Answer:
Dr cash $407,000
Cr bonds payable $407,000
July 1
Dr interest expense $ 18,315.00
Cr cash $ 18,315.00
December 31
Dr interest expense $ 18,315.00
Cr interest payable $ 18,315.00
Explanation:
The bond was issued at face value of $407,000 which means that cash of $407,000 was received which is to be debited to cash account and bonds payable account credited for the same amount.
On July1 ,interest coupon of $ 18,315.00 ($407,000*8%*6/12) was paid which means that interest expense is debited with $ 18,315.00 while cash is credited.
On 31 December ,interest coupon of $ 18,315.00 ($407,000*8%*6/12) was due which means that interest expense is debited with $ 18,315.00 while interest payable is credited.
On December 31, the following data were accumulated for preparing the adjusting entries for Bellingham Realty: • The supplies account balance on December 31 is $5,635. The supplies on hand on December 31 are $1,495. • The unearned rent account balance on December 31 is $4,600 representing the receipt of an advance payment on December 1 of four months’ rent from tenants. • Wages accrued but not paid at December 31 are $2,035. • Fees earned but unbilled at December 31 are $15,450. • Depreciation of office equipment is $4,420. Required: 1. Journalize the adjusting entries required at December 31. Refer to the Chart of Accounts for exact wording of account titles. 2. What is the difference between adjusting entries and correcting entries?
Answer and Explanation:
Date Adjusting entries Debit Credit Asset Liabilities Equity
Dec 31 Supplies Expense $4,140 Decrease
To Supplies $4,140 Decrease
(Being the supplies expense is recorded)
It is computed below:
= Account balance - still on hand
= $5,635 - $1,495
= $4,140
Dec 31 Unearned Rent revenue $1,150 Decresae
To Rent revenue $1,150 Increase
(Being the unearned rent revenue is recorded)
It is computed below:
= $4,600 ÷ 4 months
= $1,150
Dec 31 Wages Expense $2,035 Decrease
To Wages payable $2,035 Increase
(Being the wages expense is recorded)
Dec 31 Accounts Receivable $15,450 Increase
To Fees earned $15,450 Increase
(Being the fees earned is recorded)
Dec 31 Depreciation expense $4,420 Decrease
To Accumulate depreciation
- Office Equipment $4,420 Decresae
(Being the depreciation expense is recorded)
2 Adjusting entries are the entries that are to be adjusted at the end of the accounting period but it is planed but the correcting entries are not planned it is required when we want to just correct the errors
Acme Products manufactures and markets a product called Grow Tall. Acme claims in its advertising that Grow Tall will make its users grow a minimum of six inches taller than their current height. The Federal Trade Commission (FTC) will likely find that the ad is
Answer: a. deceptive, and the FTC may issue a cease-and-desist order.
Explanation:
A product that can increase human height by 6 inches sounds highly improbable and so is deceptive to people.
The Federal Trade Commission in it's role as a protector of Consumers from.unfair and deceitful practices in Commerce can act against Acme to stop them from deceiving the consumer.
One of the ways that the FTC can do this is by issuing a Cease and Desist order to Acme and if they fail to do so, can then take them to Court.
All of the following are techniques being used to make data centers more "green" except:________.
a) use of hydropower.
b) air-cooling.
c) use of wind power.
d) use of backup generators.
e) virtualization.
Answer:
d) use of backup generators.
Explanation:
Going green is a term used for practices that protect the environment by reducing, reusing and recycling resources. It involves engaging in ecologically friendly decisions and lifestyles with a view of preserving natural resources for future generations.
The use of backup generator causes production of green house gases like carbon dioxide. Green house gases erode the ozone layer and increases global warming.
The other options like use of hydropower, air cooling, use of wind power, and virtualisation do not have adverse effect on the environment.
Marina had an accident with her car and the repair bill came to $900. She didn't have any emergency fund money and no extra
money in her monthly budget, so she ended up borrowing from a pay-day loan company. As long as she can pay the loan back at
the end of the 30 day period she won't be charged any interest, technically. However, she did have to pay an $18 processing fee
per $100 that she borrowed.
If she were to consider the processing fee to represent interest paid in her formula, what would she discover to
be the annual interest rate she was charged on her short term loan?
Answer:
216%
Explanation:
Ordinary interest is computed on the basis of a 360-day year, so Marina's borrowing period is 1/12 of a year. The annual rate is then 12 times the rate Marina pays for 30 days:
12 × 18/100 = 216/100 = 216%
Marina would discover the annual interest rate is 216%.
Demographic studies show that the proportion of teenagers and minorities in the U.S. population is likely to increase in the near future. In your opinion, what implications, if any, will this trend have on the unemployment rate?
Answer:
Demographic Studies and Increased Proportion of Teenagers and Minorities
Implications of the Trend on the Unemployment Rate:
a) Labor Force Participation Rate: If the population of teenagers and minorities increase proportionately in the near future, there will be an increase in the labour force participation rate. This means that more people are vying for the available jobs. This puts pressure on the economy to create more sustainable jobs. However, this holds true if all other things are held constant. Obviously, the increased population of these demographic groups will push industries to create jobs in pursuit of the huge demand placed by the groups for more goods and services.
b) Increased Industrial growth reduces the unemployment rate. The resulting increased demand for goods and services required by these groups will increase industrial growth. This will in its turn reduce the unemployment rate.
c) Another implication of the trend on the unemployment rate is that the increased population of these groups will lead to social mobility. Social mobility happens when people move out of their social class to lower or better social classes. Social mobility affects the unemployment rate in any demography. When educated people accept menial jobs, while it may appear that they are working, they are obviously still within the unemployment bracket because they will be searching for jobs.
