Answer:
the direct material used is $122,000
Explanation:
The computation of the direct material used is shown below:
= Opening raw material inventory + material purchased - ending raw material inventory
= $6,000 + $123,500 - $7,500
= $122,000
Hence, the direct material used is $122,000
The Case: The hairdressing industry in Pakistan is flourishing day by day. There are certainly lots of hairdressers and each of the hairdressers has a slightly different type of skill. Some salons only cut, some only provide color services, some only do natural hair, some do all types, etc. Also, they have different premises situated in a different location where they provide the services. The prices offered by the hairdresser depend on the services offered by them and its uniqueness. If the particular hairdresser is known for providing the best services in the particular market then he can increase the prices of his services as he knows that consumers can pay slightly more amount of money for his superior services. There is relatively a low barrier for entry and exit for setting up a new hairdresser shop. Requirement: Read the above scenario and explain in which market structure ‘the hairdressing industry’ falls and how?
Answer:
The Hairdressing Industry in Pakistan
The market structure of "the hairdressing industry" falls under Monopolistic Competition. The features of this market structure include: many hairdresser shops, low barriers for entry and exit for setting up a new hairdresser shop, the hairdressing services are not perfect substitutes, and the pricing decisions of any one shop do not impact others.
Explanation:
In a monopolistic competition, each firm is differentiated from others by distinct goods and services. This situation is enhanced in a services industry, where different skills are employed to further differentiate each firm's services from the others. While the products and services may look similar, one cannot actually substitute one for the other. Therefore, each firm can charge different prices for their distinct products and services without being influenced by the other firms, unless through a cartel arrangement.
Osborn Manufacturing uses a predetermined overhead rate of $ 19.70 per direct labor- hour. This predetermined rate was based on a cost formula that estimates $265,950 of total manufacturing overhead for an estimated activity level of 13,500 direct labor-hours. The company actually incurred $260,000 of manufacturing overhead and 13,000 direct labor-hours during the period.
Required:
1. Determine the amount of underapplied or overapplied manufacturing overhead for the period.
2. Assume that the company's underapplied or overapplied overhead is closed to Cost of Goods Sold. Would the journal entry to dispose of the underapplied or overhead increase or decrease the company's gross margin? By how much?
Answer:
1. $3,900
2. $3900
Explanation:
Required:
1. Calculation to Determine the amount of underapplied or overapplied manufacturing overhead for the period.
Applied overhead = 19.70*13,000
Applied overhead = 256,100
manufacturing overhead = 260,000-256,100
manufacturing overhead= underapplied by $3,900
2. Assume that the company's underapplied or overapplied overhead is closed to Cost of Goods Sold. Would the journal entry to dispose of the underapplied or overhead increase or decrease the company's gross margin? By how much
The gross margin would decrease by the amount of $3900
Splish Brothers, Inc. On December 31, 2017, Splish Brothers, Inc. has $1,760,000 of short-term debt in the form of notes payable to Michaels State Bank due February 5, 2018. On January 28, 2018, Splish Brothers issued 17,600 shares of common stock at $75 per share. Splish Brothers used the proceeds of $1,320,000 from the stock issuance, along with $572,000 in cash to retire the short-term debt and associated accrued interest on February 5, 2018. Splish Brothers will issue its December 31, 2017 financial statements on February 25, 2018.
Marigold Corp. On December 31, 2017, Marigold Corp. has $2.640,000 of short-term notes payable to Indiana Bank & Trust. The notes are due on January 31, 2018. Marigold retired the notes, along with $176,000 in accrued interest, in full on January 31, 2018. On February 11, 2018, Marigold obtained $3,960,000 in long-term financing from Terre Haute Bank & Trust. The new debt bears interest at 5 percent, with interest payments due annually. Marigold will issue its December 31, 2017 financial statements on February 28, 2018.
Prepare partial balance sheets for Splish Brothers, Inc. and Marigold Corp. at December 31, 2017, showing how both companies' short-term debt should be presented. (Enter account name only and do not provide descriptive information.)
Answer:
Splish Brothers, Inc
Note payable $1,760,000
Marigold Corp
Note payable $2,640,000
Explanation:
Prepare partial balance sheets for Splish Brothers, Inc. and Marigold Corp. at December 31, 2017,
Preparation of partial balance sheets for Splish Brothers, Inc at December 31, 2017,
Equity and Liabilities
Short term debt
Note payable $1,760,000
Preparation of partial balance sheets for Marigold Corp. at December 31, 2017,
Equity and Liabilities
Short term debt
Note payable $2,640,000
Games Galore Corporation hires Amanda, a minor, to create new customized game software for certain clients. Amanda signs a contract that requires her to work for Games Galore for eighteen months. Before beginning work, however, Amanda tells Games Galore that she will not create new software for Games Galore and that she is going to work for Ideal Worldcraft, Inc., a Games Galore competitor. Answer the following questions, providing the reasoning/analysis behind your conclusions, i.e. list the applicable rule/law, and apply the facts to the rule to reach a conclusion. You can also argue in the alternative.
