Answer:
Sensitivity analysis.
Explanation:
Sensitivity analysis studies how an economic variable would change due to changes in one of the input variables.
Due to the fact that the future is uncertain, it would be wise to accommodate a varying range of scenarios to be able to be well prepared for the future.
Sensitivity analysis involves changing one input at a time to determine how they would affect results.
For example, in determining NPV, there can be different ranges of discount rate
f
Below are several transactions that took place in Seneca Company last year: Paid suppliers for inventory purchases. Bought equipment for cash. Paid cash to repurchase its own stock. Collected cash from customers. Paid wages to employees. Equipment was sold for cash. Common stock was sold for cash to investors. Cash dividends were declared and paid. A long-term loan was made to a supplier. Income taxes were paid to the government. Interest was paid to a lender. Bonds were retired by paying the principal amount due. Required: Indicate how each of the above transaction would be classified on a statement of cash flows. As appropriate, place an X in the Operating, Investing, or Financing column. Also, place an X in the Cash Inflow or Cash Outflow column.
Answer:
Note: Operating = A, Investing = B, Financing = C, Cash Inflow column = D, Cash Outflow column = E
A B C D E
a. Paid suppliers for inventory X X
purchases.
b. Bought equipment for cash. X X
c. Paid cash to repurchase its X X
own stock.
d. Collected cash from customers. X X
e. Paid wages to employees. X X
f. Equipment was sold for cash. X X
g. Common stock was sold for X X
cash to investors.
h. Cash dividends were declared X X
and paid.
i. A long-term loan was made to X X
a supplier.
j. Income taxes were paid to X X
the government.
k. Interest was paid to a lender. X X
l. Bonds were retired by paying X X
the principal amount due
During 2021, Phil Rupp presents the following transactions:_______.
Bank loan proceeds received (to purchase a new car) of $15,000
Wages of $56,821
Contribution to a Roth IRA of $5,000
Pass-through loss from a partnership of $7,637
Interest income earned of $43
Assuming Phil Rupp files as single with one valid dependent in 2017, his gross income is _______, while his adjusted gross income is ______.
Answer:
Assuming Phil Rupp files as single with one valid dependent in 2017, his gross income is __$56,864__, while his adjusted gross income is __$44,227_.
Explanation:
a) Data and Calculations:
Bank loan proceeds received (to purchase a new car) of $15,000
Wages of $56,821
Contribution to a Roth IRA of $5,000
Pass-through loss from a partnership of $7,637
Interest income earned of $43
Gross income:
Wages of $56,821
Interest income earned of $43
Total gross income = $56,864
Adjusted gross income:
Gross income of $56,864
less:
Contribution to a Roth IRA of $5,000
Pass-through loss from a partnership of $7,637 (less than 20% of $56,864)
Adjusted gross income = $44,227 ($56,864 - $5,000 - $7,637)
b) With Pass-through each partner's share of business income, gain, deduction, or loss is passed through to the owner and reported on the owner's personal federal income tax return for the tax year. According to the Tax Cuts and Jobs Act of 2017, individual business owners are entitled to up to 20% of their income as pass-through losses.
What is a commodity
Answer:
Something useful or valuable.
Explanation:
Paul Martin had worked for 12 years for the department of transportation when he applied for a promotion to dispatcher. Martin scored 75 on an interview test. Betty Palmer, another candidate, scored 73 and got the job. Martin sued the county for reverse discrimination. The county said that both Martin and Palmer were qualified and that Palmer had gotten the job as part of a voluntary affirmative action plan designed to achieve a work force that reflected the race and gender composition of the county. The county pointed out that none of 238 skilled craft workers jobs in the county were help by women. Answer the questions below around this case.
a. What issue(s) must the court decide in the case (for example, racial harassment)?
b. If you were the judge, how would you rule? Explain.
c. Describe two ways to help ensure workforce planning and employment are compliant.
Answer:
a.)
The court has to hear the arguments from both side of the party , analyze the arguments that has imposed by the party on each other. And after analyzing, the court decide the judgement.
b.)
If I were the judge , then i would not consider the case under racial harassment .
Because the country has an argument that Palmer had gotten the job as part of a voluntary affirmative action plan designed to achieve a work force that reflected the race and gender composition of the county.
Also , we know others law that says about equal employment has to give to the person without any discrimination.
c.)
To lower down the illegal occupation activities , proper plan of the workspace is must.
Steps required for workspace planning -
1. Objective of Business
2. Current workforce
3. Workers Necessity
4. Gap Minimization
5. Action plan review.
Explanation:
As given,
Paul Martin had worked for 12 years for the department of transportation when he applied for a promotion to dispatcher.
Martin scored 75 on an interview test.
