Answer:
a-1. Variance = Beta² * Standard deviation of market² + Residual standard deviation²
Beta increases by 0.2
= 1.4 + 0.2
= 1.6
Total variance
= 1.6² * 35%² + 45%²
= 51.61%
a-2. If residual value increases by 7.54% it becomes:
= 45 + 7.54
= 52.54%
Total variance
= 1.4² * 35%² + 52.54%²
= 51.61%
b. ii. Increase of .20 in beta will have a greater impact.
Portfolio standard deviation helps ascertain the effects of systematic risk on the portfolio. Beta is used to represent that systematic risk. A change in Beta will therefore affect standard deviation more because standard deviation shows the impact of beta as a representation of systematic risk.
Here is the income statement for Teal Mountain Inc.
TEAL MOUNTAIN INC.
Income Statement
For the Year Ended December 31, 2017
Sales revenue $402,900
Cost of goods sold 256,700
Gross profit 146,200
Expenses (including $ 10,200 interest and $29,600 income taxes) 89,200
Net income $57,000
Additional information:
1. Common stock outstanding January 1, 2017, was 30,000 shares, and 39,000 shares were outstanding at December 31, 2017.
2. The market price of Teal Mountain stock was $15 in 2017.
3. Cash dividends of $24,700 were paid, $ 6,500 of which were to preferred stockholders.
Compute the following measures for 2017.
(a) Earnings per share $_____
(b) Price-earnings ratio _____ times
(c) Payout ratio _____ %
(d) Times interest earned _____ times
Answer:
See below
Explanation:
a. The earnings per share would be calculated as;
Earnings per share = (Net income - Preferred stock dividend) / Average number of common shares outstanding
But
Weighted average number of common shares = (Number of common shares outstanding in the beginning + Number of common shares outstanding at then end) / 2
= (30,000 + 39,000) / 2
= 34,500
Preferred stock dividend = 6,500
Therefore,
Earnings per share = ($57,000 - $6,500) / 34,500
= $50,500 / 34,500
= $1.46
b. Price earnings ratio
= Market price per share / Earning per share
= $15 / $1.46
= 10.27 times
c. The payout ratio
= (Total cash dividends - Preferred stock dividends) / Net income
= ($24,700 - $6,500) / $57,000
= $18,200 / $57,00)
= 31.93%
d. Times interest
= ( Net income + Interest expense + Tax expense) / Interest expense.
= $57,000 + $10,200 + $29,600) / $10,200
= $96,800 / $10,200
= 9.49 times
Chess Top uses the perpetual inventory system. On May 1st, the beginning inventory consisted of 480 units that cost $65 each. During the month, the company made two purchases: May 3rd, 720 units at $68 each May 20th, 360 units at $70 each. Chess Top also sold 800 units on May 10th , Using the LIFO method, what is the amount of cost of goods sold for themonth
Answer:
the amount of the cost of goods sold is $55,120
Explanation:
The computation of the cost of goods sold for the month is shown below:
Since 800 units were sold out of which 360 units would sold at $70 and the remaining units i.e. 440 units would be sold at $68
= 360 units × $70 + 440 units × $68
= $25,200 + $29,920
= $55,120
Hence, the amount of the cost of goods sold is $55,120
In 2019, Ivanhoe Company had a break-even point of $385,000 based on a selling price of $7 per unit and fixed costs of $115,500. In 2020, the selling price and the variable costs per unit did not change, but the break-even point increased to $454,000.
Required:
a. Compute the variable costs per unit and the contribution margin ratio for 2019.
b. Compute the increase in fixed costs for 2020.
Answer:
Results are below.
