Answer:
The answer is B. 8.4%
Explanation:
To solve this, we will use Capital Asset Pricing Model(CAPM)
Stock’s annual expected return=
Rf + beta(Rm-Rf)
Rf is the risk free rate
Risk premium is (Rm-Rf) - the difference between market interest rate and the risk free rate.
Rf is 3.7%
Risk premium is 5.6%
Beta is 0.84
3.7% + 0.84(5.6%)
3.7% + 4.7%
= 8.4%
On June 10, 20X8, Playoff Corporation acquired 100 percent of Series Company's common stock. Summarized balance sheet data for the two companies immediately after the stock acquisition are as follows:
Playoff Corp. Series Company
Item Book Value Fair Value
Cash $ 15,000 $ 5,000 $ 5,000
Accounts Receivable 30,000 10,000 10,000
Inventory 80,000 20,000 25,000
Buildings & Equipment (net) 120,000 50,000 70,000
Investment in Series Stock 100,000
Total $ 345,000 $ 85,000 $ 110,000
Accounts Payable $ 25,000 $ 3,000 $ 3,000
Bonds Payable 150,000 25,000 25,000
Common Stock 55,000 20,000
Retained Earnings 115,000 37,000
Total $ 345,000 $ 85,000 $ 28,000
Required:
a. Prepare the consolidating entries required to prepare a consolidated balance sheet immediately after the acquisition of Series Company shares. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)
b. Record the excess value (differential) reclassification entry.
Answer:
a. Consolidating Journal Entries:
Description Debit Credit
June 10, 20X8:
Cash $5,000
Accounts receivable 10,000
Inventory 25,000
Building & Equipment 70,000
Unrealized Gain on fair value $25,000
Accounts payable 3,000
Bonds payable 25,000
Investment in Series Stock 100,000
Excess Value (differential) 43,000
To record consolidating entries in the consolidated parent.
Goodwill 43,000
Excess Value (differential) 43,000
To record the reclassification of the excess value as Goodwill on acquisition.
Explanation:
a) Summarized balance sheet data
Playoff Corporation Series Company
Item Book Value Fair Value
Cash $ 15,000 $ 5,000 $ 5,000
Accounts Receivable 30,000 10,000 10,000
Inventory 80,000 20,000 25,000
Buildings & Equipment (net) 120,000 50,000 70,000
Investment in Series Stock 100,000
Total $ 345,000 $ 85,000 $ 110,000
Accounts Payable $ 25,000 $ 3,000 $ 3,000
Bonds Payable 150,000 25,000 25,000
Common Stock 55,000 20,000
Retained Earnings 115,000 37,000
Total $ 345,000 $ 85,000 $ 28,000
b) Consolidated entries are made for assets and liabilities acquired of the subsidiary using fair values. An unrealized gain on fair value account is created to account for the differences in fair values. Any excess or differential after consolidation and above the fair values is regarded as Goodwill arising from the acquisition.
The risk-free rate is 4.5 percent and the market expected return is 10.8 percent. What is the expected return of a stock that has a beta of 1.30
Answer:
Expected return = 12.69%
Explanation:
The capital asset pricing model is a risk-based model for estimating the return on a stock.. Here, the return on equity is dependent on the level of reaction of the the equity to changes in the return on a market portfolio. These changes are captured as systematic risk. Systematic risks are those which affect all economic actors in the market, they include factors like changes in interest rate, inflation, etc. The magnitude by which a stock is affected by systematic risk is measured by beta.
Under CAPM,
E(r)= Rf + β(Rm-Rf)
E(r)- expected return, Rf-risk-free rate , β= Beta, Rm= Return on market.
Using this model, we can work out the value of beta as follows:
β-1.30, Rf- 4.5%, Rm = 10.8%
E(r) = 4.5% + 1.30 × (10.8 - 4.5)%= 12.69
Expected return = 12.69%
Suppose a Roasted Olive restaurant is considering whether to (1) bake bread for its restaurant in-house or (2) buy the bread from a local bakery. The chef estimates that variable costs of making each loaf include $.52 of ingredients, $.24 of variable overhead (electricity to run the oven), and $.70 of direct labor for kneading and forming the loaves. Allocating fixed overhead (depreciation on the kitchen equipment and building) based on direct labor assigns $.96 of fixed overhead per loaf. None of the fixed costs are avoidable. The local bakery would charge $1.75 per loaf.
a. What is the unit cost of making the bread in-house (use absorption costing)?
b. Should Roasted Olive bake the bread in-house or buy from the local bakery? Why?
