Answer:
6.88%
Explanation:
cost of equity = (next period dividend / by price) + growth rate in dividends.
cost of debt = yield to maturity x (1 - tax rate)
WACC = weight of debt x cost of debt + weight of equity x cost of equity.
cost of equity = ($0.25 / $40) + 0.07
= 0.07625
cost of debt = 0.09 x (1 - 0.4)
=0.054
WACC = ($40Billion x 0.07625) / 60billion + ($20 billion x 0.054) / $60billion
= 0.05083 + 0.018
= 0.0688 or 6.88%
If an advertiser bids $4.75 CPM and another advertiser bids $0.50 per CPC with a click rate of 1%, the display network would award the ad space to A. the CPM bidder because the network would earn $4.75 versus only 50 cents with the CPC bidder BY. the CPM bidder since the network has no idea how many click throughs the CPM bidder will get C. the CPC bidder because the 1% click through rate would produce $5.00 over 1,000 impressions D. the CPC bidder because the $0.50 per click rate would produce an income of $50.00 versus only $4.75 for the CPM bidder
Answer: C. the CPC bidder because the 1% click through rate would produce $5.00 over 1,000 impressions
Explanation:
From the question, an advertiser bids $4.75 cost per thousand impressions (CPM) while another advertiser bids $0.50 per CPC with a click rate of 1%. Over 1000 impressions, the second advertiser bids will produce:
= $0.50 × 1% × 1000
= $0.50 × 0.01 × 1000
= $5
Based on the analysis above, the CPC bidder will be awarded the advertisement space because the 1% click through rate would give $5.00 over 1,000 impressions.
The expense recognition principle indicates: Multiple Choice the ordering of current assets and current liabilities on the balance sheet. where expenses should be presented on the income statement. how expenses should be split between the income statement and the balance sheet. when costs are recognized as expenses on the income statement.
Answer:
when costs are recognized as expenses on the income statement.
Explanation:
The expense recognition principle is an accounting principle which is typically used on accrual basis accounts and it states that expenses incurred by an individual or business entity should be recognized and matched in the same period with respect to the revenues they are related to.
The expense recognition principle indicates when costs are recognized as expenses on the income statement.
For instance, company XYZ purchases a property worth $90,000 in June, it was then sold in July for $250,000. Based on the expense recognition principle, the $90,000 cost shouldn't be recognized by company XYZ as an expense until July, when the related revenue would be recognized also. Else, if recognized, its expenses would be overstated by $90,000 in June, and consequently understated to the tune of $250,000 in July.
Additionally, the expense recognition principle helps business owners to calculate their taxes and profits or losses properly.
Cullumber Company issues $3.40 million, 20-year, 9% bonds at 98, with interest payable on December 31. The straight-line method is used to amortize bond discount. Collapse question part (a) Partially correct answer.
Prepare the journal entry to record the sale of these bonds on January 1, 2017. (Credit account titles are automatically indented when amount is entered. Do not indent manually.) Date Account Titles and Explanation Debit Credit Jan. 1 Entry field with correct answer
Answer:
Dr cash $3,332,000
Dr discount on bonds payable $68,000
Cr bonds payable $3,400,000
Explanation:
The cash proceeds from the bond issuance is 98% of the face value.
Cash proceeds=$3,400,000*98%=$3,332,000.00
This meant that the bond was issued at a discount of $ 68,000.00 ($3,400,000-$3,332,000).
In recording the bond issuance, the cash account is debited with the cash proceeds of $3,332,000 with the discount on bonds payable debited with $68,000 while bonds payable is credited with the face value of $3,400,000
Find online the annual 10-K report for Costco Wholesale Corporation (COST) for fiscal year 2015 (filed in October 2015). Answer the following questions from the income statement:
1. What were Costco's revenues for fiscal year 2015?
2. By what percentage did revenues grow from the prior year?
3. What was Costco's operating income for the fiscal year?
4. What was Costco's average tax rate for the year?
5. What were Costco's diluted earnings per share in fiscal year 2015?
6. What number of shares is this EPS based on?
7. What were Costco's revenues for fiscal year 2015?
Costco's revenues for fiscal year 2015 was_______ million. (Round to the nearest million.)
8. By what percentage did revenues grow from the prior year?
The percentage the revenues grew from the prior year is______ %. (Round to two decimal places.)
9. What was Costco's operating income for the fiscal year?
Costco's operating income for 2015 was________ million. (Round to the nearest million.)
10. What was Costco's average tax rate for the year?
Answer:
Costco's fiscal year ends in August, not October.
