Answer:
P(x)=0.97
E(x)=$150
Explanation:
The expected return from the insurance company if the I nsurance is taken out will be:
A.Let assume x is the random variable for the amount received from the Insurance company.
Therefore:
x =$300-$0
=$300-$15,000
P(x)=1-0.03=0.97
P(x)=0.03
B.
E(x)=0.97×$300-$14,700×0.03
=$291-$441
=$150
Fortune Company's direct materials budget shows the following cost of materials to be purchased for the coming three months: January February March $ 3 Material purchases 14,870 11,690 12,760 Payments for purchases are expected to be made 50% in the month of purchase and 50% in the month following purchase. The December Accounts Payable balance is $7,200. The budgeted cash payments for materials in January are
A. $13,580.
B. $13,815
C. $9,980
D. $7,200.
E. $19,960.
Answer:
Total= $14,635
Explanation:
Giving the following information:
Cost of materials:
January= 14,870
February= 11,690
March= 12,760
Payments for purchases are expected to be made 50% in the month of purchase and 50% in the month following purchase.
The December Accounts Payable balance is $7,200.
To calculate the cash disbursement for January, we need to use the following structure:
Cash collection:
Accounts Payable= 7,200
Cash From January= (14,870*0.5)= 7,435
Total= $14,635
Tim, who is subject to a 35 percent marginal gift tax rate, made a gift of a painting to Ben, valuing the property at $7,000. The IRS later valued the gift at $15,000. Compute the applicable undervaluation penalty.
Answer:
The undervaluation penalty is $560
Explanation:
Solution
Under valuation penalty applied when a person valued assets understated to save tax.
The undervaluation reduces the tax and hence comes with accuracy related penalty.
From the example, Tim undervalued the gift of $7,000 which is valued at $15,000 by IRS.
The deduction is undervalued for more than 150% and hence penalty is assessed. this is so because the income tax valuation is lower than 40%, so the penalty rate is 20%
Thus,
The calculation of overvaluation penalty is given below:
Undervaluation = $8000
Tax rate = 35%
Tax amount = $2,800
Penalty rate = 20%
Penalty on undervaluation is =$560
Therefore, the undervaluation penalty is $560
g You want to save sufficient funds to generate an annual cash flow of $50,000 a year for 20 years as retirement income. You currently have no retirement savings but plan to save an equal amount each year for the next 30 years until your retirement. How much do you need to save each year if you can earn 8 percent on the savings? (10 Points)
Answer:
You need to save $4,012.45 each year
Explanation:
Pertiuty in 20 years is $50,000.
So the amount must be in account after 30 years saving to enough for above pertiuty is calculated as below:
= $50000/(1+8%)+ $50000/(1+8%)^2+......+$50000/(1+8%)^20
= $50,000 * Annuity Factor ( 1-20 years) of 8%
=$50000*9.818
= $490,907
To have $490,907 (FV) in account after 30 years (tenor), now you have save an amount each year (PMT) calculated as below:
$490,907 = PMT*(1+8%)^30+....PMT*(1+8%)^2 + PMT*(1+8%)
= PMT * Discount Factor ( 1-30 years) of 8%
$490,907 = PMT * 122.346
-> PMT = $490,907/ 122.346
= $4,012.45
Which of the following statements is FALSE about opportunity cost? A. Opportunity cost exists only for goods with monetary values. B. Cost is always foregone opportunity. C. When a person buys two items, the concept of opportunity cost applies even though she can afford to buy both items. D. Opportunity cost is the next best alternative.
Answer:
A. Opportunity cost exists only for goods with monetary values.
Explanation:
Fundamentally, these are costs in economics used in analysis of a project, and it can also be used for calculation of cost benefits. It is generally known to measure or do all calculation that deals with the current and also forgone alternatives in any condition but this is mainly in economics where it is mostly used.
It is said that when a person buys two or more items, the concept of opportunity cost applies even though she can afford to buy both items and also known to be the best alternative. Here also, cost is notified as foregone opportunity.
A company purchased a computer system at a cost of $25,000. The estimated useful life is 6 years, and the estimated residual value is $8,000. Assuming the company uses the double-declining-balance method, what is the depreciation expense for the second year
Answer:
$5,102
Explanation:
Double declining Method
Cost $ 25,000
B Residual Value $2,000
C = A - B Depreciable base $23,000
D Life [in years] 7
E = C/D Annual SLM depreciation $3,286
F = E/C SLM Rate 14.29%
G = F x 2 DDB Rate 28.57%
.
