Answer:
Results are below.
Explanation:
First, we need to calculate the following costs as variable-fixed, and direct-indirect:
Direct materials: $2,600 (variable - direct)
Factory overhead: $520 (mixed - indirect)
Direct labor: $1,200 (variable - direct)
Now, we can calculate the cost of goods manufactured using the following formula:
cost of goods manufactured= beginning WIP + direct materials + direct labor + allocated manufacturing overhead - Ending WIP
cost of goods manufactured= 0 + 2,600 + 1,200 + 520 - 590
cost of goods manufactured= 3,730
Finally, the cost of goods sold:
beginning finished inventory= 0
cost of goods manufactured= 3,730
ending finished inventory= (370)
COGS= $3,360
Who Is Lil Loaded i want to know
Answer:
search it up
Explanation:
Answer:
he is a rapper dude. search it up
Explanation:
Gross Domestic Product (GDP) can be defined as: I. The sum of all incomes while adjusting for indirect business taxes and foreign incomes. II. The market value of goods and services sold in an economy in some time period. III. The total market value of final goods and services produced in an economy in some time period. III only I and II only I, II and III II and III only I and III only
Answer:
I and III only
Explanation:
The full form of GDP is Gross domestic product. It is the sum of all the income at the time when the business taxes i.e. indirect and the foreign incomes would be adjusted also it is a sum total of market value of the goods and services i.e. final generated in an economy for a time period
Therefore the I and III statements are true
Yale Corporation issued to Zap Corporation $70,000, 10% (cash interest payable semiannually on June 30 and December 31) 10-year bonds dated and sold on January 1, 2020. Assume that the company uses the effective interest method for amortization. If the bonds were sold at 97, yielding 10.5%. What is true for journal entries to be made at June 30, 2020, for interest payment if Effective interest method is used?
Answer:
Journal Entry
June 30, 2020
Dr. Interest expense __$3,564.75
Cr. Discount on bonds_$64.75
Cr. Cash ___________$3,500
[To record interest]
Explanation:
First, we need to calculate the issuance price of the bond
Issuance price of the bond = Face value x Seling rate = $70,000 x 97/100 = $67,900
Now we need to calculate the discount value as follow
Discount = Face value - Isuance vaue = $70,000 - $67,900 = $2,100
Now, need to calculate the discount amortization as follow
Discount amortization = ( Carrying value of bond x Effective interest rate x 6/12 ) - ( Face value x Coupon rate x 6/12 ) = ( $67,900 x 10.5%x 6/12 ) - ( $70,000 x 10% x 6/12 = $3,564.75 - $3,500 = $64.75
Now calculate the interest payment
Interst payment = Face value x Coupon rate x 6/12 = $70,000 x 10% x 6/12 = $3,500
The bonds would expire on the date of maturity, and the issuing company will pay the debt holder the face value of the bond.
The issue price is termed as the price at which the issuer of the bond sells the bonds for the first time.
The Journal entry has been attached below.
The calculation of the issuance price of the bond:
Issuance price of the bond = [tex]\text{Face value} \times \text{Seling rate} = \$70,000 \times \frac{97}{100}[/tex] = $67,900
Calculation of the discount value:
Discount = Face value - Isuance vaue = $70,000 - $67,900 = $2,100
Calculation of the discount amortization:
Discount amortization = [tex]( \text{Carrying value of bond} \times \text{Effective interest rate} \itimes \frac{6}{12} ) - ( \text{Face value} \times \text{Coupon rate} \times \frac{6}{12})[/tex]
= [tex]( \$67,900 \times 10.5\%\times \frac{6}{12}) - ( \$70,000 \times 10\% \times \frac{6}{12})[/tex]
= $3,564.75 - $3,500 = $64.75
Calculation of the interest payment:
Interst payment =[tex]\text{ Face value} \times \text{Coupon rate} \times \frac{6}{12} = \$70,000 \times 10\% \times \frac{6}{12}[/tex]= $3,500
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the point where total expenses equals to total income?
Answer:
yfku
Explanation:
Jill Angel holds a $200,000 portfolio consisting of the following stocks. The portfolio's beta is 0.88. Stock Investment Beta A $50,000 0.50 B $50,000 0.80 C $50,000 1.00 D $50,000 1.20 Total $200,000 If Jill replaces Stock A with another stock, E, which has a beta of 1.45, what will the portfolio's new beta be
Answer:
1.11
Explanation:
Calculation for what will the portfolio's new beta be
First step is to Calculate the weight of each investment
Stock E $ 50,000 / $ 2,00,000
Stock E= 0.25
Stock B $ 50,000 / $ 2,00,000
Stock B= 0.25
Stock C $ 50,000 / $ 2,00,000
Stock C = 0.25
Stock D $ 50,000 / $ 2,00,000
Stock D = 0.25
Now let calculate the portfolio new beta
Weight Beta
Stock E 0.25* 1.45 = 0.36
Stock B 0.25 * 0.80 = 0.20
Stock C 0.25* 1.00 = 0.25
Stock D 0.25 * 1.20 = 0.30
Total 1.11
(0.36+0.20+0.25+0.30)
Therefore portfolio's new beta will be 1.11
The Campbell Company is considering adding a robotic paint sprayer to its production line. The sprayer's base price is $820,000, and it would cost another $17,500 to install it. The machine falls into the MACRS 3-year class, and it would be sold after 3 years for $604,000. The MACRS rates for the first three years are 0.3333, 0.4445, and 0.1481. The machine would require an increase in net working capital (inventory) of $15,500. The sprayer would not change revenues, but it is expected to save the firm $338,000 per year in before-tax operating costs, mainly labor. Campbell's marginal tax rate is 25%. (Ignore the half-year convention for the straight-line method.) Cash outflows, if any, should be indicated by a minus sign. Do not round intermediate calculations. Round your answers to the nearest dollar.
a. What is the Year 0 net cash flow?
b. What are the net operating cash flows in Years 1, 2, 3?
c. What is the additional Year 3- cash flow (i.e. after tax salvage and the return of working capital)?
d. If the project's cost of capital is 12%, should the machine be purchased?
