Shear, Inc., began operations in Year 1. Included in Shear’s Year 1 financial statements were credit loss expenses on accounts receivable of $1,400 and profit from an installment sale of $2,600. For tax purposes, the credit losses will be deducted and the profit from the installment sale will be recognized in Year 2. The applicable tax rate is 25%. In its Year 1 income statement, what amount should Shear report as deferred income tax expense?
Answer:
$300
Explanation:
Calculation for what amount should Shear report as deferred income tax expense
Using this formula
Deferred income tax expense=(installment sale Profit-Loss expenses on accounts receivable)*Tax rate
Let plug in the formula
Deferred income tax expense=(2,600-1,400)*25%
Deferred income tax expense=1,200*25%
Deferred income tax expense=$300
Therefore the amount that Shear should report as deferred income tax expense will be $300
John Wiggins is considering the purchase of a small restaurant. The purchase price listed by the seller is $890,000. John has used past financial information to estimate that the net cash flows (cash inflows less cash outflows) generated by the restaurant would be as follows: (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the tables provided.)
Years Amount
1-6 $ 89,000
7 79,000
8 69,000
9 59,000
10 49,000
If purchased, the restaurant would be held for 10 years and then sold for an estimated $790,000.
Required:
Determine the present value, assuming that John desires an 11% rate of return on this investment. (Assume that all cash flows occur at the end of the year.) (Do not round intermediate calculations. Round your final answers to nearest whole dollar amount.)
Answer and Explanation:
The computation of the present value is as follows:
Years Value Factor at 11% Present value
1-6 $89,000 4.2305 $376,515
7 $79,000 0.4817 $38,054
8 $69,000 0.4339 $29,939
9 $59,000 0.3909 $23,063
10 $49,000 0.3522 $17,258
10 $790,000 0.3522 $278,238
Present value $763,067
it should be rejected as it less than the initial investment
Bailey Corp. has the following information: Beginning Inventory (Jan 1) Ending Inventory (Dec 31) Raw Materials Inventory $ 25,300 $ 39,100 Work in Process Inventory $ 24,100 $ 26,600 Finished Goods Inventory $ 39,000 $ 21,900 Additional information for the year is as follows: Raw materials purchases $ 106,100 Direct labor $ 81,600 Manufacturing overhead applied $ 87,000 Indirect materials $ 0 Compute the cost of goods manufactured.
Answer:
See below
Explanation:
The cost of goods manufactured is computed as;
Beginning inventory
$25,300
Add ;
Raw materials purchases
$106,100
Cost of goods available for sale
$131,400
Less:
Ending inventory
$39,100
Cost of goods sold
$92,300
Add:
Beginning work in process
$24,100
Less:
Ending work in process
($26,600)
Cost of goods manufactured
$89,800
A student has received a $30,000 loan from a wealthy aunt in order to finance his four-year college program. The terms are that the student repay his aunt in full at the end of eight years with simple interest computed at the rate of 4 percent per year. Determine the interest that must be paid on the eight-year loan. Don't forget to include units
Answer:
$9,600
Explanation:
Loan received (Principal) = $30,000
SI Rate = 4%
Time Period = 8 years
Simple Interest = ?
SI = PRT / 100
SI = $30,000 * 4/100 * 8
SI = $9,600
So, the student must pay $9,600 as interest on the eight-year loan
The interest that must be paid on the eight-year loan is $9,600
Given the information below:
Loan received (Principal) = $30,000
SI Rate = 4%
Time Period = 8 years
Simple Interest = ?
We know that simple interest(SI) is computed as :
SI = Principal * Rate * Time / 100
SI = PRT / 100
SI = $30,000 * 4 / 100 * 8
SI = $9,600
Hence, the student must pay $9,600 as interest on the eight-year loan.
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State and federal governments actively support education at the primary, secondary, and collegiate levels. But they mandate education at the primary and secondary levels, while merely providing subsidies and loan guarantees at the collegiate level. Of the key rationales for public provision of education described, which do you think underpins this differential treatment?
