Answer:
Total cash receipts - November = $1250000
Explanation:
The credit sales are collected for in such a manner that the 50% amount of this month's sale and the 50% amount of previous month's sales are collected in the correct month. Thus, when calculating the cash receipts for November, we know that the 50% of collections will be for October's sales and the 50% of collections will be from the November's sales.
Cash receipts in November:
From October's sales = 1300000 * 0.5 = $650000
From November's sales = 1200000 * 0.5 = $60000
Total cash receipts - November = 650000 + 600000
Total cash receipts - November = $1250000
Tucker Company makes chairs. Tucker has the following production budget for January - March.
January February March
Units Produced 9666 11971 9743
Each chair produced uses 4 board feet of wood. Management wants ending inventory levels of raw materials to equal 20% gf the production needs (in wood) for the next month.
How many board feet of wood does Tucker need to purchase in February? Round your answer to the nearest whole number.
Answer: 46,101 board feet of wood
Explanation:
Purchases can be calculated using the formula;
Purchases = Total Production Needs + Ending Inventory - Beginning Inventory
Total Production Needs
= Units produced * boards required per unit
= 11,971 * 4
= 47,884 units needed.
Ending Inventory.
This should be 20% of production needs for the next month
= 20% * (9,743 * 4)
= 7,794 units
Beginning Inventory
This will be the ending inventory of January. The ending inventory of January is 20% of February needs.
= 20% * 47,884
= 9,577 units.
Purchases for February = 47,884 + 7,794 - 9,577
= 46,101 board feet of wood
Steve Madison needs $353,100 in 10 years.How much must he invest at the end of each year, at 9% interest, to meet his needs?
Answer:
$23,241.07
Explanation:
To determine the annual annuity, this formula would be used
PV = FV / annuity factor
Annuity factor = {[(1+r)^n] - 1} / r = (1.09^10 - 1 ) / 0.09 = 15.192930
$353,100 / 15.192930 = $23,241.07
At a computer-consulting firm, the number of new clients that they have obtained each month has ranged from 0 to 6. the number of new clients has the probability distribution that is shown below. determine the expected number of new clients per month. # of clients probability 0 0.05 1 0.10 2 0.15 3 0.35 4 0.20 5 0.10 6 0.05
Answer:
3.05
Explanation:
The computer consulting firm is analyzing the performance of its company based on new clients each month. The data is given for six months and the probability distribution for number of new clients per month that the company has gained. The probability sum equals to 1 for the six months. The variance distribution is the squared value of each the difference by the mean. values of probability are squared and then their sum is taken to calculate variance deviation.
Smith Services, Inc., was a trucking company established in 2000 and owned by Tony Smith as the sole shareholder. Smith Services, Inc., had an account with Laker Express, a fuel provider, and often would charge fuel purchases for the company trucks to that account. Smith’s employees would fuel their vehicles and sign the account slip with a notation that the purchase was for Smith Services, Inc. Laker Express would bill Smith Services regularly for the charges on the account. After several months of low business, Smith Services ceased doing business and was dissolved in 2013, with its assets being distributed to creditors. Laker Express only recovered a small part of the amount owed by Smith Services, Inc. Tony Smith then opened up a new trucking service business as a sole proprietor. Laker Express sought to recover Smith Services' unpaid fuel charges, which amounted to about $35,000, from Smith. He argued that he was not personally liable for a corporate debt. Should a court hold Tony Smith personally liable?
Assume that in addition to the facts given, that evidence was presented to the court that Smith, his wife, and their kids regularly used the account at Laker Express to fill up their personal vehicles. Does this change the outcome?
1. Given this new evidence, a court likely (would, would not) find that Laker Express was tricked or misled into dealing with the corporation rather than the individual.
2. The court likely (would, would not) find that the corporation was undercapitalized.
3. The court likely (would, would not) find that the corporation was created to evade an existing legal obligation.
4. The court likely (would, would not) find that the corporation failed to comply with the required corporate formalities and meetings.
5. The court likely (would, would not) find that the personal and corporate interests were commingled to such an extent that the corporation had no separate identity with regard to the relationship with Laker Express.
6. Because of these findings, the court likely (would, would not) pierce the corporate veil and hold Tony Smith personally responsible for the debt to Laker Express.
