completion. Item8 Part 5 of 5 10 points Return to questionItem 8Item 8 Part 5 of 5 10 points Required information [The following information applies to the questions displayed below.] In 2021, the Westgate Construction Company entered into a contract to construct a road for Santa Clara County for $10,000,000. The road was completed in 2023. Information related to the contract is as follows: 2021 2022 2023 Cost incurred during the year $ 2,542,000 $ 3,772,000 $ 2,074,600 Estimated costs to complete as of year-end 5,658,000 1,886,000 0 Billings during the year 2,020,000 4,294,000 3,686,000 Cash collections during the year 1,810,000 3,800,000 4,390,000 Westgate recognizes revenue over time according to percentage of completion. 5. Calculate the amount of revenue and gross profit (loss) to be recognized in each of the three years assuming the following costs incurred and costs to complete information. (Do not round intermediate calculations and round your final answers to the nearest whole dollar amount. Loss amounts should be indicated with a minus sign.)
Answers
Answer and Explanation:
The computation of amount of revenue and gross profit (loss) to be recognized in each of the three years is shown below:-
Sales revenue for the present period for 2021 = $31,00,000.00
Sales revenue for the present period for 2022 = $46,00,000.00
Sales revenue for the present period for 2023 = $23,00,000.00
Gross Profit for year 2021 = $5,58,000.00
Gross profit for year 2022 = $8,28,000.00
Gross profit for year 2023 = $2,25,400.00
To reach the sales revenue we simply deduct the Sales revenue recognized in previous period from Sales revenue recognized till date for 3 years on the other hand to compute the gross profit we simply deduct the Cost incurred during the year from Sales revenue for the present period for 3 years.
For clarification we attached the spreadsheet to reach the sales revenue and gross profit for 3 years.
Related Questions
On January 1, 2021, the Taylor Company adopted the dollar-value LIFO method. The inventory value for its one inventory pool on this date was $470,000. Inventory data for 2021 through 2023 are as follows:
Date Ending Inventory at Year-End Costs Cost Index
12/31/2021 $391,400 1.03
12/31/2022 454,250 1.15
12/31/2023 477,400 1.24
Required: Calculate Taylor's ending inventory for 2021, 2022, and 2023.
Answers
Answer:
Taylor Company ending inventories are
2021= $380600
2022= $397850
2023= $386350
Explanation:
Kindly check attached pdf for the computation of the solution
The bookkeeper for Riverbed Company has prepared the following balance sheet as of July 31, 2017.
RIVERBED COMPANY
BALANCE SHEET
AS OF JULY 31, 2017
Cash $ 72,350 Notes and accounts payable $ 47,350
Accounts receivable (net) 43,850 Long-term liabilities 78,350
Inventory 63,350 Stockholders’ equity 158,850
Equipment (net) 84,000 $284,550
Patents 21,000
$ 284,550
The following additional information is provided.
1. Cash includes $1,200 in a petty cash fund and $12,050 in a bond sinking fund.
2. The net accounts receivable balance is comprised of the following two items: (a) accounts receivable $47,350 and (b) allowance for doubtful accounts $3,500.
3. Inventory costing $5,110 was shipped out on consignment on July 31, 2017. The ending inventory balance does not include the consigned goods. Receivables in the amount of $5,110 were recognized on these consigned goods.
4. Equipment had a cost of $115,350 and an accumulated depreciation balance of $31,350.
5. Income taxes payable of $6,000 were accrued on July 31. Riverbed Company, however, had set up a cash fund to meet this obligation. This cash fund was not included in the cash balance, but was offset against the income taxes payable amount.
Prepare a corrected classified balance sheet as of July 31, 2017, from the available information, adjusting the account balances using the additional information.
Answers
Answer: The answer has been attached
Explanation:
A balance sheet also referred to as the statement of financial position is a summary of financial balances of an organization.
Kindly note that in the attached diagram, an asset are the resources owned by the company which have future economic value while a liability is something that a person or a company owes usually a sum of money.
The solution has been attached.
You are an international shrimp trader. A food producer in the Czech Republic offers to pay you 2.3 million Czech koruna today in exchange for a year's supply of frozen shrimp. Your Thai supplier will provide you with the same supply for 2.8 million Thai baht today. If the current competitive market exchange rates are 25.49 koruna per dollar and 39.31 baht per dollar, what is the value of this deal?
Answers
Answer:
$19,002.77
Explanation:
The computation of the value of deal is shown below:
The value of the deal = Sales revenue - purchase cost
where,
Sales revenue is
= 2,300,000 ÷ 25.49 koruna per dollar
= $90,231.46
And, the purchase cost is
= 2,800,000 ÷ 39.31 baht per dollar
= $71,228.69
So, the value of the deal is
= $90,231.46 - $71,228.69
= $19,002.77
hence, the value of the deal is $19,002.77
During the most recent month, the following activity was recorded:_______.
a. Eleven thousand six hundred pounds of material were purchased at a cost of $2.90 per pound.
b. The company produced only 1,160 units, using 10,440 pounds of material. (The rest of the material purchased remained in raw materials inventory.)
c. 564 hours of direct labor time were recorded at a total labor cost of $6,768.
