Answer:
$460
Explanation:
The following information was reported from Marshall Grocery delivery service report
Labor rate per hour= $20
Rate per hour= $25.80
Materials markup= 23%
Target profit margin= 20%
The material markup for a job that will use 100 labor hours and $2,000 of materials is calculated as follows
Materials markup= Materials × percentage
= $2,000×23/100
= $2,000×0.23
= $460
Hence the materials markup is $460
Steeler Company has issued bonds that pay semiannually with the following characteristics: Coupon Yield to Maturity Maturity Duration 10% 10% 10 years 6.76 years If the yield to maturity decreases to 8.045%, the expected percentage change in the price of the bond using modified duration would be ________.
Answer:
the expected percentage change in the price of the bond using modified duration would be 12%
Explanation:
A= Semi annually= 2
YM= Yield to Maturity= 10%
M= Maturity= 10%
MtD= Maturity duration= 6.76 years
Modified duration (MD)= MtD/1+YM/A
MD= 6.76/1+10%/2= 6.76/1.05= 6.438 approx 6.44 years
Change in Yield to maturity = 8.045%- 10%= -1.955%
Change in percentage Price= -Modified duration*Change in Yield to maturity
Change in percentage Price= -6.44*(--1.955%
)= 12.59%
Identify the information that the current Generally Accepted Accounting Principles and Auditing Standards require the financial statements of an entity to show for the reporting period:_________.1. Budgeting vs actual comparisons of key balance sheet and income statement accounts2. Market value of the entity's net assets3. Number of people employed by the entity4. Investments by and distribution to owners (ex: stockholders) during the period5. Financial Position at the end of the period6. Cash flows during the period7. Earnings for the period
Answer:
4. Investments by and distribution to owners (ex: stockholders) during the period.
5. Financial Position at the end of the period.
6. Cash flows during the period.
7. Earnings for the period.
Explanation:
The information that the current Generally Accepted Accounting Principles (GAAP) and Auditing Standards require the financial statements of an entity to show for the reporting period are;
1. Investments by and distribution to owners (ex: stockholders) during the period.
2. Financial Position at the end of the period.
3. Cash flows during the period.
4. Earnings for the period.
The Financial Accounting Standards Board (FASB) issued some standards, accounting principles, and procedures to be followed by public companies in the United States of America for reporting and recording statements of income, this is known as the Generally Accepted Accounting Principles (GAAP).
The GAAP is also adopted by the Securities and Exchange Commission (SEC) to measure, analyze and regulate the stock market.
Oriole Inc manufactures model airplanes and repair kits. The planes account for 75% of the sales mix, and the kits the remainder. The variable cost ratio for the planes is 80% and 65% for the kits. Fixed costs are $114000. Compute the breakeven point in sales dollars.
Answer:
Break-even point (dollars)= $480,000
Explanation:
Giving the following information:
Fixed costs are $114000.
Sales mix:
Planes= 0.75
Kits= 0.25
Contribution margin ratio:
Planes= 0.20
Kits= 0.35
To calculate the break-even point in dollars, we need to use the following formula:
Break-even point (dollars)= Total fixed costs / Weighted average contribution margin ratio
Weighted average contribution margin ratio= sales mix*contribution margin ratio
Weighted average contribution margin ratio= 0.75*0.2 + 0.25*0.35
Weighted average contribution margin ratio= 0.2375
Break-even point (dollars)= 114,000/0.2375
Break-even point (dollars)= $480,000
A firm is considering two mutually exclusive projects, X and Y, with the following cash flows: 0 1 2 3 4 Project X -$1,000 $100 $320 $400 $700 Project Y -$1,000 $1,000 $110 $55 $45 The projects are equally risky, and their WACC is 13%. What is the MIRR of the project that maximizes shareholder value
Answer:
Project X maximizes shareholder value (highest NPV) and has a MIRR of 14.27%.
Explanation:
year cash flow project X cash flow project Y
0 -1,000 -1,000
1 100 1,000
2 320 110
3 400 55
4 700 45
WACC = 13%
Using an excel spreadsheet I calculated the projects' NPV, IRR and MIRR
NPV IRR MIRR
project X $45.65 15% 14.27%
project Y $36.82 16% 14.03%
The modified internal rate of return (MIRR) considers that the project's cash inflows are invested at the company's WACC and the initial investment is financed at a certain debt rate (in this case the same WACC).
Which of the following represents an increase in living standards over the past century? Check all that apply. Increased human activities have magnified the pollution of air and water. The purchasing power of a dollar has declined over time due to inflation. Medical breakthroughs enable people to enjoy better healthcare nowadays.
Answer:
Medical breakthroughs enable people to enjoy better healthcare nowadays.
Explanation:
An increase in living standard means that the lives of people are better off.
Advances in medicine have made it possible to find cure to various diseases. This improves standard of living.
Increased pollution of air and water and decline of dollar value have negative effects on living standard.
Pollution affects human health negatively and can cause diseases which negatively affect standard of living. Also, pollution can cause floods and other environmental disasters. Floods can displace people from their homes and this affects standard of living negatively.
Decrease in dollar value has made items more expensive.