Answer:
Roasted Olive should bake the bread in-house.
Because, It is cheaper to bake the bread in-house than to purchase as this saves $0.29 per loaf of bread.
Explanation:
Cost of Making
Unit Cost (Absorption Costing) = All Manufacturing Cost (Fixed and Variable)
= $0.52 + $0.24 + $0.70 + $0.96
= $2.42
Cost of Buying from Local Bakery
Note that the fixed costs are note avoidable, meaning that they would be incurred whether or not the bread is made internally or purchased from local Bakery
Cost of Purchase Option per unit :
Purchase Price $1.75
Add Fixed Overhead per loaf $0.96
Total unit cost $2.71
Conclusion :
It is cheaper to bake the bread in-house than to purchase as this saves ( $2.71 - $2.42) $0.29 per loaf of bread.
Therefore, Roasted Olive should bake the bread in-house.
A machine can be purchased for $140,000 and used for five years, yielding the following net incomes. In projecting net incomes, straight-line depreciation is applied, using a five-year life and a zero salvage value.
Year 1 Year 2 Year 3 Year 4 Year 5
Net income $ 9,500 $ 23,500 $ 64,000 $ 35,500 $ 94,000
Compute the machine’s payback period (ignore taxes). (Round your intermediate calculations to 3 decimal places and round payback period answer to 3 decimal places.)
Year Net Income Depreciation Net Cash Flow Cumulative Cash Flow
0 $ (140,000) $ (140,000)
1 $ 9,500
2 23,500
3 64,000
4 35,500 0
5 94,000 0
Payback period =
Answer:
2.554 years
Explanation:
Payback period calculates the amount of time it takes to recover the amount invested in a project from its cumulative cash flows.
to derive cash flow from net income, add depreciation back
Straight line depreciation expense = (Cost of asset - Salvage value) / useful life
$140,000 / 5 = $28,000
depreciation expense each year would be $28,000
cash flow in year 1 = $9500 + $28,000 = $37,500
cash flow in year 2= $23,500 + $28,000 =$51,500
cash flow in year 3 =$64,000 + $28,000 = $92,000
cash flow in year 4 =$35,500 + $28,000 = $63,500
cash flow in year 5 =$94,000 + $28,000 = $122,000
in year 1, the amount recovered = $-140,000 + $37,500 = $-102,500
in year 2, the amount recovered = $-102,500 + $51,500 = $-51,000
in year 3, the amount recovered = $-51,000 + $92,000 = $41,000
the amount invested is recovered in 2 years + 51,000 / 92,000 = 2.554 years
Harmony Company sells handminusknit scarves. Each scarf sells for $ 45. The company pays $ 70 to rent vending space for one day. The variable costs are $ 12 per scarf. How many scarves should the company sell each day in order to break even? (Round your answer up to the nearest whole scarf.)
Answer:
2.12, rounded up to 3
Explanation:
To solve the equation, we first need to set up an equation.
Let x represent the number of scarves. We want one side of the equation to be the amount earned and the other to be the cost
45x is how much they earn since each scarf is $45
70+12x is how much they cost for rent and production
45x=70+12x
Subtract 12x from both sides
33x=70
Divide both sides by 33
x=2.12
It says we should round up so 3 scarves to break even
company's retained earnings have a financing cost associated with them because retained earnings belong to which of the following? a. The common stockholders b. The company's long-term debt holders c. The preferred stockholders d. The company
Answer:
a. The common stockholders.
Explanation:
A company's retained earnings have a financing cost associated with them because retained earnings belong to the common stockholders.
Retained earnings can be defined as the accumulated profits or net income generated by an organization but are not distributed or given as dividends to the stockholders, rather are reinvested in to the business.
Generally, retained earnings are used to pay off debts, used for capital expenditures and working capitals.
