Answer:
The total change in demand resulting from the initial change in government spending is $1,000 billion
Explanation:
Marginal propensity to consume (MPC) = As with every additional increase in income, consumption increases by 0.60.
MPC = change in Consumption / Change in Income = [tex]\Delta C/\Delta Y[/tex]
[tex]\Delta C/\Delta Y[/tex] = 0.60 / 1
MPC = 0.60.
Spending or Expenditure Multiplier = 1 ÷ (1 - MPC)
Spending Multiplier = 1 ÷ (1 - 0.6) = 1 ÷ 0.4 = 2.5.
The consumption will increase by MPC, with 1 dollar increased, consumption increased by 0.60
Therefore, with $400 billion increase, Consumption will increase by 0.60 × 400 billion = $240 billion.
This increases income, causing a change in consumption at second times equal $240 billion × 0.6 = $144 billion.
The total change in income by this increment in government spending equals as:
Change in Demand = Multiplier × change in G
Change in Demand= $400 billion × 2.5 = $1,000 billion.
The total change in demand resulting from the initial change in government spending is $1,000 billion
Marginal propensity to consume = change in Consumption / Change in Income
Marginal propensity to consume = 0.60 / 1
Marginal propensity to consume = 0.60
Spending Multiplier = 1 / (1 - MPC)
Spending Multiplier = 1 / (1 - 0.6)
Spending Multiplier = 1 / 0.4
Spending Multiplier = 2.5.
Consumption will increase = 0.60 × 400 billion
Consumption will increase = $240 billion.
Consumption will increase second time = $240 billion × 0.6
Consumption will increase second time = $144 billion.
Change in Demand = Multiplier × Spending Multiplier
Change in Demand = $400 billion × 2.5
Change in Demand = $1,000 billion
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In Year 1, Sandy and Chris have adjusted gross income of $200,000. During the year, they provided more than half of the support for both of their unmarried adult children, Megna and Britt. Both children live near the colleges they are attending. Megna is a 25-year-old full-time graduate student with no earned income. Britt is a 22-year-old part-time student with $15,000 earned income from a part-time job. What is the total amount of child tax credit (including credit for other dependents), if any, that Sandy and Chris can claim on their Year 1 joint income tax return
Answer: $1,000
Explanation:
Even though Megna and Britt are above the age of 17 and as such do not qualify for the child tax credit, they qualify for the Credit for Other Dependants.
Under this Credit, $500 can be deducted per dependant if certain conditions are fulfilled such as the dependents having a valid American identity number such as ATIN, ITIN, or SSN.
The dependants have to be your children or elderly parents.
With $500 in credit available per dependant and Sandy and Chris having 2 dependants in Megna and Britt, they can get a credit of $1,000 for the both of them.
What are commercial bank?
Answer:
A commercial bank is a type of bankthat provides services such as accepting deposits, making business loans, and offering basic investment products that is operated as a business for profit.
Sally makes deposits into a retirement account every year from the age of 30 until she retires at age 65. a) If Sally deposits $ 1100$1100 per year and the account earns interest at a rate of 9 %9% per year, compounded annually, how much does she have in the account when she retires? b) How much of that total amount is from Sally's deposits? How much is interest?
Answer:
a)
Balance of account at retirement = $237,281.83
b)
Total Deposited amount = $38,500
Interest Amount = $198,781.83
Explanation:
A fix periodic payments for the specific period of time is the annuity payment. Deposit of $1,100 per year in retirement account is annuity payment.
a)
We can calculate the balance of account on retirement by using following formula
Future Value of Annuity = P x ( 1 + r )^n - 1 / r
Where
P = Periodic payments = $1,100
r = 9%
n = 65 years - 30 years = 35 years
Placing values in the formula
Balance of account at retirement = $1,100 X ( 1 + 9% )^35 - 1 / 9%
Balance of account at retirement = $237,281.83
b)
Total Deposited amount = $1,100 x 35 = $38,500
Interest Amount = Balance of account at retirement - Total Deposited amount = $237,281.83 - $38,500 = $198,781.83
Ben has two options this weekend. He could work at his job and earn $8 per hour for three hours, or he could go to an exhibit at the art museum for that three hours. A ticket for the event costs $30. What is the opportunity cost of the event?
