Answer:
$300,00
Explanation:
In a situation where the interest rate is said to be 10% the amount that Martin must provide in order to fund this bequest will therefore be:
Bequest first year $9,000/(Interest rate 10%-
Increase of 7 % per year)
Hence:
$9,000/0.03
=$300,000
Therefore $300,00 will be provided to fund the bequest
You are going to set your budget for your utility (gas/water/sewer and electricity) expenses for the next year. You have recorded your utility expenses for the past year. That information is provided below. Evaluate and discuss whether the data collected was appropriate and representative of the information that is required to analyze the problem presented in the problem setting.Utilities Utilities Period Gas, Water, Sewer ElectricityMar, 2011 125.47 65.68Apr, 2011 70.89 61.5May, 2011 72.58 59.93Jun, 2011 80.91 72.17Jul, 2011 66.08 101.35Aug, 2011 84.58 118.04Sep, 2011 80.39 80.07Oct, 2011 88.12 60.76Nov, 2011 86.5 58.7Dec, 2011 130.06 70.22Jan, 2012 131.34 65.5Feb, 2012 121.2 67.71Mar, 2012 98.96 67.99
Answer:
Based on the data set given one cannot determine the next year's expenses for utilities and this is because the data set does not provide the information regarding the number of people that have consumed the utilities in the past and the per unit rate of consumption as well
Explanation:
Given data
Gaswater sewer electricityexpenses done for utilitymonth of usageTo identify the future expenses in utility the following data has to be considered :
The total expenses done in the past year for each facility, The total number of people consuming the utility to identify per person usage,The Past 2-3 years or even more utility rates per unit to identify the trend of inflation.Based on the data to be considered above the utility usage can be calculated using the following :
projected per unit rate of each utilitytotal number of people who will be consuming utilities in each monthThe projected future expenses for each utility can be gotten by combining the aboveBased on the data set given one cannot determine the next year's expenses for utilities and this is because the data set does not provide the information regarding the number of people that have consumed the utilities in the past and the per unit rate of consumption as well.
Go to the internet and find a news article published within the last month that discusses changes in demand and supply of particular goods/services, summarize key points and post in the Discussions area. Refer to week 2 content materials and use specific economic vocabulary within your summary, i.e. demand, quantity demanded, determinants of demand, shifts in demand curve, etc. Likewise with supply. Also you should discuss changes in equilibrium quantity and equilibrium price.
Answer: The explanation is provided below
Explanation:
Below article is the summary of the acceleration of inflation in the emerging markets that was published in 2018.
According to the article, inflation in an economy is caused by an adverse supply shock or as a result of the expansionary fiscal policy or the expansionary monetary policy.
In an adverse supply shock, total quantity of basic goods will reduce drastically causing the aggregate demand to rise exponentially and therefore, push prices higher and then gradually lead to inflation.
Also, the continous and eventual implementation of the expansionary fiscal or monetary policy through continous tax cuts or by increasing government spending or reducting interest rates, lead into significant increase in the aggregate demand and as a result, prices rise eventually resulting in hyperinflation in the economy. This will also lead to increase in the real GDP of the economy.
Different tools in the monetary policy framework can be used to control inflation such as government securities,
the cash reserve ratio, interest rates. To reduce recession, government utilize automatic stabilizer in order to boost the economy.
Process Costing using the Weighted-Average Method
Compute the equivalent units of production using the weighted-average method.
Compute the cost per equivalent unit using the weighted-average method.
Assign costs to units using the weighted-average method.
Prepare a cost reconciliation report
Hayword, Inc. uses weighted-average costing and ha two departments mixing and packaging 2 The following information relates to work in the mixing department for the month of July: 4 Work in process, July 1: 5 Units in process 6 Percent completed with respect to materials 7 Percent completed with respect to conversion 8 Cost in the beginning inventory: 9 Materials cost 10Conversion cost 11 Units started into production during the period 12 Costs added to production during the period: 13 Materials cost 14 Conversion cost 15 Work in process, July 31: 16Units in process 17 Percent completed with respect to materials 18 Percent completed with respect to conversion 19 20 Use the data to answer the following 21 221. Compute equivalent units 300 60% 40% $10,500 $6,750 6,200 332,150 407,645 450 40% 30%
Answer:
First we find the equivalent units. Then Cost Per Equivalent Units. We apply these costs to the units to find the total cost. Then we compare the given costs with the found costs to see the difference.
