Answer:
See the attached excel file for the horizontal statements model.
Explanation:
In the attached excel file, we have:
FA = Financing activity
For event 1:
Cash = $20,000
Common stock = Number of shares * Share price at par = 1,000 * $10 = $10,000
PIC in Excess = Paid in capital in excess = Cash - Common stock = $20,000 - $10,000 = $10,000
For event 2:
Cash = Number of shares issued * Price per share = 2,000 * $2.50 = $50,000
Common stock = Number of shares * Share price at par = 2,000 * $10 = $20,000
PIC in Excess = Cash - Common stock = $50,000 - $20,000 = $30,000
Following are calcultion to the given question:
[tex]\bold{ \text{ TOM YUPPY CO. }}\\\\\ \ \ \ \ \ \ \ \ \ \ \text{ Horizontal Statements Model }\\\\ \text{ Event \ \ \ \ \ \ \ \ \ \ \ \ \ Balance sheet \ \ \ \ \ \ \ \ \ \ \ \ \ Income Statement}[/tex][tex]\text{ Assets=Stockholders' Equity Revenue-Expense=Net Income Statement of Cash Flow}[/tex]
[tex]Cash+Land=Common Stock+PIC in Excess[/tex]
For point 1:[tex]Common Stock \ \ \ \ \ \ \ 20000 \ \ \ \ + \ \ \ \ \ \ 0 \ \ \ \ \ \ \ 10000\ \ \ \ \ \ \ \ + \ \ \ \ \ \ \ \ \ 10000\ \ \ \ \ \ \ \ 0 \ \ \ \ \ \ \ \ \ \ \ \ \ \ 0\ \ \ \ \ \ \ \ \ \ 0 \ \ \ \ \ \ \ \ 20000\ \ \ \ \ \ \ \ \ \ FA[/tex]
For point 2: [tex]\text{ Issue of additional shares} \ \ \ \ \ \ \ \ \ 50000\ \ \ \ \ \ \ \ \ \ + \ \ \ \ 0 \ \ \ \ \ \ \ \ \ \ 20000\ \ \ \ \ \ \ \ \ + \ \ \ \ \ \ \ \ 30000 \ \ \ \ \ \ \ 0 \ \ \ \ \ \ \ 0 \ \ \ \ \ \ \ \ \ 0\ \ \ \ \ \ \ \ \ 20000\ \ \ \ \ \ \ FA[/tex]
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If the par value of 15-year bond is $5,000 with coupon rate $5% but the market rate/discount rate is 5.5%, the value of the bond is more or less than $5,000? Why?
Answer: Less than $5,000
Explanation:
The Bond described above is a discount bond. Discount bonds are bonds that sell below their par value because the market rate for the bond is higher than the coupon rate.
This happens when investors believe a bond to be riskier than the company says and so attach a higher return to it than its coupon rate. As a result, the price of the bond will be less than the par value because the higher market rate will discount the bond cashflows more than the coupon rate would.
How can you control inventory costs through proper planning and balancing inventory levels?
In order to control inventory costs, you need to consider the inventory A)_____ which may include the cost of renting a storage facility. You should also check the turnover rate, which is the pace at which you
B)_____ your inventory.
A. Ordering cost, storage cost, cost of capital
B. Store, order, replace
Answer:
i think its storage cost and replace
Explanation:
update i was right got 5/5
hich of the following constitutes a proposal of actions required by an
hieve its objectives?
A. Financial resources
B. Leading
C. Organising
D. Planning
Answer:
not sure but i think the answer is c)
Explanation:
Answer:
B
Explanation:
Lower property taxes
Can someone please help me
Answer:
A. $1,178.705
B. $1,753.05
C. $1,474.305
Explanation:
a. Calculation to determine the monthly mortgage payment of $159,500, 25-year loan at 7.5 percent.
Using this formula
Installment=Loan amount/1,000*(Table value 7.5% for 25 years)
Let plug in the formula
Installment=$159,500/$1,000*7.39
Installment=$1,178.705
Therefore the monthly mortgage payment of $159,500, 25-year loan at 7.5 percent will be $1,178.705
b. Calculation to determine the monthly mortgage payment of $217,500, 20-year loan at 7.5 percent.
Using this formula
Installment=Loan amount/1,000*(Table value 7.5% for 20 years)
Let plug in the formula
Installment=$217,500/$1,000*8.06
Installment=$1,753.05
Therefore the monthly mortgage payment of $217,500, 20-year loan at 7.5 percent will be $1,753.05
c. Calculation to determine the monthly mortgage payment of $199,500, 25-year loan at 7.5 percent.
