Answer:
Correct option is (a)
Explanation:
Real income is the income after adjusting for inflation. Inflation is rise in general price of commodities. Here, friend was living in a small town. Cost of living as well as inflation is lower as compared to big city like Washington DC. Even though he is given a raise of $10,000 that is an increase in nominal income, his real income after adjusting inflation and cost of living would not rise by $10,000.
So, friend should not get excited to be moving to the city with higher pay as it will not make much of difference.
One of the themes that came out of the survey responses is that employees take their responsibility of serving fresh, hot food quickly and helping customers find menu items that they will like very seriously. But most of the time, employees do not feel like the work they do is very important. According to the job characteristics theory, which of the following should you do to address this issue?
A. Improve employees' growth need strength.
B. Improve feedback.
C. Improve skill variety.
D. Improve task significance.
C. After carefully considering the most recent employee survey results, you decide that the core issue that you need to address to improve employee motivation is that employees do not seem to know how they are doing relative to what is expected of them. Knowing this, which critical psychological state will you be most targeting in your job redesign initiative?
A. Experienced responsibility for outcomes of the work.
B. Growth need strength.
C. Knowledge of the actual results of work activities.
D. Experienced meaningfulness of the work.
Answer:
D. Improve task significance.
C. Knowledge of the actual results of work activities.
Explanation:
1. In order to address this issue you should focus on improving task significance. Doing so will increase employee motivation as they will begin actually seeing that their work is important. Being able to visualize the consequences that your work has on others or in general is incredibly motivating in a work environment as it provides purpose to the otherwise mundane tasks.
2. In this case, you would need to target a redesign of Knowledge of the actual results of work activities. Employees need to be able to visualize or atleast hear feedback of how they are performing. This feedback will allow them to adjust their actions/performance and improve upon it. Without this feedback there is no way for the employees to improve as they have no baseline of what is exceptional behavior if they do not have data or an example to compare their performance to.
you are a consultant to a firm evaluating an expansion of its current business. The cash flow forecasts (in millions of dollar) for the project as follows: on the basis of the behavior of the firm's stock, you believe that the beta of the firm is 1.30. Assuming that the rate of return available on risk-free investments is 5% and that the expected rate of return on the market portfolio is 15% what is the net present value of the project
Question
you are a consultant to a firm evaluating an expansion of its current business. The cash flow forecasts (in millions of dollar) for the project as follows:
Year cashflow
0 -100
1-10 15
0n the basis of the behavior of the firm's stock, you believe that the beta of the firm is 1.30. Assuming that the rate of return available on risk-free investments is 5% and that the expected rate of return on the market portfolio is 15% what is the net present value of the project
Answer:
NPV= -$32.58
Explanation:
The net present value of the investment is the cash inflow from the investment discounted at required rate of return. The required rate of return can be determined using the the formula below:
Ke= Rf +β(Rm-Rf)
Ke =? , Rf- 5%,, Rm-15%, β- 1.30
Ke=5% + 1.30× (15-5)= 18%
The NPV = Present value of cash inflow - initial cost
= A×(1-(1+r)^(-10)/r - initial cost
A- 15, r-18%
NPV = 15× (1-1.18^(-10)/0.18 - 100= -32.58
NPV = -$32.58
Acquired $34,500 cash from the issue of common stock. Purchased inventory for $27,600 cash. Sold inventory costing $15,400 for $31,000 cash. Required a. Record the events in general journal format. b. Post the entries to T-accounts. c. Determine the amount of gross margin. d. What is the amount of net cash flow from operating activities for Year 1
Answer:
a. General Journal Format:
Accounts Titles Debit Credit
Cash $34,500
Common stock $34,500
To record the issue of common stock for cash.
Inventory $27,600
Cash $27,600
To record the purchase of inventory for cash.
Cash $31,000
Sales revenue $31,000
To record the sale of goods for cash.
