Answer:
The Manda Panda Company
1. This is not a loss contingency. A loss contingency refers to a probable payment that might result from an uncertain event.
2. The bad debt expense that Manda Panda should report in its 2009 income statement is $70,000 ($73,000 -$75,000 + $72,000).
3. Debit Allowance for Uncollectible accounts $3,000
Credit Bad Debts Expense $3,000
To reduce the allowance account from $75,000 to $72,000.
Debit Bad Debts Expense $73,000
Credit Accounts Receivable account $73,000
To write-off the bad debts.
4. The net realizable value of accounts receivable is $418,000 ($490,000 - 72,000)
Explanation:
a) Data and Calculations:
Allowance for Uncollectible account (credit balance) = $75,000
Credit sales for 2009 = $2.4 million
Year-end Accounts Receivable = $490,000
Bad Debts = $73,000
Estimated allowance for Uncollectible = 3% of all credit sales (3% of $2.4 million) = $72,000
b) A contingency loss requires that a liability be created to account for the loss. This is not the case with making allowances for uncollectible accounts or writing off bad debts. There is no need to create a liability account since no payment will eventually be made to settle any liability in the future.
On January 1, 2020, Bridgeport Corporation issued $3,740,000 of 10-year, 8% convertible debentures at 102. Interest is to be paid semiannually on June 30 and December 31. Each $1,000 debenture can be converted into 8 shares of Bridgeport Corporation $100 par value common stock after December 31, 2021. On January 1, 2022, $374,000 of debentures are converted into common stock, which is then selling at $111. An additional $374,000 of debentures are converted on March 31, 2022. The market price of the common stock is then $116. Accrued interest at March 31 will be paid on the next interest date. Bond premium is amortized on a straight-line basis. Make the necessary journal entries for: (a) December 31, 2021. (c) March 31, 2022. (b) January 1, 2022. (d) June 30, 2022.
Answer:
Bridgeport Corporation
Journal Entries:
(a) December 31, 2021.
Debit Interest on Debentures $149,600
Credit Cash $149,600
To record the interest expense and payment for the six months.
Debit Debentures Premium $3,740
Credit Interest on Debentures $3,740
To record the amortization of the debentures premium.
(b) January 1, 2022.
Debit Debenture $374,000
Credit Common Stock $299,200
Credit APIC $74,800
To record the conversion of debentures to shares.
(c) March 31, 2022.
Debit Debenture $374,000
Credit Common Stock $299,200
Credit APIC $74,800
To record the conversion of debentures to shares.
Debit Interest on Debentures $67,320
Credit Interest Payable $67,320
To accrue interest for the quarter.
Debit Debentures Premium $1,870
Credit Interest on Debentures $1,870
To record the amortization of the debentures premium for the quarter.
(d) June 30, 2022.
Debit Interest on Debentures $59,840
Credit Interest payable $59,840
To accrue interest for the quarter.
Debit Debentures Premium $1,870
Credit Interest on Debentures $1,870
To record the amortization of the debentures premium for the quarter.
Debit Interest Payable $127,160
Credit Cash $127,160
To record payment of interest for the six months.
Explanation:
a) Data and Calculations:
Issue of 10-year 8% Convertible Debentures at 102 = $3,814,800 (Cash)
Debenture premium $74,800
Half-yearly premium amortization = $74,800/20 = $3,740
Face value = $3,740,000
b) Interest on Debenture = $3,740,000 * 8% * 1/2 = $149,600
c) $374,000 debentures converted into 8 shares for every $1,000.
= $374,000/1,000 * 8 = 2,992 shares at $100 par value
d) Interest on Debentures ($3,740,000 - $374,000) * 8% * 1/4
= $3,366,000 * 8% * 1/4 = $67,320
Plus
$3,366,000 - $374,000 * 8% * 1/4 = $59,840
Total interest = $127,160
The total amount of depreciation recorded against an asset over the entire time the asset has been owned: Multiple Choice Is shown on the income statement of the final period. Is referred to as an accrued asset. Is only recorded when the asset is disposed of. Is referred to as depreciation expense. Is referred to as accumulated depreciation.
Answer:
Is referred to as accumulated depreciation.
Explanation:
Depreciation can be defined as the reduction of cost of a fixed asset systematically until the value of the asset becomes zero.
The Modified Accelerated Cost Recovery System (MACRS) can be defined as a depreciation system that avails business owners or companies the ability and opportunity to recover or recoup the cost basis of physical assets that have experienced deterioration over a specific period of time.
In the United States of America, the Modified Accelerated Cost Recovery System (MACRS) is used mainly for tax purposes because it gives room for faster depreciation of a physical asset in its first years or initial usage and reduces depreciation as it is being used over a long period of time.
Hence, the total amount of depreciation recorded against an asset over the entire time the asset has been owned is referred to as accumulated depreciation.
Revise the following sentences to eliminate flabby expressions.
a. Despite the fact that we lost the contract, we must at this point in time move forward.
b. In the event that interest rates increase, we will begin investing in the very near future.
Answer:
. Despite the fact that we lost the contract, we must at this point in time move forward.
Explanation:
Question
Felicia Rashad Corporation has pretax financial income (or loss) equal to taxable income (or loss) from 2006 through 2014 as follows.
