Answer:
Employment equity, as defined in federal Canadian law by the Employment Equity Act, requires federal jurisdiction employers to engage in proactive employment practices to increase the representation of four designated groups: women, people with disabilities, Aboriginal peoples, and visible minorities.
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For the coming year, Cleves Company anticipates a unit selling price of $100, a unit variable cost of $60, and fixed costs of $480,000.
Required:
1. Compute the anticipated break-even sales in units.
2. Compute the sales (units) required to realize a target profit of $240,000.
3. Construct a cost-volume-profit chart, assuming maximum sales of 20,000 units within the relevant range. From your chart, indicate whether each of the following sales levels would produce a profit, a loss, or break-even.
$1,200,000 SelectBreak-evenLossProfitItem 3
$1,000,000 SelectBreak-evenLossProfitItem 4
$800,000 SelectBreak-evenLossProfitItem 5
$400,000 SelectBreak-evenLossProfitItem 6
$200,000 SelectBreak-evenLossProfitItem 7
4. Determine the probable income (loss) from operations if sales total 16,000 units.
Solution :
1. The break even sales in units is given by :
Break even sales in units = [tex]$\frac{\text{fixed cost}}{\text{contribution per unit}}$[/tex]
Where, contribution per unit = selling price per unit - variable cost per unit
The anticipated break even sales in units of Cleaves company in the coming year is :
Break even sales in units = [tex]$\frac{480,000}{40}$[/tex]
Contribution per unit = $ 100 - $ 60
= $ 40
So the company anticipates its breakeven sales at 12,000 units.
2. In order tot earn profit the sales generated should overcome the breakeven point. The desired profit is $240,000, the sales required to earn the desired profit can be computed using the formula :
Desired sales in units = [tex]$\frac{\text{fixed cost + desired cost}}{\text{contribution per unit}}$[/tex]
[tex]$=\frac{480,000+240,000}{40}$[/tex]
= 18,000 units
Thus, the sales in units required to earn a profit of $ 240,000 are 18,000 units.
3. The sales in excess of the breakeven point would yield a profit on the contrary the sales below the breakeven point would result in a loss.
In the given sales in dollar = breakeven sales in units x selling price per unit
= 12,000 x 100
= $ 1,200,000
∴ the sales above $1,200,000 would result in a profit whereas the sales below $1,200,000 would result in loss.
The cost volume profit chart below indicates the profit, loss, breakeven at different sales levels :
Sales levels Result
1,200,000 Breakeven
1,000,000 Loss
800,000 Loss
400,000 Loss
200,000 Loss
4. The income on sale of 16,000 units is computed below :
Particulars Amount is $
Sales 1,600,000
Less : variable cost 960,000
Contribution 640,000
Less : Fixed cost 480,000
Profit 160,000
The break-even sales in units are calculated as follows:
What is Break Even Point ?Breakeven unit sales =
In this case, contribution per unit equals selling price per unit minus variable cost per unit.
The Cleaves Company's estimated break-even unit sales for the upcoming year are:
Breakeven unit sales =
Contribution per unit equals $100 minus $60.
= $ 40
The business therefore projects 12,000 units as its breakeven sales.
(2) 2. Sales must exceed the breakeven point in order to create a profit. The sales needed to achieve the desired profit, which is $240,000, can be calculated using the formula:
Ideally, sales would equal
= 18,000 units
Thus, the sales in units required to earn a profit of $ 240,000 are 18,000 units.
(3) 3. Sales beyond the breakeven threshold would result in a profit; sales below the breakeven point, on the other hand, would result in a loss.
Sales in dollars for the given period equal breakeven sales in units times selling price per unit.
= 12,000 x 100
= $ 1,200,000
Sales that exceed $1,200,000 generate a profit, whilst sales that go below that threshold generate a loss.
The following cost volume profit chart shows the profit, loss, and breakeven points at various sales levels:
Resulting sales levels
Breakeven is 1,000,000
1,000,000 Loss
800,000 Loss
400,000 Loss
200,000 Loss
4. The earnings from the sale of 16,000 units are calculated as follows:
Particulars The amount is $
Sales 1,600,000
Variable cost is 960,000 less.
640,000 dollars were contributed.
Less: 480,000 in fixed costs.
Gain of 160,000
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Bond X is a premium bond making semiannual payments. The bond has a coupon rate of 9.2%, a YTM of 7.2%, and has 17 years to maturity. Bond Y is a discount bond making semiannual payments. This bond has a coupon rate of 7.2%, a YTM of 9.2%, and also has 17 years to maturity. Assume the interest rates remain unchanged and both bonds have a par value of $1,000.