(a) Is Games Galore’s contract with Amanda enforceable?
(b) Why or why not?
Answer and Explanation:
According to the question the contract is valid but the same would not be enforceable as Amanda is a minor. As a minor her consent is not valid completely but if there is any violation on Games Galore so the same would be penalized that results the contract to be enforceable. For minors, the guardian is necessary
So being a minor the contract would not be enforceable although she accepts the terms and condition of 18 months
A group of middle school students wants to raise money to help build a new school track. They decided to sell donuts before school. Demand is 275 donuts when the donuts are given away free, and the demand drops to 175 donuts when the price is 25 cents per donut. However, the middle school administration is prepared to supply only 150 donuts free of charge but will supply 200 donuts when the price is 50 cents per donut. Assume that the demand and supply functions are both linear functions. What price should the students charge per donut so that there is neither a surplus nor a shortage of donuts
Answer:
25 cent/donuts
Explanation:
Demand function have these two points (275, 0), (175, 25)
Demand function equation:
y - 25 = [tex]\frac{25 - 0}{175-275}[/tex] (x-175)
-100y + 2500 = (x - 175)
-4y + 100 = x - 175
x + 4y = 100 + 175
x + 4y = 275....................equ 1
Similarly Supply function have these point (150,0), (200, 50)
Supply function equation:
y - 50 = [tex]\frac{50 - 0}{200-150}[/tex](x- 200)
50y - 2500 = x - 200
y - 50 = x - 200
x - y = 200 - 150
x - y = 150
By equation 1 & 2
x + 4y = 275
x - y = 150 ==> x = 150+y
So from equ 1 => x + 4y = 275
=> 150+y+4y = 275
=> 150+5y = 275
=> 5y = 275 - 150
=> 5y = 125
=> y = 25
So, the price that the students should charge per donut so that there is neither a surplus nor a shortage of donuts is 25 cent/donuts
Match each of the follwoing terms with their descriptions Total Liabilities.
a. refers to the difference in the value of the firm's assets and liabilities (what the firm owns)
b. Short and long term interest bearing accounts (Notes Payable + Long term debt in this class)
c. represent resources used by the firm and the sum of shareholders' equity and total liabilities (what the firm has)
d. represent the total amount owed to creditors (what the firm owes)
1. Total Liabilities
2. Total Shareholders' Equity
3. Total Assets
4. Total Debt
Answer and Explanation:
The matching is as follows:
a. 2. Shareholder equity as it shows the difference between the assets and liabilities of the firm
b. 4. Total debt it represent the short and long term interest i.e. note payable + long term debt etc
c. 3. Total assets it is a sum of shareholder equity and the total liabilities
d.1. Total liabilities it shows the obligations or the amount owed to creditors
Vanessa Kaiser and Mariah Newman decide to form a partnership by combining the assets of their separate businesses. Kaiser contributes the following assets to the partnership: cash, $25,800; accounts receivable with a face amount of $187,600 and an allowance for doubtful accounts of $5,400; merchandise inventory with a cost of $118,900; and equipment with a cost of $175,800 and accumulated depreciation of $58,200. The partners agree that $6,000 of the accounts receivable are completely worthless and are not to be accepted by the partnership, that $5,700 is = reasonable allowance for the uncollectibility of the remaining accounts, that the merchandise inventory is to be recorded at the current market price $131,400, and that the equipment is to be valued at $104,900.
Required:
Journalize the partnership's entry to record Kaiser's investment.
Answer:
Date Accounts title and Explanation Debit Credit
Cash $25,800
Account receivables(187,600-6,000) $182,200
Merchandise Inventory $118,900
Equipment $104,900
Allowance for Doubtful Accounts $5,700
Kaiser, Capital $426,100
(To record Kaiser Investment in Partnership Entity)
3. Curve Number and SCS Travel Time Assignment (2 pts) You need to calculate the curve number for a site which is composed of: 25 acres industrial buildings, 125 acres 1 acre lots, 60 acres parks/open space with good cover, 40 acres of commercial development, and 225 acres of meadows. The soil was determined to be 50% Sand, 25 % Silt and 25% Clay. a. Determine the Soils Type b. Determine Curve Number for AMC III.
Solution :
It is given that the soil consists of :
Sand -- 50 %
Silt -- 25 %
Clay -- 25 %
Clay is present in the soil and so it has a very slow infiltration rates when the soil is thoroughly wetted.
a). Therefore the type of soil bis HSG Group D.
b). It is give that :
Industrial building is 25 acres, i.e.
CN = 93
adjusted CN = 93 x 1 = 93
I acre lots is 125 acres, i.e.