Answer:
Opportunity cost= -$54
Explanation:
Giving the following information:
He could work at his job and earn $8 per hour for three hours, or he could go to an exhibit at the art museum for those three hours. A ticket for the event costs $30.
The opportunity cost is the "cost" of not taking other alternatives.
Opportunity cost= total revenue - economic profit
Opportunity cost= -30 - 24= -$54
FOR BUS LAW I
Certain that Al Gore would emerge victorious from the post-election chaos, Melvin's Decorations ordered 50,000 "President Al Gore" medallions from Medallions, Inc. on December 1, 2000 for $5 per medallion. Delivery was to be on January 10, 2001. By that date, the value of the medallions had fallen to $1 per medallion. Melvin's Decorations refused to accept the medallions because it was clear that George Bush would keep the presidency, and Medallions, Inc. sued for Melvin’s breach. What can Medallions recover? (Assume that there was nothing wrong with the medallions and that Melvin's did breach the contract).
A.
Medallions' lost profit on the deal.
B.
The difference between the contract price and the market price.
C.
Either A or B.
D.
Neither A nor B.
Answer:
A. Medallions' lost profit on the deal.
Explanation:
Since Melvin's Decorations breached the contract they had with Medallions, the non breaching party is entitled to sue for compensatory monetary damages. Courts will generally assign compensatory damages that cover the losses incurred due to the contract breach, i.e. the amount of money that medallion would have made as a profit if Melvin's decoration had purchased and paid for the medallions.
A company is considering two projects. Project A Project B Initial investment $300,000 $300,000 Cash inflow Year 1 $60,000 $90,000 Cash inflow Year 2 $60,000 $80,000 Cash inflow Year 3 $60,000 $80,000 Cash inflow Year 4 $60,000 $50,000 Cash inflow Year 5 $60,000 $70,000 What is the payback period for Project B
Answer:
Payback Period = 3 years
Explanation:
Years Cash flow(Out flow) Net cash flow Cumulative cash flow
0 -300,000 - -300,000
1 90,000 90,000 -210,000
2 80,000 80,000 -130,000
3 80,000 80,000 -50,000
4 50,000 50,000 0
5 70,000 70,000 70,000
Payback Period = 3 years
It means it will take 3 years of period to payback the project B Initial investment of $300,000
when ups invested in a foreign tech startup , ally commerce inc ., to give ups greater access to online sales,it was exemplifying
Answer:
Direct Investment is the correct answer to the given question .
Explanation:
The Direct investment is also known as direct foreign investment. In the Direct investment People invested the money into the company that operates in the some other country.
The main objective of direct investment to get the powerful presence in the business processes also the lengthy-term existence in the different nation.As the UPS participated in the Ally Commerce Inc i.e a global tech startup, to offer it better exposure to online purchasing it is example of direct investment .Other things the same, an increase in the U.S. interest rate causes U.S. net capital outflow to a. rise, so supply in the market for foreign-currency exchange shifts right. b. rise, so demand in the market for foreign-currency exchange shifts right. c. fall, so supply in the market for foreign-currency exchange shifts left.
Answer:
b. rise, so demand in the market for foreign-currency exchange shifts right.
Explanation:
An increase in the interest rates leads to a rise in the capital outflow as savings and investment lead to more net capital outflow. This is the movement of the assets on the company and is considered to be bad for the economy and leads to undesirable changes in the supply of the foreign currency as a shift in the demands of the consumers. This may result in political and economic instability.
Consider the market for iced coffee. Suppose that the price of an iced coffee falls from $4.25 to $3.50. Assuming that the point on the graph below corresponds to the initial price of $4.25, move the point to a new position on the curve to show the impact of this price change (holding everything else constant).
Answer:
The fall in the price of iced coffee from $4.25 to $3.50 will cause demand to grow.
Explanation:
This is because the market demand curve for any good is downward sloping: the higher the price, the lower the quantity demanded, and the lower the price, the higher the quantity demanded.
So this fall in price will move the equilibrium quantity (the point where supply and demand meet) to move to a point on the demand curve that is below the previous point.
Economist A says all of the following: The economy needs expansionary fiscal policy to remove it from a recessionary gap. Government should either raise its _____________ or cut ___________________. I believe the government spending multiplier is ____________ than the tax multiplier, so I favor _____________________.
Answer:
The correct answer is:
Government should either raise its expenditures or cut taxes. I believe the government spending multiplier is greater than the tax multiplier, so I favor this policy.