Explanation:
Giving the following information:
2019:
Break-even point= $385,000
Selling price= $7
Fixed costs= $115,500
2020:
Break-even point= $454,000
First, we need to calculate the contribution margin ratio for 2019. We will use the following formula:
Break-even point (dollars)= fixed costs/ contribution margin ratio
385,000 = 115,500 / contribution margin ratio
contribution margin ratio*385,000 = 115,500
contribution margin ratio= 0.3
Now, we can determine the unitary variable cost:
contribution margin ratio= unitary contribution margin / selling price
0.3 = (7 - unitary variable cost) / 7
2.1 = 7 - unitary variable cost
unitary variable cost= $4.9
Finally, we can determine the fixed costs for 2020 and the net increase with 2019:
Break-even point (dollars)= fixed costs/ contribution margin ratio
454,000= fixed costs / 0.3
$136,200 = fixed costs
Increase= 136,200 - 115,500= $20,700
What is an easement? What is it called when an easement is obtained against the consent of the landowner? What type of easement can be created by two adjacent landowners where one of them is “landlocked” by the other landowner?
Answer:
1. An easement is the right given to a person by law to utilize a particular part of another person's land.
2. When an easement is obtained against the consent of the landowner it is known as Prescriptive easement.
3. An easement that is created by two adjacent landowners where one is landlocked by the other landowner is called Easement appurtenant.
Explanation:
An easement is the lawful right of a person to use another person's property. Ingress, egress, and drainage are common reasons why an easement might be needed. When a piece of land does not have access to a roadway, then an easement might be required.
Prescriptive easement occurs when a land has been used by another person who is not the legal owner for up to twenty years without the consent/knowledge of the original owner of the land.
Easement appurtenant occurs for example when a person cannot access his own land with passing through another person's land. An easement by necessity can be created in such situations to solve the problem.
Zeus, Inc. produces a product that has a variable cost of $9.50 per unit. The company's fixed costs are $40,000. The product sells for $12.00 a unit and the company desires to earn a $20,000 profit. What is the volume of sales in units required to achieve the target profit? (Do not round intermediate calculations.)
Answer:
Break-even point in units= 26,087
Explanation:
Giving the following information:
Selling price= $12
Unitary variable cost= 9.7
Fixed costs= $40,000
Desired profit= $20,000
To calculate the number of units to be sold, we need to use the following formula:
Break-even point in units= (fixed costs + desired profit) / contribution margin per unit
Break-even point in units= (40,000 + 20,000) / (12 - 9.7)
Break-even point in units= 26,087
Alfredo Inc. reports net income of $248,000 for the year ended December 31. It also reports $95,500 depreciation expense and a $5,900 gain on the sale of equipment. Its comparative balance sheet reveals a $39,100 decrease in accounts receivable, a $17,550 increase in accounts payable, and a $13,700 decrease in wages payable. Calculate the cash provided (used) in operating activities using the indirect method.
Answer:
$380,550
Explanation:
Cash flows from operating activities:
Net income $248,000
Adjustments to net income:
Depreciation expense $95,500
Gain on sale of equipment ($5,900)
Decrease in accounts rec. $39,100
Increase in accounts pay. $17,550
Decrease in wages payable ($13,700) $132,550
Net cash flow from operating activities $380,550
MECCS Inc. stock paid its annual dividends of $4.90 per share yesterday. The dividend is expected to decrease at a constant rate of 2.50 percent per year indefinitely. Investors require a rate of return of 8.60 percent on the stock. How much should one share of the stock be priced today
Answer: $43
Explanation:
The current stock price will be calculated as:
= Do(1 - g) / (Ke + g)
where,
Do = $ 4.90
g = 2.50%
Ke = 8.60%
Po = [4.90 - (1 - 0.025)] / [0.086 + 0.025]
Po = 4.7775 / 0.111
Po = $43
The price of one share of the stock today will be $43
cgehhE10-12 The following are selected 2014 transactions of Pedigo Corporation. Jan. 1 Purchased a small company and recorded goodwill of $150,000. Its useful life is indefi nite. May 1 Purchased for $75,000 a patent with an estimated useful life of 5 years and a legal life of 20 years. Instructions Prepare necessary adjusting entries at December 31 to record amortization required by the events above. E10-13 Gill Company, organized
Setrakian Industries needs to raise $48.5 million to fund a new project. The company will sell bonds that have a coupon rate of 5.56 percent paid semiannually and that mature in 10 years. The bonds will be sold at an initial YTM of 6.13 percent and have a par value of $2,000. How many bonds must be sold to raise the necessary funds
Answer:
25,317 unit
Explanation:
Current price of bond = PV(Rate, Nper, Pmt, Fv)
Current price of bond = PV(6.13%/2, 10*2 ,5.56%/2*2000, 2000)
Current price of bond = $1,915.71
Number of bonds to issue = $48,500,000 / $1,915.71
Number of bonds to issue = 25316.98430
Number of bonds to issue = 25,317 unit
Bramble, Inc. has 11200 shares of 3%, $100 par value, noncumulative preferred stock and 224000 shares of $1 par value common stock outstanding at December 31, 2020. There were no dividends declared in 2019. The board of directors declares and pays a $65700 dividend in 2020. What is the amount of dividends received by the common stockholders in 2020?
