Cone Corporation is in the process of preparing its December 31, 2021, balance sheet. There are some questions as to the proper classification of the following items: A. $50,000 in cash restricted in a savings account to pay bonds payable. The bonds mature in 2025. B. Prepaid rent of $24,000, covering the period January 1, 2022, through December 31, 2023. C. Notes payable of $200,000. The notes are payable in annual installments of $20,000 each, with the first installment payable on March 1, 2022. D. Accrued interest payable of $12,000 related to the notes payable. E. Investment in equity securities of other corporations, $80,000. Cone intends to sell one-half of the securities in 2022.Required:Prepare the asset and liability sections of a classified balance sheet to show how each of the above items should be reported.
Answer:
Cone Corporation
Assets and Liabilities Sections of the Classified Balance Sheet:
Current Assets:
B. Prepaid Rent $12,000
E. Equity Securities $40,000
Long-term Assets:
A. Restricted Cash $50,000
B. Prepaid Rent $12,000
E. Equity Securities $40,000
Current Liabilities:
C. Notes Payable $20,000
D. Interest Payable $12,000
Long-term Liabilities:
C. Notes Payable $180,000
Explanation:
a. The restricted cash should be treated as a long-term asset since the associated bonds mature in 2025.
b. Half of the Prepaid Rent should be treated as a current asset and the other half as a long-term asset to cover next year and next two years respectively.
c. $20,000 of the Notes Payable is treated as a current liability with the remaining as long-term liabilities.
d. The interest payable is treated as a current liability since it is likely to be paid next year.
e. Half of the investment in equity securities should be treated as a current asset and half as a long-term asset.
A 6.75 percent coupon bond with 13 years left to maturity can be called in two years. The call premium is one year of coupon payments. It is offered for sale at $919.75. What is the yield to call of the bond? Assume interest payments are paid semi-annually and par value is $1,000.
Answer:
YTC = 14.23%
Explanation:
the yield to call formula is:
YTC = {coupon payment + [(call price - market price) / n]} / [(call price + market price) / 2]
YTC = {$33.75 + [($1,067.50 - $919.75) / 4]} / [($1,067.50 + $919.75) / 2]
YTC = ($33.75 + $36.94) / $993.63 = 0.0711 x 2 (semiannual coupon) = 0.1423 = 14.23%
Determine whether each statement describes the income effect, the substitution effect, or neither. Assume that all other variables are held constant. The price of lobster doubles, making Henri feel less wealthy. As a result, Henri buys fewer lobsters. The price of chicken falls by $0.75 a pound. Since chicken is now relatively less expensive than ground beef, Mary buys more chicken and less beef. The average price of a DVD falls by 15 percent. Tom buys more DVDs because his monthly movie budget can now stretch further. Model Planes Incorporated reduces production of its wooden plane product line. Jessica sees that the price of orange juice is higher this week. She decides to buy less orange juice and more apple juice because orange juice is relatively more expensive.
Answer: See explanation
Explanation:
Income effect is when the demand for a particular good or service changes because the real income of the person has changed.
Substitution effect arises when there is a reduction in the sales for a good or service due to a price rise and therefore the consumers have switched to a cheaper alternative. For example, if the price of beef rises, the consumers may shift and purchase more of chicken.
Based on the above scenario, the following will then be:
• The price of lobster doubles, making Henri feel less wealthy. As a result, Henri buys fewer lobsters.
Income effect
Henry's real income has changed, he has more money and hence reduces the purchase for lobsters because he sees it as inferior good.
• The price of chicken falls by $0.75 a pound. Since chicken is now relatively less expensive than ground beef, Mary buys more chicken and less beef.
Substitution effect
Mary has moved to a cheaper alternative in this situation.
• The average price of a DVD falls by 15 percent. Tom buys more DVDs because his monthly movie budget can now stretch further.
Income effect
• Model Planes Incorporated reduces production of its wooden plane product line.
No effect
No effect here as it's neither income effect not substitution effect.
• Jessica sees that the price of orange juice is higher this week. She decides to buy less orange juice and more apple juice because orange juice is relatively more expensive.
Substitution effect
The reduction in the quantity demanded of lobsters describes the income effect.
Mary substituting chicken for ground beef is an example of the substitution effect.
The increase in the quantity demanded of DVDs describes the income effect.
Reduction in the production of wooden plane does not describe the income or substitution effect.
The increase in the demand for orange juice is an example of the substitution effect.
The substitution effect when a change in the price of a good leads consumers to substitute the demand for the good with other goods. If the price of the good increases, consumers buy cheaper substitutes. If the price of the good declines, consumers reduce the consumption of the substitute and increase the demand for that good.
The income effect is when an increase in price lowers consumer's purchasing power, holding money income constant. This would lead to a fall in the quantity demanded of the good. When price decreases, purchasing power increases and consumers demand more of the good.
A similar question was answered here: https://brainly.com/question/13324912
You are considering a project which will provide annual cash inflows of $4,921, $5,700, and $8,000 at the end of each year for the next three years, respectively. What is the present value of these cash flows, given a 9 percent discount rate?
Answer:
Total PV= $15,489.73
Explanation:
Giving the following information:
Cash flows:
1= $4,921
2= $5,700
3= $8,000
Interest rate= 9%
To calculate the present value, we need to use the following formula on each cash flow:
PV= FV/(1+i)^n
PV1= = 4,921/1.09= 4,514.68
PV2= 5,700/1.09^2= 4,797.58
PV3= 8,000/1.09^3= 6,177.47
Total PV= $15,489.73
Paige is 64 years old and would like to retire from her job at a large accounting firm. She, however, is concerned about health insurance. She would not be eligible for Medicare benefits until age 65, and due to some serious health conditions, she would not be able to obtain insurance in the private market. She has good health insurance at the accounting firm and is considering putting off her retirement so that she can keep it.
