Answer and Explanation:
The computation is shown below:
But before reaching any decision, first we have to find out the ROI for new investment which is
ROI of new investment = net operating income ÷ investment
= $12,950 ÷ $70,000
= 18.50%
Now
If investment taken place, then overall ROI is
= Total net operating income ÷ Total average operating assets
= ($380,000 + $12,950) ÷ ($2,000,000 + $70,000)
= 18.98%
As we can see that the overall ROI i.e 18.98% is less than the currently ROI i.e 20% so he should not recommend ROI as it is shows fallen
Barry is the branch manager of a large toy store. He has been given the responsibility to communicate with, coach, and motivate supervising managers. In this scenario, Barry most likely requires _____ to perform his role efficiently.
1. Human skills
2. Conceptual skills
3. Technical skills
4. Cognitive skills
Answer:
Human Skills
Explanation:
Bob's lawn-mowing service is a profit-maximizing, competitive firm. Bob mows lawns for $30 each. His total cost each day is $320, of which $70 is a fixed cost. He mows 10 lawns a day. In the short run, Bob should____________ . In the long run, Bob should__________ the industry.
Answer:
In the short run, as long as the contribution margin is positive he should continue in the industry. In the long run, if the company keeps losing money, he should leave the industry.
Explanation:
Giving the following information:
Bob mows lawns for $30 each. His total cost each day is $320, of which $70 is a fixed cost. He mows 10 lawns a day.
First, we need to calculate the unitary variable cost:
Total variable cost= 320 - 70= 250
Unitary varaible cost= 250/10= $25
Contribution margin= 30 - 25= $5
In the short run, as long as the contribution margin is positive he should continue in the industry. In the long run, if the company keeps losing money, he should leave the industry.
In preparing its bank reconciliation for the month of April 2020, Henke, Inc. has the following information available. Balance per bank statement, 4/30/20 $102,420 NSF check returned with 4/30/20 bank statement 1,350 Deposits in transit, 4/30/20 15,000 Outstanding checks, 4/30/20 15,600 Bank service charges for April 60 What should be the correct balance of cash at April 30, 2020
Answer:
$101,820
Explanation:
Bank reconciliation is a practice of reconciling the balance on the company;s cash book to the amount on the bank statement to discover any differences that might occur due to ant reason.
Henke Inc bank reconciliation statement for the month ended April 30 , 2020
Balance as per Bank statement 102,420
Add deposit in transit 15,000
117,420
Deduct outstanding check (15,600)
Adjusted cash balance 101,820
A jewelry firm buys semiprecious stones to make bracelets and rings. The supplier quotes a price of $8.20 per stone for quantities of 600 stones or more, $8.60 per stone for orders of 400 to 599 stones, and $9.10 per stone for lesser quantities. The jewelry firm operates 101 days per year. Usage rate is 19 stones per day, and ordering costs are $39. a. If carrying costs are $2 per year for each stone, find the order quantity that will minimize total annual cost. (Do not round intermediate calculations. Round your final answer to the nearest whole number.) Order quantity stones b. If annual carrying costs are 21 percent of unit cost, what is the optimal order size
Answer:
a. 274
b. 295
Explanation:
a. Optimum Order
Optimum Order = √( (2×Total Annual Demand×Ordering cost per order) / Holding Cost per unit)
= √ ((2×101×19×$39) / $2)
= 273.57
= 274
b. Optimum Order
Optimum Order = √( (2×Total Annual Demand×Ordering cost per order) / Holding Cost per unit)
= √ ((2×101×19×$39) / $8.20 ×0.21)
= 294.83
= 295
Listening skills are important for career success and organizational effectiveness. Considered one of the soft skills, listening skills allow you to improve the effectiveness of your communication with supervisors, colleagues, and customers. To become a more powerful listener, you can employ a variety of techniques. For example, if you're having trouble focusing on a message, you could_______________
Answer:
Identify the key facts in the message.
Explanation:
Listening skills are important for career success and organizational effectiveness. Considered one of the soft skills, listening skills allow you to improve the effectiveness of your communication with supervisors, colleagues, and customers. To become a more powerful listener, you can employ a variety of techniques.
For example, if you're having trouble focusing on a message, you could identify the key facts contained in that message.
Identifying the key facts implies, you will objectively pick the truths contained therein, as well as high and salient points of the message.
Raising Canes is a restaurant located primarily in the south and the owner is interested in expanding nationwide. Name and describe the various types of research suppliers and discuss which type could meet his need for finding the best locations in new markets.?
Answer:
- syndicate research service
- limited research service
- standardized research
- custom research
Explanation:
Note, Raising canes ones to expand nationwide, which of course is a monumental task.
- The syndicated research supplier using is already established standards for the research in exchange for a fee.