Depreciation schedule-Double declining
Year Beginning Book Value Depreciation rate Depreciation expense Accumulated Depreciation Ending Book Value
1 $25,000 , 28.57%, $7,143 , $7,143 $17,857
2 $17,857, 28.57%, $ 5,102 , $ 12,245, $12,755
You own a portfolio that has a total value of $130,000 and a beta of 1.28. You have another $49,000 to invest and you would like the beta of your portfolio to decrease to 1.18. What does the beta of the new investment have to be in order to accomplish this
Answer:βB =0.9147=beta of new investment
Explanation:
Total investment= $130,000 + $49,000= $179,000
Using
Portfolio beta(βp) = wA × βA + wB × βB
Where βp is the portfolio beta coefficient,
wA is the weight of the first investment,
βA is the beta coefficient of first investment;
wB is the weight of the second investment,
βB is the beta coefficient of second investment
but weight of investment is stock value/ total investment x 100
wA= 130,000/ 179,000X 100=72.63%
WB= 49,000/179,000 X100=27.374%
Portfolio beta(βp) = wA × βA + wB × βB
1.18=(72.63%*1.28)+(27.374% XβB )
1.18=0.9296+0.27374βB
βB i=(1.18-0.9298)/0.27374
βB =0.9147=beta of new investment
Coronado Company's record of transactions concerning part X for the month of April was as follows.
Purchases Sales
April 1 (balance on hand) 420 0 $7.30 April 5 620
4 720 7.45 12 520
11 620 7.74 27 1,440
26 520 8.18
30 520 8.47
Compute the inventory at April 30 on each of the following bases. Assume that perpetual inventory records are kept in units only. (1) First-in, first-out (FIFO). (2) Last-in, first-out (LIFO). (3) Average-cost. (Round final answers to 0 decimal places, e.g. 6,548.)
Answer:
1.FIFO 5,631.4
2.LIFO 7,685
3.8.8542 per unit
Explanation:
Coronado Company's
1)First-in, first-out (FIFO)
(520×8.47+ 150×8.18)
= 4,404.4+1,227
= 5,631.4
2)Last-in, first-out (LIFO)
(420×7.30+ 620×7.45)
= 3,066+4,619
= 7,685
3.Cost of goods available for sale
Date Transactions Units ×Rate =Total
Apr-01 Beginning inventory 420 ×$7.30 =$3,066
Apr-04 Purchase 720×$7.45 =$5,363
11-Apr Purchase 620 ×$7.74 =$4,798.8
18-Apr Purchase 520×$7.81 =$4,061.2
26-Apr Purchase 920 ×$8.18= $7,525.6
30-Apr Purchase 520 ×$8.47 $4,404.4
Total: 3,300 $29,219
720+620+520+920+520=3,300
$3,066+5,363+4,798.8+4,061.2+7,525.6+4,404.4 =29,219
Average cost per unit =
Total cost of goods available for sale / Units available for sale
Hence:
$29,219 / 3,300
=8.8542 per unit
Time Remaining 39 minutes 48 seconds00:39:48 eBookItem 1Item 1 Time Remaining 39 minutes 48 seconds00:39:48 A private, not-for-profit hospital received contributions of $50,000 from donors on June 15, 20X9. The donors stipulated that their contributions be used to purchase equipment for the hospital. As of June 30, 20X9, the end of the hospital's fiscal year, $12,000 of the contributions had been spent on equipment acquisitions. In the hospital's general fund, what account would be credited to recognize the release of the restrictions on the temporarily restricted contributions used to acquire equipment
Answer: Net Assets Released from Equipment Acquisition Restriction.
Explanation:
When the stipulations by a donor have been satisfied, the assets involved can be removed from being restricted to now being unrestricted. The account credited to recognize this is known as the Net assets released from *asset name* acquisition restriction.
In the above case, the company purchased some equipment with the money they were donated which means that the equipment had satisfied the stipulation for which they were donated funds for. The Net Assets Released from Equipment Acquisition Restriction thus needs to be credited.
Engineering Wonders reports net income of $63 million. Included in that number is building depreciation expense of $5.3 million and a gain on the sale of land of $1.3 million. Records reveal decreases in accounts receivable, accounts payable, and inventory of $2.3 million, $3.3 million, and $4.3 million, respectively. What are Engineering Wonders' net cash flows from operating activities? (List cash outflows and any decrease in cash as negative amounts. Enter your answer in millions. (i.e., $10,000,000 should be entered as 10).)
Answer:
70.3
Explanation:
The calculation of net cash flows from operating activities is shown below:-
Engineering Wonders reports
Net cash flow from operating activities
Particulars Amount
Net income 63
Adjustment to reconcile net
income to net cash
flow from operating activities
Add: Depreciation expense 5.3
Less: Gain on sale of land 1.3
Add: Decrease in Accounts
receivable 2.3
Less: Decrease in accounts
payable 3.3
Add: Decrease in inventory 4.3
Net cash flow from operating
activities 70.3
Therefore the net cash flow from operating activities is 70.3.
Nickolas Imports recorded a restructuring charge of $21.6 million during fiscal 2014 related entirely to the closing of its California based operations in San Diego and in Tijuana, Mexico. The company's financial statement footnotes indicated that expected employee separation payments amounted to $16.8 million and that fixed asset write-downs accounted for the remainder. Nickolas had never before incurred restructuring charges. At the end of the year, the company's balance sheet included a restructuring accrual liability of $3,600,000. Calculate the cash flow effect of Nickolas’s restructuring during fiscal 2014.
