Answer:
$225,000
Explanation:
Computation for Ivory Corporation's 2019 deduction for the above amounts.
In a situation where a Corporation uses the accrual method such Corporation cannot in any way claim a deduction for an accrual with respect to a related party reason been that the recipient have to reports the amount as income.
Therefore Ivory Corporation cannot deduct the $25,000 bonus which was attributable to Oscar because Oscar is the related party until the year 2018.
Ivory Corporation should go ahead and deduct in 2017 the salary payments which is been made to each shareholder plus the accrued bonus to Craig, or $225,000
Salary of $100,000 + Salary of $100,000 + $25,000 bonus
$225,000
Juanita is deciding whether to buy a skirt that she wants, as well as where to buy it. Three stores carry the same skirt, but it is more convenient for Juanita to get to some stores than others. For example, she can go to her local store, located 15 minutes away from where she works, and pay a marked-up price of $103 for the skirt:
Determining opportunity cost Juanita is decidin
Store Travel Time Each Way Price of a Skirt
(Minutes) (Dollars per skirt)
Local Department Store 15 103
Across Town 30 89
Neighboring City 60 63
Juanita makes $16 an hour at work. She has to take time off work to purchase her skirt, so each hour away from work costs her $16 in lost income. Assume that returning to work takes Juanita the same amount of time as getting to a store and that it takes her 30 minutes to shop. As you answer the following questions, ignore the cost of gasoline and depreciation of her car when traveling.
Complete the following table by computing the opportunity cost of Juanita's time and the total cost of shopping at each location.
Store Opportunity Cost of Time Price of a Skirt Total Cost
(Dollars) (Dollars per skirt) (Dollars)
Local Department Store 103
Across Town 89
Neighboring City 63
Assume that Juanita takes opportunity costs and the price of the skirt into consideration when she shops. Juanita will minimize the cost of the skirt if she buys it from the:_________.
Answer:
Juanita should purchase the skirt at the store across town because the total economic cost will be lowest.
Explanation:
three options:
local store 15 minutes away and a price of $103across town 30 minutes away and a price of $89neighboring city 1 hour away and a price of $63Juanita makes $16 per hour at her work, and her purchase decision includes the opportunity cost of lost wages:
total economic cost:
local store = $103 + [1/4 hours x 2 (round trip) x $16] = $111across town = $89 + [1/2 hours x 2 (round trip) x $16] = $105neighboring city = $63 + [1 hour x 2 (round trip) x $16] = $95Juanita should purchase the skirt at the store across town because the total economic cost will be lowest ($105)
Opportunity costs are the benefits lost or extra costs incurred for choosing one activity or investment over another alternative. Economic costs include both accounting costs and opportunity costs.
Presented below is an aging schedule for Bryan Company. Number of Days Past Due Customer Total Not Yet Due 1-30 31-60 61-90 Over 90 Aneesh $ 24,000 $ 9,000 $15,000 Bird 30,000 $ 30,000 Cope 50,000 5,000 5,000 $40,000 DeSpears 38,000 $38,000 Others 120,000 72,000 35,000 13,000 $262,000 $107,000 $49,000 $28,000 $40,000 $38,000 Estimated percentage uncollectible 3% 7% 12% 24% 60% Total estimated bad debts $ 42,400 $ 3,210 $3,430 $3,360 $ 9,600 $22,800 At December 31, 2016, the unadjusted balance in Allowance for Doubtful Accounts is a credit of $8,000.Journalize the adjusting of bad debit at December 31 2016.
Answer and Explanation:
The adjusting journal entry is shown below:
On Dec 2016
Bad debt expense Dr ($42,400 - $8,000) $34,400
To Allowance for doubtful debts $34,400
(Being the bad debt expense is recorded)
For recording this we debited the bad debt expense as it increased the expenses and credited the allowance for doubtful debts as it reduced the assets
Workers in the nation of Argenia prefer managers that forcefully tell employees what to do and how to do it. Conversely, employees in the U.S. prefer to participate in decision making in the workplace. This __________ difference between Argenian workers and U.S. workers represents a management challenge for firms trading in the global market.
Answer: sociocultural
Explanation:
The options for the question are:
a. geopolitical
b. economic
c. sociocultural
d. regulatory
Sociocultural is used to describe differences between groups of people which relate to the social class and the culture in which they live. The sociocultural environment of a business are the values and the customs that guide the practices of the business.
From the question, employees in Argenia prefer managers who forcefully tell employees what to do and how to do it while the employees in the United States like to participate in the decision making in the workplace. This shows that there are sociocultural differences between the two nations.
In the market for used cars we have 10 sellers, willing to sell at the prices of $1000, $2000, $3000, $4000, $5000, $6000, $7000, $8000, $9000, $10000. If the equilibrium price in the market is $2500, how many cars would be sold? a. 2 b. 4 c. 1 d. 3
Answer:
2
Explanation:
When the equilibrium price in the market is $2500 so here the number of cars that should be sold is 2.
Calculation of the number of cars:Since the equilibrium price in the market is $2500.
