Answer:
1)
Since Bloom plans to sell the bonds, it must record the entire loss as credit loss (loss on sale of bonds)
Dr Other than temporary impairment loss 400,000
Cr Discount on bond investment - Taylor bonds 400,000
Credits losses must be recognized as a loss in earnings in the income statement.
2)
Journal entry to record credit loss:
Dr Other than temporary impairment loss 250,000
Cr Discount on bond investment - Taylor bonds 250,000
Journal entry to record non-credit loss:
Dr Other than temporary impairment loss 150,000
Cr Fair value adjustment - Taylor bonds 150,000
Non-credit losses must be recognized as part of other comprehensive income/loss and must be disclosed separately than credit losses. They must be reported in the balance sheet (they lower retained earnings directly), not the income statement.
You believe that the Non-Stick Gum Factory will pay a dividend of $2 on its common stock next year. Thereafter, you expect dividends to grow at a rate of 5% a year in perpetuity. If you require a return of 12% on your investment, how much should you be prepared to pay for the stock
Answer:
$28.57
Explanation:
Dividend growth model can only be used in a situation where the firm pays a dividend which can tend to grow at constant rates reason been that the stock has been influenced by the growth rates which is involved in the dividends which means the firm can increase the dividends.
Therefore the Dividend that is to be paid next year will be:
$2Growth rates
5 %Rates of return
12% Return on Investment
Formular for the calculation of current price of the stock = D1/(r-g)
Where:
D1=2%
r=12%
g=6%
Hence:
2/ (0.12-0.05)= $ 33.33
=2/0.07
=$28.57
Therefore the amount I should be prepared to pay for the stock today will be $28.57
he credit union will have $1.6 million available for investment during the coming year. State laws and credit union policies impose the following restrictions on the composition of the loans and investments. Risk-free securities may not exceed 30% of the total funds available for investment. Signature loans may not exceed 10% of the funds invested in all loans (automobile, furniture, other secured, and signature loans). Furniture loans plus other secured loans may not exceed the automobile loans. Other secured loans plus signature loans may not exceed the funds invested in risk-free securities. How should the $1.6 million be allocated to each of the loan/investment alternatives to maximize total annual return
Here is the full question.
The employee credit union at State University is planning the allocation of funds for the coming year. The credit union makes four types of loans to its members. In addition, the credit union invests in risk-free securities to stabilize income. The various revenue producing investments together with annual rates of return are as follows:
Type of Loan/Investment Annual Rate of Return (%)
Automobile loans 8
Furniture loans 10
Other secured loans 11
Signature loans 12
Risk-free securities 9
The credit union will have $1.6 million available for investment during the coming year. State laws and credit union policies impose the following restrictions on the composition of the loans and investments.
Risk-free securities may not exceed 30% of the total funds available for investment.
Signature loans may not exceed 10% of the funds invested in all loans (automobile, furniture, other secured, and signature loans).
Furniture loans plus other secured loans may not exceed the automobile loans.
Other secured loans plus signature loans may not exceed the funds invested in risk-free securities.
How should the $1.6 million be allocated to each of the loan/investment alternatives to maximize total annual return? Round your answers to the nearest dollar.
Automobile Loans $
Furniture Loans $
Other Secured Loans $
Signature Loans $
Risk Free Loans $
What is the projected total annual return? Round your answer to the nearest dollar.
$
Answer:
Explanation:
Let the amount invested in:
Automobile loans be Xa,
Furniture Loans be Xf,
Other Secured Loans be Xo,
Signature loans be Xs, &;
Risk-free loans be Xr
In reference on the Annual returns rate given;
Total annual returns = 8%×Xa + 10%×Xf + 11%×Xo + 12%×Xs + 9%×Xr
The various constraints given can be written as follows:
Xa + Xf + Xo + Xs + Xr = 1,600,000-----Constraint for amount available for investment
Xr = 30%*1,600,000 ----- Constraint for maximum risk free investment
Xs = 10%*(Xa + Xf + Xo + Xs) ----- Constraint for maximum amount in signature loans
Xf + Xo = Xa ------- Constraint for Furniture and other secured loans
Xo + Xs = Xr ------ Constraint for other secured loans and signature loans
Using the Excel Formula for solving this;
we have the following result.
Automobile Loans $ 504,000
Furniture Loans $ 136,000
Other Secured Loans $ 368,000
Signature Loans $ 112,000
Risk-Free Loans $ 480,000
The projected total annual return = $ 151,040
The computation of the excel formula on how we arrived at those valid figures above is shown in the attached files below.
Thanks!
Some of the information found on a detail inventory card for Headland Inc. for the first month of operations is as follows.
Received
Date No. of Units Unit Cost Issued, No. of Units Balance, No. of Units
January 2 1,700 $3.39 1,700
7 1,200 500
10 1,100 $3.62 1,600
13 1,000 600
18 1,500 $3.73 800 1,300
20 1,100 200
23 1,800 $3.84 2,000
26 1,300 700
28 2,100 $3.96 2,800
31 1,800 1,000
Calculate average-cost per unit. (Round answer to 2 decimal places, e.g. 2.76.)
