Presented below is information related to equipment owned by Bramble Company at December 31, 2020. Cost $10,260,000 Accumulated depreciation to date 1,140,000 Expected future net cash flows 7,980,000 Fair value 5,472,000 Bramble intends to dispose of the equipment in the coming year. It is expected that the cost of disposal will be $22,800. As of December 31, 2020, the equipment has a remaining useful life of 5 years.Prepare the journal entry (if any) to record the impairment of the asset at December 31, 2020

Answers

Answer 1

Answer and Explanation:

The journal entry to record the impairment of the loss is shown below:

Loss on impairment Dr $3,670,800  

         To Accumulated depreciation - Equipment $3,670,800

(Being the loss on impairment is recorded)

For recording this we debited the loss on impairment as it increased the losses and credited the accumulated depreciation as it increased the balance of accumulated depreciation

Working note:

Cost $10,260,000

Less: Accumulated depreciation -$1,140,000  

Carrying Amount $9,120,000  

Less Fair value -$5,472,000  

Plus: Cost of disposal $22,800  

Loss on impairment $3,670,800


Related Questions

Privacy:_______.
a. is an absolute value.
b. must be respected if we are to function as complete, self-governing agents.
c. is something that employees today don't care about.
d. is guaranteed by Article 3, section 3, of the Constitution.

Answers

Answer: b. must be respected if we are to function as complete, self-governing agents.

Explanation:

Privacy enables humans to be able to figure out who they are and what they want in life. By giving a person the right to privacy instead of interfering in their lives you are essentially giving them the power to make their own decisions and trusting them to do well with this right.

By respecting privacy therefore, humans are better able to function as complete and independent agents who can take charge of their own lives without having to worry about interference with the intent to influence.

Heidee Corp. and Leaudy Corp. have identical assets, sales, interest rates paid on their debt, tax rates, and EBIT. However, Heidee uses more debt than Leaudy. Which of the following statements is CORRECT?
A) Heidee would have the higher net income as shown on the income statement.
B) Without more information, we cannot tell if Heidee or Leaudy would have a higher or lower net income.
C) Heidee would have the lower equity multiplier for use in the Du Pont equation.
D) Heidee would have to pay more in income taxes.
E) Heidee would have the lower net income as shown on the income statement.

Answers

Answer:

E) Heidee would have the lower net income as shown on the income statement.

Explanation:

Heidee and Leaudy have the same Earning Before Interest and Taxes (EBIT).

They both also have the same interest rate paid on debt.

So if Heidee uses more of their debt than Leaudy it means they will incur more interest payment on debt.

This will result in less income for the company.

On the other hand Leaudy uses less debt so their interest expense is low and income is higher.

Heidee would have the lower net income as shown on the income statement.

Ford Motor Company is discussing new ways to recapitalize the firm and raise additional capital. Its current capital structure has a 20% weight in equity, 10% in preferred stock, and 70% in debt. The cost of equity capital is 14%, the cost of preferred stock is 10%, and the pretax cost of debt is 9%. What is the weighted average cost of capital for Ford if its marginal tax rate is 30%?

Answers

Answer: 8.21%

Explanation:

The Weighted Average Cost of Capital(WACC) simply put, is the rate at which a company pays those who have invested in it and financed it be it debt holders or equity holders.

The rates in question are averaged according to the proportion by which the company uses the said capital. This results in the following formula,

WACC= [(Wd*Rd) * (1-Tax) + (We * Re) +(Wp * Rp )]

Where,

Wd is the Weight of debt

We is the weight of common Equity

Wp is the weight of preferred Equity

Rd is the Pre-tax cost of debt

Re is the cost of common Equity

Rp is the cost of Preferred equity.

Note: Sometimes you will be given the After - tax cost of debt. In which case you will not need to include the tax adjustment of (1 - tax).

Calculating,

= [( 70% * 9%) * ( 1 - 30%) + (20% * 14%) + (10% * 10%) ]

= 0.0441 + 0.028 + 0.01

= 0.0821

= 8.21%

Which of the following is a macro factor underlying the trend toward greater globalization?A. increase in diversity in consumer tastes and preferencesB. increase in nationalization of private organizationsC. dramatic developments in information processing and other technologiesD. rise of communism across the globeE. increase in trade regulations across the globe

Answers

Answer:

The correct answer is Option C (dramatic developments in information processing and other technologies)

Explanation:

Globalization caused by several factors, example are improved markets, transportation, policies and cultures, improved technology, can be explained as the process by which different parts of the world are connected due to the spread of ideas, people, technology, goods. Types of globalization are: Economic globalization, political globalization, and cultural globalization.

Factors underlying the trend toward greater globalization are micro level  (individual) and macro level (society). Macro factors include, barriers to distribution of good and services among countries, and technological change, which is very important as it greatly affects globalization.