1. What were Costco's revenues for fiscal year 2015?
$113,666 million2. By what percentage did revenues grow from the prior year?
(2015 revenue - 2014 revenue) / 2014 revenue = ($133,666 - $110,212) / $110,212 = 21.28%3. What was Costco's operating income for the fiscal year?
$3,624 million4. What was Costco's average tax rate for the year?
total income taxes / income before income taxes = $1,195 / $3,604 = 33.16%5. What were Costco's diluted earnings per share in fiscal year 2015?
$5.376. What number of shares is this EPS based on?
442,716 shares7. What were Costco's revenues for fiscal year 2015?
Costco's revenues for fiscal year 2015 was $113,666 million. (Round to the nearest million.)8. By what percentage did revenues grow from the prior year?
The percentage the revenues grew from the prior year is 21.28%. (Round to two decimal places.)
9. What was Costco's operating income for the fiscal year?
Costco's operating income for 2015 was $3,624 million. (Round to the nearest million.)
10. What was Costco's average tax rate for the year? 33.16%
Explanation:
On the SEC's website you can find information about all publicly traded corporations, including financial statements and other relevant information.
Answer:
I need 1 Brainliest before I can become expert
Explanation:
Find the nominal annual rate of interest compounded monthly if $1200 accumulates to $1618.62 in five years.
Answer:
Nominal annual rate of interest(r) = 2.5% (Approx)
Explanation:
Given:
Present value (P) = $1,200
Future value (F) = $1,618.62
Number of year = 5 year = 5(12) months = 60 months
Find:
The nominal annual rate of interest(r)
Computation:
[tex]Nominal\ annual\ rate\ of\ interest(r) = \sqrt[n]{\frac{F}{P} }-1 \\\\Nominal\ annual\ rate\ of\ interest(r) = \sqrt[60]{\frac{1,618.62}{1,200} }-1 \\\\Nominal\ annual\ rate\ of\ interest(r) = 0.004949\\\\Nominal\ annual\ rate\ of\ interest(r) = 0.5 %[/tex]
Actual periodic Nominal annual rate of interest(r) = 0.5 (5year)
Nominal annual rate of interest(r) = 2.5% (Approx)
A young couple is planning for the education of their two children. They plan to invest the same amount of money at the end of each of the next 16 years. The first contribution will be made at the end of the year and the final contribution will be made at the end of the year the older child enters college. The money will be invested in securities that are certain to earn a return of 8% each year. The older child will begin college in 16 years and the second child will begin college in 18 years. The parents anticipate college costs of $25,000 a year (per child). These costs must be paid at the end of each year. If each child takes four years to complete their college degrees, then how much money must the couple save each year
Answer:
The couple must save $ 6,598 each year
Explanation:
Calculating the payment amount:
Cost per year = $25,000 per each child
Cost for 4 years = $25,000 × 4 = $100,000
For the oldest child, the college will begin in 16 years and the second child the college will begin in 18 years.
Calculating the amount to be deposited each year for the oldest child.
Using Microsoft Excel PMT function
Rate = 8%
N = 16
PV = 0
FV = -100000
= $3,298
Therefore, they must deposit $3,298 each year for their oldest child.
Calculating the amount to be deposited each year for the second child:
Using Microsoft Excel PMT function
Rate = 8%
N = 18
PV = 0
FV = -100000
= $2,670
Therefore, they must deposit $2,670 each year for their second child.
Total sum to be saved per year = $3,298 + $2,670 = $6,598
Concord Corporation had a 1/1/20 balance in the Allowance for Doubtful Accounts of $36500. During 2020, it wrote off $30500 of accounts and collected $8600 on accounts previously written off. The balance in Accounts Receivable was $780000 at 1/1 and $940000 at 12/31. At 12/31/20, Concord estimates that 5% of accounts receivable will prove to be uncollectible. What should Concord report as its Allowance for Doubtful Accounts at 12/31/20
Answer:
$32,400
Explanation:
According to the situation for computation of Allowance for Doubtful Accounts at 12/31/20 first we need to find out the actual balance which is shown below:-
Actual balance = Beginning Balance of Allowance + Amount reinstated - Amount written off + Uncollectible account expenses
= $36,500 + $8,600 - $30,500
= $14,600
Ending balance of Allowance = Balance of accounts receivables × Accounts receivable percentage at 12/31 - Actual balance
= $940,000 × 5% - $14,600
= $47,000 - $14,600
= $32,400
Therefore for reaching the ending balance of allowance we simply applied the above formula.
