Answer: A. Par
Explanation:
While US Government bonds are usually sold at auction which means a price different from Par, Federal Agency bonds operate much like Corporate Bonds in their selling procedure. They engage a group of Underwriters called a Selling group which can be made up of large banks and brokers.
These underwriters will then handle everything that have to do with the sale and sell it to the public. Like a Corporate listing, they get a commission from this.
Because of this direct sale by the Underwriter to the public, the Public is most likely to get the offering at Par.
An asset is acquired using a noninterest-bearing note payable for $100,000 due in two years. Management records the purchase with a debit to the asset for $100,000 and a credit to notes payable for $100,000. Which of the following statements is correct?A. Management has properly recorded the transaction.B. Management has not considered the present value of the note in recording the asset.C. Management should not record the asset until the note has been paid.D. Management should record the note for more than $100,000 to account for the underlying interest.
Answer:
The answer is A. Management has properly recorded the transaction.
Explanation:
According to the given data Since the note is non interest bearing, no interest will be paid on the bond.
Therefore, asset will be debited and note payable will be credited by the full amount.
Therefore, the Management has properly recorded the transaction.
The joural entry would be as follows:
Debit Credit
asset $100,000
note payable $100,000
Cost of goods manufactured equals $55,000 for 2020. Finished goods inventory is $2,000 at the beginning of the year and $5,500 at the end of the year. Beginning and ending work in process for 2020 are $4,000 and $5,000, respectively. How much is cost of goods sold for the year?
Answer:
$51,500
Explanation:
The computation of the cost of goods sold for the year is shown below:
As we know that
Cost of Goods Sold = Beginning balance of Finished Goods Inventory + Cost of Goods Manufactured – Ending balance of Finished Goods Inventory
= $2,000 + $55,000 - $5,500
= $51,500
We simply applied the cost of goods sold formula by taking the three items into the computation part
Reliance Corporation sold 4,500 units of its product at a price of $20 per unit. Total variable cost per unit is $11.00, consisting of $10.10 in variable production cost and $0.90 in variable selling and administrative cost. Compute the contribution margin for the company.
Answer:
$40,500
Explanation:
A Companies Contribution Margin is a product's price minus all associated variable costs, this final value gives the products incremental profit earned for each unit sold. Therefore in this scenario, the Contribution Margin for the company is as follows
(4,500 * $20) - (4,500 * $11)
$90,000 - $49,500
$40,500
Therefore the final Contribution Margin for the company is $40,500 dollars.
During the year, direct labor costs of $30,000 were incurred, manufacturing overhead totaled $42,000, materials purchased were $27,000, and selling and administrative costs were $22,000. Champagne sold 25,000 units of product during the year at a sales price of $5.00 per unit. What were the total manufacturing costs for the year assuming $2 comma 080 of indirect materials were used during the period?
Answer:
Using the models for total manufacturing cost that includes just direct labour costs, direct materials cost and overhead costs, total manufacturing cost = $99,000
Using the model that includes selling and administrative costs & indirect materials cost, total manufacturing cost = $123,080
Explanation:
Total manufacturing cost is a sum of the amount of cost incurred by a business to produce goods in a reporting period.
It usually consists of direct labour costs, direct materials cost and overhead costs.
In some models, the selling and administrative costs & cost of indirect materials are included.
Direct labour cost = $30,000
Manufacturing overhead costs = $42,000
Direct materials cost = $27,000
Total manufacturing cost = 30000 + 42000 + 27000 = $99,000
Selling and Administrative costs = $22,000
Indirect materials cost = $2,080
Total materials cost including selling and administrative costs & indirect materials cost = 99000 + 22000 + 2080 = $123,080
Hope this Helps!!!
Mexican Restaurant incurred salaries expense of $62,000 for 2018. The payroll expense includes employer FICA tax, in addition to state unemployment tax and federal unemployment tax. Of the total salaries, $22,000 is subject to unemployment tax. Also, the company provides the following benefits for employees: health insurance (cost to the company, $3,000), life insurance (cost to the company, $330), and retirement benefits (cost to the company, 10% of salaries expense)
Requirements:
1. Journalize Ricardo's expenses for employee benefits and for payroll taxes.
Explanations are not required.
