Answer:
1.597
Explanation:
The computation of the factor beta using the one-factor arbitrage pricing model is shown below:
As we know that
= (Expected rate of return - risk-free rate of return) ÷ (market rate of return-risk-free rate of return)
= (17.61% - 3.68%) ÷ (12.4% - 3.68%)
= 1.597
We simply applied the above formula to determine the factor beta and the same is to be considered
(LaVilla) LaVilla is a village in the Italian Alps. Given its enormous popularity among
Swiss, German, Austrian, and Italian skiers, all of its beds are always booked in the winter
season and there are, on average, 1,200 skiers in the village. On average, skiers stay in
LaVilla for 10 days.
a. How many new skiers are arriving—on average—in LaVilla every day?
b. A study done by the largest hotel in the village has shown that skiers spend on average $50 per person on the first day and $30 per person on each additional day in local
restaurants. The study also forecasts that—due to increased hotel prices—the average
length of stay for the 2003/2004 season will be reduced to five days. What will be the
percentage change in revenues of local restaurants compared to last year (when skiers
still stayed for 10 days)? Assume that hotels continue to be fully booked!
Q2.6 (Highway) While driving home for the holidays, you can’t seem to get Little’s Law out of
Answer:
a) 120 skiers per day
b) 6.25% increase in revenue
Explanation:
a) If the average skier stays 10 days, the average turnover is 1/10 of the skiers per day, or 1200/10 = 120 skiers per day.
__
b) For a stay of n days, the average skier spends ...
50 +(n-1)30 = 20 +30n
and the average spending per day is ...
(20 +30n)/n = (20/n) +30
So, for a 10-day stay, the average skier spends in restaurants ...
20/10 +30 = 32 . . . . per day
And for a 5-day stay, the average skier will spend ...
20/5 +30 = 34 . . . . per day
The change in restaurant revenue is expected to be ...
(34 -32)/32 × 100% = 2/32 × 100% = 6.25%
Restaurant revenues will be 6.25% higher compared to last year.
Which of the following represents an increase in living standards over the past century? Check all that apply. Increased human activities have magnified the pollution of air and water. The purchasing power of a dollar has declined over time due to inflation. Medical breakthroughs enable people to enjoy better healthcare nowadays.
Answer:
Medical breakthroughs enable people to enjoy better healthcare nowadays.
Explanation:
An increase in living standard means that the lives of people are better off.
Advances in medicine have made it possible to find cure to various diseases. This improves standard of living.
Increased pollution of air and water and decline of dollar value have negative effects on living standard.
Pollution affects human health negatively and can cause diseases which negatively affect standard of living. Also, pollution can cause floods and other environmental disasters. Floods can displace people from their homes and this affects standard of living negatively.
Decrease in dollar value has made items more expensive.
I hope my answer helps you
The integration of flower farming in Kenya into global economy creates additional pressure for the ecosystem and the environment in Kenya. The major concern is due to the following.
A. More pollution in Naivasha lake
B. Less water resources for locals
C. extensive use to water flowers
D. All of these
Answer: D. All of these
Explanation:
Lake Naivasha has seen a huge rise in pollution due to the integration of the Kenya flower farming industry. This is due to the chemicals and fertilizers used to farm the flowers. Indeed in the year, Researchers estimate that due to a torrential rainfall that hit the area, millions of fish and aquatic life died when fertilizers and chemicals were washed into the lake.
The use of water from the lake for flower farming has also reduced the amount of water available to locals. This as well as the massive increase in the population of area as people come from far and wide to work for the flower farms have also increased the usage of the lake thereby reducing what is left for the locals.
Used in farming are water flowers and their overuse have led to their numbers dropping as well.
Workers in the nation of Argenia prefer managers that forcefully tell employees what to do and how to do it. Conversely, employees in the U.S. prefer to participate in decision making in the workplace. This __________ difference between Argenian workers and U.S. workers represents a management challenge for firms trading in the global market.
Answer: sociocultural
Explanation:
The options for the question are:
a. geopolitical
b. economic
c. sociocultural
d. regulatory
Sociocultural is used to describe differences between groups of people which relate to the social class and the culture in which they live. The sociocultural environment of a business are the values and the customs that guide the practices of the business.
From the question, employees in Argenia prefer managers who forcefully tell employees what to do and how to do it while the employees in the United States like to participate in the decision making in the workplace. This shows that there are sociocultural differences between the two nations.
Prepare the adjusting journal entries for the following transactions. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field.) Supplies for office use were purchased during the year for $700, of which $200 remained on hand (unused) at year-end. Interest of $350 on a note receivable was earned at year-end, although collection of the interest is not due until the following year. At year-end, salaries and wages payable of $4,600 had not been recorded or paid. At year-end, one-half of a $3,000 advertising project had been completed for a client, but nothing had been billed or collected. Redeemed a gift card for $700 of services.
Answer:
Adjusting Journal Entries:
Debit Supplies Expense $500
Credit Supplies $500
To record supplies used during the year.
Debit Interests on Note Receivable $350
Credit Interest on Note $350
To record interest earned, but not received.
Debit Salaries & Wages Expense $4,600
Credit Salaries & Wages Payable $4,600
To record accrued salaries and wages.
Debit Account Receivable (Advertising Project) $1,500
Credit Service Revenue (Advertising Project) $1,500
To record one-half of advertising project completed.
Debit Cash Account $700
Credit Gift Card $700
To record redemption of a gift card of services.
