Answer:
A. bank teller
Explanation:
bank teller is a person who manages deposits and withdrawls
On January 1, 2020, Doone Corporation acquired 80 percent of the outstanding voting stock of Rockne Company for $448,000 consideration. At the acquisition date, the fair value of the 20 percent noncontrolling interest was $112,000, and Rockne's assets and liabilities had a collective net fair value of $560,000. Doone uses the equity method in its internal records to account for its investment in Rockne. Rockne reports net income of $170,000 in 2021. Since being acquired, Rockne has regularly supplied inventory to Doone at 25 percent more than cost. Sales to Doone amounted to $230,000 in 2020 and $330,000 in 2021. Approximately 30 percent of the inventory purchased during any one year is not used until the following year.
Requied:
a. What is the noncontrolling interest's share of Rockne's 2021 income?
b. Prepare Doone's 2021 consolidation entries required by the intra-entity inventory transfers
Answer:
(A). $32,800
(B). Entries are shown below.
Explanation:
(A) According to the scenario, computation of the given data are as follows,
Net income of Rockne Company in 2021 = $170,000
Unrealized profit 2020 = $230,000 × 30% × 20% = $13,800
Unrealized profit 2021 = $330,000 × 30% × 20% = $19,800
So, Total income = $170,000 + $13,800 - $19,800 = $164,000
Now, noncontrolling interest's share of Rockne's 2021 income can be calculated as follows,
NCI share of Rockne's 2021 income = Total income × 20%
= $164,000 × 20%
= $32,800
(B). Journal entries for the given data are as follows,
1. Retained Earnings A/c Dr. $13,800
To, COG sold A/c. $13,800
( Being event *G entry is recorded)
2. Sales A/c Dr. $330,000
To, COG sold A/c. $330,000
( Being event TI entry is recorded)
3. COG sold A/c Dr. $19,800
To, Inventory A/c. $19,800
( Being event G entry is recorded)
Differences between pretax accounting income and taxable income were as follows during 2021: ($ in millions) Pretax accounting income $ 400 Permanent difference (34 ) 366 Temporary difference (26 ) Taxable income $ 340 The cumulative temporary difference as of the end of 2021 is $80 million (also the future taxable amount). The enacted tax rate is 25%. What is the deferred tax asset or liability to be reported in the balance sheet
Answer:
20 million
Explanation:
Calculation to determine the deferred tax asset or liability to be reported in the balance sheet
Using this formula
Deferred tax asset or liability=cumulative temporary difference as of the end of 2021 *tax rate
Let plug in the formula
Deferred tax asset or liability= $80 million *25%
Deferred tax asset or liability=20 million
Therefore the deferred tax asset or liability to be reported in the balance sheet is $20 million
The cafeteria of a prominent university in Carson, California hires students to assist in its three shifts of operations: breakfast, lunch, and dinner. In order to provide good customer service, the cafeteria has a policy that the number of students hired for the lunch shift must exactly equal (no more and no less) to the combined total number of students hired for the other two (that is, breakfast AND dinner) shifts. Based on these information, if Bis the number of students hired for the breakfast shift, L is the number of students hired for the lunch shift, and is the number of students hired for the dinner shift, then the constraint used in a Linear Programming (LP) problem to describe this situation is :________
A. B = L + D
B. L - B + D
C. D - B + L
D. Not enough information given to answer this question
E. None of the above please continue on the next page
Answer:
B. L - B + D
Explanation:
There are three different shifts of operation, Lunch, breakfast and dinner. The liner programming constraint is that lunch total must be equal to the sum of other two shifts. The constraint equation is formed to identify the number of students need to be hired for each shift.
Illustrate the effects of each of the transactions on the accounts and financial statements of Snipes Company.
June 8. Snipes Company sold merchandise on account to Beejoy Company, $18,250, terms FOB destination, 2/15, n/eom. The cost of the merchandise sold was $10,000. Snipes Company paid transportation costs of $400 for delivery of the merchandise.
Answer:
Snipes Company
Effects of each transaction on the accounts and the financial statements of Snipes Company:
Balance Sheet Income Statement Statement of
Cash Flows
Assets = Liabilities + Equity Revenue - Expense = Profit
+ $18,250 = 0 + $18,250 + $18,250 - 0 + $18,250
Accounts receivable $18,250 Sales revenue $18,250
Assets = Liabilities + Equity Revenue - Expense = Profit
-$10,000 = 0 - $10,000 0 - $10,000
Cost of goods sold $10,000 Inventory $10,000
Assets = Liabilities + Equity Revenue - Expense = Profit
-$400 0 -$400 0 -$400 -$400 Operating activity
Transportation-out expense $400 Cash $400
Explanation:
a) Data and Analysis:
Accounts receivable $18,250 Sales revenue $18,250
Cost of goods sold $10,000 Inventory $10,000
Transportation-out expense $400 Cash $400
Clothing Company wants to produce a new line of light weight winter coats. They currently have 2 models of winter coats: a medium weight winter coat and a heavy weight winter coat. They currently sell 55,500 medium weight winter coats each year at a price of $250 per coat. They currently sell 80,200 heavy weight winter coats each year at a price of $320 per coat. If the clothing company decides to sell the light weight winter coat, then they expect to sell 35,700 coats at a price of $190 per coat. If Clothing company sells the light weight winter coat, then they expect to sell only 50,200 medium weight winter coats and 70,800 heavy weight winter coats. What is the incremental revenue generated from potential project
Answer:
Clothing Company
The incremental revenue generated from potential project is:
= $2,450,000.
