Answer:
D. The list of customers who returned the registration card
Explanation:
The list of customers who returned the registration card will be a good frame for drawing the sample because it will enable the company to easily and effectively known how good or bad the Blu-ray player was when used by the customers and the satisfaction the customers had from using the company products which is why checking through the record or list of customers who returned the registration card can be good frame from drawing the sample without error occuring because it will give the company the correct and accurate result of all what they need to know about how good or bad their Blue ray player was and the satisfaction their customers derived from using it.
Answer:
D. The list of customers who returned the registration card
Explanation:
The list of customers who returned the registration card will be a good frame for drawing the sample because it will enable the company to easily and effectively known how good or bad the Blu-ray player was when used by the customers and the satisfaction the customers had from using the company products which is why checking through the record or list of customers who returned the registration card can be good frame from drawing the sample without error occuring because it will give the company the correct and accurate result of all what they need to know about how good or bad their Blue ray player was and the satisfaction their customers derived from using it.
Identify whether each of the following examples belongs to Money aggregates (M1 or M2). If an example belongs in both, be sure to write it down.
a. Sean has $30,000 in a money market account.
b. Musashi has a roll of quarters that he just withdrew from the bank to do laundry.
c. Yvette has $7,000 in a two-year certificate of deposit (CD).
Any type of money that falls into the M2 category is, by definition, part of M1 as well.
a. True
b. False
Answer: 1. a) M2
b) M1 and M2
c) M2
2. b. False
Explanation:
1.
M1 is a type of definition of money by economists that seek to explain the circulation of money in the economy. It includes cash and cash equivalents that are easy to convert into cash. This includes actual physical cash as well as Demand Deposits.
M2 is the definition that follows after M1. M2 by definition includes all the types of cash in M1 as well as deposits less than $100,000, non Institutional Money Market Fund investments and savings deposits. It isn't as liquid as M1 but is very important in forecasting inflation.
The classifications therefore are,
a) M2. This is M2 as it is a Non Institutional Money Market investment by Sean.
b) M1 and M2. This is physical cash and as such is part of M1 and as stated, anything part of M1 is part of M2 as well.
c) M2. As a deposit less than $100,000, the $7,000 that Yvette has in the CD classifies as M2.
2. False.
Money that is part of M2 is not automatically part of M1. M1 includes only physical cash as well as Demand Deposits while M2 has other forms such as savings deposits and small time deposits. Money that is part of M1 is automatically part of M2 and not the other way around.
Pincus Associates uses the allowance method to account for bad debts. During 2021, its first year of operations, Pincus provided a total of $156,000 of services on account. In 2021, the company wrote off uncollectible accounts of $6,300. By the end of 2021, cash collections on accounts receivable totaled $132,300. Pincus estimates that 10% of the accounts receivable balance at 12/31/2021 will prove uncollectible.
Required:
1. & 2. What journal entry did Pincus record to write off uncollectible accounts during 2021 and to recognize bad debt expense for 2021? (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)
Journal entry worksheet
Record the write-offs of allowance for uncollectible accounts during 2021.
Note: Enter debits before credits.
Event General Journal Debit Credit
1
record to recognize bad debt expense for 2021.
Note: Enter debits before credits.
Event General Journal Debit Credit
2
Answer: the answer is given below
Explanation:
It should be noted that the account receivable ending balance was calculated as:
Credit sales = 156,000
Less: collection of account= 132,300
Less: written off = 6,300
= 17,400
The bad debt expense was calculated as:
= (17,400 × 10%) + 6300
= (17400 × 0.1) + 6300
= 1740 + 6300
= 8040
Other explanation have been attached.
Required informationUse the following information for the Exercises below.[The following information applies to the questions displayed below.]
Del Gato Clinic deposits all cash receipts on the day when they are received and it makes all cash payments by check. At the close of business on June 30, 2015, its Cash account shows an $11,589 debit balance. Del Gato Clinic's June 30 bank statement shows $10,555 on deposit in the bank.
a. Outstanding checks as of June 30 total $1,829.
b. The June 30 bank statement included a $16 debit memorandum for bank services.
c. Check No. 919, listed with the canceled checks, was correctly drawn for $467 in payment of a utility bill on June 15. Del Gato Clinic mistakenly recorded it with a debit to Utilities Expense and a credit to Cash in the amount of $476.
d. The June 30 cash receipts of $2,856 were placed in the bank's night depository after banking hours and were not recorded on the June 30 bank statement.