Explanation:
Adjusting entries are made at the end of an accounting period to record accrued expenses and revenue, depreciation charge, deferred expenses and revenue. These adjustments bring the accounts to agree with the accrual concept which insists that transactions which do not impact cash flows must be recognized in the period they occur.
The following account balances are taken from the December 31, 2018, financial statements of ABZ Advertising Company. The company uses accrual basis accounting. Advertising Revenue $ 46,482 Cash 41,516 Accounts Receivable 7,296 Interest Expense 2,299 Accounts Payable 5,000 Operating Expenses 37,460 Deferred Revenue 1,178 Equipment 18,048 Income Tax Expense 2,326 The following activities occurred in 2019: Performed advertising services on account, $55,000. Received cash payments on account, $10,400. Received deposits from customers for advertising services to be performed in 2020, $2,500. Made payments to suppliers on account, $5,000. Incurred $45,000 of operating expenses; $39,000 was paid in cash and $6,000 was on account and unpaid as of the end of the year. Which of the following is the journal entry that will be used to record activity #3? Multiple Choice Debit Cash and credit Accounts Receivable for $2,500. Debit Deferred Revenue and credit Advertising Revenue for $2,500. Debit Deferred Revenue and credit Receivable for $2,500. Debit Cash and credit Deferred Revenue for $2,500.
Answer:
Debit Cash and credit Deferred Revenue for $2,500.
Explanation:
Deferred revenue can be described as an advance payment thta is received a business for services to be performed or goods to be delivered in the future.
This type of revenue will not be reported in the income statement but it will be reported as a liability under the current liabilities in the balance sheet, after debiting the cash account, until when the services are performed or goods are delivered.
For this question, $2,500 deposits received in 2018 from customers for advertising services to be performed in 2020 will not be reported in the 2018 income statement but it will continue to be reported as a liability under the current liabilities in the balance sheet till 2020 when the services are performed.
Thereofe, the correct journal entry that will be used to record activity #3 is Debit Cash and credit Deferred Revenue for $2,500.
Precious Metal Mining has $17 million in sales, its ROE is 13%, and its total assets turnover is 4x. Common equity on the firm’s balance sheet is 55% of its total assets. What is its net income? Write out your answer completely. For example, 5 million should be entered as 5,000,000. Round your answer to the nearest cent. Do not round intermediate steps.
Answer:
net income = $303,875
Explanation:
total sales $17 million
return on equity (ROE) = 13% = net income / stockholders' equity
asset turnover = 4 = total sales / average total assets
common equity = 55% of assets
first we must determine average total assets:
average total assets = total sales / 4 = $17 million / 4 = $4.25 million
common equity = 55% x total assets = 55% x $4.25 million = $2,337,500
ROE = 13% = net income / $2,337,500
net income = 13% x $2,337,500 = $303,875
The bond has a coupon rate of 6.83 percent, it makes semiannual payments, and there are 4 months to the next coupon payment. A clean price of $1,049 and the par value is $1,000. What is the invoice price
Answer:
The invoice price for the bond is $1,060.38
Explanation:
Given the following:
PV= Par value = $1,000 ,
CV= Clean Price = $1,049
Coupon Rate per annum = 6.83%
To calculate the Semiannual Coupon Rate= Coupon Rate per annum/2= 3.415%
To calculate Semiannual Coupon= Semiannual Coupon Rate*PV
= 3.415% * $1,000 = $34.15
With an interest accured over 2 months, we calculate it thus:
Accrued Interest = $34.15 * 2/6 = $11.38
To calculate Invoice price:
Invoice Price = CP + Accrued Interest
Invoice Price = $1,049.00 + $11.38
Invoice Price = $1,060.38
You are a project manager leading an IT development project. Halfway through your project, you realize that you need to hire an additional worker in order to complete the project on time. How will you convince your project sponsors to authorize the hire? How will you on-board your new worker?
Answer:
The project manager can convince the project sponsors with the following reasons which are,
(1) Telling the sponsors the additional benefits that the team will have once a member enters the team.
(2)Informing the sponsors about the work not completed due to lesser number of workers.
(3)Informing the sponsors the additional benefits that the team will have once a member enters the team.
For on boarding a new worker the project manager does the following which includes:
(1)it is very necessary to share the agendas and charters of the previous meetings of the project to help individuals to familiarize with the project scope and goals.
(2)Having a one one meeting a with the individual and discussing with him/her about the project and solve his/her issues.
(3) Doing a formal introduction of the new member to both the project team and stakeholders of the project.
Explanation:
Solution:
In the half way of the project, the project manager can convince the project sponsors in the following ways shown below:
Informing the sponsors about the work not completed due to lesser number of workersInforming the sponsors about the delays taking place due to shortage of members in the teamTelling the sponsors the additional benefits that the team will have once a member enters the teamConvincing the sponsors by discussing and talking with him/her the various drawbacks of not having the required numbers of members in the team.For getting a new member on board for the project, it is very important to share the agendas and charters and minutes of the previous meetings of the project to enable individuals to familiarize with the project scope and goals.
Secondly, a one one meeting and discussion with the individual must be organized to brief him/her about the project and solve his/her issues.
Finally the new member must be introduced to both the project team and stakeholders of the project.
During the most recent month, the following activity was recorded:_______.
a. Eleven thousand six hundred pounds of material were purchased at a cost of $2.90 per pound.
b. The company produced only 1,160 units, using 10,440 pounds of material. (The rest of the material purchased remained in raw materials inventory.)
c. 564 hours of direct labor time were recorded at a total labor cost of $6,768.