Explanation:
a) Unemployment rate is the number of unemployed people as a percentage of the labor force. The labor force comprises those who are unemployed plus those who are in paid or self employment.
b) Demographic studies are the studies conducted about a population based on factors such as age, race, and sex.
The Rehe Comany sells its razors at $3 per unit. The company uses a first-in, first-out actual costing system. A fixed manufacturing cost rate is computed at the end of each year by dividing the actual fixed manufacturing costs by the actual production units. The following data are related to its first two years of operation:
2011 2012
Sales 1000 units
1200 units
Costs:
Variable manufacturing
Fixed manufacturing
Variable operating (marketing)
Fixed operating (marketing)
$ 700
700
1000
400
$ 500
700
1200
400
1. Prepare income statements based on variable costing for each of the two years.
2. Prepare income statements based on absorption costing for each of the two years.
3. Prepare a numerical reconciliation and explanation of the difference between operating income for each year under absorption costing and variable costing.
4. Critics have claimed that a widely used accounting system has led to undesirable buildups of inventory levels. (a) Is variable costing or absorption costing more likely to lead to such buildups? Why? (b) What can be done to counteract undesirable inventory buildups?
Answer:
2011 2012
Sales 1000 units 1200 units
Production 1400 1000
Costs:
Variable manufacturing $700 $500
per unit $0.50
Fixed manufacturing $700 $700
Variable operating (marketing) $1000 $1200
Fixed operating (marketing) $400 $400
cogs under absorption costing 2011 = ($1,400 / 1,400) x 1,000 = $1,000
cogs under absorption costing 2012 = $400 + ($1,200 / 1,000) x 800 = $1,360
1. INCOME STATEMENTS
VARIABLE COSTING
2011 2012
Total sales revenue: $3,000 $3,600
Opening inventory: ($0) ($200)
Variable manufacturing: ($700) ($500)
Ending inventory: $200 $100
Gross contribution margin: $2,500 $3,000
Variable operating: ($1,000) ($1,200)
Contribution margin: $1,500 $1,800
Fixed manufacturing: ($700) ($700)
Fixed operating: ($400) ($400)
Net operating income: $400 $700
2. INCOME STATEMENTS
ABSORPTION COSTING
2011 2012
Total sales revenue: $3,000 $3,600
COGS: ($1,000) ($1,360)
Gross margin: $2,000 $2,240
Operating costs: ($1,400) ($1,600)
Net operating income: $600 $640
3. Under variable costing, closing inventory = 400 units x $0.50 (variable production costs per unit) = $200.
Under absorption costing, closing inventory = 400 units x $1 (production cost per unit) = $400
Since closing inventory is $200 higher under absorption costing, then net operating income during 2011 increases by $200.
4. a) Variable costing is more likely to result in inventory buildups. Since variable costing determines the value of closing inventory only using variable manufacturing costs, their value is much lower. E.g. in this case the value of closing inventory 2011 under variable costing is $200, while under absorption costing it is $400. This means that less costs are transferred from one year to another.
b) Cost of goods sold must include all production costs (both variable and fixed). This way COGS costs cannot be over estimated during one year and under estimated the next.
Consider the following scenario and Identify which formal research method would be appropriate.
1. You are preparing a comprehensive report on telecommunication practices in your industry. You need some background information on the history of Internet use in professional environments.
A. Access traditional sources and electronic sources.
B. Conduct primary research for firsthand information.
C. Conduct a scientific experiment. Routine tasks often require informal research methods.
2. Identify which informal research technique would be most appropriate for each situation. After complaining about parking accommodations at your office, you have been asked by your boss to propose a simple solution that will satisfy your coworkers. The best informal information gathering technique for this situation would be to:_______.
A. Talk with your boss.
B. Conduct an informal survey
C. Look in the files.
3. Read the following scenario, and determine which is the best research approach.
While working for an international development agency, you must develop a presentation about primary and secondary education in the Middle East, a topic you are not familiar with. Which is the best research approach?
A. Formal. On the Internet, find statistics gathered by the United Nations showing the dropout rates of students by gender and age. Request that certain reports be sent to you, so you can examine the date yourself.
B. Informal. To get a local perspective on Middle Eastern affous, we nema to a professor there.
C. Informal. To get a local perspective on Middle Easter affairs, conduct a one survey of me who live in the area.
Answer: 1. A. Access traditional sources and electronic sources.
2. B. Conduct an informal survey
3. A. Formal. On the Internet, find statistics gathered by the United Nations showing the dropout rates of students by gender and age. Request that certain reports be sent to you, so you can examine the date yourself.
Explanation:
1. This is a research into the history of the internet in professional Environments. Considering how long the internet has been around which isn't too long but long enough that first hand information is not readily available, consulting Traditional sources and Electronic sources is the best way to go.
It will have information from the past that you can use to come up with a chronological report on the use of the internet in a professional setting.
2. This is not a serious research and involves your immediate surroundings so an informal method can be used. The best informal method would be an informal survey amongst your co-workers who are also affected by the problem. This survey will help you come up with a solution faster and easier because you are getting first hand information from those directly affected.
3. You are working for an International Development Agency and as such can not afford to present information that is false or void of due procedure in way because it will affect the reputation of the Agency if you do so.
For this reason your sources must be formal sources with definite information and the United Nations is a very good source for that. To go a step further you can request reports and double check the figures yourself to ensure that the information used is of the highest quality and accuracy.
At Jose's Bakersfield Espresso, Jose charges $3.50 for an average cup of espresso. If his fixed cost (salary, insurance, etc.) are $100,000 a year, and the variable cost for each cup of espresso are $1.25.
A) State the total fixed cost
B) State the variable cost
C)State the price
D) Given the available data, at what quantity will Jose's Bakersfield Espresso break even?