Answers
Answer:
7000
Explanation:
C.564 hours of direct labor tine were recorded at a total labor cost of $6,768
Lolita, a Mexican business woman, came to Redmond Washington to negotiate a business deal with Microsoft. Lolita, assuming business was formal, dressed in a formal suit, nylons, and high heels. She met with the Vice President of Worldwide Sales at Microsoft, Kevin Johnson, and greeted him with, "Good morning Vice President Johnson." Kevin was dressed in jeans and sneakers and addressed Lolita with, "Hello Lolita, nice to finally meet you in person." Lolita was offended by this greeting. This example illustrates which assumption about intercultural communication?
Answers
Answer:
b) all of these are true.
Explanation:
The scenario described in the question illustrates differences in communication rules that suffer from different cultural influences, this is what we perceive when Mexican Lolita may have been surprised that the American Kevin Johnson communicated with her in a more informal way at a formal work meeting. , and therefore felt offended, as he took into account the type of cultural communication in his country of origin, disregarding the intercultural differences in communication that occur in different countries.
So the ideal is that in a case like the one described in the question, where there are negotiations for business deal with international companies, employees are prepared to relate professionally with different types of people, observing the type of communication context, understanding that there are differences intercultural experiences that imply in the way people relate to each other even in the work environment, and above all, maintain ethics and respect for each and every culture different from yours.
Imperial Jewelers manufactures and sells a gold bracelet for $408.00. The company’s accounting system says that the unit product cost for this bracelet is $268.00 as shown below:
Direct materials $147
Direct labor 85
Manufacturing overhead 36
Unit product cost $268
The members of a wedding party have approached Imperial Jewelers about buying 30 of these gold bracelets for the discounted price of $368.00 each. The members of the wedding party would like special filigree applied to the bracelets that would require Imperial Jewelers to buy a special tool for $452 and that would increase the direct materials cost per bracelet by $9. The special tool would have no other use once the special order is completed.
To analyze this special order opportunity, Imperial Jewelers has determined that most of its manufacturing overhead is fixed and unaffected by variations in how much jewelry is produced in any given period. However, $15.00 of the overhead is variable with respect to the number of bracelets produced. The company also believes that accepting this order would have no effect on its ability to produce and sell jewelry to other customers. Furthermore, the company could fulfill the wedding party’s order using its existing manufacturing capacity.
Required:
a. What is the financial advantage (disadvantage) of accepting the special order from the wedding party?
b Should the company accept the special order?
Answers
Answer:
2352, Yes
Explanation:
a) Incremental Cost = Direct Material cost + Direct labour cost + Filgree + Manufacturing overhead cost
= 147 + 85 + 9 + 15 = 256
Total additional Cost = 256 x 21 = 5376
Incremental Revenue = 368
Total additional Revenue = 368 x 21 = 7728
Incremental net operating income = Total additional revenue - total additional cost
= 7728 - 5376 = 2352
b) As Incremental net operating income is positive, company is earning from the special order. Yes, it should accept it
The relevant costs for a decision to accept the special order are :
1. Incremental Revenue from the special order
2. incremental variable cost
3. The cost of the special tool
Unit variable cost = 147+ 85 + 9 + 15 = $256
The balance of manufacturing overhead would be incurred either way. Therefore, they are not relevant for the decision
Sales revenue from special order $
(21× $368) 7728
The Variable cost of special order $
(21× $256) (5376 )
Financial advantage 2358
The company should accept the special order, as it will increase its profit by $2352
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g The sticky-wage theory of the short-run aggregate supply curve says that when the price level rises more than expected, a. production is more profitable and employment rises. b. production is more profitable and employment falls. c. production is less profitable and employment rises. d. production is less profitable and employment falls.
Answers
Answer:
A. Production is more profitable and employment rises
Explanation:
Wages are sticky if market prices or wages don’t adjust quickly to changes in the economy. When prices are sticky, the Short Run Aggregate Supply curve slopes upward. It slopes upward because at least one price is fixed. The curve shows that a higher price level leads to more output
Therefore when the price level rises more than expected, production is more profitable and employment rises.
Lucy's Music Emporium opened its doors on January 1, 2015, and it was granted permission to use the same depreciation calculations for shareholder reporting and income tax purposes. The company planned to depreciate its fixed assets over 20 years, but in December 2015 management realized that the assets would last for only 15 years. The firm's accountants plan to report the 2015 financial statements based on this new information. How would the new depreciation assumption affect the company's financial statements
Answers
Answer: d. The firm's cash position in 2015 and 2016 would increase.
Explanation:
The financila statements had been calculated with the view that fixed assets would be depreciated over a 20 year period. However, it was discovered that the assest should be depreciated over 15 years instead. This reduction in the period would have the effect for increasing the depreciation payment.
For example, say the asset cost $20,000 and was originally to be depreciated over 20 years using Straight Line Depreciation. This means that the depreciation per year would be,
= [tex]\frac{20,000}{20}[/tex]
= $1,000 a year.
If it was however discovered that it was supposed to be 15 years that figure would go to,
= [tex]\frac{20,000}{15}[/tex]
= $1,333.33 a year
Notice how depreciation increased. Lucy's Music emporium will therefore see their depreciation cost rise. Depreciation is subtracted from revenue as it is tax deductible. When Lucy's Emporium deduct this new depreciation, they will have less profit. They will be taxed on this less profit and so pay a lower tax. This will thus increase their cash holdings because Depreciation is a non cash expense and does not actually require a cash payment.
