Answer:
warrant expense 51,000 debit
cash 6,000 credit
warranty liability 45,000 credit
--to record warrant-related accounts--
interest payable 16,667 debit
interest expense 3,333 debit
cash 20,000 credit
--to record interest expense for the loan and installment--
Manufacturing Facilities 5,192,772 debit
Cash 5,000,000 credit
Restoration Liability 192,772 credit
-- to record the payment to contractor--
Explanation:
Warranty: the additional expected expense are considered warranty laibility
Loan: we previously recorded accrued interest from March 1st to Dec 31th
That is: 200,000 x 10% x 10/12 months = 16,667 payable
At February 28th we recognize the last two month of interest
200,000 x 10% x 2/12 months = 3,333 expense
in total we have 16,667 + 3,333 = 20,000 cash outlay
Facility: the asset should add to all the cost necessary to acquire it:
As the conversion into community center is mandatory it is part of the cost:
present value of the 500,000 in ten years:
[tex]\frac{Maturity}{(1 + rate)^{time} } = PV[/tex]
Maturity $500,000.00
time 10.00
rate 0.10000
[tex]\frac{500000}{(1 + 0.1)^{10} } = PV[/tex]
PV 192,771.6447
Total cost:
5,000,000 cashg + 192,772 liability = 5,192,772
Indicate whether the following actions would increase, decrease, or not affect Indigo Inc.'s total assets, liabilities, and stockholders' equity:
Question Assets Liabilities Stockholders Equity
1. Authorizing and issuing stock certificates in a stock split
2. Declaring a stock dividend
3. Issuing stock certificates for the stock dividend declared in (2)
4. Declaring a cash dividend
5. Paying the cash dividend declared in (4)
Answer:
Assets Liabilities Stockholder's Equity
1. Authorizing and issuing Not affect Not affect Not affect
stock certificates in a
stock split
2. Declaring a stock Not affect Not affect Not affect
dividend
3. Issuing stock certificates Not affect Not affect Not affect
for the stock dividend
declared in (2)
4. Declaring a cash dividend Not affect Increase Decrease
5. Paying the cash dividend Decrease Decrease Not affect
declared in (4)
It is based on perceived characteristics such as style, fashion or peer acceptance.
Answer:
Consumer buying behavior
Explanation:
Due to various factors that affect consumer's purchase decision, crucial among them is emotional factors.Thus, many consumer marketing put more efforts in creating a stimulating discretionary buying behavior through catchy and enticing advertisement to create and increase demand.
Hence, considering that often times consumer goods are discretionary products people may want but don’t necessarily need, such as entertainment services and vacation travel, it can be concluded that CONSUMER BUYING BEHAVIOR is based on perceived characteristics such as style, fashion or peer acceptance.
A store has 5 years remaining on its lease in a mall. Rent is $1,900 per month, 60 payments remain, and the next payment is due in 1 month. The mall's owner plans to sell the property in a year and wants rent at that time to be high so that the property will appear more valuable. Therefore, the store has been offered a "great deal" (owner's words) on a new 5-year lease. The new lease calls for no rent for 9 months, then payments of $2,600 per month for the next 51 months. The lease cannot be broken, and the store's WACC is 12% (or 1% per month).
A. Should the new lease be accepted? (Hint: Be sure to use 1% per month.)
B. If the store owner decided to bargain with the mall's owner over the new lease payment, what new lease payment would make the store owner indifferent between the new and the old leases?
C. The store owner is not sure of the 12% WACC. It could be higher or lower. At what nominal WACC would the store owner be indifferent between the two leases?
Answer:
A. Should the new lease be accepted?
No, since the PV of the new deal is much higher than the PV of the current deal.
current deal's PV = $1,900 x annuity factor (1%, 60 periods) = $1,900 x 44.40459 = $84,368.72
new deal's PV:
$2,600 x annuity factor (1%, 51 periods) = $2,600 x 39.79814 = $104,475.16
$104,475.16 / 1.01⁹ = $95,525.80
B. If the store owner decided to bargain with the mall's owner over the new lease payment, what new lease payment would make the store owner indifferent between the new and the old leases?
