Answer:
Finished Goods
Dr Working in progress $23,500
Cr Transfer from Work in progress to Finished goods $23,500
Cost of goods sold
Dr Finished Goods $23,500
Cr Transfer from Finished Goods to Cost of goods sold $23,500
CASH
Dr Sales $ 28,200
Cr Sale of car after job was completed $28,200
Explanation:
Clemens Cars’s Journal entries
Finished Goods
Dr Working in progress $23,500
Cr Transfer from Work in progress to Finished goods $23,500
Cost of goods sold
Dr Finished Goods $23,500
Cr Transfer from Finished Goods to Cost of goods sold $23,500
CASH
Dr Sales $ 28,200
Cr Sale of car after job was completed $28,200
The computer workstation furniture manufacturing that Santana Rey started in January is progressing well. As of the end of June, Business Solutions's job cost sheets show the following total costs accumulated on three furniture jobs.
Job 602 Job 603 Job 604
Direct materials $ 1,500 $ 3,200 $ 3,100
Direct labor 1,000 1,520 2,300
Overhead 400 608 920
Job 602 was started in production in May, and these costs were assigned to it in May: direct materials, $400; direct labor, $250; and overhead, $100. Jobs 603 and 604 were started in June. Overhead cost is applied with a predetermined rate based on direct labor costs. Jobs 602 and 603 are finished in June, and Job 604 is expected to be finished in July. No raw materials are used indirectly in June. (Assume this company’s predetermined overhead rate did not change over these months.)
Required:
1. What is the cost of the raw materials used in June for each of the three jobs and in total?
2. How much total direct labor cost is incurred in June?
3. What predetermined overhead rate is used in June?
4. How much cost is transferred to finished goods inventory in June?
What is the cost of the raw materials used in June for each of the three jobs and in total?
Job 602 Job 603 Job 604 Total
May costs
June costs
Total
What predetermined overhead rate is used in June?
Predetermined overhead rate
How much total direct labor cost is
How much cost is transferred to finished goods inventory in June?
Job Raw Materials Direct Labor Overhead Applied Total Cost Cost transferred to finished goods Costs of Ending WIP
602
603
604
Total
incurred in June?
Job 602 Job 603 Job 604 Total
May costs
June costs
Total
Answer:
1. Cost of the raw materials $8200
2. Total Direct Labor In June $ 2520
3. Predetermined Overhead Rate 40%
4. Cost transferred to finished goods $ 8978
Costs of Ending WIP $ 6320
Explanation:
1. Cost of the raw materials $8200
Job 602 $ 1500
Job 603 $ 3200
Job 604 $3100
Total May Costs $400
Total Job Costs = Jobs, 602+ 603+ 604= $7800
2. Total Direct Labor In June $ 2520
Job 602 $1000
Job 603 $1520
3. Predetermined Overhead Rate= Overhead Cost/ Direct labor Cost
Job602 = 400/1000 *100= 40%
Job 603= 608/1520 *100 = 40%
4. Cost transferred to finished goods
Job 602 603 604
Raw Materials $ 1,500+400 $ 3,200 $ 3,100
Direct labor 1,000 +250 1,520 2,300
Overhead Applied 400+100 608 920
Total Cost 3650 5328 6320
Cost transferred to finished goods = 3650 + 5328= 8978
Costs of Ending WIP $ 6320
Completed jobs are sent to finished goods and incomplete job are in the ending work in process inventory.
Suppose the U.S. imports cars from the UK manufacturer, McLaren. Consider an appreciation of the pound. Which of the following statements correctly describe the effects of thischange?
A. Hold all other prices constant.
B. U.S. consumers pay more dollars for each McLaren car they import from the UK.
C. McLaren supplies a greater quantity of dollars to the foreign exchange market.
D. U.S. consumers increase their purchases of McLaren cars.
E. McLaren's dollar revenues fall.
To peg the pounds per dollar exchange rate at a level higher than the market clearing exchange rate, the UK government needs to:_________.
a. buy pounds and sell dollars
b. buy dollars and sell pounds
c. simple announce a target exchange rate
Answer:
b. and a
Explanation:
Answer:
b. and
Explanation:
Remember, when foreign exchange rates between two currencies of particular country rises (appreciates), it effects is experienced most by the country whose currency hasn't risen. In this case therefore, this would make U.S. consumers pay more dollars for each McLaren car they import from the UK.