I hope my answer helps you
Rank the following instruments in terms of credit risk. In your rankings, use 1 for the greatest credit risk and 4 for the smallest credit risk. Assume a 10 year Treasury trades with a YTM of 5%.a. A Ba1 corporate bond ______b. A ten-year BBB- corporate bond with a YTM of 7% ______c. A secured loan from Argosy Gaming, which is a B- rated firm ______d. A senior subordinated bond from Argosy Gaming
Answer:
a. A Ba1 corporate bond 2 (not investment grade)
b. A ten-year BBB- corporate bond with a YTM of 7% 3 (medium risk but still investment grade)
c. A secured loan from Argosy Gaming, which is a B- rated firm 4 (less risky since it is backed by a collateral)
d. A senior subordinated bond from Argosy Gaming 1 (highest risk)
Explanation:
There are two major bond rating agencies in the US: Moody's and Standard & Poor's.
Their rankings are very similar, although the letters vary a little:
AAA: safest
AA: low risk
A: low risk
BBB: medium risk
BB: a little bit more riskier
B: risky
CCC: very high risk
CC: even riskier
C: riskiest
D: junk, in default
Mary runs an ad in the paper offering a $5 reward for the return of her lost dog, Sparky. Mary has made a promise to pay the person who performs the act of returning Sparky. This is a(n) _____ contract. Select one: a. quasi b. implied c. bilateral d. unilateral
Answer:
This is a Unilateral contract
Explanation:
Mary has made a promise to pay the person who performs the act of returning Sparky therefore this is an example of a unilateral contract.
A unilateral contract is a type of contract agreement where an offeror such as Mary makes a promise to pay after the performance of a specified act, which is to return her dog Sparky
On January 1, 2021, the Taylor Company adopted the dollar-value LIFO method. The inventory value for its one inventory pool on this date was $470,000. Inventory data for 2021 through 2023 are as follows:
Date Ending Inventory at Year-End Costs Cost Index
12/31/2021 $391,400 1.03
12/31/2022 454,250 1.15
12/31/2023 477,400 1.24
Required: Calculate Taylor's ending inventory for 2021, 2022, and 2023.
Answer:
Taylor Company ending inventories are
2021= $380600
2022= $397850
2023= $386350
Explanation:
Kindly check attached pdf for the computation of the solution
Kelly received a $60,000 salary during 2017. Her federal income tax withholding rate was 20%, and the Social Security base amount for 2017 was $118,500.What is the total amount that her employer should have withheld in 2017?
A. $15,390
B. $16,590
C. $15,979
D. $6,849
Answer: B. $16,590
Explanation:
The FICA tax rate which is the combined Social Security and Medicare rate for 2017 was 7.65%.
Assuming a base of $118,500 this means that you are taxed on your first $118,500 in earnings.
Kelly only made $60,000 so the tax rate will apply to her $60,000.
Adding that to the 20% that she is due to pay on Federal Income tax the total amount her employer withheld was,
= (60,000 * 20%) + (60,000 * 7.65%)
= 12,000 + 4,590
= $16,590
Option B is correct.
A part of a business's message that distinguishes it from all its competitors
is referred to as what?
Answer: Brand.
Explanation:
A brand usually a logo, name, word or sentence or the comnbination is a company's valuable assets that distinguishes its their product from its competitors. Overtime, A Brand which proves credibility will promote the company's worth and value and endear potential buyers to the benefit its owners and shareholders. A brand becomes a trademark when legal protection is conferred on it.
Answer:
unique selling proposition
Explanation:
Ferdinand’s employer will match 50% of his $250 monthly contributions to his 401(k). This means that Ferdinand’s employer will put 50% of $250 = $125 into Ferdinand’s 401(k) account each month in addition to Ferdinand’s $250. What a swell benefit
Answer and Explanation:
The computation of the given question is shown below:-
Total Contributions = Monthly contribution + Amount invested in Ferdinand’s 401(k)
= $250 + $125
= $375
1. Future Value = PMT [((1 + r)n - 1) ÷ r
Future value = 375 × ((1 + 0.03 ÷ 12) × 12 × 40 - 1) ÷ (0.03 ÷ 12)
= $347,272
2. Ferdinand deposit = Given Amount × Total number of months in a year × Number of years
= $250 × 12 Months × 40 Years
= $120,000
3. The Amount put in by the employer = 50% of $250 ×Total number of months in a year × Number of years
= $125 × 12 Months × 40 Years
= $60,000
4. Interest = Future value - Ferdinand deposit - The Amount put in by the employer
= $347,272 - $120,000 - $60,000
= $167,272
We simply applied the above formulas
Dollar-value LIFO:
a. Starts with ending inventory measured at current costs and re-creates LIFO layers for measuring inventory costs.
b. Increases the recordkeeping costs of LIFO.
c. Only is allowed for internal reporting purposes.
d. None of these answer choices are correct.
Answer:
a. Starts with ending inventory measured at current costs and re-creates LIFO layers for measuring inventory costs.
Explanation:
Dollar-value LIFO refers a technique of accounting that employed for inventory based on the last-in-first-out model.
To obtain the dollar-value LIFO, the conversion price index that will be used to calculate the LIFO cost layer for each period must be calculated first.