Torche Corporation Balance Sheet As of March 11, 2020 (amounts in thousands) Cash 14,700 Accounts Payable 2,400 Accounts Receivable 4,800 Debt 3,700 Inventory 3,800 Other Liabilities 5,000 Property Plant & Equipment 15,800 Total Liabilities 11,100 Other Assets 900 Paid-In Capital 6,000 Retained Earnings 22,900 Total Equity 28,900 Total Assets 40,000 Total Liabilities & Equity 40,000 Use T-accounts to record the transactions below, which occur on March 12, 2020, close the T-accounts, and construct a balance sheet to answer the question. 1. Receive payment of $12,000 owed by a customer 2. Buy $15,000 worth of manufacturing supplies on credit 3. Purchase equipment for $44,000 in cash What is the final amount in Total Liabilities & Equity?
Answers
Answer:
Final amount in Total Liabilities & Equity = $40,015,000
Explanation:
A T-account refers to an informal term that is used to describe a set of financial records that are based on the principle of double-entry bookkeeping. The term T- account is used to indicate how bookkeeping entries appear.
Balance sheet is a statement of financial position used to report assets, liabilities and shareholders' equity of a company.
Note: See the attached excel for the T-accounts prepared and the balance sheet constructed. Just scroll down on the excel file to see everything.
Tiptop Flight School offers flying lessons at a small municipal airport. The school's owner and the manager have been attempting to evaluate performance and control costs using a variance report that compares the planning budget to actual results. A recent variance report appears below:
Tiptop Flight School
Variance Report
For the Month Ended July 31
Actual Results Planning Budget Variances
Lessons 155 150
Revenue $33,900 $33,000 $900 F
Expenses:
Instructor wages 9,870 9,750 120 U
Aircraft depreciation 5,890 5,700 190 U
Fuel 2,750 2,250 500 U
Maintenance 2,450 2,330 120 U
Ground facility expenses 1,540 1,550 (10) F
Administration 3,320 3,390 (70) F
Total expense 25,820 24,970 850 U
Net operating income $8,080 $8,030 $50 F
After several months of using such variance reports, the owner has become frustrated. For example. she is quite confident that instructor wages were very tightly controlled in July. but the report shows an unfavorable variance. The planning budget was developed using the following formulas, where q is the number of lessons sold:
Cost Formulas
Revenue $220 q
Instructor wages $65 q
Aircraft depreciation $38 q
Fuel $15 q
Maintenance $530 + $12 q
Ground facility expenses $1,250 + $2 q
Administration $3,240 + $1 q
Required:
1. Should the owner feel frustrated with the variance reports? Explain.
2. Prepare a flexible budget performance report for the school for July.
3. Evaluate the school's performance for July.
Answers
Answer:
1. Should the owner feel frustrated with the variance reports?
Yes, because they were incomplete. Since the quantity of lessons is larger than the budgeted, you must prepare a flexible budget. The flexible budget shows that there exists a total unfavorable variance of $385. E.g. , regarding the pilots' salaries, there is a favorable variance in the flexible budget.
2. Prepare a flexible budget performance report for the school for July.
I used an excel spreadsheet to prepare a flexible budget and I attached it.
3. Evaluate the school's performance for July.
The school's performance is neither good or bad because it has higher revenues than estimated (even though it lowered its sales price), but their costs are also higher than budgeted. They are doing a good job at selling their lessons, but a bad job of keeping costs under control. The overall variance is not that significant, but it is still unfavorable. Their fuel expenses should be controlled since the largest unfavorable variance results from spending too much fuel.
Explanation:
Actual Planning Variances
Results Budget
Lessons 155 150 5 F
Revenue $33,900 $33,000 $900 F
Expenses:
Instructor wages $9,870 $9,750 $120 U Aircraft depreciation $5,890 $5,700 $190 U Fuel $2,750 $2,250 $500 U Maintenance $2,450 $2,330 $120 U Ground facility expenses $1,540 $1,550 ($10) F Administration $3,320 $3,390 ($70) F Total expense $25,820 $24,970 $850 UNet operating income $8,080 $8,030 $50 F
1. The school proprietor should not feel frustrated with the variance reports as they are meant to provide guidance and not a feeder for frustration. A careful review of the variance reports will help the owner to understand the cost dynamics for improvements.
2. The flexible budget performance report for the school in the month of July is as follows:
Tiptop Flight School
Flexible Budget Performance Report
For the Month Ended July 31
Actual Results Flexible Budget Variances
Lessons 155 155
Revenue $33,900 $34,100 $200 U
Expenses:
Instructor wages 9,870 10,075 205 F
Aircraft depreciation 5,890 5,890 0 None
Fuel 2,750 2,325 (425) U
Maintenance 2,450 2,390 (60) U
Ground facility expenses 1,540 1,560 20 F
Administration 3,320 3,395 75 F
Total expense 25,820 25,635 185 U
Net operating income $8,080 $8,465 $385 U
3. The school's performance in July is not encouraging based on the flexible budget. There may be the need for the owner to review the price per lesson upward, keeping customers' effective demand in mind.