Explanation:
To begin with, an "expansionary fiscal policy" represents the tool that a government has in order to give response to a recessionary context in where the economy is falling down by decreasing its production. That is why, that in this type of policy the actions that are to be taken comprehends the reduction of taxes that the public sector collects from the private sector and also to increase the public expenditures that the government has with the purpose to estimulate the demand and offer of goods.
Sparky Corporation uses the FIFO method of process costing. The following information is available for February in its Molding Department: Units: Beginning Inventory: 34,000 units, 100% complete as to materials and 55% complete as to conversion. Units started and completed: 119,000. Units completed and transferred out: 153,000. Ending Inventory: 34,500 units, 100% complete as to materials and 35% complete as to conversion. Costs: Costs in beginning Work in Process - Direct Materials: $52,000. Costs in beginning Work in Process - Conversion: $57,850. Costs incurred in February - Direct Materials: $349,625. Costs incurred in February - Conversion: $608,150. Calculate the cost per equivalent unit of materials.
Answer:
The cost per equivalent unit of materials is $2.28
Explanation:
The Concept of Equivalent units measures the number of units complete to the extent of the input elements added during production.
The FIFO method in Process costing Accounts for Costs only incurred during the Manufacturing Period. Also, The Opening Work In Process is Assumed to be completed first.
The First Step is to Calculate the Total Equivalent Units of Production for Raw Materials :
To finish Opening Work In Process (34,000 × 0%) = 0
Started and Completed ((153,000 - 34,000) × 100% ) = 119,000
Closing Work In Process (34,500 × 100%) = 34,500
Total Equivalent Units of Production = 153,500
The Next and Final Step is to calculate the cost per equivalent unit of materials.
Cost per equivalent unit = Total Cost During the Current Period / Total Equivalent Units of Production
= $349,625 / 153,500
= $2.2776872
= $2.28 (2 decimal places)
Conclusion :
The cost per equivalent unit of materials is $2.28
Brief Exercise 233 Kinney Company purchased a truck for $66,000. The company expected the truck to last four years or 100,000 miles, with an estimated residual value of $8,000 at the end of that time. During the second year the truck was driven 27,000 miles. Compute the depreciation for the second year under each of the methods below and place your answers in the blanks provided.Units-of-activity $_________
Double-declining-balance $_________
Answer:
$15,660
$16,500
Explanation:
Depreciation expense using the double declining method = Depreciation factor x cost of the asset
Depreciation factor = 2 x (1 / useful life)
2 x (1 / 4 ) = 0.5
The depreciation expense in the first year = 0.5 x $66,000 = $33,000
Book value = $66,000 - $33,000 = $33,000
The depreciation expense in the second year = 0.5 x $33,000 = $16,500
The Units of production method = (miles driven in the second year / estimated total miles that can be driven) x (Cost of asset - Salvage value)
(27,000 / 100,000) × ($66,000 - $8,000)
= 0.27 x $58,000 = $15,660
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You are an owner of a bakery, and you meet with other neighborhood bakery owners. In an attempt to increase sales, you collectively decide to lower prices by 10%. Which of the following are consequences of this price change?
A. The supply of fresh baked goods will decrease.
B. The quantity supplied of fresh baked goods will decrease.
C. Demand for processed baked goods will decrease.
D. The supply of fresh baked goods will increase.
E. The demand for fresh baked goods will not change.
F. The demand for fresh baked goods will increase.
Answer:
The quantity supplied of fresh baked goods will decrease ( B )
Demand for processed baked goods will decrease. ( C )
The demand for fresh baked goods will not change ( E )
Explanation:
When the neighbourhood bakery owners agree to lower prices of goods by 10% it will not have any effect on the demand for fresh baked goods hence the demand for fresh baked goods will not change because the demand for fresh baked goods have an in-elastic curve
Also since there is s drop in price the quantity supplied by the suppliers will decrease. while The demand for processed baked goods will decrease because of the substitute it has in fresh baked goods that just got its price slashed by 10%
Felix and Freddie are married with annual taxable income of $230,000. They pay income tax according to the following schedule: Over-----But Not Over-----Tax Rate $0............$43,850..............15% $43,850.....$105,950.............??? $105,950....$361,450............31% If the total personal income tax they pay is $58,074, which of the following comes closest to the tax rate for income between $43,850 and 105,950 (the middle tax rate)?