2. What was Ricardo's total expense for 2018 related to payroll?
Answer:
1. The entry for the expenses of employee benefits and for payroll taxes would be as follows:
Debit Credit
Salaries Expense $62,000
FICA Taxes payable $4,743
Health insurance payable $3,000
Life Insurance payable $330
Retirement Benefits payable $6,200
Salaries payable $47,727
Debit Credit
Payroll tax expense $6,063
FICA Taxes payable $4,743
State unemployment taxes payable $1,188
Federal unemployment taxes payable $132
2. Ricardo's total expense for 2018 related to payroll was $68,063
Explanation:
1. According to the given the entry for the expenses of employee benefits and for payroll taxes would be as follows:
Debit Credit
Salaries Expense $62,000
FICA Taxes payable $4,743
Health insurance payable $3,000
Life Insurance payable $330
Retirement Benefits payable $6,200
Salaries payable $47,727
FICA Taxes payable=$62,000*7.65%=$4,743
Retirement Benefits payable=$62,000*10%=$6,200
Debit Credit
Payroll tax expense $6,063
FICA Taxes payable $4,743
State unemployment taxes payable $1,188
Federal unemployment taxes payable $132
FICA Taxes payable=$62,000*7.65%=$4,743
State unemployment taxes payable=$22,000*5.4%=$1,188
Federal unemployment taxes payable=$22,000*0.6%=$132
2. In order to calculate Ricardo's total expense for 2018 related to payroll we would have to make the following calculation:
Total expenses related to payroll=Salaries expense+payroll tax expense
Total expenses related to payroll=$62,000+$6,063
Total expenses related to payroll=$68,063
Ricardo's total expense for 2018 related to payroll was $68,063
You are an owner of a bakery, and you meet with other neighborhood bakery owners. In an attempt to increase sales, you collectively decide to lower prices by 10%. Which of the following are consequences of this price change?
A. The supply of fresh baked goods will decrease.
B. The quantity supplied of fresh baked goods will decrease.
C. Demand for processed baked goods will decrease.
D. The supply of fresh baked goods will increase.
E. The demand for fresh baked goods will not change.
F. The demand for fresh baked goods will increase.
Answer:
The quantity supplied of fresh baked goods will decrease ( B )
Demand for processed baked goods will decrease. ( C )
The demand for fresh baked goods will not change ( E )
Explanation:
When the neighbourhood bakery owners agree to lower prices of goods by 10% it will not have any effect on the demand for fresh baked goods hence the demand for fresh baked goods will not change because the demand for fresh baked goods have an in-elastic curve
Also since there is s drop in price the quantity supplied by the suppliers will decrease. while The demand for processed baked goods will decrease because of the substitute it has in fresh baked goods that just got its price slashed by 10%
The approach to ethical behavior which proposes that actions and plans should be judged by their consequences, thus producing the greatest benefit to society with the least harm or the lowest cost is called:__________.
A) individual rights approach.
B) mercantilism approach.
C) utilitarian approach.
D) justice approach.
E) moral imperialism approach.
Answer:
The correct answer is option (C)utilitarian approach.
Explanation:
Utilitarian approach: It is referred to as an action in relative to outcomes and reaction
For example, the cost and net benefits of all group of people based on an individual level. that is, by works towards achieving or aiming for the best for the greatest number while producing the least amount of suffering or harm.
Sheridan Company uses the periodic inventory system. For the current month, the beginning inventory consisted of 485 units that cost $66 each. During the month, the company made two purchases: 725 units at $69 each and 364 units at $71 each. Sheridan Company also sold 1198 units during the month. Using the average cost method, what is the amount of ending inventory? (Round average cost per unit to 2 decimal places, e.g. 21.48.)
Answer:
Value of closing inventory = $25771.04
Explanation:
To calculate the value of ending inventory under a periodic average cost method, we will calculate the average price per unit of inventory at the end of the month. To calculate the average price per unit, we simply divide the total cost of the inventory by the total number of units for the month.
Average cost per unit = Total cost of all units for the month / Total units available for the month
Total cost of all units:
Beginning inventory (485 * 66) 32010
Purchase 1 (725 * 69) 50025
Purchase 2 (364 * 71) 25844
Total 107879
Total Units
Beginning Inventory 485
Purchase 1 725
Purchase 2 364
Total 1574
Average cost per unit = 107879 / 1574
Average cost per unit = $68.54
Units of closing inventory = 1574 - 1198 = 376 units
Value of closing inventory = 376 * 68.54
Value of closing inventory = $25771.04
Read the following situation, and then answer the questions.
You have been working in an entry-level position in the Environmental Health and Safety division of a company for the last six months. You spend your time reviewing safety reports, entering them into the database, and compiling statistical analyses of the results for your superior, Ray Blaine. Lately, Mr. Blaine has been asking you when each report will be finished. Following this query, Mr. Blaine often compliments you on the results of your past analyses.
1) What is the most important message your superior is trying to deliver?
A. He is worried about the results of your analysis.
B. He wants to know when the report will be ready.
C. You are ready for a promotion.
2) What can you do to listen more effectively to your superior?
A. Lean forward and make eye contact.
B. Paraphrase his questions in return.
C. Ask questions in return.
Answer:
1)B
2)C
Explanation:
1) Mr. Blaine wants to know when will the results be ready. He is complimenting to let you know that he has good expectations from you.