Answer:
See
Explanation:
Total dividends = 65,700
Common stock outstanding = 224,000 shares
Preferred dividend
= Number of shares × Par value 3%
= 11,200 × 100 × 3%
= $33,600
Dividends received by common stockholders
= (65,700 × 2) - (33,600 × 3)
= 131,400 - 100,800
= 30,600
In horizontal analysis the percent change is computed by: Multiple Choice Subtracting the analysis period amount from the base period amount. Subtracting the base period amount from the analysis period amount. Subtracting the analysis period amount from the base period amount, dividing the result by the base period amount, then multiplying that amount by 100. Subtracting the base period amount from the analysis period amount, dividing the result by the base period amount, then multiplying that amount by 100. Subtracting the base period amount from the analysis amount, then dividing the result by the analysis period amount.
Answer:
Subtracting the base period amount from the analysis period amount, dividing the result by the base period amount, and then multiplying that amount by 100.
Explanation:
Financial accounting is an accounting technique used for analyzing, summarizing and reporting of financial transactions like sales costs, purchase costs, payables and receivables of an organization using standard financial guidelines such as Generally Accepted Accounting Principles (GAAP) and financial accounting standards board (FASB). It can be defined as the field of accounting involving specific processes such as recording, summarizing, analysis and reporting of financial transactions with respect to business operations over a specific period of time. Financial experts or accountant uses either the cash basis or accrual basis of accounting.
There are two (2) main methods used in financial accounting for analyzing financial statements and these are;
I. Vertical analysis.
II. Horizontal analysis.
Horizontal analysis compares historical financial informations over a number of reporting periods.
In horizontal analysis the percent change is computed by subtracting the base period amount from the analysis period amount, dividing the result by the base period amount, and then multiplying that amount by 100.
The answer is D) Subtracting the base period amount from the analysis period amount, dividing the result by the base period amount, then multiplying that amount by 100.
Horizontal analysis, also known as trend analysis, is a financial analysis technique that compares financial data from different periods to determine the percentage change over time. To compute the percentage change, the analysis period amount is subtracted from the base period amount, then the result is divided by the base period amount. The quotient is then multiplied by 100 to obtain the percentage change.
The formula for horizontal analysis can be written as:
((Analysis period amount - Base period amount) / Base period amount) x 100
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Robert, a highly experienced software engineer, joins a new company as the manager of a large group of employees. In his first meeting with the employees of the new organization, he explains his expectations on the behavior of employees. He also lets the employees know that noncompliance with his norms will result in withholding the rewards that they receive. Which of the following types of power is Robert using here?
a. reward
b. transformational
c. referent
d. coercive
Answer:
reward, maybe even referent
Explanation:
Robert is using rewarding to let people know that they need to work or they won't be rewarded.
how does understanding culture important in business?