Betty Palmer, another candidate, scored 73 and got the job.
a.)
The court has to hear the arguments from both side of the party , analyze the arguments that has imposed by the party on each other. And after analyzing, the court decide the judgement.
b.)
If I were the judge , then i would not consider the case under racial harassment .
Because the country has an argument that Palmer had gotten the job as part of a voluntary affirmative action plan designed to achieve a work force that reflected the race and gender composition of the county.
Also , we know others law that says about equal employment has to give to the person without any discrimination.
c.)
To lower down the illegal occupation activities , proper plan of the workspace is must.
Steps required for workspace planning -
1. Objective of Business
2. Current workforce
3. Workers Necessity
4. Gap Minimization
5. Action plan review.
Use the following items to prepare a balance sheet and a cash flow statement. Determine the total assets, total liabilities, net worth, total cash inflows, and total cash outflows. Balance Sheet and Cash Flows Rent for the month$1,240 Monthly take-home salary$3,420 Cash in checking account 700 Savings account balance 2,110 Spending for food 820 Balance of educational loan 2,930 Current value of automobile 8,590 Telephone bill paid for month 69 Credit card balance 236 Loan payment 177 Auto insurance 239 Household possessions 3,680 Stereo equipment 3,240 Payment for electricity 110 Lunches/parking at work 271 Donations 169 Home computer 1,870 Value of stock investment 1,750 Clothing purchase 148 Restaurant spending 177
Answer:
1. Balance Sheet:
Assets:
Cash in checking account $700
Savings account balance 2,110
Current value of automobile 8,590
Home computer 1,870
Value of stock investment 1,750
Household possessions 3,680
Stereo equipment 3,240 $21,940
Liabilities:
Balance of educational loan 2,930
Credit card balance 236 $3,166
Net Worth $18,774
2. Cash Flows:
Cash Inflows:
Monthly take-home salary $3,420
Outflows:
Rent for the month $1,240
Spending for food 820
Telephone bill paid for month 69
Auto insurance 239
Payment for electricity 110
Lunches/parking at work 271
Donations 169
Clothing purchase 148
Restaurant spending 177
Loan payment 177
Total cash outflows $3,420
Explanation:
Monthly take-home salary $3,420
Rent for the month $1,240
Spending for food 820
Telephone bill paid for month 69
Auto insurance 239
Payment for electricity 110
Lunches/parking at work 271
Donations 169
Clothing purchase 148
Restaurant spending 177
Loan payment 177
Assets:
Cash in checking account 700
Savings account balance 2,110
Current value of automobile 8,590
Home computer 1,870
Value of stock investment 1,750
Household possessions 3,680
Stereo equipment 3,240
Liabilities:
Balance of educational loan 2,930
Credit card balance 236
Four different corporations, Amber, Blue, Coral, and Daffodil, show the same balance sheet data at at the beginning and end of a year. These data, exclusive of the amount of stockholders' equity, arere summarized as follows:
Total Assets Total Liabilities
Beginning of the year $1,220,000 $990,000
End of the year 1,730,000 1,150,000
On the basis of the preceding data and the following additional information for the year, determine the net income (or loss) of each company for the year. (First determine the amount of increase or decrease in stockholders' equity during the year).
Amber: No additional common stock was issued and no dividends were paid.
Blue: No additional common stock was issued, but dividends of $60,000 were paid.
Coral: Additional common stock of $140,000 was issued, but no dividends were paid.
Daffodil: Additional common stock of $140,000 was issued and dividends of $60,000 were paid.
Answer:
Amber
Change in stockholders' equity = $580,000 - $230,000 = $350,000
No additional shares issued, so net income = $350,000
Blue
Change in stockholders' equity = $580,000 - $230,000 = $350,000
No additional shares issued, but dividends paid for $60,000, so net income = $410,000
Coral
Change in stockholders' equity = $580,000 - $230,000 = $350,000
Additional shares issued for $140,000, so net income = $210,000
Daffodil
Change in stockholders' equity = $580,000 - $230,000 = $350,000
Additional shares issued for $140,000, dividends paid for $60,000, so net income = $270,000
On January 1, year 8, Derek Co.’s defined benefit pension plan had plan assets with a fair value of $750,000, and a projected benefit obligation of $875,000. In addition: Actual and expected return on plan assets – 7% Interest cost – 9% Service costs - $24,000 Unamortized prior service cost - $120,000 Employer contributions to the plan - $45,000 Distributions to employees from the plan - $60,000 Unamortized prior service cost is being amortized over the expected remaining service lives of covered employees, which consists of a total of 9 employees: 2 employees are each expected to have 9 years remaining 3 employees are each expected to have 6 years remaining 4 employees are each expected to have 1 year remaining How much amortization of prior service cost will be included in Derek Co.’s pension expense for year 8?