Explanation:
a) Data and Calculations:
Alternative 1 Alternative 2
Units to be sold:
Sale of light-weight winter coat 35,700
Sale of medium weight winter coat 55,500 50,200
Sale of heavy weight winter coat 80,200 70,800
Total coats sold 135,700 156,700
Selling prices:
Lightweight winter coat = $190 per coat
Medium weight winter coat = $250 per coat
Heavy weight winter coat = $320 per coat
Revenue from Sales:
Alternative 1 Alternative 2 Increment
Units to be sold:
Light-weight winter coat $6,783,000 $6,783,000
(35,700*$190)
Medium weight winter coat $13,875,000 12,550,000 (1,325,000)
(55,500*$250) (50,200*$250)
Heavy weight winter coat 25,664,000 22,656,000 (3,008,000)
(80,200*$320) (70,800*$320)
Total sales revenue $39,539,000 $41,989,000 $2,450,000
b) The computations show that Clothing Company would earn additional $2,450,000 in revenue if it embarked on the new project of making and selling 35,700 lightweight winter coats.
The broker has noticed that a great number of people who are buying in the neighborhood where his listing is located speak Russian. He also noticed a Russian grocery store right by the neighborhood that was attractive. He decides to stop the advertising the property and started advertising the property on two different Russian internet sites. This is:________
a) acceptable because it is not print media
b) unnacceptable due to its discrimnatory nature
c) acceptable if the advertisement includes no preferential language
d) the only appropriate way to market property in this neighborhood
Answer:
c) acceptable if the advertisement includes no preferential language
Explanation:
In the given case since it is mentioned that grocery store was attractive and he decided to stop the advertising of the property and begins the advertising on two distinct russian internet site so this would be acceptable in the case when the advertisement does not involve any kind of preferential language
Therefore the option c is correct
Variance analysis reports can be prepared to examine the difference between budgeted and actual figures for:
Production in terms of cost, quantity and quality
Sales
Profit
Income per sales dollar
Growth rate
Required:
Complete the following variance analysis report.
Variance Analysis Report Actual Budget Variances
REVENUE 320,000 318,750
Direct Expense (variable) 101,000 100,000
Allocated general expenses (fixed) 78,000 80,000
Allocated service expenses:
Department 1 20,500 20,000
Department 2 65,000 62,500
Department 3 101,500 100,000
TOTAL EXPENSES
NET INCOME
Answer:
Following are the responses to the given question:
Explanation:
Report on varying analyses Current Fiscal Variations
Income 320000 318750 -1250
Direct expenditure (variable) 101000 100000 -1000
General expenditure allocated (fixed) 78000 80000 2000
Operation costs allocated:
Section 1 20500 20000 -500
Section 2 65000 62500 -2500
Section 3 101500 100000 -1500
Total expenses 366000 362500 -3500
Total Income - 46000 -43750 -2250
The client Circuit City is considering the introduction of private label brands into their superstores. Private label brands are unbranded products made by an OEM (original equipment manufacturer). Is there any value in this product line? If yes, what are the sources of value of this program? What are the potential downside risks associated with introducing private label products?
Answer:
Following are the responses to the given question:
Explanation:
Please find the complete question.
Yes, value exists. Their price is lower and therefore more competition and benefit are higher. Its value is reduced. Further competition among producers leads to higher production and lower prices. Further good product feedback will increase profitability after their use by consumers. Based on buyers' requirements, drugs can also be added. The drawback is that the output and performance depend more on the producer. Initially, the gain can be very low due to lower prices. Because they are typically replicas of premium products, a distinctive identity becomes difficult to have. Besides, customers get less trust and this problem is worse from the outset.
As a long-term investment at the beginning of the 2018 fiscal year, Florists International purchased 25% of Nursery Supplies Inc.'s 16 million shares for $59 million. The fair value and book value of the shares were the same at that time. During the year, Nursery Supplies earned net income of $36 million and distributed cash dividends of $2.25 per share. At the end of the year, the fair value of the shares is $55 million.