Average-cost per unit $ _____
From these data compute the ending inventory on each of the following bases. Assume that perpetual inventory records are kept in units only.
(1) First-in, first-out (FIFO).
(2) Last-in, first-out (LIFO).
(3) Average-cost. (Round final answers to 0 decimal places, e.g. 6,548.)
(1) FIFO (2) LIFO (3) Average-cost
Ending Inventory $ $ $
If the perpetual inventory record is kept in dollars, and costs are computed at the time of each withdrawal, would the amounts shown as ending inventory in (1), (2), and (3) above be the same? What amount would be shown as ending inventory? (Round average cost per unit to 4 decimal places, e.g. 2.7621 and final answers to 0 decimal places, e.g. 6,548.)
Answer:
Average-cost per unit $ $3.73
ending inventory in units only:
FIFO = 1,000 x $3.96 = $3,960LIFO = 1,000 x $3.39 = $3,390 Average = $3,728
ending inventory including $:
FIFO = 1,000 x $3.96 = $3,960 (this will not change)LIFO = 1,000 x $3.96 = $3,960 (this will change) Average = $3,728 / (this will not change)Explanation:
Date units units unit total balance
purchased sold price
January 2 1,700 $3.39 $5763 1,700
7 1,200 500
10 1,100 $3.62 $3982 1,600
13 1,000 600
18 1,500 $3.73 $5595 2,100
18 800 1,300
20 1,100 200
23 1,800 $3.84 $6912 2,000
26 1,300 700
28 2,100 $3.96 $8316 2,800
31 1,800 1,000
total 8,200 $3.7278 $30,568
The cost of doing business is most likely to be the lowest in:_______.
a. closed totalitarian states.
b. primitive or undeveloped economies.
c. open democratic societies.
d. countries where local laws and regulations set strict standards with regard to product safety, safety in the workplace, and environmental pollution.
e. countries that lack well-established laws for regulating business practice.
Answer:
C. Open democratic societies.
Explanation:
Generally, the cost of doing business is most likely to be the lowest in an open democratic societies.
An open democratic society is one that is characterized by a degree of freedom for the populace and as such, it gives the people the privilege of fairly competing for all resources.
In an open democratic society, there's ease of doing business because the government would ensure there's an enabling environment by virtue of laws, regulations, policies, SME loans, taxation etc. The open society being opposed to autocracy, ensures that the government is typically responsive and tolerant to every individual living in the country. This simply means that, fundamental human rights and all the necessary infrastructures or amenities such as power, water, transportation systems are readily available and accessible to all.
Consequently, the cost of doing business becomes low and more individuals would be willing to startup their business; investors are confident of investing in the economy because they believe in the system put in place in an open democratic society.
Universal Containers wants to provide a more consistent service experience to its customers and is evaluating the Service Cloud macro feature. Which three configurations must be made?
A. Users must use Lightning Experience. B. Publisher Actions used in the macros must be on the page layout.C. The Macros widget or utility must be added to the console.D. The Run Macros Permission must be granted to users.E. The Run Macros Action must be on the page layout.
Answer:
B. Publisher Actions used in the macros must be on the page layout.
C. The macros widget or utility must be added to the console
D. The run Macros permission must be granted to users.
Explanation:
The macros are a function which specifies how an input function should be mapped in the computer software to produce defined output. Macros are used to make tasks less repetitive. The macros can be used in service cloud. To use macros in service cloud the macros permission must be granted to all users, the macros widget must be added to the console and the macros must be on the page layout.
Assume that the economy has three types of people. 20% are fad followers, 75% are passive investors and 5% are informed traders. The portfolio consisting of all informed traders has a beta of 1.4 and an expected return of 12.4%. The market has an expected return of 10% and the risk-free rate is 4%. The expected return for the fad follower's portfolio is closest to:__________.
a. 11.5%
b. 13.6%
c. 16%
d. 12.4%
Answer: a. 11.5%
Explanation:
Fad followers are those investors who follow a trend when it emerges and as such their betas will be less than that of informed traders because the informed traders would have acted first.
Using the Capital Asset Pricing Model to calculate expected return.
Er = Rf + b( Rm - Rf)
Er = Expected return
Rf = Risk Free Rate
b = Beta
Rm = Market Return.
The Expected Return for the Informed Investors is,
= 4% + 1.4 ( 10% - 4%)
= 4% + 1.4 ( 6%)
= 12.4%
With the Fad followed expected to have a lower beta and therefore a lower expected return than the Informed Investors, the only suitable option is the 11.5%.
A building is acquired on January 1, at a cost of $960,000 with an estimated useful life of 10 years and salvage value of $86,400. Compute depreciation expense for the first three years using the double-declining-balance method. (Round your answers to the nearest dollar.)