2) Asking questions in return lets the other person know that you are interested in the conversation.
Answer:
Question 1 answer is B
Question 2 answer is C
Explanation:
1. From the data in the question, we can tell what your superior has in mind.
- The fact that Mr Blaine has been asking when each report will be finished shows that he is concerned ABOUT THE AMOUNT OF TIME it takes you to complete work on a safety report.
- He often compliments you on the results of your past analyses. This means that he is recertifying that your results come out fine and accurate BUT need to start coming out FASTER. He uses the compliments to lift your spirit so you don't feel downcast by the complaints. So you can be sure that as far as the work is concerned, YOU ARE GETTING IT RIGHT but as far as delivery window is concerned, you are delivering SLOWLY.
So the answer is B - he is most concerned about the timeframe you use to go through each report. He wants you to understand that good timing adds to the quality of a result!
2. The three options here are things you can do, to listen more effectively to your superior. The most important though is C.
You need to ask questions in return!
- Ask questions on the clarification of what exactly you are expected to do, in order to produce results that are both accurate and timely.
- Ask Mr. Blaine how he thinks you should go about it.
- Ask questions where you don't understand
- Ask when exactly you are to submit each result
After he replies, put his advice and corrections into practice.
There are 100 used laptop g for sale on the market. 40% of them are in good condition, and the rest of them are broken, which is the common knowledge to the owners and the buyers. Owners of broken laptops are willing to sell them for $300. Owners of good used laptops are willing to sell them if the price is above $1600 but will keep them if the price is lower than $1600. There is a large number of potential buyers who are willing to pay $2000 for a good laptop and $600 for a broken laptop. Buyers can't tell good laptops from bad, but original owners know. In equilibrium, what could be the maximum price set for a broken laptop to be sold
Answer:
In equilibrium the maximum price set for a broken laptop to be sold is $600
Explanation:
According to the given data we have the following:
It is given that 40% laptops are in good condition. This implies that 60% are in bad condition.
In ordert to calculate the maximum price set for a broken laptop to be sold we would have to calculate the expected price that the buyers will be willing to pay for a laptop as follows:
Expected price=0.60($2000)+0.40($600)
Expected price=$1,200+$240
Expected price=$1,440
As the owners of good laptops are willing to sell their laptops for $1,800, whis is more that $1,440, they will not sell their products.
This implies that only bad laptops are sold in the market. The willingless to pay for the bad laptops is $600
Therefore, In equilibrium the maximum price set for a broken laptop to be sold is $600
Zeke Company sells 26,900 units at $16 per unit. Variable costs are $9 per unit, and fixed costs are $38,100. The contribution margin ratio and the unit contribution margin, respectively, are
Answer:
Contribution margin ratio= 0.4375
Contribution margin= $7
Explanation:
Giving the following information:
Zeke Company sells 26,900 units at $16 per unit. Variable costs are $9 per unit, and fixed costs are $38,100.
To calculate the contribution margin per unit, we need to use the following formula:
Contribution margin= selling price - unitary variable cost
Contribution margin= 16 - 9= $7
Now, we can calculate the contribution margin ratio:
Contribution margin ratio= contribution margin/ selling price
Contribution margin ratio= 7/16
Contribution margin ratio= 0.4375
The rate of economic growth per capita in france from 1996 to 2000 was 1.9% per year, while in korea over the same period it was 4.2%. Per capita real GDP was $28,900 in france in 2003, and $12,700 in korea. Assume the growth rates for each country remain the same.
1. Compute the doubling time for France’s per capita real GDP.
2. Compute the doubling time for Korea’s per capita real GDP.
3. What will France’s per capita real GDP be in 2045?
4. What will Korea’s per capita real GDP be in 2045?
Answer:
36.83 years
16.85 years
$63,710.88
$ 71,490.43
Explanation:
We can use the nper formula in excel to compute the doubling time for the capital real GDP of both countries
=nper(rate,pmt,-pv,fv)
FV is the future real GDP which $28,900*2=$57,800 for France while that of Korea is $25,400 ($12,700*2)
PV is the present real GDP
rate is the economic growth rate of 4.2% in Korea and 1.9% in France
France=nper(1.9%,0,-28900,57800)= 36.83
Korea=nper(4.2%,0,-12700,25400)= 16.85
In 2045 ,which is 42 years from now the real GDP are shown thus:
=fv(rate,nper,pmt,-pv)=fv(1.9%,42,0,-28900)=$63,710.88
=fv(rate,nper,pmt,-pv)=fv(4.2%,42,0,-12700)=$ 71,490.43
Account A pays simple interest.
Future ValueA = Principal + Interest
= Principal + [(Principal x Interest Rate) x Investment Period]
= $2,000 + [($2,000 x 996) x 3 years]
Future Value of Account X Note: Account X pays compound interest.