Required:
a. Prepare the appropriate journal entries from the purchase through the end of the year.
b. Record the investment revenue in Nursery Supplies shares
c. Record the cash dividends received from Nursery Supplies shares
Answer: Please find answers in explanation column
Explanation:
To record investment in Nursery Supplies
Account title and explanation Debit Credit
Investment in Nursery supplies common stock $59 million
Cash $59 million
2. To record share in net income by Nursery supplies
Account title and explanation Debit Credit
Investment in Nursery supplies common share $9 million
Investment Revenue $9 million
Calculation
25% x net income of $36 million =$9 million
3.To record share in dividends received from Nursery Supplies
Account title and explanation Debit Credit
Cash $9 million
Investment in Nursery supplies common share $9 million
Calculation
16 million shares x 25% x $2.25per share=$9 million
There is an investment with the discount rate of 6 %. What should be the present value of the investment if we want to get a net cash flow of $17500;
a) After 1 year
b) After 2 years
Answer:
a. $16,509.434
b. $15,574.94
Explanation:
The computation of the present value in each case is as followS:
As we know that
Present Value = Future Value ÷ (1+ rate of interest)^number of years
a. AFter one year
= $17,500 ÷ (1 + 0.06)^1
= $16,509.434
b. After 2 years
= $17,500 ÷ (1 + 0.06)^2
= $17,500 ÷ 1.1236
= $15,574.94
Hence, the present value after one year and 2 years is $16,509.434 and $15,574.94 respectively
Jackpot Mining Company operates a copper mine in central Montana. The company paid $1,750,000 in 2021 for the mining site and spent an additional $750,000 to prepare the mine for extraction of the copper. After the copper is extracted in approximately four years, the company is required to restore the land to its original condition, including repaving of roads and replacing a greenbelt. The company has provided the following three cash flow possibilities for the restoration costs:
Cash Outflow Probability
1 $ 450,000 15 %
2 550,000 45 %
3 750,000 40 %
To aid extraction, Jackpot purchased some new equipment on July 1, 2021, for $270,000. After the copper is removed from this mine, the equipment will be sold. The credit-adjusted, risk-free rate of interest is 12%.
Required:
1. Prepare the journal entries to record the acquisition costs of the mine and the purchase of equipment.
2. Prepare journal entries for :
a. Record the acquisition costs of the mine.
b. Record the purchase of equipment.
Answer:
Jackpot Mining Company
1. Journal Entries to
a) record the acquisition cost of ths mine:
Debit Investment in Copper Mine $1,750,000
Credit Cash $1,750,000
To record the cost of acquiring the mining site
Debit Investment in Copper Mine $750,000
Credit Cash $750,000.
To record the cost of preparing the mine site.
Debit Investment in Copper Mine $390,844
Credit Restoration Liability $390,844
To record the provision for mine restoration liability.
b) the purchase of equipment:
July 1, 2021
Debit Equipment $270,000
Credit Cash $270,000
To record the purchase of equipment.
Explanation:
a) Data and Analysis:
2021 Investment in Copper Mine $1,750,000 Cash $1,750,000
2021 Investment in Copper Mine $750,000 Cash $750,000
Restoration cost:
Cash Outflow Probability Expected Cost
1 $ 450,000 15 % $67,500
2 550,000 45 % 247,500
3 750,000 40 % 300,000
Expected restoration cost = $615,000
Adjusted risk-free interest rate = 12%
Mining period before restoration = 4 years
PV of restoration cost = $390,844
N (# of periods) 4
I/Y (Interest per year) 12
PMT (Periodic Payment) 0
FV (Future Value) $615,000
Results
PV = $390,843.62
Total Interest $224,156.38
Purchase of new equipment"
July 1, 2021 Equipment $270,000 Cash $270,000
Total cost of copper mine:
Acquisition cost $1,750,000
Additional cost 750,000
Restoration cost 390,844
Total cost of mine $2,890,844
C.S. Sandhill Company had the following transactions involving notes payable. July 1, 2022 Borrows $62,000 from First National Bank by signing a 9-month, 8% note. Nov. 1, 2022 Borrows $65,000 from Lyon County State Bank by signing a 3-month, 6% note. Dec. 31, 2022 Prepares adjusting entries. Feb. 1, 2023 Pays principal and interest to Lyon County State Bank. Apr. 1, 2023 Pays principal and interest to First National Bank. Prepare journal entries for each of the transactions. (Credit account titles are automatically indented when amount is entered. Do not indent manually. Record journal entries in the order presented in the problem.)
Answer:
C.S. Sandhill Company
Journal Entries:
July 1, 2022
Debit Cash $62,000
Credit 9-month, 8% Notes Payable (First National Bank) $62,000
To record signing of a 9-month 8% notes payable for cash borrowed.
Nov. 1, 2022
Debit Cash $65,000
Credit 3-month, 6% Notes Payable (Lyon County State Bank) $65,000
To record the signing of a 3-month 6% notes payable for cash borrowed.
Dec. 31, 2022
Debit Interest Expense $3,130
Credit Interest Payable $3,130
To record interest expense for the two notes. See calculations below.
Feb. 1, 2023
Debit 3-month, 6% Notes Payable (Lyon County State Bank) $65,000
Debit Interest Payable $650
Debit Interest Expense $325
Credit Cash $65,975
To record the repayment of the notes payable with interest due.
Apr. 1, 2023
Debit 9-month, 8% Notes Payable (First National Bank) $62,000
Debit Interest Payable $2,480
Debit Interest Expense $1,240
Credit Cash $65,720
To record the repayment of the notes payable with interest due.
