Answer:
A. Yes, you can be confident that the portfolio will not lose more than 30% of its value next year. This is because the low end of the prediction interval is less than 30%
Explanation:
Confidence Interval is a type of estimated probability that the observed data lies within the parameters. 95% confidence interval means that its is 95% certain that true mean of population is within the range. In the given scenario there is 95% confidence interval that the portfolio will not lose more than 30% of its value next year.
Advika is a resident of India who exports hand-dyed fabrics to other nations. Since India has an exchange control system, what does this mean for Advika
Answer: The Reserve Bank of India keeps all of Advika’s foreign currency for her.
Explanation:
When a country uses exchange controls, it limits the amount of foreign currency that can come into a country. This is usually done to ensure stability in the money market of the country as well as to improve the balance of payments for the country.
One way of implementing exchange control is for all foreign currency to go through the Central bank of the country. Should a citizen need access to foreign currency, they would need to apply to the central bank to access it. With India having an exchange control system, the Reserve Bank of India keeps all foreign currency and Advika would have to apply for it should she need it.
Fenwick operates a grocery store and his retail building was completely destroyed by a hurricane on August 22, Year 10. The fair market value of the building before the hurricane was $1,200,000 with an adjusted basis of $800,000. His insurance company reimbursed him $1,200,000 of December 2, Year 10. When is the last date that Fenwick can replace this building with qualifying property and avoid recognizing gain from this transaction.A. December 31, 2013.B. August 22, 2015.C. December 31, 2015.D. December 31, 2016.
Answer:
D. December 31, 2016.
Explanation:
Fenwick company had retail building which was destroyed on August 22, hurricane. The hurricane was so intense that complete building was damaged. The building already had an insurance policy due to which the fair value of the building is reimbursed. Fenwick can claim the fair value of the building from an insurance company. If he replaces the building with qualifying building on the date he gets the insurance claim he will not be required to record gain of the transaction.
Fortune, Inc., is preparing its master budget for the first quarter. The company sells a single product at a price of $25 per unit. Sales (in units) are forecasted at 45,000 for January, 55,000 for February, and 50,000 for March. Cost of goods sold is $14 per unit. Other expense information for the first quarter follows.
Commissions....8% of sales
Rent....$14,000 per month
Advertising....15% of sales
Office salaries....$75,000 per month
Depreciation....$40,000 per month
Interest....15% annually on a $250,000 note payable
tax rate....30%
Prepare a budgeted income statement for this first quarter.
Answer:
Fortune, Inc.
Budgeted Income Statement
For the first quarter, 202x
January February March Total
Sales revenue $1,125,000 $1,375,000 $1,250,000 $3,750,000
Cost of goods sold $630,000 $770,000 $700,000 $2,100,000
Gross profit $495,000 $605,000 $550,000 $1,650,000
S&A expenses:
Rent $14,000 $14,000 $14,000 $42,000Office salaries $75,000 $75,000 $75,000 $225,000Sales comm. $90,000 $110,000 $100,000 $300,000Advertising $168,750 $206,250 $187,500 $562,500Depreciation $40,000 $40,000 $40,000 $120,000EBIT $107,250 $159,750 $133,500 $400,500
Income taxes $32,175 $47,925 $40,050 $120,150
Net income $75,075 $111,825 $93,450 $280,350
Stanley Systems completed the following stock issuancetransactions:
May 19 Issued 1,200 shares of $2 par value common stock for cash of $12.00 per share.
Jun. 3 Isssued 500 shares of $8, no-par preferred stock for $25,000 cash.11 Received equipment with a market value of $70,000 in exchange for 4,000 shares of the $2 par value common stock
Requirements
1. Journalize the transactions. Explanations are not required.
2. How much paid-in capital did these transactions generate for
StanleyStanley
Systems?