Using this formula
Installment=Loan amount/1,000*(Table value 7.5% for 25 years)
Let plug in the formula
Installment=$199,500/$1,000*7.39
Installment=$1,474.305
Therefore the monthly mortgage payment of $199,500, 25-year loan at 7.5 percent will be $1,474.305
In performing accounting services for small businesses, you encounter the following situations pertaining to cash sales. 1. Oriole Company enters sales and sales taxes separately on its cash register. On April 10, the register totals are sales $24,500 and sales taxes $1,225. 2. Sheridan Company does not segregate sales and sales taxes. Its register total for April 15 is $16,430, which includes a 6% sales tax. Prepare the entry to record the sales transactions and related taxes for Oriole Company. (Credit account titles are automatically indented when amount is entered. Do not indent manually.) Date Account Titles and Explanation Debit Credit Apr. 10 enter an account title to record the sales transactions and related taxes for Oriole Company on April 10 Cash enter a debit amount enter a credit amount enter an account title to record the sales transactions and related taxes for Oriole Company on April 10 Sales Revenue enter a debit amount enter a credit amount enter an account title to record the sales transactions and related taxes for Oriole Company on April 10 Sales Taxes Payable enter a debit amount enter a credit amount eTextbook and Media
Answer and Explanation:
The journal entry to record the sales transaction is given below:
On April 10
Cash Dr $25,725
To Sales revenue $24,500
To Sales tax payable $1,225
(Being the sale is recorded)
Here cash is debited as it increased the assets and revenue & sales tax payable is credited as it increased the revenue & liabilities
A person who files bankruptcy ends up paying a 6% higher fixed interest rate on a 30-year home loan than a person
who has not filed bankruptcy. The person who files bankruptcy pays a 12% interest rate on their home loan. If the loan
amount is $150,000, how much more in total interest do they pay than the person who has not filed bankruptcy?
A. $258,375.30
B. $643.59
C. $149,536.52
D. $231,693.52
Answer:
D 231,692.52
Explanation:
got it right on edge21
Based on the interest rates given to the person who has filed for bankruptcy and the person who hasn't, the additional amount in total interest that the person with bankruptcy will pay is D. $231,693.52.
What would the person who declared bankruptcy pay?The amount that they pay can be found as:
Loan amount = Amount x ( 1 - ( 1 + rate) ^ -number of periods) / rate
Rate is: Number of periods:
= 12% / 12 = 30 x 12
= 1% per month = 360 months
The amount paid monthly is:
150,000 = Amount x ( 1 - (1 + 1%) ⁻³⁶⁰) / 1%
150,000 = Amount x 97.218331079
Amount = 150,000 / 97.218331079
= $1,542.92
What would the person who has never declared bankruptcy pay?They pay a 6% less than the person who has declared bankruptcy so they will pay:
= 12% - 6%
= 6%
Rate is therefore:
= 6% / 12
= 0.5%
Amount paid monthly is:
150,000 = Amount x ( 1 - (1 + 0.5%) ⁻³⁶⁰) / 0.5%
150,000 = Amount x 166.7916143923
Amount = 150,000 / 166.7916143923
= $899.33
What is the difference in interest?= (Amount paid by person with previous bankruptcy - Person with no history of bankruptcy) x 360 months
= (1,542.92 - 899.33) x 360
= $231,693.52
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The Square Box is considering two projects, both of which have an initial cost of $35,000 and total cash inflows of $50,000. The cash inflows of project A are $5,000, $10,000, $15,000, and $20,000 over the next four years, respectively. The cash inflows for project B are $20,000, $15,000, $10,000, and $5,000 over the next four years, respectively. Which one of the following statements is correct if The Square Box requires a 13 percent rate of return and has a required discounted payback period of 3.5 years? Both projects should be accepted. Both projects should be rejected. Project A should be accepted and project B should be rejected. Project A should be rejected and project B should be accepted. You should be indifferent to accepting either or both projects.
Answer:
project A should be rejected and project B should be accepted
Explanation:
Discounted payback calculates the amount of time it takes to recover the amount invested in a project from it cumulative discounted cash flows
For project A
Discounted cash flows
Year 1 = 20000 / 1.13 = 17,699.12
Year 2 = 15,000 / 1.13^2 = 11,747.20
year 3 = 10,000 / 1.13^3 = 6930.50
Year 4 = 5000 / 1.13^4 = 3066.59
Discounted payback = 2.8 years
Department C is the first stage of Cohen Corporation's production cycle. The following equivalent unit information is available for conversion costs for the month of September:
Beginning work-in-process inventory (20% complete) 82000
Started in September 1410000
Completed in September and transferred to Department D 1220000
Ending work-in-process inventory (80% complete) 272000
Using the FIFO method, the equivalent units for the conversion cost calculation are:_______.
a. 1,421,200
b. 1,220,000
c. 1,203,600
d. 1,355,600
e. None of the above
Answer:
The correct option is a. 1,421,200.
Explanation:
Note: See the attached excel file for the calculation of the equivalent units for the conversion cost calculation.
