Answer: Please refer to Explanation
Explanation:
When Evaluating a country's attractiveness for investment, there are several factors that should be evaluated. Key amongst them are, Benefits, Costs and Risks.
Under Benefits, the economy is evaluated based on the benefits it brings to the table. It's strengths and Opportunities. The goal is to see if these benefits present the company with adequate enough incentives to want to invest.
Under Costs, the cost of setting up and thriving is evaluated. What does the company have to pay and who do they have to pay it to in order to set up properly.
Under Threats, the factors that could adversely affect the company as a result of Investing in the country are evaluated. This is very important to know so that if need be, contingencies can be established.
Classifying the above.
1. Middle-class population growth potential. EVALUATE BENEFITS.
The middle class are the main purchasers of goods and services in the economy. In evaluating benefits the potential growth rate of the middle class should be evaluated.
2. First-mover advantages. EVALUATE BENEFITS.
Evaluating the potential benefits to be had from investing first in a country is part of Benefits Evaluation.
3. Bribe payments. EVALUATE COSTS.
Bribery payments are a cost when it comes to setting up in corrupt nations. They need to be evaluated as costs.
4. Unexpected political change. EVALUATE RISKS.
Under the evaluation of risks, this should be evaluated because a new Political leadership could have a different attitude to the company and this is a threat.
5. Infrastructure issues. EVALUATE COSTS.
Under the evaluation of cost there must be an evaluation of infrastructural issues in the country. If there are infrastructural challenges, the cost of setting up will be higher because depending on the infrastructure you'd have to bring in infrastructure from other areas and that would be expensive.
6. Resolving contract disputes. EVALUATE COSTS.
What are the costs of resolving contract disputes in the country. If they are favourable then the country is fine.
7. Free market economy. EVALUATE BENEFITS.
A free Market Economy is very useful to Entreprise. The type of economy needs to be evaluated therefore to see if it is a Free Market Economy that can benefit the company.
8. Economic uncertainty. EVALUATE RISKS.
How stable is the economy of the country in question. A country with an unstable Economy is one with a lot of Uncertainty and any company going in there will have to risk suffering losses if the Economy goes through peril.
At the end of 2021, Larkspur Co. has accounts receivable of $653,700 and an allowance for doubtful accounts of $24,200. On January 24, 2022, it is learned that the company’s receivable from Madonna Inc. is not collectible and therefore management authorizes a write-off of $4,245.
A) Prepare the journal entry to record the write-off.
Credit
Enter an account title Enter a debit amount Enter a credit amount
What is the cash realizable value of the accounts receivable before the write-off and after the write-off?
Before Write-Off After Write-Off
Cash realizable value $ $
Answer:
January 24, 2022, Madonna Inc.'c account is written off
Dr Allowance for doubtful accounts 4,245
Cr Accounts receivable 4,245
the cash realizable value of the accounts receivable account:
before the write off = $653,700 - $24,200 = $629,500after the write off = ($653,700 - $4,245) - ($24,300 - $4,245) = $629,500The net balance of the account does not change because the allowance for doubtful accounts is a contra asset account that already decreased the accounts receivable balance.
Portions of the financial statements for Peach Computer are provided below.PEACH COMPUTERIncome StatementFor the year ended December 31, 2021Net sales $ 1,875,000 Expenses: Cost of goods sold $ 1,080,000 Operating expenses 590,000 Depreciation expense 53,000 Income tax expense 43,000 Total expens 1,766,000 Net income $ 109,000 PEACH COMPUTERSelected Balance Sheet DataDecember 312021 2020 Increase (I)orDecrease (D)Cash $ 105,000 $ 86,500 $ 18,500 (I)Accounts receivable 45,300 50,500 5,200 (D)Inventory 78,000 56,500 21,500 (I)Prepaid rent 3,300 5,600 2,300 (D)Accounts payable 48,000 38,500 9,500 (I)Income tax payable 5,300 11,500 6,200 (D)Required:Prepare the operating activities section of the statement of cash flows for Peach Computer using the direct method. (List cash outflows and any decrease in cash as negative amounts.)
Answer:
Cash flow from Operating Activities
Cash Receipts from Customers $1,880,200
Cash Paid to Suppliers and Employees ($1,679,700)
Cash Generated from Operations $ 200,500
Income taxes paid ($49,200)
Cash flow from Operating Activities $ 151,300
Explanation:
Cash Receipts from Customers Calculation
Net sales $ 1,875,000
Add Decrease in Accounts receivable $ 5,200
Cash Receipts from Customers $1,880,200
Cash Paid to Suppliers and Employees
Cost of goods sold $ 1,080,000
Add Operating Expenses
Operating expenses $ 590,000
$1,670,000
Increase in Inventory $ 21,500
Decrease in Prepaid rent ($ 2,300)
Increase in Accounts payable ($ 9,500)
Cash Paid to Suppliers and Employees $1,679,700
Income taxes paid Calculation
Open an Income taxes Payable T - Account as follows :
Debits :
Closing Balance $ 5,300
Cash (Balancing figure) $49,200
Totals $54,500
Credit :
Opening Balance $ 11,500
Income Statement $43,000
Totals $54,500
Sunk costs: Multiple Choice Have already been incurred as a result of past actions. Vary among the alternative courses of action being considered. Are benefits that could have been obtained by following another course of action. Result from unfavorable cost variances.
Answer:
Have already been incurred as a result of past actions.