- Standardized research supplier is willing to meet the needs of clients by directing strategies best fitted to find suitable retail locations. It is the best type of research service to meet this client’s needs.
- Limited-service research are suppliers that are limited in their scope of operations such as data warehousing, or data processing.
Perhaps the most significant federal statute specifically addressing cyber crime is the:________.
a. Uniform Trade Secrets Act.
b. Anticybersquatting Espionage Act.
c. Computer Fraud and Abuse Act.
d. Berne Convention.
Answer:
c. Computer Fraud and Abuse Act.
Explanation:
Computer Fraud and Abuse Act (CFAA) is a cyber security bill that was enacted in 1986 and is an amendment of of Comprehensive Crime Control Act of 1984.
The acts forbids a person to access a computer without proper authorisation or an excess of required authority.
Before this time cybercrime was prosecuted as mail and wire fraud. This was often inadequate.
Other provisions the act addresses are distribution of malicious code, denial of service attacks, and trafficking in passwords
Analyze the events chronologically, one transaction at a time, beginning with the transaction on the 5th. For each transaction that follows the transaction on the 5th, calculate the balance in each account after analyzing its effect on the accounting equation. After calculating the ending balance of each account on the 30th,
calculate total assets and total liabilities and equity.(Complete only the necessary answer boxes for your transaction lines. [Do not enter any zeros for your transaction lines.] Carry down all balances to the "Bal." line, including zero balanceaccounts, entering a "0" for any zero balances. Enter a decrease in an account with a minus sign or parentheses. Abbreviationsused: A/P = Accounts Payable; A/R = Accounts Receivable; Com.= Common; Contr. = Contributed; Div. = Dividends; Exp. = Expense; Furn. = Furniture; Liab = Liabilities; Rev. = Revenue; Sup. = Supplies; Util. = Utilities.)
QUESTION COMPLETION:
TRANSACTIONS:
April 5 Shaff deposited $40,000 in a new business bank account titled Apr. Abraham Shaff, CPA. The business issued common stock to Shaff.
April 6 Paid $200 cash for letterhead stationery for new office
April 7 Purchased office furniture for the office on account, $8,000.
April 10 Consulted with tax client and received $2,900 for services rendered. 11 Paid utilities, $280.
April 12 Finished tax hearings on behalf of a client and submitted a bill for accounting services, $8,000.
April 18 Paid office rent, $1,700.
April 25 Received amount due from client that was billed on April 12
April 27 Paid full amount of accounts payable created on April 7
April 30 Cash dividends of $2,500 were paid to stockholders.
Answer:
See attached.
Explanation:
The question requires business events to be analyzed chronologically with each event's impact on the accounting equation.
The accounting equation states that Assets equal Liabilities plus Equity (Assets = Liabilities + Equity). The implication of this equation is that given each business transaction, Assets will always be equal to Liabilities and Equity. Two accounts or more are usually affected by each transaction. It may be two assets accounts or one asset and liabilities, etc. Expenses and Income impact the Retained Earnings, which is part of the Equity.
Assets are the resources owned by the business, while liabilities are financial obligations to third parties that contribute to the owned resources. Equity is the funds contributed by the stockholders, including the earnings retained from business. Equity, therefore, represents the ownership interest in the assets after liabilities have been deducted.
Tiptop Flight School offers flying lessons at a small municipal airport. The school's owner and the manager have been attempting to evaluate performance and control costs using a variance report that compares the planning budget to actual results. A recent variance report appears below:
Tiptop Flight School
Variance Report
For the Month Ended July 31
Actual Results Planning Budget Variances
Lessons 155 150
Revenue $33,900 $33,000 $900 F
Expenses:
Instructor wages 9,870 9,750 120 U
Aircraft depreciation 5,890 5,700 190 U
Fuel 2,750 2,250 500 U
Maintenance 2,450 2,330 120 U
Ground facility expenses 1,540 1,550 (10) F
Administration 3,320 3,390 (70) F
Total expense 25,820 24,970 850 U
Net operating income $8,080 $8,030 $50 F
After several months of using such variance reports, the owner has become frustrated. For example. she is quite confident that instructor wages were very tightly controlled in July. but the report shows an unfavorable variance. The planning budget was developed using the following formulas, where q is the number of lessons sold:
Cost Formulas
Revenue $220 q
Instructor wages $65 q
Aircraft depreciation $38 q
Fuel $15 q
Maintenance $530 + $12 q
Ground facility expenses $1,250 + $2 q
Administration $3,240 + $1 q
Required:
1. Should the owner feel frustrated with the variance reports? Explain.
2. Prepare a flexible budget performance report for the school for July.
3. Evaluate the school's performance for July.
Answer:
1. Should the owner feel frustrated with the variance reports?
Yes, because they were incomplete. Since the quantity of lessons is larger than the budgeted, you must prepare a flexible budget. The flexible budget shows that there exists a total unfavorable variance of $385. E.g. , regarding the pilots' salaries, there is a favorable variance in the flexible budget.