Cost of goods sold $15,400
Inventory $15,400
To record the cost of goods sold.
b. T-accounts:
Cash
Accounts Titles Debit Credit
Common stock $34,500
Inventory $27,600
Sales revenue 31,000
Common stock
Accounts Titles Debit Credit
Cash $34,500
Inventory
Accounts Titles Debit Credit
Cash $27,600
Cost of goods sold $15,400
Sales revenue
Accounts Titles Debit Credit
Cash $31,000
Cost of goods sold
Accounts Titles Debit Credit
Inventory $15,400
c. Gross margin:
Sales revenue $31,000
Cost of goods sold 15,400
Gross margin $15,700
d. Net Cash Flow from operating activities for Year 1:
Cash from customers $31,000
Cash paid to suppliers (27,500)
Net cash flow from
operating activities $3,500
Explanation:
a) Data and Analysis of Transactions:
Cash $34,500 Common stock $34,500
Inventory $27,600 Cash $27,600
Cost of goods sold $15,400 Inventory $15,400
Cash $31,000 Sales revenue $31,000
Suppose a firm produces with a technology that exhibits constant returns to scale at all levels of production. The firm's inputs are workers and laptops. The firm sells its output in a perfectly competitive market. It also hires its inputs (hires workers and rents laptops) in perfectly competitive markets. Assume that in the long run the firm produces y units of output using x1 workers and x2 laptops. If the firm doubles the amount of workers and laptops (using 2x1 and 2x2), we would expect the firm's long-run profits to
Answer:
Not change
Explanation:
In the long run we expect firms to earn zero profits. With competitive markets for both inputs and output, and with constant returns to scale, a doubling of all inputs would lead to twice as much output, twice as much revenue, and twice as much cost.
Inside the packaging of a new bread machine she purchases, Ginger finds a paper stating, "All our products will be replaced within the first year if they fail to operate correctly. However, consumer misuse or abuse will effectively end this policy." This is a(n) a. implied warranty. b. express warranty. c. statement of guarantee. d. set of instructions for use. e. labe
Answer:
b. express warranty.
Explanation:
A warranty can be defined as a written promise or guarantee made by a manufacturer, lessor or seller about the identity or quality of goods and services or a property to a purchaser, promising him or her to repair or replace it if necessary within a specified time frame.
An express warranty is typically considered to be an affirmative promise about the quality or characteristics of an item that is being sold to a buyer and as such it is binding and enforceable by law.
Inside the packaging of a new bread machine she purchases, Ginger finds a paper stating, "All our products will be replaced within the first year if they fail to operate correctly. However, consumer misuse or abuse will effectively end this policy." This is an express warranty.
It recognized by the Uniform Commercial Code ("UCC") as explicit, stated promises by a manufacturer.
You are choosing between two goods, X and Y, and your marginal utility from each is as shown in the table above. If your income is $9 and the prices of X and Y are $2/unit and $1/unit, respectively, what quantities of each will you purchase to maximize utility?
The quantities of good X and good Y that would be bought to maximize the utility value would be:
C). X - 2; Y - 5
Marginal Utility"Marginal Utility" is defined as the extra utility or contentment received by a customer on the purchase of an extra unit of a good.
Given that,
Income [tex]=[/tex] $[tex]9[/tex]
Price of good X [tex]=[/tex] $[tex]2 /unit[/tex]
Price of good Y [tex]=[/tex] $[tex]1/unit[/tex]
Units of X [tex]MU_{X}[/tex] Units of Y [tex]MU_{Y}[/tex]
1 10 1 8
2 8 2 7
3 6 3 6
4 4 4 5
5 3 5 4
6 2 6 3
We know that,
For maximum utility
[tex]= MU_{X} /Price of X = MU_{Y} /Price of Y[/tex]
So,
[tex]10/2 = 5/1[/tex]
[tex]2[/tex] × [tex]2 + 5[/tex] × [tex]1 = 9[/tex]
2 units of X and 5 units of Y gives maximum utility at the given income with a total utility of $48.
Thus, option C is the correct answer.
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1. The federal government is considering selling tracts of federally owned land to private developers and using the revenues to provide aid to victims of an earthquake in a foreign country. How would this policy affect the levels of federal revenues, expenditures, and deficits under a cash accounting system
Answer:
The responses to this question can be defined as follows:
Explanation:
In a currency system, its current amount of the debt is influenced by the cash financial statements, and sales will rise by amount and revenue would be compensated by spending increases on foreign aid. The financial accounting system must realize that its government sold a well-established resource and increased the overall scarcity.
Its capital account weakness relates to an undistorted added money from the currency exchange that would offset a decrease throughout the estimate of the benefits of Congress and lead to an increase in the utilization of the shortfall quickly.