Answer:
Year 1 - $192,000
Year 2 - = $153,600
Year 3 - $122,880
Explanation:
Depreciation expense using the double declining method = Depreciation factor x cost of the asset
Depreciation factor = 2 x (1/useful life) = 2 x (1/10) = 0.2
Depreciation expense in the first year = 0.2 x $960,000 = $192,000
Book value at the beginning of year 2 = $960,000 - $192,000 = $768,000
Depreciation expense in year 2 = 0.2 x $768,000 = $153,600
Book value in year 3 = $768,000 - $153,600 = $614,400
Depreciation expense in year 3 = 0.2 x $614,400 = $122,880
I hope my answer helps you
Barbara owns a manufacturing plant with four facilities (North, South, East, and West) in the state of Indiana. The workers at one of those facilities, North, have just decided to join a union. The union negotiates with Barbara and receives average wages that are 5% higher than the workers at the South, East, and West facilities. This wage differential is a likely example of:
Answer:
Union power
Explanation:
The difference in wages is as a result of Union power because the North now belongs to a labor union that protects their interest. A labor union is an organization that plays the role of an intermediary between their members and their employers. The workers in the North through the union are able to negotiate for better wages. Through collective bargaining, the union gives workers In the North the power to request for better work pay than workers in the east, West and South facilities.
The price of a European call option on a stock with a strike price of $50 is $6. The stock price is $51, the continuously compounded risk-free rate (all maturities) is 6% and the time to maturity is one year. A dividend of $1 is expected in six months. What is the price of a one-year European put option on the stock with a strike price of $50?
Answer:
$3.06
Explanation:
The put call parity shows the relationship between the price of European put options and European call options of the same strike price and expiry date.
Given that:
Strike price (K) = $50
Price (C) = $6
rate (r) = 6% = 0.06
Stock price (SO) = $51
Time (T) = 1 year
Dividend (D) = $1
The period of dividend (t) = 6 months = 0.5 years
The put call parity (P) is given by the equation:
[tex]P+SO=C+Ke^{-rT}\\P=C+Ke^{-rT}-SO[/tex]
The dividend present value = [tex]De^{-rt}=1e^{-0.06*0.5}=\$0.97[/tex]
[tex]P=C+Ke^{-rT}-SO\\P=6+50e^{-0.06*1}-(51-0.97)\\P=6+47.088-50.03\\P=\$3.06[/tex]
Prepare journal entries to record the December transactions in the General. Use the following accounts as appropriate: Cash, Accounts Receivable, Supplies, Prepaid Insurance, Equipment, Accumulated Depreciation, Accounts Payable, Wages Payable, Common Stock, Retained Earnings, Dividends, Service Revenue, Depreciation Expense, Wages Expense, Supplies Expense, Rent Expense, and Insurance Expense.
1-Dec Began business by depositing $10500 in a bank account in the name of the company in exchange for 1050 shares of $10 per share common stock.
1-Dec Paid the rent for the current month, $950 .
1-Dec Paid the premium on a one-year insurance policy, $600 .
1-Dec Purchased Equipment for $3600 cash.
5-Dec Purchased office supplies from XYZ Company on account, $300 .
15-Dec Provided services to customers for $7200 cash.
16-Dec Provided service to customers ABC Inc. on account, $5200 .
21-Dec Received $2400 cash from ABC Inc., customer on account.
23-Dec Paid $170 to XYZ company for supplies purchased on account on December 5 .
28-Dec Paid wages for the period December 1 through December 28, $4480 .
30-Dec Declared and paid dividend to stockholders $200 .
Answer:
1-Dec
Cash $10500 (debit)
Common Stock $10500 (credit)
1-Dec
Rent Expense $950 (debit)
Cash $950 (credit)
1-Dec
Prepaid Insurance $600 (debit)
Cash $600 (credit)
1-Dec
Equipment $3600 (debit)
Cash $3600 (credit)
5-Dec
Supplies Expense $300 (debit)
Accounts Payable $300 (credit)
15-Dec
Cash $7200 (debit)
Service Revenue $7200 (credit)
16-Dec
Accounts Receivable $5200 (debit)
Service Revenue $5200 (credit)
21-Dec
Cash $2400 (debit)
Accounts Receivable $2400 (credit)
23-Dec
Accounts Payable $170 (debit)
Cash $170 (credit)
28-Dec
Wages Expense $4480 (debit)
Cash $4480 (credit)
30-Dec
Dividends $200 (debit)
Cash $200 (credit)
Explanation:
It is important to remember that Insurance paid in advance is an Asset hence, premium on a one-year insurance policy was recorded in Prepaid Insurance.
Hahn Flooring Company uses a perpetual inventory system.
A. Sales returns of $97,650 and merchandise returns of $48,100 are estimated for the current year's sales.
B. The inventory account has a balance of $673,400, while physical inventory indicates that $663,800 of merchandise is on hand.