Date
Accounts
Debit
Credit
May 19
Cash
Common Stock—$2 Par Value
Paid-In Capital in Excess of Par—Common
And if possible please help me with,
Pioneer Amusements Corporation had the following stockholders' equity on November 30:
Stockholders' Equity
Paid-In Capital:
Common Stock—$5 Par Value; 1,300 shares
authorized, 150 shares issued and outstanding $
750
Paid-In Capital in Excess of Par—Common 2,250
Total Paid-In Capital 3,000
Retained Earnings 56,000
Total Stockholders' Equity $
59,000
(Click the icon to view the stockholders' equity.) On December 30,Pioneer purchased 100 shares of treasury stock at $ 14 per share.
Read the requirements
1. Journalize the purchase of the treasury stock.
2. Prepare the stockholders' equity section of the balance sheet at December 31,
20182018.
Assume the balance in retained earnings is unchanged from
NovemberNovember
3030.
3. How many shares of common stock are outstanding after the purchase of treasury stock?
Date
Accounts and Explanation
Debit
Credit
Dec. 30
Treasury Stock—Common
1000
Cash
1000
Purchased treasury stock.
Answer:
cash 14,400 debit
common stock 2,400 credit
additional paid-in CS 12,000 credit
--to record May 19th transactions--
cash 12,500 debit
preferred stock 4,000 credit
additional paid-in PS 8,500 credit
--to record June 3th transactions--
Equipment 70,000 debit
common stock 8,000 credit
additional paid-in CS 62,000 credit
--to record third transactions--
Total paid-in afterl these three transactions:
12,000 + 8,500 + 62,000 = 82,500
Explanation:
1,200 shares x $12 each = $14,400 cash received
1,200 shares x $ 2 each = $ 2,400 common stock
Additional paid-in $ 12,000
500 shares x $25 = $12,500 cash received
500 shares x $ 8 = $ 4,000 preferred stock
addtional paid-in $ 8,500
70,000 equipment
common stock 4,000 shares x $2 = 8,000
additional paid-in 70,000 - 8,000 = 62,000
Company purchased equipment at a cost of $120,000 that has a depreciable cost of $90,000 and an estimated useful life of 3 years or 30,000 hours. Using straight-line depreciation, calculate depreciation expense for the second year.
Answer:
$30,000
Explanation:
The computation of the depreciation expense for the second year using the straight line method is shown below:
As we know that
= (Original cost - residual value) ÷ (useful life)
= ($90,000) ÷ (3 years)
= $30,000
In this method, the depreciation is the same for all the remaining useful life
Hence, the second year depreciation expense is $30,000
To prepare a budgeted balance sheet as of December 31, 2020, data is needed from the ______ December 31, 2019. income statement for the year ended
Answer and Explanation:
For preparing the budgeted balance sheet as of December 31,2020 we need to refer the data of balance sheet as of December 31,2019 so that the firm could get an idea.
Also by referring the income statement, statement of owner equity, profit and loss account we can get an idea so that it becomes easy for the company to prepare the budgeted balance sheet
Answer:
data is needed from the balanceh sheet as of
Choose three distinct but related business functions (e.g., inventory control, purchasing, payroll, accounting, etc.). Write a short paper describing how interfacing the information systems of these three functions can improve an organization’s performance.
Answer:
The three functions can be described as follows:
i) Inventory control
ii) Procurement
iii) Sales
Explanation:
Following are the description of the given points:
In point (i):
It is also the center of the operational activities, in which it would be accountable to always get rid of a perfect product inventory and thus not have an untouched inventory in the storage facility.
In point (ii):
This is the first step for just a brand until it hits the end user. It is sourcing, which most appropriate and progressed necessity for both the manufacturing of the company.
In point (iii):
For the business, it primarily provides, a large number of alternative considerations. However, certain expenses it control, including the expense of keeping as well as the wastefulness in raw resources, all will be determined from selling price.
Game Depot manufactures video games that it sells for $39 each. The company uses a fixed manufacturing overhead allocation rate of $6 per game. Assume all costs and production levels are exactly as planned. The following data are from Game Depot's first two months in business during 2018: EEB
Read the requirements.