CN = 84
Adjusted CN = 84 x 1.07 = 89.88
= 90 (approx.)
60 acres of open or park space, i.e.
CN = 80
Adjusted CN = 80 x 1.14 = 91.2
= 91 (approx.)
225 acres of the meadows
CN = 78
Adjusted CN = 78 x 1.14 = 88.92
= 89 (approx.)
Commercial development of 40 acres, i.e.
CN = 95
Adjusted CN = 95 x 1 = 95
Therefore the curve number is given by :
[tex]$=\frac{(25 \times 93)+(125 \times 90)+(60 \times 91)+(40 \times 95)+(225 \times 78)}{25+125+60+40+225}$[/tex]
[tex]$= 85.02$[/tex]
[tex]$\sim 85$[/tex]
Thus, the curve number for the site for AMC III = 85
Answer:
It is given that the soil consists of :
Sand -- 50 %
Silt -- 25 %
Clay -- 25 %
Clay is present in the soil and so it has a very slow infiltration rates when the soil is thoroughly wetted.
a). Therefore the type of soil bis HSG Group D.
b). It is give that :
Industrial building is 25 acres, i.e.
CN = 93
adjusted CN = 93 x 1 = 93
I acre lots is 125 acres, i.e.
CN = 84
Adjusted CN = 84 x 1.07 = 89.88
= 90 (approx.)
60 acres of open or park space, i.e.
CN = 80
Adjusted CN = 80 x 1.14 = 91.2
= 91 (approx.)
225 acres of the meadows
CN = 78
Adjusted CN = 78 x 1.14 = 88.92
= 89 (approx.)
Commercial development of 40 acres, i.e.
CN = 95
Adjusted CN = 95 x 1 = 95
Therefore the curve number is given by :
Thus, the curve number for the site for AMC III = 85
Explanation:
Dave M. Company issues 500 shares of $10 par value Common Stock and 100 shares of $40 par value Preferred Stock as a basket for a lump sum of $105,000. Total transaction costs paid to complete the sale was $5,000. Common Stock of the company was selling for $198 per share in the market that day and Preferred Stock was selling for $110 per share in the market that day.
Required:
a. Prepare a table showing how the sale price is allocated between the Common Stock and the Preferred Stock.
b. Prepare the journal entry to record the basket sale of the two stocks.
Answer:
a.
Allocation
Common Stock $94,500
Preferred Stock $10,500
b.
Journal Entry
Cash _____________________________$105,000
Common stock _____________________ $5000
Paid-in capital in excess of par - Common _$89,500
Preferred stock _____________________$4,000
Paid-in capital in excess of par - Preferred _$6,500
Explanation:
a.
First, we need to calculate the Market value of both stock using the foloowinf formula
Market value = Numbers of shares x Market value per share
Market value of common stock = 500 x $198 = $99,000
Market value of preferred stock = 100 x $110 = $11,000
Total value = $99,000 + $11,000 = $110,000
Now calculate the weight of each sock
Weight of common stock $99,000 / $110,000 = 0.90
Weight of preferred stock = $11,000 / $110,000 = 0.10
Allocation of the sale price is as follow
Allocated sale price = Weight of Stock x Sale price
Allocated sale price of common stock = $105,000 x 0.90 = $94,500
Allocated sale price of common stock = $105,000 x 0.10 = $10,500
b.
Common Sock is recorded separately as par value and paid-in capital excess of par as follow
Common Stock ( Par Value ) = 500 x $10 = $5,000
Common Stock ( Excess of Par ) = $94,500 - $5,000 = $89,500
Preferred Stock ( Par Value ) = 100 x $40 = $4,000
Preferred Stock ( Excess of Par ) = $10,500 - $4,000 = $6,500
A corporation borrowed money from a bank to build a building. The long-term note signed by the corporation is secured by a mortgage that pledges title to the building as security for the loan. The corporation is to pay the bank $80,000 each year for 10 years to repay the loan. Which of the following relationships can you expect to apply to the situation?
a. The entire balance of mortgage payable at a given balance sheet date will be reported as a long-term liability.
b. The portion of the annual payment applied to the loan principal will decrease each period.
c. The balance of mortgage payable will decrease each period the loan is outstanding.
d. The amount of annual interest expense will increase over the 10-year period.
Answer:
c. The balance of mortgage payable will decrease each period the loan is outstanding.
Explanation:
Since in the question it is mentioned that the coporation has to pay the amount of $80,000 to bank for 10 years in order to reply the loan so according to the given options the option c should be selected as the part of the annual payment would be considered to the loan principal amount this increase for each and every period but at the same time the interest expense amount would be reduced in each and every period at the time when loan become outstanding
The Converting Department of Worley Company had 2,400 units in work in process at the beginning of the period, which were 35% complete. During the period, 10,800 units were completed and transferred to the Packing Department. There were 1,900 units in process at the end of the period, which were 60% complete. Direct materials are placed into the process at the beginning of production.