Retained earnings represents the total stockholders' equity reinvested back into the company.
The manager of a large commercial building became preoccupied with paperwork and did not inspect the premises as he should have, which resulted in lots of wear and tear from the tenants. The loss of value due to postponing repairs is called
Answer:
deferred repairs
Explanation:
In this scenario, the term being mentioned is known as deferred repairs. As mentioned in the question this term refers to the practice of postponing any and all maintenance activities, such as repairs on real property or personal property all with the hopes of saving costs, meeting budget funding levels, or realign available budget monies. This can also occur by accident due to neglect, such as in this specific scenario. Deferring repairs ultimately leads to higher costs due to worsening conditions.
g If the velocity of money triples, while real GDP and money supply remain unchanged, in the long run, the price level:
Answer:
if velocity triples, then in the long run, price would triple
Explanation:
According to the quantity theory of money
velocity x money supply = output x price
if velocity triples, then in the long run, price would triple
It is March 31, 2014. What is EBay’s latest available actual share count? Please provide your answer without comma separator or decimal (Ex: 23456326563)
Answer:
1267342622
Explanation:
According to the Form 10-Q filed by eBay Inc. with the SEC for the quarter ending March 31, 2014, ...
"As of April 25, 2014, there were 1,267,342,622 shares of the registrant's common stock, $0.001 par value, outstanding."
Small groups of consumers that interact with products or services and give their feedback based on their experiences are known as?
A. Test subjects
B. Focus group
C. Market research audiences
D. Survey takers
Answer:
B. Focus group
Explanation:
Use series of elimination on this one.
Test subjects- No
Market Research Audience- Those are people that watch the tests that you will conduct with your focus group.
Survey takers- Too simple.
Hope that I could help you!
Small groups of consumers that interact with products or services and give their feedback based on their experiences are known as Focus group. Option (b) is correct.
What do you mean by Product?Any good or service you offer to satisfy a customer's need or desire is a product. There are both real and virtual ones. Durable things (such as automobiles, furniture, and computers) and nondurable items are examples of physical products (like food and beverages).
A focus group is a market research technique that involves gathering 6–10 individuals in a space to offer input on a certain commodity, concept, or marketing campaign.
Therefore, Option (b) is correct. Small groups of consumers that interact with products or services and give their feedback based on their experiences are known as Focus group.
Learn more about Product, here;
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fowler credit bank is offering 6.7 percent compounded dailyon its savings accounts. If you deposit $7000 today, how much will you have in the account value in 5 years? value In 10 years? value In 20 years?
Answer and Explanation:
The computation of the future value in each case is shown below:
a. For 5 years, its is
Future value = Present value × (1 + interest rate)^number of years
= $7,000 × (1 + 0.067 ÷ 365 days)^ 5 × 365 days
= $7,000 × 1.397897
= $9,785.28
b. For 10 years, its is
Future value = Present value × (1 + interest rate)^number of years
= $7,000 × (1 + 0.067 ÷ 365 days)^ 10 × 365 days
= $7,000 × 1.954117
= $13,678.82
c. For 20 years, its is
Future value = Present value × (1 + interest rate)^number of years
= $7,000 × (1 + 0.067 ÷ 365 days)^ 20 × 365 days
= $7,000 × 3.818574
= $26,730.02
Braynerd Chemicals sells 40 million shares of stock in an SEO—25 million being primary shares issued by the company and 15 million being secondary shares sold by investors in the company. At the time of the sale, Braynerd's stock was selling at $21.00 per share. If the underwriter charges 5% of the gross proceeds as a fee, how much money was raised in the sale?
Answer: $498.75 million
Explanation:
Of the 40 million shares sold by Braynerd Chemicals, 15 million were sold as secondary shares by investors in the company. The proceeds from these 15 million will therefore not go to the company but to the investors so they are not counted.