a. 21%
b. 24%
c. 25%
d. 225
e. 23%
Answer:
a. 21%
Explanation:
Felix and Freddie
Tax paid for first will be :
$43,850 ×15%
=$6,577.5
Taxable income $124,050
($230,000-$105,950)
Taxable payable $38,455.5
($124,050*31%)
Remaining tax payable $13,041
($58,074-$6,577.5-$38,455.5)
÷
Remaining taxable income $62,100
($105,950-$43,850)
Tax rate between $43,850 and 105,950 will be:
$13,041÷$62,100
=0.21×100
=21%
According to this case study, what is an upcoming key technology that will be used in retail stores to improve customer service? And how it is currently being used? What will be the role of smartphones in the future of shopping? Support your claim with a reference.
Answer:
1. According to the case study (copy attached) "the upcoming technology that will be used in retail stores to improve customer service is the Scan As You Go Mobile Devices".
2. It is currently being used by sales officers in some shopping malls to scan items on the spot and let customers pay without going through the cash registers.
It is also being used to help customers take advantage of discounts and coupons on items being purchased. The effect is that customers spend 10% when they shop using this technology.
3. In the future, the customers will be able to check out using their smartphones.
4. According to the case study, the technology referred to in 3 above is already pioneered by Apple Stores.
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In each of the following cases, what is the effect on the short-run aggregate supply (SRAS) curve? An increase in firm costs A. does not shift the SRAS curve. B. shifts the SRAS curve upward. C. shifts the SRAS curve downward. An increase in the money supply A. does not shift the SRAS curve. B. shifts the SRAS curve downward. C. shifts the SRAS curve upward. An increase in consumption A. shifts the SRAS curve upward. B. does not shift the SRAS curve. C. shifts the SRAS curve downward.
Answer: 1. B. shifts the SRAS curve upward.
2. A. does not shift the SRAS curve.
3. B. does not shift the SRAS curve.
Explanation:
1. When Firm costs rise, the input cost for Producers rises and they respond by reducing production so as to reduce the cost of production. This reduction causes a reduction in Supply that forces the short-run aggregate supply (SRAS) curve to shift left (upward).
2. This change in the Money Supply means that there will be more money for households to spend. This increases demand but does not have any direct influence on the short-run aggregate supply (SRAS) curve.
3. An Increase in consumption means that there is greater demand for goods and services in an Economy. Indirectly this will cause producers to ramp up production to meet these needs but directly, there is no influence on the short-run aggregate supply (SRAS) curve.
Newport Industries is one of the first producers of a unique consumer product. The company has chosen a low-price strategy, hoping this will enable them to quickly attract many customers while discouraging potential competitors from entering the market. Newport's approach to pricing is a classic example of the skimming strategy.A. TrueB. FalseThe ability to integrate computers into the design and manufacture of products has had the greatest impact on production techniques in recent years.A. TrueB. FalseIn the evaluation of the promotion, it's best to establish a promotional strategy that can reach multiple targets rather than developing a separate promotion mix for each target group.A. TrueB. FalseBright Electronics has found it needs to reorganize, including a significant trim of its middle management. This action will likely result in:_______.
a. acquiring additional firms.b. flattening the organization and empowering employees, allowing them to get closer to the customer.c. increasing the size of its traditional departments to handle 24/7 operations.d. centralizing its decision making to better control its total quality management program.Empowerment means:______.a. giving employees the authority to make decisions.b. making certain that employees always defer to management when making decisions.c. hiring employees that do not require training due to the costly nature of this activity.d. asking employees to write the policies which govern their jobs.School Days Centers specialize in helping students with difficulties. With locations around the country, each center consists of a manager and several tutor and counselors. The counselors and tutor have a great deal of flexibility to design programs specifically for individual students. In fact, these first-line employees are considered to be the key people in the organization, and the manager's main function is to assist these employees in matters such as scheduling and securing necessary materials. This type of arrangement suggests that School Days is an inverted organization.A. TrueB. False
Answer:
1. False
2. False
3. d. centralizing its decision making to better control its total quality management program
4. a.
5. True
Explanation:
1. Remember, a skimming strategy does the opposite–where a company chooses the highest possible price not the lowest price for their product when entering the market.
2. Indeed, this has impacted on production techniques in recent years. For example, from labour intensive car factories in the past we now have fully automated car factories that require very few workforce.
