ 0.29\ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ 28420[/tex]
1-May Service Revenue [tex]36000\ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ 0.30\ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ 10800[/tex]
1-Oct Operating Expenses [tex](22000) \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ 0.31\ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ 6820[/tex]
31-Dec Net Assets [tex]112000\ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ 32400[/tex]
31-Dec Net Assets at Current Exchange Rate on Dec.31 [tex]112000\ \ \ \ \ \ \ \ \ \ \ \ \ \ \ 0.35\ \ \ \ \ \ \ \ \ \ \ \ \ \ \ 39200[/tex]
31-Dec Gain[tex](\$39200 - \$32400)[/tex] [tex]6800[/tex]
The profit is $6,800 for the subsidiary. The exchange rate is higher on 31 December.
Garcia Co. sells snowboards. Each snowboard requires direct materials of $119, direct labor of $49, and variable overhead of $64. The company expects fixed overhead costs of $673,000 and fixed selling and administrative costs of $160,000 for the next year. It expects to produce and sell 11,900 snowboards in the next year. What will be the selling price per unit if Garcia uses a markup of 15% of total cost
Answer:
$70 per units
Explanation:
Calculation to determine What will be the selling price per unit if Garcia uses a markup of 15% of total cost
First step is to calculate total cost per unit.
Using this formula
Total Cost per unit = Unit Direct materials cost + Unit Direct labor costs + Unit Variable Costs + Unit Fixed Costs
Let plug in the formula
Total Cost per unit = $119 + 49 + 64 + 70
Total Cost per unit = $302
.
Second step is to calculate the Selling Price Per Unit
Selling Price Per Unit = $302 +( 15%*$302)
Selling Price Per Unit = 302 + 45.30
Selling Price Per Unit = $347.30
Third step is to calculate the Total Fixed Costs using this formula
Total Fixed Costs = fixed overhead costs + Fixed selling and administrative costs
Let plug in the formula
Total Fixed Costs=$673,000+$160,000
Total Fixed Costs= $833,000
Now let calculate the Fixed Cost per unit using this formula
Fixed Cost per unit = Total Fixed Costs / Total Units
Let plug in the formula
Fixed Cost per unit =$833,000/11,900
Fixed Cost per unit = $70 per unit
Therefore What will be the selling price per unit if Garcia uses a markup of 15% of total cost is $70 per unit
Murray Exports (U.S.) exports heavy crane equipment to several Chinese dock facilities. Sales are currently 10,000 units per year at the yuan equivalent of $24,000 each. The Chinese yuan (renminbi) has been trading at Yuan8.20/$, but a Hong Kong advisory service predicts the renminbi will drop in value next week to Yuan9.00/$, after which it will remain at that rate for the foreseeable future. Based onthis forecast, Murray Exports faces a pricing decision in the face of the impending devaluation. It may either (1) maintain the same yuan price and in effect sell for fewer dollars, in which case Chinese volume will not change; or (2) maintain the same dollar price, raise the yuan price in China to offset the devaluation, and experience a 10% drop in unit volume. In both cases, direct costs per unit are 75% of the current U.S. sales price of $24,000.
A. What would be the short-run(one-year) impact of each pricing stragety?
B. Which do recommend?
Answer:
Murray Exports (U.S.)
A. The short-run impact of each pricing strategy is as follows:
Alternative 1 Alternative 2
Reduce Price to $21,867 Maintain Price at $24,000
Gross profit $38,670,000 $54,000,000
Reduction in Gross Profit $21,330,000 $6,000,000
B. (2) maintain the same dollar price of $24,000, raise the yuan price in China to Yuan 216,000 per unit to offset the devaluation, and experience a 10% drop in sales unit volume.