Answer:
1. positive externalities
2. educational credit for the market failure
3. redistribution
4. failure to maximize the family utility
Explanation:
There are generally four rationales or logical thinking for the public provisions for education. They are the positive externalities, failure to maximize the family utility, educational credit for the market failure, redistribution.
Now each rationales provides reasons that educations is more likely to be underprovided without any intervention from the government. But many of them does not provide any reasons for the mandate of education.
Like suppose the government can support and solve any educational credit market failure by just offering some loan guarantees for the students while letting them chose to receive education or not.
Similarly government can also address positive externalities that are associated with productivity gains or just letting a person educated without any mandating it.
And finally, government redistributes the poor families through the progressive taxation or the offerings of free education without any mandating them.
Pronghorn Company has decided to expand its operations. The bookkeeper recently completed the following balance sheet in order to obtain additional funds for expansion. PRONGHORN COMPANY BALANCE SHEET FOR THE YEAR ENDED 2020 Current assets Cash $241,500 Accounts receivable (net) 351,500 Inventory (lower-of-average-cost-or-market) 412,500 Equity investments (marketable)-at cost (fair value $131,500) 151,500 Property, plant, and equipment Buildings (net) 581,500 Equipment (net) 171,500 Land held for future use 186,500 Intangible assets Goodwill 91,500 Cash surrender value of life insurance 101,500 Prepaid expenses 23,500 Current liabilities Accounts payable 146,500 Notes payable (due next year) 136,500 Pension obligation 93,500 Rent payable 60,500 Premium on bonds payable 64,500 Long-term liabilities Bonds payable 511,500 Stockholders’ equity Common stock, $1.00 par, authorized 400,000 shares, issued 301,500 301,500 Additional paid-in capital 171,500 Retained earnings ?
Imagine that your country takes in $100 million each year in tax money but chooses to spend $500 million on various services it provides. What type of stance does your country take on fiscal policy?
A.
expansionary stance
B.
contractionary stance
C.
economic stance
D.
neutral stance
For plato, Expansionary stance.
Expansionary stance is the type of stance does your country take on fiscal policy. Hence, option A is correct.
What is Expansionary stance?When government expenditure surpasses tax receipts, the fiscal attitude is said to be "expansionary" because this tends to increase aggregate demand. For instance, household spending will increase if income taxes are reduced by the government.
Governments engage in contractionary fiscal policy when they either cut spending or raise taxes. Its name alludes to the method by which the economy contracts. It limits the amount of money that both businesses and people can spend.
Contractionary policy is used to control inflation. Governments are said to be implementing an expansionary fiscal strategy when they lower tax rates while raising spending to promote economic growth. As a result of an increase in purchasing power, consumption increases.
Thus, option A is correct.
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Winston Company estimates that the factory overhead for the following year will be $1,250,000. The company has decided that the basis for applying factory overhead should be machine hours, which is estimated to be 50,000 hours. The total machine hours for the year were 54,300. The actual factory overhead for the year was $1,348,800.
a. Determine the total factory overhead amount applied.
b. Calculate the over or underapplied amount for the year.
Solution :
a).
Estimated overhead 1,250,000
Divide by the estimated machine hours 50,000
Predetermined overhead rate 25
Actual machine hours 54,300
Multiply by predetermined overhead rate 25
The factory overhead amount applied $ 1,357,500
b).
Actual factory overhead 1,348,800
Less : factory overhead amount applied 1,357,500
The underapplied amount is $ 8700
I don’t know what the percentages are for each one
Answer:
thats correct
Explanation:
What is the first step in the standard purchasing process practiced by most companies
Answer:
requisition
Explanation:
its correct :D
The first step in the standard purchasing process practised by most companies is requisition.
What do you understand by requisition?Requisition is a request for goods or services made by an employee to the person or department in a company that is responsible for purchasing. If the request is approved, that entity will submit a purchase order to a supplier for the goods or services. In this context, a requisition is also known as a purchase requisition.
Requisitions are usually submitted in a standardized format on paper form or through e-procurement software that automates some of the tasks involved and reduces duplication of effort. A requisition form, whether physical or digital, typically includes the details about the item requested, the date of the request, the individual and department making the request and the location where the goods should be delivered.