Answer:
a. What is the Year 0 net cash flow?
-$820,000 - $17,500 - $15,500 = -$853,000
b. What are the net operating cash flows in Years 1, 2, 3?
Operating cash flow year 1 = {[$338,000 - ($837,500 x 1/3)] x (1 - 25%)} + ($837,500 x 1/3) = $323,292
Operating cash flow year 2 = {[$338,000 - ($837,500 x 0.4445)] x (1 - 25%)} + ($837,500 x 0.4445) = $346,567
Operating cash flow year 3 = {[$338,000 - ($837,500 x 0.1481)] x (1 - 25%)} + ($837,500 x 0.1481) = $284,508
c. What is the additional Year 3- cash flow (i.e. after tax salvage and the return of working capital)?
= $62,031 + [($604,000 - $62,031) x 0.75] + $17,500 = $486,008
d. If the project's cost of capital is 12%, should the machine be purchased?
using a financial calculator, NPV = $260,373, so the project should be accepted
Consider how health insurance affects the quantity of health care services performed. Suppose that the typical medical procedure has a cost of $100, yet a person with health insurance pays only $20 out of pocket. Her insurance company pays the remaining $80. (The insurance company recoups the $80 through premiums, but the premium a person pays does not depend on how many procedures that person chooses to undergo.) Consider the following demand curve in the market for medical care.
1. Based on the given demand and supply, the given transportation problem is
________?
2. Before finding the initial solution, a dummy_____________ should be introduced.?
3. The total cost of the optimal solution =____________?
Answer:
hello your question has some missing part attached below is the missing demand curve
Answer :
1) the quantity of health procedures Individuals will demand is greater than the optimal quantity ( 20 procedures )
2) quantity of medical procedure
3) $200
Explanation:
1) Based on the given demand and supply, the given transportation problem is the quantity of health procedures Individuals will demand is greater than the optimal quantity ( 20 procedures )
2) A dummy quantity of medical procedure should be introduced
3) Total cost of optimal solution
optimal quantity of medical procedure ( Qd) * price of medical procedure(Qp)
= 20 * 100
= $200
it is a type of business that keeps the dealings,assets,and bank accounts seperate from his/her personal assets?
Answer:
A sole proprietorship
Explanation:
A sole proprietorship is a business owned, organized, and run by a sole proprietor. It is legally advisable that all business and private activities of any form of business are conducted separately. Commingling business dealings, assets, and especially bank accounts with private affairs do cause problems for the business person.
Kingbird Corporation is preparing its December 31, 2020, balance sheet. The following items may be reported as either a current or long-term liability.
1. On December 15, 2020, Kingbird declared a cash dividend of $2.30 per share to stockholders of record on December 31. The dividend is payable on January 15, 2021. Kingbird has issued 1,000,000 shares of common stock, of which 50,000 shares are held in treasury.
2. At December 31, bonds payable of $114,286,000 are outstanding. The bonds pay 12% interest every September 30 and mature in installments of $28,571,500 every September 30, beginning September 30, 2021.
3. At December 31, 2019, customer advances were $12,485,000. During 2020, Kingbird collected $32,673,000 of customer advances; advances of $27,486,000 should be recognized in income.
Required:
For each item above, indicate the dollar amounts to be reported as a current liability and as a long-term liability, if any.
Answer:
1. Dividend payable = (1,00,000 shares - 50,000 shares) shares * $2.30 per shares = $2,185,000 will be reported as current liability (payable within 1 year)
2. Bonds payable (September 30, 2021 installment)= $28,571,500 and interest on bonds = ($114,286,000*12%*3/12) = $3,428,580 are current liabilities whereas Bonds payable (Other than September 30, 2018 installment) =($114,286,000 - $28,571,500) = $85,714,500 are long term liabilities.
3. Customer advances = ($12,485,000 + $32,673,000 - $27,486,000) = $17,672,000 are current liabilities.
Stanislaw Timber Company owns 9,000 acres of timberland purchased in 2009 at a cost of $1,400 per acre. At the time of purchase, the land without the timber was valued at $400 per acre. In 2010, Stanislaw built fire lanes and roads, with a life of 30 years, at a cost of $84,000. Every year, Stanislaw sprays to prevent disease at a cost of $3,000 per year and spends $7,000 to maintain the fire lanes and roads. During 2011, Stanislaw selectively logged and sold 700,000 board feet of timber, of the estimated 3,500,000 board feet. In 2012, Stanislaw planted new seedlings to replace the trees cut at a cost of $100,000.
Instructions
a. Determine the depreciation expense and the cost of timber sold related to depletion for 2011.
b. Stanislaw has not logged since 2011. If Stanislaw logged and sold 900,000 board feet of timber in 2022, when the timber cruise (appraiser) estimated 5,000,000 board feet, determine the cost of timber sold related to depletion for 2022.