Explanation:
a) Data and Calculations:
Current exchange rate = Yuan 8.20/US$
Current exports of heavy crane equipment per year to China = 10,000
US unit price of printer in dollars = $24,000
Chinese unit price of crane equipment in Yuan equivalent = Yuan 196,800 ($24,000 * Yuan 8.20)
Unit price of crane equipment in Chinese Yuan when the currency is devalued = Yuan 216,000 ($24,000 * Yuan 9.00)
The reduced dollar price with devaluation, when Yuan price is maintained = $21,867 (Yuan 196,800/9.00)
Before Devaluation of Chinese Yuan:
Sales volume 10,000
Sales revenue $240,000,000 (10,000 * $24,000)
Direct costs 180,000,000 (10,000 * $18,000) (75% of $24,000)
Gross profit $60,000,000
Alternative 1 Alternative 2
Reduce Price to $21,867 Maintain Price at $24,000
Sales volume 10,000 units 9,000 (10,000 * 90%) units
Sales revenue $218,670,000 $216,000,000 ($24,000 * 9,000)
Direct costs 180,000,000 162,000,000 ($18,000 * 9,000)
Gross profit $38,670,000 $54,000,000 ($6,000 * 9,000)
Direct costs = $180m ($18,000 * 10,000) = $162m ($18,000 * 9,000)
Assume that IBM leased equipment that was carried at a cost of $120,000 to Swander Company. The term of the lease is 6 years beginning December 31, 2019, with equal rental payments of $30,044 beginning December 31, 2019. The fair value of the equipment at commencement of the lease is $150,001. The equipment has a useful life of 6 years with no salvage value. The lease has an implicit interest rate of 8%, no bargain purchase option, and no transfer of title. Collectibility of lease payments for IBM is probable. Assume the sales-type lease was recorded at a present value of $150,001.
Prepare IBM’s December 31, 2016, journal entries at commencement of the lease.
December 31, 2016:
Account Name Debit Credit
December 31, 2016
Account Name Debit Credit
Answer:
Date Account titles and Explanation Debit Credit
Dec 31, 19 Lease receivables $150,001
Cost of goods sold $120,000
Sales $150,001
Equipment $120,000
(To record the lease)
Dec 31, 19 Cash $30,044
Lease receivables $30,044
(To record the receipt of lease installment)
Connolly Company produces two types of lamps, classic and fancy, with unit contribution margins of $13 and $21, respectively. Each lamp must spend time on a special machine. The firm owns four machines that together provide 18,000 hours of machine time per year. The classic lamp requires 0.20 hours of machine time, the fancy lamp requires 0.50 hours of machine time.
How many of each type of lamp must be sold to optimize total contribution margin?
a. 90,000 classic lamps; 0 fancy lamps
b. 0 classic lamps; 9,000 fancy lamps
c. 18,000 classic lamps; 0 fancy lamps
d. 0 classic lamps; 30,000 fancy lamps
e. 10,000 classic lamps; 10,000 fancy lamps
Answer:
a. 90,000 classic lamps; 0 fancy lamps
Explanation:
To determine the optimise total contribution, we need to calculate the contribution margin per hour of machine time for both the lamps. Then the result of whichever is higher would be produced.
Moreover, as there is no limitation on how many lamps can be produced, therefore, we would assume that we can make as many as we want up to the limit of machine-hours available. The calculation is done as follows:
Contribution margin per hour of machine time for classic lamp = Contribution/machine hours to build one classic lamp
Contribution margin per hour of machine time for classic lamp = 13 / 0.2
Contribution margin per hour of machine time for classic lamp = 65
Contribution margin per hour of machine time for fancy lamp = Contribution/machine hours to build one fancy lamp
Contribution margin per hour of machine time for fancy lamp = 21 / 0.5
Contribution margin per hour of machine time for fancy lamp = 42
Since classic lamp has the higher contribution margin per hour. Therefore, all the machine hours would be used to make classic lamps.
= 18,000 / 0.2
= 90,000
Hence, 90,000 classic lamps would be sold while no fancy lamps will be sold to optimise total contribution (which would be 65 x 18,000 = $1,170,000).