Copies of the requisition, the purchase order, the invoice and the packing slip are usually stored together.
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Question 2 (5 points)
(01.07 MC)
How do we know our current money has value? (5 points)
а
People talk about money a lot.
Ob
It is backed by gold.
Ос. .
People accept it in exchange for goods or services,
od
It has many security measures.
Answer:
It's C
Explanation:
a and d are kind of a result of C but C is still correct
we no longer back our money with gold
In its first year of operations, Pharoah company recognized $31,800 in service revenue, $6400 of which was on account and still outstanding at year end. The remaining $25400 was received in cash from customers.
The company incurred operating expenses of $16600. Of these expenses, $12730 were paid in cash; $3870 was still owed on account at year end. In addition, Pharoah prepaid $2390 for insurance coverage that would not be sued until the second year of operations.
Calculate the first year's net earnings under the cash basis of accounting and the first year's net earnings under the accrual basis of accounting.
What basis of accounting (cash or accrual) provides more useful information for decision makers?
Answer:
Net income under cash basis:
= Revenues - Expenses
= ($31,800-$6,400) - ($12,730+$2390)
= $25,400 - $15,120
= $10,280
Net income under accrual basis:
= $31,800 - $16,600
= $15,200
The basis of accounting which provides more useful information for decision makers is the accrual basis because it entails the revenues and expenses for a specific period of time which make it easy for decision making.
All of the following statements are correct when referring to process costing except:Multiple ChoiceCosts are accumulated by department.A process costing system has the same basic purposes as a job-order costing system.Process costing would be appropriate for a jeweler who makes custom jewelry to order.Units produced are indistinguishable from each other.
Answer:
Process costing would be appropriate for a jeweler who makes custom jewelry to order.
Explanation:
Product costing is defined as the process by which the best costing method is chosen to suit a particular product.
There are three main types: process costing, specific order costing, and service costing.
Process costing is a method that determines the cost incurred at each stage of production. It is best used for processes that are repetitive such as manufacturing plants.
However a jeweler who makes custom jewelry to order will most appropriately be served by a specific order costing.
This involves costing according to distinct jobs or contracts.
There is no specific or repetitive process, rather the job is usually carried out according to specific needs of a customer.
Wildhorse Locomotive Corporation purchased for $604,000 a 40% interest in Lopez Railways, Inc. This investment enables Wildhorse Locomotive to exert significant influence over Lopez Railways. During the year, Lopez Railways earned net income of $159,000 and paid dividends of $27,000. Prepare ZaneLocomotive’s journal entries related to this investment.
Answer:
Dr Equity Investments $604,000
Cr Cash $604,000
Dr Equity Investments $63,600
Cr Investment Income $63,600
Dr Cash $10,800
Cr Equity Investments $10,800
Explanation:
Preparation of ZaneLocomotive’s journal entries related to this investment.
Dr Equity Investments $604,000
Cr Cash $604,000
(Being to record Investment)
Dr Equity Investments $63,600
Cr Investment Income $63,600
(40% × $159,000)
(Being to record share in net income)
Dr Cash $10,800
Cr Equity Investments $10,800
(40% × $27,000)
(Being to record shares in dividend)
While attending a baseball game cheering for the home team a fan of the other team sneaks up behind jack and hits jack on the head with a hard piece of pretxel injuring jack. Jack has no ideas he is about to be hit an dis embarrassed when his friends see that he was injured by a pretzel. Which of the following torts has the fan committed?
a) assault and battery.
b) battery and negligent infliction of emotional distress.
c) battery.
d) assault.
e) assault, battery, and negligent infliction of emotional distress.