Explanation:
This form of cost is detailed to be incurred by a company in its past or during its long run and it nothing can be done to change it or it cannot be averted or recovered in the future and proceeding run time of the said company.
Once the company's money is spent, that money is considered a sunk cost. Regardless of what money is spent on, sunk cost are dollars already spent and permanently lost. Sunk costs cannot be refunded or recovered. Monies that provides column or a sunk cost does not really base on a particular spending; as it ranges from different sectoral spendings of the company involved.
Requirements
1. Record each transaction in the journal using the following account titles: Cash; Accounts Receivable; Office Supplies; Prepaid Insurance; Land; Furniture; Accounts Payable; Utilities Payable; Unearned Revenue; Common Stock; Dividends; Service Revenue; Salaries Expense; Rent Expense; and Utilities Expense. Explanations are not required.
2. T-accounts have been opened for each of the accounts. Post the journal entries to the T-accounts, using transaction dates as ledger accounts. Label the balance of each account Bal posting references in the ledger accounts.
3. Prepare the trial balance of Beth Stewart, Designer, as of November 30, 2018.
Nov.1 Received $41,000 cash and issued common stock to Stewart Nov. 1
4 Purchased office supplies, $1,200, and furniture, $2,300, on account.
6 Performed services for a law firm and received $2,100 cash.
7 Paid $27,000 cash to acquire land to be used in operations.
10 Performed services for a hotel and received its promise to pay the $800 within one week.
14 November 4 on account Paid for the furniture purchased 14 on.
15 Paid assistant's semimonthly salary, $1,470.
17 Received cash on account, $500.
20 Prepared a design for a school on account, $680.
25 Received $1,900 cash for design services to be performed in December.
28 Received $3,100 cash for consulting with Plummer & Gordon.
29 Paid $840 cash for a 12-month insurance policy starting on December 1.
30 Paid assistant's semimonthly salary, $1,470.
30 Paid monthly rent expense, $650.
30 Received a bill for utilities, $650. The bill will be paid next month
30 Paid cash dividends of $2,800.
Post the journal entries to the T-accounts, using transaction dates as posting references in the ledger accounts. Label the balance of each account Bal.We will post to the accounts one transaction at a time. Begin by posting the events from the 1st.July1: Yangcontributed $64,000 cash to the business in exchange for Common Stock.
Date Accounts Debit Credit
Jul.1 Cash 68,000
Commom Stock 68,000
Journal entries:
Nov. 1, common stocks issued
Dr Cash 41,000
Cr Common stock 41,000
Nov. 4, office supplies and furniture purchased
Dr Office supplies 1,200
Dr Furniture 2,300
Cr Accounts payable 3,500
Nov. 6, service revenue
Dr Cash 2,100
Cr Service revenue 2,100
Nov. 7, land purchased
Dr Land 27,000
Cr Cash 27,000
Nov. 10, service revenue
Dr Accounts receivable 800
Cr Service revenue 800
Nov. 14, payment of furniture
Dr Accounts payable 2,300
Cr Cash 2,300
Nov. 15, wages expense
Dr Wages expense 1,470
Cr Cash 1,470
Nov. 17, collection of accounts receivable
Dr Cash 500
Cr Accounts receivable 500
Nov. 20, service revenue
Dr Accounts receivable 680
Cr Service revenue 680
Nov. 25, received cash in advance
Dr Cash 1,900
Cr Unearned revenue 1,900
Nov. 28, service revenue
Dr Cash 3,100
Cr Service revenue 3,100
Nov. 29, purchase prepaid insurance
Dr Prepaid insurance 840
Cr Cash 840
Nov. 30, wages expense
Dr Wages expense 1,470
Cr Cash 1,470
Nov. 30, rent expense
Dr Rent expense 650
Cr Cash 650
Nov. 30, utilities expense
Dr Utilities expense 650
Cr Accounts payable 650
Nov. 30, dividends distributed
Dr Retained earnings 2,800
Cr Dividends payable 2,800
Dr Dividends payable 2,800
Cr Cash 2,800
Since there is not enough space here, I prepared an excel spreadsheet with the T-accounts.
In order to prepare a trial balance sheet, I must first prepare an Income Statement:
Service revenue $6,680
Wages expense ($2,940)
Rent expense ($650)
Utilities expense ($650)
Net income: $2,440
Retained earnings = $2,440 (net income) - $2,800 (dividends) = ($360)
STEWART CO.
BALANCE SHEET
NOV. 30, 2018
Assets:
Cash $12,070
Accounts receivable $980
Prepaid insurance $840
Office supplies $1,200
Furniture $2,300
Land $27,000
Total assets: $44,390
Liabilities and stockholders' Equity:
Accounts payable $1,850
Unearned revenue $1,900
Common stock $41,000
Retained earnings ($360)
Total liabilities and stockholders' equity: $44,390
Entries for Issuing Bonds and Amortizing Discount by Straight-Line Method On the first day of its fiscal year, Chin Company issued $16,600,000 of five-year, 11% bonds to finance its operations of producing and selling home improvement products. Interest is payable semiannually. The bonds were issued at a market (effective) interest rate of 12%, resulting in Chin Company receiving cash of $15,989,036. a. Journalize the entries to record the following: Issuance of the bonds. First semiannual interest payment. The bond discount amortization, using the straight-line method, is combined with the semiannual interest payment. (Round your answer to the nearest dollar.) Second semiannual interest payment. The bond discount amortization, using the straight-line method, is combined with the semiannual interest payment. (Round your answer to the nearest dollar.) For a compound transaction, if an amount box does not require an entry, leave it blank. Round your answers to the nearest dollar.