Explanation:
Equivalent Units
Particulars Units % of Completion Equivalent Units
Materials Conversion Materials Conversion
Units transfered 6050 100 1000 6050 6050
Ending WIP 450 40 30 180 135
Equivalent Units 6230 6185
Units Completed And Transferred
Particulars Units
Beginning WIP 300
Units started in production 6200
Total Units Available 6500
Less Ending WIP 450
Units Completed and Transferred 6050
Cost Per Equivalent Unit
Particulars Materials Conversion
Beginning WIP $10,500 $6,750
Costs added 332,150 407,645
Total Costs 342,650 414,395
Equivalent Units 6230 6185
Cost Per Equivalent Unit 342,650 / 6230 414,395/ 6185
=$ 55 =$ 67
Costs Assigned
Ending WIP $ 18945
Materials ( 180 * 55) = $ 9900
Conversion ( 135 * 67) = $ 9045
Units Completed And Transferred Out : $ 738100
Materials ( 6050 *55) = $ 332750
Conversion ( 6050 * 67) = $ 405350
Cost Reconciliation
Cost to be accounted for
Beginning WIP ( $10,500 + $6,750 )= $ 17250
Cost added ( 332,150+ 407,645)= $ 739795
Total Costs $ 757045
Ending WIP $ 18945
Units Completed And Transferred Out : $ 738100
Total Costs $ 757045
Which is the same.
A semi-variable cost:
A. Increases and decreases directly and proportionately with changes in volume.
B. Changes in response to a change in volume, but not proportionately.
C. Increases if volume increases, but remains constant if volume decreases.
D. Changes inversely in response to a change in volume.
Answer:
B. Changes in response to a change in volume, but not proportionately.
Explanation:
A semi variable cost (or mixed cost) is a cost or expense that is partially fixed (does not change according to production output) and is also partially variable (changes according to production output). An example of semi variable costs are utilities which have a fixed minimum level per month and they increase as production output increases. Another example is the cost of a car, where insurance and lease payments are fixed but gas and maintenance expenses vary according to the number of miles driven.
You purchased GARP stock one year ago at a price of $67.67 per share. Today, you sold your stock and earned a total return of 18.79 percent. The stock paid dividends of$2.92 per share over the year. What was the capital gains yield on your investment
Answer:
14.48%
Explanation:
The capital gains yield on the investment is increase in share price divided by the initial price paid to acquire the share a year ago.
The total return formula can be used to figure the price the stock was when sold as below:
total return =P1-Po+D/Po
P1 is the current price which is unknown
Po is the initial price of $67.67
total return is 18.79%
D is the dividend of $2.92
0.1879=P1-67.67+2.92/67.67
0.1879*67.67=P1-64.75
12.72=P1-64.75
P1=12.72+64.75
P1=77.47
Capital gains yield=(77.47 -67.67)/67.67=14.48%
For each of the following cases determine the ending balance in the inventory account. (Hint: First, determine the total cost of inventory available for sale. Next, subtract the cost of the inventory sold to arrive at the ending balance.) a. Jill’s Dress Shop had a beginning balance in its inventory account of $40,000. During the accounting period, Jill’s purchased $75,000 of inventory, returned $5,000 of inventory, and obtained $750 of purchases discounts. Jill’s incurred $1,000 of transportation-in cost and $600 of transportation-out cost. Salaries of sales personnel amounted to $31,000. Administrative expenses amounted to $35,600. Cost of goods sold amounted to $82,300. b. Ken’s Bait Shop had a beginning balance in its inventory account of $8,000. During the accounting period, Ken’s purchased $36,900 of inventory, obtained $1,200 of purchases allowances, and received $360 of purchases discounts. Sales discounts amounted to $640. Ken’s incurred $900 of transportation-in cost and $260 of transportation-out cost. Selling and administrative cost amounted to $12,300. Cost of goods sold amounted to $33,900.
Answer:
Jill's Dress Shop:
Ending Inventory 27,950
Ken's Bait Shop:
Ending Inventory 10,340
Explanation:
Jill's Dress Shop:
Beginning 40,000
Purchases 75,000
Returned (5,000)
Discounts (750)
Freight-In 1,000
Cost of Goods Sold (82,300)
Ending Inventory 27,950
Ken's Bait Shop
Beginning 8,000
Purchases 36,900
Allowances (1,200)
Discounts (360)
Freight-In 900
Cost of Goods Sold (33,900)
Ending Inventory 10,340
The freight-out and sales discount have an impact in net sales and selling expenses they do not constitute part of the inventory as are relatedto the sale of the goods rather than acquisition.
Answer:
Determination of Ending Inventory:a) Beginning Inventory = $40,000
Purchases = $75,000
Purchases Return = ($5,000)
Purchases Discounts = ($750)
Freight-in = $1,000
Cost of Goods Available$110,250
less cost of goods sold ($82,300)
Ending Inventory $27,950
b) Beginning Inventory = $8,000
Purchases = $36,900
Purchases Return = ($1,200)
Purchases Discounts = ($360)
Freight-in = $900
Cost of Goods Available $44,240
less cost of goods sold ($33,900)
Ending Inventory $10,340
Explanation:
a) Ending inventory represents the value of goods available for sale and held by a company at the end of an accounting period. It is calculated as follows: Beginning Inventory + Net Purchases - Cost of Goods Sold (or COGS) = Ending Inventory. The value of goods available for sale at the end of the accounting period is important in reporting the financial status of any trading or producing company.
b) The cost of goods available for sale includes the beginning inventory, the net purchases of inventory, and the freight-in during the period.