Required:
Determine the number of equivalent units of production with respect to direct materials and conversion costs.
Answer: See explanation
Explanation:
Based on that attachment given, we should note that the following was gotten as:
1. Inventory in process beginning:
This was gotten as:
= 2,400 × 65%
= 2400 × 0.65
= 1,560
Started and completed:
= 10,800 - 2,400
= 8,400
Inventory in process ending
= 1,900 × 60%
= 1900 × 0.6
= 1,140
2. What are the advantages/disadvantages of being right-brain thinker in terms of the
capabilities?
Answer:
The answer is below
Explanation:
Advantages of being a right thinker in terms of the capabilities are:
Such person possesses these abilities:
1. creativity
2. free-thinking ability
3. ability to see the big picture
4. spontaneous ability
5. inclined to visualize the situation.
Disadvantages may include the following
1. Not strong in the area of analytical thinking;
2. Les logical evaluation;
3. less detail- and fact-oriented
numerical
A company produces and sells hair dryers in a market where price (p) and demand (D) are related follows: p = $35+ (3,000)/D-(4,800)/D2 The fixed cost (Ct) is $800 per month and the variable cost per hair dryer (c.) is $38. - Add to % E Q
With reference to the company in Question 1, assume price and demand are unrelated. The company sells the hair dryers for $80 each if they spend $8,000 per month on advertising (C.). CF and c, remain as indicated in Question 1. The maximum production capacity is 5,000 hair dryers per month.
a) What is the demand breakeven point?
b) Is the company's demand breakeven point (in %) more sensitive to 10% increase in sales price or 20% reduction in variable costs? Explain your answer.
Answer:
Explanation:
Given that:
[tex]p = 35 + \dfrac{3000}{D}- \dfrac{4800}{D^2}[/tex]
The total revenue = p × D
∴
multiplying both sides by D; we have:
[tex]p\times D = 35 \times D + \dfrac{3000}{D} \times D- \dfrac{4800}{D^2}\times D[/tex]
[tex]= 35 D +3000}{D} - \dfrac{4800}{D}[/tex]
The total cost = (Per unit Variable cost × D) + Advertising cost
The total cost = 38D + 8000
The selling price = 80
From D units, the total revenue = 80D
∴
The break-even will take place when total revenue equals total cost.
So;
8000 + 38D = 80D
8000 = 80 D - 38D
8000 =42D
D = 8000/42
D = 190.48
(b)
Suppose the new sales price
Then;
8000 + 38D = 88D
8000 = 88D - 38D
8000 = 50D
D = 160
Hence, the break-even decreases by:
[tex]\Big(\dfrac{190.48-160}{190.48}\times 100\Big) = 16\%[/tex]
However; suppose the variable cost = 30.4
Then;
8000 + 30.4D = 80D
8000 = 80D - 30.4D
8000 = 49.6D
D = 8000/49.6
D = 161.29
Therefore;
This implies that the break-even decreased by:
[tex]\Big(\dfrac{190.48-161.29}{190.48}\times 100\Big) = 15.32\%[/tex]
Hence, the break-even is more likely to change by 10% in its selling price.
How can lean operations be applied in the service industry?
Answer:
GG kid
Explanation:
i dont know
George secured an adjustable-rate mortgage (ARM) loan to help finance the purchase of his home 5 years ago. The amount of the loan was $350,000 for a term of 30 years, with interest at the rate of 9%/year compounded monthly. Currently, the interest rate for his ARM is 3.5%/year compounded monthly, and George's monthly payments are due to be reset. What will be the new monthly payment
Answer:
$1,680
Explanation:
during the first 5 years, the monthly payment will = $2,816.18
I prepared an amortization schedule. After the 60th payment, the principal owed = $335,580
the new monthly payment considering that the interest rate fell significantly to 3.5% = $1,680
calculation to determine the monthly payment:
present value of the loan = monthly payment x PVIFA
monthly payment = present value / PVIFA
PVIFA, 0.29167%, 300 periods = 199.7501
monthly payment = $335,580 / 199.7501 = $1,680
Quality improvement, relevant costs, relevant revenues. SpeedPrint manufactures and sells 18,000 high-technology printing presses each year. The variable and fixed costs of rework and repair are as follows:
Variable Cost Fixed Cost Total Cost
Rework Cost per hr. $79 $115 $194
Repair Cost
Customer Support cost/hr. 35 55 90
Transportation Cost/load 350 115 465
Warranty repair cost/hour 89 150 239
Speed Print’s current presses have a quality problem that causes variations in the shade of some colors. Its engineers suggest changing a key component in each press. The new component will cost $70 more than the old one. In the next year, however, Speed Print expects that with the new component it will
(1) save 14,000 hours of rework,
(2) save 850 hours of customer support,
(3) move 225 fewer loads,
(4) save 8,000 hours of warranty repairs, and
(5) sell an additional 140 printing presses, for a total contribution margin of $1,680,000. SpeedPrint believes that even as it improves quality, it will not be able to save any of the fixed costs of rework or repair. SpeedPrint uses a 1-year time horizon for this decision because it plans to introduce a new press at the end of the year.
