Answer:
The amount of the operating cash flow is $108,831
Explanation:
In this question, we are tasked with calculating the amount of the operating cash flow.
Firstly, we calculate the net income.
Mathematically, net income = Sales × % profit margin
From the question, sales = $847,000
% profit margin = 7.3% = 7.3/100 = 0.073
Net income = $847,000 × 0.073 = $61,831
Finally, Operating cash flow = Net income + Depreciation
From the question, depreciation = $47,000
Plugging this alongside the net income,
Operating cash flow = $61,831 + $47,000 = $108,831
The Talbot Company uses electrical assemblies to produce an array of small appliances. One of the assemblies, the XOminus01, has an estimated annual demand of 12 comma 000 units. The cost to place an order for these assemblies is $650, and the holding cost for each assembly unit is approximately $30 per year. The company has 260 workdays per year.
Required:
What are the annual inventory holding costs if Talbot orders using the EOQ quantity?
Answer:
$1,975 per year
Explanation:
The first step is to calculate Economic order quantity using the following formula:
Economic Order Quantity = √2DO / H
Here
A is Annual Demand which is 12,000 Units.
O is Ordering Cost per order $650 per order.
H is Holding or Carrying Cost per unit per year is $30 per unit per year.
By putting values, we have:
Economic Order Quantity = √(2 * 12,000 * $650) / 30 = 131.66 units
Now annual inventory holding costs can be calculated using the following formula:
Inventory Holding Cost = Average Inventory * Holding Cost
Here,
Average Inventory = EOQ /2 = 131.66 / 2 = 66 units
By putting values we have:
Annual Inventory Holding Cost = 66 * 20 = $1,975 per year
Kiona Co. set up a petty cash fund for payments of small amounts. The following transactions involving the petty cash fund occurred in May (the last month of the company's fiscal year).
May 1 Prepared a company check for $350 to establish the petty cash fund.
15 Prepared a company check to replenish the fund for the following expenditures made since May 1.
a. Paid $109.20 for janitorial services.
b. Paid $89.15 for miscellaneous expenses.
c. Paid postage expenses of $60.90.
d. Paid $80.01 to The County Gazette (the local newspaper) for an advertisement.
e. Counted $26.84 remaining in the petty cashbox.
16 Prepared a company check for $200 to increase the fund to $550.
31 The petty cashier reports that $370.27 cash remains in the fund. A company check is drawn to replenish the fund for the following expenditures made since May 15.
f. Paid postage expenses of $59.10.
g. Reimbursed the office manager for business mileage, $47.05.
h. Paid $48.58 to deliver merchandise to a customer, terms FOB destination.
31 The company decides that the May 16 increase in the fund was too large. It reduces the fund by $50, leaving a total of $500.
Required:
1. Prepare journal entries to establish the fund on May 1, to replenish it on May 15 and on May 31, and to reflect any increase or decrease in the fund balance on May 16 and May 31. (Round your answers to 2 decimal places.)
Answer:
1-May
Dr Petty cash 350
Cr Cash 350
15-May
Dr Janitorial services 109.20
Dr Miscellaneous 89.15
Dr Postage expense 60.90
Dr Advertisement expense 80.01
Cr Cash over and short 16.1
Cr Cash 323.16
16-May
Dr Petty cash 200
Cr Cash 200
31-May
Dr Postage expense 47.05
Dr Mileage expense 38.5
Dr Delivery expense 48.58
Cr Cash 134.13
31-May
Dr Cash 50
Cr Petty cash 50
Explanation:
Kiona Co Journal entries
1-May
Dr Petty cash 350
Cr Cash 350
15-May
Dr Janitorial services 109.20
Dr Miscellaneous 89.15
Dr Postage expense 60.90
Dr Advertisment expense 80.01
Cr Cash over and short 16.1
Cr Cash 323.16
(350-26.84)
16-May
Dr Petty cash 200
Cr Cash 200
31-May
Dr Postage expense 47.05
Dr Mileage expense 38.5
Dr Delivery expense 48.58
Cr Cash 134.13
31-May
Dr Cash 50
Cr Petty cash 50
Hewlett-Packard introduced its HP Tablet a few years after Apple launched its original iPad, about the same time Apple introduced its next-generation iPad2. HP Tablet sales were very disappointing, and Hewlett-Packard eventually killed the product. According to the text, the primary reason for the HP Tablet’s failure was due in large part to:_____
a. poor product quality
b. not satisfying customer needs on critical factors.
c. an insignifanct point of difference
d. bad timing
Answer:
d. bad timing
Explanation:
Remember the principle of first entry advantage which says that the first entrant to a market has better advantage of gaining more market share over late entrants.