1. What are the prices of these bonds today?
2. What do you expect the prices of these bonds to be in one year?
3. What do you expect the prices of these bonds to be in three years?
4. What do you expect the prices of these bonds to be in eight years?
5. What do you expect the prices of these bonds to be in 12 years?
6. What do you expect the prices of these bonds to be in 17 years?
Answer:
I used an Excel spreadsheet to calculate the answers (see attached file):
1. What are the prices of these bonds today?
bond X = $1,194
bond Y = $830
2. What do you expect the prices of these bonds to be in one year?
bond X = $1,194
bond Y = $830
3. What do you expect the prices of these bonds to be in three years?
bond X = $1,175
bond Y = $844
4. What do you expect the prices of these bonds to be in eight years?
bond X = $1,131
bond Y = $879
5. What do you expect the prices of these bonds to be in 12 years?
bond X = $1,083
bond Y = $921
6. What do you expect the prices of these bonds to be in 17 years?
bond X = $1,046
bond Y = $1,036
asset- backed security definition.
Answer:
"asset-backed security is an investment security a bond or note which is collateralized by a pool of assets, such as loans, leases, credit card debt, royalties, or receivables. An is similar to mortgage-backed security, except that the underlying securities are not mortgage-based."
Given the following financial structure for Company S for all of 2016:
Common stock, $1 par value, 800,000 shares issued and outstanding all year.
Convertible preferred stock, 50,000 shares, $100 par value, 6% cumulative dividend, each share convertible into 5 shares of common stock.
Convertible bonds, $500,000 face value, 8% stated rate, each $1,000 bond is convertible into 20 shares of common stock.
Stock options, 100,000 options outstanding, each option convertible for one share of stock at an option price of $60 per share.
Additional information:
1. The convertible bonds were issued at par in 2015.
2. The average market price per share for the common stock was $80 for the year.
3. The income tax rate for Company S is 30 percent.
4. Net income for Company S for 2016 was $$2,600,000.
A. Calculate Basic EPS (carry calculations to 2 decimal places).
B. Show your calculations for the numerator and denominator effect of each of the above convertible securities.
C. From your calculations in Part B, complete the schedule to calculate the dilution index of each convertible security, then indicate the ranking (most dilutive = 1) of each convertible security.
D. Using the indexes above to incrementally evaluate the dilutive effect, calculate diluted earnings per share in the space provided on the answer sheet. Show the DEPS calculation at each incremental stage, and carry the calculation to 2 decimal places. CIRCLE the DEPS number that would be displayed in the financials.
Answer:
Explanation:
A.)
The Basic EPS can be determined by using the formula:
[tex]\mathtt{Basic \ EPS = \dfrac{Net \ income \ attributabe \ to\ common \ stock \ holders }{\text{common stock outstanding throughout the year}} }[/tex]
[tex]\text{Given Net income = \$2,600,000}[/tex]
[tex]\text{Net income available for common stock holders = }[/tex][tex]\text{ Net income given less dividend}[/tex]
[tex]\text{ to preferred holders of stock}[/tex]
[tex]\mathtt{=$2,600,000 - $100 \times 50000\times 6\%}[/tex]
[tex]=\$2,300,000[/tex]
[tex]\text{Common stock} = $800,000[/tex]
∴
[tex]\mathbf{Basic \ EPS = \dfrac{\$2,300,000}{800,000} }[/tex]
[tex]\mathbf{Basic \ EPS = \$2.88 \ per \ common \ stock}[/tex]
B.)
The calculations for the numerator and denominator effect are:
[tex]\text{Calculation of the effect on incremental EPS}[/tex]
Convertible on preferred stock [tex]\mathtt{=\dfrac{500,000 \times 100 \times 6\%}{50000\times 5}}[/tex]
[tex]=1.20[/tex]
Convertible Bond [tex]=\dfrac{500,000 \times 8\%\times 70\%}{\dfrac{500,000}{1000\times 20}}[/tex]
= 2.80
Stock options [tex]= \dfrac{0}{100,000- (100,000\times \dfrac{60}{80})}[/tex]
= 0
Determination of the numerator & denominator effect for each convertible securities shown above are:
Numerator (N) Denominator (D) Dilution index = N/D
Net income $2,600,000
Less: Preferred $300000
Dividend
Common stock A
Net income $2,300,000 800,000 2.875
Add: Stock
Options (B) 0 25000
Total (C) = (A + B) $2300000 825000 2.788
Add: Convertible
Bonds (D) 428000 10000
Total (E) = (C+D) $2328000 835000 2.787
Add: Convertible
Preferred Stock (F) $300000 250000
Total (E) + (F) $2628000 1085000 2.422
C.)
