Answer:
k = April 1 ( A )
Explanation:
Given data :
net investment income : $9200
Beginning balance = $100000
ending balance = $129200
deposit made
no withdrawals
interest earned = 8%
net investment ( $9200) = [ending balance - (starting balance + deposits/withdrawals )]
9200 = 129200 - 100000 - deposits
deposit = 129200 -100000 - 9200 = 20000
8% interest was earned on starting balance
= 8% of $100000 = $8000
interest earned on the deposit made = net income - interest earned on beginning balance = 9200 - 8000 = $1200
using the dollar-weighted method
assuming the deposit was made for Y months
interest earned on deposit = deposit * interest rate * (y/12)
1200 = 20000 * 8% * ( y /12 )
hence ( y/12) = 0.75 hence y = 9 months from December 31
which makes K = April 1
Ohno Company specializes in manufacturing a unique model of bicycle helmet. The model is well accepted by consumers, and the company has enough orders to keep the factory production at 10,000 helmets per month (80% of its full capacity). Ohno's monthly manufacturing cost and other expense data are as follows. Rent on factory equipment $11,000 Insurance on factory building 1,500 Raw materials (plastics, polystyrene, etc.) 75,000 Utility costs for factory 900 Supplies for general office 300 Wages for assembly line workers 58,000 Depreciation on office equipment 800 Miscellaneous materials (glue, thread, etc.) 1,100 Factory manager's salary 5,700 Property taxes on factory building 400 Advertising for helmets 14,000 Sales commissions 10,000 Depreciation on factory building 1,500 Margin check figures provide key numbers to confirm that you are on the right track. Instructions
(a) Prepare an answer sheet with the following column headings. Product Costs Cost Item Direct Materials Direct Labor Manufacturing Overhead Period Costs Enter each cost item on your answer sheet, placing the dollar amount under the appropriate headings. Total the dollar amounts in each of the columns. DM $75,000 DL $58,000 MO $22,100 PC $25,100
(b) Compute the cost to produce one helmet. P1-2A Classify manufacturing costs into different categories and compute the unit cost. (LO 2), AP Bell Company, a manufacturer of audio systems, started its production in October 2017.
Answer:
a)
Cost Item Direct Direct Manufacturing Period
materials labor overhead costs
Rent on $11,000
factory equip.
Insurance on $1,500
factory building
Raw $75,000
materials
Utility costs $900
for factory
Supplies for $300
general office
Wages for $58,000
assembly line
Dep. on office $800
equip.
Miscellaneous $1,100
materials
Factory manager's $5,700
salary
Property taxes $400
on factory building
Advertising $14,000
for helmets
Sales $10,000
commissions
Dep. on factory $1,500
building
TOTAL $75,000 $58,000 $22,100 $25,100
b) the cost to produce one helmet = total manufacturing costs / total output = ($75,000 + $58,000 + $22,100) / 10,000 helmets = $15.51
The following information concerns the intangible assets of Epstein Corporation: On June 30, 2021, Epstein completed the acquisition of the Johnstone Corporation for $2,420,000 in cash. The fair value of the net identifiable assets of Johnstone was $2,050,000. Included in the assets purchased from Johnstone was a patent that was valued at $91,200. The remaining legal life of the patent was 13 years, but Epstein believes that the patent will only be useful for another eight years. Epstein acquired a franchise on October 1, 2021, by paying an initial franchise fee of $250,800. The contractual life of the franchise is 11 years. Required: 1. Prepare year-end adjusting journal entries to record amortization expense on the intangibles at December 31, 2021. 2. Prepare the intangible asset section of the December 31, 2021, balance she
Answers:
a. Acquisition of cost of corporation = $2,420,000
Less: Fair value of net identifiable assets = $2,050,000
Cost of good will = $370,000
Note: Goods will is not amortized
b. Cost of patent purchase = $91,200
Legal life = 13 years
Estimated useful life= 8 years
Ammortization = Cost / Estimated useful life
= $91,200/8 years
=$11,400
Ammortization per annum is $11,400
Patent is purchased on 30/6/2021
Calculation of amortization for 6 months periods
Amortization for 6 months (July-December)= $11,400 * 6/12
=$5,700
Note: Amortization should be amortized on basis of their amortized value that is, 8 years.