Answer: $27,000
Explanation:
Amortization of prior cost = (No. of employees / Total number of years left) * Unamortized prior service cost
Total number of years left:
2 employees are each expected to have 9 years remaining = 2 * 9
= 18 years
3 employees are each expected to have 6 years remaining = 3 * 6
= 18 years
4 employees are each expected to have 1 year remaining = 4 * 1
= 4 years
Total number of years = 18 + 18 + 4
= 40 years
Amortization of prior cost = (9 / 40) * 120,000
= $27,000
Miguel Alvarez in the accounting department at Baumer Company has provided the following information:
Cost per Unit Cost per Period
Direct materials $6.25
Direct labor $3.20
Variable manufacturing overhead $1.20
Fixed manufacturing overhead $13,200
Sales commissions $1.20
Variable administrative expense $0.50
Fixed selling and administrative expense $3,300
The incremental manufacturing cost that the company will incur if it increases production from 5,500 to 5,501 units is closest to:_____
The incremental manufacturing cost that the company will incur if it increases production from 5,500 to 5,501 units is closest to $10.65.
Here, the fixed cost would not be relevant for the computation.
Incremental manufacturing cost when production level changed is
= Direct material cost per unit + Direct labor cost per unit + Variable manufacturing overhead per unit
= $6.25 + $3.20 + $1.20
= $10.65
In conclusion, the incremental manufacturing cost that the company will incur if it increases production from 5,500 to 5,501 units is closest to $10.65.
Read more about manufacturing cost
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A motive is always required for the suspect to be criminally liable
_____ is a method of attempting to settle labor disputes in when a specialist from the federal government helps management and the union focus on the issues and acts as a communication channel through which management and the union can send messages and share information with each other.
Answer: e. Conciliation
Explanation:
This process is known as Conciliation and it falls under the purview of the Federal Mediation and Conciliation Service of the United States.
Conciliation stands out from Mediation because with mediation, the third party that is helping both sides negotiate might not be trained but with Conciliation, the third part is a specialist in the process and thus will be more effective in dealing with the dispute.
Margot starts a new business and contributes $20,000 in cash; she also borrows $25,000 from her local bank. She utilizes the cash to purchase supplies for $5,000 and a computer system for $10,000. After these transactions, the total claims to the company's total resources are:
Answer:
$45,000
Explanation:
Given the above information, total resources is computed as;
Total resources = Cash + Purchase supplies + Equipment computer system
But
Cash = $20,000 + $25,000 - $5,000 - $10,000 = $30,000
Total resources = $30,000 + $5,000 + $10,000 = $45,000
Joshua loans his son, Seth, $100,000 interest free for five years. Seth uses the money for a down payment on his home. Assume that the applicable federal interest rate is 4 percent. What are the tax consequences of this loan to Joshua and to Seth? How would your answer change if Seth uses the money to invest in corporate bonds paying 8 percent annual interest? [LO
Answer:
What are the tax consequences of this loan to Joshua and to Seth?
The IRS requires that any loans must charge a minimum interest rate, and in this case, since Joshua is not charging any interest to his son, the IRS will consider the minimum interest rate as a gift and will tax it that way. Since Joshua can make gifts for $15,000 per year, if the threshold is already passed, the IRS will consider $100,000 x 4% = $4,000 as taxable gifts.
How would your answer change if Seth uses the money to invest in corporate bonds paying 8 percent annual interest?
The answer shouldn't change since Joshua is the one that can be taxed here. Seth cannot deduct any interest expense or gift tax expense either.
Below is the complete list of accounts of Sooner Company and the related balance at the end of April. All accounts have their normal debit or credit balance. Cash, $3,200; Prepaid Rent, $6,700; Accounts Payable $3,600; Common Stock, $33,000; Service Revenue, $24,700; Salaries Expense, $7,500; Accounts Receivable, $5,400; Land, $53,000; Deferred Revenue, $1,950; Retained Earnings, $21,250; Supplies Expense, $8,700. Required: Prepare a trial balance with the list of accounts in the following order: assets, liabilities, stockholders' equity, revenues, and expenses.
Answer:
Trial Balance
Debit Credit
Land 53000
Accounts Receivable 5400
Cash 3200
Prepaid Rent 6700
Accounts Payable 3600
Deferred revenue 1950
Common Stock 33000
Retained earnings 21250
Service Revenue 24700
Salaries expense 7500
Supplies expense 8700
Totals 84500 84500
Explanation:
The trial balance has been made in the answer section.