Explanation:
a) Data and Analysis:
July 1, 2022 Cash $62,000 9-month, 8% Notes Payable (First National Bank) $62,000
Nov. 1, 2022 Cash $65,000 3-month, 6% Notes Payable (Lyon County State Bank) $65,000
Dec. 31, 2022 Interest Expense $3,130 Interest Payable $3,130 ($62,000 * 8% * 6/12) + ($65,000 * 6% * 2/12)
Feb. 1, 2023 3-month, 6% Notes Payable (Lyon County State Bank) $65,000 Interest Payable $650 Interest Expense $325 Cash $65,975 (Interest expense = $325 ($65,000 * 6% * 1/12)
Apr. 1, 2023 9-month, 8% Notes Payable (First National Bank) $62,000 Interest Payable $2,480 Interest Expense $1,240 Cash $65,720 (Interest expense = $1,240 ($62,000 * 8% * 3/12)
Label each description with the appropriate term. Any label can be used more than once, but each description requires only one term. The reward a saver expects on loaned funds: The cost a borrower pays for loaned funds: The difference between the real interest rate and the nominal interest rate: The percentage of disposable income that is kept as personal savings: The term that indicates why most people need to be incentivized to save: The result of consumption exceeding income over a particular period:
Answer Bank
inflation rate
savings rate
interest rate
dissaving
time preferences
Answer:
inflation rate - The difference between the real interest rate and the nominal. The term that indicates why most people need to be incentivized to save
Inflation rate is the general increase in the price of goods and services within an economy over time. The real interest rate is the nominal interest rate minus inflation rate. Inflation incentivizes people to save, because if they save, they can invest their money at an interest rate higher than inflation, otherwise, their money will end up losing value.
savings rate - The percentage of disposable income that is kept as personal savings
Savings rate is simply the percentage of income that is left for saving. If a person earns 1,000 and saves 200, the savings rate is 20%.
interest rate - The reward a saver expects on loaned funds
The interest rate is the price of borrowing. The loaner accepts to give temporary control of his or her money to another person, in exchange for an extra payment, the interest rate.
dissaving - The result of consumption exceeding income over a particular period
Dissaving occurs when people spend more than they earn. Dissaving can be very harmful not only for household economies, but also for the economy as a whole, because it does not allow investment to flourish, and could lead to actual destruction of wealth via overconsumption.
An inflation rate, savings rate, interest rate, dissaving and time preferences are all important terms in finance field.
What is an inflation rate?The inflation rate is the difference between the real interest rate and the nominal rate.
What is saving rate?The savings rate is the percentage of disposable income that is kept as personal savings.
What is an interest rate?An interest rate is the reward a saver expects on loaned funds
What is dissaving?A dissaving occurs as a result of consumption exceeding income over a particular period.
What is time preference?A time preference is a theory that indicates why most people need to be incentivized to save as its explain the time value of money.
In conclusion, the inflation rate, savings rate, interest rate, dissaving and time preferences are all important terms in finance field.
Read more about Interest rate
brainly.com/question/25545513
Bryce Corporation has pretax accounting income of $100,000. Bryce has interest on municipal bonds of $7,000. Depreciation for tax purposes is $5,000 greater than depreciation for financial reporting purposes. Bad debt expense was $3,000, and bad debts for tax purposes was $1,000. Calculate taxable income. Multiple choice question. $87,000 $99,000 $101,000 $90,000
Answer:
$90,000
Explanation:
It is given that :
The pretax accounting income of Bryce Corporation 100,000
The interest on the municipal bonds - 7,000
The depreciation - 5,000
The difference in bad debt expense (3000-1000) +2,000
So the total income of Bryce Corporation $ 90,000
During its first year of operations, Swifty Corporation had these transactions pertaining to its common stock. Jan. 10 Issued 27,100 shares for cash at $6 per share. July 1 Issued 60,500 shares for cash at $7 per share. (a) Journalize the transactions, assuming that the common stock has a par value of $6 per share. (b) Journalize the transactions, assuming that the common stock is no-par with a stated value of $3 per share.
Answer:
Swifty Corporation
Journal Entries:
a) Par value of $6 per share
Jan. 10
Debit Cash $162,600
Credit Common Stock $162,600
To record the issuance of 27,100 shares for cash at $6 per share.
July 1
Debit Cash $423,500
Credit Common Stock $363,000
Credit Additional Paid-in Capital $60,500
To record the issuance of 60,500 shares for cash at $7 per share.
b) Stock at no-par with a stated value of $3 per share:
Debit Cash $162,500
Credit Common Stock $81,300
Credit Additional Paid-in Capital $81,300
To record the issuance of 27,100 shares for cash at $6 per share.
July 1
Debit Cash $423,500
Credit Common Stock $181,500
Credit Additional Paid-in Capital $242,000
To record the issuance of 60,500 shares for cash at $7 per share.