Answer:
Smith Services, Inc. and Laker Express
a. A court should not hold Tony Smith personally liable for the corporate debt of Smith Services, Inc to the tune of $35,000 representing unpaid fuel charges to Laker Express. This decision is given based on the facts presented in the case, so far.
b. Assuming that in addition to the given facts, evidence was presented to the court that Smith, his wife, and their kids regularly used the account at Laker Express to fill up their personal vehicles, then this evidence changes the outcome. Smith Service, Inc. has met one of the conditions for piercing the corporate veil. This condition is commingling the corporate account with personal expenses and use of corporate assets. This may also question if proper accounting records were being kept at the Smith Services.
c. Therefore,
1. Given this new evidence, a court likely (would, would not) find that Laker Express was tricked or misled into dealing with the corporation rather than the individual.
2. The court likely (would, would not) find that the corporation was undercapitalized.
3. The court likely (would, would not) find that the corporation was created to evade an existing legal obligation.
4. The court likely (would, would not) find that the corporation failed to comply with the required corporate formalities and meetings.
5. The court likely (would, would not) find that the personal and corporate interests were commingled to such an extent that the corporation had no separate identity with regard to the relationship with Laker Express.
6. Because of these findings, the court likely (would, would not) pierce the corporate veil and hold Tony Smith personally responsible for the debt to Laker Express.
Explanation:
To protect the legal status of corporations like Smith Services Inc. as limited liability entities, State courts reluctantly pierce the corporate veil, unless the requirements, which vary from state to state, are met. If Tony Smith does not the court to pierce the corporate veil of Smith Services, Inc., his former company should have used corporate assets only for corporate purposes. Based on the unpaid fuel charges, Tony Smith did not maintain the separation of ownership from his Smith Services, Inc. since he, his wife, their kids, and apparently the employees fuelled their personal cars on fuel charge to Laker Express for Smith Services, Inc. to offset.
1. Given this new evidence, a court would likely find that Laker Express was tricked or misled into dealing with the corporation rather than the individual.
2. The court would not likely find that the corporation was undercapitalized.
3. The court would not likely find that the corporation was created to evade an existing legal obligation.
4. The court likely would not find that the corporation failed to comply with the required corporate formalities and meetings.
5. The court likely would find that the personal and corporate interests were commingled to such an extent that the corporation had no separate identity with regard to the relationship with Laker Express.
6. Because of these findings, the court likely would pierce the corporate veil and hold Tony Smith personally responsible for the debt to Laker Express.
According to the case in hand, Tony Smith, the sole owner of Smith Services, a trucking company was accused of misappropriation of fuel for several years, up to the tune of $35, 000 which may or may not be the reason why the company went bankrupt.
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"Which of the following statements are TRUE regarding the rights agent? I The rights agent usually handles the mechanics of a rights offering II The rights agent is usually the existing transfer agent of the issuer III The rights agent issues the additional shares upon presentation of the rights certificates with payment"
Answer:
I, II, and III
I The rights agent usually handles the mechanics of a rights offering
II The rights agent is usually the existing transfer agent of the issuer
III The rights agent issues the additional shares upon presentation of the rights certificates with payment
Explanation:
Aright is defined as an offering to existing shareholders to purchase more shares. Usually there is a proportion of original shares the shareholder can now purchase. For example 1 to 5 shares means the shareholder can buy one share for every 5 old shares owned.
A rights agent is a person or entity that is responsible for maintaining records on behalf of rights holders.
When rights are issued, a rights agent is handles sales to shareholders, he is usually the initial transfer agent for the issuing company, and he issues the additional shares when payment and rights certificates are presented.
A company's flexible budget for 13,200 units of production showed sales, $54,120; variable costs, $21,120; and fixed costs, $18,000. The operating income expected if the company produces and sells 19,600 units is:
Answer:
Net income= $31,000
Explanation:
Giving the following information:
Production= 13,200
Sales= 54,120
Variable costs= $21,120
Fixed costs= $18,000
First, we need to calculate the unitary contribution margin:
Unitary contribution margin= total contribution margin/number of units
Unitary contribution margin= (54,120 - 21,120) / 13,200
Unitary contribution margin= $2.5
Now, for 19,600 units:
Total contribution margin= 2.5*19,600= 49,000
Fixed costs= (18,000)
Net income= 31,000
If actual overhead incurred during a period exceeds applied overhead, the difference will be a credit balance in the Factory Overhead account at the end of the period.
