The correct option is A.
What are 5 fixed costs?
Common examples of fixed costs include rental lease or mortgage payments, salaries, insurance payments, property taxes, interest expenses, depreciation, and some utilities.
What does an example of a fixed product cost?Fixed costs are costs that do not change when output changes. Examples include insurance, rent, normal profit, setup costs, and depreciation.
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During the months of January and February, Hancock Corporation sold goods to three customers. The sequence of events was as follows:
Jan.
6 Sold goods for $1,400 to S. Green and billed that amount subject to terms 3/10, n/30.
6 Sold goods to M. Munoz for $690 and billed that amount subject to terms 3/10, n/30.
14 Collected cash due from S. Green. Feb. 2 Collected cash due from M. Munoz.
28 Sold goods for $400 to R. Reynolds and billed that amount subject to terms 3/10, n/45.
Required:
Assuming that Sales Discounts is treated as a contra-revenue, compute net sales for the two months ended February 28.
Answer:
the net sales for the two months is $2,448
Explanation:
The computation of the net sales for the two months is shown below:
= Sale made on Jan 6 + sale made on Jan 6 + sales made on Feb 28 - discount on sale made on Jan 6
= $1,400 + $690 + $400 - ($1,400 × 3%)
= $2,490 - $42
= $2,448
hence, the net sales for the two months is $2,448
The same is to be considered
A note payable was executed by Sterling Inc. to Miami Finance Company. Sterling Inc. used $192,000 of its accounts receivable as collateral for the loan. The contract provided that Miami would advance 85% of the gross amount of the receivables. Sterling Inc. continues to collect payments for the receivables and the cash from customers is then remitted to the finance company. The cash remitted is first applied to the finance charges, with the remainder applied to principal.
During the first month, customers owing $131,200 paid cash, less sales returns and allowances of $5,120, originally recorded as a refund liability. The finance charge at the end of the first month was $1,120. During the second month, the remaining receivables were collected in full, except for $1,280 off as uncollectible. Final settlement was effected with the finance company, including payment of an additional finance charge of $480.
Required:
a. Record the entry for Sterling to record the secured borrowing.
b. Record the entries for Sterling to record (1) the collections for the second month and (2) the final payment to Miami.
Answer:
Explanation:You should prob subscribe to keepUsweatin
Siegworth Products produces industrial cleaning products. Data concerning budgeted direct labor-hours for Siegworth for the next year follows:
1st Quarter 2nd Quarter 3rd Quarter 4th Quarter
Budgeted direct labor-hours 9,400 8,900 9,200 10,000
Siegworth uses direct labor-hours as its overhead allocation base. The variable portion of its predetermined manufacturing overhead rate is $3.75 per direct labor-hour and its total fixed manufacturing overhead is $62,000 per quarter. The only noncash item included in fixed manufacturing overhead is depreciation, which is $15,500 per quarter.
Required:
a. Prepare the company's manufacturing overhead budget for the upcoming fiscal year.
b. Compute the company's predetermined overhead rate (including both variable and fixed manufacturing overhead) for the upcoming fiscal year.
Answer:
a. Total manufacturing overhead are as follows:
1st Quarter = $81,750
2nd Quarter = $79,875
3rd Quarter = $81,000
4th Quarter = $84,000
b. Predetermined overhead rates are as follows:
1st Quarter = $8.70
2nd Quarter = $8.97
3rd Quarter = $8.80
4th Quarter = $8.40
Explanation:
a. Prepare the company's manufacturing overhead budget for the upcoming fiscal year.
Note: See part a of the attached excel file for the company's manufacturing overhead budget for the upcoming fiscal year.
In the part a of attached excel file, Fixed manufacturing overhead per quarter is obtained as follows:
Fixed manufacturing overhead per quarter = Total fixed manufacturing overhead per quarter – Depreciation per quarter = 62,000 - $15,500 = $46,500
From the attached excel file, total manufacturing overhead are as follows:
1st Quarter = $81,750
2nd Quarter = $79,875
3rd Quarter = $81,000
4th Quarter = $84,000
b. Compute the company's predetermined overhead rate (including both variable and fixed manufacturing overhead) for the upcoming fiscal year.
Note: See part b of the attached excel file for the computation of the company's predetermined overhead rate (including both variable and fixed manufacturing overhead) for the upcoming fiscal year.