A firm has the following account balances for this year. Sales for the year are $500,000. Projected sales for next year are $545,000. The percentage of sales approach is used for pro forma purposes. All balance sheet accounts, except long-term debt and common stock, change according to that approach. The firm plans to decrease the long-term debt balance by $5,000 next year. Retained earnings is expected to increase by $3,500 next year. What is the projected external financing need?
a) $10,520
b) $14,720
c) $18,520
d) $20,720
e) $25,620
Answer:
b) $14,720
Explanation:
Note: The missing words are attached below for understanding
Determining the increase in the sales:
Percentage increase in sales = (New sales - Old sales) / Old sales
= ($545,000 - $500,000) / $500,000
= 9%
Determining the new balances of assets and liabilities:
Current assets = $48,000*109% = $52,320
Fixed assets = 158000*109% = $172,220
Total assets = $52,320 + $172,220 = $224,540
Financed by:
The current liabilities = $48000*109% = $52,320
Long-term debt = $83,000 - $5,000 = $78,000
Common stock = $36,000
Retained earnings = $40,000 + $3,500 = $43,500
Total liabilities & the equity = $52,320 + $78,000 + $36,000 + $43,500 = $209,820
External financing needed = Total assets - Total liabilities and equity
External financing needed = $224,540 - $209,820
External financing needed = $14,720
A group of young patrons come into the venue after a sports event. They are loud and excited, celebrating a win for their team. Some of the patrons seem as though they have already been drinking, and the other patrons in the venue have noticed this group. A) How do you respond to these patrons? Issue the group with a warning to make sure they know the type of behaviour that the venue expects. B) One of the patrons comes to the bar to order a few jugs of pre-mix alcoholic drinks for the group. Refuse service to the patron and explain why serving alcohol in this manner is irresponsible. C) The patron is not happy that you have refused him service and he pressures you to serve the group the jugs of alcohol. More of the patron’s friends come over to the bar and start to make a scene, talking loudly for the rest of the venue to hear. D) How do you respond to this? E) After you ask some of the patrons to leave the venue, others from the group start to get upset. They are getting more aggressive and you do not think you can handle the situation on your own. How do you respond to this?
Answer:
The following is how I would deal with the issue of drinking and other associated issues among the Patron in the venue.
A) How do you respond to these patrons?
O. Issue the group with a warning to make sure they know the type of behaviour that the venue expects.
B) One of the patrons comes to the bar to order a few jugs of pre-mix alcoholic drinks for the group. Refuse service to the patron and explain why serving alcohol in this manner is irresponsible.
O. I would refuse to serve the group with the mix which they wanted because they are already drunk going by their behaviour. This would also help to prevent total intoxication in the group which would end up endangering the road users should they decide to go home by driving. The best option would be to ensure that, they took taxi back to their various homes rather than driving themselves.
C) The patron is not happy that you have refused him service and he pressures you to serve the group the jugs of alcohol. More of the patron’s friends ........D) How do you respond to this?
O. By subtle reminder to them that, they are becoming a public nuisance in the venue, and would end up calling the police should the continue with their acts.
E) After you ask some of the patrons to leave the venue, others from the group start to get upset. They are getting more aggressive and you do not think you can handle the situation on your own. How do you respond to this?
O. By informing my overall supervisor why at same time putting a call across to the police about the potential breakdown of order in the venue which has a very high chance of leading to fight or injury.
Explanation:
The employer mandate of the PPACA requires that :_______
a. every firm must purchase health insurance for their full-time employees or pay a $2,000 fine per employee.
b. every firm with 50 or more full-time employees must purchase health insurance for their full-time employees or pay a $2,000 fine per employee.
c. every firm with fewer than 50 full-time employees must purchase health insurance for their full-time employees or pay a $2,000 fine per employee.
d. every firm with 500 or more employees must establish their own on-site medical facilities to provide employees with basic medical care.
Answer:
b. every firm with 50 or more full-time employees must purchase health insurance for their full-time employees or pay a $2,000 fine per employee.
Explanation:
An employee can be defined as an individual who is employed by an employer of labor to perform specific tasks, duties or functions in an organization.
Basically, an employee is saddled with the responsibility of providing specific services to the organization or company where he is currently employed while being paid a certain amount of money hourly, daily, weekly, or monthly depending on the contractual agreement between the two parties (employer and employee).
Hence, while an employer may be the owner of a business firm or company, an employee is a subordinate employed to provide unwavering services to the employer while also, being professional and diligent at all times.