2. Prepare a flexible budget performance report for the school for July.
I used an excel spreadsheet to prepare a flexible budget and I attached it.
3. Evaluate the school's performance for July.
The school's performance is neither good or bad because it has higher revenues than estimated (even though it lowered its sales price), but their costs are also higher than budgeted. They are doing a good job at selling their lessons, but a bad job of keeping costs under control. The overall variance is not that significant, but it is still unfavorable. Their fuel expenses should be controlled since the largest unfavorable variance results from spending too much fuel.
Explanation:
Actual Planning Variances
Results Budget
Lessons 155 150 5 F
Revenue $33,900 $33,000 $900 F
Expenses:
Instructor wages $9,870 $9,750 $120 U Aircraft depreciation $5,890 $5,700 $190 U Fuel $2,750 $2,250 $500 U Maintenance $2,450 $2,330 $120 U Ground facility expenses $1,540 $1,550 ($10) F Administration $3,320 $3,390 ($70) F Total expense $25,820 $24,970 $850 UNet operating income $8,080 $8,030 $50 F
1. The school proprietor should not feel frustrated with the variance reports as they are meant to provide guidance and not a feeder for frustration. A careful review of the variance reports will help the owner to understand the cost dynamics for improvements.
2. The flexible budget performance report for the school in the month of July is as follows:
Tiptop Flight School
Flexible Budget Performance Report
For the Month Ended July 31
Actual Results Flexible Budget Variances
Lessons 155 155
Revenue $33,900 $34,100 $200 U
Expenses:
Instructor wages 9,870 10,075 205 F
Aircraft depreciation 5,890 5,890 0 None
Fuel 2,750 2,325 (425) U
Maintenance 2,450 2,390 (60) U
Ground facility expenses 1,540 1,560 20 F
Administration 3,320 3,395 75 F
Total expense 25,820 25,635 185 U
Net operating income $8,080 $8,465 $385 U
3. The school's performance in July is not encouraging based on the flexible budget. There may be the need for the owner to review the price per lesson upward, keeping customers' effective demand in mind.
Data and Calculations:
The actual number of lessons for July, q = 155
Flexing the Budget:
Revenue $220 q = $34,100
Instructor wages $65 q = $10,075
Aircraft depreciation $38 q = $5,890
Fuel $15 q = $2,325
Maintenance $530 + $12 q = $2,390
Ground facility expenses $1,250 + $2 q = $1,560
Administration $3,240 + $1 q = $3,395
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Stock A has an expected return of 17.8 percent, and Stock B has an expected return of 9.6 percent. However, the risk of Stock A as measured by its variance is 3 times that of Stock B. If the two stocks are combined equally in a portfolio, what would be the portfolio's expected return
Answer:
13.70%
Explanation:
The expected return of a portfolio is said to be the weighted average of the returns of the individual components,
Given that:
Stock A has an expected return = 17.8%
Stock B has an expected return = 9.6%
the risk of Stock A as measured by its variance is 3 times that of Stock B.
If the two stocks are combined equally in a portfolio;
Then :
The weight of both stocks will be 50% : 50 %
So the portfolio's expected return can be determined as follows:
Expected return for stock A = 50% × 17.8%
Expected return = 0.50 × 17.8%
Expected return = 8.9 %
Expected return for stock B = 50 % × 9.6 %
Expected return for stock B = 0.50 × 9.6%
Expected return for stock B = 4.8%
Expected return of the portfolio = summation of the expected return for both stocks
Expected return of the portfolio = 8.9 % + 4.8%
Expected return of the portfolio = 13.70%
Which two answers identify the two middle core processes, i.e. core process 3 and 4? (choose two)
a. Build and test the system
b. Plan and monitor the project
c. Understand the details of the problem
d. Design the components
Answer:
c. Understand the details of the problem
d. Design the components
Explanation:
Systems development life cycle (SDLC) consists of six main phases:
System planningSystem analysis: involves understanding the details of the problem to be solved by the proposed system. What are the end-users' requirements and expectations?System design: involves designing the components, elements interfaces and architecture of the proposed system. System implementation and deploymentSystem testing and integrationSystem maintenanceYou work for a marketing firm that has just landed a contract with Run-of-the-Mills to help them promote three of their products: guppy gummies raskels, and cannies. All of these products have been on the market for some time, but, to entice better sales, Run-of-the-Mills wants to try a new advertisement that will market two of the products that consumers will likely consume together. As a former economics student, you know that complements are typically consumed together while substitutes can take the place of other goods. Run-of-the-Mills provides your marketing firm with the following data: When the price of guppy gummies increases by 5%, the quantity of raskels sold decreases by 4% and the quantity of cannes sold increases by 5%. Your job is to use the cross-price elasticity between guppy gummies and the other goods to determine which goods your marketing firm should advertise together Complete the first column of the following table by computing the cross-price elasticity between guppy gummies and raskels, and then between guppy gummies and cannies. In the second column, determine if guppy gummies are a complement to or a substitute for each of the goods listed. Finally, complete the final column by indicating which good you should recommend marketing with guppy gummies. Relative to Guppy Gummies Cross-Price Elasticity of Demand Complement or Substitute Recommend Marketing with Guppy Gummies Raskels Cannies
Answer:
See explanation below
Explanation:
Here, when the price of guppy gummies increases by 5%, the quantity of raskels sold decreases by 4% and the quantity of cannes sold increases by 5%.