3. Remember, centralization results when there are fewer people in the line of authority. Therefore, if Brights Electronics decision to reorganize and significantly trim its middle management would result in centralized decision making and a better control its total quality management program.
4. Note that the promotional mix involves target based marketing, therefore each target market may have unique characteristics. And to attract each target market would involve establishing a promotional strategy that can reach multiple targets rather than developing a separate promotion mix for each target group.
5. An inverted organization is one that has a reversal from the normal line of authority found in most organization. Instead of top to bottom it now bottom to top. This implies that the manager who normally would play major role in deciding strategies to be taken doesn't, but the bottom line employees performs that responsibility. Thus, School Days Center can be rightly called an inverted organization.
esterday, Berryman Investments was selling for $50 per share. Today, the company completed a 7-for-2 stock split. If the total market value was unchanged by the split, what is the price of the stock today? Select the correct answer. a. $15.59 b. $12.99 c. $14.29 d. $16.89 e. $11.69
Answer:
The correct option is C, $14.29
Explanation:
A 7-2 stock split means that 7 shares now have the value of 2 shares held previously.
This simply means that a stockholder who had 2 shares before the stock split now has 7 shares.
The price of the share after the stock split the value of 2 shares before stock split divided by 7 shares i.e ($50*2)/7=$ 14.29
The correct option from the multiple choices is $ 14.29
s) A system has four processes and five types of allocatable resources. The current allocation and maximum needs are as follows: Allocated Maximum Available Process A 2 1 0 2 2 4 2 2 3 3 3 2 x 2 3 Process B 3 1 1 0 2 3 3 6 1 2 Process C 2 1 0 2 1 3 2 3 3 1 Process D 1 1 0 1 0 1 2 3 2 1 What is the smallest value of x for which this is a safe state? Show all steps.
Answer:
The smallest value of x is 5 which leads to a safe state.
Explanation:
Solution
Given that:
Process Available Maximum Request = Max-Available
A [2 ,1 ,0 ,2, 2] [4, 2,2, 3, 3] [2,1,2,1,1]
B [3 ,1, 1, 0 ,2] [3 ,3 ,6 ,1 ,2] [0,2,5,1,0]
C [2 ,1 ,0 ,2 ,1 ] [3 ,2 ,3 ,3 ,1] [1,1,3,1,0]
D [1, 1, 0, 1, 0 ] [1, 2, 3, 2 ,1 ] [0,1,3,1,1]
Available = 3,2,x,2,3 ⇒ x has to be determined.
Now
consider x=1 then Available = 3,2,1,2,3
It can't satisfy A,B,C,D since the minimum value of x among those is 2
Consider x=2 then Available = 3,2,2,2,3
It can't satisfy B,C,D since the minimum value of x among those is 3
Thus
consider x=3 then Available = 3,2,3,2,3
It can't satisfy D since the minimum value of x among those is 5
Then
consider x=5 then Available = 3,2,5,2,3
It can satisfy A,B,C,D
Therefore, the minimum value of x is 5. So, that it leads to a safe state.
A computer's operating system serves as a link between humans and machines. A resource allocator is another title for it.
Solution:-
Given that:-
Process Available Maximum Request = Max-Available
A [2 ,1 ,0 ,2, 2] [4, 2,2, 3, 3] [2,1,2,1,1]
B [3 ,1, 1, 0 ,2] [3 ,3 ,6 ,1 ,2] [0,2,5,1,0]
C [2 ,1 ,0 ,2 ,1 ] [3 ,2 ,3 ,3 ,1] [1,1,3,1,0]
D [1, 1, 0, 1, 0 ] [1, 2, 3, 2 ,1 ] [0,1,3,1,1]
Available = 3,2,x,2,3 ⇒ x has to be determined.
Now , consider x=1 then Available = 3,2,1,2,3
It can't satisfy A,B,C,D since the minimum value of x among those is 2
Consider x=2 then Available = 3,2,2,2,3
It can't satisfy B,C,D since the minimum value of x among those is 3
Thus, consider x=3 then Available = 3,2,3,2,3
It can't satisfy D since the minimum value of x among those is 5
Then ,consider x=5 then Available = 3,2,5,2,3
It can satisfy A,B,C,D
Therefore, the minimum value of x is 5. So, that it leads to a safe state.