What is a project, and what are its main attributes? How is a project different from what most people do in their day-to-day jobs? Discuss the importance of top management commitment and the development of standards for successful project management. Provide examples to illustrate the import
Answer:
In simple words, The project is a collective organization that is structured to accomplish a common goal. The best characteristics of the project are scale, purpose, money, staff, costs, deadlines.
Projects vary from daily operations-to-day activities in the way of ultimate goal, time frame, budget , resources, squad and concentrate. Day-to-day activities follow formed safety procedures and also have particular long-term objectives, while projects have particular short-term objectives, tight income, money and energy. Projects have been carried over by a particular team formed for a specific project.
The importance of senior managers in the project is of vital importance as they work as the guiding and monitoring authority for all the parties involved in the project. Due to this factor majority organisations gives the top mangers some monetary shares in relation to success of the project.
Boren Company reported the following information for the current year: Sales (625 units) $37,800, direct materials and direct labor $14,600, other variable costs $13,200, and fixed costs $6,000. "What is the company's break-even point in units?"
Answer:
Break-even point in units= 375 units
Explanation:
Giving the following information:
Sales (625 units) $37,800
direct materials and direct labor $14,600
other variable costs $13,200
fixed costs $6,000.
To calculate the break-even points in units, we need to use the following formula:
Break-even point in units= fixed costs/ contribution margin per unit
Unitary selling price= 37,800/625= $60.48
Unitary varaible cost= (13,200 + 14,600)/625= $44.48
Break-even point in units= 6,000/ (60.48 - 44.48)
Break-even point in units= 375 units
You just won the $87 million Ultimate Lotto jackpot. Your winnings will be paid as $2,900,000 per year for the next 30 years. If the appropriate interest rate is 6.2 percent, what is the value of your windfall
Answer:
Explanation:
In order to calculate the value of your windfall we would have to calculate the following formula:
Value of windall=P×[1-(1÷(1+r)^n)]÷r
According to the given data we have the following:
Interest rate per annum=6.20%
Number of years= 30
Number of compoundings per per annum=1
Payment per period (P)=$2,900,000
Therefore, Value of windall=$2,900,000×(1-(1÷(1+6.2%)^30))÷6.2%
Value of windall=$39,078,091.71
The value of your windfall is $39,078,091.71
At December 31, Idaho Company had the following ending account balances:
Retained Earnings $250,000
Preferred Stock ($100 par, 7% cumulative, 10,000 authorized,
5,000 issued and outstanding) 500,000
Treasury Stock 40,000
Paid-In Capital in Excess of Par—Common Stock 625,000
Paid-In Capital in Excess of Par—Preferred Stock 50,000
Common Stock ($5 par value, 500,000 shares authorized,
105,000 issued) 525,000
Required:
Prepare the Stockholders' equity section of the balance sheet in good form with all of the required disclosures.
Answer:
Balance of Stockholder's Equity at December 31 is $1,910,000.
Explanation:
This will appear as follows
Idaho Company
Details $
Stockholder's Equity:
Common Stock 525,000
Preferred Stock 500,000
Additional Paid-In Cap. - Common Stock 625,000
Additional Paid-In Cap. - Preferred Stock 50,000
Treasury Stock (40,000 )
Retained Earnings 250,000
Balance at December 31 1,910,000
The stockholders' equity or the share capital of the company is the amount of capital that is the ownership of investors of shareholders of the company over the assets and debts of the company.
The equity shareholder's are the true owners of the company as they are legible for decision making and voting's.
The stockholders' equity section of the balance sheet includes: common shares, preferred shares, retained earnings, and treasury stock.
The stockholders' equity section of the balance sheet is prepared in the image attached below.
To know more about stockholders' equity, refer to the link:
https://brainly.com/question/13278063
BJT Corporation is owned 40 percent by Bill, 30 percent by Jack, and 30 percent by the Trumpet Partnership. Bill and Jack are father and son. Jack has a 10 percent interest in Trumpet Partnership. What is Jack’s total direct and constructive ownership of BJT Corporation under Section 267?
Answer:
33%
Explanation:
By virtue of been having 10% interest in Trumpet Partnership, Jack has a 10% share out of 30 percent owned by Trumpet Partnership (0.10 * 30=3%).
Additionally, his own 30 percent is still pay of his direct and constructive ownership of BJT Corporation, thus making his total direct stand at 33%.
Deere is a global manufacturer and distributor of agricultural, construction, and forestry equipment. Suppose it reported the following information in its 2017 annual report. (In millions)
2017 2016 Inventories (LIFO) $2,267 $2,999
Current asset 32,910
Current liabilities 11,711
LIFO reserve 1,389
Cost of goods sold 15,661
Compute Deere inventory turnover for 2017 ratio.