Dramatic developments in information processing and other technologies makes it easier to communicate and share information in order to conduct business internationally, and do other greater things too.

You work for a company that ends their fiscal year on September 30th. The company billed its customers for services provided in August, but they have not yet received payment for these services. Assuming the company uses accrual accounting, how should this transaction be recorded

Answers

Answer:

Debit Accounts receivable

Credit Service Revenue

Being entries for services rendered to customers in August

Explanation:

Under accrual accounting, revenue is recognized once it is earned which is when the goods or services have been delivered to the customers such that the risk and reward or control of the goods/services now lies with the customer.

This is different from the cash basis of accounting where revenue is only recognized when cash has been received.

In accrual accounting, When revenue is earned but cash is yet to be received,

Debit Accounts receivable

Credit Revenue account

On receipt of cash,

Debit Cash account  

Credit Accounts receivable.

John, a manager with Whole Foods Grocery Company, has just participated in a meeting that looked at future trends in the grocery business, and identified new challenges and opportunities for Whole Foods. John's participation in this meeting is an example of the __________ function of management.

Answers

Answer:

Planning

Explanation:

Planning is a management function that involves creation of a detailed plan of action in order to attain a set goals.

Planning is a continous process that management performs to modify mode of operations so that goals are better achieved.

In this scenario John participated in a meeting that looked at future trends in the grocery business, and identified new challenges and opportunities for Whole Foods.

This is an action that involves planning for future growth of the company, while identifying challenges and opportunities that will be faced.

Match the following terms with the best definition given.
a. Currently attainable standard
b. Favorable cost variance
c. Ideal standard
d. Nonfinancial performance measure
e. Unfavorable cost variance


- An example is number of customer complaints.
- Actual cost > standard cost at actual volumes
- Actual cost < standard cost at actual volumes
- Normal standard
- Theoretical standard

Answers

Answer: Please refer to Explanation

Explanation:

a. Currently attainable standard - Normal standard.

When a company says that a certain level of production is it's Currently Attainable Standard, they mean that this is the normal standard that they are able to operate in. That it is the standard that they have the actual capacity to produce at and so is normal for them.

b. Favorable cost variance - Actual cost < standard cost at actual volumes.

Variance cost in production is a measure that compares the cost that a company budgets to be able to produce a good vs the actual amount it takes to produce the said good. When the Budget is higher than the actual cost of production, it is said to be a FAVOURABLE balance because the budget was not exceeded.

c. Ideal standard - Theoretical standard.

This is the Standard that the company would like to be producing at to make a certain level of profit. It is usually different from the Normal Standard and the goal of most of not all companies is to work towards attaining their Ideal standard. They usually make Theoretical forecasts about their Ideal Standard.

d. Nonfinancial performance measure - An example is number of customer complaints.

There are many ways to measure performance but those ways are usually group into 2 categories being Financial and Non-financial measures of performance. The number of customer complaints that a business gets is a type of Non-financial Performance. As the intended market for a product, Customers are the most important appraisers of a Company's goods and services and if there are relatively low customer complaints, this shows that the company is performing well as they are able to please their customers.

e. Unfavorable cost variance - Actual cost > standard cost at actual volumes

As mentioned before, Variance helps determine the cost of production vs the budgeted cost of production. When a cost Variance is labeled as Unfavourable, it means that the Actual Cost exceeded the Budget of the production activity. This is unfavourable because it means that the business had to spend more than it thought it would on production thereby harming it's profit margins.

Calculate the firm’s WACC (using 2018 numbers). (You will need to collect information on the long-term debt and common stock equity from the Balance Sheet. The firm has no preferred stock).
Use the WACC to calculate NPV and evaluate IRR for proposed capital budgeting projects. Assume the projects are mutually exclusive and the firm has the money available to fund the project
A 7.5% percent annual coupon bond with 20 years to maturity, selling for 104 percent of par. The bonds make semiannual payments. What is the before tax cost of debt? If the tax rate is 40%, what is the after-tax cost of debt?
The firm’s beta is 1.2. The risk-free rate is 4.0% and the expected market return is 9%. What is the cost of equity using CAPM?

Answers

Answer:

Before tax cost of debt is 7.12%

After tax cost of debt is 4.27%

Cost of equity is 10%

Explanation:

The before-tax cost of debt can be determined using excel rate formula as found below:

=rate(nper,pmt,-pv,fv)

nper is the number of semiannual payments the bond has i.e 20*2=40

pmt is the amount of semiannual payment=$1000*7.5%*6/12=$ 37.50  

pv is the current price =$1000*104%=$1,040.00  

fv is the face value of $1000

=rate(40,37.50,-1040,1000)=3.56%

The 3.56% is semiannual yield, hence 7.12% per year (3.56%*2)

After-tax cost of debt=7.12%*(1-t) where is the tax rate of 40% or 0.4

after-tax cost of debt=7.12%*(1-0.40)=4.27%

Cost of equity is determined using the below CAPM formula:

Ke=Rf+Beta*(Mr-Rf)

Rf is the risk free rate of 4%

Beta is 1.2

Mr is the market return of 9%

Ke=4%+1.2(9%-4%)=10.00%

Agency theory presents some important managerial considerations. Broadly speaking, governance mechanisms need to assure alignment of incentives between principals and agents. The text provides an example of financial institutions in the situation of profits remaining within the firm while losses are paid by the public as a description of:________.A) a board of directors' problem.B) a challenge of information symmetry.C) a moral hazard problem.D) a private information problem.E) an adverse selection problem.