1. Prepare the adjusting journal entries that Del Gato Clinic must record as a result of preparing the bank reconciliation. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)
2. Prepare a bank reconciliation for Del Gato Clinic using the above information:
Answer:
a. No journal entry required
b. Miscellaneous expense A/c Dr $16
To Cash A/c $16
(service charge)
c. Cash A/c Dr $9 ($476 - $467)
To Utilities expense A/c $9
4. No journal entry required
2.) Kindly check attached picture
Explanation:
Kindly check attached picture
The Whitewater LLP is equally owned by three partners and has the following balance sheet at the end of the current tax year:
Basis FMV
Cash $60,000 $60,000
Unrealized 0 15,000
receivables Land $15,000 $45,000
$75,000 $120,000
Petula, capital $25,000 $40,000
Prudence, capital $25,000 $40,000
Primrose, capital $25,000 $40,000
$75,000 $120,000
Petula is an active partner retiring from me service-oriented partnership. She receives $60,000 cash, none of which is stated to be for goodwill.
a) How much of the payment is for "unstated goodwill"?
b) How is the $60,000 allocated between a 736(a) income payment and a 736(b) property payment?
Answer:
A.) $20,000
Explanation:
Kindly check attached picture for detailed explanation
The following information applies to Pro-Weave manufactures stadium blankets by passing the products through a weaving department and a sewing department. The following information is available regarding its June inventories:
Beginning Inventory Ending Inventory
Raw materials inventory $ 120,000 $ 185,000
Work in process inventory-Weaving 300,000 330,000
Work in process inventory-Sewing 570,000 700,000
Finished goods inventory Inventory 1,266,000 1,206.000
The following additional information describes the company's manufacturing activities for June:
Raw materials purchases (on credit) Factory wages cost (paid in cash) Other factory overhead cost (other Accounts credited) Materials used 500,000 3,060,000 156, 000 Direct-Weaving Direct-Sewing Indirect $ 240, 000 75,000 120,000 Labor used Direct-Weaving Direct-Sewing Indirect $1,200, 000 360,000 1,500,000 Overhead rates as a percent of direct labor Weavinqg Sewing 80% 150% Sales (on credit) $4,000,000
1. Compute the (a) cost of products transferred from weaving to sewing, (b) cost of products transferred from sewing to finished goods and (c) cost of goods sold
2. Prepare journal entries dated June 30 to record (a) goods transferred from weaving to sewing, (b) goods transferred from sewing to finished goods, and (c) sale of finished goods
Complete this question by entering your answers in the tabs below
Required 1
Required 2
Compute the (a) cost of products transferred from weaving to sewing, (b) cost of products transferred from sewing to finished goods, and (c) cost of goods sold
(a) Sewing
(b) Finished Goods
(c) Cost of goods sold
Find the given attachments
Wright Machinery Corporation manufactures automobile engines for major automobile producers. The engines sell for $910 per engine. In addition, customers have the option to purchase a service-type warranty for $70 per engine that protects against any defects for a period of 5 years. During 2019, Wright sold 9,000 engines to National Motors. National Motors purchased warranties on all of the engines purchased. During 2019, Wright repaired defective motors at a cost of $93,400.
Prepare the necessary journal entries to record:__________.1. The sale of engines and service warranty on account during 2016 (one entry).2. The warranty costs paid during 2016.3. The warranty revenue earned in 2016.
Answer:
1. The sale of engines and service warranty on account during 2016 (one entry).
Dr Cash 8,820,000
Cr Sales revenue 8,190,000 (= 9,000 x $910)
Cr Unearned warranty revenue 630,000 (= 9,000 x $70)
2. The warranty costs paid during 2016.3. The warranty revenue earned in 2016.
to record warranty expenses during the year
Dr Warranty expense 93,400
Cr Cash 93,400
to record warranty revenue
Dr Unearned warranty revenue 126,000 (= $630,000 / 5 = $126,000)
Cr Extended warranty revenue 126,000
Explanation:
Service-type warranties sold are a liability for the company (unearned revenue) and they will be accrued as time goes on. In this case, accrued warranty revenue is adjusted annually but it could also be adjusted monthly.
Groups of 18th century skilled artisans formed secret societies for two basic reasons. Which of the following is one of those reasons?
1. to equalize their relationship with their employers
2. to distinguish themselves from carpenters and shoemakers
3. to gain control of the German government
4. to avoid having to set minimal standards for their crafts
Answer:
1. To equalize their relationship with their employers.
Explanation:
This took place in the 18th century, stated to have happened about the late 70's as it was known that artisans slowly started becoming the new kings.
Their trades which ranges from cabinetmaking, baking, butchering, goldsmithing, silversmithing, carpentry, tailoring and also shoemaking.
These workforce were either wage earners, they start as craftsmen and grow to become great entrepreneurs and this got eyes on them causing them to form cults for themselves only to equalize their relationship with their employers.