This was true in the Tablet market which saw Apple's iPad been the very first commercially sold tablet devices. Because of wrong/late timing when Apple introduced its next-generation iPad2 the HP tablet came in struggling to get a part of the already captured tablet market by Apple's iPad.
Consider a hypothetical closed economy in which households spend $0.60 of each additional dollar they earn and save the remaining $0.40. The marginal propensity to consume (MPC) for this economy is0.6 , and the spending multiplier for this economy is . Suppose the government in this economy decides to increase government purchases by $400 billion. The increase in government purchases will lead to an increase in income, generating an initial change in consumption equal to . This increases income yet again, causing a second change in consumption equal to . The total change in demand resulting from the initial change in government spending is .
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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Harry owns a Cadillac and a Porsche. Ryan has always wanted a Porsche and knows Harry owns one. Harry decides to sell his Cadillac and buy a BMW. A mutual friend of Ryan and Harry tells Ryan, "Harry's selling his car." Thinking Harry is selling the Porsche (he does not know he also has a Cadillac), Ryan calls Harry and says, "I'll give you $9,500 for your car." Harry, thinking Ryan is talking about the Cadillac, says, "You've got a deal." On what grounds is the above agreement open for rescission
Answer:
mutual mistake
Explanation:
A mutual mistake happens when all the parties involved in a contract (two or more) are mistaken or do not know the correct information about some specific material fact that is relevant to the contract. In this case, the contract can be rescinded because Harry believes that Ryan wants to buy his Cadillac, while Ryan believes Harry is selling his Porsche.
Since both of them are mistaken and do not know relevant material facts regarding the contract, the contract can be terminated.
The balance sheet of Sand Sportswear reports total equity of $500,000 and $650,000 at the beginning and end of the year, respectively. The return on equity for the year is 20%. What is Sand Sportswear's net income for the year
Answer:
Sand Sportswear's net income for the year is $115,000
Explanation:
In order to calculate the net income for the year we would have to us the following formula:
Return on equity = Net income / Average total equity
Return on equity=20%
Average total equity=($500,000 + $650,000) / 2 = $575,000
Therefore, Net income=Average total equity*Return on equity
Net income=$575,000*20%
Net income=$115,000
Sand Sportswear's net income for the year is $115,000
A company reported total assets at the end of 2017 of $95,000; including cash of $35,000, accounts receivable of $20,000, and inventory of $40,000. It reported total assets at the end of 2018 of $110,000; including cash of $44,000; accounts receivable of $29,000, and inventory of $37,000. Compute the net increase or decrease in cash in 2018. Decrease of $9,000 Increase of $15,000 Increase of $9,000 Decrease of $15,000
Answer:
The correct option is increase of $9,000
Explanation:
The increase or decrease in cash in 2018 could be determined by using the formula below which is coined from the statement of cash flow:
Cash at the end of the year=cash at the beginning plus +increase in cash
cash at the end of 2018 is $44,000 whereas cash at the beginning which is the same at closing balance of 2017 is $35,000
$44,000=$35,000+increase in cash
increase in cash =$44,000-$35,000
increase in cash in 2018=$9,000
Mary and Kay, Inc., a distributor of cosmetics throughout Florida, is in the process of assembling a cash budget for the first quarter of 20x1. The following information has been extracted from the company’s accounting records:All sales are on account. Sixty percent of customer accounts are collected in the month of sale; 35 percent are collected in the following month. Uncollectibles amounting to 5 percent of sales are anticipated, and management believes that only 20 percent of the accounts outstanding on December 31, 20x0, will be recovered and that the recovery will be in January 20x1.Seventy percent of the merchandise purchases are paid for in the month of purchase; the remaining 30 percenare paid for in the month after acquisition.The December 31, 20x0, balance sheet disclosed the following selected figures: cash, $100,000; accounts receivable, $255,000; and accounts payable, $84,000.Mary and Kay, Inc. maintains a $100,000 minimum cash balance at all times. Financing is available (and retired) in $1,000 multiples at an 8 percent interest rate, with borrowings taking place at the beginning of the month and repayments occurring at the end of the month. Interest is paid at the time of repaying principal and computed on the portion of principal repaid at that time. Additional data: January February MarchSales revenue $630,000 $ 720,000 $ 735,000Merchandise purchases 450,000 480,000 600,000Cash operating costs 111,000 90,000 153,000Proceeds from sale of equipment — — 33,000Required:1. Prepare a schedule that discloses the firm’s total cash collections for January through March.2. Prepare a schedule that discloses the firm’s total cash disbursements for January through March.3. Prepare a schedule that summarizes the firm’s financing cash flows for January through March.