Requirement 1. Compute the product cost per game produced under absorption costing and under variable costing. October 2018 AbsorptionVariable costing costing Total product cost per game
Answer:
Using variable cost per unit method $20.15 per game
Using absorption costing $17 per game
Explanation:
Cost per game is ;
overhead allocation rate is $6
variable cost is $11
Fixed manufacturing overheads 16,200
Fixed selling and administrative cost 8,500
units sales in month of October is 1,700 units
Production units 2,700 units
Total Fixed Overheads 16,200 + 8,500 = 24,700
Overhead rate = 24,700/ 2700 = 9.15
Total cost per unit (Variable + Fixed) = $20.15 / unit
A bridge on a prominent public roadway in the city of Springfield, Ohio, was deteriorating and in need of repair. The city posted notices seeking proposals for an artistic bridge design and reconstruction. Bridges by Madison LLC, owned and managed by Madison Mason and his wife, May Mason, decided to submit a bid for a decorative concrete project that incorporated artistic metalwork. They contacted Pablo Hand, a local sculptor who specialized in large-scale metal designs, to help them design the bridge. The city selected their bridge design and awarded them the contract for a commission of $184,000. Bridges by Madison and Hand then entered into an agreement to work together on the bridge project. Bridges by Madison agreed to install and pay for concrete and structural work, and Hand agreed to install the metalwork at his expense. They agreed that overall profits would be split, with 25 percent to Hand and 75 percent going to Bridges by Madison. Hand designed numerous metal pig sculptures that were incorporated into colorful decorative concrete forms designed by May Mason, while Madison Mason performed the structural engineering. The group worked together successfully until the completion of the project. Suppose Hand had entered into an agreement to rent space in a warehouse that was close to the bridge so that he could work on his sculptures near the location at which they would eventually be installed. He entered into the contract without the knowledge or consent of Bridges by Madison. In this situation, would a court be likely to hold that Bridges by Madison was bound by the contract that Hand entered? Help please here is the multiple choices
Answer:
Bridges by Madison and Hand
Agreement by Hand for a Warehouse:
1. Yes - when they agreed to work together, this implied that they would agree to be liable for each other's contracts.
Explanation:
This is especially as far as this joint project is concerned. Since the purpose of the warehouse was to further and fulfill the project, the agreement entered into by hand for a warehouse affects Bridges by Madison.
In a joint venture, every aspect of the project's lifetime is shared: shared profits, shared losses, shared rewards, shared risks, shared obligations and responsibilities, shared rights and privileges until the end of the project, which also ends the joint venture, unless there is a binding agreement to the contrary. In such a case, Hand would not have been a joint-venturer but a sub-contractor.
A firm always has a competitive disadvantage when its return on invested capital is:_________
A. 2 percent or lower in a declining industry.
B. declining steadily over two or more years.
C. about the same as its closest competitor.
D. below the industry average.
Answer:
A firm always has a competitive disadvantage when its return on invested capital is:_________
D. below the industry average.
Explanation:
A firm's competitive disadvantage shows when the return on investment is below the industry average. For instance, let us assume that Niposte, Inc. operates in the paper milling industry and that its return on investment of 10% falls below the industry average of 15%, then one can conclude that Niposte, Inc. is not favored in this industry. The cause of such a situation for Niposte, Inc. may be that the ability of its management to turn revenue into profits for stockholders is hampered with excessive costs. This is because the return on investment is a profitability ratio that shows how Niposte, Inc. and its competitors are performing in terms of generating profit from revenue through efficient management of operating costs.
The following cost behavior patterns describe anticipated manufacturing costs for 2013: raw material, $8.20/unit; direct labor, $11.20/unit; and manufacturing overhead, $386,400 + $9.20/unit. Required: If anticipated production for 2013 is 42,000 units, calculate the u
Answer:
Note: The missing part of the question is "using variable costing and absorption costing. Explain the difference"
Solution
According to variable costing, the unit cost based was
= $8.20 + $11.20 + $9.20
= $28.6
According to absorption costing,
Total Manufacturing costs= Direct material + Direct labor + Overhead
= $8.20 + $11.20 + ($386,400/42,000 units) + $9.20
= $8.20 + $11.20 + $9.2 + $9.2
= $37.8
The difference between the variable costing and the absorption cost is because the product costing using variable costing method only includes variable costs.