Answers

Answer: a moral hazard problem

Explanation:

Agency theory is a principle used to explain and resolve the issues in the relationship that exists between business principals and their agents. The relationship is usually the one between the shareholders who act as the principals, and the company executives who act as the agents.

When banks are bailed out through public funds for the excessive risky mortgage obligations or undue risk taking, this lead to increase in moral hazard. The gains of successful risk taking will stay with the private firm and the risks would be shared with the other parties.

A registered investment adviser lives in State X. The adviser does business with 1 client in State A and 1 client in State B. The adviser gives seminars about investing to groups of potential customers in State C. The adviser is required to register in:

Answers

Answer:

State X and C

Explanation:

Remember, the clients themselves stay in state A and B, not the investment advisor. According to the requirements of the law, the investment advisor is to register in the state where he gives seminars–State C, and the state in which he resides–X.

Blank Corporation acquired 100 percent of Faith Corporation’s common stock on December 31, 20X2, for $150,000. Data from the balance sheets of the two companies included the following amounts as of the date of acquisition:
Item Blank Corporation Faith Corporation
Assets
Cash $ 65,000 $ 18,000
Accounts Receivable 87,000 37,000
Inventory 110,000 60,000
Buildings & Equipment (net) 220,000 150,000
Investment in Faith Corporation Stock 150,000
Total Assets $ 632,000 $ 265,000
Liabilities and Stockholders’ Equity
Accounts Payable $ 92,000 $ 35,000
Notes Payable 150,000 80,000
Common Stock 100,000 60,000
Retained Earnings 290,000 90,000
Total Liabilities & Stockholders’ Equity $ 632,000 $ 265,000
At the date of the business combination, the book values of Faith’s net assets and liabilities approximated fair value. Assume that Faith Corporation’s accumulated depreciation on buildings and equipment on the acquisition date was $30,000.
Required:
a. Give the consolidation entry or entries needed to prepare a consolidated balance sheet immediately following the business combination. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)
b. Prepare a consolidated balance sheet worksheet. (Values in the first two columns (the "parent" and "subsidiary" balances) that are to be deducted should be indicated with a minus sign, while all values in the "Consolidation Entries" columns should be entered as positive values. For accounts where multiple adjusting entries are required, combine all debit entries into one amount and enter this amount in the debit column of the worksheet. Similarly, combine all credit entries into one amount and enter this amount in the credit column of the worksheet.)

Answers

Answer:

A1.

Dr Investment 150,000

Cr Cash 150,000

2.

Dr Accumulated Depreciation 30,000

Cr Building & Equipment 30,000

B.Total Assets $ 567,000 $ 265,000 $30,000 $180,000 $747,000

Total Liabilities & Stockholders’ Equity $ 632,000 $ 265,000 $150,000 $0 $ 747,000

Explanation:

a) Blank Corporation Journal Entries:

1.

Dr Investment 150,000

Cr Cash 150,000

2.

Dr Accumulated Depreciation 30,000

Cr Building & Equipment 30,000

b)

BLANK AND SUBSIDIARY

Consolidated Balance sheet Worksheet

December 31, 20x2

Blank Faith Debit Credit Consolidated

Cash $ 65,000 $ 18,000 $0 $0 $83,000

Accounts Receivable

87,000 37,000 $0 $0 $124,000

Inventory 110,000 60,000 $0 $0$ $170,000

Buildings & Equipment (net) 220,000 150,000 30,000 30,000 370,000

Investment in Faith Corporation Stock

150,000 $0 $0 150,000 $0

Total Assets $ 567,000 $ 265,000 $30,000 $180,000 $747,000

Blank Faith Debit Credit Consolidated

Liabilities and Stockholders’ Equity

Accounts Payable $ 92,000 $ 35,000 $0 $0 $127,000

Notes Payable 150,000 80,000 $0 $0 $230,000

Common Stock 100,000 60,000 $60,000 $0 $100,000

Retained Earnings 290,000 90,000 $90,000 $0 $290,000

Total Liabilities & Stockholders’ Equity $ 632,000 $ 265,000 $150,000 $0 $ 747,000

For​ 2018, Winters Manufacturing uses machineminushours as the only overhead costminusallocation base. The direct cost rate is $ 6 per unit. The selling price of the product is $ 21. The estimated manufacturing overhead costs are $ 275 comma 000 and estimated 40 comma 000 machine hours. The actual manufacturing overhead costs are $ 350 comma 000 and actual machine hours are 50 comma 000. What is the profit margin earned if each unit requires two machineminus​hours?