Answer:
A. $100,000
B. $1.25 per unit
C. $3.5 per unit
D. Break even point = 44,444 units
Explanation:
Break even point denotes that level of sales at which total costs equal or even total revenues.
Contribution represents the sales revenue in excess of variable costs to cover up for fixed costs.
Break even point in units = [tex]\frac{Fixed\ Cost}{Contribution\ per\ unit}[/tex]
Contribution per unit = Selling price per unit - Variable cost per unit
Contribution per unit = $3.50 - $1.25 = $2.25
Break even point = [tex]\frac{100,000}{2.25}[/tex] = 44,444 units approx.
Carmen Camry operates a consulting firm called Help Today, which began operations on August 1. On August, the company's records show the following accounts and amounts for the month of August.Cash 25,370Accounts receivable 22,370Office supplies 5,260Land 44,010Office equipment 20,020Accounts payable 10,540Dividends 6,020Consulting fees earned 27,010Rent expense 9,570Salaries expense 5,620Telephone expense 880Miscellaneous expenses 530Conmon stock 102,100Use the above information to prepare an August statement of retained earnings for Help Today (Hint Net income: $10,410)
Answer:
Help Today
Statement of Retained Earnings
For the Month Ended on August 31, 202X
Retained earnings at the beginning of the period: $0
Net income: $10,410
Dividends: ($6,020)
Retained earnings at the end of the period $4,390
Explanation:
Balance Sheet
Assets:
Cash $25,370
Accounts receivable $22,370
Office supplies $5,260
Land $44,010
Office equipment $20,020
Total assets: $117,030
Liabilities and Equity:
Accounts payable $10,540
Common stock $102,100
Total liabilities and equity: $112,640
Retained earnings ⇒ assets - (liabilities + equity) = $117,030 - $112,640 = $4,390
Another way to calculate retained earnings = net income - dividends = $10,410 - $6,020 = $4,390
Dividends 6,020
As a manager your organization is constantly confronted with a variety of changes in the market or a wide range of situations. You have to recruit and select a manager for a group of employees responsible for several related products. You have just read about Fiedler’s Contingency model and decided to use the LPC score to aid you in selecting a leader for the management group. You have interviewed four candidates for the job (Erin, Josh, Michael, Tabitha) and the scores for each of the candidates were Erin=high LPC, Josh=moderately high LPC, Michael=middle LPC, Tabitha=low LPC. Which of the candidates would you hire?A. ErinB. JoshC. MichaelD. TabithaE. None of these.
Answer:
C. Michael
Explanation:
The least preferred coworker scale is a method used to determine the leadership style of individuals. It was developed by Fred Fiedler and American scholar.
When a person gives positive feedback on coworkers they are more relationship oriented and get a high LPC score.
For those that give negative feedback on coworkers, they are task oriented and will get low LPC scores.
Relationship oriented style is used when employees are experienced and know what to do, while task oriented leadership is needed when the team is less experienced or results need to be delivered in a short time.
The organization is constantly confronted with a variety of changes in the market or a wide range of situations. So this requires a mix of both relationship and task oriented leadership to adapt to changing organisational needs.
Michael is the best option with middle LPC score.
From the following list of steps in the accounting cycle, identify what two steps are missing: Transactions are analyzed and recorded in the journal. An unadjusted trial balance is prepared. Adjustment data are assembled and analyzed. An optional end-of-period spreadsheet is prepared. Adjusting entries are journalized and posted to the ledger. An adjusted trial balance is prepared. Closing entries are journalized and posted to the ledger. A post-closing trial balance is prepared. Select the steps in the accounting cycle in their proper order in order and include the two missing steps.
Answer:
The Accounting Cycle refers to the process of recording and analyzing the transactions of a business into it's books so that proper financial statements may be recorded and used.
It happens in 10 steps which are;
1. Transactions are analyzed and recorded in the journal.
2. Transactions are posted to the ledger. ( Missing)
3. An unadjusted trial balance is prepared.
4. Adjustment data are assembled and analyzed.
5. An optional end-of-period spreadsheet (work sheet) is prepared.
6. Adjusting entries are journalized and posted to the ledger.
7. An adjusted trial balance is prepared.
8. Financial statements are prepared. (Missing)
9. Closing entries are journalized and posted to the ledger.
10. A post-closing trial balance is prepared.
Step 2
After posting transactions to their journals, the transactions go to the General ledger.
Step 8.
Using the details from the adjusted trial balance, the Financial Statements can then be prepared with the correct figures.
The Coca-Cola Company and PepsiCo, Inc. provide refreshments to every corner of the world. Suppose selected data from recent consolidated financial statements for The Coca-Cola Company and for PepsiCo, Inc. are presented here (in millions).
Coca-Cola PepsiCo
Total current assets $17,551 $12,571
Total current liabilities 13,721 8,756
Net sales 30,990 43,232
Cost of goods sold 11,088 20,099
Net income 6,824 5,946
Average (net) accounts
receivable for the year 3,424 4,654
Average inventories
for the year 2,271 2,570
Average total assets 44,595 37,921
Average common
stockholders’ equity 22,636 14,556
Average current liabilities 13,355 8,772
Average total liabilities 21,960 23,466
Total assets 48,671 39,848
Total liabilities 23,872 23,044
Income taxes 2,040 2,100
Interest expense 355 397
Net cash provided by
operating activities 8,186 6,796
Capital expenditures 1,993 2,128
Cash dividends 3,800 2,732
Collapse question part
(a1)
Compute the following liquidity ratios for Coca-Cola and for PepsiCo. (Round current ratio to 2 decimal places, e.g. 6.25 and all other answers to 1 decimal place, e.g. 15.1.)