Income (Loss) Tax Rate
2006 $29,000 30 %
2007 40,000 30 %
2008 17,000 35 %
2009 48,000 50 %
2010 (150,000 ) 40 %
2011 90,000 40 %
2012 30,000 40 %
2013 105,000 40 %
2014 (60,000) 45 %
Pretax financial income (loss) and taxable income (loss) were the same for all years since Rashad has been in business. Assume the carryback provision is employed for net operating losses. In recording the benefits of a loss carryforward, assume that it is more likely than not that the related benefits will be realized.
a) What entries for income taxes should be recorded for 2010? .
b) Indicate what the income tax expense portion of the income statement for 2010 should look like. Assume all income (loss) relates to continuing operations.
c)What entry for income taxes should be recorded in 2011?
d) How should the income tax expense section of the income statement for 2011 appear?
e) what entry for income taxes should be recorded in 2014
f) how should the income tax expense section of the statement for 2104 appear to be ?
?
Answer:
A. Dr Deferred Tax Asset 60,000.00
Cr Deferred Tax 60,000.00
B. Income Statement (Partial)
Current Tax -
Deferred Tax (60,000.00)
Total Tax (60,000.00)
C.Dr Deferred Tax Asset 36,000
Cr Deferred Tax 36,000
D. Income Statement (Partial)
Current Tax -
Deferred Tax 36,000
Total Tax 36,000
E. Dr Deferred Tax Asset 27,000
Cr Deferred Tax 27,000
F. Income Statement (Partial)
Current Tax -
Deferred Tax 27,000
Total Tax 27,000
Explanation:
A. Calculation for what the entries for income taxes should be recorded for 2010
Entries for Income tax for 2010
Dr Deferred Tax Asset 60,000.00
Cr Deferred Tax 60,000.00
2010 (150,000 *40 %)
(To record timing difference of carry forward losses)
b) Indication for what the income tax expense portion of the income statement for 2010 should look like. :
Felicia Rashad Corporation
Income Statement (Partial)
Current Tax -
Deferred Tax (60,000.00)
Total Tax (60,000.00)
c) Calculation for what the entries for income taxes should be recorded for 2011
Dr Deferred Tax Asset 36,000
Cr Deferred Tax 36,000
2011 (90,000* 40 %)
(To record deferred tax asset utilization)
d) Income tax expense section of the income statement for 2011 appear
Felicia Rashad Corporation
Income Statement (Partial)
Current Tax -
Deferred Tax 36,000
Total Tax 36,000
e) Calculation for what the entries for income taxes should be recorded for 2014
Dr Deferred Tax Asset 27,000
Cr Deferred Tax 27,000
2014 (60,000*45 %)
(To record deferred tax asset utilization)
f) Income tax expense section of the income statement for 2014 appear
Felicia Rashad Corporation
Income Statement (Partial)
Current Tax -
Deferred Tax 27,000
Total Tax 27,000
Lee Financial Services pays employees monthly. Payroll information is listed below for January 2018, the first month of Lee's fiscal year. Assume that none of the employees exceeded any relevant wage base.
Salaries $470,000
Federal income taxes to be withheld 94,000
Federal unemployment tax rate 0.60%
State unemployment tax rate (after
FUTA deduction) 5.40%
Social security tax rate 6.20%
Medicare tax rate 1.45%
Required:
1. Calculate the income and payroll taxes for the January 2018 pay period.
2. Prepare the appropriate journal entries to record salaries and wages expense (not paid) and payroll tax expense for the January 2018 pay period.
Answer and Explanation:
1. The computation is shown below:
As we know that employee taxes involved the social security tax, medicare tax and the income tax
Social security tax
= Gross pay × 6.2%
= $470,000 × 6.2%
= $29,140
Medicare tax
= Gross pay × 1.45%
= $470,000 × 1.45%
= $6,815
And,
Income tax withheld = $94,000
Now payroll taxes involved social security tax, Medicare tax, Federal unemployment tax, and state unemployment tax.
Social security tax
= Gross pay × 6.2%
= $470,000 × 6.2%
= $29,140
Medicare tax
= Gross pay × 1.45%
= $470,000 × 1.45%
= $6,815
Federal unemployment tax is
= Gross pay × 0.6%
= $470,000 × 0.6%
= $2,820
State unemployment tax
= Gross pay × 5.40%
= $470,000 × 5.40%
= $25,380
2. Now the journal entries are
On January, 2018
Salaries wages expense $470,000
To Withholding income tax payable $94,000
To Social security tax payable $29,140
To Medicare tax payable $6,815
to Salaries and wages payable $340,045
(being salaries and wages expense is recorded)
On Jan 2018
Payroll tax expense $64,155
To Social security tax payable $29,140
To Medicare tax payable $6,815
To Federal unemployment tax payable $2,820
To State unemployment tax payable $25,380
(being tax liabilities is recorded)
For each of the following scenarios, show how each market is affected. Label the initial equilibrium price P1, and the original quantity Q1. Label the new equilibrium price P2 and the quantity Q2.Due to perfect weather conditions, there is a larger than expected crop of oranges this year. The weather conditions do not affect the crop of tangerines. Citrus juice is made from either oranges or tangerines and consumers have no preference for one or the other. Lastly, citrus juice and oatmeal are complements and oats are required to make oatmeal.a. Market for oranges,b. Market for citrus juice,c. Market for tangerines,d. Market for oatmeal,e. Market for oats.
Answer:
See answers below; in details.
Explanation:
A rephrase of the question:
Consider the following conditions and describe what happens to equilibrium price and quantity in each of the listed markets.
