Answer and Explanation:
The journal entry is shown below:
Depreciation expense Dr $398,000
To Accumulated depreciation $398,000
(Being the depreciation expense is recorded)
For recording this we debited the depreciation expense as it increased the expenses and credited the accumulated depreciation as it decreased the value of the assets
The computation of the depreciation expense is as follows
Cost of the asset $3,250,000
Less: accumulated
depreciation till date ($1,801,000)
Undepreciation cost $1,449,000
Less:
Estimated residual value ($255,000)
Value for remaining
3 years $1,194,000
Divided by 3 years ÷ 3
Depreciation expense $398,000
Presented below are two independent situations: A) Sandhill Inc. acquired 10% of the 420,000 shares of common stock of Schuberger Corporation at a total cost of $15 per share on June 17, 2020. On September 3, Schuberger declared and paid a $120,000 dividend. On December 31, Schuberger reported net income of $520,000 for the year. B) Blue Corporation obtained significant influence over Hunsaker Company by buying 30% of Hunsaker’s 120,000 outstanding shares of common stock at a cost of $18 per share on January 1, 2020. On May 15, Hunsaker declared and paid a cash dividend of $120,000. On December 31, Hunsaker reported net income of $220,000 for the year. Prepare all necessary journal entries for 2017 for (a) Edelman and (b) Wen.
Answer:
The journal entries for both corporations is prepared below
A)
Date: June 17
Accounts title and Explanations: Stock investment, dr. (420,000*$15*10%) 630,000
Accounts title and Explanations: Cash, Cr. 630,000
____________________________
Date: Sept 3.
Accounts title and Explanations: Cash, dr. (120,000*10%) 12,000
Accounts title and Explanations: Dividend revenue, Cr. 12,000
______________________________
Date: Dec 31.
Accounts title and Explanations: Stock investments, dr. (520,000*10%) 52,000
Accounts title and Explanations: Investment revenue, Cr. 52,000
____________________________
B)
Date: Jan 1
Accounts title and Explanations: Stock investment, dr. (120,000*$18*30%) 648,000
Accounts title and Explanations: Cash, Cr. 648,000
____________________________
Date: May 15
Accounts title and Explanations: Cash, dr. (120,000*30%) 36,000
Accounts title and Explanations: Dividend revenue, Cr. 36,000
______________________________
Date: Dec 31.
Accounts title and Explanations: Stock investments, dr. (220,000*30%) 66,000
Accounts title and Explanations: Investment revenue, Cr. 66,000
____________________________
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
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.
Kevin owns one share of Acme, Inc. stock. He purchased the stock three years ago for $29. The stock is currently trading for $29.50 per share. The stock has paid the following dividends over the past three years. o Year 1: $1.50 o Year 2: $2.00 o Year 3: $2.50 What is the compounded rate of return (IRR) that Kevin has earned on this investment
Answer:
Find below the multiple choices:
5.6%.
6.6%.
10.1%.
7.35%
The last option ,7.35% is correct
Explanation:
The excel IRR formula can be very useful in determining the IRR for the investment in stock, the formula is stated thus:
=IRR(values)
the values in the case are the cash flows (inflows and outflows) arranged from the earliest to the latest as shown in the attached spreadsheet.
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%
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.
Capitan Inc. made an entry to record the return of inventory that the company previously purchased on account. If the company uses a perpetual inventory system, the entry to record the returned inventory includes a:____________
Answer:
Dr Accounts payable
Cr Merchandise inventory
Explanation:
The original purchase entry using the perpetual should be:
Dr Merchandise inventory XX
Cr Accounts payable XX
If the company returns some or all the merchandise purchased, then the journal entry should be:
Dr Accounts payable YY
Cr Merchandise inventory YY
If the company used the periodic inventory system, then the accounts would be different. Perpetual inventory directly debits or credits merchandise inventory account, it doesn't use the purchases account.
The original purchase entry using the periodic system should be:
Dr Purchases XX
Cr Accounts payable XX
If the company returns some or all the merchandise purchased, then the journal entry should be:
Dr Accounts payable YY
Cr Purchases returns and allowances YY
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
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.
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
On December 31, 2018, Interlink Communications issued 6% stated rate bonds with a face amount of $107 million. The bonds mature on December 31, 2048. Interest is payable annually on each December 31, beginning in 2019. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the tables provided.) Determine the price of the bonds on December 31, 2018, assuming that the market rate of interest for similar bonds was 7%. (Enter your answers in whole dollars. Round your final answers to nearest whole dollar amount.)
Answer:
$93,725,580.00
Explanation:
The market price of the bond is the present value of annual coupon payment plus the present value of face amount receivable at the end of the bond tenure.