Which one of the following stocks is correctly priced if the risk-free rate of return is 3.6 percent and the market risk premium is 8.1 percent?
Stock Beta Expected Return
A. 89 7.83%
B. 1.52 12.59
C. 1.25 11.27
C 1.27 14.50
D. 80 10.08
Answer: Stock of D is correctly priced at 10.08%
( for the beta of Stock A and D, I guessed you meant 0.89 and 0.80 respectively as opposed to 89 and 80 you put, so i corrected and solved accordingly.)
Explanation:
Expected return = Rf + beta ( Rm - Rf )
Rf =Risk free return = 3.6
Rm-Rf = Market risk premium = 8.1%
A) Stock Beta , Expected Return= 0.89, 7.83%
Expected return = 3.6 + 0. 89 (8.1) = 10.809%-- its over priced
B) Stock Beta , Expected Return= 1.52 12.59%
Expected return = 3.6 + 1.52(8.1) = 15.912%---- its over priced
B) Stock Beta , Expected Return= 1.25 11.27%
Expected return = 3.6 + 1.25(8.1) = 13.725 %--- its overpriced
c) Stock Beta , Expected Return= 1.27 14.50%
Expected return = 3.6 + 1.27(8.1) = 13.887%---- Its underpriced
d) Stock Beta , Expected Return= 0.80 10.08%
Expected return = 3.6 + 0. 80(8.1) = 10.08%---- Correctly priced
A company budgets 10,000 units of sales based on a projected selling price of $13.00. The actual units sold were 15,000 at a price of $10. What is the flexible budget for sales?
Answer:
The flexible budget for sales = $195,000
Explanation:
A flexible budget is that which is prepared for actual level of activity achieved. It is used for control purpose to determine how where the a business is doing in terms of performance .
The flexible budgeted is usually prepared at the end of the period to which it relates. In other words, it is prepared in retrospect. And it uses the assumptions of the fixed budget.
The flexible budget for sales = actual sales in units × Standard selling price
= 15,000× $13.00 = $195,000
The flexible budget for sales = $195,000
Sonic Inc. manufactures two models of speakers, Rumble and Thunder. Based on the following production and sales data for June, prepare (a) a sales budget and (b) a production budget: Rumble Thunder Estimated inventory (units), June 1 260 64 Desired inventory (units), June 30 299 56 Expected sales volume (units): Midwest Region 3,650 3,200 South Region 4,900 4,250 Unit sales price $135 $210 a. Prepare a sales budget.
Answer:
Sonic Inc.
a) Sales Budget:
Rumble Thunder
Total units sold 8,550 7,450
Unit sales price $135 $210
Sales value $1,154,250 $1,564,500
b) Production Budget:
Rumble Thunder
Total units sold 8,550 7,450
Desired inventory (units), June 30 299 56
Estimated inventory (units), June 1 260 64
Units to be produced 8,589 7,442
Explanation:
a) Data and Calculations:
Rumble Thunder
Total units sold 8,550 7,450
Desired inventory (units), June 30 299 56
Estimated inventory (units), June 1 260 64
Units Produced 8,589 7,442
Rumble Thunder
Expected sales volume (units):
Midwest Region 3,650 3,200
South Region 4,900 4,250
Total units sold 8,550 7,450
Unit sales price $135 $210
a) The Sonic Inc.'s sales budget determines the production budget. When the quantity to be sold is obtained, then production planning can take place based on meeting customers' demand for goods or services.
b) The Production budget is a bye-product of the sales budget, though, it is critical in the whole value chain. It is the production budget that guides production planning, including the type, design, and other features of the product.
Starset Machine Shop is considering a 4-year project to improve its production efficiency. Buying a new machine press for $425,000 is estimated to result in $169,000 in annual pretax cost savings. The press falls in the 5-year MACRS class, and it will have a salvage value at the end of the project of $69,000. The press also requires an initial investment in spare parts inventory of $28,000, along with an additional $3,500 in inventory for each succeeding year of the project. The shop’s tax rate is 23 percent and its discount rate is 10 percent.