Therefore, Dollar-value LIFO starts with ending inventory measured at current costs and re-creates LIFO layers for measuring inventory costs.
Church Inc. is presently enjoying relatively high growth because of a surge in the demand for its new product. Management expects earnings and dividends to grow at a rate of 22% for the next 4 years, after which competition will probably reduce the growth rate in earnings and dividends to zero, i.e., g = 0. The company's last dividend, D0, was $1.25, its beta is 1.20, the market risk premium is 5.50%, and the risk-free rate is 3.00%. What is the current price of the common stock?
a. $32.69
b. $26.57
c. $27.37
d. $28.97
e. $23.39
Answer:
Option B ,$26.57 is correct
Explanation:
The cost of equity =Rf+Beta*Mrp
Rf is the risk free rate of 3.00%
Beta of equity is 1.20
Mrp is the market risk premium which is 5.50%
Cost of equity=3.00%+(1.20*5.50%)=9.60%
Stock price =present value of dividends+present value of terminal value
D1=$1.25*(1+22%)/(1+9.6%)^1=$ 1.39
D2=$1.25*(1+22%)^2/(1+9.6%)^2=$ 1.55
D3=$1.25*(1+22%)^3/(1+9.6%)^3=$ 1.72
D4=$1.25*(1+22%)^4/(1+9.6%)^4=$ 1.92
terminal value=year 4 dividend/(r-g)
year 4 dividend=$1.25*(1+22%)^4= 2.77
r is the cost of equity of 9.6%
g is the dividend afer year 4 which is 0%
terminal value= 2.77/(9.6%-0%)=$ 28.85
present value of terminal value= 28.85/(1+9.6%)^4=$ 19.99
Total present values=$ 1.39+$ 1.72+$ 1.92 +$ 1.92 +$ 19.99 =$26.58
According to the question Option B ,$26.57 is correct
How to calculate of common stock?When The cost of equity = [tex]Rf+Beta "/times" Mrp[/tex]
After that, Rf is the risk free rate of 3.00%
then Beta of equity is[tex]1.20[/tex]
After that Mrp is the market risk premium which is 5.50%
So that, Cost of equity 3.00%+(1.20*5.50%)=9.60% = 9.60%
Then The Stock price is = present value of dividends + present value of terminal value
Now, D1 is = $[tex]1.25 "/times" (1+22[/tex]%[tex])/(1+9.6[/tex]%)^[tex]1=$ 1.39[/tex]
Then, D2 is = $[tex]1.25 "/times" (1+22[/tex]%[tex])^2/(1+9.6[/tex]%)^[tex]2=$ 1.55[/tex]
Then D3 is = $1.25 "/times" (1+22%)^3/(1+9.6%)^3=$ 1.72
After that D4 is = $[tex]1.25*(1+22[/tex]%[tex])^4/(1+9.6[/tex]%)^[tex]4=$ 1.92[/tex]
Then the terminal value is = year 4 dividend/(r-g)
Then year 4 dividend is = $[tex]1.25×(1+22[/tex]%)^4= 2.77
Then r is the cost of equity of 9.6%
Now, g is the dividend after year 4 which is 0%
After that terminal value is = 2.77/(9.6%-0%)=$ 28.85
Then present value of terminal value is = [tex]28.85/(1+9.6[/tex]%)^4=$ 19.99
Thus, The Total present values is =$ [tex]1.39+$ 1.72+$ 1.92 +$ 1.92 +$ 19.99[/tex] =$26.57
Therefore Option B is $26.57
Find out more information about Common stock here:
https://brainly.com/question/24334747
There are many perfumes on the market, but Demeter, a superior brand of perfume, has memorable scents that leads to emotional ties. Which element of the marketing plan is being considered when the marketing manager decided initially to market the perfume in a limited number of very exclusive specialty stores?
Answer:
Place
Explanation:
The four P's of marketing is a number of tactics employed in a marketing plan to achieve better sales of a product. These four P's include; Price, Place, Promotion, and Product. The place factor takes note of the location where the target customers are most likely to be reached. To achieve better sales of a product, it is very important that the right location is chosen so that consumers who are interested in it can access it easily. For example, it would make no sense to sell grocery products in a boutique. That is not where the target customers are.
So, when the marketing manager of Demeter Perfumes decided to market the perfume in a limited number of very exclusive specialty stores, it is because that place is where the target market (most likely, high income earners), can be found easily.
Ravelo Corporation has provided the following data from its activity-based costing system:
Activity Cost Pools Total Cost Total Activity
Assembly $498,520 44,000 machine-hours
Processing orders $54,263 1,100 orders
Inspection $77,589 1,100 inspection-hours
Data concerning the company's product L19B appear below:
Annual unit production and sales 430
Annual machine-hours 990
Annual number of orders 70
Annual Inspection hours 20
Direct materials cost $37.74 per unit
Direct labor cost $10.45 per unit
According to the activity-based costing system, the average cost of product L19B is closest to:
a. $4819 per unit
b. $82.31 per unit
c. $85.56 per unit
d. $7753 per unit
Answer:
Activity Cost Pools Total Cost Total Activity
Assembly $498,520 44,000 machine-hours
Processing orders $54,263 1,100 orders
Inspection $77,589 1,100 inspection-hours
Explanation:
Activity Cost Pools Total Cost Total Activity
Assembly $498,520 44,000 machine-hours
Processing orders $54,263 1,100 orders
Inspection $77,589 1,100 inspection-hours
A consumer has $130 in monthly income to be spent on two goods Z and B. The price of good Z (Pz) is $8.00. The Marginal Rate of Transformation (MRT) is equal to minus−2. That is 2 units of good B can be traded for 1 unit of good Z. What is the price of good B in $?