To determine which lease value would make the store owner indifferent between the two options, we have to determine the future value of the first 9 payments that are not paid. Then that value should be equal to the present value of the increase in rent for the next 51 months:
step 1, calculate future value of 9 payments:
F V = payment x [(1 + r)ⁿ - 1] / r
payment = $1,900 r = 1% n = 9F V = $1,900 x [(1 + 0.01)⁹ - 1] / 0.01 = $17,800
step 2, calculate the present value of the increase in rent:
PV = payment / {1 - [1 / (1 + r)ⁿ] / r}
payment = $17,800r = 1% n = 51PV = $19,674 / ({1 - [1 / (1 + 0.01)⁵¹]} / 0.01) = $17,800 / 39.8 = $447.24
the new lease payment for which the store owner would be indifferent = $1,900 + $447.24 = $2,347.24
C. The store owner is not sure of the 12% WACC. It could be higher or lower. At what nominal WACC would the store owner be indifferent between the two leases?
in order to determine at what WACC would the store owner be indifferent between both alternatives, I used an excel spreadsheet to determine the IRR of the differential amount between both lease amounts:
periods 1 - 9 = -$1,900
periods 10 - 50 = $700
this results in a monthly IRR = 2.74%
WACC = 2.74% x 12 = 32.88%
clarissa wants to fund a growing perpetuity that will pay $5000 per year to a local museum, starting next year. She wants the annual amount paid to the museum to grow by 5% per year. Given that the interest rate is 8%, how much does she need to fun this perpetuity
Answer:
$166,666.67
Explanation:
Clarissa wants to take charge of finding a growing perpetuity that will pay a total amount of $5,000 per year to a local museum
She wants the annual amount paid to the museum to grow by 5% per year
= 5/100
= 0.05
The interest rate is 8%
= 8/100
= 0.08
Therefore, the amount used to fund the perpetuity can be calculated as follows
Pvo= $5,000/(0.08-0.05)
= $5,000/0.03
= $166,666.67
Hence Clarissa needs $166,666.67 to fund the perpetuity.
Consider the following hypothetical data for an open economy (in millions):
Assets owned inside the U.S. by U.S. citizens = $140, 000140,000
Assets owned outside the U.S. by U.S. citizens = $23,35723,357
Assets owned outside the U.S. by foreign citizens = $110,000110,000
Assets owned inside the U.S. by foreign citizens = $22,78622,786
The value of the International Investment Position (IIP) of the U.S. is__________ $ nothing million.
Answer: $571 million
Explanation:
International Investment Position (IIP) is an Economic measure that is calculated to see the assets owned by the citizens of a country outside the country versus the assets owned by foreigners in the country in question. It is informally referred to as a nation's Balance Sheet with other countries.
It is calculated by;
Value of the International Investment Position of the US = Assets owned outside the US by the US citizens - Assets owned inside the US for the foreign citizens
= 23,357 - 22,786
= $571 million
With perfect price discrimination the monopoly a. charges each customer an amount equal to the monopolist's marginal cost of production. b. eliminates all price discrimination by charging each customer the same price. c. eliminates profits and increases consumer surplus. d. eliminates deadweight loss.
Answer:
Option D, Eliminates the dead-weight loss.
Explanation:
Option D is correct because there is dead-weight loss under monopoly because it produces less as compared to perfect competition. Therefore, a monopolist eliminates this dead-weight loss by producing at the level where the marginal cost curve cuts the marginal revenue curve and charging each consumer their willingness to pay the amount
At the date of the business combination, the book values of Spice’s assets and liabilities approximated fair value except for inventory, which had a fair value of, and land, which had a fair value of
Answer:
$830,000.