Which of the following would likely enable Paige to keep her insurance with the accounting firm until she is eligible for Medicare?A) The Health Insurance Portability and Accountability ActB) The Consolidated Omnibus Budget Reconciliation ActC) The Employee Security ActD) The Insurance Protection Act
Answer:
B)The Consolidated Omnibus Budget Reconciliation Act
Explanation:
We are informed about Paige, a 64 years old who would like to retire from her job at a large accounting firm. And she is concerned about health insurance. She would not be eligible for Medicare benefits until age 65, and due to some serious health conditions, she would not be able to obtain insurance in the private market. She has good health insurance at the accounting firm and is considering putting off her retirement so that she can keep it.
In case Paige want to keep her insurance with the accounting firm until she is eligible for Medicare, The law that would likely enable is the Consolidated Omnibus Budget Reconciliation Act.
The Consolidated Omnibus Budget Reconciliation Act by U.S Congress was signed into law in 1985 by President Ronald Reagan.It enables employee of an organization to enjoy the benefits that comes with their Heath insurance even after they are not working in the organization again.
A comparative balance sheet for Sarasota Corporation is presented as follows.
December 31
Assets 2020 2019
Cash $ 72,680 $ 22,000
Accounts receivable 84,360 68,680
Inventory 182,360 191,680
Land 73,360 112,680
Equipment 262,360 202,680
Accumulated Depreciation-Equipment
(71,360 ) (44,680 )
Total $603,760 $553,040
Liabilities and Stockholders' Equity
Accounts payable $ 36,360 $ 49,680
Bonds payable 150,000 200,000
Common stock ($1 par) 214,000 164,000
Retained earnings 203,400 139,360
Total $603,760 $553,040
Additional information:
1. Net income for 2020 was $129,720. No gains or losses were recorded in 2020.
2. Cash dividends of $65,680 were declared and paid.
3. Bonds payable amounting to $50,000 were retired through issuance of common stock.
Prepare a statement of cash flows for 2020 for Sarasota Corporation. (Show amounts that decrease cash flow with either a - sign e.g. -15,000 or in parenthesis e.g. (15,000).)
Determine Sarasota Corporation’s current cash debt coverage, cash debt coverage, and free cash flow.
Answer:
Sarasota Corporation
1. Statement of Cash Flows for the year ended December 31, 2020:
Operating Activities:
Net Income $129,720
Non-cash adjustment:
Depreciation 26,680
Cash from operating $ 156,400
Changes in working capital:
Accounts Receivable (15,680)
Inventory 9,320
Accounts Payable (13,320)
Net cash from operating activities $136,720
Investing Activities:
Land 39,320
Equipment (59,680)
Net cash from investing activities $(20,360)
Financing Activities:
Cash dividends $(65,680)
Net cash inflows $50,680
2. Sarasota Corporation's:
a) Current Cash Debt Coverage = Cash from operating activities/Current liabilities
= $136,720/$36,360
= 3.76
b) Cash Debt Coverage = Cash from operating activities/Total liabilities
= $136,720/$186,360
= 0.73
c) Free Cash Flow = Cash from operating activities minus Capital expenditure
= $136,720 - 59,680
= $77,040
Explanation:
a) Data and Calculations:
Sarasota Corporation
Comparative Balance Sheets
As of December 31 2020 and 2019:
Assets 2020 2019 Increase Decrease
Cash $ 72,680 $ 22,000 $50,680
Accounts receivable 84,360 68,680 15,680
Inventory 182,360 191,680 $9,320
Land 73,360 112,680 39,320
Equipment 262,360 202,680 59,680
Accumulated Depreciation-Equipment
(71,360) (44,680) 26,680
Total $603,760 $553,040
Liabilities and Stockholders' Equity
Accounts payable $ 36,360 $ 49,680 13,320
Bonds payable 150,000 200,000 50,000
Common stock ($1 par) 214,000 164,000 50,000
Retained earnings 203,400 139,360
Total $603,760 $553,040
b) The decrease in bonds is not a cash flow. The increase in Common Stock is not a cash flow. The two are exchanges. In calculating the free cash flow, the cash proceeds from sale of land were not taken into consideration because the sale was a one-off transaction and not part of the operating activities of Sarasota Corporation.
Deitz Corporation is projecting a cash balance of $33,300 in its December 31, 2019, balance sheet. Deitz’s schedule of expected collections from customers for the first quarter of 2020 shows total collections of $205,350. The schedule of expected payments for direct materials for the first quarter of 2020 shows total payments of $47,730. Other information gathered for the first quarter of 2020 is sale of equipment $3,330; direct labor $77,700, manufacturing overhead $38,850, selling and administrative expenses $49,950; and purchase of securities $15,540. Deitz wants to maintain a balance of at least $27,750 cash at the end of each quarter. Prepare a cash budget for the first quarter.