As a developing nation, India has relied on assistance for building roads, power plants, schools, and hospitals. In order to receive assistance, the government of India has lower trade barriers and fosters private business. Many high-tech start-ups and call centers are now located in India. This example illustrates the function of the _______.
Answer:
international monetary fund (IMF)
Explanation:
This example illustrates the function of the international monetary fund (IMF). This fund is what helps India build all the infrastructure that they need in order to maintain its financial stability and allows it to improve its international trade and relationships. Since India is a member of the International monetary fund and contributes to it they are able to receive assistance for such expenses from the fund itself. All country members contribute to the fund and mutually benefit from doing so.
You buy a share of The Ludwig Corporation stock for $19.20. You expect it to pay dividends of $1.11, $1.1833, and $1.2614 in Years 1, 2, and 3, respectively, and you expect to sell it at a price of $23.26 at the end of 3 years. Calculate the growth rate in dividends. Round your answer to two decimal places. % Calculate the expected dividend yield. Round your answer to two decimal places. % Assuming that the calculated growth rate is expected to continue, you can add the dividend yield to the expected growth rate to obtain the expected total rate of return. What is this stock's expected total rate of return (assume market is in equilibrium with the required rate of return equal to the expected return)
Answer:
P0 = $19.20
D1 = $1.11
D2 = $1.1833
D3 = $1.2614
P3 = $23.26
a. Dividend growth rate = (1.2614-1.1833)/1.1833 = 0.0781/1.1833 = 0.06600186 = 6.60%
b. Expected Dividend Yield=(Expected Dividend/Price)*100 = $1.11/$19.20 = 0.0578125 = 5.78%
c. Total Rate of Return = 6.60% + 5.78% = 12.38%
The purpose of a SWOT analysis is to ___.
a. evaluate the marketing strategy that a company has been using.
b. determine the best strategy for the company.
c. compare the company's advantages with that of its competitors.
d. identify important company and environmental factors.
e. formulate goals and objectives for a company.
Answer: e. formulate goals and objectives for a company.
Explanation:
The SWOT analysis helps in decisions making in businesses. It helps in changing the needs of the organization. It helps the organization to build a plan so as to meet goals and improve the performances, and it also helps in keeping the relevancy in businesses in terms of decisions. It helps in analyzing the deep strengths, threats and weaknesses of the organization. It helps in promoting the overall growth, production, and services. It targets the market competition to develop necessary strategy.
Kendra Corporation uses a process-cost accounting system. The company adds direct materials and direct labor at the start of its production process; overhead cost is incurred evenly throughout manufacturing. The firm has no beginning work-in-process inventory; its ending work in process is 40% complete. Which of the following sets of percentages would be used to calculate the correct number of equivalent units in the ending work-in-process inventory?
a. Materials, 100%; labor, 100%; overhead cost, 40%.
b. Materials, 100%; labor, 100%; overhead cost, 100%.
c. Materials, 100%; labor 40%; overhead cost, 40%.
d. Materials, 40%; labor, 40%; overhead cost, 60%.
e. Materials, 40%; labor, 40%; overhead cost, 100%.
Answer:
a. Materials, 100%; labor, 100%; overhead cost, 40%.
Explanation:
The work in Process have already passed the mark at which Materials and Labor are added, that is the start of its production process so these are both 100% complete. Overheads are 40 % complete, which is the extent of work done on them since they occur evenly.
8. Agreement and disagreement among economists Suppose that Tim, an economist from a business school in Georgia, and Alyssa, an economist from a university in Massachusetts, are arguing over government bailouts. The following dialogue shows an excerpt from their debate: Alyssa: Thanks to recent financial crises, the concept of bailouts is a hot topic for debate among everyone these days. Tim: Indeed, it's gotten crazy! A government bailout of severely distressed financial firms is unnecessary because free markets will properly price assets. Alyssa: I don't know about that. Without a bailout of severely distressed financial firms, the economy will experience a deep recession. The disagreement between these economists is most likely due to .
Answer:
The disagreement between these economists is most likely due to .
differences between perceptions versus reality.
Explanation:
A bailout occurs when the government provides capital resources to a distressed business or failing company, which it considers to be too big to fail. The purpose is to prevent the consequences of the downfall of such an entity, which may include bankruptcy, default on its financial obligations, economic impact on the wider society. Most bailouts are made for the benefit of the society rather than the business entity. The mindset from which two economists can perceive the reality of bailouts will always differ.