(A) MARKET FOR ORANGES
- There are better (or perfect) weather conditions this year
- This will bring about a larger harvest of oranges
- Q2 > Q1
- P2 < P1 , owing to the law of demand and supply. Truly, in this case, 'all other things' such as consumer taste are constant and the weather conditions didn't increase or reduce the turnout of tangerines.
(B) MARKET FOR CITRUS JUICE
- The information given (where consumer taste is constant) shows that the law of rationality applies. Customers/Consumers are rational. They'll go for the cheaper type of citrus juice and this price depends on the magnitude of raw materials such as the tangerines or oranges themselves.
- Given a higher output of oranges, the market for citrus juice will boom. Hence Q2 of citrus juice > Q1 of citrus juice
- P2 of citrus juice < P1 of citrus juice
(C) MARKET FOR TANGERINES
- The information given about absence of consumer preference shows that oranges & tangerines are perfect substitutes.
- Substitution here means that one can perfectly replace the other and/or both fruits give the same value to end users.
- This means that there'll be less purchase of tangerines (either raw or juice) owing to the increased availability of oranges. Keep in mind that the quantity of tangerines harvested or produced did not fall in the year.
- So Q2 = Q1
- There is less purchase of tangerines this year and tangerine is a perishable good (it spoils or loses value with time) so, to encourage consumer purchase, producers in the market for tangerine will reduce the price. So P2 < P1
(D) MARKET FOR OATMEAL & (E) MARKET FOR OATS
- Citrus juice and oatmeal are complements. This means that they go together; in consumption. Just like the consumption of PMS is complementary to the consumption of car tires.
- The markets for oats and oatmeal will boom because the market for citrus juice is booming.
- As people consume more citrus juice, they'll purchase and consume more oatmeal.
- The output of oats under this weather condition isn't given so, we'll assume it to be constant.
- So the quantity of oats is constant but the price of oats will rise because its demand will rise or has risen. Q2 = Q1 ; P2 > P1
- In the market for oatmeal, quantity will increase and price will rise, due to higher demand. Q2 > Q1 ; P2 > P1
Which of the following is a simple sentence?
a. Because we will be reducing employee health insurance benefits, some employees may be unhappy; however, we must make sure that they understand the reason for the change.
b. HMO and PPO insurance plans offer additional cost savings.
c. Having healthy employees decreases the cost of monthly premiums; therefore, we will be implementing a wellness program.
d. If health insurance costs continue to rise, employee copays may increase.
The simple sentence is:b. HMO and PPO insurance plans offer additional cost savings.
A simple sentence is a sentence with one independent clause (also called a main clause). It can have a compound subject or predicate. There is only one independent clause in a simple sentence and it expresses a single thought. Among the given sentences, the simple sentence is:b. HMO and PPO insurance plans offer additional cost savings.
Explanation:The sentence "HMO and PPO insurance plans offer additional cost savings" is a simple sentence because it contains only one subject-verb pair, “HMO and PPO insurance plans” (subject), “offer” (verb).
The sentence is clear and straightforward. It contains no dependent clauses or conjunctions that join two independent clauses. Hence, this sentence is a simple sentence.
for such more question on insurance
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Gonzalez, Inc. has a fiscal year-end of September 30th. On March 1, 2018, Gonzalez authorized $800,000 of bonds payable, with a term of 12 years. The bonds carry a stated interest rate of 6%, with interest to be paid semi-annually on February 28th and August 31st. On August 1, 2019, Gonzalez issued three-quarters of the bonds for cash, at a premium of $25,400.
Required:
Prepare the journal entries that would be required relating to the bonds over period March 1, 2018 through September 30, 2019.
Answer:
August 1, 2019
Dr. Cash $625,400
Cr. Premium on Bond $25,400
Cr. Bond Payable $600,000
August 31, 2019
Dr. Interest Expense $16,941.67
Dr. Premium on Bond $1,058.33
Cr. Cash __________$18,000
September 30, 2019
Dr. Interest Expense $2,823.61
Dr. Premium on Bond $176.39
Cr. Cash __________$3,000
Explanation:
August 1, 2019
As the Bond was issued on August 1, 2019, So the first entry will be made at the issuance
Issuance of Bond = Total authorized x 3/4 = $800,000 x 3/4 = $600,000
Cash receipt = Face value + Premium on Bond = $600,000 + $25,400 = $625,400
August 31, 2019
As interest is paid on this date.
Interst payment = Face value x Coupon rate = $600,000 x 6% x 6/12 = $18,000
Amortization of Bond Premium ( Straight line ) = Premium on Bond / ( Years to maturity x Coupon payment period per year ) = $25,400 / ( 12 years x 2 periods per year ) = $1,058.33
September 30, 2019
On this date interest of one month is accrued which needs to be recorded.
Interest payable = 600,000 x 6% x 1/12 = $3,000
Amortization of Bond Premium ( Straight line ) = ( 25,400 / 24 ) / 6 = $176.39
Abigail has just signed a 5-year lease for her new business. The full annual lease amount is due at the beginning of every year and such cash flows have been agreed to be 20,156 dollars now and the subsequent payments to increase by 5% per year until maturity. Given that the prevailing average market interest rate is 8% per year compounded monthly, compute the present value of this financial asset. (note: round your answer to the nearest cent and do not include spaces, currency signs, or commas)
Answer: $93,088
Explanation:
Rate is compounded monthly which makes it:
= 8% / 12
= 0.6667%
= 0.006667
The payment of $20,156 is to increase yearly at a rate of 5%. Payments are at the beginning of the period so the first payment does not have to be discounted.