Answer:
C) Battery
Explanation:
From the question we are informed about an instance, While attending a baseball game cheering for the home team a fan of the other team sneaks up behind jack and hits jack on the head with a hard piece of pretxel injuring jack. Jack has no ideas he is about to be hit an dis embarrassed when his friends see that he was injured by a pretzel. In this case, The torts that the fan has committed is the battery. A tort as regards common law jurisdiction can be regarded as a civil wrong which make a claimant to count losses/ harm which resulted in legal liability on the part of the person that committed the tortious act. These could be invasion of privacy as well as injuries
What are The two segments of the organization's environment
As part of its commitment to quality, the J. J. Borden manufacturing company is proposing to introduce just-in-time (JIT) production methods. Managers of the company have an intuitive feel regarding the financial benefits associated with a change to JIT, but they would like to have some data to inform their decision making in this regard. You are provided with the following data:
Item ExistingSituation AfterAdopting JIT
Manufacturing costs as percentage of sales:
Product-level support 15 % 4 %
Variable manufacturing overhead 28 10
Direct materials 30 20
Direct manufacturing labor 20 13
Other financial data:
Sales revenue $ 1,430,000 $ 1,810,000
Inventory of WIP 260,000 46,000
Other data:
Manufacturing cycle time 60 days 30 days
Inventory financing costs (per annum) 10 % 10 %
Required:
As the management accountant for the company, prepare an estimate the financial benefits associated with the adoption of JIT. Specifically, what is the estimated change in annual operating income attributable to the JIT implementation?
Answer:
A. $74,100 $954,700
B. $880,600
Explanation:
A. Preparation to estimate the financial benefits associated with the adoption of JIT
Current situation After JIT
Sales 1,430,000 1,810,000
Less costs
Production level support 214,500 72,400
(15%*1,430,000=214,500)
(4%*1,810,000=72,400)
Variable manufacturing overhead 400,400 181,000
(28%*1,430,000=400,400)
(10%*1,810,000=181,000)
Direct material 429,000 362,000
(30%*1,430,000=429,000)
(20%*1,810,000=362,000)
Direct manufacturing labor 286,000 235,300
(20%*1,430,000=286,000)
(13%*1,810,000=235,300)
Inventory financing costs 26,000 4,600
(10%*260,000=26,000)
(10%*46,000=4,600)
Total costs 1,355,900 855,300
Operating profits $74,100 $954,700
(1,430,000-1,355,900)
(1,810,000-855,300)
Therefore the the financial benefits associated with the adoption of JIT will be $74,100 $954,700
B. Preparation for the estimated change in annual operating income attributable to the JIT implementation
Current situation After JIT Change
Sales 1,430,000-1,810,000=-380,000
Less costs
Production level support 214,500-72,400 =142,100
Variable manufacturing overhead 400,400 -181,000=219,400
Direct material 429,000-362,000=67,000
Direct manufacturing labor 286,000- 235,300= 50,700
Inventory financing costs 26,000-4,600 =21,400
Total costs 1,355,900-855,300=500,600
Operating profits 74,100-954,700=880,600
Therefore the estimated change in annual operating income attributable to the JIT implementation will be 880,600
Milea Inc. experienced the following events in Year 1, its first year of operations:
1. Received $13,500 cash from the issue of common stock
2. Performed services on account for $45,000
3. Pald the utility expense of $1,150.
4. Collected $36,540 of the accounts receivable.
5. Recorded $8,100 of accrued salaries at the end of the year
6. Paid a $1,050 cash dividend to the stockholders.
Required
1. Prepare the income statement
2. Prepare the statement of changes in stockholders' equity
3. Prepare the balance sheet as of December 31.
4. Prepare the statement of cash flows for the Year 1 accounting period.
Answer:
1. Net income = $35,750
2. Stockholders' equity = $48,200
3. Total assets = Total Equity and Liabilities = $56,300
4. Net cash generated = $47,840
Explanation:
1. Prepare the income statement
Milea Inc.
Income Statement
For the Year ended 31 December Year 1
Details Amount ($)
Revenue:
Service income 45,000
Expenses:
Utility expense (1,150)
Accrued salaries (8,100)
Net income 35,750
Dividend paid (1,050)
Retained earnings 34,700
2. Prepare the statement of changes in stockholders' equity
Milea Inc.