1. Calculate the NPV of this project.
2. Should the company buy and install the machine press?
A. No.
B. Yes.
Answer:
96,287
Explanation:
Cost of Machine $425,000
5 years MACRS rate is
Year 1 - 425,000 * 20% = 85,000
Year 2 - 425,000 * 32% = 136,000
Year 3 - 425,000 * 19.20% = 81,600
Year 4 - 425,000 * 11.52% = 48,960
Total depreciation in 4 years = 351,560
New Book Value of asset = 73,440
Salvage value at the end of 4 years = 69,000
Gain on disposal = 4,440
The NPV can be calculated based on tax savings
169000 for 4 years using annuity at 23% rate.
The NPV of the project is;
-425,000 + 251,787 + 169,000 +3,500 + 28,000 + 69000
Net Present Value = 96,287
The liquidity trap _____. rev: 06_20_2018 Multiple Choice makes expansionary monetary policy less effective makes contractionary monetary policy less effective makes expansionary fiscal policy less effective makes contractionary fiscal policy less effective
Answer:
Makes expansionary monetary policy less effective
Explanation:
A liquidity trap occurs when interest rates are already so low, that most of the public prefer to hold money as cash, instead of investing in bonds and other interest-bearing securities.
In a situation like this, expansionary monetary policy becomes less effective, because the central bank cannot boost the economy anymore by lowering interest rates (interest rates are lowered by increasing the money supply) because most of the public prefers to hold money as cash, and the interest rate is very low already.
When preparing the operating activities section of the statement of cash flows using the indirect method, non-operating gains are added to net income. true or false
Answer:
True
Explanation:
Your university is considering two projects to increase enrollment: offering traditional classes from midnight to 6 a.m. or offering house call classes where the professor would visit your home to provide instruction. Use a simple scoring model with at least three criteria to evaluate these two potential projects and indicate which project should be chosen.
The correct answer to this open question is the following.
The criteria for our simple scoring model will bee the following:
Project 1. Midnight to 6:00AM
CRITERIA. WEIGHT SCORE
-Number of teachers 3 3
-Teachers salaries. 3 3
-Classroom cost. 1 1
-N. Students 2 2
Project 2. Home visit.
-Number of teachers 3 3
-Teachers salaries. 3 3
-Transportation. 3 3
-N. Students. 3 3
As we can see in the tables, project 1 is more feasible because depending on the number of students, the school can use one or two classrooms which means hiring teachers according to the number of students registered in a class.
On project 2, the variables increased the costs and the risk because depending on the number of students and the classes needed, the school would have to hire many teachers for different class times. This could be exponential. Another issue to consider is the fact that on project number 2, the school has to pay for the transportation of teachers to the student's home.
So in general terms, project 1 is more feasible.
what is the annual percentage yield(APY) for money at an annual rate of (a)4.57% monthly (b)4.58% compunded quartelty
Answer:
a)Annual rate of return = 4.67%
(b)Annual rate of return = 4.66%
Explanation:
Annul rate of return where compounding is done more frequenting could be worked out as follows:
Annual rate of return = (1+r)^n - 1
r - rate of return per period
n- number of periods in a year
a) Monthly rate of 4.57%
r- monthly rate = 4.57%/12 = 0.38% per month
n- 12 months
Annual rate of return = (1+ 0.003808)^12 - 1 × 100 = 4.67%
Annual rate of return = 4.67%
b) 4.58% compounded quarterly
r- quarterly rate = 4.58%/4 = 1.145 %
n- 4 quarters in a year
Annual rate of return = (1+0.01145)^4 - 1 × 100= 4.66%
a)4.57% monthly
Annual rate of return = 4.67%
(b)4.58% compounded quarterly
Annual rate of return = 4.66%
g Exodus Limousine Company has $1,000 par value bonds outstanding at 15 percent interest. The bonds will mature in 30 years. Use Appendix B and Appendix D for an approximate answer but calculate your final answer using the formula and financial calculator methods. Compute the current price of the bonds if the percent yield to maturity is