Answer:
a. Depreciation expense = Cost/Life = $84,000/30 = $2,800 per year
b. Cost of timber sold = Per arce - Land value = $1,400 - $400 = $1,000
Timber value = Cost of timber sold * Acre = $1,000 * 9,000 acres = $9,000,000
Land value = Timber value/Estimated Board feet * Sold Board feet = 9,000,000/3,500,000 * 700,000 = $1,800,000
Total Cost of timber sold = Timber value - Land value = $9,000,000 - $1,800,000 = $7,200,000
Depletion = Timber value * [Total Cost of timber sold+Replacement cost/Estimated Board feet]
Depletion = $900,000 * $7,200,000+$100,000/5,000,000
Depletion = $900,000 * 1.46
Depletion = $1,314,000
White Company has two departments, Cutting and Finishing. The company uses a job-order costing system and computes a predetermined overhead rate in each department. The Cutting Department bases its rate on machine-hours, and the Finishing Department bases its rate on direct labor-hours. At the beginning of the year, the company made the following estimates:
Cutting Finishing
Direct labor-hours . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6,000 30,000
Machine-hours . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48,000 5,000
Total fixed manufacturing overhead cost . . . . . . . . . . . . . . . . $264,000 $366,000
Variable manufacturing overhead per machine-hour . . . . . . ....$2.00 ______
Variable manufacturing overhead per direct labor-hour . . . . . _____ $4.00
Required:
Compute the predetermined overhead rate to be used in each department.
Answer and Explanation:
The computation of the predetermined overhead rate is shown below:
For Cutting department
= Variable manufacturing overhead per machine hour + (Total fixed manufacturing overhead ÷ machine hours)
= $2 + ($264,000 ÷ 48,000)
= $2 + $5.50
= $7.50
For finishing department
= Variable manufacturing overhead per direct labour + (Total fixed manufacturing overhead ÷ direct labor hours)
= $4 + ($366,000 ÷ 30,000)
= $4 + $12.20
= $16.20
2. How is CrudeOil violating its core value of treating oth-
ers with respect? What are some ways it could reincor-m
porate this core value into its organizational culture??
Answer:
1. Describe the organizational culture at CrudeOil. How does it contribute to the current situation?
Jim treated all of the employees with intimidating behavior based on productivity levels and not moral or ethical concepts. His leadership style is coercive and demands immediate compliance. If this style were summed up in one phrase, it would be "Do what I tell you." In my opinion, it should be avoided because it can alienate employees and create a hostile work environment.
2. How is CrudeOil violating its core value of treating others with respect?
What are some ways it could reincorporate this core value into its organizational culture? “The company’s core value is to treat everyone with respect”. Employees and supervisors, in my experiences, often treat colleagues in harsh and unethical manners only as far as the victim allows it to happen. Financial and reputational harm are questionable and unethical behaviors and organizational policies must be clearly established to reincorporate this value into its culture.
3. If Madison cannot report her problems to her immediate supervisor, what are some other ways she can handle the situation?
I would suggest for Madison to seek advice from a trusted professional, such as the HR compliance officer to verify the actions are inappropriate, if so, Madison needs to learn what process is available for voicing her concern to a higher level. Jim’s behavior is clearly unethical, but many of these behaviors are less clear and occur in complex situations. The most complicated situations often involve employees who witness what is, or appears to be, unethical behavior and are unsure how to respond, especially if job security is on the line...
This is some of it
Jim's leadership abilities breached CrudeOil's fundamental value of treating others with respect because he frequently treats coworkers harshly and unethically.
What are the three main uses of crude oil?Petroleum-based products are used to power vehicles, heat buildings, and generate energy. Plastics, polyurethane, solvents, and countless more intermediate and finished commodities are produced by the petrochemical industry, which is a part of the industrial sector.
Jim's activities should therefore be addressed by top management in order to reintegrate this key principle into the organizational culture. Additionally, they could offer a variety of training to their staff, particularly those in higher positions, to inform them on correct management and leadership skills as well as the significance of adhering to the company's code of ethics.
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A corporation wishes to determine the fixed portion of its maintenance expense (a semivariable expense), as measured against direct labor hours, for the first 3 months of the year. The inspection costs are fixed; the adjustments necessitated by errors found during inspection account for the variable portion of the maintenance costs. Information for the first quarter is as follows:
Direct Labor Hours Maintenance Expense
January 34,000 $610
February 31,000 $585
March 34,000 $610
Required:
What is the fixed portion of Jacob's maintenance expense, rounded to the nearest dollar?
a. $283
b. $327
c. $258
d. $541
Answer:
b. $327
Explanation:
The computation of the fixed portion is shown below:
But before that variable maintenance expense per direct labor is
= ($610 - $585) ÷ (34000 hours - 31000 hours)
= $0.00833 per direct labor hour
Now
Total variable expense for 34,000 hours is
= $0.00833 × 34000
= $283
And, finally Fixed portion is
= $610 - $283
= $327
Cynthia Co. exchanged Building 24 which has an appraised value of $4,800,000, a cost of $7,600,000, and accumulated depreciation of $3,619,000 for Building M belonging to Waterway Co. Building M has an appraised value of $4,560,000, a cost of $9,096,000, and accumulated depreciation of $4,747,000. The correct amount of cash was also paid. Assume depreciation has already been updated.
Prepare the entries on both companies' books assuming the exchange had no commercial substance.
Answer:
See the journal entries below.
Explanation:
In the Book of Cynthia Co.