Data and Calculations:
The actual number of lessons for July, q = 155
Flexing the Budget:
Revenue $220 q = $34,100
Instructor wages $65 q = $10,075
Aircraft depreciation $38 q = $5,890
Fuel $15 q = $2,325
Maintenance $530 + $12 q = $2,390
Ground facility expenses $1,250 + $2 q = $1,560
Administration $3,240 + $1 q = $3,395
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(LaVilla) LaVilla is a village in the Italian Alps. Given its enormous popularity among
Swiss, German, Austrian, and Italian skiers, all of its beds are always booked in the winter
season and there are, on average, 1,200 skiers in the village. On average, skiers stay in
LaVilla for 10 days.
a. How many new skiers are arriving—on average—in LaVilla every day?
b. A study done by the largest hotel in the village has shown that skiers spend on average $50 per person on the first day and $30 per person on each additional day in local
restaurants. The study also forecasts that—due to increased hotel prices—the average
length of stay for the 2003/2004 season will be reduced to five days. What will be the
percentage change in revenues of local restaurants compared to last year (when skiers
still stayed for 10 days)? Assume that hotels continue to be fully booked!
Q2.6 (Highway) While driving home for the holidays, you can’t seem to get Little’s Law out of
Answers
Answer:
a) 120 skiers per day
b) 6.25% increase in revenue
Explanation:
a) If the average skier stays 10 days, the average turnover is 1/10 of the skiers per day, or 1200/10 = 120 skiers per day.
__
b) For a stay of n days, the average skier spends ...
50 +(n-1)30 = 20 +30n
and the average spending per day is ...
(20 +30n)/n = (20/n) +30
So, for a 10-day stay, the average skier spends in restaurants ...
20/10 +30 = 32 . . . . per day
And for a 5-day stay, the average skier will spend ...
20/5 +30 = 34 . . . . per day
The change in restaurant revenue is expected to be ...
(34 -32)/32 × 100% = 2/32 × 100% = 6.25%
Restaurant revenues will be 6.25% higher compared to last year.
On April 17, 2021, the Loadstone Mining Company purchased the rights to a coal mine. The purchase price plus additional costs necessary to prepare the mine for extraction of the coal totaled $4,950,000. The company expects to extract 990,000 tons of coal during a four-year period. During 2021, 249,000 tons were extracted and sold immediately.Required:
1. Calculate depletion for 2021.
2. Is depletion considered part of the product cost and included in the cost of inventory?
Answers
Answer:
1. Depletion for 2021 will be derived if the "tons which were extracted and sold immediately" is divided by "the Depletion per ton"
Depletion for 2021 = Extracted and sold tons in 2021 / depletion per ton
Depletion for 2021 = 249,000 tons * $5 per tons
Depletion for 2021 = $1,245,000
Where as the depletion per ton is be derived when the purchase price plus additional costs necessary is divided extract of tons of coals during the 4 year period.
Depletion per ton = $4,950,000 / 990000
Depletion per ton = $5 per ton
2. Depletion is not considered as part of product cost. It is shown as expense on income statement and reduced from the value of natural resource. So it is equivalent to depreciation of assets.
General Discussion Questions What should business leaders take away from this scandal? What could Wells Fargo have done differently to avert this cultural meltdown? Practice of Ethical Leadership Questions Modeling Character and Values: What values did Stumpf model to Wells Fargo employees? What impact might that have on the culture of Wells Fargo? Encouraging Ethical Conduct: What behaviors can leaders model in order to encourage ethical behavior in their organization? Designing Ethical Systems: Wells Fargo did have some systems in place, like the ethics hotline, to report unethical behavior, but it didn’t work. Why do you think that is? What steps can leaders take to design systems that encourage ethical behavior rather than unethical behavior?
Answers
Answer:
From this scandal, business leaders should learn to:
(a) not encourage unethical practices directly or indirectly among employees.
(b) not set unrealistic targets for employees to achieve within an unrealistic time-frame.
(c) Institute measures to prevent unethical practices.
(d) Encourage honest employees to grow in the company.
(e) Honor adherence to regulatory framework as applicable to the company.
Wells Fargo could have done differently in these manner:
(a) When the first incident of aggressive sales practice was reported in year 2004 with identified incidents from year 2002, they could have instituted measures to prevent recurrence of such incidents. Some of the practical and workable measures are enumerated in succeeding paragraphs.
(b) Convene a meeting of senior managers to provide them with appropriate guidelines so as not to repeat such incidents.
(c) Instruct senior managers to advise their juniors to refrain from any such aggressive sales practices.
(d) Investigate to determine the extent of impact of aggressive sales practices as on 2004 and take remedial actions against those who are engaged in such activities.
(e) Promote the whistle-blower method of instantaneous reporting of an incident by anyone who has witnessed such an incident.
(f) Reward employees having honesty, integrity and moral values.
Practice of Ethical Leadership Questions
CEO John Stumpf’s model was to aggressively cross-sell products by any means. While leading the bank in doing so, he had compromised on the minimum value system that any financial institution or any company must adhere to. The cultural impact that had on Wells Fargo is listed below:
(a) Employees were pressurized for resorting to unethical practices.
(b) Employees reporting matters on unethical practices were punished.
(c) The performance management/ measurement system, in effect, encouraged dishonesty in employees.
(d) The compensation system was skewed in favor of bonus.
(e) Since, the supervisors pressurized employees, the structural dishonesty within the organization was evident.
Leaders can encourage ethical behavior in their organization in the following manner:
(a) Demonstrate personal ethics in their words and actions.
(b) Instruct senior managers to strictly adhere to the ethical norms to be followed.
(c) Instruct senior managers to communicate company’s ethical agenda to the supervisors/ other junior employees within their departments/ sections.(d) Monitor adherence to / violation of ethical practices on a regular basis.(e) Institute immediate remedial measures to prevent recurrence of any unethical practice.