Coca-Cola PepsiCo
(1) Current ratio : 1 : 1
(2) Accounts receivable turnover times times
(3) Average collection period days days
(4) Inventory turnover times times
(5) Days in inventory days days
Answer:
Please find the detailed answer in the explanation section.
Explanation:
1. Current ratio = total current assets ÷ total current liabilities
For Coca-cola: $17,551 ÷ 13,721
= 1.28
For Pepsi : $12,571 ÷ $8,756
= 1.44
2.Accounts receivable turnover times times = Net sales ÷ average (net) accounts receivable
For Coca-cola: $30,990 ÷ $3,424
= 9.1
For Pepsi : $43,232 ÷ $4,654
= 9.3
3. Average collection period days days = (Accounts Receivable ÷ Net sales ) x 365 days
For coca-cola: ($3,424 ÷ 30,990) x 365 days
=40.3 days
For pepsi: ($4,654 ÷ $43,232) x 365 days
= 39.3 days
4. Inventory turnover times = Sales ÷ Inventory
For Coca-cola: $30,990 ÷ $2,271
=13.6
For Pepsi: $43,232 ÷ $2,570
=16.8
5.Days in inventory days = (Average Inventory ÷ Cost of sales) x 365 days
For Coca-cola: ($2,271 ÷ $11,088 ) x365 days
=74.8 days
For Pepsi: ($2,570 ÷ $20,099 ) x365 days
=46.7days
Isabella files her income tax return 35 days after the due date of the return without obtaining an extension from the IRS. Along with the return, she remits a check for $40,000, which is the balance of the tax she owes.Note: Assume 30 days in a month.Disregarding the interest element, enter Isabella's failure to file penalty and and failure to pay penalty.
Answer:
a. Failure to pay penalty = 400
b. Failure to file penalty = $4,000
Explanation:
The monthly rate for failure to pay penalty is 0.5% while the failure to file penalty.
Since it is assumed that there are 30 days in a month, the 35 days after the due date of the return without obtaining an extension from the IRS is will be counted as 2 months regardless of the fact that the second month is just 5 files when she filed.
Therefore, we have:
a. Failure to pay penalty = $40,000 * 0.5% * 2 = 400
b. Failure to file penalty = ($40,000 * 5% * 2) = $4,000
c. Total penalties = (Failure to file penalty - failure to pay penalty for the same period) + Failure to pay penalty = ($4,000 - $400) + $400 = $4,000.
Therefore, the total penalty Isabella will pay is $4,000.
Which two answers identify the two middle core processes, i.e. core process 3 and 4? (choose two)
a. Build and test the system
b. Plan and monitor the project
c. Understand the details of the problem
d. Design the components
Answer:
c. Understand the details of the problem
d. Design the components
Explanation:
Systems development life cycle (SDLC) consists of six main phases:
System planningSystem analysis: involves understanding the details of the problem to be solved by the proposed system. What are the end-users' requirements and expectations?System design: involves designing the components, elements interfaces and architecture of the proposed system. System implementation and deploymentSystem testing and integrationSystem maintenance. Gwen is leading a meeting and wants to make sure that they stick to the agenda and end on time. What should she do to move the meeting along? a. Say as much as possible during the meeting. b. Move divergent topics to a separate list to be discussed later. c. Not worry so much about time; the most important thing is to make sure that all agenda items are discussed fully. d. Ask anyone who monopolizes the conversation to leave.
Answer:
b.
Explanation:
When leading a meeting with many different topics, the best way to move the meeting along faster so that it ends in time is to move divergent topics to a separate list to be discussed later. This would remove the unimportant topics from that specific meeting and allow the very specific important topics to be discussed thoroughly in that meeting, thus moving it along but still being as efficient as possible. The divergent topics can be scheduled to be discussed at a later date when they are of a higher priority.
Consider the following data for two products of Gitano Manufacturing. (Loss amounts should be indicated with a minus sign. Round your intermediate calculations and "OH rate and cost per unit" answers to 2 decimal places.)
Product A Product B
Number of units produced 11,500 units 1.700 units
Direct labor cost ($29 per DLH) 0.16 DLH per unit 0.24 DLH per unit
Direct materials cost $2.10 per unit $3.10 per unit
Activity Overhead costs
Machine setup $94,104
Materials handling 53,000
Quality control inspections 73.200
$220,304
Required
a. Using direct labor hours as the basis for assigning overhoad costs, determine the total production cost per unit for each product line.
b. If the market price for Product A is $28.68 and the market price for Product B is $58, determine the profit or loss per unit for each.
c. Consider the following additional information about these two product lines. If ABC is used for assigning overhead costs to what is the cost per unit for Product A and for Product B?
Answer:
a. Product A $257,830 , Product B $57,086
b. Product A $71,990 , Product B $41,514
c. Hie, for this part of the question there is missing information regarding the Activities for the two Products for each Activity Center.
However the Procedure to deal with the required is explained below :
Step 1 : Determine the Overhead Absorption Rate for Each Activity Center
(We have three Activity Centers: Machine setup, Materials handling: Quality control inspections )
Overhead Absorption Rate = Total Overhead (for each) / Total Number of Activity
Step 2: Absorb the Costs in the products using the Rate for each cost center and the number of activity incurred in each cost center for the two Products
Overhead (Activity Center) = Overhead Absorption Rate× Activity Specific to the Product.
Step 3 : Determine the Total Costs
Total Cost for one Product would include the Total Costs for each Activity Center (which are your overheads) plus the Direct Labor and Direct Material Costs as Calculated in Part b.
Explanation:
Part a
Total Production Cost = Direct Costs + Indirect costs (overheads)
First determine the predetermined rate based on direct labor hours.
Total direct labor hours.