Global Commerce Corporation purchased trading debt investments for $114,000 on December 31, 2018. There is a decrease of $5,800 in the fair value of the trading debt investments by the end of the year 2019. Which of the following is the correct journal entry?
A. Trading Debt Investments 5,800
Unrealized Holding
Loss-Trading 5,800
B. Fair Value
Adjustment–Trading 5,800
Unrealized Holding
Loss-Trading 5,800
C. Unrealized Holding
Loss-Trading 5.800
Retained Earnings 5,800
D. Unrealized Holding
Loss-Trading 5,800
Fair Value
Adjustment–Trading 5,800
Answer:
The correct option is D,
Unrealized Holding Loss-Trading $5,800
Fair Value Adjustment–Trading $5,800
Explanation:
The decrease in fair value by $5,800 means that the investment has potentially lost $5,800 in value which is credited to fair value adjustment while the debit is posted to unrealized holding loss-trading account.
The loss cannot be realized in retained earnings since the loss is yet to be realized as the investment has not been sold for cash.
The realized loss or gain would be determined when investment is sold for cash.
The City Transit Authority (CTA) is trying to decide between railcars manufactured by French Corp and Japan Rail Car. The French Corp cars cost more to buy initially, but they are expected to last for 10 years. The Japan Rail Car cars are cheaper initially, but they will wear out in 6 years. The cash flows related to each of the choices are presented below. If the CTA’s cost of capital is 8 percent, which type of car should the CTA buy? Support your answer.
Answer: The Japan Rail Car should be purchased
Explanation:
To find the answer we can use the Net Present Cost. By calculating the total net present value of the total costs involved in both projects, the cheaper alternative can then be chosen.
The cash-flows for both projects are constant so an annuity can be used to calculate them.
Please refer to the annuity table attached.
The French Corp Car
It will cost $275,000 originally and then $10,000 every year after that. The cost of capital is 8%. The goal is to find the present value of all the cost. That can be done by,
= (275,000) + PV of Annuity of $10,000 for 10 year and cost of capital 8% p.a. (look at the table for the intersection of 10 years and 8%)
= 275,000 + 10,000 (6.710)
= 275,000 + 67,100
= $342,100
The Japan Rail Car
It will cost $195,000 originally and then $15,000 every year after that. The cost of capital is 8%. Using the same method,
= (195,000) + PV of Annuity of $15,000 for 6 year and cost of capital 8% p.a. (look at the table for the intersection of 6 years and 8%)
= 195,000 + 15,000(4.623)
=195,000 + 69,345
= $264,345
The Japan Rail Car costs less in terms of total cost over its period of operation and so should be the one purchased by the CTA.
According to Keynesian business cycle theory, A. inflation is procyclical and leading. B. the procyclical movement of investment is well explained when shocks to durable goods are themselves a main source of the cycle (so-called "animal spirits"), but not when cycles are caused by fluctuations in the LM curve. C. beneficial aggregate demand shocks, regardless of whether they shift the IS curve or the LM curve, will increase both output and the real interest rate. D. the procyclical behavior of labor productivity occurs due to firms' labor hoarding practices.
Answer: D. the procyclical behavior of labor productivity occurs due to firms' labor hoarding practices.
Explanation:
Keynesian Economists argue that firms practice labor hoarding which is the practice of keeping workers when they should not such as when there is a Recession. They should not keep these workers because demand has slowed so keeping them means that they will not be producing to meet the demand.
The procyclical behavior of labor productivity means that labor productivity goes by the Business Cycle in that it is high when the Economy is booming and low when it is in a Recession.
Productivity is calculated by dividing goods produced by the number of labor producing them.
By refusing to fire workers during a Recession, there will be too many workers producing too few goods which will decrease labor productivity which is why according to Keynesian Economists, the productivity is low in Recessions.
Suppose that a small company that makes a standardized product is experiencing an increase in sales even though it has a small geographic footprint. Currently, the founder makes all of the strategic decisions but is beginning to feel overwhelmed. She has decided to pursue a cost-leadership strategy going forward. In order for the firm to achieve its goals, which of the following business-level structures should the firm adopt?
a. an ambidextrous functional structure
b. a centralized functional structurea flexible organic structure
c. a centralized multidivisional structure
d. a simple structure with the founder's imprint
Answer: b. a centralized functional structure
Explanation:
Cost Leadership refers to a situation where a company is better at cost management that other companies in the industry. If a company can produce at a lower cost, they can capture more market share and be more profitable.
