Answer:
the ending retained earnings balance is $87,900
Explanation:
The computation of the ending retained earnings balance is shown below:
= opening retained earning balance + net income - dividend paid
= $53,700 + $58,600 - $24,400
= $87,900
Hence, the ending retained earnings balance is $87,900
We simply applied the above formula
Santana Rey, owner of Business Solutions, decides to diversify her business by also manufacturing computer workstation furniture. Required: 1. Classify the following manufacturing costs of Business Solutions as (a) variable or fixed and (b) direct or indirect. 2. Prepare a schedule of cost of goods manufactured for Business Solutions for the month ended January 31, 2020. Assume the following manufacturing costs: Direct materials: $2,600 Factory overhead: $520 Direct labor: $1,200 Beginning work in process: none (December 31, 2019) Ending work in process: $590 (January 31, 2020) Beginning finished goods inventory: none (December 31, 2019) Ending finished goods inventory: $370 (January 31, 2020) 3. Prepare the cost of goods sold section of a partial income statement for Business Solutions for the month ended January 31, 2020. Pre
Answer:
Results are below.
Explanation:
First, we need to calculate the following costs as variable-fixed, and direct-indirect:
Direct materials: $2,600 (variable - direct)
Factory overhead: $520 (mixed - indirect)
Direct labor: $1,200 (variable - direct)
Now, we can calculate the cost of goods manufactured using the following formula:
cost of goods manufactured= beginning WIP + direct materials + direct labor + allocated manufacturing overhead - Ending WIP
cost of goods manufactured= 0 + 2,600 + 1,200 + 520 - 590
cost of goods manufactured= 3,730
Finally, the cost of goods sold:
beginning finished inventory= 0
cost of goods manufactured= 3,730
ending finished inventory= (370)
COGS= $3,360
For each of the following transactions that occur in their lives, identify whether it is included in the calculation of U.S. GOP as part of consumption (C), investment (), government purchases (G), exports (X), or imports (M).
a. The state of Pennsylvania repaves highway PA 320, which goes through the center of Swarthmore.
b. Sam's employer upgrades all of its computer systems using U.S-made parts.
c. Teresa's father in Sweden orders a bottle of Vermont maple syrup from the producer's website.
d. Sam buys a sweater made in Guatemala.
e. Teresa gets a new refrigerator made in the United States.
Answer:
a. The state of Pennsylvania repaves highway PA 320, which goes through the center of Swarthmore. - Gonverment purchases (G)
Government purchases include all expenses incurred by the government, like investment in public roads or public schools. It does not include transfer payments like social security or medicare though.
b. Sam's employer upgrades all of its computer systems using U.S-made parts. - Investment (I)
Investment includes all purchases made by private firms with the goal of increasing their assets, and economic profit.
c. Teresa's father in Sweden orders a bottle of Vermont maple syrup from the producer's website. - exports (X)
Exports are all goods and services, produced domestically (Vermont) and sold abroad (Sweden).
d. Sam buys a sweater made in Guatemala. - imports (M).
Imports are all goods and services, produced abroad (Guatemala), and consumed by domestic individuals or firms (Sam)
e. Teresa gets a new refrigerator made in the United States. - consumption (c)
Consumption includes all goods and services purchased by individuals and households in the United States.
Identify the correct order of the four steps used to prepare a production cost summary (report). 1)Summarize the cost flow of physical units; (2) Compute the total cost of equivalent units of production; (3) Compute the cost per equivalent unit of production; and (4) Assign costs to units completed and units in process. (1)Summarize the flow of physical units; (2) Compute the equivalent units of production output; (3) Assign costs to units completed and units in process; and (4) Compute the cost per equivalent unit of production. (1)Summarize the flow of physical units; (2) Compute the equivalent units of production output; (3) Compute the cost per equivalent unit of production; and (4) Assign costs to units completed and units in process. (1)Summarize the flow of physical units; (2) Compute the equivalent units of production output; (3) Compute the total cost of equivalent units of production; and (4) Assign costs to units completed and units in process.
Answer:
The answer is "Option C".
Explanation:
The Costs of production relate to the price of a company producing or producing a service, which can include the range of expenditures, like labor, manufactured goods, supplies of items, and expenses. It has mainly four steps that can be defined as follows:
Complete the physical unit flow.Measure the production unit's equivalent.Compare the value per unit for output equivalent.Assign costs to finished units and manufactured units.The following information is related to Splish Company for 2020.