Terry Dactal has compiled the financial information displayed below. Which of the following is Terry’s net worth? Salaries $72,400 Credit Card Balance $8,600 Cash on Hand $1,500 Utilities paid to date $8,450 Coin Collection $2,350 Jewelry value $8,500 Home value $335,000 Auto loan balance $14,300 Stock Portfolio value $18,500 1967 Ford Mustang value $40,900 Grocery Expenses $7,550 Checking account $3,200 Mortgage Balance $278,600 Property Taxes owed $1,750 Mortgage loan payments made $19,500 Student loan balance $26,200 New York vacation expenses paid $4,200 Auto loan payments paid $6,600 Income taxes paid-to-date $9,100 Clothing/entertainment expense $5,000 Interest earned $400 Insurance premiums paid $5,500
Answer: $80,500
Explanation:
A person's net worth is their Net assets less their liabilities.
Terry's assets include:
Cash on hand, Coin collection, Home value, Jewellery, stock portfolio, 1967 Ford Mustang, Checking account
Terry's liabilities include:
Credit card balance, Auto loan balance, Mortgage balance, Property taxes owed, Student loan balance.
Net worth is therefore:
= (1,500 + 2,350 + 335,000 + 8,500 + 18,500 + 40,900 + 3,200) - (8,600 + 14,300 + 278,600 + 1,750 + 26,200)
= $80,500
A company has the following cash transactions for the period.
Accounts Amounts Cash
received from sale of products to customers 31,500
Çash received from the bank for long-term loan 36,500
Cash paid to purchase factory equipment (41,500)
Cash paid to merchandise suppliers (10,300)
Cash received from the sale of an unused warehouse 11,300
Cash paid to workers (22,300)
Cash paid for advertisement (2,300)
Cash received for sale of services to customers 21,500
Cash paid for dividends to stockholders (4,300)
Assume the balance of cash at the beginning of the period is $3,300.
Required: 1.
Calculate the ending balance of cash. Ending balance
Answer:
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Uncle Fred recently died and left $280,000 to his 45-year-old favorite niece. She immediately spent $80,000 on a town home but decided to invest the balance for her retirement at age 65. What rate of return must she earn on her investment over the next 20 years to permit her to withdraw $75,000 at the end of each year through age 80 if her funds earn 10 percent annually during retirement
Answer:
6.06%
Explanation:
The computation of the rate of return is shown below:
Given that
NPER = 20 years
PV = ($280,000 - $80,000) = $200,000
PMT = $0
FV = $75,000 × PVIFA factor at 10% for 21 years
= $75,000 × 8.6487
= $648,652.50
The following formula should be applied
= RATE(NPER;PMT;-PV;FV;TYPE)
The present value comes in negative
After applying the above formula, the rate of return is 6.06%
During January, Year 2, Geo entered into the following transactions: Paid $728 on account for utilities that were used during December, Year 1. Purchased $488 of supplies for cash. Signed a rental agreement for office space and paid $6,100 in advance for six months of rent beginning February 1, Year 2. Purchased $21,000 of new equipment, signing a promissory note. Provided $32,500 of services. $16,000 was received in cash and $16,500 was provided on credit. Paid workers $7,400 for work done in January. Required: Prepare journal entries for each of the following January activities, and post results to the relevant T-accounts. Compute the ending balance of each T-account. Beginning balances have been entered.
Answer:
Geo
1. Journal Entries:
1. Debit Utilities Payable $728
Credit Cash $728
To record the payment of utilities on account.
2. Debit Supplies $488
Credit Cash $488
To record the purchase of supplies for cash.
3. Debit Prepaid Rent $6,100
Credit Cash $6,100
To record the prepayment of rent for 6 six months.
4. Debit Equipment $21,000
Credit Note Payable $21,000
To record the purchase of equipment on account.
5. Debit Cash $16,000
Debit Accounts Receivable $16,500
Credit Services Revenue $32,500
To record the rendering of services for cash and on account.
6. Debit Salaries Expense $7,400
Credit Cash $7,400
To record the payment of salaries for January.
2. T-accounts:
Utilities Payable
Accounts Titles Debit Credit
Cash $728
Cash
Accounts Titles Debit Credit
Utilities payable $728
Supplies 488
Prepaid Rent 6,100
Service Revenue $16,000
Salaries Expense 7,400
Supplies
Accounts Titles Debit Credit
Cash $488
Prepaid Rent
Accounts Titles Debit Credit
Cash $6,100
Equipment
Accounts Titles Debit Credit
Note Payable $21,000
Note Payable
Accounts Titles Debit Credit
Equipment $21,000
Accounts Receivable
Accounts Titles Debit Credit
Service Revenue $16,500
Services Revenue
Accounts Titles Debit Credit
Cash $16,000
Accounts Receivable 16,500
Salaries Expense
Accounts Titles Debit Credit
Cash $7,400
Explanation:
Since the beginning balances were not supplied, the T-accounts are not balanced at the end of the period. Journal entries were prepared to record the daily business transactions for the first time in the accounting system. The entries showed the accounts to be debited and credited respectively.
