Answer:
The equipment should not cost more than $6,318,545.68
Explanation:
The most that the land scrapping equipment could cost is the present of the 1.5 million annuity discounted at 6% p.a.
Present Value of Annuity = A × ( 1- (1+r)^(-n))/r
A- 1,500,000, n- 5, r- 6%
=1, 500,000 × ((1.06)^(-5))/0.06
= $6,318,545.68
The equipment should not cost more than $6,318,545.68
Exhibit 9-1 Refer to Exhibit 9-1. If the economy is self-regulating, the price level is:_________.
a) lower in short-run equilibrium than in long-run equilibrium.
b) lower in long-run equilibrium than in short-run equilibrium.
c) higher in long-run equilibrium than in short-run equilibrium.
d) lower when the economy is in a recessionary gap than when it is in long-run equilibrium.
e) a and c
Answer: b) lower in long-run equilibrium than in short-run equilibrium.
Explanation:
A self regulating economy will try to move to the long run Equilibrium.
From the graph attached you will notice that the Price Level at the point where the Long Run Curve intersects with the Aggregate Demand curve is lower than the point where the Short Run Supply curve intersects with the same Aggregate Supply.
This means that Prices in the long term at equilibrium will be less than prices in the short term at Equilibrium should the Economy be a self regulating type that will move towards a long term Equilibrium.
Popson Inc. incurred a material loss that was unusual in character. This loss should be reported as: Multiple Choice a discontinued operation. a line item between income from continuing operations and income from discontinued operations. a line item within income from continuing operations. a line item in the retained earnings statement.
Answer:
A line item within income from continuing operations.
Explanation:
In the United States of America, the International Financial Reporting Standards (IFRS) and the Generally Accepted Accounting Principles (GAAP) usually considers or acknowledges material losses that are unusual in character incurred by businesses. It is necessary to report items that are unusual in character because it gives auditors or financial experts clarity on which profits or losses are not related to the operation of the business.
Since the material loss incurred by Popson Inc. was unusual in character. Hence, this loss should be reported as a line item within income from continuing operations.
The income from continuing operations is a net income from an organization's continuous operation.
Answer:
a line item within income from continuing operations.
Explanation:
Given that, from the above question, the company which is Popson Inc. incurred material loss when in operation, the loss should be reported as: a line item within income from continue operation, due to following reasons:
1. Aside extraordinary items, gains and loss, expenditures and revenues from discountinued operation in business, all other items will be recorded in a line item within income from continuing operations.
2. Based on International Financial Reporting Standards (IFRS) and the Generally Accepted Accounting Principles (GAAP) material losses that are unusual in character incurred by businesses are reported, as it gives auditors or financial experts clarity on which profits or losses are not related to the operation of the business.
Hence, Popson Inc. incurred a material loss that was unusual in character, should be reported as: a line item within income from continuing operations.
commission earned but not received is debit or credit?
At the beginning of the year, Quaker Company's liabilities equal $78,000. During the year, assets increase by $60,000, and at year-end assets equal $190,000. Liabilities decrease $14,000 during the year. What are the beginning and ending amounts of equity?
Answer:
$52,000 and $126,000
Explanation:
The computation of the beginning and ending amount of equity is as follows
Particulars Assets (A) Liabilities (L) Equity (A - L)
Beginning $130,000 $78,000 $52,000
Add: increase or less decreased
Change $60,000 -$14,000
Ending $190,000 $64,000 $126,000
We simply applied the accounting equation to find out the beginning and ending amounts of equity
FICO is a. a company that analyzes consumer credit histories. b. a measure of your debt-to-income ratio. c. a special introductory interest rate on any purchases made during the holiday shopping season. d. a federal agency charged with monitoring consumer spending habits.
Answer: a. a company that analyzes consumer credit histories.
Explanation: The Fair Isaac Corporation (FICO) founded in 1956 by Bill Fair and Earl Isaac is a data analytics company and also the first company to offer a credit-risk model with a score. In other words, the FICO model is the primary method used for determining an individual's creditworthiness and in the provision of a credit rating or score.
They also offer credit scores for sales, either alone or as part of a package of products.