c. Calculation of amortization cost for franchise
Cost = $250,800
Life=11
Purchased on 1/10/2021
Amortization = Cost / Estimated useful life
= $250,080/11
=$22,800
Amortization per annum is $22,800
Calculation of the amortization for 3 month period=
Amortization of 3 month (Oct-Dec.) = $22,800 * 3/12
=$5,700
d, Journal Entries Debit$ Credit$
Amortization Expenses 5,700
Patent 5,700
(To record the amortization expenses)
Amortization Expenses 5,700
Franchise 5,700
(To record the amortization expenses)
e. Partial Balance Sheet
Assets $ $
Current Assets
Long term Assets
Tangible assets 2,050,000
Intangible assets
Goodwill 370,000
Patent 91,200
Less: Accumulated Depreciation 11,400 79,800
Franchise 250,800
Less: Accumulated Depreciation 22,800 228,000
Bendel Incorporated has an operating leverage of 7.3. If the company's sales volume increases by 3%, its net operating income should increase by about:
Answer:
21.9%
Explanation:
Given that
Operating leverage = 7.3
Increase in sales = 3%
According to the given situation, the computation of net operating income is shown below:-
Increase in operating income = Operating leverage × Increase in sales
= 7.3 × 3 %
= 21.9%
Therefore for computing the increase in operating income we simply applied the above formula.
If a customer is reluctant to try a new product because she's afraid it might make her ill, the company offering it is most likely facing ________ barrier.
Answer: Risk barrier
Explanation:
With every new product or innovation, there is a risk that things will not work well. This risk is divided into 4 types;
Physical risk where the product might be harmful physicallyEconomic risk depending on the cost of the productPerformance risk Social Risk where a person wonders how the public will perceive them for using the product.The customer is facing a Physical risk barrier when she encountered the new product. As it has not been tried and tested by others, using it as a pioneer means that she will not know what she is getting into and so she worries that there is a chance it will harm her physically and make her ill.
Sager Industries is considering an investment in equipment that will replace direct labor. The equipment has a cost of $86,000 with a $7,000 residual value and a 10-year life. The equipment will replace three employees who has an average total wages of $15,810 per year. In addition, the equipment will have operating and energy costs of $4,190 per year. Determine the average rate of return on the equipment, giving effect to straight-line depreciation on the investment.
Answer:
130.77%
Explanation:
depreciation expense per year using straight method = (purchase cost - salvage value) / useful life = ($86,000 - $7,000) / 10 = $7,900
total costs = depreciation expense + operating and energy costs = $7,900 + $4,190 = $12,090
average rate of return = total savings / total costs = $15,810 / $12,090 = 1.30769 = 130.77%
A city mandates that all businesses who sell goods and services to the city must pay at least a living wage to their workers that is substantially above what low-skilled workers are currently being paid. Which of the following will result in a greater decrease in employment of low-skilled workers who were working for the affected businesses?
a. The city's demand for the services that businesses supply them in highly inelastic.
b. Low-skilled workers represent a small fraction of the costs of doing business with the city.
c. Higher-skilled workers are readily available at the higher wage.
d. Low-skilled workers are complements with other inputs providing city services.
Answer:
c. Higher-skilled workers are readily available at the higher wage.
Explanation:
the government decree would make the cost of hiring low skilled labour higher. As, a result there would be a reduction in the quantity demanded of low skilled labour.
if High skilled workers are readily available at the higher wage this would lead to a greater decrease in employment of low-skilled workers. Employers would ask themselves why pay the same high wages high skilled labour earns to low skilled labour when high skilled labour can be hired at the same price since most likely higher skilled workers would carry out the tasks better than lower skilled labour ?
The potential benefits lost by taking a specific action when two or more alternative choices are available is known as a(n):
Answer:
Opportunity costs
Explanation:
The potential benefits lost by taking a specific action when two or more alternative choices are available is known as opportunity costs.
Opportunity cost has to do with losing other alternatives by chosing to go with one alternative. Hence it is also called foregone alternative. It has to do with making a decision or choice to give up something in order to get something else which may be of more value.
Cheyenne Corp. had the following transactions during the current period.
Mar. 2 Issued 4,000 shares of $4 par value common stock to attorneys in payment of a bill for $21,200 for services performed in helping the company to incorporate.
June 12 Issued 56,400 shares of $4 par value common stock for cash of $305,500.
July 11 Issued 1,950 shares of $100 par value preferred stock for cash at $130 per share.
Nov. 28 Purchased 2,560 shares of treasury stock for $78,500.
Journalize the transactions.
Answer:
Mar. 2 Issued 4,000 shares of $4 par value common stock to attorneys in payment of a bill for $21,200 for services performed in helping the company to incorporate.