True or False
Answer:
faslee
Explanation:
plz mark Me As Brainleast ...
he financial manager at Starbuck Industries is considering an investment that requires an initial outlay of $24,000 and is expected to produce cash inflows of $1,000 at the end of year 1, $5,000 at the end of years 2 and 3, $14,000 at the end of year 4, $9,000 at the end of year 5, and $7,000 at the end of year 6. a. Select the time line option that represents the cash flows associated with Starbuck Industries' proposed investment. b. Which of the approaches—future value or present value—do financial managers rely on most often for decision making? Why?
Answer:
Please check the attached image for the timeline image.
present value. this is because in making the decision of whether to carry out a project, the decision is made at the beginning of of the project and not in the future. so it is important to determine the present value to know if the project is profitable and should be carried out.
Explanation:
Timeline is arranges a series of events in chronological order. cash inflows are recorded as positive while cash outflows have a negative sign in front of the amount.
present value is the sum of discounted cash flows
The Cell Inc., a microbiology research laboratory headquartered in the United States, has been losing money. The CEO decides to outsource some production to companies in developing countries. This decision to shift functions or processes to less developed countries is most likely due to their
Answer:
ghjkgg 9ycutzts5a64sts64d6ix74s
The decision of the Ceo of Cell Inc. microbilogy research laboratory to outsource some production in developing countries so that maximum output and fast deliveries can be expected to customers and also by the company can focus on various other factors affecting the business.
What is a research laboratory?The scientific lab where the experiments or products research are made so that new products can be made or existing can be replaced in chemical biological or physical aspects.
What is outsourcing?The practice which is done by an individual or an organization by using third party to carry their business activities like performing tasks giving services to customers etc.
What is third party?The company or an individual which comes in between two aspects and try to manage or solve the issue or give solutions
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On January 1, an investment account is worth 300,000. M months later, the value has increased to 315,000 and 15,000 is withdrawn. 2M months prior to the end of the year, the account is again worth 315,000 and 15,000 is withdrawn. On December 31, the account is worth 315,000. The annual effective yield rate, using the dollar-weighted method, is 16%. Calculate M.
Answer:
M = 3
Explanation:
The first withdrawal takes place 1 - M/12 months until the end of the year. The second withdrawal takes place 2M/12 months before the end of the year.
$315,000 = ($300,000 x 1.16) - {$15,000 x [1 + 0.16(1 - M/12)]} - {$15,000 x [1 + 0.16(2M/12)]}
$315,000 = $348,000 - [$15,000 x (1.16 - 0.16M/12)] - [$15,000 x (1 + 0.32M/12)]
$315,000 = $348,000 - $17,400+ 200M - $15,000 - 400M
$315,000 = $315,600 - 200M
200M = $315,600 - $315,000 = $600
M = 600 / 200 = 3
Alpha can produce either 18 oranges or 9 apples an hour, while Beta can produce either 16 oranges or 4 apples an hour. If the terms of trade are established as 1 apple for 4 oranges, then: Group of answer choices
Answer:
But if they both work together in a way that Alpha produces only apples Beta produces only oranges then they would benefit from trade.
Explanation:
Then alpha should produce only 9 apples an hour, while Beta can produce either 16 oranges or 4 apples an hour.
If Alpha produces oranges there will be a loss because he produces less oranges. But Beta 's choice will not affect the trade.
There are no incentives for Beta to specialize and trade with Alpha.
But if they both work together in a way that Alpha produces only apples Beta produces only oranges then they would benefit from trade.
Jewel Service anticipates the following sales revenue over a five-month period: The company's sales are 40% cash and 60% credit. Its collection history indicates that credit sales are collected as follows: How much cash will be collected in January? In February? In March? For the quarter in total? Complete the cash budget to determine how much cash will be collected in January, February, March and for the quarter in total. (Round your answers to the nearest whole dollar.)
Answer:
I looked up the missing information, hopefully it's the same as your question. If not you can adjust the answer.