The employer mandate of the Patient Protection and Affordable Care Act (PPACA) requires that every firm with 50 or more full-time employees must purchase health insurance for their full-time employees or pay a $2,000 fine per employee.
The Pastel Paint Company recently loaned $300,000 to KIX 96, a local radio station. The radio station signed a noninterest-bearing note requiring the $300,000 to be repaid in three years. As part of the agreement, the radio station will provide Pastel with a specified amount of free radio advertising over the three-year term of the note. The focus of this case is the valuation of the note receivable by Pastel Paint Company and the treatment of the "free" advertising provided by the radio station. Your instructor will divide the class into two to six groups depending on the size of the class. The mission of your group is to reach consensus on the appropriate note valuation and accounting treatment of the free advertising.
Required:
1. Each group member should deliberate the situation independently and draft a tentative argument prior to the class session for which the case is assigned.
2. In class, each group will meet for 10 to 15 minutes in different areas of the classroom. During that meeting, group members will take turns sharing their suggestions for the purpose of arriving at a single group treatment.
3. After the allotted time, a spokesperson for each group (selected during the group meetings) will share the group’s solution with the class. The goal of the class is to incorporate the views of each group into a consensus approach to the situation.
Answer:
Following are the queries to these question:
Explanation:
Reporting entering for recording the note received
Permissible notes (face amount)........................................................ [tex]\$300,000[/tex]
Cash................................................................................................... [tex]\$300,000[/tex]
Use the following information to prepare the July cash budget for Pinkie Pie Company for July 31, 2021.
a.) Beginning cash balance on July 1: $55,000.
b.) Cash receipts from sales: 10% is collected in the month of sale, 50% in the next month, and 40% in the second month after sale. Sales amounts are: May (actual), $1,700,000; June (actual), $1,000,000; and July (budgeted), $1,500,000.
c.) Payments to suppliers for merchandise purchases: 85% in the month of purchase and 15% in the month following purchase. Purchases amounts are: June (actual), $590,000; and July (budgeted), $770,000.
d.) Budgeted cash disbursements for salaries in July: $297,000.
e.) Budgeted depreciation expense for July: $10,000.
f.) Other cash expenses budgeted for July: $190,000.
g.) Cash dividends to be paid in July: $70,000.
Answer:
Pinkie Pie Company
Cash Budget for the month of July:
Beginning balance $55,000
Expected cash receipts 1,330,000
Cash in hand $1,385,000
Payments:
Purchases $743,000
Salaries 297,000
Other cash expenses 190,000
Cash Dividends 70,000
Expected cash payments $1,300,000
Expected cash balance $85,000
Explanation:
a) Data and Calculations:
a. Beginning cash balance on July 1: $55,000.
b. Cash receipts from sales: May (acetual) June (actual) July (budgeted)
Sales $1,700,000 $1,000,000 $1,500,000
10% month of sale 150,000
50% in the next month 500,000
40% in the second month 680,000
Total expected cash collections in July $1,330,000
c. Payments on merchandise purchases:
June (actual) July (budgeted)
Purchases $590,000 $770,000
85% in the month 654,500
15% in the following month 88,500
Total payment for purchases $743,000
d. Salaries in July: $297,000
f. Other cash expenses $190,000
g. Cash Dividends $70,000
Suppose Dina gets a sales bonus at her place of work that gives her an extra $800 of disposable income. She chooses to spend $600 and save the remaining $200. From this, you can tell that Dina's marginal propensity to consume (MPC) is , and her marginal propensity to save (MPS) is . Mathematically, it must always be true that: Disposable Income = Therefore, it must also be true that: 1 =
Answer:
MPC = 0.75
MPS = 0.25
Disposable income = amount spent on consumption + amount saved
Marginal Propensity to Consume + Marginal Propensity to Save = 1
Explanation:
Marginal propensity to consume is the proportion of disposable income that is spent on consumption
Marginal propensity to consume = amount consumed / disposable income
Marginal propensity to save is the proportion of disposable income that is saved
Marginal propensity to save = amount saved / disposable income
MPC + MPS = 1
Disposable income = amount spent on consumption + amount saved
MPC = 600 / 800 = 0.75
MPS = 200 / 800 = 0.25