Answer:
7000
Explanation:
Which of the following is NOT a pitfall an organization should avoid in strategic planning? Involving all managers rather than delegating planning to a "planner" Failing to communicate the plan to employees Failing to create a collaborative climate supportive of change Top managers not actively supporting the strategic-planning process Doing strategic planning only to satisfy accreditation or regulatory requirements
Answer:
Involving all managers rather than delegating planning to a "planner"
Explanation:
Strategic planning is a process of establishing the direction of a business. It assesses where the business is and where it is going. And the action plan needed to get to it's goal.
Delegating planning to a planner rather than involving all managers is an identified pitfall in strategic planning.
This is why Involving all managers rather than delegating planning to a "planner" is the correct answer since we are required to identify a non pitfall by the question.
You are an international shrimp trader. A food producer in the Czech Republic offers to pay you 2.3 million Czech koruna today in exchange for a year's supply of frozen shrimp. Your Thai supplier will provide you with the same supply for 2.8 million Thai baht today. If the current competitive market exchange rates are 25.49 koruna per dollar and 39.31 baht per dollar, what is the value of this deal?
Answer:
$19,002.77
Explanation:
The computation of the value of deal is shown below:
The value of the deal = Sales revenue - purchase cost
where,
Sales revenue is
= 2,300,000 ÷ 25.49 koruna per dollar
= $90,231.46
And, the purchase cost is
= 2,800,000 ÷ 39.31 baht per dollar
= $71,228.69
So, the value of the deal is
= $90,231.46 - $71,228.69
= $19,002.77
hence, the value of the deal is $19,002.77
General Discussion Questions What should business leaders take away from this scandal? What could Wells Fargo have done differently to avert this cultural meltdown? Practice of Ethical Leadership Questions Modeling Character and Values: What values did Stumpf model to Wells Fargo employees? What impact might that have on the culture of Wells Fargo? Encouraging Ethical Conduct: What behaviors can leaders model in order to encourage ethical behavior in their organization? Designing Ethical Systems: Wells Fargo did have some systems in place, like the ethics hotline, to report unethical behavior, but it didn’t work. Why do you think that is? What steps can leaders take to design systems that encourage ethical behavior rather than unethical behavior?
Answer:
From this scandal, business leaders should learn to:
(a) not encourage unethical practices directly or indirectly among employees.
(b) not set unrealistic targets for employees to achieve within an unrealistic time-frame.
(c) Institute measures to prevent unethical practices.
(d) Encourage honest employees to grow in the company.
(e) Honor adherence to regulatory framework as applicable to the company.
Wells Fargo could have done differently in these manner:
(a) When the first incident of aggressive sales practice was reported in year 2004 with identified incidents from year 2002, they could have instituted measures to prevent recurrence of such incidents. Some of the practical and workable measures are enumerated in succeeding paragraphs.
(b) Convene a meeting of senior managers to provide them with appropriate guidelines so as not to repeat such incidents.
(c) Instruct senior managers to advise their juniors to refrain from any such aggressive sales practices.
(d) Investigate to determine the extent of impact of aggressive sales practices as on 2004 and take remedial actions against those who are engaged in such activities.
(e) Promote the whistle-blower method of instantaneous reporting of an incident by anyone who has witnessed such an incident.
(f) Reward employees having honesty, integrity and moral values.
Practice of Ethical Leadership Questions
CEO John Stumpf’s model was to aggressively cross-sell products by any means. While leading the bank in doing so, he had compromised on the minimum value system that any financial institution or any company must adhere to. The cultural impact that had on Wells Fargo is listed below:
(a) Employees were pressurized for resorting to unethical practices.
(b) Employees reporting matters on unethical practices were punished.
(c) The performance management/ measurement system, in effect, encouraged dishonesty in employees.
(d) The compensation system was skewed in favor of bonus.
(e) Since, the supervisors pressurized employees, the structural dishonesty within the organization was evident.
Leaders can encourage ethical behavior in their organization in the following manner:
(a) Demonstrate personal ethics in their words and actions.
(b) Instruct senior managers to strictly adhere to the ethical norms to be followed.
(c) Instruct senior managers to communicate company’s ethical agenda to the supervisors/ other junior employees within their departments/ sections.(d) Monitor adherence to / violation of ethical practices on a regular basis.(e) Institute immediate remedial measures to prevent recurrence of any unethical practice.
(f) Encourage employees to report incidents of unethical practices.
(g) Reward honest and hardworking employees.
Well Fargo’s system of ensuring Ethical System within the bank, such as ethics hotline to report unethical behavior did not work because, the top management, led by the CEO did not pay any importance to prevention of unethical practices. Rather, they steered in an organized and structured manner to promote unethical practices.
Leaders can take the following steps to design systems that encourage ethical behavior:
(a) The top leaders must “think ethics”, “speak ethics” and “act ethics”. This is the top most fundamental step in the direction of designing systems to encourage ethical behavior.
(b) Matters on “what is ethical and what is not ethical” must be circulated across the organization.
(c) Periodic briefing must take place from the top management to the junior most employees in a structured and organized manner.
(d) Encouragement on reporting (whistle-blowing) incidents of unethical practices must be given.
(e) System of rewarding honest and hardworking employees must be put in place.
Imperial Jewelers manufactures and sells a gold bracelet for $408.00. The company’s accounting system says that the unit product cost for this bracelet is $268.00 as shown below:
Direct materials $147
Direct labor 85
Manufacturing overhead 36
Unit product cost $268
The members of a wedding party have approached Imperial Jewelers about buying 30 of these gold bracelets for the discounted price of $368.00 each. The members of the wedding party would like special filigree applied to the bracelets that would require Imperial Jewelers to buy a special tool for $452 and that would increase the direct materials cost per bracelet by $9. The special tool would have no other use once the special order is completed.