Annual coupon interest=face amount*stated rate=$107,000,000*6%=$6,420,000.00
Face amount=$107,000,000
The discount factor for annual coupon is the present of 30 years annuity(2048-2018) at 7% market rate, which is 12.4090
The discount factor for the face value is 0.1314
Price of the bond=($6,420,000.00*12.4090)+($107,000,000*0.1314)=$93,725,580.00
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.
In January 2017, Crane Company, a newly formed company, issued 9500 shares of its $8 par common stock for $13 per share. On July 1, 2017, Crane Company reacquired 950 shares of its outstanding stock for $10 per share. The acquisition of these treasury sharesa. increased total stockholders' equity.b. decreased the number of issued shares.c. decreased total stockholders' equity.d. did not change total stockholders' equity.
Answer:
The correct option is C, decreased total stockholders' equity
Explanation:
By reacquiring 950 shares out of the issued shares of 9,500 shares ,the company takes possession of the 950 shares and give cash to stockholders in return for the shares repossessed.
As a result the total stockholders' equity would reduce, this is usually accounted for by deducting the cost of such repurchase from total stockholders' equity in the equity section of the balance sheet
Deere is a global manufacturer and distributor of agricultural, construction, and forestry equipment. Suppose it reported the following information in its 2017 annual report. (In millions)
2017 2016 Inventories (LIFO) $2,267 $2,999
Current asset 32,910
Current liabilities 11,711
LIFO reserve 1,389
Cost of goods sold 15,661
Compute Deere inventory turnover for 2017 ratio.
Answer:
5.95
Explanation:
Deere inventory turnover for 2017 ratio is:
Formula for Inventory Turnover Ratio= Cost of Goods sold / Average Inventory
Where Average Inventory = (Previous Inventory + Current Inventory) / 2
= ($2,267 + $2,999) / 2
=$5,266 / 2
=$2,633
Average Inventory = $2,633
Therefore, Inventory Turnover Ratio = $15,661 / $2,633 = 5.9479 = 5.95
Deere Inventory Turnover for 2017 Ratio is 5.95.
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.
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
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!
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.
Pennewell Publishing Inc. (PP) is a zero growth company. It currently has zero debt and its earnings before interest and taxes (EBIT) are $80,000. PP's current cost of equity is 10%, and its tax rate is 40%. The firm has 10,000 shares of common stock outstanding selling at a price per share of $48.00. Refer to the data for Pennewell Publishing Inc. (PP). Assume that PP is considering changing from its original capital structure to a new capital structure with 35% debt and 65% equity. This results in a weighted average cost of capital equal to 9.4% and a new value of operations of $510,638. Assume PP raises $178,723 in new debt and purchases T-bills to hold until it makes the stock repurchase. PP then sells the T-bills and uses the proceeds to repurchase stock. How many shares remain after the repurchase, and what is the stock price per share immediately after the repurchase?
Answer:
Price per share after repurchase = $51.064
Shares remaining after repurchase = 6500
Explanation:
Given the following :
Value of operations = $510,638
Value of T-bills = value of debt = $178,723
Therefore, value of equity = $510,638
Number of common shares = 10,000
Price per share = Value of equity / Number of shares
Price per share = $510,638 / 10,000 = $51.064
Price per share prior to repurchase is the same as price per share after repurchase.
However, number of shares repurchased equals;
$178,723 / $51.064 = 3499.99 = 3500 shares
Number of shares left after repurchase :
Totals shares - shares repurchased
10,000 - 3500 = 6,500
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.
On July 1, 2016, Farm Fresh Industries purchased a specialized delivery truck for $264,000. At the time, Farm Fresh estimated the truck to have a useful life of eight years and a residual value of $24,000. On March 1, 2021, the truck was sold for $115,000. Farm Fresh uses the straight-line depreciation method for all of its plant and equipment. Partial-year depreciation is calculated based on the number of months the asset is in service.Required: 1. Prepare the journal entry to update depreciation in 2021 2. Prepare the journal entry to record the sale of the truck. 3. Assuming that the truck was instead sold for $141,000, prepare the journal entry to record the sale.
Answer:
1.
1 March 2021
Depreciation expense $5000 Dr
Accumulated depreciation-Delivery truck $5000 Cr
2.
1 March 2021
Accumulated depreciation-Delivery truck 140000 Dr
Cash 115000 Dr
Loss on Disposal 9000 Dr
Delivery Truck 264000 Cr
3.
1 March 2021
Accumulated depreciation-Delivery truck 140000 Dr
Cash 141000 Dr
Delivery Truck 264000 Cr
Gain on disposal 17000 Cr
Explanation:
1.
Depreciation expense is the systematic allocation of an asset's cost over its estimated useful life.
The straight line method of depreciation charges a constant depreciation expense each period. The formula for depreciation expense per period under this method is,
Depreciation expense = (Cost - Residual value) / Estimated useful life of the asset
The depreciation expense per year of delivery truck under this method will be,
Depreciation expense per year = (264000 - 24000) / 8 = $30000 per year
The depreciation expense to be charged in 2021 will be for 2 months.