A mine is for sale for $240,000. It is believed the mine will produce a profit of $65,000 the first year, but the profit will decline $5,000 a year after that, eventually reaching zero, whereupon the mine will be worthless. What rate of return would this $240,000 investment produce for the purchaser of the mine
Answer:
60.4%
Explanation:
Initial cost = $240,000
profit of first year = $65,000
this is reduced subsequently until it reaches zero
Note that this value reduces in an arithmetic progression from $65,000 , $60,000, ... , 0
the first term A1 = 65,000
the common difference d is 60,000 - 65,000 = -5000
the last term is An = 0
we calculate for number of terms
An = A1 + (n - 1)d
0 = 65,000 + (n - 1)(-5000)
0 = 65,000 - 5000n +5000
5000n = 70,000
n = 14
using the equation for summation of terms in an arithmetic progression Sn, we solve as
Sn = [tex]\frac{n}{2}[/tex][2A1 + (n - 1)d]
Sn = [tex]\frac{14}{2}[/tex][2(60,000) + (14 - 1)(-5000)]
Sn = 7[120,000 - 65,000]
Sn = 7 x 55,000
Sn = $385,000. This is the total profit on the mine
rate of return = (385,000 - 240,000)/240,000 = 145,000/240,000 = 0.604
i.e 60.4%
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.
You have just been offered your dream job after graduating from Jacksonville University. In response to your negotiations concerning your compensation package, the company has offered you a couple of different stock options in addition to the agreed upon salary.
Under the first option, you would receive stocks with a value of $2,000,000 at the end of each year. This option also includes an additional $4,000,000 bonus that you would receive for staying at the company for 3 years.
Under the second option, you would receive stocks with a value of $1,000,000 at the end of each year. This option also includes an additional $8,000,000 bonus that you would receive for staying at the company for 3 years.
Assume that these stocks grow at a rate of 11% compounded monthly. Moreover, assume that you will leave the company at the end of your fourth year to start your own firm. Which option will you choose. (The more money you have to start your own firm, the better.)
Your formal solutions should include ...
⦁ The overall goal and/or purpose.
⦁ The given information
⦁ A time-line for each option
⦁ A future value for each individual stock payment provided you by the company
⦁ The total future value of each option at the time you plan to leave the company
⦁ Your conclusion
Answer:
Goal: maximize return at the end of the fourth year.
Future value of each option:
First choise: $ 11,730,289.64
Second choise: $ 12,559,457.84
Conclusion:
It is better to pick the second option as yields a better return
Explanation:
We solve for the future value of the cashflow of each option:
First choise:
End of the first year:
[tex]Principal \: (1+ r)^{time} = Amount[/tex]
Principal 2,000,000.00
time 36.00 (form end of the first to end of the fourth)
rate 0.00917 (11% / 12 months as it compounds monthly)
[tex]2000000 \: (1+ 0.00916666666666667)^{36} = Amount[/tex]
Amount $2,777,757.26
End of the second year:
Principal 2,000,000.00
time 24.00
rate 0.00917
[tex]2000000 \: (1+ 0.00916666666666667)^{24} = Amount[/tex]
Amount $2,489,657.04
End of the third year:
Principal 4,000,000.00
time 12.00
rate 0.00917
[tex]4000000 \: (1+ 0.00916666666666667)^{12} = Amount[/tex]
Amount $4,462,875.34
End of the fourth year: $2,000,000
Total:
$2,777,757.26
$2,489,657.04
$4,462,875.34
$2,000,000
$ 11,730,289.64
Second choise:
First year
Principal 1,000,000.00
time 36.00
rate 0.00917
[tex]1000000 \: (1+ 0.00916666666666667)^{36} = Amount[/tex]
Amount 1,388,878.63
Second year:
Principal 1,000,000.00
time 24.00
rate 0.00917
[tex]1000000 \: (1+ 0.00916666666666667)^{24} = Amount[/tex]
Amount 1,244,828.52
Third Year
Principal 8,000,000.00
time 12.00
rate 0.00917
[tex]8000000 \: (1+ 0.00916666666666667)^{12} = Amount[/tex]
Amount 8,925,750.69
Fourth year: 1,000,000
Total
1,388,878.63
1,244,828.52
8,925,750.69
1,000,000.00
12,559,457.84
Write a linear cost function equation for each of the following conditions. Use y for estimated costs and X for activity of the cost driver.
a. Direct manufacturing labor is $10 per hour.
b. Direct materials cost $15.60 per cubic yard.
c. Utilities have a minimum charge of $5,000, plus a charge of $0.30 per kilowatt-hour.
d. Machine operating costs include $300,000 of machine depreciation per year, plus $100 of utility costs for each day the machinery is in operation.