Also, to peg the pounds per dollar exchange rate at a level higher than the market clearing exchange rate, the UK government needs to buy pounds and sell dollars, because reducing the supply of pounds in the exchange market creates an opportunity for higher exchange prices.
On average, 5% of credit sales has been uncollectible in the past. At year-end, before adjusting entries, the Accounts Receivable balance is $100,000 and the Allowance for Doubtful Accounts balance is $500 (credit). Net credit sales during the year were $150,000. Using the percentage of credit sales method, the ending balance in the "Allowance for Doubtful Accounts" is
Answer: $7500
Explanation:
The following can be deduced from the question:
Accounts Receivable balance= $100,000
Allowance for Doubtful Accounts = $500
Net credit sales = $150,000.
Percentage-of-sales approach states that the amount of bad debt expense that is recognized by a company will be calculated as a percentage of the credit sales that are generated during the current accounting period.
Using the percentage of credit sales method, the ending balance in the "Allowance for Doubtful Accounts" will be:
= Net credit sales × percentage of credit sales uncollected in the past
= $150,000 × 5%
= $150,000 × 0.05
= $7500
A person has a poor credit score due mainly to the amount of debt on credit card and instalment loans. How could the person improve his score.
Answer: The answer is provided below
Explanation:
The credit score is a number used by lenders to help them decide the likelihood of an individual to repay on time if the person is granted a credit card or a loan. The higher the scores, the likelihood that the person qualifies for credit cards and loans.
A person that has a poor credit score due to the amount of debt on credit card and instalment loans can improve his or her score by paying off the debt. When an individual pays of his or her debt, the person will have an improved credit score which can be used to apply for further loans.
Furthermore, such individual can also keep his or her balances low on the credit cards. A credit card with high debts doesn't represent the individual well when applying for a loan which will lead to a negative credit score.
2. Buckeye Industries has a bond issue with a face value of $1000. The value of Buckeye’s asset is $1200. In one year they will be worth either $800 or $1400. The going rate on T-bill is 4 percent. What is the value of debt, equity, and interest rate on debt?
Answer:
Buckeye Industries has a bond issue with a face value of $1000. The value of Buckeye’s asset is $1200. In one year they will be worth either $800 or $1400. The going rate on T-bill is 4 percent. What is the value of debt, equity, and interest rate on debt?
Explanation:
Determining Cash Payments to Stockholders The board of directors declared cash dividends totaling $209,800 during the current year. The comparative balance sheet indicates dividends payable of $50,400 at the beginning of the year and $45,400 at the end of the year. What was the amount of cash payments to stockholders during the year?
Answer:
$214,800
Explanation:
The amount paid is the sum of the amount declared and the difference in amounts payable.
dividends paid = $209,800 +50,400 -45,400
dividends paid = $214,800
Match the term within the parantheses that best matches each of the following description.
1. Expenditure on research and development
2. A bank loan
3. Listed on a stock exchange
4. Has limited liability
5. Responsible for bank relationships
6. Agency Cost
A. Investment decision
B. Financial asset
C. Public corporationd
D. Corporatione
E. The treasure
F. The cost resulting from conflicts of interest between managers and shareholders.
Answer:
The answer is
1. Expenditure on research and development (A. Investment decision)
2. A bank loan (B. Financial asset)
3. Listed on a stock exchange (C. Public corporation)
4. Has limited liability ( D. Corporation)
5. Responsible for bank relationships ( E. The treasure)
6. Agency Cost (F. The cost resulting from conflicts of interest between managers and shareholders)
Explanation:
1. Expenditure on research and development. (A. Investment decision. Investment decision relates to expenditure on a long-term goal.)
2. A bank loan (B. Financial asset. Businesses that obtain bank loans owns and controls it and makes the decision on how to use it)
3.Listed on a stock exchange( C. Public corporation. Companies that have their stocks traded on exchange are public companies.)