Its collection history indicates that credit sales are collected as follows:
25% in the month of the sale 50% in the month after the sale 15% two months after the sale 10% are never collectedsales revenue:
November $16,100 December $10,400 January $15,600 February $12,400 March $14,400Jewel Services
Cash Collections budget
For the months of January, February, and March
cash collected from sales January February March Quarter
from November sales $2,415 $2,415
from December sales $5,200 $1,560 $6,760
from January sales $3,900 $7,800 $2,340 $14,040
from February sales $3,100 $6,200 $9,300
from March sales $3,600 $3,600
Total $11,515 $12,460 $12,140 $36,115
Massena Corporation reported the following data for the month of February:
Inventories: Beginning Ending
Raw materials (Direct and Indirect) $40000 $24000
Work in process $23000 $17000
Finished goods $50000 $72000
Additional information:
Raw materials purchases $63000
Direct labor cost $73700
Manufacturing overhead $55000
cost actually incurred
Raw materials included in
manufacturing overhead costs
incurred as indirect materials $5000
Manufacturing overhead cost
applied to Work in Process $48000
The adjusted cost of goods sold that appears on the income statement for February is:____
$=
Answer:
$186,700
Explanation:
The computation of adjusted cost of goods sold is shown below:-
Before that we need to do the following calculations
Raw material consumed = Beginning raw material + Raw material purchases - Ending raw materials - Raw materials included in manufacturing overhead costs as indirect materials
= $40,000 + $63,000 - $24,000 - $5,000
= $74,000
Total manufacturing cost = Beginning work in progress + Raw material consumed + Direct labor cost + Manufacturing overhead cost - Ending work in progress
= $23,000 + $74,000 + $73,700 + $48,000 - $17,000
= $201,700
Unadjusted Cost of goods sold = Raw materials + Total manufacturing cost - Ending finished goods
= $50,000 + $201,700 - $72,000
= $179,700
Adjusted COGS = Unadjusted Cost of goods sold + Underapplied overhead
= $179,700 + ($55,000 - $48,000)
= $179,700 + $7,000
= $186,700
What must be the price of a $ 2 comma 000 bond with a 5.8% coupon rate, annual coupons, and 30 years to maturity if YTM is 10.1 % APR?
Answer:
Price of bond= $1,196
Explanation:
The value of the bond is the present value(PV) of the future cash receipts expected from the bond. The value is equal to present values of interest payment plus the redemption value (RV).
Value of Bond = PV of interest + PV of RV
The value of bond would be worked out as follows:
Step 1
Calculate the PV of interest payments
Annual interest payment
= 5.8% × 2,000× = 116
PV of interest payment
A ×(1- (1+r)^(-n))/r
A- 116
r- annual yield 5.8%
n = 30
= 116 × (1-(1.101)^(-30)/0.101
= 1084.465
Step 2
PV of redemption Value
PV = $2000 × (1.101)^(-30)
= 111.53
Step 3
Price of bond
= 111.53 + 1084.465159 = 1195.99
Price of bond= $1,196
Imprudential, inc., has an unfunded pension liability of $582 million that mustb be paid in 20 years. To assess the value of the firms stock, financialal analysts to discount the liability back to the present
If the relevant discount rate is 7.5 percent, what is the present value of this liability? (Enter your answer in dollars not in millions, e.g., 1,234,567. Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)
Answer:
Present value $137,010,452.17
Explanation:
Calculation for the present value of Imprudential, inc. liability
Using this formula
Present Value = FV / (1 + r)^t
Where,
FV =$582,000,000
=(1 + r)=(1+0.075=1.075)
t=20 Years
Let plug in the formula
Present Value = $582,000,000 / (1.075)^20
Present Value=$582,000,000/4.2478511
Present value= $137,010,452.17
Therefore the present value of Imprudential, inc. liability will be $137,010,452.17
Delta Company sells mini-flash drives. The selling price is $10 each and the variable costs are $8. If fixed costs are $3,000, how much in sales dollars must Delta have to break even
Answer:
Break-even point (dollars)= $15,000
Explanation:
Giving the following information:
The selling price is $10 each and the variable costs are $8.
Fixed costs are $3,000.
To calculate the break-even point in dollars, we need to use the following formula:
Break-even point (dollars)= fixed costs/ contribution margin ratio
Break-even point (dollars)= 3,000 / [(10 - 8)/10]
Break-even point (dollars)= $15,000
Which of the following is a reason cash flows may differ from accounting income? The total number of units sold will be different for accounting income and cash flows. Depreciation is a tax-deductible expense but is not a cash outlay. Which of the following best describes incremental cash flows? They are the difference between the cash flows the firm will have if it accepts the project versus the cash flows it will have if it rejects the project. Incremental cash flows are not relevant because they will occur whether or not the project is accepted.