Statement of changes in stockholders' equity
For the Year ended 31 December Year 1
Details Amount ($)
Common stock 13,500
Retained earnings 34,700
Stockholders' equity 48,200
3. Prepare the balance sheet as of December 31.
Milea Inc.
Balance Sheet
As of 31 December Year 1
Details $
Assets
Current Assets
Ending cash balance 47,840
Accounts receivable ($45,000 - $36,540) 8,460
Total assets 56,300
Equity and Liabilities
Stockholders' equity 48,200
Liabilities
Current liabilities
Accrued salaries 8,100
Total Equity and Liabilities 56,300
4. Prepare the statement of cash flows for the Year 1 accounting period.
Milea Inc.
Statement of Cash Flows
For the Year ended 31 December Year 1
Details $ $
Net income 35,750
Adjustment to reconcile net income:
(Increase) decrease in current assets:
Accounts receivable ($45,000 - $36,540) (8,460)
Increase (decrease) in current liabilities:
Accrued salaries 8,100
Net cash from operating activities 35,390
Cash flow from financing activities:
Common stock 13,500
Dividend paid (1,050)
Net cash from financing activities 12,450
Net cash generated 47,840
Beginning cash balance 0
Ending cash balance 47,840
December 31, 2021 and 2020, financial statements and key ratios are presented below (all numbers are in millions): 2021 2020 Accounts receivable (net) $ 20 $ 16 Net sales $ 115 $ 100 Cost of goods sold $ 60 $ 55 Net income $ 20 $ 17 Inventory turnover 5.22 Return on assets 10.3 % Equity multiplier 2.36 Dowling's 2021 profit margin is (rounded):
Answer:
17.40%
Explanation:
Profit margin = Net income / Net sales * 100
Profit margin = $20 million / $115 million * 100
Profit margin = 0.1739130 * 100
Profit margin = 17.3913%
Profit margin = 17.40%
So, Dowling's 2021 profit margin is 17.40%
Diaz Company owns a milling machine that cost $126,500 and has accumulated depreciation of $92,700. Prepare the entry to record the disposal of the milling machine on January 3 under each of the following independent situations. The machine needed extensive repairs, and it was not worth repairing. Diaz disposed of the machine, receiving nothing in return. Diaz sold the machine for $15,900 cash. Diaz sold the machine for $33,800 cash. Diaz sold the machine for $41,200 cash.
Answer:
A. Jan 03
Dr Accumulated depreciation—Milling machine $92,700
Dr Loss on disposal of milling machine $33,800
Cr Milling machine $126,500
B .Jan 03
Dr Cash $15,900
Dr Accumulated depreciation—Milling machine $92,700
Dr Loss on sale of milling machine $17,900
Cr Milling machine $126,500
C. Jan 03
Dr Cash $33,800
Dr Accumulated depreciation—Milling machine $92,700
Cr Milling machine $126,500
Explanation:
Preparation of journal entries
A. Jan 03
Dr Accumulated depreciation—Milling machine $92,700
Dr Loss on disposal of milling machine $33,800
($126,500-$92,700)
Cr Milling machine $126,500
B .Jan 03
Dr Cash $15,900
Dr Accumulated depreciation—Milling machine $92,700
Dr Loss on sale of milling machine $17,900
[126,500-($15,900+$92,700)
Cr Milling machine $126,500
C. Jan 03
Dr Cash $33,800
Dr Accumulated depreciation—Milling machine $92,700
Cr Milling machine $126,500
Testbank Multiple Choice Question 145 Sheffield Corp. had 330 units of product A on hand at January 1, 2020, costing $22 each. Purchases of product A during January were as follows: Date Units Unit Cost Jan. 10 410 $23 18 450 24 28 180 25 A physical count on January 31, 2020 shows 440 units of product A on hand. The cost of the inventory at January 31, 2020 under the LIFO method is $10740. $9790. $9490. $10190.
Answer:
$9790
Explanation:
LIFO means last in first out. It means it is the last purchased inventory that is the first to be sold.
If LIFO method is used, the reaming inventory would consist of the earliest purchased inventories.