i.e, % change in price of guppy grummies = 5%
% change in quantity of raskels = -4%
% change in quantity of cannes = 5%
i) Find the Cross price elasticity of demand between guppy grummies and raskels. Use the expression below.
% change in quantity demanded of raskels / % change in price of guppy gummies
= -4% / 5%
= -0.8
Substitute goods have a negative cross price elasticity of demand. Since, the cross price elasticity of demamd here is negative, the goods are substitute.
It is recommended not to advertise raskels with guppy grummies
ii) Find the Cross price elasticity of demand between guppy grummies and cannes. Use the expression below.
% change in quantity demanded of cannes / % change in price of guppy gummies
= 5% / 5%
= 1
Complement goods have a positive cross price elasticity of demand. Since, the cross price elasticity of demamd here is positive, the goods complement each other.
It is recommended to advertise cannes with guppy grummies.
In 2016, Hudson Corp. sold 3,000 units at $150.00 each. Variable expenses were $113.00 per unit, and fixed expenses were $58,240. The same variable expenses per unit and fixed expenses are expected for 2017. If the company cuts selling price by 6.00%, what is its break-even point in units for 2017?
Answer:
Break even in units (2017) = 2080 units
Explanation:
The break even point in units is the number of units where the total revenue equals total cost. It is a point of no profit and no loss. The break even point in units is calculated as follows,
Break even in units = Fixed cost / Contribution margin per unit
Contribution margin per unit = Selling price per unit - Variable cost per unit
A cut in selling price of 6% would mean that the new selling price will be,
New selling price = 150 - (150 * 0.06) = $141
Contribution margin per unit = 141 - 113 = $28
Break even in units = 58240 / 28
Break even in units (2017) = 2080 units
Selected accounts from the ledger of Garrison Company appear below. For each account, indicate the following:
a. In the first column at the right, indicate the nature of each account, using the following abbreviations: Asset - A Revenue - R Liability - L Expense - E None of the above - N
b. In the second column, indicate the increase side of each account by inserting "Dr." for Debit or "Cr." for Credit.
Account Type of Account Increase Side
(1) Supplies
(2) Fees Earned
(3) Retained Earnings
(4) Accounts Payable
(5) Salaries Expense
(6) Common stock
(7) Accounts Receivable
(8) Equipment
(9) Notes Payable
Answer & Explanation:
Account Type of Account Increase side
Supplies Asset Debit
Retained Earnings Capital Credit
Fees Earned Revenue Credit
Accounts Payable Liability Credit
Salary Expense Debit
Common Stock Asset Debit
Account Receivable Asset Debit
Equipment Asset Debit
Notes Payable Liability Credit
An ordinary annuity selling at $14,130.15 today promises to make equal payments at the end of each year for the next twelve years (N). If the annuity’s appropriate interest rate (IN) remains at 8.00% during this time, the annual annuity payment (PMT) will be
Answer:
PMT = $1875.00
Explanation:
The annuity refers to a series of fixed payments made after an equal interval of time and for a definite time period. The formula for the present value of annuity is,
For ordinary annuity
PV of annuity = PMT * [(1 - (1+IN)^-n) / IN]
Plugging in the values for the available variables. We calculate the PMT to be,
14130.15 = PMT * [(1 - (1+0.08)^-12) / 0.08]
14130.15 = PMT * 7.536078017
14130.15 / 7.536078017 = PMT
PMT = $1875.000493 rounded off to $1875.00
Why do you think the value of the Indian rupee declined against that of the U.S. dollar after the U.S. Fed had announced that it would begin to wind down its economic stimulus program
Answer:
Because the United States interest moved up and Indian Rupees depends mostly on the capital from the United States of America.
Explanation:
So, about the Indian rupees there are things we must note; (1). The inflation on Indian Rupees is high, (2). The problem of deficit account by the Rupee.