Depreciation expense 2021 = 30000 * 2/12 = $5000
2.
The accumulated depreciation of truck on 1 March 2021 is,
Depreciation for 6 months of 2016 = 30000 * 6/12 = $15000
Depreciation for 4 years (2017 to 2020) = 30000 * 4 = $120000
Depreciation for 2 months of 2021 = $5000
Accumulated depreciation at 1 March 2021 = 15000 + 120000 + 5000
Accumulated depreciation at 1 March 2021 = $140000
Net Carrying value of asset = 264000 - 140000 = $124000
Loss on disposal as asset is sold for less than its carrying value is,
loss on disposal = 115000 - 124000 = - $9000 (loss on disposal)
3.
As the asset is sold for more than its carrying value, the gain on disposal is,
Gain on disposal = 141000 - 124000 = $17000 (gain on disposal)
Dexter Consulting, Inc. recently reported the following information: Net income = $395,000 Sales = $700,000 Total Assets = $1.5 million Tax rate = 21% Interest expense = 13,000 Accounts Payable = 74,000 Notes Payable = 900,000 Accruals = 12,000 After-tax cost of capital = 10% What is the company’s EVA?
Answer:
$170,650
Explanation:
economic value added (EVA) = NOPAT – (WACC x capital invested)
NOPAT = net operating profits after taxWACC = weighted average cost of capitalcapital invested = assets - current liabilitiesNOPAT = net income x (1 - 21%) = $395,000 x 0.79 = $312,050
WACC = 10%
capital invested = $1,500,000 - $74,000 (accounts payable) - $12,000 (accruals) = $1,414,000
EVA = $312,050 - (10% x $1,414,000) = $312,050 - $141,400 = $170,650
An inexperienced accountant for Riverbed Corp showed the following in the income statement: income before income taxes $258,000 and unrealized gain on available-for-sale securities (before taxes) $94,900. The unrealized gain on available-for-sale securities and income before income taxes are both subject to a 34% tax rate. Prepare a correct statement of comprehensive income.
Answer:
Kindly check attached file for the Comprehensive report
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
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.
The Colson Company issued $407,000 of 9% bonds on January 1, 2014. The bonds are due January 1, 2020, with interest payable each July 1 and January 1. The bonds are issued at face value.
Prepare Colson’s journal entries for (a) the January issuance, (b) the July 1 interest payment, and (c) the December 31 adjusting entry.
Answer:
Dr cash $407,000
Cr bonds payable $407,000
July 1
Dr interest expense $ 18,315.00
Cr cash $ 18,315.00
December 31
Dr interest expense $ 18,315.00
Cr interest payable $ 18,315.00
Explanation:
The bond was issued at face value of $407,000 which means that cash of $407,000 was received which is to be debited to cash account and bonds payable account credited for the same amount.
On July1 ,interest coupon of $ 18,315.00 ($407,000*8%*6/12) was paid which means that interest expense is debited with $ 18,315.00 while cash is credited.
On 31 December ,interest coupon of $ 18,315.00 ($407,000*8%*6/12) was due which means that interest expense is debited with $ 18,315.00 while interest payable is credited.
Suppose that Congress passes a law requiring employers to provide employees some benefit (such as healthcare) that raises the cost of an employee by $4 per hour. Assume that firms were not providing such benefits prior to the legislation. On the following graph, use the green line (triangle symbol) to show the effect this employer mandate has on the demand for labor.On the previous graph, use the purple line (diamond symbol) to show the effect this employer mandate has on the supply of labor. Suppose the wage is free to balance supply and demand. Use the black point (plus symbol) to indicate the equilibrium wage and level of employment before this law, and use the grey point (star symbol) to indicate the equilibrium wage and level of employment after this law is implemented.
True or False: Employers and employees are made worse off by this law.
True False Suppose that, before the mandate, the wage in this market was $3 above the minimum wage. In this case, the employer mandate will decrease the equilibrium wage rate from $10 per hour to $6 per hour, causing employment to increase V and unemployment to decrease 'V' . Now suppose that workers do not value the mandated benefit at all. Which of the following statements are true under this circumstance?
1. The wage rate will decline by less than $4.
2. Employers are worse off than before the mandated benefit.
3. The equilibrium quantity of labor will decline.
4. The supply curve of labor doesn't shift at all.
5. Employees are worse off than before the mandated benefit.
Answer:
a. False
b. 1. The wage rate will decline by less than $4.
2.Employers are worse off than before the mandated benefit.
3. The equilibrium quantity of labor will decline.
4. The supply curve of labor doesn't shift at all
5. Employees are worse off than before the mandated benefit.
Explanation:
The Equilibrium wage and employment level are at the point where demand and supply curves intersect. The new law will cause the demand and supply curve to shift down. Employers and employees are not made worse off rather they are well off as before.