Answer:
1. Depreciation is a tax-deductible expense but is not a cash outlay.
2. They are the difference between the cash flows the firm will have if it accepts the project versus the cash flows it will have if it rejects the project.
Explanation:
1. Depreciation as a non-cash outlay is removed from the Net Income when it is calculated for tax purposes. However, when calculating the Net Cash-flow, it is added back because the Cash-flow statement deals with how much actual money the business has and because depreciation does not actually take any money, it would need to be added back in the cash-flows as opposed to Accounting income where it is removed.
2. Incremental Cash-flows get their name from the fact that they will add income to a firm. This cash-flow comes if the company accepts a project as opposed to rejecting it and the cash they get from this increases their cash-flow making it incremental.
To create the proper style for an argumentative essay, a writer should
add personal statements.
O include vague language.
O incorporate slang words.
O provide clear statements.
Answer:
Provide clear statements
The government can pay for projects to create work
Explanation:
To create the proper style for an argumentative essay, a writer should
provide clear statements.
What is argumentative essay?An argumentative essay can be defined as a writing essay in which the writer is meant include evidence as well as detailed fact that will help to backup the argument.
When writing an argumentative essay it is important that the writer provide clear statement to as well focus on the evidence.
Therefore to create the proper style for an argumentative essay, a writer should provide clear statements.
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With an increase in product advertising of $50 million you expect to increase sales by 10,000 units. If unit grow margin is $4,800, will the additional advertising increase product contribution?
Answer:
Income will decrease by $2,000,000.
Explanation:
Giving the following information:
Advertising increase= $50,000,000
Units increase= 10,000 units
Unit contribution margin= $4,800
To calculate the total effect on income, we need to use the following formula:
Effect on income= total contribution margin - increase in fixed costs
Effect on income= 10,000*4,800 - 50,000,000
Effect on income= $2,000,000 decrease
Income will decrease by $2,000,000.
In the price range where demand is inelastic, a decrease in price will result in a decrease in total revenue. True or False?
Western Electric has 26,000 shares of common stock outstanding at a price per share of $67 and a rate of return of 13.60 percent. The firm has 6,700 shares of 6.60 percent preferred stock outstanding at a price of $89.00 per share. The preferred stock has a par value of $100. The outstanding debt has a total face value of $368,000 and currently sells for 105 percent of face. The yield to maturity on the debt is 7.72 percent. What is the firm's weighted average cost of capital if the tax rate is 35 percent?
Answer:
Weighted average cost of capital= 11.03%
Explanation:
The weighted average cost of capital (WACC) is the average cost of all the various sources of long-term finance used by a business weighted according to the proportion which each source of finance bears to the the entire pool of fund.
To calculate the weighted average cost of capital, follow the steps below:
Step 1: Calculate cost of individual source of finance:
Cost of Equity= 13.6%
After-tax cost of debt:
= (1- T) × before-tax cost of debt
= 7.72%× (1-0.35)= 5.018 %
Cost of preferred stock costs
= Div/Price × 100 = (6.60%× 100)/89× 100 =7.42%
Step 2 : Market value of all the sources of funds
Equity = $67×26,000 =1,742,000
Preferred stock = 89.00 × 6,700 = $596,300
Debt- 105/100 × 368,000 = $386,400
Step 3; Work out weighted average cost of capital (WACC)
Source Cost Market value Cost × Market value a b c b× c
Equity 13.6% $1,742,000 236,912
Preferred stock 7.42% $596,300 = 44,245.46
Debt 5.018 % 386400 = 19,389.55
Total 2,724,700 300,547.01
WACC = (300,547.01/ 2,724,700) × 100 = 11.03%
Weighted average cost of capital= 11.03%
From past records it is known that 10% of items from a production line are defective. If two items are selected at random, what is the probability that only one is defective?
Answer:
0.2
Explanation:
The Probability distribution is the function which describes the likelihood of possible values assuming a random variable. The 10% of the items from the production line are assumed to be defective. There is a sample selection of 2 items. The probability that one of the item among the selected sample of two items is found defective is 0.2 (2 items sample *10%)
You are thinking of building a new machine that will save you $ 4 comma 000$4,000 in the first year. The machine will then begin to wear out so that the savings decline at a rate of 1 %1% per year forever. What is the present value of the savings if the interest rate is 9 %9% per year?