Question:
Exodus Limousine Company has $1,000 par value bonds outstanding at 15 percent interest. The bonds will mature in 30 years. Use Appendix B and Appendix D for an approximate answer but calculate your final answer using the formula and financial calculator methods. Compute the current price of the bonds if the percent yield to maturity is 10%
Note the tutor added 10% as the yield
Answer:
Price of bond= $1,471.35
Explanation:
The value of the bond is the present value (PV) of the future cash receipts expected from the bond. The value is equal to present values of interest payment plus the redemption value (RV) discounted at the yield rate
Value of Bond = PV of interest + PV of RV
The value of bond Exodus Limousine Company can be worked out as follows:
Step 1
PV of interest payments
PV = A × (1+r)^(-n)/r
A-annul interest payment:
= 15% × 1,000 = 150
r-Annual yield = 10%
n-Maturity period = 30
PV of interest payment:
=150× (1- (1+0.1)^(-30)/0.1= 1,414.037
Step 2
PV of Redemption Value
= 1000 × (1.1)^(-30) = 57.308
Step 3
Price of bond
=1,414.037 + 57.308 = 1,471.345
Price of bond= $1,471.345
WACC and Cost of Common Equity
Kahn Inc. has a target capital structure of 45% common equity and 55% debt to fund its $10 billion in operating assets. Furthermore, Kahn Inc. has a WACC of 12%, a before-tax cost of debt of 10%, and a tax rate of 25%. The company's retained earnings are adequate to provide the common equity portion of its capital budget. Its expected dividend next year (D1) is $3, and the current stock price is $34.
A. What is the company's expected growth rate?
B. If the firm's net income is expected to be $1.6 billion, what portion of its net income is the firm expected to pay out as dividends?
Answer:
A. What is the company's expected growth rate?
current stock price = expected dividend / (required rate of return - growth rate)
$34 = $3 / (12% - g)
12% - g = $3 / $34 = 8.82%
growth rate = 12% - 8.82% = 3.18%
B. If the firm's net income is expected to be $1.6 billion, what portion of its net income is the firm expected to pay out as dividends?
WACC = (equity x Re) + [debt x cost of debt x (1 - tax rate)]
12% = (45% x Re) + (55% x 10% x 0.75) = 0.45Re + 4.125%
0.45Re = 12% - 4.125% = 7.875%
Re = 7.875% / .45 = 17.5%
growth rate = (net income / equity) x (1 - dividend payout ratio)
3.18% = ($1.6 billion / $4.5 billion) x (1 - dividend payout ratio)
3.18% = 0.3556 x (1 - dividend payout ratio)
1 - dividend payout ratio = 3.18 / 0.3556 = 0.089
dividend payout ratio = 1 - 0.089 = 0.911
this means that the company distribute 91.1% of its net income to its stockholders
Use the following information for Shafer Company to compute inventory turnover for year 2.
Year 2 Year 1
Net sales $647,500 $582,000
Cost of goods sold 389,500 360,840
Ending inventory 76,700 79,380
a. 9.98
b. 9.98
c. 5.08
d. 4.99
e. 8.30
f. 8.44
Answer:
Inventory Turnover 2017 = 4.99 times
So option d is the correct answer.
Explanation:
Inventory turnover ratio is an accounting ratio which is used to determine the number of times the average level of inventory is sold off and replaced in a particular period. The formula to calculate the inventory turnover times is,
Inventory Turnover = Cost of Goods Sold / Average Inventory
Where,
Average Inventory = (Opening Inventory + Closing Inventory) / 2
Average Inventory 2017 = (79380 + 76700) / 2
Average Inventory 2017 = $78040
Inventory Turnover 2017 = 389500 / 78040
Inventory Turnover 2017 = 4.99 times
What type of lawsuit occurs if an employee decides to file a lawsuit against a company?
A. Civil case
B. Liability case
C. Criminal case
D. Prosecution case
Answer: A. Civil case
Explanation:
The court cases that associate disputes between persons or businesses over funds or some incident to private rights are known as civil cases. It starts by one party (business or a person) known as "plaintiff" claims to have been harmed by the actions of another party (person or business) known as the "defendant".Hence, the lawsuit occurs if an employee decides to file a lawsuit against a company is "Civil case".
