Bogart Company is considering two alternatives. Alternative A will have revenues of $160,000 and costs of $100,000. Alternative B will have revenues of $180,000 and costs of $125,000. Compare Alternative A to Alternative B showing incremental revenues, costs, and net income. What is the net income increase or decrease if you chose Alternative B instead of Alternative A

Answers

Answer 1

Answer and Explanation:

The computation of the increase or decrease in the net income when Alternative B should be selected rather Alternative A is given below:

Particulars                Alternative A            Alternative B

Revenue                   $160,000                 $180,000

Less cost                 -$100,000                 $125,000

Net income                 $60,000                $55,000

If we choose alternative B so there would be decrease in the net income by $5,000


Related Questions

Borner Communications’ articles of incorporation authorized the issuance of 165 million common shares. The transactions described below effected changes in Borner’s outstanding shares. Prior to the transactions, Borner’s shareholders’ equity included the following:

Shareholders’ Equity ($ in millions)
Common stock, 150 million shares at $1 par $150
Paid-in capital – excess of par 450
Retained earnings 260

Required:
Assuming that Borner Communications retires shares it reacquires (restores their status to that of authorized but unissued shares). Record the appropriate journal entry for each of the following transactions:

On January 7, 2021, Borner reacquired 2 million shares at $6.50 per share.
On August 23, 2021, Borner reacquired 4 million shares at $3.00 per share.
On July 25, 2022, Borner sold 3 million common shares at $8 per share.

Answers

Answer:

1. January 07,2021

Dr Common stock $2 million

Dr Paid-in capital—excess of par

Dr Retained earnings $5 million

Cr Cash $13 million

2. August 23,2021

Dr Common stock $4million

Cr Paid-in capital—excess of par $12million

Dr Paid-in capital—share repurchase$4million

Cr Cash $12million

3. July 25, 2022

Dr Cash $24 million

Cr Common stock $3million

Cr Paid-in capital—excess of par $21 million

Explanation:

Preparation of the appropriate journal entry for each of the transaction

1. January 07,2021

Dr Common stock $2 million

(2 million shares *$1)

Dr Paid-in capital—excess of par

[2 million shares *($450/150 million shares)] $6 million

Dr Retained earnings $5 million

($13 million-$2 million-$6million)

Cr Cash $13 million

(2 million shares *$6.50 per share)

(To record 2 million shares reacquired at $6.50 per share)

2. August 23,2021

Dr Common stock $4million

(4 million shares *$1)

Cr Paid-in capital—excess of par $12million

[4 million shares *($450/150 million shares)

Dr Paid-in capital—share repurchase$4million

[($12million+$4million)-$12million)

Cr Cash $12million

(4 million shares * $3.00 per share)

(To record 4 million shares reacquired at $3.00 per share)

3. July 25, 2022

Dr Cash $24 million

(3 million common shares *$8 per share)

Cr Common stock $3million

(3 million shares *$1)

Cr Paid-in capital—excess of par $21 million

( $24 million-$3million)

(To record 3 million shares reacquired at $8.00 per share)

Fordman Company has a product that passes through two processes: Grinding and Polishing. During December, the Grinding Department transferred 20,000 units to the Polishing Department. The cost of the units transferred into the second department was $40,000. Direct materials are added uniformly in the second process. Units are measured the same way in both departments.

The second department (Polishing) had the following physical flow schedule for December:

Units to account for:
Units, beginning work in process 4,000 (40% complete)
Units started ?
Total units to account for ?
Units accounted for:
Units, ending work in process 8,000 (50% complete)
Units completed ?
Units accounted for ?

Costs in beginning work in process for the Polishing Department were direct materials, $5,000; conversion costs, $6,000; and transferred in, $8,000. Costs added during the month: direct materials, $32,000; conversion costs, $50,000; and transferred in, $40,000.

Required:
Assuming the use of the weighted average method, prepare a schedule of equivalent units. Enter percentages as whole numbers.

Answers

Answer:

Fordman Company

A Schedule of Equivalent Units (Weighted-Average Method)

Equivalent units of production:

                                 Units     Direct Materials     Conversion

Units completed      16,000        16,000                  16,000

Ending WIP               8,000          4,000                    4,000

Total equivalent units               20,000                  20,000

Explanation:

a) Data and Calculations:

Units transferred from Grinding Department = 20,000

Cost of units transferred = $40,000

Polishing Department's

Physical Flow Schedule for December:

Units to account for:

Units, beginning work in process 4,000 (40% complete)

Units started                                20,000

Total units to account for            24,000

Units accounted for:

Units, ending work in process 8,000 (50% complete)

Units completed                      16,000 (100% complete)

Units accounted for                24,000

Cost of production:

                                                Direct     Conversion   Transferred    Total

                                             Materials                                In

Beginning work in process   $5,000       $6,000         $8,000      $19,000

Current period                       32,000       50,000         40,000      122,000