Book value of Building 24 = Cost of Building 24 - Accumulated depreciation of Building 24 = $7,600,000 - $3,619,000 = $3,981,000
Gain on disposal of Building 24 = Building 24 an appraised value of - Book value of Building 24 = $4,800,000 - $3,981,000 = $819,000
Basis for Building M = Building M appraisal value - Gain on disposal of Building 24 = $4,560,000 - $819,000 = $3,741,000
Cash = Accumulated Depreciation of Building 24 + Basis for Building M - Cost of Building 24 - Gain on Disposal of Building 24 = $3,619,000 + $3,741,000 - 7,600,000 - $819,000 = $1,059,000
The journal entries will look as follows:
Accounts Title Debit ($) Credit ($)
Accumulated Depreciation 3,619,000
Building M 3,741,000
Cash 1,059,000
Building 24 7,600,000
Gain on Disposal 819,000
To record the exchange of Building 24 for Building M from Waterway Co.
In the Book of Waterway Co.
Building 24 = Building M cost + Cash - Building M depreciation = $9,096,000 + $1,059,000 - $4,747,000 = $5,408,000
The journal entries will look as follows:
Accounts Title Debit ($) Credit ($)
Accumulated Depreciation 4,747,000
Building 24 5,408,000
Building M 9,096,000
Cash 1,059,000
To record the exchange of Building M for Building 24 from Cynthia Co.
Craftmore Machining produces machine tools for the construction industry. The following details about overhead costs were taken from its company records.
Production Activity
Indirect Labor
Indirect Materials
Other Overhead
Grinding
$320,000
Polishing
$135,000
Product modification
600,000
Providing power
$255,000
System calibration
500,000
Additional information on the drivers for its production activities follows.
Grinding
13,000 machine hours
Polishing
13,000 machine hours
Product modification
1,500 engineering hours
Providing power
17,000 direct labor hours
System calibration
400 batches
Required
1. Classify each activity as unit level, batch level, product level, or facility level.
2. Compute the activity overhead rates using ABC. Form cost pools as appropriate.
3. Determine overhead costs to assign to the following jobs using ABC.
Job 3175
Job 4286
Number of units
200 units
2,500 units
Machine hours
550 MH
5,500 MH
Engineering hours
26 eng hours
32 eng. hours
Batches
30 batches
90 batches
Direct labor hours
500 DLH
4,375 DLH
4. What is the overhead cost per unit for Job 3175? What is the overhead cost per unit for Job 4286?
5. If the company used a plantwide overhead rate based on direct labor hours, what is the overhead cost for each unit of Job 3175? Of Job 4286?
6. Compare the overhead costs per unit computed in requirements 4 and 5 for each job. Which method more accurately assigns overhead costs?
Answer:
Craftmore Machining
1. Classification of activity as unit level, batch level, product level, or facility level:
Production Activity Level
Indirect Labor Facility
Indirect Materials Product
Grinding Product
Polishing Product
Product modification Product
Providing power Facility
System calibration Batch
2. The Activity Overhead Rates using ABC:
Grinding = $24.62/machine hour
Polishing = $10.38/machine hour
Product modification = $400/eng.h
Providing power = $15/DLH
System calibration = $1.25/batch
3. Assignment of overhead costs:
Job 3175 Job 4286
Number of units 200 units 2,500 units
Machine hours 550 MH 5,500 MH
Engineering hours 26 eng hours 32 eng. hours
Batches 30 batches 90 batches
Direct labor hours 500 DLH 4,375 DLH
Job 3175 Job 4286
Grinding = $24.62/machine hour $13,541 $135,410
Polishing = $10.38/machine hour 5,709 57,090
Product modification = $400/eng.h 10,400 12,800
Providing power = $15/DLH 7,500 65,625
System calibration = $1.25/batch 37.50 112.50
Total costs allocated $37,187.50 $271,037.50
Cost per unit $185.94 $108.42
4. Overhead cost per unit:
Job 3175 , Overhead cost per unit = $185.94 ($37,187.50/200)
Job 4286 Overhead cost per unit = $108 ($271,037.50/2,500)
5. Plantwide overhead rate
Total overhead costs = $1,810,000
Total direct labor hours = 4,875
Overhead rate = $1,810,000/4,875 = $371.28
Job 3175 Job 4286
Direct labor hours 500 DLH 4,375 DLH
Total overhead cost $185,640 $1,624,350
Overhead cost per unit $928.20 $649.74
6. Overhead cost per unit Job 3175 Job 4286
Using ABC $185.94 $108.42
Using Plantwide rate $928.20 $649.74
ABC rate more accurately assigns overhead costs than using plantwide rate.
Explanation:
a) Data and Calculations:
Production Activity
Indirect Labor
Indirect Materials
Other Overhead Costs Usage Usage Rate
Grinding $320,000 13,000 machine hours $24.62/mh
Polishing $135,000 13,000 machine hours $10.38/mh
Product modification 600,000 1,500 engineering hours $400/eng.h
Providing power $255,000 17,000 DLH $15/DLH
System calibration 500,000 400 batches $1.25/batch
Total overhead $1,810,000
b) Craftmore incurs unit-level costs each time a unit is produced. It incurs batch-level costs each time it produces a batch of goods. It incurs product-level costs to support the production of each type of product. Finally, Craftmore's facility-level costs sustain the facility's general manufacturing process.
Olympic Sports has two issues of debt outstanding. One is a 5% coupon bond with a face value of $33 million, a maturity of 10 years, and a yield to maturity of 6%. The coupons are paid annually. The other bond issue has a maturity of 15 years, with coupons also paid annually, and a coupon rate of 6%. The face value of the issue is $38 million, and the issue sells for 90% of par value. The firm's tax rate is 30%.
a. What is the before-tax cost of debt for Olympic? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.)
b. What is Olympic's after-tax cost of debt? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.)