Retained earnings balance, January 1, 2020 $1,332,800
Sales Revenue 34,000,000
Cost of goods sold 21,760,000
Interest revenue 95,200
Selling and administrative expenses 6,392,000
Write-off of goodwill 1,115,200
Income taxes for 2020 1,691,840
Gain on the sale of investments 149,600
Loss due to flood damage 530,400
Loss on the disposition of the wholesale division (net of tax) 598,400
Loss on operations of the wholesale division (net of tax) 122,400
Dividends declared on common stock 340,000
Dividends declared on preferred stock 108,800
Splish Company decided to discontinue its entire wholesale operations (considered a discontinued operation) and to retain its manufacturing operations. On September 15, Splish sold the wholesale operations to Rogers Company. During 2020, there were 500,000 shares of common stock outstanding all year.
Required:
Prepare a multiple—step income statement.
Answer:
Net income is $2,034,560.
Explanation:
The multiple-step income statement refers to an income statement that segregates operating revenues and operating expenses of an organisation from its nonoperating revenues, nonoperating expenses, gains, and losses. In addition, gross profit which is net sales revenue minus the cost of goods sold.
The multiple-step income statement is an alternative to the single-step income statement which reports uses just one equation to calculate profits by deducting total revenue from total expenses from segregating them.
The multiple step income statement of Splish Company for 2020 will look as follows:
Splish Company
Income Statement
For the Year Ended December 31, 2020
Particulars $ $
Sales Revenue 34,000,000
Cost of goods sold (21,760,000)
Gross profit 12,240,000
Selling and administrative expenses (6,392,000)
Income from operation 5,848,000
Other revenues and gains
Interest revenue 95,200
Gain on the sale of investments 149,600
Total other revenues and gains 244,800
6,092,800
Other expenses and losses
Write-off of goodwill (1,115,200)
Loss due to flood damage (530,400)
Total other expenses and losses (1,645,600)
Income from continuing op. b4 tax 4,447,200
Income taxes (1,691,840)
Income from continuing operation 2,755,360
Discontinued operation
Loss on disposal (net of tax) (598,400)
Loss on operations (net of tax) (122,400)
(720,800)
Net income 2,034,560
Why are supply curves typically upward-sloping? They slope upward because sellers prefer to sell more when prices are lower. They slope upward due to the law of demand. They slope upward because sellers demand more when prices are lower. They slope upward because higher prices lead individual businesses to supply a larger quantity and more businesses are willing to supply goods and services.
Answer: They slope upward because higher prices lead individual businesses to supply a larger quantity and more businesses are willing to supply goods and services.
Explanation:
The supply curve is typically upward-sloping because higher prices lead individual businesses to supply a larger quantity and more businesses are willing to supply goods and services.
What is supply?Supply refers to the amount of a given product or service that suppliers are willing and able to bring to the market for a specific price. The notion of supply is closely related to demand. As, when supply increases the price also goes up because companies want to expand their production to meet the increasing demand.
What is a supply curve?A supply curve represents the relationship between price of a product and quantity of product which a seller is willing and able to supply at a given period of time.
Supply curve are an essential tool for understanding the law of supply. As a supply curve, in a graphical form shows that, if prices of a good or service increases, producers will also increase the quantity they supply.
Why is supply curve upward-sloping?The supply curve slopes upward because if the price of goods and service increases quantity supplied also increases. This happens because of higher prices, which offers higher profits. Thus, it encourages the producer to invest more by producing larger quantities and thus earning larger profits.
Hence, option D is correct.
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You have hired an international agent and are ramping up production in your U.S. facility to keep up with the orders the agent has obtained. You receive an email from your purchasing manager.
From: M. Gomez
Subject: Order
We need to place a large order for bulbs for our solar kits. As you know, we import these bulbs from Japan. I have been watching the exchange rate between the U.S. dollar and the Japanese yen very carefully. The current exchange rate is $1 to 106.94 yen. However, sources tell me that the exchange rate is expected to be $1 to 115 yen very soon. Do you want me to place the order now or wait until the exchange rate changes?
Please advise how you want me to proceed.
Select an option from the choices below and click Submit.
A. Wait and place the order when the exchange rate changes.
B. Place the order now
Answer:
B. Place the order now.
Explanation:
Why wait until the exchange rate changes? When is that going to be? The best reaction would be to place the order when it is needed and not to speculate on the exchange rate. Waiting until the exchange rate changes against Japan makes the prices of goods and services cheaper for foreign purchasers. But, the wait could be endless.