Answers

Answer:

Profit margin per unit= $1.25

Explanation:

Giving the following information:

The direct cost rate is $ 6 per unit.

The selling price of the product is $ 21.

Estimated manufacturing overhead= $275,000

Estimated machine-hours= 40,000

Actual machine hours are 50,000

First, we need to calculate the predetermined overhead rate:

Predetermined manufacturing overhead rate= total estimated overhead costs for the period/ total amount of allocation base

Predetermined manufacturing overhead rate= 275,000/40,000= $6.875 per machine hour

Now, we can allocate overhead:

Allocated MOH= Estimated manufacturing overhead rate* Actual amount of allocation base

Allocated MOH= 6.875*2= $13.75

Finally, the profit margin:

Profit margin per unit= 21 - 6 - 13.75= $1.25

*Reintermediation takes place when Intermediaries provide only matching services between buyers and sellers. O Disintermediated entitles or newcomers take on new Intermediary roles O Intermediaries provide only relevant information about demand O Disintermediated entitles or newcomers take on existing intermediary roles O​

Answers

Answer: Disintermediated entitles or newcomers take on new Intermediary roles

Explanation:

Disintermediation refers to, for example, stockbrokers who only execute trade manually being left behind because of the development of online transactions.

However, new developments might bring new intermediary roles. Following our example, brokers who turn to electronic intermediation (or newcomers who take on the new intermediary role) prosper through reintermediation

Weisman, Inc. uses activity-based costing as the basis for information to set prices for its six lines of seasonal coats.
Activity Cost Pools Estimated Overhead Estimated Use of Cost Drivers per
Activity
Designing $455,000 14,000 designer hours
Sizing and cutting 3,948,000 168,000 machine hours
Stitching and trimming 1,479,725 78,500 labor hours
Wrapping and packing 333,000 30,000 finished units
Compute the activity-based overhead rates using the following budgeted data for each of the activity cost pools.
Activity-based overhead rates
Designing $ per designer hour
Sizing and cutting $ per machine hour
Stitching and trimming $ per labor hour
Wrapping and packing $ per finished unit

Answers

Answer:

Designing =  $32.50 per designer hour

Sizing and cutting =  $23.50 per machine hour

Stitching and trimming =  $18.85 per labor hour

Wrapping and packing = $11.10 per finished unit

Explanation:

The Activity Based Overhead Costing involves calculation of cost driver rate for each activity center.

Cost Driver Rate = Cost of Activity / Number of Times that Activity is Performed

Designing = $455,000 / 14,000

                 = $32.50

Sizing and cutting = $3,948,000 / 168,000

                              = $23.50

Stitching and trimming = $1,479,725 / 78,500

                                      = $18.85

Wrapping and packing = $333,000 / 30,000

                                      = $11.10

Baka Corporation applies manufacturing overhead on the basis of direct labor-hours. At the beginning of the most recent year, the company based its predetermined overhead rate on total estimated overhead of $243,000 and 8,000 estimated direct labor-hours. Actual manufacturing overhead for the year amounted to $244,200 and actual direct labor-hours were 5,700.The applied manufacturing overhead for the year was closest to:________
a. 229586
b. 234600
c. 242006
d. 236854

Answers

Answer:

Allocated overhead= $173,137.5

Explanation:

Giving the following information:

Estimated overhead= $243,000

Estimated direct-labor hours= 8,000

Actual direct labor-hours were 5,700.

First, we need to calculate the predetermined overhead rate:

Predetermined manufacturing overhead rate= total estimated overhead costs for the period/ total amount of allocation base

Predetermined manufacturing overhead rate= 243,000/8,000

Predetermined manufacturing overhead rate= $30.375 per direct labor hour

Now, we can allocate overhead based on actual direct labor hours:

Allocated MOH= Estimated manufacturing overhead rate* Actual amount of allocation base

Allocated overhead= 30.375*5,700= $173,137.5

Johnson Company uses the allowance method to account for uncollectible accounts receivable. Bad debt expense is established as a percentage of credit sales. For 2018, net credit sales totaled $5,800,000, and the estimated bad debt percentage is 1.40%. The allowance for uncollectible accounts had a credit balance of $55,000 at the beginning of 2018 and $46,500, after adjusting entries, at the end of 2018. Required: 1. What is bad debt expense for 2018 as a percent of net credit sales

Answers

Answer:

Bad debt expense for 2018 is $81,200

Explanation:

2018 net credit sales = $5,800,000

Estimated bad debt percentage = 1.40%.