Answer:
The answer to the question is as attached
Explanation:
a. The total credit matches the debit in a total of $16,600,000
b. Cash $$15989036
Discount on bonds payable (16600000 -15989036) $610964
Bonds payable $16600000
(To record issuance of bonds)
b) Interest expense 825000+610964= $1435964
Discount on bonds payable 610964/11= $55542
Cash 16600000*11%*6/12= $913000
(To record discount amortized and interest paid)
c) Interest expense 825000+55542= $880542
Discount on bonds payable 610964/11= $55542
Cash 16600000*11%*6/12= $913000
Of the following steps of the Accounting Cycle, which step should be completed first? a. Transactions are posted to the general ledger. b. Closing entries are journalized and posted to the ledger. c. Adjusting entries are journalized and posted to the general ledger. d. Financial statements are prepared.
Answer:
a. Transactions are posted to the general ledger.
Explanation:
Accounting cycle is an arrangement of accounting procedure in a systematic order during the accounting year for each accounting information.
The first step in accounting cycle is to analyze the given date and classify them accordingly, after which the transaction will be journalized. The next step is to Post transactions to the general ledger. Next is to prepare trial balance(unadjusted) and then record the adjusting entries. After this step, the adjusted trial balance is then prepared before preparing the financial statement and then record the closing entries.
A corporate CEO wished to relay good news about the prospect of a new technology being created, but was reluctant to do so. Instead, the CEO announces that the firm has decided to increase its dividend. This story is illustrative of what view of dividend relevancy
Answer:
Information signaling
Explanation:
Information signalling is defined as the various actions a firm takes that communicates it's financial outlook. For example if a firm releases a dividend policy it communicates the value of the firm's stock.
In this scenario the CEO announced increase in the firm's dividend. This will convey to investors that the company has a competitive advantage which will result in additional income, so dividends are being raised.
It is an indirect way of announcing good news about the prospect of a new technology being created.
Andrew Industries is contemplating issuing a 30-year bond with a coupon rate of 7.00 % (annual coupon payments) and a face value of $ 1 comma 000. Andrew believes it can get a rating of A from Standard & Poor's. However, due to recent financial difficulties at the company, Standard & Poor's is warning that it may downgrade Andrew Industries' bonds to BBB. Yields on A-rated, long-term bonds are currently 6.50 %, and yields on BBB-rated bonds are 6.90 %.A. What is the price of the bond if Andrew Industries maintains the A rating for the bond issue?
B. What will be the price of the bond if it is downgraded?
Electra Company purchased $50,000 worth of office supplies on January 1. Electra expects to use 60 percent of the supplies in the first year and the remainder in the second year. How much should Electra show in its Supplies Expense account at the end of the first fiscal year (ending December 31st)
Answer:
$30,000
Explanation:
Data provided in the question
Purchase value of the office supplies = $50,000
Expected to use supplies in the first year = 60%
So expected to use supplies in the second year = 40%
Based on the above information, the supplies account balance at the end of the first fiscal year is
= Purchase value of the office supplies × Expected to use supplies in the first year
= $50,000 × 60%
= $30,000
We simply multiplied the purchased value with the expected supplies use in the first year so that the balance of the supplies for the first year could come
In contemporary Japanese society, a group is associated with:______
a. the immediate family.
b. gender roles.
c. traditional friendships.
d. the company a person works for.
e. the educational environment.
Answer:
d. the company a person works for.
Explanation:
In contemporary Japanese society, a group is associated with the company a person works for.
A group typically comprises of two or more people who share some things in common such as identity, aims, interest and are willing to work in an accord.
Hence, the company or organization an individual works for, is usually considered to be a group in the contemporary Japanese society.
This is so because employees are blinded by a common goal, aim, interest to allow them work effortlessly, effectively and efficiently together.
In contemporary Japanese society, a group is associated with the company a person works for.
Japanese culture is known for its principle of working together as a group. Japan is known to be collectivistic nation as they focus on what is good for the group instead of the individual.
In Japanese society, there is self-employment in agriculture and business as well as low-income and unpaid family workers who work together in afamily like manner.
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1. The field of management science a. concentrates on the use of quantitative methods to assist in decision making. b. approaches decision making rationally, with techniques based on the scientific method. c. is another name for decision science and for operations research. d. each of these choices are true.
Answer:
d. each of these choices are true.
Explanation:
The field of management science refers to the study of various problem solving and decision-making technique for the organization that is strongly tied to the management and other subjects like economics, engineering, etc
The organization is able to accomplish its goals and objectives by applying different scientific methods. It only deals with qualitative methods. Plus it required research also
hence, the correct option is d.
Kendall Corners Inc. recently reported net income of $3 million and depreciation of $510,000. What was its net cash flow? Assume it had no amortization expense. Enter your answer in dollars. For example, an answer of $1.2 million should be entered as 1,200,000.
Answer:
$3,510,000
Explanation:
Net cash flows = net income + Depreciation expense
= $3,000,000 + $510,000 = $3,510,000
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During its first year of operations, Bramble Corp. had these transactions pertaining to its common stock. Jan. 10 Issued 25,200 shares for cash at $4 per share. July 1 Issued 51,000 shares for cash at $7 per share. (a) Journalize the transactions, assuming that the common stock has a par value of $4 per share. (b) Journalize the transactions, assuming that the common stock is no-par with a stated value of $1 per share.