When a company wants to engage in cost Leadership one of the best structures to adopt is the Centralised functional structure. This is when decisions are usually made at a top management level in a company that is divided by functions such as Information Technology, Sales, Marketing etc.
By making the structure centralised, the company can make Standardised products on a company wide basis which is very effective in cost saving as the company is able to plan better and spend less because they will be buying resources and producing in bulk. That advantage from Economies of Scale will keep their costs low.
Samantha, who is single and has MAGI of $28,000, was recently employed by an accounting firm. During the year, she spends $2,500 for a CPA exam review course and begins working on a law degree in night school. Her law school expenses were $4,200 for tuition and $450 for books (which are not a requirement for enrollment in the course).
Assuming no reimbursement, how much can Samantha deduct for the:
a. CPA exam review course? $X
b. Law school expenses? $X
Answer:
a. CPA exam review course $0
b. Law school expenses $4,000
Explanation:
1a. CPA exam review course will be $0 because the IRS has disallowed any costs that will lead to qualifying for a different trade .
1b. The Law School expenses will be $4,000 . Based on section 222, Samantha is been limited to $4,000 of the tuition paid.
Therefore the balance of $650 is excess tuition $200 + $450 books which will not qualify under the regular education expense deduction due to the negative position of the IRS on law school costs.
Suppose a relative has promised to give you $1,000 as a wedding gift the day you get engaged. Assuming a constant interest rate of 7%, consider the present and future values of this gift, depending on when you become engaged.
Complete the first row of the table by determining the value of the gift in one and two years if you become engaged today.
Present Value Value in One Year Value in Two Years
Date Received (Dollars) (Dollars) (Dollars)
Today 1,000.00 ? ?
In 1 year ? 1,000.00
In 2 years ? 1,000.00
Complete the first column of the table by computing the present value of the gift if you get engaged in one year or two years.
The present value of the gift is __________ if you get engaged in two years than it is if you get engaged in one year.
Answer:
a.
Future Value in One Year = $1,070.00
Future Value in Two Years = $1,144.90
b.
Present Value of amount received in 1 year = $934.58
Present Value of amount received in 2 years = $873.44
The present value of the gift is less/lower if you get engaged in two years than it is if you get engaged in one year.
Explanation:
These can be done as follows:
Present Value Value in One Year Value in Two Years
Date Received (Dollars) (Dollars) (Dollars)
Today 1,000.00 1,070.00 1,144.90
In 1 year 934.58 1,000.00
In 2 years 873.44 1,000.00
a. Complete the first row of the table by determining the value of the gift in one and two years if you become engaged today.
To do this, we use future value (FV) formula as follows:
Future Value = A * (1 + r)^n ........................................ (1)
Where;
A = Amount received to day = $1,000.00
r = interest rate = 7%, or 0.07
n = number of years
Using equation (1), we therefore have:
Future Value in One Year = 1,000.00 * (1 + 0.07)^1 = $1,070.00
Future Value in Two Years = 1,000.00 * (1 + 0.07)^2 = $1,144.90
b. Complete the first column of the table by computing the present value of the gift if you get engaged in one year or two years.
To do this, we use present value (PV) formula as follows:
Present Value = A / (1 + r)^n ........................................ (2)
Where;
A = Amount received in specified year = $1,000.00
r = interest rate = 7%, or 0.07
n = number of years
Using equation (2), we therefore have:
Present Value of amount received in 1 year = 1,000.00 / (1 + 0.07)^1 = $934.58
Present Value of amount received in 2 years = 1,000.00 / (1 + 0.07)^2 = $873.44
Since $873.44 is less/lower than $934.58, we therefore have:
The present value of the gift is less/lower if you get engaged in two years than it is if you get engaged in one year.
The correct statement will be that the present value of the wedding gift is $873.43 if you get engaged in two years, then it is $934.57 if you get engaged in one year when the future value is $1000.
The future value of wedding gifts will be $1070.00 and $1144.9 at the end of first and second year respectively. The computation for the values can be done by applying values to the formula.