Gross total money raised will be;
= 25 million * 21.00
= $525 million
The Underwriter charges 5% of the gross amount as a fee so the Net amount raised will be;
Net Total = 525 * ( 1 - 5%)
Net Total = $498.75 million
In the following example, the proposed debt issue would raise $4,000,000; the interest rate would be 10%. In addition, the EBIT would be $2,000,000. What would be the increase in the Earnings Per Share (EPS) from to current to the proposed structure
Answer:
$1.67
Explanation:
The computation of the increase in earning per share is shown below:
But before that first we need to find out the current and proposed earning
per share
Particulars Current Proposed
Number of shares $400,000 $240,000 (a)
EBIT $2,000,000 $2,000,000
Less:
Interest $400,000
($4,000,000 ×0.10)
EBT $2,000,000 $1,600,000
Less
Taxes $0 $0
Net income $2,000,000 $1,600,000 (b)
EPS $5 $6.67 (a ÷ b)
Increase in EPS
= $6.67 - $5
= $1.67
Heavy Products, Inc. developed standard costs for direct material and direct labor. In 2017, AII estimated the following standard costs for one of their major products, the 10−gallon plastic container. Budgeted quantity Budgeted price Direct materials 0.7 pounds $90 per pound Direct labor 0.05 hours $20 per hour During June, Heavy Products produced and sold 24,000 containers using 1,500 pounds of direct materials at an average cost per pound of $92 and 1,200 direct manufacturing labor−hours at an average wage of $91.25 per hour. The direct manufacturing labor efficiency variance during June is ________.
Answer:
Direct labor time (efficiency) variance= 0
Explanation:
Giving the following information:
Standard:
Direct labor 0.05 hours $20 per hour
Actual:
Heavy Products produced and sold 24,000 containers using 1,200 direct manufacturing labor−hours.
To calculate the direct labor efficiency variance, we need to use the following formula:
Direct labor time (efficiency) variance= (Standard Quantity - Actual Quantity)*standard rate
Direct labor time (efficiency) variance= (0.05*24,000 - 1,200)*20
Direct labor time (efficiency) variance= 0
Panner, Inc., owns 30 percent of Watkins and applies the equity method. During the current year, Panner buys inventory costing $126,000 and then sells it to Watkins for $180,000. At the end of the year, Watkins still holds only $26,400 of merchandise. What amount of gross profit must Panner defer in reporting this investment using the equity method
Answer:
The gross profit that will be deferred is $2376
Explanation:
The cost of inventory = $126000
Selling price of inventory (revenue) = $180000
The remaining inventory with Watkins = $26400
Gross profit percentage = (revenue – cost) / revenue
Gross profit percentage = (180000 – 126000) / 180000 = 0.3 or 30%
Remaining value = $26400 × 30% = 7920
Ownership = 7920 × 30% = $2376
The gross profit that will be deferred is $2376
Discuss the requisite skills a person needs to lead change for a chosen organization. How can the organization’s structure accommodate change?
Explanation:
Organizational changes can create insecurity in workers, often caused by a lack of sufficient information and fear of the unknown.
Therefore, in the case of any organizational change, however small, it must be properly communicated to all employees, then communication is the essential ability of a leader to promote a transition of some practice or procedure in a rational, objective and clear way.
It is ideal that the leader knows how to communicate the changes using various channels, such as e-mail, panel, meetings, and explain in detail that the change will generate positive results for the work and for the organization, in order to make the workers safe and prepared.
It is also essential to provide adequate training in the event of changes in work, technological innovations, etc. The essential thing is that people management is geared towards the improvement of the employee along with the changes that are necessary and happen in every organization.
Analyze Cityscape Hotels Cityscape Hotels has 200 rooms available in a major metropolitan city. The hotel is able to attract business customers during the weekdays and leisure customers during the weekend. However, the leisure customers on weekends occupy fewer rooms than do business customers on weekdays. Thus, Cityscape plans to provide special weekend pricing to attract additional leisure customers. A hotel room is priced at $180 per room night. The cost of a hotel room night includes the following: Cost Per Room Night (at normal occupancy) Housekeeping service $23 Utilities 7 Amenities 3 Hotel depreciation 55 Hotel staff (excluding housekeeping) 42 Total $130 The special weekend price is proposed for $120 per room night. At this price, it is anticipated that average occupancy for the weekend (Friday, Saturday, and Sunday) will increase from 30% to 50% of available rooms. a. What is the contribution margin for a room night under the normal pricing if only the hotel depreciation and hotel staff (excluding housekeeping) are assumed fixed for all occupancy levels
Answer:
$147
Explanation:
For the computation of contribution margin for a room night first we need to find out the variable cost per night which is shown below:-
Variable cost per room night = Housekeeping service + Utilities + Amenities
= $23 + $7 + $3
= $33 per room night
Contribution per room night under normal pricing = Normal price per room night - Variable cost per room night
= $180 - $33
= $147 per room night
Therefore for computing the contribution margin for a room night we simply applied the above formula.