(f) Encourage employees to report incidents of unethical practices.
(g) Reward honest and hardworking employees.
Well Fargo’s system of ensuring Ethical System within the bank, such as ethics hotline to report unethical behavior did not work because, the top management, led by the CEO did not pay any importance to prevention of unethical practices. Rather, they steered in an organized and structured manner to promote unethical practices.
Leaders can take the following steps to design systems that encourage ethical behavior:
(a) The top leaders must “think ethics”, “speak ethics” and “act ethics”. This is the top most fundamental step in the direction of designing systems to encourage ethical behavior.
(b) Matters on “what is ethical and what is not ethical” must be circulated across the organization.
(c) Periodic briefing must take place from the top management to the junior most employees in a structured and organized manner.
(d) Encouragement on reporting (whistle-blowing) incidents of unethical practices must be given.
(e) System of rewarding honest and hardworking employees must be put in place.
Ocean Auto Parts Company uses the direct method to prepare its statement of cash flows. Refer to the following information reported for 2017:1. Sales Revenue, $516,0002. Accounts Receivable, beginning balance, $97,0003. Accounts Receivable, ending balance, $63,000Compute the collections from customers.A.$453,000B.$550,000C.$356,000D.$160,000
Answers
Answer:
The answer is B. $550,000
Explanation:
Collection from customers is a line item in operating activities under cash flow. It is the total amount of money business collected from customers for its sales on credit.
Beginning receivable -------$97,000
Add:
Sales revenue------------------$516,000
Less:
Ending receivable-------------$63,000
Collections from customers-- $550,000
Which of the following is NOT a pitfall an organization should avoid in strategic planning? Involving all managers rather than delegating planning to a "planner" Failing to communicate the plan to employees Failing to create a collaborative climate supportive of change Top managers not actively supporting the strategic-planning process Doing strategic planning only to satisfy accreditation or regulatory requirements
Answers
Answer:
Involving all managers rather than delegating planning to a "planner"
Explanation:
Strategic planning is a process of establishing the direction of a business. It assesses where the business is and where it is going. And the action plan needed to get to it's goal.
Delegating planning to a planner rather than involving all managers is an identified pitfall in strategic planning.
This is why Involving all managers rather than delegating planning to a "planner" is the correct answer since we are required to identify a non pitfall by the question.
Alexander and Kristin are executive managers at Safety First Fall Safety Equipment Co. They realize that within the last several quarters, they have been treating the performance metrics from the company's two very distinct divisions the same rather than focusing on the unique aspects of each division. They have inaccurately assessed divisional performance as a result. Alexander and Kristin realize they have fallen prey to a cognitive bias known as:_______
a. common measures bias
b. motivated reasoning
c. surrogation
d. uncommon measures bias
Answers
Answer:
The correct answer to the following question will be Option A (Common measures bias).
Explanation:
CMS occurs because once variations throughout order to respond have been triggered either by method rather than with the real propensities of the participants that only the equipment is trying to expose.It suggested a lack of desire on the part of the decision-maker to integrate specific knowledge because this knowledge provides additional cognitive effort. It's streamlined.The remaining three solutions are not relevant to the situation in question. So Choice A is the right one.
Prepare the adjusting journal entries for the following transactions. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field.) Supplies for office use were purchased during the year for $700, of which $200 remained on hand (unused) at year-end. Interest of $350 on a note receivable was earned at year-end, although collection of the interest is not due until the following year. At year-end, salaries and wages payable of $4,600 had not been recorded or paid. At year-end, one-half of a $3,000 advertising project had been completed for a client, but nothing had been billed or collected. Redeemed a gift card for $700 of services.
Answers
Answer:
Adjusting Journal Entries:
Debit Supplies Expense $500
Credit Supplies $500
To record supplies used during the year.
Debit Interests on Note Receivable $350
Credit Interest on Note $350
To record interest earned, but not received.
Debit Salaries & Wages Expense $4,600
Credit Salaries & Wages Payable $4,600
To record accrued salaries and wages.
Debit Account Receivable (Advertising Project) $1,500
Credit Service Revenue (Advertising Project) $1,500
To record one-half of advertising project completed.
Debit Cash Account $700
Credit Gift Card $700
To record redemption of a gift card of services.
Explanation:
Adjusting entries are made at the end of an accounting period to record accrued expenses and revenue, depreciation charge, deferred expenses and revenue. These adjustments bring the accounts to agree with the accrual concept which insists that transactions which do not impact cash flows must be recognized in the period they occur.
Precious Metal Mining has $17 million in sales, its ROE is 13%, and its total assets turnover is 4x. Common equity on the firm’s balance sheet is 55% of its total assets. What is its net income? Write out your answer completely. For example, 5 million should be entered as 5,000,000. Round your answer to the nearest cent. Do not round intermediate steps.
Answers
Answer:
net income = $303,875
Explanation:
total sales $17 million
return on equity (ROE) = 13% = net income / stockholders' equity
asset turnover = 4 = total sales / average total assets
common equity = 55% of assets
first we must determine average total assets:
average total assets = total sales / 4 = $17 million / 4 = $4.25 million
common equity = 55% x total assets = 55% x $4.25 million = $2,337,500
ROE = 13% = net income / $2,337,500
net income = 13% x $2,337,500 = $303,875
Dividends Per Share Windborn Company has 25,000 shares of cumulative preferred 3% stock, $50 par and 50,000 shares of $15 par common stock. The following amounts were distributed as dividends:
Y1 $75,000
Y2 15,000
Y3 112,500
Determine the dividends per share for preferred and common stock for each year. The stock outstanding when a corporation has issued only one class of stock.common stock for each year.