Also, we are capable to sell from the sellers that sells less than that price
So based on this, we can say that there are 2 sellers that satisfied the given criteria.
Hence, the option a is correct.
Learn more about equilibrium here: https://brainly.com/question/19271292
When a central bank increases bank reserves by $1, the money supply rises by more than $1. The amount of extra money created when the central bank increases bank reserves by $1 is called the money multiplier.
a. The money multiplier is generally greater than 1 because:
1. in a fractional-reserve banking system, each dollar bill is spent more than once (velocity is larger than 1), thereby increasing the money supply by more than $1.
2. in a fractional-reserve banking system, each dollar of reserves can support more than one dollar of deposits, thereby increasing the money supply by more than $1.
3. in a 100 percent reserve banking system, each dollar of reserves supports exactly one hundred dollars of deposits, thereby increasing the money supply by $100.
4. when a central bank increases bank reserves by $1, deposits are automatically increased by $1 as well, thereby increasing the money supply by $2.
The money multiplier is equal to 1 when:
1. reserves < deposits.
2. reserves > deposits.
3. reserves = deposits.
b. The initial money supply is $1,500, of which $700 is currency held by the public. The desired reserve-deposit ratio is 0.1. Calculate the increase in the money supply associated with increases in bank reserves of $10. What is the money multiplier in this economy? Assume that individuals do not change their currency holdings.
c. A general rule for calculating the money multiplier is:
1. 1/(deposit ratio-desired reserve).
2. 1/deposit ratio.
3. 1/desired reserve.
4. 1/(desired reserve-deposit ratio).
d. Suppose the Fed wanted to reduce the money multiplier, perhaps because it believes that change would give it more precise control over the money supply. In order to achieve its goal, the Fed would:
1. decrease the ratio of reserves to deposits.
2. increase reserve requirements.
3. increase the money supply.
4. decrease reserve requirements.
Answer: a. 2. in a fractional-reserve banking system, each dollar of reserves can support more than one dollar of deposits, thereby increasing the money supply by more than $1.
3. reserves = deposits.
b. $900.
Multiplier is 10
c. 4. 1/(desired reserve-deposit ratio).
d. 2. increase reserve requirements.
Explanation:
a. In fractional-reserve banking system, $1 of deposits can be used to create more than $1 in money supply as the money is continuously deposited into other bank accounts. This enables the money to keep increasing until it theoretically reaches a certain amount determined by the money Multiplier.
If the money Multiplier is equal to 1 which is a very rare occasion, this means that the amount required in reserves is equal to the deposits. $1 of deposits will yield a $1 in money supply increase.
b. The desired reserve-deposit ratio is 0.1. For every $1, 0.1 goes to reserves.
If bank reserves have increased by $10 then that means that deposits are,
0.1x = 10
x = $100
Deposits not in reserve are,
= 0.9 * 100
= $90
The money Multiplier can be calculated with the formula,
= 1/(desired reserve-deposit ratio)
= 1/0.1
= 10
Increase in money supply is therefore,
= $90 * 10
= $900
c. As earlier mentioned, option D is the general rule for calculating the money Multiplier.
= 1/(desired reserve-deposit ratio)
d. If the Fed increases the reserve requirement, the effect would be a reduction in the money supply because the denominator is now higher.
For instance, reserve requirement of 0.1 vs 0.2.
At 0.1, the money supply would be,
= 1/0.1
= 10
At 0.2, the money supply would be,
= 1/0.2
= 5
The higher the reserve requirement, the lower the Multiplier.
On January 1, 20X1, Draper Inc. signed a five-year noncancelable lease with Thornhill Company for custom-made equipment. The lease calls for five payments of $161,364.70 to be made at the beginning of each year. The leased asset has a fair value of $900,000 on January 1, 20X1. There is no bargain purchase option, and ownership of the leased asset reverts to Thornhill at the lease end. The leased asset has an expected useful life of six years, and Draper uses straight-line depreciation for financial reporting purposes. Its incremental borrowing rate is 8%. Draper uses a calendar year for financial reporting purposes.
Required:
1. Under U.S GAAP would Draper classify this lease as a capital lease or as an operating lease? Explain.
2. Under IFRS would Draper classify this lease as a capital lease or as an operating lease? Explain.
Answer:
1. Under U.S GAAP the lease will be capital lease
2. Under IFRS it is leased under capital lease method.
Explanation:
1. In order to determine Under U.S GAAP if Draper classify this lease as a capital lease or as an operating lease we would to calculate the lease payable as follows:
lease payable=(Annual Payment*present value after interest and tax)/Fair value
lease payable=($161,364.70*800)/$900,000
lease payable=77.3%
Under U.S GAAP the lease will be capital lease because the lease term is for 5 years was more than 75% of economic life
2. Under IFRS the assets are mostly considered by its economic value, so it is leased under capital lease method.
As a toy company produces more toys the average total cost of each toy produced decreases. This is because: total fixed costs are decreasing as more toys are produced. average variable cost is decreasing as more toys are produced. total variable cost is decreasing as more toys are produced. None of the above.