When the workers will not value the benefit as mandated in the law the supply curve will not shift down, the equilibrium quantity of labor will decline and wage rate will decline by less than $4. Employers are worse off than before because a greater total wage will be paid by employers plus benefit for few workers. This will result in greater total cost to employer.
During the first month of operations ended August 31, Kodiak Fridgeration Company manufactured 80,000 mini refrigerators, of which 72,000 were sold. Operating data for the month are summarized as follows: 1 Sales $10,800,000.00 2 Manufacturing costs: 3 Direct materials $6,400,000.00 4 Direct labor 1,600,000.00 5 Variable manufacturing cost 1,280,000.00 6 Fixed manufacturing cost 320,000.00 9,600,000.00 7 Selling and administrative expenses: 8 Variable $1,080,000.00 9 Fixed 180,000.00 1,260,000.00Required:
1. Prepare an income statement based on the absorption costing concept.*
2. Prepare an income statement based on the variable costing concept.*
3. Explain the reason for the difference in the amount of income from operations reported in (1) and (2).
Answer:
Absorption Costing Net Income 1008,000
Variable Costing Net Income 976,000
Explanation:
Kodiak Fridgeration Company
Units Produced = 80,000
Units Sold = 72,000
Ending Inventory = 8000
Per Units Cost
Direct materials $6,400,000/80,000 = $ 80
Direct labor 1,600,000 /80,000= $ 20
Variable manufacturing cost 1,280,000/80,000= $ 16
Fixed manufacturing cost 320,000 /80,000 = $ 4
Absorption Manufacturing Cost per unit= 9,600,000/80,000= $ 120
Variable Manufacturing Costs per unit = $ 116
Kodiak Fridgeration Company
Income Statement
Absorption Costing
Sales $10,800,000
Manufacturing costs:
Direct materials $6,400,000
Direct labor 1,600,000
Variable manufacturing cost 1,280,000
Fixed manufacturing cost 320,000 9,600,000
Less Ending Inventory (8000*120) (960,000)
Cost of Goods Sold 86,40,000
Gross Profit 2160,000
Selling and administrative expenses:
Variable $ 72,000* 13.5= 972,000
Fixed 180,000
Net Income 1008,000
Kodiak Fridgeration Company
Income Statement
Variable Costing
Sales $10,800,000
Variable manufacturing cost
(80,000*116) 9280,000
Less Ending Inventory ( 8000*116) 928,000
Cost of Goods Sold 83,52,000
Gross Contribution Margin 2448,000
Variable Selling and administrative expenses
(72000 * $1,080,000/80,000) 972,000
Contribution Margin 1476,000
Less Fixed Expenses
Fixed manufacturing cost 320,000
Fixed 180,000 500,000
Net Income 976,000
3. The difference in absorption and variable costing income is because in absorption costing the fixed costs are treated as unit cost and in variable costs the fixed costs are treated as period costs. Also the fixed costs of the ending units is deducted in absorption costing where it is not deducted in variable costing.
Suppose that General Motors Acceptance Corporation issued a bond with 10 years until maturity, a face value of $ 1 comma 000, and a coupon rate of 7.0 % (annual payments). The yield to maturity on this bond when it was issued was 6.0 %. What was the price of this bond when it was issued?
Answer:
$1,073.60
Explanation:
bond's current price = PV of face value + PV of coupons
maturity = 10 years
face value = $1,000
coupon rate = 7% annual
market rate = 6%
PV of face value = $1,000 / (1 + 6%)¹⁰ =$558.39
PV of coupons = coupon x annuity factor (10 years, 6%) = $70 x 7.3601 = $515.21
market value at issue date = $558.39 + $515.21 = $1,073.60
since the bond's coupon rate was higher than the market rate, the bond was sold at a premium.
Specialization and the gains from trade make the economy PPF outward bowed because _______. A. a good is initially produced by producers with higher opportunity costs and eventually produced by producers with lower opportunity costs B. all producers have bowed-out PPFs, and the economy PPF is the horizontal sum of the individual PPFs C. as more of a good is produced, people are willing to pay less for each additional unit of the good D. a good is initially produced by producers with lower opportunity costs and eventually produced by producers with higher opportunity costs
Answer:
A. a good is initially produced by producers with higher opportunity costs and eventually produced by producers with lower opportunity costs
Explanation:
The production possibility frontier is a curve that shows the two combinations of goods and services produced in an economy.
Because of trade a country can specialise in the production of goods for which it has a lower opportunity cost in its production and import goods for which it has a higher opportunity cost.
This makes the ppf bowed out as the country produces more of the good for which it has a lower opportunity cost and less of the good for which it has a higher opportunity cost.
I hope my answer helps you