The accounting records of Nash Inc. show the following data for 2017 (its first year of operations).
1. Life insurance expense on officers was $13,000.
2. Equipment was acquired in early January for $307,000. Straight-line depreciation over a 5-year life is used, with no salvage value. For tax purposes, Nash used a 30% rate to calculate depreciation.
3. Interest revenue on State of Iowa bonds totaled $4,000.
4. Product warranties were estimated to be $55,000 in 2017. Actual repair and labor costs related to the warranties in 2017 were $10,000. The remainder is estimated to be paid evenly in 2018 and 2019.
5. Pretax financial income was $850,000. The tax rate is 30%.
Prepare a schedule starting with pretax financial income in 2017 and ending with taxable income in 2017 Prepare the journal entry for 2017 to record income taxes payable, income tax expense, and deferred income taxes.
Answer:
Nash Inc.
1. A schedule of taxable income for 2017:
Pretax financial income = $850,000
add:
1. Life Insurance for officers 13,000
2. Interest on Iowa bonds (4,000)
Excess Depreciation (30,700) ($92,100 - $61,405)
Non-tax allowed warranties 45,000 ($55,000 - $10,000)
Adjusted pre-tax income $873,300
Income tax expense (30%) $261,990
2. Journal entry:
Debit Income tax expense $261,990
Credit Income tax payable $261,990
To record income tax payable.
Debit Deferred Tax Asset $13,550
Credit Profit and Loss Account $13,550
To record the deferred tax asset.
Debit Profit and Loss Account $9,210
Credit Deferred Tax Liability $9,210
To record the deferred tax liability.
Explanation:
a) Data and Analysis:
Pretax financial income = $850,000
add:
1. Life Insurance for officers 13,000
2. Interest on Iowa bonds (4,000)
Excess Depreciation (30,700) ($92,100 - $61,405)
Non-tax allowed warranties 45,000 ($55,000 - $10,000)
Adjusted pre-tax income $873,300
Income tax expense (30%) $261,990
Depreciation Excess/Differences:
Equipment cost = $307,000
Depreciation with straight line (5 years)
Annual accounting depreciation expense = $61,400 ($307,000/5)
Annual taxation depreciation expense = $92,100 ($307,000 * 30%)
Deferred tax liability:
Excess Depreciation (30,700) * 30% = $9,210
Deferred tax asset:
Non-tax allowed warranties 45,000 * 30$ = $13,550
Beck Manufacturing reports the following information in T-account form for 2019. Raw Materials Inventory Begin. Inv. 11,600 Purchases 57,000 Avail. for use 68,600 DM used 48,000 End. Inv. 20,600 Work in Process Inventory Begin. Inv. 16,000 DM used 48,000 Direct labor 31,100 Overhead 57,000 Manuf. costs 152,100 Cost of goods manuf. 138,200 End. Inv. 13,900 Finished Goods Inventory Begin. Inv. 17,200 Cost of goods manuf. 138,200 Avail. for sale 155,400 Cost of Goods Sold 136,500 End. Inv. 18,900 Required: 1. Prepare the schedule of cost of goods manufactured for the year. 2. Compute cost of goods sold for the year.
Answer:
Beck Manufacturing
1. Schedule of the Cost of Goods Manufactured for the year:
Beginning WIP Inventory 16,000
Direct Materials used 48,000
Direct labor 31,100
Overhead applied 57,000
Total manufacturing costs 152,100
Less Ending WIP Inventory 13,900
Cost of goods manufactured 138,200
2. Cost of goods sold for the year:
Beginning Finished Goods 17,200
Cost of goods manufactured 138,200
Goods available for sale 155,400
Less Ending Finished Goods 18,900
Cost of Goods Sold 136,500
Explanation:
a) Data and Calculations:
T-account form for 2019.
Raw Materials Inventory
Account Title Debit Credit
Begin. Inv. 11,600
Purchases 57,000
DM used 48,000
End. Inv. 20,600
Avail. for use 68,600 68,600
Work in Process Inventory
Account Title Debit Credit
Begin. Inv. 16,000
DM used 48,000
Direct labor 31,100
Overhead 57,000
Cost of goods manuf. 138,200
End. Inv. 13,900
Manuf. costs 152,100 152,100
Finished Goods Inventory
Account Title Debit Credit
Begin. Inv. 17,200
Cost of goods
manufacture 138,200
Cost of Goods Sold 136,500
End. Inv. 18,900
Avail. for sale 155,400 155,400
Journalize the following sales transactions for Straight Shot Archery using the periodic inventory system. E (Record debits first, then credits. Exclude explanations from journal entries.