Answer: $13,200,000
Explanation:
Nickolas Import recorded a restructuring charge of $21.6 million.
Of this amount, $16.8 million were for employee separation fees.
When calculating the cash flow effect of the restructuring on Nickolas Imports, the $16.8 million is the relevant account. This is because the Asset write downs that make up the rest of the $21.6 million are not cash items neither can they be accrued like normal expenses or Liabilities so they will not be recorded as an Accrual Liability.
The Net Cashflow effect of Nickolas Imports for the year therefore is,
= 16.8 - 3.6
= $13.2 million.
What this means is that with a restructuring accrual liability of $3,600,000 at the end of the year from an initial Balance of $16.8 million, it means that Nickolas Imports must have settled $13,200,000 during the year to be left with that balance of $3,600,000.
How can economies of scale benefit you as a customer and society as a whole? Can the taxicab industry, in large cities, be subject to significant economies of scale? Are ride-sharing services, such as Uber and Lyft, able to take advantage of economies of scale? How or why not?
Answer:
The answer to this question can be described as follows:
Explanation:
The economy scale with cost activity and total volumes of sales, which lowers the overall product prices as a result, and grows all economies of scale, because consumers purchase the stuff like those, who pay even less than the amount they expect to receive.
It is the transition, the same saved money it's spent on other commodities and the overall deficit as well as the actual boosting of financial social assistance that generates income as a whole. It also increases outlays and creates more jobs, and benefits people with higher median income levels and a decent standard of living, For example
Uber often encourages ride-sharing, in which the car is capable of serving 3-4 people simultaneously. This gives a win-win situation to all sides and generates economies of scale. Throughout the market like India, Uber already is introducing it and being extremely successful.
Suppose that the U.S. government decides to charge wine consumers a tax. Before the tax, 25 million bottles of wine were sold every month at a price of $6 per bottle. After the tax, 20 million bottles of wine are sold every month; consumers pay $8 per bottle (including the tax), and producers receive $5 per bottle. The amount of the tax on a bottle of wine is_____________ $ per bottle. Of this amount, the burden that falls on consumers is_________ $ per bottle, and the burden that falls on producers is $___________ per bottle.?
Answer:
Explanation:
From the question, we are informed that before the tax, 25 million wine bottles were sold at price of $6 per bottle and that after the tax, 20 million bottles of wine are sold every month and the consumers pay $8 per bottle which include the tax and producers receive $5 per bottle.
The amount of tax on wine will be the difference between the price consumers pay after the tax and the price producers receive. This will be:
= $8 - $5
= $3 per bottle
The tax burden that falls on the consumers will be difference between price paid after tax and the price which is paid before the tax.
= $8 - $6
= $2 per bottle
The tax burden on the producers will be difference between price received before the tax and price received after the tax.
= $6 - $5
= $1 per bottle
Jaune Magazine (JM) must decide whether or not to publish a tell-all story about a celebrity. If the story ends up having major impact, JM will realize substantial profits from additional magazine sales, subscriptions, and advertising revenues. However, if JM publishes the story, JM will face a lawsuit; if it loses the suit, the penalties could be substantial. The tree below summarizes JM's decision.
The EMV of publishing the story is $10,000. Based on this EMV, JM should publish the story. If the publisher chooses not to publish the story, which of the following best describes the publisher's attitude towards this decision?
A) Risk averse.
B) Risk neutral.
C) Risk seeking.
D) Risqué.
Answer:
The correct option is A, risk averse
Explanation:
Risk aversion is a situation where a person undertaking a business or an investor tries as much as possible to limit exposure to losses by taking drastic steps to ensure the losses do not materialize.
The publisher in this case is conscious of facing the lawsuit that could result from publishing story and has taken a precautionary measure by not even venturing into the publishing ,let alone a lawsuit with substantial amount in damages rears its ugly head.
A risk seeking investor would go ahead with the publishing since success could bring a juicy income
Samantha, who is single and has MAGI of $28,000, was recently employed by an accounting firm. During the year, she spends $2,500 for a CPA exam review course and begins working on a law degree in night school. Her law school expenses were $4,200 for tuition and $450 for books (which are not a requirement for enrollment in the course).
Assuming no reimbursement, how much can Samantha deduct for the:
a. CPA exam review course? $X
b. Law school expenses? $X
Answer:
a. CPA exam review course $0
b. Law school expenses $4,000
Explanation:
1a. CPA exam review course will be $0 because the IRS has disallowed any costs that will lead to qualifying for a different trade .
1b. The Law School expenses will be $4,000 . Based on section 222, Samantha is been limited to $4,000 of the tuition paid.
Therefore the balance of $650 is excess tuition $200 + $450 books which will not qualify under the regular education expense deduction due to the negative position of the IRS on law school costs.
Bill Casler bought a $2000, 9-month certificate of deposit (CD) that would earn 8% annual simple interest. Three months before the CD was due to mature, Bill needed his CD money, so a friend agreed to lend him money and receive the value of the CD when it matured.