Although GDP is a reasonably good measure of a nation's output, it does not necessarily include all transactions and production for that nation. Which of the following scenarios are either not accounted for or measured inaccurately by either the income or the expenditure methods of calculating GDP for the United States?
a. The costs of overfishing and other overly intensive uses of resources
b. Federal government paychecks to soldiers
c. The value Of babysitting services, when the babysitter is paid in cash and the transaction isn't reported to the government
d. The variety of goods available to consumers
When a U.S. company purchases and imports wood from Brazil to use to build new houses within the United States, this purchase increases the ________ component of GDP while also ____________ net exports by the same amount. Therefore, the purchase of wood from Brazil causes_________ in US GDP.
Answer:
a, c , d
investment
decreasing
no effect
Explanation:
Gross domestic product is the total sum of final goods and services produced in an economy within a given period which is usually a year
GDP calculated using the expenditure approach = Consumption spending by households + Investment spending by businesses + Government spending + Net export
Net export = exports – imports
When exports exceed import there is a trade deficit and when import exceeds import, there is a trade surplus.
Items not included in the calculation off GDP includes:
1. services not rendered to oneself
2. Activities not reported to the government
3. illegal activities
4. sale or purchase of used products
5. sale or purchase of intermediate products
6. Externalities
Investment spending by businesses includes purchases made by businesses. So, investment spending increases. Net export decreases because import is a negative function of GDP. The increase and decrease cancel each other out and there would be no change in GDP
Northwest Hospital is a full-service hospital that provides everything from major surgery and emergency room care to outpatient clinics.
Required:
For each of the following costs incurred at Northwest Hospital, indicate whether it would most likely be a direct cost or an indirect cost of the specified cost object
Cost Cost Object Direct cost/indirect Cost
Ex. Catered food served to patients A particular patient
The wages of pediatric nurses The pediatric department
Prescription drugs A particular patient
Heating the hospital The pediatric department
The salary of the head of pediatrics The pediatric department
The salary of the head of pediatrics A particular pediatric patient
Hospital chaplain's salary A particular patient
Lab tests by outside contractor A particular patient
Lab tests by outside contractor A particular department
Answer:
Cost and Cost object / Explanation
a. The wages of pediatric nurses/The pediatric department
The wages of pediatric nurses are the costs and the pediatric department is the cost object and are directly related to each other. Wages is an element of direct cost. The wages of pediatric nurses relating to the pediatric department are Direct costs.
b. Prescription drugs / A particular patient
The prescription drugs are the costs and a particular patient is the cost object. The prescription drugs are direct costs as such costs are directly attributable to the treatment of a particular patient. This cost is incurred in direct proportion to the requirement of the pediatric patient.
c. Heating the hospital / The pediatric department
The cost of heating the hospital is an indirect cost as it is not directly required for the treatment of the pediatric patient. The cost of heating the hospital is to be incurred irrespective of the number of patients. It is a fixed cost and is not related to the level of activity.
d. The salary of the head of pediatrics / The pediatric department
The expenses of pediatric department are dependent upon the number of pediatric patients as it is the principal source of revenue for the department. The salary of the head of pediatrics relating to the pediatric patient is directly related to the number of pediatric patients. Thus, it is a direct cost.
e. The salary of the head of pediatrics / A particular pediatric patient
The treatment of the particular patient involves certain fixed or variable costs. The salary of the head of pediatrics is not directly relevant for the treatment of the particular patient. Thus, it is an indirect cost.
f. Hospital chaplain's salary / A particular patient
Hospital chaplain’s salary relating to a particular patient is not directly related to the patient. It is an indirect cost as it is a period cost or fixed cost. It has to be incurred irrespective of the number of patients.
g. Lab tests by outside contractor / A particular patient
Lab test is for the treatment of a particular patient due to which it is considered as a direct cost for the hospital. Lab tests by outside contractor relating to a particular patient is a direct cost as the nature of the expense is variable.
h. Lab tests by outside contractor / A particular department
This cost is a direct cost as it relates to a particular department and not the entire hospital. Lab tests by outside contractor relating to a particular department is a direct cost as the nature of the expense is variable.
Identifying type and normal balances of accounts Lo C4 For each of the following (1) identify the type of account as an asset, liability equity, revenue, or expense; (2) identify the normal balance of the account, and (3) select debit (Dr or credit (Cr) to identify the kind of entry that would increase the account balance.