1. Should SpeedPrint change to the new component? Show your calculations.
2. Suppose the estimate of 140 additional printing presses sold is uncertain. What is the minimum number of additional printing presses that SpeedPrint needs to sell to justify adopting the new component?
3. What other factors should managers at SpeedPrint consider when making their decision about changing to a new component?
Answer:
1. Speed print SHOULD CHANGE to the new component
2. Since the new components incremental cost of the amount of $1,260,000 is lesser than the incremental savings of the amount of $1,926,500 which means that it will be of benefit if SpeedPrint invest in the new component.
3. Nonfinancial factors
Explanation:
1. Calculation to show whether Speed print
should change to the new component
First step is to calculate the Relevant costs
Relevant costs = $70 *18,000 copiers
Relevant costs= $1,260,000
Second step is to calculate Relevant Benefits
RELEVANT BENEFITS
Savings in rework costs $1,106,000
($79 *14,000 hours)
Add Savings in customer-support costs $29,750
($35 *850 hours)
Add Savings in transportation costs for parts $78,750
($350 *225 fewer loads)
Add Savings in warranty repair costs $712,000
($89 *8,000 repair-hours)
Add Contribution margin from increased sales $1,680,000
Cost savings and additional contribution margin $3,606,500
($1,106,000+$29,750+$78,750+$712,000+$1,680,000)
Based on the above calculation relevant benefits of the amount of $3,606,500 is higher than the relevant costs of the amount of $1,260,000 which means that Speed print
SHOULD CHANGE to the new component.
2. Based on the above calculation it shows that the new components incremental cost of the amount of $1,260,000 is lesser than the incremental savings of the amount of $1,926,500 which means that it will be of benefit if SpeedPrint invest in the new component.
Calculation for INCREMENTAL SAVINGS
Savings in rework costs $1,106,000
($79 *14,000 rework hours)
Add Savings in customer-support costs $29,750
($35 *850 customer-support hours)
Add Savings in transportation costs for parts $78,750
($350 *225 fewer loads)
Add Savings in warranty repair costs $712,000
($89 *8,000 repair-hours)
Incremental savings $1,926,500
($1,106,000 + $29,750 + $78,750 + $712,000)
3. The factors that the managers at SpeedPrint should consider when making their decision about changing to a new component will be NON-FINANCIAL FACTORS.
During fiscal year 2019, Magic Kingdom had sales of $2 million. Its cost of goods sold, selling and general administrative expenses, and depreciation were $1.2 million, $.5 million and $.9 million, respectively. Its 7% semiannual coupon bonds will mature in 10 years, and there is no other debt. The tax rate is 21%, and tax losses cannot be carried forward or back. What is the operating cash flow for Magic Kingdom in fiscal year 2019?
Answer:
$300,000
Explanation:
The computation of the operating cash flow is shown below:
But before that EBIT should be determined
Sales $ 2,000,000.00
Less : Cost of Goods Sold $1,200,000.00
Gross Profit $800,000.00
Less: selling and general administrative expenses $500,000.00
Less: Depreciation expense $900,000.00
EBIT i.e. Operating Income/(Loss) $(600,000.00)
Tax at 21% $(126,000.00)
Since it is negative so the tax loss would not be determined
Now Operating Cash flow
= EBIT × (1 -T) + Depreciation expense - Chane in Working Capital
= EBIT + Depreciation expense
= -$600,000 + $900,000
= $300,000
Mobo, a wireless phone carrier, completed its first year of operations on October 31. All of the year's entries have been recorded, except for the following: At year-end, employees earned wages of $6,800, which will be paid on the next payroll date, November 6. At year-end, the company had earned interest revenue of $3,800. It will be collected December 1. Required: What is the annual reporting period for this company
Answer:
Explanation:
Missing word "2. Identify whether each required adjustment is a deferral or an accrual. First transaction is deferral O Second transaction is deferral Second transaction is accrual Both transactions are deferral O Both transactions are accruals First transaction is accrual 3. Show the accounting equation effects of each required adjustment. (Enter any decreases to Assets, Liabilities, or Stockholders' Equity with a minus sign.) Transaction Assets Liabilities + Stockholders' Equity b. 4. Why are these adjustments needed? Adjustments are needed to ensure the financial statements are up-to-date and complete Adjustments are needed to ensure the financial statements are prepared as per cash basis."