Explanation:
Step one: determine or Calculate the total number of assets.
Total number of assets = Retained Earnings + inventory(spice) + cash + land fair value + inventory (pumpkin)
Total number of assets = 180,000 + 25,000 + 15,000 + 95,000 + 30,000 = $345,000.
Step two : Calculate or determine the total liabilities.
Total liabilities = retained earnings + bonds payable + Account payable (pumpkin) +
Total liabilities = 180,000 + 40,000 + 10,000 = $230,000.
Step three: determine the value for the total amount of goodwill.
Total amount of Goodwill = A - B
Where A = paid consideration + non controlling interest fair value.= $(210000 + 90000) = $300, 000.
B= acquired Assets - assumed liabilities. = $(345,000 - 230,000) = $115,000.
Total amounts of Goodwill = A - B = $185,000.
Step four: determine the consolidated sheet;
185,000 + 95,000 + 65,000 + 360,000 + 30,000 + 95,000 = $830,000.
Direct Materials Purchases Budget
Langer Company produces plastic items, including plastic housings for humidifiers. Each housing requires about 15 ounces of plastic costing $0.08 per ounce. Langer molds the plastic into the proper shape. Langer has budgeted production of the housings for the next four months as follows:
Units
July 3,500
August 4,400
September 4,900
October 6,300
Inventory policy requires that sufficient plastic be in ending monthly inventory to satisfy 30% of the following month's production needs. The inventory of plastic at the beginning of July equals exactly the amount needed to satisfy the inventory policy.
Required:
Prepare a direct materials purchases budget for July, August, and September, showing purchases in units and in dollars for each month and in total.
Langer Company
Direct Materials Purchases Budget
For July, August and September
July August September Total
Units to be produced
Direct materials per unit (ounces)
Production needs
Desired ending inventory (ounces)
Total needs
Less: Beginning inventory
Direct materials to be purchased (ounces)
Cost per ounce $0.1 $0.1 $0.1 $0.1
Total purchase cost $ $ $ $
Answer:
Direct Materials Purchases Budget For July, August and September
July August September
Units to be produced 3,500 4,400 4,900
Direct materials per unit (ounces) 15 15 15
Production needs 52,500 66,000 73,500
Desired ending inventory (ounces) 19,800 22,050 28,350
Total needs 72,300 88,050 101,850
Less: Beginning inventory 0 (19,800) (22,050)
Direct materials to be purchased 72,300 68,250 79,800
Cost per ounce $0.1 $0.1 $0.1
Total purchase cost $7,230 $6,825 $7,980
Explanation:
A purchases budget budget is used to determine the quantities and cost of purchases required for resale or use in production.
Thus shows quantities that must be purchased to meet expected production plus any increase in inventory levels that might be required.
26) A tenant wants to lease a building for $50,000 per year. She signs a five-year rental agreement that states that she will pay $25,000 every six months for the next five years. Draw the timeline for her rental payments, assuming she makes the first payment immediately?
Answer:
Please check the attached image for time line
Explanation:
A time orders series of event in a chronological order.
Because the tenant is paying money, it is cash outflow and thus would have a negative sign in front of it.
I hope my answer helps you
A corporation has operating income of $75,000. What is its taxable income if it receives a $20,000 dividend from another corporation in which it has the following ownership?
a. 10% is:
b. 65% is:
c. 90% is:
Answer:
Taxable income is $ 85000, $82000, and $75000
Explanation:
Given operating income = $75000
The dividend received from other corporations = $20000
Dividend received is taxable as, if the percentage of ownership is less than 20 percent then the deduction is 50 percent. If between 20 percent to 80 percent then 65 percent deduction. If more than 80 percent then 100 percent deduction.
a.10 percent ownership.
Taxable income = 75000 + 20000(1 – 50%) = 85000
b.65 percent ownership.
Taxable income = 75000 + 20000(1 – 65%) = 82000
c.90 percent ownership.