Answer and Explanation:
The journal entries are shown below:
a.
On Jan 10
Cash Dr $100,800 (25200 shares × $4 )
To Common Stock $100,800
(Being the common stock is issued)
To record this, we debited the cash as it increased the assets and, at the same time, it also increased the total equity of the stockholder so common stock is credited
On July 1
Cash $357,000 (51,000 shares × $7)
To Common stock $204,000 (51,000 shares × $4)
To Additional Paid in capital in excess of par value - Common stock $153,000 (51,000 shares × $3)
(Being the issuance of the common stock is recorded)
To record this, we debited the cash as it increased the assets and, at the same time, it also increased the total equity of the stockholder and the common stock is credited with the additional capital paid for common stock
b.
On Jan 10
Cash $100,800 (25,200 shares × $4)
To Common stock $25,200 (25,200 shares × $1)
To Additional Paid in capital in - Common stock $75,600 (25,200 shares × $3)
(Being the issuance of the common stock is recorded)
To record this, we debited the cash as it increased the assets and, at the same time, it also increased the total equity of the stockholder and the common stock is credited with the additional capital paid for common stock
On July 1
Cash $357,000 (51,000 shares × $7)
To Common stock $51,000 (51,000 shares × $1)
To Additional Paid in capital in - Common stock $306,000 (51,000 shares × $6)
(Being the issuance of the common stock is recorded)
To record this, we debited the cash as it increased the assets and, at the same time, it also increased the total equity of the stockholder and the common stock is credited with the additional capital paid for common stock
Here, we are preparing the journal entry for the various transaction stated in the question.
a. Date Account titles and Explanation Debit Credit
Jan 10 Cash $100,800
(25,200 shares * $4)
To Common Stock $100,800
(Being the common stock is issued)
July 1 Cash $357,000
(51,000 shares × $7)
To Common stock $204,000
(51,000 shares × $4)
To Additional Paid in capital in excess $153,000
of par value (51,000 shares × $3)
(Being the issuance of the common stock is recorded)
b. Date Account titles and Explanation Debit Credit
Jan 10 Cash $100,800
(25,200 shares × $4)
To Common stock $25,200
(25,200 shares × $1)
To Additional Paid in capital $75,600
(25,200 shares × $3)
(Being the issuance of the common stock is recorded)
July 1 Cash $357,000
(51,000 shares × $7)
To Common stock $51,000
(51,000 shares × $1)
To Additional Paid in capital $306,000
(51,000 shares × $6)
(Being the issuance of the common stock is recorded)
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Brickhouse is expected to pay a dividend of $3.65 and $2.66 over the next two years, respectively. After that, the company is expected to increase its annual dividend at 3.3 percent. What is the stock price today if the required return is 12.3 percent
Answer:
The stock price today is $ 29.56
Explanation:
Dividend for year 1, d₁ = $ 3.65
Dividend for year 2, d₂ = $ 2.66
Required rate = 12.3% = 0.123
Growth rate = 3.3% = 0.033
Value after year 2= (d₂ × Growth rate) ÷ (Required rate - Growth rate)
= (2.66 × 1.033) ÷ (0.123 - 0.033)
=30.5308889
Hence current price = Future dividend and value × Present value of discounting factor(rate%,time period)
= (3.65÷1.123) + (2.66÷[tex]1.123^2[/tex] ) + (30.5308889 ÷[tex]1.123^2[/tex] )
=$29.56
On April 17, 2021, the Loadstone Mining Company purchased the rights to a coal mine. The purchase price plus additional costs necessary to prepare the mine for extraction of the coal totaled $4,950,000. The company expects to extract 990,000 tons of coal during a four-year period. During 2021, 249,000 tons were extracted and sold immediately.Required:
1. Calculate depletion for 2021.
2. Is depletion considered part of the product cost and included in the cost of inventory?
Answer:
1. Depletion for 2021 will be derived if the "tons which were extracted and sold immediately" is divided by "the Depletion per ton"
Depletion for 2021 = Extracted and sold tons in 2021 / depletion per ton
Depletion for 2021 = 249,000 tons * $5 per tons
Depletion for 2021 = $1,245,000
Where as the depletion per ton is be derived when the purchase price plus additional costs necessary is divided extract of tons of coals during the 4 year period.
Depletion per ton = $4,950,000 / 990000
Depletion per ton = $5 per ton
2. Depletion is not considered as part of product cost. It is shown as expense on income statement and reduced from the value of natural resource. So it is equivalent to depreciation of assets.
On October 1, Ebony Ernst organized Ernst Consulting; on October 3, the owner contributed $83,220 in assets in exchange for its common stock to launch the business. On October 31, the company's records show the following items and amounts.
Cash $13,840
Accounts receivable 12,000
Office supplies 2530
Land 45,840
Office equipment 17,200
Accounts payable 7810
Common Stock 83,220
Cash dividends $1280
Consulting revenue 12,000
Rent expense 2770
Salaries expense 6120
Telephone expense 820
Miscellaneous expenses 630
Required:
Prepare an October income statement for the business.
a. The ownerâs initial investment consists of $37,380 cash and $45,840 in land in exchange for its common stock.
b. The companyâs $17,200 equipment purchase is paid in cash.
c. The accounts payable balance of $7,810 consists of the $2,530 office supplies purchase and $5,280 in employee salaries yet to be paid.
d. The companyâs rent, telephone, and miscellaneous expenses are paid in cash.
e. No cash has been collected on the $12,000 consulting fees earned.