Calculation of future value and present valueThe present value of the gift can be calculated as using the formula below, [tex]\rm Present\ Value= \dfrac{Future\ Value}{1+ Fixed\ Interest\ Rate}\\\\\\\\\rm Present\ Value= \dfrac{\$1000}{1.07}\\\\\\\rm Present\ Value= \$ 934.57[/tex]The present value for one year is 934.57 USD. Now for two years, [tex]\rm Present\ Value= \dfrac{\$934.57}{1.07}\\\\\rm Present\ Value= \$873.43[/tex]Now to calculate the future value when the present value is considered to be as $1000. We will use the formula below, [tex]\rm Future\ Value\ for\ One\ Year=Present\ Value\ +\ \dfrac{Present\ Value\ x\ Time\ x\ Interest\ Rate}{100}\\\\\\\rm Future\ Value\ for\ One\ Year= 1000\ +\ \dfrac{1000\ \rm x\ 1\ \rm x\ 7}{100}\\\\\\\rm Future\ Value= \$1070[/tex]For the end of two years, the future value will be, [tex]\rm Future\ Value= Present\ Value\ (1+\dfrac{Interest}{no.\ of\ Compoundings})^n^t\\\\\\\rm Future\ Value= 1000\ (1+\dfrac{0.07}{1})^1^ x\ ^2\\\\\rm Future\ Value= \$1144.9[/tex]Hence, the value of the gifts can be ascertained as per the calculations above.
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Prepare journal entries to record the December transactions in the General. Use the following accounts as appropriate: Cash, Accounts Receivable, Supplies, Prepaid Insurance, Equipment, Accumulated Depreciation, Accounts Payable, Wages Payable, Common Stock, Retained Earnings, Dividends, Service Revenue, Depreciation Expense, Wages Expense, Supplies Expense, Rent Expense, and Insurance Expense.
1-Dec Began business by depositing $10500 in a bank account in the name of the company in exchange for 1050 shares of $10 per share common stock.
1-Dec Paid the rent for the current month, $950 .
1-Dec Paid the premium on a one-year insurance policy, $600 .
1-Dec Purchased Equipment for $3600 cash.
5-Dec Purchased office supplies from XYZ Company on account, $300 .
15-Dec Provided services to customers for $7200 cash.
16-Dec Provided service to customers ABC Inc. on account, $5200 .
21-Dec Received $2400 cash from ABC Inc., customer on account.
23-Dec Paid $170 to XYZ company for supplies purchased on account on December 5 .
28-Dec Paid wages for the period December 1 through December 28, $4480 .
30-Dec Declared and paid dividend to stockholders $200 .
Answer:
1-Dec
Cash $10500 (debit)
Common Stock $10500 (credit)
1-Dec
Rent Expense $950 (debit)
Cash $950 (credit)
1-Dec
Prepaid Insurance $600 (debit)
Cash $600 (credit)
1-Dec
Equipment $3600 (debit)
Cash $3600 (credit)
5-Dec
Supplies Expense $300 (debit)
Accounts Payable $300 (credit)
15-Dec
Cash $7200 (debit)
Service Revenue $7200 (credit)
16-Dec
Accounts Receivable $5200 (debit)
Service Revenue $5200 (credit)
21-Dec
Cash $2400 (debit)
Accounts Receivable $2400 (credit)
23-Dec
Accounts Payable $170 (debit)
Cash $170 (credit)
28-Dec
Wages Expense $4480 (debit)
Cash $4480 (credit)
30-Dec
Dividends $200 (debit)
Cash $200 (credit)
Explanation:
It is important to remember that Insurance paid in advance is an Asset hence, premium on a one-year insurance policy was recorded in Prepaid Insurance.
What is new and innovating about this design/chopping board?
A cost center
A) only incurs costs and does not directly generate revenues.
B) incurs costs and generates revenues.
C) is a responsibility center of a company which incurs losses.
D) is a responsibility center which generates profits and evaluates the investment cost of earning the profit.
Answer: A---incurs costs and does not directly generate revenue.
Explanation:
A cost center is a department or unit in an organization which incurs cost on the organisation for its operation but does not directly add profit or directly generate revenue to the company.
Examples of a cost centre in a company include, The IT department., Research and Development Department.
For example the way in which an IT department, a cost centre in a company can indirectly generate revenue by operating efficiently and for the Research and Development Department is to develop a new promising product.
You are upgrading to better production equipment for your firm's only product. The new equipment will allow you to make more of your product in the same amount of time. Thus, you forecast that total sales will increase next year by 16 % over the current amount of 102 comma 000 units. If your sales price is $ 19 per unit, what are the incremental revenues next year from the upgrade?
Answer:
$310,080
Explanation:
Incremental revenue refers to the additional revenue generated by a certain project or activity. In this case, your sales should increase by 16% from 102,000 units to 118,320 units. Total revenue will increase from $1,938,000 (= 102,000 x $19) to $2,248,080 (= 118,320 x $19).