From the attached excel file, predetermined overhead rates are as follows:
1st Quarter = $8.70
2nd Quarter = $8.97
3rd Quarter = $8.80
4th Quarter = $8.40
ElectroWizard Company produces a popular video game called Destructo which sells for $32. Last year ElectroWizard sold 50,000 Destructo games, each of which costs $6 to produce. ElectroWizard incurred selling and administrative expenses of $80,000 and depreciation expense of $10,000. In addition, ElectroWizard has a $100,000 loan outstanding at 12%. Their tax rate is 40%. There are 100,000 common shares outstanding.
Required:
Prepare an income statement for Electro Wizard in good form and include earnings per share (EPS)
Answer:
Income Statement for Electro-Wizard Company
Particulars Amount
Sales (50,000 units*$32) $1,600,000
Cost of production (50,000 units*$6) ($300,000)
Net contribution $1,300,000
Selling and administration expenses ($80,000)
Depreciation expense ($10,000)
Total Operating Expenses $90,000
Operating Income $1,210,000
Interest expense ($100,000*12%) ($12,000)
Taxable Income $1,198,000
Taxes (1,198,000*40%) ($479,200)
Net Income $718,800
Earnings per share = Net Income/ Outstanding common shares
Earnings per share = $718,800 / 100,000 shares
Earnings per share = $7.18 per share
On August 2, ABC Co. receives a $7,900, 90-day, 10.5% note from its customer who is past due on what he owes. This note is replaces the customer's $7,900 account receivable. Prepare ABC's journal entry assuming the note is honored by the customer on October 31 of that same year. (Do not round intermediate calculations. Round your answers to nearest whole dollar value. Use 360 days a year.)
Answer:
Oct 31
Dr Cash $8,107
Cr Notes receivable$7,900
Cr Interest revenue $207
Explanation:
Prepare ABC's journal entry assuming the note is honored by the customer on October 31 of that same year
Oct 31
Dr Cash $8,107
[$7,900+($7,900*10.5%*90/360)]
Cr Notes receivable$7,900
Cr Interest revenue $207
($7,900*10.5%*90/360)]
OS Environmental provides cost-effective solutions for managing regulatory requirements and environmental needs specific to the airline industry. Assume that on July 1 the company issues a one-year note for the amount of $5.3 million. Interest is payable at maturity. Required: Determine the amount of interest expense that should be recorded in a year-end adjusting entry under each of the following independent assumptions: (Enter your answers in dollars, not in millions (i.e. 5 should be entered as 5,000,000).)
Answer:
the question is incomplete, so I looked for a similar one online:
December 31, year 1:
interest expense = $5,300,000 x 12% x 6/12 = $318,000
September 30, year 1:
interest expense = $5,300,000 x 10% x 3/12 = $132,500
October 31, year 1:
interest expense = $5,300,000 x 9% x 4/12 = $159,000
January 31, year 2:
interest expense = $5,300,000 x 6% x 7/12 = $185,500
On January 1, 2021, Peach Corporation issues $600,000, 5-year, 7% bonds at par. Interest is paid semiannually on January 1 and July 1. Peach Corporation uses the straight-line method of amortization. The company's fiscal year ends on December 31. Which of the following statements about the journal entry for these bonds on July 1, 2021 is TRUE?
a. The entry decreases assets and increases stockholder's equity
b. The entry increases expenses and increases assets.
c. The entry decreases net income and increases liabilities
d. The entry decreases assets and stockholder's equity
Answer:
The correct option is d. The entry decreases assets and stockholder's equity.
Explanation:
Since interest is paid semiannually on January 1 and July 1, that means cash has to be paid on July 1, 2021 as interest on bond.
Since cash is a current asset, that means the the payment of cash as intetest enxpen on July 1, 2021 will decrease asset.
Since the amount of interest expense on bond paid July 1, 2021 will reduce net income which is one of the elements of stockholder's equity, the entry will also therefore decrease the stockholder's equity.
Therefore, the correct option is d. The entry decreases assets and stockholder's equity.
A population of 478 rats has been undergoing linear growth over a five-year period. if the average growth rate was 1.4 rats per year, what was the approximate size of the initial population
Answer:
I think is 471, because the population have a LINEAR GROWTH over FIVE year, so we just need to do some math here to find the initial population: 1.4*5=7 478-7=471. Hope it helps :).
Explanation:
The approximate size of the initial population of the rats given the linear growth rate is 471.
What is the approximate size of the initial population?