Dr Incorporation expenses 21,200
Cr Common stock 16,000
Cr Additional paid in capital - common stocks 5,200
June 12 Issued 56,400 shares of $4 par value common stock for cash of $305,500.
Dr Cash 305,500
Cr Common stocks 225,600
Cr Additional paid in capital - common stocks 79,900
July 11 Issued 1,950 shares of $100 par value preferred stock for cash at $130 per share.
Dr Cash 253,500
Cr Preferred stocks 195,000
Cr Additional paid in capital - preferred stocks 58,500
Nov. 28 Purchased 2,560 shares of treasury stock for $78,500.
Dr Treasury stocks 78,500
Cr Cash 78,500
Treasury stocks account is a contra equity account which decreases the value of stockholders' equity.
____________the market school aruges that forward exchange rates do the best possible job for forecasting future spot exchange rates, so investing in exchagne rate forecasting services would be a waste of time.
Answer:
Efficient market school.
Explanation:
Efficient market school is the market school which argues that forward exchange rates do the best possible job for forecasting future spot exchange rates, so investing in exchange rate forecasting services would be a waste of time because it is impossible to have a consistent alpha generation on a risk adjusted excess returns basis as market prices are only affected by new informations.
The efficient market school also known as the efficient market hypothesis (EMH) is a hypothesis that states that asset (share) prices reflect all information and it is very much impossible to consistently beat the market.
Also, forward exchange rates are exchange rates controlling foreign exchange transactions at a specific future date or time.
Hence, according to the efficient market school it would be a waste of time investing in exchange rate forecasting services because all the information about an asset or security is already factored into their prices and as a result of the randomness of the market.
the next dividend pwyment by Savitz, inc., will be 1.88 per share. YThe dividends are anticipated to maintain a growth rate of 4 percent forever. If the stock currently sells foe 37 per share, what is the required return?
Answer: 9.08%
Explanation:
Using the Gordon Growth model, a required return on a stock can be calculated if the stock price, next dividend and constant growth rate is given.
Stock Price = [tex]\frac{Next Dividend}{Required return - growth rate}[/tex]
37 = [tex]\frac{1.88}{r - 0.04}[/tex]
37(r - 0.04) = 1.88
r - 0.04 = 1.88/37
r = 1.88/37 + 0.04
r = 9.08%
Salty Sensations Snacks Company manufactures three types of snack foods: tortilla chips, potato chips, and pretzels. The company has budgeted the following costs for the upcoming period:
Factory depreciation $13,645
Indirect labor 33,817
Factory electricity 3,856
Indirect materials 8,010
Selling expenses 18,985
Administrative expenses 10,679
Total costs $88,992
Factory overhead is allocated to the three products on the basis of processing hours. The products had the following production budget and processing hours per case:
Budgeted Volume (Cases) Processing Hours Per Case
Tortilla chips 1,500 0.15
Potato chips 3,600 0.12
Pretzels 2,700 0.10
Total 7,800
Required:
a. Determine the single plant-wide factory overhead rate.
b. Use the factory overhead rate in (a) to determine the amount of total and per-case factory overhead allocated to each of the three products under generally accepted accounting principles.
Answer:
a. $64 per hour
b. Tortilla chips = $9.60, Potato chips = $7.68 , Pretzels = $6.40
Explanation:
Plant-wide factory overhead rate = Budgeted Overhead / Budgeted Activity
Calculation of Budgeted Overheads :
Hint : Consider only Indirect Manufacturing Costs
Factory depreciation $13,645
Indirect labor $33,817
Factory electricity $3,856
Indirect materials $8,010
Total $59,328
Calculation of Budgeted Hours :
Tortilla chips (1,500 × 0.15) = 225
Potato chips (3,600 × 0.12) = 432
Pretzels (2,700 × 0.10 ) = 270
Total = 927
Plant-wide factory overhead rate = $59,328 / 927
= $64 per hour
Factory overhead allocated to each of the three products :
Tortilla chips (0.15 × $64) = $9.60
Potato chips 0.12 × $64) = $7.68
Pretzels (0.10 × $64) = $6.40
Les is concerned that his variable cost per unit projection for a project may not be reliable. Which type of analysis will best help him determine the effect that an incorrect variable cost estimate could have on the final outcome of the project
Answer:
Cost Volume Profit Analysis (CVP)
Explanation:
The Cost Volume Profit Analysis (CVP) shows the change in profit or loss as a result of change in the (1) cost structure (variable and fixed costs), (2) sales revenue and (3) level of activity.