Answer:
What is need to be done:
1. Prepare a schedule that discloses the firms total cash collections for January through March.
2. Prepare a schedule that discloses the firms total cash disbursements for January through March.
3. Prepare a schedule that summarizes the firms financing cash flows for January through March.
Explanation:
nted below is information related to Viel Company at December 31, 2020, the end of its first year of operations. Sales revenue $310,000 Cost of goods sold 140,000 Selling and administrative expenses 50,000 Gain on sale of plant assets 30,000 Unrealized gain on available-for-sale debt investments 10,000 Interest expense 6,000 Loss on discontinued operations 12,000 Dividends declared and paid 5,000 Instructions Compute the following: (a) income from operations, (b) net income, (c) comprehensive income, and (d) retained earnings balance at December 31, 2020. (Ignore income tax effects.)
Answer:
Viel Company
(a) Income from operations:
Sales revenue $310,000
Cost of goods sold 140,000
Selling & admin. expenses 50,000
Income from operations $120,000
(b) Net income:
Sales revenue $310,000
Cost of goods sold -140,000
Selling & admin. expenses -50,000
Income from operations $120,000
Gain on sales of plant assets 30,000
Interest Expense -6,000
Loss on discontinued operations -12,000
Net Income $132,000
(c) Comprehensive Income
Sales revenue $310,000
Cost of goods sold -140,000
Selling & admin. expenses -50,000
Income from operations $120,000
Gain on sales of plant assets 30,000
Interest Expense -6,000
Loss on discontinued operations -12,000
Net Income $132,000
Unrealized Gain on Investments -10,000
Comprehensive Income $122,000
(d) Retained Earnings balance at December 31, 2020:
Comprehensive Income $122,000
less Dividends 5,000
Retained Earnings Balance $117,000
Explanation:
a) Income from operations is the income generated from running the primary business and excludes income from other sources. For example, gains or losses from asset disposal and discontinued operations, and interest expense.
b) Net Income is the income from operations, including other sources of income, after adding or deducting non-operating gains or losses and interests.
c) Comprehensive income equals net income and unrealized income, such as unrealized gains or losses, and other non-operating gains and losses.
Someone claiming to be an employee of the employer for whom Bernie works has been handing out flyers denigrating the employer at a local shopping mall. Bernie's employer had its security force search all of the employees' lockers to see if they had any of the flyers. Bernie can file an action against his employer under the 4th amendment if
Answer:
1 if employer is the federal government
2. If employer is the state or local government
Explanation:
Under the 4th amendment, Bernie can file an action against his employer if the employer is a state or local government and also if his employer is a federal government. Bernie can do this because the 4th amendment only applies to government employers and not private employers.
Maxwell and Smart are forming a partnership. Maxwell is investing a building that has a market value of $100,000. However, the building carries a $36,000 mortgage that will be assumed by the partnership. Smart is investing $61,000 cash. The balance of Maxwell's Capital account will be:
Answer:
=$64,000
Explanation:
Max and Smart are forming partnership
Market Value of building = 100,000
The building carried mortgage by the partnership= 36,000
Smart is investing= 61,000
Balance of Maxwell capital Account will be Building value - Mortgage on building
=$100,000 - $36,000
=$64,000
Balance of Maxwell capital Account is equals to =$64,000
Capital account is the account that show the net worth of an enterprise or business in accounting.
James Company began the month of October with inventory of $19,000. The following inventory transactions occurred during the month:
A. The company purchased merchandise on account for $28,000 on October 12. Terms of the purchase were 3/10, n/30. James uses the net method to record purchases. The merchandise was shipped f.o.b. shipping point and freight charges of $540 were paid in cash.
2. On October 31, James paid for the merchandise purchased on October 12.
3. During October merchandise costing $18,600 was sold on account for $28,800.
4. It was determined that inventory on hand at the end of October cost $28,100.
Required:
1. Assuming that the James Company uses a periodic inventory system, prepare journal entries for the above transactions including the adjusting entry at the end of October to record cost of goods sold.
2. Assuming that the James Company uses a perpetual inventory system, prepare journal entries for the above transactions.