The allowance for uncollectible accounts had a credit balance of $55,000 at the beginning of 2018 and $46,500, after adjusting entries, at the end of 2018.

Bad debt expense = Estimated bad debt percentage × net credit sales

= 1.40% × $5,800,000

= $ 81,200

On October 1, Natalie King organized Real Solutions, a new consulting firm. On October 31, the company's records show the following items and amounts.

Cash $2,000 Cash dividends $3,360
Accounts receivable 13,000 Consulting fees earned 15,000
Office supplies 4,250 Rent expense 2,550
Land 36,000 Salaries expense 6,000
Office equipment 28,000 Telephone expense 660
Accounts payable 7,500 Miscellaneous expenses 680
Common stock 74,000


Also assume the following:

a. The owner’s initial investment consists of $37,720 cash and $45,940 in land in exchange for its common stock.
b. The company’s $17,710 equipment purchase is paid in cash.
c. The accounts payable balance of $8,230 consists of the $2,990 office supplies purchase and $5,240 in employee salaries yet to be paid.
d. The company’s rent, telephone, and miscellaneous expenses are paid in cash.
e. No cash has been collected on the $13,800 consulting fees earned.

Required:
Using the above information to prepare an October 31 statement of cash flows for Real Solutions.

Answers

Answer:

Statement of cash flows for Real Solutions for the year ended October 31 .

Cash flow from Operating Activities

Net Profit                                                                             $14,660

Adjustment for Changes in Working Capital :

Increase in Accounts receivable                                     ($13,000)

Increase in Accounts Payable                                            $7,500

Net Cash from Operating Activities                                    $9,160

Cash flow from Investing Activities

Purchase of Equipment                                                     ($17,710)

Net Cash from Investing Activities                                    ($17,710)

Cash flow from Financing Activities

Cash dividends                                                                  ($3,360)

Net Cash from Financing Activities                                  ($3,360)

Movement during the Period                                            ($11,910)

Cash and Cash Equivalents at Beginning of the year     $37,720

Cash and Cash Equivalents at End of the year                $25,810

Explanation:

The Indirect Method has been used for the Preparation of Cash flow from  Operating Activities. (opt for this as it is easier to deal with the information given).

Calculation of Net Income for the Year Ended October 31

Revenue :

Consulting fees earned                                15,000

Consulting fees accrued                               13,800

Total Revenue                                               28,800

Less Expenses ;

Office supplies                             4,250

Rent expense                               2,550

Salaries expense                         6,000

Telephone expense                       660

Miscellaneous expenses                680       (14,140)

Net Income                                                    14,660

Flounder Beverage Company reported the following items in the most recent year. Net income $49,400 Dividends paid 6,820 Increase in accounts receivable 10,010 Increase in accounts payable 7,900 Purchase of equipment (capital expenditure) 8,600 Depreciation expense 4,900 Issue of notes payable 20,940 Compute net cash provided by operating activities, the net change in cash during the year.

Answers

Answer:

Net Cash flow from Operating activities  is $52,100

Explanation:

                     Cash Flow from operating activities

          Particulars                                            Amount          Amount

Net Income                                                                              $49,400

Add: Depreciation expenses                          $4,900

Add: Increase in accounts payable                $7,900

Less: Increase in accounts receivable         -($10,100)

                                                                                                  $2,700

Net Cash flow from Operating activities                              $52,100

A municipal bond is issued with a covenant that states "if revenue collections are insufficient, the state legislature has the authority, but not the obligation, to make an annual apportionment of funds necessary to meet debt service requirements." This is a:

Answers

Answer:

Moral obligation bond

Explanation:

Moral obligation bond is defined as a revenue bond that is issued by a municipality or by some other government body.

The benefits of moral obligation bonds are tax exemption and a moral pledge that there will be no default on the bond.

Usually a reserve fund is established in case the issuing body is unable to meet its debt obligations.

In this scenario the bond is issued with a covenant that states "if revenue collections are insufficient, the state legislature has the authority, but not the obligation, to make an annual apportionment of funds necessary to meet debt service requirements."

Asset management ratios are used to measure how effectively a firm manages its assets, by relating the amount a firm has invested in a particular type of asset (or group of assets) to the amount of revenues the asset is generating. Examples of asset management ratios include the average collection period (also called the days sales outstanding ratio), the inventory turnover ratio, the fixed asset turnover ratio, and the total asset turnover ratio.
Consider the following case:
Walker Telecommunications has a quick ratio of 2.00x, $35,550 in cash, $19,750 in accounts receivable, some inventory, total current assets of $79,000, and total current liabilities of $27,650. The company reported annual sales of $200,000 in the most recent annual report.
Over the past year, how often did Walker Telecommunications sell and replace its inventory?
a. 8.01 x
b. 5.24 x
c. 2.85 x
d. 4.75x