Preferred Stock Common Stock
(dividend per share) (dividend per share)
Year 1 $ $
Year 2 $ $
Year 3 $ $
Answers
Answer:
Preferred Stock Common Stock
(dividend per share) (dividend per share)
Year 1 $1.50 $0.75
Year 2 $0.60 $0.00
Year 3 $2.40 $1.05
Explanation:
For Year 1:
Total dividend distributed = $75,000
Preferred shareholders' dividend = $50 * 25,000 * 3% = $37,500
Preferred shareholders' dividend per share = $37,500 / 25,000 = $1.50
Common stockholders' dividend = Total dividend distributed - Preferred shareholders' dividend = $75,000 - $37,500 = $37,500
Common stockholders' dividend per share = $37,500 / 50,000 = $0.75
For Year 2:
Total dividend distributed = $15,000
Dividend payable to preferred shareholders = $50 * 25,000 * 3% = $37,500
Dividend paid to preferred shareholders = $15,000
Preferred shareholders' dividend per share = $15,000 / 25,000 = $0.60
Preferred shareholders' dividend carried forward = Dividend payable to preferred shareholders - Total dividend distributed = $37,500 - $15,000 = $22,500
Common stockholders' dividend = $0
Common stockholders' dividend per share = $0
For Year 3:
Total dividend distributed = $112,500
Total dividend paid to preferred shareholders = $37,500 + Preferred shareholders' dividend carried down from Year 2 = $37,500 + $22,500 = $60,000
Preferred shareholders' dividend per share = $60,000 / 25,000 = $2.40
Common stockholders' dividend = Total dividend distributed - Total dividend paid to preferred shareholders = $112,500 - $60,000 = $52,500
Common stockholders' dividend per share = $52,500 / 50,000 = $1.05
Plaintiffs filed a class action lawsuit against investment banks alleging that they inflated prices on more than 300 IPOs, causing IPO investors to overpay for stock, and unlawfully benefited these banks through overcompensation of banking commissions and profits made through quick sales of this stock in their own accounts before prices settled into a more realistic valuation. How would you combat such abuses going forward
Answers
Answer: The answer is provided below
Explanation:
When we think about investment, individuals and firms should understand the risks before they invest their money, and also the loss risks.
When investing in a business or a corporation that you may work for, it is vital to understand and be clear on the fine print and also the 180-dayhold. It is vital on any purchase to understand the risks and rules which come along with it especially stocks.
It is crucial to the success of an individual, that research is done in order to make sure everything is understood prior to the stock sale.
On the other side, federal banking regulators committee should also do a better job with the investigations and the enforcements of bank and the stock regulations.
Phionia Phelps has developed a gourmet cat food. Not only is this food eagerly eaten by the most finicky felines, but it is specially formulated to prevent the many health problems of aging cats. Phionia has been making the food on her kitchen range and selling it at $250 per case only to close acquaintances who are also cat lovers. One of her wealthy acquaintances has now offered to invest in her business if Phionia will begin selling the product through her website. However, the investor wants Phionia to produce a budget for the first six months of operation. Based on her experience to date, Phionia predicts the following sales in cases:
Each case of Finicky Feline Gourmet Cat Dinner requires 5 pounds of prime lamb meat, 10 pounds of short grain Chinese rice, 2 pounds of wild caught Alaskan salmon, and 1 pound of secret vitamins and supplements. Phionia plans to maintain end-of-month inventories equal to 10 percent of the next month's projected sales, to meet expected sales growth. All the ingredients inventories are to be maintained at 5 percent of the production needs for the next month, but not to exceed 1,000 pounds of any one ingredient. January will begin with all inventories at the projected levels. Phionia has the following price quotes good for the following year:
The production process requires direct labor at two skill levels: (1) ingredient preparation, $18 per hour, and (2) cooking and canning, $24 per hour. Two workers are willing to work part days if there is not enough demand for them to work full time. lt takes one hour to process one batch. Because of preparation and cleanup time, only six batches can be produced per day. Each batch produces enough food to fill 100 cases. Manufacturing overhead is $6,000 fixed per month plus $15 per case.
Item $ per pound
Lamb 15
Rice 1,20
Saimon 24
Viamlns 45
1. Prepare the following budgets for the period. January through June:________.
a. Sales budget in dollars.
b. Production budget in units.
c. Direct materials purchases budget in pounds.
d. Direct materials purchases budget in dollars.
e. Direct manufacturing labor budget in dollars.
2. Comment on the viability of this business and the advisability of the investor making a $50,000 investment to get it started.
Answers
Answer:
Explanation:
a.