Answer:
a)
y = $10x
b)
y = $15.6x
c)
y = $5000 + $0.3x
d)
y = $300000 + $100x
Explanation:
y for estimated costs and X for activity of the cost driver. Linear cost function is given as:
y = a + bx.
Where y is the cost being predicted, x is the cost driver, a is the fixed cost (intercept) and b is the variable cost per unit (slope)
a) Since Direct manufacturing labor is $10 per hour, variable cost (b) = Direct manufacturing labor = $10
Therefore:
y = $10x
b) variable cost (b) = Direct materials cost = $15.60 per cubic yard.
Therefore:
y = $15.6x
c) Fixed cost (a) = utilities = $5000 and variable cost (b) = charges = $0.3 per kilowatt-hour. Therefore:
y = $5000 + $0.3x
d) Fixed cost (a) = Machine operating costs = $300000 and variable cost (b) = utility costs = $100 per day. Therefore:
y = $300000 + $100x
Stansfield Corporation had the following activities in 2012.
1. Payment of accounts payable: $770,000
2. Issuance of common stock: $250,000
3. Payment of dividends: $350,000
4. Collection of note receivable: $100,000
5. Issuance of bonds payable: $510,000
6. Purchase of treasury stock: $46,000
Compute the amount Stansfield should report as net cash provided by financing activities in its 2012 statement of cash flows.
Answer:
Net cash provided by financing activities in 2012 is $364,000
Explanation:
Computation of net financing activity.
Particular Amount
Issuance of common stock $250,000
Issuance of bonds payable $510,000
$760,000
Less: Payment of dividends $350,000
Less: Purchase of treasury stock $46,000
Net cash provided $364,000
Net cash provided by financing activities in 2012 is $364,000
Alyeska Services Company, a division of a major oil company, provides various services to the operators of the North Slope oil field in Alaska. Data concerning the most recent year appear below: Sales $ 7,500,000 Net operating income $ 600,000 Average operating assets $ 5,000,000 Required: 1. Compute the margin for Alyeska Services Company. 2. Compute the turnover for Alyeska Services Company. (Round your answer to 1 decimal place.) 3. Compute the return on investment (ROI) for Alyeska Services Company. (Do not round intermediate calculations.)
Answer:
1. The margin for Alyeska Services Company is 0.08
2. The turnover for Alyeska Services Company is 1.50
3. The return on investment for Alyeska Services Company is 12%
Explanation:
1. In order to calculate the margin for Alyeska Services Company we would have to calculate the following:
Margin=Net operating Income / Sales
Margin=$600,000 /$7,500,000
Margin=0.08
2. In order to calculate the turnover for Alyeska Services Company we would have to calculate the following:
Turnover= Sales/Average operating assets
Turnover=$7,500,000 /$5,000,000
Turnover=1.50
Turnover of the company is 1.50
3. In order to calculate the return on investment for Alyeska Services Company we would have to calculate the following:
Return on Investments= Net operating Income /Average operating Assets
Return on Investments=$600,000 /$5,000,000
Return on Investments= 12%
The Return on investments is 12%
Also assume that a U.S. exporter denominates its Swiss exports in Swiss francs and expects to receive SF250,000 in 1 year. Using the information above, what will be the approximate value of these exports in 1 year in U.S. dollars given that the firm executes a forward hedge
Answer:
The question is missing some key features such the relevant forward rates which are found in the attached complete question:
The correct option is D,$ 255,750.00
Explanation:
The forward rate agreement stipulate that one Swiss Franc would be exchanged for $1.0230 in one year's time,if the forward rate agreement is settled for the value of SF 250,000 worth of export in a year' s time is calculated as below:
value of SF 250,000=250,000*$1.0230=$255,750.00
As a result, the correct options out of the multiple choices provided as found in the attached is option D with $ 255,750.00 as the worth of SF 250,000 using one year forward rate of $1.0230
At the beginning of the year, Bryers Incorporated reports inventory of $7,700. During the year, the company purchases additional inventory for $22,700. At the end of the year, the cost of inventory remaining is $9,700. Calculate cost of goods sold for the year.