Future Valuex = Present Value x Interest Rate Factor
= Present Valuex(1 +Interest Rate)n years
= $2,000 x (1 + 0.09)3
To find the interest rate factor, you can use three different ways, including multiplying it out:
Interest Factor(1 0.09) x (1 0.09) x (1 0.09)1.2950
Or using exponents and calculating it directly:
Interest Factor(10.09)31.2950
Or looking up the value in the Future Value Interest Factor Table:
Interest Factors
Periods 6% 7% 8% 9% 10 11
1 1.0600 1.0700 1.0800 1.0900 1.1000 1.1100
2 1.1236 1.1449 1.1664 1.1881 1.2100 1.2321
3 1.1910 1.2250 1.2597 1.2950 1.3310 1.3676
4 1.2625 1.3108 1.3605 1.4116 1.4641 1.5181
The fourth alternative for solving the equations is to let a financial calculator perform the calculation. This requires that you know how your calculator functions and how to enter the following variables:
P/ Y N I / YR PV FV
1 3 9 2,000
P/Y indicates the number of compounding periods per year, N is the number of years, I is the interest rate, PV is present value, and FV is future value.
Difference in Future Values
Difference = FVx_FVA
Answer:
Explanation:
Interest Factors
Periods 6% 7% 8% 9% 10% 11 %
1 1.0600 1.0700 1.0800 1.0900 1.1000 1.1100
2 1.1236 1.1449 1.1664 1.1881 1.2100 1.2321
3 1.1910 1.2250 1.2597 1.2950 1.3310 1.3676
4 1.2625 1.3108 1.3605 1.4116 1.4641 1.5181
1)
Future value paying simple interest = Principal + [( principal * interest) * investment period]
Future value paying simple interest = $2,000 + [ ( $2,000 * 9%) * 3]
Future value paying simple interest = $2,000 + 540
Future value paying simple interest = $2,540
2)
Future value paying compound interest = Present value * ( 1 + interest)n
Future value paying compound interest = $2,000 * ( 1 + 0.09)3
Future value paying compound interest = $2,000 * 1.295029
Future value paying compound interest = $2,590.058
3)
Difference = $2,590.058 - 2,540
Difference = $50.058
1. Crandle Manufacturers Inc. is approached by a potential customer to fulfill a one-time-only special order for a product similar to one offered to domestic customers. The company has excess capacity. The following per unit data apply for sales to regular customers: Variable costs: Direct materials $130 Direct labor 110 Manufacturing support 125 Marketing costs 65 Fixed costs: Manufacturing support 175 Marketing costs 85 Total costs 690 Markup (50%) 345 Targeted selling price $1,035 What is the full cost of the product per unit
Answer:
Full cost per unit = $690
Explanation:
The full cost of a product is the sum of its variable cost per unit and its fixed cost per unit. Costing a product at its full cost ensures that all costs are recovered both variable cost and fixed cost
The full cost for Crandle's product would be:
$
Material 130
Labour 110
Manufacturing 125
Market 65
Variable cost 430
Fixed cost
Manufacturing 175
Marketing 85
Full cost per unit 690
Full cost per unit = $690
1. Below are some of the components for Prufrock Corp. income statement for the year ending December 31t, 2016. Use the values to fill in the income statement and calculate the net income. All values are given in millions of dollars and there may be more lines provided than needed.
Sales $70,000
Tax Rate = 34%
Depreciation = $16,000
Interest Paid = $450
Cost of Goods Sold $35,000
Income Statement
Earnings Before Interest and taxes (EBIT)
Taxable Income (EBT)
Net Income
2. Prufrock Corp. has 4,000 million shares outstanding. If they do not reinvest any of their earnings what will be the dividend per share paid out this year?
3. Assume that the dividend from Part B will be paid out one year from today. After the initial dividend from part B is paid, the dividend is expected to grow at a rate of 4% per year. Investors require a 10% return on their investment, what is the current share price?
Answer and Explanation:
1. The computation of Earnings Before Interest and taxes, Taxable income and Net income is shown below:-
Earnings Before Interest = Revenue from sales - Cost of goods sold - Depreciation
= $70,000 - $35,000 - $16,000
= $19,000
Taxable Income = Earnings Before Interest - Interest paid
= $19,000 - $450
= $18,550
Net Income = Taxable Income - Taxes
= $18,550 - ($18,550 × 34%)
= $18,550 - $6,307
= $12,243
2. The computation of dividend per share is shown below:-
Dividend per share = Net income ÷ Number of shares outstanding
= $12,243 ÷ 4,000 million
= $3.06
3. The computation of current share price is shown below:-
Current share price = Current dividend ÷ (Expected return - Growth rate)
= $3.06 ÷ (10% - 4%)
= $3.06 ÷ 6%
= $51
Therefore we have applied the above formula.