Answer:
total fixed costs are decreasing as more toys are produced.
Explanation:
Costs are classified as variable or fixed based on their relationship with the level of activity.
At any given level of activity, variable unit costs are constant. However, the unit fixed costs decrease as more units are produced.
On October 1, Oriole Corporation’s stockholders’ equity is as follows.
Common stock, $7 par value $535,500
Paid-in capital in excess of par—common stock 30,000
Retained earnings 167,000
Total stockholders’ equity $732,500
On October 1, Oriole declares and distributes a 10% stock dividend when the market price of the stock is $14 per share.
Required:
a. Compute the par value per share (1) before the stock dividend and (2) after the stock dividend.
b. Indicate the balances in the three stockholders? equity accounts after the stock dividend shares have been distributed.
Answer:
a. Compute the par value per share (1) before the stock dividend and (2) after the stock dividend.
1) $7 per stock2) $7 per stockb. Indicate the balances in the three stockholders? equity accounts after the stock dividend shares have been distributed.
Common stock $589,050Paid-in capital in excess of par - common stock $83,550Retained earnings $625,400Explanation:
since it is a "small" stock dividend, it will be carried out at market value and not at par value.
the total number of stocks = $535,500 / $7 par value = 76,500 stocks
total transaction = 76,500 stocks x $14 x 10% = $107,100
the journal entry should be:
Dr Retained earnings 107,000
Cr Common stock 53,550
Cr Paid in capital in excess of par value 53,550
total common stock account = $535,500 + $53,550 = $589,050 / 84,150 stocks = $7 per stock
General Discussion Questions What should business leaders take away from this scandal? What could Wells Fargo have done differently to avert this cultural meltdown? Practice of Ethical Leadership Questions Modeling Character and Values: What values did Stumpf model to Wells Fargo employees? What impact might that have on the culture of Wells Fargo? Encouraging Ethical Conduct: What behaviors can leaders model in order to encourage ethical behavior in their organization? Designing Ethical Systems: Wells Fargo did have some systems in place, like the ethics hotline, to report unethical behavior, but it didn’t work. Why do you think that is? What steps can leaders take to design systems that encourage ethical behavior rather than unethical behavior?
Answer:
From this scandal, business leaders should learn to:
(a) not encourage unethical practices directly or indirectly among employees.
(b) not set unrealistic targets for employees to achieve within an unrealistic time-frame.
(c) Institute measures to prevent unethical practices.
(d) Encourage honest employees to grow in the company.
(e) Honor adherence to regulatory framework as applicable to the company.
Wells Fargo could have done differently in these manner:
(a) When the first incident of aggressive sales practice was reported in year 2004 with identified incidents from year 2002, they could have instituted measures to prevent recurrence of such incidents. Some of the practical and workable measures are enumerated in succeeding paragraphs.
(b) Convene a meeting of senior managers to provide them with appropriate guidelines so as not to repeat such incidents.
(c) Instruct senior managers to advise their juniors to refrain from any such aggressive sales practices.
(d) Investigate to determine the extent of impact of aggressive sales practices as on 2004 and take remedial actions against those who are engaged in such activities.
(e) Promote the whistle-blower method of instantaneous reporting of an incident by anyone who has witnessed such an incident.
(f) Reward employees having honesty, integrity and moral values.
Practice of Ethical Leadership Questions
CEO John Stumpf’s model was to aggressively cross-sell products by any means. While leading the bank in doing so, he had compromised on the minimum value system that any financial institution or any company must adhere to. The cultural impact that had on Wells Fargo is listed below:
(a) Employees were pressurized for resorting to unethical practices.
(b) Employees reporting matters on unethical practices were punished.
(c) The performance management/ measurement system, in effect, encouraged dishonesty in employees.
(d) The compensation system was skewed in favor of bonus.
(e) Since, the supervisors pressurized employees, the structural dishonesty within the organization was evident.
Leaders can encourage ethical behavior in their organization in the following manner:
(a) Demonstrate personal ethics in their words and actions.
(b) Instruct senior managers to strictly adhere to the ethical norms to be followed.
(c) Instruct senior managers to communicate company’s ethical agenda to the supervisors/ other junior employees within their departments/ sections.(d) Monitor adherence to / violation of ethical practices on a regular basis.(e) Institute immediate remedial measures to prevent recurrence of any unethical practice.
(f) Encourage employees to report incidents of unethical practices.
(g) Reward honest and hardworking employees.
Well Fargo’s system of ensuring Ethical System within the bank, such as ethics hotline to report unethical behavior did not work because, the top management, led by the CEO did not pay any importance to prevention of unethical practices. Rather, they steered in an organized and structured manner to promote unethical practices.
Leaders can take the following steps to design systems that encourage ethical behavior:
(a) The top leaders must “think ethics”, “speak ethics” and “act ethics”. This is the top most fundamental step in the direction of designing systems to encourage ethical behavior.
(b) Matters on “what is ethical and what is not ethical” must be circulated across the organization.