When a population grows linearly,it increases by a fixed number each year. The equation that can be used to represent the linear growth is:
initial population + (growth rate x number of years)
Initial population = population now - growth rate x number of years)
478 - (1.4 x 5) = 471
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QUESTION 9 of 10: Which of the following is not part of the process of passion transference?
a) The fan attends an event where branding/sponsorship is present,
b) The fan sees the brand as special and set apart from competitors.
c) The fan does not see the relevance of the brand advertisement,
d) The fan purchases the brand,
Answer:
The fan does not see the relevance of the brand advertisement.
Explanation:
Trust :)
Luke Company has three divisions: Peak, View, and Grand. The company has a hurdle rate of 5.76 percent. Selected operating data for the three divisions follow:
Peak View Grand
Sales revenue $339,000 $223,000 $300,000
Cost of goods sold 197,000 111,000 188,000
Miscellaneous operating expenses 43,000 32,000 38,000
Average invested assets 1,320,000 960,000 1,185,000.
Required:
a. Compute the return on investment for each division.
b. Compute the residual income for each division.
Answer:
I DUNNNNO
Explanation:
why do we carry out stock taking
Answer:
here ye go
Explanation:
tocktaking allows you to keep an accurate track of the physical stock you have, what's been sold, and what hasn't. It's all about comparing the physical stock to what the report says then finding any discrepancies. ... Your stock take can highlight a number of problems including theft and shrinkage issues.
Exercise 10-3 Recording bond issuance and interest LO P1 On January 1, Boston Enterprises issues bonds that have a $1,950,000 par value, mature in 20 years, and pay 9% interest semiannually on June 30 and December 31. The bonds are sold at par. 1. How much interest will Boston pay (in cash) to the bondholders every six months
Answer:
$87,750
Explanation:
Calculation to determine How much interest will Boston pay (in cash) to the bondholders every six months
Using this formula
Semiannual cash interest paymen=Par maturity value*Semi-annual rate
Let plug in the formula
Semiannual cash interest payment=$1,950,000*9%/2
Semiannual cash interest payment=$87,750
Therefore The cash paid every six months would be $87,750
Broha Company manufactured 1,764 units of its only product during 2019. The inputs for this production are as follows: 490 pounds of Material A at a cost of $1.50 per pound 340 pounds of Material H at a cost of $2.95 per pound 380 direct labor hours at $28 per hour The firm manufactured 2,100 units of the same product in 2018 with the following inputs: 540 pounds of Material A at a cost of $1.40 per pound 400 pounds of Material H at a cost of $2.70 per pound 440 direct labor hours at $26 per hour In 2019, the partial financial productivity of Material A is:
Answer:
2.4
Explanation:
Calculation to determine what the partial financial productivity of Material A is:
Partial financial productivity of Material A { 1,764 units/(490 x $1.50)
Partial financial productivity of Material A =1,764 units/735
Partial financial productivity of Material A =2.4
. Therefore The partial financial productivity of Material A is 2.4
Required information
Problem 9-3A Aging accounts receivable and accounting for bad debts LO P2, P3
[The following information applies to the questions displayed below.]
Jarden Company has credit sales of $3,100,000 for year 2017. On December 31, 2017, the company’s Allowance for Doubtful Accounts has an unadjusted credit balance of $19,564. Jarden prepares a schedule of its December 31, 2017, accounts receivable by age. On the basis of past experience, it estimates the percent of receivables in each age category that will become uncollectible. This information is summarized here.
December 31, 2017
Accounts Receivable Age of
Accounts Receivable Expected Percent
Uncollectible
$ 620,000 Not yet due 0.85 %
248,000 1 to 30 days past due 1.60
49,600 31 to 60 days past due 6.10
24,800 61 to 90 days past due 30.75
4,960 Over 90 days past due 64.00
Problem 9-3A Part 1
Required:
1. Estimate the required balance of the Allowance for Doubtful Accounts at December 31, 2017, using the aging of accounts receivable method.
Problem 9-3A Part 2
2. Prepare the adjusting entry to record bad debts expense at December 31, 2017.
Answer and Explanation:
1.
The estimation of the required balances are as follows:
Age Balance Estimated Estimated Uncollectible amount
of Dec-31 Percentage
Accounts Uncollectible
Not yet due $620,000 0.85% $5,270.00
1–30 days $248,000 1.60% $3,968.00
31–60 days $49,600 6.10% $3,025.60
61–90 days $24,800 30.75% $7,626.00
Over 90 days $4,960 64.00% $3,174.40
Total $947,360 $23,064
2.