Taxable income = 75000 + 20000(1 – 100%) = 75000
A stock just paid an annual dividend of $0.40 per share. The firm expects to increase the dividend by 20 percent per year for the next four years and 3 percent per year thereafter. The discount rate is 11 percent. Which one of these is correct regarding the two-stage growth formula?
Answer:
12.78
Explanation:
Two stage dividend growth model enables us to identify dividend value by incorporating the effect of multiple growth rates. This model assumes that dividend will pass out through 2 stages of growth. In first stage the dividend grows at a constant rate to a specified time then dividend grows at a further rate.
= Do (1 + g) + D1 (1 +g) + D2 (1 +g) + D3 (1 +g) + D3 * (1 +g2) / (r - g2)
0.4 * 1.2 + 0.48 * 1.2 + 0.6 * 1.2 + 0.7 *1.2 + 0.83 * 1.03 / 11 - 3
= 12.78.
A company was formed with $60,000 cash contributed by its owners in exchange for common stock. The company borrowed $30,000 from a bank. The company purchased $10,000 of inventory and paid cash for it. The company also purchased $70,000 of equipment by paying $10,000 in cash and issuing a note for the remainder.
Use the information above to answer the following question. What is the amount of the total assets to be reported on the balance sheet?
a. $150,000.
b. $160,000.
c. $90,000.
d. $80,000.
Look at the tables below, which show, respectively, the willingness to pay and willingness to accept of buyers and sellers of bags of oranges. For the following questions, assume that the equilibrium price and quantity will depend on the indicated changes in supply and demand. Assume that the only market participants are those listed by name in the two tables.
Person Max Actual
bob 13 8
barly 12 8
bill 11 8
bart 10 8
brent 9 8
betty 8 8
Person Minimum Actual
carlos 3 8
courtney 4 8
chunk 5 8
cindy 6 8
craig 7 8
chad 8 8
Required:
a. Given that the equilibrium price is $8, what is the equilibrium quantity given the data displayed in the two tables?
b. What if, instead of bags of oranges, the data in the two tables dealt with a public good like fireworks displays? If all the buyers free ride, what will be the quantity supplied by private sellers?
c. Assume that we are back to talking about bags of oranges (a private good), but that the government has decided that tossed orange peels impose a negative externality on the public that must be rectified by imposing a $2-per-bag tax on sellers. What is the new equilibrium price?
Answer and Explanation:
a. The equilibrium quantity for the given two tables is
As if the equilibrium price is $8 so the six consumers i.e bob, barly,bill,bart, brent, betty) are paying more than the equilibrium price and on the other hand six producers (carlos, courtney, chunk, cindy, craig, chad) are accepted the price as the equilibrium price is more than the accepted price
Hence, the equilibrium quantity is 6
b. Now if all the buyers are free to ride so the quantity supplied by private sellers is 0 as the minimum accepted price is more than the willingness price as producers is not able to produced
c. At imposing $2 per bag tax on sellers, the new equilibrium price is $9 as the price rise to $9
Kerch Co. had beginning net fixed assets of $216,510, ending net fixed assets of $211,680, and depreciation of $40,435. During the year, the company sold fixed assets with a book value of $7,966. How much did the company purchase in new fixed assets?
Answer:
$43,571
Explanation:
The computation of the purchase in a new fixed asset is shown below:
Beginning net fixed assets $216,510
Less: depreciation expenses -$40,435
Net fixed assets -$176,075
Less: book value of sold assets -$7,966
Net fixed assets $168,109
Closing net fixed assets $211,680
purchases of net assets during the year $43,571 ($211,680 - $168,109)
We simply applied the above format
Which of the following is true regarding the effect of a debtor offering to pay a different type of payment, for example, goods instead of money, on a debt for which there is not a dispute over the amount or existence of the debt, and the creditor agrees?