(c) Periodic briefing must take place from the top management to the junior most employees in a structured and organized manner.
(d) Encouragement on reporting (whistle-blowing) incidents of unethical practices must be given.
(e) System of rewarding honest and hardworking employees must be put in place.
Sam was injured in an accident, and the insurance company has offered him the choice of $25,000 per year for 15 years, with the first payment being made today, or a lump sum. If a fair return is 7.5%, how large must the lump sum be to leave him as well off financially as with the annuity
Answer:
The lump sum be of $237,228.84
Explanation:
In order to calculate how large must the lump sum be we would have to use and calculate the formula of Present value of annuity due as follows:
Present value of annuity due=(1+interest rate)*Annuity[1-(1+interest rate)^-time period]/rate
Present value of annuity due=(1+0.075)*$25,000[1-(1.075)^-15]/0.075
Present value of annuity due=$25,000*9.489153726
Present value of annuity due=$237,228.84(Approx)
The lump sum be of $237,228.84
Common stocks typically have which of the following that bonds do NOT have?
I. Voting rights
II. Fixed cash flows
III. Set maturity date
IV. Tax deductibility of cash flows to investors
a) i only
b) i,ii and iv only
c) ii,iii and iv only
d) iv only
e) i, ii,iii and iv
Answer:
The correct option is A, i only
Explanation:
The voting right attached to common stock means that common stockholders being the original owners of the company have the right to attend the company annual general meetings and vote on issues concerning the efficient running of the company as well as election of board of directors.
Fixed cash flows of annual or semiannual coupon interest, set maturity date including the tax deductibility of cash flows to investors are all features of bonds.
Use the starting balance sheet, income statement, and the list of changes to answer the question. Gulf Shipping Company Balance Sheet As of December 31, 2019 (amounts in thousands) Cash 38,000 Liabilities 22,000 Other Assets 27,000 Equity 43,000 Total Assets 65,000 Total Liabilities & Equity 65,000 Gulf Shipping Company Income Statement January 1 to March 31, 2020 (amounts in thousands) Revenue 5,100 Expenses 2,800 Net Income 2,300 Between January 1 and March 31, 2020: 1. Cash decreases by $100,000 2. Other Assets do not change 3. Paid-In Capital does not change 4. Dividends paid of $400,000 What is the value for Liabilities on March 31, 2020?
Answer:
the value for Liabilities on March 31, 2020 is $22,000
Explanation:
Liabilities are current obligations of the entity that arose as a result of past events, the settlement of which will results in the outflow of cash from the entity.
To calculate the value for Liabilities on March 31, 2020, make adjustments to the liability balance that exists at the start of the year with movement that qualify as liabilities as defined above.
Opening balance as at 1 January 2020 = $22,000
Movements in liabilities = $0
Balance as at March 31, 2020 = $22,000
Conclusion :
The liabilities value on March 31, 2020 remains at $22,000
In game theory, a Nash equilibrium occurs when: Group of answer choices Both players are incented to "cheat" to improve their positions Neither player can improve their position Nether player has a dominate strategy Two or more players collude on pricing
Answer:
Neither player can improve their position
Explanation:
Game theory is the method of modeling the strategic engagement of multiple players in a situation that involves rules and results.
Nash equilibrium is a term of game theory in which the optimum result of a game is one in which no participant has an incentive to diverge from his selective strategy after examining the selection of an opponent
Therefore according to the given situation, the second option is correct
Find the mean, median and mode for the above set of data
Answer:
a. Mean = 35.2 ≈ 35
b. Median = 35.6 ≈ 36
c. Mode = 36.6 ≈ 37
Step-by-step Explanation:
==>Given:
Class of ages in yrs
No. of cases of each class = f
Midpoint of each class = x
Product of midpoint and no. of cases of each class = fx
==>Required:
a. Mean
b. Median
c. Mode
==>SOLUTION:
a. Mean = (Σfx)/Σf
Σf = sum of no. of cases = 5+10+20+22+13+5 = 75
Σfx = 47.5+195+590+869+643.5+297.5 = 2,642.5
Mean = 2,642.5/75 = 35.2 ≈ 35
b. Median = Lm + [((Σf/2) - Cfb)/fm]Cw
Our median is between the 37th and the 38th term, which can be found in the class interval 35-44. This is our median class.