Account Type of Account Normal Balance Increase (Dr. or C
a. Land
b. Cash
c. Legal Expense
d. Prepaid Insurance
e. Accounts Receivable
f. Dividends
g. License Fee Revenue
h. Uneaned Revenue
i. Fees Earned
j. Equipment
k. Notes Payable
l. Common Stock
Answer:
a. Land - Asset, Debit, Dr
b. Cash - Asset, Debit, Dr
c. Legal Expense - Expense, Debit, Dr
d. Prepaid Insurance - Asset, Debit, Dr
e. Accounts Receivable - Asset, Debit, Dr
f. Dividends - Equity, Credit, Cr
g. License Fee Revenue - Revenue, Credit, Cr
h. Uneaned Revenue - Liability, Credit, Cr
i. Fees Earned - Revenue, Credit, Cr
j. Equipment - Asset, Debit, Dr
k. Notes Payable - Liability, Credit, Cr
l. Common Stock - Equity, Credit, Cr
Explanation:
Assets, liabilities and equity are the elements of a balance sheet. These 3 elements form the accounting equation which is given as
Assets = Liabilities + Equity
Assets usually have a debit balance while equity and liabilities are usually credit balances. Expenses like assets usually have a debit balance while revenue usually has a credit balance.
1-a. Allocate the lump-sum purchase price to the separate assets purchased. 1-b. Prepare the journal entry to record the purchase. 2. Compute the first-year depreciation expense on the building using the straight-line method, assuming a 15-year life and a $28,000 salvage value. 3. Compute the first-year depreciation expense on the land improvements assuming a five-year life and double-declining-balance depreciation.
Answer:
1. a. Allocated prices
First add the market values = 444,150 + 255,150 + 56,700 + 189,000 = $945,0
00
Building allocated price Land allocated price
= 444,150/ 945,000 * 830,000 = 255,150/945,000 * 830,000
= $390,100 = $224,100
Land improvement allocated price Four vehicles allocate price
= 56,700/945,000 * 830,000 = 189,000/945,000 * 830,000
= $49,800 = $166,000
b. Journal entry
Date Account Details Debit Credit
Jan. 1, 2017 Building $390,100
Land $224,100
Land improvement $49,800
Vehicles $166,000
Cash $830,000
2. Depreciation on building using straight-line method.
= (390,100 - 28,000) / 15
= $24,140
3. Depreciation on land improvements using double declining method.
First do straight line:
= 49,800/ 5 years
= $9,960
Straight line rate of depreciation = 9,960/49,800 = 20%
Double declining will be twice that rate = 40%
Depreciation = 40% * 49,800
= $19,920
The following units of an inventory item were available for sale during the year. Use this information to answer the following questions.
Beginning inventory 10 units at $55
First purchase 25 units at $60
Second purchase 30 units at $65
Third purchase 15 units at $70
The firm uses the periodic inventory system. During the year, 60 units of the item were sold.
The value of ending inventory using FIFO is:________
a. $1,350
b. $1,150
c. $1,375
d. $1,250
Answer:
The value of ending inventory using FIFO is $1,375
Explanation:
Under FIFO the items of inventory purchases earlier will be sold first and the items purchased later will be sold at last.
First, we need to calculate the total available inventory units
Numbers of units available to sale = Beginning Inventory + First purchase + Second purchase + Third purchase = 10 units + 25 units + 30 units + 15 units = 80 units
Now 60 units out of 80 are sold the remaining 20 units ( 80 units - 60 units ) will be in the ending inventory.
As per FIFO 20 units will be values as per the last 20 units purchases which will be as follow
Ending Invetory = ( 15 units x $70 ) + ( (20-15) units x $65 ) = $1,375
England and Scotland both produce scones and sweaters. Suppose that an English worker can produce 50 scones per hour or 1 sweater per hour. Suppose that a Scottish worker can produce 40 scones per hour or 2 sweaters per hour.
If free trade exists between the countries, then each country will benefit if
a. England exports scones, Scotland exports sweaters.
b. England exports sweaters, Scotland exports scones.
c. both countries export scones.
d. given the production possibilities, both countries will not benefit from trade.
Answer:
A
Explanation:
The country with a comparative advantage in the production of a good should export the good
A country has comparative advantage in production if it produces at a lower opportunity cost when compared to other countries.