Aug. 1 Sold $6,500 of equipment on account, credit terms are 1/10, n/30.
Aug. 8 Straight Shot received payment from the customer on the amount due from August 1, less the discount.
Aug. 15 Sold $3,100 of equipment on account, credit terms are n/45, FOB destination.
Aug. 15 Straight Shot paid $90 on freight out.
Aug. 20 Straight Shot negotiated a $500 allowance on the goods sold on August 15.
Aug. 24 Received payment from the customer on the amount due from August 15, less the allowance.
Answer:
Aug. 1
Debit :
Credit :
Aug. 8
Debit :
Credit :
Aug. 15
Debit :
Credit :
Aug. 15
Debit :
Credit :
Aug. 20
Debit :
Credit :
Aug. 24
Debit :
Credit :
Explanation:
Classify each of the following based on the macroeconomic definitions of saving and investment.
A. Caroline buys new bulldozers for her construction firm.
B. Dmitri purchases a new condominium in Detroit.
C. Frances purchases stock in NanoSpeck, a biotech firm.
D. Antonio purchases a corporate bond issued by a car company.
Answer:
A. Investment
B. Investment
C. Saving
D. Saving
Explanation:
Saving refers to the amount that is set aside that can be used for any future emergencies or purchases.
Investment refers to purchasing assets such as bonds, stocks, mutual funds that help in making money.
A. Caroline buys new bulldozers for her construction firm. - Investment
B. Dmitri purchases a new condominium in Detroit. - Investment
C. Frances purchases stock in Nano Speck, a biotech firm. - Saving
D. Antonio purchases a corporate bond issued by a car company. - Saving
Elbert Company classifies its selling and administrative expense budget into variable and fixed components. Variable expenses are expected to be $26,770 in the first quarter, and $5,240 increments are expected in the remaining quarters of 2020. Fixed expenses are expected to be $41,680 in each quarter. Prepare the selling and administrative expense budget by quarters and in total for 2020.
Answer:
Results are below.
Explanation:
Giving the following information:
Variable expense= $26,770 ($5,240 increase each quarter)
Fixed expense= $41,680
First, we will calculate the total cost per quarter:
Q1= 26,770 + 41,680
Q1= $68,450
Q2= (26,770 + 5,240) + 41,680
Q2= $73,690
Q3= (32,010 + 5,240) + 41,680
Q3= $78,930
Q4= (37,250 + 5,240) + 41,680
Q4= $84,170
Now, the total cost:
Total annual cost= $305,240
Culver Company is involved in four separate industries. The following information is available for each of the four industries. Operating Segment Total Revenue Operating Profit (Loss) Identifiable Assets W $63,278 $14,930 $155,962 X 10,900 2,380 77,981 Y 27,275 (2,980) 18,823 Z 7,647 1,070 16,134 $109,100 $15,400 $268,900 Determine which of the operating segments are reportable based on the: Reportable Segments (a) Revenue test. select an operating segment (b) Operating profit (loss) test. select an operating segment (c) Identifiable assets test. select an operating segment eTextbook and Media
Answer:
Reportable Segments
(a) Revenue test. W and Y
(b) Operating profit (loss) test. W, X and Y
(c) Identifiable assets test. W and X
Explanation:
Note: The data in this question are merged together. They are therefore sorted before answering the question. See the attached pdf file for the complete question with the sorted data.
The explanation of the answers is now given as follows:
Note: See the attached excel file for the determination of the operating segments which are reportable (in bold red color).
Note that the criterion is that a segment is reportable if it contains an amount that is greater than 10% of the total amount. Otherwise, it is nonreportable.
Based on this criterion, we have the following from the attached excel file:
Reportable Segments
(a) Revenue test. W and Y
(b) Operating profit (loss) test. W, X and Y
(c) Identifiable assets test. W and X
NU YU announced today that it will begin paying annual dividends. The first dividend will be paid next year in the amount of $0.37 a share. The following dividends will be $0.42, $0.57, and $0.87 a share annually for the following three years, respectively. After that, dividends are projected to increase by 2.8 percent per year. How much are you willing to pay today to buy one share of this stock if your desired rate of return is 9 percent?