Journalize the December 31 adjusting entries based on the above transactions. Assume that the inventory shrinkage is a normal amount. Refer to the Chart of Accounts for exact wording of account titles.
Answer and Explanation:
The adjusting journal entries are as follows
1. Sales $97,650
To Customer refunds payable $97,650
(Being the sales return is recorded)
For recording this we debited the sales as it reduced the sales and credited the customer refund payable as it increased the liabilities
2. Estimated Returns inventory $48,100
To Cost of goods sold $48,100
(Being the merchandise return is recorded)
For recording this we debited the estimated returns inventory and credited the cost of goods sold
3. Cost of goods sold $9,600
To Inventory $9,600
(Being the inventory shrinkage is recorded)
For recording this we debited the cost of goods sold as it increased the expenses and credited the inventory as it reduced the assets
The computation is shown below:
= Balance of inventory account - physical inventory merchandise on hand
= $673,400 - $663,800
= $9,600
Federal Semiconductors issued 11% bonds, dated January 1, with a face amount of $830 million on January 1, 2021. The bonds sold for $767,557,868 and mature on December 31, 2040 (20 years). For bonds of similar risk and maturity the market yield was 12%. Interest is paid semiannually on June 30 and December 31. Federal determines interest at the effective rate. Federal elected the option to report these bonds at their fair value. On December 31, 2021, the fair value of the bonds was $750 million as determined by their market value in the over-the-counter market. Assume the fair value of the bonds on December 31, 2022 had risen to $756 million.Required: Complete the below table to record the following journal entries. 1. & 2. Prepare the journal entry to adjust the bonds to their fair value for presentation in the December 31, 2018, balance sheet, and adjust the bonds to their fair value for presentation in the December 31, 2019, balance sheet. Federal determined that one-half of the increase in fair value was due to a decline in general interest rates.
Answer:
discount on bonds payable 18,383,020.48 debit
other comprehensive income 18,383,020.48 credit
--to adjust Bonds at 12/31/2021 market value --
other comprehensive income 4.739.000 debit
discount on bonds payable 4.739.000 credit
--to adjust Bonds at 12/31/2022 market value --
Explanation:
We solve for the book value at year-end using effective rate
First year:
First payment
830,000,000 x 5.5% = 45,650,000
767,557,868 x 6.0% = 46,053,472.08
Amortization 403,472.08
Second Payment
830,000,000 x 5.5% = 45,650,000
(767,557,868 + 403,472.08) x 6.0% = 46,077,680.4
Amortization 427680.4
Carrying value at year-end
767,557,868 + 403,472.08 + 427,680.40 = 768,389,020.48
We need to recognize a deferred gain for the difference between these and the 750,000,000 market value at December 31th
which is $ 18,383,020.48 as these as not been realized it will be part of other comprehensive income
We will increase the discount to adjust the bonds payable account net balance.
Second year:
We repeat the process
First Payment:
830,000,000 x 5.5% = 45,650,000
Interest expense 750,000,000 x 6% = 45,000,000
Amortization 650000
Carrying value 750,000,000 + 650,000 = 750,650,000
Second Payment:
830,000,000 x 5.5% = 45,650,000
750,650,000 x 6% = 45,039,000
Amortization 611000
Carrying Value 750,650,000 + 611,000 = 751,261,000
Wer now compare this with the 756,000,000
as now the debt of the company has increased we are going to decrease the discounttand recognize a deferred loss through other comprehensive income as it wasn't realized
756,000,000 - 751,261,000 = 4.739.000
Portman Industries just paid a dividend of $1.68 per share. The company expects the coming year to be very profitable, and its dividend is expected to grow by 20.00% over the next year. After the next year, though, Portman's dividend is expected to grow at a constant rate of 4.00% per year The risk-free rate (Rr) is 5.00%, the market risk premium (RPM) is 6.00%, and Portman's beta is 0.90 Term Value Dividends one year from now (Di Horizon value (P1) Intrinsic value of Portman's stock Assuming that the market is in equilibrium, use the information just given to complete the table What is the expected dividend yield for Portman's stock today? a. 6.15% b. 5.12% c. 6.79% d. 6.40% Now let's apply the results of your calculations to the following situation: Portman has 500,000 shares outstanding, and Judy Davis, an investor, holds 7,500 shares at the current price (computed above). Suppose Portman is considering issuing 62,500 new shares at a price of $26.78 per share. If the new shares are sold to outside investors, by how much will Judy's investment in Portman Industries be diluted on a per-share basis? a. $0.52 per share b. $0.44 per share c. $0.64 per share d. $1.09 per share Thus, Judy's investment will be diluted, and Judy will experience a total:_____.