Required:
a. What is the value of the CD when it matures?
b. If their agreement allowed the friend to earn a 10% annual simple interest return on his loan to Bill, how much did Bill receive from his friend
Answer:
a. What is the value of the CD when it matures?
$2,120b. If their agreement allowed the friend to earn a 10% annual simple interest return on his loan to Bill, how much did Bill receive from his friend?
$2,068.29Explanation:
interests earned by the CD = $2,000 x 8% x 9/12 = $120
the value of the CD at maturity = $2,000 (principal) + $120 (interests) = $2,120
if the friend wanted to earn 10% on the loan, that is equivalent to 10% x 3/12 = 2.5% for the 3 months
the amount of money received by Bill from his friend = CD's maturity value / (1 + expected interest) = $2,120 / (1 + 2.5%) = $2,120 / 1.025 = $2,068.29
Each of the following is a method by which to allocate joint costs except: Group of answer choices a. Chemical analysis. b. Relative sales value. c. Relative weight, volume, or linear measure. d. Relative marketing costs. g
Answer:
The correct answer is the option A: Chemical analysis.
Explanation:
To begin with, a chemical analysis consists in the study of chemical composition and structure of substances and it refers to the field of chemistry as its name indicates so therefore that it does not implicate the allocation of joint costs as all of the other methods. Moreover, this type of analysis is considered to be the principal basis technique by which every chemical information is obtanied and there are also two main brances in it, the qualitative and quantitative analysis.
Pablo Management has seven employees, each of whom earns $210 per day. They are paid on Fridays for work completed Monday through Friday of the same week. Near year-end, the seven employees worked Monday, December 31, and Wednesday through Friday, of the same week. The next week, the seven employees worked only four days because New Year's Day was an unpaid Holiday.
Required:
a. Prepare the adjusting entry that would be recorded Monday, December 31, 2013.
b. Prepare the journal entry that would be made to record payment of the employees' wages on Friday, Janyary 4, 2014.
Answer:
a) $1,470 Debit –Wage Expense; $1,470 Credit –Wage Payable.
b) $4,410 Debit –Wage Expense; $1,470 Debit –Wage Payable
Explanation:
Remember, we are told each of the worker earns $210 per day. Therefore
a.To record accrued and current wages.Wages expense = 7 workers × 3 days × $210 = $4,410.
b. To record accrued wages four days Cash = 7 workers × 4 days × $210 = $5,880. For one day (7 workers × $210) = $1,470.
Strait Co. manufactures office furniture. During the most productive month of the year, 3,300 desks were manufactured at a total cost of $82,000. In the month of lowest production, the company made 1,130 desks at a cost of $59,000. Using the high-low method of cost estimation, total fixed costs are
Answer:
Using the high-low method of cost estimation, total fixed costs are $47,020
Explanation:
Cost at highest level of activity = $82,000.00
Cost at Lowest level of activity = $59,000.00
Highest level of activity = 3,300
Lowest Level of activity = 1,130
Variable cost per unit = $(82,000 - 59,000) ÷ (3,300 -1,130)
Variable cost per unit = $23,000 ÷ 2,170
Variable cost per unit = $10.60
Fixed Costs = $82,000 - (3,300 × 10.60)
Fixed Costs = $47,020
Account balances at the beginning of the year were: accounts receivable, $180,000; and inventory, $270,000. All sales were on account. Assume that Castile Products, Inc., paid dividends of $2.55 per share during the year. Also assume that the company’s common stock had a market price of $70 at the end of the year and there was no change in the number of outstanding shares of common stock during the year.
Additional information:
The financial statements for Castile Products, Inc., are given below:
Castile Products, Inc.
Balance Sheet
December 31
Assets
Current assets:
Cash $23,000
Accounts receivable, net $250,000
Merchandise inventory $340,000
Prepaid expenses $8,000
Total current assets $621,000
Property and equipment, net $840,000
Total assets $1,461,000
Liabilities and Stockholders' Equity
Liabilities:
Current liabilities $290,000
Bonds payable, 11% $300,000
Total liabilities $590,000
Stockholders’ equity:
Common stock, $10 par value $130,000
Retained earnings $741,000
Total stockholders’ equity $871,000
Total liabilities and equity $1,461,000
Castile Products, Inc.
Income Statement
For the Year Ended December 31
Sales $2,140,000
Cost of goods sold $1,230,000
Gross margin $910,000
Selling and administrative expenses $600,000
Net operating income $310,000
Interest expense $33,000
Net income before taxes $277,000
Income taxes (30%) $83,100
Net income $193,900
Required:
Compute financial ratios as follows: 1. Earnings per share. (Round your answer to 2 decimal places.) 2. Dividend payout ratio. (Round your intermediate calculations to 2 decimal places. Round your final percentage answer to 1 decimal place (i.e., 0.1234 should be considered as 12.3%).) 3. Dividend yield ratio. (Round your percentage answer to 1 decimal place (i.e., 0.1234 should be considered as 12.3%).) 4. Price-earnings ratio. (Round your intermediate calculations to 2 decimal places and final answer to 1 decimal place.) 5. Book value per share. (Round your answer to 2 decimal places.)