In the attached excel file, the following working is used:
Units started and completed = Completed in September and transferred to Department D - Beginning work-in-process inventory = $1,220,000 - $82,000 = $1,138,000
From the attached excel file, we have:
Total equivalent units = $1,421,200
Therefore, the correct option is a. 1,421,200.
The management of National Inc. asks your help in determining the comparative effects of the FIFO and LIFO inventory cost flow methods. For 2022, the accounting records show these data.
Inventory, January 1 (10,000 units) $35,000
Cost of 120,000 units purchased 468,500
Selling price of 98,000 units sold 750,000
Operating expenses 124,000
Units purchased consisted of 35,000 units at $3.70 on May 10; 60,000 units at $3.90 on August 15; and 25,000 units at $4.20 on November 20. Income taxes are 28%.
Required:
Prepare comparative condensed income statements for 2022 under FIFO and LIFO.
Answer:
National Inc.
Comparative condensed income statements for 2022
FIFO LIFO
Sales $750,000 750,000
Less Cost of Sales ($371,200) ($394,500)
Gross Profit $378,800 $355,500
Less Expenses
Operating expenses ($124,000) ($124,000)
Operating Profit $254,800 $231,500
Income tax expense ($71,344) ($64,820)
Net Income (Loss) $183,456 $166,680
Explanation:
FIFO
Assumes that the units to arrive first will be sold first. Therefore, the Cost of Goods Sold will be based on the earlier (old) prices.
Cost of Sales = 10,000 x $3.50 + 35,000 x $3.70 + 53,000 x $3.90 = $371,200
LIFO
Assumes that the units to arrive last will be sold first, Hence the Cost of Goods Sold will be based on the later (new) prices.
Cost of Sales = 25,000 x $4.20 + 60,000 x $3.90 + 15,000 x $3.70 = $394,500
During 2016, Bramble Corporation spent $178,560 in research and development costs. As a result, a new product called the New Age Piano was patented. The patent was obtained on October 1, 2016, and had a legal life of 20 years and a useful life of 10 years. Legal costs of $30,000 related to the patent were incurred as of October 1, 2016.
Prepare all journal entries required in 2016 and 2017 as a result of the transactions above. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter for the amounts.) Date Account Titles and Explanation Debit Credit 2016 (To record research and development expenses)
Answer:
See the journal entries below.
Explanation:
The journal entries will look as follows:
Date Description Debit ($) Credit ($)
2016 Research and Development Expense 178,560
Cash 178,560
(To record research and development costs.)
Patents 30,000
Cash 30,000
(To record legal expenses.)
Patent Amortization Expense 750
Patents [($30,000 / 10) * (3/12)] 750
(To record patent amortization for 2016.)
2017 Patent Amortization Expense 3,000
Patents ($30,000 / 10) 3,000
(To record patent amortization for 2017.)
Assume initially that the price of X (the quantity of which is measured on the horizontal axis) is $9 and the price of Y (the quantity of which is measured on the vertical axis) is $4. If the price of X now declines to $6, the budget line will Multiple Choice be unaffected. shift outward on the vertical axis. shift inward on the horizontal axis. shift outward on the horizontal axis.
Answer:
The budget line will shift outward on the horizontal axis.
Explanation:
One of the laws of the demand is that the lower the price of a good, the higher the quantity of that good that is purchased.
From the question, a decline in the price of X from $9 to $6, will lead to an increase in the quantity of X that is bought.
Since the price of Y still remains at $4, if the price of X now declines to $6, the budget line will shift outward on the horizontal axis.
Brady's listing of deferred tax assets and liabilities includes the following for operations in the tax jurisdictions of Tambura and Nileboo:
Tambura:
Deferred tax asset of $19 million
Valuation allowance of $16 million
Deferred tax liability of $28 million
Nileboo:
Deferred tax asset of $60 million
Deferred tax liability of $17 million
Brady files separate tax returns in Tambura and Nileboo. Brady’s balance sheet would include the following disclosure of deferred tax assets and liabilities:_______.
Answer: Deferred tax liability of $25 million in Tambura and Deferred tax asset of $43 million in Nileboo.
Explanation:
Tambura
Deferred tax asset $ 19 million
Less: Valuation allowance ( $ 16 million)
Net deferred tax asset $ 3 million
Less Deferred tax liability ($ 28 million)
Deferred tax liability $25 million
Nileboo
Deferred tax asset $ 60 million
Less: Deferred tax liability ( $ 17 million)
Deferred tax asset $43 million
Global competition exists when Group of answer choices a firm produces and markets its products domestically rather than globally. firms originate, produce, and market their products and services worldwide. two firms from two different countries compete for market share in a single domestic market. two or more firms from different nations combine their resources to market products in a single domestic market. the firm from one nation dominates the market for its product in every nation.
Answer:
firms originate, produce, and market their products and services worldwide.