Explanation:
a) Data and Analysis:
a) Par value of $6 per share
Jan. 10 Cash $162,600 Common Stock $162,600 27,100 shares for cash at $6 per share.
July 1 Cash $423,500 Common Stock $363,000 Additional Paid-in Capital $60,500
b) Stock at no-par with a stated value of $3 per share:
Cash $162,500 Common Stock $81,300 Additional Paid-in Capital $81,300
July 1 Cash $423,500 Common Stock $181,500 Additional Paid-in Capital $242,000
Gabbe Industries is a division of a major corporation. Last year the division had total sales of $24,040,500, net operating income of $3,726,278, and average operating assets of $7,755,000. The company's minimum required rate of return is 18%. Required: a. What is the division's margin? (Round your percentage answer to 2 decimal places.) b. What is the division's turnover? (Round your answer to 2 decimal places.) c. What is the division's return on investment (ROI)? (Round percentage your answer to 2 de
Answer:
See
Explanation:
Part A
Division's margin = Net operating income/Total sales
= $3,726,278/$24,040,500
= 0.155
Division's margin = 15.5%
Part B
Division's turnover = Total sales/Average operating assets
= $24,040,500/$7,755,000
= 3.1
Division's turnover = 3.1 times
Part C
The division's return on investment
= Net operating income/Average operating assets
= $3,726,278/$7,755,000
= 0.481
The division's return on investment is 48.1%
Quantitative Problem: Barton Industries expects that its target capital structure for raising funds in the future for its capital budget will consist of 40% debt, 5% preferred stock, and 55% common equity. Note that the firm's marginal tax rate is 25%. Assume that the firm's cost of debt, rd, is 9.0%, the firm's cost of preferred stock, rp, is 8.2% and the firm's cost of equity is 11.6% for old equity, rs, and 11.9% for new equity, re. What is the firm's weighted average cost of capital (WACC1) if it uses retained earnings as its source of common equity
Answer: 9.49%
Explanation:
Formula for WACC:
WACC = (Cost of Equity * Weight of equity) + [(Cost of debt * weight of debt) * (1 - tax rate)] + (Cost of Preference share * weight of preference share).
As we are using retained earnings, this is not a new stock issue so the relevant cost of equity to use is the old one.
WACC = (11.6% * 55%) + [(9% * 40%) * (1 - 25%)] + (8.2% * 5%)
= 9.49%
Marigold Corp. issued at a premium of $10500 a $192000 bond issue convertible into 4700 shares of common stock (par value $20). At the time of the conversion, the unamortized premium is $4000, the market value of the bonds is $212000, and the stock is quoted on the market at $60 per share. If the bonds are converted into common, what is the amount of paid-in capital in excess of par to be recorded on the conversion of the bonds
Answer: $102000
Explanation:
The following can be deduced fkem the question:
Face value of bonds = $192000
Unamortized Premium = $4000
Conversion of Equity Shares = 4700 x $20 = $94000
Paid in Capital in Excess of Par = $192000 + $4000 - $94000
= $102000
Problem 11-5 Next week, Super Discount Airlines has a flight from New York to Los Angeles that will be booked to capacity. The airline knows from past history that an average of 40 customers (with a standard deviation of 26) cancel their reservation or do not show for the flight. Revenue from a ticket on the flight is $140. If the flight is overbooked, the airline has a policy of getting the customer on the next available flight and giving the person a free round-trip ticket on a future flight. The cost of this free round-trip ticket averages $270. Super Discount considers the cost of flying the plane from New York to Los Angeles a sunk cost. By how many seats should Super Discount overbook the flight? (Use Excel's NORMSINV() function to find the correct critical value for the given α-level. Do not round intermediate calculations. Round your answer to the nearest whole number.) Overbooked by passengers
Answer:
29 Seats
Explanation:
Calculation to determine By how many seats should Super Discount overbook the flight
First step is to calculate the Critical ratio using this formula
Critical ratio=Cu/Cu +Co
Where,
Cu represent cost of underestimating the demand =$140
Co represent the cost of overestimating the demand =$270
Let plug in the formula
Critical ratio=$140/$140+$270
Critical ratio=$140/$410
Critical ratio=0.34146
Second step is to use Excel's NORMSINV() function to find thez-score that yields a p-value of 0.34146 which gives us -0.40848
Now let determine By how many seats should Super Discount overbook the flight
Numbers of seats to overbook the flight= 40 + (-0.40848 x 26)
Numbers of seats to overbook the flight=40 - 10.62048=
Numbers of seats to overbook the flight=29.37952
Numbers of seats to overbook the flight=29.4 seats (Approximately)
Numbers of seats to overbook the flight=29 seats (Rounded to the nearest whole number)
Therefore By how many seats should Super Discount overbook the flight is 29 seats
Sunrise, Inc., has no debt outstanding and a total market value of $245,000. Earnings before interest and taxes, EBIT, are projected to be $19,000 if economic conditions are normal. If there is strong expansion in the economy, then EBIT will be 25 percent higher. If there is a recession, then EBIT will be 40 percent lower. The company is considering a $58,800 debt issue with an interest rate of 8 percent. The proceeds will be used to repurchase shares of stock. There are currently 5,000 shares outstanding. Ignore taxes for this problem. Assume the stock price is constant under all scenarios.