Answer:
The present value of the savings=$37,064.22
Explanation:
The present value of the savings is the amount that it worths today, this would be done in two stages;
The first stage is to determined the present of the first cash savings as follows:
PV of the first payment = 4,000 × (1.09)^(-1)=3,669.72
Second step is to determine the present value of the declining perpetuity
PV of declining perpetuity. A perpetuity is the series of cash flow occurring for the foreseeable future of years.
A- 4,000, g-negative growth rate = 1%,
interest rate = 9%
PV in year 1 = 4,000× (1-0.09)/(0.09+0.01)
= 36,400
PV in year 0 = 36,400 × (1.09)^(-1) = 33,394.49
The present value of the savings = 33,394.49 + 3,669.72= 37,064.22
The present value of the savings=$37,064.22
Movements in individual stock prices tend to be Group of answer choices positively correlated positively correlated with inflation negatively correlated positively correlated with changes in interest rates
Answer:
Option A (positively correlated) is the correct choice.
Explanation:
A stock for whom the valuation hasn't adjusted from over timeframe would have a slight Weighted Analysis and perhaps a product where price has plummeted and over timeframe would have a measured Analysis loss.The share price would typically vary considerably as shareholders purchase securities during the business day. Because more customers look to purchase something and decrease as companies began consuming more than just the stock, the stock value will change.The other three choices are not related to the given situation. So that Option A would be the correct one.
Identifying the median voter
Sam, Andrew, and Darnell are roommates who are trying to decide how much money to spend on heat in their apartment each month.
A. Andrew would ideally contribute $15. However, he would prefer contributing $55 to contributing $0 because he does not want to freeze.
B. Sam hates being cold. Therefore, he would ideally like each to contribute $55 to heat, and his utility declines at a constant rate as the roommates decrease the amount of money they spend.
C. Darnell does not care about heat and is on a tight budget. Therefore, he prefers to contribute no money to heat, and his utility declines at a constant rate as the roommates increase the amount of money they spend.
Suppose the three roommates vote on spending either so, $15, or $55 on heat using the Borda count system of voting. That is, each roommate awards three points to his first choice, two points to his second choice, and one point to his third choice
Answer:
The median voter here is $55 based on the allocated points in order of preference.
This is the vote that avoids the two extremes of 5 and 7
Explanation:
Voting with the Borda count system of voting:
$0 $15 $55
Andrew 1 3 2
Sam 1 2 3
Darnell 3 2 1
Total points 5 7 6
The median voter is the selection that is based on choosing the median in a spectrum, so that the extremes are avoided. In this case, the extremes win points 5 and 4, with the median as 6.
The voting was done by using the Borda count system of voting. With this system, points are allocated based on personal preferences. The preference that is favored most is given the highest point, and so on. This implies that the preference that is least favoured is given the lowest point.
On January 1, 2020, the Oriole Company had $2,990,000 of $10 par value common stock outstanding that was issued at par and Retained Earnings of $1,150,000. The company issued 146,000 shares of common stock at $16 per share on July 1. On December 15, the board of directors declared a 10% stock dividend to stockholders of record on December 31, 2020, payable on January 15, 2021. The market value of Oriole Company stock was $17 per share on December 15 and $17 per share on December 31. Net income for 2020 was $580,000.
Required:
Journalize the issuance of stock on July 1 and the declaration of the stock dividend on December 15.
Answer:
Oriole Company
Journal Entries:
July 1:
Debit Cash Account $2,336,000
Credit Common Stock $1,460,000
Credit Paid-in In Excess of Common Stock $876,000
To record the issuance of 146,000 shares of common stock, par $10 at $16 per share.
December 15:
Debit Retained Earnings $445,000
Stock Dividends Payable $445,000
To record the declaration of a 10% stock dividend.
Explanation:
a) Stockholders of record on December 31, 2020:
Number of shares in issue at beginning 299,000
Number of shares issued on July 1 146,000
Total 445,000
10% of 445,000 = 44,500 shares
b) Stock Dividends declared on December 15 will result to the issuance of 44,500 shares to stockholders. To finance this stock dividend, the Retained Earnings account is debited while the Stock Dividends Payable is credited. When the shares are issued on January 15, the Stock Dividends Payable (Distributable) will be debited and the Common Stock credited with the par value. The market price of $17 does not affect the company's records.