[tex]= 20,156 + \frac{20,156 * 1.04}{(1 + 0.006667)^{12} } + \frac{20,156 * 1.04^{2} }{(1 + 0.006667)^{24} } + \frac{20,156 * 1.04^{3} }{(1 + 0.006667)^{36} } + \frac{20,156 * 1.04^{4} }{(1 + 0.006667)^{48} }\\\\= 20,156 + 19,355.65 + 18,587.08 + 17,849.02 + 17,140.27\\\\= 93,088.02[/tex]
= $93,088
When you retire 35 years from now, you want to have $1.25 million. You think you can earn an average of 13.5 percent on your investments. To meet your goal, you are trying to decide whether to deposit a lump sum today, or to wait and deposit a lump sum 2 years from today. How much more will you have to deposit as a lump sum if you wait for 2 years before making the deposit
Answer:
$19,144.61
Explanation:
The first step would be to determine the present value of $1.25 million. After, the future value of that amount in 2 years has to be calculated
The formula for calculating future value:
P = FV / (1 + r)^n
FV = Future value
P = Present value
R = interest rate
N = number of years
$1.25 million / (1.135)^35 = $14,861.23
Now we find the future value using this formula :
FV = P (1 + r)^n
$14,861.23 x (1.135)^2 = $19,144.61
Sagon Corporation has provided data concerning the Corporation's Manufacturing Overhead account for the month of September. Prior to the closing of the overapplied or underapplied balance to Cost of Goods Sold, the total of the debits to the Manufacturing Overhead account was $97,000 and the total of the credits to the account was $67,000. Which of the following statements is true?
A. Manufacturing overhead transferred from Finished Goods to Cost of Goods Sold during the month was $75,000.
B. Actual manufacturing overhead incurred during the month was $56,000.
C. Manufacturing overhead applied to Work in Process for the month was $75,000.
D. Manufacturing overhead for the month was underapplied by $19,000.
Answer:
Manufacturing overhead for the month was underapplied by $30,000.
Explanation:
Since it is given that
The debit to the manufacturing overhead is $97,000
And, the total credit is $67,000
So, the remaining amount would be
= $97,000 - $67,000
= $30,000
This $30,000 represent the underapplied overhead
This is the correct answer but the same is not provided in the given options
On January 1, 2021, Tiny Tim Industries had outstanding $1,000,000 of 12% bonds with a book value of $967,000. The indenture specified a call price of $983,500. The bonds were issued previously at a price to yield 14% and interest payable semi-annually on July 1 and January 1. Tiny Tim called the bonds (retired them) on July 1, 2021. What is the amount of the loss on early extinguishment
Answer:
$8,810
Explanation:
Calculation for What is the amount of the loss on early extinguishment
First step is to calculate the Call price of bond
Call price of bond=$967,000 + ($967,000*(14%/2)) - ($1,000,000*(12%/2))
Call price of bond= $967,000 + ($967,000*7%) - ($1,000,000*6%)
Call price of bond=$967,000+$67,690+$60,000
Call price of bond= $974,690
Now let calculate the Amount of loss on early extinguishment
Amount of loss on early extinguishment = $983,500 - $974,690
Amount of loss on early extinguishment = $8,810
Therefore Amount of loss on early extinguishment will be $8,810
Business Question! Just the first problem please, thank you
Answer:
34 coupons. $33.75Explanation:
The coupons are the interest payments the bond makes.
1. The bond has a term of 17 years and coupons are to be paid semi-annually.
This means that for every year, 2 coupon payments will be made.
In 17 years therefore:
= 17 * 2
= 34 coupons
2. The interest on this bond is 6.75% in a year. The coupon is however, semi-annual. Payment per coupon will therefore be half of the yearly rate:
= 6.75% * 1,000 * 1/2
= $33.75
Answer:
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What factors account for a fall in the long-run cost curve?
Makers Corp. had additions to retained earnings for the year just ended of $194,000. The firm paid out $184,000 in cash dividends, and it has ending total equity of $4.89 million. The company currently has 120,000 shares of common stock outstanding. a. What are earnings per share
Answer:
Makers Corp.
The Earnings Per Share are:
= $3.15.
Explanation:
a) Data and Calculations:
Additions to retained earnings for the year = $194,000
Cash dividends paid out = 184,000
Net income = $378,000
Total equity = $4.89 million
Outstanding shares = 120,000
Earnings per share = Net Income/Outstanding shares
= $378,000/120,000
= $3.15
b) The earnings per share (EPS) is a financial metric that is widely used to corporate value. It indicates the amount of money that a company makes for its stockholders per share. It is computed by dividing the net income by the number of outstanding shares.
The following trial balance was taken from the books of Sheridan Corporation on December 31, 2020.
Account Debit Credit
Cash $8,500
Accounts Receivable 40,700
Notes Receivable 11,200
Allowance for Doubtful Accounts $1,870
Inventory 35,300
Prepaid Insurance 4,720
Equipment 122,600
Accumulated Depreciation--Equip. 14,100
Accounts Payable 10,100
Common Stock 49,100
Retained Earnings 64,550
Sales Revenue 268,000
Cost of Goods Sold 123,900
Salaries and Wages Expense 48,600
Rent Expense 12,200
Totals $407,720 $407,720
At year end, the following items have not yet been recorded.
a. Insurance expired during the year, $2,000.
b. Estimated bad debts, 1% of gross sales.
c. Depreciation on furniture and equipment, 10% per year.
d. Interest at 6% is receivable on the note for one full year.
e. Rent paid in advance at December 31, $5,400 (originally charged to expense).
f. Accrued salaries at December 31, $5,800.