The incremental revenue = $2,248,080 - $1,938,000 = $310,080
An ad for Kool Kids, a kidswear company, is featured in the August issue of a teen magazine, Teen 360. The ad shows children between the ages of 3 and 12 on a ramp. In terms of the response stages of the persuasion matrix, the ad is ineffective in reaching the intended target audience, the parents, because:_________.
a. its portrayal is offensive.
b. it contains jargons that is incomprehensible to the target audience.
c. the media channel used is inappropriate.
d. of the extensive clutter.
e. it is not endorsed by a celebrity parent.
Answer:
c. the media channel used is inappropriate.
Explanation:
In the advert been shown, naturally as it is been stated to be that which has to portray or exhibit the qualities of a cool kid. And as a cool kid, as the words align, their could be other forms of play or kid plays to be done to qualify a child within the range of 3 to 13 as a cool kid. Therefore at the end of the day and session, it could easily be concluded that the media channel obviously inappropriate approach to their in their advertisement. It is looks a little weird because a ramp usage can be seen in scenarios where maybe stubborn or rough children are been gathered or play together at.
Management is considering using a new component that would increase the unit variable cost by $50. Since the new component would improve the company's product, the marketing manager predicts that monthly sales would increase by 500 units. What should be the overall effect on the company's monthly net operating income of this change if fixed expenses are unaffected
Answer:
Because fixed costs will not change, the overall effect on the company's monthly net operating income will be equal to the contribution margin of the product once the new component is added.
Explanation:
The contribution margin is equal to: Revenue - Variable Costs.
We already know that the variable cost will be increased by $50 once new component is added, and that monthly sales are expected to increase by 500 units after that.
Depending on the price of the product, the amount sold, and the variable costs, we get the contribution margin, and this contribution margin will be exactly the same as the overall effect on the net operating income.
(c)
Your answer is partially correct. Try again.
Prepare a CVP income statement for current operations and after Mary's changes are introduced.
v
MARIGOLD SHOE STORE
CVP Income Statement
Current
New
Sales
$800,000
$912,000
जी
Variable Expenses
$480,000
$576,00
Contribution Margin
$320,000
$336,000
Fixed Expenses
$270,000
$294,000
Net Income/(Loss)
$50,000
$42,000
$
Would you make the changes suggested?
No
Answer:
The changes suggested increase income by 16,000 therefore is a good idea to made the changes
Explanation:
Your Mistake is that fixed expenses should remain constant with a sales increase
Current New
Sales $800,000 $ 912,000
Variable $ 480,000 $ 576,000
Contribution $ 320,000 $ 336,000
Fixed $ 270,000 $ 270,000
Net Income $ 50,000 $ 66,000
The income statement and selected balance sheet information for Direct Products Company for the year ended December 31 are presented below. Income Statement Sales Revenue $ 48,600 Expenses: Cost of Goods Sold 21,000 Depreciation Expense 2,000 Salaries and Wages Expense 9,000 Rent Expense 4,500 Insurance Expense 1,900 Interest Expense 1,800 Utilities Expense 1,400 Net Income $ 7,000 Selected Balance Sheet Accounts Ending Balances Beginning Balances Accounts Receivable $ 560 $ 580 Inventory 990 770 Accounts Payable 420 460 Prepaid Rent 25 20 Prepaid Insurance 25 28 Salaries and Wages Payable 100 60 Utilities Payable 20 15 Required: Prepare the cash flows from operating activities section of the statement of cash flows using the direct method. (Amounts to be deducted should be indicated with a minus sign.)
Answer:
Cash flow from Operating Activities
Cash Receipts from Customers $48,620
Cash Paid to Suppliers and Employees ($17,017)
Cash Generated from Operations $31,603
Interest Paid ($1,800)
Cash flow from Operating Activities $29,803
Explanation:
Cash flow from Operating Activities relate to cash movement as a result of trading in the course of business.
Cash Receipts from Customers Calculation :
Prepare a Total Trade Receivables T - Account as follows :
Debit :
Beginning Balance $ 580
Sales Revenue $ 48,600
Totals $49,180
Credit :
Ending Balance $ 560
Cash Receipt (Balancing Figure) $48,620
Totals $49,180
Cash Paid to Suppliers and Employees Calculation :
Cost of Goods Sold 21,000
Add Other Expenses
(Excluding Depreciation and Interest Expense)
Salaries and Wages Expense 9,000
Rent Expense 4,500
Insurance Expense 1,900
Utilities Expense 1,400
Increase in Inventory 220
Decrease in Accounts Payable 40
Decrease in Prepaid Insurance (3)
Increase in Prepaid Rent 5
Increase in Wages Payable (40)
Increase in Utilities Payable (5)
Cash Paid to Suppliers and Employees 17,017
A company is considering the purchase of a new piece of equipment for $90,000. Predicted annual cash inflows from this investment are $36,000 (year 1), $30,000 (year 2), $18,000 (year 3), $12,000 (year 4) and $6,000 (year 5). The payback period is:
Answer:
3.5 years
Explanation:
Payback period calculates the amount of the time it takes to recover the amount invested from the cumulative cash flows.