One of the similarities between product focus and mass-customization is: the use of modules. the variety of outputs. the volume of outputs. many departments and many routings. All of these are similarities.
Answer: the variety of outputs
Explanation:
Process focus is a startegy on low volume, high variety. Mass customization is the ability of a company to mass produce products efficiently in order to meet the wants and needs of the customers.
One of the similarities between product focus and mass-customization is the variety of product.
Items Billions of $
Savings deposits 7000
Money market mutual funds 700
M2 13700
Checking deposits 2250
Small time deposits 750
Required:
Calculate the amount of currency in billions of dollars in the economy from the given information. Assume zero traveler’s checks for answering this question.
M1: 4750
2500 billion in the economy
Estes Park, Inc., has declared a dividend of $6.70 per share. Suppose capital gains are not taxed, but dividends are taxed at 30 percent. New IRS regulations require that taxes be withheld at the time the dividend is paid. The company's stock sells for $118 per share, and the stock is about to go ex-dividend. What do you think the ex-dividend price will be
Answer:
$113.31
Explanation:
Estees park has declared a dividend of $6.70 per share
The dividend is taxed at 30%
= 30/100
= 0.3
The company stock sells for $118 per share
The first step is to calculate the after tax dividend
After tax dividend= 6.70(1-0.3)
= 6.70×0.7
= $4.69
Therefore, the ex-dividend price can be calculated as follows
Ex-dividend price= $118-$4.69
= $113.31
Hence the ex-dividend price is $113.31
Hillside issues $2,000,000 of 6%, 15-year bonds dated January 1, 2017, that pay interest semiannually on June 30 and December 31. The bonds are issued at a price of $2,447,990.Required:a. Prepare the January 1, 2013, journal entry to record the bonds issuance.b. Prepare the first two years of an amortization table using the straight-line method.c. Prepare the journal entries to record the first two interest payments.
Answer:
a.
Cash $2,447,990 (debit)
Investment in Bonds $2,447,990 (credit)
b.
Amortization Table for the first two years will be :
2013
Capital $22.307
Interest $97.693
Balance $2,425,683
2014
Capital $34,472
Interest $145,528
Balance $2,402,475
c.
First Payment : June 30, 2013
Interest Expense $48,957 (debit)
Investment in Bonds $11,043 (debit)
Cash $60,000 (credit)
Second Payment : December 31, 2013
Interest Expense $48,736 (debit)
Investment in Bonds $11,264 (debit)
Cash $60,000 (credit)
Explanation:
On the day of issuance of the Bonds, the entries will be :
Cash $2,447,990 (debit)
Investment in Bonds $2,447,990 (credit)
Use the data given to prepare an amortization schedule
Hint : First find the YTM as follows :
n = 15 × 2 = 30
FV = - $2,000,000
PV = $2,447,990
PMT = ($2,000,000 × 6%)/2 = $60,000
P/ yr = 2
YTM = ? 3.998
Using a financial calculator, the YTM is 3.998 or 4 %
Amortization Table for the first two years will be :
2013
Capital $22.307
Interest $97.693
Balance $2,425,683
2014
Capital $34,472
Interest $145,528
Balance $2,402,475
Journal Entries for the Payment of Interest :
First Payment : June 30, 2013
Interest Expense $48,957 (debit)
Investment in Bonds $11,043 (debit)
Cash $60,000 (credit)
Second Payment : December 31, 2013
Interest Expense $48,736 (debit)
Investment in Bonds $11,264 (debit)
Cash $60,000 (credit)
On January 1, 20X7, Pisa Company acquired 80 percent of Siena Company by purchasing 40,000 shares of Siena's common stock. There was no differential related to this transaction. The noncontrolling interest had a fair value equal to 20 percent of book value. The book value of Siena on December 31, 20X7 was as follows:
On January 1, 20X8, Pisa purchased an additional 12,500 shares directly from Siena for $25 per share. The elimination entry to prepare the consolidated financial statements on December 31, 20X7 would include one of the following answers:
a. credit to common stock for $625,000
b. debit to retained earnings for $37,500
c. credit to Investment in Siena Co. for $976,500
d. credit to NCI in the net assets of Siena Co. for $232,500
Answer:
a. credit to common stock for $625,000
Explanation:
When a company acquires more than 75% of holding in any company along with significant control then it is known as subsidiary. The company Is then able to record investment in subsidiary as debit balance in its statement of financial position. The cash consideration paid for acquiring the stock is recorded as investment in subsidiary. When the Pisa Company acquired Siena Company it has recorded the investment in Siena but when additional share are purchased Pisa will raise its stock capital.