4. Has limited liability (D. corporation/partnership. No distinct separation between the owner and the business)
5. Responsible for bank relationships (E. The treasurer. This person maintains the relationship between the bank and business)
6. Agency Cost ( F. The cost resulting from conflicts of interest between shareholders and managers of the business. The managers of the business are known as the agents)
g "At the start of the current year, Minuteman Corporation had a credit balance in the Allowance for Doubtful Accounts of $3,500. During the year a monthly provision of 3% of sales was made for uncollectible accounts. Sales for the year were $1,110,000, and $7,200 of accounts receivable were written off as worthless. No recoveries of accounts previously written off were made during the year. The year-end financial statements should show:"
Answer: Allowance for the doubtful accounts with a credit balance of $29,600
Explanation:
From the information that is provided in the question, the following can be deduced and the year-end financial statements should show:
Allowance for the doubtful accounts with a credit balance will be calculated as: the beginning allowance for the doubtful accounts + (the sales × Provision % ) - accounts receivable that were written off.
= $3,500 + ($1,110,000 × 3%) - $7,200
= $3500 + $33300 - $7200
= $36800 - $7200
= $29,600
Why would the Lana Limited Corporation decide to issue stocks?
You would like to invest in one of the profitable business units of a multinational corporation. In a meeting with management, you explain that you'll only consider a unit categorized, according to the BCG matrix, as a question mark. Here are your choices:Unit A has revenue of $27 billion and a profit of $6 billion. While its product is based on a new technology that is rapidly increasing in sales, the product currently lags the market share of competitors.Unit B has revenue of $30 billion and a profit of $7 billion. Its market share is strong and growing. While its product is based on an outdated technology, the product has a loyal following for now.Which of the corporation's two profitable units meets your criterion?
Answer:
Unit A has revenue of $27 billion and a profit of $6 billion. While its product is based on a new technology that is rapidly increasing in sales, the product currently lags the market share of competitors.
Explanation:
According to the BCG Matrix, question marks are business units that operate in rapidly growing markets but currently only possess a low market share.
This results in a lot of cash being consumed by the business unit, but also the possibility of high growth. It is called a question mark because it is uncertain if the business unit will be successful or not. This means that they are very risky investments.
Mila is helping to set performance targets for her company, Urban Supply. The target of increasing the company's online customer satisfaction rate by 1% in the next quarter is an example of a performance target focused on the customer perspective of the balance scorecard.
a. true
b. false
Answer: True
Explanation:
The balanced scorecard perspective implies that the company has to satisfy their customer through the provision of quality products and services.
From the question, the target of increasing customers satisfaction is a good example of a performance target that is focused on customer's perspective of the balance scorecard. This means that the statement is true.
Entry for Factory Labor Costs A summary of the time tickets is as follows: Job No. Amount 100 $3,460 101 2,870 104 5,260 108 5,950 Indirect 18,440 111 3,630 115 2,380 117 16,120 Journalize the entry to record the factory labor costs. If an amount box does not require an entry, leave it blank.
Answer:
DR Work in Progress Account $39,650
DR Factory Overhead Account $18,440
CR Wages Payable $58,090
(To record factory Labor Costs)
Workings
Work in Progress
Standard policy is to send the direct cost of Labor to the Work in Progress Account.
The Total direct cost of labor are all of the above except the Indirect cost.
= 3,460 + 2,870 + 5,260 + 5,950 + 3,630 + 2,380 + 16,120
= $39,650
Assume one of the SWOT findings was an internal weakness of low motivation in the sales force regarding product sales. HP has designed a new compensation system to address this motivation. In which stage of the strategy implementation framework does this action reside?
Answer:
Stage 3
Explanation:
Strategic management is defined as formulation of strategies (decisions, actions, and measures) which are implemented to meet organisational goals and objectives.
Strategy formulation is a very important first step in strategy management. Lack of good strategy formulation can lead to organisational failure.
In the given scenario where motivation among employees is identified as a weakness, the action of modifying the reward system falls under the stage 3 of strategic implementation framework
Strategic implementation is concerned with how formulated strategy is implemented.
Church Inc. is presently enjoying relatively high growth because of a surge in the demand for its new product. Management expects earnings and dividends to grow at a rate of 22% for the next 4 years, after which competition will probably reduce the growth rate in earnings and dividends to zero, i.e., g = 0. The company's last dividend, D0, was $1.25, its beta is 1.20, the market risk premium is 5.50%, and the risk-free rate is 3.00%. What is the current price of the common stock?