The amount invested is $-90,000
In the first year , $-90,000 + $36,000 = $-54,000 is recovered
In the second year, $-54,000 + $30,000 = $-24,000 is recovered
In the third year, $-24,000 + $18,000 = $-6,000 is recovered
In the fourth year, $-6,000 + $12,000 = $6000 is recovered.
By the fourth year, the total amount invested is recovered as the cash flow turns postive
Pay back period = 3 years + $6000/$12,000 = 3.5 years
I hope my answer helps you
You have an investment that in today's dollars returns 12% of your investment in year 1, 18% in year 2, 11% in year 3, and the remainder in year 4. Rounded to two places, what is the Duration of this investment
Answer:
The duration of this investment will be 14,005 years
Explanation:
Duration of investment= Sum of ( Percentage* TIme)
=( 1 x 12%) + (2 x 18%) + (3 x 11%) + (4 x 59%)
= 12+36+33+13,924
=14,005 years
Interest During Construction Dexter Construction Corporation is building a student condominium complex; it started construction on January 1, Year 1. Dexter borrowed $1 million specifically for the project by issuing a 10%, 5-year, $1 million note, which is payable on December 31 of Year 3. Dexter also had a 12%, 5-year, $3 million note payable and a 10%, 10-year, $1.8 million note payable outstanding all year. In Year 1, Dexter incurred costs as follows: January 1 $280,000 March 1 600,000 June 30 1,000,000 November 1 480,000 Calculate Dexter's capitalized interest on the student condominium complex for Year 1. Capitalized interest
Answer:
$140,500
Explanation:
first we must calculate the weighted average accumulated expenditures:
incurred costs as follows:
January 1: $280,000 x 12/12 = $280,000
March 1: $600,000 x 10/12 = $500,000
June 30: $1,000,000 x 6/12 = $500,000
November 1: $480,000 x 2/12 = $80,000
total = $1,360,000
now we must calculate the weighted average interest rate on the non construction debt:
12% x $3 million = $360,000
10% x $1.8 million = $180,000
total = $540,000 / ($3,000,000 + $1,800,000) = 11.25%
capitalized interest:
$1,000,000 x 10% (specific construction debt) = $100,000
$360,000 x 11.25% (non construction debt) = $40,500
total $140,500
The following information is available for Marigold Corp.: Allowance for doubtful accounts at December 31, 2019 $23000 Credit sales during 2020 1250000 Accounts receivable deemed worthless and written off during 2020 26800 As a result of a review and aging of accounts receivable in early January 2021, it has been determined that an allowance for doubtful accounts of $16700 is needed at December 31, 2020. What amount should Marigold record as "bad debt expense" for the year ended December 31, 2020?
Answer: $20500
Explanation:
Bad debt is the amount of money that a credit owes the company and is not willing to be paid hence may not be collected.
The amount that Marigold should record as "bad debt expense" for the year ended December 31, 2020 goes thus:
Bad debt allowance balance needed =
$16700
Add: Bad debt that are written off = $26800
Less: Allowance for doubtful accounts = $23000
Bad debt expense will now be:
= $16700 + $26800 - $23,000
= $43500 - $23000
= $20500
Juanita is deciding whether to buy a skirt that she wants, as well as where to buy it. Three stores carry the same skirt, but it is more convenient for Juanita to get to some stores than others. For example, she can go to her local store, located 15 minutes away from where she works, and pay a marked-up price of $112 for the skirt:
Store Travel Time Each Way (Minutes) Price of a Skirt (Dollars per skirt)
Local Department Store 15 103
Across Town 30 89
Neighboring City 60 63
Juanita makes $16 an hour at work. She has to take time off work to purchase her skirt, so each hour away from work costs her $16 in lost income. Assume that returning to work takes Juanita the same amount of time as getting to a store and that it takes her 30 minutes to shop. As you answer the following questions, ignore the cost of gasoline and depreciation of her car when traveling.
Complete the following table by computing the opportunity cost of Juanita's time and the total cost of shopping at each location.