Answer:
Deitz Corporation
Cash Budget
For the Quarter ended March 31, 2020:
Beginning balance $33,300
Cash Collections From Customers 205,350
Sale of Equipment 3,330
Total available cash $241,980
Cash Payments:
Direct materials $47,730
Direct labor 77,700
Manufacturing overhead 38,850
Selling & Administrative 49,950
Purchase of Securities 15,540 $(229,770)
Ending Balance $12,210
Minimum Balance 27,750
Shortfall $15,540
Explanation:
Deitz Corporation uses this Cash Budget which it has prepared to understand its financial needs for the next quarter. For example, with the minimum balance of $27,750 most likely based on past experience the corporation will start making arrangements for some outside funds to the tune of $15,540 or more to meet its cash needs for the first quarter.
The following unadjusted trial balance is prepared at fiscal year-end for Nelson Company. Nelson company uses a perpetual inventory system. It categorizes the following accounts as selling expenses: Depreciation Expense—Store Equipment, Sales Salaries Expense, Rent Expense—Selling Space, Store Supplies Expense, and Advertising Expense. It categorizes the remaining expenses as general and administrative.
NELSON COMPANY Unadjusted Trial Balance January 31
Debit Credit
Cash $22,150
Merchandise inventory 13,000
Store supplies 5,100
Prepaid insurance 2,800
Store equipment 42,800
Accumulated depreciation—Store equipment $19,250
Accounts payable 17,000
Common stock 4,000
Retained earnings 25,000
Dividends 2,100
Sales 115,900
Sales discounts 2,100
Sales returns and allowances 2,000
Cost of goods sold 38,000
Depreciation expense—Store equipment 0
Sales salaries expense 12,900
Office salaries expense 12,900
Insurance expense 0
Rent expense—Selling space 8,000
Rent expense—Office space 8,000
Store supplies expense 0
Advertising expense 9,300
Totals $181,150 $181,150
Additional Information:
a. Store supplies still available at fiscal year-end amount to $2,550.
b. Expired insurance, an administrative expense, for the fiscal year is $1,720.
c. Depreciation expense on store equipment, a selling expense, is $6,500 for the fiscal year.
d. To estimate shrinkage, a physical count of ending merchandise inventory is taken. It shows $10,720 of inventory is still available at fiscal year-end.
Required:
a. Compute the current ratios as of January 31, 2017.
b. Prepare a multiple-step income statement for the year ended January 31.
c. Prepare a single-step income statement for the year ended January 31.
Answer:
a. Store supplies still available at fiscal year-end amount to $2,550.
Dr Supplies expense 2,550
Cr Supplies 2,550
b. Expired insurance, an administrative expense, for the fiscal year is $1,720.
Dr Insurance expense 1,720
Cr Prepaid insurance 1,720
c. Depreciation expense on store equipment, a selling expense, is $6,500 for the fiscal year.
Dr Depreciation expense 6,500
Cr Accumulated depreciation, equipment 6,500
d. To estimate shrinkage, a physical count of ending merchandise inventory is taken. It shows $10,720 of inventory is still available at fiscal year-end.
Dr Cost of goods sold 2,280
Cr Merchandise inventory 2,280
Cash $22,150
Merchandise inventory 10,720
Store supplies 2,550
Prepaid insurance 1,080
Store equipment 42,800
Accumulated depreciation—Store equipment $25,750
Accounts payable 17,000
Common stock 4,000
Retained earnings 25,000
Dividends 2,100
Sales 115,900
Sales discounts 2,100
Sales returns and allowances 2,000
Cost of goods sold 40,280
Depreciation expense—Store equipment 6,500
Sales salaries expense 12,900
Office salaries expense 12,900
Insurance expense 1,720
Rent expense—Selling space 8,000
Rent expense—Office space 8,000
Store supplies expense 2,550
Advertising expense 9,300
Totals $187,425 $187,425
a) current ratio = current assets / current liabilities = $36,050 / $17,000 = 2.12
c) Nelson company
Income Statement
For the month ended January 31, 202x
Revenues:
Net sales $111,800Expenses:
Cost of goods sold $40,280 Depreciation expense - equipment $6,500Sales salaries expense $12,900 Office salaries expense $12,900 Insurance expense $1,720 Rent expense - Selling space $8,000 Rent expense - Office space $8,000 Store supplies expense $2,550 Advertising expense $9,300 ($102,150)Operating income $9,650
b) Nelson company
Income Statement
For the month ended January 31, 202x
Sales:
Total sales $115,900 Sales discounts ($2,100 )Sales returns and allowances ($2,000 ) $111,800Cost of goods sold ($40,280)
Gross profit $71,520
Selling expenses:
Depreciation expense - equipment $6,500Sales salaries expense $12,900 Rent expense - Selling space $8,000 Store supplies expense $2,550 Advertising expense $9,300 ($39,250)S&A expenses:
Office salaries expense $12,900 Insurance expense $1,720 Rent expense - Office space $8,000 ($22,620)Operating income $9,650
The first budget customarily prepared as part of an entity's master budget is the _____ budget. a.cash b.production c.sales d.direct materials purchases
Answer:
c. sales
Explanation:
The master budget is a document that contains the aggregation of all lower-level, interrelated financial budgets and operating budgets produced by an organization and it comprises of a cash forecast, budgeted financial statements, profit and loss account and balance sheet and a financing plan.
The starting point in preparing a master budget is the preparation of the sales budget.
Hence, the first budget customarily prepared as part of an entity's master budget is the sales budget.