Answer:
What is the expected dividend yield for Portman's stock today?
d. 6.40%
Suppose Portman is considering issuing 62,500 new shares at a price of $26.78 per share. If the new shares are sold to outside investors, by how much will Judy's investment in Portman Industries be diluted on a per-share basis?
a. $0.52 per share
Thus, Judy's investment will be diluted, and Judy will experience a total loss of $0.52 x 7,500 = $3,900
Explanation:
cost of equity = Re = risk free rate of return + (Beta × market premium) = 5% + (0.90 x 6%) = 10.4%
dividend in one year = $1.68 x 120% = $2.016
intrinsic stock price = $2.016 / (10.4% - 4%) = $31.50
expected dividend yield = dividend / stock price = $2.016 / $31.50 = 6.4%
Judy's loss per share = ($31.50 - $26.78) x (62,500 / 562,500) = $0.5244
The following is a description of the conversion cycle of Central Production Limited:
The conversion cycle of the company is triggered by a report from the warehouse. When the quantity of an inventory item falls below a pre-set minimum level, the warehouse manager sends an online inventory status report to production department advising them to schedule a production batch run for the item.
Upon receipt of the report, the production clerk assesses the digital bill of materials and the route sheet files for the item to be produced and adds the production details to the online production schedule.
The system automatically adds a record to the open work order file and sends an online work order to the work centre supervisor’s computer and to the accounting clerk’s computer.
The work centre supervisor receives the work order from his computer and print hard-copy move tickets and materials requisitions for each production process. Production employees take the materials requisitions to store clerk and receives the materials and subassemblies needed to perform the production tasks. If additional materials beyond the standard amount is needed, the work centre supervisor prepares additional materials requisitions.
Production employees complete job time tickets after completing a production process to record the time spent on the job. The job time tickets are then sent together with the move tickets to the accounting department.
After releasing the materials into production, the store clerk updates the material inventory records and send the materials requisitions to accounting department. The clerk prepares a journal voucher and posts to the general ledger material control account at the end of each day.
The accounting clerk assesses the work orders and set up a work-in-process account for a production batch. Throughout the production period, the clerk also receives move tickets, job tickets, and materials requisitions, which he uses to post to the work-in-process account. At the end of each day, the accounting clerk prepares a digital journal voucher and post it to the general ledger work-in- process and finished goods control accounts.
Identify the risks exist in the conversion cycle of Central Production Limited. (10 marks, maximum 300 words)
Answer: Provided in the explanation section
Explanation:
Conversion Cycle is the cycle which track records for the arrangement of crude material to completed products.
Here on the best possible perspective all in all of the procedure:
1. Triger by distribution center dept ( Raw material Keeper)
2. Produnction chief updates the request to be finished and include further up and coming requests assuming any.
3.It will produce online request slip and straightforwardly post to chiefs tab + bookkeeper tab
4. Manager take material and issue to gathering dept ( abundance material necessity is given by his position too)
5. Time + work both finished card sare sent to Accountanct
6. When request finished Accountant update the WIP just as Inventory in books.
Hazard in the Conversion Cycle:
After receipt of material and charging it to FG as Inventory in books
- Risk is hindering of assets in overabundance keeping of stock, As material level down after a specific level automatc trigger alternative is set up, which cautions the productin withdraw. to decide the future prerequisite according to the productin request in hands ( Good control set up)
Second, Online workorder to Supervisior, All chief gets their no. of creation request ( to be finished on the web) - Good control set up
Third, Supervisor on hand, place the material prerequisite ( and if any overabundance necessity - " NO FURTHER APPROVAL" is made to store representative. here hazard is medium over the demand well beyond the Order indicates by the creation dept.
Fourthly, creation representatives itself are getting ready thier work tickets ( " NO AUTHENTICATION")- As tickets are finished by creation representatives itself control of information info or its endorsement is inadequate.
Fifth, Accountant decides himeslef the WIP , FG of the request over the crude information got as employment card, time card, material order Risk is bookkeeper simply need to verifiy the information from the information got from the creation L2 official as opposed to himself keep up the quantities of the activity.
From above it is anything but difficult to catch the degree of hazard at different level in the above procedure of Central creation Limited.
At a lump-sum cost of $72000, Sunland Company recently purchased the following items for resale: Item No. of Items Purchased Resale Price Per Unit M 4600 $4.05 N 2300 12.60 O 6600 6.60 The appropriate cost per unit of inventory is: M N O $3.63 $11.28 $5.91 $3.20 $9.95 $5.21 $5.33 $5.33 $5.33 $4.05 $12.60 $6.60
Answer:
M = $3.20
N = $9.95
O = $5.21
I believe it is the second option.