Answer:
Price of B is $4
Explanation:
Marginal rate of transformation is defined as the amount of a good x has to stop being produced inorder to produce a certain amount of a good y. Factors of production and technology used are assumed to be constant.
In this scenario the marginal rate of transformation is -2, that is 2 units of good B can be traded for 1 unit of good Z, mathematically
2 * Pb = Pz
Substitute price of Z
2* Pb = $8
Pb= 8 ÷ 2
On= $4
Yum! Brands, the parent company of KFC, has pursued an aggressive growth strategy in China. There are now more than 3,700 restaurants in 650 Chinese cities, and KFC has a 40 percent market share of the entire fast-food industry there. Yum! Brands China owns and directly manages about 90 percent of its Chinese stores, so it appears that the company prefers __________ in this market.
Answer:
Direct Investment
Explanation:
DIRECT INVESTMENT can be defined as an investment in which a company, organisation or business owner decide to venture into business with another country which is know as foreign business enterprise in order to acquire and obtain a controlling interest in the enterprise which is why DIRECT INVESTMENT is a way of controlling the ownership of a business in one country by an another entity which is based in another country.
Most Investors use the DIRECT INVESTMENT way to put money into a business operating in another country.
Therefore based on the information given the company prefers DIRECT INVESTMENT method which is why the parent company of KFC has more than 3,700 restaurants in 650 Chinese cities in which the Brands China owns and directly manages about 90 percent of its Chinese stores.
Hence this method is called the DIRECT INVESTMENT method .
The evaluation of a firm's strengths, weaknesses, opportunities, and threats is called a SWOT analysis. A SWOT analysis can be a valuable tool in the development of a marketing plan, but too often the SWOT analysis is not well thought out and proves to be an ineffective waste of time. Perhaps the most common mistake when conducting a SWOT analysis is the failure to separate internal issues from external issues. The strengths and weaknesses aspects of the SWOT analysis focus on internal capabilities. The opportunities and threats aspects focus on the external environment. Select the most appropriate category for the descriptors below.1. Post office closings2. JPM has the superior information technology infrastructure3. Increasing demand for international packages4. JPM has an excellent workforce and human resource department5. Potential global economic recession6. JPM has increasing labor costs7. JPM has less fuel-efficient planes8. Increasing fuel costs due to turmoil in the Middle East
Answer: Please refer to Explanation
Explanation:
SWOT ANALYSIS is indeed a very useful matrix for evaluating a firm's strong points.
The Strengths and Weaknesses portion focus on the internal Environment with the Strengths looking at what the company does better than other companies and has a competitive advantage in while weaknesses look at where the company is lacking.
The Threats and Opportunities focus on the External Environment. The Threats refer to any and every potential source of negative effects on the company while Opportunities are the potential chances that a company can capitalise on to make themselves more profitable.
Classifying the above,
1. Post office closings. OPPORTUNITIES
This is because JPM as a Delivery Service can then take over the customers that can no longer use the closed Post Offices.
2. JPM has the superior information technology infrastructure. STRENGTHS.
This is an area that JPM excels in making it a strength.
3. Increasing demand for international packages. OPPORTUNITIES.
This is a chance for JPM to grow as they can capitalise on this increased demand to increase profitability.
4. JPM has an excellent workforce and human resource department. STRENGTH.
JPM has a strength in this area because this is something that they are good at.
5. Potential global economic recession. THREATS.
This is a Threat to JPM as it could potentially affect their business negatively.
6. JPM has increasing labor costs. WEAKNESSES.
This is an internal problem that is a weakness for JPM. Rising labour costs means lower profits so they should be careful.
7. JPM has less fuel-efficient planes. WEAKNESSES.
Less fuel efficient planes means that they burn more fuel to deliver goods around the world so they have more expenses. This is a weakness that needs to be curtailed.
8. Increasing fuel costs due to turmoil in the Middle East. THREATS.
This is a threat because it is from the External Environment but threatens to increase the costs of deliveries for JPM.
Berk Company produces three products: Tic, Tac, and Toe. Tic requires 160 machine setups, Tac requires 150 setups, and Toe requires 190 setups. Berk has identified an activity cost pool with allocated overhead of $32,000 for which the cost driver is machine setups. How much overhead is assigned to the Tic product?
Answer:
Overhead assigned to Tic= $10,240
Explanation:
Activity-based costing is a form of absorption costing where overheads are charged to product using cost drivers.
Under this method, overheads are first analyzed and categorized by the activities responsible for them and then charged to product based on the amount of benefits enjoyed using cost drivers.