Required:
a. Prepare the necessary adjusting entries.
b. Prepare the necessary closing entries.
Answer:
Sheridan Corporation
a. Adjusting Journal Entries on December 31, 2020:
a. Debit Insurance Expense $2,000
Credit Prepaid Insurance $2,000
To record the insurance expense for the year.
b. Debit Bad Debts Expense $2,680
Credit Accounts Receivable $2,680
To record bad debts written off.
c. Debit Depreciation Expense - Equipment $12,260
Credit Accumulated Depreciation - Equipment $12,260
To record the depreciation expense for the year.
d. Debit Interest Receivable $672
Credit Interest Revenue $672
To record interest revenue receivable on the note.
e. Debit Rent Prepaid $5,400
Credit Rent Expense $5,400
To record rent prepaid, previously recorded as an expense.
f. Debit Salaries and Wages Expense $5,800
Credit Salaries Payable $5,800
To record accrued salaries.
b. Closing Journal Entries on December 31, 2020:
Debit Sales Revenue $268,000
Interest Revenue $672
Credit Income Summary $268,672
To close the revenue accounts to the income summary.
Debit Income Summary $202,040
Credit:
Cost of Goods Sold 123,900
Salaries and Wages Expense 54,400
Rent Expense 6,800
Bad debts Expense 2,680
Insurance Expense 2,000
Depreciation Expense 12,260
To close the expense accounts to the income summary.
Explanation:
a) Data and Calculations:
Sheridan Corporation
Unadjusted Trial Balance as of December 31, 2020:
Account Titles Debit Credit
Cash $8,500
Accounts Receivable 40,700
Notes Receivable 11,200
Allowance for Doubtful Accounts $1,870
Inventory 35,300
Prepaid Insurance 4,720
Equipment 122,600
Accumulated Depreciation--Equip. 14,100
Accounts Payable 10,100
Common Stock 49,100
Retained Earnings 64,550
Sales Revenue 268,000
Cost of Goods Sold 123,900
Salaries and Wages Expense 48,600
Rent Expense 12,200
Totals $407,720 $407,720
Adjustments:
a. Insurance Expense $2,000 Prepaid Insurance $2,000
b. Bad Debts Expense $2,680 Accounts Receivable $2,680 (1% of $268,000)
c. Depreciation Expense - Equipment $12,260 Accumulated Depreciation - Equipment $12,260 (10% of $122,600)
d. Interest Receivable $672 Interest Revenue $672 (6% of $11,200)
e. Rent Prepaid $5,400 Rent Expense $5,400
f. Salaries and Wages Expense $5,800 Salaries Payable $5,800
Sheridan Corporation
Adjusted Trial Balance as of December 31, 2020:
Account Titles Debit Credit
Cash $8,500
Accounts Receivable 38,020
Notes Receivable 11,200
Interest Receivable 672
Allowance for Doubtful Accounts $1,870
Inventory 35,300
Prepaid Insurance 2,720
Prepaid Rent 5,400
Equipment 122,600
Accumulated Depreciation--Equip. 26,360
Accounts Payable 10,100
Salaries Payable 5,800
Common Stock 49,100
Retained Earnings 64,550
Sales Revenue 268,000
Interest Revenue 672
Cost of Goods Sold 123,900
Salaries and Wages Expense 54,400
Rent Expense 6,800
Bad debts Expense 2,680
Insurance Expense 2,000
Depreciation Expense 12,260
Totals $426,452 $426,452
Trak Corporation incurred the following costs while manufacturing its bicycles. Bicycle components $100,000 Advertising expense $45,000 Depreciation on plant 60,000 Property taxes on plant 14,000 Property taxes on store 7,500 Delivery expense 21,000 Labor costs of assembly-line workers 110,000 Sales commissions 35,000 Factory supplies used 13,000 Salaries paid to sales clerks 50,000
Identify each of the above costs as direct materials, direct labor, manufacturing overhead, or period costs. Bicycle components select a classification Depreciation on plant select a classification Property taxes on store select a classification Labor costs of assembly-line workers select a classification Factory supplies used select a classification Advertising expense select a classification Property taxes on plant select a classification Delivery expense select a classification Sales commissions select a classification Salaries paid to sales clerks
Answer:
Bicycle components $100,000
Identification: Direct material
Advertising expense $45,000
Identification: Period cost
Depreciation on plant 60,000
Identification: Manufacturing overhead
Property taxes on plant 14,000
Identification: Manufacturing overhead
Property taxes on store 7,500
Identification: Period cost
Delivery expense 21,000
Identification: Period cost
Labor costs of assembly-line workers 110,000
Identification: Direct labor
Sales commissions 35,000
Identification: Period cost
Factory supplies used 13,000
Identification: Manufacturing overhead
Salaries paid to sales clerks 50,000
Identification: Period cost
Jose purchased a delivery van for his business through an online auction. His winning bid for the van was $25,250. In addition, Jose incurred the following expenses before using the van: shipping costs of $1,270; paint to match the other fleet vehicles at a cost of $1,440; registration costs of $2,970, which included $2,750 of sales tax and an annual registration fee of $220; wash and detailing for $121; and an engine tune-up for $327.
Required:
What is Joseâs cost basis for the delivery van?