2 brothers, Joe and Bob get equal dollar amounts of securities as a gift. Joe immediately sells his securities and deposits the money to a bank account. On the other hand, Bob keeps his securities positions and holds them in a brokerage account. After 5 years, Joe has $10,000 in his bank account, while Bob has $30,000 in his brokerage account. The $20,000 difference between the account balances is explained by:
Answer:
Opportunity cost
Explanation:
The opportunity cost Bob's brother Joe $20,000. Remember, the term Opportunity cost refers to the cost (loss in this context) incurred when one forgoes an alternative best option–holding them in a brokerage account, in place for a less beneficial one.
Thus, Bob chose the best alternative over his brother.
The following transactions occur for Badger Biking Company during the month of June:
a. Provide services to customers on account for $36,000.
b. Receive cash of $28,000 from customers in (a) above.
c. Purchase bike equipment by signing a note with the bank for $21,000.
d. Pay utilities of $3,600 for the current month.
Required:
Analyze each transaction and indicate the amount of increases and decreases in the accounting equation.
Answer:
A pdf file is attached to show the effect of each transaction on accounting equation, Please find it.
Explanation:
Accounting equation is
Assets = Equity + Liabilities
a.
The services are performed on account means that the revenue of $36,000 is recorded against the receivable of the same value.
b.
Receiving cash will increases the cash balance as an asset and reduces the receivable value.
c.
Bike Equipment are assets and it will increase the value of assets and Note payable is a liability instrument which will increase the liabilities.
d.
Utilities payment will decrease the cash in the assets section and reduce the equity balance as an expense.
Valuing my degree. I went to LSUS for 2 years and did not work. It cost me $35,000 per year (tuition and living). When I graduated I will make $80,000 per year. If I did not get my MHA, I would make $40,000 a year. I would not have been out-of-pocket any money. Regardless, of my decision, I expect to earn 2% increase in salary every year. Inflation will be around 3%. I am currently 30 and I want to retire at age 65. Was going to school worth it? Answer: Yes – the present value of my degree is $851,673 Answer: No – I missed a lot of good TV shows Answer: No – I had to spend $35,000 for three years.
Flynn Industries has three activity cost pools and two products. It estimates production 3,000 units of Product BC113 and 1,500 of Product AD908. Having identified its activity cost pools and the cost drivers for each pool, Flynn accumulated the following data relative to those activity cost pools and cost drivers.
Annual Overhead Data Estimated Use of Cost Drivers per Product
Activity Cost Pools Cost Drivers Estimated Overhead Estimated Use of Cost Drivers per Activity Product BC113 Product AD908
Machine setup Setups $16,000 40 25 15
Machining Machine hours 110,000 5,000 1,000 4,000
Packing Orders 30,000 500 150 350
Required:
Prepare a schedule showing the computations Of the activity-based Overhead rates per cost driver.
Answer:
Instructions are below.
Explanation:
Giving the following information:
Machine setup Setups $16,000 40 25 15
Machining Machine hours $110,000 5,000 1,000 4,000
Packing Orders $30,000 500 150 350
To calculate the estimated manufacturing overhead rate we need to use the following formula:
Estimated manufacturing overhead rate= total estimated overhead costs for the period/ total amount of allocation base
Machine setup= 16,000/(40+25+15)= $200 per setup
Machining= 110,000/ (5,000 + 1,000 + 4,000= $11 per machine hour
Packing= 30,000/ (500 + 150 + 350)= $30 per order
On March 4 of 1999, XYZ Corporation takes out a $1 million loan. The company pays the interest semiannually. The six-month interest rate is six-month LIBOR 80 basis points, with a cap at 9.25%. Assume that LIBOR is at 8.5% on March 4, 1999, and 7.75% on September 4, 1999. What is the second interest payments on the loan
Answer: $85,500
Explanation:
From the question, we are told XYZ Corporation takes out a $1 million loan and the interest on the loan is paid semiannually.
We are also told that the six-month interest rate is six-month LIBOR 80 basis points, with a cap at 9.25%. Assume that LIBOR is at 8.5% on March 4, 1999, and 7.75% on September 4, 1999.
The second interest payments on the loan will be:
The interest rate will be:
Interest rate = LIBOR + 80bps
= 7.75 + 0.8
= 8.55%
Interest paid in the second period
= $1,000,000 × 8.55%
= $1,000,000 × 0.0855
= $85,500
Note that there is no need for using the cap since the interest didn't exceed 9.25%
g Dybala Corporation produces and sells a single product. Data concerning that product appear below: Per Unit Percent of Sales Selling price $ 110 100 % Variable expenses 66 60 % Contribution margin 44 40 % The company is currently selling 5,120 units per month. Fixed expenses are $210,000 per month. The marketing manager believes that a $6,600 increase in the monthly advertising budget would result in a 230 unit increase in monthly sales. What should be the overall effect on the company's monthly net operating income of this change
Answer:
Effect on income= $3,520 increase
Explanation:
Giving the following information:
Contribution margin= 44
The marketing manager believes that a $6,600 increase in the monthly advertising budget would result in a 230 unit increase in monthly sales.