Now the journal entry is
but before that following calculation is needed
Ending balance of allowance for doubtful account $23,064
Less: Opening balance in allowance for doubtful account -$19,564
Bad debt expense for the year $3,500
The journal entry is
Bad debt expense $ 3,500
To Allowance for doubtful accounts $ 3,500
(Being bad debt expense is recorded)
Alexandria's Dance Studio is currently an all-equity firm with earnings before interest and taxes of $338,000 (in perpetuity ) and a cost of equity of 14.2%. Assume the tax rate is 22%. The firm is considering adding $400,000 of debt with a coupon rate of 7% to its capital structure. The debt will be sold at par value. What is the levered value of the equity
Answer:
$1,544,620
Explanation:
Calculation to determine the levered value of the equity
First step is to calculate the VE
VL = {[$338,000 × (1 - .22)] / .142} + (.22 × $400,000)
VL=($338,000*0.78/.142)+$88,000
VL=($263,640/.142)+$88,000
VL=$1,856,620+$88,000
VL = $1,944,620
Now let calculate the levered value of the equity
VE = $1,944,620 - $400,000
VE = $1,544,620
Therefore the levered value of the equity is $1,544,620
Problem 7-2A (Algo) Estimating and reporting bad debts LO P2, P3 Skip to question [The following information applies to the questions displayed below.] At December 31, Hawke Company reports the following results for its calendar year. Cash sales $ 1,392,180 Credit sales $ 3,376,000 In addition, its unadjusted trial balance includes the following items. Accounts receivable $ 1,022,928 debit Allowance for doubtful accounts $ 22,240 debit Problem 7-2A (Algo) Part 1 Required: 1. Prepare the adjusting entry to record bad debts under each separate assumption. Bad debts are estimated to be 2% of credit sales. Bad debts are estimated to be 1% of total sales. An aging analysis estimates that 5% of year-end accounts receivable are uncollectible.
Answer:
A. Dr Bad Debts Expense $67,520
Cr Allowance for doubtful accounts $67,520
B. Dr Bad Debts Expense $47,682
Cr Allowance for doubtful accounts $47,682
C. Dr Bad Debts Expense $73,386
Cr Allowance for doubtful accounts $73,386
Explanation:
A. Preparation of the adjusting entry to record bad debts if Bad debts are estimated to be 2% of credit sales
Dr Bad Debts Expense $67,520
Cr Allowance for doubtful accounts $67,520
(2% * $3,376,000)
(To record 2% of credit sales)
B. Preparation of the adjusting entry to record bad debts if Bad debts are estimated to be 1% of total sales
Dr Bad Debts Expense $47,682
Cr Allowance for doubtful accounts $47,682
[1% * ($ 1,392,180 + $3,376,000)]
(To record 1% of total sales )
C. Preparation of the adjusting entry to record bad debts if An aging analysis estimates that 5% of year-end accounts receivable are uncollectible.
Dr Bad Debts Expense $73,386
Cr Allowance for doubtful accounts $73,386
[$ 22,240 + (5% * $ 1,022,928)]
(To record 5% year-end uncollectible accounts receivable)
Logistics Solutions provides order fulfillment services for dot merchants. The company maintains warehouses that stock items carried by its dot clients. When a client receives an order from a customer, the order is forwarded to Logistics Solutions, which pulls the item from storage, packs it, and ships it to the customer. The company uses a predetermined variable overhead rate based on direct labor-hours. In the most recent month, 190,000 items were shipped to customers using 8,300 direct labor-hours. The company incurred a total of $29,050 in variable overhead costs. According to the company’s standards, 0.03 direct labor-hours are required to fulfill an order for one item and the variable overhead rate is $3.55 per direct labor-hour. Required: 1. What is the standard labor-hours allowed (SH) to ship 190,000 items to customers? 2. What is the standard variable overhead cost allowed (SH × SR) to ship 190,000 items to customers? 3. What is the variable overhead spending variance? 4. What is the variable overhead rate variance and the variable overhead efficiency variance?