For each of the following actions, identify whether the method of risk assessment motivating the action is due to the value at risk or the standard deviation of an underlying probability distribution.A. You buy life insurance (Standard Deviation / Value At risk)B. You hire an investment advisor who specializes in international diversification in stock portfolios. ((Standard Deviation / Value At risk)C. In your role as a central banker, you provide emergency loans to illiquid intermediaries. ((Standard Deviation / Value At risk)D. You open a kiosk at the mall selling ice cream and hot chocolate. (Standard Deviation / Value At risk)
Answer:
Value at Risk is used to measure just how much is expected to be lost resulting from an investment over a period of time.
Standard Deviation is used to measure the risk of volatility in the returns of investments. It can measure idiosyncratic risk which is the risk inherent in an investment.
A. You buy life insurance. Value At risk.
Insurance has to do with Value at Risk to measure how much would have to be paid out.
B. You hire an investment advisor who specializes in international diversification in stock portfolios. Standard Deviation.
Diversification is based on the risk of stock volatility and is done to reduce idiosyncratic risk so this has to do with Standard deviation.
C. In your role as a central banker, you provide emergency loans to illiquid intermediaries. Value At Risk.
These illiquid intermediaries might be unable to pay back so the assessment needs to find out how much could potentially be lost.
D. You open a kiosk at the mall selling ice cream and hot chocolate. Standard Deviation.
These products will be sold in alternating seasons to ensure profitability is maintained. The idiosyncratic risk of selling only one of these was therefore targeted making this an example of Standard Deviation based risk assessment.
Business standards should be based on which of the following?
Answer: standards are based on the ultimate goals of a business
Explanation:
Standards set specialized goalsExamples-Financial standards
* Set goals for profit, cash flow and sale
-Quality control standards
*Set up production line check for defects in machinery or workmanship
Drs. Glenn Feltham and David Ambrose began operations of their physical therapy clinic, called Northland Physical Therapy, on January 1, 2017. The annual reporting period ends December 31. The trial balance on January 1, 2018, was as follows (the amounts are rounded to thousands of dollars to simplify):
Account Titles Debit Credit
Cash $ 6
Accounts Receivable 2
Supplies 2
Equipment 10
Accumulated Depreciation $3
Software 8
Accumulated Amortization 3
Accounts Payable 6
Notes Payable (short-term) 0
Salaries and Wages Payable 0
Interest Payable 0
Income Taxes Payable 0
Deferred Revenue 0
Common Stock 13
Retained Earnings 3
Service Revenue 0
Depreciation Expense 0
Amortization Expense 0
Salaries and Wages Expense 0
Supplies Expense 0
Interest Expense 0
Income Tax Expense 0
Totals $28 $28
Transactions during 2018 (summarized in thousands of dollars) follow:
Borrowed $13 cash on July 1, 2018, signing a six-month note payable.
Purchased equipment for $16 cash on July 2, 2018.
Issued additional shares of common stock for $6 on July 3.
Purchased software on July 4, $2 cash.
Purchased supplies on July 5 on account for future use, $8.
Recorded revenues on December 6 of $47, including $9 on credit and $38 received in cash.
Recognized salaries and wages expense on December 7 of $21; paid in cash.
Collected accounts receivable on December 8, $8.
Paid accounts payable on December 9, $9.
Received a $2 cash deposit on December 10 from a hospital for a contract to start January 5, 2019.
Data for adjusting journal entries on December 31:
Amortization for 2018, $3.
Supplies of $2 were counted on December 31, 2018.
Depreciation for 2018, $3.
Accrued interest of $1 on notes payable.
Salaries and wages incurred but not yet paid or recorded, $4.
Income tax expense for 2018 was $3 and will be paid in 2019.
Record journal entries for transactions (a) through (j).
Cash 13
Notes-payable (short term) 13
Equipment 16
Cash 16
Cash 6
Common Stock 6
Software 2
Cash 2
Supplies 8
Accounts Payable 8
Accounts Receivable 9
Cash 38
Service Revenue 47
Salaries and Wages Expense 21
Cash 21
Cash 8
Accounts Receivable 8
Accounts Payable 9
Cash 9
Cash 2
Deferred Revenue 2
Set up T-accounts for the accounts on the trial balance. Enter beginning balances and post the transactions (a)-(j), adjusting entries (k)-(p), and closing entry.
Prepare an unadjusted trial balance and a trial balance.
Question attached
Answer and Explanation:
Find attached
On its December 31, 2017, balance sheet, Calgary Industries reports equipment of $370,000 and accumulated depreciation of $74,000. During 2018, the company plans to purchase additional equipment costing $80,000 and expects depreciation expense of $30,000. Additionally, it plans to dispose of equipment that originally cost $42,000 and had accumulated depreciation of $5,600. The balances for equipment and accumulated depreciation, respectively, on the December 31, 2018 budgeted balance sheet are:
a) $450,000; $98,400.
b) $450,000; $104,000.
c) $408,000; $104,000.
d) $328,000; $74,000.
e) $408,000; $98,400.
Dodie Company completed its first year of operations on December 31. All of the year's entries have been recorded except for the following: At year-end, employees earned wages of $4,000, which will be paid on the next payroll date in January of next year. At year-end, the company had earned interest revenue of $1,500. The cash will be collected March 1 of the next year.