Activity rate per driver is calculated as:
Activity overhead for the period / Total cost drivers for the period
Set -up activity overhead = $32,000
Total expected cost drivers for activity set up = sum of the set ups for the three products
Total set ups= 160 +150 + 190 = 500 set ups
Overhead rate per set up
= $32,000/500 set ups
= $64 per set up
Overhead assigned to Tic = Overhead rate per set up × No of setups for TIC
= $64 per setup ×160=$10,240
Overhead assigned to Tic= $10,240
The Caraway Seed Company grows heirloom tomatoes and sells their seeds. The heirloom tomato plants are preferred by many growers for their superior flavor. At the end of the most recent year the firm had current assets of $49,700, net fixed assets of $248,300, current liabilities of $28,400, and long-term debt of $101,600.
A. Calculate Caraway's stockholders' equity.B. What is the firm's net working capital?
Answer:
A.
$168,000
B.
$21,300
Explanation:
A.
As per accounting equation
Assets = Liabilities + Equity
Equity = Assets - Liabilities
Placing values in the equation
Equity = ( Current assets + Net Fixed Assets ) - ( Current Liabilities + Long term debt )
Equity = ( $49,700 + 248,300 ) - ( 28,400 + 101,600)
Equity = $168,000
B.
Net Working capital is the net of current assets and current liabilities of the company.
Use following formula of net working capital
Net working capital = Current assets - current liabilities
Net working capital = $49,700 - 28,400
Net working capital = $21,300
Light-emitting diode (LED) light bulbs have become required in recent years, but do they make financial sense? Suppose a typical 60-watt incandescent light bulb costs $.45 and lasts for 1,000 hours. A 7-watt LED, which provides the same light, costs $2.25 and lasts for 40,000 hours. A kilowatt-hour of electricity costs $.121, which is about the national average. A kilowatt-hour is 1,000 watts for 1 hour. However, electricity costs actually vary quite a bit depending on location and user type (you can get information on your rates from your local power company). An industrial user in West Virginia might pay $.04 per kilowatt-hour whereas a residential user in Hawaii might pay $.25. You require a 10 percent return and use a light fixture 500 hours per year. What is the break-even cost per kilowatt-hour?
Answer:
(A) For incandescent bulb, your break even cost is $32.67
(B) With LED bulb, your break even cost is $3.8115
Conclusion: It makes financial sense to use LED bulbs.
Explanation:
We start by checking the cost of your electricity bill when you use incandescent bulb and when you use LED bulb.
Since your answers are to be in kilowatt hour, we transform the watt measurement of the bulbs into kilowatt thus:
60watt incandescent bulb = 0.06kw
7watt led bulb = 0.007kw
National average cost of electricity per kilowatt hour is $1.21
Cost per kWh using incandescent bulb is 1.21 × 0.06 = $0.0726
Cost per kWh using led bulb is 1.21 × 0.007 = $0.00847
(A) WITH INCANDESCENT
0.06kw × 500hrs/year = 30kwhrs/year
Cost of electricity bill = 1.21 × 30 =$36.3
Your 10% return = $3.63
Break even cost per year, in kWh is = 36.3 - 3.63 = $32.67
(B) WITH LED
0.007kw × 500hrs/year = 3.5kwhrs/year
Cost of electricity bill = 1.21 × 3.5 = $4.235
Your 10% return = $0.4235
Break even cost per year in kWh is = 4.235 - 0.4235
(C) The incandescent bulb costs $0.45 but draws you a bill of $32.67 a year WHILE the led bulb costs $2.25 but draws you a bill of $3.8115
We conclude hence, that light-emitting diode bulbs make financial sense. Overlook the cost of purchasing the bulb because it uses less kilowatts per hour and draws you a very low bill, compared to the incandescent bulb!
Marx and Springsteen provides hair-cutting services in the local community. In February, the business cut the hair of 200 clients, earned $ 5,100 in revenues, and incurred the following operating costs:
Hair saloon expense: $500
Building rent expense: 1458
Utilities expense: 200
Depreciation expense--- Equipment: 50
Required:
What was the cost of service to provide one haircut?
Answer:
Cost of service to provide one haircut is $ 11.04
Explanation:
Hair saloon expense: $500
Building rent expense: $1,458
Utilities expense: $200
Depreciation expense --- Equipment: $50
Total operating cost = Hair saloon expense + Building rent expense + Utilities expense + Depreciation expense
= $500 + $1,458 + $200 + $50
= $ 2,208
Total hair cuts = 200
Therefore, cost per hair cut = Total operating cost ÷ Total hair cuts
= $2,208 ÷ $200
= $ 11.04
Jamal just inherited some money from a distant cousin overseas. He would like to put some of it in a bond and is looking at two choices. Bond A has five years to maturity, a semiannual coupon of 6% and a face value of $1,000. Bond B has ten years to maturity, an annual coupon of 4% and a face value of $1,000. Jamal knows that the rate expected in the marketplace for investments similar to these is 5%.