Answer:
$14.9217.1%3.6%4.7$67Explanation:
1. Earnings per share = net income / average shares outstanding = $193,900 / 13,000 stocks = $14.92
2. Dividend payout ratio = total dividends / net income = ($2.55 x 13,000) / $193,900 = $33,150 / $193,900 = 17.1%
3. Dividend yield ratio = dividend per share / market price per share = $2.55 / $70 = 3.6%
4. Price-earnings ratio = price per share / earnings per share = $70 / $14.92 = 4.7
5. Book value per share = (stockholders' equity - preferred stocks) / total number of stocks outstanding = $871,000 / 13,000 = $67
Palisade Creek Co. is a merchandising business that uses the perpetual inventory system. The account balances for Palisade Creek Co. as of May 1, 2016 (unless otherwise indicated), are as follows:
110 Cash $ 83,600
112 Accounts Receivable 233,900
115 Merchandise Inventory 624,400
116 Estimated Returns Inventory 28,000
117 Prepaid Insurance 16,800
118 Store Supplies 11,400
123 Store Equipment 569,500
124 Accumulated Depreciation-Store Equipment 56,700
210 Accounts Payable 96,600
211 Salaries Payable ---
212 Customers Refunds Payable 50,000
310 Common Stock 100,000
311 Retained Earnings 585,300
312 Dividends 135,000
313 Income Summary ----
410 Sales 5,069,000
510 Cost of Merchandise Sold 2,823,000
520 Sales Salaries Expense 664,800
521 Advertising Expense 281,000
522 Depreciation Expense ---
523 Store Supplies Expense ---
529 Miscellaneous Selling Expense 12,600
530 Office Salaries Expense 382,100
531 Rent Expense 83,700
532 Insurance Expense ---
539 Miscellaneous Administrative Expense 7,800
During May, the last month of the fiscal year, the following transactions were completed:
May
1 Paid rent for May, $5,000.
3 Purchased merchandise on account from Martin Co., terms 2/10, n/30, FOB shipping point, $36,000.
4 Paid freight on purchase of May 3, $600.
6 Sold merchandise on account to Korman Co., terms 2/10, n/30, FOB shipping point, $68,500. The cost of the merchandise sold was $41,000.
7 Received $22,300 cash from Halstad Co. on account.
10 Sold merchandise for cash, $54,000. The cost of the merchandise sold was $32,000.
13 Paid for merchandise purchased on May 3.
15 Paid advertising expense for last half of May, $11,000.
16 Received cash from sale of May 6.
19 Purchased merchandise for cash, $18,700.
19 Paid $33,450 to Buttons Co. on account.
20 Paid Korman Co. a cash refund of $13,230 for returned merchandise from sale of May 6. The invoice amount of the returned merchandise was $13,500 and the cost of the returned merchandise was $8,000.
20 Sold merchandise on account to Crescent Co., terms 1/10, n/30, FOB shipping point, $110,0000. The cost of the merchandise sold was $70,000.
21 For the convenience of Cresecent Co., paid freight on sale of May 20, $2,300.
21 Received $42,900 cash from Gee Co. on account.
21 Purchased merchandise on account from Osterman Co., terms 1/10, n/30, FOB destination, $88,000.
24 Returned damaged merchandise purchased on May 21, receiving a credit memo from the seller for $5,000.
26 Refunded cash on sales made for cash, $7,500. The cost of the merchandise returned was $4,800.
28 Paid sales salaries of $56,000 and office salaries of $29,000.
29 Purchased store supplies for cash, $2,400.
30 Sold merchandise on account to Turner Co., terms 2/10, n/30, FOB shipping point, $78,750. The cost of the merchandise sold was $47,000.
30 Received cash from sale of May 20 plus freight paid on May 21.
31 Paid for purchase of May 21, less return of May 24.
Required:
Enter the May 1 balances of each of the accounts in the appropriate balance column of a four-column account.
Enter May 1 in the date column. Write Balance in the item section, and place a check mark (?) in the Posting Reference column.
Answer:
1 Paid rent for May, $5,000.
Dr Rent expense 5,000
Cr Cash 5,000
3 Purchased merchandise on account from Martin Co., terms 2/10, n/30, FOB shipping point, $36,000.
Dr Merchandise inventory 36,000
Cr Accounts payable 36,000
4 Paid freight on purchase of May 3, $600.
Dr Merchandise inventory 600
Cr Cash 600
6 Sold merchandise on account to Korman Co., terms 2/10, n/30, FOB shipping point, $68,500. The cost of the merchandise sold was $41,000.