Answer:
1. Entries using periodic inventory system
October 12
J1
Purchases $28,000 (debit)
Trade Payable$28,000 (credit)
j2
Freight Charges $540 (debit)
Cash $540 (credit)
October 31
Trade Payable $28,000 (debit)
Cash $28,000 (credit)
October 31
Trade Receivable $28,800 (debit)
Revenue $28,800 (credit)
October 31
Inventory $28,100 (debit)
Cost of Goods Sold $28,100 (credit)
2. Entries using periodic inventory system
October 12
J1
Merchandise $28,000 (debit)
Trade Payable$28,000 (credit)
j2
Freight Charges $540 (debit)
Cash $540 (credit)
October 31
Trade Payable $28,000 (debit)
Cash $28,000 (credit)
October 31
J1
Trade Receivable $28,800 (debit)
Revenue $28,800 (credit)
J2
Cost of Sales $18,600 (debit)
Merchandise $18,600 (credit)
October 31
Merchandise $28,100 (debit)
Cost of Goods Sold $28,100 (credit)
Explanation:
1. Entries using periodic inventory system
With periodic system, inventory valuation is done at end of a specific period.
2. Entries using periodic inventory system
Perpetual system is the method of recalculating the value of goods held after each transaction
Esquire Comic Book Company had income before tax of $1,550,000 in 2021 before considering the following material items: 1. Esquire sold one of its operating divisions, which qualified as a separate component according to generally accepted accounting principles. The before-tax loss on disposal was $395,000. The division generated before-tax income from operations from the beginning of the year through disposal of $610,000. 2. The company incurred restructuring costs of $60,000 during the year. Required: Prepare a 2021 income statement for Esquire beginning with income from continuing operations. Assume an income tax rate of 25%. Ignore EPS disclosures.
Answer:
Esquire Comic Book Company
Income Statement
For the Year Ended December 31, 2021
Operating income $1,550,000
Restructuring costs ($60,000)
Income from continuing operations b/ Taxes $1,490,000
Income tax expense ($372,500)
Income from continuing operations $1,117,500
Discontinued operations:
Operating income $610,000Loss on disposal ($395,000)Income tax on discontinued operations ($53,750)Income from discontinued operations $161,250
Net income $1,278,750
Explanation:
Income from discontinued operations must be reported separately, but any restructuring costs must be included as operational expenses.
1. Identify each account as asset (A), liability (L), or equity (E).2. Identify whether the account is increased with a debit (DR) or credit (CR).3. Identify whether the normal balance is a debit (DR) or credit (CR).a. Interest Revenueb. Accounts Payablec. Common Stockd. Office Suppliese. Advertising Expensef. Unearned Revenueg. Prepaid Renth. Utilities Expensei. Dividendsj. Service Revenue Requirements
Answer: Please refer to Explanation
Explanation:
.a. Interest Revenue. This is EQUITY. It increase with a CREDIT. Normal Balance is CREDIT.
Interests Revenue is earned like revenue and as such is credited. In the balance sheet it will be with Equity as it increases the Retained Earnings of a firm.
b. Accounts Payable. LIABILITY.
Increases by CREDIT.
Normal Balance is CREDIT.
Accounts Payable are the result of buying goods on account meaning the firm owes the entities in question. It is credited to show an increase.
c. Common Stock. EQUITY.
Increases by CREDIT.
Normal Balance is CREDIT.
As a Capital balance, common stock is credited to show and increase and debited to show a decrease because it signifies that the business owes the holders/owners.
d. Office Supplies. ASSET
Increase by DEBIT.
Normal Balance is CREDIT.
As an asset, Office Supplies is recorded in the debit section and is debited to show increase.
e. Advertising Expense. EQUITY.
Increases by DEBIT.
Normal Balance is DEBIT.
Increases by DEBIT.
Advertising as an expense is taken from the Revenue. This makes it am Equity item. When it is debited, it increases and this normal Balance reflects a debit balance.
f. Unearned Revenue. LIABILITY.
INcrease is CREDITED
Normal Balance is CREDIT.
Unearned Revenue is a liability because the company owes performance to an entity for work that they have already been paid for. As such it's balance is increased by a Credit.
g. Prepaid Rent. ASSET.
Increase by DEBIT.
Normal Balance is DEBIT.
Prepaid rent means that the company paid for rent in advance and so it owed till the rent can be apportioned to a particular period. For this reason it is an asset and increases by DEBIT.
h. Utilities Expense. EQUITY.
Increases by DEBIT.
Nomal Balance is DEBIT.
As an expense that goes from the revenue it is an equity item and increases by debit. Normal Balance is also debit.
i. Dividends. EQUITY.
Increases by DEBIT.
Normal Balance is DEBIT.
Dividends are paid from Retained Earnings and as such belong in the Equity section. Dividends increase by being debited.
j. Service Revenue. EQUITY.
Increase by CREDIT.
Normal Balance is CREDIT.