Answer:
P0 = $11.968577 rounded off to $11.97
Explanation:
The dividend discount model (DDM) can be used to calculate the price of the stock today. DDM calculates the price of a stock based on the present value of the expected future dividends from the stock. The formula for price today under DDM is,
P0 = D1 / (1+r) + D2 / (1+r)^2 + ... + Dn / (1+r)^n + [(Dn * (1+g) / (r - g)) / (1+r)^n]
Where,
D1, D2, ... , Dn is the dividend expected in Year 1,2 and so on g is the constant growth rate in dividends r is the discount rate or required rate of return
P0 = 0.37 / (1+0.09) + 0.42 / (1+0.09)^2 + 0.57 / (1+0.09)^3 +
0.87 / (1+0.09)^4 + [(0.87 * (1+0.028) / (0.09 - 0.028)) / (1+0.09)^4]
P0 = $11.968577 rounded off to $11.97
RecRoom Equipment Company received an $12,600, six-month, 5% note to settle an $12,600 unpaid balance owed by a customer.
The note is accepted by RecRoom on November 1, causing the company to increase its Notes Receivable and decrease its Accounts Receivable.
RecRoom adjusts its records for interest earned to its December 31 year-end.
RecRoom receives the interest on the note's maturity date.
RecRoom receives the principal on the note's maturity date.
Make journal entries:
A) Record the receipt of a note on November 1 for $8,000 to settle an outstanding accounts receivable balance of a customer.
B) Record the interest accrued on the note as of December 31.
C) Record the receipt of the interest on the note’s maturity date.
D) Record the receipt of the payment for the full principal.
Answer:
A. Dr Notes Receivable $12,600
Cr Cash $12,600
B. Dr Interest Receivable $105
Cr Interest Revenue $105
C. Dr Cash $315
Cr Interest Receivable $105
Cr Interest Revenue $210
D. Dr Cash $12,600
Cr Notes Receivable $12,600
Explanation:
A. Preparation of the journal entry to Record the receipt of a note on November 1
November 1
Dr Notes Receivable $12,600
Cr Cash $12,600
(Being to record the receipt of a note )
B. Preparation of the journal entry to Record the interest accrued on the note as of December 31.
December 31
Dr Interest Receivable $105
Cr Interest Revenue $105
($12,600 x .05 x 2/12= $105)
(Being to record interest accrued on the note)
C. Preparation of the journal entry to Record the receipt of the interest on the note’s maturity date.
Dr Cash $315
($12,600 x .05 x 6/12= $315)
Cr Interest Receivable $105
($12,600 x .05 x 2/12= $105)
Cr Interest Revenue $210
($12,600 x .05 x 4/12= $210)
(Being to record receipt of the interest on the note’s maturity date)
D. Preparation of the journal entry to Record the receipt of the payment for the full principal.
Dr Cash $12,600
Cr Notes Receivable $12,600
(Being to to Record the receipt of the payment for the full principal)
Why were metal Coins suitable by then
Answer:
The coinage metals comprise, at a minimum, those metallic chemical elements which have historically been used as components in alloys used to mint coins. The term is not perfectly defined, however, since a number of metals have been used to make "demonstration coins" which have never been used to make monetized coins for any nation-state, but could be. Some of these elements would make excellent coins in theory (for example, zirconium), but their status as coin metals is not clear. In general, because of problems caused when coin metals are intrinsically valuable as commodities, there has been a trend in the 21st century toward use of coinage metals of only the least exotic and expensive types.
Explanation:
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Galactic Inc. manufactures flying drone toys. Sales units for January, February, March, April and May were 320, 300, 372, 332, and 400 respectively. Budgeted production in units for January, February, and March were 315, 318, and 362 respectively. Each unit requires 3 direct labor hours and Galactic’s hourly labor rate is $16 per hour. The company’s variable overhead is $5.00 per unit produced and its fixed overhead is $5,600 per month..
Required:
a. Determine Galactic's direct labor budget for the first quarter.
b. Determine Galactic's manufacturing overhead budget for the first quarter
Answer:
Direct labor costs= $47,760
total manufacturing overhead= $10,575
Explanation:
Giving the following information:
Production= 315 + 318 + 362= 995 units
Each unit requires 3 direct labor hours.