Required:
a. Calculate earnings per share, EPS, under each of the three economic scenarios before any debt is issued. Also calculate the percentage changes in EPS when the economy expands or enters a recession.
b. Repeat part (a) assuming that the company goes through with recapitalization. What do you observe?
Answer:
Sunrise, Inc.
a. Earnings per share (EPS) under the three economic scenarios before debt is issued:
Scenarios EBIT EPS Percentage Changes
Normal $19,000 $3.80 ($19,000/5,000)
Expansion $23,750 $4.75 ($23,750/5,000) 25% ($0.95/$3.80 * 100)
Recession $11,400 $2.28 ($11,400/5,000) 40% ($1.52/$3.80 * 100)
b. After capitalization, Earnings per share (EPS) under the three economic scenarios:
Repurchase of stock = $58,800/$49 = 1,200 shares
Outstanding shares = 3,800 (5,000 - 1,200)
Interest expense = $4,700 approx.
Net Income (taxes ignored) = $14,300
Scenarios Net income
Normal $14,300 ($19,000 - $4,700 Interest)
Strong Expansion $17,875 ($14,300 * 1.25)
Recession $8,580 ($14,300 * 0.60)
Scenarios Net income EPS Percentage Changes
Normal $14,300 $3.76 ($14,300/3,800)
Expansion $17,875 $4.70 ($17,875/3,800) 25% ($0.94/$3.76 * 100)
Recession $8,580 $2.25 ($8,580/3,800) 40% ($1.51/$3.76 * 100)
Observation:
The EPS changed under each scenario when the debt was issued, but the percentage changes remained similar to the changes before the debt issue. This can be attributed to the change in the outstanding shares from 5,000 to 3,800. With the debt issue, the EBIT is not used in the calculations but the income after taxes.
Explanation:
a) Data and Calculations:
Total market value = $245,000
Outstanding shares = 5,000
Market price per share = $49 ($245,000/5,000)
EBIT (Earnings before interest and taxes) = $19,000 (normal economic condition)
Scenarios EBIT
Normal $19,000
Strong Expansion $23,750 ($19,000 * 1.25)
Recession $11,400 ($19,000 * 0.60)
Debit issue = $58,800
Interest rate of debt = 8%
Determine which one of these three portfolios dominates another. Name the dominated portfolio and the portfolio that dominates it. Portfolio Blue has an expected return of 13 percent and risk of 17 percent. The expected return and risk of portfolio Yellow are 19 percent and 15 percent, and for the Purple portfolio are 18 percent and 22 percent. multiple choicePortfolio Purple dominates portfolios Blue and Yellow.Portfolio Blue dominates portfolios Yellow and Purple.Portfolio Yellow dominates portfolios Blue and Purple.
Answer: Yellow dominates portfolios Blue and Purple.
Explanation:
Portfolio Yellow has a higher expected return than either portfolio Blue or Portfolio Purple which means that if we were evaluating the portfolios on return alone, Portfolio Yellow would dominate the other two.
However, we need to adjust for risk. The portfolio with the lowest standard deviation is the less riskier one of the three. That portfolio is Yellow which means that Yellow has both a higher expected return and a lower risk. It would therefore dominate the rest.
Each of the following is a main source of web traffic EXCEPT:
banner ads
radio networks
affiliate networks
word of mouth
Answer:
I think radio networks
Explanation:
why because i never heard them talk about that stuff on the radio sorry if it was wrong
Henry, Luther, and Gage are dissolving their partnership. Their partnership agreement allocates each partner 1/3 of all income and losses. The current period's ending capital account balances are Henry, $45,000; Luther, $37,000; and Gage, $(5,000). After all assets are sold and liabilities are paid, there is $77,000 in cash to be distributed. Gage is unable to pay the deficiency. What amount of cash will Gage receive upon liquidation
Answer: b. Debit Henry, Capital $42,500; debit Luther, Capital $34,500; credit Cash $77,000. Debit Henry, Capital $45,000; debit Luther, Capital $37,000; credit Gage, Capital $5,000; credit Cash $77,000.
Explanation:
The deficiency will apportioned to Henry and Luther equally.
Henry capital becomes = 45,000 - 2,500 = $42,500
Luther capital becomes = 37,000 - 2,500 = $34,500
The $77,000 will then be debited to their capital accounts to recognize the balance left in their accounts:
= 42,500 + 34,500
= $77,000
Credit Gage for $5,000 to recognize that Henry and Luther paid off the deficiency.
g 2. Problems and Applications Q2 Indicate whether each of the following transactions represents an increase in net exports, a decrease in net exports, an increase in net capital outflow, or a decrease in net capital outflow for the United States. Transaction Net Exports Net Capital Outflow Increase Decrease Increase Decrease The Sony pension fund buys a bond from the U.S. Treasury. A worker at a Sony plant in Japan buys some Georgia peaches from an American farmer. An American buys a Toyota. An American investor buys a controlling share in a South Korean electronics firm.