A. A liquidated debt is involved, and there is an accord and satisfaction.
B. A liquidated debt is involved, and there is an accord but no satisfaction.
C. A liquidated debt is involved, and there is not a satisfaction or an accord.
D. An un-liquidated debt is involved, and there is an accord and satisfaction.
E. An un-liquidated debt is involved, and there is an accord but not satisfaction.
Answer:
D. An un-liquidated debt is involved, and there is an accord and satisfaction.
Explanation:
The impact when debtor offers to pay the different type of payment like goods instead of money, non dispute debt arises when the unliquidated debt is involved that means the amount is owed as mentioned in the contract or it is under dispute
Plus it also accord and satisfaction
Therefore the correct option is d.
If P represents the price of goods and services measured in money, then 1/P is the value of money measured in terms of goods and services True False
Answer:
The answer is True
Explanation:
There is an inverse relationship between the price level and value of money (also known as purchasing power). An increase in the price level is the same as an decrease in the value of money.
As the price level decreases money is able to buy more goods and services and as the price level increases, money is able to buy less goods and services. inflation decrease the value of money or consumers' purchasing power.
Suppose the reserve requirement ratio is 20 percent. Assuming no bank holds excess reserves and nobody withdraws cash, a $10,000 injection of new reserves by the Fed can create (in the entire mult-banking system), a maximum of:
Answer:
The maximum money created is $50000
Explanation:
The given reserve requirement ratio is = 20 percent
The injection of cash = $10000
So, first, we have to find the money multiplier and then multiply with the injected amount.
Since the reserve requirement is 20 percent so the money multiplier = 1/ 20 = 0.5 or 5.
The Fed can create the maximum money = 10,000 x 5 = 50,000
Assume the total cost of a college education will be $395,000 when your child enters college in 18 years. You presently have $65,000 to invest. What annual rate of interest must you earn on your investment to cover the cost of your child’s college education?
Answer:
8.87%
Explanation:
Calculation for the annual rate of interest you must earn on your investment to cover the cost of your child’s college education
Using this formula
FV = PV(1 + r)t
Based on the information we were told to calculate for annual rate of return, this means we would be Solving for r
r = (FV / PV)1 / t– 1
Where,
FV =$300,000
PV=$65,000
=1 / t =1/18 years
Let plug in the formula
r = ($300,000 / $65,000)1/18– 1
r=(4.6153846)^0.055555 -1
r=1.08867-1
r= 0.0887 *100
r=8.87%
Therefore the annual rate of interest you must earn on your investment to cover the cost of your child’s college education will be 8.87%
" When marketing research came back with the observation that customers were staying away from his bookstore because of a lack of services like gift cards, return policies and doing special orders, David was shocked. "We have the most generous policies of any store in the region. What more do they want
When marketing research came back with the observation that customers were staying away from his bookstore because of a lack of services like gift cards, return policies and doing special orders, David was shocked. "We have the most generous policies of any store in the region. What more do they want? Nobody asks about them or uses them." David and his bookstore are likely suffering from a:
A. knowledge gap.
B. standards gap.
C. retail policy gap.
D. delivery gap.
E. communications gap.
Answer:
A. knowledge gap.
Explanation:
Knowledge gap is term in business or marketing which describes the difference between the customers' expectations of the service and the company's perception of those expectations.
Hence, knowledge gap arises when a management fails to understand exactly the expectations of customers.
Knowledge gap could occur due to various reasons, some of which are:
1. Lack or inadequate market research.
2. Lack of management and customer interaction.
3. Inability to heed customer complaints.
Hence, in this case, David and his bookstore are likely suffering from a KNOWLEDGE GAP.
Which of the following is a typical complaint of host-country competitors (such as GM, Ford etc) against foreign firms (such as KIA in the US)?a) foreign firms burden the host-country with infrastructure requirements.b) foreign firms lure local workers away from host-country businesses.c) foreign firms do not have to obey host-country law and regulations.d) foreign firms receive financial support from host-country governments.