To analyze this special order opportunity, Imperial Jewelers has determined that most of its manufacturing overhead is fixed and unaffected by variations in how much jewelry is produced in any given period. However, $15.00 of the overhead is variable with respect to the number of bracelets produced. The company also believes that accepting this order would have no effect on its ability to produce and sell jewelry to other customers. Furthermore, the company could fulfill the wedding party’s order using its existing manufacturing capacity.
Required:
a. What is the financial advantage (disadvantage) of accepting the special order from the wedding party?
b Should the company accept the special order?
Answer:
2352, Yes
Explanation:
a) Incremental Cost = Direct Material cost + Direct labour cost + Filgree + Manufacturing overhead cost
= 147 + 85 + 9 + 15 = 256
Total additional Cost = 256 x 21 = 5376
Incremental Revenue = 368
Total additional Revenue = 368 x 21 = 7728
Incremental net operating income = Total additional revenue - total additional cost
= 7728 - 5376 = 2352
b) As Incremental net operating income is positive, company is earning from the special order. Yes, it should accept it
The relevant costs for a decision to accept the special order are :
1. Incremental Revenue from the special order
2. incremental variable cost
3. The cost of the special tool
Unit variable cost = 147+ 85 + 9 + 15 = $256
The balance of manufacturing overhead would be incurred either way. Therefore, they are not relevant for the decision
Sales revenue from special order $
(21× $368) 7728
The Variable cost of special order $
(21× $256) (5376 )
Financial advantage 2358
The company should accept the special order, as it will increase its profit by $2352
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Suppose you want to invest $10,000. You have two options: Option #1: Invest in municipal bonds with an expected return of 8.00%, or Option #2: Invest in the corporate bonds of Jefferson & Alexander Inc. which are offering an expected return of 10.00% Assume that your decision is based solely on your tax situation. If everything else is the same for both bonds, at what tax rate would you be indifferent between these two bond investments?
Answer: 20%
Explanation:
Municipal Bonds are generally not taxed so if you invest in the Municipal bond, the tax rate does not affect you.
The tax rate therefore that will make you indifferent between the 2 options is the one that will take the Corporate bond returns of Jefferson to 8% so that both bonds may give you the same return after tax.
Assuming that tax rate is 'x' then,
8 = 10 (1 - x)
8 = 10 - 10x
10x = 10 - 8
10x = 2
x = 20%
At a tax rate of 20%, the Corporate bonds give an 8% return.
Below are the account balances for Cowboy Law Firm at the end of December. Accounts Balances Cash $ 4,600 Salaries expense 1,800 Accounts payable 2,600 Retained earnings 4,100 Utilities expense 1,000 Supplies 13,000 Service revenue 8,500 Common stock 5,200 Required: Use only the appropriate accounts to prepare an income statement.
Answer:
Cowboy Law Firm
Income statement for the period ended December
Amount in $
Service revenue 8,500
Utilities (1,000)
Salaries expense (1,300)
Net income/(loss) 6,200
Explanation:
An income statement is a part of the financial statements that shows how profitable the activities of an entity was for a given period of time. It is usually stated as the income statement for a period end.
The elements of the income statement include the revenue otherwise called sales, expenses including cost of goods sold, operating expenses etc and the profit or loss as well as the other comprehensive income/loss.
Lucy's Music Emporium opened its doors on January 1, 2015, and it was granted permission to use the same depreciation calculations for shareholder reporting and income tax purposes. The company planned to depreciate its fixed assets over 20 years, but in December 2015 management realized that the assets would last for only 15 years. The firm's accountants plan to report the 2015 financial statements based on this new information. How would the new depreciation assumption affect the company's financial statements
Answer: d. The firm's cash position in 2015 and 2016 would increase.
Explanation:
The financila statements had been calculated with the view that fixed assets would be depreciated over a 20 year period. However, it was discovered that the assest should be depreciated over 15 years instead. This reduction in the period would have the effect for increasing the depreciation payment.
For example, say the asset cost $20,000 and was originally to be depreciated over 20 years using Straight Line Depreciation. This means that the depreciation per year would be,
= [tex]\frac{20,000}{20}[/tex]
= $1,000 a year.
If it was however discovered that it was supposed to be 15 years that figure would go to,
= [tex]\frac{20,000}{15}[/tex]
= $1,333.33 a year
Notice how depreciation increased. Lucy's Music emporium will therefore see their depreciation cost rise. Depreciation is subtracted from revenue as it is tax deductible. When Lucy's Emporium deduct this new depreciation, they will have less profit. They will be taxed on this less profit and so pay a lower tax. This will thus increase their cash holdings because Depreciation is a non cash expense and does not actually require a cash payment.
Torche Corporation Balance Sheet As of March 11, 2020 (amounts in thousands) Cash 14,700 Accounts Payable 2,400 Accounts Receivable 4,800 Debt 3,700 Inventory 3,800 Other Liabilities 5,000 Property Plant & Equipment 15,800 Total Liabilities 11,100 Other Assets 900 Paid-In Capital 6,000 Retained Earnings 22,900 Total Equity 28,900 Total Assets 40,000 Total Liabilities & Equity 40,000 Use T-accounts to record the transactions below, which occur on March 12, 2020, close the T-accounts, and construct a balance sheet to answer the question. 1. Receive payment of $12,000 owed by a customer 2. Buy $15,000 worth of manufacturing supplies on credit 3. Purchase equipment for $44,000 in cash What is the final amount in Total Liabilities & Equity?