Thus this would be helpful to Les in determining the effect that an incorrect variable cost estimate could have on the final outcome of the project by altering the cost structure.
Stu deposited $400 in an account three years ago. Last year, he deposited $250 and plans to deposit $300 next year. The rate is 3 percent. Which one of these correctly states a portion of the formula needed to compute the future value five years from today
Answer and Explanation:
Future value = Present value x (1+i)^n, where
n = number of years
I = interest rate
From the question n = 8 years for the amount $400 ,
n= 7years for $250 ,
n=4years for $300
interest = 3%= 0.03
Future value of $400 = 400 (1 + 0.03)^8 = $506.71
Future value of $ 250 = 250 (1+0.03)^7 = $307.47
Future value of $ 300 =300(1+0.03)^4 = $337.65
In the U.S., the command-and-control environmental laws of the early 1970s, together with the ensuing amendments and updates that have been made to them over time,
A. were necessary as US industries had zero incentive to control pollution.
B. were an inexpensive incentive for industrial polluters to improve performance.
C. are given considerable credit for cleaner air and water in recent decades.
D. draws distinctions between the needs of firms and costly equipment upgrades.
The correct answer is C. are given considerable credit for cleaner air and water in recent decades.
Explanation:
The command-and-control environmental laws are a set of policies first proposed in the early 1970s that protected the environment by limiting the pollution levels. Also, the government demanded certain changes in production methods or the use of technologies to reduce pollution.
Moreover, these regulations are considered to be the main factor that contributed to the reduction in air and water pollution because since the laws were approved air and water pollution had decreased in the country. Also, it is believed these laws protected ecosystems and natural resources, which contributes to the conservation of nature. Thus, these laws "are given considerable credit for cleaner air and water in recent decades".
Many companies secure financing from various sources with various payback periods. Not all funding sources are the same, and in fact, some can come with a pretty high cost to the firm. These costs could include high interest rates, long payback periods, and increased ownership in the firm which could result in lost control.
Please analyze the funding options listed, and determine if the option is usually a short-term or long-term strategy.
a. Line of credit
b. Commercial paper
c. Trade credit Bank loan of 10 months
d. Bond
e. Stock
f. Bank loan of 20 months
Answer:
a. Line of credit - Long-term strategy
A line of credit is a long-term strategy because businesses obtain lines of credit for their use over long periods of time. The particular characteristic is that a line of credit is only used when the business decides to do so, so it works almost like a credit card.
b. Commercial paper - Short-term strategy
Commercial paper is a short-term debt that is issued by firms when they have problems to pay operating expenses. They are unsecured, and pay a specific amount of interest.
c. Trade credit Bank loan of 10 months - Short-term strategy
In financial accounting, loans that last for less than a year are categorized as short-term liabilities, therefore, a trade credit bank loan of 10 months is a short-term strategy.
d. Bond - Long-term strategy
While some bonds are issued for the short-term, the majority of them are issued for the long-term, with some of them lasting 10 years or more.
e. Stock - Long-term strategy
Buying or issuing stock is also a long-term strategy, specially because the dividend of the stock is only paid out once every year, unlike other debt instruments that pay interest immediately.
f. Bank loan of 20 months - Long-term strategy
A bank loan of more than 1 years is considered a long-term liability in financial accounting, therefore, a bank loan of 20 months is part of a long-term strategy.
Analyzing the given funding options and placing them in their right categories would be:
A. Line of credit - Long-term strategy B. Commercial paper - Short-term strategy C. Trade credit Bank loan of 10 months - Short-term strategy D. Bond - Long-term strategy E. Stock - Long-term strategy F. Bank loan of 20 months - Long-term strategyA long term strategy is one which financial institutions use to secure their assets for the foreseeable future while a short term strategy is used for short term gains on stocks and finances.
With this in mind, we can see that there are different funding options which are short or long term as the case may be, which depends on the amount of profit which the business wants to accrue.
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https://brainly.com/question/24349475
For a risk-free return rate of 5%, a market risk premium of 6%, what is the required rate of return for a security with a beta coefficient of 1.5?
Answer:
14%
Explanation:
required rate of return = risk free rate of return + ( risk premium x beta)
5% + 1.5 x 6% = 14%
Farrow Co. expects to sell 200,000 units of its product in the next period with the following results:
Sales (200,000 units) $3,000,000
Costs and expenses:
Direct materials 400,000
Direct labor 800,000
Overhead 200,000
Selling expenses 300,000
Administrative expenses 514,000
Total costs and expenses 2,214,000
Net income $786,000
The company has an opportunity to sell 20,000 additional units at $13 per unit. The additional sales would not affect its current expected sales. Direct materials and labor costs per unit would be the same for the additional units as they are for the regular units. However, the additional volume would create the following incremental costs:
1. total overhead would increase by 15%
2. administrative expenses would increase by $86,000.