Answer: $20,700
Explanation:
beginning inventory (X) = $7,700
purchased additional inventory (Y) = $22,700
ending inventory (Z) = $9,700
So first, we have to calculate Cost of goods available for sale (A), we add beginning inventory (X) and purchased additional inventory (Y)
A = X + Y
A = 7,700 + 22,700
Cost of goods available for sale (A) = 30,400
NOW to get our Cost of goods sold for the year (B), we subtract ending inventory (Z) from cost of goods available for sale (A)
B = A - Z
B = 30,400 - 9,700
B = 20,700
therefore the cost of goods sold for the year is $20,700
Mary and Kay, Inc., a distributor of cosmetics throughout Florida, is in the process of assembling a cash budget for the first quarter of 20x1. The following information has been extracted from the company’s accounting records:All sales are on account. Sixty percent of customer accounts are collected in the month of sale; 35 percent are collected in the following month. Uncollectibles amounting to 5 percent of sales are anticipated, and management believes that only 20 percent of the accounts outstanding on December 31, 20x0, will be recovered and that the recovery will be in January 20x1.Seventy percent of the merchandise purchases are paid for in the month of purchase; the remaining 30 percenare paid for in the month after acquisition.The December 31, 20x0, balance sheet disclosed the following selected figures: cash, $100,000; accounts receivable, $255,000; and accounts payable, $84,000.Mary and Kay, Inc. maintains a $100,000 minimum cash balance at all times. Financing is available (and retired) in $1,000 multiples at an 8 percent interest rate, with borrowings taking place at the beginning of the month and repayments occurring at the end of the month. Interest is paid at the time of repaying principal and computed on the portion of principal repaid at that time. Additional data: January February MarchSales revenue $630,000 $ 720,000 $ 735,000Merchandise purchases 450,000 480,000 600,000Cash operating costs 111,000 90,000 153,000Proceeds from sale of equipment — — 33,000Required:1. Prepare a schedule that discloses the firm’s total cash collections for January through March.2. Prepare a schedule that discloses the firm’s total cash disbursements for January through March.3. Prepare a schedule that summarizes the firm’s financing cash flows for January through March.
Answer:
What is need to be done:
1. Prepare a schedule that discloses the firms total cash collections for January through March.
2. Prepare a schedule that discloses the firms total cash disbursements for January through March.
3. Prepare a schedule that summarizes the firms financing cash flows for January through March.
Explanation:
Walter, a single taxpayer, purchased a limited partnership interest in a tax shelter in 1993. He also acquired a rental house in 2019, which he actively manages. During 2019, Walter's share of the partnership's losses was $30,000, and his rental house generated $20,000 in losses. Walter's modified adjusted gross income before passive losses is $130,000.
A. Calculate the amount of Walter's allowable deduction for rental house activities for 2017.B. Calculate the amount of Walter's allowable deduction for the partnership losses for 2017.C. What may be done with the unused losses, if anything?
1. The unused losses may be carried.
2. tax years to reduce.
3. income in those years.
Answer:
A. $10,000
B. $0
C. The unused losses may be carried forward to future tax years to reduce passive income in those years.
Explanation:
A. Calculate the amount of Walter's allowable deduction for rental house activities for 2017.
Excess of Walter's modified adjusted gross income before passive losses over $100,000 = $130,00 - $100,000 = $30,000
Allowable deductions = $25,000 - ($30,000 * 50%) = $10,000.
It should be noted that 50 cents, used as 50% above, for each dollar the tax payers modified adjusted gross income exceeds $100,000 is deducted from$25,000 to arrive at allowable deductions. However, there will not be allowable deduction in the case that the modified adjusted gross income is greater $150,000.
B. Calculate the amount of Walter's allowable deduction for the partnership losses for 2017.
Walter is eligible for allowable deduction for the partnership losses for 2017. Therefore, Walter's allowable deduction for the partnership losses for 2017 is $0.
C. What may be done with the unused losses, if anything?
1. The unused losses may be carried forward to future
2. tax years to reduce passive
3. income in those years.
Therefore, this can be joined together as follows:
The unused losses may be carried forward to future tax years to reduce passive income in those years.