Answers

Answer:

Option A 8.01x is the closest answer

Explanation:

Quick ratio =current assets-inventory/current liabilities

let x represent the value of inventory

quick ratio is 2.00

current assets is $79,000

current liabilities is $27,650

2.00=$79,000-x/$27650

2.00*$27,650=$79,000-x

$55,300=$79,000-x

x=$79,000-$55,300

x= $23,700.00  

Inventory turnover =sales/inventory

sales is $200,000

Inventory value is $23,700

inventory turnover ratio=$200,000/$23,700=8.44

The closest option is A,

Jeanie acquires an apartment building in 2008 for $280,000 and sells it for $480,000 in 2019. At the time of sale there is $60,000 of accumulated straight-line depreciation on the apartment building. Assuming Jeanie is in the highest tax bracket for ordinary income and the Medicare tax on net investment income applies, how much of her gain is taxed at 28.8 percent?

Answers

Answer:

$60,000

Explanation:

According to section 1250 of the Internal Revenue Service, the depreciation previously allowed as a deduction would now be taxed in the case of ordinary income at the highest tax level.

And,  For this, the asset should be depreciated real property.

In the question, there is depreciation charged for apartment building so the same is eligible

The eligibility is allowed up to $60,000 and the same is to be considered

Variable costs as a percentage of sales for Lemon Inc. are 62%, current sales are $563,000, and fixed costs are $189,000. How much will operating income change if sales increase by $39,200

Answers

Answer:

Effect on income= $14,896 increase

Explanation:

Giving the following information:

Variable costs= 62% of sales

Current sales are $563,000

Fixed costs are $189,000.

Sales increase by $39,200.

To calculate the effect on income, we need to use the following formula:

Effect on income= sales increase*contribution margin ratio

Effect on income= 39,200*(1 - 0.62)

Effect on income= $14,896 increase

Prove:

Actual income= 563,200*0.38 - 189,000= 25,016

New income= 602,400*0.38 - 189,000= 39,912

Difference= $14,896 increase

Consider the market for mobile applications, smartphones, and conventional phones. For each pair, identify whether they are complements or substitutes:
Pairs of Goods and Services Complements Substitutes
Mobile applications and smartphones
Mobile applications and conventional phones
Smartphones and conventional phones

Answers

Answer:

Mobile Applications and Smart Phones are Complements

Smart Phones and Conventional Phones are Substitutes

Mobile Applications and Conventional Phones are substitutes.

Explanation:

Complement goods are goods that can be used or consumed together. E.g. car and gas. A car would not work without gas. A rise in price of a good leads to a fall in demand of the complement good.

Subsituite goods rival one another in consumption. They can be used in place of another good.

A rise in price of a good leads to a rise in demand of the other good.

I hope my answer helps you

You are given the following information concerning a noncallable, sinking fund debenture: Principal: $1,000 Coupon rate of interest: 7 percent Term to maturity: 15 years Sinking fund: 5 percent of outstanding bonds retired annually; the balance at maturity If you buy the bond today at its face amount and interest rates rise to 12 percent after three years have passed, what is your capital gain or loss

Answers

Answer:

Explanation:

A) If you buy the bond today at its face amount and interest rates rise to 12% after three years have passed what is your capital gain or loss?

B) If you hold the bond 15 years what do you recive at maturity?

C) What is the bond current yield as of right now?

D) Given your price in a, what is the yield of maturity

E) Is there any reason to believe that the bond will be called after three years have elapsed if interest rates decline

F) what proportion of the total debt issue is retired by the sinking fund

G) What assets secure this bond?

h) If the final payment to retire this bond is $1,000,000 how much must the firm invest to accumulate this sum if the firm is able to earn 7% on the invest funds.

A) If the interest rates rise to 12%, the price of the bond assuming semi-annual interest payments, will be

1000*pvif(6,24) + 35*pvifa(6,24)

= 1000*0.2470 +35*12.5504

= 247 + 439.26 = $686.26

The capital gain would be 1000 - 686.26 = $313.74.

B) Bond face value is $1000 and coupon rate is 7%. Half yearly interest = 1000*7%/2 = $35.

Maturity value of $1000, plus half yearly interest of $35.

C) The bonds current yield = 7%, assuming the price of the bond is $1000 today.

D) The yield to maturity is 12%.

E) No, the bonds are not callable.

F) 5% of the bonds are retired every year. So 14 years * 5 = 70%. Balance 30% is paid full at EOY 15.

5%*14 = 70%.

G) Debentures are not secured by any specific asset.

H) It is not specified as to how the money would be invested; whether its a

lump sum invested on day 0 or equal amounts invested at each year end

If it a lump sum to be invested now, the amount should be 1000000/107^15 = $362,446

If it in equal amounts to be invested each year end the annual investments is given by 1,000,000/fvifa(7,15)  

= 1000000/25.1290

= $3979.