Explanation:
Globalization can be defined as the strategic process which involves the integration of various markets across the world to form a large global marketplace. Basically, globalization makes it possible for various organizations to produce goods and services that is used by consumers across the world.
Some examples of international economic organizations involved in global economy and trade are;
World Trade Organization (WTO).
United Nations (UN).
International Monetary Fund (IMF).
Global competition exists when firms originate, produce, and market their products and services worldwide.
What is known as the price at which a seller projects that a buyer will buy a product?
A. Target price
B. Selling price
C. Perfect price
D. Profit price
The price at which a seller projects that a buyer will buy a product is called the Perfect price.
What is a perfect price?Perfect price is also known as pure price discrimination. The Perfect price is the price at which a seller believes a buyer will purchase a thing.
It is an economic theory in which a company can charge the greatest price that customers are willing to pay for each of its items while still leaving no consumer surplus.
Therefore, option C is correct.
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By the time you turn 30 years old, what insurance do you expect to have?
Phone Insurance
Renter's Insurance
Homeowner's Insurance
Health Insurance
Life Insurance
Car Insurance
honestly you would need all of them because they are very important to have as you get older
When international companies choose a place for production facilities, ___________, ___________, and ___________ factors are all important considerations on the strategic decision of where production should occur. country-specific, technological, product local government, environmental, product federal government, environmental, logical
The factors that international companies consider in choosing a place for locating their production facilities are country-specific, technological, and product factors.
An international company is located in more than one country. It may have production facilities in more than one country with its headquarters at the home country.
Such an international company usually considers some factors to determine where production facilities should be located. Some of the factors relate to the specific countries under consideration.
Another factor considered is the maturity of technological advancement in the countries that it is considering. This shows the importance of technology in aiding production, improving efficiency, and increasing the company's profitability.
The company should also review the level of product demand in the local market, the availability of raw materials, and the level of skilled manpower for production activities.
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Seven years ago, Paul purchased residential rental real estate that he has been depreciating as MACRS property over 27.5 years. This year, when his adjusted basis in the property was $250,000, Paul transferred the property to the newly formed PLA partnership in exchange for a one-third interest in the partnership. PLA incurred $10,000 of transfer taxes and fees related to the property. How will PLA treat the property?
a. PLA will take the rental real estate at a basis of $250,000 and the $10,000 taxes and fees at $10,000 and depreciate each over 27.5 years
b. PLA will take the rental real estate at a basis of $260,000 and depreciate it over 27.5 years.
c. PLA will take the rental real estate at a basis of $250,000 and the $10,000 of taxes and fees will be treated as a new depreciable property
d. PLA will take the rental real estate at a basis of $260,000 and depreciate it over the remaining 20 years.
Answer:
c. PLA will take the rental real estate at a basis of $250,000 and the $10,000 of taxes and fees will be treated as a new depreciable property
Explanation:
According to the rule, the adjusted basis of Paul is of $250,000 and it should be depreciated for the predicted remaining life i.e. 20 years
While on the other hand, the $10,000of transfer taxes and fees would be treated as a new purchase of an asset and would be depreciated for 27.5 years
Therefore as per the given situation, the option c is correct
Braxton Enterprises currently has debt outstanding of million and an interest rate of . Braxton plans to reduce its debt by repaying million in principal at the end of each year for the next five years. If Braxton's marginal corporate tax rate is , what is the interest tax shield from Braxton's debt in each of the next five years?
Answer:
Interest tax shield in year 0 = $1.155 million
Interest tax shield in year 1 = $0.924 million
Interest tax shield in year 2 = $0.693 million
Interest tax shield in year 3 = $0.462 million
Interest tax shield in year 4 = $0.231 million
Interest tax shield in year 5 = 0
Explanation:
Here is the complete question :
Braxton Enterprises currently has debt outstanding of $55 million and an interest rate of 6%. Braxton plans to reduce its debt by repaying $11 million in principal at the end of each year for the next five years. If Braxton's marginal corporate tax rate is 35%, what is the interest tax shield from Braxton's debt in each of the next five years?