The two problems mentioned above are the problems that made Indian Rupees to rest or relent mostly on the United States of America Fed's cash flow. So, when U.S. Fed announced that it would begin to wind down its economic stimulus program the value of Indian Rupees DECREASES.
Power Drive Corporation designs and produces a line of golf equipment and golf apparel. Power Drive has 100,000 shares of common stock outstanding as of the beginning of 2018.Power Drive has the following transactions affecting stockholders' equity in 2018.March 1 Issues 58,000 additional shares of $1 par value common stock for $55 per share.May 10 Repurchases 5,300 shares of treasury stock for $58 per share.June 1 Declares a cash dividend of $1.65 per share to all stockholders of record on June 15. (Hint: Dividends are not paid on treasury stock.)July 1 Pays the cash dividend declared on June 1.October 21 Reissues 2,650 shares of treasury stock purchased on May 10 for $63 per share.Power Drive Corporation has the following beginning balances in its stockholders' equity accounts on January 1, 2018: Common Stock, $100,000; Additional Paid-in Capital, $4,800,000; and Retained Earnings, $2,300,000. Net income for the year ended December 31, 2018, is $630,000.Required:Prepare the statement of stockholders’ equity for Power Drive Corporation for the year ended December 31, 2018. (Amounts to be deducted should be indicated by a minus sign.)
Answer and Explanation:
The Preparation of statement of stockholders’ equity is shown below:-
Statement of Stockholder's Equity
Power Drive Corporation
For the year ended December 31, 2018
Particulars Common Additional Retained Treasury Total
stock paid in Earning Stock Stockholder
capital equity
Jan 1 Balance 100,000 $4,800,000 $2,300,000 0 $7,200,000
Issued common
stock 58,000 $3,132,000 0 0 $3,190,000
(58,000 × $1) (58,000 × $54)
Purchase treasury
stock -$307,400 -$307,400
(5,300 × $58)
Dividends -$251,955 -$251,955
((100,000 + 58,000 - 5,300) × $1.65)
Sale of Treasury
stock $13,250 $153,700 $166,950
(2,650 × $5) (2,650 × $58)
Net Income $630,000 $630,000
Balance,
December
31 158,000 $7,945,250 $2,678,045 -$153,700 $10,627,595
Total Stockholder's equity is
= Common stock + Additional paid in capital + Retained earnings - Treasury stock
= 158,000 + $7,945,250 + $2,678,045 - $153,700
= $10,627,595
Presented below is the 2018 income statement and comparative balance sheet information for Tiger Enterprises.TIGER ENTERPRISESIncome StatementFor the Year Ended December 31, 2018($ in thousands)Sales revenue $ 15,000 Operating expenses: Cost of goods sold $ 5,000 Depreciation 400 Insurance 900 Administrative and other 3,400 Total operating expenses 9,700 Income before income taxes 5,300 Income tax expense 2,120 Net income $ 3,180 Balance Sheet Information ($ in thousands) Dec. 31,2018 Dec. 31, 2017Assets: Cash $ 620 $ 360 Accounts receivable 830 990 Inventory 810 760 Prepaid insurance 130 35 Plant and equipment 3,200 2,600 Less: Accumulated depreciation (1,160 ) (760 ) Total assets $ 4,430 $ 3,985 Liabilities and Shareholders' Equity: Accounts payable $ 380 $ 520 Payables for administrative and other expenses 380 560 Income taxes payable 360 310 Note payable (due 12/31/2019) 1,380 950 Common stock 1,100 960 Retained earnings 830 685 Total liabilities and shareholders' equity $ 4,430 $ 3,985 Required:Prepare Tiger’s statement of cash flows, using the indirect method to present cash flows from operating activities. (Hint: You will have to calculate dividend payments). (Enter your answers in thousands. Amounts to be deducted should be indicated with a minus sign.)
Answer:
Net Income 3,180
Non-monetary terms:
Depreciation expense 400
Adjusted Income 3,580
Change in Working Capital:
Decrease in A/R 160
Increase in Inv (50)
Increase in Prepaid (95)
Increase Tax /P 50
Decrease in A/P (140)
Decrease in Other /P (180)
Change In Working Capital (255)
Cash-flow From Operating 3,325
Investing
Purchase of Equipment (600)
Financing
Note payable 430
From Issuance of Common Stock 140
Dividends Paid: (3,035)
Cash used for Financing (2,465)
Beginning Cash 360
Cash Flow 260
Ending Cash 620
Explanation:
We first remove the non.monetary concepts from the net income.