Required:
Prepare a statement of cash flows for Ernst Consulting.
Answer and Explanation:
The Preparation of statement of cash flows for Ernst Consulting is shown below:-
Ernst Consulting
Cash Flows from Operating Activities
Particulars Amount
Paid cash to employees ($840)
Paid cash for rent ($2,770)
Paid cash for telephone expense ($820)
Paid cash for miscellaneous expenses ($630)
Net cash used in Operating Activities ($5,060 )
Cash Flows from Investing Activities
Paid cash for purchase of equipment ($17,200)
Net cash used in Investing Activities ($17,200 )
Cash Flows from Financing Activities
Cash invested by owner $37,380
Cash dividends ($1,280)
Net cash flows provided by Financing Activities $36,100
Net increase ( decrease) in cash $13,840
Cash balance, October 1 0
Cash balance, October 31 $13,840
Therefore we have considered cash inflow presented in positive amount
while cash outflow in negative amount.
gThe fact that flotation costs can be significant is justification for: maintaining a low dividend policy and rarely issuing extra dividends. a firm to issue larger dividends than their closest competitors. maintaining a high dividend policy. maintaining a constant dividend policy even when profits decline significantly. a firm to maintain a constant dividend policy even if they frequently have to issue new shares of stock to do so.
Answer:
Maintaining a low dividend policy and rarely issuing extra dividends.
Explanation:
This cost is said to be accumulated or generated by a company when dealing new security systems or organisation into the company. This happens in a registered or legal form of absorption of the said body. And this is been applied or shown in percentages during summation or analysis.
Many factors affect flotation which ranges from the type of issued securities, their size, and risks associated with the transaction. It is generally lower than those for issuing common shares. It is shown as the issuance of common shares typically ranges from 2% to 8%.
Ecco Company sold $147,000 of kitchen appliances with six-month warranties during September. The cost to repair defects under the warranty is estimated at 6% of the sales price. On October 15, a customer required a $120 part replacement, plus $84 labor under the warranty.
a. Provide the journal entry for the estimated expense on September 30.
b. Provide the journal entry for the October 15 warranty work. If an amount box does not require an entry, leave it blank.
Answer:
a. Provide the journal entry for the estimated expense on September 30.
September 30, warranty liability
Dr Warranty expense 8,820
Cr Warranty liability 8,820
b. Provide the journal entry for the October 15 warranty work. If an amount box does not require an entry, leave it blank.
October 15, warranty work
Dr Warranty liability 204
Cr Inventory - parts 120
Cr wages payable 84
Warranty expense must be recognized during the period that the associated sales are made, and as the expenses are accrued, you should debit the warranty liability account.
A rich donor gives a hospital $ 960 comma 000 one year from today. Each year after that, the hospital will receive a payment 5 % larger than the previous payment, with the last payment occurring in ten years' time. What is the present value (PV) of this donation, given that the interest rate is 9 %?
Answer:
$7,560,000
Explanation:
To solve this problem, the Present Value (PV) of a growing annuity formula is used.
The Present Value of a growing annuity is the current value of a series of payments which grows or diminishes at a constant rate each period.
The formula below represents the PV of a growing annuity:
[tex]PV=PMT *\frac{(1-(1+g)^{n}*(1+i)^{-n}) }{i-g}[/tex], ............................................. (i)
where,
PV = Present Value = ?
PMT = Periodic Payment = $960,000
i = Interest Rate = 9% = 0.09
g = Growth Rate = 5% = 0.05
n = Number of periods = 10 years
Substituting these values in equation (i), we have
[tex]PV=960000*\frac{(1-(1+0.05)^{10}*(1+0.09)^{-10} }{0.09-0.05}[/tex]
[tex]PV=960000*\frac{(1-(1.05^{10})*(1.09)^{-10}) }{0.04}[/tex]
[tex]PV=960000*\frac{(1-(1.63*0.42))}{0.04}[/tex]
[tex]PV=960000*\frac{(1-0.685)}{0.04}[/tex]
[tex]PV=960000*\frac{0.315}{0.04}[/tex]
[tex]PV=960000*7.875[/tex]
[tex]PV=$7,560,000[/tex]
PV = $7,560,000
glass co. had net income of $70,000 during the year. Depreciation was $10,000. the following information is available: accounts receivable increase (sale price $100,000) non trade notes payable increased by 50,000, equipment purchases increased by 40,000 account payable increase 30,000. what amount should galss report as net cash provided by investing activities
Answer:
Net cash from investing activities (40,000)
Explanation:
The investing activities are those that pertain to the purchase and sales of non-current assets and marketable securities.
Example of such includes the sales and purchase of property plant an equipment. Therefore, the only item to be considered here is the purchase of equipment.