Sales budget = $ 250 per case * 100 cases per batch * 6 batches per day * 20 days a month * 6 months
= $ 18,000,000
b. Production budget in units = 100 cases per batch * 6 batches per day * 20 days a month * 6 months
= 72,000 cases
Production budget including 10 percent inventories
= 72000 + 100*6*20*10%
= 73200 cases
c. Direct materials purchases budget in pounds including 5% inventories
Lamb = 5 pounds per case * (73200 cases + 100*6*20*5% cases )
= 369,000 pounds
Rice Lamb = 10 pounds per case * (73200 cases + 100*6*20*5% cases )
= 738,000 pounds
Salmon = 2 pounds per case * (73200 cases + 100*6*20*5% cases )
= 147,600 pounds
Vitamins = 1 pound per case * (73200 cases + 100*6*20*5% cases )
= 73,800 pounds
d. Direct materials purchases budget in dollars = 369000*15 + 738000*1.2 + 147600*24 + 73800*45
= $ 1,328,400
e. Manufacturing labor budget in dollars = 1 hours per batch * 6 batches per day * 20 days per month * 6 months * ($ 18 per hour for ingredient preparation + $ 24 per hour for cooking and canning ) * 2 workers
= $ 60,480
2. The business requires an investment of $ 1,328,400 + 60,480
= $ 1,388,880 over six months.
This translates to monthly investment of $ 231,480
Therefore $ 50,000 investment is too small to begin with.
Yum! Brands, the parent company of KFC, has pursued an aggressive growth strategy in China. There are now more than 3,700 restaurants in 650 Chinese cities, and KFC has a 40 percent market share of the entire fast-food industry there. Yum! Brands China owns and directly manages about 90 percent of its Chinese stores, so it appears that the company prefers __________ in this market.
Answers
Answer:
Direct Investment
Explanation:
DIRECT INVESTMENT can be defined as an investment in which a company, organisation or business owner decide to venture into business with another country which is know as foreign business enterprise in order to acquire and obtain a controlling interest in the enterprise which is why DIRECT INVESTMENT is a way of controlling the ownership of a business in one country by an another entity which is based in another country.
Most Investors use the DIRECT INVESTMENT way to put money into a business operating in another country.
Therefore based on the information given the company prefers DIRECT INVESTMENT method which is why the parent company of KFC has more than 3,700 restaurants in 650 Chinese cities in which the Brands China owns and directly manages about 90 percent of its Chinese stores.
Hence this method is called the DIRECT INVESTMENT method .
Arlington Company is constructing a building. Construction began on January 1 and was completed on December 31. Expenditures were $4,000,000 on March 1, $3,300,000 on June 1, and $5,000,000 on December 31. Arlington Company borrowed $2,000,000 on January 1 on a 5- year, 12% note to help finance construction of the building. In addition, the company had outstanding all year a 10%, 3-year, $4,000,000 note payable and an 11%, 4-year, $7,500,000 note payable. 96. What are the weighted-average accumulated expenditures
Answers
Answer:
$5,258,333
Explanation:
Arlington Company weighted-average accumulated expenditures
March 1 Expenditure $3,333,333
($4,000,000 ×10/12)
Add June 1 Expenditure $1,925,000
($3,300,000 ×7/12)
Add Dec 31 Expenditure $0
($5,000,000 ×0/12)
Weighted-average accumulated expenditures $5,258,333
($3,333,333+$1,925,000)
Workers in the nation of Argenia prefer managers that forcefully tell employees what to do and how to do it. Conversely, employees in the U.S. prefer to participate in decision making in the workplace. This __________ difference between Argenian workers and U.S. workers represents a management challenge for firms trading in the global market.
Answers
Answer: sociocultural
Explanation:
The options for the question are:
a. geopolitical
b. economic
c. sociocultural
d. regulatory
Sociocultural is used to describe differences between groups of people which relate to the social class and the culture in which they live. The sociocultural environment of a business are the values and the customs that guide the practices of the business.
From the question, employees in Argenia prefer managers who forcefully tell employees what to do and how to do it while the employees in the United States like to participate in the decision making in the workplace. This shows that there are sociocultural differences between the two nations.
The bond has a coupon rate of 6.83 percent, it makes semiannual payments, and there are 4 months to the next coupon payment. A clean price of $1,049 and the par value is $1,000. What is the invoice price
Answers
Answer:
The invoice price for the bond is $1,060.38
Explanation:
Given the following:
PV= Par value = $1,000 ,
CV= Clean Price = $1,049
Coupon Rate per annum = 6.83%
To calculate the Semiannual Coupon Rate= Coupon Rate per annum/2= 3.415%
To calculate Semiannual Coupon= Semiannual Coupon Rate*PV
= 3.415% * $1,000 = $34.15
With an interest accured over 2 months, we calculate it thus:
Accrued Interest = $34.15 * 2/6 = $11.38
To calculate Invoice price:
Invoice Price = CP + Accrued Interest
Invoice Price = $1,049.00 + $11.38
Invoice Price = $1,060.38
The following account balances are taken from the December 31, 2018, financial statements of ABZ Advertising Company. The company uses accrual basis accounting. Advertising Revenue $ 46,482 Cash 41,516 Accounts Receivable 7,296 Interest Expense 2,299 Accounts Payable 5,000 Operating Expenses 37,460 Deferred Revenue 1,178 Equipment 18,048 Income Tax Expense 2,326 The following activities occurred in 2019: Performed advertising services on account, $55,000. Received cash payments on account, $10,400. Received deposits from customers for advertising services to be performed in 2020, $2,500. Made payments to suppliers on account, $5,000. Incurred $45,000 of operating expenses; $39,000 was paid in cash and $6,000 was on account and unpaid as of the end of the year. Which of the following is the journal entry that will be used to record activity #3? Multiple Choice Debit Cash and credit Accounts Receivable for $2,500. Debit Deferred Revenue and credit Advertising Revenue for $2,500. Debit Deferred Revenue and credit Receivable for $2,500. Debit Cash and credit Deferred Revenue for $2,500.