Answer:
5.95
Explanation:
Deere inventory turnover for 2017 ratio is:
Formula for Inventory Turnover Ratio= Cost of Goods sold / Average Inventory
Where Average Inventory = (Previous Inventory + Current Inventory) / 2
= ($2,267 + $2,999) / 2
=$5,266 / 2
=$2,633
Average Inventory = $2,633
Therefore, Inventory Turnover Ratio = $15,661 / $2,633 = 5.9479 = 5.95
Deere Inventory Turnover for 2017 Ratio is 5.95.
Pearson Motors has a target capital structure of 45% debt and 55% common equity, with no preferred stock. The yield to maturity on the company's outstanding bonds is 10%, and its tax rate is 40%. Pearson's CFO estimates that the company's WACC is 14.50%. What is Pearson's cost of common equity
Answer:
21.45%
Explanation:
Pearson motors has a target capital structure of 45% debt and 55% common equity
The yield to maturity is 10%
Tax rate is 40%
WACC is 14.50%
First of all we have to find the tax cost of debt
Tax cost of debt= Yield to maturity×(1-tax rate)
= 8×(1-25/100)
= 8×(1-0.25)
= 8×0.75
= 6%
The next step is to calculate the common equity
Therefore, the common equity can be calculated as follows
WACC= Respective cost×Respective weight
14.50= (6×0.45)+(0.55×common equity)
14.50= 2.7+(0.55×common equity)
14.50-2.7= (0.55×common equity)
11.8= (0.55×common equity)
Common equity= 11.8/0.55
Common equity= 21.45%
Hence Pearson's cost of common equity is 21.45%
You are in charge of a project that has a degree of operating leverage of 1.24. What will happen to the operating cash flows if the number of units you sell increase by 3.8 percent? Group of answer choices 4.71 percent increase 4.71 percent decrease 3.06 percent increase 3.06 percent decrease
Answer:
4.71 percent increase
Explanation:
The increase in the number of units sold is 3.8%
Degree of operating leverage is 1.24
Therefore, the operating cash flow can be calculated as follows:
Increase in the number of units×degree of operating leverage
= 3.8/100×1.24
= 0.038×1.24
= 0.0471×100
= 4.71%
Hence there is a 4.71 percent increase in the operating cash flow
On October 1, Oriole Corporation’s stockholders’ equity is as follows.
Common stock, $7 par value $535,500
Paid-in capital in excess of par—common stock 30,000
Retained earnings 167,000
Total stockholders’ equity $732,500
On October 1, Oriole declares and distributes a 10% stock dividend when the market price of the stock is $14 per share.
Required:
a. Compute the par value per share (1) before the stock dividend and (2) after the stock dividend.
b. Indicate the balances in the three stockholders? equity accounts after the stock dividend shares have been distributed.
Answer:
a. Compute the par value per share (1) before the stock dividend and (2) after the stock dividend.
1) $7 per stock2) $7 per stockb. Indicate the balances in the three stockholders? equity accounts after the stock dividend shares have been distributed.
Common stock $589,050Paid-in capital in excess of par - common stock $83,550Retained earnings $625,400Explanation:
since it is a "small" stock dividend, it will be carried out at market value and not at par value.
the total number of stocks = $535,500 / $7 par value = 76,500 stocks
total transaction = 76,500 stocks x $14 x 10% = $107,100
the journal entry should be:
Dr Retained earnings 107,000
Cr Common stock 53,550
Cr Paid in capital in excess of par value 53,550
total common stock account = $535,500 + $53,550 = $589,050 / 84,150 stocks = $7 per stock
Firm B, a calendar year, cash basis taxpayer, leases lawn and garden equipment. During December, it received the following cash payments. To what extent does each payment represent current taxable income to Firm B?
a. $522 repayment of a loan from an employee. Firm B loaned $500 to the employee six months ago, and the employee repaid the loan with interest.
b. $600 deposit from a customer who rented mechanical equipment. Firm B must return the entire deposit when the customer returns the undamaged equipment.
c. $10,000 short-term loan from a local bank. Firm B gave the bank a written note to repay the loan in one year at 9 percent interest.
d. $888 prepaid rent from the customer described in part b. The rent is $12 per day for the 74-day period from December 17 through February 28.
Answer:
a. $522 repayment of a loan from an employee. Firm B loaned $500 to the employee six months ago, and the employee repaid the loan with interest.
Firm B should recognize $22 as interest income.b. $600 deposit from a customer who rented mechanical equipment. Firm B must return the entire deposit when the customer returns the undamaged equipment.
The deposit cannot be recognized as income since it is a liability.c. $10,000 short-term loan from a local bank. Firm B gave the bank a written note to repay the loan in one year at 9 percent interest.