If 440 units remain, they wold consist of beginning inventory and inventory purchased on 10th of January
(330 x $22) + [(440 - 330) x $23) = $9790
Tom is comparing two printers for his small business. The purchase price for Printer A is $1,000, with maintenance and operations costs of $400. Printer B increases productivity by $100, and reduces the maintenance and operations costs by half. The expected lifetime value is one year for both printers. What is the economic value to the customer (EVC) of Printer B
Answer:
EVC = $1300
Explanation:
In this question, we need to find the economic value to the customer (EVC) of Printer B.
First of all we need to know the basics of Economic value of a product,
It is basically starts with evaluating the additional values of the product first which are associated with it and then, those values are added to the next best product in the market. In this case, Printer A is the next best product whose price is $1000.
We know that, Printer B increase productivity by $100
Reduce the maintenance and operations costs by half, which means $400/2 = $200.
Additional value of the product = $100 + $200
Cost of the next best product = $1000
So,
According to the EVC definition and understandings, we must add the additional values of the product to value of the next best product.
Hence,
EVC = $1000 + $100 + $200
EVC = $1300
Which of the following markets is an example of monopolistic competition?
Answer: The restaurant industry
Explanation:
Answer:A new pizza shop promotes a unique new flavor of ice cream
During fiscal 2016, Caleres Inc. (formerly Brown Shoe Company), reported cost of goods sold of $1,517.4 million. Inventory at the start of the year was $546.7 million and at the end of the year was $585.8 million. Which of the following describes the closing entry that the company will make for these accounts?
A. Debit Inventory $39.1 million.
B. Credit Inventory $585.8 million.
C. Credit Cost of goods sold $1,517.4 million.
D. Both A and C.
E. None of the above.
Answer:
Credit Cost of goods sold $1,517.4 million
Explanation:
given data
cost of goods sold = $1,517.4 million
Inventory at the start of the year = $546.7 million
Inventory at the end of the year = $585.8 million
solution
Journal Entry will as
Income Summary DR $1,517.4 million
Cost of goods sold CR $1,517.4 million
so correct option is C. Credit Cost of goods sold $1,517.4 million.
Answer each of the following independent questions. Alex Meir recently won a lottery and has the option of receiving one of the following three prizes: (1) $64,000 cash immediately, (2) $20,000 cash immediately and a six-period annuity of $8,000 beginning one year from today, or (3) a six-period annuity of $13,000 beginning one year from today. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the tables provided.) 1. Assuming an interest rate of 6%, determine the present value for the above options. Which option should Alex choose? 2. The Weimer Corporation wants to accumulate a sum of money to repay certain debts due on December 31, 2030. Weimer will make annual deposits of $100,000 into a special bank account at the end of each of 10 years beginning December 31, 2021. Assuming that the bank account pays 7% interest compounded annually, what will be the fund balance after the last payment is made on December 31, 2030?
Answer:
Option 1$1,381,645Explanation:
1. Alex needs to pick the option that offers the highest present value.
Option 1 present value = $64,000
Option 2:
Mix of lump-sum and annuity:
Present value of annuity = Annity * Present value interest factor of annuity, 6%, 6 periods
= 8,000 * 4.9173
= $39,338.40
Present value of option B = 20,000 + 39,338.40
= $59,338.40
Option 3:
Present value of annuity = Annity * Present value interest factor of annuity, 6%, 6 periods
= 13,000 * 4.9173
= $63,924.90
Alex should choose option 1 as it has the largest present value.
2.As this concerns a future amount, the future value of an annuity is used.
Future value of Annuity = Annuity * (( 1 + rate)^n - 1 )/ r
= 100,000 * ((1 + 7%)¹⁰ - 1) / 7%
= 100,000 * 13.8164479612795
= $1,381,644.79
= $1,381,645
Taggart Technologies is considering issuing new common stock and using the proceeds to reduce its outstanding debt. The stock issue would have no effect on total assets, the interest rate Taggart pays, EBIT, or the tax rate. Which of the following is likely to occur if the company goes ahead with the stock issue?