According to the adaptive expectations theory, you are likely to underestimate inflation when the price level is increasing at a_____________ rate and to overestimate inflation when price level is increasing at a___________rate.
a. Increasing
b. Decreasing
c. Constant
Answer: increasing
Explanation:
Adaptive expectations hypothesis is a theory which states that economic agents such as the individuals, firms and the government will look at past events and experiences to make adjustments on future expectations.
According to the theory, one is likely to underestimate inflation when the price level is increasing at an increasing rate and to overestimate inflation when price level is increasing at an increasing rate.
Per Chevron’s 3Q 2013 filing, what was the percentage change in the cost of purchased oil products when comparing nine months ended September 30, 2013 versus the same period in 2012?
Answer:
Per Chevron 3Q 2013 Filling:
The percentage change in the cost of purchased oil products nine months to September 30, 2013 when compared to nine months in 2012 was:
2.47%
Explanation:
a) Data and Calculations:
Cost of purchased oil products:
2013 $34,822,000,000
2012 $33,982,000,000
Change $840,000,000
Percentage Change = $840/$33,982 x 100
= 2.47%
b) The implication is that Chevron's cost of purchased oil products in third quarter of 2013 increased by 2.47% when compared with the same period in 2012. This percentage change is calculated by subtracting the Q3 2012 cost of purchased oil products from the Q3 2013 cost of purchased oil products and then dividing the difference by the Q3 2012, and multiplying by 100. The change could be caused by increases in the price of oil products or other variables.
Analyzing Contingent and Other Liabilities:
The following independent situations represent various types of liabilities. Analyze each situation and indicate which of the following is the proper accounting treatment for the company: (a) record a liability on the balance sheet, (b) disclose the liability in a financial statement footnote, or (c) neither record nor disclose any liability.
1. A stockholder has filed a lawsuit against______. ______attorney's have reviewed the facts of the case. Their review revealed similar lawsuits have never resulted in a cash award and it is highly unlikely that this lawsuit will either.
2. _____signed a 60-day, 10% note when it purchased items from another company.
3. The EPA notifies______that a state where it has a plant is filing a lawsuit for groundwater pollution against_____and another company that has a plant adjacent to______plant. Test results have not identified the exact source of the polution. ______manufacturing process often produces by-products that can pollute groundwater.
4. _______manufactured and sold products to a retailer that later sold the products to consumers. ______will replace the product if it is found to be defective within 90 days of the sale to the consumer. Historically, 1.2% of the products are returned for replacement.
Answer:
1. Situation is that a Stockholder has filed a lawsuit against C corporation.
Accounting treatment: Neither record nor disclose any liability.
Since the liability is not at all possible, it should be neither recorded nor disclosed.
2. Situation: F signed a 60 days, 10% note when it purchased items from another company.
Account treatment: Record the liability on the balance sheet.
Real liability that is both certain and the liability amount can also be reasonably estimated. It should be recorded on the balance sheet.
3. The EPA notifies S co that a state where it has a plant is filing a lawsuit.
Account treatment: Disclose the liability in a financial statement footnote.
The liability is probable but not certain and liability amount can also be reasonably estimated. It should be disclosed in financial statement footnote.
4. Situation: Company manufactured and sold products to a retailer that later sold product to consumer.
Account treatment: Record the liability on the balance sheet.
Real liability that is both certain and the liability amount can also be reasonably estimated. It should be recorded on the balance sheet.
Sales revenue for a sporting goods store amounted to $528,000 for the current period. All sales are on account and are subject to a sales tax of 11?%.
Which of the following would be included in the journal entry to record the sales? transaction?
A. A debit to Accounts Receivable for $ 586,080.
B. A credit to Accounts Receivable for $528,000.
C. A debit to Sales Tax Payable for $58,080.
D. A debit to Sales Revenue for $ 528,000.
Answer:
The answer is A. A debit to Accounts Receivable for $ 586,080
Explanation:
Sales tax is an additional amount of money one pays based on a percentage of the selling price of goods and services that are purchased.
The sales tax amount will be added to sales revenue to form the total bill.
Sales revenue ----------------- $528,00
Sales tax -------------------------- 11%
Sales tax amount
$528,00 x 0.11
= $58,080
Therefore, total bill is:
$528,00 + $58,080
=$586,080.
Debit increases an asset(accounts receivable) while credit decreases an asset(accounts receivable).
Since the accounts receivable will increase, it will be on debit side.