Hence, the correct option is "A".
Answer:
it would be a civil case
Explanation:
I took the test
Kim's brokerage company offers dual agency. Tom and Don are two of her licensed agents. Tom ha been appointed to represent the seller, and Don has been appointed to represent the buyer in an in-house transaction. In this situation, who is a dual agent ? A. Kim only B. Kim, Tom, and Don only C. all licensed agents Kim's broker age D. no one.
Answer:
A. IS THE ANSWER
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A company uses the perpetual inventory system and recorded the following entry: Accounts Payable 2,500 Merchandise Inventory 50 Cash 2,450 This entry reflects a:
Answer:
The entry reflects a debit to the Accounts Payable and a credit to the Merchandise Inventory and Cash, signifying full settlement of debt with merchandise $50 and cash $2,450.
Explanation:
When Accounts Payable is debited, it means that it is being paid. In this case, there are two stated ways for the settlement. The supplier was paid $50 in goods and $2,450 in cash. While, the supplier was being owed the sum of $2,500, he agreed to accept merchandise at cost of $50 and the remainder in cash of $2,450. This entry also satisfies the accounting equation, keeping the two sides in balance, as Liabilities are reduced by $2,500 and Assets are reduced by the same amount.
Computing and Recording Proceeds from the Sale of PPE The following information was provided in the 2018 10-K of Hilton Worldwide Holdings, Inc.
2018 2017
Property and equipment, gross $678 $642
Accumulated depreciation (385) (360)
Property and equipment, net 293 282
Note 7 also revealed that depreciation expense on property and equipment totaled $43 million in 2018. The cash flow statement reported that expenditures for property and equipment totaled $58 million in 2018 and that there was no gain or loss on the sale of property and equipment during the year.
Required:
Using the information provided, prepare a journal entry to record the sale of property and equipment in 2018.
Answer:
Cash $4
Accumulated Depreciation $18
To Property & equipment $22
(Being the sale of the property and equipment is recorded)
Explanation:
The journal entry is shown below:
Cash $4
Accumulated Depreciation $18
To Property & equipment $22
(Being the sale of the property and equipment is recorded)
For recording this we debited the cash and accumulated depreciation as it increased the assets and reduced the accumulated depreciation balance and credited the property & equipment as it decreased the assets
The workings are as follows
For PPE
PPE Beginning Balance Beginning $642
Add: Purchases during the year $58
Less: PPE Ending Balance Ending ($678)
Cost of the sold equipment $22
For Accumulated depreciation
Beginning Accumulated Depreciation $360
Add: Depreciation expense 2018 $43
Less: Ending Accumulated Depreciation ($385)
Accumulated Depreciation left $18
Here, we need to first compute the amount of the Property and equipment and the Accumulated depreciation to allow us prepare the journal entry to record the sale of property and equipment in 2018.
For the Property and equipment computation
Particulars Amount
PPE Beginning Balance Beginning $642
Add: Purchases during the year $58
Less: PPE Ending Balance Ending ($678)
Cost of the sold equipment $22
For the Accumulated depreciation computation
Particulars Amount
Beginning Accumulated Depreciation $360
Add: Depreciation expense 2018 $43
Less: Ending Accumulated Depreciation ($385)
Accumulated Depreciation balance $18
Date Account titles and Explanation Debit Credit
Cash $4
Accumulated Depreciation $18
To Property & equipment $22
(Being the sale of the property and equipment is recorded)
See similar solution here
brainly.com/question/15211241
Mary buys an annuity that promises to pay her $1,500 at the end of each of the next 20 years. The appropriate interest rate is 7.5%. What is the value of this 20-year annuity today?
Answer:
PV= $15,291.74
Explanation:
Giving the following information:
Annual cash flow= $1,5000
Number of years= 20
Interest rate= 7.5%
To calculate the present value, first, we need to determine the future value using the following formula:
FV= {A*[(1+i)^n-1]}/i
A= annual cash flow
FV= {1,500*[(1.075^20) - 1]} / 0.075
FV= $64,957.02
Now, we can calculate the present value:
PV= FV/(1+i)^n
PV= 64,957.02/(1.075^20)
PV= $15,291.74
Presented here are the comparative balance sheets of Hames Inc. at December 31, 2020 and 2019. Sales for the year ended December 31, 2020, totaled $580,000.