Required:
Calculate the combined total net income if the company accepts the offer to sell additional units at the reduced price of $13 per unit.
Answer:
Combined net income =$810,000
Explanation:
In order to carry out an incremental analysis, only relevant cash flows should be considered.
The relevant cash flows from accepting the special order are the variable costs and the sales revenue plus the incremental cost of overhead and administrative cost . Please, note that the fixed costs are not relevant for this decision. Simply because they would be incurred either way.
The relevant cash flows include:
The sales revenueThe variable cost And the increase in overhead and administrative costSelling price per unit = $13
Variable cost per unit of additional sales
= (Direct material + Direct labour cost)/200,000 = 6
Analysis of incremental net income
$
Additional sales revenue ( 13×× 20,000) = 260,000
Incremental variable cost (6 × 20,000) = 120000
Incremental overhead (15%× 200,000) = (30000)
Incremental admin cost (86,000)
Net income from additional sales 24,000
Combined net income = original Net income + Additional net income
= 786,000 + 24000 = $810,000
Combined net income =$810,000
A perfectly competitive firm has a. A perfectly elastic demand for its products b. A perfectly inelastic demand for its products c. A downward sloping demand for its products d. None of the above
Answer: a. A perfectly elastic demand for its products
Explanation:
In a Perfect Competition, the market sets the price at which firms are able to sell their goods and services. As a result, this price that is set is equal to the demand for goods and services thereby making the Demand curve a horizontal line which signifies perfect elasticity. What this shows is that if another firm attempts to sell the same good at a higher price, they will be unable to sell.
With Price being equal to demand it will also be equal to both Marginal and Average revenue for the good because the company receives the same additional revenue for every unit sold.
The Polishing Department of Bonita Company has the following production and manufacturing cost data for September. Materials are entered at the beginning of the process. Production: Beginning inventory 1,580 units that are 100% complete as to materials and 30% complete as to conversion costs; units started during the period are 41,200; ending inventory of 6,600 units 10% complete as to conversion costs.
Manufacturing costs: Beginning inventory costs, comprised of $20,600 of materials and $14,674 of conversion costs; materials costs added in Polishing during the month, $186,883; labor and overhead applied in Polishing during the month, $127,600 and $257,440, respectively.
Required:
a. Compute the equivalent units of production for materials and conversion costs for the month of September.
b. Compute the unit costs for materials and conversion costs for the month.
c. Determine the costs to be assigned to the units transferred out and in process.
Answer:
a. materials = 42,780 and conversion costs = 36,840
b. materials = $4.85 and conversion costs = $10.85
c. units transferred out = $568,026 and in process = $39,171
Explanation:
First calculate the number of units completed and transferred out of the Polishing Department.
Units completed and transferred out = 1,580 + 41,200 - 6,600
= 36,180
Calculation of equivalent units of production for materials and conversion costs for the month of September
materials
Units completed and transferred out (36,180 × 100%) = 36,180
Units of Ending Work In Process (6,600 × 100%) = 6,600
Total equivalent units of production for materials = 42,780
conversion costs
Units completed and transferred out (36,180 × 100%) = 36,180
Units of Ending Work In Process (6,600 × 10%) = 660
Total equivalent units of production for conversion costs = 36,840
Calculate the unit costs for materials and conversion costs for the month
Unit costs for materials = Total Cost for materials / Total equivalent units of production for materials
= ( $20,600 + $186,883) / 42,780
= $4.85
Unit costs for conversion costs = Total Cost for conversion costs / Total equivalent units of production for conversion costs
= ( $14,674 + $127,600 + $257,440) / 36,840
= $10.85
Total unit cost = $4.85 + $10.85
= $15.70
Calculate the costs to be assigned to the units transferred out and in process.
Cost units transferred out = Number of Units Transferred out × Total Unit Cost
= 36,180 × $15.70
= $568,026
Cost of Units In Process Calculation :
Material Cost ( 6,600 × $4.85) = $32,010
Conversion Costs ( 660 × $10.85) = $7,161
Total Cost of Units In Process = $39,171
Farrow Co. expects to sell 400,000 units of its product in the next period with the following results.