Lm = Lower class boundary of the median class = lower limit of the Medina class + upper limit of the class before the median class ÷ 2 = (35+34)/2 = 34.5
Σf/2 = 75/2 = 37.5
Cfb = Cumulative frequency of class before the median class = 5+10+20 = 35
fm = frequency of the Medina class = 22
Cw = Class width = upper class boundary - lower class boundary = 44.5-34.5 = 10
Median = 34.5 + [(37.5-35)/22] × 10
= 34.5 + [2.5/22] × 10
= 34.5 + [25/22]
= 34.5 + 1.1
= 35.6 ≈ 36
c. Mode = Lm + [∆¹/(∆¹+∆²)]Cw
Modal class = (35-44) [i.e. the class with the highest frequency, which is where our mode falls in]
Lm = lower class boundary of the modal class = lower limit of the modal class + upper limit of the class before the modal class ÷ 2 = (35+34)/2 = 34.5
∆¹ = difference between the frequency of the modal class & the frequency of the class before the modal class = 22 - 20 = 2
∆² = difference between the frequency of the modal class & the frequency of the class after the modal class = 22 - 13 = 9
Cw == Upper class boundary - Lower class boundary = 44.5 - 34.5 = 10
Mode = 34.5 + [2/(2+9)] × 10
= 34.5 + [2/11] × 10
= 34.5 + [20/11]
= 34.5 + 1.8
Mode = 36.6 ≈ 37
If he goes to college, he will spend $22,000 on tuition, $11,000 on room and board, and $1,700 on books. If he does not go to college, he will earn $12,000 working in a store and spend $6,000 on room and board. Taio's cost of going to college is
Answer:
$40,700
Explanation:
To determine Taio's cost of going to college you need to find the economic cost that involves all the costs that you need to cover to receive a benefit and the opportunity costs that refer to what you would have received if you had chosen a different alternative. According to this, Taio's cost is equal to all the acounting costs related to going to college plus the opportunity costs that are the benefits lost from the other option which was not going to college.
Accounting costs= $22,000+$11,000+$1,700= $34,700
Opportunity costs= $12,000-$6,000= $6,000
Taio's cost of going to college is equal to the acount costs plus the opportunity costs:
$34,700+$6,000= $40,700
A company reports the following beginning inventory and two purchases for the month of January. On January 26, the company sells 350 units. Ending inventory at January 31 totals 150 units. Units Unit Cost Beginning inventory on January 1 320 $ 3.00 Purchase on January 9 80 3.20 Purchase on January 25 100 3.34 Required: Assume the periodic inventory system is used. Determine the costs assigned to ending inventory when costs are assigned based on the FIFO method.
Answer:
494.00
Explanation:
The computation of the cost assigned to ending inventory using the FIFO method is shown below:
Particulars Units Unit Cost Amount
Purchase on January 9 50 3.20 160.00
Purchase on January 25 100 3.34 334.00
Cost of Ending Inventory 150.00 494.00
Since there are 150 units in the ending inventory so we take 50 units at $3.20 and the rest 100 units at 3.34 so that the cost assigned to the ending inventory could come
Waterway Industries has equipment with a carrying amount of $2510000. The expected future net cash flows from the equipment are $2545000, and its fair value is $2043000. The equipment is expected to be used in operations in the future. What amount (if any) should Waterway report as an impairment to its equipment
Answer:
No impairment
Explanation:
Since the future net cash flows are still recoverable and they are higher than carrying amount, none needs to be reported
Every organization needs some degree of flexibility and standardization. True False Being overly committed to following rules can harm an organization and keep it from growing. True False Every organization needs either a degree of ________ to adapt to new situations or some degree of ________ to make routine tasks and decisions as efficient and effective as possible. standardization; flexibility culture; vision flexibility; standardization structure; design
Answer:
1. True: Every organization needs some degree of flexibility and standardization.
2. True: Being overly committed to following rules can harm an organization and keep it from growing.
3. flexibility; standardization.
Explanation:
It is really important and necessary that all organization have some degree of flexibility and standardization. Every organization is expected to be flexible, in order to be able to effectively manage potential changes or challenges that arises in business. They should also be standardized, by having proper policies, strategies and structure for the purpose of running the business smoothly and efficiently.
However, if an organization is overly committed to following rules, this can cause harm to it's business operations and thereby hindering its growth and development.
Hence, some degree of flexibility is needed in every organization in order to adapt to new situations or some degree of standardization to make routine tasks and decisions as efficient and effective as possible.
A company purchased a computer system at a cost of $25,000. The estimated useful life is 6 years, and the estimated residual value is $8,000. Assuming the company uses the double-declining-balance method, what is the depreciation expense for the second year
Answer:
$5,102
Explanation:
Double declining Method
Cost $ 25,000
B Residual Value $2,000
C = A - B Depreciable base $23,000
D Life [in years] 7
E = C/D Annual SLM depreciation $3,286
F = E/C SLM Rate 14.29%
G = F x 2 DDB Rate 28.57%
.
Depreciation schedule-Double declining
Year Beginning Book Value Depreciation rate Depreciation expense Accumulated Depreciation Ending Book Value
1 $25,000 , 28.57%, $7,143 , $7,143 $17,857
2 $17,857, 28.57%, $ 5,102 , $ 12,245, $12,755
g A stock will issue a dividend of $20 one year from today. Dividends will shrink by 3% per year for the next two years after that, and then remain constant forever. Find the current price of one share of this stock, given an effective annual rate of 6%.
Answer:
Current price = $341.943
Explanation:
The Dividend Valuation Model is a technique used to value the worth of an asset. According to this model, the worth of an asset is the sum of the present values of its future cash flows discounted at the required rate of return.