Apple Inc. just paid a dividend of $3 per share. You expect that Apple's dividend will increase at the rate of 10% per year for the next 10 years. After that, you expect that Apple Inc. will increase its dividend at the rate of 3% per year forever. The required rate of return for Apple is 20%. What is the price of Apple just after the current dividend was paid?
Answer:
The price of Apple just after the current dividend was paid is $26.79.
Explanation:
Note: See the attached file for the calculation of present values for year 1 to 10 dividends.
From the attached excel file, we have:
Previous year dividend in year 1 = Dividend just paid = $3
Total of dividends from year 1 to year 10 = $19.17617169980840
Year 10 dividend = $7.781227380
Therefore, we have:
Year 11 dividend = Year 10 dividend * (100% + Perpetual dividend growth rate) = $7.781227380 * (100% + 3%) = $8.0146642014
Price at year 10 = Year 11 dividend / (Rate of return - Perpetual dividend growth rate) = $8.0146642014 / (20% - 3%) = $47.1450835376471
PV of price at year 10 = Price at year 10 / (100% + Required return)^Number of years = $47.1450835376471 / (100% + 20%)^10 = $7.61419419713817
Price of Apple = Total of dividends from year 1 to year 8 + PV of price at year 10 = $19.17617169980840 + $7.61419419713817 = $26.79
Caroli, who was 17 years old, signed an agreement to buy a used computer from Egan for $150. While Caroli was on his way to pick up the equipment, Egan got an offer for $250 from someone else. When CAroli arrived with the money to complete the transaction, Egan told him he was unwilling to go through with the agreement because Caroli was a mior.
a. Can Egan cancel the contract?
b. Is this a voidable contract?
c. Can Caroli cancel the contract?
d. If Egan sells the computer to Caroli, can Caroli later return the computer?
Answer:
See below
Explanation:
a. Can Egan cancel the contract.
No. In the United states, adults who contract with minor are bound to the contract. Only the minor may disaffirm the contract.
b. Is this a voidable contract.
Yes it is. It is voidable in the scenes that it can be affirmed or rejected by one of the parties to the contract, in this case the minor - Caroli
c. Can Caroli cancel the contract.
Yes, he can. This is because he has not attained the statutory age - 18 years, hence a minor. This may however be challenged if it is the minor partial performs that term of the contract and its shown to understand that terms
d. If Egan sells the computer to Caroli, can Caroli later return the computer.
Yes. In this case, it shows that the minor - Caroli has disaffirm the contract, hence must return the computer to Egan.
Economic costs of unemployment
Consider a hypothetical economy in which potential output is $200 billion and the natural rate of unemployment is 4%. The current unemployment rate is 5.6%. Since the unemployment rate is greater than the natural rate of unemployment, the economy's actual GDP will be______ potential GDP.
According to Okun's law, the economy's GDP gap is billion. The burden of an increase in the economy-wide unemployment rate can differ widely across regions and across different groups of people. For example, in the United States, the jobless rate among workers with only a high school diploma has tended to be________ than the jobless rate among college graduates.
Answer: less than; higher
Explanation:
Since the unemployment rate is greater than the natural rate of unemployment, the economy's actual GDP will be less than potential GDP.
...the jobless rate among workers with only a high school diploma has tended to be higher than the jobless rate among college graduates.
When the economy is at its natural rate of unemployment, it means that the economy is producing at potential GDP. If however, the unemployment rate is more than this natural rate, it means that the economy is facing a downturn which is causing companies to not employ as much labor. Actual GDP is therefore lower than Potential GDP.
Workers with more specialized skills will usually feel the impact of an increase in unemployment less those with more general skills will. For this reason, college graduates will see less unemployment than those with only a high school diploma.
Sage Company began operations at the beginning of 2021. The following information pertains to this company.