Sales (400,000 units) $ 6,000,000
Costs and expenses
Direct materials 800,000
Direct labor 1,600,000
Overhead 400,000
Selling expenses 600,000
Administrative expenses 1,028,000
Total costs and expenses 4,428,000
Net income $ 1,572,000
The company has an opportunity to sell 40,000 additional units at $12 per unit. The additional sales would not affect its current expected sales. Direct materials and labor costs per unit would be the same for the additional units as they are for the regular units. However, the additional volume would create the following incremental costs: (1) total overhead would increase by 16% and (2) administrative expenses would increase by $172,000.
Calculate the combined total net income if the company accepts the offer to sell additional units at the reduced price of $12 per unit.
Normal Volume Additional Volume Combined Total
Costs and expenses:
Total costs and expenses
Incremental income (loss)
from new business
Answer:
the combined total net income = $ 1,576,000
Incremental Income = $4,000
Explanation:
Calculation of the combined total net income if the company accepts the offer to sell additional units at the reduced price of $12 per unit.
Sales (400,000 units) $ 6,000,000
Additional Sales (40,000 units × $12) $480,000
Combined Sales $6,480,000
Costs and expenses :
Direct materials (800,000 + (800,000 / 400,000 × 40,000)) ( $880,000)
Direct labor (1,600,000 + (1,600,000 / 400,000 × 40,000)) ( $1,760,000)
Overhead 400,000 × 1.16 ($464,000)
Selling expenses ($600,000 )
Administrative expenses ($1,028,000 + $172,000) ($1,200,000)
Net income $ 1,576,000
Incremental Income / (loss)
Net Income After Accepting Offer $ 1,576,000
Less Income Before Accepting Offer $ 1,572,000
Incremental Income / (loss) $4,000
At December 31, 2017, Hawke Company reports the following results for its calendar year.
Cash sales $1,905,000
Credit sales 5,682,000.
In addition, its unadjusted trial balance includes the following items.
Accounts receivable $1,270,100 debit
Allowance for doubtful accounts 16,580 debit
Reqiured:
1. Prepare the adjusting entry for this company to recognize bad debts under each of the following independent assumptions.
A. Bad debts are estimated to be 1.5% of credit sales.
B. Bad debts are estimated to be 1% of total sales.
C. An aging analysis estimates that 5% of year-end accounts receivable are uncollectible.
2. Show how Accounts Receivable and the Allowance for Doubtful Accounts appear on its December 31, 2015, balance sheet given the facts in part 1a.
3. Show how Accounts Receivable and the Allowance for Doubtful Accounts appear on its December 31, 2015, balance sheet given the facts in part 1c.
Answer:
Hawke Company
1. Adjusting Entries to recognize bad debts under the following independent assumptions:
A. Bad debts are estimated to be 1.5% of credit sales:
Debit Bad Debts Expense $73,400
Credit Allowance for Doubtful Accounts $73,400
To record bad debts expenses and bring the allowance for doubtful accounts balance to $56,820.
B. Bad debts are estimated to be 1% of total sales:
Debit Bad Debts Expense $92,450
Credit Allowance for Doubtful Accounts $92,450
To record bad debts expenses and bring the allowance for doubtful accounts balance to $75,870.
C. An aging analysis estimates that 5% of year-end accounts receivable are uncollectible:
Debit Bad Debts Expense $80,085
Credit Allowance for Doubtful Accounts $80,085
To record bad debts expenses and bring the allowance for doubtful accounts balance to $63,505.
2. Balance Sheet as of December 31, 2015:
A. Accounts Receivable $1,270,100
less allowance for doubtful accounts 56,820
Net balance $1,213,280
3. Balance Sheet as of December 31, 2015:
C. Accounts Receivable $1,270,100
less allowance for doubtful accounts 63,505
Net balance $1,206,595
Explanation:
a) Data:
Cash sales $1,905,000
Credit sales 5,682,000
Accounts Receivable $1,270,100
Allowance for doubtful accounts $16,580 debit
1. Bad debts = 1.5% of $5,682,000 = $56,820
2. Bad debts are estimated to be 1% of total sales:
Bad debts = 1% of $7,587,000 = $75,870
3. An aging analysis estimates that 5% of year-end accounts receivable are uncollectible:
Bad debts = 5% of $1,270,100 = $63,505
The adjusting entries to recognize bad debts including how Accounts Receivable and the Allowance for Doubtful Accounts appear on its December 31, 2015 balance sheet are:
1a. Journal entry to estimate Bad debts at 1.5% of credit sales.