$
Investing activities
Equipment purchase (40,000)
Net cash from investing activities (40,000)
Wingate Company, a wholesale distributor of electronic equipment, has been experiencing losses for some time, as shown by its most recent monthly contribution format income statement: Sales $ 1,535,000 Variable expenses 553,150 Contribution margin 981,850 Fixed expenses 1,080,000 Net operating income (loss) $ (98,150) In an effort to resolve the problem, the company would like to prepare an income statement segmented by division. Accordingly, the Accounting Department has developed the following information: Division East Central West Sales $ 355,000 $ 660,000 $ 520,000 Variable expenses as a percentage of sales 53 % 23 % 41 % Traceable fixed expenses $ 296,000 $ 331,000 $ 202,000 Required: 1. Prepare a contribution format income statement segmented by divisions. 2-a. The Marketing Department has proposed increasing the West Division's monthly advertising by $28,000 based on the belief that it would increase that division's sales by 16%. Assuming these estimates are accurate, how much would the company's net operating income increase (decrease) if the proposal is implemented
Answer:
Wingate Company
1. Contribution Format Income Statement (segmented by divisions):
East Central West Total
Sales $ 355,000 $ 660,000 $ 520,000 $ 1,535,000
Variable Expenses 188,150 151,800 213,200 553,150
Contribution 166,850 508,200 306,800 981,850
Traceable Fixed Exp. 296,000 331,000 202,000 829,000
Non-Traceable Fixed Expenses 251,000
Net operating income/
(Loss) (129,150) 177,200 104,800 (98,150)
2a) Increasing the West Division's monthly advertising by $28,000 based on the belief that it would increase that division's sales by 16%:
East Central West Total
Sales $ 355,000 $ 660,000 $ 603,200 $ 1,618,200
Variable Expenses 188,150 151,800 213,200 553,150
Contribution 166,850 508,200 390,000 1,065,050
Traceable Fixed Exp. 296,000 331,000 230,000 857,000
Non-Traceable Fixed Expenses 251,000
Net operating income/
(Loss) (129,150) 177,200 160,000 (42,950)
2b) The net operating income will increase by $55,200, thus reducing the loss from $98,150 to $42,950.
Explanation:
Segmenting the income statement into divisions helps management to trace the loss making division as Division East. The division has a traceable fixed cost that is far above its contribution to profit. The fixed expense must be studied, otherwise the division may be up for closure.
Lucido Products markets two computer games: Claimjumper and Makeover. A contribution format income statement for a recent month for the two games appears below:
Claimjumper Makeover Total
Sales $106,000 $53,000 $159,000
Variable expenses 32,800 6,950 39,750
Contribution margin $73,200 $46,050 119,250
Fixed expenses 82,575
Net operating income $36,675
Requirement:
1: Compute the overall contribution margin (CM) ratio for the company.
2: Compute the overall break-even point for the company in sales dollars.
3: Verify the overall break-even point for the company by constructing a contribution format income statement showing the appropriate levels of sales for the two products.
Answer and Explanation:
1. The computation of overall contribution margin ratio is shown below:-
Overall contribution margin ratio = Total contribution ÷ Total sales
= $119,250 ÷ $159,000
= 75%
2. The computation of overall break-even point for the company in sales is shown below:-
Overall Break even = Fixed costs ÷ Contribution margin
= $82,575 ÷ 75%
= $110,100
3. The overall break-even point for the company by constructing a contribution format income statement showing the appropriate levels of sales for the two products is shown below:-
here, Sales at Break even in the ratio will be 2:1
Particulars Claimjumper Makeover Total
Sales $106,000 $53000 $159,000
($106,000 ÷ $159,000 × $110,100) ($53,000 ÷ $159,000 × $110,100)
Break even
sales $73,400 $36,700 $110,100
Particulars Claimjumper Makeover Total
Sales $73,400 $36,700 $110,100
Variable expense $22,712 $4,813 $27,525
Contribution margin $50,688 $31,887 $82,575
Fixed expense $82,575
Net operating income 0
Working Note
Variable expense for Claimjumper = Variable expenses ÷ Sales × Break even sales
= $32,800 ÷ $106,000 × $73,400
= $22,712
Variable expense for Makeover = Variable expenses ÷ Sales × Break even sales
= $6,950 ÷ $53,000 × $36,700
= $4,813
Jones, CPA, is auditing the financial statements of XYZ Retailing, Inc. What assurance does Jones provide that direct effect noncompliance that is material to XYZ’s financial statements and noncompliance that has a material but indirect effect on the financial statements will be detected?
A. Direct effect noncompliance: Reasonable; indirect effect noncompliance: none.
B. Direct effect noncompliance: Reasonable; indirect effect noncompliance: reasonable.
C. Direct effect noncompliance: Limited; indirect effect noncompliance: none.
D. Direct effect noncompliance: Limited; indirect effect noncompliance: reasonable.
Answer:
Direct effect noncompliance: Reasonable; indirect effect noncompliance: none.
Explanation:
Direct-effect noncompliance is a noncompiance that has a direct and material effects on financial statement amounts. Examples of direct-effect noncompliance include the violations of tax laws.
Indirect-effect noncompliance is a violation of laws that do not have direct relationships with the financial statements. Example of indirect-effect noncompliance include violations that have to do with environmental protection, occupational health and safety, etc.
Reasonable assurance can be described as a high level of assurance that is not an absolute one but it is however related to material misstatements.
Therefore, an assurance that Jones provide that direct effect noncompliance that is material to XYZ’s financial statements and noncompliance that has a material but indirect effect on the financial statements will be detected is direct effect noncompliance: Reasonable; indirect effect noncompliance: none.
The country of Rainbows exports seeds to the country of Farmington. Information for the quantity demanded (Qd) and the quantity supplied (Qs) for each country, in a world without trade, are given in the tables below.