1. Pretax financial income for 2021 is $87,000.
2. The tax rate enacted for 2021 and future years is 20%.
3. Differences between the 2021 income statement and tax return are listed below:
a. Warranty expense accrued for financial reporting purposes amounts to $6,600. Warranty deductions per the tax return amount to $1,900.
b. Gross profit on construction contracts using the percentage-of-completion method per books amounts to $84,500. Gross profit on construction contracts for tax purposes amounts to $66,300.
c. Depreciation of property, plant, and equipment for financial reporting purposes amounts to $57,900. Depreciation of these assets amounts to $84,300 for the tax return.
d. A $3,200 fine paid for violation of pollution laws was deducted in computing pretax financial income.
e. Interest revenue recognized on an investment in tax-exempt municipal bonds amounts to $1,500.
4. Taxable income is expected for the next few years. (Assume (a) is short-term in nature; assume (b) and (c) are long-term in nature.)
Required:
a. Compute taxable income for 2021.
b. Compute the deferred taxes at December 31, 2021, that relate to the temporary differences described above.
c. Prepare the journal entry to record income tax expense
Answer:
Answer is explained in the explanation section below.
Explanation:
Solution:
a. Taxable income for 2021.
Sage Company:
Computation of Taxable income and income tax for 2021
Pretax financial Income = $87000
Permanent differences:
Fine for Pollution = $3200
Interest revenue on municipal bonds = -$1500
Temporary differences:
Less: Excess of depreciation as per tax over books = -$26400
Add: Warranty expense in books higher than as per tax = $4700
Less: Gross profit as per books higher than as per tax on construction contracts = -$18200
Taxable Income = $48800
Income Tax (20%) = $9760
b. Deferred Taxes:
Deferred tax assets = $4700*20% = $940
Deferred tax liability = ($26,400 + $18,200) * 20% = $8920
c. Note: Journal Entries are attached in the attachment below.
Henry Ford is known for the introduction of the assembly line and the Model T. As his manufacturing effort expanded, however, he also adopted an attitude that came to be known as Fordism. What was one of the central tenets in his system?
Answer:
Fordism, a specific stage of economic development in the 20th century. Fordism is a term widely used to describe (1) the system of mass production that was pioneered in the early 20th century by the Ford Motor Company or (2) the typical postwar mode of economic growth and its associated political and social order in advanced capitalism.
Explanation:
Good luck
Pina Football Shop began operations on January 2, 2017. The following stock record card for footballs was taken from the records at the end of the year.
Date Voucher Terms Units Received Unit Invoice Cost Gross Invoice
Amount
1/15 10624 Net 30 67 $28 $1,876
3/15 11437 1/5, net 30 82 23 1,886
6/20 21332 1/10, net 30 107 21 2,247
9/1 227644 1/10, net 30 101 17 1,717
11/24 31269 1/10, net 30 93 16 1,488
Totals 450 $9,214
A physical inventory on December 31, 2017, reveals that 111 footballs were in stock. The bookkeeper informs you that all the discounts were taken. Assume that Pina Football Shop uses the invoice price less discount for recording purchases.
(a) Compute the December 31, 2017, inventory using the FIFO method.
B.) Compute the 2017 cost of goods sold using the LIFO method.
Answer:
A. FIFO $1,794
B. LIFO $6,326
Explanation:
(a) Computation for the December 31, 2017, inventory using the FIFO method
Value of closing Stock
93 Footballs purchased in November = 93 * $16 93 Footballs purchased in November= $1,488
18 Footballs purchased in September= (111-93)* $17
18 Footballs purchased in September= 18* $17
18 Footballs purchased in September= $306
Total Value as on 31 December, 2017 =$1,488+$396
Total Value as on 31 December, 2017=$1,794
Therefore the December 31, 2017, inventory using the FIFO method will be $1,794
B.) Computation for the 2017 cost of goods sold using the LIFO method.