Dr Accounts receivable 68,500
Cr Sales revenue 68,500
Dr Cost of Merchandise Sold 41,000
Cr Merchandise inventory 41,000
7 Received $22,300 cash from Halstad Co. on account.
Dr Cash 22,300
Cr Accounts receivable 22,300
10 Sold merchandise for cash, $54,000. The cost of the merchandise sold was $32,000.
Dr Cash 54,000
Cr Sales revenue 54,000
Dr Cost of Merchandise Sold 32,000
Cr Merchandise inventory 32,000
13 Paid for merchandise purchased on May 3.
Dr Accounts payable 36,000
Cr Cash 36,000
15 Paid advertising expense for last half of May, $11,000.
Dr Advertising expense 11,000
Cr Cash 11,000
16 Received cash from sale of May 6.
Dr Cash 67,130
Dr Sales discounts 1,370
Cr Accounts receivable 68,500
19 Purchased merchandise for cash, $18,700.
Dr Merchandise inventory 18,700
Cr Cash 18,700
19 Paid $33,450 to Buttons Co. on account.
Dr Accounts payable 33,450
Cr Cash 33,450
20 Paid Korman Co. a cash refund of $13,230 for returned merchandise from sale of May 6. The invoice amount of the returned merchandise was $13,500 and the cost of the returned merchandise was $8,000.
Dr Sales revenue 13,230
Cr Cash 13,230
Dr Merchandise inventory 8,000
Cr Cost of Merchandise Sold 8,000
20 Sold merchandise on account to Crescent Co., terms 1/10, n/30, FOB shipping point, $110,0000. The cost of the merchandise sold was $70,000.
Dr Accounts receivbale 110,000
Cr Sales revenue 110,000
Dr Cost of Merchandise Sold 70,000
Cr Merchandise inventory 70,000
21 For the convenience of Cresecent Co., paid freight on sale of May 20, $2,300.
Dr Accounts receivable 2,300
Cr Cash 2,300
21 Received $42,900 cash from Gee Co. on account.
Dr Cash 42,900
Cr Accounts receivable 42,900
21 Purchased merchandise on account from Osterman Co., terms 1/10, n/30, FOB destination, $88,000.
Dr Merchandise inventory 88,000
Cr Accounts payable 88,000
24 Returned damaged merchandise purchased on May 21, receiving a credit memo from the seller for $5,000.
Dr Accounts payable 5,000
Cr Merchandise inventory 5,000
26 Refunded cash on sales made for cash, $7,500. The cost of the merchandise returned was $4,800.
Dr Sales revenue 7,500
Cr Cash 7,500
Dr Merchandise inventory 4,800
Cr Cost of Merchandise Sold 4,800
28 Paid sales salaries of $56,000 and office salaries of $29,000.
Dr Wages expense 85,000
Cr Cash 85,000
29 Purchased store supplies for cash, $2,400.
Dr Supplies 2,400
Cr Cash 2,400
30 Sold merchandise on account to Turner Co., terms 2/10, n/30, FOB shipping point, $78,750. The cost of the merchandise sold was $47,000.
Dr Accounts receivable 78,750
Cr Sales revenue 78,750
Dr Cost of Merchandise Sold 47,000
Cr Merchandise inventory 47,000
30 Received cash from sale of May 20 plus freight paid on May 21.
Dr Cash 110,100
Dr Sales discounts 2,200
Cr Accounts receivable 112,300
31 Paid for purchase of May 21, less return of May 24.
Dr Accounts payable 83,000
Cr Cash 82,170
Cr Purchase discounts 830
I prepared a general ledger for May in an excel spreadsheet that I attached.
The following partially completed process cost summary describes the July production activities of Ashad Company. Its production output is sent to its warehouse for shipping. All direct materials are added to products when processing begins. Beginning work in process inventory is 20% complete with respect to conversion.Equivalent Units of ProductionDirect MaterialsConversion Units transferred out43,000 43,000 Units of ending work in process 4,700 2,820 Equivalent units of production47,700 45,820 Costs per EUPDirect MaterialsConversion Costs of beginning work in process$ 28,450 $3,270 Costs incurred this period 667,970 271,650 Total costs$696,420 $274,920 Units in beginning work in process (all completed during July) 4,200 Units started this period 43,500 Units completed and transferred out 43,000 Units in ending work in process 4,700Prepare its process cost summary using the weighted-average method. (Round "Cost per EUP" to 2 decimal places.)
Answer:
Materials costs =$ 14.6 Per EUP
Conversion Costs= $6 Per EUP
Explanation:
Ashad Company
Process Cost Summary
Weighted Average Method
Equivalent Units of Production
Direct Materials Conversion
Units transferred out 43,000 43,000
Units of ending work in process 4,700 2,820
Equivalent units of production 47,700 45,820
Costs per EUP
Direct Materials Conversion
Costs of beginning work in process$ 28,450 $3,270
Costs incurred this period 667,970 271,650
Total costs $696,420 $274,920
Equivalent units of production 47,700 45,820
Cost Per Equivalent Unit $696,420/ 47,700 $274,920/ 45,820
$ 14.6 Per EUP $6 Per EUP
Halifax Manufacturing allows its customers to return merchandise for any reason up to 90 days after delivery and receive a credit to their accounts. All of Halifax's sales are for credit (no cash is collected at the time of sale). The company began 2021 with a refund liability of $330,000. During 2021, Halifax sold merchandise on account for $11,800,000. Halifax's merchandise costs is 70% of merchandise selling price. Also during the year, customers returned $345,000 in sales for credit, with $191,000 of those being returns of merchandise sold prior to 2021, and the rest being merchandise sold during 2021. Sales returns, estimated to be 3% of sales, are recorded as an adjusting entry at the end of the year.