PV dividend in year 1 = 20 × 1.03^(-1)= 19.41747573
PV of dividend in year 2 = 97%× 20 × 1,03^(-2)= 18.28636064
PV of dividend in year 3 = 97%× 97%× 20× 1.03^(-3) = 17.22113575
PV of dividend from year 4 and beyond
This will be done in two steps
PV (in year 3 terms
(97%× 97%× 20× 1.03^(-3))/0.06 =313.6333333
PV in year o terms
PV = A/r
A= 313.63, r = 6%
313.63× 1.03^(-3)= 287.0189291
Price of stock = 19.41 +18.28 + 17.221 + 17.221= 341.943
Current price = $341.943
Orange Corporation acquired new office furniture on August 15, 2018, for $130,000. Orange does not elect immediate expensing under § 179. Orange claims any available additional first-year depreciation. If required, round your answer to the nearest dollar.
a. Determine Orange's cost recovery for 2018
The office furniture is classified as a seven-year class of property for MACRS. If bonus depreciation is elected, Orange's deduction is
b. Determine Orange's cost recovery for 2018 if Orange decided to only use $52,000 of bonus depreciation and normal MACRS on the balance of the acquisition cost.
Answer:
Explanation:
a) The asset is purchased in 2018.
In 2018, bonus depreciation % has been increased from 50% to 100%. If bonus depreciation is elected Orange Corporation can deduct 100% of Purchase cost of $130,000.
The office furniture is classified as seven year class of property for MACRs. If bonus depreciation is elected Orange's deduction is $130,000
= $130,000
b) if Orange decides to use only $52,000 of bonus depreciation, it can claim depreciation (MACRS) on balance amount of acquisition cost.
Cost Recovery for 2018:
Bonus depreciation = $52,000
MACRS Depreciation [($130,000 - $52,000) * 14.29%]= $11,146.20
Hence, Cost Recovery for 2018 = Bonus depreciation + MACRS Depreciation
= $52,000 + $11,146.20
= $63,146 (rounded off to nearest dollar)
Suppose that there is a French shipbuilder that imports American made aluminum for parts in its ships. The French shipbuilder needs to purchase aluminum from the American producer for $100,000. Question: At the equilibrium exchange rate, how much does it cost to purchase $100,000 worth of aluminum from the American producer
Answer:
€67,000
Explanation:
The computation o the cost is shown below:
But before that first we have to determine the exchange rate at which the quantity demanded equal to quantity supplies
As we can see that from the table $1.5 per euro exchange rate, the quantity demanded equal to quantity supplied
That means € 1 = $ 1.5
So,
$1 = € 1 ÷ 1.5
So,
Euro exchange rate = €0.67 per dollar
Now
Worth of exchange is
= $100,000 × € 0.67 per dollar
= €67,000
(c)
Your answer is partially correct. Try again.
Prepare a CVP income statement for current operations and after Mary's changes are introduced.
v
MARIGOLD SHOE STORE
CVP Income Statement
Current
New
Sales
$800,000
$912,000
जी
Variable Expenses
$480,000
$576,00
Contribution Margin
$320,000
$336,000
Fixed Expenses
$270,000
$294,000
Net Income/(Loss)
$50,000
$42,000
$
Would you make the changes suggested?
No
Answer:
The changes suggested increase income by 16,000 therefore is a good idea to made the changes
Explanation:
Your Mistake is that fixed expenses should remain constant with a sales increase
Current New
Sales $800,000 $ 912,000
Variable $ 480,000 $ 576,000
Contribution $ 320,000 $ 336,000
Fixed $ 270,000 $ 270,000
Net Income $ 50,000 $ 66,000
By law, the financial records of publicly held companies are required to be:________.
A) Managed by an accounting department of at least five CPAs.
B) Summarized in the employee manual for new hires.
C) Reviewed quarterly by the IRS.
D) Audited by a certified professional accounting firm.
Answer:
D) Audited by a certified professional accounting firm.
Explanation:
The Securities and Exchange Commission (SEC) requires that publicly traded corporations file audited quarterly financial reports and annual audited financial reports. The Sarbanes-Oxley Act (2002) is the law that established the current external auditing rules imposed by the SEC. It also established legal responsibilities for CEOs and CFOs regarding the financial statements. If they fail to meet them or provide false information, they may face criminal charges and end in jail.
Warnerwoods Company uses a perpetual inventory system. It entered into the following purchases and sales transactions for March.
Date Activiies Units Acquired at Cost Units Sold at Recall
Mar. 1 Beginning inventory 60 units $50.20 per unit
Mar. 5 Purchase 205 units $55.20 per unit
Mar. 9 Sales 220 units $85.20 per unit
Mar. 18 Purchase 65 units $60.20 per unit
Mar. 25 Purchase 110 units $62.20 per unit
Mar. 29 Sales 90 units $95.20 units
Total 440 units 310 units
Required:
1. Compute cost of goods available for sale and the number of units available for sale.
2. Compute the number of units in ending inventory.
3. Compute the cost assigned to ending inventory using (a) FIFO, (b) LIFO, (c) weighted average, and (d) specific identification. For specific identification, units sold consist of 600 units from beginning inventory, 300 from the February 10 purchase, 200 from the March 13 purchase, 50 from the August 21 purchase, and 250 from the September 5 purchase.