Explanation:
Item No. of Items Purchased Resale Price Per Unit
M 4,600 $4.05
N 2,300 $12.60
O 6,600 $6.60
total resale price:
M = 4,600 x $4.05 = $18,630N = 2,300 x $12.60 = $28,980O = 6,600 x $6.60 = $43,560total = $91,170markup % = ($91,170 - $72,000) / $72,000 = 26.625%
purchase cost per unit:
M = $4.05 / ( 1 + 26.625%) = $3.20N = $12.60 / ( 1 + 26.625%) = $9.95O = $6.60 / ( 1 + 26.625%) = $5.21At December 31, Idaho Company had the following ending account balances:
Retained Earnings $250,000
Preferred Stock ($100 par, 7% cumulative, 10,000 authorized,
5,000 issued and outstanding) 500,000
Treasury Stock 40,000
Paid-In Capital in Excess of Par—Common Stock 625,000
Paid-In Capital in Excess of Par—Preferred Stock 50,000
Common Stock ($5 par value, 500,000 shares authorized,
105,000 issued) 525,000
Required:
Prepare the Stockholders' equity section of the balance sheet in good form with all of the required disclosures.
Answer:
Balance of Stockholder's Equity at December 31 is $1,910,000.
Explanation:
This will appear as follows
Idaho Company
Details $
Stockholder's Equity:
Common Stock 525,000
Preferred Stock 500,000
Additional Paid-In Cap. - Common Stock 625,000
Additional Paid-In Cap. - Preferred Stock 50,000
Treasury Stock (40,000 )
Retained Earnings 250,000
Balance at December 31 1,910,000
The stockholders' equity or the share capital of the company is the amount of capital that is the ownership of investors of shareholders of the company over the assets and debts of the company.
The equity shareholder's are the true owners of the company as they are legible for decision making and voting's.
The stockholders' equity section of the balance sheet includes: common shares, preferred shares, retained earnings, and treasury stock.
The stockholders' equity section of the balance sheet is prepared in the image attached below.
To know more about stockholders' equity, refer to the link:
https://brainly.com/question/13278063
Brian and Kim have a 12-year-old child, Stan. For 2019, Brian and Kim have taxable income of $52,000, and Stan has interest income of $4,500. Click here to access the income tax rate schedules. If Stan's parents elected to report Stan's income on his parents' return, what would the tax on Stan's income be?
Answer:
The answer is $393
Explanation:
Solution
In this case, we will find the tax on Stan's income which is stated below:
Stan's adjusted gross income = 4500
The standardized deduction = 1050
The unearned taxable income = 3450
With ordinary rate, the less statutory deduction is = 1050
The taxable income that is subject to his parent's rate = 2400
The tax with ordinary rate = (1050 * 10%) =105
The Tax with parent's rate is = (2400 * 12%) = 288
Hence,
The tax on Stan's income would be = 105 + 288 = $393
Note: Kindly find an attached copy of the Tax rate schedules as part of the question to this solution
The Work in Process Inventory account of a manufacturing company has a $7,728 debit balance. The company applies overhead using direct labor cost. The cost sheet of the only job still in process shows direct material cost of $2,800 and direct labor cost of $1,600. Therefore, the company's predetermined overhead rate is:
Answer:
The company's predetermined overhead rate is 208%
Explanation:
In order to calculate the company's predetermined overhead rate we would have to calculate first the Overhead applied as follows:
o verhead applied=Work in process balance-Direct Material-Direct Labor
o verhead applied=$7,728-$2,800-$1,600
o verhead applied=$3,328
Therefore, Overhead application rate = $3,328/$1,600= 217%
Overhead application rate =208%
The company's predetermined overhead rate is 208%
Answer:
208%
Explanation:
Work In Progress= Direct materials + Direct labor+ Over Head
$7,728 = $2,800 + $1,600 + OH
$7,728=$4,400
$7,728-$4,400
OH=$3,328
OH rate = $3,328/$1,600
= 208%
Insurance companies facilitate the transfer of risk from Multiple Choice those who have a low-risk tolerance to those with high risk-tolerance. insurance policyholders to the government. those who have a high-risk tolerance to those with low risk-tolerance. the insurance companies' owners to the insurance policyholders.
Answer:
Those who have a low-risk tolerance to those with high risk-tolerance.
Explanation:
In Insurance, risk tolerance refers to the willingness of an individual or organization to take a risk in business transactions in order to get a potentially positive reward.
Simply stated, risk tolerance in insurance is the willingness of an insured individual to increase his or her Self-Insured Retentions (SIRs) or deductibles by the insurer. For instance, the high risk associated with investments such as stocks, high-yield bonds, is often perceived by investors to be worth the higher reward such investment brings.
Insurance companies facilitate the transfer of risk from those who have a low-risk tolerance to those with high risk-tolerance. The transfer of risk in insurance refers to the process whereby an individual or entity pay premiums to an insurer for the purpose of mitigating potential losses or liabilities.
Generally, insurance companies across the globe charge millions of their customers (insured) premiums every year. This gives them the privilege of having a pool of cash which can be used to cover the cost of losses and destruction to the asset of a small fraction or percentage of its customers.
This simply means that, since insurance companies collect premium from all of their customers for losses which may or may not occur, so they can easily use this cash to compensate or indemnify for losses incurred by those having high risk.