Required: 2. Prepare the required adjusting entry for transactions (a) and (b). (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)
Answer:
A. Dr Wages expense 4,000
Cr Wages payable 4,000
B. Dr Interest receivable 1,500
Cr Interest revenue 1,500
Explanation:
Preparation of Journal entries
A. Based on the information given we were told that the company employees earned wages of the amount of $4,000, which will be paid on in January of next year which means that the Journal entry will be:
Dr Wages expense 4,000
Cr Wages payable 4,000
B. Based on the information given we were told that the company had earned the amount of $1,500 as interest revenue which means that the Journal entry will be recorded as:
Dr Interest receivable 1,500
Cr Interest revenue 1,500
For Sheffield Corp., sales is $1660000 (8300 units), fixed expenses are $480000, and the contribution margin per unit is $80. What is the margin of safety in dollars
Answer:
$460,000
Explanation:
The computation of the margin of safety in dollars is shown below:-
Break even sales = fixed cost ÷ contribution per unit
= $480,000 ÷ $80
= 6,000 units
The Margin of safety in dollars = Total sales - Break even sales
= 8,300 - 6,000
= 2,300
sale price = $1660000 ÷ 8,300
= $200 per unit
margin of safety in dollars = 2,300 × $200
= $460,000
Each of the four independent situations below describes a sales-type lease in which annual lease payments of $120,000 are payable at the beginning of each year. Each is a finance lease for the lessee. (FV of $1, PV of $1, FVA of $1, PVA of S1, FVAD of $1 and PVAD of (Use appropriate factor(s) from the tables provided.)
Situation
1 2 3 4
Lease term (years) 9 9 10 10
Lessor's and lessee's interest rate 11$ 13$ 12% 12%
Residual value:
Estimated fair value 0 $54,000 $8,400 $54,000
Guaranteed by lessee 0 0 $8/,400 $64,000
Determine the following amounts at the beginning of the lease Round your intermediate and final answer to the nearest whole dollar amount. Answer the missing part.
Situation
1 2 3 4
A. The lessor's:
1. Lease payments $1,080,000 $1,080,000 $1,200,000 ________
2. Gross investment in the leas $1,080,000 $134,000,000 $1,208,400 1,264,000
3. Net Investment in the lease 737,534 713,828 762,095 779,996
B. The lessee's
4. Lease payments 1,080,000 1,080,000 1,200,000 ________
5. Right-of-use asset 737,534 713,828 759,390 ________
6. Lease payable 737,534 713,828 759,390 ________
Answer:
A) $1264000
B) 4) $1264000
5) $77996
6) $77996
Explanation:
Answer to The missing parts
A) under the Lessor's category
The lease payment for the 4th condition is missing and is calculated as
= ( $120000 * number of payments ) + residual value guaranteed by lessee
=( $120000 * 10 ) + $64000
= 1200000 + 64000 = $1264000
B) Under Lessee's category
4)minimum lease payment for the 4th condition
= ( $120000 * number of payments ) + residual value guaranteed by lessee
=( $120000 * 10 ) + $64000
= 1200000 + 64000 = $1264000
5) Right of use asset for the 4th condition ( this should not exceed fair value = ( $120000 * 6.32825 ) + ( $64000 * 0.32197 )
= $77996
6) Lease payable for the 4th condition ( this should not exceed fair value )
= ( $120000 * 6.32825 ) + ( $64000 * 0.32197 )
= $77996
Cushenberry Corporation had the following transactions. 1. Sold land (cost $12,000) for $15,000. 2. Issued common stock at par for $20,000. 3. Recorded depreciation on buildings for $17,000. 4. Paid salaries of $9,000. 5. Issued 1,000 shares of $1 par value common stock for equipment worth $8,000. 6. Sold equipment (cost $10,000, accumulated depreciation $7,000) for $1,200.
Required:
For each transaction above, (a) prepare the journal entry, and (b) indicate how it would affect the statement of cash flows using the indirect method.
Answer:
Entries are given
Explanation:
We will record assets and expenses on the debit as they increase during the year and will record liabilities and capital on the credit side as they increase during the year or vice versa.
Sold land (cost $12,000) for $15,000.
Dr Cash 15,000
Cr Land 12,000
Cr Gain on Sale 3,000
Increase investing cash flows by 15,000. and 3000 gain will be deducted from operating activities
Issued common stock
Dr Cash 20,000
Cr Common Stock 20,000
Increase financing cash flows by 20,000
Recorded depreciation on buildings for $17,000.
Dr Depreciation Expense 17,000
Cr Accumulated Depreciation 17,000
This will not affect cash flow.
Paid salaries of $9,000.
Dr Salaries Expense 9,000
Cr Cash 9,000
Decrease operating activities cash flow by $9,000.
Issued 1,000 shares of $1 par value common stock for equipment
Dr Equipment 8,000
Cr Additional paid-in capital Common Stock 7,000
Cr Common Stock 1,000
It doesn't involve any cash however affects the company financial position so it will be recorded in schedule of non cash financing and investing activities
Sold equipment (cost $10,000, accumulated depreciation $7,000) for $1,200.
Dr Cash 1,200
Dr Accumulated Depreciation 7,000
Dr Loss on Disposal 1,800
Cr Equipment 10,000
There would be an increased cash flow of $1,200 under investing activities.
The following information to perform the calculations below (using the indirect method).