Store Opportunity Cost of Time (Dollars) Price of a Skirt (Dollars per skirt) Total Cost (Dollars)
Local Department Store 103
Across Town 89
Neighboring City 63
Assume that Juanita takes opportunity costs and the price of the skirt into consideration when she shops. Juanita will minimize the cost of the skirt if she buys it from the:_______
Answer:
Juanita should purchase the skirt at the neighboring city because the total economic cost will be lowest.
Explanation:
three options:
local store 15 minutes away and a price of $103across town 30 minutes away and a price of $89neighboring city 1 hour away and a price of $63Juanita makes $16 per hour at her work, and her purchase decision includes the opportunity cost of lost wages:
total economic cost:
local store = $103 + [1/4 hours x 2 (round trip) x $16] + (1/2 hour x $16) = $119across town = $89 + [1/2 hours x 2 (round trip) x $16] + (1/2 hour x $16) = $113neighboring city = $63 + [1 hour x 2 (round trip) x $16] + (1/2 hour x $16) = $103Juanita should purchase the skirt at the neighboring city because the total economic cost will be lowest ($103)
Opportunity costs are the benefits lost or extra costs incurred for choosing one activity or investment over another alternative. Economic costs include both accounting costs and opportunity costs.
Barton Chocolates used a promissory note to borrow $1,000,000 on July 1, 2018, at an annual interest rate of 6 percent. The note is to be repaid in yearly installments of $200,000, plus accrued interest, on June 30 of every year until the note is paid in full (on June 30, 2023). Show how the results of this transaction would be reported in a classified balance sheet prepared as of December 31, 2018. (Do not round intermediate calculations.)
Answer:
Explanation:
Balance sheet for Barton Chocolates as at December 31,2018
Current liabilities 230,000
Non current liabilities 800,000
Workings.
Loan - $1,000,000
Loan date = July 1
Reporting date = December 31
Timeline = 6 months / 1/2 years
Yearly installment = $200,000
Interest payable = 6/100*1000000*1/2 = 30,000
Current liabilities are liabilities that are due for settlement within a year
Therefore the current liability portion = $200000+30000= $230,000
The non current liability is the balance of the principal loan amount = 1000000=200000= 800000
A company produces a single product. Variable production costs are $13.50 per unit and variable selling and administrative expenses are $4.50 per unit. Fixed manufacturing overhead totals $51,000 and fixed selling and administration expenses total $55,000. Assuming a beginning inventory of zero, production of 5,500 units and sales of 4,350 units, the dollar value of the ending inventory under variable costing would be:
Answer:
$15,525
Explanation:
Calculation for ending inventory under variable costing
Using this formula
Units in ending inventory = Units in beginning inventory + Units produced −Units sold
Thus,
= 0 units + 5,500 units −4,350 units
= 1,150 units
Formula for Value of ending inventory under variable costing
= Unit in ending inventory × Variable production cost
= 1,150 units × $13.50 per unit
= $15,525
Kevin bought 265 shares of Intel stock on January 1, 2019, for $76 per share, with a brokerage fee of $165. Then, Kevin sells all 265 shares for $88 per share on December 12, 2019. The brokerage fee on the sale was $215. What is the amount of the gain/loss Kevin must report on his 2019 tax return
Answer:
$2800
Explanation:
To find the Gain or loss on the sell of shares we jus need to deduct cost of purchasing and brokerage fee from sale proceeds
12 DECEMBER 2019
Gain/loss = Sales proceeds- Total Cost to purchase - Cost to sell
Gain/loss= ($88 x 265) - $20,305 - $215
Gain/loss= $23,320 - $20,305 - $215
Gain/loss= $2800
WORKINGS
Purchase 1 Jan 2019
265shares x $76per share = $20,140
Total cost to purchase = $20,140 + $165(brokerage fee)
Total cost to purchase = $20,305
Cost to sell = $215(brokerage fee)
Shop –N-Go Systems purchased cash registers on April 1 for $6,000. If this asset has an estimated useful life of four years, what is the netbook value of the cash registers on May 31 if the company uses the straight-line method of depreciation?
Answer:
Depreciation= $250
Explanation:
Giving the following information:
Purchasing price= $6,000
Useful life= 4 years
Depreciation= straight-line
First, we need to calculate the annual depreciation:
Annual depreciation= (original cost - salvage value)/estimated life (years)
Annual depreciation= 6,000/4= 1,500
Now, the depreciation for two months:
Depreciation= (1,500/12)*2
Depreciation= $250