Richard Palm is the accounting clerk of Olive Limited. He uses the source documents such as purchase orders, sales invoices and suppliers’ invoices to prepare journal vouchers for general ledger entries. Each day he posts the journal vouchers to the general ledger and the related subsidiary ledgers. At the end of each month, he reconciles the subsidiary accounts to their control accounts in the general ledger to ensure they balance. Discuss the internal control weaknesses and risks associated with the above process.
Answer:
The possible monitoring vulnerability in this case will be as follows:
• No division of service
• Too much dependence on the individual
• credibility and location of information, if any, are questionable
• The measurement errors are high
Throughout such a situation, the programme would be configured to include end-users as well as GL offices with a comprehensive checklist of journal coupons and accounts operation records throughout order to prepare for the possible harm.
Firm B, a calendar year, cash basis taxpayer, leases lawn and garden equipment. During December, it received the following cash payments. To what extent does each payment represent current taxable income to Firm B?
a. $522 repayment of a loan from an employee. Firm B loaned $500 to the employee six months ago, and the employee repaid the loan with interest.
b. $600 deposit from a customer who rented mechanical equipment. Firm B must return the entire deposit when the customer returns the undamaged equipment.
c. $10,000 short-term loan from a local bank. Firm B gave the bank a written note to repay the loan in one year at 9 percent interest.
d. $888 prepaid rent from the customer described in part b. The rent is $12 per day for the 74-day period from December 17 through February 28.
Answer:
a. $522 repayment of a loan from an employee. Firm B loaned $500 to the employee six months ago, and the employee repaid the loan with interest.
Firm B should recognize $22 as interest income.b. $600 deposit from a customer who rented mechanical equipment. Firm B must return the entire deposit when the customer returns the undamaged equipment.
The deposit cannot be recognized as income since it is a liability.c. $10,000 short-term loan from a local bank. Firm B gave the bank a written note to repay the loan in one year at 9 percent interest.
Interests ($900) will be recognized when they are actually paid for in 1 year. No accrued interests must be reported on the balance sheet (December 31).d. $888 prepaid rent from the customer described in part b. The rent is $12 per day for the 74-day period from December 17 through February 28.
The $888 will be recognized as revenue during the current year.Explanation:
When a taxpayer is a cash basis taxpayer, it will only report income and expenses that are actually collected or paid for respectively. All accounts receivable or accounts payable are not considered revenues nor expenses.
Trendz Inc. is a leading brand of fashion clothing and accessories based in Houston. After gaining a strong foothold in the U.S., the company wants to foray into foreign markets. The management at Trends knows that people residing in other countries are likely to have different tastes and preferences, so they may have to redesign some of their offerings. Which of the following strategies is Trendz using?
A) market-penetration strategy
B) outsourcing strategy
C) geographic-expansion strategy
D) product differentiation strategy
E) ethnocentric strategy
Answer:
The correct answer is the option D: product differentiation strategy.
Explanation:
To begin with, the fact that the company knows and understand that in other countries the people may have other needs and preferences is helpful because in that way they are able to investigate and start the creation and production of a good that adjusts to the preferences of that other country and by doing that the company leaves behind the concept of standarization and focus on the differentiation of its product by making it unique in every country they are in.
Henry Corporation bases its predetermined overhead rate on the estimated machine-hours for the upcoming year. At the beginning of the most recently completed year, the company estimated the machine-hours for the upcoming year at 20,000 machine-hours. The estimated variable manufacturing overhead was $9 per machine-hour and the estimated total fixed manufacturing overhead was $600,000. The predetermined overhead rate for the recently completed year was closest to:__________
Answer:
Estimated manufacturing overhead rate= $39 per machine hour
Explanation:
Giving the following information:
Estimated machine-hours= 20,000
The estimated variable manufacturing overhead was $9 per machine-hour.
The estimated total fixed manufacturing overhead was $600,000.
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
Estimated manufacturing overhead rate= (600,000/20,000) + 9
Estimated manufacturing overhead rate= $39 per machine hour
Martin wants to provide money in his will for an annual bequest to whichever of his living relatives is oldest. That bequest will provide $ 9 comma 000 in the first year, and will grow by 7 % per year, forever. If the interest rate is 10 %, how much must Martin provide to fund this bequest?
Answer:
$300,00
Explanation:
In a situation where the interest rate is said to be 10% the amount that Martin must provide in order to fund this bequest will therefore be:
Bequest first year $9,000/(Interest rate 10%-
Increase of 7 % per year)
Hence:
$9,000/0.03
=$300,000
Therefore $300,00 will be provided to fund the bequest
During the year, the following selected transactions affecting stockholders' equity occurred for Navajo Corporation: a. Feb. 1 Repurchased 230 shares of the company's own common stock at $27 cash per share. b. Jul. 15 Sold 130 of the shares purchased on February 1 for $28 cash per share. c. Sept. 1 Sold 100 of the shares purchased on February 1 for $26 cash per share. Required: 1. Prepare the journal entry required for each of the above transactions. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)
Answer:
a. Feb. 1
Treasury Shares $6,210 (debit)
Cash $6,210 (credit)
b. Jul. 15
Cash $3,600 (debit)
Common Shares $3,600 (credit)
c. Sept. 1
Cash $2,600 (debit)
Common Shares $2,600 (credit)
Explanation:
The purchase of company own shares is known as Treasury Shares.This decreases the equity element (Treasury Shares) and decreases the Assets of Cash.