Required:
a. Prepare the entry to record the merchandise returns and the year-end adjusting entry for estimated returns.
b. What is the amount of the year-end allowance for sales returns after the adjusting entry is recorded?
Answer:
Halifax Manufacturing allows its customers to return merchandise for any reason up to 90 days after delivery and receive a credit to their accounts. All of Halifax's sales are for credit (no cash is collected at the time of sale). The company began 2021 with a refund liability of $330,000. During 2021, Halifax sold merchandise on account for $11,800,000. Halifax's merchandise costs is 70% of merchandise selling price. Also during the year, customers returned $345,000 in sales for credit, with $191,000 of those being returns of merchandise sold prior to 2021, and the rest being merchandise sold during 2021. Sales returns, estimated to be 3% of sales, are recorded as an adjusting entry at the end of the year.
Explanation:
Halifax Manufacturing allows its customers to return merchandise for any reason up to 90 days after delivery and receive a credit to their accounts. All of Halifax's sales are for credit (no cash is collected at the time of sale). The company began 2021 with a refund liability of $330,000. During 2021, Halifax sold merchandise on account for $11,800,000. Halifax's merchandise costs is 70% of merchandise selling price. Also during the year, customers returned $345,000 in sales for credit, with $191,000 of those being returns of merchandise sold prior to 2021, and the rest being merchandise sold during 2021. Sales returns, estimated to be 3% of sales, are recorded as an adjusting entry at the end of the year.
The following inventory balances relate to Lequin Manufacturing Corporation at the beginning and end of the year: Beginning Ending Raw materials $14,000 $19,000 Work in process $31,000 $7,000 Finished goods $25,000 $23,000 Lequin's total manufacturing cost was $543,000. What was Lequin's cost of goods sold?
Answer:
Cost of goods sold = $564,000
Explanation:
The cost of goods sold would be determined as follows:
$
Opening inventory
Raw material = 14,000
Work in progress 31,000
Manufacturing cost 543,000
588,000
Add open inventory of Finished goods 25,000
Less Closing inventory
raw material ( 19,000)
Work in progress ( 7,000)
Total cost of goods available for sale 587,000
Less closing inventory of finished goods 23,000
Cost of goods sold 564,000
Note that the opening inventory of raw material and work in progress would increase the manufacturing cost while their respective closing inventory represent cost incurred on production during the period on inventories not yet completed
If Katerina were delivering an expository speech about strip mining, she would be presenting _______________________. a. an informative process speech b. an exposition of a theory, principle, or law c. an exposition of political, economic, social, religious, or ethical issues d. an exposition of historical events and forces
Answer:
a. an informative process speech
Explanation:
An expository speech is one that explains the processes involved in doing an activity. It is meant to inform the audience on processes involved in executing a task.
In this scenario strip mining is the process of removing the top layer of soil in order to gain access to a mineral. This process is opposed to digging of deep holes to access minerals. The method is commonly used in coal reserves.
An expository speech by Katerina on strip mining will be an informative process speech on this process of mining minerals
Nate is a partner in a partnership that received $5,000 of interest income this year. Nate's share of the interest is $1,000, and he should report this income on his individual return as:
Answer:
Interest Income
Explanation:
Based on the described scenario it can be said that Nate should report this income on his individual return as Interest Income. This is the amount of interest that the individual has earned in a specific period of time. This is what Nate has made by collecting his share of the interest and should be reported as such since Income from flow-through entities retains its character when reported on individual returns.
Use the following information to answer the question: There are three firms in an economy: X, Y, and Z. Firm X buys $400 worth of goods from Firm Y, and $200 worth of goods from Firm Z to produce 250 units of output at $3 per unit. Firm Y buys $250 worth of goods from Firm X and $250 worth of goods from Firm Z to produce 250 units of output at $4 per unit. Firm Z buys $100 worth of goods from Firm X and $500 worth of goods from Firm Y to produce 500 units at $2 per unit. Given this information, using the Value Added approach to eliminating intermediate goods and services (in order to avoid double-counting), what is the economy's GDP
Answer:
$1,050
Explanation:
Value Added Approach to calculating the GDP avoids double counting by adding only the value addition of all firms in an economy to obtain the GDP. Value addition for each firm can be calculated by deducting the intermediate purchase of each firm from its intermediate sales as follows:
Firm X value addition = ($250 * 3) - $400 - $200 = $750 - $600 = $150
Firm Y value addition = ($250 * 4) - $250 - $250 = $1,000 - $500 = $500
Firm Z value addition = (500 * 2) - $100 - $500 = $1,000 - $600 = $400
Therefore, we have:
The economy's GDP = $150 + $500 + $400 = $1,050
Sarah has a toothache. She believes it may be due to her not having regular dental checkups in the past. She now wants to find a dentist, but does not have one that she has used in the past. Because dentistry has __________ properties, Sarah plans to ask her friends for a recommendation for a dentist they like to be sure that she finds a good one.