To calculate the effect on income, we need to use the following formula:
Effect on income= increase in contribution margin - increase in costs
Effect on income= 230*44 - 6,600
Effect on income= $3,520 increase
The Riteway Ad Agency provides cars for its sales staff. In the past, the company has always purchased its cars from a dealer and then sold the cars after three years of use. The company’s present fleet of cars is three years old and will be sold very shortly. To provide a replacement fleet, the company is considering two alternatives:
Purchase alternative: The company can purchase the cars, as in the past, and sell the cars after three years of use. Ten cars will be needed, which can be purchased at a discounted price of $27,000 each. If this alternative is accepted, the following costs will be incurred on the fleet as a whole:
Annual cost of servicing, taxes, and licensing $ 4,300
Repairs, first year $ 2,200
Repairs, second year $ 4,700
Repairs, third year $ 6,700
At the end of three years, the fleet could be sold for one-half of the original purchase price.
Lease alternative: The company can lease the cars under a three-year lease contract. The lease cost would be $70,000 per year (the first payment due at the end of Year 1). As part of this lease cost, the owner would provide all servicing and repairs, license the cars, and pay all the taxes. Riteway would be required to make a $15,000 security deposit at the beginning of the lease period, which would be refunded when the cars were returned to the owner at the end of the lease contract.
Riteway Ad Agency’s required rate of return is 20%.
Required:
1. Use the total-cost approach to determine the present value of the cash flows associated with each alternative. (Any cash outflows should be indicated by a minus sign. Round discount factor(s) to 3 decimal places.)
Answer:
The present value of purchase is $ 209,907.41
The present value of lease is $ 153,773.15
Find attached spreadsheet.
Explanation:
The present of value of both options need to be calculated in order to determine the viable option:
Present value of purchase=($27,000*10)+($4,300+$2,200)/(1+20%)^1+($4,300+$4,700)/(1+20%)^2+($4,300+$6,700)/(1+20%)^3-($27000*10*0.5)/(1+20%)^3=$209,907.41
Present value of lease option=$15,000+$70,000/(1+20%)^1+$70,000/(1+20%)^2+$70,000/(1+20%)^3-$15,000/(1+20%)^3=$ 153,773.15
Bannister Co. is thinking about having one of its products manufactured by a subcontractor. Currently, the cost of manufacturing 1,000 units is: Direct material $ 45,000 Direct labor 30,000 Factory overhead (30% is variable) 98,000 If Bannister can buy 1,000 units from an outside supplier for $100,000, it should:
Answer:
Production total cost= $104,400
It is more profitable to buy the product.
Explanation:
Giving the following information:
Production costs (1,000 units):
Direct material $ 45,000
Direct labor $30,000
Factory overhead (30% is variable) 98,000
Buy:
1,000 units from an outside supplier for $100,000.
I will assume that the fixed overhead is not avoidable, therefore it should not be taken into account for the decision making.
Production total cost= 45,000 + 30,000 + (98,000*0.3)
Production total cost= $104,400
It is more profitable to buy the product.
A high-end clothing manufacturer has a policy to inspect each article of clothing before it is shipped to customers. Recently, the number of finished items that are failing this final inspection has more than doubled from 3% six months ago to 7% last month. This company would benefit from a strategy designed to:
Answer:
Examine the reliability of the process.
Explanation:
As a high end clothing company, it is a very good initiative and welcoming to have clothes that possibly posses global version and global value so it is good for such routine checks to be done. This could be tedious and cost the company more than usual.
In this case where there are a reasonable amount of such clothes failing these routine checks, it is not too good for the company as more re-evaluations are to be done in order to cub the rate at which this is in the last six months. This process of examining the reliability process is the company's best bet to tackle the issue they have at hand.
Following is a partial process cost summary for Mitchell Manufacturing's Canning Department. Equivalent Units of Production Direct Materials Conversion Units Completed and transferred out 44,000 44,000 Units in Ending Work in Process: Direct Materials (9,000 * 100%) 9,000 Conversion (9,000 * 70%) 6,300 Equivalent Units of Production 53,000 50,300 Cost per Equivalent Unit Costs of beginning work in process $43,400 $63,700 Costs incurred this period 145,100 195,100 Total costs $188,500 $258,800 Cost per equivalent unit $3.56 per EUP $5.15 per EUP The total conversion costs transferred out of the Canning Department equals:_______.a. $156,640. b. $179,068. c. $188,500.
Answer:
Material Costs Transferred Out $ 156,640
Conversion Costs Transferred Out $ 226355
Explanation:
Mitchell Manufacturing
Canning Department.