Cardiff and Delp is an architectural firm that provides services for residential construction projects. The following data pertain to a recent reporting period. (Round activity rate answers to 2 decimal places.)
Activities Costs
Design department
Client consultation 2,100 contact hours $ 315,000
Drawings 1,800 design hours 104,400
Modeling 46,000 square feet 32,200
Project
management
department
Supervision 1,200 days $ 228,000
Billings 8 jobs 8,300
Collections 8 jobs 13,140
Required: 1. & 2. Using ABC, compute the firm's activity overhead rates. Form activity cost pools where appropriate. Assign costs to a 7,400-square-foot job that requires 410 contact hours, 352 design hours, and 195 days to complete. (Round activity rate answers to 2 decimal places.)

Answers

Answer:

Activity Rates

Consultation  $150

Drawings        $58

Modeling         $0.7

supervision       $190

Billings              $1037.5

Collections       $1642.5

Total overhead allocated: $ 126,826

Explanation:

First, we divide the cost of each activity over the base total to get the rate.

[tex]\left[\begin{array}{ccccc}$Activity&Driver&cost&Total&Rate\\$Consultation&$contact hours&315000&2100&150\\$Drawings&$desing hours&104400&1800&58\\$Modeling&$square feet&32200&46000&0.7\\$supervision&$days&228000&1200&190\\$Billings&$jobs&8300&8&1037.5\\$Collections&$jobs&13140&8&1642.5\\\end{array}\right][/tex]

Now we apply this rate against the job activity measurement:

[tex]\left[\begin{array}{ccccc}$Activity&Job&$Rate&$Allocated\\$Consultation&410&150&61500\\$Drawings&352&58&20416&\\$Modeling&7400&0.7&5180&\\$supervision&195&190&37050&\\$Billings&1&1037.5&1037.5&\\$Collections&1&1642.5&1642.5&\\$Total&&&126826&\\\end{array}\right][/tex]

Suppose the demand for Digital Video Recorders (DVRs) is given by Q = 250 - .25p + 4pc, where Q is the quantity of DVRs demanded (in 1000s), p is the price of a DVR, and pc is the price of cable television. How much does the quantity demanded for DVRs change if the p rises by $40?

Answers

The question is incomplete. Here is the complete question

Suppose the demand for Digital Video Recorders (DVRs) is given by Q = 250 - .25p + 4pc, where Q is the quantity of DVRs demanded (in 1000s), p is the price of a DVR, and pc is the price of cable television. How much does the quantity demanded for DVRs change if the p rises by $40? A) drops by 10,000 DVRs B) increases by 16,000 DVRs C) drops by 2,500 DVRs D) increases by 4,000

Answer:

Drops by 10,000 DVRs

Explanation:

The demand for digital video recorders is expressed by

Q= 250- .25p+4pc

Where

Q represents the quantity demanded by the customers

P represents the price of DVR

pc represents the price of cable television

Since the factor of p in the expression above is negative, this implies that the quantity of DVR demanded in the market will reduce

If the price of DVR increase by $40, then the quantity demanded will reduce by

= 0.25×40×1000

= 10×1000

= 10,000 units

Hence the quantity of DVRs drops by 10,000 DVRs if the price is increased to $40

Composing powerful paragraphs is essential when striving for dear communication. Familiarize yourself with basic paragraph elements, various paragraph patterns, and strategies for building coherence. Use the following paragraphs to answer the questions that follow
Paragraph A: Last week, three of our Xdite executives closed a lucrative merger deal with Editionplus. The merger will add more than 500 accounts to our business and will increase our profits by 39 percent in less than a year. Additionally, the executives met with several Editionplus product designers and agreed on three new computer prototypes that we will produce during the next five years. This means we will expand our business to both Los Angeles and Las Vegas.
Paragraph B: Employee reaction has been mixed about our recent plans to expand to Las Vegas and Los Angeles. Many Xcite employees are concerned that the Los Angeles site will not have the same relaxed corporate environment as the current site. However, this is not the case: The relaxed corporate environment at the San Francisco site will be replicated in Los Angeles. The culture we have developed works for the company and our employees, and we don't plan to change it. Human resources executives are already interviewing San Francisco employees so they can capture and replicate the culture with ease.

Answers

Answer: 1. A, C

2. "Everyone in senior-level positions has worked his or her way up the corporate ladder and has contributed greatly to the company's success. This team has increased our profits by 6 percent, expanded office space, hired additional IT support, and strengthened our IT infrastructure. These are just a few of this leadership team's many accomplishments."

Explanation:

1. The Direct Approach is also known as a Deductive Approach. This is because when using the Direct Approach, the writer or speaker begins with the main point of the article and then gives supporting evidence and explanations as they go further along.