First step is to calculate the Value of closing Stock
67 Footballs purchased in January= 67 * $28
67 Footballs purchased in January = $1,876
44 Footballs purchsed in March= (111-67)* $23
44 Footballs purchsed in March=44*$23
44 Footballs purchsed in March= $1,012
Total Value as on 31 December, 2017=$1,876+$1,012
Total Value as on 31 December, 2017 = $2,888
Now let calculate the Cost of goods sold using this formula
Cost of goods sold
= Gross Invoice amount - Value of closing stock
Let plug in the formula
Cost of goods sold= $9,214 - $2,888
Cost of goods sold= $6,326
Therefore the 2017 cost of goods sold using the LIFO method will be $6,326
Harry was on the phone negotiating the terms of a contract for the purchase of ball caps containing his university's logo with All Logos, LLC. They had agreed on the quantity (1200) and price ($2/cap), but could not agree on the delivery date, so Harry hung up. A few days later, Harry received an invoice in the mail, billing him for the caps, and advising that they would be shipped in 30 days' time. Under the UCC, has a contract been formed?
Answer: d. No, a contract has not been formed, since Harry has not signed a contract for the goods.
Explanation:
The Uniform Commercial Code (UCC) utilizes the Statute of Frauds which states that contracts for goods worth over $500 in value are to be signed for them to be valid.
The goods here are worth:
= 1,200 * 2
= $2,400
This contract is well worth over the $500 required for the contract to be signed which means that as Harry did not sign the contract, there is no contract.
Jamarcus was his collegiate chapter's delegate at a national conference of a professional business fraternity, Phi Chi Theta, in which he is a member. When the business meeting was conducted, parliamentary procedure was used, and Jamarcus was not familiar with this. Thus, he looked to the others to learn how he should behave in this situation. What type of influence does this reference group exhibit? procedural transient substantive informational legal
Answer:
informational
Explanation:
Informational influence is defined as a new concept or information that occurs within a group and leads to change in group member attitudes, behaviour, and belief.
In the given scenario parliamentary procedure was used in a business meeting and Jamarcus was not familiar with this.
He looked to other group members to learn how he should behave in this situation.
In this case the group is providing information of proper way of behaving during the meeting.
Dream, Inc., has debt outstanding with a face value of $6 million. The value of the firm if it were entirely financed by equity would be $18.25 million. The company also has 440,000 shares of stock outstanding that sell at a price of $32 per share. The corporate tax rate is 35 percent. What is the decrease in the value of the company due to expected bankruptcy costs? (Enter your answer in dollars, not millions of dollars, e.g., 1,234,567. Do not round intermediate calculations and round your answer to the nearest whole number, e.g., 32.)
Answer:
$955,000
Explanation:
According to the Modigliani and Miller theory, we can calculate the value of the levered firm which is denoted by;
VI = Vu + tB
VI = 18.25million + 0.35(6million)
VI = 20.35 million
We can also calculate the total market value of the firm Vt by adding the debt (B) with the total equity (SV)
Vt = B + SV
Vt = 5 million + 440,000(32)
Vt = 5 million + 14.80 million
Vt = 19.80 million
Then the decrease in the value of the company due to bankruptcy is
Vb = VI - Vt
Vb = 20.35 million - 19.80 million
VB = $955,000
8. Zelda owns a 50% general interest in YZ Partnership. At the beginning of the current year, the adjusted basis in her partnership interest was $95,000. In the current year, YZ generated a $110,000 business loss, earned $15,000 dividend and interest income on its investments and recognized a $7,000 capital gain. YZ also made a $5,000 distribution to Zelda. Compute Zelda’s adjusted basis in the partnership at the end of the year.
Answer:
$52,500
Explanation:
Computation for Zelda’s adjusted basis in the partnership at the end of the year.
Zelda’s adjusted basis=$95,000-(50%*$110,000)+(50%*$15,000)+$5,000
Zelda’s adjusted basis=$95,000-$55,000+$7,500+$5,000
Zelda’s adjusted basis= $52,500
Based on the information given we assumed 50% because Zelda is a 50% partner.