Product A (11,500×0.16) = 1,840
Product B (1.700×0.24) = 408
Total = 2,248
Predetermined rate = total overhead cost / total direct labor hours
= $220,304 / 2,248
= $98 per labor hour
Assigning Overhead Cost
Total Overhead Costs
Product A (1,840×$98) = 180,320
Product B (408×$98) = 39,984
Total = 220,304
Total Costs
Product A Product B
Direct labor cost
Product A ( 1,840×$29) 53,360
Product B (408×$29) 11,832
Direct materials cost
Product A ( 11,500×$2.10) 24,150
Product B (1.700×$3.10) 5,270
Overheads
Product A 180,320
Product B 39,984
Total Costs 257,830 57,086
Part b.
Profit = Selling Price - Expenses
Product A Product B
Sales
Product A ( 11,500×$28.68) 329,820
Product B (1.700×$58) 98,600
Manufacturing Costs (257,830) (57,086)
Profit 71,990 41,514
Prist Co. had not provided a warranty on its products, but competitive pressures forced management to add this feature at the beginning of 2016. Based on an analysis of customer complaints made over the past two years, the cost of a warranty program was estimated at 0.2% of sales. During 2016, sales totaled $4,208,000. Actual costs of servicing products under warranty totaled $19,900.
Required:
Record the journal entry to show the effect of having the warranty program during 2019. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)
Answer:
Event 1:
Debit Warranty expense for $8.416.
Credit Warranty liability $8,416.
Event 2:
Debit Warranty liability for $8,416.
Debit Warranty expenses for $11,484.
Credit Cash for $19,900.
Explanation:
Estimated warranty liability = $4,208,000 * 0.2% = $8,416.
Excess of actual and over extimated warranty liability = $19,900 - $8,416 = $11,484
The journal entries will look as follows:
Details Dr ($) Cr ($)
Warranty expense 8.416
Warranty liability 8,416
(To record the estimated warranty liability).
Warranty liability 8,416
Warranty expenses 11,484
Cash 19,900
(To record actual warranty cost).
The journal entries for representing the effect to having the warranty program is shown below.
Journal entries:Warranty expense(4208000*0.2%) 8416
Extended Warranty Liabilities 8416
(Being warranty expense is recorded)
Here warranty expense is debited as it increased the expense and credited the warranty liabilities because it also increased the liabilities
Extended Warranty Liabilities 8416
Warranty expense (19900-8416) 11484
Cash 19900
(Being cash paid is recorded)
Here liabilities and expense is debited because it decreased the liabilities and increase the expenses while on the other hand, the cash is credited as it decreased the assets.
Learn more about journal entry here: https://brainly.com/question/24741269
Minstrel Manufacturing uses a job order costing system. During one month, Minstrel purchased $201,000 of raw materials on credit; issued materials to production of $198,000 of which $27,000 were indirect. Minstrel incurred a factory payroll of $153,000, of which $37,000 was indirect labor. Minstrel uses a predetermined overhead application rate of 150% of direct labor cost. If Minstrel incurred total overhead costs of $180,000 during the month, compute the amount of under- or overapplied overhead:
Answer:
Underapplied overhead= $6,000
Explanation:
Giving the following information:
Direct labor= $153,000 - $37,000= $116,000
The predetermined overhead application rate= 150% of direct labor cost.
Actual overhead= $180,000
First, we need to allocate overhead:
Allocated MOH= Estimated manufacturing overhead rate* Actual amount of allocation base
Allocated MOH= 116,000*1.5= $174,000
Now, we can calculate the over/under allocation:
Under/over applied overhead= real overhead - allocated overhead
Under/over applied overhead= 180,000 - 174,000
Under/over applied overhead= $6,000 underallocated
Novak Corporation is preparing its 2014 statement of cash flows, using the indirect method. Presented below is a list of items that may affect the statement. Using the code below, indicate how each item will affect Novak’s 2014 statement of cash flows.
Code Letter
Effect
A Added to net income in the operating section
D Deducted from net income in the operating section
R-I Cash receipt in investing section
P-I Cash payment in investing section
R-F Cash receipt in financing section
P-F Cash payment in financing section
N Noncash investing and financing activity
(a) Purchase of land and building.
AR-I and DR-IR-F and ADR-F and DP-FP-IR-FNR-I and A
(b) Decrease in accounts receivable.
R-F and AR-FNR-I and DR-I and ADR-F and DAP-FR-IP-I
(c) Issuance of stock.
R-FAR-IDP-FR-F and AP-IR-F and DNR-I and DR-I and A
(d) Depreciation expense.
R-IP-FP-IR-F and DR-FNR-F and AR-I and AR-I and DAD
(e) Sale of land at book value.
R-F and DP-IADR-FR-IP-FNR-I and DR-I and AR-F and A
(f) Sale of land at a gain.
DR-I and DNR-IR-FR-F and AR-I and AR-F and DP-IAP-F
(g) Payment of dividends.
R-I and AP-IP-FDNAR-I and DR-IR-FR-F and DR-F and A
(h) Increase in accounts receivable.
R-F and ANAP-FP-IR-FR-I and DR-IR-I and AR-F and DD
(i) Purchase of available-for-sale investment.
ADR-I and DR-I and AR-F and DR-F and AP-FR-FNR-IP-I
(j) Increase in accounts payable.
R-F and DDR-F and AAR-IP-IR-FNR-I and DP-FR-I and A
(k) Decrease in accounts payable.
R-I and DNP-FR-F and AR-IR-I and AR-F and DDAP-IR-F
(l) Loan from bank by signing note.
R-I and DR-I and ANP-IDP-FR-F and DR-F and AAR-IR-F
(m) Purchase of equipment using a note.
R-F and DP-IR-FR-I and ANR-F and AP-FR-IR-I and DAD
(n) Increase in inventory.