As Revenue for the business it belongs in the EQUITY section. It is added to retained earnings and as it is revenue, it increases when it is credited.
Before closing the office for the day, Lisa took a phone call from a corporate customer who wanted to make a reservation for three nights at Wildwood Inn. The total cost came to $473.00. The customer asked Lisa to charge the total amount to the company's account. Which T-Account or T-Accounts listed below correctly show how a sale on account should be recorded?
Answer:
A sale on account would be recorded with the following T-Accounts:
Sales Revenue - increases, so the amount is credited.
Dr. Cr.
$473.00
Accounts Receivable - is an asset, and increases, so the amount is debited.
Dr. Cr.
$473.00
On January 1, Year 1, a company issues $39.1 million of 9% bonds, due in 20 years, with interest payable semiannually on June 30 and December 31 each year. The proceeds will be used to build a new ride that combines a roller coaster, a water ride, a dark tunnel, and the great smell of outdoor barbeque, all in one ride.
If the market rate is 8%, calculate the issue price. (FV of $1, PV of $1, FVA of $1, and PVA of $1) (Use appropriate factor(s) from the tables provided.
Bond Characteristics AmountFace amount Interest payment Market interest rate Periods to maturity Issue price
A. If the market rate is 9%, calculate the issue price. (FV of $1, PV of $1, FVA of $1, and PVA of $1).
Bond Characteristics AmountFace amount Interest payment Market interest rate Periods to maturity Issue price
If the market rate is 10%, calculate the issue price. (FV of $1, PV of $1, FVA of $1, and PVA of $1).
Bond Characteristics AmountFace amount Interest payment Market interest rate Periods to maturity Issue price
Answer:
$42,969,487
$ 39,100,000
$ 35,745,399
Explanation:
The price of the bond using the pv formula in excel is given thus:
=-pv(rate,nper,pmt,fv)
rate is the market rate divided by 2 since interest is payable twice a year
nper is 20year multiplied by 2 which gives 40
pmt is the semiannual coupon=$39,100,000*9%*6/12=$1,759,500.00
fv is the face value of $39,100,000
market rate of 8%
=-pv(8%/2,40,1759500,39100000)=$42,969,487
market rate of 9%
=-pv(9%/2,40,1759500,39100000)=$ 39,100,000
market rate of 10%
=-pv(10%/2,40,1759500,39100000)=$35,745,399
The classified balance sheet for a company reported current assets of $1,754,244, total liabilities of $817,540, common stock of $1,180,000, and retained earnings of $148,260. The current ratio was 2.7. What is the total amount of noncurrent assets?
Answer:
$391,556
Explanation:
The values given are:
Total liabilities= $817,540
Common stock= $1,180,000
Retained earnings= $148,260
Current assets= $1,754,244
Therefore the non-current assets can be calculated as follows
Total liabilities+Common stock+Retained earnings-Current assets
$817,540+$1,180,000+$148,260-$1,754,244
= $2,145,800-$1,754,244
= $391,556
Hence the total amount of non-current assets is $391,556
In a Q system, the demand rate for strawberry ice cream is normally distributed, with an average of 305 pints per week. The lead time is 5 weeks. The standard deviation of weekly demand is 14 pints. Refer to the standard normal table for z-values.
a. The standard deviation of demand during the 5-week lead time is ______ pints. (Enter your response rounded to the nearest whole number.)
b. The average demand during the 6-week lead time is _____pints. (Enter your response as aninteger.)
c. The reorder point that results in acycle-service level of 96 percent is _____pints. (Enter your response rounded to the nearest whole number.)