interest tax shield is a reduction in tax paid as a result of interest paid on debt
interest tax shield = (debt amount x interest rate x tax rate)
Interest tax shield in year 0 = $55 million x 0.06 x 0.35 = $1.155 million
Debt in year 1 = $55 million - 11million = $44 million
Interest tax shield in year 1 = $44 million x 0.06 x 0.35 = $0.924 million
Debt in year 2 = $44 million - 11million = $33 million
Interest tax shield in year 2 = $33 million x 0.06 x 0.35 = $0.693 million
Debt in year 3 = $33 million - 11million = $22 million
Interest tax shield in year 3 = $22 million x 0.06 x 0.35 = $0.462 million
Debt in year 4 = $22 million - $11 million = $11 million
Interest tax shield in year 4 = $11 million x 0.06 x 0.35 = $0.231 million
Debt in year 5 = $11 million - $11 million = 0
Interest tax shield in year 5 = 0 x 0.06 x 0.35 = 0
Assume that your father is now 40 years old, that he plans to retire in 20 years, and that he expects to live for 25 years after he retires, that is, until he is 85. He wants a fixed retirement income that has the same purchasing power at the time he retires as $75,000 has today. (He realizes that the real value of his retirement income will decline year-by-year after he retires.) His retirement income will begin the day he retires, 20 years from today, and he will then receive 24 additional annual payments. Inflation is expected to be 4% per year from today forward; he currently has $200,000 saved; and he expects to earn a return on his savings of 7% per year, annual compounding. To the nearest dollar, how much must he save during each of the next 20 years (with deposits being made at the end of each year) to meet his retirement goal
Answer:
Explanation:
People deserve a break, Just give them time.
The management of Arkansas Corporation is considering the purchase of a new machine costing $490,000. The company's desired rate of return is 10%. The present value factors for $1 at compound interest of 10% for 1 through 5 years are 0.909, 0.826, 0.751, 0.683, and 0.621, respectively. In addition to the foregoing information, use the following data in determining the acceptability in this situation:
Year Income from Operations Net Cash Flow
1 $100,000 $180,000
2 40,000 120,000
3 40,000 100,000
4 10,000 90,000
5 10,000 120,000
The net present value for this investment is:_______
a. $(126,800)
b. $(16,170)
c. $55,200
d. $36,400
Answer:
b. $(16,170)
Explanation:
The net present value of the investment is present value of net cash flows discounted at the company's desired rate of return of 10% minus the initial investment outlay of $490,000 as shown thus:
NPV=($180,000*0.909)+($120,000*0.826)+($100,000*0.751)+($90,000*0.683)+($120,000*0.621)-$490,000
NPV= $473,830-$490,000
NPV= $(16,170)
It is obvious that the correct option in this case is B
Toyota manufactures in Japan most of the vehicles it sells in the United Kingdom. The base platform for the Toyota Tundra truck line is ¥1,650,000. The spot rate of the Japanese yen against the British pound has recently moved from ¥197/£ to ¥190/£. How does this change the price of the Tundra to Toyota's British subsidiary in British pounds?
Answer and Explanation:
The computation of the change in price is shown below:
Original import price
= 1,650,000 ÷ 197
= 8375.63
The new import price is
= 1,650,000 ÷ 190
= 8,684.21
Now the percentage change in price is
= (8,684.21 - 8375.63) ÷ 8375.63
= 3.68%
This would be equal to the percentage change in the Japanese yen as the price of the truck remains unchanged
Froya Fabrikker A/S of Bergen, Norway, is a small company that manufactures specialty heavy equipment for use in North Sea oil fields. The company uses a job-order costing system and applies manufacturing overhead cost to jobs on the basis of direct labor-hours. Its predetermined overhead rate was based on a cost formula that estimated $380,000 of manufacturing overhead for an estimated allocation base of 1,000 direct labor-hours. The following transactions took place during the year (all purchases and services were acquired on account):
a. Raw materials purchased for use in production, $275,000.
b. Raw materials requisitioned for use in production (all direct materials), $260,000.
c. Utility bills were incurred, $74,000 (95% related to factory operations, and the remainder related to selling and administrative activities).
d. Salary and wage costs were incurred:
Direct labor (1,100 hours) $305,000
Indirect labor $105,000
Selling and administrative salaries $185,000
e. Maintenance costs were incurred in the factory, $69,000.
f. Advertising costs were incurred, $151,000.
g. Depreciation was recorded for the year, $87,000 (80% related to factory equipment, and the remainder related to selling and administrative equipment).
h. Rental cost incurred on buildings, $112,000 (85% related to factory operations, and the remainder related to selling and administrative facilities).
i. Manufacturing overhead cost was applied to jobs.
j. Cost of goods manufactured for the year, $920,000.
k. Sales for the year (all on account) totaled $1,950,000. These goods cost $950,000 according to their job cost sheets.
The balances in the inventory accounts at the beginning of the year were:
Raw materials $45,000
Work in process $36,000
Finished Goods $75,000
Required:
a. Prepare journal entries to record the above data.
b. Post your entries to T-accounts.
c. Prepare a schedule of cost of goods manufactured.
d. Prepare an income statement for the year.