According to the UN Charter, one of the four purposes of the UN is to:
a. be a center for harmonizing the actions of nations.
b. encourage high tariffs on imports of manufactured goods.
c. provide enhanced protection for patents.
d. promote the establishment of multinational treaties.
e. facilitate globalization of production.
March 1 Issues 49,000 additional shares of $1 par value common stock for $46 per share. May 10 Purchases 4,400 shares of treasury stock for $49 per share. June 1 Declares a cash dividend of $1.20 per share to all stockholders of record on June 15. (Hint: Dividends are not paid on treasury stock.) July 1 Pays the cash dividend declared on June 1. October 21 Resells 2,200 shares of treasury stock purchased on May 10 for $54 per share. Required: Record each of these transactions. (If no entry is required for a particular transaction/event, select "No Journal Entry Required" in the first account field.)
Answer:
March 1 Issues 49,000 additional shares of $1 par value common stock for $46 per share.
Dr Cash 2,254,000
Cr Common stock 49,000
Cr Additional paid in capital 2,205,000
May 10 Purchases 4,400 shares of treasury stock for $49 per share.
Dr Treasury stock 215,600
Cr Cash 215,600
Treasury stocks are recorded at purchase price against cash. It is a contra equity account that reduces stockholders' equity.
June 1 Declares a cash dividend of $1.20 per share to all stockholders of record on June 15. (Hint: Dividends are not paid on treasury stock.)
Dr Retained earnings 53,520
Cr Dividends payable 53,520
Outstanding stocks = 49,000 - 4,400 = 44,600 stocks
July 1 Pays the cash dividend declared on June 1.
Dr Dividends payable 53,520
Cr Cash 53,520
October 21 Resells 2,200 shares of treasury stock purchased on May 10 for $54 per share.
Dr Cash 118,800
Cr Treasury stock 107,800
Cr Additional paid in capital 11,000
You are a crude oil dealer. You intend to sell 40,000 barrels of crude oil in December. Each contract calls for delivery of 1,000 barrels of oil. Current futures price of one barrel of crude oil is $70. You believe that there are only four possible oil prices in December which are $50, $60, $70, and $80. i. Explain what action you would take to protect from changes in oil prices in December. Provide reasons for your action. ii. Calculate the total proceeds for each of the possible prices in December. Question 3 3 marks
Answer:
i. buy put option
ii. Proceeds will be as follows:
$50 : 2,000,000
$60 : 2,400,000
$70 : 2,800,000
$80 : 3,200,000
Explanation:
i. A put is option is one in which buyer of the option has a right to sell the asset at an agreed price at a later date. There can be a premium on the purchase of an option but its safe to buy an option to reduce risk exposure.
ii. $50 : 2,000,000 (40,000 barrels * $50)
$60 : 2,400,000 (40,000 barrels * $60)
$70 : 2,800,000 (40,000 barrels * $70)
$80 : 3,200,000 (40,000 barrels * $80)
You just agreed to a deal that will make you the proud new owner of a beautiful new convertible. The car comes with a three-year warranty. Please consider the purchase of the extended warranty which has a purchase price of $1,800, today (the day you purchased your NEW car). The extended warranty covers the 4 years immediately after the three-year warranty expires. You estimate that the yearly expenses that would have been covered by the extended warranty are $400 at the end of the first year of the extension, $500 as the end of the second year of the extension, $600 at the end of the third year of the extension, and $800 at the end of the fourth year of the extension. Assume that money during this time can earn interest at a rate of 7% compounded monthly. Will you decide to buy the warranty? Your formal solutions should include:______.1. The overall goal and/or purpose
2. The given information
3. A time-line for the expected repair costs covered by the warranty
4. The present value for each of the repair costs
5. The present value of the warranty and the expected profit for the warranty company
6. Your conclusion
Answer:
1. The overall goal and/or purpose
The overall goal of this analysis is to determine if you would actually save money by purchasing the extended warranty.