Particulars Dilutive Index Rank (most dilutive is 1.)
Stock Option 2.788 1
Convertible Bonds 2.787 3
Preferred Stock 2.422 2
D.)
From above, the convertibles are diluted EPS (DEPS)
[tex]\text{ DEPS =Net income available common stockholders + net tax dividend on convertible securities}[/tex]÷ [tex]\text{weighted average no. of common shares + effect of convertible stock + convertible stock options}[/tex]
[tex]\text{DEPS (1{st} stage) for only common stock}= \dfrac{2300000}{800000} = \$2.88}[/tex]
[tex]\text{DEPS (2{st} stage)with \ stock \ options}= \dfrac{2300000+0}{800000+25000} = \$2.788}[/tex]
[tex]\text{DEPS (3{st} stage)with \ stock \ options \& preferred \ stock }= \dfrac{2300000+300000+0}{800000+250000+25000} = \$2.42}[/tex]
Southwestern Edison Company leased equipment from Hi-Tech Leasing on January 1, 2018. Hi-Tech manufactured the equipment at a cost of $85,500.
Other information:
Lease term 4 years
Annual payments $31,000 on January 1 each year
Life of asset 4 years
Fair value of asset $110,890
Implicit interest rate 8%
Incremental rate 8%
There is no expected residual value.
Required:
Prepare appropriate journal entries for Hi-Tech Leasing for 2018. Assume a December 31 year-end. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Round your answers to the nearest whole dollar amounts.)
1.Record the lease.
2.Record the cash received
3.Record the interest revenue
The appropriate journal entries for Hi-Tech Leasing for 2018 will be :-
January 1, 2018
Debit Lease receivable $124,000
Credit Unearned interest revenue $38,500
Credit Equipment inventory $85,500
Debit Cash $31,000
Credit Lease receivable $31,000
December 31, 2018
Debit Unearned interest revenue $4,360
Credit Interest revenue $4,360
What is a journal entry?A journal entry is used to record a business transaction in a company's accounting records. A journal entry is typically recorded in the general ledger. However, it may also be recorded in a subsidiary ledger before being summarized and rolled forward into the general ledger.
Preparation of Journal entries for Hi-Tech Leasing for 2018:-
1. To record the lease on January 1, 2018
Debit Lease receivable $124,000
($31,000 x 4)
Credit Unearned interest revenue $38,500
(124,000-85,500)
Credit Equipment inventory $85,500
2. To record the cash received:-
Debit Cash $31,000
Credit Lease receivable $31,000
3. To record the interest revenue on December 31, 2018
Debit Unearned interest revenue $4,360
[($85,500- $31,000) x 8%]
Credit Interest revenue $4,360
Therefore, the necessary journal entries for Hi-Tech Leasing for 2018 is prepared.
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central bank definition
Explanation:
a national bank that provides financial and banking services for its country's government and commercial banking system, as well as implementing the government's monetary policy and issuing currency.
Sandhill Corporation was organized on January 1, 2019. During its first year, the corporation issued 1,900 shares of $50 par value preferred stock and 109,000 shares of $10 par value common stock. At December 31, the company declared the following cash dividends: 2019, $5,950; 2020, $13,800; and 2021, $28,000. (a) Show the allocation of dividends to each class of stock, assuming the preferred stock dividend is 7% and noncumulative.
Answer:
Sandhill Corporation
Allocation of dividends to each class of stock:
Year Total Dividends Preferred Stock Common Stock
2019 $5,950 $5,950 $0
2020 $13,800 $6,650 $7,150
2021 $28,000 $6,650 $21,350
Explanation:
a) Data and Calculations:
7% Preferred stock, $50 par value: Issued 1,900 = $95,000
Common stock, $10 par value: Issued 109,000 = $1,090,000
Dividends declared at December 31:
Year Dividends 7% Preferred Common Stock
2019 = $5,950 $6,650 Paid $5,950 $0
2020 = $13,800 $6,650 Paid $6,650 $7,150
2021 = $28,000 $6,650 Paid $6,550 $21,350
b) The preferred stock dividend is fixed at 7% of $95,000 yearly. Since it is noncumulative, the 2019 dividend will be limited to the dividends declared. For other years, the dividend for the preferred stock is fixed at $6,650 annually. Whatever remains after paying the preferred dividends is paid to the common stockholders.