Paragraph A uses the Direct approach because the writer began by talking about the main point of the sealing of the deal with Editionplus. It then speaks on how it will increase their profits and how they even met with some of their product designers.

Paragraph C also uses the Direct Approach as it speaks to the effectiveness of the leadership first and then gives evidence of why they are effective by stating that they worked hard for it and that they have increased profits, office space and strengthened infrastructure.  

2. Supporting sentences are made with the purpose of supporting the main point. They expound on the point and give it meaning by showing evidence of the original point.

Option C would be the correct answer because it gave evidence of the main point in Paragraph C. The Main Point noted how the leadership in San Francisco has been phenomenal for the past decade. Option C then speaks on how they have done so by stating that they had worked their way up and contributed to the success of the company by having increased profits by 6 percent, expanded office space, hired additional IT support, and strengthened IT infrastructure.

I have attached the full question to this answer.

Investment Management Inc. (IMI) uses the capital market line to make asset allocation recommendations. IMI derives the
following forecasts:

• Expected return on the market portfolio: 12%.
• Standard deviation on the market portfolio: 20%.
• Risk-free rate: 5%.

Samuel Johnson seeks 'Ml's advice for a portfolio asset allocation. Johnson informs IMI that he wants the standard deviation of the portfolio to equal half of the standard deviation for the market portfolio. Using the capital market line, what expected return can IMI provide subject to Johnson's risk constraint?

Answers

Answer:

The expected return that IMI can provide subject to Johnson's risk constraint is 8.5%

Explanation:

Capital Market Line (CML)

Expected return on the market portfolio, E([tex]r_m[/tex]) = 12 %

Standard deviation on the market portfolio, σ[tex]_p[/tex] = 20%

Risk-free rate, [tex]r_f[/tex] = 5%

E([tex]r_c[/tex]) =  [tex]r_f[/tex] + [  E([tex]r_p[/tex])  - [tex]r_f[/tex] ] × ( σ[tex]_c[/tex] ÷ σ[tex]_p[/tex])

         = 0.05 + [ 0.12 - 0.05] × (0.10 ÷ 0.20)

= 8.5%

A supermarket uses a periodic review system to manage inventory of gallons of drinking water. Average demand is 152 gallons of water per day with standard deviation of 33 gallons per day. It costs ​$57 to order water from the​ supplier, and orders are delivered after 4 days. The holding cost for a gallon of water is ​$0.11 per year. The supermarket is open 360 days per year. If the supermarket aims for a 94.5% service level for gallons of drinking water (z = 1.6), what value should be used for T, the target inventory position at the time of ordering?

The target inventory position is T= ______ gallons.

Answers

Answer:

The target inventory position is T= 713.6 gallons.

Explanation:

Given:

Average demand =per day = D = 152 Gallons

Standard deviation of demand = σ = 33 Gallons per day

Lead time for delivery = L = 4 days

Z value for 94.5% service level = 1.6

The target inventory position  = (Average demand x Lead time) + Safety stock

= (D × L) + (Z× σ × [tex]\sqrt{L}[/tex])

= (152 × 4) + (1.6 × 33 × [tex]\sqrt{4}[/tex])

= (152 × 4) + (1.6 × 33 × 2)

= 608 + 105.6

= 713.6

The value of the target inventory position will be 713.6 gallons.

The following can be illustrated from the information given:

Average demand per day, D = 152Standard deviation of demand, σ = 33Lead time for delivery, L = 4Z value for 94.5% service level = 1.6

Therefore, the target inventory position will be:

= (Average demand x Lead time) + Safety stock

= (D × L) + (Z× σ × ✓L )

= (152 × 4) + (1.6 × 33 × ✓4 )

= (152 × 4) + (1.6 × 33 × 2)

= 608 + 105.6

= 713.6

Therefore, the target inventory position will be 713.6 gallons.

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Suppose that a labor economist performs a statistical analysis on economywide worker wages using standard, measurable explanatory factors, such as job characteristics, years of schooling, and so forth. How much of the variation in worker wages can be accounted for by such measurable explanatory factors

Answers

Answer: Somewhat less than 50%

Explanation:

Here is the complete question;

Suppose that a labor economist performs a statistical analysis on economywide worker wages using standard, measurable explanatory factors, such as job characteristics, years of schooling, and so forth. How much of the variation in worker wages can be accounted for by such measurable explanatory factors?

a. Somewhat less than 50%.

b. Somewhat more than 60%

c. Nearly 100%

d. About 0%?

The variables which are typically removed from the quantitative analysis of wages are those which cannot be directly measured, directly observed or normative in nature.

Chance plays a vital role in deciding ones wage, the type of job one applies for and gets, and the salary that can be gotten. Chance cannot neither be measured nor observed. Natural ability cannot also be quantified, observed or measured. These variables are also subject to normative judgement.

Based on this analysis, the measurable traits will account for less than 50% of total variation in the wages.

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