Which of the following is one of the three variables proposed by a basic OB model which refers to actions that individuals, groups, and organizations engage in as a result of inputs?
a. Processes
b. Scrutinization
c. Planning
d. Association
e. Evaluation
Answer:
a. Processes
Explanation:
The variable that is being described as part of the basic OB model is known as Processes. Like mentioned, these are actions that individuals, groups, and organizations all engage in as a result of inputs, and that leads to certain outcomes. When dealing at an individual level, these processes include a wide range of actions including emotions, moods, motivation, perception, and decision making.
Consider the economies of Hermes and Gobbledigook, both of which produce gobs of goo using only tools and workers. Suppose that, during the course of 20 years, the level of physical capital per worker rises by 4 tools per worker in each economy, but the size of each labor force remains the same. Complete the following tables by entering productivity (in terms of output per worker) for each economy in 2016 and 2036.
Year Hermes
Physical Capital Labor Force Output Productivity
(Tools per worker) (Workers) (Gobs of goo) (Gobs per worker)
2016 11 30 3,000
2036 15 30 3,600
Year Gobbledigook
Physical Capital Labor Force Output Productivity
(Tools per worker) (Workers) (Gobs of goo) (Gobs per worker)
2016 8 30 2,400
2036 12 30 3,600
Initially, the number of tools per worker was higher in Hermes than in Gobbledigook. From 2016 to 2036, capital per worker rises by 4 units in each country. The 4-unit change in capital per worker causes productivity in Hermes to rise by a_______ amount than productivity in Gobbledigook. This illustrates the effect_______which makes it______for countries with low output to catch up to those with higher output.
Answer:
Hermes
Productivity (Gobs per worker)
2016 100
2036 120
Gobbledigook
Productivity
(Gobs per worker)
2016 80
2036 120
Initially, the number of tools per worker was higher in Hermes than in Gobbledigook. From 2016 to 2036, capital per worker rises by 4 units in each country. The 4-unit change in capital per worker causes productivity in Hermes to rise by a SMALLER amount than productivity in Gobbledigook. This illustrates the effect OF CATCH UP which makes it POSSIBLE for countries with low output to catch up to those with higher output.
Explanation:
Hermes
Year Physical Capital Labor Force Output Productivity
(Tools per worker) (Workers) (Gobs of goo) (Gobs per worker)
2016 11 30 3,000 3,000/30=100
2036 15 30 3,600 3,600/30=120
Gobbledigook
Year Physical Capital Labor Force Output Productivity
(Tools per worker) (Workers) (Gobs of goo) (Gobs per worker)
2016 8 30 2,400 2,400/30=80
2036 12 30 3,600 3,600/30=120
Initially, the number of tools per worker was higher in Hermes than in Gobbledigook. From 2016 to 2036, capital per worker rises by 4 units in each country. The 4-unit change in capital per worker causes productivity in Hermes to rise by a SMALLER amount than productivity in Gobbledigook. This illustrates the effect of CATCH UP which makes it POSSIBLE for countries with low output to catch up to those with higher output.