Total costs of production    $37,000     $56,000      $48,000     $141,000

Equivalent units of production:

                                 Units     Direct Materials     Conversion

Units completed      16,000        16,000                  16,000

Ending WIP               8,000          4,000                    4,000

Total equivalent units               20,000                  20,000

Cost per equivalent units:

                                         Direct Materials     Conversion     Total

                                         & Transferred In

Total costs of production    $85,000                $56,000

Total equivalent units            20,000                  20,000

Cost per equivalent units       $4.25                    $2.80

On January 1, Year 1, the Charleston Company (Charleston) issues bonds with a face value of $100,000 and a stated annual cash interest rate of 6% for $86,410 in cash to yield an assumed effective interest rate of 8%. Interest is paid every June 30th and December 31st, and the effective-rate method is being applied. What amount of interest expense should Charleston report for the year ending December 31, Year 2

Answers

Answer:

$7,007

Explanation:

Amount of payment = $100,000 * 3%

Amount of payment = $3,000

Interest expenses = Carrying amount * 4%

Amortization of discount = Amount of payment - Interest expenses

Carrying value = Previous carrying value + Current Amortization of discount

   Year          Amount of       Interest     Amortization     Carrying  

                     payment        Expenses     of discount        value

Jan 1, Y1                                                                                $86,410

Jun 30, Y1     $3,000            $3,456            $456              $86,866

Dec 31, Y1     $3,000            $3,475             $475              $87,341

Jun 30, Y2    $3,000            $3,494            $494               $87,835

Dec 31, Y2     $3,000            $3,513             $513               $88,348

Interest expense for December 31, Year 2 = $3,494 + $3,513 = $7,007. So, $7,007 is the amount of interest expense should Charleston report for the year ending December 31, Year 2.

Looking through pages to find information that you have already identified is know as:
A) scanning
B) skimming
C) integration
D)previewing

Answers

A.

because as you're passing the page you are scanning it and looking for the answer

Answer: scanning

Explanation: i said so

1. Which of the following words is generally used to describe what managers do as opposed to what leaders do?
O A. Organize
O B. Inspire
O C. Innovate
O D. Influence

Answers

Influence is the answer

. It is important to conserve fossil fuels because

Answers

Answer:

Non-renewable resources (energy).

Explanation:

Renewable energy is also known as clean energy and it can be defined as a type of energy that are generated through natural sources or technology-based processes that are replenished constantly. Some examples of these natural sources are water (hydropower), wind (wind energy), sun (solar power), geothermal, biomass, waves etc.

Basically, a renewable energy source is sustainable and as such can not be exhausted.

On the other hand, a non-renewable energy refers to an energy source such as fossil fuels that takes a very long time to be created or their creation happened long ago and isn't likely to happen again e.g uranium. Fossil fuels, such as coal, oil, and natural gas, come from deep inside the Earth where they formed over millions of years ago.

Hence, it is very important to conserve fossil fuels because they are non-renewable resources (energy), unstainable and can be exhausted.

You are looking to purchase a Tesla Model X sport utility vehicle. The price of the vehicle is $94,000. You negotiate a six-year loan, with no money down and no monthly payments during the first year. After the first year, you will pay $1,350 per month for the following five years, with a balloon payment at the end to cover the remaining principal on the loan. The APR on the loan with monthly compounding is 3.2 percent. What will be the amount of the balloon payment six years from now

Answers

Answer:

Purchase of Tesla Model X Sport Utility Vehicle

The amount of the balloon payment six years from now is:

= $39,322.67.

Explanation:

a) Data and Calculations:

Cost of vehicle = $94,000

Period of loan = 6 years

Terms: No down payment and no monthly payments during the first year.

Monthly payment after the first year = $1,350

Total payments to be made = $104,122.67

The total payments including interest from an online financial calculator:

Payoff: 6 years 5.13 months

You will need to pay $1,350.00 every month for 6 years 5.13 months to payoff the debt.

Monthly Payment $1,350.00

Time Required to Clear Debt 6.43 years

Total of 77.13 Payments $104,122.67

Total Interest $10,122.67

Total monthly payments from second year to fifth year = $64,800 ($1,350 * 48)

Expected balloon payment to cover the remaining principal = $39,322.67 ($1014,122.67 - $64,800)

Demand is the relationship between what consumers __ and __ to buy at various prices.

Answers

Answer:

willing and able

Explanation:

The demand for a product is the relationship between what consumers are willing and able to buy at the various prices. It is important to note that the ability to pay for the product or service is a key element of the demand definition. According to the law of the demand, the quantity of the product demanded will decrease as the price goes up and vice versa.