Price ($) Qd Qs
40 150 120
50 130 130
60 110 150
70 100 170
80 90 180
Farmington:
Price ($) Qd Qs
40 310 190
50 300 220
60 290 250
70 280 280
80 270 310
What is the equilibrium price and quantity for each country?
Answer:
Rainbows :
Equilibrium price : $50
Equilibrium quantity: 130
Farmington
Equilibrium price : $70
Equilibrium quantity: 280
Explanation:
Equilibrium price is the price where the quantity demanded equals the quantity supplied.
Equilibrium quantity is the quantity at which quantity demanded is equal to the quantity supplied.
I hope my answer helps you
Work Place Products Inc., a wholesaler of office products, was organized on July 1 of the current year, with an authorization of 50,000 shares of preferred 2% stock, $40 par and 750,000 shares of $7 par common stock. The following selected transactions were completed during the first year of operations:
Journalize the transactions.
a. July 1. Issued 400,000 shares of common stock at par for cash.
b. July. 1. Issued 1,000 shares of common stock at par to an attorney in payment of legal fees for organizing the corporation.
c. Aug. 7. Issued 80,000 shares of common stock in exchange for land, buildings, and equipment with fair market prices of $250,000, $400,000, and $70,000, respectively. For a compound transaction, if an amount box does not require an entry, leave it blank.
d. Sept. 20. Issued 25,000 shares of preferred stock at $44 for cash. For a compound transaction, if an amount box does not require an entry, leave it blank.
Answer and Explanation:
The Journal entries are shown below:-
1. Cash Dr, $2,800,000 (400,000 × $7)
To Common stock $2,800,000
(Being issue of common stock is recorded)
Here we debited the cash as as it increased the assets and we credited the common stock as it also increased stockholder equity
2. Organisation expenses Dr, $7,000 (1,000 × $7)
To Common stock $7,000
(Being issue of common stock for organisation expenses is recorded)
Here we debited the organization expenses as it increased the expenses and we credited the common stock as it also increased stockholder equity
3. Land Dr, $250,000
Building Dr, $400,000
Equipment $70,000
To Common stock $560,000
To Paid in capital in excess of par value- Common stock $160,000
(Being exchange of common stock with Land, building and equipment is recorded)
Here we debited the land, building, equipment as it increased the assets and we credited the common stock and paid in capital in excess of par value as it also increased stockholder equity
4. Cash Dr, $1,100,000 (25,000 × $44)
To Preferred stock $1,000,000 (25,000 × $40)
To Paid in capital in excess of par value-preferred stock $100,000
(Being issue of preferred stock is recorded)
Here, we debited the cash as it increased the assets and we credited the preferred stock and paid in capital in excess of par value as it also increased stockholder equity
Someone claiming to be an employee of the employer for whom Bernie works has been handing out flyers denigrating the employer at a local shopping mall. Bernie's employer had its security force search all of the employees' lockers to see if they had any of the flyers. Bernie can file an action against his employer under the 4th amendment if
Answer:
1 if employer is the federal government
2. If employer is the state or local government
Explanation:
Under the 4th amendment, Bernie can file an action against his employer if the employer is a state or local government and also if his employer is a federal government. Bernie can do this because the 4th amendment only applies to government employers and not private employers.
Assume Zap industries reported the following adjusted account balances at year-end. 2019 2018 Accounts Receivable $ 1,690,200 $ 1,340,920 Allowance for Doubtful Accounts (92,000 ) (76,300 ) Accounts Receivable, Net $ 1,598,200 $ 1,264,620 Assume the company recorded no write-offs or recoveries during 2019. What was the amount of Bad Debt Expense reported in 2019
Answer:
amount of Bad Debt Expense for 2019 = $92,000
Explanation:
A bad debt expense is a uncollectible receivable amount incurred on a credit sale to a customer, who is no longer able to pay the debt, due to bankruptcy or other financial problems. Companies make provision for these kind of credit losses in the allowance for doubtful accounts, and hence records the amount used from the allowance for doubtful accounts as the bad debt expense.
In our example, the allowance for doubtful account for 2019 is $92,000, hence since it was used to settle part of the credit losses, this becomes the bad debt expense.
Statement of Cash Flows—Indirect Method
The comparative balance sheet of Harris Industries Inc.
at December 31, 20Y4 and 20Y3, is as follows:
Dec. 31, 20Y4 Dec. 31, 20Y3
Assets
Cash $443,240 $360,920
Accounts receivable (net) 665,280 592,200
Inventories 887,880 1,022,560
Prepaid expenses 31,640 25,200
Land 302,400 302,400
Buildings 1,713,600 1,134,000
Accumulated depreciation—buildings (466,200) (414,540)
Machinery and equipment 781,200 781,200
Accumulated depreciation— (214,200) (191,520)
machinery and equipment
Patents 106,960 112,000
Total assets $4,251,800 $3,724,420
Liabilities and Stockholders' Equity
Accounts payable (merchandise creditors)$837,480 $927,080
Dividends payable 32,760 25,200
Salaries payable 78,960 87,080
Mortgage note payable, due in nine years 224,000 0
Bonds payable 0 390,000
Common stock, $5 par 200,400 50,400
Paid-in capital: Excess of issue price 366,000 126,000
over par—common stock
Retained earnings 2,512,200 2,118,660
Total liabilities and stockholders' equity $4,251,800 $3,724,420
An examination of the income statement and the accounting records revealed the following additional information applicable to 20Y4:
Net income, $524,580.