Answer:
Final amount in Total Liabilities & Equity = $40,015,000
Explanation:
A T-account refers to an informal term that is used to describe a set of financial records that are based on the principle of double-entry bookkeeping. The term T- account is used to indicate how bookkeeping entries appear.
Balance sheet is a statement of financial position used to report assets, liabilities and shareholders' equity of a company.
Note: See the attached excel for the T-accounts prepared and the balance sheet constructed. Just scroll down on the excel file to see everything.
Dividends Per Share Windborn Company has 25,000 shares of cumulative preferred 3% stock, $50 par and 50,000 shares of $15 par common stock. The following amounts were distributed as dividends:
Y1 $75,000
Y2 15,000
Y3 112,500
Determine the dividends per share for preferred and common stock for each year. The stock outstanding when a corporation has issued only one class of stock.common stock for each year.
Preferred Stock Common Stock
(dividend per share) (dividend per share)
Year 1 $ $
Year 2 $ $
Year 3 $ $
Answer:
Preferred Stock Common Stock
(dividend per share) (dividend per share)
Year 1 $1.50 $0.75
Year 2 $0.60 $0.00
Year 3 $2.40 $1.05
Explanation:
For Year 1:
Total dividend distributed = $75,000
Preferred shareholders' dividend = $50 * 25,000 * 3% = $37,500
Preferred shareholders' dividend per share = $37,500 / 25,000 = $1.50
Common stockholders' dividend = Total dividend distributed - Preferred shareholders' dividend = $75,000 - $37,500 = $37,500
Common stockholders' dividend per share = $37,500 / 50,000 = $0.75
For Year 2:
Total dividend distributed = $15,000
Dividend payable to preferred shareholders = $50 * 25,000 * 3% = $37,500
Dividend paid to preferred shareholders = $15,000
Preferred shareholders' dividend per share = $15,000 / 25,000 = $0.60
Preferred shareholders' dividend carried forward = Dividend payable to preferred shareholders - Total dividend distributed = $37,500 - $15,000 = $22,500
Common stockholders' dividend = $0
Common stockholders' dividend per share = $0
For Year 3:
Total dividend distributed = $112,500
Total dividend paid to preferred shareholders = $37,500 + Preferred shareholders' dividend carried down from Year 2 = $37,500 + $22,500 = $60,000
Preferred shareholders' dividend per share = $60,000 / 25,000 = $2.40
Common stockholders' dividend = Total dividend distributed - Total dividend paid to preferred shareholders = $112,500 - $60,000 = $52,500
Common stockholders' dividend per share = $52,500 / 50,000 = $1.05
g The sticky-wage theory of the short-run aggregate supply curve says that when the price level rises more than expected, a. production is more profitable and employment rises. b. production is more profitable and employment falls. c. production is less profitable and employment rises. d. production is less profitable and employment falls.
Answer:
A. Production is more profitable and employment rises
Explanation:
Wages are sticky if market prices or wages don’t adjust quickly to changes in the economy. When prices are sticky, the Short Run Aggregate Supply curve slopes upward. It slopes upward because at least one price is fixed. The curve shows that a higher price level leads to more output
Therefore when the price level rises more than expected, production is more profitable and employment rises.
Arlington Company is constructing a building. Construction began on January 1 and was completed on December 31. Expenditures were $4,000,000 on March 1, $3,300,000 on June 1, and $5,000,000 on December 31. Arlington Company borrowed $2,000,000 on January 1 on a 5- year, 12% note to help finance construction of the building. In addition, the company had outstanding all year a 10%, 3-year, $4,000,000 note payable and an 11%, 4-year, $7,500,000 note payable. 96. What are the weighted-average accumulated expenditures
Answer:
$5,258,333
Explanation:
Arlington Company weighted-average accumulated expenditures
March 1 Expenditure $3,333,333
($4,000,000 ×10/12)
Add June 1 Expenditure $1,925,000
($3,300,000 ×7/12)
Add Dec 31 Expenditure $0
($5,000,000 ×0/12)
Weighted-average accumulated expenditures $5,258,333
($3,333,333+$1,925,000)
Mystic Lake Inc. bottles and distributes spring water. On July 9 of the current year, Mystic Lake reacquired 60,000 shares of its common stock at $42 per share. On September 22, Mystic Lake sold 45,000 of the reacquired shares at $51 per share. The remaining 15,000 shares were sold at $40 per share on November 23.
Required:
A. Journalize the transactions of July 9, September 22, and November 23. Refer to the Chart of Accounts for exact wording of account titles.
B. What is the balance in Paid-In Capital from Sale of Treasury Stock on December 31 of the current year?
C. For what reasons might Mystic Lake have purchased the treasury stock?
Answer:
A. Journalize the transactions
July 9, purchase of 60,000 treasury stocks
Dr Treasury stocks 2,520,000
Cr Cash 2,520,000
September 22, 45,000 treasury stocks sold
Dr Cash 2,295,000
Cr Treasury stocks 1,890,000
Cr Additional paid in capital 405,000
November 23
Dr Cash 600,000
Dr Additional paid in capital 30,000
Cr Treasury stocks 630,000
B. What is the balance in Paid-In Capital from Sale of Treasury Stock on December 31 of the current year?
Additional paid in capital = $405,000 - $30,000 = $375,000
December 31 balance:
Additional paid in capital $375,000
C. For what reasons might Mystic Lake have purchased the treasury stock?
management believed that the stock was underpricedthey have excess cash and no immediate projects to invest init is a way to increase the price of stocks since lower equity with the same profits means that each remaining stock will earn more returnsPerpetual Inventory Using FIFO Beginning inventory, purchases, and sales data for DVD players are as follows: November 1 Inventory 120 units at $39 10 Sale 90 units 15 Purchase 140 units at $40 20 Sale 110 units 24 Sale 45 units 30 Purchase 160 units at $43 The business maintains a perpetual inventory system, costing by the first-in, first-out method. a. Determine the cost of goods sold for each sale and the inventory balance after each sale, presenting the data in the form illustrated in Exhibit 3. Under FIFO, if units are in inventory at two different costs, enter the units with the LOWER unit cost first in the Cost of Goods Sold Unit Cost column and in the Inventory Unit Cost column. Cost of Goods Sold Schedule First-in, First-out Method DVD Players Date Quantity Purchased Purchases Unit Cost Purchases Total Cost Quantity Sold Cost of Goods Sold Unit Cost Cost of Goods Sold Total Cost Inventory Quantity Inventory Unit Cost Inventory Total Cost Nov. 1 Nov. 10 Nov. 15 Nov. 20 Nov. 24 Nov. 30 Nov. 30 Balances b. Based upon the preceding data, would you expect the inventory to be higher or lower using the last-in, first-out method?
Answer:
a) UNDER FIFO
November 1 Inventory 120 units at $39
November 10 Sale 90 units
COGS = 90 X $39 = $3,510remaining inventory = 30 x $39 = $1,170November 15 Purchase 140 units at $40
November 20 Sale 110 units
COGS = (30 x $39) + (80 x $40) = $1,170 + $3,200 = $4,370remaining inventory = 60 x $40 = $2,400November 24 Sale 45 units
COGS = 45 x $40 = $1,800remaining inventory = 15 x $40 = $600November 30 Purchase 160 units at $43
remaining inventory = $600 + (160 x $43) = $7,480b. UNDER LIFO
November 1 Inventory 120 units at $39
November 10 Sale 90 units
COGS = 90 X $39 = $3,510remaining inventory = 30 x $39 = $1,170November 15 Purchase 140 units at $40
November 20 Sale 110 units
COGS = 110 x $40 = $4,400 remaining inventory = (30 x $40) + (30 x $39) = $2,370November 24 Sale 45 units
COGS = (30 x $40) + (15 x $39) = $1,785remaining inventory = 15 x $39 = $585November 30 Purchase 160 units at $43
remaining inventory = $585 + (160 x $43) = $7,465Under LIFO, the ending inventory is lower than under FIFO.
"First in first out" or FIFO is a method of inventory evaluation by which the process of goods buying and selling are assumed as having same chronological order.
FIFOAs per the question, if units are in inventory at two different costs, than the Cost of Goods Sold (COGS), and Inventory will be different, as per the given information:
⇒November 1, Inventory 120 units at $39
November 10, Sale 90 units
Cost of Goods Sold = 90 X $39 = $3,510
Remaining inventory = (120-90) x $39 = $1,170
⇒ November 15, Purchase 140 units at $40
November 20, Sale 110 units
Cost of Goods Sold = (30 x $39) + (80 x $40) = $1,170 + $3,200 = $4,370
Remaining inventory = 60 x $40 = $2,400
⇒ November 24, Sale 45 units
COGS = 45 x $40 = $1,800
Remaining inventory = 15 x $40 = $600
⇒November 30, Purchase 160 units at $43
Remaining inventory = $600 + (160 x $43) = $7,480
B. Under Last in, First Out (LIFO)
⇒November 1, Inventory 120 units at $39
November 10, Sale 90 units
COGS = 90 × $39 = $3,510
Remaining inventory = 30 x $39 = $1,170
⇒November 15, Purchase 140 units at $40
November 20, Sale 110 units
COGS = 110 x $40 = $4,400
Remaining inventory = (30 x $40) + (30 x $39) = $2,370
⇒November 24, Sale 45 units
COGS = (30 x $40) + (15 x $39) = $1,785
Remaining inventory = 15 x $39 = $585
⇒November 30, Purchase 160 units at $43
Remaining inventory = $585 + (160 x $43) = $7,465
Hence, the results shows that the Inventory is LOWER when used Last-in, First out Method.
Learn More about LIFO here:
https://brainly.com/question/13510592
Henrie’s Drapery Service is investigating the purchase of a new machine for cleaning and blocking drapes. The machine would cost $102,990, including freight and installation. Henrie’s estimated the new machine would increase the company’s cash inflows, net of expenses, by $30,000 per year. The machine would have a five-year useful life and no salvage value.
Required:
a. Compute the machine's internal rate of return to the nearest whole percent.
b. Compute the machine's net present value. Use a discount rate of 16%. (Any cash outflows should be indicated by a minus sign. Round discount factor(s) to 3 decimal places.)
c. Suppose that the new machine would increase the company's annual cash inflows, net of expenses, by only $41,000 per year. Under these conditions, compute the internal rate of return to the nearest whole percent.
Answer:
A. 14%
B. NPV = $-4,761.19
C. 28%
Explanation:
The internal rate of return is the discount rate that equates the after tax cash flows from an investment to the amount invested.
IRR can be calculated using a financial calculator:
Cash flow in year 0 = $-102,990
Cash flow each year from year one to five = $30,000
IRR = 14%
The net present value is the present value of after tax cash flows from an investment less the amount invested.