Answer:
1. Standard labor hour allowed 5,700 Hour
2. Standard variable overhead cost allowed $20,235
3. Variable overhead spending variance 8,815 U
4. Variable overhead rate variance 415 F
Variable overhead efficiency variance 9230 U
Explanation:
1. Calculation to determine the standard labor-hours allowed
Standard labor hour allowed = 190,000*.03
Standard labor hour allowed= 5,700 Hour
Therefore the Standard labor hour allowed is 5,700 Hour
2. Calculation to determine the standard variable overhead cost allowed
Using this formula
Standard variable overhead cost allowed=Standard quantity of labour hours allowed*Standard variable overhead rate
Let plug in the formula
Standard variable overhead cost allowed = 5,700*3.55
Standard variable overhead cost allowed = $20,235
Therefore the Standard variable overhead cost allowed is $20,235
3. Calculation to determine the variable overhead spending variance using this formula
Variable Overhead Spending Variance=Standard Cost- Actual Cost
Let plug in the formula
Variable overhead spending variance = 20,235-29,050
Variable overhead spending variance = 8,815 U
Therefore the Variable overhead spending variance is 8,815 U
4. Calculation to determine the variable overhead rate variance
Using this is formula
Variable overhead rate variance
=(Standard Rate*Actual Hour)-Actual cost
Let plug in the formula
Variable overhead rate variance = (3.55*8300-29050)
Variable overhead rate variance= 415 F
Therefore the variable overhead rate variance is 415 F
Calculation to determine variable overhead efficiency variance
Using this formula
Variable Overhead Efficiency Variance=
(Standard Hours - Actual Hours ) x Standard Rate
Let plug in the formula
Variable overhead efficiency variance = (5700-8300)*3.55
Variable overhead efficiency variance = 9230 U
Therefore the Variable overhead efficiency variance is 9230 U
Lisa Company sells many products. Gizmo is one of its popular items. Below is an analysis of the inventory purchases and sales of Gizmo for the month of March. Lisa Company uses the perpetual inventory system. Purchases Sales Units Unit Cost Units Selling Price/Unit 3/1 Beginning inventory 105 $38 3/3 Purchase 65 $50 3/4 Sales 60 $80 3/10 Purchase 195 $50 3/16 Sales 90 $90 3/19 Sales 70 $95 3/25 Sales 55 $90 3/30 Purchase 35 $65
Using the FIFO assumption, calculate the amount charged to cost of goods sold for March. Cost of goods sold $ eTextbook and Media Using the FIFO assumption, calculate the amount charged to cost of goods sold for March. Cost of goods sold $ eTextbook and Media Using the LIFO assumption, calculate the amount assigned to the inventory on hand on March 31. Ending Inventory $
Answer:
Lisa Company
a. Cost of goods sold (FIFO) = $12,490
b. Cost of Ending Inventory (LIFO) = $5,695
Explanation:
a) Data and Calculations:
Inventory system = Perpetual
Purchases Sales Units Unit Cost Units Selling Total Total
Price/Unit Costs Revenue
3/1 Beginning inventory 105 $38 $3,990
3/3 Purchase 65 $50 3,250
3/4 Sales 60 $80 $4,800
3/10 Purchase 195 $50 9,750
3/16 Sales 90 $90 8,100
3/19 Sales 70 $95 6,650
3/25 Sales 55 $90 4,950
3/30 Purchase 35 $65 2,275
3/31 Total 400 275 $19,265 $24,500
Ending inventory = 125 (400 - 275)
Cost of goods sold (FIFO):
Ending inventory cost:
3/30 Purchase 35 $65 $2,275
3/10 Purchase 90 $50 4,500
Total cost of ending inventory = $6,775
Cost of goods available for sale = $19,265
Total cost of ending inventory = $6,775
Cost of goods sold = $12,490
LIFO (under perpetual inventory system):
Cost of Ending Inventory:
3/1 Beginning inventory 90 $38 $3,420
3/30 Purchase 35 $65 2,275
Total 125 $5,695
b) The LIFO method under perpetual inventory system assumes that 275 units of goods sold were picked from the purchases made on March 3 and March 10, with the remaining 15 units from the beginning inventory. This will leave 90 units in the beginning inventory and 35 purchased on March 30 to constitute the ending inventory.