HAMES INC.
Balance Sheets
December 31, 2020 and 2019
2020 2019
Assets
Cash $ 24,000 $ 21,000
Accounts receivable 78,000 72,000
Merchandise inventory 103,000 99,000
Total current assets $ 205,000 $ 192,000
Land 50,000 40,000
Plant and equipment 125,000 110,000
Less: Accumulated depreciation (65,000) (60,000)
Total assets $ 315,000 $ 282,000
Liabilities
Short-term debt $ 18,000 $ 17,000
Accounts payable 66,000 76,000
Other accrued liabilities 20,000 18,000
Total current liabilities $ 104,000 $ 111,000
Long-term debt 22,000 30,000
Total liabilities $ 126,000 $ 141,000
Stockholders’ Equity
Common stock, no par, 100,000 shares authorized
40,000 and 25,000 shares issued, respectively $ 74,000 $ 59,000
Retained earnings:
Beginning balance $ 82,000 $ 85,000
Net income for the year 53,000 2,000
Dividends for the year (20,000) (5,000)
Ending balance $ 115,000 $ 82,000
Total stockholders’ equity $ 189,000 $ 141,000
Total liabilities and stockholders’ equity $ 315,000 $ 282,000
Required:
1. Calculate ROI for 2020. (Do not round intermediate calculations. Round your final answer to 2 decimal places.)
2. Calculate ROE for 2020. (Round your answer to 1 decimal place.)
3. Calculate working capital at December 31, 2020.
4. Calculate the current ratio at December 31, 2020. (Round your answer to 2 decimal places.)
5. Calculate the acid-test ratio at December 31, 2020. (Round your answer to 2 decimal places.)
Answer:
1. 16.83%
2. 28.04%
3. $101,000
4. 1.97
5. 0.98
Explanation:
Return On Investment (ROI) = Net Profit After Tax / Total Assets × 100
= $53,000 / $ 315,000 × 100
= 16.825 or 16.83%
Return On Equity (ROE) =Net Profit After Tax / Total Shareholders Funds × 100
= $53,000 / $ 189,000 × 100
= 28.0423 or 28.04 %
Working Capital = Current Assets - Current Liabilities
= $ 205,000 - $ 104,000
= $101,000
Current Ratio = Current Assets / Current Liabilities
= $ 205,000 / $ 104,000
= 1.9712 or 1.97
Acid Test Ratio = (Current Assets - Inventory) / Current Liabilities
= ($ 205,000 - $ 103,000) / $ 104,000
= 0.98077 or 0.98
Analysis reveals that a company had a net increase in cash of $21,430 for the current year. Net cash provided by operating activities was $19,300; net cash used in investing activities was $10,650 and net cash provided by financing activities was $12,780. If the year-end cash balance is $25,950, the beginning cash balance was:
Answer:
i thinktheanswer would be 87 or 98 few dw
Explanation:
1. A small-scale businessman deposits money at the beginning of each year into his savings account, depending on the level of the business’ returns. He deposits $1000 in the first year, $3000 in the second year, $5000 in the third and $7000 in the fourth year and annual interest rate of 7%. What is the value of the investment at the time of his first deposit?
Answer:
The value of the investment at the time of his first deposit is $13,855.
Explanation:
The Value of the Investment at the time of his first deposit is its Net Present Value.
Calculation of the Net Present Value of this Investment is as follows ;
Hint : Find the Present Value of individual deposits and sum them up
PV = FV / (1 + r) ^n
Year 0 = $1000 / (1.07)^0
= $1,000
Year 1 = $3000 / (1.07)^1
= $2,804
Year 2 = $5000 / (1.07)^2
= $4,367
Year 2 = $7000 / (1.07)^3
= $5,714
Net Present Value = $1,000 + $2,804 + $4,367 + $5,714
= $13,855