Answer and Explanation:
The computation is shown below
a. For before tax cost of debt
But before that following calculations need to be determined
For Bond 1:
Face value = $33,000,000
Coupon payment = 0.05 × $33,000,000 = $1,650,000
The Price of the bond is
= Coupon × [ 1 - 1 ÷ ( 1 + r)^n] ÷ r + FV ÷ ( 1 + r)^n
= $1,650,000 × [ 1 - 1 ÷ ( 1 + 0.06)^10] ÷ 0.06 + $33,000,000 ÷ ( 1 + 0.06)^10
= 1,650,000 × 7.360087 + 18,427,027.64
= $30,571,171.196
For Bond 2:
Price = 0.9 × $38,000,000
= $34,200,000
Now
Coupon = 0.06 × $38,000,000
= $2,280,000
Now before tax cost of debt is
Given that
PV -$34,200,000,
FV $38,000,000,
N 15,
PMT $2,280,000
The formula is shown below:
= RATE(NPER,PMT, PV,FV,TYPE)
After applying the above formula, the Before tax cost of debt of bond is 7.1053%
Now
Total market value is
= $34,200,000 + $30,571,171.196
= $64,771,171.19
And,
finally
Before tax cost of debt for olympic is
= ($30,571,171.196 ÷ 64,771,171.19) × 0.06 + ($34,200,000 ÷ 64,771,171.19) × 0.071053
= 0.028319 + 0.037517
= 0.0658 or 6.58%
b)
And,
After tax cost of debt is
= 0.0658× ( 1 - 0.3)
= 0.0461 or 4.61%
A firm now operates as a C-Corporation. The firm has earnings before taxes of $433,743 per year and pays out all its net earnings as dividends. The firm has a corporate tax rate is 24 percent. The firm has only one owner who faces a personal income tax rate of 27 percent. What is the spendable income for the owner of the C-Corporation
Answer:
The Spending income for the owner of the C-Corporation is:
= $240,641.
Explanation:
a) Data and Calculations:
Earnings before taxes = $433,743
Corporate tax rate = 24%
Corporate tax expense = 104,098 ($433,743 * 24%)
Net Earnings after taxes = $329,645
Dividends paid out = $329,645
Retained earnings = $0
Taxable income for the owner of the C-Corporation = $329,645
Income tax rate for the owner of the C-Corporation = 27%
Income tax for the owner of the C-Corporation = $89,004 ($329,645 * 27%)
Spending income for the owner of the C-Corporation = $240,641
b) The owner of this C-Corporation cannot avoid double taxation at the corporate and individual levels. To avoid this, the owner can choose an S-Corporation.
In April, a firm had an ending cash balance of $35,000. In May, the firm had total cash receipts of $40,000 and total cash disbursements of $50,000. The minimum cash balance required by the firm is $25,000. At the end of May, the firm had
Answer:
60,000
Explanation:
Fuzzy Monkey Technologies, Inc., purchased as a long-term investment $220 million of 8% bonds, dated January 1, on January 1, 2018. Management intends to have the investment available for sale when circumstances warrant. When the company purchased the bonds, management elected to account for them under the fair value option. For bonds of similar risk and maturity the market yield was 10%. The price paid for the bonds was $201 million. Interest is received semiannually on June 30 and December 31. Due to changing market conditions, the fair value of the bonds at December 31, 2018, was $210 million.
Required:
a. Prepare the journal entry to record Fuzzy Monkey’s investment on January 1, 2018.
b. Prepare the journal entry by Fuzzy Monkey to record interest on June 30, 2018.
c. Prepare the journal entries by Fuzzy Monkey to record interest on December 31, 2018.
Answer:
January 1, 2018
Dr Investment in bonds 220,000,000
Cr Cash 201,000,000
Cr Discount on investment in bonds 19,000,000
June 30, 2021
Dr Cash 8,800,000
Dr Discount on investment in bonds 1,250,000
Cr Interest revenue 10,050,000
December 31, 2018
Dr Cash 8,800,000
Dr Discount on investment in bonds 1,312,500
Cr Interest revenue 10,112,500
discount amortization = ($201,000,000 x 5%) - $8,800,000 = $1,250,000
discount amortization = ($202,250,000 x 5%) - $8,800,000 = $1,312,500
The ultimate goal of operations management is to provide high-quality goods and services instantaneously in response to customer demand.
a. True
b. False
Answer:
a. True
Explanation:
The ultimate goal of operations management is to provide, in a timely and successful manner, goods and/or services to the final customer.
In this sense, operation management is customer-focused, and for this reason, its main task is to ensure the successful production and/or delivery of a good or service, from the moment the inputs enter the firm, to the moment the output exits the firm and reaches the final customer.
Hakara Company has been using direct labor costs as the basis for assigning overhead to its many products. Under this allocation system, product A has been assigned overhead of $10.80 per unit, while product B has been assigned $3.60 per unit. Management feels that an ABC system will provide a more accurate allocation of the overhead costs and has collected the following cost pool and cost driver information:
Cost Pools Activity Costs Cost Drivers Driver Consumption
Machine setup $360,000 Setup hours 4,000
Materials handling 100,000 Pounds of materials 20,000
Electric power 40,000 Kilowatt-hours 40,000
The following cost information pertains to the production of A and B, just two of Hakara's many products:
A B
Number of units produced 4,000 20,000
Direct materials cost $42,000 $54,000
Direct labor cost $24,000 $40,000
Number of setup hours 400 200
Pounds of materials used 1,000 3,000
Kilowatt-hours 2,000 4,000
Required:
Use activity-based costing to determine a unit cost for each product.