a. $32.69
b. $26.57
c. $27.37
d. $28.97
e. $23.39
Answer:
Option B ,$26.57 is correct
Explanation:
The cost of equity =Rf+Beta*Mrp
Rf is the risk free rate of 3.00%
Beta of equity is 1.20
Mrp is the market risk premium which is 5.50%
Cost of equity=3.00%+(1.20*5.50%)=9.60%
Stock price =present value of dividends+present value of terminal value
D1=$1.25*(1+22%)/(1+9.6%)^1=$ 1.39
D2=$1.25*(1+22%)^2/(1+9.6%)^2=$ 1.55
D3=$1.25*(1+22%)^3/(1+9.6%)^3=$ 1.72
D4=$1.25*(1+22%)^4/(1+9.6%)^4=$ 1.92
terminal value=year 4 dividend/(r-g)
year 4 dividend=$1.25*(1+22%)^4= 2.77
r is the cost of equity of 9.6%
g is the dividend afer year 4 which is 0%
terminal value= 2.77/(9.6%-0%)=$ 28.85
present value of terminal value= 28.85/(1+9.6%)^4=$ 19.99
Total present values=$ 1.39+$ 1.72+$ 1.92 +$ 1.92 +$ 19.99 =$26.58
According to the question Option B ,$26.57 is correct
How to calculate of common stock?When The cost of equity = [tex]Rf+Beta "/times" Mrp[/tex]
After that, Rf is the risk free rate of 3.00%
then Beta of equity is[tex]1.20[/tex]
After that Mrp is the market risk premium which is 5.50%
So that, Cost of equity 3.00%+(1.20*5.50%)=9.60% = 9.60%
Then The Stock price is = present value of dividends + present value of terminal value
Now, D1 is = $[tex]1.25 "/times" (1+22[/tex]%[tex])/(1+9.6[/tex]%)^[tex]1=$ 1.39[/tex]
Then, D2 is = $[tex]1.25 "/times" (1+22[/tex]%[tex])^2/(1+9.6[/tex]%)^[tex]2=$ 1.55[/tex]
Then D3 is = $1.25 "/times" (1+22%)^3/(1+9.6%)^3=$ 1.72
After that D4 is = $[tex]1.25*(1+22[/tex]%[tex])^4/(1+9.6[/tex]%)^[tex]4=$ 1.92[/tex]
Then the terminal value is = year 4 dividend/(r-g)
Then year 4 dividend is = $[tex]1.25×(1+22[/tex]%)^4= 2.77
Then r is the cost of equity of 9.6%
Now, g is the dividend after year 4 which is 0%
After that terminal value is = 2.77/(9.6%-0%)=$ 28.85
Then present value of terminal value is = [tex]28.85/(1+9.6[/tex]%)^4=$ 19.99
Thus, The Total present values is =$ [tex]1.39+$ 1.72+$ 1.92 +$ 1.92 +$ 19.99[/tex] =$26.57
Therefore Option B is $26.57
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A scrambled list of accounts from the income statement and balance sheet of Belmond, Inc. is found here:
a. How much is the firm's net working capital?
b. Complete an income statement and a balance sheet for Belmond.
c. If you were asked to respond to parts (a) and (b) as part of a training exercise, what could you tell your boss about the company's financial condition based on your answers?"
Answer:
a. How much is the firm's net working capital?
net working capital = current assets - current liabilities = (cash + accounts receivable + inventory) - (accounts payable + short term notes payable) = ($16,540 + $9,580 + $6,450) - ($4,770 + $600) = $27,200
b. Complete an income statement and a balance sheet for Belmond.
Belmond Inc.
Income Statement
For the Year Ended December 31, 202x
Sales $12,830
Cost of goods sold ($5,790)
Gross Profit $7,040
Operating Expenses ($1,330)
General and Administrative Expense ($870)
Interest Expense ($920)
Depreciation Expense ($540)
Operating Income $3,380
Taxes ($1,460)
Net Income $1,920
Belmond Inc.
Balance Sheet
For the Year Ended December 31, 202x
ASSETS
Cash $16,540
Accounts Receivable $9,580
Inventory $6,450
Building and Equipment $122,110
Accumulated Dep. ($34,370)
TOTAL ASSETS $120,310
LIABILITIES AND STOCKHOLDERS' EQUITY
Accounts Payable $4,770
Short-Term Notes Payable $600
Long-Term Debt $55,230
Common Stock $44,900
Retained Earnings $14,810
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $120,310
c. If you were asked to respond to parts (a) and (b) as part of a training exercise, what could you tell your boss about the company's financial condition based on your answers?"