For each of the following transactions that occur in their lives, identify whether it is included in the calculation of U.S. GDP as part of consumption (C), investment (I), government purchases (G), exports (X), or imports (M).
a. Kevin buys a bottle of Italian wine.
b. The state of Pennsylvania repaves highway PA 320, which goes through the center of Swarthmore.
c. Maria's father in Sweden orders a bottle of Vermont maple syrup from the producer's website.
d. Kevin's employer upgrades all of its computer systems using U.S.-made parts.
Answer:
a. Imports (M), b. Government Expenditure (G), c. Exports (X), d. Investment 'I'
Explanation:
a) 'Kevin buys a bottle of Italian wine' is a part of US Imports (M)
b) 'The state of Pennsylvania repaves highway PA 320' is a part of US Government Expenditure (G)
c) 'Maria's father in Sweden orders a bottle of Vermont maple syrup from the producer's website' is a part of US Exports (X)
d) 'Kevin's employer upgrades all of its computer systems using U.S.-made parts' is a part of US Investment 'I'
Blackwater Company has a foreign branch that earns income before income taxes of $500,000. Income taxes paid to the foreign government are $150,000 or 30%. Sales and other taxes paid to the foreign government are $100,000. Blackwater Company must include the $500,000 of foreign branch income in determining its home country taxable income. In determining its taxable income, Blackwater can choose between taking a deduction for all foreign taxes paid or a credit only for foreign income taxes paid. The corporate income tax rate in Blackwater’s’ home country is 40%.
Determine whether Blackwater would be better off taking a deduction of a credit for foreign taxes paid (FTC).
a. If foreign tax rate increased from 30% to 50%, how would it change your answer?
b. If foreign tax rate decreased from 30% to 10%, how would it change your answer?
b. If parent country’s tax rate decreased from 40% to 20%, how would it change your answer?
c. If local taxes were $250,000, how would it change your answer?
Answer:
Blackwater Company
a. It is generally better for Blackwater to take a credit for foreign taxes paid than taking it as a deduction.
A good look at the tables below show that from (a) to (c) there is no change in the above answer.
Explanation:
a) Data and Calculations:
Foreign income before taxes = $500,000
Foreign Taxes a deduction from home taxable income:
Foreign Foreign FTC as a Home Tax
Tax Rates Income Deduction Payable
30% $500,000 $150,000 $140,000 ($500,000 - $150,000*40%)
50% $500,000 $250,000 $100,000 ($500,000-$250,000*40%)
10% $500,000 $50,000 $180,000 ($500,000 - $50,000*40%)
30% $500,000 $150,000 $70,000 ($500,000 - $150,000*20%)
30% $500,000 $150,000 $250,000
Foreign Taxes treated as a credit:
Foreign Foreign FTC as a Home Tax
Tax Rates Income Home Tax (40%) Credit Payable
30% $500,000 $200,000 (40%) $150,000 $50,000
50% $500,000 $200,000 (40%) $250,000 ($50,000)
10% $500,000 $200,000 (40%) $50,000 $150,000
30% $500,000 $100,000 (20%) $150,000 ($50,000)
30% $500,000 $250,000 (0%) $150,000 $100,000
How fast do you guys help students answer questions?
Answer:
it depends on who is answering, what the question is, and what you want in the question. regularly answers come within 5 minutes, but if its really complicated then those questions almost never get answered
The information below pertains to Barkley Company for 2015.
Net income for the year $2,240,000
9% convertible bonds issued at par ($1,000 per bond); each bond is convertible into 30 shares of common stock 2,112,000
6% convertible, cumulative preferred stock, $100 par value; each share is convertible into 3 shares of common stock 4,707,000
Common stock, $10 par value 6,959,000
Tax rate for 2015 45%
Average market price of common stock $25 per share
There were no changes during 2015 in the number of common shares, preferred shares, or convertible bonds outstanding. There is no treasury stock. The company also has common stock options (granted in a prior year) to purchase 75,800 shares of common stock at $15 per share.
(a) Compute basic earnings per share for 2015. (Round answer to 2 decimal places, e.g. $2.55.)
Basic earnings per share
$
(b) Compute diluted earnings per share for 2015. (Round answer to 2 decimal places, e.g. $2.55.)
Diluted earnings per share
$
Michelle Hamilton and Bill Rossi decide to form a partnership. Hamilton invests $35,000 cash and accounts receivable of $30,000 less allowance for doubtful accounts of $2,000. Rossi contributes $25,000 cash and equipment having a $6,000 book value. It is agreed that the allowance account should be $3,000 and the fair value of the equipment is $10,000. Prepare the necessary journal entry to record the formation of the partnership.