Z 0.00 0.01 0.02 0.03 0.04 0.05 0.06 0.07 0.08 0.09
0.0 0.5000 0.5040 0.5080 0.5120 0.5160 0.5199 0.5239 0.5279 0.5319 0.5359
0.1 0.5398 0.5438 0.5478 0.5517 0.5557 0.5596 0.5636 0.5675 0.5714 0.5754
0.2 0.5793 0.5832 0.5871 0.5910 0.5948 0.5987 0.6026 0.6064 0.6103 0.6141
0.3 0.6179 0.6217 0.6255 0.6293 0.6331 0.6368 0.6406 0.6443 0.6480 0.6517
0.4 0.6554 0.6591 0.6628 0.6664 0.6700 0.6736 0.6772 0.6808 0.6844 0.6879
0.5 0.6915 0.6950 0.6985 0.7019 0.7054 0.7088 0.7123 0.7157 0.7190 0.7224
0.6 0.7258 0.7291 0.7324 0.7357 0.7389 0.7422 0.7454 0.7486 0.7518 0.7549
0.7 0.7580 0.7612 0.7642 0.7673 0.7704 0.7734 0.7764 0.7794 0.7823 0.7852
0.8 0.7881 0.7910 0.7939 0.7967 0.7996 0.8023 0.8051 0.8079 0.8106 0.8133
Answer: a. 31.304. b. 1525. c. 1589.17
Explanation:
Lead time = 5 weeks
Standard deviation of weekly demand = 14 pints
a. ✓L × Standard deviation Weekly
= ✓5 × 14
= 2.236 × 14
= 31.304
b. Average demand during the 5-week lead time will be:
= Leadtime × weekly demand
= 5 × 305
= 1525
c. Note that the Z value at 96% service level is 2.05
R=dL+z*sd*sqrt(L)= (305 × 5)+ (2.05 × 14 × ✓5)
= 1525 + 64.17
= 1589.17
Audio Zone Co. needs to prepare pro forma financial statements for the next fiscal year. To do so, the company must forecast its total overhead cost. The actual machine hours and total overhead cost are presented below for the past six months.
Month Total Overhead Machine Hours
Jan. $6,288 1,980
Feb. 6,460 2,090
Mar. 5,987 1,745
Apr. 5,559 1,560
May 6,032 1,865
June 6,341 2,012
Using the high-low method, total monthly fixed overhead cost is calculated to be:________.
Answer:
$2,907
Explanation:
the formulas to calculate costs using the high-low method are:
variable cost = (highest activity cost - lowest activity cost) / (highest activity units - lowest activity units) fixed costs = highest activity cost - (variable cost per unit x highest activity units)variable cost = ($6,460 - $5,559) / (2,090 - 1,560) = $901 / 530 units = $1.70 per unit
fixed costs = $6,460 - ($1.70 x 2,090) = $6,460 - $3,553 = $2,907
Barbara owns a manufacturing plant with four facilities (North, South, East, and West) in the state of Indiana. The workers at one of those facilities, North, have just decided to join a union. The union negotiates with Barbara and receives average wages that are 5% higher than the workers at the South, East, and West facilities. This wage differential is a likely example of:
Answer:
Union power
Explanation:
The difference in wages is as a result of Union power because the North now belongs to a labor union that protects their interest. A labor union is an organization that plays the role of an intermediary between their members and their employers. The workers in the North through the union are able to negotiate for better wages. Through collective bargaining, the union gives workers In the North the power to request for better work pay than workers in the east, West and South facilities.
The payback period provides information to managers that can be used to help a.control the risks associated with the uncertainty of future cash flows. b.minimize the impact of an investment on a firm's liquidity problems. c.control the effect of the investment on performance measures. d.control the risk of obsolescence. e.All of these choices are correct.
Answer:
e. All of these choices are correct.
Explanation:
The payback period is the time that takes an investment to reach the break-even point. In other words, it is the amount of time that it takes an investor to pay back for the investment, hence the name.
The payback period results from dividing the amount of investment by the estimated cash flow from the investment.
During this period, the manager of an investment can carry out all of the activities listed in the question.
The annual premium for a $ 15 comma 000 15,000 insurance policy against the theft of a painting is $ 300 300. If the (empirical) probability that the painting will be stolen during the year is 0 . 03 .03, what is your expected return from the insurance company if you take out this insurance?
Answer:
P(x)=0.97
E(x)=$150
Explanation:
The expected return from the insurance company if the I nsurance is taken out will be:
A.Let assume x is the random variable for the amount received from the Insurance company.
Therefore:
x =$300-$0
=$300-$15,000
P(x)=1-0.03=0.97
P(x)=0.03
B.
E(x)=0.97×$300-$14,700×0.03
=$291-$441
=$150
Multiple-step income statement and balance sheet The following selected accounts and their current balances appear in the ledger of Kanpur Co. for the fiscal year ended June 30, 20Y7:
Cash $92,000
Retained Earnings $381,000
Accounts Receivable 450,000
Dividends 300,000
Inventory 370,000
Sales 8,925,000
Estimated Returns Inventory 5,000
Cost of Goods Sold 5,620,000
Office Supplies 10,000
Sales Salaries Expense 850,000
Prepaid Insurance 12,000
Advertising Expense 420,000
Office Equipment 220,000
Depreciation Expense—Store Equipment 33,000
Accumulated Depreciation—Office Equipment 58,000
Miscellaneous Selling Expense 18,000
Store Equipment 650,000
Office Salaries Expense 540,000
Accumulated Depreciation—Store Equipment 87,500
Rent Expense 48,000
Accounts Payable 38,500
Insurance Expense 24,000
Customers Refunds Payable 10,000
Depreciation Expense—Office Equipment 10,000
Salaries Payable 4,000
Office Supplies Expense 4,000
Note Payable (final payment due 2034) 140,000
Miscellaneous Administrative Exp. 6,000
Common Stock 50,000
Interest Expense 12,000
Required:
a. Prepare a multiple-step income statement.
b. Prepare a retained earnings statement.