1. What is the present value of the coupon stream on each bond?
2. What is the present value of the face value on each bond?
3. What is the total value of each bond?
4. If Jamal sees the two bonds in the Wall Street Journal and they are both priced at 99, which bond should he buy?
Answer:
i. = $262.56 , = $308.87
ii. = $781.198 , = $613.91
iii. Bond A = $1,043.76 , Bond B = $922.78
Explanation:
(i) Present Value of Coupon Payment
Bond A :- Semiannual Coupon Amount = $1,000 * 6% * 6 / 12 = $30
Total Semiannual Period = 5 * 2 = 10
Semiannual Interest = 5% / 2 = 2.5%
Present Value of Coupon Payment = $30 * PVAF (2.5% , 10)
= $30 * 8.752
= $262.56
Bond B :- Annual Coupon Amount = $1,000 * 4% = $40
Annual Periods = 10
Annual Interest = 5%
Present Value of Coupon Payment = $40 * PVAF ( 5% , 10)
= $40 * 7.72
= $308.87
(ii) Present Value of Face Value of Bond
Bond A = $1,000 * PVF (2.5% , 10 periods)
= $1,000 * 0.7812
= $781.198
Bond B = $1,000 * PVF (5% , 10)
= $1,000 * 0.6139
= $613.91
(iii) Total Value of Each Bond
Bond A = $262.56 + $781.198 = $1,043.76
Bond B = $308.87 + $613.91 = $922.78
(iv)If Jamal sees the two bonds in the Wall Street Journal and they are both priced at 99, he should consider:
If the Bond Current Price is lower than Bond Fair Price then he should Buy the Bond
If the Bond Current Price is higher than Bond Fair Price then he should not buy the bond
Market Price of Bond = $99
He should buy Bond A But not Bond B
Following are the accounts and balances (in random order) from the adjusted trial balance of Stark Company.
Notes payable $11,000
prepaid insurance 2500
Interest expense 500
Accounts payable 1500
Wages payable 400
Cash 10,000
Wages expense 7500
Insurance expense 1800
Common stock 10,000
Retained earnings 14,800
Services revenue 20,000
Accumulated depreciation—BuiIdings $15,000
Accounts receivable 4000
Utilities expense 1300
Interest payable 100
Unearned revenue 800
Supplies expense 200
Buildings 40,000
Dividends 3,000
Depreciation expense—BuiIdings 2,000
Supplies 800
Required:
Prepare the:
a. Income statement
b. Statement of retained earnings for the year ended December 31
c. Balance sheet at December 31. The Retained Earnings account balance was $118,800 on December 31 of the prior year.
Answer:
a. Income statement
Services revenue 20,000
Unearned revenue 800
Total Revenue 20,800
Less Expenses :
Interest expense 500
Wages expense 7,500
Insurance expense 1,800
Utilities expense 1,300
Supplies expense 200
Depreciation expense—BuiIdings 2,000 (13,300)
Net Income 7,500
b. Statement of retained earnings for the year ended December 31
Retained earnings at the beginning of the year 14,800
Add Profit for the year 7,500
Less Dividends Paid (3,000)
Retained earnings at the end of the year 19,300
c. Balance sheet at December 31.
Non - Current Assets
Buildings 40,000
Accumulated depreciation—Buildings (15,000)
Total Non - Current Assets 25,000
Current Assets
Supplies 800
Accounts receivable 4,000
Prepaid insurance 2,500
Cash 10,000
Total Current Assets 17,300
Total Assets 42,300
Equity and Liabilities
Equity
Common stock 10,000
Retained Earnings 19,300
Total Equity 29,300
Non - Current Liabilities
Notes payable 11,000
Total Non - Current Liabilities 11,000
Current Liabilities
Accounts payable 1,500
Wages payable 400
Interest payable 100
Total Current Liabilities 2,000
Total Equity and Liabilities 42,300
Explanation:
The Profit for the year is included in the calculation of the Retained Earnings figure for the end of the year. The retained earnings figure at end of the year is part of Equity in the Balance Sheet.
(Note Income Statement Consist of Revenue Expenditures only, whilst Balance Sheet consists of Assets, Equity and Liabilities).
An engineer analyzing cost data about hydrogen sulfide monitors discovered that the information for the first three years was missing. However, he knew the cost in year 4 was $1250 and that it increased by 5% each year thereafter. If the same trend applied to the first three years, the cost in year 1 was:
Answer:
Find below full question:
An engineer analyzing cost data about hydrogen sulfide monitors discovered that the information for the first three years was missing. However, he knew the cost in year 4 was $1250 and that it increased by 5% each year thereafter. If the same trend applied to the first three years, the cost in year 1 was:
a. $1312.50
b. $1190.48
c. $1028.38
d. $1079.80
Option D,$ 1,079.80 is correct
Explanation:
The present value formula can be used to determine the cost in year one as follows:
PV=FV*(1+r)^-n
FV is the future cost in year 4 which is $1,250
r is the growth rate of cost per year which is 5%
n is the duration of time involved,it is 3 because the difference between year 4 and year 1 is 3
PV=$1250*(1+5%)^-3
PV=$1250*(1.05)^-3
PV=$1250*0.863837599
PV=$ 1,079.80
The cost of the hydrogen sulfide monitor in year one is $ 1,079.80
In essence option D,$ 1,079.80 is correct
Which is not an example of an intangible asset?