Answer:
Dr Cash $60,000
Dr Accounts Receivable$30,000
Dr Equipment $10,000
Cr Allowance for Doubtful Accounts $3,000
Cr Hamiltion, Capital $62,000
Cr Rossi, Capital $35,000
Explanation:
Preparation to record the necessary journal entry to record the formation of the partnership.
Dr Cash $60,000
($35,000 + $25,000)
Dr Accounts Receivable$30,000
Dr Equipment $10,000
Cr Allowance for Doubtful Accounts $3,000
Cr Hamiltion, Capital $62,000
($35,000 + $30,000 – $3,000)
Cr Rossi, Capital $35,000
($25,000 + $10,000)
A food worker has prepared a large pot of rice that must be cooled. How should the food worker cool the rice safely?
Answer:
Cover the pot and leave it at room temperature.
Explanation:
That's how a food worker would cool rice safely.
Answer: Cover the pot and leave it at room temperature.
Explanation: took the test
Flexible Budget for Selling and Administrative Expenses for a Service Company Cloud Productivity Inc. uses flexible budgets that are based on the following data: Sales commissions 14% of sales Advertising expense 18% of sales Miscellaneous administrative expense $6,500 per month plus 12% of sales Office salaries expense $28,000 per month Customer support expenses $12,000 per month plus 20% of sales Research and development expense $30,000 per month Prepare a flexible selling and administrative expenses budget for March for sales volumes of $400,000, $500,000, and $600,000. (Use Exhibit 5 as a model.)
Answer:
Selling and administrative expenses budget for March
Sales Volume $400,000 $500,000 $600,000
Sales commissions at 14 % $56,000 $70,000 $84,000
Advertising expense at 18% $72,000 $90,000 $108,000
Miscellaneous at $6,500 + 12% $54,500 $66,500 $78,500
Office salaries at $28,000 $28,000 $28,000
Customer support at $12,000 + 20% $92,000 $112,000 $132,000
Research and development at $30,000 $30,000 $30,000
Total $332,500 $396,500 $460,500
Explanation:
A flexible is a budget that is adjusted to the actual activity. Thus, adjust the costs items to the appropriate Sales Volumes.
Check my workCheck My Work button is now enabledItem 15 Time Remaining 2 hours 27 minutes 1 second02:27:01 Exercise 8-16 Direct Materials and Direct Labor Budgets [LO8-4, LO8-5] The production department of Zan Corporation has submitted the following forecast of units to be produced by quarter for the upcoming fiscal year: 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter Units to be produced 5,000 8,000 7,000 6,000 In addition, 6,000 grams of raw materials inventory is on hand at the start of the 1st Quarter and the beginning accounts payable for the 1st Quarter is $2,880. Each unit requires 8 grams of raw material that costs $1.20 per gram. Management desires to end each quarter with an inventory of raw materials equal to 25% of the following quarter’s production needs. The desired ending inventory for the 4th Quarter is 8,000 grams. Management plans to pay for 60% of raw material purchases in the quarter acquired and 40% in the following quarter. Each unit requires 0.20 direct labor-hours and direct laborers are paid $11.50 per hour. Required: 1.&2. Calculate the estimated grams of raw material that need to be purchased and the cost of raw material purchases for each quarter and for the year as a whole. 3. Calculate the expected cash disbursements for purchases of materials for each quarter and for the year as a whole. 4. Calculate the estimated direct labor cost for each quarter and for the year as a whole
Answer:
Zan Corporation
Production Department
Quarters 1st 2nd 3rd 4th Total
1. Raw materials 50,000g 62,000g 54,000g 44,000g 210,000g
Purchased
2. Cost of purchases $60,000 $74,400 $64,800 $52,800 $252,000
3. Total disbursement $38,880 $68,640 $68,640 $57,520 $233,680
4. Direct labor costs $11,500 $18,400 $16,100 $13,800 $59,800
Explanation:
a) Data and Calculations:
Forecast Production
Quarters 1st 2nd 3rd 4th Total
Units to be produced 5,000 8,000 7,000 6,000 26,000
Grams required 40,000g 64,000g 56,000g 48,000g 208,000
Beginning Inventory 6,000g 16,000g 14,000g 12,000g 6,000g
Raw materials purchase 50,000g 62,000g 54,000g 44,000g 210,000g
Ending Inventory 19,200g 16,800g 14,400g 9,600g
Cost of purchases $60,000 $74,400 $64,800 $52,800 $252,000
Beginning Inventory cost 7,200 19,200 16,800 14,400
Total Cost of materials $67,200 $93,600 $81,600 $67,200
Cost of materials used $48,000 $76,800 $67,200 $57,600
Grams required by 1 unit 8 gm
Cost of 1 gm = $1.20
Ending Raw materials
25% of next quarter's 16,000gm 14,000gm 12,000gm 8,000gm
Accounts Payable
Beginning balance $2,880
Cost of purchases $60,000 $74,400 $64,800 $52,800 $252,000
Cash Disbursement for purchases of materials:
Cash Payment: 1st 2nd 3rd 4th Total
60% quarter acquired 36,000 44,640 38,880 31,600
40% in ffg quarter 2,880 24,000 29,760 25,920
Total disbursement $38,880 $68,640 $68,640 $57,520 $233,680
Cost of direct labor:
Each unit requires 0.20 direct labor-hours at $11.50 per hour
Quarters 1st 2nd 3rd 4th Total
Units to be produced 5,000 8,000 7,000 6,000 26,000
Total direct labor-hours 1,000 1,600 1,400 1,200 5,200
Direct labor costs $11,500 $18,400 $16,100 $13,800 $59,800
During 2019, equipment with a book value of $49,000 and an original cost of $255,000 was sold at a loss of $4,800. 1. How much cash did Anders receive from the sale of equipment? 2. How much depreciation expense was recorded on equipment during 2019? 3. What was the cost of new equipment purchased by Anders during 2019?