The income statement, balance sheets, and additional information for Virtual Gaming Systems are provided. $2,510,000 2,500 2,512,500 VIRTUAL GAMING SYSTEMS Income Statement For the Year Ended December 31, 2021 Net sales Gain on sale of land Total revenues Expenses: Cost of goods sold $1,605,000 Operating expenses 606,000 Depreciation expense 24,000 Interest expense 25,000 Income tax expense 71,000 Total expenses Net income 2.331,000 $ 181,500 VIRTUAL GAMING SYSTEMS Balance Sheets December 31 2021 2020 $ 211,140 73,900 146,500 4,060 $ 154,980 89,000 136,000 6,220 Assets Current assets Cash Accounts receivable Inventory Prepaid rent Long-term assets Investments Land Equipment Accumulated depreciation Total assets Liabilities and Stockholders' Equity Current liabilities Accounts payable Interest payable Income tax payable Long-term Habilities Notes payable Stockholders' equity Common stock Retained earnings Total abilities and stockholders' equity 196.000 210,500 232,000 (229,500) $944,600 110,000 261,000 211,000 (205,500 $ 862,600 30,500 1,200 21,400 $ 89,000 3,100 24,500 226,000 247,000 361,000 280.500 310,000 210.000 $862.600 Additional Information for 2021: 1. Purchase additional investment in stocks for $86,000 2. Sell land costing $50,500 for $53,000, resulting in a $2,500 gain on sale of land. 3. Purchase $21,000 in equipment by issuing a $21.000 long-term note payable to the seller. No cash is exchanged in the transaction 4. Declare and pay a cash dividend of 5111,000. 5. Issue common stock for $51.000.
Required: Prepare the statement of cash flows for Virtual Gaming Systems using the direct method.

Answers

Answer:

Net Increase in cash = $56,160

Explanation:

Note: The data in this question are merged together, but see the attached pdf file for how the full question actually appear.

Note: See the attached excel file for the statement of cash flows for Virtual Gaming Systems using the direct method.

From the attached excel file, we have:

Net cash from operating activities = $149,160

Net cash from investing activities = -$33,000

Net cash from financing activities = -$60,000

Net Increase in cash = $149,160 - $33,000 - $60,000 = $56,160

Matching Exercise: Match the type of bond to its definition. Matching Exercise: Match the type of bond to its definition. a) The Catastrophe Bond: (Click to select) b) A Warrant Bond: (Click to select) c) An Income bond: (Click to select) d) A Convertible bond: (Click to select) e) A Put bond: (Click to select)

Answers

Answer:

The Catastrophe Bond: covers hurricanes and earthquakes in the U.S.

b) A Warrant Bond: gives the buyer of a bond the right to purchase shares of stock in the company at a fixed price.

An Income bond: states that the bond's coupon payment depends on company income.

c)

Put Bond : allows the holder to force the issuer to buy back the bond at a stated price.

Convertible bond : can be swapped for a fixed number of shares of stock anytime before maturity at the holder's option. .  

Explanation:

A catastrophe bond debt instrument usually used by insurance companies. They are usually high yield.  The issuer of this type of bond receives money only if specified conditions occur e.g. flood

Rearden Metal has earnings per share of $2. It has 10 million shares outstanding and is trading at $20 per share. Rearden Metal is thinking of buying Associated Steel, which has earnings per share of $1.25, 4 million shares outstanding, and a price per share of $15. Rearden Metal will pay for Associated Steel by issuing new shares. There are no expected synergies from the transaction. If Rearden offers an exchange ratio such that, at current pre-announcement share prices for both firms, the offer represents a 20% premium to buy Associated Steel, then the price per share of the Rearden immediately after the announcement will be closest to:

Answers

Answer: $19.12

Explanation:

The price per share of the Rearden immediately after the announcement will be calculated as the addition of the current prices for the companies divided by the total number of shares after merger. This will be:

= (20 × 10) + (15 × 4) / (10 + 3.6)

= (200 + 60) / 13.6

= 260 / 13.6

= 19.12

The price per share is $19.12

The common stock of the P.U.T.T. Corporation has been trading in a narrow price range for the past month, and you are convinced it is going to break far out of that range in the next three months. You do not know whether it will go up or down, however. The current price of the stock is $100 per share, and the price of a 3-month call option at an exercise price of $100 is $10.

Required:
a. If the risk-free interest rate is 5% per year, what must be the price of a 3-month put option on P.U.T.T. stock at an exercise price of $140?
b. What would be a simple options strategy to exploit your conviction about the stock price?