Answer:
Froya Fabrikker A/S of Bergen, Norway
a. Journal Entries
a. Debit Raw materials $275,000
Credit Accounts payable $275,000
To record purchase of raw materials on account.
b. Debit WIP $260,000
Credit Raw materials $260,000
To record materials requisitioned for production.
c. Debit Manufacturing overhead $70,300
Debit Selling and admin. $3,700
Credit Utilities expense $74,000
To close utilities expenses.
d. Debit WIP $305,000
Debit Manufacturing overhead $105,000
Debit Selling and Admin. $185,000
Credit Payroll Expense $595,000
To close payroll expenses.
e. Debit Manufacturing overhead $69,000
Credit Maintenance expense $69,000
To close maintenance expense.
f. Debit Selling and admin. $151,000
Credit Advertising expense $151,000
To close advertising expense.
g. Debit Manufacturing overhead $69,600
Debit Selling and admin. $17,400
Credit Depreciation expense $87,000
To close depreciation expense.
h. Debit Manufacturing overhead $95,200
Debit Selling and admin $16,800
Credit Rent expense $112,000
To close rent expense.
i. Debit WIP $418,000
Credit Manufacturing overhead applied $418,000
To record manufacturing overhead applied to production at $380 for 1,100 direct labor-hours.
j. Debit Finished goods $920,000
Credit WIP $920,000
To transfer completed goods to finished goods inventory.
k. Debit Accounts receivable $1,950,000
Credit Sales revenue $1,950,000
To record sale of goods on account.
Debit Cost of goods sold $950,000
Credit Finished goods $950,000
To record the cost of goods sold.
b. T-accounts
Raw materials
Account Titles Debit Credit
Beginning balance $45,000
Accounts payable 275,000
Work in Process $260,000
Work in process
Account Titles Debit Credit
Beginning balance $36,000
Raw materials 260,000
Payroll expense 305,000
Manufacturing
overhead applied 418,000
Finished goods inventory $920,000
Finished Goods
Account Titles Debit Credit
Beginning balance $75,000
Work in Process 920,000
Cost of goods sold $950,000
Cost of goods sold
Account Titles Debit Credit
Finished goods $950,000
Accounts Payable
Account Titles Debit Credit
Raw materials $275,000
Manufacturing overhead
Account Titles Debit Credit
Utilities expense $70,300
Payroll expense 105,000
Maintenance exp 69,000
Depreciation exp. 69,600
Rent expense 95,200
Work in Process $418,000
Overhead applied 8,900
Sales Revenue
Account Titles Debit Credit
Accounts receivable $1,950,000
Accounts Receivable
Account Titles Debit Credit
Sales revenue $1950,000
Selling and admin.
Utilities expense $3,700
Payroll expense 185,000
Advertising exp. 151,000
Depreciation exp. 17,400
Rent expense 16,800
Utilities Expense
Manufacturing overhead $70,300
Selling and admin. 3,700
Payroll Expense
Work in Process $305,000
Manufacturing overhead 105,000
Selling and admin. 185,000
Maintenance expense
Manufacturing overhead $69,000
Advertising expense
Selling and admin. $151,000
Depreciation expense
Manufacturing overhead $69,600
Selling and admin. 17,400
Rent expense
Manufacturing overhead $95,200
Selling and admin. 16,800
c. Schedule of Cost of Goods Manufactured:
Beginning WIP $36,000
Raw materials 260,000
Payroll expense 305,000
Manufacturing
overhead applied 418,000
Ending WIP (99,000)
Finished goods $920,000
d. Income Statement for the year ended December 31
Sales Revenue $1,950,000
Cost of goods sold 950,000
Gross profit $1,000,000
Selling and Administrative expenses:
Utilities expense $3,700
Payroll expense 185,000
Advertising exp. 151,000
Depreciation exp. 17,400
Rent expense 16,800 $373,900
Net income $626,100
Explanation:
a) Data and Calculations:
Estimated manufacturing overhead = $380,000
Estimated direct labor-hours = 1,000
Actual direct labor-hours = 1,100
Predetermined overhead rate = $380 ($380,000/1,000)
Analysis of Transactions:
a. Raw materials $275,000 Accounts payable $275,000
b. WIP $260,000 Raw materials $260,000
c. Manufacturing overhead (Utility) $70,300 Selling and admin. $3,700 Utilities expense $74,000
d. WIP (direct labor) $305,000 Manufacturing overhead (indirect labor) $105,000 Selling and Admin. $185,000 Payroll Expense $595,000
e. Manufacturing overhead (maintenance) $69,000 Maintenance expense $69,000
f. Selling and admin. $151,000 Advertising expense $151,000
g. Manufacturing overhead $69,600 Selling and admin. $17,400 Depreciation expense $87,000
h. Manufacturing overhead $95,200 Selling and admin $16,800 Rent $112,000
i. WIP $418,000 Manufacturing overhead applied $418,000 ($380 * 1,100)
j. Finished goods $920,000 WIP $920,000
k. Accounts receivable $1,950,000 Sales revenue $1,950,000
Cost of goods sold $950,000 Finished goods $950,000
Beginning balances:
Raw materials $45,000
Work in process $36,000
Finished Goods $75,000
On January 1, Sheridan Company had 97,500 shares of no-par common stock issued and outstanding. The stock has a stated value of $6 per share. During the year, the following occurred.