Answer:
The Sony pension fund buys a bond from the U.S. Treasury. ⇒ Decrease in Net Capital Outflow
Net Capital outflow is calculated by subtracting investments made by foreign entities in the United States from investments made by American entities in other countries. The Sony pension fund in this scenario, invested in the U.S. which would therefore reduce the Net capital outflow.
A worker at a Sony plant in Japan buys some Georgia peaches from an American farmer. ⇒ Increase in Net Exports
Net exports is calculated by subtracting the goods brought into the United States from other countries (imports) from those goods sold by the U.S. to other countries (exports). This scenario shows an increase in exports so Net exports will increase.
An American buys a Toyota. ⇒ Decrease in Net exports
An American buying a Toyota means they imported it so Net exports will go down.
An American investor buys a controlling share in a South Korean electronics firm. ⇒ Increase in Net Capital Outflow
Here cash is leaving the United States for an investment in another country so as per the definition above, Net Capital outflow is increasing.
Kieso Company borrowed $640,000 for six months. The annual interest rate on the loan was 8%. Kieso's fiscal year ends on December 31. Kieso borrowed the $640,000 one month prior to the end of its last fiscal year and paid the $640,000 plus interest back five months into its current fiscal year. How much interest expense, if any, would Kieso report at the end of its last fiscal year and at the end of its current fiscal year
Answer:
Interest for last fiscal year $4,267
Interest for current fiscal year $21,333
Explanation:
Calculation to determine How much interest expense, if any, would Kieso report at the end of its last fiscal year and at the end of its current fiscal year
Interest for last fiscal year=$640,000*8%*1/12
Interest for last fiscal year=$4,267
Interest for current fiscal year=$640,000*8%*5/12
Interest for current fiscal year=$21,333
Therefore How much interest expense, if any, would Kieso report at the end of its last fiscal year and at the end of its current fiscal year are:
Interest for last fiscal year $4,267
Interest for current fiscal year $21,333
Staples Corporation would have had identical income before taxes on both its income tax returns and its income statements for the years 2020 through 2023 except for a depreciable asset that cost $120,000. The asset was 100% expensed for tax purposes in 2020. However, for accounting purposes the straight-line method was used (that is, $30,000 per year). The accounting and tax periods both end December 31. There were no deferred taxes at the beginning of 2020. The depreciable asset has a four-year estimated life and no residual value. The tax rate for each year was 25%. Pretax GAAP income amounts for each of the four years were as follows:
Year Pretax GAAP Income
2020 $230,000
2021 250,000
2022 240,000
2023 240,000
Required:
Prepare a schedule to compute the increase to income tax payable on December 31, 2020, 2021, 2022, and 2023.
Answer:
Staples Corporation
A Schedule, computing the increase to income tax payable on December 31, 2020, 2021, 2022, and 2023:
Year Pre-tax GAAP Tax- Tax Taxable Income Tax Deferred
GAAP Income able Income Income Payable Expense Liability
(a) (b) (c) 25% 25% (Recovery)
of (c) of (b)
2020 $230,000 $200,000 $110,000 $27,500 $50,000 $22,500
2021 250,000 220,000 250,000 62,500 55,000 (7,500)
2022 240,000 210,000 240,000 60,000 52,500 (7,500)
2023 240,000 210,000 240,000 60,000 52,500 (7,500)
Total $960,000 $840,000 $840,000 $210,000 $210,000 0
Explanation:
a) Data and Calculations:
Cost of depreciable asset = $120,000
Estimated useful life = 4 years
Residual value = $0
Tax depreciation expense = 100% in 2020
GAAP depreciation expense = 25% in 2020, 2021, 2022, and 2023
Tax rate for each year = 25%
Year Pre-tax GAAP Tax- Tax Taxable Income Tax Deferred
GAAP Income able Income Income Payable Expense Liability
(a) (b) (c) 25% 25% (Recovery)
of (c) of (b)
2020 $230,000 $200,000 $110,000 $27,500 $50,000 $22,500
2021 250,000 220,000 250,000 62,500 55,000 (7,500)
2022 240,000 210,000 240,000 60,000 52,500 (7,500)
2023 240,000 210,000 240,000 60,000 52,500 (7,500)
Total $960,000 $840,000 $840,000 $210,000 $210,000 0
2020 Tax Taxable Income = $110,000 ($230,000-$120,000)
GAAP Taxable Income = GAAP minus Annual Depreciation
b) Tax Taxable Income = GAAP income of $230,000 minus 100% depreciation ($120,000) for the first year and 0% for the remaining years. This gives rise to temporary differences in 2020 between the calculated tax payable and the tax expense for the following years. While in the first year, there arose a tax liability, this is offset in subsequent years.
if you are going to create or own a business, what would it be? List at least 3 and cite your reasons why you have listed them.