Answer:
1) 44200
2) & 3) Balancing figure of provision for depreciation account, equipment account give depreciation on equipment sold, new equipment purchased.
Explanation:
1) Cash received for sale of equipment = Current Book Value - Loss at sale
49000 - 4800 = 44200
2) 'Depreciation on equipment for current year' can be solved by making - equipment ac & provision for depreciation account.
Equipment opening balance at dr side, closing balance at cr side ; & provision opening balance cr side, closing balance dr side. Provision for depreciation ac dr balancing figure, is the depreciation on sold asset upto 2015, transferred to asset account cr side.3) Depreciation (transferred), Loss on sale, & sale amount credited to equipment ac. Balancing figure on dr side of equipment ac shows new equipment purchased during the year.
Why is it important to consider how you will spend your retirement when planning for retirement?
Answer:
Retirement planning is important because it can help you avoid running out of money in retirement. Your plan can help you calculate the rate of return you need on your investments, how much risk you should take, and how much income you can safely withdraw from your portfolio.
Explanation:
describe the advantages and disadvantages of using a certificate of deposit (cd) to save money.
Explanation:
Advantages of a CD
Flexible Terms: The terms and the amounts that can be deposited into a CD are flexible. If you are not willing to tie up your money for a long time, you can easily opt for a shorter term. At the end of a CD term, you can renew that CD or start a new one.
Safety: CDs that are available from a federally insured institution are generally insured up to $250,000. This takes much of the risk out of the investment.
Better Return Than Saving Accounts: Since the CD holder is not allowed to withdraw money freely like savings account holders, a CD is often more valuable to the financial institution. For this reason, the interest rate offered to a CD holder is higher than a traditional savings account.
Wide Selection: You can get a CD at various maturities and terms from different financial institutions. Because of the diversity of CDs, investors can find a CD that meets their individual needs.
Fixed, Predictable Return: The investor can be sure about getting a specific yield at a specific time. Even if the interest rates come down to a broader economy, the CD rate will remain constant. You will be able to easily determine the rate at which your balance will grow, thus making financial planning easy.
Disadvantages of a CD
Limited Liquidity: The owner of a CD cannot access their money as easily as a traditional savings account. To withdrawal money from a CD before the end of the term requires that a penalty has to be paid. This penalty can be in the form of lost interest or a principal penalty. To increase flexibility, the investor can create a CD Ladder, which is composed of CDs with different maturity dates and terms. With a laddering strategy, you have more options to access your CD savings at different intervals of time.
Inflation Risk: CD rates may be lower than the rate of inflation. This means that your money may lose its purchasing power over time if interest gains are outdone by inflation rates.
With these advantages and disadvantages in mind, it is wise to consider that CD advantages usually outweigh the disadvantages. CDs allow you to grow your savings without hassle. You can easily compare different types of CDs with the help of online resources, and you can find one that best suits your needs.
Summary of Certificates of Deposits
Certificates of Deposit (CD) are useful for people looking for a way to save money while earning a relatively high interest. This not only helps you save money, but also earns you interest without requiring any effort on your part. The disadvantages of CD’s are minor and typically outweighed by their
What are the benefits of multiple marketing channels? Are there any disadvantages?