Under the periodic inventory system, Village Fabrics purchased 25 yards of blue plaid fabric at a cost of $2.00 per yard on June 1; on June 3, 22 yards were sold of the blue plaid; a new shipment came in with 25 more yards at a cost of $1.25 per yard on June 5; on June 15, 17 yards of the blue plaid fabric were sold; Village Fabrics purchased another 25-yard bolt at a cost of $1.00 per yard on June 19; on June 27, 6 more yards had been sold. What is the value of inventory as of June 30 under the LIFO method
Answer:
$56.25
Explanation:
LIFO means last in first out. It means that it is the last purchased inventory that is the first to be sold.
the inventory sold would be accounted for from the last purchased items
a total of 75 yards was bought and 45 were sold. This leaves 30 yards in the inventory .
the 30 yards would be accounted for using the cost of the fabrics bought on June 1 and 5
25 x $2 = 50
5 x $1.25 = $6.25
total = $50 + $6.25 = $56.25
White Company acquires a new machine for $75,000 and uses it in White's manufacturing operations. A few months after White places the machine in service, it discovers that the machine is not suitable for White's business. White had fully expensed the machine in the year of acquisition using § 179. White sells the machine for $60,000 in the tax year after it was acquired but held the machine only for a total of 10 months. What was the tax status of the machine when it was disposed of and the amount of the gain or loss?
Answer:
Tax status = Ordinary AssetGain = $60,000Explanation:
As the company expensed the asset fully in the year of purchase instead of capitalizing it, the asset is an ordinary asset not a capital one which is capitalized. That is the tax status.
The gain on an ordinary asset is the amount that it was sold for which in this case is $60,000.
Tax status = Ordinary Asset
Gain = $60,000
Winsor Construction Company uses the percentage-of-completion method of accounting. In 2007, Winsor began work on a contract it had received which provided for a contract price of $7,500,000. Other details follow: 2007 Costs incurred during the year $3,600,000 Estimated costs to complete as of December 31 2,400,000 Billings during the year 3,300,000 Collections during the year 1,950,000 What should be the gross profit recognized in 2007?
Answer:
The gross profit recognized in 2007 is $1,200,000
Explanation:
Use the following formula to the percentage of completion
Percentage of completion = Total Cost / Contract price
Total cost = Cost incurred to date + Estimated cost to complete = $3,600,000 + $2,400,000 = $6,000,000
Contract price = $7,500,000
Placing values in the formula
Percentage of completion = $6,000,000 / $7,500,000 = 0..80 = 80%
Use the following formula to calculate the gross profit
Gross profit = Contract price - Total Cost = $7,500,000 - $6,000,000 = $1,500,000
Now calculate the gross profit recognised as follow
Gross profit recognised = Gross profit x Percentage of completion = $1,500,000 x 80% = $1,200,000
you can have your cake or chose to eat it
this is example of property rights providing tye right for you to
enjoy property
own property
exclude people from your property
Exchange property
Answer:
Exclude people from your property
The following data (in millions) are taken from the financial statements of Tarrow Corporation: Recent Year Prior Year Revenue $386,972 $356,000 Operating expenses 326,634 303,000 Operating income $60,338 $53,000 a. For Tarrow Corporation, determine the amount of change in millions and the percent of change (round to one decimal place) from the prior year to the recent year for: Revenue Operating expenses Operating income Amount of Change (in millions) Percent of Change (round to 1 decimal place) Increase or Decrease 1. Revenue $fill in the blank 1 30,976 fill in the blank 2 % 2. Operating expenses fill in the blank 4 fill in the blank 5 3. Operating income fill in the blank 7 fill in the blank 8 b. During the recent year, revenue and operating expenses . As a result, operating income , from the prior year.
Answer:
Tarrow Corporation
a) Amount of change in millions and the percent of change:
Amount Percentage Direction
of Change of Change of Change
Revenue $30,972 8.7% Increase
Operating expenses 23,634 7.8% Increase
Operating income $7,338 13.8% Increase
b) During the recent year, revenue and operating expenses increased by 8.7% and 7.8% respectively. As a result, the operating income increased by 13.8%, from the prior year.
Explanation:
a) Data and Calculations:
Tarrow Corporation:
Recent Year Prior Year Change Percentage
Revenue $386,972 $356,000 $30,972 8.7% Increase
Operating expenses 326,634 303,000 23,634 7.8% Increase
Operating income $60,338 $53,000 $7,338 13.8% Increase
The Academic Computing Center has five trainers available in its computer labs to provide training sessions to students. Assume that the design capacity of the system is 1900 students per semester and that effective capacity is 1710. If the number of students who actually got their orientation session is 1500, What is the ratio of the utilization of the system to its efficiency
Answer:
87.72%
Explanation:
Calculation to determine the ratio of the utilization of the system to its efficiency
Using this formula
Ratio=Orientation session/Effective capacity of the Academic*100
Let plug in the formula
Ratio = (1,500 / 1,710) * 100
Ratio= 0.8772 * 100
Ratio= 87.72%
Therefore the ratio of the utilization of the system to its efficiency will be 87.72%
How can I be more swag?