4. Compute gross profit earned by the company for each of the four costing methods.
Answer:
Warnerwoods Company
Perpetual Inventory System:
1. Cost of Goods Available for Sale and Units Available for Sale:
Mar. 1 Beginning inventory 60 units $50.20 per unit $3,012
Mar. 5 Purchase 205 units $55.20 per unit 11,316
Mar. 18 Purchase 65 units $60.20 per unit 3,913
Mar. 25 Purchase 110 units $62.20 per unit 6,842
Available for Sale 440 units Cost = $25,083
2. The number of units in ending inventory:
Units Available for Sale 440
Subtract units sold 310
Ending Inventory 130 units
3. The Cost assigned to ending inventory using:
a) FIFO: Ending Inventory
20 units at $60.20 per unit = $1,204
110 units at $62.20 per unit = 6,842
Ending Inventory $8,046
b) LIFO: Ending Inventory
Mar. 1 Beginning Inventory 45 units $50.20 per unit = $2,259
Mar. 18 Purchase 65 units $60.20 per unit = 3,913
Mar. 25 Purchase 20 units $62.20 per unit = 1,244
Ending Inventory 130 units Cost = $7,416
c) Weighted Average: Ending Inventory
Cost of Goods Available for Sale divided by units available for sale
= $25,083/440 = $57 per unit
Ending Inventory = $57 x 130 = $7,410
d) Specific Identification: Ending Inventory
This cannot be answered from the information provided in the question:
4. Gross Profit for each costing method:
FIFO LIFO WEIGHTED SPECIFIC
AVERAGE IDENTIFICATION
Sales $27,312 $27,312 $27,312 $27,312
Cost of Sales 17,037 17,667 17,670
Gross Profit $10,275 $9,645 $9,642
Explanation:
a) Sales:
Mar. 9 Sales 220 units $85.20 per unit = $18,744
Mar. 29 Sales 90 units $95.20 units = 8,568
Total = $27,312
b) Cost of Sales:
i) FIFO
Mar 1. Beginning inventory 60 units $50.20 per unit = $3,012
Mar. 5 Purchase 205 units $55.20 per unit = 11,316
Mar. 18 Purchase 45 units $60.20 = 2,709
Cost of Sales = $17,037
ii) LIFO:
Mar. 1 Beginning inventory 15 units $50.20 per unit = $753
Mar. 5 Purchase 205 units $55.20 per unit = $11,316
Mar. 25 Purchase 90 units $62.20 per unit = $5,598
Cost of Sales = $17,667
iii) Weighted Average:
Cost of Sales = $57 x 310 = $17,670
c) Calculations under the specific identification cannot be made because of the figures given under this method.
Cost of goods available for sale = 440 units and $25,071
Number of units in ending inventory is 130 units.
1. The calculation of compute cost of goods available for sale and the number of units available for sale is;
Beginning inventory cost = 60 units x $50.20 = $3,012Purchase on March 5 cost = 205 units x $55.20 = $11,304Purchase on March 18 cost = 65 units x $60.20 = $3,913Purchase on March 25 cost = 110 units x $62.20 = $6,842Cost of goods available for sale = 440 units and $25,071
2. Number of units in ending inventory:
Units sold = 220 + 90 Units sold = 310 unitsUnits in ending inventory = total available for sale - units sold Units in ending inventory = 440 - 310 = 130 unitsNumber of units in ending inventory is 130 units.
3. Compute the cost assigned to ending inventory
4. Compute gross profit earned by the company for each of the four costing methods.
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Hutter Corporation declared a $0.50 per share cash dividend on its common shares. The company has 35,000 shares authorized, 18,000 shares issued, and 14,000 shares of common stock outstanding. The journal entry to record the dividend declaration is:
Answer:
Journal Entry
Dr. Dividend $7,000
Cr. Dividend Payable $7,000
Explanation:
Dividend are only paid to the outstanding share. Outstanding shares re those share is in held by the stockholders of the company at a specific time period.
Authorised share are those shares which a company can issue in the market legally.
Issued shares are those share which have been issued by the company.
Dividend Declared = Outstanding shares x dividend per share.
Dividend Declared = 14,000 shares x $0.5 = $7,000
Paul Swanson has an opportunity to acquire a franchise from The Yogurt Place, Inc., to dispense frozen yogurt products under The Yogurt Place name. Mr. Swanson has assembled the following information relating to the franchise:
a. A suitable location in a large shopping mall can be rented for $4,500 per month.
b. Remodeling and necessary equipment would cost $378,000. The equipment would have a 10-year life and a $37,800 salvage value. Straight-line depreciation would be used, and the salvage value would be considered in computing depreciation.
c. Based on similar outlets elsewhere, Mr. Swanson estimates that sales would total $480,000 per year. Ingredients would cost 20% of sales.
d. Operating costs would include $88,000 per year for salaries, $5,300 per year for insurance, and $45,000 per year for utilities. In addition, Mr. Swanson would have to pay a commission to The Yogurt Place, Inc., of 13.0% of sales.