Then we adjust for the change in working capital which are the increase and decrease in the current assets and liabilities account
Increase in asset and decrease in liabilities represent cash outflow
while the opposite is true when an asset decrease(convert to cash) or a liability increase (delay of the payment)
Dividends Paid Calculation:
Beginning R/E 685 + 3,180 Income - Ending R/E 830 = 3,035
A travel agent wants to determine how much the average client is willing to pay for a weekend at an all-expense paid resort. The agent surveys 30 clients and finds that the average willingness to pay is $2,500 with a standard deviation of $840. However, the travel agent is not satisfied and wants to be 95% confident that the sample mean falls within $150 of the true average. What is the minimum number of clients the travel agent should survey
Answer:
[tex]n=(\frac{1.960(840)}{150})^2 =120.47 \approx 121[/tex]
So the answer for this case would be n=12 rounded up to the next integer
Explanation:
[tex]\bar X=2500[/tex] represent the sample mean
[tex]\mu[/tex] population mean (variable of interest)
s=840 represent the sample standard deviation
n represent the sample size
The margin of error is given by this formula:
[tex] ME=z_{\alpha/2}\frac{\sigma}{\sqrt{n}}[/tex] (a)
And on this case we have that ME =150 and we are interested in order to find the value of n, if we solve n from equation (a) we got:
[tex]n=(\frac{z_{\alpha/2} \sigma}{ME})^2[/tex] (b)
The critical value for 95% of confidence interval, the significance level if 5% and the critical value would be [tex]z_{\alpha/2}=1.960[/tex], replacing into formula (b) we got:
[tex]n=(\frac{1.960(840)}{150})^2 =120.47 \approx 121[/tex]
So the answer for this case would be n=12 rounded up to the next integer
The following items are reported on a company's balance sheet: Cash $510,000 Marketable securities 398,500 Accounts receivable (net) 338,900 Inventory 346,500 Accounts payable 693,000 Determine (a) the current ratio and (b) the quick ratio. Round to one decimal place. a. Current ratio b. Quick ratio
Answer:
Current ratio= 2.3
Quick ratio= 1.8
Explanation:
Cash=$510,000
Marketable securities= $398,000
Account receivables= $338,900
Inventory= $346,000
Account payable = $693,000
Curent ratio= current assets/current liability
Current assets= cash+ marketable securities+ Account receivables+inventory
Current liability= Account payable
($510,000+$398,000+$338,900+$346,000)/$693,000
= $1,592,900/$693,000
= 2.29
Current ratio = 2.3 ( to 1 decimal place)
ii) Quick ratio= ( cash+ marketable securities+ Account receivable)/Current liability
=$510,000+$398,000+$338,900/$693,000
= $1,246,900/$693,000
= 1.79.
Quick ratio = 1.8 ( to 1 decimal place)
Answer: Current ratio 2.3
Quick ratio 1.8
Explanation:
Given Data:
Cash = $510,000
Marketable securities = $398,500
Account receivable ( net) = $338,900
Inventory = $346,500
Accounts payable = $693,000
( a.) The current ratio : this helps to determine the relationship between current assets and current liabilities
= current assets / current liabilities
Currents assets = ( cash + marketable securities + inventory + account receivable )
= $( 510,000 + 398,500 + 338,900 + 346,500)
= $1,593,900
Current liabilities = $693,000
Current ratio = $1,593,900 / $693,000
= 2.3
(b) Quick ratio is the ratio of quick asset against current liabilities.
Quick assets ( cash + marketable securities + accounts receivable)
= $( 510,000 + 398,500 + 338,900)
= $1,247,400
Quick ratio = $1,247,400 / $693,000
= 1.8
g Real and nominal variables are highly intertwined, and changes in the money supply change real GDP. Most economists would agree that this statement accurately describes a. both the short run and the long run. b. the short run, but not the long run. c. the long run, but not the short run. d. neither the long run nor the short run.
Answer:
The correct answer is C.
Explanation:
GDP usually, is fixed in the short run. Thus, in the short-term, money supply will increase aggregate demand and prices will follow.
In the long term, however, real GDP (which is economic output that has been adjusted for price fluctuations), an increase in the money supply will create an increase in the GDP due to aggregate demand.
The US economy, for example, displays a strong positive correlation between the amount of money supplied and it's GDP growth between 1994 and 2009.
Cheers!
Lane Company manufactures a single product that requires a great deal of hand labor. Overhead cost is applied on the basis of standard direct labor-hours. Variable manufacturing overhead should be $5.80 per standard direct labor-hour and fixed manufacturing overhead should be $3,087,000 per year.
The company’s product requires 4 pounds of material that has a standard cost of $12.50 per pound and 1.5 hours of direct labor time that has a standard rate of $13.90 per hour.The company planned to operate at a denominator activity level of 315,000 direct labor-hours and to produce 210,000 units of product during the most recent year. Actual activity and costs for the year were as follows:
Number of units produced 252,000
Actual direct labor-hours worked 409,500
Actual variable manufacturing overhead cost incurred $ 1,351,350
Actual fixed manufacturing overhead cost incurred $ 3,276,000
Required:
1. Compute the predetermined overhead rate for the year. Break the rate down into variable and fixed elements.(Round your answers to 2 decimal places.)