What would be the consequences if managers of a firm evaluated a project based on its actual dollar cash flows, but used a real rate to discount the cash flows? Would the project be more likely to be accepted, or more likely to be rejected? What kind of error could be committed? Please provide an example of how a project evaluation was affected by inflation considerations, either from your own experience, or do some online search for examples.
Answer:
Real rate of returns are lower than nominal rates of return, therefore, using a real discount rate would overestimate a project's net present value. This could result in unprofitable projects being accepted because the NPV was erroneously calculated. If you want to use a real discount rate, you must first convert cash flows to real dollars.
For example, nominal discount rate is 10%, inflation rate is 5%, real discount rate is 5%.
Initial outlay $100
NCF year 1 = $40
NCF year 2 = $40
NCF year 3 = $40
Using the real discount rate, the NPV = $8.93
Using the nominal discount rate, the NPV = -$0.53
Discuss some of the program’s challenges.
https://www.pbs.org/video/need-know-financial-literacy/
Answer:
okay aph development continues with an expression of the rationale or the explanation that the writer gives for how the reader should interpret the information presented in the idea statement or topic sentence of the paragraph. The writer explains his/her thinking about the main topic, idea, or focus of the paragrap
Explanation:
why is it important to have a good besiness background?
As noted in the case, HP considered approaching chain stores that sell store-brand cartridges compatible with its printers and offering them incentives if they end the practice. Considering the various types of allowances and discounts to channel members discussed within the chapter, what type of discount or allowance could the approach that HP is contemplating be most clearly identified as
Answer: a trade discount
Explanation:
Based on the information that was provided, the type of discount or allowance could the approach that HP is contemplating be most clearly identified as a trade discount.
A trade discount simply refers to the scenario when a manufacturer reduces the retail price it sells its good to the wholesaler or the retailer. Since HP approached chain stores, then a trade discount is considered here.
During the first month (April 20--), the following transactions occurred.
a. Invested cash in business, $18,000.
b. Bought office supplies for $4,600: $2,000 in cash and $2,600 on account.
c. Paid one-year insurance premium, $1,200.
d. Earned revenues totaling $3,300: $1,300 in cash and $2,000 on account.
e. Paid cash on account to the company that supplied the office supplies in transaction (b), $2,300.
f. Paid office rent for the month, $750.
g. Withdrew cash for personal use, $100.
Required:
Show the effect of each transaction on the individual accounts.
The effects of the transactions on the individual accounts are:
a. Increase in cash and Capital by $18,000b. Increase in office supplies of $4,600; increase in liabilities of $2,600; decrease in Cash $2,000c. Increase in prepaid insurance $1,200 and decrease in cash $1,200d. Increase in cash $1,300; Increase in accounts receivable $2,000 and increase in revenue $3,300e. Decrease in cash $2,300; decrease in accounts payable $2,300f. decrease in cash $750; increase in expenses $750g. decrease in cash $100; increase in Drawings $100What was the effect on individual accounts?The cash account will decrease whenever money is used to pay for a good or service and when it needs to pay expenses.
It will increase when there is cash revenue and when there is an investment of capital.
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What is one of the basic principles of economics?
A.) Society's resources are unlimited.
B.) People never put their own interests as their first priority.
C.) If people demand a product, then businesses are required to supply it.
D.) Society and its individuals have unlimited wants.
preparing adjusting and closing entries across two periods norton company closes its accounts on december 31 each year. the company works a five-day work week and pays its employees every two weeks. on december 31, 2015, norton accrued $1,880 of salaries payable. on january 7, 2016, the company paid salaries of $4,800 cash to employees.
Answer:
Requirement: Prepare journal entries to: (a) Accrue the salaries payable on December 31, b) Close the Salaries Expense account on December 31 (the account has a year-end balance of $250,000 after adjustments), (c) Record the salary payment on January 7
Date Accounts title and Explanation Debit Credit
31-Dec Salaries expense $1,880
Salaries Payable $1,880
(To record accrued salaries )
31-Dec Retained Earnings $250,000
Salaries Expense $250000
(To close salaries expense account)
07-Jan Salaries Payable $1,880
Salaries expense $2,920
Cash $4,800
(To record payment of salary)
Last year Viera Corp had $155,000 of assets, $305,000 of sales, $20,000 of net income, and a debt-to-total-capital ratio of 37.5%. The new CFO believes a new computer program will enable it to reduce costs and thus raise net income to $33,000. Assets, total invested capital, sales, and the debt to capital ratio would not be effected. By how much would the cost reduction improve the ROE?