Answer:
Credence properties
Explanation:
Dentistry has a Credence property because it is a Service provided by medical specialized professionals. medical diagnoses and legal services have credence properties, or characteristics. A consumer may find a service with Credence property impossible to evaluate even after purchase and consumption. To reduce this uncertainty, service consumer like Sarah turns to personal sources of information like her friends during the purchase decision process
Adger Corporation is a service company that measures its output based on the number of customers served. The company provided the following fixed and variable cost estimates that it uses for budgeting purposes and the actual results for May as shown below:
Fixed Element Variable Element Actual Total
per Month per Customer Served for May
Revenue $5,000 $160,000
Employee salaries and wages $50,000 $1,100 $88,000
Travel expenses $600 $19,000
Other expenses $36,000 $34,500
When preparing its planning budget, the company estimated that it would serve 30 customers per month; however, during May the company actually served 35 customers.
Required:
1. What amount of revenue would be included in Adger's flexible budget for May?
2. What amount of employee salaries and wages would be included in Adger's flexible budget for May?
3. What amount of travel expenses would be included in Adger's flexible budget for May?
4. What amount of other expenses would be included in Adger's flexible budget for May?
5. What net operating income would appear in Adger's flexible budget for May?
Answer:
1. Total Revenue in May $ 175,000
2. Total Salaries & wages For May $ 88500
3. Total Travel Expenses for May $21,000
4. Other Expense $ 36,000
5. Operating Income $ 65,500
Explanation:
Given
Adger Corporation
Fixed Element Variable Element Actual Total
per Month per Customer Served for May
Revenue $5,000 $160,000
Employee Salaries
& wages $50,000 $1,100 $88,000
Travel expenses $600 $19,000
Other expenses $36,000 $34,500
There were 35 customers.
Revenue = $5000 per customer
We can easily calculate as we have been given the number of customers and the variable element of expense per customer.
1. Total Revenue in May = 5000 * 35= $ 175,000
Variable Salaries & wages = $ 1100 per customer
Total Variable Salaries & wages = $ 1100 *35= $ 38500
2. Total Salaries & wages For May = Variable + Fixed
= $ 38500 + $50,000= $ 88500
Travel expenses = $600per customer
3. Total Travel Expenses for May = $ 600 *35= $21,000
4. Other Expense = Fixed Expenses = $ 36,000 ( there are no variable expenses)
5. Operating Income= Revenue - Employee Salaries - Travel Expenses
= $ 175,000- $ 88500 - $ 21,000= $ 65,500
Other expenses are included in the net income statement not operating income statement.
Minor Company installs a machine in its factory at the beginning of the year at a cost of $135,000. The machine's useful life is estimated to be 5 years, or 300,000 units of product, with a $15,000 salvage value. During its first year, the machine produces 64,500 units of product. Determine the machines' first year depreciation under the units-of-production method.
Answer:
$25,800
Explanation:
The units-of-production deprecation method depreciates an asset based on the total units produced each year.
Unit of production depreciation expense = (units produced / total expected units of production) × (cost of asset - salvage value)
(64,500 / 300,000) x ($135,000 - $15,000)
0.215 x $120,000 = $25,800
I hope my answer helps you
Item15 0.3 points eBookPrintReferences Check my work Check My Work button is now enabledItem 15Item 15 0.3 points Corporation Q, a calendar year taxpayer, has incurred the following Section 1231 net gains and losses since its formation in 2015. 2015 2016 2017 Section 1231 gains $ 14,800 $ 5,700 0 Section 1231 losses (13,000 ) (9,000 ) $ (3,100 ) Net gain or (loss) $ 1,800 $ (3,300 ) $ (3,100 ) In 2018, Corporation Q sold only one asset and recognized a $4,000 Section 1231 gain. How much of this gain is treated as capital gain, and how much is ordinary
Answer:
$4,000 is treated as a capital gain and then reduced by the un-offset net losses in 2016 ($300) and 2017 ($100) to arrive at net capital gain of $3,600 ($4,000 - 300 - 100). $0 of the amount is treated as an ordinary income.
Explanation:
Section 1231 gain arises when an asset (real property or depreciable business property) is sold for more than its current tax basis. The gain is regarded as a capital gain and taxed at the lower capital gain rates and not as ordinary income.
Section 1231 property are assets used in trade or business and held by the Taxpayer for more than one year. A gain on the sale of Section 1231 business property is treated as a long-term capital gain.