Hourly rate= $16
Variable overhead per unit= $5
Fixed overhead= $5,600
First, we need to calculate the direct labor hours:
Direct labor hours= 995*3= 2,985
Now, the direct labor costs:
Direct labor costs= $47,760
Finally, the total manufacturing overhead:
total manufacturing overhead= 5,600 + 5*995
total manufacturing overhead= $10,575
Jim is a lawyer who requires that his clients pay him in advance of legal services rendered. Jim routinely credits Legal Service Revenue when his clients pay him in advance. In June Jim collected $12,000 in advance fees and completed 75% of the work related to these fees. What adjusting entry is required by Jim's firm at the end of June
Answer:
Legal Service Revenue Dr $3000
Unearned Revenue Cr $3000
This is due to the fact that the amount of 25% of the work is undone. Hence, it is recorded as a liability and since it is earned, it is shown as unearned revenue.
The adjusting entry required as a result of Jim collecting money in advance is:
Date Account Title Debit Credit
June XXXX Legal Service Revenue $3,000
Unearned Revenue $3,000
Revenue should only be recognized when the work related to it has been done. Jim only managed to do 75% of the work which means that revenue cannot be recognized on 25%.
This 25% is:
= 25% x 12,000
= $3,000
This amount will be credited to the Unearned Revenue account until Jim completes the work.
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Islander Inc. is a new firm in a rapidly growing industry. The company would be paying $2.50 in dividend next year. After that the company intends to grow the dividend at a 8% rate annually over a long period. You plan to buy the stock now and expect to sell it for $48.23 three years from now. What price must you pay now if your required rate of return is 10%
Answer: $42.93
Explanation:
To solve this question goes thus:
Year 1:
Cash flow = $2.50
PV at 10% = 0.9091
Present value = $2.27
Year 2:
Cash flow = $2.70
PV at 10% = 0.8264
Present value = $2.23
Year 3:
Cash flow = $2.92
PV at 10% = 0.7513
Present value = $2.19
Price at Year 3:
Cash flow = $48.23
PV at 10% = 0.7513
Present value = $36.24
Price to be paid = $2.27 + $2.23 + $2.19 + $36.24 = $42.93
McMurphy Corporation produces a part that is used in the manufacture of one of its products. The costs associated with the production of 12,000 units of this part are as follows: Direct materials $86,000 Direct labor 126,000 Variable factory overhead 58,000 Fixed factory overhead 138,000 Total costs 408,000 Of the fixed factory overhead costs, $55,000 is avoidable. Conners Company has offered to sell 12,000 units of the same part to McMurphy Corporation for $41 per unit. Assuming there is no other use for the facilities, Schmidt should ________. Group of answer choices buy the part, as this would save the company $192,000 buy the part, as this would save $16 per unit make the part, as this would save almost $14 per unit make the part, as this would save $16 per unit
Answer:
make the part, as this would save almost $14 per unit
Explanation:
We have to compare the total cost to make against the total cost to buy 12,000 units.
Total Cost to Make
Direct materials $86,000
Direct labor $126,000
Variable factory overhead $58,000
Fixed factory overhead $55,000
Total Cost $325,000
Total Cost to buy
Purchase Price = $41 x 12,000 units = $492,000
Difference
Financial Advantage = Total Cost to buy - Total Cost to Make
= $492,000 - $325,000
= $167,000
Conclusion :
Schmidt should make the part, as this would save almost $14 per unit
The gaming commission is introducing a new lottery game called Infinite Progresso. The winner of the Infinite Progresso jackpot will receive $1,000 at the end of January, $1,900 at the end of February, $2,800 at the end of March, and so on up to $10,900 at the end of December. At the beginning of the next year, the sequence repeats starting at $1,000 in January and ending at $10,900 in December. This annual sequence of payments repeats indefinitely. If the gaming commission expects to sell a minimum of 800,000 tickets, what is the minimum price they can charge for the tickets to break even, assuming the commission earns 12.00 %/year/month on its investments and there is exactly one winning ticket
Answer:
$0.73
Explanation:
Interest = 12% = 1% per month
The sequence of monthly payment for indefinite years
$1000, $1900, $28000......... $10900
This means that the monthly payment increases by $900
The equivalent monthly payment can be calculated as
= 1000 + 900 ( A/G , 1% , 12 )
= 1000 + 900 * 5.3814
= 1000 + 4843.26
= $5843.26
present worth of withdrawal = 5843.26 / 1% = $584326
The minimum price that the company will have to sell its ticket to breakeven
= 584326 / 800000
= $0.73
Match each of the principles and phases in the development of an accounting system with the statement that best describes them.