Answer:
Option (d) is the correct answer to this question.
Explanation:
The nation in which those State members or organizations are involved at the request of the state and/or foreign negotiation.
A foreign country 's government, in which a representative and foreign embassies live while on duty. The diplomat and staff serve their own country's values and policies while being host country guests.
Other options are incorrect because they are not related to the given scenario.
The accourtant for Mega Stores, Inc, should have recorded the following correct entry Jan 15 Notes Receivable 243 Equipment 243he misunderstood the transaction and recorded an incorrect entry, Which of the following w rong entries pertaining to this transaction could have been detected as erroneous when using a trial balance? A) Jan 15 Equipment 243 Notes Receivable 243B) Jan 15 Notes Payable 243 Cash 243C) Jan 15 Notes Receivable 243 Equipment 234 D) Jan 15 Notes Receivable 234 Equipment 234
Answer:
C) Jan 15 Notes Receivable 243 Equipment 234
Explanation:
The trial balance is a summary of all the balances of the various transactions used by an entity. It is expected that the credits should equal the debits in a trial balance as the saying goes, "for every credit, there must be a corresponding debit"
A review of the options given shows that option C) Jan 15 Notes Receivable 243 Equipment 234 would show an error detectible by a trial balance as the credit does not correspond to the debit.
Suppose you are a manager at an advertising agency who is eager to utilize Covey’s advice about delegation. Today, you need to work on a presentation for a potential new client. This requires delegating a routine status report about an ongoing advertising campaign to Patricia. You ask Patricia to complete the status report, making her haveresponsibility for its completion. Which of the following are true after you delegate the status report to Patricia? Check all that apply. You should guide Patricia through each step of the assignment to serve as a mentor. Patricia must have authority over the resources and personnel needed to complete the status report. You should help Patricia with the status report, to the extent you have time. Patricia will be held accountable for the results of the assignment. The advertising agency recently reorganized. Patricia now reports to both the regional sales manager and a senior product manager which means there unity of command. Unity of command in matrix organizations. Lower-level employees have the authority to act without first seeking approval for activities in a company. Continue without saving
Answer and Explanation:
In the first situation, the accounting and responsibility is chosen as of the superior assigned the work to the subordinate so there would be accounting and responsibility that the given work should be completed within the prescribed time and under the full responsibility
In the second situation, there is a unity of command but it does not exist in the matrix organization. Here unity of command is reporting to one boss.
In the third situation, decentralization is there as there are the authority to take independent decisions by middle level and lower level employees
The following statements that are true after you delegate the status report to Patricia are:
A. You should guide Patricia through each step of the assignment to serve as a mentor.B. Patricia must have authority over the resources and personnel needed to complete the status report. D. Patricia will be held accountable for the results of the assignment.According to Stephen Covey’s advice about delegation, he stated that when duties or responsibilities are delegated to a person that does not have the capacity to properly handle them, then the output may be disastrous.
Furthermore, Covey also said that when delegating to someone, it is important to give them space to work and not to interfere too much and hold them accountable to the results.
As a result of this, we can see that Patricia is in charge of the routine status report as a part of the ongoing advertisement campaign and she should have not only full authority, but also be held accountable for the outcome of the assignment.
Therefore, the correct answers are options A, B and D
Read more here:
https://brainly.com/question/10986197
Today you purchase a $600 face-value, 8% coupon bond for $600. This bond matures over 10 years. What is the value of the cash flow in year 5?
Answer:
the value of the cash flow in year 5 is -$48
Explanation:
Cash flow in year 5 include a capital repayment and interest expense.This can be determined by constructing an amortization schedule from the data given.
The first step in constructing the amortization schedule is to find the Yield to Maturity.
Pv = -$600
Pmt = $600 × 8% = $48
P/yr = 1
N = 10
Fv = $600
YTM = ?