Required:
1. Prepare a contribution format income statement that shows the expected net operating income each year from the franchise outlet
2-a. Compute the simple rate of return promised by the outlet
2-b. If Mr. Swanson requires a simple rate of return of at least 21%, should he acquire the franchise?
3-a. Compute the payback period on the outlet
3-b. If Mr. Swanson wants a payback of three years or less, will he acquire the franchise?
Answer:
1.) check attached picture
2a)Simple rate of return = 25.2%
2b) Yes
3a)2.92 years
3b) Yes
Explanation:
Kindly check attached picture
Consider two countries, Alpha and Beta. In Alpha, real GDP per capita is $6,000. In Beta, real GDP per capita is $9,000. Based on the economic growth model, what would you predict about the growth rates in real GDP per capita across these two countries
Answer:
The growth rate of real GDP per capita will be higher in Alpha than it is in Beta
Explanation:
If we are to based on the economic growth model, what I would predict about the growth rates in real GDP per capita across ALPA and BETA is that when both countries are been compared with one another The growth rate of real GDP per capita will be higher in Alpha than it is in Beta because the Alpha real GDP per capita is said to be $6,000 while Beta real GDP per capita is said to be $9,000 which means growth rate of real GDP per capita will be much more higher in Alpha than it is in Beta.
The independent cases are listed below includes all balance sheet accounts related to operating activities: Net income Depreciation expense Accounts receivable increae 100,000 (200,000) (20,000) Case ACase B Case C $310,000 15,000 $420,000 40,000 150,000 80,000 (decrease) Inventory increase (decrease) Accounts payable increase (50,000) (50,000) 120,00070,000 60,000 (220,000) (40,000) 35,000 50,000 decrease) Accrued liabilities increase (decrease) Show the operating activities section of cash flows for each of the given cases (Amounts to be deducted should be indicated with a minus sign.) Case A Case B Case C Net Income Adjustments to Reconcile Net Income to net Cash provided by operating activities Depreciation Changes in Assets and Liabilities Accounts Receivable Inventory Accounts Payable Accrued Liabilities Net Cash Provided by OperatingActivities
Answer: Please see below
Explanation: The values from the question are scattered, but here is how they should appear
Case A Case B Case C
Net income $310,000 15,000 $420,000
Depreciation expense 40,000 150,000 80,000
Accounts receivable increase
(decrease 100,000 (200,000) (20,000)
Inventory increase (decrease) (50,000) 35,000 50,000
Accounts payable increase (50,000) 120,000 70,000
Accrued liabilities increase
(decrease) 60,000 (220,000) (40,000)
To calculate the operating activities section of cash flows for each of the given cases,
we use the Indirect method formula
Net cash flow from operating actvities = Net Income + Non-Cash Expenses – Increase in Working Capital
Net cash flow from operating actvities =Net Income +/- Changes in Assets & Liabilities + Non-Cash Expenses
Net cash flow from operating actvities = Net Income + Depreciation + Stock Based Compensation + Deferred Tax + Other Non Cash Items – Increase in Accounts Receivable – Increase in Inventory + Increase in Accounts Payable + Increase in Accrued Expenses + Increase in Deferred Revenue
Following the formulae above, we can determine what expense should be added or subtracted to give the operating activities of cash flow below as
Case A Case B Case C
Net Income $310,000 15,000 $420,000
Net Income Adjustments to Reconcile Net Income to net Cash provided by operating activities
Depreciation 40,000 150,000 80,000
Changes in Assets and Liabilities
Accounts Receivable - 100,000 200,000 20,000
Inventory 50,000 -35,000 - 50,000
Accounts Payable -50,000 120,000 70,000
Accrued Liabilities 60,000 - 220,000 -40,000
Net Cash Provided by Operating Activities
$310,000 $230,000 $500,000
Annual production and sales level of Product A is 34,300 units, and the annual production and sales level of Product B is 69,550 units. What is the approximate overhead cost per unit of Product A under activity-based costing?
Answer:
$3.00
Explanation:
Calaculation of the approximate overhead cost per unit of Product A under activity-based costing:
The first step is to calculate for the Activity 1 allocated to Product A line which is :
$87,000 × 3,000/5,800
=$261,000,000/5,800
=$45,000
The second step is to calaculate for Activity 2 allocated to Product A line which is :
$62,000 × 4,500/10,000
$279,000,000/10,000
=$27,900
The third step is to calculate for Activity 3 allocated to Product A line which is :
$93,000 × 2,500/7,750
=$232,500,000/7,750
=$30,000
The total overhead allocated to Product A
$45,000+$30,000+$27,900
= $102,900
Overhead per unit of Product A: $102,900/Annual production of 34,300 units
= $3.00
Therefore the approximate overhead cost per unit of Product A under activity-based costing will be $3.00