Therefore Zelda’s adjusted basis in the partnership at the end of the year will be $52,500
The following note transactions occurred during the year for Towell Company: Nov. 10 Towell issued a 90-day, 9% note payable for $8,000 to Hyatt Company for merchandise. Dec. 1 Towell signed a 120-day, 10% note at the bank for $12,000. Dec. 20 Towell gave Barr, Inc., a 60-day, 10%, $12,000 note for payment of account. Prepare the general journal entries necessary to adjust the interest accounts at December 31. Use 360 days for calculations and round to the nearest dollar.
Answer: See explanation
Explanation:
The general journal entries necessary to adjust the interest accounts at December 31 will be:
1. December 31:
Debit: Interest Expenses = $8,000 × 9% × 51/ 360 = $102
Credit: Interest payable = $102
(To accrue interest expenses for the note issued on November 10).
2. December 31:
Debit: Interest Expenses = $12,000 × 10% ×30/360 = $120
Credit: Interest payable = $120
(To accrue interest expenses for the note issued on December 1)
3. December 31:
Debit: Interest Expenses = $12,000 × 10% × 11/360 = $36.67
Credit: Interest payable = $36.67
(To accrue interest expenses for the note issued on December 20).
6.
Jane's Juice Bar has the following cost schedules:
Quantity
Variable Cost
Total Cost
O vats of juice
1
2.
3
4
5
$ 0
10
25
45
70
100
135
$ 30
40
55
75
100
130
165
6
a. Calculate average variable cost, average total
cost, and marginal cost for each quantity.
b. Graph all three curves. What is the
relationship between the marginal-cost
curve and the average-total-cost curve?
Between the marginal-cost curve and the
average-variable-cost curve? Explain.
Answer:
This may help you to solve it
How does risk influence the rate of interest?
Answer:
Interest rate risk directly affects the values of fixed income securities. Since interest rates and bond prices are inversely related, the risk associated with a rise in interest rates causes bond prices to fall and vice versa. Interest rate risk affects the prices of bonds, and all bondholders face this type of risk.
Explanation:
Hope this helped Mark BRAINLEST!!
The following information applies to the questions displayed below Over a four-year period, Jackie Corporation reported the following series of gross profits 2018 2019 2020 2021 $60,000 $66,000 $74,000 $90,000 Cost of goods sold32,000 46,00028,000 48,000 $28,000 $20,000 $46,000 $42,000 Net sales Cross profit In 2021, the company performed a comprehensive review of its inventory accounting procedures. Based on this review company records reveal that ending inventory was understated by $11,000 in 2019. Inventory in all other years is correct. Problem 6-10A Part 1
Required:
1. Calculate the gross profit ratio for each of the four years based on amounts originally reported. (Round your answers to the nearest whole percent.) Gross Profit Ratio 2018 2019 2020 2021 The following information applies to the questions displayed below Over a four-year period, Jackie Corporation reported the following series of gross profits 2021 Net sales Cost of goods sold Gross profit $60,000 $66,000 $74,000 $90,000 $28,000 $20,000 46,000 $42,000 In 2021, the company performed a comprehensive review of its inventory accounting procedures. Based on this review, company records reveal that ending inventory was understated by $11,000 in 2019. Inventory in all other years is correct
2. Calculate the gross profit ratio for each of the four years based on corrected amounts. (Round your answers to the nearest whole percent.) Gross Ratio 2018 2019 2020 2021
Answer:
1. Gross Profit ratio
2018 47%
2019 30%
2020 62%
2021 47%
2. Gross Profit ratio
2018 47%
2019 47%
2020 47%
2021 47%
Explanation:
1. Calculation for the gross profit ratio for each of the four years based on amounts originally reported.
2018 2019 2020 2021
Net sales $60,000 $66,000 $74,000 $90,000
Less Cost of goods sold $32,000 $46,000 $28,000 $48,000
=Gross profit$ 28,000 $20,000 $46,000 $42,000
Gross Profit ratio
2018 47% =$28,000/$60,000
2019 30% =$20,000/$66,000
2020 62% =$46,000/$74,000
2021 47% =$42,000/$90,000
2. Calculation for the gross profit ratio for each of the four years based on corrected amounts.
Cost of goods sold 2019=$46,000-$11,000
Cost of goods sold 2019=$35,000
Cost of goods sold 2020=$28,000+$11,000
Cost of goods sold 2020=$39,000
2018 2019 2020 2021
Net sales $60,000 $66,000 $74,000 $90,000
Less Cost of goods sold $32,000 $35,000 $39,000 $48,000
=Gross profit $28,000 $31,000 $35,000 $42,000
Gross Profit ratio
2018 47% =$28,000/$60,000
2019 47% =$31,000/$66,000
2020 47% =$35,000/$74,000
2021 47% =$42,000/$90,000
The expected return on a portfolio: Group of answer choices can be greater than the expected return on the best performing security in the portfolio. can be less than the expected return on the worst performing security in the portfolio. is independent of the performance of the overall economy. is limited by the returns on the individual securities within the portfolio. is an arithmetic average of the returns of the individual securities when the weights of those securities are unequal.
Answer:
is limited by the returns on the individual securities within the portfolio
Explanation:
Portfolio is simply defined as a list of securities showing how much is (or will be) invested in each of them.
The expected return on a portfolio is calculated as the weighted average of the expected returns on the securities that the portfolio involves. The weight of each security is the a Portion or a fraction of wealth invested in that security. Expected return on a portfolio of N securities is: rp= sum (Xr).
Expected Return is usually based on anticipated income and anticipated capital appreciation.
In its income statement for the year ended December 31, 2022, Pharoah Company reported the following condensed data. Salaries and wages expenses $595,200 Loss on disposal of plant assets $106,880 Cost of goods sold 1,263,360 Sales revenue 2,828,800 Interest expense 85,200 Income tax expense 32,000 Interest revenue 83,200 Sales discounts 204,800 Depreciation expense 396,800 Utilities expense 140,800
Prepare a multiple-step income statement. (List other revenues before other expenses.)
Pharoah Company
Income Statement
Answer:
Net income is $86,960.
Explanation:
A multi-step income statement is an income statement which dsplayes th gross profit and the detailed of each category of expenses and incomes to arrive at a company's net income for a particular period.
A multi-step income statement can be prepared as follows:
Pharoah Company
Income statement
For the year ended December 31, 2022
Details $
Sales revenue 2,828,800
Sales discounts (204,800)
Net sales revenue 2,624,000
Cost of goods sold (1,263,360)
Gross profit 1,360,640
Operating expenses:
Salaries and wages expenses (595,200)
Depreciation expense (396,800)
Utilities expense (140,800)
Operating income 227,840
Other income (loss):
Loss on disposal of plant assets (106,880)
Interest income (expense):
Interest expense (85,200)
Interest revenue 83,200
Income before tax 118,960
Income tax expense (32,000)
Net income 86,960
Waterway Industries adopted the dollar-value LIFO method of inventory valuation on December 31, 2019. Its inventory at that date was $1080000 and the relevant price index was 100. Information regarding inventory for subsequent years is as follows: Date Inventory at Current Prices Current Price Index December 31, 2020 $1280000 106 December 31, 2021 1453000 124 December 31, 2022 1621000 129 What is the cost of the ending inventory at December 31, 2020 under dollar-value LIFO? (Round intermediate calculations and final answer to 0 decimal places, e.g. 10,000.)
Answer:
$1,373,408
Explanation:
Ending inventory in 2019 = $1,080,000 * 100/100 = $1,080,000
Cost of the ending inventory at December 31, 2020 under dollar-value LIFO is:
= $1,080,000 + [($1280000*106/100) - $1,080,000 ] * 106/100
= $1,080,000 + $293,408
= $1,373,408