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Vertical Analysis Two income statements for Cornea Company follow: Cornea Company Income Statements For Years Ended December 31 2019 2018 Fees earned $680,000 $576,000 Operating expenses 482,800 420,480 Operating income $197,200 $155,520 Prepare a vertical analysis of Cornea Company's income statements. Enter percents as whole numbers.
Answer:
Cornea Company
Income Statements For Years Ended December 31
2019 2018
Amount Percent Amount Percent
Fees earned $680,000 100% $576,000 100%
Operating expenses $482,800 71% $420,480 73%
Operating income $197,200 29% $155,520 27%
Operating expense working
2019= 482,800/680,000 * 100/1= 71% = 0.71
2018= 420,480/576,000 * 100/1= 73% = 0.73
Operating Income working
2019= 1 - 0.71 = 0.29 = 29%
2018= 1 - 0.73 = 0.27= 27%
Berk Company produces three products: Tic, Tac, and Toe. Tic requires 160 machine setups, Tac requires 150 setups, and Toe requires 190 setups. Berk has identified an activity cost pool with allocated overhead of $32,000 for which the cost driver is machine setups. How much overhead is assigned to the Tic product?
Answer:
Overhead assigned to Tic= $10,240
Explanation:
Activity-based costing is a form of absorption costing where overheads are charged to product using cost drivers.
Under this method, overheads are first analyzed and categorized by the activities responsible for them and then charged to product based on the amount of benefits enjoyed using cost drivers.
Activity rate per driver is calculated as:
Activity overhead for the period / Total cost drivers for the period
Set -up activity overhead = $32,000
Total expected cost drivers for activity set up = sum of the set ups for the three products
Total set ups= 160 +150 + 190 = 500 set ups
Overhead rate per set up
= $32,000/500 set ups
= $64 per set up
Overhead assigned to Tic = Overhead rate per set up × No of setups for TIC
= $64 per setup ×160=$10,240
Overhead assigned to Tic= $10,240
Adjustment for Uncollectible Accounts Below is the aging of receivables schedule for Evers Industries. Aging of Receivables Schedule July 31 Customer Balance Not Past Due 1-30 Days Past Due 31-60 Days Past Due 61-90 Days Past Due Over 90 Days Past Due Subtotals 1,050,000 600,000 220,000 115,000 85,000 30,000 Boyd Industries 36,000 36,000 Hodges Company 11,500 11,500 Kent Creek Inc. 6,600 6,600 Lockwood Company 7,400 7,400 Van Epps Company 13,000 13,000 Totals 1,124,500 607,400 233,000 121,600 96,500 66,000 Percentage uncollectible 1% 3% 12% 30% 75% Allowance for Doubtful Accounts 106,106 6,074 6,990 14,592 28,950 49,500 Assume that the allowance for doubtful accounts for Evers Industries has a credit balance of $8,240 before adjustment on July 31. Journalize the adjusting entry for uncollectible accounts as of July 31. If an amount box does not require an entry, leave it blank. July 31
Answer:
bad debt expense 97,866 debit
Allowance for Doubtful Accounts 97,866 credit
Explanation:
We are given the table for the aging method from which we extract the
Total for Allowance for Doubtful Accounts 106,106
Now, as currently the allwoance for doubtful accounts has a balance of 8,240 we need to adjust to make up the difference
106,106 adjusted balance - 8,240 current balance = 97,866 adjustment
we will credit the allowance and recognzie this amount of bad debt expense
This way we are matching our net account receivables with our estimation of what we expect to collect
Entry for Jobs Completed; Cost of Unfinished Jobs The following account appears in the ledger prior to recognizing the jobs completed in January: Work in Process Balance, January 1 $10,100 Direct materials 82,110 Direct labor 88,580 Factory overhead 46,560 Jobs finished during January are summarized as follows: Job 210 $40,920 Job 224 $47,740 Job 216 25,010 Job 230 84,120 a. Journalize the entry to record the jobs completed. If an amount box does not require an entry, leave it blank. b. Determine the cost of the unfinished jobs at January 31. $
Answer:
a.Entry to record the jobs completed.
Job 210 $40,920 (debit)
Job 224 $47,740 (debit)
Job 216 $25,010 (debit)
Job 230 $84,120 (debit)
Work - In Process $197,790 credit)
b. $29,550
Explanation:
a.Entry to record the jobs completed.