Answer:
Net Profit 1345,000
Retained Earnings $ 1426,000
Explanation:
The multi step income statement shows the sections of the income statement separately such as the operating expenses and non operating expenses .
Kanpur Co.
Multi step Income Statement
For year ended June 30, 20Y7:
Sales 8,925,000
Cost of Goods Sold 5,620,000
Estimated Returns Inventory (5,000)
Adjusted Cost OF Goods Sold 5,615,000
Gross Profit $ 3310,000
Less Operating Expenses
Rent Expense 48,000
Selling And Administrative Expenses
Office Supplies Expense 4,000
Sales Salaries Expense 850,000
Miscellaneous Selling Expense 18,000
Depreciation Expense—Store Equipment 33,000
Office Salaries Expense 540,000
Depreciation Expense—Office Equipment 10,000
Advertising Expense 420,000
Miscellaneous Administrative Exp. 6,000
Total Operating Expenses 1881,000
Operating Income 1381,000
Other Expense
Insurance Expense 24,000
Interest Expense 12,000
Total Non Operating Expenses 36,000
Net Profit 1345,000
Kanpur Co.
Statement of Retained Earnings
For year ended June 30, 20Y7:
Retained Earnings $381,000
Add Net Profits 1345,000
Less Dividends 300,000
Retained Earnings For year ended June 30, 20Y7 $ 1426,000
Taggart Technologies is considering issuing new common stock and using the proceeds to reduce its outstanding debt. The stock issue would have no effect on total assets, the interest rate Taggart pays, EBIT, or the tax rate. Which of the following is likely to occur if the company goes ahead with the stock issue?
a. The ROA will decline.
b. Taxable income will decrease.
c. The tax bill will increase.
d. Net income will decrease.
e. The times interest earned ratio will decrease.
Answer:
Option c. is correct
Explanation:
A stock is an investment that denotes an ownership share in a company. Purchasing a company’s stock means purchasing a small piece of that company that denotes a share.
In the given question, if the company goes ahead with the stock issue that would not affect total assets: the interest rate Taggart pays, EBIT, or the tax rate then the tax bill will increase.
Bookmark question for later Zoey is the CEO of a corporation she organized herself, and the corporation has 15 shareholders. The company operates in several states, as well as outside of the U.S. Her business consists mostly of training services for in-home medical care personnel. Her company would be a __________ corporation
Answer:
Professional corporation
Explanation:
A professional corporation is a type of corporation that is established by professional, majorly licensed individuals; they could include doctors, attorneys or architects. They mostly provide services that are related to the profession they practice. For example, architects establish an architectural firm to provide architectural services.
Professional corporations are usually established based on the laws binding the profession or the laws of the state. Most professional entrepreneurs can set up a professional corporation and can be established by one or more professionals.
In most professional corporations, the shareholders are usually only licensed individuals of the service rendered by the professional company.
Therefore, considering the information, Zoey's corporation would be a professional corporation.
Gangsta Industries,INC produces a variety of anti-crime and safety products such as burglar alarms, smoke detectors, surveillance cameras, and specialty locks. Gangsta sells to households, businesses, and government agencies. They have found that each market group requires a different marketing strategy. Gangsta would probably benefit from departmentalization by:
Answer:
Customer type.
Explanation:
From the scenario described in the question above, Gangsta Industries would benefit from departmentalization by type of consumer.
In this type of departmentalization, the company groups its activities according to its common customer base, or the types of customers that the organization serves.
This is a strategy that enables the company to better serve a group of specific customers based on their problems, needs and preferences, which results in a more targeted and effective service.
Post the entries in the general journal below to the Accounts Receivable account in the general ledger and to the appropriate accounts in the accounts receivable ledger for Calderone Company.
Assume the following account balances at January 1, 2019
Accounts Receivable (control account) $7,880
Accounts Receivable-John Gibrone 4, 780
Accounts Receivable-Jim Garcia 2,090
Accounts Receivable-June Lin. 1,01
General Journal
Date 2019 Description Post Debit Credit
Ref
Jan 8 Cash 470
Accounts Receivable/John Gibrone 470
Received partial payment or account from John Gibrone
20 Sales Returns and Allowances 300
Sales Tax Payabl 24
Accounts Receivable/3im Garcia 324
Accept return of defective merchandis, Credit
Memorandum 121; original sale
made on Sales S1ip 11102 of
December 27, 2018 1.