Interests ($900) will be recognized when they are actually paid for in 1 year. No accrued interests must be reported on the balance sheet (December 31).d. $888 prepaid rent from the customer described in part b. The rent is $12 per day for the 74-day period from December 17 through February 28.
The $888 will be recognized as revenue during the current year.Explanation:
When a taxpayer is a cash basis taxpayer, it will only report income and expenses that are actually collected or paid for respectively. All accounts receivable or accounts payable are not considered revenues nor expenses.
W.T. Ginsburg Engine Company manufactures part ACT30107 used in several of its engine models. Monthly production costs for 1,090 units are as follows: Direct materials $46,000 Direct labor 10,500 Variable overhead costs 32,500 Fixed overhead costs 22,000 Total costs $111,000 It is estimated that 6% of the fixed overhead costs assigned to ACT30107 will no longer be incurred if the company purchases ACT30107 from the outside supplier. W.T Ginsburg Engine Company has the option of purchasing the part from an outside supplier at $94.75 per unit. If the company accepts the offer from the outside supplier, the monthly avoidable costs (costs that will no longer be incurred) total ________.
Answer:
Cost that will no longer be incurred = $90320
Explanation:
$
The relevant variable cost
= 46,000 + 10,500 + 32,500 $89,000
Cost of external supply
= 94.75 × 1090= $103,277.50
Increase in of purchase 14,277.50
Savings in fixed cost (6%× 22,000) ( 1320
Net increase in cost if purchased 12,957.50
Cost that will no longer be incurred = 89,000 +1320 = $90320
Cost that will no longer be incurred = $90320
The Model E extender fits with the 2 inch heavy duty hitches.The contract calls for 247 Model E extenders per week to be delivered in equal installments over the 16 weeks of the contract. The goal of Alpha Assemblies is to work 40 hours per week. The actual work time for completing the Model E extenders has been broken down by process in the table below. Also provided is the anticipated learning rate for each process. All processes must be performed in sequence and each step has its own separate and unique workcenter. To achieve the goal of working 40 hours per week or less, the cycle time must be lower than the takt time. What is the expected Cycle Time for Model E in Week 16? Note: learning is applied to the batch quantity per week. Do not try to break out the units within a week.Process Time Required per Unit Predecessor Task Learning RateA 9 82B 12 A 86C 18 B 81D 9 C 90E 12 D 80F 17 E 88G 14 F 83H 12 G 85I 8 H 82
Answer:
Cycle Time = 10.19482 minute
Explanation:
From the question :
The Model E can be illustrated perfectly as shown below:
Process Time Required Predecessor Task Learning Rate
per Unit
A 9 82
B 12 A 86
C 18 B 81
D 9 C 90
E 12 D 80
F 17 E 88
G 14 F 83
H 12 G 85
I 8 H 82
Now For the minutes per week for each Process; we have :
Process Time Required Predecessor Learning Minutes
per Unit Task Rate (Week 16)
A 9 82 4.069096
B 12 A 86 6.564098
C 18 B 81 7.74841
D 9 C 90 5.9049
E 12 D 80 4.9152
F 17 E 88 10.19482
G 14 F 83 6.644165
H 12 G 85 6.264075
I 8 H 82 3.616974
The objective here is to determine the expected Cycle Time for Model E in Week 16
So, we can equally regard the Cycle Time = Bottleneck of Activity for Week 16.
Cycle Time = 10.19482 minute in as much as it is the the largest activity time for the week 16
Given that the demand per week is : = 247
The available time per week = 40 hours = 40 × 60 hours = 2400 minutes
Talk Time = Available Time Per Week/Demand Per Week
Talk Time = 2400/247
Talk Time = 9.716599
Thus; here the cycle time is greater than the talk time.
Identify a true statement about the per-unit expenditure method of determining advertising budget. It bases its advertising budgets on those of competitors or other members of the industry. It attempts to determine the retail price by using production costs as a base. It sets the advertising budget as a predetermined share of profits or financial resources. It involves arguing for and presenting the advertising budget on the basis of research findings.
Answer: It attempts to determine the retail price by using production costs as a base.
Explanation:
The Per-unit expenditure approach to advertising sets the retail price based on the production cost. This means that the amount to be set for advertising is based on a fixed amount that is determined by how many units of a good the company expects to sell so that the advertising is based on how much it spent in production.
At the beginning of the year, Bryers Incorporated reports inventory of $7,700. During the year, the company purchases additional inventory for $22,700. At the end of the year, the cost of inventory remaining is $9,700. Calculate cost of goods sold for the year.