Predetermined Overhead Rate = $15.60 per DLH
Variable Rate = $5.80 per DLH
FIxed Rate = $9.80 per DLH
3a. Compute the standard direct labor-hours allowed for the year’s production.
3b. Complete the following Manufacturing Overhead T-account for the year:
4. Determine the reason for the underapplied or overapplied overhead from (3) above by computing the variable overhead rate and efficiency variances and the fixed overhead budget and volume variances.(Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance).)
Answer:
1. Compute the predetermined overhead rate for the year. Break the rate down into variable and fixed elements.
total standard overhead rate = $15.60standard variable overhead rate = $5.80standard fixed overhead rate = $9.803a. Compute the standard direct labor-hours allowed for the year’s production.
1.5 direct labor hours x 252,000 units = 378,000 hours
3b. Complete the following Manufacturing Overhead T-account for the year:
Manufacturing overhead
Debit Credit
Actual variable cost $1,351,350 Applied variable cost $2,192,400
Actual fixed costs $3,276,000 Applied fixed costs $3,704,400
$1,269,450
Adjustment for over applied
overhead expense $1,269,450
0 0
4. Determine the reason for the underapplied or overapplied overhead from (3)
two different factors affected the overhead costs:
Actual labor hours were higher than budgeted, since 378,000 should have been used to produce the 252,000 units, but 409,500 were used instead. That results in an unfavorable variance of 31,500 labor hours (8.3% variance). Even though labor hour variance was unfavorable, the actual overhead costs incurred were much lower than expected. The favorable variance regarding overhead costs was much larger than the unfavorable variance in labor hours. The actual total overhead per labor hour = $11.30 vs. $15.60 (standard), which represents a 27.6% favorable variance.Explanation:
variable overhead $5.80 per direct labor hour
fixed overhead $3,087,000
each unit requires:
4 pounds of materials at standard cost of $12.50 per pound
1.5 direct labor hours at standard rate of $13.90 per hour
fixed overhead per direct labor hour = $9.80
total budgeted production 210,000 units
total budgeted direct labor hours 315,000
actual units produced 252,000
actual direct labor hours 409,500
actual variable manufacturing $1,351,350
actual fixed manufacturing $3,276,000
applied variable cost = $5.80 x 378,000 labor hours = $2,192,400
applied fixed costs = $9.80 x 378,000 labor hours = $3,704,400
Oriole Company has the following items: common stock, $1610000; treasury stock, $217000; deferred income taxes, $254000 and retained earnings, $782000. What total amount should Oriole Company report as stockholders’ equity?
Answer:
Stockholders' equity = $ 2,175,000.
Explanation:
Stockholders' equity is also the corporation's total book value. In other word, it is the amount of difference between the Corporation Asset and its liability
Stockholders' equity for Oriole company can be derived using : Common stock + Retained earnings - Treasury stock
Stockholders' equity = 1,610,000 + 782,000 - 217,000
Stockholders' equity = $ 2,175,000.
We also need to know that deferred income taxes is not a component of stockholders' equity thus it will not be considered in stockholders' equity calculation.
Correct answer is $ 21,75,000.
A decade ago the government of Weinsland decided to liberalize the country's economy. As a result, today the country is experiencing rapid economic advancement and societal changes favorable to international business. Which change is most likely to occur next in Weinsland?
A. As the country gets richer, there will be a shift in the society from "traditional" to "secular rational" values.
B. As the country gets richer, there will be a shift in the society from "well-being" to "survival" values.
C. The country, to further facilitate globalization, will commit to authoritarian ideologies.
D. The people in the country will give more importance to collectivism than to individualism.
E. The country will exhibit more need for social and material support structures built on collectives.
Answer:
As the country gets richer, there will be a shift in the society from "traditional" to "secular rational" values
Explanation:
In this scenario Weinsland decided to liberalize the country's economy. This will reduce government regulation on the economy and increase participation of private entities.
Liberalisation encourages economic growth.
Traditional conservative values are passed from generation to generation, and change only a little over time.
Secular rational values on the other hand embrace an ever changing economic environment where innovation constantly changes acceptable ways of doing things
Horizontal analysis: Is also called vertical analysis. Is the presentation of financial ratios. Is a tool used to evaluate financial statement items relative to industry statistics. Is a method used to evaluate changes in financial data across time. Evaluates financial data across industries.
Answer:
Explanation:
Horizontal analysis is comparing financial statistics or data over a period of time. it is also known as trend analysis.
Vertical analysis compares line items within the same period.