Recognize the Cost of Manufacture in the Jobs completed and De-recognize the costs from the Work In progress Account
b. the cost of the unfinished jobs
The cost of the unfinished jobs = Opening Work-In process + Costs Added during the year - Finished Jobs at the end
Opening Work-In process $10,100
Add Manufacturing Costs :
Direct materials $82,110
Direct labor $88,580
Factory overhead $46,560 $217,240
Less Finished Jobs :
Job 210 $40,920
Job 224 $47,740
Job 216 $25,010
Job 230 $84,120 ($197,790)
Cost of the unfinished jobs $29,550
Thomlin Company forecasts that total overhead for the current year will be $11,597,000 with 164,000 total machine hours. Year to date, the actual overhead is $7,833,000 and the actual machine hours are 83,000 hours. The predetermined overhead rate based on machine hours is Round the factory overhead rate to the nearest dollar before multiplying by the number of hours. a.$94 per machine hour b.$48 per machine hour c.$71 per machine hour d.$140 per machine hour
Answer: c.$71 per machine hour
Explanation:
The Pre-determined Overhead rate is the rate Thomlin Company forecasted that the company would incur total overhead for the current year.
They forecasted total overhead of $11,597,000 with 164,000 total machine hours.
Since the rate is based on Machine Hours the rate would be,
= Total Forecasted Overhead / Total Forecasted Machine Hours
= 11,597,000 / 164,000
= 70.71
= $71
g edna had an accident while competing in a rodeo. She sustained facial injuries that required cosmetic surgery. While having the surgery done to restore her appearance, she had additional surgery done to reshape her chin, which was not injured in the accident. The surgery to restore her appearance cost $ 9,000 and the surgery to reshape her chin cost $ 6,000. How much of Edna's surgical fees will qualify as a deductible medical expense (before application of the 10% -of-AGI floor)?
Answer:
$9000 is a deductible medical expense.
Explanation:
Cosmetics surgery is necessary and deductible if the reason it was done was to enhance her appearance arising from a form or kind of abnormality, personal injury or a disease that disfigures.The $9000 cost that was paid because of the surgery due to the accident is deductible because the surgery was necessary while the $6000 paid for the unnecessary cosmetic surgery to reshapen the chin is not a deductible medical expense.
A corporate CEO wished to relay good news about the prospect of a new technology being created, but was reluctant to do so. Instead, the CEO announces that the firm has decided to increase its dividend. This story is illustrative of what view of dividend relevancy
Answer:
Information signaling
Explanation:
Information signalling is defined as the various actions a firm takes that communicates it's financial outlook. For example if a firm releases a dividend policy it communicates the value of the firm's stock.
In this scenario the CEO announced increase in the firm's dividend. This will convey to investors that the company has a competitive advantage which will result in additional income, so dividends are being raised.
It is an indirect way of announcing good news about the prospect of a new technology being created.
On June 30, 2011, Cole Inc., exchanged 3,000 shares of Stone Corp. $30 par value common stock for a patent owned by Gore Co. The Stone stock was acquired in 2009 at a cost of $80,000. At the exchange date, Stone common stock had a fair value of $45 per share, and the patent had a net carrying value of $160,000 on Gore's books. Cole should record the patent at:
Answer:
$135000
Explanation:
Cole should record the patent at $135000. The intangible asset is recorded at the price at which it was purchased. Net carrying value of $160000 in the books of seller is not useful.
At the time of purchase of intangible asset, the fair value of stone stock exchanged was $45.
So the patent cost is =
3000 shares × $45 per share = $135000.
Cole should record the patent at this value.
Proposal #2 would establish local collection centers throughout the region to decrease the time it takes to convert credit payments that are mailed in by check to cash. It is estimated that establishing these collection centers would reduce the average collection time by 2 days.If the company currently averages $60,000 in collections per day, how many dollars will this suggested cash management system free up?If all freed up dollars would be used to pay down debt that has an interest rate of 5%, how much money could be saved each year in interest expense?Do the numbers suggest that this new system should be implemented if its total annual cost is $5200? Explain.
Answer: a. $120,000
b. $6,000
c. Yes
Explanation:
a. It is said that the collection centres would help reduce the collection time by 2 days and that every day $60,000 comes in.
If the proposal will reduce the amount of time taken to collect by 2 days then that means that the amount freed up is the amount that they would have collected in two days had it not been for the system.