Answer:
$30,710
Explanation:
Calculation for Jose cost basis for the delivery van
Van Winning bid $25,250
Add Shipping costs of $1,270
Add Paint to match the other fleet vehicles $1,440
Add Sales tax $2,750
Basis for the delivery van $30,710
($25,250 + $1,270 + $1,440 + $2,750 )
Therefore Jose cost basis for the delivery van was $30,710
This discussion has 2 parts:_______.
Part 1: Generate a list of all of the attributes that make you...you. Things that are essential to who you are, that influence your decisions, and your behaviors. These could also be personality traits or other influential items.
Part 2: Rank order these items in order of importance...so put a number 1 next to the most central or important item, number 2 next to the second most important etc... If you have a long list, only do the top 5.
Part 3 (o.k., I lied it's a 3 part question). Post your top 5 here and talk about how those five items influence the manner in which you communicate and engage with people. How do these influence and guide your daily behaviors?
Answer and Explanation:
The attributes that make me who I am, in order of importance and influence are:
1. Patience: Patience has enabled me to resolve a lot of calm in the most tense moments in my life, which allows me to go through my own challenges with less stress. It also allows me to have a better relationship with people, since relationships can be difficult at times.
2. Communication: I consider myself to be a communicative person, which has allowed me to express myself and remain honest with myself.
3. Family support: My family supports me a lot and this gives me the confidence to try to do what I want, to have a free mind, to experiment and not be afraid to let my true nature be expressed. This has made me a very brave person.
4. Thoughtful: Although I consider myself brave, I am afraid of causing bad results to me and the people around me, which makes me plan and think a lot before acting.
5. Kindness: I believe that I am very kind, which allows people to be comfortable with me and make me comfortable in their presence.
When a capital budgeting project generates a positive net present value, this means that the project earns a return higher than the
When a capital budgeting project generates a positive net present value, this means that the project earns a return higher than the internal rate of return.
For better understanding, lets explain what capital budgeting means
Capital Budgeting is simply known as the process of evaluating and selecting long-term investments that are always in line with an organisation's goal of maximizing owners' wealth. the four main administrative steps to the capital budgeting process includes idea generation , analyzing project proposals , create the firm-wide capital budget and monitoring decisions and conducting a post-auditfrom the above, we can therefore say that the answer When a capital budgeting project generates a positive net present value, this means that the project earns a return higher than the internal rate of return, is correct
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A consulting engineer has been engaged to advise a town how best to proceed with the construction of a 200,000 water supply reservoir. Since only 120,000 of storage will be required for the next 25 years, an alternative to building the full capacity now is to build the reservoir in two stages. Initially, the reservoir could be built with 120,000 of capacity and then, 25 years hence, the additional 80,000 of capacity could be added by increasing the height of the reservoir. Estimated costs are as follows construction cost, and annual maintenance cost, build in 2 stages first stage 120,000 reservoir $14'200,000 $75,000; second stage add 80,000 of capacity $120600,000 and $25,000 additional construction cost build in full capacity now 200,000 reservoir $22'400,000 and $100,000 if the interest is computed at 4%, which construction plan is preferred?
Answer:
Single stage construction
PW of Cost = $22,400,000 + 100,000(P/A, 4%, 25)
PW of Cost = $22,400,000 + 100,000(15.622)
PW of Cost = $22,400,000 + $1,562,200
PW of Cost = $23,962,200
Tow stage construction
PW of cots = $14,200,000 + $75,000(P/A, 4%, 25) + $12,600,000(P/F, 4%, 25)
PW of cost = $14,200,000 + $75,000(15.622) + $12,600,000(0.3751)
PW of cost = $14,200,000 + $1,171,650 + $4,726,260
PW of cost = $20,097,910
Conclusion: We should choose two stage construction as it has lesser Present worth of cost.
Here we preferred two stage construction as it has lesser Present worth of cost.
Calculation of the selection of the construction plan:For Single stage construction
PW of Cost = $22,400,000 + 100,000(P/A, 4%, 25)
= $22,400,000 + 100,000(15.622)
= $22,400,000 + $1,562,200
= $23,962,200
Now
For Tow stage construction
PW of cots = $14,200,000 + $75,000(P/A, 4%, 25) + $12,600,000(P/F, 4%, 25)
= $14,200,000 + $75,000(15.622) + $12,600,000(0.3751)
= $14,200,000 + $1,171,650 + $4,726,260
= $20,097,910
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In the Excel, or spreadsheet, approach to recording financial transactions, if manufacturing overhead is underapplied by X dollars, the Manufacturing Overhead account is closed out by deducting X dollars in the Manufacturing Overhead column and deducting X dollars in the Retained Earnings column.
a. True
b. False
Answer:
False.
Explanation:
To close the underapplied Manufacturing Overhead account requires that the Cost of Goods Sold is debited, say with $100 while the Manufacturing Overhead account is credited with the same amount. Underapplied Manufacturing Overhead account means that a debit balance is left after applying the overhead to production. To close this debit, therefore, a credit entry is required to the manufacturing overhead account. The corresponding debit entry goes to the Cost of Goods Sold, or this may be apportioned among Cost of Goods Sold, Finished Goods Inventory, and Work-in-Process, as may be the case.
Answer:
True.