The financial condition of the company can be considered healthy, since its profit margin is almost 15%, although its debt to equity ratio is high = $60,600 / $59,710 = 101.5%. The company has too much debt, even though it makes enough money to pay its obligations.
Suppose Binder corporatio's common stock has a return of 17.61 percent. The risk-free rate is 3.68 percent, the market return is 12.4 percent and there is no unsystematic risk affecting Binder's return. Given the one-factor arbitrage pricing model, what is the factor beta
Answer:
1.597
Explanation:
The computation of the factor beta using the one-factor arbitrage pricing model is shown below:
As we know that
= (Expected rate of return - risk-free rate of return) ÷ (market rate of return-risk-free rate of return)
= (17.61% - 3.68%) ÷ (12.4% - 3.68%)
= 1.597
We simply applied the above formula to determine the factor beta and the same is to be considered
At December 31, 2010, Aaliyah Company reports the following results for its calendar year.
Cash sales........... $1905,000
Credit sales......... 5682000
In addition, its unadjusted trial balance includes the following items
Accounts receivable $1,270,100 debit
Allowance for doubtful accounts 16,580 debit
Required
1. Prepare the adjusting entry for Aaliyah Co. to recognize bad debts under each of the following independent assumptions:
a. Bad debts are estimated to be 1.5% of credit sales.
b. Bad debts are estimated to be 1% of total sales.
c. An aging analysis estimates that 5% of year-end accounts receivable are uncollectible.
2. Show how Accounts Receivable and the Allowance for Doubtful Accounts appear on its December 31, 2010, balance sheet assuming that an aging analysis estimates that 5% of year-end accounts receivable are uncollectible.
Answer:
1.
Debit Credit
31-Dec-10
(a) Bad debt Expense A/c 85,230
To Allowance for Doubtful Accounts A/c 85,230
(b) Bad debt Expense A/c 75,870
To Allowance for Doubtful Accounts A/c 75,870
(c) Bad debt Expense A/c 80,085
To Allowance for Doubtful Accounts A/c 80,085
2.
Current Assets Amount in $ Amount in $
Account Receivables 1,270,100
Less: Allowance for doubtful accounts -85,230 1,184,870
Explanation:
1. In order to prepare the adjusting entry we would have to make the following calculations:
(a) Bad debts estimated =1.5% on Credit sales =$5682,000 *1.5% =$85,230 (b) Bad debts estimated =1% on Total sales =($5682,000 +$ 1905,000) *1% =$75,870
(c ) Bad debts estimated =5% on year end receivables + Debit Balance =5% *1270100 +16580 =$80085
Debit Credit
31-Dec-10
(a) Bad debt Expense A/c 85,230
To Allowance for Doubtful Accounts A/c 85,230
(b) Bad debt Expense A/c 75,870
To Allowance for Doubtful Accounts A/c 75,870
(c) Bad debt Expense A/c 80,085
To Allowance for Doubtful Accounts A/c 80,085
2. Accounts Receivable and the Allowance for Doubtful Accounts appear on its December 31, 2010, balance sheet as follows:
Current Assets Amount in $ Amount in $
Account Receivables 1,270,100
Less: Allowance for doubtful accounts -85,230 1,184,870
A firm sells 1000 units per week. It charges $15 per unit, the average variable costs are $10, and the average costs are $25. In the long run, the firm should a. Shut-down because it is cost effective to pay off the remaining fixed costs b. Continue operating as the firm is covering all the variable costs and some of the fixed costs c. Shut-down as the firm is making a loss of $10,000 per week d. Shut-down as price is lower than average cost
Answer:
b. Continue operating as the firm is covering all the variable costs and some of the fixed costs
Explanation:
A firm should shutdown operations if its price is less than average variable cost.
The price the firm sells is $15
Average variable cost is $10.
Price is greater than average variable cost in excess of $5.
The $5 covers some of the average fixed cost.
I hope my answer helps you
The term _____ can be best defined as a feeling of intrinsic motivation, in which workers perceive their work to have meaning and perceive themselves to be competent, having an impact, and capable of self-determination. a. reciprocity b. empowerment c. utility d. autonomy e. delegation
Answer:
D
Explanation:
The self determination theory is a theory of motivation that examines extrinsic and intrinsic motivation.