Using a Financial Calculator the Yield to Maturity is 8%.
then to determine the cash flow for year 5, we need the coupon amount (interest) and the amount of capital repayment.
Coupon $48
Capital $0
Total $48
Therefore the cash flow in year 5 is -$48.
Because ________ often make it possible for young firms to provide services that are equivalent or superior to an incumbent, a new entrant may be able to serve a market more effectively, with more personalized services and greater attention to product details.
Answer:
B. Digital Technologies
Explanation:
The term that goes in the blank line is Digital Technologies. These technologies are various different electronic tools, systems, devices, and resources that allow the firm to generate, store, and process data. These devices and systems give the firms the ability to compete and have an edge over the bigger firms of the industry by using them in a unique and more effective way towards accomplishing their end-goal and improving the customer's experience.
On December 31 of the current year, Sam Company was merged into Paul Company. In carrying out the business combination, Paul Company issued 60,000 shares of its $10 par value common stock, with a fair value of $15 per share, for all of Sam Company's outstanding common stock. The stockholders' equity section of the two companies immediately before the business combination was:
Complete Question:
On December 31 of the current year, Sam Company was merged into Paul Company. In carrying out the business combination, Paul Company issued 60,000 shares of its $10 par value common stock, with a fair value of $15 per share, for all of Sam Company's outstanding common stock. The stockholders' equity section of the two companies immediately before the business combination was:
Paul Sam
Common Stock $500,000 $400,000
Additional Paid-in Capital 200,000 100,000
Retained Earnings 300,000 200,000
Assume that the transaction is accounted for using the acquisition method. In the consolidated balance sheet at the end of the next year, the Additional Paid-In Capital account should be reported at
A) $400,000.
B) $300,000.
C) $500,000.
D) $200,000.
Answer:
Option C. $500,000
Explanation:
The reason is that the new additional Paid In Capital will be calculated by taking the stock issuing company's Addition Paid-In Capital and the additional paid in capital arising from stock issue, which means that:
Addition Paid-In Capital after merger = Addition Paid-In Capital of Paul Company + Addition Paid-In Capital arising from shares issues
Here
Addition Paid-In Capital of Paul Company = $200,000
Addition Paid-In Capital arising from shares issues = 60,000 shares * ($15 per share - $10 per share) = $300,000
By putting above values in the equation, we have:
Addition Paid-In Capital after merger = $200,000 + $300,000
Addition Paid-In Capital after merger = $500,000
The December 31, 2018, balance sheet of Whelan, Inc., showed long-term debt of $1,420,000, $144,000 in the common stock account, and $2,690,000 in the additional paid-in surplus account. The December 31, 2019, balance sheet showed long-term debt of $1,620,000, $154,000 in the common stock account and $2,990,000 in the additional paid-in surplus account. The 2019 income statement showed an interest expense of $96,000 and the company paid out $149,000 in cash dividends during 2019. The firm's net capital spending for 2019 was $1,000,000, and the firm reduced its net working capital investment by $129,000.
What was the firm's 2019 operating cash flow, or OCF? (A negative answer should be indicated by a minus sign. Do not round intermediate calculations and enter your answer in dollars, not millions of dollars, rounded to the nearest whole number, e.g., 1,234,567.)
Operating cash flow
Answer:
$606,000
Explanation:
For the computation of operating cash flow first we need to follow some steps which is shown below:-
Net New borrowing = Long-term Debt, 2019 - Long-term Debt, 2018
= $1,620,000 - $1420,000
= $200,000
Cash flow to creditors = Interest expense - Net new borrowings
= $96,000 - $200,000
= -$104,000
Net new equity = Common stock 2019 + Additional paid in surplus 2019 - Common stock 2018 + Additional paid in surplus 2018
= $154,000 + $2,990,000 - $144,000 - $2,690,000
= $310,000
Cash flow to stockholders = Dividend 2019 - Net new equity
= $149,000 - $310,000
= -$161,000
Cash flow from assets = Cash flow to creditors + Cash flow to stockholders
= -$104,000 + (-$161,000)
= -$265,000
and finally
Operating cash flow = cash flow from assets + Net capital spending + Change in Net working capital
= (-$265,000) + $100,000 + (-$129,000)
= $606,000
What do economists call the period when prices are rising even through the
quantity of goods and services remains constant?