Answers

Answer:

A. $7.65

B. $ 17.65

$ 18.07

Explanation:

A. Calculation to determine the price of a 3-month put option on P.U.T.T. stock at an exercise price of $100

Using this formula

P = C-S+[X/(1+r)T]

Let plug in the formula

P = 10-100+[100/(1+0.10)1/4]

P = 10-100+[100/(1.10)1/4]

P = 10-100+[100/1.0241]

P = 10-100+97.65

P = 10-2.35

P = $7.65

Therefore the price of a 3-month put option on P.U.T.T. stock at an exercise price of $100 will be $7.65

B. Calculation for the Stock price future movements

Total cost of straddle option = $10+$ 7.65

Total cost of straddle option= $ 17.65

Therefore Stock price future movements is $ 17.65

Calculation to determine the profit on your initial investment

Profit=$ 17.65*(1.10)^1/4

Profit=$ 17.65*1.0241

Profit= $ 18.07

Therefore the profit on your initial investment will be $ 18.07

Johnny Cake Ltd. has 30 million shares of stock outstanding selling at $40 per share and an issue of $40 million in 8 percent, annual coupon bonds with a maturity of 13 years, selling at 96.5 percent of par ($1,000). If Johnny Cake's weighted average tax rate is 33 percent, its next dividend is expected to be $4.00 per share, and all future dividends are expected to grow at 7 percent per year, indefinitely, what is its WACC

Answers

Answer:

WACC = 0.16637 OR 16.637%

Explanation:

WACC or weighted average cost of capital is the cost of a firm's capital structure which can comprise of debt, preferred stock and common equity. The WACC for a firm with only debt and common equity can be calculated as follows,

WACC = wD * rD * (1-tax rate)  +  wE * rE

Where,

w represents the weight of each component based on market value in the capital structurer represents the cost of each componentD and E represents debt and equity respectively

To calculate WACC, we first need to calculate the Market value an cost of equity.

The market value of equity = 30 million shares * $40 per share

MV of equity = $1200 million

The cost of equity can be found using the formula for Price today (P0) under constant growth model of DDM.

P0 = D1 / (r - g)

40 = 4 / (r - 0.07)

40 * (r - 0.07) = 4

40r - 2.8 = 4

40r = 4+2.8

r = 6.8 / 40

r = 0.17 or 17%

MV of debt = 40 million * 96.5%  => $38.6 million

Total MV of capital structure = 38.6 + 1200 = 1238.6 million

WACC = 38.6/1238.6  *  0.08  *  (1-0.33)  +  1200/1238.6  *  0.17

WACC = 0.16637 OR 16.637%

At the beginning of his current tax year, David invests $11,700 in original issue U.S. Treasury bonds with a $10,000 face value that mature in exactly 10 years. David receives $560 in interest ($280 every six months) from the Treasury bonds during the current year, and the yield to maturity on the bonds is 3.6 percent. (Round your intermediate calculations to the nearest whole dollar amount.)

Answers

Answer: $419.96

Explanation:

Question is:

How much interest income will he report this year if he elects to amortize the bond premium?

The interest for the first period will be:

= Bond price * yield * 6/12 months

= 11,700 * 3.6% * 0.5

= $211

Bond premium amortization:

= Interest received - Interest

= 280 - 211

= $69

Bond value in second half of year:

= Bond value - Bond premium amortization:

= 11,700 - 69

= $11,631

Interest for second period:

= 11,631 * 3.6% * 0.5

= $209.36

Total interest = 210.60 + 209.35

= $419.96

When you use the Redo command, you redo the action that was just completed.
a. True
b. False

Answers

When you use the Redo command, you redo the action that was just completed.

A. True

Department B had 3,000 units in Work in Process that were 25% completed at the beginning of the period at a cost of $12,500. 13,700 units of direct materials were added during the period at a cost of $28,700. 15,000 units were completed during the period, and 1,700 units were 95% completed at the end of the period. All materials are added at the beginning of the process. Direct labor was $32,450, and factory overhead was $18,710. The number of equivalent units of production for the period for materials if the first-in, first-out method is used to cost inventories was a.13,700

Answers

Answer:

Number of equivalent units= 13,700

Explanation:

All materials are added at the beginning of the process.

To calculate the equivalent units using the FIFO method, we need to use the following structure:

Beginning work in process = beginning inventory* %incompleted

Units started and completed = units completed - beginning WIP

Ending work in process completed= Ending WIP* %completed

=Number of equivalent units

Replacing:

Beginning work in process = 3,000*0%= 0

Units started and completed =  15,000 - 3,000= 12,000

Ending work in process completed= 1,700*100%= 1,700

Number of equivalent units= 13,700

Sage Company has been having difficulty obtaining key raw materials for its manufacturing process. The company therefore signed a long-term noncancelable purchase commitment with its largest supplier of this raw material on November 30, 2020, at an agreed price of $367,600. At December 31, 2020, the raw material had declined in price to $334,840. What entry would you make on December 31, 2020, to recognize these facts

Answers

Answer:

Dr Unrealized Holding $32,760

Cr Estimated Liabilities $32,760

Explanation:

Preparation of What entry would you make on December 31, 2020, to recognize these facts

Based on the information given the Joi entry you would make on December 31, 2020, to recognize these facts will be :

December 31, 2020

Dr Unrealized Holding $32,760

Cr Estimated Liabilities $32,760

($367,600-$334,840)

On December 31, Jarden Co.'s Allowance for Doubtful Accounts has an unadjusted credit balance of $14,000. Jarden prepares a schedule of its December 31 accounts receivable by age.