Answer:
Results are below.
Explanation:
First, we need to calculate the activities rates of allocation:
Predetermined manufacturing overhead rate= total estimated overhead costs for the period/ total amount of allocation base
Machine setup= 360,000/4,000= $90 per set up hour
Materials handling= 100,000/20,000= $5 per pound of material
Electric power= 40,000/40,000= $1 per kilowwat hour
Now, we can allocate costs to each product:
Allocated MOH= Estimated manufacturing overhead rate* Actual amount of allocation base
A:
Allocated MOH= 90*400 + 5*1,000 + 1*2,000
Allocated MOH= $43,000
B:
Allocated MOH= 90*200 + 5*3,000 + 1*4,000
Allocated MOH= $37,000
Finally, the total and unitary cost:
A:
Total cost= 42,000 + 24,000 + 43,000
Total cost= $109,000
Unitary cost= 109,000/4,000
Unitary cost= $2.73
B:
Total cost= 54,000 + 40,000 + 37,000
Total cost= $131,000
Unitary cost= 131,000/20,000
Unitary cost= $6.55
The Activity-based costing (ABC) costing system is based on activities, overseen by any event, task unit, or targeted activity
What do you mean by Acitivity based costing?
Activity-based costing (ABC) is a way of providing assigning overhead and indirect costs such as salaries and services — to products and services.
Predetermined manufacturing overhead rate is equal to total estimated overhead costs for the period/ total amount of allocation base
[tex]\rm\,Machine \;setup= \dfrac{360,000}{4,000}= \$90 \; per \;set \;up \;hour\\\\Materials \;handling= \dfrac{100,000}{20,000}= \$5 \;per \;pound \;of \;material\\\\Electric \; power= \dfrac{40,000}{40,000}= \$1 \;per \; kilowatt \;hour[/tex]
We can allocate costs to each product:
Allocated manufacturing overhead is equal to Estimated manufacturing overhead rate multiplied by Actual amount of allocation base.
[tex]\rm\,A: Allocated MOH= 90 \times 400 + 5\times 1,000 + 1\times2,000\\\\Allocated MOH= \$43,000\\\\B: Allocated MOH= 90 \times200 + 5\times3,000 + 1\times4,000\\\\Allocated MOH= \$37,000[/tex]
The total and unitary cost:
[tex]\rm\, A. Total\; cost = 42,000 + 24,000 + 43,000\\\\Total \;cost= \$109,000\\\\Unitary \;cost= \dfrac{109,000}{4,000}\\\\Unitary \;cost= \$2.73\\\\B: Total \;cost= 54,000 + 40,000 + 37,000\\\\Total\; cost= \$131,000\\\\Unitary\; cost= \dfrac{131,000}{20,000}\\\\Unitary\; cost= \$6.55\\\\[/tex]
Thus, Activity based costing (ABC) is used to determine a unit cost for each product A and B.
To learn more about Activity based costing (ABC), refer:
https://brainly.com/question/6654166
The income approach The following table shows macroeconomic data for a hypothetical country. All figures are in billions of dollars.
Billions of Dollars
Gross private domestic investment $2,300
Depreciation $1,987
Exports $3,120
Imports $200
Government purchases of goods and services $4,521
Personal consumption expenditures $6,300
Indirect business taxes and misc. items $1,341
Income received from other countries $1,118
Income paid to other countries $1,022
Compensation of employees (wages) $8,174
Corporate profits $1,895
Rental income $365
Net interest $903
Proprietors’ income $1,343
If you calculate GDP by adding together the final demands of consumers, business firms, the government, and foreigners (i.e., using the expenditure approach), GDP for this economy is ________$ billion. Given this information, the statistical discrepancy between national income and net national product, obtained when GDP is measured using the expenditure approach, is________ $ billion.
Answer:
A. $16,041 billion
B. $33 billion
Explanation:
A. Calculation to Determine what GDP for this economy is using the expenditure approach
Using this formula
GDP by expenditure method=C+I+G+X-M
Let plug in the formula
GDP by expenditure method= 6,300+2,300+4,521+3,120-200
GDP by expenditure method=$16,041 billions
Therefore GDP for this economy is $16,041 billion
B. Calculation to determine the statistical discrepancy.
First step is to calculate GDP at MP by income method
GDP at MP by income method=8,174+365+903+1,895+1,343+1,987+1,341
GDP at MP by income method=$16,008 billions
Now let calculate the Statistical discrepancy using this formula
Statistical discrepancy= GDP by expenditure method - GDP by income method
Let plug in the formula
Statistical discrepancy=$16,008-$16,041
Statistical discrepancy=$33 billions
Therefore the statistical discrepancy between national income and net national product, obtained when GDP is measured using the expenditure approach is $33 billion.
Consider two neighboring island countries called Arcadia and Dolorium. They each have 4 million labor hours available per week that they can use to produce jeans, corn, or a combination of both. The following table shows the amount of jeans or corn that can be produced using 1 hour of labor.