Apr. 1 Issued 23,000 additional shares of common stock for $17 per share.
June 15 Declared a cash dividend of $1 per share to stockholders of record on June 30.
July 10 Paid the $1 cash dividend.
Dec. 1 Issued 1,500 additional shares of common stock for $19 per share.
15 Declared a cash dividend on outstanding shares of $2.90 per share to stockholders of record on December 31.
Required:
Prepare the entries to record these transactions.
Answer:
Sheridan Company
Journal Entries:
Apr. 1: Debit Cash $391,000
Credit Common stock $138,000
Credit Additional Paid-in Capital $253,000
To record the issue of 23,000 additional shares for $17 per share.
June 15: Debit Retained Earnings $120,500
Credit Dividends Payable $120,500
To record the declaration of cash dividend of $1 per share (120,500 shares).
July 10: Debit Dividends Payable $120,500
Credit Cash $120,500
To record the payment of dividends.
Dec. 1: Debit Cash $28,500
Credit Common stock $9,000
Credit Additional Paid-in Capital $19,500
To record the issue of 1,500 shares for $19 per share.
Dec. 12: Debit Retained Earnings $353,800
Credit Dividends Payable $353,800
To record the declaration of $2.90 per share dividends to 122,000 shares
Explanation:
a) Data and Analysis:
Outstanding common stock = 97,500 shares
Stated value per share = $6
Apr. 1 Cash $391,000 Common stock $138,000 Additional Paid-in Capital $253,000, 23,000 additional shares for $17 per share.
June 15: Retained Earnings $120,500 Dividends Payable $120,500 (97,500 + 23,000)
July 10: Dividends Payable $120,500 Cash $120,500
Dec. 1: Cash $28,500 Common stock $9,000 Additional Paid-in Capital $19,500
Dec. 12: Retained Earnings $353,800 Dividends Payable $353,800 (122,000 at $2.90 per share, i.e. 120,500 + 1,500 shares)
The Rosa model of Mohave Corp. is currently manufactured as a very plain umbrella with no decoration. The company is considering changing this product to a much more decorative model by adding a silk-screened design and embellishments. A summary of the expected costs and revenues for Mohave's two options follows:
Rosa Umbrella Decorated Umbrella
Estimated demand 22,000 units 22,000 units
Estimated sales price $24.00 $34.00
Estimated manufacturing cost per unit
Direct materials $14.50 $16.50
Direct labor 3.50 6.00
Variable manufacturing overhead 2.50 4.50
Fixed manufacturing overhead 5.00 5.00
Unit manufacturing cost $25.50 $32.00
Additional development cost $10,000
Required:
1. Determine the increase or decrease in profit if Mohave sells the Rosa Umbrella with the additional decorations.
2. Should Mohave add decorations to the Rosa umbrella?
3-a. Suppose that the higher price of the decorated umbrella is expected to reduce estimated demand for this product to 20,000 units. Determine the increase or decrease in profit if Mohave sells the Rosa Umbrella with the additional decorations.
3-b. Should Mohave add decorations to the Rosa umbrella?
Answer:
Mohave Corp.
1. The increase in profit if Mohave sells the Rosa Umbrella with the additional decorations is:
= $67,000.
2. Mohave should add the decorations to the Rosa Umbrella. It makes some profits unlike when the Umbrella is without decorations.
3a. The increase in profit if Mohave sells the Rosa Umbrella with the additional decorations is:
= $63,000.
3b. Mohave should still add the decorations to the Rosa Umbrella. It makes some profits unlike when the Umbrella is without decorations.
Explanation:
a) Data and Calculations:
Rosa Umbrella Decorated Umbrella
Estimated demand 22,000 units 22,000 units
Estimated sales price $24.00 $34.00
Estimated manufacturing cost per unit
Direct materials $14.50 $16.50
Direct labor 3.50 6.00
Variable manufacturing overhead 2.50 4.50
Fixed manufacturing overhead 5.00 5.00
Unit manufacturing cost $25.50 $32.00
Additional development cost $10,000
Total revenue $528,000 $748,000
Total manufacturing cost 561,000 704,000
Additional development costs 10,000
Operating profit ($33,000) $34,000
Increase in profit = $67,000 = ($33,000) - $34,000
Decreased Demand to 20,000:
Total revenue $528,000 $680,000
Total manufacturing cost 561,000 640,000
Additional development costs 10,000
Operating profit ($33,000) $30,000
Increase in profit = $63,000 = ($33,000) - $30,000
The E.N.D. partnership has the following capital balances as of the end of the current year: Pineda $ 180,000 Adams 160,000 Fergie 150,000 Gomez 140,000 Total capital $ 630,000 Answer each of the following independent questions: Assume that the partners share profits and losses 3:3:2:2, respectively. Fergie retires and is paid $183,000 based on the terms of the original partnership agreement. If the goodwill method is used, what is the capital balance of the remaining three partners
Answer:
Goodwill Calculation
Amount paid to Fergie $183,000
Less: Fergie Capital $150,000
Goodwill $33,000
Fergie's share is 20% in Goodwill. Total Goodwill = $33,000 / 20% = $165,000
Calculation of Capital Balance After Fergie's retirement
Pineda Adams Fergie Gomez Total
Opening Balance $180,000 $160,000 $150,000 $140,000 $630,000
Add: Goodwill $49,500 $49,500 $33,000 $33,000 $165,000
(Distributed - 3:3:2:2)
Less: Amount Paid - - ($183,000) - ($183,000)
Balance $229,500 $209,500 - $173,000 $612,000
explain the management of sssmm the impact of the following socio-economic issues on their business
Answer:
South Africa in the 21st Century - Bibliothek der Friedrich-Ebert ...