Net income $401,000 Beginning accounts payable $119,000
Depreciation expense 97,000 Ending accounts payable 146,000
Beginning accounts receivable 420,000 Purchase of long-term assets 612,000
Ending accounts receivable 439,000 Issuance of long-term debt 220,000
Beginning inventory 516,000 Issuance of stock for cash 180,000
Ending inventory 550,000 Issuance of stock for long-term assets 110,000
Beginning prepaid insurance 42,000 Purchase of treasury stock 64,000
Ending prepaid insurance 48,000 Sale of long-term investment at cost 56,000
Calculate the amount of cash used by investing activities. Only enter the number. No brackets or negative signs required
Answer: -$556,000
Explanation:
Based on the information given in the question, the the amount of cash used by investing activities would be calculated as:
Purchase of long-term assets -612,000
Add: Sale of long-term investment at cost 56,000
The amount of cash used by investing activities would now be:
= -$612,000 + $56,000
= -$556,000
Ruiz Co. provides the following sales forecast for the next four months:
April May June July
Sales (units) 560 640 590 680
The company wants to end each month with ending finished goods inventory equal to 30% of next month's forecasted sales. Finished goods inventory on April 1 is 168 units. Assume July's budgeted production is 590 units. In addition, each finished unit requires six pounds (lbs.) of raw materials and the company wants to end each month with raw materials inventory equal to 30% of next month’s production needs. Beginning raw materials inventory for April was 1,051 pounds. Assume direct materials cost $4 per pound.
Required:
Prepare a direct materials budget for April, May, and June.
Answer:
Instructions are below.
Explanation:
We need to calculate the production required for each month:
Production= sales + desired ending inventory - beginning inventory
April= 560 + (640*0.3) - 168= 584
May= 640 + (590*0.3) - 192= 625
June= 590 + 680*0.3 - 177= 617
Now, we can prepare the direct material budget:
Purchases= production + desired ending inventory - beginning inventory
April (pounds):
Production= 584*6= 3,504
Desired ending inventory= (625*6)*0.3= 1,125
Beginning inventory= (1,051)
Total pounds= 3,578
Total cost= 3,578*4= $14,312
May (pounds):
Production= 625*6= 3,750
Desired ending inventory= (617*6)*0.3= 1,110.6
Beginning inventory= (1,125)
Total pounds= 3,735.6
Total cost= 3,735.6*4= $14,942.4
June:
Production= 617*6= 3,702
Desired ending inventory= (590*6)*0.3= 1,062
Beginning inventory= (1,110.6)
Total pounds= 3,653.4
Total cost= 3,653.4*4= $14,613.6
Agreement and disagreement among economists Suppose that Yakov, an economist from a research institute in Texas, and Ana, an economist from a school of industrial relations, are arguing over health insurance. The following dialogue shows an excerpt from their debate:
Ana: A popular topic for debate among politicians as well as economists is the idea of providing government assistance for health benefits.
Yakov: I think it is oppressive for the government to tax people who take care of themselves in order to pay for health insurance for those who are obese.
Ana: I disagree. I think government funding of health insurance is useful to ensure basic fairness. The disagreement between these economists is most likely due todifferences in values.
Despite their differences, with which proposition are two economists chosen at random most likely to agree?
A. Immigrants receive more in government benefits than they contribute in taxes.
B. Having a single income tax rate would improve economic performance.
C. Rent ceilings reduce the quantity and quality of available housing.
Answer: C. Rent ceilings reduce the quantity and quality of available housing.
Explanation:
Economists for all their differences will most likely agree that Rent Ceilings reduce the quality and quantity of available housing.
This is because it lowers the incentive for landlords to improve their housing if they know that they cannot charge enough to benefit from this improvement.
Landlords will also build lower quality housing or not go into housing construction at all because the rent ceiling might mean that they are not making enough return to pay for the construction of the house.
Journalize the following transactions by Bramble Printing Company. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select ""No Entry"" for the account titles and enter 0 for the amounts.)
1. Stockholders invest $87,000 cash to start the business.
2. Purchased three digital copy machines for $445,000, paying $108,000 cash and signing a 5-year, 6% note for the remainder.
3. Purchased $4,000 paper supplies on credit.
4. Cash received for photocopy services amounted to $7,300.
5. Paid $400 cash for radio advertising.
6. Paid $950 on account for paper supplies purchased in transaction 3.
7. Dividends of $1,400 were paid to stockholders.
8. Paid $2,100 cash for rent for the current month.
9. Received $2,200 cash advance from a customer for future copying.
10. Billed a customer for $350 for photocopy services completed.
(The Titles that are used on this chart are No. Account Titles and Explanation, Debit, Credit)
*LIST OF ACCOUNTS*
Accounts Payable, Accounts Receivable, Advertising Expense, Bonds Payable, Buildings, Cash, Common Stock, Dividends, Equipment, Gasoline Expense, Income Tax Expense, Income Taxes Payable, Insurance Expense, Land, Maintenance and Repairs expense, Mortgage Payable, No Entry, Notes Payable, Notes Receivable, Prepaid Insurance, Prepaid Rent, Rent expense, Rent revenue, repair services, retained earning, sales and wages expense, salaries and wages payable, sales revenue, service revenue, supplies, supplies expense, unearned service revenue, utilities expense, website
Answer: See attachment.
Explanation:
The journal is used to show the transactions that a particular company or business undertakes. The journal shows both the debit side and the credit side for the company.
The journal of the above transactions has been attached.
[accounting] A retailer completed a physical count of ending merchandise inventory. When counting inventory, employees did not include $2,200 of incoming goods shipped by a supplier on December 31 under FOB shipping point. These goods had been recorded in Merchandise Inventory, but they were not included in the physical count because they were in transit. This means shrinkage was incorrectly overstated by $2,200.