1_A trademark
2_A computer
3_A patent
4_A copyright
An intangible asset excludes a computer. Thus the correct answer is (2).
What is an intangible asset?An intangible asset is referred to as a thing that an individual is unable to see or touch. An intangible asset is a lack of physical appearance. One can not transfer them from one location to another.
One can able touch or see a personal computer so it is not an intangible asset. Therefore, option (2) is appropriate.
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Technology transfer agreements: Select one: a. protect "distinctive" or "famous" marks from unauthorized uses only when confusion is likely to occur. b. permit a company to quickly penetrate a foreign market without incurring the substantial financial and legal risks associated with direct investment. c. prevent an intellectual property owner from granting to another the right to use protected technology in return for some form of compensation. d. assert that priority of trademark rights in the United States depends upon the priority of use anywhere else in the world.
Answer:
b. permit a company to quickly penetrate a foreign market without incurring the substantial financial and legal risks associated with direct investment.
Explanation:
Technology transfer agreements can be defined as a contractual agreement between two parties, the licensor (rightful owner of the patent or trademark) and lincesee, granting them the legal rights to use an intellectual property under the stated terms and conditions binding the contract.
An intellectual property is an embodiment of the creative work such as trademark, patent or copyright of an individual, usually an inventor.
Technology transfer agreements allows an intellectual property owner to license or grant to another the right to use its protected technology in return for some form of compensation and permit a company to quickly penetrate a foreign market without incurring the substantial financial and legal risks associated with direct investment because this will further enhance foreign direct investments, expansion and deeply foster world trade among countries.
Accounting Cycle Review 15 a-e
Cullumber Corporation’s trial balance at December 31, 2020, is presented below. All 2020 transactions have been recorded except for the items described below.
Debit
Credit
Cash
$26,100
Accounts Receivable
60,000
Inventory
23,300
Land
67,200
Buildings
81,700
Equipment
41,000
Allowance for Doubtful Accounts
$470
Accumulated Depreciation—Buildings
25,500
Accumulated Depreciation—Equipment
14,200
Accounts Payable
19,500
Interest Payable
–0–
Dividends Payable
–0–
Unearned Rent Revenue
7,200
Bonds Payable (10%)
44,000
Common Stock ($10 par)
28,000
Paid-in Capital in Excess of Par—Common Stock
5,600
Preferred Stock ($20 par)
–0–
Paid-in Capital in Excess of Par—Preferred Stock
–0–
Retained Earnings
65,330
Treasury Stock
–0–
Cash Dividends
–0–
Sales Revenue
570,000
Rent Revenue
–0–
Bad Debt Expense
–0–
Interest Expense
–0–
Cost of Goods Sold
380,000
Depreciation Expense
–0–
Other Operating Expenses
36,900
Salaries and Wages Expense
63,600
Total
$779,800
$779,800
Unrecorded transactions and adjustments:
1. On January 1, 2020, Cullumber issued 1,000 shares of $20 par, 6% preferred stock for $23,000.
2. On January 1, 2020, Cullumber also issued 1,000 shares of common stock for $24,000.
3. Cullumber reacquired 260 shares of its common stock on July 1, 2020, for $46 per share.
4. On December 31, 2020, Cullumber declared the annual cash dividend on the preferred stock and a $1.30 per share dividend on the outstanding common stock, all payable on January 15, 2021.
5. Cullumber estimates that uncollectible accounts receivable at year-end is $6,000.
6. The building is being depreciated using the straight-line method over 30 years. The salvage value is $5,200.
7. The equipment is being depreciated using the straight-line method over 10 years. The salvage value is $4,100.
8. The unearned rent was collected on October 1, 2020. It was receipt of 4 months’ rent in advance (October 1, 2020 through January 31, 2021).
9. The 10% bonds payable pay interest every January 1. The interest for the 12 months ended December 31, 2020, has not been paid or recorded.
(Ignore income taxes.)
Requirment: Prepare a Balance Sheet as at December 31, 2020.