The theory states that humans have innate needs. If this needs are satisfied, humans would grow and function optimally. They include :
1. Autonomy - the desire to be in charge of one's life. It is the feeling of intrinsic motivation, in which workers perceive their work to have meaning and perceive themselves to be competent, having an impact, and capable of self-determination
2. Relatedness - the desire to relate and interact with other people.
3. Competence. This is the desire to achieve mastery.
Autonomy is when
Answer:
b. empowerment.
Explanation:
This is explained to be a great act of giving someone power, this is in the form of more freedom and also rights to be productive. This gives the said person a natural flay; if seen in a business place or at place of work, it gives the worker or workers a sense of collaboration, making them share values, pull resources together and happily achieve goals that sharpen their psychs and make the company take great steps to greater heights as this empowerment is not only for the company, because it makes the said workers determined and also self competent in their working activities.
Wildhorse Taxi Service uses the units-of-activity method in computing depreciation on its taxicabs. Each cab is expected to be driven 144,000 miles. Taxi 10 cost $29,000 and is expected to have a salvage value of $200. Taxi 10 was driven 31,000 miles in 2021 and 33,500 miles in 2022. Determine the depreciation cost.
Answer:
Depreciation expense/cost
For 2021 = $6200
For 2022 = $6700
Explanation:
Depreciation expense is the systematic allocation of an asset's cost over its estimated useful life. The depreciation expense is calculated using various methods. The units of activity method charges a depreciation based on the usage of the asset in a particular period as a proportion to its estimated useful life calculated in the form of total usage expected.
The formula for units of activity depreciation per period is,
Depreciation expense = [(Cost - Salvage value) / Total estimated life time activity of the asset] * Activity performed during the period
Depreciation expense-Taxi 10:
For 2021 = [(29000 - 200) / 144000] * 31000 = $6200
For 2022 = [(29000 - 200) / 144000] * 33500 = $6700
A local theater company sells 1,500 season ticket packages at a price of $250 per package. The first show in the 10-show season starts this week. (a) The sale of the season tickets before the first show. (b) The revenue from fulfilling the performance obligation by putting on the first show.
Answer:
Dr cash $375,000
Cr unearned revenue $375,000
Dr unearned revenue $37,500
Cr revenue $37,500
Explanation:
The total amount realized from the sale of tickets is $375,000($250*1500)
However,the cash proceeds should be debited to cash while it is also credited to unearned revenue
The revenue from fulfilling the performance obligation=1/10*$375,000=$37,500
The $37,500 is debited to unearned revenue and credited to sales revenue as that amount has now been earned
a) The cash realized from the sale for all the season tickets is $375,000.
b) The revenue to be recognized after fulfilling the performance obligation of the first show is $37,500.
Data and Calculations:
Selling price per ticket package = $250
Number of ticket packages sold = 1,500
Number of show seasons = 10
On the average, each show season will take = 150 tickets (1,500/10)
Proceeds from sale of season tickets = $375,000 ($250 x 1,500)
Revenue from first show = $37,500 ($375,000/10) or (150 x $250)
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Journalize the following five transactions for Nexium & Associates, Inc. Omit explanations.
March 1 - Bills are sent to clients for services provided in February in the amount of $800.
March 9 - Corner Office, Inc. delivers office furniture ($1,060) and office supplies ($160) to Nexium leaving an invoice for $1,220.
March 15 - Payment is made to Corner Office, Inc. for the furniture and office supplies delivered on March 9.
March 23 - A bill for $430 for electricity for the month of March is received and will be paid on its due date in April.
March 31 – Salaries of $850 are paid to employees.
For a compound transaction, if an amount box does not require an entry, leave it blank or enter "0".
Answer:
Nexium & Associates Journal entries
March 1
Dr Accounts Receivable800
Cr Service Revenue 800
March 9
Dr Office Furniture1,060
Cr Office Supplies 160
Cr Accounts Payable1,220
March 15
Dr Accounts Payable1,220
Cr Cash1,220
March 23
Dr Electricity Expense430
Cr Accounts Payable430
March 31
Dr Salaries Expense850
Cr Cash850
Explanation:
The details given about Nexium & Associates are straight forward and required no further
adjustment.
Answer:
Explanation:
Journal to record the five transactions for Nexium and Associates, Inc.