Answer:
13.41%
Explanation:
Calculation for By how much would the cost reduction improve the ROE
First step
Debt value = $155,000 × 37.5%
Debt value = $58,125
Second step
Equity value = $155,000 - $58,125
Equity value $96,875
Third step
= (Net income ÷ Total equity) × 100
Ratio = ($20,000 ÷ $96,875) × 100 = 20.65%
New ROE would be = ($33,000 ÷ $96,875) × 100 = 34.06%
Fourth step
Change in ROE= New ROE - Old ROE
ROE= 34.06% - 20.65%
ROE= 13.41%
Therefore By how much would the cost reduction improve the ROE is 13.41%
Stephenson Company's computer system recently crashed, erasing much of the company's financial data. The following accounting information was discovered soon afterwards on the CFO's back-up computer data.
Cost of Goods Sold $400,000
Work-in-Process Inventory, Beginning 35,000
Work-in-Process Inventory, Ending 46,000
Selling and Administrative Expense 59,000
Finished Goods Inventory, Ending 18,000
Direct Materials Purchased $194,900
Factory Overhead Applied $125,600
Operating Income $25,000
Direct Materials Inventory, Ending $6,800
Cost of Goods Manufactured $380,900
Direct Labor $62,700
The CFO of Stephenson Company has asked you to recalculate the following accounts and report to him by week's end. What should be the amount of direct materials available for use?
Answer:
$210,400
Explanation:
Particulars Amount
Cost of Goods Manufactured $380,900
Add: Closing WIP $46,000
Less: Opening WIP -$35,000
Less: Factory Overhead Applied -$125,600
Less: Direct Labor -$62,700
Add: Closing stock of Direct material $6,800
Direct Material Available for use $210,400
Keuka Studies does custom metal sculptures of horses and other animals. A horse sculpture is composed of numerous parts. They use a lathe to construct two types of parts. The "Body" part is used to support the torso of the horse and the "Leg" part is used to support the legs. Each horse sculpture needs 1 Body part and 4 Leg parts. Switching between either of the types of parts requires 12 minutes. Once ready to produce, the lathe produces a Body part in 3 minutes and a single Leg part in 3 minutes. The lathe only makes horse parts. For parts (a)-(d) assume Keuka operates a cyclic schedule in which they make 100 Body parts and then 400 Leg parts. Furthermore, assume the lathe is the bottleneck. Round your answer to 3 decimal places.
a. What is the maximum number of horse sculptures Keuka can make per hour? Do not round intermediate calculations. Enteryour answer as a percentage rounded to 2 decimal places.
b. What is the utilization (%) of the lathe?
Answer and Explanation:
a. The computation of the maximum number of horse sculptures can make per hour is shown below:
= (12 × 2) + (100 × 3) + (400 × 3)
= 24 + 300 + 1200
= 1524 minutes
Now cycle time in hours
= 1524 ÷ 60
= 25.40 hours
Number of horse scupltures could made is
= 400 ÷ 4
= 100
In per hour, it would be
= 100 ÷ 25.40 hours
= 3.94 hours
b. The utilization rate is
= (100 × 3) + (400 × 3) ÷ 1524 minutes
= 300 + 1200 ÷ 1524 minutes
= 1500 ÷ 1524 minutes
= 98.43%
A partial listing of costs incurred at Archut Corporation during September appears below: Direct materials $ 113,000 Utilities, factory $ 5,000 Administrative salaries $ 81,000 Indirect labor $ 25,000 Sales commissions $ 48,000 Depreciation of production equipment $ 20,000 Depreciation of administrative equipment $ 30,000 Direct labor $ 129,000 Advertising $ 135,000 The total of the manufacturing overhead costs listed above for September is: Multiple Choice $292,000 $50,000 $586,000 $30,000 PrevQuestion 7 of 10 Total7 of 10Visit question mapNext
Answer: $50,000
Explanation:
Manufacturing overhead are the costs that are indirectly related to production.
In this scenario those costs are:
Utilities, Factory, Indirect labor and Depreciation of production equipment.
= 5,000 + 25,000 + 20,000
= $50,000
Rivera Company has several processing departments. Costs charged to the Assembly Department for November 2020 totaled $2,283,744 as follows.