Country Jeans (Pairs per hour of labor) Corn(Bushels per hour of labor)
Arcadia 5 10
Dolorium 4 16
Initially, suppose Arcadia uses 1 million hours of labor per month to produce corn and 3 million hours per month to produce jeans, while Dolorium uses 3 million hours of labor per month to produce corn and 1 million hours per month to produce jeans. Consequently, Arcadia produces 8 million bushels of corn and 48 million pairs of jeans, and Dolorium produces 15 million bushels of corn and 20 million pairs of jeans. Assume there are no other countries willing to trade goods, so, in the absence of trade between these two countries, each country consumes the amount of corn and jeans it produces.
Arcadia's opportunity cost of producing 1 pair of jeans is _____ of corn, and Dolorium's opportunity cost of producing 1 pair of jeans is _____ of corn. Therefore, ____ has a comparative advantage in the production of jeans, and ____ has a comparative advantage in the production of corn.
Answer:
Arcadia's opportunity cost of producing 1 pair of jeans is 2 bushels of corn, and Dolorium's opportunity cost of producing 1 pair of jeans is 4 bushels of corn. Therefore, Arcadia has a comparative advantage in the production of jeans, and Dolorium has a comparative advantage in the production of corn.
Explanation:
maximum production
jeans corn
Arcadia 20 40
Dolorium 16 64
initial production
jeans corn
Arcadia 15 10
Dolorium 4 48
Arcadia's opportunity costs:
jeans = 40 / 20 = 2 bushels of corn
corn = 20 / 40 = 0.5 pairs of jeans
Dolorium's opportunity costs:
jeans = 64 / 16 = 4 bushels of corn
corn = 16 / 64 = 0.25 pairs of jeans
KB Homes is a nationwide home builder that develops entire communities of dozens and even hundreds of homes, in addition to, building custom homes for individual customers. While a Job Costing system is appropriate for the custom home building, their new controller is planning on using a Process Costing system for the large developments. She argues that because even large developments of 100 homes only offer three or four different floor plans and thus would be more efficient for tracking costs because of the homogeneity. Do you agree or disagree? Why?
Answer:
Answer is explained in the explanation section below.
Explanation:
Yes, I do agree.
Reasoning:
The Argument of the new supervisors in favor of applying the technological calculation to large projects which have homogeneous buildings with 3-4 different floor plans is correct. There are no settings for buildings / dwellings with the same layout and all units go through the same processes and use the same funds. For major developments of a homogeneous nature, instead of creating works to make for each unit and cost collection separately for each unit, a process that costs each floor a plan as a separate product will be much easier and more efficient for control purposes.
This procedure will also provide important data, and reintroduction and monitoring will be much easier.
Creating individual work, so that it is only more difficult to follow a work order, costs and to monitor a large number of work orders at a given moment, which can easily be avoided by adopting a process that costs money.
Therefore, the arguments put forward by the new controller are quite acceptable.
An article in The Globe and Mail, February 16, 2002, reported that IBM used the $300 million proceeds of a sale of one of its business units to reduce operating expenses in its fourth quarter 2001 income statement. This added about 8 cents per share to its fourth quarter earnings. As a result, IBM beat analysts' forecasts by 1 cent per share.
IBM defended its treatment by claiming that buying and selling businesses is a normal business practice, and that most of the sale proceeds related to intellectual property that it had developed. The article quotes a Merrill Lynch analyst as saying, "Our only concern is that the company could have done more to call out the magnitude of the transaction." According to the article, IBM's share price fell by 4% as a result of this news.
While not mentioned in this article, the SEC opened a preliminary inquiry into IBM's accounting practice, expressing concerns that IBM had let it be known that the reason for its higher operating earnings was tight cost controls, rather than the sale proceeds. This inquiry was subsequently dropped, but the SEC issued a bulletin reminding firms to report gains or losses on asset sales separately from operating costs.
Required
Explain why IBM's share price dropped following the Merrill Lynch analyst's comment and the news of the SEC's preliminary inquiry.
Answer:
The sale of business units are one time events that should not be common. If the only way that IBM can show profit is by selling business divisions, in a very short time it will run out of divisions to sell. A company's intrinsic value is given by its cash flows, especially the operating cash flow.
true or false the only reason to protect intellectual property is financial?
Answer:
false
Explanation:
Why is prioritization an important skill to practice as a student?
Prioritization allows us to make decisions about what is important so we can know what to focus on and what's not as important. Being able to discern tasks that are necessary from those that we should do is crucial. Prioritization is a critical skill to have, but can take some practice to achieve.
Assume the following adjustment data.
1. Supplies on hand at October 31 total $500.
2. Expired insurance for the month is $100.
3. Depreciation for the month is $75.
4. As of October 31, services worth $800 related to the previously recorded unearned revenue had been performed.
5. Services performed but unbilled (and no receivable has been recorded) at October 31 are $280.
6. Interest expense accrued at October 31 is $70.
7. Accrued salaries at October 31 are $1,400.
Prepare the adjusting entries for the items above.