Account Particulars Debit Credit
March 1
Accounts Receivable $800
Services Revenue $ 800
March 9
Office Furniture $1,060
Office Supplies 160
Accounts Payable 1,220
March 15.
Accounts Payable 1,220
Cash 1,220
March 23.
Electricity Expense $430
Accounts Payable $430
March 31
Salaries Expense $850
Cash $850
The Digby company will sell 100 units (x1000) of capacity from their Daft product line. Each unit of capacity is worth $6 plus $4 per automation rating. The Digby company will sell the capacity for 35% off. How much do they receive when the capacity is sold
Answer: $2,210,000
Explanation:
The company will sell at full cost per Automation rating which is not provided.
The Comp-XM Inquirer shows this Automation rating to be 7.
The Total Cost per Automation rating is,
= $6 + ($4 * 7)
= $34
Selling 100,000 units gives
= 100,000 * 34
= $3,400,000
Selling at 35% off.
= 3,400,000 * ( 1 - 0.35)
= $2,210,000
Assume that HotLap, Inc., a manufacturer of laptop computers, is considering a merger with SassyChips, a leading producer of computer chips. HotLap believes such a merger would benefit their business by giving them a guaranteed steady supply of the chips they need to make their laptops, and more control over the way those chips are designed. If this merger occurs, it would be an example of:____________.
1. contract manufacturing.
2. a vertical merger.
3. a conglomerate merger.
4. a franchise arrangement.
5. a horizontal merger.
6. a leveraged buyout.
Answer:
Option B
Explanation:
In simple words, vertical merger refers to the joining of the two separate entities that provide value to different level of supply chains. Such mergers are implemented by the entities to take advantage of realized synergies.
These mergers provide many benefits such as reduced cost or steady supply but the acquiring entity gets the burden to operate a separate entity and manage it.
Jaune Magazine (JM) must decide whether or not to publish a tell-all story about a celebrity. If the story ends up having major impact, JM will realize substantial profits from additional magazine sales, subscriptions, and advertising revenues. However, if JM publishes the story, JM will face a lawsuit; if it loses the suit, the penalties could be substantial. The tree below summarizes JM's decision.
The EMV of publishing the story is $10,000. Based on this EMV, JM should publish the story. If the publisher chooses not to publish the story, which of the following best describes the publisher's attitude towards this decision?
A) Risk averse.
B) Risk neutral.
C) Risk seeking.
D) Risqué.
Answer:
The correct option is A, risk averse
Explanation:
Risk aversion is a situation where a person undertaking a business or an investor tries as much as possible to limit exposure to losses by taking drastic steps to ensure the losses do not materialize.
The publisher in this case is conscious of facing the lawsuit that could result from publishing story and has taken a precautionary measure by not even venturing into the publishing ,let alone a lawsuit with substantial amount in damages rears its ugly head.
A risk seeking investor would go ahead with the publishing since success could bring a juicy income
Some countries have oil as a natural resource and bronze plate inc, based in illinois, is considering building a facility in one of those foreign countries since it does not have easy access to oil near its manufacturing plant. Which theory of foreign direct investment provides an explanation for this decision?
A) eclectic paradigm
B) infant industry argument
C) protectionism argument
D) product life cycle theory
E) new trade theory
Answer: A) eclectic paradigm
Explanation:
An Eclectic Paradigm is also called a OLI Framework which is an acronym that stands for Ownership, Location, Internationalization.
Companies use this theory in cost based analysis to determine if they can reduce costs by producing in house as opposed to from the market.
It is usually applied to the area of Foreign Direct Investment where companies use it to decide if it is better to invest in another country and have easier access to goods that it needs as opposed to buying it from the market. If it is shown that they stand to gain more from investing directly in another country, they will use this option.
This is the theory that Bronze Plate Inc wants to use.
Thomas Company uses a standard cost system. Information for raw materials for Product RBI for the month of October follows: Standard unit price $1.75 Actual purchase price per unit $1.65 Actual quantity purchased 4,000 units Actual quantity used 3,900 units Standard quantity allowed for actual production 3,800 units What is the materials purchase price variance
Answer:
Material price variance = $400
Explanation:
A material price variance occurs where materials are purchased at a price either lower or higher than the standard price. A favorable variance is recorded where the actual total cost of materials is lower that the standard cost. While an adverse variance implies the opposite.