A. The ROA will decline.
B. Taxable income will decline.
C. The tax bill will increase.
D. Net income will decrease.
E. The times-interest-earned ratio will decrease.
Answer:
C. The tax bill will increase.
Explanation:
Interest paid on debt finance is tax deductible , unlike the dividends paid on common stock which are not deductible for tax purposes,hence, by reducing debt capital so also the interest expense which has the potential to reduce taxable income would also reduce.
Hence, there would higher taxable profit and eventually, there would higher tax, in essence, the correct option is the option C
Which of the following statements are true oflong-term investments?
a. They can include bonds and stocks not intended to be sold in the near future.
b. They can be considered cash equivalents.
c. They can include assets not used in operations, such as investments in land.
d. They generally include investments that will mature in 3 to 12 months.
e. They are reported with noncurrent assets on the balance sheet.
f. They are always easily sold and therefore qualify as being marketable.
Answer:
a. They can include bonds and stocks not intended to be sold in the near future.
c. They can include assets not used in operations, such as investments in land.
e. They are reported with noncurrent assets on the balance sheet.
Explanation:
Long term investment or assets are those that are typically held in a company's balance sheet for many years. They can include assets such as land, equipment like machinery, buildings and vehicles.
They also include sticks and bonds that won't be used in the short term.
So long term investment are not cash equivalents because cash can be used in the short term.
Also it cannot be used within 3 - 12 months.
They are not easily sold as they sold so they are not considered marketable asset in the short run.
Long term investment is considered to be a non current asset as they last longer than a year on the balance sheet.
What is the variable cost of sterilizing an instrument using the new equipment
After graduating from dental school two years ago, Dr. Lauren Farish purchased the dental practice of a long-time dentist who was retiring. In January of this year she had to replace the out-dated autoclave equipment she inherited from the previous dentist. Now as she is preparing her budget for next year, she is concerned about understanding how her cost for sterilizing her dental instruments has changed. She has gathered the following information from her records:
Month Number of instruments used Total autoclave cost
January 634 $7,466
February 534 6,526
March 734 7,148
April 934 9,028
May 834 7,744
June 1,034 8,596
July 1,234 10,009
August 1,134 9,924
What is the variable cost of sterilizing an instrument using the new equipment? (Round answer to 2 decimal places, e.g. 15.25.)
Variable cost _____ $ per instrument
What is the fixed cost of the autoclave equipment? (Round answer to 0 decimal places, e.g. 5,275.)
Fixed cost $ ________
What is the cost formula that Dr. Farish should use for estimating autoclave sterilization costs for next year
Answer:
Results are below.
Explanation:
Giving the following information:
Month Number of instruments used Total autoclave cost
January 634 $7,466
February 534 6,526
March 734 7,148
April 934 9,028
May 834 7,744
June 1,034 8,596
July 1,234 10,009
August 1,134 9,924
To determine the fixed and variable cost, we need to use the high-low method:
Variable cost per unit= (Highest activity cost - Lowest activity cost)/ (Highest activity units - Lowest activity units)
Variable cost per unit= (10,009 - 6,526) / (1,234 - 534 )
Variable cost per unit= $4.9757 per unit
Fixed costs= Highest activity cost - (Variable cost per unit * HAU)
Fixed costs= 10,009 - (4.9757*1,234)
Fixed costs= $3,869
Fixed costs= LAC - (Variable cost per unit* LAU)
Fixed costs= 6,526 - (4.9757*534)
Fixed costs= $3,869
Total cost= 3,869 + 4.9757x
x= number of instruments
At December 31, 2021, Newman Engineering's liabilities include the following:
a. $12 million of 6% bonds were issued for $12 million on May 31, 1999. The bonds mature on May 31, 2029, but bondholders have the option of calling (demanding payment on) the bonds on May 31, 2022. However, the option to call is not expected to be exercised, given prevailing market conditions.
b. $16 million of 5% notes are due on May 31, 2022. A debt covenant requires Newman to maintain current assets at least equal to 177% of its current liabilities. On December 31, 2021, Newman is in violation of this covenant. Newman obtained a waiver from National City Bank until June 2022, having convinced the bank that the companyâs normal 2 to 1 ratio of current assets to current liabilities will be reestablished during the first half of 2022.
c. $9 million of 8% bonds were issued for $9 million on August 1, 1989. The bonds mature on July 31, 2022. Sufficient cash is expected to be available to retire the bonds at maturity.