Accounts Receivable Age of Accounts Receivable Expected Percent Uncollectible
$840,000 Not yet due 1.25%
336,000 1 to 30 days past due 2.00
67,200 31 to 60 days past due 6.50
33,600 61 to 90 days past due 32.75
13,440 Over 90 days past due 68.00

Required:
Prepare the adjusting entry to record bad debts expense.

Answers

Answer:

Jarden Co

Adjusting Entry

December 31:

Debit Bad Debts Expense $27,731

Credit Allowance for Doubtful Accounts $27,731

To record bad debts expense.

Explanation:

a) Data and Calculations:

Allowance for Doubtful Accounts, unadjusted credit balance = $14,000

Accounts      Age of Accounts    Expected %     Uncollectible

Receivable       Receivable          Uncollectible      Allowance

$840,000    Not yet due                          1.25%   $10,500 ($840,000*1.25%)

336,000      1 to 30 days past due          2.00         6,720 ($336,000*2%)

67,200        31 to 60 days past due        6.50         4,368 ($67,200*6.5%)

33,600        61 to 90 days past due      32.75        11,004 ($33,600*32.75%)

13,440         Over 90 days past due      68.00         9,139 ($13,440*68%)

$1,290,240                                                             $41,731

T-account:

Allowance for Doubtful Accounts

Account Titles               Debit      Credit

Beginning balance                     $14,000

Bad Debts Expense                      27,731

Ending balance         $41,731

These are selected 2022 transactions for Pronghorn Corporation:

Jan. 1 Purchased a copyright for $117,000. The copyright has a useful life of 6 years and a remaining legal life of 30 years.
Mar. 1 Purchased a patent with an estimated useful life of 4 years and a legal life of 20 years for $60,000.
Sept. 1 Purchased a small company and recorded goodwill of $147,000. Its useful life is indefinite.

Required:
Prepare all adjusting entries at December 31 to record amortization required by the events.

Answers

Answer:

December 31, 2022, amortization expense of copyright

Dr Amortization expense 19,500

    Cr Copyright 19,500

December 31, 2022, amortization expense of patent

Dr Amortization expense 10,000

    Cr Patent 10,000

No journal entry required for the Goodwill since its useful life is indefinite

Mercury Inc. purchased equipment in 2019 at a cost of $169,000. The equipment was expected to produce 300,000 units over the next five years and have a residual value of $49,000. The equipment was sold for $103,800 part way through 2021. Actual production in each year was: 2019 = 42,000 units; 2020 = 67,000 units; 2021 = 34,000 units. Mercury uses units-of-production depreciation, and all depreciation has been recorded through the disposal date. Required: 1. Calculate the gain or loss on the sale. 2. Prepare the journal entry to record the sale. 3. Assuming that the equipment was instead sold for $114,800, calculate the gain or loss on the sale. 4. Prepare the journal entry to record the sale in requirement 3.

Answers

Answer:

Mercury Inc.

1. The loss on the sale of the equipment = $8,000.

2. Journal Entry to record the sale:

Debit Cash $103,000

Credit Sale of Equipment $103,000

To record the receipts from the sale.

Debit Sale of Equipment $111,800

Credit Equipment $111,800

To transfer the account to the Sale of Equipment.

Debit Accumulated Depreciation $57,200

Credit Sale of Equipment $57,200

To transfer the account to sale of equipment.

3. The gain on the sale is $3,000

4. Journal Entry to record the sale in requirement 3:

Debit Cash $114,800

Credit Sale of Equipment $114,800

To record the receipts from the sale.

Debit Sale of Equipment $111,800

Credit Equipment $111,800

To transfer the account to the Sale of Equipment.

Debit Accumulated Depreciation $57,200

Credit Sale of Equipment $57,200

To transfer the account to sale of equipment.

Explanation:

a) Data and Calculations:

Cost of equipment = $169,000

Expected production units = 300,000

Estimated useful life = 5 years

Estimated residual value = $49,000

Proceeds from the sale of equipment = $103,000

Depreciable amount = $120,000 ($169,000 - $49,000)

Depreciation expense per unit = $0.40 ($120,000/300,000)

Actual production:     Depreciation Expense for the year

2019 = 42,000 units * $0.40 = $16,800

2020 = 67,000 units * $0.40 = $26,800

2021 = 34,000 units * $0.40 = $13,600

Accumulated depreciation = $57,200

Net book value = $111,800 ($169,000 - $57,200)

Loss on sale of equipment = $8,800 ($111,800 - $103,000)

Sale of equipment for $114,800

Gain on sale of equipment = $3,000 ($111,800 - $114,800)

9. The difference between a C Corp and an S Corp is

A. only a C Corp has a board of directors.

B. all companies must start
C Corps and become S Corps.

C. the tax code that each uses is different.

D. the personal assets of a C Corp owner belong to the business.

Answers

Answer:

the tax code that each uses is different.