Issue of Company own shares increases the Equity element (Common Shares) and decreases the Assets of Cash.
Laser World reports net income of $620,000. Depreciation expense is $47,000, accounts receivable increases $11,000, and accounts payable decreases $27,000. Calculate net cash flows from operating activities using the indirect method. (List cash outflows and any decrease in cash as negative amounts.)
Answer:
$629,000
Explanation:
The net cash flow from operating activities is the net income plus depreciation, minus the increase in accounts receivable as well as the decrease in accounts payable.
Net income is $620,000
depreciaton expense $47,000
Increase in accounts receivable ($11,000)
decrease in accounts payable ($27,000)
Net cash flow from operations $629,000
The increase in accounts receivable denies the business of additional cash,hence it is deducted ,the same applies to increase in accounts payable
B is known in the trade as a trader and merchant of soybeans. A entrusts a load of soybeans to B for storage in B's warehouse. Secretly, B delivers the goods to an ocean carrier in return for a bill of lading. B then sells the document covering a shipment of soybeans to C, who has purchased soybeans from B in the past. C pays for the document through its bank. B absconds with the money. In this case:________.
A) B is guilty of a crime under the Uniform Commercial Code.B) C is probably not a good faith purchaser.C) C takes paramount title.D) B and the carrier are liable for a conspiracy to commit fraud.
Answer:
C
Explanation:
The Paramount title is a title that is better or stronger than another. The Paramount title is a title that is bigger than any other claim of title. If C takes Paramount title, in property law this means that the original title or ownership is superior or stronger than the one with which it is compared to.
Before you begin to compose a message, you should conduct research to collect the necessary information. To avoid frustration and inaccurate messages, be sure to consider the receiver's position.
Which questions should you ask yourself before determining what and how to research?
A) Can I access information electronically to speed up the research process?
B) Is it really important to be writing to this person, or should I call him or her?
C) What strategies should I use when looking up information in the library database?
D) What does the receiver need to know about this topic?
Answer:
A) Can I access information electronically to speed up the research process?
C) What strategies should I use when looking up information in the library database?
D) What does the receiver need to know about this topic?
Explanation:
To determine what and how a research should be conducted, several factors ought to be considered. Some of the factors of consideration include these listed below.
Before setting out to to conduct a research, it is vital that the researcher understands the position of the receiver on the subject matter. This implies having an accurate understanding of what the receiver already knows about the subject matter. This would inform what further information needs to be added during the research. It is also important to have a good strategy for getting information in the library database as literary sources are segmented in libraries. Therefore, it would be unwise to obtain information randomly. Electronic platforms like the internet are also a good source of information which would be helpful if incorporated in the research process.At the time a $450 petty cash fund is being replenished, the company's accountant finds vouchers totaling $350 and petty cash of $100. The vouchers include: postage, $90; business lunches, $135; delivery fees, $80; and office supplies, $45. Which of the following is not recorded when recognizing expenditures from the petty cash fund?a. Debit petty cash, $350b. Debit supplies, $45c. Debit postage expense, $90d. Credit petty cash, $350
Answer:
The entry that should not be recorded is debit petty cash, $300 . Option A.
Explanation:
Vouchers recorded for expenses:
Postage
Business lunches
Delivery fees
Office supplies
The journal entry when recognizing expenditures from the petty cash fund should be as under:
Accounts : Credit Debit
Postage $ 90
Business lunches $ 135
Delivery fees $ 80
Office supplies $ 45
Petty Cash $350
The entry that should not be recorded is debit petty cash, $300
In contrast to a differentiator, a cost-leader will:
a. focus its research and development on process technologies to improve efficiency.
b. charge a premium price for its products and services.
c. avoid an organizational structure that relies on strict budget controls.
d. build an organizational culture where creativity and customer responsiveness thrive.
Answer: a. focus its research and development on process technologies to improve efficiency.
Explanation:
A Cost Leadership strategy entails reducing the costs associated with production to the point that you are the most efficient producer in the industry. By reducing cost, the company is able to see higher profitability margins and could be able to lower sales prices thereby capturing greater market share.
The Cost Leader will therefore focus on coming up with ways with which it can keep costs at a minimum because it is important to their mode of operations.
A Differentiator on the other hand aims to increase market share by creating a product that people will see as different and will buy due to the added value. They will focus more on supporting creativity to make better products as well as customer responsiveness to see what it is that the customers like so that they can offer it.