First step is to calculate the Bad debt accrual
Bad debt accrual=Total credit sales × Bad debt accrual percentage
Bad debt accrual=$ 5,682,000×1.5%
Bad debt accrual=$85,230
Second step is to calculate Bad debt expense for Dec 31
Bad debt accrual $85,230
Less Allowance for doubtful account balance ($16,580)
Bad debt expense for Dec 31 $101,810
Third step is to prepare the Adjusting Entry
Debit Bad debt expense $101,810
Credit Allowance for doubtful account $101,810
(To record Bad debts at 1.5% of credit sales)
1b. Journal entry to estimate Bad debts at 1% of credit sales.
First step is to calculate the Bad debt accrual
Total credit sales $5,682,000
Total cash sales $1,905,000
Total sales $7,587,000
($5,682,000+$1,905,000)
Bad debt accrual % 1%
Bad debt accrual $75,870
($7,587,000× 1%)
Second step is to calculate Bad debt expense for Dec 31
Bad debt accrual $75,870
Less Allowance for doubtful account balance ($16,580)
Bad debt expense for Dec 31 $92,450
Third step is to prepare the Adjusting Entry
Debit Bad debt expense $92,450
Credit Allowance for doubtful account $92,450
(To record Bad debts at 1% of credit sales)
1c. Journal entry to estimate 5% of year-end accounts receivable are uncollectible
First step is to calculate the Bad debt accrual
Accounts Receivable $1,270,100
Bad debt accrual % 5.0%
Bad debt accrual $63,505
($1,270,100×5%)
Second step is to calculate Bad debt expense for Dec 31
Bad debt accrual $63,505
Less Allowance for doubtful account balance ($16,580)
Bad debt expense for Dec 31 $80,085
Third step is to prepare the Adjusting Entry
Debit Bad debt expense $80,085
Credit Allowance for doubtful account $80,085
(To record accounts receivable uncollectible)
2. How Accounts Receivable and the Allowance for Doubtful Accounts should appear on its December 31, 2015, balance sheet:
Balance Sheet as on December 31, 2015
Accounts Receivable (gross) $1,270,100
Less: Allowance for doubtful accounts $101,810
Accounts Receivable (net) $1,168,290
3. How Accounts Receivable and the Allowance for Doubtful Accounts should appear on its December 31, 2015, balance sheet:
Balance Sheet as on December 31, 2015
Accounts Receivable (gross) $1,270,100
Less: Allowance for doubtful accounts $80,085
Accounts Receivable (net) $1,190,015
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The table below represents how Marco feels about chocolate candy bars.
a. Fill in the missing values for total and marginal utility.
Marco's Utility
Chocolate Candy Bars Total Utility (utils) Marginal Utility (utils)
0 0 —
1 25
2 17
3 54
4
5 66 4
6 –1
b. Suppose Marco currently has two candy bars. You tell Marco you will give him either a soda, which gives him 22 utils of happiness, or two additional candy bars. Which is he likely to prefer?
options soda or two extra candy bars
Answer:
A. Chocolate Candy Bars Total Utility (utils) Marginal Utility (utils
0 0 —
1 25 25
2 42 17
3 54 12
4 62 8
5 66 4
6 65 –1
2. Soda
Explanation:
A.Chocolate Candy Bars Total Utility (utils) Marginal Utility (utils)
0 0 —
1 25 25
2 42 17
3 54 12
4 62 8
5 66 4
6 65 –1
1. In a situation where the consumption go up from 0 to 1, this means that total utility will from 0 to 25.
Therefore the , marginal utility will be 25 (25 – 0).
2. Total utility will be 42(25+17)
3. Marginal utility will be 12 (54-42)
4. The total utility for quantity of 5 is 66, while the marginal utility is 4.
Hence the total utility will be 62 (66 – 4) while marginal utility will be 4(12-8)
6. Total utility will be 65(66-1)
B. Based on( A )above Marco already has two candy bars, which gave him a total utility of 42 this means that when we Add soda his utility would increase to 64 (42 + 22)
And in a situation where he consumes four candy bars which is 2 candy bars + another 2 extra candy bars this means his utility will be only 62.