Answer:

c. the tax code that each uses is different

Explanation:

A fixed cost: Multiple Choice Is irrelevant for cost-volume-profit and short-term decision making. Changes with changes in the volume of activity within the relevant range. Does not change with changes in the volume of activity within the relevant range. Is directly traceable to a cost object. Requires the future outlay of cash and is relevant for future decision making.

Answers

Answer:

Does not change with changes in the volume of activity within the relevant range

Explanation:

The fixed cost is the cost that remains fixed whether the production level is increased or it should remain the fixed. The examples like depreciation expense, rent expense, etc

So it does not change when the volume of activity vary

Therefore the third option is correct

And, the rest of the options are incorrect

Blossom, Inc. began work in 2021 on a contract for $20720000. Other data are as follows: 2021 2022 Costs incurred to date $8880000 $13900000 Estimated costs to complete 5920000 0 Billings to date 6960000 20800000 Collections to date 4960000 17900000 If Blossom uses the percentage-of-completion method, the gross profit to be recognized in 2021 is $3552000. $4000000. $5560000. $5920000.

Answers

Answer:

the  gross profit using  the percentage-of-completion method is $3,552,000

Explanation:

The computation of the gross profit using  the percentage-of-completion method is given below

= Contract Value × given percentage - total cost incurred

= $20,720,000 × $8,880,000 ÷ ($8,880,000 + $5,920,000) - $8,880,000

= $12,432,000 - $8,880,000

= $3,552,000

hence, the  gross profit using  the percentage-of-completion method is $3,552,000

Demand for stereo headphones and MP3 players for joggers has caused Nina Industries to grow almost 50 percent over the past year. The number of joggers continues to expand, so Nina expects demand for headsets to also expand, because, as yet, no safety laws have been passed to prevent joggers from wearing them. Demand for the players for last year was as follows:

MONTH DEMAND (UNITS)
January 4,130
February 4,230
March 3,930
April 4,330
May 4,930
June 4,630
July 5,230
August 4,830
September 5,330
October 5,630
November 6,230
December 5,930

Required:
Using linear regression technique, what would you estimate demand to be for each month next year?

Answers

Answer:

First month of next month ( x = 13)   = 6170

second month ( x = 14 ) = 6389

Explanation:

Determine the estimate demand for each month next year ( use Linear regression )

Linear regression equation: y = a + bx

a = intercept between regression line and y-axis

b = slope of regression

x = month

y = demand

Using excel table attached below

∑x = 78

∑xy = 413340

∑y = 59360

∑(x)^2 = 650

N = 12

(∑x )^2 = 6084

next we will calculate the slope and intercept value

b ( slope ) = ( 12 * 413340 ) - ( 78 * 59360 ) / ( 12 * 650 - 6084 )

                = 330,000 / 1716 = 192.31

intercept ( a ) = 59360 - ( 192.31 * 78 ) / 12 = 3696.65

Back to equation 1 :

Linear regression equation = Y = 3696.65 + 192.31 x

where x = number of month ( i.e. 13 , 14 ….. 24 )

To determine the estimate demand for each month next month

Linear regression equation : Y = 3696.65 + 192.31 x

first month of next month ( x = 13)  = 3696.65 + 192.31 * ( 13 )

second month ( x = 14 ) = 3696.65 + 192.31 * ( 14 )

Note : apply same equation to every month ( i.e. from x = 15 to 24 ) to determine the estimate demand for each month

Lexigraphic Printing Company is considering replacing a machine that has been used in its factory for four years. Relevant data associated with the operations of the old machine and the new machine, neither of which has any estimated residual value, are as follows:
Old Machine
Cost of machine, 10-year life $89,000
Annual depreciation (straight-line) 8,900
Annual manufacturing costs, excluding depreciation 23,600
Annual nonmanufacturing operating expenses 6,100
Annual revenue 74,200
Current estimated selling price of machine 29,700
New Machine
Purchase price of machine, six-year life $119,700
Annual depreciation (straight-line) 19,950
Estimated annual manufacturing costs, excluding depreciation 6,900
Annual non-manufacturing operating expenses and revenue are not expected to be affected by purchase of the new machine.
Required:
1. Prepare a differential analysis as of April 30 comparing operations using the present machine (Alternative 1) with operations using the new machine (Alternative 2). The analysis should indicate the total differential income that would result over the six-year period if the new machine is acquired.
2. Choices of what other factors should be considered
A. Was the purchase price of the old machine too high?
B. What effect does the federal income tax have on the decision?
C. What opportunities are available for the use of the $90,000 of funds ($119,700 less $29,700 proceeds from the old machine) that are required to purchase the new machine?
D. Should management have purchased a different model of the old machine?
E. Are there any improvements in the quality of work turned out by the new machine?