A. Stagnation
B. Contraction
C. Disinflation
D. Inflation
Answer:
D. Inflation
Explanation:
Inflation-a general increase in prices and fall in the purchasing value of money
The situation when prices are rising even through the quantity of goods and services remains constant, is known as inflation. Thus, the correct option is D). Inflation.
What does the term inflation mean?In economics, the term inflation generally refers to the general increase in the prices of goods and services in an economy. It is the rate of increase in prices over a given period of time.
When the general price level rise in an economy, then the particular and each unit of currency buys fewer goods and services that directly means the inflation corresponds to a reduction in the purchasing power of money.
Thus, it can be said the period when prices are rising even through the quantity of goods and services remains constant, the economists call that period inflation.
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According to the basic quantity equation of money, if price and output fall while velocity increases, then: Group of answer choices
Answer:
The quantity of money will fall as well.
Explanation:
According to the quantity theory of money, money supply (M) and price level (P) in an economy are in direct proportion to one another.
In other words, the percentage change in price level is proportionate to the percentage change in Money Supplied.
The formula is given as:
M*V= P*T
where, V = Velocity of money and T = volume of the transactions.
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Schwiesow Corporation has provided the following information:_________. Cost per Unit Cost per PeriodDirect materials $ 7.05 Direct labor $ 3.50 Variable manufacturing overhead $ 1.65 Fixed manufacturing overhead $ 11,000Sales commissions $ 1.00 Variable administrative expense $ 0.40 Fixed selling and administrative expense $ 5,500For financial reporting purposes, the total amount of product costs incurred to make 5,000 units is closest to:A. $72,000B. $61,000C. $11,000D. $77,000
Answer:
Total product cost= $72,000
Explanation:
Giving the following information:
Direct materials $7.05
Direct labor $3.50
Variable manufacturing overhead $1.65
Total unitary variable cost= $12.2
Fixed manufacturing overhead $11,000
The product costs are the sum of direct material, direct labor, and total manufacturing overhead:
Total product cost= 5,000*12.2 + 11,000
Total product cost= $72,000
ZNet co. is a web based retail company. The company reports the following for the past year. The company's CEO believes that sales for next year will increase by 10% and both profit margin and the level of average invested assets will be the same as for the past year
1. Compute return on investment for 20172. Compute profit margin for 20173. If the CEO's forecast is correct, what will return on investment equal for 2018?4. If the CEO's forecast is correct, what will investment turnover equal for 2018?
Answer:
1. 17%
2. 42.5%
3. $2,748,900
4. 44%
Explanation:
1. Return on Investment for 2017
= [tex]\frac{Operating Income}{Average Invested Assets}[/tex]
= [tex]\frac{2,499,000}{14,700,000}[/tex]
= 17%
2. Profit Margin 2017
= [tex]\frac{Operating Income}{Sales}[/tex]
= [tex]\frac{2,499,000}{5,880,000}[/tex]
= 42.50%
3. Should the sales increase by 10% in 2018 then the new sales figure will be;
= $5,880,000 + ($5,880,000 *10%)
= $6,468,000
Profit = Sales * Profit Margin
= 6,468,000 * 42.5%
= $2,748,900
Return on Investment for 2018
= [tex]\frac{Operating Income}{Average Invested Assets}[/tex]
= [tex]\frac{2,748,900}{14,700,000}[/tex]
= 18.7%
4. Investment turnover equal for 2018
= [tex]\frac{ Sales}{Average Invested Assets}[/tex]
= [tex]\frac{6,468,000}{14,700,000}[/tex]
= 44%