Required:
Classify the above mentioned debts as current liabilities or noncurrent liabilities.
Answer:
1. Classify as Current liabilities up to the sum of $12 million
Since the bondholder have the option to demand the payment in the near future irrespective of whether they will exercise or not, it will be treated as current liability.
2. Classify as Current liabilities up to the sum of $16 million
The notes payable are due within a year and despite the violation of maintaining the condition, it will be treated as current liability.
3. Classify as Current liabilities up to the sum of $9 million
Since the bond matures within a year and there is sufficient amount of cash available for redemption which signifies that there is fair chances of retirement of bonds exits, hence, need to classified as current liability.
Based on accounting practices, the following are true:
a. Current liability.b. Current liability.c. Current liability. Why are the above current liabilities?The bondholders can call the bond on May 31, 2022 which is within a year of December 2021. This is therefore a current liability.
Even though they are in violation of the covenant, the amount is still due within the year which makes it a current liability.
The bonds maturing on July 31, 2022 are within a year of the date of the statements which is December 31, 2021.
Find out more on current liabilities at https://brainly.com/question/13388204.
Bakerston Company is a manufacturing firm that uses job-order costing. The company's inventory balances were as follows at the beginning and end of the year:
Beginning Balance Ending Balance
Raw materials $ 11,700 $ 15,800
Work in process $ 32,700 $ 14,600
Finished goods $ 102,000 $ 121,000
The company applies overhead to jobs using a predetermined overhead rate based on machine-hours. At the beginning of the year, the company estimated that it would work 17,500 machine-hours and incur $262,500 in manufacturing overhead cost. The following transactions were recorded for the year:
• Raw materials were purchased, $415,000.
• Raw materials were requisitioned for use in production, $410,900 ($382,000 direct and $28,900 indirect).
• The following employee costs were incurred: direct labor, $332,000; indirect labor, $71,000; and administrative salaries, $154,000.
• Selling costs, $115,000.
• Factory utility costs, $27,000.
• Depreciation for the year was $124,000 of which $110,000 is related to factory operations and $14,000 is related to selling, general, and administrative activities.
• Manufacturing overhead was applied to jobs. The actual level of activity for the year was 14,200 machine-hours.
• Sales for the year totaled $1,283,000.
Required:
a. Prepare a schedule of cost of goods manufactured in good form. (Do not round predetermined overhead rate. Input all amounts as positive values.)
b. Was the overhead underapplied or overapplied? By how much? (Do not round predetermined overhead rate. Input the amount as a positive value.)
c. Prepare an income statement for the year. The company closes any underapplied or overapplied overhead to Cost of Goods Sold. (Input all amounts as positive values.)
Answer:
Part a
Cost of goods manufactured
Beginning Work In Process Inventory $32,700
Add Manufacturing Costs :
Raw Materials Cost $410,900
Direct Labor $332,000
Applied Overheads $213,000 $955,900
Less Ending Work In Process Inventory ($14,600)
Cost of Goods Manufactured $974,000
Part b
Under-applied overheads = $23,900
Part c
income statement for the year
Sales $1,283,000
Less Costs of Sales
Beginning Finished Goods Inventory $102,000
Add Cost of Goods Manufactured $974,000
Less Ending Finished Goods Inventory ($121,000)
$1,197,000
Add Under - Applied Overheads $23,900 ($1,220,900)
Gross Profit $62,100
Explanation:
Applied Overheads = $262,500 / 17,500 x 14,200 = $213,000
Raw Materials Cost = $11,700 + $415,000 - $15,800 = $410,900
Actual Overheads = $28,900 + $71,000 + $27,000 + $110,000 = $236,900
Under-applied overheads = $236,900 - $213,000 = $23,900