Answer: First of all stop using "swag" it's "drip" Just grab you some drippy clothes that are in style and boom ur driped out!
Explanation: You would use the term "drip" when referring to someone who has a great sense of style. Someone who can put together outfits no matter what type of clothing it is and always look their best. Most people think to have drip you need to be decked out in all high end designer brands like Gucci, LV, Versace, Burberry, Nike,Jordan, Vans,etc.
AbbVie Pharmaceuticals (headquartered in Lake Forest, IL) has commenced a $80 million R&D project to develop a new drug to treat a rare disease. So far, it has spent $25 million of the $80 million, and preliminary results are positive. If the remaining $55 million is invested, the drug will certainly be completed and is expected to generate profit1 of $100 million (in present value) for AbbVie. Meanwhile, a research biologist at Northwestern has independently developed a treatment for the same disease. The scientist has offered to sell her invention to AbbVie for $2 million. Her drug would be just as effective as AbbVie’s drug, and would also generate profit of $18 million in present value.
Required:
a. Should AbbVie buy the drug for $2 million?
b. What is the most AbbVie should be willing to pay for the Illinois Tech researcher’s drug?
c. How would your answer change if the Illinois Tech biologist had developed her drug two years ago, before AbbVie started its own R&D project?
d. Suppose that Merck has also expressed interest in the biologist’s invention. If Merck buys the drug, there is a 50% chance that it will beat AbbVie’s drug to market. If that happens, suppose the profit of the second drug to market is zero. Now how much should AbbVie be willing to pay for the drug? How much should Merck be willing to pay?
Question Completion:
AbbVie Pharmaceuticals (headquartered in Lake Forest, IL) has commenced a $10 million R&D project to develop a new drug to treat a rare disease. So far, it has spent $6 million of the $10 million, and preliminary results are positive. If the additional $4 million is invested, the drug will certainly be completed and is expected to generate profit of $18 million in present value for AbbVie. Meanwhile, a research biologist at Illinois Tech has independently developed a treatment for the same disease. The scientist has offered to sell her invention to AbbVie for $2 million. Her drug would be just as effective as AbbVie’s drug, and would also generate profit of $18 million in present value.
Answer:
AbbVie Pharmaceuticals
a. AbbVie should buy the drug for $2 million.
b. The most AbbVie should be willing to pay for the Illinois Tech researcher's drug is $4 million. Luckily, this much is not demanded by the researcher.
c. If the Illinois Tech biologist had developed her drug two years ago, before AbbVie started its own R&D project, AbbVie could have paid an amount ranging from $2 million to $10 million.
d. Before Merck buys the drug, AbbVie should be willing to pay $2 million without further delays.
e. Merck should be willing to pay as much as $4 million.
Explanation:
a) Note that the introduction to the question was flawed. The mathematics do not add up. For this reason, I have worked with the more properly formulated question as shown in the Question Completion above.
b) Data and Calculations:
Projected cost of R&D = $10 million
Amount of the R&D cost spent already = $6 million
Remaining R&D cost to be spent = $4 million
Expected profit = $18 million
Cost of the offer by the research biologist = $2 million
Expected profit from the biologist's drug = $18 million
c) The conclusions above were reached because all the amounts are stated in present value terms.
On January 1, 2017, Desert Company purchased a copyright for $2,500,000, having an estimated useful life of 16 years. In January 2021, Desert paid $326,927 for legal fees in a successful defense of the copyright. Copyright amortization expense for the year ended December 31, 2021, should be?
Answer:
$183,493.91
Explanation:
The computation of the amortization expense is shown below:
but before that following calculations are needed
The Amortization cost per year is
= $2,500,000 ÷ 16 years
= $156,250
Now the legal fees per year
= $326,927 ÷ 12 years
= $27243.92
Now the amortization expense is
= $156,250 + $27243.92
= $183,493.91
Sage Hill Leasing Company signs an agreement on January 1, 2020, to lease equipment to Cole Company. The following information relates to this agreement.