Npv can be calculated using a financial calculator:
Cash flow in year 0 = $-102,990
Cash flow each year from year one to five = $30,000
I = 16%
NPV = $-4,761.19
IRR if cash flow is $41,000
Cash flow in year 0 = $-102,990
Cash flow each year from year one to five = $41,000
IRR = 28%
To find the NPV using a financial calacutor:
1. Input the cash flow values by pressing the CF button. After inputting the value, press enter and the arrow facing a downward direction.
2. After inputting all the cash flows, press the NPV button, input the value for I, press enter and the arrow facing a downward direction.
3. Press compute
To find the IRR using a financial calacutor:
1. Input the cash flow values by pressing the CF button. After inputting the value, press enter and the arrow facing a downward direction.
2. After inputting all the cash flows, press the IRR button and then press the compute button.
I hope my answer helps you
Required information
An internal control system consists of the policies and procedures managers use to protect assets, ensure reliable accounting, promote efficient operations, and uphold company policies. It can prevent avoidable losses and help managers both plan operations and monitor company and human performance. Principles of good internal control include establishing responsibilities, maintaining adequate records, insuring assets and bonding employees, separating recordkeeping from custody of assets, dividing responsibilities for related transactions, applying technological controls, and performing regular independent reviews. Sarbanes-Oxley Act requires each of the following:
A. An effective internal control.
B. Light penalties for violators.
C. Auditors must evaluate internal controls.
D. Auditor's work overseen by Public Accounting Board.
Answer:
Options A and D.
Explanation:
Just like it is given in the question above, the concept of internal control system has to do with the regulations and policies that are being set by each companies/firms or agencies or bodies or business organization in order to increase their productivity and efficiency.
The Sarbanes-Oxley Act was enacted on the 30th day of the month of July in the year 2002 by the 107th United States of America congress and its main work or purpose is to make sure sure that there is reliability and transparency in financial and accounting institutions and also to protect investors.
When a breech is perceived, group of people will be appointed to conduct "An effective internal control" and also for the "Auditor's work overseen by Public Accounting Board."
Answer:
A. An effective internal control
C. Auditors must evaluate internal controls
Explanation:
SOX requires managers and auditors whose stock is publicly traded to have an effective internal control system, auditors must evaluate internal controls, violators may receive harsh penalties (not light penalties), and auditors’ work is overseen by Public Company Accounting Oversight Board (PCAOB) (not by the Public Accounting Board).
Phionia Phelps has developed a gourmet cat food. Not only is this food eagerly eaten by the most finicky felines, but it is specially formulated to prevent the many health problems of aging cats. Phionia has been making the food on her kitchen range and selling it at $250 per case only to close acquaintances who are also cat lovers. One of her wealthy acquaintances has now offered to invest in her business if Phionia will begin selling the product through her website. However, the investor wants Phionia to produce a budget for the first six months of operation. Based on her experience to date, Phionia predicts the following sales in cases:
Each case of Finicky Feline Gourmet Cat Dinner requires 5 pounds of prime lamb meat, 10 pounds of short grain Chinese rice, 2 pounds of wild caught Alaskan salmon, and 1 pound of secret vitamins and supplements. Phionia plans to maintain end-of-month inventories equal to 10 percent of the next month's projected sales, to meet expected sales growth. All the ingredients inventories are to be maintained at 5 percent of the production needs for the next month, but not to exceed 1,000 pounds of any one ingredient. January will begin with all inventories at the projected levels. Phionia has the following price quotes good for the following year:
The production process requires direct labor at two skill levels: (1) ingredient preparation, $18 per hour, and (2) cooking and canning, $24 per hour. Two workers are willing to work part days if there is not enough demand for them to work full time. lt takes one hour to process one batch. Because of preparation and cleanup time, only six batches can be produced per day. Each batch produces enough food to fill 100 cases. Manufacturing overhead is $6,000 fixed per month plus $15 per case.
Item $ per pound
Lamb 15
Rice 1,20
Saimon 24
Viamlns 45
1. Prepare the following budgets for the period. January through June:________.
a. Sales budget in dollars.
b. Production budget in units.
c. Direct materials purchases budget in pounds.
d. Direct materials purchases budget in dollars.
e. Direct manufacturing labor budget in dollars.
2. Comment on the viability of this business and the advisability of the investor making a $50,000 investment to get it started.
Answer:
Explanation:
a.
Sales budget = $ 250 per case * 100 cases per batch * 6 batches per day * 20 days a month * 6 months
= $ 18,000,000
b. Production budget in units = 100 cases per batch * 6 batches per day * 20 days a month * 6 months
= 72,000 cases
Production budget including 10 percent inventories
= 72000 + 100*6*20*10%
= 73200 cases
c. Direct materials purchases budget in pounds including 5% inventories
Lamb = 5 pounds per case * (73200 cases + 100*6*20*5% cases )
= 369,000 pounds
Rice Lamb = 10 pounds per case * (73200 cases + 100*6*20*5% cases )
= 738,000 pounds
Salmon = 2 pounds per case * (73200 cases + 100*6*20*5% cases )
= 147,600 pounds
Vitamins = 1 pound per case * (73200 cases + 100*6*20*5% cases )
= 73,800 pounds
d. Direct materials purchases budget in dollars = 369000*15 + 738000*1.2 + 147600*24 + 73800*45
= $ 1,328,400
e. Manufacturing labor budget in dollars = 1 hours per batch * 6 batches per day * 20 days per month * 6 months * ($ 18 per hour for ingredient preparation + $ 24 per hour for cooking and canning ) * 2 workers
= $ 60,480
2. The business requires an investment of $ 1,328,400 + 60,480
= $ 1,388,880 over six months.