NR-IP-FR-FP-IDR-I and DR-I and AAR-F and AR-F and D
(o) Issuance of bonds.
AP-FR-F and DNR-I and DR-F and ADR-FR-IP-IR-I and A
(p) Redemption of bonds payable.
R-I and DR-I and AR-IR-F and DP-FR-F and ADP-IANR-F
(q) Sale of equipment at a loss.
R-F and DNR-F and AR-I and DADR-I and AR-FR-IP-IP-F
(r) Purchase of treasury stock.
Answer: The answers are provided below
Explanation:
a) Purchase of land and building = P-I
This will be a cash payment in investing section
b) Decrease in accounts receivable = A
This will be added to the net income in the operating section
c) Issuance of stock = R-F
This will be a cash receipt in financing section
d) Depreciation expense = A
This will be added to the net income in the operating section
e) Sale of land at book value = R-I
This will be a cash receipt in investing section.
f) Sale of land at a gain = R-I and D
This will be a cash receipt in investing section and deducted from the net income in the operating section
g) Payment of dividends = P-F
This will be a cash payment in financing section
h) Increase in accounts receivable = D
This will be deducted from net income in the operating section
i) Purchase of available-for-sale investment = P-I
This will be a cash payment in investing section
j) Increase in accounts payable = A
This will be added to the net income in the operating section
k) Decrease in accounts payable = D
This will be deducted from net income in the operating section
l) Loan from bank by signing note = R-F
This will be a cash receipt in financing section
m) Purchase of equipment using a note = N
This will be a noncash investing and financing activity
n) Increase in inventory = D
This will be deducted from net income in the operating section
o) Issuance of bonds = R-F
This will be a cash receipt in financing section
p) Retirement of bonds payable = P-F
This will be a cash payment in financing section
q) Sale of equipment at a loss = R-I and A
This will be a cash receipt in investing section and will be added to the net income in the operating section
r) Purchase of treasury stock = P-F
This will be a cash payment in financing section
In the context of the competitive environment of business, unlike leading-edge firms, bleeding-edge firms offer products just as the market becomes ready to embrace them. a. True b. False
Answer:
False
Explanation:
Bleeding edge firms provide products that are untested and carry a high risk. Products are unreliable and lead adopters stand the risk of making big losses in event that the product is not well received in the market
Leading edge firms on the other hand deal in products that are well tested and accepted by the market.
So the statement that - unlike leading-edge firms, bleeding-edge firms offer products just as the market becomes ready to embrace them. Is not true
Products offered by bleeding edge firms are not embraced by the market as they are untested and risky
The following items are reported on a company's balance sheet: Cash $510,000 Marketable securities 398,500 Accounts receivable (net) 338,900 Inventory 346,500 Accounts payable 693,000 Determine (a) the current ratio and (b) the quick ratio. Round to one decimal place. a. Current ratio b. Quick ratio
Answer:
Current ratio= 2.3
Quick ratio= 1.8
Explanation:
Cash=$510,000
Marketable securities= $398,000
Account receivables= $338,900
Inventory= $346,000
Account payable = $693,000
Curent ratio= current assets/current liability
Current assets= cash+ marketable securities+ Account receivables+inventory
Current liability= Account payable
($510,000+$398,000+$338,900+$346,000)/$693,000
= $1,592,900/$693,000
= 2.29
Current ratio = 2.3 ( to 1 decimal place)
ii) Quick ratio= ( cash+ marketable securities+ Account receivable)/Current liability
=$510,000+$398,000+$338,900/$693,000
= $1,246,900/$693,000
= 1.79.
Quick ratio = 1.8 ( to 1 decimal place)
Answer: Current ratio 2.3
Quick ratio 1.8
Explanation:
Given Data:
Cash = $510,000
Marketable securities = $398,500
Account receivable ( net) = $338,900
Inventory = $346,500
Accounts payable = $693,000
( a.) The current ratio : this helps to determine the relationship between current assets and current liabilities
= current assets / current liabilities
Currents assets = ( cash + marketable securities + inventory + account receivable )
= $( 510,000 + 398,500 + 338,900 + 346,500)
= $1,593,900
Current liabilities = $693,000
Current ratio = $1,593,900 / $693,000
= 2.3
(b) Quick ratio is the ratio of quick asset against current liabilities.
Quick assets ( cash + marketable securities + accounts receivable)
= $( 510,000 + 398,500 + 338,900)
= $1,247,400
Quick ratio = $1,247,400 / $693,000
= 1.8
Macro-economiscs college level .
Answer/Explanation:
A. Increase in import WOULD NOT lead to a decrease in national income because it would lead to increase in revenue derived from import duties.
B. A decrease in interest (leakage) WOULD lead to decrease in national income because it will increase borrowing and reduces investment.
C. A decrease in money supply (money available in an economy) WOULD NOT lead to decrease in national income because it reduces inflational rate.
D. An increase in exchange rate WOULD lead to decrease in national income because it would encourage capital flight.
E. A decrease in foreign income WOULD lead to decrease in national income because it reduces revenue earnings.
Goodwill should:________.
a. be written off as soon as possible against retained earnings.
b. absent impairment, not be written off because it has an indefinite life.
c. written off as soon as possible as an expense.
d. amortized over a maximum of forty years.
Answer:
d.amortized over a maximum of forty years
a. On February 15, paid $130,000 cash to purchase GMI's 90-day short-term notes at par, which are dated February 15 and pay 6% interest (classified as held-to-maturity).
b. On March 22, bought 1,000 shares of Fran Inc. common stock at $35 cash per share. Cancun's stock investment results in it having an insignificant influence over Fran.
c. On May 15, received a check from GMI in payment of the principal and 90 days' interest on the notes purchased in part a.
d. On July 30, paid $39,000 cash to purchase MP Inc.'s 5% , six-month notes at par, dated July 30 (classified as trading securities).
e. On September 1, received a $0.42 per share cash dividend on the Fran Inc. common stock purchased in part b.
f. On October 8, sold 500 shares of Fran Inc. common stock for $41 cash per share.
g. On October 30, received a check from MP Inc. for three months’ interest on the notes purchased in part d.