by P Pillay · Cited by 12 — Foremost amongst these are the following ... The six key socio-economic challenges described in this paper relate to: 1. ... Specifically, what are the consequences for unemployment.
Expalin two advantages of Marginal Costing.
Answer:
. Facilitates cost control – By separating the fixed and variable costs, marginal costing provides an excellent means of controlling costs. 3. Avoids arbitrary apportionment of overheads – Marginal costing avoids the complexities of allocation and apportionment of fixed overheads which is really arbitrary.
Colbert operates a catering service on the accrual method. In November of year 1, Colbert received a payment of $9,000 for 18 months of catering services to be rendered from December 1st of year 1 through May 31st of year 3. When must Colbert recognize the income if his accounting methods are selected to minimize income recognition?
a. $500 is recognized in year 1, $6,000 in year 2, and $2,500 in year 3.
b. $500 is recognized in year 1 and $8,500 in year 2.
c. $9,000 is recognized in year 3.
d. $2,500 is recognized in year 1 and $6,500 in year 2.
e. $9,000 is recognized in year 1.
Answer:
b) $500 is recognized in year 1 and $8,500 in year 2.
Explanation:
Calculation to determine When must Colbert recognize the income if his accounting methods are selected to minimize income recognition?
Calculation for amount recognized in year 1
Payment in year 1= $9,000 ÷ 18 months
Payment in year 1= $500
Therefore Based on the above calculation the amount recognized in year 1 will be $500
Calculation for the amount recognized in year 2
Payment in year 2 = $9,000 - $500
Payment in year 2= $8,500
Therefore The amount recognized in year 2 will be $8,500
Standard quantity 7.0 liters per unit Standard price $ 1.50 per liter Standard cost $ 10.50 per unit The company budgeted for production of 2,800 units in April, but actual production was 2,900 units. The company used 21,200 liters of direct material to produce this output. The company purchased 19,100 liters of the direct material at $1.60 per liter. The direct materials purchases variance is computed when the materials are purchased. The materials quantity variance for April is
Answer:
$1,350U
Explanation:
Calculation to determine what The materials quantity variance for April is
Using this formula
Materials quantity variance=(AQ-SQ)*SP
Let plug in the formula
Materials quantity variance=[21,200 liters-(2,900 units*7.0 liters )*$ 1.50
Materials quantity variance{(21,200-20,300)*$1.50
Materials quantity variance=900*$1.50
Materials quantity variance=$1,350 U
Therefore the Materials quantity variance is $1,350 Unfavorable
Company A is a manufacturer with sales of $3,400,000 and a 60% contribution margin. Its fixed costs equal $1,600,000. Company B is a consulting firm with service revenues of $3,500,000 and a 25% contribution margin. Its fixed costs equal $410,000. Compute the degree of operating leverage (DOL) for each company. Which company benefits more from a 20% increase in sales.
Answer:
DOL of Company A= 4.63
DOL of Company B=1.88
Company A benefits more from a 20% increase in sales
Explanation:
The degree of operating leverage measures the volatility in the operating profit of a business as result of the proportion of fixed cost to its total costs.
The operating Leverage = Contribution margin/Operating income
Contribution = Contribution % × sales value
Operating income = Contribution - Fixed cost
Company A
Contribution margin= 60%× 3,400,000 = 2,040,000
Operating income = 60%× 3,400,000 - 1,600,000= 440,000
DOL =2,040,000 /440,000 = 4.634
DOL of Company A= 4.63
Company B
Contribution margin= 25%× 3,500,000=875000
Operating income = 875,000 - 410,000 =465000
DOL = 875,000 /465,000 × 100 =1.88
DOL=1.88
If both companies experience an increase of 20%, the corresponding increase in profit would be:
Company A= 4.63× 20= 92.6%
Company B = 1.88 × 20 = 37.6%
Company A benefits more
DOL of Company A= 4.63
DOL of Company B=1.88
Company A benefits more from a 20% increase in sales