Adams operates his $57500 firm using his own equity. Bob operates his firm with $28750 of his own money plus $28750 of debt at a cost of 5 percent interest. Calculate Adams's and Bob's return on equity if their respective businesses produce earnings before interest and tax of $7000. Assume perfect markets.
Answer:
Adam return on equity is 12.1%. while Bob return on equity is 19.3%
Explanation:
Given that:
Now,
For Adam:
Earnings before interest and taxes (EBIT) = Net income + Interest + Taxes
EBIT = $7000
The equity of shareholders = $57500
The number of debt by which Adams shows no interest expense and no tax expense as perfect market presumed is stated s follows:
ROE = Net income /Average Shareholder Equity
=$7000/$57500
=0.121739
Therefore, Adam return on equity is 12.1%
For Bob
The equity of shareholders = $28750
The expense (interest) = Debt * Interest rate
=$28750 * 0.05
= 1437.5
Thus
Net income = EBIT - Interest
= 7000 -1437.5
=5562.5
Now,
ROE = Net income /Average Shareholder Equity
=5562.5 /$28750
= 0.19347
=19.3%
Therefore, Bob return on equity is 19.3%
To make merit increases consistent, administrators of merit pay programs must closely monitor the compa-ratio and the:________.a. average pay of the area where the organization is based. b. number of grades in the pay structure. c. company's stock price in the current financial year. d. number of new hires in the company. individual's performance ratings.
Answer:
idk I'm dumb but try looking it up on the internet
Gelb Company currently manufactures 53,500 units per year of a key component for its manufacturing process. Variable costs are $2.95 per unit, fixed costs related to making this component are $67,000 per year, and allocated fixed costs are $64,500 per year. The allocated fixed costs are unavoidable whether the company makes or buys this component. The company is considering buying this component from a supplier for $3.50 per unit. Calculate the total incremental cost of making 53,500 units and buying 53,500 units. Should it continue to manufacture the component, or should it buy this component from the outside supplier
Answer and Explanation:
The computation of the total incremental cost is shown below;
For making 53,500 units
Particulars Relevant Relevant Total
Per Unit Fixed Costs Relevant Costs
Variable Cost
Per Unit $2.95 $157,825
(53,500 units × $2.95)
Fixed
Manufacturing
Costs $67,000 $67,000
Total Incremental Costs to Make $224,825
For making 53,500 units
Particulars Relevant Relevant Total
Per Unit Fixed Costs Relevant Costs
Purchase
Price
Per Unit $3.50 $187,250
(53,500 units × $3.50)
Total Incremental Cost to Buy $187,250
The company should buy the component from the outside supplier as it saves the cost for ($224,825 - $187,250) = $37,575 plus the buying cost is less than the making cost
HAW, Inc. plans to pay a $1.10 dividend per share in 3 months and a $1.15 dividend in 6 months. HAW's share price today is $45.60 and the continuously compounded quarterly interest rate is 2.1%. What is the price of a forward contract, which expires immediately after the second dividend?
Answer:
$45.28
Explanation:
The computation of price of a forward contract is shown below:-
Cash flows Future Value Amount Amount
A $45.60 $45.6 × exponential(0.021 × 2) $47.55599
B $1.10 $1.10 × exponential(0.021 × 1) $1.123344
C $1.15 $1.15 × exponential(0.021 × 0) $1.15
So, The value of forwards contract = Amount of A - Amount of B - Amount of C
= $47.55 - $1.12334 - $1.15
= $45.28
Evans Ltd. is now considering the possibility of offering a lifetime membership option to its subscribers. Under this proposal, subscribers could receive the monthly newsletter throughout their lives by paying a flat fee of $480. The one-year subscription rate of $40 would continue to apply to new and existing subscribers who choose to subscribe on an annual basis. Assume that the average age of Evans Ltd.'s current subscribers is 38 and their average life expectancy is 78 years. Evans Ltd.'s average interest rate on long-term debt is 12%.
Using the information given, calculate the present value of a lifetime membership for an average. (Round PV factors to 4 decimal places and final answer to 2 decimal places.)
Answer: $329.75
Explanation:
The one year subscription is $40 per year. It is estimated that the average age of current subscribers is 38 and they will leave on average to 78. This means that they will leave for,
= 78 - 38
= 40 years
Evans Ltd average interest rate on long-term debt is 12% so this means that we can use that 12% as a discount rate for the cash-flow expected.
I have attached a Present Value Interest Factor of an Annuity table to this question. It helps calculate annuities faster.
The above can be treated as an annuity because the $40 is constant every year.
The present value of the $40 over 40 years can be calculated by,
= $40 * present value Interest Factor of an Annuity for 40 years at 12% (look at the table for where 40 years on the y axis intersects with 12% on the x axis)
= $40 * 8.2438 (this is the figure when it is not rounded off to 3 dp)
= $329.752
= $329.75
This shows that the lifetime flat fee of $480 is more profitable for Evans Ltd as opposed to the yearly subscription. They should therefore try to sell more of the lifetime contract with the flat fee.