Answers

Answer:

Lexigraphic Printing Company

1. Differential Analysis as of April 30:

                                                 Old Machine   New Machine    Difference

Annual revenue                              $74,200          $74,200

Annual depreciation (straight-line)    8,900             19,950  

Annual manufacturing

costs, excluding depreciation        23,600              6,900

Annual nonmanufacturing

operating expenses                         6,100                6,100

Total expenses                            $38,600           $32,950

Annual net income                      $35,600           $41,250         $5,650

Net income for 6 six years        $213,600        $247,500       $33,900

2. Other factors that should be considered are:

B. What effect does the federal income tax have on the decision?

C. What opportunities are available for the use of the $90,000 of funds ($119,700 less $29,700 proceeds from the old machine) that are required to purchase the new machine?

E. Are there any improvements in the quality of work turned out by the new machine?

Explanation:

a) Dat and Calculations:

Old Machine

Cost of machine, 10-year life $89,000

Annual depreciation (straight-line) 8,900

Annual manufacturing costs, excluding depreciation 23,600

Annual nonmanufacturing operating expenses 6,100

Annual revenue 74,200

Current estimated selling price of machine 29,700

New Machine

Purchase price of machine, six-year life $119,700

Annual depreciation (straight-line) 19,950

Estimated annual manufacturing costs, excluding depreciation 6,900

Annual nonmanufacturing operating expenses 6,100

Annual revenue 74,200

Differential Analysis as of April 30:

                                                 Old Machine   New Machine    Difference

Annual revenue                              $74,200          $74,200

Annual depreciation (straight-line)    8,900             19,950  

Annual manufacturing

costs, excluding depreciation        23,600              6,900

Annual nonmanufacturing

operating expenses                         6,100                6,100

Total expenses                            $38,600           $32,950

Annual net income                      $35,600           $41,250         $5,650

Net income for 6 six years        $213,600        $247,500       $33,900

Kenseth Corp. has the following beginning-of-the-year present values for its projected benefit obligation and market-related values for its pension plan assets.
Projected benefit obligation Plan Assets Value
2011 $2,000,000 $1,900,000
2012 2,400,000 2,500,000
2013 2,950,000 2,600,000
2014 3,600,000 3,000,000
The average remaining service life per employee in 2011 and 2012 is 10 years and in 2013 and 2014 is 12 years. The net gain or loss that occurred during each year is as follows: 2011, $280,000 loss; 2012, $90,000 loss; 2013, $11,000 loss; and 2014, $25,000 gain. (In working the solution, the gains and losses must be aggregated to arrive at year-end balances.)
Corridor and Minimum Loss Amortization
Year Projected Benefit Plan 10% Accumulated Minimum Amortization
Obligation (a) Assets Corridor OCI (G/L) (a) of Loss
2011 $2,000,000 $1,900,000 $200,000 $ 0 $0
2012 2,400,000 2,500,000 250,000 280,000 3,000(b)
2013 2,950,000 2,600,000 295,000 367,000(c) 6,000(d)
2014 3,600,000 3,000,000 360,000 372,000(e) 1,000(f)
Using the corridor approach, compute the amount of net gain or loss amortized and charged to pension expense in each of the four years, setting up an appropriate schedule.

Answers

Answer:

10%Corridor

2011 $0

2012 $250,000

2013 $295,000

2014 $360,000

Accumulated

2011 $0

2012 $280,000

2013 $367,000

2014 $372,000

Minimum Amortization of Loss

2011 $0

2012 $3,000

2013 $6,000

2014 $1,000

Explanation:

Calculation for the net gain or loss amortized and charged to pension expense under the corridor approach

Year, Projected Benefit Obligation (a) , Plan Assets, 10%Corridor, Accumulated d OCI (G/L) (a), Minimum Amortization of Loss

2011 $2,000,000 $1,900,000 $200,000 $ 0 $0

2012 $2,400,000 $2,500,000 $250,000 $280,000 $3,000(b)

2013 $2,950,000 $2,600,000 $295,000 $367,000(c) $6,000(d)

2014 $3,600,000 $3,000,000 $360,000 372,000(e) $1,000(f)

Calculation for 10%Corridor

2011 $0

2012 10%*$2,500,000 =$250,000

2013 10%*$2,950,000 =$295,000

2014 10%*$3,600,000 =$360,000

Calculation for Accumulated Depreciation and Minimum Amortization of Loss

a. As at the beginning of the year

b. ($280,000 – $250,000) ÷ 10 years = $3,000

c. $280,000 – $3,000 + $90,000 = $367,000

d. ($367,000 – $295,000) ÷ 12 years = $6,000

e. $367,000 – $6,000 + $11,000 = $372,000

f ($372,000 – $360,000) ÷ 12 years = $1,000

Therefore the net gain or loss amortized and charged to pension expense under the corridor approach are :