Work in process, November 1
Materials $78,600
Conversion costs 48,700 $127,300
Materials added 1,592,280
Labor 225,100
Overhead 339,064
Production records show that 35,200 units were in beginning work in process 30% complete as to conversion costs, 661,000 units were started into production, and 25,400 units were in ending work in process 40% complete as to conversion costs. Materials are entered at the beginning of each process.
Determine the equivalent units of production and the unit production costs for the Assembly Department. (Round unit costs to 2 decimal places, e.g. 2.25.)
Answer:
Equivalent units of Production for Materials.
= Units transferred out + Ending WIP
Units transferred out = Beginning WIP + Units started in production - Ending WIP
= 35,200 + 661,000 - 25,400
= 670,800 units
= 670,800 + 25,400
= 696,200 units
Equivalent units of Production for Conversion
= Units transferred out + Ending WIP Conversion
= 670,800 + (25,400 * 40%)
= 680,960 units
Units cost of production for Materials
= (Beginning material cost + Materials added) / Materials EUP
= (78,600 + 1,592,280) / 696,200
= $2.40
Units cost of production for Conversion
= (Beginning conversion + labor + overhead) / Conversion EUP
= (48,700 + 225,100 + 339,064) / 680,960
= $0.90
The 2018 balance sheet of Speith’s Golf Shop, Inc., showed long-term debt of $5 million, and the 2019 balance sheet showed long-term debt of $5.25 million. The 2019 income statement showed an interest expense of $165,000. The 2018 balance sheet showed $510,000 in the common stock account and $4.6 million in the additional paid-in surplus account. The 2019 balance sheet showed $550,000 and $4.8 million in the same two accounts, respectively. The company paid out $410,000 in cash dividends during 2019. Suppose you also know that the firm’s net capital spending for 2019 was $1,370,000, and that the firm reduced its net working capital investment by $69,000. What was the firm's 2019 operating cash flow, or OCF?
Answer:
$1,386,000
Explanation:
The computation of the operating cash flow is shown below:
But before that following calculations must be done
Cash Flow to Creditors
Cash Flow to Creditors = Interest Expenses Paid - Net Increase in Long term debt
= Interest Expenses Paid - [Ending Long term debt - BEginning Long term Debt]
= $165,000 - [$5,250,000 - $5,000,000]
= $165,000 - $250,000
= -$85,000
Cash Flow to Stockholders
Cash Flow to Stockholders = Dividend Paid - Net New Equity
= Dividend Paid - [(Ending Common stock + Ending Additional paid-in surplus account ) - (Opening Common stock + OPening Additional paid-in surplus account )
= $410,000 - [($550,000 + $4,800,000) - ($510,000 + $4,6000,000)]
= $410,000 - [$5,350,000 - $5,110,000]
= $410,000 - $240,000
= $170,000
Cash Flow from assets
Cash Flow from assets = Cash Flow to Creditors + Cash Flow to Stockholders
= -$85,000 + $170,000
= $85,000
Operating Cash Flow
= Operating Cash flows - Change in Net Working capital - Net Capital Spending
$85,000 = Operating cash flow - (-$69,000) - $1,370,000
= $85,000 - $69,000 + $13,70,000
= $1,386,000
ReNew Corporation raises funds to build renewable energy systems by issuing 3-year bonds with a coupon rate of 6% and a face value of $1,600. Assume that the market interest rate for a 3-year bond issued by a firm like ReNew is currently the same as the coupon rate. The price of each of these bonds is____ , which means that the bonds sell at ___. Suppose that the market interest rate for bonds that are similar to the ReNew bond has increased to 7%. The price of the ReNew bond changes to____ , which means that it sells at ____. Suppose that instead of rising, the market rate decreases from 6% to 4%. The new price of the bond changes to ___, which means that the bond sells at ___.
Answer:
The price of each of these bonds is $1,600, which means that the bonds sell at par.
Suppose that the market interest rate for bonds that are similar to the ReNew bond has increased to 7%. The price of the ReNew bond changes to $1,558.00 , which means that it sells at discount.
Suppose that instead of rising, the market rate decreases from 6% to 4%. The new price of the bond changes to $1,688.80, which means that the bond sells at a premium.
When the coupon rate and the market interest rate are the same, the price will be at par.