That amount would be,
= $60,000 * 2
= $120,000
b. If they used this free up cash to pay off a debt that was accumulating 5% per year then the 5% will be saved.
The amount saved therefore is,
= 120,000 * 5%
= $6,000
By retiring a $120,000 that was accruing $6,000 a year, the proposal has enabled that $6,000 to be saved instead.
c. The cost of implementing this proposal is $5,200 per year and yet the savings it gives in interest is $6,000.
As the savings are higher than the cost, the number definitely suggest that the project should be implemented because it is more beneficial than it costs.
Which of the following statements regarding changes in accounting principles is not true? Most changes in accounting principles are retroactively reported. Most changes in accounting principles are only reported in current periods when the principle change takes place. Changes in accounting principles are allowed when new principles are preferable to old ones. Consistency is one of the biggest concerns when a change in accounting principle is undertaken.
Answer:
Most changes in accounting principles are only reported in current periods when the principle change takes place.
Explanation:
Accounting principle can be defined as a general guideline to be followed by accountants or financial institutions when they record and report their financial transactions.
A change in an accounting principle involves a change in an accounting method used.
For instance, an accountant switching between First In, First Out (FIFO) to Last In, First Out (LIFO) method of inventory valuation or by using another depreciation method.
Additionally, an accounting principle should only be changed, if it's applicable to the accounting framework being used such as Generally Accepted Accounting Principles (GAAP) and International Financial Reporting Standards (IFRS).
Also, it is important to state in the footnotes of the financial statements a full disclosure to highlight the justification for the preferred change and financial implications of this change.
The following are true about the change in accounting principles;
1. Most changes in accounting principles are retroactively reported.
2. Changes in accounting principles are allowed when new principles are preferable to old ones.
3. Consistency is one of the biggest concerns when a change in accounting principle is undertaken.
The following transactions occurred during the month of June 2021 for the Stridewell Corporation. The company owns and operates a retail shoe store. Issued 75,000 shares of common stock in exchange for $375,000 cash. Purchased office equipment at a cost of $68,750. $27,500 was paid in cash and a note payable was signed for the balance owed. Purchased inventory on account at a cost of $150,000. The company uses the perpetual inventory system. Credit sales for the month totaled $255,000. The cost of the goods sold was $127,500. Paid $3,250 in rent on the store building for the month of June. Paid $1,800 to an insurance company for fire and liability insurance for a one-year period beginning June 1, 2021. Paid $108,375 on account for the merchandise purchased in 3. Collected $51,000 from customers on account. Paid shareholders a cash dividend of $3,750. Recorded depreciation expense of $1,375 for the month on the office equipment. Recorded the amount of prepaid insurance that expired for the month. Required: Prepare journal entries to record each of the transactions and events listed above. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)
Answer:
Stridewell Corporation
Journal Entries:
Debit Cash $375,000
Credit Common Stock $375,000
To record issue of 75,000 shares of common stock.
Debit Office Equipment $68,750
Credit Cash Account $27,500
Credit Notes Payable $41,250
To record purchase of office equipment.
Debit Inventory $150,000
Credit Accounts Payable $150,000
To record purchase of inventory on account
Debit Accounts Receivable $255,000
Credit Sales Revenue $255,000
To record sales on account.
Debit Cost of Goods Sold $127,500
Credit Inventory $127,500
To record cost of goods under the perpetual inventory system.
Debit Rent Expense $3,250
Credit Cash Account $3,250
To record payment of rent for June.
Debit Prepaid Insurance $1,800
Credit Cash Account $1,800
To record payment for insurance.
Debit Accounts Payable $108,375
Credit Cash Account $108,375
To record payment on account.
Debit Cash Account $51,000
Credit Accounts Receivable $51,000
To record cash collection from customers.
Debit Dividends $3,750
Credit Cash Account $3,750
To record payment of cash dividend.
Debit Depreciation Expense $1,375
Credit Accumulated Depreciation $1,375
To record depreciation charge for the month.
Debit Insurance Expense $150
Credit Prepaid Insurance $150
To record expired insurance for the month.
Explanation:
a) Journal Entries show the accounts to be debited and credited in the general ledger. They are the first accounting records of business transactions and events.
b) Insurance Expense for June is equal to $1,800/12 = $150 per month. This amount is deducted from the Prepaid Insurance to reduce the balance.