2. The given information
You can calculate this by determining the present value of the expected repair costs that will be covered by the warranty and determine which is higher; the warranty or the repairs
3. A time-line for the expected repair costs covered by the warranty
initial investment -$1,800cash flow year 4 = $400cash flow year 5 = $500cash flow year 6 = $600cash flow year 7 = $8004. The present value for each of the repair costs
the discount rate is 7%, so the present value of each repair cost is:
PV cash flow year 4 = $400 / 1.07⁴ = $305PV cash flow year 5 = $500 / 1.07⁵ = $356PV cash flow year 6 = $600 / 1.07⁶ = $400PV cash flow year 7 = $800 / 1.07⁷ = $498total $1,5595. The present value of the warranty and the expected profit for the warranty company
the present value of the warranty is $1,800, so the car company is making $1,800 - $1,559 = $241 in profits by selling you the warranty
6. Your conclusion
You shouldn't buy the extended warranty (negative NPV)
(5). The variance of Stock A is .005, the variance of the market is .008 and the covariance between the two is .0026. What is the correlation coefficient
Answer:
0.4110
Explanation:
The formula and computation of the correlation coefficient is shown below:
Correlation co-efficient = Covariance ÷ (Standard deviation of market × Standard deviation of Stock A)
where,
Covariance between the two = 0.0026
Variance of the stock A = 0.005
And, the variance of the market is 0.008
Now placing these values to the above formula
So, the correlation coefficient is
= 0.0026 ÷ (0.008 × 0.005)^0.50
= 0.0026 ÷ 0.006324555
= 0.411096096
= 0.4110
Hence, the correlation coefficient is 0.4110
Markysha needs to know the cost variance of her project to determine if it is under budget or over budget. To do this she decides to use _________ to compare her project's performance to the expected progress.
Answer:
Earned value management
Explanation:
Markysha decided to use Earned value management for this comparison.
Earned Value Management helps project managers to measure project performance.
It is a project management process that is used to find variances in projects by comparing project's performance to the expected progress. It is useful on cost and schedule control and can be very beneficial when it comes to forecasting during projects.
Morgana Company identifies three activities in its manufacturing process: machine setups, machining, and inspections. Estimated annual overhead cost for each activity is $150,000, $375,000, and $87,500, respectively. The cost driver for each activity and the expected annual usage are number of setups 2,500, machine hours 25,000, and number of inspections 1,750.
Compute the overhead rate for each activity.
Machine setups $ per setup
Machining $ per machine hour
Inspections $ per inspection
Answer:
Machine setup= $60 per setup
Machining= $15 per machine hour
Inspections= $50 per inspection
Explanation:
Giving the following information:
Estimated overhead costs:
Machine setup= 150,000
Machining= 375,000
Inspections= 87,500
The cost driver for each activity and the expected annual usage are number of setups 2,500, machine hours 25,000, and number of inspections 1,750.
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= 150,000/2,500= $60 per setup
Machining= 375,000/25,000= $15 per machine hour
Inspections= 87,500/1,750= $50 per inspection
yler Tooling Company uses a job order cost system with overhead applied to products on the basis of machine hours. For the upcoming year, the company estimated its total manufacturing overhead cost at $420,000 and total machine hours at 60,000. During the first month of operations, the company worked on three jobs and recorded the following actual direct materials cost, direct labor cost, and machine hours for each job: Job 101 Job 102 Job 103 Total Direct materials used $ 19,200 $ 14,400 $ 9,600 $ 43,200 Direct labor $ 28,800 $ 11,200 $ 9,600 $ 49,600 Machine hours 1,000 hours 4,000 hours 2,000 hours 7,000 hours Job 101 was completed and sold for $60,000. Job 102 was completed but not sold. Job 103 is still in process. Actual overhead costs recorded during the first month of operations totaled $45,000. Required: 1. Calculate the predetermined overhead rate. 2. Compute the total manufacturing overhead applied to the Work in Process Inventory account during the first month of operations. 3. Compute the balance in the Work in Process Inventory account at the end of the first month.
Answer:
1. $7.00
2. $49,000
3. $33,200
Explanation:
1. The computation of predetermined overhead rate is shown below:-
Predetermined overhead rate = Estimated overhead ÷ Estimated machine hours
= $420,000 ÷ 60,000
= $7.00
2. The computation of total manufacturing overhead applied is shown below:-
Particulars Job 101 Job 102 Job 103 Total
Direct material $19,200 $14,400 $9,600 $43,200
Direct labor $28,800 $11,200 $9,600 $49,600
Manufacturing
overhead $7,000 $28,000 $14,000 $49,000
Total $55,000 $53,600 $33,200 $141,800
3. The computation of balance in the Work in Process Inventory account at the end of the first month is shown below:-
Particulars Job 101 Job 102 Job 103 Total
Direct material $19,200 $14,400 $9,600 $43,200
Direct labor $28,800 $11,200 $9,600 $49,600
Manufacturing
overhead $7,000 $28,000 $14,000 $49,000
Total $55,000 $53,600 $33,200 $141,800
Job 101 is completed and sold
Job 102 is completed and kept in finished goods inventory.