I hope my answer helps you
On the grant date, January 1st, 2015, the stock was quoted on the stock exchange at $63 per share. The fair value of the options on the grant date was estimated at $15 per option. The amounts of compensation expense ABC should recognize with respect to the options during 2015, 2016, and 2017 are:
Answer:
2015 $31,500
2016 $31,500
2017 $31,500
Explanation:
Number of Options in total × Fair Value of the Stock per option
Where
Number of Options in total = 63
Fair Value of the Stock per option =15
Hence:
(63*100) ×$15
=$6,300 ×$15
= $ 94,500
Compensation expense will be:
2015, 2016, and 2017 will give us 3 years
= $94,500/3
= $31,500 for 2015, 2016, and 2017
Fair value of the options is said to be evaluated on grant date and expenditure is been recognised in 3 years because the employee will be working for 3 years which is from year 2015 to 2017
Faber Products has $35 million of sales and $9.75 million of net income. Its total assets are $150 million. Assume the company’s total assets equal total invested capital, and its capital structure consists of 40% debt and 60% common equity. The firm’s interest rate is 4%, and its tax rate is 21%. What would happen if this firm used less leverage (debt)?
Answer:
If the firm uses less leverage, its ROE will decrease since the cost of equity is much higher than the cost of debt. If all debt is eliminated, then ROE will decrease to 7.764% from 10.83%.
Explanation:
net income = $9.75 million
capital structure:
$90 million equity$60 million debtinterest rate = 4% and tax rate = 21%
current return on equity (ROE) = $9.75 / $90 = 10.83%
current return of assets (ROA) = $9.75 / $150 = 6.5%
cost of debt = 4% x (1 - 21%) = 3.16%
if the company issues more equity to lower debt to 0, then:
net income = $9.75 + [$60 million x 4% x (1 - 21%)] = $9.75 + $1.896 = $11.646 million
return on equity (ROE) = $11.646 / $150 = 7.764%
return of assets (ROA) = $11.646 / $150 = 7.764%
Levi Corporation (a U.S. company) has several transactions with foreign entities. Each transaction is denominated in the local currency unit of the country in which the foreign entity is located. On December 2, 20X1, Levi sold confectionary items to a foreign company at a price of 50,000 yen when the direct exchange rate was 1 yen = $1.15. The account has not been settled as of the year ended December 31, 20X1, when the exchange rate had changed to 1 yen = $1.12. The foreign exchange gain or loss on Levi's records at year-end for this transaction will be
Answer: $1500 loss
Explanation:
From the question, On December 2, 20X1, Levi sold confectionary items to a foreign company by selling at a price of 50,000 yen when direct exchange rate was 1 yen = $1.15.
Sale value in dollar = 50,000 × 1.15
= $57500
The account has not been settled as of the year ended December 31, 20X1, when exchange rate had changed to 1 yen = $1.12.
Sale value in dollar = 50,000 × 1.12
= $56000
Foreign exchange loss:
= $57500 - $56000
= $1500 loss
Bloom Corporation purchased $1,000,000 of Taylor Company 5% bonds at par with the intent and ability to hold the bonds until they matured in 2025, so Bloom classifies their investment as HTM. Unfortunately, a combination of problems at Taylor Company and in the debt market caused the fair value of the Taylor investment to decline to $600,000 during 2018.
Required:
For each of the following scenarios, prepare appropriate entry(s) at December 31, 2018, and indicate how the scenario will affect the 2018 income statement (ignoring income taxes).
1. Bloom now believes it is more likely than not that it will have to sell the Taylor bonds before the bonds have a chance to recover their fair value. Of the $400,000 decline in fair value, Bloom attributes $250,000 to credit losses, and $150,000 to noncredit losses.
2. Bloom does not plan to sell the Taylor bonds prior to maturity, and does not believe it is more likely than not that it will have to sell the Taylor bonds before the bonds have a chance to recover their fair value. Of the $400,000 decline in fair value, Bloom attributes $250,000 to credit losses, and $150,000 to noncredit losses.
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.
Arlington Company is constructing a building. Construction began on January 1 and was completed on December 31. Expenditures were $4,000,000 on March 1, $3,300,000 on June 1, and $5,000,000 on December 31. Arlington Company borrowed $2,000,000 on January 1 on a 5- year, 12% note to help finance construction of the building. In addition, the company had outstanding all year a 10%, 3-year, $4,000,000 note payable and an 11%, 4-year, $7,500,000 note payable. 96. What are the weighted-average accumulated expenditures
Answer:
$5,258,333
Explanation:
Arlington Company weighted-average accumulated expenditures
March 1 Expenditure $3,333,333
($4,000,000 ×10/12)
Add June 1 Expenditure $1,925,000
($3,300,000 ×7/12)
Add Dec 31 Expenditure $0
($5,000,000 ×0/12)
Weighted-average accumulated expenditures $5,258,333
($3,333,333+$1,925,000)