Explanation:
Three categories of activities (operating, investing, and financing) generate or use the cash flow in a company. In the following table, identify which type of activity is described below.
a. Fitzi Chemical Co. earns revenue from its cash receipts from royalties.
b. The Yum chain of restaurants conducts an initial public offering to raise funds for expansion.
c. A company records a decrease in its total raw materials inventory from the previous year.
d. A pharmaceutical company buys marketing rights to sell a drug exclusively in East Asian markets.
Answer and Explanation:
The classifications are as follows:
a. Operating activities: As there is a cash receipts from royalities so the same come under this activity
b. Financing activities: As the funds are raised so the same would be come under this activity.
c. Operating activities: As there is a decrease in raw material inventory as compared to the last year so the same is come under this activity
d. Investing activities: As the marketing rights are purchased so the same would be come under this activity
Castle, Inc., has no debt outstanding and a total market value of $150,000. Earnings before interest and taxes, EBIT, are projected to be $28,000 if economic conditions are normal. If there is strong expansion in the economy, then EBIT will be 20 percent higher. If there is a recession, then EBIT will be 25 percent lower. The firm is considering a debt issue of $60,000 with an interest rate of 7 percent. The proceeds will be used to repurchase shares of stock. There are currently 10,000 shares outstanding. Ignore taxes for questions a and b. Assume the stock price remains constant.
Assume the firm has a tax rate of 35 percent.
c-1. Calculate return on equity (ROE) under each of the three economic scenarios before any debt is issued. (Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.)
ROE
Recession %
Normal %
Expansion %
c-2. Calculate the percentage changes in ROE when the economy expands or enters a recession. (A negative answer should be indicated by a minus sign. Do not round intermediate calculations. Enter your answers as a percent rounded to the nearest whole number, e.g., 32.)
% change in ROE
Recession %
Expansion %
c-3. Calculate the return on equity (ROE) under each of the three economic scenarios assuming the firm goes through with the recapitalization. (Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.)
ROE
Recession %
Normal %
Expansion %
c-4. Given the recapitalization, calculate the percentage changes in ROE when the economy expands or enters a recession.(A negative answer should be indicated by a minus sign. Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.)
% change in ROE
Recession %
Expansion %
Answer:
c-1. ROE under Recession = 8.34%; ROE under Normal = 10.82%; and ROE under Expansion = 12.71%.
c-2. % change in ROE under Recession = -22.91%; and % change in ROE under Expansion = 17.46%.
c-3. ROE under Recession = 10.82%; ROE under Normal = 14.67%; and ROE under Expansion = 17.51%.
c-4. % change in ROE under Recession = -26.23%; and % change in ROE under Expansion = 19.41%
Explanation:
c-1. Calculate return on equity (ROE) under each of the three economic scenarios before any debt is issued. (Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.)
Note: See part 1 of the attached excel file for the calculations of Net Income, Shareholders' Equity, and return on equity (ROE) under each of the three economic scenarios before any debt is issued.
In the attached excel file, return on equity (ROE) is calculated using the following formula:
ROE = (Net income / Shareholders' Equity) * 100
After applying the ROE formula, the following are then obtained:
ROE under Recession = 8.34%
ROE under Normal = 10.82%
ROE under Expansion = 12.71%
c-2. Calculate the percentage changes in ROE when the economy expands or enters a recession. (A negative answer should be indicated by a minus sign. Do not round intermediate calculations. Enter your answers as a percent rounded to the nearest whole number, e.g., 32.)
Note: See part 1 of the attached excel file for the calculations of the percentage changes in ROE when the economy expands or enters a recession.
In the attached excel file, percentage changes in ROE is calculated as follows:
Percentage change in ROE = (ROE under recession/expansion - ROE under Normal) / ROE under Normal
After applying the Percentage change in ROE formula, the following are then obtained:
% change in ROE under Recession = -22.91%
% change in ROE under Expansion = 17.46%
c-3. Calculate the return on equity (ROE) under each of the three economic scenarios assuming the firm goes through with the recapitalization. (Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.)
Note: See part 2 of the attached excel file for the calculations of Net Income, Shareholders' Equity, and return on equity (ROE) under each of the three economic scenarios assuming the firm goes through with the recapitalization.
In the attached excel file, return on equity (ROE) is calculated using the following formula:
ROE = (Net income / Shareholders' Equity) * 100
After applying the ROE formula, the following are then obtained:
ROE under Recession = 10.82%
ROE under Normal = 14.67%
ROE under Expansion = 17.51%
c-4. Given the recapitalization, calculate the percentage changes in ROE when the economy expands or enters a recession.(A negative answer should be indicated by a minus sign. Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.)
Note: See part 2 of the attached excel file for the calculations of the percentage changes in ROE when the economy expands or enters a recession.
In the attached excel file, percentage changes in ROE is calculated as follows:
Percentage change in ROE = (ROE under recession/expansion - ROE under Normal) / ROE under Normal
After applying the Percentage change in ROE formula, the following are then obtained:
% change in ROE under Recession = -26.23%
% change in ROE under Expansion = 19.41%
what is the most important law after starting a business
If the mean of three observations x + 2, x + 4, and x + 6 is 15, then x is equal to
a) 12
(b) 13
(c) 15
(d) 11
Answer:
x+2+x+4+x+6/3=15
3x+12=15x3
3x+12=45
3x=45-12
3x=33
x=33/3
x=11
hope it helps u
Answer:
D
Explanation
3x+12 divided by 3 multiple by 15
The trial balance for Lindor Corporation, a manufacturing company, for the year ended December 31, 2016, included the following income accounts: Account Title Debits Credits Sales revenue 2,300,000 Cost of goods sold 1,400,000 Selling and administrative expenses 420,000 Interest expense 40,000 Unrealized holding gains on investment securities 80,000 The trial balance does not include the accrual for income taxes. Lindor's income tax rate is 30%. One million shares of common stock were outstanding throughout 2016. Required: Prepare a single, continuous multiple-step statement of comprehensive income for 2016, including appropriate EPS disclosures.