1. The annual reporting period for this company is November 1 through October 31
2. Both the transactions are accruals.
3. S/n Assets = Liabilities + Stockholders equity
a. No effects S&Wages payable $6,800 S&Wages Expenses -$6,800
b. I. receivable(3,800) No effect Interest revenue $3,800
4. Adjustments are required to ensure that the financial statements are up-to-date and complete.
if you were living in a world without a financial system ,how would you make provisions towards your retirement.
The following transactions apply to Pecan Co. for 2018, its first year of operations:1. Received $100,000 cash in exchange for issuance of common stock.2. Secured a $300,000 five-year installment loan from State Bank. The interest rate is 5 percent and annual payments are $69,292.3. Purchased land for $100,0004. Provided services for $260,000.5. Paid other operating expenses of $150,000.6. Paid the annual payment on the loan. Round answers to nearest whole dollar.Required:a. Organize the transaction data in accounts under an accounting equation.b. Prepare an income statement and balance sheet for 2018.c. What is the interest expense for 2019? 2020?
Answer:
Pecan Co.
a. Accounting equation: Assets = Liabilities + Equity
Assets: Cash ($100,000 + 300,000 - 100,000 - 150,000 - 69,292) + Land ($100,000) + Accounts Receivable ($260,000) = Liabilities: Bank Loan ($245,708) + Equity: Common stock ($100,000) + Retained Earnings ($260,000 - 150,000 - 15,000)
b1: Income Statement
Service Revenue $260,000
Operating expenses 150,000
Interest expense 15,000
Net income $95,000
Balance Sheet
Cash $80,708
Accounts Receivable 260,000
Land 100,000
Total assets $440,708
Bank Loan $245,708
Common stock 100,000
Net income 95,000
Total liabilities+equity $440,708
b2. The interest expense for 2019 is $15,000 ($300,000 * 5%)
The interest expense for 2020 is $12,285.40 ($300,000 +15,000 - 69,292) * 5%.
Explanation:
a) Data and Calculations:
Cash $100,000 + 300,000 - 100,000 - 150,000 - 69,292 = $80,708
Accounts Receivable $260,000
Land $100,000
Common stock $100,000
Bank Loan $300,000 + 15,000 - 69,292 = $245,708
Service Revenue $260,000
Operating expenses $150,000
Amortization Schedule, using an online financial calculator:
Beginning Interest Principal Ending
Balance Balance
1 $300,000.00 $15,000.00 $54,292.44 $245,707.56
2 $245,707.56 $12,285.38 $57,007.06 $188,700.50
3 $188,700.50 $9,435.02 $59,857.41 $128,843.08
4 $128,843.08 $6,442.15 $62,850.29 $65,992.80
5 $65,992.80 $3,299.64 $65,992.80 $0.0
Profit is only a liability for the business. Can you justify this?
Answer:
A growing company may not be earning any profits yet, but may nevertheless provide a great investment opportunity.
Other times, a lack of profitability can be a huge red flag that something is wrong with the firm.
Explanation:
Your firm has a credit rating of Baa. You notice that the credit spread for five-year maturity Baa debt is 150 basis points (1.50%). Your firm is issuing a five-year 5% semiannual coupon bond. You see that new five-year Treasury notes are being issued at par with a coupon rate of 3.5%. Should your bond be issued at par, at a discount, or at a premium?
Answer: Par
Explanation:
The credit spread measures the difference between the risk free rate/ yield for a certain type of security and the yield the security offers.
The credit spread here is 1.50%.
The risk free rate is 3.5%.
The expected yield in the market for the type of security you are issuing is therefore:
= 3.5% + 1.50%
= 5.00%
Your Baa bond is expected to have a yield of 5% which is the coupon rate you are issuing it at.
Bond will therefore be issued at Par which is what happens when the Coupon and the Yield are equal.
What Characteristics of the Confederate States of American made it a confederal government when compared to the government of the United States?
Answer:
Explanation:
The Confederate States of America can also be regarded as Confederate States was regarded as unrecognized breakaway state which exist between
year 1861 and 1865 which rose against
United States of America when she was experiencing American Civil War.
Characteristics of the Confederate States of American made it a confederal government when compared to the government of the United States are;
✓The central government of
The Confederate States of America is weaker compare to United States.
✓The sovereignty and power of individual states is more than US States
✓Issues such as national economic as well as foreign issues only are been handled by central government of the Confederate States
E14.3 (LO 1) (Entries for Bond Transactions) Presented below are two independent situations. 1. On January 1, 2020, Simon Company issued $200,000 of 9%, 10-year bonds at par. Interest is payable quarterly on April 1, July 1, October 1, and January 1. 2. On June 1, 2020, Garfunkel Company issued $100,000 of 12%, 10-year bonds dated January 1 at par plus accrued interest. Interest is payable semiannually on July 1 and January 1. Instructions For each of these two independent situations, prepare journal entries to record the following. a. The issuance of the bonds. b. The payment of interest on July 1. c. The accrual of interest on December 31. (Kieso 14-38) Kieso, Donald E., Jerry Weygandt, Terry Warfield. Intermediate Accounting, 17th Edition. Wiley, 02/2019. VitalBook file. The citation provided is a guideline. Please check each citation for accuracy before use.