Prepare journal entries to record the above transactions involving both the short-term and long-term investments of Cancun Corp., all of which occurred during the current year. (Use 360 days in a year. Do not round your intermediate calculations. Round your answers to the nearest whole dollar.)
Answer:
a. On February 15, paid $130,000 cash to purchase GMI's 90-day short-term notes at par, which are dated February 15 and pay 6% interest (classified as held-to-maturity).
Dr Investment in GMI's notes - HTM 130,000
Cr Cash 130,000
b. On March 22, bought 1,000 shares of Fran Inc. common stock at $35 cash per share. Cancun's stock investment results in it having an insignificant influence over Fran.
Dr Investment in Fran inc. stocks 35,000
Cr Cash 35,000
c. On May 15, received a check from GMI in payment of the principal and 90 days' interest on the notes purchased in part a.
Dr Cash 131,950
Cr Investment in GMI's notes - HTM 130,000
Cr Interest revenue 1,950
d. On July 30, paid $39,000 cash to purchase MP Inc.'s 5% , six-month notes at par, dated July 30 (classified as trading securities).
Dr Trading securities - MP Inc.'s notes 39,000
Cr Cash 39,000
e. On September 1, received a $0.42 per share cash dividend on the Fran Inc. common stock purchased in part b.
Dr Cash 420
Cr Dividends revenue 420
f. On October 8, sold 500 shares of Fran Inc. common stock for $41 cash per share.
Dr Cash 20,500
Cr Investment in Fran inc. stocks 17,500
Cr Gain on investment 3,000
g. On October 30, received a check from MP Inc. for three months’ interest on the notes purchased in part d.
Dr Cash 487.50
Cr Interest revenue 487.50
Tanner-UNF Corporation acquired as a long-term investment $240 million of 6% bonds, dated July 1, on July 1, 2016. Company management has the positive intent and ability to hold the bonds until maturity. The market interest rate (yield) was 8% for bonds of similar risk and maturity. Tanner-UNF paid $200 million for the bonds. The company will receive interest semiannually on June 30 and December 31. As a result of changing market conditions, the fair value of the bonds at December 31, 2016 was $210 million.
Required:
1. Prepare the journal entry to record Tanner-UNF’s investment in the bonds on July 1, 2016.
2. Prepare the journal entry by Tanner-UNF to record interest on December 31, 2016, at the effective (market) rate.
3. At what amount will Tanner-UNF report its investment in the December 31, 2016, balance sheet? Why?
4. Suppose Moody’s bond rating agency downgraded the risk rating of the bonds motivating Tanner-UNF to sell the investment on January 2, 2017, for $190 million. Prepare the journal entry to record the sale.
Which of the following statements is CORRECT? a. If a company follows a policy of "matching maturities," this means that it matches its use of short-term debt with its use of long-term debt. b. If a company follows a policy of "matching maturities," this means that it matches its use of common stock with its use of long-term debt as opposed to short-term debt. c. Net working capital is defined as current assets minus the sum of payables and accruals, and any decrease in the current ratio automatically indicates that net working capital has decreased. d. Although short-term interest rates have historically averaged less than long-term rates, the heavy use of short-term debt is considered to be an aggressive strategy because of the inherent risks associated with using short-term financing. e. Net working capital is defined as current assets minus the sum of payables and accruals, and any increase in the current ratio automatically indicates that net working capital has increased.
Answer: d. Although short-term interest rates have historically averaged less than long-term rates, the heavy use of short-term debt is considered to be an aggressive strategy because of the inherent risks associated with using short-term financing.
Explanation:
Using short term financing is generally considered to be an aggressive strategy and is more often than not frowned upon by investors.
This is because of the reputational risk involved. A company that keeps using short term financing gives off the impression that it is barely keeping afloat and therefore relying on short term loans to continue functioning.
Other risks involved include, short term loans are usually given in small quantities so they cannot be used effectively as they will bareky go anywhere in terms of investment and their payback installment schedule can be in weeks instead of months like long term financing which can be detrimental to survival.
This is as opposed to a Conservative Approach that uses long term financing to finance most of it's Working Capital.
Cherokee Inc. is a merchandiser that provided the following information: Amount Number of units sold 13,000 Selling price per unit $ 16 Variable selling expense per unit $ 2 Variable administrative expense per unit $ 3 Total fixed selling expense $ 21,000 Total fixed administrative expense $ 15,000 Beginning merchandise inventory $ 11,000 Ending merchandise inventory $ 25,000 Merchandise purchases $ 88,000 Required: 1. Prepare a traditional income statement. 2. Prepare a contribution format income statement.
Answer:
1. Gross margin is $134,00; and Net profit is $33,000.
2. Contribution margin is $69,000; and Net profit is $33,000.
Explanation:
To prepare the statements, the following calculations are done first:
Sales revenue = Number of units sold * Selling price per unit = 13,000 * $16 = $208,000
Variable selling expenses = Number of units sold * Variable selling expense per unit = 13,000 * $2 = $26,000
Total selling expenses = Variable selling expenses + Total fixed selling expense = $26,000 + $21,000 = $47,000
Variable administrative expense = Number of units sold * Variable administrative expense per unit = 13,000 * $3 = $39,000
Total administrative expense = Variable administrative expense + Total fixed administrative expense = $39,000 + $15,000 = $54,000
Cost of goods sold = Beginning merchandise inventory + Merchandise purchases - Ending merchandise inventory = $11,000 + $88,000 - $25,000 = $74,000
The statements are now prepared as follows:
1. Prepare a traditional income statement.
The purpose of the traditional income statement is to obtain the gross margin and the net profit. These can be obtained as follows:
Cherokee Inc.