Journalize Payroll Tax The payroll register of Patel Engineering Co. indicates $2,880 of social security withheld and $720 of Medicare tax withheld on total salaries of $48,000 for the period. Earnings of $14,400 are subject to state and federal unemployment compensation taxes at the federal rate of 0.8% and the state rate of 5.4%. Provide the journal entry to record the payroll tax expense for the period. If an amount box does not require an entry, leave it blank. Round to two decimal places. Payroll Tax Expense Social Security Tax Payable 2,880 Medicare Tax Payable 720 State Unemployment Tax Payable Federal Unemployment Tax Payable
Answer and Explanation:
The Journal entry is shown below:-
Payroll Tax Expense Dr, $4,493
To Social Security Taxes Payable $2,880
To Medicare Taxes Payable $720
To State Unemployment Tax Payable $778 ($14,400 × 5.4%)
To Federal Unemployment Tax Payable $115 ($14,400 × 0.8%)
(Being payroll tax expense for the period is recorded)
Here we debited the payroll tax expenses as it increased the expenses and we credited the Social Security Taxes Payable, Medicare Taxes Payable, State Unemployment Tax Payable, Federal Unemployment Tax Payable as it increased the liabilities
A person presently owes $5,000 on a credit card bill. As a penalty, he/she has to pay a uniform amount of $700 per month for a year. The rate of return per month that the credit card company make in a year is closest to: g
Answer:
The company get $283.33 return per monthExplanation:
Given that the person is to pay $700 per month for one year
Hence after one year elapse he will pay a total of
$700*12= $8,400
The returns the credit card company will get after one year is
yearly return= $8,400-$5,000= $3,400.
The rate of return per month= $3,400/12= $283.33.
The payroll register of Patel Engineering Co. indicates $2,640 of social security withheld and $660 of Medicare tax withheld on total salaries of $44,000 for the period. Federal withholding for the period totaled $7,920. Retirement savings withheld from employee paychecks were $2700 for the period.
Provide the journal entry for the period's payroll. If an amount box does not require an entry, leave it blank.
Salaries Expense 44,000
Social Security Tax Payable 2,640
Medicare Tax Payable 660
Employees Federal Income Tax Payable
Retirement Savings Deductions Payable
Salaries Payable
Answer:
DR Salary Expense $44,000
CR Social Security Taxes Payable $2,640
CR Medicare Taxes Payable $660
CR Federal Withholding Taxes Payable $7,920
CR Retirement Contribution Payable $2,700
CR Salaries Payable $30,080
(To record Salaries expense and payables)
A pension plan that promises employees a fixed annual pension benefit, based on years of service and compensation, is called a(n)The journal entry a company uses to record accrued vacation privileges for its employees at the end of the year is
Answer:
1. Defined Benefit Plan
2. debit Vacation Pay Expense; credit Vacation Pay Payable
Explanation:
1. With a Defined Benefit Plan, employers promise to pay employees a pension based on factors like years of service and salary. The plan will be sponsored by the employer and will be managed by the company.
2. As the Vacation is an expense, it will need to be debited to an expense account being the Vacation Pay Expense account. It will also be credited to the Vacation Pay Payable to reflect that this is a liability that the company must fulfil.
You are bearish on Telecom and decide to sell short 100 shares at the current market price of $50 per share. a. How much in cash or securities must you put into your brokerage account if the broker's initial margin requirement is 50% of the value of the short position?
Answer:
We will provide 2,500 dollars in cash or securities to realize the transaction
Explanation:
100 shares x $50 per share = $ 5,000
The total amount of the operation is for 5,000 dollars. we are requiresd to provide a safety of 50% of this value
5,000 dollars x 50% margin requirement = 2,500 dollars
You would expect a bond of the U.S. government to pay higher interestrate as compared to a bond of an Eastern European government.
A. True
B. False
Answer: False
Explanation:
Bond interest is determined in part by the riskiness of the Issuer of the bond. The United States is one of the most trust-worthy countries in the world and this is reflected by the US T-bills being considered a risk-free asset the world over.
The less risky an asset is, the less interest it has to pay as it does not have to compensate its investors for more added risk. A United States Bond is definitely safer than an Eastern European Government bond who are not as developed as the Western Europeans speaking in an unbiased manner. Therefore the US Bond will pay a lower interest relative to a bond of an Eastern European government.