Job 103 is balance which indicates the work in progress.
Assume you are the president of Nuclear Company. At the end of the first year of operations (December 31), the following financial data for the company are available: Accounts Payable$33,000 Accounts Receivable 59,950 Cash 13,500 Common Stock 63,030 Dividends 230 Equipment 32,000 Notes Payable 1,500 Operating Expenses 61,700 Other Expenses 9,000 Sales Revenue 87,300 Supplies 8,450 Prepare a statement of retained earnings for the year ended December 31.
Answer:
Ending retained earnings is $ 16,370.00
Explanation:
Before preparing the statement of retained earnings for the year ended December 31, the net income for the current year needs to be ascertained.
net income=sales revenue-operating expenses-other expenses
net income=$87,300-$61,700-$9000=$ 16,600.00
Statement of Retained earnings for the year ended 31 December:
Beginning retained earnings $0
net income $16,600
dividends ($230)
ending retained earnings $ 16,370.00
In January the price of dark chocolate candy bars was $2.00, and Aji’s Chocolate Factory produced 80 pounds. In February the price of dark chocolate candy bars was $2.50, and Aji’s Factory produced 110 pounds. In March the price of dark chocolate candy bars was $3.00, and Aji’s Factory produced 140 pounds.a. Calculate the price elasticity of supply for Aji's Chocolate Factory in February b. Calculate the price elasticity of supply for Aji's Chocolate Factory in March c. If Aji's Factory is nearly at full capacity of production in March, what will happen to Aji's Factory price elasticity of supply in April?
Answer:
a. Calculate the price elasticity of supply for Aji's Chocolate Factory in February
1.5 elasticb. Calculate the price elasticity of supply for Aji's Chocolate Factory in March
1.36 elasticc. If Aji's Factory is nearly at full capacity of production in March, what will happen to Aji's Factory price elasticity of supply in April?
If the company is producing at full capacity, then its price elasticity of supply will be perfectly inelastic even if the price increases. This is because any increase in price will not affect the quantity supplied because the company cannot increase it even if they wanted to.Explanation:
price elasticity of supply = % change in quantity supplied / % change in price
It measures the proportional change in the quantity supplied that producers will make given a 1% change in the price of their product.
PES February = [(110 - 80)/80] / [(2.5 - 2)/2] = 0.375 / 0.25 = 1.5
PES March = [(140 - 110)/110] / [(3 - 2.5)/2.5] = 0.273 / 0.2 = 1.36
The following information is from the records of Pangolin Camera Shop: Bad expense is estimated by the aging-of-receivables method. Management estimates that $2,950 of accounts receivable will be uncollectible. Calculate the amount of net accounts receivable after the adjustment for bad debts. Supporting Materials / Group of answer choices $22,950 $22,050 $21,150 $20,800
Answer:
$22,050
Explanation:
The computation of the net account receivable after the adjustment of bad debt is shown below:
As we know that
Net account receivable = Account receivable - bad debt expense
= $25,000 - $2,950
= $22,050
By deducting the bad debt expense from the account receivable we can get the net account receivable and the same is to be considered
hence, the correct option is B.
You want to have $1.5 million in real dollars in a retirement account when you retire in 40 years. The inflation rate is 2.7% and the nominal rate of return on your investment is 10%. What real amount must you deposit each year in the account to achieve your goal?
Answer:
Annual deposit= $6,952.82
Explanation:
Giving the following information:
You want to have $1.5 million in real dollars in a retirement account when you retire in 40 years.
Inflation rate= 2.7%
Interest rate= 10%
First, we need to deduct from the interest rate the inflation rate.