Answer: $20,700
Explanation:
beginning inventory (X) = $7,700
purchased additional inventory (Y) = $22,700
ending inventory (Z) = $9,700
So first, we have to calculate Cost of goods available for sale (A), we add beginning inventory (X) and purchased additional inventory (Y)
A = X + Y
A = 7,700 + 22,700
Cost of goods available for sale (A) = 30,400
NOW to get our Cost of goods sold for the year (B), we subtract ending inventory (Z) from cost of goods available for sale (A)
B = A - Z
B = 30,400 - 9,700
B = 20,700
therefore the cost of goods sold for the year is $20,700
Closing Entries with Net Income Assume that the entry closing total revenues of $3,190,000 and total expenses of $2,350,000 has been made for the year ending December 31. At the end of the fiscal year, Teresa Schafer, Capital has a credit balance of $1,885,000 and Teresa Schafer, Drawing has a balance of $770,000. a. Journalize the entry required to close the Teresa Schafer, Drawing account. b. Determine the amount of Teresa Schafer, Capital at the end of the period. $
Answer:
a. Debit Teresa's Capital account for $770,000; and Credit Teresa's Drawing account for $770,000.
b. Teresa Schafer, Capital at the end of the period is $$1,955,000
Explanation:
a. Journalize the entry required to close the Teresa Schafer, Drawing account.
Since the drawing will affect capital by reducing it, the journal entry will look as follows:
Particulars Dr ($) Cr ($)
Teresa's Capital account 770,000
Teresa's Drawing account 770,000
(To record the closing the Teresa Schafer, Drawing account.)
b. Determine the amount of Teresa Schafer, Capital at the end of the period.
To do this, we have to calculate the net profit first as follows:
Net profit = Total revenue - Total cost = $3,190,000 - $2,350,000 = $840,000
Since net profit will increase capita while drawing will reduce capital, we therefore have:
Capital at the end of the period = Capital + Net profit - Drawing = $1,885,000 + $840,000 - $770,000 = $1,955,000.
Therefore, Teresa Schafer, Capital at the end of the period is $$1,955,000.
The following events occurred for Favata Company:_________
a. Received $16,500 cash from owners and issued stock to them.
b. Borrowed $13,500 cash from a bank and signed a note due later this year.
c. Bought and received $1,450 of equipment on account.
d. Purchased land for $25,000; paid $2,300 in cash and signed a long-term note for $22,700.
e. Purchased $9,500 of equipment, paid $2,300 in cash and charged the rest on account.
Required:
For each of the events in above, prepare journal entries. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field.)
Answer:
a.
Cash 16500 Dr
Common Stock 16500 Cr
b.
Cash 13500 Dr
Notes Payable 13500 Cr
c.
Equipment account 1450 Dr
Accounts Payable 1450 Cr
d.
Land 25000 Dr
Cash 2300 Cr
Notes Payable 22700 Cr
e.
Equipment account 9500 Dr
Cash 2300 Cr
Accounts Payable 7200 Cr
Explanation:
a.
The issuance of common stock against cash will increase the cash and the capital. So cash will be debited and capital (common stock) will be credited.
b.
The issuance of notes payable against cash increases liability and asset. The asset increase in cash will be debited and liability increase in notes payable will be credited.
c.
The purchase of equipment on account will increase liability and asset. The asset increase in form of equipment will be debited and the liability increase in form of accounts payable will be credited.
d.
The purchase of land will increase land and result in a debit to the land account. It is purchased for cash and a liability of notes payable. So both cash and the notes payable account will be credited as cash decreases (asset decrease in credited) and liability increases (liability increase is credited).
e.
The purchase of equipment will increase equipment account and result in a debit to the equipment account. It is purchased for cash and a liability of accounts payable. So both cash and the accounts payable account will be credited as cash decreases (asset decrease in credited) and liability increases (liability increase is credited).
Which of the following situations would preclude an accountant from issuing a review report on a company's financial statements in accordance with Statements on Standards for Accounting and Review Services (SSARS)?
a. Finished-goods inventory does not include any overhead amounts.
b. The accountant was engaged to review only the balance sheet.
c. The owner of a company is the accountant's father.
d. Land has been recorded at appraisal value instead of historical cost.
Answer:
c. The owner of a company is the accountant's father.
Explanation:
Standard for Accounting and Review services (SSARS) is used for an entity that is not required to file financial statements with a regulatory body for sale of its securities in the public market.
It is concerned with unaudited financial statements and other unaudited information.
According to the SSARS when the accountant is exposed to bias by being related or having vested interest in the company he is precluded from issuing a review report on the companie's financial statements.
All of the following are part of comprehensive income except:
a. realized gains on sale of available-for-sale-securities.
b. unrealized holding gains on available-for-sale-securities.
c. a re-classification adjustment for gains included in net income.
d. all of these answer choices are correct.
Answer: d. all of these answer choices are correct
Explanation:
Available for sale securities are held by a firm with the intention of selling it before it reaches its maturity date.
So as not to report on the income statement wrongly, the Unrealized gains(losses) which are any fluctuations from the original price, throughout the Security's lifetime is posted to the Other Comprehensive Income account in the Equity section of the balance sheet. That along with the Realized gains when the security is sold.