England
Comparative advantage in the production of scones = 1/50 = 0.02
Comparative advantage in the production of sweater = 50/1 = 50
Scotland
Comparative advantage in the production of scones = 2/40 = 0.05
Comparative advantage in the production of sweater = 40/2 = 20
England has a comparative advantage in the production of scones and should export scones
Scotland has a comparative advantage in the production of sweaters and should export sweaters
Ricky’s Piano Rebuilding Company has been operating for one year. On January 1, at the start of its second year, its income statement accounts had zero balances and its balance sheet account balances were as follows: Cash $ 6,800 Accounts Payable $ 12,600 Accounts Receivable 32,750 Deferred Revenue (deposits) 3,250 Supplies 1,850 Notes Payable (long-term) 45,500 Equipment 14,500 Common Stock 7,500 Land 10,050 Retained Earnings 17,300 Building 20,200 Following are the January transactions: Received a $870 deposit from a customer who wanted her piano rebuilt in February. Rented a part of the building to a bicycle repair shop; $355 rent received for January. Delivered five rebuilt pianos to customers who paid $12,775 in cash. Delivered two rebuilt pianos to customers for $6,400 charged on account. Received $5,300 from customers as payment on their accounts. Received an electric and gas utility bill for $675 for January services to be paid in February. Ordered $945 in supplies. Paid $1,750 on account in January. Paid $11,000 in wages to employees in January for work done this month. Received and paid cash for the supplies in (g). Post the journal entries to the T-accounts. Show the unadjusted beginning and ending balances in the T-accounts
Answer:
Ricky’s Piano Rebuilding Company
Cash
Account Titles Debit Credit
Beginning Balance $ 6,800
Deferred Revenue 870
Rent Revenue 355
Service Revenue 12,775
Accounts Receivable 5,300
Accounts Payable $1,750
Wages Expense 11,000
Balance $13,350
Totals $26,100 $26,100
Accounts Receivable
Account Titles Debit Credit
Beginning Balance $32,750
Service Revenue 6,400
Cash $5,300
Balance $33,850
Totals $39,150 $39,150
Supplies
Account Titles Debit Credit
Beginning Balance $1,850
Equipment
Account Titles Debit Credit
Beginning Balance $14,500
Building
Account Titles Debit Credit
Beginning Balance $20,200
Land
Account Titles Debit Credit
Beginning Balance $10,050
Utilities Expense
Account Titles Debit Credit
Accounts Payable $675
Wages Expense
Account Titles Debit Credit
Cash $11,000
Accounts Payable
Account Titles Debit Credit
Beginning Balance $12,600
Cash $1,750
Balance 10,850
Totals $12,600 $12,600
Deferred Revenue (deposits)
Account Titles Debit Credit
Beginning Balance $3,250
Cash 870
Balance $4,120
Totals $4,120 $4,120
Rent Revenue
Account Titles Debit Credit
Cash $355
Service Revenue
Account Titles Debit Credit
Cash $12,775
Accounts Receivable 6,400
Balance $19,175
Totals $19,175 $19,175
Notes Payable (long-term)
Account Titles Debit Credit
Beginning Balance $45,500
Common Stock
Account Titles Debit Credit
Beginning Balance $7,500
Retained Earnings
Account Titles Debit Credit
Beginning Balance $17,300
Explanation:
a) Data and Calculations:
Beginning Balance Sheet
As of January 1, Year 2:
Cash $ 6,800
Accounts Receivable 32,750
Supplies 1,850
Equipment 14,500
Building 20,200
Land 10,050
Accounts Payable $ 12,600
Deferred Revenue (deposits) 3,250
Notes Payable (long-term) 45,500
Common Stock 7,500
Retained Earnings 17,300
Totals $86,150 $86,150
The journal entries to record the January transactions for Ricky's Piano Rebuilding Company are as follows. The unadjusted beginning and ending balances for the accounts are also shown in Sheet 1.
A journal entry is used to record a business transaction in the accounting records of a business.
A journal entry is usually recorded in the general ledger; alternatively, it may be recorded in a subsidiary ledger that is then summarized and rolled forward into the general ledger. The general ledger is then used to create financial statements for the business.
Here are the journal entries to record the January transactions for Ricky's Piano Rebuilding Company:
Attached is sheet 1.
Unadjusted Beginning and Ending Balances are shown in Sheet 2 attached.
Ending Balances:
The ending balance is the net residual balance in an account. It is usually measured at the end of a reporting period, as part of the closing process. An ending balance is derived by adding up the transaction totals in an account and then adding this total to the beginning balance.
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Shum Manufacturing, which uses the high-low method, makes a product called Kwan. The company incurs three different cost types (A, B, and C) and has a relevant range of operation between 2,500 units and 10,000 units per month. Per-unit costs at two different activity levels for each cost type are presented below. Type A Type B Type C Total 5,000 units $ 4 $ 9 $ 4 $ 17 7,500 units 4 6 3 13 If Shum produces 10,000 units, the total cost would be: Multiple Choice $90,000. $100,000. $110,000. $125,000. None of the answers is correct.
Answer:
$110,000
Explanation:
Variable cost is determined by high-low method:
Type A = $50,000
Type B = 0
Fixed cost determined using high low method is:
Type A = 0
Type B = $60,000
The total cost of high low method is $110,000.