Equivalent Units of Production
Direct Materials Conversion
Units Completed and transferred out 44,000 44,000
Units in Ending Work in Process:
Direct Materials (9,000 * 100%) 9,000
Conversion (9,000 * 70%) 6,300
Equivalent Units of Production 53,000 50,300
Cost per Equivalent Unit
Costs of beginning work in process $43,400 $63,700
Costs incurred this period 145,100 195,100
Total costs $188,500 $258,800
Cost per equivalent unit $3.56 per EUP $5.15 per EUP
The total conversion costs = $ 258,800
Less Conversion Costs of Ending Inventory= ( 6300 * 5.15)= 32445
Conversion Costs Transferred Out $ 226355
The Total Material Costs $188,500
Less Material Costs of Ending Inventory= ( 9000 * 3.56)= 32040
Material Costs Transferred Out $ 156,640
It can also be solved by multiplying EUP with the Units Completed and transferred out and we will get the same results.
Material Costs Transferred Out ( 44000*3.56) $ 156,640
Conversion Costs Transferred Out ( 44000*5.15) $ 226355
The following accounts were taken from the Adjusted Trial Balance columns of the end-of-period spreadsheet for April 30, for Finnegan Co.: Accumulated Depreciation $32,000 Fees Earned 78,000 Depreciation Expense 7,250 Rent Expense 34,000 Prepaid Insurance 6,000 Supplies 400 Supplies Expense 1,800 Prepare an income statement.
Answer:
Explanation:
Income statement for Finnegan Co for the period Ended April 30
Fees earned ( Revenue) 78,000
Depreciation Expenses (7,250)
Rent expenses (34,000)
Supplies Expenses (1800)
Income 34,950
Prepaid insurance (6000) and supplies (400) are current assets item of the statement of financial position (balanced sheet) while accumulated depreciation (32000) is a contra asset account on the balanced sheet as a reduction on the fixed assets.
Austin Fisher contributed land, inventory, and $32,000 cash to a partnership. The land had a book value of $59,000 and a market value of $103,000. The inventory had a book value of $70,900 and a market value of $65,900. The partnership also assumed a $42,000 note payable owed by Fisher that was used originally to purchase the land. Required: Provide the journal entry for Fisher's contribution to the partnership. If an amount box does not require an entry, leave it blank.
Answer:
Journal entry for Fisher's contribution to the partnership
Description
Cash $32,000 (Debit)
Land $103,000 (Debit)
Inventory $65,900 (Debit)
Payable on Note $42,000 (Credit)
Capital $158,900 (Credit)
NB: Capital= ($32,000 + $103,000 + $65,900 - $42,000) = $158,900
You are trying to get a group of students interested in forming an organization to help fight fee increases at your college. Unfortunately, things don’t seem to be going very well—nobody in your group volunteered to go to a meeting with your college president next week. You want to create a culture that is active and involved. What should you do? A. Make sure that you do what you want your team to do. If you want them to volunteer, you need to volunteer, too. B. Don't talk about taking action. Instead, get to know your team members better. C. Paint a verbal picture for your team of what life would be like if fees were reduced. D. Make sure that anyone on your team who volunteers to take action gets a reward - publicly recognize their efforts.
Answer:
The correct action is the option B: Don't talk about taking action. Instead, get to know your team members better.
Explanation:
To begin with, if the person is trying to create a group that is involved in the situation and works together then the best option to take at the beginning would be to get to know them better, so in that way the person would understand them and know what motivates each one the members in order to make them understand as well why would be benefitial for everybody to fight the fee increases and he can do that by explaining to everyone how those increases would impact in what motivates them the most. So that is why, is better to understand them and explain them later how to take action.
Answer:
The correct action is the option B: Don't talk about taking action. Instead, get to know your team members better.
Explanation:
To begin with, if the person is trying to create a group that is involved in the situation and works together then the best option to take at the beginning would be to get to know them better, so in that way the person would understand them and know what motivates each one the members in order to make them understand as well why would be benefitial for everybody to fight the fee increases and he can do that by explaining to everyone how those increases would impact in what motivates them the most. So that is why, is better to understand them and explain them later how to take action.
Pablo Management has seven employees, each of whom earns $210 per day. They are paid on Fridays for work completed Monday through Friday of the same week. Near year-end, the seven employees worked Monday, December 31, and Wednesday through Friday, of the same week. The next week, the seven employees worked only four days because New Year's Day was an unpaid Holiday.
Required:
a. Prepare the adjusting entry that would be recorded Monday, December 31, 2013.
b. Prepare the journal entry that would be made to record payment of the employees' wages on Friday, Janyary 4, 2014.
Answer:
a) $1,470 Debit –Wage Expense; $1,470 Credit –Wage Payable.
b) $4,410 Debit –Wage Expense; $1,470 Debit –Wage Payable
Explanation:
Remember, we are told each of the worker earns $210 per day. Therefore
a.To record accrued and current wages.Wages expense = 7 workers × 3 days × $210 = $4,410.
b. To record accrued wages four days Cash = 7 workers × 4 days × $210 = $5,880. For one day (7 workers × $210) = $1,470.