Reclassification adjustments are also included to account for the reclassification of a security to either a profit or a loss.
All of the above are correct.
The Andersons have contracted with a minimum-services real estate broker to assist them in marketing their home. By law their broker has all of these duties EXCEPT:_________ a) to instruct another broker to negotiate an offer with the sellers on his behalf. b) to instruct another broker to deliver a contract to the sellers on his behalf. c) to inform the sellers of material information related to the transaction. d) to answer their questions and present any offers.
Answer:
A. to instruct another broker to negotiate an offer with the sellers on his behalf
Explanation:
Brokers job includes facilitation of a variety of business transactions, such as real estate deals, by acting as a middle man between the parties involved. The broker acts as an agent for the client and charges the client certain amounts for his service.
By law a broker can not ask another broker to help him negotiate an offer. All other options in the question are duties of the broker
Balance sheet The balance sheet provides a snapshot of the financial condition of a company. Investors and analysts use the information given on the balance sheet and other financial statements to make several interpretations regarding the company's financial condition and performance.
Cold Goose Metal Works Inc. is a hypothetical company. Suppose it has the following balance sheet items reported at the end of its first year of operation. For the second year, some parts are still incomplete. Use the information given to complete the balance sheet.
Cold Goose Metal Works Inc. Balance Sheet for Year Ending December 31 (Millions of Dollars)
Year 2 Year 1 Year 2 Year 1
Assets Liabilities and equity
Current assets: Current liabilities
Cash and equivalents $4,612 Accounts payabl $0 $0
Accounts receivable 2,109 1.688 Accruals 293 293 0
Inventories 6,187 4,950 Notes par 1,660 1,562
Total current assets $14,062 $11,250 Total current abilities $1,562
Net fixed assets: Long-term debt 5,859 4,688
Net plant and equipment $13.750 Total debt $7,812 $6,250
Conon equity
Common stock 15.235 12,188
Retained earnings 6,562
Total common equity $23,438 $18,750
Total assets $31,250 $25,000 Total abilities and equity $31,250 $25,000
Given the information in the preceding balance sheet—and assuming that Cold Goose Metal Works Inc. has 50 million shares of common stock outstanding—read each of the following statements, then identify the selection that best interprets the information conveyed by the balance sheet.Statement #1: Cold Goose’s pool of relatively liquid assets, which are available to support the company’s current and future sales, decreased from Year 1 to Year 2.This statement is , because:Cold Goose’s total current asset balance increased from $11,250 million to $14,062 million between Year 1 and Year 2Cold Goose’s total current liabilities balance increased from $1,688 million to $2,109 million between Year 1 and Year 2Cold Goose’s total current liabilities balance decreased by $2,812 million between Year 1 and Year 2Statement #2: Over the past two years, Cold Goose Metal Works Inc. has relied more on the use of short-term debt than on long-term debt financing.This statement is , because:Cold Goose’s total current liabilities increased by $391 million, while its use of long-term debt increased by $1,171 millionCold Goose’s total current liabilities decreased by $391 million, while its long-term debt account decreased by $1,171 millionCold Goose’s total notes payable increased by $98 million, while its common stock account increased by $3,047 millionStatement #3: One way to interpret the change in Cold Goose’s accounts receivable balance from Year 1 to Year 2 is that more customers purchased new items on credit rather than paying off existing credit accounts.This statement is , because:The $421 increase in accounts receivable means either that Year 1’s existing credit customers are not paying off their owed balances and new or existing customers are making additional purchases on credit, or that Year 1’s credit customers have repaid their owed balances and Year 2 credit sales have exceeded Year 1’s credit salesThe decrease from $2,109 million to $1,688 million implies a net decrease in accounts receivable and that more customers are paying off their receivables balances than are buying on creditThe change from $4,950 million to $6,187 million reflects a net accumulation of new credit salesBased on your understanding of the different items reported on the balance sheet and the information they provide, if everything else remains the same, then the cash and equivalents item on the current balance sheet is likely to if the firm buys a new plant and equipment at a cost of $1 million with liquid capital.
Answer:
Cold Goose Metal Works Inc.
Balance Sheet
For Year Ending December 31 (Millions of Dollars)
Year 2 Year 1
Assets
Current assets:
Cash and equivalents $5,766 $4,612
Accounts receivable 2,109 1.688
Inventories 6,187 4,950
Total current assets $14,062 $11,250
Net fixed assets:
Net plant and equipment $17,188 $13.750
Total assets $31,250 $25,000
Liabilities and Equity
Current liabilities:
Accounts payable $0 $0
Accruals 293 0
Notes payable 1,660 1,562
Total current abilities $1,953 $1,562
Long-term debt 5,859 4,688
Total debt $7,812 $6,250
Common equity
Common stock 15.235 12,188
Retained earnings $8,203 6,562
Total abilities and equity $31,250 $25,000
Statement #1: Cold Goose’s pool of relatively liquid assets, which are available to support the company’s current and future sales, decreased from Year 1 to Year 2.