Answer:
Cullumber CorporationBalance Sheet as of December 31, 2020:Current Assets:
Cash $61,140
Accounts Receivable 60,000
less allowance for doubtful 6,000 54,000
Inventory 23,300 138,440
Non-current Assets:
Land 67,200
Buildings 81,700
Accumulated Depreciation 28,050 53,650
Equipment 41,000
Accumulated Depreciation 17,890 23,110 143,960
Total Assets $282,400
Liabilities + Equity:
Current Liabilities:
Accounts Payable 19,500
Interest Payable 4,400
Dividends Payable 5,802
Unearned Rent Revenue 1,800 31,502
Non-current Liabilities:
Bonds Payable (10%) 44,000 $75,502
Equity:
Common Stock ($10 par) 38,000
Paid-in Capital in Excess of Par—Common 10,240
Preferred Stock ($20 par) 20,000
Paid-in Capital in Excess of Par—Preferred 3,000
Retained Earnings 138,258
Treasury Stock (2,600) 206,898
Total Liabilities + Equity $282,400
Explanation:
a) Cullumber Corporation's Unadjusted Trial Balance as of December 31, 2020:
Debit Credit
Cash $26,100
Accounts Receivable 60,000
Inventory 23,300
Land 67,200
Buildings 81,700
Equipment 41,000
Allowance for Doubtful Accounts $470
Accumulated Depreciation—Buildings 25,500
Accumulated Depreciation—Equipment 14,200
Accounts Payable 19,500
Interest Payable –0–
Dividends Payable –0–
Unearned Rent Revenue 7,200
Bonds Payable (10%) 44,000
Common Stock ($10 par) 28,000
Paid-in Capital in Excess of Par—Common Stock 5,600
Preferred Stock ($20 par) –0–
Paid-in Capital in Excess of Par—Preferred Stock –0–
Retained Earnings 65,330
Treasury Stock –0–
Cash Dividends –0–
Sales Revenue 570,000
Rent Revenue –0–
Bad Debt Expense –0–
Interest Expense –0–
Cost of Goods Sold 380,000
Depreciation Expense –0–
Other Operating Expenses 36,900
Salaries and Wages Expense 63,600
Total $779,800 $779,800
b) Cullumber Corporation's Adjusted Trial Balance as of December 31, 2020:
Debit Credit
Cash $61,140
Accounts Receivable 60,000
Inventory 23,300
Land 67,200
Buildings 81,700
Equipment 41,000
Allowance for Doubtful Accounts $6,000
Accumulated Depreciation—Buildings 28,050
Accumulated Depreciation—Equipment 17,890
Accounts Payable 19,500
Interest Payable 4,400
Dividends Payable 5,802
Unearned Rent Revenue 1,800
Bonds Payable (10%) 44,000
Common Stock ($10 par) 38,000
Paid-in Capital in Excess of Par—Common Stock 10,240
Preferred Stock ($20 par) 20,000
Paid-in Capital in Excess of Par—Preferred Stock 3,000
Retained Earnings 65,330
Treasury Stock 2,600
Cash Dividends 5,802
Sales Revenue 570,000
Rent Revenue 5,400
Bad Debt Expense 5,530
Interest Expense 4,400
Cost of Goods Sold 380,000
Depreciation Expense 6,240
Other Operating Expenses 36,900
Salaries and Wages Expense 63,600
Total $839,412 $839,412
c) Cash Account Adjustment:
Balance as per Trial Balance $26,100
Preferred Stock 23,000
Common Stock 24,000
Treasury Stock (11,960)
Adjusted Cash balance $61,140
d) Income Statement
Sales Revenue $570,000
Cost of goods sold 380,000
Gross profit $190,000
Rent Revenue 5,400
Total $195,400
less expenses:
Bad Debt Expense 5,530
Interest Expense 4,400
Depreciation Expense 6,240
Other Operating Expenses 36,900
Salaries and Wages Expense 63,600 116,670
Net Income $78,730
Retained Earnings 65,330
Dividends (5802)
Retained Earnings carried forward $138,258
A project manager is preparing two documents for risk management. One contains sources of overall project risk and also summary information on individual risks. The second describes individual risks identified. What name should the project manager give to the first document
Answer: Risk Report
Explanation:
A Risk Report for a project contains all the risk that the project is exposed to. This includes both project risk as well as individual risks related to the components projects in the overall project.
A Risk Report details the risks such as Supplier failure, Inflation, Pending Government Regulations and the like. It then takes these and summarizes them for presentation to those who require this information in the company so that appropriate safeguards may be set up and precautions taken.
This describes the first document and so should be what the Project Manager names it.
Wings Co. budgeted $572,000 manufacturing direct wages, 2,500 direct labor hours, and had the following manufacturing overhead: Overhead Cost Pool Budgeted Overhead Cost Budgeted Level for Cost Driver Overhead Cost Driver Materials handling $ 196,000 4,900 pounds Weight of materials Machine setup 19,600 560 setups Number of setups Machine repair 1,600 32,000 machine hours Machine hours Inspections 16,500 330 inspections Number of inspections Requirements for Job #971 which manufactured 4 units of product: Direct labor 20 hours Direct materials 220 pounds Machine setup 30 setups Machine hours 16,700 machine hours Inspections 15 inspections The total overhead of Job #971 under the ABC costing is:
Answer:
Total allocated overhead= $11,435
Explanation:
Giving the following information:
Materials handling $196,000 4,900 pounds
Machine setup $19,600 560 setups
Machine repair $1,600 32,000 machine hours
Inspections $16,500 330 inspections
Job 971
Direct labor 20 hours
Direct materials 220 pounds
Machine setup 30 setups
Machine hours 16,700 machine hours
Inspections 15 inspections
First, we need to calculate the estimated overhead rate for each activity:
Estimated manufacturing overhead rate= total estimated overhead costs for the period/ total amount of allocation base
Materials handling= 196,000/4,900= $40 per pound
Machine setup= 19,600/560= $35 per setup
Machine repair= 1,600/32,000= $0.05 per machine hour
Inspections= 16,500/330= $50 per inspection
Now, we can allocate overhead:
Allocated MOH= Estimated manufacturing overhead rate* Actual amount of allocation base
Materials handling= 40*220= 8,800
Machine setup= 35*30= 1,050
Machine repair= 0.05*16,700=835
Inspections= 50*15= 750
Total allocated overhead= $11,435