Answer:
1.Dr Supplies Expense $2,000
Cr Supplies $2,000
2. Dr Insurance Expense $100
Cr Prepaid Insurance $100
3. Dr Depreciation Expense $75
Cr Accumulated Depreciation- Equipment $75
4. Dr Unearned Service Revenue $800
Cr Service Revenue $800
5. Dr Accounts Receivable $280
Cr Service Revenue $280
6. Dr Interest Expense $70
Cr Interest Payable $70
7. Dr Salaries & Wages Expense $1,400
Cr Salaries & Wages Payable $1,400
Explanation:
Preparation of the adjusting entries
1. Dr Supplies Expense $2,000
Cr Supplies $2,000
[$2,500 - $500]
2. Dr Insurance Expense $100
Cr Prepaid Insurance $100
3. Dr Depreciation Expense $75
Cr Accumulated Depreciation- Equipment $75
4. Dr Unearned Service Revenue $800
Cr Service Revenue $800
5. Dr Accounts Receivable $280
Cr Service Revenue $280
6. Dr Interest Expense $70
Cr Interest Payable $70
7. Dr Salaries & Wages Expense $1,400
Cr Salaries & Wages Payable $1,400
An engineering student has just finished the freshman year and has received an offer of $20,000 per year in a full-time job. with prospects of salary increasing 3 % per year until retirement after 33 years. If employment is taken, the student will likely not finish his engineering degree. Tuition and other costs are $10,000 next year, increasing at 7% per year. A starting salary of $45.000 could be expected upon graduation from the fouryear program. Salary increases in the engineering job are estimated at 4% per year until retirement after 30 years.
Required:
On the basis of economics alone, should the student take the job now or finish college? Analyze as two mutually exclusive alternatives and solve with present worth analysis. Interest rate is 7%.
Answer:
Since the $860,886.33 which is the present worth of net salary if he finishes his engineering degree is greater than the $357,788.81 which is the present worth of net salary if he does NOT finish his engineering degree, the student should finish college.
Explanation:
This can be dermined based on the following 3 steps:
Step 1: Calculation of present worth of net salary if he does NOT finish his engineering degree
This can be calculated using the formula for calculating the present worth (PW) of a growing annuity as follows:
PWN = (P / (r - g)) * (1 - ((1 + g) / (1 + r))^n) .................... (1)
Where;
PWN = present worth of net salary if he does NOT finish his engineering degree = ?
P = Annual salary = $20,000
r = interest rate per year = 7%, or 0.07
g = growth rate of salary = 3% or 0.03
n = number of years = 33
Substituting the values into equation (1), we have:
PWN = ($20,000 / (0.07 - 0.03)) * (1 - ((1 + 0.03) / (1 + 0.07))^33)
PWN = $357,788.81
Step 2: Calculation of present worth net salary if he finishes his engineering degree
Calculation of the present worth of tuition and other costs
This can be calculated using the formula for calculating the present worth (PW) of a growing annuity as follows:
PWT = (P / (r - g)) * (1 - ((1 + g) / (1 + r))^n) .................... (2)
Where;
PWT = present worth tuition and other costs = ?
P = Tuition and other costs next year = $10,000
r = interest rate per year = 7%, or 0.07
g = growth rate of tuition and other costs = 7% or 0.07
n = number of years = Number of years for engineering degree - One year already spent = 4 - 1 = 3
Substituting the values into equation (2), we have:
PWT = (10,000 / (0.07 - 0.07)) * (1 - ((1 + 0.07) / (1 + 0.07))^3)
PWT = undefined or 0
Note: The PWT is undefined because r = g here. Therefore, it should not be considered in the further analysis.
Calculation of the present worth of salary after graduation
This can be calculated using the formula for calculating the present worth (PW) of a growing annuity as follows:
PWG = (P / (r - g)) * (1 - ((1 + g) / (1 + r))^n) .................... (3)
Where;
PWG = present worth of salary after graduation = ?
P = Starting salary = $45,000
r = interest rate per year = 7%, or 0.07
g = growth rate of salary = 4% or 0.04
n = number of years = 30
Substituting the values into equation (3), we have:
PWG = ($45,000 / (0.07 - 0.04)) * (1 - ((1 + 0.04) / (1 + 0.07))^30)
PWG = $860,886.33
Step 3: Decision
Present worth of net salary if he does NOT finish his engineering degree = $357,788.81
Present worth of net salary if he finishes his engineering degree = present worth of salary after graduation = $860,886.33
Since the $860,886.33 which is the present worth of net salary if he finishes his engineering degree is greater than the $357,788.81 which is the present worth of net salary if he does NOT finish his engineering degree, the student should finish college.
Bassett Corporation has two production departments, Milling and Customizing. The company uses a job-order costing system and computes a predetermined overhead rate in each production department. The Milling Department's predetermined overhead rate is based on machine-hours and the Customizing Department's predetermined overhead rate is based on direct labor-hours. At the beginning of the current year, the company had made the following estimates:
Machining Customizing
Machine-hours 17,000 15,000
Direct labor-hours 3,000 6,000
Total fixed manufacturing overhead cost $102,000 $61,200
Variable manufacturing overhead per machine-hour $1.70
Variable manufacturing overhead per direct labor-hour $4.10
During the current month the company started and finished Job T268. The following data were recorded for this job:
Job T268: Machining Customizing
Machine-hours 80 30
Direct labor-hours 30 50
Direct materials $720 $380
Direct labor cost $900 $1,500
If the company marks up its manufacturing costs by 40% then the selling price for Job T268 would be closest to: (Round your intermediate calculations to 2 decimal places.)
a. $6,763.40
b. $7,440.00
c. $4,831.00
d. $1,932.40
Answer:
a. $6,763.40
Explanation:
The computation of the selling price is shown below:
But before that the predetermined overhead rate is
For machining
= ($102000 ÷ 17,000) + $1.70
= $7.7 per machine hour
For fabrication
= ($61200 ÷ 6000) + $4.10
= $14.30 per labour hour
Now the selling price is
Direct material ($720 + $380) $1,100
Direct labor ($900 + $1,500) $2,400
Machining department overhead (7.7 × 80) $616
Fabrication department overhead (50 × 14.3) $715
Total manufacturing cost $4,831
Markup 40% $1,932.40
Selling price $6,763.40