It is is computed as follows:
The material price variance
$
4000 units should have cost (4,000× 1.75) = 7,000
but did cost - actual cost (4,000× $1.65) = 6,600
Material price variance 400 favorable
Material price variance = $400
Taking all parameters into account, what would you expect to be the probability of it costing exactly $15 to produce one kilogram of penicillin? State where/how you found your answer.
Answer:
Worst case = $28 per kilogram
Base case = $16 per kilogram
Best case = $10.50 per kilogram.
Explanation:
Based on the information and data given in slide 37 what i would expect to be the probability of it costing would tend to depend on the worst, base and best case scenarios once all the parameters given are been taken into account.
The unit of production will tend to cost dollar per Kilogram which means that Worst case will be $28 per kilogram ,Base case will be $16 per kilogram and Best case will be $10.50 per kilogram. .
Mr. Isaac is lending Gh₵20000 to Mr. Hayford, to be repaid over five years. Mr. Isaac would like to effect a policy on Mr. Hayford’s life to cover the loan should Mr. Hayford die. Mr. Hayford would like to insure Mr. Isaac’s life just in case he dies and the beneficiaries of his will insist that the loan be repaid early.
Question:
Mr. Isaac is lending Gh₵20000 to Mr Hayford, to be repaid over five years. Mr Isaac would like to effect a policy on Mr Hayford’s life to cover the loan should Mr Hayford die. Mr Hayford would like to insure Mr Isaac’s life just in case he dies and the beneficiaries of his will insist that the loan be repaid early.
(a) What is the extent of insurable interest in each case?
(b) Consider any necessary action if the loan was later repaid earlier than anticipated what happens to the policy?
Answer:
To answer the question (a), one must first understand the concept of Insurable Interest.
A policyholder is said to have an insurable interest in a subject matter whenever the subject matter of a contract provides some financial gain to them and would lead to a financial loss if damaged, destroyed, stolen or lost.
For example, if I purchase a car for my use for $10,000, theft of or damage to that car will translate to financial loss to me. Therefore, I have an insurance interest in the car. This qualified me to Insure the car against loss arising from any form of insurable damage, or theft.
In question (a) there are two cases.
Case I - Mr Isaac would like to effect a policy on Mr Hayford’s life to cover the loan should Mr Hayford die.
Mr Isaac, in this case, has full insurable interest on Mr Hayfords life. If Mr Hayford dies, Mr Isaac will be put in a financial loss to the tune of Gh₵20000.
Case II - Mr Hayford would like to insure Mr Isaac’s life just in case he dies and the beneficiaries of his will insist that the loan be repaid early.
Mr Hayford does an insurable interest on Mr Isaac's life. This insurable interest arises due to the possibility (as given in the question) that Isaacs family have the power to request for the loan earlier than it ought to have been paid.
The insurable interest arises because paying back the loan earlier than anticipated, may put Mr Hayford in financial distress and may lead to financial and economic loss. If the loan is meant for the running of his business, the business may fold up, and he may forfeit all the assets of the business.
In a real-life scenario, this can all be prevented by ensuring that the terms of the loan are documented in a contract which must be ratified by both parties. In this contract, clauses preventing the lender from cutting short the tenure of the loan can be inserted. This is less expensive and easier to administer.
(b) In each of the cases above, if the loan is paid back earlier than anticipated:
i. Under duress from the family: The provision of the policy protecting the interest of Mr. Hayford kicks in and makes good the loss to mitigate it and terminates afterwards.
ii. By volition by Mr Hayford: The policy terminates immediately as the insurable interest he has on Mr Isaac's life becomes extinct.
Cheers!
Target profit is $100,000; fixed overhead costs are $120,000 and fixed selling and administrative costs are $50,000. If total variable cost is $675,000, the markup percentage to the variable cost using the variable cost method is %. Round your answer to the nearest whole percent
Answer:
40%
Explanation:
The markup percentage to the variable cost using the variable cost method can be obtained by dividing the addition of the target profit and total fixed cost by the total variable cost as follows:
Total fixed cost = Fixed overhead costs + Fixed selling and administrative costs = $120,000 + $50,00 = $170,000
The markup percentage to the variable cost = (Target profit + Total fixed cost) / Total variable cost = ($100,000 + $170,000) / $675,000 = $270,000 / $675,000 = 0.40, or 40%.
Therefore, the markup percentage to the variable cost using the variable cost method is 40%.