Inventory records for Dunbar Incorporated revealed the following:
Date Transaction Number Unit
of Units Cost
Apr. 1 Beginning inventory 550 $2.33
Apr. 20 Purchase 310 2.68
Dunbar sold 560 units of inventory during the month. Ending inventory assuming weighted-average cost would be:__________.
a. $737.
b. $694.
c. $817.
d. $752.
Answer:
a. $737.
Explanation:
The computation of the ending inventory using weighted average cost is shown below:
But before that first determine the average cost per unit
= (Beginning cost + purchase cost) ÷ (Beginning units + purchased units)
= (550 × $2.33 + 310 × $2.68) ÷ (550 units + 310 units)
= ($1,281.5 + $830.8) ÷ (860 units)
= $2.46
Now the ending inventory is
= (860 units - 560 units) × $2.46
= $737
Theodora attended an interview for a job with a manufacturing firm. As she met all the minimum requirements for the post, she was not surprised when she received a formal job offer. However, a few days later, the firm informed her that the job offer had been revoked because the manager in that department felt that women should not work in a manufacturing environment. The firm assured her that the matter was nothing personal and wished her luck for her career.
Which of the following laws has the manufacturing firm violated?
A. Title VII of the 1964 Civil Rights Act
B. Americans with Disabilities Act
C. Worker Adjustment and Retraining Notification Act
D. Age Discrimination in Employment Act
E. Fair Labor Standards Act
Answer:
A. Title VII of the 1964 Civil Rights Act
Explanation:
Title VII of the Civil Rights Act of 1964 can be regarded as a federal law which offer protection to employees from discrimination from some particular characteristics such as race, national origin as well as color, even religion.
Nancy, the owner of a very successful hotel chain in the Southeast, is exploring the possibility of expanding the chain into a city in the Northeast. She incurs $35,000 of expenses associated with this investigation. Based on the regulatory environment for hotels in the city, she decides not to expand. During the year, she also investigates opening a restaurant that will be part of a national restaurant chain. Her expenses for this are $53,000. The restaurant begins operations on September 1.
Determine the amount Nancy can deduct in the current year for investigating these two businesses.
Answer:
$3,133.
As regard to opening a restaurant, investigation expense = 53,000 - 2000 = $51,000.
Explanation:
Before diving straight into the solution to this problem, let's take out some of the parameters given in the question above.
=> Nancy incurs $35,000 of expenses associated with the investigation of the possibility of expanding the chain into a city in the Northeast.
=> Nancy expenses for investigates opening a restaurant that will be part of a national restaurant chain are $53,000.
The first thing to do right now is to determine the value for the investigation as regard to the opening of a restaurant = [ 2000 × (51,000/180 months) × 4] = $3,133.
The next thing is to determine the value for the deduction which is available. This can be done below as:
The amount Nancy can deduct in the current year for investigating these two businesses = 5000 - [ 53000 - 50000] = $2, 000
As regard to opening a restaurant, investigation expense = 53,000 - 2000 = $51,000.
Question 7 (4 points)
Saved
Which of the following inestments would be considered the most liquid?
Question 7 options:
Real Estate
A one year CD
A standard savings account
A 401k
Crane Company adopted the dollar-value LIFO method of inventory valuation on December 31, 2019. Its inventory at that date was $1120000 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 $1271000 108 December 31, 2021 1417000 126 December 31, 2022 1623000 131 What is the cost of the ending inventory at December 31, 2020 under dollar-value LIFO
Answer:
See below
Explanation:
Crane corporation
Ending inventory
2019 $1,120,000
2020 $1,271,000/1.08 = $1,176,852
Ending inventory [$1,120,000+ (1,176,852 - $1,120,000)× 1.08]
= [$1,120,000 + $61,400]
= $1,181,400
2021 $1,417,000/1.26 = $1,124,603
2022 $1,623,000/1.31 = $1,238,931
Ending inventory [$1,124,603 + ($114,328 × 1.31)]
= $1,124,603 + $149,770
= $1,274,373
Therefore, the cost of the ending inventory at December 31, 2020 under dollar value LIFO would be $1,274,373
The Assembly Department started the month with 25,300 units in its beginning work in process inventory. An additional 310,300 units were transferred in from the prior department during the month to begin processing in the Assembly Department. There were 30,300 units in the ending work in process inventory of the Assembly Department. How many units were transferred to the next processing department during the month
Answer:
305,300 units
Explanation:
The computation of the number of units that should be transferred to the next processing department is given below:
As we know that
Opening inventory +Transferred in inventory = Transferred out inventory + ending inventory
25,300 units + 310,300 units = Transferred out inventory + 30,300 units
So, the Transferred out inventory is
= 25,300 units + 310,300 units - 30,300 units
= 305,300 units
On July 1, 2020, Bramble Inc. made two sales.