Based on this Soda will be the preferred one
What are the most challenging concepts for you to understand? Have you found any supplemental resources or websites that have helped you to better comprehend the material? T- Accounts
Answer:
finding every form of verbs is difficult. spanishdict is very helpful
Explanation:
www.spanishdict.com
A corporation has 50,000 shares of $25 par stock outstanding. If the corporation issues a 3-for-1 stock split, the number of shares outstanding after the split will be a.50,000 shares b.100,000 shares c.150,000 shares d.16,666 shares
Answer:
Option C
Number of shares outstanding after split = 150,000 units
Explanation:
A stock split occurs where a company creates additional shares in units such the total nominal value of the outstanding shares remains the same. With a stock split, the total outstanding shares increases without a change in the total nominal value while the nominal value per share reduces.
Total shares before the split = 50,000
Total outstanding shares after split
= 50,000 × 3 = 150,000
Number of shares outstanding after split = 150,000 units
The perceived demand for a monopolistic competitor
For a variety of reasons, a bank sometimes will hold more reserves than is legally required. These reserves are known as excess reserves. How does holding excess reserves affect the degree to which the money supply will change
Answer: D. The money supply will decrease as banks loan out less money.
Explanation:
The money supply in the Economy is inversely related to the amount of reserves that a bank holds. This is because the higher the reserves held, the less the banks will have to borrow out and the less new money can be created from the money loaned out. Holding excess reserves therefore results in less money supply.
Exercise D Viking Corporation is operating at 80% of capacity, which means it produces 8,000 units. Variable cost is $100 per unit. Wholesaler Y offers to buy 2,000 additional units at $120 per unit. Wholesaler Z proposes to buy 1,500 additional units at $140 per unit. Which offer, if either, should Viking Corporation accept
Answer:
Results are below.
Explanation:
Giving the following information:
The variable cost is $100 per unit.
Wholesaler Y offers to buy 2,000 additional units at $120 per unit.
Wholesaler Z proposes to buy 1,500 additional units at $140 per unit.
We need to choose the best alternative, in this case, the one with the higher increase in income:
Effect on income= total contribution margin
Wholesaler Y:
Effect on income= 2,000*(120 - 100)= $40,000 increase
Wholesaler Z:
Effect on income= 1,500*(140 - 100)= $60,000 increase
The best option is to sell the units to Wholesaler Z. If Wholesaler Y accepts, you can still sell 500 more units.
When a negative amount is in the base period and a positive amount is in the analysis period (or vice versa), a meaningful percent change cannot be calculated.
A. True
B. False
Answer:
false
Explanation:
for example, the base year has a value of -10 and the period of analysis as a value of 5, percentage change is -1.5 or 150%
the base year has a value of 5 and the period of analysis as a value of -10 percentage change is -300%
During 2016, Basler Manufacturing produced 60,000 units and sold 55,000 for $10 per unit. Variable manufacturing costs were $5 per unit. Annual fixed manufacturing overhead was $120,000 ($2 per unit). Variable selling and administrative costs were $1 per unit sold, and fixed selling and administrative costs were $30,000.
Required:
Prepare an absorption costing income statement.
Answer:
Instructions are below.
Explanation:
Giving the following information:
Production= 60,000 units
Units sold= 55,000
Selling price per unit= $10
Variable manufacturing costs were $5 per unit.
Annual fixed manufacturing overhead was $120,000 ($2 per unit). Variable selling and administrative costs were $1 per unit sold
Fixed selling and administrative costs were $30,000.
The absorption costing method includes the unitary fixed overhead costs to the cost of goods sold.
Sales= 55,000*10= 550,000
COGS= (5 + 2)*55,000= (385,000)
Gross profit= 165,000
Total selling and administrative costs=(1*55,000)+30,000= (85,000)
Net operating income= 80,000
Oriole Company reports the following for the month of June. Date Explanation Units Unit Cost Total Cost June 1 Inventory 390 $6 $2,340 12 Purchase 780 7 5,460 23 Purchase 585 8 4,680 30 Inventory 195 Assume a sale of 858 units occurred on June 15 for a selling price of $9 and a sale of 702 units on June 27 for $10. Calculate cost of goods available for sale. The cost of goods available for sal
Answer:
Cost of goods available for sale = $12,480
Explanation:
The cost of goods available for sale is the sum of the value of the opening inventory plus the cost of new purchase. The cost of new purchase would include carriage inward cost if any.
For Oriole company , the cost of goods available for sale would be computed as follows:
$
Opening inventory 2,340
Purchases
June 12 5,460
June 23 4,680 10,140
Cost of goods available for sale 12,480
Note that the sales made are not relevant for the purpose of determining the cost of goods available for sale. Also, the closing inventory would have been deducted from the cost of goods available for sale to arrive at the cost of goods sold should the question require it.