Traditional income statement
Details $
Sales 208,000
Cost of goods sold (74,000)
Gross margin 134,000
Selling and Admin. Expenses:
Selling expenses (47,000)
Administrative expense (54,000)
Net profit 33,000
2. Prepare a contribution format income statement
The purpose of the contribution format income statement is to obtain the contribution margin and the net profit. These can be obtained as follows:
Cherokee Inc.
Contribution format income statement
Details $
Sales 208,000
Variable expenses:
Cost of goods sold (74,000)
Selling expenses (26,000)
Administrative expense (39,000)
Contribution margin 69,000
Fixed expenses:
Selling expenses (21,000)
Administrative expense (15,000)
Net profit 33,000
Note:
Note that under both methods, the net profit is the same. This always holds no matter the method used.
Answer:
Instructions are below.
Explanation:
Giving the following information:
Amount Number of units sold 13,000
Selling price per unit $16
Variable selling expense per unit $2
Variable administrative expense per unit $3
Total fixed selling expense $21,000
Total fixed administrative expense $15,000
Beginning merchandise inventory $11,000
Ending merchandise inventory $25,000
Merchandise purchases $88,000
First, we need to calculate the cost of goods sold:
COGS= beginning finished inventory + cost of goods manufactured - ending finished inventory
COGS= 11,000 + 88,000 - 25,000= 74,000
1) Traditional income statement:
Sales= 13,000*16= 208,000
COGS= (74,000)
Gross profit= 134,000
Total selling expense= (2*13,000) + 21,000= (47,000)
Total administrative expense= (3*13,000) + 15,000= (54,000)
Net operating income= 33,000
2) Contribution format income statement:
Total variable cost= (3 + 2)*13,000 + 74,000= $139,000
Sales= 208,000
Total variable cost= (139,000)
Contribution margin= 69,000
Total fixed selling expense= (21,000)
Total fixed administrative expense= (15,000)
Net operating income= 33,000
g Real and nominal variables are highly intertwined, and changes in the money supply change real GDP. Most economists would agree that this statement accurately describes a. both the short run and the long run. b. the short run, but not the long run. c. the long run, but not the short run. d. neither the long run nor the short run.
Answer:
The correct answer is C.
Explanation:
GDP usually, is fixed in the short run. Thus, in the short-term, money supply will increase aggregate demand and prices will follow.
In the long term, however, real GDP (which is economic output that has been adjusted for price fluctuations), an increase in the money supply will create an increase in the GDP due to aggregate demand.
The US economy, for example, displays a strong positive correlation between the amount of money supplied and it's GDP growth between 1994 and 2009.
Cheers!
g On January 1, 2020, Marigold Company issued 10-year, $1,890,000 face value, 6% bonds, at par. Each $1,000 bond is convertible into 16 shares of Marigold common stock. Marigold’s net income in 2020 was $470,000, and its tax rate was 20%. The company had 94,000 shares of common stock outstanding throughout 2020. None of the bonds were converted in 2020. (a) Compute diluted earnings per share for 2020.
Answer:
$3.78
Explanation:
The First step is to calculate basic earning per share then making the adjustments to the basic earning per share to arrive to a diluted earning per share.
Basic Earning per Share = Earnings Attributable to Holders of Common Stock / Weighted Average Number of Common Stock Holders.
Earnings Attributable to Holders of Common Stock Calculation :
Net Income $470,000
Less Bond Interest ($1,890,000×6%×80%) ($90,720)
Earnings Attributable to Holders of Common Stock $379,280
Weighted Average Number of Common Stock Holders Calculation :
Outstanding Common Shares 94,000
Weighted Average Number of Common Stock Holders 94,000
Basic Earning per Share = $379,280 / 94,000 = $4.03
Diluted Earnings per Share = Adjusted Earnings Attributable to Holders of Common Stock / Adjusted Weighted Average Number of Common Stock Holders.
Adjusted Earnings Attributable to Holders of Common Stock Calculation :
Earnings Attributable to Holders of Common Stock $379,280
Add Back Bond Interest ($1,890,000×6%×80%) $90,720
Adjusted Earnings Attributable to Holders of Common Stock $470,000
Adjusted Weighted Average Number of Common Stock Holders.
Outstanding Common Shares 94,000
Add Convertible Bonds ($1,890,000/$1,000×16) 30,240
Adjusted Weighted Average Number of Common Stock Holders 124,240
Diluted Earnings per Share = $470,000 / 124,240 = $3.78
Find the present value of $10,000 received at the start of every year for 20 years if the interest rate is J1 = 12% p.a. and if the first payment of $10,000 is received at the end of 10 years
Answer:
$ 26,935.56
Explanation:
The key to this question is that present value of those cash flows in year ten is the future value today.
PV=PMT*(1/i-1/i*(1+i)^n)*(1+i)
PMT is the annual amount receivable which is $10,000
i is 12% or 0.12
n is 20 years
1/i*(1+i)^=1/0.12*(1+0.12)^20=1/(0.12*9.646293093 )=0.863889709
1/i=1/0.12=8.333333333
1+i=1+0.12=1.12
PV=10,000*(8.333333333 -0.863889709 )*1.12
PV=10,000*7.469443624*1.12=$83,657.77
The PV In ten years' time is future value today, hence we need to discount that future value to today's terms
PV=FV*(1+r)^-n
n is ten
r is 12%
PV=$83,657.77*(1+12%)^-10=$ 26,935.56