10%Corridor

2011 $0

2012 $250,000

2013 $295,000

2014 $360,000

Accumulated Depreciation

2011 $0

2012 $280,000

2013 $367,000

2014 $372,000

Minimum Amortization of Loss

2011 $0

2012 $3,000

2013 $6,000

2014 $1,000

Penny Stock is the chairperson of Pirate Recording Company Inc. She is the person responsible for the tremendous growth this company has enjoyed over the past three years. It was Penny's intuition and clever negotiating that enabled the company to sign two very hot recording artists: Half a Dollar and N'elli. These groups have generated profits of over $25 million. The future looks even brighter at the firm because several current and aspiring entertainers have indicated an interest in signing on with Pirate Recording. This incredible growth has delighted everyone at the company, but it has also created a major problem for Penny. Pirate Recording has never been a major player in the recording industry, primarily because of limited capital. In order to take the company to the next level Penny realizes that she will need to expand the firm's personnel and equipment. The amount of new funds required to finance this needed expansion is $150 million. Penny has started to consult with others about how to finance this major expansion of the company. If stock is issued in Pirate Recording, analysts predict that the company has potential for strong growth. The prospects for dividend payments to stockholders, at least in the beginning, are not good. Pirate Recording will need to retain its earnings in order to grow rapidly. The firm's stock would most likely be classified as a(n):

Answers

Answer:

Pirate Recording Company Inc.

The firm's stock would most likely be classified as a(n):

growth stock.

Explanation:

Since Pirate Recording Company's stock is expected to grow rapidly more than the market average, it is regarded as a growth stock.  Stockholders expect to make more capital gains by selling the stocks in the future than from collecting dividends.  As Pirate Recording is in an expansion mood, with new capital injections of $150 million, it will be retaining its earnings to pursue its growth potential, thus, further exciting potential stockholders.

Grouper Inc. wishes to accumulate $1,066,000 by December 31, 2030, to retire bonds outstanding. The company deposits $164,000 on December 31, 2020, which will earn interest at 8% compounded quarterly, to help in the retirement of this debt. In addition, the company wants to know how much should be deposited at the end of each quarter for 10 years to ensure that $1,066,000 is available at the end of 2030. (The quarterly deposits will also earn at a rate of 8%, compounded quarterly).

Answers

Answer:

Quarterly deposit= $11,653.28

Explanation:

First, we need to determine the future value of the lump sum investment. We need to use the following formula:

FV= PV*(1+i)^n

n= 10*4= 40 quarters

i= 0.08/4= 0.02

PV= $164,000

FV= 164,000*(1.02^40)

FV= $362,118.51

Now, the total difference to reach the $1,066,000:

Difference= 1,066,000 - 362,118.51= $703,881.49

To calculate the quarterly deposit, we need to use the following formula:

FV= {A*[(1+i)^n-1]}/i

A= quarterly deposit

Isolating A:

A= (FV*i)/{[(1+i)^n]-1}

A= (703,881.49*0.02) / [(1.02^40) - 1]

A= $11,653.28

The Work in Process Inventory account for DG Manufacturing follows. Compute the cost of jobs completed and transferred to Finished Goods Inventory.

Work in Process Inventory Beginning
WIP 6,000
Direct materials 48,600
Direct labor 31,100
Applied overhead 17,300
To finished goods
Ending WIP 31,100

The cost of jobs transferred to finished goods is: _________

Answers

Answer:

$71,900

Explanation:

Calculation to determine The cost of jobs transferred to finished goods

Work in Process Inventory Beginning

Add WIP 6,000

Add Direct materials 48,600

Add Direct labor 31,100

Add Applied overhead 17,300

Less Ending WIP 31,100

FINISHED GOODS $71,900

Therefore The cost of jobs transferred to finished goods is: $71,900

Navi-devices Inc., a manufacturer of portable navigation devices, provides free traffic updates and identifies the nearest parking spaces available with its latest device. It accomplishes this by using GPS coordinates of subscribers and traffic data from radio stations. Which of the following is the most likely impact of this strategy?

a. It will improve the company's operations management.
b It will improve their customer relationship management.
c. It will lower their total revenue.
d. It will provide the company with a competitive advantage.

Answers

Answer:

Navi-devices Inc.

The most likely impact of this strategy is:

d. It will provide the company with a competitive advantage.

Explanation:

The strategy of "providing free traffic updates and identifying the nearest parking spaces for its subscribers" will greatly benefit the company's customers.  These free services lower the cost for customers and provide an advantage for the company to reach out to more loyal subscribers for its portable navigation devices.  However, competitive advantages are not everlasting.  They can easily be copied by competitors.  This will level the advantage to zero.  This implies that Navi-devices must innovate to remain competitive.

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