Answer:
Net income $302,000
Comprehensive Income $382,000
Earnings Per Share 0.30
Explanation:
Preparation of a single, continuous multiple-step statement of comprehensive income for 2016, including appropriate EPS disclosures.
Lindor Corporation Statement of Comprehensive Income for 2016
Sales revenue $2,300,000
Less Cost of goods sold $1,400,000
Gross profit 900,000
($2,300,000-$1,400,000)
Less Operating expenses:
Selling and administrative expenses ($420,000)
Operating income $480,000
($900,00-$420,000)
Less other expenses:
Interest expense ($40,000)
Income before tax Expenses $440,000
($480,000-$40,000)
Income tax Expenses $132,000
(30%*$440,000)
Net income $302,000
($440,000-$132,000)
Other comprehensive income:
Add Unrealized holding gain on investment securities,net of tax $80,000
Comprehensive Income $382,000
($302,000+$80,000)
Earnings Per Share:
Net Income
(302,000 / 1,000,000) 0.30
Therefore Lindor Corporation single, continuous multiple-step statement of comprehensive income for 2016, including appropriate EPS
disclosures will be :
Net income $302,000
Comprehensive Income $382,000
Earnings Per Share 0.30
A point of beginning refers to
Steinberg Company produces commercial printers. One is the regular model, a basic model that is designed to copy and print in black and white. Another model, the deluxe model, is a color printer-scanner-copier. For the coming year, Steinberg expects to sell 100,000 regular models and 20,000 deluxe models. A segmented income statement for the two products is as follows:
Regular Model Deluxe Model Total
Sales $12,000,000 $10,720,000 $22,720,000
Less: Variable costs 7,200,000 6,432,000 13,632,000
Contribution margin $4,800,000 $4,288,000 $9,088,000
Less: Direct fixed costs 1,200,000 960,000 2,160,000
Segment margin $3,600,000 $3,328,000 $6,928,000
Less: Common fixed costs 1,702,400
Operating income $5,225,600
Required:
a. Compute the number of regular models and deluxe models that must be sold to break even.
b. Using information only from the total column of the income statement, compute the sales revenue that must be generated for the company to break even.
Answer:
Results are below.
Explanation:
First, we need to calculate the sales proportion of each product:
Regular= 12,000,000/22,720,000= 0.53
Deluxe= 10,720,000/22,720,000= 0.47
Now, we will determine the break-even point for the company as a whole:
Break-even point (units)= Total fixed costs / Weighted average contribution margin
Total fixed costs= 2,160,000 + 1,702,400= $3,862,400
Unitary contribution margin:
Regular= 4,800,000/100,000= $48
Delux= 4,288,000/20,000= $214.4
Weighted average contribution margin= (0.53*48) + (0.47*214.4)
Weighted average contribution margin= $128.35
Break-even point (units)= 3,862,400/128.35
Break-even point (units)= 30,093
For each product:
Regular= 0.53*30,093= 15,949
Deluxe= 0.47*30,093= 14,144
Finally, we need to calculate the break-even point in dollars for the whole company:
Break-even point (dollars)= fixed costs/ contribution margin ratio
Break-even point (dollars)= 3,862,400/ (9,088,000/22,720,000)
Break-even point (dollars)= 3,862,400/0.4
Break-even point (dollars)= $9,206,000
Filer Manufacturing has 9 million shares of common stock outstanding. The current share price is $88, and the book value per share is $7. The company also has two bond issues outstanding. The first bond issue has a face value $80 million, a coupon of 5 percent, and sells for 98 percent of par. The second issue has a face value of $55 million, a coupon of 6 percent, and sells for 106 percent of par. The first issue matures in 20 years, the second in 8 years.
a. What are the company's capital structure weights on a book value basis? (Do not round intermediate calculations and round your answers to 4 decimal places, e.g., 32.1616.) Equity / Value Debt / Value
b. What are the company's capital structure weights on a market value basis? (Do not round intermediate calculations and round your answers to 4 decimal places, e.g., 32.1616.) Equity / Value Debt / Value
c. Which are more relevant? Market value weights or Book value weights
Answer:
a. Book Value of Common Stock = [9,000,000 shares * $7.00 per share] = $63,000,000
Book Value of Debt = [$80,000,000 + $55,000,000] = $135,000,000
Total Book Value = $63,000,000 + $135,000,000 = $198,000,000
Capital structure weights of Common Stock = [$63,000,000 / $198,000,000] = 0.3182
Capital structure weights of Debt = [$135,000,000 / $198,000,000] = 0.6818
b. Market Value of Common Stock = [9,000,000 shares x $88 per share] = $792,000,000
Market Value of Debt = [($80,000,000 x 98%) + ($55,000,000 x 106%)] = $136,700,000
Total Market Value = $792,000,000 + $136,700,000 = $928,700,000
Capital structure weights of Common Stock = [$792,000,000 / $928,700,000] = 0.8528
Capital structure weights of Debt = [$136,700,000 / $928,700,000] = 0.1472
c. Market values/weigh are always preferred because they reflect the current scenario.