Compute the amount of overstatement or understatement for each of the following amounts for this period.
a. ending inventory
b. total assets
c. net income
d. total equity
Answer:
a. Ending inventory - UNDERSTATED by $2,200
The goods were shipped FOB shipping point which means that they should be included as inventory as soon as they are shipped by the supplier. As they were not, Inventory was understated by $2,200.
b. Total assets - UNDERSTATED by $2,200
Inventory is part of Assets so if Inventory is understated by $2,200 then so are Total Assets.
c. Net income - UNDERSTATED by $2,200
Ending Inventory is subtracted from Cost of Goods sold which is then subtracted from Revenue. As ending inventory was understated, that means Cost of Goods sold was Overstated and therefore had the effect of understating Revenue and by extension, Net Income.
d. Total equity - UNDERSTATED by $2,200
Net Income goes to Total equity as Retained earnings so if Net income is understated so also is Total equity.
The amount of understatement for ending inventory, total assets, net income, and total equity is $2200.
From the information given, the amount of overstatement or understatement for each amount for this period will be:
Ending inventory = $2200 = Understated Total assets = $2200 = Understated Net income = $2200 = Understated Total equity = $2200 = UnderstatedWhen inventory is understated, the assets will be understated too. Also, when net income is understated, total equity is understated too.
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The Polishing Department of Major Company has the following production and manufacturing cost data for September.Materials are entered at the beginning of the process.Production:Beginning Inventory 1,880 units that are 100% complete as to materials and 30% complete as to conversion costs;Units started during the period are 44,300;Ending inventory of 7,200 units 10% complete as to conversion costs.Manufacturing Costs:Beginning Inventory costs, comprised of $21,900 of materials and $37,162 of conversion costs;Materials costs added in Polishing during the month, $214,080;labor and overhead applied in Polishing during the month, $127,600 and $258,440, respectively.Required:1. Compute the equivalent units of production for materials and conversion costs for the month of September.Materials Conversion CostsThe equivalent units of production 2. Compute the unit costs for materials and conversion costs for the month. (Round unit costs to 2 decimal places, e.g. 2.25)Materials Conversion CostsUnit Costs 3. Determine the costs to be assigned to the units transferred out and in process. (Round unit costs to 2 decimal places, e.g. 2.25 and final answers to 0 decimal places.)Transferred Out $Ending work in process $
Answer:
1. Materials = 46,180 and Conversion Costs = 39,700
2.Materials = $5.11 and Conversion Costs = $10.66
3.Transferred Out = $614,715 and Ending work in process = $44,467
Explanation:
First, calculate the number of units completed and transferred to finished goods
Number of units completed and transferred to finished goods = Beginning Inventory Units + Units Started during the Period - Ending Inventory Units
Therefore,
Units completed and transferred = 1,880 + 44,300 - 7,200
= 38,980
Calculation of Equivalent Units of Production with respect to Materials and Conversion Costs
1. Materials
Ending Work In Process (7,200 × 100%) = 7,200
Completed and Transferred (38,980 × 100%) = 38,980
Equivalent Units of Production with respect to Materials = 46,180
2. Conversion Costs
Ending Work In Process (7,200 × 10%) = 720
Completed and Transferred (38,980 × 100%) = 38,980
Equivalent Units of Production with respect to Materials = 39,700
Calculation of the unit costs for materials and conversion costs for the month.
Unit Cost = Total Cost ÷ Total Equivalent Units
1. Materials
Unit Cost = ($21,900 + $214,080) ÷ 46,180
= $5.11 (2 decimal places)
2. Conversion Costs
Unit Cost = ($37,162 + $127,600 + $258,440 ) ÷ 39,700
= $10.66 (2 decimal places)
3. Total Unit Cost
Total Unit Cost = Materials + Conversion Costs
= $5.11 + $10.66
= $15.77
Calculation of costs to be assigned to the units transferred out and in process.
Transferred Out = Units Completed and Transferred × Total Unit Cost
= 38,980 × $15.77
= $614,715
Ending work in process = Materials Cost + Conversion Costs
= ($5.11 × 7,200) + ($10.66 × 720)
= $44,467
Managers and leaders perform many tasks as a result of their goals and objectives. Even though many tasks may be completed as a result of their responsibilities, each task may be categorized into one of four functions of management. Management is a process. This process is what allows managers and leaders to achieve organizational and personal goals. Included within this process are four functions of management. These four functions include planning, organizing, leading, and controlling. Each of these functions is an important aspect of the management process and must be implemented to achieve organizational goals.
Click and drag each item into the correct spot within the chart. Each item is one of the four functions of management.
Paul Santago Planning Organizing
Matthew Chloe
Kely Tomasz Leading Controlling
Ava Michele
Reset
Hi, your question is incomplete and unclear. However, I provided a brief explanation of the four(4) functions of management.
Explanation:
Planning function: The planning function basically involves the manager's role in setting objectives or goals and determining what course of action his organization should take in other to achieve the set objectives. Organizing function: The organizing function of management requires that managers (management) develop an effective organizational structure that fits into the organization, such as placing the right people on the job in other to ensure the accomplishment of the organization's objectives. Leading function: This function involves how the social influence of managers can inspire their employees to take needed action in other to achieve organizational objectives.Controlling function: This function requires managers to basically:set performance standards for employeescompare actual performance against set standardsif performance fails to meet set standards, take corrective action.A parent transfers inventory with a cost of $25,000 to its subsidiary at a transfer price of $40,000. The subsidiary resold 50% of this transferred inventory to outsiders before year-end. For the current year consolidated financial statement, how much gross profit should be deferred by Consolidation Entry G
Answer: $7,500
Explanation:
The profit made from the transfer is;
= 40,000 - 25,000
= $15,000
The subsidiary however only managed to resell 50% of this. The Consolidated entry therefore will show that 50% of the inventory remains so profit will have to be deferred till it is sold. The amount deferred is;
= 15,000 * 50%
= $7,500
Question 9 of 10
How should an annual business license fee be recorded in a journal entry?