Real interest rate= 0.10 - 0.027= 0.073
Now, using the following formula, we can determine the annual deposit:
FV= {A*[(1+i)^n-1]}/i
A= annual deposit
Isolating A:
A= (FV*i)/{[(1+i)^n]-1}
A= (1,500,000*0.073) / [(1.073^40)-1]
A= $6,952.82
Holly would like to plan for her daughter’s college education. She would like for her daughter, who was born today, to attend college for 4 years, beginning at age 18. Tuition is currently $10,000 per year and tuition inflation is 7%. Holly can earn an after-tax rate of return of 10%. How much must Holly save at the end of each year, if she wants to make the last payment at the beginning of her daughter's first year of college?
Answer:
Holly must save $2845.81 at the end of each year
Explanation:
first calculate the value of tuition fees at n = 18
Cash flow formula = Tuition × [tex](1+0.07)^{n}[/tex]
Discounted CF formula = Cash flow ÷ [tex](1+0.10)^{year}[/tex]
10.00% 0
Year Cash flows Discounted CF
0 33,799.32 33799.32
1 36,165.28 32877.52
2 38,696.84 31980.86
3 41,405.62 31108.66
FV = $129,766.37
PV = 0
N = 18
rate = 10%
using PMT function in Excel
Annual contribution = $2845.81
Sparky Corporation uses the FIFO method of process costing. The following information is available for February in its Molding Department: Units: Beginning Inventory: 34,000 units, 100% complete as to materials and 55% complete as to conversion. Units started and completed: 119,000. Units completed and transferred out: 153,000. Ending Inventory: 34,500 units, 100% complete as to materials and 35% complete as to conversion. Costs: Costs in beginning Work in Process - Direct Materials: $52,000. Costs in beginning Work in Process - Conversion: $57,850. Costs incurred in February - Direct Materials: $349,625. Costs incurred in February - Conversion: $608,150. Calculate the cost per equivalent unit of materials.
Answer:
The cost per equivalent unit of materials is $2.28
Explanation:
The Concept of Equivalent units measures the number of units complete to the extent of the input elements added during production.
The FIFO method in Process costing Accounts for Costs only incurred during the Manufacturing Period. Also, The Opening Work In Process is Assumed to be completed first.
The First Step is to Calculate the Total Equivalent Units of Production for Raw Materials :
To finish Opening Work In Process (34,000 × 0%) = 0
Started and Completed ((153,000 - 34,000) × 100% ) = 119,000
Closing Work In Process (34,500 × 100%) = 34,500
Total Equivalent Units of Production = 153,500
The Next and Final Step is to calculate the cost per equivalent unit of materials.
Cost per equivalent unit = Total Cost During the Current Period / Total Equivalent Units of Production
= $349,625 / 153,500
= $2.2776872
= $2.28 (2 decimal places)
Conclusion :
The cost per equivalent unit of materials is $2.28
g Used clothing of taxpayer and his family (all acquired more than a year ago) $1,350 $ 375 Stock in ABC, Inc., held as an investment for 15 months 12,000 10,875 Stock in MNO, Inc., held as an investment for 11 months 15,000 18,000 Real estate held as an investment for two years 15,000 30,000 The used clothing was donated to the Salvation Army; the other items of property were donated to Eastern State University. Both are qualified charitable organizations. Disregarding percentage limitations, Zeke's charitable contribution deduction for the year is
Answer:
$56,250.
Explanation:
So, we are given the following data or parameters or information which we will use to solve this particular problem or Question;
=>" Used clothing of taxpayer and his family (all acquired more than a year ago) = $1,350 for Basis and Fair market value = $ 375 "
=> "Stock in ABC, Inc., held as an investment for 15 months 12,000 for Basis and 10,875 for fair market value."
=>" Stock in MNO, Inc., held as an investment for 11 months 15,000 for Basis and 18,000 for fair market value. "
=> "Real estate held as an investment for two years 15,000 for basis and 30,000 for fair market value."
Zeke's charitable contribution deduction for the year can be calculated by adding the the fair markets values of :
Used clothing of taxpayer and his family (all acquired more than a year ago) + Stock in ABC, Inc., held as an investment for 15 months + Real estate held as an investment for two years
Then, the result gotten will be added to the Basis value for Stock in MNO, Inc., held as an investment for 11 months. Thus;
$ 375 + 10,875 + 30,000 = 41,250.
41,250 + 15,000 = $56,250.