Interest rate increases:
Bond Price = Present value of coupon + Present value of bond price
Coupon = 6% * 1,600
= $96
Bond price = 96 * (1 - 1.07⁻³ / 0.07) + 1,600 / 1.07³
Bond price = $1,558.00
Interest rate decreases:
= 96 * (1 - 1.04⁻³ / 0.04) + 1,600 / 1.04³
= $1,688.80
Tullius Corporation has received a request for a special order of 8,600 units of product C64 for $45.50 each. The normal selling price of this product is $50.60 each, but the units would need to be modified slightly for the customer. The normal unit product cost of product C64 is computed as follows:
Direct materials $ 16.30
Direct labor 5.60
Variable manufacturing overhead 2.80
Fixed manufacturing overhead 5.70
Unit product cost $ 30.40
Direct labor is a variable cost. The special order would have no effect on the company's total fixed manufacturing overhead costs. The customer would like some modifications made to product C64 that would increase the variable costs by $5.20 per unit and that would require a one-time investment of $45,000 in special molds that would have no salvage value. This special order would have no effect on the company's other sales. The company has ample spare capacity for producing the special order.
Required: Determine the effect on the company's total net operating income of accepting the special order.
Answer:
Increase in Netcome$89,160
Explanation:
Calculation to Determine the effect on the company's total net operating income of accepting the special order.
Effect on the company's total net operating income of accepting the special order=(8,600units*$45.50)-[8,600units*($ 16.30+5.60+2.80+$5.20)]-$45,000
Effect on the company's total net operating income of accepting the special order=$391,300-$257,140-$45,000
Effect on the company's total net operating income of accepting the special order=$89,160 Increase
Therefore the effect on the company's total net operating income of accepting the special order will be increase in net income of the amount of $89,160
The purpose of domains in a typical IT infrastructure is to: a. help organize the roles, responsibilities, and accountabilities for risk management and risk mitigation. b. control the activities and behaviors of employees and limit their accessibility to certain domains. c. define the policies that will eliminate all possibilities and avenues of attack. d. identify the domains most likely to be attacked and the relative cost and impact of potential attacks
Answer:
a. help organize the roles, responsibilities and accountabilities for risk management and risk mitigation.
Explanation:
Domain connects remote users to the organization network. It helps host to define the access to specific user. Domain holds all the critical information and data in the system. It defines the roles and responsibilities for risk mitigation.
Sweeten Company had no jobs in progress at the beginning of March and no beginning inventories. The company has two manufacturing departments-Molding and Fabrication. It started, completed, and sold only two jobs during March- Job P and Job Q. The following additional information is available for the company as a whole and for Jobs P and Q (all data and questions relate to the month of March):
Molding Fabrication Total
Estimated total machine-hours used 2,500 1,500 4,000
Estimated total fixed manufacturing overhead $ 14,000 $ 17,400 $ 31,400
Estimated variable manufacturing overhead per machine-hour $ 3.00 $ 3.80
Job P Job Q
Direct materials $ 29,000 $ 16,000
Direct labor cost $ 33,800 $ 13,900
Actual machine-hours used:
Molding 3,300 2,400
Fabrication 2,200 2,500
Total 5,500 4,900
Sweeten Company had no underapplied or overapplied manufacturing overhead costs during the month.
What was the company's plantwide predetermined overhead rate? (Round your answer to 2 decimal places.)
Answer:
Predetermined manufacturing overhead rate= $11.15 per machine hour
Explanation:
Molding Fabrication Total
Estimated total machine-hours used 2,500 1,500 4,000
Estimated total fixed manufacturing overhead $ 14,000 $ 17,400 $ 31,400
Estimated variable manufacturing overhead per machine-hour $ 3.00 $ 3.80
To calculate a single plantwide predetermined overhead rate, we need to use the following formula:
Predetermined manufacturing overhead rate= total estimated overhead costs for the period/ total amount of allocation base
Total fixed overhead= $31,400
Total variable overhead= (3*2,500) + (3.8*1,500)= $13,200
Total Machine hours= 4,000
Predetermined manufacturing overhead rate= (31,400 + 13,200) / 4,000
Predetermined manufacturing overhead rate= $11.15 per machine hour
On January 1, 2020, Stream Company acquired 30 percent of the outstanding voting shares of Q-Video, Inc., for $770,000. Q-Video manufactures specialty cables for computer monitors. On that date, Q-Video reported assets and liabilities with book values of $1.9 million and $700,000, respectively. A customer list compiled by Q-Video had an appraised value of $300,000, although it was not recorded on its books. The expected remaining life of the customer list was five years with straight-line amortization deemed appropriate. Any remaining excess cost was not identifiable with any particular asset and thus was considered goodwill. Q-Video generated net income of $250,000 in 2020 and a net loss of $100,000 in 2021. In each of these two years, Q-Video declared and paid a cash dividend of $15,000 to its stockholders. During 2020, Q-Video sold inventory that had an original cost of $100,000 to Stream for $160,000. Of this balance, $80,000 was resold to outsiders during 2020, and the remainder was sold during 2021. In 2021, Q-Video sold inventory to Stream for $175,000. This inventory had cost only $140,000. Stream resold $100,000 of the inventory during 2021 and the rest during 2022. For 2020 and then for 2021, compute the amount that Stream should report as income from its investment in Q-Video in its external financial statements under the equity method. (Enter your answers in whole dollars and not in millions. Do not round intermediate calculations.)