Answer:
1) January 1, 2020
Dr Cash 200,000
Cr bonds payable 200,000
July 1, first coupon payment
Dr Interest expense 4,500
Cr Cash 4,500
December 31, fourth coupon payment
Dr Interest expense 4,500
Cr Interest payable 4,500
2) June 1, 2020
Dr Cash 104,000
Cr Bonds payable 100,000
Cr Bond interest payable 4,000
July 1, first coupon payment
Dr Interest expense 2,00
Cr Cash 2,000
December 31, accrued interest expense
Dr Interest expense 6,000
Cr Interest payable 6,000
WFO Corporation has gross receipts according to the following schedule:
Year 1
$22.00 million
Year 2
$24.00 million
Year 3
$26.00 million
Year 4
$24.50 million
Year 5
$25.00 million
Year 6
$27.00 million
If WFO began business as a cash-method corporation in Year 1, in which year would it have first been required to use the accrual method?
Answer:
WFO Corporation
Given WFO Corporation's annual gross receipts, which exceed $20 million, it is expected to use the accrual basis starting from Year 1, whether it is a C-Corporation or an S-Corporation.
Explanation:
a) Data and Calculations:
Gross Receipts:
Year 1 $22.00 million
Year 2 $24.00 million
Year 3 $26.00 million
Year 4 $24.50 million
Year 5 $25.00 million
Year 6 $27.00 million
b) For a C-Corporation, when the average gross receipts for the past three years exceed $5 million, the corporation is expected to change from cash basis to accrual basis. Assuming that WFO Corporation is an S-Corporation, it is expected to change to the accrual basis if its annual gross receipts exceed $10 million.
The bond of Tuckpeck is 8¼ 14. The bond traded for a high of 93.25 and closed at 93. The current yield of the bond to the nearest tenth of a percent is:
Answer:
8.9%
Explanation:
Calculation for what The current yield of the bond to the nearest tenth of a percent is:
Current yield of Bond=[(8+1/4)*10]/(93*10)
Current yield of Bond=(8.25*10)/930
Current yield of Bond=82.5/930
Current yield of Bond=0.089*100
Current yield of Bond=8.9%.
Therefore The current yield of the bond to the nearest tenth of a percent is 8.9%
All of the following are examples of prospecting methods EXCEPT:
a) Public exhibitions and demonstrations
b) cold canvas
experimentation
d) endless chain
e) observation
Answer:
c and e
Explanation:
those are 2 examples of it
The example that is excepted from the prospecting methods is given in option (C), that is experimentation is not part of prospecting methods.
What are prospecting methods?Identification of prospective clients, often known as prospects, is the first step in the sales process.
Creating a database of potential consumers and communicating with them regularly in the hope of turning them from potential customers into existing customers is the aim of prospecting.
The prospecting methods include demonstrations, exhibitions, canvasing, observations, the endless chain of marketing, the center of influence, direct mail, and lot more.
As per the given options, the prospecting here is applicable for political elections, therefore, options (a): "Public exhibitions and demonstrations," (b): "Cold canvas," (c): "observation," and (d): "endless chain," are examples of prospecting methods.
However, as per the need of the question, the example that is not included in the prospecting methods is given in option (c): "experimentation."