Prepare a schedule of accounts recelvable for Calderone Company at January 31, 2019. 2. Should the total of your accounts receivable schedule agree with the balance of the Accounts Receivable account in the general ledger at January 31, 2019?
Answer:
1. Prepare a schedule of accounts receivable for Calderone Company at January 31, 2019.
Since there is not enough room here, I prepared an excel spreadsheet. Since we are not told the credit terms of the sales, I assumed all the sales were more not past due.
2. Should the total of your accounts receivable schedule agree with the balance of the Accounts Receivable account in the general ledger at January 31, 2019?
Of course, the balance of the accounts receivable control account should equal the total balance of the accounts receivable schedule. Even if some accounts are written off (bad debt), both the accounts receivable schedule and the general ledger accounts receivable should show that write off.
Explanation:
In the airline industry, frequent flyer programs, ticket kiosks, and e-ticketing are all examples of capabilities that are __________ but no longer __________. a. valuable; rare b. rare; valuable c. valuable; causally ambiguous d. socially complex; rare
Answer:
a. valuable; rare
Explanation:
There are various examples of capabilities like
1. Frequent flyer programs are nothing but while booking an online flight you just need to sign up so that the chances of earning reward points could be high
2. The ticket kiosks refer to the self service in which you can purchase the tickets related to the entertainment
3. E-ticketing is online ticketing which you can store online instead of keeping it with you in a paper form
These are valuable examples but there are no longer rare
Hence, the first option is correct
The comparative balance sheet of ConnieJo Company, for December 31, Years 1 and 2 ended December 31 appears below in condensed form: Year 2 Year 1 Assets Cash $45,000 $53,500 Accounts receivable (net) 51,300 58,000 Inventories 147,200 135,000 Investments 0 60,000 Equipment 493,000 375,000 Accumulated depreciation—equipment (113,700) (128,000) Total Assets $622,800 $553,500 Liabilities and Stockholders' Equity Accounts payable $61,500 $42,600 Bonds payable, due Year 4 0 100,000 Common stock, $10 par 250,000 200,000 Paid-in capital in excess of par—common stock 75,000 50,000 Retained earnings 236,300 160,900 Total liabilities and stockholders' equity $622,800 $553,500 The income statement for the current year is as follows: Sales $629,700 Cost of goods sold 341,800 Gross profit $287,900 Operating expenses: Depreciation expense $24,700 Other operating expenses 75,300 Total operating expenses 100,000 Income from operations $187,900 Other income: Gain on sale of investment $5,000 Other expense: Interest expense 12,000 (7,000) Income before income tax $180,900 Income tax 64,100 Net income $116,800 Additional data for the current year are as follows: a. Fully depreciated equipment costing $39,000 was scrapped, no salvage, and equipment was purchased for $157,000. b. Bonds payable for $100,000 were retired by payment at their face amount. c. 5,000 shares of common stock were issued at $15 for cash. d. Cash dividends declared were paid $41,400.
Answer:
Kindly check attached picture
Explanation:
Kindly check attached picture for detailed statement using the direct method
Celine Dion Company issued $600,000 of 10%, 20-year bonds on January 1, 2017, at 102. Interest is payable semiannually on July 1 and January 1. Dion Company uses the straight-line method of amortization for bond premium or discount.
Instructions
Prepare the journal entries to record the following.
A) The issuance of the bonds.
B) The payment of interest and the related amortization on July 1, 2017.
C) The accrual of interest and the related amortization on December 31, 2017.
Answer:
A) The issuance of the bonds.
January 1, 2017, bonds are issued
Dr Cash 612,000
Cr Bonds payable 600,000
Cr premium on bonds payable 12,000
B) The payment of interest and the related amortization on July 1, 2017.
July 1, 2017, first coupon is paid
Dr Interest expense 29,700
Dr Premium on bonds payable 300
Cr Cash 30,000
C) The accrual of interest and the related amortization on December 31, 2017.
December 31, 2017, accrued interest payable
Dr Interest expense 29,700
Cr interest payable 29,700
Explanation:
$600,000 of 10%, 20-year bonds at 102, interest is paid semiannually ($600,000 x 10% x 1/2 = $30,000)
straight line amortization method is used to amortize bond premium
bond premium = $12,000 / 40 coupons = $300 amortized with each coupon payment