Answer:
Stream Company
The amount that Stream Company should report as income from its investment in Q-Video in its external financial statements under the equity method:
2020 = $75,000
2021 = ($30,000)
Explanation:
a) Data and Calculations:
Equity share in Q-Video, Inc. = 30%
Cost of equity investment = $770,000
Q-Video Profits and dividends Stream's share
2020 net income = $250,000 $75,000 ($250,000 * 30%)
2021 net loss of $100,000 ($30,000) ($100,000 * 30%)
2020 dividends = $15,000 $4,500 ($15,000 * 30%)
2021 dividends = $15,000 $4,500 ($15,000 * 30%)
b)The equity method is used by Stream Company because its investment in Q-Video, Inc. is less than 51% and more than 20%. Under the equity method, Stream accounts for its share of net income and net loss. The investment is initially recorded at cost. Adjustments are then made to the cost balance at the end of every period by increasing it with the share of net income and decreasing it with its share of net loss and dividends received.
Problem 11-5 Sensitivity Analysis and Break-Even [LO1, 3]We are evaluating a project that costs $583,800, has a six-year life, and has no salvage value. Assume that depreciation is straight-line to zero over the life of the project. Sales are projected at 90,000 units per year. Price per unit is $41, variable cost per unit is $27, and fixed costs are $695,000 per year. The tax rate is 25 percent, and we require a return of 9 percent on this project. a-1.Calculate the accounting break-even point. (Do not round intermediate calculations and round your answer to the nearest whole number, e.g., 32.) a-2.What is the degree of operating leverage at the accounting break-even point
Answer:
It was nice... friend.
Explanation:
Presented below is information related to Wyrick Company:(1.) The company is granted a charter that authorizes issuance of 15,000 shares of $100 par value preferred stock and 40,000 shares of no-par common stock.(2.) 8,000 shares of common stock are issued to the founders of the corporation for land valued by the board of directors at $300,000. The board establishes a stated value of $5 per share for the common stock.(3.) 5,000 shares of preferred stock are sold for cash at $120 per share.(4.) The company issues 100 shares of common stock to its attorneys for costs associated with starting the company. At that time, the common stock was selling at $60 per share.Instructions:Prepare the general journal entries necessary to record these transactions.
Answer and Explanation:
The journal entries are shown below:
1. No journal entry is required
2. Land 300,000
Common Stock 40,000
Paid-in Capital in Excess
of Stated Value 260,000
(Being the land is purchased by the issue of the shares)
3. Cash 600,000
Preferred Stock 500,000
Paid-in Capital in Excess
of Par—Preferred Stock 100,000
(Being the preferred stock is issued for cash)
4. Organization Expense 6,000
Common Stock 500
Paid-in Capital in Excess
of Stated Value 5,500
(Being organizaiton expense is recorded)
A company sells 500 shirts at a price of $15 each with a cost of goods sold of $2 per shirt. The company has selling and administrative expenses of $2,500, depreciation expenses of $500, interest expenses of $1,000, and a tax rate of 35%. Calculate the operating (EBIT)
Answer:
EBIT= $3,500
Explanation:
EBIT is the earnings before interest and taxes.