This statement is FALSE, because: Cold Goose’s total current asset balance increased from $11,250 million to $14,062 million between Year 1 and Year 2
Statement #2: Over the past two years, Cold Goose Metal Works Inc. has relied more on the use of short-term debt than on long-term debt financing.
This statement is FALSE, because: Cold Goose’s total current liabilities increased by $391 million, while its use of long-term debt increased by $1,171 million
Statement #3: One way to interpret the change in Cold Goose’s accounts receivable balance from Year 1 to Year 2 is that more customers purchased new items on credit rather than paying off existing credit accounts.
This statement is TRUE, because:The $421 increase in accounts receivable means either that Year 1’s existing credit customers are not paying off their owed balances and new or existing customers are making additional purchases on credit, or that Year 1’s credit customers have repaid their owed balances and Year 2 credit sales have exceeded Year 1’s credit sales
Based on your understanding of the different items reported on the balance sheet and the information they provide, if everything else remains the same, then the cash and equivalents item on the current balance sheet is likely to DECREASE if the firm buys a new plant and equipment at a cost of $1 million with liquid capital.
The purpose of a PERT network is: to monitor the quality of a product for compliance with ISO 9000 standards. to monitor the progress of a multi-step project during its development. to connect all firms that are ISO 9000 certified so that they can partner with each other on future projects. to be used as a decision-making tool when evaluating the best facility locations and layouts.
Answer:
The correct answer is the second option: to monitor the progress of a multi-step project during its development.
Explanation:
To begin with, a "Program Evaluation and Reviews Techniques" or PERT as it name indicates it refers to an stadistic technique by which the companies can follow the process of certain projects that they are having currently. Moreover, its main purpose is to manage and analyze the steps that a project has in order to make them less susceptible to errors. In addition to that, its main factor to observe is the time during the steps of the project. Nowadays is very common to use a tool like this in major companies.
Casper and Cecile divorced in 2018. As part of the divorce settlement, Casper transferred stock to Cecile. Casper purchased the stock for $25,000, and it had a market value of $43,000 on the date of the transfer. Cecile sold the stock for $40,000 a month after receiving it. In addition, Casper is required to pay Cecile $1,500 a month in alimony. He made five payments to her during the year.What are the tax consequences for Casper and Cecile regarding these transactions?
Answer:
According to IRS, the party making the payments is entitled to cancel the alimony & separate maintenance fees in a divorce situation while the party accepting the payment is obliged to include the amounts received in their gross revenue. Any transfer of property in respect of a divorce other than cash, however, is not taxable.The party receiving the property also does not recognize income and include the item on cost basis equal to basis of the party making transfer.
Explanation:
The price of coffe beans use to make coffee has decreased. At the same time, the price of cream (a compliment good) has increased. Given these two effects, what will happen to the current equilibrium quantity and price of coffee?
A. Equilibrium quantity will increase, equilibrium price will increase.
B. Equilibrium price will increase; the effect on quantity is ambiguous.
C. Equilibrium quantity will decrease; the effect on price is ambiguous.
D. Equilibrium price will decrease; the effect on quantity is ambiguous.
Answer:
The correct answer is:
Equilibrium price will decrease; the effect on quantity is ambiguous. (D)
Explanation:
First, note that if the price of coffee beans, used in the manufacture of coffee decreases, the price of coffee sold to consumers will decrease, because it takes a lesser amount in manufacturing than it used to, therefore this reduction in manufacturing costs is reflected in the selling price.
Next, it is hard to tell whether this reduction in equilibrium price will affect quantity demanded, because, at the same time, the price of cream ( a complementary good) increases, and since both goods are complementary, they are bought together, and the effect of the reduction in the price of coffee might not necessarily caused an increase in the quantity demanded because this effect is cancelled out by the increase in the price of cream, hence the effect on quantity is ambiguous.
Can't Hold Me Back, Inc. is preparing to pay its first dividends. It is going to pay $1.00, $2.50, and $5.00 a share over the next three years, respectively. After that, the company has stated that the annual dividend will be $1.25 per share indefinitely. What is this stock worth to you per share if you demand a 7% rate of return
Answer:
The stock worth to you per share if you demand a 7% rate of return is $21.78
Explanation:
In order to calculate the stock worth per share if you demand a 7% rate of return we would have to make the following calculation:
stock worth per share=PV of the first three years' returns+PV of the constant dividend stream from the fourth year
PV of the first three years' returns = 1/1.07+2.5/1.07^2+5/1.07^3 =$7.20
PV of the constant dividend stream from the fourth year,= (1.25/0.07)/1.07^3 =$14.58
Therefore, stock worth per share=$7.20 +$14.58
stock worth per share=$21.78
The stock worth to you per share if you demand a 7% rate of return is $21.78