1. The term of the non-cancelable lease is 6 years with no renewal option. The equipment has an estimated economic life of 6 years.
2. The cost of the asset to the lessor is $251,000. The fair value of the asset at January 1, 2020, is $251,000.
3. The asset will revert to the lessor at the end of the lease term, at which time the asset is expected to have a residual value of $25,490, none of which is guaranteed.
4. The agreement requires equal annual rental payments, beginning on January 1, 2020.
5. Collectibility of the lease payments by Sage Hill is probable.
Assuming the lessor desires a 7% rate of return on its investment, calculate the amount of the annual rental payment required.
Answer:
$45,884
Explanation:
The computation of the annual rental payment required is shown below:
Fair value $251000
Less: PV of unguaranteed residual value
unguaranteed residual value $25,490
Multiply with PVF(7%,6) 0.666342
Less: PV of unguaranteed residual value $16,985
Recovered amount through periodic payments $234,015
Divided with PVADIF(7%,6) 5.100197
lease payments payable at beginning of each year $45,884
You are considering the acquisition of XYZ Enterprises. You have made the following projections for XYZ for years 1-5 ($ millions): Year 1 Year 2 Year 3 Year 4 Year 5 EBIT $ 20 $ 22 $ 25 $ 26 $ 30 Depreciation 5 5 6 7 8 Capital Expenditures 10 10 15 15 15 Investment in Working Capital 3 4 4 3 4 Assume a tax rate of 34%, a WACC of 13%, 2 million shares outstanding, $30 million debt value, and a growth rate of 5% after year 5. What is the estimated value per share to the nearest penny of XYZ using the perpetual growth method for calculating terminal value
Answer:
Value per share = $26.29675928947 rounded off to $26.30
Explanation:
To calculate the value of shares today, we first need to calculate the value of firm. We can calculate the value of firm by using the FCFF approach. The FCFF is calculated as follows,
FCFF = EBIT * (1- tax rate) + Depreciation - Capital Expenditure - Working Capital Investment
FCFF - Year 1 = 20 * (1-0.34) + 5 - 10 - 3 = 5.2 million
FCFF - Year 2 = 22 * (1-0.34) + 5 - 10 - 4 = 5.52 million
FCFF - Year 3 = 25 * (1-0.34) + 6 - 15 - 4 = 3.5 million
FCFF - Year 4 = 26 * (1-0.34) + 7 - 15 - 3 = 6.16 million
FCFF - Year 5 = 30 * (1-0.34) + 8 - 15 - 4 = 8.8 million
The value of firm can be calculated as follows,
Value of Firm = FCFF1 / (1+WACC) + FCFF2 / (1+WACC)^2 + ... +
FCFFn / (1+WACC)^n + [(FCFFn * (1+g) / (WACC - g)) / (1+WACC)^n]
Value of firm = 5.2 / (1+0.13) + 5.52 / (1+0.13)^2 + 3.5 / (1+0.13)^3 +
6.16 / (1+0.13)^4 + 8.8 / (1+0.13)^5 + [(8.8 * (1+0.05) / (0.13 - 0.05)) / (1+0.13)^5
Value of Firm = 82.59351857894 million
Value of Equity = Value of firm - value of debt
Value of equity = 82.59351857894 - 30
Value of equity = $52.59351857894 million rounded off to 52.59 million
To calculate the price per share, we need to divide the value of equity by the number of shares outstanding
Value per share = $26.29675928947 rounded off to $26.30
On April 1, Sunland Company purchased for $1620000 a tract of land on which a warehouse and office building was located. The following data were collected concerning the property: Current Assessed Valuation Vendor's Original Cost Land $620000 $570000 Warehouse 390000 360000 Office building 790000 690000 $1800000 $1620000 What are the appropriate amounts that Sunland should record for the land, warehouse, and office building, respectively
Answer:
Land $558,000
Warehouse $351,000
Office building $711,000
Explanation:
Calculation to determine the appropriate amounts that Sunland should record for the land, warehouse, and office building, respectively
ALLOCATED COST
LAND $620000/ $1,80,0000*$1,620,000=$558,000
WAREHOUSE 390000/$1800000*$1620000=$351,000
OFFICE BUILDING 790000/$1800000*$1620000=$711,000
Total $1,800,000 $1,620,000
Therefore the appropriate amounts that Sunland should record are :
Land $558,000
Warehouse $351,000
Office building $711,000