A. As a credit, because it is an increased liability
B. As a credit, because it creates equity
C. As a debit, because it is an increased expense
D. As a debit, because it is a loss
SNBMIT
Answer:
Explanation:
As a debit, because it is an increased expence
Darryl, a cash basis taxpayer, gave 1,000 shares of Copper Company common stock to his daughter on September 29, 2011. Copper Company is a publicly held company that has declared a $1.00 per share dividend on September 30 every year for the last 20 years. Just as Darryl had expected, Copper Company declared a $1.00 per share dividend on September 30th, payable on October 15th, to stockholders of record as of October 10. The daughter received the $1,000 dividend on October 18, 2011. How does this information impact who must recognize the dividend as income?a. Darryl must recognize the $1,000 dividend as his income because he knew the dividend would be paid.b. Darryl must recognize $750 of the dividend because he owned the stock for three fourths of the year.c. Darryl must recognize the income of $1,000 because he constructively received the $1,000.d. The daughter must recognize the income because she owned the stock when the dividend was declared and she received the $1,000.e. None of the above
Answer:
d. The daughter must recognize the income because she owned the stock when the dividend was declared and she received the $1,000.
Explanation:
A stock of a corporation is the shares of all the ownership of the corporation earnings, assets.
The declaration date (or announcement date) of a stock is the date in which the board of directors release a statement about the dividend size and its payment date. Only the owners of the stock are the declaration date would receive the dividend payment.
Since the daughter owned the stock at the declaration date, she must recognize the income.
Rivera Company has several processing departments. Costs charged to the Assembly Department for November 2020 totaled $2,288,076 as follows. Work in process,November 1Materials $79,000Conversion costs 48,200$127,200Materials added 1,594,520Labor 225,800Overhead 340,556Production records show that 34,600 units were in beginning work in process 30% complete as to conversion costs, 662,700 units were started into production, and 24,100 units were in ending work in process 40% complete as to conversion costs. Materials are entered at the beginning of each process.
Answer:
Using the FIFO cost method:
beginning WIP 34,600 units
materials $79,000 (100% complete)
conversion $48,200 (30% complete, 70% remaining = 24,220 EU)
units started 662,700
materials added $1,594,520
conversion costs added $566,356
ending WIP 24,100
100% complete for materials
40% complete for conversion = 9,640 EU
units completed and transferred out = 34,600 + 662,700 - 24,100 = 673,200
units started and completed = 662,700 - 34,600 - 24,100 = 604,000
total equivalent units for the month:
materials 662,700
conversion = 24,220 + 604,000 + 9,640 = 637,860
total cost per EU:
materials = $1,594,520 / 662,700 = $2.4061
conversion = $566,356 / 637,860 = $0.8879
total = $3.294
cost of ending WIP:
materials = 24,100 x $2.4061 = $57,987
conversion = 9,640 x $0.8879 = $8,559.36 ≈ $8,559
total = $66,546
cost of units transferred out = $79,000 + $48,200 + $1,594,520 + $566,356 - $66,546 = $2,221,530
total units transferred out = 673,200
production cost per unit = $2,221,530 / 673,200 = $3.30
An operation that closes due to an imminent health hazard can reopen only after getting approval from what agency?
Answer:
the FDA (U.S. Food and Drug Administration)
Explanation:
The Food and Drug Administration is a federal agency, which is allowed under US law to prevent an operation from going on if it determines that an imminent health hazard still exists.
However, according to the FDA food code, "if immediate corrective action is taken, there is no "Imminent Health Hazard," meaning the operation can get approval from the agency to reopen.
Imminent Health Hazard means threat to life due to some product, procedure, events which need to stopped immediately. After FDA approval, operation can be restarted.
What do you mean by Imminent Health Hazard?FDA Food Code describes Imminent Health Hazard as the product, procedure, events that can posses threat or danger to life and requires immediate actions or suspension of action to prevent the loss.
The FDA(U.S. Food and Drug Administration) is the agency which looks after the Imminent Health Hazard. So when operations are ceased due to health hazard and after taking corrective measures and when no hazards are left, operations can be reopened after prior approval of FDA.
Therefore, it can be said that after FDA approval, operations can be started.
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We assume that in a village there are farmers, carpenters, and tailors, who provide the three essential goods: food, housing, and clothing. Suppose the farmers consume 2/5 of the food (produced by farmers), 1/3 of the housing (produced by carpenters) and 1/2 of the clothes (produced by tailors). The carpenter consumes 2/5 of the food, 1/3 of the housing, and 1/2 of the clothes. The tailors consume 1/5 of the food, 1/3 of the housing, and no clothes. Assume this is a closed Leontief model.
If we know that the tailors produce 560 units of clothes, then the farmers produce ___________units of food, and the carpenters produce_________ units of housing.
Answer:
The farmers produce 746 units.
The carpenters produce 746 units.
Explanation:
Leontief model is a model of economics for whole country. It helps to understand the effects of increased production on the economy. In the given scenario the farmers, carpenters and tailor maintain a ratio in which they produce goods. The equilibrium condition will be Ap = p. The ratio of farmer, carpenter and tailor will be 4:4:3 to achieve the equilibrium. If the tailor produces 560 units then farmer will produce 560 * 4 /3 and carpenter will produce 560 *4/3.