Answer:
If I were to create a business, and had to choose three alternatives of commercial sectors in which to get involved, I would choose the following:
-Renewable energies, given that given the eventual disappearance of fossil fuels and the rise of electric cars, renewable energies will become the main source of power in the medium-term future.
-Mining of cryptocurrencies, inasmuch as these currencies have been classified as the money of the future, and the exponential growth they have had since their inception has been remarkable.
-Retail of essential consumer goods, such as food, as it is a necessary industry and whose consumption, despite the ups and downs of the economy, never declines.
Consider a monopoly where consumers are currently consuming where the marginal utility is 10 units of utility for the good. The price of the product is $5. The marginal cost of producing the good is $2.00. Then consider perfectly competitive firms where consumers are currently consuming where the marginal utility is 20 units of utility for the perfectly competitive product. The price of the product is $10. At current production levels, the marginal cost of producing the good is $10.
Required:
a. Calculate the marginal utility per dollar spent by consumers in a monopolistic industry.
b. Calculate the consumer marginal utility per dollar of marginal cost for the monopoly.
Answer and Explanation:
a. The marginal utility per dollar spent in a monopolistic industry is
= Marginal utility ÷ Price
= 10 ÷ 5
= 2 utils per dollar
b. The consumer marginal utility per dollar for the monopoly is
= Marginal utility ÷ Marginal cost
= 10 ÷ 2
= 5 utils per dollar
hence by using the above formulas, the above answers should be considered
VANILLA SWAPS Cleveland Insurance Company has just negotiated a three-year plain vanilla swap in which it will exchange fixed payments of 8 percent for floating payments of LIBOR plus 1 percent. The notional principal is $50 million. LIBOR is expected to be 7 percent, 9 percent, and 10 percent (respectively) at the end of each of the next three years. Determine the net dollar amount to be received (or paid) by Cleveland each year. Determine the dollar amount to be received (or paid) by the counterparty on this interest rate swap each year based on the assumed forecasts of LIBOR.
Answer: Check attachment
Explanation:
a. Determine the net dollar amount to be received (or paid) by Cleveland each year.
The the net dollar amount to be received by Cleveland for:
Year 1: = $0
Year 2 = $1,000,000
Year 3: = $1,500,000
b. Determine the dollar amount to be received (or paid) by the counterparty on this interest rate swap each year based on the assumed forecasts of LIBOR.
Check the attachment for further details.
Geralt of Rivia is an independent contractor who specializes in monster-killing. His unique skills have earned him the bargaining power to sell his services at a high price to those willing to pay for the removal of infestations of fire elementals, rock trolls, royal wyverns, or the like. Geralt specializes only in hard-to-kill monsters, however, leaving the likes of basiliks and harpies, monsters lower on the totem pole, to less sophisticated monster slayers.
Given these facts, based on the Generic Business Strategies framework, we might say that Geralt occupies the_______ (1) quadrant of the framework.
When Geralt takes a contract from a rich village seeking his aid, they represent a/n _______(2)
Geralt often buys potions and elixirs from various alchemists to help his fighting ability. However, he can make these potions and elixirs himself if he has the time. If he were to do this instead of buying from the alchemists, this would constitute a form of________ (3)
When Geralt takes a contract, it usually requires about a week of planning and preparation, which includes trips to the armorer, time spent making alchemical concoctions that protect him during the confrontation with the monster(s), and the staking out of ideal fighting ground when the battle occurs. As such, Geralt ofter has to choose between contracts, sometimes accepting one contract while forgoing the opportunity to pursue another contract. As we have discussed, this decision constitutes a_________ (4).
Now, let's say that Geralt is governed by a neutral "Council of Witchers" that ensure that those who purchase Geralt's services (e.g., rich villages or principalities plagued by monster infestations) are well-served, and that Geralt spends their gold in ways that work toward the removal of the targeted monsters which these clients have paid to have removed.
We might say that this "Council" serves as Geralt's role in this arrangement. Geralt, in turn, serves as the ______(5) and that the purchasers of Geralt's services, such as rich villages, represent the________ (6) in this arrangement. х (1) differentiation (2) buyer х (3) forward integration (4) tradeoff (5) management х (6) party __________(7) agent
Answer: 1. Differentiation focus
2. Buyer
3. Backward Integration
4. Trade off
5. Board of directors
6. Principal
7. Agent
Explanation:
1. Geralt is using Differentiation focus strategy as it gives the customers a product which they believe is superior than other similar products although the price if the product is higher than others. The product is unique from other products.
2. When Geralt takes a contract from a rich village seeking his aid, they represent a buyer.
3. If Geralt makes the potions and elixirs himself if he has the time rather than buying from the alchemists, this would constitute a form of backward integration. This is because he's expanding his role by taking up a task that's being completed previously in the supply chain.
4. Since Geralt has to choose between contracts, this is a trade off. Trade occurs when we've to choose between alternatives. In this case, we forgo some at the expense of others.
5. Based in the information given, Geralt serves as the board of director.
6. Those who buy Geralt's services, such as rich villages, represent the Principal.
7. Geralt serves as the agent. He's the one negotiating contracts and supplying what's needed.