This translates to monthly investment of $ 231,480
Therefore $ 50,000 investment is too small to begin with.
Adjustment for Unearned Revenue
On June 1, 20Y2, Herbal Co. received $41,250 for the rent of land for 12 months.
Journalize the adjusting entry required for unearned rent on December 31, 20Y2.
Set up an Unearned Fees T-account. Recall that the unearned revenue account is decreased (debited) for the amount of the revenue that has been earned, and the related revenue account is increased (credited). The balance before adjustment will be the normal balance for the unearned liability account. The number given for the end of the year is to be the new balance after adjusting out the revenue earned. What amount is this difference between the pre-adjustment balance and the post-adjustment balance?
Answer:
oshe mush have been out of her head
Explanation:
0she lost her dog in the microwave
Crazy Mountain Outfitters Co., an outfitter store for fishing treks, prepared the following unadjusted trial balance at the end of its first year of operations:
Crazy Mountain Outfitters Co. Unadjusted Trial Balance April 30, 20Y5
Debit Balances Credit Balances
Cash 11,400
Accounts Receivable 72,600
Supplies 7,200
Equipment 112,000
Accounts Payable 12,200
Unearned Fees 19,200
Common Stock 20,000
Retained Earnings 117,800
Dividends 10,000
Fees Earned 305,800
Wages Expense 157,800
Rent Expense 55,000
Utilities Expense 42,000
Miscellaneous Expense 7,000
475,000 475,000
For preparing the adjusting entries, the following data were assembled:
a. Supplies on hand on April 30 were $1,380.
b. Fees earned but unbilled on April 30 were $3,900.
c. Depreciation of equipment was estimated to be $3,000 for the year.
d. Unpaid wages accrued on April 30 were $2,475.
e. The balance in unearned fees represented the April 1 receipt in advance for services to be provided. Only $14,140 of the services was provided between April 1 and April 30.
Required:
1. Journalize the adjusting entries necessary on April 30. 2016.
2. Determine the revenues, expenses, and net income of Crazy Mountain Outfitters before the adjusting entries.
3. Determine the revenues, expense, and net income of Crazy Mountain Outfitters G after the adjusting entries.
4. Determine the effect of the adjusting entries on Retained Earnings.
Answer:
Required 1.
a.
Supplies Inventory $1,380 (debit)
Income Statement $1,380 (credit)
b.
Cash $3,900 (debit)
Un-earned Fees $3,900 (credit)
c.
Depreciation $3,000 (debit)
Accumulated Depreciation $3,000 (credit)
d.
Wages Expenses $2,475 (debit)
Wages Accrued $2,475 (credit)
e.
Unearned Fees $14,140 (debit)
Fees Earned $14,140 (credit)
Required 2.
Fees Earned 305,800
Less Expenses :
Wages Expense (157,800)
Rent Expense (55,000 )
Utilities Expense (42,000 )
Miscellaneous Expense (7,000)
Net Income / (loss) 44,000
Required 3.
Fees Earned (305,800 + 14,140) 319,940
Less Expenses :
Wages Expense (157,800 + 2,475) (160,275)
Rent Expense (55,000 )
Utilities Expense (42,000 )
Miscellaneous Expense (7,000)
Depreciation (3,000)
Net Income / (loss) 52,665
Required 4.
Effect = Increase by $8,665
Explanation:
Required 3.
Make the following Adjustments :
Increase the Fees EarnedIncrease the Wages ExpenseInclude the Depreciation Expense in Net Income calculation.Required 4
Adjust the Retained Earnings with items affecting the Income Statement.
Retained Earnings $117,800
Less Depreciation Expense ($3,000)
Less Wages Accrued ($2,475)
Add Fees Earned $14,140
Adjusted Retained Earnings $126,465
Conclusion :
Effect = Increase
Amount = $126,465 - $117,800 = $8,665
Heidee Corp. and Leaudy Corp. have identical assets, sales, interest rates paid on their debt, tax rates, and EBIT. However, Heidee uses more debt than Leaudy. Which of the following statements is CORRECT?
A) Heidee would have the higher net income as shown on the income statement.
B) Without more information, we cannot tell if Heidee or Leaudy would have a higher or lower net income.
C) Heidee would have the lower equity multiplier for use in the Du Pont equation.
D) Heidee would have to pay more in income taxes.
E) Heidee would have the lower net income as shown on the income statement.
Answer:
E) Heidee would have the lower net income as shown on the income statement.
Explanation:
Heidee and Leaudy have the same Earning Before Interest and Taxes (EBIT).
They both also have the same interest rate paid on debt.
So if Heidee uses more of their debt than Leaudy it means they will incur more interest payment on debt.
This will result in less income for the company.
On the other hand Leaudy uses less debt so their interest expense is low and income is higher.
Heidee would have the lower net income as shown on the income statement.
The net income reported on the income statement for the current year was $261000. Depreciation was $39900. Account receivable and inventories decreased by $11800 and $34900, respectively. Prepaid expenses and accounts payable increased, respectively, by $1100 and $8300. How much cash was provided by operating activities?
Answer:
$ 354,800.00
Explanation:
The net cash amount provided by operating activities in the year is determined by adding depreciation to net income as well as the decrease in both accounts receivable and inventories.
There is also the need to to deduct increase in prepaid expenses and add the increase in accounts payable as done below:
net cash provided by operating activities=$261,000+$39,900+$11,800+$34,900-$1,100+$8,300=$354,800.00