1. It sold land having a fair value of $905,820 in exchange for a 4-year zero-interest-bearing promissory note in the face amount of $1,425,321. The land is carried on Ayayai's books at a cost of $599,100.
2. It rendered services in exchange for a 3%, 8-year promissory note having a face value of $409,970 (interest payable annually). Ayayai Inc. recently had to pay 8% interest for money that it borrowed from British National Bank. The customers in these two transactions have credit ratings that require them to borrow money at 12% interest.
Required:
Record the two journal entries that should be recorded by Bramble Inc. for the sales transactions above that took place on July 1, 2020.
Answer:
Bramble Inc.
Journal Entries:
July 1, 2020:
1.
Debit Long-term Note Receivable $1,425,321
Credit Land $599,100
Credit Interest Receivable $519,501
Credit Gain from Sale of Land $306,720
To record the sale of land for a 4-year zero-interest-bearing note.
2.
Debit Long-term Note Receivable $409,970
Credit Service Revenue $323,634
Credit Interest Receivable $86,336
To record the rendering of services in exchange for a 3%, 8-year note.
Explanation:
a) Data and Analysis:
1. Long-term Note Receivable $1,425,321
Land $599,100
Interest Receivable $519,501 ($1,425,321 - $905,820)
Gain from Sale of Land $306,720 ($905,820 - $599,100)
2. Long-term Note Receivable $409,970
Service Revenue $323,634
Interest Receivable $86,336
NB: The interest receivable and the present value of the service revenue for 2 were obtained from an online financial calculator, using the future value of $409,970 and 3% interest rate for 8 years.
An investor purchased a "par bond" for $300 with the principal $300. Over n = 5 years the bond will pay 8% coupon annually. Find the IRR of the cash flow stream (also called Yield to Maturity).
Answer:
8%
Explanation:
Internal rate of return is the discount rate that equates the after-tax cash flows from an investment to the amount invested
IRR can be calculated with a financial calculator
Cash flow in year 0 = $-300
Cash flow each year from year 1 to 4 = [tex]\frac{8}{100}[/tex] × $300 = $24
Cash flow in year 5 = $300 + 24 = $324
IRR = 8%
To find the IRR using a financial calculator:
1. Input the cash flow values by pressing the CF button. After inputting the value, press enter and the arrow facing a downward direction.
2. After inputting all the cash flows, press the IRR button and then press the compute button.
Choose a real or made up example of a company, and describe at least three variable costs the company has.
Steve's Outdoor Company purchased a new delivery van on January 1 for $47,000 plus $4,000 in sales tax. The company paid $13,000 cash on the van (including the sales tax), with the $38,000 balance on credit at 8 percent interest due in nine months (on September 30). On January 2, the company paid cash of $900 to have the company name and logo painted on the van. On September 30, the company paid the balance due on the van plus the interest. On December 31 (the end of the accounting period), Steve's Outdoor recorded depreciation on the van using the straight-line method with an estimated useful life of 5 years and an estimated residual value of $4,700.
Answer:
Steve's Outdoor Company purchased a new delivery van on January 1 for $47,000 plus $4,000 in sales tax. The company paid $13,000 cash on the van (including the sales tax), with the $38,000 balance on credit at 8 percent interest due in nine months (on September 30).
January 1, 202x, delivery van purchased
Dr Vehicles 51,000
Cr Cash 13,000
Cr Notes payable 38,000
The sales tax increases the asset's historical cost
On January 2, the company paid cash of $900 to have the company name and logo painted on the van.
January 2, 202x, company's logo was painted on the delivery van
Dr Vehicles 900
Cr Cash 900
On September 30, the company paid the balance due on the van plus the interest.
September 30, 202x, notes payable cancelled
Dr Notes payable 38,000
Dr Interest expense 2,280
Cr Cash 40,280
On December 31 (the end of the accounting period), Steve's Outdoor recorded depreciation on the van using the straight-line method with an estimated useful life of 5 years and an estimated residual value of $4,700.
December 31, 202x, depreciation expense
Dr Depreciation expense 9,400
Cr Accumulated depreciation, vehicles 9,400
Depreciable value = $51,700 - $4,700 = $47,000
Depreciation expense per year = $47,000 / 5 = $9,400
what is Asset-Backed Security? in your own words.
Explanation:
Well, an asset banked security is a security whose income payments and hence value & derived from AND collateralized by specified pool of underlying assets, the pool assets is typically a group of small & illiquid assets which are unable to be sold individually.
if that makes any sense, hope it helps