Depreciation expense reported on the income statement: buildings, $51,660; machinery and equipment, $22,680.
Patent amortization reported on the income statement, $5,040.
A building was constructed for $579,600.
A mortgage note for $224,000 was issued for cash.
30,000 shares of common stock were issued at $13 in exchange for the bonds payable.
Cash dividends declared, $131,040.
Required:
Prepare a statement of cash flows, using the indirect method of presenting cash flows from operating activities. Use the minus sign to indicate cash out flows, cash payments, decreases in cash, or any negative adjustments
Answer:
Statement of Cash Flows
Cash flow From Operating Activities
Net income $524,580
Adjustment for Non Cash Items :
Depreciation expense - buildings $51,660
Depreciation expense - machinery and equipment $22,680
Patent amortization $5,040
Adjustments for Changes in Working Capital Items :
Increase in Accounts receivable -$73,080
Decrease in Inventories $134,680
Increase in Prepaid expenses -$6,400
Decrease in Accounts payable -$89,600
Net Cash From Investing Activities $569,540
Cash flow From Investing Activities
Buildings -$579,600
Net Cash From Investing Activities -$579,600
Cash flow From Financing Activities
Mortgage Note $224,000
Dividends Paid -$123,480
Net Cash From Financing Activities $100,520
Movement during the year $82,320
Cash and Cash Equivalents at beginning of the year $360,920
Cash and Cash Equivalents at end of the year $443,240
Explanation:
For Determination of Dividends Paid, open a Dividends Paid Account as follows :
Debit:
Cash (Balancing figure) 123,480
Balance c/d 32,760
Totals 156,240
Credit
Balance b/d 25,200
Dividends Declared 131,040
Totals 156,240
Tanner-UNF Corporation acquired as a long-term investment $240 million of 6% bonds, dated July 1, on July 1, 2016. Company management has the positive intent and ability to hold the bonds until maturity. The market interest rate (yield) was 8% for bonds of similar risk and maturity. Tanner-UNF paid $200 million for the bonds. The company will receive interest semiannually on June 30 and December 31. As a result of changing market conditions, the fair value of the bonds at December 31, 2016 was $210 million.
Required:
1. Prepare the journal entry to record Tanner-UNF’s investment in the bonds on July 1, 2016.
2. Prepare the journal entry by Tanner-UNF to record interest on December 31, 2016, at the effective (market) rate.
3. At what amount will Tanner-UNF report its investment in the December 31, 2016, balance sheet? Why?
4. Suppose Moody’s bond rating agency downgraded the risk rating of the bonds motivating Tanner-UNF to sell the investment on January 2, 2017, for $190 million. Prepare the journal entry to record the sale.
Mahugh Corporation, which has only one product, has provided the following data concerning its most recent month of operations:
Selling price $122
Units in beginning inventory 0
Units produced 8,300
Units sold 8,200
Units in ending inventory 100
Variable costs per unit:
Direct materials $27
Direct labor $46
Variable manufacturing overhead $4
Variable selling and administrative $7
Fixed costs:
Fixed manufacturing overhead $199,200
Fixed selling and administrative $106,600
Required:
a. What is the unit product cost for the month under variable costing?
b. What is the unit product cost for the month under absorption costing?
c. Prepare an income statement for the month using the contribution format and the variable costing method.
d. Prepare an income statement for the month using the absorption costing method.
e. Reconcile the variable costing and absorption costing operating incomes for the month.
Answer:
a. $77
b. $101
c.Income statement for the month using the contribution format and the variable costing method.
Sales ( $122 × 8,200) 1,000,400
Less Cost of Sales
Opening Stock 0
Add Cost of Goods Manufactured (8,300× $77) 639,100
Less Closing stock ( 100 × $77) (7,700) (631,400)
Contribution 369,000
Less Expenses
Fixed manufacturing overhead ($199,200)
Variable selling and administrative ($7×8,200) (57,400)
Fixed selling and administrative ($106,600)
Net Income / (Loss) 5,800
d.Income statement for the month using the absorption costing method.
Sales ( $122 × 8,200) 1,000,400
Less Cost of Sales
Opening Stock 0
Add Cost of Goods Manufactured (8,300× $101) 838,300
Less Closing stock ( 100 × $101) (10,100) (828,200)
Contribution 172,200
Less Expenses
Variable selling and administrative ($7×8,200) (57,400)
Fixed selling and administrative ($106,600)
Net Income / (Loss) 8,200
e.Reconcile the variable costing and absorption costing operating incomes for the month
Absorption Costing Net Profit 8,200
Add Fixed Costs in Opening Stock 0
Less Fixed Costs in Closing Stock (100 × $24) (2,400)
Variable Costing Net Profit 5,800
Explanation:
Product Cost (Variable Costing) = All Variable Manufacturing Costs
= $27 + $46 + $4
= $77
Product Cost (Absorption Costing) = All Variable Manufacturing Costs + All Fixed Manufacturing Costs
= $77 + ($199,200/8,300)
= $77 + $24
= $101
Income Statements
Non Manufacturing Costs are treated as a Periodic Cost in Absorption Costing Income Statement
Whilst Both Fixed Manufacturing Costs and Non Manufacturing Costs are treated as a Periodic Cost in Variable Costing Income Statement.
Reconciliation
The difference in Profit is due to Fixed Cost component absorbed in Absorption Costing.