You are a project manager leading an IT development project. Halfway through your project, you realize that you need to hire an additional worker in order to complete the project on time. How will you convince your project sponsors to authorize the hire? How will you on-board your new worker?
Answer:
The project manager can convince the project sponsors with the following reasons which are,
(1) Telling the sponsors the additional benefits that the team will have once a member enters the team.
(2)Informing the sponsors about the work not completed due to lesser number of workers.
(3)Informing the sponsors the additional benefits that the team will have once a member enters the team.
For on boarding a new worker the project manager does the following which includes:
(1)it is very necessary to share the agendas and charters of the previous meetings of the project to help individuals to familiarize with the project scope and goals.
(2)Having a one one meeting a with the individual and discussing with him/her about the project and solve his/her issues.
(3) Doing a formal introduction of the new member to both the project team and stakeholders of the project.
Explanation:
Solution:
In the half way of the project, the project manager can convince the project sponsors in the following ways shown below:
Informing the sponsors about the work not completed due to lesser number of workersInforming the sponsors about the delays taking place due to shortage of members in the teamTelling the sponsors the additional benefits that the team will have once a member enters the teamConvincing the sponsors by discussing and talking with him/her the various drawbacks of not having the required numbers of members in the team.For getting a new member on board for the project, it is very important to share the agendas and charters and minutes of the previous meetings of the project to enable individuals to familiarize with the project scope and goals.
Secondly, a one one meeting and discussion with the individual must be organized to brief him/her about the project and solve his/her issues.
Finally the new member must be introduced to both the project team and stakeholders of the project.
The following list of statements about corporations are given below.
1. A corporation is an entity separate and distinct from its owners.
2. As a legal entity, a corporation has most of the rights and privileges of a person.
3. Most of the largest U.S. corporations are publicly held corporations.
4. Corporations may buy, own, and sell property; borrow money; enter into legally binding contracts; and sue and be sued.
5. The net income of a corporation is taxed as a separate entity.
6. Creditors have no legal claim on the personal assets of the owners of a corporation if the corporation does not pay its debts.
7. The transfer of stock from one owner to another does not require the approval of either the corporation or other stockholders; it is entirely at the discretion of the stockholder.
8. The board of directors of a corporation manages the corporation for the stockholders, who legally own the corporation.
9. The chief accounting officer of a corporation is the controller.
10. Corporations are subject to more state and federal regulations than partnerships or proprietorships. Andrea has studied the information above and has come with more statements about corporations.
Identify whether each statement is true or false.
1. Corporation management is both an advantage and a disadvantage of a corporation compared to a proprietorship or a partnership.
A. True B. False
2. Limited liability of stockholders, government regulations, and additional taxes are the major disadvantages of a corporation.
A. True B. False
3. When a corporation is formed, organization costs are recorded as an asset.
A. True B. False
4. Each share of common stock gives the stockholder the ownership rights to vote at stockholder meetings, share in corporate earnings, keep the same percentage ownership when new shares of stock are issued, and share in assets upon liquidation.
A. True B. False
5. The number of issued shares is always greater than or equal to the number of authorized shares.
A. True B. False
6. A journal entry is required for the authorization of capital stock.
A. True B. False
8. Publicly held corporations usually issue stock directly to investors. The trading of capital stock on a securities exchange involves the transfer of already issued shares from an existing stockholder to another investor.
A. True B. False
9. The market price of common stock is usually the same as its par value.
A. True B. False
10. Retained earnings is the total amount of cash and other assets paid in to the corporation by stockholders in exchange for capital stock.
A. True B. False
Answer:
1. Corporation management is both an advantage and a disadvantage of a corporation compared to a proprietorship or a partnership.
A. True B. False
2. Limited liability of stockholders, government regulations, and additional taxes are the major disadvantages of a corporation.
A. True B. False
3. When a corporation is formed, organization costs are recorded as an asset.
A. True B. False
4. Each share of common stock gives the stockholder the ownership rights to vote at stockholder meetings, share in corporate earnings, keep the same percentage ownership when new shares of stock are issued, and share in assets upon liquidation.
A. True B. False
5. The number of issued shares is always greater than or equal to the number of authorized shares.
A. True B. False
6. A journal entry is required for the authorization of capital stock.
A. True B. False
8. Publicly held corporations usually issue stock directly to investors. The trading of capital stock on a securities exchange involves the transfer of already issued shares from an existing stockholder to another investor.
A. True B. False
9. The market price of common stock is usually the same as its par value.
A. True B. False
10. Retained earnings is the total amount of cash and other assets paid in to the corporation by stockholders in exchange for capital stock.