Stellar Corporation began operations on January 1, 2014. During its first 3 years of operations, Stellar reported net income and declared dividends as follows.Net incomeDividends declared2014 $49,500 $ –0– 2015 128,600 59,600 2016 161,000 58,800 The following information relates to 2017.Income before income tax $231,000 Prior period adjustment: understatement of 2015 depreciation expense (before taxes) $32,000 Cumulative decrease in income from change in inventory methods (before taxes) $44,800 Dividends declared (of this amount, $32,000 will be paid on January 15, 2018) $118,400 Effective tax rate 40 %Prepare a 2017 retained earnings statement for Stellar Corporation. (List items that increase adjusted retained earnings first.)
Answer:
$194,820
Explanation:
Retained earnings at the end of 2017 is computed thus:
2014 net income $49,500
2014 dividends ($0)
2014 retained earnings $49,500
2015 net income $128,600
2015 dividends ($59,600)
2015 retained earnings $118,500
2016 net income $161,000
2016 dividends ($58,800)
2016 retained earnings $220,700
understatement of depreciation expense
after tax impact $32,000-(40%*$32,000) ($19,200)
After tax impact of decrease in net income due
to inventory method $44,800-($44,800*40%) ($26,880)
Adjusted retained earnings for 2016 $174,620
net income for 2017 $231,000-($231,000*40%) $138,600
dividends declared for 2017 ($118,400)
Retained earnings for 2017 year end $194,820
Retained earnings in the adjustment in each is the retained earnings brought forward plus the net income for the current year minus dividends declared for the year
Prince Electronics, a manufacturer of consumer electronic goods, has five distribution centers in different regions of the country. For one of its products, a highspeed modem priced at $330 per unit, the average weekly demand at each distribution center is 70 units. Average shipment size to each distribution center is 350 units, and average lead time for delivery is 2 weeks. Each distribution center carries 2 weeks' supply as safety stock but holds no anticipatory inventory.a. On average, how many dollars of pipeline inventory will be in transit to each distribution center?b. How much total inventory (cycle, safety, and pipeline) does Prince hold for all five distribution centers?
Answer:
a. $231,000
b. 2,450 units
Explanation:
a. On average, how many dollars of pipeline inventory will be in transit to each distribution center?
This is the inventory level that has to be in transit every 2 weeks in order to meet average demand. This can be calculated as follows:
Pipeline inventory = Number of distribution centers * Price per unit * Average weekly demand * Average delivery lead time = 5 * $330 * 70 * 2 = $231,000.
Therefore, the dollars of pipeline inventory that will be in transit to each distribution center is $231,000.
b. How much total inventory (cycle, safety, and pipeline) does Prince hold for all five distribution centers?
Inventory in hand = Average shipment size * Number of distribution centers = 350 * 5 = 1,750
Safety inventory = Number of distribution centers * Average weekly demand * Average delivery lead time = 5 * 70 * 2 = 700
Note: Safety inventory is the inventory held in the store for the purpose of meeting rise in demand or for overcoming delay in supply.
Inventory cycle = Inventory in hand - safety inventory = 1,750 - 700 = 1,050
Pipeline inventory = Number of distribution centers * Average weekly demand * Average delivery lead time = 5 * 70 * 2 = 700
Total inventory held = Inventory cycle + Safety inventory + Pipeline inventory = 1,050 + 700 + 700 = 2,450 units.
Therefore, the total inventory (cycle, safety, and pipeline) Prince holds for all five distribution centers is 2,450 units.
You consider buying a share of stock at a price of $21. The stock is expected to pay a dividend of $2.04 next year, and your advisory service tells you that you can expect to sell the stock in 1 year for $24. The stock's beta is 1.2, rf is 8%, and E[rm] = 16%. What is the stock's abnormal return?A. 1%
B. 2%
C. -1%
D. -2%
E. None of the above
Answer:
E. None of the above
Explanation:
First we need to calculate the holding period return
Holding period return is the rate of return which an assets earns during the period in which it holds the assets.
Holding Period Return = (Selling Price - Initial Price + Dividend ) / Initial Price
Holding Period Return = ($24 - $21 + $2.04 ) / $21 = 0.24 = 24%
Now we need to calculate the expected return on the stock using CAPM formula as follow
Expected return = Risk free rate + Beta ( Market Risk Premium )
Expected return = rf + beta ( E(rm) )
Placing values in the formula
Expected return = 8% + 1.2 ( 16% )
Expected return = 27.2%
Abnormal return is the difference of Holding period return and expected return
Abnormal return = 27.2% - 24% = 3.2%
Genzyme, the maker of Cerdelga, a drug that treats a genetic illness called Gaucher's disease that affects 10,000 people worldwide, has been criticized for charging up to $300,000 for a year's worth of Cerdelga. This is an example of the manufacturer adhering to its
Answer:
Profit responsibility
Explanation:
The manufacturer is adhering to its profit responsibility. profit responsibility gives us the insight that a company or companies have a primary duty of profit maximization for its owners or stockholders.