Check out the link below to learn more about prospecting methods;
https://brainly.com/question/15024051
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Asset management ratios are used to measure how effectively a firm manages its assets, by relating the amount a firm has invested in a particular type of asset (or group of assets) to the amount of revenues the asset is generating. Examples of asset management ratios include the average collection period (also called the days sales outstanding ratio), the inventory turnover ratio, the fixed asset turnover ratio, and the total asset turnover ratio Consider the following case: Crawford Construction has a quick ratio of 2.00x, $36,225 in cash, $20,125 in accounts receivable, some inventory, total current assets of $80,500, and total current liabilities of $28,175. The company reported annual sales of $100,000 in the most recent annual report. Over the past year, how often did Crawford Construction sell and replace its inventory? O 4.14 x 4.55 x 2.86x 8.01 x The inventory turnover ratio across companies in the construction industry is 4.55x. Based on this information, which of the following statements is true for Crawford Construction? O Crawford Construction is holding less inventory per dollar of sales compared to the industry average O Crawford Construction is holding more inventory per dollar of sales compared to the industry average You are analyzing two companies that manufacture electronic toys-Like Games Inc. and Our Play Inc. Like Games was launched eight years ago, whereas Our Play is a relatively new company that has been in operation for only the past two years. However, both companies have an equal market share with sales of $100,000 each. You've collected company data to compare Like Games and Our Play. Last year, the average sales for all industry competitors was $255,000. As an analyst, you want to make comments on the expected performance of these two companies in the coming year. You've collected data from the companies' financial statements. This information is listed as follows: Data Collected (in dollars) Accounts receivable Net fixed assets Total assets Like Games 2,700 55,000 95,000 Our Play 3,900 80,000 125,000 Industry Average 3,850 216,750 234,600 Using this information, complete the following statements to include in your analysis days of sales tied up in receivables, which is much than the industry average. It takes Our Play 1. Our Play has time to collect cash from its customers than it takes Like Games. more than that of Our Play. This is because Like Games was formed eight years ago, so the 2. Like Games's fixed assets turnover ratio is acquisition cost of its fixed assets is recorded at historic values when the company bought its assets and has been depreciated since then Assuming that fixed assets prices (not book values) rose over the past six years due to inflation, Our Play paid a assets. amount for its fixed 3. The average total assets turnover in the electronic toys industry is 1.09x, which means that $1.09 of sales is being generated with every dollar of investment in assets. A are total assets turnover ratio indicates greater efficiency. Both companies' total assets turnover ratios than the industry average
Answer:
1. 4.14X
for the other parts of this question, i had to solve for the solution and fill it into the blank parts of the question.
Explanation:
part 1 solution:
annual sales - cash + account receivable
= 80500 - (36225 + 20125)
= 80500 - 56350
inventories = 24150
inventory turnover ratio = 100000/24150
= 4.14X
what is true for crawford is that crawford construction is holding more inventories per dollar compared to the industry average. we compared 4.14x with 4.55x to arrive at this conclusion.
part 2 solution:
Days sales outstanding = account receivable / average sales per day
like games = 2700/(100000/365)
= 9.855
our play = 3900/(100000/365)
= 14.235
industry average = 3850/(255000/365)
= 5.5
these values would be used to fill in this part of the question
our play has 14.235 days of sales which is much more than industry average. it is obvious that 14.235 is much greater than 5.5. It takes our play more time to time to collect colect cash from its customers than like games. this is as our play has 14.235 days and like games has 9.855 days.
fixed asset turn over ratio = sales/ net fixed assets
like games = 100000/55000
= 1.81X
our play = 100000/80000
= 1.25X
like games has fixed asset that is higher than that of our play. from the calculation above, 1.81X is greater than 1.25X. This is as like games was created 8 years ago.
Our Play paid a higher amount for its fixed assets.
part 3 solution;
total assets turn over ratio = sales / total assets
for industry average = 225000/234600 = 1.09X
for like games = 100000/95000 = 1.05X
For our play = 100000/125000 = 0.8X
A higher turn over ratio shows greater efficiency. Both companies have lower total turnover than the industry average. we can see obviously that 1.09X is greater than 1.05X and 0.8X.
thank you!
Recently, a group of university students decided to incorporate for the purposes of selling a process to recycle the waste product from manufacturing cheese. Some of the initial costs involved were legal fees and office expenses incurred in starting the business, state incorporation fees, and stamp taxes. One student wishes to charge these costs against revenue in the current period. Another wishes to defer these costs and amortize them in the future. Which student is correct
Answer:
The student wishing to defer these costs and amortize them in the future.
Explanation:
Indeed, according to standard regulatory requirements, all the initial costs associated with incorporating a business cannot be deducted all at once in the first year of operation.
However, these costs are spread over a long period of time. And one way to do this is to amortize them in the future. Therefore, the second student deferring cost is correct.
Luebke Incorporated has provided the following data for the month of November. The balance in the Finished Goods inventory account at the beginning of the month was $72,000 and at the end of the month was $32,000. The cost of goods manufactured for the month was $222,000. The actual manufacturing overhead cost incurred was $61,000 and the manufacturing overhead cost applied to Work in Process was $66,000. The company closes out any underapplied or overapplied manufacturing overhead to cost of goods sold. The adjusted cost of goods sold that would appear on the income statement for November is:
Answer:
$257,000
Explanation:
Calculation for what The adjusted cost of goods sold that would appear on the income statement for November is:
First step is to calculate Over applied overhead
Over applied overhead = $66,000- $61,000
Over applied overhead= $5,000
Second step is to calculate Unadjusted cost of goods sold
Unadjusted cost of goods sold = $72,000+$222,000+$32,000
Unadjusted cost of goods sold = $262,000
Now let calculate the Adjusted cost of goods sold
Adjusted cost of goods sold = $262,000-$5,000 Adjusted cost of goods sold= $257,000
Therefore The adjusted cost of goods sold that would appear on the income statement for November is:$257,000