First, we need to calculate the sales revenue and cost of goods sold:
Sales= 500*15= $7,500
COGS= 500*2= $1,000
Now, we can determine the EBIT:
Sales= 7,500
COGS= (1,000)
Gross profit= 6,500
Selling and administrative expense= (2,500)
Depreciation expense= (500)
EBIT= $3,500
If we want to determine the net income:
EBIT= 3,500
Interest= (1,000)
EBT= 2,500
Tax= 2,500*0.35= (875)
Depreciation= 500
Net income= 2,125
It is estimated that the annual sales of an energy saving device will be 20,000 the first year and increase by 10,000 per year unitl 50,000 units are sold during the fourth year. Proposal A is to purchase manufacturing equipment costing $120,000 with an estimated salvage value of $15,000 at the end of 4 years.Proposal B is to purchase equipment costing $280,000 with an estimated salvage value of $32,000 at the end of 4 years. The variable manufacturing cost per unit under proposal A is estimated to be $8,00, but is estimated to be only $2.60 under proposal B. If the interest rate is 9%, which proposal should be accepted for a 4-year production horizon?
Answer:
Proposal B should be accepted
Explanation:
1 2 3 4
Sales(Units) 20,000 30,000 40,000 50,000
Variable Cost (A) 160,000 240,000 320,000 400,000- 15,000
Variable Cost (B) 52,000 78,000 104,000 130,000 - 32,000
PV Factor(9%) 0.917 0.841 0.772 0.708
PV OF Variable Cost(A) 146,720 201,840 247,040 272,580
PV of Variable Cost(B) 47,684 65,598 80,288 69,384
Total PV of Variable Cost of A: $868,180
Total PV of Variable Cost of B: $262,954
Difference in PV of Expenses= $605,226
Difference in PV of Outflow = 280,000 - 120,000 = $160,000
So, Proposal B should be accepted because it has a cost saving of Net $445,226 (605,226 - 160,000).
This information relates to McCall Real Estate Agency.
Oct. 1 Stockholders invest $31,930 in exchange for common stock of the corporation.
2 Hires an administrative assistant at an annual salary of $30,600.
3 Buys office furniture for $3,850, on account.
6 Sells a house and lot for E. C. Roads; commissions due from Roads, $10,770 (not paid by Roads at this time).
10 Receives cash of $155 as commission for acting as rental agent renting an apartment.
27 Pays $690 on account for the office furniture purchased on October 3.
30 Pays the administrative assistant $2,550 in salary for October.
Journalize the transactions. (If no entry is required, select "No entry" for the account titles and enter O for the amounts. Cr amount is entered. Do not indent manually.
Answer:
Oct. 1 Stockholders invest $31,930 in exchange for common stock of the corporation.
Dr Cash 31,930
Cr Common stock 31,930
Oct. 2 Hires an administrative assistant at an annual salary of $30,600.No journal entry
Oct. 3 Buys office furniture for $3,850, on account.
Dr Furniture 3,850
Cr Accounts payable 3,850
Oct. 6 Sells a house and lot for E. C. Roads; commissions due from Roads, $10,770 (not paid by Roads at this time).
Dr Accounts receivable 10,770
Cr Service revenue 10,770
Oct. 10 Receives cash of $155 as commission for acting as rental agent renting an apartment.
Dr Cash 155
Cr Service revenue 155
Oct. 27 Pays $690 on account for the office furniture purchased on October 3.
Dr Accounts payable 690
Cr Cash 690
Oct. 30 Pays the administrative assistant $2,550 in salary for October.
Dr Wages expense 2,550
Cr Cash 2,550
You wish to retire in 20 years, at which time you want to have accumulated enough money to receive an annual annuity of $24,000 for 25 years after retirement. During the period before retirement you can earn 10 percent annually, while after retirement you can earn 12 percent on your money. What annual contributions to the retirement fund will allow you to receive the $24,000 annuity
Answer:
$3,286.52
Explanation:
Interest rate per annum = 12.00%
Number of years = 25
Number of compounding per per annum = 1
Interest rate per period (r) = 12.00%
Number of periods (n) = 25
Payment per period (P) = $24,000
PV of $24,000 payments after 20 years = P * [1 - (1/(1+r)^n)]/ r
PV of $24,000 payments after 20 years = 24000*[1-(1/(1+12%)^25]/12%
PV of $24,000 payments after 20 years = $188,235.34
Interest rate per annum = 10.00%
Number of years= 20
Number of payments per per annum = 1
Interest rate per period (r) = 10.00%
Number of periods (n) = 20
Future value of annuity (FVA) = $188,235
Annual contribution (P) = FVA/ ([ (1+r)^n - 1] / r)
Annual contribution (P) = 188235/(((1+10%)^20-1)/10%)
Annual contribution (P) = $3,286.52