Some facts to be considered are:
1. How do these companies recover the costs of doing business. That is how do they make gain from research and development if they give away their discoveries
2. How do stakeholders gain if Cerdelga is being sold at a loss.
A project manager is preparing two documents for risk management. One contains sources of overall project risk and also summary information on individual risks. The second describes individual risks identified. What name should the project manager give to the first document
Answer: Risk Report
Explanation:
A Risk Report for a project contains all the risk that the project is exposed to. This includes both project risk as well as individual risks related to the components projects in the overall project.
A Risk Report details the risks such as Supplier failure, Inflation, Pending Government Regulations and the like. It then takes these and summarizes them for presentation to those who require this information in the company so that appropriate safeguards may be set up and precautions taken.
This describes the first document and so should be what the Project Manager names it.
New lithographic equipment, acquired at a cost of $800,000 at the beginning of a fiscal year, has an estimated useful life of five years and an estimated residual value of $90,000. The manager requested information regarding the effect of alternative methods on the amount of depreciation expense each year. On the basis of the data presented to the manager, the double-declining-balance method was selected.
In the first week of the fifth year, the equipment was sold for $135,000.
Required:
1. Determine the annual depreciation expense for each of the estimated five years of use, the accumulated depreciation at the end of each year, and the book value of the equipment at the end of each year by the following methods:
a. Straight-line method
Year Depreciation Expense Accumulated Depreciation, End of Year Book Value, End of Year
1 $ $ $
2 $ $ $
3 $ $ $
4 $ $ $
5 $ $ $
b. Double-declining-balance method
Year Depreciation Expense Accumulated Depreciation, End of Year Book Value, End of Year
1 $ $ $
2 $ $ $
3 $ $ $
4 $ $ $
5 $ $ $
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2. Journalize the entry to record the sale, assuming double-declining balance method is used. If an amount box does not require an entry, leave it blank.
3. Journalize the entry to record the sale, assuming that the equipment was sold for $88,750 instead of $135,000. If an amount box does not require an entry, leave it blank.
Answer:
a. Straight-line Method :
Year Depreciation Accumulated End of Year Book Value
0 Expense Depreciation $800,000
1 $142,000 $142,000 $ 658,000
2 $142,000 $284,000 $ 516,000
3 $142,000 $426,000 $ 374,000
4 $142,000 $568,000 $ 232,000
5 $142,000 $710,000 $90,000
b. Double-Declining-Balance Method:
Year Depreciation Accumulated End of Year Book Value
0 Expense Depreciation $800,000
1 $320,000 $320,000 $ 480,000
2 $192,000 $512,000 $ 288,000
3 $115,200 $627,200 $ 172,800
4 $69,120 $696,320 $ 103,680
5 $13,680 $710,000 $90,000
2. Journal entry to record the sale, assuming double-declining balance method:
Debit Cash $135,000
Credit Sale of Equipment $135,000
To record sale of equipment.
Debit Sale of Equipment $103,680
Debit Accumulated Depreciation $696,320
Credit Equipment $800,000
To record close of accumulated depreciation and equipment accounts.
3. Journal entry to record sale, assuming equipment was sold for $88,750:
Debit Cash $88,750
Credit Sale of Equipment $88,750
To record sale of equipment.
Debit Sale of Equipment $103,680
Debit Accumulated Depreciation $696,320
Credit Equipment $800,000
To record close of accumulated depreciation and equipment accounts.
Explanation:
a) Straight-line method of depreciation applies the same amount of depreciation charge over the life of the asset. It is calculated by subtracting the salvage value from the asset and dividing the resulting figure by the number of useful life in years. It is very simple, but does not take into consideration maintenance costs incurred as assets age. Therefore, it does not spread the costs of the asset evenly over the periods the asset is in use, or according to the productivity value of the asset in each period.
b) Declining balance method of depreciation accelerates depreciation charge initially but the annual expense declines with age of the fixed asset. Under this method, depreciation expense is calculated by applying the depreciation rate to the book value of the asset at the start of the period.
REM Consulting is completing the accounting information processing at the end of the fiscal year, December 31. The following trial balances are available. Accounts Unadjusted Trial Balance Adjusted Trial Balance Debit Credit Debit Credit Cash 13,000 13,000 Accounts Receivable 1,500 1,800 Prepaid Insurance 600 200 Supplies 3,800 3,000 Machines 30,000 30,000 Accumulated Depreciation 12,000 17,500 Wages Payable 900 Unearned Fees 6,700 6,500 Owner’s Capital 24,000 24,000 Owner’s Drawing 4,800 4,800 Fees Earned 25,000 25,500 Wages Expense 14,000 14,900 Depreciation Expense 5,500 Supplies Expense 800 Insurance Expense 400 67,700 67,700 74,400 74,400 Required: a. Reconstruct the adjusting entries. Refer to the Chart of Accounts for exact wording of account titles. b. What is the amount of net income?