1. Information must be understandable, relevant, reliable, timely, and accurate.
2. Benefits of information must outweigh the cost of providing it.
3. The system should accommodate a variety of users and changing information needs.
4. The accounting system must consider the needs and knowledge of various users.
5. The system should be capable of meeting the changes in the demands made upon it.
a. Useful output
b. Cost effectiveness
c. Flexibility
Answer:
. Useful output
Cost effectiveness
Flexibility
Useful output
Flexibility
Explanation:
Accounting principles are guidelines that should guide companies when reporting financial data.
If the output is useful, it would contain the information needed by users of accounting information in terms they understand, on time and it should not be misleading
The accounting information should be cost effective. It should be profitable to the company to provide the information. The cost of providing the information should be less than the cost
The information should be flexible. It should not only be suitable for only some particular users of accounting information but to all users of accounting information
Rainey Company's true cash balance at October 31 is $4,700. The following information is available for the bank reconciliation: Outstanding checks, $740 Deposits in transit, $540 Bank service charges, $110 The bank had collected an account receivable for Rainey Company, $1,200 The bank statement included an NSF check written by one of Ramsey's customers for $720. What was the unadjusted book balance at October 31
Answer: $4330
Explanation:
The unadjusted book balance at October 31 is calculated below:
True cash balance = $4700
Add: Bank service charge = $110
Add: NSF Check = $720
Less: Account receivable = $1200
Unadjusted book balance = $4330
A new investment project currently under consideration has a negative net present value of $85,000. The project has a life of 10 years and the minimum required rate of return is 8%. The present value factor for an annuity at 8% for 10 periods is 6.71. What is the amount of annual additional cash flow that is required to make this investment attractive
Answer:
$12,668
Explanation:
Calculation to determine the amount of annual additional cash flow that is required to make this investment attractive
Using this formula
Annual additional cash flow required=Negative net present value /Present value factor for an annuity at 8% for 10 periods
Let plug in the formula
Annual additional cash flow required= $85,000/6.71
Annual additional cash flow required= $12,668
Therefore the amount of annual additional cash flow that is required to make this investment attractive is $12,668
Several financial or economic factors are relevant to the rent-or-buy decision. From the following list, identify the financial or economic factors that should be considered when performing this analysis. Check all that apply.
a. The pride that comes from owning your own home
b. Current and expected future housing prices
c. Current and expected future housing-related tax deductions
Answer:
The financial and economic factors that should be considered when performing this analysis are:
b. Current and expected future housing prices
c. Current and expected future housing-related tax deductions
Explanation:
a) A rent-or-buy decision should be based on financial and economic factors. There is the financial implication of making a down payment, closing costs, and maintenance expenses when one decides to own a home instead of renting an apartment. However, for the occupant, renting provides the advantage of known monthly costs. Some advantages of owning a house are building equity and tax benefits. The pride that comes that comes from owning a home is not a financial and economic benefit.
A firm' s sales procedure involves preparing sales invoices based on shipping documents; posting the sales amounts to accounts receivable records; and posting quantities billed to the inventory records. Due to control weaknesses in the procedure, certain goods that are shipped may not be reflected in the sales invoices. The exposure from this risk can result in:
Answer: understatement of revenues and receivables and over statement of inventory
Explanation:
Control weakness simply refers to the failure by a company to implement the internal controls. Based on the information given, the exposure from this risk can result in understatement of revenues and receivables and over statement of inventory.
There'll be understatement of revenue and receivables since sales is not recorded while the inventory will be overstated.
define investment bank.
Answer:
a bank that purchases large holdings of newly issued shares and resells them to investors.