Answers
Answer:
Debit Cash and credit Deferred Revenue for $2,500.
Explanation:
Deferred revenue can be described as an advance payment thta is received a business for services to be performed or goods to be delivered in the future.
This type of revenue will not be reported in the income statement but it will be reported as a liability under the current liabilities in the balance sheet, after debiting the cash account, until when the services are performed or goods are delivered.
For this question, $2,500 deposits received in 2018 from customers for advertising services to be performed in 2020 will not be reported in the 2018 income statement but it will continue to be reported as a liability under the current liabilities in the balance sheet till 2020 when the services are performed.
Thereofe, the correct journal entry that will be used to record activity #3 is Debit Cash and credit Deferred Revenue for $2,500.
The net income reported on the income statement for the current year was $261000. Depreciation was $39900. Account receivable and inventories decreased by $11800 and $34900, respectively. Prepaid expenses and accounts payable increased, respectively, by $1100 and $8300. How much cash was provided by operating activities?
Answers
Answer:
$ 354,800.00
Explanation:
The net cash amount provided by operating activities in the year is determined by adding depreciation to net income as well as the decrease in both accounts receivable and inventories.
There is also the need to to deduct increase in prepaid expenses and add the increase in accounts payable as done below:
net cash provided by operating activities=$261,000+$39,900+$11,800+$34,900-$1,100+$8,300=$354,800.00
Mystic Lake Inc. bottles and distributes spring water. On July 9 of the current year, Mystic Lake reacquired 60,000 shares of its common stock at $42 per share. On September 22, Mystic Lake sold 45,000 of the reacquired shares at $51 per share. The remaining 15,000 shares were sold at $40 per share on November 23.
Required:
A. Journalize the transactions of July 9, September 22, and November 23. Refer to the Chart of Accounts for exact wording of account titles.
B. What is the balance in Paid-In Capital from Sale of Treasury Stock on December 31 of the current year?
C. For what reasons might Mystic Lake have purchased the treasury stock?
Answers
Answer:
A. Journalize the transactions
July 9, purchase of 60,000 treasury stocks
Dr Treasury stocks 2,520,000
Cr Cash 2,520,000
September 22, 45,000 treasury stocks sold
Dr Cash 2,295,000
Cr Treasury stocks 1,890,000
Cr Additional paid in capital 405,000
November 23
Dr Cash 600,000
Dr Additional paid in capital 30,000
Cr Treasury stocks 630,000
B. What is the balance in Paid-In Capital from Sale of Treasury Stock on December 31 of the current year?
Additional paid in capital = $405,000 - $30,000 = $375,000
December 31 balance:
Additional paid in capital $375,000
C. For what reasons might Mystic Lake have purchased the treasury stock?
management believed that the stock was underpricedthey have excess cash and no immediate projects to invest init is a way to increase the price of stocks since lower equity with the same profits means that each remaining stock will earn more returnsHeidee Corp. and Leaudy Corp. have identical assets, sales, interest rates paid on their debt, tax rates, and EBIT. However, Heidee uses more debt than Leaudy. Which of the following statements is CORRECT?
A) Heidee would have the higher net income as shown on the income statement.
B) Without more information, we cannot tell if Heidee or Leaudy would have a higher or lower net income.
C) Heidee would have the lower equity multiplier for use in the Du Pont equation.
D) Heidee would have to pay more in income taxes.
E) Heidee would have the lower net income as shown on the income statement.
Answers
Answer:
E) Heidee would have the lower net income as shown on the income statement.
Explanation:
Heidee and Leaudy have the same Earning Before Interest and Taxes (EBIT).
They both also have the same interest rate paid on debt.
So if Heidee uses more of their debt than Leaudy it means they will incur more interest payment on debt.
This will result in less income for the company.
On the other hand Leaudy uses less debt so their interest expense is low and income is higher.
Heidee would have the lower net income as shown on the income statement.
Nickolas Imports recorded a restructuring charge of $21.6 million during fiscal 2014 related entirely to the closing of its California based operations in San Diego and in Tijuana, Mexico. The company's financial statement footnotes indicated that expected employee separation payments amounted to $16.8 million and that fixed asset write-downs accounted for the remainder. Nickolas had never before incurred restructuring charges. At the end of the year, the company's balance sheet included a restructuring accrual liability of $3,600,000. Calculate the cash flow effect of Nickolas’s restructuring during fiscal 2014.
Answers
Answer: $13,200,000
Explanation:
Nickolas Import recorded a restructuring charge of $21.6 million.
Of this amount, $16.8 million were for employee separation fees.
When calculating the cash flow effect of the restructuring on Nickolas Imports, the $16.8 million is the relevant account. This is because the Asset write downs that make up the rest of the $21.6 million are not cash items neither can they be accrued like normal expenses or Liabilities so they will not be recorded as an Accrual Liability.
The Net Cashflow effect of Nickolas Imports for the year therefore is,
= 16.8 - 3.6
= $13.2 million.
What this means is that with a restructuring accrual liability of $3,600,000 at the end of the year from an initial Balance of $16.8 million, it means that Nickolas Imports must have settled $13,200,000 during the year to be left with that balance of $3,600,000.