Answer:
Net Income 3900
Explanation:
REM Consulting
Un adjusted Trial Balance Adjusted Trial Balance
Debit Credit Debit Credit
Cash 13,000 13,000
Accounts Receivable 1,500 1,800
Prepaid Insurance 600 200
Supplies 3,800 3,000
Machines 30,000 30,000
Acc. Depreciation 12,000 17,500
Wages Payable 900
Unearned Fees 6,700 6,500
Owner’s Capital 24,000 24,000
Owner’s Drawing 4,800 4,800
Fees Earned 25,000 25,500
Wages Expense 14,000 14,900
Depreciation Expense 5,500
Supplies Expense 800
Insurance Expense 400
Total 67,700 67,700 74,400 74,400
Adjusting Entries
SR. No Accounts Debit Credit
1) Accounts Receivable 300
Sales 300
As Sales increase so do the Accounts receivable.
2) Insurance Expense 400
Prepaid Insurance 400
Insurance expired by $400.
3) Supplies Expense 800
Supplies 800
Supplies used up by amount $800.
4) Depreciation Expense 5,500
Accumulated Depreciation 5,500
Depreciation Expense amounts to $ 5,500
5) Fees Earned 200
Unearned Fees 200
Provided Services for which payment had been collected,
6) Cash 500
Fees Earned 500
Received $500 for services provided.
7) Wages Payable 900
Cash 900
Paid wages payable to the employee.
REM Consulting
Net income
Fees Earned 25500
Wages Expense 14,900
Depreciation Expense 5,500
Supplies Expense 800
Insurance Expense 400
Net Income 3900
Lou Barlow, a divisional manager for Sage Company, has an opportunity to manufacture and sell one of two new products for a five-year period. His annual pay raises are determined by his division’s return on investment (ROI), which has exceeded 23% each of the last three years. He has computed the cost and revenue estimates for each product as follows:
Product A Product B
Initial investment:
Cost of equipment
(zero salvage value) $290,000 $490,000
Annual revenues and costs:
Sales revenues $340,000 $440,000
Variable expenses $154,000 $206,000
Depreciation expense $58,000 $98,000
Fixed out-of-pocket
operating costs $79,000 $59,000
The company's discount rate is 16%.
Required:
1. Calculate the payback period for each product.
2. Calculate the net present value for each product.
3. Calculate the internal rate of return for each product.
4. Calculate the project profitability index for each product.
5. Calculate the simple rate of return for each product.
6A. For each measure, identify whether Product A or Product B is preferred.
6B. Based on the simple rate of return, Lou Barlow would likely:
1. Accept Product A
2. Accept Product B
3. Reject both products
Answer:
1. Calculate the payback period for each product.
A = 2.71 years, A is preferredB = 2.8 years2. Calculate the net present value for each product.
A = $60,349B = $83,001, B is preferred3. Calculate the internal rate of return for each product.
A = 25%, A is preferredB = 23%4. Calculate the project profitability index for each product.
A = 121%, A is preferredB = 117%5. Calculate the simple rate of return for each product.
A = 184%, A is ´preferred B = 179%6B. Based on the simple rate of return, Lou Barlow would likely:
1. Accept Product A, since its IRR is 25% which exceeds the company's minimum ROI (23%)Explanation:
Product A Product B
Initial investment:
Cost of equipment $290,000 $490,000
Annual revenues and costs:
Sales revenues $340,000 $440,000
Variable expenses $154,000 $206,000
Depreciation expense $58,000 $98,000
Fixed out-of-pocket
operating costs $79,000 $59,000
net cash flow $107,000 $175,000
The company's discount rate is 16%.
payback period
A = $290,000 / $107,000 = 2.71 years, A is preferred
B = $490,000 / $175,000 = 2.8 years
using an excel spreadsheet I calculated the NPV and IRR
NPV
A = $60,349
B = $83,001, B is preferred
IRR
A = 25%, A is preferred
B = 23%
Project profitability
A = $350,349 / $290,000 = 1.21
B = $573,001 / $490,000 = 1.17
Simple rate of return
A = $535,000 / $290,000 = 184%, A is ´preferred
B = $875,000 / $490,000 = 179%
You were recently hired at a software engineering company, and today is your first team meeting. You want to convey to your new team members that you are excited to join them and that you will be an engaged and respectful addition to the team.
What form of nonverbal communication will serve you best?
a. Hugs
b. Prolonged eye contact
c. Punctuality