AAA Advertising hires Christopher as a photographer to take photographs of products for AAA’s use in its advertising campaigns. Christopher is to use his own DSLR camera. Christopher will have an office at AAA but only needs to come in 10 hours a week, of his own choosing. Christopher will work under a supervisor who will tell him exactly what photos to take and how many of each product. He will be paid a flat $2,000 salary every other week, regardless of how much work he does. 1) What is Christopher’s employment status with AAA, is he an employee or independent contractor? 2) Discuss each of the applicable factors used to determine whether a worker is an independent contractor or employee.
Answer:
Christopher is an Employee
Explanation:
1) Christopher is an Employee because he is been paid a flat rate regardless of the amount of work he puts in, also he is directly supervised, has an office in AAA and also he must put in 10 hours of work per week
2) Factors that makes a worker an independent contractor or an Employee includes
level of instruction; If the company or its representative directs the worker on how, when and where a job can be done this indicates that the worker is an employee work schedule: An independent contractor is totally in control of his time and determines the amount of hours to put in but if the work schedule is determined by the company then it will be an employee arrangement form of payment ; Hourly, weekly and monthly payments are mostly used for employees ,most independent contractors collect their pay once a task is completed by themprofit or loss : Employees do not share in the profit or loss of the organization since they are paid a flat rate.Michelle is an active participant in the rental condominium property she owns. During the year, the property generates a ($15,000) loss; however, Michelle has sufficient tax basis and at-risk amounts to absorb the loss. If Michelle has $115,000 of salary, $10,000 of long-term capital gains, $3,000 of dividends, and no additional sources of income or deductions, how much loss can Michelle deduct
Answer: $11000
Explanation:
The total income earned by Mitchell will be the addition of the salary, long term capital gain and dividend. This will be:
= $115,000 + $10,000 + $3,000
= $128,000
The exception amount of $25000 can be gotten.
Modified adjusted gross income = $100,000
Phased out amount = ($128000 - $100000) × 50%
= $28000 × 0.5
= $14000
Mitchell's loss = $25000 - $14000 = $11000
Permabilt Corp. was incorporated on January 1, 2019, and issued the following stock for cash: 2,000,000 shares of no-par common stock were authorized; 750,000 shares were issued on January 1, 2019, at $35 per share. 800,000 shares of $100 par value, 7.5% cumulative, preferred stock were authorized; 540,000 shares were issued on January 1, 2019, at $105 per share. No dividends were declared or paid during 2019 or 2020. However, on December 22, 2021, the board of directors of Permabilt Corp. declared dividends of $15,000,000, payable on February 12, 2022, to holders of record as of January 8, 2022.
Prepare the journal entries to record each of the below transactions. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)
The issuance of common stock and preferred stock on January 1, 2019.
The declaration of dividends on December 22, 2021.
The payment of dividends on February 12, 2022.
b. Of the total amount of dividends declared during 2021, how much will be received by preferred shareholders?
c. Calculate the common stock dividends per share declared during 2021. (Round your answer to 2 decimal places.)
Answer:
Permabilt Corp.
a. Journal Entries:
Debit Cash $26,250,000
Credit Common stock $26,250,000
To record the issuance of 750,000 shares at $35 per share.
2. Debit Cash $56,700,000
Credit Preferred stock $54,000,000
Credit Additional paid-in capital- preferred stock $2,700,000
To record the issuance of 540,000 shares at $105 per share.
3. Debit Cumulative preferred stock dividends $12,150,000
Debit Common stock $2,850,000
Dividends Payable $15,000,000
To record the declaration of dividends.
b. Preferred shareholders will receive $12,150,000 out of the $15 million declared dividends during 2021 ($4,050,000 for each year)
c. Common stock dividends per share = $3.80 ($2,850,000/750,000)
Explanation:
a) Data and Calculations:
Authorized share capital:
Common stock = 2,000,000 shares of no-par value
7.5% cumulative, preferred stock = 800,000 shares at $100 par value
Issued share capital:
Common stock, 750,000 at $35 = $26,250,000
Cash $26,250,000 Common stock $26,250,000
Preferred stock, 540,000 at $105 = $56,700,000
Cash $56,700,000 Preferred stock $54,000,000 Additional paid-in capital $2,700,000
Declared Dividends = $15,000,000
Cumulative preferred stock dividends for 3 years
= $12,150,000($4,050,000 * 3)
Common stock = $2,850,000 ($15,000,000 - $12,150,000)