A. True B. False
Explanation:
1) Corporation management means that experts can be hired as managers. On the other hand, the managers may not act in the best interest of the owners, even though, they are legally required to do so.
2) Limited liability of stockholders, government regulations, and additional taxes are the major disadvantages of a corporation. Limited liability of stockholders may be a disadvantage to non-stockholders, but it is an advantage for stockholders, who will not be required to contribute more money to offset liabilities of the corporation in the event of liquidation. Since corporations are distinct persons in law, they also need to be regulated and taxed as separate persons. So, this is not a disadvantage. It is only a consequence of being separate entity, like all individuals.
3) Organization costs include legal payments, state and federal registration, and incorporation fees, promotions, and charges associated with the underwriting of stocks and bonds. Organization costs can be classified as assets on the company's balance sheet.
4) A share in a company's stock accords some rights on the holder as itemized above.
5) The number of issued shares may be equal to or less than the authorized shares. Some companies do not issue all the shares that they are authorized to issue at the same time.
6) Authorization of capital stock does not require a journal entry. A memorandum record of the authorization is instead maintained to show the number of authorized capital shares and the par value.
7) There is no question 7.
8) Initial public offerings are made directly to investors. The stock exchange market caters for the exchange of shares among investors. The company is not involved and does not take any financial record, except the register of shareholders.
9) The market price of shares may be more or less than the par value. The market price is determined by investors, who exchange shares at arm's length in the stock exchange market. The par value is determined by those authorizing the issue of shares.
10) Retained Earnings are the income generated by the corporation which have not been distributed to shareholders in the form of dividends.
"Donald is a 21-year-old full-time college student. During 2019, he earned $2,550 from a part-time job and $1,150 in interest income. If Donald is a dependent of his parents, what is his standard deduction amount
Answer:
His standard deduction amount would be of $ 2,900
Explanation:
In order to calculate his standard deducion amount If Donald is a dependent of his parents we would have to make the following calculation:
Since His earned income is more than $1,150, therefore, Standard Deduction would be= $2,550 + $350
Standard Deduction would be= $2,900
Therefore, If Donald is a dependent of his parents, his standard deduction amount would be of $ 2,900
W.T. Ginsburg Engine Company manufactures part ACT30107 used in several of its engine models. Monthly production costs for 1,090 units are as follows: Direct materials $46,000 Direct labor 10,500 Variable overhead costs 32,500 Fixed overhead costs 22,000 Total costs $111,000 It is estimated that 6% of the fixed overhead costs assigned to ACT30107 will no longer be incurred if the company purchases ACT30107 from the outside supplier. W.T Ginsburg Engine Company has the option of purchasing the part from an outside supplier at $94.75 per unit. If the company accepts the offer from the outside supplier, the monthly avoidable costs (costs that will no longer be incurred) total ________.
Answer:
Cost that will no longer be incurred = $90320
Explanation:
$
The relevant variable cost
= 46,000 + 10,500 + 32,500 $89,000
Cost of external supply
= 94.75 × 1090= $103,277.50
Increase in of purchase 14,277.50
Savings in fixed cost (6%× 22,000) ( 1320
Net increase in cost if purchased 12,957.50
Cost that will no longer be incurred = 89,000 +1320 = $90320
Cost that will no longer be incurred = $90320
Le Son, Inc., has current liabilities of $11,700 an accounts receivable of $15,200. The firm has total assets of $43,400 and net fixed assets of $24,800. The owners' equity has a book value of $21,000. What is the amount of the net working capital
Answer:
Explanation:
These terms are culled from Balance sheet and Balance sheet have two sides, The Debit and Credit side. The debit side contain the Capital, Current Liabilities among others and The Credit side contain The Fixed asset and the Current asset
The amount of Net working capital is derived from Current asset - Current Liability
Net working capital = Current asset - Current Liability
Where Current asset = Total asset - Net Fixed asset= 43,400-24,800 = 18,600
Where Current Liability = 11,700
Therefore, Net working capital = $18,600 - $11,700 = $6,900
The amount of the net working capital = $6,900
A water utility is planning to construct a grease treatment facility so that local haulers will not have to transport grease to a city 550 km away. The facility will cost $400,000 to build and $160,000 per year to operate. Benefits to the haulers and restaurant owners (through reduced costs) are expected to be $250,000 per year. If the facility will have a 10-year life, the B/C ratio at 6% per year is closest to:
Answer:
The B/C ratio at 6% per year is closest to 1.17
Explanation:
In order to calculate the B/C ratio at 6% per year we would have to make first the following calculations:
Present Worth(PW) of annual operating cost (excel formula) =PV(0.06,10,160000,0) = $1,177,613.93
PW of annual benefit (excel formula) =PV(0.06,10,250000,0) = $1,840,021.76
Present cost (at beginning of project) = $400,000
Therefore, to calculate the B/C ratio at 6% we would use the following formula:
B/C ratio at 6%=PW of benefits-PW of disbenefits/Initial cost+PW of operating and maintenance-PW of salvage value
B/C ratio = ($1,840,021.76 - 0)/($400,000 - $1,177,613.93) = 1.17
The RST Company makes 38,000 parts to be used in its main products. The cost per part at this activity level is:
Direct materials
$
6.50
Direct labor
$
6.60
Variable manufacturing overhead
$
3.75
Fixed manufacturing overhead
$
3.45
An outside supplier offered to supply RST Company this part at $18 per unit. If RST Company decides not to make the parts, there would be no other use for the production facilities and none of the fixed manufacturing overhead cost could be avoided. Direct labor is a variable cost. The annual financial advantage (disadvantage) for the company as a result of buying these parts from the outside supplier rather than making them internally would be:
($186,200)
($87,400)
($43,700)
$87,400
Answer:
($43,700)
Explanation:
38,000 units produced:
Direct materials $ 6.50 Direct labor $6.60 Variable manufacturing overhead $3.75 Fixed manufacturing overhead $3.45total cost per unit = $20.30outside supplier offers parts at $18 per unit
fixed manufacturing overhead is unavoidable
Alternative 1 Alternative 2 Differential
keep producing buy amount
Prod. cost $771,400 $0 $771,400
Purchase cost $0 $684,000 ($684,000)
Unavoidable costs $0 $131,100 ($131,100)
total $771,400 $815,100 ($43,700)
The financial disadvantage of purchasing the parts from an outside vendor = ($43,700)
Lipman Auto Parts, a family-owned auto parts store, began January with $10,300.00 in cash. Management forecasts that collections from credit customers will be $11,400.00 in January and $14,800.00 in February. The store is scheduled to receive $5,000.00 in cash on a business note receivable in January. Projected cash payments include inventory purchases ($13,000.00 in January and $13,600.00 in February) and operating expenses ($2,700.00 each month). Lipman Auto Parts’ bank requires a $10,000.00 minimum balance in the store’s checking account. At the end of any month when the account balance dips below $10,000.00, the bank automatically extends credit to the store in multiples of $1,000.00. Lipman Auto Parts borrows as little as possible and pays back loans in quarterly installments of $2,000.00, plus 4 percent interest on the entire unpaid principal. The first payment occurs three months after the loan.
Prepare Lipman Auto Parts
Answer: The answer has been attached below
Explanation:
The question says we should prepare Lipman Auto Parts cash budget for January and February.
A cash budget is a budget of expected cash receipts and the disbursements during a period. The cash inflows and cash outflows include revenues collected, the expenses paid, and the loans receipts and payments. A cash budget is an estimated projection of a company's cash position in the future.
Lipman Auto Parts cash budget for January and February has been solved and attached.
Melody and Todd are married and have employee wages of $250,000 each in 2019. They have no other income. How much additional 0.9% Medicare tax will Melody and Todd have to pay or receive as a refund when they file their 2019 income tax return?
Answer:
$1,350
Explanation:
The computation of the amount pay or received as a refund at the time of filing the income tax return for the year 2019 is shown below:
As we know that
The Medicare tax rate is 1.45% till $200,000
And, if it is above $200,000 than 2.35% is charged (1.45% + 0.9%)
Now
For individually calculated,
Melody = ($200,000 × 1.45%) + ($50,000 × 2.35%) = $4,075
Todd = ($200,000 × 1.45%) + ($50,000 × 2.35%) = $4,075
So, the total is
= $4,075 + $4,075
= $8,150
Now if they filling their joint return so
Total salary is $500,000 ($250,000 × 2)
Medicare upto $250,000 = $3,625 ($250,000 × 1.45%)
for remaining $250,000 = $5,875 ($250,000 × 2.35%)
So, the Total is
= $3,625 + $5,875
= $9,500
Now the refund is
= Joint return - individually return for each one
= $9,500 - $8,150
= $1,350
Last year, Bad Tattoo Co. had additions to retained earnings of $4,865 on sales of $95,805. The company had costs of $75,885, dividends of $3,040, and interest expense of $2,120. If the tax rate was 35 percent, what the depreciation expense
Answer:
The depreciation expense is $5638.46 and the Addition to retained earnings is 4865
Explanation:
Solution
Given that:
Sales = $95805
Less: Costs = $75885
Less depreciation expense ($95805 - $75,885 - 14281.54) = $5638.46
EBIT (12161.54 + 2120) = 14281.54
Less: Interest expense =2120
EBT (100%)(7905/0.65) = 12161.54
Less: tax at 35%(12161.54*35%) =4256.54
The Net income(65%) = 7905
The Less:dividends = 3040
Addition to retained earnings =4865
